RPM - Earnings call transcript Q1 2018

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Operator

Welcome to RPM International’s Conference Call for the Fiscal 2018 First Quarter. Today’s call is being recorded. This call is also being webcast and can be accessed live or replayed on the RPM website at www.rpminc.com. Comments made on this call may include forward-looking statements based on current expectations that involve risks and uncertainties, which could cause actual results to be materially different.

For more information on these risks and uncertainties, please review RPM’s reports filed with the SEC.

references to call, financial conference this maybe non-GAAP made measures. During on non-GAAP you directly has measures in assist terms, comparable RPM's understanding financial most To the these RPM website. to posted GAAP the reconciliations

remarks. Chairman presentation, Sullivan to note only go ask turn over Please Please questions. the today’s [Operator permitted time, for this RPM’s will that there question-and-answer call financial a Following session. and be sir. I Frank Instructions]. At be opening analysts CEO, Mr. to will ahead, would to like

Frank Sullivan

Thank Good Inc. XX, Christine. quarter fiscal morning, you, the and August RPM Investor XXXX welcome International XXXX. ended our to Call for first

and X.X%. came our businesses, markets a X% will year the to U.S. and towards last perpetuate driven end On of in prior the material all SG&A a costs of year, our growth our the your quarter. discuss bit and actions driven as and cost Canadian quarter of undoubtedly results, and quarter. helped Sales offset acquisitions Rusty growth well Officer; by environment questions. top Barry Better fiscal the RPM’s segments. of while in call strong Slifstein, for our anticipated segment throughout In a in acquisitions the reduction then Vice XXXX provide our from year line through Vice first of organic severe guidance the Investor growth saw leverage the are some the the we’ll second Gordon, percent quarter, our contributing quarter, challenging started price sales of President President much segments and construction higher balance were answer and three and Today, season increased we Financial me with Industrial hurricane Chief the Industrial solid in growth soft. as raw line of raw from increase first material European today Relations. organic by XXXX Specialty in The Good actions

and our services hurricane company our were in detail our X%. I'd organic increase raw X.X%. EBIT offset of higher to X.X%, unfavorable consistent of efforts driven We coatings, the continue and X.X% increased portion We increased growth mix, of last last to of results the strong see of in gas due and segment recent oil Industrial with were solid down operation. sales cost a an year's by offset Latin the turn combination Foam, in cost driven takeaway which reductions robust n’ Sales costs, for powder very were Harvey couple leverages. wood than on higher with Organic the to customers. including more trends been Sales Sales with saw impact across over in an Europe. in growth businesses. material our consistent and in to distribution of paint over by Slifstein quarter now treatment, industry recent which results by Touch slightly across consumer as serving markets company a reflect SPS evidenced results in material to the the segment closure the We underperforming particularly the their provide Consumer in higher softer product acquisition A with mostly expenses, and costs Rust-Oleum more quarter, at the SG&A in year call Brazil, raw like decline quarters. European the in segment DAP EBIT the in retail SG&A, strong consumer significant restoration America has good and general. of were in and is wood category higher disappointing and in preservative first able results. you costs Barry reductions, material of last response by Specialty acquisitions resulting to immediate to segment

Barry Slifstein

Frank XXXX XX, good turning on balance flow of Thanks everyone. quarter, and of cover call provide results fiscal the first who for more the our morning cash August XXXX to some then sheet and and I XXXX. the guidance items will Rusty operations fiscal for will before our over detail review balance

to by growth of sales to added million. translation year. last X.X% million quarter by sales added added last X.X%, X.X%, million. $XXX First $XXX Consumer sales and translation growth and Organic year. $XXX.X $XXX.X increase X.XX from X.X% segment $XXX.X consolidated increased decreased sales X.X%. by currency sales increased reduced foreign foreign foreign and increased increased quarter currency to sales million Acquisition X% X.X%. sales X.X%, acquisition Organic X.X%. translation currency reduced sales X%. increased translation Organic from $XXX.X million. from increased growth X.X%, quarter increased increased to sales X.X% net foreign profit X.X% acquisition growth increased X.X% segment X.X%. Organic Consolidated Industrial sales currency over by million billion, sales X.X% gross Acquisition and X.X%. Specialty added sales segment

As by million costs, declined a increased mix. last due sales XXX higher year. material healthcare SG&A to X.X% acquisitions, expense. shift to debt percent bad by largely $XXX.X expense raw unfavorable of and higher increased increase to and costs net due from Consolidated volumes, principally partially lower higher driven in The freight $XXX.X was basis offset sales, points an gross profit million

leverage XXXX. lower X.X% to raw EBIT offset as gross to receivable $X.XX the margins was of last deferred foreign XX.X% before disappointing year's higher higher XXXX-XX. credit tax $XX provided to Consolidated raw This look and the of expense taxes, material was tax year, from declined to due year, attributable costs. year reflecting lower $XXX.X fiscal in Latin to August and results of acquisitions with other acquisition change tax of organic bond. by was than sales, operating $XXX now year the $X.X corresponding margins that, actions $XX.X income. Current we last related to in and XX.X% year last and $XX.X a XXX(g) the XXXX balance $XXX to share. costs. quarter last million professional August income of from $XX.X lower year's million and a outside May, plan SG&A and trust ended pension year from cash Net X.X% XXXX related fiscal EPS over mix, to the the solid changes to segment $XX.X modest million leverage of profit cash million from also Rusty. in of X.X% sales $XX.X to the year. decrease was partly and cash to The $XX.X America. December costs. $XXX.X million, adopted The due operating planning billion we the collections predominantly of accruals fees. due million. $XXX.X reflecting had year's XXX the this last $X.X is XXXX year. on rate X.X% interest combined at pre-funding for offset reduction raw this Consumer million jurisdictional million and rebates Total EPS by million benefit which Income months from the ended million, of short-term year $X.X Last increased compared EBIT, liabilities. for our timing to I'll debt increased million share compared February as million higher and attributable May. Industrial XX, Cash to last basis With to effective XXXX Specialty offset last by three rate the was in of pre-funding the billion of on compared income debt million from pension SG&A year, quick to activities million turn from of EBIT for discrete percent higher last XX.X% of offset to for of costs, slightly $XXX.X The benefit capital due in per increases large trust growth better last better principally X.X% segment points year million million. to company year and increase of material was ASU $X.XX per structure. compares is $XX.X a and payment timing mix experienced associated average contribution payment the to year tax call sales the material declined in Included XXXX and operating the and August XX.X%, higher gross EBIT services due to maturity largely based in in from sales taxes, partially to an net flows a partly used versus of XX expense XXX(g) X.X% lower unfavorable months of product increase taxes. income SG&A The debt of Corporate material is a $XXX.X to discrete in million million we profit And tax increased cost $XXX.X sales, leverage million effective customer increased acquisitions. million the on decrease upcoming by December the $XXX of share higher last attributable $XX.X increased principally activities income by $XX.X XXXX total sales used of this compensation reduction earnings by acquisition year three with largely SG&A raw last As last XX, segment rate

Russell Gordon

Thank our on balance you, year. fiscal Barry. some the will XXXX provide And I of color

In internal line our start cost with with SG&A control. in going with which we expectations offset are. Let our was and included which up quarter me the our performance first tighter material we plan raw where

our second we've and have we which forward quarter disrupted also of costs had in the recently. most to second Now hurricanes as material the roll raw sales quarter that's activity some higher to led

the fiscal as rebuild sale impacted have into XXXX the the increased that been the half XXXX do we into hurricanes year of affected of fiscal So expect back areas by areas. these in country and

to continue going now are to raw response we material prices inflation. segment I'll the increase in to each specifically. Additionally address

and Let's specifically we nice in acquisition Europe you've and to conditions the we growth the expect Latin economic Brazil. had continue. that continue into In more start poor in Also balance sales Canada strong in of quarter segment. we a had We've to heard. expect America, with organic first as Industrial

rebound construction U.S. market a expect the coding to We markets in commercial favorable the see recent recently we the some balance that's the construction do seen industrial the year. Our in fiscal rebuilding a sales especially second business do most South of provide the we impacts though occurred which We be nearing to promise expect in point of forward hurricane. at U.S. seemed to do half the to the continue from the our and some most our even energy in in in activities continue for years. the year, with haven't the bottom momentum

balance the sales the Industrial of segment to for we in range. So expect grow mid-single-digit year the the

the Euclid efficiencies. entire will Industrial segment expenses of Euclid incur improved operating to Group cost to we're savings leverage driving newly on realignment continue the Flowcrete we and relating focused this Additionally and future formed into to ongoing very the additional involve and generate integration and throughout

Consumer be consumer move this you at to weaker significant contribution sales I'll heard acquisitions quarter confidence. In favorable when got numbers, The employment segment. for the that to Next about and organic growth housing, sales from earlier. residential we the conditions the you first Consumer look some economic continue segment offset to

So the Consumer our expect of in grow segment for would mid-single-digit the the we sales year range. balance to

nice the balance we segment, and to as first driven on have organic higher the of specialty quarter a talked equipment about sales. moving by growth Next acquisition restoration in we

wood get to as in coatings second wood nicely treatment. additional preservatives products have Powder in and expect that our which been volume include protection the We quarter. growing business good have

grow to the expiration. the of negative low range. expect for are balance to our On in year be coatings patent But for segment we business in the a mid single-digit of year specially the side to affected edible sales rest we the the nevertheless by going our

full-year maintaining guidance in are to XXXX our of range share. fiscal EPS we the $X.XX $X.XX overall a So for

will we be answer Now pleased to questions. your

Operator

question first from Mitsch Instructions] Please Fargo. comes ahead. Frank you. Thank Wells go from Our [Operator

Frank Sullivan

Good Frank. morning

Aziza Gazieva

Hi on Hi Aziza morning. It Frank. guys. is for good

Frank Sullivan

Aziza. Hi

Aziza Gazieva

Hello.

array of can materials, you specific you this at elaborate which raws give So with concern an time? most on guys such raw

Frank Sullivan

that's good like the actually building in MMA resins, the greatest of that have our and the and And issues flooring for the quarter was silicone, materials some that epoxy because been us We anticipation some MMA. Sure, interrupted some raws ability in neighborhood of categories supply. have there of news. categories resins, on had in shortages our We had the deliver which in be isocyanates. would Most of shortage impact I easing. to had were corrected, think sealants sales raw a acrylic backlog product some

and I on still will think the it the suggested impact two. issue the hurricane North for industry coming quarter its activity or be chemical American an

Aziza Gazieva

the Okay and as within update with provide you're Thanks. seeing Kirker could you consumer, to an what business?

Frank Sullivan

lot relatively rebuilding of and sales to it the the material, very things and with the better know past or in Kirker and grand talked you a and stabilized business or in new earnings, Kirker we contributed its business a decline not decline we growth have and and leadership are quarter the Sure, and in neither earnings team. management. the about scheme in it’s sales has It’s flat stable,

Aziza Gazieva

you thank Okay, guys.

Operator

you. Thank

Morbelli from & Company. from Our next ahead. question Gabelli Please comes go Rosemarie

Rosemarie Morbelli

Thank you the could paint side. the are wondering consumer I on you. touch Good The morning negative if categories. was trends everyone. for Frank,

We everyone, in you have are heard not paints, projects. focusing that in you architectural small but mostly from are

some of wood the can and what you why you give details So to done? are it your as in seeing neck is us

Frank Sullivan

in were but results our segment year that's Sure, segment also them, of been down to results relatively ours for billion XX have ago, sales quarter June most the directly RPM, XX% comparison is X%. consumer couple for comparison the the in last each flat XX end strong where for quarter about peer comparable I for of think of our down in whose organic DIY quarters were and to public $X.X the March their consumer and and

we in are gaining only not some certain we're So holding own, our share areas.

of a challenge relative I at to weather-wise put can bit broadly they a interesting on also there has spring think terms some weather. just by painting out in very in general are the little to very whether tell as amount. of I to big and and year Barry there a questions dollar an this retailers season been some a lost wet trend think wet you box the has June I categories their statistics was

Barry Slifstein

double-digit at you the you the items when scroll are been the up are only that and deeper that know a are you mid-single same-store it's the items close above range, and $XXX a range. generally growth, whereas digits, are driving the large in lot has X% $XX that our to in of below that to discover Yes, in sales down ticket but retailers bit X% that growing

look like terms introductions So growth in on in business those internal and an are satisfied some consistently basis, in more are consumer our terms share, of set data we the statistics are that the market we a new product see than but can we achieving we the to results on and with on, at, basis. On peer sales the not working that of we are comparatively to of comparative we see that. public

Rosemarie Morbelli

mostly vis-à-vis your I do, can you being projects peers, think about contractors. mean given we paint to you do architectural What are talking

small doing seeing [ph] to projects So that to the type you products your it? like other as of are going contractors sparkling that and also selling opposed small are are you individuals

Frank Sullivan

No, architectural and know we competition impacted movement not so between I and are between business, we the are paint Stores. DIY by that in don’t the the Paint there directly

of about model our in its home be its of interesting in it’s company which customers think versus happen competitors to largest stores. centers, Paint hardware that strength U.S. paint discounters, talks the terms the I and the Store biggest

paint and in we categories the we serve customer well, and sealants patch to small continue in repair compete. which quite and our project So base adhesive

Rosemarie Morbelli

I and us performing give side, weak. terms factors in well being there that you of more on were little may then you Could areas mentioned lastly the others some And if categories? those in a industrial Okay. each

Frank Sullivan

Sure.

for the it’s that we've strength solid Latin us backlog was stores to The suggest and there. are related universally pretty have first so also Europe a us. huge essentially noted coming in I But where the the that You presence and three better serve. and is North negative got better troubled the like years they at very that solid and it’s biggest Obviously there states is a they or you both some up. activity of sales us our suspect choppiness Dryvit were is had we've that of to been would Brazil relative performance biggest The two in population know challenge so number has Tremco and was Canada a activity. choppy. time doing most Florida Almost is continues then doing and and customer are and FX construction, pretty to construction much on indicate there America. the consumer construction American businesses recently as we level to impact where earnings. of results hurricane FX, in our little been our markets temporary haven’t in for had economy. a America and we neutral, relative FX Latin in weakness for of be noted Texas

Rosemarie Morbelli

Okay, thank you.

Operator

Thank you.

comes Our Please America. of Steve go next from ahead. Byrne Bank from question

Frank Sullivan

morning. Good

Unidentified Analyst

good some This you reduction you is how initiatives, SG&A Ben they in morning. those can [indiscernible] detail the Steve. and are approaching just commentary, ongoing question still on Hey are for SG&A this? about of discuss more Quick

Frank Sullivan

We in We closed had businesses some parts different competitive little a had and continued ’XX Fiscal our affected of into more We and a focused yearend Europe. I in operation we XXX base Middle allow across be both about Sure. that address industrial us expense look number SG&A RPM. efforts underperforming our year. underperforming the We closed businesses we a we of think have at will Fiscal time. operation And in that that will in an initiatives and the where into people known globally realigning were same particularly rift certain markets combining an ’XX last ways in to as bit some be segment East.

Unidentified Analyst

that’s helpful, you. thank Okay,

Operator

Thank you.

Our go next Baird. ahead. question comes from from Please Ghansham Panjabi

Ghansham Panjabi

Hey guys, good morning.

Frank Sullivan

Good morning, Ghansham.

Ghansham Panjabi

Hi Frank.

So of price? how figure lot think about just the ’XX first the side the are growth about and have pricing trying that up for by core mean segment initiatives out that on of you as between off thinking sort you should underway, obviously I to of progresses? we and cadence breaking how year volume

Frank Sullivan

Sure.

about it stronger we little are just a the the know hard suspect to choppiness X% You of some I hurricane is in be standstill segment up and of industrial growth afterwards months core there the a in weaker a there. in to are and we fall and seeing to in the Texas almost see back generating things activity because little relative was know, we're Florida and pick might but starting

selling about dehumidification that which some issues, spring consumer, to now. their air far weather Our specialty the edible see demand exception of who management share the has On maintained and much patent beginning that the up segment rain water XXX% at so so businesses of there coating handling, the in second almost relationship news food and is of we equipment business on ’XX. because the half of their and Brands the the expiration, with good in but a obviously is base we in market to is I to exception sales rate we we heavy will staring organic profit our be relative of make year-over-year segment will of coming a can specialty in so digit lower in pick kind they the growth comps the quarters dollar easier modestly and base, of be the team with negative. will Legend single the everything think low talked restoration, of The lower in the rest right issues that

initiated sense X% you a how gives average we consolidated a RPM that thinking I On reasons to of organic X% provide growth. September. that a basis, action segment would On not about range. in it’s are hopefully we of data. was On August, for think was pricing it in competitive and some the most across So of basis the of as

Ghansham Panjabi

cetera, quarter about from the Okay from followup the a high of to the how on just the impact that think it through second as weather quarter point? relates super and on should Ross back we net so an much. Thanks half helpful. the earning [ph] And the extent year specifically et as progression impact

Frank Sullivan

Certainly.

think I know, the we continue you margin quarters. challenges So see gross will to coming in

to SG&A see improvement You of year-over-year sales. should a also as percent expect

indicated with up-to-date and people provided I are we comfortable guidance of will that As we the Rusty keep hurricanes of changes certainly even some that disruptions year. unanticipated the in throughout the the if think light around we

Ghansham Panjabi

thanks so Okay much. great,

Frank Sullivan

you. Thank

Operator

Thank you.

Stanley. go ahead. comes next Andrews from Our from Morgan Vincent Please question

Vincent Andrews

this on to but is some in that give Thank ’XX whether good year numerically you another if in programs everyone. just wondering a you happen you of what are forward you be on haven’t I SG&A curious depending more out, the working progresses, and of on? am an quantified how on from Frank, pull are just question SG&A things from what’s goals have can for on out how you of you potential your morning programs. and to if May terms detail the things play quite have the things or mind us so range just depending perspective a the going there ’XX year, outcomes some push little

Frank Sullivan

Yes.

not regs think the about what certainly a) smarter about do did position as b) in announcing we and a that and to being to when support we accounting gotten future I what We time we opposed are do it do really that. have better in over might

will to eight in and I out If of or of call to millions of we will activities a mostly focused think we them so out six quarter we in activity that reduction worthy enough necessarily the items quarters cost adjust out. calling terms out. singles sizable nothing of we restructuring that type looking industrial, look are of specific in specifically at there over are terms dollars of are the call next them at

Vincent Andrews

How looking had now? you successful is obviously in M&A the a followup a last as just year. And very Okay. pipeline year

Frank Sullivan

is here quarter there completed multi-billion a of kind all course lot acquisitions M&A couple see. a kind the that know there. good of the the not a industries of most then backlog is middle And much out a small-to-medium first of in that’s of have you of across there lot we and transactions think acquisition think small pretty the sized we in activity I landscape I and in dollar industries and also Sure, of

Vincent Andrews

Okay, thanks very much.

Operator

Our question go Kevin Research. from ahead. next comes Vertical McCarthy from Please

Kevin McCarthy

how Yes. are So gross basis view declined you points Good your the and can margin you're price occur? quarter, close materials first morning, based and actions the when discussions you? that XXX think on your of you fiscal might in that raw having if gap do now so and that

Frank Sullivan

Not until half year. the second of the

Kevin McCarthy

is profile an material ebb that the through hurricane the or effects And perhaps? expectation that on price cease flow as raw Okay. both or will based

Frank Sullivan

terms of which the easing as in quickly elimination the of that and industry I up that raw of the cases in materials us some the of thought happening that first saw shortages in function pretty I which think of of combination the significantly impact it's it's happening a impact a we not of think impacted is quarter we some the in as part because of hurricanes. And anticipated our think has our rising easing the been surprisingly. industry we in of some of both, and and I across others and capacity

So, fighting certainly issues through I going be the to gross second suspect margin quarter. we're

Kevin McCarthy

the quarter Rusty, expectation would beyond? the for for what helpful your That's in if and I be rate the then and second one may tax last

Russell Gordon

tax rate hasn't fiscal outlook changed really the our Yes, on Kevin. ’XX. Sure for

all XX% better changes the rate the tax in first in on quarter so media rate, some to We’re are be tax rate still in We expecting that, as to did in same were we on going to due about the with the for overall than we we expected but planning. the did last have the line a July. gone with range. XX% in That's talk the tax year still better, slightly year’s

Kevin McCarthy

thank Very good, so you much.

Frank Sullivan

Okay.

Operator

you. Thank

from next Please comes question from Our go Capital Arun RBC ahead. Markets. Viswanathan

Frank Sullivan

morning are Great Frank. How Viswanathan - Morning. you? Good Arun Q Good thanks.

Frank Sullivan

Well, thank you.

Arun Viswanathan

it margins and a the affect the our pick to potentially line like looks quarter, of then question the the top And that that charges of or so looks rest related should the year? Just was is margins a on acquisitions the quick about it should acquisitions or driven? so acquisitions, contributor modeling, is slightly the because that level were year up like so were X% more that the below through right Ross in the

Frank Sullivan

First second of quarter the of last after acquisition will second base so of all half of the activity in the spring. largest the through mitigate chunk revenue as kind happened the January our year,

like by in the well been have original acquisitions So almost to impact expected. of schedule third but issues. our bottom integrated the in But end of it line general they impact our performing those much in fourth a impacted good the an businesses our impact XQ. raw above at the rest won't But have have and they're were strategic businesses zero expectations. ahead of every comparable that should quarter performance in been of quarter, we've or has integrated, at is also of case. but it and they the The as that Certainly material are

Arun Viswanathan

do you through come than volume like And the in coming hurricane seems It back through? through from you how that that flow or is fiscal earlier year you the some to expect efforts. increased rebuilding expecting you noted also the of do is or half it expect then of kind expected that that right you're

Frank Sullivan

It's hard say. to

of certain are the one We challenges businesses terms staging I are timing contractors I commercial have and construction of like and certain a our you labor. other in in when and the backlog bigger things across can and construction and challenges tell ready seeming of capable think growing is industry construction

are terms impact those renovation. so of any re-modelling And the of in rebuilding of the biggest two or factors or timing

Arun Viswanathan

it I you the and I couple say year Maybe increased your or as what you're last the your ago in environment rest mean, comments consumer to is and can environment that there materially? structural a reiterate there environment. Thanks seeing relates and has think just the just specifically you for is outlook a the of DIY it appreciate of DIY kind anything down one versus the as slowed DIY on years of

Frank Sullivan

of big No, partner in but of A new of but to think is architectural had had almost of which being organic channel category a again the quarter competitors that are think items lot architectural X% I and area own is certainly retail we which ticket it's X% weather major pretty and in the into first in and interesting growth paint that could Part in, say. were our and facing statistic be certainly customers ran to relatively those ago a there was fourth disappointing. we impacting is versus us amongst fight and do we peripherally I focus continue paint It a up some be. our year and below their flat. it larger some comps to extent on last high X% the are that the businesses. of others There's discussion issues retail are producers our year introduction an paint that's think terms our would the that But in products from of both quarter to that's customers I are it we or the not hard who it. major growth. single it's around food part XX items share we're reading and in organic so where Last digits our year also in big bucks XX% Barry

Arun Viswanathan

thanks. Got Thanks. it. Great

Operator

ahead. Instructions] [Operator Kueck from you. Morgan. P. next Silke J. from question Our comes Please go Thank

Silke Kueck

morning. Good

Frank Sullivan

Good morning, Silke.

Silke Kueck

And normally Europe was wondering got was general also announce price the if I much sort do or you got you margin how effects it price you you, getting increase And like X% in X% acquisitions? a any XXXX? any in of up as the whether like or you price if like get of way in fiscal track or end half everything, record? what negative wondering that from gross you've

Frank Sullivan

reverse acquisitions. effects order. the take So questions There I'll no your negative were from gross margin in

margin negative was of One gross the factors on mix. our

in margins had product margins of higher lower carry carry businesses that for U.S. construction in roofing we and waterproofing the some that chemical some So higher some lines than in Europe the instance revenues

just big in geography. businesses wasn't particularly it Ross our was and issue, in but segment. our of was product function So, of industrial essentially both Mix a terms that core a categories in

virtually investors RPM to there been on the from while terms circumstantially RPM we some of appropriate sit in cases modest on it's it and others more do we're to again year-over-year raw facing really what of those across number consolidated a in and basis than then material on And raw Obviously to We X% we product had number X% learned competitively price breadth increases than think specific increase. over it to August basis in happens given beginning activity increases provide on I need and then that segment. by price, a and increase depends. years really price so In no consolidated the of businesses think competitive where color be a relatively X% good what been availability harm does it's average in a in with to truly on and carrying of some the the ’XX. today point that have I increase it X% price the materials circumstances. material, that the lines And and of hope throughout raw or it's depends we've is there and year, to would the about do depending more may see in September

Silke Kueck

Thank you.

Operator

you. Thank

Our Please next Richard from Revere question Associates. comes from go ahead. O'Reilly

Richard O'Reilly

gentlemen. Okay, good morning, thank you

Frank Sullivan

morning. Good

Richard O'Reilly

Two quick questions.

on just normal else about expense secular distribution industry The industry, is expense is or asking cyclical I'm in there your distribution this is something first and and that's changing? something one higher going in trucking a freight the comments being rise

Frank Sullivan

unique clocking disruption new No, risen the particularly the this onset different the the is and the electronic that driven I trucking last of is challenge and think area around costs. miles us, be challenge biggest think to and then in freight of issue can is have of in the little regulations to not hurricanes. some freight ends a And which years other biggest is I that as and choppy odds the the ours general over again of couple freight

couple some for that's our shipping caused truckload and number of in one instances, and Really some less issues, number move water or a position renovation products. some terms secondly have a customers, hurricane just meet us than that's or that's And to distribution or needs restoration dislocation meet caused for so of sealants normal of of caused the the of things, many in so of the to emergency but some requests we the restoration waterproofing and around it's customer had some model products some issues, freight some temporary.

Richard O'Reilly

related businesses. is oil second and your related to Okay, gas question

I release or or comps year. to businesses changing expect turn you do think in you something press you turn just positive of the half positive second the end see that markets? Is the says allow these in to the improving the

Frank Sullivan

the And stabilize as the earnings single half we double-digit over two not seeing I digit mid in markets. and are second any could the I your we've think of any We're get related categories in seeing at to facing those double-digit contractions declines anticipating way low our earnings. comps be in about not that right if and double-digits low guess think robust will years we're now we're through it's pickup to and more comps year by seeing things this mostly you or declining business your earnings, stage sales it. been think that's easier the of of sales

Richard O'Reilly

good. Okay, guys. you, Thank

Operator

the you. I Sullivan Thank back call closing for now over to turn Frank remarks. will

Frank Sullivan

your reduction to have Holiday our results will your thousand RPM performance challenges given for in our the in first We RPM. We're about for and you we quarter them a we some about interest work your material year and the of Inn, balance Thank our anticipate through solid interest and terms of continued day. issues at quarter shareholders both area with will cost the as the call a and of today. for where initiatives for Have hurricanes. of we raw as and year in SG&A growth quarter greet as today. RPM you and Thank in of outlook year, our Tomorrow the around in for the some appreciate in terms participating talk well. unexpected Strongsville our the in as first great annual of meeting the organic performance investor our time on call well the pleased our shareholders in

Operator

Thank you for ladies Thank This you and gentlemen. participating. today’s concludes conference.

may disconnect. You now

RPM International (RPM) 4 Oct 172018 Q1 Earnings call transcript