RPM International (RPM) Misses Q1 EPS by 12c, Revenues Beat

RPM International (NYSE: RPM) reported Q1 EPS of $0.76, $0.12 worse than the analyst estimate of $0.88. Revenue for the quarter came in at $1.46 billion versus the consensus estimate of $1.42 billion.

• Sales increase 8.5% to first-quarter record
• Raw material costs and restructuring expenses affect profitability
• Operating improvement plan implementation continues to streamline costs
• Comprehensive plan update to be provided at November 28 investor day

“We saw strong top-line sales growth in the first quarter, with organic sales growth up 7.8%, while profitability continued to be adversely affected by rising raw material costs. In addition, bottom-line results reflected the impact of restructuring charges, higher legal and advertising costs in our consumer segment, and the adverse effect of transactional foreign exchange,” stated Frank C. Sullivan, RPM chairman and chief executive officer.

“Our team is focused on driving increased profitability, long-term growth and enhanced value for our shareholders, and we are making good progress in executing on our operating improvement plan, which is specifically designed to increase margins, reduce working capital, and improve overall operating efficiency. During the quarter, we continued our strategic restructuring initiatives, including the reduction of more than 150 positions and the announced closure of four manufacturing facilities, all in line with our 2020 Margin Acceleration Plan,” stated Sullivan.

Business Outlook

“Our businesses will continue to aggressively pursue price increases to protect our gross profit margins in the face of continued raw material cost escalation. With asbestos trust payments now behind us, we are implementing strategic initiatives to enhance shareholder value through operational improvements and improved capital allocation. The current phase of our restructuring program is proceeding as scheduled with recently announced plant closings and leadership realignment. We will share a comprehensive update on our plan at an investor day on November 28, which will be webcast via the RPM website at www.rpminc.com,” stated Sullivan.

For earnings history and earnings-related data on RPM International (RPM) click here.

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