A hurricane's damage doesn't end when the winds stop blowing. While Motley Fool Income Investor recommendation RPM International (NYSE:RPM) already faced challenges for growth and margins, Katrina, Rita, and Wilma have made its tough situation even worse.

This specialty chemicals company's second-quarter results show sales rising nearly 19% as reported, and nearly 9% on an organic basis, with more than 3% of that coming from price increases. At the risk of sounding like a broken record, the industrial business was again the source of strength -- industrial sales were up 27.6% (10.9% organic) while consumer sales were up 5.9% (almost all of that organic).

Margins, especially the gross margin line, were ugly. Gross margin dropped from 43.4% last year to 40.5% this quarter, and selling, general, and administrative expenses as a percentage of sales rose almost a full percentage point. The gross margin line was the most painful, though -- if the company had enjoyed its year-ago margin in this quarter, it would have added more than $0.11 per share to earnings.

While it's certainly fair to partially blame RPM's woes on the hurricanes and the resulting price spikes in many petrochemicals and related supplies, I'd also note that gross margins have been trending down since 2002. You could argue that the hurricanes provide a new excuse for an old problem.

It's not all grim news, though. Free cash flow for the last six months is up more than 9%, and it's more than twice the level needed to maintain the company's healthy dividend. What's more, management seems optimistic that reconstruction in the Gulf Coast region will help fuel a stronger second half to the year.

There is no shortage of plays on Gulf Coast reconstruction and/or specialty chemicals -- options range from General Cable (NYSE:BGC) to Quanta (NYSE:PWR) to PPG (NYSE:PPG) and Shaw (NYSE:SGR). Forget the stories, though, and be sure to drill down into the real fundamentals. RPM has some attractive aspects to its story, but rebuilding alone won't put this company back on firm footing for the long haul.

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Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).