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 such filing requirements for the past 90 days. Yes ☒ No ☐.

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

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. ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒.

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13, or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ☐ No ☒.

As of ~~March 29,~~December 27, 2023, the registrant had ~~128,911,630~~128,872,166 shares of common stock, $0.01 par value per share, outstanding.

* As used herein, the terms “RPM” and the “Company” refer to RPM International Inc. and its subsidiaries, unless the context indicates otherwise.


	February 28, 2023			May 31, 2022			November 30, 2023			May 31, 2023
Assets
Current Assets
Cash and cash equivalents	$	193,870		$	201,672		$	262,746		$	215,787
Trade accounts receivable (less allowances of $47,322 and $46,669, respectively)		1,203,212			1,432,632
Trade accounts receivable (less allowances of $57,448 and $49,482, respectively)								1,233,340			1,503,040
Inventories		1,341,303			1,212,618			1,102,815			1,135,496
Prepaid expenses and other current assets		340,990			304,887			320,106			329,845
Total current assets		3,079,375			3,151,809			2,919,007			3,184,168
Property, Plant and Equipment, at Cost		2,237,743			2,132,915			2,407,579			2,332,916
Allowance for depreciation		(1,071,722	)		(1,028,932	)		(1,154,468	)		(1,093,440	)
Property, plant and equipment, net		1,166,021			1,103,983			1,253,111			1,239,476
Other Assets
Goodwill		1,288,071			1,337,868			1,311,653			1,293,588
Other intangible assets, net of amortization		562,732			592,261			533,659			554,991
Operating lease right-of-use assets		327,179			307,797			324,272			329,582
Deferred income taxes		17,023			18,914			25,201			15,470
Other		169,022			195,074			170,474			164,729
Total other assets		2,364,027			2,451,914			2,365,259			2,358,360
Total Assets	$	6,609,423		$	6,707,706		$	6,537,377		$	6,782,004
Liabilities and Stockholders' Equity
Current Liabilities
Accounts payable	$	577,761		$	800,369		$	650,771		$	680,938
Current portion of long-term debt		3,130			603,454			5,548			178,588
Accrued compensation and benefits		204,542			262,445			204,921			257,328
Accrued losses		22,101			24,508			34,881			26,470
Other accrued liabilities		311,974			325,632			358,234			347,477
Total current liabilities		1,119,508			2,016,408			1,254,355			1,490,801
Long-Term Liabilities
Long-term debt, less current maturities		2,819,432			2,083,155			2,246,834			2,505,221
Operating lease liabilities		283,981			265,139			278,028			285,524
Other long-term liabilities		239,046			276,990			298,257			267,111
Deferred income taxes		92,474			82,186			97,349			90,347
Total long-term liabilities		3,434,933			2,707,470			2,920,468			3,148,203
Contingencies and Accrued Losses (Note 15)
Contingencies and Accrued Losses (Note 13)
Stockholders' Equity
Preferred stock, par value $0.01; authorized 50,000 shares; none issued		—			—			—			—
Common stock, par value $0.01; authorized 300,000 shares; issued 145,100 and outstanding 128,933 as of February 28, 2023; issued 144,685 and outstanding 129,199 as of May 31, 2022		1,289			1,292
Common stock, par value $0.01; authorized 300,000 shares; issued 145,708 and outstanding 128,872 as of November 30, 2023; issued 145,124 and outstanding 128,766 as of May 31, 2023								1,289			1,288
Paid-in capital		1,119,786			1,096,147			1,141,970			1,124,825
Treasury stock, at cost		(769,933	)		(717,019	)		(830,402	)		(784,463	)
Accumulated other comprehensive (loss)		(604,821	)		(537,337	)		(589,690	)		(604,935	)
Retained earnings		2,306,836			2,139,346			2,637,387			2,404,125
Total RPM International Inc. stockholders' equity		2,053,157			1,982,429			2,360,554			2,140,840
Noncontrolling Interest		1,825			1,399			2,000			2,160
Total equity		2,054,982			1,983,828			2,362,554			2,143,000
Total Liabilities and Stockholders' Equity	$	6,609,423		$	6,707,706		$	6,537,377		$	6,782,004

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.


	Three Months Ended						Nine Months Ended						Three Months Ended						Six Months Ended
	February 28,			February 28,			February 28,			February 28,			November 30,			November 30,			November 30,			November 30,
	2023			2022			2023			2022			2023			2022			2023			2022
Net Sales	$	1,516,176		$	1,433,879		$	5,240,204		$	4,723,838		$	1,792,275		$	1,791,708		$	3,804,132		$	3,724,028
Cost of Sales		978,142			935,293			3,267,308			3,029,287			1,044,047			1,101,317			2,227,287			2,289,166
Gross Profit		538,034			498,586			1,972,896			1,694,551			748,228			690,391			1,576,845			1,434,862
Selling, General and Administrative Expenses		450,019			433,569			1,425,969			1,290,245			523,289			490,607			1,054,321			975,812
Restructuring Expense		4,154			1,140			6,780			5,128			1,239			1,272			7,737			2,626
Goodwill Impairment		36,745			-			36,745			-
Interest Expense		30,756			22,016			85,385			64,127			30,348			27,918			62,166			54,629
Investment (Income) Expense, Net		(2,723	)		4,355			(5,910	)		1,421
(Gain) on Sales of Assets and Business, Net		(25,743	)		(249	)		(25,881	)		(42,491	)
Other Expense (Income), Net		2,339			(2,742	)		7,065			(9,001	)
Investment (Income), Net														(5,289	)		(6,851	)		(17,728	)		(3,187	)
Other Expense, Net														2,817			2,310			5,371			4,726
Income Before Income Taxes		42,487			40,497			442,743			385,122			195,824			175,135			464,978			400,256
Provision for Income Taxes		15,248			7,248			114,683			91,962			50,009			43,593			117,850			99,435
Net Income		27,239			33,249			328,060			293,160			145,815			131,542			347,128			300,821
Less: Net Income Attributable to Noncontrolling Interests		265			230			729			684			310			198			541			464
Net Income Attributable to RPM International Inc. Stockholders	$	26,974		$	33,019		$	327,331		$	292,476		$	145,505		$	131,344		$	346,587		$	300,357
Average Number of Shares of Common Stock Outstanding:
Basic		127,495			127,943			127,564			128,013			127,758			127,585			127,816			127,600
Diluted		128,035			129,702			128,789			129,622			128,249			128,911			128,312			128,887
Earnings per Share of Common Stock Attributable to RPM International Inc. Stockholders:
Basic	$	0.21		$	0.26		$	2.55		$	2.27		$	1.13		$	1.02		$	2.70		$	2.34
Diluted	$	0.21		$	0.25		$	2.54		$	2.26		$	1.13		$	1.02		$	2.69		$	2.33

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.


	Nine Months Ended						Six Months Ended
	February 28,			February 28,			November 30,			November 30,
	2023			2022			2023			2022
Cash Flows from Operating Activities:
Net income	$	328,060		$	293,160		$	347,128		$	300,821
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		115,186			114,295			84,177			76,750
Restructuring charges, net of payments		-			(2,341	)
Goodwill impairment		36,745			-
Fair value adjustments to contingent earnout obligations		-			2,470
Deferred income taxes		8,506			(16,908	)		(5,574	)		(4,196	)
Stock-based compensation expense		23,636			29,287			17,147			16,877
Net loss on marketable securities		3,241			10,032
Net (gain) on sales of assets and a business		(25,881	)		(42,491	)
Net (gain) loss on marketable securities								(6,226	)		2,812
Net loss on sales of assets and businesses								3,623			-
Other		684			112			4,007			(104	)
Changes in assets and liabilities, net of effect from purchases and sales of businesses:
Decrease in receivables		202,742			170,513			272,262			72,931
(Increase) in inventory		(142,069	)		(273,519	)
Decrease in prepaid expenses and other current and long-term assets		4,807			506
Decrease (increase) in inventory								37,243			(189,487	)
Decrease (increase) in prepaid expenses and other current and long-term assets								21,260			(23,025	)
(Decrease) in accounts payable		(195,093	)		(9,884	)		(11,806	)		(95,502	)
(Decrease) in accrued compensation and benefits		(54,747	)		(47,442	)		(53,980	)		(62,724	)
(Decrease) in accrued losses		(2,119	)		(2,985	)
(Decrease) in other accrued liabilities		(40,690	)		(68,854	)
Increase in accrued losses								8,332			1,465
Increase in other accrued liabilities								50,188			94,297
Cash Provided by Operating Activities		263,008			155,951			767,781			190,915
Cash Flows from Investing Activities:
Capital expenditures		(179,725	)		(152,401	)		(89,300	)		(113,463	)
Acquisition of businesses, net of cash acquired		(47,542	)		(116,457	)		(15,404	)		(47,542	)
Purchase of marketable securities		(13,173	)		(13,674	)		(22,057	)		(10,309	)
Proceeds from sales of marketable securities		9,596			9,004			13,796			7,071
Proceeds from sales of assets and a business, net		53,318			51,913
Other		2,127			(55	)		1,326			236
Cash (Used for) Investing Activities		(175,399	)		(221,670	)		(111,639	)		(164,007	)
Cash Flows from Financing Activities:
Additions to long-term and short-term debt		489,881			300,967			-			517,785
Reductions of long-term and short-term debt		(354,135	)		(72,493	)		(449,485	)		(351,795	)
Cash dividends		(159,841	)		(152,575	)		(113,325	)		(105,640	)
Repurchases of common stock		(37,500	)		(27,500	)		(25,000	)		(25,000	)
Shares of common stock returned for taxes		(15,252	)		(10,906	)		(20,689	)		(14,825	)
Payments of acquisition-related contingent consideration		(3,765	)		(5,774	)		(1,082	)		(3,705	)
Other		(2,689	)		(3,824	)		(713	)		(2,627	)
Cash (Used for) Provided by Financing Activities		(83,301	)		27,895			(610,294	)		14,193
Effect of Exchange Rate Changes on Cash and Cash Equivalents		(12,110	)		(15,689	)		1,111			(10,655	)
Net Change in Cash and Cash Equivalents		(7,802	)		(53,513	)		46,959			30,446
Cash and Cash Equivalents at Beginning of Period		201,672			246,704			215,787			201,672
Cash and Cash Equivalents at End of Period	$	193,870		$	193,191		$	262,746		$	232,118
Supplemental Disclosures of Cash Flows Information:
Cash paid during the period for:
Interest	$	83,248		$	58,129		$	61,586		$	52,256
Income Taxes, net of refunds	$	133,753		$	130,862		$	124,518		$	84,034
Supplemental Disclosures of Noncash Investing Activities:
Capital expenditures accrued within accounts payable at quarter-end	$	12,147		$	9,390		$	12,463		$	8,879

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.


	Common Stock											Accumulated															Common Stock											Accumulated
	Number											Other						Total RPM									Number											Other						Total RPM
	of			Par/Stated			Paid-In		Treasury			Comprehensive			Retained			International			Noncontrolling			Total			of			Par/Stated			Paid-In		Treasury			Comprehensive			Retained			International			Noncontrolling			Total
	Shares			Value			Capital		Stock			(Loss) Income			Earnings			Inc. Equity			Interests			Equity			Shares			Value			Capital		Stock			(Loss) Income			Earnings			Inc. Equity			Interests			Equity
Balance at June 1, 2022		129,199		$	1,292		$	1,096,147	$	(717,019	)	$	(537,337	)	$	2,139,346		$	1,982,429		$	1,399		$	1,983,828
Net income		-			-			-		-			-			169,013			169,013			266			169,279
Other comprehensive (loss)		-			-			-		-			(75,568	)		-			(75,568	)		(62	)		(75,630	)
Dividends declared and paid ($0.40 per share)		-			-			-		-			-			(51,420	)		(51,420	)		-			(51,420	)
Other noncontrolling interest activity		-			-			-		-			-			-			-			(60	)		(60	)
Share repurchases under repurchase program		(303	)		(3	)		3		(25,000	)		-			-			(25,000	)		-			(25,000	)
Stock compensation expense and other deferred compensation, shares granted less shares returned for taxes		203			2			9,061		(12,458	)		-			-			(3,395	)		-			(3,395	)
Balance at August 31, 2022		129,099		$	1,291		$	1,105,211	$	(754,477	)	$	(612,905	)	$	2,256,939		$	1,996,059		$	1,543		$	1,997,602
Balance at June 1, 2023																												128,766		$	1,288		$	1,124,825	$	(784,463	)	$	(604,935	)	$	2,404,125		$	2,140,840		$	2,160		$	2,143,000
Net income		-			-			-		-			-			131,344			131,344			198			131,542			-			-			-		-			-			201,082			201,082			231			201,313
Other comprehensive income		-			-			-		-			11,859			-			11,859			24			11,883			-			-			-		-			11,746			-			11,746			14			11,760
Dividends declared and paid ($0.42 per share)		-			-			-		-			-			(54,220	)		(54,220	)		-			(54,220	)		-			-			-		-			-			(54,065	)		(54,065	)		-			(54,065	)
Other noncontrolling interest activity		-			-			-		-			-			-			-			(141	)		(141	)		-			-			-		-			-			-			-			(712	)		(712	)
Stock compensation expense and other deferred compensation, shares granted less shares returned for taxes		(9	)		-			7,814		(2,395	)		-			-			5,419			-			5,419
Balance at November 30, 2022		129,090		$	1,291		$	1,113,025	$	(756,872	)	$	(601,046	)	$	2,334,063		$	2,090,461		$	1,624		$	2,092,085
Net income		-			-			-		-			-			26,974			26,974			265			27,239
Other comprehensive (loss)		-			-			-		-			(3,775	)		-			(3,775	)		(2	)		(3,777	)
Dividends paid ($0.42 per share)		-			-			-		-			-			(54,201	)		(54,201	)		-			(54,201	)
Other noncontrolling interest activity		-			-			-		-			-			-			-			(62	)		(62	)
Share repurchases under repurchase program		(143	)		(2	)		2		(12,500	)		-			-			(12,500	)		-			(12,500	)		(122	)		(1	)		1		(12,500	)		-			-			(12,500	)		-			(12,500	)
Stock compensation expense and other deferred compensation, shares granted less shares returned for taxes		(14	)		-			6,759		(561	)		-			-			6,198			-			6,198			318			3			9,115		(15,078	)		-			-			(5,960	)		-			(5,960	)
Balance at February 28, 2023		128,933		$	1,289		$	1,119,786	$	(769,933	)	$	(604,821	)	$	2,306,836		$	2,053,157		$	1,825		$	2,054,982
Balance at August 31, 2023																												128,962		$	1,290		$	1,133,941	$	(812,041	)	$	(593,189	)	$	2,551,142		$	2,281,143		$	1,693		$	2,282,836
Net income																												-			-			-		-			-			145,505			145,505			310			145,815
Other comprehensive income (loss)																												-			-			-		-			3,499			-			3,499			(3	)		3,496
Dividends declared and paid ($0.46 per share)																												-			-			-		-			-			(59,260	)		(59,260	)		-			(59,260	)
Share repurchases under repurchase program																												(132	)		(1	)		1		(12,500	)		-			-			(12,500	)		-			(12,500	)
Stock compensation expense and other deferred compensation, shares granted less shares returned for taxes																												42			-			8,028		(5,861	)		-			-			2,167			-			2,167
Balance at November 30, 2023																												128,872		$	1,289		$	1,141,970	$	(830,402	)	$	(589,690	)	$	2,637,387		$	2,360,554		$	2,000		$	2,362,554


	Common Stock											Accumulated															Common Stock											Accumulated
	Number											Other						Total RPM									Number											Other						Total RPM
	of			Par/Stated			Paid-In		Treasury			Comprehensive			Retained			International			Noncontrolling			Total			of			Par/Stated			Paid-In		Treasury			Comprehensive			Retained			International			Noncontrolling			Total
	Shares			Value			Capital		Stock			(Loss) Income			Earnings			Inc. Equity			Interests			Equity			Shares			Value			Capital		Stock			(Loss) Income			Earnings			Inc. Equity			Interests			Equity
Balance at June 1, 2021		129,573		$	1,295		$	1,055,400	$	(653,006	)	$	(514,884	)	$	1,852,259		$	1,741,064		$	1,961		$	1,743,025
Net income		-			-			-		-			-			134,582			134,582			213			134,795
Other comprehensive (loss)		-			-			-		-			(25,624	)		-			(25,624	)		(30	)		(25,654	)
Dividends declared and paid ($0.38 per share)		-			-			-		-			-			(48,901	)		(48,901	)		-			(48,901	)
Share repurchases under repurchase program		(133	)		(1	)		1		(12,500	)		-						(12,500	)		-			(12,500	)
Stock compensation expense and other deferred compensation, shares granted less shares returned for taxes		303			3			5,760		(5,808	)		-			-			(45	)		-			(45	)
Balance at August 31, 2021		129,743		$	1,297		$	1,061,161	$	(671,314	)	$	(540,508	)	$	1,937,940		$	1,788,576		$	2,144		$	1,790,720
Balance at June 1, 2022																												129,199		$	1,292		$	1,096,147	$	(717,019	)	$	(537,337	)	$	2,139,346		$	1,982,429		$	1,399		$	1,983,828
Net income		-			-			-		-			-			124,875			124,875			241			125,116			-			-			-		-			-			169,013			169,013			266			169,279
Other comprehensive (loss)		-			-			-		-			(33,237	)		-			(33,237	)		(29	)		(33,266	)		-			-			-		-			(75,568	)		-			(75,568	)		(62	)		(75,630	)
Dividends declared and paid ($0.40 per share)		-			-			-		-			-			(51,824	)		(51,824	)		(711	)		(52,535	)		-			-			-		-			-			(51,420	)		(51,420	)		-			(51,420	)
Other noncontrolling interest activity																												-			-			-		-			-			-			-			(60	)		(60	)
Share repurchases under repurchase program																												(303	)		(3	)		3		(25,000	)		-			-			(25,000	)		-			(25,000	)
Stock compensation expense and other deferred compensation, shares granted less shares returned for taxes		(66	)		-			11,878		(4,157	)		-			-			7,721			-			7,721			203			2			9,061		(12,458	)		-			-			(3,395	)		-			(3,395	)
Balance at November 30, 2021		129,677		$	1,297		$	1,073,039	$	(675,471	)	$	(573,745	)	$	2,010,991		$	1,836,111		$	1,645		$	1,837,756
Balance at August 31, 2022																												129,099		$	1,291		$	1,105,211	$	(754,477	)	$	(612,905	)	$	2,256,939		$	1,996,059		$	1,543		$	1,997,602
Net income		-			-			-		-			-			33,019			33,019			230			33,249			-			-			-		-			-			131,344			131,344			198			131,542
Other comprehensive income		-			-			-		-			21,437			-			21,437			8			21,445			-			-			-		-			11,859			-			11,859			24			11,883
Dividends paid ($0.40 per share)		-			-			-		-			-			(51,850	)		(51,850	)		(284	)		(52,134	)
Share repurchases under repurchase program		(172	)		(2	)		2		(15,000	)		-			-			(15,000	)		-			(15,000	)
Dividends declared and paid ($0.42 per share)																												-			-			-		-			-			(54,220	)		(54,220	)		-			(54,220	)
Other noncontrolling interest activity																												-			-			-		-			-			-			-			(141	)		(141	)
Stock compensation expense and other deferred compensation, shares granted less shares returned for taxes		(9	)		-			12,276		(947	)		-			-			11,329			-			11,329			(9	)		-			7,814		(2,395	)		-			-			5,419			-			5,419
Balance at February 28, 2022		129,496		$	1,295		$	1,085,317	$	(691,418	)	$	(552,308	)	$	1,992,160		$	1,835,046		$	1,599		$	1,836,645
Balance at November 30, 2022																												129,090		$	1,291		$	1,113,025	$	(756,872	)	$	(601,046	)	$	2,334,063		$	2,090,461		$	1,624		$	2,092,085

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

NOTE 3 — RESTRUCTURING

We record restructuring charges associated with management-approved restructuring plans to either reorganize one or more of our business segments, or to remove duplicative headcount and infrastructure associated with our businesses. Restructuring charges can include severance costs to eliminate a specified number of associates, infrastructure charges to vacate facilities and consolidate operations, contract cancellation costs and other costs. We record the short-term portion of our restructuring liability in ~~Other Accrued Liabilities~~other accrued liabilities and the long-term portion, if any, in ~~Other Long-Term Liabilities~~other long-term liabilities in our Consolidated Balance Sheets.

During 2018, we approved and implemented the initial phases of a multi-year restructuring plan, which is referred to as the 2020 Margin Acceleration Plan (“MAP to Growth”). ~~On May 31, 2021, we formally concluded our MAP to Growth. However, certain projects identified prior to that date will be completed throughout fiscal 2023.~~We

~~For MAP to Growth, we~~ incurred $~~0.7~~1.2 million and $~~3.3~~2.6 million of restructuring costs associated with this plan for the three and six months ended November 30, 2022, respectively. We did not incur any restructuring costs for the three and ~~nine~~six months ended ~~February 28,~~November 30, 2023, ~~respectively. We incurred $1.1~~ ~~million~~ and $~~5.1~~ ~~million of restructuring costs for the three and nine months ended February 28, 2022, respectively. The current total expected~~we do not expect to incur any further costs associated with this ~~plan are $~~plan.

~~121.6~~8

~~million, of which $120.6~~ ~~million has been incurred to date.~~

In August 2022, we approved and announced our Margin Achievement Plan 2025 (“MAP 2025”)~~. MAP 2025~~, which is a multi-year restructuring plan to build on the achievements of MAP to Growth and designed to improve margins by streamlining business processes, reducing working capital, implementing commercial initiatives to drive improved mix and salesforce effectiveness and improving operating efficiency. ~~Initial phases of the plan have focused on commercial initiatives, operational efficiencies, and procurement.~~ Most activities under MAP 2025 are anticipated to be completed by the end of fiscal ~~year 2025.~~2025; however, we expect some costs to extend beyond this date.

The current total expected costs associated with this plan are outlined ~~below.~~below and increased approximately $16.5 million compared to our previous estimate, attributable to increases in expected severance and benefit charges of $1.0 million and expected facility closure and other related costs of $15.5 million. Throughout our MAP 2025 initiative, we will continue to assess and find areas of improvement and cost savings. As such, the final implementation of the aforementioned phases and total expected costs are subject to change.

USL Restructuring

As previously disclosed during fiscal 2023, due to the challenged macroeconomic environment, we evaluated certain business restructuring actions, specifically our go to market strategy for operating in Europe. During the quarter ended February 28, 2023, due to declining profitability and regulatory headwinds, management decided to restructure the Universal Sealants (“USL”) reporting unit within our PCG segment and explore strategic alternatives for our USL infrastructure services business within the United Kingdom. During the three-month period ended August 31, 2023, we recognized a loss on sale of $4.5 million in connection with the divestiture of USL’s Bridgecare services division. The Bridgecare division is a contracting business focused on the installation of joints and waterproofing in the United Kingdom. The loss on this sale is included in selling, general and administrative ("SG&A") expenses in our Consolidated Statements of Income and net loss on sales of assets and businesses in our Consolidated Statements of Cash Flows.

Additionally, during the three-month period ended August 31, 2023, in connection with MAP 2025, we realigned certain businesses and management structures within our segments. Within our PCG segment, certain businesses of our USL reporting unit were transferred to our Fibergrate, Carboline and Stonhard reporting units. As a result of this change in our market strategy, we performed an interim impairment assessment of the USL indefinite-lived tradename. Calculating the fair value of the USL’s indefinite-lived tradename required the use of various estimates and assumptions. We estimated the fair value of USL’s indefinite-lived tradename by applying a relief-from-royalty calculation, which included discounted future cash flows related to projected revenues impacted by this decision. In applying this methodology, we relied on a number of factors, including actual and forecasted revenues and market data. As the carrying amount of the tradename exceeded its fair value, an impairment loss of $3.3 million was recorded for the three months ended August 31, 2023. This impairment loss was classified as restructuring expense within our PCG segment. No such impairment loss was recorded for the three months ended November 30, 2023.

Following is a summary of the charges recorded in connection with MAP 2025 by reportable segment as well as the total expected costs related to projects identified to date:


	Three Months Ended		Nine Months Ended		Cumulative Costs		Total Expected		Three Months Ended		Six Months Ended		Cumulative Costs			Total Expected
(In thousands)	February 28, 2023		February 28, 2023		to Date		Costs		November 30, 2023		November 30, 2023		to Date			Costs
Construction Products Group ("CPG") Segment:
Severance and benefit costs	$	324	$	324	$	324	$	3,755	$	387	$	802	$	6,894		$	17,110
Facility closure and other related costs										-		-		-			15,304
Total Charges	$	324	$	324	$	324	$	3,755	$	387	$	802	$	6,894		$	32,414

Performance Coatings Group ("PCG") Segment:
Severance and benefit costs	$	573	$	573	$	573	$	3,038	$	213	$	1,044	$	2,192		$	2,369
Facility closure and other related costs		-		-		-		1,000		93		123		123			1,123
Other restructuring costs (a)		2,537		2,537		2,537		2,552		-		4,555		7,092			7,092
Total Charges	$	3,110	$	3,110	$	3,110	$	6,590	$	306	$	5,722	$	9,407		$	10,584

Consumer Segment:
Severance and benefit costs	$	13	$	13	$	13	$	4,018	$	35	$	35	$	542		$	542
Facility closure and other related costs										-		14		635			635
Total Charges	$	13	$	13	$	13	$	4,018	$	35	$	49	$	1,177		$	1,177

Specialty Products Group ("SPG") Segment:
Severance and benefit costs	$	-	$	-	$	-	$	740	$	482	$	1,135	$	1,940		$	2,290
Facility closure and other related costs		-		-		-		3,059		29		29		29			4,828
Total Charges	$	-	$	-	$	-	$	3,799	$	511	$	1,164	$	1,969		$	7,118

Corporate/Other Segment:
Severance and benefit (credits)									$	-	$	-	$	(50	)	$	(50	)
Total Charges									$	-	$	-	$	(50	)	$	(50	)

Consolidated:
Severance and benefit costs	$	910	$	910	$	910	$	11,551	$	1,117	$	3,016	$	11,518		$	22,261
Facility closure and other related costs		-		-		-		4,059		122		166		787			21,890
Other restructuring costs		2,537		2,537		2,537		2,552		-		4,555		7,092			7,092
Total Charges	$	3,447	$	3,447	$	3,447	$	18,162	$	1,239	$	7,737	$	19,397		$	51,243

(a)

~~Other~~Of the $4.6 million of other restructuring costs ~~are~~incurred for the six-month period ending November 30, 2023, $3.3 million is associated with the impairment of an indefinite-lived tradename as described ~~below in Note 4, "Goodwill and Other Intangible Assets,"~~above.

A summary of the ~~Consolidated Financial Statements.~~

~~NOTE 5~~ — FAIR VALUE MEASUREMENTS

Financial instruments recorded in the Consolidated Balance Sheets include cash and cash equivalents, trade accounts receivable, marketable securities, notes and accounts payable, and debt.

An allowance for credit losses is established for trade accounts receivable using assessments of current creditworthiness of customers, historical collection experience, the aging of receivables and other currently available evidence. Trade accounts receivable balances are written-off against the allowance if a final determination of uncollectibility is made. All provisions for allowance for doubtful collection of accounts are included in ~~selling, general and administrative ("~~SG~~&A")~~&A expense.

The valuation techniques utilized for establishing the fair values of assets and liabilities are based on observable and unobservable inputs. Observable inputs reflect readily obtainable data from independent sources, while unobservable inputs reflect management’s market assumptions. The fair value hierarchy has three levels based on the reliability of the inputs used to determine fair value, as follows:

Level 1 Inputs — Quoted prices for identical instruments in active markets.

Level 2 Inputs — Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable.

Level 3 Inputs — Instruments with primarily unobservable value drivers.

The following tables present our assets and liabilities that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy.


(In thousands)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)			Fair Value at February 28, 2023			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)			Fair Value at November 30, 2023
Available-for-sale debt securities:
U.S. Treasury and other government	$	-	$	24,806	$	-		$	24,806		$	-	$	26,881	$	-		$	26,881
Corporate bonds		-		139		-			139			-		137		-			137
Total available-for-sale debt securities		-		24,945		-			24,945			-		27,018		-			27,018
Marketable equity securities:
Stocks – foreign		723		-		-			723			1,146		-		-			1,146
Stocks – domestic		4,768		-		-			4,768			9,791		-		-			9,791
Mutual funds – foreign		-		39,278		-			39,278			-		42,103		-			42,103
Mutual funds – domestic		-		73,899		-			73,899			-		82,025		-			82,025
Total marketable equity securities		5,491		113,177		-			118,668			10,937		124,128		-			135,065
Contingent consideration		-		-		(2,235	)		(2,235	)		-		-		(2,298	)		(2,298	)
Total	$	5,491	$	138,122	$	(2,235	)	$	141,378		$	10,937	$	151,146	$	(2,298	)	$	159,785


(In thousands)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)			Fair Value at May 31, 2022			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)			Fair Value at May 31, 2023
Available-for-sale debt securities:
U.S. Treasury and other government	$	-	$	25,239	$	-		$	25,239		$	-	$	27,021	$	-		$	27,021
Corporate bonds		-		155		-			155			-		141		-			141
Total available-for-sale debt securities		-		25,394		-			25,394			-		27,162		-			27,162
Marketable equity securities:
Stocks – foreign		598		-		-			598			786		-		-			786
Stocks – domestic		5,085		-		-			5,085			5,009		-		-			5,009
Mutual funds – foreign		-		39,139		-			39,139			-		40,074		-			40,074
Mutual funds – domestic		-		74,227		-			74,227			-		75,284		-			75,284
Total marketable equity securities		5,683		113,366		-			119,049			5,795		115,358		-			121,153
Contingent consideration		-		-		(10,529	)		(10,529	)		-		-		(2,686	)		(2,686	)
Total	$	5,683	$	138,760	$	(10,529	)	$	133,914		$	5,795	$	142,520	$	(2,686	)	$	145,629

Our investments in available-for-sale debt securities and marketable equity securities are valued using a market approach. The availability of inputs observable in the market varies from instrument to instrument and depends on a variety of factors, including the type of instrument, whether the instrument is actively traded and other characteristics particular to the transaction. For most of our financial instruments, pricing inputs are readily observable in the market, the valuation methodology used is widely accepted by market participants, and the valuation does not require significant management discretion. For other financial instruments, pricing inputs are less observable in the market and may require management judgment.

The contingent consideration represents the estimated fair value of the additional variable cash consideration payable in connection with recent acquisitions that is contingent upon the achievement of certain performance milestones. We estimated the fair value using expected future cash flows over the period in which the obligation is expected to be settled which is considered to be a Level 3 input. During the first ~~nine months~~half of fiscal ~~2023,~~2024, we ~~recorded an increase in the contingent consideration accrual related to acquisitions of $2.1~~ ~~million and~~ paid approximately $~~10.4~~1.1 million to satisfy contingent consideration obligations relating to certain performance milestones that were established in prior periods and achieved during the current year. During the first ~~nine months~~half of fiscal ~~2022,~~2023, we recorded an increase in the accrual for approximately $~~2.5~~2.1 million related to ~~fair value adjustments~~acquisitions and paid approximately $~~5.8~~10.3 million to satisfy contingent consideration obligations relating to certain performance milestones that were established in prior periods and achieved during fiscal ~~2022.~~2023. In the Consolidated Statements of Cash Flows, payments of acquisition-related contingent consideration for the amount recognized at fair value as of the acquisition date are reported in cash flows from financing activities, while payments of contingent consideration in excess of fair value as of the acquisition date, are reported in cash flows from operating activities within other accrued liabilities.

The carrying value of our current financial instruments, which include cash and cash equivalents, marketable securities, trade accounts receivable, accounts payable and short-term debt approximates fair value because of the short-term maturity of these financial instruments. At ~~February 28,~~November 30, 2023 and May 31, ~~2022,~~2023, the fair value of our long-term debt was estimated using active market quotes, based on our current incremental borrowing rates for similar types of borrowing arrangements, which are Level 2 inputs. Based on the analysis performed, the fair value and the carrying value of our cash and cash equivalents and long-term debt as of ~~February 28,~~November 30, 2023 and May 31, ~~2022~~2023 are as follows:


	At February 28, 2023				At November 30, 2023
(In thousands)	Carrying Value		Fair Value		Carrying Value		Fair Value
Cash and cash equivalents	$	193,870	$	193,870	$	262,746	$	262,746
Long-term debt, including current portion		2,822,562		2,614,247		2,252,382		2,064,051

	At May 31, 2022				At May 31, 2023
(In thousands)	Carrying Value		Fair Value		Carrying Value		Fair Value
Cash and cash equivalents	$	201,672	$	201,672	$	215,787	$	215,787
Long-term debt, including current portion		2,686,609		2,618,978		2,683,809		2,490,863

NOTE 5 — INVESTMENT (INCOME), NET

Investment (income), net, consists of the following components:


	Three Months Ended						Six Months Ended
	November 30,			November 30,			November 30,			November 30,
(In thousands)	2023			2022			2023			2022
Interest (income)	$	(4,897	)	$	(2,389	)	$	(10,348	)	$	(4,539	)
Net loss (gain) on marketable securities		225			(3,794	)		(6,226	)		2,812
Dividend (income)		(617	)		(668	)		(1,154	)		(1,460	)
Investment (income), net	$	(5,289	)	$	(6,851	)	$	(17,728	)	$	(3,187	)

Net Loss (Gain) on Marketable Securities


	Three Months Ended					Six Months Ended
	November 30,		November 30,			November 30,			November 30,
(In thousands)	2023		2022			2023			2022
Unrealized losses (gains) on marketable equity securities	$	103	$	(3,754	)	$	(6,424	)	$	2,759
Realized losses (gains) on marketable equity securities		87		(40	)		132			89
Realized losses (gains) on available-for-sale debt securities		35		-			66			(36	)
Net loss (gain) on marketable securities	$	225	$	(3,794	)	$	(6,226	)	$	2,812

NOTE 6 — ~~INVESTMENT (INCOME)~~OTHER EXPENSE, NET

~~Investment (income)~~Other expense, net, consists of the following components:

Three Months Ended

Nine Months Ended

February 28,

February 28,

February 28,

February 28,

(In thousands)

2023

2022

2023

2022

Interest (income)

$
(2,266
)
$
(1,203
)

$
(6,805
)
$
(3,349
)
Net loss on marketable securities

429

8,215

3,241

10,032

Dividend (income)

(886
)

(2,657
)

(2,346
)

(5,262
)
Investment (income) expense, net

$
(2,723
)
$
4,355

$
(5,910
)
$
1,421

~~Net Loss on Marketable Securities~~

Three Months Ended

Nine Months Ended

February 28,

February 28,

February 28,

February 28,

(In thousands)

2023

2022

2023

2022

Unrealized losses on marketable equity securities

$
946

$
8,903

$
3,704

$
11,227

Realized (gains) on marketable equity securities

(525
)

(699
)

(435
)

(1,223
)
Realized losses (gains) on available-for-sale debt securities

8

11

(28
)

28

Net loss on marketable securities

$
429

$
8,215

$
3,241

$
10,032


	Three Months Ended					Six Months Ended
	November 30,		November 30,			November 30,			November 30,
(In thousands)	2023		2022			2023			2022
Pension non-service costs	$	2,785	$	2,486		$	5,566		$	5,002
Other		32		(176	)		(195	)		(276	)
Other expense, net	$	2,817	$	2,310		$	5,371		$	4,726

NOTE 7 ~~— (GAIN) ON SALES OF ASSETS AND BUSINESS, NET~~

~~During the three and nine months ended February 28, 2023, we recognized net gains of $25.7~~ ~~million and $25.9~~ million, respectively, on the sale of certain real property assets and a business divestiture. On January 20, 2023, we completed the divestiture of our Guardian Protection Products, Inc ("Guardian") business for proceeds of approximately $~~49.2~~ ~~million, net of cash disposed. The transaction also includes a future contingent cash receipt of up to an additional $7.5~~ ~~million which may be recognized upon achievement of certain financial goals. In connection with the divestiture, we recognized a gain of $24.7~~ million for the quarter ended February 28, 2023, which is included in (gain) on sales of assets and business, net in our Consolidated Statements of Income. As of November 30, 2022, the criteria necessary to be classified as held for sale on the accompanying Consolidated Balance Sheets had not been met.

Guardian, headquartered in Hickory, North Carolina, was a reporting unit included in our SPG segment and is a seller of furniture protection plans and protection products for fabric, leather, and wood applications. The sale of Guardian does not represent a strategic shift that will have a major effect on our operations and financial results and therefore is not presented as discontinued operations.

~~During the three and nine months ended February 28, 2022, we recognized net gains of $0.2~~ ~~million and $42.5~~ million, respectively, on the sale of certain real property assets. Most significantly, certain real property assets for the Toronto, Ontario location, within our CPG segment, were sold on September 15, 2021 for $~~49.8~~ ~~million. We received $48.0~~ ~~million of net proceeds after adjustments and expenses and recognized a gain of $41.9~~ ~~million. The purpose of this transaction was to generate cash by monetizing a real estate market opportunity.~~

~~In conjunction with the sale, we executed a leaseback agreement commencing~~ ~~September 15, 2021~~ ~~and expiring on~~ ~~September 14, 2024. During the second quarter of fiscal 2022, the lease was classified as an operating lease with total future minimum lease payments during the initial term of the lease of approximately $3.4~~ ~~million. An incremental borrowing rate of~~ ~~1.3% was used to determine the ROU asset. We recorded a $3.7~~ ~~million operating lease right-of-use asset and corresponding liabilities in our Consolidated Balance Sheets during the second quarter of fiscal 2022.~~

NOTE 108 — INVENTORIES

Inventories, net of reserves, were composed of the following major classes:


(In thousands)	February 28, 2023		May 31, 2022		November 30, 2023		May 31, 2023
Raw material and supplies	$	521,729	$	560,886	$	405,098	$	451,504
Finished goods		819,574		651,732		697,717		683,992
Total Inventory, Net of Reserves	$	1,341,303	$	1,212,618	$	1,102,815	$	1,135,496

NOTE 129 — STOCK REPURCHASE PROGRAM

On January 8, 2008, we announced our authorization of a stock repurchase program under which we may repurchase shares of RPM International Inc. common stock at management’s discretion. As announced on November 28, 2018, our goal was to return $1.0 billion in capital to stockholders by May 31, 2021 through share repurchases and the retirement of our convertible note during fiscal 2019. On April 16, 2019, after taking into account share repurchases under our existing stock repurchase program to date, our Board of Directors authorized the repurchase of the remaining $600.0 million in value of RPM International Inc. common stock by May 31, 2021.

As previously announced, given macroeconomic uncertainty resulting from the Covid pandemic, we had suspended stock repurchases under the program, but in January 2021, our Board of Directors authorized the resumption of our stock repurchase program. At the time of resuming the program, $469.7 million of shares of common stock remained available for repurchase. The Board of Directors also extended the stock repurchase program beyond its original May 31, 2021 expiration date until such time that the remaining $469.7 million of capital has been returned to our stockholders.

As a result, we may repurchase shares from time to time in the open market or in private transactions at various times and in amounts and for prices that our management deems appropriate, subject to insider trading rules and other securities law restrictions. The timing of our purchases will depend upon prevailing market conditions, alternative uses of capital and other factors. We may limit or terminate the repurchase program at any time.

During the three ~~and nine~~ months ended ~~February 28,~~November 30, 2023, we repurchased ~~143,096~~ ~~and~~ ~~446,175~~131,858 shares of our common stock at a cost of approximately $12.5 million, ~~and $37.5~~ ~~million,~~ or an average of $~~87.35~~ ~~per share and $84.05~~94.80 per share. During the three ~~and nine~~ months ended ~~February 28,~~November 30, 2022, we did not repurchase any shares of our common stock under this program. During the six months ended November 30, 2023, we repurchased ~~171,933~~ ~~and~~ ~~305,321~~254,283 shares of our common stock at a cost of approximately $~~15.0~~ ~~million and $27.5~~25.0 million, or an average of $~~87.24~~98.32 per ~~share and~~share. During the six months ended November 30, 2022, we repurchased 303,079 shares of our common stock at a cost of approximately $~~90.07~~25.0 million, or an average of $82.49 per share. The maximum dollar amount that may yet be repurchased under our stock repurchase program was approximately $~~329.8~~292.3 million at ~~February 28,~~November 30, 2023.

NOTE 1310 — ACCUMULATED OTHER COMPREHENSIVE (LOSS)

Accumulated other comprehensive (loss) consists of the following components:


				Pension And
				Other
	Foreign			Postretirement			Unrealized		Unrealized
	Currency			Benefit			Gain		Gain (Loss)
Three Months Ended November 30, 2023	Translation			Liability			(Loss) On		On
(In thousands)	Adjustments			Adjustments			Derivatives		Securities			Total
Balance at August 31, 2023	$	(456,536	)	$	(145,600	)	$	11,405	$	(2,458	)	$	(593,189	)
Current period comprehensive (loss) income		(673	)		-			-		150			(523	)
Income taxes associated with current period comprehensive income (loss)		632			-			-		(16	)		616
Amounts reclassified from accumulated other comprehensive income (loss)		-			4,500			-		(45	)		4,455
Income taxes reclassified into earnings		-			(1,054	)		-		5			(1,049	)
Balance at November 30, 2023	$	(456,577	)	$	(142,154	)	$	11,405	$	(2,364	)	$	(589,690	)


				Pension And
				Other
	Foreign			Postretirement			Unrealized			Unrealized
	Currency			Benefit			Gain			Gain (Loss)
Three Months Ended November 30, 2022	Translation			Liability			(Loss) On			On
(In thousands)	Adjustments			Adjustments			Derivatives			Securities			Total
Balance at August 31, 2022	$	(474,367	)	$	(149,111	)	$	12,565		$	(1,992	)	$	(612,905	)
Current period comprehensive (loss) income		8,579			-			-			(331	)		8,248
Income taxes associated with current period comprehensive income (loss)		570			-			-			117			687
Amounts reclassified from accumulated other comprehensive income (loss)		-			4,623			(605	)		(20	)		3,998
Income taxes reclassified into earnings		-			(1,074	)		-			-			(1,074	)
Balance at November 30, 2022	$	(465,218	)	$	(145,562	)	$	11,960		$	(2,226	)	$	(601,046	)


				Pension And
				Other
	Foreign			Postretirement			Unrealized		Unrealized
	Currency			Benefit			Gain		Gain (Loss)
Six Months Ended November 30, 2023	Translation			Liability			(Loss) On		On
(In thousands)	Adjustments			Adjustments			Derivatives		Securities			Total
Balance at June 1, 2023	$	(465,375	)	$	(148,764	)	$	11,405	$	(2,201	)	$	(604,935	)
Current period comprehensive (loss) income		9,117			-			-		67			9,184
Income taxes associated with current period comprehensive income (loss)		(319	)		-			-		(61	)		(380	)
Amounts reclassified from accumulated other comprehensive income (loss)		-			8,622			-		(179	)		8,443
Income taxes reclassified into earnings		-			(2,012	)		-		10			(2,002	)
Balance at November 30, 2023	$	(456,577	)	$	(142,154	)	$	11,405	$	(2,364	)	$	(589,690	)


				Pension And
				Other
	Foreign			Postretirement			Unrealized			Unrealized
	Currency			Benefit			Gain			Gain (Loss)
Six Months Ended November 30, 2022	Translation			Liability			(Loss) On			On
(In thousands)	Adjustments			Adjustments			Derivatives			Securities			Total
Balance at June 1, 2022	$	(395,473	)	$	(153,383	)	$	13,171		$	(1,652	)	$	(537,337	)
Current period comprehensive (loss) income		(71,936	)		-			-			(802	)		(72,738	)
Income taxes associated with current period comprehensive income (loss)		2,191			-			-			211			2,402
Amounts reclassified from accumulated other comprehensive income (loss)		-			10,326			(1,211	)		22			9,137
Income taxes reclassified into earnings		-			(2,505	)		-			(5	)		(2,510	)
Balance at November 30, 2022	$	(465,218	)	$	(145,562	)	$	11,960		$	(2,226	)	$	(601,046	)

NOTE 11 — EARNINGS PER SHARE

The following table sets forth the reconciliation of the numerator and denominator of basic and diluted earnings per share ("EPS") for the three- and ~~nine-month~~six-month periods ended ~~February 28,~~November 30, 2023 and 2022.


	Three Months Ended						Nine Months Ended						Three Months Ended						Six Months Ended
	February 28,			February 28,			February 28,			February 28,			November 30,			November 30,			November 30,			November 30,
(In thousands, except per share amounts)	2023			2022			2023			2022			2023			2022			2023			2022
Numerator for earnings per share:
Net income attributable to RPM International Inc. stockholders	$	26,974		$	33,019		$	327,331		$	292,476		$	145,505		$	131,344		$	346,587		$	300,357
Less: Allocation of earnings and dividends to participating securities		(274	)		(133	)		(1,593	)		(2,222	)		(707	)		(676	)		(1,597	)		(1,466	)
Net income available to common shareholders - basic		26,700			32,886			325,738			290,254			144,798			130,668			344,990			298,891
Reverse: Allocation of earnings and dividends to participating securities		-			133			1,593			2,222			-			676			-			1,466
Add: Undistributed earnings reallocated to unvested shareholders														2			-			4			-
Net income available to common shareholders - diluted	$	26,700		$	33,019		$	327,331		$	292,476		$	144,800		$	131,344		$	344,994		$	300,357
Denominator for basic and diluted earnings per share:
Basic weighted average common shares		127,495			127,943			127,564			128,013			127,758			127,585			127,816			127,600
Average diluted options and awards		540			1,759			1,225			1,609			491			1,326			496			1,287
Total shares for diluted earnings per share (1)		128,035			129,702			128,789			129,622			128,249			128,911			128,312			128,887
Earnings Per Share of Common Stock Attributable to
RPM International Inc. Stockholders:
Basic Earnings Per Share of Common Stock	$	0.21		$	0.26		$	2.55		$	2.27		$	1.13		$	1.02		$	2.70		$	2.34
Method used to calculate basic earnings per share	Two-class			Two-class			Two-class			Two-class			Two-class			Two-class			Two-class			Two-class
Diluted Earnings Per Share of Common Stock	$	0.21		$	0.25		$	2.54		$	2.26		$	1.13		$	1.02		$	2.69		$	2.33
Method used to calculate diluted earnings per share	Two-class			Treasury			Treasury			Treasury			Two-class			Treasury			Two-class			Treasury

(1) For the three and ~~nine~~six months ended ~~February 28,~~November 30, 2023, approximately ~~680,000~~360,000 and 280,000 shares of stock granted under stock-based compensation plans were excluded from the calculation of diluted EPS, as the effect would have been anti-dilutive. For the three and ~~nine~~six months ended ~~February 28,~~November 30, 2022, approximately ~~320,000~~700,000 and ~~655,000~~720,000 shares of stock granted under stock-based compensation plans were excluded from the calculation of diluted EPS, as the effect would have been anti-dilutive.

NOTE 1412 — PENSION PLANS

We offer defined benefit pension plans, defined contribution pension plans, and various postretirement benefit plans. The following tables provide the retirement-related benefit plans’ impact on income before income taxes for the three- and ~~nine-month~~six-month periods ended ~~February 28,~~November 30, 2023 and 2022:


	U.S. Plans						Non-U.S. Plans						U.S. Plans						Non-U.S. Plans
	Three Months Ended						Three Months Ended						Three Months Ended						Three Months Ended
(In thousands)	February 28,			February 28,			February 28,			February 28,			November 30,			November 30,			November 30,			November 30,
Pension Benefits	2023			2022			2023			2022			2023			2022			2023			2022
Service cost	$	10,890		$	11,914		$	951		$	1,348		$	10,913		$	10,890		$	887		$	951
Interest cost		7,173			3,842			1,728			1,282			8,992			7,173			1,935			1,728
Expected return on plan assets		(9,536	)		(10,386	)		(1,727	)		(2,073	)		(10,518	)		(9,536	)		(2,400	)		(1,727	)
Amortization of:
Prior service cost (credit)		-			1			(27	)		(38	)		1			-			(31	)		(27	)
Net actuarial losses recognized		4,487			4,225			125			114			4,205			4,487			209			125
Net Periodic Benefit Cost	$	13,014		$	9,596		$	1,050		$	633		$	13,593		$	13,014		$	600		$	1,050


	U.S. Plans						Non-U.S. Plans					U.S. Plans						Non-U.S. Plans
	Three Months Ended						Three Months Ended					Three Months Ended						Three Months Ended
(In thousands)	February 28,			February 28,			February 28,			February 28,		November 30,			November 30,			November 30,			November 30,
Postretirement Benefits	2023			2022			2023			2022		2023			2022			2023			2022
Service cost	$	-		$	-		$	287		$	432	$	-		$	-		$	569		$	287
Interest cost		21			10			368			299		22			21			390			368
Amortization of:
Prior service (credit)		(30	)		(40	)		-			-		-			(30	)		-			-
Net actuarial losses (gains) recognized		11			15			(14	)		32
Net Periodic Benefit Cost (Credit)	$	2		$	(15	)	$	641		$	763
Net actuarial (gains) losses recognized													(4	)		11			(12	)		(14	)
Net Periodic Benefit Cost												$	18		$	2		$	947		$	641


	U.S. Plans						Non-U.S. Plans						U.S. Plans						Non-U.S. Plans
	Nine Months Ended						Nine Months Ended						Six Months Ended						Six Months Ended
(In thousands)	February 28,			February 28,			February 28,			February 28,			November 30,			November 30,			November 30,			November 30,
Pension Benefits	2023			2022			2023			2022			2023			2022			2023			2022
Service cost	$	32,670		$	35,742		$	2,853		$	4,044		$	21,826		$	21,780		$	1,774		$	1,902
Interest cost		21,519			11,526			5,184			3,846			17,984			14,346			3,870			3,456
Expected return on plan assets		(28,608	)		(31,158	)		(5,181	)		(6,219	)		(21,036	)		(19,072	)		(4,800	)		(3,454	)
Amortization of:
Prior service cost (credit)		-			3			(81	)		(114	)		2			-			(62	)		(54	)
Net actuarial losses recognized		13,461			12,675			375			342			8,410			8,974			418			250
Net Periodic Benefit Cost	$	39,042		$	28,788		$	3,150		$	1,899		$	27,186		$	26,028		$	1,200		$	2,100

U.S. Plans

Non-U.S. Plans

Nine Months Ended

Nine Months Ended

(In thousands)
February 28,

February 28,

February 28,

February 28,

Postretirement Benefits
2023

2022

2023

2022

Service cost
$
-

$
-

$
861

$
1,296

Interest cost

63

30

1,104

897

Amortization of:

Prior service (credit)

(90
)

(120
)

-

-

Net actuarial losses (gains) recognized

33

45

(42
)

96

Net Periodic Benefit Cost (Credit)
$
6

$
(45
)
$
1,923

$
2,289


	U.S. Plans						Non-U.S. Plans
	Six Months Ended						Six Months Ended
(In thousands)	November 30,			November 30,			November 30,			November 30,
Postretirement Benefits	2023			2022			2023			2022
Service cost	$	-		$	-		$	1,138		$	574
Interest cost		44			42			780			736
Amortization of:
Prior service (credit)		-			(60	)		-			-
Net actuarial (gains) losses recognized		(8	)		22			(24	)		(28	)
Net Periodic Benefit Cost	$	36		$	4		$	1,894		$	1,282

~~Due~~Net periodic pension cost for fiscal 2024 is similar to ~~a reduction in return on plan assets and~~our fiscal 2023 cost due to higher interest costs, which are ~~only~~ partially offset by ~~a reduction~~an increase in ~~service cost due to higher discount rates, net periodic pension cost for fiscal 2023 is higher than our fiscal 2022 expense.~~expected return on plan assets. We expect that pension expense will fluctuate on a year-to-year basis, depending upon the investment performance of plan assets and potential changes in interest rates, and these fluctuations may have a material impact on our consolidated financial results in the future. We previously disclosed in our financial statements for the fiscal year ended May 31, ~~2022~~2023 that we are required and expect to contribute approximately $~~1.3~~0.7 million to our retirement plans in the U.S. and approximately $~~4.9~~5.7 million to plans outside the U.S. during the current fiscal ~~year and that~~year. Throughout fiscal 2024, we will evaluate whether to make additional ~~contributions throughout fiscal 2023. As a result of our evaluation, we elected to contribute $62.3~~ ~~million to the main pension plan in the U.S. during the current quarter, which will result in total expected U.S. contributions of $63.6~~ ~~million during fiscal year 2023.~~contributions.

NOTE 1614 — REVENUE

We operate a portfolio of businesses that manufacture and sell a variety of product lines that include specialty paints, protective coatings, roofing systems, sealants and adhesives, among other things. We disaggregate revenues from the sales of our products and services based upon geographical location by each of our reportable segments, which are aligned by similar economic factors, trends and customers, which best depict the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. See Note ~~17,~~15, “Segment Information,” to the Consolidated Financial Statements for further details regarding our disaggregated revenues, as well as a description of each of the unique revenue streams related to each of our four reportable segments.

Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration we expect to receive in exchange for those products or services. The majority of our revenue is recognized at a point in time. However, we also record revenues generated under construction contracts, mainly in connection with the installation of specialized roofing and flooring systems and related services. For certain polymer flooring installation projects, we account for our revenue using the output method, as we consider square footage of completed flooring to be the best measure of progress toward the complete satisfaction of the performance obligation. In contrast, for certain of our roofing installation projects, we account for our revenue using the input method, as that method ~~was~~is the best measure of performance as it considers costs incurred in relation to total expected project costs, which essentially represents the transfer of control for roofing systems to the customer. In general, for our construction contracts, we record contract revenues and related costs as our contracts progress on an over-time model.

We have elected to apply the practical expedient to recognize revenue net of allowances for returns and any taxes collected from customers, which are subsequently remitted to governmental authorities. Payment terms and conditions vary by contract type, although our customers’ payment terms generally include a requirement to pay within 30 to 60 days of fulfilling our performance obligations. In instances where the timing of revenue recognition differs from the timing of invoicing, we have determined that our contracts generally do not include a significant financing component. We have elected to apply the practical expedient to treat all shipping and handling costs as fulfillment costs, as a significant portion of these costs are incurred prior to control transfer.

Significant Judgments

Our contracts with customers may include promises to transfer multiple products and/or services to a customer. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. For example, judgment is required to determine whether products sold in connection with the sale of installation services are considered distinct and accounted for separately, or not distinct and accounted for together with installation services and recognized over time.

We provide customer rebate programs and incentive offerings, including special pricing and co-operative advertising arrangements, promotions and other volume-based incentives. These customer programs and incentives are considered variable consideration and recognized as a reduction of net sales. Up-front consideration provided to customers is capitalized as a component of other assets and amortized over the estimated life of the contractual arrangement. We include in revenue variable consideration only to the extent that

it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the variable consideration is resolved. In general, this determination is made based upon known customer program and incentive offerings at the time of sale and expected sales volume forecasts as it relates to our volume-based incentives. This determination is updated each reporting period.

Certain of our contracts include contingent consideration that is receivable only upon the final inspection and acceptance of a project. We include estimates of such variable consideration in our transaction price. Based on historical experience, we consider the probability-based expected value method appropriate to estimate the amount of such variable consideration.

Our products are generally sold with a right of return, and we may provide other credits or incentives, which are accounted for as variable consideration when estimating the amount of revenue to recognize. Returns and credits are estimated at contract inception and updated at the end of each reporting period as additional information becomes available. We record a right of return liability to accrue for expected customer returns. Historical actual returns are used to estimate future returns as a percentage of current sales. Obligations for returns and refunds were not material individually or in the aggregate.

We offer assurance type warranties on our products as well as separately sold warranty contracts. Revenue related to warranty contracts that are sold separately is recognized over the life of the warranty term. Warranty liabilities for our assurance type warranties are discussed further in Note ~~15,~~13, “Contingencies and Accrued Losses,” to the Consolidated Financial Statements.

Contract Balances

Timing of revenue recognition may differ from the timing of invoicing customers. Our contract assets are recorded for products and services that have been provided to our customer but have not yet been billed and are included in prepaid expenses and other current assets in our ~~consolidated balance sheets.~~Consolidated Balance Sheets. Our short-term contract liabilities consist of advance payments, or deferred revenue, and are included in other accrued liabilities in our ~~consolidated balance sheets.~~Consolidated Balance Sheets.

Trade accounts receivable, net of allowances, and net contract assets consisted of the following:


(In thousands, except percentages)	February 28, 2023			May 31, 2022			$ Change			% Change			November 30, 2023			May 31, 2023			$ Change			% Change
Trade accounts receivable, less allowances	$	1,203,212		$	1,432,632		$	(229,420	)		-16.0	%	$	1,233,340		$	1,503,040		$	(269,700	)		(17.9	%)

Contract assets	$	66,100		$	57,234		$	8,866			15.5	%	$	52,603		$	49,188		$	3,415			6.9	%
Contract liabilities - short-term		(53,481	)		(44,938	)		(8,543	)		19.0	%		(42,855	)		(42,396	)		(459	)		1.1	%
Net Contract Assets	$	12,619		$	12,296		$	323					$	9,748		$	6,792		$	2,956

The $~~0.3~~3.0 million increase in our net contract assets from May 31, ~~2022~~2023 to ~~February 28,~~November 30, 2023, resulted primarily due to the timing of construction jobs in progress at ~~February 28,~~November 30, 2023 versus May 31, ~~2022.~~ 2023. During the three- and six-month periods ending November 30, 2023 we recognized $7.2 million and $28.5 million of revenue, which is included in contract liabilities as of May 31, 2023. During the three- and six-month periods ending November 30, 2022 we recognized $5.5 million and $18.4 million of revenue, which is included in contract liabilities as of May 31, 2022.

We also record long-term deferred revenue, which amounted to $~~60.8~~79.5 million and $~~62.5~~76.6 million as of ~~February 28,~~November 30, 2023 and May 31, ~~2022,~~2023, respectively. The long-term portion of deferred revenue is related to warranty contracts and is included in other long-term liabilities in our ~~consolidated balance sheets.~~Consolidated Balance Sheets.

We have elected to adopt the practical expedient to not disclose the aggregate amount of transaction price allocated to performance obligations that are unsatisfied as of the end of the reporting period for performance obligations that are part of a contract with an original expected duration of one year or less.

We recognize an asset for the incremental costs of obtaining a contract with a customer if we expect the benefit of those costs to be longer than one year. As our contract terms are primarily one year or less in duration, we have elected to apply a practical expedient to expense costs as incurred for costs to obtain a contract with a customer when the amortization period would have been one year or less. These costs include our internal sales force compensation program and certain incentive programs as we have determined annual compensation is commensurate with annual sales activities.

Allowance for Credit Losses

Our primary allowance for credit losses is the allowance for doubtful accounts. The allowance for doubtful accounts reduces the trade accounts receivable balance to the estimated net realizable value equal to the amount that is expected to be collected. The allowance was based on assessments of current creditworthiness of customers, historical collection experience, the aging of receivables and other currently available evidence. Trade accounts receivable balances are written-off against the allowance if a final determination of uncollectibility is made. All provisions for allowances for doubtful collection of accounts are included in ~~selling, general and administrative~~SG&A expenses.

The following tables summarize the activity for the allowance for credit losses for the three and ~~nine~~six months ended ~~February 28,~~November 30, 2023 and 2022:


	Three Months Ended						Nine Months Ended						Three Months Ended						Six Months Ended
	February 28,			February 28,			February 28,			February 28,			November 30,			November 30,			November 30,			November 30,
(In thousands)	2023			2022			2023			2022			2023			2022			2023			2022
Beginning Balance	$	48,041		$	50,932		$	46,669		$	55,922		$	56,584		$	46,775		$	49,482		$	46,669
Bad debt provision		1,950			571			9,473			2,645			2,892			5,116			10,588			7,523
Uncollectible accounts written off, net of recoveries		(2,667	)		(2,436	)		(7,573	)		(7,335	)		(2,033	)		(4,238	)		(2,815	)		(4,905	)
Translation adjustments		(2	)		727			(1,247	)		(1,438	)		5			388			193			(1,246	)
Ending Balance	$	47,322		$	49,794		$	47,322		$	49,794		$	57,448		$	48,041		$	57,448		$	48,041

NOTE 1715 — SEGMENT INFORMATION

We operate a portfolio of businesses and product lines that manufacture and sell a variety of specialty paints, protective coatings, roofing systems, flooring solutions, sealants, cleaners and adhesives. We manage our portfolio by organizing our businesses and product lines into four reportable segments as outlined below, which also represent our operating segments. Within each operating segment, we manage product lines and businesses which generally address common markets, share similar economic characteristics, utilize similar technologies and can share manufacturing or distribution capabilities. Our four operating segments represent components of our business for which separate financial information is available that is utilized on a regular basis by our chief operating decision maker in determining how to allocate the assets of the company and evaluate performance. These four operating segments are each managed by an operating segment manager, who is responsible for the day-to-day operating decisions and performance evaluation of the operating segment’s underlying businesses. We evaluate the profit performance of our segments primarily based on income before income taxes, but also look to earnings (loss) before interest and taxes (“EBIT”), as a performance evaluation measure because interest (income) expense, net is essentially related to corporate functions, as opposed to segment operations.

Effective June 1, 2023, certain Asia Pacific businesses and management structure, formerly of our CPG segment, were transferred to our PCG segment to create operating efficiencies and a more unified go-to-market strategy in Asia Pacific. As a result of this business realignment, $11.4 million of goodwill was transferred from the CPG segment to the PCG segment. Additionally, this realignment is reflected in our reportable segments beginning with our first quarter of fiscal 2024. As such, historical segment results have been recast to reflect the impact of this change.

Our CPG reportable segment products are sold throughout North America and also account for ~~the majority~~a significant portion of our international sales. Our construction product lines are sold directly to contractors, distributors and end-users, such as industrial manufacturing facilities, public institutions and other commercial customers. Products and services within this reportable segment include construction sealants and adhesives, coatings and chemicals, roofing systems, concrete admixture and repair products, building envelope solutions, insulated cladding, flooring systems, and weatherproofing solutions.

Our PCG reportable segment products are sold throughout North America, as well as internationally, and are sold directly to contractors, distributors and end-users, such as industrial manufacturing facilities, public institutions and other commercial customers. Products and services within this reportable segment include high-performance flooring solutions, corrosion control and fireproofing coatings, infrastructure repair systems and fiberglass reinforced plastic ~~gratings and drainage systems.~~structures.

Our Consumer reportable segment manufactures and markets professional use and do-it-yourself (“DIY”) products for a variety of mainly consumer applications, including home improvement and personal leisure activities. Our Consumer reportable segment’s major manufacturing and distribution operations are located primarily in North America, along with a few locations in Europe, Australia and ~~other parts of the world.~~South America. Our Consumer reportable segment products are primarily sold directly to mass merchandisers, home improvement centers, hardware stores, paint stores, craft shops and through distributors. The Consumer reportable segment offers products that include specialty, hobby and professional paints; caulks; adhesives; cleaners; sandpaper and other abrasives; silicone sealants and wood stains.

Our SPG reportable segment products are sold throughout North America and ~~a few international locations,~~internationally, primarily in Europe. Our specialty product lines are sold directly to contractors, distributors and end-users, such as industrial manufacturing facilities, public institutions and other commercial customers. The SPG reportable segment offers products that include industrial cleaners, restoration services equipment, colorants, nail enamels, exterior finishes, edible coatings and specialty glazes for pharmaceutical and food industries, and other specialty original equipment manufacturer (“OEM”) coatings.

In addition to our four reportable segments, there is a category of certain business activities and expenses, referred to as corporate/other, that does not constitute an operating segment. This category includes our corporate headquarters and related administrative expenses, results of our captive insurance companies, gains or losses on the sales of certain assets and other expenses not directly associated with any reportable segment. Assets related to the corporate/other category consist primarily of investments, prepaid expenses and headquarters’ property and equipment. These corporate and other assets and expenses reconcile reportable segment data to total consolidated income before income taxes and identifiable assets.

We reflect income from our joint ventures on the equity method and receive royalties from our licensees.

The following tables present a disaggregation of revenues by geography, and the results of our reportable segments consistent with our management philosophy, by representing the information we utilize, in conjunction with various strategic, operational and other financial performance criteria, in evaluating the performance of our portfolio of businesses.


Three Months Ended November 30, 2023	CPG Segment		PCG Segment		Consumer Segment		SPG Segment		Consolidated
(In thousands)
Net Sales (based on shipping location)
United States	$	395,961	$	221,486	$	469,353	$	145,956	$	1,232,756
Foreign
Canada		70,181		25,301		39,601		1,303		136,386
Europe		126,915		58,452		57,646		20,905		263,918
Latin America		68,693		8,572		7,127		701		85,093
Asia Pacific		-		33,852		4,960		8,117		46,929
Other Foreign		-		27,193		-		-		27,193
Total Foreign		265,789		153,370		109,334		31,026		559,519
Total	$	661,750	$	374,856	$	578,687	$	176,982	$	1,792,275

Three Months Ended November 30, 2022	CPG Segment		PCG Segment		Consumer Segment		SPG Segment		Consolidated
(In thousands)
Net Sales (based on shipping location)
United States	$	379,722	$	214,738	$	504,108	$	179,160	$	1,277,728
Foreign
Canada		65,344		22,311		44,832		1,061		133,548
Europe		115,785		57,012		49,507		20,033		242,337
Latin America		51,592		10,640		7,365		334		69,931
Asia Pacific		-		28,058		4,547		11,496		44,101
Other Foreign		-		24,063		-		-		24,063
Total Foreign		232,721		142,084		106,251		32,924		513,980
Total	$	612,443	$	356,822	$	610,359	$	212,084	$	1,791,708

Six Months Ended November 30, 2023	CPG Segment		PCG Segment		Consumer Segment		SPG Segment		Consolidated
(In thousands)
Net Sales (based on shipping location)
United States	$	905,294	$	447,814	$	1,020,106	$	299,719	$	2,672,933
Foreign
Canada		149,342		49,547		85,941		2,432		287,262
Europe		254,871		122,122		118,512		41,381		536,886
Latin America		135,032		17,713		14,142		1,316		168,203
Asia Pacific		-		63,185		9,590		13,085		85,860
Other Foreign		-		52,988		-		-		52,988
Total Foreign		539,245		305,555		228,185		58,214		1,131,199
Total	$	1,444,539	$	753,369	$	1,248,291	$	357,933	$	3,804,132

Six Months Ended November 30, 2022	CPG Segment		PCG Segment		Consumer Segment		SPG Segment		Consolidated
(In thousands)
Net Sales (based on shipping location)
United States	$	843,130	$	438,408	$	1,054,727	$	352,023	$	2,688,288
Foreign
Canada		135,482		44,973		89,082		2,047		271,584
Europe		232,980		113,720		103,125		42,158		491,983
Latin America		107,264		20,122		13,551		740		141,677
Asia Pacific		-		57,111		9,366		17,813		84,290
Other Foreign		-		46,206		-		-		46,206
Total Foreign		475,726		282,132		215,124		62,758		1,035,740
Total	$	1,318,856	$	720,540	$	1,269,851	$	414,781	$	3,724,028

Three Months Ended February 28, 2023

CPG
Segment

PCG
Segment

Consumer
Segment

SPG
Segment

Consolidated

(In thousands)

Net Sales (based on shipping location)

United States

$
280,916

$
189,913

$
431,829

$
163,056

$
1,065,714

Foreign

Canada

34,934

18,662

37,957

898

92,451

Europe

107,609

56,192

47,613

19,084

230,498

Latin America

51,728

9,047

6,666

455

67,896

Asia Pacific

21,827

5,784

4,466

7,511

39,588

Other Foreign

-

20,029

-

-

20,029

Total Foreign

216,098

109,714

96,702

27,948

450,462

Total

$
497,014

$
299,627

$
528,531

$
191,004

$
1,516,176

Three Months Ended February 28, 2022

CPG
Segment

PCG
Segment

Consumer
Segment

SPG
Segment

Consolidated

(In thousands)

Net Sales (based on shipping location)

United States

$
259,606

$
167,623

$
403,524

$
154,516

$
985,269

Foreign

Canada

39,479

17,220

29,432

1,378

87,509

Europe

114,226

54,057

46,695

24,121

239,099

Latin America

47,459

7,720

7,707

368

63,254

Asia Pacific

21,256

5,431

4,259

8,988

39,934

Other Foreign

-

18,814

-

-

18,814

Total Foreign

222,420

103,242

88,093

34,855

448,610

Total

$
482,026

$
270,865

$
491,617

$
189,371

$
1,433,879

Nine Months Ended February 28, 2023

CPG
Segment

PCG
Segment

Consumer
Segment

SPG
Segment

Consolidated

(In thousands)

Net Sales (based on shipping location)

United States

$
1,124,047

$
628,320

$
1,486,556

$
515,078

$
3,754,001

Foreign

Canada

170,415

63,636

127,039

2,946

364,036

Europe

340,589

169,912

150,738

61,242

722,481

Latin America

158,992

29,168

20,217

1,195

209,572

Asia Pacific

66,782

17,941

13,832

25,324

123,879

Other Foreign

-

66,235

-

-

66,235

Total Foreign

736,778

346,892

311,826

90,707

1,486,203

Total

$
1,860,825

$
975,212

$
1,798,382

$
605,785

$
5,240,204

Nine Months Ended February 28, 2022

CPG
Segment

PCG
Segment

Consumer
Segment

SPG
Segment

Consolidated

(In thousands)

Net Sales (based on shipping location)

United States

$
974,201

$
531,655

$
1,267,373

$
457,115

$
3,230,344

Foreign

Canada

184,940

54,355

93,714

5,609

338,618

Europe

377,220

172,850

162,032

74,446

786,548

Latin America

144,366

20,958

22,935

1,407

189,666

Asia Pacific

59,811

17,579

13,169

26,473

117,032

Other Foreign

40

61,590

-

-

61,630

Total Foreign

766,377

327,332

291,850

107,935

1,493,494

Total

$
1,740,578

$
858,987

$
1,559,223

$
565,050

$
4,723,838


	Three Months Ended						Nine Months Ended						Three Months Ended						Six Months Ended
(In thousands)	February 28,			February 28,			February 28,			February 28,			November 30,			November 30,			November 30,			November 30,
Income (Loss) Before Income Taxes	2023			2022			2023			2022			2023			2022			2023			2022
CPG Segment	$	8,181		$	31,498		$	192,836		$	276,223		$	98,398		$	74,038		$	238,850		$	180,793
PCG Segment		(8,352	)		24,917			83,896			97,849			61,502			46,709			106,323			96,110
Consumer Segment		68,146			16,893			278,708			95,912			98,066			93,873			229,895			210,562
SPG Segment		39,482			25,881			94,798			71,028			10,145			27,431			26,542			55,316
Corporate/Other		(64,970	)		(58,692	)		(207,495	)		(155,890	)		(72,287	)		(66,916	)		(136,632	)		(142,525	)
Consolidated	$	42,487		$	40,497		$	442,743		$	385,122		$	195,824		$	175,135		$	464,978		$	400,256


(In thousands)	February 28,		May 31,		November 30,		May 31,
Identifiable Assets	2023		2022		2023		2023
CPG Segment	$	2,163,171	$	2,160,071	$	2,082,505	$	2,206,403
PCG Segment		1,102,585		1,115,780		1,199,277		1,209,819
Consumer Segment		2,360,032		2,405,764		2,232,354		2,384,782
SPG Segment		822,343		839,419		774,212		804,762
Corporate/Other		161,292		186,672		249,029		176,238
Consolidated	$	6,609,423	$	6,707,706	$	6,537,377	$	6,782,004

23NOTE 16 — SUBSEQUENT EVENT

On December 27, 2023, we prepaid the $250.0 million of principal outstanding on our term loan which had a maturity date of August 1, 2025.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Our financial statements include all of our majority-owned and controlled subsidiaries. Investments in less-than-majority-owned joint ventures over which we have the ability to exercise significant influence are accounted for under the equity method. Preparation of our financial statements requires the use of estimates and assumptions that affect the reported amounts of our assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. We continually evaluate these estimates, including those related to our allowances for doubtful accounts; reserves for excess and obsolete inventories; allowances for recoverable sales and/or value-added taxes; uncertain tax positions; useful lives of property, plant and equipment; goodwill and other intangible assets; environmental, warranties and other contingent liabilities; income tax valuation allowances; pension plans; and the fair value of financial instruments. We base our estimates on historical experience, our most recent facts, and other assumptions that we believe to be reasonable under the circumstances. These estimates form the basis for making judgments about the carrying values of our assets and liabilities. Actual results, which are shaped by actual market conditions, may differ materially from our estimates.

~~Our annual goodwill impairment analysis for fiscal 2022 did not result~~Effective June 1, 2023, in ~~any indicators of impairment.~~

~~As previously reported, we announced~~connection with our MAP 2025 ~~operational~~operating improvement ~~initiative. Due to the challenged macroeconomic environment,~~program, we ~~evaluated~~realigned certain ~~business restructuring actions, specifically~~businesses and management structures within our ~~go to market strategy for operating~~CPG, PCG and SPG segments. As outlined in ~~Europe. During the third quarter ended February 28, 2023, due to declining profitability~~Note 15, “Segment Information,” our CPG APAC and ~~regulatory headwinds, management decided to restructure the USL~~CPG India businesses, formerly of our Sealants reporting unit within our CPG segment, were transferred to our Platform component within our PCG ~~segment, and is correspondingly exploring strategic alternatives for our infrastructure services business within~~segment. As a result of this change, we designated the ~~U.K. which represents approximately 30%of annual revenues of the reporting unit.~~

~~Due to this decision, we determined that an interim goodwill impairment assessment was required,~~Platform component as well as an impairment assessment for our other long-lived assets. Accordingly, for the three and nine months ended, February 28, 2023, we recorded an impairment loss totaling $36.7 million for the impairment of goodwill and $2.5 million for the impairment of an indefinite-lived tradename in our USLa separate reporting unit within our PCG segment. Additionally, within our PCG segment, certain businesses of our USL reporting unit were transferred to our Fibergrate, Carboline and Stonhard reporting units. As a result of this change, USL was no longer designated as a separate reporting unit. Within our SPG segment, two new reporting units were formed as our former DayGlo and Kirker reporting units were combined into one reporting unit: The Color Group, and our former Wood Finishes, Kop-Coat Protection Products, TCI and Modern Recreational Technologies reporting units were combined into one reporting unit: The Industrial Coatings Group.

During the first quarter of fiscal 2024, we performed a goodwill impairment test for the reporting units affected by the business realignment and change in management structure using either a qualitative or a quantitative assessment. We ~~did not record any impairments~~concluded that the estimated fair values exceeded the carrying values for ~~our definite-lived long-lived assets~~these reporting units, and accordingly, no indications of impairment were identified as a result of ~~this assessment. Refer to Note 4, “Goodwill and Other Intangible Assets,” for further discussion.~~

Should future earnings and cash flows at our reporting units decline, discount rates increase, and/or other relevant events and circumstances change that affect the fair value of our reporting units, future impairment charges to goodwill and other intangible assets may be required.these changes.

A comprehensive discussion of the accounting policies and estimates that are the most critical to our financial statements are set forth in our Annual Report on Form 10-K for the year ended May 31, ~~2022.~~2023.

Effective June 1, 2023, certain Asia Pacific businesses and management structure, formerly of our CPG segment, were transferred to our PCG segment to create operating efficiencies and a more unified go-to-market strategy in Asia Pacific. This realignment is reflected in our reportable segments beginning with our first quarter of fiscal 2024. As such, historical segment results have been recast to reflect the impact of this realignment.

The following tables reflect the results of our reportable segments consistent with our management philosophy, and represent the information we utilize, in conjunction with various strategic, operational and other financial performance criteria, in evaluating the performance of our portfolio of businesses.


	Three Months Ended						Nine Months Ended						Three Months Ended						Six Months Ended
	February 28,			February 28,			February 28,			February 28,			November 30,			November 30,			November 30,			November 30,
(In thousands)	2023			2022			2023			2022			2023			2022			2023			2022
Net Sales
CPG Segment	$	497,014		$	482,026		$	1,860,825		$	1,740,578		$	661,750		$	612,443		$	1,444,539		$	1,318,856
PCG Segment		299,627			270,865			975,212			858,987			374,856			356,822			753,369			720,540
Consumer Segment		528,531			491,617			1,798,382			1,559,223			578,687			610,359			1,248,291			1,269,851
SPG Segment		191,004			189,371			605,785			565,050			176,982			212,084			357,933			414,781
Consolidated	$	1,516,176		$	1,433,879		$	5,240,204		$	4,723,838		$	1,792,275		$	1,791,708		$	3,804,132		$	3,724,028
Income Before Income Taxes (a)
CPG Segment
Income Before Income Taxes (a)	$	8,181		$	31,498		$	192,836		$	276,223		$	98,398		$	74,038		$	238,850		$	180,793
Interest (Expense), Net (b)		(3,456	)		(1,735	)		(7,979	)		(5,254	)		(555	)		(3,796	)		(3,951	)		(4,576	)
EBIT (c)	$	11,637		$	33,233		$	200,815		$	281,477		$	98,953		$	77,834		$	242,801		$	185,369
PCG Segment
(Loss) Income Before Income Taxes (a)	$	(8,352	)	$	24,917		$	83,896		$	97,849
Income Before Income Taxes (a)													$	61,502		$	46,709		$	106,323		$	96,110
Interest Income, Net (b)		474			76			947			407			1,425			332			2,549			526
EBIT (c)	$	(8,826	)	$	24,841		$	82,949		$	97,442		$	60,077		$	46,377		$	103,774		$	95,584
Consumer Segment
Income Before Income Taxes (a)	$	68,146		$	16,893		$	278,708		$	95,912		$	98,066		$	93,873		$	229,895		$	210,562
Interest Income, Net (b)		18			62			45			211			869			1			1,619			27
EBIT (c)	$	68,128		$	16,831		$	278,663		$	95,701		$	97,197		$	93,872		$	228,276		$	210,535
SPG Segment
Income Before Income Taxes (a)	$	39,482		$	25,881		$	94,798		$	71,028		$	10,145		$	27,431		$	26,542		$	55,316
Interest Income (Expense), Net (b)		28			(18	)		23			(82	)		104			(7	)		203			(5	)
EBIT (c)	$	39,454		$	25,899		$	94,775		$	71,110		$	10,041		$	27,438		$	26,339		$	55,321
Corporate/Other
(Loss) Before Income Taxes (a)	$	(64,970	)	$	(58,692	)	$	(207,495	)	$	(155,890	)	$	(72,287	)	$	(66,916	)	$	(136,632	)	$	(142,525	)
Interest (Expense), Net (b)		(25,097	)		(24,756	)		(72,511	)		(60,830	)		(26,902	)		(17,597	)		(44,858	)		(47,414	)
EBIT (c)	$	(39,873	)	$	(33,936	)	$	(134,984	)	$	(95,060	)	$	(45,385	)	$	(49,319	)	$	(91,774	)	$	(95,111	)
Consolidated
Net Income	$	27,239		$	33,249		$	328,060		$	293,160		$	145,815		$	131,542		$	347,128		$	300,821
Add: Provision for Income Taxes		15,248			7,248			114,683			91,962			50,009			43,593			117,850			99,435
Income Before Income Taxes (a)		42,487			40,497			442,743			385,122			195,824			175,135			464,978			400,256
Interest (Expense)		(30,756	)		(22,016	)		(85,385	)		(64,127	)		(30,348	)		(27,918	)		(62,166	)		(54,629	)
Investment Income (Expense), Net		2,723			(4,355	)		5,910			(1,421	)
Investment Income, Net														5,289			6,851			17,728			3,187
EBIT (c)	$	70,520		$	66,868		$	522,218		$	450,670		$	220,883		$	196,202		$	509,416		$	451,698

(a) The presentation includes a reconciliation of Income (Loss) Before Income Taxes, a measure defined by GAAP, to EBIT.

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

(c) EBIT is a non-GAAP measure and is defined as Earnings (Loss) Before Interest and Taxes. We evaluate the profit performance of our segments based on income before income taxes, but also look to EBIT, as a performance evaluation measure because Interest ~~(Income) Expense,~~Income (Expense), Net is essentially related to corporate functions, as opposed to segment operations. We believe EBIT is useful to investors for this purpose as well, using EBIT 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 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. Our underwriters and bankers consistently require inclusion of this measure in offering memoranda in conjunction with any debt underwriting or bank financing. EBIT may not be indicative of our historical operating results, nor is it meant to be predictive of potential future results.

Our CPG segment generated organic sales growth during the third quarter of fiscal 2023 when compared to the same quarter in the prior year driven by strength in its concrete admixtures and repair business, which continued to benefit from market share gains along with infrastructure and reshoring-related projects. Improved pricing in response to continued cost inflation and strength in restoration systems for roofing, facades, and parking structures also contributed to sales growth during the quarter. This growth was partially offset by unfavorable foreign exchange translation and deteriorated economic conditions in Europe, along with reduced demand for businesses that serve residential and certain commercial construction markets.

~~Our PCG~~ segment generated significant organic sales growth during the ~~third~~second quarter of fiscal ~~2023~~2024 in ~~nearly~~ all the major business units in the segment when compared to the same quarter in the prior year. Performing particularly well were concrete admixtures and repair businesses which generated growth from increased demand for engineered solutions serving infrastructure and reshoring-related projects. Businesses serving high-performance building construction and remodeling also performed well. International growth was driven by infrastructure-related demand in Latin America and more focused sales strategies in Europe.

Our PCG segment generated sales growth during the second quarter of fiscal 2024 when compared to the same quarter in the prior year. Performing particularly well were businesses that provide ~~fiberglass reinforced plastic grating, protective coatings and~~turnkey flooring systems, ~~all of~~ which ~~were strategically well-positioned to benefit~~benefited from ~~growing vertical markets such as pharmaceuticals, energy and industries reshoring their manufacturing, which includes semiconductor chip and electric vehicle assembly and battery manufacturing.~~increased demand for reshoring-related projects. This increase was also facilitated by improved pricing and strong demand in ~~response to continued cost inflation.~~emerging markets, partially offset by the divestiture of USL's Bridgecare services division in the first quarter of fiscal 2024.

Our Consumer segment ~~generated significant~~experienced organic sales ~~growth~~declines in the second quarter of fiscal 2024 driven by reduced DIY takeaway at retail as consumers focused spending on travel and entertainment and housing turnover hit multi-year lows. Additionally, retail customers reduced their inventory levels. This decline is in comparison to ~~the~~a strong prior year ~~due to~~when sales grew 15.3%. These macroeconomic pressures were partially offset by market share gains, strength in international markets and improved pricing to catch up with ~~continued~~ cost inflation. This growth was partially offset by volume declines as customers were cautious on increasing inventory levels and consumer takeaway at retail slowed. The prior year comparison was negatively impacted by supply chain disruptions as a result of reduced raw material supply, particularly of alkyd-based resins.

Our SPG segment ~~generated organic~~experienced sales ~~growth~~declines during the second quarter of fiscal 2024, which were driven by several factors. Lower volumes at businesses supplying specialty OEM markets were negatively impacted by a slowdown in the residential housing market. The divestiture of the non-core furniture warranty business in the third quarter of fiscal year 2023 ~~particularly in its~~also reduced sales versus the prior period. Finally, the segment's disaster restoration business ~~as operational improvement investments allowed~~benefited from the ~~business~~response to ~~quickly respond~~Hurricane Ian in the prior period, compared to ~~restoration efforts following inclement weather. The segment's businesses serving~~limited storm activity in the ~~food coatings and additives market also generated strong growth as a result of strategically refocusing sales management and selling efforts. Decreased demand at businesses serving OEM markets~~current period. Improved pricing partially offset this ~~growth.~~sales decline.

Gross Profit Margin Our consolidated gross profit margin of ~~35.5%~~41.7% of net sales for the ~~third~~second quarter of fiscal ~~2023~~2024 compares to a consolidated gross profit margin of ~~34.8%~~38.5% for the comparable period a year ago. The current quarter gross profit margin increase of approximately ~~0.7%~~3.2%, or 70320 basis points (“bps”), resulted primarily from ~~higher~~ selling ~~prices in response to continued cost inflation~~price increases and our MAP 2025 initiatives, which resulted in incremental savings in procurement and manufacturing that favorably impacted our gross ~~margin. Partially offsetting these improvements were continued inflation~~margin, in ~~raw materials and wages, along~~conjunction with ~~reduced fixed-cost leverage due to lower overall demand and internal initiatives to normalize inventories.~~benefits generated from the commodity cycle.

We expect ~~that these headwinds will~~year-over-year gross margins to continue ~~to be reflected~~improving in ~~our results throughout~~ the ~~remainder~~third quarter of fiscal ~~2023. In addition, rising interest rates have negatively impacted construction activity, existing home sales, and overall economic activity, resulting in reduced customer demand which we expect~~2024 due to ~~continue into~~MAP 2025 initiatives, including benefits generated from the ~~fourth quarter.~~commodity cycle.

SG&A Our consolidated SG&A expense during the period was ~~$16.5~~$32.7 million higher versus the same period last year ~~but decreased~~and increased to ~~29.7%~~29.2% of net sales from ~~30.2%~~27.3% of net sales for the prior year quarter. ~~Pay inflation and a $6.7 million increase in professional fees~~Variable costs associated with ~~our MAP 2025~~improved results, such as commission expense and incentives, were primary drivers, along with merit increases, increased healthcare costs, investments in growth initiatives ~~contributed~~and the $4.0 million expense related to ~~this increase, which was partially offset by~~ the ~~$20.0 million gain on business interruption insurance proceeds received during the quarter~~adverse legal ruling as described above in Note ~~15,~~13, "Contingencies and Other Accrued Losses," to the Consolidated Financial Statements. ~~Additional~~This was partially offset by reduced professional fees and reduced SG&A ~~expense recognized by companies we recently acquired approximated $3.2 million during the third quarter of fiscal 2023.~~related to divestitures.

Our CPG segment SG&A was approximately ~~$9.7~~$28.6 million higher for the ~~third~~second quarter of fiscal ~~2023~~2024 versus the comparable prior year period and increased as a percentage of net sales. The increase in expense was mainly due to ~~pay inflation, restoration of travel expenses compared to the prior year,~~variable costs associated with improved results such as commissions and bonuses, along with merit increases and increased professional fees and investments in growth initiatives, partially offset by reduced incentives. Additionally, companies recently acquired generated approximately $1.4 million of additional SG&A expense.

Our PCG segment SG&A was approximately ~~$7.8~~$3.4 million higher for the ~~third~~second quarter of fiscal ~~2023~~2024 versus the comparable prior year period but decreased ~~slightly~~ as a percentage of net sales. The increase in expense ~~as compared to the prior year period is~~was mainly due to increased commissions as a result of ~~higher volume~~improved results as well as ~~pay inflation and increased~~merit increases, partially offset by decreased bad debt ~~expense.~~expense and decreased SG&A related to divestitures.

Our Consumer segment SG&A ~~decreased~~increased by approximately ~~$7.0~~$1.8 million during the ~~third~~second quarter of fiscal ~~2023~~2024 versus the same period last year and ~~decreased~~increased as a percentage of net sales. The quarter-over-quarter ~~decrease~~increase in SG&A was primarily attributable to ~~the $20.0 million gain on business interruption~~merit increases and increased insurance ~~primarily~~costs, partially offset by ~~pay inflation, as well as increases~~a decrease in ~~advertising, promotional expense, travel expense and distribution costs. Additionally, companies recently acquired generated approximately $0.9 million of additional SG&A expense.~~incentive compensation.

Our SPG segment SG&A ~~was~~increased approximately ~~$4.5~~$3.4 million ~~higher~~ during the ~~third~~second quarter of fiscal ~~2023~~2024 versus the comparable prior year period and increased as a percentage of net sales. The increase in SG&A expense is attributable to ~~pay inflation~~the $4.0 million expense related to the adverse legal ruling and investments in strategic growth initiatives, ~~across each~~partially offset by the divestiture of ~~its~~the non-core furniture warranty business ~~units.~~in the third quarter of fiscal 2023, along with a reduction in incentive compensation.

SG&A expenses in our corporate/other category ~~increased by $1.5 million~~ during the ~~third~~second quarter of fiscal ~~2023 as compared to~~2024 decreased approximately $4.5 million versus last year’s ~~third~~second quarter. This ~~increase~~ was mainly due to ~~higher~~reduced professional fees related to our MAP 2025 operational improvement initiatives, partially offset by ~~reduced~~increased healthcare costs and ~~reduced stock compensation.~~IT expenses.

The following table summarizes the retirement-related benefit plans’ impact on income before income taxes for the three months ended ~~February 28,~~November 30, 2023 and 2022, as the service cost component has a significant impact on our SG&A expense:

We expect that pension expense will fluctuate on a year-to-year basis, depending upon the investment performance of plan assets and potential changes in interest rates, both of which are difficult to predict, but which may have a material impact on our consolidated financial results in the future.

We recorded ~~$4.2~~$1.2 million of restructuring charges during the three months ended ~~February 28,~~November 30, 2023 ~~of which $3.4 million~~ related to our MAP 2025 initiative, which is a multi-year restructuring plan to build on the achievements of MAP to Growth and designed to improve margins by streamlining business processes, reducing working capital, implementing commercial initiatives to drive improved mix and salesforce effectiveness and improving operating efficiency. ~~Initial phases of the plan have focused on commercial initiatives, operational efficiencies, and procurement.~~ For the three months ended ~~February 28,~~November 30, 2023, we incurred ~~$0.9~~$1.1 million related to severance and benefit costs and $0.1 million related to facility closure and other related costs associated with MAP 2025 and $2.5 million related to other restructuring costs associated with the impairment of an indefinite-lived tradename as described above in Note 4, “Goodwill and Other Intangible Assets,” of the Consolidated Financial Statements.2025. Most activities under MAP 2025 are anticipated to be completed by the end of fiscal ~~year 2025.~~2025; however, we expect some costs to extend beyond this date.

We currently expect to incur approximately ~~$14.7~~$31.8 million of future additional charges related to the implementation of MAP 2025.

For further information and details about MAP 2025, see Note 3, “Restructuring,” to the Consolidated Financial Statements.

(a) The interest rate increase was a result of higher market rates on the variable cost borrowings.

See Note 6,5, “Investment (Income), Net,” to the Consolidated Financial Statements for details.

See Note 6, “Other Expense, Net,” to the Consolidated Financial Statements for details.

~~See Note 7, "(Gain) on Sales of Assets and Business, Net," to the Consolidated Financial Statements for details.~~

~~See Note 8, “Other Expense (Income), Net,” to the Consolidated Financial Statements for details.~~

Our CPG segment ~~the most internationally concentrated segment,~~ results reflect volume growth, which resulted in improved fixed-cost utilization, favorable mix and MAP 2025 benefits, including benefits generated from the negative impact of deteriorated macroeconomic conditions in Europe, unfavorable foreign currency exchange, along with reduced demand for businesses that serve residential and certain commercial construction markets.commodity cycle. Our PCG segment results reflect ~~the $39.2 million goodwill~~positive volumes and ~~intangible asset impairment charges as described above in Note 4, "Goodwill~~pricing, favorable mix and ~~Other Intangible Assets," to the Consolidated Financial Statements,~~improved fixed-cost leverage, which ~~was partially offset~~were enhanced by ~~improved pricing in response to continued cost inflation, volume growth, and~~ MAP 2025 ~~benefits.~~initiatives. Our Consumer segment results reflect ~~improved pricing to catch up to continued cost inflation,~~gross margin expansion as a result of improved operating efficiencies related to MAP ~~2025 and the $20.0 million gain on business interruption insurance proceeds received during the quarter.~~2025. Our SPG segment results reflect sales declines, the ~~$24.7~~divestiture of the non-core furniture warranty business in the third quarter of fiscal 2023, incremental costs from investments in growth initiatives, the $4.0 million ~~gain on~~expense related to the ~~sale of its Guardian business, offset by unfavorable sales mix~~adverse legal ruling and reduced fixed cost leverage at ~~plants as a result of customer destocking and inventory normalization initiatives that resulted in reduced production.~~plants. Our Non-Op segment results reflect the unfavorable swing in investment returns and increased interest and healthcare expense, partially offset by reduced professional fees ~~and interest expense, offset by favorable swings in investment returns.~~related to our MAP 2025 operational improvement initiatives.

Income Tax Rate The effective income tax rate of ~~35.9%~~25.5% for the three months ended ~~February 28,~~November 30, 2023 compares to the effective income tax rate of ~~17.9%~~24.9% for the three months ended ~~February 28,~~November 30, 2022. The effective income tax rates for the ~~presented~~three-month periods ended November 30, 2023 and 2022 reflect variances from the 21% statutory rate due primarily to the unfavorable impact of state and local income taxes, non-deductible business expenses, and the net tax on foreign subsidiary income resulting from the global intangible low-taxed income provisions, partially offset by tax benefits related to equity compensation. Further, the effective tax rate for the three-month period ended February 28, 2023, reflects the unfavorable impact of a noncash impairment charge for goodwill that is nondeductible for tax purposes. The effective tax rate impact of the nondeductible impairment charge is magnified by the seasonally lower level of pre-tax income for the period. Additionally, the effective tax rate for the three-month period ended February 28, 2022 reflects net favorable changes in foreign tax credit valuation allowances.

Our CPG segment generated significant organic sales growth during the first ~~nine months~~half of fiscal ~~2023 when compared to the same prior year period driven by strength~~2024 in restoration systems for roofing, facades and parking structures. Additionally, the segment's concrete admixtures and repair business benefited from market share gains. Improved pricing in response to continued cost inflation also contributed to sales growth during the first nine months of the year. This growth was partially offset by deteriorating economic conditions and unfavorable foreign exchange translation in Europe, along with reduced demand for businesses that serve residential and certain commercial construction markets.

~~Our PCG segment generated significant sales growth during the first nine months of fiscal 2023 in nearly~~ all the major business units in the segment when compared to the same ~~period~~prior year period. Performing particularly well were providers of restoration systems for roofing, facades, and parking structures, which benefited from a strategic focus on repair and maintenance and its differentiated service model. Concrete admixtures and repair businesses also generated growth from increased demand for engineered solutions serving infrastructure and reshoring-related projects in addition to businesses serving high-performance building construction and remodeling. This increase was also facilitated by growth in Europe and Latin America.

Our PCG segment generated organic sales growth during the first half of fiscal 2024 when compared to the same prior ~~year.~~year period. Performing particularly well were businesses that provide turnkey flooring systems, ~~protective coatings, and fiberglass reinforced plastic grating, all of~~ which ~~were strategically well-positioned to benefit~~benefited from ~~growing vertical markets such as pharmaceuticals, energy and industries reshoring their manufacturing, which includes semiconductor chip and electric vehicle assembly and battery manufacturing.~~increased demand for reshoring-related projects. This increase was also facilitated by improved pricing and strong demand in ~~energy markets and price increases in response to continued cost inflation. Internationally, unfavorable foreign exchange translation was a headwind, but growth in~~ emerging ~~markets was strong in local currency.~~markets.

Our Consumer segment ~~generated significant~~experienced organic ~~growth during~~sales declines in the first ~~nine months~~half of fiscal ~~2023~~2024 driven by reduced DIY takeaway at retail as consumers focused spending on travel and entertainment and housing turnover hit multi-year lows. This decline is in comparison to ~~the~~a strong prior year, ~~period due to~~when sales grew 18.9%. These macroeconomic pressures were partially offset by market share gains, strength in international markets and improved raw material supply, particularly of alkyd-based resins secured through strategic investment in its supply chain, insourcing, and qualifying new suppliers. In addition, sales growth benefitted from price increasespricing to catch up with ~~continued~~ cost inflation and the prior year comparison when supply chain disruptions impacted raw material supply. This growth was partially offset by volume declines as customers were cautious on increasing inventory levels, consumer takeaway at retail slowed and by unfavorable foreign exchange translation, particularly in Europe.inflation.

Our SPG segment ~~generated significant~~experienced sales ~~growth~~declines during the first ~~nine months~~half of fiscal 2024, driven by lower volumes at businesses supplying OEM markets which have been negatively impacted by a slowdown in the residential housing market. The divestiture of the non-core furniture warranty business in the third quarter of fiscal year 2023 ~~particularly those businesses serving~~also reduced sales versus the ~~food coatings and additives market, as a result of strategically refocusing sales management and selling efforts. The~~prior period. Finally, the segment's disaster restoration business ~~also~~ benefited from the response to Hurricane Ian ~~and other inclement winter weather. This was~~in the prior period, compared to limited storm activity in the current period. Improved pricing partially offset ~~by unfavorable foreign exchange translation.~~these volume declines.

Gross Profit Margin Our consolidated gross profit margin of ~~37.6%~~41.5% of net sales for the first ~~nine months~~half of fiscal ~~2023~~2024 compares to a consolidated gross profit margin of ~~35.9%~~38.5% for the comparable period a year ago. The current period gross profit margin increase of approximately ~~1.7%~~3.0%, or ~~170 bps,~~300 basis points (“bps”), resulted primarily from ~~higher~~ selling ~~prices catching up~~price increases and our MAP 2025 initiatives, which resulted in incremental savings in procurement and manufacturing that favorably impacted our gross margin, in conjunction with ~~continued cost inflation as well as~~benefits generated from the realization of production efficiencies due to improved raw material supply, savings from MAP initiatives, and improved sales. Partially offsetting these improvements were continued inflation in raw materials and wages, along with reduced fixed-cost leverage due to lower overall demand and internal initiatives to normalize inventories.commodity cycle.

SG&A Our consolidated SG&A expense during the period was ~~$135.7~~$78.5 million higher versus the same period last year ~~but decreased slightly~~and increased to ~~27.2%~~27.7% of net sales from ~~27.3%~~26.2% of net sales for the prior year period. Variable costs associated with improved results, such as commission expense and bonuses, were ~~contributing factors. In addition, a $28.6~~primary drivers, along with merit increases, investments in growth initiatives, increased insurance costs, and $4.4 million ~~increase in professional fees associated with our MAP 2025 initiatives and pay inflation contributed~~of expense related to ~~this increase,~~the adverse legal ruling, which ~~was~~were partially offset by the ~~$20.0~~$11.1 million gain on business interruption insurance proceeds received during the ~~quarter as described above in~~period, reduced professional fees and reduced SG&A related to divestitures. See Note ~~15,~~13, "Contingencies and Other Accrued Losses," to the Consolidated Financial ~~Statements. Additional SG&A expense recognized by companies we recently acquired approximated $10.7 million during~~Statements for additional information regarding the ~~first nine months of fiscal 2023.~~

Our CPG segment SG&A was approximately ~~$37.5~~$59.0 million higher for the first ~~nine months~~half of fiscal ~~2023~~2024 versus the comparable prior year period and increased ~~slightly~~ as a percentage of net sales. The increase in expense was mainly due to ~~higher distribution~~variable costs ~~higher commission expense~~ associated with ~~higher sales, pay inflation, professional fees,~~improved results such as ~~well as restoration of travel expenses compared to the prior year~~commissions and bonuses, along with merit increases and investments in growth initiatives. ~~Additionally, companies recently acquired generated approximately $6.0 million of additional SG&A expense.~~

Our PCG segment SG&A was approximately ~~$31.4~~$23.3 million higher for the first ~~nine months~~half of fiscal ~~2023~~2024 versus the comparable prior year period ~~but decreased slightly~~and increased as a percentage of net sales. The increase in expense as compared to the prior year period is mainly due to increased commissions ~~higher distribution costs, pay inflation,~~as a result of improved results as well as merit increases, increased bad debt expense ~~along with increased travel expenses~~ and ~~investments~~the $4.5 million loss on the sale of USL's Bridgecare services division during the period as described above in ~~growth initiatives for diversification of its protective coatings business.~~Note 3, "Restructuring," to the Consolidated Financial Statements.

Our Consumer segment SG&A ~~increased~~decreased by approximately ~~$26.0~~$2.5 million during the first ~~nine months~~half of fiscal ~~2023~~2024 versus the same period last year but ~~decreased~~increased slightly as a percentage of net sales. The ~~period over period increase~~period-over-period decrease in SG&A was primarily attributable to ~~increases in advertising and promotional expense, increased distribution costs, pay inflation, and~~ the ~~restoration of travel expenses, partially offset by the $20.0~~$11.1 million gain on business interruption insurance ~~included~~and a reduction in ~~SG&A as described above in Note 15, "Contingencies~~variable distribution costs, partially offset by merit increases and ~~Other Accrued Losses," to the Consolidated Financial Statements. Additionally, companies recently acquired generated approximately $2.7 million of additional SG&A expense.~~increased insurance costs.

Our SPG segment SG&A ~~was~~increased approximately ~~$12.6~~$3.1 million ~~higher~~ during the first ~~nine months~~half of fiscal ~~2023~~2024 versus the comparable prior year period and increased ~~slightly~~ as a percentage of net sales. The increase in SG&A expense is attributable to the $4.4 million expense related to the adverse legal ruling, pay inflation and investments in strategic growth initiatives, ~~across each of its business units,~~ partially offset by the divestiture of the non-core furniture warranty business in the third quarter of fiscal 2023, along with a ~~charge recorded during the prior year period related to the legal matter that did not recur, as described above~~reduction in ~~Note 15, "Contingencies and Other Accrued Losses," to the Consolidated Financial Statements.~~incentive compensation.

SG&A expenses in our corporate/other category ~~increased by $28.2 million~~ during the first ~~nine months~~half of fiscal ~~2023 as~~2024 decreased by approximately $4.4 million compared to ~~last year’s first nine months~~the prior year period. This was mainly due to ~~higher~~reduced professional fees related to our MAP 2025 ~~initiatives.~~operational improvement initiatives, offset by increased compensation and IT expenses.

The following table summarizes the retirement-related benefit plans’ impact on income before income taxes for the ~~nine~~six months ended ~~February 28,~~November 30, 2023 and 2022, as the service cost component has a significant impact on our SG&A expense:

We recorded ~~$6.8~~$7.7 million of restructuring charges during the ~~nine~~six months ended ~~February 28,~~November 30, 2023 ~~of which $3.4 million relates~~related to our MAP 2025 initiative. ~~These restructuring charges included $0.9~~For the six months ended November 30, 2023, we incurred $3.0 million related to severance and benefit costs, $0.2 million related to ~~MAP 2025~~facility closure and ~~$2.5~~other related costs, and $4.5 million related to other restructuring costs associated with MAP 2025. Most activities under MAP 2025 are anticipated to be completed by the ~~impairment~~end of ~~an indefinite-lived tradename as described above in Note 4, “Goodwill and Other Intangible Assets,”~~fiscal 2025; however, we expect some costs to extend beyond this date.

We currently expect to incur approximately $31.8 million of future additional charges related to the ~~Consolidated Financial Statements.~~implementation of MAP 2025.

For further information and details about MAP 2025, see ~~“Restructuring Charges” in Results of Operations -Three Months Ended February 28, 2023, and~~ Note 3, “Restructuring,” to the Consolidated Financial Statements.

(a) The interest rate increase was a result of higher market rates on the variable cost borrowings.

See Note 6,5, “Investment (Income) ~~Expense,~~, Net,” to the Consolidated Financial Statements for details.

See Note ~~7, "(Gain) on Sales of Assets and Business, Net," to the Consolidated Financial Statements for details.~~

~~See Note 8,~~6, “Other Expense, ~~(Income),~~ Net,” to the Consolidated Financial Statements for details.

~~On a consolidated basis, our results reflect the unfavorable impact of foreign exchange translation in Europe.~~ Our CPG segment results reflect ~~deteriorated macroeconomic conditions~~volume growth, which resulted in ~~Europe~~improved fixed-cost utilization, and ~~reduced demand for businesses that serve residential and certain commercial construction markets. In addition, our prior year CPG segment results include a $41.9 million gain on~~MAP 2025 benefits, including benefits generated from the ~~sale of certain real property assets.~~commodity cycle. Our PCG segment results reflect MAP 2025 benefits, improved pricing ~~volume growth~~ and ~~improved product mix, resulting~~benefits generated from ~~digital sales management tools,~~the commodity cycle. This was partially offset by the ~~$39.2~~$4.5 million ~~goodwill and~~loss on the sale of USL's Bridgecare services division during the period, the impairment of an indefinite-lived intangible asset, ~~impairment charges.~~and increased bad debt expense. Our Consumer segment results reflect improved ~~material supply which allowed for previously developed~~pricing, improved operating efficiencies related to ~~be realized, improved pricing to catch up with continued cost inflation~~MAP 2025 and the ~~$20.0~~$11.1 million gain on business interruption ~~insurance.~~insurance proceeds received during the period, partially offset by negative fixed-cost absorption. Our SPG segment results reflect ~~decreased demand~~the divestiture of the non-core furniture warranty business in the third quarter of fiscal 2023, the $4.4 million expense related to the adverse legal ruling, unfavorable sales mix, incremental costs from investments in growth initiatives, and reduced fixed cost leverage at ~~businesses serving OEM markets, offset by improved pricing, increased operating efficiencies and the $24.7 million gain on the sale~~plants as a result of ~~its Guardian business.~~reduced volumes. Our Non-Op segment results reflect the ~~unfavorable~~favorable swing in ~~pension non-service costs, along with~~investment returns and decreased professional fees, partially offset by increased interest ~~expense~~ and ~~professional fees.~~IT expense.

Income Tax Rate The effective income tax rate of ~~25.9%~~25.3% for the ~~nine~~six months ended ~~February 28,~~November 30, 2023 compares to the effective income tax rate of ~~23.9%~~24.8% for the ~~nine~~six months ended ~~February 28,~~November 30, 2022. The effective income tax rates for the ~~presented~~six-month periods ended November 30, 2023, and 2022 reflect variances from the 21% statutory rate due primarily to the unfavorable impact of state and local income taxes, non-deductible business expenses, and the net tax on foreign subsidiary income resulting from the global intangible low-taxed income provisions, partially offset by tax benefits related to equity compensation. ~~Further, the effective tax rate for the nine-month period ended February 28, 2023, reflects the unfavorable impact of a noncash impairment charge for goodwill that is nondeductible for tax purposes.~~ Additionally, the effective tax rate for the ~~nine-month~~

six-month period ended ~~February 28, 2022~~November 30, 2023 reflects incremental tax expense related to increases to our net deferred income tax liability for unremitted earnings and our liability for uncertain tax positions, partially offset by favorable ~~changes in~~adjustments for U.S. foreign tax ~~credit valuation allowances.~~credits.

Approximately ~~$263.0~~$767.8 million of cash was provided by operating activities during the first ~~nine months~~half of fiscal ~~2023,~~2024, compared with ~~$156.0~~$190.9 million of cash provided by operating activities during the same period last year. The net change in cash from operations includes the change in net income, which increased by ~~$34.9~~$46.3 million during the first ~~nine months~~half of fiscal ~~2023~~2024 versus the same period during fiscal ~~2022.~~2023.

During the first ~~nine months~~half of fiscal ~~2023,~~2024, the change in accounts receivable provided approximately ~~$32.2~~$199.3 million more cash than the first ~~nine months~~half of fiscal ~~2022.~~2023. This ~~resulted from~~was primarily due to the timing of sales in our ~~CPG~~Consumer segment ~~which saw lower sales growth~~and improved cash collections in the current ~~quarter due to deteriorated macroeconomic conditions in Europe and reduced demand for businesses that serve residential and certain commercial construction markets.~~period. Average days sales outstanding (“DSO”) at ~~February 28,~~November 30, 2023, ~~increased slightly~~decreased to ~~65.9~~63.0 days from ~~64.4~~64.5 days at ~~February 28,~~November 30, 2022.

During the first ~~nine months~~half of fiscal ~~2023,~~2024, the change in inventory used approximately ~~$131.5~~$226.7 million less cash compared to ~~our~~ spending during the same period a year ago as a result of our operating segments ~~beginning~~continuing to reduce inventory purchases and use safety stock built up in ~~the~~ prior ~~period~~periods in response to supply chain outages and raw material inflation. Average days of inventory outstanding (“DIO”) ~~was approximately 109.8 and 92.7~~at November 30, 2023 decreased to 86.9 days from 102.3 days at ~~February 28, 2023 and 2022, respectively.~~November 30, 2022.

The change in accounts payable during the first ~~nine months~~half of fiscal ~~2023~~2024 used approximately $185.2 million more cash than during the first nine months of fiscal 2022. Accounts payable balances have declined throughout the year as raw material purchases have declined due to supply chain improvement and internal initiatives to normalize inventory levels. Average days payables outstanding (“DPO”) increased slightly, however, by approximately 0.4 days to 83.3 days at February 28, 2023 from 82.9 days at February 28, 2022.

~~The change in other accrued liabilities during the first nine months of fiscal 2023 used approximately $28.2~~$83.7 million less cash than during the first ~~nine months~~half of fiscal ~~2022 due principally~~2023, as a result of inventory reduction driven by improved forecasting and coordination between sales and operations. Average days payables outstanding (“DPO”) decreased to ~~changes in pension and advertising accruals.~~

Additionally, certain government entities located where we have operations enacted various pieces of legislation designed to help businesses weather the economic impact of Covid and ultimately preserve jobs. Some of this legislation, such as the Coronavirus Aid, Relief, and Economic Relief Security Act in the United States, enabled employers to postpone the payment of various types of taxes over varying time horizons. As of May 31, 2021, we had deferred $27.1 million of such government payments, $13.5 million of which we paid during fiscal81.2 days at November 30, 2023 from 86.5 days at November 30, 2022. ~~As of May 31, 2022, we had a total of $13.6 million accrued for such government payments which we paid during the third quarter of fiscal 2023.~~

For the first ~~nine months~~half of fiscal ~~2023,~~2024, cash used for investing activities decreased by ~~$46.3~~$52.4 million to ~~$175.4~~$111.6 million as compared to ~~$221.7~~$164.0 million in the prior year period. This year-over-year decrease in cash used for investing activities was mainly driven by a ~~$68.9~~$32.1 million decrease in cash used for business ~~acquisitions.~~acquisitions and a $24.2 million decrease in cash used for capital expenditures.

We paid for capital expenditures of ~~$179.7~~$89.3 million and ~~$152.4~~$113.5 million during the first ~~nine months~~half of fiscal ~~2023~~2024 and fiscal ~~2022,~~2023, respectively. This reduction was the result of decreased capacity expansion projects in comparison to the prior period. Our capital expenditures facilitate our continued growth, allow us to achieve production and distribution efficiencies, expand capacity, introduce new technology, improve environmental health and safety capabilities, improve information systems, and enhance our administration capabilities. We continue to ~~increase~~invest capital spending in growth initiatives and to improve operational efficiencies in fiscal ~~2023 to expand capacity to continue our growth initiatives.~~2024.

Our captive insurance companies invest their excess cash in marketable securities in the ordinary course of conducting their operations, and this activity will continue. Differences in the amounts related to these activities on a year-over-year basis are primarily attributable to differences in the timing and performance of their investments balanced against amounts required to satisfy claims. At ~~February 28,~~November 30, 2023 and May 31, ~~2022,~~2023, the fair value of our investments in available-for-sale debt securities and marketable equity securities, which includes captive insurance-related assets, totaled ~~$143.6~~$162.1 million and ~~$144.4~~$148.3 million, respectively. The fair value of our portfolio of marketable securities is based on quoted market prices for identical, or similar, instruments in active or non-active markets or model-derived-valuations with observable inputs. We have no marketable securities whose fair value is subject to unobservable inputs.

As of ~~February 28,~~November 30, 2023, approximately ~~$176.3~~$239.0 million of our consolidated cash and cash equivalents were held at various foreign subsidiaries, compared with ~~$187.1~~$196.8 million at May 31, ~~2022.~~2023. Undistributed earnings held at our foreign subsidiaries that are considered permanently reinvested will be used, for instance, to expand operations organically or for acquisitions in foreign jurisdictions. Further, our operations in the U.S. generate sufficient cash flow to satisfy U.S. operating requirements. Refer to Note 9,7, “Income Taxes,” to the Consolidated Financial Statements for additional information regarding unremitted foreign earnings.

For the first ~~nine months~~half of fiscal ~~2023,~~2024, financing activities used ~~$83.3~~$610.3 million of cash, which compares to cash provided by financing activities of ~~$27.9~~$14.2 million during the first ~~nine months~~half of fiscal ~~2022.~~2023. The overall increase in cash used for financing activities was driven principally by debt-related ~~activities. During the first nine months of fiscal 2023,~~activities, as we ~~paid our $300~~repaid $175.0 million ~~3.45% Notes due 2022 which was partially offset by additional borrowings of $225.0 million for~~on our accounts receivable securitization program ("AR Program"). and $270.2 million on our revolving credit facility during the first half of fiscal 2024. See below for further details on the significant components of our debt.

Our available liquidity, including our cash and cash equivalents and amounts available under our committed credit facilities, stood at ~~$843.5 million~~$1.51 billion and ~~$1.31~~$1.03 billion as of ~~February 28,~~November 30, 2023 and May 31, ~~2022,~~2023, respectively.

During the quarter ended August 31, 2022, we amended our $1.3 billion unsecured syndicated revolving credit facility (the "Revolving Credit Facility"), which was set to expire on October 31, 2023. The amendment extended the expiration date to August 1, 2027 and increased the borrowing capacity to $1.35 billion. The Revolving Credit Facility bears interest at either the base rate or benchmark interest rate (i.e. the adjusted Secured Overnight Financing Rate (SOFR) for USD denominated debt), as defined, at our option, plus a spread determined by our debt rating. The Revolving Credit Facility includes sublimits for the issuance of swingline loans, which are comparatively short-term loans used for working capital purposes and letters of credit. The Revolving Credit Facility is available to refinance existing indebtedness, to finance working capital and capital expenditures, and for general corporate purposes.

The Revolving Credit Facility requires us to comply with various customary affirmative and negative covenants, including a leverage covenant (i.e. Net Leverage Ratio) and interest coverage ratio, which are calculated in accordance with the terms as defined by the Revolving Credit Facility. Under the terms of the leverage covenant, we may not permit our leverage ratio for total indebtedness to consolidated EBITDA for the four most recent fiscal quarters to exceed 3.75 to 1.00. During certain periods and per the terms of the Revolving Credit Facility, this ratio may be increased to 4.25 to 1.00 upon delivery of a notice to our lender requesting an increase to our maximum leverage or in connection with certain “material acquisitions.” The minimum required consolidated interest coverage ratio for EBITDA to interest expense is 3.50 to 1.00. The interest coverage ratio is calculated at the end of each fiscal quarter for the four fiscal quarters then ended using EBITDA as defined in the Revolving Credit Facility.

As of ~~February 28,~~November 30, 2023, we were in compliance with all financial covenants contained in our Revolving Credit Facility, including the Net Leverage Ratio and Interest Coverage Ratio covenants. At that date, our Net Leverage Ratio was ~~2.54~~1.74 to 1.00, while our Interest Coverage Ratio was ~~9.79~~9.24 to 1.00. As of ~~February 28,~~November 30, 2023, we had ~~$645.6~~$997.7 million of borrowing availability on our Revolving Credit Facility.

Our access to funds under our Revolving Credit Facility is dependent on the ability of the financial institutions that are parties to the Revolving Credit Facility to meet their funding commitments. Those financial institutions may not be able to meet their funding commitments if they experience shortages of capital and liquidity or if they experience excessive volumes of borrowing requests within a short period of time. Moreover, the obligations of the financial institutions under our Revolving Credit Facility are several and not joint and, as a result, a funding default by one or more institutions does not need to be made up by the others.

As of ~~February 28,~~November 30, 2023, we ~~had~~did not have an outstanding balance under our AR Program, ~~of $225.0 million, which compares with~~compared to the maximum availability of ~~$228.9~~$250.0 million. The maximum availability under the AR Program is $250.0 million, but availability is further subject to changes in the credit ratings of our customers, customer concentration levels or certain characteristics of the accounts receivable being transferred and, therefore, at certain times, we may not be able to fully access the $250.0 million of funding available under the AR Program.

The AR Program contains various customary affirmative and negative covenants, as well as customary default and termination provisions. Our failure to comply with the covenants described above and other covenants contained in the Revolving Credit Facility could result in an event of default under that agreement, entitling the lenders to, among other things, declare the entire amount outstanding under the Revolving Credit Facility to be due and payable immediately. The instruments governing our other outstanding indebtedness generally include cross-default provisions that provide that, under certain circumstances, an event of default that results in acceleration of our indebtedness under the Revolving Credit Facility will entitle the holders of such other indebtedness to declare amounts outstanding immediately due and payable. See “Revolving Credit Agreement” above for details on our compliance with all significant financial covenants at ~~February 28,~~November 30, 2023.

On August 1, 2022, we amended the term loan credit facility, which was set to expire on February 21, 2023, to extend the maturity date to August 1, 2025, and paid down the borrowings outstanding on the term loan to $250 million. The term loan bears interest at either the base rate or the adjusted SOFR, as defined, at our option, plus a spread determined by our debt rating. The term loan contains customary covenants, including but not limited to, limitations on our ability, and in certain instances, our subsidiaries’ ability, to incur liens, make certain investments, or sell or transfer assets. Additionally, we may not permit (i) our consolidated interest coverage ratio to be less than 3.50 to 1.00, or (ii) our leverage ratio (defined as the ratio of total indebtedness to consolidated EBITDA for the four most recent fiscal quarters) to exceed 3.75 to 1.00. During certain periods this ratio may be increased to 4.25 to 1.0 upon delivery of a notice to our lender requesting an increase to our maximum leverage or in connection with certain “material acquisitions.” See “Revolving Credit Agreement” above for details on our compliance with all significant financial covenants at ~~February 28,~~November 30, 2023.

On December 27, 2023, we prepaid the $250.0 million of principal outstanding on our term loan which had a maturity date of August 1, 2025.

Refer to Note G, "Borrowings," to the Consolidated Financial Statements, in our Annual Report on Form 10-K for the fiscal year ended May 31, ~~2022~~2023 for more comprehensive details on the significant components of our debt.

See Note ~~12,~~9, “Stock Repurchase ~~Program”~~Program,” to the Consolidated Financial Statements, for further detail surrounding our stock repurchase program.

We do not have any off-balance sheet financings. We have no subsidiaries that are not included in our financial statements, nor do we have any interests in, or relationships with, any special purpose entities that are not reflected in our financial statements.

Environmental obligations continue to be appropriately addressed and based upon the latest available information, it is not anticipated that the outcome of such matters will materially affect our results of operations or financial condition. Our critical accounting policies and estimates set forth above describe our method of establishing and adjusting environmental-related accruals and should be read in conjunction with this disclosure. For additional information, refer to “Part II, Item 1. Legal Proceedings.”

The foregoing discussion 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 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 ~~capacity~~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 ~~construction and chemicals~~ 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) 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; (h) risks and uncertainties associated with our ongoing acquisition and divestiture activities; (i) the timing of and the realization of anticipated cost savings from restructuring initiatives and the ability to identify additional cost savings opportunities; (j) risks related to the adequacy of our contingent liability reserves; (k) risks relating to a public health crisis similar to the Covid pandemic; (l) risks related to ~~adverse weather conditions~~acts of war similar to the Russian invasion of Ukraine; (m) risks related to the transition or ~~the~~physical impacts of climate change and other natural ~~disasters; (m)~~disasters or meeting sustainability-related voluntary goals or regulatory requirements; (n) risks related to ~~the Russian invasion~~our use of ~~Ukraine and other wars; (n) risks related to~~technology, artificial intelligence, data breaches and data privacy violations; and (o) 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, ~~2022,~~2023, 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 document.

We are exposed to market risk from changes in raw materials costs, interest rates and foreign exchange rates since we fund our operations through long- and short-term borrowings and conduct our business in a variety of foreign currencies. There were no material potential changes in our exposure to these market risks since May 31, ~~2022.~~2023.

Our Chief Executive Officer and Chief Financial Officer, after evaluating the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e)) as of ~~February 28,~~November 30, 2023 (the “Evaluation Date”), have concluded that as of the Evaluation Date, our disclosure controls and procedures were effective in ensuring that information required to be disclosed by us in the reports we file or submit under the Exchange Act (1) is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms, and (2) is accumulated and communicated to our management, including the Chief Executive Officer and the Chief Financial Officer, as appropriate to allow for timely decisions regarding required disclosure.

There were no changes in our internal control over financial reporting that occurred during the fiscal quarter ended ~~February 28,~~November 30, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Like other companies participating in similar lines of business, some of our subsidiaries are identified as a “potentially responsible party” under the federal Comprehensive Environmental Response, Compensation and Liability Act and similar local environmental statutes or are participating in the cost of certain clean-up efforts or other remedial actions relating to environmental matters. Our share of such costs to date, however, has not been material and management believes that these environmental proceedings will not have a material adverse effect on our consolidated financial condition or results of operations. See “Item 1 — Business — Environmental Matters,” in our Annual Report on Form 10-K for the year ended May 31, ~~2022.~~2023.

As permitted by SEC rules, and given the size of our operations, we have elected to adopt a quantitative threshold for environmental proceedings of $1 million. As of the date of this filing, we are not aware of any matters that exceed this threshold and meet the definition for disclosure.

In addition to the other information set forth in this report, you should carefully consider the other risk factors disclosed in Item 1A of our Annual Report on Form 10-K for the fiscal year ended May 31, ~~2022.~~2023.

The following table presents information about repurchases of RPM International Inc. common stock made by us during the ~~third~~second quarter of fiscal ~~2023:~~2024:

(1) All of the ~~4,403~~60,619 shares of common stock that were disposed of back to us during the three-month period ended ~~February 28,~~November 30, 2023 were in satisfaction of tax obligations related to the vesting of restricted stock, which was granted under RPM International Inc.'s equity and incentive plans.

(2) The maximum dollar amount that may yet be repurchased under our program was approximately ~~$329.8~~$292.3 million at ~~February 28,~~November 30, 2023. Refer to Note 129, “Stock Repurchase ~~Program”~~Program,” to the Consolidated Financial Statements for further information regarding our stock repurchase program.

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.


Delaware		02-0642224
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)

2628 PEARL ROAD; MEDINA, Ohio (Address of principal executive offices)		44256 (Zip Code)
		44256 (Zip Code)


		Page No.
PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements:	3
	Consolidated Balance Sheets	3
	Consolidated Statements of Income	4
	Consolidated Statements of Comprehensive Income	5
	Consolidated Statements of Cash Flows	6
	Consolidated Statements of Stockholders’ Equity	7
	Notes to Consolidated Financial Statements	98
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2423
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3533
Item 4.	Controls and Procedures	3533

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	3634
Item 1A.	Risk Factors	3634
Item 2.	Unregistered Sale of Equity Securities and Use of Proceeds	3634
Item 6.	Exhibits	3735
Signatures		3836


	Three Months Ended						Nine Months Ended
	February 28,			February 28,			February 28,			February 28,
	2023			2022			2023			2022
Net Income	$	27,239		$	33,249		$	328,060		$	293,160
Other comprehensive (loss) income, net of tax:
Foreign currency translation adjustments (net of tax of $72; $296; $2,263 and $3,562, respectively)		(6,935	)		16,124			(76,719	)		(69,722	)
Pension and other postretirement benefit liability adjustments (net of tax of $1,132; $951; $3,637 and $3,630, respectively)		3,606			3,057			11,427			11,086
Unrealized gain (loss) on securities and other (net of tax of $199; $238; $405 and $473, respectively)		107			(384	)		(467	)		(287	)
Unrealized (loss) gain on derivatives (net of tax of zero; $838; zero and $6,551, respectively)		(555	)		2,648			(1,765	)		21,448
Total other comprehensive (loss) income		(3,777	)		21,445			(67,524	)		(37,475	)
Total Comprehensive Income		23,462			54,694			260,536			255,685
Less: Comprehensive Income Attributable to Noncontrolling Interests		263			238			689			633
Comprehensive Income Attributable to RPM International Inc. Stockholders	$	23,199		$	54,456		$	259,847		$	255,052


	Three Months Ended						Six Months Ended
	November 30,			November 30,			November 30,			November 30,
	2023			2022			2023			2022
Net Income	$	145,815		$	131,542		$	347,128		$	300,821
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments, net of tax		(44	)		9,172			8,809			(69,783	)
Pension and other postretirement benefit liability adjustments, net of tax		3,446			3,549			6,610			7,821
Unrealized gain (loss) on securities, net of tax		94			(234	)		(163	)		(574	)
Unrealized (loss) on derivatives, net of tax		-			(604	)		-			(1,211	)
Total other comprehensive income (loss)		3,496			11,883			15,256			(63,747	)
Total Comprehensive Income		149,311			143,425			362,384			237,074
Less: Comprehensive Income Attributable to Noncontrolling Interests		307			222			552			426
Comprehensive Income Attributable to RPM International Inc. Stockholders	$	149,004		$	143,203		$	361,832		$	236,648


(In thousands)	Severance and Benefits Costs			Facility Closure and Other Related Costs			Other Asset Write-Offs			Total
Balance at June 1, 2023	$	2,717		$	-		$	-		$	2,717
Additions charged to expense		3,016			166			4,555			7,737
Cash payments charged against reserve		(2,945	)		(166	)		-			(3,111	)
Non-cash charges and other adjustments		17			-			(4,555	)		(4,538	)
Balance at November 30, 2023	$	2,805		$	-		$	-		$	2,805


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


	CPG			PCG			Consumer			SPG
(In thousands)	Segment			Segment			Segment			Segment			Total
Balance as of May 31, 2022	$	453,651		$	201,815		$	515,597		$	166,805		$	1,337,868
Acquisitions		7,306			907			16,952			281			25,446
Divestitures		-			-			-			(15,723	)		(15,723	)
Impairments		-			(36,745	)		-			-			(36,745	)
Translation adjustments & other		(14,452	)		(3,737	)		(3,364	)		(1,222	)		(22,775	)
Balance as of February 28, 2023	$	446,505		$	162,240		$	529,185		$	150,141		$	1,288,071


Three Months Ended February 28, 2023	CPG Segment		PCG Segment		Consumer Segment		SPG Segment		Consolidated
(In thousands)
Net Sales (based on shipping location)
United States	$	280,916	$	189,913	$	431,829	$	163,056	$	1,065,714
Foreign
Canada		34,934		18,662		37,957		898		92,451
Europe		107,609		56,192		47,613		19,084		230,498
Latin America		51,728		9,047		6,666		455		67,896
Asia Pacific		21,827		5,784		4,466		7,511		39,588
Other Foreign		-		20,029		-		-		20,029
Total Foreign		216,098		109,714		96,702		27,948		450,462
Total	$	497,014	$	299,627	$	528,531	$	191,004	$	1,516,176

Three Months Ended February 28, 2022	CPG Segment		PCG Segment		Consumer Segment		SPG Segment		Consolidated
(In thousands)
Net Sales (based on shipping location)
United States	$	259,606	$	167,623	$	403,524	$	154,516	$	985,269
Foreign
Canada		39,479		17,220		29,432		1,378		87,509
Europe		114,226		54,057		46,695		24,121		239,099
Latin America		47,459		7,720		7,707		368		63,254
Asia Pacific		21,256		5,431		4,259		8,988		39,934
Other Foreign		-		18,814		-		-		18,814
Total Foreign		222,420		103,242		88,093		34,855		448,610
Total	$	482,026	$	270,865	$	491,617	$	189,371	$	1,433,879

Nine Months Ended February 28, 2023	CPG Segment		PCG Segment		Consumer Segment		SPG Segment		Consolidated
(In thousands)
Net Sales (based on shipping location)
United States	$	1,124,047	$	628,320	$	1,486,556	$	515,078	$	3,754,001
Foreign
Canada		170,415		63,636		127,039		2,946		364,036
Europe		340,589		169,912		150,738		61,242		722,481
Latin America		158,992		29,168		20,217		1,195		209,572
Asia Pacific		66,782		17,941		13,832		25,324		123,879
Other Foreign		-		66,235		-		-		66,235
Total Foreign		736,778		346,892		311,826		90,707		1,486,203
Total	$	1,860,825	$	975,212	$	1,798,382	$	605,785	$	5,240,204

Nine Months Ended February 28, 2022	CPG Segment		PCG Segment		Consumer Segment		SPG Segment		Consolidated
(In thousands)
Net Sales (based on shipping location)
United States	$	974,201	$	531,655	$	1,267,373	$	457,115	$	3,230,344
Foreign
Canada		184,940		54,355		93,714		5,609		338,618
Europe		377,220		172,850		162,032		74,446		786,548
Latin America		144,366		20,958		22,935		1,407		189,666
Asia Pacific		59,811		17,579		13,169		26,473		117,032
Other Foreign		40		61,590		-		-		61,630
Total Foreign		766,377		327,332		291,850		107,935		1,493,494
Total	$	1,740,578	$	858,987	$	1,559,223	$	565,050	$	4,723,838


	Three months ended																	Three months ended
(in millions, except percentages)	February 28, 2023		February 28, 2022		Total Growth			Organic Growth(1)			Acquisition & Divestiture Impact			Foreign Currency Exchange Impact				November 30, 2023		November 30, 2022		Total Growth (Decline)			Organic Growth (Decline)(1)			Acquisition & Divestiture Impact			Foreign Currency Exchange Impact
CPG Segment	$	497.0	$	482.0		3.1	%		4.3	%		1.4	%		-2.6	%		$	661.7	$	612.4		8.1	%		6.1	%		0.6	%		1.4	%
PCG Segment		299.6		270.9		10.6	%		13.2	%		0.8	%		-3.4	%			374.9		356.8		5.1	%		5.6	%		(0.5	%)		0.0	%
Consumer Segment		528.5		491.6		7.5	%		8.9	%		0.3	%		-1.7	%			578.7		610.4		(5.2	%)		(5.1	%)		0.0	%		(0.1	%)
SPG Segment		191.1		189.4		0.9	%		2.2	%		-0.2	%		-1.1	%			177.0		212.1		(16.6	%)		(14.6	%)		(2.7	%)		0.7	%
Consolidated	$	1,516.2	$	1,433.9		5.7	%		7.3	%		0.7	%		-2.3	%		$	1,792.3	$	1,791.7		0.0	%		(0.3	%)		(0.2	%)		0.5	%
(1) Organic growth includes the impact of price and volume.
(1) Organic growth (decline) includes the impact of price and volume.																	(1) Organic growth (decline) includes the impact of price and volume.


	Three months ended									Three months ended
(in millions)	February 28, 2023			February 28, 2022			Change			November 30, 2023			November 30, 2022			Change
Service cost	$	12.2		$	13.7		$	(1.5	)	$	12.4		$	12.2		$	0.2
Interest cost		9.3			5.4			3.9			11.3			9.3			2.0
Expected return on plan assets		(11.3	)		(12.4	)		1.1			(12.9	)		(11.3	)		(1.6	)
Amortization of:
Prior service (credit)		(0.1	)		(0.1	)		-			-			(0.1	)		0.1
Net actuarial losses recognized		4.6			4.4			0.2			4.4			4.6			(0.2	)
Total Net Periodic Pension & Postretirement Benefit Costs	$	14.7		$	11.0		$	3.7		$	15.2		$	14.7		$	0.5


(in millions)	Change in interest expense
Acquisition-related borrowings	$	0.9
Non-acquisition-related average borrowings		0.1
Change in average interest rate		7.8
Total Change in Interest Expense	$	8.8


	Three months ended										Three months ended
(in millions, except percentages and per share amounts)	February 28, 2023		% of net sales			February 28, 2022		% of net sales			November 30, 2023		% of net sales			November 30, 2022		% of net sales
Net income	$	27.2		1.8	%	$	33.2		2.3	%	$	145.8		8.1	%	$	131.5		7.3	%
Net income attributable to RPM International Inc. stockholders		27.0		1.8	%		33.0		2.3	%		145.5		8.1	%		131.3		7.3	%
Diluted earnings per share		0.21					0.25					1.13					1.02


Exhibit Number		Description

~~10.1~~		Fifth Amendment to Credit Agreement among RPM International Inc., the Borrowers party thereto, the Lenders party thereto and PNC Bank, National Association, as Administrative Agent, dated December 19, 2022 (x)

31.1		Rule 13a-14(a) Certification of the Company’s Chief Executive Officer.(x)

31.2		Rule 13a-14(a) Certification of the Company’s Chief Financial Officer.(x)

32.1		Section 1350 Certification of the Company’s Chief Executive Officer.(x)

32.2		Section 1350 Certification of the Company’s Chief Financial Officer.(x)

101.INS		Inline XBRL Instance Document- the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH		Inline XBRL Taxonomy Extension Schema Document.

101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document.

101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document.

101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document.

101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document.

104		The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended ~~February 28,~~November 30, 2023, has been formatted in Inline XBRL


	RPM International Inc.

	By:		/s/ Frank C. Sullivan
			Frank C. Sullivan
			Chairman and Chief Executive Officer

	By:		/s/ Russell L. Gordon
			Russell L. Gordon
			Vice President and
			Chief Financial Officer

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company