RPM International Inc. (RPM) swung to a net loss for the quarter ended Nov. 30, 2016. The company has made a net loss of $70.93 million, or $ 0.54 a share in the quarter, against a net profit of $83.43 million, or $0.62 a share in the last year period. On an adjusted basis, earnings per share were at $0.52 for the quarter compared with $0.55 in the same period last year.
Revenue during the quarter grew 3.01 percent to $1,190.77 million from $1,155.98 million in the previous year period. Gross margin for the quarter expanded 108 basis points over the previous year period to 43.81 percent. Operating margin for the quarter stood at negative 7.23 percent as compared to a positive 12.23 percent for the previous year period.
Operating loss for the quarter was $86.11 million, compared with an operating income of $141.34 million in the previous year period.
"We are pleased with the sales growth in the second quarter across each of our three segments in light of economic conditions and in comparison to our peer companies’ recent performance. Even in our more global economically challenged industrial segment businesses, we are generating solid growth in local currencies. Translational and transactional foreign exchange challenges, previously communicated capacity issues in our consumer segment, and higher corporate benefit costs combined to generate lower year-over-year EBIT results, excluding the additional impairment charge and the decision to exit the Flowcrete business in the Middle East. Mid-year restructuring and expense reduction activities and the benefit of first-half acquisitions, along with having addressed the capacity situation at our DAP subsidiary, will allow revenue growth to be better leveraged to our bottom line during the fiscal 2017 fourth quarter and beyond," stated Frank C. Sullivan, chairman and chief executive officer.
For financial year 2017, the company projects diluted earnings per share to be in the range of $1.54 to $1.64. The company projects diluted earnings per share to be in the range of $2.62 to $2.72 on adjusted basis.
Operating cash flow falls marginally
RPM International Inc. has generated cash of $158.73 million from operating activities during the first half, down 4.99 percent or $8.34 million, when compared with the last year period.
The company has spent $112.85 million cash to meet investing activities during the first six months as against cash outgo of $40.42 million in the last year period.
The company has spent $98.98 million cash to carry out financing activities during the first six months as against cash outgo of $97.94 million in the last year period.
Cash and cash equivalents stood at $205.91 million as on Nov. 30, 2016, up 8.03 percent or $15.30 million from $190.61 million on Nov. 30, 2015.
Debt comes down marginally
RPM International Inc. has recorded a decline in total debt over the last one year. It stood at $1,638.85 million as on Nov. 30, 2016, down 1.48 percent or $24.68 million from $1,663.53 million on Nov. 30, 2015. Total debt was 36.04 percent of total assets as on Nov. 30, 2016, compared with 36.82 percent on Nov. 30, 2015. Debt to equity ratio was at 1.28 as on Nov. 30, 2016, down from 1.29 as on Nov. 30, 2015.
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