RPM International Inc. said it persevered in the face of “unprecedented” supply chain issues and more as it reported record third-quarter sales on Wednesday.
The Medina company also said it expects the Russian-Ukrainian war to drive up energy and transportation costs and also exacerbate supply chain and raw material shortages. RPM International companies manufacture coatings, sealants, building products and more; brands include Rust-Oleum, DAP, Zinsser, Tremco and others.
Even so, RPM executives said they expect sales to increase in the fourth quarter.
The company reported earnings before the stock market opened on Wednesday, with net profit lower than a year ago.
RPM reported net income of $33 million in the third quarter, or 25 cents per share, on record revenue of $1.43 billion for the quarter ending Feb. 28. That compares to net income of $38.2 million, or 29 cents per share, on revenue of $1.27. billion a year ago.
Adjusted earnings were 38 cents per share. Third-quarter net profit and revenue beat analysts’ expectations.
“RPM associates persevered in the face of unprecedented supply chain challenges, Omicron-related disruptions and inflation to generate record [earnings] and record third quarter sales despite a tough year-ago comparison,” Frank C. Sullivan, chairman and chief executive officer, said in a press release.
The company was able to quickly respond to supply chain challenges by increasing in-house resin production at the manufacturing facility it acquired in Texas last September, Sullivan said.
RPM said it expects its operations and those of its suppliers to be affected in the fourth quarter by ongoing supply chain challenges and raw material shortages. A strengthening US dollar will also have an adverse impact on the translation of RPM’s results in international markets, the company said.
“While RPM’s sales to Ukraine and Russia are not significant, Russian sanctions are exacerbating energy and transportation cost inflation,” the company said in its press release. The sanctions also create supply problems for plant-based raw materials as well as petroleum derivatives, the company said. Rising interest rates could slow business and consumer spending in the coming months, the company said.
RPM said it expects fourth-quarter fiscal 2022 sales to show teenage percentage growth.
Beacon Journal reporter Jim Mackinnon can be reached at 330-996-3544 or email@example.com. Follow him @JimMackinnonABJ on Twitter or www.facebook.com/JimMackinnonABJ.