<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, 1996 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 (330) 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 10, 1997, 77,578,124 RPM, Inc. Common Shares were outstanding.
Exhibit Index on Page 13 of 15 pages.
<PAGE> 2
RPM, INC. AND SUBSIDIARIES
--------------------------
INDEX
-----
PART I. FINANCIAL INFORMATION Page No.
------------------------------ --------
Consolidated Balance Sheets
November 30, 1996 and May 31, 1996 3
Consolidated Statements of Income
Six Months and Three Months Ended
November 30, 1996 and 1995 4
Consolidated Statements of Cash Flows
Six Months Ended November 30, 1996 and 1995 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
---------------------------
<PAGE> 3
RPM, INC. AND SUBSIDIARIES 3
----------------------------
CONSOLIDATED BALANCE SHEETS
---------------------------
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
ASSETS
------
NOVEMBER 30, 1996 MAY 31, 1996
------------------ -----------------
<S> <C> <C>
CURRENT ASSETS
CASH $ 27,796 $ 19,855
MARKETABLE SECURITIES, AT COST 12,458 14,422
TRADE ACCOUNTS RECEIVABLE (LESS ALLOWANCE FOR DOUBT-
FUL ACCOUNTS $10,617 AND $9,993) 230,236 231,560
INVENTORIES 190,317 178,929
PREPAID EXPENSES 31,901 20,360
------------------ -----------------
TOTAL CURRENT ASSETS 492,708 465,126
------------------ -----------------
PROPERTY, PLANT AND EQUIPMENT, AT COST 417,809 399,580
LESS: ACCUMULATED DEPRECIATION AND AMORTIZATION 187,808 174,920
------------------ -----------------
PROPERTY, PLANT AND EQUIPMENT, NET 230,001 224,660
------------------ -----------------
OTHER ASSETS
COSTS OF BUSINESSES OVER NET ASSETS ACQUIRED 306,006 268,492
INTANGIBLE ASSETS 201,831 159,798
EQUITY IN UNCONSOLIDATED AFFILIATES 17,907 16,623
OTHER 25,141 20,377
------------------ -----------------
TOTAL OTHER ASSETS 550,885 465,290
------------------ -----------------
TOTAL ASSETS $1,273,594 $1,155,076
================== =================
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES
CURRENT PORTION OF LONG TERM DEBT $ 1,651 $ 1,747
ACCOUNTS PAYABLE 80,867 85,874
ACCRUED COMPENSATION AND BENEFITS 30,249 29,678
ACCRUED WARRANTY AND LOSS RESERVES 27,292 33,731
OTHER ACCRUED LIABILITIES 29,068 26,910
INCOME TAXES PAYABLE 10,818 11,464
------------------ -----------------
TOTAL CURRENT LIABILITIES 179,945 189,404
------------------ -----------------
LONG-TERM LIABILITIES
LONG-TERM DEBT, LESS CURRENT MATURITIES 528,620 447,654
OTHER LONG-TERM LIABILITIES 19,803 14,375
DEFERRED INCOME TAXES 76,204 57,810
------------------ -----------------
TOTAL LONG-TERM LIABILITIES 624,627 519,839
------------------ ----------------
SHAREHOLDERS' EQUITY
COMMON SHARES, STATED VALUE $.018 PER SHARE;
AUTHORIZED 100,000,000 SHARES;
ISSUED AND OUTSTANDING 77,537,000
AND 77,449,000 SHARES, RESPECTIVELY 1,410 1,410
PAID-IN CAPITAL 215,353 215,019
RETAINED EARNINGS 255,015 231,896
CUMULATIVE TRANSLATION ADJUSTMENT (2,756) (2,492)
------------------ -----------------
TOTAL SHAREHOLDERS' EQUITY 469,022 445,833
------------------ -----------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $1,273,594 $1,155,076
================= ================
</TABLE>
THE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ARE AN INTEGRAL PART
OF THESE STATEMENTS.
<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,
------------------------------------- ------------------------------------
1996 1995 1996 1995
---------------- ---------------- --------------- ----------------
RESTATED* RESTATED*
<S> <C> <C> <C> <C>
NET SALES $645,307 $564,356 $316,076 $281,402
COST OF SALES 368,565 327,263 182,030 163,950
---------------- ---------------- --------------- ----------------
GROSS PROFIT 276,742 237,093 134,046 117,452
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES 187,386 161,594 93,980 82,846
INTEREST EXPENSE, NET 15,462 12,787 7,834 6,640
---------------- ---------------- --------------- ----------------
INCOME BEFORE INCOME TAXES 73,894 62,712 32,232 27,966
PROVISION FOR INCOME TAXES 31,405 26,461 13,699 11,708
---------------- ---------------- --------------- ----------------
NET INCOME $ 42,489 $ 36,251 $ 18,533 $ 16,258
================ ================ =============== ================
EARNINGS PER COMMON SHARE AND COMMOM
SHARE EQUIVALENT (EXHIBIT 11.1)* $ 0.55 $ 0.48 $ 0.24 $ 0.22
================ ================ =============== ================
EARNINGS PER COMMON SHARE ASSUMING FULL
DILUTION (EXHIBIT 11.1)* $ 0.51 $ 0.45 $ 0.23 $ 0.21
================ ================ =============== ================
DIVIDENDS PER COMMON SHARE* $ 0.25 $ 0.23 $ 0.13 $ 0.12
================ ================ =============== ================
<FN>
* DATA FOR NOVEMBER 30, 1995 HAS BEEN RESTATED TO REFLECT THE JANUARY 12, 1996 ACQUISITION OF TCI, INC.
ACCOUNTED FOR UNDER THE POOLING-OF-INTERESTS METHOD.
</TABLE>
THE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ARE AN INTEGRAL
PART OF THESE STATEMENTS.
<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,
--------------------------------------------------
1996 1995
---------------------- ---------------------
RESTATED*
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
NET INCOME $42,489 $36,251
DEPRECIATION AND AMORTIZATION 23,236 21,866
ITEMS NOT AFFECTING CASH AND OTHER (6,561) (6,701)
CHANGES IN OPERATING WORKING CAPITAL (21,065) (4,323)
---------------------- ---------------------
38,099 47,093
---------------------- ---------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
ADDITIONS TO PROPERTY AND EQUIPMENT (13,053) (14,395)
ACQUISITION OF NEW BUSINESSES, NET OF CASH (78,335) (45,820)
---------------------- ---------------------
(91,388) (60,215)
---------------------- ---------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
PROCEEDS FROM STOCK OPTION EXERCISES 584 811
INCREASE (DECREASE) IN DEBT 80,016 46,562
DIVIDENDS (19,370) (17,781)
---------------------- ---------------------
61,230 29,592
---------------------- ---------------------
NET INCREASE (DECREASE) IN CASH 7,941 16,470
CASH AT BEGINNING OF PERIOD 19,855 19,834
---------------------- ---------------------
CASH AT END OF PERIOD $27,796 $36,304
====================== =====================
SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
- ---------------------------------------------------------------------
ISSUANCE OF SHARES IN CONNECTION WITH ACQUISITION OF NEW BUSINESS $0 $65,200
INTEREST ACCRETED ON LYONS 4,504 4,277
<FN>
*DATA FOR NOVEMBER 30, 1995 HAS BEEN RESTATED TO REFLECT THE JANUARY 12, 1996 ACQUISITION OF TCI, INC.
ACCOUNTED FOR UNDER THE POOLING-OF-INTERESTS METHOD.
</TABLE>
THE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ARE AN INTEGRAL PART
OF THESE STATEMENTS.
<PAGE> 6
6
RPM, INC. AND SUBSIDIARIES
--------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
-------------------------------------------
NOVEMBER 30, 1996
-----------------
(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, 1996 and
November 30, 1995. 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, 1996.
NOTE B - INVENTORIES
- --------------------
Inventories were composed of the following major classes:
<TABLE>
<CAPTION>
November 30, May 31,
1996 (1) 1996
------------ -------
<S> <C> <C>
Raw materials and supplies $ 69,132 $ 64,995
Finished goods $ 121,185 $ 113,934
--------- ---------
$ 190,317 $ 178,929
========= =========
<FN>
(1) Estimated, based on components at May 31, 1996
</TABLE>
NOTE C - ACQUISITIONS
- ---------------------
On August 10, 1995, the Company acquired all of the outstanding shares of
Star Finishing Products, Inc.
On September 21, 1995, the Company acquired all of the outstanding shares
of Dryvit Systems, Inc.
On June 13, 1996, the Company acquired all the outstanding shares of
Okura Holdings, Inc. for $73,000,000 in cash. Okura manufactures and
markets fiberglass reinforced plastic grating products. These
acquisitions as well as several small product line acquisitions have been
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, 1996 and
<PAGE> 7
7
RPM, INC. AND SUBSIDIARIES
--------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
-------------------------------------------
NOVEMBER 30, 1996
-----------------
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
NOTE C - ACQUISITIONS - Continued
- ---------------------
November 30, 1995. 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,
------------------- -------------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net Sales $646,532 $611,045 $316,076 $295,079
-------- -------- -------- --------
Net Income $ 42,435 $ 34,831 $ 18,533 $ 15,394
-------- -------- -------- --------
Earnings per common
share and common
share equivalent $.54 $.45 $.24 $.20
---- ---- ---- ----
Earnings per common
share assuming full
dilution $.51 $.43 $.23 $.19
---- ---- ---- ----
</TABLE>
NOTE D - SUBSEQUENT EVENTS
- --------------------------
On October 21, 1996, the Company signed a definitive agreement to
acquire, effective February 1, 1997, substantially all of Tremco, Inc.,
a B.F.Goodrich Company subsidiary that manufactures and sells roofing
systems, sealants and coatings. Tremco products are sold to customers
primarily in building, construction, building maintenance and retail
markets.
The acquisition will be accounted for by the purchase method of
accounting and the difference between the fair value of net assets
acquired and the purchase consideration will be allocated to goodwill.
The Company's financial statements will reflect the assets, liabilities
and operating results of Tremco from the date of acquisition forward.
<PAGE> 8
8
RPM, INC. AND SUBSIDIARIES
--------------------------
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
---------------------------------------
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
---------------------------------------------
SIX MONTHS ENDED NOVEMBER 30, 1996
----------------------------------
RESULTS OF OPERATIONS
- ---------------------
The Company's sales increased 12% in the second quarter and 14% in the
first six months of the current fiscal year compared to last year's
results.
The Company acquired Composite Structures International, Inc. (CSI),
formerly known as Okura Holdings, Inc., on June 13, 1996. With annual
sales of approximately $35 million, CSI is a leading global manufacturer
of molded and pultruded fiberglass reinforced plastic grating products,
used for pedestrian walkways, platforms, staircases and similar types of
industrial structures. CSI has posted a strong growth record under the
leading brand names Fibergrate and Chemgrate. CSI offers the Company an
attractive opportunity to capitalize on market, product and customer
synergies. This acquisition is not expected to be dilutive in 1997.
The CSI acquisition and that of Dryvit Systems, Inc. on September 21,
1995, along with several smaller acquisitions, net of several small
divestitures, accounted for just over half of the increase in sales in
the first six months, but less than 40% of the sales increase in the
second quarter, compared to last year. Existing operations generated the
balance of sales growth, slightly favoring the consumer lines and
predominantly from higher unit volume as pricing adjustments have
averaged less than 2% year-to-year. Exchange rate differences had a
slight negative effect on sales this year versus last.
The gross profit margin strengthened during the second quarter to 42.4%
from 41.7% a year ago, bringing the year-to-date comparison to 42.9%
from 42.0% last year. The majority of this improvement is the result of
the recent acquisitions, net of divestitures. The balance of the margin
improvement is the result of overall higher volume and favorable product
mix, certain lower raw material costs, and conversion cost controls.
The Company's selling, general and administrative expenses are shown
increasing to 29.7% of sales in the second quarter from 29.4% a year
ago, and to 29.0% after six months compared with 28.6% last year. During
the second quarter of last year, the Company had recovered approximately
$2 million from insurance carriers toward previously incurred
environmental costs. Excluding this item, these expenses
quarter-to-quarter have actually been reduced by .4% of sales among the
core businesses through higher volume, cost reduction initiatives, and
the timing of certain expenses. For the six month period, the insurance
recovery plus several other non-recurring expense reductions a year
ago, and the timing of certain expenses this year, caused a comparative
.7% of sales increase in this expense category, offset .3% by the
recent acquisitions, net of divestitures.
<PAGE> 9
9
RPM, INC. AND SUBSIDIARIES
--------------------------
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
---------------------------------------
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
---------------------------------------------
SIX MONTHS ENDED NOVEMBER 30, 1996
----------------------------------
The interest expense increase reflects the additional indebtedness
associated with Dryvit, CSI, and other acquisitions plus the LYONs
interest accretion. Debt reductions of approximately $25 million during
the past year and slightly lower interest rates reduced interest expense
comparatively.
The Company's net profit margin improved after six months to 6.6% of
sales from 6.4% a year ago and to 5.9% for the second quarter from 5.8%
a year ago as a result of the improved gross profit margin. Earnings per
share comparisons are affected by Company shares issued in connection
with the Dryvit acquisition. Data for November 1995 has been restated to
reflect the acquisition of TCI, Inc. on January 12, 1996, accounted for
under the pooling-of-interests method.
The Company's foreign sales and results of operations are subject to the
impact of foreign currency fluctuations. Since most of the Company's
foreign operations are in Belgium, and the Belgian franc has been a
fairly stable currency in relation to the majority of other currencies
in which those operations transact business, this effect has been
minimal. Foreign debt is denominated in the respective foreign currency,
thereby eliminating any related translation impact on earnings.
On October 21, 1996, the Company entered into a definitive agreement to
acquire substantially all of Tremco, Inc., a B.F.Goodrich Company
subsidiary headquartered in Cleveland, Ohio. Tremco manufactures and
sells roofing systems, sealants and coatings under the Tremco brand
name, selling primarily to the building, construction, building
maintenance and retail markets with annual sales of approximately $330
million. This purchase remains subject to completion of normal closing
matters, but is expected to be completed during the Company's third
fiscal quarter. This acquisition, if completed, has synergies with many
of the Company's operations but would weaken the Company's third
quarter earnings results due to seasonal conditions, and may be
slightly dilutive in 1997. Thereafter, Tremco is expected to be a
positive contributor to Company performance.
CAPITAL RESOURCES AND LIQUIDITY
- -------------------------------
CASH PROVIDED FROM OPERATIONS
The Company generated cash from operations of $38 million during the
first six months, compared with $47 million during the same period a
year ago. This difference is mainly the result of the temporary
accumulation of certain raw materials to take advantage of pricing
opportunities, and timing differences within prepaid expenses. Cash flow
from operations continues to be the primary source of financing the
Company's internal growth.
<PAGE> 10
10
RPM, INC. AND SUBSIDIARIES
--------------------------
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
---------------------------------------
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
---------------------------------------------
SIX MONTHS ENDED NOVEMBER 30, 1996
----------------------------------
INVESTING ACTIVITIES
The Company is not capital intensive, but invests in capital
expenditures primarily to improve production and distribution efficiency
and capacity. Such expenditures generally do not exceed depreciation and
amortization in a given year.
The Company invested $78 million in the purchase of CSI and several
smaller businesses this year, net of cash acquired. The Company
historically has acquired complementary businesses and this trend is
expected to continue.
FINANCING ACTIVITIES
On July 19, 1996, to finance the acquisition of CSI, the Company
renegotiated its revolving credit facility to $250 million and extended
its final maturity to 2001. This instrument had an outstanding balance
of $160 million at November 30, 1996.
As a result of the above transactions, the Company's debt-to-capital
ratio stands at 53% compared to 50% at May 31, 1996, while interest
coverage remains at over 5 times on a reported basis, over 7 times on a
cash basis. Notably, on a fully diluted basis, the Company's
debt-to-capital ratio drops to 35%. Working capital increased to $313
million from $276 million at May 31, 1996, $10 million of this
difference attributable to the recent acquisitions and divestitures.
The current ratio moved to 2.7:1 from 2.5:1, respectively.
The Company maintains excellent relations with its banks and other
financial institutions to further enable the financing of future growth
opportunities.
<PAGE> 11
11
RPM, INC. AND SUBSIDIARIES
--------------------------
PART II. - OTHER INFORMATION
----------------------------
ITEM 1 -- LEGAL PROCEEDINGS
- ---------------------------
Bondex International.
---------------------
As previously reported in the Company's Annual Report on Form
10-K for the fiscal year ended May 31, 1996, and as updated in the Company's
Quarterly Report on Form 10-Q for the quarter ended August 31, 1996, Bondex
International, Inc., a wholly-owned subsidiary of the Company ("Bondex") is one
of numerous corporate defendants in 432 then pending asbestos-related bodily
injury lawsuits filed on behalf of various individuals in various jurisdictions
in the United States. Subsequently, an additional 17 such cases have been filed.
Bondex continues to deny liability in all 449 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.
Dryvit.
-------
As previously reported in the Company's Annual Report on Form
10-K for the fiscal year-end May 31, 1996, and as updated in the Company's
Quarterly Report on Form 10- Q for the quarter ended August 31, 1996, Dryvit
Systems, Inc., a wholly-owned subsidiary of the Company ("Dryvit"), is a
co-defendant in several separate but related lawsuits, some of which have sought
to certify classes comprised of owners of structures clad with exterior
insulation finish systems ("EIFS") products manufactured by Dryvit and other
EIFS manufacturers. On September 18, 1996, the North Carolina court presiding
over one of the State Court cases, RUFF ET AL. V. PAREX, INC., ET AL.
(96-CVS-0059), entered an order certifying a class of North Carolina owners of
single family or multi-family residential dwellings which had an EIFS system
installed during the period 1969 to present. On October 4, 1996, the Judicial
Panel on Multi-District Litigation ordered that the nine pending federal court
actions be transferred to the Eastern District Court of North Carolina for
coordinated or consolidated pre- trial proceedings. Subsequent to that order,
one additional federal court case, HILLMAN V. DRYVIT SYSTEMS, INC., ET AL.
(3-96-1096) was filed in U.S. District Court for the District of Minnesota.
Pursuant to the Multi-District Litigation Rules, that case has been consolidated
with the other nine cases under the designation IN RE: STUCCO LITIGATION.
Dryvit's insurers are paying Dryvit's defense costs, including attorneys fees
and expenses as well as expert witness fees. Dryvit, through a joint defense
arrangement, continues to contest the remaining class certification requests and
challenge the merits of the plaintiffs' claims. As a result of efforts by Dryvit
and other defendants' insurance carriers, Dryvit will be participating, along
with other EIFS manufacturers, builders, window suppliers and others, in a
mediation process coordinated through the CPR Institute for Dispute Resolution.
<PAGE> 12
12
ITEM 4 -- SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
- --------------------------------------------------------------
The Annual Meeting of Shareholders of the Company was held on October
18, 1996. The following matters were voted on at the meeting.
RPM, INC. AND SUBSIDIARIES
--------------------------
PART II. - OTHER INFORMATION
----------------------------
1. Election of Dr. Max D. Amstutz, E. Bradley Jones, John H. Morris,
Jr. and Albert B. Ratner as Directors of the Company. The
nominees were elected as Directors with the following votes:
Dr. Max D. Amstutz
------------------
For 66,771,478
Withheld 359,953
Broker non-votes -0-
E. Bradley Jones
----------------
For 66,679,026
Withheld 452,405
Broker non-votes -0-
John H. Morris, Jr.
-------------------
For 66,761,839
Withheld 369,592
Broker non-votes -0-
Albert B. Ratner
----------------
For 66,411,924
Withheld 719,507
Broker non-votes -0-
2. Approval and adoption of the RPM, Inc. 1996 Key Employees Stock
Option Plan:
For 59,740,181
Against 5,860,881
Abstain 774,214
Broker non-votes 756,155
<PAGE> 13
13
RPM, INC. AND SUBSIDIARIES
--------------------------
PART II. - OTHER INFORMATION
----------------------------
3. Approval of Amendment to the Amended Articles of Incorporation to
increase the number of authorized Common Shares of the Company from
100,000,000 to 200,000,000:
For 63,457,559
Against 2,775,829
Abstain 536,244
Broker non-votes 361,799
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 on October 18, 1996.
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
- -----------------------------------------
(a) Exhibits
--------
Official Exhibit Sequential
Number Description Page Number
---------------- ------------------- -----------
11.1 Statement regarding 15
computation of per share
earnings
27 Financial Data Schedule
(b) Reports on Form 8-K
-------------------
The Company filed a Current Report on Form 8-K, dated October
21, 1996, with the SEC to report the issuance of a press release
announcing the signing of the definitive agreement by the
Company and the B.F.Goodrich Company for the Company to
acquire substantially all of Tremco, Inc.
<PAGE> 14
14
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
Chief Executive Officer
By /s/ Frank C. Sullivan
----------------------
Frank C. Sullivan
Chief Financial Officer
Date: 1/14/97
<PAGE> 1
RPM, INC. AND SUBSIDIARIES 15
--------------------------
CONSOLIDATED STATEMENTS OF COMPUTATIONS OF EARNINGS
---------------------------------------------------
PER COMMON SHARE AND COMMON SHARE EQUIVALENTS
---------------------------------------------
(Unaudited)
(In thousands, except per share amounts)
Exhibit 11.1
------------
<TABLE>
<CAPTION>
Six Months Ended Three Months Ended
November 30, November 30,
----------------------------- ------------------------------
1996 1995 1996 1995
------------- -------------- --------------- --------------
(Restated) (Restated)
<S> <C> <C> <C> <C>
SHARES OUTSTANDING
For computation of primary earnings per
common share
Weighted average shares 77,481 74,904 77,503 74,904
Net issuable common share equivalents 443 459 517 459
------------- -------------- --------------- --------------
Total shares for primary earnings
per share 77,924 75,363 78,020 75,363
For computation of fully-diluted earnings
per common share
Additional shares issuable assuming
conversion of convertible securities 9,767 9,767 9,767 9,767
Additional common shares equivalents;
ending market value higher than
average market value 214 83 144 83
------------- -------------- --------------- --------------
Total shares for fully-diluted
earnings per share 87,905 85,213 87,931 85,213
============= ============== =============== ==============
NET INCOME
Net income applicable to common shares
for primary earnings per share $42,489 $36,251 $18,533 $16,258
Add back interest net of tax on convertible
securities assumed to be converted 2,590 2,459 1,306 1,219
------------- -------------- --------------- --------------
Net income applicable to common shares for
fully-diluted earnings $45,079 $38,710 $19,839 $17,477
============= ============== =============== ==============
Earnings Per Common Share and Common
Share Equivalents $.55 $.48 $.24 $.22
==== ==== ==== ====
Earnings Per Common Share Assuming Full
Dilution $.51 $.45 $.23 $.21
==== ==== ==== ====
<FN>
*Data for November 30, 1995 has been restated to reflect the January 12, 1996 acquistion of TCI, Inc.
accounted for under the pooling-of-interests method.
</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. DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAY-31-1997
<PERIOD-START> JUN-01-1996
<PERIOD-END> NOV-30-1996
<EXCHANGE-RATE> 1
<CASH> 27,796
<SECURITIES> 12,458
<RECEIVABLES> 240,853
<ALLOWANCES> 10,617
<INVENTORY> 190,317
<CURRENT-ASSETS> 492,708
<PP&E> 417,809
<DEPRECIATION> 187,808
<TOTAL-ASSETS> 1,273,594
<CURRENT-LIABILITIES> 179,945
<BONDS> 528,620
<COMMON> 1,410
0
0
<OTHER-SE> 467,612
<TOTAL-LIABILITY-AND-EQUITY> 1,273,594
<SALES> 645,307
<TOTAL-REVENUES> 645,307
<CGS> 368,565
<TOTAL-COSTS> 555,951
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<INCOME-PRETAX> 73,894
<INCOME-TAX> 31,405
<INCOME-CONTINUING> 42,489
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 42,489
<EPS-PRIMARY> 0.55
<EPS-DILUTED> 0.51
</TABLE>
