Exhibit 99.1
RPM Reports Fiscal 2017 Third-Quarter Results
| • | Sales increase 3% to third-quarter record level |
| • | Diluted EPS of $0.09 compares to $0.14 a year ago |
| • | Impairment and restructuring charges reduced diluted EPS by $0.05 per share |
| • | Full-year EPS guidance maintained at $1.54 to $1.64 per diluted share;as-adjusted guidance revised to $2.57 to $2.67, from $2.62 to $2.72 due to impairment and restructuring charges |
| • | Third-quarter acquisitions add approximately $170 million in annualized revenue |
MEDINA, OH – April 6, 2017 – RPM International Inc. (NYSE: RPM) today reported record sales for its fiscal 2017 third quarter ended February 28, 2017. Third-quarter net income declined versus the prior-year period primarily due to apre-tax charge of $4.9 million for an intangible impairment on the Restore product line and apre-tax charge of $4.2 million for the closing of a European manufacturing facility.
Third-Quarter Results
Net sales grew 3.4% to $1.0 billion in the fiscal 2017 third quarter from $988.6 million in the fiscal 2016 third quarter. Net income of $11.9 million in the fiscal 2017 third quarter decreased 35.8% from $18.6 million reported a year ago. Third-quarter earnings per share were $0.09, down 35.7% from the $0.14 reported last year. Income before income taxes (IBT) was $17.0 million, down 22.4% fromyear-ago IBT of $21.9 million. Consolidated earnings before interest and taxes (EBIT) were $37.1 million, down 11.9% fromyear-ago EBIT of $42.1 million. The impairment and restructuring charges reduced both IBT and EBIT by $9.1 million in the quarter.
During the current quarter, certain negative trends in the Restore product line led to a loss of market share, resulting in a downward revision to its long-term forecast. This was determined to represent an impairment triggering event and, after additional testing, resulted in apre-tax impairment charge of $4.9 million. Also during the quarter, as previously discussed, an unprofitable operation in Europe was closed that resulted in apre-tax charge of $4.2 million.
“We were pleased with our consolidated sales growth during the third quarter, which is typically slow due to cold winter weather that limits outdoor repair, maintenance and construction activities. Our earnings were negatively impacted by approximately $0.05 per share due to the Restore intangible impairment charge and the charge for the closure of a European manufacturing facility, which is consistent with our strategy to close underperforming operations. On the acquisition front, we completed five transactions during the quarter, which will add approximately $170 million in annualized sales,” stated Frank C. Sullivan, RPM chairman and chief executive officer. “Costs associated with completing these acquisitions, as well as the associated impact on cost of sales resulting from thestep-up in inventory, further reduced EPS by approximately $0.03 per share.”
RPM Reports Fiscal 2017 Third-Quarter Results
April 6, 2017
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Third-Quarter Segment Sales and Earnings
Industrial segment sales increased 5.8% to $521.4 million from $492.7 million in the fiscal 2016 third quarter. Organic sales improved 2.5%, while acquisitions added 4.1%. Foreign currency translation negatively impacted sales by 0.8%. IBT was $11.7 million, compared toyear-ago IBT of $0.5 million. Industrial segment EBIT for the quarter of $14.6 million was up sharply from last year’s EBIT of $2.0 million.
“Our businesses serving the U.S. commercial construction market again experienced solid organic growth. Most businesses in Europe were up in thelow- tomid-single-digit range in local currencies and current-year acquisitions contributed nicely to the segment’s overall sales growth. We were very pleased with the strong EBIT leverage achieved on solidtop-line sales,” stated Sullivan.
Third-quarter sales in the company’s specialty segment increased 1.8% to $159.7 million from $156.9 million a year ago. Organic sales decreased 0.6% and acquisitions added 3.8%. Foreign currency translation negatively impacted sales by 1.4%. IBT was $15.0 million, down 31.0% fromyear-ago IBT of $21.7 million. Specialty segment EBIT declined 30.8% to $14.9 million from $21.5 million in the fiscal 2016 third quarter.
“Sales were soft for nearly all of our specialty segment businesses, which cut across a broad range of industries, and earnings were negatively impacted by the European facility closure amounting to $4.2 million. In this traditionally slow quarter, the segment didn’t generate enoughtop-line momentum to create positive leverage through its fixed operating cost structure,” stated Sullivan.
Sales in RPM’s consumer segment increased 0.7% to $341.4 million from $339.0 million in the fiscal 2016 third quarter. Organic sales declined 3.6%, while acquisitions added 5.1%. Foreign currency translation negatively impacted sales by 0.8%. IBT was $29.8 million, down 23.2% fromyear-ago IBT of $38.8 million. Consumer segment EBIT declined 22.9% to $29.9 million from $38.8 million a year ago.
“Excluding our Kirker nail enamel business, the consumer segment produced modest sales growth, primarily driven by acquisitions. The decline in organic sales was driven by the timing of orders from our retail customers during the quarter. Impacting segment earnings for the quarter was the Restore impairment charge, along with acquisition-related expenses and the impact on cost of sales relating to thestep-up in inventory. Looking ahead, we are encouraged by housing market activity, retail customer results and the acceptance of recently introduced new products,” stated Sullivan.
Cash Flow and Financial Position
For the first nine months of fiscal 2017, cash from operations was $173.5 million, compared to $223.8 million in the first nine months of fiscal 2016. Capital expenditures during the current nine-month period of $80.1 million compare to $54.8 million over the same time in fiscal 2016. Cash invested in acquisitions totaled $247 million. Total debt at the end of the first nine months of fiscal 2017 was $1.98 billion, compared to $1.74 billion a year ago and $1.64 billion at the end of fiscal 2016. RPM’s net (of cash)debt-to-total capitalization ratio was 58.0%, compared to 55.1% at February 29, 2016 and 50.0% at May 31, 2016.
RPM Reports Fiscal 2017 Third-Quarter Results
April 6, 2017
Page 3
“At February 28, 2017, RPM’s total liquidity, including cash and long-term committed available credit, was $620.0 million. Building upon this year’s strong pace of acquisitions, we continue our search for entrepreneurial acquisition candidates and to invest in our internal growth initiatives. In March 2017, we issued $450 million in bonds to pay down existing balances and free up available borrowings on our revolving credit facility,” stated Sullivan.
Nine-Month Results
Nine-month net sales grew 2.3% to $3.47 billion from $3.39 billion a year ago. Net income of $53.8 million declined 73.4% from net income of $201.8 million in theyear-ago period. Diluted earnings per share declined 72.7% to $0.41 from $1.50 in the first nine months of fiscal 2016. IBT was $58.6 million, down 79.4% fromyear-ago IBT of $284.4 million. Consolidated EBIT was $118.2 million, down 65.7% fromyear-ago EBIT of $344.4 million.
The fiscal 2017 nine month results included a $188.3 million Kirker impairment charge and a $12.3 million charge related to the decision to exit Flowcrete Middle East, while the fiscal 2016 nine-month results included a $14.5 million reversal of Kirker’s final earnout accrual into income. Excluding these items, earnings per diluted share increased from $1.43 per share to $1.44 per share, while consolidated EBIT was $318.8 million, down 3.4% fromyear-ago EBIT of $329.9 million.
Nine-Month Segment Sales and Earnings
Sales for RPM’s industrial segment increased 2.1%, to $1.83 billion from $1.79 billion in the fiscal 2016 first nine months. Organic sales increased 1.9%, while acquisitions added 2.3%. Foreign currency translation negatively impacted sales by 2.1%. IBT was $151.3 million, up 1.5% fromyear-ago IBT of $149.0 million. Industrial segment EBIT of $158.0 million was up 2.9% from EBIT of $153.5 million in the first nine months of fiscal 2016. Excluding the current-year Flowcrete Middle East charge, EBIT was $170.2 million, up 10.9% fromyear-ago EBIT of $153.5 million.
Specialty segment sales increased 3.8% to $519.6 million from $500.4 million in the first nine months a year ago. Organic sales increased 2.5% and acquisitions added 3.0%. Foreign currency translation negatively impacted sales by 1.7%. IBT was $76.7 million, up 0.2% fromyear-ago IBT of $76.5 million. Specialty segment EBIT improved 0.5% to $76.3 million from $75.8 million in the same period a year ago.
In the consumer segment, nine-month sales were up 2.0% to $1.12 billion from $1.09 billion in the first nine months of fiscal 2016. Organic sales improved 1.4%, while acquisitions added 2.1%. Foreign currency negatively impacted sales by 1.5%. Loss before income taxes was $40.7 million, compared toyear-ago IBT of $170.3 million. Consumer segment EBIT was a negative $40.6 million compared to EBIT of $170.2 million in the first nine months a year ago. Excluding the current-year Kirker impairment charge and the prior year’s Kirker earnout reversal, EBIT was $147.7 million, down 5.1% fromyear-ago EBIT of $155.7 million.
RPM Reports Fiscal 2017 Third-Quarter Results
April 6, 2017
Page 4
Business Outlook
“As we look ahead, we expect that recent expense-reduction initiatives, along with the $220 million in revenue added via nine acquisitions this fiscal year, have RPM well positioned for solid performance in the fourth quarter and into fiscal 2018,” Sullivan stated.
“In our industrial segment, we expectmid-single-digit sales growth during the fourth quarter. This is predicated on continued strength in our businesses serving U.S. commercial construction markets and steady progress in Europe. Also, contributing to growth will be approximately $80 million in annualized sales from six industrial acquisitions completed this fiscal year,” stated Sullivan.
“The specialty segment is expected to grow in thelow- tomid-single-digit range during the fourth quarter, driven by a balance between organic and acquisition growth,” Sullivan stated.
“Our consumer segment’s fourth-quarter sales should increase in themid-single-digit range. Third-quarter acquisitions in the segment will help balance out underperformance at our Kirker business, which remains challenged,” Sullivan stated.
“As-reported EPS guidance for the full fiscal year of $1.54 to $1.64 remains unchanged. In January, we provided full-yearas-adjusted EPS guidance of $2.62 to $2.72.As-adjusted EPS guidance is being reduced by $0.05 per share to $2.57 to $2.67 for the combined third quarter charges for the Restore intangible impairment and the European facility closure,” stated Sullivan.
Webcast and Conference Call Information
Management will host a conference call to discuss these results beginning at 10:00 a.m. EDT today. The call can be accessed by dialing888-771-4371 or847-585-4405 for international callers. Participants are asked to call the assigned number approximately 10 minutes before the conference call begins. The call, which will last approximately one hour, will be open to the public, but only financial analysts will be permitted to ask questions. The media and all other participants will be in a listen-only mode.
For those unable to listen to the live call, a replay will be available from approximately 12:30 p.m. EDT today until 11:59 p.m. EDT on April 13, 2017. The replay can be accessed by dialing888-843-7419 or630-652-3042 for international callers. The access code is 43815401. The call also will be available both live and for replay, and as a written transcript, via the RPM web site at www.rpminc.com.
About RPM
RPM International Inc. owns subsidiaries that are world leaders in specialty coatings, sealants, building materials and related services across three segments. RPM’s industrial products include roofing systems, sealants, corrosion control coatings, flooring coatings and other construction chemicals. Industrial companies include Stonhard, Tremco, illbruck, Carboline, Flowcrete, Euclid Chemical and RPM Belgium Vandex. RPM’s consumer products are used by professionals anddo-it-yourselfers for home maintenance and improvement and by hobbyists. Consumer brands include Rust-Oleum, DAP,
RPM Reports Fiscal 2017 Third-Quarter Results
April 6, 2017
Page 5
Zinsser, Varathane and Testors. RPM’s specialty products include industrial cleaners, colorants, exterior finishes, specialty OEM coatings, edible coatings, restoration services equipment and specialty glazes for the pharmaceutical and food industries. Specialty segment companies includeDay-Glo, Dryvit, RPM Wood Finishes, Mantrose-Haeuser, Legend Brands,Kop-Coat and TCI. Additional details can be found at www.RPMinc.com and by following RPM on Twitter at www.twitter.com/RPMintl.
For more information, contact Barry M. Slifstein, vice president – investor relations, at330-273-5090 or bslifstein@rpminc.com.
# # #
Use ofNon-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, anon-GAAP financial measure. EBIT is defined as earnings (loss) before interest and taxes. We evaluate the profit performance of our segments based on income before income taxes, but also look to EBIT as a performance evaluation measure because interest expense is essentially related to acquisitions, as opposed to segment operations. For that reason, we believe EBIT is also useful to investors as a metric in their investment decisions. EBIT should not be considered an alternative to, or more meaningful than, income before income taxes as determined in accordance with GAAP, since EBIT omits the impact of interest in determining operating performance, which represent items necessary to our continued operations, given our level of indebtedness. Nonetheless, EBIT is a key measure expected by and useful to our fixed income investors, rating agencies and the banking community all of whom believe, and we concur, that this measure is critical to the capital markets’ analysis of our segments’ core operating performance. We also evaluate EBIT because it is clear that movements in EBIT impact our ability to attract financing. Our underwriters and bankers consistently require inclusion of this measure in offering memoranda in conjunction with any debt underwriting or bank financing. EBIT may not be indicative of our historical operating results, nor is it meant to be predictive of potential future results. See the last page of this earnings release for a reconciliation of EBIT to income before income taxes.
Forward-Looking Statements
This press release contains “forward-looking statements” relating to our business. These forward-looking statements, or other statements made by us, are made based on our expectations and beliefs concerning future events impacting us, and are subject to uncertainties and factors (including those specified below) which are difficult to predict and, in many instances, are beyond our control. As a result, our actual results could differ materially from those expressed in or implied by any such forward-looking statements. These uncertainties and factors include (a) global markets and general economic conditions, including uncertainties surrounding the volatility in financial markets, the availability of capital and the effect of changes in interest rates, and the viability of banks and other financial institutions; (b) the prices, supply and capacity of raw materials, including assorted pigments, resins, solvents and other naturalgas- andoil-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 ofnon-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 Form10-K for the year ended May 31, 2016, as the same may be updated from time to time. We do not undertake any obligation to publicly update or revise any forward-looking statements to reflect future events, information or circumstances that arise after the date of this release.
CONSOLIDATED STATEMENTS OF INCOME
IN THOUSANDS, EXCEPT PER SHARE DATA
(Unaudited)
| Three Months Ended | Nine Months Ended | |||||||||||||||
| February 28, 2017 | February 29, 2016 | February 28, 2017 | February 29, 2016 | |||||||||||||
Net Sales | $ | 1,022,496 | $ | 988,555 | $ | 3,465,329 | $ | 3,387,065 | ||||||||
Cost of sales | 593,923 | 575,593 | 1,963,033 | 1,947,211 | ||||||||||||
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Gross profit | 428,573 | 412,962 | 1,502,296 | 1,439,854 | ||||||||||||
Selling, general & administrative expenses | 386,032 | 370,913 | 1,189,611 | 1,096,361 | ||||||||||||
Goodwill and other intangible asset impairments | 4,900 | 193,198 | ||||||||||||||
Interest expense | 23,769 | 23,140 | 69,452 | 68,078 | ||||||||||||
Investment (income), net | (3,627 | ) | (2,909 | ) | (9,881 | ) | (8,077 | ) | ||||||||
Other expense (income), net | 502 | (88 | ) | 1,301 | (876 | ) | ||||||||||
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Income before income taxes | 16,997 | 21,906 | 58,615 | 284,368 | ||||||||||||
Provision for income taxes | 4,313 | 2,613 | 2,793 | 80,564 | ||||||||||||
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Net income | 12,684 | 19,293 | 55,822 | 203,804 | ||||||||||||
Less: Net income attributable to noncontrolling interests | 756 | 711 | 2,051 | 1,974 | ||||||||||||
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Net income attributable to RPM International Inc. Stockholders | $ | 11,928 | $ | 18,582 | $ | 53,771 | $ | 201,830 | ||||||||
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Earnings per share of common stock attributable to RPM International Inc. Stockholders: | ||||||||||||||||
Basic | $ | 0.09 | $ | 0.14 | $ | 0.41 | $ | 1.53 | ||||||||
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Diluted | $ | 0.09 | $ | 0.14 | $ | 0.41 | $ | 1.50 | ||||||||
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Average shares of common stock outstanding - basic | 130,677 | 129,068 | 130,657 | 129,506 | ||||||||||||
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Average shares of common stock outstanding - diluted | 130,677 | 129,068 | 130,657 | 136,848 | ||||||||||||
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SUPPLEMENTAL SEGMENT INFORMATION
IN THOUSANDS
(Unaudited)
| Three Months Ended | Nine Months Ended | |||||||||||||||
| February 28, 2017 | February 29, 2016 | February 28, 2017 | February 29, 2016 | |||||||||||||
Net Sales: | ||||||||||||||||
Industrial Segment | $ | 521,403 | $ | 492,662 | $ | 1,830,672 | $ | 1,793,075 | ||||||||
Specialty Segment | 159,659 | 156,909 | 519,562 | 500,395 | ||||||||||||
Consumer Segment | 341,434 | 338,984 | 1,115,095 | 1,093,595 | ||||||||||||
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Total | $ | 1,022,496 | $ | 988,555 | $ | 3,465,329 | $ | 3,387,065 | ||||||||
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Income Before Income Taxes (a): | ||||||||||||||||
Industrial Segment | ||||||||||||||||
Income Before Income Taxes (b) | $ | 11,705 | $ | 486 | $ | 151,262 | $ | 148,962 | ||||||||
Interest (Expense), Net (c) | (2,929 | ) | (1,468 | ) | (6,672 | ) | (4,549 | ) | ||||||||
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EBIT (d) | 14,634 | 1,954 | 157,934 | 153,511 | ||||||||||||
Charge to exit Flowcrete Middle East (e) | 12,275 | |||||||||||||||
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Adjusted EBIT | $ | 14,634 | $ | 1,954 | $ | 170,209 | $ | 153,511 | ||||||||
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Specialty Segment | ||||||||||||||||
Income Before Income Taxes (b) | $ | 15,000 | $ | 21,729 | $ | 76,664 | $ | 76,496 | ||||||||
Interest Income, Net (c) | 116 | 208 | 406 | 650 | ||||||||||||
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EBIT (d) | $ | 14,884 | $ | 21,521 | $ | 76,258 | $ | 75,846 | ||||||||
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Consumer Segment | ||||||||||||||||
(Loss) Income Before Income Taxes (b) | $ | 29,802 | $ | 38,785 | $ | (40,685 | ) | $ | 170,337 | |||||||
Interest (Expense) Income, Net (c) | (92 | ) | 16 | (114 | ) | 116 | ||||||||||
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EBIT (d) | 29,894 | 38,769 | (40,571 | ) | 170,221 | |||||||||||
Goodwill and intangible impairments (f) | 188,298 | |||||||||||||||
Reversal of Kirker earnout (g) | (14,500 | ) | ||||||||||||||
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Adjusted EBIT | $ | 29,894 | $ | 38,769 | $ | 147,727 | $ | 155,721 | ||||||||
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Corporate/Other | ||||||||||||||||
(Expense) Before Income Taxes (b) | $ | (39,510 | ) | $ | (39,094 | ) | $ | (128,626 | ) | $ | (111,427 | ) | ||||
Interest (Expense), Net (c) | (17,237 | ) | (18,987 | ) | (53,191 | ) | (56,218 | ) | ||||||||
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EBIT (d) | $ | (22,273 | ) | $ | (20,107 | ) | $ | (75,435 | ) | $ | (55,209 | ) | ||||
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Consolidated | ||||||||||||||||
(Loss) Income Before Income Taxes (b) | $ | 16,997 | $ | 21,906 | $ | 58,615 | $ | 284,368 | ||||||||
Interest (Expense), Net (c) | (20,142 | ) | (20,231 | ) | (59,571 | ) | (60,001 | ) | ||||||||
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EBIT (d) | 37,139 | 42,137 | 118,186 | 344,369 | ||||||||||||
Charge to exit Flowcrete Middle East (e) | 12,275 | |||||||||||||||
Goodwill and intangible impairments (f) | 188,298 | |||||||||||||||
Reversal of Kirker earnout (g) | (14,500 | ) | ||||||||||||||
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Adjusted EBIT | $ | 37,139 | $ | 42,137 | $ | 318,759 | $ | 329,869 | ||||||||
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| (a) | Prior period information has been recast to reflect the current period change in reportable segments. |
| (b) | The presentation includes a reconciliation of Income (Loss) Before Income Taxes, a measure defined by Generally Accepted Accounting Principles in the United States (GAAP), to EBIT. |
| (c) | Interest income (expense), net includes the combination of interest income (expense) and investment income (expense), net. |
| (d) | EBIT is defined as earnings (loss) before interest and taxes. We evaluate the profit performance of our segments based on income before income taxes, but also look to EBIT as a performance evaluation measure because interest expense is essentially related to acquisitions, as opposed to segment operations. For that reason, we believe EBIT is also useful to investors as a metric in their investment decisions. EBIT should not be considered an alternative to, or more meaningful than, income before income taxes as determined in accordance with GAAP, since EBIT omits the impact of interest in determining operating performance, which represent items necessary to our continued operations, given our level of indebtedness. Nonetheless, EBIT is a key measure expected by and useful to our fixed income investors, rating agencies and the banking community all of whom believe, and we concur, that this measure is critical to the capital markets’ analysis of our segments’ core operating performance. We also evaluate EBIT because it is clear that movements in EBIT impact our ability to attract financing. Our underwriters and bankers consistently require inclusion of this measure in offering memoranda in conjunction with any debt underwriting or bank financing. EBIT may not be indicative of our historical operating results, nor is it meant to be predictive of potential future results. |
| (e) | Charges related to Flowcrete decision to exit the Middle East. |
| (f) | Reflects the impact of goodwill and other intangible asset impairment charges of $188.3 million related to our Kirker reporting unit. |
| (g) | Reflects the reversal of contingent obligations for earnout targets that were not met at our Kirker reporting unit. |
SUPPLEMENTAL INFORMATION
RECONCILIATION OF “REPORTED” TO “ADJUSTED” AMOUNTS
(Unaudited)
| Three Months Ended | Nine Months Ended | |||||||||||||||
| February 28, | February 29, | February 28, | February 29, | |||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||
Reconciliation of Reported Earnings (Loss) per Diluted Share to Adjusted Earnings per Diluted Share: | ||||||||||||||||
Reported (Loss) Earnings per Diluted Share | $ | 0.09 | $ | 0.14 | $ | 0.41 | $ | 1.50 | ||||||||
Charge to exit Flowcrete Middle East (e) | 0.09 | |||||||||||||||
Goodwill and intangible impairments (f) | 0.94 | |||||||||||||||
Reversal of Kirker earnout (g) | (0.07 | ) | ||||||||||||||
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Adjusted Earnings per Diluted Share | $ | 0.09 | $ | 0.14 | $ | 1.44 | $ | 1.43 | ||||||||
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| (e) | Charges related to Flowcrete decision to exit the Middle East. |
| (f) | Reflects the impact of goodwill and other intangible asset impairment charge of $188.3 million related to our Kirker reporting unit. |
| (g) | Reflects the reversal of contingent obligations for earnout targets that were not met at our Kirker reporting unit. |
CONSOLIDATED BALANCE SHEETS
IN THOUSANDS
(Unaudited)
| February 28, 2017 | February 29, 2016 | May 31, 2016 | ||||||||||
Assets | ||||||||||||
Current Assets | ||||||||||||
Cash and cash equivalents | $ | 210,796 | $ | 220,712 | $ | 265,152 | ||||||
Trade accounts receivable | 829,632 | 769,003 | 987,692 | |||||||||
Allowance for doubtful accounts | (41,357 | ) | (22,450 | ) | (24,600 | ) | ||||||
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Net trade accounts receivable | 788,275 | 746,553 | 963,092 | |||||||||
Inventories | 856,461 | 739,716 | 685,818 | |||||||||
Deferred income taxes | — | 29,042 | — | |||||||||
Prepaid expenses and other current assets | 224,347 | 191,291 | 221,286 | |||||||||
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Total current assets | 2,079,879 | 1,927,314 | 2,135,348 | |||||||||
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Property, Plant and Equipment, at Cost | 1,433,413 | 1,278,553 | 1,344,830 | |||||||||
Allowance for depreciation | (731,279 | ) | (698,902 | ) | (715,377 | ) | ||||||
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Property, plant and equipment, net | 702,134 | 579,651 | 629,453 | |||||||||
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Other Assets | ||||||||||||
Goodwill | 1,133,013 | 1,182,293 | 1,219,630 | |||||||||
Other intangible assets, net of amortization | 579,237 | 566,977 | 575,401 | |||||||||
Deferred income taxes, non-current | 25,872 | 2,237 | 19,771 | |||||||||
Other | 212,084 | 177,778 | 185,366 | |||||||||
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Total other assets | 1,950,206 | 1,929,285 | 2,000,168 | |||||||||
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Total Assets | $ | 4,732,219 | $ | 4,436,250 | $ | 4,764,969 | ||||||
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Liabilities and Stockholders’ Equity | ||||||||||||
Current Liabilities | ||||||||||||
Accounts payable | $ | 417,730 | $ | 367,038 | $ | 500,506 | ||||||
Current portion of long-term debt | 383,980 | 3,405 | 4,713 | |||||||||
Accrued compensation and benefits | 133,588 | 129,105 | 183,768 | |||||||||
Accrued losses | 37,123 | 27,581 | 35,290 | |||||||||
Other accrued liabilities | 258,102 | 255,274 | 277,914 | |||||||||
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| |||||||
Total current liabilities | 1,230,523 | 782,403 | 1,002,191 | |||||||||
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Long-Term Liabilities | ||||||||||||
Long-term debt, less current maturities | 1,597,553 | 1,737,984 | 1,635,260 | |||||||||
Other long-term liabilities | 569,859 | 609,952 | 702,979 | |||||||||
Deferred income taxes | 48,557 | 65,391 | 49,791 | |||||||||
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Total long-term liabilities | 2,215,969 | 2,413,327 | 2,388,030 | |||||||||
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| |||||||
Total liabilities | 3,446,492 | 3,195,730 | 3,390,221 | |||||||||
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Commitments and contingencies | ||||||||||||
Stockholders’ Equity | ||||||||||||
Preferred stock; none issued | ||||||||||||
Common stock (outstanding 133,583; 132,846; 132,944) | 1,336 | 1,328 | 1,329 | |||||||||
Paid-in capital | 946,955 | 895,131 | 921,956 | |||||||||
Treasury stock, at cost | (216,366 | ) | (191,693 | ) | (196,274 | ) | ||||||
Accumulated other comprehensive (loss) | (533,165 | ) | (497,754 | ) | (502,047 | ) | ||||||
Retained earnings | 1,084,462 | 1,031,020 | 1,147,371 | |||||||||
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Total RPM International Inc. stockholders’ equity | 1,283,222 | 1,238,032 | 1,372,335 | |||||||||
Noncontrolling interest | 2,505 | 2,488 | 2,413 | |||||||||
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| |||||||
Total equity | 1,285,727 | 1,240,520 | 1,374,748 | |||||||||
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| |||||||
Total Liabilities and Stockholders’ Equity | $ | 4,732,219 | $ | 4,436,250 | $ | 4,764,969 | ||||||
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CONSOLIDATED STATEMENTS OF CASH FLOWS
IN THOUSANDS
(Unaudited)
| Nine Months Ended | ||||||||
| February 28, 2017 | February 29, 2016 | |||||||
Cash Flows From Operating Activities: | ||||||||
Net income | $ | 55,822 | $ | 203,804 | ||||
Adjustments to reconcile net income to net cash provided by (used for) operating activities: | ||||||||
Depreciation | 53,343 | 49,980 | ||||||
Amortization | 33,497 | 33,151 | ||||||
Goodwill and other intangible asset impairments | 193,198 | |||||||
Reversal of contingent consideration obligations | (14,500 | ) | ||||||
Deferred income taxes | (26,996 | ) | (18,556 | ) | ||||
Stock-based compensation expense | 25,005 | 23,000 | ||||||
Other non-cash interest expense | 7,149 | 7,305 | ||||||
Realized (gain) on sales of marketable securities | (5,338 | ) | (5,438 | ) | ||||
Other | 136 | 1,994 | ||||||
Changes in assets and liabilities, net of effect from purchases and sales of businesses: | ||||||||
Decrease in receivables | 190,423 | 179,003 | ||||||
(Increase) in inventory | (143,409 | ) | (81,837 | ) | ||||
(Increase) in prepaid expenses and other current and long-term assets | (26,698 | ) | (13,347 | ) | ||||
(Decrease) in accounts payable | (95,727 | ) | (133,841 | ) | ||||
(Decrease) in accrued compensation and benefits | (50,425 | ) | (35,202 | ) | ||||
Increase in accrued losses | 2,247 | 5,948 | ||||||
(Decrease) increase in other accrued liabilities | (35,135 | ) | 4,696 | |||||
Other | (3,613 | ) | 17,659 | |||||
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| |||||
Cash Provided By Operating Activities | 173,479 | 223,819 | ||||||
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| |||||
Cash Flows From Investing Activities: | ||||||||
Capital expenditures | (80,110 | ) | (54,819 | ) | ||||
Acquisition of businesses, net of cash acquired | (246,874 | ) | (28,926 | ) | ||||
Purchase of marketable securities | (36,418 | ) | (21,981 | ) | ||||
Proceeds from sales of marketable securities | 36,696 | 18,722 | ||||||
Other | 1,493 | 7,430 | ||||||
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Cash (Used For) Investing Activities | (325,213 | ) | (79,574 | ) | ||||
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Cash Flows From Financing Activities: | ||||||||
Additions to long-term and short-term debt | 422,521 | 116,578 | ||||||
Reductions of long-term and short-term debt | (78,654 | ) | (19,419 | ) | ||||
Cash dividends | (116,680 | ) | (107,806 | ) | ||||
Shares of common stock repurchased and returned for taxes | (20,092 | ) | (66,765 | ) | ||||
Payments of acquisition-related contingent consideration | (4,206 | ) | (2,006 | ) | ||||
Payments for 524(g) trust | (102,500 | ) | ||||||
Other | (2,009 | ) | (1,239 | ) | ||||
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| |||||
Cash Provided By (Used For) Financing Activities | 98,380 | (80,657 | ) | |||||
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Effect of Exchange Rate Changes on Cash and Cash Equivalents | (1,002 | ) | (17,587 | ) | ||||
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Net Change in Cash and Cash Equivalents | (54,356 | ) | 46,001 | |||||
Cash and Cash Equivalents at Beginning of Period | 265,152 | 174,711 | ||||||
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Cash and Cash Equivalents at End of Period | $ | 210,796 | $ | 220,712 | ||||
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