Frequently Asked Questions

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

RPM reported record sales for its fiscal 2017 fourth quarter ended May 31, 2017. Net sales grew 4.6% to $1.49 billion in the fiscal 2017 fourth quarter from $1.43 billion in the fiscal 2016 fourth quarter.

Net income of $128.1 million in the fiscal 2017 fourth quarter decreased 16.2% from $152.9 million reported a year ago. Fourth-quarter net income declined versus the prior-year period primarily due to a significantly higher effective tax rate and a one-time severance charge of $15.0 million.

Fourth-quarter earnings per diluted share were $0.94, down 16.8% from the $1.13 reported last year. Income before income taxes (IBT) was $185.7 million, down 6.7% from year-ago IBT of $199.1 million. Consolidated earnings before interest and taxes (EBIT) were $209.1 million, down 5.1% from year-ago EBIT of $220.4 million. Excluding the $15.0 million severance charge, EBIT was $224.1 million, up 1.7% from the fourth quarter of fiscal 2016.

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 fourth-quarter segment sales and earnings?

Industrial segment sales increased 5.0% to $733.5 million from $698.6 million in the fiscal 2016 fourth quarter. Organic sales improved 2.2%, while acquisitions added 4.3%. Foreign currency translation negatively impacted sales by 1.5%. IBT was $92.1 million, compared to year-ago IBT of $108.2 million, down 14.9%. Industrial segment EBIT for the quarter of $93.4 million was down 14.9% from last year’s EBIT of $109.7 million. Excluding a severance charge of $7.7 million, EBIT was $101.1 million, down 7.9% from a year ago, when an $8.0 million gain was recognized on the acquisition of the remaining 51.0% of Dalian Paint Production Co., Ltd. in China.

The improvement in industrial sales was driven predominately by strong growth in the U.S. by the company’s high-performance polymer flooring and roofing businesses. European industrial business sales were up in the mid-single-digit range in local currencies. Sales of industrial segment products to the oil and gas industry were down in the mid-single-digit range, an improvement over double-digit declines over the past two years.

Fourth-quarter sales in the company’s specialty segment increased 5.4% to $194.0 million from $184.2 million a year ago. Organic sales increased 3.6% and acquisitions added 3.3%. Foreign currency translation negatively impacted sales by 1.5%. IBT was $31.2 million, up 0.6% from year-ago IBT of $31.1 million. Specialty segment EBIT increased 0.8% to $31.1 million from $30.9 million in the fiscal 2016 fourth quarter. Excluding a $2.9 million severance charge in the fourth quarter, specialty segment EBIT was $34.0 million, up 10.2% from the fourth quarter of fiscal 2016.

The specialty segment’s sales growth was driven by recent acquisitions and organic growth, primarily in the specialty cleaning products, building restoration and wood treatment businesses. 

Sales in RPM’s consumer segment increased 3.9% to $565.3 million from $543.8 million in the fiscal 2016 fourth quarter. Organic sales declined 1.0%, while acquisitions added 5.9%. Foreign currency translation negatively impacted sales by 1.0%. IBT was $99.4 million, up 1.6% from year-ago IBT of $97.9 million. Consumer segment EBIT improved 1.7% to $99.6 million from $98.0 million a year ago. Excluding a $4.3 million severance charge in the fourth quarter, consumer segment EBIT was $103.9 million, up 6.1% from a year ago. Included in the fiscal 2016 fourth quarter EBIT was a $9.3 million Restore product line legal settlement charge. 

In addition to continued underperformance at the Kirker nail enamel business, consumer segment sales were impacted by higher rainfall and cooler temperatures in the North American market during the fourth quarter, which slowed home maintenance and repair activities. The consumer segment also experienced 9.9% organic growth in the fourth quarter of fiscal 2016, making for tough comparisons. New management is in place at Kirker, and RPM believes that this business has now stabilized and can resume growth.
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 full-year results?

For the 2017 fiscal year, net sales grew 3.0% to $4.96 billion from $4.81 billion a year ago. Net income of $181.8 million declined 48.7% from net income of $354.7 million in fiscal 2016. Diluted earnings per share declined 48.3% to $1.36 from $2.63 in fiscal 2016. IBT was $244.3 million, down 49.5% from year-ago IBT of $483.5 million. Consolidated EBIT was $327.3 million, down 42.0% from year-ago EBIT of $564.8 million.

Fiscal 2017 results included a $188.3 million Kirker impairment charge, a $12.3 million charge related to the decision to exit Flowcrete Middle East and $15.0 million in severance charges in the fourth quarter. Fiscal 2016 results included a $14.5 million reversal of Kirker's final earnout accrual into income. Excluding these items, earnings per diluted share declined 3.9% from $2.57 per share in fiscal 2016 to $2.47 per share in fiscal 2017, while consolidated EBIT was $542.9 million, down 1.3% from year-ago EBIT of $550.3 million.  

Sales for RPM’s industrial segment increased 2.9%, to $2.56 billion from $2.49 billion in fiscal 2016. Organic sales increased 2.0%, while acquisitions added 2.9%. Foreign currency translation negatively impacted sales by 2.0%. IBT was $243.3 million, down 5.4% from year-ago IBT of $257.2 million. Industrial segment EBIT of $251.3 million was off 4.5% from EBIT of $263.3 million in fiscal 2016. Excluding the current-year Flowcrete Middle East charge and $7.7 million severance charge, industrial segment EBIT was $271.3 million, up 3.1% from year-ago EBIT.  

Specialty segment sales increased 4.2% to $713.6 million from $684.6 million in fiscal 2016. Organic sales increased 2.8% and acquisitions added 3.1%. Foreign currency translation negatively impacted sales by 1.7%. IBT was $107.9 million, up 0.3% from year-ago IBT of $107.5 million. Specialty segment EBIT improved 0.6% to $107.4 million from $106.7 million a year ago. Excluding the fourth-quarter severance charge of $2.9 million, specialty segment EBIT increased 3.3% to $110.3 million for the fiscal year.

In the consumer segment, fiscal 2017 sales were up 2.6% to $1.68 billion from $1.64 billion in fiscal 2016. Organic sales improved 0.6%, while acquisitions added 3.4%. Foreign currency negatively impacted sales by 1.4%. Consumer segment IBT declined 78.1% to $58.7 million from $268.2 million in fiscal 2016. Consumer segment EBIT declined 78.0% to $59.0 million from $268.2 million in fiscal 2016. Excluding the current-year Kirker impairment charge and severance charge of $4.3 million, along with the prior year’s Kirker earnout reversal, EBIT was $251.6 million, down 0.8% from year-ago EBIT of $253.7 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 fiscal 2017, cash from operations was $386.1 million, compared to $474.7 million in fiscal 2016. Capital expenditures during fiscal 2017 of $126.1 million compare to $117.2 million in fiscal 2016. Cash invested in acquisitions totaled $254 million. Additionally, RPM prepaid obligations to fund the 524(g) trust ($119.1 million) at the end of calendar 2017 and fiscal 2018 pension obligations ($52.8 million). Total debt at the end of fiscal 2017 was $2.09 billion, compared to $1.64 billion a year ago. RPM’s net (of cash) debt-to-total capitalization ratio was 54.8%, compared to 50.0% at May 31, 2016. At May 31, 2017, RPM’s total liquidity, including cash, cash equivalents and long-term committed available credit, was $1.15 billion.

5. What is RPM's business outlook?

During fiscal 2017, RPM completed nine acquisitions with annualized sales of approximately $220.0 million, which the company expects to add $0.10 per share in incremental EPS in fiscal 2018. Also, in fiscal 2017, the company took steps to reduce overall operating expenses and expects those actions to generate a net $0.10 per share increase in EPS in fiscal 2018. There also were several items that RPM incurred in its fiscal 2017 third quarter that are not expected to repeat in fiscal 2018. They were the Restore product line impairment charge of $0.03 per share, the European facility closure of $0.02 per share and higher acquisition-related expenses of $0.03 per share.

Looking to fiscal 2018, the company expects the industrial segment to benefit from steady economic activity in the North American commercial construction industry, combined with improving results in Europe. Therefore, RPM expects this segment to grow sales in the low-to-mid-single-digit range during fiscal 2018.

In the specialty segment, the company expects low-single-digit growth driven by fiscal 2017 acquisitions and organic growth led by the segment’s fluorescent pigment and wood treatment businesses. Partially offsetting positive results in the specialty segment in fiscal 2018 will be lost sales in the segment’s edible coatings business due to a patent expiration. 

In the consumer segment, RPM is expecting mid-single-digit growth due to meaningful contributions from fiscal 2017 acquisitions, favorable market conditions, along with new product introductions, market penetration and a stabilization of the Kirker business.

Based upon the growth expectations above, the company expects earnings per share for fiscal 2018 to be in the range of $2.85 to $2.95 per share. Throughout the year, it will be important to keep in mind the variability of the company’s year-over-year quarterly comparisons, in particular, the tax rate is estimated to be in line with fiscal 2017, but may fluctuate quarter-to-quarter. Related to this, in the first quarter of last year RPM had a very favorable tax adjustment, which is not expected to repeat, and which will negatively impact the first quarter of fiscal 2018 by approximately $0.03 per share. As outlined above, in the fiscal 2017 third quarter RPM identified, but did not adjust out, roughly $0.08 per share of non-operating, one-time items. These items should be added back to the fiscal 2017 base results for the company’s fiscal 2018 third quarter. Given the higher-than-normal tax rate in the fiscal 2017 fourth quarter, RPM would anticipate $0.05 per share benefit in the fiscal 2018 fourth quarter.

For the first quarter of fiscal 2018, in addition to the higher tax rate mentioned above, RPM expects higher raw material costs experienced in the fourth quarter to continue through the first quarter, as well as continued foreign currency headwinds, both translational and transactional. Also, most of RPM’s operating groups were on plan in the first quarter of fiscal 2017, before their results began to weaken, and the company’s Brazilian operation benefited in the first quarter last year when Brazil hosted the summer Olympics. As a result, RPM’s diluted EPS estimate for the first quarter of fiscal 2018 is $0.83 per share to $0.85 per share.

As the company looks to the balance of the 2018 fiscal year, raw material availability issues are improving and announced price increase actions are beginning to take hold. Additionally, RPM expects that foreign exchange for the last three quarters of the fiscal year will be neutral or slightly positive to the company’s results, unlike the significant negative impact it has had over the last three fiscal years. Based upon recent cost-cutting actions and communicated expectations for the new fiscal year, RPM looks forward to generating solid industry-leading organic sales growth and a return to double-digit earnings growth in the 12% to 15% range.

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 170 acquisitions, with over 70 of these transactions being completed during the last decade.

During fiscal 2017, RPM acquired nine business with combined annual sales of more than $220 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;
  • - Prime Resins, a $7 million manufacturer of specialty chemicals and equipment for infrastructure construction and repair;
  • - Adhere Industrial Tapes, a UK-based manufacturer of foam tapes for use in construction and industrial applications with annual net sales of $6 million;
  • - Specialty Polymer Coatings, a Canadian manufacturer of high-performance coatings for the global oil and gas pipeline market with annual net sales of $26 million; and
  • - Durham Industries Pty Limited, an Australian manufacturer of commercial waterproofing products with annual net sales of $6 million.
  • - Applied Polymerics, Inc. & Marketing Associates, Inc., a $14 million manufacturer, supplier and installer of specialist construction products for use in major structures.

Subsequent to the end of the fiscal 2017 fiscal year, RPM acquired Key Resin Company, a manufacturer of polymer flooring and coating systems with a strong position in terrazzo flooring systems. Key Resin has annual sales of approximately $25 million.
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, 2017, RPM's return to shareholders has outperformed the S&P 500 Index by 70% and its current peer group by 28%, including the assumed reinvestment of dividends. 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 May 31, 2017, RPM's actual shares outstanding were 133.6 million, while average shares outstanding for computation of fiscal 2017 basic and diluted earnings per share were 130.7 million and 135.2 million, respectively.
12. How many employees does RPM have?
RPM's operating companies employ more than 14,000 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?

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.

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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