Coatings Industry News

Main News Page

RPM Reports Record Sales in Q2

Thursday, January 9, 2020

Comment | More

RPM International Inc. (Medina, Ohio), parent company of coatings and sealants brands including Carboline and Tremco, released its financial results for its fiscal 2020 second quarter on Wednesday (Jan. 8), reporting record Q2 sales of $1.40 billion, up 2.8% from last year.

The company also notes in its report that the 2020 second quarter included restructuring and other charges related to the company’s 2020 MAP to Growth operating improvement plan of $34.4 million, compared to using only $29.2 million in the same period of fiscal 2019.

Net income came in at $77 million for Q2 2020, up 56.6% compared to $49.2 million during the second quarter last year. Diluted earnings per share were $0.59 compared to $0.37, and consolidated earnings before interest and taxes were up 23.3% to $119.3 million compared to $96.8 million.

“Our very strong bottom-line growth in the quarter was primarily driven by our 2020 MAP to Growth, which is enabling us to grow earnings at a faster rate than those of our peers,” said Frank C. Sullivan, RPM chairman and Chief Executive Officer.

“Actions taken included delayering management, consolidating manufacturing and shedding low-margin product lines to free up capacity for more value-added, EBIT-accretive volume. Pricing and moderating raw material inflation also positively impacted results.”

Numbers by Segment

Beginning with the biggest growth in sales for RPM Q2, RPM reported that its Construction Products Group’s net sales increased 6.9%—$499.5 million from $467.3 million—which it says reflected organic growth of 7.4% and acquisitions contributing an additional 1.2%. Adjusted EBIT, which excludes charges related to acquisitions, restructuring and other expenses, increased 43.3% to $61.9 million year over year.

RPM International Inc.

RPM International Inc. (Medina, Ohio), parent company of coatings and sealants brands including Carboline and Tremco, released its financial results for its fiscal 2020 second quarter on Wednesday (Jan. 8), reporting record Q2 sales of $1.40 billion, up 2.8% from last year.

“Despite a tepid North American commercial construction market, our roofing and concrete admixture and repair products businesses in the Construction Products Group continued to pick up market share. Additionally, our recent acquisitions performed well, including Nudura, a manufacturer of insulated concrete forms, and Schul, a producer of joint sealants for commercial construction,” said Sullivan.

“The segment’s second quarter sales benefited from a backlog that resulted from rainy weather during the first quarter, which had slowed construction activity. Offsetting organic growth was foreign currency translation and the revenue impact of discontinued product offerings that do not meet our more stringent margin or working capital criteria.”

The Performance Coatings Group also generated an increase in sales—0.3%, or $292.7 million from $292 million, which was also attributed to organic growth of 1.7% and acquisitions contributing 0.1%. Adjusted EBIT was $37 million, up 12.6% as compared to the same period of fiscal 2019. Sullivan pointed to RPM’s businesses providing corrosion control and fireproofing coatings as the contributing factor of the increases.

The second biggest growth in sales in RPM Q2 was seen in the Consumer Group, which reported a growth of 6% to $450.9 million from $425.3 million. Adjusted EBIT was $ $54.7 million.

“Pent-up demand for exterior small-project paints and coatings caused by the exceptionally wet weather during the first quarter in North America supported the segment’s stronger second-quarter sales growth,” Sullivan said.

“On the bottom line, the Consumer Group benefited from 2020 MAP to Growth initiatives, enhanced manufacturing disciplines, as well as last year’s price increases and two plant closures, which are helping margins trend higher toward historical levels.”

The only segment to report a decrease in sales was the Specialty Products Group, which reported only $158.2 million compared to $178 million in the year-ago period. Organic sales declined 10.5%, and foreign currency translation reduced sales by 0.6%. Adjusted EBIT was $23.2 million in the fiscal 2020 second quarter cpomapred to $28.8 million.

“Substantially all of the revenue decline at our Specialty Products Group resulted from difficult revenue comparisons to the prior year when natural disasters, including hurricane activity and more rampant wildfires, drove demand for our water restoration equipment products and our fluorescent pigments, which are used in fire retardant tracer dyes,” stated Sullivan.

“This segment has made recent management changes to accelerate top-line growth. At the same time, it is consolidating ERP systems to one platform and implementing other 2020 MAP to Growth operational improvements to reduce costs. It is anticipated that the segment will benefit from these actions in the coming quarters.”

First-Half Sales, Forecast

To wrap up the second quarter, RPM also reported fiscal 2019 first-half numbers, including a net sales improvement of 1.8%, or $2.87 billion from $2.82 billion, as well as a net income increase, coming in at $183.2 million from $199 million, 54% higher as compared to this time last year.

By segment, first-half sales in the Construction Products Group were up 5.2%, or $1.04 billion from $980 million; the Performance Coatings Group sales were up 0.3%, $590 million from $588.4 million; the Consumer Group improved by 3.1%, $930.2 million from $902.6 million; and the Specialty Products Group sales decreased from $346.7 million in the first half of 2019 to $318.3 million in the firs half of 2020.

Sullivan said that for the third quarter, RPM expects sales to be up 2.5% to 4% with strong leverage to the bottom line for an estimated 25% to 30% adjusted EBIT growth.

“As a reminder, our third quarter historically provides our most modest results each year because it falls during the winter months of December through February, when painting and construction activity slow due to cold and snowy weather. Based on past history, we expect roughly 20% of our annual consolidated sales to be generated during the third quarter and a proportionate amount of this fiscal year’s 2020 MAP to Growth savings will result during the period as well.”


Tagged categories: Asia Pacific; Business management; Business matters; Business operations; Carboline; Coating Materials; Coating Materials - Commercial; Earnings reports; EMEA (Europe, Middle East and Africa); Finance; Good Technical Practice; Latin America; North America; Project Management; RPM; Rust-Oleum Corp.; Tremco; Z-Continents

Comment Join the Conversation:

Sign in to our community to add your comments.


HoldTight Solutions Inc.

Tarps manufacturing, Inc.

Axxiom Manufacturing

KTA-Tator, Inc. - Corporate Office

Sauereisen, Inc.

Western Technology Inc.


Abrasives Inc.


Technology Publishing Co., 1501 Reedsdale Street, Suite 2008, Pittsburgh, PA 15233

TEL 1-412-431-8300  • FAX  1-412-431-5428  •  EMAIL

The Technology Publishing Network

PaintSquare the Journal of Protective Coatings & Linings Paint BidTracker

EXPLORE:      JPCL   |   PaintSquare News   |   Interact   |   Buying Guides   |   Webinars   |   Resources   |   Classifieds
REGISTER AND SUBSCRIBE:      Free PaintSquare Registration   |   Subscribe to JPCL   |   Subscribe to PaintSquare News
MORE:      About   |   Privacy Policy   |   Terms & Conditions   |   Support   |   Site Map   |   Search   |   Contact Us