RPM International Inc. said it persevered through “unprecedented” supply chain issues and more as it reported record third-quarter sales on Wednesday.
The Medina company also said it anticipates the Russia-Ukraine war will cause energy and transportation costs to increase and also exacerbate supply chain and raw material shortages. RPM International companies make coatings, sealants, building products and more; brands include Rust-Oleum, DAP, Zinsser, Tremco and others.
Even so, RPM executives said they expect fourth-quarter sales will increase.
The company reported earnings before the stock market opened Wednesday, with net income lower than a year ago.
RPM had third-quarter net income of $33 million, or 25 cents per share, on record revenue of $1.43 billion for the quarter ending Feb. 28. That compares to net income of $38.2 million, or 29 cents per share, on revenue of $1.27 billion a year ago.
Adjusted earnings came in at 38 cents per share. Third-quarter net income and revenue beat analyst expectations.
“RPM’s associates persevered through unprecedented supply chain challenges, Omicron-related disruptions and inflation to generate record [earnings] and record sales during the third quarter despite a difficult comparison to the prior year,” Frank C. Sullivan, chairman and chief executive officer, said in a news release
The company was able to quickly respond to supply chain challenges by scaling up in-house resin production at the manufacturing plant it acquired in Texas last September, Sullivan said.
RPM said it expects its operations and those of its suppliers will be impacted in the fourth quarter by ongoing supply chain challenges and raw material shortages. A strengthening U.S. dollar will also unfavorably impact the translation of RPM’s results in international markets, the company said.
“While RPM’s sales to Ukraine and Russia are immaterial, the Russian sanctions are exacerbating inflation of energy and transportation costs,” the company said in its news release. The sanctions are also creating supply challenges for plant-based raw materials and also derivatives of oil, the company said. Rising interest rates may slow business and consumer spending in the coming months, the company said.
RPM said it expects fiscal 2022 fourth-quarter sales will show percentage growth in the low teens.
Beacon Journal reporter Jim Mackinnon can be reached at 330-996-3544 or [email protected]. Follow him @JimMackinnonABJ on Twitter or www.facebook.com/JimMackinnonABJ.
