RPM reports fiscal 2011 second-quarter results
RPM International Inc. reported that on a pro-forma basis, improvements were realized in net sales, net income and earnings per share for its fiscal 2011 second quarter ended November 30, 2010. Prior-year pro-forma results assume that the deconsolidation of its Specialty Products Holding Corp. (SPHC) and subsidiaries, which eliminated approximately $300 million in annual revenues from the company’s industrial segment beginning June 1, 2010, occurred before fiscal 2010. Net sales, net income and earnings per share all posted improvements. Net sales grew 5.3 percent to $826.3 million from $784.5 million, while net income was up 2.3 percent, to $48.8 million from $47.7 million a year ago. Consolidated EBIT grew 2.7 percent, to $89.4 million from $87.1 million in the year-ago second quarter. “On a prior-year pro-forma basis, which offers a better comparison to current-year actual results, RPM’s industrial segment continued a trend of year-over-year sales increases on the strength of our businesses concentrated in maintenance, repair and infrastructure, while our consumer segment faced the challenges of tough comparisons following record results in the fall of 2009. Both segments remain challenged by higher raw material costs, mainly due to capacity reductions by suppliers, which has exerted downward pressure on our gross margins,” said Frank Sullivan, chairman and CEO. On an as reported basis, RPM’s net sales of $826.3 million were down 3.8 percent from the $858.7 million reported in the fiscal 2010 second quarter. Net income was off 12.7 percent, to $48.8 million from $55.9 million in the year-ago second quarter. Consolidated EBIT dropped 4.1 percent to $89.4 million from $93.4 million a year ago. Industrial segment sales grew eight percent to $582.5 million in the fiscal 2011 second quarter from $539.2 million a year ago. Industrial segment EBIT increased 0.7 percent, to $68.7 million from $68.2 million in the fiscal 2010 second quarter. “Industrial sales growth in the second quarter continued to benefit from strong sales comparisons in corrosion control coatings and high performance polymer flooring, while domestic and international sealants lines continued to struggle in the face of weak new construction markets,” Sullivan said. RPM’s consumer segment had a 0.6 percent decline in net sales to $243.8 million from $245.2 million in the fiscal 2010 second quarter. Consumer segment EBIT fell 14.4 percent, to $27.3 million from $31.9 million a year ago. “Our consumer lines maintained or grew their market share, despite challenges in their end markets and tough prior-year comparisons,” said Sullivan.
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