Overview: In the first quarter of fiscal year 2009, sales decreased compared to the prior year primarily due to volume declines and unfavorable foreign currency exchange rates, partially offset by price increases implemented last year and favorable sales mix. The overall worldwide economic decline negatively affected our results. Sales in our coil and general industrial product lines decreased significantly due to a decline in global demand. Our wood product line continues to be affected by the weak housing market. We experienced less significant volume declines in our architectural, packaging and Huarun product lines. Gross profit as a percent of net sales increased compared to last year as a result of previous price increases, favorable product mix and improved productivity in our manufacturing facilities, partially offset by higher raw material costs and restructuring charges. Operating expenses for the quarter, as a percentage of net sales, increased compared to the prior year due to lower sales volumes and restructuring charges. Excluding restructuring charges, operating expense dollars decreased in the first quarter of 2009 compared to the first quarter of 2008 reflecting benefits from our previously completed restructuring actions and expense controls.

During the third quarter of 2008, we initiated a comprehensive series of actions to lower our cost structure and further increase our operational efficiency. During the first quarter of 2009, we expanded these restructuring activities. We now expect the total restructuring cost to be $0.35 to $0.38 per share after tax, an increase from the initial estimate of $0.23 to $0.25 per share after tax. The restructuring activities in 2008 resulted in pre-tax charges of $23.5 million or $0.16 per share after tax. The restructuring activities in the first quarter of 2009 resulted in pre-tax charges of $9.1 million or $0.06 per share after tax. The remaining restructuring charges to be incurred during fiscal year 2009 are in the Coatings segment and All Other.

Earnings Per Share: Net income per share available to common stockholders was $0.11 and $0.21 for the first quarter of 2009 and 2008, respectively. We accrued $3.3 million in the first quarter of 2009 and $2.9 million for the first quarter of 2008 for the Huarun Redeemable Stock (see Note 3 for further details). The accrual reduced basic and diluted income available to common stockholders by $0.03 per share in both the first quarter of 2009 and first quarter of 2008. The table below presents adjusted net income per common share - diluted, which excludes a non-cash accrual relating to Huarun Redeemable Stock. The table also presents restructuring charges included in net income in the respective periods.

                                                          Three Months Ended
                                                     January 30,      January 25,
                                                        2009             2008
   Net income per common share - diluted            $        0.11    $        0.21
   Huarun redeemable stock accrual                           0.03             0.03
   Adjusted net income per common share - diluted   $        0.14    $        0.24
   Restructuring Charges                            $        0.06    $           -

"Adjusted net income per common share-diluted" is a non-GAAP financial measure. Management discloses this measure because we believe the measure may assist investors in comparing our results of operations in the respective periods without regard to the effect on results in the 2009 and 2008 periods of the non-cash accrual related to the Huarun Redeemable Stock. As the Huarun Redeemable Stock is redeemed, acquisition accounting is applied.

Critical Accounting Policies: There were no material changes in our critical accounting policies during the three-month period ended January 30, 2009.

ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

Operations:

Net Sales Three Months Ended (Dollars in millions) January 30, January 25, % 2009 2008 Change Coatings $ 374.7 $ 471.4 (20.5 )% Paints 212.7 228.7 (7.0 )% All Other 52.1 65.0 (19.7 )% Consolidated Net Sales $ 639.5 $ 765.1 (16.4 )%

• Consolidated Net Sales - The sales decline for the first quarter of 2009 was 14.0% after excluding the negative effect of foreign currency of 3.1% and the positive effect of acquisitions of 0.7%. The core sales decline for the first quarter was primarily due to decreased volume, partially offset by previous price increases and improved sales mix.

• Coatings Segment Net Sales - The sales decline for the first quarter of 2009 was 17.0% after excluding the negative effect of foreign currency of 4.4% and the positive effect of acquisitions of 0.9%. The core sales decline was primarily driven by our coil, general industrial and wood product lines. Our wood product line continues to be affected by the weak housing market, and a decline in global demand affected coil and general industrial volumes. Product lines servicing commercial construction, heavy equipment and consumer durables were significantly affected. Moreover, temporary year-end customer plant closures were longer than normal as our customers worked to reduce their inventories.

• Paints Segment Net Sales - The sales decline for the first quarter of 2009 was 7.4% after excluding the positive effect of acquisitions of 0.4%. Core sales declines in the quarter were primarily due to decreased demand in our North American architectural product line. We also have seen softness in the Chinese market, which has affected the growth of our Huarun Paints architectural product line.

• All Other Net Sales - The All Other category includes resins, colorants, gelcoats and our furniture protection plan business. Sales decline for the first quarter of 2009 was 15.8% after excluding the negative effect of foreign currency of 3.9%. The sales decline was driven by decreased volumes in the gelcoat product line due to the weakened global economy.

Due to the seasonal nature of portions of our business, sales for the first quarter are not necessarily indicative of sales for subsequent quarters or for the full year.

             Gross Profit                      Three Months Ended
             (Dollars in millions)        January 30,      January 25,
                                             2009             2008

             Consolidated Gross Profit   $       189.3    $       210.5
             As a percent of Net Sales            29.6 %           27.5 %

• Gross Profit - The gross profit increase, as a percent of net sales, was driven primarily by previous price increases, favorable product mix and improved productivity in our manufacturing facilities, partially offset by raw material cost increases and restructuring charges. Gross margins for the first quarter of 2009 included restructuring charges of $4.9 million or 0.8% of net sales.

ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

Operating Expenses * Three Months Ended (Dollars in millions) January January 30, 25, 2009 2008 Consolidated Operating Expenses $ 155.1 $ 155.5 As a percent of Net Sales 24.3 % 20.3 %
* Includes research and development, selling and administrative costs. For breakout see Condensed Consolidated Statements of Income.

• Consolidated Operating Expenses (dollars) - Consolidated operating expenses decreased 0.2% to $155.1 million in the first quarter of 2009 compared to the prior year. The decrease was driven primarily by benefits from our previously completed restructuring actions and expense controls, partially offset by restructuring charges of $4.2 million or 0.7% of net sales.

• Consolidated Operating Expenses (percent of net sales) - As a percent of consolidated net sales, consolidated operating expenses increased four percentage points for the first quarter compared to last year. In addition to the restructuring charges, the increase is due to lower sales volume.

            EBIT                              Three Months Ended
            (Dollars in millions)        January 30,       January 25,
                                            2009              2008

            Coatings                    $        24.9     $        39.3
            As a percent of Net Sales             6.6 %             8.3 %

            Paints                      $        16.0     $        18.3
            As a percent of Net Sales             7.5 %             8.0 %

            All Other                   $        (7.2 )   $        (5.3 )
            As a percent of Net Sales           (13.7 )%           (8.1 )%
            Consolidated EBIT           $        33.7     $        52.3
            As a percent of Net Sales             5.3 %             6.8 %

• Consolidated EBIT - EBIT for the first quarter of 2009 decreased $18.7 million or 35.6% compared to the prior year. The first quarter of 2009 included restructuring charges of $9.1 million or 1.4% of net sales. Foreign currency exchange fluctuation had an immaterial effect on EBIT.

• Coatings Segment EBIT - The EBIT decrease as a percentage of net sales for the first quarter was driven primarily by a combination of the decrease in net sales and restructuring charges of $7.2 million or 1.9% of net sales.

• Paints Segment EBIT - The EBIT decrease as a percentage of net sales for the first quarter was driven primarily by a combination of the decrease in net sales and restructuring charges of $0.3 million or 0.1% of net sales.

• All Other EBIT - The All Other category includes resins, colorants, gelcoats, our furniture protection plan business and corporate expenses. The decrease for the first quarter was due primarily to the decrease in net sales and restructuring charges of $1.6 million or 3.0% of net sales.

ITEM 2:   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
          RESULTS OF OPERATION


Due to the seasonal nature of portions of our business, EBIT for the first
quarter is not necessarily indicative of EBIT for subsequent quarters or for the
full year.


           Interest Expense                      Three Months Ended
           (Dollars in millions)            January 30,      January 25,
                                               2009             2008
           Consolidated Interest Expense   $        11.9    $        15.7

• Interest Expense - The first quarter decrease is due primarily to lower average interest rates and lower average debt levels.

                 Effective Tax Rate         Three Months Ended
                                       January 30,      January 25,
                                          2009             2008
                 Effective Tax Rate            34.9 %           34.5 %

• Effective Tax Rate - We expect the effective tax rate for the full year to be 33.5% to 34%.