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RPM Fiscal 2010 Fourth-Quarter and Full-Year Results Show Marked Improvement Over Prior Year


- Both industrial and consumer segments post double-digit sales increases in fourth quarter
- Adjusted net income increases 25% for the quarter and 39% for the year
- Strong cash flow, liquidity and capital structure to support growth initiatives continue

MEDINA, Ohio, July 26 /PRNewswire-FirstCall/ -- RPM International Inc. (NYSE:RPM - News) today reported sharp increases in net income on higher sales for its fiscal 2010 fourth quarter ended May 31, 2010, compared to the prior fiscal year fourth quarter.

Fourth-Quarter Results

RPM's net sales of $971.5 million increased 13.3% from the $857.3 million reported a year ago.  Organic sales improved 11.2%, including volume increases of 9.0%, a net foreign exchange contribution of 2.5% and acquisition growth of 2.1%.  

Net income for the fourth quarter was $60.5 million, a 54.0% increase over the $39.3 million earned a year ago.  Earnings per diluted share grew 51.6% to $0.47 per diluted share, compared to $0.31 in the year-ago period.   Fourth-quarter earnings before interest and taxes (EBIT) of $103.3 million were up 23.7% over EBIT of $83.4 million in the fourth quarter of fiscal 2009.  

Excluding one-time charges in both years, adjusted net income for the fiscal 2010 fourth quarter was $68.5 million, a 25.4% increase over net income of $54.6 million in the same period a year ago.  Adjusted diluted earnings per share were $0.53, a 26.2% increase over $0.42 a year ago. Fourth-quarter adjusted consolidated EBIT was $111.2 million, a 12.4% increase over EBIT of $98.9 million in the final period of fiscal 2009.

The one-time, non-cash charges to earnings included goodwill and other intangibles impairments of $0.11 per share in the fourth quarter of fiscal 2009 and a loss recognized in the fourth quarter of fiscal 2010 of $0.06 per share upon deconsolidation of the company's Specialty Products Holding Corp. (SPHC) and its wholly owned subsidiaries on May 31, 2010.

The deconsolidation occurred when SPHC and Bondex International, Inc., a non-operating subsidiary of SPHC, filed Chapter 11 proceedings in Delaware on May 31, 2010. This action was taken to use section 524(g) of the U.S. Bankruptcy Code to permanently resolve current and future asbestos claims associated with Bondex.  Neither RPM nor any of its operating subsidiaries are part of the filing. Due to the filing, the results of SPHC's operating subsidiaries will no longer be consolidated as part of RPM's financial reports as of June 1, 2010, which is the start of RPM's 2011 fiscal year.

"Virtually all of our industrial and consumer businesses posted higher sales in the fourth quarter, while our bottom line benefited from favorable product mix attributable to our diversified portfolio of companies and better plant utilization due to higher sales volume, despite the negative impact of raw material pricing and availability," stated Frank C. Sullivan, RPM chairman and chief executive officer.

Fourth-Quarter Segment Results

Sales in the company's industrial segment increased 12.9%, to $633.0 million from $560.5 million in the year-ago fourth quarter.  Organic sales improved 10.2%, including volume increases of 7.1%, net foreign exchange gains of 3.0%, and acquisition growth added 2.7%. The segment reported EBIT of $66.1 million, up 28.0% from the adjusted $51.7 million reported a year ago.  

"We continued to experience growing demand for most of our industrial product lines and believe that our businesses exposed to U.S. commercial construction markets are nearing the bottom of the economic slump and will begin to generate increased sales volumes in the back half of fiscal 2011," Sullivan stated.  "Our industrial and commercial polymer flooring, high performance corrosion control coatings and commercial roofing businesses all posted double-digit sales gains for the quarter," he stated.

Sales in RPM's consumer segment improved 14.0% to $338.5 million from $296.9 million in the fourth quarter a year ago.  Nearly all of the increase was organic, including volume increases of 12.5% and 1.5% in net foreign exchange gains.  Consumer segment EBIT improved 2.4%, to $52.7 million from $51.4 million in the fiscal 2009 fourth quarter.  

"While North American consumer spending remains cautious, the maintenance and repair nature of our comparatively modest price point consumer products, coupled with market share gains and new product introductions, resulted in higher sales.  Our plan to significantly increase advertising during the fourth quarter slowed the year-over-year EBIT growth, but positions us well for continuing growth in fiscal 2011," Sullivan stated.  

2010 Fiscal-Year Sales and Earnings

For the year ended May 31, 2010, RPM's sales increased 1.3%, to $3.41 billion from $3.37 billion a year ago.  Of the increase, 0.3% was organic, including a net foreign exchange gain of 1.1%, and acquisition growth was 1.0%.  Net income increased 50.5% to $180.0 million from $119.6 million a year ago, while earnings per diluted share improved 49.5% to $1.39 from $0.93.  EBIT grew 32.8% to $320.2 million from $241.1 million in fiscal 2009.  

Excluding the effect of one-time charges, adjusted net income for fiscal 2010 increased 39.4%, to $188.0 million, from $134.9 million a year ago.  Adjusted diluted earnings per share improved 39.4% to $1.45 from $1.04. Adjusted consolidated EBIT increased 27.9%, to $328.1 million in fiscal 2010, over EBIT of $256.6 million in the prior year, excluding one-time charges.

Industrial segment sales in fiscal 2010 declined 1.7% to $2.33 billion from $2.37 billion a year ago.  A decline in organic sales of 3.0% included 1.2% in net foreign exchange gains, while acquisition growth contributed 1.3%.  For the 2010 fiscal year, adjusted industrial segment EBIT increased 15.7% to $227.2 million from $196.4 million.  

Consumer segment sales improved 8.4% to $1.08 billion from $1.00 billion in fiscal 2009. Virtually all of the increase was organic, including volume of 6.6% and 0.7% in foreign exchange gains. Consumer segment EBIT grew 44.2% to $147.0 million from $101.9 million in fiscal 2009.

"Although industrial segment sales declined 1.7% for the year, positive momentum during the fourth quarter is expected to carry over into fiscal 2011, including the expectation that those businesses in the U.S. commercial construction markets will resume sustainable growth within the next couple of quarters. Many of our consumer segment product lines continue to gain market share, most recently in the automotive aftermarket, and the segment will continue its tradition of innovative new product introductions," Sullivan stated.

Cash Flow and Financial Position

"RPM continues to enjoy strong liquidity, capital position and cash flow. Our acquisition pipeline has more opportunities than we have seen in some time. We look forward to completing a number of transactions in the coming fiscal year from our position of financial strength," Sullivan stated.  "For fiscal 2010, our after-tax cash from operations was a healthy $203.9 million, down 23.6% from the record $267.0 million generated in fiscal 2009. The decline was due to higher working capital requirements, driven by significant sales growth in the fourth quarter.  Despite addressing these capital needs, fiscal 2010 operating cash flow was our third best in history," he stated.

RPM's net (of cash) debt-to-total capitalization ratio at the end of the quarter was approximately 39.8%, compared to 37.2% at the end of last year's fourth quarter. The company's capital expenditures during fiscal 2010 were $23.2 million, compared to depreciation of $61.8 million.  Total debt as of May 31, 2010 was $928.6 million, compared to $930.8 million at the end of the 2009 fiscal year.  Total cash and cash equivalents were $215.4 million, and RPM had $473.1 million in credit available under its senior revolving and accounts receivable credit facilities, resulting in total liquidity of $688.5 million as of May 31, 2010.

Acquisition Completed

Shortly after the close of the fiscal year, on June 10, 2010, RPM announced that its Performance Coatings Group acquired Hummervoll Industribelegg AS, an $11 million Norwegian supplier and installer of industrial flooring systems.  The acquisition was funded using available sources of foreign cash and is expected to be accretive to earnings within one year. Terms were not disclosed.  

Pro-Forma Results

"The reorganization filings of SPHC and Bondex allow RPM to enter fiscal 2011 without the Bondex asbestos liabilities and their related cash costs, but also without the sales and earnings contributions of the deconsolidated subsidiaries," Sullivan stated.   The deconsolidated subsidiaries had sales of $319.6 million, or 9.4% of RPM's total sales, and net income of $11.1 million, or 5.9% of the company's total net income, equal to approximately $0.08 per share, in fiscal 2010. These deconsolidated subsidiaries include Chemical Specialties Manufacturing Corp.; Day-Glo Color Corp.; Dryvit Systems, Inc.; Guardian Protection Products, Inc.; Kop-Coat, Inc; RPM Wood Finishes Group, Inc. and TCI, Inc.  While RPM continues to own these businesses, their results will no longer be included in RPM's consolidated financial statements.

The SPHC businesses are operating independently and will be accounted for in the company's financial statements going forward under the cost method.  Additionally, accounting rules regarding non-controlling interests require RPM to record SPHC's operating business units' non-controlling ownership interests in certain RPM foreign subsidiaries as a non-cash reduction to net income.  On a pro-forma basis for fiscal 2010, that non-cash non-controlling interest would have been $14.4 million, or approximately $0.11 per share.

Assuming the deconsolidation had been in effect during fiscal 2009 and 2010, pro-forma sales would have increased 1.9% in fiscal 2010, to $3.12 billion, from $3.06 billion a year ago.  Net income would have been $162.9 million, a 46.8% increase over net income of $111.0 million in fiscal 2009.  Pro-forma diluted earnings per share would have increased 46.5%, to $1.26, from $0.86 a year ago.

Business Outlook

"Due to the deconsolidation, our starting point entering fiscal 2011 will be a base of $3.12 billion in sales and $162.9 million in net income, or $1.26 per diluted share, reflecting the impact of deconsolidating the SPHC operating businesses and the accounting for non-controlling interests," Sullivan stated. "From this base, we expect to grow sales by between 4% and 5%, to approximately $3.25 billion, despite the continuing uncertainty in the global economy, stubbornly high unemployment, continued weakness in the North American housing and commercial construction markets and current raw material cost and availability issues.  We anticipate an improvement in earnings per share to a range of $1.35 to $1.40 for fiscal 2011.  Pre-tax cash from operations is expected to improve by approximately $50 million per year, reflecting the elimination of cash outlays for asbestos litigation and the absence of a cash contribution from deconsolidated subsidiaries," Sullivan concluded.

Webcast and Conference Call Information

Management will host a conference call to further discuss these results beginning at 10:00 a.m. EDT today.  The call can be accessed by dialing 800-510-0219 or 617-614-3451 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 1:00 p.m. EDT on July 26, 2010 until 11:59 p.m. EDT on August 2, 2010.  The replay can be accessed by dialing 888-286-8010 or 617-801-6888 for international callers.  The access code is 55295311.  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., a holding company, owns subsidiaries that are world leaders in specialty coatings, sealants, building materials and related services serving both industrial and consumer markets.  RPM's industrial products include roofing systems, sealants, corrosion control coatings, flooring coatings and specialty chemicals.  Industrial brands include Stonhard, Tremco, illbruck, Carboline, Euco, Flowcrete and Universal Sealants.  RPM's consumer products are used by professionals and do-it-yourselfers for home maintenance and improvement and by hobbyists.  Consumer brands include Zinsser, Rust-Oleum, DAP, Varathane and Testors.  Additional details are available at www.rpminc.com.

For more information, contact Robert L. Matejka, senior vice president and chief financial officer, at 330-273-5090 or rmatejka@rpminc.com.

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, including for asbestos-related claims and warranty obligations; 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, 2009, 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







































AS REPORTED



ADJUSTED (a)



Three Months Ended


Year Ended



Three Months Ended


Year Ended



May 31,


May 31,



May 31,


May 31,



2010


2009


2010


2009



2010


2009


2010


2009



(Unaudited) 





(Unaudited)



















Net Sales

$ 971,511


$ 857,341


$ 3,412,716


$ 3,368,167



$ 971,511


$ 857,341


$ 3,412,716


$ 3,368,167

Cost of sales

553,009


499,225


1,977,341


2,015,078



553,009


499,225


1,977,341


2,015,078

Gross profit

418,502


358,116


1,435,375


1,353,089



418,502


358,116


1,435,375


1,353,089

Selling, general & administrative expenses

305,479


260,326


1,105,882


1,093,203



305,479


260,326


1,105,882


1,093,203

Goodwill and other intangible asset impairments



15,462




15,462










Interest expense

16,002


12,151


59,273


54,460



16,002


12,151


59,273


54,460

Investment (income) expense, net

(2,592)


6,603


(7,576)


5,794



(2,592)


6,603


(7,576)


5,794

Other expense (income), net

9,770


(1,111)


9,342


3,302



1,824


(1,111)


1,396


3,302

Income before income taxes

89,843


64,685


268,454


180,868



97,789


80,147


276,400


196,330

Provision for income taxes

29,022


25,379


87,327


61,252



29,022


25,569


87,327


61,442

Net income

60,821


39,306


181,127


119,616



68,767


54,578


189,073


134,888

Less:  Net income attributable to noncontrolling interests

302


-


1,090


-



302


-


1,090


-

Net income attributable to RPM International Inc. Stockholders

$   60,519


$   39,306


$    180,037


$    119,616



$   68,465


$   54,578


$    187,983


$    134,888



















Earnings per share of common stock attributable to RPM International Inc. Stockholders:






































Basic (b)

$       0.47


$       0.31


$          1.40


$          0.93



$       0.53


$       0.42


$          1.46


$          1.05



























Diluted (b)

$       0.47


$       0.31


$          1.39


$          0.93



$       0.53


$       0.42


$          1.45


$          1.04



























Average shares of common stock outstanding - basic (b)

127,367


126,603


127,047


126,373



127,367


126,603


127,047


126,373



























Average shares of common stock outstanding - diluted (b)

128,210


126,771


127,731


127,689



128,210


126,771


127,731


127,689



























(a)  Adjusted figures presented remove the impact of the goodwill and other intangibles impairments recorded during the fourth fiscal quarter ended May 31,





       2009, and the impact of the loss recognized upon deconsolidation of Specialty Products Holding Corp. and its wholly owned subsidiaries at May 31, 2010.





(b)  The above information reflects our June 1, 2009 adoption of a new accounting pronouncement which requires all unvested restricted stock awards that





       Pay dividends to be considered participating securities for the purpose of computing earnings per share.  





























SUPPLEMENTAL SEGMENT INFORMATION

IN THOUSANDS

























AS REPORTED



ADJUSTED (a)







Three Months Ended


Year Ended



Three Months Ended


Year Ended







May 31,


May 31,



May 31,


May 31,







2010


2009


2010


2009



2010


2009


2010


2009







(Unaudited) 





(Unaudited)





Net Sales (e):






















Industrial Segment

$ 632,988


$ 560,465


$ 2,328,194


$ 2,367,401



$ 632,988


$ 560,465


$ 2,328,194


$ 2,367,401






Consumer Segment

338,523


296,876


1,084,522


1,000,766



338,523


296,876


1,084,522


1,000,766






    Total

$ 971,511


$ 857,341


$ 3,412,716


$ 3,368,167



$ 971,511


$ 857,341


$ 3,412,716


$ 3,368,167



























Gross Profit (e):






















Industrial Segment

$ 281,022


$ 240,945


$ 1,008,147


$    988,262



$ 281,022


$ 240,945


$ 1,008,147


$    988,262






Consumer Segment

137,480


117,171


427,228


364,827



137,480


117,171


427,228


364,827






    Total

$ 418,502


$ 358,116


$ 1,435,375


$ 1,353,089



$ 418,502


$ 358,116


$ 1,435,375


$ 1,353,089



























Income Before Income Taxes (b,e):






















Industrial Segment






















    Income Before Income Taxes (b)

$   64,786


$   35,767


$    225,528


$    180,395



$   64,786


$   51,229


$    225,528


$    195,857






    Interest (Expense), Net (c)

(1,325)


(433)


(1,709)


(582)



(1,325)


(433)


(1,709)


(582)






    EBIT (d)

$   66,111


$   36,200


$    227,237


$    180,977



$   66,111


$   51,662


$    227,237


$    196,439






Consumer Segment






















    Income Before Income Taxes (b)

$   52,699


$   50,349


$    147,019


$      97,279



$   52,699


$   50,349


$    147,019


$      97,279






    Interest (Expense), Net (c)

44


(1,093)


37


(4,623)



44


(1,093)


37


(4,623)






    EBIT (d)

$   52,655


$   51,442


$    146,982


$    101,902



$   52,655


$   51,442


$    146,982


$    101,902






Corporate/Other






















    (Expense) Before Income Taxes (b)

$ (27,642)


$ (21,431)


$  (104,093)


$    (96,806)



$ (19,696)


$ (21,431)


$    (96,147)


$    (96,806)






    Interest (Expense), Net (c)

(12,129)


(17,228)


(50,025)


(55,049)



(12,129)


(17,228)


(50,025)


(55,049)






    EBIT (d)

$ (15,513)


$   (4,203)


$    (54,068)


$    (41,757)



$   (7,567)


$   (4,203)


$    (46,122)


$    (41,757)






    Consolidated






















         Income Before Income Taxes (b)

$   89,843


$   64,685


$    268,454


$    180,868



$   97,789


$   80,147


$    276,400


$    196,330






         Interest (Expense), Net (c)

(13,410)


(18,754)


(51,697)


(60,254)



(13,410)


(18,754)


(51,697)


(60,254)






         EBIT (d)

$ 103,253


$   83,439


$    320,151


$    241,122



$ 111,199


$   98,901


$    328,097


$    256,584



























(a)   Adjusted figures presented remove the impact of the goodwill and other intangibles impairments recorded during the fourth fiscal quarter ended May 31,





       2009, and the impact of the loss recognized upon deconsolidation of Specialty Products Holding Corp. and its wholly owned subsidiaries at May 31, 2010.





(b)  The presentation includes a reconciliation of Income (Loss) Before Income Taxes, a measure defined by Generally Accepted Accounting Principles (GAAP)





       in the United States, to EBIT.





(c)  Interest (expense), net includes the combination of interest (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 corporate acquisitions, as opposed





       to segment operations.  We believe EBIT is useful to investors for this purpose as well, using EBIT as a metric in their investment decisions.  





       EBIT should not be considered an alternative to, or more meaningful than, operating income as determined in accordance with GAAP, since EBIT





       omits the impact of interest and taxes in determining operating performance, which represent items necessary to our continued operations, given





       our level of indebtedness and ongoing tax obligations.  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)   The presentation reflects a change in the composition of our reportable segments, which occurred during the second fiscal quarter of 2010.  





       Some business units formerly accounted for in our Consumer reportable segment are now included in our Industrial reportable segment based





       on the current nature of their business, customers and markets served.  







CONSOLIDATED BALANCE SHEETS 

IN THOUSANDS



May 31, 2010


May 31, 2009






Assets




Current Assets





Cash and cash equivalents

$     215,355


$     253,387


Trade accounts receivable

653,010


661,593


Allowance for doubtful accounts

(20,525)


(22,934)


Net trade accounts receivable

632,485


638,659


Inventories

386,982


406,175


Deferred income taxes

19,788


44,540


Prepaid expenses and other current assets

194,126


210,155


Total current assets

1,448,736


1,552,916






Property, Plant and Equipment, at Cost

924,086


1,056,555


Allowance for depreciation and amortization

(541,559)


(586,452)


Property, plant and equipment, net

382,527


470,103

Other Assets





Goodwill

768,244


856,166


Other intangible assets, net of amortization

303,159


358,097


Deferred income taxes, non-current

-


92,500


Other

101,358


80,139


Total other assets

1,172,761


1,386,902






Total Assets

$  3,004,024


$  3,409,921






Liabilities and Stockholders' Equity




Current Liabilities





Accounts payable

$     299,596


$     294,814


Current portion of long-term debt

4,307


168,547


Accrued compensation and benefits

136,908


124,138


Accrued loss reserves

65,813


77,393


Asbestos-related liabilities

-


65,000


Other accrued liabilities

124,870


119,270


Total current liabilities

631,494


849,162






Long-Term Liabilities





Long-term debt, less current maturities

924,308


762,295


Asbestos-related liabilities

-


425,328


Other long-term liabilities

243,829


205,650


Deferred income taxes

43,152


23,815


Total long-term liabilities

1,211,289


1,417,088


  Total liabilities

1,842,783


2,266,250






Stockholders' Equity





Preferred stock; none issued





Common stock (outstanding 129,918; 128,501)

1,299


1,285


Paid-in capital

724,089


796,441


Treasury stock, at cost

(40,686)


(50,453)


Accumulated other comprehensive (loss)

(107,791)


(31,557)


Retained earnings

502,562


427,955


    Total RPM International Inc. stockholders' equity

1,079,473


1,143,671


Noncontrolling interest

81,768


-


    Total equity

1,161,241


1,143,671






Total Liabilities and Stockholders' Equity

$  3,004,024


$  3,409,921



CONSOLIDATED STATEMENTS OF CASH FLOWS 

IN THOUSANDS










Year Ended




May 31,




2010


2009







Cash Flows From Operating Activities:




 Net income



$ 181,127


$ 119,616

 Adjustments to reconcile net income to net




         cash provided by operating activities:




              Depreciation


61,823


62,379

              Amortization


22,430


22,765

              Net loss upon deconsolidation of SPHC

7,946



              Goodwill and other intangible asset impairments



15,462

              Other-than-temporary impairments on marketable securities

260


15,062

              Deferred income taxes


32,485


2,468

              Stock-based compensation expense

10,030


8,008

              Other


(1,768)


(1,316)

 Changes in assets and liabilities, net of effect




         from purchases and sales of businesses:




              (Increase) decrease in receivables

(17,748)


181,617

              (Increase) decrease in inventory

(15,059)


75,014

              Decrease in prepaid expenses and other




                   current and long-term assets

2,230


18,024

              Increase (decrease) in accounts payable

19,638


(119,327)

              Increase (decrease) in accrued compensation and benefits

7,206


(29,039)

              (Decrease) increase in accrued loss reserves

(2,705)


5,167

              Increase (decrease) in other accrued liabilities

42,079


(14,040)

              Payments made for asbestos-related claims

(92,622)


(69,417)

              Other


(53,416)


(25,448)

                   Cash From Operating Activities

203,936


266,995

Cash Flows From Investing Activities:




    Capital expenditures


(23,241)


(54,986)

    Acquisition of businesses, net of cash acquired

(73,985)


(16,669)

    Purchase of marketable securities


(105,364)


(75,410)

    Proceeds from sales of marketable securities

93,972


65,862

    Proceeds from the sales of assets or businesses

1,892


852

    Decrease in cash due to deconsolidation of SPHC

(18,568)



    Other



(1,659)


(1,196)

                   Cash (Used For) Investing Activities

(126,953)


(81,547)

Cash Flows From Financing Activities:




    Additions to long-term and short-term debt

314,059


56,816

    Reductions of long-term and short-term debt

(319,642)


(51,412)

    Cash dividends


(105,430)


(101,836)

    Repurchase of stock




(45,360)

    Exercise of stock options


14,667


3,188

    Other



(2,283)



                    Cash (Used For) Financing Activities

(98,629)


(138,604)







Effect of Exchange Rate Changes on Cash and




    Cash Equivalents

(16,386)


(24,708)







Net Change in Cash and Cash Equivalents

(38,032)


22,136







Cash and Cash Equivalents at Beginning of Period

253,387


231,251







Cash and Cash Equivalents at End of Period

$ 215,355


$ 253,387



PROFORMA CONSOLIDATED STATEMENTS OF INCOME

 IN THOUSANDS, EXCEPT PER SHARE DATA

























Proforma Fiscal 2010 (a)














Three Months Ended


YEAR ENDED



August 31, 2009


November 30, 2009


February 28, 2010


May 31, 2010


May-10



(Unaudited)












Net Sales

$            843,024


$                  784,453


$               603,083


$      885,633


$  3,116,193

Cost of sales

479,084


450,042


366,313


501,446


1,796,885

Gross profit

363,940


334,411


236,770


384,187


1,319,308

Selling, general & administrative expenses

249,582


249,245


233,551


273,689


1,006,067

Goodwill and other intangible asset impairments










Interest expense

12,791


14,667


15,796


15,997


59,251

Investment (income) expense, net

(970)


(2,023)


(1,802)


(2,547)


(7,342)

Other expense (income), net

1,191


(1,903)


13


1,813


1,114

Income before income taxes

101,346


74,425


(10,788)


95,235


260,218

Provision for income taxes

33,032


21,959


(2,332)


29,148


81,807

Net income

68,314


52,466


(8,456)


66,087


178,411

Less:  Net income attributable to noncontrolling interests

4,586


4,779


1,216


4,948


15,529

Net income attributable to RPM International Inc. Stockholders

$              63,728


$                    47,687


$                 (9,672)


$        61,139


$     162,882























Earnings per share of common stock attributable to











RPM International Inc. Stockholders - Diluted

$                  0.49


$                        0.37


$                   (0.08)


$            0.47


$           1.26












(a)

Proforma figures presented as if the deconsolidation of SPHC had occurred prior to fiscal 2010, including the recording of the non-cash non-controlling interest.


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