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News Release

RPM Earnings Set Records for Second Quarter, First Half

MEDINA, Ohio, Jan 8, 2002 /PRNewswire via COMTEX/ -- RPM, Inc. (NYSE: RPM) today reported record net income and record diluted earnings per share for both the fiscal 2002 second quarter and first half, ended November 30, 2001.

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For the second quarter, the specialty coatings manufacturer reported net income of $24.5 million, or $0.24 per diluted share, a 45 percent increase over $16.9 million, or $0.17 per share, earned a year ago. As anticipated, net sales declined 2 percent, to $487.9 million from $499.9 million in the fiscal 2001 second quarter, due primarily to business disruptions related to the September 11 attacks and continued weakness in the overall economy, which particularly affected the Industrial segment, while the Consumer segment continued to produce solid year-over-year gains in performance.

For the first half of its 2002 fiscal year, RPM's net income increased 34 percent to $61.1 million, or $0.60 per diluted share, from $45.7 million, or $0.45 per diluted share, in the fiscal 2001 first six months. Net sales declined 3 percent to $1.021 billion from $1.055 billion a year ago.

"Factors contributing to earnings gains in the second quarter included the benefits of a restructuring program, lower interest rates and the effect of a prescribed accounting change," said Thomas C. Sullivan, RPM chairman and chief executive officer. "These three factors were also the primary drivers of our first quarter earnings improvement, and we expect them to continue to positively impact earnings over the next two quarters of this fiscal year as well," he said.

RPM adopted Statement of Financial Accounting Standards (FAS) No. 142 Goodwill and Other Intangible Assets on June 1, 2001. The accounting change would have added $0.05 per share to earnings in each of the first two quarters of fiscal 2001. "Even without the effect of the accounting change, earnings per share would have improved a healthy 12 percent in the second quarter and 13 percent in the first half," Mr. Sullivan said. "Our third quarter, which ends February 28, is traditionally RPM's weakest due to seasonal factors, although we expect to be slightly profitable in this year's third quarter as contrasted to a $0.07 per share loss incurred in the third quarter of fiscal 2001," Mr. Sullivan said. "For the full year ending May 31, 2002, we remain comfortable with the consensus of analysts earnings estimates of $0.93 per share," he said.

RPM also announced continued progress in reducing its debt levels, with $13 million more in debt repayments during the second quarter, bringing total debt repayments to nearly $60 million during the past 12 months. In addition, $55 million in senior unsecured notes were issued during the quarter, with the entire proceeds being used to reduce existing bank debt. RPM remains committed to its plans to further reduce debt levels.

The RPM Board of Directors voted to maintain the company's current dividend of $0.125 per share, payable January 31, 2002 to shareholders of record as of January 14, 2002.

RPM, Inc. is a world leader in specialty coatings serving both industrial and consumer markets. RPM's industrial products include roofing systems, sealants, corrosion control coatings, floor coatings and specialty chemicals. Its consumer products are used by professionals and do-it-yourselfers for home, automotive and boat maintenance and by hobbyists. Leading industrial brands include Stonhard, Tremco, Carboline, Day-Glo, Euco and Dryvit. Consumer brands include Zinsser, Rust-Oleum, DAP, Flecto and Bondo.

For more information, contact Glenn R. Hasman, vice president of finance and communications, at 330-273-8820.

This press release contains "forward-looking" statements based on management's expectations and beliefs concerning future events. Forward- looking statements are necessarily subject to risks, uncertainties and other factors, many of which are outside the control of the company that could cause actual results to differ materially from such statements. These uncertainties and other factors include risks related to the company's restructuring and consolidation program and its ability to realize the benefits from its restructuring and consolidation efforts; changes in the results of operations due to economic conditions or unforeseen factors; sales of non-core product lines or businesses; overall economic conditions within and among the company's domestic and international coatings markets; unusual weather conditions that might adversely affect sales; and such other risks and uncertainties described from time to time in the company's reports filed with the Securities and Exchange Commission. The foregoing list is not exhaustive, and the company disclaims any obligation to subsequently revise any forward- looking statements to reflect events or circumstances after the date of such statements.

                       In thousands, except per share data

                                      Six Months Ended     Three Months Ended
                                        November 30,          November 30,
                                      2001        2000       2001      2000

    Net Sales                      $1,021,155  $1,054,827  $487,880  $499,904
    Cost of Sales                     548,513     570,351   265,912   271,744
    Gross Profit                     $472,642    $484,476  $221,968  $228,160
    Selling, General &
     Expenses                         355,695     377,034   174,076   183,827
    Interest Expense, Net              24,423      33,703    11,359    17,127
    Income Before Income Taxes        $92,524     $73,739   $36,533   $27,206
    Provision for Income Taxes         31,465      28,021    12,043    10,338
    Net Income                        $61,059     $45,718   $24,490   $16,868

    Basic Earnings per Share            $0.60       $0.45     $0.24     $0.17
    Diluted Earnings per Share          $0.60       $0.45     $0.24     $0.17

    Average Shares Outstanding -
     Basic                            102,266     102,195   102,321   102,114
    Average Shares Outstanding -
     Diluted                          102,512     102,204   102,828   102,119

                       In thousands, except per share data

                                                         November 30,
                                                    2001             2000

          Current Assets                          $772,376          $774,113
          Property Plant & Equipment
           (net)                                   352,952           376,524
          Other Assets                             892,899           930,563
             Total Assets                       $2,018,227        $2,081,200

    Liabilities and Shareholders' Equity

          Current Liabilities                     $423,044          $351,045
          Long-Term Debt                           817,182           971,014
          Other Liabilities                        100,902           114,626
             Total Liabilities                  $1,341,128        $1,436,685
          Shareholders' Equity                     677,099           644,515
          Total Liabilities &
            Shareholders' Equity                $2,018,227        $2,081,200

    Current Ratio                                    1.8:1             2.2:1
    Shareholders' Equity per Share                   $6.62             $6.31
    Working Capital                               $349,332          $423,068

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CONTACT:          Glenn R. Hasman, vice president of finance and communications
                  of RPM, Inc., +1-330-273-8820
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                  PRN Photo Desk, 888-776-6555 or 212-782-2840
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