Dap Products' buyer RPM to shut 23 plants

Little effect expected on local company


August 10, 1999|By Kevin L. McQuaid | Kevin L. McQuaid,SUN STAFF

The new owner of Dap Products Inc. said yesterday that it would close 23 plants and eliminate more than 700 jobs as part of a corporate restructuring and consolidation, although the purge is expected to have little effect on the local adhesive and sealant maker.

RPM Inc.'s moves to slash redundancies come less than a week after the Medina, Ohio-based company completed its $290 million purchase of Dap and announced plans to combine it with its Bondex adhesives division.

Glenn Hasman, RPM's vice president of financial operations, said that while there are "synergies" and the potential for "cross marketing" between Dap and Bondex, the local company will likely not experience cuts from the restructuring.

The cuts, which will involve roughly 10 percent of RPM's work force, are expected to generate an annual pretax savings of $23 million.

"We are not prepared to comment on facilities affected by the restructuring, pending notification of employees in these locations," said Thomas C. Sullivan, RPM's chairman and chief executive officer.

RPM will take a $45 million pretax charge to its fiscal 2000 first-quarter earnings as part of the consolidation.

Analysts applauded the moves as a way to boost RPM's moribund stock price. Shares in RPM lost 25 cents yesterday to close at $14.50.

The company also said yesterday that its fiscal fourth-quarter profit was up 8.6 percent, to $35.4 million from $32.6 million in the fiscal 1998 fourth quarter. Diluted earnings per share were 32 cents, compared with 30 cents a year ago. Fourth-quarter net sales were $475.3 million, up 5.1 percent from $452 million a year ago.

For the year, RPM said net income grew 7.6 percent, to $94.5 million, from $87.8 million a year ago, while diluted earnings per share went to 86 cents from 84 cents in fiscal 1998. Net sales increased 6 percent, to $1.7 billion from $1.6 billion in 1998.

RPM, whose most famous brands are Rust-Oleum and Zinsser, acquired Dap on Aug. 4. John McLaughlin, Dap's president and chief executive officer, could not be reached for comment.

Dap, which makes Kwik-Seal and Durabond brand caulks, sealants and adhesives, has roughly 300 employees who work in its Canton headquarters and at a Sparrows Point manufacturing plant. The company expects sales of $250 million this year.

Pub Date: 8/10/99

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