RPM International (RPM) 25 Jul 242024 Q4 Earnings call transcript

Company Profile

Participants

Matthew Schlarb	executive
Frank Sullivan	executive
Michael Laroche	executive
Russell Gordon	executive
Michael Harrison	analyst
Kevin McCarthy	analyst
Frank Mitsch	analyst
John McNulty	analyst
YIfei Huang	analyst
John Ezekiel Roberts	analyst
Ghansham Panjabi	analyst
Jeffrey Zekauskas	analyst
Joshua Spector	analyst
Steve Byrne	analyst
Vincent Andrews	analyst
Michael Sison	analyst
Aleksey Yefremov	analyst

Call transcript

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Operator

Good day, and welcome to the RPM International Fourth Quarter and Fiscal Year 2024 Earnings Conference Call. [Operator Instructions]. Please note this event is being recorded.

I would now like to hand the call over to Matt Schlarb. Please go ahead.

Matthew Schlarb

welcome Fourth International's quarter and the call Andrea, XXXX fiscal and you, to conference RPM for Thank full year. being is call recorded. Today's

Joining uncertainties, website also Chief statements Sullivan, Gordon, today's and Chief Laroche, Frank and This be accessed involve Controller and which include call Rusty call can Officer. on forward-looking CEO; is Vice based RPM's President, this Vice webcast Officer; to different. Financial current made Chair cause and Accounting and being be Mike President risks live replayed could and at on results actual call www.rpminc.com. Comments the that on RPM expectations materially may are

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

assist reconciliations comments you fiscal has on RPM understanding terms, otherwise basis conference RPM the on financial note non-GAAP of to that in references our unless will fourth the During made this to To call, these posted directly be Also, indicated. quarter please XXXX, the measures and to be may comparable most website. all GAAP comparisons as-adjusted non-GAAP measures. an financial

supplemental presentation We section a Presentations the Webcasts this at accessed in slide can provided for the and on our of website RPM call. have It www.rpminc.com. comments be

X, previously June businesses XXXX. Asia certain Coatings reported and reminder, are a As now managed effective the Pacific part that in Construction were of being Group Performance Products under Group the

This change impact result, to reflect no reference updated the has all a structure. consolidated today As results. PCG on the

At this over the call to Frank. time, would turn I like to

Frank Sullivan

details and and challenging a will executed. tenth generate financials. Mike adjusted high-level we cover with give Laroche which businesses, MAP on we'll to several of balance results. Schlarb morning. on RPM's of our grow, using we're associates more end X innovation our answer a call our how results, start after improvements conference begin then pleased Overall, Rusty sheet outlook, then I'll be of we Thank EBIT. how and fourth provide our Slide to questions. I'll quarter consecutive Matt review will our update markets are then Despite in to full fourth quarter our good your pleased discuss you, with leveraged Matt, quarter year with will our Gordon XXXX record

year, or record increased XX% approximately fiscal included million was to P&L in and a a MAP sales a This the For ago. roughly were of EBIT through million within record approximately which we on the $XXX guidance rate XXXX adjusted basis a the run benefits year provided 'XX. $XXX

temporarily utilization being by from Although cost volumes. a are of lower fixed portion reduced masked these

has year. XXXX to structurally in played resulted 'XX annual addition improvement margin activities expansion, of throughout In MAP previous XXXX a record This million the capital fiscal million $XXX and over of to working from during flow flow. cash XX% entire $XXX from an operating record role our our $X.XX or billion in than critical cash fiscal improve ability more

a resulting fourth us to the portion a and year share. this per $XXX helped EPS a approximately for quarter during to by XX.X% $X.XX debt record interest the reduce used We full expense by and adjusted year the and grow cash of record lower million by XX.X% to

businesses strength. Construction Moving of particular the demonstrating and quarter most with our offerings, during with Group turnkey strength to growth led differentiated in Products Slide X, its their broad-based roofing

market adjusted mix record share MAP to and well gains, 'XX continued DIY executed generate EBIT upgraded decline quarter realized benefits product as during due despite softness. sales a also Consumer the achieved they

we from our Performance project in year Coatings Group our highlighted quarter completions, call. of the experienced prior years they on challenging multiple declined achieving the record faced something as and fourth prior headwinds comparisons to After results, the negative earnings timing

economic to group, Products out remain remains situation bottoming challenging. continue of very markets segment. we but The signs Specialty showed this some end the challenged In in

However, we on record of generate we good adjusted and 'XX improvements job cash to levels with EBIT focus did record what can control MAP a margin and flow. a managing

in Turning well And to these declined to we're geographies declined grew. on headwinds Coatings still regions, Slide the Group. FX X. North sales other in divestitures America, Middle areas. the European Africa executing X% Performance in sales while and due and East

product as However, generating including 'XX their focused profitability region improved those meaningfully initiatives targeted in on the MAP gained momentum, favorable mix.

Latin serving Excluding digits mid-single infrastructure benefit product FX, sales to grew from America projects. continue as we in

Asia Pacific our well management performing new is under structure.

project comparisons challenging to completed period. due declined prior sales quarter large the in was as fourth However, a year

margins face gross To realized result good initiatives. of in the have end our as performance, we challenges, economic MAP summarize several a our improvements 'XX of and in market

more In way is We 'XX us addition the initiatives structure. better of to to us the to quarter, gross efficient RPM took a and which our through create reduction SG&A MAP in benefit SG&A allowing work several as profit streamlined XXXX. fourth leverage will we power benefits, fiscal

are structural. As to we improvements economic it's the headwinds persist, making remember important are that

be helping their better more apparent end will are and generate they recover to navigate even eventually begin near-term challenges, growth. we us benefits While markets organic as

Laroche over financial now the to like turn to results to in our I'd more cover Mike call detail.

Michael Laroche

benefits, XX fixed quarter group. by the MAP expanded incentives consumer SG&A long-term increased leverage of Consolidated margins as the X.X%, higher-margin pricing Group in EBIT to mix Thanks, slightly improved a was Frank. decreased and favorable to quarter. Construction modest which sales at headwind sales and increased XXXX was Starting sales driven by in revenue compensation X.X% benefits. products, FX points, and driven was during at by the divestitures higher on growth were Products investments for basis sell flat. X.X% organic acquisitions Slide volumes resulting . net and cost the and decline X. overall

and our benefits XXXX the we mentioned, fiscal Frank those in initiatives improved year SG&A to structure As quarter, fourth in enabled streamline be will realized in XXXX.

by which debt to flow growth XX.X% us the increased allowed a driven quarter. lower adjusted strong during EPS Adjusted as expense to EBIT and record, $X.XX, interest was cash repay the

The and The came particularly both from both X. carbon results Slide reduce construction. construction segment including building to the new and moving experienced strength generated chemicals. wall performing serving share of also the and their renovation, and Next, gained roofing we product on infrastructure in broad-based growth well. those Group market cost with in Construction that systems They construction Products growth projects, footprint

Some to energy steel [ produce and including lower produce MAP labor cement fixed a which and driving these, that of of emissions rebar for amount require ] needed to as and improved the substitute The gains, EBIT favorable benefits volume adjusted fibers symbatic driving reduced was serve product XXXX by mix. a less COX leverage and rise in install. cost growth, from led significantly

comparisons grew XX.X% and Group are as period unfavorable year delays. sales pulled to as the X, Slide declined while timing the sales projects experiencing were when prior Performance into On Coatings third the other project the forward quarter completions faced of they challenging some

and Additionally, result declined from and Adjusted sales Europe MAP of prior lower weakness. partially as the of volume fixed This divestiture business by FX cost pockets of EBIT the noncore leverage a European XXXX declines. had benefits. pressured sales. also reduced service offset was

prior Specialty bursting were result been Moving to period of for to Group Products challenging activity increased primarily customers and due pipes In that depleted comparisons restoration inventories prior sales to the year, the in as quarters. have business. the declined rebuilding a freezing Slide X. weather disaster storm from prior year

remained particularly unfavorable which and fixed OEM the sales in those resulted absorption. volume specialty reduction The in residential was by related to cost adjusted markets, declines, Overall, soft. driven EBIT

sales the continued share the of consumer products outside also new Slide to which markets offset products contributed space. helped group On grew gained the rationalization the of in the in XX, with lower-margin declines. DIY help U.S., and to softness The

MAP with XXXX initiatives and expenses in an resulted underabsorption record from volumes associated lower and higher improved is benefits. wages Which and EBIT. by mix offset partially

Now innovation. flow provide I'll the balance cover update on over call will turn who to the and an sheet cash and Matt,

Matthew Schlarb

Mike. you, Thank

than Slide from year, operations our the and of for billion $XXX Moving year $XXX Cash million XX. million flow previous to record. annual $X.XX prior totaled increase from an the more

of years, flow . In prior lower million. XXX percentage The X improved has fell future XXXX working the as expense and to cash increased capital basis opportunities. debt, QX, year. growth flexibility increase. flow significant sales and the organic to in is invest cash to past year period declined which profitability this points improved interest the million Over XX.X%. capital resulted during M&A by by initiatives operating and the This of in portion from resulted that by drove $XXX repay in working used a $XXX has MAP

we fiscal year. to the During returned XXXX, shareholders and share $XXX through increased both dividends million repurchases, during which

we As strong billion. fiscal quarter at remained enter year $X.XX XXXX, the

races resolved, we ago. chain products a In supply paper help market how On leading gaining brand. I'd and September goes a market few many ] like innovation those Gator to business the Ali they manufacturer that on [ we as years XXXX, grow past businesses, have an and to are experienced challenges of to over offense we other but highlight next several acquired using are Industries, sand the acquired Like example these new of slide, share. bringing to of been back they the under and years, disruptions a

for Xx and providing lasts line. ] highlight improves abrasives product line accessories. both customers product are the helps and on One products dust of now on prevents than Reptilian proprietary user. we'd DIY reptilian use tool that like Gator's efficiency encoding products high-performance Raptilian longer The legacy power traditional to the also way Pro standing [ build These alike. shelf and innovative is the new a to today which buildup design while channel standing,

Now to over Rusty turn I'd to like the our to cover call outlook.

Russell Gordon

Thanks, Matt.

a many first XX. quarter of expected first page, compared be a By to of growth are with the XX% single-digit first On expected consolidated trends record approximately the growth top is XXXX. continuing. level, market Slide quarter outlook fourth generate generated Our segment, is year prior the period revenue to in they quarter the sales next on on flat low from nearly CPG to quarter

their from selling, unique restoration, focus offerings. envelope and benefit they turnkey As systems building on

year of first due are jet being flat comparisons Sales to expected larger were period PCG be XXXX. few projects ] in completed as prior the challenging others are In delayed a [ quarter the beyond and to

overall remain to soft. In demand expected SPG, is

in DIY expected facing and the in single-digit gains digits. is quarter market markets be to range. are which to down continued Trends sales sales share result the In being strength However, low expected the in international with comparisons, segment by low are similar easier fourth Group, softness. offset single to Consumer should remain declining

increase mid-single-digit a to in expected adjusted EBIT prior MAP by the Consolidated to percentage quarter driven benefits. record compared range year XXXX is period first

our process consolidating efficiencies. or As recently XX in MAP XXXX, part are of demonstrates of consolidated facilities, we the which generating continued in momentum have

Our fiscal Slide is the XXXX full on #XX. year following guidance slide,

will will sales increase up be mid-single low and single to digits. digits low expect digits growth double adjusted We EBIT

uncertain unknown limited. Which the growth elections markets. is outlook global is and the the other the line, On in top includes on of economic as the volume visibility impact U.S.

and repair we navigate be should on focus maintenance Our beneficial and economy. strategic balance the mixed as

We the in raw areas expect second in be to benefits, to positive inflation response material and we continued expect fiscal the increases half slightly of costs pricing in and labor like year. in moderate

By year sluggish. projects. After challenging segment, offerings service benefit outgrow markets CPG prior its and from fiscal should in more infrastructure spending restoration CPG strong with differentiated should XXXX, on will to comparisons continue product while face its commercial and and remains a growth, year of construction

that continue plants strong on on be in from from -- quarter. years in the well growth, the growth. PCG They to impact absorption which will also their highlighted experience spending last of is infrastructure emerging projects India PCG. as a to Moving temporary projects new in last strategy as Malaysia opening growth generating headwind moderating. of more spending increased under profitable appears on the markets, and call on the And of we to collaborative reshoring benefit After

results. Although be these will of a PCG longer-term plans tailwind

expectation end the remain current key SPG, several markets sluggish. that At is will

products markets As end SPG particularly pruned along SG&A These recover. growth SPG and has structure. will a help easier back with get comparisons associated cost result, to certain actions, their if

a markets softness At Consumer, place. gains products DIY. product in than poised which from end and MAP consumer of is benefiting continue result offset improved market driving new as for recover, ultimately strong initiatives put When as will in expected growth XXXX the share near-term mix as profitability is an more well we to

well the over tools more This to level, growth actions EBIT as power be consolidated back our to improvements driver selling time key the SG&A a digital plant the manufacturing taken our RPM as commercial MAP XXXX leveraging These under-absorption apparent make On structure generate benefits have is impact in the efficiencies includes office efficiencies expected more of consolidation. we automation, overcome functions. like to of map-enabled negative streamlined. we including short-term areas be and will and centralizing more as of excellence

debt and XXXX. from fiscal flow of year expense made we strong the interest because Finally, benefit XXXX, reductions will throughout cash fiscal in year lower

remarks. concludes prepared our This

pleased be your We answer will now questions. to

Operator

Harrison Research will Partners. first from [Operator of Mike Instructions]. And come question our Seaport

Michael Harrison

number broader just worse this of a that what you of you're And year. on of I'm had the know I'm curious growth some indicated comment the can It that came like than there business. in business? this maybe in seeing kind But Coatings particularly from looks that terms trends have delays project impacting anticipated. you reshoring going you And activity? some intrigued you revenue in some Performance you're expecting maybe that the about on I in talk guys that bit little business moderating were visibility in here projects. by

Frank Sullivan

Sure.

being had that talked impact number quarter We our our biggest for Group the projects growth, Coatings call. at of a level in in negatively quarter. ended modest QX, that about which impacted I into of anticipate we project for fiscal the although up 'XX. Coatings Performance the Performance a the last think fourth accelerated more was and continued timing, on balance We Group the

still results so solid And there. there's

thing service divestiture do. the Performance in European to our But a was Coatings of It's other of right which in the thing businesses year-over-year. profitability. U.K.-based that hampered fiscal our improving Group, I is results The was worth it 'XX, think noting number

in that see quickly. than I positive we year. that are more rate so pretty reasons a modest past but we'll at we'll to what annualize think momentum And those And believe the experienced

Michael Harrison

MAP mentioned and XXXX those And on potential from those timing Can maybe to streamline was actions some that is elaborate you the curious, I of during that also QX. SG&A initiatives there implemented you you then and changes? benefits magnitude

Frank Sullivan

the a One of across a we've Sure. will rip on And growth about business associates. number the And basis annualized significant RPM other be They that then in that investments units really talked was number areas. an million. of X of area about categories. $XX benefits in fall XXX in necessary as a the impacted is, our

we And go are and so we 'XX. on not continuing where are they met those that as expectations paring momentum, our those we of back into are good fiscal have providing some

Operator

. next Vertical Partners. McCarthy comes Kevin question of from Research The

Kevin McCarthy

wanted some Can benefits. you that? masking cost program for some I up the indicated on Frank, that is the to you operating that into associated dynamic MAP fiscal there remarks, fixed follow what absorption in comment going was expectation perhaps? that and made think I lower a And masking of whereby, XXXX, quantify prepared your restructuring will rates less you be

Frank Sullivan

details. on gross thing we've let have can and So focused the to production some in the hardest our years see general, for in in Rusty And It's me could have improvement in the initiatives profitability. as -- talked been facilities. the last provide it over -- that, MAP past, consolidating X move. But you

growth consolidate initiatives of XXXX opportunities as NAFTA continuous program We the are manufacturing to effective plants. original we -- in completed versus as dozen a introducing lean in very 'XX, systemized in and or of midst the another improvement 'XX our way so that MAP the and well

footprint, we conversion increasing are So and our reducing we cost plant productivity. are

All something. you of that when sell shows up

real And in so the was Construction Group. solid, almost fourth organic our the X% only quarter Products from growth

others either The down. all were modestly

And so picture. big the that's

In terms Rusty me that. address let have of specifics,

Russell Gordon

million. the In over a conversion Yes. from there Kevin, impact over is million of little $XX a fourth costs. unfavorable fiscal unfavorable was it little absorption 'XX, in quarter, $XX

of expect that growth more environment. We volume low in this

in see Coatings, and and As they challenges. consumer are in experiencing volume you could specialty now Performance

these plant example, are for Malaysia. India we a And new building mentioned, go as through we and consolidation in lot Frank as of projects, plants,

some certain increased capital to capacity with and at closing other expansions plants sites. plants relocating We and certain production spending are

transition inefficiencies will work their RPM. as some we way on, over for eventually will overall have goes So that And that efficiencies start-up time. generate

Frank Sullivan

gets would Kevin, So 'XX. our really a at heart I add of wide question for pretty that what's outlook the in range your fiscal

and our up, don't Group easier year, line. if second general. We half pick Consumer. of expect our growth that see that Products to are be no the will on environment very deteriorate accrete nice operating and will bottom volumes I in Any in low, And in circumstances and growth in economic the that currently comps a would leverage Specialty -- annualizing certainly the we'll volume when

come when a up. why that's it have but kind to range our our so wide can forecast, of very in with EBIT we our initiatives out results, MAP And will nicely line continue of solid terms volume growth 'XX bottom shows deliver hit

Kevin McCarthy

just would Maybe on the up on asset contribution very footprint new based businesses -- to If has? how margins growth that's up, then that follow characterize the pick and volume in notion, does RPM cost you And helpful. your that Frank.

Frank Sullivan

that at about. specific product dollar reference Rusty then million will in the focus on underabsorption The have and think more favorable the to our going which into that And $XX deliver of going I some we there's our profit that margin talked you've of gross b, that. generated benefit -- point is, we're throughout to people line Which sales. overhead year seen a, profitability. of per a getting details, profitability is hits. improvement cost points gross X Without these our I'm or margins. biggest And . to the this unabsorbed sorry, should comparisons

Operator

comes Mitch question Varium of Research. Frank from next The

Frank Mitsch

perhaps you forecasting your Given XXXX. solid indicated that back fiscal growth skills, in half expect of Frank, you the volume

looking So Is any your baking to improvement. I'm I guess sort the at -- calendar sorry, of be order half, shouldn't back in books, fair XXXX, as that fiscal you're we DIY say?

Frank Sullivan

We've group. been now both actually takeaway fiscal the at and the XX our maybe to level really I we're months, executing say. year negative space. in paid consumer more through months think quarter, fourth across a DIY of the consumer XX fair for think that's in I high what's

from housing still fallout that, But I it's was, COVID driven of the huge. bump, by think, we sit as XX turnover. here today, which ago, was months continued really Some

terms turnover critical turnover are is element one of We at housing that and in XX-year a low consumer takeaway. housing drives

new said for it's how about we're new the in having talked some share in of X% and our all result that, units gains, versus and Europe. terms identifiable and peers, the introductions market lot it's looking U.K. quarter, in pretty performing. negative Matt you're things that introductions, some But some year some in the strength a of product about, And of at the -- strong product

our consumer good think I continue. so that And a And is environment. would expect to I in pretty this at level group performing

We anyone crystal terms economy a better don't is have where ball the in than else going. of

Frank Mitsch

Got you. obviously, had your has sheet been Understood. indicated, And I think you improving. balance

You've been generating a lot cash. of

So to going do about in prior indicated that wondering hindrance you'd M&A. think But what terms if I to going been that XXXX? specifically to begs the what's be there. not have you PPG about bit cash. the think valuations potential of a in might with a question, And of on ask thoughts on was opportunities able to fiscal M&A offer and I'm

Frank Sullivan

Sure.

talked So about, have capabilities. structurally generation as we improved cash we've our

at improved we more some which of cash to work capital to there's new in because in levels still working flow, do expect maintain we're So marginally improvement.

Our balance XX the been sheet it's is shape in in best years.

relative modest so activity. I for acquisition history. of versus have been a particularly to RPM's pretty that And up expect to acquisition pick plenty what's opportunities period, we would

be us small focus. and see and to you'll on that's to continues where the businesses, that medium-sized acquisitions are highly focus strategic our Our

Operator

BMO. John McNulty of The comes from question next

John McNulty

that we the may a about to full So rationalization tied But facilities think just XX understand efficiency means plant there and rationalizing. cost benefit should some tied be at to on thinking you is take you're I flat benefit plants us that can about? of volumes. would what it's the to the be the to get that other help cost savings

Frank Sullivan

Rusty, don't details. if those more don't have of a a any enough at that. have don't I have you but swag number insights? has I Rusty you behind. that good a give stand that, I good sense I know to could do

Russell Gordon

fiscal might savings consolidations of and million projecting a seen highest and few $XXX MAP are in 'XX meaningful be, in have these the MAP our as you a wave of Yes, X it we program That's part savings times planned will that. 'XX. fiscal before, annualized of for big very year John, are

John McNulty

Okay. Fair enough.

I So to SG&A got 'XX, I when the think guess, about that of Frank, spoke your cuts benefit you've $XX about million. you guide for

sounds plant You've like got benefits some the rationalization. significant on pretty what

So out it mid-XX% low to to in of the XXXX -- way you right volume way margin the the Is get volume of and about without look that growth right whatever may closer to think range you can growth. target? that much like way you of and it? of to kind additional seems as XX% to the something kicker in think is about it? that longer-term to And push that kind Is closer the kind the then

Frank Sullivan

Sure.

achieve run our think goals on for are program track on to is 'XX. results, of we I in rate. delivered And an terms fiscal our annualized

of all 'XX. So we will plant be in benefits talked initiatives. other at not experience and consolidation those will we about MAP But Rusty that fiscal 'XX, from end of the fully benefiting

but I shape EBIT we in record the low with And no And expectations. 'XX growth, range MAP we're success to wide given our growth we're EBIT solid good depends here, flat growth. deliver think a environment. there. a again, able referencing results, So And on in should broken volume. in just be It it's

EBIT And in some pickup growth growth. we'll see think able teens. we deliver to mid-single-digit I good in to volume, get downside, the when be the On going you're

have North don't of add to and I so our crystal more particularly there kind because American the of -- market. And dynamics, ball core a much in

easier particularly in the comps, QX. time and there's be environment results our we going to products. second even deterioration consumer no no-growth assuming by think in the going this low going half just you're some I to expectation further because it's positive we're specialty to be to And that see we're in rounding get

Operator

question David Bank. Huang comes of next Deutsche from The

YIfei Huang

seeing guess, increases year-over-year positive guess segment price today? pricing. pricing in the your terms construction I project-based I regarding first, How think you highest then guess, business we about I should which And you consumer FY guidance, of are and the that 'XX or noted pricing?

Frank Sullivan

be costs, raw about stable. in in being there have Obviously, in for fiscal way even down specific general, up relatively and the inflation in similar think the other they see price higher. and for are quarter benefits, think slightly materials in exceptions I to where so few were are pricing different to X% our price marginally range, But some ago. will are 'XX higher. to in areas was we So time companies categories. the They moderated every wages, case not industry. continue from years maybe the The to insurance and where a both

it's inflation be So -- way to unless another. one going there is in or a meaningful change

I think a results. very on modest impact

YIfei Huang

Maybe think try PPG one absent acquisitions, Got scope it. your level versus more ago? has should FY capital guess or I time. few of Okay. how changed 'XX? for interest I'll we And a allocation months about any I guess,

Frank Sullivan

Sure.

allocation payout in $XX I With we been. ago, at depending meet million expect its our our year they remain above XXst circumstances expect what Board ratio for of years consistently would our share more, has repurchases. So consecutive October. a capital I or raise it would had -- ratio XX%. or when our on will dividend XX to payout

Now we're the mid-XXs. in

our So exist rate with a consistent to more cash at dividend our increase earnings today. growth ability

years primarily medium-sized on an from a the expect to M&A And of us focused product M&A I in of and growth small- couple the versus in years, perspective, period M&A more lines. businesses do or would modest coming last

YIfei Huang

update PPG acquisition? And I on guess the no

Frank Sullivan

Beyond those comments, no update.

Operator

question from of Mizuho. next The comes Roberts John

John Ezekiel Roberts

project XXXX new both? on mentioned had Or expected activity or PCG delays in completions? is full year start project are guidance, that reshoring, you the from under continued that On seeing growth Rusty declining Slide XX, moderate

Frank Sullivan

it a have and of And and environment then we slowing in both pretty Construction CPG, of PCG, some Products Group anticipation as PCG already low, won. it's our Some round that just is down we tops. of in projects challenging no-growth

opposite these our the specialty. and consumer of So

We in expect Coatings fiscal positive Performance pretty growth products, they'll and but quarter rounding each comps some 'XX. healthy both of be in Infrastructure

John Ezekiel Roberts

you us administration on under risk tin were you're And prior the Okay. tariffs that? . around how can thinking plate about remind and any there if

Unknown Executive

inflation, primarily never packaging, and -- impacts tinplate with segment tariffs back prices most down. on impact came were our kept consumer or they went which the that There up our those that's and

top, contributing So near been the have those tariffs they've been a sticky and factor.

Operator

The Panjabi Baird. next Ghansham of comes question from

Ghansham Panjabi

back it segment, embedding out to give for yourself bit more little as do going Consumer guess I you're still share seems for to exactly volume I a growth what gains, weak. year called us a 'XX. you in color fiscal that the can know some bit just segment but you

Frank Sullivan

is. It

So and and are QX. We I of the like introductions categories terrific. would and and to ] of share takeaway QX new some that see The to X in product look X [ expanding some in and exciting introductions have well. expect presence consumer patent product consumer still X gains the new and we going not market GAAP X break some

in the But or no half, mid-single-digit as first we're I in experienced the quarter, same back you'll low comps. So get part consumer that the in environment growth spring. see living we think into easier takeaway to modestly growth we in just negative the upon based

Ghansham Panjabi

comparisons get And cetera. as sort dynamics just CPG for that et based some of to maybe trying moderation the as of just on called maybe difficult CPG you a a for I'm et particular sort and those see are that consumer out multi-quarter cycles and PCG, can occur? cetera, in segments in PCG, obviously, completions, change versus you project to, ascribe to Do that more sense interest you directly? rates,

Frank Sullivan

Sure.

] QX will slowed of Euclid with things in coatings the still those. coming. is still a number spread impacted a hundreds billions the a of floor through a example. positioned admixtures some poured such dollars originally out fibers, But of and longer a and dollars of year stacks and are I good part and timing little the projects. of is The there years that and Concrete down We're envisioned. are lot chip fireproofing a expect of will reasonable being now than [ QX. be share bill those and we other many spending issue get of many, of spent the them are that period have infrastructure bit Euclid the But over the unfold, early time would couple been continue think as to these most into of well

just slower are Ohio, than but if a here project just slightly examples. some pace So those in look you Intel originally at it's But moving at forward. the envisioned.

Otherwise, that continue. I driving think the dynamics businesses those are

Products We initiatives in the introduced in We've have people. sales particular. added Construction Group new

selling had Products to paying outperforms construction have right and construction components shift as systems. a be from to And commercial new seems multiyear off a environment what's Construction pretty now. selling punky that our We Group

Operator

Jeffrey comes Zekauskas JPMorgan. of from Next question

Jeffrey Zekauskas

million or $XX in year, year took less? This next you charges. take restructuring more Will you

Michael Laroche

probably good of run a the that's plant pretty about think consolidations that forward. previously spoke rate I going we some considering

Jeffrey Zekauskas

the first in are on the months, X consolidation. new And you million, plant $XXX,XXX that? $X.X spent consolidations Through plant

So cash is there your Or was -- year? step-up in there this do for next you real spending? expect -- one quarter a

Michael Laroche

had of QX. really spending plant announcements We larger a Yes. the which year, in fourth the quarter happened this in couple drove increased

Frank Sullivan

in more year coordinate We little of who Dennsteadt, than ago. MAP leader operations Performance there. support help Dave more -- a is of all activities To a Europe the to Group broadly, Coatings Europe, our our relocated RPM of in

pretty really slowed our focused the mostly in plant plant which floor America As then initiatives hands-on the and to you'll down recall, and North our process. ability we do COVID what's were hit, initiation on of

our operations so and and the you Dave's associates our will. of Europe, we're with if catching And support leadership up, in

continue And MAP plant XXXX are European so and in happening happen operations. these portion to a consolidations will our of meaningful

Operator

Josh Next UBS. Spector question of comes from

Joshua Spector

-- ask I your so on basically, I mean minimal sales that's I to low assume about end So if I pretty the guidance, growth. think wanted of

or way EBIT EBIT is, pricing mean growth. mid-single-digit be up. maybe or is think know, you ends that about think savings You're what I Or $XX call it, don't offsets being $XX gets I million line. in so into can the so may up put math? million, the It up, to that anything ex is MAP raws on to the volumes? Is $XX there you that, slightly million that you would achieve else saying

Frank Sullivan

less but change pretty positive, be I not think price dynamics it. out really that's will and much modestly A there. meaningful

volume of MAP by under that you So show EBIT terms low position the Rusty building those, or growth still we absorption the both volume the when of momentum about think initiatives 'XX, offset dollars the positive And benefits it in throughout think is in will no net environment. the that continuing a to margin line, of to referenced. all and on lack fiscal be in we're I way a

QX QX where today in halfway the feels quarter. through terms lot a sit . so we of like And

your thoughts year is are I So multiple as think year. throughout correct. on the we wide hear the range what that times based with volume fiscal our happens upon me And progress say

Joshua Spector

of last you're I sized and not Understood. getting benefit I guess volumes. think without $XX I about you on the that. appreciate that year, million if build of the underabsorption earlier, that

all savings Are You guess realize X% map with I volume really into get talking much to X%? really volumes. that or have couple of to plans? up MAP a you so need we years to residual how the you margin talking the question realize mean improvement growth until we that do goes is structure? that are of I XX% catch

Frank Sullivan

X% but [ a Sing over couple on would out X% ] our volume to really play growth years, line will unit of nicely. bottom It Sure.

Operator

next Byrne comes of Stephen Securities. The Bank of question America from

Steve Byrne

comment were year-over-year consolidations? material you versus were of flat. in X% the X% your of much deflation down Your was Can how cost perhaps on facility raw Volumes that quarter. goods cost

it be categories. seeing on other So comments that? would Any these

Frank Sullivan

Yes, Steve.

material all to COGS of that So was lower almost related raw deflation.

QX. had but plans the XXXX. -- as process we started plans really of we'll We consolidating about benefits that So in we progress those through mid-single-digit those see deflation QX, in

Russell Gordon

mat $XX terms manufacturing We were of math goods savings million those cost the benefits and north in also And procurement quarter. had streams. of of in work impacting

Steve Byrne

a things outlook as for Or seem right XXs a would consider to you and maybe your sales consolidating then high percent in offices forces SG&A, just drilling manufacturing longer-term in sales does of in And you? like bit little more and beyond the Okay. facilities? that

Frank Sullivan

Sure.

important So asset over RPM the sales more to you does X,XXX G&A area of there I reps. not of individual more we getting tell have balance I our down most SG&A think than a in show will opportunities it's and on that about structurally, for over sheet, time. I goal had the up us, -- our is particularly sales time XX%.

We marketing. in have more people

we sales And forces. not to entrepreneurial sales, of so service. nature do tech given the envision are terms customers in and consolidating marketing, I the of approach who

years ago, more grandfather the the better. my to back Going the feet on XX-some street,

been been where reps adjust off, business, that flooring our of It's salespeople. initiatives that's in in of Some sales driving business meaningfully the like a the paying the not has new we'll has up. their line. growth of And SG&A the our business addition Stonhard addition improved top

So growth. they're Group, solid they're organic Coatings Performance generating our of generating

that's we how think so And going SG&A forward. about

Operator

comes of Andrews question Stanley. from Morgan Vincent The next

Vincent Andrews

of give what first the Could think Pro Maybe bifurcation your of is now couple consumer you DIY update pro business on and performance in DIY ask years. the there. versus an us over you start I versus past with just mix we'll just Could on consumer?

Frank Sullivan

probably XX% we're and would I Pro. about Sure. XX% guess DIY about

it segments Our DAP, products primers, paint, would repair like X and new sealants, be project products Rust-Oleum patch they're adding small cost then and consumer in broad primary things and that. would various

more and consumer Primer paint. to project Zinsser think and and And Pro. the I tend Rust-Oleum XX-XX DAP We be more we're products, small between consumer

Vincent Andrews

existing a mentioned for to that as you're follow-up, few times waiting you And come home sales a back.

so is curious, home portfolio the before Or to done that's are you just done the might be versus home of that kind the the post sale, And work levered indifferent? on goes work market? your more prep I'm

Frank Sullivan

a get whammy double because we getting We're both. in sale,

house, is bought pay again, into of they repair Zoo And people not ] so which the space particularly new a and about patch of shows when [ somebody hands that up a somebody in paint time the repair, their that paint think and very contractor up us to hiring versus when paint and And redecorate and the sale, rooms to house, home you plays take benefits we're improvements. project whole And fix paint us. today. into our small products, nature because our then and much a

on that housing the seeing XX-year in a XX on and both buy are actions low sale the the at -- we the benefit literally past to other rates we So interest state. sell on factors. And to have and because of actions and some homebuyers that new we're we house not the in and prepare extent turnover because the the taken stuck people for

Specialty a Group. Products significant our underperformance driver the It's also in of

Group largest and Specialty efficient Our which Business, cabinets cabinets Products almost wood windows. the woodwork revenues doors is of serves segment, and all our Industrial of half and kinds Coatings and

improvements. part we States. challenge as still as well, the of So on to or in housing It United construction meaningful as it as relates the both into turnover furniture goes what's major into still been a are new tied manufactured housing. side side that's on well home the a And

Vincent Andrews

homes So move fair? it's for guess be, the the in I seen Is so increase enough material for sale far, we've answer just the really needle not would to you that yet.

Frank Sullivan

is And week we're Again, low. Unfortunately, Street that prices this reported at high. new Journal XX-year a correct. the just Wall a That's hitting -- housing

And is outstanding. the peers. experienced performing interest in our consumer so inflation it factors mortgages. the there. light think volume And that light given homes increase those significant That's quarter our dynamics its we're are underlying impact of about are out are the All rates, positively in comment performance that are with And down of of the on in why in comparison value shows North identifiable unit really I in of well that group to the on we've dynamics great. in America, that those the I X%

And pickups, the new ] see some placement that further when proof volume related abrasives. [ turns, nice to particularly for shelf we'll warm

RPM It's So product moving we're categories. cleaner years ago. in in existed that the sand paper X category X business and a for not And some we're or growing.

will And think initiatives so growth. there's I that of new number help a

Operator

next Fargo. The Wells Sison Mike comes from of question

Michael Sison

MAP the sort to But Nice have to don't bit accelerate some demand end if going still that's things your year. you year a worse savings can the get through. Hopefully, of can does relative good Frank, the guidance? gets Guardians follow certainly forward. hope case. I weaker, a of little what the of

Frank Sullivan

Sure.

think at I we're a executing the people I are our really that any initiatives there's that high level. So -- don't And know those. MAP accelerating

a globe. think methodical lean across very continuous manufacturing of the to disciplines approach it's the broadly more improvement, I addressing both

developing Another start organically brands either through to XX initiative with it approach us, and that is world. We had for small businesses acquired or platform African and in our or South uniqueness fundamentally a or in success efforts Performance India. in we very our market the We South acquisitions. figure And because their of out, team probably is this stop And Asia the paying that's our Southeast to China do business and acquisitions years as took and off us operation. of the brand across high-performing we Coatings Brand, Africa. consumer given based our we have construction that in Carboline the it's when leadership products

business. So Coatings Performance

but for market the and East, -- focus and sales for are of sales production have and the all now almost Southeast us. responsible They administration independent They India across And big paying Africa, consolidated that's Middle brands. now Asia. dividends have RPM's

the impressive, so there's for different percentages to It's but more not and approach pretty And RPM. that's a are come a there. small base, growth a lot

further. us think generate growth, things So a see don't positive that, deteriorating in those momentum to things, the Michael, low type I We environment. will no are growth of allow

challenging, a housing, see rolling that's that supply touched it, supplier sector. But that base been it accretive in been you our worse. there's last can't a in tech. have speak to getting had XX challenging been manufacturing we think in or XX it manufacturing notwithstanding to I you're I can see recession, all year. if the services and months Anything the or don't headlines the chain

to it initiatives, does get area additional necessary, MAP would on expense Lastly, worse, SG&A room, the there if reductions. unrelated if for our be

Michael Sison

it. in but that any innovation. moving recall seen in progress lot momentum, that have Got I the you a of had into applications? And areas, follow-up in a Nudura terms product was lot quick residential one then a of commercial

Frank Sullivan

more commercial. think, We into have and I importantly, also,

specified, couple now significant a had real a to for tornado it about Kentucky, Nudura ago. get have specified it states of states, area. We're in schools schools. terrible so get the are construction all And they kind and for a have the it educate we We the into market communicate that understood, particularly years get Nudura in effort new throughout specification tornadoes of moving instance, other following and into

happen that engineers see doesn't you the momentum and mean but to in school and get to build architects then to we're and starting you've need got Specification we'll to builders work. educate market. and

nice a that's So area.

make I'll remediate made we in few insurance comment working about months in with is I circumstance and an had Ohio. my down home Cleveland, a And wife home. sewer after our tear new a to decision for the that, last Nudura unfortunate The to flooding build company our and it

the with there good construction am of firsthand, are through and directly them in going direct through they're foot the learning are so to to home. midst that And group and things Paying square along for the and I'm the Nudura it challenges knows building products all builder, I new Nudura new and a learn architect builder, experience. the we to X,XXX that about what talking the

Operator

our [Operator Yefremov will from Instructions]. Aleksey of next KeyBanc. come And question

Aleksey Yefremov

sales what your and beyond. is for your infrastructure for business Frank, expectation 'XX in fiscal

Frank Sullivan

Sure.

think I they're to going continue.

got You've areas. bill the a lot $X of impact trillion will infrastructure that

a we're You've terms act work. and and well Performance in Coatings positioned for got chips manufacturing in that U.S., Construction the in of Group our some chip of products

see than that, we're modest we it. think, year I from through so see to nonetheless, growth positioned because some the we'll positive a very there, and growth benefit to well again, the sales you'll comps. see rounding . of And past XXXX. benefits But would challenging more we're But expect just

Aleksey Yefremov

like, made on anything comments like see or give restoring down it on already you other that some some more Is of color fiscal you be that demand slowdowns potentially that? reasons year. If can slowing I lack or the comps in don't or this mostly there of the you resources slowdowns know, Frank, you see? could

Frank Sullivan

Sure. is of of combination but a challenging project comparisons, completions. It's a some in the also it more slowdown the

expectation it are whether the and not time. there of committed. about is a dollars new continuing. of and as longer are The is projects spread period as as construction out But plants think chip personnel training staff they'll now I stopping, new or it's that going facilities much Interestingly, they're is spent be other things think how But about it's be to it the over and I labor. to up labor

impact will 'XX and the start fiscal . 'XX fiscal a pretty will fiscal So in pushed beyond was versus start kick 'XX in maybe into 'XX. -- I'm be what sorry, good be

Operator

over the conference closing This concludes would turn remarks. for our like question-and-answer back to any session. to I Frank Sullivan

Frank Sullivan

in let's to you. XX,XXX you again than executing our you you making 'XX your like Thank difference huge great our the Thank Well, who our say, thanking will all And shareholder And . Thanks for globe talking MAP in and participation we initiatives have conclude meeting about Thank interest in rest participate for to high October. at I'd around a by forward look at as recognizing are you, on shareholders. to conference the Andrea. our associates for our really call. RPM level and having for in the research more a time. to of development for of in fiscal that same well your of, your very XXXX. happen quickly and and summer investment happening RPM

Operator

you disconnect. Thank today's presentation, now for The attending now conference and concluded. has you may

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