RPM reports Q4 and year-end results for fiscal
2012; reports sharp gain in sales and income
RPM International Inc. reported sharp
gains in net sales, net income and diluted
earnings per share for its fiscal 2012 fourth
quarter and year ended May 31, 2012.
Net sales and net income were up significantly over prior-year results. Net sales
grew 12.2 percent to a record $1.1 billion
from $981.8 million in fiscal 2011. Consolidated earnings before interest and taxes
(EBIT) increased 16. 5 percent to $139.5
million from $119.8 million a year ago.
Net income was up 17. 7 percent to $82.6
million from $70.2 million a year ago.
“Our operating companies posted an
excellent finish to the fiscal year by deliv-
ering double-digit increases in sales and net
income over last year’s strong fourth quar-
ter,” said Frank Sullivan, chairman and
CEO. “This performance was driven by in-
ternal growth initiatives, market share
gains and continued geographic expansion,
despite ongoing raw material challenges
and an uncertain global economy.”
Industrial segment sales grew 15. 8 per-
cent to $724.8 million in the fiscal 2012
fourth quarter from $625.9 million a year
ago. Organic sales improved 10.2 percent,
despite 3. 3 percent in foreign exchange
translation losses, while acquisition
growth added 5. 6 percent. Industrial seg-
ment EBIT increased 28. 7 percent to
$90.4 million from $70.3 million in the
fiscal 2011 fourth quarter.
“Nearly all of our industrial businesses
delivered improved sales and earnings for the
quarter. Areas of particular strength included
industrial maintenance coatings and corrosion control coatings, which have benefited
from increasing demand in energy markets,
as well as industrial capital spending and infrastructure investment,” said Sullivan. “The
slowly recovering commercial construction
markets in North America also led to increased sales in sealants, waterproofing,
roofing materials, concrete admixtures and
other construction chemical product lines.”
Net sales for RPM’s consumer segment
grew 5. 9 percent to $377 million from
$355.9 million in the fiscal 2011 fourth
quarter. Organic sales were up 4. 8 percent,
including foreign exchange translation
losses of 0.8 percent, while acquisition
growth added 1.1 percent. Consumer segment EBIT increased 12. 5 percent to $60.3
million from $53.6 million a year ago.
“Sales in the consumer segment, partic-
ularly at our Rust-Oleum subsidiary, bene-
fitted from successful new product
introductions and continued strong take-
away in small-project maintenance, repair
and redecorating by consumers,” said Sulli-
van. “Sales in the mid-single-digit range for
the fourth quarter were in line with our es-
timates, given the pull-forward of sales into
our fiscal third quarter due to the extremely
mild winter season in most of the U.S.”
Fiscal 2012 consolidated net sales, net in-
come and earnings per share saw double-
digit increases. Net sales were up 11. 7
percent to a record $3.8 billion from $3.4
billion in fiscal 2011. Consolidated EBIT in-
creased 14. 9 percent to $396.1 million from
$344.8 million in fiscal 2011. Net income
improved 14.2 percent to a record $215.9
million from $189.1 million in fiscal 2011.
Diluted earnings per share grew 13. 8 percent
to a record $1.65 from $1.45 a year ago.
Sales for RPM’s industrial segment increased 12.2 percent to $2.5 billion from
$2.3 billion in fiscal 2011. The organic sales
increase was 7. 8 percent, with acquisition
growth contributing 4. 4 percent, while foreign exchange had a neutral effect on the
year’s results. Industrial segment EBIT grew
19. 8 percent to $282.4 million from $235.8
million in fiscal 2011.
Consumer segment sales for fiscal
2012 improved 10. 7 percent to $1.24 billion from $1.12 billion reported last year.
Organic sales increased by 10.2 percent,
including net foreign exchange gains of
0.2 percent, with acquisition growth
adding 0.5 percent. Consumer segment
EBIT increased 9. 7 percent, to $160.1 million from $146.0 million a year ago.
During the fourth quarter, RPM announced the acquisition of HiChem Paint
Technologies Pty. Ltd., a producer of pro-
tective coatings for automotive, home and
industrial markets, based in Hallam, Australia. Acquired by RPM’s Rust-Oleum
Group on March 30, 2012, HiChem has
annual sales of approximately $23 million.
On June 19, 2012, subsequent to year-end, RPM’s Building Solutions Group acquired Viapol Ltda., a producer of
building materials and construction products based in Cacapava, Brazil, near Sao
Paulo. Viapol’s annual sales are approximately $85 million.
“While we are planning for another
year of continued improvement in sales
and earnings, we anticipate growth will be
at a more moderate pace in our 2013 fiscal year,” said Sullivan. “In our core North
American markets, we see consumers returning to more normal spending patterns
for home maintenance, repair and redecorating. We also expect continuing modest
momentum in residential and commercial
construction spending.
“We are experiencing some slowdown
in the pace of growth and investment for
the industrial markets we serve, due in
part to the uncertainty that exists around
the November U.S. Presidential election,”
said Sullivan. “We are beginning to see declines in sales and earnings across some of
our European operations. This is compounded by the continuing deterioration
of the Euro versus the U.S. dollar. On the
plus side, we are seeing stabilization in
raw material costs for the first time in
many years and are hopeful that we will
be able to maintain or improve our gross
margin profitability for the year.
“Based on these factors, we expect
consumer segment growth to be in the
range of five to seven percent and that our
industrial segment will grow six to ten
percent, driving RPM consolidated sales
and earnings up year over year in a range
of five percent to ten percent for our fiscal
year ending May 31, 2013.”
From an acquisition perspective, Vi-
apol will add about $85 million of sales
for the full year. CW
