Frequently Asked Questions

Click the question to reveal the answer

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

RPM reported record sales, net income and diluted earnings per share for its fiscal 2018 second quarter ended November 30, 2017.

Sales increased 10.5% and net income of $95.5 million, or $0.70 per diluted share, compared to a year-ago net loss of $70.9 million, or loss of $0.54 per diluted share. The fiscal 2017 second-quarter results included a $188.3 million pre-tax ($129.2 million or $0.97 per diluted share, after-tax) impairment charge. The fiscal 2017 second-quarter results also included a charge of $12.3 million, or $0.09 per share, which had no tax impact, related to the decision to exit an industrial segment business in the Middle East.

Net sales of $1.32 billion were up 10.5% over the $1.19 billion reported a year ago. Organic sales improved 4.2% and acquisition growth added 4.7%. Foreign currency translation increased sales by 1.6%.

Net income of $95.5 million compares to last year’s adjusted net income of $70.5 million. Earnings per diluted share of $0.70 in the current quarter, which included a $0.09 per diluted share tax benefit relative to last year’s tax rate, compare to an adjusted $0.52 per diluted share last year. Earnings per diluted share increased 34.6% from last year’s adjusted earnings per diluted share of $0.52, and increased 17.3% excluding the $0.09 per diluted share tax benefit.

Income before income taxes (IBT) of $109.2 million compares to a loss before income taxes of $106.9 million reported in the fiscal 2017 second quarter.

RPM's consolidated earnings before interest and taxes (EBIT) of $131.8 million compare to a consolidated loss before interest and taxes of $86.4 million reported in the fiscal 2017 second quarter. Excluding the year-ago charges, RPM’s consolidated EBIT for the fiscal 2018 second quarter improved 15.4% over $114.2 million in the fiscal 2017 second quarter. The EBIT improvement of 15.4% included the cost savings benefit in “Corporate/Other” expenses of $11.1 million from lower pension, healthcare, acquisition-related expenses and professional fees.

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 second-quarter segment sales and earnings?

During the fiscal 2018 second quarter, industrial segment sales increased 11.0%, to $702.9 million from $633.4 million in the fiscal 2017 second quarter. Organic sales improved 5.4%, while acquisition growth added 3.3%. Foreign currency translation increased sales by 2.3%. IBT for the industrial segment increased 34.6%, to $67.7 million from $50.3 million in the fiscal 2017 second quarter. Industrial segment EBIT increased 34.5%, to $70.2 million from $52.2 million in the fiscal 2017 second quarter. Industrial segment EBIT was up 8.9% over an adjusted $64.5 million in the fiscal 2017 second quarter, excluding last year’s charge to exit a Middle Eastern flooring business.

RPM’s fiscal 2018 second-quarter consumer segment sales increased 11.1%, to $415.4 million from $373.8 million a year ago. Organic sales increased 3.0%, while acquisition growth added 7.3%. Foreign currency translation increased sales by 0.8%. The consumer segment had IBT of $45.1 million, compared to a loss before income taxes of $140.6 million in the fiscal 2017 second quarter. The segment reported EBIT of $45.2 million, compared to a loss before interest and taxes of $140.6 million reported last year. EBIT was off 5.3% from an adjusted $47.7 million in the fiscal 2017 second quarter, which excludes the impairment charge related to RPM’s consumer nail enamel business.

Second-quarter sales for the specialty segment increased 7.4%, to $197.1 million from $183.6 million in the fiscal 2017 second quarter. Organic growth was 2.8%, while acquisitions added 3.8%. Foreign currency translation increased sales by 0.8%. IBT for the specialty segment increased 10.5%, to $34.4 million from $31.2 million in the fiscal 2017 second quarter. Specialty segment EBIT improved 10.8%, to $34.4 million from $31.0 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.

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

For the first half of fiscal 2018, cash from operations was $115.2 million, compared to $158.7 million a year ago. Capital expenditures of $45.3 million compared to $48.0 million during the first half of last year. Total debt at November 30, 2017 was $2.14 billion, compared to $1.64 billion at November 30, 2016 and $2.1 billion at May 31, 2017. RPM’s net (of cash) debt-to-total capitalization ratio was 53.8%, compared to 52.8% at November 30, 2016. At November 30, 2017, liquidity stood at $971.7 million, including cash of $267.9 million and $703.8 million in long-term committed available credit.

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 first-half results?

Fiscal 2018 first-half net sales improved 8.9%, to $2.66 billion from $2.44 billion during the first six months of fiscal 2017. Organic growth was 2.5%, acquisitions added 5.5% and positive foreign currency translation added 0.9%. Net income improved 406.4%, to $211.9 million from $41.8 million in the fiscal 2017 first half. Diluted earnings per share were $1.56, up 387.5% from $0.32 a year ago. IBT of $264.5 million was up 535.5% over the $41.6 million reported in the fiscal 2017 first half. EBIT of $309.4 million was 281.8% above the $81.0 million reported last year. Excluding the impairment and Middle East business exit charge in fiscal 2017, fiscal 2018 first half EBIT was up 9.9% over an adjusted $281.6 million last 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.

5. What were RPM’s fiscal 2018 first-half segment results?

RPM’s industrial segment fiscal 2018 first-half sales were up 9.4%, to $1.43 billion from $1.31 billion in the fiscal 2017 first half. Organic sales increased 3.8%, while acquisition growth added 4.2%. Foreign currency translation increased sales by 1.4%. IBT for the industrial segment increased 12.2%, to $156.6 million from $139.6 million in fiscal 2017. EBIT of $161.7 million was up 12.8% from $143.3 million in the first half last year. Excluding the Middle East business exit charge last year, industrial segment EBIT increased 3.9%, from $155.6 million a year ago.

First-half sales for the consumer segment improved 8.9%, to $842.6 million from $773.7 million a year ago. Organic sales were flat, but acquisition growth added 8.5% and foreign currency translation increased sales by 0.4%. The consumer segment reported IBT of $117.5 million, compared to a loss before interest and taxes of $70.5 million in the year-ago first half. EBIT of $117.8 million compares to a loss before interest and taxes in the fiscal 2017 second quarter of $70.5 million. Consumer segment EBIT was essentially flat to an adjusted EBIT of $117.8 million last year, excluding the impairment charge. 

Specialty segment sales grew 7.1%, to $385.6 million from $359.9 million in the 2017 first half. Organic growth was 2.9%, while acquisitions added 3.9%. Foreign currency translation increased sales by 0.3%. IBT for the specialty segment increased 9.6%, to $67.6 million from $61.7 million in fiscal 2017. For the first half of fiscal 2018, specialty segment EBIT increased 9.8%, to $67.4 million from $61.4 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?

In the industrial segment, management expects steady results during the second half of the fiscal year from RPM’s North American commercial construction-related businesses, aided by higher sales in regions impacted by hurricanes, as well as continued positive results from businesses serving the oil and gas markets. The company’s business in Brazil seems to have bottomed out and should be neutral in the back half. Overall, the global economy is improving and currency translation is favorable. Additionally, RPM is driving improved operating leverage throughout the entire industrial segment by continually pursuing additional cost savings and efficiencies. With this global backdrop, industrial segment sales growth for the balance of the fiscal year should be in the upper-single-digit range.

In the consumer segment, management expects sales growth in the low-to-mid-single-digit range during the back half of the fiscal year. Most of the growth will be organic, as last year’s acquisitions annualize their purchase date during the third quarter. The company plans to invest in its great brands by stepping up advertising and promotional activity in the spring sell-in season and therefore, expects back-half earnings results to be fairly flat to last year in this segment.

In the specialty segment, management expects sales growth in the low-single-digit range during the back half of the fiscal year. This, too, will be mostly organic as last year’s acquisitions also annualize their purchase date during the third quarter. The segment will continue to face headwinds from a patent expiration through the first quarter of fiscal 2019.

In aggregate, RPM’s operations have performed in line with management’s expectations when it issued fiscal 2018 guidance in July, and expects this trend to generally continue in the back half of this fiscal year. In regard to taxes, RPM’s 19.6% effective tax rate for the first six months has been better than expected. The company approved and completed certain foreign legal entity restructurings that resulted in the recognition of favorable discrete tax benefits that reduces its annual effective tax rate from the rate utilized for its current EPS guidance.

With the enactment of new federal tax legislation two weeks ago, there is a corporate rate reduction from 35% to 21%. The corporate rate reduction is effective for RPM as of January 1, 2018 and accordingly will reduce its current fiscal year federal statutory rate to a blended rate of approximately 29.2%. This is expected to further reduce RPM’s effective tax rate this year by two to three percentage points, adding approximately $0.10 per diluted share to its fiscal 2018 outlook. Additionally, in the third quarter management expects to record a discrete tax adjustment for the impact of the rate change on RPM’s deferred tax assets and liabilities, as well as the impact of the transition tax on deferred foreign earnings. Excluding this one-time discrete tax adjustment resulting from the new federal tax legislation, RPM increased its full-year fiscal 2018 EPS guidance to a range of $3.00 to $3.10 per share.

7. 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
8. 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. Most recently, RPM made two acquisitions.

On October 30, 2017, RPM’s USL Group acquired Ekspan Holdings Limited, a provider of movement control products and services for bridges and major structures. Headquartered in Sheffield, United Kingdom, Ekspan has annual net sales in excess of $10 million.

On December 4, 2017, RPM’s Rust-Oleum business group acquired Whink Products, a specialty cleaners manufacturer and marketer that is the market share leader in the rust stain removal segment. Based in Eldora, Iowa, Whink has annual net sales of approximately $6 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.

9. 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, 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.

10. 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

11. 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.

12. How many RPM shares are outstanding?
As of November 30, 2017, RPM's actual shares outstanding were 133.7 million, while average shares outstanding for computation of fiscal 2017 basic and diluted earnings per share were 131.2 million and 135.6 million, respectively.
13. 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.
14. Are RPM products sold in other countries?
Products manufactured by RPM's numerous operating companies are sold in approximately 170 countries and territories.
15. 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.

16. 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.

17. 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.

18. 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.
©2018 RPM International Inc. Terms of Use | Privacy Policy 2628 Pearl Road - P.O. Box 777 - Medina, Ohio 44258 | Phone: 330.273.5090 | Email: info@RPMinc.com