Company Quick10K Filing
Valvoline
Price21.88 EPS1
Shares189 P/E20
MCap4,135 P/FCF13
Net Debt1,192 EBIT265
TEV5,327 TEV/EBIT20
TTM 2019-09-30, in MM, except price, ratios
10-Q 2020-06-30 Filed 2020-08-04
10-Q 2020-03-31 Filed 2020-05-07
10-Q 2019-12-31 Filed 2020-02-04
10-K 2019-09-30 Filed 2019-11-22
10-Q 2019-06-30 Filed 2019-08-01
10-Q 2019-03-31 Filed 2019-05-02
10-Q 2018-12-31 Filed 2019-02-07
10-K 2018-09-30 Filed 2018-11-21
10-Q 2018-06-30 Filed 2018-08-02
10-Q 2018-03-31 Filed 2018-05-03
10-Q 2017-12-31 Filed 2018-02-08
10-K 2017-09-30 Filed 2017-11-17
10-Q 2017-06-30 Filed 2017-08-08
10-Q 2017-03-31 Filed 2017-04-28
10-Q 2016-12-31 Filed 2017-02-13
10-K 2016-09-30 Filed 2016-12-19
8-K 2020-08-03 Earnings, Regulation FD
8-K 2020-07-07 Regulation FD, Other Events
8-K 2020-06-04
8-K 2020-05-22
8-K 2020-05-08
8-K 2020-05-06
8-K 2020-04-23
8-K 2020-04-22
8-K 2020-03-24
8-K 2020-03-24
8-K 2020-02-25
8-K 2020-02-10
8-K 2020-02-03
8-K 2020-01-30
8-K 2019-11-14
8-K 2019-11-06
8-K 2019-09-04
8-K 2019-07-30
8-K 2019-07-17
8-K 2019-05-16
8-K 2019-05-01
8-K 2019-04-12
8-K 2019-02-06
8-K 2019-01-31
8-K 2018-11-19
8-K 2018-11-05
8-K 2018-08-01
8-K 2018-07-13
8-K 2018-05-17
8-K 2018-05-02
8-K 2018-05-02
8-K 2018-02-07
8-K 2018-01-31

VVV 10Q Quarterly Report

Part I - Financial Information
Item 1. Financial Statements
Note 1 - Basis of Presentation and Significant Accounting Policies
Note 2 - Leasing
Note 3 - Fair Value Measurements
Note 4 - Acquisitions and Divestitures
Note 5 - Intangible Assets
Note 6 - Restructuring Activities
Note 7 - Debt
Note 8 - Income Taxes
Note 9 - Employee Benefit Plans
Note 10 - Litigation, Claims and Contingencies
Note 11 - Earnings per Share
Note 12 - Reportable Segment Information
Note 13 - Supplemental Financial Information
Note 14 - Guarantor Financial Information
Note 15 - Subsequent Events
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II - Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 6. Exhibits
EX-31.1 exhibit311-certificati.htm
EX-31.2 exhibit312-certificati.htm
EX-32 exhibit32-certificatio.htm

Valvoline Earnings 2020-06-30

Balance SheetIncome StatementCash Flow
2.11.61.10.60.1-0.42017201820192020
Assets, Equity
0.70.50.40.20.1-0.12017201820192020
Rev, G Profit, Net Income
0.40.30.1-0.0-0.2-0.32017201820192020
Ops, Inv, Fin

vvv-20200630
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.  20549
______________________
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2020
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________ to ___________
Commission file number 001-37884
VALVOLINE INC.

vvv-20200630_g1.jpg

Kentucky
30-0939371
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
100 Valvoline Way
Lexington, Kentucky 40509
Telephone Number (859) 357-7777

Securities registered pursuant to Section 12(b) of the Act:

Title of each classTrading Symbol(s)Name of each exchange on which registered
Common stock, par value $0.01 per shareVVVNew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.      Yes þ     No  o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).         Yes þ     No  o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer
Accelerated filer
Non-accelerated filer
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).   Yes      No þ
At July 31, 2020, there were 185,035,286 shares of the registrants common stock outstanding.



VALVOLINE INC. AND CONSOLIDATED SUBSIDIARIES
TABLE OF CONTENTS


Page
PART I – FINANCIAL INFORMATION
PART II – OTHER INFORMATION

2


PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Valvoline Inc. and Consolidated Subsidiaries
Condensed Consolidated Statements of Comprehensive Income

Three months ended June 30Nine months ended June 30
(In millions, except per share amounts - unaudited) 2020201920202019
Sales$516  $613  $1,701  $1,761  
Cost of sales329  406  1,096  1,168  
Gross profit187  207  605  593  
Selling, general and administrative expenses106  116  319  334  
Net legacy and separation-related expenses1      3  
Equity and other income, net(8) (11) (23) (29) 
Operating income88  102  309  285  
Net pension and other postretirement plan income(9) (2) (27) (7) 
Net interest and other financing expenses19  19  73  55  
Income before income taxes78  85  263  237  
Income tax expense19  20  68  56  
Net income$59  $65  $195  $181  
NET EARNINGS PER SHARE
Basic$0.32  $0.34  $1.04  $0.96  
Diluted$0.32  $0.34  $1.04  $0.96  
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
Basic186  189  187  189  
Diluted186  189  188  189  
COMPREHENSIVE INCOME
Net income$59  $65  $195  $181  
Other comprehensive income (loss), net of tax
Currency translation adjustments10  1  (3) (1) 
Amortization of pension and other postretirement plan prior service credit(3) (3) (7) (7) 
Other comprehensive income (loss)7  (2) (10) (8) 
Comprehensive income$66  $63  $185  $173  

See Notes to Condensed Consolidated Financial Statements.
3


Valvoline Inc. and Consolidated Subsidiaries
Condensed Consolidated Balance Sheets
(In millions, except per share amounts - unaudited)June 30
2020
September 30
2019
Assets
Current assets
Cash and cash equivalents$751  $159  
Receivables, net396  401  
Inventories, net189  194  
Prepaid expenses and other current assets43  43  
Total current assets1,379  797  
Noncurrent assets
Property, plant and equipment, net559  498  
Operating lease assets261    
Goodwill and intangibles, net510  504  
Equity method investments39  34  
Deferred income taxes82  123  
Other noncurrent assets133  108  
Total noncurrent assets1,584  1,267  
Total assets$2,963  $2,064  
Liabilities and Stockholders’ Deficit
Current liabilities
Current portion of long-term debt$  $15  
Trade and other payables178  171  
Accrued expenses and other liabilities254  237  
Total current liabilities432  423  
Noncurrent liabilities
Long-term debt1,953  1,327  
Employee benefit obligations350  387  
Operating lease liabilities231    
Other noncurrent liabilities185  185  
Total noncurrent liabilities2,719  1,899  
Commitments and contingencies
Stockholders deficit
Preferred stock, no par value, 40 shares authorized; no shares issued and outstanding
    
Common stock, par value $0.01 per share, 400 shares authorized; 185 and 188 shares issued and outstanding at June 30, 2020 and September 30, 2019, respectively
2  2  
Paid-in capital20  13  
Retained deficit(211) (284) 
Accumulated other comprehensive income1  11  
Total stockholders’ deficit(188) (258) 
Total liabilities and stockholders deficit
$2,963  $2,064  

See Notes to Condensed Consolidated Financial Statements.
4


Valvoline Inc. and Consolidated Subsidiaries
Condensed Consolidated Statements of Stockholders’ Deficit
Nine months ended June 30, 2020
Accumulated other comprehensive income (loss)
(In millions, except per share amounts - unaudited)Common stockPaid-in capitalRetained deficit
SharesAmountTotals
Balance at September 30, 2019188  $2  $13  $(284) $11  $(258) 
Net income—  —  —  73  —  73  
Dividends paid, $0.113 per common share
—  —  —  (21) —  (21) 
Stock-based compensation, net of issuances—  —  3  —  —  3  
Cumulative effect of adoption of new leasing standard, net of tax—  —  —  1  —  1  
Currency translation adjustments—  —  —  —  8  8  
Amortization of pension and other postretirement prior service credits in income, net of tax—  —  —  —  (2) (2) 
Balance at December 31, 2019188  $2  $16  $(231) $17  $(196) 
Net income—  —  —  63  —  63  
Dividends paid, $0.113 per common share
—  —  —  (21) —  (21) 
Repurchase of common stock(3) —  —  (60) —  (60) 
Currency translation adjustments—  —  —  —  (21) (21) 
Amortization of pension and other postretirement prior service credits in income, net of tax—  —  —  —  (2) (2) 
Balance at March 31, 2020185  $2  $16  $(249) $(6) $(237) 
Net income—  —  —  59  —  59  
Dividends paid, $0.113 per common share
—  —  —  (21) —  (21) 
Stock-based compensation, net of issuances—  —  4  —  —  4  
Currency translation adjustments—  —  —  —  10  10  
Amortization of pension and other postretirement prior service credits in income, net of tax—  —  —  —  (3) (3) 
Balance at June 30, 2020185  $2  $20  $(211) $1  $(188) 
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Nine months ended June 30, 2019
Accumulated other comprehensive income
(In millions, except per share amounts - unaudited)Common stockPaid-in capitalRetained deficit
SharesAmountTotals
Balance at September 30, 2018188  $2  $7  $(399) $32  $(358) 
Net income—  —  —  53  —  53  
Dividends paid, $0.106 per common share
—  —  —  (20) —  (20) 
Stock-based compensation, net of issuances—  —  1  —  —  1  
Cumulative effect of adoption of new revenue standard, net of tax—  —  —  (13) —  (13) 
Currency translation adjustments—  —  —  —  (4) (4) 
Amortization of pension and other postretirement prior service credits in income, net of tax—  —  —  —  (2) (2) 
Balance at December 31, 2018188  $2  $8  $(379) $26  $(343) 
Net income—  —  —  63  —  63  
Dividends paid, $0.106 per common share
—  —  —  (20) —  (20) 
Stock-based compensation, net of issuances—  —  2    —  2  
Currency translation adjustments—  —  —  —  2  2  
Amortization of pension and other postretirement prior service credits in income, net of tax—  —  —  —  (2) (2) 
Balance at March 31, 2019188  $2  $10  $(336) $26  $(298) 
Net income—  —  —  65  —  65  
Dividends paid, $0.106 per common share
—  —  —  (20) —  (20) 
Stock-based compensation, net of issuances—  —  3  —  —  3  
Currency translation adjustments—  —  —  —  1  1  
Amortization of pension and other postretirement prior service credits in income—  —  —  —  (3) (3) 
Balance at June 30, 2019188  $2  $13  $(291) $24  $(252) 

See Notes to Condensed Consolidated Financial Statements.
6


Valvoline Inc. and Consolidated Subsidiaries
Condensed Consolidated Statements of Cash Flows
Nine months ended
June 30
(In millions - unaudited)20202019
Cash flows from operating activities
Net income$195  $181  
Adjustments to reconcile net income to cash flows from operating activities
Loss on extinguishment of debt19    
Depreciation and amortization48  43  
Equity income from unconsolidated affiliates, net of distributions
(3) (4) 
Pension contributions(9) (7) 
Stock-based compensation expense8  8  
Other, net4  2  
Change in assets and liabilities
Receivables13  (48) 
Inventories3  (11) 
Payables and accrued liabilities(10) 34  
Other assets and liabilities3  16  
Total cash provided by operating activities271  214  
Cash flows from investing activities
Additions to property, plant and equipment(94) (73) 
Notes receivable, net of repayments(31) (2) 
Acquisitions of business(18) (50) 
Other investing activities, net  1  
Total cash used in investing activities(143) (124) 
Cash flows from financing activities
Proceeds from borrowings1,547  745  
Payments of debt issuance costs and discounts(16) (2) 
Repayments on borrowings(925) (727) 
Premium paid to extinguish debt(15)   
Repurchases of common stock(60)   
Cash dividends paid(63) (60) 
Other financing activities(3) (5) 
Total cash provided by (used in) financing activities465  (49) 
Effect of currency exchange rate changes on cash, cash equivalents, and restricted cash(1)   
Increase in cash, cash equivalents, and restricted cash592  41  
Cash, cash equivalents, and restricted cash - beginning of period159  96  
Cash, cash equivalents, and restricted cash - end of period$751  $137  

See Notes to Condensed Consolidated Financial Statements.
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Index to Notes to Condensed Consolidated Financial StatementsPage

8


Valvoline Inc. and Consolidated Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)

NOTE 1 – BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

The accompanying unaudited condensed consolidated financial statements have been prepared by Valvoline Inc. (“Valvoline” or the “Company”) in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and Securities and Exchange Commission (“SEC”) regulations for interim financial reporting, which do not include all information and footnote disclosures normally included in annual financial statements. Therefore, these condensed consolidated financial statements should be read in conjunction with Valvoline’s Annual Report on Form 10-K for the fiscal year ended September 30, 2019. Certain prior period amounts have been reclassified to conform to the current presentation.

The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make use of estimates and assumptions that affect the reported amounts and disclosures. Actual results may vary from these estimates. In the opinion of management, the assumptions underlying the condensed consolidated financial statements for these interim periods are reasonable, and all adjustments considered necessary for a fair presentation have been made and are of a normal recurring nature unless otherwise disclosed herein. The results for interim periods are not necessarily indicative of those to be expected for the entire year, particularly in light of the novel coronavirus ("COVID-19") global pandemic and its effects on Valvoline and global economies.

In late December 2019, COVID-19 was identified in Wuhan, China and since that time it has continued to spread globally, including to the United States, leading the World Health Organization to declare a global pandemic and recommend containment and mitigation actions worldwide in March 2020. Since March 31, 2020, the COVID-19 pandemic has continued, and various governments have issued or extended shelter-in-place orders. As of the date of this filing, restrictions are in various phases of being reduced and re-implemented with the resulting impacts being monitored. Valvoline has substantially maintained its operations during the pandemic, and precautionary measures have been taken to protect the Company's employees and customers, maintain liquidity and manage the impacts of reduced volumes.

The COVID-19 pandemic adversely affected Valvoline's results of operations for the three and nine months ended June 30, 2020. Adverse impacts from COVID-19 are expected in future periods, and the extent of certain future impacts cannot be reasonably estimated at this time due to numerous uncertainties, including the duration and severity of the pandemic.

Recent accounting pronouncements

The following standards relevant to Valvoline were either issued or adopted in the current year, or are expected to have a meaningful impact on Valvoline in future periods.

Recently adopted

In February 2016, the Financial Accounting Standards Board ("FASB") issued accounting guidance, which outlined a comprehensive lease accounting model that requires lessees to recognize a right-of-use asset and a corresponding lease liability on the balance sheet and superseded previous lease accounting guidance. Valvoline adopted this new lease accounting guidance on October 1, 2019 using the optional transition approach. Under this approach, the new lease accounting guidance has been applied prospectively from the date of adoption, while prior period financial statements continue to be reported in accordance with the previous guidance. Lease expense is recognized similar to prior accounting guidance with operating leases resulting in straight-line expense and finance leases resulting in accelerated expense recognition similar to the prior accounting for capital leases. The accounting for lessor arrangements is not significantly changed by the new guidance.

9


Valvoline elected certain practical expedients permitted by the new guidance, including the package of practical expedients that allows for previous accounting conclusions regarding lease identification and classification to be carried forward for leases which commenced prior to adoption, as well