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) |
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. |
Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits. |
Exhibit Number | Description | |
99.1 | Press release of the Company, dated April 7, 2011, announcing the Companys third quarter results. |
RPM International Inc. (Registrant) |
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Date April 7, 2011 | By: | /s/ Edward W. Moore | ||
Edward W. Moore | ||||
Vice President, General Counsel and Secretary | ||||
Exhibit Number | Description | |
99.1 | Press release of the Company, dated April 7, 2011, announcing the Companys third quarter results. |
| Third-quarter net sales increase 13% over pro-forma prior year | ||
| Positive net income and earnings per share contrast with year-earlier loss in seasonally weak third quarter | ||
| Company increases full-year guidance for fiscal 2011 |
AS REPORTED | PRO FORMA (a) | ||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
February 28, | February 28, | February 28, | February 28, | ||||||||||||||||||||||
2011 | 2010 | 2011 | 2010 | 2010 | 2010 | ||||||||||||||||||||
Net Sales |
$ | 678,920 | $ | 666,594 | $ | 2,400,073 | $ | 2,441,205 | $ | 603,083 | $ | 2,230,560 | |||||||||||||
Cost of sales |
409,402 | 406,762 | 1,415,632 | 1,424,332 | 366,313 | 1,295,439 | |||||||||||||||||||
Gross profit |
269,518 | 259,832 | 984,441 | 1,016,873 | 236,770 | 935,121 | |||||||||||||||||||
Selling, general & administrative expenses |
255,930 | 256,976 | 759,421 | 799,975 | 233,564 | 731,679 | |||||||||||||||||||
Interest expense |
16,502 | 15,802 | 49,012 | 43,271 | 15,796 | 43,254 | |||||||||||||||||||
Investment (income), net |
(4,903 | ) | (1,833 | ) | (11,189 | ) | (4,984 | ) | (1,802 | ) | (4,795 | ) | |||||||||||||
Income before income taxes |
1,989 | (11,113 | ) | 187,197 | 178,611 | (10,788 | ) | 164,983 | |||||||||||||||||
Provision for income taxes |
796 | (1,949 | ) | 57,507 | 58,305 | (2,332 | ) | 52,659 | |||||||||||||||||
Net income |
1,193 | (9,164 | ) | 129,690 | 120,306 | (8,456 | ) | 112,324 | |||||||||||||||||
Less: Net income attributable to noncontrolling interests |
96 | 236 | 10,806 | 788 | 1,216 | 10,581 | |||||||||||||||||||
Net income attributable to RPM International Inc. Stockholders |
$ | 1,097 | $ | (9,400 | ) | $ | 118,884 | $ | 119,518 | $ | (9,672 | ) | $ | 101,743 | |||||||||||
Earnings per share of common stock attributable to RPM International Inc. Stockholders: |
|||||||||||||||||||||||||
Basic |
$ | 0.01 | $ | (0.07 | ) | $ | 0.92 | $ | 0.93 | $ | (0.08 | ) | $ | 0.79 | |||||||||||
Diluted |
$ | 0.01 | $ | (0.07 | ) | $ | 0.91 | $ | 0.93 | $ | (0.08 | ) | $ | 0.79 | |||||||||||
Average shares of common stock outstanding basic |
127,166 | 127,500 | 127,383 | 126,940 | 127,500 | 126,940 | |||||||||||||||||||
Average shares of common stock outstanding diluted |
129,442 | 127,500 | 128,020 | 127,539 | 127,500 | 127,539 | |||||||||||||||||||
(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. |
AS REPORTED | PRO FORMA (a) | ||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
February 28, | February 28, | February 28, | February 28, | ||||||||||||||||||||||
2011 | 2010 | 2011 | 2010 | 2010 | 2010 | ||||||||||||||||||||
Net Sales: |
|||||||||||||||||||||||||
Industrial Segment |
$ | 449,092 | $ | 457,683 | $ | 1,633,914 | $ | 1,695,206 | $ | 393,861 | $ | 1,484,144 | |||||||||||||
Consumer Segment |
229,828 | 208,911 | 766,159 | 745,999 | 209,222 | 746,416 | |||||||||||||||||||
Total |
$ | 678,920 | $ | 666,594 | $ | 2,400,073 | $ | 2,441,205 | $ | 603,083 | $ | 2,230,560 | |||||||||||||
Income Before Income Taxes (b): |
|||||||||||||||||||||||||
Industrial Segment |
|||||||||||||||||||||||||
Income Before Income Taxes (b) |
$ | 12,603 | $ | 1,442 | $ | 162,754 | $ | 160,742 | $ | 1,737 | $ | 146,971 | |||||||||||||
Interest (Expense), Net (c) |
(968 | ) | (17 | ) | (2,837 | ) | (384 | ) | (39 | ) | (553 | ) | |||||||||||||
EBIT (d) |
$ | 13,571 | $ | 1,459 | $ | 165,591 | $ | 161,126 | $ | 1,776 | $ | 147,524 | |||||||||||||
Consumer Segment |
|||||||||||||||||||||||||
Income Before Income Taxes (b) |
$ | 16,002 | $ | 12,340 | $ | 92,381 | $ | 94,320 | $ | 12,295 | $ | 94,655 | |||||||||||||
Interest (Expense), Net (c) |
3 | 3 | 33 | (7 | ) | 1 | (8 | ) | |||||||||||||||||
EBIT (d) |
$ | 15,999 | $ | 12,337 | $ | 92,348 | $ | 94,327 | $ | 12,294 | $ | 94,663 | |||||||||||||
Corporate/Other |
|||||||||||||||||||||||||
(Expense) Before Income Taxes (b) |
$ | (26,616 | ) | $ | (24,895 | ) | $ | (67,938 | ) | $ | (76,451 | ) | $ | (24,820 | ) | $ | (76,643 | ) | |||||||
Interest (Expense), Net (c) |
(10,634 | ) | (13,955 | ) | (35,019 | ) | (37,896 | ) | (13,956 | ) | (37,898 | ) | |||||||||||||
EBIT (d) |
$ | (15,982 | ) | $ | (10,940 | ) | $ | (32,919 | ) | $ | (38,555 | ) | $ | (10,864 | ) | $ | (38,745 | ) | |||||||
Consolidated |
|||||||||||||||||||||||||
Income Before Income Taxes (b) |
$ | 1,989 | $ | (11,113 | ) | $ | 187,197 | $ | 178,611 | $ | (10,788 | ) | $ | 164,983 | |||||||||||
Interest (Expense), Net (c) |
(11,599 | ) | (13,969 | ) | (37,823 | ) | (38,287 | ) | (13,994 | ) | (38,459 | ) | |||||||||||||
EBIT (d) |
$ | 13,588 | $ | 2,856 | $ | 225,020 | $ | 216,898 | $ | 3,206 | $ | 203,442 | |||||||||||||
(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. |
February 28, 2011 | February 28, 2010 | May 31, 2010 | ||||||||||
(Unaudited) | (Unaudited) | |||||||||||
Assets |
||||||||||||
Current Assets |
||||||||||||
Cash and cash equivalents |
$ | 275,479 | $ | 256,199 | $ | 215,355 | ||||||
Trade accounts receivable |
566,355 | 526,460 | 654,435 | |||||||||
Allowance for doubtful accounts |
(22,485 | ) | (24,270 | ) | (20,525 | ) | ||||||
Net trade accounts receivable |
543,870 | 502,190 | 633,910 | |||||||||
Inventories |
472,984 | 441,578 | 386,982 | |||||||||
Deferred income taxes |
21,434 | 44,215 | 19,788 | |||||||||
Prepaid expenses and other current assets |
217,962 | 222,689 | 194,126 | |||||||||
Total current assets |
1,531,729 | 1,466,871 | 1,450,161 | |||||||||
Property, Plant and Equipment, at Cost |
978,169 | 1,067,577 | 924,086 | |||||||||
Allowance for depreciation and amortization |
(596,691 | ) | (622,618 | ) | (541,559 | ) | ||||||
Property, plant and equipment, net |
381,478 | 444,959 | 382,527 | |||||||||
Other Assets |
||||||||||||
Goodwill |
824,413 | 882,739 | 768,244 | |||||||||
Other intangible assets, net of amortization |
314,368 | 366,127 | 303,159 | |||||||||
Deferred income taxes, non-current |
| 62,474 | | |||||||||
Other |
103,770 | 114,195 | 99,933 | |||||||||
Total other assets |
1,242,551 | 1,425,535 | 1,171,336 | |||||||||
Total Assets |
$ | 3,155,758 | $ | 3,337,365 | $ | 3,004,024 | ||||||
Liabilities and Stockholders Equity |
||||||||||||
Current Liabilities |
||||||||||||
Accounts payable |
$ | 264,539 | $ | 230,361 | $ | 299,596 | ||||||
Current portion of long-term debt |
2,867 | 5,534 | 4,307 | |||||||||
Accrued compensation and benefits |
127,964 | 121,856 | 136,908 | |||||||||
Accrued loss reserves |
64,885 | 74,562 | 65,813 | |||||||||
Asbestos-related liabilities |
| 75,000 | | |||||||||
Other accrued liabilities |
144,398 | 132,271 | 124,870 | |||||||||
Total current liabilities |
604,653 | 639,584 | 631,494 | |||||||||
Long-Term Liabilities |
||||||||||||
Long-term debt, less current maturities |
932,839 | 902,563 | 924,308 | |||||||||
Asbestos-related liabilities |
| 357,891 | | |||||||||
Other long-term liabilities |
256,265 | 200,924 | 243,829 | |||||||||
Deferred income taxes |
55,331 | 28,389 | 43,152 | |||||||||
Total long-term liabilities |
1,244,435 | 1,489,767 | 1,211,289 | |||||||||
Total liabilities |
1,849,088 | 2,129,351 | 1,842,783 | |||||||||
Stockholders Equity |
||||||||||||
Preferred stock; none issued
Common stock (outstanding 130,430; 129,601; 129,918) |
1,304 | 1,296 | 1,299 | |||||||||
Paid-in capital |
745,514 | 798,721 | 724,089 | |||||||||
Treasury stock, at cost |
(62,430 | ) | (40,237 | ) | (40,686 | ) | ||||||
Accumulated other comprehensive (loss) |
(13,122 | ) | (23,798 | ) | (107,791 | ) | ||||||
Retained earnings |
540,258 | 468,675 | 502,562 | |||||||||
Total RPM International Inc. stockholders equity |
1,211,524 | 1,204,657 | 1,079,473 | |||||||||
Noncontrolling interest |
95,146 | 3,357 | 81,768 | |||||||||
Total equity |
1,306,670 | 1,208,014 | 1,161,241 | |||||||||
Total Liabilities and Stockholders Equity |
$ | 3,155,758 | $ | 3,337,365 | $ | 3,004,024 | ||||||
Nine Months Ended | ||||||||
February 28, | ||||||||
2011 | 2010 | |||||||
Cash Flows From Operating Activities: |
||||||||
Net income |
$ | 129,690 | $ | 120,306 | ||||
Adjustments to reconcile net income to net
cash provided by operating activities: |
||||||||
Depreciation |
39,482 | 46,622 | ||||||
Amortization |
15,049 | 16,600 | ||||||
Deferred income taxes |
5,831 | 23,765 | ||||||
Stock-based compensation expense |
8,769 | 7,423 | ||||||
Other |
(308 | ) | (1,130 | ) | ||||
Changes in assets and liabilities, net of effect
from purchases and sales of businesses: |
||||||||
Decrease in receivables |
98,554 | 154,567 | ||||||
(Increase) in inventory |
(81,387 | ) | (27,732 | ) | ||||
(Increase) in prepaid expenses and other
current and long-term assets |
(15,564 | ) | (16,906 | ) | ||||
(Decrease) in accounts payable |
(38,356 | ) | (72,592 | ) | ||||
(Decrease) in accrued compensation and benefits |
(9,509 | ) | (10,246 | ) | ||||
(Decrease) in accrued loss reserves |
(958 | ) | (2,830 | ) | ||||
Increase in other accrued liabilities |
25,284 | 4,171 | ||||||
Payments made for asbestos-related claims |
(57,437 | ) | ||||||
Other |
14,407 | 4,292 | ||||||
Cash From Operating Activities |
190,984 | 188,873 | ||||||
Cash Flows From Investing Activities: |
||||||||
Capital expenditures |
(21,737 | ) | (14,069 | ) | ||||
Acquisition of businesses, net of cash acquired |
(38,972 | ) | (63,669 | ) | ||||
Purchase of marketable securities |
(71,556 | ) | (76,166 | ) | ||||
Proceeds from sales of marketable securities |
63,369 | 66,375 | ||||||
Other |
2,347 | (186 | ) | |||||
Cash (Used For) Investing Activities |
(66,549 | ) | (87,715 | ) | ||||
Cash Flows From Financing Activities: |
||||||||
Additions to long-term and short-term debt |
37,831 | 304,106 | ||||||
Reductions of long-term and short-term debt |
(30,739 | ) | (327,472 | ) | ||||
Cash dividends |
(81,189 | ) | (78,798 | ) | ||||
Repurchase of stock |
(21,759 | ) | (1,832 | ) | ||||
Exercise of stock options |
8,053 | 6,919 | ||||||
Cash (Used For) Financing Activities |
(87,803 | ) | (97,077 | ) | ||||
Effect of Exchange Rate Changes on Cash and
Cash Equivalents |
23,492 | (1,269 | ) | |||||
Net Change in Cash and Cash Equivalents |
60,124 | 2,812 | ||||||
Cash and Cash Equivalents at Beginning of Period |
215,355 | 253,387 | ||||||
Cash and Cash Equivalents at End of Period |
$ | 275,479 | $ | 256,199 | ||||