RPM Reports Fiscal 2015 First-Quarter Results
MEDINA, OH - RPM International Inc. announced that unusually strong performance in its prior-year first quarter dampened comparative results for the fiscal 2015 first quarter that ended August 31, 2014, but that the company is maintaining its full-year earnings guidance for fiscal 2015, which was issued July 28, 2014. Full-year guidance for the fiscal year ending May 31, 2015 anticipates growth in diluted earnings per share of 9% to 11%, or a range of $2.38 to $2.42 per diluted share.
Fiscal 2015 first-quarter net sales of $1.204 billion increased 3.4% over the $1.165 billion reported a year ago. RPM's consolidated earnings before interest and taxes (EBIT) declined 0.2% to $163.7 million from $164.0 million reported in the fiscal 2014 first quarter. First-quarter net income declined 3.9% to $99.1 million from $103.1 million in the year-ago period, and diluted earnings per share declined 5.2% to $0.73 from $0.77 in the fiscal 2014 first quarter.
"As we announced in an 8-K filing on September 4, 2014, we anticipate that quarterly results during fiscal 2015 will follow a different pattern compared to fiscal 2014, particularly in the first quarter. During last year's first quarter, our Synta and Kirker subsidiaries had exceptionally strong performance due to highly successful new product introductions and distribution expansion since being acquired by RPM," said Frank C. Sullivan, Chairman and Chief Executive Officer. "We expect to resume improved financial performance for the remainder of this fiscal year."
Non-recurring costs in this year's first quarter totaled $5.6 million pre-tax, and were related primarily to legal expenses incurred in conjunction with a Securities and Exchange Commission investigation of timing of expense accruals in the 2013 fiscal year, which did not affect full-year earnings, along with the proposed Specialty Products Holding Corp. (SPHC) settlement, and a voluntary self-disclosure agreement with the state of Delaware for unclaimed property.
RPM's consumer segment, which includes both the Kirker and Synta business units, reported a 0.8% decrease in sales to $430.0 million from $433.4 million in the fiscal 2014 first quarter. Organic sales declined 2.0%, including favorable foreign exchange of 0.1%, while acquisition growth contributed 1.2%. Consumer segment EBIT declined 7.3% to $76.7 million from $82.7 million in the fiscal 2014 first quarter.
The company's industrial segment net sales improved 5.8%, to $773.9 million from $731.2 million reported a year ago, with 4.5% in organic growth, including 0.1% in favorable foreign exchange, while acquisitions added 1.3%. Industrial segment EBIT grew 5.0% to $105.1 million from $100.1 million in the fiscal 2014 first quarter.
"Our full-year outlook for fiscal 2015 remains the same as previously announced, with industrial sales increasing 6% to 8%, consumer sales increasing 5% to 7% and consolidated sales increasing 6% to 8%, which is expected to translate into net income and diluted earnings per share growth over the prior year of 9% to 11%, or $2.38 to $2.42," Sullivan stated.
The company also announced a regular quarterly cash dividend of $0.26 per share, payable on October 31, 2014, to stockholders of record as of October 20, 2014. This payment represents an 8.3% increase over the $0.24 quarterly cash dividend paid at this time last year.
This action marks RPM's 41st consecutive year of increased cash dividends paid to its stockholders.