MEDINA, Ohio, Jan. 8, 2013 /PRNewswire/ -- RPM International Inc. (NYSE: RPM) today reported a double-digit increase in net sales for its fiscal 2013 second quarter ended November 30, 2012. Net income and diluted earnings per share increased significantly over the prior year, excluding one-time adjustments in both years.
Second-Quarter Results
Net sales increased 11.1% to $1.02 billion from $916.1 million a year ago. On an as reported basis, consolidated EBIT decreased 3.7%, to $89.5 million from $93.0 million in the year-ago second quarter. Second-quarter net income declined 16.5%, to $41.7 million from $49.9 million in the fiscal 2012 second quarter. Earnings per diluted share fell 18.4% to $0.31 from $0.38 a year ago.
The one-time adjustment in the fiscal 2013 second quarter was a non-cash charge of $10.8 million, or $0.09 per diluted share in corporate/other, for the write-down of RPM's remaining equity investment in Kemrock Industries and Exports Ltd., due to continued deteriorating economic conditions in India, where Kemrock is based, and the resulting impact on Kemrock's operating performance and stock price. The fiscal 2012 second quarter adjustment was for income recognized in RPM's industrial segment, which occurred when RPM's ownership position in Kemrock exceeded 20%, thereby triggering a reportable equity ownership position and resulted in a benefit of $5.2 million, or $0.04 per diluted share, including a $4.6 million cumulative income catch-up.
On an as adjusted basis, excluding the Kemrock impact from both periods, RPM's fiscal 2013 second-quarter consolidated EBIT improved 14.3% to $100.4 million from $87.8 million a year ago. Second-quarter net income grew 17.4% to $52.5 million from $44.7 million in the fiscal 2012 second quarter, while earnings per diluted share improved 17.6% to $0.40 from $0.34 a year ago.
"Second-quarter operating results, on an adjusted basis, continue to meet our plan with sales, EBIT and net income posting strong double-digit increases," stated Frank C. Sullivan, chairman and chief executive officer. "We are also seeing benefits from our robust acquisition program, which has added businesses generating approximately $300 million in annual sales during the past 12 months," he stated.
Second-Quarter Segment Sales and Earnings
During the second quarter, on an as reported basis, industrial segment sales grew 7.7% to $691.0 million from $641.5 million in the fiscal 2012 second quarter. Organic sales improved 1.2%, including 1.6% in foreign exchange translation losses, while acquisition growth added 6.5%. Industrial segment EBIT decreased 0.2% to $78.1 million from $78.3 million in the same period a year ago. On an as adjusted basis, which excludes the Kemrock-related impact from both periods, industrial segment EBIT grew 6.9% to $78.1 million from $73.1 million a year ago.
"With the exception of our industrial businesses in Europe and our roofing division, most of our industrial product lines continued to perform well, including construction sealants, weather proofing and admixtures, as well as many of our smaller, niche industrial products, such as edible coatings, fluorescent pigments and disaster restoration solutions," Sullivan stated.
RPM's fiscal 2013 second-quarter consumer segment sales increased 18.9% to $326.4 million from $274.6 million a year ago. Organic sales improved 6.2%, with no foreign exchange impact, while acquisition growth added 12.7%. Consumer segment EBIT improved 44.1%, to $38.6 million from $26.8 million a year ago.
"Our consumer product lines are performing to our expectations. They continue to enjoy robust organic sales volume growth due to continued improvement in the U.S. residential housing market and strong demand for higher-end new products, while partially recouping lost margin from the moderation in raw material costs compared to the prior year. Additionally, acquisition activity over the past year, including Synta, Kirker and Australia-based HiChem, contributed to the strong consumer segment sales and earnings growth in the quarter," stated Sullivan.
Corporate and other expenses during the fiscal 2013 second quarter were higher than the prior year by approximately $4.3 million, on an as adjusted basis, due primarily to higher insurance, professional fees and pension expenses.
Cash Flow and Financial Position
For the first half of fiscal 2013, cash from operations was $127.6 million compared to $110.0 million a year ago. Capital expenditures of $30.8 million compare to depreciation of $27.6 million during the first half of this fiscal year. Total debt at November 30, 2012 increased to $1.42 billion from $1.09 billion at November 30, 2011 and $1.12 billion at May 31, 2012, primarily due to additional borrowings to fund acquisitions. RPM's net (of cash) debt-to-total capitalization ratio was 48.1%, compared to 40.3% at May 31, 2012, and it continues to be at the low end of the company's historic norms. At November 30, 2012, liquidity stood at $962 million, including cash of $262 million and $700 million in long-term committed available credit.
"Our solid cash and liquidity position is supporting a growing cash dividend, increased capital investments and a very successful acquisition program," Sullivan stated.
First-Half Sales and Earnings
On an as reported basis, fiscal 2013 first-half net sales improved 8.5% to $2.06 billion from $1.90 billion during the first six months of fiscal 2012. Consolidated EBIT declined 24.6% to $173.1 million from $229.5 million during the first six months of fiscal 2012. Net income declined 40.4% to $75.6 million from $126.7 million in the fiscal 2012 first half. Diluted earnings per share fell 41.2% to $0.57 from $0.97 a year ago.
On an as adjusted basis, first-half sales increased 8.7% to $2.07 billion. First-half EBIT was up 7.1% to $240.2 million from $224.3 million a year ago. First-half net income grew 13.0% to $137.3 million from $121.5 million in the fiscal 2012 first half. Fiscal 2013 first-half earnings per diluted share were up 11.8% to $1.04 from $0.93 a year ago. In addition to the Kemrock adjustments this fiscal year totaling $56.1 million, the first half also included a one-time charge of $11.0 million in the company's Building Solutions Group associated with a strategic decision to exit certain unprofitable contracts outside North America and to focus on the successful core roofing business in the United States and Canada.
First-Half Segment Sales and Earnings
On an as reported basis, RPM's industrial segment fiscal 2013 first-half sales improved 6.6%, to $1.39 billion from $1.31 billion in the fiscal 2012 first half. Organic sales decreased 0.7%, including net foreign exchange translation losses of 3.5%, while acquisition growth added 7.3%. Industrial segment EBIT declined 9.2% to $155.0 million from $170.8 million a year ago.
On an as adjusted basis, industrial segment first-half net sales improved 6.8%, to $1.40 billion from $1.31 billion a year ago. Industrial segment EBIT grew 6.2% to $175.8 million from $165.5 million in the 2012 first half.
First-half sales for the consumer segment increased 12.9% to $669.7 million from $593.4 million a year ago. Organic sales increased 5.9% and acquisition growth added an additional 7.0%. Consumer segment EBIT increased 24.4% to $97.4 million from $78.3 million in the first half of fiscal 2012.
Acquisitions
Second-quarter acquisitions included Synta, Inc. and Kirker Enterprises, Inc. Acquired by the Rust-Oleum Group on September 21, 2012, Synta is a $40 million producer and marketer of innovative and unique exterior wood deck and concrete restoration systems sold under the brands of Deck Restore and Concrete Restore at leading home centers and other retail outlets. Acquired by the RPM2 Consumer Group on September 5, 2012, Kirker manufactures nail care enamels, coatings components and related products for the personal care industry and has sales of more than $100 million.
Business Outlook
"We reiterate our full-year guidance, which we increased when first-quarter earnings were announced on October 3, 2012. We continue to anticipate sales growth of 8% to 10% and growth in diluted earnings per share of 9% to 12%, which equates to an EPS range of $1.80 to $1.85, on an as adjusted basis. As usual, we expect weaker results for the seasonally difficult fiscal third quarter ending February 28, 2013, but anticipate a strong fiscal 2013 fourth quarter. We see continued strength in top- and bottom-line performance in our consumer segment as the U.S. residential housing market steadily improves. Most of our industrial businesses are also performing well, with the exception of many European operations and the Building Solutions Group roofing division. Current-year acquisitions will offset these weaker sectors and contribute to our results. We also expect to continue the recent trend of recouping gross profit margin during the last half of this fiscal year as well," Sullivan stated.
Webcast and Conference Call Information
Management will host a conference call to further discuss these results beginning at 10:00 a.m. EST today. The call can be accessed by dialing 800-901-5241 or 617-786-2963 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 noon EST on January 8, 2013 until 11:59 p.m. EST on January 15, 2013. The replay can be accessed by dialing 888-286-8010 or 617-801-6888 for international callers. The access code is 22890306. The call also will be available both live and for replay, and as a written transcript, via the RPM web site at www.rpminc.com.
About RPM
RPM International Inc., a holding company, owns subsidiaries that are world leaders in specialty coatings, sealants, building materials and related services serving both industrial and consumer markets. RPM's industrial products include roofing systems, sealants, corrosion control coatings, flooring coatings and specialty chemicals. Industrial brands include Stonhard, Tremco, illbruck, Carboline, Flowcrete, Universal Sealants and Euco. RPM's consumer products are used by professionals and do-it-yourselfers for home maintenance and improvement and by hobbyists. Consumer brands include Zinsser, Rust-Oleum, DAP, Varathane and Testors. Additional details can be found at www.RPMinc.com and by following RPM on Twitter at www.twitter.com/RPMintl.
For more information, contact Barry M. Slifstein, vice president - investor relations and planning, at 330-273-5090 or bslifstein@rpminc.com.
This press release contains "forward-looking statements" relating to our business. These forward-looking statements, or other statements made by us, are made based on our expectations and beliefs concerning future events impacting us, and are subject to uncertainties and factors (including those specified below) which are difficult to predict and, in many instances, are beyond our control. As a result, our actual results could differ materially from those expressed in or implied by any such forward-looking statements. These uncertainties and factors include (a) global markets and general economic conditions, including uncertainties surrounding the volatility in financial markets, the availability of capital and the effect of changes in interest rates, and the viability of banks and other financial institutions; (b) the prices, supply and capacity of raw materials, including assorted pigments, resins, solvents and other natural gas- and oil-based materials; packaging, including plastic containers; and transportation services, including fuel surcharges; (c) continued growth in demand for our products; (d) legal, environmental and litigation risks inherent in our construction and chemicals businesses and risks related to the adequacy of our insurance coverage for such matters; (e) the effect of changes in interest rates; (f) the effect of fluctuations in currency exchange rates upon our foreign operations; (g) the effect of non-currency risks of investing in and conducting operations in foreign countries, including those relating to domestic and international political, social, economic and regulatory factors; (h) risks and uncertainties associated with our ongoing acquisition and divestiture activities; (i) risks related to the adequacy of our contingent liability reserves; (j) risks and uncertainties associated with the SPHC bankruptcy proceedings; and (k) other risks detailed in our filings with the Securities and Exchange Commission, including the risk factors set forth in our Annual Report on Form 10-K for the year ended May 31, 2012, as the same may be updated from time to time. We do not undertake any obligation to publicly update or revise any forward-looking statements to reflect future events, information or circumstances that arise after the date of this release.
CONSOLIDATED STATEMENTS OF INCOME IN THOUSANDS, EXCEPT PER SHARE DATA (Unaudited) AS REPORTED ADJUSTED (a) ----------- ----------- Three Months Ended Six Months Ended Three Months Ended Six Months Ended November 30, November 30, November 30, November 30, ------------ ------------ ------------ ------------ 2012 2011 2012 2011 2012 2011 2012 2011 ---- ---- ---- ---- ---- ---- ---- ---- Net Sales $1,017,426 $916,085 $2,064,140 $1,902,003 $1,017,426 $916,085 $2,067,018 $1,902,003 Cost of sales 592,425 547,064 1,205,259 1,123,356 592,425 547,064 1,202,718 1,123,356 ------- ------- --------- --------- ------- ------- --------- --------- Gross profit 425,001 369,021 858,881 778,647 425,001 369,021 864,300 778,647 Selling, general & administrative expenses 325,761 282,154 636,701 556,097 325,761 282,154 626,113 556,097 Interest expense 19,868 17,909 38,298 35,715 19,868 17,909 38,298 35,715 Investment (income), net (1,364) (1,045) (8,338) (1,069) (1,364) (1,045) (8,338) (1,069) Other expense (income), net 9,694 (6,167) 49,116 (6,970) (1,125) (957) (1,976) (1,760) ----- ------ ------ ------ ------ ---- ------ ------ Income before income taxes 71,042 76,170 143,104 194,874 81,861 70,960 210,203 189,664 Provision for income taxes 24,955 22,251 59,150 57,615 24,955 22,251 62,918 57,615 ------ ------ ------ ------ ------ ------ ------ ------ Net income 46,087 53,919 83,954 137,259 56,906 48,709 147,285 132,049 Less: Net income attributable to noncontrolling interests 4,419 3,988 8,373 10,517 4,419 3,988 9,979 10,517 ----- ----- ----- ------ ----- ----- ----- ------ Net income attributable to RPM International Inc. Stockholders $41,668 $49,931 $75,581 $126,742 $52,487 $44,721 $137,306 $121,532 ======= ======= ======= ======== ======= ======= ======== ======== Earnings per share of common stock attributable to RPM International Inc. Stockholders: Basic $0.32 $0.38 $0.57 $0.97 $0.40 $0.34 $1.04 $0.93 ===== ===== ===== ===== ===== ===== ===== ===== Diluted $0.31 $0.38 $0.57 $0.97 $0.40 $0.34 $1.04 $0.93 ===== ===== ===== ===== ===== ===== ===== ===== Average shares of common stock outstanding - basic 128,885 127,986 128,844 128,048 128,885 127,986 128,844 128,048 ======= ======= ======= ======= ======= ======= ======= ======= Average shares of common stock outstanding - diluted 129,700 128,432 129,635 128,537 129,700 128,432 129,635 128,537 ======= ======= ======= ======= ======= ======= ======= ======= (a) Refer to the attached page for a reconciliation of as reported figures to adjusted figures presented above. SUPPLEMENTAL SEGMENT INFORMATION IN THOUSANDS (Unaudited) AS REPORTED ADJUSTED (a) ----------- ----------- Three Months Ended Six Months Ended Three Months Ended Six Months Ended November 30, November 30, November 30, November 30, ------------ ------------ ------------ ------------ 2012 2011 2012 2011 2012 2011 2012 2011 ---- ---- ---- ---- ---- ---- ---- ---- Net Sales: Industrial Segment $691,076 $641,538 $1,394,411 $1,308,554 $691,076 $641,538 $1,397,289 $1,308,554 Consumer Segment 326,350 274,547 669,729 593,449 326,350 274,547 669,729 593,449 Total $1,017,426 $916,085 $2,064,140 $1,902,003 $1,017,426 $916,085 $2,067,018 $1,902,003 Income Before Income Taxes (b): Industrial Segment Income Before Income Taxes (b) $75,495 $77,224 $149,799 $168,770 $75,495 $72,014 $170,541 $163,560 Interest (Expense), Net (c) (2,626) (1,065) (5,234) (1,982) (2,626) (1,065) (5,234) (1,982) EBIT (d) $78,121 $78,289 $155,033 $170,752 $78,121 $73,079 $175,775 $165,542 Consumer Segment Income Before Income Taxes (b) $38,561 $26,753 $97,349 $78,265 $38,561 $26,753 $97,349 $78,265 Interest (Expense), Net (c) (19) (21) (19) 15 (19) (21) (19) 15 EBIT (d) $38,580 $26,774 $97,368 $78,250 $38,580 $26,774 $97,368 $78,250 Corporate/Other (Expense) Before Income Taxes (b) $(43,014) $(27,807) $(104,044) $(52,161) $(32,195) $(27,807) $(57,687) $(52,161) Interest (Expense), Net (c) (15,859) (15,778) (24,707) (32,679) (15,859) (15,778) (24,707) (32,679) EBIT (d) $(27,155) $(12,029) $(79,337) $(19,482) $(16,336) $(12,029) $(32,980) $(19,482) Consolidated Income Before Income Taxes (b) $71,042 $76,170 $143,104 $194,874 $81,861 $70,960 $210,203 $189,664 Interest (Expense), Net (c) (18,504) (16,864) (29,960) (34,646) (18,504) (16,864) (29,960) (34,646) EBIT (d) $89,546 $93,034 $173,064 $229,520 $100,365 $87,824 $240,163 $224,310 (a) Refer to the attached page for a reconciliation of as reported figures to adjusted figures presented above. (b) 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. (c) Interest (expense), net includes the combination of interest (expense) and investment income/(expense), net. (d) EBIT is defined as earnings (loss) before interest and taxes. We evaluate the profit performance of our segments based on income before income taxes, but also look to EBIT as a performance evaluation measure because interest expense is essentially related to corporate acquisitions, as opposed to segment operations. 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, operating income as determined in accordance with GAAP, since EBIT omits the impact of interest and taxes in determining operating performance, which represent items necessary to our continued operations, given our level of indebtedness and ongoing tax obligations. Nonetheless, EBIT is a key measure expected by and useful to our fixed income investors, rating agencies and the banking community all of whom believe, and we concur, that this measure is critical to the capital markets' analysis of our segments' core operating performance. We also evaluate EBIT because it is clear that movements in EBIT impact our ability to attract financing. Our underwriters and bankers consistently require inclusion of this measure in offering memoranda in conjunction with any debt underwriting or bank financing. EBIT may not be indicative of our historical operating results, nor is it meant to be predictive of potential future results.
CONSOLIDATED STATEMENTS OF INCOME RECONCILIATION OF "AS REPORTED" TO "ADJUSTED" IN THOUSANDS, EXCEPT PER SHARE DATA (Unaudited) Three Months Ended November 30, 2012 Three Months Ended November 30, 2011 ------------------------------------ ------------------------------------ AS REPORTED Adjustments ADJUSTED AS REPORTED Adjustments ADJUSTED ----------- ----------- -------- ----------- ----------- -------- Net Sales $1,017,426 $ - $1,017,426 $916,085 $ - $916,085 Cost of sales 592,425 592,425 547,064 547,064 ------- ------- ------- ------- Gross profit 425,001 425,001 369,021 369,021 Selling, general & administrative expenses 325,761 325,761 282,154 282,154 Interest expense 19,868 19,868 17,909 17,909 Investment (income), net (1,364) (1,364) (1,045) (1,045) Other expense (income), net 9,694 (10,819) (1) (1,125) (6,167) 5,210 (2) (957) ----- ------- ------ ------ ----- ---- Income before income taxes 71,042 10,819 81,861 76,170 (5,210) 70,960 Provision for income taxes 24,955 24,955 22,251 22,251 ------ ------ ------ ------ Net income 46,087 10,819 56,906 53,919 (5,210) 48,709 Less: Net income attributable to noncontrolling interests 4,419 4,419 3,988 3,988 ----- ----- ----- ----- Net income attributable to RPM International Inc. Stockholders $41,668 $10,819 $52,487 $49,931 $(5,210) $44,721 ======= ======= ======= ======= ======= ======= Earnings per share attributable to RPM International Inc. Stockholders: Basic $0.32 $0.08 $0.40 $0.38 $(0.04) $0.34 ===== ===== ===== ===== ====== ===== Diluted $0.31 $0.09 $0.40 $0.38 $(0.04) $0.34 ===== ===== ===== ===== ====== ===== (1) Adjustment removes the impact of the write-down at Corporate of RPM's remaining equity investment in Kemrock of $10,819 to zero in the second quarter of fiscal 2013. (2) Adjustment removes the income recognized by the industrial segment related to RPM's equity method investment in Kemrock recognized during the second quarter of fiscal 2012 of $5,210, which included a $4,631 cumulative catch-up. Six Months Ended November 30, 2012 Six Months Ended November 30, 2011 ---------------------------------- ---------------------------------- AS REPORTED Adjustments ADJUSTED AS REPORTED Adjustments ADJUSTED ----------- ----------- -------- ----------- ----------- -------- Net Sales $2,064,140 $2,878 $2,067,018 $1,902,003 $ - $1,902,003 Cost of sales 1,205,259 (2,541) 1,202,718 1,123,356 1,123,356 --------- ------ --------- --------- --------- Gross profit 858,881 5,419 (3) 864,300 778,647 778,647 Selling, general & administrative expenses 636,701 (10,588) (4) 626,113 556,097 556,097 Interest expense 38,298 38,298 35,715 35,715 Investment (income), net (8,338) (8,338) (1,069) (1,069) Other expense (income), net 49,116 (51,092) (5) (1,976) (6,970) 5,210 (2) (1,760) ------ ------- ------ ------ ----- ------ Income before income taxes 143,104 67,099 210,203 194,874 (5,210) 189,664 Provision for income taxes 59,150 3,768 62,918 57,615 57,615 ------ ----- ------ ------ ------ Net income 83,954 63,331 147,285 137,259 (5,210) 132,049 Less: Net income attributable to noncontrolling interests 8,373 1,606 9,979 10,517 10,517 ----- ----- ----- ------ ------ Net income attributable to RPM International Inc. Stockholders $75,581 $61,725 $137,306 $126,742 $(5,210) $121,532 ======= ======= ======== ======== ======= ======== Earnings per share attributable to RPM International Inc. Stockholders: Basic $0.57 $0.47 $1.04 $0.97 $(0.04) $0.93 ===== ===== ===== ===== ====== ===== Diluted $0.57 $0.47 $1.04 $0.97 $(0.04) $0.93 ===== ===== ===== ===== ====== ===== (3) Represents an adjustment for revised cost estimates in the Roofing Division of RPM's Building Solutions Group (industrial segment) in conjunction with unprofitable contracts outside of North America of $5,419 during the first quarter of fiscal 2013. (4) Adjustment includes $5,588 in Roofing exit costs and $5,000 of charges relating to Kemrock investment write-downs at RPM's Performance Coatings Group (industrial segment) during the first quarter of fiscal 2013. (5) Adjustments include the write-downs of Kemrock investments, including $35,538 at Corporate and $4,735 at RPM's Performance Coatings Group (industrial segment) during the first quarter of fiscal 2013 and an additional $10,819 write-down at Corporate in the second quarter of fiscal 2013.
CONSOLIDATED BALANCE SHEETS IN THOUSANDS November 30, 2012 November 30, 2011 May 31, 2012 ----------------- ----------------- ------------ (Unaudited) (Unaudited) Assets Current Assets Cash and cash equivalents $261,940 $300,955 $315,968 Trade accounts receivable 757,123 689,664 772,048 Allowance for doubtful accounts (29,226) (27,839) (26,507) Net trade accounts receivable 727,897 661,825 745,541 Inventories 545,678 510,527 489,978 Deferred income taxes 21,041 16,950 19,868 Prepaid expenses and other current assets 241,984 230,954 239,982 Total current assets 1,798,540 1,721,211 1,811,337 Property, Plant and Equipment, at Cost 1,138,474 1,010,673 1,050,965 Allowance for depreciation and amortization (663,784) (628,546) (632,133) Property, plant and equipment, net 474,690 382,127 418,832 Other Assets Goodwill 1,120,437 865,529 849,346 Other intangible assets, net of amortization 478,212 353,652 345,620 Other 93,691 109,494 134,885 Total other assets 1,692,340 1,328,675 1,329,851 Total Assets $3,965,570 $3,432,013 $3,560,020 ========== ========== ========== Liabilities and Stockholders' Equity Current Liabilities Accounts payable $316,105 $324,519 $391,467 Current portion of long-term debt 2,068 1,950 2,584 Accrued compensation and benefits 127,447 124,262 166,178 Accrued loss reserves 60,629 52,783 54,652 Other accrued liabilities 192,360 149,266 144,911 Total current liabilities 698,609 652,780 759,792 Long-Term Liabilities Long-term debt, less current maturities 1,413,101 1,092,454 1,112,952 Other long-term liabilities 409,538 225,519 346,967 Deferred income taxes 51,780 73,233 26,326 Total long-term liabilities 1,874,419 1,391,206 1,486,245 Total liabilities 2,573,028 2,043,986 2,246,037 Stockholders' Equity Preferred stock; none issued Common stock (outstanding 132,347; 131,233; 131,555) 1,323 1,312 1,316 Paid-in capital 753,693 743,118 742,895 Treasury stock, at cost (70,574) (68,494) (69,480) Accumulated other comprehensive (loss) (145,835) (74,999) (177,893) Retained earnings 704,345 654,157 686,818 Total RPM International Inc. stockholders' equity 1,242,952 1,255,094 1,183,656 Noncontrolling interest 149,590 132,933 130,327 Total equity 1,392,542 1,388,027 1,313,983 Total Liabilities and Stockholders' Equity $3,965,570 $3,432,013 $3,560,020 ========== ========== ==========
CONSOLIDATED STATEMENTS OF CASH FLOWS IN THOUSANDS (Unaudited) Six Months Ended November 30, ------------ 2012 2011 ---- ---- Cash Flows From Operating Activities: Net income $83,954 $137,259 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 27,644 25,891 Amortization 13,282 11,027 Impairment loss on investment in Kemrock 51,092 Deferred income taxes 3,973 (1,620) Stock-based compensation expense 8,135 6,692 Other (685) (5,204) Changes in assets and liabilities, net of effect from purchases and sales of businesses: Decrease in receivables 51,830 76,864 (Increase) in inventory (33,198) (24,687) Decrease (increase) in prepaid expenses and other current and long-term assets 14,799 (10,040) (Decrease) in accounts payable (89,300) (46,345) (Decrease) in accrued compensation and benefits (43,108) (36,662) Increase (decrease) in accrued loss reserves 5,393 (5,313) Increase (decrease) in other accrued liabilities 36,663 (14,952) Other (2,853) (2,880) Cash From Operating Activities 127,621 110,030 ------- ------- Cash Flows From Investing Activities: Capital expenditures (30,849) (18,353) Acquisition of businesses, net of cash acquired (396,785) (132,905) Purchase of marketable securities (68,442) (39,337) Proceeds from sales of marketable securities 58,194 36,937 Other 4,103 4,072 Cash (Used For) Investing Activities (433,779) (149,586) -------- -------- Cash Flows From Financing Activities: Additions to long-term and short-term debt 334,247 7,215 Reductions of long-term and short-term debt (41,269) (22,845) Cash dividends (58,054) (55,620) Repurchase of stock (1,094) (5,999) Other 5,650 3,181 Cash Provided By (Used For) Financing Activities 239,480 (74,068) ------- ------- Effect of Exchange Rate Changes on Cash and Cash Equivalents 12,650 (20,432) ------ ------- Net Change in Cash and Cash Equivalents (54,028) (134,056) Cash and Cash Equivalents at Beginning of Period 315,968 435,011 ------- ------- Cash and Cash Equivalents at End of Period $261,940 $300,955 ======== ========
SOURCE RPM International Inc.