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RPM International Reports Record Fiscal 2025 Second-Quarter Results

AInvestTuesday, Jan 7, 2025 6:56 am ET
4min read


RPM International Inc. (NYSE: RPM), a global leader in specialty coatings, sealants, and building materials, has reported record financial results for its fiscal 2025 second quarter, ended November 30, 2024. The company's strong performance was driven by its MAP 2025 operating improvement initiatives, which have led to improved profitability and cash flow.



RPM's consolidated net sales for the quarter increased by 3.0% to $1.85 billion, compared to the prior year. Net income attributable to RPM stockholders grew by 25.9% to $183.2 million, while diluted earnings per share (EPS) increased by 25.7% to $1.42. Income before income taxes (IBT) and earnings before interest and taxes (EBIT) also saw significant increases, rising by 8.8% and 3.1%, respectively. Adjusted EBIT and adjusted diluted EPS reached record levels, increasing by 7.7% and 13.9%, respectively, compared to the prior year.



The company's strong performance was driven by higher volumes in all four segments, as businesses capitalized on targeted organic growth opportunities and leveraged their focus on repair and maintenance. Businesses serving high-performance construction projects with technical solutions performed particularly well, while those serving residential end markets exhibited signs of stabilization and were aided by favorable weather conditions.

Geographically, sales growth was generally solid across North American businesses and was mixed elsewhere. In Europe, MAP 2025 initiatives resulted in significantly improved profitability. Africa/Middle East generated strong organic growth driven by demand from high-performance construction and infrastructure projects, while Latin American sales declined due to foreign currency translation. Asia/Pacific sales declined due to challenging comparisons in the prior year when a large project was completed.

RPM's adjusted EBIT and adjusted EBIT margin were second-quarter records, driven by MAP 2025 initiatives, improved sales, and structural SG&A streamlining. The commodity cycle was neutral during the quarter, and pockets of inflation were present, particularly in the Consumer Group. Adjusted EBIT includes the negative impact of a $4.4 million bad debt expense from a Consumer Group customer bankruptcy.

For the fiscal 2025 third quarter, RPM anticipates flat sales and adjusted EBIT to grow or decline by low-single-digits. The company's fiscal 2025 full-year sales outlook has been reiterated at low-single-digit growth, with the adjusted EBIT outlook narrowed to 6% to 10% growth.

RPM's strong financial performance demonstrates the company's ability to capitalize on growth opportunities in a mixed economic environment. The company's MAP 2025 initiatives have contributed significantly to its record financial results, with improved profitability, cash flow, and debt paydowns. RPM's strategic focus on repair and maintenance, as well as technical product offerings, has provided recession-resistant revenue streams and premium pricing power. As the company continues to execute its strategic initiatives, investors can expect RPM to maintain its strong financial performance and continue to grow its business.
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