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Exhibit 99.1
RPM, INC. ANNOUNCES 52ND RECORD YEAR
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NEW YORK - August 9, 1999 - RPM, Inc. (NYSE: RPM) announced today that it
achieved its 52nd consecutive year of record sales and record earnings for the
fiscal year ended May 31, 1999.
For the year, the leading specialty coatings manufacturer said net sales
increased 6 percent, to $1.7 billion from $1.6 billion in the 1998 fiscal year.
Net income grew 8 percent, to $94.5 million from $87.8 million a year ago, while
diluted earnings per share were up 2 percent, to $0.86 from $0.84 in fiscal
1998.
In the fourth quarter, net sales were $475.3 million, up 5 percent from the $452
million reported a year ago. Net income grew 9 percent, to $35.4 million from
$32.6 million in the fiscal 1998 fourth quarter. Diluted earnings per share were
$0.32, compared to $0.30 a year ago.
Earnings per share comparisons for both the quarter and year were affected by
the redemption of $160 million in convertible notes on August 10, 1998. These
securities were redeemed for 10 million new shares of RPM stock, which
strengthened the company's debt to total capitalization ratio to 44 percent from
56 percent. The redemption will no longer have any impact on year-to-year
earnings per share comparisons after the first quarter of fiscal 2000.
Speaking to a group of security analysts in New York, Thomas C. Sullivan,
chairman and chief executive officer of the Medina, Ohio-based company, said,
"The fiscal 1999 operating environment was challenging. Our Industrial Division
faced continued depressed overseas markets, particularly in the financially
troubled Asian and South American economies; a softening North American market
and a strong dollar against most foreign currencies. Higher service and
distribution expense overall and continued weakness in the automotive
aftermarket had an impact on RPM's Consumer Division."
"Given these conditions, we are pleased to have achieved our 52nd consecutive
record year, although we are not satisfied with single digit earnings growth
rates," Mr. Sullivan said.
He said that on August 3, "RPM completed the acquisition of DAP, a $250 million
business and one of the premiere brand names in the North American consumer
do-it-yourself market." Products marketed to consumers under the DAP brand
include sealants, caulks, patch and repair compounds, wood preservatives, water
repellents and adhesives. The $290 million purchase was financed through RPM's
revolving line of credit.
RPM, Inc. is a world leader in specialty coatings, serving both the industrial
and consumer markets. Its industrial products include roofing systems, sealants,
corrosion control coatings, floor coatings and specialty chemicals. RPM's
consumer do-it-yourself products are used for home maintenance and automotive
and boat repair. RPM stock is traded on the New York Stock Exchange under the
symbol RPM.
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CONSOLIDATED CONDENSED STATEMENTS OF INCOME
In thousands, except per share data
Year Ended May 31, Three Months Ended May 31,
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1999 1998 1999 1998
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NET SALES $1,712,154 $1,615,274 $475,290 $452,008
Cost of Sales 927,110 891,862 247,157 242,434
------------------ -------------------- --------------------- --------------------
Gross Profit $785,044 $723,412 $228,133 $209,574
Selling, General & Administrative
Expenses 592,666 537,156 162,538 148,668
Interest Expense, Net 32,781 36,700 5,948 7,275
------------------ -------------------- --------------------- --------------------
Income Before Income Taxes 159,597 149,556 59,647 53,631
Provision for Income Taxes 65,051 61,719 24,167 20,951
------------------ -------------------- --------------------- --------------------
NET INCOME $94,546 $87,837 $35,480 $32,680
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Basic Earnings per Share $0.87 $0.89 $0.32 $0.33
================== ==================== ===================== ====================
Diluted Earnings per Share * $0.86 $0.84 $0.32 $0.30
================== ==================== ===================== ====================
Average Shares Outstanding - Basic 108,731 98,527 109,819 99,590
================== ==================== ===================== ====================
Average Shares Outstanding - Diluted 111,376 111,663 110,180 112,844
================== ==================== ===================== ====================
CONSOLIDATED CONDENSED BALANCE SHEET
In thousands, except per share data
May 31,
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1999 1998
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ASSETS
Current Assets $705,419 $675,112
Property, Plant & Equipment 339,697 305,897
Other Assets 692,120 704,908
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TOTAL ASSETS $1,737,236 $1,685,917
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities $302,549 $287,828
Long-Term Debt 582,109 716,989
Other Liabilities 109,702 114,763
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TOTAL LIABILITIES $994,360 $1,119,580
Shareholders' Equity 742,876 566,337
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TOTAL LIABILITIES &
SHAREHOLDERS' EQUITY $1,737,236 $1,685,917
================== ====================
Current Ratio 2.3:1 2.4:1
Shareholders' Equity per Share $6.83 $5.75
Working Capital $402,870 $387,284
* Includes interest expense add-back, net of tax, on convertible debt
securities -- $1,005 and $5,638 for the twelve months, and $0 and $1,526
for the fourth quarters in 1999 and 1998, respectively.