RPM Reports Fiscal 2026 Second-Quarter Results

• Record second-quarter sales of $1.91 billion, an increase of 3.5% compared to the prior-year record
• Second-quarter net income of $161.2 million, diluted EPS of $1.26, and EBIT of $229.0 million
• Second-quarter adjusted diluted EPS of $1.20, a decrease of 13.7% compared to the prior-year record and adjusted EBIT of $226.6 million, a decrease of 11.2% compared to the prior-year record
• Fiscal 2026 third-quarter outlook calls for mid-single-digit sales growth and adjusted EBIT to increase mid- to high-single digits
• Fiscal 2026 fourth-quarter outlook calls for mid-single-digit sales growth and adjusted EBIT to increase low- to high-single-digits
• Implementing SG&A-focused optimization actions that are expected to generate benefits of approximately $100 million annually

RPM International Inc. (NYSE:RPM), a world leader in specialty coatings, sealants and building materials, today reported financial results for its fiscal 2026 second quarter ended November 30, 2025.

Frank C. Sullivan, RPM chairman and CEO commented, "In the second quarter, sales came in at the lower end of our expectations. The prolonged government shutdown contributed to the trend of longer lead times on construction projects and further pressured already negative consumer sentiment. As a result, sales growth turned negative as the quarter progressed, and earnings declined as we were unable to fully leverage growth investments and overcome temporary margin headwinds from plant and warehouse facility consolidations. Given the slower demand environment, we have moved quickly to put in place SG&A-focused optimization actions that will save approximately $100 million annually once fully implemented, while continuing focused growth investments in our highest potential opportunities."

SG&A-Focused Optimization Actions

In response to current market conditions, the company is implementing actions that, once fully in place, will generate annual benefits of approximately $100 million. Approximately $5 million of the benefits are expected to be realized in the third quarter of fiscal 2026, an incremental $20 million in the fourth quarter of fiscal 2026 and an incremental $75 million in fiscal 2027. Additional details on the cost to implement these initiatives will be available in April 2026.

Second-Quarter 2026 Consolidated Results

Record second-quarter sales were driven by acquisitions and engineered solutions for high-performance buildings, which were partially offset by soft DIY demand. Growth in several construction businesses slowed as the quarter progressed, as project lead times became longer, due in part to the extended government shutdown.

Geographically, Europe led sales growth with an increase of 13.9%, driven by acquisitions and favorable foreign exchange. North America sales increased 1.9%, driven by acquisitions and high-performance building solutions in the U.S., partially offset by softness in Canada. Emerging markets were led by Africa / Middle East, with growth driven by high-performance building and infrastructure projects.

Sales included a 0.5% organic decline, 3.4% growth from acquisitions, and a 0.6% benefit from foreign currency translation.

Adjusted EBIT declined as growth investments, reduced fixed-cost absorption from lower volumes and temporary inefficiencies from plant and warehouse facility consolidations more than offset MAP 2025 operational improvements. Increased healthcare and acquisition expenses also contributed to the adjusted EBIT decline.

The adjusted diluted EPS decline was primarily driven by lower adjusted EBIT, along with higher interest expense resulting from debt being used to finance acquisitions.

Second-Quarter 2026 Segment Sales and Earnings

Record CPG sales were driven by roofing solutions serving high-performance buildings, partially offset by weaker sales in the disaster restoration business due to reduced storm activity compared to the prior year.

Sales included 0.8% organic growth, 0.5% growth from acquisitions net of divestitures, and a 1.1% benefit from foreign currency translation.

Adjusted EBIT declined as SG&A growth investments, temporary inefficiencies from plant consolidations and lower fixed-cost absorption at businesses with volume declines more than offset MAP 2025 operational improvement benefits.

Record PCG sales were driven by broad-based growth across its businesses. Acquisitions also contributed to the sales increase.

Sales included 2.7% organic growth, a 1.1% increase from acquisitions, and a 0.6% benefit from foreign currency translation.

Adjusted EBIT growth was approximately flat as the higher sales and MAP 2025 operational improvement benefits were offset by growth investments and unfavorable mix.

The Consumer Group's record sales were driven by acquisitions and pricing to recover inflation. This growth was partially offset by softness in DIY markets, product rationalization, and delayed sales related to software system implementations and a shared distribution center integration. This softness became more pronounced toward the end of the quarter.

Sales included a 4.7% organic decline, 8.7% growth from acquisitions, and a 0.1% benefit from foreign currency translation.

Adjusted EBIT declined as lower volumes, a plant consolidation, and the startup of a shared distribution center all reduced earnings, which more than offset MAP 2025 operational improvement benefits. Lower demand at the Color Group also pressured profitability.

Adjusted EBIT excludes a $12.7 million gain on a fair value adjustment associated with the Star Brands Group acquisition, as aggressive targets needed to achieve the earnout are unlikely to be met.

Cash Flow and Financial Position

During the first six months of fiscal 2026:

• Cash provided by operating activities was $583.2 million, the second-highest amount in the company's history, compared to $527.5 million in the prior-year period with the increase driven by improved working capital efficiency.
• Capital expenditures were $111.8 million compared to $100.7 million during the first six months of fiscal 2025, with the increase driven by growth investments, including the purchase of RPM's new Malaysian plant.
• The company returned $168.7 million to stockholders through cash dividends and share repurchases, an increase of 5.8% compared to the prior year.
• The company had multiple small divestitures as part of MAP 2025 initiatives to rationalize production lines, with proceeds from these transactions totaling $3.9 million in the second fiscal quarter.

As of November 30, 2025:

• Total debt was $2.52 billion compared to $2.03 billion a year ago, with the $494.0 million increase driven by debt used to finance acquisitions.
• Total liquidity, including cash and committed revolving credit facilities, was $1.10 billion, compared to $1.50 billion a year ago, with the decrease driven by the use of credit facilities to finance acquisitions.

Business Outlook

Sullivan said, "Driven by our targeted growth investments, we expect to outgrow underlying markets in the third quarter. However, market demand is expected to remain sluggish as consumer confidence is low and uncertainty in construction markets, including weather-related factors, persists."

He continued, "While visibility for the fourth quarter remains limited, we are controlling what we can and expect to benefit from activity related to previously deferred construction projects and are encouraged that our construction pipeline remains solid. We will also benefit from the implementation of optimization actions, which will serve as a tailwind to margins."

The company expects the following in the fiscal 2026 third quarter:

• Consolidated sales to increase in the mid-single-digit percentage range compared to prior-year results.
• Consolidated adjusted EBIT to increase in the mid- to high-single digit percentage range compared to prior-year results
• Consumer sales growth to be moderately higher than the other two segments due to acquisitions.

The company expects the following in the fiscal 2026 fourth quarter:

• Consolidated sales to increase in the mid-single-digit range compared to prior-year record results.
• Consolidated adjusted EBIT to be up low- to high-single-digits compared to prior-year record results.

Earnings Webcast and Conference Call Information

Management will host a conference call to discuss these results beginning at 10:00 a.m. ET today. The call can be accessed via webcast at www.RPMinc.com/Investors/Presentations-Webcasts or by dialing 1-844-481-2915 or 1-412-317-0708 for international callers and asking to join the RPM International call. Participants are asked to call the assigned number approximately 10 minutes before the conference call begins. The call, which will last approximately one hour, will be open to the public, but only financial analysts will be permitted to ask questions. The media and all other participants will be in a listen-only mode.

For those unable to listen to the live call, a replay will be available from January 8, 2026, until January 15, 2026. The replay can be accessed by dialing 1-855-669-9658 or 1-412-317-0088 for international callers. The access code is 1320592. The call also will be available for replay and as a written transcript via the RPM website at www.RPMinc.com.

About RPM

RPM International Inc. owns subsidiaries that are world leaders in specialty coatings, sealants, building materials and related services. The company operates across three reportable segments: consumer, construction products and performance coatings. RPM has a diverse portfolio of market-leading brands, including Rust-Oleum, DAP, Zinsser, Varathane, The Pink Stuff, Legend Brands, Stonhard, Carboline, Tremco, Dryvit and Nudura. From homes and workplaces to infrastructure and precious landmarks, RPM's brands are trusted by consumers and professionals alike to help build a better world. The company employs approximately 17,800 individuals worldwide. Visit www.RPMinc.com to learn more.

Use of Non-GAAP Financial Information

To supplement the financial information presented in accordance with Generally Accepted Accounting Principles in the United States ("GAAP") in this earnings release, we use EBIT, adjusted EBIT and adjusted earnings per share, which are all non-GAAP financial measures. EBIT is defined as earnings (loss) before interest and taxes, with adjusted EBIT and adjusted earnings per share provided for the purpose of adjusting for one-off items impacting revenues and/or expenses that are not considered by management to be indicative of ongoing operations. We evaluate the profit performance of our segments based on income before income taxes, but also look to EBIT as a performance evaluation measure because interest income (expense), net is essentially related to corporate functions, as opposed to segment operations. For that reason, we believe EBIT is also useful to investors as a metric in their investment decisions. EBIT should not be considered an alternative to, or more meaningful than, income before income taxes as determined in accordance with GAAP, since EBIT omits the impact of interest and investment income or expense in determining operating performance, which represent items necessary to our continued operations, given our level of indebtedness. Nonetheless, EBIT is a key measure expected by and useful to our fixed income investors, rating agencies and the banking community all of whom believe, and we concur, that this measure is critical to the capital markets' analysis of our segments' core operating performance. We also evaluate EBIT because it is clear that movements in EBIT impact our ability to attract financing. Our underwriters and bankers consistently require inclusion of this measure in offering memoranda in conjunction with any debt underwriting or bank financing. EBIT may not be indicative of our historical operating results, nor is it meant to be predictive of potential future results. See the financial statement section of this earnings release for a reconciliation of EBIT and adjusted EBIT to income before income taxes, and adjusted earnings per share to earnings per share. We have not provided a reconciliation of our third-quarter fiscal 2026 or fourth-quarter fiscal 2026 adjusted EBIT guidance because material terms that impact such measure are not in our control and/or cannot be reasonably predicted, and therefore a reconciliation of such measure is not available without unreasonable effort.

Forward-Looking Statements

This press release includes forward-looking statements relating to our business. These forward-looking statements, or other statements made by us, are made based on our expectations and beliefs concerning future events impacting us and are subject to uncertainties and factors (including those specified below), which are difficult to predict and, in many instances, are beyond our control. As a result, our actual results could differ materially from those expressed in or implied by any such forward-looking statements. These uncertainties and factors include (a) global and regional markets and general economic conditions, including uncertainties surrounding the volatility in financial markets, the availability of capital and the viability of banks and other financial institutions; (b) the prices, supply and availability of raw materials, including assorted pigments, resins, solvents, and other natural gas- and oil-based materials; packaging, including plastic and metal containers; and transportation services, including fuel surcharges; (c) continued growth in demand for our products; (d) legal, environmental and litigation risks inherent in our businesses and risks related to the adequacy of our insurance coverage for such matters; (e) the effect of changes in interest rates; (f) the effect of fluctuations in currency exchange rates upon our foreign operations; (g) changes in global trade policies, including the adoption or expansion of tariffs and trade barriers; (h) the effect of non-currency risks of investing in and conducting operations in foreign countries, including those relating to domestic and international political, social, economic and regulatory factors; (i) risks and uncertainties associated with our ongoing acquisition and divestiture activities; (j) the timing of and the realization of anticipated cost savings from restructuring initiatives, the ability to identify additional cost savings opportunities, and the risks of failing to meet any other objectives of our improvement plans; (k) risks related to the adequacy of our contingent liability reserves; (l) risks relating to a public health crisis similar to the Covid pandemic; (m) risks related to acts of war similar to the Russian invasion of Ukraine; (n) risks related to the transition or physical impacts of climate change and other natural disasters or meeting sustainability-related voluntary goals or regulatory requirements; (o) risks related to our or our third parties' use of technology including artificial intelligence, data breaches and data privacy violations; (p) the shift to remote work and online purchasing and the impact that has on residential and commercial real estate construction; and (q) other risks detailed in our filings with the Securities and Exchange Commission, including the risk factors set forth in our Form 10-K for the year ended May 31, 2025, as the same may be updated from time to time. We do not undertake any obligation to publicly update or revise any forward-looking statements to reflect future events, information or circumstances that arise after the filing date of this press release.

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For more information, contact Matt Schlarb, Vice President – Investor Relations & Sustainability, at 330-220-6064 or [email protected].