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RPM Pleases Investors with Positive Year-End Earnings and Optimistic 2020 Outlook

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RPM International reported increased quarterly and yearly sales results for FYE May 31, 2019. The firm predicts 2.5% to 4% sales growth in fiscal year 2020 noting that raw material cost inflation is moderating.

Before the opening bell today, RPM International Inc. (RPM:NYSE) announced fourth quarter and year-end results for the period ending May 31, 2019. The results posted by the company appear to be well received by investors as the firm's shares opened 4.35% higher today at the market open, reaching an intraday 52-week high of $68.27 in early trading.

The company reported that net sales for Q4/19 increased 2.8% to $1.60 billion up from $1.56 billion in Q4/18. Net income in Q4/19 increased by 55.7% to $133.4 million up from $85.7 million in Q4/18 resulting in fully diluted earnings per share (EPS) of $1.02 up 61.9% over the $0.63 in Q4/18. Consolidated earnings before interest and taxes (EBIT) in Q4/19 were up 51.5% to $204.6 million compared to $135.0M in Q4/18.

Fiscal 2019 consolidated full-year net sales increased 4.6% to $5.56 billion from $5.32B in FY/18. Net income was $266.6 million versus $337.8 million in FY/18, with diluted EPS for fiscal 2019 of $2.01 versus $2.50 a year ago. Consolidated EBIT was $441.5 million compared to $501.2 million in FY/18.

RPM's chairman and CEO Frank C. Sullivan commented on the outlook for business in the coming year, "On a consolidated basis, we expect to generate revenue growth in the low- to mid-single-digit range during fiscal 2020. . .Further, we expect raw material cost inflation that has been persistent in recent years to begin to moderate."

Sullivan added more specifically, "For the full year 2020, we project modest revenue growth in the range of 2.5% to 4% and with the impact of 2020 MAP to Growth. . .We expect to leverage these sales to adjusted EBIT growth in the 20% to 24% range resulting in expected adjusted diluted EPS between $3.30 and $3.42 for fiscal 2020."

RPM International Inc. manufactures and markets high-performance coatings, sealants and specialty chemicals, primarily for maintenance and improvement applications, through its subsidiary companies. The firm employs more than 14,500 people worldwide and operates 145 manufacturing facilities in 26 countries with its products sold in approximately 170 countries and territories. Fiscal 2019 sales were $5.565 billion, composed of approximately 67% to industrial and specialty markets worldwide with the remaining 33% to consumers primarily in North America. RPM's portfolio is composed of hundreds of brand name products in consumer, industrial and specialty segments including: API, Carboline, CAVE, DAP, Day-Glo, Dri-Eaz, Dryvit, Euclid, EUCO, Fibergrate, Flecto, Flowcrete, Grupo PV, Hummervoll, illbruck, Mohawk, Rust-Oleum, Stonhard, TCI, Toxement, Tremco, Tuf-Strand, Universal Sealants, Viapol, Watco and Zinsser.

The firm's shares opened up today at $65.00 (+$2.71, +4.35%) over Friday's close of $62.29 with shares trading between $64.74 and $68.27 on above average volume. Presently, shares in RPM are trading at $66.26 (+$2.97, +4.77%).


1) Stephen Hytha compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. He or members of his household own securities of the following companies mentioned in the article: None. He or members of his household are paid by the following companies mentioned in this article: None.
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