RPM International Inc. reported financial results for its fiscal 2023 third quarter ended Feb. 28, 2023.

Net sales for the nine months ended Feb. 28, 2023 were  $5.24 billion, up from $4.72 billion in the same period of 2022.
Net income was $328 million, up from $293 million in 2022. The Construction Products Group led the way with $1.86 billion in sales, followed by the Consumer segment, which had $1.798 billion, the Performance Coatings Group with $975 million and the Specialty Products Group with $606 million.

Net sales for 3Q 2023 were  $1.52 billion, up from $1.43 billion in 3Q 2022. Net income was $27 million, down from $33 million in 2022.

“During the third quarter, our associates generated record sales and adjusted EBIT. This growth was led by the successful execution of MAP 2025 operating improvement initiatives and leveraging our strong position in end markets benefiting from increased spending for infrastructure and reshoring projects. The Consumer Group also increased margins to more normalized levels, which contributed to growth,” said RPM chairman and CEO Frank C. Sullivan. “These actions overcame headwinds from a challenging economic environment, continued year-over-year inflation, and reduced fixed-cost leverage at our facilities from customer destocking and our own initiatives to normalize inventories.

“The third quarter marks the fifth consecutive period we have achieved both record quarterly sales and adjusted EBIT,” added Sullivan. “This growth demonstrates the value of our strategically balanced business model and the ability of our associates to successfully execute growth initiatives in changing economic conditions.”

Geographically, sales growth was strongest in the U.S. and Latin America, which increased 8% and 7.3% respectively. Sales were weakest in Europe, which declined 3.6%. Excluding the impact of foreign currency translation, all regions achieved revenue percentage growth ranging between mid-single digits and mid-teens.

Sales included 7.3% organic growth, 0.7% growth from acquisitions net of divestitures, and foreign currency translation headwinds of 2.3%.

During the first nine months of fiscal 2023, cash provided by operating activities was $263 million compared to $156 million during the prior-year period, driven primarily by improved profitability. Capital expenditures were $179.7 million compared to $152.4 million during the prior-year period, driven by organic growth opportunities and MAP 2025 efficiency programs.

As of February 28, 2023, total debt was $2.82 billion compared to $2.59 billion a year ago. The increase was driven by increased working capital needs designed to improve supply chain resiliency.

“Given the increasingly cautious economic outlook, we are focused on executing initiatives within our control. These include MAP 2025 initiatives, where we continue to make structural improvements to our costs and working capital to drive margins and cash flow. We remain on track to exceed our year-one MAP 2025 EBIT target of $120 million. Additionally, we are aligning resources with demand levels, launching new products over the next several quarters, and leveraging our strong positions in expanding end markets that serve infrastructure and reshoring projects,” Sullivan added.