Frequently Asked Questions

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1. What are the details of RPM’s November 2018 Investor Day?

RPM will host an investor day on November 28, 2018, in Baltimore, Maryland. The event starts at 10 a.m. ET with a trade show that features select RPM operating companies. Management presentations will begin at approximately 12:30 p.m. ET and will conclude at approximately 2:30 p.m. ET. A live webcast and replay of the presentations can be accessed via the RPM website at www.RPMinc.com.

At this meeting, the company will provide a comprehensive update on its operating improvement initiative, which has been named the 2020 MAP to Growth (Margin Acceleration Plan). The update will include details on:

  • operating margin targets
  • capital allocation guidelines and capital return plans
  • initiatives to increase operational efficiency
  • actions to streamline the company’s operating structure and leadership
  • metrics to track achievements relative to plan

The objective of the 2020 MAP to Growth initiative is to position RPM to be a larger and more valuable business, thus enhancing shareholder value and driving sustained growth.

For more information or to register for investor day, contact RPM investor relations at 330-273-5090 or info@rpminc.com.

2. What where the results of the proposed amendments to RPM’s Certificate of Incorporation and By-Laws?

The proposed amendments to RPM’s Certificate of Incorporation and By-Laws, which were detailed in the company’s 2018 proxy statement, were not approved by shareholders because they did not achieve the required affirmative vote of at least 80 percent of the voting power of outstanding shares of common stock as of the record date. These amendments would have required the annual election of directors and reduced the threshold for action taken by shareholders to a simple majority.

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

Fiscal 2019 first-quarter net sales were a record $1.46 billion, up 8.5% over the $1.35 billion reported a year ago. Including the impact of restructuring charges, first-quarter net income was $69.8 million versus $116.4 million in the year-ago period, and diluted earnings per share (EPS) were $0.52 compared to $0.86 in the year-ago quarter. Income before income taxes (IBT) was $91.9 million compared to $155.3 million reported in the fiscal 2018 first quarter. RPM’s consolidated earnings before interest and taxes (EBIT) were $113.9 million compared to $177.6 million reported in the fiscal 2018 first quarter. The fiscal 2019 first quarter included asset write-offs and other restructuring-related expenses of $39.8 million. Excluding these charges, RPM’s adjusted EBIT was $153.7 million and diluted EPS was $0.76.

The company generated strong top-line sales growth in the first quarter, with organic sales growth up 7.8%, while profitability continued to be adversely affected by rising raw material costs. In addition, bottom-line results reflected the impact of restructuring charges, higher legal and advertising costs in its consumer segment, and the adverse effect of transactional foreign exchange.

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 first-quarter segment sales and earnings?

The company’s industrial segment net sales increased 7.2%, to $782.0 million from $729.8 million reported a year ago, reflecting organic growth of 6.7% and acquisitions contributing an additional 1.6%. Foreign currency translation reduced sales by 1.1%. Industrial segment IBT was $69.1 million compared with $88.9 million a year ago. EBIT was $71.5 million compared to $91.5 million in the fiscal 2018 first quarter. Adjusted EBIT, which excludes the charges mentioned earlier, increased 2.5% to $93.8 million from the year-ago period.
 
The industrial segment benefited from especially strong performance in North American waterproofing and a healthy recovery in businesses serving the oil and gas sector. Leverage to the bottom line was masked by unfavorable transactional foreign exchange expense resulting from the strengthening of the dollar versus certain international currencies. In the process of realigning its global brands, the company adjusted its leadership structure, initiated the closure of two plants and discontinued certain international product lines.
 
RPM’s consumer segment generated a 13.6% increase in sales to $485.2 million from $427.1 million in the fiscal 2018 first quarter. Organic sales increased 12.4%, while acquisition growth contributed 1.7%. Foreign currency translation reduced sales by 0.5%. Consumer segment IBT was $51.3 million compared with $72.4 million in the prior-year period. EBIT was $51.5 million compared to $72.6 million in the fiscal 2018 first quarter. Excluding asset write-offs and other restructuring-related expenses, adjusted EBIT was $52.9 million versus the prior period.
 
Consumer segment sales were strong due to new accounts and market share gains, particularly in wood stains and automotive finishes. As previously disclosed, the company anticipated that the fiscal 2019 first quarter would be the high-water mark for margin erosion in the consumer segment. It responded with price increases late in the first quarter to help address this. In addition, legal costs accounted for nearly half of the EBIT decline for the quarter, with much of the remainder resulting from stepped up advertising to support recent market share gains. 
 
RPM’s specialty segment reported sales growth of 2.3%, to $192.8 million from $188.5 million in the fiscal 2018 first quarter. Organic growth contributed 2.0%, while acquisition growth was 0.4%. Foreign currency translation reduced sales by 0.1%. Specialty segment IBT was $27.8 million compared with $33.2 million in the prior-year period. EBIT was $27.7 million compared to $33.0 million in the fiscal 2018 first quarter. Adjusted EBIT, which excludes restructuring-related expenses, was $30.5 million in the fiscal 2019 first quarter.
 
Specialty segment first-quarter results for the prior year were elevated by RPM’s water damage restoration businesses’ response to Hurricane Harvey, which created tougher year-over-year comparisons. Also, the first quarter of fiscal 2019 is the last quarter of negative comparisons related to the NatureSeal patent expiration last August.
 
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 is the status of RPM's capital structure, cash flow and liquidity?

During the fiscal 2019 first quarter, cash used from operations was $7.1 million compared to $26.1 million a year ago. Capital expenditures were $28.3 million in the quarter, compared to $17.5 million in the year-ago period.  

Total debt at August 31, 2018 of $2.27 billion compares to $2.17 billion at May 31, 2018 and $2.12 billion at the end of last year’s first quarter. Net (of cash) debt-to-total capital was 56.2%, versus 54.7% at the end of last year’s first quarter and 54.2% at the end of the prior fiscal year. Total liquidity, including cash and long-term available credit, was $868.9 million, compared to $1.0 billion a year ago and $1.0 billion at May 31, 2018.

Further details of RPM's most recent financial results can be found in the company's earnings news releases, as well as in its 10-K, 10-Q and other periodic filings with the Securities and Exchange Commission.

6. What is RPM's business outlook?

During the remaining three quarters of fiscal 2019, RPM’s businesses will continue to aggressively pursue price increases to protect gross profit margins in response to continued raw material cost escalation. With the final asbestos trust payment behind it, the company has freed up capital to allocate to more productive purposes.

As communicated in its earnings release of July 19, 2018, the company expects full-year fiscal 2019 industrial segment sales to grow in the mid-single-digit range. The segment should benefit from steady construction activity and the ongoing oil and gas market recovery with improving leverage to the bottom line.

In the consumer segment, the company expects to benefit from recent market share gains and stepped up advertising to support new product placements. This should drive sales growth in the mid- to upper-single-digit range, which will begin to generate positive earnings growth over the prior year in the second quarter.

In the specialty segment, the company lapped the expiration date of its NatureSeal edible coating patent as of the end of its fiscal 2019 first quarter and expects better comparisons for this product line going forward. Sales growth in the specialty segment is expected to be in the low-single-digit range.

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.

7. What does RPM’s agreement with Elliott Management entail?

On June 28, 2018, following constructive dialogue with Elliott Management, RPM announced several new initiatives designed to bolster operational and financial improvement and enhance shareholder value. The initiatives include: the naming of two new independent directors, Kirk Andrews and John Ballbach, to RPM’s Board; the creation of a new operating improvement committee of the Board, specifically focused on supporting operational improvement and value creating initiatives; the engagement of consulting firm AlixPartners to work with management in reviewing additional opportunities for operational improvement; and the proposal of an amendment to the company’s charter that would lead to an annually elected board. See the press release for more information.

8. In what areas is RPM seeking to improve its performance?
RPM had already commenced in 2017 a plan to improve margins and reduce cost. The company’s current focus is on further progress in those areas as well as a focus on optimizing its balance sheet, streamlining working capital and implementing new capital allocation guidelines and capital return plans.
9. How did the agreement with Elliott Management come about?

RPM and Elliott share a common interest in improving RPM’s operational and financial performance. Management engaged in constructive dialogue with Elliott and is pleased to reach agreement on various initiatives that were announced on June 28, 2018. These initiatives build on actions that RPM was already taking to drive greater operating efficiency and enhance shareholder value.

10. 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 September 11, 2018, that it acquired Nudura Corporation, the leading manufacturer and distributor of insulated concrete forms (ICF) in North America. Based in Ontario, Canada, Nudura has annual net sales in excess of $40 million. Nudura will operate within the RPM Specialty Products Group as a stand-alone operating unit of RPM’s Dryvit business. Dryvit is the leading manufacturer of exterior insulation and finish systems (EIFS) in North America and the innovator of NewBrick, a lightweight, energy efficient brick product. Nudura’s product line will complement and expand Dryvit’s existing product offering, allowing for enhanced cross-selling opportunities. At the same time, Nudura’s manufacturing footprint will be leveraged for efficiencies in the manufacturing of Dryvit’s NewBrick product, as well as products of other companies within RPM’s Specialty Products Group.

On August 1, 2018, RPM announced that its Rust-Oleum group acquired the Mean Green branded line of specialty cleaning products and the exclusive North American licensing for Roto-Rooter branded drain care products from CR Brands, which is based in Cincinnati, Ohio. These product lines have annual net sales of approximately $20 million. These lines will be integrated into Rust-Oleum's current portfolio of cleaning and drain care products.

RPM’s acquisition philosophy, initiated by Thomas C. Sullivan, who ran RPM as chairman and CEO from 1971 until his retirement from those positions in 2002 and remained on the board as chairman emeritus until his retirement at the annual meeting in 2016, is very entrepreneurial in nature. RPM seeks good companies, creates an atmosphere where the founders and managers stay with their companies, and provides them with resources to grow their businesses. This entrepreneurial culture has been a key attraction to business owners in the industry, as demonstrated by the fact that today about one-third of RPM’s operating companies are managed by their founders, second- or third-generation family members or the managers they trusted to lead their companies. View this video to learn more about RPM’s approach to acquisitions.

11. 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.

12. 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.

13. 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.

14. How many RPM shares are outstanding?
As of May 31, 2018, RPM's actual shares outstanding were 133.4 million, while average shares outstanding for computation of fiscal 2018 basic and diluted earnings per share were 131.9 million and 136.4 million, respectively.
15. 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.
16. Are RPM products sold in other countries?
Products manufactured by RPM's numerous operating companies are sold in approximately 170 countries and territories.
17. 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.

18. 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.

19. 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.

20. 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.

21. 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.
22. 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.
23. 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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