RPM International (RPM) 8-K RPM Reports Record Net Income and Cash Flow for Fiscal 2010 Second Quarter

Exhibit 99.1

RPM Reports Record Net Income and Cash Flow for Fiscal 2010 Second Quarter

• Operating leverage drives strong operating profit across both consumer and industrial segments

• Liquidity and cash flow at record levels

• Fiscal 2010 earnings guidance increased

MEDINA, OH — January 6, 2010 — RPM International Inc. (NYSE: RPM) today reported record net income and cash flow, despite a small decline in net sales, for its fiscal 2010 second quarter ended November 30, 2009.

Second-Quarter Results

RPM’s net sales of $858.7 million were down 3.5% from the $890.0 million reported in the fiscal 2009 second quarter. Organic sales declined 6.5%, offset in part by 2.2% in net foreign exchange gains. Net acquisition growth of 0.8% also offset part of the organic decline.

Net income for the quarter grew 34.0%, to a record $55.9 million from $41.7 million a year ago, while diluted earnings per share improved 30.3%, to $0.43 from $0.33.

“Our net income in the second quarter continued to benefit from cost reduction programs initiated in the prior fiscal year. Modest consumer segment sales growth continued, while sales in our larger industrial segment remained under pressure in line with our previously stated expectations,” stated Frank C. Sullivan, chairman and chief executive officer.

Consolidated earnings before interest and taxes (EBIT) increased 19.4% to a record $92.9 million from the $77.7 million reported in the fiscal 2009 second quarter. “In addition to our own cost reduction efforts, RPM benefited from more stable raw material costs compared to year-ago levels,” stated Sullivan.

Second-Quarter Segment Sales and Earnings

Sales in RPM’s industrial segment, representing 71.4% of total sales, declined 6.0% to $613.5 million from $652.7 million in the year-ago second quarter. Organic sales declined 9.5%, offset in part by acquisition growth of 1.0% and net foreign exchange gains of 2.5%. Industrial segment EBIT for the second quarter improved 4.5% to $74.2 million, compared to EBIT of $71.0 million a year ago.

“Industrial sales in international markets, as well as certain product lines, including roofing and polymer flooring, held up reasonably well despite the troubled global economy. Other industrial product lines, particularly those that serve domestic commercial construction markets, struggled as tight credit markets continued to dampen both new commercial construction and major renovation projects,” Sullivan stated.

RPM Reports Record Net Income and Cash Flow for Fiscal 2010 Second Quarter
January 6, 2010
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Sales in RPM’s consumer segment, which accounted for 28.6% of total sales, grew 3.3% to $245.2 million from $237.2 million a year ago. All of the increase was organic, including 1.5% in net foreign exchange gains. Consumer segment EBIT improved to $31.8 million from $15.6 million a year ago.

“Our consumer businesses are benefiting from gains in market share during the past fiscal year, new product introductions and strength in our small project, maintenance and repair, and redecoration products, despite consumers being cautious about spending on major home renovation projects. Increasing sales, coupled with cost reduction efforts, produced outstanding EBIT growth for the consumer segment,” Sullivan stated.

Cash Flow and Financial Position

For the first half of fiscal 2010, cash from operations was $184.7 million, a 77.5% increase over the $104.0 million in the first half of fiscal 2009. Capital expenditures of $8.3 million compare to depreciation of $31.1 million over the same period in fiscal 2010. Total debt at the end of the first half was $906.2 million, compared to $930.8 million at the end of fiscal 2009 and $962.6 million at the end of the second quarter of fiscal 2009. RPM’s net (of cash) debt-to-total capitalization ratio was 29.7%, compared to 37.2% at May 31, 2009, and both remain at the low end of the company’s historic norms. “We are continuing to build on our existing strong cash and liquidity position in anticipation of a return to our normal level of acquisition growth. At November 30, 2009, liquidity, including cash and long-term committed available credit, stood at a record $853.7 million,” Sullivan stated.

On October 6, 2009, RPM announced the sale of $300 million aggregate principal amount of 6.125% notes due October 15, 2019. Proceeds were used to redeem $164 million in principal amount of RPM unsecured senior notes due October 15, 2009, and to pay down $120 million in short-term borrowings under the company’s accounts receivable securitization program, with the remainder used for general corporate purposes.

During the quarter, RPM paid $18.9 million in pre-tax asbestos costs, compared to $16.4 million in the year-ago period. RPM’s total asbestos reserve balance stood at $452.8 million at November 30, 2009.

First-Half Sales and Earnings

Net sales for the first half of fiscal 2010 decreased 5.4% to $1.77 billion from $1.88 billion a year ago. Net income improved 15.9% to a record $128.9 million from $111.2 million in the fiscal 2009 first half.

Diluted earnings per share for the first half of fiscal 2010 increased 16.3%, to a record $1.00 from $0.86 a year ago. Record first-half EBIT was $213.5 million, up 13.2% over the $188.6 million reported a year ago.

RPM’s industrial segment sales declined 10.2% in the fiscal 2010 first half, to $1.24 billion from $1.38 billion a year ago. The organic sales decline was 11.1%, including net foreign exchange losses of 1.1%, partially offset by acquisition growth of 0.9%. Industrial segment EBIT declined 3.6% to $159.1 million from $165.1 million in the fiscal 2009 first half.

RPM Reports Record Net Income and Cash Flow for Fiscal 2010 Second Quarter
January 6, 2010
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First-half sales for the consumer segment grew 7.9% to $537.1 million from $497.6 million reported in the first half of fiscal 2009. Organic sales improved by 7.9%, including net foreign exchange losses of 0.7%. Consumer segment EBIT was up 73.1%, to $82.1 million from $47.4 million a year ago.

Business Outlook

“We are encouraged by the year-to-date improvements in our gross margin that have resulted from productivity gains, operating efficiencies and cost reduction actions undertaken during our last fiscal year. Additionally, while still materially above historical norms, raw material costs have declined from last year’s extraordinary levels,” stated Sullivan. “We continue to anticipate a loss for the seasonally weak fiscal third quarter ending February 28, 2010, but operating results should be significantly improved from the same period last year,” he stated. “As a result, we are revising our fiscal 2010 guidance upward to a range of $1.30 to $1.45 compared to the adjusted $1.05 per diluted share earned last year,” 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 866-713-8564 or 617-597-5312 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 1:00 p.m. EST on January 6, 2010 until 11:59 p.m. EST on January 13, 2010. The replay can be accessed by dialing 888-286-8010 or 617-801-6888 for international callers. The access code is 87918256. 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, Day-Glo, Euco and Dryvit. RPM’s consumer products are used by professionals and do-it-yourselfers for home maintenance and improvement, boat repair and maintenance, and by hobbyists. Consumer brands include Zinsser, Rust-Oleum, DAP, Varathane and Testors. Additional details are available atwww.rpminc.com.

For more information, contact P. Kelly Tompkins, executive vice president and chief financial officer, at 330-273-5090 or ktompkins@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

RPM Reports Record Net Income and Cash Flow for Fiscal 2010 Second Quarter
January 6, 2010
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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, including for asbestos-related claims and warranty obligations; 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, 2009, as the same may be updated from time to time. We do not undertake any obligation to publicly update or revise any forward-looking statements to reflect future events, information or circumstances that arise after the date of this release.

CONSOLIDATED STATEMENTS OF INCOME
IN THOUSANDS, EXCEPT PER SHARE DATA
(UNAUDITED)

	Three Months Ended					Six Months Ended
	November 30,					November 30,
	2009			2008		2009			2008
Net Sales	$	858,658		$	889,965	$	1,774,611		$	1,875,430
Cost of sales		495,447			533,239		1,017,570			1,115,115
Gross profit		363,211			356,726		757,041			760,315
Selling, general & administrative expenses		270,352			278,982		543,551			571,672
Interest expense		14,672			15,203		27,469			29,959
Investment expense (income), net		(2,057	)		2,191		(3,151	)		(1,979	)
Income before income taxes		80,244			60,350		189,172			160,663
Provision for income taxes		24,351			18,624		60,254			49,420
Net Income	$	55,893		$	41,726	$	128,918		$	111,243
Basic earnings per share of common stock (a)	$	0.44		$	0.33	$	1.00		$	0.87
Diluted earnings per share of common stock (a)	$	0.43		$	0.33	$	1.00		$	0.86
Average shares of common stock outstanding — basic (a)		127,373			127,090		126,868			126,158
Average shares of common stock outstanding — diluted (a)		129,164			127,601		127,378			128,671

(a) The above information reflects our June 1, 2009 adoption of a new accounting pronouncement which requires all unvested restricted stock awards that pay dividends to be considered participating securities for the purpose of computing earnings per share.

SUPPLEMENTAL SEGMENT INFORMATION
IN THOUSANDS
(UNAUDITED)

	Three Months Ended						Six Months Ended
	November 30,						November 30,
	2009			2008			2009			2008
Net Sales (e):
Industrial Segment	$	613,495		$	652,735		$	1,237,523		$	1,377,810
Consumer Segment		245,163			237,230			537,088			497,620
Total	$	858,658		$	889,965		$	1,774,611		$	1,875,430
Gross Profit (e):
Industrial Segment	$	266,576		$	276,348		$	542,951		$	580,332
Consumer Segment		96,635			80,378			214,090			179,983
Total	$	363,211		$	356,726		$	757,041		$	760,315
Income Before Income Taxes (b,e):
Industrial Segment
Income Before Income Taxes (b)	$	73,921		$	70,996		$	158,747		$	165,073
Interest (Expense), Net (c)		(258	)		(7	)		(368	)		(36	)
EBIT (d)	$	74,179		$	71,003		$	159,115		$	165,109
Consumer Segment
Income Before Income Taxes (b)	$	31,828		$	14,515		$	82,076		$	44,939
Interest (Expense), Net (c)		(3	)		(1,105	)		(9	)		(2,477	)
EBIT (d)	$	31,831		$	15,620		$	82,085		$	47,416
Corporate/Other
(Expense) Before Income Taxes (b)	$	(25,505	)	$	(25,161	)	$	(51,651	)	$	(49,349	)
Interest (Expense), Net (c)		(12,354	)		(16,282	)		(23,941	)		(25,467	)
EBIT (d)	$	(13,151	)	$	(8,879	)	$	(27,710	)	$	(23,882	)
Consolidated
Income Before Income Taxes (b)	$	80,244		$	60,350		$	189,172		$	160,663
Interest (Expense), Net (c)		(12,615	)		(17,394	)		(24,318	)		(27,980	)
EBIT (d)	$	92,859		$	77,744		$	213,490		$	188,643

(b)	The presentation includes a reconciliation of Income (Loss) Before Income Taxes, a measure defined by Generally Accepted Accounting Principles (GAAP) in the United States, 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. We believe EBIT is useful to investors for this purpose as well, using EBIT 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.
(e)	The presentation reflects a change in the composition of our reportable segments, which occurred during the second fiscal quarter of 2010. Some business units formerly accounted for in our Consumer reportable segment are now included in our Industrial reportable segment based on the current nature of their business, customers and markets served.

CONSOLIDATED BALANCE SHEETS
IN THOUSANDS

	November 30, 2009			November 30, 2008			May 31, 2009
	(Unaudited)			(Unaudited)
Assets
Current Assets
Cash and cash equivalents	$	363,928		$	205,289		$	253,387
Trade accounts receivable		608,588			627,653			661,593
Allowance for doubtful accounts		(25,299	)		(20,464	)		(22,934	)
Net trade accounts receivable		583,289			607,189			638,659
Inventories		434,230			493,241			406,175
Deferred income taxes		44,489			36,974			44,540
Prepaid expenses and other current assets		204,388			194,596			210,155
Total current assets		1,630,324			1,537,289			1,552,916
Property, Plant and Equipment, at Cost		1,070,943			1,007,208			1,056,555
Allowance for depreciation and amortization		(614,989	)		(552,053	)		(586,452	)
Property, plant and equipment, net		455,954			455,155			470,103
Other Assets
Goodwill		871,393			844,980			856,166
Other intangible assets, net of amortization		359,762			348,770			358,097
Deferred income taxes, non-current		71,175			98,172			92,500
Other		89,931			68,836			80,139
Total other assets		1,392,261			1,360,758			1,386,902
Total Assets	$	3,478,539		$	3,353,202		$	3,409,921
Liabilities and Stockholders’ Equity
Current Liabilities
Accounts payable	$	249,432		$	282,429		$	294,814
Current portion of long-term debt		2,940			171,247			168,547
Accrued compensation and benefits		115,749			102,716			124,138
Accrued loss reserves		75,250			73,673			77,393
Asbestos-related liabilities		75,000			65,000			65,000
Other accrued liabilities		145,682			126,106			119,270
Total current liabilities		664,053			821,171			849,162
Long-Term Liabilities
Long-term debt, less current maturities		903,285			791,364			762,295
Asbestos-related liabilities		377,847			462,309			425,328
Other long-term liabilities		225,591			136,537			204,021
Deferred income taxes		25,920			19,729			23,815
Total long-term liabilities		1,532,643			1,409,939			1,415,459
Total liabilities		2,196,696			2,231,110			2,264,621
Stockholders’ Equity
Preferred stock; none issued
Common stock (outstanding 129,490; 128,381; 128,501)		1,295			1,284			1,285
Paid-in capital		795,080			790,933			796,441
Treasury stock, at cost		(40,237	)		(50,279	)		(50,453	)
Accumulated other comprehensive income (loss)		21,069			(92,933	)		(29,928	)
Retained earnings		504,636			473,087			427,955
Total stockholders’ equity		1,281,843			1,122,092			1,145,300
Total Liabilities and Stockholders’ Equity	$	3,478,539		$	3,353,202		$	3,409,921

CONSOLIDATED STATEMENTS OF CASH FLOWS
IN THOUSANDS
(UNAUDITED)

	Six Months Ended
	November 30,
	2009			2008
Cash Flows From Operating Activities:
Net income	$	128,918		$	111,243
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		31,107			32,175
Amortization		11,128			11,254
Other-than-temporary impairments on marketable securities		146			3,370
Provision for asbestos-related liabilities
Deferred income taxes		18,924			5,034
Other		4,149			3,935
Changes in assets and liabilities, net of effect from purchases and sales of businesses:
Decrease in receivables		59,658			212,078
(Increase) in inventory		(26,394	)		(15,607	)
(Increase) decrease in prepaid expenses and other current and long-term assets		(723	)		18,138
(Decrease) in accounts payable		(47,476	)		(130,500	)
(Decrease) in accrued compensation and benefits		(8,697	)		(48,776	)
(Decrease) increase in accrued loss reserves		(2,141	)		1,693
Increase (decrease) in other accrued liabilities		47,092			(37,428	)
Payments made for asbestos-related claims		(37,481	)		(32,436	)
Other		6,484			(30,125	)
Cash From Operating Activities		184,694			104,048
Cash Flows From Investing Activities:
Capital expenditures		(8,287	)		(24,887	)
Acquisition of businesses, net of cash acquired		(9,042	)		(3,733	)
Purchase of marketable securities		(38,809	)		(69,133	)
Proceeds from sales of marketable securities		36,658			63,612
Proceeds from the sales of assets or businesses
Other		(322	)		3,296
Cash (Used For) Investing Activities		(19,802	)		(30,845	)
Cash Flows From Financing Activities:
Additions to long-term and short-term debt		304,203			87,209
Reductions of long-term and short-term debt		(327,133	)		(49,576	)
Cash dividends		(52,237	)		(50,470	)
Repurchase of stock					(45,184	)
Exercise of stock options		5,294			1,690
Tax benefit from exercise of stock options
Cash From (Used For) Financing Activities		(69,873	)		(56,331	)
Effect of Exchange Rate Changes on Cash and Cash Equivalents		15,522			(42,834	)
Net Change in Cash and Cash Equivalents		110,541			(25,962	)
Cash and Cash Equivalents at Beginning of Period		253,387			231,251
Cash and Cash Equivalents at End of Period	$	363,928		$	205,289