RPM(RPM) - 2025 Q4 - Annual Results

RPM Fiscal 2025 Financial Performance Summary Fourth-Quarter 2025 Consolidated Results RPM reported record fourth-quarter results, with a 3.7% increase in net sales to $2.08 billion and a 10.1% rise in adjusted EBIT to $314.4 million. Growth was driven by strong demand for high-performance building solutions, contributions from acquisitions, and robust performance in Europe. Operational improvements from the MAP 2025 program helped leverage sales growth and expand margins, despite some inflationary pressures Q4 FY2025 Consolidated Financial Highlights | Metric | Q4 2025 | Q4 2024 | % Change | | :--- | :--- | :--- | :--- | | Net Sales | $2,082.0M | $2,008.2M | +3.7% | | Net Income | $225.8M | $180.6M | +25.0% | | Diluted EPS | $1.76 | $1.40 | +25.7% | | Adjusted EBIT | $314.4M | $285.6M | +10.1% | | Adjusted Diluted EPS | $1.72 | $1.56 | +10.3% | - Sales growth was composed of 2.0% organic growth, 2.0% from acquisitions, and a 0.3% headwind from foreign currency translation[9] - Geographically, Europe led sales growth with a 14.9% increase, followed by North America at 2.7%. Emerging markets were mixed, with growth in Latin America offset by weakness in Asia[8] - Adjusted EBIT growth was driven by organic sales growth and MAP 2025 operational improvements, which were partially offset by raw material cost inflation and increased SG&A from M&A expenses and variable compensation[10] Fiscal Year 2025 Consolidated Results For the full fiscal year 2025, RPM achieved record sales of $7.37 billion, a modest 0.5% increase over the prior year. The company also reported record adjusted EBIT of $976.0 million and a record adjusted EBIT margin of 13.2%, driven by benefits from the MAP 2025 program which offset soft market conditions in DIY and specialty OEM markets Full-Year FY2025 Consolidated Financial Highlights | Metric | FY 2025 | FY 2024 | % Change | | :--- | :--- | :--- | :--- | | Net Sales | $7,372.6M | $7,335.3M | +0.5% | | Net Income | $688.7M | $588.4M | +17.0% | | Diluted EPS | $5.35 | $4.56 | +17.3% | | Adjusted EBIT | $976.0M | $941.6M | +3.7% | | Adjusted Diluted EPS | $5.30 | $4.94 | +7.3% | - The company achieved a record adjusted EBIT margin of 13.2% in fiscal 2025[5][27] - Record adjusted EPS was driven by adjusted EBIT growth and lower interest expense, as strong cash flow was used to repay debt[28] Fourth-Quarter 2025 Segment Performance In Q4, the Construction Products and Performance Coatings groups delivered record sales and double-digit adjusted EBIT growth, driven by demand for high-performance building solutions. The Specialty Products Group saw a modest sales increase and a 7.4% rise in adjusted EBIT. The Consumer Group's sales declined 1.6% due to DIY market softness, but still achieved record adjusted EBIT through MAP 2025 initiatives Construction Products Group (CPG) CPG achieved record Q4 sales of $809.9 million, a 6.3% increase, driven by strong demand for systems and turnkey roofing solutions. Adjusted EBIT grew by 14.2% to a record $158.1 million, benefiting from MAP 2025 initiatives and a favorable sales mix CPG Q4 FY2025 Results | Metric | Q4 2025 | Q4 2024 | % Change | | :--- | :--- | :--- | :--- | | Net Sales | $809.9M | $762.2M | +6.3% | | Adjusted EBIT | $158.1M | $138.5M | +14.2% | - Sales growth was primarily organic, with 6.7% organic growth, 0.3% from acquisitions, and a 0.7% negative impact from foreign currency[14] Performance Coatings Group (PCG) PCG reported record Q4 sales of $399.2 million, up 9.2%, fueled by strong demand for flooring solutions and products for data centers, as well as contributions from an acquisition. Adjusted EBIT increased 19.1% to a record $57.8 million, driven by higher volumes and MAP 2025 improvements PCG Q4 FY2025 Results | Metric | Q4 2025 | Q4 2024 | % Change | | :--- | :--- | :--- | :--- | | Net Sales | $399.2M | $365.6M | +9.2% | | Adjusted EBIT | $57.8M | $48.5M | +19.1% | - Sales growth included 4.4% organic growth and a 5.0% increase from acquisitions[17] Specialty Products Group (SPG) SPG sales increased 1.9% to $181.3 million, with stabilization in specialty OEM markets and strong growth in food coatings. Adjusted EBIT grew 7.4% to $11.4 million due to MAP 2025 initiatives, though this was partially offset by a bad debt expense and start-up costs. Reported EBIT was negative due to significant non-cash asset impairment charges SPG Q4 FY2025 Results | Metric | Q4 2025 | Q4 2024 | % Change | | :--- | :--- | :--- | :--- | | Net Sales | $181.3M | $178.0M | +1.9% | | EBIT | ($10.6M) | $7.5M | -241.3% | | Adjusted EBIT | $11.4M | $10.6M | +7.4% | - Reported EBIT included $13.1 million of non-cash asset impairment charges and a $5.8 million charge for a legal settlement, which were excluded from adjusted EBIT[21] Consumer Group The Consumer Group's sales declined 1.6% to $691.5 million, reflecting softness in DIY markets. Despite lower volumes, the group achieved record adjusted EBIT of $122.5 million, a 3.6% increase, driven by MAP 2025 improvements that offset cost inflation Consumer Group Q4 FY2025 Results | Metric | Q4 2025 | Q4 2024 | % Change | | :--- | :--- | :--- | :--- | | Net Sales | $691.5M | $702.5M | -1.6% | | Adjusted EBIT | $122.5M | $118.2M | +3.6% | - The sales decline included a 3.8% organic decline, which was partially offset by 2.3% growth from acquisitions, including The Pink Stuff[24][23] Cash Flow and Financial Position RPM generated strong cash from operations of $768.2 million in fiscal 2025, the second highest in its history. The company increased its debt to $2.65 billion to fund its largest M&A year, which included the acquisition of The Pink Stuff. As a result, total liquidity decreased to $969.1 million. The company returned $325.6 million to shareholders via dividends and buybacks - Cash provided by operating activities was $768.2 million, down from a record $1.12 billion in FY2024, which had benefited from a large working capital release[29] - Total debt increased by $519.5 million to $2.65 billion as of May 31, 2025, primarily to finance acquisitions[32] - The company returned $325.6 million to stockholders, a 13.5% increase from the prior year[30] - Total liquidity stood at $969.1 million, compared to $1.36 billion a year ago, with the decrease driven by the use of credit facilities for acquisitions[32] Business Outlook for Fiscal 2026 For fiscal year 2026, RPM anticipates solid top-line growth and continued margin expansion. The company forecasts low- to mid-single-digit sales growth and high-single to low-double-digit adjusted EBIT growth for the full year. The first quarter is expected to see similar sales growth and low- to mid-single-digit adjusted EBIT growth Fiscal 2026 Guidance | Period | Sales Growth Outlook | Adjusted EBIT Growth Outlook | | :--- | :--- | :--- | | Full-Year FY2026 | Low- to mid-single-digit % | High-single to low-double-digit % | | Q1 FY2026 | Low- to mid-single-digit % | Low- to mid-single-digit % | - For Q1 FY2026, sales growth is expected to be similar across the three reorganized segments, with the Consumer segment slightly higher due to recent acquisitions[33] - The company anticipates that inflation will temporarily outpace pricing in the first quarter, offsetting some benefits from efficiency initiatives[31] Corporate Strategy and Reorganization MAP 2025 Initiative The MAP 2025 operating improvement program remains a cornerstone of RPM's strategy, enabling the company to leverage sales growth into record adjusted EBIT and margin expansion. The initiative focuses on improving operating efficiency and has been credited with the company's consistent achievement of record results - The company has delivered record sales, adjusted EBIT, and adjusted EPS every year since the MAP 2025 program began[4] - MAP 2025 initiatives are a key driver of adjusted EBIT growth by improving operating efficiency and expanding margins[4][10] Segment Reorganization Effective in fiscal 2026, RPM is reorganizing its business from four segments into three: the Construction Products Group, Performance Coatings Group, and the Consumer Group. The businesses from the former Specialty Products Group will be integrated into these three segments to enhance collaboration, drive growth, and create further operating efficiencies - The company is reorganizing into three segments: Construction Products Group, Performance Coatings Group, and the Consumer Group[4] - The goal of the streamlined structure is to foster closer collaboration to fuel revenue growth and leverage the cultural shift enabled by the MAP program[4] - This reorganization is also expected to provide additional operating efficiencies, including reduced overhead, to continue expanding margins[4] Detailed Financial Statements and Reconciliations Consolidated Statements of Income This section provides the unaudited consolidated statements of income for the three months and full year ended May 31, 2025, compared to the same periods in 2024, detailing net sales, costs, expenses, and net income Supplemental Segment Information This section presents a detailed breakdown of financial performance by reportable segment for the fourth quarter and full fiscal year. It includes net sales and a reconciliation from Income Before Income Taxes to EBIT and Adjusted EBIT for each segment, detailing adjustments for MAP initiatives, acquisition costs, and other items Reconciliation of Reported to Adjusted Amounts This section provides a reconciliation of reported GAAP diluted earnings per share (EPS) to adjusted non-GAAP diluted EPS. It quantifies the per-share impact of adjustments such as MAP initiatives, acquisition-related costs, legal contingencies, and tax adjustments Consolidated Balance Sheets This section contains the unaudited consolidated balance sheets as of May 31, 2025, and May 31, 2024, presenting the company's assets, liabilities, and stockholders' equity Consolidated Statements of Cash Flows This section provides the unaudited consolidated statements of cash flows for the fiscal years ended May 31, 2025, and 2024, detailing cash flows from operating, investing, and financing activities