Monday, specialty chemical products maker RPM International, Inc. (RPM) reported a profit for the fourth quarter of 2009 in the absence of a charge incurred in the prior-year period. Excluding items, RPM reported a 44% decline in earnings for the quarter hurt by a 20% decline in sales. In addition, the company sees year-over-year earnings growth during 2010.
The manufacturer of specialty paints and protective coatings reported net income for the quarter of $39.3 million or $0.31 per share, compared with a loss of $87.6 million or $0.73 per share in the same period last year. Results for the most recent quarter included a one-time charge of $15.5 million for goodwill and other intangible asset impairments in the company's industrial segment,while results for the prior year period included a one-time pre-tax charge of $288.1 million associated with asbestos-related liabilities.
Excluding asbestos and impairment-related charges, net income for the fourth quarter declined 44.0% to $54.6 million from $97.5 million in the year-ago quarter. Earnings per share declined to $0.43 per share from $0.75 per share in the prior year period and came in below the $0.45 per share projected by eight analysts polled by Thomson Reuters. Analysts' estimates typically exclude special items.
Quarterly sales fell 20.3% to $857.3 million from $1.08 billion in the year-ago quarter. Four Street analysts expected the company to report revenues of $960.45 million for the quarter.
The company operates in two segments, Industrial and Consumer. Industrial segment sales slid 21.9% to $536.1 million from $686.0 million a year ago. Organic sales fell 23.5%, including a net foreign exchange loss of 7.2%, partially offset by a gain of 1.6% from acquisitions. Consumer segment sales declined 17.6% to $321.2 million from $390.0 million in the corresponding period last year. The decline was all organic, including a net foreign exchange loss of 3.2%.
For the twelve-month period, net income rose to $119.6 million or $0.93 per share from $47.7 million or $0.39 per share in fiscal 2008. Excluding items, net income declined to $134.9 million or $1.05 per share from $232.8 million or $1.81 per share last year. Sales fell to $3.37 billion from $3.64 billion a year ago.
Analysts expected the company to report earnings of $1.04 per share on revenues of $3.47 billion for the full year.
Looking ahead, the company said for fiscal 2010, a turnaround in consumer business combined with the expense reduction actions taken during the past fiscal year, will enable the segment to generate consistent earnings growth throughout the year with a modest increase in sales.
RPM said while its industrial businesses will continue to face economic challenges, due to a reduction in breakeven point, lower cost structure will allow the segment to improve performance compared to the final six months of fiscal 2009. The company said it expects a recovery in its industrial markets sometime in the spring of 2010.
Depending on the timing of the expected industrial market turnaround, RPM said it expects earnings per share to grow in the range of 5% to 25% on a consolidated basis for the fiscal year ending May 31, 2010, from the adjusted $1.05 per share earned in fiscal 2009.
RPM is currently down $0.59 or 3.88% and trades at $14.73.
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