Hot Stocks: RPM International Inc. (NYSE:RPM)

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On Thursday, Shares of RPM International Inc. (NYSE: RPM) loss -0.56 percent and now trading at $53.15. Trading volume recorded for this company was about 1.42M shares as a contrast to its average volume of 615,895.00 shares. The stock’s intraday range is $53.00 to $56.69. The company has the total of 133.54M outstanding shares, while its market capitalization is about $7.10B.

RPM International Inc. (NYSE: RPM) recently stated record sales, net income and diluted earnings for each share for its fiscal 2018 2nd-quarter finished November 30, 2017.

Sales increased 10.50 percent and net income of $95.50M, or $0.7 for each diluted share, contrast to a year-ago net loss of $70.90M, or loss of $0.540 for each diluted share.

The fiscal 2017 2nd-quarter results included a $188.30M pre-tax ($129.20M or $0.970 for each diluted share, after-tax) impairment charge.

The fiscal 2017 2nd-quarter results also included a charge of $12.30M, or $0.090 for each share, which had no tax impact, related to the decision to exit an industrial segment business in the Middle East.

  • Record 2nd-quarter sales get better 10.50 percent
  • Record net income of $95.50M compares to loss for the fiscal 2017 quarter of $70.90M because of impairment and business exit charges
  • Record earnings for each diluted share of $0.7 compare to year-ago loss for each share of $0.540 and “adjusted” year-ago earnings for each share of $0.520
  • Fiscal 2018 guidance increased

2nd-Quarter Results

Net sales of $1.320B were up 10.50 percent over the $1.190B stated a year ago. Organic sales enhanced 4.20 percent and acquisition growth added 4.70 percent.

Foreign currency translation increased sales by 1.60 percent. Net income of $95.50M compares to last year’s adjusted net income of $70.50M.

Earnings for each diluted share of $0.70 in the current quarter, which included a $0.090 for each diluted share tax benefit relative to last year’s tax rate, compared to an adjusted $0.520 for each diluted share last year.

Earnings for each diluted share increased 34.60 percent from last year’s adjusted earnings for each diluted share of $0.520 and increased 17.30 percent apart from the $0.090 for each diluted share tax benefit.

Income before income taxes (IBT) of $109.20M compares to a loss before income taxes of $106.90M stated in the fiscal 2017 2nd-quarter. RPM’s merged earnings before interest and taxes (EBIT) of $131.80M compare to a merged loss before interest and taxes of $86.40M stated in the fiscal 2017 2nd-quarter.

Apart From the year-ago charges, RPM’s merged EBIT for the fiscal 2018 2nd-quarter enhanced 15.40 percent over $114.20M in the fiscal 2017 2nd-quarter.

The EBIT improvement of 15.40 percent included the cost savings benefit in “Corporate/Other” expenses of $11.10M from lower pension, healthcare, acquisition-related expenses and professional fees.

“We were very pleased with RPM’s results throughout the fiscal 2nd-quarter. Our plannedally balanced business model performed as intended with strength in our industrial and specialty businesses offsetting weakness in our consumer segment. Sales growth was strong across all three of our business segments, with a balance of organic and acquisition growth. We are also seeing the advantages of previous year’s product line acquisitions and cost diminution hard works on enhanced leverage, which more than offset higher raw material costs that have negatively influenced gross profit margins,” stated Frank C. Sullivan, chairman, and CEO.

2nd-Quarter Segment Sales and Earnings

Throughout the fiscal 2018 2nd-quarter, industrial segment sales increased 11.00 percent, to $702.90M from $633.40M in the fiscal 2017 2nd-quarter. Organic sales enhanced 5.40 percent, while acquisition growth added 3.30 percent.

Foreign currency translation increased sales by 2.30 percent. IBT for the industrial segment increased 34.60 percent, to $67.70M from $50.30M in the fiscal 2017 2nd-quarter. Industrial segment EBIT increased 34.50 percent, to $70.20M from $52.20M in the fiscal 2017 2nd-quarter.

Industrial segment EBIT was up 8.90 percent over an adjusted $64.50M in the fiscal 2017 2nd-quarter, apart from last year’s charge to exit a Middle Eastern flooring business.

RPM’s fiscal 2018 2nd-quarter consumer segment sales increased 11.10 percent, to $415.40M from $373.80M a year ago. Organic sales increased 3.00 percent, while acquisition growth added 7.30 percent. Foreign currency translation increased sales by 0.80 percent.

The customer segment had IBT of $45.10M, a contrast to a loss before income taxes of $140.60M in the fiscal 2017 2nd-quarter. The segment stated EBIT of $45.20M, a contrast to a loss before interest and taxes of $140.60M stated last year.

EBIT was off 5.30 percent from an adjusted $47.70M in the fiscal 2017 2nd-quarter, which excludes the impairment charge related to RPM’s consumer nail enamel business.

“Throughout the quarter, we saw a sharp uptick in business from caulks and sealants goods, in addition to some international markets. The segment also benefited from last year’s acquisitions of Touch ‘N Foam in the U.S. and SPS in Europe. The decline in EBIT resulted from higher raw material costs and unfavorable manufacturing absorption and product mix,” stated Sullivan.

2nd-quarter sales for the specialty segment increased 7.40 percent, to $197.10M from $183.60M in the fiscal 2017 2nd-quarter.

Organic growth was 2.80 percent, while acquisitions added 3.80 percent. Foreign currency translation increased sales by 0.80 percent.

IBT for the specialty segment increased 10.50 percent, to $34.40M from $31.20M in the fiscal 2017 2nd-quarter. Specialty segment EBIT enhanced 10.80 percent, to $34.40M from $31.00M a year ago.

Cash Flow and Financial Position:

For the 1st-half of fiscal 2018, cash from operations was $115.20M, a contrast to $158.70M a year ago. Capital expenditures of $45.30M contrast to $48.00M throughout the 1st half of last year. Total debt at November 30, 2017 was $2.140B, contrast to $1.640B at November 30, 2016 and $2.10B at May 31, 2017. RPM’s net (of cash) debt-to-total capitalization ratio was 53.80 percent, contrast to 52.80 percent at November 30, 2016. At November 30, 2017, liquidity stood at $971.70M, counting cash of $267.90M and $703.80M in long-term committed available credit.

1st-Half Sales and Earnings:

Fiscal 2018 1st-half net sales enhanced 8.90 percent, to $2.660B from $2.440B throughout the 1st six months of fiscal 2017.

Organic growth was 2.50 percent, acquisitions added 5.50 percent and positive foreign currency translation added 0.90 percent. Net income enhanced 406.40 percent, to $211.90M from $41.80M in the fiscal 2017 1st half.

Diluted earnings for each share were $1.560, up 387.50 percent from $0.320 a year ago. IBT of $264.50M was up 535.50 percent over the $41.60M stated in the fiscal 2017 1st half. EBIT of $309.40M was 281.80 percent above the $81.00M stated last year. Apart From the impairment and Middle East business exit charge in fiscal 2017, fiscal 2018 1st-half EBIT was up 9.90 percent over an adjusted $281.60M last year.

1st-Half Segment Sales and Earnings:

RPM’s industrial segment fiscal 2018 1st-half sales were up 9.40 percent, to $1.430B from $1.310B in the fiscal 2017 1st half.

Organic sales increased 3.80 percent, while acquisition growth added 4.20 percent. Foreign currency translation increased sales by 1.40 percent. IBT for the industrial segment increased 12.20 percent, to $156.60M from $139.60M in fiscal 2017.

EBIT of $161.70M was up 12.80 percent from $143.30M in the 1st-half last year. Apart From the Middle East business exit charge last year, industrial segment EBIT increased 3.90 percent, from $155.60M a year ago.

1st-half sales for the consumer segment enhanced 8.90 percent, to $842.60M from $773.70M a year ago. Organic sales were flat, but acquisition growth added 8.5 percent and foreign currency translation increased sales by 0.40 percent.

The consumer segment stated IBT of $117.50M, a contrast to a loss before interest and taxes of $70.50M in the year-ago 1st half. EBIT of $117.80M compares to a loss before interest and taxes in fiscal 2017 2nd-quarter of $70.50M. Consumer segment EBIT was essentially flat to an adjusted EBIT of $117.80M last year, apart from the impairment charge.

Specialty segment sales grew 7.10 percent, to $385.60M from $359.90M in 2017 1st-half. Organic growth was 2.90 percent, while acquisitions added 3.90 percent. Foreign currency translation increased sales by 0.30 percent. IBT for the specialty segment increased 9.60 percent, to $67.60M from $61.70M in fiscal 2017. For the 1st half of fiscal 2018, specialty segment EBIT increased 9.80 percent, to $67.40M from $61.40M a year ago.

Webcast and Conference Call Information:

The administration will host a conference/discussion call to talk about these results starting at 10:00 a.m. EST recently. The call can be accessed by dialing 888-771-4371 or 847-585-4405 for worldwide callers. Participants are asked to call the assigned number about 10.0 minutes before the conference call begins.

The stock price is going up to its 52-week low with 11.58 percent and upper from its 52-week high with -5.43 percent. The stock has shown its weekly performance of 1.98 percent and monthly performance stands at 1.96 percent. The stock price is moving up from its 200 days moving average with 1.85 percent and upward from 50 days moving average with 1.74 percent.

Analyst recommendation for this stock stands at 2.30.