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Feb 29, 2020
RPM Q3 2020 Earnings Report
Reported strong financial results driven by the MAP to Growth operating improvement program.
Key Takeaways
RPM International Inc. reported a 2.9% increase in net sales to $1.17 billion for the third quarter of fiscal 2020. Adjusted diluted EPS increased by 76.9% to $0.23. The company's financial guidance and stock buyback program have been suspended due to uncertainty created by COVID-19.
Third-quarter adjusted diluted EPS increased 76.9% over the prior-year quarter and exceeded guidance.
Third-quarter net sales were $1.17 billion, an increase of 2.9% over the prior year.
Third-quarter net income was $11.9 million.
Cash provided by operating activities increased $236 million year over year.
RPM
RPM
RPM Revenue by Segment
Revenue by Segment
Consumer Revenue
CapyFin.com Forward Guidance
Due to the disruption and uncertainty caused by COVID-19, RPM expects its financial results to be impacted and anticipates consolidated fourth-quarter revenue to be down 10% to 15% year over year. The company has withdrawn its prior earnings guidance for the fourth quarter and full year of fiscal 2020.
Positive Outlook
- The fourth quarter was off to a good start in March, with consolidated sales up approximately 5% over the prior year.
- Many of RPM's products are used for construction, maintenance, and repair projects, which are deemed essential in many cases and are relatively recession resistant.
- A large number of RPM's North American customers, such as those in construction and DIY home and hardware retail, are also considered essential and currently remain open for business.
- With people spending more time in their homes, there is potential for increased activity in DIY projects.
- Demand is strong for RPM's professional and consumer cleaning and disinfectant brands, some of which are effective against Coronavirus.
Challenges Ahead
- RPM expects its financial results to be impacted by the disruption and uncertainty COVID-19 is having on the global economy.
- The financial impact to the company's results cannot be reasonably estimated, but could be material.
- COVID-19 is disrupting RPM's ability to implement new initiatives under its restructuring program.
- The company will be extending the timeline for achieving its MAP to Growth goals.
- The company anticipates that its consolidated fourth-quarter revenue will be down 10% to 15% year over year.