RPM International (RPM) 7 Jan 252025 Q2 Earnings call transcript

Company Profile

Participants

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

Call transcript

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Operator

Good day and welcome to the RPM International Fiscal Year 2025 Second Quarter Earnings Call. [Operator Instructions]

Please note that this event is being recorded. I would now like to turn the conference over to Matt Schlarb, Vice President of Investor Relations and Sustainability. Please go ahead.

Matthew Schlarb

Nick. you, Thank RPM second to call the for And International's XXXX quarter. fiscal welcome conference is Today's recorded. being call

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

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

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

quarter and otherwise as-adjusted are Also, to be on please an second fiscal our will note all comparisons comments of basis XXXX, that the indicated. unless

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

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

Frank Sullivan

sheet Gordon balance provide to MAP remarks, the details your happy and a prepared update our will today's and then review to joining of provide Matt, detail. call. will answer Schlarb cover Rusty give outlook. progress more a Matt Laroche everybody Thanks, the providing I'll be then will of us we'll you on our and conclusion by Mike for our start XXXX results, questions. thank high-level our financials in At

these from EPS. We charge and growth headwind macroeconomic in customer with sales, areas, consumer second low adjusted in despite $X.X a and EBIT to achieved a quarter no several X. adjusted had strong a a quarter our highlights results continuing records group. Our on environment earnings are including million margin We in Slide bankruptcy

consecutive quarter. for the achieved adjusted record XXth we Additionally, EBIT

last our ability the markets. made improvements X progress implementing conditions demonstrating Over have navigate their to our associates to economic operating consistently XXXX simultaneously MAP mixed years, our while outgrow

are We MAP the improvements to made we've pleased XXXX. with structural

MAP the the of year fiscal grow fiscal implement to and continues for of XXXX. balance these will pipeline improvements full initiatives XXXX and in Our remains and we

X, particularly volume to X our during and economic Turning to Slide positive outgrow each generated was segments, our the organic environment. a evident in ability our our markets sales as segments repair of turnkey Across to quarter construction on business. focus mixed we our and high-performance opportunities. entrepreneurial our growth Demand projects leveraged was our in capture strong for serving Construction and our Product culture technical products Group's systems maintenance roofing

due quarter. pressure incremental the end groups. executing time, Across some all markets, was continued which of signs the the under MAP of quarter, first XXXX aided consumer through segments, specialty positive have X our stabilizing on It's each focused of months of EBIT including by Residentially our a for to a favorable the quarter, for expenses while adjusted growth our after These as segments. improving important to sales than XXXX percent is declined that focus streamlining. improvements drove note reducing SG&A increasing year which more in initiatives, our structurally associates' MAP in conditions weather we been showing an on of during X and second This efficiencies. SG&A products

their quarter, segment, the putting is on MAP an more businesses, to the associates I to our businesses is This in RPM consumer the structurally for our prior thank stronger mild will we particularly far into commitment RPM compared winter in facing excellent but areas on executing this XXXX some conditions and detail, third put cover growth Gordon MAP we Rusty and in continue other making which want their so offsetting job in real of them of are in growing control. pressure initiatives the our organization. year. to that do RPM within place. things a in to XXXX and program

To interrupted by will to like our where to real summarize in but XXXX continue a quarterly earnings our call current see growth. the sales a and to provide temporarily quarter is driven to being our spring fourth winter, Laroche strong our turn expected on and strong we Michael results MAP results. expect to return I'd performance over details

Michael Laroche

a to sales expense consolidations benefits quarter unfavorable driven partially facility in Frank. all consumer Record bankruptcy. . Adjusted from being a streamlining, consolidated EBIT the including X.X% headwind, of includes emerging and of were with inflation, The within SG&A there sales markets. with debt by FX basis, customer's bad continued volumes and Starting progress X. and results on grew were Slide EBIT a XXXX on our particularly X impact neutral cycle consolidated but Thanks, in driven positive a pockets by record, particularly negative growth a on segments, by commodity group. Adjusted $X.X was offset second MAP sales million group mix. consumer

As second and was also XX quarter over prior record Frank $X.XX year. the paydown primarily by and driven increased margin adjusted was lower second million $XXX.X in debt a quarter EPS was EBIT compared from mentioned, XX.X% of XX.X% of months. This past interest Adjusted expense adjusted EBIT a the growth record. to

American geographic Europe, sales conditions across all segments. were on macroeconomic Slide In to challenging. remain North Turning generally next results X. solid

and profitability collaboration improvements strong in However, growth. XXXX the region continued MAP drive improved to

Asia to focused construction Solutions declined year the on Technical of to Africa were projects and and sales our prior [indiscernible] projects infrastructure strategy comparisons due East, serving Pacific while large management drove with when the completed. Latin sort in challenging decline strong teams growth. sales, high-performance generated In Middle America

been direct solid level business has and the proposition Products its growth another building value services Construction outgrowing Group moving Next, on restoration, [indiscernible] model X. focus on with sales our markets. generated and to offers of service, and high-performance a quarter segments turnkey high its of systems roofing Roofing its Slide to owners compelling business

for our that contributed new also growth. example patent [indiscernible] We've our sustainability and release includes Building admixtures products. than that repair and and pending productivity business market VOCs repairs. from competing which increases a of WB, construction Bricker, One [indiscernible] program introduced World need the products Bond with lower sales reduces concrete to up by expanding panels also Better a user has line clean providing In tilt

in have and job We to is cracking also product multiple that can X introduced enhance able Veraspeed-RMC which low situations. in has to productivity to [indiscernible] a used on resistance and be site. hours It free premixed prevent restoration cope the only is permeability

EBIT to by growth and benefits, flooring record hurricane negatively Slide record and Middle CPG Performance improvement was protective by X, partially second quarter growth unfavorable contributed MAP to were construction U.S. by activity mix. the this, East high-performance European Coatings also double-digit QX sales and quarter. in coatings due by Southeastern offset sales XXXX a growth. adjusted quarter improved and driven sales, XXXX, Adjusted sales in by the strong, sales Despite was serving MAP growth. EBIT Africa, projects. MAP impacted in second collaboration XXXX sales achieved led businesses CPG the benefits the On driven Group through achieved was record

quarter. end for products. response previous Products by the to Group Moving led stabilization demand many well returned residential business was food driven its restoration the EBIT also the sales The and in XXXX Specialty growth sales. higher to coatings MAP as business, hurricane markets showed benefits as improved serves by OEM, disaster a X. the during to second acquisition. as additive of resulted signs during activity aided Slide focused growth Adjusted by quarter, which Specialty grew

in Consumer focused sales, million bankruptcy. to lower adjusted the XX, partially targeted Consumer during on $X.X inflation October. the Group users. campaigns quarter. products, market also impact due in expenses and International particularly share Slide by and continued, of On customer to driven aided or rationalization quarter as also quarter growth but bad benefits, were sales the the growth in debt takeaway Customer primarily levels weather by in generated from MAP favorable DIY margin negative in the stabilized, we directly the inventory a higher conditions offset moderate by marketing gain returned of XXXX steady September, end EBIT record

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

Matthew Schlarb

in XX, X Mike. Working in debt make to year the percentage resulted capital flow year by RPM's XXX years in chains basis benefited working and over This larger declined normalized. has consecutive past Thank $XX.X the us through driven and year amount from $X.X by quarter, million. ago, to allowed strong sales capital The operational XXX reduce of capital history. The the On we continue cash working cash million the we XXXX million during to dividend billion. efficiency. a second margins repurchases . In initiatives. $XXX as XXXX and record was at when basis our from progress points to for increase supply the MAP the capital increased last on highest working a second Slide XXst you, during $XXX expanded quality as returned of from fiscal the quarter, flow period. shareholders efficiency Strong remains we dividends year, share points

Slide on XX. update like on XXXX our Now provide initiatives to I'd MAP an

X able MAP program As Green Frank we we mentioned the XXXX, confident we to our structural are building and continue is will be in have earlier, that wide. made on progress Belt example

XXX results. our XXX. now the MS globally, associates is and a over and process-driven areas is have monitor program for small training, started associates solutions program address improvement, as that Belt in Green It we then X expanded to has identify a implement Our those now program completed different with helps of the languages. create U.S. is the solutions which What offered on focused challenges, part

than monthly. managers. become promoted has of to been number it collaborative verified a in recorded across green practices To belts in ideas resulted has and $XX Initially, have to sharing and date, businesses. evolved million that Six grows these more have best more savings top-down been program, plant and

realizing at these producing in recent and are In Rust-Oleum developed waste addition all benefits and we safety, Green A system program a savings, impact. Belt environmental to reducing our areas. solvent as such other decreasing financial improving is benefits recovery

RPM businesses unnecessary projects and throughput examples in our investments. with processes. also ongoing have more increase increase These with that and manufacturing several efficient in through the example, eliminated are work new the Belt X ability effective limited across to process In pipeline. instrumental a the just in few trainings steps quality to implemented been projects Greenbelt of capital Green Stonhard improve project a capacity

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

Russell Gordon

Thank you, Matt.

the for third on a is XX. outlook Our quarter, is our quarter Slide reminder, seasonally slowest as which,

have continue activity. construction negatively headwinds, expect the October We macro and mixed during tailwinds and impacting environment the September some demand weather-related become now to and DIY

weather conditions when up prior by quarter year third FX increased in year. expect rates, basis, the slightly consolidated as period period. completions. In mild segment to selling and negatively impact Coatings year sales to today's we when our continue the we the flat comparisons offset a timing compared solid, for solutions, to single-digit by X.X% sales compared at be expect in prior the segment, be we as On we flat faces remain underlying in Products sales Additionally, waterproofing but . By to the to project will buildings and/or partially expect of growth Construction sales momentum demand the to low boosted Group, prior unfavorable high-performance EBIT. unseasonably growth adjusted Performance Group challenging in organic

quarter. group, our second markets, In in primarily end products stabilization and consumer specialty residential we which the impact saw

now trends reversed remain improvement. weather have mortgage in quarter to favorable elevated end the However, market and further second laying rates

in a period in segments down the in or to up reductions, Consolidated these moderate materials record in third residential and inflation labor. markets to is and including adjusted single-digit low are digits the by to offset structural year range. softness as expected both decline expect compared low end EBIT MAP benefits, We XXXX single prior be sales raw quarter SG&A

the inflation, of as and port there material strike the tariffs is what raw to topic On could a outcome potential of uncertainty have.

navigate we've positioned because procurement However, ever team. our no as we to as well potential been are of challenges any materializes, what matter center-led

to subject scenarios. different developed our to While risks we from procurement contingency team potentially has mitigate potential tariffs, modest imports have from countries plans

XXXX is guidance fiscal Our full on Slide year XX.

sales expected with Our growth single digits. outlook unchanged the in low remains

to XX% the We mid-single are narrowing previous digits. X% from our outlook of to double range adjusted to digits growth low up EBIT

economies outcome similar And in second election, to like political conditions on remain while large uncertainty economic also impact the trajectory changes and expect the The there U.S. has France, to Canada and clarity We quarter. Korea. is of not the increased of rate clear. interest Germany, other is generally

materials raw in inflation in We expect response pricing to to be and continued labor. positive

interest with markets the PCG, we demand expected improvements comparisons segment, improvement an EBIT in growth incremental P&L Consumer that An and fourth recover. strength is benefits may SPG, and restoration longer push to expect be when its out fiscal At the quarter later MAP how By elevated this adjusted of and quickly to we led At CPG the for continued has improvements end prepared comments. the will timing residential projects. our recovery. in become the volumes market year. by by realization expect outgrow a easier. on demand XXXX This expect consolidated high-performance On for potential driven building rates of concludes these we level, in be

We answer will to now your pleased be questions.

Operator

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

Michael Harrison

a slower of where you volume is bit wanted EBIT. see the I Congrats across surprised understand it's to to on ask being pronounced it's leveraged I'm quarter nice and quarter a quarter third I guidance guiding fixed can this and see quarter, typically a a about that that a seasonally little to flat your flat as but more impact sales you're cost, here.

would growth the flat despite negatives I'm to some I sales So that have because kind be question. why MAT my you of What just the expect some are benefits? able show benefits, offsetting not is are guess, to MAT EBIT you curious,

Frank Sullivan

Sure.

have So spring benefited -- third country, And seeing been seasonal. of for or our It group. of snow very to on we this very simple. And We our of outlook that in winter. by first consumer record top you quarter QX year third been have the year out last record a in quarter and Products we real the look and need the a think of remain a all the is had window is last whether is strong number and Construction of real it's year mild years, a early anywhere all-time all, before. return -- do you're in Group always sales almost was particularly I

the winter. And to quarter is to second being story by one each return think I the volume not interrupted our so strong growth, but a leverage volume in the line a bottom and is real of growth unit simple our just growth segments in

growth months. expect probably the return fully spring. we've We see strong to think in a a sluggish earnings XX the sales or turned after in I of corner and XX combination It's growth

a bottom Our growth and consumer leverage starting continuing in to And will product number introductions, MAP February line. new benefits of revenue be that particularly are to our to in we've got ship March.

we So we feel are. pretty good about where

and seasonal are founding, up a business showing that is this We since and seasonality been winter. have our

Michael Harrison

markets. that And All of in you a stabilization us those from business you resi the residential color? and confidence and then some the OEM out markets. giving just seeing in your in you're piece you're talk of right. maybe some that residential I about seen specifically it's have box specialty you in both know inventory that That's some consumer levels. specialty But helpful. retailers benefits their bit what's big stabilization business then you Can give little stabilization seeing called more maybe mentioned

Frank Sullivan

Sure.

Some of it's your in comps.

in flat those know, we XX-month rates, of in supply time, on bump, XX- history, what of rising period we're as interest group but our particularly modestly consumer consumer out takeaway never in negative an through into chain we've think our for seen that's to bumped or a many we We consumer the our takeaway consumer old coming story challenges, -- COVID then I and negative and quarters. suffered of. segment call were the the beneficiary with extraordinary

of its comps. [indiscernible] So some

relative turnover rates. to what to low starting interest rising You're softening in see historically rates were housing some

the be is and -- my moving see a to in period in so turnover, might sales but are in indicator good, home And direction, you of times performance, some albeit swing. choppy choppy experience construction when are home right stabilizing down a housing and an start it

a initiatives think real Quite an focusing and been strong and top initiation And might very encouraging, is performance weather back across I impact choppy because it's be you It the in have was that's And we've to where of those are. on to second on indication RPM MAP honestly, growth really on see when of times interrupted. quarter going tough, of upswing. year-over-year we started XXXX pivot and disappointing a being the the some turn.

to I reductions geopolitically coming So and/or the a tariffs at threat dynamics starting and in direction. uncertainty Rusty the rate looking the think to are relative as But certainly interest to there's pace move that of we're right lot other things. of and what's said, relative

we'll So think, effectively. I respond those, to

Products had in product year-and-a-half, Specialty it bottom Put consumer should have the feels and in challenged hit we more difficult and aside, all lines of Group right that year, moving our be some like a direction. that

Operator

from question Roberts next will with your today And Mizuho. John come .

John Ezekiel Roberts

customers? seeing center In so bankrupt? the mean, to a and growth you one went segment, you've struggling these like bifurcate. customers that are and home business seeing in got average starting area in your the consumer significant bifurcation is are you large smaller the I Are above

Frank Sullivan

been year, direction. and years, the I chain, challenges discount takeaway large that store customers, X.X strength of and in in big as saw consumers think that's the true you some shifted saw we some better of over discount consumer the at where some boxes last where chain dollar

return in think to behind results us. at customer of our can the with last also in results takeaway customers, XX . of we it our adjustments certainly response years. or weaker XX base. more numbers larger some areas our couple saw over consumer were and supply in those over or than takeaway certain months, true to traditional most stronger others. inventory and see entire across And chain comments this consumer of a But your to that start We going to spring the You think you're last I are see

John Ezekiel Roberts

reserves your debt of you any smaller anticipate sort customers do bad going down? additional think And

Frank Sullivan

store up entity Yes. assets a and don't I was And that picked one of related business to see . little some challenged. on we challenges a of us by any business This and return, it horizon. the It's bit but a co-op to will hardware been surprise was think others.

Operator

Your next will with today question Spector Josh come UBS. from

Joshua Spector

to correct on have a X% thought guess leverage I'm versus performance I on ask savings, the November basis, expectations volumes, to on I been really volume beat So primarily about bigger your would assume MAP wrong. But EBIT quarter, more but of wanted the that lot if by that sales. just me strong was I your because we've have would talked about X%. that there a that leverage I volumes. on lot bigger beat

So why -- December don't a in we way quarter? that see or stronger the much sorry, through in November come

Frank Sullivan

Sure.

for all, first you you at volume a the bottom demonstrate the we see of line solid have across million volume if better in better. X% we one So And performance, so would or And leverage you all was growth. leverage, -- If look and line. the the $X.X to that's of consumer. segments the our exception seen volume where solid it unit growth EBIT performance kind expect our was QX think of with and adjusted bankruptcy, if there I we there are our each we much when did segment would of on to have some unit leverage you'll see right

Joshua Spector

What the guidance you your I need I XX% be quarter, volumes to to EBIT to do to your point, is that on May that? math midpoint guess underwrite -- achieve my will related mean the of is growth. so about

Frank Sullivan

we've need don't in growth top that head. of earnings know in volume QX growth QX. be drive the unit a of X% my I double-digit we range the to what But in certainly, will solid experienced off

out I in that. on well. receivable Assuming we . Yes. a think write-off you'll million why is number. higher last as not reasonable to took there's that more again, -- have adjust $X.X leverage QX to to you better see get a One the any leverage. QX volume quarter That's comment

strongest low lower seasonal a quarter is QX has our and is Our and QX QX sadly been. is back to always QX, revenue our period and quarter seasonality,

Operator

Stanley. will And next Andrews your Morgan from Vincent question with today come

Vincent Andrews

to ones things. quick some clarify X Just

or First, had the did gave I Or that in for numbers million, that that anticipated leave fiscal the reasons, for in guidance the was in that was guidance the us it $X.X but last you XQ? quarter? you to get original certain

Frank Sullivan

and was not not. late No, event a something It it we was October anticipated.

Vincent Andrews

that the just Or you've the Okay. narrowed And items there a is X guidance that's pointing to full and that's us range. narrowing lower range? more you've little full loan understand, EBIT that? driving I what's the but of X year bit sales towards are guide of sales then left or the EBIT causing want the the for you year, end

Frank Sullivan

we really record it's strong of strong which, it's then variation doing of the very again, have versus No, had year. And the a in whether seasonality expected there depends pushes QX fourth results strong think we it's in whether seasonality and all-time would to expect. the the last on weather quarter, and impact an otherwise that what expect our QX what modestly QX QX QX, or we beyond to sales I the in

So of our -- is in wide at little we on line double I expectation what some That's think terms digit. expect bit a bottom today. be range least the there will of a wide

been what Some results pick otherwise to [indiscernible] QX whether of that's QX. we be would going up have

Operator

today question next BMO McNulty from Markets. John Capital with come will your And

John McNulty

place early taken Or a much of onshoring around protectionism. too the an bit U.S. little I maybe still like had it to we any is performance was election quarters, about little soon that I but of in an in terms now was would bit is, the come thought guess through period? pretty the is And bit more with of segments, last there over So the Are you a case? Are the to that a taking slow couple know guess, they're you seeing little and guess place onshoring first yet? see I the that increase pause and one end. construction of the that also, spoken to having you I a that signs pretty that?

Frank Sullivan

benefiting it's of to is continuation small- manufacturing, We're kind seeing too I in medium-sized projects which early. in a us. think

commented things we of like that support and the time. As already some will projects last Michael the have out and U.S. that, over a quarter, some [indiscernible], play to committed in behind. of period larger longer I believe we're dollar

for canceled but big see that period. in expectations don't here halted, X-year now so being a of just X- over a instance, as or going project to our X- to there's out the opposed home I And here X-year Intel state is to period a to Ohio, play

some don't it of even So any will expect this, but out away. we of it to go

John McNulty

it. Got

on No, MAP seeing at that or actually you're And like potential or sense. that. that that frame Okay. to targets the for indicated past kind anything makes then side, the help uplift can you of this guess, terms the in growing I of pipeline size maybe projects you MAP to point.

Frank Sullivan

Sure.

MAP program, $XXX that of X-year detail efficiencies, MAP on million. program concluded achieved out And targeted actually Our period growth we I million. MAP, entire When the about and when we would shared that program. the we believe play over million $XXX how savings original it we Map was and XXXX XXXX, introduced number $XXX over a

reach that in of we million. MAP execute likely fiscal as that see continuing 'XX You P&L $XXX 'XX initiatives. on the our benefits will to It's in are will

lot operations what those calls, the And Schlarb, we've I'll and particularly had entrepreneurial very in And so independents, RPM reiterate, of to people . Matt look a of side. done some again, in perform highlighted, culture this and well. like. some manufacturing continue initiatives our just pretty and a

to and impact. introduce to beginning last lean manufacturing really a to disciplines good but not X center-led new over that years or new have approach a ability having bring X is relatively been the to to RPM are manufacturing, Our

international we of continue delayed introduce focus markets. is And initial so that into to our COVID which was these see by impact as expect America. European we North The in and as we're

that in the the So and we've we we've and cost MAP I systems identify that harder-to-value closed, there's we're bunch of our benefits of that plants ago, while biggest collaboration consolidated. biggest identify years number a is more of the is it's didn't we savings reaping changed think the can executed ERP the programs, initiatives, a measure businesses X on our efficiency number can we've come. There operations our and quite Probably level how to that, and exist across culture. today candidly and our of change of

Operator

today will Frank come Your next question from with Research. Mitsch Fermium

Frank Mitsch

quarter talk like the interplay to and that about between first was in Last quarter. X% the fiscal deflation indicated price I'd raws. about

Just there. it like is what quarter. fiscal the your second to and the quarter price sounded pretty curious outlook what is was in second And close flat

curious more you color there. provide could if Just any

Frank Sullivan

Absolutely. raw materials -- correct. your odd little It's an a kind some are materials great that raw that declined and of assumption question. increasing. is a flat We're have in of period are about a bit some And

core across we here sit board we 'XX. today, what seeing across the calendar as somewhere X.X% As materials. will it feels our into like raw get We're be in the to inflation X%

a raise to our of last business alert January force lot prices in couple of to of use people Group the go are where high and/or to one modest Construction what think one appropriate units, and and we to announced for both how your -- both . get our tariffs and in business to years, of sales but factors increases over learned in price categories relative on are especially go and in products March, it. in our have of I some have of we tools Products might terms instill threat where inflation other courage We the end

exposure is are very exposed Pacific materials. we I And of make Asian to is much so on and I the also The don't we comment region not smallest, And lot would our don't to that We that. markets. [indiscernible] Asia a last for certainly business the guess do have import we're raw in China.

those to ingredients some get China. of group will food Some impact from our

peers. exposure Our raw Broadly than but our of think to components get less our some is [indiscernible] speaking, chemical from brands certain China. materials, business I many

Frank Mitsch

helpful. about Convert. then And quarter, that sheet the you time, obviously the acquisition is TMP long you Terrific. it's the in an balance that Very indicated made best in and a been

did You buybacks. some

curious about just Thanksgiving versus the the buybacks. stock relatively significantly I'm Now down interplay materially. with between M&A since or

Frank Sullivan

Sure.

sheet years been RPM first since So the ago. I joined is all, our in condition it's of XX best balance

Our is levels. record cash flow at

in saw through initiatives conversion you efficiency. continuing to As improve the improve the continuing cash to We're our working capital quarter, MAP we're cycle.

We that. continue to be focused on

it. We not will I the want CEO in love and be afraid to But opportunities. with to buybacks and becomes its sheet acquisition falls between moderate the that best use ever opportunities balance do

So . use to when strategic so right strategically. it built we've opportunities smartly arrive sheet good strength can at value that and are fits, we balance the put

Operator

your And Bank. next today David Huang Deutsche question will come with from

YIfei Huang

weather. Do were of what to see you negatively delayed volumes X% Just the by Was that on guess I percentage from pent-up be improvement all hurricanes will expect come those payouts or winter impacted in post QX insurance the of weather probably the won't QX? by back CPG, QX? events volumes much of volume to and impacted and majority X% actual QX in QX, the those claim in the

Michael Harrison

the Sure. how some that. our beginning I is out of our Group or have tell that the don't Coatings the Construction hurricanes I to Group Performance of exact can QX plays quarter and had answer QX know. and difficult to at because an you disruptions that Products in

now. the for opposed or as February later -- construction reflected products month outlook. weather our be being will and another parts in group the again, deferring That's and severe that result across and in United it, continue instance, deferred of winter meaning snow the through weather-related. to with two, in for cold to wide of weather States distribution year, If our Some we March sold products or would

quarter group, So what the of except it it is the the . could have but our and stronger write-off consumer for in hurricanes early it is. been a impact

YIfei Huang

on for it. guess construction to seeing you're seeing you consumer. exposed But where are of this you, you incremental recovery various are potential deterioration? what improvement either has touched the you I end markets Got or Okay. here? your then on change And outlook signs any Or

Frank Sullivan

Sure.

as earlier, of months XX of stabilizing. I XX consumer commented takeaway, that signs negative -- are seeing or So kind we after of

it. piece And so of that's one

excited business consumer introductions improve. coatings, in market terms in couple to out We cleaning home are and we've a that choppy some new of seeing still in of number housing in the signs are new we're products constructions turnovers categories, starting product of some that And about. got our coming a in home

both the that week-by-week and it we've hope so us see talked consumer start comps give easier And about, because some that feels challenges month-by-month to going dynamics and we're the takeaway. rounding better like of to

Operator

today question Vertical with from Partners. will McCarthy Kevin next Research your And come

Kevin McCarthy

to Happy to you, aspects want I Year MAP Frank. the New X program. on follow the prior up on discussion of

with timing. do to has First,

previously, into target you've that be upsized now think of And to $XXX spillover million. there fiscal the I savings your was to XXXX. some going

of to think wondering year this fall So . And comment I secondly, on amount a expect savings of if versus could wanted quarters ago, couple likelihood you then follow into Frank, hinted timing and the potential MAP, you that on up for would you characterize on that. program. I on a just year? working And what next to was any programs? would -- new new you're How of you

Frank Sullivan

the that this meaning in our XX, than MAP into have rate don't realized an next achieve year that one I May growth be of communicated fiscal results by in specifics. on other colleagues the MAP annualized program, Sure. we both my original and XXXX XXXX, about we one we this 'XX. this think on run Maybe any full impact MAP in our 'XX would does year would how

million fiscal to 'XX. that And we full so you're going the impact see get not of $XXX until into

the lot mind, running have benefits quarter, per manufacturing of level. conversion benefits an been MAP back in goes XXXX We million at at the and this $XX keeping of about to earlier question, MAP cost, been have a

So volume-driven. it's truly

So get as that of with higher with is benefits SG&A to higher an lower you'll cut your benefits get even across opposed kind lower monthly periods. volume, you're going to volume,

what MAP in growth MAP And fall, in and and that not it's fall. working what because more spring 'XX XXXX it's of process. do, don't we details We on in anticipation work what planning November program planning sometime around And -- there I strategic it It'd strategic be working the see communication on because providing we part to is and more some to finalized. any this call would interesting in And it. did in that we and much have like November be follows XXXX. on did a that provide of my our 'XX on I this anticipate details new know we would will like follows in we event, but part we're would

for map it's need by focus second make. that we real great it we're MAP and QX, the about felt in tell provide into relationship the back will what's that And movement terms we'll you is then doing our details but organization winter, quarter that question to being need of challenge learnings interrupted the more us the good next to growth. in to anticipate I the come pivot in see the embed disappointing a that seeing that was it, culture in performance And and and fall. to we to

Kevin McCarthy

Okay.

Sounds good.

comment Frank. if volume second question, may. a of month I sales you December. there, I'm the about thinking Can two And in your things experience on As

you've anticipate experienced First, about. and or last February? over January weather you've weeks whether that clearly, for that Is something as important the is several talked already you that an variable something

just year-end impacted around calendar all, normal And that a and then the second thing of year? how volumes, would to if destocking kind relative be the at

Frank Sullivan

Again, Sure. Alberta I this month-by-month end you early our other, It's in just shaped the But the that's the could I United quarters the It's It's experiencing the know are after tell the event snow continuing It's been each February weather there's coming get of snowmegettin, would States. results. and horrible performance the a across we media, want in into QX certainly record seasonality by our winter. and of history, November. follow if outlook snow to started at Southeast. in you, on been X that go And winter. hyperbole been criteria. real we it's real I part There's is it's Southeast, clipper in a And the comparison don't can of normal RPM's just third December. on throughout ground. cold to on. the

long sure quarter on hands a we are, in number would around. how in it going ends, of I record you, reflected is as up and that March. doesn't Not if and it to would our to wish our is in this And out have sometime consecutive that QX. QX. I'd work hell results. in something green did, outlook. like weather not the to or it and And that's But if in based plan, but disappointing just window, February like positive a and cards look like the solid XXth we're see feel see be you'll until the results tell will this earnings us we we EBIT grass where be see And we'll pick I can

Operator

Your will Jeff question Zekauskas come next today from JPMorgan. with

Jeffrey Zekauskas

margin was gross was The profit that? sales the year-over-year despite X% lower Why growth.

Frank Sullivan

gross than services and weather-proofing around Construction a WTI but Principally a a business, technology. margin, EBIT solid Products have In pure margin growing lower It's material sales. mix. [indiscernible] our Group, got profit we significant our significantly

was And the it in of Products a year-over-year in businesses, It number mix that's profit. the few And impact Construction Group. our consumer and what essentially mixed mix in was so a biggest of but our places. was other gross flat drove

and are as a can to positive where get for are taking look to last already and performance to to years. couple overcome that of been demonstrating what earlier, margin is coming price the back commented a gross attuned, We we've I that we we anticipate increases

Jeffrey Zekauskas

grow volume term, program some know, In something I below normalized MAP rate? the SG&A. is growth number of to program thinking the or that's the is else? or about the your don't point Or program of point X.X% longer X% the

Frank Sullivan

cycle our are the and really focused aside in efficiency, on results. operating which you can put see So MAP cash improvements initiatives, conversion that

strategic becoming It or our some sales. targeted ago at than our and past where when we of We success spend, or was a pivot back. criticism very were those more at faster to having SG&A so initiatives. growing SG&A initiatives notwithstanding growth you are solidifying could to able some a cutting we rate year After with where a about where organization we're weren't we that, -- year and so weren't of kind focus our see

So of about our the in for growth. we're programs, a cleaning provide consumer market. SG&A I where categories, for new some as higher spring some they're when investing this can would think details these we'll product new spend There's anticipate be I in better we products instance, business. introduce communicators in we some

associated are spends higher that hitting P&L. capital investments We are having our with

a that business, of us For resin Construction we what during vital our instance, acquired earnings was seeing but time. of out terms Group. part Corsicana in We're an was it finally a provided as positive of and it challenging acquisition of production Products that for

our Day-Glo Europe. of in a are We Group in investing Color heavily resin part center of excellence as

when prove be When will SG&A. playing P&L out, them. some those of investments And true, our And areas impact strategic will that investments being so cut in of the P&L the we're our strategic results everybody those our result there's where aren't happy. in we'll very

Operator

Mike Fargo. Your come next question will today with from Wells Sison

Michael Sison

Nice quarter.

on to environment. back what impressive the economic to in a Just volume pretty be seem very growth doesn't XQ, X% good

stay So that and in Maybe how in if improve, really doing the get in to little quarter. X%? amongst get like you your how growth color quarter, well environment, to sounds environment just bit the -- is a of the we is execution doesn't fourth the of fourth if segments. do this It you sluggish little

Frank Sullivan

for MAP. Last earnings we And an with was results a comp. year easier starts us. record had QX It by Sure. challenging driven

see about call talked flat. of we've performance, So dynamics sales solid the do improving. some but we today, were real that And relatively the on

around I think highly forward confident where And commented things Rusty we're in in momentum that so on goes. and geopolitical some uncertainty QX. all the

So what in peers in forward up. some we their who And I of are, that to of our knows confident things outperformance those putting in we're Construction think intend to to launch. relative new Group some we're are of what the impacts product relative the the to seeing but pretty versus relative Products easier introductions comps QX momentum that

So those are dynamics changing. not

Michael Sison

of as cost get you should I [indiscernible] about 'XX years the these the mean, and can And well. you savings volume then you MAP should be follow-up, growth longer would nice. -- in which be about improves, that keep Got of 'XX think should maybe 'XX, environment economic degree, RPM could a actually it. the banner if if term, elevate type pace you one as and and of that of And maybe next to. some think What to sort year

Frank Sullivan

[indiscernible] lot a just fine up everybody. doing, be of best for to the a not what They and love have the sneak recognition on quietly fraction of That's I'd the NBA, it. they all, of in with can first they're Well, record is Cleveland me. getting

get go here, with coming and [indiscernible]. this the I to changes a geopolitical little geopolitical, know philosophical what's out it's all there. but So hard is

there's One so highly a big to And smooth downturn. crazy is a economic scenarios. leads that X meaningful geopolitical mess

a peace other is The dividend.

and growing if somehow And war growth lots is MAP line, continues, resolution would European region marketplace, in so in our really Europe with Russia both a return if in Europe the because in which U.S., is administrations stability the these Europe bottom with and second to in the region performance there's opportunity, in Ukraine, to the of but new very and of the the East largest the a economically, be program Middle our positive. strong U.K.

to comment on investing And our It's India, as the RPM we in there platform sand been the has very and Latin in new stability And we're in world. there. currencies America driven the production the performance South really be East an platform being pretty we're of would developing in that lastly, I'd taking positive results. showing foreign our because underlying solid. Africa, team in approach leadership expect by is part We're Middle strength out a of approach

of terms a in being turn for markets. fire So we've lot the to will Time of tell. got irons in positive prepared

Operator

will KeyBanc. from question Alex come your And today next with Yefremov

Aleksey Yefremov

up wanted to on the pricing. Just follow

year, some positive? raw talking fiscal neutral negative in overall second and are the of you're cost the or inflation targeted materials half in price increases or that second price labor is so to the half of expecting mentioned You it 'XX but you that about, the cover

Frank Sullivan

will that, I a We in what it is is seeing good. we anticipating labor moderating second would of raw said half. and some and the expect If but still it's as inflation earlier, that the less material a even increasing costs function X.X% kind than and of of any, cover will to to it's that. inflation, if accordingly, really X% than anticipation we're that, respond be more If of the

they happen with going people going supply materials, threatened do perspective going and what's anticipating are relative with to are chain otherwise, to what happen I to supply what's think in a and from to raw tariffs. pricing

chain realized to gets in on that of much and our that to something everybody as necessary. . I supply is move positioned think is [indiscernible] how so And

Aleksey Yefremov

mix, just faster? Is services services And mentioned as growth business, also, -- growth it services driving And sales it be the Or grew still contributing. it is Frank, happen you a where something in they're coatings this does in well? affecting to is materials quarter your structural? of and

Frank Sullivan

Products Construction sales WTI, in for work on as It cases, we're the and roof large drives us projects. XX% keeps say, just down keeps In material doing impact the In about maintenance our and those Tremco material us sales. Roofing division, it's Group, the a which subs those it's would for material I So sales our our road, accounts. largest our quarter. contractor XX% it's units, other partner years [indiscernible] and business, years our yes, which is WTI when up services X some meaningfully from the cases, their where ago. ultimately, for In there's opportunities the And the or work, drives connected it immediately general sales. restoration meaningful was the where business do X is having X that material or such X business we're acting that with businesses

That's areas starting And into. margin a to years I would service HVAC few was with expect part to interesting see other that that. Air, that we're an of acquired grow some mix getting which restoration time business is impact. over Pure There's an that ago we grow.

impact. bottom there on like difference line, there's difference And maybe EBIT the in in significant terms that. a margin not whole And time, we improve gross fact, in it, over But a we is can lot the and of margin. of so

Operator

Your come Barrett. next question Ghansham Panjabi from with will today

Ghansham Panjabi

of Frank, summarizing sort So of just questions. some the

well. like going XQ, growth, which PCG course, you Just in some is understand, XQ from stands as standpoint there's forward, a it looks CPG on has and are adjusting obviously there's operating think residential outlook segments. trends your businesses micro basis I there. like different so and it across delivering trend seems for as your And obviously, I'm plateaued do many across of better and volume line nuances solid it a But consolidated today, weather the

Frank Sullivan

that's is in show answer to So the in things, disappointing We the this number saw growth up MAP-related, embedding not a but really yes. winters. that's the growth. to of and But I pivot given outlook, earlier, line in only the hasn't traditional And in been growth of still learnings at seasonality the map of the subsequent process. underlying our the think related of think couple It's in that the pivoting of is winter QX. are suffering factor going we that and of seasonality into to which beginning organization in I business a commented back we months. . And not last trend as are December, be what the we positive. The of weather the seeing off realized in impact were the right culture organizationally, reflected to as we're details for our is our that

And that this period on more so sometime are looks fall. we will what be position to in a our in like what over multiyear provide that expectations detail and a

Ghansham Panjabi

all And question the just you CPG second outlook year drivers XX, on for specifically, fiscal have Okay. where 'XX. then on Slide

substantial in expecting construction, of other high-performance there, is Is that equally construction? call some going positives for that of Or the slowdown is by you're obviously, forward a one et the sort out more infrastructure, office office of and negatives. cetera. it offset buildings You

Frank Sullivan

impressed, our business this our been move is more to particularly to money tell and ourselves for agile [indiscernible] for Construction forces back it's is. have business sales in where adding have been Group No, will mix, you, able our for become I they and an and necessarily. interesting But the Stonhard Products our the have chemical incredibly

up at toppings it was or here if parts strength build-out flooring, share, as Amazons, think, the disproportionate in we're India, this in There's we're we are data fair catch of their And more, out floor getting, of working so world today, I least fibers, to center we like where opportunities distribution Europe. centers not here. because the building whether both share have and in other hard having our a real

forces sales really of and been And doing and hats been to our businesses our that. off a that more salespeople agile combination it's have so

business of And it's core that through overcome some mostly sold the and distribution. -- was

so weak been a to learned would -- relatively growing. building, the direct quite major return is and served areas And hospitality, in benefit. have distribution. past, Tremco those broadly expanding Sealant in a has would the candidly, fast that, products food for office been and that be, expanding for through in last couple our instance, in chains, we've those on to projects What more think, of growth I be are years expanding categories

Operator

Instructions] Arun RBC And question [Operator come Capital Markets. your Viswanathan will next from with today

Arun Viswanathan

clarify to stabilization noted is want have takeaway gains. you in And categories. I you Where seen that of noted just some yes, share of some some you occurring? consumer comments, that also I the your some guess, DIY So

Or market And are you just I occurring. guess us could would if are items? if those that they help So it more other where areas to just you maybe in occurring understand specific attribute housing is recovery?

Frank Sullivan

the in DIY. examples a few Sure. I can you give

related. new product its of Some

introduced [indiscernible] have has foam business a of Texas they wall new product. in in, that GAAP past. way Our the big a They spray category weren't distribution a in expanded

introducing excitement spray retailers, up I [indiscernible] So some them part products these in distribution that some to takeaway product than automotive [indiscernible] our picked market, expanded categories. we some products. you hoped. you're slower channels into and and We're In X we're spray start consumer new automotive to application takeaway getting got of sell-in not introduce into the to [indiscernible] business, starting share in [indiscernible] for the new see going if you're negative we off, some can to of patented have X guess, that is you the it want. of our And a

also segment. then part And consumer our Europe, in of

our One in positive where primers the seeing we're U.K. our being volume European in and a otherwise in as as a in primers U.S. as haven't one, ubiquitous Europe really or into businesses [indiscernible] on it's driven are is they Specialty unit aren't marketplace. punky economic focus and been strong the the consumer few Europe, growth things: places environment by X very of in

e-commerce well. very in what It's And U.K. going pain specialty growing as digits, think And so and parts that's have of double unlimited, it's that was been and but I into is it's direct-to-consumer of a pants. the it launched Europe, And of exciting. we expanded really model

are challenging of underlying so results And dynamics. consumer in the business, those areas our positive notwithstanding the

Arun Viswanathan

Great. Okay.

What cash. Or want X then kind you would M&A. of pockets North category said, you still dynamics on you next, ask Europe? after -- with going focused are sounds some but America, regional as can wouldn't just coming Asia be challenging, months like, further and would interest. as would like, looking America. noted, to in maybe or areas sounds of it maybe to market some some question you encouragement. -- the the more into targets and So of sit be a you it Maybe just be us idle on of There so, provide kind interested Latin And in you I'll say, are underlying you there's reask properties

Frank Sullivan

Sure.

talk world Latin developing and firstly, So I term. it Europe you not likely focused the areas activity our see America, about. to think M&A in would that America, in near the the on be North

are at We product small lines that pretty identifying have good strategic. highly been

we might they be buy nice But in home are IRRs The runs. $X need $XX they if and And so if lines, double or million. product category the can revenues. product our million triple or you could a fit

X% growth medium-sized being lines it's we and number. growth of part it organic that of or X% expand it's distribution in year or integrate an about can drive earlier so small- such X really do organic across X, we strategic to and is sales very forces product And that question, and adding to some thinking our how that about

way that the it. think that's first about So we

some coatings chemical. perhaps specialty and/or there larger Secondly, will be

balance Our value. the had that coming about over of equity otherwise. business some that. I pretty a can X out growth we've think to X have construction of years discipline acquisition strong last sheet is or portfolios We've the private products we accommodate M&A And always or because missed market

in to more goal bigger, better is it's profitable. get M&A and not Our get to

them and they in And we continue good that's opportunities at as as find so balance a we or will we on. and execute got shape, sheet come to look can

Operator

from come will Bank with today question America. Byrne next Stephen of Your

Steve Byrne

a how restructuring focused few of One you you locations. comment items ago? it was accounting accounting the locations And currently on Can have? many on as do what years

Michael Laroche

Yes.

So were when started, in XXXX, I accounting MAP around we locations. we think XXX

significantly locations in ERPs well consolidating the out We've down building in and XX or that done in something work now. and XX-ish as consolidating locations to as India Mexico We work, shared We're accounting a as have reduced accounting well. the range. we've our probably service lot centers our done leveraging of in

Frank Sullivan

those But the Just instances common is to started mid-teens. goal just like given add instances down to we to we but the -- of ERP get far-flung different operations, shrunk Ultimately, sticks could from of XX dramatic have somewhere somewhere a across different finish when least. or that. ERP our SAP, the to goal is some that that mid-single at had or ultimately, essentially down XX that, the number an of it few in from IT initiative, instances. But we digits in our our that, MAP be than some to perspective, improvement in ERP, my XX a versions RPM systems. And more head. that's is what was identified to

Steve Byrne

what net headcount, years Frank, M&A activity? RPM And you total of target right Okay. a would about where what And would at be few now? in

Frank Sullivan

Right now, a it's XX,XXX more. about little bit

there growth ups forces we're Those net-net we've for XXX. since challenging, our Salesforce. and think to good paints area construction been If expand I in it's is that today Coatings of and years of dozen salespeople, to centers, the business think units, through COVID than but for one and X and paid expand last service ago, business product sales Performance are folks COVID and number coatings and the about X themselves. business where to It's particular. we And And had and are years. to products few look been are a construction downs. looking in in shared open winning been has for our or that continue a which we disproportionate for couple more I stable have up some

Steve Byrne

any quick have you that do you any sales for CPG. to and direct Coatings the there, products one see potential similar is, what Performance Frank, in one in into just And moving a you of model

Frank Sullivan

question. Great Sure.

way us On driven allow make accelerate some growth our to that and what's to programs, units to our going to go-forward the I can done best with of to we about us going that efficient. . and if it basis, us a of MAP what's reorganization initiatives changes, we going relates it's back MAP mind part original entirely more XXXX, As think make be organized look as any by the look at forward. at what be organization, groups will to our our business for going you tell to was a

Operator

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

Frank Sullivan

much, you Thank very Nick.

is I wish December and And General growth Ed the by a want our wife, participated of someone was than conference which new great success. RPM adventures. He growth more and Senior who and on his as President our and of years and and more part retired Tim for joy conclude and their recognizing Moore, we of to significant conscience Ed who for family, XX Counsel was XX. than in Vice RPM's So XX, all calls our part of

RPM's keel who's RPM the General Crandall, to same joined Counsel, stable, even wisdom kind by right approach and on Tracy are today path. we of the new going bring keeping And to

welcome, So Tracy.

and in day. RPM. in the then beyond. interest our April, to about of talking growth and a to in a again days. talk we'll quarter, for all third and everybody, call to you return wishes conclude Best a throughout to in couple be look happy, participation your able and you, successful your forward for Thank new And year, great next Have QX to we we today our and healthy when

Operator

attending now today's concluded. Thank presentation. has Conference you for

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