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RPM Reports Record 1st Quarter for 2010

Monday, October 5, 2009

RPM International, a holding company for consumer and industrial coatings subsidiaries, reported record 2010 first-quarter net income, earnings per share, and cash flow for the period ended August 31, 2009. The company announced the results on October 5, 2009.

During the fiscal 2010 first quarter, the company’s consumer segment earnings before interest and taxes (EBIT) more than offset the decline in industrial segment EBIT, compared to the fiscal 2009 first quarter earnings, the company said. Earnings in both business segments benefited from expense reductions implemented during the previous fiscal year and improving gross profit margins.

While first quarter net sales of $916 million were 7.1% below the $985.5 million reported a year ago and core growth declined 3.2%, with the balance of 3.9% attributable to negative foreign exchange translation, net income of $73 million in Q1 of 2010 was a first-quarter record, up from last year’s record $69.5 million, the company said.

The consumer segment accounted for 34.5% of consolidated Q1 sales, posting core growth of 12.5% with a negative foreign exchange impact of 2.6%, RPM reported. Consumer sales rose to $316.2 million from $287.9 million a year ago. Consumer segment EBIT increased 54.1% to $53.3 million in fiscal 2010 Q1 from $34.6 million in the same period a year ago.

Sales for RPM’s industrial segment, representing 65.5% of the company’s consolidated first-quarter sales, declined 14% to $599.7 million, from $697.6 million a year ago. Core sales growth declined 9.6%, with the balance of 4.4% resulting from the negative impact of foreign exchange. Segment EBIT fell 10.3% to $81.9 million from $91.3 million in fiscal 2009 Q1.

“As anticipated, our industrial segment continues to face a depressed commercial construction environment and reduced capital spending in many markets. Despite the lack of top-line growth, the impact of aggressive cost reduction actions, coupled with a more stable raw material environment, enabled our industrial companies to generate sequentially higher EBIT that was well ahead of last year’s fourth quarter,” said Frank C. Sullivan, chairman and CEO.

During the fiscal 2010 Q1, cash flow from operations was a record $52.1 million, compared to negative cash from operations of $12.3 million a year ago, the company said. Capital expenditures were $3.3 million in the quarter, down from $12.2 million in the same period in fiscal 2009.

RPM International, Inc., owns subsidiaries for coatings and sealants that serve the industrial and consumer markets. For details, visit www.rpminc.com.