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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
Specialty Products Group Revenue
CapyFin.comConsumer Group 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 The company has withdrawn its prior earnings guidance for the fourth quarter and full year of fiscal 2020.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.
Revenue & Expenses
Visualization of income flow from segment revenue to net income