MEDINA, OH -- RPM International Inc. has reported record first-quarter net income, earnings per share and cash flow for the period ended August 31, 2009. During the fiscal 2010 first quarter, the company's consumer segment earnings before interest and taxes (EBIT) more than offset the decline in industrial segment EBIT, as compared to the fiscal 2009 first quarter. Earnings in both business segments benefited from expense reductions implemented during the prior fiscal year and improving gross profit margins.
First-quarter net sales of $916.0 million were 7.1 percent below the $985.5 million reported a year ago. Core growth declined 3.2 percent with the balance of 3.9 percent attributable to negative foreign exchange translation. Net income of $73.0 million was a first-quarter record, up 5 percent from last year's record $69.5 million. Record first-quarter diluted earnings per share were $0.57, a 7.5 percent increase over the $0.53 reported a year ago.
"The advantage of our deliberate strategic balance between consumer and industrial markets was evident in the quarter as our consumer segment sales and EBIT growth offset continued weakness in our industrial segment. It was a solid quarter for RPM, reflecting the benefits of the aggressive actions we took last year to lower our cost base, resulting in net income that was ahead of last year's record first quarter," stated Frank C. Sullivan, Chairman and Chief Executive Officer.
Consolidated EBIT was a record $120.6 million, an 8.8 percent improvement over the record EBIT of $110.9 million in the first quarter of fiscal 2009. The company's gross profit margin improved by 200 basis points, while selling, general and administrative expenses as a percent of sales increased 10 basis points on the lower sales volume, yet declined in absolute terms by 6.6 percent.
The company's consumer segment, accounting for 34.5 percent of consolidated first-quarter sales, posted core growth of 12.5 percent with a negative foreign exchange impact of 2.6 percent. Consumer sales rose to $316.2 million from $287.9 million a year ago. Consumer segment EBIT increased 54.1 percent to $53.3 million in the fiscal 2010 first quarter from $34.6 million in the fiscal 2009 first period.
Sales for RPM's industrial segment, representing 65.5 percent of the company's consolidated first-quarter sales, declined 14.0 percent to $599.7 million from $697.6 million a year ago. Core sales growth declined 9.6 percent and the balance of 4.4 percent resulted from the negative impact of foreign exchange. Segment EBIT fell 10.3 percent to $81.9 million from $91.3 million in the fiscal 2009 first quarter.
Looking forward, Sullivan noted, "Our first-quarter results were better than we anticipated, which certainly gives us a good start to the fiscal year. The sequential increase in sales from the fiscal 2009 fourth quarter of 6.8 percent is a marked change from previous years where the first quarter is typically lower than the fourth quarter. We see this as a bullish sign of a slowly improving economy. The strength of our first quarter makes us more comfortable that we will be at the higher end of our previously stated guidance of full-year earnings per share growth of 5 percent to 25 percent over the adjusted $1.05 earned in fiscal 2009.”