Core Insights - First Atlantic Nickel Corp. announced positive results from Davis Tube Recovery (DTR) metallurgical tests on drill hole AN-24-03, indicating strong potential for high-grade nickel and chromium recovery from its Atlantic Nickel Project [1][3][10] Summary by Sections DTR Test Results - The DTR testing from drill hole AN-24-03 yielded an average magnetic concentrate grade of 1.32% nickel and 1.95% chromium over 216 meters, with maximum grades reaching 2.54% nickel and 4.24% chromium [1][5][6] - The final 21 meters of the drill hole showed increasing DTR nickel grades averaging 0.15%, above the overall average of 0.11% [2][7] Drilling and Geological Insights - Drilling was halted at 216 meters due to a fault zone of heavily faulted and broken rock, which will be targeted in Phase 2 with more powerful drilling equipment [2][8] - The mineralization is hosted in serpentinized peridotites, consistent with other drill holes at the RPM Zone, suggesting potential for westward expansion of the mineralized area [2][6] Metallurgical Process Development - The DTR results confirm that awaruite nickel can be effectively concentrated through magnetic separation, marking a significant step towards a smelter-free metallurgical process [3][10] - The company aims to produce a high-grade nickel concentrate exceeding 60% nickel on-site, which aligns with North American critical minerals supply chain requirements [10][22] Future Plans - Phase 2 drilling will utilize HQ/NQ core sizes designed to penetrate the fault zone, aiming to extend known mineralization further westward and at depth [8][19] - The company is planning a comprehensive metallurgical process development program, including pilot-scale magnetic separation and further investigations into recovery of secondary metals like chromium and cobalt [19][22] Industry Context - Awaruite, a naturally occurring nickel-iron alloy, offers a cleaner processing alternative compared to conventional nickel sources, reducing dependence on foreign smelting and aligning with U.S. critical mineral requirements [22][26] - The U.S. Geological Survey highlighted the potential of awaruite deposits to alleviate nickel concentrate shortages, emphasizing its easier concentration compared to traditional nickel sulfides [23][26]

Core Viewpoint - RPM International Inc. reported disappointing third-quarter fiscal 2025 results, with earnings and net sales falling short of expectations and declining year over year [1][4]. Financial Performance - Adjusted earnings per share (EPS) were 35 cents, missing the Zacks Consensus Estimate of 52 cents by 32.7%, down from 52 cents in the same quarter last year [4]. - Net sales totaled $1.48 billion, lagging behind the consensus mark of $1.52 billion by 2.5% and down 3% year over year [4]. - Organic sales declined by 1.8% during the quarter, with divestitures contributing 0.5% and foreign currency translation negatively impacting sales by 1.7% [7]. Geographic Sales Breakdown - North America sales decreased by 2.5%, accounting for approximately 76% of total sales, primarily due to adverse weather conditions [5]. - European sales, making up 15% of total sales, fell by 1.2% due to unfavorable foreign currency translation [5]. - Latin America sales dropped by 13.8% year over year, while Asia Pacific sales declined by 9.3% [6]. Segment Performance - Construction Products Group (CPG) sales decreased by 4.5% to $473.4 million, with adjusted EBIT down 37.9% to $12.7 million [9][10]. - Performance Coatings Group (PCG) sales inched down 0.8% to $340.6 million, with adjusted EBIT down 7% to $43.8 million [11][12]. - Specialty Products Group (SPG) sales fell by 10.1% to $158.7 million, with adjusted EBIT down 44.5% to $6.7 million [13][14]. - Consumer Group sales decreased by 0.7% to $503.8 million, with adjusted EBIT down 16.6% to $54.2 million [15][16]. Operational Metrics - Selling, general and administrative expenses as a percentage of net sales increased by 90 basis points to 34% [8]. - Adjusted EBIT declined by 29% year over year to $78.2 million, with adjusted EBIT margin contracting by 190 basis points to 5.3% [8]. Balance Sheet Overview - Total liquidity at the end of the fiscal third quarter 2025 was $1.21 billion, down from $1.36 billion at the end of fiscal 2024 [17]. - Long-term debt increased to $2.09 billion from $1.99 billion at the end of fiscal 2024 [17]. - Cash provided by operations was $619 million in the first nine months of fiscal 2025, down from $941.1 million in the prior year [18]. Future Outlook - For the fourth quarter of fiscal 2025, RPM anticipates consolidated sales to be flat year over year, with expectations of mid-single-digit percentage growth in PCG sales [19]. - Consolidated adjusted EBIT is expected to increase in the low-single-digit percentage range year over year [20].

Financial Data and Key Metrics Changes - Consolidated sales declined by 3.0% compared to the prior year, primarily due to unfavorable weather conditions and foreign currency translation [24] - Adjusted EBIT decreased by $31.9 million, driven by lower production volumes and temporary inefficiencies from plant consolidations [24][25] - Non-operating expenses increased due to higher M&A expenses and increased employee compensation [25] Business Line Data and Key Metrics Changes - Construction Products Group sales declined due to unfavorable weather, particularly in the southern and western US, and faced challenging comparisons to the prior year when adjusted EBIT increased by 69.8% [27] - Performance Coatings Group sales slightly declined against challenging prior year comparisons, with organic sales having increased by 9.2% in the previous year [29] - Specialty Products Group sales declined due to weak specialty OEM markets, although food coatings and additive business continued to perform well [30] - Consumer Group generated slightly positive organic growth aided by new product introductions, despite facing challenging comparisons to the prior year [32] Market Data and Key Metrics Changes - Sales declines in North America were primarily driven by weather, while Europe saw growth from sales and marketing initiatives, offset by foreign exchange impacts [26] - Africa and Middle East sales were down slightly after a significant growth in the prior year [26] - Latin America and Asia Pacific faced sales declines primarily due to foreign exchange impacts and challenging prior year comparisons [26] Company Strategy and Development Direction - The company continues to implement its MAP 2025 initiatives, focusing on improving working capital efficiency and identifying new opportunities for improvement [12][13] - The focus on extending asset life through products and services is emphasized during economic uncertainty, insulating the business from volatility in new construction [14] - The acquisition of the Pink Stuff is expected to broaden product offerings and strengthen market position in the cleaning products category, with significant growth potential [21][22] Management's Comments on Operating Environment and Future Outlook - Management noted a low growth environment for the past eighteen months, with expectations of returning to profitable growth in Q4 despite a challenging macro environment [49][42] - The impact of tariffs on inflation is dynamic, with raw material inflation expected to increase in the mid-single digits due to recently announced tariffs [16][66] - Management expressed confidence in the backlog for roofing and construction projects, indicating that most projects have been pushed to Q4 rather than canceled [87][96] Other Important Information - The company reported the second-best-ever third-quarter operating cash flow in its history at $91.5 million, with a strong liquidity position of $1.21 billion [35][36] - The company has increased year-to-date CapEx by nearly $21 million, driven by growth projects and plant consolidations [36] Q&A Session Summary Question: What assumptions were made regarding macro growth for Q4 guidance? - Management indicated a low growth environment and does not foresee changes in the near future, expecting Q4 to resemble Q2 with self-help initiatives and market share gains [49][51] Question: How much lower were operating rates in the February quarter? - Management noted that organic growth was down 1.8%, primarily due to volume decline, and that inventory reduction initiatives led to reduced production [55] Question: How does the portfolio hold up in a potential GDP recession? - Management expressed confidence in outperforming due to a focus on reroofing and repair and maintenance businesses, which are expected to remain strong [60][63] Question: What is the expected impact of tariffs on raw material inflation? - Management indicated that the unmitigated impact of tariffs is about 3.2%, with efforts underway to mitigate these costs through various strategies [66][68] Question: What are the trends in nearshoring and its impact on business? - Management noted that reshoring trends continue, particularly in technology, while the automotive sector may see a slowdown [80][81] Question: What is the status of the backlog in construction? - Management confirmed a strong backlog in roofing and construction projects, with expectations for a return to profitable growth in Q4 [87][96] Question: What is the margin profile of the Pink Stuff acquisition? - Management indicated that the Pink Stuff acquisition will significantly enhance the consumer segment, with expected growth and a higher margin profile than RPM's average [99][100]

Financial Performance - Consolidated net sales for the three months ended February 28, 2025, were $1,476.6 million, a decrease of 3.0% compared to $1,523.0 million for the same period in 2024[115]. - The CPG segment reported net sales of $473.4 million, down 4.5% from $495.8 million in the prior year, primarily due to unfavorable weather conditions and foreign exchange impacts[115][116]. - The PCG segment experienced a slight decline in net sales of 0.8%, totaling $340.6 million, compared to $343.5 million in the previous year[115][117]. - The Consumer segment achieved modest organic sales growth, with net sales of $503.8 million, a decrease of 0.7% from $507.2 million, impacted by unfavorable foreign exchange[115][118]. - The SPG segment saw a significant decline in net sales of 10.1%, totaling $158.8 million, primarily due to lower demand in specialty OEM markets[115][119]. - Consolidated net income for the three months ended February 28, 2025, was $52.3 million, or 3.5% of net sales, down from $61.5 million, or 4.0% of net sales, for the same period in 2024[137]. - For the nine months ended February 28, 2025, consolidated net sales increased to $5,327.1 million, a slight increase of 0.7% compared to $5,290.7 million in the prior year[138]. - Consolidated net income for the nine months ended February 28, 2025, was $464.3 million, representing 8.8% of net sales, compared to $408.6 million or 7.7% of net sales for the same period in 2024[161]. Cost and Expenses - Consolidated gross profit margin decreased to 38.4% for the third quarter of fiscal 2025, down from 39.9% in the prior year, reflecting reduced fixed-cost absorption and inflationary pressures[120]. - SG&A expenses decreased by $3.1 million year-over-year but increased to 34.0% of net sales from 33.1% in the prior year, driven by MAP 2025 initiatives and other cost factors[122]. - The CPG segment's SG&A decreased by approximately $11.6 million, while the PCG segment's SG&A increased by about $4.0 million due to merit increases and acquisition-related expenses[123][124]. - SG&A expenses decreased by $1.4 million year-over-year but increased slightly to 29.4% of net sales from 29.3%[146]. - Total restructuring costs for the nine months ended February 28, 2025, were $18.2 million, compared to $14.1 million for the same period in 2024, reflecting an increase of 29.1%[153]. - Restructuring costs related to the MAP 2025 initiative totaled $3.5 million for the three months ended February 28, 2025, down from $6.4 million in the prior year[129]. Tax and Pension - A net favorable income tax adjustment of $22.1 million was recorded, increasing the total deferred tax asset related to U.S. foreign tax credit carryforwards to $43.9 million as of February 28, 2025[109]. - The effective income tax benefit rate for the three months ended February 28, 2025, was (27.7%), compared to (26.4%) for the same period in 2024, influenced by a $22.1 million favorable adjustment for deferred income taxes[136]. - The effective income tax rate for the nine months ended February 28, 2025, was 14.7%, significantly lower than 25.5% for the same period in 2024[159]. - For the three months ended February 28, 2025, total net periodic pension and postretirement benefit costs decreased to $12.3 million from $15.2 million, a reduction of $2.9 million[128]. - The total net periodic pension and postretirement benefit costs for the nine months ended February 28, 2025, decreased to $37.0 million from $45.5 million, a reduction of $8.5 million[152]. - The company expects future pension expenses to fluctuate based on investment performance and interest rate changes, which may materially impact consolidated financial results[152]. Cash Flow and Liquidity - Cash provided by operating activities decreased to $619.0 million in the first nine months of fiscal 2025, down from $941.1 million in the same period last year, a decline of 34.2%[162]. - Cash used for investing activities increased to $305.7 million in the first nine months of fiscal 2025, compared to $153.9 million in the prior year, an increase of 98.2%[166]. - As of February 28, 2025, the company had $1.21 billion in available liquidity, down from $1.36 billion as of May 31, 2024, a decrease of 11.0%[171]. - The Net Leverage Ratio as of February 28, 2025, was 1.56 to 1.00, well below the maximum allowable ratio of 3.75 to 1.00[174]. Interest and Market Risks - Interest expense decreased to $23.0 million for the three months ended February 28, 2025, compared to $28.5 million for the same period in 2024, reflecting a decrease in the average interest rate from 4.75% to 4.41%[131]. - Interest expense decreased to $70.6 million for the nine months ended February 28, 2025, down from $90.7 million in the prior year, a reduction of 22.1%[155]. - The average interest rate for the nine months ended February 28, 2025, was 4.50%, down from 4.75% in the prior year, reflecting lower market rates[155]. - The company faces various uncertainties that could materially affect actual results, including market volatility, raw material prices, and legal risks[181]. - There have been no material changes in exposure to market risks related to raw materials costs, interest rates, and foreign exchange rates since May 31, 2024[182]. Future Outlook - The company expects inflationary headwinds to continue affecting results throughout fiscal 2025 and into fiscal 2026, with potential impacts from tariffs[121]. - The company incurred approximately $13.0 million of future additional charges related to the implementation of the MAP 2025 initiative[153]. - Environmental obligations are being appropriately addressed, with no anticipated material impact on results of operations or financial condition[180]. - The company has no off-balance sheet financings or subsidiaries not included in its financial statements[179].

Core Viewpoint - RPM International missed fiscal Q3 2025 expectations due to external challenges, including unfavorable weather and foreign exchange headwinds [2] Financial Performance - Adjusted EPS for fiscal Q3 2025 was $0.35, falling short of the expected $0.50, and down 32.7% from $0.52 in the prior year [3] - Revenue for the quarter was $1.48 billion, below the estimated $1.51 billion, and decreased by 3.0% from $1.52 billion year-over-year [3] - Net income decreased to $52.0 million, a 15.0% decline from $61.2 million in the same quarter last year [3] - Adjusted EBIT was $78.2 million, down 29.0% from $110.1 million in the prior year [3] Business Segment Performance - The Construction Products Group saw a 4.5% year-over-year decline in sales, with adjusted EBIT down 37.9% due to adverse weather and currency headwinds [6] - The Performance Coatings Group experienced a smaller revenue drop of 0.8%, attributed to foreign currency issues and tough comparisons, but had an uptick in fiberglass-reinforced plastic structures due to data center demand [6] - The Specialty Products Group recorded a 10.1% decrease in sales, impacting adjusted EBIT which shrank by 44.5% [7] - The Consumer Group remained stable with a modest 0.7% sales decline, supported by new product rollouts [7] Strategic Initiatives - RPM is focusing on operational efficiencies through its MAP 2025 initiative, aimed at improving supply chain management and fostering international growth [5][8] - The company anticipates flat sales with low-single-digit EBIT growth for fiscal Q4 2025, facing ongoing operational challenges and market volatility [9] Future Outlook - The pending acquisition of Star Brands Group is expected to enhance RPM's Consumer Group offerings [9] - Monitoring the implementation and success of MAP 2025 initiatives will be crucial for assessing RPM's resilience and adaptability in upcoming quarters [10]

Core Insights - RPM International reported revenue of $1.48 billion for the quarter ended February 2025, a decrease of 3.1% year-over-year, and EPS of $0.35, down from $0.52 in the same quarter last year [1] - The revenue fell short of the Zacks Consensus Estimate of $1.51 billion, resulting in a surprise of -2.49%, while the EPS also missed the consensus estimate of $0.52 by -32.69% [1] Financial Performance Metrics - Net Sales for the Construction Products Group (CPG) were $473.41 million, below the average estimate of $503.10 million, reflecting a year-over-year decline of 4.5% [4] - Net Sales for the Specialty Products Group (SPG) were $158.74 million, compared to the average estimate of $173.75 million, marking a 10.1% decrease year-over-year [4] - Net Sales for the Consumer Segment reached $503.79 million, slightly above the average estimate of $499.74 million, with a year-over-year change of -0.7% [4] - Net Sales for the Performance Coatings Group (PCG) were $340.63 million, slightly below the average estimate of $344.54 million, indicating a year-over-year decline of 0.9% [4] Adjusted EBIT Performance - Adjusted EBIT for the Consumer Segment was $54.18 million, below the average estimate of $58.28 million [4] - Adjusted EBIT for the Specialty Products Group (SPG) was $6.72 million, significantly lower than the average estimate of $11.48 million [4] - Adjusted EBIT for the Performance Coatings Group (PCG) was $43.79 million, slightly above the average estimate of $42.50 million [4] - Adjusted EBIT for the Construction Products Group (CPG) was $12.73 million, well below the average estimate of $29.24 million [4] - Adjusted EBIT for Corporate/Other was -$39.18 million, worse than the average estimate of -$30.78 million [4] Stock Performance - RPM International's shares have returned -11.5% over the past month, compared to a -12.2% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [3]

Fiscal 2025 Third-Quarter Results April 8, 2025 Forward-Looking Statements & Regulation G This presentation contains "forward-looking statements" relating to our business. These forward-looking statements, or other statements made by us, are made based on our expectations and beliefs concerning future events impacting us and are subject to uncertainties and factors (including those specified below), which are difficult to predict and, in many instances, are beyond our control. As a result, our actual result ...

Group 1 - RPM International reported quarterly earnings of $0.35 per share, missing the Zacks Consensus Estimate of $0.52 per share, and down from $0.52 per share a year ago, representing an earnings surprise of -32.69% [1] - The company posted revenues of $1.48 billion for the quarter ended February 2025, missing the Zacks Consensus Estimate by 2.49%, and down from $1.52 billion year-over-year [2] - RPM International shares have lost about 13.3% since the beginning of the year, compared to the S&P 500's decline of -13.9% [3] Group 2 - The current consensus EPS estimate for the coming quarter is $1.78 on $2.09 billion in revenues, and for the current fiscal year, it is $5.50 on $7.42 billion in revenues [7] - The Zacks Industry Rank for Chemical - Specialty is currently in the bottom 25% of over 250 Zacks industries, indicating potential underperformance compared to higher-ranked industries [8] Group 3 - The estimate revisions trend for RPM International is currently unfavorable, resulting in a Zacks Rank 4 (Sell) for the stock, suggesting expected underperformance in the near future [6] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Group 1 - U.S. stock futures are higher, with Dow futures gaining over 900 points [1] - The Greenbrier Companies, Inc. reported disappointing second-quarter results, with earnings of $1.56 per share, missing the consensus estimate of $1.78 per share [1] - Greenbrier's quarterly sales were $762.1 million, falling short of the analyst consensus estimate of $898.53 million [1] Group 2 - Greenbrier shares fell 3.9% to $43.00 in pre-market trading [2] - CVRx, Inc. shares dropped 29.8% to $8.10 after preliminary first-quarter 2025 financial results [3] - Collective Mining Ltd. declined 12.2% to $7.31 in pre-market trading [3] - InnovAge Holding Corp. fell 11.2% to $2.70 after a previous gain of over 7% [3] - PureTech Health plc dipped 11% to $16.02 in pre-market trading [3] - Emerald Holding, Inc. fell 7.5% to $3.21 in pre-market trading [3] - Celcuity Inc. reported a year-over-year decrease in fourth-quarter EPS, leading to a 7.1% drop to $8.51 [3] - RPM International Inc. fell 5.9% to $100.40 following weaker-than-expected quarterly results [3] - Maze Therapeutics, Inc. declined 4.5% to $8.52 in pre-market trading [3] - Enliven Therapeutics, Inc. dropped 3.8% to $17.20 in pre-market trading [3]

Financial Performance - Third-quarter sales were $1.48 billion, a decrease of 3.0% compared to the prior year[4]. - Third-quarter net income was $52.0 million, with diluted EPS of $0.40, and adjusted diluted EPS of $0.35, reflecting declines of 14.9% and 32.7% respectively[4][5]. - Adjusted EBIT for the third quarter was $78.2 million, down 29.0% from the prior year, primarily due to lower production levels and foreign currency headwinds[4][9]. - Net sales for the third quarter of fiscal 2025 were $1,476,562, a decrease of 3.0% compared to $1,522,982 in the same period last year[38]. - Gross profit for the quarter was $567,490, down from $607,164, resulting in a gross margin of approximately 38.4%[38]. - Net income attributable to RPM International Inc. stockholders was $52,034, compared to $61,199 in the prior year, reflecting a decline of 14.1%[38]. - Basic earnings per share for the quarter were $0.41, down from $0.48 in the same quarter last year, representing a decrease of 14.6%[38]. - Adjusted EBIT for Q3 2025 was $78,236, down from $110,140 in Q3 2024, a decrease of 29.0%[39]. - Income before income taxes for the total consolidated entity was $40,951, down 51.0% from $83,581 in Q3 2024[39]. - Reported earnings per diluted share for the three months ended February 28, 2025, was $0.40, compared to $0.47 for the same period in 2024, while adjusted earnings per diluted share was $0.35 versus $0.52[45]. Cash Flow and Debt Management - The company generated $91.5 million in cash from operating activities, the second highest third-quarter amount in its history[4]. - Total debt decreased to $2.10 billion from $2.19 billion a year ago, reflecting improved cash flow used to repay higher-cost debt[26]. - Operating working capital as a percentage of sales improved by 70 basis points to 20.7% compared to 21.4% in the prior-year period[26]. - Interest expense for the quarter was $22,993, down from $28,527, showing a decrease of 19.5%[38]. - Cash provided by operating activities for the nine months ended February 28, 2025, was $619.0 million, down from $941.1 million in the prior year, indicating a decrease of approximately 34.2%[47]. - The company’s long-term debt, less current maturities, was $2.09 billion as of February 28, 2025, down from $2.19 billion a year earlier, indicating a reduction of approximately 4.9%[46]. Segment Performance - CPG Segment net sales decreased to $473,408 from $495,753, a decline of 4.5% year-over-year[39]. - PCG Segment net sales slightly decreased to $340,625 from $343,536, a decline of 0.6% year-over-year[39]. - SPG Segment net sales decreased to $158,737 from $176,494, a decline of 10.1% year-over-year[39]. - Consumer Segment net sales decreased to $503,792 from $507,199, a decline of 0.8% year-over-year[39]. - The CPG Segment's income before income taxes decreased to $9,923 from $15,060, a decline of 34.2% year-over-year[39]. - Corporate/Other segment reported a loss before income taxes of $65,045, compared to a loss of $53,480 in Q3 2024[39]. Future Outlook and Strategic Initiatives - The fiscal 2025 fourth-quarter outlook anticipates flat sales and adjusted EBIT growth in the low-single-digit percentage range[4][31]. - The company expects consolidated adjusted EBIT to increase in the low-single-digit percentage range compared to prior-year record results[31]. - The company anticipates continued growth in demand for its products, despite uncertainties in global markets and economic conditions[36]. - The Pink Stuff acquisition is expected to close late in the fourth quarter of fiscal 2025 or early in the first quarter of fiscal 2026, with 2024 sales of approximately £150 million[23][24]. - The company plans to consolidate over 75 ERP systems into four platforms as part of its Margin Acceleration Plan (MAP), aiming to improve operational efficiency[45]. Inventory and Assets - The company reported a decrease in inventories to $1.04 billion as of February 28, 2025, from $1.08 billion in the prior year, representing a decline of about 3.5%[46]. - Total assets as of February 28, 2025, amounted to $6.62 billion, an increase from $6.38 billion a year earlier, representing a growth of about 3.7%[46]. - Total current liabilities increased to $1.24 billion as of February 28, 2025, from $1.20 billion a year earlier, marking an increase of approximately 3.5%[46]. - The company’s retained earnings increased to $3.03 billion as of February 28, 2025, compared to $2.64 billion a year earlier, reflecting a growth of about 14.9%[46]. Restructuring and Cost Management - Restructuring expenses for the quarter were $3,456, compared to $6,359 in the same period last year, indicating a reduction in restructuring costs[38]. - MAP initiatives incurred expenses of $14,520 in Q3 2025, compared to $16,780 in Q3 2024, a decrease of 13.5%[42].