Frequently Asked Questions

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1. What does RPM’s agreement with Elliott Management entail?
On June 28, 2018, following constructive dialogue with Elliott Management, RPM announced several new initiatives designed to bolster operational and financial improvement and enhance shareholder value. The initiatives include: the naming of two new independent directors, Kirk Andrews and John Ballbach, to RPM’s Board; the creation of a new operating improvement committee of the Board, specifically focused on supporting operational improvement and value creating initiatives; the engagement of consulting firm AlixPartners to work with management in reviewing additional opportunities for operational improvement; and the proposal of an amendment to the company’s charter that would lead to an annually elected board. The press release can be found here.
2. In what areas is RPM seeking to improve its performance?
RPM had already commenced in 2017 a plan to improve margins and reduce cost. The company’s current focus is on further progress in those areas as well as a focus on optimizing its balance sheet, streamlining working capital and implementing new capital allocation guidelines and capital return plans.
3. How did the agreement with Elliott Management come about?
We and Elliott share a common interest in improving RPM’s operational and financial performance. We engaged in constructive dialogue with Elliott and are pleased that we reached agreement on various initiatives that were announced on June 28, 2018. These initiatives build on actions that RPM was already taking to drive greater operating efficiency and enhance shareholder value.
4. What were RPM’s fiscal 2018 third-quarter results?

RPM reported record sales, net income and diluted earnings per share for its fiscal 2018 third quarter ended February 28, 2018.

Net sales grew 7.8% to $1.1 billion in the fiscal 2018 third quarter from $1.0 billion in the fiscal 2017 third quarter. Organic sales improved 1.8%, while acquisitions added 3.1%. Foreign currency translation positively affected sales by 2.9%. Net income was $40.2 million versus $11.9 million in the fiscal 2017 third quarter. Third-quarter earnings per diluted share were $0.30 compared to $0.09 reported last year. Third-quarter net income included an income tax benefit of $5.9 million, compared to year-ago income tax expense of $4.3 million.

Income before income taxes (IBT) was $34.7 million versus year-ago IBT of $17.0 million. Consolidated earnings before interest and taxes (EBIT) were $56.7 million, up 52.6% from year-ago EBIT of $37.1 million.
During the quarter, the company recognized a non-recurring $0.01 per share net tax benefit as a result of the enactment of the Tax Cuts and Jobs Act on December 22, 2017, and an additional $0.08 per share benefit from the resulting lower U.S. statutory tax rate. In January, the full-year guidance that was communicated included a $0.10 per share benefit from the lower corporate tax rate, of which $0.08 per share was recognized in the third quarter.

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 third-quarter segment sales and earnings?

Industrial segment sales increased 9.2% to $569.2 million from $521.4 million in the fiscal 2017 third quarter. Organic sales improved 2.2%, while acquisitions added 2.8%. Foreign currency translation positively affected sales by 4.2%. IBT increased 52.1% to $17.8 million, compared to year-ago IBT of $11.7 million. Industrial segment EBIT for the quarter of $20.3 million was up 38.8% from last year’s EBIT of $14.6 million.

Sales in RPM’s consumer segment increased 6.4% to $363.4 million from $341.4 million in the fiscal 2017 third quarter. Organic sales improved 0.7%, while acquisitions added 4.2%. Foreign currency translation positively affected sales by 1.5%. IBT was $29.1 million, down 2.3% from year-ago IBT of $29.8 million. Consumer segment EBIT declined 2.1% to $29.3 million from $29.9 million in the fiscal 2017 third quarter. Last year’s consumer EBIT included a $4.9 million intangible impairment charge on the Synta product line.

Third-quarter sales in the company’s specialty segment increased 6.5% to $170.1 million from $159.7 million a year ago. Organic sales increased 2.7% and acquisitions added 2.2%. Foreign currency translation positively affected sales by 1.6%. IBT was $22.8 million, up 51.9% from year-ago IBT of $15.0 million. Specialty segment EBIT improved 52.6% to $22.7 million from $14.9 million a year ago. Last year’s specialty EBIT included a European facility closure charge of $4.2 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.

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

For the first nine months of fiscal 2018, cash from operations was $140.7 million, compared to $173.5 million in the first nine months of fiscal 2017. Capital expenditures during the current nine-month period of $72.8 million compare to $80.1 million over the same time in fiscal 2017. Total debt at the end of the first nine months of fiscal 2018 was $2.18 billion, compared to $1.98 billion a year ago and $2.09 billion at the end of fiscal 2017. RPM’s net (of cash) debt-to-total capitalization ratio was 54.0%, compared to 58.0% at February 28, 2017 and 54.8% at May 31, 2017. At February 28, 2018, RPM’s total liquidity, including cash and long-term committed available credit, was $966.9 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.

7. What were RPM’s fiscal 2018 nine-month results?

Nine-month net sales grew 8.6% to $3.76 billion from $3.47 billion a year ago. Net income was $252.1 million compared to $53.8 million in the year-ago period. Diluted earnings per share improved to $1.87 from $0.41 in the first nine months of fiscal 2017. IBT was $299.2 million versus year-ago IBT of $58.6 million. Consolidated EBIT was $366.1 million compared to year-ago EBIT of $118.2 million. Prior-year results included pre-tax impairment charges of $193.2 million, a pre-tax charge of $12.3 million for exiting a business in the Middle East, and a pre-tax charge of $4.2 million for a plant closure in Europe.

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.

8. What were RPM’s fiscal 2018 nine-month segment results?

Sales for RPM’s industrial segment increased 9.4% to $2.0 billion from $1.83 billion in the fiscal 2017 first nine months. Organic sales increased 3.7%, while acquisitions added 3.5%. Foreign currency translation positively affected sales by 2.2%. IBT was $174.4 million, up 15.3% from year-ago IBT of $151.3 million. Industrial segment EBIT of $182.0 million was up 15.2% from EBIT of $157.9 million in the first nine months of fiscal 2017, which included a charge for exiting a business in the Middle East.  

In the consumer segment, nine-month sales were up 8.1% to $1.21 billion from $1.12 billion in the first nine months of fiscal 2017. Organic sales improved 0.2%, while acquisitions added 7.2%. Foreign currency positively affected sales by 0.7%. IBT was $146.6 million, compared to a year-ago loss before income taxes of $40.7 million. Consumer segment EBIT was $147.1 million compared to a loss of $40.6 million in the first nine months a year ago, as a result of impairment charges.

Specialty segment sales increased 6.9% to $555.7 million from $519.6 million in the first nine months a year ago. Organic sales increased 2.8% and acquisitions added 3.4%. Foreign currency translation positively affected sales by 0.7%. IBT was $90.4 million, up 17.9% from year-ago IBT of $76.7 million. Specialty segment EBIT improved 18.2% to $90.1 million from $76.3 million in the same period a year ago, which included the charge for a plant closure in Europe.

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.

9. What is RPM's business outlook?

On a consolidated basis in the fourth quarter, the company expects to generate mid-to-upper-single-digit sales growth that will drive double-digit EBIT growth, reflecting continued tight SG&A spending controls, despite the challenging higher raw material environment. Overall, these anticipated results are consistent with what the company communicated in January 2018.

RPM expect sales growth in its industrial segment in the mid- to upper-single digits, driven by continued strong performance in its Tremco Roofing liquid applied products, as well as favorable foreign currency translation. For the consumer segment, the company expects sales growth in the mid-single-digit range and for the specialty segment, sales growth in the low-single-digit range.

RPM currently expects its income tax rate to be in the 26% to 27% range in the fourth quarter of fiscal 2018, which includes the lower U.S. statutory income tax rate. The company noted its tax rate could change as the IRS continues to issue guidance on the new tax law.

The company narrowed its fiscal 2018 earnings guidance upwards to a range of $3.05 to $3.10 per diluted share from our previous guidance of $3.00 to $3.10 per diluted share, reflecting the expectation of a continuation of solid top-line sales and double-digit EBIT growth.

10. 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
11. 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, sealants and construction chemicals 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 the third quarter, RPM’s Rust-Oleum Group acquired Miracle Sealants Company, a manufacturer of sealers, cleaners, polishes and related products primarily for tile and natural stone. Based in Arcadia, Calif., Miracle Sealants has annual net sales of approximately $25 million. A leading brand with professional installers for over 30 years, Miracle Sealants has broad national distribution in tile shops across the U.S., as well as big box retailers, such as Home Depot, Lowes and Menards. Among the company’s leading products is 511 Impregnator, the industry standard in hard surface floor sealers.

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.

12. 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.

13. 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

14. 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.

15. How many RPM shares are outstanding?
As of February 28, 2018, RPM's actual shares outstanding were 133.7 million, while average shares outstanding for computation of fiscal 2018 basic and diluted earnings per share were 131.2 million and 131.2 million, respectively.
16. 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.
17. Are RPM products sold in other countries?
Products manufactured by RPM's numerous operating companies are sold in approximately 170 countries and territories.
18. Will I be impacted by the change of stock transfer agent from Wells Fargo to Equiniti Trust Company?

Note that the owner of our stock transfer agent has changed from Wells Fargo Bank, N.A. to Equiniti Trust Company. You will be serviced by Equiniti Trust Company going by the name EQ. We expect that you will continue to receive the same high level of service you had received before.

No action is required on your part. You will begin to receive communication from EQ instead of Wells Fargo. If you receive emails from the stock transfer agent, you will receive these from a new web address (eq-us.com).

Visit www.shareowneronline.com and the frequently asked questions for more information.

19. 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 EQ. 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 EQ Shareowner Services at 1-800-988-5238 for an enrollment form or download one from Shareowner Online.

20. 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 EQ Shareowner Services 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.

21. 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, EQ, 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.

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