SEC Document

EX-99.1

Exhibit 99.1

RPM Reports Record Fiscal 2018 Second-Quarter Results

 

    Record second-quarter sales improve 10.5%

 

    Record net income of $95.5 million compares to loss for the fiscal 2017 quarter of $70.9 million due to impairment and business exit charges

 

    Record earnings per diluted share of $0.70 compare to year-ago loss per share of $0.54 and “adjusted” year-ago earnings per share of $0.52

 

    Fiscal 2018 guidance increased

MEDINA, OH – January 4, 2018 – RPM International Inc. (NYSE: RPM) today reported record sales, net income and diluted earnings per share for its fiscal 2018 second quarter ended November 30, 2017. Sales increased 10.5% and net income of $95.5 million, or $0.70 per diluted share, compared to a year-ago net loss of $70.9 million, or loss of $0.54 per diluted share. The fiscal 2017 second-quarter results included a $188.3 million pre-tax ($129.2 million or $0.97 per diluted share, after-tax) impairment charge. The fiscal 2017 second-quarter results also included a charge of $12.3 million, or $0.09 per share, which had no tax impact, related to the decision to exit an industrial segment business in the Middle East.

Second-Quarter Results

Net sales of $1.32 billion were up 10.5% over the $1.19 billion reported a year ago. Organic sales improved 4.2% and acquisition growth added 4.7%. Foreign currency translation increased sales by 1.6%. Net income of $95.5 million compares to last year’s adjusted net income of $70.5 million. Earnings per diluted share of $0.70 in the current quarter, which included a $0.09 per diluted share tax benefit relative to last year’s tax rate, compare to an adjusted $0.52 per diluted share last year. Earnings per diluted share increased 34.6% from last year’s adjusted earnings per diluted share of $0.52, and increased 17.3% excluding the $0.09 per diluted share tax benefit. Income before income taxes (IBT) of $109.2 million compares to a loss before income taxes of $106.9 million reported in the fiscal 2017 second quarter. RPM’s consolidated earnings before interest and taxes (EBIT) of $131.8 million compare to a consolidated loss before interest and taxes of $86.4 million reported in the fiscal 2017 second quarter. Excluding the year-ago charges, RPM’s consolidated EBIT for the fiscal 2018 second quarter improved 15.4% over $114.2 million in the fiscal 2017 second quarter. The EBIT improvement of 15.4% included the cost savings benefit in “Corporate/Other” expenses of $11.1 million from lower pension, healthcare, acquisition-related expenses and professional fees.

“We were very pleased with RPM’s results during the fiscal second quarter. Our strategically balanced business model performed as intended with strength in our industrial and specialty businesses offsetting weakness in our consumer segment. Sales growth was strong across all three of our business segments, with a balance of organic and acquisition growth. We are also seeing the benefits of last year’s product line acquisitions and cost reduction efforts on improved leverage, which more than offset higher raw material costs that have negatively impacted gross profit margins,” stated Frank C. Sullivan, chairman and chief executive officer.


RPM Reports Fiscal 2018 Second-Quarter Results

January 4, 2018

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Second-Quarter Segment Sales and Earnings

During the fiscal 2018 second quarter, industrial segment sales increased 11.0%, to $702.9 million from $633.4 million in the fiscal 2017 second quarter. Organic sales improved 5.4%, while acquisition growth added 3.3%. Foreign currency translation increased sales by 2.3%. IBT for the industrial segment increased 34.6%, to $67.7 million from $50.3 million in the fiscal 2017 second quarter. Industrial segment EBIT increased 34.5%, to $70.2 million from $52.2 million in the fiscal 2017 second quarter. Industrial segment EBIT was up 8.9% over an adjusted $64.5 million in the fiscal 2017 second quarter, excluding last year’s charge to exit a Middle Eastern flooring business.

“Our strong organic sales growth of 5.4% in the industrial segment was driven by North American roofing and those businesses providing polymer flooring to commercial and industrial markets. We also saw a slight rebound in our companies serving the oil and gas industry, which reported positive organic year-over-year sales growth for the first time in three years. We continue to see mixed results from our industrial businesses in Europe, while Latin American industrial operations, particularly in Brazil, continue to struggle. EBIT margins were negatively impacted by higher raw material costs and unfavorable transactional foreign currency exchange,” Sullivan stated.

RPM’s fiscal 2018 second-quarter consumer segment sales increased 11.1%, to $415.4 million from $373.8 million a year ago. Organic sales increased 3.0%, while acquisition growth added 7.3%. Foreign currency translation increased sales by 0.8%. The consumer segment had IBT of $45.1 million, compared to a loss before income taxes of $140.6 million in the fiscal 2017 second quarter. The segment reported EBIT of $45.2 million, compared to a loss before interest and taxes of $140.6 million reported last year. EBIT was off 5.3% from an adjusted $47.7 million in the fiscal 2017 second quarter, which excludes the impairment charge related to RPM’s consumer nail enamel business.

“During the quarter, we saw a sharp uptick in business from caulks and sealants products, as well as some international markets. The segment also benefited from last year’s acquisitions of Touch ‘N Foam in the U.S. and SPS in Europe. The decline in EBIT resulted from higher raw material costs and unfavorable manufacturing absorption and product mix,” stated Sullivan.

Second-quarter sales for the specialty segment increased 7.4%, to $197.1 million from $183.6 million in the fiscal 2017 second quarter. Organic growth was 2.8%, while acquisitions added 3.8%. Foreign currency translation increased sales by 0.8%. IBT for the specialty segment increased 10.5%, to $34.4 million from $31.2 million in the fiscal 2017 second quarter. Specialty segment EBIT improved 10.8%, to $34.4 million from $31.0 million a year ago.

“We experienced strong growth in many of our specialty segment product lines, particularly U.S.-based restoration service businesses, with higher than normal sales volumes into the hurricane impacted regions prior to and after the storms, as well as powder coatings and wood finishes, after overcoming lost sales from last year’s closure of an unprofitable European business and recent patent expiration. We were able to mitigate the negative impact of the patent expiration by retaining most of our larger customers,” Sullivan stated.


RPM Reports Fiscal 2018 Second-Quarter Results

January 4, 2018

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Cash Flow and Financial Position

For the first half of fiscal 2018, cash from operations was $115.2 million, compared to $158.7 million a year ago. Capital expenditures of $45.3 million compared to $48.0 million during the first half of last year. Total debt at November 30, 2017 was $2.14 billion, compared to $1.64 billion at November 30, 2016 and $2.1 billion at May 31, 2017. RPM’s net (of cash) debt-to-total capitalization ratio was 53.8%, compared to 52.8% at November 30, 2016. At November 30, 2017, liquidity stood at $971.7 million, including cash of $267.9 million and $703.8 million in long-term committed available credit.

First-Half Sales and Earnings

Fiscal 2018 first-half net sales improved 8.9%, to $2.66 billion from $2.44 billion during the first six months of fiscal 2017. Organic growth was 2.5%, acquisitions added 5.5% and positive foreign currency translation added 0.9%. Net income improved 406.4%, to $211.9 million from $41.8 million in the fiscal 2017 first half. Diluted earnings per share were $1.56, up 387.5% from $0.32 a year ago. IBT of $264.5 million was up 535.5% over the $41.6 million reported in the fiscal 2017 first half. EBIT of $309.4 million was 281.8% above the $81.0 million reported last year. Excluding the impairment and Middle East business exit charge in fiscal 2017, fiscal 2018 first half EBIT was up 9.9% over an adjusted $281.6 million last year.

First-Half Segment Sales and Earnings

RPM’s industrial segment fiscal 2018 first-half sales were up 9.4%, to $1.43 billion from $1.31 billion in the fiscal 2017 first half. Organic sales increased 3.8%, while acquisition growth added 4.2%. Foreign currency translation increased sales by 1.4%. IBT for the industrial segment increased 12.2%, to $156.6 million from $139.6 million in fiscal 2017. EBIT of $161.7 million was up 12.8% from $143.3 million in the first half last year. Excluding the Middle East business exit charge last year, industrial segment EBIT increased 3.9%, from $155.6 million a year ago.

First-half sales for the consumer segment improved 8.9%, to $842.6 million from $773.7 million a year ago. Organic sales were flat, but acquisition growth added 8.5% and foreign currency translation increased sales by 0.4%. The consumer segment reported IBT of $117.5 million, compared to a loss before interest and taxes of $70.5 million in the year-ago first half. EBIT of $117.8 million compares to a loss before interest and taxes in the fiscal 2017 second quarter of $70.5 million. Consumer segment EBIT was essentially flat to an adjusted EBIT of $117.8 million last year, excluding the impairment charge.

Specialty segment sales grew 7.1%, to $385.6 million from $359.9 million in the 2017 first half. Organic growth was 2.9%, while acquisitions added 3.9%. Foreign currency translation increased sales by 0.3%. IBT for the specialty segment increased 9.6%, to $67.6 million from $61.7 million in fiscal 2017. For the first half of fiscal 2018, specialty segment EBIT increased 9.8%, to $67.4 million from $61.4 million a year ago.

Business Outlook

“In our industrial segment, we expect steady results during the second half of the fiscal year from our North American commercial construction-related businesses, aided by higher sales in regions impacted by hurricanes, as well as continued positive results from our businesses serving the oil and gas markets. Our business in Brazil, seems to have bottomed out and should be neutral in the back half. Overall, the global


RPM Reports Fiscal 2018 Second-Quarter Results

January 4, 2018

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economy is improving and currency translation is favorable. Additionally, we are driving improved operating leverage throughout the entire industrial segment by continually pursuing additional cost savings and efficiencies. With this global backdrop, industrial segment sales growth for the balance of the fiscal year should be in the upper-single-digit range,” stated Sullivan.

“In the consumer segment, we expect sales growth in the low-to-mid-single-digit range during the back half of the fiscal year. Most of the growth will be organic, as last year’s acquisitions annualize their purchase date during the third quarter. We plan to invest in our great brands by stepping up advertising and promotional activity in the spring sell-in season and therefore, expect back-half earnings results to be fairly flat to last year in this segment,” he stated.

“In the specialty segment, we expect sales growth in the low-single-digit range during the back half of the fiscal year. This, too, will be mostly organic as last year’s acquisitions also annualize their purchase date during the third quarter. We will continue to face headwinds from the patent expiration through the first quarter of fiscal 2019,” he stated.

“In aggregate, our operations have performed in line with our expectations when we issued our fiscal 2018 guidance back in July, and we would expect this trend to generally continue in the back half of this fiscal year. In regard to our taxes, our 19.6% effective tax rate for the first six months has been better than expected. We approved and completed certain foreign legal entity restructurings that resulted in the recognition of favorable discrete tax benefits that reduces our annual effective tax rate from the rate utilized for our current EPS guidance,” Sullivan stated.

“With the enactment of new federal tax legislation two weeks ago, there is a corporate rate reduction from 35% to 21%. The corporate rate reduction is effective for us as of January 1, 2018 and accordingly will reduce our current fiscal year federal statutory rate to a blended rate of approximately 29.2%. This is expected to further reduce RPM’s effective tax rate this year by two to three percentage points, adding approximately $0.10 per diluted share to our fiscal 2018 outlook. Additionally, in the third quarter we expect to record a discrete tax adjustment for the impact of the rate change on our deferred tax assets and liabilities, as well as the impact of the transition tax on deferred foreign earnings,” stated Sullivan. “Excluding this one-time discrete tax adjustment resulting from the new federal tax legislation, we are increasing our full-year fiscal 2018 EPS guidance to a range of $3.00 to $3.10 per share.”

Webcast and Conference Call Information

Management will host a conference call to discuss these results beginning at 10:00 a.m. EST today. The call can be accessed by dialing 888-771-4371 or 847-585-4405 for international callers. Participants are asked to call the assigned number approximately 10 minutes before the conference call begins. The call, which will last approximately one hour, will be open to the public, but only financial analysts will be permitted to ask questions. The media and all other participants will be in a listen-only mode.

For those unable to listen to the live call, a replay will be available from approximately 12:30 p.m. EST on January 4, 2018 until 11:59 p.m. EST on January 11, 2018. The replay can be accessed by dialing 888-843-7419 or 630-652-3042 for international callers. The access code is 46126264. The call also will be available both live and for replay, and as a written transcript, via the RPM web site at www.RPMinc.com.


RPM Reports Fiscal 2018 Second-Quarter Results

January 4, 2018

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About RPM

RPM International Inc. owns subsidiaries that are world leaders in specialty coatings, sealants, building materials and related services across three segments. RPM’s industrial products include roofing systems, sealants, corrosion control coatings, flooring coatings and other construction chemicals. Industrial companies include Stonhard, Tremco, illbruck, Carboline, Flowcrete, Euclid Chemical and RPM Belgium Vandex. RPM’s consumer products are used by professionals and do-it-yourselfers for home maintenance and improvement and by hobbyists. Consumer brands include Rust-Oleum, DAP, Zinsser, Varathane and Testors. RPM’s specialty products include industrial cleaners, colorants, exterior finishes, specialty OEM coatings, edible coatings, restoration services equipment and specialty glazes for the pharmaceutical and food industries. Specialty segment companies include Day-Glo, Dryvit, RPM Wood Finishes, Mantrose-Haeuser, Legend Brands, Kop-Coat and TCI. Additional details can be found at www.rpminc.com and by following RPM on Twitter at www.twitter.com/RPMintl.

For more information, contact Barry M. Slifstein, vice president – investor relations, at 330-273-5090 or bslifstein@rpminc.com.

# # #

Use of Non-GAAP Financial Information

To supplement the financial information presented in accordance with Generally Accepted Accounting Principles in the United States (“GAAP”) in this earnings release, we use EBIT, a non-GAAP financial measure. 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. See the financial statement section of this earnings release for a reconciliation of EBIT to income before income taxes.

Forward-Looking Statements

This press release contains “forward-looking statements” relating to our business. These forward-looking statements, or other statements made by us, are made based on our expectations and beliefs concerning future events impacting us, and are subject to uncertainties and factors (including those specified below) which are difficult to predict and, in many instances, are beyond our control. As a result, our actual results could differ materially from those expressed in or implied by any such forward-looking statements. These uncertainties and factors include (a) global markets and general economic conditions, including uncertainties surrounding the volatility in financial markets, the availability of capital and the effect of changes in interest rates, and the viability of banks and other financial institutions; (b) the prices, supply and capacity of raw materials, including assorted pigments, resins, solvents and other natural gas- and oil-based materials; packaging, including plastic containers; and transportation services, including fuel surcharges; (c) continued growth in demand for our products; (d) legal, environmental and litigation risks inherent in our construction and chemicals businesses and risks related to the adequacy of our insurance coverage for such matters; (e) the effect of changes in interest rates; (f) the effect of fluctuations in currency exchange rates upon our foreign operations; (g) the effect of non-currency risks of investing in and conducting operations in foreign countries, including those relating to domestic and international political, social, economic and regulatory factors; (h) risks and uncertainties associated with our ongoing acquisition and divestiture activities; (i) risks related to the adequacy of our contingent liability reserves; and (j) other risks detailed in our filings with the Securities and Exchange Commission, including the risk factors set forth in our Annual Report on Form 10-K for the year ended May 31, 2017, as the same may be updated from time to time. We do not undertake any obligation to publicly update or revise any forward-looking statements to reflect future events, information or circumstances that arise after the date of this release.


CONSOLIDATED STATEMENTS OF INCOME

IN THOUSANDS, EXCEPT PER SHARE DATA

(Unaudited)

 

     Three Months Ended     Six Months Ended  
     November 30,     November 30,  
     2017     2016     2017     2016  

Net Sales

   $ 1,315,416     $ 1,190,770     $ 2,660,810     $ 2,442,833  

Cost of sales

     764,401       669,089       1,537,787       1,369,110  
  

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

     551,015       521,681       1,123,023       1,073,723  

Selling, general & administrative expenses

     419,599       419,494       814,008       803,579  

Goodwill and other intangible asset impairments

       188,298         188,298  

Interest expense

     26,396       22,905       53,169       45,683  

Investment (income), net

     (3,739     (2,416     (8,192     (6,254

Other expense (income), net

     (422     257       (427     799  
  

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) before income taxes

     109,181       (106,857     264,465       41,618  

Provision (benefit) for income taxes

     13,323       (36,601     51,704       (1,520
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss)

     95,858       (70,256     212,761       43,138  

Less: Net income attributable to noncontrolling interests

     395       670       882       1,295  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss) attributable to RPM International Inc. Stockholders

   $ 95,463     $ (70,926   $ 211,879     $ 41,843  
  

 

 

   

 

 

   

 

 

   

 

 

 

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

        

Basic

   $ 0.72     $ (0.54   $ 1.59     $ 0.32  
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

   $ 0.70     $ (0.54   $ 1.56     $ 0.32  
  

 

 

   

 

 

   

 

 

   

 

 

 

Average shares of common stock outstanding - basic

     131,163       130,695       131,204       130,647  
  

 

 

   

 

 

   

 

 

   

 

 

 

Average shares of common stock outstanding - diluted

     135,592       130,695       135,663       130,647  
  

 

 

   

 

 

   

 

 

   

 

 

 


SUPPLEMENTAL SEGMENT INFORMATION

IN THOUSANDS

(Unaudited)

 

     Three Months Ended     Six Months Ended  
     November 30,     November 30,  
     2017     2016     2017     2016  

Net Sales:

        

Industrial Segment

   $ 702,905     $ 633,429     $ 1,432,673     $ 1,309,269  

Consumer Segment

     415,431       373,774       842,575       773,661  

Specialty Segment

     197,080       183,567       385,562       359,903  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total

   $ 1,315,416     $ 1,190,770     $ 2,660,810     $ 2,442,833  
  

 

 

   

 

 

   

 

 

   

 

 

 

Income Before Income Taxes:

        

Industrial Segment

        

Income Before Income Taxes (a)

   $ 67,696     $ 50,291     $ 156,598     $ 139,557  

Interest (Expense), Net (b)

     (2,513     (1,906     (5,067     (3,743
  

 

 

   

 

 

   

 

 

   

 

 

 

EBIT (c)

     70,209       52,197       161,665       143,300  

Charge to exit Flowcrete Middle East (d)

     —         12,275       —         12,275  
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBIT

   $ 70,209     $ 64,472     $ 161,665     $ 155,575  
  

 

 

   

 

 

   

 

 

   

 

 

 

Consumer Segment

        

Income (Loss) Before Income Taxes (a)

   $ 45,085     $ (140,575   $ 117,453     $ (70,487

Interest (Expense) Income, Net (b)

     (143     (19     (339     (22
  

 

 

   

 

 

   

 

 

   

 

 

 

EBIT (c)

     45,228       (140,556     117,792       (70,465

Kirker impairment (e)

     —         188,298       —         188,298  
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBIT

   $ 45,228     $ 47,742     $ 117,792     $ 117,833  
  

 

 

   

 

 

   

 

 

   

 

 

 

Specialty Segment

        

Income Before Income Taxes (a)

   $ 34,439     $ 31,160     $ 67,606     $ 61,664  

Interest Income, Net (b)

     78       137       198       290  
  

 

 

   

 

 

   

 

 

   

 

 

 

EBIT (c)

   $ 34,361     $ 31,023     $ 67,408     $ 61,374  
  

 

 

   

 

 

   

 

 

   

 

 

 

Corporate/Other

        

(Expense) Before Income Taxes (a)

   $ (38,039   $ (47,733   $ (77,192   $ (89,116

Interest (Expense), Net (b)

     (20,079     (18,701     (39,769     (35,954
  

 

 

   

 

 

   

 

 

   

 

 

 

EBIT (c)

   $ (17,960   $ (29,032   $ (37,423   $ (53,162
  

 

 

   

 

 

   

 

 

   

 

 

 

Consolidated

        

Income (Loss) Before Income Taxes (a)

   $ 109,181     $ (106,857   $ 264,465     $ 41,618  

Interest (Expense), Net (b)

     (22,657     (20,489     (44,977     (39,429
  

 

 

   

 

 

   

 

 

   

 

 

 

EBIT (c)

     131,838       (86,368     309,442       81,047  

Charge to exit Flowcrete Middle East (d)

     —         12,275       —         12,275  

Kirker impairment (e)

     —         188,298       —         188,298  
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBIT

   $ 131,838     $ 114,205     $ 309,442     $ 281,620  
  

 

 

   

 

 

   

 

 

   

 

 

 

 

(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.
(d) Charges related to Flowcrete decision to exit the Middle East.
(e) Reflects the impact of goodwill and other intangible asset impairment charge of $188.3 million related to our Kirker reporting unit.


CONSOLIDATED BALANCE SHEETS    

IN THOUSANDS    

(Unaudited)    

 

     November 30,
2017
    November 30,
2016
    May 31,
2017
 

Assets

      

Current Assets

      

Cash and cash equivalents

   $ 267,857     $ 205,907     $ 350,497  

Trade accounts receivable

     1,023,748       881,723       1,039,468  

Allowance for doubtful accounts

     (43,508     (40,909     (44,138
  

 

 

   

 

 

   

 

 

 

Net trade accounts receivable

     980,240       840,814       995,330  

Inventories

     864,019       762,167       788,197  

Prepaid expenses and other current assets

     282,940       232,217       263,412  
  

 

 

   

 

 

   

 

 

 

Total current assets

     2,395,056       2,041,105       2,397,436  
  

 

 

   

 

 

   

 

 

 

Property, Plant and Equipment, at Cost

     1,547,126       1,353,282       1,484,579  

Allowance for depreciation

     (786,701     (714,353     (741,893
  

 

 

   

 

 

   

 

 

 

Property, plant and equipment, net

     760,425       638,929       742,686  
  

 

 

   

 

 

   

 

 

 

Other Assets

      

Goodwill

     1,167,963       1,085,763       1,143,913  

Other intangible assets, net of amortization

     579,929       521,198       573,092  

Deferred income taxes, non-current

     20,621       59,619       19,793  

Other

     220,677       200,847       213,529  
  

 

 

   

 

 

   

 

 

 

Total other assets

     1,989,190       1,867,427       1,950,327  
  

 

 

   

 

 

   

 

 

 

Total Assets

   $ 5,144,671     $ 4,547,461     $ 5,090,449  
  

 

 

   

 

 

   

 

 

 

Liabilities and Stockholders’ Equity

      

Current Liabilities

      

Accounts payable

   $ 447,071     $ 429,941     $ 534,718  

Current portion of long-term debt

     253,688       3,880       253,645  

Accrued compensation and benefits

     138,375       126,097       181,084  

Accrued losses

     23,566       33,846       31,735  

Other accrued liabilities

     212,293       292,849       234,212  
  

 

 

   

 

 

   

 

 

 

Total current liabilities

     1,074,993       886,613       1,235,394  
  

 

 

   

 

 

   

 

 

 

Long-Term Liabilities

      

Long-term debt, less current maturities

     1,883,272       1,634,967       1,836,437  

Other long-term liabilities

     506,606       701,091       482,491  

Deferred income taxes

     70,279       41,456       97,427  
  

 

 

   

 

 

   

 

 

 

Total long-term liabilities

     2,460,157       2,377,514       2,416,355  
  

 

 

   

 

 

   

 

 

 

Total liabilities

     3,535,150       3,264,127       3,651,749  
  

 

 

   

 

 

   

 

 

 

Commitments and contingencies

      

Stockholders’ Equity

      

Preferred stock; none issued

      

Common stock (outstanding 133,666; 133,576; 133,563)

     1,337       1,336       1,336  

Paid-in capital

     968,919       938,963       954,491  

Treasury stock, at cost

     (230,347     (215,936     (218,222

Accumulated other comprehensive (loss)

     (434,598     (555,541     (473,986

Retained earnings

     1,301,442       1,112,610       1,172,442  
  

 

 

   

 

 

   

 

 

 

Total RPM International Inc. stockholders’ equity

     1,606,753       1,281,432       1,436,061  

Noncontrolling interest

     2,768       1,902       2,639  
  

 

 

   

 

 

   

 

 

 

Total equity

     1,609,521       1,283,334       1,438,700  
  

 

 

   

 

 

   

 

 

 

Total Liabilities and Stockholders’ Equity

   $ 5,144,671     $ 4,547,461     $ 5,090,449  
  

 

 

   

 

 

   

 

 

 


CONSOLIDATED STATEMENTS OF CASH FLOWS

IN THOUSANDS

(Unaudited)

 

     Six Months Ended  
     November 30,  
     2017     2016  

Cash Flows From Operating Activities:

    

Net income

   $ 212,761     $ 43,138  

Adjustments to reconcile net income to net cash provided by (used for) operating activities:

    

Depreciation

     40,386       35,568  

Amortization

     23,245       22,111  

Goodwill and other intangible asset impairments

       188,298  

Deferred income taxes

     (32,276     (59,363

Stock-based compensation expense

     14,429       17,013  

Other non-cash interest expense

     2,843       4,964  

Realized (gain) on sales of marketable securities

     (4,897     (3,698

Other

     9       (47

Changes in assets and liabilities, net of effect from purchases and sales of businesses:

    

Decrease in receivables

     34,136       110,871  

(Increase) in inventory

     (62,923     (81,586

Decrease (increase) in prepaid expenses and other current and long-term assets

     3,919       (20,876

(Decrease) in accounts payable

     (95,302     (69,518

(Decrease) in accrued compensation and benefits

     (45,464     (55,662

(Decrease) in accrued losses

     (8,490     (899

Increase in other accrued liabilities

     33,304       28,057  

Other

     (494     361  
  

 

 

   

 

 

 

Cash Provided By Operating Activities

     115,186       158,732  
  

 

 

   

 

 

 

Cash Flows From Investing Activities:

    

Capital expenditures

     (45,295     (48,049

Acquisition of businesses, net of cash acquired

     (54,647     (65,201

Purchase of marketable securities

     (96,039     (25,142

Proceeds from sales of marketable securities

     58,867       24,588  

Other

     469       956  
  

 

 

   

 

 

 

Cash (Used For) Investing Activities

     (136,645     (112,848
  

 

 

   

 

 

 

Cash Flows From Financing Activities:

    

Additions to long-term and short-term debt

     35,036       76,369  

Reductions of long-term and short-term debt

     (1,535     (73,588

Cash dividends

     (82,878     (76,604

Shares of common stock repurchased and returned for taxes

     (12,125     (19,663

Payments of acquisition-related contingent consideration

     (3,359     (4,130

Other

     (1,464     (1,365
  

 

 

   

 

 

 

Cash (Used For) Financing Activities

     (66,325     (98,981
  

 

 

   

 

 

 

Effect of Exchange Rate Changes on Cash and

    

Cash Equivalents

     5,144       (6,148
  

 

 

   

 

 

 

Net Change in Cash and Cash Equivalents

     (82,640     (59,245

Cash and Cash Equivalents at Beginning of Period

     350,497       265,152  
  

 

 

   

 

 

 

Cash and Cash Equivalents at End of Period

   $ 267,857     $ 205,907  
  

 

 

   

 

 

 

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