- Successful execution of 2020 MAP to Growth restructuring
program drives strong earnings growth despite weak macroeconomic
environment
- Net income increases 52%, diluted EPS up 58% and adjusted
diluted EPS up 25%
- Adjusted EBIT margin increases 260 basis points
- All four operating segments benefit from restructuring program,
each of which generates strong earnings growth, on an adjusted
basis, during the quarter
- Cash flow increases due to operating improvement
initiatives
- Strong earnings leverage anticipated to continue in second
quarter with adjusted EBIT expected to be up 20% to 24%
RPM International Inc. (NYSE: RPM), a world leader in specialty
coatings, sealants and building materials, today reported financial
results for its fiscal 2020 first quarter ended August 31,
2019.
First-Quarter Consolidated Results
Fiscal 2020 first-quarter net sales were a record $1.47 billion
compared to the $1.46 billion reported a year ago. First-quarter
net income was $106.2 million, up 52.2% over the $69.8 million
reported in the year-ago period, and diluted earnings per share
(EPS) were $0.82, up 57.7% compared to $0.52 in the year-ago
quarter. Income before income taxes (IBT) was up 55.4% to $142.8
million compared to $91.9 million reported in the fiscal 2019 first
quarter. RPM’s consolidated earnings before interest and taxes
(EBIT) were up 45.5% to $165.8 million compared to $113.9 million
reported in the fiscal 2019 first quarter.
The first quarter included restructuring-related expenses and
other items of $26.8 million during fiscal 2020 and $39.8 million
of restructuring-related items in fiscal 2019. Excluding these
charges, RPM’s adjusted EBIT was up 25.3% to $192.6 million
compared to $153.7 million during the year-ago period. In addition,
the company has continued to exclude the impact of all unrealized
net gains and losses from marketable equity securities, as well as
realized net gains and losses on sales of all marketable securities
from adjusted EPS, as their inherent volatility is outside of
management’s control and cannot be predicted with any level of
certainty. These investments resulted in a net after-tax gain of
$2.8 million for the first quarter of fiscal 2020 and were de
minimis during the same quarter last year. Excluding the
restructuring and other charges, as well as investment gains,
adjusted diluted EPS increased 25.0% to $0.95 compared to $0.76 in
fiscal 2019.
“We continued to experience the benefits of the plant
rationalization, manufacturing improvements and center-led
procurement initiatives of our 2020 MAP to Growth operating
improvement plan during the quarter. These actions resulted in
adjusted EBIT and EPS performance that met our projections despite
modest top-line sales growth,” stated RPM chairman and CEO Frank C.
Sullivan. “As we anticipated in July, sales growth was modest as a
result of an extremely wet June that slowed painting and
construction activity in North America and unfavorable foreign
exchange. We were encouraged to see our restructuring program drive
significant EBIT margin improvement across all of our segments. On
a consolidated basis, our adjusted EBIT margin improved 260 basis
points.”
First-Quarter Segment Sales and Earnings
“As we communicated last quarter, we have realigned the business
into four reportable segments from our previous three segments. The
new segments are the Construction Products Group, Performance
Coatings Group, Consumer Group and Specialty Products Group,”
stated Sullivan. “The objectives of this realignment are to
position the business for accelerated growth and to provide our
investors with greater visibility into the business and better
comparability among our peers. Starting with the current quarter of
fiscal 2020, we are reporting our results under this four-segment
structure and are providing comparable fiscal 2019 financials that
have been recast to reflect the effect of this realignment.”
Construction Products Group net sales increased 3.6%, to $536.1
million during the fiscal 2020 first quarter compared to fiscal
2019 first-quarter sales of $517.5 million, reflecting organic
growth of 0.7% and acquisitions contributing an additional 4.4%.
Foreign currency translation reduced sales by 1.5%. Segment IBT was
$82.7 million compared with IBT of $65.0 million a year ago. EBIT
was $84.7 million, up 25.8% compared to EBIT of $67.3 million in
the fiscal 2019 first quarter. The segment incurred $2.2 million in
restructuring-related expenses and other costs during the first
quarter of fiscal 2020 and $3.3 million in restructuring-related
expenses during the same period of fiscal 2019. Excluding these
charges, fiscal 2020 adjusted EBIT increased 23.1% to $86.9 million
from adjusted EBIT of $70.6 million reported during the year-ago
period.
“The recent acquisitions of Nudura and Schul, as well as last
year’s price increases, helped to drive sales growth in the
Construction Products Group, despite unfavorable foreign exchange.
Impacting our North American businesses were labor shortages and
June weather conditions that delayed construction activity. Also
contributing to the top line was our basement waterproofing
solutions business, as well as a recovery in our Brazilian
operation, which generated significant sales growth. The $16.3
million improvement in the segment’s adjusted EBIT was
substantially driven by savings from our restructuring program,
including management delayering, plant rationalization and improved
manufacturing disciplines,” stated Sullivan.
Performance Coatings Group net sales were $297.2 million during
the fiscal 2020 first quarter as compared to sales of $296.4
million reported a year ago, reflecting organic growth of 0.4% and
acquisitions contributing an additional 1.8%. Foreign currency
translation reduced sales by 1.9%. Segment IBT was $28.1 million
compared with IBT of $8.3 million reported a year ago. EBIT was
$28.2 million, compared to EBIT of $8.4 million in the fiscal 2019
first quarter. The segment reported first-quarter
restructuring-related charges of $8.7 million in fiscal 2020 and
$19.8 million in fiscal 2019. Adjusted EBIT, which excludes these
charges, increased 31.0% to $36.9 million during the first quarter
of fiscal 2020 from adjusted EBIT of $28.2 million during the
year-ago period.
“Savings from our 2020 MAP to Growth plan provided significant
earnings leverage in the Performance Coatings Group, driven by a
reduction of our operational footprint and strategic decisions to
exit low-margin businesses. In addition, the segment has benefited
from executing a reorganization and management delayering as it
moves towards a global brand management structure,” stated
Sullivan.
Consumer Group sales were $479.3 million during the first
quarter of fiscal 2020 compared to sales of $477.4 million reported
in the first quarter of fiscal 2019. Organic sales increased 0.1%,
while acquisition growth contributed 1.3%. Foreign currency
translation reduced sales by 1.0%. Consumer Group IBT was $59.2
million compared with IBT of $51.0 million in the prior-year
period. EBIT was up 15.9% to $59.3 million compared to EBIT of
$51.1 million in the fiscal 2019 first quarter. The segment
incurred restructuring-related expenses of $2.4 million during
fiscal 2020 and $0.9 million during fiscal 2019. Excluding these
charges, fiscal 2020 first-quarter adjusted EBIT was $61.7 million,
an increase of 18.6% over adjusted EBIT of $52.0 million reported
during the prior period.
“The Consumer Group’s improvement in EBIT was largely due to a
favorable year-over-year comparison resulting from $10 million in
costs associated with legal settlements during the first quarter of
fiscal 2019. Results in the first quarter were impacted by market
share gains in the prior quarter, which led to higher costs from
outsourcing production to service this increased demand. In light
of market share gains and expectations for continuing growth, we
are investing in new equipment, improving production methods and
leveraging RPM’s internal manufacturing network to produce products
more efficiently and create greater capacity,” stated Sullivan.
The Specialty Products Group reported sales of $160.1 million
during the first quarter of fiscal 2020 as compared to sales of
$168.7 million in the fiscal 2019 first quarter. Organic sales
decreased 4.3% and foreign currency translation reduced sales by
0.8%. Segment IBT was $23.3 million compared with $23.8 million in
the prior-year period. EBIT was $23.3 million compared to EBIT of
$23.7 million in the fiscal 2019 first quarter. The segment
reported first-quarter restructuring-related charges of $5.3
million in fiscal 2020 and $2.7 million in fiscal 2019. Adjusted
EBIT, which excludes restructuring-related expenses, was $28.6
million in the fiscal 2020 first quarter, up 8.5% compared to
adjusted EBIT of $26.4 million in fiscal 2019.
“The Specialty Products Group experienced sluggish demand in the
OEM, manufacturing and international markets it serves, which
impacted the top line. However, on the bottom line, adjusted EBIT
margins improved by 230 basis points and adjusted EBIT increased by
$2.2 million due to good cost discipline, manufacturing yield
improvements and restructuring activities from our 2020 MAP to
Growth program,” Sullivan stated.
Cash Flow and Financial Position
During the fiscal 2020 first quarter, cash generated from
operations was $145.1 million compared to cash used for operations
of $7.1 million a year ago. “The increase in cash from operations
resulted from improved earnings and margin improvement initiatives,
which removed early cash payment discounts, and effectively shifted
approximately $100 million in receipts from the fourth quarter of
fiscal 2019 to the first quarter of fiscal 2020, which we discussed
in our previous earnings release,” stated Sullivan.
Capital expenditures were $36.6 million in the quarter, compared
to $28.3 million in the year-ago period. Total debt at August 31,
2019 of $2.60 billion compares to $2.53 billion at May 31, 2019.
Total liquidity, including cash and long-term available credit, was
$1.20 billion at August 31, 2019, compared to $1.28 billion at May
31, 2019.
“During the quarter we repurchased approximately $100 million of
our common shares. This is in addition to the $200 million we
repurchased during fiscal 2019. Coupled with the $200 million cash
redemption of our convertible notes in November of 2018, we are
halfway to our 2020 MAP to Growth objective to repurchase $1.0
billion of stock by May 31, 2021,” stated Sullivan.
Business Outlook
“For the second quarter of fiscal 2020, we expect sales to be up
2% to 3% with strong leverage to the bottom line for an estimated
20% to 24% adjusted EBIT growth, resulting in adjusted diluted EPS
in the low- to mid-70-cent range.
“Looking ahead to our fiscal 2020 third and fourth quarters, it
is important to note the seasonality in our business. Historically,
our third quarter provides our most modest results each year
because it falls during the winter months of December through
February, when painting and construction activity slow due to cold
and snowy weather. Our fourth-quarter results are generally
stronger as work begins to accelerate on painting and construction
projects.
“Based on our results for the first quarter and our expectations
for the remainder of the year, we are affirming the full-year
fiscal 2020 guidance we provided on July 22, 2019. Revenue growth
is anticipated to be on the low end of our previously disclosed
range of 2.5% to 4%. Despite the tightening of our revenue growth
assumption, we expect to leverage the positive momentum of the 2020
MAP to Growth operating improvement plan to our bottom-line
results. Therefore, we are maintaining our projected adjusted EBIT
growth in the 20% to 24% range, as previously reported in July. We
expect this to result in adjusted diluted EPS between $3.30 and
$3.42 for fiscal 2020,” 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 800-708-4540 or 847-619-6397 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 October 2, 2019
until 11:59 p.m. EDT on October 9, 2019. The replay can be accessed
by dialing 888-843-7419 or 630-652-3042 for international callers.
The access code is 48992509. 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. The company operates across four reportable segments:
consumer, construction products, performance coatings and specialty
products. RPM has a diverse portfolio with hundreds of
market-leading brands, including Rust-Oleum, DAP, Zinsser,
Varathane, Day-Glo, Legend Brands, Stonhard, Carboline, Tremco and
Dryvit. From homes and workplaces, to infrastructure and precious
landmarks, RPM’s brands are trusted by consumers and professionals
alike to help build a better world. The company employs
approximately 15,000 individuals worldwide. Visit www.rpminc.com to
learn more.
For more information, contact Russell L. Gordon, vice president
and chief financial officer, at 330-273-5090 or
rgordon@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, adjusted EBIT and
adjusted earnings per share, which are all non-GAAP financial
measures. EBIT is defined as earnings (loss) before interest and
taxes, with adjusted EBIT and adjusted earnings per share provided
for the purpose of adjusting for one-off items impacting revenues
and/or expenses that are not considered by management to be
indicative of ongoing operations. 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 and investment income
or expense in determining operating performance, which represent
items necessary to our continued operations, given our level of
indebtedness. Nonetheless, EBIT is a key measure expected by and
useful to our fixed income investors, rating agencies and the
banking community all of whom believe, and we concur, that this
measure is critical to the capital markets' analysis of our
segments' core operating performance. We also evaluate EBIT because
it is clear that movements in EBIT impact our ability to attract
financing. Our underwriters and bankers consistently require
inclusion of this measure in offering memoranda in conjunction with
any debt underwriting or bank financing. EBIT may not be indicative
of our historical operating results, nor is it meant to be
predictive of potential future results. See the financial statement
section of this earnings release for a reconciliation of EBIT and
adjusted EBIT to income before income taxes, and adjusted earnings
per share to earnings per share. We have not provided a
reconciliation of our fiscal 2020 adjusted EBIT and adjusted
earnings per share guidance, because material terms that impact
such measures are not in our control and/or cannot be reasonably
predicted, and therefore a reconciliation of such measures is not
available without unreasonable effort.
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) the timing of and the realization of
anticipated cost savings from restructuring initiatives and the
ability to identify additional cost savings opportunities; (j)
risks related to the adequacy of our contingent liability reserves;
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, 2019, 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
August 31,
2019
2018
Net Sales
$
1,472,764
$
1,459,989
Cost of sales
898,010
910,636
Gross profit
574,754
549,353
Selling, general & administrative expenses
400,566
415,053
Restructuring charges
6,622
20,076
Interest expense
28,317
24,406
Investment (income), net
(5,385
)
(2,433
)
Other expense, net
1,785
313
Income before income taxes
142,849
91,938
Provision for income taxes
36,353
21,752
Net income
106,496
70,186
Less: Net income attributable to noncontrolling interests
308
422
Net income attributable to RPM International Inc.
Stockholders
$
106,188
$
69,764
Earnings per share of common stock attributable to
RPM International Inc. Stockholders: Basic
$
0.82
$
0.52
Diluted
$
0.82
$
0.52
Average shares of common stock outstanding - basic
128,882
131,861
Average shares of common stock outstanding - diluted
129,504
136,430
SUPPLEMENTAL SEGMENT INFORMATION IN THOUSANDS
(Unaudited)
Three Months Ended August 31,
2019
2018
Net Sales: Construction Products Segment
$
536,105
$
517,492
Performance Coatings Segment
297,241
296,419
Consumer Products Segment
479,330
477,363
Specialty Products Segment
160,088
168,715
Total
$
1,472,764
$
1,459,989
Income Before Income Taxes: Construction Products
Segment Income Before Income Taxes (a)
$
82,680
$
65,044
Interest (Expense), Net (b)
(2,027
)
(2,290
)
EBIT (c)
84,707
67,334
2020 MAP to Growth related initiatives (d)
1,652
3,257
Acquisition-related costs (e)
548
Adjusted EBIT
$
86,907
$
70,591
Performance Coatings Segment Income Before Income Taxes (a)
$
28,057
$
8,325
Interest (Expense), Net (b)
(129
)
(118
)
EBIT (c)
28,186
8,443
2020 MAP to Growth related initiatives (d)
8,737
19,751
Adjusted EBIT
$
36,923
$
28,194
Consumer Segment Income Before Income Taxes (a)
$
59,158
$
50,969
Interest (Expense), Net (b)
(105
)
(174
)
EBIT (c)
59,263
51,143
2020 MAP to Growth related initiatives (d)
2,433
864
Adjusted EBIT
$
61,696
$
52,007
Specialty Segment Income Before Income Taxes (a)
$
23,327
$
23,816
Interest Income, Net (b)
26
93
EBIT (c)
23,301
23,723
2020 MAP to Growth related initiatives (d)
5,328
2,663
Adjusted EBIT
$
28,629
$
26,386
Corporate/Other (Expense) Before Income Taxes (a)
$
(50,373
)
$
(56,216
)
Interest (Expense), Net (b)
(20,697
)
(19,484
)
EBIT (c)
(29,676
)
(36,732
)
2020 MAP to Growth related initiatives (d)
8,106
13,296
Adjusted EBIT
$
(21,570
)
$
(23,436
)
Consolidated Income Before Income Taxes (a)
$
142,849
$
91,938
Interest (Expense)
(28,317
)
(24,406
)
Investment Income, Net
5,385
2,433
EBIT (c)
165,781
113,911
2020 MAP to Growth related initiatives (d)
26,256
39,831
Acquisition-related costs (e)
548
Adjusted EBIT
$
192,585
$
153,742
(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 and Adjusted EBIT.
(b)
Interest income (expense), net
includes the combination of interest income (expense) and
investment income (expense), net.
(c)
EBIT is defined as earnings
(loss) before interest and taxes, with Adjusted EBIT provided for
the purpose of adjusting for items impacting earnings that are not
considered by management to be indicative of ongoing operations. 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 and investment income or expense in determining operating
performance, which represent items necessary to our continued
operations, given our level of indebtedness. Nonetheless, EBIT is a
key measure expected by and useful to our fixed income investors,
rating agencies and the banking community all of whom believe, and
we concur, that this measure is critical to the capital markets'
analysis of our segments' core operating performance. We also
evaluate EBIT because it is clear that movements in EBIT impact our
ability to attract financing. Our underwriters and bankers
consistently require inclusion of this measure in offering
memoranda in conjunction with any debt underwriting or bank
financing. EBIT may not be indicative of our historical operating
results, nor is it meant to be predictive of potential future
results.
(d)
Reflects restructuring and other
charges, all of which have been incurred in relation to our 2020
Margin Acceleration Plan initiatives, as follows. During fiscal 2020: headcount reductions, closures
of facilities and related costs, all of which have been recorded in
restructuring expense; inventory-related charges recorded in cost
of goods sold that reflect product line and SKU rationalization at
our Consumer Segment, as well as inventory write-offs in connection
with restructuring activities at our Construction Products and
Performance Coatings Segments; increases in our allowance for
doubtful accounts deemed uncollectible as a result of a change in
market and leadership strategy, and implementation costs associated
with our ERP consolidation plan, professional fees incurred in
connection with our 2020 MAP to Growth, all of which have been
recorded in SG&A. During fiscal
2019: headcount reductions, closures of facilities, and
accelerated vesting of equity awards in connection with key
executives, all of which are included in restructuring expense;
inventory-related charges reflecting a true-up of fiscal 2018
inventory write-offs at our Consumer Segment during the first
quarter of fiscal 2019, inventory write-offs and disposals at our
Construction Products and Performance Coatings Segments, and
accelerated depreciation expense related to the shortened useful
lives of facilities being prepared for closure; increases in our
allowance for doubtful accounts deemed uncollectible as a result of
a change in market and leadership strategy, implementation costs
associated with our ERP consolidation plan, and professional fees
incurred in connection with our restructuring plan implementation
as well as the negotiation of a cooperation agreement, all of which
have been recorded in SG&A.
(e)
Acquisition costs reflect amounts
included in gross profit for inventory disposals and step-ups
related to fiscal 2020 acquisitions.
SUPPLEMENTAL INFORMATION RECONCILIATION OF
"REPORTED" TO "ADJUSTED" AMOUNTS (Unaudited)
Three
Months Ended August 31,
2019
2018
Reconciliation of Reported Earnings
per Diluted Share to Adjusted Earnings per Diluted Share (All
amounts presented after-tax): Reported Earnings per
Diluted Share
$
0.82
$
0.52
2020 MAP to Growth related initiatives (d)
0.15
0.24
Investment returns (f)
(0.02
)
Adjusted Earnings per Diluted Share (g)
$
0.95
$
0.76
(d) Reflects restructuring and other charges, all of which have
been incurred in relation to our 2020 Margin Acceleration Plan
initiatives, as follows. During fiscal 2020: headcount reductions,
closures of facilities and related costs, all of which have been
recorded in restructuring expense; inventory-related charges
recorded in cost of goods sold that reflect product line and SKU
rationalization at our Consumer Segment, as well as inventory
write-offs in connection with restructuring activities at our
Construction Products and Performance Coatings Segments; increases
in our allowance for doubtful accounts deemed uncollectible as a
result of a change in market and leadership strategy, and
implementation costs associated with our ERP consolidation plan,
professional fees incurred in connection with our 2020 MAP to
Growth, all of which have been recorded in SG&A. During fiscal
2019: headcount reductions, closures of facilities, and accelerated
vesting of equity awards in connection with key executives, all of
which are included in restructuring expense; inventory-related
charges reflecting a true-up of fiscal 2018 inventory write-offs at
our Consumer Segment during the first quarter of fiscal 2019,
inventory write-offs and disposals at our Construction Products and
Performance Coatings Segments, and accelerated depreciation expense
related to the shortened useful lives of facilities being prepared
for closure; increases in our allowance for doubtful accounts
deemed uncollectible as a result of a change in market and
leadership strategy, implementation costs associated with our ERP
consolidation plan, and professional fees incurred in connection
with our restructuring plan implementation as well as the
negotiation of a cooperation agreement, all of which have been
recorded in SG&A. (f) Investment returns include realized net
gains and losses on sales of investments and unrealized net gains
and losses on equity securities, which are adjusted due to their
inherent volatility. Management does not consider these gains and
losses, which cannot be predicted with any level of certainty, to
be reflective of the company's core business operations. (g)
Adjusted EPS is provided for the purpose of adjusting diluted
earnings per share for items impacting earnings that are not
considered by management to be indicative of ongoing operations.
CONSOLIDATED BALANCE SHEETS IN THOUSANDS (Unaudited)
August 31, 2019 August 31, 2018 May 31, 2019
Assets Current Assets Cash and cash
equivalents
$
212,091
$
202,183
$
223,168
Trade accounts receivable
1,166,444
1,126,184
1,287,098
Allowance for doubtful accounts
(57,185)
(55,558)
(54,748)
Net trade accounts receivable
1,109,259
1,070,626
1,232,350
Inventories
860,518
853,573
841,873
Prepaid expenses and other current assets
234,401
306,333
220,701
Total current assets
2,416,269
2,432,715
2,518,092
Property, Plant and Equipment, at Cost
1,674,713
1,589,312
1,662,859
Allowance for depreciation
(861,697
)
(812,253
)
(843,648
)
Property, plant and equipment, net
813,016
777,059
819,211
Other Assets Goodwill
1,249,818
1,187,705
1,245,762
Other intangible assets, net of amortization
601,747
585,056
601,082
Operating lease right-of-use assets
257,628
-
-
Deferred income taxes, non-current
36,335
21,953
34,908
Other
221,612
218,904
222,300
Total other assets
2,367,140
2,013,618
2,104,052
Total Assets
$
5,596,425
$
5,223,392
$
5,441,355
Liabilities and Stockholders' Equity Current
Liabilities Accounts payable
$
477,050
$
500,913
$
556,696
Current portion of long-term debt
582,611
3,376
552,446
Accrued compensation and benefits
119,349
119,037
193,345
Accrued losses
20,142
30,295
19,899
Other accrued liabilities
297,420
224,515
217,019
Total current liabilities
1,496,572
878,136
1,539,405
Long-Term Liabilities Long-term debt, less current
maturities
2,018,185
2,267,159
1,973,462
Operating lease liabilities
215,131
-
-
Other long-term liabilities
407,285
360,074
405,040
Deferred income taxes
113,227
104,644
114,843
Total long-term liabilities
2,753,828
2,731,877
2,493,345
Total liabilities
4,250,400
3,610,013
4,032,750
Commitments and contingencies
Stockholders' Equity Preferred
stock; none issued Common stock (outstanding 129,670; 133,408;
130,995)
1,297
1,334
1,310
Paid-in capital
1,001,081
992,086
994,508
Treasury stock, at cost
(543,650
)
(256,899
)
(437,290
)
Accumulated other comprehensive (loss)
(601,253
)
(493,026
)
(577,628
)
Retained earnings
1,485,917
1,366,952
1,425,052
Total RPM International Inc. stockholders' equity
1,343,392
1,610,447
1,405,952
Noncontrolling interest
2,633
2,932
2,653
Total equity
1,346,025
1,613,379
1,408,605
Total Liabilities and Stockholders' Equity
$
5,596,425
$
5,223,392
$
5,441,355
CONSOLIDATED STATEMENTS OF CASH FLOWS IN THOUSANDS
(Unaudited)
Three Months Ended August 31,
2019
2018
Cash Flows From Operating Activities: Net income
$
106,496
$
70,186
Adjustments to reconcile net income to net cash provided by (used
for) operating activities: Depreciation and amortization
35,839
35,540
Restructuring charges, net of payments
611
7,084
Deferred income taxes
(4,580
)
(561
)
Stock-based compensation expense
6,560
6,668
Other non-cash interest expense
775
Realized/unrealized (gain) loss on sales of marketable securities
(2,854
)
6
Other
250
992
Changes in assets and liabilities, net of effect from purchases and
sales of businesses: Decrease in receivables
116,349
32,389
(Increase) in inventory
(22,640
)
(27,207
)
(Increase) in prepaid expenses and other current and long-term
assets
(5,801
)
(18,282
)
(Decrease) in accounts payable
(63,831
)
(88,271
)
(Decrease) in accrued compensation and benefits
(73,180
)
(56,747
)
Increase in accrued losses
404
8,415
Increase in other accrued liabilities
50,588
20,857
Other
928
1,027
Cash Provided By (Used For) Operating Activities
145,139
(7,129
)
Cash Flows From Investing Activities: Capital expenditures
(36,602
)
(28,295
)
Acquisition of businesses, net of cash acquired
(30,598
)
(26,366
)
Purchase of marketable securities
(9,996
)
(12,695
)
Proceeds from sales of marketable securities
2,837
9,758
Other
(97
)
(2,881
)
Cash (Used For) Investing Activities
(74,456
)
(60,479
)
Cash Flows From Financing Activities: Additions to long-term
and short-term debt
75,718
120,702
Reductions of long-term and short-term debt
(874
)
(21,952
)
Cash dividends
(45,323
)
(42,715
)
Repurchases of common stock
(100,000
)
(6,994
)
Shares of common stock returned for taxes
(6,127
)
(13,587
)
Payments of acquisition-related contingent consideration
(131
)
(3,456
)
Other
(295
)
(319
)
Cash (Used For) Provided By Financing Activities
(77,032
)
31,679
Effect of Exchange Rate Changes on Cash and Cash
Equivalents
(4,728
)
(6,310
)
Net Change in Cash and Cash Equivalents
(11,077
)
(42,239
)
Cash and Cash Equivalents at Beginning of Period
223,168
244,422
Cash and Cash Equivalents at End of Period
$
212,091
$
202,183
View source
version on businesswire.com: https://www.businesswire.com/news/home/20191002005269/en/
Russell L. Gordon, vice president and chief financial officer
330-273-5090 or rgordon@rpminc.com
RPM (NYSE:RPM)
Historical Stock Chart
From Jun 2024 to Jul 2024
RPM (NYSE:RPM)
Historical Stock Chart
From Jul 2023 to Jul 2024