RPM

Image source: The Motley Fool. Tuesday, Oct. 6, 2026 - Vice President Investor Relations and Sustainability-Matthew Schlarb - Chairman and Chief Executive Officer-Frank C. Sullivan - Vice President and Chief Financial Officer-Russell L. Gordon - Vice President, Controller and Chief Accounting Officer-Michael J. Laroche Operator: Good morning, and welcome to the RPM International Fiscal 27 First Quarter Earnings Conference Call. All participants will be in listen-only mode. If you would like to ask a question, please press the star key. Please note this event is being recorded. I would now like to turn the call over to Matthew Schlarb, Vice President Investor Relations and Sustainability. Please go ahead. Matthew Schlarb: Thank you, Gary, and welcome to RPM International's conference call for the fiscal 27 first quarter. Today's call is being recorded. Joining today's call are Frank C. Sullivan, RPM's Chair and CEO Rusty Gordon, Vice President and Chief Financial Officer Michael J. Laroche, Vice President, Controller and Chief Accounting Officer. This call is also being webcast and can be accessed live or replayed on the website at www.rpminc.com. Comments made on this call include looking statements based on current expectations and risks and uncertainties, which could cause actual results to be materially different. For more information on these risks and uncertainties, please see RPM's reports filed with the SEC. During this conference call, references may be made to non GAAP financial measures. To assist you in understanding these non GAAP terms, our team has posted reconciliations to the most comparable GAAP financial measures on the RPM website. Also, note that our comments will be on an as adjusted basis and all comparisons for the first quarter of fiscal 26 unless otherwise indicated. We have provided a supplemental slide presentation to support our comments on the call, It can be accessed in the Presentations and Webcast section of the RPM website www.rpminc.com. Effective 06/01/2026, certain Latin American businesses in the construction products and consumer groups with annual sales of $128 million and $15 million respectively were-- we moved to the performance coatings group. This change has no impact on consolidated results and details of the changes can be found in the Form 8-K filed today. Current and prior year results reflect the updated structure. Now I will turn the call over to Frank. Frank C. Sullivan: Thanks, Matthew. Thanks to everybody on the call this morning. I will begin on Slide 3 with a high level overview of our performance. Mike LaRoche will review the financial results then Matt Schlarb will cover our balance sheet cash flow and discuss some of our successes in the emerging markets. And then Rusty Gordon will finish with our outlook. Our associates delivered record first quarter sales adjusted EBITDA and adjusted EPS despite sluggish end markets and several temporary operating headwinds. These results demonstrate the strength of our balanced business model. Bryan based growth in Performance Coatings Group and Consumer more than offset temporary softness in our Construction Products Group. Additionally, our SG and A optimization actions played a role offsetting raw material inflation and other expenses. Slide 4 illustrates how our SG and A optimization actions helped offset gross margin pressure. As expected, we offset raw material inflation on a dollar basis but gross margins declined 100 basis points as the rate of raw material inflation outpaced pricing MAP benefits in the quarter. Even with that pressure, we compensated for this by leveraging SG and A as a percent of sales to maintain the adjusted EBITDA margin consistent with the prior year quarter. This outcome reflects the benefits of the SG and A focused actions we have implemented across RPM. These savings helped offset the gross margin headwinds while also allowing us to continue investing in growth and serving customers. We are pleased with the organization's cost discipline and the ability to grow in an uncertain economic environment and we continue to expect additional pricing and operational improvements to support margins as we face continued inflationary pressures during the balance of our 2027 fiscal year. Slide 5 highlights emerging markets generating more than 20% revenue growth fueled by demand for engineered solutions for high performance buildings and infrastructure. North America delivered solid growth. Led by strong performance in our Performance Coatings Group and our Consumer businesses. European growth was primarily driven by acquisitions. Our emerging market success was driven by our platform group structure which oversees operations across RPM businesses in these regions. The Platform Group reports as part of our Performance Coatings Group segment but sells products for businesses across all RPM segments. Historically, our decentralized structure limited our ability to fully capitalize on emerging market opportunities. Several years ago, we created the Platform Group to have a more cohesive strategy and operations in Africa, Middle East and the Asia Pacific regions. Following several years of successful growth at the beginning of this fiscal year, we added South American businesses to the platform group as well. The structure has been successful for multiple reasons. First and foremost, because an excellent management team has leveraged assets where it makes sense such as shared manufacturing and distribution facilities while still providing autonomy to local sales teams who understand the markets best. Additionally, businesses across RPM have increased cooperation to provide support to our platform group in areas including brand management, and product development. The Platform Group is an excellent example of the power of RPM in action leveraging our leading products and services alongside the scale of our businesses to drive growth and profitability. The addition of our South American businesses further enhances our ability to capitalize on that scale and accelerate growth in this important region. To summarize the quarter, we made tangible progress on SG and A expense reduction which along with other MAP initiatives and our strategic balance helped us offset higher inflation and temporary market slowdowns in our Construction Products Group We will provide more details on these operational improvements and other aspects of our MAP 2030 at a previously announced Investor Day on November 9 at our Stoneheart facilities in Mapleshade, New Jersey. Scheduled speakers for our Investor Day on November 9 include myself, David C. Dennsteadt, our newly appointed President and Chief Operating Officer Rusty Gordon, RPM's Vice President and Chief Financial Officer and our performing Performance Coatings Group President, Don Harmeyer. If you would like to attend in person, please contact Matthew Schlarb as there is some limited availability. We will also be webcasting the event which will start around noon Eastern Time Details on how to join the event are available on our website. I would now like to turn the call over to Michael J. Laroche to provide more details of our quarter. Michael J. Laroche: Thank you, Frank. Turning to Slide 6. First quarter sales increased to a record led by our Performance Coatings Group and Consumer segments. Which both had solid organic growth. Adjusted EBITDA increased to a record Higher sales and MAP benefits, including SG and A optimization actions, more than offset raw material inflation, warranty expenses and bad debt expense. In non operating expenses, healthcare expenses declined driven by our team's effort to reduce prescription drug costs. Adjusted diluted EPS increased 5.3% to a first quarter record $1.98. Moving to the segment details on Slide 7. CPG sales increased driven by the Kalzip acquisition. Organically, declined reflecting a slowdown in education and healthcare markets which together comprise over 1/4 of CPG's end market exposure. We also experienced finished product shortages caused by the supplier raw material constraints in polyurethanes we called out last quarter. Adjusted EBITDA declined as lower volumes reduced fixed cost absorption while inflation, bad debt and warranty expenses were additional headwinds. SG and A optimization partially offset these items. While the quarter was below our expectations, several of the profitability headwinds were temporary in nature. Turning to Slide 8. The Performance Coatings Group delivered record results with broad based growth led by engineered solutions for high performance buildings, energy and infrastructure projects. Particularly in emerging markets. Food Coatings and Ingredients also contributed to the strong growth Adjusted EBITDA and adjusted EBITDA margin increased to a record as improved fixed cost utilization and SG and A optimization actions more than offset inflation. On Slide 9, consumer sales increased to a record including 5.2% organic growth, Shelf space wins, new products and pricing supported this growth. Both adjusted EBITDA and margin increased during the quarter. Higher volumes improved fixed cost utilization while MAP and SG and A optimization also contributed to increased profitability. Now I will turn the call over to Matthew to discuss the balance sheet and cash flow. Matthew Schlarb: Thank you, Mike. Moving to Slide 10, we generated another quarter of strong cash flow driven by improved profitability and working capital efficiency. Working capital improved 150 basis points compared to the prior year despite the volatile raw material situation. As a result of the strong cash flow generation, returned $90.5 million to shareholders through share repurchases and dividends, an increase of 10.2% year-over-year. Total debt declined $263 million as we used some of this cash flow to repay debt. Looking at our leverage, as you will see in our 10 Q filing later today, it has returned to a similar level to where it was prior to the pink Stuff acquisition in late fiscal 25. Which is the largest acquisition in RPM's history. Subsequently, we have also completed several other acquisitions, including Ready Seal, Kalzip, and PVA-based resin. Most recently, we acquired volteco at the beginning of October. volteco is an Italy based leading supplier of below grade waterproofing solutions used globally in demanding applications. The company generated calendar year 2025 sales of €28 million volteco has joined the Construction Products Group and provides complementary technology their leading waterproofing solutions. Turning to Slide 11. As Frank mentioned, we have taken a more collaborative approach to operating emerging markets with our platform structure. The investments we have made in the region and in our associates there contributed double digit growth in the region for multiple quarters. Similar to other geographies, our solutions are resonating with owners and builders of high performance buildings in these markets. As a reminder, high performance buildings have demanding specifications where the cost of building failure is elevated. With our people, service, engineered solutions, the trust we have built in the marketplace, we have been winning more of these jobs and are optimistic that emerging markets will be a key growth driver for us in the future. Now I will turn the call over to Rusty to cover the outlook. Russell L. Gordon: Thank you, Matthew. Turning to Slide 12, I will provide an update on raw materials before we get to the outlook. Inflation expectations have increased since we held our last earnings call on July 22. As we mentioned in July, there were shortages in polyurethane feedstocks during the first quarter and those became more pronounced than we had expected and negatively impacted sales. Our procurement team quickly secured additional supply to mitigate the impact but at a higher cost that because of FIFO accounting will impact our P&L. Additionally, the sustained rise in oil and other commodity prices over the past couple of months has caused our inflation expectations to increase in other raw material categories. As a result, we now expect second quarter inflation will be in the 9% to 11% range up from our previous estimate of 6% to 8%. For the third quarter, we anticipate inflation will be 7% to 9% as inflation remains widespread but we start to annualize prior year inflation in some raw material categories. We have implemented additional pricing increases across all our segments which will help offset this inflation but it will lead to gross margin pressure for the year. Now moving to the outlook. Our second quarter outlook on Slide 13. We expect consolidated sales to increase in the low to mid single digit range By segment, we expect CPG sales to increase in the low single digit range. PCG in the mid to high single digit range and consumer in the low to mid single digit range. We expect consolidated EBITDA to also increase in the low to mid single digit range. SG and A optimization actions pricing increases and MAP benefits are expected to offset sluggish end markets inflation and start-up costs at new shared facilities. Next, moving to our full year outlook on Slide 14. We are narrowing our fiscal 27 sales growth to mid single digit growth from our previous outlook of 3% to 7%. Adjusted EBITDA is now expected to grow mid single digits compared to a previous outlook of up 5% to 10%. MAP benefits including the previously announced $75 million of SG and A focused savings and incremental pricing are expected to offset persistent inflation which has increased from our previous outlook. Additionally, we will face start up costs at new facilities and more challenging comparisons in the second half of the year. Towards the end of the year, we do expect our CPG segment to return to positive organic growth. That concludes our prepared remarks. We will now be happy to take your questions. Operator: We will now begin the question and answer session. If you are using a speakerphone, please pick up your handset before pressing the keys. Our first question today is from John Ezekiel Roberts with Mizuho. Please go ahead. Analyst: Good morning, John. Frank C. Sullivan: Thank you. John Roberts: Good morning. For the CPG segment, for the healthcare and education market specifically, what is the outlook there? I think Rusty just said we expect CPG to be positive by the May quarter. We expect education and healthcare as well? Or are we just going to offset continued headwinds there? Frank C. Sullivan: I think we will see a rebound in both of those areas in the school system area, it is a slowdown in part driven by funding at local levels and state levels and we are starting to see some of that free up. But given the nature of our Tremco roofing business in particular where it is most acute, If we do not see it this fall, it really will not show up in terms of activity until the spring of next year. And in the healthcare sector, we think it is a temporary slowdown But again, in both instances, we would expect to see improved results and improved activity in the second half of the year that is why we have addressed a reduction in our outlook for Q2. And then customer bankruptcies popped up a couple of times now in recent quarters with the higher interest rates and weak end markets Are you increasing your provisions in your guidance? Our provisions are appropriate. A prior bankruptcy was related to a retailer that was serving our industrial coatings group And in this case, we actually took a charge for a defense project that we are on, and it was a defense contractor that declared bankruptcy. We wrote off the receivables, but believe that we will have an opportunity to recover a significant amount of that given the nature of the project. Thank you. Operator: The next question is from John McNulty with BMO Capital Markets. Please go ahead. Analyst: Good morning, Good morning, John. Frank C. Sullivan: Good morning, Frank. John McNulty: Thanks for taking my question. So I guess maybe just to flush out the CPG side a little bit more. So, I guess, can you help us to think about how much of the weakness was tied to the education and healthcare side versus the product shortages due to some of the supplier raw material challenges. And how quickly or are we through the supplier raw material challenges or do they drag on for another quarter or so? Sure. The polyol issue negatively impacted the Construction Products Group in both our sealants business and roofing business as it relates to urethanes and coatings, and we are 1 of the leaders in roof restoration coatings So it was a drag to sales The shortage issue is now behind us in terms of production, but we are catching up on inventory in Q2. We still have some work to do and it is part of our understanding as to how things will recover. Some of this is work we have to catch up on, on a backlog of projects that we could not fulfill because of raw material shortages. On the weakness in education, and healthcare markets, Some of that is just a shrinking backlog again principally in roofing and our WTI contracting business. And we are seeing efforts to rebuild that and they are moving, in the right direction. I think sequentially you will see an improvement in Q2 over Q1 in our Construction Products Group. But again, this the seasonal nature of our roofing business, That rebuilding backlog will impact our second half of the year and really the spring months, so the end of Q3 and into Q4. Okay. Okay. Fair enough. And then maybe more positively on consumer side. Saw nice lift in terms of organic sales. I guess, you help us to think about how much of that was volume driven? It seems like that business has been struggling for now really a number of years to drive growth. And it seems like you may be turning the corner. I guess I am trying to understand if it is any real true end market demand or if it is more about the shelf space that picking up and maybe some of the new business wins. Can you help us to think about that and unpack it a bit? Frank C. Sullivan: Sure. I will provide a couple of high-level comments and then turn it over to Matthew Schlarb for some more detail. So at a high level, the underlying dynamics quite candidly are not getting better consumer takeaway and foot traffic in major retail customers of ours is still sluggish. The housing market and housing turnover is not getting better and with rising interest rates, we do not expect to see that. We had positive unit volume growth and positive organic growth in consumer for the first time in a number of quarters. And it is really related to 2 areas. Mark share gains and some new placements and after a slow start improving results in the pink stuff and our cleaner category. Matthew, you want to add some color to that? Matthew Schlarb: Yes. Like Frank said, the pink stuff is nice to see some positive momentum there as last quarter we talked about they had experienced slowdowns. We have also had some wins in abrasives that is the business we acquired a few years ago. The Ready Seal, that is the exterior wood stains business has performed really well since we acquired it. Another category we have had some wins is in primers. Whether we have taken some shelf space and had some additional pickup at stores through that. So it is a combination of all these different wins that you add them up, and it helps to offset some of the soft economic backdrop that Frank talked about. Frank C. Sullivan: So those new placements, whether it is in abrasives where we are doing really well in retail automotive. Some shelf space and quite candidly, just expansion of our Zinsser primer given some dynamic shifts in the customer base continue in Q2. And it is nice to see our consumer business beginning albeit modestly to building some positive momentum after tough couple of years. Great. Thanks very much for the color. Thanks, John. Operator: The next question is from David Begleiter with Deutsche Bank. Please go ahead. Analyst: Thank you. Frank C. Sullivan: Good morning. Analyst: Hi, David. David Begleiter: Frank, on the full year guidance, I believe you lowered it by roughly $25 million at the midpoint. Can you just break that down, what the components of that reduction for the full year guide? Frank C. Sullivan: So it is a little bit of a swag in the sense I think we have some good visibility into Q2. But we are making some assumptions about, as Rusty highlighted, inflation beginning to trend downward but still be at a higher level than we just a few months ago as we get into the spring. And it is really a bet on when we will see a recovery in our Construction Products Group and Tramco Roofing. So those are the dynamics there and given costs, given inflation and how energy costs have now melded its way into materials Also, freight is up meaningfully. Whether it is truck transport ocean going, And so we are instituting some freight surcharges across a number of our businesses along with price increases. So it is a pretty dynamic market. I think that is the best we have for you in terms of how we develop the full year guidance. Got it. And just on Q2, the price cost differential given the increase in inflation assumptions, I presume you are expecting pricing to lag costs on a dollar basis in Q2. Is that accurate? So we have covered dollar for dollar inflation in Q1 and we will probably do a little bit better in Q2. As Rusty mentioned, given FIFO accounting for RPM, you typically see a lag in our reported results between inventory and how it flows through our P&L. I will remind folks that when we went through the last part of inflation, our gross margins from start to finish improved. And I would expect the same thing as we go through this side of inflation which to the extent that it is related to disruption in The Middle East any stability there and a return to moderate inflation will allow us to see margin improvement once again. it is interesting, we saw little or no inflation for 6-month period from the end of calendar 25 through the late spring of 26. And even some reduction raw materials. We were not planning on price increases and we have adjusted pretty quickly I think we and others have learned how to adjust in this volatile market. Thank you. Operator: The next question is from Matthew DeYoe with Bank of America. Please go ahead. Analyst: Good morning. Frank C. Sullivan: Morning. Matthew: Aleksey Yefremov on for Matthew. My question is on the warranty charge. Can you provide more color on that? If we expect to see that going forward or additional charges? Thank you. Frank C. Sullivan: Sure. that is related to a specific business unit of the Construction Products Group in Europe. And that is a an element of a likely closure of that business unit the details of which we will provide at the investor day. We are looking across our portfolio and either product lines or business units that are underperforming and from a margin goal perspective not likely to meet our goals. Taking a hard look at a number of fix or exit items and that falls in that category. So it is unique to that business unit and we do not anticipate further warranty issues there. Operator: The next question is from Patrick Cunningham with Citi. Please go ahead. Analyst: Hi, good morning. Frank C. Sullivan: This morning. Analyst: This is Alex on for Patrick. Patrick Cunningham: In Consumer Group, maybe I was hoping you could kind of share some of the growth in Q1. What were some of like the new product introductions And were there any kind of share wins in the business If you could kind of help us understand the consumer segment. And I know it is a small part of your overall sales, but maybe on a high level, could you also kind help us understand what you saw in Europe Thank you. Frank C. Sullivan: Sure. European sales growth is primarily driven by acquisition activity. Economic dynamics there are not really strong. We are continuing to see profitability improvement there driven by internal actions consolidation across distribution, different administrative areas, So that is what is happening in Europe. I will let Matthew repeat what he commented on a few minutes ago We have had a number of shelf space gains, market share gains, and new product introductions in consumer. Which were commented on by an earlier question. Matthew Schlarb: Yes. And I will just add on to that. In addition, some of the product wins that I mentioned we are winning in different sales channels. Places like grocery stores, we have had wins, digital online distribution, that is another place where we have seen good growth. So it is a combination of both new products plus these different sales channels where we are having nice growth. Operator: The next question is from Ghansham Panjabi with Baird. Please go ahead. Analyst: Good morning, everybody. Frank C. Sullivan: Good morning, Frank. Ghansham Panjabi: Frank, just kind of stepping back a little bit since you last reported, obviously interest rates are up quite a bit and oil has flared up again along with raw materials as commented on before. Do you sense any sort of change as it relates to underlying demand? As it relates to conversations with your customers, as it relates to the outlook, etcetera? It does not look like you have seen it so far, but of course, there is lagged impacts from some of these dynamics I just touched on. Sure. Appreciate the question. Long term, not really. You see strength in our PCG business group. And we are still seeing good work in tech. Good work in onshoring and manufacturing. Still benefiting from data center build out. And within our construction products group, the 1 real bright star there is Euclid for all the same reasons. We believe that the slowdown in schools is temporary and really related to funding issues again, at the local and state level. Probably to be freed up once we get through this election cycle. And the hospital situation also we believe is temporary. We have some work to do to rebuild the WTI backlog, which is happening. But as I commented earlier, big picture, I think the trends are good. Specific to RPM. We will not see a return in those businesses to the type of industry beating and peer outperforming performance that our CPG unit delivered for like the last 8 quarters. Until we get in the spring So we see a return to that. But again, part of it is where we are in the seasonal cycle and just being candid about when people can expect to see us get back to the type of top line performance CPG Group has been delivering. Okay. Perfect. Thanks for that. And then for the consumer business, the first quarter, call it, 5% or so sales growth, you called out shelf space wins and new product introductions, etcetera. As it relates to the growth guidance for 2Q for the segment of low to mid single digits, is the difference between the 2 just the new products and the shelf space wins, or am I reading too much into it because it is a broad range? Frank C. Sullivan: No. it is new product and shelf space wins. it is an improvement in the pink stuff and the clearest category, which has been separated as its own business unit within consumer. And so that is nice to see. And you know, it is it is a it is self help and really a lot of good work by our consumer group associates because the underlying dynamics in terms of consumer takeaway, foot traffic, housing prices driven, you know, by interest rates, and housing turnover. We do not see any signs that is improving. And so you can see decent Results, and you will see them again in Q2. The whole industry and our whole peer set will be a happier place when the housing turnover starts to perk up and foot traffic starts to pick up a little bit. You know, would remind you that housing turnover is at a 40-year low. And with rising interest rates and mortgage rates, that is not gonna get better until things improve in that realm. Okay. Perfect. Thank you, Frank. Thanks. Operator: The next question is from Frank Mitsch with Fermium Research. Please go ahead. Analyst: Good morning, Frank. Frank Mitsch: Hey, good morning, Frank, and I wish your team good luck this Sunday, but we both know I do not mean that. Apologies. When I you and I need a, Fermium RPM swag bed on the Jets Browns this weekend. That can be arranged. I will have to run it by the board of directors but we will we will come back. Apologies if I missed it, but what was price versus volume for the company and then consumer in the first quarter? Russell L. Gordon: So typically, you know, they have not provided price on a segment basis. But you are looking at price on a consolidated basis up about 2% across RPM. And unit volume up decently, you know, low to mid single digits in consumer and PCG And as indicated by our results, and particularly specific to Tremco Roofing and WTI, for the first time in a couple of years, modestly negative in the Construction Products Group. Frank Mitsch: Terrific. Very helpful. And this is the second quarter that your buybacks exceeded $20 million per quarter. Obviously, with the shares trading where they are, are should investors think about the pace of buybacks from RPM? Frank C. Sullivan: The pace of buybacks at RPM will continue. Our Board has authorized a larger share repurchase. And given where our stock price is, I certainly would expect us to see a continuation of current levels, if not higher. Terrific. Thanks so much. Operator: Thank you. The next question is from Josh Spector with UBS. Please go ahead. Analyst: Good morning, Josh. Frank C. Sullivan: Hey. Hey, good morning. Josh Spector: I wanted to follow-up just on price and kind of think about the cadence here. I mean 2 things here is 1, it seemed like last quarter you guys were about pricing around 2%. Accelerated much sequentially, at least on a year over year basis. Are you having any trouble getting pricing in any of the other segments versus what you expected? And how would you expect that to ramp over the next couple of quarters? Frank C. Sullivan: Sure. So I would expect price in Q2 to be somewhere in the 2.5% to 3.5% range. And the other area where we will recover margin is surcharges around freight. that is 1 of the larger inflationary issues that is impacting businesses today. We had announced price increases in consumer that have gone into effect at the end of Q1 and in the beginning of Q2. And we are in the process of initiating new price increases across most of our construction products group and performance coatings group businesses here in Q2. Josh Spector: Okay. Thanks. I guess what I am struggling with a little bit is that if CPG volumes are only down modestly, would mean that pricing in CPG is pretty weak. I think if pricing was similar to the group, it would be down closer to mid single digits. So I guess specifically there, is there anything you would comment to help clarify any of that? And just margins looking at November quarter, would you expect them to be down much less than the 200-basis-points-plus you saw in the first quarter? Frank C. Sullivan: Yes. Some of that is absorption in plants Some of that is some continued excess costs as we do the final stages transitioning out of what was the largest CPG facility in Toronto into mostly a Georgia plant. And so those are some of the extra headwinds. But again, we covered dollar for dollar inflation. We expect to do modestly better than that. And we will begin gaining on not just recovering inflationary cost but regaining margin as we roll through the year. Okay. Thank you. Operator: The next question is from Abigail Eberts with Wells Fargo. Please go ahead. Analyst: Good morning. Frank C. Sullivan: Good morning. Abigail: Thanks for taking my question. Following up on your assumptions for raw material costs, underpinning that, what are your assumptions for when the conflict in The Middle East resolves? Because it looks like you have costs, decelerating through the year. I know part of that is in the polyol issue getting resolved and comparisons versus the prior year. But are you assuming that the conflict deescalates later on in the year? Not at this point in time. Again, anticipating even in the second half of the year inflation that is in the high single digits is not something that we saw on our radar screen 2 or 3 months ago. Certainly, there is a meaningful stability in The Middle East in the coming months or after the election. And oil prices respond accordingly. I would expect us to get back to lower inflationary periods. As I indicated earlier in the call, we saw for a 6-month period little or no inflation in our core raw materials some declines in certain chemical more commodity chemicals, stability and freight costs. We were not planning additional price increases in the spring and that changed pretty dramatically. Because of geopolitical events that you are referencing. So, we are not anticipating any good news there and I think as the markets have indicated, if there is any stability and or agreements that the markets believe will be sustained, You will see a corresponding response in oil prices, which first and foremost should positively impact freight and transportation costs. And then get our raw material costs back down. that is not cavalier, 2 dynamics here are oil prices and energy costs and how they have translated now through supply chains, but also demand. Which still is not real robust. And so a sustained relief in energy prices and oil prices will either pick up business demand or will drive down raw material costs given the lack demand that we saw this spring. Got it. Thank you. And then just on consumer, do not worry, no question about shelf space wins. you mentioned. Yeah. But you have mentioned the consumer trading down in terms of product. Does that lead you to be concerned about your ability to push price increases at all? Frank C. Sullivan: No. We have been selective in price increase where we can. And I appreciate your reference to past calls about consumer price elasticity. I can tell you a good example would be the 5-in-1 very unique patented spray nozzle that allows 5 different spray patterns to come out of a spray can. And what we learned is, on the shelf to the general public, was too high priced. We are picking up really nice shelf space and market share gains in automotive And what we have discovered is the automotive touch up paint spray paint user really values the different spray patterns there. So we are learning across all of our businesses. Really, from a value perspective where our premium products and our value added products are appreciated and where they will be purchased and where we can gain price. And across all our businesses, just like in this example, we are also learning where there is price elasticity and where higher premium prices are not gonna be successful. So I suspect most businesses are getting more sophisticated as we keep dealing with the volatility in these markets and that is certainly been true of our consumer group and as part of their success now. And so you are seeing a product category that is growing very nicely at a premium price because they found the people that value it. Got it. Thanks for the color. Thank you. Operator: The next question is from Michael Harrison with Seaport Research Partners. Please go ahead. Analyst: Hi, Mike. Frank C. Sullivan: Good morning. Michael Harrison: I was hoping, Frank, that you could talk a little bit more about the emerging market success that you have seen, not just in this quarter, though it was very pronounced this quarter, but seems like there is some momentum building and maybe some sustainable improvement here. So maybe some color on what you are seeing there. And I am curious does the success that you are seeing in emerging markets mean that it might make more sense for you to look at acquisitions or other means to get bigger in those markets now that you seem to kind of solve the equation? Frank C. Sullivan: Sure. I really appreciate the question, Mike. And so the answer is yes to your second question. I think we have a leadership team and organizational structure approach that will give us more confidence to pursue acquisition opportunities successfully in these emerging markets. I will give you the high level here, which is I think really tells you about the trajectory. As recently as 5 years ago, the Southern Hemisphere developing world was slightly less than 5% of our consolidated sales. In the first quarter, it was 8%. And you will see that continuing to grow You know, we have been growing for, almost 2 years at a high double digit rate, both in sales and earnings. So you are seeing improved cash flow improved margin profile, and really good acceleration. So we have got great brands across RPM particularly in our industrial businesses, but we just were not organized in a manner that worked in these developing countries. This RPM platform approach basically a leadership team in the region is responsible for manufacturing distribution and administration across the entirety of RPM products sold in that region. And with the help from the primary brand owner businesses, and that RPM entrepreneurial approach to customers in terms of independent sales and marketing is really paying off. And we expect that to continue for a lot of years And I appreciate your insight You should expect to see not large but more successful additions to growth through acquisitions. We have got a lot more confidence in our ability to integrate them and make them work than we had few years ago. Michael Harrison: And then I was hoping if you give some updated thoughts on just the operational front. It sounds like maybe we are still seeing some lingering impact from consolidation and start up costs and maybe some temporary inefficiencies in your manufacturing costs. Any thoughts on the timing of when we see some of those inefficiencies turn into benefits and start to see that flow flowing through the P and L? Operator: Well, I will give you 2 quick comments Number 1, we will provide more detail on your question at our Investor Day on November 9. Frank C. Sullivan: So we can do so in a way we are not prepared to now. We are specificity about when you will see the benefits of the consolidated distribution in Europe, when we will get the transition behind us in CPG, So we will have that detailed by November 9. Other thing I would point to and Matt Schlarb highlighted this in his comments we are continuing to improve working capital efficiency. And that is good RPM map focused benefits on the factory floor and there is more to do there We provide more details at our investor deck On our investor day, you are gonna see the same type of detail that we have provided in our last map initiatives. You are gonna see a wage plan focused on efficiency, and operating improvements. Going to see goals on growth I would take the wage plan to the bank because we have shown 2 of those and we have made them happen. We need to prove to the market that we can hit our growth goals and really talk about the new initiatives that allow us to do that. So we are pretty excited about November 9. You will also see our Stoneheart operation in Maple Shade, New Jersey I would bet it is 1 of the most productive plants in the whole industry. So we will look forward to showing that off as well. Alright. Looking forward to that. Thanks. Thanks, Mike. Operator: The next question comes from Aleksey Yefremov with KeyBanc Capital Markets. Please go ahead. Analyst: Good morning. Hello. Good morning. Salvator Tiano: Was just wondering here, given the spike in interest rates, especially in the past month or so, has your view on what leverage is appropriate for RPM or what you can do in terms of buybacks or M and A change recently? Or for now, everything's staying the same? Frank C. Sullivan: Sure. So we have always operated with a goal of maintaining an investment grade rating. We are middle BBB rated today. We have about $1 billion in liquidity between cash and unused committed credit. I think we could use up the entirety of that $1 billion and then some and still maintain an investment grade rating. Our debt to EBITDA has while maintaining that low investment grade rating, been at or above 3.0 And today, we are meaningfully below 2.0. So we have got a lot of room in our balance sheet. We see, opportunities. They tend to be small to medium sized deals in M and A. And as I commented earlier, given weakness across number of our industry peers and certainly in RPM and stock price. We have ample dry powder to repurchase shares on a opportunistic basis. Salvator Tiano: Perfect. And, you know, besides, mostly, we in the RPM stock price, wonder if we are seeing or you are seeing perhaps some stress within smaller competitors that potentially could make other deals more attractive going forward. Frank C. Sullivan: I think the biggest thing that is making deals more attractive in this environment is a combination of slow growth and higher interest rates and PE that was very aggressive across industries, but in our space as well. Let's say, 5 or 7 years ago, And there are 2 factors there. They are sitting on a lot of properties that are underwater because of economic dynamics that I just referenced. But more importantly, they are not in the market with crazy multiples. You know, there were instances in the last 5 years when let's say, 4 or 5 years ago, when there was a property there and the fourth, fifth, and sixth buyers are big strategic public companies and the first, second and third buyers are PEs. that is over. And so, you are seeing multiples in the M and A environment down by 2 or 3 points my opinion, principally because PE is not as competitive a factor in m and a activity today that they were, let's say, 5 years ago. Perfect. Thank you very much. Thank you. Operator: The next question is from Kevin McCarthy with Vertical Research. Please go ahead. Analyst: Good morning, Good morning, everyone. Frank C. Sullivan: Good morning, Frank. Kevin McCarthy: Was the month of September notably better or worse than you might have anticipated across any of your major business lines? We will give you the month of September and/or it in conjunction with November when we report our second quarter. Frank C. Sullivan: Other than to say, from an outlook perspective, nothing's really changed. And I think somebody had commented earlier that good indicator of what our second quarter will be is kind of what our first quarter is. We expect really good strength in PCG. Continued stability and benefits from some market share gains and shelf space gains in consumer and a sequentially better but still less than what we have been delivering on in the construction products group. Kevin McCarthy: Okay. Fair enough. And then if I may ask a broad question. It strikes me that your Performance Coatings results were quite strong. Whereas we have spent a lot of time on the call talking about maybe some volume pressure and other issues in construction products If you compare and contrast those segments, Frank, what accounts for such a large difference here? Is it Is it the notion that the healthcare and education customers and CPG are not linked to industrial production. So the IP side is running stronger than maybe some more GDP oriented businesses? Or have you seen this kind of divergence in the past? Curious to hear your thoughts along those lines. Frank C. Sullivan: Sure. I think there is 2 primary reasons. Good question. 1, the performance coatings group is more driven by industrial capital spending So manufacturing, onshoring, the data center activity, But also importantly, the Performance Coatings Group is where our platform approach is housed. And so that is also adding to the strength of the performance Coatings Group numbers. And we as I said, we expect that to continue. Construction Products Group, quite candidly has had extraordinary 2 years of performance given the underlying dynamics of commercial construction activity. And so it is disappointing to see a quarterly slowdown We believe it is temporary for this in the second quarter. But the underlying dynamics there in commercial construction and broad construction activity have not been great. And that more heavily impacts our CPG versus the industrial capital spending and more broadly international presence of the Performance Coatings Group. Thank you very much. Operator: The next question is from Arun Viswanathan with RBC Capital Markets. Please go ahead. Analyst: Good morning, Arun. Frank C. Sullivan: Good morning, Frank. Arun Viswanathan: Thanks for taking my question. I hope you guys are well. Just wanted to get your thoughts on margins. It looks like there is potentially some extra raw material pressure kind of flowing through. So how do you expect that to kind of evolve over the next few quarters And do you expect to be successful on some pass through price? And, I guess, maybe if you can just elaborate on that by segment, that would be helpful. Thanks. Frank C. Sullivan: Sure. I think the as we commented earlier, we were successful in passing on the dollar impact of inflation and that will continue. We will be gaining on margin improvement as we sequentially go through the year. And then as we have done in the past, it is my expectation that we will recover 100% of any loss margin and maybe a little bit more The 1 area where that will not be true in freight surcharges. So, we are passing on dollar for dollar freight surcharges in many of our businesses to customers. And as those freight costs come down back to normal levels, then if and when we resend those temporary surcharges, that is literally just covering your dollar expense. But we will pick up margin there too just based on the impact of the higher sales on a lower expense base. Okay, thanks. Arun Viswanathan: And maybe as a follow-up I can just ask this is a slightly different way, but I think in the past you had talked about 16% EBIT margins which would be kind of 200 basis points or more at this point. Recovery. And getting to that point kind of on a structural basis, maybe through some of the MAP actions. Is that still kind of in your line of sight Maybe you can kind of think about how you are thinking about longer term margin recovery and ultimately growth. Thanks. Frank C. Sullivan: So 2 quick comments on that. Number 1 is we, had set out a goal of 42% gross margins and a 26% SG&A on a consolidated basis. We were close to the 42% gross margins and had line of sight to achieving that. And then here we are in another round of inflationary pressures I am highly confident as we get through this inflation cycle, we will meet or beat that 42% goal. We struggled for both some cost reasons and lack of revenue growth, so leverage in the top line on our SG and A goals. We took a very aggressive crack at that with a $100 million expense reduction program that was initiated in January of last year. So in the grand scheme of things, those previously announced goals were still in play. On November 9, you will see some pretty good detail of our expectations of our margin goals cash flow goals, profitability, and what we think we can do revenue wise out to 2030. So, I would encourage you to attend our November 9 investor day, which is gonna be in Naples. Mapleshade, New Jersey right out outside of Philadelphia. So 20 minutes from the airport or a easy ride from New York. And that will also be webcast. Great. Thanks a lot. Thank you. Operator: The next question is from Jeff Zekauskas with JPMorgan. Please go ahead. Analyst: Good morning, Jeff. Hi. Frank C. Sullivan: Good morning, Frank. You guys did a very nice job of growing your cash flow from operations year over year. As well as your EBITDA? Should you be able to do that in 2027 that is do you think your cash flow from operations will grow versus 2026? Russell L. Gordon: Yes. Frank C. Sullivan: And it will be a result of continued improvement in working capital, which we are very focused on. An expectation albeit at a lower rate of continued positive momentum in earnings growth as we get through the year. And it is an area again that we will highlight in a little bit more detail at our November 9 Investor Day. Jeff Zekauskas: Thanks for that. And can you give us a little bit of quantification around your expected decreases in medical costs? And in that, what were they roughly last year? What could they be this year? And is it your general expectation that SG and A expense this year over year should be pretty flat last year? Frank C. Sullivan: So I think a couple of things. 1 year over year, you will see an improvement in corporate expense. We had huge increases last year in healthcare expense, which we talked about quarter by quarter. I do not have off the top of my head the exact number. We can get that communicate that in follow-up calls. But we are seeing a flattening out of those healthcare costs versus where we were last year. And so corporate other expense will be equal to or slightly down each quarter as we get through the year. And so, that is a positive element. Then the second part of your question, Jeff, was I think you captured it. You know, with medical expenses and flattening out of s g and a. Thank you. Yes. You will see that. Yes. Thank you. Operator: The next question is from Vincent Andrews with Morgan Stanley. Please go ahead. Analyst: Good morning, Vincent. Vincent Andrews: Thank you. Good morning, Frank and everyone. Just had 1 last question on the healthcare and education. I just wanted to better understand, is this a few projects? Is this a lot of projects? Is it concentrated in certain states or regions? Was it in the backlog and it is just been delayed? Or was stuff you thought you were gonna win and put in the backlog that just the timing of it has become uncertain? Just trying to get a better sense of sort of the visibility you have on it returning later in the year. And just, you know, is it is it waiting on municipal funding or something else that is just sort of technical? So any further color you could provide there, I would appreciate it. Frank C. Sullivan: Sure. The simple answer is yes to all of the above. And so without providing any competitive detail, there are some specific regions. And in this case, a lot of it states. So for instance, there are some specific states where we have really good market share education. And there has been delayed funding. And so we are specified on projects and the funding has been delayed. And we are at the point where it did not happen in the summer. And if it does not get initiated now, it is a spring project. Just nature of the beast. And so in some cases, there are very specific in this case, state level projects that we know we will have but they have been delayed. In other cases, it is the lack of big, projects that we had last year and into the spring. That were that are not repeating. And so the normal cadence of our average activity is fine. it is the mismatch of some larger projects that quite candidly we need to be rebuilding in our WTI, which is our contracting arm back backlog. Okay. Thanks for all the detail. I appreciate it. Thank you. Operator: The next question is from Eric Boyes with Evercore. Please go ahead. Analyst: Good morning. Good morning and thanks. Eric Boyes: Maybe first how repeatable is PCG's growth into fiscal 2Q in the second half? I mean, relative to 1Q's double digit growth, does mid to high single digits, is that tougher comps or project timing or seasonality or just kind of margin of safety? Thanks. Frank C. Sullivan: Sure. In both our PCG and CPG, every quarter is a tougher comp because we have been generating pretty solid results in each of those segments for the last couple of years. But as indicated earlier, the same dynamics that drove results in Q1 seem to be continuing in Q2. So you will see solid results in our Performance Coatings Group both driven by the dynamics in our core North American and European markets. And continued outsized growth from the platform Southern Hemisphere business activity. Okay. Eric Boyes: Great. Appreciate that. And then I just wanted to clarify margins again. On gross margin specifically, with inflation kind of trending downward, and some of your agility on pricing. Could we potentially see year over year gross margins positive again? And fiscal 3Q? And then think it is a little bit a tougher comp in fiscal 4Q, but any color on kind of that gross margin cadence based on what you see today would be appreciated. Thank you. Frank C. Sullivan: Certainly. Thank you. I think we will start to see some improvement in margin as we get through the year. And anticipating a decline in inflation at some point, whether it is next spring or a year from now, as we have done in the past, we will recover the loss margin and probably then some So as I commented earlier, 42% gross margins were in our line of sight excitedly because we have been talking about them for a few years. And when we get through this margin cycle, we will be at or above that level. Operator: This concludes our question-and-answer session. I would like to turn the conference back over to Frank C. Sullivan for any closing remarks. Frank C. Sullivan: Thank you to everybody who participated in our investor call this morning. We are pleased with our first quarter results and the execution of our associates and what continues to be a volatile environment, Our focus remains on serving customers investing in differentiated growth opportunities and advancing our operational improvements that support stronger profitability and improved cash flow. We will be excited to see many of you at our November 9 Investor Day in Mapleshade, New Jersey outside of Philadelphia. We will also be hosting virtually the RPM annual meeting of Stockholders tomorrow at 01:30 p.m. Eastern Time would welcome you to participate in that as well. It is highly likely that at a board meeting in front of our annual meeting of stockholders, RPM will be announcing the details of our 53rd consecutive increase in cash dividends. Greatly appreciate your participation in our call today and look forward to having many of you on our Thursday 01:30 p.m. Annual Meeting of Stockholders. Have a great day and go Browns. Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect. Before you buy stock in RPM International, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and RPM International wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $370,440!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,470,022!* Now, it's worth noting Stock Advisor's total average return is 955% — a market-crushing outperformance compared to 215% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of October 7, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool recommends RPM International. The Motley Fool has a disclosure policy. RPM (RPM) Q1 2027 Earnings Call Transcript was originally published by The Motley Fool

- Record first-quarter sales of $2.22 billion increased 4.8% compared to the prior year - Net income of $256.4 million and diluted EPS of $2.01 - Record adjusted diluted EPS of $1.98 increased 5.3% and record adjusted EBITDA of $405.5 million increased 4.5% compared to the prior year - Fiscal 2027 second-quarter outlook projects sales and adjusted EBITDA to increase in the low- to mid-single-digit range - Fiscal 2027 full-year outlook projects sales and adjusted EBITDA to increase in the mid-single-digit range MEDINA, Ohio, October 06, 2026--(BUSINESS WIRE)--RPM International Inc. (NYSE: RPM), a world leader in specialty coatings, sealants and building materials, today reported financial results for its fiscal 2027 first quarter ended August 31, 2026. Frank C. Sullivan, RPM Chairman and CEO, said, "The resilience of our associates and business model was on full display in the first quarter as we generated another quarter of record sales and adjusted EBITDA. Solid organic growth in our Performance Coatings Group and Consumer Group, and a focus on manufacturing, procurement and SG&A efficiencies overcame multiple challenges, including raw material inflation and a temporary slowdown in our Construction Products Group. This record profitability, combined with improved working capital efficiency, also allowed us to generate another quarter of strong operating cash flow, which we are using to invest in growth opportunities and reward shareholders with dividends and share repurchases." First-Quarter 2027 Consolidated Results Organization and Reporting Update Effective June 1, 2026, the company modified its organizational structure to manage and report certain businesses in Latin America in PCG. The businesses generate approximately $143 million in annual revenue and were previously part of CPG and Consumer Group. Starting with the first fiscal quarter of 2027, results reflect the updated structure for both current and prior periods presented. These changes have no impact on consolidated results. Recast quarterly results for fiscal year 2026 reflecting this change have been provided in a Form 8-K filed with the SEC. Consolidated | | | | | | | Three Months Ended | | | $ in 000s except per share data | August 31, | | August 31, | | | | | 2026 | | | 2025 | | $ Change | % Change Net Sales | $ | 2,215,593 | | $ | 2,113,743 | | $ | 101,850 | 4.8 | % Net Income Attributable to RPM Stockholders | | 256,357 | | | 227,605 | | | 28,752 | 12.6 | % Diluted EPS | | 2.01 | | | 1.77 | | | 0.24 | 13.6 | % Income Before Income Taxes (IBT) | | 337,053 | | | 298,047 | | | 39,006 | 13.1 | % Adjusted EBITDA (1) | | 405,457 | | | 388,048 | | | 17,409 | 4.5 | % Adjusted Diluted EPS(1) | | 1.98 | | | 1.88 | | | 0.10 | 5.3 | % | | | | | | (1) Excludes certain items that are not indicative of RPM's ongoing operations. See tables below titled Supplemental Segment Information and Reconciliation of Reported to Adjusted Amounts for details. Record first-quarter sales were driven by solid organic growth in the PCG and Consumer segments, including pricing to offset inflation. Acquisitions also contributed to the growth. Geographically, all emerging market regions generated revenue increases above 20%, fueled by strong demand for engineered solutions used in high-performance buildings and infrastructure projects and the continued expansion of RPM's Platform model, which leverages shared regional resources to accelerate growth and improve efficiency. North American growth was driven by PCG and Consumer improvement. Growth in Europe was driven by acquisitions. Sales included 3.1% organic growth, 1.6% growth from acquisitions net of divestitures, and a 0.1% tailwind from foreign currency translation. Adjusted EBITDA increased to a record, driven by higher sales and MAP operational improvement initiatives, including SG&A optimization. Healthcare expenses were lower compared to the prior year, driven by procurement efforts to lower prescription drug costs. These gains more than offset higher raw material inflation, warranty expenses from a small European business that is under review for closure, and bad debt expense from a customer bankruptcy. Record adjusted diluted EPS was primarily driven by improved adjusted EBITDA. First-Quarter 2027 Segment Sales and Earnings Construction Products Group | | | | | | | Three Months Ended | | | $ in 000s | August 31, | | August 31, | | | | | 2026 | | | 2025 | | $ Change | % Change Net Sales | $ | 859,209 | | $ | 851,997 | | $ | 7,212 | | 0.8 | % Income Before Income Taxes | | 149,110 | | | 159,184 | | | (10,074 | ) | (6.3 | %) Adjusted EBITDA(1) | | 166,193 | | | 183,944 | | | (17,751 | ) | (9.7 | %) | | | | | | (1) Excludes certain items that are not indicative of RPM's ongoing operations. See table below titled Supplemental Segment Information for details. Lower than expected CPG sales growth was driven by delayed sales resulting from a slowdown in the healthcare and education markets, as well as supplier raw material availability issues affecting certain products. The Kalzip acquisition and pricing actions in response to inflation offset these headwinds. Sales included a 1.7% organic decline and 2.5% growth from acquisitions net of divestitures. Adjusted EBITDA declined due to lower fixed-cost absorption from reduced volumes, raw material inflation driven by supply shortages, a $4.4 million increase in bad debt expense related to a customer bankruptcy, and a $6.3 million warranty charge at a small European business under review for closure. SG&A optimization initiatives partially offset these headwinds. Performance Coatings Group | | | | | | | Three Months Ended | | | $ in 000s | August 31, | | August 31, | | | | | 2026 | | | 2025 | | $ Change | % Change Net Sales | $ | 629,650 | | $ | 571,593 | | $ | 58,057 | 10.2 | % Income Before Income Taxes | | 107,302 | | | 86,795 | | | 20,507 | 23.6 | % Adjusted EBITDA(1) | | 121,073 | | | 102,416 | | | 18,657 | 18.2 | % | | | | | | (1) Excludes certain items that are not indicative of RPM's ongoing operations. See table below titled Supplemental Segment Information for details. Record PCG sales were driven by broad-based growth, with particular strength in engineered solutions for high-performance buildings, energy and infrastructure projects including in emerging markets, and food coatings and ingredients. Pricing to offset inflation also contributed to sales growth. Sales included 7.9% organic growth, a 1.8% increase from acquisitions, and a 0.5% benefit from foreign currency translation. Record adjusted EBITDA was driven by improved sales, higher volumes resulting in improved fixed-cost leverage, and SG&A-focused optimization actions, partially offset by higher raw material inflation. Consumer Group | | | | | | | Three Months Ended | | | $ in 000s | August 31, | | August 31, | | | | | 2026 | | | 2025 | | $ Change | % Change Net Sales | $ | 726,734 | | $ | 690,153 | | $ | 36,581 | 5.3 | % Income Before Income Taxes | | 132,279 | | | 108,837 | | | 23,442 | 21.5 | % Adjusted EBITDA(1) | | 146,576 | | | 138,968 | | | 7,608 | 5.5 | % | | | | | | (1) Excludes certain items that are not indicative of RPM's ongoing operations. See table below titled Supplemental Segment Information for details. The Consumer Group's record sales were driven by solid growth across all businesses and were aided by shelf space wins, new product introductions and pricing to offset inflation, which was higher in the quarter. Sales included 5.2% organic growth, 0.3% growth from acquisitions, and a 0.2% headwind from foreign currency translation. The increase in adjusted EBITDA was driven by sales growth and higher volumes resulting in improved fixed-cost utilization, and was further aided by MAP operational improvements, including SG&A-focused optimization actions. Income before taxes included a $10.8 million gain on the sale of a facility that was closed as part of RPM's MAP 2025 program. This gain has been excluded from adjusted EBITDA. Cash Flow and Financial Position During the first three months of fiscal 2027: - Cash provided by operating activities was $263.9 million, compared to $237.5 million in the prior-year period, with the increase driven by improved working capital efficiency. - Capital expenditures were $58.5 million compared to $62.5 million in the prior-year period. - The company returned $90.5 million to stockholders through cash dividends and share repurchases, an increase of 10.2% compared to the prior year. As of August 31, 2026: - Total debt was $2.41 billion compared to $2.67 billion a year ago, with the decrease driven by strong operating cash flow being used to reduce debt. - Total liquidity, including cash and committed revolving credit facilities, was $1.21 billion, compared to $933.4 million a year ago. Investor Day Webcast Information The company will host an investor day on November 9, 2026, at its Stonhard facility in New Jersey. Scheduled speakers include Frank Sullivan, RPM Chairman and CEO; David Dennsteadt, RPM President and COO; Russell Gordon, RPM Vice President and CFO; and Gregory Michael, Performance Coatings Group President. The presentation will be provided prior to the event, and a public webcast will be available at https://www.rpminc.com/investors/presentations-webcasts/. The webcast is expected to start at approximately 12:00 p.m. ET. A replay of the event will be available. Volteco Acquisition As previously announced, the company acquired Volteco, an Italy-based leading supplier of below-grade waterproofing solutions, for its Construction Products Group. Volteco had calendar year 2025 sales of €28 million. Business Outlook Sullivan continued, "Segment trends in the second quarter are expected to be similar to those in the first with the PCG segment leading growth as it benefits from its success with expanding the Platform emerging-market operating model and good end-market demand. Continued stabilization in the Consumer Group is also anticipated, while CPG demand remains soft. MAP benefits and selling price increases will help to offset gross margin pressure from higher inflation and start-up costs at new facilities. In the second half of the year, we expect to benefit from the continued implementation of MAP operational improvements and pricing increases to offset persistent inflation and more challenging comparisons. We also anticipate that CPG will return to positive organic growth by the end of the year." The company's outlook for the fiscal 2027 second quarter is for: - Consolidated sales to increase in the low- to mid-single-digit range compared to prior-year results. - CPG sales to increase in the low-single-digit range compared to prior-year results. - PCG sales to increase in the mid- to high-single-digit range compared to prior-year results. - Consumer Group sales to increase in the low- to mid-single-digit range compared to prior-year results. - Consolidated adjusted EBITDA to increase in the low- to mid-single-digit range compared to prior-year results. The company's outlook for fiscal 2027 is for: - Consolidated sales to increase in the mid-single-digit range compared to prior-year record results. The previous outlook was for 3% to 7% growth. - Consolidated adjusted EBITDA to increase in the mid-single-digit range compared to prior-year record results. The previous outlook was for 5% to 10% growth. Earnings Webcast and Conference Call Information Management will host a conference call to discuss these results beginning at 10:00 a.m. ET today. The call can be accessed via webcast at www.RPMinc.com/Investors/Presentations-Webcasts or by dialing 1-844-481-2915 or 1-412-317-0708 for international callers and asking to join the RPM International call. Participants are asked to call the assigned number approximately 10 minutes before the conference call begins. The call, which will last approximately one hour, will be open to the public, but only financial analysts will be permitted to ask questions. The media and all other participants will be in a listen-only mode. For those unable to listen to the live call, a replay will be available from October 6, 2026, until October 13, 2026. The replay can be accessed by dialing 1-855-669-9658 or 1-412-317-0088 for international callers. The access code is 8131253. The call also will be available for replay and as a written transcript via the RPM website at www.RPMinc.com. About RPM RPM International Inc. owns subsidiaries that are world leaders in specialty coatings, sealants, building materials and related services. The company operates across three reportable segments: consumer, construction products and performance coatings. RPM has a diverse portfolio of market-leading brands, including Rust-Oleum, DAP, Zinsser, Varathane, The Pink Stuff, Stonhard, Carboline, FinishWorks, Tremco, Euclid Chemical, Dryvit and Nudura. From homes and workplaces to infrastructure and precious landmarks, RPM's brands are trusted by consumers and professionals alike to help build a better world. The company employs approximately 17,500 individuals worldwide. Visit www.RPMinc.com to learn more. Use of Non-GAAP Financial Information To supplement the financial information presented in accordance with Generally Accepted Accounting Principles in the United States ("GAAP") in this earnings release, we use EBIT, adjusted EBIT, adjusted EBITDA and adjusted earnings per share, which are all non-GAAP financial measures. EBIT is defined as earnings (loss) before interest and taxes, with Adjusted EBIT provided for the purpose of adjusting for items impacting earnings that are not considered by management to be indicative of ongoing operations. We evaluate the profit performance of our segments based on income before income taxes, but also look to EBIT, or adjusted EBIT, as a performance evaluation measure because Interest Income (Expense), Net is essentially related to corporate functions, as opposed to segment operations. For that reason, we believe EBIT is also useful to investors as a metric in their investment decisions. EBIT should not be considered an alternative to, or more meaningful than, income before income taxes as determined in accordance with GAAP, since EBIT omits the impact of interest and investment income or expense in determining operating performance, which represent items necessary to our continued operations, given our level of indebtedness. Nonetheless, EBIT is a key measure expected by and useful to our fixed income investors, rating agencies and the banking community all of whom believe, and we concur, that this measure is critical to the capital markets' analysis of our segments' core operating performance. We also evaluate EBIT because it is clear that movements in EBIT impact our ability to attract financing. Additionally, Management believes that investors' understanding of the Company's operating performance is enhanced by the disclosure of Adjusted EBITDA, which is a non-GAAP financial measure defined as earnings (loss) before interest, taxes, depreciation and amortization adjusted for items impacting earnings that are not considered by management to be indicative of ongoing operations. We evaluate the profit performance of our segments based on income before income taxes, but also look to adjusted EBITDA, as a performance evaluation measure because Interest Income (Expense), Net is essentially related to corporate functions, as opposed to segment operations. Additionally, Adjusted EBITDA is an operating measure that provides investors with a measure of operating results unaffected by differences in capital structures, capital investment cycles and ages of related assets among otherwise comparable companies. For these reasons, we believe Adjusted EBITDA is also useful to investors as a metric in their investment decisions. The reader is cautioned that the Company's Adjusted EBITDA should not be compared to other entities unknowingly. Adjusted EBITDA should not be considered an alternative to, or more meaningful than, income before income taxes as determined in accordance with GAAP. EBIT, adjusted EBIT and adjusted EBITDA may not be indicative of our historical operating results, nor is it meant to be predictive of potential future results. See the financial statement section of this earnings release for a reconciliation of EBIT, adjusted EBIT and adjusted EBITDA to income before income taxes, and adjusted earnings per share to earnings per share. We have not provided a reconciliation of our second-quarter and full-year fiscal 2027 adjusted EBITDA guidance because material terms that impact such measure are not in our control and/or cannot be reasonably predicted, and therefore a reconciliation of such measure is not available without unreasonable effort. Forward-Looking Statements This press release includes 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 results could differ materially from those expressed in or implied by any such forward-looking statements. These uncertainties and factors include (a) global and regional markets and general economic conditions, including uncertainties surrounding the volatility in financial markets, the availability of capital and the viability of banks and other financial institutions; (b) the prices, supply and availability of raw materials, including assorted pigments, resins, solvents, and other natural gas- and oil-based materials; packaging, including plastic and metal containers; and transportation services, including fuel surcharges; (c) continued growth in demand for our products; (d) legal, environmental and litigation risks inherent in our businesses and risks related to the adequacy of our insurance coverage for such matters; (e) the effect of changes in interest rates; (f) the effect of fluctuations in currency exchange rates upon our foreign operations; (g) changes in global trade policies, including the adoption or expansion of tariffs and trade barriers; (h) the effect of non-currency risks of investing in and conducting operations in foreign countries, including those relating to domestic and international political, social, economic and regulatory factors; (i) risks and uncertainties associated with our ongoing acquisition and divestiture activities; (j) the timing of and the realization of anticipated cost savings from restructuring initiatives, the ability to identify additional cost savings opportunities, and the risks of failing to meet any other objectives of our improvement plans; (k) risks related to the adequacy of our contingent liability reserves; (l) risks relating to a public health crisis similar to the Covid pandemic; (m) risks related to acts of war similar to the Middle East conflict and the Russian invasion of Ukraine; (n) risks related to the transition or physical impacts of climate change and other natural disasters or meeting sustainability-related voluntary goals or regulatory requirements; (o) risks related to our or our third parties' use of technology including AI, data breaches and data privacy violations; (p) the shift to remote work and online purchasing and the impact that has on residential and commercial real estate construction; and (q) other risks detailed in our filings with the Securities and Exchange Commission, including the risk factors set forth in our Annual Report on Form 10-K for the year ended May 31, 2026, as the same may be updated from time to time. We do not undertake any obligation to publicly update or revise any forward-looking statements to reflect future events, information or circumstances that arise after the filing date of this press release. CONSOLIDATED STATEMENTS OF INCOME | | | | IN THOUSANDS, EXCEPT PER SHARE DATA | | | | (Unaudited) | | | | | | | | | | Three Months Ended | | August 31, | | August 31, | | | 2026 | | | | 2025 | | | | | Net Sales | | $ | 2,215,593 | | | $ | 2,113,743 | Cost of Sales | | | 1,301,631 | | | | 1,220,527 | Gross Profit | | | 913,962 | | | | 893,216 | Selling, General & Administrative Expenses | | | 559,768 | | | | 573,534 | Restructuring Expense | | | 5,157 | | | | 8,814 | Interest Expense | | | 25,535 | | | | 29,326 | Investment (Income), Net | | | (7,518 | ) | | | (13,404 | ) Other (Income), Net | | | (6,033 | ) | | | (3,101 | ) Income Before Income Taxes | | | 337,053 | | | | 298,047 | Provision for Income Taxes | | | 80,427 | | | | 70,207 | Net Income | | | 256,626 | | | | 227,840 | Less: Net Income Attributable to Noncontrolling Interests | | | 269 | | | | 235 | Net Income Attributable to RPM International Inc. Stockholders | | $ | 256,357 | | | $ | 227,605 | | | | | Earnings per share of common stock attributable to | | | | RPM International Inc. Stockholders: | | | | Basic | | $ | 2.02 | | | $ | 1.78 | Diluted | | $ | 2.01 | | | $ | 1.77 | | | | | Average shares of common stock outstanding - basic | | | 126,744 | | | | 127,283 | Average shares of common stock outstanding - diluted | | | 127,240 | | | | 127,950 | SUPPLEMENTAL SEGMENT INFORMATION | | | IN THOUSANDS | | | (Unaudited) | | | | | | | | | Three Months Ended | | August 31, | | August 31, | | | 2026 | | | | 2025 | Net Sales: | | | | CPG Segment | $ | 859,209 | | | $ | 851,997 | | PCG Segment | | 629,650 | | | | 571,593 | | Consumer Segment | | 726,734 | | | | 690,153 | | Total | $ | 2,215,593 | | | $ | 2,113,743 | | | | | Income Before Income Taxes: | | | | CPG Segment | | | | Income Before Income Taxes (a) | $ | 149,110 | | | $ | 159,184 | | Interest (Expense), Net (b) | | (896 | ) | | | (1,623 | ) | EBIT (c) | | 150,006 | | | | 160,807 | | MAP initiatives (d) | | 1,292 | | | | 5,180 | | (Gain) on acquisition earn-out fair value adjustments (f) | | (4,700 | ) | | | - | | Adjusted EBIT | | 146,598 | | | | 165,987 | | Depreciation (h) | | 16,928 | | | | 15,431 | | Amortization (i) | | 2,667 | | | | 2,526 | | Adjusted EBITDA (j) | $ | 166,193 | | | $ | 183,944 | | PCG Segment | | | | Income Before Income Taxes (a) | $ | 107,302 | | | $ | 86,795 | | Interest Income, Net (b) | | 1,716 | | | | 1,730 | | EBIT (c) | | 105,586 | | | | 85,065 | | MAP initiatives (d) | | 2,503 | | | | 4,937 | | Inventory step-up costs (e) | | 57 | | | | - | | (Gain) on acquisition earn-out fair value adjustments (f) | | (245 | ) | | | - | | Adjusted EBIT | | 107,901 | | | | 90,002 | | Depreciation (h) | | 9,883 | | | | 9,382 | | Amortization (i) | | 3,289 | | | | 3,032 | | Adjusted EBITDA (j) | $ | 121,073 | | | $ | 102,416 | | Consumer Segment | | | | Income Before Income Taxes (a) | $ | 132,279 | | | $ | 108,837 | | Interest (Expense), Net (b) | | (118 | ) | | | (272 | ) | EBIT (c) | | 132,397 | | | | 109,109 | | MAP initiatives (d) | | (4,930 | ) | | | 3,752 | | Inventory step-up costs (e) | | - | | | | 7,117 | | Adjusted EBIT | | 127,467 | | | | 119,978 | | Depreciation (h) | | 13,110 | | | | 13,203 | | Amortization (i) | | 5,999 | | | | 5,787 | | Adjusted EBITDA (j) | $ | 146,576 | | | $ | 138,968 | | Corporate/Other | | | | (Loss) Before Income Taxes (a) | $ | (51,638 | ) | | $ | (56,769 | ) | Interest (Expense), Net (b) | | (18,719 | ) | | | (15,757 | ) | EBIT (c) | | (32,919 | ) | | | (41,012 | ) | MAP initiatives (d) | | 2,573 | | | | 2,837 | | Deferred compensation (g) | | 1,120 | | | | - | | Adjusted EBIT | | (29,226 | ) | | | (38,175 | ) | Depreciation (h) | | 803 | | | | 772 | | Amortization (i) | | 38 | | | | 123 | | Adjusted EBITDA (j) | $ | (28,385 | ) | | $ | (37,280 | ) TOTAL CONSOLIDATED | | | | Income Before Income Taxes (a) | $ | 337,053 | | | $ | 298,047 | | Interest (Expense) | | (25,535 | ) | | | (29,326 | ) | Investment Income, Net | | 7,518 | | | | 13,404 | | EBIT (c) | | 355,070 | | | | 313,969 | | MAP initiatives (d) | | 1,438 | | | | 16,706 | | Inventory step-up costs (e) | | 57 | | | | 7,117 | | (Gain) on acquisition earn-out fair value adjustments (f) | | (4,945 | ) | | | - | | Deferred compensation (g) | | 1,120 | | | | - | | Adjusted EBIT | | 352,740 | | | | 337,792 | | Depreciation (h) | | 40,724 | | | | 38,788 | | Amortization (i) | | 11,993 | | | | 11,468 | | Adjusted EBITDA (j) | $ | 405,457 | | | $ | 388,048 | | | | | (a) | The presentation includes a reconciliation of Income (Loss) Before Income Taxes, a measure defined by Generally Accepted Accounting Principles in the United States (GAAP), to EBIT, Adjusted EBIT and Adjusted EBITDA. (b) | Interest Income (Expense), Net includes the combination of Interest Income (Expense) and Investment Income (Expense), Net. (c) | EBIT is defined as earnings (loss) before interest and taxes, with Adjusted EBIT provided for the purpose of adjusting for items impacting earnings that are not considered by management to be indicative of ongoing operations. We evaluate the profit performance of our segments based on income before income taxes, but also look to EBIT, or adjusted EBIT, as a performance evaluation measure because Interest Income (Expense), Net is essentially related to corporate functions, as opposed to segment operations. For that reason, we believe EBIT is also useful to investors as a metric in their investment decisions. EBIT should not be considered an alternative to, or more meaningful than, income before income taxes as determined in accordance with GAAP, since EBIT omits the impact of interest and investment income or expense in determining operating performance, which represent items necessary to our continued operations, given our level of indebtedness. Nonetheless, EBIT is a key measure expected by and useful to our fixed income investors, rating agencies and the banking community all of whom believe, and we concur, that this measure is critical to the capital markets' analysis of our segments' core operating performance. We also evaluate EBIT because it is clear that movements in EBIT impact our ability to attract financing. EBIT may not be indicative of our historical operating results, nor is it meant to be predictive of potential future results. (d) | Reflects restructuring and other charges, which have been incurred in relation to our Margin Achievement Plan ("MAP 2025") and our 2026 restructuring action, together MAP Initiatives, as follows:- MAP 2025 Restructuring and other related expense, net: Includes charges incurred related to headcount reductions and facility closures recorded in "Restructuring Expense" on the Consolidated Statements of Income. Restructuring Expense related to MAP 2025 totaled $0.7 million and $8.8 million for the three months ended August 31, 2026 and August 31, 2025 respectively. Other related expenses include inventory write-offs in connection with restructuring activities recorded in "Cost of Sales" and accelerated depreciation and amortization recorded within "Cost of Sales" or "Selling, General, & Administrative Expenses ("SG&A")" depending on the nature of the expense.- 2026 Restructuring and other related expense, net: Includes charges incurred related to headcount reductions and facility closures associated with the SG&A-focused optimization actions and other early stage MAP 3.0 actions recorded in "Restructuring Expense" on the Consolidated Statements of Income. Restructuring Expense related to the 2026 restructuring action totaled $4.5 million for the quarter ended August 31, 2026. Other related expenses consist of higher executive departure costs, including accelerated stock compensation expense, that do not qualify as restructuring expense and are recorded within "SG&A" as well as accelerated depreciation recorded within "Cost of Sales" or "SG&A" depending on the nature of the expense. Other related expenses also includes inventory write-offs in connection with restructuring activities recorded in "Cost of Sales".- ERP consolidation plan: Includes expenses incurred as a result of our stated goals to consolidate over 75 ERP systems across the organization to one ERP platform per segment, as part of our overall MAP strategy as well as costs incurred for other decision support tools to facilitate our commercial initiatives related to MAP 2025 which have been incurred in all segments, as well as Corporate/Other, and have been recorded within "SG&A".- Professional fees: Includes expenses incurred to consolidate accounting locations, costs incurred to implement technologies and processes to drive improved data analytics/decision making and cost incurred to implement new global manufacturing methodologies with the goal of improving operating efficiency incurred within all of our segments as well as Corporate/Other and recorded within "SG&A". All of this spend is in support of stated MAP goals with the most significant expense incurred within Corporate/Other.- (Gain) on sale of closed facilities, net: Net gain recognized related to the sale of certain properties within the PCG and Consumer Segments which were closed as part of the MAP 2025 program.Included below is a reconciliation of the TOTAL CONSOLIDATED MAP initiatives. | | Three Months Ended | | August 31, | | August 31, | | | 2026 | | | | 2025 | | MAP 2025 Restructuring and other related expense, net | $ | 732 | | | $ | 10,599 | | 2026 Restructuring and other related expense, net | | 5,522 | | | | - | | ERP consolidation plan | | 1,809 | | | | 2,966 | | Professional fees | | 4,128 | | | | 3,141 | | (Gain) on sale of closed facilities, net | | (10,753 | ) | | | - | | MAP initiatives | $ | 1,438 | | | $ | 16,706 | | | | | (e) | Amortization of inventory fair value adjustments related to acquisitions recorded in "Cost of Sales". (f) | Fair value adjustments of the earn-out liabilities associated with two small acquisitions, which were recorded in "SG&A". Management does not consider these gains to be reflective of the company's core business operations. (g) | This adjustment eliminates the compensation expense impact from market valuation changes in deferred compensation liabilities. Although not included in this schedule, the company also adjusts the related net gains (losses) on investments used as economic hedges against the related liabilities. The liabilities are adjusted based on the performance of hypothetical investments selected by participants. Management believes it is useful to offset the non-operating investment income (loss) of the investments against the related compensation expense and remove the net impact to help the reader's ability to understand the company's core operating results and to increase comparability period to period. (h) | Depreciation expense includes charges to income that result from property, plant and equipment depreciation and the amortization of assets recorded under finance leases recorded within "Cost of Sales" or "SG&A" depending on the nature of the expense. This excludes accelerated depreciation related to MAP initiatives. (i) | Amortization expense includes intangible asset amortization as well as amortization of deferred cloud computing implementation costs. (j) | Management believes that investors' understanding of the Company's operating performance is enhanced by the disclosure of Adjusted EBITDA, which is a non-GAAP financial measure defined as earnings (loss) before interest, taxes, depreciation and amortization adjusted for items impacting earnings that are not considered by management to be indicative of ongoing operations. We evaluate the profit performance of our segments based on income before income taxes, but also look to adjusted EBITDA, as a performance evaluation measure because Interest Income (Expense), Net is essentially related to corporate functions, as opposed to segment operations. Additionally, Adjusted EBITDA is an operating measure that provides investors with a measure of operating results unaffected by differences in capital structures, capital investment cycles and ages of related assets among otherwise comparable companies. For these reasons, we believe Adjusted EBITDA is also useful to investors as a metric in their investment decisions. The reader is cautioned that the Company's Adjusted EBITDA should not be compared to other entities unknowingly. Adjusted EBITDA should not be considered an alternative to, or more meaningful than, income before income taxes as determined in accordance with GAAP. SUPPLEMENTAL INFORMATION | | | RECONCILIATION OF "REPORTED" TO "ADJUSTED" AMOUNTS | | | (Unaudited) | | | | | | | | | Three Months Ended | | August 31, | | August 31, | | | 2026 | | | | 2025 | | | | | | Reconciliation of Reported Earnings per Diluted Share to Adjusted Earnings per Diluted Share (All amounts presented after-tax): | | | | Reported Earnings per Diluted Share | $ | 2.01 | | | $ | 1.77 | | MAP initiatives (d) | | 0.01 | | | | 0.10 | | Inventory step-up costs (e) | | - | | | | 0.04 | | (Gain) on acquisition earn-out fair value adjustments (f) | | (0.03 | ) | | | - | | Investment returns (g) | | (0.01 | ) | | | (0.03 | ) | Adjusted Earnings per Diluted Share (k) | $ | 1.98 | | | $ | 1.88 | | | | | (d) | Reflects restructuring and other charges, which have been incurred in relation to our Margin Achievement Plan ("MAP 2025") and our 2026 restructuring action, together MAP Initiatives, as follows:- MAP 2025 Restructuring and other related expense, net: Includes charges incurred related to headcount reductions and facility closures recorded in "Restructuring Expense" on the Consolidated Statements of Income. Restructuring Expense related to MAP 2025 totaled $0.7 million and $8.8 million for the three months ended August 31, 2026 and August 31, 2025 respectively. Other related expenses include inventory write-offs in connection with restructuring activities recorded in "Cost of Sales" and accelerated depreciation and amortization recorded within "Cost of Sales" or "Selling, General, & Administrative Expenses ("SG&A")" depending on the nature of the expense.- 2026 Restructuring and other related expense, net: Includes charges incurred related to headcount reductions and facility closures associated with the SG&A-focused optimization actions and other early stage MAP 3.0 actions recorded in "Restructuring Expense" on the Consolidated Statements of Income. Restructuring Expense related to the 2026 restructuring action totaled $4.5 million for the quarter ended August 31, 2026. Other related expenses consist of higher executive departure costs, including accelerated stock compensation expense, that do not qualify as restructuring expense and are recorded within "SG&A" as well as accelerated depreciation recorded within "Cost of Sales" or "SG&A" depending on the nature of the expense. Other related expenses also includes inventory write-offs in connection with restructuring activities recorded in "Cost of Sales".- ERP consolidation plan: Includes expenses incurred as a result of our stated goals to consolidate over 75 ERP systems across the organization to one ERP platform per segment, as part of our overall MAP strategy as well as costs incurred for other decision support tools to facilitate our commercial initiatives related to MAP 2025 which have been incurred in all segments, as well as Corporate/Other, and have been recorded within "SG&A".- Professional fees: Includes expenses incurred to consolidate accounting locations, costs incurred to implement technologies and processes to drive improved data analytics/decision making and cost incurred to implement new global manufacturing methodologies with the goal of improving operating efficiency incurred within all of our segments as well as Corporate/Other and recorded within "SG&A". All of this spend is in support of stated MAP goals with the most significant expense incurred within Corporate/Other.- (Gain) on sale of closed facilities, net: Net gain recognized related to the sale of certain properties within the PCG and Consumer Segments which were closed as part of the MAP 2025 program. (e) | Amortization of inventory fair value adjustments related to acquisitions recorded in "Cost of Sales". (f) | Fair value adjustments of the earn-out liabilities associated with two small acquisitions, which were recorded in "SG&A". Management does not consider these gains to be reflective of the company's core business operations. (g) | Investment returns include realized net gains and losses on sales of investments and unrealized net gains and losses on equity securities, which are adjusted due to their inherent volatility. Management does not consider these gains and losses, which cannot be predicted with any level of certainty, to be reflective of the Company's core business operations. (k) | Adjusted Diluted EPS is provided for the purpose of adjusting diluted earnings per share for items impacting earnings that are not considered by management to be indicative of ongoing operations. CONSOLIDATED BALANCE SHEETS | | | | | | IN THOUSANDS | | | | | | (Unaudited) | | | | | | | | | | | | | | | | August 31, 2026 | | August 31, 2025 | | May 31, 2026 Assets | | | | | | Current Assets | | | | | | | Cash and cash equivalents | | $ | 312,842 | | | $ | 297,075 | | | $ | 315,188 | | Trade accounts receivable | | | 1,556,199 | | | | 1,515,499 | | | | 1,700,717 | | Allowance for doubtful accounts | | | (38,236 | ) | | | (42,506 | ) | | | (39,179 | ) | Net trade accounts receivable | | | 1,517,963 | | | | 1,472,993 | | | | 1,661,538 | | Inventories | | | 1,140,432 | | | | 1,068,183 | | | | 1,058,911 | | Prepaid expenses and other current assets | | | 405,141 | | | | 365,271 | | | | 423,198 | | Total current assets | | | 3,376,378 | | | | 3,203,522 | | | | 3,458,835 | Property, Plant and Equipment, at Cost | | | 2,952,267 | | | | 2,805,421 | | | | 2,919,058 | | Allowance for depreciation | | | (1,399,118 | ) | | | (1,306,637 | ) | | | (1,362,540 | ) | Property, plant and equipment, net | | | 1,553,149 | | | | 1,498,784 | | | | 1,556,518 | Other Assets | | | | | | | Goodwill | | | 1,686,520 | | | | 1,657,612 | | | | 1,688,164 | | Other intangible assets, net of amortization | | | 813,600 | | | | 832,195 | | | | 824,638 | | Operating lease right-of-use assets | | | 389,937 | | | | 394,831 | | | | 396,936 | | Deferred income taxes | | | 113,035 | | | | 147,436 | | | | 116,474 | | Other | | | 298,019 | | | | 210,165 | | | | 303,040 | | Total other assets | | | 3,301,111 | | | | 3,242,239 | | | | 3,329,252 | Total Assets | | $ | 8,230,638 | | | $ | 7,944,545 | | | $ | 8,344,605 | Liabilities and Stockholders' Equity | | | | | | Current Liabilities | | | | | | | Accounts payable | | $ | 889,731 | | | $ | 762,013 | | | $ | 853,524 | | Current portion of long-term debt | | | 407,497 | | | | 7,434 | | | | 407,834 | | Accrued compensation and benefits | | | 185,200 | | | | 189,846 | | | | 307,299 | | Accrued losses | | | 49,019 | | | | 30,749 | | | | 51,258 | | Other accrued liabilities | | | 391,253 | | | | 424,834 | | | | 441,148 | | Total current liabilities | | | 1,922,700 | | | | 1,414,876 | | | | 2,061,063 | Long-Term Liabilities | | | | | | | Long-term debt, less current maturities | | | 1,999,028 | | | | 2,661,990 | | | | 2,125,690 | | Operating lease liabilities | | | 334,729 | | | | 340,420 | | | | 341,283 | | Other long-term liabilities | | | 256,569 | | | | 243,524 | | | | 258,641 | | Deferred income taxes | | | 237,280 | | | | 227,141 | | | | 244,823 | | Total long-term liabilities | | | 2,827,606 | | | | 3,473,075 | | | | 2,970,437 | | Total liabilities | | | 4,750,306 | | | | 4,887,951 | | | | 5,031,500 | Stockholders' Equity | | | | | | | Preferred stock; none issued | | | - | | | | - | | | | - | | Common stock (outstanding 127,554; 128,219; 127,643) | | 1,276 | | | | 1,282 | | | | 1,276 | | Paid-in capital | | | 1,220,252 | | | | 1,183,272 | | | | 1,210,651 | | Treasury stock, at cost | | | (1,067,754 | ) | | | (973,372 | ) | | | (1,036,645 | ) | Accumulated other comprehensive (loss) | | | (446,690 | ) | | | (512,832 | ) | | | (447,200 | ) | Retained earnings | | | 3,771,739 | | | | 3,356,848 | | | | 3,583,451 | | Total RPM International Inc. stockholders' equity | | 3,478,823 | | | | 3,055,198 | | | | 3,311,533 | | Noncontrolling interest | | | 1,509 | | | | 1,396 | | | | 1,572 | | Total equity | | | 3,480,332 | | | | 3,056,594 | | | | 3,313,105 | Total Liabilities and Stockholders' Equity | | $ | 8,230,638 | | | $ | 7,944,545 | | | $ | 8,344,605 | CONSOLIDATED STATEMENTS OF CASH FLOWS | | | IN THOUSANDS | | | (Unaudited) | | | | Three Months Ended | August 31, | | August 31, | | 2026 | | | | 2025 | | | | Cash Flows From Operating Activities: | | | Net income | $ | 256,626 | | | $ | 227,840 | | | | Adjustments to reconcile net income to net cash provided by operating activities: | | | Depreciation and amortization | | 53,075 | | | | 51,464 | Fair value adjustments to contingent earnout obligations | | (4,945 | ) | | | - | Deferred income taxes | | (3,817 | ) | | | 1,304 | Stock-based compensation expense | | 9,601 | | | | 5,475 | Net (gain) on marketable securities | | (2,032 | ) | | | (8,673 | ) Net (gain) of sales of assets | | (10,505 | ) | | | - | Other | | 244 | | | | (324 | ) Changes in assets and liabilities, net of effect from purchases and sales of businesses: | | | Decrease in receivables | | 142,204 | | | | 49,331 | (Increase) in inventory | | (81,609 | ) | | | (16,005 | ) (Increase) in prepaid expenses and other current and long-term assets | | (9,868 | ) | | | (18,051 | ) Increase in accounts payable | | 57,344 | | | | 7,810 | (Decrease) in accrued compensation and benefits | | (121,260 | ) | | | (99,296 | ) (Decrease) in accrued losses | | (2,320 | ) | | | (6,098 | ) (Decrease) increase in other accrued liabilities | | (18,802 | ) | | | 42,733 | Cash Provided By Operating Activities | | 263,936 | | | | 237,510 | Cash Flows From Investing Activities: | | | Capital expenditures | | (58,505 | ) | | | (62,461 | ) Acquisition of businesses, net of cash acquired | | - | | | | (115,695 | ) Purchase of marketable securities | | (10,243 | ) | | | (6,283 | ) Proceeds from sales of marketable securities | | 1,526 | | | | 1,525 | Proceeds from sales of assets | | 27,634 | | | | - | Other | | (238 | ) | | | 523 | Cash (Used For) Investing Activities | | (39,826 | ) | | | (182,391 | ) Cash Flows From Financing Activities: | | | Additions to long-term and short-term debt | | 148,886 | | | | 35,000 | Reductions of long-term and short-term debt | | (276,448 | ) | | | (14,972 | ) Cash dividends | | (68,069 | ) | | | (64,521 | ) Repurchases of common stock | | (22,386 | ) | | | (17,500 | ) Shares of common stock returned for taxes | | (8,987 | ) | | | (1,921 | ) Other | | (278 | ) | | | (221 | ) Cash (Used For) Financing Activities | | (227,282 | ) | | | (64,135 | ) | | | Effect of Exchange Rate Changes on Cash and Cash Equivalents | | 826 | | | | 3,954 | | | | Net Change in Cash and Cash Equivalents | | (2,346 | ) | | | (5,062 | ) | | | Cash and Cash Equivalents at Beginning of Period | | 315,188 | | | | 302,137 | | | | Cash and Cash Equivalents at End of Period | $ | 312,842 | | | $ | 297,075 | View source version on businesswire.com: https://www.businesswire.com/news/home/20261006586793/en/ Contacts For more information, contact Matt Schlarb, Vice President – Investor Relations & Sustainability, at 330-220-6064 or [email protected].

RPM International (RPM) came out with quarterly earnings of $1.98 per share, beating the Zacks Consensus Estimate of $1.95 per share. This compares to earnings of $1.88 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +1.54%. A quarter ago, it was expected that this specialty chemicals company would post earnings of $1.84 per share when it actually produced earnings of $1.89, delivering a surprise of +2.72%. Over the last four quarters, the company has surpassed consensus EPS estimates three times. RPM International, which belongs to the Zacks Chemical - Specialty industry, posted revenues of $2.22 billion for the quarter ended August 2026, missing the Zacks Consensus Estimate by 0.1%. This compares to year-ago revenues of $2.11 billion. The company has topped consensus revenue estimates two times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. RPM International shares have lost about 8.4% since the beginning of the year versus the S&P 500's gain of 13.6%. While RPM International has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for RPM International was unfavorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #4 (Sell) for the stock. So, the shares are expected to underperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $1.33 on $2.02 billion in revenues for the coming quarter and $5.96 on $8.25 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Chemical - Specialty is currently in the bottom 19% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Hawkins (HWKN), another stock in the same industry, has yet to report results for the quarter ended September 2026. The results are expected to be released on October 26. This chemical maker is expected to post quarterly earnings of $1.22 per share in its upcoming report, which represents a year-over-year change of +13%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Hawkins' revenues are expected to be $302.7 million, up 7.9% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report RPM International Inc. (RPM) : Free Stock Analysis Report Hawkins, Inc. (HWKN) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

RPM International (RPM) tightened its full-year sales outlook on Tuesday after the specialty coatings manufacturer reported fiscal first-quarter revenue in line with market estimates, while earnings topped expectations. The company now anticipates sales to rise by a mid-single-digit in fiscal 2027, compared with its previous guidance for growth of 3% to 7%. The current consensus on FactSet is for sales to increase by 5.5%. For the three months through August, RPM's sales improved 4.8% year over year to $2.22 billion, meeting the Street's view. Adjusted earnings advanced to $1.98 per share from $1.88, surpassing the average analyst estimate of $1.95. "The resilience of our associates and business model was on full display in the first quarter as we generated another quarter of record sales," Chief Executive Frank Sullivan said in a statement. In a client note emailed in August, UBS Securities said higher raw material costs could pressure results in both the August and November quarters. By segment, revenue in the construction products group edged up 0.8% to $859.2 million, but was below the company's expectations amid a slowdown in the healthcare and education markets, while certain products were impacted by supplier raw material availability issues. "Solid organic growth in our performance coatings group and consumer group, and a focus on manufacturing, procurement and (selling, general and administrative) efficiencies overcame multiple challenges, including raw material inflation and a temporary slowdown in our construction products group," according to Sullivan. The performance coatings segment recorded sales of $629.7 million, up from $571.6 million in the prior-year quarter, amid broad-based growth. The consumer division recorded a gain of 5.3% in revenue to $726.7 million. All three businesses benefited from the company's pricing actions to offset inflation, it said. RPM expects price hikes to counter persistent inflation and more challenging comparisons in the second half, according to Sullivan. For the ongoing quarter, RPM forecasts sales to increase in the low- to mid-single-digit range from the prior-year result. The Street is looking for sales to rise by 6.2%. "Segment trends in the second quarter are expected to be similar to those in the first with the (performance coatings group) segment leading growth," Sullivan said. "Continued stabilization in the consumer group is also anticipated, while (construction products group) demand remains soft." The company expects the construction products business to "return to positive organic growth by the end of the year," the CEO added. In July, rival Sherwin-Williams (SHW) lifted its full-year outlook after logging stronger-than-expected second-quarter results. In the same month, PPG Industries (PPG) reiterated its 2026 adjusted EPS guidance.

Investing.com -- On Tuesday, RPM International Inc. (NYSE:RPM) reported first quarter fiscal 2027 results that exceeded earnings expectations while revenue met analyst estimates. Before you buy NVIDIA: our AI model's stock picks are beating the market by 120%+. See the list now » Shares of the specialty coatings and building materials provider edged down 0.84% in pre-market trading following the announcement. The company posted adjusted earnings per share of $1.98, beating the analyst consensus of $1.95 by $0.03. Revenue reached $2.22 billion, matching analyst expectations and representing a 4.8% increase from $2.11 billion in the prior year period. Chairman and CEO Frank C. Sullivan attributed the results to solid organic growth and operational efficiencies that overcame raw material inflation and a temporary slowdown in the Construction Products Group. Not finding the right stocks? Our AI's list of investor-grade stock picks for October just dropped » The company's adjusted EBITDA rose 4.5% to a record $405.5 million compared to $388.0 million last year. Revenue growth included 3.1% organic growth, 1.6% from acquisitions net of divestitures, and a 0.1% benefit from foreign currency translation. By segment, Performance Coatings Group led with sales of $629.7 million, up 10.2% YoY, driven by strength in engineered solutions for high-performance buildings and infrastructure projects. Consumer Group sales increased 5.3% to $726.7 million, aided by shelf space wins and new product introductions. Construction Products Group sales rose just 0.8% to $859.2 million, impacted by delayed sales in healthcare and education markets and supplier raw material availability issues. "The resilience of our associates and business model was on full display in the first quarter as we generated another quarter of record sales and adjusted EBITDA," Sullivan said. For the second quarter of fiscal 2027, RPM expects consolidated sales and adjusted EBITDA to increase in the low- to mid-single-digit range. For the full fiscal year 2027, the company projects both sales and adjusted EBITDA to increase in the mid-single-digit range, narrowing from its previous outlook of 3% to 7% sales growth and 5% to 10% adjusted EBITDA growth. Original Article RPM International beats first quarter earnings estimates Apogee Enterprises stock soars 13% on earnings beat and raised guidance Norwegian Air September traffic climbs 7% on strong autumn demand

RPM International (RPM) reported $2.22 billion in revenue for the quarter ended August 2026, representing a year-over-year increase of 4.8%. EPS of $1.98 for the same period compares to $1.88 a year ago. The reported revenue represents a surprise of -0.1% over the Zacks Consensus Estimate of $2.22 billion. With the consensus EPS estimate being $1.95, the EPS surprise was +1.54%. While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations to determine their next move, some key metrics always offer a more accurate picture of a company's financial health. Since these metrics play a crucial role in driving the top- and bottom-line numbers, comparing them with the year-ago numbers and what analysts estimated about them helps investors better project a stock's price performance. Here is how RPM International performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts: - Net Sales- Construction Products Group/ CPG: $859.21 million compared to the $936.32 million average estimate based on five analysts. The reported number represents a change of -2.5% year over year. - Net Sales- Consumer Segment: $726.73 million compared to the $720.01 million average estimate based on five analysts. The reported number represents a change of +4.7% year over year. - Net Sales- Performance Coatings Group/ PCG: $629.65 million versus the five-analyst average estimate of $559.84 million. The reported number represents a year-over-year change of +16.9%. - Adjusted EBIT- Construction Products Group/ CPG: $146.6 million compared to the $179.16 million average estimate based on five analysts. - Adjusted EBIT- Corporate/Other: $-29.23 million versus $-42.71 million estimated by five analysts on average. - Adjusted EBIT- Consumer Segment: $127.47 million versus $122.04 million estimated by five analysts on average. - Adjusted EBIT- Performance Coatings Group/ PCG: $107.9 million compared to the $90.17 million average estimate based on five analysts. View all Key Company Metrics for RPM International here>>> Shares of RPM International have returned -9.7% over the past month versus the Zacks S&P 500 composite's +0.8% change. The stock currently has a Zacks Rank #4 (Sell), indicating that it could underperform the broader market in the near term. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report RPM International Inc. (RPM) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

- Interested in RPM International Inc.? Here are five stocks we like better. - RPM reported record first-quarter sales, adjusted EBITDA and EPS, with adjusted diluted EPS rising 5.3% year over year to $1.98. Performance Coatings and Consumer offset weakness in Construction Products, while cost savings helped preserve EBITDA margins despite inflation. - Segment performance diverged: Performance Coatings and Consumer posted record results, but Construction Products faced weaker organic demand, supplier-related shortages and higher costs. RPM expects Construction Products to improve sequentially and return to positive organic growth later in the fiscal year. - RPM raised its inflation expectations and narrowed full-year guidance to mid-single-digit sales and adjusted EBITDA growth. The company now expects second-quarter raw-material inflation of 9% to 11% and plans to rely on pricing, freight surcharges and $75 million in SG&A savings to offset pressure. - RPM International's Blowout Quarter Sparks a 15% Rally RPM International (NYSE:RPM) reported record first-quarter sales, adjusted EBITDA and adjusted earnings per share for fiscal 2027, as growth in its Performance Coatings and Consumer segments offset temporary weakness in Construction Products. Adjusted diluted EPS rose 5.3% year over year to a first-quarter record of $1.98, according to Vice President, Controller and Chief Accounting Officer Michael Laroche. The company said higher sales and benefits from its MAP operational improvement program, including SG&A optimization, more than offset raw-material inflation, warranty costs and bad-debt expense. → McDonald's Is Undergoing a Massive New Growth Strategy. Can It Win Back Consumers? - RPM International Thrives in Rate-Cut Driven Construction Rally Chairman and CEO Frank Sullivan said the results reflected the company's "balanced business model" amid sluggish end markets and operating headwinds. Gross margin declined 100 basis points because the rate of raw-material inflation exceeded pricing and MAP benefits, but RPM held its adjusted EBITDA margin consistent with the prior-year quarter by reducing SG&A as a percentage of sales. Construction Products Group sales increased due to the Kalzip acquisition, but organic sales declined as education and healthcare markets slowed. Those two markets account for more than one-quarter of the segment's end-market exposure, Laroche said. The segment also faced finished-product shortages stemming from supplier constraints involving polyurethane raw materials. → MGM Resorts Stock Sinks After Diller Deal Collapse: Overreaction or Warning? - RPM International Pulls Back Critical Levels; Is It Time To Buy? Construction Products adjusted EBITDA declined as reduced volume hurt fixed-cost absorption, while inflation, bad debt and warranty costs added pressure. Sullivan said the polyurethane supply shortage has been resolved from a production standpoint, although RPM is still rebuilding inventory in the second quarter and working through delayed projects. The company expects Construction Products to improve sequentially in the second quarter and return to positive organic growth later in the fiscal year. However, Sullivan said the recovery in its roofing-related businesses will be weighted toward spring because of the seasonal nature of roofing work. → Could Nike's Brutal Sell-Off Finally Be Running Out of Steam? Performance Coatings Group posted record results, supported by broad-based demand for engineered solutions used in high-performance buildings, energy and infrastructure projects. Food coatings and ingredients also contributed. The segment's adjusted EBITDA and adjusted EBITDA margin reached records as stronger fixed-cost utilization and SG&A actions offset inflation. Consumer Group sales also reached a record, including 5.2% organic growth. RPM cited shelf-space gains, new products and pricing, as well as improved results for The Pink Stuff cleaning brand. The company also pointed to gains in abrasives, primers, retail automotive and Ready Seal exterior wood stains. Consumer adjusted EBITDA and margin increased as higher volume improved fixed-cost absorption. Sullivan said underlying consumer conditions remain challenging, citing sluggish retail traffic, weak housing turnover and higher interest rates. Still, he said RPM generated positive unit-volume growth in Consumer through market-share gains, new placements and product initiatives. Chief Financial Officer Rusty Gordon said raw-material inflation expectations have increased since the company's July earnings call. RPM now expects second-quarter inflation of 9% to 11%, compared with its previous estimate of 6% to 8%. Third-quarter inflation is expected to be 7% to 9%. Higher polyurethane feedstock costs, sustained increases in oil and commodity prices, and elevated freight costs contributed to the revised outlook. RPM has implemented additional price increases across all segments and freight surcharges in some businesses. Sullivan said the company covered inflation on a dollar basis in the first quarter and expects to do "a little bit better" in the second quarter, although gross-margin pressure is expected for the year. For the fiscal second quarter, RPM expects consolidated sales and adjusted EBITDA to increase in the low- to mid-single-digit range. Segment sales are projected to rise in the low-single digits for Construction Products, mid- to high-single digits for Performance Coatings, and low- to mid-single digits for Consumer. RPM narrowed its full-year fiscal 2027 outlook to mid-single-digit sales growth, from a previous range of 3% to 7%. It now expects adjusted EBITDA growth in the mid-single digits, versus prior guidance for an increase of 5% to 10%. The company said MAP benefits, including $75 million in previously announced SG&A-focused savings, and incremental pricing are expected to offset persistent inflation. However, the outlook also incorporates startup costs at new shared facilities and more difficult comparisons in the second half. RPM said it generated strong cash flow from improved profitability and working-capital efficiency. Working capital improved by 150 basis points from the prior year. The company returned $90.5 million to shareholders through dividends and repurchases, up 10.2% year over year, while total debt declined by $263 million. The company completed the acquisition of Volteco in early October. Volteco, an Italy-based supplier of below-grade waterproofing solutions, generated calendar 2025 sales of €28 million and joined the Construction Products Group. Emerging-market revenue grew more than 20%, driven by demand for engineered solutions for high-performance buildings and infrastructure. Sullivan said the company's Platform Group structure, which coordinates operations across Africa, the Middle East, Asia-Pacific and now South America, has helped accelerate growth. He said the Southern Hemisphere developing world represented 8% of first-quarter consolidated sales, up from slightly less than 5% about five years ago. RPM plans to provide further details on MAP 2030, operational initiatives and longer-term financial goals at its Investor Day on Nov. 9 in Maple Shade, New Jersey. RPM International Inc is a multinational manufacturer of specialty coatings, sealants, building materials and related products. The company serves the construction, industrial, automotive, marine and consumer markets through a portfolio of businesses that develop products for protecting, repairing, maintaining and enhancing surfaces and structures. Its brands and businesses include Rust-Oleum consumer and industrial coatings, DAP caulks and sealants, Tremco and Euclid Chemical construction products, Carboline protective coatings, Stonhard seamless flooring systems and Flowcrete flooring products. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "RPM International Q1 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for October 2026.

RPM International Inc. RPM is slated to report first-quarter fiscal 2027 results on Oct. 6, before the opening bell. In the last reported quarter, RPM's adjusted earnings per share (EPS) topped the Zacks Consensus Estimate by 2.7% and increased 9.9% year over year. Meanwhile, net sales beat the consensus estimate by 2.1% and increased 7.2% year over year. The company's earnings topped analysts' expectations in three of the trailing four quarters and missed on the remaining one occasion, with the average surprise being 10.6%. The Zacks Consensus Estimate for the fiscal first quarter's adjusted EPS has declined slightly in the past 30 days to $1.95 per share from $1.96. The revised estimated figure indicates 3.7% growth from the year-ago reported figure of $1.88. RPM International Inc. price-eps-surprise | RPM International Inc. Quote The consensus mark for net sales is pegged at $2.22 billion, indicating 4.9% year-over-year growth. RPM International's fiscal first-quarter net sales are likely to have increased year over year, supported by demand from high-performance buildings, infrastructure projects, maintenance and restoration. The Consumer segment is also likely to have benefited from easier comparisons and signs of stabilization in DIY markets. The company's system-selling approach and solid pipeline of construction projects are additional factors supporting sales activity. The company expects consolidated sales to increase in the mid-single-digit range in the fiscal first quarter from the prior-year record results. By segment, Construction Products Group ("CPG"), Performance Coatings Group ("PCG") and Consumer Group sales are each expected to increase in the mid-single-digit range. Our model predicts fiscal first-quarter CPG sales (which contributed 40.5% to fourth-quarter fiscal 2026 net sales) to grow 6.5% year over year to $938.7 million. We expect net sales in the Consumer Group (34.3%) and PCG (25.2%) segments to increase 3.7% and 3.8% year over year, respectively. RPM's focus on high-performance buildings and infrastructure is likely to support demand, while resilient repair and maintenance activity should provide additional support. The company's engineered system offerings also help it capture a larger share of project spending. However, economic uncertainty is likely to limit demand visibility. DIY markets remain a challenge, particularly for Consumer. A temporary supplier issue affecting propylene oxide-derived raw materials is also expected to have some negative impact on fiscal first-quarter sales growth, although the company expects the situation to improve toward the end of the summer. RPM's fiscal first-quarter earnings are likely to benefit from SG&A-focused optimization actions and pricing implemented to offset higher raw material costs. The company expects its previously announced SG&A reductions to generate $25 million in benefits in the fiscal first quarter, partly offset by higher health care and benefit expenses. At the same time, inflation is expected to pressure the gross margin. The company expects 5-6% in fiscal first-quarter raw material inflation, with pricing increases already implemented to offset the inflation on a dollar basis. Additional pricing is expected to help recover the gross margin percentage lost in the fiscal first quarter. The company expects consolidated adjusted EBITDA to increase year over year in the mid-single-digit range. Our model predicts the metric to rise 5.3% to $410 million. Our proven model does not conclusively predict an earnings beat for RPM International this time around. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here, as you will see below. Earnings ESP: The company's earnings ESP is -1.64%. You can uncover the best stocks before they are reported with our Earnings ESP Filter. Zacks Rank: RPM currently carries a Zacks Rank of 4 (Sell). According to our model, the following companies in the broader Basic Materials sector possess the right combination of elements to post an earnings beat in the upcoming quarter. Reliance, Inc. RS currently has an Earnings ESP of +3.26% and a Zacks Rank of 1. You can see the complete list of today's Zacks #1 Rank stocks here. Reliance reported better-than-expected earnings in two of the trailing four quarters and missed on the remaining two occasions, the average surprise being 3.2%. Earnings for Reliance's to-be-reported quarter are expected to grow 85.4% year over year. Air Products and Chemicals APD currently has an Earnings ESP of +0.79% and a Zacks Rank of 2. APD reported better-than-expected earnings in three of the trailing four quarters and missed on the remaining occasion, the average surprise being 2.9%. Earnings for APD's to-be-reported quarter are expected to soar 6.2% year over year. Agnico Eagle Mines AEM has an Earnings ESP of +6.05% and it sports a Zacks Rank of 3 at present. Agnico Eagle reported better-than-expected earnings in the trailing four quarters, the average surprise being 9.8%. Earnings for Agnico Eagle's to-be-reported quarter are expected to surge 13.4% year over year. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report RPM International Inc. (RPM) : Free Stock Analysis Report Air Products and Chemicals, Inc. (APD) : Free Stock Analysis Report Reliance, Inc. (RS) : Free Stock Analysis Report Agnico Eagle Mines Limited (AEM) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

RPM International (RPM) is set to report its earnings on Tuesday, October 6, 2026. The company has a market value of about $12.6 billion. Over the last twelve months, it generated $7.9 billion in revenue and $966 million in operating profit, with net income of $661 million. The reaction will turn on how the results and guidance land against expectations. Before the release, it helps to know how the stock has behaved after previous reports, and whether an early move has tended to carry on. See the earnings reaction history of all stocks RPM International's Historical Odds Of A Positive Post-Earnings Return Some observations on one-day (1D) post-earnings returns, measured from the last close before each release: - There are 20 earnings releases in the last five years, with 13 positive and 7 negative one-day (1D) returns. Positive 1D returns were seen 65% of the time. - Over the last three years, that share falls to 64% across 11 releases. - The median of the 13 positive 1D returns is 5.8%, and the median of the 7 negative ones is -3.7%. - The largest one-day reactions were 12.4% and -13.1%. The table below shows the 1D, 5-day (5D), and 21-day (21D) returns after each release, followed by summary statistics. Earnings Date | 1D | 5D | 21D 7/22/2026 | 5.8% | 10.1% | 10.0% 4/8/2026 | 12.4% | 12.4% | 6.4% 1/8/2026 | 1.7% | 6.1% | 12.1% 10/1/2025 | -0.6% | -4.4% | -7.6% 7/24/2025 | 8.6% | 5.1% | 10.1% 4/8/2025 | -9.1% | -0.8% | 3.0% 1/7/2025 | 1.1% | 2.9% | 3.0% 10/2/2024 | 6.3% | 8.0% | 7.1% 7/25/2024 | 6.8% | 9.5% | 3.1% 4/4/2024 | -5.8% | -6.6% | -8.2% 1/4/2024 | -3.0% | -0.1% | -0.2% 10/4/2023 | 6.3% | 6.1% | 0.7% 7/26/2023 | 11.2% | 13.0% | 6.6% 4/6/2023 | -3.7% | -2.7% | -3.2% 1/5/2023 | -13.1% | -9.3% | -6.3% 10/5/2022 | 3.3% | 3.5% | 3.1% 7/25/2022 | -0.7% | 5.0% | 7.7% 4/6/2022 | 4.9% | 3.2% | 2.6% 1/5/2022 | 0.3% | -4.0% | -9.2% 10/6/2021 | 2.6% | 0.9% | 12.2% Statistic | 1D | 5D | 21D # Positive | 13 | 13 | 14 # Negative | 7 | 7 | 6 Median Positive | 5.8% | 6.1% | 6.5% Median Negative | -3.7% | -4.0% | -7.0% Max Positive | 12.4% | 13.0% | 12.2% Max Negative | -13.1% | -9.3% | -9.2% Does The First Move Carry On? Another approach is to wait for the initial reaction and ask whether it tends to continue. The table below shows the correlation between the 1D return and the return over the following 5 and 21 trading days, and between the 5D return and the following 21 trading days. A value near 1 means the first move has tended to continue; near -1, to reverse; near 0, no consistent pattern. The strongest relationship over five years is between the 1D and the following 21 days, at -0.43 across 20 releases: the early move has tended to partly reverse. That is a tendency, not a rule, and it can break on any given report. History | 1D vs next 5D | 1D vs next 21D | 5D vs next 21D 5 Years | -0.40 | -0.43 | -0.19 3 Years | -0.50 | -0.43 | -0.37 Do Peers That Report First Offer A Clue? H.B. Fuller (FUL) usually reports a few weeks before RPM International and has already reported this season. The table covers the 9 reports where Fuller reported within 30 days of RPM. The correlation is 0.11; the closer to 1, the more the peer's reaction has foreshadowed RPM International's, and a negative value means it has tended to point the other way. RPM Earnings Date | RPM 1D | FUL 1D 4/8/2026 | 12.4% | 0.5% 10/1/2025 | -0.6% | -3.9% 4/8/2025 | -9.1% | 6.1% 10/2/2024 | 6.3% | 0.1% 4/4/2024 | -5.8% | -3.4% 10/4/2023 | 6.3% | 6.0% 4/6/2023 | -3.7% | -2.0% 10/5/2022 | 3.3% | 3.0% 4/6/2022 | 4.9% | 0.7% Correlation | - | 0.11 Trading around earnings is a bet on a single event. If you want upside with a smoother ride than an individual stock such as RPM can offer, consider the Trefis High Quality (HQ) Portfolio: about 30 stocks selected for consistent cash generation, strong margins, and resilient balance sheets, with a track record of outperforming a benchmark that combines the S&P 500, the S&P MidCap 400, and the Russell 2000.