RPM International income increased 10 percent, sales $1.07 billionStaff writer ▼ | January 8, 2015
RPM International reported a 10% increase in net income and an 8% increase in earnings per diluted share on flat sales for its fiscal 2015 second quarter ended November 30, 2014.
The second quarter Net sales were flat compared to last year
"Second-quarter operating performance was mixed, with stronger sales in our businesses serving the U.S. commercial construction market offset by weaker results in Europe, a continued unfavorable year-over-year trend from our Kirker nail enamels business and the negative impact of foreign currency," stated Frank C. Sullivan, chairman and chief executive officer.
During the fiscal 2015 second quarter, industrial segment sales grew 1.4% to $718.3 million from $708.7 million in the fiscal 2014 second quarter. Organic sales improved 0.7%, including 3.3% in foreign exchange translation losses, while acquisition growth added 0.7%. Industrial segment EBIT declined 5.9% to $79.0 million from $83.9 million in the same period a year ago.
Organic sales declined 4.2%, including foreign exchange losses of 1.3%
"As stated in the first quarter, Kirker continues to be challenged by a comparison to extremely strong prior-year performance. In anticipation of potential volatility in Kirker's earnings, our acquisition deal structure allows for performance-related payments to offset any shortfall in earnings. As a result, we reversed the $17 million earn-out accrual into income when it became clear that Kirker would not be able to meet its performance objectives this year," stated Sullivan.
Kirker continues to be challenged by a comparison to extremely strong prior-year performance.
Frank C. Sullivan, chairman and CEO
Unusual non-operating costs in this year's second quarter totaled $2.8 million pre-tax, and were related primarily to legal expenses incurred in conjunction with a Securities and Exchange Commission investigation of timing of expense accruals in the 2013 fiscal year, which did not affect full-year earnings, along with the Specialty Products Holding Corp. (SPHC) settlement, and a voluntary self-disclosure agreement with the state of Delaware for unclaimed property. ■