Exhibit 99.1
RPM ANNOUNCES RECORD FIRST QUARTER RESULTS
MEDINA, Ohio -- October 8, 2003 - RPM International Inc. (NYSE: RPM) today
reported record sales, earnings, and earnings per share results for its first
quarter of fiscal 2004, ended August 31, 2003.
FIRST QUARTER RESULTS
The specialty coatings manufacturer reported record net sales of $590.1 million,
up 9 percent from last year's first quarter net sales of $542.4 million. RPM's
industrial segment sales increased more than 8 percent and its consumer segment
sales increased more than 9 percent over last year's results, including net
favorable foreign exchange differences and the impact of several smaller
acquisitions.
Record net income of $47.7 million was 8 percent higher than the prior year's
first quarter net income of $44.2 million. Record first quarter earnings per
common share of $0.41 topped $0.38 a year ago by 8 percent.
"We are pleased with the continued strong results our strategies were able to
deliver this first quarter, especially the year-over-year growth in our consumer
business," said Frank C. Sullivan, RPM's president and chief executive officer.
"As expected, we did experience a number of higher raw material costs during the
quarter, including oil-derivative materials such as acetones and solvents, which
had a slight negative impact on our gross profit margin."
BUSINESS OUTLOOK
Sullivan added, "We continue to feel that definitive signs of a business upturn
are not yet apparent on the industrial side of our business. That said, we
continue to secure new business and grow market share in many of our industrial
segment operations. Likewise, we continue to actively look at acquisition
possibilities both here and in Europe, and we remain focused on cost control and
operating leverage, in order to position our industrial businesses for strong
profit growth when a better economy returns."
WEBCAST INFORMATION
In conjunction with this news release, RPM will be hosting a conference call at
10 a.m. Eastern time today, October 8. The call may be accessed by dialing
719-457-2630 or over the Internet through RPM's web site at
http://www.rpminc.com. Please access approximately 10 minutes before the call to
complete registration. A replay will be available from 1 p.m. Eastern time on
October 8 until 8 p.m. Eastern time on October 15, 2003 on RPM's web site or by
dialing 719-457-0820 and citing access code 710273. A transcript of the call
will also be posted on the web site as soon as possible.
ABOUT RPM
RPM International Inc., a holding company, owns subsidiaries that are world
leaders in specialty coatings serving both industrial and consumer markets.
RPM's industrial products include roofing systems, sealants, corrosion control
coatings, flooring coatings and specialty chemicals. RPM's
RPM Announces Record First Quarter Results
October 8, 2003
Page 2
consumer products are used by professionals and do-it-yourselfers for home
maintenance and improvement, automotive and boat repair and maintenance, and by
hobbyists. Leading industrial brands include Stonhard, Tremco, Carboline,
Day-Glo, Euco and Dryvit. Consumer brands include Zinsser, Rust-Oleum, DAP,
Varathane, Bondo and Testors.
CONTACT: Glenn R. Hasman, Vice President of Finance and Communications, at
330-273-8820 or ghasman@rpminc.com.
This press release contains "forward-looking statements" relating to the
business of the Company. These forward-looking statements, or other statements
made by the Company, are made based on management's expectations and beliefs
concerning future events impacting the Company and are subject to uncertainties
and factors (including those specified below) which are difficult to predict
and, in many instances, are beyond the control of the Company. As a result,
actual results of the Company could differ materially from those expressed in or
implied by any such forward-looking statements. These uncertainties and factors
include (a) general economic conditions; (b) the price and supply of raw
materials, particularly titanium dioxide, certain resins, aerosols and solvents;
(c) continued growth in demand for the Company's products; (d) legal,
environmental and litigation risks inherent in the Company's construction and
chemicals businesses and risks related to the adequacy of the Company's existing
reserves and insurance coverage for such matters; (e) the effect of changes in
interest rates; (f) the effect of fluctuations in currency exchange rates upon
the Company's 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 the Company's
ongoing acquisition and divestiture activities; (i) risks inherent in its
contingent liability reserves, including asbestos; and other risks detailed in
the Company's other reports and statements filed with the Securities and
Exchange Commission, including the risk factors set forth in the Company's
prospectus and prospectus supplement included as part of the Company's
Registration Statement on Form S-3 (File No. 333-108647), as the same may be
amended from time to time. RPM does 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.
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CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
In thousands, except per share data
Three Months Ended August 31,
-----------------------------
2003 2002
-------- --------
NET SALES $590,091 $542,413
Cost of sales 313,980 284,302
-------- --------
GROSS PROFIT 276,111 258,111
Selling, general & administrative expenses 195,918 183,014
Interest expense, net 6,283 7,204
-------- --------
INCOME BEFORE INCOME TAXES 73,910 67,893
Provision for income taxes 26,238 23,720
-------- --------
NET INCOME $ 47,672 $ 44,173
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Basic earnings per share of common stock $ 0.41 $ 0.38
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Diluted earnings per share of common stock $ 0.41 $ 0.38
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Average shares of common stock outstanding - basic 115,557 114,765
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Average shares of common stock outstanding - diluted 116,233 115,760
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CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
In thousands
Three Months Ended August 31,
-----------------------------
2003 2002
-------- --------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 47,672 $ 44,173
Depreciation and amortization 15,127 14,083
Items not affecting cash and other (7,006) (3,055)
Changes in operating working capital (29,074) (33,195)
-------- --------
26,719 22,006
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (6,808) (5,252)
Acquisition of new businesses, net of cash acquired (13,000) (7,595)
-------- --------
(19,808) (12,847)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in debt 4,042 2,456
Cash dividends (15,019) (14,261)
Exercise of stock options 853 721
-------- --------
(10,124) (11,084)
-------- --------
NET (DECREASE) IN CASH AND SHORT-TERM INVESTMENTS (3,213) (1,925)
-------- --------
CASH AND SHORT-TERM INVESTMENTS AT BEGINNING OF PERIOD 50,725 42,172
-------- --------
CASH AND SHORT-TERM INVESTMENTS AT END OF PERIOD $ 47,512 $ 40,247
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CONSOLIDATED BALANCE SHEETS
In thousands
August 31, August 31, May 31
2003 2002 2003
ASSETS (Unaudited) (Unaudited)
----------- ----------- -----------
CURRENT ASSETS
Cash and short term investments $ 47,512 $ 40,247 $ 50,725
Trade accounts receivable 443,782 409,135 456,920
Allowance for doubtful accounts (17,117) (16,503) (17,297)
Net trade accounts receivable 426,665 392,632 439,623
Inventories 255,627 254,859 253,204
Deferred income taxes 51,285 42,441 51,285
Prepaid expenses and other current assets 137,653 106,325 133,257
----------- ----------- -----------
TOTAL CURRENT ASSETS 918,742 836,504 928,094
----------- ----------- -----------
Property Plant and Equipment, At Cost 717,811 661,600 714,009
Allowance for depreciation and amortization (350,681) (309,882) (343,220)
----------- ----------- -----------
PROPERTY, PLANT AND EQUIPMENT, NET 367,130 351,718 370,789
----------- ----------- -----------
OTHER ASSETS
Goodwill 633,820 596,250 631,253
Other intangible assets, net of amortization 279,881 262,260 282,949
Other 34,705 23,116 34,126
----------- ----------- -----------
TOTAL OTHER ASSETS 948,406 881,626 948,328
----------- ----------- -----------
TOTAL ASSETS $ 2,234,278 $ 2,069,848 $ 2,247,211
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LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 154,222 $ 141,728 $ 171,956
Current portion of long-term debt 1,802 6,063 1,282
Accrued compensation and benefits 52,864 57,987 77,577
Accrued loss reserves 59,764 47,775 64,230
Asbestos-related liabilities 41,583 3,598 41,583
Other accrued liabilities 61,166 51,925 59,759
Income taxes payable 17,628 16,251 11,263
----------- ----------- -----------
TOTAL CURRENT LIABILITIES 389,029 325,327 427,650
----------- ----------- -----------
LONG-TERM LIABILITIES
Long-term debt, less current maturities 728,367 710,189 724,846
Asbestos-related liabilities 95,274 -- 103,000
Other long-term liabilities 58,896 51,279 59,951
Deferred income taxes 61,108 92,046 54,756
----------- ----------- -----------
TOTAL LONG-TERM LIABILITIES 943,645 853,514 942,553
----------- ----------- -----------
TOTAL LIABILITIES 1,332,674 1,178,841 1,370,203
----------- ----------- -----------
STOCKHOLDERS' EQUITY
Preferred stock; none issued -- -- --
Common stock (outstanding 115,624;
114,886; 115,496) 1,156 1,786 1,156
Paid-in capital 509,332 585,737 508,397
Treasury stock, at cost (589) (86,253) (1,167)
Accumulated other comprehensive loss (26,739) (49,778) (17,169)
Retained earnings 418,444 439,515 385,791
----------- ----------- -----------
TOTAL STOCKHOLDERS' EQUITY 901,604 891,007 877,008
----------- ----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 2,234,278 $ 2,069,848 $ 2,247,211
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