RPM Took 97.8 Days To Pay Suppliers, Up From 91.7, As Cash Flow Rose And Gross Margin Fell
RPM's 10-Q shows operating cash flow of $263.9 million, helped by slower supplier payments and a larger bank-financed vendor program.
RPM International took 97.8 days on average to pay suppliers at August 31, 2026, versus 91.7 days a year earlier, according to its 10-Q filed Tuesday. The longer terms helped cash flow in a quarter of record sales, while gross margin fell by a full percentage point.
What the 10-Q says about cash
Operating cash flow was $263.9 million, versus $237.5 million a year earlier. Working capital did much of the lifting: receivables released $142.2 million and payables added $57.3 million, against $7.8 million of cash from payables a year before.
The company said the change in accounts payable provided about $49.5 million more cash than in the first three months of fiscal 2026. Management pointed to cost inflation and better procurement under its margin-improvement program.
On receivables, the filing ties the strong collections to timing: CPG, its construction products segment, sold more in the prior quarter than in the first quarter of fiscal 2027. Average days sales outstanding were 60.8 at August 31, 2026, versus 61.0 a year earlier.
The supplier finance balance keeps growing
RPM's supplier finance program, in which a bank pays vendors early while RPM pays on its original terms, stood at $70.2 million at August 31, 2026. That compares with $58.1 million at May 31, 2026. The balance sits inside accounts payable.
The prior quarter's filing put days payables at 93.7 and the program balance at $42.1 million. Payables terms have lengthened across three consecutive reporting dates.
Outflows that offset part of the benefit
Accrued compensation fell to $185.2 million from $307.3 million at May 31, 2026. Other accrued liabilities used $61.5 million more cash than a year earlier, which the company attributed to fewer contract liabilities, given the timing of construction jobs in progress, and lower taxes payable.
The filing also reports that CPG had organic sales decline, tied to a slowdown in healthcare and education markets and supplier raw material availability issues. The overall sales increase came from prior-period acquisitions.
Cash used for investing fell by $142.6 million to $39.8 million. Remaining buyback authority was $792.4 million at August 31, 2026, after a $700 million increase announced July 22, 2026, versus $22.4 million of repurchases in the quarter. Management also approved moving certain Latin America businesses into its Performance Coatings segment in August, and after quarter-end completed the purchase of Volteco S.p.A., an Italy-based waterproofing supplier.
What to watch
The 10-Q for the quarter ending November 30, 2026 should show whether payables days stay near 98 and whether the supplier finance balance moves past $70.2 million.
RPM shares were at $97.95, up 2.78%, as of 2:11 p.m. ET Tuesday, for a market value of $12.2 billion.
Sources
- 10-Q Filing — RPM International (RPM) — SEC EDGAR
- 10-Q Filing — RPM International (RPM), Q1 2026 filed 2026-04-08 (comparison basis) — SEC EDGAR
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