RPM Reports Record Fiscal 2025 First-Quarter Results
RPM reported record fiscal 2025 Q1 results with net income of $227.7 million, diluted EPS of $1.77, and EBIT of $303.9 million. Adjusted diluted EPS rose 12.2% to $1.84, and adjusted EBIT increased 6.3% to $328.3 million. Net sales fell 2.1% to $1.97 billion. Operating cash flow was $248.1 million. The fiscal 2025 Q2 outlook predicts flat sales growth and mid-single digit adjusted EBIT growth. Full-year guidance remains at low-single digit revenue growth and mid-single to low-double digit adjusted EBIT growth.
Segment highlights: CPG saw 1.4% sales growth, PCG had a 1.8% sales decline, SPG experienced a 3.5% sales decrease, and Consumer Group sales dropped 6.1%. Geographic sales varied, with declines in North America and Europe, and growth in Asia/Pacific and Africa/Middle East. Operating expenses decreased due to MAP 2025 initiatives.
RPM reduced total debt by $453.1 million, ending the quarter with $2.05 billion in debt and $1.44 billion in liquidity. The company returned $76.4 million to shareholders through dividends and share repurchases.
RPM ha riportato risultati record per il primo trimestre fiscale 2025 con un utile netto di 227,7 milioni di dollari, un utile per azione diluito (EPS) di 1,77 dollari e un EBIT di 303,9 milioni di dollari. L'EPS diluito rettificato è aumentato del 12,2% a 1,84 dollari, e l'EBIT rettificato è cresciuto del 6,3% a 328,3 milioni di dollari. Le vendite nette sono diminuite del 2,1% a 1,97 miliardi di dollari. Il flusso di cassa operativo è stato di 248,1 milioni di dollari. Le previsioni per il secondo trimestre fiscale 2025 prevedono una crescita delle vendite piatta e una crescita dell'EBIT rettificato a cifra singola medio-bassa. Le prospettive per l'intero anno rimangono in crescita del fatturato a cifra singola bassa e crescita dell'EBIT rettificato a cifra singola medio-bassa a cifra doppia bassa.
Risultati per segmento: CPG ha registrato una crescita delle vendite del 1,4%, PCG ha avuto un calo delle vendite dell'1,8%, SPG ha subito una diminuzione del 3,5% nelle vendite e le vendite del Consumer Group sono scese del 6,1%. Le vendite geografiche sono variate, con cali in Nord America ed Europa, e crescita in Asia/Pacifica e Africa/Medio Oriente. Le spese operative sono diminuite grazie alle iniziative MAP 2025.
RPM ha ridotto il debito totale di 453,1 milioni di dollari, chiudendo il trimestre con 2,05 miliardi di dollari di debito e 1,44 miliardi di dollari di liquidità. L'azienda ha restituito 76,4 milioni di dollari agli azionisti attraverso dividendi e riacquisti di azioni.
RPM reportó resultados récord para el primer trimestre fiscal de 2025 con un ingreso neto de 227.7 millones de dólares, un EPS diluido de 1.77 dólares y un EBIT de 303.9 millones de dólares. El EPS diluido ajustado aumentó un 12.2% a 1.84 dólares y el EBIT ajustado creció un 6.3% a 328.3 millones de dólares. Las ventas netas cayeron un 2.1% a 1.97 mil millones de dólares. El flujo de caja operativo fue de 248.1 millones de dólares. Las perspectivas para el segundo trimestre fiscal de 2025 predicen un crecimiento plano en las ventas y un crecimiento del EBIT ajustado de un dígito medio. Las expectativas para todo el año se mantienen en un crecimiento de ingresos de un dígito bajo y un crecimiento del EBIT ajustado de un dígito medio a un dígito bajo.
Aspectos destacados por segmento: CPG vio un crecimiento de ventas del 1.4%, PCG tuvo una caída del 1.8% en las ventas, SPG experimentó una disminución del 3.5% en las ventas y las ventas del Grupo de Consumidores cayeron un 6.1%. Las ventas geográficas variaron, con caídas en América del Norte y Europa, y crecimiento en Asia/Pacífico y África/Medio Oriente. Los gastos operativos disminuyeron debido a las iniciativas MAP 2025.
RPM redujo su deuda total en 453.1 millones de dólares, cerrando el trimestre con 2.05 mil millones de dólares en deuda y 1.44 mil millones de dólares en liquidez. La compañía devolvió 76.4 millones de dólares a los accionistas a través de dividendos y recompras de acciones.
RPM은 2025 회계연도 1분기에 2억 2천 7백 70만 달러의 순이익, 주당 희석 EPS 1.77달러 및 EBIT 3억 3백 90만 달러의 기록적인 결과를 보고했습니다. 조정된 희석 EPS는 12.2% 상승하여 1.84달러에 도달했고, 조정된 EBIT는 6.3% 증가하여 3억 2천8백30만 달러에 달했습니다. 순매출은 2.1% 감소하여 19억 7천만 달러입니다. 운영 현금 흐름은 2억 4천 8백 10만 달러였습니다. 2025 회계연도 2분기 전망은 매출 성장 평탄하고 조정된 EBIT는 중간 단일 자리 성장률을 예측하고 있습니다. 연간 가이던스는 저단일 자리 매출 성장 및 중간 단일 자리에서 저단일 자리 조정 EBIT 성장으로 유지됩니다.
부문 하이라이트: CPG는 1.4% 매출 성장을 본 반면, PCG는 1.8% 매출 감소를 겪었고, SPG는 3.5% 매출 감소를 경험하였으며, 소비자 그룹 매출은 6.1% 감소했습니다. 지리적 매출은 북미와 유럽에서 감소하고 아시아/태평양 및 아프리카/중동에서 성장을 보였습니다. 운영 비용은 MAP 2025 이니셔티브로 인해 감소했습니다.
RPM은 총 부채를 4억 5천 3백10만 달러 줄여 2억 5천만 달러의 부채와 14억 4천만 달러의 유동성으로 분기를 마쳤습니다. 회사는 배당금과 자사주 매입을 통해 7천 640만 달러를 주주에게 반환했습니다.
RPM a annoncé des résultats record pour le premier trimestre de l’exercice 2025 avec un revenu net de 227,7 millions de dollars, un BPA dilué de 1,77 dollar et un EBIT de 303,9 millions de dollars. Le BPA dilué ajusté a augmenté de 12,2% pour atteindre 1,84 dollar et l’EBIT ajusté a augmenté de 6,3% pour atteindre 328,3 millions de dollars. Les ventes nettes ont chuté de 2,1% pour s’établir à 1,97 milliard de dollars. Le flux de trésorerie opérationnel s’élevait à 248,1 millions de dollars. Les prévisions pour le deuxième trimestre de l’exercice 2025 prédisent une croissance stabilisée des ventes et une croissance ajustée de l’EBIT à un chiffre moyen. Les prévisions pour l’année entière restent à une croissance des revenus à un chiffre bas et à une croissance de l’EBIT ajusté à un chiffre moyen à faible double chiffre.
Points saillants par segment: CPG a connu une croissance des ventes de 1,4%, PCG a enregistré une baisse des ventes de 1,8%, SPG a subi une diminution des ventes de 3,5% et les ventes du groupe de consommateurs ont chuté de 6,1%. Les ventes géographiques ont varié, avec des baisses en Amérique du Nord et en Europe, et une croissance en Asie/Pacifique et en Afrique/Moyen-Orient. Les dépenses d'exploitation ont diminué grâce aux initiatives MAP 2025.
RPM a réduit sa dette totale de 453,1 millions de dollars, clôturant le trimestre avec une dette de 2,05 milliards de dollars et une liquidité de 1,44 milliard de dollars. L'entreprise a restitué 76,4 millions de dollars aux actionnaires par le biais de dividendes et de rachats d'actions.
RPM berichtete für das erste Quartal des Geschäftsjahres 2025 von Rekordergebnissen mit einem Nettogewinn von 227,7 Millionen Dollar, einem verwässerten EPS von 1,77 Dollar und einem EBIT von 303,9 Millionen Dollar. Das angepasste verwässerte EPS stieg um 12,2% auf 1,84 Dollar, und das angepasste EBIT erhöhte sich um 6,3% auf 328,3 Millionen Dollar. Die Nettoumsätze fielen um 2,1% auf 1,97 Milliarden Dollar. Der operative Cashflow betrug 248,1 Millionen Dollar. Der Ausblick für das zweite Quartal des Geschäftsjahres 2025 prognostiziert ein stabiles Umsatzwachstum und ein mittleres Wachstum des angepassten EBIT im einstelligen Bereich. Die Prognose für das gesamte Jahr bleibt bei einem niedrigen Umsatzwachstum im einstelligen Bereich sowie einem mittleren bis niedrigen zweistelligen Wachstum des angepassten EBIT.
Segment-Highlights: CPG verzeichnete ein Umsatzwachstum von 1,4%, PCG hatte einen Umsatzrückgang von 1,8%, SPG erlebte einen Rückgang beim Umsatz von 3,5% und die Umsätze der Consumer Group fielen um 6,1%. Der geografische Umsatz variierte, mit Rückgängen in Nordamerika und Europa und Wachstums in Asien/Pazifik sowie Afrika/Mittem الشرق. Betriebskosten sanken aufgrund der MAP 2025-Initiativen.
RPM reduzierte die Gesamtschulden um 453,1 Millionen Dollar und schloss das Quartal mit 2,05 Milliarden Dollar an Schulden und 1,44 Milliarden Dollar an Liquidität ab. Das Unternehmen gab 76,4 Millionen Dollar an die Aktionäre durch Dividenden und Aktienrückkäufe zurück.
- Record net income of $227.7 million
- Record diluted EPS of $1.77
- Record EBIT of $303.9 million
- Adjusted diluted EPS increased by 12.2%
- Adjusted EBIT increased by 6.3%
- Strong cash flow of $248.1 million
- Debt reduction by $453.1 million
- Total liquidity of $1.44 billion
- Net sales declined by 2.1%
- Consumer Group sales decreased by 6.1%
- SPG sales declined by 3.5%
- PCG sales declined by 1.8%
- North American and European sales declined
- Foreign currency translation headwinds
Insights
RPM International's Q1 FY2025 results demonstrate resilience in a mixed economic environment. Key highlights include:
- Record Q1 net income of
$227.7 million , up13.2% year-over-year - Record Q1 adjusted diluted EPS of
$1.84 , a12.2% increase - Record Q1 adjusted EBIT of
$328.3 million , up6.3% - Net sales of
$1.97 billion , down2.1% due to currency headwinds and volume declines in some segments
The company's MAP 2025 initiatives are driving profitability improvements and working capital efficiency. Strong performance in Construction Products and Performance Coatings groups offset weakness in Consumer and Specialty Products segments. The outlook remains cautious, with Q2 expectations of flat sales but mid-single-digit adjusted EBIT growth. Full-year guidance maintains low-single-digit revenue growth and mid-single to low-double-digit adjusted EBIT growth.
Investors should note the company's ability to expand margins and generate strong cash flow despite challenging market conditions, particularly in residential end markets. The
RPM's Q1 results reflect a company successfully navigating market challenges through operational efficiency and strategic positioning. The
- Construction Products and Performance Coatings groups achieved organic growth, capitalizing on high-performance building projects and renovations
- Margin expansion in Consumer Group despite sales decline, showcasing effective product rationalization
- Geographic diversification helping offset North American and European weakness with growth in Asia/Pacific and Africa/Middle East
The company's focus on high-performance building materials and renovation markets is proving resilient. However, the continued weakness in residential and DIY markets remains a headwind, particularly affecting the Consumer and Specialty Products groups.
Looking ahead, RPM's cautious Q2 outlook and unchanged full-year guidance suggest management is confident in their ability to drive profitability improvements even in a flat sales environment. The potential for a rebound in residential markets due to lower interest rates could provide upside, but timing remains uncertain.
Investors should monitor RPM's ability to sustain margin improvements and cash flow generation as key indicators of the success of their MAP 2025 initiatives and overall business strategy in a challenging macroeconomic environment.
-
Record first-quarter net income of
$227.7 million $1.77 $303.9 million -
Record first-quarter adjusted diluted EPS of
$1.84 12.2% over prior year and record adjusted EBIT increased6.3% to$328.3 million -
First-quarter net sales of
$1.97 billion 2.1% from the prior year -
Strong first-quarter cash provided by operating activities of
$248.1 million - Fiscal 2025 second-quarter outlook calls for flat sales growth and mid-single digit adjusted EBIT growth
- Fiscal 2025 full-year outlook is unchanged with revenue growth of low-single digits and adjusted EBIT growth of mid-single digits to low-double digits
Frank C. Sullivan, RPM chairman and CEO said, “By executing well on things within our control, our associates navigated a mixed economic backdrop to generate record adjusted EBIT for the 11th consecutive quarter. This included continued implementation of MAP 2025 operational improvement initiatives, and leveraging our portfolio of products, services, and entrepreneurial culture to capture growth opportunities where they existed. Our Construction Products and Performance Coatings groups both generated organic growth, and our Specialty Products and Consumer groups expanded adjusted EBIT margins despite continued weakness in end markets tied to housing. In addition to record profitability, MAP 2025 initiatives allowed us to continue making structural improvements to working capital that sustained our trend of strong cash flow generation.”
First-Quarter 2025 Consolidated Results
| Consolidated | |||||||||||
Three Months Ended |
|
|
|
||||||||
| $ in 000s except per share data | August 31, |
|
August 31, |
|
|
|
|||||
2024 |
|
2023 |
|
$ Change |
% Change |
||||||
| Net Sales | $ |
1,968,789 |
$ |
2,011,857 |
$ |
(43,068 |
) |
(2.1 |
%) |
||
| Net Income Attributable to RPM Stockholders |
|
227,692 |
|
201,082 |
|
26,610 |
|
13.2 |
% |
||
| Diluted Earnings Per Share (EPS) |
|
1.77 |
|
1.56 |
|
0.21 |
|
13.5 |
% |
||
| Income Before Income Taxes (IBT) |
|
290,451 |
|
269,154 |
|
21,297 |
|
7.9 |
% |
||
| Earnings Before Interest and Taxes (EBIT) |
|
303,859 |
|
288,533 |
|
15,326 |
|
5.3 |
% |
||
| Adjusted EBIT(1) |
|
328,342 |
|
309,014 |
|
19,328 |
|
6.3 |
% |
||
| Adjusted Diluted EPS(1) |
|
1.84 |
|
1.64 |
|
0.20 |
|
12.2 |
% |
||
| (1) Excludes certain items that are not indicative of RPM's ongoing operations. See tables below titled Supplemental Segment Information and Reconciliation of Reported to Adjusted Amounts for details. | |||||||||||
Volume growth at CPG and PCG and slightly positive overall pricing were more than offset by foreign currency translation headwinds and volume declines at Consumer Group and SPG. Volume growth was strongest at businesses that were positioned to serve new high-performance building projects and renovations, while volumes were weaker at businesses with exposure to residential end markets.
Geographically, sales declined modestly in
Sales included a
Selling, general and administrative expenses decreased as MAP 2025-enabled actions to streamline expenses were partially offset by targeted investments in growth initiatives.
Fiscal 2025 first-quarter adjusted EBIT was a record, driven by MAP 2025, including the commodity cycle recovery, plant consolidations and SG&A streamlining; and improved fixed-cost leverage at businesses with volume growth. In
Record first-quarter adjusted diluted EPS, grew at a faster rate than adjusted EBIT, and was driven by reduced interest expense from debt paydowns of
First-Quarter 2025 Segment Sales and Earnings
| Construction Products Group | ||||||||||
Three Months Ended |
|
|
|
|||||||
| $ in 000s | August 31, |
|
August 31, |
|
|
|
||||
2024 |
|
2023 |
|
$ Change |
% Change |
|||||
| Net Sales | $ |
793,991 |
$ |
782,789 |
$ |
11,202 |
1.4 |
% |
||
| Income Before Income Taxes |
|
156,998 |
|
140,452 |
|
16,546 |
11.8 |
% |
||
| EBIT |
|
157,464 |
|
143,848 |
|
13,616 |
9.5 |
% |
||
| Adjusted EBIT(1) |
|
159,904 |
|
144,597 |
|
15,307 |
10.6 |
% |
||
| (1) Excludes certain items that are not indicative of RPM's ongoing operations. See table below titled Supplemental Segment Information for details. | ||||||||||
CPG achieved record first-quarter sales led by turnkey roofing systems and wall systems serving both new high-performance construction projects and renovations. This growth is in addition to strong results in the prior-year period when sales increased
Sales included
Record first-quarter adjusted EBIT was driven by improved fixed-cost leverage from volume growth, MAP 2025 benefits, and a focus on selling higher margin products and services.
| Performance Coatings Group | |||||||||||
Three Months Ended |
|
|
|
||||||||
| $ in 000s | August 31, |
|
August 31, |
|
|
|
|||||
2024 |
|
2023 |
|
$ Change |
% Change |
||||||
| Net Sales | $ |
371,759 |
$ |
378,513 |
$ |
(6,754 |
) |
(1.8 |
%) |
||
| Income Before Income Taxes |
|
64,292 |
|
44,821 |
|
19,471 |
|
43.4 |
% |
||
| EBIT |
|
63,819 |
|
43,697 |
|
20,122 |
|
46.0 |
% |
||
| Adjusted EBIT(1) |
|
64,592 |
|
59,051 |
|
5,541 |
|
9.4 |
% |
||
| (1) Excludes certain items that are not indicative of RPM's ongoing operations. See table below titled Supplemental Segment Information for details. | |||||||||||
PCG achieved positive first-quarter organic sales led by the flooring business, which benefited from its focus on maintenance and restoration, and specified solutions for high-performance new construction projects. Emerging markets also contributed to growth. Organic growth was more than offset by the prior divestiture of a non-core European service business and foreign currency translation.
Sales included
Record first-quarter adjusted EBIT was driven by MAP 2025 benefits and improved fixed-cost leverage from higher volumes.
| Specialty Products Group | |||||||||||
Three Months Ended |
|
|
|
||||||||
| $ in 000s | August 31, |
|
August 31, |
|
|
|
|||||
2024 |
|
2023 |
|
$ Change |
% Change |
||||||
| Net Sales | $ |
174,565 |
$ |
180,951 |
$ |
(6,386 |
) |
(3.5 |
%) |
||
| Income Before Income Taxes |
|
15,203 |
|
16,397 |
|
(1,194 |
) |
(7.3 |
%) |
||
| EBIT |
|
15,290 |
|
16,298 |
|
(1,008 |
) |
(6.2 |
%) |
||
| Adjusted EBIT(1) |
|
18,112 |
|
17,894 |
|
218 |
|
1.2 |
% |
||
| (1) Excludes certain items that are not indicative of RPM's ongoing operations. See table below titled Supplemental Segment Information for details. | |||||||||||
SPG’s first-quarter sales decline was driven by soft specialty residential OEM end-market demand and a decline in the disaster restoration businesses as high customer inventories muted the impact of storm activity during the quarter. Partially offsetting this decline, food coatings and additives generated growth from new business wins and a small acquisition made during the quarter.
Sales included a
First-quarter adjusted EBIT increased as a result of MAP 2025 benefits, partially offset by underabsorption from lower volumes.
| Consumer Group | |||||||||||
Three Months Ended |
|
|
|
||||||||
| $ in 000s | August 31, |
|
August 31, |
|
|
|
|||||
2024 |
|
2023 |
|
$ Change |
% Change |
||||||
| Net Sales | $ |
628,474 |
$ |
669,604 |
$ |
(41,130 |
) |
(6.1 |
%) |
||
| Income Before Income Taxes |
|
108,150 |
|
131,829 |
|
(23,679 |
) |
(18.0 |
%) |
||
| EBIT |
|
108,407 |
|
131,079 |
|
(22,672 |
) |
(17.3 |
%) |
||
| Adjusted EBIT(1) |
|
116,214 |
|
121,167 |
|
(4,953 |
) |
(4.1 |
%) |
||
| (1) Excludes certain items that are not indicative of RPM's ongoing operations. See table below titled Supplemental Segment Information for details. | |||||||||||
The Consumer Group’s first-quarter sales decline was driven by weaker DIY takeaway at retail stores, customer destocking and the rationalization of lower-margin products. This was partially offset by growth in international markets, which benefited from successful targeted marketing campaigns.
Sales included a
Although first-quarter adjusted EBIT declined due to lower sales and unfavorable fixed-cost absorption from lower volumes, adjusted EBIT margin expanded, driven by MAP 2025 benefits and the rationalization of lower-margin products.
Cash Flow and Financial Position
During the first three months of fiscal 2025:
-
Cash provided by operating activities was
$248.1 million $359.2 million -
Operating working capital as a percentage of sales improved by 250 basis points to
22.7% compared to25.2% in the prior-year period, driven by MAP 2025 working capital efficiency initiatives. -
Capital expenditures were
$50.7 million $52.2 million Belgium that is expected to open in the second quarter of fiscal 2025. It will be managed by SPG, supply resins to all four segments and external customers, and serve to improve supply chain resiliency and lower costs. -
The company returned
$76.4 million
As of August 31, 2024:
-
Total debt was
$2.05 billion $2.51 billion $453.1 million -
Total liquidity, including cash and committed revolving credit facilities, was
$1.44 billion $1.23 billion
Business Outlook
“The economic outlook for the second quarter remains mixed with continued growth in high-performance building construction and renovation, and softness in residential end markets. While we are optimistic that lower interest rates will eventually lead to a rebound in residential markets, it is too early to say precisely when growth will return. As we have demonstrated, no matter the economic backdrop, we will focus on controlling what we can, including executing on MAP 2025 initiatives to leverage the power of RPM to capture growth opportunities, expand margins and structurally improve cash flow,” Sullivan concluded.
The company expects the following in the fiscal 2025 second quarter:
- Consolidated sales to be flat compared to prior-year record results.
- CPG sales to increase in the low-single-digit percentage range compared to prior-year record results.
- PCG sales to be flat compared to prior-year record results.
- SPG sales to decline in the low-single-digit percentage range compared to prior-year results.
- Consumer Group sales to decline in the low-single-digit percentage range compared to prior-year results.
- Consolidated adjusted EBIT to increase in the mid-single-digit percentage range compared to prior-year record results.
The company outlook for full-year fiscal 2025 remains unchanged with:
- Consolidated sales increasing in the low-single-digit percentage range compared to prior-year record results.
- Consolidated adjusted EBIT increasing in the mid-single- to low-double-digit percentage range compared to prior-year record results.
Earnings Webcast and Conference Call Information
Management will host a conference call to discuss these results beginning at 10:00 a.m. ET today. The call can be accessed via webcast at www.RPMinc.com/Investors/Presentations-Webcasts or by dialing 1-844-481-2915 or 1-412-317-0708 for international callers and asking to join the RPM International call. Participants are asked to call the assigned number approximately 10 minutes before the conference call begins. The call, which will last approximately one hour, will be open to the public, but only financial analysts will be permitted to ask questions. The media and all other participants will be in a listen-only mode.
For those unable to listen to the live call, a replay will be available from October 2, 2024, until October 9, 2024. The replay can be accessed by dialing 1-877-344-7529 or 1-412-317-0088 for international callers. The access code is 5577742. The call also will be available for replay and as a written transcript via the RPM website at www.RPMinc.com.
About RPM
RPM International Inc. owns subsidiaries that are world leaders in specialty coatings, sealants, building materials and related services. The company operates across four reportable segments: consumer, construction products, performance coatings and specialty products. RPM has a diverse portfolio of market-leading brands, including Rust-Oleum, DAP, Zinsser, Varathane, DayGlo, Legend Brands, Stonhard, Carboline, Tremco and Dryvit. From homes and workplaces to infrastructure and precious landmarks, RPM’s brands are trusted by consumers and professionals alike to help build a better world. The company is ranked on the Fortune 500® and employs approximately 17,200 individuals worldwide. Visit www.RPMinc.com to learn more.
For more information, contact Matt Schlarb, Vice President – Investor Relations & Sustainability, at 330-220-6064 or mschlarb@rpminc.com.
From Fortune ©2024 Fortune Media IP Limited. All rights reserved. Used under license. Fortune and Fortune 500 are registered trademarks of Fortune Media IP Limited and are used under license. Fortune and Fortune Media IP Limited are not affiliated with, and do not endorse the products or services of RPM International Inc.
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To supplement the financial information presented in accordance with Generally Accepted Accounting Principles in
Forward-Looking Statements
This press release contains “forward-looking statements” relating to our business. These forward-looking statements, or other statements made by us, are made based on our expectations and beliefs concerning future events impacting us and are subject to uncertainties and factors (including those specified below), which are difficult to predict and, in many instances, are beyond our control. As a result, our actual results could differ materially from those expressed in or implied by any such forward-looking statements. These uncertainties and factors include (a) global and regional markets and general economic conditions, including uncertainties surrounding the volatility in financial markets, the availability of capital and the viability of banks and other financial institutions; (b) the prices, supply and availability of raw materials, including assorted pigments, resins, solvents, and other natural gas- and oil-based materials; packaging, including plastic and metal containers; and transportation services, including fuel surcharges; (c) continued growth in demand for our products; (d) legal, environmental and litigation risks inherent in our businesses and risks related to the adequacy of our insurance coverage for such matters; (e) the effect of changes in interest rates; (f) the effect of fluctuations in currency exchange rates upon our foreign operations; (g) the effect of non-currency risks of investing in and conducting operations in foreign countries, including those relating to domestic and international political, social, economic and regulatory factors; (h) risks and uncertainties associated with our ongoing acquisition and divestiture activities; (i) the timing of and the realization of anticipated cost savings from restructuring initiatives, the ability to identify additional cost savings opportunities, and the risks of failing to meet any other objectives of our improvement plans; (j) risks related to the adequacy of our contingent liability reserves; (k) risks relating to a public health crisis similar to the Covid pandemic; (l) risks related to acts of war similar to the Russian invasion of
| CONSOLIDATED STATEMENTS OF INCOME | ||||||||
| IN THOUSANDS, EXCEPT PER SHARE DATA | ||||||||
| (Unaudited) | ||||||||
Three Months Ended |
||||||||
August 31, |
|
August 31, |
||||||
|
2024 |
|
|
|
2023 |
|
||
| Net Sales | $ |
1,968,789 |
|
$ |
2,011,857 |
|
||
| Cost of Sales |
|
1,132,116 |
|
|
1,183,240 |
|
||
| Gross Profit |
|
836,673 |
|
|
828,617 |
|
||
| Selling, General & Administrative Expenses |
|
526,146 |
|
|
531,032 |
|
||
| Restructuring Expense |
|
7,202 |
|
|
6,498 |
|
||
| Interest Expense |
|
24,434 |
|
|
31,818 |
|
||
| Investment (Income), Net |
|
(11,026 |
) |
|
(12,439 |
) |
||
| Other (Income) Expense, Net |
|
(534 |
) |
|
2,554 |
|
||
| Income Before Income Taxes |
|
290,451 |
|
|
269,154 |
|
||
| Provision for Income Taxes |
|
61,897 |
|
|
67,841 |
|
||
| Net Income |
|
228,554 |
|
|
201,313 |
|
||
| Less: Net Income Attributable to Noncontrolling Interests |
|
862 |
|
|
231 |
|
||
| Net Income Attributable to RPM International Inc. Stockholders | $ |
227,692 |
|
$ |
201,082 |
|
||
| Earnings per share of common stock attributable to | ||||||||
| RPM International Inc. Stockholders: | ||||||||
| Basic | $ |
1.78 |
|
$ |
1.57 |
|
||
| Diluted | $ |
1.77 |
|
$ |
1.56 |
|
||
| Average shares of common stock outstanding - basic |
|
127,691 |
|
|
127,633 |
|
||
| Average shares of common stock outstanding - diluted |
|
128,420 |
|
|
128,771 |
|
||
| SUPPLEMENTAL SEGMENT INFORMATION | ||||||||
| IN THOUSANDS | ||||||||
| (Unaudited) | ||||||||
Three Months Ended |
||||||||
August 31, |
|
August 31, |
||||||
|
2024 |
|
|
|
2023 |
|
||
| Net Sales: | ||||||||
| CPG Segment | $ |
793,991 |
|
$ |
782,789 |
|
||
| PCG Segment |
|
371,759 |
|
|
378,513 |
|
||
| SPG Segment |
|
174,565 |
|
|
180,951 |
|
||
| Consumer Segment |
|
628,474 |
|
|
669,604 |
|
||
| Total | $ |
1,968,789 |
|
$ |
2,011,857 |
|
||
| Income Before Income Taxes: | ||||||||
| CPG Segment | ||||||||
| Income Before Income Taxes (a) | $ |
156,998 |
|
$ |
140,452 |
|
||
| Interest (Expense), Net (b) |
|
(466 |
) |
|
(3,396 |
) |
||
| EBIT (c) |
|
157,464 |
|
|
143,848 |
|
||
| MAP initiatives (d) |
|
2,440 |
|
|
749 |
|
||
| Adjusted EBIT | $ |
159,904 |
|
$ |
144,597 |
|
||
| PCG Segment | ||||||||
| Income Before Income Taxes (a) | $ |
64,292 |
|
$ |
44,821 |
|
||
| Interest Income, Net (b) |
|
473 |
|
|
1,124 |
|
||
| EBIT (c) |
|
63,819 |
|
|
43,697 |
|
||
| MAP initiatives (d) |
|
773 |
|
|
15,354 |
|
||
| Adjusted EBIT | $ |
64,592 |
|
$ |
59,051 |
|
||
| SPG Segment | ||||||||
| Income Before Income Taxes (a) | $ |
15,203 |
|
$ |
16,397 |
|
||
| Interest (Expense) Income, Net (b) |
|
(87 |
) |
|
99 |
|
||
| EBIT (c) |
|
15,290 |
|
|
16,298 |
|
||
| MAP initiatives (d) |
|
3,059 |
|
|
2,719 |
|
||
| (Gain) on sale of a business (e) |
|
(237 |
) |
|
(1,123 |
) |
||
| Adjusted EBIT | $ |
18,112 |
|
$ |
17,894 |
|
||
| Consumer Segment | ||||||||
| Income Before Income Taxes (a) | $ |
108,150 |
|
$ |
131,829 |
|
||
| Interest (Expense) Income, Net (b) |
|
(257 |
) |
|
750 |
|
||
| EBIT (c) |
|
108,407 |
|
|
131,079 |
|
||
| MAP initiatives (d) |
|
7,807 |
|
|
380 |
|
||
| Business interruption insurance recovery (f) |
|
- |
|
|
(10,292 |
) |
||
| Adjusted EBIT | $ |
116,214 |
|
$ |
121,167 |
|
||
| Corporate/Other | ||||||||
| (Loss) Before Income Taxes (a) | $ |
(54,192 |
) |
$ |
(64,345 |
) |
||
| Interest (Expense), Net (b) |
|
(13,071 |
) |
|
(17,956 |
) |
||
| EBIT (c) |
|
(41,121 |
) |
|
(46,389 |
) |
||
| MAP initiatives (d) |
|
10,641 |
|
|
12,694 |
|
||
| Adjusted EBIT | $ |
(30,480 |
) |
$ |
(33,695 |
) |
||
| TOTAL CONSOLIDATED | ||||||||
| Income Before Income Taxes (a) | $ |
290,451 |
|
$ |
269,154 |
|
||
| Interest (Expense) |
|
(24,434 |
) |
|
(31,818 |
) |
||
| Investment Income, Net |
|
11,026 |
|
|
12,439 |
|
||
| EBIT (c) |
|
303,859 |
|
|
288,533 |
|
||
| MAP initiatives (d) |
|
24,720 |
|
|
31,896 |
|
||
| (Gain) on sale of a business (e) |
|
(237 |
) |
|
(1,123 |
) |
||
| Business interruption insurance recovery (f) |
|
- |
|
|
(10,292 |
) |
||
| Adjusted EBIT | $ |
328,342 |
|
$ |
309,014 |
|
||
(a) |
The presentation includes a reconciliation of Income (Loss) Before Income Taxes, a measure defined by Generally Accepted Accounting Principles in |
||||||||
(b) |
Interest Income (Expense), Net includes the combination of Interest Income (Expense) and Investment Income (Expense), Net. | ||||||||
(c) |
EBIT is defined as earnings (loss) before interest and taxes, with Adjusted EBIT provided for the purpose of adjusting for items impacting earnings that are not considered by management to be indicative of ongoing operations. We evaluate the profit performance of our segments based on income before income taxes, but also look to EBIT, or adjusted EBIT, as a performance evaluation measure because Interest Income (Expense), Net is essentially related to corporate functions, as opposed to segment operations. For that reason, we believe EBIT is also useful to investors as a metric in their investment decisions. EBIT should not be considered an alternative to, or more meaningful than, income before income taxes as determined in accordance with GAAP, since EBIT omits the impact of interest and investment income or expense in determining operating performance, which represent items necessary to our continued operations, given our level of indebtedness. Nonetheless, EBIT is a key measure expected by and useful to our fixed income investors, rating agencies and the banking community all of whom believe, and we concur, that this measure is critical to the capital markets' analysis of our segments' core operating performance. We also evaluate EBIT because it is clear that movements in EBIT impact our ability to attract financing. Our underwriters and bankers consistently require inclusion of this measure in offering memoranda in conjunction with any debt underwriting or bank financing. EBIT may not be indicative of our historical operating results, nor is it meant to be predictive of potential future results. |
||||||||
(d) |
Reflects restructuring and other charges, which have been incurred in relation to our Margin Acceleration Plan ("MAP to Growth") and our Margin Achievement Plan ("MAP 2025"), together MAP initiatives, as follows: - Restructuring and other related expense, net: Includes charges incurred related to headcount reductions, facility closures and asset impairments recorded in "Restructuring Expense" on the Consolidated Statements of Income. Restructuring Expense totaled - Exited product lines: Reflects inventory write-offs in the prior year related to the discontinuation of certain product lines within our SPG segment. This resulted from ongoing product line rationalization efforts in connection with our MAP initiatives and were recorded within "Cost of Sales". - ERP consolidation plan: Includes expenses incurred as a result of our stated goals to consolidate over 75 ERP systems across the organization to four ERP platforms, one per segment, as part of our overall MAP strategy as well as costs incurred for other decision support tools to facilitate our commercial initiatives related to MAP 2025 which have been incurred in all segments, including Corporate/Other, and have been recorded within "SG&A". - Professional fees: Includes expenses incurred to consolidate accounting locations, costs incurred to implement technologies and processes to drive improved sales mix and salesforce effectiveness and cost incurred to implement new global manufacturing methodologies with the goal of improving operating efficiency incurred within all of our segments and recorded within "SG&A". All of this spend is in support of stated MAP goals with the most significant expense incurred within our Corporate/Other segment. Included below is a reconciliation of the TOTAL CONSOLIDATED MAP initiatives. |
||||||||
Three Months Ended |
|||||||||
August 31, |
|
August 31, |
|||||||
2024 |
|
2023 |
|||||||
| Restructuring and other related expense, net | $ |
10,754 |
$ |
16,427 |
|||||
| Exited product line |
|
- |
|
47 |
|||||
| ERP consolidation plan |
|
4,944 |
|
3,143 |
|||||
| Professional fees |
|
9,022 |
|
12,279 |
|||||
| MAP initiatives | $ |
24,720 |
$ |
31,896 |
|||||
(e) |
Reflects gains associated with post-closing adjustments for the sale of the non-core furniture warranty business in the SPG segment in fiscal 2023 which have been recorded in "SG&A". | ||||||||
(f) |
Business interruption insurance recovery at our Consumer segment related to lost sales and incremental costs incurred during fiscal 2021 and 2022 as a result of an explosion at the plant of a significant alkyd resin supplier, which has been recorded in "SG&A". | ||||||||
| SUPPLEMENTAL INFORMATION | ||||||||||
| RECONCILIATION OF "REPORTED" TO "ADJUSTED" AMOUNTS | ||||||||||
| (Unaudited) | ||||||||||
Three Months Ended |
||||||||||
August 31, |
|
August 31, |
||||||||
|
2024 |
|
|
|
2023 |
|
||||
| Reconciliation of Reported Earnings per Diluted Share to Adjusted Earnings per Diluted Share (All amounts presented after-tax): | ||||||||||
| Reported Earnings per Diluted Share | $ |
1.77 |
|
$ |
1.56 |
|
||||
| MAP initiatives (d) |
|
0.15 |
|
|
0.19 |
|
||||
| (Gain) on sale of a business (e) |
|
- |
|
|
(0.01 |
) |
||||
| Business interruption insurance recovery (f) |
|
- |
|
|
(0.06 |
) |
||||
| Investment returns (g) |
|
(0.03 |
) |
|
(0.04 |
) |
||||
| Income tax adjustment (h) |
|
(0.05 |
) |
|
- |
|
||||
| Adjusted Earnings per Diluted Share (i) | $ |
1.84 |
|
$ |
1.64 |
|
||||
(d) |
Reflects restructuring and other charges, which have been incurred in relation to our Margin Acceleration Plan ("MAP to Growth") and our Margin Achievement Plan ("MAP 2025"), together MAP initiatives, as follows: - Restructuring and other related expense, net: Includes charges incurred related to headcount reductions, facility closures and asset impairments recorded in "Restructuring Expense" on the Consolidated Statements of Income. Restructuring Expense totaled - Exited product lines: Reflects inventory write-offs in the prior year related to the discontinuation of certain product lines within our SPG segment. This resulted from ongoing product line rationalization efforts in connection with our MAP initiatives and were recorded within "Cost of Sales". - ERP consolidation plan: Includes expenses incurred as a result of our stated goals to consolidate over 75 ERP systems across the organization to four ERP platforms, one per segment, as part of our overall MAP strategy as well as costs incurred for other decision support tools to facilitate our commercial initiatives related to MAP 2025 which have been incurred in all segments, including Corporate/Other, and have been recorded within "SG&A". - Professional fees: Includes expenses incurred to consolidate accounting locations, costs incurred to implement technologies and processes to drive improved sales mix and salesforce effectiveness and cost incurred to implement new global manufacturing methodologies with the goal of improving operating efficiency incurred within all of our segments and recorded within "SG&A". All of this spend is in support of stated MAP goals with the most significant expense incurred within our Corporate/Other segment. |
(e) |
Reflects gains associated with post-closing adjustments for the sale of the non-core furniture warranty business in the SPG segment in fiscal 2023 which have been recorded in "SG&A". |
(f) |
Business interruption insurance recovery at our Consumer segment related to lost sales and incremental costs incurred during fiscal 2021 and 2022 as a result of an explosion at the plant of a significant alkyd resin supplier, which has been recorded in "SG&A". |
(g) |
Investment returns include realized net gains and losses on sales of investments and unrealized net gains and losses on equity securities, which are adjusted due to their inherent volatility. Management does not consider these gains and losses, which cannot be predicted with any level of certainty, to be reflective of the Company's core business operations. |
(h) |
|
(i) |
Adjusted Diluted EPS is provided for the purpose of adjusting diluted earnings per share for items impacting earnings that are not considered by management to be indicative of ongoing operations. |
| CONSOLIDATED BALANCE SHEETS | ||||||||||||
| IN THOUSANDS | ||||||||||||
| (Unaudited) | ||||||||||||
| August 31, 2024 | August 31, 2023 | May 31, 2024 | ||||||||||
| Assets | ||||||||||||
| Current Assets | ||||||||||||
| Cash and cash equivalents | $ |
231,555 |
|
$ |
240,586 |
|
$ |
237,379 |
|
|||
| Trade accounts receivable |
|
1,393,283 |
|
|
1,475,470 |
|
|
1,468,208 |
|
|||
| Allowance for doubtful accounts |
|
(49,106 |
) |
|
(56,584 |
) |
|
(48,763 |
) |
|||
| Net trade accounts receivable |
|
1,344,177 |
|
|
1,418,886 |
|
|
1,419,445 |
|
|||
| Inventories |
|
1,003,459 |
|
|
1,117,441 |
|
|
956,465 |
|
|||
| Prepaid expenses and other current assets |
|
319,107 |
|
|
335,065 |
|
|
282,059 |
|
|||
| Total current assets |
|
2,898,298 |
|
|
3,111,978 |
|
|
2,895,348 |
|
|||
| Property, Plant and Equipment, at Cost |
|
2,568,792 |
|
|
2,372,532 |
|
|
2,515,847 |
|
|||
| Allowance for depreciation |
|
(1,219,084 |
) |
|
(1,127,209 |
) |
|
(1,184,784 |
) |
|||
| Property, plant and equipment, net |
|
1,349,708 |
|
|
1,245,323 |
|
|
1,331,063 |
|
|||
| Other Assets | ||||||||||||
| Goodwill |
|
1,315,790 |
|
|
1,300,833 |
|
|
1,308,911 |
|
|||
| Other intangible assets, net of amortization |
|
504,562 |
|
|
541,994 |
|
|
512,972 |
|
|||
| Operating lease right-of-use assets |
|
365,972 |
|
|
324,655 |
|
|
331,555 |
|
|||
| Deferred income taxes |
|
36,563 |
|
|
19,907 |
|
|
33,522 |
|
|||
| Other |
|
178,982 |
|
|
170,587 |
|
|
173,172 |
|
|||
| Total other assets |
|
2,401,869 |
|
|
2,357,976 |
|
|
2,360,132 |
|
|||
| Total Assets | $ |
6,649,875 |
|
$ |
6,715,277 |
|
$ |
6,586,543 |
|
|||
| Liabilities and Stockholders' Equity | ||||||||||||
| Current Liabilities | ||||||||||||
| Accounts payable | $ |
693,519 |
|
$ |
684,075 |
|
$ |
649,650 |
|
|||
| Current portion of long-term debt |
|
6,779 |
|
|
6,885 |
|
|
136,213 |
|
|||
| Accrued compensation and benefits |
|
180,785 |
|
|
170,333 |
|
|
297,249 |
|
|||
| Accrued losses |
|
32,440 |
|
|
28,753 |
|
|
32,518 |
|
|||
| Other accrued liabilities |
|
369,060 |
|
|
378,601 |
|
|
350,434 |
|
|||
| Total current liabilities |
|
1,282,583 |
|
|
1,268,647 |
|
|
1,466,064 |
|
|||
| Long-Term Liabilities | ||||||||||||
| Long-term debt, less current maturities |
|
2,045,387 |
|
|
2,498,426 |
|
|
1,990,935 |
|
|||
| Operating lease liabilities |
|
316,064 |
|
|
279,632 |
|
|
281,281 |
|
|||
| Other long-term liabilities |
|
234,368 |
|
|
287,087 |
|
|
214,816 |
|
|||
| Deferred income taxes |
|
119,946 |
|
|
98,649 |
|
|
121,222 |
|
|||
| Total long-term liabilities |
|
2,715,765 |
|
|
3,163,794 |
|
|
2,608,254 |
|
|||
| Total liabilities |
|
3,998,348 |
|
|
4,432,441 |
|
|
4,074,318 |
|
|||
| Stockholders' Equity | ||||||||||||
| Preferred stock; none issued |
|
- |
|
|
- |
|
|
- |
|
|||
| Common stock (outstanding 128,702; 128,962; 128,629) |
|
1,287 |
|
|
1,290 |
|
|
1,286 |
|
|||
| Paid-in capital |
|
1,156,977 |
|
|
1,133,941 |
|
|
1,150,751 |
|
|||
| Treasury stock, at cost |
|
(897,686 |
) |
|
(812,041 |
) |
|
(864,502 |
) |
|||
| Accumulated other comprehensive (loss) |
|
(540,590 |
) |
|
(593,189 |
) |
|
(537,290 |
) |
|||
| Retained earnings |
|
2,929,439 |
|
|
2,551,142 |
|
|
2,760,639 |
|
|||
| Total RPM International Inc. stockholders' equity |
|
2,649,427 |
|
|
2,281,143 |
|
|
2,510,884 |
|
|||
| Noncontrolling interest |
|
2,100 |
|
|
1,693 |
|
|
1,341 |
|
|||
| Total equity |
|
2,651,527 |
|
|
2,282,836 |
|
|
2,512,225 |
|
|||
| Total Liabilities and Stockholders' Equity | $ |
6,649,875 |
|
$ |
6,715,277 |
|
$ |
6,586,543 |
|
|||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
| IN THOUSANDS | ||||||||
| (Unaudited) | ||||||||
Three Months Ended |
||||||||
August 31, |
|
August 31, |
||||||
|
2024 |
|
|
|
2023 |
|
||
| Cash Flows From Operating Activities: | ||||||||
| Net income | $ |
228,554 |
|
$ |
201,313 |
|
||
| Adjustments to reconcile net income to net | ||||||||
| cash provided by operating activities: | ||||||||
| Depreciation and amortization |
|
46,185 |
|
|
43,539 |
|
||
| Deferred income taxes |
|
(4,646 |
) |
|
2,295 |
|
||
| Stock-based compensation expense |
|
6,226 |
|
|
9,118 |
|
||
| Net (gain) on marketable securities |
|
(5,971 |
) |
|
(6,451 |
) |
||
| Net loss on sales of assets and businesses |
|
- |
|
|
3,263 |
|
||
| Other |
|
(70 |
) |
|
5,100 |
|
||
| Changes in assets and liabilities, net of effect | ||||||||
| from purchases and sales of businesses: | ||||||||
| Decrease in receivables |
|
78,011 |
|
|
87,712 |
|
||
| (Increase) decrease in inventory |
|
(43,991 |
) |
|
22,281 |
|
||
| (Increase) in prepaid expenses and other |
|
(37,620 |
) |
|
(14,277 |
) |
||
| current and long-term assets | ||||||||
| Increase in accounts payable |
|
52,152 |
|
|
18,840 |
|
||
| (Decrease) in accrued compensation and benefits |
|
(116,792 |
) |
|
(88,460 |
) |
||
| (Decrease) increase in accrued losses |
|
(123 |
) |
|
2,211 |
|
||
| Increase in other accrued liabilities |
|
46,144 |
|
|
72,726 |
|
||
| Cash Provided By Operating Activities |
|
248,059 |
|
|
359,210 |
|
||
| Cash Flows From Investing Activities: | ||||||||
| Capital expenditures |
|
(50,742 |
) |
|
(52,201 |
) |
||
| Acquisition of businesses, net of cash acquired |
|
(6,223 |
) |
|
(4,026 |
) |
||
| Purchase of marketable securities |
|
(11,394 |
) |
|
(16,235 |
) |
||
| Proceeds from sales of marketable securities |
|
4,188 |
|
|
9,443 |
|
||
| Other |
|
90 |
|
|
1,502 |
|
||
| Cash (Used For) Investing Activities |
|
(64,081 |
) |
|
(61,517 |
) |
||
| Cash Flows From Financing Activities: | ||||||||
| Additions to long-term and short-term debt |
|
37,807 |
|
|
852 |
|
||
| Reductions of long-term and short-term debt |
|
(131,809 |
) |
|
(193,085 |
) |
||
| Cash dividends |
|
(58,892 |
) |
|
(54,065 |
) |
||
| Repurchases of common stock |
|
(17,500 |
) |
|
(12,500 |
) |
||
| Shares of common stock returned for taxes |
|
(15,396 |
) |
|
(14,833 |
) |
||
| Other |
|
(162 |
) |
|
(712 |
) |
||
| Cash (Used For) Financing Activities |
|
(185,952 |
) |
|
(274,343 |
) |
||
| Effect of Exchange Rate Changes on Cash and | ||||||||
| Cash Equivalents |
|
(3,850 |
) |
|
1,449 |
|
||
| Net Change in Cash and Cash Equivalents |
|
(5,824 |
) |
|
24,799 |
|
||
| Cash and Cash Equivalents at Beginning of Period |
|
237,379 |
|
|
215,787 |
|
||
| Cash and Cash Equivalents at End of Period | $ |
231,555 |
|
$ |
240,586 |
|
||
View source version on businesswire.com: https://www.businesswire.com/news/home/20241002995963/en/
Matt Schlarb, Vice President – Investor Relations & Sustainability, at 330-220-6064 or mschlarb@rpminc.com
Source: RPM International Inc.
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