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News Release

RPM's Net Income Climbs 21%, EPS Grows 6% in First Quarter of Fiscal 2003

MEDINA, Ohio, Oct 08, 2002 /PRNewsire-FirstCall via Comtex/ --

Record Results Fueled by Growth in Both Industrial and Consumer Segments

RPM, Inc. (NYSE: RPM) today reported strong financial results, including record net income and earnings per share, for the first quarter of fiscal 2003 ended August 31, 2002.

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First Quarter Results

The specialty coatings manufacturer reported net sales of $542.4 million, up 2 percent from last year's first quarter net sales of $533.3 million. During the first quarter of 2003, the company experienced relatively balanced growth between its two operating segments, with the Industrial business segment up more than 1 percent and its Consumer business segment ahead by more than 2 percent over last year's results.

The company reported net income of $44.2 million, up 21 percent over the prior year's first quarter net income of $36.6 million. First quarter earnings per share were $0.38 on a diluted basis, a 6 percent improvement over last year's $0.36. The 11.5 million common shares issued in connection with the March 2002 equity offering had a dilutive effect of approximately $0.04 per share in this first quarter.

"We're extremely pleased with our results in the first quarter, especially the growth in our industrial business, which has been flat to down over the last several quarters," said Frank C. Sullivan, RPM's president and chief operating officer. "We are also quite encouraged that industrial sales moved ahead on a sequential basis from the fourth quarter to the first quarter this year, in contrast to a decline a year ago. Maintenance activities can be put off for only so long, and we may be seeing some of that business coming back."

Business Outlook

Sullivan added, "September sales were ahead of the prior year, but we hesitate to read anything into that, given the events of last September. Definitive signs of a business upturn simply aren't there yet. The near-term business environment remains challenging in our view, but we remain enthusiastic about our longer-term opportunities. Our operations are becoming more efficient, our cash flows remain strong, and we're positioning our businesses to take full advantage of a better economy when it comes. In the meantime, we're pleased to have recently added several smaller, bolt-on product lines to RPM, and we continue to actively look at other acquisition possibilities both here and in Europe."

About RPM

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, flooring 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, Varathane, Bondo and Testors.

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

This press release contains "forward-looking statements" relating to the business of the Company. These forward-looking statements, or other statements made by the Company, are made based on management's expectations and beliefs concerning future events impacting the Company, and are subject to uncertainties and factors (including those specified below) which are difficult to predict and, in many instances, are beyond the control of the Company. As a result, actual results of the Company could differ materially from those expressed in or implied by any such forward-looking statements. These uncertainties and factors include (a) general economic conditions; (b) the price and supply of raw materials, particularly titanium dioxide, certain resins, aerosols and solvents; (c) continued growth in demand for the Company's products; (d) legal, environmental and litigation risks inherent in the Company's construction and chemicals businesses and risks related to insurance coverage inherent in the Company's disclosed litigation; (e) the effect of changes in interest rates; (f) the effect of fluctuations in currency exchange rates upon the Company's foreign operations; (g) 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; (h) risks and uncertainties associated with the Company's ongoing acquisition and divestiture activities; and other risks detailed in the Company's other reports and statements filed with the Securities and Exchange Commission, including the risk factors set forth in the Company's prospectus and prospectus supplement included as part of the Company's Registration Statement on Form S-3 (File No. 333-77028), as the same may be amended from time to time.

                     In thousands, except per share data

                                               Three Months Ended August 31,
                                                    2002              2001

    Net Sales                                     $542,413          $533,275
    Cost of sales                                  283,209           282,601
    Gross profit                                  $259,204          $250,674
    Selling, general & administrative
     expense                                       184,107           181,619
    Interest expense, net                            7,204            13,064
    Income before income taxes                     $67,893           $55,991
    Provision for income taxes                      23,720            19,422
    Net Income                                     $44,173           $36,569

    Basic earnings per share                         $0.38             $0.36

    Diluted earnings per share                       $0.38             $0.36

    Average shares outstanding - basic             114,765           102,211

    Average shares outstanding - diluted           115,760           102,237

                                  In thousands

                                                           August 31,
                                                     2002              2001
           Current assets                         $794,063          $802,205
           Property, plant & equipment
            (net)                                  351,718           357,834
           Other assets                            881,626           898,261
              Total Assets                      $2,027,407        $2,058,300

    Liabilities and Shareholders' Equity
           Current liabilities                    $325,327          $522,580
           Long-term debt                          710,189           764,681
           Other liabilities                       100,884           101,314
              Total liabilities                 $1,136,400        $1,388,575
           Shareholders' equity                    891,007           669,725
           Total Liabilities &
              Shareholders' Equity              $2,027,407        $2,058,300

                                   In thousands

                                               Three Months Ended August 31,
                                                    2002              2001
    Cash Flows From Operating Activities
            Net income                             $44,173           $36,569
            Depreciation and amortization           14,083            14,549
            Items not affecting cash and
             other                                  (3,055)           (4,727)
            Changes in operating working
             capital                               (33,195)            6,629
                                                    22,006            53,020

    Cash Flows From Investing Activities
            Additions to property and
             equipment                              (5,252)           (6,998)
            Acquisition of new
             businesses, net of cash                (7,595)
                                                   (12,847)           (6,998)

    Cash Flows From Financing Activities
            Increase (decrease) in debt              2,456           (20,885)
            Cash dividends                         (14,261)          (12,716)
            Exercise of stock options                  721                14
                                                   (11,084)          (33,587)

            Net (Decrease) Increase in
             Cash                                  $(1,925)          $12,435

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Photo    :
CONTACT:          Glenn R. Hasman, vice president of finance and communications
                  of RPM, Inc., +1-330-273-8820
                  /Company News On-Call:

Copyright (C) 2002 PR Newswire.  All rights reserved.

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