RPM INTERNATIONAL INC/DE/ - seekingalpha.com · CURRENT REPORT Pursuant to Section 13 or 15(d) of...

RPM INTERNATIONAL INC/DE/

FORM 8-K(Current report filing)

Filed 07/27/15 for the Period Ending 07/27/15

Address 2628 PEARL RDP O BOX 777MEDINA, OH, 44258

Telephone 3302735090CIK 0000110621

Symbol RPMSIC Code 2851 - Paints, Varnishes, Lacquers, Enamels and Allied Prods

Industry Commodity ChemicalsSector Basic Materials

Fiscal Year 05/31

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UNITED STATES 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) July 27, 2015

RPM INTERNATIONAL INC. (Exact name of registrant as specified in its charter)

Registrant’s telephone number, including area code: (330) 273-5090

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

Delaware 1-14187 02-0642224 (State or other jurisdiction

of incorporation) (Commission File Number)

(IRS Employer Identification No.)

2628 Pearl Road, P.O. Box 777, Medina, Ohio 44258 (Address of principal executive offices) (Zip Code)

� Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

� Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

� Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

� Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

On July 27, 2015, the Company issued a press release announcing its year end results for fiscal 2015, which provided detail not included in previously issued reports. A copy of the press release is furnished with this Current Report on Form 8-K as Exhibit 99.1.

On July 27, 2015, the Company posted a slide presentation on its investor relations website. Company officers are using this slide presentation in connection with meetings with analysts and investors beginning on July 27, 2015. Pursuant to Regulation FD, a copy of the slide presentation is furnished with this Current Report on Form 8-K as Exhibit 99.2. All information in the slide presentation is furnished and shall not be deemed “filed” with the Securities and Exchange Commission for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that Section, and shall not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent the Company specifically incorporated it by reference.

Item 2.02 Results of Operations and Financial Condition.

Item 7.01 Regulation FD Disclosure.

Item 9.01 Exhibits.

Exhibit Number Description

99.1 Press Release of the Company, dated July 27, 2015, announcing the Company’s year end results.

99.2 Slide Presentation

SIGNATURES

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 International Inc. (Registrant)

Date July 27, 2015

/s/ Edward W. Moore Edward W. Moore Senior Vice President, General Counsel and Chief Compliance Officer

Exhibit Index Exhibit Number Description

99.1 Press Release of the Company, dated July 27, 2015, announcing the Company’s year end results.

99.2 Slide Presentation

Exhibit 99.1

RPM REPORTS RECORD FOURTH-QUARTER RESULTS FOR FISCAL 2015

Medina, Ohio – July 27, 2015 – RPM International Inc. (NYSE: RPM) today reported record sales, net income and diluted earnings per share for its fiscal fourth quarter ended May 31, 2015.

Fourth-Quarter Results

Fourth-quarter net sales increased 7.5% to $1.37 billion from $1.28 billion. Consolidated earnings before interest and taxes (EBIT) improved 18.7% to $204.3 million, from $172.1 million a year ago. Net income for the fourth quarter was up 17.7% to $128.0 million from $108.8 million reported in the fourth quarter of fiscal 2014. Diluted earnings per share were $0.94, up 17.5% from $0.80 reported a year ago.

“We are pleased with RPM’s fourth-quarter performance, especially in view of the headwinds posed by the very strong U.S. dollar and sluggish conditions in many international regions, including much of Europe and Latin America. Despite these challenges, our operating companies continue to compete and win in their respective markets, helping to drive our growth. Furthermore, the fiscal 2015 will be most remembered as the year we closed the chapter on our Bondex asbestos liability issue and reconsolidated the Specialty Products Holding Corp. (SPHC) subsidiaries generating more than $400 million in annualized sales back into the fold at RPM,” stated Frank C. Sullivan, RPM chairman and chief executive officer.

Fourth-Quarter Segment Sales and Earnings

Fiscal 2015 fourth-quarter industrial segment sales increased 14.2% to $878.5 million from $769.2 million reported a year ago. Organic sales improved 6.4%, while acquisition growth added 16.3%, including the impact of SPHC subsidiaries that were reconsolidated with RPM’s results effective on January 1, 2015. Foreign currency translation negatively impacted sales by 8.5%. Industrial segment EBIT was up 21.6% to $120.7 million from $99.2 million in the prior year.

“Industrial results were mixed in the fourth quarter, as they have been throughout the 2015 fiscal year. Our U.S. industrial businesses performed well, benefiting in part from continued momentum in commercial construction and the additional sales attributable to the reconsolidation of SPHC. This performance was dampened by the surge in the U.S. dollar against most other currencies around the world, especially the Euro. Overall, our industrial businesses in Europe showed tremendous resiliency with relatively flat sales in local currencies,” stated Sullivan.

• Fourth-quarter sales increase 8% over prior year

• Net income for the quarter up 18% over prior-year results

• Fiscal 2015 full-year sales increase 5% over prior year

• Fiscal 2015 full-year net income as-reported down 18% from prior-year

• Fiscal year net income as-adjusted up 11% over prior year

RPM Reports Record Fourth-Quarter and Results for Fiscal 2015 July 27, 2015 Page 2 Net sales for RPM’s consumer segment declined 2.5% to $494.7 million from $507.6 million in the fiscal 2014 fourth quarter. Organic sales were down 1.3%, while acquisition growth added 1.3%. Foreign exchange translation was a negative 2.5%. Consumer segment EBIT increased 17.1% in the fiscal 2015 fourth quarter to $100.6 million from $86.0 million and included an earn-out reversal of $9.9 million from Synta, established at the time of its acquisition in fiscal 2013. Excluding the earn-out, EBIT increased 5.5%.

“Our consumer businesses faced some tough comparisons against a very strong fourth quarter in fiscal 2014, particularly our Synta deck coatings and Kirker nail enamel businesses. Additionally, the impact of a particularly rainy spring and start to the summer selling season dampened retail take-away across nearly all our consumer product lines,” stated Sullivan.

Cash Flow and Financial Position

For fiscal 2015, cash from operations was $330.4 million, up 18.8% from $278.1 million in fiscal 2014. Capital expenditures during the year were $85.4 million, while depreciation was $62.2 million. Total debt at the end of fiscal 2015 was $1.66 billion, compared to $1.35 billion at the end of fiscal 2014. RPM’s net (of cash) debt-to-total capitalization ratio was 53.4%, compared to 42.4% at May 31, 2014.

As previously reported, during the fourth quarter RPM sold $250 million aggregate principal amount of its 5.250% notes due June 1, 2045. Net proceeds of the offering were used to repay a portion of borrowings under the company’s revolving credit facility.

“RPM’s capital position remains strong, with 87.3% of total debt at fixed rates and a total average interest rate of 4.26%. While our net (of cash) debt-to-total capitalization ratio increased as a result of borrowing to fund the first installment of our settlement related to SPHC, it is still within our historic norms. Our strong cash generation allowed RPM to reduce long-term debt in the fourth quarter by more than $200 million. At May 31, 2015, RPM had $963.7 million in liquidity, including cash and long-term committed available credit, enabling the continuation of our acquisition program, internal growth efforts and a growing cash dividend,” Sullivan stated.

Fiscal 2015 Consolidated Sales and Earnings

Fiscal 2015 consolidated net sales increased 5.0% to $4.59 billion from $4.38 billion in fiscal 2014. Consolidated EBIT was up 6.7% to $522.3 million from $489.7 million in fiscal 2014. Reported net income declined 17.9% to $239.5 million from $291.7 million in fiscal 2014. Diluted earnings per share of $1.78 were down 18.3% from $2.18 a year ago.

The fiscal 2015 adjustment was $83.5 million in the third quarter for a non-cash, net charge for a tax accrual related to possible repatriation of overseas earnings to fund remaining obligations under the company’s SPHC settlement. On an adjusted basis, net income was up 10.7% to $323.0 million, and diluted earnings per share improved 9.2% to $2.38.

RPM Reports Record Fourth-Quarter and Results for Fiscal 2015 July 27, 2015 Page 3 Fiscal 2015 Segment Sales and Earnings

Fiscal 2015 sales for RPM’s industrial segment increased 8.0% to $2.99 billion from $2.77 billion in fiscal 2014. Organic sales increased 5.1%, with acquisition growth, mostly SPHC, contributing 7.6%. Foreign currency translation negatively impacted sales by 4.7%. Industrial segment EBIT improved 5.6% to $323.0 million from $306.0 million in fiscal 2014.

Consumer segment sales for fiscal 2015 decreased slightly to $1.60 billion from $1.61 billion in fiscal 2014. Organic sales increased by 0.1%, and acquisition growth added 1.3%. Currency translation negatively impacted sales by 1.6%. Consumer segment EBIT increased 9.1%, to $273.9 million from $251.1 million, including the benefits of the Synta earn-out reversal during the fourth quarter and the Kirker earn-out reversal in the second quarter.

Business Outlook

“For fiscal 2016, we expect consumer segment sales to increase by 4% to 5%, with our core consumer businesses continuing to gain market share with new product innovations. Unfortunately, poor weather from the spring has continued into the summer months, dampening first-quarter sales. On a more positive note, we expect a return to both top- and bottom-line growth in our Synta and Kirker units, both of which faced significant headwinds in fiscal 2015,” Sullivan stated.

“In the industrial segment, we anticipate sales growth of 8% to 10%. We expect continued positive momentum from our U.S.-based industrial businesses, especially those serving the commercial construction markets. In Europe, we see a return to growth in local currencies by many of our industrial businesses there, along with continued strong growth in Brazil in its local currency, with new products expected to drive incremental sales as well. We don’t foresee improvement in sales for our businesses serving the energy sector, as both exploration and production continue to decline as a result of lower energy prices. In addition, we expect a continued strong negative impact from foreign currency translation,” Sullivan stated.

“RPM’s guidance for earnings per diluted share in fiscal 2016 is approximately $2.55, a 7.1% improvement over the as-adjusted $2.38 per diluted share in fiscal 2015. The guidance includes the anticipated negative impact of $0.10 per share as a result of a higher effective tax rate and $0.07 per share from the estimated negative impact of foreign currency translation during fiscal 2016. For our consumer segment, the first quarter is getting off to a weak start due to the weather related slowdown. Our results for the industrial segment, with 50% of its sales outside of the U.S., will be somewhat weighted to the second half due to the expected negative impact of foreign exchange translation during the first half of fiscal 2016, offset in part by the expected continuing solid performance of the SPHC companies,” stated Sullivan.

Webcast and Conference Call Information

Management will host a conference call to discuss the results beginning at 10:00 a.m. EDT the same day. The call can be accessed by dialing 888-771-4371 or 847-585-4405 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

RPM Reports Record Fourth-Quarter and Results for Fiscal 2015 July 27, 2015 Page 4 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 12:30 p.m. EDT on July 27, 2015 until 11:59 p.m. EDT on August 3, 2015. The replay can be accessed by dialing 888-843-7419 or 630-652-3042 for international callers. The access code is 38349286. 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. owns subsidiaries that are world leaders in specialty coatings, sealants, building materials and related services for both industrial and consumer markets. RPM’s industrial products include roofing systems, sealants, corrosion control coatings, flooring coatings and specialty chemicals. Industrial companies include Stonhard, Tremco, illbruck, Carboline, Flowcrete, Day-Glo, Dryvit and Euclid Chemical. RPM’s consumer products are used by professionals and do-it-yourselfers for home maintenance and improvement and by hobbyists. Consumer brands include Rust-Oleum, DAP, Zinsser, 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, at 330-273-5090 or [email protected].

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; and (j) 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, 2014, 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

As Reported Adjusted (1) Three Months Ended Year Ended Year Ended May 31, May 31, May 31, 2015 2014 2015 2014 2015 (Unaudited) (Unaudited) Net Sales $ 1,373,159 $ 1,276,782 $ 4,594,550 $ 4,376,353 $ 4,594,550 Cost of sales 773,864 716,057 2,653,181 2,500,585 2,653,181

Gross profit 599,295 560,725 1,941,369 1,875,768 1,941,369 Selling, general & administrative expenses 395,359 389,416 1,422,944 1,390,128 1,422,944 Interest expense 27,303 19,677 87,615 80,951 87,615 Investment (income), net (2,023 ) (2,065 ) (18,577 ) (15,715 ) (18,577 ) Other (income), net (342 ) (805 ) (3,866 ) (4,083 ) (3,866 )

Income before income taxes 178,998 154,502 453,253 424,487 453,253 Provision for income taxes 50,413 40,732 224,925 118,503 118,699

Net income 128,585 113,770 228,328 305,984 334,554 Less: Net income (loss) attributable to noncontrolling interests 598 4,991 (11,156 ) 14,324 11,566

Net income attributable to RPM International Inc. Stockholders $ 127,987 $ 108,779 $ 239,484 $ 291,660 $ 322,988

Earnings per share of common stock attributable to RPM International Inc. Stockholders: Basic $ 0.97 $ 0.82 $ 1.81 $ 2.20 $ 2.43

Diluted $ 0.94 $ 0.80 $ 1.78 $ 2.18 $ 2.38

Average shares of common stock outstanding - basic 129,578 129,532 129,933 129,438 129,933

Average shares of common stock outstanding - diluted 134,540 134,423 134,893 132,288 134,893

(1) See attached page for reconciliation from As Reported to Adjusted figures.

SUPPLEMENTAL SEGMENT INFORMATION IN THOUSANDS

As Reported

Three Months Ended

May 31, Year Ended

May 31, 2015 2014 2015 2014 (Unaudited) Net Sales:

Industrial Segment $ 878,491 $ 769,181 $ 2,990,721 $ 2,769,657 Consumer Segment 494,668 507,601 1,603,829 1,606,696

Total $ 1,373,159 $ 1,276,782 $ 4,594,550 $ 4,376,353

Income Before Income Taxes (a): Industrial Segment

Income Before Income Taxes (a) $ 119,251 $ 96,492 $ 315,382 $ 295,751 Interest (Expense), Net (b) (1,441 ) (2,752 ) (7,656 ) (10,227 )

EBIT (c) $ 120,692 $ 99,244 $ 323,038 $ 305,978

Consumer Segment Income Before Income Taxes (a) $ 100,676 $ 85,998 $ 273,956 $ 251,229 Interest (Expense), Net (b) 40 32 34 122

EBIT (c) $ 100,636 $ 85,966 $ 273,922 $ 251,107

Corporate/Other (Expense) Before Income Taxes (a) $ (40,929 ) $ (27,988 ) $ (136,085 ) $ (122,493 ) Interest (Expense), Net (b) (23,879 ) (14,892 ) (61,416 ) (55,131 )

EBIT (c) $ (17,050 ) $ (13,096 ) $ (74,669 ) $ (67,362 )

Consolidated Income Before Income Taxes (a) $ 178,998 $ 154,502 $ 453,253 $ 424,487 Interest (Expense), Net (b) (25,280 ) (17,612 ) (69,038 ) (65,236 )

EBIT (c) $ 204,278 $ 172,114 $ 522,291 $ 489,723

(a) 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.

(b) Interest (expense), net includes the combination of interest (expense) and investment income/(expense), net. (c) 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)

Year Ended May 31, 2015 AS REPORTED Adjustments ADJUSTED Net Sales $ 4,594,550 $ — $ 4,594,550 Cost of sales 2,653,181 — 2,653,181

Gross profit 1,941,369 — 1,941,369 Selling, general & administrative expenses 1,422,944 — 1,422,944 Interest expense 87,615 — 87,615 Investment (income), net (18,577 ) — (18,577 ) Other expense (income), net (3,866 ) — (3,866 )

Income before income taxes 453,253 — 453,253 Provision for income taxes 224,925 (106,226 ) (1) 118,699

Net income 228,328 106,226 334,554 Less: Net income (loss) attributable to noncontrolling interests (11,156 ) 22,722 (1) 11,566

Net income attributable to RPM International Inc. Stockholders $ 239,484 $ 83,504 $ 322,988

Earnings per share attributable to RPM International Inc. Stockholders: Basic $ 1.81 $ 0.62 $ 2.43

Diluted $ 1.78 $ 0.60 $ 2.38

(1) Reflects adjustments related to the recognition of an ASC 740-30 tax liability for the potential repatriation of foreign earnings and related impact on NCI Net Income.

CONSOLIDATED BALANCE SHEETS

IN THOUSANDS May 31, 2015 May 31, 2014 Assets Current Assets

Cash and cash equivalents $ 174,711 $ 332,868 Trade accounts receivable 980,737 901,587 Allowance for doubtful accounts (24,526 ) (27,641 )

Net trade accounts receivable 956,211 873,946 Inventories 674,205 613,644 Deferred income taxes 29,892 22,281 Prepaid expenses and other current assets 264,827 219,556

Total current assets 2,099,846 2,062,295

Property, Plant and Equipment, at Cost 1,258,304 1,191,676 Allowance for depreciation and amortization (668,658 ) (658,871 )

Property, plant and equipment, net 589,646 532,805

Other Assets Goodwill 1,215,688 1,147,374 Other intangible assets, net of amortization 604,130 459,536 Deferred income taxes, non-current 5,685 7,943 Other 179,245 168,412

Total other assets 2,004,748 1,783,265

Total Assets $ 4,694,240 $ 4,378,365

Liabilities and Stockholders’ Equity Current Liabilities

Accounts payable $ 512,165 $ 525,680 Current portion of long-term debt 2,038 5,662 Accrued compensation and benefits 169,370 173,846 Accrued loss reserves 22,016 27,487 Other accrued liabilities 197,647 204,411

Total current liabilities 903,236 937,086

Long-Term Liabilities Long-term debt, less current maturities 1,654,037 1,345,965 Other long-term liabilities 752,821 466,659 Deferred income taxes 90,681 50,061

Total long-term liabilities 2,497,539 1,862,685

Total liabilities 3,400,775 2,799,771

Stockholders’ Equity Preferred stock; none issued Common stock (outstanding 133,203; 133,273) 1,332 1,333 Paid-in capital 872,127 790,102 Treasury stock, at cost (124,928 ) (85,400 ) Accumulated other comprehensive (loss) (394,135 ) (156,882 ) Retained earnings 936,996 833,691

Total RPM International Inc. stockholders’ equity 1,291,392 1,382,844 Noncontrolling interest 2,073 195,750

Total equity 1,293,465 1,578,594

Total Liabilities and Stockholders’ Equity $ 4,694,240 $ 4,378,365

CONSOLIDATED STATEMENTS OF CASH FLOWS IN THOUSANDS Year Ended May 31, May 31, 2015 2014 Cash Flows From Operating Activities:

Net income $ 228,328 $ 305,984 Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation 62,188 58,543 Amortization 36,988 31,526 Reversal of contingent consideration obligations (29,665 ) Deferred income taxes 97,502 6,572 Stock-based compensation expense 31,741 23,568 Other (1,114 ) (1,672 )

Changes in assets and liabilities, net of effect from purchases and sales of businesses: (Increase) in receivables (90,230 ) (79,080 ) (Increase) in inventory (31,348 ) (59,001 ) (Increase) in prepaid expenses and other current and long-term assets (4,590 ) (12,586 ) (Decrease) increase in accounts payable (16,249 ) 42,216 (Decrease) increase in accrued compensation and benefits (1,297 ) 19,193 (Decrease) in accrued loss reserves (7,218 ) (146 ) (Decrease) in contingent payment (63,014 ) Increase in other accrued liabilities 57,385 14,855 Other (1,973 ) (8,809 )

Cash Provided By Operating Activities 330,448 278,149

Cash Flows From Investing Activities: Capital expenditures (85,363 ) (93,792 ) Acquisition of businesses, net of cash acquired (467,573 ) (39,248 ) Purchase of marketable securities (61,511 ) (83,536 ) Proceeds from sales of marketable securities 40,279 62,896 Proceeds from sales of assets or businesses 4,079 2,794 Other 10,636 1,175

Cash (Used For) Investing Activities (559,453 ) (149,711 )

Cash Flows From Financing Activities: Additions to long-term and short-term debt 460,560 208,532 Reductions of long-term and short-term debt (162,318 ) (215,011 ) Cash dividends (136,179 ) (125,743 ) Repurchase of common stock (39,528 ) (12,906 ) Payments of acquisition related contingent consideration, less fair value adjustments (22,179 ) (5,000 ) Exercise of stock options and awards, including tax benefit 8,560 11,934 Other 1,277 951

Cash Provided By (Used For) Financing Activities 110,193 (137,243 )

Effect of Exchange Rate Changes on Cash and Cash Equivalents (39,345 ) (1,881 )

Net Change in Cash and Cash Equivalents (158,157 ) (10,686 ) Cash and Cash Equivalents at Beginning of Period 332,868 343,554

Cash and Cash Equivalents at End of Period $ 174,711 $ 332,868

7/27/2015 RPM INTERNATIONAL INC. 1 7/27/2015 RPM INTERNATIONAL INC. 1

“ Accelerating Growth Investments ”NYSE Analysts Luncheon

Frank C. Sullivan, Chairman & CEO

July 27, 2015

Exhibit 99.2

7/27/2015 RPM INTERNATIONAL INC. 2

Forward-Looking Statements & Regulation G

This presentation contains “Forward-Looking Statements” as defined in the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from expectations and are subject to certain risks and uncertainties such as those described in RPM’s periodic reports and statements filed with the Securities and Exchange Commission and available through the company’s website, www.rpminc.com. The company does not intend to update any forward-looking statements made in this presentation.

This presentation includes certain company data that do not directly conform to generally accepted accounting principles, or GAAP, and certain company data that has been restated for improved clarity, understanding and comparability, or pro forma. All non-GAAP data in this presentation are indicated by footnote. Tables reconciling such data with GAAP measures are available through our website, www.rpminc.com under Investor Information/Presentations.


Industrial Segment (2/3)

Consumer Segment (1/3)

SALES:

$4.6 billion

Entrepreneurial Operating Philosophy Competitive Advantage of Leading Brands

Balance Between Consumer and Industrial Businesses Growth Strategy Balanced Between Internal Investment and Acquisitions


At Operating Companies

Among Operating Companies

At Corporate

Customer-Centric/ Market-Focused

Connections Creating Value

Centralized

Sales Distribution Treasury

Marketing Manufacturing Capital Allocation

Product Development Technology Global Sourcing

Customer Service Product Development Insurance & Benefits

Technical Support Geographic Expansion M&A

Budgeting & Planning

Entrepreneurial Operating Philosophy


Unique Competitive Advantage

Industrial Industrial

Paint & Coatings

Paint & Coatings

Construction Chemicals

Construction Chemicals

Consumer Consumer

$170 billion global

market

Deliberate Strategic Balance

Consumer Industrial

Residential Construction

15%

Residential Repair &

Maintenance 85%

Commercial & Industrial

Repair & Maintenance

60%

Commercial Construction

40%

Repair & Maintenance 70%


Market-Leading Consumer Brands

• Value-added partner

• Innovative new products

• Category management • Higher price points and margins for retailers • Immediate full-chain distribution • 80% U.S. vs. 20% ROW

7/27/2015 7 RPM INTERNATIONAL INC.

Diverse Industrial Global Brands

• Fragmented global markets

• Less cyclical repair & maintenance

• Low customer concentration

• 50% U.S. vs. 50% ROW


Growth Strategy Acquisitions • International Expansion • Product Innovation


Acquisition Strategy “ The Best Home for Entrepreneurial Companies ”

Key requirements: Acquisition Focus: Key Takeaways:

• Niche market leaders • Strong GP margins • Retain entrepreneurial

management team

• Geographic expansion • New markets • New products

• 150+ acquisitions • Few divestitures • Less than 1% impairment

charge in history of RPM



International Expansion: 2005 vs. 2015

North America

2005 2015

$2,202 $3,195

86% 70% Asia/Pacific

2005 2015

$27 $121

1.0% 2.6%

Europe

2005 2015

$251 $942

10% 20%

South/Latin America

2005 2015

$42 $251

1.7% 5.5%

TOTAL 2005 2015

$2,556 mm $4,595

Africa/Middle East

2005 2015

$34 $86

1.3% 1.9%

Dollars in millions


Connections Creating Value: Model for Success in Developing World

• Acquire platform company • Great management team • Market leader • Potential for rapid expansion

• Established base of shared:

Manufacturing Distribution Technology

FY 15

FY 16

More to Come

FY 13

FY 15

FY 14

FY 15


Connections Creating Value: Leveraging Shared Technologies


New Product Innovations

AlphaGuard

RoofTec


Steve Knoop Chief Executive Officer

Specialty Products Holding Corp.


SPHC • +$400 million in sales

• 5 Platforms • 10 Businesses

• 1 Theme: Specialty Products


SPHC Growth Strategy

• Organic Growth

– Product innovation and technology investments pay dividends

– Attacking market niches in traditional product areas

• Acquisition Growth – Chapter 11 process provides pent up

demand for high quality acquisition opportunities

– Always seeking new platform businesses to join the confederation of specialty products companies


Consistent Financial Performance


Balanced Business = Steady Growth

Consolidated 2011 2012 2013 2014 2015

Sales +8.5% +11.7% +8.0% +7.2% +5.0%

Net Income +16.1% +14.2% +14.5% +20.9% +10.7%

Note: Specialty Products Holding Corp. (SPHC) was deconsolidated on May 31, 2010 and reconsolidated on Jan. 1, 2015. Net income and EBIT excludes one-time adjustments taken in FY2015 and FY2013.

Consumer 2011 2012 2013 2014 2015

Sales +3.4% +10.7% +16.1% +11.4% (0.2)%

EBIT (0.9%) +9.7% +31.2% +19.5% +9.1%

Industrial 2011 2012 2013 2014 2015

Sales +11.3% +12.2% +4.0% +5.0% +8.0%

EBIT +15.4% +19.8% (0.7%) +11.1% +5.6%


Consistent Financial Performance: 30-Year Growth Profile

10.6% 30-yr. CAGR

11.9% 30-yr. CAGR

Note: Specialty Products Holding Corp. (SPHC) was deconsolidated on May 31, 2010 and reconsolidated on Jan. 1, 2015 Note: Net income excludes one-time adjustments taken in FY2013 and 2015, and asbestos charges taken from FY2003-FY2008

$0 $500

$1,000 $1,500 $2,000 $2,500 $3,000 $3,500 $4,000 $4,500

85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15

Sales

$0 $50

$100 $150 $200 $250 $300 $350

85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15

Net Income

41 Consecutive Years of Dividend Increases

+ 8.3% 10/9/14

• Only 45 of all 19,000 U.S. publicly traded companies have an equal or better record

• The compounding benefit of reinvesting a growing cash dividend first envisioned by a $25 mm company in 1973 continues today in a $4.6 bb company paying out +$135 mm per year

$0.00

$0.10

$0.20

$0.30

$0.40

$0.50

$0.60

$0.70

$0.80

$0.90

$1.00

$1.10

'73 '75 '77 '79 '81 '83 '85 '87 '89 '91 '93 '95 '97 '99 '01 '03 '05 '07 '09 '11 '13

$1.8 billion Paid

Acquired

Yield on Original

Investment

Today 2.2%

10 yrs. 5.8%

25 yrs. 13.6%

Dividend per share


Consistent Financial Performance: Superior Shareholder Return

Outperform: S&P 500 by 86% Peers by 17%

Comparison of Cumulative Total Return Among RPM International Inc., the S&P 500 Index and a Peer Group

5/05 5/06 5/07 5/08 5/09 5/10 5/11 5/12 5/13 5/14 5/15

RPM International, Inc. 100.00 109.55 138.24 154.37 101.69 137.38 169.51 197.28 255.99 341.02 405.16

S&P 500 100.00 108.64 133.40 124.47 83.93 101.54 127.90 127.37 162.11 195.25 218.31

Peer Group 100.00 113.38 145.66 130.48 88.57 118.63 156.37 162.32 243.22 288.93 346.07


Ten-year comparison based on $100 invested on 5/31/05 in stock or index — including reinvestment of dividends. Fiscal year ending May 31.

(Peer Group includes Akzo Nobel N.V., Ferro Corporation, H.B. Fuller Company, Masco Corporation, PPG Industries, Inc., The Sherwin-Williams Company and The Valspar Corporation.)

Fiscal 2015 Fourth-Quarter Results ($ in millions, except per share amounts)

Three Months Ended May 31,

Consolidated 2015 2014 %

Sales $1,373 $1,277 +7.5%

EBIT $204 $172 +18.7%

Net Income $128 $109 +17.7%

EPS $0.94 $0.80 +17.5%


Consumer 2015 2014 %

Sales $495 $508 (2.6)%

EBIT $101 $86 +17.1%


Industrial 2015 2014 %

Sales $878 $769 +14.2%

EBIT $121 $99 +21.6%


Fiscal 2016 Outlook


Capital Allocation: Fiscal 2006-2015

Dividends Capex Asbestos Acquisitions TOTAL

$1,054,367 $673,215 $575,096 $1,226,622 $3,529,300


Dividends

Capex 19%

Asbestos 16%

Acquisitions 35% 30%


Fiscal 2016 Outlook “Accelerating Growth Investments”

• CapEx increase from $85 million to $120 million; large investments in:

– Tremco Roofing: AlphaGuard

– Kirker U.S. bottling and UK expansion

– Euclid Chemical: Tuf-Strand Macro Fibers

– Euclid Chemical Latin America: construction chemicals

– Viapol Brazilian platform for Euclid, Flowcrete, Tremco and Carboline

• Replicate successful Brazilian strategy in Malaysia

• Increase consumer advertising to expand market share


Fiscal 2016 Outlook

SPHC Core RPM Total

FY2015 ADJUSTED EPS* $0.05 $2.33 $2.38

*Fiscal 2015 U.S. GAAP diluted EPS of $1.78, adjusted for ASC 740 potential repatriation of foreign earnings of $0.60 per share.


Fiscal 2016 Outlook

SPHC Core RPM Total

FY2015 ADJUSTED EPS* $0.05 $2.33 $2.38

Adjustments to FY15 EPS: Earnout reversals ($0.15) ($0.15) SPHC/SEC legal & Q4 restructuring $0.07 $0.07

FY2015 Adjusted EPS Base $0.05 $2.25 $2.30



Fiscal 2016 Outlook

SPHC Core RPM Total

FY2015 ADJUSTED EPS* $0.05 $2.33 $2.38



SPHC incremental contribution $0.15 $0.15 RPM core growth (12%) $0.27 $0.27

FY2016 "Apples -to-Apples" compare to FY2015 $0.20 $2.52 $2.72



Fiscal 2016 Outlook

SPHC Core RPM Total

FY2015 ADJUSTED EPS* $0.05 $2.33 $2.38



SPHC incremental contribution $0.15 $0.15 RPM core growth (12%) $0.27 $0.27

FY2016 "Apples -to-Apples" compare to FY2015 $0.20 $2.52 $2.72

Net impact attributable to translational FX ($0.07) ($0.07) Net impact of higher effective tax rate ($0.10) ($0.10)

FY2016 ESTIMATED EPS $0.20 $2.35 $2.55


Good Value in a Great Company

“ Hire the best people you can find. Create an atmosphere that will keep them.

Then let them do their jobs. ”

Frank C. Sullivan, 1947


RPM INTERNATIONAL INC/DE/ - seekingalpha.com · CURRENT REPORT Pursuant to Section 13 or 15(d) of...

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