SEC Document


CONSOLIDATED STATEMENTS OF INCOME

IN THOUSANDS, EXCEPT PER SHARE DATA

(Unaudited)

 

     Three Months Ended  
     August 31,  
     2017     2016  

Net Sales

   $ 1,345,394     $ 1,252,063  

Cost of sales

     773,386       700,021  
  

 

 

   

 

 

 

Gross profit

     572,008       552,042  

Selling, general & administrative expenses

     394,409       384,085  

Interest expense

     26,773       22,778  

Investment (income), net

     (4,453     (3,838

Other (income) expense, net

     (5     542  
  

 

 

   

 

 

 

Income before income taxes

     155,284       148,475  

Provision for income taxes

     38,381       35,081  
  

 

 

   

 

 

 

Net income

     116,903       113,394  

Less: Net income attributable to noncontrolling interests

     487       625  
  

 

 

   

 

 

 

Net income attributable to RPM International Inc. Stockholders

   $ 116,416     $ 112,769  
  

 

 

   

 

 

 

Earnings per share of common stock attributable to RPM International Inc. Stockholders:

    

Basic

   $ 0.87     $ 0.85  
  

 

 

   

 

 

 

Diluted

   $ 0.86     $ 0.83  
  

 

 

   

 

 

 

Average shares of common stock outstanding - basic

     131,236       130,600  
  

 

 

   

 

 

 

Average shares of common stock outstanding - diluted

     135,720       135,241  
  

 

 

   

 

 

 

SUPPLEMENTAL SEGMENT INFORMATION

IN THOUSANDS

(Unaudited)

 

     Three Months Ended  
     August 31,  
     2017     2016  

Net Sales:

  

Industrial Segment

   $ 729,768     $ 675,840  

Consumer Segment

     427,144       399,887  

Specialty Segment

     188,482       176,336  
  

 

 

   

 

 

 

Total

   $ 1,345,394     $ 1,252,063  
  

 

 

   

 

 

 

Income Before Income Taxes (a):

    

Industrial Segment

    

Income Before Income Taxes (a)

   $ 88,902     $ 89,266  

Interest (Expense), Net (b)

     (2,554     (1,837
  

 

 

   

 

 

 

EBIT (c)

   $ 91,456     $ 91,103  
  

 

 

   

 

 

 

Consumer Segment

    

Income Before Income Taxes (a)

   $ 72,368     $ 70,088  

Interest (Expense), Net (b)

     (196     (3
  

 

 

   

 

 

 

EBIT (c)

   $ 72,564     $ 70,091  
  

 

 

   

 

 

 

Specialty Segment

    

Income Before Income Taxes (a)

   $ 33,167     $ 30,504  

Interest Income, Net (b)

     120       153  
  

 

 

   

 

 

 

EBIT (c)

   $ 33,047     $ 30,351  
  

 

 

   

 

 

 

Corporate/Other

    

(Expense) Before Income Taxes (a)

   $ (39,153   $ (41,383

Interest (Expense), Net (b)

     (19,690     (17,253
  

 

 

   

 

 

 

EBIT (c)

   $ (19,463   $ (24,130
  

 

 

   

 

 

 

Consolidated

    

Income Before Income Taxes (a)

   $ 155,284     $ 148,475  

Interest (Expense), Net (b)

     (22,320     (18,940
  

 

 

   

 

 

 

EBIT (c)

   $ 177,604     $ 167,415  
  

 

 

   

 

 

 

 

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

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