SEC Document


RPM Reports Fourth-Quarter and Full-Year Results for Fiscal 2017

July 24, 2017

Page 3 of 6

 

Cash Flow and Financial Position

For fiscal 2017, cash from operations was $386.1 million, down 18.7% from $474.7 million in fiscal 2016. Total debt at the end of fiscal 2017 was $2.09 billion, compared to $1.64 billion at the end of fiscal 2016. RPM’s net (of cash) debt-to-total capitalization ratio was 54.8%, compared to 50.0% at May 31, 2016. Capital spending in fiscal 2017 was $126.1 million, up from $117.2 million a year ago.

“Our financial position remains strong, allowing continuation of a robust acquisition program and capital spending for plant improvements. During the fourth quarter, we prepaid the December 2017 524(g) trust obligation in the amount of $119.1 million, as well as the fiscal 2018 U.S. Pension Plan contribution in the amount of $52.8 million,” Sullivan stated.

Fiscal 2017 Full-Year Consolidated Sales and Earnings

Fiscal 2017 consolidated full-year net sales increased 3.0% to $4.96 billion from $4.81 billion in fiscal 2016. Net income declined 48.7% to $181.8 million from the reported $354.7 million in fiscal 2016. Diluted earnings per share of $1.36 were down 48.3% from $2.63 a year ago. IBT was down 49.5% to $244.3 million from $483.5 million in fiscal 2016. Consolidated EBIT was down 42.0% to $327.3 million from $564.8 million last year. Fiscal 2017 included a $12.3 million charge for closing a Flowcrete Middle East facility, a severance charge of $15.0 million and the Kirker goodwill and intangible impairment charge of $188.3 million. Excluding these items, as well as last year’s Kirker earnout reversal of $14.5 million, EBIT declined 1.3% for the year to $542.9 million from $550.3 million a year ago. After excluding the same items, net income for the year declined 3.5% to $333.4 million from $345.5 million in fiscal 2016 and EPS declined 3.9% to $2.47 from $2.57 last fiscal year.

Fiscal 2017 Segment Sales and Earnings

Fiscal 2017 sales for RPM’s industrial segment improved 2.9% to $2.56 billion from $2.49 billion in fiscal 2016. Organic sales increased 2.0%, with acquisition growth contributing 2.9%. Foreign currency translation negatively impacted sales by 2.0%. The industrial segment’s IBT declined 5.4% to $243.3 million from $257.2 million in fiscal 2016. Industrial segment EBIT dropped 4.5% to $251.3 million from $263.3 million in fiscal 2016. Excluding the Flowcrete Middle East shutdown in the second quarter of $12.3 million and a severance charge in the fourth quarter of $7.7 million, industrial segment EBIT increased 3.1% to $271.3 million from a year ago.

Specialty segment sales increased 4.2% to $713.6 million from $684.6 million in fiscal 2016. Organic sales improved 2.8% and acquisitions added 3.1%. Foreign currency translation reduced sales by 1.7%. Specialty segment IBT was up 0.3% to $107.9 million from $107.5 million a year ago. EBIT was up 0.6% to $107.4 million from $106.7 million in fiscal 2016. Excluding the severance charge in the fourth quarter of $2.9 million, specialty segment EBIT increased 3.3% to $110.3 million from a year ago.

Consumer segment sales for fiscal 2017 increased 2.6% to $1.68 billion from $1.64 billion in fiscal 2016. Organic sales increased by 0.6%, and acquisition growth added 3.4%. Currency translation negatively impacted sales by 1.4%. IBT declined 78.1% to $58.7 million from $268.2 million in fiscal


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