<PAGE> 1
Page 1 of 15
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
x Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
- -----
Act of 1934 for the quarterly period ended November 30, 1993 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. 0-5132
RPM, INC.
- --------------------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Ohio 34-6550857
- ------------------------------------ --------------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
P.O. Box 777; 2628 Pearl Road; Medina, Ohio 44258
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code (216) 273-5090
- --------------------------------------------------------------------------------
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 the
filing requirements for the past 90 days.
Yes x No
----- -----
As of January 3, 1994, 56,738,152 RPM, Inc. Common Shares were outstanding.
Exhibit Index on Page 14 of 15 pages.
<PAGE> 2
2
RPM, INC. AND SUBSIDIARIES
INDEX
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION Page No.
- ------------------------------- -------
<S> <C>
Consolidated Balance Sheets
November 30, 1993 and May 31, 1993 3
Consolidated Statements of Income
Six Months and Three Months Ended November 30, 1993 and 1992 4
Consolidated Statements of Cash Flows
Six Months Ended November 30, 1993 and 1992 5
Notes to Consolidated Financial Statements 6
Management's Discussion and Analysis of Results
of Operations and Financial Condition 8
Exhibit XI - Consolidated Statements of Computations
of Earnings Per Common Share and Common Share
Equivalents 10
PART II. OTHER INFORMATION 11 - 15
- ---------------------------
</TABLE>
<PAGE> 3
<TABLE>
RPM, INC. AND SUBSIDIARIES 3
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share amounts)
<CAPTION>
ASSETS
November 30, 1993 May 31, 1993
------------------ ------------
(Unaudited) (Restated)
<S> <C> <C>
Current Assets:
Cash $19,804 $22,885
Marketable securities, at cost 6,672 4,654
Trade accounts receivable (less allowance for doubtful
accounts $7,435 and $7,317) 152,305 159,232
Inventories 130,428 126,948
Prepaid expenses 17,030 17,617
--------------- ---------------
Total current assets 326,239 331,336
--------------- ---------------
Property, Plant and Equipment, at Cost 255,576 242,741
Less: accumulated depreciation and amortization 106,394 99,152
--------------- ---------------
Property, plant and equipment, net 149,182 143,589
--------------- ---------------
Other Assets
Costs of businesses over net assets acquired 108,431 108,386
Intangible Assets 28,901 31,208
Equity in unconsolidated affiliates 12,384 12,103
Other 28,079 21,902
--------------- ---------------
Total other assets 177,795 173,599
--------------- ---------------
Total Assets $653,216 $648,524
=============== ===============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Current portion of long term debt $8,939 $21,262
Accounts payable 45,972 58,474
Accrued compensation and benefits 20,217 21,538
Accrued warranty and loss reserves 9,214 12,793
Other accrued liabilities 20,752 17,808
Income taxes payable 3,540 7,065
--------------- ---------------
Total current liabilities 108,634 138,940
--------------- ---------------
Long term and deferred liabilities
Long term debt, less current maturities 230,751 258,712
Deferred income taxes and other 6,941 6,973
--------------- ---------------
Total long term and deferred liabilities 237,692 265,685
--------------- ---------------
Shareholders' Equity
Common shares, stated value $.023 per share;
authorized 100,000,000 shares;
issued and outstanding 56,715,111
and 53,000,065 shares, respectively 1,290 1,206
Paid-in capital 144,900 92,793
Retained earnings 163,371 150,573
Cumulative translation adjustment (2,671) (673)
--------------- ---------------
Total shareholders' equity 306,890 243,899
--------------- ---------------
Total Liabilities and Shareholders' Equity $653,216 $648,524
=============== ===============
<FN>
Data for May 1993 has been restated to reflect the acquisitions of Dynatron/Bondo Corporation on
June 8, 1993 and of Stonhard, Inc. on October 26, 1993, both accounted for as a pooling of interests.
The accompanying notes to consolidated financial statements are an integral part of these statements.
</TABLE>
<PAGE> 4
<TABLE>
RPM, INC. AND SUBSIDIARIES 4
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In thousands, except per share amounts)
<CAPTION>
Six Months Ended Three Months Ended
November 30, November 30,
--------------------- --------------------
1992 1992
1993 (Restated) 1993 (Restated)
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net Sales $411,590 $387,607 $202,243 $184,736
Cost of Sales 237,299 226,066 117,466 107,265
-------- -------- -------- --------
Gross Profit 174,291 161,541 84,777 77,471
Selling, General and Administrative Expenses 116,138 115,198 56,900 56,439
Interest Expense, Net 7,274 8,200 3,645 4,072
-------- -------- -------- --------
Income Before Income Taxes 50,879 38,143 24,232 16,960
Provision for Income Taxes 21,684 16,030 10,299 7,331
-------- -------- -------- --------
Net Income $ 29,195 $ 22,113 $ 13,933 $ 9,629
======== ======== ======== ========
Earnings per common share and common share
equivalent (Exhibit XI) $ 0.52 $ 0.42 $ 0.25 $ 0.18
======== ======== ======== ========
Earnings per common share assuming full
dilution (Exhibit XI) $ 0.49 $ 0.40 $ 0.23 $ 0.18
======== ======== ======== ========
Dividends per common share $ 0.25 $ 0.233 $ 0.13 $ 0.12
======== ======== ======== ========
<FN>
Data for November 1992 has been restated to reflect the acquisitions of Dynatron/Bondo Corporation
on June 8, 1993 and of Stonhard, Inc. on October 26, 1993, both accounted for as a pooling of interests.
The accompanying notes to consolidated financial statements are an integral part of these statements.
</TABLE>
<PAGE> 5
<TABLE>
<CAPTION>
RPM, INC. AND SUBSIDIARIES 5
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands, except per share amounts)
Six Months Ended November 30,
-----------------------------
1992
1993 (Restated)
-------- --------
<S> <C> <C>
Cash Flows From Operating Activities:
Net Income $29,195 $22,113
Items not affecting cash and other 11,689 4,149
Changes in operating working capital (15,467) (4,755)
---------- ----------
25,417 21,507
---------- ----------
Cash Flows From Investing Activities:
Additions to property and equipment (12,335) (9,164)
Acquisition of new businesses (10,718)
---------- ----------
(23,053) (9,164)
---------- ----------
Cash Flows From Financing Activities:
Proceeds from stock option exercises 282 155
Increase (decrease) in long-term debt 7,469 1,019
Dividends (13,196) (15,331)
---------- ----------
(5,445) (14,157)
---------- ----------
Net Increase (Decrease) in Cash (3,081) (1,814)
Cash at Beginning of Period 22,885 24,348
---------- ----------
Cash at End of Period $19,804 $22,534
========== ==========
Supplemental Schedule of Non-Cash Investing and Financing Activities:
Conversion of Debt to Equity $51,608
Interest Accreted on LYONs 3,855
<FN>
Data for November 1992 has been restated to reflect the acquisitions of Dynatron/Bondo Corporation
on June 8, 1993 and of Stonhard, Inc. on October 26, 1993, both accounted for as a pooling of interests.
The accompanying notes to consolidated financial statements are an integral part of these statements.
</TABLE>
<PAGE> 6
RPM, INC. AND SUBSIDIARIES 6
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
November 30, 1993
(Unaudited)
(In thousands, except per share amounts)
NOTE A -- BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared in
accordance with the instructions to Form 10-Q and do not include all of the
information and notes required by generally acepted accounting principles for
complete financial statements. In the opinion of management, all adjustments
(consisting of normal, recurring accruals) considered necessary for a fair
presentation have been included for the six months ended November 30, 1993
and November 30, 1992. For further information, refer to the consolidated
financial statements and notes included in the Company's Annual Report on
Form 10-K for the year ended May 31, 1993.
NOTE B -- INVENTORIES
Inventories were composed of the following major classes:
<TABLE>
<CAPTION>
November 30, 1993(1) May 31, 1993
----------------- ------------
(Restated)
<S> <C> <C>
Raw material and supplies $ 48,463 $ 47,170
Finished goods 81,965 79,778
------ --------
$130,428 $126,948
======== ========
<FN>
(1) Estimated, based on components at May 31, 1993
</TABLE>
NOTE C -- ACQUISITIONS
In December 1992, the Company acquired certain assets of the Millmaster Onyx
Group in a transaction accounted for by the purchase method of accounting.
The following data summarizes, on an unaudited pro-forma basis, the combined
results of operations of the Company for the six and three months ended
November 30, 1992. The pro-forma amounts give effect to appropriate
adjustments resulting from the combination, but are not necessarily
indicative of future results of operations or of what results would have been
for the combined companies.
<TABLE>
<CAPTION>
Six Months Ended Three Months Ended
November 30, 1992 November 30, 1992
----------------- -----------------
<S> <C> <C>
Net Sales $394,520 $187,826
======== ========
Net Income $ 22,602 $ 9,981
======== ========
Earnings per common share and
common share equivalent $.42 $.19
==== ====
Earnings per common share
assuming full dilution $.41 $.19
==== ====
</TABLE>
<PAGE> 7
RPM, INC. AND SUBSIDIARIES 7
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
November 30, 1993
(Unaudited)
(In thousands, except per share amounts)
NOTE C -- ACQUISITIONS - Continued
In June 1993, the Company acquired all of the outstanding shares of
Dynatron/Bondo Corporation. In October 1993, the Company acquired all the
shares of Stonhard, Inc. Both mergers have been accounted for as poolings of
interests. Accordingly, historical financial data presented in this report
has been restated to include the accounts and transactions of Dynatron/Bondo
Corporation and Stonhard, Inc. as though both were acquired as of June 1,
1992. The following table reconciles combined net sales, net income and
earnings per share of the separate companies for the six months ended
November 30, 1992.
<TABLE>
<CAPTION>
Fully
Primary Diluted
Earnings Earnings
Net Sales Net Income Per Share Per Share
--------- ---------- --------- ---------
<S> <C> <C> <C> <C>
RPM as previously reported $319,640 $ 22,706 $.48 $.45
Effect of Dynatron/Bondo
pooling 23,999 952 - -
Effect of Stonhard, Inc.
pooling 43,968 (1,545) (.06) (.05)
-------- ------- ----- -----
Combined $387,607 $ 22,113 $.42 $.40
======== ======== ==== ====
</TABLE>
<PAGE> 8
RPM, INC. AND SUBSIDIARIES 8
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
SIX MONTHS ENDED NOVEMBER 30, 1993
RESULTS OF OPERATIONS
The Company acquired Dynatron/Bondo Corporation in June 1993 and Stonhard, Inc.
in October 1993, both on a pooling-of-interests basis. Dynatron/Bondo is a $45
million supplier of automotive repair products for both the professional and
consumer markets, complementing the Company's Talsol line of automotive repair
products. Stonhard is a $100 million world-wide leader of industrial and
commercial polymer flooring whose products and markets will be synergistic with
many of the Company's existing industrial product lines. The Company's prior
year's results have been restated to reflect these poolings. Comparatively,
sales increased $24.0 million, or 6.2%, over the first six months of last year.
The recent strengthening of the dollar against European and Canadian currencies
had approximately a $6.0 million impact on this sales growth that otherwise
would have been $30.0 million, or 7.9%. Core businesses accounted for $24.2
million, or 81%, of this dollar adjusted sales growth and primarily from higher
unit volume as pricing adjustments have been relatively minor. The sales gains
during this past quarter (9.5%) reflect strength in both industrial and
consumer business.
The gross profit margin improved to 42.3% of six month sales from 41.7% during
the comparable period a year ago. This reflects the benefit of planned
improvements in product mix and plant efficiencies, mainly among the industrial
businesses, as well as the transfer of Dynatron/Bondo's Canadian production to
the U.S. These benefits were partially offset by a slight product mix shift
toward somewhat lower margin consumer business.
Selling, general and administrative expenses were reduced to 28.2% of sales
from 29.7% a year ago through primarily the conversion of both Dynatron/Bondo
and Stonhard to public operations and the incurrence last year of significant
restructuring charges at Stonhard's European operations. This category further
reflects the benefits of higher sales and planned expense reductions.
Acquisition costs, certain legal settlements and reduced royalty and joint
venture income partly offset these reductions.
The Company's June 1993 call for redemption of its $50 million 6.75%
Convertible Subordinated Eurobond Debentures due 2005 was the principal reason
for the decline in net interest expense from year to year. All bondholders had
exercised their conversion rights by the end of July 1993. Aside from the
Eurobonds, the net debt level was slightly higher during this past six months
compared to a year ago, related to acquisitions, causing slightly higher other
interest expense this year. Interest rates were generally comparable.
As discussed in the 1993 Annual Report, the provision for income taxes has
increased as a percentage of pre-tax income to 42.6% from 42.0%. This increase
is attributable primarily to new tax laws, and also to continued growth in
foreign income at comparatively higher tax rates and an upward trend in state
and local taxes.
Despite the increased tax provision, the comparative cost reductions discussed
enabled net income to grow at a faster pace than sales resulting in an improved
margin of 7.1% from 5.7% a year ago.
<PAGE> 9
RPM, INC. AND SUBSIDIARIES 9
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
SIX MONTHS ENDED NOVEMBER 30, 1993
Continued
CAPITAL RESOURCES AND LIQUIDITY
CASH PROVIDED FROM OPERATIONS
The cash flow from operations continues to be the primary source of financing
the Company's internal growth. The Company generated cash from operations of
$25.4 million for the current six month period, up $3.9 million from the same
period a year ago.
Operating working capital had a more adverse effect in the current six month
period primarily as a result of certain reserve payments and the timing of
federal income tax payments. Inventory in the current six months increased
approximately $5 million over the prior year's first six months.
INVESTING ACTIVITIES
Capital expenditures amounted to $12.3 million to date, up $3.1 million from
the same period last year. The Company's capital expenditures generally do not
exceed depreciation and amortization in a given year.
Certain cash requirements in the acquisitions of Dynatron/Bondo and Stonhard
amounted to approximately $8.6 million. The Company also acquired the assets
of a small division of a hobby company for $2.1 million.
FINANCING ACTIVITIES
As a result of the Eurobond conversion in July 1993, the Company's November 30,
1993 balance sheet reflects reductions of $1.2 million of other assets, $3.1
million of other accrued liabilities and $50 million of long-term debt with a
corresponding increase to shareholders' equity resulting in an improved debt
capital ratio of 43% from 52% at May 31, 1993.
Other significant financing activities in the past six months include a $10
million increase in the multi-currency revolving credit agreement to facilitate
the payment due former shareholders of a subsidiary included in the current
portion of long-term debt at May 31, 1993. In addition, the Company assumed
long-term debt of approximately $39 million in connection with the Stonhard and
Dynatron/Bondo acquisitions. The subsequent retirement of this comparatively
higher interest debt was financed by increasing the $10 million revolving
credit agreement to $55 million. The revolver had a balance of $52.3 million
at November 30, 1993.
Working capital increased to $217.6 million from $192.4 million at May 31,
1993, with the current ratio increasing to 3.0:1 from 2.4:1. These
improvements were due primarily to the cited reduction in the current portion
of long term debt. The higher dividend payments reflected in the restated
first six months of last year include $2.3 million that had been paid by
Dynatron/Bondo Corporation to their shareholders at that time.
The Company maintains excellent relations with its banks and other financial
institutions to further enable the financing of future growth opportunities.
<PAGE> 10
RPM, INC. AND SUBSIDIARIES 10
PART II - OTHER INFORMATION
ITEM 1 -- LEGAL PROCEEDINGS
Two asbestos-related bodily injury lawsuits which had previously been filed
against Bondex International, Inc., a wholly-owned subsidiary of the Company
("Bondex"), were dismissed with prejudice as a result of plaintiffs' inability
to produce evidence of exposure to or use of any Bondex asbestos-containing
product. Further, thirty additional lawsuits which had been filed in In Re:
Asbestos Products Liability Litigation (No. VI); U.S. District Court, Eastern
District of Pennsylvania, Civil Action No. MDL 875, were dismissed without
prejudice by Order entered October 15, 1993. All involved allegations of
asbestos-related diseases not compensable under current Pennsylvania case law.
All of the dismissed cases are subject to reinstatement should the diseases
alleged by plaintiffs progress to a compensable status. There are currently
pending against Bondex a total of 284 asbestos-related bodily injury suits
filed on behalf of various individuals in various jurisdictions in the United
States. All of these lawsuits name numerous other corporate defendants and all
allege bodily injury as a result of the exposure to or use of
asbestos-containing products. Bondex has denied liability in all pending
lawsuits and continues to vigorously defend them.
As previously reported in the Company's Quarterly Report on Form 10-Q for
the quarter ended August 31, 1993, Carboline Company, a wholly-owned
subsidiary of the Company ("Carboline"), has been named by the U.S.
Environmental Protection Agency ("EPA") together with 36 other entities as a
potentially responsible party ("PRP") under the Comprehensive Environmental
Response, Compensation and Liability Act, as amended ("CERCLA") in connection
with the Powell Road Landfill Site, Huber Heights, Ohio (the "Site").
Carboline is alleged to be associated with the Site as a consequence of
disposal of waste originating at its Xenia, Ohio plant. Carboline has joined
with other PRPs in a "PRP Organization Agreement" for the purpose of conducting
a common response to any claim for removal or response action asserted by the
EPA or the State of Ohio or conducting a common defense to any such claim. A
remedial investigation ("RI") to evaluate the nature and extent of
contamination at the Site and a feasibility study ("FS") of recommended cleanup
remedy, prepared by Waste Management, Inc., owner of the Site, have been
submitted to the EPA. Following its review of the RI/FS, the EPA has
tentatively proposed a more expensive remedy, which will be the subject of
future negotiations. The PRP group, now totalling 45, has advised the EPA of
the PRPs' interest in negotiating an Administrative Order on Consent which
would obligate the PRPs to perform a Remedial Design at the Site. Initial
discussions with the EPA are scheduled for January, 1994. Based upon
Carboline's estimated allocated share of total waste volume at the Site
(approximately 0.50 percent) the Company believes that ultimate resolution of
this matter will not have a material adverse effect on the Company's financial
position or results of operations.
<PAGE> 11
RPM, INC. AND SUBSIDIARIES 11
PART II - OTHER INFORMATION
ITEM 1 -- LEGAL PROCEEDINGS - Continued
As previously reported in the Company's Annual Report on Form 10-K for the
fiscal year ended May 31, 1993, agreement was reached to settle two adversary
proceedings pending against the Company in the bankruptcy proceedings of GEC
Industries, Inc. (formerly Gates Engineering Company), a former subsidiary of
the Company ("GEC"), Case No. 89-44 in the United States Bankruptcy Court for
the District of Delaware. The first proceeding, GEC AND THE WARRANTY CLAIMANTS
COMMITTEE V. AMERICAN INTERNATIONAL GROUP, INC., ET AL., Adversary No. 90-64,
is a declaratory judgment action against the Company, certain of its
subsidiaries and certain of their primary and excess insurers seeking judicial
determination of, among other things, the obligations of the insurance carriers
and scope of coverage under the insuring agreements with respect to claims
asserted against GEC for alleged defective roofing materials manufactured by
GEC. The second proceeding, GEC AND THE WARRANTY CLAIMANTS COMMITTEE V. RPM,
INC., Adversary No. 90-65, seeks to hold the Company liable for all warranty
claims of GEC, based upon allegations that GEC was the alter ego,
instrumentality and actual or apparent agent of the Company. The settlement
agreement, which involves an aggregate payment of $3 million by the Company
and the insurance carriers, was approved by the U.S. Bankruptcy Court by Order
entered May 14, 1993. On May 20, 1993, Notice of Appeal from the Order was
filed in the U.S. District Court for the District of Delaware; Civil Action No.
93-338 (Bankruptcy No. 89-44), by Jack E. Brown, Trustee in Bankruptcy for
Gentges Roofing and Sheet Metal, Inc., a GEC warranty claimant. Appellant Jack
E. Brown subsequently withdrew the appeal which was then dismissed by the U.S.
District Court per Order entered September 30, 1993. Stipulations of Dismissal
of both adversary proceedings (Adversary Nos. 90-64 and 90-65) were
subsequently executed by all parties and filed with the U.S. Bankruptcy Court.
Per Order entered January 11, 1994, both adversary proceedings were dismissed
with prejudice by the U.S. Bankruptcy Court. This litigation is now ended.
As previously reported in the Company's Annual Report on Form 10-K for the
fiscal year ended May 31, 1993, the Company was named a defendant in a lawsuit
captioned GATES ENGINEERING COMPANY, INC., ET AL. V. NOMA INDUSTRIES, LTD.,
JACK E. BROWN, TRUSTEE IN BANKRUPTCY FOR GENTGES ROOFING & SHEET METAL, INC. V.
GATES ENGINEERING COMPANY, INC., ET AL. (including RPM, Inc.) filed August 26,
1987 in the United States District Court for the Western District of Missouri,
Central Division, Case No. 86-4053-CV-C-5. In a Third Amended Complaint,
Plaintiff Brown included derivative claims against the Company, claims for
tortious interference with contract and violation by the Company of the federal
RICO statute. The Third Amended Complaint sought $1,394,561.44 in actual
damages, $10 million in punitive damages, treble compensatory damages under
RICO and further relief. Per Order entered May 26, 1993, the U.S. District
Court granted the Company's Motions for
<PAGE> 12
RPM, INC. AND SUBSIDIARIES 12
PART II - OTHER INFORMATION
ITEM 1 -- LEGAL PROCEEDINGS - Continued
Summary Judgment and dismissed all counts alleging civil conspiracy and
violation of the RICO statute. At the commencement of trial on June 7, 1993,
all alter-ego claims against the Company, including counts of fraud, negligence
and breach of contract, were voluntarily dismissed with prejudice by the
plaintiff. On June 9, 1993, the U.S. District Court directed a verdict in
favor of the Company on the sole remaining count of tortious interference with
contract, and judgment was entered per Order entered June 11, 1993. On July 9,
1993, a Notice of Appeal from the Order entered May 26, 1993 (granting the
Company's Motion for Summary Judgment), as well as from the Order entered June
11, 1993 (entering judgment on the directed verdict for the Company), was filed
by plaintiff Brown in the U.S. Court of Appeals, Eighth Circuit; Appeal No.
93.2810. In November, 1993, the Company and plaintiff Brown entered into a
settlement agreement (subject to approval of the U.S. Bankruptcy Court for
the Western District of Missouri, Central Division), pursuant to which the
Company agreed to pay Brown an amount the Company considers insignificant in
exchange for Brown's complete dismissal of his appeal pending before the U.S.
Eighth Circuit Court of Appeals. On December 27, 1993, the Bankruptcy Court in
the Gentges bankruptcy proceedings entered an Order approving the settlement;
however, on December 28, 1993, John D. Gentges, a creditor in the Gentges
bankruptcy proceedings, filed a Notice of Appeal to the U.S. District Court
from the Order of the Bankruptcy Court. The Company and plaintiff Brown
subsequently filed a Stipulation of Dismissal With Prejudice of plaintiff
Brown's appeal pending before the U.S. Eighth Circuit Court of Appeals. Per
Order entered January 7, 1994, the stipulation was granted and plaintiff
Brown's appeal was dismissed with prejudice. Consequently, the Gentges appeal
to the U.S. District Court is now moot and this litigation is ended.
ITEM 4 -- SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Annual Meeting of Shareholders of the Company was held on October 8,
1993. The following matter was voted on at the meeting.
1. Election of Roy H. Holdt, E. Bradley Jones and John H. Morris, Jr. as
Directors of the Company. The nominees were elected as Directors
with the following vote:
<TABLE>
<CAPTION>
<S> <C>
ROY H. HOLDT
For 42,288,022
Withheld 430,260
Broker non-votes 0
</TABLE>
<PAGE> 13
RPM, INC. AND SUBSIDIARIES 13
PART II - OTHER INFORMATION
ITEM 4 - Continued
<TABLE>
<CAPTION>
<S> <C>
E. BRADLEY JONES
For 42,341,027
Withheld 377,255
Broker non-votes 0
JOHN H. MORRIS, JR.
For 42,412,924
Withheld 305,358
Broker non-votes 0
</TABLE>
For information on how the votes for the election of Directors have been
tabulated, see the Company's definitive Proxy Statement used in connection with
the Annual Meeting of Shareholders held on October 8, 1993.
ITEM 6 -- EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
<TABLE>
<CAPTION>
Official Exhibit Sequential
Number Description Page Number
------------------ ------------ ------------
<S> <C> <C>
XI Statement regarding 15
computation of per
share earnings
</TABLE>
(b) Reports on Form 8-K
During the second fiscal quarter ended November 30, 1993, the Company
filed one Current Report on Form 8-K, dated October 26, 1993, pursuant to
Items 2 and 7 in connection with the Company's acquisition of Stonhard,
Inc.
<PAGE> 14
Page 14 of 15
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 thereunto duly authorized.
RPM INC.
By /s/ JAMES A. KARMAN
James A. Karman,
President & Chief
Operating Officer
(duly authorized officer)
By /s/ GLENN R. HASMAN
Glenn R. Hasman,
Vice President - Administration
(principal accounting officer)
Date: January 14, 1994
<PAGE> 1
<TABLE>
RPM, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPUTATIONS OF EARNINGS
PER COMMON SHARE AND COMMON SHARE EQUIVALENTS
(Unaudited)
Exhibit XI
(In thousands, except per share amounts)
<CAPTION>
Six Months Ended November 30,
------------------------------
1992
1993 (Restated)
-------- --------
<S> <C> <C>
Shares Outstanding
For computation of primary earnings per
common share
Weighted average shares 56,020 52,875
Net issuable common share equivalents 350 352
-------- --------
Total shares for primary earnings
per share 56,370 53,227
For computation of fully-diluted earnings
per common share
Additional shares issuable assuming
conversion of convertible securities 8,483 6,281
Additional common shares equivalents;
ending market value higher than
average market value - 67
-------- --------
Total shares for fully-diluted
earnings per share 64,853 59,575
======== ========
Net Income
Net income applicable to common shares for
primary earnings per share $29,195 $22,113
Add back interest net of tax on convertible
securities assumed to be converted 2,393 1,736
-------- --------
Net income applicable to common shares for
fully-diluted earnings $31,588 $23,849
======== ========
Earnings Per Common Share and Common Share
Equivalents $.52 $.42
==== ====
Earnings Per Common Share Assuming Full
Dilution $.49 $.40
==== ====
<FN>
Data for November 1992 has been restated to reflect the acquisitions of Dynatron/Bondo Corporation
on June 8, 1993 and of Stonhard, Inc. on October 26, 1993, both accounted for as a pooling of interests.
</TABLE>
