RPM Reports Fourth-Quarter, 2020 Numbers
RPM International Inc. (Medina, Ohio), parent company of specialty coatings and sealants brands including Carboline and Tremco, released its financial report for its 2020 fourth quarter and year-end numbers.
Despite balancing its company portfolio to mitigate the impact of the COVID-19 pandemic, RPM reported a 8.9% sales decrease for the fourth quarter. Income for the year, however, increased 14.2% to $304.4 million.
“As anticipated, our growth was temporarily impacted by the COVID-19 pandemic, but proactive measures, including our MAP to Growth program, helped mitigate the impact on our bottom line,” stated RPM Chairman and CEO Frank C. Sullivan. “As a result, while our fourth-quarter adjusted diluted earnings per share were below last year’s all-time high levels, they were still our second best on record.”
Fiscal 2020 Q4 net sales landed at $1.46 billion compared to $1.6 billion a year ago, while net income for the quarter was $109 million compared to $133.4 million during this period last year.
“Over the course of the pandemic, we have remained focused on protecting the health and well-being of our associates and their family members. We instituted comprehensive safety protocols to keep our employees healthy in the workplace, while allowing associates whose jobs can effectively be performed remotely to do so,” said Sullivan.
“During the quarter, a number of our plants around the world were temporarily closed due to COVID-19, either because of government mandates or for disinfecting and cleaning. Thanks to our associates’ efforts to follow our protocols, nearly all of our manufacturing facilities have been open and operational since our fiscal year end.”
Fiscal 2020 full-year net sales were $5.51 billion, down just 1% compared to the $5.56 billion for the 2019 fiscal year. Fiscal 2020 and 2019 included restructuring and other charges of $121.3 million and $126.0 million, respectively. Excluding those charges in both years, RPM’s adjusted EBIT was up 9.3% to $620.3 million compared to adjusted EBIT of $567.5 million last year.
Numbers By Segment
The net sales for the Construction Products Group came in at $472.4 million for the fourth quarter, a 15.6% decrease compared to last year’s $559.6 million.
“The point of strength in our Construction Products Group was its U.S. roofing business, which achieved good top- and bottom-line growth. Because roofing projects are completed outdoors and do not require entry into customers’ facilities, we were able to continue with limited interruption from the pandemic,” said Sullivan.
“Overall, the segment fared better in the U.S., where construction was generally deemed an essential industry and continued to operate with moderate disruption versus certain international markets, where construction was not considered essential and resulted in significant sales declines for the quarter. International results were further affected by currency headwinds. While the segment’s sales declined during the quarter, earnings declined at a lesser rate, due largely to our operating improvement plan, which included the consolidation of two manufacturing facilities, and proactive measures taken to trim expenses.”
For the year, Construction Products’ sales were $1.88 billion, a decrease of 1% compared to the $1.9 billion from last year.
The Performance Coatings Group’s net sales were $235.1 million for the quarter, a decline of 20.2% from the $294.5 million in sales during this quarter last year. The group’s fiscal 2020 full-year sales declined by 4.9% to $1.08 billion from $1.14 billion during fiscal 2019.
In the Consumer Group, net sales increased year over year in Q4, with $616.2 million compared to $577.5 million. Sullivan attributed this to a 12% increase in sales as many home improvement retailers and hardware stores remained open throughout the pandemic. For the year, 2020 sales were up 4.7% to $1.95 billion from $1.86 billion during fiscal 2019.
Lastly, the Specialty Products Group reported net sales of $135.2 million for Q4, a 20.3% decline from last year’s $169.7 million. This segment reportedly accounted for just 9% of the quarter’s consolidated sales.
“The Specialty Products Group, which accounted for 9% of the quarter’s consolidated sales, was challenged because of struggles in the OEM markets it serves with its wood coatings, powder coatings, fluorescent pigments and other products,” Sullivan said. “For example, the furniture and marine distribution channels that the segment serves were closed for an extended period in the U.S. because they were not classified as essential industries.”
The group also experienced the most significant decline for the year, posting sales of $601.0 million compared to $670.2 million a year ago, representing a decline of 10.3%.
“After an interruption in our sales and earnings growth momentum due to lockdowns at the end of last fiscal year, for the first quarter we expect to resume the growth typical of recent quarters. Our fiscal 2021 first-quarter outlook is for net sales growth in low single digits and adjusted EBIT growth of 20% or more. After bottoming out in April and May, business has been trending better in the first quarter as many markets have re-opened,” said Sullivan.
“Looking ahead to the full year of fiscal 2021, we anticipate our Construction Products Group and Performance Coatings Group could experience sales declines for the first three quarters and then turn positive in the fourth quarter. Our Consumer Group has continued its sales momentum into fiscal 2021. The Specialty Products Group is expected to face negative sales comparisons during the first two quarters, which should turn positive on the back half.
“These sales projections are based on the assumption that we do not experience a second wave of lockdowns related to COVID-19. Given the unprecedented volatility in our recent monthly sales and continued economic uncertainty related to the length and severity of the COVID-19 health crisis, we are not providing earnings guidance at this time for the full year of fiscal 2021.”