8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) October 6, 2010

RPM INTERNATIONAL INC.

(Exact name of registrant as specified in its charter)

Delaware	1-14187	02-0642224
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

2628 Pearl Road, P.O. Box 777, Medina, Ohio	44258
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (330) 273-5090

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition.

On October 6, 2010, the Company issued a press release announcing its first quarter results, which provided detail not included in previously issued reports. A copy of the press release is furnished with this Current Report on Form 8-K as Exhibit 99.1.

Item 9.01 Financial Statements and Exhibits.

     (d) Exhibits.

Exhibit Number	Description
99.1	Press release of the Company, dated October 6, 2010, announcing the Company’s first quarter results.

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	RPM International Inc. (Registrant)
Date   October 6, 2010	/s/ Edward W. Moore
	Edward W. Moore
	Vice President, General Counsel and Secretary

Exhibit Index

Exhibit Number	Description
99.1	Press release of the Company, dated October 6, 2010, announcing the Company’s first quarter results.

EX-99.1

Exhibit 99.1

RPM REPORTS FIRST-QUARTER RESULTS

• Pro-forma sales increase 6%, driving 8% increase in net income and diluted earnings per share

• Reported sales, net income and diluted earnings per share decline slightly as a result of deconsolidation of Specialty Products Holding Corp. (SPHC) subsidiaries on May 31, 2010

Medina, Ohio — October 6, 2010 — RPM International Inc. (NYSE: RPM) today reported slight declines in sales, net income and diluted earnings per share for its fiscal 2011 first quarter ended August 31, 2010. The declines were primarily attributable to the deconsolidation of Specialty Products Holding Corp. (SPHC) subsidiaries, all of which reported through RPM’s industrial segment, at the end of the company’s 2010 fiscal year.

The deconsolidation eliminated nearly $300 million in annual revenues from RPM’s results, beginning in fiscal 2011. On a pro-forma basis, excluding the effect of the deconsolidation, sales, net income and earnings per diluted share all improved.

First-Quarter Results

On an “as reported” basis, first-quarter net sales of $894.8 million were 2.3% below the $916.0 million reported a year ago. Net income attributable to RPM stockholders of $69.0 million was off 5.5% from last year’s record $73.0 million. First-quarter diluted earnings per share were $0.53, a 7.0% decrease from the $0.57 reported a year ago. Consolidated EBIT was $122.0 million, up 1.1% from the $120.7 million in the fiscal 2010 first quarter.

On a pro-forma basis, assuming the deconsolidation of SPHC subsidiaries had been in effect during the first quarter of fiscal 2010, sales increased 6.1%, to $894.8 million from $843.0 million a year ago. Pro-forma net income attributable to RPM stockholders improved 8.3%, to $69.0 million from $63.7 million in the fiscal 2010 first quarter, while pro-forma diluted earnings per share were up 8.2%, to $0.53 from $0.49. Pro-forma consolidated EBIT grew 7.8%, to $122.0 million from $113.2 million a year ago.

“As announced last quarter, we will gauge our results going forward from the end of our last fiscal year on a pro-forma basis, taking into account the impact of the SPHC deconsolidation. On an apples-to-apples basis, we are pleased with our first-quarter results in this challenging economy. We were especially encouraged by a sharp improvement in sales by our industrial segment,” stated Frank C. Sullivan, chairman and chief executive officer.

SPHC subsidiaries were deconsolidated from RPM’s financial results when SPHC and its Bondex subsidiary filed Chapter 11 reorganization proceedings on May 31, 2010. As a result of the filing, Bondex asbestos liabilities are no longer carried on RPM’s balance sheet. SPHC operating 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.

RPM Reports First-Quarter Results
October 6, 2010
Page 2 of 4

While RPM continues to own these businesses, they are operating independently and their results are no longer included in RPM’s consolidated financial statements.

First-Quarter Segment Sales and Earnings

The company’s consumer segment, which was not affected by the deconsolidation, reported a 0.2% increase in sales to $292.5 million from $292.0 million in the fiscal 2010 first quarter. Organic sales were off 0.4%, including 0.5% in foreign exchange translation losses offset by 0.2% in volume increases and 0.6% in acquisition growth. Consumer segment EBIT declined 2.4% to $49.0 million in the fiscal 2011 first quarter from $50.2 million in the fiscal 2010 first period.

“Our consumer segment faced some very tough comparisons in the first quarter, as our year-earlier first quarter had strong double-digit growth in both sales and EBIT. The segment was also impacted by significant increases in raw material costs, as well as a slowdown in consumer spending over the summer,” Sullivan stated. “Businesses within the segment continued to hold or gain market share, which should serve RPM well as consumer spending picks up,” he stated.

On a pro-forma basis, industrial segment sales improved 9.3%, to $602.3 million from $551.0 million a year ago. Pro-forma segment EBIT grew 7.5%, to $83.3 million from $77.6 million in the fiscal 2010 first quarter.

“The pro-forma improvements in our industrial segment results reflect growth in industrial capital spending from the depressed levels of the prior year. In addition to continuing strong performance by our polymer flooring and corrosion control coatings, we saw marked improvement in roofing and concrete additives, while sales were flat year-over-year in our domestic and international sealants businesses, which are linked to commercial new construction. Raw material costs were also a challenge across our industrial businesses,” stated Sullivan.

Cash Flow and Financial Position

During the fiscal 2011 first quarter, cash from operations was $41.1 million, compared to $52.1 million a year ago. Capital expenditures were $3.3 million in the quarter, comparable to the year-ago period. Depreciation was $13.3 million during the first quarter of fiscal 2011. During the quarter, the company repurchased approximately 500,000 shares of its common stock at a cost of $8.6 million under RPM’s stock repurchase program.

Total debt at August 31, 2010 of $935.8 million compares to $928.6 million at May 31, 2010 and $906.7 million at the end of last year’s first quarter. Net (of cash) debt-to-total capital was 38.6%, versus 34.7% at the end of last year’s first quarter and 39.8% at the end of the prior fiscal year. Liquidity, including cash, was $717.3 million, as compared to $635.1 million a year ago and $688.5 million at May 31, 2010. “RPM continues to have a strong capital structure and liquidity position that will enable us to bolster our acquisition program, while funding ongoing operating needs and our dividend program,” Sullivan stated.

RPM Reports First-Quarter Results
October 6, 2010
Page 3 of 4

Turkish Acquisition Completed

On September 28, 2010, RPM announced that its Building Solutions Group has acquired Park Dis Ticaret A.S., a leading supplier of sealants, tapes and membranes to the construction markets in Turkey, Russia and the Middle East. Based in Istanbul, Turkey, Park has annual sales of approximately $10 million and is currently a Tremco illbruck distributor. Terms of the transaction, which is expected to be accretive to earnings within one year, were not disclosed.

Business Outlook

“Based on our first-quarter results, we are holding to our fiscal 2011 guidance issued with our fiscal 2010 year-end earnings release on July 26, 2010. We continue to anticipate sales growth of between 4% and 5% to approximately $3.25 billion, from a pro-forma base of $3.12 billion in fiscal 2010 and growth in earnings per diluted share to a range of $1.35 to $1.40, up from a pro-forma $1.26 in fiscal 2010,” stated Sullivan.

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 866-271-0675 or 617-213-8892 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 October 6, 2010 until 11:59 p.m. EDT on October 13, 2010. The replay can be accessed by dialing 888-286-8010 or 617-801-6888 for international callers. The access code is 20459794. 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.

# # #

RPM Reports First-Quarter Results
October 6, 2010
Page 4 of 4

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; (j) risks and uncertainties associated with the SPHC bankruptcy proceedings; and (k) 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, 2010, 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
UNAUDITED

	AS REPORTED						PRO FORMA (a)
	Three Months Ended						Three Months Ended
	August 31,						August 31,
	2010			2009			2010			2009
Net Sales	$	894,810		$	915,953		$	894,810		$	843,024
Cost of sales		519,384			522,123			519,384			479,084
Gross profit		375,426			393,830			375,426			363,940
Selling, general & administrative expenses		253,421			273,146			253,421			250,773
Interest expense		16,042			12,797			16,042			12,791
Investment (income), net		(1,977	)		(1,094	)		(1,977	)		(970	)
Income before income taxes		107,940			108,981			107,940			101,346
Provision for income taxes		32,946			35,903			32,946			33,032
Net income		74,994			73,078			74,994			68,314
Less: Net income attributable to noncontrolling interests		5,998			53			5,998			4,586
Net income attributable to RPM International Inc. Stockholders	$	68,996		$	73,025		$	68,996		$	63,728
Earnings per share of common stock attributable to RPM International Inc. Stockholders:
Basic	$	0.53		$	0.57		$	0.53		$	0.50
Diluted	$	0.53		$	0.57		$	0.53		$	0.49
Average shares of common stock outstanding — basic		127,787			126,774			127,787			126,774
Average shares of common stock outstanding — diluted		128,254			127,098			128,254			127,098

(a) Pro forma figures presented for fiscal 2010 reflect results as if the deconsolidation of SPHC had occurred prior to fiscal 2010, including the recording of the non-cash non-controlling interest.

SUPPLEMENTAL SEGMENT INFORMATION
IN THOUSANDS
UNAUDITED

	AS REPORTED						PRO FORMA (a)
	Three Months Ended						Three Months Ended
	August 31,						August 31,
	2010			2009			2010			2009
Net Sales:
Industrial Segment	$	602,314		$	624,027		$	602,314		$	551,037
Consumer Segment		292,496			291,926			292,496			291,987
Total	$	894,810		$	915,953		$	894,810		$	843,024
Gross Profit:
Industrial Segment	$	260,362		$	276,375		$	260,362		$	246,262
Consumer Segment		115,064			117,455			115,064			117,678
Total	$	375,426		$	393,830		$	375,426		$	363,940
Income Before Income Taxes (b):
Industrial Segment
Income Before Income Taxes (b)	$	82,479		$	84,879		$	82,479		$	77,333
Interest (Expense), Net (c)		(861	)		(110	)		(861	)		(227	)
EBIT (d)	$	83,340		$	84,989		$	83,340		$	77,560
Consumer Segment
Income Before Income Taxes (b)	$	49,027		$	50,196		$	49,027		$	50,420
Interest (Expense), Net (c)		10			(6	)		10			(5	)
EBIT (d)	$	49,017		$	50,202		$	49,017		$	50,425
Corporate/Other
(Expense) Before Income Taxes (b)	$	(23,566	)	$	(26,094	)	$	(23,566	)	$	(26,407	)
Interest (Expense), Net (c)		(13,214	)		(11,587	)		(13,214	)		(11,589	)
EBIT (d)	$	(10,352	)	$	(14,507	)	$	(10,352	)	$	(14,818	)
Consolidated
Income Before Income Taxes (b)	$	107,940		$	108,981		$	107,940		$	101,346
Interest (Expense), Net (c)		(14,065	)		(11,703	)		(14,065	)		(11,821	)
EBIT (d)	$	122,005		$	120,684		$	122,005		$	113,167

(a)	Pro forma figures presented for fiscal 2010 reflect results as if the deconsolidation of SPHC had occurred prior to fiscal 2010, including the recording of the non-cash non-controlling interest.
(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.

CONSOLIDATED BALANCE SHEETS

IN THOUSANDS

	August 31, 2010			August 31, 2009			May 31, 2010
	(Unaudited)			(Unaudited)
Assets
Current Assets
Cash and cash equivalents	$	219,312		$	255,840		$	215,355
Trade accounts receivable		645,111			664,711			653,010
Allowance for doubtful accounts		(20,475	)		(24,239	)		(20,525	)
Net trade accounts receivable		624,636			640,472			632,485
Inventories		421,228			435,174			386,982
Deferred income taxes		20,671			44,299			19,788
Prepaid expenses and other current assets		192,488			209,432			194,126
Total current assets		1,478,335			1,585,217			1,448,736
Property, Plant and Equipment, at Cost		934,136			1,055,935			924,086
Allowance for depreciation and amortization		(557,902	)		(597,420	)		(541,559	)
Property, plant and equipment, net		376,234			458,515			382,527
Other Assets
Goodwill		783,685			860,554			768,244
Other intangible assets, net of amortization		308,318			353,820			303,159
Deferred income taxes, non-current		—			82,446			—
Other		112,273			87,318			101,358
Total other assets		1,204,276			1,384,138			1,172,761
Total Assets	$	3,058,845		$	3,427,870		$	3,004,024
Liabilities and Stockholders’ Equity
Current Liabilities
Accounts payable	$	283,470		$	291,658		$	299,596
Current portion of long-term debt		2,774			169,314			4,307
Accrued compensation and benefits		100,030			99,825			136,908
Accrued loss reserves		64,412			75,559			65,813
Asbestos-related liabilities		—			75,000			—
Other accrued liabilities		138,824			134,002			124,870
Total current liabilities		589,510			845,358			631,494
Long-Term Liabilities
Long-term debt, less current maturities		932,979			737,414			924,308
Asbestos-related liabilities		—			396,772			—
Other long-term liabilities		249,443			193,954			243,829
Deferred income taxes		50,034			28,331			43,152
Total long-term liabilities		1,232,456			1,356,471			1,211,289
Total liabilities		1,821,966			2,201,829			1,842,783
Stockholders’ Equity
Preferred stock; none issued
Common stock (outstanding 129,493; 129,097; 129,918)		1,295			1,291			1,299
Paid-in capital		725,927			794,254			724,089
Treasury stock, at cost		(49,781	)		(42,990	)		(40,686	)
Accumulated other comprehensive (loss)		(80,734	)		(3,525	)		(107,791	)
Retained earnings		544,930			475,279			502,562
Total RPM International Inc. stockholders’ equity		1,141,637			1,224,309			1,079,473
Noncontrolling interest		95,242			1,732			81,768
Total equity		1,236,879			1,226,041			1,161,241
Total Liabilities and Stockholders’ Equity	$	3,058,845		$	3,427,870		$	3,004,024

CONSOLIDATED STATEMENTS OF CASH FLOWS

IN THOUSANDS
UNAUDITED

	Quarter Ended
	August 31,
	2010			2009
Cash Flows From Operating Activities:
Net income	$	74,994		$	73,078
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		13,330			15,557
Amortization		4,874			5,449
Other-than-temporary impairments on marketable securities		57			118
Deferred income taxes		2,321			11,370
Stock-based compensation expense		2,396			2,621
Other		(281	)		(603	)
Changes in assets and liabilities, net of effect from purchases and sales of businesses:
Decrease (increase) in receivables		10,016			(1,814	)
(Increase) in inventory		(33,603	)		(28,999	)
(Increase) in prepaid expenses and other current and long-term assets		(12,102	)		(9,135	)
(Decrease) in accounts payable		(16,781	)		(3,156	)
(Decrease) in accrued compensation and benefits		(37,281	)		(24,313	)
(Decrease) in accrued loss reserves		(1,431	)		(1,834	)
Increase in other accrued liabilities		33,696			33,307
Payments made for asbestos-related claims					(18,556	)
Other		918			(954	)
Cash From Operating Activities		41,123			52,136
Cash Flows From Investing Activities:
Capital expenditures		(3,255	)		(3,262	)
Acquisition of businesses, net of cash acquired		(9,962	)		(349	)
Purchase of marketable securities		(19,296	)		(4,077	)
Proceeds from sales of marketable securities		20,676			897
Other		(3,634	)		501
Cash (Used For) Investing Activities		(15,471	)		(6,290	)
Cash Flows From Financing Activities:
Additions to long-term and short-term debt		9,773			817
Reductions of long-term and short-term debt		(2,635	)		(25,290	)
Cash dividends		(26,629	)		(25,701	)
Repurchase of stock		(9,101	)
Exercise of stock options		281			2,692
Cash (Used For) Financing Activities		(28,311	)		(47,482	)
Effect of Exchange Rate Changes on Cash and Cash Equivalents		6,616			4,089
Net Change in Cash and Cash Equivalents		3,957			2,453
Cash and Cash Equivalents at Beginning of Period		215,355			253,387
Cash and Cash Equivalents at End of Period	$	219,312		$	255,840