Trade Resources Industry Views RPM International Has Filed with The Securities and Exchange Commission Its Annual Report

RPM International Has Filed with The Securities and Exchange Commission Its Annual Report

RPM International Inc. has filed with the Securities and Exchange Commission (SEC) its Annual Report on Form 10-K for the fiscal year ended May 31, 2014, and amended Quarterly Reports on Forms 10-Q/A for the fiscal 2013 quarters ended August 31, 2012, November 30, 2012 and February 28, 2013. The Forms 10-Q/A reflect the restatement of the financial statements for the first three quarters of fiscal 2013 resulting from the findings of the previously announced independent investigation by the audit committee of RPM’s board of directors. This restatement relates to the timing of the accrual of loss reserves associated with the General Services Administration (GSA) settlement in fiscal 2013. The audit committee has determined that the previously issued financial statements for the fiscal 2013 interim periods covered by the Forms 10-Q/A should no longer be relied upon.

The identified accounting errors had no effect on RPM’s reported annual results for fiscal 2013. These errors also had no effect on RPM’s “as-adjusted” results reported in its earnings releases for fiscal 2013, or on its reported interim and annual results for fiscal 2014.

On July 28, 2014, RPM had announced that it planned to delay the filing of its Form 10-K pending the resolution of an investigation conducted by its audit committee, with the assistance of independent advisors, into the timing of the disclosure and accrual of loss reserves with respect to the previously disclosed GSA and Department of Justice investigation into compliance issues relating to the Tremco roofing division’s GSA contracts. The issues reviewed by the audit committee are also the subject of a formal investigation by the SEC, in which RPM is cooperating.

RPM originally accrued $68.8 million for a settlement with the GSA and other related matters during the third quarter of fiscal 2013, which was subsequently revised to $65.1 million during the fourth quarter of fiscal 2013. Of the total $68.8 million loss reserve that the company originally accrued in connection with the GSA matter, the audit committee has determined that $11.4 million should have been accrued during the quarter ended August 31, 2012, an additional $16.9 million should have been accrued during the quarter ended November 30, 2012, and an additional $40.5 million should have been accrued during the quarter ended February 28, 2013. The company restated its financial statements for the affected periods to reflect such accruals. The impact of the restatement is as follows:

·       The estimated loss contingency for the first quarter of fiscal 2013 was understated by $11.4 million, producing an overstatement of net income of $7.2 million;

·       The estimated loss contingency for the second quarter of fiscal 2013 was understated by $16.9 million, producing an overstatement of net income of $10.8 million; and

·       The estimated loss contingency for the third quarter of fiscal 2013 was overstated by $28.3 million, producing an understatement of net income of $18.0.

The audit committee determined that the accounting errors described above did not result from intentional misconduct.

Source: http://www.coatingsworld.com/contents/view_breaking-news/2014-08-15/rpm-files-annual-report-on-form-10-k/
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RPM Files Annual Report on Form 10-K
Topics: Construction