Frequently Asked Questions

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1. What were RPM’s fiscal 2017 second-quarter results?

Net sales of $1.19 billion were up 3.0% over the $1.16 billion reported a year ago. Organic sales improved 3.8% and acquisition growth added 1.7%. Foreign currency translation reduced sales by 2.5%. The loss in the fiscal 2017 second quarter of $70.9 million compares to net income of $83.4 million in the fiscal 2016 second quarter. The fiscal 2017 second-quarter loss of $0.54 per diluted share compares to earnings per diluted share of $0.62 in the fiscal 2016 second quarter. Loss before income taxes of $106.9 million decreased from income before income taxes (IBT) of $120.3 million reported in the fiscal 2016 second quarter. RPM's consolidated loss before interest and taxes of $86.4 million decreased from consolidated earnings before interest and taxes (EBIT) of $141.6 million reported in the fiscal 2016 second quarter.

The fiscal 2017 second quarter included the $188.3 million Kirker impairment charge and the $12.3 million charge related to the decision to exit Flowcrete Middle East, while the fiscal 2016 second quarter included the previously disclosed $14.5 million reversal of Kirker’s final earnout accrual into income. Excluding these items, earnings per diluted share declined 5.5% from $0.55 per share to $0.52 per share, while consolidated EBIT of $114.2 million decreased 10.2% from $127.1 million last year.

Further details of RPM's most recent financial results can be found in the company's earnings news releases, as well as in its 10-K, 10-Q and other periodic filings with the Securities and Exchange Commission.

2. What were RPM’s fiscal 2017 second-quarter segment sales and earnings?

During the fiscal 2017 second quarter, industrial segment sales increased 1.6%, to $633.4 million from $623.3 million in the fiscal 2016 second quarter. Organic sales improved 2.2%, while acquisition growth added 2.2%. Foreign currency translation reduced sales by 2.8%. IBT for the industrial segment declined 21.4% to $50.3 million, from $64.0 million in the fiscal 2016 second quarter. Industrial segment EBIT declined 20.4% to $52.2 million, from $65.6 million in the fiscal 2016 second quarter. Industrial segment EBIT included the impact of a $12.3 million charge related to the decision to exit the Flowcrete polymer flooring business in the Middle East. Excluding this charge, industrial segment EBIT was down 1.7% to $64.5 million from $65.6 million last year, due to unfavorable mix.

Industrial sales remain choppy by geography and have continued to be negatively impacted by weakness in the global oil and gas and heavy equipment industries, along with continued currency headwinds. In Europe, sales were down 1.0% in actual dollars, but up 6.3% in local currencies, with solid results in the U.K. In Latin America, sales were down in the low single digits in both actual results and local currencies. RPM’s businesses serving the U.S. commercial construction markets continue to see solid sales growth in the mid-single-digit range.
Second-quarter sales for the specialty segment increased 5.7%, to $183.6 million from $173.6 million in the fiscal 2016 second quarter. Organic growth was 5.2%, while acquisitions added 2.5%. Foreign currency translation reduced sales by 2.0%. IBT for the specialty segment increased 10.2% to $31.2 million, from $28.3 million in the fiscal 2016 second quarter. Specialty segment EBIT improved 10.6%, to $31.0 million from $28.1 million a year ago.

Most of RPM’s core specialty businesses, particularly U.S.-based restoration and exterior insulation and finish systems product lines, had solid performance in the quarter. The specialty segment also benefited from several recent smaller acquisitions.

RPM’s fiscal 2017 second-quarter consumer segment sales increased 4.1%, to $373.8 million from $359.1 million a year ago. Organic sales increased 5.8%, while acquisition growth added 0.6%. Foreign currency translation reduced sales by 2.3%. The consumer segment had a loss before income taxes of $140.6 million, compared to IBT of $65.4 million in the fiscal 2016 second quarter. The segment reported a loss before interest and taxes of $140.6 million, which was a decline from EBIT of $65.4 million reported last year.

As previously disclosed, fiscal 2016 second-quarter EBIT included the $14.5 million reversal of Kirker’s final earnout accrual into income. During the current year, certain negative trends in the Kirker business led to a loss of several customers and market share and a downward revision to long-term forecasts, which were determined to represent an impairment triggering event, and, after additional testing, resulted in an impairment charge totaling $188.3 million. Excluding these Kirker items, consumer segment EBIT declined 6.2%, from $50.9 million in fiscal 2016 to $47.7 million in the fiscal 2017 second quarter, principally due to a decline in Kirker’s current operating results.  

During the quarter, RPM’s core U.S. consumer businesses, excluding Kirker, performed very well, and capitalized on market share gains, a strengthening domestic housing market and good growth by its retail accounts to deliver solid organic growth. Sales in these businesses were up 6.4%, net of unfavorable currency translation. Supply issues in caulks and sealants were resolved by the end of the quarter, while significant capital investments are in process to increase capacity. Certain inefficiencies lingered in the second quarter that related to the caulks and sealants supply issues, which translated into a less favorable conversion to EBIT than would normally be the case. Both Rust-Oleum and DAP invested heavily in advertising and promotional activities in the quarter to support their brands and new product placements achieved during the past year.

Further details of RPM's most recent financial results can be found in the company's earnings news releases, as well as in its 10-K, 10-Q and other periodic filings with the Securities and Exchange Commission.

3. What were RPM’s fiscal 2017 first-half results?

Fiscal 2017 first-half net sales improved 1.8%, to $2.44 billion from $2.40 billion during the first six months of fiscal 2016. Net income declined to $41.8 million from $183.2 million in the fiscal 2016 first half. Diluted earnings per share were $0.32, down from $1.36 a year ago. IBT of $41.6 million declined 84.1% from $262.5 million in the fiscal 2016 first half. EBIT of $81.0 million declined 73.2% from $302.2 million reported last year. Excluding the Kirker items in both years and the Flowcrete charge in fiscal 2017, diluted earnings per share were $1.35, an increase of 4.7% from $1.29 last year and consolidated EBIT was $281.6 million, a decrease of 2.1% from $287.7 million last year.

RPM’s industrial segment fiscal 2017 first-half sales were up 0.7%, to $1.31 billion from $1.30 billion in the fiscal 2016 first half. Organic sales increased 1.7%, while acquisition growth added 1.6%. Foreign currency translation reduced sales by 2.6%. IBT for the industrial segment declined 6.0% to $139.6 million, from $148.5 million in fiscal 2016. EBIT of $143.3 million declined 5.4% from $151.6 in the first half last year. Excluding the Flowcrete Middle East charge, industrial segment EBIT increased 2.7%, to $155.6 million.

Specialty segment sales grew 4.8%, to $359.9 million from $343.5 million in the 2016 first half. Organic growth was 3.9%, while acquisitions added 2.8%. Foreign currency translation reduced sales by 1.9%. IBT for the specialty segment increased 12.6% to $61.7 million, from $54.8 million in fiscal 2016. For the first half of fiscal 2017, specialty segment EBIT increased 13.0%, to $61.4 million from $54.3 million a year ago.

First-half sales for the consumer segment improved 2.5%, to $773.7 million from $754.6 million a year ago. Organic sales increased 3.7%, and acquisition growth added 0.8%. Foreign currency translation reduced sales by 2.0%. The segment experienced a loss before income taxes of $70.5 million, as compared to IBT of $131.6 million in fiscal 2016. The consumer segment reported a loss before interest and taxes of $70.5 million, which was a decline from EBIT of $131.5 million in the first half of fiscal 2016. Excluding the Kirker impairment charge from fiscal 2017 and the Kirker earnout reversal in fiscal 2016, consumer segment EBIT increased 0.8%, to $117.8 million during the first half of fiscal 2017 from $117.0 million in the prior period. 

Further details of RPM's most recent financial results can be found in the company's earnings news releases, as well as in its 10-K, 10-Q and other periodic filings with the Securities and Exchange Commission.

4. What is the status of RPM's capital structure, cash flow and liquidity?
For the first half of fiscal 2017, cash from operations was $158.7 million, compared to $167.1 million a year ago. Capital expenditures of $48.0 million compared to $31.3 million during the first half of last year. Total debt at November 30, 2016 was $1.64 billion, compared to $1.66 billion at November 30, 2015 and $1.64 billion at May 31, 2016. RPM’s net (of cash) debt-to-total capitalization ratio was 52.8%, compared to 53.3% at November 30, 2015. At November 30, 2016, liquidity stood at $956 million, including cash of $206.0 million and $750.0 million in long-term committed available credit.
5. What is RPM's business outlook?
The company revised its EPS full-year guidance on January 5, 2017, to a range of $1.54 to $1.64 per diluted share, which includes a $0.09 per share charge related to the decision to exit its Flowcrete business in the Middle East, a $0.94 per share charge related to its Kirker business, a third-quarter estimated restructuring charge in Europe of $0.05 per share, as well as $0.04 per share of higher currency headwinds and $0.02 per share of higher pension expense.

Excluding the charge for the Kirker impairment, Flowcrete Middle East exit, and the estimated third-quarter restructuring in Europe, RPM's fiscal 2017 full-year adjusted EPS guidance is $2.62 to $2.72.
6. What is RPM's long-range strategic plan?

RPM has embarked on a five-year strategic plan, set to conclude on May 31, 2020. RPM’s revenue target is for $7 billion in annual sales at that time, with a somewhat higher improvement in net income and diluted earnings per share. Execution of this plan will include:

  • • Continuing to grow organically by maintaining RPM’s disciplined planning process, increasing its internal growth investments and capitalizing on its strong position in maintenance and repair
  • • Continuing its acquisition program focused on synergistic product lines and entrepreneurial freestanding businesses
  • • Accelerating international expansion
  • • Leveraging sales growth to the bottom line, driving continued income, cash flow and dividend growth
7. Does RPM plan to continue to grow through acquisitions?

Yes. RPM continues to be active in pursuing acquisitions of free-standing entrepreneurial companies and product lines that complement its portfolio of specialty coatings and sealants businesses. Over the last 30 years, RPM has completed more than 150 acquisitions, with nearly 70 of these transactions being completed during the last decade.
During the fiscal 2017 second quarter, RPM acquired two business with combined annual sales of approximately $32 million. These businesses included:

  • Specialty Polymer Coatings, Inc., a Canadian manufacturer of high-performance coatings for the global oil and gas pipeline market with annual net sales of approximately $26 million, and
  • Adhere Industrial Tapes Ltd., a U.K. manufacturer of a wide variety of single- and double-sided foam tapes used in construction and industrial applications with annual net sales of approximately $6 million.

Early in the third quarter, RPM acquired another four businesses with $162 million in combined annual sales. They included:

  • SPS Group (SPS), a Dutch decorative and specialty coatings company with annual net sales of approximately $60 million,
  • • The foam division of Clayton Corporation, best known for its consumer polyurethane foam brand Touch 'N Foam, which has annual net sales of approximately $60 million,
  • Prochem, a manufacturer of professional equipment and chemicals for cleaning and restoring flooring surfaces with annual net sales of approximately $22 million, and
  • • Eighty percent of Arnette Polymers, LLC, a manufacturer of specialty chemical raw materials. Excluding sales to the several RPM subsidiaries it currently serves, Arnette Polymers has annual net sales of nearly $20 million.

RPM’s acquisition philosophy, initiated by Thomas C. Sullivan, who ran RPM as chairman and CEO from 1971 until his retirement from those positions in 2002 and remained on the board as chairman emeritus until his retirement at the annual meeting in 2016, is very entrepreneurial in nature. RPM seeks good companies, creates an atmosphere where the founders and managers stay with their companies, and provides them with resources to grow their businesses. This entrepreneurial culture has been a key attraction to business owners in the industry, as demonstrated by the fact that today about one-third of RPM’s operating companies are managed by their founders, second- or third-generation family members or the managers they trusted to lead their companies. View this video to learn more about RPM’s approach to acquisitions.

8. What is RPM's dividend record?

RPM has increased the cash dividend paid to its stockholders for 43 consecutive years, placing it in an elite category of less than a half percent of all publicly traded U.S. companies. Only 44 of the 19,000 U.S. public companies have consecutively paid an increasing annual dividend for this period of time or longer, according to the Mergent Handbook of Dividend Achievers.

RPM’s last dividend increase was on October 6, 2016, when the board of directors raised RPM's quarterly cash dividend to $0.30 per common share, a 9.1% increase over the previous quarterly dividend rate of $0.275 per common share.

Annually increasing its dividend is a long-standing RPM hallmark. Given current uncertain economic conditions, the company is pleased that its strong cash flow has allowed it to continue this practice and deliver stockholders a positive cash return on their investment. For the ten-year and period ended May 31, 2016, RPM's return to shareholders has outperformed the S&P 500 Index by 86%, its current peer group by 24% and its prior peer group by 20%, including the assumed reinvestment of dividends. The peer group changed in fiscal 2016 as a result of industry consolidation. RPM's annual dividend growth has been a critical element of its ability to significantly outperform both this broad market index and its peer group, and to deliver value to RPM shareholders.

9. When is the RPM annual stockholders' meeting?
RPM's annual meeting is typically held the first week in October. The next meeting will be held Thursday, October 5, 2017, at the Holiday Inn located at 15471 Royalton Road in Strongsville, Ohio.
10. When will your annual report and proxy be mailed?

With the fiscal year ending on May 31, the annual report and proxy are typically mailed in late August each year. If you would like a copy of the current annual report, you may request one through the Information Request section of this website.

11. How many RPM shares are outstanding?
As of August 31, 2016, RPM's actual shares outstanding were 133.4 million, while average shares outstanding for computation of fiscal 2017 first-quarter basic and diluted earnings per share were 130.6 million and 135.2 million, respectively.
12. How many employees does RPM have?
RPM's operating companies employ more than 13,000 people worldwide, plus hundreds of independent sales and technical representatives.
13. Are RPM products sold in other countries?
Products manufactured by RPM's numerous operating companies are sold in approximately 170 countries and territories.
14. Can I buy stock directly through the company?

Yes, RPM does offer direct purchase of its stock through the Direct Stock Purchase Plan administered by Wells Fargo. Your initial purchase of RPM stock must be at least $200. After that, additional shares can be purchased, commission-free, at a minimum of $25 and a maximum of $5,000 per month. Contact Wells Fargo at 1-800-988-5238 for an enrollment form or download one from Shareowner Online.

15. Does RPM have a Dividend Reinvestment Plan?

Yes. RPM maintains a Dividend Reinvestment Plan whereby cash dividends, plus additional investment of up to $5,000 per month, may be invested in additional RPM shares at no commission cost or service fee. Details of the Plan are available online or by contacting RPM at 1-800-776-4488 or Wells Fargo at 1-800-988-5238 (or 651-450-4064 outside the U.S.). Only shareholders of record may participate in the Plan. Shares owned by you but held by your broker in "street name" must be transferred into your name before you can enroll in the plan.

16. Who should I contact regarding questions on my RPM account or to find out how many shares I own?

Please contact our stock transfer agent, Wells Fargo Bank, at 1-800-988-5238 (or 651-450-4064 outside the U.S.), and they will be happy to assist you. You can also obtain information online at www.shareowneronline.com.

17. How often is stock purchased through the Dividend Reinvestment Plan?
RPM stock is purchased within five days of receipt of your check. Timing of your cash payment should be made accordingly. Your check should be made payable to Shareowner Services and mailed to: Wells Fargo Shareowner Services, P.O. Box 64854, St. Paul, MN 55164-0854. Certified/overnight mail can be sent to: Wells Fargo Shareowner Services, 1110 Centre Pointe Curve, Suite 101, Mendota Heights, MN 55120-4100. The same amount of money need not be invested each month and there is no obligation to make voluntary cash payment each month.
18. Can I make voluntary cash payments by having my checking or savings account automatically debited?
Yes. This service allows you to arrange for automatic monthly or quarterly investments in RPM stock by taking the funds directly from your checking or savings account and investing them in RPM stock. There is no cost to you for this service. To initiate automatic deductions, contact Wells Fargo Bank at 1-800-988-5238 (or 651-450-4064 outside the U.S.) to request an authorization form to be completed by you and mailed to Wells Fargo Bank.
19. Can my cash dividend check be direct deposited into my bank account?
Yes. Shareholders of record may have their dividends electronically deposited directly into their checking or savings account through the Direct Deposit Program at no charge. For information regarding this service, please contact Wells Fargo Bank at 1-800-988-5238 (or 651-450-4064 outside the U.S.).
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