UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended February 29, 2024,

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to .

Commission File No. 1-14187

RPM International Inc.

(Exact name of Registrant as specified in its charter)

Delaware	02-0642224
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)
2628 PEARL ROAD; MEDINA, Ohio (Address of principal executive offices)	44256 (Zip Code)

(330) 273-5090

(Registrant’s telephone number including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01	RPM	New York Stock Exchange

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐.

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒.

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13, or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ☐ No ☒.

As of March 27, 2024, the registrant had 128,762,983 shares of common stock, $0.01 par value per share, outstanding.

RPM INTERNATIONAL INC. AND SUBSIDIARIES*

INDEX

		Page No.
PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements:	3
	Consolidated Balance Sheets	3
	Consolidated Statements of Income	4
	Consolidated Statements of Comprehensive Income	5
	Consolidated Statements of Cash Flows	6
	Consolidated Statements of Stockholders’ Equity	7
	Notes to Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	37
Item 4.	Controls and Procedures	37
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	38
Item 1A.	Risk Factors	38
Item 2.	Unregistered Sale of Equity Securities and Use of Proceeds	38
Item 6.	Exhibits	39
Signatures		40

* As used herein, the terms “RPM” and the “Company” refer to RPM International Inc. and its subsidiaries, unless the context indicates otherwise.

2

PART I. – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

RPM INTERNATIONAL INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands, except per share amounts)

	February 29, 2024			May 31, 2023
Assets
Current Assets
Cash and cash equivalents	$	248,905		$	215,787
Trade accounts receivable (less allowances of $58,377 and $49,482, respectively)		1,072,032			1,503,040
Inventories		1,080,698			1,135,496
Prepaid expenses and other current assets		344,948			329,845
Total current assets		2,746,583			3,184,168
Property, Plant and Equipment, at Cost		2,459,045			2,332,916
Allowance for depreciation		(1,172,164	)		(1,093,440	)
Property, plant and equipment, net		1,286,881			1,239,476
Other Assets
Goodwill		1,309,744			1,293,588
Other intangible assets, net of amortization		523,677			554,991
Operating lease right-of-use assets		326,998			329,582
Deferred income taxes		17,517			15,470
Other		171,004			164,729
Total other assets		2,348,940			2,358,360
Total Assets	$	6,382,404		$	6,782,004
Liabilities and Stockholders' Equity
Current Liabilities
Accounts payable	$	577,861		$	680,938
Current portion of long-term debt		6,225			178,588
Accrued compensation and benefits		237,951			257,328
Accrued losses		30,897			26,470
Other accrued liabilities		349,015			347,477
Total current liabilities		1,201,949			1,490,801
Long-Term Liabilities
Long-term debt, less current maturities		2,187,140			2,505,221
Operating lease liabilities		278,009			285,524
Other long-term liabilities		268,940			267,111
Deferred income taxes		98,153			90,347
Total long-term liabilities		2,832,242			3,148,203
Contingencies and Accrued Losses (Note 16)
Stockholders' Equity
Preferred stock, par value $0.01; authorized 50,000 shares; none issued		—			—
Common stock, par value $0.01; authorized 300,000 shares;    issued 145,729 and outstanding 128,763 as of February 29, 2024;    issued 145,124 and outstanding 128,766 as of May 31, 2023		1,288			1,288
Paid-in capital		1,144,282			1,124,825
Treasury stock, at cost		(844,345	)		(784,463	)
Accumulated other comprehensive (loss)		(593,729	)		(604,935	)
Retained earnings		2,639,310			2,404,125
Total RPM International Inc. stockholders' equity		2,346,806			2,140,840
Noncontrolling Interest		1,407			2,160
Total equity		2,348,213			2,143,000
Total Liabilities and Stockholders' Equity	$	6,382,404		$	6,782,004

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

3

RPM INTERNATIONAL INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(In thousands, except per share amounts)

	Three Months Ended						Nine Months Ended
	February 29,			February 28,			February 29,			February 28,
	2024			2023			2024			2023
Net Sales	$	1,522,982		$	1,516,176		$	5,327,114		$	5,240,204
Cost of Sales		915,818			978,142			3,143,105			3,267,308
Gross Profit		607,164			538,034			2,184,009			1,972,896
Selling, General and Administrative Expenses		504,760			450,019			1,559,081			1,425,969
Restructuring Expense		6,359			4,154			14,096			6,780
Goodwill Impairment		-			36,745			-			36,745
Interest Expense		28,527			30,756			90,693			85,385
Investment (Income), Net		(18,665	)		(2,723	)		(36,393	)		(5,910	)
(Gain) on Sales of Assets and Business, Net		-			(25,743	)		-			(25,881	)
Other Expense, Net		2,602			2,339			7,973			7,065
Income Before Income Taxes		83,581			42,487			548,559			442,743
Provision for Income Taxes		22,103			15,248			139,953			114,683
Net Income		61,478			27,239			408,606			328,060
Less: Net Income Attributable to Noncontrolling Interests		279			265			820			729
Net Income Attributable to RPM International Inc. Stockholders	$	61,199		$	26,974		$	407,786		$	327,331
Average Number of Shares of Common Stock Outstanding:
Basic		127,781			127,495			127,803			127,564
Diluted		128,334			128,035			128,315			128,789
Earnings per Share of Common Stock Attributable to RPM International Inc. Stockholders:
Basic	$	0.48		$	0.21		$	3.18		$	2.55
Diluted	$	0.47		$	0.21		$	3.16		$	2.54

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

4

RPM INTERNATIONAL INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

(In thousands)

	Three Months Ended						Nine Months Ended
	February 29,			February 28,			February 29,		February 28,
	2024			2023			2024		2023
Net Income	$	61,478		$	27,239		$	408,606	$	328,060
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments, net of tax		(7,591	)		(6,935	)		1,218		(76,719	)
Pension and other postretirement benefit liability adjustments, net of tax		3,356			3,606			9,966		11,427
Unrealized gain (loss) on securities, net of tax		197			107			34		(467	)
Unrealized (loss) on derivatives, net of tax		-			(555	)		-		(1,765	)
Total other comprehensive (loss) income		(4,038	)		(3,777	)		11,218		(67,524	)
Total Comprehensive Income		57,440			23,462			419,824		260,536
Less: Comprehensive Income Attributable to Noncontrolling Interests		280			263			832		689
Comprehensive Income Attributable to RPM International Inc. Stockholders	$	57,160		$	23,199		$	418,992	$	259,847

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

5

RPM INTERNATIONAL INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)

	Nine Months Ended
	February 29,			February 28,
	2024			2023
Cash Flows from Operating Activities:
Net income	$	408,606		$	328,060
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		126,656			115,186
Goodwill impairment		-			36,745
Deferred income taxes		2,190			8,506
Stock-based compensation expense		19,457			23,636
Net (gain) loss on marketable securities		(16,496	)		3,241
Net loss (gain) on sales of assets and businesses		2,576			(25,881	)
Other		1,244			684
Changes in assets and liabilities, net of effect from purchases and sales of businesses:
Decrease in receivables		430,512			202,742
Decrease (increase) in inventory		55,118			(142,069	)
Decrease in prepaid expenses and other current and long-term assets		30,349			4,807
(Decrease) in accounts payable		(83,960	)		(195,093	)
(Decrease) in accrued compensation and benefits		(20,049	)		(54,747	)
Increase (decrease) in accrued losses		4,366			(2,119	)
(Decrease) in other accrued liabilities		(19,424	)		(40,690	)
Cash Provided by Operating Activities		941,145			263,008
Cash Flows from Investing Activities:
Capital expenditures		(138,093	)		(179,725	)
Acquisition of businesses, net of cash acquired		(15,549	)		(47,542	)
Purchase of marketable securities		(30,591	)		(13,173	)
Proceeds from sales of marketable securities		22,130			9,596
Proceeds from sales of assets and businesses, net		5,749			53,318
Other		2,485			2,127
Cash (Used for) Investing Activities		(153,869	)		(175,399	)
Cash Flows from Financing Activities:
Additions to long-term and short-term debt		-			489,881
Reductions of long-term and short-term debt		(516,086	)		(354,135	)
Cash dividends		(172,601	)		(159,841	)
Repurchases of common stock		(37,488	)		(37,500	)
Shares of common stock returned for taxes		(21,949	)		(15,252	)
Payments of acquisition-related contingent consideration		(1,082	)		(3,765	)
Other		(1,586	)		(2,689	)
Cash (Used for) Financing Activities		(750,792	)		(83,301	)
Effect of Exchange Rate Changes on Cash and Cash Equivalents		(3,366	)		(12,110	)
Net Change in Cash and Cash Equivalents		33,118			(7,802	)
Cash and Cash Equivalents at Beginning of Period		215,787			201,672
Cash and Cash Equivalents at End of Period	$	248,905		$	193,870
Supplemental Disclosures of Cash Flows Information:
Cash paid during the period for:
Interest	$	90,770		$	83,248
Income Taxes, net of refunds	$	172,008		$	133,753
Supplemental Disclosures of Noncash Investing Activities:
Capital expenditures accrued within accounts payable at quarter-end	$	12,621		$	12,147

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

6

RPM INTERNATIONAL INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)

(In thousands)

	Common Stock											Accumulated
	Number											Other						Total RPM
	of			Par/Stated			Paid-In		Treasury			Comprehensive			Retained			International			Noncontrolling			Total
	Shares			Value			Capital		Stock			(Loss) Income			Earnings			Inc. Equity			Interests			Equity
Balance at June 1, 2023		128,766		$	1,288		$	1,124,825	$	(784,463	)	$	(604,935	)	$	2,404,125		$	2,140,840		$	2,160		$	2,143,000
Net income		-			-			-		-			-			201,082			201,082			231			201,313
Other comprehensive income		-			-			-		-			11,746			-			11,746			14			11,760
Dividends declared and paid ($0.42 per share)		-			-			-		-			-			(54,065	)		(54,065	)		-			(54,065	)
Other noncontrolling interest activity		-			-			-		-			-			-			-			(712	)		(712	)
Share repurchases under repurchase program		(122	)		(1	)		1		(12,500	)		-			-			(12,500	)		-			(12,500	)
Stock compensation expense and other deferred compensation, shares granted less shares returned for taxes		318			3			9,115		(15,078	)		-			-			(5,960	)		-			(5,960	)
Balance at August 31, 2023		128,962		$	1,290		$	1,133,941	$	(812,041	)	$	(593,189	)	$	2,551,142		$	2,281,143		$	1,693		$	2,282,836
Net income		-			-			-		-			-			145,505			145,505			310			145,815
Other comprehensive income (loss)		-			-			-		-			3,499			-			3,499			(3	)		3,496
Dividends declared and paid ($0.46 per share)		-			-			-		-			-			(59,260	)		(59,260	)		-			(59,260	)
Share repurchases under repurchase program		(132	)		(1	)		1		(12,500	)		-			-			(12,500	)		-			(12,500	)
Stock compensation expense and other deferred compensation, shares granted less shares returned for taxes		42			-			8,028		(5,861	)		-			-			2,167			-			2,167
Balance at November 30, 2023		128,872		$	1,289		$	1,141,970	$	(830,402	)	$	(589,690	)	$	2,637,387		$	2,360,554		$	2,000		$	2,362,554
Net income		-			-			-		-			-			61,199			61,199			279			61,478
Other comprehensive income (loss)		-			-			-		-			(4,039	)		-			(4,039	)		1			(4,038	)
Dividends paid ($0.46 per share)		-			-			-		-			-			(59,276	)		(59,276	)		-			(59,276	)
Other noncontrolling interest activity		-			-			-		-			-			-			-			(873	)		(873	)
Share repurchases under repurchase program		(115	)		(1	)		1		(12,488	)		-			-			(12,488	)		-			(12,488	)
Stock compensation expense and other deferred compensation, shares granted less shares returned for taxes		6			-			2,311		(1,455	)		-			-			856			-			856
Balance at February 29, 2024		128,763		$	1,288		$	1,144,282	$	(844,345	)	$	(593,729	)	$	2,639,310		$	2,346,806		$	1,407		$	2,348,213

7

Common Stock				Accumulated
Number				Other		Total RPM
of	Par/Stated	Paid-In	Treasury	Comprehensive	Retained	International	Noncontrolling	Total
Shares	Value	Capital	Stock	(Loss) Income	Earnings