RPM's Q3 Earnings Exceed Expectations

RPM International Inc.RPM reported third-quarter FY22 sales growth of 13% year-over-year to $1.43 billion, beating the consensus of $1.41 billion.
Sales by segments: Construction Products Group $482 million (+21.7% Y/Y), Performance Coatings Group $270.9 million (+19.6% Y/Y), Specialty Products Group $189.4 million (+11.9%Y/Y) and Consumer Group $491.6 million (+2.9% Y/Y).
Adjusted EPS was $0.38, beating the consensus of $0.30.
The gross margin contracted by 240 bps to 34.8%.
Adjusted EBIT was $80.56 million (+0.8% Y/Y), and the margin contracted by 70 bps to 5.6%.
YTD cash from operations was $156 million, compared to $651.9 million a year ago.
RPM’s total liquidity, including cash and committed revolving credit facilities, stood at $1.46 billion as of February 28, 2022.
Total debt was $2.59 billion compared to $2.31 billion a year ago and $2.38 billion on May 31, 2021.
4Q22 outlook: The company expects sales growth and adjusted EBIT growth in the low teens.
RPM expects earnings to continue to be affected by raw material, freight, and wage inflation and the impact on sales volumes from operational disruptions caused by raw material shortages.
Price Action: RPM shares are trading higher by 4.40% at $86.78 on the last check Wednesday.

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