RPM International Inc. recently reported record sales for its fiscal 2017 third quarter ended February 28. Third-quarter net income declined vs. the prior-year period primarily due to a pre-tax charge of $4.9 million for an intangible impairment on the Restore product line, and a pre-tax charge of $4.2 million for the closing of a European manufacturing facility.
Net sales grew 3.4% to $1 billion in the fiscal 2017 third quarter from $988.6 million in the fiscal 2016 third quarter. Net income of $11.9 million in the fiscal 2017 third quarter decreased 35.8% from $18.6 million reported a year ago.
During the current quarter, certain negative trends in the Restore product line where believed to have led to a loss of market share, resulting in a downward revision to its long-term forecast. This was determined to represent an impairment triggering event and, after additional testing, resulted in a pre-tax impairment charge of $4.9 million. Also during the quarter, an unprofitable operation in Europe was closed that resulted in a pre-tax charge of $4.2 million.
“We were pleased with our consolidated sales growth during the third quarter, which is typically slow due to cold winter weather that limits outdoor repair, maintenance and construction activities,” said Frank C. Sullivan, chairman and CEO.
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