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Exhibit 99.1

RPM Reports Fiscal 2013 Second-Quarter Results

 

   

Second-quarter net sales increase 11% over prior year

 

   

Second-quarter net income improves 17% over prior year, excluding one-time adjustments in both years

 

   

First-half sales up 9%; net income improves 13%, excluding one-time adjustments in both years

 

   

Company affirms full-year guidance for fiscal 2013, on an adjusted basis

MEDINA, OH – January 8, 2013 – RPM International Inc. (NYSE: RPM) today reported a double-digit increase in net sales for its fiscal 2013 second quarter ended November 30, 2012. Net income and diluted earnings per share increased significantly over the prior year, excluding one-time adjustments in both years.

Second-Quarter Results

Net sales increased 11.1% to $1.02 billion from $916.1 million a year ago. On an as reported basis, consolidated EBIT decreased 3.7%, to $89.5 million from $93.0 million in the year-ago second quarter. Second-quarter net income declined 16.5%, to $41.7 million from $49.9 million in the fiscal 2012 second quarter. Earnings per diluted share fell 18.4% to $0.31 from $0.38 a year ago.

The one-time adjustment in the fiscal 2013 second quarter was a non-cash charge of $10.8 million, or $0.09 per diluted share in corporate/other, for the write-down of RPM’s remaining equity investment in Kemrock Industries and Exports Ltd., due to continued deteriorating economic conditions in India, where Kemrock is based, and the resulting impact on Kemrock’s operating performance and stock price. The fiscal 2012 second quarter adjustment was for income recognized in RPM’s industrial segment, which occurred when RPM’s ownership position in Kemrock exceeded 20%, thereby triggering a reportable equity ownership position and resulted in a benefit of $5.2 million, or $0.04 per diluted share, including a $4.6 million cumulative income catch-up.

On an as adjusted basis, excluding the Kemrock impact from both periods, RPM’s fiscal 2013 second-quarter consolidated EBIT improved 14.3% to $100.4 million from $87.8 million a year ago. Second-quarter net income grew 17.4% to $52.5 million from $44.7 million in the fiscal 2012 second quarter, while earnings per diluted share improved 17.6% to $0.40 from $0.34 a year ago.

“Second-quarter operating results, on an adjusted basis, continue to meet our plan with sales, EBIT and net income posting strong double-digit increases,” stated Frank C. Sullivan, chairman and chief executive officer. “We are also seeing benefits from our robust acquisition program, which has added businesses generating approximately $300 million in annual sales during the past 12 months,” he stated.


RPM Reports Fiscal 2013 Second-Quarter Results

January 8, 2013

Page 2 of 5

 

Second-Quarter Segment Sales and Earnings

During the second quarter, on an as reported basis, industrial segment sales grew 7.7% to $691.0 million from $641.5 million in the fiscal 2012 second quarter. Organic sales improved 1.2%, including 1.6% in foreign exchange translation losses, while acquisition growth added 6.5%. Industrial segment EBIT decreased 0.2% to $78.1 million from $78.3 million in the same period a year ago. On an as adjusted basis, which excludes the Kemrock-related impact from both periods, industrial segment EBIT grew 6.9% to $78.1 million from $73.1 million a year ago.

“With the exception of our industrial businesses in Europe and our roofing division, most of our industrial product lines continued to perform well, including construction sealants, weather proofing and admixtures, as well as many of our smaller, niche industrial products, such as edible coatings, fluorescent pigments and disaster restoration solutions,” Sullivan stated.

RPM’s fiscal 2013 second-quarter consumer segment sales increased 18.9% to $326.4 million from $274.6 million a year ago. Organic sales improved 6.2%, with no foreign exchange impact, while acquisition growth added 12.7%. Consumer segment EBIT improved 44.1%, to $38.6 million from $26.8 million a year ago.

“Our consumer product lines are performing to our expectations. They continue to enjoy robust organic sales volume growth due to continued improvement in the U.S. residential housing market and strong demand for higher-end new products, while partially recouping lost margin from the moderation in raw material costs compared to the prior year. Additionally, acquisition activity over the past year, including Synta, Kirker and Australia-based HiChem, contributed to the strong consumer segment sales and earnings growth in the quarter,” stated Sullivan.

Corporate and other expenses during the fiscal 2013 second quarter were higher than the prior year by approximately $4.3 million, on an as adjusted basis, due primarily to higher insurance, professional fees and pension expenses.

Cash Flow and Financial Position

For the first half of fiscal 2013, cash from operations was $127.6 million compared to $110.0 million a year ago. Capital expenditures of $30.8 million compare to depreciation of $27.6 million during the first half of this fiscal year. Total debt at November 30, 2012 increased to $1.42 billion from $1.09 billion at November 30, 2011 and $1.12 billion at May 31, 2012, primarily due to additional borrowings to fund acquisitions. RPM’s net (of cash) debt-to-total capitalization ratio was 48.1%, compared to 40.3% at May 31, 2012, and it continues to be at the low end of the company’s historic norms. At November 30, 2012, liquidity stood at $962 million, including cash of $262 million and $700 million in long-term committed available credit.

“Our solid cash and liquidity position is supporting a growing cash dividend, increased capital investments and a very successful acquisition program,” Sullivan stated.


RPM Reports Fiscal 2013 Second-Quarter Results

January 8, 2013

Page 3 of 5

 

First-Half Sales and Earnings

On an as reported basis, fiscal 2013 first-half net sales improved 8.5% to $2.06 billion from $1.90 billion during the first six months of fiscal 2012. Consolidated EBIT declined 24.6% to $173.1 million from $229.5 million during the first six months of fiscal 2012. Net income declined 40.4% to $75.6 million from $126.7 million in the fiscal 2012 first half. Diluted earnings per share fell 41.2% to $0.57 from $0.97 a year ago.

On an as adjusted basis, first-half sales increased 8.7% to $2.07 billion. First-half EBIT was up 7.1% to $240.2 million from $224.3 million a year ago. First-half net income grew 13.0% to $137.3 million from $121.5 million in the fiscal 2012 first half. Fiscal 2013 first-half earnings per diluted share were up 11.8% to $1.04 from $0.93 a year ago. In addition to the Kemrock adjustments this fiscal year totaling $56.1 million, the first half also included a one-time charge of $11.0 million in the company’s Building Solutions Group associated with a strategic decision to exit certain unprofitable contracts outside North America and to focus on the successful core roofing business in the United States and Canada.

First-Half Segment Sales and Earnings

On an as reported basis, RPM’s industrial segment fiscal 2013 first-half sales improved 6.6%, to $1.39 billion from $1.31 billion in the fiscal 2012 first half. Organic sales decreased 0.7%, including net foreign exchange translation losses of 3.5%, while acquisition growth added 7.3%. Industrial segment EBIT declined 9.2% to $155.0 million from $170.8 million a year ago.

On an as adjusted basis, industrial segment first-half net sales improved 6.8%, to $1.40 billion from $1.31 billion a year ago. Industrial segment EBIT grew 6.2% to $175.8 million from $165.5 million in the 2012 first half.

First-half sales for the consumer segment increased 12.9% to $669.7 million from $593.4 million a year ago. Organic sales increased 5.9% and acquisition growth added an additional 7.0%. Consumer segment EBIT increased 24.4% to $97.4 million from $78.3 million in the first half of fiscal 2012.

Acquisitions

Second-quarter acquisitions included Synta, Inc. and Kirker Enterprises, Inc. Acquired by the Rust-Oleum Group on September 21, 2012, Synta is a $40 million producer and marketer of innovative and unique exterior wood deck and concrete restoration systems sold under the brands of Deck Restore and Concrete Restore at leading home centers and other retail outlets. Acquired by the RPM2 Consumer Group on September 5, 2012, Kirker manufactures nail care enamels, coatings components and related products for the personal care industry and has sales of more than $100 million.


RPM Reports Fiscal 2013 Second-Quarter Results

January 8, 2013

Page 4 of 5

 

Business Outlook

“We reiterate our full-year guidance, which we increased when first-quarter earnings were announced on October 3, 2012. We continue to anticipate sales growth of 8% to 10% and growth in diluted earnings per share of 9% to 12%, which equates to an EPS range of $1.80 to $1.85, on an as adjusted basis. As usual, we expect weaker results for the seasonally difficult fiscal third quarter ending February 28, 2013, but anticipate a strong fiscal 2013 fourth quarter. We see continued strength in top- and bottom-line performance in our consumer segment as the U.S. residential housing market steadily improves. Most of our industrial businesses are also performing well, with the exception of many European operations and the Building Solutions Group roofing division. Current-year acquisitions will offset these weaker sectors and contribute to our results. We also expect to continue the recent trend of recouping gross profit margin during the last half of this fiscal year as well,” Sullivan stated.

Webcast and Conference Call Information

Management will host a conference call to further discuss these results beginning at 10:00 a.m. EST today. The call can be accessed by dialing 800-901-5241 or 617-786-2963 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 noon EST on January 8, 2013 until 11:59 p.m. EST on January 15, 2013. The replay can be accessed by dialing 888-286-8010 or 617-801-6888 for international callers. The access code is 22890306. 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., a holding company, owns subsidiaries that are world leaders in specialty coatings, sealants, building materials and related services serving both industrial and consumer markets. RPM’s industrial products include roofing systems, sealants, corrosion control coatings, flooring coatings and specialty chemicals. Industrial brands include Stonhard, Tremco, illbruck, Carboline, Flowcrete, Universal Sealants and Euco. RPM’s consumer products are used by professionals and do-it-yourselfers for home maintenance and improvement and by hobbyists. Consumer brands include Zinsser, Rust-Oleum, DAP, 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.

# # #


RPM Reports Fiscal 2013 Second-Quarter Results

January 8, 2013

Page 5 of 5

 

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; (j) risks and uncertainties associated with the SPHC bankruptcy proceedings; and (k) 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, 2012, 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)

 

    AS REPORTED             ADJUSTED (a)  
    Three Months Ended
November 30,
    Six Months Ended
November 30,
            Three Months Ended
November 30,
    Six Months Ended
November 30,
 
    2012     2011     2012     2011             2012     2011     2012     2011  

Net Sales

  $ 1,017,426      $ 916,085      $ 2,064,140      $ 1,902,003          $ 1,017,426      $ 916,085      $ 2,067,018      $ 1,902,003   

Cost of sales

    592,425        547,064        1,205,259        1,123,356            592,425        547,064        1,202,718        1,123,356   
 

 

 

   

 

 

   

 

 

   

 

 

       

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

    425,001        369,021        858,881        778,647            425,001        369,021        864,300        778,647   

Selling, general & administrative expenses

    325,761        282,154        636,701        556,097            325,761        282,154        626,113        556,097   

Interest expense

    19,868        17,909        38,298        35,715            19,868        17,909        38,298        35,715   

Investment (income), net

    (1,364     (1,045     (8,338     (1,069         (1,364     (1,045     (8,338     (1,069

Other expense (income), net

    9,694        (6,167     49,116        (6,970         (1,125     (957     (1,976     (1,760
 

 

 

   

 

 

   

 

 

   

 

 

       

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

    71,042        76,170        143,104        194,874            81,861        70,960        210,203        189,664   

Provision for income taxes

    24,955        22,251        59,150        57,615            24,955        22,251        62,918        57,615   
 

 

 

   

 

 

   

 

 

   

 

 

       

 

 

   

 

 

   

 

 

   

 

 

 

Net income

    46,087        53,919        83,954        137,259            56,906        48,709        147,285        132,049   

Less: Net income attributable to noncontrolling interests

    4,419        3,988        8,373        10,517            4,419        3,988        9,979        10,517   
 

 

 

   

 

 

   

 

 

   

 

 

       

 

 

   

 

 

   

 

 

   

 

 

 

Net income attributable to RPM International Inc. Stockholders

  $ 41,668      $ 49,931      $ 75,581      $ 126,742          $ 52,487      $ 44,721      $ 137,306      $ 121,532   
 

 

 

   

 

 

   

 

 

   

 

 

       

 

 

   

 

 

   

 

 

   

 

 

 

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

                   

Basic

  $ 0.32      $ 0.38      $ 0.57      $ 0.97          $ 0.40      $ 0.34      $ 1.04      $ 0.93   
 

 

 

   

 

 

   

 

 

   

 

 

       

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

  $ 0.31      $ 0.38      $ 0.57      $ 0.97          $ 0.40      $ 0.34      $ 1.04      $ 0.93   
 

 

 

   

 

 

   

 

 

   

 

 

       

 

 

   

 

 

   

 

 

   

 

 

 

Average shares of common stock outstanding - basic

    128,885        127,986        128,844        128,048            128,885        127,986        128,844        128,048   
 

 

 

   

 

 

   

 

 

   

 

 

       

 

 

   

 

 

   

 

 

   

 

 

 

Average shares of common stock outstanding - diluted

    129,700        128,432        129,635        128,537            129,700        128,432        129,635        128,537   
 

 

 

   

 

 

   

 

 

   

 

 

       

 

 

   

 

 

   

 

 

   

 

 

 

 

(a) Refer to the attached page for a reconciliation of as reported figures to adjusted figures presented above.

SUPPLEMENTAL SEGMENT INFORMATION

IN THOUSANDS

(Unaudited)

 

    AS REPORTED             ADJUSTED (a)  
    Three Months Ended
November 30,
    Six Months Ended
November 30,
            Three Months Ended
November 30,
    Six Months Ended
November 30,
 
    2012     2011     2012     2011             2012     2011     2012     2011  

Net Sales:

                   

Industrial Segment

  $ 691,076      $ 641,538      $ 1,394,411      $ 1,308,554          $ 691,076      $ 641,538      $ 1,397,289      $ 1,308,554   

Consumer Segment

    326,350        274,547        669,729        593,449            326,350        274,547        669,729        593,449   
 

 

 

   

 

 

   

 

 

   

 

 

       

 

 

   

 

 

   

 

 

   

 

 

 

Total

  $ 1,017,426      $ 916,085      $ 2,064,140      $ 1,902,003          $ 1,017,426      $ 916,085      $ 2,067,018      $ 1,902,003   
 

 

 

   

 

 

   

 

 

   

 

 

       

 

 

   

 

 

   

 

 

   

 

 

 

Income Before Income Taxes (b):

                   

Industrial Segment

                   

Income Before Income Taxes (b)

  $ 75,495      $ 77,224      $ 149,799      $ 168,770          $ 75,495      $ 72,014      $ 170,541      $ 163,560   

Interest (Expense), Net (c)

    (2,626     (1,065     (5,234     (1,982         (2,626     (1,065     (5,234     (1,982
 

 

 

   

 

 

   

 

 

   

 

 

       

 

 

   

 

 

   

 

 

   

 

 

 

EBIT (d)

  $ 78,121      $ 78,289      $ 155,033      $ 170,752          $ 78,121      $ 73,079      $ 175,775      $ 165,542   
 

 

 

   

 

 

   

 

 

   

 

 

       

 

 

   

 

 

   

 

 

   

 

 

 

Consumer Segment

                   

Income Before Income Taxes (b)

  $ 38,561      $ 26,753      $ 97,349      $ 78,265          $ 38,561      $ 26,753      $ 97,349      $ 78,265   

Interest (Expense), Net (c)

    (19     (21     (19     15            (19     (21     (19     15   
 

 

 

   

 

 

   

 

 

   

 

 

       

 

 

   

 

 

   

 

 

   

 

 

 

EBIT (d)

  $ 38,580      $ 26,774      $ 97,368      $ 78,250          $ 38,580      $ 26,774      $ 97,368      $ 78,250   
 

 

 

   

 

 

   

 

 

   

 

 

       

 

 

   

 

 

   

 

 

   

 

 

 

Corporate/Other

                   

(Expense) Before Income Taxes (b)

  $ (43,014   $ (27,807   $ (104,044   $ (52,161       $ (32,195   $ (27,807   $ (57,687   $ (52,161

Interest (Expense), Net (c)

    (15,859     (15,778     (24,707     (32,679         (15,859     (15,778     (24,707     (32,679
 

 

 

   

 

 

   

 

 

   

 

 

       

 

 

   

 

 

   

 

 

   

 

 

 

EBIT (d)

  $ (27,155   $ (12,029   $ (79,337   $ (19,482       $ (16,336   $ (12,029   $ (32,980   $ (19,482
 

 

 

   

 

 

   

 

 

   

 

 

       

 

 

   

 

 

   

 

 

   

 

 

 

Consolidated

                   

Income Before Income Taxes (b)

  $ 71,042      $ 76,170      $ 143,104      $ 194,874          $ 81,861      $ 70,960      $ 210,203      $ 189,664   

Interest (Expense), Net (c)

    (18,504     (16,864     (29,960     (34,646         (18,504     (16,864     (29,960     (34,646
 

 

 

   

 

 

   

 

 

   

 

 

       

 

 

   

 

 

   

 

 

   

 

 

 

EBIT (d)

  $ 89,546      $ 93,034      $ 173,064      $ 229,520          $ 100,365      $ 87,824      $ 240,163      $ 224,310   
 

 

 

   

 

 

   

 

 

   

 

 

       

 

 

   

 

 

   

 

 

   

 

 

 

 

(a) Refer to the attached page for a reconciliation of as reported figures to adjusted figures presented above.
(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 (expense), net includes the combination of interest (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 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 November 30, 2012     Three Months Ended November 30, 2011  
     AS REPORTED     Adjustments     ADJUSTED     AS REPORTED     Adjustments     ADJUSTED  

Net Sales

   $ 1,017,426      $ —        $ 1,017,426      $ 916,085      $ —        $ 916,085   

Cost of sales

     592,425          592,425        547,064          547,064   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

     425,001          425,001        369,021          369,021   

Selling, general & administrative expenses

     325,761          325,761        282,154          282,154   

Interest expense

     19,868          19,868        17,909          17,909   

Investment (income), net

     (1,364       (1,364     (1,045       (1,045

Other expense (income), net

     9,694        (10,819 )(1)      (1,125     (6,167     5,210 (2)      (957
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

     71,042        10,819        81,861        76,170        (5,210     70,960   

Provision for income taxes

     24,955          24,955        22,251          22,251   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income

     46,087        10,819        56,906        53,919        (5,210     48,709   

Less: Net income attributable to noncontrolling interests

     4,419          4,419        3,988          3,988   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income attributable to RPM International Inc. Stockholders

   $ 41,668      $ 10,819      $ 52,487      $ 49,931      $ (5,210   $ 44,721   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Earnings per share attributable to RPM International Inc. Stockholders:

            

Basic

   $ 0.32      $ 0.08      $ 0.40      $ 0.38      $ (0.04   $ 0.34   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

   $ 0.31      $ 0.09      $ 0.40      $ 0.38      $ (0.04   $ 0.34   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(1) Adjustment removes the impact of the write-down at Corporate of RPM’s remaining equity investment in Kemrock of $10,819 to zero in the second quarter of fiscal 2013.
(2) Adjustment removes the income recognized by the industrial segment related to RPM’s equity method investment in Kemrock recognized during the second quarter of fiscal 2012 of $5,210, which included a $4,631 cumulative catch-up.

 

     Six Months Ended November 30, 2012     Six Months Ended November 30, 2011  
     AS REPORTED     Adjustments     ADJUSTED     AS REPORTED     Adjustments     ADJUSTED  

Net Sales

   $ 2,064,140      $ 2,878      $ 2,067,018      $ 1,902,003      $ —        $ 1,902,003   

Cost of sales

     1,205,259        (2,541     1,202,718        1,123,356          1,123,356   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

     858,881        5,419 (3)      864,300        778,647          778,647   

Selling, general & administrative expenses

     636,701        (10,588 )(4)      626,113        556,097          556,097   

Interest expense

     38,298          38,298        35,715          35,715   

Investment (income), net

     (8,338       (8,338     (1,069       (1,069

Other expense (income), net

     49,116        (51,092 )(5)      (1,976     (6,970     5,210 (2)      (1,760
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

     143,104        67,099        210,203        194,874        (5,210     189,664   

Provision for income taxes

     59,150        3,768        62,918        57,615          57,615   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income

     83,954        63,331        147,285        137,259        (5,210     132,049   

Less: Net income attributable to noncontrolling interests

     8,373        1,606        9,979        10,517          10,517   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income attributable to RPM International Inc. Stockholders

   $ 75,581      $ 61,725      $ 137,306      $ 126,742      $ (5,210   $ 121,532   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Earnings per share attributable to RPM International Inc. Stockholders:

            

Basic

   $ 0.57      $ 0.47      $ 1.04      $ 0.97      $ (0.04   $ 0.93   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

   $ 0.57      $ 0.47      $ 1.04      $ 0.97      $ (0.04   $ 0.93   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(3) Represents an adjustment for revised cost estimates in the Roofing Division of RPM’s Building Solutions Group (industrial segment) in conjunction with unprofitable contracts outside of North America of $5,419 during the first quarter of fiscal 2013.
(4) Adjustment includes $5,588 in Roofing exit costs and $5,000 of charges relating to Kemrock investment write-downs at RPM’s Performance Coatings Group (industrial segment) during the first quarter of fiscal 2013.
(5) Adjustments include the write-downs of Kemrock investments, including $35,538 at Corporate and $4,735 at RPM’s Performance Coatings Group (industrial segment) during the first quarter of fiscal 2013 and an additional $10,819 write-down at Corporate in the second quarter of fiscal 2013.


CONSOLIDATED BALANCE SHEETS

IN THOUSANDS

 

    November 30, 2012     November 30, 2011     May 31, 2012  
    (Unaudited)     (Unaudited)        

Assets

     

Current Assets

     

Cash and cash equivalents

  $ 261,940      $ 300,955      $ 315,968   

Trade accounts receivable

    757,123        689,664        772,048   

Allowance for doubtful accounts

    (29,226     (27,839     (26,507
 

 

 

   

 

 

   

 

 

 

Net trade accounts receivable

    727,897        661,825        745,541   

Inventories

    545,678        510,527        489,978   

Deferred income taxes

    21,041        16,950        19,868   

Prepaid expenses and other current assets

    241,984        230,954        239,982   
 

 

 

   

 

 

   

 

 

 

Total current assets

    1,798,540        1,721,211        1,811,337   
 

 

 

   

 

 

   

 

 

 

Property, Plant and Equipment, at Cost

    1,138,474        1,010,673        1,050,965   

Allowance for depreciation and amortization

    (663,784     (628,546     (632,133
 

 

 

   

 

 

   

 

 

 

Property, plant and equipment, net

    474,690        382,127        418,832   
 

 

 

   

 

 

   

 

 

 

Other Assets

     

Goodwill

    1,120,437        865,529        849,346   

Other intangible assets, net of amortization

    478,212        353,652        345,620   

Other

    93,691        109,494        134,885   
 

 

 

   

 

 

   

 

 

 

Total other assets

    1,692,340        1,328,675        1,329,851   
 

 

 

   

 

 

   

 

 

 

Total Assets

  $ 3,965,570      $ 3,432,013      $ 3,560,020   
 

 

 

   

 

 

   

 

 

 

Liabilities and Stockholders’ Equity

     

Current Liabilities

     

Accounts payable

  $ 316,105      $ 324,519      $ 391,467   

Current portion of long-term debt

    2,068        1,950        2,584   

Accrued compensation and benefits

    127,447        124,262        166,178   

Accrued loss reserves

    60,629        52,783        54,652   

Other accrued liabilities

    192,360        149,266        144,911   
 

 

 

   

 

 

   

 

 

 

Total current liabilities

    698,609        652,780        759,792   
 

 

 

   

 

 

   

 

 

 

Long-Term Liabilities

     

Long-term debt, less current maturities

    1,413,101        1,092,454        1,112,952   

Other long-term liabilities

    409,538        225,519        346,967   

Deferred income taxes

    51,780        73,233        26,326   
 

 

 

   

 

 

   

 

 

 

Total long-term liabilities

    1,874,419        1,391,206        1,486,245   
 

 

 

   

 

 

   

 

 

 

Total liabilities

    2,573,028        2,043,986        2,246,037   
 

 

 

   

 

 

   

 

 

 

Stockholders’ Equity

     

Preferred stock; none issued

     

Common stock (outstanding 132,347; 131,233; 131,555)

    1,323        1,312        1,316   

Paid-in capital

    753,693        743,118        742,895   

Treasury stock, at cost

    (70,574     (68,494     (69,480

Accumulated other comprehensive (loss)

    (145,835     (74,999     (177,893

Retained earnings

    704,345        654,157        686,818   
 

 

 

   

 

 

   

 

 

 

Total RPM International Inc. stockholders’ equity

    1,242,952        1,255,094        1,183,656   

Noncontrolling interest

    149,590        132,933        130,327   
 

 

 

   

 

 

   

 

 

 

Total equity

    1,392,542        1,388,027        1,313,983   
 

 

 

   

 

 

   

 

 

 

Total Liabilities and Stockholders’ Equity

  $ 3,965,570      $ 3,432,013      $ 3,560,020   
 

 

 

   

 

 

   

 

 

 


CONSOLIDATED STATEMENTS OF CASH FLOWS

IN THOUSANDS

(Unaudited)

 

     Six Months Ended
November 30,
 
     2012     2011  

Cash Flows From Operating Activities:

    

Net income

   $ 83,954      $ 137,259   

Adjustments to reconcile net income to net cash provided by operating activities:

    

Depreciation

     27,644        25,891   

Amortization

     13,282        11,027   

Impairment loss on investment in Kemrock

     51,092     

Deferred income taxes

     3,973        (1,620

Stock-based compensation expense

     8,135        6,692   

Other

     (685     (5,204

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

    

Decrease in receivables

     51,830        76,864   

(Increase) in inventory

     (33,198     (24,687

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

     14,799        (10,040

(Decrease) in accounts payable

     (89,300     (46,345

(Decrease) in accrued compensation and benefits

     (43,108     (36,662

Increase (decrease) in accrued loss reserves

     5,393        (5,313

Increase (decrease) in other accrued liabilities

     36,663        (14,952

Other

     (2,853     (2,880
  

 

 

   

 

 

 

Cash From Operating Activities

     127,621        110,030   
  

 

 

   

 

 

 

Cash Flows From Investing Activities:

    

Capital expenditures

     (30,849     (18,353

Acquisition of businesses, net of cash acquired

     (396,785     (132,905

Purchase of marketable securities

     (68,442     (39,337

Proceeds from sales of marketable securities

     58,194        36,937   

Other

     4,103        4,072   
  

 

 

   

 

 

 

Cash (Used For) Investing Activities

     (433,779     (149,586
  

 

 

   

 

 

 

Cash Flows From Financing Activities:

    

Additions to long-term and short-term debt

     334,247        7,215   

Reductions of long-term and short-term debt

     (41,269     (22,845

Cash dividends

     (58,054     (55,620

Repurchase of stock

     (1,094     (5,999

Other

     5,650        3,181   
  

 

 

   

 

 

 

Cash Provided By (Used For) Financing Activities

     239,480        (74,068
  

 

 

   

 

 

 

Effect of Exchange Rate Changes on Cash and Cash Equivalents

     12,650        (20,432
  

 

 

   

 

 

 

Net Change in Cash and Cash Equivalents

     (54,028     (134,056

Cash and Cash Equivalents at Beginning of Period

     315,968        435,011   
  

 

 

   

 

 

 

Cash and Cash Equivalents at End of Period

   $ 261,940      $ 300,955