RPM International Inc. 11-K
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 11-K
(Mark One):
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ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended: December 31, 2007
OR
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TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 |
For the transition period from to
Commission file number 1-14187
A. Full title of the plan and the address of the plan, if different from that of the issuer
named below: RPM International Inc. Union 401(k) Trust and Plan, as amended
B. Name of issuer of the securities held pursuant to the plan and the address of its
principal executive office: RPM International Inc. 2628 Pearl Road, P.O. Box 777, Medina, Ohio
44258
RPM INTERNATIONAL INC.
UNION 401(K) TRUST
AND PLAN
FINANCIAL
STATEMENTS
DECEMBER 31,
2007 AND 2006
RPM INTERNATIONAL INC. UNION 401(K) TRUST AND PLAN
TABLE OF CONTENTS
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FINANCIAL STATEMENTS |
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2 |
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3 |
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4-7 |
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8 |
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Cleveland Office
32125 Solon Road
Cleveland, Ohio 44139
(440) 248-8787
fax (440) 248-0841
www.SSandG.com
Providing
the
services that
bring solutions.
member of:
OSCPA, PCAOB, the AICPAs
Center for Public Company
Audit Firms, and
the Leading
Edge Alliance.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
RPM International Inc. Audit Committee
RPM International Inc. Union 401(k) Trust and Plan
Medina, Ohio
We have audited the accompanying statements of net assets available for benefits (modified cash
basis) of the RPM International Inc. Union 401(k) Trust and Plan as of December 31, 2007 and 2006,
the related statement of changes in net assets available for benefits (modified cash basis) for the
year ended December 31, 2007, and the supplemental schedule of assets (held at end of year) as of
December 31, 2007. These financial statements and supplemental schedule are the responsibility of
the Plans management. Our responsibility is to express an opinion on these financial statements
and supplemental schedule based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight
Board (United States). Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material misstatement. An
audit includes consideration of internal control over financial reporting as a basis for designing
audit procedures that are appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the Plans internal control over financial reporting.
Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
As described in Note A, these financial statements and supplemental schedule were prepared on a
modified cash basis of accounting, which is a comprehensive basis of accounting other than
generally accepted accounting principles.
In our opinion, the financial statements and supplemental schedule referred to above present
fairly, in all material respects, the net assets available for benefits of the RPM International
Inc. Union 401(k) Trust and Plan as of December 31, 2007 and 2006, and the changes in net assets
available for benefits for the year ended December 31, 2007, on the basis of accounting described
in Note A.
CERTIFIED PUBLIC ACCOUNTANTS
Cleveland, Ohio
June 23, 2008
-1-
RPM INTERNATIONAL INC. UNION 401(K) TRUST AND PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS (MODIFIED CASH BASIS)
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2007 |
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2006 |
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ASSETS |
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Investments, at fair value |
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$ |
2,807,091 |
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$ |
2,787,871 |
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Receivables |
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Employers contribution |
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6,564 |
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9,682 |
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Participants contributions |
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16,275 |
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24,653 |
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22,839 |
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34,335 |
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NET ASSETS AVAILABLE FOR BENEFITS |
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$ |
2,829,930 |
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$ |
2,822,206 |
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See accompanying notes to financial statements.
-2-
RPM INTERNATIONAL INC. UNION 401(K) TRUST AND PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS (MODIFIED CASH BASIS)
FOR THE
YEAR ENDED DECEMBER 31, 2007
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ADDITIONS TO NET ASSETS ATTRIBUTED TO: |
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Contributions |
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Participants |
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$ |
245,641 |
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Employer |
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95,301 |
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$ |
340,942 |
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Investment income |
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Interest and dividends |
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110,460 |
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Unrealized gain on investments |
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39,772 |
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Realized gain on sale of investments |
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75,974 |
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226,206 |
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Total additions |
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567,148 |
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DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO: |
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Benefits paid to participants |
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553,539 |
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Administrative expenses |
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5,885 |
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559,424 |
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Change in net assets |
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7,724 |
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Net assets available for benefits: |
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Beginning of year |
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2,822,206 |
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End of year |
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$ |
2,829,930 |
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See accompanying notes to financial statements.
-3-
RPM INTERNATIONAL INC. UNION 401(K) TRUST AND PLAN
NOTES TO FINANCIAL STATEMENTS
NOTE A Significant accounting policies
Basis of accounting
The Plans policy is to prepare its financial statements on the modified cash basis of accounting.
Contributions are recorded on the accrual basis, dividends are recorded on the ex-dividend date,
and other revenues are recognized when received rather than when earned. Certain expenses and
purchases of assets are recognized when cash is disbursed rather than when the obligation is
incurred.
Investment valuation and income recognition
Investments are stated at fair value as determined by the custodian. Shares of registered
investment companies are valued at quoted market prices which represent the net asset value of
shares held by the plan at year-end. Collective investment funds are valued at their last reported
net asset value. Participant loans are valued at their outstanding balances which approximate fair
value.
Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded
when received. Dividends are recorded on the ex-dividend date.
Contributions
Contributions are recorded on an accrual basis.
Payment of benefits
Benefits are recorded when paid.
Use of estimates
The preparation of financial statements, in conformity with the modified cash basis of accounting,
requires management to make estimates and assumptions that affect the reported amount of assets,
liabilities and changes therein, and disclosure of contingent assets and liabilities. Actual
results could differ from those estimates.
NOTE B Description of the Plan
The following description of the Plan provides only general information. Participants should refer
to the Plan document for a more complete description of the Plans provisions.
General
The Plan, adopted on February 1, 1997, is a defined contribution savings plan covering certain
union employees at several wholly-owned domestic subsidiaries of RPM International Inc. (the
Company). The Plan is subject to the Employee Retirement Income Security Act of 1974 (ERISA), as
amended.
-4-
RPM INTERNATIONAL INC. UNION 401(K) TRUST AND PLAN
NOTES TO FINANCIAL STATEMENTS
NOTE B Description of the Plan - continued
Contributions
Each year, participants may contribute up to 20% of pretax annual compensation, as defined in the
Plan. The Plan was amended effective January 1, 2007 to allow participants to contribute up to 50%
of pretax annual compensation. Participants who have attained age 50 before the end of the plan
year are eligible to make catch-up contributions. Participants may also contribute amounts
representing distributions from other qualified defined benefit or defined contribution plans.
Participants direct the investment of their contributions into various investment options offered
by the Plan. The Plan currently offers nineteen investment funds as investment options for
participants. The Company matches, depending upon the collective bargaining agreement of each
participating union, up to a maximum rate of 100% of the first 3% and 50% of the next 2% of
employee deferrals. The matching Company contribution is invested in the same manner in which the
participants invest their own contributions. Contributions are subject to certain limitations.
Participant accounts
Each participants account is credited with the participants contribution, the Companys matching
contribution and an allocation of Plan earnings and charged with an allocation of administrative
expenses. Allocations are based on participant earnings or account balances, as defined. The
benefit to which a participant is entitled is the benefit that can be provided from the
participants vested account.
Vesting
Vesting is immediate for contributions, both employee and employer, and earnings thereon.
Participant loans.
Participants may borrow from their fund accounts a minimum of $1,000 up to a maximum equal to the
lesser of $50,000 or 50% of their vested account balance. The loans are secured by the balance in
the participants account and bear interest at rates that range from 5.0% to 10.0%. Principal and
interest are paid ratably through payroll deductions.
Payment of benefits
On termination of service due to death, disability, or retirement, a participant generally will
receive a lump-sum amount equal to the value of the participants vested interest in his or her
account. For termination of service for other reasons, a participant may receive the value of the
vested interest in his or her account as a lump-sum distribution. During 2007, $44,775 of assets
were transferred from the Plan to another Company plan and are included in distributions on the
statement of changes in net assets available for benefits.
Plan expenses
During 2007, the administrative expenses, audit fees, certain legal expenses, brokerage fees,
transfer taxes, and other expenses incurred in connection with the sale, purchase, and management
of the assets of the investment funds were paid by the Company or by the Plan.
-5-
RPM INTERNATIONAL INC. UNION 401(K) TRUST AND PLAN
NOTES TO FINANCIAL STATEMENTS
NOTE C Investments
The following presents investments at December 31, 2007 and 2006 that represent 5% or more of the
Plans net assets:
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2007 |
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2006 |
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Diversified Stable Value Fund |
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$ |
821,851 |
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$ |
755,693 |
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RPM International Inc. Stock Fund |
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236,178 |
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288,124 |
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Growth Fund of America |
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294,750 |
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266,993 |
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Janus Balanced Fund |
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229,860 |
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245,043 |
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Fidelity Contrafund |
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257,654 |
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229,296 |
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American Washington Mutual Investors Fund |
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207,391 |
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203,755 |
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Fidelity Advisor Government Investment Fund |
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139,908 |
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192,644 |
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During 2007, the Plans investments (including gains and losses on investments bought and sold,
as well as held during the year) appreciated in value by $115,746.
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Mutual Funds |
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70,506 |
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Common/Collective Trust |
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45,240 |
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$ |
115,746 |
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NOTE D Plan termination
Although it has not expressed any intent to do so, the Company has the right under the Plan to
discontinue its contributions at any time and to terminate the Plan subject to the provisions of
ERISA. In the event of Plan termination, participants will become 100% vested in their accounts.
Any unallocated assets of the Plan shall be allocated to participant accounts and distributed in
such a manner as the Company may determine.
NOTE E Income tax status
The Plan obtained its latest determination letter on November 13, 2002, in which the Internal
Revenue Service stated that the plan, as then designed, was in compliance with the applicable
requirements of the Internal Revenue Code. The plan has been amended since receiving the
determination letter. However, the plan administrator and the plans tax counsel believe that the
plan is currently designed and being operated in compliance with the applicable requirements of the
Internal Revenue Code. Therefore, no provision for income taxes has been included in the Plans
financial statements.
-6-
RPM INTERNATIONAL INC. UNION 401(K) TRUST AND PLAN
NOTES TO FINANCIAL STATEMENTS
NOTE F Related party transactions
The Diversified Stable Value Fund and Enhanced Stock Market Fund are common trust funds managed by
Wachovia Bank N.A. Wachovia Bank N.A. is the trustee as defined by the Plan and, therefore, these
transactions qualify as party-in-interest transactions. Fees paid by the Plan to the trustee
amounted to $5,885 for the year ended December 31, 2007.
In addition, at December 31, 2007, the Plan held shares of RPM International, Inc. Union Stock
valued at $236,178. At December 31, 2006, the Plan held shares of RPM International, Inc. Union
Stock, RPM International, Inc. Moderate Fund 2, RPM International, Inc. Union Conservative Fund,
and RPM International, Inc. Union Growth Fund valued at $369,488. Transactions involving these
investments are allowable party-in-interest transactions under ERISA.
NOTE G Risks and uncertainties
The Plan invests in various investment securities. Investment securities are exposed to various
risks such as interest rate, market, and credit risks. Due to the level of risk associated with
certain investment securities, it is at least reasonably possible that changes in the values of
investment securities will occur in the near term and that such changes could materially affect
participants account balances and the amounts reported in the statement of net assets available
for benefits.
NOTE H Recent Accounting Pronouncements
In September 2006, the Financial Accounting Standards Board (FASB) issued SFAS No. 157, Fair
Value Measurements (SFAS 157). SFAS 157 defines fair value, establishes a framework for
measuring fair value in generally accepted accounting principles, and expands disclosures about
fair value measurements. SFAS 157 does not require any new fair value measurements. The
Administrator is currently evaluating the impact of implementing SFAS 157 on the financial
statements, the adoption of which is not expected to have a material impact on the Plans financial
statements, but will expand the disclosures in the Plans financial statements.
The Plan has adopted FASB Staff Position, FSP AAG INV-1 and SOP 94-4-1, Reporting of Fully
Benefit-Responsive Investment Contracts Held by Certain Investment Companies Subject to the AICPA
Investment Company Guide and Defined-Contribution Health and Welfare and Pension Plans (the FSP).
The FSP requires that investment contracts held by a defined-contribution plan be reported at fair
value. However, contract value is the relevant measurement attribute for that portion of net
assets available for benefits of a defined-contribution plan attributable to fully
benefit-responsive investment contracts because contract value is the amount participants would
receive if they were to initiate permitted transactions under the terms of the Plan. The contract
value approximates the fair value for the Plans investment in fixed investment accounts. As a
result, the adoption of the FSP had no material effect on the Plan.
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RPM INTERNATIONAL INC. UNION 401(K) TRUST AND PLAN
EIN #34-6550857
PLAN NUMBER 007
SCHEDULE H, LINE 4i -
SCHEDULE OF ASSETS (HELD AT END OF YEAR)
DECEMBER 31, 2007
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(a) |
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(b) |
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(c) |
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(e) |
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Description of investment including |
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Identity of issue, borrower, |
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maturity date, rate of interest, |
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Current value at |
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lessor, or similar party |
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collateral, par or maturity value |
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December 31, 2007 |
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Wachovia Bank, N.A., Diversified Stable
Value Fund
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Collective investment fund
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$ |
821,851 |
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Wachovia Bank, N.A., Enhanced Stock Market
Fund
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Collective investment fund
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125,289 |
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Fidelity Advisor Mid Cap Fund
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Registered investment company
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81,640 |
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Fidelity Contrafund
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Registered investment company
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257,654 |
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Growth Fund of America
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Registered investment company
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294,750 |
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Neuberger & Berman Genesis Fund
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Registered investment company
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67,489 |
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American Washington Mutual Investors Fund
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Registered investment company
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207,391 |
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American Europacific Growth Fund
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Registered investment company
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6,142 |
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Dodge & Cox International Stock Fund
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Registered investment company
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83,027 |
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Janus Balanced Fund
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Registered investment company
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229,860 |
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Evergreen Core Bond Fund
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Registered investment company
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22,178 |
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Fidelity Advisor Government Investment Fund
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Registered investment company
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139,908 |
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RPM International Inc. Stock Fund
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Company stock
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236,178 |
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Vanguard Target Retirement 2010 Fund
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Registered investment company
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8,248 |
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Vanguard Target Retirement 2015 Fund
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Registered investment company
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85,972 |
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Vanguard Target Retirement 2020 Fund
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Registered investment company
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1,903 |
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Vanguard Target Retirement 2025 Fund
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Registered investment company
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21,124 |
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Vanguard Target Retirement 2030 Fund
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Registered investment company
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4,855 |
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Vanguard Target Retirement 2040 Fund
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Registered investment company
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22,361 |
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Cash
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81 |
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Participant Loans
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Loans (4.00% to 10.00%)
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89,190 |
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Total Investments
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$ |
2,807,091 |
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* |
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Denotes an allowable party in interest |
See accompanying notes to financial statements.
-8-
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees
(or other persons who administer the employee benefit plan) have duly caused this annual report to
be signed on its behalf by the undersigned hereunto duly authorized.
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RPM INTERNATIONAL INC. UNION 401(k) TRUST AND PLAN |
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By: RPM International Inc. (Plan Administrator) |
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/s/ Janeen Kastner |
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Janeen Kastner, Vice President Corporate |
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Benefits & Risk Management |
Date: June 26, 2008
EXHIBIT INDEX
23.1 |
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Consent of SS&G Financial Services, Inc. |