RPM International Inc. reported record sales for the fiscal third-quarter ended Feb. 28. However net income declined, due to continued higher raw material costs and asbestos liability costs, the company said.
“Due to seasonal effects of winter weather, our third quarter is historically our weakest quarter for both sales and earnings. Nevertheless, both of our operating segments were able to exceed their targets for internal growth, reflecting the ongoing focus on growth among all of our businesses,” said Frank C. Sullivan, president and CEO. “While we are not satisfied with the earnings results in this most recent quarter, the underlying fundamentals of RPM are the strongest in recent memory, underpinning our optimism about RPM’s future.”
RPM’s consolidated net sales were $516.3 million for the third quarter, up 8.9% over last year’s third-quarter sales of $474 million. The company did, however, report a net loss of $4.8 million, compared with net income of $6.0 million in the fiscal 2004 third quarter. Excluding the asbestos charge, adjusted fiscal 2005 third-quarter net income was $4.5 million. Including an asbestos charge of $15 million pre-tax to increase RPM’s reserves for known asbestos claims, consolidated earnings before interest and taxes (EBIT) were $0.8 million compared with $17.1 million in the year-ago quarter. Excluding the asbestos charge, adjusted EBIT declined 7.3% to $15.8 million. RPM’s industrial segment’s consolidated third quarter sales rose 10.7% to $293.1 million, while consumer segment sales rose 6.7% to $223.2 million. For the first nine months of fiscal 2005, RPM’s consolidated net sales rose 10.1% to a record $1.8 bil