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RPM INTERNATIONAL INC/DE/ false 0000110621 0000110621 2026-10-06 2026-10-06
 
 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) October 6, 2026

 

 

RPM INTERNATIONAL INC.

(Exact name of registrant as specified in its charter)

 

 

 

Delaware   1-14187   02-0642224
(State or other jurisdiction
of incorporation)
 

(Commission

File Number)

 

(IRS Employer

Identification No.)

 

2628 Pearl Road, Medina, Ohio   44256
(Address of principal executive offices)   (Zip Code)

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

 

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

 

 

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

 

☐

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

 

☐

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

 

☐

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

 

☐

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

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading
Symbol(s)

 

Name of each exchange
on which registered

Common Stock, par value $0.01   RPM   New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 
 


Item 2.02

Results of Operations and Financial Condition.

On October 6, 2026, RPM International Inc. (the “Company”) issued a press release announcing its first quarter results, which provided detail not included in previously issued reports. A copy of the press release is furnished with this Current Report on Form 8-K as Exhibit 99.1. Financial information supplemental to the press release is furnished with this Current Report on Form 8-K as Exhibit 99.2.

 

Item 9.01

Financial Statements and Exhibits.

(d) Exhibits.

 

Exhibit
Number

  

Description

99.1    Press Release of the Company, dated October 6, 2026, announcing the Company’s first quarter results.
99.2    Supplemental Financial Information
104    Cover Page Interactive Data File (embedded within the Inline XBRL document)


SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

      RPM International Inc.
      (Registrant)
Date October 6, 2026    
     

/s/ Tracy D. Crandall

      Tracy D. Crandall
     

Vice President, General Counsel, Chief Compliance

Officer and Secretary

EX-99.1 2 d80757dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

 

LOGO

RPM Reports Record Fiscal 2027 First-Quarter Results

 

  •  

Record first-quarter sales of $2.22 billion increased 4.8% compared to the prior year

 

  •  

Net income of $256.4 million and diluted EPS of $2.01

 

  •  

Record adjusted diluted EPS of $1.98 increased 5.3% and record adjusted EBITDA of $405.5 million increased 4.5% compared to the prior year

 

  •  

Fiscal 2027 second-quarter outlook projects sales and adjusted EBITDA to increase in the low- to mid-single-digit range

 

  •  

Fiscal 2027 full-year outlook projects sales and adjusted EBITDA to increase in the mid-single-digit range

MEDINA, OH – October 6, 2026 – RPM International Inc. (NYSE: RPM), a world leader in specialty coatings, sealants and building materials, today reported financial results for its fiscal 2027 first quarter ended August 31, 2026.

Frank C. Sullivan, RPM Chairman and CEO, said, “The resilience of our associates and business model was on full display in the first quarter as we generated another quarter of record sales and adjusted EBITDA. Solid organic growth in our Performance Coatings Group and Consumer Group, and a focus on manufacturing, procurement and SG&A efficiencies overcame multiple challenges, including raw material inflation and a temporary slowdown in our Construction Products Group. This record profitability, combined with improved working capital efficiency, also allowed us to generate another quarter of strong operating cash flow, which we are using to invest in growth opportunities and reward shareholders with dividends and share repurchases.”

First-Quarter 2027 Consolidated Results

Organization and Reporting Update

Effective June 1, 2026, the company modified its organizational structure to manage and report certain businesses in Latin America in PCG. The businesses generate approximately $143 million in annual revenue and were previously part of CPG and Consumer Group. Starting with the first fiscal quarter of 2027, results reflect the updated structure for both current and prior periods presented. These changes have no impact on consolidated results. Recast quarterly results for fiscal year 2026 reflecting this change have been provided in a Form 8-K filed with the SEC.


RPM Reports Results for Fiscal 2027 1st Quarter

October 6, 2026

Page 2

 

Consolidated

 

     Three Months Ended                
$ in 000s except per share data    August 31,      August 31,         
     2026      2025      $ Change      % Change  

Net Sales

   $ 2,215,593      $ 2,113,743      $ 101,850        4.8 % 

Net Income Attributable to RPM Stockholders

     256,357        227,605        28,752        12.6 % 

Diluted EPS

     2.01        1.77        0.24        13.6 % 

Income Before Income Taxes (IBT)

     337,053        298,047        39,006        13.1 % 

Adjusted EBITDA (1)

     405,457        388,048        17,409        4.5 % 

Adjusted Diluted EPS(1)

     1.98        1.88        0.10        5.3 % 

 

(1)

Excludes certain items that are not indicative of RPM’s ongoing operations. See tables below titled Supplemental Segment Information and Reconciliation of Reported to Adjusted Amounts for details.

Record first-quarter sales were driven by solid organic growth in the PCG and Consumer segments, including pricing to offset inflation. Acquisitions also contributed to the growth.

Geographically, all emerging market regions generated revenue increases above 20%, fueled by strong demand for engineered solutions used in high-performance buildings and infrastructure projects and the continued expansion of RPM’s Platform model, which leverages shared regional resources to accelerate growth and improve efficiency. North American growth was driven by PCG and Consumer improvement. Growth in Europe was driven by acquisitions.

Sales included 3.1% organic growth, 1.6% growth from acquisitions net of divestitures, and a 0.1% tailwind from foreign currency translation.

Adjusted EBITDA increased to a record, driven by higher sales and MAP operational improvement initiatives, including SG&A optimization. Healthcare expenses were lower compared to the prior year, driven by procurement efforts to lower prescription drug costs. These gains more than offset higher raw material inflation, warranty expenses from a small European business that is under review for closure, and bad debt expense from a customer bankruptcy.

Record adjusted diluted EPS was primarily driven by improved adjusted EBITDA.


RPM Reports Results for Fiscal 2027 1st Quarter

October 6, 2026

Page 3

 

First-Quarter 2027 Segment Sales and Earnings

Construction Products Group

 

     Three Months Ended                
$ in 000s    August 31,      August 31,                
     2026      2025      $ Change      % Change  

Net Sales

   $ 859,209      $ 851,997      $ 7,212        0.8 % 

Income Before Income Taxes

     149,110        159,184        (10,074 )       (6.3 %) 

Adjusted EBITDA(1)

     166,193        183,944        (17,751 )       (9.7 %) 

 

(1)

Excludes certain items that are not indicative of RPM’s ongoing operations. See table below titled Supplemental Segment Information for details.

Lower than expected CPG sales growth was driven by delayed sales resulting from a slowdown in the healthcare and education markets, as well as supplier raw material availability issues affecting certain products. The Kalzip acquisition and pricing actions in response to inflation offset these headwinds.

Sales included a 1.7% organic decline and 2.5% growth from acquisitions net of divestitures.

Adjusted EBITDA declined due to lower fixed-cost absorption from reduced volumes, raw material inflation driven by supply shortages, a $4.4 million increase in bad debt expense related to a customer bankruptcy, and a $6.3 million warranty charge at a small European business under review for closure. SG&A optimization initiatives partially offset these headwinds.

Performance Coatings Group

 

     Three Months Ended                
$ in 000s    August 31,      August 31,                
     2026      2025      $ Change      % Change  

Net Sales

   $ 629,650      $ 571,593      $ 58,057        10.2 % 

Income Before Income Taxes

     107,302        86,795        20,507        23.6 % 

Adjusted EBITDA(1)

     121,073        102,416        18,657        18.2 % 

 

(1)

Excludes certain items that are not indicative of RPM’s ongoing operations. See table below titled Supplemental Segment Information for details.

Record PCG sales were driven by broad-based growth, with particular strength in engineered solutions for high-performance buildings, energy and infrastructure projects including in emerging markets, and food coatings and ingredients. Pricing to offset inflation also contributed to sales growth.

Sales included 7.9% organic growth, a 1.8% increase from acquisitions, and a 0.5% benefit from foreign currency translation.

Record adjusted EBITDA was driven by improved sales, higher volumes resulting in improved fixed-cost leverage, and SG&A-focused optimization actions, partially offset by higher raw material inflation.


RPM Reports Results for Fiscal 2027 1st Quarter

October 6, 2026

Page 4

 

Consumer Group

 

     Three Months Ended                
$ in 000s    August 31,      August 31,                
     2026      2025      $ Change      % Change  

Net Sales

   $ 726,734      $ 690,153      $ 36,581        5.3 % 

Income Before Income Taxes

     132,279        108,837        23,442        21.5 % 

Adjusted EBITDA(1)

     146,576        138,968        7,608        5.5 % 

 

(1)

Excludes certain items that are not indicative of RPM’s ongoing operations. See table below titled Supplemental Segment Information for details.

The Consumer Group’s record sales were driven by solid growth across all businesses and were aided by shelf space wins, new product introductions and pricing to offset inflation, which was higher in the quarter.

Sales included 5.2% organic growth, 0.3% growth from acquisitions, and a 0.2% headwind from foreign currency translation.

The increase in adjusted EBITDA was driven by sales growth and higher volumes resulting in improved fixed-cost utilization, and was further aided by MAP operational improvements, including SG&A-focused optimization actions.

Income before taxes included a $10.8 million gain on the sale of a facility that was closed as part of RPM’s MAP 2025 program. This gain has been excluded from adjusted EBITDA.

Cash Flow and Financial Position

During the first three months of fiscal 2027:

 

  •  

Cash provided by operating activities was $263.9 million, compared to $237.5 million in the prior-year period, with the increase driven by improved working capital efficiency.

 

  •  

Capital expenditures were $58.5 million compared to $62.5 million in the prior-year period.

 

  •  

The company returned $90.5 million to stockholders through cash dividends and share repurchases, an increase of 10.2% compared to the prior year.

As of August 31, 2026:

 

  •  

Total debt was $2.41 billion compared to $2.67 billion a year ago, with the decrease driven by strong operating cash flow being used to reduce debt.

 

  •  

Total liquidity, including cash and committed revolving credit facilities, was $1.21 billion, compared to $933.4 million a year ago.


RPM Reports Results for Fiscal 2027 1st Quarter

October 6, 2026

Page 5

 

Investor Day Webcast Information

The company will host an investor day on November 9, 2026, at its Stonhard facility in New Jersey. Scheduled speakers include Frank Sullivan, RPM Chairman and CEO; David Dennsteadt, RPM President and COO; Russell Gordon, RPM Vice President and CFO; and Gregory Michael, Performance Coatings Group President. The presentation will be provided prior to the event, and a public webcast will be available at https://www.rpminc.com/investors/presentations-webcasts/. The webcast is expected to start at approximately 12:00 p.m. ET. A replay of the event will be available.

Volteco Acquisition

As previously announced, the company acquired Volteco, an Italy-based leading supplier of below-grade waterproofing solutions, for its Construction Products Group. Volteco had calendar year 2025 sales of €28 million.

Business Outlook

Sullivan continued, “Segment trends in the second quarter are expected to be similar to those in the first with the PCG segment leading growth as it benefits from its success with expanding the Platform emerging-market operating model and good end-market demand. Continued stabilization in the Consumer Group is also anticipated, while CPG demand remains soft. MAP benefits and selling price increases will help to offset gross margin pressure from higher inflation and start-up costs at new facilities. In the second half of the year, we expect to benefit from the continued implementation of MAP operational improvements and pricing increases to offset persistent inflation and more challenging comparisons. We also anticipate that CPG will return to positive organic growth by the end of the year.”

The company’s outlook for the fiscal 2027 second quarter is for:

 

  •  

Consolidated sales to increase in the low- to mid-single-digit range compared to prior-year results.

 

  •  

CPG sales to increase in the low-single-digit range compared to prior-year results.

 

  •  

PCG sales to increase in the mid- to high-single-digit range compared to prior-year results.

 

  •  

Consumer Group sales to increase in the low- to mid-single-digit range compared to prior-year results.

 

  •  

Consolidated adjusted EBITDA to increase in the low- to mid-single-digit range compared to prior-year results.

The company’s outlook for fiscal 2027 is for:

 

  •  

Consolidated sales to increase in the mid-single-digit range compared to prior-year record results. The previous outlook was for 3% to 7% growth.

 

  •  

Consolidated adjusted EBITDA to increase in the mid-single-digit range compared to prior-year record results. The previous outlook was for 5% to 10% growth.


RPM Reports Results for Fiscal 2027 1st Quarter

October 6, 2026

Page 6

 

Earnings Webcast and Conference Call Information

Management will host a conference call to discuss these results beginning at 10:00 a.m. ET today. The call can be accessed via webcast at www.RPMinc.com/Investors/Presentations-Webcasts or by dialing 1-844-481-2915 or 1-412-317-0708 for international callers and asking to join the RPM International call. Participants are asked to call the assigned number approximately 10 minutes before the conference call begins. The call, which will last approximately one hour, will be open to the public, but only financial analysts will be permitted to ask questions. The media and all other participants will be in a listen-only mode.

For those unable to listen to the live call, a replay will be available from October 6, 2026, until October 13, 2026. The replay can be accessed by dialing 1-855-669-9658 or 1-412-317-0088 for international callers. The access code is 8131253. The call also will be available for replay and as a written transcript via the RPM website at www.RPMinc.com.

About RPM

RPM International Inc. owns subsidiaries that are world leaders in specialty coatings, sealants, building materials and related services. The company operates across three reportable segments: consumer, construction products and performance coatings. RPM has a diverse portfolio of market-leading brands, including Rust-Oleum, DAP, Zinsser, Varathane, The Pink Stuff, Stonhard, Carboline, FinishWorks, Tremco, Euclid Chemical, Dryvit and Nudura. From homes and workplaces to infrastructure and precious landmarks, RPM’s brands are trusted by consumers and professionals alike to help build a better world. The company employs approximately 17,500 individuals worldwide. Visit www.RPMinc.com to learn more.

For more information, contact Matt Schlarb, Vice President – Investor Relations & Sustainability, at 330-220-6064 or mschlarb@rpminc.com.

# # #

Use of Non-GAAP Financial Information

To supplement the financial information presented in accordance with Generally Accepted Accounting Principles in the United States (“GAAP”) in this earnings release, we use EBIT, adjusted EBIT, adjusted EBITDA and adjusted earnings per share, which are all non-GAAP financial measures. EBIT is defined as earnings (loss) before interest and taxes, with Adjusted EBIT provided for the purpose of adjusting for items impacting earnings that are not considered by management to be indicative of ongoing operations. We evaluate the profit performance of our segments based on income before income taxes, but also look to EBIT, or adjusted EBIT, as a performance evaluation measure because Interest Income (Expense), Net is essentially related to corporate functions, as opposed to segment operations. For that reason, we believe EBIT is also useful to investors as a metric in their investment decisions. EBIT should not be considered an alternative to, or more meaningful than, income before income taxes as determined in accordance with GAAP, since EBIT omits the impact of interest and investment income or expense in determining operating performance, which represent items necessary to our continued operations, given our level of indebtedness. Nonetheless, EBIT is a key measure expected by and useful to our fixed income investors, rating agencies and the banking community all of whom believe, and we concur, that this measure is critical to the capital markets’ analysis of our segments’ core operating performance. We also evaluate EBIT because it is clear that movements in EBIT impact our ability to attract financing. Additionally, Management believes that investors’ understanding of the Company’s operating performance is enhanced by the disclosure of Adjusted EBITDA, which is a non-GAAP financial measure defined as earnings (loss) before interest, taxes, depreciation and amortization adjusted for


RPM Reports Results for Fiscal 2027 1st Quarter

October 6, 2026

Page 7

 

items impacting earnings that are not considered by management to be indicative of ongoing operations. We evaluate the profit performance of our segments based on income before income taxes, but also look to adjusted EBITDA, as a performance evaluation measure because Interest Income (Expense), Net is essentially related to corporate functions, as opposed to segment operations. Additionally, Adjusted EBITDA is an operating measure that provides investors with a measure of operating results unaffected by differences in capital structures, capital investment cycles and ages of related assets among otherwise comparable companies. For these reasons, we believe Adjusted EBITDA is also useful to investors as a metric in their investment decisions. The reader is cautioned that the Company’s Adjusted EBITDA should not be compared to other entities unknowingly. Adjusted EBITDA should not be considered an alternative to, or more meaningful than, income before income taxes as determined in accordance with GAAP. EBIT, adjusted EBIT and adjusted EBITDA may not be indicative of our historical operating results, nor is it meant to be predictive of potential future results. See the financial statement section of this earnings release for a reconciliation of EBIT, adjusted EBIT and adjusted EBITDA to income before income taxes, and adjusted earnings per share to earnings per share. We have not provided a reconciliation of our second-quarter and full-year fiscal 2027 adjusted EBITDA guidance because material terms that impact such measure are not in our control and/or cannot be reasonably predicted, and therefore a reconciliation of such measure is not available without unreasonable effort.

Forward-Looking Statements

This press release includes forward-looking statements relating to our business. These forward-looking statements, or other statements made by us, are made based on our expectations and beliefs concerning future events impacting us and are subject to uncertainties and factors (including those specified below), which are difficult to predict and, in many instances, are beyond our control. As a result, our actual results could differ materially from those expressed in or implied by any such forward-looking statements. These uncertainties and factors include (a) global and regional markets and general economic conditions, including uncertainties surrounding the volatility in financial markets, the availability of capital and the viability of banks and other financial institutions; (b) the prices, supply and availability of raw materials, including assorted pigments, resins, solvents, and other natural gas- and oil-based materials; packaging, including plastic and metal containers; and transportation services, including fuel surcharges; (c) continued growth in demand for our products; (d) legal, environmental and litigation risks inherent in our businesses and risks related to the adequacy of our insurance coverage for such matters; (e) the effect of changes in interest rates; (f) the effect of fluctuations in currency exchange rates upon our foreign operations; (g) changes in global trade policies, including the adoption or expansion of tariffs and trade barriers; (h) the effect of non-currency risks of investing in and conducting operations in foreign countries, including those relating to domestic and international political, social, economic and regulatory factors; (i) risks and uncertainties associated with our ongoing acquisition and divestiture activities; (j) the timing of and the realization of anticipated cost savings from restructuring initiatives, the ability to identify additional cost savings opportunities, and the risks of failing to meet any other objectives of our improvement plans; (k) risks related to the adequacy of our contingent liability reserves; (l) risks relating to a public health crisis similar to the Covid pandemic; (m) risks related to acts of war similar to the Middle East conflict and the Russian invasion of Ukraine; (n) risks related to the transition or physical impacts of climate change and other natural disasters or meeting sustainability-related voluntary goals or regulatory requirements; (o) risks related to our or our third parties’ use of technology including AI, data breaches and data privacy violations; (p) the shift to remote work and online purchasing and the impact that has on residential and commercial real estate construction; and (q) other risks detailed in our filings with the Securities and Exchange Commission, including the risk factors set forth in our Annual Report on Form 10-K for the year ended May 31, 2026, as the same may be updated from time to time. We do not undertake any obligation to publicly update or revise any forward-looking statements to reflect future events, information or circumstances that arise after the filing date of this press release.


RPM Reports Results for Fiscal 2027 1st Quarter

October 6, 2026

Page 8

 

CONSOLIDATED STATEMENTS OF INCOME

IN THOUSANDS, EXCEPT PER SHARE DATA

(Unaudited)

 

     Three Months Ended  
     August 31,     August 31,  
     2026     2025  

Net Sales

   $ 2,215,593     $ 2,113,743  

Cost of Sales

     1,301,631       1,220,527  
  

 

 

   

 

 

 

Gross Profit

     913,962       893,216  

Selling, General & Administrative Expenses

     559,768       573,534  

Restructuring Expense

     5,157       8,814  

Interest Expense

     25,535       29,326  

Investment (Income), Net

     (7,518 )      (13,404 ) 

Other (Income), Net

     (6,033 )      (3,101 ) 
  

 

 

   

 

 

 

Income Before Income Taxes

     337,053       298,047  

Provision for Income Taxes

     80,427       70,207  
  

 

 

   

 

 

 

Net Income

     256,626       227,840  

Less: Net Income Attributable to Noncontrolling Interests

     269       235  
  

 

 

   

 

 

 

Net Income Attributable to RPM International Inc. Stockholders

   $ 256,357     $ 227,605  
  

 

 

   

 

 

 

Earnings per share of common stock attributable to RPM International Inc. Stockholders:

    

Basic

   $ 2.02     $ 1.78  
  

 

 

   

 

 

 

Diluted

   $ 2.01     $ 1.77  
  

 

 

   

 

 

 

Average shares of common stock outstanding - basic

     126,744       127,283  
  

 

 

   

 

 

 

Average shares of common stock outstanding - diluted

     127,240       127,950  
  

 

 

   

 

 

 


RPM Reports Results for Fiscal 2027 1st Quarter

October 6, 2026

Page 9

 

SUPPLEMENTAL SEGMENT INFORMATION 

IN THOUSANDS 

(Unaudited) 

 

     Three Months Ended  
     August 31,     August 31,  
     2026     2025  

Net Sales:

    

CPG Segment

   $ 859,209     $ 851,997  

PCG Segment

     629,650       571,593  

Consumer Segment

     726,734       690,153  
  

 

 

   

 

 

 

Total

   $ 2,215,593     $ 2,113,743  
  

 

 

   

 

 

 

Income Before Income Taxes:

    

CPG Segment

    

Income Before Income Taxes (a)

   $ 149,110     $ 159,184  

Interest (Expense), Net (b)

     (896 )      (1,623 ) 
  

 

 

   

 

 

 

EBIT (c)

     150,006       160,807  

MAP initiatives (d)

     1,292       5,180  

(Gain) on acquisition earn-out fair value adjustments (f)

     (4,700 )      —   
  

 

 

   

 

 

 

Adjusted EBIT

     146,598       165,987  

Depreciation (h)

     16,928       15,431  

Amortization (i)

     2,667       2,526  
  

 

 

   

 

 

 

Adjusted EBITDA (j)

   $ 166,193     $ 183,944  
  

 

 

   

 

 

 

PCG Segment

    

Income Before Income Taxes (a)

   $ 107,302     $ 86,795  

Interest Income, Net (b)

     1,716       1,730  
  

 

 

   

 

 

 

EBIT (c)

     105,586       85,065  

MAP initiatives (d)

     2,503       4,937  

Inventory step-up costs (e)

     57       —   

(Gain) on acquisition earn-out fair value adjustments (f)

     (245 )      —   
  

 

 

   

 

 

 

Adjusted EBIT

     107,901       90,002  

Depreciation (h)

     9,883       9,382  

Amortization (i)

     3,289       3,032  
  

 

 

   

 

 

 

Adjusted EBITDA (j)

   $ 121,073     $ 102,416  
  

 

 

   

 

 

 

Consumer Segment

    

Income Before Income Taxes (a)

   $ 132,279     $ 108,837  

Interest (Expense), Net (b)

     (118 )      (272 ) 
  

 

 

   

 

 

 

EBIT (c)

     132,397       109,109  

MAP initiatives (d)

     (4,930 )      3,752  

Inventory step-up costs (e)

     —        7,117  
  

 

 

   

 

 

 

Adjusted EBIT

     127,467       119,978  

Depreciation (h)

     13,110       13,203  

Amortization (i)

     5,999       5,787  
  

 

 

   

 

 

 

Adjusted EBITDA (j)

   $ 146,576     $ 138,968  
  

 

 

   

 

 

 

Corporate/Other

    

(Loss) Before Income Taxes (a)

   $ (51,638 )    $ (56,769 ) 

Interest (Expense), Net (b)

     (18,719 )      (15,757 ) 
  

 

 

   

 

 

 

EBIT (c)

     (32,919 )      (41,012 ) 

MAP initiatives (d)

     2,573       2,837  

Deferred compensation (g)

     1,120       —   
  

 

 

   

 

 

 

Adjusted EBIT

     (29,226 )      (38,175 ) 

Depreciation (h)

     803       772  

Amortization (i)

     38       123  
  

 

 

   

 

 

 

Adjusted EBITDA (j)

   $ (28,385 )    $ (37,280 ) 
  

 

 

   

 

 

 

TOTAL CONSOLIDATED

    

Income Before Income Taxes (a)

   $ 337,053     $ 298,047  

Interest (Expense)

     (25,535 )      (29,326 ) 

Investment Income, Net

     7,518       13,404  
  

 

 

   

 

 

 

EBIT (c)

     355,070       313,969  

MAP initiatives (d)

     1,438       16,706  

Inventory step-up costs (e)

     57       7,117  

(Gain) on acquisition earn-out fair value adjustments (f)

     (4,945 )      —   

Deferred compensation (g)

     1,120       —   
  

 

 

   

 

 

 

Adjusted EBIT

     352,740       337,792  

Depreciation (h)

     40,724       38,788  

Amortization (i)

     11,993       11,468  
  

 

 

   

 

 

 

Adjusted EBITDA (j)

   $ 405,457     $ 388,048  
  

 

 

   

 

 

 

 

(a)

The presentation includes a reconciliation of Income (Loss) Before Income Taxes, a measure defined by Generally Accepted Accounting Principles in the United States (GAAP), to EBIT, Adjusted EBIT and Adjusted EBITDA.

(b)

Interest Income (Expense), Net includes the combination of Interest Income (Expense) and Investment Income (Expense), Net.


RPM Reports Results for Fiscal 2027 1st Quarter

October 6, 2026

Page 10

 

(c)

EBIT is defined as earnings (loss) before interest and taxes, with Adjusted EBIT provided for the purpose of adjusting for items impacting earnings that are not considered by management to be indicative of ongoing operations. We evaluate the profit performance of our segments based on income before income taxes, but also look to EBIT, or adjusted EBIT, as a performance evaluation measure because Interest Income (Expense), Net is essentially related to corporate functions, as opposed to segment operations. For that reason, we believe EBIT is also useful to investors as a metric in their investment decisions. EBIT should not be considered an alternative to, or more meaningful than, income before income taxes as determined in accordance with GAAP, since EBIT omits the impact of interest and investment income or expense in determining operating performance, which represent items necessary to our continued operations, given our level of indebtedness. Nonetheless, EBIT is a key measure expected by and useful to our fixed income investors, rating agencies and the banking community all of whom believe, and we concur, that this measure is critical to the capital markets’ analysis of our segments’ core operating performance. We also evaluate EBIT because it is clear that movements in EBIT impact our ability to attract financing. EBIT may not be indicative of our historical operating results, nor is it meant to be predictive of potential future results.

(d)

Reflects restructuring and other charges, which have been incurred in relation to our Margin Achievement Plan (“MAP 2025”) and our 2026 restructuring action, together MAP Initiatives, as follows:

- MAP 2025 Restructuring and other related expense, net: Includes charges incurred related to headcount reductions and facility closures recorded in “Restructuring Expense” on the Consolidated Statements of Income. Restructuring Expense related to MAP 2025 totaled $0.7 million and $8.8 million for the three months ended August 31, 2026 and August 31, 2025 respectively. Other related expenses include inventory write-offs in connection with restructuring activities recorded in “Cost of Sales” and accelerated depreciation and amortization recorded within “Cost of Sales” or “Selling, General, & Administrative Expenses (“SG&A”)” depending on the nature of the expense.

- 2026 Restructuring and other related expense, net: Includes charges incurred related to headcount reductions and facility closures associated with the SG&A-focused optimization actions and other early stage MAP 3.0 actions recorded in “Restructuring Expense” on the Consolidated Statements of Income. Restructuring Expense related to the 2026 restructuring action totaled $4.5 million for the quarter ended August 31, 2026. Other related expenses consist of higher executive departure costs, including accelerated stock compensation expense, that do not qualify as restructuring expense and are recorded within “SG&A” as well as accelerated depreciation recorded within “Cost of Sales” or “SG&A” depending on the nature of the expense. Other related expenses also includes inventory write-offs in connection with restructuring activities recorded in “Cost of Sales”.

- ERP consolidation plan: Includes expenses incurred as a result of our stated goals to consolidate over 75 ERP systems across the organization to one ERP platform per segment, as part of our overall MAP strategy as well as costs incurred for other decision support tools to facilitate our commercial initiatives related to MAP 2025 which have been incurred in all segments, as well as Corporate/Other, and have been recorded within “SG&A”.

- Professional fees: Includes expenses incurred to consolidate accounting locations, costs incurred to implement technologies and processes to drive improved data analytics/decision making and cost incurred to implement new global manufacturing methodologies with the goal of improving operating efficiency incurred within all of our segments as well as Corporate/Other and recorded within “SG&A”.All of this spend is in support of stated MAP goals with the most significant expense incurred within Corporate/Other.

- (Gain) on sale of closed facilities, net: Net gain recognized related to the sale of certain properties within the PCG and Consumer Segments which were closed as part of the MAP 2025 program.

Included below is a reconciliation of the TOTAL CONSOLIDATED MAP initiatives.

 

     Three Months Ended  
     August 31,      August 31,  
     2026      2025  

MAP 2025 Restructuring and other related expense, net

   $ 732      $ 10,599  

2026 Restructuring and other related expense, net

     5,522        —   

ERP consolidation plan

     1,809        2,966  

Professional fees

     4,128        3,141  

(Gain) on sale of closed facilities, net

     (10,753 )       —   
  

 

 

    

 

 

 

MAP initiatives

   $ 1,438      $ 16,706  
  

 

 

    

 

 

 

 

(e)

Amortization of inventory fair value adjustments related to acquisitions recorded in “Cost of Sales”.

 

(f)

Fair value adjustments of the earn-out liabilities associated with two small acquisitions, which were recorded in “SG&A”. Management does not consider these gains to be reflective of the company’s core business operations.

 

(g)

This adjustment eliminates the compensation expense impact from market valuation changes in deferred compensation liabilities. Although not included in this schedule, the company also adjusts the related net gains (losses) on investments used as economic hedges against the related liabilities. The liabilities are adjusted based on the performance of hypothetical investments selected by participants. Management believes it is useful to offset the non-operating investment income (loss) of the investments against the related compensation expense and remove the net impact to help the reader’s ability to understand the company’s core operating results and to increase comparability period to period.

 

(h)

Depreciation expense includes charges to income that result from property, plant and equipment depreciation and the amortization of assets recorded under finance leases recorded within “Cost of Sales” or “SG&A” depending on the nature of the expense. This excludes accelerated depreciation related to MAP initiatives.

 

(i)

Amortization expense includes intangible asset amortization as well as amortization of deferred cloud computing implementation costs.

 

(j)

Management believes that investors’ understanding of the Company’s operating performance is enhanced by the disclosure of Adjusted EBITDA, which is a non-GAAP financial measure defined as earnings (loss) before interest, taxes, depreciation and amortization adjusted for items impacting earnings that are not considered by management to be indicative of ongoing operations. We evaluate the profit performance of our segments based on income before income taxes, but also look to adjusted EBITDA, as a performance evaluation measure because Interest Income (Expense), Net is essentially related to corporate functions, as opposed to segment operations. Additionally, Adjusted EBITDA is an operating measure that provides investors with a measure of operating results unaffected by differences in capital structures, capital investment cycles and ages of related assets among otherwise comparable companies. For these reasons, we believe Adjusted EBITDA is also useful to investors as a metric in their investment decisions. The reader is cautioned that the Company’s Adjusted EBITDA should not be compared to other entities unknowingly. Adjusted EBITDA should not be considered an alternative to, or more meaningful than, income before income taxes as determined in accordance with GAAP.


RPM Reports Results for Fiscal 2027 1st Quarter

October 6, 2026

Page 11

 

SUPPLEMENTAL INFORMATION

RECONCILIATION OF “REPORTED” TO “ADJUSTED” AMOUNTS

(Unaudited)

 

     Three Months Ended  
     August 31,     August 31,  
     2026     2025  

Reconciliation of Reported Earnings per Diluted Share to Adjusted Earnings per Diluted Share (All amounts presented after-tax):

    

Reported Earnings per Diluted Share

   $ 2.01     $ 1.77  

MAP initiatives (d)

     0.01       0.10  

Inventory step-up costs (e)

     —        0.04  

(Gain) on acquisition earn-out fair value adjustments (f)

     (0.03 )      —   

Investment returns (g)

     (0.01 )      (0.03 ) 
  

 

 

   

 

 

 

Adjusted Earnings per Diluted Share (k)

   $ 1.98     $ 1.88  
  

 

 

   

 

 

 

 

(d)

Reflects restructuring and other charges, which have been incurred in relation to our Margin Achievement Plan (“MAP 2025”) and our 2026 restructuring action, together MAP Initiatives, as follows:

- MAP 2025 Restructuring and other related expense, net: Includes charges incurred related to headcount reductions and facility closures recorded in “Restructuring Expense” on the Consolidated Statements of Income. Restructuring Expense related to MAP 2025 totaled $0.7 million and $8.8 million for the three months ended August 31, 2026 and August 31, 2025 respectively. Other related expenses include inventory write-offs in connection with restructuring activities recorded in “Cost of Sales” and accelerated depreciation and amortization recorded within “Cost of Sales” or “Selling, General, & Administrative Expenses (“SG&A”)” depending on the nature of the expense.

- 2026 Restructuring and other related expense, net: Includes charges incurred related to headcount reductions and facility closures associated with the SG&A-focused optimization actions and other early stage MAP 3.0 actions recorded in “Restructuring Expense” on the Consolidated Statements of Income. Restructuring Expense related to the 2026 restructuring action totaled $4.5 million for the quarter ended August 31, 2026. Other related expenses consist of higher executive departure costs, including accelerated stock compensation expense, that do not qualify as restructuring expense and are recorded within “SG&A” as well as accelerated depreciation recorded within “Cost of Sales” or “SG&A” depending on the nature of the expense. Other related expenses also includes inventory write-offs in connection with restructuring activities recorded in “Cost of Sales”.

- ERP consolidation plan: Includes expenses incurred as a result of our stated goals to consolidate over 75 ERP systems across the organization to one ERP platform per segment, as part of our overall MAP strategy as well as costs incurred for other decision support tools to facilitate our commercial initiatives related to MAP 2025 which have been incurred in all segments, as well as Corporate/Other, and have been recorded within “SG&A”.

- Professional fees: Includes expenses incurred to consolidate accounting locations, costs incurred to implement technologies and processes to drive improved data analytics/decision making and cost incurred to implement new global manufacturing methodologies with the goal of improving operating efficiency incurred within all of our segments as well as Corporate/Other and recorded within “SG&A”. All of this spend is in support of stated MAP goals with the most significant expense incurred within Corporate/Other.

- (Gain) on sale of closed facilities, net: Net gain recognized related to the sale of certain properties within the PCG and Consumer Segments which were closed as part of the MAP 2025 program.

 

 

(e)

Amortization of inventory fair value adjustments related to acquisitions recorded in “Cost of Sales”.

 

(f)

Fair value adjustments of the earn-out liabilities associated with two small acquisitions, which were recorded in “SG&A”. Management does not consider these gains to be reflective of the company’s core business operations.

 

(g)

Investment returns include realized net gains and losses on sales of investments and unrealized net gains and losses on equity securities, which are adjusted due to their inherent volatility. Management does not consider these gains and losses, which cannot be predicted with any level of certainty, to be reflective of the Company’s core business operations.

 

(k)

Adjusted Diluted EPS is provided for the purpose of adjusting diluted earnings per share for items impacting earnings that are not considered by management to be indicative of ongoing operations.


RPM Reports Results for Fiscal 2027 1st Quarter

October 6, 2026

Page 12

 

CONSOLIDATED BALANCE SHEETS

IN THOUSANDS

(Unaudited)

 

     August 31, 2026     August 31, 2025     May 31, 2026  

Assets

      

Current Assets

      

Cash and cash equivalents

   $ 312,842     $ 297,075     $ 315,188  

Trade accounts receivable

     1,556,199       1,515,499       1,700,717  

Allowance for doubtful accounts

     (38,236 )      (42,506 )      (39,179 ) 

Net trade accounts receivable

     1,517,963       1,472,993       1,661,538  

Inventories

     1,140,432       1,068,183       1,058,911  

Prepaid expenses and other current assets

     405,141       365,271       423,198  
  

 

 

   

 

 

   

 

 

 

Total current assets

     3,376,378       3,203,522       3,458,835  
  

 

 

   

 

 

   

 

 

 

Property, Plant and Equipment, at Cost

     2,952,267       2,805,421       2,919,058  

Allowance for depreciation

     (1,399,118 )      (1,306,637 )      (1,362,540 ) 
  

 

 

   

 

 

   

 

 

 

Property, plant and equipment, net

     1,553,149       1,498,784       1,556,518  
  

 

 

   

 

 

   

 

 

 

Other Assets

      

Goodwill

     1,686,520       1,657,612       1,688,164  

Other intangible assets, net of amortization

     813,600       832,195       824,638  

Operating lease right-of-use assets

     389,937       394,831       396,936  

Deferred income taxes

     113,035       147,436       116,474  

Other

     298,019       210,165       303,040  
  

 

 

   

 

 

   

 

 

 

Total other assets

     3,301,111       3,242,239       3,329,252  
  

 

 

   

 

 

   

 

 

 

Total Assets

   $ 8,230,638     $ 7,944,545     $ 8,344,605  
  

 

 

   

 

 

   

 

 

 

Liabilities and Stockholders’ Equity

      

Current Liabilities

      

Accounts payable

   $ 889,731     $ 762,013     $ 853,524  

Current portion of long-term debt

     407,497       7,434       407,834  

Accrued compensation and benefits

     185,200       189,846       307,299  

Accrued losses

     49,019       30,749       51,258  

Other accrued liabilities

     391,253       424,834       441,148  
  

 

 

   

 

 

   

 

 

 

Total current liabilities

     1,922,700       1,414,876       2,061,063  
  

 

 

   

 

 

   

 

 

 

Long-Term Liabilities

      

Long-term debt, less current maturities

     1,999,028       2,661,990       2,125,690  

Operating lease liabilities

     334,729       340,420       341,283  

Other long-term liabilities

     256,569       243,524       258,641  

Deferred income taxes

     237,280       227,141       244,823  
  

 

 

   

 

 

   

 

 

 

Total long-term liabilities

     2,827,606       3,473,075       2,970,437  
  

 

 

   

 

 

   

 

 

 

Total liabilities

     4,750,306       4,887,951       5,031,500  
  

 

 

   

 

 

   

 

 

 

Stockholders’ Equity

      

Preferred stock; none issued

     —        —        —   

Common stock (outstanding 127,554; 128,219; 127,643)

     1,276       1,282       1,276  

Paid-in capital

     1,220,252       1,183,272       1,210,651  

Treasury stock, at cost

     (1,067,754 )      (973,372 )      (1,036,645 ) 

Accumulated other comprehensive (loss)

     (446,690 )      (512,832 )      (447,200 ) 

Retained earnings

     3,771,739       3,356,848       3,583,451  
  

 

 

   

 

 

   

 

 

 

Total RPM International Inc. stockholders’ equity

     3,478,823       3,055,198       3,311,533  

Noncontrolling interest

     1,509       1,396       1,572  
  

 

 

   

 

 

   

 

 

 

Total equity

     3,480,332       3,056,594       3,313,105  
  

 

 

   

 

 

   

 

 

 

Total Liabilities and Stockholders’ Equity

   $ 8,230,638     $ 7,944,545     $ 8,344,605  
  

 

 

   

 

 

   

 

 

 


RPM Reports Results for Fiscal 2027 1st Quarter

October 6, 2026

Page 13

 

CONSOLIDATED STATEMENTS OF CASH FLOWS 

IN THOUSANDS 

(Unaudited) 

 

     Three Months Ended  
     August 31,     August 31,  
     2026     2025  

Cash Flows From Operating Activities:

    

Net income

   $ 256,626     $ 227,840  

Adjustments to reconcile net income to net cash provided by operating activities:

    

Depreciation and amortization

     53,075       51,464  

Fair value adjustments to contingent earnout obligations

     (4,945 )      —   

Deferred income taxes

     (3,817 )      1,304  

Stock-based compensation expense

     9,601       5,475  

Net (gain) on marketable securities

     (2,032 )      (8,673 ) 

Net (gain) of sales of assets

     (10,505 )      —   

Other

     244       (324 ) 

Changes in assets and liabilities, net of effect from purchases and sales of businesses:

    

Decrease in receivables

     142,204       49,331  

(Increase) in inventory

     (81,609 )      (16,005 ) 

(Increase) in prepaid expenses and other current and long-term assets

     (9,868 )      (18,051 ) 

Increase in accounts payable

     57,344       7,810  

(Decrease) in accrued compensation and benefits

     (121,260 )      (99,296 ) 

(Decrease) in accrued losses

     (2,320 )      (6,098 ) 

(Decrease) increase in other accrued liabilities

     (18,802 )      42,733  
  

 

 

   

 

 

 

Cash Provided By Operating Activities

     263,936       237,510  
  

 

 

   

 

 

 

Cash Flows From Investing Activities:

    

Capital expenditures

     (58,505 )      (62,461 ) 

Acquisition of businesses, net of cash acquired

     —        (115,695 ) 

Purchase of marketable securities

     (10,243 )      (6,283 ) 

Proceeds from sales of marketable securities

     1,526       1,525  

Proceeds from sales of assets

     27,634       —   

Other

     (238 )      523  
  

 

 

   

 

 

 

Cash (Used For) Investing Activities

     (39,826 )      (182,391 ) 
  

 

 

   

 

 

 

Cash Flows From Financing Activities:

    

Additions to long-term and short-term debt

     148,886       35,000  

Reductions of long-term and short-term debt

     (276,448 )      (14,972 ) 

Cash dividends

     (68,069 )      (64,521 ) 

Repurchases of common stock

     (22,386 )      (17,500 ) 

Shares of common stock returned for taxes

     (8,987 )      (1,921 ) 

Other

     (278 )      (221 ) 
  

 

 

   

 

 

 

Cash (Used For) Financing Activities

     (227,282 )      (64,135 ) 
  

 

 

   

 

 

 

Effect of Exchange Rate Changes on Cash and Cash Equivalents

     826       3,954  
  

 

 

   

 

 

 

Net Change in Cash and Cash Equivalents

     (2,346 )      (5,062 ) 

Cash and Cash Equivalents at Beginning of Period

     315,188       302,137  
  

 

 

   

 

 

 

Cash and Cash Equivalents at End of Period

   $ 312,842     $ 297,075  
  

 

 

   

 

 

 
EX-99.2 3 d80757dex992.htm EX-99.2 EX-99.2

Exhibit 99.2

SUPPLEMENTAL SEGMENT INFORMATION

IN THOUSANDS

(Unaudited)

 

     Three Months Ended     Year Ended  
     August 31,     November 30,     February 28,     May 31,     May 31,  
     2025     2025     2026     2026     2026  

Net Sales:

          

CPG Segment

   $ 851,997     $ 706,304     $ 518,531     $ 865,203     $ 2,942,035  

PCG Segment

     571,593       569,650       528,053       605,679       2,274,975  

Consumer Segment

     690,153       633,941       561,365       760,953       2,646,412  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

   $ 2,113,743     $ 1,909,895     $ 1,607,949     $ 2,231,835     $ 7,863,422  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income Before Income Taxes:

          

CPG Segment

          

Income Before Income Taxes (a)

   $ 159,184     $ 91,007     $ 20,008     $ 162,191     $ 432,390  

Interest (Expense), Net (b)

     (1,623 )      (1,871 )      (1,516 )      (995 )      (6,005 ) 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

EBIT (c)

     160,807       92,878       21,524       163,186       438,395  

MAP initiatives (d)

     5,180       3,500       6,701       7,236       22,617  

Inventory step-up costs (e)

     —        —        —        102       102  

(Gain) on sale of assets and businesses, net (f)

     —        (400 )      —        —        (400 ) 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBIT

     165,987       95,978       28,225       170,524       460,714  

Depreciation (j)

     15,431       16,132       15,643       17,615       64,821  

Amortization (k)

     2,526       2,548       2,598       2,700       10,372  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA (l)

   $ 183,944     $ 114,658     $ 46,466     $ 190,839     $ 535,907  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

PCG Segment

          

Income Before Income Taxes (a)

   $ 86,795     $ 86,018     $ 63,345     $ 89,348     $ 325,506  

Interest Income, Net (b)

     1,730       1,915       1,865       1,556       7,066  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

EBIT (c)

     85,065       84,103       61,480       87,792       318,440  

MAP initiatives (d)

     4,937       2,022       6,921       2,571       16,451  

Inventory step-up costs (e)

     —        41       101       49       191  

(Gain) on acquisition earn-out fair value adjustment (g)

     —        —        —        (1,710 )      (1,710 ) 

Environmental expense for a closed facility (h)

     —        —        —        1,000       1,000  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBIT

     90,002       86,166       68,502       89,702       334,372  

Depreciation (j)

     9,382       9,381       9,545       10,121       38,429  

Amortization (k)

     3,032       3,134       3,216       3,340       12,722  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA (l)

   $ 102,416     $ 98,681     $ 81,263     $ 103,163     $ 385,523  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Consumer Segment

          

Income Before Income Taxes (a)

   $ 108,837     $ 99,908     $ 46,306     $ 106,870     $ 361,921  

Interest (Expense), Net (b)

     (272 )      (118 )      (83 )      (251 )      (724 ) 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

EBIT (c)

     109,109       100,026       46,389       107,121       362,645  

MAP initiatives (d)

     3,752       1,206       12,500       6,224       23,682  

Inventory step-up costs (e)

     7,117       786       —        —        7,903  

(Gain) on acquisition earn-out fair value adjustments (g)

     —        (12,707 )      —        —        (12,707 ) 

Property, plant and equipment impairment (i)

     —        —        —        9,721       9,721  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBIT

     119,978       89,311       58,889       123,066       391,244  

Depreciation (j)

     13,203       13,432       13,943       14,336       54,914  

Amortization (k)

     5,787       5,896       6,001       5,948       23,632  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA (l)

   $ 138,968     $ 108,639     $ 78,833     $ 143,350     $ 469,790  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Corporate/Other

          

(Loss) Before Income Taxes (a)

   $ (56,769 )    $ (65,938 )    $ (60,352 )    $ (66,418 )    $ (249,477 ) 

Interest (Expense), Net (b)

     (15,757 )      (17,905 )      (15,034 )      (16,296 )      (64,992 ) 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

EBIT (c)

     (41,012 )      (48,033 )      (45,318 )      (50,122 )      (184,485 ) 

MAP initiatives (d)

     2,837       3,210       6,102       5,430       17,579  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBIT

     (38,175 )      (44,823 )      (39,216 )      (44,692 )      (166,906 ) 

Depreciation (j)

     772       741       767       808       3,088  

Amortization (k)

     123       124       66       38       351  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA (l)

   $ (37,280 )    $ (43,958 )    $ (38,383 )    $ (43,846 )    $ (163,467 ) 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

TOTAL CONSOLIDATED

          

Income Before Income Taxes (a)

   $ 298,047     $ 210,995     $ 69,307     $ 291,991     $ 870,340  

Interest (Expense)

     (29,326 )      (28,005 )      (26,947 )      (27,266 )      (111,544 ) 

Investment Income, Net

     13,404       10,026       12,179       11,280       46,889  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

EBIT (c)

     313,969       228,974       84,075       307,977       934,995  

MAP initiatives (d)

     16,706       9,938       32,224       21,461       80,329  

Inventory step-up costs (e)

     7,117       827       101       151       8,196  

(Gain) on sale of assets and businesses, net (f)

     —        (400 )      —        —        (400 ) 

(Gain) on acquisition earn-out fair value adjustments (g)

     —        (12,707 )      —        (1,710 )      (14,417 ) 

Environmental expense for a closed facility (h)

     —        —        —        1,000       1,000  

Property, plant and equipment impairment (i)

     —        —        —        9,721       9,721  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBIT

     337,792       226,632       116,400       338,600       1,019,424  

Depreciation (j)

     38,788       39,686       39,898       42,880       161,252  

Amortization (k)

     11,468       11,702       11,881       12,026       47,077  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA (l)

   $ 388,048     $ 278,020     $ 168,179     $ 393,506     $ 1,227,753  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 


(a)

The presentation includes a reconciliation of Income (Loss) Before Income Taxes, a measure defined by Generally Accepted Accounting Principles in the United States (GAAP), to EBIT, Adjusted EBIT and Adjusted EBITDA.

 

(b)

Interest Income (Expense), Net includes the combination of Interest Income (Expense) and Investment Income (Expense), Net.

 

(c)

EBIT is defined as earnings (loss) before interest and taxes, with Adjusted EBIT provided for the purpose of adjusting for items impacting earnings that are not considered by management to be indicative of ongoing operations. We evaluate the profit performance of our segments based on income before income taxes, but also look to EBIT, or adjusted EBIT, as a performance evaluation measure because Interest Income (Expense), Net is essentially related to corporate functions, as opposed to segment operations. For that reason, we believe EBIT is also useful to investors as a metric in their investment decisions. EBIT should not be considered an alternative to, or more meaningful than, income before income taxes as determined in accordance with GAAP, since EBIT omits the impact of interest and investment income or expense in determining operating performance, which represent items necessary to our continued operations, given our level of indebtedness. Nonetheless, EBIT is a key measure expected by and useful to our fixed income investors, rating agencies and the banking community all of whom believe, and we concur, that this measure is critical to the capital markets’ analysis of our segments’ core operating performance. We also evaluate EBIT because it is clear that movements in EBIT impact our ability to attract financing. EBIT may not be indicative of our historical operating results, nor is it meant to be predictive of potential future results.

 

(d)

Reflects restructuring and other charges, which have been incurred in relation to our Margin Achievement Plan (“MAP 2025”) and our 2026 restructuring action, together MAP Initiatives, as follows:

- MAP 2025 Restructuring and other related expense, net: Includes charges incurred related to headcount reductions and facility closures recorded in “Restructuring Expense” on the Consolidated Statements of Income. Restructuring Expense related to MAP 2025 totaled $8.8 million, $4.5 million, $3.0 million and $1.9 million for the quarters ended August 31, 2025, November 30, 2025, February 28, 2026 and May 31, 2026 respectively and $18.2 million for the year ended May 31, 2026. Other related expenses include inventory write-offs in connection with restructuring activities recorded in “Cost of Sales” and accelerated depreciation and amortization recorded within “Cost of Sales” or “Selling, General, & Administrative Expenses (“SG&A”)” depending on the nature of the expense.

- 2026 Restructuring and other related expense, net: Includes charges incurred related to headcount reductions and facility closures associated with the SG&A-focused optimization actions and other early stage MAP 3.0 actions recorded in “Restructuring Expense” on the Consolidated Statements of Income. Restructuring Expense related to the 2026 restructuring action totaled $16.9 million and $7.5 million for the quarters ended February 28, 2026 and May 31, 2026 respectively and $24.4 million for the year ended May 31, 2026. Other related expenses consist of higher executive departure costs, including accelerated stock compensation expense, that do not qualify as restructuring expense and are recorded within “SG&A” as well as accelerated depreciation recorded within “Cost of Sales” or “SG&A” depending on the nature of the expense. Other related expenses also includes inventory write-offs in connection with restructuring activities recorded in “Cost of Sales”.

- ERP consolidation plan: Includes expenses incurred as a result of our stated goals to consolidate over 75 ERP systems across the organization to one ERP platform per segment, as part of our overall MAP strategy as well as costs incurred for other decision support tools to facilitate our commercial initiatives related to MAP 2025 which have been incurred in all segments, as well as Corporate/Other, and have been recorded within “SG&A”.

- Professional fees: Includes expenses incurred to consolidate accounting locations, costs incurred to implement technologies and processes to drive improved data analytics/decision making and cost incurred to implement new global manufacturing methodologies with the goal of improving operating efficiency incurred within all of our segments as well as Corporate/Other and recorded within “SG&A”. All of this spend is in support of stated MAP goals with the most significant expense incurred within Corporate/Other.

- (Gain) on sale of closed facilities, net: Net gain recognized related to the sale of certain properties within the PCG and Consumer Segments which were closed as part of the MAP 2025 program.

Included below is a reconciliation of the TOTAL CONSOLIDATED MAP initiatives.

 

     Three Months Ended     Year Ended  
     August 31,
2025
     November 30,
2025
    February 28,
2026
     May 31,
2026
    May 31,
2026
 

MAP 2025 Restructuring and other related expense, net

   $ 10,599      $ 6,637     $ 3,132      $ 2,691     $ 23,059  

2026 Restructuring and other related expense, net

     —         —        22,110        9,972       32,082  

ERP consolidation plan

     2,966        4,440       3,643        2,690       13,739  

Professional fees

     3,141        3,201       3,229        7,749       17,320  

(Gain) loss on sale of closed facilities, net

     —         (4,340 )      110        (1,641 )      (5,871 ) 
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

MAP initiatives

   $ 16,706      $ 9,938     $ 32,224      $ 21,461     $ 80,329  
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

 

(e)

Amortization of inventory fair value adjustments related to acquisitions recorded in “Cost of Sales”.

 

(f)

Fiscal 2026 reflects gains recorded in “SG&A” associated with the divestiture of a product line and a waterproofing services business within our CPG segment.

 

(g)

Fair value adjustments of the earn-out liabilities associated with the Star Brands Group acquisition, as well as one other smaller acquisition, which were recorded in “SG&A”. Management does not consider these gains to be reflective of the company’s core business operations.

 

(h)

Environmental remediation costs related to a facility that has not been owned or operated for approximately 25 years.

 

(i)

Impairment charges related to property, plant and equipment in two asset groups within the Color Group reporting unit of our Consumer segment as a result of reduced cash flow projections in the coming years due to soft end markets.

 

(j)

Depreciation expense includes charges to income that result from property, plant and equipment depreciation and the amortization of assets recorded under finance leases recorded within “Cost of Sales” or “Selling, General, & Administrative Expenses (“SG&A”)” depending on the nature of the expense. This excludes accelerated depreciation related to MAP initiatives.

 

(k)

Amortization expense includes intangible asset amortization as well as amortization of deferred cloud computing implementation costs.

 

(l)

Management believes that investors’ understanding of the Company’s operating performance is enhanced by the disclosure of Adjusted EBITDA, which is a non-GAAP financial measure defined as earnings (loss) before interest, taxes, depreciation and amortization adjusted for items impacting earnings that are not considered by management to be indicative of ongoing operations. We evaluate the profit performance of our segments based on income before income taxes, but also look to adjusted EBITDA, as a performance evaluation measure because Interest Income (Expense), Net is essentially related to corporate functions, as opposed to segment operations. Additionally, Adjusted EBITDA is an operating measure that provides investors with a measure of operating results unaffected by differences in capital structures, capital investment cycles and ages of related assets among otherwise comparable companies. For these reasons, we believe Adjusted EBITDA is also useful to investors as a metric in their investment decisions. The reader is cautioned that the Company’s Adjusted EBITDA should not be compared to other entities unknowingly. Adjusted EBITDA should not be considered an alternative to, or more meaningful than, income before income taxes as determined in accordance with GAAP.