From The Plain Dealer in Cleveland, Ohio -
"Analyst Ivan Marcuse, a vice president of KeyBanc Capital Markets Inc. in Cleveland, said that...the Department of Justice inquiry [ into Tremco Roofing ] was something to keep an eye on, but that it's hard to know if it will be a "one-and-done type of thing," or an ongoing issue, because RPM's management can't divulge details until it's settled."
For those in the Roofing Industry in the know about their practices, the US Attorney General's Offices and the GSA need to hear from you.
It has been announced that the GSA and Department of Justice has been investigating roofing, cool roofing and other building envelope materials contracts from RPM companies - Tremco, Dryvit, DPA, WTI and Can Am - for the years 2002 to 2008.
"RPM said the loss [Feb. 28 end of quarter earnings losses] mainly was due to an estimated loss contingency of $68.8 million associated with an investigation of roofing contracts between the company's Building Solutions Group and the GSA."
"DOJ and GSA Investigation
RPM Building Solutions Group is involved in discussions with the US Department of Justice (DOJ) and US General Services Administration (GSA) aimed at resolving an investigation into the firm's practices.
The investigation involves its compliance with certain pricing terms and conditions of GSA contracts under which the company sold products and services to the federal government.
The company expects a loss of nearly $69 million from this ordeal. However, as the loss remains subject to approval from the DOJ, it could vary from this figure."
U.S. Probe Hands RPM a $42M
Loss in Q3"
Roofing Products Investigation
RPM’s biggest loss involves a $68.8 million contingency associated with the company’s anticipated settlement of an investigation of roofing contracts between its Building Solutions Group and the General Services Administration.
The Building Solutions group includes the Tremco, Dryvit, DPA, WTI and CanAm brands for cool roofs, deck coatings and membranes, air barriers, sealants and waterproofing, and other building envelope applications.
Building Solutions is part of RPM’s industrial segment, which makes up 67 percent of the company’s net sales.
RPM said Thursday that it was in settlement talks with the Justice Department and GSA “aimed at resolving the investigation.”
“The company is cooperating with the investigation, which involves compliance with certain pricing terms and conditions of GSA contracts under which RPM's Building Solutions Group roofing division sold products and services to the federal government,” RPM said.
Most of the contingency relates to products and services sold between 2002 and 2008. The final settlement may vary from the contingency, RPM noted.
The company also noted other weakness in its North American roofing market.