RPM Posts Record Q1 Revenue, Sees Mid-Single-Digit FY2027 Growth

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4小时前

RPM International Inc. reported record fiscal first-quarter revenue and adjusted EBITDA as strength in performance coatings and consumer products, along with benefits from its MAP improvement program, offset weaker construction-products demand and raw-material shortages. The company also set its fiscal 2027 sales and adjusted EBITDA expectations at mid-single-digit growth while preparing additional pricing actions to address higher inflation.

For the three months ended August 31, 2026, revenue rose 4.8% year over year to $2.22 billion. Organic sales increased 3.1%, acquisitions net of divestitures added 1.6%, and foreign exchange contributed 0.1%.

Adjusted EBITDA, a non-GAAP measure, increased 4.5% to $405.5 million, though the adjusted EBITDA margin edged down 10 basis points to 18.3%. Gross margin declined 100 basis points to 41.3%, primarily because of inflation, while selling, general and administrative optimization largely offset that pressure at the adjusted EBITDA margin level.

GAAP net income attributable to RPM stockholders increased 12.6% to $256.4 million, while diluted earnings per share rose 13.6% to $2.01. Adjusted diluted EPS advanced 5.3% to $1.98.

RPM said higher sales, operational benefits from MAP and lower healthcare expenses supported earnings. Profitability was constrained by raw-material inflation, $6.3 million of warranty expenses at a business under review for closure and $4.4 million of bad-debt expense tied to a customer bankruptcy.

Performance Coatings leads growth

The Performance Coatings Group delivered the strongest segment results. Sales increased 10.2% to a record $629.7 million, including 7.9% organic growth, a 1.8% acquisition contribution and a 0.5% foreign-exchange benefit. Adjusted EBITDA climbed 18.2% to $121.1 million, lifting the segment margin by 130 basis points to 19.2%.

RPM attributed the performance to broad-based demand, particularly for engineered solutions used in high-performance buildings and energy and infrastructure projects. Emerging markets and food coatings and ingredients also grew strongly. Higher volumes improved fixed-cost leverage, while pricing and SG&A-focused optimization helped counter raw-material inflation.

Consumer Group sales rose 5.3% to a record $726.7 million, driven almost entirely by organic growth. Shelf-space wins, new products and pricing contributed to the increase. Adjusted EBITDA advanced 5.5% to $146.6 million, and the margin improved 10 basis points to 20.2% as volume growth, fixed-cost utilization and MAP operational improvements offset part of the inflationary pressure.

Construction Products Group results were weaker. Sales increased 0.8% to $859.2 million, as a 2.5% contribution from acquisitions and divestitures more than offset a 1.7% organic decline. The Kalzip acquisition and pricing supported revenue, but demand slowed in education and healthcare markets, while supplier-related raw-material shortages limited product availability.

The segment’s adjusted EBITDA fell 9.7% to $166.2 million, and its margin contracted 230 basis points to 19.3%. Lower volumes reduced fixed-cost absorption, while inflation, the customer-bankruptcy charge and warranty costs at the European business under review for closure added pressure. SG&A optimization provided a partial offset.

Geographically, North America, which represented 77% of quarterly sales, grew 2.6%. Europe rose 5.9%, driven by mergers and acquisitions. Sales increased 23.1% in Latin America, 26.8% in Africa, the Middle East and other foreign markets, and 38.4% in Asia-Pacific. RPM said emerging-market growth exceeded 20%, supported by engineered solutions for building and infrastructure projects.

Inflation rises as pricing actions expand

RPM now expects raw-material inflation of 9% to 11% in the fiscal second quarter, compared with its previous expectation of 6% to 8%, followed by 7% to 9% in the third quarter. The company said elevated oil prices had increased its inflation assumptions. Although polyurethane shortages have improved, higher related costs are expected to affect second-quarter earnings.

To respond, RPM is implementing widespread incremental price increases and using surcharges to offset rising freight rates.

For the second quarter, management expects consolidated sales and adjusted EBITDA to grow in the low- to mid-single-digit range year over year. Construction Products sales are projected to increase by a low-single-digit percentage, Performance Coatings by a mid- to high-single-digit percentage and Consumer by a low- to mid-single-digit percentage.

Expected supports include SG&A optimization, pricing, infrastructure and energy demand, consumer stabilization, emerging markets, and resilient repair and maintenance activity. Economic uncertainty, inflation, start-up costs at new shared facilities, and weakness in education and healthcare markets are expected to remain headwinds.

For fiscal 2027, RPM expects both consolidated sales and adjusted EBITDA to increase by a mid-single-digit percentage. Its prior outlook called for sales growth of 3% to 7% and adjusted EBITDA growth of 5% to 10%. The company identified a new MAP program, $75 million of previously announced SG&A-focused savings, pricing, and infrastructure, energy, repair and maintenance demand as expected supports. Risks include economic uncertainty, inflation, shared-facility start-up costs and more challenging comparisons in the second half.

Working capital declined to 22.2% of trailing 12-month sales from 23.7% a year earlier despite supply-chain disruptions. RPM returned $90.5 million to shareholders through dividends and share repurchases, up 10.2% year over year, and spent $58.5 million on capital expenditures, compared with $62.5 million in the prior-year quarter. The company ended the period with $1.21 billion of liquidity and acquired below-grade waterproofing supplier Volteco during the second quarter.

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