RPM International Earnings 2020-02-29

RPM International Earnings 2020-02-29

RPM 10Q Quarterly Report

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

rpm-10q_20200229.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 February 29, 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 April 3, 2020, the registrant had 129,491,250 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:
	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	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	32
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	42
Item 4.	Controls and Procedures	42

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	43
Item 1A.	Risk Factors	44
Item 2.	Unregistered Sale of Equity Securities and Use of Proceeds	44
Item 6.	Exhibits	45
Signatures		46

*	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)

	February 29, 2020			May 31, 2019
Assets
Current Assets
Cash and cash equivalents	$	212,242		$	223,168
Trade accounts receivable (less allowances of $58,492 and $54,748, respectively)		948,351			1,232,350
Inventories		914,197			841,873
Prepaid expenses and other current assets		240,678			220,701
Total current assets		2,315,468			2,518,092
Property, Plant and Equipment, at Cost		1,731,101			1,662,859
Allowance for depreciation		(900,368	)		(843,648	)
Property, plant and equipment, net		830,733			819,211
Other Assets
Goodwill		1,265,237			1,245,762
Other intangible assets, net of amortization		597,018			601,082
Operating lease right-of-use assets		289,654			—
Deferred income taxes		36,601			34,908
Other		231,159			222,300
Total other assets		2,419,669			2,104,052
Total Assets	$	5,565,870		$	5,441,355
Liabilities and Stockholders' Equity
Current Liabilities
Accounts payable	$	475,613		$	556,696
Current portion of long-term debt		71,234			552,446
Accrued compensation and benefits		154,129			193,345
Accrued losses		22,831			19,899
Other accrued liabilities		238,324			217,019
Total current liabilities		962,131			1,539,405
Long-Term Liabilities
Long-term debt, less current maturities		2,488,529			1,973,462
Operating lease liabilities		247,685			-
Other long-term liabilities		391,677			405,040
Deferred income taxes		122,499			114,843
Total long-term liabilities		3,250,390			2,493,345
Commitments and contingencies (Note 15)
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 143,220 and outstanding 129,879 as of February 29, 2020; issued 142,439 and outstanding 130,995 as of May 31, 2019		1,299			1,310
Paid-in capital		1,013,561			994,508
Treasury stock, at cost		(553,663	)		(437,290	)
Accumulated other comprehensive (loss)		(592,024	)		(577,628	)
Retained earnings		1,481,339			1,425,052
Total RPM International Inc. stockholders' equity		1,350,512			1,405,952
Noncontrolling Interest		2,837			2,653
Total equity		1,353,349			1,408,605
Total Liabilities and Stockholders' Equity	$	5,565,870		$	5,441,355

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					Nine Months Ended
	February 29,		February 28,			February 29,			February 28,
	2020		2019			2020			2019
Net Sales	$	1,173,976	$	1,140,630		$	4,048,033		$	3,963,150
Cost of Sales		739,229		731,208			2,509,133			2,510,643
Gross Profit		434,747		409,422			1,538,900			1,452,507
Selling, General and Administrative Expenses		381,866		374,153			1,185,791			1,175,049
Restructuring Charges		7,343		8,679			18,766			36,479
Interest Expense		23,972		26,525			78,630			74,058
Investment (Income) Expense, Net		3,836		(4,726	)		(10,354	)		(126	)
Other Expense, Net		1,422		327			5,158			4,052
Income Before Income Taxes		16,308		4,464			260,909			162,995
Provision (Benefit) for Income Taxes		4,218		(10,032	)		65,002			29,140
Net Income		12,090		14,496			195,907			133,855
Less: Net Income Attributable to Noncontrolling Interests		237		306			835			677
Net Income Attributable to RPM International Inc. Stockholders	$	11,853	$	14,190		$	195,072		$	133,178
Average Number of Shares of Common Stock Outstanding:
Basic		128,426		130,105			128,572			131,019
Diluted		130,028		131,889			129,238			132,829
Earnings per Share of Common Stock Attributable to RPM International Inc. Stockholders:
Basic	$	0.09	$	0.11		$	1.51		$	1.01
Diluted	$	0.09	$	0.11		$

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	2020-02-29	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	2020-04-30	Enter Agreement, Regulation FD, Exhibits
8-K	2020-04-08	Earnings, Exhibits
8-K	2020-03-20	Earnings, Regulation FD, Exhibits
8-K	2020-02-21	Enter Agreement, Exhibits
8-K	2020-01-08	Earnings, Exhibits
8-K	2019-10-03	Shareholder Vote, Other Events, Exhibits
8-K	2019-10-02	Earnings, Exhibits
8-K	2019-07-22	Earnings, Regulation FD, Exhibits
8-K	2019-05-01	Officers, Exhibits
8-K	2019-04-12	Officers, Exhibits
8-K	2019-04-04	Earnings, Regulation FD, Exhibits
8-K	2019-02-27	Enter Agreement, Exhibits
8-K	2019-02-25	Other Events
8-K	2019-02-25	Enter Agreement, Other Events, Exhibits
8-K	2019-01-04	Earnings, Exhibits
8-K	2018-11-28	Regulation FD, Other Events, Exhibits
8-K	2018-10-31	Enter Agreement, Leave Agreement, Exhibits
8-K	2018-10-04	Shareholder Vote, Other Events, Exhibits
8-K	2018-10-03	Earnings, Exhibits
8-K	2018-09-25	Other Events, Exhibits
8-K	2018-08-17	Shareholder Rights, Exhibits
8-K	2018-07-19	Earnings, Exhibits
8-K	2018-07-02	Officers, Other Events, Exhibits
8-K	2018-06-27	Enter Agreement, Officers, Regulation FD, Exhibits
8-K	2018-05-29	Other Events
8-K	2018-04-19	Suspend Trading, Exhibits
8-K	2018-04-05	Earnings, Exhibits
8-K	2018-01-04	Earnings, Exhibits

EX-10.2	rpm-ex102_213.htm
EX-31.1	rpm-ex311_9.htm
EX-31.2	rpm-ex312_6.htm
EX-32.1	rpm-ex321_7.htm
EX-32.2	rpm-ex322_8.htm

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company