RPM INTERNATIONAL INCDE

Previous wording

Our CPG segment generated significant organic sales growth during the second quarter of fiscal 2024 in 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.

Current wording

Our CPG segment generated organic sales growth during the third quarter of fiscal 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.

Previous wording

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 turnkey flooring systems, which benefited from increased demand for reshoring-related projects. This increase was also facilitated by improved pricing and strong demand in emerging markets, partially offset by the divestiture of USL's Bridgecare services division in the first quarter of fiscal 2024.

Current wording

Our PCG segment generated significant organic sales growth during the third quarter of fiscal 2024 when compared to the same quarter in the prior year. Performing particularly well were businesses that provide engineered solutions for reshoring-related projects. This increase was also facilitated by favorable timing of project completions and strong demand in emerging markets for engineered solutions serving infrastructure projects, partially offset by the divestiture of USL's Bridgecare services division in the first quarter of fiscal 2024.

Previous wording

Our Consumer segment experienced organic sales 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 a strong prior year 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 cost inflation.

Current wording

Our Consumer segment experienced organic sales declines in the third quarter of fiscal 2024 driven by reduced DIY takeaway at retail, destocking by customers and the rationalization of certain lower-margin products. This was partially offset by market share gains.

Previous wording

Our SPG segment experienced sales 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 also reduced sales versus the prior period. Finally, the segment's disaster restoration business benefited from the response to Hurricane Ian in the prior period, compared to limited storm activity in the current period. Improved pricing partially offset this sales decline.

Current wording

Our SPG segment experienced sales declines during the third quarter of fiscal 2024, which were driven by several factors. The segment's disaster restoration business benefited from the response to inclement weather in the prior period, compared to limited weather activity in the current period. The divestiture of the non-core furniture warranty business in the third quarter of fiscal year 2023 also reduced sales versus the prior period. Finally, although end markets showed signs of stabilization during the quarter, businesses supplying specialty OEM markets were negatively impacted by lower volumes.

Previous wording

Gross Profit Margin Our consolidated gross profit margin of 41.7% of net sales for the second quarter of fiscal 2024 compares to a consolidated gross profit margin of 38.5% for the comparable period a year ago. The current quarter gross profit margin increase of approximately 3.2%, or 320 basis points (“bps”), resulted primarily from selling 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 benefits generated from the commodity cycle.

Current wording

Gross Profit Margin Our consolidated gross profit margin of 39.9% of net sales for the third quarter of fiscal 2024 compares to a consolidated gross profit margin of 35.5% for the comparable period a year ago. The current quarter gross profit margin increase of approximately 4.4%, or 440 basis points (“bps”), resulted primarily from selling price increases and our MAP 2025 initiatives, which resulted in incremental savings in procurement, manufacturing and commercial excellence that favorably impacted our gross margin, in conjunction with benefits generated from the commodity cycle.

Previous wording

We expect year-over-year gross margins to continue improving in the third quarter of fiscal 2024 due to MAP 2025 initiatives, including benefits generated from the commodity cycle.

Current wording

We expect year-over-year gross margins to continue improving in the fourth quarter of fiscal 2024 due to MAP 2025 initiatives, including benefits generated from the commodity cycle.

Previous wording

SG&A Our consolidated SG&A expense during the period was $32.7 million higher versus the same period last year and increased to 29.2% of net sales from 27.3% of net sales for the prior year quarter. Variable costs associated with improved results, such as commission expense and incentives, were primary drivers, along with merit increases, increased healthcare costs, investments in growth initiatives and the $4.0 million expense related to the adverse legal ruling as described above in Note 13, "Contingencies and Other Accrued Losses," to the Consolidated Financial Statements. This was partially offset by reduced professional fees and reduced SG&A related to divestitures.

Current wording

SG&A Our consolidated SG&A expense during the period was $54.7 million higher versus the same period last year and increased to 33.1% of net sales from 29.7% of net sales for the prior year quarter. Variable costs associated with improved results, such as commission expense and incentives, were primary drivers, along with merit increases, higher benefits and insurance costs and investments in growth initiatives, partially offset by reduced professional fees and reduced stock compensation. In addition, the prior period includes the $20.0 million gain on business interruption insurance proceeds as described above in Note 16, "Contingencies and Other Accrued Losses," to the Consolidated Financial Statements.

Previous wording

Our CPG segment SG&A was approximately $28.6 million higher for the second quarter of fiscal 2024 versus the comparable prior year period and increased as a percentage of net sales. The increase in expense was mainly due to variable costs associated with improved results such as commissions and bonuses, along with merit increases and increased distribution costs.

Current wording

Our CPG segment SG&A was approximately $24.2 million higher for the third quarter of fiscal 2024 versus the comparable prior year period and increased as a percentage of net sales. The increase in expense was mainly due to variable costs associated with improved results such as commissions, along with merit increases, increased benefits, and increased bad debt and warranty expenses.

Previous wording

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

Current wording

Our PCG segment SG&A was approximately $7.6 million higher for the third quarter of fiscal 2024 versus the comparable prior year period and increased slightly as a percentage of net sales. The increase in expense was mainly due to increased commissions as a result of improved results as well as merit increases and increased insurance costs.

Previous wording

Our Consumer segment SG&A increased by approximately $1.8 million during the second quarter of fiscal 2024 versus the same period last year and increased as a percentage of net sales. The quarter-over-quarter increase in SG&A was primarily attributable to merit increases and increased insurance costs, partially offset by a decrease in incentive compensation.

Current wording

Our Consumer segment SG&A increased by approximately $21.6 million during the third quarter of fiscal 2024 versus the same period last year and increased as a percentage of net sales. The quarter-over-quarter increase in SG&A was primarily attributable to the $20.0 million gain on business interruption insurance proceeds received in the prior period, along with merit increases and increased advertising costs, partially offset by a decrease in distribution costs.

Previous wording

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

Current wording

Our SPG segment SG&A decreased approximately $0.3 million during the third quarter of fiscal 2024 versus the comparable prior year period but increased as a percentage of net sales. The decrease in SG&A expense is attributable to the divestiture of the non-core furniture warranty business in the third quarter of fiscal 2023, partially offset by investments in strategic growth initiatives.

Previous wording

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

Current wording

SG&A expenses in our corporate/other category during the third quarter of fiscal 2024 increased approximately $1.6 million versus last year’s third quarter. This was mainly due to increased healthcare, benefits and insurance costs, higher IT expenses and merit increases, partially offset by reduced professional fees related to our MAP 2025 operational improvement initiatives and reduced stock compensation.

Previous wording

We recorded $1.2 million of restructuring charges during the three months ended November 30, 2023 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. For the three months ended November 30, 2023, we incurred $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. Most activities under MAP 2025 are anticipated to be completed by the end of fiscal 2025; however, we expect some costs to extend beyond this date.

Current wording

The following table summarizes restructuring charges recorded during the three months ended February 29, 2024 and February 28, 2023, 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:

Previous wording

We recorded $7.7 million of restructuring charges during the six months ended November 30, 2023 related to our MAP 2025 initiative. For the six months ended November 30, 2023, we incurred $3.0 million related to severance and benefit costs, $0.2 million related to facility closure and 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 end of fiscal 2025; however, we expect some costs to extend beyond this date.

Current wording

Most activities under MAP 2025 are anticipated to be completed by the end of fiscal 2025; however, we expect some costs to extend beyond this date. We currently expect to incur approximately $33.9 million of future additional charges related to the implementation of MAP 2025. In addition, we incurred $0.7 million of restructuring costs associated with MAP to Growth for the three months ended February 28, 2023.

Previous wording

Our CPG segment results reflect volume growth, which resulted in improved fixed-cost utilization, favorable mix and MAP 2025 benefits, including benefits generated from the commodity cycle. Our PCG segment results reflect positive volumes and pricing, favorable mix and improved fixed-cost leverage, which were enhanced by MAP 2025 initiatives. Our Consumer segment results reflect gross margin expansion as a result of improved operating efficiencies related to MAP 2025. Our SPG segment results reflect sales declines, the 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 expense related to the adverse legal ruling and reduced fixed cost leverage at 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 related to our MAP 2025 operational improvement initiatives.

Current wording

On a consolidated basis, our results reflect MAP 2025 benefits, including benefits generated from the commodity cycle. Our CPG segment results reflect volume growth, which resulted in improved fixed-cost utilization, favorable mix and MAP 2025 benefits. Our PCG segment results reflect positive volumes, favorable mix and improved fixed-cost leverage, which were enhanced by MAP 2025 initiatives. In addition, our prior period PCG segment results include the $39.2 million goodwill and intangible asset impairment charges as described above in Note 4, "Goodwill and Other Intangible Assets," to the Consolidated Financial Statements. Our Consumer segment results reflect gross margin expansion as a result of improved operating efficiencies related to MAP 2025 and rationalization of lower margin products, partially offset by negative fixed-cost absorption. In addition, our prior period Consumer segment results include the $20.0 million gain on business interruption insurance proceeds. Our SPG segment results reflect sales declines, the divestiture of the non-core furniture warranty business in the third quarter of fiscal 2023, incremental costs from investments in growth initiatives and reduced fixed cost leverage at plants. In addition, our prior period SPG segment results reflect the $24.7 million gain on the sale of its Guardian business as described above in Note 7, "(Gain) on Sales of Assets and Other Businesses, Net," to the Consolidated Financial Statements. Our Non-Op segment results reflect the favorable swing in investment returns, reduced professional fees related to our MAP 2025 operational improvement initiatives and reduced stock compensation, partially offset by increased benefit costs.

Previous wording

Income Tax Rate The effective income tax rate of 25.5% for the three months ended November 30, 2023 compares to the effective income tax rate of 24.9% for the three months ended November 30, 2022. The effective income tax rates for the 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.

Current wording

Income Tax Rate The effective income tax rate of 26.4% for the three months ended February 29, 2024 compares to the effective income tax rate of 35.9% for the three months ended February 28, 2023. The effective income tax rates for the three-month periods ended February 29, 2024, and February 28, 2023, 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 income tax rate for the three-month period ended February 29, 2024, reflects incremental tax expense related to increases to our net deferred income tax liability for unremitted earnings, unfavorable changes in valuation allowances for certain foreign tax attribute carryforwards, and an adjustment for the tax related to the prior year sale of the furniture warranty business. Additionally, 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 was nondeductible for tax purposes.

Previous wording

Our CPG segment generated significant organic sales growth during the first half of fiscal 2024 in all the major business units in the segment when compared to the same 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.

Current wording

Our CPG segment generated significant organic sales growth during the first nine months of fiscal 2024 in all the major business units in the segment when compared to the same 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.

Previous wording

Our PCG segment generated organic sales growth during the first half of fiscal 2024 when compared to the same prior year period. Performing particularly well were businesses that provide turnkey flooring systems, which benefited from increased demand for reshoring-related projects. This increase was also facilitated by improved pricing and strong demand in emerging markets.

Current wording

Our PCG segment generated significant organic sales growth during the first nine months of fiscal 2024 when compared to the same prior year period. Performing particularly well were businesses that provide engineered solutions for reshoring-related projects. This increase was also facilitated by improved pricing, favorable timing of project completions and strong demand in emerging markets.

Previous wording

Our Consumer segment experienced organic sales declines in the first half 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. This decline is in comparison to a strong prior year, when sales grew 18.9%. These macroeconomic pressures were partially offset by market share gains, strength in international markets and improved pricing to catch up with cost inflation.

Current wording

Our Consumer segment experienced organic sales declines in the first nine months 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, reduced inventory levels at retailers, and the rationalization of lower-margin products. This decline is in comparison to a strong prior year, when sales grew 15.3%. These pressures were partially offset by market share gains, strength in international markets and improved pricing to catch up with cost inflation.

Previous wording

Our SPG segment experienced sales declines during the first 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 also reduced sales versus the prior period. Finally, the segment's disaster restoration business benefited from the response to Hurricane Ian in the prior period, compared to limited storm activity in the current period. Improved pricing partially offset these volume declines.

Current wording

Our SPG segment experienced sales declines during the first nine months 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 also reduced sales versus the prior period. Finally, the segment's disaster restoration business benefited from the response to Hurricane Ian and other inclement weather in the prior period, compared to limited weather activity in the current period. Improved pricing partially offset these volume declines.

Previous wording

Gross Profit Margin Our consolidated gross profit margin of 41.5% of net sales for the first half of fiscal 2024 compares to a consolidated gross profit margin of 38.5% for the comparable period a year ago. The current period gross profit margin increase of approximately 3.0%, or 300 basis points (“bps”), resulted primarily from selling 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 benefits generated from the commodity cycle.

Current wording

Gross Profit Margin Our consolidated gross profit margin of 41.0% of net sales for the first nine months of fiscal 2024 compares to a consolidated gross profit margin of 37.6% for the comparable period a year ago. The current period gross profit margin increase of approximately 3.4%, or 340 bps, resulted primarily from selling price increases and our MAP 2025 initiatives, which resulted in incremental savings in procurement, manufacturing and commercial excellence that favorably impacted our gross margin, in conjunction with benefits generated from the commodity cycle.

Previous wording

We expect year-over-year gross margins to continue improving in the third quarter of fiscal 2024 due to MAP 2025 initiatives, including benefits generated from the commodity cycle.

Current wording

We expect year-over-year gross margins to continue improving in the fourth quarter of fiscal 2024 due to MAP 2025 initiatives, including benefits generated from the commodity cycle.

Previous wording

SG&A Our consolidated SG&A expense during the period was $78.5 million higher versus the same period last year and increased to 27.7% of net sales from 26.2% of net sales for the prior year period. Variable costs associated with improved results, such as commission expense and bonuses, were primary drivers, along with merit increases, investments in growth initiatives, increased insurance costs, and $4.4 million of expense related to the adverse legal ruling, which were partially offset by the $11.1 million gain on business interruption insurance proceeds received during the period, reduced professional fees and reduced SG&A related to divestitures. See Note 13, "Contingencies and Other Accrued Losses," to the Consolidated Financial Statements for additional information regarding the business interruption proceeds and adverse legal ruling.

Current wording

SG&A Our consolidated SG&A expense during the period was $133.1 million higher versus the same period last year and increased to 29.3% of net sales from 27.2% of net sales for the prior year period. Variable costs associated with improved results, such as commission expense and bonuses, were primary drivers, along with merit increases, investments in growth initiatives, increased benefits and insurance costs, and $4.4 million of expense related to the adverse legal ruling. In addition, there was an $8.9 million decrease in the gain on business interruption insurance proceeds received during the current period compared to the prior year. These were partially offset by reduced professional fees and reduced SG&A related to divestitures. See Note 16, "Contingencies and Other Accrued Losses," to the Consolidated Financial Statements for additional information regarding the business interruption proceeds and adverse legal ruling.

Previous wording

Our CPG segment SG&A was approximately $59.0 million higher for the first half of fiscal 2024 versus the comparable prior year period and increased as a percentage of net sales. The increase in expense was mainly due to variable costs associated with improved results such as commissions and bonuses, along with merit increases and investments in growth initiatives.

Current wording

Our CPG segment SG&A was approximately $83.3 million higher for the first nine months of fiscal 2024 versus the comparable prior year period and increased as a percentage of net sales. The increase in expense was mainly due to variable costs associated with improved results such as commissions and bonuses, along with merit increases, increased benefits and investments in growth initiatives.

Previous wording

Our PCG segment SG&A was approximately $23.3 million higher for the first half of fiscal 2024 versus the comparable prior year period 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 as a result of improved results as well as merit increases, increased bad debt expense and the $4.5 million loss on the sale of USL's Bridgecare services division during the period as described above in Note 3, "Restructuring," to the Consolidated Financial Statements.

Current wording

Our PCG segment SG&A was approximately $30.8 million higher for the first nine months of fiscal 2024 versus the comparable prior year period 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 as a result of improved results as well as merit increases, increased bad debt expense and the $4.5 million loss on the sale of USL's Bridgecare services division during the period as described above in Note 4, "Goodwill and Other Intangible Assets," to the Consolidated Financial Statements.

Previous wording

Our Consumer segment SG&A decreased by approximately $2.5 million during the first half of fiscal 2024 versus the same period last year but increased slightly as a percentage of net sales. The period-over-period decrease in SG&A was primarily attributable to the $11.1 million gain on business interruption insurance and a reduction in variable distribution costs, partially offset by merit increases and increased insurance costs.

Current wording

Our Consumer segment SG&A increased by approximately $19.1 million during the first nine months of fiscal 2024 versus the same period last year and increased slightly as a percentage of net sales. The period-over-period increase in SG&A was primarily attributable to merit increases and insurance costs, in addition to the $8.9 million decrease in gain on business interruption insurance proceeds received in the current period, partially offset by a reduction in variable distribution costs.

Previous wording

Our SPG segment SG&A increased approximately $3.1 million during the first half of fiscal 2024 versus the comparable prior year period and increased 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, partially offset by the divestiture of the non-core furniture warranty business in the third quarter of fiscal 2023, along with a reduction in incentive compensation.

Current wording

Our SPG segment SG&A increased approximately $2.8 million during the first nine months of fiscal 2024 versus the comparable prior year period and increased 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, partially offset by the divestiture of the non-core furniture warranty business in the third quarter of fiscal 2023, along with a reduction in incentive compensation.

Previous wording

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

Current wording

SG&A expenses in our corporate/other category during the first nine months of fiscal 2024 decreased by approximately $2.9 million compared to the prior year period. This was mainly due to reduced professional fees related to our MAP 2025 operational improvement initiatives and reduced stock compensation, partially offset by increased compensation, healthcare costs and IT expenses.

Previous wording

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

Current wording

The following table summarizes the retirement-related benefit plans’ impact on income before income taxes for the nine months ended February 29, 2024 and February 28, 2023, as the service cost component has a significant impact on our SG&A expense:

Previous wording

Our CPG segment results reflect volume growth, which resulted in improved fixed-cost utilization, and MAP 2025 benefits, including benefits generated from the commodity cycle. Our PCG segment results reflect MAP 2025 benefits, improved pricing and benefits generated from the commodity cycle. This was partially offset by the $4.5 million loss on the sale of USL's Bridgecare services division during the period, the impairment of an indefinite-lived intangible asset, and increased bad debt expense. Our Consumer segment results reflect improved pricing, improved operating efficiencies related to MAP 2025 and the $11.1 million gain on business interruption insurance proceeds received during the period, partially offset by negative fixed-cost absorption. Our SPG segment results reflect 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 plants as a result of reduced volumes. Our Non-Op segment results reflect the favorable swing in investment returns and decreased professional fees, partially offset by increased interest and IT expense.

Current wording

On a consolidated basis, our results reflect MAP 2025 benefits, including benefits generated from the commodity cycle. Our CPG segment results reflect volume growth, which resulted in improved fixed-cost utilization, and MAP 2025 benefits. Our PCG segment results reflect MAP 2025 benefits and improved pricing, partially offset by the $4.5 million loss on the sale of USL's Bridgecare services division during the period, the impairment of an indefinite-lived intangible asset, and increased bad debt expense. Our prior year PCG segment results include the $39.2 million goodwill and intangible asset impairment charges. Our Consumer segment results reflect improved operating efficiencies related to MAP 2025 and improved pricing, partially offset by the $8.9 million decrease in gain on business interruption insurance proceeds received during the period and negative fixed-cost absorption. Our SPG segment results reflect 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 plants as a result of reduced volumes. In addition, our prior period SPG segment results reflect the $24.7 million gain on the sale of its Guardian business. Our Non-Op segment results reflect the favorable swing in investment returns and decreased professional fees, partially offset by increased healthcare and IT expenses.

Previous wording

Income Tax Rate The effective income tax rate of 25.3% for the six months ended November 30, 2023 compares to the effective income tax rate of 24.8% for the six months ended November 30, 2022. The effective income tax rates for the 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. Additionally, the effective tax rate for the six-month period ended 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 adjustments for U.S. foreign tax credits.

Current wording

Income Tax Rate The effective income tax rate of 25.5% for the nine months ended February 29, 2024 compares to the effective income tax rate of 25.9% for the nine months ended February 28, 2023. The effective income tax rates for the nine-month periods ended February 29, 2024, and February 28, 2023 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 29, 2024, reflects incremental tax expense related to increases to our net deferred income tax liability for unremitted earnings, unfavorable changes in valuation allowances for certain foreign tax attribute carryforwards, and an adjustment for the tax related to the prior year sale of the furniture warranty business. Additionally, 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 was nondeductible for tax purposes.

Previous wording

Approximately $767.8 million of cash was provided by operating activities during the first half of fiscal 2024, compared with $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 $46.3 million during the first half of fiscal 2024 versus the same period during fiscal 2023.

Current wording

Approximately $941.1 million of cash was provided by operating activities during the first nine months of fiscal 2024, compared with $263.0 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 $80.5 million during the first nine months of fiscal 2024 versus the same period during fiscal 2023.

Previous wording

During the first half of fiscal 2024, the change in accounts receivable provided approximately $199.3 million more cash than the first half of fiscal 2023. This was primarily due to the timing of sales in our Consumer segment and improved cash collections in the current period. Average days sales outstanding (“DSO”) at November 30, 2023, decreased to 63.0 days from 64.5 days at November 30, 2022.

Current wording

During the first nine months of fiscal 2024, the change in accounts receivable provided approximately $227.8 million more cash than the first nine months of fiscal 2023. This was primarily due to the timing of sales in our Consumer segment and improved cash collections in the current period. Average days sales outstanding (“DSO”) at February 29, 2024, decreased to 62.7 days from 65.9 days at February 28, 2023.

Previous wording

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

Current wording

During the first nine months of fiscal 2024, the change in inventory used approximately $197.2 million less cash compared to spending during the same period a year ago as a result of our operating segments continuing to reduce inventory purchases and use safety stock built up in prior periods in response to supply chain outages and raw material inflation. Average days of inventory outstanding (“DIO”) at February 29, 2024 decreased to 93.5 days from 109.8 days at February 28, 2023.

Previous wording

The change in accounts payable during the first half of fiscal 2024 used approximately $83.7 million less cash than during the first half of fiscal 2023, as a result of inventory reduction driven by improved forecasting and coordination between sales and operations. Average days payables outstanding (“DPO”) decreased to 81.2 days at November 30, 2023 from 86.5 days at November 30, 2022.

Current wording

The change in accounts payable during the first nine months of fiscal 2024 used approximately $111.1 million less cash than during the first nine months of fiscal 2023. This is associated with reduced inventory purchases driven by improved forecasting and coordination between sales and operations. Average days payables outstanding (“DPO”) decreased slightly to 83.2 days at February 29, 2024 from 83.3 days at February 28, 2023.

Previous wording

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

Current wording

For the first nine months of fiscal 2024, cash used for investing activities decreased by $21.5 million to $153.9 million as compared to $175.4 million in the prior year period. This year-over-year decrease in cash used for investing activities was driven by a $32.0 million decrease in cash used for business acquisitions and $41.6 million decrease in cash used for capital expenditures, partially offset by a $47.6 million decrease in proceeds from sales of assets and businesses, net.

Previous wording

We paid for capital expenditures of $89.3 million and $113.5 million during the first half of fiscal 2024 and fiscal 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 invest capital spending in growth initiatives and to improve operational efficiencies in fiscal 2024.

Current wording

We paid for capital expenditures of $138.1 million and $179.7 million during the first nine months of fiscal 2024 and fiscal 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 invest capital spending in growth initiatives and to improve operational efficiencies in fiscal 2024.

Previous wording

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 November 30, 2023 and May 31, 2023, the fair value of our investments in available-for-sale debt securities and marketable equity securities, which includes captive insurance-related assets, totaled $162.1 million and $148.3 million, respectively.

Current wording

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 29, 2024 and May 31, 2023, the fair value of our investments in available-for-sale debt securities and marketable equity securities, which includes captive insurance-related assets, totaled $172.9 million and $148.3 million, respectively.

Previous wording

As of November 30, 2023, approximately $239.0 million of our consolidated cash and cash equivalents were held at various foreign subsidiaries, compared with $196.8 million at May 31, 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 7, “Income Taxes,” to the Consolidated Financial Statements for additional information regarding unremitted foreign earnings.

Current wording

As of February 29, 2024, approximately $223.2 million of our consolidated cash and cash equivalents were held at various foreign subsidiaries, compared with $196.8 million at May 31, 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, “Income Taxes,” to the Consolidated Financial Statements for additional information regarding unremitted foreign earnings.

Previous wording

For the first half of fiscal 2024, financing activities used $610.3 million of cash, which compares to cash provided by financing activities of $14.2 million during the first half of fiscal 2023. The overall increase in cash used for financing activities was driven principally by debt-related activities, as we repaid $175.0 million 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.

Current wording

For the first nine months of fiscal 2024, financing activities used $750.8 million of cash, which compares to cash used for financing activities of $83.3 million during the first nine months of fiscal 2023. The overall increase in cash used for financing activities was driven principally by debt-related activities, as we repaid $175.0 million on our accounts receivable securitization program ("AR Program"), $250.0 million on our term loan, and $85.2 million on our revolving credit facility during the first nine months of fiscal 2024. See below for further details on the significant components of our debt.