RPM Reports Results for Fiscal 2019 Fourth Quarter and Year End
RPM International Inc. (NYSE: RPM), a world leader in specialty coatings, sealants and building materials, today reported financial results for its fiscal 2019 fourth quarter ended May 31, 2019. The company also provided an update on the implementation of its 2020 MAP to Growth operating improvement plan.
Fourth-Quarter Consolidated Results
Net sales for the fourth quarter increased 2.8% to $1.60 billion from $1.56 billion a year ago. Net income in the quarter increased 55.7% to $133.4 million from $85.7 million reported in the fourth quarter of fiscal 2018. Diluted earnings per share (EPS) were up 61.9% to $1.02 compared with $0.63 in the year-ago quarter. Income before income taxes (IBT) was $176.9 million, up 50.0% versus $117.9 million reported a year ago. Consolidated earnings before interest and taxes (EBIT) were up 51.5% to $204.6 million compared with $135.0 million a year ago.
The fourth quarters of fiscal 2019 and 2018 included restructuring and other charges of $36.8 million and $62.2 million, respectively. Excluding the charges in both periods, adjusted EBIT increased 22.4% to $241.4 million from $197.3 million a year ago. Additionally, due to changes in the accounting standards for marketable equity securities in the current year, the company has also excluded the impact of all unrealized net gains and losses from marketable equity securities as well as realized net gains and losses on sales of all marketable securities from adjusted EPS for both fiscal 2019 and 2018, as their inherent volatility is outside of management’s control and cannot be predicted with any level of certainty. These investments resulted in a net after-tax loss of $1.7 million for the fourth quarter of fiscal 2019 and an after-tax gain of $3.2 million during the same quarter last year. Excluding the restructuring and other charges, as well as investment gains and losses, adjusted diluted EPS increased 21.6% to $1.24 from $1.02 a year ago. Share repurchases during fiscal 2019 and the retirement of RPM’s 2.25% convertible senior notes due in 2020 resulted in $0.05 per diluted share accretion for the quarter.
“We are very pleased with our significant earnings leverage for the quarter, which was bolstered by our 2020 MAP to Growth operating improvement plan, the benefits of which are beginning to be realized. Also contributing to the bottom line were recently implemented price increases and stabilizing raw material cost inflation. These gains were partially offset by continuing increases in costs for distribution and labor,” stated RPM chairman and CEO Frank C. Sullivan.