-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Jh5on1uN948uPcSP64N+jCB/yMSrHzDCXgJB9etdzTGhubiZnRL3zz5YmlpSvelG 1Qnrg941kz06uvKh3VyIlg== 0000950152-99-006540.txt : 19990811 0000950152-99-006540.hdr.sgml : 19990811 ACCESSION NUMBER: 0000950152-99-006540 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19990809 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19990810 FILER: COMPANY DATA: COMPANY CONFORMED NAME: RPM INC/OH/ CENTRAL INDEX KEY: 0000110621 STANDARD INDUSTRIAL CLASSIFICATION: PAINTS, VARNISHES, LACQUERS, ENAMELS & ALLIED PRODUCTS [2851] IRS NUMBER: 346550857 STATE OF INCORPORATION: OH FISCAL YEAR END: 0531 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-14187 FILM NUMBER: 99682051 BUSINESS ADDRESS: STREET 1: 2628 PEARL RD STREET 2: P O BOX 777 CITY: MEDINA STATE: OH ZIP: 44258 BUSINESS PHONE: 3302735090 MAIL ADDRESS: STREET 1: 2628 PEARL RD STREET 2: P O BOX 777 CITY: MEDINA STATE: OH ZIP: 44258 FORMER COMPANY: FORMER CONFORMED NAME: REPUBLIC POWDERED METALS INC DATE OF NAME CHANGE: 19711027 8-K 1 RPM, INC. 8-K 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ----------------- FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): August 9, 1999 ---------------- RPM, INC. ------------------------------------------------------ (Exact name of registrant as specified in its charter) Ohio 1-14187 34-6550857 - --------------- ------------- ------------------- (State or other (Commission (I.R.S. Employer jurisdiction of File Number) Identification No.) incorporation) 2628 Pearl Road, P.O. Box 777, Medina, Ohio 44258 - ------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (330) 273-5090 ------------------------- 2 ITEM 5. OTHER EVENTS. ------------ On August 9, 1999, RPM, Inc. (the "Company") issued three (3) news releases, copies of which are filed herewith as Exhibits 99.1, 99.2 and 99.3. ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS. ------------------------------------------------------------------ (a) Not applicable (b) Not applicable (c) Exhibits. Number Description ------ ----------- 99.1 Press release, dated August 9, 1999 99.2 Press release, dated August 9, 1999 99.3 Press release, dated August 9, 1999 3 SIGNATURE --------- Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. RPM, INC. Date: August 10, 1999 By: /s/ P. Kelly Tompkins _____________________________ P. Kelly Tompkins Vice President, General Counsel and Secretary 4 EXHIBIT INDEX ------------- Number Description - ------ ----------- 99.1 Press release, dated August 9, 1999 99.2 Press release, dated August 9, 1999 99.3 Press release, dated August 9, 1999 EX-99.1 2 EXHIBIT 99.1 1 Exhibit 99.1 RPM, INC. ANNOUNCES 52ND RECORD YEAR ------------------------------------ NEW YORK - August 9, 1999 - RPM, Inc. (NYSE: RPM) announced today that it achieved its 52nd consecutive year of record sales and record earnings for the fiscal year ended May 31, 1999. For the year, the leading specialty coatings manufacturer said net sales increased 6 percent, to $1.7 billion from $1.6 billion in the 1998 fiscal year. Net income grew 8 percent, to $94.5 million from $87.8 million a year ago, while diluted earnings per share were up 2 percent, to $0.86 from $0.84 in fiscal 1998. In the fourth quarter, net sales were $475.3 million, up 5 percent from the $452 million reported a year ago. Net income grew 9 percent, to $35.4 million from $32.6 million in the fiscal 1998 fourth quarter. Diluted earnings per share were $0.32, compared to $0.30 a year ago. Earnings per share comparisons for both the quarter and year were affected by the redemption of $160 million in convertible notes on August 10, 1998. These securities were redeemed for 10 million new shares of RPM stock, which strengthened the company's debt to total capitalization ratio to 44 percent from 56 percent. The redemption will no longer have any impact on year-to-year earnings per share comparisons after the first quarter of fiscal 2000. Speaking to a group of security analysts in New York, Thomas C. Sullivan, chairman and chief executive officer of the Medina, Ohio-based company, said, "The fiscal 1999 operating environment was challenging. Our Industrial Division faced continued depressed overseas markets, particularly in the financially troubled Asian and South American economies; a softening North American market and a strong dollar against most foreign currencies. Higher service and distribution expense overall and continued weakness in the automotive aftermarket had an impact on RPM's Consumer Division." "Given these conditions, we are pleased to have achieved our 52nd consecutive record year, although we are not satisfied with single digit earnings growth rates," Mr. Sullivan said. He said that on August 3, "RPM completed the acquisition of DAP, a $250 million business and one of the premiere brand names in the North American consumer do-it-yourself market." Products marketed to consumers under the DAP brand include sealants, caulks, patch and repair compounds, wood preservatives, water repellents and adhesives. The $290 million purchase was financed through RPM's revolving line of credit. RPM, Inc. is a world leader in specialty coatings, serving both the industrial and consumer markets. Its industrial products include roofing systems, sealants, corrosion control coatings, floor coatings and specialty chemicals. RPM's consumer do-it-yourself products are used for home maintenance and automotive and boat repair. RPM stock is traded on the New York Stock Exchange under the symbol RPM. # # # 2 CONSOLIDATED CONDENSED STATEMENTS OF INCOME In thousands, except per share data
Year Ended May 31, Three Months Ended May 31, ------------------------------------------ -------------------------------------------- 1999 1998 1999 1998 ------------------ -------------------- --------------------- -------------------- NET SALES $1,712,154 $1,615,274 $475,290 $452,008 Cost of Sales 927,110 891,862 247,157 242,434 ------------------ -------------------- --------------------- -------------------- Gross Profit $785,044 $723,412 $228,133 $209,574 Selling, General & Administrative Expenses 592,666 537,156 162,538 148,668 Interest Expense, Net 32,781 36,700 5,948 7,275 ------------------ -------------------- --------------------- -------------------- Income Before Income Taxes 159,597 149,556 59,647 53,631 Provision for Income Taxes 65,051 61,719 24,167 20,951 ------------------ -------------------- --------------------- -------------------- NET INCOME $94,546 $87,837 $35,480 $32,680 ================== ==================== ===================== ==================== Basic Earnings per Share $0.87 $0.89 $0.32 $0.33 ================== ==================== ===================== ==================== Diluted Earnings per Share * $0.86 $0.84 $0.32 $0.30 ================== ==================== ===================== ==================== Average Shares Outstanding - Basic 108,731 98,527 109,819 99,590 ================== ==================== ===================== ==================== Average Shares Outstanding - Diluted 111,376 111,663 110,180 112,844 ================== ==================== ===================== ====================
CONSOLIDATED CONDENSED BALANCE SHEET In thousands, except per share data
May 31, ------------------------------------------ 1999 1998 ------------------ -------------------- ASSETS Current Assets $705,419 $675,112 Property, Plant & Equipment 339,697 305,897 Other Assets 692,120 704,908 ------------------ -------------------- TOTAL ASSETS $1,737,236 $1,685,917 ================== ==================== LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities $302,549 $287,828 Long-Term Debt 582,109 716,989 Other Liabilities 109,702 114,763 ------------------ -------------------- TOTAL LIABILITIES $994,360 $1,119,580 Shareholders' Equity 742,876 566,337 ------------------ -------------------- TOTAL LIABILITIES & SHAREHOLDERS' EQUITY $1,737,236 $1,685,917 ================== ==================== Current Ratio 2.3:1 2.4:1 Shareholders' Equity per Share $6.83 $5.75 Working Capital $402,870 $387,284
* Includes interest expense add-back, net of tax, on convertible debt securities -- $1,005 and $5,638 for the twelve months, and $0 and $1,526 for the fourth quarters in 1999 and 1998, respectively. EX-99.2 3 EXHIBIT 99.2 1 Exhibit 99.2 RPM, INC. RESTRUCTURES AND CONSOLIDATES OPERATIONS -------------------------------------------------- NEW YORK - AUGUST 9, 1999 - RPM, Inc. (NYSE: RPM) announced today that it is implementing a restructuring and consolidation program that will generate annualized pre-tax savings of $23 million, and will result in a $45 million pre-tax charge to earnings for the fiscal 2000 first quarter ending August 31, 1999. The net cash impact of the charge will be approximately $4 million. On a per-share basis, the after-tax charge to 2000 earnings will be approximately $.24 and the annualized after-tax savings are expected to be $.13. Thomas C. Sullivan, chairman and chief executive officer of the leading specialty coatings company, said that the expected savings for fiscal year 2000 will be approximately $.03 per share, and $.10 for the following fiscal year. He said that major features of the restructuring program include: - - Closing 23 facilities to eliminate redundancies in manufacturing, administration, and distribution. - - Eliminating 730 positions, representing about 10 percent of the company's May 31, 1999 headcount. - - Consolidating consumer product line distribution and warehousing. "We are not prepared to comment further on facilities affected by the restructuring, pending notification of employees in these locations. We hope to achieve part of the workforce reduction through normal attrition," Mr. Sullivan said. RECORD STREAK LIKELY TO END "Given the size of the pre-tax charge in the first quarter of fiscal 2000, it is likely that RPM's record of continuous annual sales and earnings increases, the longest among publicly traded American companies, will come to an end in the current fiscal year. However, we believe the strategic steps we are taking will set the stage for stronger earnings growth ahead and will do more to build long-term shareholder value than continuing the string of records," Mr. Sullivan said. "In addition to the restructuring program, RPM will be selling off non-core product lines with sales of approximately $100 million. No net loss is anticipated as a result of these transactions," he said. "Without implementing these major changes, and the charges associated with them, it is probable that Jim Karman and I could have retired at the end of fiscal 2002 with 55 years of record sales and record earnings intact. But we did not believe this to be in the best interests of our shareholders, employees and successor management," he said. STRATEGIC CONSOLIDATIONS TO FOSTER SYNERGIES; IMPROVE EFFICIENCIES To foster synergies among its operating companies with similar technologies, manufacturing needs, channels of distribution and customer bases, and to generate manufacturing and distribution efficiencies, RPM said it is accelerating its consolidation program that began with the formation of the Tremco Group after RPM acquired the Tremco roofing and sealants business from The BFGoodrich Company in fiscal 1997. 2 RPM, Inc. Restructures and Consolidates Operations August 9, 1999 Page 2 "With the consolidations, we will still recognize the benefits of entrepreneurship in sales and marketing, one of the hallmarks of RPM's past success," said Mr. Sullivan. RPM's $1 billion Industrial Division will now be comprised of three groups: - - The Tremco Group, which now also includes the Euclid Chemical Company concrete and masonry repair business, and will have annual sales of approximately $400 million. It is a world leader in chemical construction products. - - The StonCor Group, which combines RPM's Stonhard, Carboline, Plasite Protective Coatings and Fibergrate Composite Structures business units into a $400 million worldwide leader in corrosion control coatings and industrial polymer flooring. - - RPM II, which will consist initially of RPM's Dryvit Systems, Kop-Coat Industrial, TCI, Inc., Day-Glo Color Corp., American Emulsions Co., Alox Corporation, Chemspec and RPM Belgium operations, and which will be the entity that will continue to lead the portion of RPM's acquisition program that attracts smaller entrepreneurial industrial coatings companies to the company. In the Consumer Division, with sales also totaling $1 billion, consolidations will include: - - DAP/Bondex, which combines RPM's recently acquired DAP unit, the North American market leading producer of consumer caulks, sealants, glazing and putty compounds and other patch and repair products, with RPM's existing Bondex business, which produces a similar and complementary product line. - - Wood Finishes Group, which unifies RPM's expertise in wood care. It includes Mohawk and Star touch-up and repair products for furniture manufacturers, retailers and refinishers; Chemical Coatings and Westfield Coatings products for furniture manufacturers; and Flecto wood finishes for the consumer market. - - Bondo/Pettit, Woolsey/Z-Spar, which combines RPM's businesses that address the automotive and pleasure marine aftermarket. - - Canadian Consumer Operations, which combine Tremclad rust-preventative paints and sealants, along with Rust-Oleum coatings and Flecto wood finishes and which result in RPM being the leading marketer of consumer rust-preventative coatings, wood finishes and sealants in Canada. RPM's Rust-Oleum, Zinsser, and Testor operations are unaffected by the consolidation program. In a separate announcement, RPM said it is reorganizing its management team to implement the restructuring and consolidation program. RPM, Inc. is a world leader in specialty coatings, serving both the industrial and consumer markets. Its industrial products include roofing systems, sealants, corrosion control coatings, floor coatings and specialty chemicals. RPM's consumer do-it-yourself products are used for home maintenance and automotive and boat repair. RPM stock is traded on the New York Stock Exchange under the symbol RPM. #### =============================================================================== This press release contains "forward-looking statements" based on current expectations which are covered under the "safe harbor" provision within the Private Securities Litigation Reform Act of 1995. Actual results and events related to the restructuring and consolidation program may differ from those anticipated as a result of risks and uncertainties which include, but are not limited to, the ability of the Company to realize the projected pre-tax savings associated with the program, the Company's success in selling off non-core product lines, the realization of synergies from its consolidation program and the overall economic, market and industry conditions, as well as the risks described from time to time in RPM's reports as filed with the Securities and Exchange Commission. EX-99.3 4 EXHIBIT 99.3 1 Exhibit 99.3 RPM, INC. ANNOUNCES MANAGEMENT REORGANIZATION NEW YORK - August 9, 1999 - RPM, Inc. (NYSE: RPM) today announced that it has reorganized its management team to more effectively implement a comprehensive corporate restructuring and consolidation of operations, as reported in a separate announcement today. Speaking to a meeting of security analysts in New York, Thomas C. Sullivan, chairman and chief executive officer of the leading specialty coatings company, said that the reorganization "will create the environment for an orderly transition of management upon the scheduled retirement of James A. Karman, RPM president, and myself at the end of the 2002 fiscal year." He said the company's Board of Directors made the following changes in the company's corporate management team, effective today: - - The formation of an Office of the Chairman, which will formulate and direct overall corporate policy and administration. It will consist of Mr. Sullivan, who remains chairman and chief executive officer, and who will be responsible for long-term policies and strategies, corporate development and corporate relations, and Mr. Karman, who, as vice chairman, will be responsible for corporate annual performance, current strategy, and all administrative functions, including finance, legal, risk management and environmental affairs. - - Succeeding Mr. Karman as president will be Frank C. Sullivan, currently executive vice president and chief financial officer. He will have day-to-day oversight responsibility for all RPM operating companies. Reporting to him will be: - Kenneth M. Evans, currently executive vice president of the Consumer Division, who becomes President of the division. It includes RPM's market-leading brands such as Rust-Oleum, DAP, Bondex, Zinsser, Bondo, Testors and Flecto; - Jeffrey L. Korach, who continues as president of the Tremco Group, which includes RPM's Tremco and Euclid Chemical Company business units; - Jeffrey M. Stork, who continues as president of the StonCor Group, which includes RPM's Stonhard, Carboline, Plasite Protective Coatings and Fibergrate Composite Structures operations; - Charles G. Pauli, who becomes president of RPM II, which includes the company's Dryvit Systems, TCI, Inc., Day-Glo Color Corp., American Emulsions Co., Alox Corporation, Chemspec, RPM/Belgium and Kop-Coat Industrial operations. Mr. Pauli was previously president of Kop-Coat Group. Its operations will be re-assigned within other RPM groups, including RPM II, which will contain Kop-Coat's Industrial and Day-Glo businesses; and - Paul Hoogenboom, general manager of RPM's recently formed E-Commerce Division. - - John H. Morris, currently executive vice president of RPM's Industrial Division and a corporate director since 1981, will take early retirement on November 30, 1999 in order to participate in a private investment business focusing on venture capital and turnaround opportunities. - - David P. Reif, currently vice president - corporate finance, succeeds Mr. Frank Sullivan as Chief Financial Officer. - - Gordon M. Hyde was elected Vice President - Operations, a new position. He previously served in a similar capacity with the Consumer Division. 2 RPM, Inc. RPM, Inc. Announces Management Reorganization Page 2 - - Stephen J. Knoop was elected Vice- President - Corporate Development. He was previously Director of Corporate Development. - - Ronald A. Rice was elected Vice President - Risk Management and Benefits. He was previously Director of Risk Management and Benefits. - - Keith R. Smiley, currently treasurer, was elected Vice President - Treasurer. RPM, Inc. is a world leader in specialty coatings, serving both the industrial and consumer markets. Its industrial products include roofing systems, sealants, corrosion control coatings, floor coatings and specialty chemicals. RPM's consumer do-it-yourself products are used for home maintenance and automotive and boat repair. RPM stock is traded on the New York Stock Exchange under the symbol RPM. ### -----END PRIVACY-ENHANCED MESSAGE-----