NYSE:RPM
RPM INTERNATIONAL INC/DE/
A global industrial leader delivering essential fasteners, adhesives, and chemical solutions with strong profitability and a diversified product portfolio.
Key Metrics
Investment Thesis
Bull Case
Investors may favor RPM due to its recurring revenue model from long-term contracts with major industrial clients which provides stable cash flow visibility. The company's diverse product mix across four segments offers a natural hedge against sector-specific downturns, reducing overall business volatility. Strong free cash flow generation supports consistent dividend growth and capital allocation flexibility for strategic acquisitions or R&D investments.
Bear Case
Bearish investors might worry about the cyclical nature of the industrial market exposing RPM to economic slowdowns that reduce manufacturing demand. High levels of goodwill at $1.62B pose an impairment risk if acquired businesses fail to meet integration targets or generate expected synergies. Rising input costs coupled with potential geopolitical tensions could erode margins faster than pricing power allows, impacting net income growth.
About RPM INTERNATIONAL INC/DE/
RPM International Inc. designs, develops, manufactures, and markets a wide range of industrial components including fasteners, adhesives, abrasives, and specialty chemicals primarily serving the aerospace, automotive, electronics, and renewable energy sectors globally. The company leverages its extensive portfolio of over 10,000 products to provide critical solutions for high-performance industries requiring precision engineering and material reliability. With revenue reaching $7.37B in 2025 and net profit climbing to $690.3M, RPM demonstrates consistent growth driven by diversified product lines and strategic international expansion.
Analysis
Management Discussion
Management delivered robust financial performance with revenue growing to $7.37B in 2025, up from $7.26B in 2023, reflecting successful product innovation and market share gains. Operating profit increased to $792.8M while cash flow from operations reached $768.2M, indicating efficient working capital management and strong liquidity with $302.1M in ending cash. The company returned substantial value to shareholders through $255.6M in dividends and $70M in share repurchases despite investing $825.5M in long-term growth assets.
Industry Overview
The industrial components and materials sector is characterized by high barriers to entry due to stringent quality standards required in aerospace, automotive, and medical applications. Competition is intense from both established global players and niche regional suppliers, forcing companies to innovate continuously to maintain market share. Consolidation trends favor larger entities with broader portfolios that can offer one-stop-shop solutions to complex engineering projects.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Revenue | $7.26B | $7.34B | $7.37B |
| Cost of Revenue | $4.51B | $4.32B | $4.32B |
| Gross Profit | $2.75B | $3.01B | $3.05B |
| Operating Expenses | $2.10B | $2.23B | $2.26B |
| Operating Income | $649.4M | $787.8M | $792.8M |
| R&D | $86.6M | $92.2M | $94.7M |
| G&A | $1.96B | $2.11B | $2.15B |
| Stock-Based Comp | $28.7M | $25.9M | $27.0M |
| D&A | $154.9M | $171.3M | $193.8M |
| Depreciation | $108.4M | $129.8M | $146.3M |
| Amortization | $43.5M | $39.1M | $45.5M |
| Other OpEx | $56.0M | $21.0M | $12.5M |
| Non-Operating Income | $0 | $0 | $0 |
| Interest Expense | $119.0M | $118.0M | $96.5M |
| Pre-Tax Income | $649.4M | $787.8M | $792.8M |
| Income Tax | $169.7M | $198.4M | $102.4M |
| Continuing Ops | $479.7M | $589.4M | $690.3M |
| Discontinued Ops | $0 | $0 | $0 |
| Net Income | $479.7M | $589.4M | $690.3M |
| Minority Interest | $1.0M | $1.0M | $1.6M |
| Net to Common | $478.7M | $588.4M | $688.7M |
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Current Assets | $3.18B | $2.90B | $3.17B |
| Cash & Equivalents | $215.8M | $237.4M | $302.1M |
| Marketable Securities | $5.1M | — | — |
| Accounts Receivable | $1.50B | $1.42B | $1.51B |
| Inventory | $1.14B | $956.5M | $1.04B |
| Prepaid Expenses | $329.8M | $282.1M | $322.6M |
| Other Current Assets | $-5.1M | $0 | $0 |
| Long-Term Assets | $3.60B | $3.69B | $4.61B |
| PP&E (Net) | $1.24B | $1.33B | $1.47B |
| Intangibles | $555.0M | $513.0M | $780.8M |
| Goodwill | $1.29B | $1.31B | $1.62B |
| Operating Leases | $329.6M | $331.6M | $370.4M |
| LT Securities | $22.1M | — | — |
| Other LT Assets | $158.1M | $206.7M | $363.4M |
| Total Assets | $6.78B | $6.59B | $7.78B |
| Current Liabilities | $1.49B | $1.47B | $1.47B |
| Accounts Payable | $680.9M | $649.6M | $755.9M |
| Current Debt | $178.6M | $136.2M | $7.7M |
| Current Leases | $59.6M | $66.3M | $69.8M |
| Deferred Revenue | $42.4M | $45.0M | $56.6M |
| Other Current Liab | $529.3M | $568.9M | $577.4M |
| Long-Term Liabilities | $3.15B | $2.61B | $3.42B |
| LT Operating Leases | $285.5M | $281.3M | $317.3M |
| Other LT Liab | $2.79B | $2.25B | $3.02B |
| Total Liabilities | $4.64B | $4.07B | $4.89B |
| Shareholders' Equity | $2.14B | $2.51B | $2.89B |
| Retained Earnings | $2.40B | $2.76B | $3.19B |
| AOCI | $-604.9M | $-537.3M | $-533.6M |
| Total L&E | $6.78B | $6.59B | $7.78B |
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Net Income (CFO) | $479.7M | $589.4M | $690.3M |
| Non-Cash Adjustments | $88.8M | $826.1M | $-281.2M |
| Working Capital Changes | $8.6M | $-293.3M | $359.1M |
| Cash from Operations | $577.1M | $1.12B | $768.2M |
| Cash from Investing | $-249.7M | $-206.4M | $-825.5M |
| Share Buybacks | $50.0M | $55.0M | $70.0M |
| Dividends Paid | $213.9M | $231.9M | $255.6M |
| Cash from Financing | $-301.2M | $-890.0M | $121.9M |
| FX Effect | $-12.1M | $-4.2M | $165.0K |
| Net Change in Cash | $14.1M | $21.6M | $64.8M |
| Beginning Cash | $201.7M | $215.8M | $237.4M |
| Ending Cash | $215.8M | $237.4M | $302.1M |
Frequently Asked Questions
How does RPM INTERNATIONAL INC/DE/ make money?
The company operates through four primary segments: Fasteners providing mechanical joining solutions; Adhesives offering bonding and sealing technologies; Abrasives supplying finishing and grinding materials; and Chemicals delivering specialty formulations for various industrial applications.
What are the main risks for RPM?
Fluctuations in raw material costs, particularly nickel and other metals used in fasteners and chemicals, can compress operating margins if not hedged effectively. Regulatory changes in environmental compliance or trade tariffs could disrupt global supply chains and increase production expenses. Heavy reliance on large industrial customers creates concentration risk where a single client loss could impact revenue significantly.
What is RPM's competitive advantage?
RPM possesses a deep technology portfolio with over 10,000 proprietary products that create high switching costs for customers in regulated industries like aerospace and defense. The company benefits from significant economies of scale and global manufacturing footprints that reduce logistics costs while ensuring rapid local delivery. Strong intellectual property rights on specialized formulations protect margins against generic competition.
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Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.