RPM International (RPM) 2 Oct 242025 Q1 Earnings call transcript

Company Profile

Participants

Matthew Schlarb	executive
Frank Sullivan	executive
Michael Laroche	executive
Russell Gordon	executive
John McNulty	analyst
Frank Mitsch	analyst
Kevin McCarthy	analyst
YIfei Huang	analyst
Vincent Andrews	analyst
Matthew Krueger	analyst
John Ezekiel Roberts	analyst
Michael Harrison	analyst
Michael Sison	analyst
Steve Byrne	analyst
Lucas Beaumont	analyst
Silke Kueck	analyst
Aleksey Yefremov	analyst
Arun Viswanathan	analyst

Call transcript

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Operator

Good day, and welcome to the RPM International Fiscal First Quarter 2025 Earnings Conference Call. [Operator Instructions] Please note, today's event is being recorded. I would now like to turn the conference over to Matt Schlarb, Vice President, Investor Relations and Sustainability. Please go ahead.

Matthew Schlarb

Thank you, Rocco, and welcome to RPM International's conference call for the fiscal 2025 first quarter. recorded. being is call Today's

This Joining the today's Rusty and Chair CEO; live Accounting Sullivan, Laroche, and being can be website are Vice President at Frank accessed Officer. Chief Gordon, and Officer; replayed President, RPM's is and also Vice webcast on and or Controller call call RPM Chief Michael Financial www.rpminc.com.

materially may and different. on current results involve risks uncertainties, Comments could based to made expectations statements be on include forward-looking this actual which call cause that

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

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

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

I Now turn like to call would Frank. over to the

Frank Sullivan

initial are to impacted Helene. The of lives. Hurricane contributing by devastation sense back efforts people in from Thank Innovation us today. the are sincere sympathy call and bring for Center to and and North everyone joining to you, hosting And this of by people's in thank Matt, We're our I heartbreaking, who of normalcy Carolina. sending our to you some to businesses Greensboro, Excellence want today North elsewhere our begin Carolina is help response to all

our our restoration the damage. impacted in a including hurricane. region, contributing other issues and and help this are They're for restore save also includes and and businesses homes tarps hoping helping fast providing We're with affected for all roofing business, Legend with businesses disaster people RPM RPM At water to equipment the associates food products and to Brands, associates teams customers people recovery This is by supplying to need, which and generators. water Tremco and by are effort. supplying and

first go balance cover capture some and Laroche, the results, financials review, call the a high-level opportunities a detail. give sheet provide in the answer into we'll insights will then to Mike who ability update that, be over Schlarb After more Gordon Rusty Turning I'll begin questions. our happy quarter over to then will to will our with turn outlook. your to and Matt growth

adjusted our to finding Across to to associates quarter us This RPM, in XXth markets, with controlling initiatives associates actions our achieve efficiencies drive results. excellent economic are end that self-help job growth includes and investing and our of economic conditions adapting our uncertain and our our targeted are enabled EBIT. includes opportunities execute continue record This they in growth we capturing MAP exist. an XXXX a begin These on where quarter first Slide mixed Overall, operations, environment. X to to initiatives. in consecutive doing in growing We'll pivoting the continuing to things new growth. challenging can

$XX capital us cash where cash structural leveraged strong additional flow to we of flow in another The built was 'XX quarter MAP XXXX which in to in to momentum million continue sustained the first repay our improvements we debt. fiscal an working generation, in quarter enabled This making resulted efficiency.

to EBIT growth repaid prior combined led with million XX months, adjusted debt, interest Over the XX.X% in the we to lower a increasing $X.XX. adjusted EPS $XXX record resulting and expense have

services broad growth as they by portfolio entrepreneurial repair buildings, focusing markets. demonstrated culture by and growing Construction sales our and Aided capture for opportunities to Coatings Moving our and to Slide growth businesses the exist. maintenance products construction in teams where their X, high-performance Performance our as and led Products well new of have ability on differentiated Group

pivoted years, from to markets. several infrastructure we manufacturing EV past strong the data distribution Over to and centers and center have the battery now plants

the these that initiatives which fully EBIT environment, have both of generated growing the MAP volume our impact they impact put segments how of margins, continuing. place we in no-growth and record improvements operational tremendous with current Despite XXXX these leverage can to demonstrates and that are

Products end and to challenged. markets, our the Specialty In which exposure residential demand have Consumer remains most Group,

able XXXX lower initiatives Importantly, from expand focused unabsorption executing on margins they remain thus EBIT adjusted to and MAP headwinds our were volumes. despite

streamlining the the and SG&A SG&A our adjusted Our SG&A was of expansion prior dollars actions dollars quarter at first EBIT actual XXXX gross profit by implemented this below fiscal of the that our in quarter. spend aided end year margin the were we in matched expansion such

now Overall, EBIT. our XXth we realize I'll initiatives. the over full in our Mike associates' navigate of financials investments and with detail. to I'm mixed the our the quarter ability record are adjusted MAP Through environment working growth to to to pleased our of achieved economic benefits generate the turn consecutive business and collaboration, cover Laroche more and increased call in volume XXXX

Michael Laroche

Frank. Thanks,

XX.X% aided past by of consolidations. which was driven end declined, plant record, interest the XXXX. and by EBIT the first our including increased by a Sales by cycle the declined adjusted X.X%, EPS quarter. X. a fiscal on consolidated on FX streamlining results driven driven progress and and lower organic debt benefits, over decline Adjusted commodity X.X% implemented Pricing slightly MAP to actions quarter EBIT to slight we the headwinds expense due $X.XX, was growth the to record, to Turning benefits Adjusted positive SG&A year. revenue. at repayments in grew a Slide XXXX during

there. the we making sales in the growth. Moving FX and the where on overall and North generally with decline pronounced America In a FX generated but America trends to XXXX in emerging sales progress particularly in resulted announced decline, mirror markets, headwinds Slide headwinds and continue business Latin In Sales results geographic profitability region MAP X. were declined company. divestitures in Europe, previously drove

grew Middle and from benefited and East on Africa, as building they high-performance infrastructure projects. spending Pacific Asia

The on the renovations. year. being growth achieved turnkey is projects construction double-digit addition in Next, new moving in last higher-margin improved record adjusted was segment's This from growth CPG starting driven systems used MAP segment due both benefits are X. and and QX Products focus with wall the to to EBIT selling generated on XXXX volumes, results which by CPG and to Construction growth products. leverage and systems, higher Slide roofing fixed-cost Group a

a by prior by more year. the than addition offset in was growth, X, in driven On Group Coatings also which to strong growth Slide This the contributed previously was year. organic Performance organic positive and had markets XXXX improved business. Emerging growth service flooring by Adjusted to the infrastructure was quarter and in leverage FX a divestiture headwinds European cost fixed business from was and announced volumes. driven the record EBIT higher benefits MAP prior first

in Products Slide Group remain as demand specialty declined soft. sales OEM to housing X. with Moving Specialty exposure markets

high muted storm-related the during customers impact Additionally, disaster flooding the in of season quarter. restoration inventories, business hurricane which the the with entered

than from Food the as during lower Group business during the volumes. quarter, acquisition. the wins underabsorption EBIT benefits grew XXXX small The first quarter and more offset Adjusted aided MAP new a grew by

face contributed grew remained during by to and On International initiatives driven changing that users outpace Slide rationalization XX, stores conditions retailers sales market. quarter, markets weak market those inventory targeted demand toward at allowed products the declines. Group reduced to us broader The the of retail Consumer continued also as end primarily DIY marketing levels. the lower-margin to directed the

rationalization cost the MAP of lower-margin EBIT unfavorable in and XXXX initiatives resulted declined due and the margin fixed adjusted quarter. Although absorption, to adjusted EBIT lower during sales products expansion

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

Matthew Schlarb

Mike. you, Thank

$XXX capital. XX. Moving structural sales the as quarter driven working MAP improved a percentage Slide working XXX period, points the from million first prior operating capital operations as by to Cash XXXX by basis improvements for in year flow from totaled of

Over metric years, has improved XXX this by basis points. the X past

During shareholders We a the through million share declined $XX generation flow of and million year. quarter, repurchases by the during and cash we quarter repay the past the quarter. returned in which $XX used dividends over portion $XXX million to debt, to this

that This as on Additionally, year. we intercompany well of Products by focused The resins that the new overseen Specialty supply which enhance a by as end in resiliency sales, new is chain. external segments parties. facility X Belgian element in is plant RPM to of making be represents investments supply will in production key Belgium fourth strategy are to to the all facility our will calendar but expected procurement the our facility Group are open a

an important the growing these and Earlier, Spending businesses highlight on in our Slide is high-performance construction Frank up our the are over end example data significantly construction center markets, I'd about talked year, pivoting playing XX. on buildings. to are how businesses past like X to of role and

requirements waterproof standards, demanding having products and continue these Our structure, the and expensive allowing maintenance electric from protecting the of and ongoing discharges, equipment operating facilities, meet repairs. to including their meeting facilities through safety services fire a

Additionally, center important reducing include just industry -- construction labor These needs products needs construction. faster benefits of not and from the data our throughout and and the entire that suite labor services are faster construction in future. sales growth skilled will with labor and to us expanding culture, to products, the pivot services us availability. allow these have in allowed towards these with our Combined struggling and entrepreneurial high-performance is opportunities capture systems markets but

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

Russell Gordon

Thanks, Matt.

is outlook next the XX. on page, quarter Slide Our second

On on some unknown. continuing. mixed Coast recent may remains expected the a cause a and economic consolidated period, level, defer prior sales ports spending, U.S. with are the to record year to be decisions Uncertainties surrounding at impact the compared of flat quarter second to strikes approximately East customers elections backdrop

positive of year to sales projects. remains expected of to OEM revenue and Growth sales while in flat, new demand PCG, record overall as systems which other effective approximately By roofing more residential-focused expected be single addition signs by segment, is low to driven period SPG, serving to by results management decline X%. OEM be in single-digit are restoration In when construction to digits is expected includes demand low high-performance is the the revenue growth businesses generate and soft prior CPG wall In stabilization. systems. impact expected show grew

Consumer Group, In be sales single to down expected digits. low are

some a be be partially is softness range MAP driven EBIT benefit adjusted Consolidated cost but offset utilization gains DIY XXXX to at and in of headwind markets. growth market improved the to to year Rationalization second prior increase is international and compared fixed Continued expected businesses. share benefits margins. quarter will record percentage by in sales to mid-single-digit a our period, of by lower-margin products a to expected

Our guidance the year fiscal following XXXX on is slide. full

double-digit low and environment increasing view is our low with digits sales communicated, previously Our range. we single in guidance overall what adjusted economic the the remains mid-single to on to EBIT up and similar, unchanged digits

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

in should Thanks progress center-led construction a remains to sluggish. outpace and material segment, teams manner. infrastructure, timely we better benefit we costs building product made our in CPG should the with have continue are our increases its projects and pricing By and in high-performance reflect service have offerings spending to on positioned its raw procurement office and to restoration markets from differentiated while CS-XXX,

to emerging from market At infrastructure and on benefit continue high-performance increased PCG, they spending buildings, projects, growth.

and to areas Consumer will centers SPG, plants in rates closely but when reshoring others translate to tied interest on turnover. are battery data determine see residential an encouraged in and increase housing this moderate most expect and is are too to spending housing, it like into to projects like continue which declining, in manufacturing. pharmaceutical some expand At we to early We

focused driven XXXX operating MAP and what growth to the and In a to remain improvements the benefits, rebound to be materializes. volume growth expected when prepared a to level, on consolidated is we timing adjusted by with we respond it extent magnitude determined interim, are market quickly On so how EBIT by returns.

capital to our of This We another concludes cash also prepared lead will working to improve which year continue strong will efficiency, we remarks. our that anticipate flow.

questions. your answer to pleased now are We

Operator

McNulty Today's Instructions] with from Capital BMO comes question first Markets. [Operator John

John McNulty

and think a Congrats volumes. despite on are the XX.X% difficult strong it a is environment. I And for quarter, was up record putting quarter which that, a pretty in the nearly first I challenging Consumer solid quarter, some to so mean, some really this numbers. nice margins that's guess I

in environment? is can really guess, to about business working a about think help its how I business margin we what MAP now this for the operating type can kind in leverage of DIY normalized think So of and through, profile that you would us like the more kind look the way

Frank Sullivan

Sure. to question it all comment I'll of your businesses. about applies really to our but consumer

XXXX We've I've have We the MAP follow-on gained have our we in operating Growth almost conversion that dollars That Consumer initiatives. true our line. of uncovered. and additional our and that MAP without the particularly to executed of efficiencies commented capital, in on growth costs, improvement to can at in so new And to uncovered our really operating Rust-Oleum. gives poised doesn't well do capacity. And XX us you and million lever benefits the we initiatives unless of units much good sense have it, really bottom a sell are improvement past, we

and segment will. The in as last see I'll and RPM, have even in had focused we can SG&A make the Group, you're commented. every Construction product segment, the positive been You I you Group see unit growth they quarter. leverage Performance as volume both very areas growth referencing, Rusty can with Consumer of leverage, that across a will Products the spends nice And new comment in think on volumes the operating and Coatings our is deliberate come on in back, areas, of which when whom

moving see QX, But approach exists. in dollar segments disciplined year, that are each growth SG&A in to are you'll our targeted in below pockets pretty and our QX. we and continue in our last of spend SG&A was sales to so We a the taking where forces few of

John McNulty

Got it.

question that's just the the No, on then Okay. just And I segment. guess be helpful. second Specialty would

you guess, some around we it around now to U.S. mentioned issues we're you given of long uptick, some do to hurricane the of issues I think business. seeing an release through just were Legends the some should I expect see kind And how that the take work in in problems? there inventory that? the the that of

Frank Sullivan

their to housing. you're residential growth And windows first the goes in segment. For positive new wood manufactured environment in They EBIT our construction, are much with indirectly or out. very X like that and has Specialty finishes work to feels time exposed bottomed challenged probably seeing doors X it their quarters, me into into particularly

it the was year. Products think, see last, go I challenges generation. sales the see faced so EBIT the comforting the modest that them as And quarters margin improved X to I rest they think bottomed you segment And return positive X to really, performance will we throughout to out. the have for good Specialty boy, And or and in of

Operator

Mitsch And our next with Research. question today comes from Fermium Frank

Frank Mitsch

the in sorry. football, Obviously, I'm playoffs. not luck talking baseball, Good

indicated, Rusty conference up think, in last is I there expectation maybe You the slightly call expectation fiscal that that I believe in an X% that positive. the be was said price XXXX. would

So I'm curious good if that's kind of placeholder. a

that indicated wide on going And here to for would XXXX? raw as the of range offset given volume you what reasonable be balance this a materials. think you're fiscal range I you for of have EBIT the expectations you that today year, sit

Frank Sullivan

Sure. the On quarter. X.X% by price, we in benefited about

raw increases certain modest resins. some propellants, facing are We material solvents and in

for the raw dramatic still number X% presumes That And in good which be any material point we feels price. to this so don't balance at seems impacts year cited of about stable. that of higher pretty see the Rusty think costs, I the

would bottom our and It Specialty of it's But new going for a In guess. our lot terms not XX-year remains construction if to a nicely decreases, low. housing also does in interest growth, period time and of of turnover home growth a leverage recovery that volume starting driver you Consumer Group. tell will of line. anybody's a Big which at we segment see you're positive take takeaway to Products be turnover, which are on of in the that to rate path I

up our see positive don't that we instance, the that just is flat. segments growth can second you nicely the performance bottom provide to here line. outlook and industrial in our in this in more guidance little than we X to better things a leverage or That's quarter. see line. If or perk and you'll really But quarter, X% need our X% X% results strong a speculative. for growth, positive bit in X% bottom need We the So even and leverage

Frank Mitsch

Understood and very helpful.

rate as benefits in the particularly of timing. the of customer the topic the terms of your and on cuts getting your on we months? of months, X place, months, base, are What X side expectations from XX XX when their of the what sort customer curious, see to expectations base from their take might months, you Any indications Just benefits Consumer indications the sort on are?

Frank Sullivan

an and normal in levels. help Board mapping us job some did in and inventories temporarily the X.X levels, area years that's -- Not think extraordinarily was more year, at is I Rusty are the tell of also very at fall saw a will actually Fed their inventories cases took to or will we'll the that where challenges so X had we've least interest the our quarters. growth, housing nice past growth. My the But kick X rebound X increases. and then segment the low you Fed particularly again, see X and really. volume in it start And hikes, Specialty 'XX a solid increasing SBU last recollection rate I quarters for to filling what organic Gordon exceedingly about of and intent, until was growth the Consumer. And our in by affecting for X rate rates it negative tracking we unit or which interest of went those negative. impact, in And

before and those quarters is into interest So would of going economy of rate flowing I with it take the that, to reductions business. of the a our start tell probably couple you benefits

improvement in much the would hit, the our And way is it year. of if of spring I this guidance. guess volume meaningful current not there in So to starts

Operator

Kevin Research of Vertical question McCarthy Partners. next our And comes from today

Kevin McCarthy

looking a did I X.Xx about that you're you down it importantly, more math, Products. of in thoughts you've the EBITDA seems rearview, and though deleveraging updated by Specialty on as small the thinking But net your welcome terms balance. capital the Would deal in guess debt about just deployment. my done, in

that or the So you weigh what to alternative seeing you potential accelerate are repurchases how of And private would market? in versus cash? uses

Frank Sullivan

Sure.

committed been are investing model raising investing internal We has growth, RPM, to allocation in dividend. in of capital acquisitions, the hallmark our that the

little regular of consider our are and XXst be million basis Board annual beyond our that, share But a year, didn't. about cash I will of be now $XX to consistent repurchases. maybe we'll of dividends. And on in basis on regardless repurchase shares consecutive likely think ability and would our more larger more we tomorrow, And bit have to meeting We ways a stockholders what more increase and opportunistic. stock it exists in our price committed a regular a

rises. little been sheet they've that that product businesses that's And and a leverage lines a MAP it's because small- feels market to been. M&A XX-year RPM, to to in balance loosen acquisition my career the of because chilled better the and to at past. ability is The can rate to our done. lines hiccups And of of successful them pretty strategy interest will product get or medium-sized in It's bit. so up are ever best we starting initiatives the good. Specific supply continue than we the shape pursue we today our us the for in, in been are chain so acquisitions, Our pursuing small through lot ever kind

Kevin McCarthy

execution? of walk Could then terms Frank. And Just still ahead through asset we What's cost may, your coming are MAP and kind consolidation, behind what's if Very where second, other company quarters? savings. helpful. today on an in in provide program you of the headcount, I update

Frank Sullivan

we're our fourth would fall I of started inning that in fifth the MAP question. programs of XXXX. Great the Sure. say in or

total million initiatives to run original Group, Europe. of the because operating manufacturing which center-led his MAP on Dennsteadt, really rate Coatings improvement I little that for family projected you and this would is for highly us basis or likely quarter, And for we unique the efficiency quite beat approach, got there fiscal that the approach are the really who and $XXX done not Performance in XX% had fall it's that Dave million $XXX million without growth. When MS-XXX XX, we benefits That on the Our year. EBIT that targeted. a bit short to XX% think and we a in runs it's has $X.X meet MAP XXXX operations, challenge that all at We're well. to moved And I May revenues XXXX us, within goal. taking billion are initiative, to target is accelerating imply look program that going margin our and goal that MAP to really Europe will our The continuous basis now of this X.X think our stalled of COVID. But ago, $XXX gross and reach, that of are by of goal consolidated profit the full savings. a benefit we years on is total likelihood. a and MAP

we And the the Have billion margin blow revenues, strong we've it targets. sense the anywhere those gives so execution in to close through we of had. really come $X.X you

Operator

And our question with Deutsche David comes from Bank. Huang today next

YIfei Huang

guess, despite than happened talk in customer I August about think talked trend versus you just about has in you that Consumer, September consumer you expected I there? inventory August? in worse gave And is low guess, how Can late And continued mean, In -- levels. July. destocking what I since was volume guidance I

Frank Sullivan

Sure.

low performance this the big-box as mid-single-digit combination prior in And terms continuing consumer particularly bottoming I Consumer lower in We fall in that and inventory was meet where if versus consumer adjustments as consumer be takeaway to will response to volume, It inventory negative there takeaway. was earlier think a to levels, retailers a a our some positive there a see indicated of are is of takeaway is, expected. So inventory most across and also there our see out in some of because years. some at an of when I point, question, you'll and point demand. at in levels customers that pickup at

be. to where disappointing. It's expected we So we are

of you XX us. kind directly than been and years better consumer to And of I We we're this RPM period it takeaway. what negative elsewhere. results segment. month most is in negative in seen Consumer unique our not have peers, XXth of equal to Consumer It's never performance at our compare major are or think the segments of some I've seeing flat of collectively our comparable to to our when

So we're it I excited we're Matt well Also, on managing well some new in and improve in and solid seeing about, positive some DAP business product that pretty positioned Rust-Oleum is and we're and seeing about, growth. talked Rusty they introductions got The continue with only both place as think European/U.K. nice we're growth as their mostly really upturn. we've consumer upticks we're to some our the operations.

YIfei Huang

Got it.

data you ability side, positive the you in maybe help opportunity the on Can to capture shares market? slide. about opportunities think the in backlog your the us On and size your highlighted and some center

Frank Sullivan

Apply the Group, model Sure. the with labor the apply in with somewhat center Supply in an and advantage markets. with opportunities Coatings Roofing I Group's roofing particular. Construction and and the particularly can't the challenges Stonhard and Performance size in model with or can Stonhard, the flooring, that of supply again, Products and you, panelization, some our we with where tell data I Tremco market challenged space that's of any labor, see,

were year today better than a ago. are they backlogs Our

last the in commented big Intel be had we seen call, we have is projects good some conference example. these pushed of As a out.

a XX of have specified of or we're where plants lines fab new construction, months. by time XX out new terms moved big in matter their of Some

big in have we more industrial some deferred, backlogs businesses. our seen strong projects And are but so segment pretty

Operator

Stanley. today question next our And from Vincent Andrews of comes Morgan

Vincent Andrews

in the are, of weight going you more average forward? give a to And sort products? going below both those on SKU is volume be Group, you're in margins what are the Could how what maybe that of on little detail products Consumer your negative doing terms rationalization segment just

Frank Sullivan

Sure.

average private segment, our architectural below business have and We margin margin. plant we and EBIT part that's Consumer segment of our and below Europe And the that in of gross label is paint announced that. have and our closure meaningfully RPM meaningfully and our branded a

be while that, subtraction. so take time by that some margin And a year money, addition will essentially perspective, completed and will mid-calendar anticipate we it from And 'XX. by will, be that

project also turnover. rationalized to and some We small have the U.S. in profitability product paint relative lines

our making our So than we're the take a have. that to data we and we look RPM our across more not want. continue manage in well at better to money And both that where business where and leader mix sales Rust-Oleum as industrial mix hard kind we ever drive in incentivize use as we of is would we're to how the businesses, our we, force where

Vincent Andrews

success in I had then new which impacting? what on And -- brands Consumer talk also you mentioned Group you marketing little you bit Okay. that a some about some with are, international they're Can campaigns. mean, those

Frank Sullivan

Sure.

And certainly, a paint idea are is that Europe. time North long, areas U.S. the the in X in our there. for primers really of U.K. pretty now. Not in the priming so there's growth America. driving So One ubiquitous Zinsser. so jobs were the We specialty is long and leader much in

markets paint the be double-digit good and we old specialty of leader And in to organic the of of so growth benefits different are see. pretty it's the seeing jobs, seem for priming and that's primers, of And to our in in Zinsser exciting education a number we markets. rollout

is the that, but rates. it's exciting at pounds know to millions business The business where gone go from paint over growth and online of been of of double-digit initiative other people pounds top X area growing for is of is that has teens single an pretty Rust-Oleum direct program where of quantities Don't on U.K., in Internet years. small the projects. specialty actually buy our a business the millions and last And in can

Operator

Ghansham from Panjabi question next comes our today And Robert Baird. with W.

Matthew Krueger

sitting Matt for is in Ghansham. This

competitive to either Have So the dig or mechanisms? on you in bit promotional index-related pricing I to from various units boost pricing volumes business wanted due seen a pass-through any activity, guess to pressures across any activity I just here.

Frank Sullivan

The comments we here provided call. July are pretty earnings much what in the

broad seen chemicals, came little silicone of industrial products our in pricing huge on DAP are in saw that and spike bit sector and so related a have the prices in in reductions that to We down. some a some more you

resins price a and saw come huge You those down. certain have in

and instances, to some profitability well, some in So price that. And this in July to really about elasticity. we we been but we able accordingly had in then have have maintain have talked strong margin adjusted as Consumer related in really, and product got pricing big our adjusted our prices above weren't a our point, can, we highest-performing the one $XX suggested that buying so it data paint, In line, couple there Universal in at we consumers of accordingly had a the accounts.

actions about It's X.X%. principally And some are taken. impact our anticipate relatively of the certain quarter RPM. of said, in modest across in of those categories price impacting material business, been on And a price as pricing we've price up about was all that across the the So in raw consolidated particularly increases average full Consumer. would in because year, modest we fiscal part X% I

Matthew Krueger

then the helpful. fiscal year? that context price/cost you demand savings very on quarter mentioned impact That's baked cost it. then program specific And a impressive have earlier pretty been first for number do Got of to execution benefit the into the price/cost this what that MAP the in And you here? has XXXX How choppy much backdrop. was

Frank Sullivan

understand or the Matt. I not Maybe, I'm question. Rusty sure

Russell Gordon

Yes.

we would like the pricing 'XX. it for to inflation of second quarter remainder So would as we back would we and the to neutral And little be of Matt, both of expect pretty expect so the talked be then and has in half the year. the for Frank a get second in quarter, with expect positive about, fiscal inflation, we bit

Matthew Krueger

it. Got

priced year wasn't of there like headwind of sounds isn't it or much a or tailwind full guide? tailwind into helpful. headwind or much a the That's So

Russell Gordon

low for have quarter But expect in mentioned, raw we materials, did be deflation that deflation. to in we neutral single-digit like QX. first I Yes, the little Correct. a

Operator

comes question next John our Mizuho. with from today And Roberts

John Ezekiel Roberts

Maybe from I'll plateauing think level? here up to one of the given ask growth in sort to Do here. high another X a there's quarter along here atop, we're quarter, drivers? Or do in are down of infrastructure just going think leg those so you to And we're kind come of bounce reshoring activity? but comps you and and pretty

Frank Sullivan

think infrastructure going it's unspent. people I time slug out anticipated. longer There's think to I dollars great don't the we're big over play a a still are it's Yes, plateauing, than of a that build period but of question.

positive needs more front, I And arduous out the permitting the then a what so permitting. slowly about a big lot a long been addressed and is from for of to process be for of will be places, that is play it few think still next projects. it There's couple still massively years. And except in political but but talk will

sit particularly as terms relates any that of to new energy batteries would permitting it we if so of today. name as onshoring as I think was are And manufacturing. we in reform you reaccelerate it them initiatives, Congress, here there in the and and see some these a Those issues

John Ezekiel Roberts

order qualitatively one know it could So I I said maybe rank is you X what just And question, but most maybe in are that top data centers, the X among important drivers the or put just or... the growth? of top

Frank Sullivan

impressive RPM particular. customer-facing in data numbers have the parts of I I'll in been on of or again, the our culture on to able we that to and don't self-congratulatory, the I No, sound but been -- hang you entrepreneurial tell what's have business.

been so of the at Chemical looking Euclid was in if couple impressive. And terms at FDA-qualified last pleasantly as where to as still their ability you Stonhard, agile is, business, processing positive waterproofing, have and and broad and go to think if of cannabis has growth been America, particularly momentum, can not centers the look me surprised our it's data in in good. And that's growth industry shift a But the Products commercial to from to been you manufacturing really in North overall, principal centers distribution to construction facilities, the you over sealants onshoring that keep or been I can years on Group, Tremco have of the our our Construction sales Company because our that numbers strength forces RPM. they've

Operator

today Mike our And question next Research from comes Partners. with Harrison Seaport

Michael Harrison

nice a quarter on Congrats here.

underabsorption some up. plant as some in related and mentioned segments, You startups of couple to investments ramp a different

we and a just better So talk during course playing about the underabsorption gets just bit in worse that hoping Is bit about could that in a about how that QX QX? out QX then that should I little and little was talk Maybe you the timing. year. think of

Frank Sullivan

Sure.

our our many plants and first of businesses. of volume, underabsorption in because all, lower across it's Consumer particularly So acute of it's

investment by our in in which terms from costs is sitting had operating Group. major initiatives first-ever and research particularly $XX segment of roll in so or capital our depreciation and million into RPM off, will Specialty have by investment operating absorbed some our a P&L, Secondly, Excellence Products of development We're that's our we nearly has perspective, a Center depreciation. this been by combined being Innovation company. And traditionally,

challenge part last environment or months. been what's a the to that's And them difficult volume over the so in of XX XX

have investment also Excellence, our Group. Specialty $XX Group, the this Products Color Resin million in DayGlo We That's part another Europe. of Center of

operating as Malaysia, So some opened investments. up and we none and fall, a this where efficiency, we're PCG facility making to of ramped developing all strategic new first a We Those reports country some opening P&L. be part growing plant utilized just our will all will are group. in examples. It hit our India when which but new be in in capacity adding platform, in adding we're just they fully places of to

Michael Harrison

can talk less timing little spend. sounded very infrastructure All curious like bit if And business. a of Construction on the That's about last guys I'm helpful. the then a quarter, feel kind you bit right. little I of you confident

dollars of over think regardless in the bit a you this curious, call wins little that depends feel much U.S.? how eventually out like on these do playing out play will are I'm You committed who that you election maybe that do who talked on period. about wins? longer the Or just

Frank Sullivan

based on anybody's I processes bill Inflation going through think be with administration, particular, lot going seeing a happens their dollars. that. The of Trump through on policy what as part and I the onshoring earlier, as is think administration But infrastructure manufacturing. it's as who improved committed industrial committed if Biden call U.S. into they wins. it, supporting be well they're follow to down permitting to mentioned spending, double as a permitting, successfully It's will of will have I to guess the what they're to Act saying, which Reduction

those manufacturing. don't see to of will the levels, the consequences anything debt higher I that. of of consequences consequences The corporations, So of about taxes not favorable negative be tariffs, on all

election. it so reality on post And depends the what is

Operator

And our from question comes Mike next Sison with Wells Fargo.

Michael Sison

well guys the can you Guardians Hoping as did. as execute

So yes, just guess question. I one

what type the rate if should hope, XX%? any cuts And So volume thoughts you you do work, couple the type growth that growth between of to you do of for have then think portfolio get the what over the need 'XX, And you of Fed generate let's years? if think to volume RPM next segments. maybe

Frank Sullivan

our poised thinking, I a a to consolidated gross this fourth billion on run is get year, the big on Well, get of the will rate realize be and corner we XX% my earlier time this EBIT That's to by target, literally, annualized to to meaningfully question to XX% gross you And if, than if wishful in ahead a we turn path $X not which we're we on volume function comment, closer the going and was would to half other which X% XX% hit follow-up EBIT. to don't to we whether margin margin we of and we're be or will $X.X somehow those goals. an growth. And is billion tell and and quarter, of if $X.X know something your not profit this second Sure. those. billion is how I $X.X were XX% able original or of for don't are. and year, if need we growth our answer or generate but very billion to our X%

Operator

Byrne Steve America. And our of next question Bank today comes with from

Steve Byrne

couple a in made first one, that And comments Matt. minutes quarter. is single made, about you ago, that low response in a first actually digit questions the comment few got of to you was deflation a just I the

deflation of million? MAP facility had was split down of you much of you $XX closure fixed You goods cost costs? on that Can comment that how raws out Can that roughly initiatives your $XX reducing million. versus

Matthew Schlarb

sense, second so we Yes. just quarter. Steve, to give so mean, in the a had I deflation X% of you about

different was it of first rest related the quarter, variety sorry. of factors a sorry, So -- that the

there but work doing are to different that. reduce played our the so that factors, And teams procurement costs into certainly, are

Steve Byrne

just so And these ago was Frank, Asia. minutes ex So this working in still of XX% about Belgium. procurement To new goods the so thing your okay. get about raw mentioned cost then your and other roughly guys that new mentioned facility U.S. with out that is you going India globally of sales are of require that growth? you you in And plants you local or U.S. facilities is to more represent initiatives more works the more have that than it in other the cross-selling sales can building XX% total, have to to might Or you ex do manufacturing drive supply?

Frank Sullivan

great it's question. Sure, a

of our let so M&A, we've was looking have years meeting strong differently. X track called away. us what stood successful maybe goals our Board record that ago, for area and back and X out And report me as small years XX pretty done to far did tell out what not a you a in acquisitions. We we the But we

flag a prior ignored And the places the years was atrophied. that, world small or so India this distant catalyst that developed acquisitions little notion in too were the fact, and of East with a, growth. And planting call those Southeast acquisition in or XX for be the in or in would Latin small it, Middle many country a Asia of America

So the in run in a from business his that team a dollars paint Air almost the our unique manufacture an Carboline and Tremco African of Stonhard nature Rust-Oleum the South then and folded gentleman exception, of by country, a beginning named spray one Boonzaier we and were where they value where acquisition it's and South destroying single at time in African area millions with Grant which is that of of Africa, out because market. actually and

improvement of the sales and administration, charge in the our and independently the we all his profitably with last control past. successful out. I'm that actually years Africa, are confident still perspective. in they and in East, Johannesburg from market Middle the that we, in they proven to Southeast we Grant have So the has and all with that conjunction didn't control but that be that margin manufacturing, ways And go marketing week there a Asia Grant Boonzaier of report team India. put so in to now next Board, That have in approach his an world grow was And and to now to we X team. growth going developed our they

for business for of of a have wrong every leaders a combination a about be time of successful. platform what's true you that and taking in And you tells were so leaders on we excited fact good that And collection can good years. go adjustment. group, where to to going us what we're that do And there coming we what I'm recognition in the we're our the doing have

excited years. the to with don't so world developing about path build couple out existing the yes, the capacity plant at have We But to didn't any plant And this have new point until and facilities. we're last beyond some along capacity. honestly, that, in Mumbai profitable for growth in in Malaysia really we're going of plans a we very the quite

Operator

question next Spector, Joshua from UBS. comes today our And

Lucas Beaumont

Lucas for to is go balance of outlook back I of the year. Beaumont just to the on the for volume kind want This Josh.

sales as well. quarter I down second the first about X% X%. So to of mean, to guide X% implies the of kind quarter down was sort The flat

of So implying for probably of growth and minimum going the into single-digit the kind up X% hit I mean, are range. year they at to that half, X% that in to your least to volumes to the to is up low kind get need be at pick a second

either portfolio. you that, and of I see place acceleration the coming in what's please soft weakening in sort be of kind you market just outlook or just And could will end set still sort us confidence if guess, I the where the there, was where to from been data you that through wondering given giving So of up walk has going? the

Frank Sullivan

Sure.

So I'll by segment. that take

in As Products in of positive volume record Coatings quarter. Performance had top growth Group the on the indicated, and quarter, that's Construction growth we prior Group strong our and both

continuing, a months, a bottomed difficult that at or see Products so or we question very modest an it we has Group, after earlier XX very to And flat-ish will And out. that to albeit our see modest there. start XX feels like Specialty commented growth level. I

your that the segment the And Consumer will when comps year. positive. certainly significantly really is question to so easier round optionality think of the second the And in there turn I we half

I how think growth. about so And that's

be managing facing year. We be will units variable Consumer corner. to turning growth guidance easier pockets finding the the and in more SPG operating the are half. of in meeting Consumer well happens for in our industrial But is in segment or going the comps our what second beating

Lucas Beaumont

the Consumer the had on broader seemingly of were. there now outgrown in the markets just sort DIY then the of weak have quite now the the levels growth that are And for of But below of your sort side, has so the this saying Great. a by of We years. just that most high period trends market. But in pre-pandemic the sort the producers of underlying number masked for of preface been of what kind growth you back pandemic in while. I'd terms a markets, guys end there sort

growth So really potential underlying of what the sort it's sort I hidden are, of trends think.

with potentially was -- what of could So to curious it of is we'll do this sort the quite a now cycle I be inflection we end longer few of later. on your than this Or sort like thought was come years Consumer. think business? algorithm been a that as lower get get we rates. And the market to just medium-term you a kind in like then Is down, long cycle that thoughts see like ago? interest has what they're So really like looks that just

be happened had helpful the great. on your XXXX, And last thoughts be it wondering would then want that to just helped, that if it -- what put could if cycle So you if context maybe there. in in the too, in of would you

Frank Sullivan

Sure.

to at housing assessment correct. of in So to DIY, portion through people think driving then first cycle spikes turnover. big that added volumes factor, and and kind themselves adjust our biggest COVID all, your pre-COVID There of have market are least is is The back I the of have accordingly. of found

high massive rates. And the You went price and and homes care what the high whether COVID high. that's they're rates and -- not interest -- about inflation-driven increases or mortgage price rental challenges, crazy through historically, we in is housing,

If is rates. mortgages you period remember, XX pretty or XX a for buy long-dated at interest people reasonable. years, low But could very of

on are I the everybody at think knows so this, And the XX-year call costs, low. mortgage we

they or and here, patch room. primer products I home a our products the Zinsser They a get house. a prepare small products bang sells a then person changing it's our XX-year and big kitchen an bathroom, and/or about again, turnover. our housing think They at They someone a driver sale. And we new get And changing repair addition. or to patch use do double cyclically up fix for project their that and nothing structurally redecorate repair that. whether when to it a the industry. products, low a home buys We're But redecorate in our a so from Rust-Oleum benefit there's

up, will, up back interest the and that, in which As segment rates -- as back you'll those pick the our that dynamics turnover housing picks Consumer see drives it well. as improve

during decline circumstance we your spike then relative anything don't So and just and relative think unique happened housing correct the prices of and to assessment a changed. in big turnover, has We to ourselves COVID. what structurally find

Operator

question And next today Silke our JPMorgan. Kueck comes from with

Silke Kueck

in today. for Jeff Sitting

on your like conservative imagine, unless X% like going hold sales in -- the is quarter, EBIT it margin growth. it outlook. is means like that smaller SG&A I what gross $XXX -- XX% like second in spending you're big for seem you that I deterioration SG&A billion to think the like million a seems right margin is your in and beginning it's do a margin the there's Because I Your if Or seems always -- at $X.X seem And it quarter that does something does again, like like you quarter. sales would your low? flat, really up. into Or like the second and that And spend a EBIT And translates number? flat understand is outlook but EBIT. margin in

Frank Sullivan

Yes, I appreciate your comment about cyclicality.

So but different not based the profiles businesses. different quarters on seasonality margin obviously our cyclicality of our have

QX. QX prior QX, or marginally that the volume would so seasonally the our us we certainly lower year in anticipate QX. is than I typically discipline But will hold initiated second And versus second holding margins. And gross we SG&A quarter, in quarter or improving in

margin that's just a terms So I gross seeing It's in anything QX. driven don't changing the MAP in really dynamics or of SG&A there's of growth. spending function that margin think volume the the or you're improvement by

And not going be is and we're going no, we're be question backwards sliding discipline. premise no, up not giving of the SG&A on correct. And so to margins, to your

think to into today volume So make in provided than we the a I Any second that going our this look quarter, will like many we're anticipating little improve. instances, is is growth bit and feels additional QX that guidance QX.

Silke Kueck

for the will total in SG&A Okay. spending be Is down your your year? expectation that

Frank Sullivan

I don't that. I of that know me. don't have in front

the plants Our our 'XX true in this, is this the SG&A year. will percent my our actual there and design I is head, our MAP to disciplines is improvement expectation sales and Belt-driven our across and you And Silke, are Green of be RPM. We execution second for of the be off million improvement don't dollars. fiscal here and improved that But of improvements. across and initiatives again, a will the quarter, $XXX,XXX had as it so businesses, tell really can same $XX-some in a continuing. and know, is $XXX,XXX the I a and across of a testament those top

managed change in in excellence, strength cases, growth operating places have a amounts when level. impact quarter show our so X% dollar if continuous a bottom declined of And my and X%. operating well costs a and only many, you'd pump good to in improvement and you they're to our meaningfully it I all EBIT is real many huge. another cultural our conversion X% or industry, if earnings When sales, line. In the you your can add adding growth, solid But most and flat on we then be in credit teens moving them decline out of sales, career, our we're your focus quite programs these think of had EPS most aren't the up, at pretty decremental giving which in

we'll to intensely. than we that and growth point the everyone we want the And sooner really MAP out it is challenge whole of And of benefits the initiatives. that a working and company of but our it's are the else. or true Our on better happens, across be growth reap industry, two with when box comes

Silke Kueck

-- also about I the that wanted on question to like ask matter. so MAP-related a

million like So $XX there's like in are charges fees, like that about arguably, these restructuring the MAP between in took all professional ERP you consolidation. charges, quarter And initiatives.

spend that sort like that's for the to $XXX to right? rate And think the MAP the right that's $XXX of run million it? about tied if Is rate year, in like savings, in the run so there's million way

Frank Sullivan

can our me, will cost the fiscal Rusty finish run we dig them have or on the don't of rate. when a 'XX up. that Matt I maybe full It's Yes. benefited year, in expectations have we front

efficiency P&L. through into 'XX, will that flow all achieve But the improved when have $XXX of fiscal part and by won't we it You remaining MAP of structure across cost our RPM our flow 'XX. million. Not see will another we

the full really we're IT the And is a marry area, fiscal see onetime, us area, in the dollars spending plant amount helping the are to through some consolidation so which flow related 'XX. up into of which lot. data data spends Europe costs more You'll in significant data that in to

Russell Gordon

plant provide information, there release. related a ERP you'll out in the [indiscernible] add-backs the Silke, if supplemental and see in footnote that And closures, earnings professional you to detail, breaks fees. MAP we more the Behind restructuring need in segment that

Silke Kueck

of that's That's number was to the $XX think the so question. ask I right. to wondering if million that. tied Yes, can just cost if I last about the where right That's from annualize I got to a sort

the resolution that, to Industries. like between this that Rust-Oleum million and like NIC there's accrual? So take have litigation of $XXX Is a you'll

Frank Sullivan

No.

million, the and verdict So of the which accrual $X.X million. our range original on that is $XXX current is

New We that other set with the it is of put lower context, are liability. is $X about litigation. in Wipe of Rust-Oleum products. sticking product To a million a this IP not performance, range. not is any contractual And that the It end

why in of many so possibility the feel a verdict we reasons fact I context just think simple And of the line significantly $X appeal. kind original the light you're of different that product in outcome with puts dealing about strongly a million on

Operator

question next our from with Yefremov comes Aleksey Capital And today KeyBanc Markets.

Aleksey Yefremov

In elaborate just PCG, more positive on of please? systems. management sales Could effective you mentioned you impact that,

Frank Sullivan

Sure.

data year, using X or from And CPG, are to years different PCG, all product Consumer, honestly, of almost look a moved we ago businesses. have quite our We company lines, at that, our X good to mix at analyzing a company like that this quarter and manage on its a prior try very financials is the on using data mix wasn't or past to prospective basis.

higher on having on margins. we advantage have a with it's adjusted a effect. that our the focus competitive typically And or incentivizing bonus and products to So commission forces are sales positive structures we

a profit MAP gross call our in this for on of why again, those line. MAP highlight to margin cost XX% sophisticated SKUs being or It's when you rationalizations it's adjusting lines as look seeing the profitability sales just and the in note force's different and understanding data. our on the more more our adjusting that so we're so product focused time where and And through savings, line sophisticated then piece of either quarter we're savings at of you're some and the incentive or product improvement. It's true attention, with through being sales interesting in will programs of volume. with real-time were focusing the

sell because damn extra unless hits extra another thing dollar your product it's volume it's lot all a or of cost line you It's happening really great doesn't well reflects where improved better the earlier, that's whether a that bottom so dollar 'XX hard it it I work. MAP And focused. then work. news. driving It's benefits can of conversion the is And It's And an of everywhere. said mix. that driving Whether as of volume fully mean or volume. unit

Operator

Our next question Instructions] Markets. comes Viswanathan [Operator Arun from RBC Capital with

Arun Viswanathan

earlier. answered comment get made elaborated but think I'll most thoughts I you've of on your just you them, maybe a some of

great in but and I guess, been still hasn't some PCG. you've Commercial, So success that see been able CPG to

regressing to or that is do So rates that Commercial a a more? kind Consumer continue And kind any of little do of you more phenomenon? lower there expect maybe expect bit you or from of is benefit

Frank Sullivan

Sure.

to So I'll terms comment rate of my back our lower for Board. did and go and work the Rusty that yes, impact, in earlier

I and can took tell it you, like the or you're apparently of but down rate interest if recession, to lot X fun. last And X not a the been months broader Just housing, quarters finally slow a manufacturing couple didn't into have of a or economy of in manufacturing. the XX get increases

a the time of broader a commercial that It our assembly I you Construction It it so the area so quarters rapid Group. give interim, more a focus or in new commercial for Products In to housing. into same construction for X rate think areas. into flow or less big will panels couple is X of Panelization cycle. the or is take X a and start I'll labor And are pickup couple X examples. construction and sent of -- interest cuts allows to

boomed which in residential million. rates There that And principally seeing so a of at think to a on facilities is COVID the we and that's effort activity what's And lower a a when commercial residential was XX%. million double-digit it's line. up growth, we're $XXX between product base. But and fire real EMS. specs that's And are $XX went growing. Nudura, focus departments, boomed, so departments, albeit house was revenues and concerted mostly Tremco previously schools, housing to on area a better or focus grow up Nudura in exciting residential very about an then seeing saw solid it balance what police area now much interest safety an to the with market is and are a personnel, it's on focused that from and beginning decline so we of we slowed, business XX%

multiple examples strategic real figure gave, a out no are growth, in environment. So X I to low get like efforts pretty deliberate, across product how there again, growth the thoughtful, growth lines to

Arun Viswanathan

Okay. on follow-up just maybe another And then allocation. capital

maybe portfolio your potentially another you holding objectives bolt-ons? little it, telling the are or something that product So any of best of? similarly, days? -- through and to could pursue? Or Or there bit company you dispose is grow lines and to substantial guess, continue your inorganically maybe would more you're is these be I of that back there review what's are to And growth a looking kind in kind

Frank Sullivan

Sure.

time, of turned our what to pruned was lines last -- that, as portfolio we not a call see space. product over they ourselves And business. did Guardian our treatment leather, competitive into warranties, at warranties fabric you had used look Products business the years. and constantly a being couple selling consumer We in So material It them basically warranty that meant without were issuing for product. we we dry X over Protective and chemical a that

Stonhard, in of a in sold the construction U.K. lumpy business couple of the contract, was some or high service had case, Unlike but insurance sold XX% and cards the In it. We working not the players was which years, businesses that. Very good So a services had this with was and Roofing in to is we infrastructure the industry for majority margin, very we a and material. apply us Tremco compete high so it capital that more supply big people, ability requirements. really

divested MBO part we So another and business. down an business of then that shut that through

businesses for effective or been XX reviews So the smaller that bolt-on didn't rationalizations we're XX or do the to that the today. pursue doing lines, those product to years. product we akin small RPM program striving line that divestitures X of been fit will or we cases, We'll And for pruning has in at of that's looking to don't for. portfolio more product in kind continue been we've the any to have mind very but continue last large the medium criteria

that very American not transactions hired them. out Goldman Sachs we'll I say to look this always it sell billion And public. PPG can $X would the was there, are open because be their We are architectural at large North irresponsible business. to It to.

and We're Of better. in will RPM But the it. interested at getting continue getting we value. course, apply not we in We're looked continue to discipline interested bigger. to

Operator

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

Frank Sullivan

Thank to participation all our and associates, investor Many what's are your today. call XX,XXX-plus remarkable of for in interest a whom investment some you, Rocco, to in thank call our of and been you appreciate associates thanks effort RPM. combined We on executing on for reduction your the powerful than initiatives. each more some the for in is cultural effected actions our their of simple taken way are who and change plants globe closing we've in us. cost or the of paying off MAP we've act it's The that around really the

in virtual tomorrow interest of for any your in p.m. our great Meeting X:XX Have you RPM. and as Annual Eastern to We Thank well. of you Time participate have Stockholders that welcome and day. a all at would

Operator

Thank call. all you today's for you. This We concludes thank today's conference attending presentation.

your and You disconnect have now may a lines, day. wonderful

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