MEDINA, Ohio, April 8, 2015 /PRNewswire/ -- RPM
International Inc. (NYSE: RPM) today reported record sales for its
fiscal 2015 third quarter ended February 28,
2015, but incurred an as-reported loss for the quarter due
to a one-time, non-cash net charge for a tax accrual related to the
possible repatriation of overseas earnings to fund future
obligations for the company's Specialty Products Holding Corp.
(SPHC) settlement.
SPHC and its Bondex subsidiary emerged from bankruptcy on
December 23, 2014, following approval
of a plan of reorganization by the United States Bankruptcy Court
in Delaware and the United States
District Court in Delaware. The
plan included the establishment of a 524(g) trust to assume their
current and future asbestos personal injury liability claims, and
absolved SPHC and Bondex from any further asbestos liability. An
initial $450.0 million payment was
made to the trust using funds from RPM's revolving line of credit
in December 2014.
While SPHC and its operating units continued to be owned by RPM
during the bankruptcy process, which began May 31, 2010, their financial results were not
included in RPM's consolidated results. SPHC results were
reconsolidated, effective January 1,
2015, and RPM's fiscal 2015 third-quarter results reflect
two months of SPHC operations. SPHC operating units include Day-Glo
Color, Dryvit Systems, Kop-Coat, RPM Wood Finishes Group, TCI,
ValvTect Petroleum Products and Chemical Specialties
Manufacturing.
"We are delighted to have these great management teams and
companies back in the fold at RPM. During the period while they
were deconsolidated, they demonstrated significant organic growth
with current-day sales of more than $400
million on an annualized basis and developed some very
exciting new products," stated Frank C.
Sullivan, RPM chairman and chief executive officer.
Third-Quarter Results
Net sales grew 9.6% to $946.4
million in the fiscal 2015 third quarter from $863.4 million in the fiscal 2014 third quarter.
Consolidated earnings before interest and taxes (EBIT) were
$34.2 million, down 7.9% from
$37.2 million a year ago. The
as-reported loss for the quarter was $57.3
million, or $0.44 per diluted
share, compared to fiscal 2014 third-quarter net income of
$16.2 million, or $0.12 per diluted share. Fiscal 2015
third-quarter results reflected the impact of the non-cash, net
charge of $83.5 million for the
tax accrual.
Excluding the non-cash, net charge, on an as-adjusted basis,
fiscal 2015 third-quarter net income grew 61.2% to $26.2 million, or $0.20 per diluted share. This includes
approximately $0.05 per share of
unfavorable foreign currency impact, and $0.01 per share of dilution attributable to SPHC,
due principally to inventory step-up expense and the non-recurring
charges associated with the SPHC settlement, which offset the
otherwise positive performance from the reconsolidated
companies.
Third-Quarter Segment Sales and Earnings
Industrial segment sales grew 10.6% to $620.0 million from $560.5
million in the fiscal 2014 third quarter. Organic sales
improved 5.5%, while acquisitions added 12.4%. The reconsolidated
SPHC businesses, all of which are in RPM's industrial segment, are
included in acquisition growth. Foreign currency negatively
impacted sales by 7.3%. Industrial segment EBIT for the quarter,
including $5.0 million in
stepped-up inventory expense from SPHC, was $18.2 million, a 19.6% decline from EBIT of
$22.7 million a year ago.
"Results from our industrial segment have been mixed. With 50%
of this segment's sales outside of the
United States, the rapid strengthening of the U.S. dollar
against virtually all other currencies has created significant
headwinds. Europe, our largest
overseas geography, was nearly flat in revenue growth in local
currency," stated Sullivan. "Our U.S. industrial businesses are
performing quite well, with most of them enjoying double-digit
sales increases in the quarter."
Sales in RPM's consumer segment increased 7.8% to $326.4 million from $302.9
million in the fiscal 2014 third quarter. Organic sales
increased 9.1%, while acquisitions added 1.2%. Foreign currency
negatively impacted sales by 2.5%. Consumer segment EBIT increased
13.9% to $35.0 million from
$30.8 million a year ago.
"Our consumer segment performed well in the quarter, which is
consistent with the gradual improvement in residential housing,
consumer confidence and discretionary spending. The segment's
performance was also positively impacted by the introduction of
several new products for the spring season," stated
Sullivan.
Cash Flow and Financial Position
For the first nine months of fiscal 2015, cash from operations
was $24.1 million, compared to
$25.9 million in the first nine
months of fiscal 2014. Capital expenditures during the current
nine-month period of $47.3 million
compare to depreciation of $45.9
million over the same time. Total debt at the end of the
first nine months of fiscal 2015 was $1.87
billion and includes the $450.0
million 524(g) trust payment from the revolving credit
facility in December 2014. Total debt
a year ago was $1.39 billion and
$1.35 billion at the end of fiscal
2014. RPM's net (of cash) debt-to-total capitalization ratio was
57.2%, compared to 47.3% at February 28,
2014. During the third quarter, the company repurchased
550,000 shares of its stock in the open market with a cost of
approximately $26 million.
"At February 28, 2015, RPM's total
liquidity, including cash and long-term committed available credit,
was $648 million," Sullivan stated.
"We continue our search for strong acquisition candidates that
complement our existing product lines and expand RPM's geographic
presence, as reflected in the Rust-Oleum Group acquisition of
Spraymate Group in South Africa,
which took place subsequent to the end of the third quarter,"
stated Sullivan.
Nine-Month Results
Nine-month net sales grew 3.9% to $3.22
billion from $3.10 billion a
year ago. Consolidated EBIT was $318.0
million, up slightly from $317.6
million a year ago. Reported net income of $111.5 million, or $0.84 per diluted share, declined 39.0% from net
income of $182.9 million, or
$1.37 per diluted share, in the
year-ago period. Excluding the third-quarter non-cash, net charge
in fiscal 2015, net income improved 6.6% to $195.0 million, or $1.44 per diluted share.
Nine-Month Segment Sales and Earnings
Sales for RPM's industrial segment increased 5.6%, to
$2.11 billion from a reported
$2.00 billion in the fiscal 2014
first nine months. Organic sales increased 4.6%, while acquisitions
added 4.2%. Foreign currency negatively impacted sales by 3.2%.
Industrial segment EBIT of $202.3
million declined 2.1% from EBIT of $206.7 million in the first nine months of fiscal
2014.
In the consumer segment, nine-month sales increased 0.9% to
$1.11 billion from $1.10 billion in the first nine months of fiscal
2014. Organic sales improved 0.7%, while acquisitions added 1.3%.
Foreign currency negatively impacted sales by 1.1%. Consumer
segment EBIT improved 4.9%, to $173.3 million from $165.1 million in the first nine months a year
ago.
Business Outlook
"For the fourth quarter of our fiscal year, we expect our
consumer segment to benefit from continued innovation and
consistent growth in consumer DIY spending. In our industrial
segment, we do not see a near-term turnaround in the European
economies and expect a very strong U.S. dollar to continue
negatively impacting results," stated Sullivan. "Our businesses
serving the energy sector are beginning to see the effects of a
slowdown in production due to the decline in oil prices. However,
we do expect continued positive momentum in our businesses serving
the U.S. commercial construction markets."
"Based on these factors, along with an anticipated benefit from
the SPHC companies in the fourth quarter, we expect to be at the
upper end of our current EPS guidance range of $2.25 to $2.30 per share for the full 2015 fiscal
year, on an as-adjusted basis."
"From a longer-term perspective, we are optimistic given the
return of our SPHC businesses and the elimination of their asbestos
liability. We can now accelerate growth investments in our
businesses and more aggressively return capital to shareholders
when appropriate," stated Sullivan.
Webcast and Conference Call Information
Management will host a conference call to discuss the results
beginning at 10:00 a.m. EDT the same
day. 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 on April 8, 2015 until 11:59
p.m. EDT on April 15, 2015.
The replay can be accessed by dialing 888-843-7419 or 630-652-3042
for international callers. The access code is 38349285. 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 for both industrial and consumer markets. RPM's industrial
products include roofing systems, sealants, corrosion control
coatings, flooring coatings and specialty chemicals. Industrial
companies include Stonhard, Tremco, illbruck, Carboline, Flowcrete,
Day-Glo, Dryvit and Euclid Chemical. 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. 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 and planning,
at 330-273-5090 or bslifstein@rpminc.com.
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, 2014, 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)
|
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|
|
As
Reported
|
|
|
Adjusted
(1)
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
Nine Months
Ended
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
|
|
|
|
|
February
28,
|
|
|
February
28,
|
|
|
February
28,
|
|
|
|
|
|
|
|
2015
|
|
2014
|
|
|
2015
|
|
2014
|
|
|
2015
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Sales
|
|
|
|
|
$
946,367
|
|
$
863,410
|
|
|
$ 3,221,391
|
|
$ 3,099,571
|
|
|
$
946,367
|
|
$
3,221,391
|
|
Cost of
sales
|
|
|
|
|
566,629
|
|
505,384
|
|
|
1,879,317
|
|
1,784,528
|
|
|
566,629
|
|
1,879,317
|
|
Gross
profit
|
|
|
|
|
379,738
|
|
358,026
|
|
|
1,342,074
|
|
1,315,043
|
|
|
379,738
|
|
1,342,074
|
|
Selling, general
& administrative expenses
|
|
|
|
|
346,171
|
|
322,205
|
|
|
1,027,585
|
|
1,000,712
|
|
|
346,171
|
|
1,027,585
|
|
Interest
expense
|
|
|
|
|
21,493
|
|
19,740
|
|
|
60,312
|
|
61,274
|
|
|
21,493
|
|
60,312
|
|
Investment (income),
net
|
|
|
|
|
(7,693)
|
|
(7,751)
|
|
|
(16,554)
|
|
(13,650)
|
|
|
(7,693)
|
|
(16,554)
|
|
Other (income),
net
|
|
|
|
|
(660)
|
|
(1,353)
|
|
|
(3,524)
|
|
(3,278)
|
|
|
(660)
|
|
(3,524)
|
|
Income before income
taxes
|
|
|
|
|
20,427
|
|
25,185
|
|
|
274,255
|
|
269,985
|
|
|
20,427
|
|
274,255
|
|
Provision for income
taxes
|
|
|
|
|
99,379
|
|
8,274
|
|
|
174,512
|
|
77,771
|
|
|
(6,847)
|
|
68,286
|
|
Net (loss)
income
|
|
|
|
|
(78,952)
|
|
16,911
|
|
|
99,743
|
|
192,214
|
|
|
27,274
|
|
205,969
|
|
Less: Net
(loss) income attributable to noncontrolling interests
|
|
|
(21,604)
|
|
690
|
|
|
(11,754)
|
|
9,333
|
|
|
1,118
|
|
10,968
|
|
Net (loss) income
attributable to RPM International Inc. Stockholders
|
$
(57,348)
|
|
$
16,221
|
|
|
$
111,497
|
|
$
182,881
|
|
|
$
26,156
|
|
$
195,001
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) earnings
per share of common stock attributable to
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RPM International
Inc. Stockholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
|
$
(0.44)
|
|
$
0.12
|
|
|
$
0.84
|
|
$
1.38
|
|
|
$
0.20
|
|
$
1.47
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
|
|
|
$
(0.44)
|
|
$
0.12
|
|
|
$
0.84
|
|
$
1.37
|
|
|
$
0.20
|
|
$
1.44
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average shares of
common stock outstanding - basic
|
|
|
|
129,795
|
|
129,453
|
|
|
130,039
|
|
129,407
|
|
|
129,795
|
|
130,039
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average shares of
common stock outstanding - diluted
|
|
|
|
129,795
|
|
129,453
|
|
|
134,995
|
|
131,569
|
|
|
129,795
|
|
134,995
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
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|
|
(1)
|
See attached
page for reconciliation from As Reported to Adjusted
figures.
|
|
|
|
|
|
|
|
|
|
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|
|
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|
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|
SUPPLEMENTAL
SEGMENT INFORMATION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
IN
THOUSANDS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
Reported
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
Nine Months
Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
February
28,
|
|
|
February
28,
|
|
|
|
|
|
|
|
|
|
|
|
|
2015
|
|
2014
|
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Industrial
Segment
|
|
|
|
|
$
619,997
|
|
$
560,537
|
|
|
$ 2,112,230
|
|
$ 2,000,476
|
|
|
|
|
|
|
|
Consumer
Segment
|
|
|
|
|
326,370
|
|
302,873
|
|
|
1,109,161
|
|
1,099,095
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
$
946,367
|
|
$
863,410
|
|
|
$ 3,221,391
|
|
$ 3,099,571
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Before
Income Taxes (a):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Industrial
Segment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Before Income Taxes
(a)
|
|
|
|
|
$
16,558
|
|
$
20,284
|
|
|
$
196,131
|
|
$
199,259
|
|
|
|
|
|
|
|
Interest (Expense), Net
(b)
|
|
|
|
|
(1,684)
|
|
(2,413)
|
|
|
(6,215)
|
|
(7,475)
|
|
|
|
|
|
|
|
EBIT (c)
|
|
|
|
|
$
18,242
|
|
$
22,697
|
|
|
$
202,346
|
|
$
206,734
|
|
|
|
|
|
|
|
Consumer
Segment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Before Income Taxes
(a)
|
|
|
|
|
$
35,049
|
|
$
30,794
|
|
|
$
173,280
|
|
$
165,231
|
|
|
|
|
|
|
|
Interest (Expense), Net
(b)
|
|
|
|
|
6
|
|
25
|
|
|
(6)
|
|
90
|
|
|
|
|
|
|
|
EBIT (c)
|
|
|
|
|
$
35,043
|
|
$
30,769
|
|
|
$
173,286
|
|
$
165,141
|
|
|
|
|
|
|
|
Corporate/Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Expense) Before Income
Taxes (a)
|
|
|
|
|
$
(31,180)
|
|
$
(25,893)
|
|
|
$
(95,156)
|
|
$
(94,505)
|
|
|
|
|
|
|
|
Interest (Expense), Net
(b)
|
|
|
|
|
(12,122)
|
|
(9,601)
|
|
|
(37,537)
|
|
(40,239)
|
|
|
|
|
|
|
|
EBIT (c)
|
|
|
|
|
$
(19,058)
|
|
$
(16,292)
|
|
|
$
(57,619)
|
|
$
(54,266)
|
|
|
|
|
|
|
|
Consolidated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Before Income Taxes (a)
|
|
|
|
|
$
20,427
|
|
$
25,185
|
|
|
$
274,255
|
|
$
269,985
|
|
|
|
|
|
|
|
Interest (Expense), Net (b)
|
|
|
|
|
(13,800)
|
|
(11,989)
|
|
|
(43,758)
|
|
(47,624)
|
|
|
|
|
|
|
|
EBIT (c)
|
|
|
|
|
$
34,227
|
|
$
37,174
|
|
|
$
318,013
|
|
$
317,609
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 (expense),
net includes the combination of interest (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 corporate 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, operating income as determined in accordance with GAAP, since
EBIT omits the impact of interest and taxes in determining
operating performance, which represent
items necessary to our continued operations, given our level of
indebtedness and ongoing tax obligations. 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.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED
STATEMENTS OF INCOME
|
RECONCILIATION OF
"AS REPORTED" TO "ADJUSTED"
|
IN THOUSANDS, EXCEPT
PER SHARE DATA
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
February 28, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AS
REPORTED
|
|
Adjustments
|
|
ADJUSTED
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Sales
|
|
|
$
946,367
|
|
$
-
|
|
$ 946,367
|
|
|
|
|
|
Cost of
sales
|
|
566,629
|
|
-
|
|
566,629
|
|
|
|
|
|
Gross
profit
|
|
|
379,738
|
|
-
|
|
379,738
|
|
|
|
|
|
Selling, general
& administrative expenses
|
|
346,171
|
|
-
|
|
346,171
|
|
|
|
|
|
Interest
expense
|
|
21,493
|
|
|
|
21,493
|
|
|
|
|
|
Investment expense
(income), net
|
|
(7,693)
|
|
|
|
(7,693)
|
|
|
|
|
|
Other expense
(income), net
|
|
(660)
|
|
-
|
|
(660)
|
|
|
|
|
|
Income before income
taxes
|
|
20,427
|
|
-
|
|
20,427
|
|
|
|
|
|
Provision for income
taxes
|
|
99,379
|
|
(106,226)
|
(1)
|
(6,847)
|
|
|
|
|
|
Net income
(loss)
|
|
(78,952)
|
|
106,226
|
|
27,274
|
|
|
|
|
|
Less: Net (loss)
income attributable to noncontrolling interests
|
|
(21,604)
|
|
22,722
|
(1)
|
1,118
|
|
|
|
|
|
Net (loss) income
attributable to RPM International Inc. Stockholders
|
$
(57,348)
|
|
$ 83,504
|
|
$ 26,156
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) earnings
per share attributable to RPM International Inc.
Stockholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
$
(0.44)
|
|
$
0.64
|
|
$
0.20
|
|
|
|
|
|
Diluted
|
|
|
$
(0.44)
|
|
$
0.64
|
|
$
0.20
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Reflects adjustments
related to the recognition of an ASC 740-30 tax liability for the
potential repatriation of foreign earnings and related impact on
NCI Net Income.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
February 28, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AS
REPORTED
|
|
Adjustments
|
|
ADJUSTED
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Sales
|
|
|
$ 3,221,391
|
|
$
-
|
|
$ 3,221,391
|
|
|
|
|
|
Cost of
sales
|
|
1,879,317
|
|
-
|
|
1,879,317
|
|
|
|
|
|
Gross
profit
|
|
|
1,342,074
|
|
-
|
|
1,342,074
|
|
|
|
|
|
Selling, general
& administrative expenses
|
|
1,027,585
|
|
-
|
|
1,027,585
|
|
|
|
|
|
Interest
expense
|
|
60,312
|
|
-
|
|
60,312
|
|
|
|
|
|
Investment (income),
net
|
|
(16,554)
|
|
-
|
|
(16,554)
|
|
|
|
|
|
Other expense
(income), net
|
|
(3,524)
|
|
-
|
|
(3,524)
|
|
|
|
|
|
Income before income
taxes
|
|
274,255
|
|
-
|
|
274,255
|
|
|
|
|
|
Provision for income
taxes
|
|
174,512
|
|
(106,226)
|
(1)
|
68,286
|
|
|
|
|
|
Net
income
|
|
|
99,743
|
|
106,226
|
|
205,969
|
|
|
|
|
|
Less: Net (loss)
income attributable to noncontrolling interests
|
|
(11,754)
|
|
22,722
|
(1)
|
10,968
|
|
|
|
|
|
Net income
attributable to RPM International Inc. Stockholders
|
$
111,497
|
|
$ 83,504
|
|
$ 195,001
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share
attributable to RPM International Inc. Stockholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
$
0.84
|
|
$
0.63
|
|
$
1.47
|
|
|
|
|
|
Diluted
|
|
|
$
0.84
|
|
$
0.60
|
|
$
1.44
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED
BALANCE SHEETS
|
IN
THOUSANDS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
February 28,
2015
|
|
February 28,
2014
|
|
May 31,
2014
|
|
|
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
Current
Assets
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
220,390
|
|
$
216,001
|
|
$
332,868
|
|
|
|
Trade accounts
receivable
|
|
823,126
|
|
735,141
|
|
901,587
|
|
|
|
Allowance for
doubtful accounts
|
|
(25,975)
|
|
(29,988)
|
|
(27,641)
|
|
|
|
Net trade accounts
receivable
|
|
797,151
|
|
705,153
|
|
873,946
|
|
|
|
Inventories
|
|
724,116
|
|
634,583
|
|
613,644
|
|
|
|
Deferred income
taxes
|
|
32,258
|
|
38,310
|
|
22,281
|
|
|
|
Prepaid expenses and
other current assets
|
|
262,522
|
|
157,351
|
|
219,556
|
|
|
|
Total current
assets
|
|
2,036,437
|
|
1,751,398
|
|
2,062,295
|
|
|
|
|
|
|
|
|
|
|
|
|
Property, Plant
and Equipment, at Cost
|
|
1,224,640
|
|
1,162,961
|
|
1,191,676
|
|
|
|
Allowance for
depreciation and amortization
|
|
(656,328)
|
|
(656,169)
|
|
(658,871)
|
|
|
|
Property, plant
and equipment, net
|
|
568,312
|
|
506,792
|
|
532,805
|
|
|
Other
Assets
|
|
|
|
|
|
|
|
|
|
Goodwill
|
|
1,201,112
|
|
1,142,186
|
|
1,147,374
|
|
|
|
Other intangible
assets, net of amortization
|
|
603,398
|
|
464,486
|
|
459,536
|
|
|
|
Deferred income
taxes, non-current
|
|
6,819
|
|
5,449
|
|
7,943
|
|
|
|
Other
|
|
155,125
|
|
168,943
|
|
168,412
|
|
|
|
Total other
assets
|
|
1,966,454
|
|
1,781,064
|
|
1,783,265
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Assets
|
|
$
4,571,203
|
|
$
4,039,254
|
|
$
4,378,365
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
|
|
Current
Liabilities
|
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
379,975
|
|
$
336,692
|
|
$
525,680
|
|
|
|
Current portion of
long-term debt
|
|
151,531
|
|
5,957
|
|
5,662
|
|
|
|
Accrued compensation
and benefits
|
|
117,773
|
|
130,583
|
|
173,846
|
|
|
|
Accrued loss
reserves
|
|
21,808
|
|
21,784
|
|
27,487
|
|
|
|
Other accrued
liabilities
|
|
191,813
|
|
192,327
|
|
204,411
|
|
|
|
Total current
liabilities
|
|
862,900
|
|
687,343
|
|
937,086
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-Term
Liabilities
|
|
|
|
|
|
|
|
|
|
Long-term debt, less
current maturities
|
|
1,716,580
|
|
1,382,478
|
|
1,345,965
|
|
|
|
Other long-term
liabilities
|
|
706,915
|
|
430,697
|
|
466,659
|
|
|
|
Deferred income
taxes
|
|
51,015
|
|
53,821
|
|
50,061
|
|
|
|
Total long-term
liabilities
|
|
2,474,510
|
|
1,866,996
|
|
1,862,685
|
|
|
|
Total
liabilities
|
|
3,337,410
|
|
2,554,339
|
|
2,799,771
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
Equity
|
|
|
|
|
|
|
|
|
|
Preferred stock; none
issued
|
|
|
|
|
|
|
|
|
|
Common stock
(outstanding 133,236; 133,250; 133,273)
|
1,332
|
|
1,332
|
|
1,333
|
|
|
|
Paid-in
capital
|
|
852,559
|
|
794,568
|
|
790,102
|
|
|
|
Treasury stock, at
cost
|
|
(121,312)
|
|
(82,178)
|
|
(85,400)
|
|
|
|
Accumulated other
comprehensive (loss)
|
|
(344,576)
|
|
(165,409)
|
|
(156,882)
|
|
|
|
Retained
earnings
|
|
843,647
|
|
756,891
|
|
833,691
|
|
|
|
Total RPM International
Inc. stockholders' equity
|
1,231,650
|
|
1,305,204
|
|
1,382,844
|
|
|
|
Noncontrolling
interest
|
|
2,143
|
|
179,711
|
|
195,750
|
|
|
|
Total
equity
|
|
1,233,793
|
|
1,484,915
|
|
1,578,594
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities
and Stockholders' Equity
|
|
$
4,571,203
|
|
$
4,039,254
|
|
$
4,378,365
|
|
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
IN
THOUSANDS
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
Nine Months
Ended
|
|
|
|
|
|
February
28,
|
|
February
28,
|
|
|
|
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
|
Cash Flows From
Operating Activities:
|
|
|
|
|
|
Net
income
|
|
|
$
99,743
|
|
$
192,214
|
|
Adjustments to
reconcile net income to net
|
|
|
|
|
|
cash provided by operating activities:
|
|
|
|
|
|
Depreciation
|
|
|
45,870
|
|
43,706
|
|
Amortization
|
|
|
25,961
|
|
23,616
|
|
Reversal of contingent consideration obligations
|
(19,180)
|
|
|
|
Deferred income taxes
|
|
93,274
|
|
(1,422)
|
|
Stock-based compensation expense
|
|
22,443
|
|
15,541
|
|
Other
|
|
|
(1,779)
|
|
(2,143)
|
|
Changes in
assets and liabilities, net of effect
|
|
|
|
|
|
from purchases and sales of businesses:
|
|
|
|
|
|
Decrease in receivables
|
|
72,633
|
|
86,480
|
|
(Increase) in inventory
|
|
(83,257)
|
|
(82,572)
|
|
Increase in prepaid expenses and other
|
|
|
|
|
|
current and long-term assets
|
|
435
|
|
3,885
|
|
(Decrease) in accounts payable
|
|
(147,979)
|
|
(145,393)
|
|
(Decrease) in accrued compensation and benefits
|
(53,593)
|
|
(23,935)
|
|
(Decrease) in accrued loss reserves
|
|
(7,579)
|
|
(5,804)
|
|
(Decrease) in contingent payment
|
|
|
|
(63,014)
|
|
Increase in other accrued liabilities
|
|
18,801
|
|
6,576
|
|
Other
|
|
|
(41,678)
|
|
(21,832)
|
|
Cash Provided By Operating Activities
|
|
24,115
|
|
25,903
|
|
Cash Flows From
Investing Activities:
|
|
|
|
|
|
Capital
expenditures
|
|
|
(47,293)
|
|
(54,277)
|
|
Acquisition of businesses,
net of cash acquired
|
|
(433,885)
|
|
(39,248)
|
|
Purchase of marketable
securities
|
|
(35,033)
|
|
(37,909)
|
|
Proceeds from sales of
marketable securities
|
|
41,308
|
|
45,306
|
|
Other
|
|
|
|
13,126
|
|
6,178
|
|
Cash (Used For) Investing Activities
|
|
(461,777)
|
|
(79,950)
|
|
Cash Flows From
Financing Activities:
|
|
|
|
|
|
Additions to long-term and
short-term debt
|
|
526,585
|
|
262,211
|
|
Reductions of long-term and
short-term debt
|
|
(10,609)
|
|
(231,137)
|
|
Cash dividends
|
|
|
(101,541)
|
|
(93,763)
|
|
Repurchase of
stock
|
|
|
(35,912)
|
|
(9,685)
|
|
Payments of acquisition
related contingent consideration
|
(24,750)
|
|
|
|
Other
|
|
|
|
1,969
|
|
(233)
|
|
Cash Provided By (Used For) Financing Activities
|
355,742
|
|
(72,607)
|
|
|
|
|
|
|
|
|
|
Effect of Exchange
Rate Changes on Cash and
|
|
|
|
|
Cash
Equivalents
|
(30,558)
|
|
(899)
|
|
|
|
|
|
|
|
|
|
Net Change in Cash
and Cash Equivalents
|
(112,478)
|
|
(127,553)
|
|
|
|
|
|
|
|
|
|
Cash and Cash
Equivalents at Beginning of Period
|
332,868
|
|
343,554
|
|
|
|
|
|
|
|
|
|
Cash and Cash
Equivalents at End of Period
|
$
220,390
|
|
$
216,001
|
|
|
|
|
|
|
|
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/rpm-reports-fiscal-2015-third-quarter-results-300062540.html
SOURCE RPM International Inc.