RPM International Earnings 2020-11-30

RPM International Earnings 2020-11-30

RPM 10Q Quarterly Report

Balance Sheet	Income Statement	Cash Flow
Assets, Equity	Rev, G Profit, Net Income	Ops, Inv, Fin

rpm-10q_20201130.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended November 30, 2020,

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to .

Commission File No. 1-14187

RPM International Inc.

(Exact name of Registrant as specified in its charter)

Delaware		02-0642224
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)

P.O. BOX 777; 2628 PEARL ROAD; MEDINA, Ohio (Address of principal executive offices)		44258 (Zip Code)
		44258 (Zip Code)

(330) 273-5090

(Registrant’s telephone number including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading

Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.01

RPM

New York Stock Exchange

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐.

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒.

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13, or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ☐ No ☒.

As of January 4, 2021, the registrant had 130,102,785 shares of common stock, $0.01 par value per share, outstanding.

RPM INTERNATIONAL INC. AND SUBSIDIARIES*

INDEX

		Page No.
PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements:	3
	Consolidated Balance Sheets	3
	Consolidated Statements of Income	4
	Consolidated Statements of Comprehensive Income	5
	Consolidated Statements of Cash Flows	6
	Consolidated Statements of Stockholders’ Equity	7
	Notes to Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	28
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	41
Item 4.	Controls and Procedures	41

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	42
Item 1A.	Risk Factors	42
Item 2.	Unregistered Sale of Equity Securities and Use of Proceeds	42
Item 6.	Exhibits	43
Signatures		44

*	As used herein, the terms “RPM” and the “Company” refer to RPM International Inc. and its subsidiaries, unless the context indicates otherwise.

PART I. – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

RPM INTERNATIONAL INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands, except per share amounts)

	November 30, 2020			May 31, 2020
Assets
Current Assets
Cash and cash equivalents	$	272,945		$	233,416
Trade accounts receivable (less allowances of $53,542 and $55,847, respectively)		1,081,841			1,137,957
Inventories		829,617			810,448
Prepaid expenses and other current assets		268,029			241,608
Total current assets		2,452,432			2,423,429
Property, Plant and Equipment, at Cost		1,851,794			1,755,190
Allowance for depreciation		(962,395	)		(905,504	)
Property, plant and equipment, net		889,399			849,686
Other Assets
Goodwill		1,300,777			1,250,066
Other intangible assets, net of amortization		620,399			584,380
Operating lease right-of-use assets		297,695			284,491
Deferred income taxes		37,154			30,894
Other		192,352			208,008
Total other assets		2,448,377			2,357,839
Total Assets	$	5,790,208		$	5,630,954
Liabilities and Stockholders' Equity
Current Liabilities
Accounts payable	$	540,678		$	535,311
Current portion of long-term debt		75,709			80,890
Accrued compensation and benefits		161,515			185,531
Accrued losses		23,717			20,021
Other accrued liabilities		331,074			271,827
Total current liabilities		1,132,693			1,093,580
Long-Term Liabilities
Long-term debt, less current maturities		2,224,627			2,458,290
Operating lease liabilities		256,045			244,691
Other long-term liabilities		560,749			510,175
Deferred income taxes		65,651			59,555
Total long-term liabilities		3,107,072			3,272,711
Commitments and contingencies (Note 13)
Stockholders' Equity
Preferred stock, par value $0.01; authorized 50,000 shares; none issued		—			—
Common stock, par value $0.01; authorized 300,000 shares; issued 144,056 and outstanding 130,106 as of November 30, 2020; issued 143,261 and outstanding 129,511 as of May 31, 2020		1,301			1,295
Paid-in capital		1,035,539			1,014,428
Treasury stock, at cost		(595,851	)		(580,117	)
Accumulated other comprehensive (loss)		(649,819	)		(717,497	)
Retained earnings		1,756,571			1,544,336
Total RPM International Inc. stockholders' equity		1,547,741			1,262,445
Noncontrolling Interest		2,702			2,218
Total equity		1,550,443			1,264,663
Total Liabilities and Stockholders' Equity	$	5,790,208		$	5,630,954

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

RPM INTERNATIONAL INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(In thousands, except per share amounts)

	Three Months Ended						Six Months Ended
	November 30,			November 30,			November 30,			November 30,
	2020			2019			2020			2019
Net Sales	$	1,485,915		$	1,401,292		$	3,092,586		$	2,874,056
Cost of Sales		899,743			871,894			1,852,759			1,769,904
Gross Profit		586,172			529,398			1,239,827			1,104,152
Selling, General and Administrative Expenses		399,418			403,357			795,370			803,923
Restructuring Charges		4,918			4,801			9,151			11,423
Interest Expense		21,266			26,341			43,011			54,658
Investment (Income), Net		(9,519	)		(8,805	)		(22,281	)		(14,190	)
Other Expense, Net		3,133			1,951			6,251			3,736
Income Before Income Taxes		166,956			101,753			408,325			244,602
Provision for Income Taxes		39,072			24,431			99,655			60,784
Net Income		127,884			77,322			308,670			183,818
Less: Net Income Attributable to Noncontrolling Interests		225			292			416			600
Net Income Attributable to RPM International Inc. Stockholders	$	127,659		$	77,030		$	308,254		$	183,218
Average Number of Shares of Common Stock Outstanding:
Basic		128,500			128,393			128,459			128,639
Diluted		129,090			129,079			129,078			129,294
Earnings per Share of Common Stock Attributable to RPM International Inc. Stockholders:
Basic	$	0.98		$	0.60		$	2.38		$	1.42
Diluted	$	0.98		$	0.59		$	2.37		$	1.41

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

RPM INTERNATIONAL INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

(In thousands)

	Three Months Ended				Six Months Ended
	November 30,		November 30,		November 30,		November 30,
	2020		2019			2020		2019
Net Income	$	127,884	$	77,322	$	308,670	$	183,818
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments (net of tax of $81; $0 $2,944 and $0, respectively)		12,495		20,967		77,162		(7,467	)
Pension and other postretirement benefit liability adjustments (net of tax of $1,722; $1,015; $2,508 and $2,119, respectively)		5,644		3,404		8,904		7,027
Unrealized gain (loss) on securities and other (net of tax of $240; $0; $

Price	61.02	EPS	2
Shares	134	P/E	31
MCap	8,197	P/FCF	60
Net Debt	2,303	EBIT	433
TEV	10,500	TEV/EBIT	24
TTM 2019-05-31, in MM, except price, ratios

10-Q	2020-11-30	Filed 2021-01-07
10-Q	2020-08-31	Filed 2020-10-07
10-K	2020-05-31	Filed 2020-07-27
10-Q	2020-02-29	Filed 2020-04-08
10-Q	2019-11-30	Filed 2020-01-08
10-Q	2019-08-31	Filed 2019-10-03
10-K	2019-05-31	Filed 2019-07-24
10-Q	2019-02-28	Filed 2019-04-08
10-Q	2018-11-30	Filed 2019-01-08
10-Q	2018-08-31	Filed 2018-10-03
10-K	2018-05-31	Filed 2018-07-23
10-Q	2018-02-28	Filed 2018-04-05
10-Q	2017-11-30	Filed 2018-01-04
10-Q	2017-08-31	Filed 2017-10-04
10-K	2017-05-31	Filed 2017-07-24
10-Q	2017-02-28	Filed 2017-04-06
10-Q	2016-11-30	Filed 2017-01-09
10-Q	2016-08-31	Filed 2016-10-05
10-K	2016-05-31	Filed 2016-07-28
10-Q	2016-02-29	Filed 2016-04-06
10-Q	2015-11-30	Filed 2016-01-06
10-Q	2015-08-31	Filed 2015-10-07
10-K	2015-05-31	Filed 2015-07-27
10-Q	2015-02-28	Filed 2015-04-08
10-Q	2014-11-30	Filed 2015-01-07
10-Q	2014-08-31	Filed 2014-10-08
10-Q	2014-02-28	Filed 2014-04-03
10-Q	2013-11-30	Filed 2014-01-08
10-Q	2013-08-31	Filed 2013-10-09
10-Q	2013-02-28	Filed 2013-04-04
10-K	2013-02-28	Filed 2014-08-14
10-Q	2012-11-30	Filed 2013-01-08
10-Q	2012-08-31	Filed 2012-10-04
10-K	2012-05-31	Filed 2012-07-26
10-Q	2012-02-29	Filed 2012-04-05
10-Q	2011-11-30	Filed 2012-01-05
10-Q	2011-08-31	Filed 2011-10-07
10-K	2011-05-31	Filed 2011-07-27
10-Q	2011-02-28	Filed 2011-04-07
10-Q	2010-11-30	Filed 2011-01-07
10-Q	2010-08-31	Filed 2010-10-06
10-K	2010-05-31	Filed 2010-07-29
10-Q	2010-02-28	Filed 2010-04-08
10-Q	2009-11-30	Filed 2010-01-06

8-K	2020-10-08
8-K	2020-10-07
8-K	2020-07-27
8-K	2020-06-05
8-K	2020-05-22
8-K	2020-04-30
8-K	2020-04-08
8-K	2020-03-20
8-K	2020-02-21
8-K	2020-01-08
8-K	2019-10-03
8-K	2019-10-02
8-K	2019-07-22
8-K	2019-05-01
8-K	2019-04-12
8-K	2019-04-04
8-K	2019-02-27
8-K	2019-02-25
8-K	2019-02-25
8-K	2019-01-04
8-K	2018-11-28
8-K	2018-10-31
8-K	2018-10-04
8-K	2018-10-03
8-K	2018-09-25
8-K	2018-08-17
8-K	2018-07-19
8-K	2018-07-02
8-K	2018-06-27
8-K	2018-05-29
8-K	2018-04-19
8-K	2018-04-05
8-K	2018-01-04

EX-31.1	rpm-ex311_8.htm
EX-31.2	rpm-ex312_10.htm
EX-32.1	rpm-ex321_7.htm
EX-32.2	rpm-ex322_6.htm

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company