Record third-quarter sales of $1.43 billion, a 13% increase over prior-year period
Third-quarter net income was $33.0 million, income before income taxes was $40.5 million, diluted EPS was $0.25, and adjusted diluted EPS was $0.38
Record third-quarter EBIT of $66.9 million, a 2.3% increase over prior-year period
Record third-quarter adjusted EBIT of $80.6 million, a 0.8% increase over prior-year period
Fiscal 2022 fourth-quarter outlook calls for sales growth and adjusted EBIT growth in the low teens
MEDINA, Ohio--(BUSINESS WIRE)--RPM International Inc. (NYSE: RPM), a world leader in specialty coatings, sealants and building materials, today reported financial results for its fiscal 2022 third quarter ended February 28, 2022.
Third-Quarter Consolidated Results
Fiscal 2022 third-quarter net sales were a record $1.43 billion, an increase of 13.0% over the $1.27 billion reported a year ago. Third-quarter net income was $33.0 million, a 13.7% decrease compared to $38.2 million reported in the year-ago period, and diluted earnings per share (EPS) were $0.25, a decrease of 13.8% compared to $0.29 in the year-ago quarter. Income before income taxes (IBT) was $40.5 million compared to $55.9 million reported in the fiscal 2021 third quarter. RPM’s consolidated earnings before interest and taxes (EBIT) were a third-quarter record, up 2.3% to $66.9 million compared to $65.4 million reported in the fiscal 2021 third quarter.
The third quarter of fiscal 2022 and 2021 included certain restructuring and other items that are not indicative of RPM’s ongoing operations. These items are detailed in the tables below titled Supplemental Segment Information and Reconciliation of Reported to Adjusted Amounts. Excluding these items, RPM’s adjusted EBIT was a third-quarter record, up 0.8% to $80.6 million compared to $79.9 million during the year-ago period. In addition, the company has continued to exclude the impact of gains and losses from marketable securities from adjusted EPS, as their inherent volatility is outside of management’s control and cannot be predicted with any level of certainty.1 Excluding charges not indicative of ongoing operations, adjusted diluted EPS was $0.38 in the third quarter of both fiscal 2022 and 2021.
“RPM’s associates persevered through unprecedented supply chain challenges, Omicron-related disruptions and inflation to generate record EBIT and record sales during the third quarter despite a difficult comparison to the prior year,” stated Frank C. Sullivan, RPM chairman and CEO. “Adjusted EBIT growth was driven by three of our four segments, which leveraged selling price adjustments and operational improvements to the bottom line.
“We have been fast to respond to supply chain challenges by quickly scaling up in-house resin production at the manufacturing plant we acquired in Texas last September. Additionally, as a result of our on-going investments in the fastest-growing areas of our business, our high-performance building construction and coatings systems have achieved accelerated growth. Construction and industrial maintenance activity was robust, energy markets began to rebound and consumer takeaway remained strong.”
Third-Quarter Segment Sales and Earnings
Construction Products Group
Construction Products Group net sales increased 21.7% to a record $482.0 million during the fiscal 2022 third quarter, compared to fiscal 2021 third-quarter net sales of $396.0 million. Organic growth was 23.2% and acquisitions contributed 2.2% to sales. Foreign currency translation headwinds reduced sales by 3.7%. Segment IBT was $31.5 million compared to $14.4 million a year ago. EBIT was $33.2 million, up 101.4% compared to EBIT of $16.5 million in the fiscal 2021 third quarter. Excluding certain items not indicative of ongoing operations, fiscal 2022 adjusted EBIT increased 89.7% to a record $35.1 million compared to adjusted EBIT of $18.5 million reported during the year-ago period.
CPG record revenue growth was largely due to the continued success in promoting its innovative building envelope products and differentiated restoration solutions. CPG’s fastest-growing businesses were those providing roofing systems, insulated concrete forms, commercial sealants, as well as admixtures and repair products for concrete. The segment’s international operations generated strong top-line growth in local currencies, which was muted by the strengthening U.S. dollar. Despite a difficult prior-year comparison, CPG was able to increase adjusted EBIT and EBIT margin to third-quarter records as a result of improved product mix, volume growth and operational improvements. All of these factors, combined with selling price increases, helped to offset high raw material inflation.
Performance Coatings Group
Performance Coatings Group net sales were a record $270.9 million during the fiscal 2022 third quarter, an increase of 19.6% from net sales of $226.5 million reported a year ago. Organic sales increased 17.8% and acquisitions contributed 3.4%, which were partially offset by a foreign currency translation headwind of 1.6%. Segment IBT was $24.9 million compared with IBT of $12.2 million reported a year ago. EBIT was $24.8 million, an increase of 105.6% compared to EBIT of $12.1 million in the fiscal 2021 third quarter. Adjusted EBIT, which excludes charges not indicative of ongoing operations, increased 89.9% to a record $26.8 million during the third quarter of fiscal 2022 from adjusted EBIT of $14.1 million during the year-ago period.
PCG’s momentum accelerated in the third quarter, with all of its North American businesses generating double-digit organic sales growth. PCG’s businesses serving emerging markets experienced robust growth, and its European companies continued their steady rebound. Driving its strong top-line were increased industrial maintenance spending, recovery in energy markets and price increases. PCG’s best-performing businesses were those providing polymer flooring systems, corrosion control coatings and raised flooring systems. Adjusted EBIT increased as a result of volume growth, operational improvements and product mix. Adjusted EBIT margin was a record for the fiscal 2022 third quarter.
Specialty Products Group
The Specialty Products Group reported record net sales of $189.4 million during the third quarter of fiscal 2022, an increase of 11.9% compared to net sales of $169.2 million in the fiscal 2021 third quarter. Organic sales increased 11.9% and acquisitions added 0.8%, which were offset by unfavorable foreign currency translation of 0.8%. Segment IBT was $25.9 million compared to $24.6 million in the prior-year period. EBIT was $25.9 million, an increase of 5.2% compared to EBIT of $24.6 million in the fiscal 2021 third quarter. Adjusted EBIT, which excludes charges not indicative of ongoing operations, was a record $26.6 million in the fiscal 2022 third quarter, an increase of 5.4% compared to adjusted EBIT of $25.3 million in last year’s quarter.
SPG generated record sales as a result of strong performance at nearly all of its businesses, with the highest growth coming from those serving the OEM and food additives markets. In addition, sales of the disaster restoration equipment business rebounded after securing a supply of semiconductor chips and reconfiguring its products to accommodate them. SPG adjusted EBIT was a third-quarter record largely due to operational improvements.
Consumer Group net sales were a record $491.6 million during the third quarter of fiscal 2022, an increase of 2.9% compared to net sales of $477.7 million reported in the third quarter of fiscal 2021. Organic sales increased 3.6%, which was partially offset by unfavorable foreign currency translation of 0.7%. Consumer Group IBT was $16.9 million compared with IBT of $42.8 million in the prior-year period. EBIT was $16.8 million, a decrease of 60.7% compared to EBIT of $42.8 million in the fiscal 2021 third quarter. Excluding charges not indicative of ongoing operations, fiscal 2022 third-quarter adjusted EBIT was $17.2 million, a decrease of 63.9% compared to adjusted EBIT of $47.8 million reported during the prior-year period.
As expected, the Consumer Group was able to grow revenue as the severe alkyd resin shortages it had experienced were partially offset due to supply provided by the Texas-based manufacturing facility that RPM acquired in September. The Consumer Group also faced a challenging comparison to the prior-year period when sales increased 19.8% and adjusted EBIT increased 48.6% due to elevated demand for its home improvement products during the pandemic’s first phase. The segment’s fiscal 2022 third-quarter sales were still 23.3% above pre-pandemic levels of the third quarter of fiscal 2020.
Due to the nature of its products and the markets it serves, inflation has had a greater impact on the Consumer Group than RPM’s other segments. In addition, fiscal 2022 third-quarter adjusted EBIT was challenged by unreliable shipping and supply resulting from labor shortages caused by the Omicron variant. Partially offsetting these factors were price increases and operational improvements. The Consumer Group continues to implement price increases to catch up with inflation, build resilience in its supply chain, and invest in capacity and process improvements to meet customer demand.
Cash Flow and Financial Position
For the first nine months of fiscal 2022, cash from operations was $156.0 million, compared to $651.9 million during the first nine months of fiscal 2021. The decrease is primarily due to supply chain disruptions that have resulted in lower margins and higher raw material costs impacting inventory. Capital expenditures during the current nine-month period of $152.4 million compared to $103.2 million over the same time in fiscal 2021 as the company continued to invest in additional manufacturing capacity to meet increased demand. Total debt at the end of the first nine months of fiscal 2022 was $2.59 billion compared to $2.31 billion a year ago and $2.38 billion at May 31, 2021.
Total liquidity, including cash and committed revolving credit facilities, was $1.46 billion at February 28, 2022, compared to $1.46 billion at May 31, 2021. RPM’s liquidity remains high, enabling it to manage supply chain challenges while continuing to invest in operational improvements, acquisitions and expanded manufacturing capacity. During the first nine months of fiscal 2022, the company returned $180.1 million to shareholders through cash dividends and share repurchases.
In January, RPM completed a $300 million offering of 2.95% 10-year notes. The net proceeds are intended to be used to repay a portion of the outstanding borrowings under its revolving credit facility and for general corporate purposes.
Business Outlook
For the fiscal 2022 fourth quarter, RPM’s operations and those of its suppliers are expected to be impacted by ongoing supply chain challenges and raw material shortages, which will exert pressure on revenues and productivity. The strengthening U.S. dollar will also unfavorably impact the translation of RPM’s results in international markets. While RPM’s sales to Ukraine and Russia are immaterial, the Russian sanctions are exacerbating inflation of energy and transportation costs. They are also creating supply challenges for plant-based raw materials, as well as those that are derivatives of oil. Although it is too soon to discern, rising interest rates may slow business and consumer spending in the coming months.
In spite of these challenges, RPM expects to generate fiscal 2022 fourth-quarter consolidated sales growth in the low teens versus a difficult comparison to last year’s fourth-quarter sales, which grew 19.6%. The company also anticipates sales growth in the low teens in all four of its operating segments as a result of strategic investments it is making to capitalize on market opportunities and industry trends.
Consolidated adjusted EBIT for the fourth quarter of fiscal 2022 is anticipated to increase in the low teens versus the same period last year, when adjusted EBIT was up 10.6%. The company expects that earnings will continue to be affected by raw material, freight and wage inflation, as well as by the impact on sales volumes from operational disruptions caused by raw material shortages. The Consumer Group will disproportionately be impacted by these issues. Its EBIT margins have eroded all three quarters of this fiscal year due to inflationary pressures, which are more impactful on the Consumer Group than RPM’s other segments. The Consumer Group continues to work to neutralize these factors by improving operational efficiencies, implementing additional price increases to catch up with inflation and adding manufacturing capacity to improve resiliency.
RPM remains tightly focused on generating long-term, sustained value for its stakeholders by managing through macroeconomic challenges, accelerating top-line growth and continuously improving the efficiency of its operations.
Webcast and Conference Call Information
Management will host a conference call to discuss these results beginning at 10:00 a.m. EDT today. The call can be accessed by dialing 833-323-0996 or 236-712-2462 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 April 6, 2022, until 11:59 p.m. EDT on April 13, 2022. The replay can be accessed by dialing 800-585-8367 or 416-621-4642 for international callers. The access code is 4088503. The call also will be available both live and for replay, and as a written transcript, via the RPM website at www.RPMinc.com.
RPM International Inc. owns subsidiaries that are world leaders in specialty coatings, sealants, building materials and related services. The company operates across four reportable segments: consumer, construction products, performance coatings and specialty products. RPM has a diverse portfolio with hundreds of market-leading brands, including Rust-Oleum, DAP, Zinsser, Varathane, Day-Glo, Legend Brands, Stonhard, Carboline, Tremco and Dryvit. From homes and workplaces, to infrastructure and precious landmarks, RPM’s brands are trusted by consumers and professionals alike to help build a better world. The company employs approximately 15,500 individuals worldwide. Visit www.RPMinc.com to learn more.
For more information, contact Russell L. Gordon, vice president and chief financial officer, at 330-273-5090 or rgordon@rpminc.com.
1 These investments resulted in a net after-tax loss of $5.3 million for the third quarter of fiscal 2022 and a net after-tax gain of $5.5 million during the same quarter last year.
Use of Non-GAAP Financial Information
To supplement the financial information presented in accordance with Generally Accepted Accounting Principles in the United States (“GAAP”) in this earnings release, we use EBIT, adjusted EBIT and adjusted earnings per share, which are all non-GAAP financial measures. EBIT is defined as earnings (loss) before interest and taxes, with adjusted EBIT and adjusted earnings per share provided for the purpose of adjusting for one-off items impacting revenues and/or expenses that are not considered by management to be indicative of ongoing operations. 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 acquisitions, as opposed to segment operations. For that reason, we believe EBIT is also useful to investors as a metric in their investment decisions. EBIT should not be considered an alternative to, or more meaningful than, income before income taxes as determined in accordance with GAAP, since EBIT omits the impact of interest and investment income or expense in determining operating performance, which represent items necessary to our continued operations, given our level of indebtedness. 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. See the financial statement section of this earnings release for a reconciliation of EBIT and adjusted EBIT to income before income taxes, and adjusted earnings per share to earnings per share. We have not provided a reconciliation of our fourth-quarter fiscal 2022 adjusted EBIT guidance because material terms that impact such measures are not in our control and/or cannot be reasonably predicted, and therefore a reconciliation of such measures is not available without unreasonable effort.
Forward-Looking Statements
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 availability of raw materials, including assorted pigments, resins, solvents, and other natural gas- and oil-based materials; packaging, including plastic and metal 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) the timing of and the realization of anticipated cost savings from restructuring initiatives and the ability to identify additional cost savings opportunities; (j) risks related to the adequacy of our contingent liability reserves; (k) risks relating to the Covid pandemic; (l) risks related to adverse weather conditions or the impacts of climate change and natural disasters; and (m) 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, 2021, 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) | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
February 28, | February 28, | February 28, | February 28, | |||||||||||||
2022 |
2021 |
2022 |
2021 |
|||||||||||||
Net Sales | $ |
1,433,879 |
|
$ |
1,269,395 |
|
$ |
4,723,838 |
|
$ |
4,361,981 |
|
||||
Cost of Sales |
|
935,293 |
|
|
797,454 |
|
|
3,029,287 |
|
|
2,650,213 |
|
||||
Gross Profit |
|
498,586 |
|
|
471,941 |
|
|
1,694,551 |
|
|
1,711,768 |
|
||||
Selling, General & Administrative Expenses |
|
433,569 |
|
|
402,186 |
|
|
1,290,245 |
|
|
1,197,556 |
|
||||
Restructuring Expense |
|
1,140 |
|
|
3,129 |
|
|
5,128 |
|
|
12,280 |
|
||||
Interest Expense |
|
22,016 |
|
|
20,964 |
|
|
64,127 |
|
|
63,975 |
|
||||
Investment Expense (Income), Net |
|
4,355 |
|
|
(11,454 |
) |
|
1,421 |
|
|
(33,735 |
) |
||||
(Gain) on Sales of Assets, Net |
|
(249 |
) |
|
- |
|
|
(42,491 |
) |
|
- |
|
||||
Other (Income) Expense, Net |
|
(2,742 |
) |
|
1,256 |
|
|
(9,001 |
) |
|
7,507 |
|
||||
Income Before Income Taxes |
|
40,497 |
|
|
55,860 |
|
|
385,122 |
|
|
464,185 |
|
||||
Provision for Income Taxes |
|
7,248 |
|
|
17,394 |
|
|
91,962 |
|
|
117,049 |
|
||||
Net Income |
|
33,249 |
|
|
38,466 |
|
|
293,160 |
|
|
347,136 |
|
||||
Less: Net Income Attributable to Noncontrolling Interests |
|
230 |
|
|
224 |
|
|
684 |
|
|
640 |
|
||||
Net Income Attributable to RPM International Inc. Stockholders | $ |
33,019 |
|
$ |
38,242 |
|
$ |
292,476 |
|
$ |
346,496 |
|
||||
Earnings per share of common stock attributable to | ||||||||||||||||
RPM International Inc. Stockholders: | ||||||||||||||||
Basic | $ |
0.26 |
|
$ |
0.30 |
|
$ |
2.27 |
|
$ |
2.68 |
|
||||
Diluted | $ |
0.25 |
|
$ |
0.29 |
|
$ |
2.26 |
|
$ |
2.66 |
|
||||
Average shares of common stock outstanding - basic |
|
127,943 |
|
|
128,447 |
|
|
128,013 |
|
|
128,455 |
|
||||
Average shares of common stock outstanding - diluted |
|
129,702 |
|
|
129,949 |
|
|
129,622 |
|
|
129,052 |
|
SUPPLEMENTAL SEGMENT INFORMATION | ||||||||||||||||
IN THOUSANDS | ||||||||||||||||
(Unaudited) | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
February 28, | February 28, | February 28, | February 28, | |||||||||||||
2022 |
2021 |
2022 |
2021 |
|||||||||||||
Net Sales: | ||||||||||||||||
CPG Segment | $ |
482,026 |
|
$ |
395,969 |
|
$ |
1,740,578 |
|
$ |
1,447,179 |
|
||||
PCG Segment |
|
270,865 |
|
|
226,523 |
|
|
858,987 |
|
|
745,145 |
|
||||
SPG Segment |
|
189,371 |
|
|
169,161 |
|
|
565,050 |
|
|
503,239 |
|
||||
Consumer Segment |
|
491,617 |
|
|
477,742 |
|
|
1,559,223 |
|
|
1,666,418 |
|
||||
Total | $ |
1,433,879 |
|
$ |
1,269,395 |
|
$ |
4,723,838 |
|
$ |
4,361,981 |
|
||||
Income Before Income Taxes: | ||||||||||||||||
CPG Segment | ||||||||||||||||
Income Before Income Taxes (a) | $ |
31,498 |
|
$ |
14,431 |
|
$ |
276,223 |
|
$ |
184,613 |
|
||||
Interest (Expense), Net (b) |
|
(1,735 |
) |
|
(2,074 |
) |
|
(5,254 |
) |
|
(6,325 |
) |
||||
EBIT (c) |
|
33,233 |
|
|
16,505 |
|
|
281,477 |
|
|
190,938 |
|
||||
MAP to Growth & other cost-savings related initiatives (d) |
|
1,034 |
|
|
1,987 |
|
|
3,258 |
|
|
8,646 |
|
||||
Unusual executive costs, net of insurance proceeds (f) |
|
805 |
|
|
- |
|
|
805 |
|
|
- |
|
||||
Adjustment to Exit Flowcrete China (g) |
|
- |
|
|
- |
|
|
- |
|
|
(305 |
) |
||||
(Gain) on Sales of Assets, Net (i) |
|
- |
|
|
- |
|
|
(41,906 |
) |
|
- |
|
||||
Adjusted EBIT | $ |
35,072 |
|
$ |
18,492 |
|
$ |
243,634 |
|
$ |
199,279 |
|
||||
PCG Segment | ||||||||||||||||
Income Before Income Taxes (a) | $ |
24,917 |
|
$ |
12,158 |
|
$ |
97,849 |
|
$ |
64,719 |
|
||||
Interest Income (Expense), Net (b) |
|
76 |
|
|
75 |
|
|
407 |
|
|
53 |
|
||||
EBIT (c) |
|
24,841 |
|
|
12,083 |
|
|
97,442 |
|
|
64,666 |
|
||||
MAP to Growth & other cost-savings related initiatives (d) |
|
1,974 |
|
|
2,039 |
|
|
5,708 |
|
|
8,364 |
|
||||
Acquisition-related costs (e) |
|
- |
|
|
- |
|
|
339 |
|
|
- |
|
||||
Unusual executive costs, net of insurance proceeds (f) |
|
- |
|
|
- |
|
|
472 |
|
|
- |
|
||||
Adjusted EBIT | $ |
26,815 |
|
$ |
14,122 |
|
$ |
103,961 |
|
$ |
73,030 |
|
||||
SPG Segment | ||||||||||||||||
Income Before Income Taxes (a) | $ |
25,881 |
|
$ |
24,560 |
|
$ |
71,028 |
|
$ |
73,415 |
|
||||
Interest (Expense), Net (b) |
|
(18 |
) |
|
(64 |
) |
|
(82 |
) |
|
(219 |
) |
||||
EBIT (c) |
|
25,899 |
|
|
24,624 |
|
|
71,110 |
|
|
73,634 |
|
||||
MAP to Growth & other cost-savings related initiatives (d) |
|
790 |
|
|
649 |
|
|
1,422 |
|
|
5,332 |
|
||||
Acquisition-related costs (e) |
|
(45 |
) |
|
- |
|
|
(45 |
) |
|
- |
|
||||
Adjusted EBIT | $ |
26,644 |
|
$ |
25,273 |
|
$ |
72,487 |
|
$ |
78,966 |
|
||||
Consumer Segment | ||||||||||||||||
Income Before Income Taxes (a) | $ |
16,893 |
|
$ |
42,724 |
|
$ |
95,912 |
|
$ |
263,813 |
|
||||
Interest Income (Expense), Net (b) |
|
62 |
|
|
(60 |
) |
|
211 |
|
|
(187 |
) |
||||
EBIT (c) |
|
16,831 |
|
|
42,784 |
|
|
95,701 |
|
|
264,000 |
|
||||
MAP to Growth & other cost-savings related initiatives (d) |
|
394 |
|
|
4,977 |
|
|
1,254 |
|
|
9,976 |
|
||||
Acquisition-related costs (e) |
|
- |
|
|
- |
|
|
- |
|
|
1,178 |
|
||||
Unusual executive costs, net of insurance proceeds (f) |
|
- |
|
|
- |
|
|
776 |
|
|
- |
|
||||
Adjusted EBIT | $ |
17,225 |
|
$ |
47,761 |
|
$ |
97,731 |
|
$ |
275,154 |
|
||||
Corporate/Other | ||||||||||||||||
(Loss) Before Income Taxes (a) | $ |
(58,692 |
) |
$ |
(38,013 |
) |
$ |
(155,890 |
) |
$ |
(122,375 |
) |
||||
Interest (Expense), Net (b) |
|
(24,756 |
) |
|
(7,387 |
) |
|
(60,830 |
) |
|
(23,562 |
) |
||||
EBIT (c) |
|
(33,936 |
) |
|
(30,626 |
) |
|
(95,060 |
) |
|
(98,813 |
) |
||||
MAP to Growth & other cost-savings related initiatives (d) |
|
7,114 |
|
|
6,217 |
|
|
17,272 |
|
|
20,025 |
|
||||
Acquisition-related costs (e) |
|
1,263 |
|
|
- |
|
|
2,063 |
|
|
- |
|
||||
Unusual executive costs, net of insurance proceeds (f) |
|
360 |
|
|
(1,324 |
) |
|
2,625 |
|
|
(1,267 |
) |
||||
Settlement for SEC Investigation & Enforcement Action (h) |
|
- |
|
|
- |
|
|
- |
|
|
2,000 |
|
||||
Adjusted EBIT | $ |
(25,199 |
) |
$ |
(25,733 |
) |
$ |
(73,100 |
) |
$ |
(78,055 |
) |
||||
TOTAL CONSOLIDATED | ||||||||||||||||
Income Before Income Taxes (a) | $ |
40,497 |
|
$ |
55,860 |
|
$ |
385,122 |
|
$ |
464,185 |
|
||||
Interest (Expense) |
|
(22,016 |
) |
|
(20,964 |
) |
|
(64,127 |
) |
|
(63,975 |
) |
||||
Investment (Expense) Income, Net |
|
(4,355 |
) |
|
11,454 |
|
|
(1,421 |
) |
|
33,735 |
|
||||
EBIT (c) |
|
66,868 |
|
|
65,370 |
|
|
450,670 |
|
|
494,425 |
|
||||
MAP to Growth & other cost-savings related initiatives (d) |
|
11,306 |
|
|
15,869 |
|
|
28,914 |
|
|
52,343 |
|
||||
Acquisition-related costs (e) |
|
1,218 |
|
|
- |
|
|
2,357 |
|
|
1,178 |
|
||||
Unusual executive costs, net of insurance proceeds (f) |
|
1,165 |
|
|
(1,324 |
) |
|
4,678 |
|
|
(1,267 |
) |
||||
Adjustment to Exit Flowcrete China (g) |
|
- |
|
|
- |
|
|
- |
|
|
(305 |
) |
||||
Settlement for SEC Investigation & Enforcement Action (h) |
|
- |
|
|
- |
|
|
- |
|
|
2,000 |
|
||||
(Gain) on Sales of Assets, Net (i) |
|
- |
|
|
- |
|
|
(41,906 |
) |
|
- |
|
||||
Adjusted EBIT | $ |
80,557 |
|
$ |
79,915 |
|
$ |
444,713 |
|
$ |
548,374 |
|
||||
(a) |
The presentation includes a reconciliation of Income (Loss) Before Income Taxes, a measure defined by Generally Accepted Accounting Principles in the United States (GAAP), to EBIT and Adjusted EBIT. | ||||||||||
(b) |
Interest Income (Expense), Net includes the combination of Interest Income (Expense) and Investment Income (Expense), Net. | ||||||||||
(c) |
EBIT is defined as earnings (loss) before interest and taxes, with Adjusted EBIT provided for the purpose of adjusting for items impacting earnings that are not considered by management to be indicative of ongoing operations. We evaluate the profit performance of our segments based on income before income taxes, but also look to EBIT, or adjusted EBIT, as a performance evaluation measure because interest expense is essentially related to corporate functions, as opposed to segment operations. For that reason, we believe EBIT is also useful to investors as a metric in their investment decisions. EBIT should not be considered an alternative to, or more meaningful than, income before income taxes as determined in accordance with GAAP, since EBIT omits the impact of interest and investment income or expense in determining operating performance, which represent items necessary to our continued operations, given our level of indebtedness. 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. | ||||||||||
|
|||||||||||
|
|||||||||||
|
|||||||||||
|
|||||||||||
|
|||||||||||
(d) |
Reflects restructuring and other charges, almost all of which have been incurred in relation to our Margin Acceleration Plan initiatives, as follows: "Inventory-related charges," & "Accelerated Expense - Other," which have been recorded in Cost of Goods Sold; "Headcount reductions, closures of facilities and related costs, and accelerated vesting of equity awards," all of which have been recorded in Restructuring Expense; "Accelerated Expense - Other," "Receivable writeoffs (recoveries)," "ERP consolidation plan," "Professional Fees," "Unusual costs triggered by executive departures," "Divestitures," & "Discontinued Product Line," which have been recorded in Selling, General & Administrative Expenses. |
||||||||||
(e) |
Acquisition costs reflect amounts included in gross profit for inventory step-ups, as well as external consulting costs included in selling, general & administrative expenses for costs associated with due diligence activities related to potential acquisition targets. | ||||||||||
(f) |
Reflects unusual compensation costs, net of insurance proceeds, recorded unrelated to our MAP to Growth initiative, including stock and deferred compensation plan arrangements. | ||||||||||
(g) |
In FY18, we added back a charge to exit our Flowcrete China business. Included in that charge from FY18 was an accrual for a contingent liability. During Q2 2021, the contingent liability was resolved, and a favorable adjustment of ~ $0.3 million was recognized. | ||||||||||
(h) |
On December 22, 2020, the Court entered its Final Judgment resolving the legacy "SEC Investigation & Enforcement Action." We agreed to pay a civil monetary penalty of $2.0 million under Section 21(d)(3) of the Exchange Act. The settlement amount was accrued for in our consolidated financial statements as of the period ending November 30, 2020, and paid during the period ending February 28, 2021. | ||||||||||
(i) |
Reflects the net gain associated with the sale of certain real property assets within our CPG segment during Q2 2022. |
SUPPLEMENTAL INFORMATION | |||||||||||||||
RECONCILIATION OF "REPORTED" TO "ADJUSTED" AMOUNTS | |||||||||||||||
(Unaudited) | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
February 28, | February 28, | February 28, | February 28, | ||||||||||||
2022 |
2021 |
2022 |
2021 |
||||||||||||
Reconciliation of Reported Earnings per Diluted Share to Adjusted Earnings per Diluted Share (All amounts presented after-tax): | |||||||||||||||
Reported Earnings per Diluted Share | $ |
0.25 |
$ |
0.29 |
|
$ |
2.26 |
|
$ |
2.66 |
|
||||
MAP to Growth & other cost-savings related initiatives (d) |
|
0.07 |
|
0.10 |
|
|
0.17 |
|
|
0.32 |
|
||||
Acquisition-related costs (e) |
|
0.01 |
|
- |
|
|
0.01 |
|
|
0.01 |
|
||||
Unusual executive costs, net of insurance proceeds (f) |
|
0.01 |
|
(0.01 |
) |
|
0.03 |
|
|
(0.01 |
) |
||||
Settlement for SEC Investigation & Enforcement Action (h) |
|
- |
|
- |
|
|
- |
|
|
0.01 |
|
||||
(Gain) on Sales of Assets, Net (i) |
|
- |
|
- |
|
|
(0.28 |
) |
|
- |
|
||||
Discrete Tax Adjustment (j) |
|
- |
|
0.04 |
|
|
- |
|
|
0.04 |
|
||||
Investment returns (k) |
|
0.04 |
|
(0.04 |
) |
|
0.05 |
|
|
(0.15 |
) |
||||
Adjusted Earnings per Diluted Share (l) | $ |
0.38 |
$ |
0.38 |
|
$ |
2.24 |
|
$ |
2.88 |
|
(d) |
Reflects restructuring and other charges, almost all of which have been incurred in relation to our Margin Acceleration Plan initiatives, as follows: "Inventory-related charges," & "Accelerated Expense - Other," which have been recorded in Cost of Goods Sold; "Headcount reductions, closures of facilities and related costs, and accelerated vesting of equity awards," all of which have been recorded in Restructuring Expense; "Accelerated Expense - Other," "Receivable writeoffs (recoveries)," "ERP consolidation plan," "Professional Fees," "Unusual costs triggered by executive departures," "Divestitures," & "Discontinued Product Line," all of which have been recorded in Selling, General & Administrative Expenses. |
|||
(e) |
Acquisition costs reflect amounts included in gross profit for inventory step-ups, as well as external consulting costs included in selling, general & administrative expenses for costs associated with due diligence activities related to potential acquisition targets. | |||
(f) |
Reflects unusual compensation costs, net of insurance proceeds, recorded unrelated to our MAP to Growth initiative, including stock and deferred compensation plan arrangements. | |||
(h) |
On December 22, 2020, the Court entered its Final Judgment resolving the legacy "SEC Investigation & Enforcement Action." We agreed to pay a civil monetary penalty of $2.0 million under Section 21(d)(3) of the Exchange Act. The settlement amount was accrued for in our consolidated financial statements as of the period ending November 30, 2020, and paid during the period ending February 28, 2021. | |||
(i) |
Reflects the net gain associated with the sale of certain real property assets within our CPG segment during Q2 2022. | |||
(j) |
Income tax charge for an increase to our deferred income tax liability for withholding taxes on additional unremitted foreign earnings not considered permanently reinvested. | |||
(k) |
Investment returns include realized net gains and losses on sales of investments and unrealized net gains and losses on equity securities, which are adjusted due to their inherent volatility. Management does not consider these gains and losses, which cannot be predicted with any level of certainty, to be reflective of the Company's core business operations. | |||
|
||||
(l) |
Adjusted EPS is provided for the purpose of adjusting diluted earnings per share for items impacting earnings that are not considered by management to be indicative of ongoing operations. |
CONSOLIDATED BALANCE SHEETS | ||||||||||||
IN THOUSANDS | ||||||||||||
(Unaudited) | ||||||||||||
February 28, 2022 | February 28, 2021 | May 31, 2021 | ||||||||||
Assets | ||||||||||||
Current Assets | ||||||||||||
Cash and cash equivalents | $ |
193,191 |
|
$ |
249,214 |
|
$ |
246,704 |
|
|||
Trade accounts receivable |
|
1,135,190 |
|
|
1,050,986 |
|
|
1,336,728 |
|
|||
Allowance for doubtful accounts |
|
(49,794 |
) |
|
(52,203 |
) |
|
(55,922 |
) |
|||
Net trade accounts receivable |
|
1,085,396 |
|
|
998,783 |
|
|
1,280,806 |
|
|||
Inventories |
|
1,191,791 |
|
|
913,302 |
|
|
938,095 |
|
|||
Prepaid expenses and other current assets |
|
339,977 |
|
|
286,274 |
|
|
316,399 |
|
|||
Total current assets |
|
2,810,355 |
|
|
2,447,573 |
|
|
2,782,004 |
|
|||
Property, Plant and Equipment, at Cost |
|
2,080,631 |
|
|
1,887,807 |
|
|
1,967,482 |
|
|||
Allowance for depreciation |
|
(1,031,613 |
) |
|
(985,176 |
) |
|
(1,002,300 |
) |
|||
Property, plant and equipment, net |
|
1,049,018 |
|
|
902,631 |
|
|
965,182 |
|
|||
Other Assets | ||||||||||||
Goodwill |
|
1,343,962 |
|
|
1,310,762 |
|
|
1,345,754 |
|
|||
Other intangible assets, net of amortization |
|
601,641 |
|
|
612,702 |
|
|
628,693 |
|
|||
Operating lease right-of-use assets |
|
312,157 |
|
|
292,224 |
|
|
300,827 |
|
|||
Deferred income taxes, non-current |
|
23,122 |
|
|
37,991 |
|
|
26,804 |
|
|||
Other |
|
190,347 |
|
|
188,502 |
|
|
203,705 |
|
|||
Total other assets |
|
2,471,229 |
|
|
2,442,181 |
|
|
2,505,783 |
|
|||
Total Assets | $ |
6,330,602 |
|
$ |
5,792,385 |
|
$ |
6,252,969 |
|
|||
Liabilities and Stockholders' Equity | ||||||||||||
Current Liabilities | ||||||||||||
Accounts payable | $ |
675,529 |
|
$ |
569,002 |
|
$ |
717,176 |
|
|||
Current portion of long-term debt |
|
703,250 |
|
|
1,027 |
|
|
1,282 |
|
|||
Accrued compensation and benefits |
|
206,632 |
|
|
190,167 |
|
|
258,380 |
|
|||
Accrued losses |
|
25,646 |
|
|
23,457 |
|
|
29,054 |
|
|||
Other accrued liabilities |
|
323,846 |
|
|
303,852 |
|
|
325,522 |
|
|||
Total current liabilities |
|
1,934,903 |
|
|
1,087,505 |
|
|
1,331,414 |
|
|||
Long-Term Liabilities | ||||||||||||
Long-term debt, less current maturities |
|
1,883,106 |
|
|
2,310,483 |
|
|
2,378,544 |
|
|||
Operating lease liabilities |
|
270,293 |
|
|
251,563 |
|
|
257,415 |
|
|||
Other long-term liabilities |
|
308,340 |
|
|
502,724 |
|
|
436,176 |
|
|||
Deferred income taxes |
|
97,315 |
|
|
90,440 |
|
|
106,395 |
|
|||
Total long-term liabilities |
|
2,559,054 |
|
|
3,155,210 |
|
|
3,178,530 |
|
|||
Total liabilities |
|
4,493,957 |
|
|
4,242,715 |
|
|
4,509,944 |
|
|||
Stockholders' Equity | ||||||||||||
Preferred stock; none issued |
|
- |
|
|
- |
|
|
- |
|
|||
Common stock (outstanding 129,496; 129,815; 129,573) |
|
1,295 |
|
|
1,298 |
|
|
1,295 |
|
|||
Paid-in capital |
|
1,085,317 |
|
|
1,045,585 |
|
|
1,055,400 |
|
|||
Treasury stock, at cost |
|
(691,418 |
) |
|
(621,836 |
) |
|
(653,006 |
) |
|||
Accumulated other comprehensive (loss) |
|
(552,308 |
) |
|
(622,937 |
) |
|
(514,884 |
) |
|||
Retained earnings |
|
1,992,160 |
|
|
1,745,375 |
|
|
1,852,259 |
|
|||
Total RPM International Inc. stockholders' equity |
|
1,835,046 |
|
|
1,547,485 |
|
|
1,741,064 |
|
|||
Noncontrolling interest |
|
1,599 |
|
|
2,185 |
|
|
1,961 |
|
|||
Total equity |
|
1,836,645 |
|
|
1,549,670 |
|
|
1,743,025 |
|
|||
Total Liabilities and Stockholders' Equity | $ |
6,330,602 |
|
$ |
5,792,385 |
|
$ |
6,252,969 |
|
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
IN THOUSANDS | ||||||||
(Unaudited) | ||||||||
Nine Months Ended | ||||||||
February 28, | February 28, | |||||||
2022 |
2021 |
|||||||
Cash Flows From Operating Activities: | ||||||||
Net income | $ |
293,160 |
|
$ |
347,136 |
|
||
Adjustments to reconcile net income to net | ||||||||
cash provided by operating activities: | ||||||||
Depreciation and amortization |
|
114,295 |
|
|
109,119 |
|
||
Restructuring charges, net of payments |
|
(2,341 |
) |
|
(3,830 |
) |
||
Fair value adjustments to contingent earnout obligations |
|
2,470 |
|
|
1,829 |
|
||
Deferred income taxes |
|
(16,908 |
) |
|
24,473 |
|
||
Stock-based compensation expense |
|
29,287 |
|
|
31,157 |
|
||
Net loss (gain) on marketable securities |
|
10,032 |
|
|
(29,652 |
) |
||
Net (gain) on sales of assets |
|
(42,491 |
) |
|
- |
|
||
Other |
|
112 |
|
|
(394 |
) |
||
Changes in assets and liabilities, net of effect | ||||||||
from purchases and sales of businesses: | ||||||||
Decrease in receivables |
|
170,513 |
|
|
181,032 |
|
||
(Increase) in inventory |
|
(273,519 |
) |
|
(57,702 |
) |
||
Decrease in prepaid expenses and other |
|
506 |
|
|
19,133 |
|
||
current and long-term assets | ||||||||
(Decrease) increase in accounts payable |
|
(9,884 |
) |
|
31,825 |
|
||
(Decrease) in accrued compensation and benefits |
|
(47,442 |
) |
|
(1,107 |
) |
||
(Decrease) increase in accrued losses |
|
(2,985 |
) |
|
3,054 |
|
||
(Decrease) in other accrued liabilities |
|
(68,854 |
) |
|
(7,615 |
) |
||
Other |
|
- |
|
|
3,448 |
|
||
Cash Provided By Operating Activities |
|
155,951 |
|
|
651,906 |
|
||
Cash Flows From Investing Activities: | ||||||||
Capital expenditures |
|
(152,401 |
) |
|
(103,226 |
) |
||
Acquisition of businesses, net of cash acquired |
|
(116,457 |
) |
|
(114,355 |
) |
||
Purchase of marketable securities |
|
(13,674 |
) |
|
(30,784 |
) |
||
Proceeds from sales of marketable securities |
|
9,004 |
|
|
28,773 |
|
||
Proceeds from sales of assets |
|
51,913 |
|
|
- |
|
||
Other |
|
(55 |
) |
|
1,664 |
|
||
Cash (Used For) Investing Activities |
|
(221,670 |
) |
|
(217,928 |
) |
||
Cash Flows From Financing Activities: | ||||||||
Additions to long-term and short-term debt |
|
300,967 |
|
|
- |
|
||
Reductions of long-term and short-term debt |
|
(72,493 |
) |
|
(249,518 |
) |
||
Cash dividends |
|
(152,575 |
) |
|
(145,457 |
) |
||
Repurchases of common stock |
|
(27,500 |
) |
|
(24,628 |
) |
||
Shares of common stock returned for taxes |
|
(10,906 |
) |
|
(17,083 |
) |
||
Payments of acquisition-related contingent consideration |
|
(5,774 |
) |
|
(2,218 |
) |
||
Other |
|
(3,824 |
) |
|
(786 |
) |
||
Cash Provided By (Used For) Financing Activities |
|
27,895 |
|
|
(439,690 |
) |
||
Effect of Exchange Rate Changes on Cash and | ||||||||
Cash Equivalents |
|
(15,689 |
) |
|
21,510 |
|
||
Net Change in Cash and Cash Equivalents |
|
(53,513 |
) |
|
15,798 |
|
||
Cash and Cash Equivalents at Beginning of Period |
|
246,704 |
|
|
233,416 |
|
||
Cash and Cash Equivalents at End of Period | $ |
193,191 |
|
$ |
249,214 |
|
Рекордный объем продаж в третьем квартале составил 1,43 миллиарда долларов, что на 13% больше, чем за аналогичный период прошлого года
Чистая прибыль за третий квартал составила $33,0 млн, доход до вычета налогов на прибыль составил $40,5 млн, разводненная прибыль на акцию составила $0,25, а скорректированная разводненная прибыль на акцию составила $0,38
Рекордный показатель EBIT в третьем квартале составил 66,9 млн долларов, что на 2,3% больше, чем за аналогичный период прошлого года
Рекордный скорректированный показатель EBIT в третьем квартале составил 80,6 млн долларов, что на 0,8% больше, чем за аналогичный период прошлого года
Прогноз на четвертый квартал 2022 финансового года предусматривает рост продаж и скорректированный рост EBIT в условиях низких цен
МЕДИНА, Огайо -- (BUSINESS WIRE)--RPM International Inc. (NYSE: RPM), мировой лидер в производстве специальных покрытий, герметиков и строительных материалов, сегодня отчиталась о финансовых результатах за третий квартал 2022 финансового года, закончившийся 28 февраля 2022 года.
Консолидированные результаты за Третий квартал
Чистые продажи в третьем квартале 2022 финансового года составили рекордные 1,43 миллиарда долларов, увеличившись на 13,0% по сравнению с 1,27 миллиарда долларов, о которых сообщалось год назад. Чистая прибыль за третий квартал составила 33,0 млн долларов, что на 13,7% меньше по сравнению с 38,2 млн долларов, о которых сообщалось годом ранее, а разводненная прибыль на акцию (EPS) составила 0,25 доллара, что на 13,8% меньше по сравнению с 0,29 доллара в предыдущем квартале. Доход до вычета подоходного налога (IBT) составил 40,5 млн долларов по сравнению с 55,9 млн долларов, о которых сообщалось в третьем квартале 2021 финансового года. Консолидированная прибыль RPM до вычета процентов и налогов (EBIT) стала рекордной в третьем квартале, увеличившись на 2,3% до 66,9 млн долларов по сравнению с 65,4 млн долларов, о которых сообщалось в третьем квартале 2021 финансового года.
Третий квартал 2022 и 2021 финансовых годов включал определенную реструктуризацию и другие статьи, которые не указывают на текущую деятельность RPM. Эти статьи подробно описаны в таблицах ниже, озаглавленных "Дополнительная информация по сегментам и сверка приведенных в отчетности скорректированных сумм". Без учета этих статей скорректированный показатель EBIT RPM стал рекордным в третьем квартале, увеличившись на 0,8% до 80,6 млн долларов по сравнению с 79,9 млн долларов за аналогичный период прошлого года. Кроме того, компания продолжала исключать влияние прибылей и убытков по рыночным ценным бумагам из скорректированной прибыли на акцию, поскольку присущая им волатильность находится вне контроля руководства и не может быть предсказана с какой-либо степенью определенности.1 Без учета расходов, не связанных с текущей деятельностью, скорректированная разводненная прибыль на акцию составила 0,38 долл. квартал как 2022, так и 2021 финансовых годов.
“Сотрудники RPM выстояли, несмотря на беспрецедентные проблемы в цепочке поставок, сбои, связанные с Omicron, и инфляцию, чтобы добиться рекордной EBIT и рекордных продаж в третьем квартале, несмотря на сложное сравнение с предыдущим годом”, - заявил Фрэнк С. Салливан, председатель и главный исполнительный директор RPM. “Скорректированный рост EBIT был обусловлен тремя из наших четырех сегментов, которые использовали корректировку отпускных цен и операционные улучшения для получения прибыли.
“Мы быстро отреагировали на проблемы в цепочке поставок, быстро увеличив собственное производство смолы на заводе-изготовителе, который мы приобрели в Техасе в сентябре прошлого года. Кроме того, в результате наших постоянных инвестиций в наиболее быстрорастущие области нашего бизнеса наши высокопроизводительные системы строительства зданий и покрытий добились ускоренного роста. Активность в строительстве и промышленном обслуживании была высокой, энергетические рынки начали восстанавливаться, а потребительский спрос оставался высоким”.
Продажи и прибыль в сегменте за третий квартал
Группа строительных товаров
Чистые продажи Группы строительных товаров выросли на 21,7% до рекордных 482,0 млн долларов в третьем квартале 2022 финансового года по сравнению с чистыми продажами в третьем квартале 2021 финансового года в размере 396,0 млн долларов. Органический рост составил 23,2%, а доля приобретений в продажах составила 2,2%. Встречный ветер при пересчете иностранной валюты снизил продажи на 3,7%. Сегмент IBT составил $31,5 млн по сравнению с $14,4 млн годом ранее. Показатель EBIT составил $33,2 млн, что на 101,4% больше по сравнению с показателем EBIT в размере $16,5 млн в третьем квартале 2021 финансового года. За исключением некоторых статей, не указывающих на текущие операции, скорректированный показатель EBIT в 2022 финансовом году увеличился на 89,7% до рекордных 35,1 млн долларов по сравнению с скорректированным показателем EBIT в размере 18,5 млн долларов, о котором сообщалось за аналогичный период прошлого года.
Рекордный рост выручки CPG был во многом обусловлен продолжающимся успехом в продвижении своих инновационных продуктов для ограждающих конструкций зданий и дифференцированных решений для реставрации. Наиболее быстрорастущими предприятиями CPG были те, которые поставляли кровельные системы, изолированные бетонные формы, коммерческие герметики, а также добавки и ремонтные средства для бетона. Международные операции сегмента привели к значительному росту выручки в местных валютах, который был приглушен укреплением доллара США. Несмотря на сложное сравнение с предыдущим годом, CPG смогла увеличить скорректированный показатель EBIT и рентабельность по EBIT до рекордных показателей третьего квартала в результате улучшения ассортимента продукции, роста объемов и улучшения операционной деятельности. Все эти факторы в сочетании с повышением отпускных цен помогли компенсировать высокую инфляцию цен на сырье.
Группа эксплуатационных покрытий
Чистые продажи Performance Coatings Group в третьем квартале 2022 финансового года составили рекордные 270,9 млн долларов, увеличившись на 19,6% по сравнению с чистыми продажами в 226,5 млн долларов, о которых сообщалось год назад. Органический объем продаж увеличился на 17,8%, а объем приобретений составил 3,4%, что было частично компенсировано ростом пересчета иностранной валюты на 1,6%. Выручка сегмента IBT составила 24,9 млн долларов по сравнению с 12,2 млн долларов, о которых сообщалось год назад. Показатель EBIT составил 24,8 млн долларов, увеличившись на 105,6% по сравнению с показателем EBIT в 12,1 млн долларов в третьем квартале 2021 финансового года. Скорректированный показатель EBIT, который исключает расходы, не связанные с текущей деятельностью, увеличился на 89,9% до рекордных 26,8 млн долларов в третьем квартале 2022 финансового года с скорректированного показателя EBIT в 14,1 млн долларов за аналогичный период прошлого года.
Темпы роста PCG ускорились в третьем квартале, когда все ее североамериканские предприятия продемонстрировали двузначный органический рост продаж. Предприятия PCG, обслуживающие развивающиеся рынки, демонстрировали уверенный рост, а ее европейские компании продолжали неуклонно восстанавливаться. Высокие показатели выручки были обусловлены увеличением расходов на техническое обслуживание промышленности, восстановлением на энергетических рынках и ростом цен. Наиболее успешными предприятиями PCG были компании, занимающиеся производством полимерных напольных покрытий, антикоррозийных покрытий и фальшполов. Скорректированный показатель EBIT увеличился в результате роста объемов, улучшения операционной деятельности и ассортимента продукции. Скорректированная рентабельность по EBIT стала рекордной для третьего квартала 2022 финансового года.
Группа специализированных продуктов
Группа специализированных продуктов сообщила о рекордных чистых продажах в размере 189,4 млн долларов в третьем квартале 2022 финансового года, увеличившись на 11,9% по сравнению с чистыми продажами в размере 169,2 млн долларов в третьем квартале 2021 финансового года. Органические продажи выросли на 11,9%, а приобретения прибавили 0,8%, что было компенсировано неблагоприятным пересчетом иностранной валюты на 0,8%. Выручка сегмента IBT составила 25,9 млн долларов США по сравнению с 24,6 млн долларов США за аналогичный период прошлого года. Показатель EBIT составил $25,9 млн, увеличившись на 5,2% по сравнению с показателем EBIT в размере $24,6 млн в третьем квартале 2021 финансового года. Скорректированный показатель EBIT, который исключает расходы, не связанные с текущей деятельностью, составил рекордные 26,6 млн долларов в третьем квартале 2022 финансового года, увеличившись на 5,4% по сравнению с скорректированным показателем EBIT в размере 25,3 млн долларов в прошлогоднем квартале.
SPG добилась рекордных продаж в результате высоких показателей почти во всех своих подразделениях, причем наибольший рост пришелся на те, которые обслуживают рынки OEM-производителей и пищевых добавок. Кроме того, продажи оборудования для аварийного восстановления восстановились после обеспечения поставок полупроводниковых чипов и перенастройки своих продуктов для их размещения. Скорректированный показатель EBIT SPG стал рекордным в третьем квартале во многом благодаря улучшению операционной деятельности.
Чистые продажи Consumer Group в третьем квартале 2022 финансового года составили рекордные 491,6 млн долларов, увеличившись на 2,9% по сравнению с чистыми продажами в размере 477,7 млн долларов, о которых сообщалось в третьем квартале 2021 финансового года. Органические продажи выросли на 3,6%, что было частично компенсировано неблагоприятным пересчетом иностранной валюты на 0,7%. IBT Consumer Group составил 16,9 млн долларов США по сравнению с IBT в размере 42,8 млн долларов США за аналогичный период прошлого года. Показатель EBIT составил 16,8 млн долларов, снизившись на 60,7% по сравнению с показателем EBIT в 42,8 млн долларов в третьем квартале 2021 финансового года. Без учета расходов, не связанных с текущей деятельностью, скорректированный показатель EBIT в третьем квартале 2022 финансового года составил 17,2 млн долларов, что на 63,9% меньше по сравнению с скорректированным показателем EBIT в размере 47,8 млн долларов, о котором сообщалось в предыдущем году.
Как и ожидалось, Потребительская группа смогла увеличить выручку, поскольку острая нехватка алкидных смол, с которой она столкнулась, была частично компенсирована за счет поставок, предоставляемых производственным предприятием в Техасе, которое RPM приобрела в сентябре. Потребительская группа также столкнулась с трудностями по сравнению с предыдущим годом, когда продажи выросли на 19,8%, а скорректированный показатель EBIT увеличился на 48,6% из-за повышенного спроса на товары для дома во время первой фазы пандемии. Продажи сегмента в третьем квартале 2022 финансового года все еще были на 23,3% выше уровня третьего квартала 2020 финансового года, существовавшего до пандемии.
Из-за характера своей продукции и рынков, которые она обслуживает, инфляция оказала большее влияние на Потребительскую группу, чем на другие сегменты RPM. Кроме того, скорректированный показатель EBIT за третий квартал 2022 финансового года был поставлен под сомнение ненадежными поставками и поставками в результате нехватки рабочей силы, вызванной вариантом Omicron. Частично эти факторы компенсировались повышением цен и улучшением операционной деятельности. Группа потребителей продолжает повышать цены, чтобы справиться с инфляцией, повысить устойчивость своей цепочки поставок и инвестировать в совершенствование производственных мощностей и процессов для удовлетворения потребительского спроса.
Движение денежных средств и финансовое положение
За первые девять месяцев 2022 финансового года денежные средства от операций составили 156,0 млн долларов США по сравнению с 651,9 млн долларов США за первые девять месяцев 2021 финансового года. Снижение в первую очередь связано с перебоями в цепочке поставок, которые привели к снижению рентабельности и росту затрат на сырье, что сказалось на запасах. Капитальные затраты за текущий девятимесячный период составили $152,4 млн по сравнению с $103,2 млн за то же время в 2021 финансовом году, поскольку компания продолжала инвестировать в дополнительные производственные мощности для удовлетворения возросшего спроса. Общий долг на конец первых девяти месяцев 2022 финансового года составил 2,59 миллиарда долларов по сравнению с 2,31 миллиарда долларов год назад и 2,38 миллиарда долларов на 31 мая 2021 года.
Общая ликвидность, включая денежные средства и привлеченные возобновляемые кредитные линии, составила 1,46 миллиарда долларов на 28 февраля 2022 года по сравнению с 1,46 миллиарда долларов на 31 мая 2021 года. Ликвидность RPM остается высокой, что позволяет ей справляться с проблемами в цепочке поставок, продолжая инвестировать в операционные улучшения, приобретения и расширение производственных мощностей. За первые девять месяцев 2022 финансового года компания вернула акционерам 180,1 миллиона долларов в виде дивидендов наличными и выкупа акций.
В январе RPM завершила размещение 10-летних облигаций на сумму 300 миллионов долларов под 2,95% годовых. Чистые поступления предназначены для погашения части непогашенных займов в рамках возобновляемой кредитной линии и на общекорпоративные цели.
Перспективы бизнеса
Ожидается, что в четвертом квартале 2022 финансового года на деятельность RPM и ее поставщиков повлияют текущие проблемы в цепочке поставок и нехватка сырья, что окажет давление на доходы и производительность. Укрепление доллара США также неблагоприятно скажется на результатах RPM на международных рынках. В то время как продажи RPM в Украину и Россию несущественны, российские санкции усиливают инфляцию энергетических и транспортных расходов. Они также создают проблемы с поставками растительного сырья, а также тех, которые являются производными нефти. Хотя еще слишком рано делать выводы, повышение процентных ставок может замедлить деловые и потребительские расходы в ближайшие месяцы.
Несмотря на эти проблемы, RPM ожидает, что консолидированный рост продаж в четвертом квартале 2022 финансового года в странах с низким доходом будет трудно сравнить с прошлогодними продажами в четвертом квартале, которые выросли на 19,6%. Компания также ожидает роста продаж в условиях низких цен во всех четырех своих операционных сегментах в результате стратегических инвестиций, которые она делает, чтобы извлечь выгоду из рыночных возможностей и тенденций в отрасли.
Ожидается, что консолидированный скорректированный показатель EBIT за четвертый квартал 2022 финансового года увеличится в наименьшей степени по сравнению с аналогичным периодом прошлого года, когда скорректированный показатель EBIT вырос на 10,6%. Компания ожидает, что на прибыль по-прежнему будут влиять инфляция цен на сырье, фрахт и заработную плату, а также влияние на объемы продаж сбоев в работе, вызванных нехваткой сырья. Эти проблемы непропорционально сильно затронут группу потребителей. Рентабельность по EBIT снижалась все три квартала этого финансового года из-за инфляционного давления, которое оказывает большее влияние на Потребительскую группу, чем на другие сегменты RPM. Группа потребителей продолжает работать над нейтрализацией этих факторов путем повышения операционной эффективности, дополнительного повышения цен, чтобы догнать инфляцию, и наращивания производственных мощностей для повышения отказоустойчивости.
RPM по-прежнему сосредоточена на создании долгосрочной и устойчивой ценности для своих заинтересованных сторон путем преодоления макроэкономических проблем, ускорения роста выручки и постоянного повышения эффективности своей деятельности.
Информация о веб-трансляции и конференц-звонках
Руководство проведет селекторное совещание для обсуждения этих результатов, которое начнется сегодня в 10:00 утра по восточному времени. Вызов можно получить, набрав 833-323-0996 или 236-712-2462 для международных абонентов. Участников просят позвонить по назначенному номеру примерно за 10 минут до начала конференц-связи. Звонок, который продлится примерно один час, будет открыт для публики, но задавать вопросы будет разрешено только финансовым аналитикам. Средства массовой информации и все другие участники будут находиться в режиме только для прослушивания.
Для тех, кто не может прослушать прямой вызов, воспроизведение будет доступно примерно с 1:00 вечера по восточному времени 6 апреля 2022 года до 11:59 вечера по восточному времени 13 апреля 2022 года. Доступ к воспроизведению можно получить, набрав 800-585-8367 или 416-621-4642 для международных абонентов. Код доступа - 4088503. Звонок также будет доступен как в прямом эфире, так и для воспроизведения, а также в виде письменной расшифровки через веб-сайт RPM по адресу www.RPMinc.com .
RPM International Inc. владеет дочерними компаниями, которые являются мировыми лидерами в области специальных покрытий, герметиков, строительных материалов и сопутствующих услуг. Компания работает в четырех отчетных сегментах: потребительские товары, строительные товары, эксплуатационные покрытия и специальные продукты. RPM располагает разнообразным портфелем из сотен ведущих на рынке брендов, включая Rust-Oleum, DAP, Zinsser, Varathane, Day-Glo, Legend Brands, Stonhard, Carboline, Tremco и Dryvit. От домов и рабочих мест до инфраструктуры и ценных достопримечательностей брендам RPM доверяют как потребители, так и профессионалы, которые помогают строить лучший мир. В компании работает около 15 500 человек по всему миру. Посещение www.RPMinc.com чтобы узнать больше.
За дополнительной информацией обращайтесь к Расселу Л. Гордону, вице-президенту и финансовому директору, по телефону 330-273-5090 или rgordon@rpminc.com .
1 Эти инвестиции привели к чистому убытку после уплаты налогов в размере 5,3 млн долларов США за третий квартал 2022 финансового года и чистой прибыли после уплаты налогов в размере 5,5 млн долларов США за тот же квартал прошлого года.
Использование финансовой информации, не относящейся к ОПБУ
В дополнение к финансовой информации, представленной в соответствии с Общепринятыми Принципами бухгалтерского учета в Соединенных Штатах (“GAAP”) в настоящем отчете о прибылях и убытках, мы используем показатель EBIT, скорректированный показатель EBIT и скорректированную прибыль на акцию, которые являются финансовыми показателями, не относящимися к GAAP. Показатель EBIT определяется как прибыль (убыток) до вычета процентов и налогов, при этом скорректированный показатель EBIT и скорректированная прибыль на акцию указаны с целью корректировки на разовые статьи, влияющие на доходы и/или расходы, которые, по мнению руководства, не являются показателем текущей деятельности. Мы оцениваем показатели прибыли наших сегментов на основе дохода до вычета налогов на прибыль, но также рассматриваем показатель EBIT в качестве показателя оценки эффективности, поскольку процентные расходы в основном связаны с приобретениями, в отличие от операций сегмента. По этой причине мы считаем, что показатель EBIT также полезен инвесторам в качестве показателя при принятии ими инвестиционных решений. Показатель EBIT не следует рассматривать как альтернативу или более значимый, чем доход до налогообложения, определенный в соответствии с GAAP, поскольку показатель EBIT не учитывает влияние процентных и инвестиционных доходов или расходов на определение операционных показателей, которые представляют собой статьи, необходимые для продолжения нашей деятельности, учитывая наш уровень задолженности. Тем не менее, показатель EBIT является ключевым показателем, ожидаемым и полезным для наших инвесторов с фиксированным доходом, рейтинговых агентств и банковского сообщества, которые считают, и мы согласны с этим, что этот показатель имеет решающее значение для анализа рынками капитала основных операционных показателей наших сегментов. Мы также оцениваем показатель EBIT, поскольку очевидно, что изменения показателя EBIT влияют на нашу способность привлекать финансирование. Наши андеррайтеры и банкиры постоянно требуют включения этой меры в меморандумы о предложении в сочетании с любым андеррайтингом долга или банковским финансированием. Показатель EBIT может не отражать наши прошлые операционные результаты и не предназначен для прогнозирования потенциальных будущих результатов. Сверку EBIT и скорректированной EBIT с доходом до вычета налогов на прибыль, а также скорректированной прибыли на акцию с прибылью на акцию смотрите в разделе финансового отчета настоящего отчета о прибылях и убытках. Мы не предоставили сверку наших прогнозов по скорректированной EBIT на четвертый квартал 2022 финансового года, поскольку существенные условия, влияющие на такие меры, находятся вне нашего контроля и / или не могут быть разумно предсказаны, и поэтому сверка таких мер невозможна без необоснованных усилий.
Прогнозные заявления
Этот пресс-релиз содержит “прогнозные заявления”, касающиеся нашего бизнеса. Эти прогнозные заявления или другие заявления, сделанные нами, сделаны на основе наших ожиданий и убеждений относительно будущих событий, влияющих на нас, и подвержены неопределенностям и факторам (в том числе указанным ниже), которые трудно предсказать и, во многих случаях, находятся вне нашего контроля. В результате наши фактические результаты могут существенно отличаться от тех, которые выражены или подразумеваются в любых таких прогнозных заявлениях. Эти неопределенности и факторы включают (а) глобальные рынки и общие экономические условия, включая неопределенности, связанные с нестабильностью на финансовых рынках, доступностью капитала и последствиями изменений процентных ставок, а также жизнеспособностью банков и других финансовых учреждений; (b) цены, предложение и доступность сырья, включая различные пигменты, смолы, растворители и другие материалы на основе природного газа и нефти; упаковка, включая пластиковую и металлическую тару; и транспортные услуги, включая топливные сборы; (c) продолжающийся рост спроса на нашу продукцию; (d) юридические, экологические и судебные риски, присущие нашему строительному и химическому бизнесу, а также риски, связанные с адекватностью нашего страхового покрытия по таким вопросам; (e) влияние изменений процентных ставок; (f) влияние колебаний валютных курсов на наши зарубежные операции; (g) влияние невалютных рисков инвестирования и ведения операций в зарубежных странах, в том числе связанных с внутренними и международными политическими, социальными, экономическими и нормативными факторами; (h) риски и неопределенности, связанные с нашей текущей деятельностью по приобретению и отчуждению; (i) сроки и реализация ожидаемых затрат экономия от инициатив по реструктуризации и способность выявлять дополнительные возможности экономии средств; (j) риски, связанные с адекватностью наших резервов по условным обязательствам; (k) риски, связанные с пандемией Covid; (l) риски, связанные с неблагоприятными погодными условиями или последствиями изменения климата и стихийных бедствий; и (m) другие риски, подробно описанные в наших заявках в Комиссию по ценным бумагам и биржам, включая факторы риска, изложенные в нашем Годовом отчете по форме 10-K за год, закончившийся 31 мая 2021 года, поскольку они могут время от времени обновляться. Мы не берем на себя никаких обязательств по публичному обновлению или пересмотру любых прогнозных заявлений, чтобы отразить будущие события, информацию или обстоятельства, которые возникнут после даты этого выпуска.
CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||||||
IN THOUSANDS, EXCEPT PER SHARE DATA | ||||||||||||||||
(Unaudited) | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
February 28, | February 28, | February 28, | February 28, | |||||||||||||
2022 |
2021 |
2022 |
2021 |
|||||||||||||
Net Sales | $ |
1,433,879 |
|
$ |
1,269,395 |
|
$ |
4,723,838 |
|
$ |
4,361,981 |
|
||||
Cost of Sales |
|
935,293 |
|
|
797,454 |
|
|
3,029,287 |
|
|
2,650,213 |
|
||||
Gross Profit |
|
498,586 |
|
|
471,941 |
|
|
1,694,551 |
|
|
1,711,768 |
|
||||
Selling, General & Administrative Expenses |
|
433,569 |
|
|
402,186 |
|
|
1,290,245 |
|
|
1,197,556 |
|
||||
Restructuring Expense |
|
1,140 |
|
|
3,129 |
|
|
5,128 |
|
|
12,280 |
|
||||
Interest Expense |
|
22,016 |
|
|
20,964 |
|
|
64,127 |
|
|
63,975 |
|
||||
Investment Expense (Income), Net |
|
4,355 |
|
|
(11,454 |
) |
|
1,421 |
|
|
(33,735 |
) |
||||
(Gain) on Sales of Assets, Net |
|
(249 |
) |
|
- |
|
|
(42,491 |
) |
|
- |
|
||||
Other (Income) Expense, Net |
|
(2,742 |
) |
|
1,256 |
|
|
(9,001 |
) |
|
7,507 |
|
||||
Income Before Income Taxes |
|
40,497 |
|
|
55,860 |
|
|
385,122 |
|
|
464,185 |
|
||||
Provision for Income Taxes |
|
7,248 |
|
|
17,394 |
|
|
91,962 |
|
|
117,049 |
|
||||
Net Income |
|
33,249 |
|
|
38,466 |
|
|
293,160 |
|
|
347,136 |
|
||||
Less: Net Income Attributable to Noncontrolling Interests |
|
230 |
|
|
224 |
|
|
684 |
|
|
640 |
|
||||
Net Income Attributable to RPM International Inc. Stockholders | $ |
33,019 |
|
$ |
38,242 |
|
$ |
292,476 |
|
$ |
346,496 |
|
||||
Earnings per share of common stock attributable to | ||||||||||||||||
RPM International Inc. Stockholders: | ||||||||||||||||
Basic | $ |
0.26 |
|
$ |
0.30 |
|
$ |
2.27 |
|
$ |
2.68 |
|
||||
Diluted | $ |
0.25 |
|
$ |
0.29 |
|
$ |
2.26 |
|
$ |
2.66 |
|
||||
Average shares of common stock outstanding - basic |
|
127,943 |
|
|
128,447 |
|
|
128,013 |
|
|
128,455 |
|
||||
Average shares of common stock outstanding - diluted |
|
129,702 |
|
|
129,949 |
|
|
129,622 |
|
|
129,052 |
|
SUPPLEMENTAL SEGMENT INFORMATION | ||||||||||||||||
IN THOUSANDS | ||||||||||||||||
(Unaudited) | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
February 28, | February 28, | February 28, | February 28, | |||||||||||||
2022 |
2021 |
2022 |
2021 |
|||||||||||||
Net Sales: | ||||||||||||||||
CPG Segment | $ |
482,026 |
|
$ |
395,969 |
|
$ |
1,740,578 |
|
$ |
1,447,179 |
|
||||
PCG Segment |
|
270,865 |
|
|
226,523 |
|
|
858,987 |
|
|
745,145 |
|
||||
SPG Segment |
|
189,371 |
|
|
169,161 |
|
|
565,050 |
|
|
503,239 |
|
||||
Consumer Segment |
|
491,617 |
|
|
477,742 |
|
|
1,559,223 |
|
|
1,666,418 |
|
||||
Total | $ |
1,433,879 |
|
$ |
1,269,395 |
|
$ |
4,723,838 |
|
$ |
4,361,981 |
|
||||
Income Before Income Taxes: | ||||||||||||||||
CPG Segment | ||||||||||||||||
Income Before Income Taxes (a) | $ |
31,498 |
|
$ |
14,431 |
|
$ |
276,223 |
|
$ |
184,613 |
|
||||
Interest (Expense), Net (b) |
|
(1,735 |
) |
|
(2,074 |
) |
|
(5,254 |
) |
|
(6,325 |
) |
||||
EBIT (c) |
|
33,233 |
|
|
16,505 |
|
|
281,477 |
|
|
190,938 |
|
||||
MAP to Growth & other cost-savings related initiatives (d) |
|
1,034 |
|
|
1,987 |
|
|
3,258 |
|
|
8,646 |
|
||||
Unusual executive costs, net of insurance proceeds (f) |
|
805 |
|
|
- |
|
|
805 |
|
|
- |
|
||||
Adjustment to Exit Flowcrete China (g) |
|
- |
|
|
- |
|
|
- |
|
|
(305 |
) |
||||
(Gain) on Sales of Assets, Net (i) |
|
- |
|
|
- |
|
|
(41,906 |
) |
|
- |
|
||||
Adjusted EBIT | $ |
35,072 |
|
$ |
18,492 |
|
$ |
243,634 |
|
$ |
199,279 |
|
||||
PCG Segment | ||||||||||||||||
Income Before Income Taxes (a) | $ |
24,917 |
|
$ |
12,158 |
|
$ |
97,849 |
|
$ |
64,719 |
|
||||
Interest Income (Expense), Net (b) |
|
76 |
|
|
75 |
|
|
407 |
|
|
53 |
|
||||
EBIT (c) |
|
24,841 |
|
|
12,083 |
|
|
97,442 |
|
|
64,666 |
|
||||
MAP to Growth & other cost-savings related initiatives (d) |
|
1,974 |
|
|
2,039 |
|
|
5,708 |
|
|
8,364 |
|
||||
Acquisition-related costs (e) |
|
- |
|
|
- |
|
|
339 |
|
|
- |
|
||||
Unusual executive costs, net of insurance proceeds (f) |
|
- |
|
|
- |
|
|
472 |
|
|
- |
|
||||
Adjusted EBIT | $ |
26,815 |
|
$ |
14,122 |
|
$ |
103,961 |
|
$ |
73,030 |
|
||||
SPG Segment | ||||||||||||||||
Income Before Income Taxes (a) | $ |
25,881 |
|
$ |
24,560 |
|
$ |
71,028 |
|
$ |
73,415 |
|
||||
Interest (Expense), Net (b) |
|
(18 |
) |
|
(64 |
) |
|
(82 |
) |
|
(219 |
) |
||||
EBIT (c) |
|
25,899 |
|
|
24,624 |
|
|
71,110 |
|
|
73,634 |
|
||||
MAP to Growth & other cost-savings related initiatives (d) |
|
790 |
|
|
649 |
|
|
1,422 |
|
|
5,332 |
|
||||
Acquisition-related costs (e) |
|
(45 |
) |
|
- |
|
|
(45 |
) |
|
- |
|
||||
Adjusted EBIT | $ |
26,644 |
|
$ |
25,273 |
|
$ |
72,487 |
|
$ |
78,966 |
|
||||
Consumer Segment | ||||||||||||||||
Income Before Income Taxes (a) | $ |
16,893 |
|
$ |
42,724 |
|
$ |
95,912 |
|
$ |
263,813 |
|
||||
Interest Income (Expense), Net (b) |
|
62 |
|
|
(60 |
) |
|
211 |
|
|
(187 |
) |
||||
EBIT (c) |
|
16,831 |
|
|
42,784 |
|
|
95,701 |
|
|
264,000 |
|
||||
MAP to Growth & other cost-savings related initiatives (d) |
|
394 |
|
|
4,977 |
|
|
1,254 |
|
|
9,976 |
|
||||
Acquisition-related costs (e) |
|
- |
|
|
- |
|
|
- |
|
|
1,178 |
|
||||
Unusual executive costs, net of insurance proceeds (f) |
|
- |
|
|
- |
|
|
776 |
|
|
- |
|
||||
Adjusted EBIT | $ |
17,225 |
|
$ |
47,761 |
|
$ |
97,731 |
|
$ |
275,154 |
|
||||
Corporate/Other | ||||||||||||||||
(Loss) Before Income Taxes (a) | $ |
(58,692 |
) |
$ |
(38,013 |
) |
$ |
(155,890 |
) |
$ |
(122,375 |
) |
||||
Interest (Expense), Net (b) |
|
(24,756 |
) |
|
(7,387 |
) |
|
(60,830 |
) |
|
(23,562 |
) |
||||
EBIT (c) |
|
(33,936 |
) |
|
(30,626 |
) |
|
(95,060 |
) |
|
(98,813 |
) |
||||
MAP to Growth & other cost-savings related initiatives (d) |
|
7,114 |
|
|
6,217 |
|
|
17,272 |
|
|
20,025 |
|
||||
Acquisition-related costs (e) |
|
1,263 |
|
|
- |
|
|
2,063 |
|
|
- |
|
||||
Unusual executive costs, net of insurance proceeds (f) |
|
360 |
|
|
(1,324 |
) |
|
2,625 |
|
|
(1,267 |
) |
||||
Settlement for SEC Investigation & Enforcement Action (h) |
|
- |
|
|
- |
|
|
- |
|
|
2,000 |
|
||||
Adjusted EBIT | $ |
(25,199 |
) |
$ |
(25,733 |
) |
$ |
(73,100 |
) |
$ |
(78,055 |
) |
||||
TOTAL CONSOLIDATED | ||||||||||||||||
Income Before Income Taxes (a) | $ |
40,497 |
|
$ |
55,860 |
|
$ |
385,122 |
|
$ |
464,185 |
|
||||
Interest (Expense) |
|
(22,016 |
) |
|
(20,964 |
) |
|
(64,127 |
) |
|
(63,975 |
) |
||||
Investment (Expense) Income, Net |
|
(4,355 |
) |
|
11,454 |
|
|
(1,421 |
) |
|
33,735 |
|
||||
EBIT (c) |
|
66,868 |
|
|
65,370 |
|
|
450,670 |
|
|
494,425 |
|
||||
MAP to Growth & other cost-savings related initiatives (d) |
|
11,306 |
|
|
15,869 |
|
|
28,914 |
|
|
52,343 |
|
||||
Acquisition-related costs (e) |
|
1,218 |
|
|
- |
|
|
2,357 |
|
|
1,178 |
|
||||
Unusual executive costs, net of insurance proceeds (f) |
|
1,165 |
|
|
(1,324 |
) |
|
4,678 |
|
|
(1,267 |
) |
||||
Adjustment to Exit Flowcrete China (g) |
|
- |
|
|
- |
|
|
- |
|
|
(305 |
) |
||||
Settlement for SEC Investigation & Enforcement Action (h) |
|
- |
|
|
- |
|
|
- |
|
|
2,000 |
|
||||
(Gain) on Sales of Assets, Net (i) |
|
- |
|
|
- |
|
|
(41,906 |
) |
|
- |
|
||||
Adjusted EBIT | $ |
80,557 |
|
$ |
79,915 |
|
$ |
444,713 |
|
$ |
548,374 |
|
||||
(a) |
The presentation includes a reconciliation of Income (Loss) Before Income Taxes, a measure defined by Generally Accepted Accounting Principles in the United States (GAAP), to EBIT and Adjusted EBIT. | ||||||||||
(b) |
Interest Income (Expense), Net includes the combination of Interest Income (Expense) and Investment Income (Expense), Net. | ||||||||||
(c) |
EBIT is defined as earnings (loss) before interest and taxes, with Adjusted EBIT provided for the purpose of adjusting for items impacting earnings that are not considered by management to be indicative of ongoing operations. We evaluate the profit performance of our segments based on income before income taxes, but also look to EBIT, or adjusted EBIT, as a performance evaluation measure because interest expense is essentially related to corporate functions, as opposed to segment operations. For that reason, we believe EBIT is also useful to investors as a metric in their investment decisions. EBIT should not be considered an alternative to, or more meaningful than, income before income taxes as determined in accordance with GAAP, since EBIT omits the impact of interest and investment income or expense in determining operating performance, which represent items necessary to our continued operations, given our level of indebtedness. 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. | ||||||||||
|
|||||||||||
|
|||||||||||
|
|||||||||||
|
|||||||||||
|
|||||||||||
(d) |
Reflects restructuring and other charges, almost all of which have been incurred in relation to our Margin Acceleration Plan initiatives, as follows: "Inventory-related charges," & "Accelerated Expense - Other," which have been recorded in Cost of Goods Sold; "Headcount reductions, closures of facilities and related costs, and accelerated vesting of equity awards," all of which have been recorded in Restructuring Expense; "Accelerated Expense - Other," "Receivable writeoffs (recoveries)," "ERP consolidation plan," "Professional Fees," "Unusual costs triggered by executive departures," "Divestitures," & "Discontinued Product Line," which have been recorded in Selling, General & Administrative Expenses. |
||||||||||
(e) |
Acquisition costs reflect amounts included in gross profit for inventory step-ups, as well as external consulting costs included in selling, general & administrative expenses for costs associated with due diligence activities related to potential acquisition targets. | ||||||||||
(f) |
Reflects unusual compensation costs, net of insurance proceeds, recorded unrelated to our MAP to Growth initiative, including stock and deferred compensation plan arrangements. | ||||||||||
(g) |
In FY18, we added back a charge to exit our Flowcrete China business. Included in that charge from FY18 was an accrual for a contingent liability. During Q2 2021, the contingent liability was resolved, and a favorable adjustment of ~ $0.3 million was recognized. | ||||||||||
(h) |
On December 22, 2020, the Court entered its Final Judgment resolving the legacy "SEC Investigation & Enforcement Action." We agreed to pay a civil monetary penalty of $2.0 million under Section 21(d)(3) of the Exchange Act. The settlement amount was accrued for in our consolidated financial statements as of the period ending November 30, 2020, and paid during the period ending February 28, 2021. | ||||||||||
(i) |
Reflects the net gain associated with the sale of certain real property assets within our CPG segment during Q2 2022. |
SUPPLEMENTAL INFORMATION | |||||||||||||||
RECONCILIATION OF "REPORTED" TO "ADJUSTED" AMOUNTS | |||||||||||||||
(Unaudited) | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
February 28, | February 28, | February 28, | February 28, | ||||||||||||
2022 |
2021 |
2022 |
2021 |
||||||||||||
Reconciliation of Reported Earnings per Diluted Share to Adjusted Earnings per Diluted Share (All amounts presented after-tax): | |||||||||||||||
Reported Earnings per Diluted Share | $ |
0.25 |
$ |
0.29 |
|
$ |
2.26 |
|
$ |
2.66 |
|
||||
MAP to Growth & other cost-savings related initiatives (d) |
|
0.07 |
|
0.10 |
|
|
0.17 |
|
|
0.32 |
|
||||
Acquisition-related costs (e) |
|
0.01 |
|
- |
|
|
0.01 |
|
|
0.01 |
|
||||
Unusual executive costs, net of insurance proceeds (f) |
|
0.01 |
|
(0.01 |
) |
|
0.03 |
|
|
(0.01 |
) |
||||
Settlement for SEC Investigation & Enforcement Action (h) |
|
- |
|
- |
|
|
- |
|
|
0.01 |
|
||||
(Gain) on Sales of Assets, Net (i) |
|
- |
|
- |
|
|
(0.28 |
) |
|
- |
|
||||
Discrete Tax Adjustment (j) |
|
- |
|
0.04 |
|
|
- |
|
|
0.04 |
|
||||
Investment returns (k) |
|
0.04 |
|
(0.04 |
) |
|
0.05 |
|
|
(0.15 |
) |
||||
Adjusted Earnings per Diluted Share (l) | $ |
0.38 |
$ |
0.38 |
|
$ |
2.24 |
|
$ |
2.88 |
|
(d) |
Reflects restructuring and other charges, almost all of which have been incurred in relation to our Margin Acceleration Plan initiatives, as follows: "Inventory-related charges," & "Accelerated Expense - Other," which have been recorded in Cost of Goods Sold; "Headcount reductions, closures of facilities and related costs, and accelerated vesting of equity awards," all of which have been recorded in Restructuring Expense; "Accelerated Expense - Other," "Receivable writeoffs (recoveries)," "ERP consolidation plan," "Professional Fees," "Unusual costs triggered by executive departures," "Divestitures," & "Discontinued Product Line," all of which have been recorded in Selling, General & Administrative Expenses. |
|||
(e) |
Acquisition costs reflect amounts included in gross profit for inventory step-ups, as well as external consulting costs included in selling, general & administrative expenses for costs associated with due diligence activities related to potential acquisition targets. | |||
(f) |
Reflects unusual compensation costs, net of insurance proceeds, recorded unrelated to our MAP to Growth initiative, including stock and deferred compensation plan arrangements. | |||
(h) |
On December 22, 2020, the Court entered its Final Judgment resolving the legacy "SEC Investigation & Enforcement Action." We agreed to pay a civil monetary penalty of $2.0 million under Section 21(d)(3) of the Exchange Act. The settlement amount was accrued for in our consolidated financial statements as of the period ending November 30, 2020, and paid during the period ending February 28, 2021. | |||
(i) |
Reflects the net gain associated with the sale of certain real property assets within our CPG segment during Q2 2022. | |||
(j) |
Income tax charge for an increase to our deferred income tax liability for withholding taxes on additional unremitted foreign earnings not considered permanently reinvested. | |||
(k) |
Investment returns include realized net gains and losses on sales of investments and unrealized net gains and losses on equity securities, which are adjusted due to their inherent volatility. Management does not consider these gains and losses, which cannot be predicted with any level of certainty, to be reflective of the Company's core business operations. | |||
|
||||
(l) |
Adjusted EPS is provided for the purpose of adjusting diluted earnings per share for items impacting earnings that are not considered by management to be indicative of ongoing operations. |
CONSOLIDATED BALANCE SHEETS | ||||||||||||
IN THOUSANDS | ||||||||||||
(Unaudited) | ||||||||||||
February 28, 2022 | February 28, 2021 | May 31, 2021 | ||||||||||
Assets | ||||||||||||
Current Assets | ||||||||||||
Cash and cash equivalents | $ |
193,191 |
|
$ |
249,214 |
|
$ |
246,704 |
|
|||
Trade accounts receivable |
|
1,135,190 |
|
|
1,050,986 |
|
|
1,336,728 |
|
|||
Allowance for doubtful accounts |
|
(49,794 |
) |
|
(52,203 |
) |
|
(55,922 |
) |
|||
Net trade accounts receivable |
|
1,085,396 |
|
|
998,783 |
|
|
1,280,806 |
|
|||
Inventories |
|
1,191,791 |
|
|
913,302 |
|
|
938,095 |
|
|||
Prepaid expenses and other current assets |
|
339,977 |
|
|
286,274 |
|
|
316,399 |
|
|||
Total current assets |
|
2,810,355 |
|
|
2,447,573 |
|
|
2,782,004 |
|
|||
Property, Plant and Equipment, at Cost |
|
2,080,631 |
|
|
1,887,807 |
|
|
1,967,482 |
|
|||
Allowance for depreciation |
|
(1,031,613 |
) |
|
(985,176 |
) |
|
(1,002,300 |
) |
|||
Property, plant and equipment, net |
|
1,049,018 |
|
|
902,631 |
|
|
965,182 |
|
|||
Other Assets | ||||||||||||
Goodwill |
|
1,343,962 |
|
|
1,310,762 |
|
|
1,345,754 |
|
|||
Other intangible assets, net of amortization |
|
601,641 |
|
|
612,702 |
|
|
628,693 |
|
|||
Operating lease right-of-use assets |
|
312,157 |
|
|
292,224 |
|
|
300,827 |
|
|||
Deferred income taxes, non-current |
|
23,122 |
|
|
37,991 |
|
|
26,804 |
|
|||
Other |
|
190,347 |
|
|
188,502 |
|
|
203,705 |
|
|||
Total other assets |
|
2,471,229 |
|
|
2,442,181 |
|
|
2,505,783 |
|
|||
Total Assets | $ |
6,330,602 |
|
$ |
5,792,385 |
|
$ |
6,252,969 |
|
|||
Liabilities and Stockholders' Equity | ||||||||||||
Current Liabilities | ||||||||||||
Accounts payable | $ |
675,529 |
|
$ |
569,002 |
|
$ |
717,176 |
|
|||
Current portion of long-term debt |
|
703,250 |
|
|
1,027 |
|
|
1,282 |
|
|||
Accrued compensation and benefits |
|
206,632 |
|
|
190,167 |
|
|
258,380 |
|
|||
Accrued losses |
|
25,646 |
|
|
23,457 |
|
|
29,054 |
|
|||
Other accrued liabilities |
|
323,846 |
|
|
303,852 |
|
|
325,522 |
|
|||
Total current liabilities |
|
1,934,903 |
|
|
1,087,505 |
|
|
1,331,414 |
|
|||
Long-Term Liabilities | ||||||||||||
Long-term debt, less current maturities |
|
1,883,106 |
|
|
2,310,483 |
|
|
2,378,544 |
|
|||
Operating lease liabilities |
|
270,293 |
|
|
251,563 |
|
|
257,415 |
|
|||
Other long-term liabilities |
|
308,340 |
|
|
502,724 |
|
|
436,176 |
|
|||
Deferred income taxes |
|
97,315 |
|
|
90,440 |
|
|
106,395 |
|
|||
Total long-term liabilities |
|
2,559,054 |
|
|
3,155,210 |
|
|
3,178,530 |
|
|||
Total liabilities |
|
4,493,957 |
|
|
4,242,715 |
|
|
4,509,944 |
|
|||
Stockholders' Equity | ||||||||||||
Preferred stock; none issued |
|
- |
|
|
- |
|
|
- |
|
|||
Common stock (outstanding 129,496; 129,815; 129,573) |
|
1,295 |
|
|
1,298 |
|
|
1,295 |
|
|||
Paid-in capital |
|
1,085,317 |
|
|
1,045,585 |
|
|
1,055,400 |
|
|||
Treasury stock, at cost |
|
(691,418 |
) |
|
(621,836 |
) |
|
(653,006 |
) |
|||
Accumulated other comprehensive (loss) |
|
(552,308 |
) |
|
(622,937 |
) |
|
(514,884 |
) |
|||
Retained earnings |
|
1,992,160 |
|
|
1,745,375 |
|
|
1,852,259 |
|
|||
Total RPM International Inc. stockholders' equity |
|
1,835,046 |
|
|
1,547,485 |
|
|
1,741,064 |
|
|||
Noncontrolling interest |
|
1,599 |
|
|
2,185 |
|
|
1,961 |
|
|||
Total equity |
|
1,836,645 |
|
|
1,549,670 |
|
|
1,743,025 |
|
|||
Total Liabilities and Stockholders' Equity | $ |
6,330,602 |
|
$ |
5,792,385 |
|
$ |
6,252,969 |
|
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
IN THOUSANDS | ||||||||
(Unaudited) | ||||||||
Nine Months Ended | ||||||||
February 28, | February 28, | |||||||
2022 |
2021 |
|||||||
Cash Flows From Operating Activities: | ||||||||
Net income | $ |
293,160 |
|
$ |
347,136 |
|
||
Adjustments to reconcile net income to net | ||||||||
cash provided by operating activities: | ||||||||
Depreciation and amortization |
|
114,295 |
|
|
109,119 |
|
||
Restructuring charges, net of payments |
|
(2,341 |
) |
|
(3,830 |
) |
||
Fair value adjustments to contingent earnout obligations |
|
2,470 |
|
|
1,829 |
|
||
Deferred income taxes |
|
(16,908 |
) |
|
24,473 |
|
||
Stock-based compensation expense |
|
29,287 |
|
|
31,157 |
|
||
Net loss (gain) on marketable securities |
|
10,032 |
|
|
(29,652 |
) |
||
Net (gain) on sales of assets |
|
(42,491 |
) |
|
- |
|
||
Other |
|
112 |
|
|
(394 |
) |
||
Changes in assets and liabilities, net of effect | ||||||||
from purchases and sales of businesses: | ||||||||
Decrease in receivables |
|
170,513 |
|
|
181,032 |
|
||
(Increase) in inventory |
|
(273,519 |
) |
|
(57,702 |
) |
||
Decrease in prepaid expenses and other |
|
506 |
|
|
19,133 |
|
||
current and long-term assets | ||||||||
(Decrease) increase in accounts payable |
|
(9,884 |
) |
|
31,825 |
|
||
(Decrease) in accrued compensation and benefits |
|
(47,442 |
) |
|
(1,107 |
) |
||
(Decrease) increase in accrued losses |
|
(2,985 |
) |
|
3,054 |
|
||
(Decrease) in other accrued liabilities |
|
(68,854 |
) |
|
(7,615 |
) |
||
Other |
|
- |
|
|
3,448 |
|
||
Cash Provided By Operating Activities |
|
155,951 |
|
|
651,906 |
|
||
Cash Flows From Investing Activities: | ||||||||
Capital expenditures |
|
(152,401 |
) |
|
(103,226 |
) |
||
Acquisition of businesses, net of cash acquired |
|
(116,457 |
) |
|
(114,355 |
) |
||
Purchase of marketable securities |
|
(13,674 |
) |
|
(30,784 |
) |
||
Proceeds from sales of marketable securities |
|
9,004 |
|
|
28,773 |
|
||
Proceeds from sales of assets |
|
51,913 |
|
|
- |
|
||
Other |
|
(55 |
) |
|
1,664 |
|
||
Cash (Used For) Investing Activities |
|
(221,670 |
) |
|
(217,928 |
) |
||
Cash Flows From Financing Activities: | ||||||||
Additions to long-term and short-term debt |
|
300,967 |
|
|
- |
|
||
Reductions of long-term and short-term debt |
|
(72,493 |
) |
|
(249,518 |
) |
||
Cash dividends |
|
(152,575 |
) |
|
(145,457 |
) |
||
Repurchases of common stock |
|
(27,500 |
) |
|
(24,628 |
) |
||
Shares of common stock returned for taxes |
|
(10,906 |
) |
|
(17,083 |
) |
||
Payments of acquisition-related contingent consideration |
|
(5,774 |
) |
|
(2,218 |
) |
||
Other |
|
(3,824 |
) |
|
(786 |
) |
||
Cash Provided By (Used For) Financing Activities |
|
27,895 |
|
|
(439,690 |
) |
||
Effect of Exchange Rate Changes on Cash and | ||||||||
Cash Equivalents |
|
(15,689 |
) |
|
21,510 |
|
||
Net Change in Cash and Cash Equivalents |
|
(53,513 |
) |
|
15,798 |
|
||
Cash and Cash Equivalents at Beginning of Period |
|
246,704 |
|
|
233,416 |
|
||
Cash and Cash Equivalents at End of Period | $ |
193,191 |
|
$ |
249,214 |
|