This morning, we announced our financial results for our fiscal 2020 third quarter, which concluded on February 29. Thanks to your efforts, we generated sales of $1.17 billion during the quarter, an increase of 3% over the same period last year. Our adjusted earnings before interest and taxes (EBIT) were up 30.4% to $60.5 million compared to last year’s third quarter. These excellent bottom-line results were largely due to initiatives you are implementing under our MAP to Growth operating improvement program, as well as pricing and moderating raw material costs.

Looking ahead, the fourth quarter is seasonally our strongest and was off to a fair start in March. However, like most companies, we expect our financial results to be impacted by the disruption and uncertainty COVID-19 is having on the global economy. According to current government projections, it appears that the COVID-19 crisis will reach its peak in April or May. Today, nearly all of our plants are open in North America, where we generate 74% of our sales, while some of our international plants have been shut down due to government mandates around the world. While these shutdowns are of various durations, ranging from days to weeks, they are likely to impact our fourth-quarter financial results in April and May. Based on this information, we expect our consolidated fourth-quarter revenue to be down 10% to 15% year over year.

As one of the world’s largest suppliers of specialty coatings and building materials, RPM is well positioned to weather the storm created by COVID-19. We are actively managing our operations and expenses to maintain good cash flow and have significant liquidity and a strong balance sheet, which we anticipate will keep us in a solid financial position. Many of our products are used for construction, maintenance and repair projects, which are deemed essential in many cases and are relatively recession resistant. A large number of our North American customers, such as those in construction and DIY home and hardware retail, are also considered essential and currently remain open for business. Raw material cost inflation seems to be moderating in a number of our key product categories. Our global supply chain and business operations remain strong. With people spending more time in their homes, there is potential for increased activity in DIY projects. We continue to be proactive in taking action as the situation evolves.

I encourage you to read our news release and listen to our conference call with financial analysts for more information about our third-quarter financial results and how we are addressing the impact of COVID-19 on the business moving forward.

You and your 15,000 RPM colleagues around the world are demonstrating incredible resilience by finding ways to protect your health, support your communities and maintain our business operations. We truly have the best people in the business and I thank you for your continued investment of time and talent in RPM’s growth and success. I wish you and your families good health. Working together, we will emerge from this global health and economic crisis stronger than ever.

Sincerely,
Frank C. Sullivan
Chairman and CEO