RPM Reports Record Sales and Net Income for Fiscal 2008 Third Quarter, Nine Months
RPM Reports Record Sales and Net Income for Fiscal 2008 Third Quarter, Nine Months Thursday April 3, 6:00 am ET - Net income grew 21% on 8% sales increase - Growth continued in both industrial and consumer segments in challenging economy - Guidance revised upward to 10-12% sales and earnings growth for fiscal 2008
MEDINA, Ohio, April 3, 2008 /PRNewswire-FirstCall/ -- RPM International Inc. (NYSE: RPM - News) today reported record fiscal third-quarter sales, net income and diluted earnings per share for the quarter ended February 29, 2008. Sales and earnings momentum in the company's larger industrial segment continued, while consumer segment sales and earnings increased significantly over the third quarter a year ago.
RPM's net sales of $731.8 million were up 7.7% from the $679.5 million reported in the fiscal 2007 third quarter. Organic sales growth accounted for 7.1% of the increase, with 3.2% of that amount representing net foreign exchange gains. Net acquisition growth was 0.6% of the 7.7% total growth in net sales.
Net income for the quarter increased 20.9% to $12.2 million, compared to $10.1 million a year ago, while diluted earnings per share increased 25.0% to $0.10, compared to $0.08 in the year-ago third quarter.
The effective tax rate for this quarter was 22.2% compared to a tax rate of 11.6% in the prior year. The higher effective income tax rate in the current period is primarily due to the absence of a one-time benefit reflected in the third quarter of last year.
"RPM's third-quarter operating results reflected continued robust industrial demand, particularly in European, Canadian and Latin American markets," stated Frank C. Sullivan, president and chief executive officer. "Despite the tough U.S. housing market and domestic economy, our consumer segment performed well, as we benefited from prior-year acquisitions, along with the introduction of new, higher-end products, which drove market share gains at major retail accounts," he stated.
Consolidated earnings before interest and taxes (EBIT) reached $25.1 million, an 11.4% improvement over the $22.5 million reported a year ago.
Third-Quarter Segment Sales and Earnings
The company's industrial segment posted a 9.7% sales increase to $467.1 million from $425.7 million in the year-ago third quarter. Organic sales increased 7.5%, of which 4.1% resulted from net foreign exchange gains. Acquisitions accounted for the remaining 2.2% of the increase in total revenues for the period. Industrial segment EBIT for the third quarter was essentially flat at $18.0 million for the quarter compared to $18.1 million last year. Revenue growth outpaced earnings in the current period due to the EBIT impact of the settlement of a lawsuit by one of RPM's subsidiaries.
"Industrial segment sales growth was led by industrial and commercial flooring, industrial coatings and most international operations," stated Sullivan. "Much of this growth resulted from ongoing industrial and commercial maintenance and