RPM International

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RPM International Inc
Public
Traded as NYSERPM
S&P 400 Component
Industry Paint
Coatings
Industrial coatings
Building Materials
Sealants
Adhesives
Founded 1947 as Republic Powdered Metals Inc.
Headquarters Medina, Ohio, United States
Key people
Frank C. Sullivan Chairman and CEO
Ronald A. Rice President and COO
John P. Abizaid Member, Board of Directors
Revenue Increase$4.8 billion USD (2016)
Increase$474.7 million USD (2016)
Increase$354.7 million USD (2016)
Total assets Increase$4.8 billion USD (2016)
Total equity Increase$1.4 billion USD (2016)
Number of employees
13,000 (2016)
Website www.RPMinc.com
Footnotes / references
[1]

RPM International Inc is an American multinational company with subsidiaries that manufacture and market high-performance specialty coatings, sealants and building materials. Industrial brands include Stonhard, Tremco, illbruck, Carboline, Flowcrete, Universal Sealants, Euco, Day-Glo and Dryvit. RPM's consumer products are used by professionals and do-it-yourselfers for home maintenance and improvement and by hobbyists. Consumer brands include Zinsser, Rust-Oleum, DAP, Varathane and Testors.[2]

The company has approximately 13,000 employees worldwide who work in 120 manufacturing facilities in 24 countries.[2] Its products are sold in 170 countries and territories.[1] It is the sixth largest paint and coating company in the world.[3]

RPM is publicly traded on the New York Stock Exchange under the symbol RPM. Its shares are owned by more than 500 institutions and 108,000 individual investors.[1] It ranks among the top 200 in total shares held by BetterInvesting investment clubs.[4] RPM has increased its cash dividend paid to stockholders for 43 consecutive years.[5] Only 44 other companies, besides RPM, have consecutively paid an increasing annual dividend for this period of time or longer, according to the fall 2016 edition of the Mergent Handbook of Dividend Achievers.[6]

Over the ten-year period from May 31, 2006, to 2016, RPM has outperformed the S&P 500 by 86 percent in total return generated for its shareholders, which includes both capital appreciation and reinvestment of dividends.[1]

Segments[edit]

RPM operates through three segments:[2]

  • Industrial segment products are sold throughout North America and account for the majority of RPM’s international sales. Industrial product lines are sold directly to contractors, distributors and end-users, such as owners of industrial manufacturing facilities, public institutions and other commercial customers. The industrial segment generated $2.4 billion (51%) of RPM’s net sales for the fiscal year ended May 31, 2016. It includes the following major product lines:[7]
    • Waterproofing, coatings and institutional roofing systems
    • Sealants, air barriers, tapes and foams that seal joints in construction assemblies
    • Residential home weatherization systems
    • Specialized roofing and building maintenance services
    • Sealing and bonding solutions for windows, facades, interiors and exteriors
    • Flooring, waterproofing and glazing solutions
    • Solutions for passive fire protection
    • High-performance polymer flooring systems
    • Fiberglass reinforced plastic gratings and shapes
    • High-performance, heavy-duty corrosion-control coatings, containment linings, fireproofing and soundproofing products
    • Rolled asphalt roofing materials, waterproofing products, chemical admixtures and industrial epoxy flooring systems
    • Concrete and masonry admixtures, concrete fibers, curing and sealing compounds, structural grouts, epoxy adhesives,
    • Floor hardeners and toppings, joint fillers
    • Bridge expansion joints and deck membranes, curb and channel drains, highway markings, protective coatings and concrete repair
  • Specialty segment products are sold throughout North America and a few international locations, primarily in Europe. Specialty product lines are sold directly to contractors, distributors and end-users, such as industrial manufacturing facilities, public institutions and other commercial customers. The specialty segment generated $732.1 million (15%) of RPM’s net sales for the 2016 fiscal year. It includes the following major product lines:[7]
    • Fluorescent colorants and pigments
    • Shellac-based-specialty coatings for industrial and pharmaceutical uses, edible glazes, food coatings and ingredients
    • Insulated building cladding materials (Exterior Insulating and Finishing Systems, “EIFS”)
    • Fire and water damage restoration products
    • Professional carpet cleaning and disinfecting products
    • Fuel additives
    • Wood treatments, furniture finishes and touch-up products
    • Pleasure marine coatings
    • Powder coatings
  • The consumer segment manufactures and markets professional use and do-it-yourself products for a variety of consumer applications, including home improvement and personal leisure activities. The consumer segment’s major manufacturing and distribution operations are located primarily in North America, along with a few locations in Europe, Australia, South Africa and South America. Its products are sold directly to mass merchandisers, home improvement centers, hardware stores, paint stores, craft shops, cosmetic companies and distributors. The consumer segment generated $1.6 billion (34%) of RPM’s net sales in fiscal 2016. It is composed of the following major product lines:[7]
    • Coating products to protect and decorate a wide variety of surfaces for the DIY and professional markets
    • Products for surface preparation, mold and mildew prevention, wallpaper removal and application, and waterproofing
    • Deck and fence restoration products
    • Metallic and faux finish coatings
    • Exterior wood deck and concrete restoration systems
    • Hobby paints and cements
    • Caulks, sealants, adhesives, insulating foam, spackling, glazing and other patch and repair products
    • Nail care enamel polish and coating components

History[edit]

In May 1947, Frank C. Sullivan founded Republic Powdered Metals, the forerunner to RPM International Inc. The company manufactured and sold a heavy-duty aluminum roof coating called Alumanation, which is still sold today. Sales in the first year reached $90,000. From the beginning Sullivan determined that the success of the business would rest with its people. “Hire the best people you can find,” he said. “Create an atmosphere that will keep them. Then, let them do their jobs.” RPM operates under this same philosophy today. Every year under his leadership, the company attained sales and earnings increases.[8]

In August 1971, Frank Sullivan died suddenly. Later that same year, RPM, Inc. was formed to become a holding company to develop a more aggressive acquisition program in a rapidly consolidating paint and coatings industry. Frank’s son, Thomas C. Sullivan, who was previously president of Republic Powdered Metals, became chairman and chief executive officer of the holding company. He and James A. Karman, who was elected president and chief operating officer in 1978, led RPM for more than three decades.[8]

After more than 30 years at the company’s helm, Sullivan and Karman retired as executive officers of the company in 2002. During their tenure, net sales increased to $2 billion from $11 million, net income increased to $101.6 million from $0.6 million, cash dividends per share increased to $0.50 from $0.0035 (split-adjusted), and a $1,000 investment in RPM shares in 1971 would have been worth more than $100,000.[9]

Tom was succeeded by his son, Frank C. Sullivan, who became president and chief executive officer in 2002. He has continued to lead the company in a manner consistent with the legacy created by his father and grandfather before him. RPM’s strategy for growth remains to: establish and maintain brand leadership in the markets it serves, strike a balance between industrial and consumer markets, generate growth both organically and through acquisitions, and to maintain an entrepreneurial operating culture.

Recent legal problems[edit]

In August 2013, RPM paid $61 million to settle U.S. General Services Administration claims regarding a subsidiary's overcharging the U.S. government on roofing contracts.[10]

In June 2014, the SEC launched an investigation into the timing of RPM’s disclosure and accrual of loss reserves involving the GSA settlement. The company subsequently restated its results for the first, second and third quarters of fiscal 2013. The restatements had no impact on its audited results for the fiscal year ended May 31, 2013.[11]

On September 9, 2016, the SEC charged RPM and its general counsel, Edward W. Moore, with violating antifraud provisions of Federal securities laws by failing to disclose a material loss. According to the SEC's complaint Moore did not inform RPM's CEO, CFO, audit committee and independent auditors of material facts about the U.S. Department of Justice investigation into the GSA issue.[12] The company believes the allegations are without merit and intends to defend itself in court.[13]

References[edit]

  1. ^ a b c d "RPM International Inc. 2016 Annual Report". U.S.: RPM International Inc. 24 August 2016. 
  2. ^ a b c "RPM International Inc. Overview". RPM International Inc. Retrieved 14 September 2016. 
  3. ^ "Coatings World Top Companies Report". Rodman Publishing. 7 July 2016. 
  4. ^ "BetterInvesting Magazine Top 100 Companies" (PDF). BetterInvesting. April 2016. 
  5. ^ "RPM Increases Cash Dividend for 43rd Consecutive Year". RPM International Inc. Retrieved 15 November 2016. 
  6. ^ Mergent Handbook of Dividend Achievers, U.S.: Mergent Inc., October 2016, ISBN 978-1630538057 
  7. ^ a b c "Form 10-K". RPM International Inc. Retrieved 15 November 2016. 
  8. ^ a b Jon VanZile, ed. (2002). The Heritage and Values of RPM Inc. Fort Lauderdale, FL: Write Stuff Enterprises Inc. p. 144. ISBN 0-945903-73-1. 
  9. ^ RPM International Inc. 2002 Annual Report, U.S., 29 August 2002 
  10. ^ "RPM and Tremco Pay Over $60 Million to Settle False Claims Act Lawsuit". Retrieved 14 September 2016. 
  11. ^ "RPM Reports Record Fourth-Quarter And Year-End Results For Fiscal 2014". RPM International Inc. Retrieved 14 September 2016. 
  12. ^ "Case 1:16-cv-01803 Document 1 Filed 09/09/16Case 1:16-cv-01803 Document 1 Filed 09/09/16" (PDF). SEC. The United States District Court for the District of Columbia. Retrieved 14 September 2016. 
  13. ^ "Form 8-K". RPM International Inc. Retrieved 14 September 2016. 

External links[edit]

Industrial Segment Companies[edit]

Specialty Segment Companies[edit]

Consumer Segment Companies[edit]