RPM International Inc. reported financial results for its fiscal 2023 first quarter ended Aug. 31, 2022.

Record sales of $1.93 billion increased 17.1%, and were driven by improving material supply through insourcing and qualifying new suppliers. Price increases across all segments helped offset foreign exchange headwinds and cost inflation, which remained elevated. Geographically, demand was strong in the U.S. and in emerging markets.

European demand was weak during the quarter as the region experienced increasing inflation and other macroeconomic headwinds. Sales included 19.5% of organic growth, 1% growth from acquisitions and foreign currency translation headwinds of 3.4%.
 
Net income increased 25.6% to a record $169 million. In addition to strong sales growth, record fiscal 2023 first-quarter adjusted EBIT benefited from $30 million in MAP 2025 savings as improved material supply allowed savings from operational initiatives to be realized.

“I am proud of RPM associates’ ability to generate record first-quarter consolidated sales and adjusted EBIT. Our businesses skillfully navigated supply chain tightness, cost inflation, macroeconomic challenges and foreign exchange headwinds to expand margins and deliver record first-quarter financial results. In addition, they have continued to implement MAP operational improvement initiatives, with a positive impact on our top and bottom lines,” said Frank C. Sullivan, RPM chairman and CEO.

“All four of our segments achieved double-digit sales growth driven by our procurement and technical teams’ ability to increase material supply through insourcing and qualifying new suppliers. Additionally, pricing was managed by implementing increases to catch up with persistent cost inflation. Three out of our four segments generated strong adjusted EBIT growth, led by our Consumer Group, which benefited from MAP operational efficiencies that were enhanced by our ability to improve material supply. While the global macroeconomic outlook is uncertain, we believe that our MAP 2025 initiatives, diversified business model and strategic focus on maintenance and restoration position us well for the future,” he added.

During the fiscal 2023 first quarter, cash provided by operating activities was $23.6 million compared to $76.1 million during the prior-year period. Despite higher earnings, the decrease was driven by inventory increases designed to build supply chain resiliency. As of Aug. 31, 2022, total debt was $2.84 billion compared to $2.43 billion a year ago.