<PAGE> 1
PAGE 1 OF 16
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, 1995 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 9, 1996 75,322,780 RPM, INC. COMMON SHARES WERE OUTSTANDING.
EXHIBIT INDEX ON PAGE 15 OF 16 PAGES.
<PAGE> 2
RPM, INC. AND SUBSIDIARIES
--------------------------
INDEX
-----
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION PAGE NO.
- ------------------------------- -------
<S> <C>
CONSOLIDATED BALANCE SHEETS
NOVEMBER 30, 1995 AND MAY 31, 1995 3
CONSOLIDATED STATEMENTS OF INCOME
SIX MONTHS AND THREE MONTHS ENDED
NOVEMBER 30, 1995 AND 1994 4
CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED NOVEMBER 30, 1995 AND 1994 5
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 6
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION 8
PART II. OTHER INFORMATION 11
- ---------------------------
EXHIBIT XI - CONSOLIDATED STATEMENTS OF COMPUTATIONS OF
EARNINGS PER COMMON SHARE AND COMMON SHARE EQUIVALENTS
SIX MONTHS ENDED NOVEMBER 30, 1995 AND 1994 17
</TABLE>
<PAGE> 3
RPM, INC. AND SUBSIDIARIES 3
--------------------------
CONSOLIDATED BALANCE SHEETS
---------------------------
(Unaudited)
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
ASSETS
------ November 30, 1995 May 31, 1995
----------------- ------------
<S> <C> <C>
Current Assets
Cash $ 36,244 $ 19,870
Marketable securities, at cost 11,631 8,132
Trade accounts receivable (less allowance for doubt-
ful accounts $10,958 and $9,616) 202,520 207,509
Inventories 167,496 169,154
Prepaid expenses 20,258 16,637
---------- --------
Total current assets 438,149 421,302
---------- --------
Property, Plant and Equipment, At Cost 385,086 360,706
Less: accumulated depreciation and amortization 167,486 156,657
---------- --------
Property, plant and equipment, net 217,600 204,049
---------- --------
Other Assets
Costs of businesses over net assets acquired 279,038 211,781
Intangible Assets 159,924 85,375
Equity in unconsolidated affiliates 15,826 14,857
Other 22,781 21,776
---------- --------
Total other assets 477,569 333,789
---------- --------
Total Assets $1,133,318 $959,140
========== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
Current Liabilities
Current portion of long-term debt $1,178 $643
Accounts payable 62,923 70,207
Accrued compensation and benefits 28,553 29,932
Accrued warranty and loss reserves 32,336 23,897
Other accrued liabilities 21,660 20,309
Income taxes payable 2,893 6,088
---------- --------
Total current liabilities 149,543 151,076
---------- --------
Long-term Liabilities
Long-term debt, less current maturities 466,898 406,375
Deferred income taxes 70,836 39,693
Other long-term liabilities 15,070 14,405
---------- --------
Total long-term liabilities 552,804 460,473
---------- --------
Shareholders' Equity
Common shares, stated value $.018 per share;
authorized 100,000,000 shares;
issued and outstanding 75,309,000
and 71,196,000 shares, respectively* 1,370 1,296
Paid-in capital 212,447 146,509
Retained earnings 217,630 199,206
Cumulative translation adjustment (476) 580
---------- --------
Total shareholders' equity 430,971 347,591
---------- --------
Total Liabilities And Shareholders' Equity $1,133,318 $959,140
========== ========
<FN>
* Share data has been restated to reflect a 25% stock dividend paid
December 8, 1995.
The accompanying notes to consolidated financial statements are an integral
part of these statements.
</TABLE>
<PAGE> 4
RPM, INC. AND SUBSIDIARIES 4
--------------------------
CONSOLIDATED STATEMENTS OF INCOME
---------------------------------
(Unaudited)
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
Six Months Ended Three Months Ended
November 30, November 30,
------------------ -------------------
1995 1994 1995 1994
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net Sales $556,086 $506,726 $276,940 $253,229
Cost of Sales 321,777 292,640 160,990 146,116
-------- -------- -------- --------
Gross Profit 234,309 214,086 115,950 107,113
Selling, General and Administrative Expenses 159,868 144,988 81,915 74,825
Interest Expense, Net 12,706 10,554 6,596 5,728
-------- -------- -------- --------
Income Before Income Taxes 61,735 58,544 27,439 26,560
Provision for Income Taxes 26,299 24,881 11,620 11,288
-------- -------- -------- --------
Net Income $35,436 $33,663 $15,819 $15,272
======== ======== ======== ========
Earnings per common share and common
share equivalent (Exhibit XI) * $0.48 $0.47 $0.22 $0.21
======== ======== ======== ========
Earnings per common share assuming full
dilution (Exhibit XI) * $0.46 $0.44 $0.21 $0.20
======== ======== ======== ========
Dividends per common share * $0.23 $0.22 $0.12 $0.11
======== ======== ======== ========
<FN>
* Share data has been restated to reflect a 25% stock dividend paid December
8, 1995.
The accompanying notes to consolidated financial statements are an integral
part of these statements.
</TABLE>
<PAGE> 5
RPM, INC. AND SUBSIDIARIES 5
--------------------------
CONSOLIDATED STATEMENTS OF CASH FLOWS
-------------------------------------
(Unaudited)
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
Six Months Ended November 30,
-----------------------------
1995 1994
---- ----
<S> <C> <C>
Cash Flows From Operating Activities:
Net Income $35,436 $33,663
Depreciation and amortization 20,426 15,876
Items not affecting cash and other (6,124) (3,308)
Changes in operating working capital (3,607) 3,088
------- -------
46,131 49,319
------- -------
Cash Flows From Investing Activities:
Additions to property and equipment (14,074) (13,484)
Acquisition of businesses, net of cash acquired (45,820) (173,061)
------- -------
(59,894) (186,545)
------- -------
Cash Flows From Financing Activities:
Proceeds from stock option exercises 811 485
Increase (decrease) in long-term debt 46,338 163,316
Dividends (17,012) (15,333)
------- -------
30,137 148,468
------- -------
Net Increase (Decrease) in Cash 16,374 11,242
Cash at Beginning of Period 19,870 18,370
------- -------
Cash at End of Period $36,244 $29,612
======= =======
Supplemental Schedule of Non-Cash Investing and Financing Activities:
- ---------------------------------------------------------------------
Interest Accreted on LYONs $4,277 $4,061
Issuance of shares in connection with acquisition of a business 65,200
<FN>
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, 1995
-----------------
(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 accepted 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 and three months ended November 30,
1995 and November 30, 1994. 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, 1995.
NOTE B - INVENTORIES
- --------------------
Inventories were composed of the following major classes:
<TABLE>
<CAPTION>
November 30, May 31,
1995 (1) 1995
----------- -------------
<S> <C> <C>
Raw materials and supplies $ 59,211 $ 59,797
Finished goods 108,285 109,357
-------- --------
$167,496 $169,154
======== ========
<FN>
(1) Estimated, based on components at May 31, 1995
</TABLE>
<PAGE> 7
RPM, INC. AND SUBSIDIARIES 7
--------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
NOVEMBER 30, 1995
-----------------
(Unaudited)
(In thousands, except per share amounts)
NOTE C - ACQUISITIONS
- ---------------------
The Company acquired all the outstanding shares of Rust-Oleum
Corporation in June 1994, Star Finishing Products, Inc. in August 1995, and
Dryvit Systems, Inc. in September 1995. These transactions were all 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 companies
for the six and three months ended November 30, 1995 and November 30, 1994.
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>
For The Six For The Three
Months Ended Months Ended
November 30, November 30,
---------------------- ----------------------
1995 1994 1995 1994
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net Sales $585,086 $566,275 $281,806 $273,471
======== ======== ======== ========
Net Income $ 34,738 $ 35,533 $ 15,475 $ 15,277
======== ======== ======== ========
Earnings per common
share and common
share equivalent $.46 $.48 $.21 $.20
==== ==== ==== ====
Earnings per common
share assuming full
dilution $.44 $.45 $.20 $.20
==== ==== ==== ====
</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, 1995
----------------------------------
RESULTS OF OPERATIONS
- ---------------------
Acquisitions, primarily those of Rust-Oleum Corporation on June 28,
1994, and Dryvit Systems, Inc. on September 21, 1995, accounted for
approximately 70% of the sales increase in the first six months and 80%
in the second quarter, compared with last year. Core operations
generated the remaining sales growth from a combination of pricing
adjustments that have averaged less than 3% year-to-year and slightly
higher unit volume. Exchange rate differences and small product line
additions had a slightly positive effect on sales this year over last.
The gross profit margin declined during the second quarter, causing
this margin to be approximately even with a year ago after the first
six months. The acquisitions tended to have a slight strengthening
effect on this margin, but did not overcome the effects of increases in
material costs. Management continues to make every effort to effectively
negate raw material and packaging cost increases through the leverage of
combined purchasing of significant materials, pricing adjustments, and
product reformulations.
Acquisitions had a somewhat favorable effect on the Company's selling,
general and administrative expenses relative to sales, but this was
offset by the effects of lower sales growth than expected and planned
spending to promote future growth. During the second quarter, the
Company recovered approximately $2 million from insurance carriers
against previously incurred environmental costs at a particular site.
In consideration of the slower than planned sales growth, the Company
has initiated an expense reduction campaign. The positive effects of
this campaign will benefit the third quarter and the balance of this
fiscal year.
The increase in interest expense after six months reflects primarily the
indebtedness associated with Rust-Oleum, Dryvit and other acquisitions
with the balance reflecting comparatively higher interest rates and the
LYONs interest accretion. Higher interest income and debt reductions of
approximately $28 million during the past year reduced interest
expense comparatively.
The provision for income taxes is slightly higher, as expected, after
six months essentially from the tax treatment of certain acquisition
related expenses. The slight rate improvement in the second quarter
reflects the tax benefit of improved performance in certain foreign
countries.
<PAGE> 9
RPM, INC. AND SUBSIDIARIES 9
--------------------------
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
---------------------------------------
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
---------------------------------------------
SIX MONTHS ENDED NOVEMBER 30, 1995
----------------------------------
The Company's foreign sales and results of operations are impacted by
currency fluctuations. The Company has most of its foreign operations in
Belgium and the Belgian franc has been a fairly stable currency compared
with the currencies primarily used in transactions by those operations.
Foreign debt is denominated in the respective foreign currency, thereby
eliminating the exchange impact on earnings.
All previously reported per share data have been restated to reflect the
25% stock dividend issued December 8, 1995, and treated as a 5-for-4 stock
split.
Subsequent to quarter end, on January 12, 1996, the Company completed
the acquisition of TCI, Inc., headquartered in Ellaville, Georgia, on a
pooling of interests basis. TCI is a leading manufacturer of powdered
coatings with annual sales of approximately $20 million. This acquisition
and that of Dryvit are not expected to be dilutive in 1996.
CAPITAL RESOURCES AND LIQUIDITY
- -------------------------------
CASH PROVIDED FROM OPERATIONS
Cash flow from operations continues to be the primary source of
financing the Company's internal growth. The Company generated cash from
operations of $46.1 million during the first six months, down slightly
from $49.3 million a year ago. There had been a significant
reduction of working capital at Rust-Oleum upon its acquisition a year
ago, accounting for essentially all of this difference.
INVESTING ACTIVITIES
The Company's capital expenditures generally do not exceed
depreciation and amortization in a given year.
The Company invested $45.8 million in the purchase of Dryvit and
several smaller businesses, net of cash acquired. The Company
historically has acquired complementary businesses and this trend is
expected to continue.
FINANCING ACTIVITIES
On June 15, 1995, the Company issued and sold $150 million aggregate
principal amount of 7% Senior Unsecured Notes due 2005. The total net
proceeds of this offering were used to reduce the $190 million balance
of the Company's $300 million revolving credit agreement to $40
million. The Company has since reduced its revolving credit facility
to $150 million and extended its final maturity to 2000.
The Company completed the acquisition of Dryvit Systems, Inc. on
September 21, 1995 for approximately $32 million in cash, the
retirement of approximately $14.5 million of
<PAGE> 10
RPM, INC. AND SUBSIDIARIES 10
--------------------------
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
---------------------------------------
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
---------------------------------------------
SIX MONTHS ENDED NOVEMBER 30, 1995
----------------------------------
Dryvit's existing long-term debt, and the issuance of 3.2 million Company
shares. The Company's revolving credit facility was utilized for the
cash and debt retirement portions of this transaction. This instrument
had an outstanding balance of $100 million at November 30, 1995.
As a result of primarily the share issuance to acquire Dryvit, the
Company's debt to capital ratio improved to 52% from 54% at May 31,
1995. Working capital increased to $289 million from $270 million at
May 31, 1995, with the current ratio improving to 2.9:1 from 2.8:1.
The Company maintains excellent relations with its banks and other
financial institutions to further enable the financing of future
growth opportunities.
<PAGE> 11
RPM, INC. AND SUBSIDIARIES 11
ITEM 3 -- LEGAL PROCEEDINGS
- ---------------------------
As previously reported in the Company's Annual Report on Form
10-K for the fiscal year ended May 31, 1995, and as updated in the Company's
Quarterly Report on Form 10-Q for the quarter ended August 31, 1995, Bondex
International, Inc., a wholly-owned subsidiary of the Company ("Bondex"), is
one of numerous corporate defendants in 390 then pending asbestos-related
bodily injury lawsuits filed on behalf of various individuals in various
jurisdictions in the United States. Subsequently, an additional 15 such cases
were filed and 4 such cases which had been filed were dismissed with prejudice,
pursuant to summary judgments and stipulations of dismissal. In each of the
dismissed cases, the plaintiffs were unable to produce evidence of exposure to
or use of any Bondex asbestos-containing product. Bondex continues to deny
liability in all 401 cases that remain pending and continues to vigorously
defend them. Under a cost-sharing agreement among Bondex and its insurers
effected in February, 1994, the insurers are responsible for payment of a
substantial portion of defense costs and indemnity payments, if any, with
Bondex responsible for a minor portion of each.
As previously reported in the Company's Annual Report on Form
10-K for the fiscal year ended May 31, 1995, in September, 1991, Our Lady of
the Lake Hospital, Inc. ("OLOL") filed suit captioned Our Lady of the Lake
Hospital, Inc. vs. Carboline Company, et al., Case Number 373,498, Division
"J", Nineteenth Judicial District Court, Parish of East Baton Rouge, State of
Louisiana, alleging damages to the structural steel of the hospital which it
owns and operates in Baton Rouge, Louisiana. The petition alleged that the
damages resulted from its use of a fireproofing product known as Pyrocrete 102
manufactured and supplied by Carboline Company, a wholly-owned subsidiary of
the Company ("Carboline"); that Pyrocrete 102 is extremely corrosive when
applied to structural steel, contains a latent defect, and is defective.
Carboline has contested liability in the case vigorously, and on July 21, 1992,
the trial court sustained an Exception of Prescription filed on Carboline's
behalf and dismissed the suit with prejudice. OLOL appealed, and on December
29, 1993, the appellate court vacated the judgment dismissing the suit and
remanded the matter to the trial court for the introduction of further evidence
and further proceedings. On July 13, 1994, OLOL filed a Second Supplemental
and Amending Petition which joined as party defendants Sun Company, Inc.
("Sun") and Carboline Company, a Missouri corporation which was merged into Sun
pursuant to a statutory merger in 1980 ("Carboline Missouri"); claimed that the
product was not fit for its intended purpose, claimed fraud, breach of
contract, breach of warranty and product liability and sought punitive damages
and attorneys fees. In July, 1995, OLOL filed a motion seeking leave of court
to further amend its petition and allow it to make additional allegations of
fraud, concealment, misrepresentation, failure to warn, and breach of contract;
claimed damages from the presence of chlorides and amended its claim for
punitive damages, attorneys fees, and interest. Pursuant to an agreement
between Carboline and Sun, Carboline is providing a defense for Sun in this
litigation. The Petition does not set forth the amount of damages being
claimed; however, in one of the briefs filed in the appellate court, OLOL
<PAGE> 12
RPM, INC. AND SUBSIDIARIES 12
claimed it would cost in excess of $20 million to repair the damage to the
hospital building. In addition, OLOL claims that it has suffered lost
revenues, lost profits, and other damages which allegedly exceed the claim for
repair damages.
In August, 1992, OLOL filed suit against Sun captioned Our
Lady of the Lake Hospital, Inc. vs. Sun Company, Inc., Case Number 384,867,
Division "I", Nineteenth Judicial District Court, Parish of East Baton Rouge,
State of Louisiana, making allegations similar to the allegations in Case
Number 373,498, described above, and seeking to recover alleged damages to the
structural steel of the OLOL hospital. In addition, in the original petition
filed in this suit, OLOL alleged that Carboline Missouri manufactured and
supplied the Pyrocrete 102 to OLOL and thereafter merged with Sun in January
1980, with Sun remaining as the surviving corporation responsible for the
obligations of Carboline Missouri. On June 29, 1993 OLOL filed a First
Supplemental and Amending Petition ("Amended Petition") which added Carboline
as an additional defendant. The Amended Petition generally alleged that
Carboline damaged OLOL through fraud and also breached a contractual obligation
of service after the sale. The Amended Petition alleged that OLOL will incur
expenses and costs in excess of $20 million to repair the damages. Carboline
has filed an Exception of Lis Pendens on the basis that this suit arose out of
the same transaction or occurrence as the suit described above. Pursuant to an
agreement between Carboline and Sun, Carboline provided a defense for Sun in
this litigation. Sun has filed an Exception of Lis Pendens and a Failure to
Assert All Causes of Action. In June 1994, the court transferred and
consolidated this suit with Case Number 373,498. On August 30, 1995, the
claims filed in Case Number 384,867 were dismissed without prejudice on the
grounds that the claims were now included in Case Number 373,498.
Carboline has denied the allegation of OLOL's claims and is
vigorously contesting them. Carboline's defense has been assumed by First
Colonial Insurance Company ("First Colonial"), a wholly-owned insurance
subsidiary of the Company. First Colonial is seeking to negotiate a
cost-sharing agreement with a group of Carboline's insurers to cover defense
obligations relating to the OLOL lawsuits.
In May 1995, Carboline filed a Supplemental and Amended Third
Party Demand in Case Number 373,498, against twenty-two (22) primary and excess
insurance carriers seeking, among other things, a judgment that the insurance
carriers are obligated to defend and/or indemnify Carboline against the claims
alleged by OLOL. In their Answers to Carboline's Supplemental and Amended
Third Party Complaint, the insurance carriers have raised a number of
exceptions and defenses to Carboline's claims for defense and indemnity.
The parties are engaged in written and deposition discovery.
The trial of all claims by all parties in Case Number 373,498 is scheduled for
November 1, 1996.
As previously reported in the Company's Annual Report on Form
10-K for the fiscal year ended May 31, 1995, Mohawk Finishing Products, Inc.
("Mohawk") and Westfield Coatings Corporation ("Westfield"), both wholly-owned
subsidiaries of the Company, have been named by the U.S. Environmental
Protection Agency ("EPA") together with over 1,700
<PAGE> 13
RPM, INC. AND SUBSIDIARIES 13
other entities as potentially responsible parties ("PRPs") under the
Comprehensive Environmental Response Compensation and Liability Act, as amended
("CERCLA") with respect to environmental contamination at the Solvents Recovery
of New England Site (the "SRS Site") located in Southington, Connecticut.
Pursuant to agreement between the EPA and the SRS Site PRP Steering Committee,
the SRS PRPs, including Mohawk and Westfield, have completed a non-time
critical action for containment of contaminated water in the shallow aquifer at
the SRS Site at an estimated total cost of $7,783,000--$2 million of which was
paid by DE MINIMIS PRPs. Westfield's share of the balance of $5,783,000 (at
1.1038%, as adjusted) totals approximately $64,000 of which $53,400 has been
paid. Mohawk's share of the balance (at .1372%, as adjusted) totals
approximately $8,000, of which $6,604 has been paid. The PRP Steering
Committee is currently completing negotiations with the EPA with respect to
performance by the PRPs of a Remedial Investigation and Feasibility Study for
the Site and a second non-time critical removal action for contamination in the
deep bedrock aquifer, at an estimated total cost of approximately $8.7 million.
Based upon current allocated percentages, Westfield's share of the total is
estimated at approximately $96,000 and Mohawk's share is estimated at
approximately $12,000.
In January, 1994, Westfield was named by the EPA as one of
approximately 300 PRPs at the Old Southington Landfill Superfund Site (the
"Landfill Site"), based upon process wastes generated by certain PRPs allegedly
sent from the SRS Site to the Landfill Site prior to 1987. In September, 1994,
the EPA issued a Record of Decision which selected a source control remedy
consisting of installation of a cap on the Landfill Site together with a gas
collection system at an estimated total cost of $16.1 million, 25% of which has
been allocated to PRPs from the SRS Site group, which includes Westfield.
Based upon the allocated volumetric share of 1.0223%, Westfield's share of the
Landfill Site cleanup costs is estimated at approximately $45,000.
ITEM 4 -- SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
- --------------------------------------------------------------
The Annual Meeting of Shareholders of the Company was held on October
12, 1995. The following matters were voted on at the meeting.
1. Election of Edward B. Brandon, William A. Papenbrock, Thomas
C. Sullivan and Frank C. Sullivan as Directors of the Company.
The nominees were elected as Directors with the following
vote:
<PAGE> 14
14
RPM, INC, AND SUBSIDIARIES
ITEM 4 -- CONTINUED
- -------------------
<TABLE>
<S> <C>
EDWARD B. BRANDON
-----------------
For 41,886,783.0
Withheld 408,304.0
Broker non-votes 0
WILLIAM A. PAPENBROCK
---------------------
For 41,696,331.0
Withheld 598,756.1
Broker non-votes 0
THOMAS C. SULLIVAN
------------------
For 41,890,197.2
Withheld 404,889.9
Broker non-votes 0
FRANK C. SULLIVAN
-----------------
For 41,809,911.3
Withheld 485,175.7
Broker non-votes 0
</TABLE>
2. APPROVAL OF THE ADOPTION OF THE RPM, INC. INCENTIVE COMPENSATION PLAN:
<TABLE>
<S> <C>
For 39,140,863.3
Against 2,058,535.7
Abstain 677,182.1
Broker non-votes 418,506.0
</TABLE>
For information on how the votes for the above matters have been
tabulated, see the Company's definitive Proxy Statement used in connection with
the Annual Meeting of Shareholders held on October 12, 1995.
<PAGE> 15
15
RPM, INC. AND SUBSIDIARIES
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 17
computation of per
share earnings
XXVII Financial Data Schedule
</TABLE>
(b) REPORTS ON FORM 8-K
-------------------
On September 18, 1995, pursuant to Item 7., the
Company filed certain updated financial information
with respect to the then proposed (and subsequently
completed) acquisition of Narragansett/DSI
Acquisition Company, Inc. ("NDSI"), on a Form 8-K/A-1
Current Report. On October 4, 1995, pursuant to Item
2., the Company filed a Form 8-K/A-2 Current Report
to report the closing of the acquisition of NDSI.
<PAGE> 16
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/ THOMAS C. SULLIVAN
---------------------------
Thomas C. Sullivan,
Chairman & Chief
Executive Officer
By /s/ FRANK C. SULLIVAN
---------------------------
Frank C. Sullivan
Chief Financial Officer
Date: January 15, 1996
<PAGE> 1
17
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) -----------
<TABLE>
<CAPTION>
SIX MONTHS ENDED NOVEMBER 30,
------------------------------
1995 1994 *
------------ -------------
<S> <C> <C>
Shares Outstanding
- ------------------
For computation of primary earnings per
common share
Weighted average shares 72,798 70,976
Net issuable common share equivalents 459 398
------ ------
Total shares for primary earnings
per share 73,257 71,374
For computation of fully-diluted earnings
per common share
Additional shares issuable assuming
conversion of convertible securities 9,767 9,767
Additional common shares equivalents;
ending market value higher than
average market value 83 0
------ ------
Total shares for fully-diluted
earnings per share 83,107 81,141
====== ======
Net Income
- ----------
Net income applicable to common shares for
primary earnings per share $35,436 $33,663
Add back interest net of tax on convertible
securities assumed to be converted 2,459 2,335
------ ------
Net income applicable to common shares for
fully-diluted earnings $37,895 $35,998
======= =======
Earnings Per Common Share and Common Share
Equivalents $.48 $.47
---- ----
Earnings Per Common Share Assuming Full
Dilution $.46 $.44
---- ----
<FN>
* Share data has been restated to reflect a 25% stock dividend paid December 8, 1995.
</TABLE>
The accompanying notes to consolidated financial statements are an integral
part of these statements
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLAR
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAY-31-1996
<PERIOD-START> JUN-01-1995
<PERIOD-END> NOV-30-1995
<EXCHANGE-RATE> 1
<CASH> 36,244
<SECURITIES> 11,631
<RECEIVABLES> 213,478
<ALLOWANCES> 10,958
<INVENTORY> 167,496
<CURRENT-ASSETS> 438,149
<PP&E> 385,086
<DEPRECIATION> 167,486
<TOTAL-ASSETS> 1,133,318
<CURRENT-LIABILITIES> 149,543
<BONDS> 466,898
<COMMON> 1,370
0
0
<OTHER-SE> 429,601
<TOTAL-LIABILITY-AND-EQUITY> 1,133,318
<SALES> 556,086
<TOTAL-REVENUES> 556,086
<CGS> 321,777
<TOTAL-COSTS> 481,645
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 12,706
<INCOME-PRETAX> 61,735
<INCOME-TAX> 26,299
<INCOME-CONTINUING> 35,436
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 35,436
<EPS-PRIMARY> .48
<EPS-DILUTED> .46
</TABLE>
