RPM Reports Record Results for Fiscal 2022 Fourth Quarter
RPM International reported a strong fiscal 2022 fourth quarter, with net sales reaching a record $1.98 billion, a 13.7% increase year-over-year, and net income up 27.4% to $199 million. Diluted EPS also hit a record $1.54, reflecting an increase of 28.3%. Total EBIT rose 17.1% to $251.7 million. For the full fiscal year, sales increased 9.8% to $6.71 billion, but net income decreased by 2.2%. The outlook for fiscal 2023 suggests mid-teens sales growth and a 20-25% increase in adjusted EBIT for the first quarter.
- Fourth-quarter net sales increased 13.7% to a record $1.98 billion.
- Fourth-quarter net income increased 27.4% to a record $199 million.
- Diluted EPS rose to a record $1.54, up 28.3% year-over-year.
- Fourth-quarter EBIT increased 17.1% to a record $251.7 million.
- Fiscal 2023 outlook anticipates sales growth in the mid-teens.
- Adjusted EBIT for Q1 FY2023 is expected to grow 20% to 25%.
- Fiscal 2022 full-year net income decreased by 2.2% compared to fiscal 2021.
- Fiscal 2022 diluted EPS decreased by 2.1% to $3.79.
- Full-year adjusted EBIT decreased 9.7% to $708.4 million.
- Cash from operations dropped significantly to $178.7 million from $766.2 million.
-
Fourth-quarter net sales increased
13.7% to a record$1.98 billion -
Fourth-quarter net income increased
27.4% to a record$199.0 million $221.7 million $1.54 $1.42 -
Fourth-quarter EBIT increased
17.1% to a record$251.7 million 11.7% to a record$263.7 million -
Fiscal 2022 full-year sales increased
9.8% to a record$6.71 billion -
Fiscal 2022 full-year net income was
$491.5 million $606.8 million $3.79 $3.66 -
Fiscal 2023 first-quarter outlook calls for sales growth in the mid-teens and adjusted EBIT growth of
20% to25%
“Our nimble businesses quickly adapted to dynamically shifting supply chain constraints, inflationary challenges and foreign exchange headwinds to steadily generate momentum in the second half of fiscal 2022. Our associates’ efforts culminated in a fourth quarter of consolidated record sales and record adjusted EBIT,” stated RPM Chairman and CEO
“This fourth-quarter performance was driven on the top line by all four of our segments, each of which generated record sales. On the bottom line, three of our four segments produced record fourth-quarter adjusted EBIT. In our
Fourth-Quarter Consolidated Results
Fiscal 2022 fourth-quarter net sales were a record
The fourth 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 increased
Fourth-Quarter Segment Sales and Earnings
CPG net sales were a record
Even with comparisons to a strong prior year when sales and earnings were at record levels, CPG continued to generate record top-line growth driven by its differentiated service model, as well as its unique building envelope and restoration solutions. Businesses producing the strongest sales growth were those providing roofing systems, insulated concrete forms, as well as admixtures and repair products for concrete. Results in international markets were mixed with
PCG net sales were a record
Flooring systems, protective coatings and fiberglass reinforced plastic grating all generated double-digit sales growth. A rebound in international markets, as well as continued success in vertical end markets – such as energy, technology, and food and beverage – helped drive PCG’s results. Additionally, improved sales management systems and price increases were major factors in the segment’s top-line success. Adjusted EBIT was a record for the fiscal 2022 fourth quarter, driven by volume growth, selling price increases, revenue growth leveraging, good product mix and operational improvements.
SPG reported record net sales of
The majority of SPG’s businesses experienced double-digit sales growth. Leading the way were its OEM coatings companies, as well as its food coatings and additives business, which has improved performance under new management. Its disaster restoration equipment business continued to rebound as it cleared backlogs caused by semiconductor chip shortages and grew sales in the teens despite a difficult comparison to a strong prior year that was driven by winter storm Uri. The segment’s increase in adjusted EBIT was bolstered by the favorable impact of higher sales, which were leveraged to the bottom line due to selling price increases that began catching up with prior cost inflation.
Top-line growth was driven by improved supply of key alkyd resins produced by the manufacturing plant RPM acquired last September, as well as price increases and high growth in product lines popular with professional remodelers, including caulks and sealants. While North American markets grew, European markets remained challenged due to macroeconomic headwinds in the region. Adjusted EBIT was impacted by continued raw material cost inflation and higher costs from ongoing shipping challenges and industry labor shortages. In response, the
Full-Year Consolidated Results
Fiscal 2022 full-year net sales were
Fiscal 2022 and 2021 included certain restructuring and other items that are not indicative of 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 decreased
Cash Flow and Financial Position
For fiscal 2022, cash from operations was
Total liquidity, including cash and committed revolving credit facilities was
Business Outlook
For the first quarter of fiscal 2023, the strengthening
Despite these challenges, management’s proactive measures over the course of fiscal 2022 enabled RPM to accelerate momentum in the business and it is expected to carry over into fiscal 2023. The company expects to continue implementing price increases as needed and improving operational efficiencies in order to minimize cost pressures and restore margins closer to historical levels. While there is a recessionary undercurrent in the economy, RPM anticipates that demand for its products and services will remain strong, particularly those that provide protective, restorative and energy efficiency benefits, which meet the needs of customers who seek to extend the useful life of their assets, make them more sustainable and save them money. In addition, the company is making strategic investments in organic growth initiatives focused on market opportunities and industry trends.
Based on these factors, RPM expects to generate fiscal 2023 first-quarter consolidated sales growth in the mid-teens over last year’s record first-quarter sales. The company anticipates sales growth in the teens in all four of its operating segments. It is likely that the
The company remains focused on creating sustained value for its stakeholders, including its customers, associates and investors.
Webcast and Conference Call Information
Management will host a conference call to discuss these results beginning at
For those unable to listen to the live call, a replay will be available from approximately
About RPM
For more information, contact
# # #
Footnote
1 Changes in marketable securities resulted in a net after-tax loss of
2 Changes in marketable securities resulted in a net after-tax loss of
Use of Non-GAAP Financial Information
To supplement the financial information presented in accordance with Generally Accepted Accounting Principles in
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
| CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||||||
| IN THOUSANDS, EXCEPT PER SHARE DATA | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
Three Months Ended |
|
Year Ended |
||||||||||||||
|
|
|
|
|
|
|
||||||||||
2022 |
|
2021 |
|
2022 |
|
2021 |
||||||||||
$ |
1,983,890 |
|
$ |
1,744,307 |
|
$ |
6,707,728 |
|
$ |
6,106,288 |
|
|||||
| Cost of Sales |
|
1,245,388 |
|
|
1,050,916 |
|
|
4,274,675 |
|
|
3,701,129 |
|
||||
| Gross Profit |
|
738,502 |
|
|
693,391 |
|
|
2,433,053 |
|
|
2,405,159 |
|
||||
| Selling, General & Administrative Expenses |
|
498,039 |
|
|
466,471 |
|
|
1,788,284 |
|
|
1,664,026 |
|
||||
| Restructuring Expense |
|
1,148 |
|
|
5,826 |
|
|
6,276 |
|
|
18,106 |
|
||||
| Interest Expense |
|
23,801 |
|
|
21,425 |
|
|
87,928 |
|
|
85,400 |
|
||||
| Investment Expense (Income), Net |
|
6,174 |
|
|
(10,716 |
) |
|
7,595 |
|
|
(44,450 |
) |
||||
| (Gain) on Sales of Assets, Net |
|
(9,492 |
) |
|
- |
|
|
(51,983 |
) |
|
- |
|
||||
| Other (Income) Expense, Net |
|
(2,845 |
) |
|
6,132 |
|
|
(11,846 |
) |
|
13,639 |
|
||||
| Income Before Income Taxes |
|
221,677 |
|
|
204,253 |
|
|
606,799 |
|
|
668,438 |
|
||||
| Provision for Income Taxes |
|
22,371 |
|
|
47,889 |
|
|
114,333 |
|
|
164,938 |
|
||||
| Net Income |
|
199,306 |
|
|
156,364 |
|
|
492,466 |
|
|
503,500 |
|
||||
| Less: Net Income Attributable to Noncontrolling Interests |
|
301 |
|
|
217 |
|
|
985 |
|
|
857 |
|
||||
| Net Income Attributable to |
$ |
199,005 |
|
$ |
156,147 |
|
$ |
491,481 |
|
$ |
502,643 |
|
||||
| Earnings per share of common stock attributable to |
||||||||||||||||
| Basic | $ |
1.54 |
|
$ |
1.21 |
|
$ |
3.81 |
|
$ |
3.89 |
|
||||
| Diluted | $ |
1.54 |
|
$ |
1.20 |
|
$ |
3.79 |
|
$ |
3.87 |
|
||||
| Average shares of common stock outstanding - basic |
|
127,573 |
|
|
127,977 |
|
|
127,948 |
|
|
128,334 |
|
||||
| Average shares of common stock outstanding - diluted |
|
129,467 |
|
|
129,728 |
|
|
129,580 |
|
|
128,927 |
|
||||
| SUPPLEMENTAL SEGMENT INFORMATION | |||||||||||||||||
| IN THOUSANDS | |||||||||||||||||
| (Unaudited) | |||||||||||||||||
Three Months Ended |
|
Year Ended |
|||||||||||||||
|
|
|
|
|
|
|
|||||||||||
2022 |
|
2021 |
|
2022 |
|
2021 |
|||||||||||
| CPG Segment | $ |
745,908 |
|
$ |
629,386 |
|
$ |
2,486,486 |
|
$ |
2,076,565 |
|
|||||
| PCG Segment |
|
329,392 |
|
|
283,311 |
|
|
1,188,379 |
|
|
1,028,456 |
|
|||||
| SPG Segment |
|
225,766 |
|
|
202,751 |
|
|
790,816 |
|
|
705,990 |
|
|||||
| Consumer Segment |
|
682,824 |
|
|
628,859 |
|
|
2,242,047 |
|
|
2,295,277 |
|
|||||
| Total | $ |
1,983,890 |
|
$ |
1,744,307 |
|
$ |
6,707,728 |
|
$ |
6,106,288 |
|
|||||
| Income Before Income Taxes: | |||||||||||||||||
| CPG Segment | |||||||||||||||||
| Income Before Income Taxes (a) | $ |
120,286 |
|
$ |
107,160 |
|
$ |
396,509 |
|
$ |
291,773 |
|
|||||
| Interest (Expense), Net (b) |
|
(1,419 |
) |
|
(1,705 |
) |
|
(6,673 |
) |
|
(8,030 |
) |
|||||
| EBIT (c) |
|
121,705 |
|
|
108,865 |
|
|
403,182 |
|
|
299,803 |
|
|||||
| MAP to Growth & other cost-savings related initiatives (d) |
|
709 |
|
|
1,512 |
|
|
3,967 |
|
|
10,158 |
|
|||||
| Unusual executive costs, net of insurance proceeds (f) |
|
- |
|
|
- |
|
|
805 |
|
|
- |
|
|||||
| Adjustment to Exit Flowcrete China (g) |
|
- |
|
|
- |
|
|
- |
|
|
(305 |
) |
|||||
| (Gain) on Sales of Assets, Net (i) |
|
- |
|
|
- |
|
|
(41,906 |
) |
|
- |
|
|||||
| Adjusted EBIT | $ |
122,414 |
|
$ |
110,377 |
|
$ |
366,048 |
|
$ |
309,656 |
|
|||||
| PCG Segment | |||||||||||||||||
| Income Before Income Taxes (a) | $ |
41,219 |
|
$ |
25,968 |
|
$ |
139,068 |
|
$ |
90,687 |
|
|||||
| Interest Income, Net (b) |
|
168 |
|
|
76 |
|
|
575 |
|
|
128 |
|
|||||
| EBIT (c) |
|
41,051 |
|
|
25,892 |
|
|
138,493 |
|
|
90,559 |
|
|||||
| MAP to Growth & other cost-savings related initiatives (d) |
|
1,534 |
|
|
4,586 |
|
|
7,242 |
|
|
12,949 |
|
|||||
| Acquisition-related costs (e) |
|
- |
|
|
546 |
|
|
339 |
|
|
546 |
|
|||||
| Unusual executive costs, net of insurance proceeds (f) |
|
- |
|
|
- |
|
|
472 |
|
|
- |
|
|||||
| Adjusted EBIT | $ |
42,585 |
|
$ |
31,024 |
|
$ |
146,546 |
|
$ |
104,054 |
|
|||||
| SPG Segment | |||||||||||||||||
| Income Before Income Taxes (a) | $ |
50,909 |
|
$ |
34,827 |
|
$ |
121,937 |
|
$ |
108,242 |
|
|||||
| Interest (Expense), Net (b) |
|
(4 |
) |
|
(65 |
) |
|
(86 |
) |
|
(284 |
) |
|||||
| EBIT (c) |
|
50,913 |
|
|
34,892 |
|
|
122,023 |
|
|
108,526 |
|
|||||
| MAP to Growth & other cost-savings related initiatives (d) |
|
18 |
|
|
1,400 |
|
|
1,440 |
|
|
6,732 |
|
|||||
| Acquisition-related costs (e) |
|
- |
|
|
- |
|
|
(45 |
) |
|
- |
|
|||||
| Unusual executive costs, net of insurance proceeds (f) |
|
520 |
|
|
(10 |
) |
|
520 |
|
|
(10 |
) |
|||||
| (Gain) on Sales of Assets, Net (i) |
|
(7,257 |
) |
|
- |
|
|
(7,257 |
) |
|
- |
|
|||||
| Adjusted EBIT | $ |
44,194 |
|
$ |
36,282 |
|
$ |
116,681 |
|
$ |
115,248 |
|
|||||
| Consumer Segment | |||||||||||||||||
| Income Before Income Taxes (a) | $ |
79,172 |
|
$ |
90,976 |
|
$ |
175,084 |
|
$ |
354,789 |
|
|||||
| Interest Income (Expense), Net (b) |
|
55 |
|
|
(56 |
) |
|
266 |
|
|
(242 |
) |
|||||
| EBIT (c) |
|
79,117 |
|
|
91,032 |
|
|
174,818 |
|
|
355,031 |
|
|||||
| MAP to Growth & other cost-savings related initiatives (d) |
|
1,155 |
|
|
2,551 |
|
|
2,409 |
|
|
12,527 |
|
|||||
| Acquisition-related costs (e) |
|
- |
|
|
- |
|
|
- |
|
|
1,178 |
|
|||||
| Unusual executive costs, net of insurance proceeds (f) |
|
- |
|
|
- |
|
|
776 |
|
|
- |
|
|||||
| Adjusted EBIT | $ |
80,272 |
|
$ |
93,583 |
|
$ |
178,003 |
|
$ |
368,736 |
|
|||||
| Corporate/Other | |||||||||||||||||
| (Loss) Before Income Taxes (a) | $ |
(69,909 |
) |
$ |
(54,678 |
) |
$ |
(225,799 |
) |
$ |
(177,053 |
) |
|||||
| Interest (Expense), Net (b) |
|
(28,775 |
) |
|
(8,959 |
) |
|
(89,605 |
) |
|
(32,522 |
) |
|||||
| EBIT (c) |
|
(41,134 |
) |
|
(45,719 |
) |
|
(136,194 |
) |
|
(144,531 |
) |
|||||
| MAP to Growth & other cost-savings related initiatives (d) |
|
13,225 |
|
|
10,377 |
|
|
30,497 |
|
|
30,406 |
|
|||||
| Acquisition-related costs (e) |
|
419 |
|
|
- |
|
|
2,482 |
|
|
- |
|
|||||
| Unusual executive costs, net of insurance proceeds (f) |
|
392 |
|
|
272 |
|
|
3,017 |
|
|
(996 |
) |
|||||
| Settlement for SEC Investigation & Enforcement Action (h) |
|
- |
|
|
- |
|
|
- |
|
|
2,000 |
|
|||||
| Foreign exchange loss on settlement of debt (j) |
|
1,357 |
|
|
- |
|
|
1,357 |
|
|
- |
|
|||||
| Adjusted EBIT | $ |
(25,741 |
) |
$ |
(35,070 |
) |
$ |
(98,841 |
) |
$ |
(113,121 |
) |
|||||
| TOTAL CONSOLIDATED | |||||||||||||||||
| Income Before Income Taxes (a) | $ |
221,677 |
|
$ |
204,253 |
|
$ |
606,799 |
|
$ |
668,438 |
|
|||||
| Interest (Expense) |
|
(23,801 |
) |
|
(21,425 |
) |
|
(87,928 |
) |
|
(85,400 |
) |
|||||
| Investment (Expense) Income, Net |
|
(6,174 |
) |
|
10,716 |
|
|
(7,595 |
) |
|
44,450 |
|
|||||
| EBIT (c) |
|
251,652 |
|
|
214,962 |
|
|
702,322 |
|
|
709,388 |
|
|||||
| MAP to Growth & other cost-savings related initiatives (d) |
|
16,641 |
|
|
20,426 |
|
|
45,555 |
|
|
72,772 |
|
|||||
| Acquisition-related costs (e) |
|
419 |
|
|
546 |
|
|
2,776 |
|
|
1,724 |
|
|||||
| Unusual executive costs, net of insurance proceeds (f) |
|
912 |
|
|
262 |
|
|
5,590 |
|
|
(1,006 |
) |
|||||
| Adjustment to Exit Flowcrete China (g) |
|
- |
|
|
- |
|
|
- |
|
|
(305 |
) |
|||||
| Settlement for SEC Investigation & Enforcement Action (h) |
|
- |
|
|
- |
|
|
- |
|
|
2,000 |
|
|||||
| (Gain) on Sales of Assets, Net (i) |
|
(7,257 |
) |
|
- |
|
|
(49,163 |
) |
|
- |
|
|||||
| Foreign exchange loss on settlement of debt (j) |
|
1,357 |
|
|
- |
|
|
1,357 |
|
|
- |
|
|||||
| Adjusted EBIT | $ |
263,724 |
|
$ |
236,196 |
|
$ |
708,437 |
|
$ |
784,573 |
|
|||||
(a) |
The presentation includes a reconciliation of Income (Loss) Before Income Taxes, a measure defined by Generally Accepted Accounting Principles in |
|||||||||||
(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. |
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|
||||||||||||
|
||||||||||||
|
||||||||||||
|
||||||||||||
|
||||||||||||
(d) |
Reflects restructuring and other charges, almost all of which have been incurred in relation to our Margin Acceleration Plan initiatives, as follows:
|
|||||||||||
(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 ~ |
|||||||||||
(h) |
On |
|||||||||||
(i) |
Reflects the net gain associated with the sale and leaseback of certain real property assets within our CPG and SPG segments during 2022. |
|||||||||||
(j) |
Foreign exchange loss on early payment of the |
|||||||||||
| SUPPLEMENTAL INFORMATION | |||||||||||||||||
| RECONCILIATION OF "REPORTED" TO "ADJUSTED" AMOUNTS | |||||||||||||||||
| (Unaudited) | |||||||||||||||||
Three Months Ended |
|
Year Ended |
|||||||||||||||
|
|
|
|
|
|
|
|||||||||||
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 | $ |
1.54 |
|
$ |
1.20 |
|
$ |
3.79 |
|
$ |
3.87 |
|
|||||
| MAP to Growth & other cost-savings related initiatives (d) |
|
0.10 |
|
|
0.13 |
|
|
0.27 |
|
|
0.45 |
|
|||||
| Acquisition-related costs (e) |
|
- |
|
|
- |
|
|
0.02 |
|
|
0.01 |
|
|||||
| Unusual executive costs, net of insurance proceeds (f) |
|
- |
|
|
- |
|
|
0.03 |
|
|
(0.01 |
) |
|||||
| Settlement for SEC Investigation & Enforcement Action (h) |
|
- |
|
|
- |
|
|
- |
|
|
0.01 |
|
|||||
| (Gain) on Sales of Assets, Net (i) |
|
(0.06 |
) |
|
- |
|
|
(0.34 |
) |
|
- |
|
|||||
| Foreign exchange loss on settlement of debt (j) |
|
0.01 |
|
|
- |
|
|
0.01 |
|
|
- |
|
|||||
| Discrete Tax Adjustments (k) |
|
(0.24 |
) |
|
0.04 |
|
|
(0.24 |
) |
|
0.08 |
|
|||||
| Investment returns (l) |
|
0.07 |
|
|
(0.09 |
) |
|
0.12 |
|
|
(0.25 |
) |
|||||
| Adjusted Earnings per Diluted Share (m) | $ |
1.42 |
|
$ |
1.28 |
|
$ |
3.66 |
|
$ |
4.16 |
|
|||||
| (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 |
||||||||||||||||
| (i) | Reflects the net gain associated with the sale and leaseback of certain real property assets within our CPG and SPG segments during 2022. | ||||||||||||||||
| (j) | Foreign exchange loss on early payment of the |
||||||||||||||||
| (k) | Fiscal 2022 includes income tax benefits associated with a reduction of the deferred income tax liability for unremitted foreign earnings and the reversal of valuation allowance against foreign tax credits. Fiscal 2021 includes income tax charges for an increase to our deferred income tax liability for withholding taxes on additional unremitted foreign earnings not considered permanently reinvested and for income tax charges related to certain foreign legal entity restructurings. | ||||||||||||||||
| (l) | 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. | ||||||||||||||||
| (m) | 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) | ||||||||||
| Assets | ||||||||||
| Current Assets | ||||||||||
| Cash and cash equivalents | $ |
201,672 |
|
$ |
246,704 |
|
||||
| Trade accounts receivable |
|
1,479,301 |
|
|
1,336,728 |
|
||||
| Allowance for doubtful accounts |
|
(46,669 |
) |
|
(55,922 |
) |
||||
| Net trade accounts receivable |
|
1,432,632 |
|
|
1,280,806 |
|
||||
| Inventories |
|
1,212,618 |
|
|
938,095 |
|
||||
| Prepaid expenses and other current assets |
|
304,887 |
|
|
316,399 |
|
||||
| Total current assets |
|
3,151,809 |
|
|
2,782,004 |
|
||||
| Property, Plant and Equipment, at Cost |
|
2,132,915 |
|
|
1,967,482 |
|
||||
| Allowance for depreciation |
|
(1,028,932 |
) |
|
(1,002,300 |
) |
||||
| Property, plant and equipment, net |
|
1,103,983 |
|
|
965,182 |
|
||||
| Other Assets | ||||||||||
|
1,337,868 |
|
|
1,345,754 |
|
|||||
| Other intangible assets, net of amortization |
|
592,261 |
|
|
628,693 |
|
||||
| Operating lease right-of-use assets |
|
307,797 |
|
|
300,827 |
|
||||
| Deferred income taxes |
|
18,914 |
|
|
26,804 |
|
||||
| Other |
|
195,074 |
|
|
203,705 |
|
||||
| Total other assets |
|
2,451,914 |
|
|
2,505,783 |
|
||||
| Total Assets | $ |
6,707,706 |
|
$ |
6,252,969 |
|
||||
| Liabilities and Stockholders' Equity | ||||||||||
| Current Liabilities | ||||||||||
| Accounts payable | $ |
800,369 |
|
$ |
717,176 |
|
||||
| Current portion of long-term debt |
|
603,454 |
|
|
1,282 |
|
||||
| Accrued compensation and benefits |
|
262,445 |
|
|
258,380 |
|
||||
| Accrued losses |
|
24,508 |
|
|
29,054 |
|
||||
| Other accrued liabilities |
|
325,632 |
|
|
325,522 |
|
||||
| Total current liabilities |
|
2,016,408 |
|
|
1,331,414 |
|
||||
| Long-Term Liabilities | ||||||||||
| Long-term debt, less current maturities |
|
2,083,155 |
|
|
2,378,544 |
|
||||
| Operating lease liabilities |
|
265,139 |
|
|
257,415 |
|
||||
| Other long-term liabilities |
|
276,990 |
|
|
436,176 |
|
||||
| Deferred income taxes |
|
82,186 |
|
|
106,395 |
|
||||
| Total long-term liabilities |
|
2,707,470 |
|
|
3,178,530 |
|
||||
| Total liabilities |
|
4,723,878 |
|
|
4,509,944 |
|
||||
| Stockholders' Equity | ||||||||||
| Preferred stock; none issued |
|
- |
|
|
- |
|
||||
| Common stock (outstanding 129,199; 129,573) |
|
1,292 |
|
|
1,295 |
|
||||
| Paid-in capital |
|
1,096,147 |
|
|
1,055,400 |
|
||||
|
(717,019 |
) |
|
(653,006 |
) |
|||||
| Accumulated other comprehensive (loss) |
|
(537,337 |
) |
|
(514,884 |
) |
||||
| Retained earnings |
|
2,139,346 |
|
|
1,852,259 |
|
||||
|
1,982,429 |
|
|
1,741,064 |
|
|||||
| Noncontrolling interest |
|
1,399 |
|
|
1,961 |
|
||||
| Total equity |
|
1,983,828 |
|
|
1,743,025 |
|
||||
| Total Liabilities and Stockholders' Equity | $ |
6,707,706 |
|
$ |
6,252,969 |
|
||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||
| IN THOUSANDS | |||||||||
| (Unaudited) | |||||||||
Year Ended |
|||||||||
|
|
|
|||||||
2022 |
|
2021 |
|||||||
| Cash Flows From Operating Activities: | |||||||||
| Net income | $ |
492,466 |
|
$ |
503,500 |
|
|||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||
| Depreciation and amortization |
|
153,074 |
|
|
146,857 |
|
|||
| Restructuring charges, net of payments |
|
(2,516 |
) |
|
(2,909 |
) |
|||
| Fair value adjustments to contingent earnout obligations |
|
3,253 |
|
|
(582 |
) |
|||
| Deferred income taxes |
|
(25,067 |
) |
|
20,188 |
|
|||
| Stock-based compensation expense |
|
40,114 |
|
|
40,926 |
|
|||
| Net loss (gain) on marketable securities |
|
17,706 |
|
|
(38,774 |
) |
|||
| Net (gain) on sales of assets |
|
(51,983 |
) |
|
- |
|
|||
| Other |
|
(66 |
) |
|
(2,340 |
) |
|||
| Changes in assets and liabilities, net of effect from purchases and sales of businesses: | |||||||||
| (Increase) in receivables |
|
(187,299 |
) |
|
(88,618 |
) |
|||
| (Increase) in inventory |
|
(304,197 |
) |
|
(68,802 |
) |
|||
| (Increase) in prepaid expenses and other current and long-term assets |
|
(13,040 |
) |
|
(11,457 |
) |
|||
| Increase in accounts payable |
|
101,223 |
|
|
151,388 |
|
|||
| Increase in accrued compensation and benefits |
|
9,737 |
|
|
62,966 |
|
|||
| (Decrease) increase in accrued losses |
|
(3,956 |
) |
|
8,510 |
|
|||
| (Decrease) increase in other accrued liabilities |
|
(50,718 |
) |
|
43,010 |
|
|||
| Other |
|
- |
|
|
2,293 |
|
|||
| Cash Provided By Operating Activities |
|
178,731 |
|
|
766,156 |
|
|||
| Cash Flows From Investing Activities: | |||||||||
| Capital expenditures |
|
(222,403 |
) |
|
(157,199 |
) |
|||
| Acquisition of businesses, net of cash acquired |
|
(127,457 |
) |
|
(165,223 |
) |
|||
| Purchase of marketable securities |
|
(15,032 |
) |
|
(121,669 |
) |
|||
| Proceeds from sales of marketable securities |
|
21,533 |
|
|
112,298 |
|
|||
| Proceeds from sales of assets |
|
76,590 |
|
|
- |
|
|||
| Other |
|
7,222 |
|
|
5,405 |
|
|||
| Cash (Used For) Investing Activities |
|
(259,547 |
) |
|
(326,388 |
) |
|||
| Cash Flows From Financing Activities: | |||||||||
| Additions to long-term and short-term debt |
|
437,564 |
|
|
- |
|
|||
| Reductions of long-term and short-term debt |
|
(101,505 |
) |
|
(188,278 |
) |
|||
| Cash dividends |
|
(204,394 |
) |
|
(194,720 |
) |
|||
| Repurchases of common stock |
|
(52,500 |
) |
|
(49,956 |
) |
|||
| Shares of common stock returned for taxes |
|
(11,549 |
) |
|
(22,826 |
) |
|||
| Payments of acquisition-related contingent consideration |
|
(5,774 |
) |
|
(2,218 |
) |
|||
| Other |
|
(4,452 |
) |
|
(1,621 |
) |
|||
| Cash Provided By (Used For) Financing Activities |
|
57,390 |
|
|
(459,619 |
) |
|||
| Effect of Exchange Rate Changes on Cash and Cash Equivalents |
|
(21,606 |
) |
|
33,139 |
|
|||
| Net Change in Cash and Cash Equivalents |
|
(45,032 |
) |
|
13,288 |
|
|||
| Cash and Cash Equivalents at Beginning of Period |
|
246,704 |
|
|
233,416 |
|
|||
| Cash and Cash Equivalents at End of Period | $ |
201,672 |
|
$ |
246,704 |
|
|||
View source version on businesswire.com: https://www.businesswire.com/news/home/20220725005245/en/
Vice President and Chief Financial Officer
330-273-5090
rgordon@rpminc.com
Source:
FAQ
What were RPM International's fourth-quarter sales figures for fiscal 2022?
How did RPM International perform financially in fiscal 2022?
What is the fiscal 2023 outlook for RPM International?
What record figures did RPM International achieve in the fourth quarter?
