Frequently Asked Questions

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1. What were RPM’s fiscal 2018 fourth-quarter results?

RPM reported record sales for its fiscal fourth quarter and year ended May 31, 2018. Net income and diluted earnings per share declined in the fourth quarter due to higher raw material costs and extended winter weather, which inhibited outdoor projects, especially in the company’s consumer segment. In addition, the company recorded restructuring and other charges to reduce expenses and position RPM for long-term growth, as well as inventory-related charges in its consumer segment tied to a strategic shift in direction.

Net sales for the fourth-quarter increased 4.4% to $1.56 billion from $1.49 billion a year ago. Net income in the quarter decreased to $85.7 million from $128.1 million reported in the fourth quarter of fiscal 2017. Diluted earnings per share (EPS) were $0.63 compared with $0.94 in the year-ago quarter. Income before income taxes (IBT) was $117.9 million versus $185.7 million a year ago. Consolidated earnings before interest and taxes (EBIT) were $135.0 million compared with $209.1 million a year ago. The fourth quarter of fiscal 2018 included restructuring and other charges, including inventory SKU rationalization, of $62.2 million. The fourth quarter of fiscal 2017 included a severance charge of $15.0 million. Excluding the charges in both periods, net income was $142.1 million in fiscal 2018 versus $138.3 million in fiscal 2017 and EBIT was $197.3 million compared with $224.1 million a year ago. Diluted EPS excluding the charges increased 2.9% to $1.05 from $1.02 a year ago.

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 2018 fourth-quarter segment sales and earnings?

Industrial segment sales for the fiscal 2018 fourth quarter were up 10.8% to $812.9 million from $733.5 million a year ago. Organic sales improved 6.2%, while acquisition growth added 1.7%. Foreign currency translation contributed 2.9% to sales. Industrial segment IBT increased 4.7% to $96.4 million from $92.1 million a year ago. EBIT was up 6.4% to $99.3 million from $93.4 million in the fiscal 2017 fourth quarter. The fourth quarter included restructuring and related charges of $10.0 million in fiscal 2018 and a $7.7 million severance charge in fiscal 2017. Excluding these charges, industrial segment EBIT was $109.3 million, up 8.1% from $101.1 million a year ago.

Net sales in RPM’s consumer segment were $548.4 million compared with $565.3 million reported in the fiscal 2017 fourth quarter. Organic sales were down 5.4%, while acquisition growth added 1.2% and foreign exchange translation contributed 1.2% to sales. Consumer segment IBT was $25.3 million compared with $99.4 million in the prior year. EBIT in the fiscal 2018 fourth quarter was $25.5 million versus $99.6 million in fiscal 2017. The segment recorded $47.3 million in restructuring and inventory-related charges in the fiscal 2018 fourth quarter and a $4.3 million severance charge in fiscal 2017. Excluding these charges, EBIT was $72.8 million compared with $103.9 million a year ago.

Fourth-quarter sales in the company’s specialty segment increased 1.5% to $196.9 million from $194.0 million in fiscal 2017. Organic sales declined 0.6%, but were offset by acquisition growth of 0.6% and the positive impact of 1.5% in foreign currency translation. Specialty segment IBT increased 5.3% to $32.9 million from $31.2 million last year. EBIT increased 3.8% to $32.3 million from $31.1 million in the prior period. The segment reported a $1.4 million enterprise resource planning (ERP) consolidation charge in the fourth quarter of fiscal 2018 and a $2.9 million severance charge in the fourth quarter of fiscal 2017. Excluding these charges, specialty segment EBIT was $33.7 million versus $34.0 million in the prior year.

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

For the 2018 fiscal year, cash from operations was $390.4 million compared to $386.1 million in fiscal 2017. Capital expenditures during fiscal 2018 of $114.6 million compare to $126.1 million over the same time in fiscal 2017. Total debt at the end of fiscal 2018 was $2.17 billion compared to $2.09 billion a year ago. RPM’s net (of cash) debt-to-total capitalization ratio was 54.2% compared to 54.8% at May 31, 2017. RPM’s total liquidity at May 31, 2018, including cash and long-term committed available credit, was $1.0 billion.

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 were RPM’s fiscal 2018 full-year results?

Fiscal 2018 consolidated full-year net sales increased 7.3% to $5.32 billion from $4.96 billion in fiscal 2017. Net income increased 85.8% to $337.8 million from $181.8 million reported in fiscal 2017. Diluted earnings per share of $2.50 were up 83.8% from $1.36 a year ago. IBT was up 70.7% to $417.0 million from $244.3 million in fiscal 2017. Consolidated EBIT was up 53.1% to $501.2 million from $327.3 million last year. Fiscal 2018 included restructuring and other charges, including inventory SKU rationalization, of $62.2 million. Fiscal 2017 included a $12.3 million charge for closing a Middle East facility, a severance charge of $15.0 million and a goodwill and an intangible impairment charge of $188.3 million. Excluding these items, net income for the year increased 18.3% to $394.2 million from $333.4 million in fiscal 2017 and diluted EPS increased 18.2% to $2.92 from $2.47 last fiscal year. After excluding these same items, EBIT increased 3.8% for fiscal 2018 to $563.4 million from $542.9 million a year ago.

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.

5. What were RPM’s fiscal 2018 full-year segment results?

Fiscal 2018 sales for RPM's industrial segment improved 9.8% to $2.81 billion from $2.56 billion in fiscal 2017. Organic sales increased 4.4%, with acquisition growth contributing 3.0%. Foreign currency translation positively impacted sales by 2.4%. The industrial segment’s IBT increased 11.3% to $270.8 million from $243.3 million in fiscal 2017. Industrial segment EBIT improved 11.9% to $281.3 million from $251.3 million in fiscal 2017. The segment reported restructuring and related charges of $10.0 million in fiscal 2018, as well as fiscal 2017 charges of $12.3 million to exit a Middle East business and $7.7 million for severance expenses. Excluding these charges, industrial segment EBIT increased 7.4% to $291.3 million from $271.3 million a year ago.

Consumer segment sales for fiscal 2018 increased 4.4% to $1.75 billion from $1.68 billion in fiscal 2017. Organic sales declined by 1.7%, which was offset by the contribution from acquisitions of 5.2% and the positive impact of foreign exchange of 0.9%. IBT increased 192.7% to $171.9 million from $58.7 million in fiscal 2017. Consumer segment EBIT increased 192.3%, to $172.6 million from $59.0 million a year ago. The segment reported charges of $47.3 million in the fiscal 2018 fourth quarter, as well as the fiscal 2017 goodwill and intangible impairment charge of $188.3 million in the second quarter and a severance charge of $4.3 million in the fourth quarter. Excluding these charges, consumer segment EBIT was $219.8 million versus $251.6 million a year ago.

Fiscal 2018 specialty segment sales increased 5.5% to $752.5 million from $713.6 million in fiscal 2017. Organic sales improved 2.0% and acquisitions added 2.6%. Foreign currency translation increased sales by 0.9%. Specialty segment IBT was up 14.3% to $123.3 million from $107.9 million a year ago. EBIT was up 14.0% to $122.4 million from $107.4 million in fiscal 2017. The segment reported charges of $1.4 million in the fiscal 2018 fourth quarter, as well as the fiscal 2017 severance charge of $2.9 million in the fourth quarter. Excluding these charges, specialty segment EBIT increased 12.3% to $123.8 million in fiscal 2018 from $110.3 million a year ago.

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.

6. What is RPM's business outlook?

During fiscal 2019, RPM expects the challenging raw material environment to continue, perpetuating the stress on gross profit margins. All of the company’s businesses are aggressively pursuing price increases and it expects to see some of that benefit in its consumer segment this fiscal year.
Management expects the following fiscal 2019 sales growth from its reportable business segments:

  • - industrial segment: mid-single-digit growth
  • - consumer segment: mid- to upper-single-digit growth
  • - specialty segment: low-single-digit growth

Although, top-line sales will continue to be solid, the first quarter is expected to be the most difficult in terms of bottom-line leverage for several reasons. In consumer, there will be a higher first quarter promotional advertising and load-in spend to support recent market share gains. Furthermore, the gap between current price increases and raw material inflation is at its peak, with the consumer businesses finally realizing some of its price increases now. In the specialty segment, the first quarter of fiscal 2019 is the last quarter of negative comparisons relating to the NatureSeal patent expiration last August.

During fiscal 2019, RPM intends to adjust out charges relating to its operational improvement initiative to provide better clarity on the performance of its core businesses. The company has committed to announcing a comprehensive update to its operating improvement initiative, which it calls the 2020 MAP to Growth, prior to the end of November and has elected not to provide EPS guidance as it navigates through this transitional period.

Further details 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.

7. What does RPM’s agreement with Elliott Management entail?

On June 28, 2018, following constructive dialogue with Elliott Management, RPM announced several new initiatives designed to bolster operational and financial improvement and enhance shareholder value. The initiatives include: the naming of two new independent directors, Kirk Andrews and John Ballbach, to RPM’s Board; the creation of a new operating improvement committee of the Board, specifically focused on supporting operational improvement and value creating initiatives; the engagement of consulting firm AlixPartners to work with management in reviewing additional opportunities for operational improvement; and the proposal of an amendment to the company’s charter that would lead to an annually elected board. See the press release for more information.

8. In what areas is RPM seeking to improve its performance?
RPM had already commenced in 2017 a plan to improve margins and reduce cost. The company’s current focus is on further progress in those areas as well as a focus on optimizing its balance sheet, streamlining working capital and implementing new capital allocation guidelines and capital return plans.
9. How did the agreement with Elliott Management come about?
RPM and Elliott share a common interest in improving RPM’s operational and financial performance. Management engaged in constructive dialogue with Elliott and is pleased to reach agreement on various initiatives that were announced on June 28, 2018. These initiatives build on actions that RPM was already taking to drive greater operating efficiency and enhance shareholder value.
10. 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, sealants and construction chemicals businesses. Over the last 30 years, RPM has completed more than 170 acquisitions, with over 70 of these transactions being completed during the last decade.

During the fourth quarter, RPM’s Rust-Oleum Group acquired Miracle Sealants Company, a manufacturer of sealers, cleaners, polishes and related products primarily for tile and natural stone. Based in Arcadia, Calif., Miracle Sealants has annual net sales of approximately $25 million. A leading brand with professional installers for over 30 years, Miracle Sealants has broad national distribution in tile shops across the U.S., as well as big box retailers, such as Home Depot, Lowes and Menards. Among the company’s leading products is 511 Impregnator, the industry standard in hard surface floor sealers.

On July 11, 2018, RPM acquired the stock of Kemtile Limited. Headquartered in the UK, Kemtile is a hygienic flooring solutions provider, specializing in the design, supply and fitting of branded flooring for the UK food and beverage industry. The company has long standing relationships with architects, structural designers and specialist building contractors in this space, and it provides a range of flooring solutions, including seamless resin flooring or ceramic tiles, drainage solutions, stainless steel kerbs, guardrails and wall protection systems.

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.

11. What is RPM's dividend record?

RPM has increased the cash dividend paid to its stockholders for 44 consecutive years, placing it in an elite category of less than a half percent of all publicly traded U.S. companies. Only 41 other companies besides RPM have consecutively paid an increasing annual dividend for this period of time or longer, according to the Mergent Handbook of Dividend Achievers. During this timeframe, the company has paid approximately $2.2 billion in cash dividends to its stockholders.

RPM’s last dividend increase was on October 5, 2017, when the board of directors raised RPM's quarterly cash dividend to $0.32 per common share, a 6.7% increase over the previous quarterly dividend rate of $0.30 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, 2018, RPM's return to shareholders has outperformed the S&P 500 Index by 16%, including the assumed reinvestment of dividends. RPM's annual dividend growth has been a critical element of its ability to significantly outperform this broad market index and to deliver value to RPM shareholders.

12. When is the RPM annual stockholders' meeting?

RPM's annual meeting of shareholders is typically held the first week in October. The next meeting will be held Thursday, October 4, 2018 at 2:00 p.m. ET.
IMPORTANT! Please note there is a new venue for 2018:

Crowne Plaza Cleveland Airport Hotel
7230 Engle Road
Middleburg Heights, OH 44130c

A downloadable map and directions are available on the RPM website.

13. 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.

14. How many RPM shares are outstanding?
As of May 31, 2018, RPM's actual shares outstanding were 133.6 million, while average shares outstanding for computation of fiscal 2018 basic and diluted earnings per share were 131.2 million and 137.2 million, respectively.
15. How many employees does RPM have?
RPM's operating companies employ more than 14,500 people worldwide, plus hundreds of independent sales and technical representatives.
16. Are RPM products sold in other countries?
Products manufactured by RPM's numerous operating companies are sold in approximately 170 countries and territories.
17. Will I be impacted by the change of stock transfer agent from Wells Fargo to Equiniti Trust Company?

Note that the owner of our stock transfer agent has changed from Wells Fargo Bank, N.A. to Equiniti Trust Company. You will be serviced by Equiniti Trust Company going by the name EQ. We expect that you will continue to receive the same high level of service you had received before.

No action is required on your part. You will begin to receive communication from EQ instead of Wells Fargo. If you receive emails from the stock transfer agent, you will receive these from a new web address (eq-us.com).

Visit www.shareowneronline.com and the frequently asked questions for more information.

18. 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 EQ. 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 EQ Shareowner Services at 1-800-988-5238 for an enrollment form or download one from Shareowner Online.

19. 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 EQ Shareowner Services 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.

20. 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, EQ, 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.

21. 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: EQ Shareowner Services, P.O. Box 64854, St. Paul, MN 55164-0854. Certified/overnight mail can be sent to: EQ 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.
22. 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 EQ 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 EQ Shareowner Services.
23. 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 EQ at 1-800-988-5238 (or 651-450-4064 outside the U.S.).
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