MEDINA, Ohio, Jan. 5, 2017 /PRNewswire/ -- RPM International Inc. (NYSE: RPM) today reported a 3.0% increase in sales and a net loss of $70.9 million for its fiscal 2017 second quarter ended November 30, 2016. The quarter's results included a $188.3 million pre-tax impairment charge related to its Kirker consumer nail enamel business. On an after-tax basis, the charge was $129.2 million, or $0.97 per share. The second quarter also included a charge of $12.3 million, or $0.09 per share, which had no tax impact, related to the decision to exit the Flowcrete polymer flooring business in the Middle East. 

Second-Quarter Results

Net sales of $1.19 billion were up 3.0% over the $1.16 billion reported a year ago. Organic sales improved 3.8% and acquisition growth added 1.7%. Foreign currency translation reduced sales by 2.5%. The loss in the fiscal 2017 second quarter of $70.9 million compares to net income of $83.4 million in the fiscal 2016 second quarter. The fiscal 2017 second-quarter loss of $0.54 per diluted share compares to earnings per diluted share of $0.62 in the fiscal 2016 second quarter. Loss before income taxes of $106.9 million decreased from income before income taxes (IBT) of $120.3 million reported in the fiscal 2016 second quarter. RPM's consolidated loss before interest and taxes of $86.4 million decreased from consolidated earnings before interest and taxes (EBIT) of $141.6 million reported in the fiscal 2016 second quarter.

The fiscal 2017 second quarter included the $188.3 million Kirker impairment charge and the $12.3 million charge related to the decision to exit Flowcrete Middle East, while the fiscal 2016 second quarter included the previously disclosed $14.5 million reversal of Kirker's final earnout accrual into income. Excluding these items, earnings per diluted share declined 5.5% from $0.55 per share to $0.52 per share, while consolidated EBIT of $114.2 million decreased 10.2% from $127.1 million last year.

"We are pleased with the sales growth in the second quarter across each of our three segments in light of economic conditions and in comparison to our peer companies' recent performance. Even in our more global economically challenged industrial segment businesses, we are generating solid growth in local currencies. Translational and transactional foreign exchange challenges, previously communicated capacity issues in our consumer segment, and higher corporate benefit costs combined to generate lower year-over-year EBIT results, excluding the additional impairment charge and the decision to exit the Flowcrete business in the Middle East. Mid-year restructuring and expense reduction activities and the benefit of first-half acquisitions, along with having addressed the capacity situation at our DAP subsidiary, will allow revenue growth to be better leveraged to our bottom line during the fiscal 2017 fourth quarter and beyond," stated Frank C. Sullivan, chairman and chief executive officer.

Second-Quarter Segment Sales and Earnings

During the fiscal 2017 second quarter, industrial segment sales increased 1.6%, to $633.4 million from $623.3 million in the fiscal 2016 second quarter. Organic sales improved 2.2%, while acquisition growth added 2.2%. Foreign currency translation reduced sales by 2.8%. IBT for the industrial segment declined 21.4% to $50.3 million, from $64.0 million in the fiscal 2016 second quarter. Industrial segment EBIT declined 20.4% to $52.2 million, from $65.6 million in the fiscal 2016 second quarter. Industrial segment EBIT included the impact of a $12.3 million charge related to the decision to exit the Flowcrete polymer flooring business in the Middle East. Excluding this charge, industrial segment EBIT was down 1.7% to $64.5 million from $65.6 million last year, due to unfavorable mix.

"Industrial sales remain choppy by geography and have continued to be negatively impacted by weakness in the global oil and gas and heavy equipment industries, along with continued currency headwinds. In Europe, sales were down 1.0% in actual dollars, but up 6.3% in local currencies, with solid results in the U.K. In Latin America, sales were down in the low single digits in both actual results and local currencies. Our businesses serving the U.S. commercial construction markets continue to see solid sales growth in the mid-single-digit range," Sullivan stated.

Second-quarter sales for the specialty segment increased 5.7%, to $183.6 million from $173.6 million in the fiscal 2016 second quarter. Organic growth was 5.2%, while acquisitions added 2.5%. Foreign currency translation reduced sales by 2.0%. IBT for the specialty segment increased 10.2% to $31.2 million, from $28.3 million in the fiscal 2016 second quarter. Specialty segment EBIT improved 10.6%, to $31.0 million from $28.1 million a year ago.

"Most of our core specialty businesses, particularly U.S.-based restoration and exterior insulation and finish systems product lines, had solid performance in the quarter. The specialty segment also benefited from several recent smaller acquisitions," Sullivan stated.

RPM's fiscal 2017 second-quarter consumer segment sales increased 4.1%, to $373.8 million from $359.1 million a year ago. Organic sales increased 5.8%, while acquisition growth added 0.6%. Foreign currency translation reduced sales by 2.3%. The consumer segment had a loss before income taxes of $140.6 million, compared to IBT of $65.4 million in the fiscal 2016 second quarter. The segment reported a loss before interest and taxes of $140.6 million, which was a decline from EBIT of $65.4 million reported last year.

As previously disclosed, fiscal 2016 second-quarter EBIT included the $14.5 million reversal of Kirker's final earnout accrual into income. During the current year, certain negative trends in the Kirker business led to a loss of several customers and market share and a downward revision to long-term forecasts, which were determined to represent an impairment triggering event, and, after additional testing, resulted in an impairment charge totaling $188.3 million. Excluding these Kirker items, consumer segment EBIT declined 6.2%, from $50.9 million in fiscal 2016 to $47.7 million in the fiscal 2017 second quarter, principally due to a decline in Kirker's current operating results.

"During the quarter, our core U.S. consumer businesses, excluding Kirker, performed very well, and capitalized on market share gains, a strengthening domestic housing market and good growth by our retail accounts to deliver solid organic growth. Sales in these businesses were up 6.4%, net of unfavorable currency translation. Supply issues in caulks and sealants were resolved by the end of the quarter, while significant capital investments are in process to increase capacity. Certain inefficiencies lingered in the second quarter that related to the caulks and sealants supply issues, which translated into a less favorable conversion to EBIT than would normally be the case. Both Rust-Oleum and DAP invested heavily in advertising and promotional activities in the quarter to support their brands and new product placements achieved during the past year," stated Sullivan.

Cash Flow and Financial Position

For the first half of fiscal 2017, cash from operations was $158.7 million, compared to $167.1 million a year ago. Capital expenditures of $48.0 million compared to $31.3 million during the first half of last year. Total debt at November 30, 2016 was $1.64 billion, compared to $1.66 billion at November 30, 2015 and $1.64 billion at May 31, 2016. RPM's net (of cash) debt-to-total capitalization ratio was 52.8%, compared to 53.3% at November 30, 2015. At November 30, 2016, liquidity stood at $956 million, including cash of $206.0 million and $750.0 million in long-term committed available credit.

First-Half Sales and Earnings

Fiscal 2017 first-half net sales improved 1.8%, to $2.44 billion from $2.40 billion during the first six months of fiscal 2016. Net income declined to $41.8 million from $183.2 million in the fiscal 2016 first half. Diluted earnings per share were $0.32, down from $1.36 a year ago. IBT of $41.6 million declined 84.1% from $262.5 million in the fiscal 2016 first half. EBIT of $81.0 million declined 73.2% from $302.2 million reported last year. Excluding the Kirker items in both years and the Flowcrete charge in fiscal 2017, diluted earnings per share were $1.35, an increase of 4.7% from $1.29 last year and consolidated EBIT was $281.6 million, a decrease of 2.1% from $287.7 million last year.

First-Half Segment Sales and Earnings

RPM's industrial segment fiscal 2017 first-half sales were up 0.7%, to $1.31 billion from $1.30 billion in the fiscal 2016 first half. Organic sales increased 1.7%, while acquisition growth added 1.6%. Foreign currency translation reduced sales by 2.6%. IBT for the industrial segment declined 6.0% to $139.6 million, from $148.5 million in fiscal 2016. EBIT of $143.3 million declined 5.4% from $151.6 in the first half last year. Excluding the Flowcrete Middle East charge, industrial segment EBIT increased 2.7%, to $155.6 million.

Specialty segment sales grew 4.8%, to $359.9 million from $343.5 million in the 2016 first half. Organic growth was 3.9%, while acquisitions added 2.8%. Foreign currency translation reduced sales by 1.9%. IBT for the specialty segment increased 12.6% to $61.7 million, from $54.8 million in fiscal 2016. For the first half of fiscal 2017, specialty segment EBIT increased 13.0%, to $61.4 million from $54.3 million a year ago.

First-half sales for the consumer segment improved 2.5%, to $773.7 million from $754.6 million a year ago. Organic sales increased 3.7%, and acquisition growth added 0.8%. Foreign currency translation reduced sales by 2.0%. The segment experienced a loss before income taxes of $70.5 million, as compared to IBT of $131.6 million in fiscal 2016. The consumer segment reported a loss before interest and taxes of $70.5 million, which was a decline from EBIT of $131.5 million in the first half of fiscal 2016. Excluding the Kirker impairment charge from fiscal 2017 and the Kirker earnout reversal in fiscal 2016, consumer segment EBIT increased 0.8%, to $117.8 million during the first half of fiscal 2017 from $117.0 million in the prior period. 

Business Outlook

"In the industrial segment, we expect continued solid growth for those businesses serving the U.S. commercial construction markets to be partially offset by continued global choppiness and a sluggish global energy sector. We are anticipating growth in our international businesses to be in the low-single-digit range. Despite more difficult currency headwinds with the euro and British pound, industrial segment sales growth for the back half of the fiscal year will be in the low-single-digit range, with the help from recent acquisitions," stated Sullivan.

"We continue to expect mid-single-digit range growth in our specialty segment by these predominately U.S.-based niche businesses as they gain market share. In the consumer segment, we are expecting a solid back half to fiscal 2017, with overall growth in the mid-single-digit range, including recent acquisitions," he stated.

"Due to further declines in the euro and British pound versus the U.S. dollar, we are anticipating an increase in currency headwinds for the fiscal year from our original estimate of $0.06 per share to $0.10 per share, along with an increase in pension expense from our original $0.05 per share to $0.07 per share for the 2017 fiscal year. Recent acquisitions are expected to reduce EPS in the third quarter due to stepped-up inventory and other one-time transaction costs, but be accretive for the fourth quarter. We are anticipating a restructuring charge in Europe in the third quarter of fiscal 2017, which will reduce diluted earnings per share by approximately $0.05 per share. As a result, we are revising our EPS full-year guidance to a range of $1.54 to $1.64 per diluted share, which includes the $0.09 per share Flowcrete Middle East charge, the $0.94 per share Kirker charge, the third-quarter estimated restructuring charge of $0.05 per share, as well as $0.04 per share of higher currency headwinds and $0.02 per share of higher pension expense," Sullivan stated.

"Excluding the charge for the Kirker impairment, Flowcrete Middle East exit, and the estimated third-quarter restructuring in Europe, our fiscal 2017 full-year adjusted EPS guidance is $2.62 to $2.72," stated Sullivan.

Webcast and Conference Call Information

Management will host a conference call to discuss these results beginning at 10:00 a.m. EST today. The call can be accessed by dialing 888-771-4371 or 847-585-4405 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. EST today until 11:59 p.m. EST on January 12, 2017. The replay can be accessed by dialing 888-843-7419 or 630-652-3042 for international callers. The access code is 43806016. 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 and do-it-yourselfers for home maintenance and improvement and by hobbyists. Consumer brands include Rust-Oleum, DAP, 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 include Day-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, at 330-273-5090 or bslifstein@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, a non-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 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; 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, 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



Six Months Ended







November 30,



November 30,







2016


2015



2016


2015













Net Sales


$         1,190,770


$         1,155,984



$         2,442,833


$         2,398,510

Cost of sales


669,089


662,050



1,369,110


1,371,618

Gross profit


521,681


493,934



1,073,723


1,026,892

Selling, general & administrative expenses


419,494


352,594



803,579


725,448

Goodwill and other intangible asset impairments


188,298





188,298



Interest expense


22,905


22,478



45,683


44,938

Investment (income), net


(2,416)


(1,100)



(6,254)


(5,168)

Other expense (income), net


257


(299)



799


(788)

(Loss) income before income taxes


(106,857)


120,261



41,618


262,462

(Benefit) provision for income taxes


(36,601)


36,112



(1,520)


77,951

Net (loss) income


(70,256)


84,149



43,138


184,511

Less:  Net income attributable to noncontrolling interests


670


716



1,295


1,263

Net (loss) income attributable to RPM International Inc.
Stockholders


$             (70,926)


$              83,433



$              41,843


$            183,248















(Loss) Earnings per share of common stock attributable to











RPM International Inc. Stockholders:










Basic


$                 (0.54)


$                  0.63



$                  0.32


$                  1.39

Diluted


$                 (0.54)


$                  0.62



$                  0.32


$                  1.36















Average shares of common stock outstanding - basic 


130,695


129,398



130,647


129,723

Average shares of common stock outstanding - diluted


130,695


136,734



130,647


137,072

 

 

 

SUPPLEMENTAL SEGMENT INFORMATION

IN THOUSANDS

(Unaudited)










































































































Three Months Ended



Six Months Ended











November 30,



November 30,











2016


2015



2016


2015





Net Sales:


















Industrial Segment


$            633,429


$            623,305



$         1,309,269


$         1,300,413






Specialty Segment


183,567


173,625



359,903


343,486






Consumer Segment


373,774


359,054



773,661


754,611






     Total


$         1,190,770


$         1,155,984



$         2,442,833


$         2,398,510























Income Before Income Taxes (a):















Industrial Segment















     Income Before Income Taxes (b)


$              50,291


$              64,008



$            139,557


$            148,476






     Interest (Expense), Net (c)


(1,906)


(1,558)



(3,743)


(3,081)






     EBIT (d)


52,197


65,566



143,300


151,557






       Charge to exit Flowcrete Middle East (e)


12,275





12,275








       Adjusted EBIT


$              64,472


$              65,566



$            155,575


$            151,557
























Specialty Segment















     Income Before Income Taxes (b)


$              31,160


$              28,278



$              61,664


$              54,767






     Interest Income, Net (c)


137


222



290


442






     EBIT (d)


$              31,023


$              28,056



$              61,374


$              54,325
























Consumer Segment















     (Loss) Income Before Income Taxes (b)


$           (140,575)


$              65,429



$             (70,487)


$            131,552






     Interest (Expense) Income, Net (c)


(19)


42



(22)


100






     EBIT (d)


(140,555)


65,387



(70,465)


131,452






       Kirker impairment (f)


188,298





188,298








       Reversal of Kirker earnout (g)




(14,500)





(14,500)






       Adjusted EBIT


$              47,743


$              50,887



$            117,833


$            116,952
























Corporate/Other















     (Expense) Before Income Taxes (b)


$             (47,733)


$             (37,454)



$             (89,116)


$             (72,333)






     Interest (Expense), Net (c)


(18,701)


(20,084)



(35,954)


(37,231)






     EBIT (d)


$             (29,032)


$             (17,370)



$             (53,162)


$             (35,102)
























     Consolidated















          (Loss) Income Before Income Taxes (b)


$           (106,857)


$            120,261



$              41,618


$            262,462






          Interest (Expense), Net (c)


(20,489)


(21,378)



(39,429)


(39,770)






          EBIT (d)


(86,368)


141,639



81,047


302,232






       Charge to exit Flowcrete Middle East (e)


12,275





12,275








       Kirker impairment (f)


188,298





188,298








       Reversal of Kirker earnout (g)




(14,500)





(14,500)






       Adjusted EBIT


$            114,205


$            127,139



$            281,620


$            287,732









































(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 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.

 

 

SUPPLEMENTAL INFORMATION

RECONCILIATION OF "REPORTED" TO "ADJUSTED" AMOUNTS

(Unaudited)






































































Three Months Ended



Six Months Ended







November 30,



November 30,







2016


2015



2016


2015
















Reconciliation of Reported Earnings (Loss) per Diluted Share
to Adjusted Earnings per Diluted Share:











Reported (Loss) Earnings per Diluted Share


$                 (0.54)


$                  0.62



$                  0.32


$                  1.36


       Charge to exit Flowcrete Middle East (e)


0.09





0.09




       Kirker impairment (f)


0.97





0.94




       Reversal of Kirker earnout (g)




(0.07)





(0.07)


Adjusted Earnings per Diluted Share


$                  0.52


$                  0.55



$                  1.35


$                  1.29















(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.































































Fiscal Year Ending












May 31, 2017







Estimated Full-Year Earnings Per Share Reconciliation:


Low End


High End





















Fiscal 2017 EPS issued July 2016





$                  2.68


$                  2.78







Additional foreign currency headwind





(0.04)


(0.04)







Additional pension expense





(0.02)


(0.02)







Revised 2017 EPS excluding Kirker, Middle East/Europe charges

2.62


2.72







Kirker impairment charge





(0.94)


(0.94)







Flowcrete Middle East charge





(0.09)


(0.09)







Estimated third-quarter restructuring charge in Europe



(0.05)


(0.05)







Revised 2017 EPS 





$                  1.54


$                  1.64






 

 

 

CONSOLIDATED BALANCE SHEETS







IN THOUSANDS







(Unaudited)










November 30, 2016


November 30, 2015


May 31, 2016









Assets







Current Assets








Cash and cash equivalents


$             205,907


$             190,609


$             265,152


Trade accounts receivable


881,723


841,924


987,692


Allowance for doubtful accounts


(40,909)


(25,110)


(24,600)


Net trade accounts receivable


840,814


816,814


963,092


Inventories


762,167


710,282


685,818


Deferred income taxes


-


28,620


-


Prepaid expenses and other current assets


232,217


262,096


221,286


Total current assets


2,041,105


2,008,421


2,135,348









Property, Plant and Equipment, at Cost


1,353,282


1,262,062


1,344,830


Allowance for depreciation


(714,353)


(687,426)


(715,377)


Property, plant and equipment, net


638,929


574,636


629,453

Other Assets








Goodwill


1,085,763


1,187,204


1,219,630


Other intangible assets, net of amortization


521,198


577,324


575,401


Deferred income taxes, non-current


59,619


2,902


19,771


Other


200,847


155,209


185,366


Total other assets


1,867,427


1,922,639


2,000,168









Total Assets


$          4,547,461


$          4,505,696


$          4,764,969









Liabilities and Stockholders' Equity







Current Liabilities








Accounts payable


$             429,941


$             396,896


$             500,506


Current portion of long-term debt


3,880


2,593


4,713


Accrued compensation and benefits


126,097


119,482


183,768


Accrued losses


33,846


22,468


35,290


Other accrued liabilities


292,849


197,229


277,914


Total current liabilities


886,613


738,668


1,002,191









Long-Term Liabilities








Long-term debt, less current maturities


1,634,967


1,660,935


1,635,260


Other long-term liabilities


701,091


732,467


702,979


Deferred income taxes


41,456


81,402


49,791


Total long-term liabilities


2,377,514


2,474,804


2,388,030


   Total liabilities


3,264,127


3,213,472


3,390,221


Commitments and contingencies







Stockholders' Equity








Preferred stock; none issued








Common stock (outstanding 133,576; 133,318; 132,944)

1,336


1,333


1,329


Paid-in capital


938,963


887,650


921,956


Treasury stock, at cost


(215,936)


(170,220)


(196,274)


Accumulated other comprehensive (loss)


(555,541)


(477,470)


(502,047)


Retained earnings


1,112,610


1,048,968


1,147,371


     Total RPM International Inc. stockholders' equity

1,281,432


1,290,261


1,372,335


Noncontrolling interest


1,902


1,963


2,413


     Total equity


1,283,334


1,292,224


1,374,748









Total Liabilities and Stockholders' Equity


$          4,547,461


$          4,505,696


$          4,764,969

 

 

CONSOLIDATED STATEMENTS OF CASH FLOWS




IN THOUSANDS






(Unaudited)









Six Months Ended





November 30,





2016


2015








Cash Flows From Operating Activities:





  Net income



$         43,138


$        184,511

  Adjustments to reconcile net income to net





          cash provided by (used for) operating activities:





               Depreciation



35,568


33,509

               Amortization



22,111


22,144

               Goodwill and other intangible asset impairments

188,298



               Reversal of contingent consideration obligations




(14,500)

               Deferred income taxes


(59,363)


(680)

               Stock-based compensation expense


17,013


15,524

               Other non-cash interest expense


4,964


4,862

               Realized (gain) on sales of marketable securities

(3,698)


(4,418)

               Other 



(47)


1,441

  Changes in assets and liabilities, net of effect





          from purchases and sales of businesses:





               Decrease in receivables


110,871


117,358

               (Increase) in inventory


(81,586)


(49,781)

               (Increase) decrease in prepaid expenses and other




                    current and long-term assets


(20,876)


4,617

               (Decrease) in accounts payable


(69,518)


(105,841)

               (Decrease) in accrued compensation and benefits

(55,662)


(45,649)

               (Decrease) increase in accrued losses


(899)


715

               Increase in other accrued liabilities


28,057


7,375

               Other



361


(4,114)

                    Cash Provided By Operating Activities


158,732


167,073

Cash Flows From Investing Activities:





     Capital expenditures



(48,049)


(31,295)

     Acquisition of businesses, net of cash acquired


(65,201)


(12,006)

     Purchase of marketable securities


(25,142)


(14,213)

     Proceeds from sales of marketable securities


24,588


11,737

     Other




956


5,355

                    Cash (Used For) Investing Activities


(112,848)


(40,422)

Cash Flows From Financing Activities:





     Additions to long-term and short-term debt


76,369


38,765

     Reductions of long-term and short-term debt


(73,588)


(18,774)

     Cash dividends



(76,604)


(71,276)

     Shares of common stock repurchased and returned for taxes

(19,663)


(45,292)

     Payments of acquisition-related contingent consideration

(4,130)


(1,631)

     Other




(1,365)


270

                    Cash (Used For) Financing Activities


(98,981)


(97,938)








Effect of Exchange Rate Changes on Cash and 




     Cash Equivalents

(6,148)


(12,815)








Net Change in Cash and Cash Equivalents

(59,245)


15,898








Cash and Cash Equivalents at Beginning of Period

265,152


174,711








Cash and Cash Equivalents at End of Period

$        205,907


$        190,609

 

 

SOURCE RPM International Inc.


Source: RPM International Inc.