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RPM Reports Record Fiscal 2023 Fourth-Quarter and Full-Year Results

Record fourth-quarter net sales of $2.02 billion increased 1.6% over prior year Fourth-quarter net income was $151.4 million, diluted EPS was $1.18, and EBIT was $236.4 million Fourth-quarter adjusted diluted EPS was $1.36 and adjusted EBIT increased 1.5% to a record $267.8 million Record fourth-quarter cash provided by operating activities of $314.1 million Record fiscal 2023 net sales of $7.26 billion increased 8.2% over prior year Fiscal 2023 net income was $478.7 million, diluted EPS was $3.72, and EBIT was a record $758.6 million Fiscal 2023 adjusted diluted EPS was a record $4.30 and adjusted EBIT increased 18.8% to a record $841.6 million Fiscal 2024 first-quarter outlook calls for sales growth of low-single digits and adjusted EBIT growth of high-single digits Fiscal full-year 2024 outlook calls for sales growth of mid-single digits and adjusted EBIT growth of low-double-digits to mid-teens MEDINA, Ohio–( BUSINESS WIRE )–RPM International Inc. (NYSE: RPM), a world leader in specialty coatings, sealants and building materials, today reported financial results for its fiscal 2023 fourth quarter and year ended May 31, 2023. “Headcount reductions, impairments, closures of facilities and related costs” Tweet this “RPM generated a sixth consecutive quarter of record sales and adjusted EBIT. While prioritizing cash flow over profitability, we were still able to achieve adjusted EBIT growth primarily through our MAP 2025 initiatives. Our progress on inventory normalization initiatives drove a fourth-quarter record $314 million of cash flow from operations and allowed us to reduce debt by nearly $140 million. These impressive results were due to the hard work, collaboration and agility of our associates, which allowed us to capture growth opportunities and leverage MAP 2025 initiatives to operate more efficiently,” said Frank C. Sullivan, RPM Chairman and CEO. Sullivan continued, “As challenging conditions impacted certain end markets, our nimbleness and balanced business model enabled our growth. Several businesses benefited from their pivot to selling engineered solutions into infrastructure and reshoring-related capital projects, and our strategic focus on maintenance and repair provided resilience in construction end markets. Our operational flexibility, which is a product of MAP 2025 initiatives and our entrepreneurial culture, allowed us to quickly meet a seasonal demand increase at the end of the quarter.” Fourth-Quarter 2023 Consolidated Results Consolidated Three Months Ended $ in 000s except per share data May 31, May 31, 2023 2022 $ Change % Change Net Sales $ 2,016,210 $ 1,983,890 $ 32,320 1.6 % Net Income Attributable to RPM Stockholders 151,360 199,005 (47,645 ) (23.9 %) Diluted Earnings Per Share (EPS) 1.18 1.54 (0.36 ) (23.4 %) Income Before Income Taxes (IBT) 206,639 221,677 (15,038 ) (6.8 %) Earnings Before Interest and Taxes (EBIT) 236,431 251,652 (15,221 ) (6.0 %) Adjusted EBIT (1) 267,787 263,724 4,063 1.5 % Adjusted Diluted EPS (1) 1.36 1.42 (0.06 ) (4.2 %) (1) Excludes certain items that are not indicative of RPM’s ongoing operations. See tables below titled Supplemental Segment Information and Reconciliation of Reported to Adjusted Amounts for details. Three of the four segments achieved record fiscal 2023 fourth-quarter sales, which were driven by increased pricing in response to continued inflation, offset by lower volumes. Volumes grew in certain businesses that positioned themselves to benefit from increased maintenance and construction spending on infrastructure and reshoring capital projects. On a consolidated basis, volumes declined, due in large part to destocking. The volume declines were more pronounced in certain new commercial and residential construction sectors, as well as OEM markets. Customer take-away at retail stores was also negative during most of the quarter, which further compounded the volume declines caused by retailer destocking. However, demand increased late in the quarter with the arrival of warmer weather, and the Consumer Group was able to quickly respond because of process improvements put in place through MAP 2025. Geographically, sales grew 1.4% in North America, declined 1.9% in Europe, and grew 9.3% in Latin America. Sales also grew 17.5% in Asia/Pacific and 7.9% in Africa and the Middle East, fueled by higher spending on infrastructure projects. Excluding the impact of foreign currency translation, all regions generated positive sales growth. Sales included 2.6% organic growth and 0.4% growth from acquisitions net of divestitures, partially offset by foreign currency translation headwinds of 1.4%. Record fiscal 2023 fourth-quarter adjusted EBIT was driven by sales growth, benefits from MAP 2025 initiatives and Consumer Group margin recovery toward historical averages. These were partially offset by unfavorable fixed-cost leverage due to lower volumes and internal inventory normalization initiatives, unfavorable foreign currency translation and continued cost inflation. During the fourth […]

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Daisie Hobson

Daisie Hobson is a Director at the Reshoring Institute and an engineer with many years of experience in manufacturing and project management.

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