RPM's Q3 Earnings Exceed Expectations

  • RPM International Inc.RPM reported third-quarter FY22 sales growth of 13% year-over-year to $1.43 billion, beating the consensus of $1.41 billion.
  • Sales by segments: Construction Products Group $482 million (+21.7% Y/Y), Performance Coatings Group $270.9 million (+19.6% Y/Y), Specialty Products Group $189.4 million (+11.9%Y/Y) and Consumer Group $491.6 million (+2.9% Y/Y).
  • Adjusted EPS was $0.38, beating the consensus of $0.30.
  • The gross margin contracted by 240 bps to 34.8%.
  • Adjusted EBIT was $80.56 million (+0.8% Y/Y), and the margin contracted by 70 bps to 5.6%.
  • YTD cash from operations was $156 million, compared to $651.9 million a year ago.
  • RPM’s total liquidity, including cash and committed revolving credit facilities, stood at $1.46 billion as of February 28, 2022.
  • Total debt was $2.59 billion compared to $2.31 billion a year ago and $2.38 billion on May 31, 2021.
  • 4Q22 outlook: The company expects sales growth and adjusted EBIT growth in the low teens.
  • RPM expects earnings to continue to be affected by raw material, freight, and wage inflation and the impact on sales volumes from operational disruptions caused by raw material shortages.
  • Price Action: RPM shares are trading higher by 4.40% at $86.78 on the last check Wednesday.
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