Valvoline Inc. has announced preliminary financial results for the fourth quarter and fiscal year ended Sept. 30, 2016.
In its first quarter as a public company, Valvoline reported increases in lubricant volumes and sales of 2 percent, or 43.5 million gallons to 44.5 million gallons and $484 million to $494 million, respectively. Net income for the quarter was $65 million, leading to earnings per diluted share of 32 cents. The company also reported a 12 percent increase in adjusted earnings before interest, taxes, depreciation and amortization (adjusted EBITDA) and adjusted earnings per diluted share growth of 4 percent from 28 cents to 29 cents.
The company said these solid fourth quarter results were driven by growth in premium product sales, sound execution with channel partners, significant increases in same store sales and store count, and by the February acquisition of 89 Oil Can Henry’s stores. Continued volume growth in emerging markets also contributed to Valvoline’s productive quarter.
For fiscal 2016, Valvoline reported a 4 percent increase in lubricant volume to 174.5 million gallons. Net income for the year was $273 million leading to earnings per diluted share of $1.33. The company also reported a 9 percent increase in adjusted EBITDA, reaching $457 million, and adjusted earnings per share diluted share (EPS) growth of 6 percent from $1.24 to $1.31. The company said sales mix was strong during the year with premium lubricant volume growing in both Core North America and Quick Lubes. Reduced product selling prices reflecting lower raw material costs offset favorable mix, leading to a 2 percent decline in sales.
Valvoline’s strategy to invest in and grow market share across its three business segments – Core North America, Quick Lubes and International – has produced strong results through enhanced distribution to retail and installer customers; 10 straight years of same-store sales growth at Valvoline Instant Oil Change (VIOC); and continued strength in international growth markets, including China, India and Mexico.
Separation from Ashland and Initial Public Offering
On Sept. 28, Valvoline completed the initial public offering (IPO) of its common stock at a price of $22 per share, taking the first step in separating from Ashland and establishing a new shareholder base, reflecting the midcap consumer brand nature of the business. In addition to raising $759 million in equity capital at the time of the IPO, Valvoline raised $750 million of corporate debt. Ashland continues to own 83 percent of Valvoline’s outstanding common stock.
“Our operational separation from Ashland is a seminal event in Valvoline’s 150-year history as it gives us the agility to pursue growth opportunities unique to a stand-alone company in our industry,” said CEO Sam Mitchell. “Valvoline’s strong leadership team, supported by its dedicated employees, was instrumental in ensuring a smooth transition, while delivering a record year and maintaining the strong performance needed to position the Company for future success,” said Mitchell.
