SEC Document


The following tables reflect the results of our reportable segments consistent with our management philosophy, and represent the information we utilize, in conjunction with various strategic, operational and other financial performance criteria, in evaluating the performance of our portfolio of businesses. Information for all periods presented has been recast to reflect the current-year change in the composition of our reportable segments.

 

Year Ended May 31,    2017        2016        2015       
(In thousands)                         

Net Sales

            

Industrial

   $   2,564,202        $   2,491,647        $   2,581,424       

Specialty

     713,589          684,564          409,297       

Consumer

     1,680,384          1,637,438          1,603,829       

Total

   $ 4,958,175        $ 4,813,649        $ 4,594,550       

Income (Loss) Before Income Taxes

            

Industrial

            

Income Before Income Taxes (a)

   $ 243,335        $ 257,180        $ 251,903       

Interest (Expense), Net (b)

     (7,985        (6,071        (8,282)      

EBIT (c)

   $ 251,320        $ 263,251        $ 260,185       

Specialty

            

Income Before Income Taxes (a)

   $ 107,904        $ 107,546        $ 63,434       

Interest (Expense), Net (b)

     526          814          626       

EBIT (c)

   $ 107,378        $ 106,732        $ 62,808       

Consumer

            

Income Before Income Taxes (a)

   $ 58,726        $ 268,218        $ 274,001       

Interest (Expense), Net (b)

     (323        40          34       

EBIT (c)

   $ 59,049        $ 268,178        $ 273,967       

Corporate/Other

            

(Expense) Before Income Taxes (a)

   $ (165,632      $ (149,478      $ (136,085)      

Interest (Expense), Net (b)

     (75,188        (76,101        (61,416)      

EBIT (c)

   $ (90,444      $ (73,377      $ (74,669)      

Consolidated

            

Income Before Income Taxes (a)

   $ 244,333        $ 483,466        $ 453,253       

Interest (Expense), Net (b)

     (82,970        (81,318        (69,038)      

EBIT (c)

   $ 327,303        $ 564,784        $ 522,291       

Identifiable Assets

            

Industrial

   $ 2,382,784        $ 2,206,062        $ 2,146,244       

Specialty

     759,822          754,757          758,020       

Consumer

     1,821,190          1,734,600          1,626,097       

Corporate/Other

     126,653          69,550          149,701       

Total

   $ 5,090,449        $ 4,764,969        $ 4,680,062       

Capital Expenditures

            

Industrial

   $ 65,083        $ 78,002        $ 46,975       

Specialty

     14,104          10,238          6,998       

Consumer

     45,690          27,269          29,354       

Corporate/Other

     1,232          1,674          2,036       

Total

   $ 126,109        $ 117,183        $ 85,363       

Depreciation and Amortization

            

Industrial

   $ 51,529        $ 47,697        $ 48,212       

Specialty

     26,453          25,646          12,619       

Consumer

     33,374          31,445          32,153       

Corporate/Other

     5,417          6,251          6,192       

Total

   $ 116,773        $ 111,039        $ 99,176       

 

(a) The presentation includes a reconciliation of Income (Loss) Before Income Taxes, a measure defined by Generally Accepted Accounting Principles (GAAP) in the United States, to EBIT.

 

(b) Interest (expense), net includes the combination of interest expense and investment expense (income), net.

 

(c) EBIT is a non-GAAP measure, and 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. We believe EBIT is useful to investors for this purpose as well, using EBIT 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.

 

62    RPM International Inc. and Subsidiaries


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