Durability + Design
Follow us on Twitter Follow us on LinkedIn Like us on Facebook Follow us on Instagram Visit the TPC Store
Search the site

 

D+D News

Main News Page


Sales Up, Income Down for RPM Q2

Wednesday, January 9, 2013

More items for Coatings Technology

Comment | More

Rust-Oleum parent company RPM International Inc. reported a double-digit increase in sales and a double-digit dip in income for its fiscal 2013 second quarter.

The recovering housing market, increased sales of new brands, and other good news for the consumer segment helped drive an 11.1 percent overall sales increase for the quarter ended Nov. 30, according RPM’s report released Tuesday (Jan. 8).

Second-quarter sales were $1.02 billion, up from $916.1 million in the same period a year earlier, the company said.

However, net income for the quarter declined 16.5 percent from the prior year, to $41.7 million, as the company incurred a $10.8 million charge related to its investment in Kemrock Industries and Exports Ltd. The charge was due to weak economic conditions in India, where Kemrock is based, the company reported.

Improvements on Adjusted Basis

RPM Chairman and CEO Frank C. Sullivan said the company’s recorded operating results, on an adjusted basis (which excludes Kemrock’s impact), “continue to meet our plan with sales, EBIT and net income posting strong double-digit increases.”

“We are also seeing benefits from our robust acquisition program, which has added businesses generating approximately $300 million in annual sales during the past 12 months,” he added.

Frank C Sullivan

RPM Chairman and CEO Frank C. Sullivan says sales, EBIT, and net income numbers, on an adjusted basis, continue to meet the company's plan.

For the first half of the fiscal year, sales were $2.06 billion, up 8.5 percent from the same period a year earlier. Net income for the first six months declined 40.4 percent, to $75.6 million, from the first half of FY2012.

Based in Medina, OH, RPM is the holding company for a group of businesses that manufacture and market specialty coatings, sealants, building materials and related services serving industrial and consumer markets.

Consumer Segment Growth

Second-quarter sales for the company’s consumer segment—including Zinsser, Rust-Oleum, DAP, Varathane, Testors and other well-known brands—jumped 18.9 percent to $326.4 million from a year earlier. Acquisition growth added 12.7 percent to the sales total.

Earnings before interest and taxes (EBIT) for the consumer segment improved 44.1 percent, to $38.6 million from $26.8 million in the prior-year period.

Rust-Oleum
rustoleum.com

Recent acquisitions by the Rust-Oleum Group have helped drive sales in the consumer segment. 

First-half sales for the consumer segment were $669.7 million, a 12.9 percent increase from a year ago. Consumer segment EBIT increased 24.4 percent in the first six months of the company’s fiscal year to $97.4 million from the first half of fiscal 2012. 

Sullivan said consumer-segment results benefited from “continued improvement in the U.S. residential housing market and strong demand for higher-end new products.”

"Our consumer product lines are performing to our expectations […] while partially recouping lost margin from the moderation in raw material costs compared to the prior year,” he said.

“Additionally, acquisition activity over the past year, including Synta, Kirker and Australia-based HiChem, contributed to the strong consumer segment sales and earnings growth in the quarter,” said Sullivan. 

Industrial Businesses on a Roll

Second-quarter sales for the company’s industrial segment grew 7.7 percent over the prior-year period, to $691.0 million. Acquisition growth added 6.5 percent, while “organic” growth accounted for 1.2 percent.

Stonhard
Stonhard

Industrial brands in RPM's portfolio include Stonhard, Tremco, Flowcrete and others.

Industrial-segment sales for the first six months of RPM’s fiscal year were $1.39 billion, up 6.6 percent from the prior-year period.

Industrial-segment EBIT decreased 0.2 percent to $78.1 million in the company’s second quarter. For the first half of RPM’s fiscal year, industrial segment EBIT was $155.0 million, a 9.2 percent drop from a year ago.

However, on an as-adjusted basis, industrial segment EBIT grew 6.9 percent in the second quarter, to $78.1 million, from a year ago, the company reported.

"With the exception of our industrial businesses in Europe and our roofing division, most of our industrial product lines continued to perform well, including construction sealants, weather proofing and admixtures, as well as many of our smaller, niche industrial products, such as edible coatings, fluorescent pigments and disaster restoration solutions," Sullivan said.

RPM’s industrial brands include Stonhard, Tremco, illbruck, Carboline, Flowcrete, Universal Sealants and Euco. Products include roofing systems, sealants, corrosion control coatings, floor coatings and specialty chemicals.

Second-Quarter Acquisition Activity

RPM added to its global business portfolio with the completion of two acquisitions in the second quarter.

The company’s Rust-Oleum Group acquired Synta Inc., a $40 million producer of exterior wood deck and concrete restoration systems sold under the brands of Deck Restore and Concrete Restore at leading home centers and other retail outlets. Synta is based in Clarkston, GA.

RPM2 Consumer Group acquired Kirker Enterprises (Paterson, NJ), a manufacturer of nail-care enamels, coatings components and related products for the personal care industry and has sales of more than $100 million.

Looking Ahead

For fiscal 2013, RPM continues to expect adjusted earnings per share to grow in a range of 9 to 12 percent to $1.80 to $1.85, on projected sales growth between 8 and 10 percent.

Sullivan added, “As usual, we expect weaker results for the seasonally difficult fiscal third quarter ending Feb. 28, 2013, but anticipate a strong fiscal 2013 fourth quarter.”

   

Tagged categories: Acquisitions; Coatings manufacturers; Earnings reports; Economy; Finance; Market; RPM; Rust-Oleum Corp.; Stonhard

Comment Join the Conversation:

Sign in to our community to add your comments.

Advertisements
 
Keim Mineral Coatings
 
Mineral Silicate Paints + Stains Fuse to Concrete
 
• Forms permanent chemical bonds
• Becomes part of the concrete
• Will never peel
• Looks completely natural
 

 
Shield Industries, Inc
 
FireGuard® E-84 Intumescent Coating - Shield Industries, Inc
 
Trust the certified protection of the industry’s most innovative intumescent coating FireGuard® E-84 to provide you with the 1 and 2 hour fire ratings you need.
 

 
Novatek Corporation
 
Novatek Portable Air Filtration Systems
 
Air Scrubbers/Negative Air machines for restoration, abatement, dust & odor control, hazardous contaminant removal from job sites to clean rooms and hospitals. Portable, affordable!
 

 
 
 

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

TEL 1-412-431-8300  • FAX  1-412-431-5428  •  EMAIL webmaster@durabilityanddesign.com


The Technology Publishing Network

Durability + Design PaintSquare the Journal of Protective Coatings & Linings Paint BidTracker

 

© Copyright 2012-2018, Technology Publishing Co., All rights reserved