Frequently Asked Questions

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1. What were RPM’s fiscal 2017 third-quarter results?

RPM reported record sales for its fiscal 2017 third quarter ended February 28, 2017. 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 net income declined versus the prior-year period primarily due to a pre-tax charge of $4.9 million for an intangible impairment on the Restore product line and a pre-tax charge of $4.2 million for the closing of a European manufacturing facility.

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% from year-ago IBT of $21.9 million. Consolidated earnings before interest and taxes (EBIT) were $37.1 million, down 11.9% from year-ago EBIT of $42.1 million.

Further details of RPM's most recent financial results can be found in the company's earnings news releases, as well as in its 10-K, 10-Q and other periodic filings with the Securities and Exchange Commission.

2. What were RPM’s fiscal 2017 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 to year-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.

RPM businesses serving the U.S. commercial construction market again experienced solid organic growth. Most businesses in Europe were up in the low- to mid-single-digit range in local currencies and current-year acquisitions contributed to the segment’s overall sales growth.

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% from year-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 RPM’s specialty segment businesses, which cut across a broad range of industries, and earnings were negatively impacted by a European facility closure amounting to $4.2 million. In this traditionally slow quarter, the segment didn’t generate enough top-line momentum to create positive leverage through its fixed operating cost structure.

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% from year-ago IBT of $38.8 million. Consumer segment EBIT declined 22.9% to $29.9 million from $38.8 million a year ago.

Excluding the 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 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 a step-up in inventory. Looking ahead, management is encouraged by housing market activity, retail customer results and the acceptance of recently introduced new products

Further details of RPM's most recent financial results can be found in the company's earnings news releases, as well as in its 10-K, 10-Q and other periodic filings with the Securities and Exchange Commission.

3. What were RPM’s fiscal 2017 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 the year-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% from year-ago IBT of $284.4 million. Consolidated EBIT was $118.2 million, down 65.7% from year-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% from year-ago EBIT of $329.9 million.  

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% from year-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% from year-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% from year-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 to year-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% from year-ago EBIT of $155.7 million.    

Further details of RPM's most recent financial results can be found in the company's earnings news releases, as well as in its 10-K, 10-Q and other periodic filings with the Securities and Exchange Commission.

4. What is the status of RPM's capital structure, cash flow and liquidity?

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.

At February 28, 2017, RPM’s total liquidity, including cash and long-term committed available credit, was $620.0 million. In March 2017, RPM issued $450 million in bonds to pay down existing balances and free up available borrowings on our revolving credit facility.

5. What is RPM's business outlook?

In the industrial segment, management expects mid-single-digit sales growth during the fiscal 2017 fourth quarter. This is predicated on continued strength in RPM 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.

The specialty segment is expected to grow in the low- to mid-single-digit range during the fourth quarter, driven by a balance between organic and acquisition growth.

RPM’s consumer segment fourth-quarter sales should increase in the mid-single-digit range. Third-quarter acquisitions in the segment will help balance out underperformance at the Kirker business, which remains challenged.

As-reported EPS guidance for the full 2017 fiscal year is expected to be $1.54 to $1.64. In January, management provided full-year as-adjusted EPS guidance of $2.62 to $2.72. This as-adjusted EPS guidance has been reduced by $0.05 per share to $2.57 to $2.67 due to third-quarter charges for the Restore product line intangible impairment and the European facility closure. 

6. What is RPM's long-range strategic plan?

RPM has embarked on a five-year strategic plan, set to conclude on May 31, 2020. RPM’s revenue target is for $7 billion in annual sales at that time, with a somewhat higher improvement in net income and diluted earnings per share. Execution of this plan will include:

  • - Continuing to grow organically by maintaining RPM’s disciplined planning process, increasing its internal growth investments and capitalizing on its strong position in maintenance and repair
  • - Continuing its acquisition program focused on synergistic product lines and entrepreneurial freestanding businesses
  • - Accelerating international expansion
  • - Leveraging sales growth to the bottom line, driving continued income, cash flow and dividend growth
7. Does RPM plan to continue to grow through acquisitions?

Yes. RPM continues to be active in pursuing acquisitions of free-standing entrepreneurial companies and product lines that complement its portfolio of specialty coatings and sealants businesses. Over the last 30 years, RPM has completed more than 150 acquisitions, with nearly 70 of these transactions being completed during the last decade.

During the fiscal 2017 third quarter, RPM acquired five business with combined annual sales of nearly $170 million. These businesses included:

  • - SPS Group (SPS), a Dutch decorative and specialty coatings company with annual net sales of approximately $60 million;
  • - The foam division of Clayton Corporation, best known for its consumer polyurethane foam brand Touch 'N Foam, which has annual net sales of approximately $60 million;
  • - Prochem, a manufacturer of professional equipment and chemicals for cleaning and restoring flooring surfaces with annual net sales of approximately $22 million;
  • - Eighty percent of Arnette Polymers, LLC, a manufacturer of specialty chemical raw materials. Excluding sales to the several RPM subsidiaries it currently serves, Arnette Polymers has annual net sales of nearly $20 million; and
  • - Prime Resins, a $7 million manufacturer of specialty chemicals and equipment for infrastructure construction and repair.

RPM’s acquisition philosophy, initiated by Thomas C. Sullivan, who ran RPM as chairman and CEO from 1971 until his retirement from those positions in 2002 and remained on the board as chairman emeritus until his retirement at the annual meeting in 2016, is very entrepreneurial in nature. RPM seeks good companies, creates an atmosphere where the founders and managers stay with their companies, and provides them with resources to grow their businesses. This entrepreneurial culture has been a key attraction to business owners in the industry, as demonstrated by the fact that today about one-third of RPM’s operating companies are managed by their founders, second- or third-generation family members or the managers they trusted to lead their companies. View this video to learn more about RPM’s approach to acquisitions.

8. What is RPM's dividend record?

RPM has increased the cash dividend paid to its stockholders for 43 consecutive years, placing it in an elite category of less than a half percent of all publicly traded U.S. companies. Only 44 of the 19,000 U.S. public companies have consecutively paid an increasing annual dividend for this period of time or longer, according to the Mergent Handbook of Dividend Achievers.

RPM’s last dividend increase was on October 6, 2016, when the board of directors raised RPM's quarterly cash dividend to $0.30 per common share, a 9.1% increase over the previous quarterly dividend rate of $0.275 per common share.

Annually increasing its dividend is a long-standing RPM hallmark. Given current uncertain economic conditions, the company is pleased that its strong cash flow has allowed it to continue this practice and deliver stockholders a positive cash return on their investment. For the ten-year and period ended May 31, 2016, RPM's return to shareholders has outperformed the S&P 500 Index by 86%, its current peer group by 24% and its prior peer group by 20%, including the assumed reinvestment of dividends. The peer group changed in fiscal 2016 as a result of industry consolidation. RPM's annual dividend growth has been a critical element of its ability to significantly outperform both this broad market index and its peer group, and to deliver value to RPM shareholders.

9. When is the RPM annual stockholders' meeting?
RPM's annual meeting is typically held the first week in October. The next meeting will be held Thursday, October 5, 2017, at the Holiday Inn located at 15471 Royalton Road in Strongsville, Ohio.
10. When will your annual report and proxy be mailed?

With the fiscal year ending on May 31, the annual report and proxy are typically mailed in late August each year. If you would like a copy of the current annual report, you may request one through the Information Request section of this website.

11. How many RPM shares are outstanding?
As of February 28, 2017, RPM's actual shares outstanding were 133.6 million, while average shares outstanding for computation of fiscal 2017 third-quarter basic and diluted earnings per share were 130.7 million and 130.7 million, respectively.
12. How many employees does RPM have?
RPM's operating companies employ more than 13,000 people worldwide, plus hundreds of independent sales and technical representatives.
13. Are RPM products sold in other countries?
Products manufactured by RPM's numerous operating companies are sold in approximately 170 countries and territories.
14. Can I buy stock directly through the company?

Yes, RPM does offer direct purchase of its stock through the Direct Stock Purchase Plan administered by Wells Fargo. Your initial purchase of RPM stock must be at least $200. After that, additional shares can be purchased, commission-free, at a minimum of $25 and a maximum of $5,000 per month. Contact Wells Fargo at 1-800-988-5238 for an enrollment form or download one from Shareowner Online.

15. Does RPM have a Dividend Reinvestment Plan?

Yes. RPM maintains a Dividend Reinvestment Plan whereby cash dividends, plus additional investment of up to $5,000 per month, may be invested in additional RPM shares at no commission cost or service fee. Details of the Plan are available online or by contacting RPM at 1-800-776-4488 or Wells Fargo at 1-800-988-5238 (or 651-450-4064 outside the U.S.). Only shareholders of record may participate in the Plan. Shares owned by you but held by your broker in "street name" must be transferred into your name before you can enroll in the plan.

16. Who should I contact regarding questions on my RPM account or to find out how many shares I own?

Please contact our stock transfer agent, Wells Fargo Bank, at 1-800-988-5238 (or 651-450-4064 outside the U.S.), and they will be happy to assist you. You can also obtain information online at www.shareowneronline.com.

17. How often is stock purchased through the Dividend Reinvestment Plan?
RPM stock is purchased within five days of receipt of your check. Timing of your cash payment should be made accordingly. Your check should be made payable to Shareowner Services and mailed to: Wells Fargo Shareowner Services, P.O. Box 64854, St. Paul, MN 55164-0854. Certified/overnight mail can be sent to: Wells Fargo Shareowner Services, 1110 Centre Pointe Curve, Suite 101, Mendota Heights, MN 55120-4100. The same amount of money need not be invested each month and there is no obligation to make voluntary cash payment each month.
18. Can I make voluntary cash payments by having my checking or savings account automatically debited?
Yes. This service allows you to arrange for automatic monthly or quarterly investments in RPM stock by taking the funds directly from your checking or savings account and investing them in RPM stock. There is no cost to you for this service. To initiate automatic deductions, contact Wells Fargo Bank at 1-800-988-5238 (or 651-450-4064 outside the U.S.) to request an authorization form to be completed by you and mailed to Wells Fargo Bank.
19. Can my cash dividend check be direct deposited into my bank account?
Yes. Shareholders of record may have their dividends electronically deposited directly into their checking or savings account through the Direct Deposit Program at no charge. For information regarding this service, please contact Wells Fargo Bank at 1-800-988-5238 (or 651-450-4064 outside the U.S.).
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