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8-K - FORM 8-K - RPM INTERNATIONAL INC/DE/d254980d8k.htm

Exhibit 99.1

RPM Reports Fiscal 2017 Third-Quarter Results

 

    Sales increase 3% to third-quarter record level

 

    Diluted EPS of $0.09 compares to $0.14 a year ago

 

    Impairment and restructuring charges reduced diluted EPS by $0.05 per share

 

    Full-year EPS guidance maintained at $1.54 to $1.64 per diluted share; as-adjusted guidance revised to $2.57 to $2.67, from $2.62 to $2.72 due to impairment and restructuring charges

 

    Third-quarter acquisitions add approximately $170 million in annualized revenue

MEDINA, OH – April 6, 2017 – RPM International Inc. (NYSE: RPM) today reported record sales for its fiscal 2017 third quarter ended February 28, 2017. Third-quarter net income declined versus the prior-year period primarily due to a pre-tax charge of $4.9 million for an intangible impairment on the Restore product line and a pre-tax charge of $4.2 million for the closing of a European manufacturing facility.

Third-Quarter Results

Net sales grew 3.4% to $1.0 billion in the fiscal 2017 third quarter from $988.6 million in the fiscal 2016 third quarter. Net income of $11.9 million in the fiscal 2017 third quarter decreased 35.8% from $18.6 million reported a year ago. Third-quarter earnings per share were $0.09, down 35.7% from the $0.14 reported last year. Income before income taxes (IBT) was $17.0 million, down 22.4% from year-ago IBT of $21.9 million. Consolidated earnings before interest and taxes (EBIT) were $37.1 million, down 11.9% from year-ago EBIT of $42.1 million. The impairment and restructuring charges reduced both IBT and EBIT by $9.1 million in the quarter.

During the current quarter, certain negative trends in the Restore product line led to a loss of market share, resulting in a downward revision to its long-term forecast. This was determined to represent an impairment triggering event and, after additional testing, resulted in a pre-tax impairment charge of $4.9 million. Also during the quarter, as previously discussed, an unprofitable operation in Europe was closed that resulted in a pre-tax charge of $4.2 million.

“We were pleased with our consolidated sales growth during the third quarter, which is typically slow due to cold winter weather that limits outdoor repair, maintenance and construction activities. Our earnings were negatively impacted by approximately $0.05 per share due to the Restore intangible impairment charge and the charge for the closure of a European manufacturing facility, which is consistent with our strategy to close underperforming operations. On the acquisition front, we completed five transactions during the quarter, which will add approximately $170 million in annualized sales,” stated Frank C. Sullivan, RPM chairman and chief executive officer. “Costs associated with completing these acquisitions, as well as the associated impact on cost of sales resulting from the step-up in inventory, further reduced EPS by approximately $0.03 per share.”


RPM Reports Fiscal 2017 Third-Quarter Results

April 6, 2017

Page 2

 

Third-Quarter Segment Sales and Earnings

Industrial segment sales increased 5.8% to $521.4 million from $492.7 million in the fiscal 2016 third quarter. Organic sales improved 2.5%, while acquisitions added 4.1%. Foreign currency translation negatively impacted sales by 0.8%. IBT was $11.7 million, compared to year-ago IBT of $0.5 million. Industrial segment EBIT for the quarter of $14.6 million was up sharply from last year’s EBIT of $2.0 million.

“Our businesses serving the U.S. commercial construction market again experienced solid organic growth. Most businesses in Europe were up in the low- to mid-single-digit range in local currencies and current-year acquisitions contributed nicely to the segment’s overall sales growth. We were very pleased with the strong EBIT leverage achieved on solid top-line sales,” stated Sullivan.    

Third-quarter sales in the company’s specialty segment increased 1.8% to $159.7 million from $156.9 million a year ago. Organic sales decreased 0.6% and acquisitions added 3.8%. Foreign currency translation negatively impacted sales by 1.4%. IBT was $15.0 million, down 31.0% from year-ago IBT of $21.7 million. Specialty segment EBIT declined 30.8% to $14.9 million from $21.5 million in the fiscal 2016 third quarter.

“Sales were soft for nearly all of our specialty segment businesses, which cut across a broad range of industries, and earnings were negatively impacted by the European facility closure amounting to $4.2 million. In this traditionally slow quarter, the segment didn’t generate enough top-line momentum to create positive leverage through its fixed operating cost structure,” stated Sullivan.

Sales in RPM’s consumer segment increased 0.7% to $341.4 million from $339.0 million in the fiscal 2016 third quarter. Organic sales declined 3.6%, while acquisitions added 5.1%. Foreign currency translation negatively impacted sales by 0.8%. IBT was $29.8 million, down 23.2% from year-ago IBT of $38.8 million. Consumer segment EBIT declined 22.9% to $29.9 million from $38.8 million a year ago.

“Excluding our Kirker nail enamel business, the consumer segment produced modest sales growth, primarily driven by acquisitions. The decline in organic sales was driven by the timing of orders from our retail customers during the quarter. Impacting segment earnings for the quarter was the Restore impairment charge, along with acquisition-related expenses and the impact on cost of sales relating to the step-up in inventory. Looking ahead, we are encouraged by housing market activity, retail customer results and the acceptance of recently introduced new products,” stated Sullivan.

Cash Flow and Financial Position

For the first nine months of fiscal 2017, cash from operations was $173.5 million, compared to $223.8 million in the first nine months of fiscal 2016. Capital expenditures during the current nine-month period of $80.1 million compare to $54.8 million over the same time in fiscal 2016. Cash invested in acquisitions totaled $247 million. Total debt at the end of the first nine months of fiscal 2017 was $1.98 billion, compared to $1.74 billion a year ago and $1.64 billion at the end of fiscal 2016. RPM’s net (of cash) debt-to-total capitalization ratio was 58.0%, compared to 55.1% at February 29, 2016 and 50.0% at May 31, 2016.


RPM Reports Fiscal 2017 Third-Quarter Results

April 6, 2017

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“At February 28, 2017, RPM’s total liquidity, including cash and long-term committed available credit, was $620.0 million. Building upon this year’s strong pace of acquisitions, we continue our search for entrepreneurial acquisition candidates and to invest in our internal growth initiatives. In March 2017, we issued $450 million in bonds to pay down existing balances and free up available borrowings on our revolving credit facility,” stated Sullivan.

Nine-Month Results

Nine-month net sales grew 2.3% to $3.47 billion from $3.39 billion a year ago. Net income of $53.8 million declined 73.4% from net income of $201.8 million in the year-ago period. Diluted earnings per share declined 72.7% to $0.41 from $1.50 in the first nine months of fiscal 2016. IBT was $58.6 million, down 79.4% from year-ago IBT of $284.4 million. Consolidated EBIT was $118.2 million, down 65.7% from year-ago EBIT of $344.4 million.

The fiscal 2017 nine month results included a $188.3 million Kirker impairment charge and a $12.3 million charge related to the decision to exit Flowcrete Middle East, while the fiscal 2016 nine-month results included a $14.5 million reversal of Kirker’s final earnout accrual into income. Excluding these items, earnings per diluted share increased from $1.43 per share to $1.44 per share, while consolidated EBIT was $318.8 million, down 3.4% from year-ago EBIT of $329.9 million.

Nine-Month Segment Sales and Earnings

Sales for RPM’s industrial segment increased 2.1%, to $1.83 billion from $1.79 billion in the fiscal 2016 first nine months. Organic sales increased 1.9%, while acquisitions added 2.3%. Foreign currency translation negatively impacted sales by 2.1%. IBT was $151.3 million, up 1.5% from year-ago IBT of $149.0 million. Industrial segment EBIT of $158.0 million was up 2.9% from EBIT of $153.5 million in the first nine months of fiscal 2016. Excluding the current-year Flowcrete Middle East charge, EBIT was $170.2 million, up 10.9% from year-ago EBIT of $153.5 million.

Specialty segment sales increased 3.8% to $519.6 million from $500.4 million in the first nine months a year ago. Organic sales increased 2.5% and acquisitions added 3.0%. Foreign currency translation negatively impacted sales by 1.7%. IBT was $76.7 million, up 0.2% from year-ago IBT of $76.5 million. Specialty segment EBIT improved 0.5% to $76.3 million from $75.8 million in the same period a year ago.

In the consumer segment, nine-month sales were up 2.0% to $1.12 billion from $1.09 billion in the first nine months of fiscal 2016. Organic sales improved 1.4%, while acquisitions added 2.1%. Foreign currency negatively impacted sales by 1.5%. Loss before income taxes was $40.7 million, compared to year-ago IBT of $170.3 million. Consumer segment EBIT was a negative $40.6 million compared to EBIT of $170.2 million in the first nine months a year ago. Excluding the current-year Kirker impairment charge and the prior year’s Kirker earnout reversal, EBIT was $147.7 million, down 5.1% from year-ago EBIT of $155.7 million.


RPM Reports Fiscal 2017 Third-Quarter Results

April 6, 2017

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Business Outlook

“As we look ahead, we expect that recent expense-reduction initiatives, along with the $220 million in revenue added via nine acquisitions this fiscal year, have RPM well positioned for solid performance in the fourth quarter and into fiscal 2018,” Sullivan stated.

“In our industrial segment, we expect mid-single-digit sales growth during the fourth quarter. This is predicated on continued strength in our businesses serving U.S. commercial construction markets and steady progress in Europe. Also, contributing to growth will be approximately $80 million in annualized sales from six industrial acquisitions completed this fiscal year,” stated Sullivan.

“The specialty segment is expected to grow in the low- to mid-single-digit range during the fourth quarter, driven by a balance between organic and acquisition growth,” Sullivan stated.

“Our consumer segment’s fourth-quarter sales should increase in the mid-single-digit range. Third-quarter acquisitions in the segment will help balance out underperformance at our Kirker business, which remains challenged,” Sullivan stated.

“As-reported EPS guidance for the full fiscal year of $1.54 to $1.64 remains unchanged. In January, we provided full-year as-adjusted EPS guidance of $2.62 to $2.72. As-adjusted EPS guidance is being reduced by $0.05 per share to $2.57 to $2.67 for the combined third quarter charges for the Restore intangible impairment and the European facility closure,” stated Sullivan.

Webcast and Conference Call Information

Management will host a conference call to discuss these results beginning at 10:00 a.m. EDT 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. EDT today until 11:59 p.m. EDT on April 13, 2017. The replay can be accessed by dialing 888-843-7419 or 630-652-3042 for international callers. The access code is 43815401. 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.

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,


RPM Reports Fiscal 2017 Third-Quarter Results

April 6, 2017

Page 5

 

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 last page 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, 2016, 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     Nine Months Ended  
     February 28,
2017
    February 29,
2016
    February 28,
2017
    February 29,
2016
 

Net Sales

   $ 1,022,496     $ 988,555     $ 3,465,329     $ 3,387,065  

Cost of sales

     593,923       575,593       1,963,033       1,947,211  
  

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

     428,573       412,962       1,502,296       1,439,854  

Selling, general & administrative expenses

     386,032       370,913       1,189,611       1,096,361  

Goodwill and other intangible asset impairments

     4,900         193,198    

Interest expense

     23,769       23,140       69,452       68,078  

Investment (income), net

     (3,627     (2,909     (9,881     (8,077

Other expense (income), net

     502       (88     1,301       (876
  

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

     16,997       21,906       58,615       284,368  

Provision for income taxes

     4,313       2,613       2,793       80,564  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income

     12,684       19,293       55,822       203,804  

Less: Net income attributable to noncontrolling interests

     756       711       2,051       1,974  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income attributable to RPM International Inc. Stockholders

   $ 11,928     $ 18,582     $ 53,771     $ 201,830  
  

 

 

   

 

 

   

 

 

   

 

 

 

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

        

Basic

   $ 0.09     $ 0.14     $ 0.41     $ 1.53  
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

   $ 0.09     $ 0.14     $ 0.41     $ 1.50  
  

 

 

   

 

 

   

 

 

   

 

 

 

Average shares of common stock outstanding - basic

     130,677       129,068       130,657       129,506  
  

 

 

   

 

 

   

 

 

   

 

 

 

Average shares of common stock outstanding - diluted

     130,677       129,068       130,657       136,848  
  

 

 

   

 

 

   

 

 

   

 

 

 


SUPPLEMENTAL SEGMENT INFORMATION

IN THOUSANDS

(Unaudited)

 

     Three Months Ended     Nine Months Ended  
     February 28,
2017
    February 29,
2016
    February 28,
2017
    February 29,
2016
 

Net Sales:

        

Industrial Segment

   $ 521,403     $ 492,662     $ 1,830,672     $ 1,793,075  

Specialty Segment

     159,659       156,909       519,562       500,395  

Consumer Segment

     341,434       338,984       1,115,095       1,093,595  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total

   $ 1,022,496     $ 988,555     $ 3,465,329     $ 3,387,065  
  

 

 

   

 

 

   

 

 

   

 

 

 

Income Before Income Taxes (a):

        

Industrial Segment

        

Income Before Income Taxes (b)

   $ 11,705     $ 486     $ 151,262     $ 148,962  

Interest (Expense), Net (c)

     (2,929     (1,468     (6,672     (4,549
  

 

 

   

 

 

   

 

 

   

 

 

 

EBIT (d)

     14,634       1,954       157,934       153,511  

Charge to exit Flowcrete Middle East (e)

         12,275    
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBIT

   $ 14,634     $ 1,954     $ 170,209     $ 153,511  
  

 

 

   

 

 

   

 

 

   

 

 

 

Specialty Segment

        

Income Before Income Taxes (b)

   $ 15,000     $ 21,729     $ 76,664     $ 76,496  

Interest Income, Net (c)

     116       208       406       650  
  

 

 

   

 

 

   

 

 

   

 

 

 

EBIT (d)

   $ 14,884     $ 21,521     $ 76,258     $ 75,846  
  

 

 

   

 

 

   

 

 

   

 

 

 

Consumer Segment

        

(Loss) Income Before Income Taxes (b)

   $ 29,802     $ 38,785     $ (40,685   $ 170,337  

Interest (Expense) Income, Net (c)

     (92     16       (114     116  
  

 

 

   

 

 

   

 

 

   

 

 

 

EBIT (d)

     29,894       38,769       (40,571     170,221  

Goodwill and intangible impairments (f)

         188,298    

Reversal of Kirker earnout (g)

           (14,500
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBIT

   $ 29,894     $ 38,769     $ 147,727     $ 155,721  
  

 

 

   

 

 

   

 

 

   

 

 

 

Corporate/Other

        

(Expense) Before Income Taxes (b)

   $ (39,510   $ (39,094   $ (128,626   $ (111,427

Interest (Expense), Net (c)

     (17,237     (18,987     (53,191     (56,218
  

 

 

   

 

 

   

 

 

   

 

 

 

EBIT (d)

   $ (22,273   $ (20,107   $ (75,435   $ (55,209
  

 

 

   

 

 

   

 

 

   

 

 

 

Consolidated

        

(Loss) Income Before Income Taxes (b)

   $ 16,997     $ 21,906     $ 58,615     $ 284,368  

Interest (Expense), Net (c)

     (20,142     (20,231     (59,571     (60,001
  

 

 

   

 

 

   

 

 

   

 

 

 

EBIT (d)

     37,139       42,137       118,186       344,369  

Charge to exit Flowcrete Middle East (e)

         12,275    

Goodwill and intangible impairments (f)

         188,298    

Reversal of Kirker earnout (g)

           (14,500
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBIT

   $ 37,139     $ 42,137     $ 318,759     $ 329,869  
  

 

 

   

 

 

   

 

 

   

 

 

 

 

(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 the impact of goodwill and other intangible asset impairment charges of $188.3 million related to our Kirker reporting unit.
(g) Reflects the reversal of contingent obligations for earnout targets that were not met at our Kirker reporting unit.


SUPPLEMENTAL INFORMATION

RECONCILIATION OF “REPORTED” TO “ADJUSTED” AMOUNTS

(Unaudited)

 

     Three Months Ended      Nine Months Ended  
     February 28,      February 29,      February 28,      February 29,  
     2017      2016      2017      2016  

Reconciliation of Reported Earnings (Loss) per Diluted Share to Adjusted Earnings per Diluted Share:

           

Reported (Loss) Earnings per Diluted Share

   $ 0.09      $ 0.14      $ 0.41      $ 1.50  

Charge to exit Flowcrete Middle East (e)

           0.09     

Goodwill and intangible impairments (f)

           0.94     

Reversal of Kirker earnout (g)

              (0.07
  

 

 

    

 

 

    

 

 

    

 

 

 

Adjusted Earnings per Diluted Share

   $ 0.09      $ 0.14      $ 1.44      $ 1.43  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

(e) Charges related to Flowcrete decision to exit the Middle East.
(f) Reflects the impact of goodwill and other intangible asset impairment charge of $188.3 million related to our Kirker reporting unit.
(g) Reflects the reversal of contingent obligations for earnout targets that were not met at our Kirker reporting unit.


CONSOLIDATED BALANCE SHEETS

IN THOUSANDS

(Unaudited)

 

     February 28, 2017     February 29, 2016     May 31, 2016  

Assets

      

Current Assets

      

Cash and cash equivalents

   $ 210,796     $ 220,712     $ 265,152  

Trade accounts receivable

     829,632       769,003       987,692  

Allowance for doubtful accounts

     (41,357     (22,450     (24,600
  

 

 

   

 

 

   

 

 

 

Net trade accounts receivable

     788,275       746,553       963,092  

Inventories

     856,461       739,716       685,818  

Deferred income taxes

     —         29,042       —    

Prepaid expenses and other current assets

     224,347       191,291       221,286  
  

 

 

   

 

 

   

 

 

 

Total current assets

     2,079,879       1,927,314       2,135,348  
  

 

 

   

 

 

   

 

 

 

Property, Plant and Equipment, at Cost

     1,433,413       1,278,553       1,344,830  

Allowance for depreciation

     (731,279     (698,902     (715,377
  

 

 

   

 

 

   

 

 

 

Property, plant and equipment, net

     702,134       579,651       629,453  
  

 

 

   

 

 

   

 

 

 

Other Assets

      

Goodwill

     1,133,013       1,182,293       1,219,630  

Other intangible assets, net of amortization

     579,237       566,977       575,401  

Deferred income taxes, non-current

     25,872       2,237       19,771  

Other

     212,084       177,778       185,366  
  

 

 

   

 

 

   

 

 

 

Total other assets

     1,950,206       1,929,285       2,000,168  
  

 

 

   

 

 

   

 

 

 

Total Assets

   $ 4,732,219     $ 4,436,250     $ 4,764,969  
  

 

 

   

 

 

   

 

 

 

Liabilities and Stockholders’ Equity

      

Current Liabilities

      

Accounts payable

   $ 417,730     $ 367,038     $ 500,506  

Current portion of long-term debt

     383,980       3,405       4,713  

Accrued compensation and benefits

     133,588       129,105       183,768  

Accrued losses

     37,123       27,581       35,290  

Other accrued liabilities

     258,102       255,274       277,914  
  

 

 

   

 

 

   

 

 

 

Total current liabilities

     1,230,523       782,403       1,002,191  
  

 

 

   

 

 

   

 

 

 

Long-Term Liabilities

      

Long-term debt, less current maturities

     1,597,553       1,737,984       1,635,260  

Other long-term liabilities

     569,859       609,952       702,979  

Deferred income taxes

     48,557       65,391       49,791  
  

 

 

   

 

 

   

 

 

 

Total long-term liabilities

     2,215,969       2,413,327       2,388,030  
  

 

 

   

 

 

   

 

 

 

Total liabilities

     3,446,492       3,195,730       3,390,221  
  

 

 

   

 

 

   

 

 

 

Commitments and contingencies

      

Stockholders’ Equity

      

Preferred stock; none issued

      

Common stock (outstanding 133,583; 132,846; 132,944)

     1,336       1,328       1,329  

Paid-in capital

     946,955       895,131       921,956  

Treasury stock, at cost

     (216,366     (191,693     (196,274

Accumulated other comprehensive (loss)

     (533,165     (497,754     (502,047

Retained earnings

     1,084,462       1,031,020       1,147,371  
  

 

 

   

 

 

   

 

 

 

Total RPM International Inc. stockholders’ equity

     1,283,222       1,238,032       1,372,335  

Noncontrolling interest

     2,505       2,488       2,413  
  

 

 

   

 

 

   

 

 

 

Total equity

     1,285,727       1,240,520       1,374,748  
  

 

 

   

 

 

   

 

 

 

Total Liabilities and Stockholders’ Equity

   $ 4,732,219     $ 4,436,250     $ 4,764,969  
  

 

 

   

 

 

   

 

 

 


CONSOLIDATED STATEMENTS OF CASH FLOWS

IN THOUSANDS

(Unaudited)

 

     Nine Months Ended  
     February 28,
2017
    February 29,
2016
 

Cash Flows From Operating Activities:

    

Net income

   $ 55,822     $ 203,804  

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

    

Depreciation

     53,343       49,980  

Amortization

     33,497       33,151  

Goodwill and other intangible asset impairments

     193,198    

Reversal of contingent consideration obligations

       (14,500

Deferred income taxes

     (26,996     (18,556

Stock-based compensation expense

     25,005       23,000  

Other non-cash interest expense

     7,149       7,305  

Realized (gain) on sales of marketable securities

     (5,338     (5,438

Other

     136       1,994  

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

    

Decrease in receivables

     190,423       179,003  

(Increase) in inventory

     (143,409     (81,837

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

     (26,698     (13,347

(Decrease) in accounts payable

     (95,727     (133,841

(Decrease) in accrued compensation and benefits

     (50,425     (35,202

Increase in accrued losses

     2,247       5,948  

(Decrease) increase in other accrued liabilities

     (35,135     4,696  

Other

     (3,613     17,659  
  

 

 

   

 

 

 

Cash Provided By Operating Activities

     173,479       223,819  
  

 

 

   

 

 

 

Cash Flows From Investing Activities:

    

Capital expenditures

     (80,110     (54,819

Acquisition of businesses, net of cash acquired

     (246,874     (28,926

Purchase of marketable securities

     (36,418     (21,981

Proceeds from sales of marketable securities

     36,696       18,722  

Other

     1,493       7,430  
  

 

 

   

 

 

 

Cash (Used For) Investing Activities

     (325,213     (79,574
  

 

 

   

 

 

 

Cash Flows From Financing Activities:

    

Additions to long-term and short-term debt

     422,521       116,578  

Reductions of long-term and short-term debt

     (78,654     (19,419

Cash dividends

     (116,680     (107,806

Shares of common stock repurchased and returned for taxes

     (20,092     (66,765

Payments of acquisition-related contingent consideration

     (4,206     (2,006

Payments for 524(g) trust

     (102,500  

Other

     (2,009     (1,239
  

 

 

   

 

 

 

Cash Provided By (Used For) Financing Activities

     98,380       (80,657
  

 

 

   

 

 

 

Effect of Exchange Rate Changes on Cash and Cash Equivalents

     (1,002     (17,587
  

 

 

   

 

 

 

Net Change in Cash and Cash Equivalents

     (54,356     46,001  

Cash and Cash Equivalents at Beginning of Period

     265,152       174,711  
  

 

 

   

 

 

 

Cash and Cash Equivalents at End of Period

   $ 210,796     $ 220,712