RPM Reports Record Fiscal 2027 First-Quarter Results

RPM International Inc., 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.

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.

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.

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.

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.