Record fourth-quarter sales of $2.08 billion, an increase of 3.7% compared to the prior year
Record fourth-quarter net income of $225.8 million, record diluted EPS of $1.76, and record EBIT of $271.0 million
Record fourth-quarter adjusted diluted EPS of $1.72, an increase of 10.3% over the prior-year record; record adjusted EBIT of $314.4 million, an increase of 10.1% over the prior-year record
Record fiscal 2025 sales of $7.37 billion, an increase of 0.5% compared to the prior-year record
Record fiscal 2025 net income of $688.7 million, record diluted EPS of $5.35 and record EBIT of $865.2 million
Record fiscal 2025 adjusted diluted EPS of $5.30, an increase of 7.3% over the prior-year record; record adjusted EBIT of $976.0 million, an increase of 3.7% over the prior-year record; and record adjusted EBIT margin of 13.2%
Fiscal 2026 full-year outlook calls for sales to increase in the low- to mid-single-digit range and adjusted EBIT to increase in the high-single- to low-double-digit range
Fiscal 2026 first-quarter outlook calls for low- to mid-single-digit sales and adjusted EBIT growth
MEDINA, Ohio, July 24, 2025--(BUSINESS WIRE)--RPM International Inc. (NYSE: RPM), a world leader in specialty coatings, sealants and building materials, today reported record financial results for its fiscal 2025 fourth quarter and full year ended May 31, 2025.
Frank C. Sullivan, RPM chairman and CEO commented, "By leveraging top-line growth with improved operating efficiency, we demonstrated the Power of RPM and generated record results for the fourth quarter and full year. Our ability to provide systems and turnkey solutions for high-performance buildings, as well as our focus on maintenance and restoration, resulted in solid organic growth in the fourth quarter. Aided by the continued implementation of MAP 2025 operating improvements and acquisitions, we generated double-digit consolidated adjusted EBIT growth during the quarter, with each segment increasing adjusted EBIT."
He added, "For the full fiscal year, we delivered record sales, adjusted EBIT and adjusted EPS, an accomplishment that we have achieved every year since we began MAP 2025. Importantly, in fiscal year 2025, we also generated record adjusted EBIT margins, despite a mixed economic environment. These results are a testament to the dedication and persistence of our associates."
Sullivan continued, "In an effort to continue building on this positive momentum, we are reorganizing into three segments—Construction Products Group, Performance Coatings Group and the Consumer Group. The former Specialty Products Group businesses have joined our other segments. This streamlined structure will allow our businesses to collaborate more closely to fuel revenue growth and leverage the cultural shift toward working together that has been enabled by MAP. It will also provide additional operating efficiencies, including reduced overhead, which is a hallmark of our MAP initiatives, to continue expanding margins. As we look forward, we are focused on accelerating growth to take full advantage of the operational improvements we’ve made over the past several years and realize the full Power of RPM."
Fourth-Quarter 2025 Consolidated Results
Consolidated | ||||||||||
Three Months Ended | ||||||||||
$ in 000s except per share data | May 31, | May 31, | ||||||||
2025 | 2024 | $ Change | % Change | |||||||
Net Sales | $ | 2,081,975 | $ | 2,008,163 | $ | 73,812 | 3.7 | % | ||
Net Income Attributable to RPM Stockholders | 225,758 | 180,611 | 45,147 | 25.0 | % | |||||
Diluted Earnings Per Share (EPS) | 1.76 | 1.40 | 0.36 | 25.7 | % | |||||
Income Before Income Taxes (IBT) | 248,376 | 239,278 | 9,098 | 3.8 | % | |||||
Earnings Before Interest and Taxes (EBIT) | 271,034 | 257,973 | 13,061 | 5.1 | % | |||||
Adjusted EBIT(1) | 314,377 | 285,550 | 28,827 | 10.1 | % | |||||
Adjusted Diluted EPS(1) | 1.72 | 1.56 | 0.16 | 10.3 | % | |||||
(1) Excludes certain items that are not indicative of RPM's ongoing operations. See tables below titled Supplemental Segment Information and Reconciliation of Reported to Adjusted Amounts for details. | ||||||||||
The fourth-quarter sales increase was primarily driven by sales of systems and turnkey solutions to serve high-performance buildings, as well as products and services focused on maintenance and repair. Acquisitions also contributed to top-line growth.
Geographically, Europe led sales growth with an increase of 14.9%, fueled by high-performance coatings and acquisitions. In North America, a 2.7% sales increase was driven by demand for systems and turnkey solutions serving high-performance buildings. Sales were mixed in emerging markets, as growth in products serving infrastructure projects in Latin America was offset by unfavorable foreign currency translation and weak economic conditions in Asia. Africa / Middle East grew modestly after strong prior-year growth.
Sales included 2.0% organic growth, 2.0% growth from acquisitions net of divestitures, and a 0.3% decline from foreign currency translation.
Adjusted EBIT was a record, driven by organic sales growth, which leveraged MAP 2025 operational improvements, partially offset by transitory costs related to plant consolidations and start-ups, as well as raw material cost inflation. SG&A increased during the quarter, driven by higher M&A expenses, variable compensation related to the sale of technical products, and SG&A from acquired businesses. Additional SG&A streamlining actions were put in place during the quarter to help offset the increased expenses.
The adjusted diluted EPS increase was driven by the improvement in adjusted EBIT.
Fourth-Quarter 2025 Segment Sales and Earnings
Construction Products Group | ||||||||||
Three Months Ended | ||||||||||
$ in 000s | May 31, | May 31, | ||||||||
2025 | 2024 | $ Change | % Change | |||||||
Net Sales | $ | 809,913 | $ | 762,174 | $ | 47,739 | 6.3 | % | ||
Income Before Income Taxes | 153,455 | 131,429 | 22,026 | 16.8 | % | |||||
EBIT | 154,043 | 131,980 | 22,063 | 16.7 | % | |||||
Adjusted EBIT(1) | 158,108 | 138,506 | 19,602 | 14.2 | % | |||||
(1) Excludes certain items that are not indicative of RPM's ongoing operations. See table below titled Supplemental Segment Information for details. | ||||||||||
Record CPG sales were driven by systems and turnkey roofing solutions serving high-performance buildings. The growth was in addition to strong prior-year sales, which increased 6.6%.
Sales included 6.7% organic growth, 0.3% growth from acquisitions, and a 0.7% decline from foreign currency translation.
Adjusted EBIT was a record, and the increase was driven by MAP 2025 benefits and higher sales of engineered systems and services that expanded margins, partially offset by temporary inefficiencies from plant consolidations as production was being transferred.
Performance Coatings Group | ||||||||||
Three Months Ended | ||||||||||
$ in 000s | May 31, | May 31, | ||||||||
2025 | 2024 | $ Change | % Change | |||||||
Net Sales | $ | 399,208 | $ | 365,555 | $ | 33,653 | 9.2 | % | ||
Income Before Income Taxes | 54,711 | 46,589 | 8,122 | 17.4 | % | |||||
EBIT | 54,131 | 45,700 | 8,431 | 18.4 | % | |||||
Adjusted EBIT(1) | 57,774 | 48,529 | 9,245 | 19.1 | % | |||||
(1) Excludes certain items that are not indicative of RPM's ongoing operations. See table below titled Supplemental Segment Information for details. | ||||||||||
Record PCG sales included strong demand for turnkey flooring solutions serving high-performance buildings and a double-digit increase in sales of fiberglass reinforced plastics structures, driven by demand from data centers. An acquisition also contributed to the sales increase.
Sales included 4.4% organic growth, a 5.0% increase from acquisitions net of divestitures, and a 0.2% decline from foreign currency translation.
Adjusted EBIT increased to a record as higher volumes improved fixed-cost leverage, which was aided by MAP 2025 operational improvement initiatives, and as sales mix improved.
Specialty Products Group | ||||||||||||
Three Months Ended | ||||||||||||
$ in 000s | May 31, | May 31, | ||||||||||
2025 | 2024 | $ Change | % Change | |||||||||
Net Sales | $ | 181,315 | $ | 177,975 | $ | 3,340 | 1.9 | % | ||||
(Loss) Income Before Income Taxes | (10,763 | ) | 7,439 | (18,202 | ) | (244.7 | %) | |||||
EBIT | (10,637 | ) | 7,528 | (18,165 | ) | (241.3 | %) | |||||
Adjusted EBIT(1) | 11,379 | 10,591 | 788 | 7.4 | % | |||||||
(1) Excludes certain items that are not indicative of RPM's ongoing operations. See table below titled Supplemental Segment Information for details. | ||||||||||||
The SPG sales increase included improved sales to specialty OEM markets, which showed signs of stabilization after a cyclical downturn. The food coatings and additives business generated strong sales growth, due in part to a prior acquisition. The fluorescent pigments and disaster restoration businesses experienced soft demand during the quarter.
Sales included flat organic growth, 1.7% growth from an acquisition, and a 0.2% benefit from foreign currency translation.
The adjusted EBIT increase was driven by MAP 2025 operational improvement initiatives. This was partially offset by a $2.5 million bad debt expense due to a customer bankruptcy and higher start-up expenses at the Resin Center of Excellence that SPG managed on behalf of all RPM segments.
EBIT includes $13.1 million of non-cash asset impairment charges primarily related to fluorescent pigments, which have been consolidated into the Consumer Group in fiscal year 2026 and have undergone overhead streamlining, and a $5.8 million charge for a legal settlement related to a business that was divested in fiscal year 2023. These charges have been excluded from adjusted EBIT.
Consumer Group | |||||||||||
Three Months Ended | |||||||||||
$ in 000s | May 31, | May 31, | |||||||||
2025 | 2024 | $ Change | % Change | ||||||||
Net Sales | $ | 691,539 | $ | 702,459 | $ | (10,920 | ) | (1.6 | %) | ||
Income Before Income Taxes | 113,441 | 113,146 | 295 | 0.3 | % | ||||||
EBIT | 113,570 | 113,204 | 366 | 0.3 | % | ||||||
Adjusted EBIT(1) | 122,470 | 118,168 | 4,302 | 3.6 | % | ||||||
(1) Excludes certain items that are not indicative of RPM's ongoing operations. See table below titled Supplemental Segment Information for details. | |||||||||||
The Consumer Group’s sales decline was driven by softness in DIY markets and product rationalization, partially offset by new product introductions and the benefit of The Pink Stuff acquisition, which closed one month prior to the end of the fiscal quarter.
Sales included a 3.8% organic decline, 2.3% growth from acquisitions, and a 0.1% decline from foreign currency translation.
Adjusted EBIT was a record, driven by MAP 2025 improvements, which were partially offset by cost inflation and reduced fixed-cost utilization from lower volumes.
Fiscal Year 2025 Consolidated Results
Consolidated | ||||||||||
Year Ended | ||||||||||
$ in 000s except per share data | May 31, | May 31, | ||||||||
2025 | 2024 | $ Change | % Change | |||||||
Net Sales | $ | 7,372,644 | $ | 7,335,277 | $ | 37,367 | 0.5 | % | ||
Net Income Attributable to RPM Stockholders | 688,688 | 588,397 | 100,291 | 17.0 | % | |||||
Diluted Earnings Per Share (EPS) | 5.35 | 4.56 | 0.79 | 17.3 | % | |||||
Income Before Income Taxes (IBT) | 792,760 | 787,837 | 4,923 | 0.6 | % | |||||
Earnings Before Interest and Taxes (EBIT) | 865,204 | 860,832 | 4,372 | 0.5 | % | |||||
Adjusted EBIT(1) | 976,031 | 941,597 | 34,434 | 3.7 | % | |||||
Adjusted Diluted EPS(1) | 5.30 | 4.94 | 0.36 | 7.3 | % | |||||
(1) Excludes certain items that are not indicative of RPM's ongoing operations. See tables below titled Supplemental Segment Information and Reconciliation of Reported to Adjusted Amounts for details. | ||||||||||
Fiscal year 2025 sales were a record, driven by turnkey solutions for high-performance buildings, partially offset by soft market conditions in the DIY and specialty OEM markets.
Record adjusted EBIT and adjusted EBIT margin of 13.2% were driven by MAP 2025 benefits, partially offset by lower fixed-cost absorption. SG&A streamlining actions partially offset increased variable compensation, benefits and M&A expenses.
Fiscal year 2025 adjusted EPS was a record, driven by the adjusted EBIT growth, and lower interest expense as a portion of the strong operational cash flow was used to repay debt.
Cash Flow and Financial Position
During fiscal 2025:
Cash provided by operating activities was $768.2 million, the second highest amount in company history, driven by working capital efficiency enabled by MAP 2025 initiatives. This compares to a record $1.12 billion in fiscal year 2024 when there was a large working capital release as supply chains normalized.
Operating working capital as a percentage of sales increased to 24.3% compared to 23.5% in fiscal year 2024, driven by strategic purchases in the fourth quarter of fiscal 2025 to mitigate the future impact of tariffs.
Capital expenditures were $229.9 million compared to $214.0 million during fiscal year 2024 with the increase driven by investments in shared RPM facilities, including the Resin Center of Excellence and the newly opened distribution center in Belgium, as well as new production facilities in Malaysia and India, and MAP 2025-enabled plant consolidations.
The company returned $325.6 million to stockholders through cash dividends and share repurchases, an increase of $38.7 million or 13.5% compared to the prior year.
As of May 31, 2025:
Total debt was $2.65 billion compared to $2.13 billion a year ago, with the $519.5 million increase driven by debt used to finance the acquisitions of The Pink Stuff, TMP Convert and other smaller companies.
Total liquidity, including cash and committed revolving credit facilities, was $969.1 million, compared to $1.36 billion a year ago, with the decrease driven by the use of the credit facilities to finance the acquisition of The Pink Stuff.
Business Outlook
Sullivan added, "We continue to focus on what we control, which includes offering differentiated turnkey solutions and systems to high-performance building projects and improving our operational efficiency, including SG&A streamlining. Working capital released from MAP 2025 structural improvements has helped to fund several acquisitions, leading to RPM’s largest M&A year in fiscal 2025. We will benefit as we integrate these businesses into RPM and leverage our competitive strengths to accelerate their future growth."
He concluded, "For the full fiscal year 2026, we anticipate solid top-line growth, which will allow us to leverage the operational improvements we’ve implemented to generate record adjusted EBIT and adjusted EBIT margins. The momentum we generated at the end of fiscal 2025 is expected to continue in the fiscal 2026 first quarter, leading to higher sales and profitability. However, we anticipate inflation will temporarily outpace pricing during the quarter and offset the benefits of efficiency initiatives."
The company expects the following in full-year fiscal 2026:
Consolidated sales to increase in the low- to mid-single-digit range compared to prior-year record results.
Consolidated adjusted EBIT to increase in the high-single- to low-double-digit percentage range compared to prior-year record results.
The company expects the following in the fiscal 2026 first quarter:
Consolidated sales to increase in the low- to mid-single-digit percentage range compared to prior-year results.
Sales growth to be similar among the three segments, with Consumer slightly higher, driven by the acquisitions of The Pink Stuff and Ready Seal.
Consolidated adjusted EBIT to be up in the low- to mid-single-digit percentage range compared to prior-year record results.
Earnings Webcast and Conference Call Information
Management will host a conference call to discuss these results beginning at 10:00 a.m. ET today. The call can be accessed via webcast at www.RPMinc.com/Investors/Presentations-Webcasts or by dialing 1-844-481-2915 or 1-412-317-0708 for international callers and asking to join the RPM International call. Participants are asked to call the assigned number approximately 10 minutes before the conference call begins. The call, which will last approximately one hour, will be open to the public, but only financial analysts will be permitted to ask questions. The media and all other participants will be in a listen-only mode.
For those unable to listen to the live call, a replay will be available from July 24, 2025, until July 31, 2025. The replay can be accessed by dialing 1-877-344-7529 or 1-412-317-0088 for international callers. The access code is 2426392. The call also will be available for replay and as a written transcript via the RPM website at www.RPMinc.com.
About RPM
RPM International Inc. owns subsidiaries that are world leaders in specialty coatings, sealants, building materials and related services. The company operates across four reportable segments: consumer, construction products, performance coatings and specialty products. RPM has a diverse portfolio of market-leading brands, including Rust-Oleum, DAP, The Pink Stuff, Zinsser, Varathane, DayGlo, Legend Brands, Stonhard, Carboline, Tremco and Dryvit. From homes and workplaces to infrastructure and precious landmarks, RPM’s brands are trusted by consumers and professionals alike to help build a better world. The company employs approximately 17,200 individuals worldwide. Visit www.RPMinc.com to learn more.
For more information, contact Matt Schlarb, Vice President – Investor Relations & Sustainability, at 330-220-6064 or mschlarb@rpminc.com.
Use of Non-GAAP Financial Information
To supplement the financial information presented in accordance with Generally Accepted Accounting Principles in the United States ("GAAP") in this earnings release, we use EBIT, adjusted EBIT and adjusted earnings per share, which are all non-GAAP financial measures. EBIT is defined as earnings (loss) before interest and taxes, with adjusted EBIT and adjusted earnings per share provided for the purpose of adjusting for one-off items impacting revenues and/or expenses that are not considered by management to be indicative of ongoing operations. We evaluate the profit performance of our segments based on income before income taxes, but also look to EBIT as a performance evaluation measure because interest income (expense), net is essentially related to corporate functions, as opposed to segment operations. For that reason, we believe EBIT is also useful to investors as a metric in their investment decisions. EBIT should not be considered an alternative to, or more meaningful than, income before income taxes as determined in accordance with GAAP, since EBIT omits the impact of interest and investment income or expense in determining operating performance, which represent items necessary to our continued operations, given our level of indebtedness. Nonetheless, EBIT is a key measure expected by and useful to our fixed income investors, rating agencies and the banking community all of whom believe, and we concur, that this measure is critical to the capital markets’ analysis of our segments’ core operating performance. We also evaluate EBIT because it is clear that movements in EBIT impact our ability to attract financing. Our underwriters and bankers consistently require inclusion of this measure in offering memoranda in conjunction with any debt underwriting or bank financing. EBIT may not be indicative of our historical operating results, nor is it meant to be predictive of potential future results. See the financial statement section of this earnings release for a reconciliation of EBIT and adjusted EBIT to income before income taxes, and adjusted earnings per share to earnings per share. We have not provided a reconciliation of our first-quarter fiscal 2026 or full-year fiscal 2026 adjusted EBIT guidance because material terms that impact such measure are not in our control and/or cannot be reasonably predicted, and therefore a reconciliation of such measure is not available without unreasonable effort.
Use of Key Performance Indicator Metric
To supplement the financial information presented in accordance with Generally Accepted Accounting Principles in the United States ("GAAP") in this earnings release, we use the key performance indicator ("KPI") metric of operating working capital as a percentage of sales, which is defined as the net amount of net trade accounts receivable plus inventories less accounts payable, all divided by trailing twelve-month net sales. We evaluate the working capital investment needs of our business to support current operations as well as future changes in business activity. For that reason, we believe operating working capital as a percentage of sales is also useful to investors as a metric in their investment decisions.
Forward-Looking Statements
This press release contains "forward-looking statements" relating to our business. These forward-looking statements, or other statements made by us, are made based on our expectations and beliefs concerning future events impacting us and are subject to uncertainties and factors (including those specified below), which are difficult to predict and, in many instances, are beyond our control. As a result, our actual results could differ materially from those expressed in or implied by any such forward-looking statements. These uncertainties and factors include (a) global and regional markets and general economic conditions, including uncertainties surrounding the volatility in financial markets, the availability of capital and the viability of banks and other financial institutions; (b) the prices, supply and availability of raw materials, including assorted pigments, resins, solvents, and other natural gas- and oil-based materials; packaging, including plastic and metal containers; and transportation services, including fuel surcharges; (c) continued growth in demand for our products; (d) legal, environmental and litigation risks inherent in our businesses and risks related to the adequacy of our insurance coverage for such matters; (e) the effect of changes in interest rates; (f) the effect of fluctuations in currency exchange rates upon our foreign operations; (g) changes in global trade policies, including the adoption or expansion of tariffs and trade barriers; (h) the effect of non-currency risks of investing in and conducting operations in foreign countries, including those relating to domestic and international political, social, economic and regulatory factors; (i) risks and uncertainties associated with our ongoing acquisition and divestiture activities; (j) the timing of and the realization of anticipated cost savings from restructuring initiatives, the ability to identify additional cost savings opportunities, and the risks of failing to meet any other objectives of our improvement plans; (k) risks related to the adequacy of our contingent liability reserves; (l) risks relating to a public health crisis similar to the Covid pandemic; (m) risks related to acts of war similar to the Russian invasion of Ukraine; (n) risks related to the transition or physical impacts of climate change and other natural disasters or meeting sustainability-related voluntary goals or regulatory requirements; (o) risks related to our or our third parties' use of technology including artificial intelligence, data breaches and data privacy violations; (p) the shift to remote work and online purchasing and the impact that has on residential and commercial real estate construction; and (q) other risks detailed in our filings with the Securities and Exchange Commission, including the risk factors set forth in our Form 10-K for the year ended May 31, 2024, as the same may be updated from time to time. We do not undertake any obligation to publicly update or revise any forward-looking statements to reflect future events, information or circumstances that arise after the filing date of this press release.
CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||||||
IN THOUSANDS, EXCEPT PER SHARE DATA | ||||||||||||||||
(Unaudited) | ||||||||||||||||
Three Months Ended | Year Ended | |||||||||||||||
May 31, | May 31, | May 31, | May 31, | |||||||||||||
2025 | 2024 | 2025 | 2024 | |||||||||||||
Net Sales | $ | 2,081,975 | $ | 2,008,163 | $ | 7,372,644 | $ | 7,335,277 | ||||||||
Cost of Sales | 1,200,204 | 1,177,583 | 4,322,166 | 4,320,688 | ||||||||||||
Gross Profit | 881,771 | 830,580 | 3,050,478 | 3,014,589 | ||||||||||||
Selling, General & Administrative Expenses | 592,845 | 554,504 | 2,150,537 | 2,113,585 | ||||||||||||
Restructuring Expense | 6,764 | 15,912 | 24,979 | 30,008 | ||||||||||||
Goodwill Impairment | 11,352 | - | 11,352 | - | ||||||||||||
Interest Expense | 25,939 | 27,276 | 96,543 | 117,969 | ||||||||||||
Investment (Income), Net | (3,281 | ) | (8,581 | ) | (24,099 | ) | (44,974 | ) | ||||||||
Other (Income) Expense, Net | (224 | ) | 2,191 | (1,594 | ) | 10,164 | ||||||||||
Income Before Income Taxes | 248,376 | 239,278 | 792,760 | 787,837 | ||||||||||||
Provision for Income Taxes | 22,367 | 58,442 | 102,433 | 198,395 | ||||||||||||
Net Income | 226,009 | 180,836 | 690,327 | 589,442 | ||||||||||||
Less: Net Income Attributable to Noncontrolling Interests | 251 | 225 | 1,639 | 1,045 | ||||||||||||
Net Income Attributable to RPM International Inc. Stockholders | $ | 225,758 | $ | 180,611 | $ | 688,688 | $ | 588,397 | ||||||||
Earnings per share of common stock attributable to | ||||||||||||||||
RPM International Inc. Stockholders: | ||||||||||||||||
Basic | $ | 1.77 | $ | 1.41 | $ | 5.38 | $ | 4.58 | ||||||||
Diluted | $ | 1.76 | $ | 1.40 | $ | 5.35 | $ | 4.56 | ||||||||
Average shares of common stock outstanding - basic | 127,396 | 127,666 | 127,570 | 127,767 | ||||||||||||
Average shares of common stock outstanding - diluted | 127,877 | 128,331 | 128,204 | 128,340 | ||||||||||||
SUPPLEMENTAL SEGMENT INFORMATION | |||||||||||||||||||
IN THOUSANDS | |||||||||||||||||||
(Unaudited) | |||||||||||||||||||
Three Months Ended | Year Ended | ||||||||||||||||||
May 31, | May 31, | May 31, | May 31, | ||||||||||||||||
2025 | 2024 | 2025 | 2024 | ||||||||||||||||
Net Sales: | |||||||||||||||||||
CPG Segment | $ | 809,913 | $ | 762,174 | $ | 2,767,428 | $ | 2,702,466 | |||||||||||
PCG Segment | 399,208 | 365,555 | 1,491,695 | 1,462,460 | |||||||||||||||
SPG Segment | 181,315 | 177,975 | 699,469 | 712,402 | |||||||||||||||
Consumer Segment | 691,539 | 702,459 | 2,414,052 | 2,457,949 | |||||||||||||||
Total | $ | 2,081,975 | $ | 2,008,163 | $ | 7,372,644 | $ | 7,335,277 | |||||||||||
Income Before Income Taxes: | |||||||||||||||||||
CPG Segment | |||||||||||||||||||
Income Before Income Taxes (a) | $ | 153,455 | $ | 131,429 | $ | 426,028 | $ | 385,339 | |||||||||||
Interest (Expense), Net (b) | (588 | ) | (551 | ) | (2,494 | ) | (5,170 | ) | |||||||||||
EBIT (c) | 154,043 | 131,980 | 428,522 | 390,509 | |||||||||||||||
MAP initiatives (d) | 3,871 | 6,526 | 10,327 | 12,694 | |||||||||||||||
Acquisition-related costs (e) | 194 | - | 453 | - | |||||||||||||||
Adjusted EBIT | $ | 158,108 | $ | 138,506 | $ | 439,302 | $ | 403,203 | |||||||||||
PCG Segment | |||||||||||||||||||
Income Before Income Taxes (a) | $ | 54,711 | $ | 46,589 | $ | 225,594 | $ | 199,951 | |||||||||||
Interest Income, Net (b) | 580 | 889 | 2,335 | 4,642 | |||||||||||||||
EBIT (c) | 54,131 | 45,700 | 223,259 | 195,309 | |||||||||||||||
MAP initiatives (d) | 3,128 | 2,829 | 6,840 | 20,233 | |||||||||||||||
Acquisition-related costs (e) | 515 | - | 1,012 | - | |||||||||||||||
Adjusted EBIT | $ | 57,774 | $ | 48,529 | $ | 231,111 | $ | 215,542 | |||||||||||
SPG Segment | |||||||||||||||||||
(Loss) Income Before Income Taxes (a) | $ | (10,763 | ) | $ | 7,439 | $ | 26,391 | $ | 43,784 | ||||||||||
Interest (Expense) Income, Net (b) | (126 | ) | (89 | ) | (439 | ) | 204 | ||||||||||||
EBIT (c) | (10,637 | ) | 7,528 | 26,830 | 43,580 | ||||||||||||||
MAP initiatives (d) | 3,159 | 3,063 | 10,100 | 11,179 | |||||||||||||||
(Gain) on sale of assets and a business, net (f) | - | - | (237 | ) | (1,206 | ) | |||||||||||||
Legal contingency adjustment on a divested business (h) | 5,777 | - | 6,059 | 3,953 | |||||||||||||||
Goodwill and intangible asset impairments (i) | 13,080 | - | 13,080 | - | |||||||||||||||
Adjusted EBIT | $ | 11,379 | $ | 10,591 | $ | 55,832 | $ | 57,506 | |||||||||||
Consumer Segment | |||||||||||||||||||
Income Before Income Taxes (a) | $ | 113,441 | $ | 113,146 | $ | 357,900 | $ | 408,200 | |||||||||||
Interest (Expense) Income, Net (b) | (129 | ) | (58 | ) | (585 | ) | 2,561 | ||||||||||||
EBIT (c) | 113,570 | 113,204 | 358,485 | 405,639 | |||||||||||||||
MAP initiatives (d) | 6,339 | ... | 8,591 | 28,464 | 9,840 | ||||||||||||||
Acquisition-related costs (e) | 2,561 | - | 2,561 | - | |||||||||||||||
(Gain) on sale of assets and a business, net (f) | - | (3,627 | ) | - | (3,627 | ) | |||||||||||||
Business interruption insurance recovery (g) | - | - | - | (11,128 | ) | ||||||||||||||
Adjusted EBIT | $ | 122,470 | $ | 118,168 | $ | 389,510 | $ | 400,724 | |||||||||||
Corporate/Other | |||||||||||||||||||
(Loss) Before Income Taxes (a) | $ | (62,468 | ) | $ | (59,325 | ) | $ | (243,153 | ) | $ | (249,437 | ) | |||||||
Interest (Expense), Net (b) | (22,395 | ) | (18,886 | ) | (71,261 | ) | (75,232 | ) | |||||||||||
EBIT (c) | (40,073 | ) | (40,439 | ) | (171,892 | ) | (174,205 | ) | |||||||||||
MAP initiatives (d) | 4,719 | 10,195 | 32,168 | 38,827 | |||||||||||||||
Adjusted EBIT | $ | (35,354 | ) | $ | (30,244 | ) | $ | (139,724 | ) | $ | (135,378 | ) | |||||||
TOTAL CONSOLIDATED | |||||||||||||||||||
Income Before Income Taxes (a) | $ | 248,376 | $ | 239,278 | $ | 792,760 | $ | 787,837 | |||||||||||
Interest (Expense) | (25,939 | ) | (27,276 | ) | (96,543 | ) | (117,969 | ) | |||||||||||
Investment Income, Net | 3,281 | 8,581 | 24,099 | 44,974 | |||||||||||||||
EBIT (c) | 271,034 | 257,973 | 865,204 | 860,832 | |||||||||||||||
MAP initiatives (d) | 21,216 | 31,204 | 87,899 | 92,773 | |||||||||||||||
Acquisition-related costs (e) | 3,270 | - | 4,026 | - | |||||||||||||||
(Gain) on sale of assets and a business, net (f) | - | (3,627 | ) | (237 | ) | (4,833 | ) | ||||||||||||
Business interruption insurance recovery (g) | - | - | - | (11,128 | ) | ||||||||||||||
Legal contingency adjustment on a divested business (h) | 5,777 | - | 6,059 | 3,953 | |||||||||||||||
Goodwill and intangible asset impairments (i) | 13,080 | - | 13,080 | - | |||||||||||||||
Adjusted EBIT | $ | 314,377 | $ | 285,550 | $ | 976,031 | $ | 941,597 | |||||||||||
(a) | The presentation includes a reconciliation of Income (Loss) Before Income Taxes, a measure defined by Generally Accepted Accounting Principles in the United States (GAAP), to EBIT and Adjusted EBIT. | ||||||||||||||||||
(b) | Interest Income (Expense), Net includes the combination of Interest Income (Expense) and Investment Income (Expense), Net. | ||||||||||||||||||
(c) | EBIT is defined as earnings (loss) before interest and taxes, with Adjusted EBIT provided for the purpose of adjusting for items impacting earnings that are not considered by management to be indicative of ongoing operations. We evaluate the profit performance of our segments based on income before income taxes, but also look to EBIT, or adjusted EBIT, as a performance evaluation measure because Interest Income (Expense), Net is essentially related to corporate functions, as opposed to segment operations. For that reason, we believe EBIT is also useful to investors as a metric in their investment decisions. EBIT should not be considered an alternative to, or more meaningful than, income before income taxes as determined in accordance with GAAP, since EBIT omits the impact of interest and investment income or expense in determining operating performance, which represent items necessary to our continued operations, given our level of indebtedness. Nonetheless, EBIT is a key measure expected by and useful to our fixed income investors, rating agencies and the banking community all of whom believe, and we concur, that this measure is critical to the capital markets' analysis of our segments' core operating performance. We also evaluate EBIT because it is clear that movements in EBIT impact our ability to attract financing. Our underwriters and bankers consistently require inclusion of this measure in offering memoranda in conjunction with any debt underwriting or bank financing. EBIT may not be indicative of our historical operating results, nor is it meant to be predictive of potential future results. | ||||||||||||||||||
(d) | Reflects restructuring and other charges, which have been incurred in relation to our Margin Acceleration Plan ("MAP to Growth") and our Margin Achievement Plan ("MAP 2025"), together MAP initiatives, as follows: | ||||||||||||||||||
Three Months Ended | Year Ended | ||||||||||||||||||
May 31, | May 31, | May 31, | May 31, | ||||||||||||||||
2025 | 2024 | 2025 | 2024 | ||||||||||||||||
Restructuring and other related expense, net | $ | 13,335 | $ | 18,845 | $ | 42,861 | $ | 45,444 | |||||||||||
Exited product line | - | - | - | (248 | ) | ||||||||||||||
ERP consolidation plan | 3,525 | 2,695 | 15,044 | 11,426 | |||||||||||||||
Professional fees | 4,356 | 9,664 | 29,994 | 36,151 | |||||||||||||||
MAP initiatives | $ | 21,216 | $ | 31,204 | $ | 87,899 | $ | 92,773 | |||||||||||
(e) | Acquisition costs reflect amounts included in "Cost of Sales" for inventory step-ups. | ||||||||||||||||||
(f) | Reflects gains associated with post-closing adjustments for the sale of the non-core furniture warranty business in the SPG segment in fiscal 2023 which have been recorded in "SG&A". In addition to this, the prior year reflects the sale of a property within our Consumer segment which has also been recorded in "SG&A". | ||||||||||||||||||
(g) | Business interruption insurance recovery at our Consumer segment related to lost sales and incremental costs incurred during fiscal 2021 and 2022 as a result of an explosion at the plant of a significant alkyd resin supplier, which has been recorded in "SG&A". | ||||||||||||||||||
(h) | Represents incremental expense related to an adverse legal ruling from a case associated with a business that was divested in fiscal 2023. | ||||||||||||||||||
(i) | Reflects $11.4 million of goodwill impairment recorded in "Goodwill Impairment" and $1.7 million of intangible asset impairment recorded in "SG&A". Both charges are related to the Color Group reporting unit in our SPG Segment due to the continued softness in OEM markets and underperformance in our growth initiatives associated with this reporting unit. | ||||||||||||||||||
SUPPLEMENTAL INFORMATION | |||||||||||||||||||
RECONCILIATION OF "REPORTED" TO "ADJUSTED" AMOUNTS | |||||||||||||||||||
(Unaudited) | |||||||||||||||||||
Three Months Ended | Year Ended | ||||||||||||||||||
May 31, | May 31, | May 31, | May 31, | ||||||||||||||||
2025 | 2024 | 2025 | 2024 | ||||||||||||||||
Reconciliation of Reported Earnings per Diluted Share to Adjusted Earnings per Diluted Share (All amounts presented after-tax): | |||||||||||||||||||
Reported Earnings per Diluted Share | $ | 1.76 | $ | 1.40 | $ | 5.35 | $ | 4.56 | |||||||||||
MAP initiatives (d) | 0.16 | 0.19 | 0.56 | 0.56 | |||||||||||||||
Acquisition-related costs (e) | 0.02 | - | 0.02 | - | |||||||||||||||
(Gain) on sale of assets and a business, net (f) | - | (0.02 | ) | - | (0.03 | ) | |||||||||||||
Business interruption insurance recovery (g) | - | - | - | (0.07 | ) | ||||||||||||||
Legal contingency adjustment on a divested business (h) | 0.03 | - | 0.04 | 0.02 | |||||||||||||||
Goodwill and intangible asset impairments (i) | 0.09 | - | 0.09 | - | |||||||||||||||
Investment returns (j) | - | (0.01 | ) | (0.02 | ) | (0.12 | ) | ||||||||||||
Income tax adjustments (k) | (0.34 | ) | - | (0.74 | ) | 0.02 | |||||||||||||
Adjusted Earnings per Diluted Share (l) | $ | 1.72 | $ | 1.56 | $ | 5.30 | $ | 4.94 | |||||||||||
(d) | Reflects restructuring and other charges, which have been incurred in relation to our Margin Acceleration Plan ("MAP to Growth") and our Margin Achievement Plan ("MAP 2025"), together MAP initiatives, as follows: | ||||||||||||||||||
(e) | Acquisition costs reflect amounts included in "Cost of Sales" for inventory step-ups. | ||||||||||||||||||
(f) | Reflects gains associated with post-closing adjustments for the sale of the non-core furniture warranty business in the SPG segment in fiscal 2023 which have been recorded in "SG&A". In addition to this, the prior year reflects the sale of a property within our Consumer segment which has also been recorded in "SG&A". | ||||||||||||||||||
(g) | Business interruption insurance recovery at our Consumer segment related to lost sales and incremental costs incurred during fiscal 2021 and 2022 as a result of an explosion at the plant of a significant alkyd resin supplier, which has been recorded in "SG&A". | ||||||||||||||||||
(h) | Represents incremental expense related to an adverse legal ruling from a case associated with a business that was divested in fiscal 2023. We strongly disagree with the legal ruling and have filed an appeal. | ||||||||||||||||||
(i) | Reflects $11.4 million of goodwill impairment recorded in "Goodwill Impairment" and $1.7 million of intangible asset impairment recorded in "SG&A". Both charges are related to the Color Group reporting unit in our SPG Segment due to the continued softness in OEM markets and underperformance in our growth initiatives associated with this reporting unit. | ||||||||||||||||||
(j) | Investment returns include realized net gains and losses on sales of investments and unrealized net gains and losses on equity securities, which are adjusted due to their inherent volatility. Management does not consider these gains and losses, which cannot be predicted with any level of certainty, to be reflective of the Company's core business operations. | ||||||||||||||||||
(k) | The adjustment for the current three-month period and year ended May 31, 2025, includes incremental benefits of the U.S. deduction for foreign derived intangible income and the foreign tax rate differential associated with certain global capital structure initiatives completed during the period. Additionally, the year-to-date adjustment includes adjustments to U.S. foreign tax credits recognized because of global cash redeployment and debt optimization projects, as well as other adjustments to our net deferred tax asset related to U.S. foreign tax credit carryforwards resulting from our reassessment of income tax positions following developments in U.S. income tax case law. For fiscal year 2024, the adjustment relates to income taxes associated with the fiscal year 2023 sale of the furniture warranty business. | ||||||||||||||||||
(l) | Adjusted Diluted EPS is provided for the purpose of adjusting diluted earnings per share for items impacting earnings that are not considered by management to be indicative of ongoing operations. | ||||||||||||||||||
CONSOLIDATED BALANCE SHEETS | |||||||||
IN THOUSANDS | |||||||||
(Unaudited) | |||||||||
May 31, 2025 | May 31, 2024 | ||||||||
Assets | |||||||||
Current Assets | |||||||||
Cash and cash equivalents | $ | 302,137 | $ | 237,379 | |||||
Trade accounts receivable | 1,551,953 | 1,468,208 | |||||||
Allowance for doubtful accounts | (42,844 | ) | (48,763 | ) | |||||
Net trade accounts receivable | 1,509,109 | 1,419,445 | |||||||
Inventories | 1,036,475 | 956,465 | |||||||
Prepaid expenses and other current assets | 322,577 | 282,059 | |||||||
Total current assets | 3,170,298 | 2,895,348 | |||||||
Property, Plant and Equipment, at Cost | 2,738,373 | 2,515,847 | |||||||
Allowance for depreciation | (1,264,974 | ) | (1,184,784 | ) | |||||
Property, plant and equipment, net | 1,473,399 | 1,331,063 | |||||||
Other Assets | |||||||||
Goodwill | 1,617,626 | 1,308,911 | |||||||
Other intangible assets, net of amortization | 780,826 | 512,972 | |||||||
Operating lease right-of-use assets | 370,399 | 331,555 | |||||||
Deferred income taxes | 147,436 | 33,522 | |||||||
Other | 215,965 | 173,172 | |||||||
Total other assets | 3,132,252 | 2,360,132 | |||||||
Total Assets | $ | 7,775,949 | $ | 6,586,543 | |||||
Liabilities and Stockholders' Equity | |||||||||
Current Liabilities | |||||||||
Accounts payable | $ | 755,889 | $ | 649,650 | |||||
Current portion of long-term debt | 7,691 | 136,213 | |||||||
Accrued compensation and benefits | 287,398 | 297,249 | |||||||
Accrued losses | 36,701 | 32,518 | |||||||
Other accrued liabilities | 379,768 | 350,434 | |||||||
Total current liabilities | 1,467,447 | 1,466,064 | |||||||
Long-Term Liabilities | |||||||||
Long-term debt, less current maturities | 2,638,922 | 1,990,935 | |||||||
Operating lease liabilities | 317,334 | 281,281 | |||||||
Other long-term liabilities | 241,117 | 214,816 | |||||||
Deferred income taxes | 224,347 | 121,222 | |||||||
Total long-term liabilities | 3,421,720 | 2,608,254 | |||||||
Total liabilities | 4,889,167 | 4,074,318 | |||||||
Stockholders' Equity | |||||||||
Preferred stock; none issued | - | - | |||||||
Common stock (outstanding 128,269; 128,629) | 1,283 | 1,286 | |||||||
Paid-in capital | 1,177,796 | 1,150,751 | |||||||
Treasury stock, at cost | (953,856 | ) | (864,502 | ) | |||||
Accumulated other comprehensive (loss) | (533,631 | ) | (537,290 | ) | |||||
Retained earnings | 3,193,764 | 2,760,639 | |||||||
Total RPM International Inc. stockholders' equity | 2,885,356 | 2,510,884 | |||||||
Noncontrolling interest | 1,426 | 1,341 | |||||||
Total equity | 2,886,782 | 2,512,225 | |||||||
Total Liabilities and Stockholders' Equity | $ | 7,775,949 | $ | 6,586,543 | |||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
IN THOUSANDS | ||||||||
(Unaudited) | ||||||||
Year Ended | ||||||||
May 31, | May 31, | |||||||
2025 | 2024 | |||||||
Cash Flows From Operating Activities: | ||||||||
Net income | $ | 690,327 | $ | 589,442 | ||||
Adjustments to reconcile net income to net | ||||||||
cash provided by operating activities: | ||||||||
Depreciation and amortization | 193,840 | 171,251 | ||||||
Goodwill Impairment | 11,352 | - | ||||||
Deferred income taxes | (104,507 | ) | (5,638 | ) | ||||
Stock-based compensation expense | 27,042 | 25,925 | ||||||
Net (gain) on marketable securities | (4,997 | ) | (19,914 | ) | ||||
Net (gain) on sales of assets and businesses | - | (971 | ) | |||||
Other | 1,269 | 2,226 | ||||||
Changes in assets and liabilities, net of effect | ||||||||
from purchases and sales of businesses: | ||||||||
(Increase) decrease in receivables | (55,037 | ) | 82,895 | |||||
(Increase) decrease in inventory | (34,458 | ) | 179,843 | |||||
(Increase) decrease in prepaid expenses and other | (62,669 | ) | 23,426 | |||||
current and long-term assets | ||||||||
Increase (decrease) in accounts payable | 84,074 | (24,439 | ) | |||||
(Decrease) increase in accrued compensation and benefits | (17,130 | ) | 39,891 | |||||
Increase in accrued losses | 3,899 | 5,958 | ||||||
Increase in other accrued liabilities | 35,185 | 52,410 | ||||||
Cash Provided By Operating Activities | 768,190 | 1,122,305 | ||||||
Cash Flows From Investing Activities: | ||||||||
Capital expenditures | (229,930 | ) | (213,970 | ) | ||||
Acquisition of businesses, net of cash acquired | (595,770 | ) | (15,549 | ) | ||||
Purchase of marketable securities | (85,793 | ) | (32,981 | ) | ||||
Proceeds from sales of marketable securities | 87,093 | 46,689 | ||||||
Proceeds from sales of assets and businesses, net | - | 6,921 | ||||||
Other | (1,134 | ) | 2,450 | |||||
Cash (Used For) Investing Activities | (825,534 | ) | (206,440 | ) | ||||
Cash Flows From Financing Activities: | ||||||||
Additions to long-term and short-term debt | 478,111 | - | ||||||
Reductions of long-term and short-term debt | (9,008 | ) | (575,408 | ) | ||||
Cash dividends | (255,563 | ) | (231,883 | ) | ||||
Repurchases of common stock | (69,999 | ) | (54,978 | ) | ||||
Shares of common stock returned for taxes | (18,686 | ) | (24,548 | ) | ||||
Payment of acquisition-related contingent consideration | (1,122 | ) | (1,142 | ) | ||||
Other | (1,796 | ) | (2,075 | ) | ||||
Cash Provided By (Used For) Financing Activities | 121,937 | (890,034 | ) | |||||
Effect of Exchange Rate Changes on Cash and | ||||||||
Cash Equivalents | 165 | (4,239 | ) | |||||
Net Change in Cash and Cash Equivalents | 64,758 | 21,592 | ||||||
Cash and Cash Equivalents at Beginning of Period | 237,379 | 215,787 | ||||||
Cash and Cash Equivalents at End of Period | $ | 302,137 | $ | 237,379 | ||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20250724383686/en/
Contacts
For more information, contact Matt Schlarb, Vice President – Investor Relations & Sustainability, at 330-220-6064 or mschlarb@rpminc.com.