RPM International Inc. has reported record financial results for its fiscal 2025 first quarter ended August 31, 2024. The company's net income reached a record $227.7 million, resulting in a record diluted EPS of $1.77. Adjusted diluted EPS also saw a significant increase of 12.2% over the prior year, reaching a record $1.84. Furthermore, the company achieved a record EBIT of $303.9 million, representing a 5.3% increase from the prior year.
However, net sales decreased by 2.1% to $1.97 billion compared to the prior year. The first-quarter outlook for fiscal 2025 anticipates flat sales growth and mid-single digit adjusted EBIT growth. The full-year outlook remains unchanged with revenue growth in the low-single digits and adjusted EBIT growth in the mid-single digits to low-double digits.
The Construction Products Group (CPG) achieved a record first-quarter sales of $793.991 million, representing a 1.4% increase from the prior year. The group's adjusted EBIT also saw a substantial increase of 10.6% to $159.904 million compared to the previous year.
Similarly, the Performance Coatings Group (PCG) achieved positive first-quarter organic sales, driven by the flooring business and emerging markets, resulting in a 9.4% increase in adjusted EBIT to $64.592 million.
The Specialty Products Group (SPG) saw a decline in first-quarter sales, primarily due to soft specialty residential OEM end-market demand, resulting in a 3.5% decrease to $174.565 million. However, the group's adjusted EBIT increased by 1.2% to $18.112 million.
The Consumer Group experienced a 6.1% decline in first-quarter sales to $628.474 million, with adjusted EBIT declining by 4.1% to $116.214 million.
The company reported strong first-quarter cash provided by operating activities of $248.1 million, driven by improved profitability and working capital efficiency. Operating working capital as a percentage of sales improved by 250 basis points to 22.7% compared to the prior year.
Additionally, the company returned $76.4 million to stockholders through cash dividends and share repurchases. As of August 31, 2024, total debt was reduced to $2.05 billion from $2.51 billion a year ago, with total liquidity reaching $1.44 billion compared to $1.23 billion a year ago.
Looking ahead, RPM International Inc. expects consolidated sales for the second quarter to be flat compared to the prior year, with consolidated adjusted EBIT anticipated to increase in the mid-single-digit percentage range compared to the prior year.
Despite the decline in net sales, the company's focus on controlling what it can, executing on MAP 2025 initiatives, and leveraging opportunities for growth and margin expansion has positioned it well for continued success in the coming quarters. As a result of these announcements, the company's shares have moved 6.3% on the market, and are now trading at a price of $127.65. For more information, read the company's full 8-K submission here.
