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Investor Frequently Asked Questions
1.What is the status of RPM’s MAP to Growth operating improvement plan?
2.What are the goals of RPM’s MAP to Growth operating improvement plan?
3.What were RPM’s fiscal 2019 second-quarter results?
4.What were RPM’s fiscal 2019 second-quarter segment sales and earnings?
5.What were RPM’s first-half consolidated results?
6.What were RPM’s first-half segment results?
7.What is the status of RPM's capital structure, cash flow and liquidity?
8.What is RPM's business outlook?
9.Does RPM plan to continue to grow through acquisitions?
10.What is RPM's dividend record?
11.When is the RPM annual stockholders' meeting?
12.When will your annual report and proxy be mailed?
13.How many RPM shares are outstanding?
14.How many employees does RPM have?
15.Are RPM products sold in other countries?
16.Will I be impacted by the change of stock transfer agent from Wells Fargo to Equiniti Trust Company?
17.Can I buy stock directly through the company?
18.Does RPM have a Dividend Reinvestment Plan?
19.Who should I contact regarding questions on my RPM account or to find out how many shares I own?
20.How often is stock purchased through the Dividend Reinvestment Plan?
21.Can I make voluntary cash payments by having my checking or savings account automatically debited?
22.Can my cash dividend check be direct deposited into my bank account?
1.What is the status of RPM’s MAP to Growth operating improvement plan?
 

RPM is focused on executing its MAP to Growth operating improvement plan, targeting a 540-basis-point improvement in operating margin. As announced at its investor day on November 28, 2018, the company intends to return $1.5 billion in capital to stockholders by May 31, 2021, through a combination of dividends and share repurchases. In addition to the convertible bond redemption announced on November 27, 2018, the company has repurchased approximately $82.0 million of its common stock through November 30, 2018.

Additional actions completed during the fiscal 2019 second quarter include the announced closure of five manufacturing plants, the reduction of 149 positions, and the start of the transition to center-led manufacturing and procurement functions. RPM also began to implement actions to improve its manufacturing processes, optimize assets and reduce inventory, while moving forward on its supply chain initiatives to consolidate the number of vendors used and negotiate more favorable pricing and payment terms. Accordingly, the company is maintaining the long-term projections that it provided at its November 28 investor day.


2.What are the goals of RPM’s MAP to Growth operating improvement plan?
 

RPM’s operating improvement plan, known as “MAP to Growth,” includes initiatives designed to drive greater efficiency in order to accelerate growth and increase value from the unique entrepreneurial culture and leading brands that have been the foundation of RPM’s success for decades. Details of the plan were outlined in a presentation on November 28, 2018. The series of financial goals that the company is targeting to achieve by May 31, 2021, include:

  • - $6.25 billion in annual revenue;
  • - $1 billion in EBIT on an annualized run rate, representing 540 basis points of margin improvement; and
  • - $1.5 billion of capital returned to shareholders.

The MAP to Growth plan is designed to create world-class operations and manufacturing for RPM’s businesses. Combining that with the company’s proven track record of growing innovative, market-leading brands will put RPM in a powerful position for the future. Highlights of the plan include:

  • - Realignment of the company’s six business groups into four: Performance Coatings, Construction Products, Consumer Products and Specialty Products. These newly aligned groups will be led by four proven operating presidents. Reorganizing into these four groups will enable RPM to better manage its assets and improve synergies across the enterprise.
  • - Targeting $290 million in annualized cost savings by December 31, 2020, through consolidation and, where appropriate, centralization of key shared service functions, including manufacturing operations; supply chain and procurement; information technology; and finance and administration.
  • - Maintaining the company’s entrepreneurial growth culture by keeping key customer-focused functions that make RPM unique – such as technical support, sales, marketing, and R&D – at the business level.
  • - Disciplined and value-creating “protect the house” approach to capital allocation, designed to maintain an investment-grade profile while allowing for further investment in growth, strategic M&A spending, and return of capital to shareholders that includes over $1 billion targeted in share repurchases and more than $500 million targeted in dividend payouts.

Initiatives already completed include establishing an operating improvement committee, appointing two new members to the Board of Directors, and engaging a top consulting firm to support execution.


3.What were RPM’s fiscal 2019 second-quarter results?
 

Fiscal 2019 second-quarter net sales were a record $1.36 billion, up 3.6% over the $1.32 billion reported a year ago. The quarter’s results include the impact of charges of $29.2 million primarily for acquisitions, convertible debt extinguishment and restructuring related to the company’s operating improvement plan. Investment losses were $6.5 million during the current quarter as a result of a new accounting standard, which now requires RPM to record unrealized gains and losses on equity securities in earnings rather than as a component of equity. For the fiscal 2018 second quarter, the company recorded a favorable discrete tax adjustment of $18.0 million related to the implementation of a foreign legal entity realignment and corresponding planning strategy. Fiscal 2019 second-quarter net income was $49.2 million versus $95.5 million in the year-ago period. Diluted earnings per share (EPS) were $0.37 compared to $0.70 in the year-ago quarter. Income before income taxes (IBT) was $66.6 million compared to $109.2 million reported in the fiscal 2018 second quarter. RPM’s consolidated earnings before interest and taxes (EBIT) were $96.8 million compared to $131.8 million reported in the year-ago period. Excluding the charges mentioned above, RPM’s current-quarter adjusted EBIT was $126.0 million and diluted EPS was $0.52, compared to prior-year second-quarter adjusted diluted EPS of $0.57.

The company achieved solid top-line improvement with sales growth of 3.6%, despite the unfavorable foreign currency translation effect of 2.0%. Like many manufacturers, RPM’s bottom line was impacted by a continued rise in costs for raw materials, freight, labor and energy, as well as adverse foreign exchange translation.

SG&A improved by 30 basis points, and adjusted SG&A, excluding restructuring expenses, improved by 100 basis points versus last year’s second quarter.

Restructuring activities related to the company’s MAP to Growth operating improvement plan, the details of which were shared at an investor day on November 28, 2018, are well under way. The plan is focused on driving greater efficiency and long-term profitability of the business to enhance shareholder value.

As previously announced, on November 27, 2018, RPM redeemed all of its outstanding 2.25% Convertible Senior Notes due 2020, primarily with cash. As a result, approximately 3.3 million shares will be removed from the calculation of diluted EPS going forward.

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.


4.What were RPM’s fiscal 2019 second-quarter segment sales and earnings?
 

During the fiscal 2019 second quarter, RPM’s industrial segment net sales increased 2.1% to $718.0 million from $702.9 million a year ago, reflecting organic growth of 3.3% and acquisitions contributing an additional 1.5%. Foreign currency translation reduced sales by 2.7%. Industrial segment IBT was $54.4 million compared with $67.7 million a year ago. EBIT was $56.8 million compared to $70.2 million in the fiscal 2018 second quarter. Adjusted EBIT, which excludes charges related to acquisitions, restructuring and other expenses, increased 1.0% to $70.9 million from the year-ago period.

Solid performance in RPM’s businesses providing corrosion control coatings and concrete admixture and repair products drove top-line growth in the industrial segment, despite the impact of the second wettest autumn on record in the U.S., which affected sales somewhat, particularly in the company’s commercial roofing business. International sales, which account for approximately half of RPM’s industrial segment business, were soft this quarter. Higher raw material costs, unfavorable foreign exchange, restructuring and other related charges impacted results. Good progress was made on operating improvement initiatives in the segment, which included consolidating production after announcing the closure of three plants and shifting that manufacturing to other facilities.

RPM’s consumer segment generated a 4.1% increase in sales to $432.6 million from $415.4 million in the fiscal 2018 second quarter. Organic sales increased 2.8%, while acquisition growth contributed 2.9%. Foreign currency translation reduced sales by 1.6%. Consumer segment IBT was $41.2 million compared with $45.1 million in the prior-year period. EBIT was $41.3 million compared to $45.2 million in the fiscal 2018 second quarter. Excluding restructuring-related expenses, adjusted EBIT was $42.9 million for the fiscal 2019 quarter.

Price increases instituted late in the first quarter helped to mitigate margin erosion in the consumer segment. However, raw material costs and foreign exchange continue to be challenges. On the top line, organic sales growth was aided by pricing and new product introductions in RPM’s sealants and adhesives business, resulting in new accounts and market share gains. Sales were tempered by the exceptionally wet weather in the U.S., the segment’s largest market. The segments continued to make operational improvements, which were kicked off in RPM’s fourth quarter of last year, leading to reductions in working capital and the announced closure of one additional manufacturing facility during the second quarter.

RPM’s specialty segment reported fiscal 2019 second-quarter sales growth of 7.6% to $212.0 million from $197.1 million in the year-ago period. Organic growth contributed 2.3%, while acquisition growth was 6.1%. Foreign currency translation reduced sales by 0.8%. Specialty segment IBT was $30.0 million compared with $34.4 million in the prior-year period. EBIT was $29.9 million compared to $34.4 million in the fiscal 2018 second quarter. Adjusted EBIT, which excludes acquisition costs and restructuring-related expenses, was $34.1 million in the fiscal 2019 second quarter.

Driving the strong second-quarter performance in the specialty segment were RPM’s businesses providing wood coatings, powdered coatings and fluorescent colorants. The segment also received a boost to the top line from the acquisition of Nudura in September, which extends the company’s building envelope product line offerings. Performance by the restoration equipment business was brisk as it responded to recent natural disasters, but was below elevated sales levels that resulted from Hurricane Harvey last year. MAP to Growth operating improvement progress was made in this segment, including the announced closure of one manufacturing facility.

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 first-half consolidated results?
 Fiscal 2019 first-half net sales improved 6.1% to $2.82 billion from $2.66 billion during the first six months of fiscal 2018. Organic growth was 5.4%, with acquisitions adding 2.1% and foreign currency translation reducing sales by 1.4%. Net income was $119.0 million compared to $211.9 million in the fiscal 2018 first half. Diluted EPS was $0.89 versus $1.56 a year ago. IBT was $158.5 million compared to $264.5 million reported in the fiscal 2018 first half. EBIT was $210.7 million versus the $309.4 million reported last year. Excluding charges for acquisitions, convertible debt extinguishment, asset write-offs, restructuring and other expenses, fiscal 2019 first-half adjusted EBIT was $279.7 million and diluted EPS was $1.28. Excluding a charge for a favorable discrete tax adjustment of $18.0 million, fiscal 2018 first-half adjusted diluted EPS was $1.43.

6.What were RPM’s first-half segment results?
 

Fiscal 2019 first-half sales in RPM’s industrial segment were up 4.7% to $1.50 billion from $1.43 billion in the fiscal 2018 first half. Organic sales increased 5.0%, while acquisition growth added 1.6%. Foreign currency translation decreased sales by 1.9%. IBT for the industrial segment was $123.5 million from $156.6 million in fiscal 2018. EBIT of $128.3 million compared to $161.7 million in the first half last year. Excluding the fiscal 2019 first-half charges mentioned above, industrial segment EBIT increased 1.9% to $164.7 million from adjusted EBIT of $161.7 million a year ago.

First-half sales for the consumer segment improved 8.9% to $917.8 million from $842.6 million a year ago. Organic sales growth was 7.6%, acquisitions added 2.3%, while foreign currency translation reduced sales by 1.0%. The consumer segment reported IBT of $92.5 million, compared to $117.5 million in the year-ago first half. EBIT of $92.8 million for the first six months of fiscal 2019 compares to $117.8 million in the prior-year period. Excluding charges previously mentioned, fiscal 2019 first-half consumer segment EBIT was $95.8 million.

Specialty segment sales grew 5.0% to $404.8 million from $385.6 million in the 2018 first half. Organic growth was 2.0%, while acquisitions added 3.3%. Foreign currency translation reduced sales by 0.3%. IBT for the specialty segment was $57.8 million compared to $67.6 million in fiscal 2018. For the first half of fiscal 2019, specialty segment EBIT was $57.6 million compared to $67.4 million a year ago. Excluding charges mentioned above, specialty segment EBIT was $64.7 million for the first six months of fiscal 2019.


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

For the first half of fiscal 2019, cash from operations grew by 28.7% to $148.3 million compared to $115.2 million a year ago. This increase of $33.1 million was due to improved working capital management. Capital expenditures of $57.8 million compared to $45.3 million during the first half of last year. Total debt at November 30, 2018, was $2.37 billion, compared to $2.14 billion at November 30, 2017, and $2.17 billion at May 31, 2018. At November 30, 2018, liquidity grew from the prior quarter to $1.1 billion, as a result of a recent refinancing of the company’s revolving line of credit. Total liquidity includes cash of $226.9 million and $862.9 million in long-term committed available credit.

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 is RPM's business outlook?
 

In the third quarter, from an operating perspective, revenue growth should remain in the low- to mid-single-digit range. While the company is experiencing the early benefits of its purchasing activities and softness in certain raw material categories, it is important to note that because RPM is on a FIFO basis for inventory, the benefits the company is beginning to experience on the raw material front will typically flow into its income statement 90 days later than if the company was under the LIFO method of accounting, as is the case with its large industry competitors. Further, due to three non-operating items, the company anticipates significantly lower reported earnings and earnings per share for the third quarter period ending February 28, 2019. These items are:

  • - An anticipated current tax rate of approximately 26.0% versus a benefit from certain tax items of $5.9 million last year;
  • - Compared to the prior-year realized gains on marketable securities, the combination of declines in the equities market in December and the new accounting standard that requires unrealized gains and losses on equity securities to be reflected in earnings, we expect a year-over-year negative impact during this year’s third quarter of $5 million to $6 million; and
  • - An adverse comparison to last year’s third quarter, during which we reversed approximately $3.4 million of long-term incentive compensation when it became clear that the targeted goals would not be reached.

Taken together, expectations of continuing raw material cost challenges and these non-operating items are likely to result in third-quarter EPS in the range of $0.10 to $0.12.

Although RPM is in the early innings of its restructuring efforts, good progress is being made, which has management excited about the prospects for the future. As the company works through the plan over the next few quarters, it will continue to adjust out associated charges to provide a clear picture of the initiative and its results.

Further details 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.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.

RPM announced on December 17, 2018, that its Rust-Oleum group acquired Siamons International Inc., the provider of the Concrobium brand of non-toxic specialty mold cleaners. Based in Ontario, Canada, Siamons has annual net sales of approximately $20 million. The Concrobium brand offers a wide range of non-toxic specialty mold cleaning solutions that can be used on both porous and non-porous surfaces, including wood, fabrics and drywall. It is sold primarily in big-box retailers, such as The Home Depot, Lowe’s and Menards. Among its leading products is Mold Control, the only solution that eliminates mold, prevents its future growth and cleans mold stains in one step, without the use of bleach, ammonia or VOCs. As part of this acquisition, Rust-Oleum will strengthen Concrobium’s retail presence, introduce it to new market categories, and leverage its customer base to accelerate distribution of other specialty cleaning brands in Canada. In addition, Rust-Oleum will expand Concrobium on an international scale.

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 videoto learn more about RPM’s approach to acquisitions.


10.What is RPM's dividend record?
 

RPM has increased the cash dividend paid to its stockholders for 45 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 $2.4 billion in cash dividends to its stockholders.

RPM’s last dividend increase was on October 4, 2018, when the board of directors raised RPM's quarterly cash dividend to $0.35 per common share, a 9.4% increase over the previous quarterly dividend rate of $0.32 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, 2018, RPM's return to shareholders has outperformed the S&P 500 Index by 16%, including the assumed reinvestment of dividends. RPM's annual dividend growth has been a critical element of its ability to significantly outperform this broad market index and to deliver value to RPM shareholders.


11.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 3, 2019, at 2:00 p.m. ET at:

Crowne Plaza Cleveland Airport Hotel
7230 Engle Road
Middleburg Heights, OH 44130c

A downloadable map and directions are available on the RPM website.


12.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.


13.How many RPM shares are outstanding?
 As of November 30, 2018, RPM's actual shares outstanding were 133.1 million, while average shares outstanding for computation of fiscal 2019 second-quarter basic and diluted earnings per share were 131.1 million and 131.7 million, respectively.

14.How many employees does RPM have?
 RPM's operating companies employ more than 14,500 people worldwide, plus hundreds of independent sales and technical representatives.

15.Are RPM products sold in other countries?
 Products manufactured by RPM's numerous operating companies are sold in approximately 170 countries and territories.

16.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.


17.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.


18.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.


19.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.


20.How often is stock purchased through the Dividend Reinvestment Plan?
 RPM stock is purchased within five days of receipt of your check. Timing of your cash payment should be made accordingly. Your check should be made payable to Shareowner Services and mailed to: EQ Shareowner Services, P.O. Box 64854, St. Paul, MN 55164-0854. Certified/overnight mail can be sent to: EQ Shareowner Services, 1110 Centre Pointe Curve, Suite 101, Mendota Heights, MN 55120-4100. The same amount of money need not be invested each month and there is no obligation to make voluntary cash payment each month.

21.Can I make voluntary cash payments by having my checking or savings account automatically debited?
 Yes. This service allows you to arrange for automatic monthly or quarterly investments in RPM stock by taking the funds directly from your checking or savings account and investing them in RPM stock. There is no cost to you for this service. To initiate automatic deductions, contact EQ at 1-800-988-5238 (or 651-450-4064 outside the U.S.) to request an authorization form to be completed by you and mailed to EQ Shareowner Services.

22.Can my cash dividend check be direct deposited into my bank account?
 Yes. Shareholders of record may have their dividends electronically deposited directly into their checking or savings account through the Direct Deposit Program at no charge. For information regarding this service, please contact EQ at 1-800-988-5238 (or 651-450-4064 outside the U.S.).



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