SEC Document


SUPPLEMENTAL SEGMENT INFORMATION

IN THOUSANDS

(Unaudited)

 

     Three Months Ended     Year Ended  
     May 31,     May 31,     May 31,     May 31,  
     2017     2016     2017     2016  

Net Sales (a):

      

Industrial Segment

   $ 733,530     $ 698,572     $ 2,564,202     $ 2,491,647  

Specialty Segment

     194,027       184,169       713,589       684,564  

Consumer Segment

     565,289       543,843       1,680,384       1,637,438  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total

   $ 1,492,846     $ 1,426,584     $ 4,958,175     $ 4,813,649  
  

 

 

   

 

 

   

 

 

   

 

 

 

Income Before Income Taxes (a):

        

Industrial Segment

        

Income Before Income Taxes (b)

   $ 92,073     $ 108,218     $ 243,335     $ 257,180  

Interest (Expense), Net (c)

     (1,313     (1,522     (7,985     (6,071
  

 

 

   

 

 

   

 

 

   

 

 

 

EBIT (d)

     93,386       109,740       251,320       263,251  

Charge to exit Flowcrete Middle East (e)

         12,275    

Severance expense (f)

     7,721         7,721    
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBIT

   $ 101,107     $ 109,740     $ 271,316     $ 263,251  
  

 

 

   

 

 

   

 

 

   

 

 

 

Specialty Segment

        

Income Before Income Taxes (b)

   $ 31,240     $ 31,050     $ 107,904     $ 107,546  

Interest Income, Net (c)

     120       164       526       814  
  

 

 

   

 

 

   

 

 

   

 

 

 

EBIT (d)

   $ 31,120     $ 30,886     $ 107,378     $ 106,732  

Severance expense (f)

     2,926         2,926    
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBIT

   $ 34,046     $ 30,886     $ 110,304     $ 106,732  
  

 

 

   

 

 

   

 

 

   

 

 

 

Consumer Segment

        

Income Before Income Taxes (b)

   $ 99,411     $ 97,881     $ 58,726     $ 268,218  

Interest (Expense) Income, Net (c)

     (209     (76     (323     40  
  

 

 

   

 

 

   

 

 

   

 

 

 

EBIT (d)

     99,620       97,957       59,049       268,178  

Severance expense (f)

     4,277         4,277    

Goodwill and intangible impairments (g)

         188,298    

Reversal of Kirker earnout (h)

           (14,500
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBIT

   $ 103,897     $ 97,957     $ 251,624     $ 253,678  
  

 

 

   

 

 

   

 

 

   

 

 

 

Corporate/Other

        

(Expense) Before Income Taxes (b)

   $ (37,006   $ (38,051   $ (165,632   $ (149,478

Interest (Expense), Net (c)

     (21,997     (19,883     (75,188     (76,101
  

 

 

   

 

 

   

 

 

   

 

 

 

EBIT (d)

   $ (15,009   $ (18,168   $ (90,444   $ (73,377

Severance expense (f)

     77         77    
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBIT

   $ (14,932   $ (18,168   $ (90,367   $ (73,377
  

 

 

   

 

 

   

 

 

   

 

 

 

Consolidated

        

Income Before Income Taxes (b)

   $ 185,718     $ 199,098     $ 244,333     $ 483,466  

Interest (Expense), Net (c)

     (23,399     (21,317     (82,970     (81,318
  

 

 

   

 

 

   

 

 

   

 

 

 

EBIT (d)

     209,117       220,415       327,303       564,784  

Charge to exit Flowcrete Middle East (e)

         12,275    

Severance expense (f)

     15,001         15,001    

Goodwill and intangible impairments (g)

         188,298    

Reversal of Kirker earnout (h)

           (14,500
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBIT

   $ 224,118     $ 220,415     $ 542,877     $ 550,284  
  

 

 

   

 

 

   

 

 

   

 

 

 

 

(a) Prior period information has been recast to reflect the current period change in reportable segments.
(b) The presentation includes a reconciliation of Income (Loss) Before Income Taxes, a measure defined by Generally Accepted Accounting Principles in the United States (GAAP), to EBIT.
(c) Interest income (expense), net includes the combination of interest income (expense) and investment income (expense), net.
(d) EBIT is defined as earnings (loss) before interest and taxes. We evaluate the profit performance of our segments based on income before income taxes, but also look to EBIT as a performance evaluation measure because interest expense is essentially related to acquisitions, as opposed to segment operations. For that reason, we believe EBIT is also useful to investors as a metric in their investment decisions. EBIT should not be considered an alternative to, or more meaningful than, income before income taxes as determined in accordance with GAAP, since EBIT omits the impact of interest in determining operating performance, which represent items necessary to our continued operations, given our level of indebtedness. Nonetheless, EBIT is a key measure expected by and useful to our fixed income investors, rating agencies and the banking community all of whom believe, and we concur, that this measure is critical to the capital markets’ analysis of our segments’ core operating performance. We also evaluate EBIT because it is clear that movements in EBIT impact our ability to attract financing. Our underwriters and bankers consistently require inclusion of this measure in offering memoranda in conjunction with any debt underwriting or bank financing. EBIT may not be indicative of our historical operating results, nor is it meant to be predictive of potential future results.
(e) Charges related to Flowcrete decision to exit the Middle East.
(f) Reflects severance expense incurred during the fourth quarter of fiscal 2017 pursuant to a plan to reduce future SG&A expense.
(g) Reflects the impact of goodwill and other intangible asset impairment charges of $188.3 million related to our Kirker reporting unit.
(h) Reflects the reversal of contingent obligations for earnout targets that were not met at our Kirker reporting unit.

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