RPM International (RPM) 4 Jan 242024 Q2 Earnings call transcript

Good morning, and welcome to the RPM International Fiscal Second Quarter 2024 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Matt Schlarb, Senior Director of Investor Relations. Please go ahead.

Thank you, Gary, and welcome to RPM International's conference call for the fiscal 2024 second quarter.

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

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

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

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

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

annual businesses a approximately reflect the Frank. time, I'd recast PCG the over all $XXX turn references call today impact As structure. change to The million results. to and updated has this At this result, CPG sales, in no consolidated and generate on like to

I'll quarter of of adjusted will pleased on and Slide second We quarter R&D an with EBIT. start our Matt to the outlook. of an the turn your generated overview record discuss X. Matt, we'll to I'll be then to Mike more opening on an recent sales remarks, prepared consecutive Thank At facility, call our everybody balance with on welcome in the detail. to and cover questions. Starting today. our us financials Laroche eighth Rusty results you, over the sheet our update performance, provide second joining of answer the call the then will and quarter end our and

addition without end commercial functions in demand markets, activities margin the from by growth, the we double-digit fiscal year Through past. growth While and operating customer all-time strong positive quarter. The positive impact revenue resulted first growth during our reason between in good And slightly our have was quarter. MAP record. we build working respond large continued previous prior led initiatives. capital. we done provided softness safety as generated in squarely we are MAP This stocks to were activities, XXXX adjusted collaboration this more Enhanced having EBIT also trend quickly means certain is which of and key operational the able of in $XXX.X because to to which million the XXXX we the operating to of having of now surpassed a in we flow record fiscal all-time our of in months million cash the $XXX.X initiatives guidance a on XXXX, from cash flow is X generated year we generated expansion

benefited OEM Group buildings were their infrastructure, segment, serve strong to focus Sales on their Group Products solutions. pressured positioning strong markets, well a maintenance positive led we X. offset lower margin by Slide these for helped existing of has Construction by and individuals overall exposure Despite been have Volumes spending been and expansion Performance home as of in Coatings those multi-decade their the all as in to demonstrates remained led margin DIY turnover end expansion as from Turning generated have end which to at residential MAP and particularly Both segments at grow quarter the Coatings Group again. demand our Products the past Construction underperforming XXXX when volumes. reshoring soft. Specialty and MAP demand which declined with volume Group initiatives. positive XXXX in the Margin and especially and low. Pricing travel our Performance This businesses engineered begin focused both those segments enabled high-performance Products the challenging repair quarter. was on in and expansion achieved our another year markets, their Consumer entertainment and potential volumes was with the during for and strongest as for segments our

a growth growth quarter X-year quarter The the to and stack in XX.X% was As year in X.X% was a period. sales adjusted prior EBIT strong reminder, second respectively. for addition and

can we now. us -- Schlarb, Middle Asia to financial we pleased financial I'm cover the even strategy Laroche cash Matt and X. showing Performance growth. are In Mike proud to work realizing expand I'm we Sales our cover Europe, sales on under in our have operational East changes their exceedingly to In control Pacific doing and MAP and to is enabling are we're and of opportunities to XX% implemented grow businesses that profitability the Overall, like in executing our of are the now focused optimistic that collaboration associates' And progress. call flow We're initiatives to performance well report detail. and sorry, more and increased our and East I'm initiatives Group management, Pacific, XXXX are the things that even now Africa, efficiencies quarter. Slide the teams our second made that operations. and our new are aligned which sales have margins. to Moving recently to results in benefit MAP to the collaboration, I'm Middle grew in greater our realizing synergies the XXXX Africa, over good X.X%, management leading greater that structure Coatings Asia increased turn in future. I'd potential we management hard Mike?

consumer Group cycle, of and by percentage pricing the in health Group. SG&A Group initiatives the quarter of fiscal interest and Specialty the -- favorable Consolidated Coatings and during XXXX additional the fixed to benefits, sales Starting Frank. the Products Improved the MAP reduction X. the Group and as including the sales grew Performance like higher-margin are wages, Group. Expense actions reinvest were the increased in XXXX of taken volumes Higher Thanks, the Construction at second and offset areas to at expenses a SG&A. to Slide benefits on EBIT basis end which of to a second and slightly products increased weakness increase, XXXX. commodity $X.XX market we gross points with adjusted Products grew limit as Construction long-term Products to debt and and FX Performance positive margin growth drove Inflation XX.X% margin offset taking added MAP also as and Coatings cost we gross incentivize XXX contributed care quarter EPS driven expansion. SG&A record at savings of improvement. end EBIT being sale increase increases services. by an mitigate was in actions Adjusted helped rates in paydowns. adjusted half in growth increase by the is and and leverage

and projects Group renovations demand also particular with by QX to to from They results wall and continued market high-performance as increased sealants segment cladding. Slide infrastructure strength well admixtures, benefited led in The new concrete Construction X. on gains. Turning benefit as share which from achieved for and sales reshoring record buildings, the Products both

from to XXXX strategy, sales, focused a MAP this As is Europe. is increased led cost Adjusted Frank more Europe mentioned, largest and sales higher our includes benefits. quarter fixed second which leverage segment improved benefiting record and in CPG, EBIT a by

East reduction As a strong result second in in performance, driven Coatings for gains. restoring Slide management and of at the leverage quarter. fixed the XXXX turnkey put fiscal growth recently Pacific by market by place end systems the businesses variable resulted along segment's segment's expense all financial This PCG compensation projects were benefits demand record the cost engineered increased Middle the EBIT the aligned and share strong X, during actions improved with the all-time Performance offset The adjusted under to Asia quarter volume flooring heavy and MAP partially contributed due capital of activity in in generated and to achieved record sales was growth. Africa, Group XXXX. On

did continued sales also actions excludes doors, reduced remained fiscal year one particularly in the weighed investments not residential exposure end disaster The related of XXXX. will Ian Florida, initiatives divested offset last EBIT on X. adjusted unfavorable as weak, also including in markets $X the by Hurricane shortly. end have Specialty fiscal SPG of note Slide Group faced to in repeat windows the from to and and EBIT in Matt XXXX. demand reduced and legal noncore business volumes declined furniture, the declines, long-term to furniture adjusted adjusted those comparisons partially in challenging The which were investments about which growth adverse reduction of EBIT period cabinets. resulted million year deleveraging business. sales, to a benefited Please at the to a ruling an for implemented which response expense warranty expense Moving segment specialty housing, fiscal OEM margins. that growth restoration the when Products prior strategic talk divestiture that business

projects entertainment consumer retail travel house from volume spending were time Turning at more their cautious with as with Market retailers inflation share they to by was focus pressured increased turnover in up current and customers, catch levels, also to hit volumes. the XX. group pressured and limit labor takeaway pricing the international The DIY Slide and as Certain inventory lows. soft gains, stores on material and housing and than markets around multiyear which strength helped declines. prior rather

increased in quarter consumer This EBIT prior to as prior Despite the to adjusted EBIT. consumers sales strength primarily over challenging generated the year when period. reminder, was addition still strong challenging due record growth achieved markets, MAP faced increased XXXX end a and benefits in second in in markets comparisons and As international was XXX%. year adjusted XX.X%

turn an to cover the I'd balance Matt, the investment provide to and flow call cash like Now update. who sheet, over will

Thank you, Mike.

XX. Moving to Slide

improving capital, from prior improved inventories, from cash second to with year $XXX combined flow our activities continue levels. of quarter. progress make significant decreased all-time on in through resulted the We record lower profitability, in working primarily million This, million $XXX.X an which operating

have the record. to $XXX.X consecutive our of in of flow X we achieved our This dividend repair accomplishment our claim. returned other shareholders been spirit, of October, only strategic our economic in publicly on balance which mentioned, of has grow fiscal million and has companies traded XX-month cash surpassed maintenance entrepreneurial focused and previous And year through Year-to-date, fiscal cycles. year first XX increasing Frank and months year our can we us throughout sustained cash dividend all As dividends. XXth are growth help our by enabled the

totaled which repurchases, We returned have share additional to million also to cash date. $XXX through shareholders

have Finally, rising debt helped end future to And XXXX, mitigate we the continued year. the impact have the of $XXX provided debt of opportunities. repay second rates lower than of of the million quarter total flexibility take advantage at These to debt. and expense is interest on prior repayments

XX. Slide to Moving

we'd accelerate new state-of-the-art Greensboro, facility themselves. accelerated Mike to investments of innovation. our Center highlight local segments the the R&D scale businesses long-term We facility at Innovation Carolina. for not investments, run RPM, Excellence. making can the growth, help the ribbon do of or located is that share by drive mentioned, some important cutting comprehensive smaller in multiple RPM As North its talent is recently a businesses those This kind are and particularly to lab this one This to of resource first like of collaborate where have to and on our

Group multiple facility businesses all their prime segments Innovation expenses. it, is of Also, a solutions to in candidates from to Products and overseen need Center utilize visit to control being which find can by they are firsthand the to showcase and customers, equipment will challenges. we businesses duplicative eliminating collaborating long-term as are by serves Additionally, see X of labs, our sharing we Excellence resources, many Specialty ability have The their already today. to because but there the

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

Thanks, Matt.

to that's clear. the million, repurchases clarify, so we $XX just start, year-to-date Before just are share

which XX% inclusive results on comparisons. CPG quarter. Europe, third Slide margins. I'll investments actions an sales in half growth. and to to corporate outlook, are market adjusted the on adjusted and EBIT level, flat quarter outlook. On are SPG which, year markets. by to benefit less and consolidated adjusted is of also will go DIY we expected the prior result us record segment share as strength for reshoring EBIT year also period. I'll This PCG continued OEM in QX over seasonally of focus which is trends short-term or are Market businesses prior benefits, and SG&A be maintenance growth sales see efficiency the to our specialty record repair The and is focus gains to to making Now of and in [ driven slowest with area expected ] share XXXX to XX, and in challenging limit that year from you to are to prior we are and EBIT me, add outlook offset is and QX excuse taking in I XX% including as growth continue weigh on the the CPG -- second in at projects. by a weakness from growth accelerate building contribute our On increased spending expected the their on expected can and reminder, and international consolidated MAP are infrastructure, high-performance Market our our year. similar gains expected markets to is

are in levels. the not we sales turnover in inflection housing demand range. We to hovering have an multiyear point increase in In near mid-single-digit seen expecting low segments both with SPG,

result, Consumer, expected as digits by be we mid-teen decline to sales single DIY is the to expect expect offset gains. demand to In a sales range. decline in by As percentage partially share market low soft we

and due outlook softness our OEM are DIY markets. XX. sales lingering to we the for expectations lowering And Moving our year specialty the full Slide on in year to

and EBIT sales year low expectation a the the Despite reduction in mid-single-digit prior in single-digit for we good the XXXX outlook, progress achieving the is growth benefits growth. outlook sales as versus make new range Our to of a continue material our MAP maintain cycle adjusted we raw our double-digit commodity the while pricing. This capturing This prices remarks. affirming overall concludes of we low are growth includes are range. in to result, benefits outlook the from as prepared decline, mid-teen

answer to pleased be your questions. now will We

comes today [Operator with Instructions] Capital BMO first Our Markets. McNulty question from John

So consumer to into I dig little wanted bit. a

bit So it X%. little a down was north of

it the for pricing because the up Your in it digits. across was doesn't expectation you businesses. It priced like original got quarter low look was single all

young How peel on versus the in -- So volumes? help I you can kind little us much how it guess, just down you some maybe share us speak you're that of for And then that you seeing? little offset of was back destocking also, some a much bit the of can as a well? bit was and takeaway that the on to quantify consumer gain had

X%. price basis, than the slightly quarter consolidated a On in Sure. was up less

that X low in consumer the see changing until peers single terms mid-single-digit But don't And are consumer that's paint this X consistently been minus volume. little minus month it's after digit, so you sense, comparable that consumer. should I consumer it's give our would possibly less that negative of outperforming takeaway. POS a of in a over to directly just a note And we bit last spring. month we a And months.

seen highlighted retailers, when the I about the think an couple of was some at because a think you've business Okay. destocking issue. of that you in And you that

guess where you retailers, they these as normally far say guess, of be where paint of kind spring at characterize would you are As bigger would inventories going I that? of Are would or season? into some the about beginning how the below, they're they I

normal. back think I to they're

supply within people and last our of efforts in throughout absorption. chains, we do quarter the cash overhead time RPM. and this would terms and really readjustment expense customers significant at the execution in a year, our flow but seen this and of as efficiency exceptional. talked focused last we XX months, that that's also about operating noted You've on And RPM both -- to with the is profitability we so happened the of Last

record We have XX levels in $XXX flow by generated the almost cash last over period. reduced X-month the million debt of months. We've

Our X by is cash cycle XX versus ago improved conversion year days. almost

well. are And executed so being can things control we very that the

we're think I happy that. really with

you in As as third on to sense essentially a good of able to XX% a we've generate XX% is the growth year, to sales expectation the made. gives the you're be seeing last EBIT same quarter improvements what

I maybe Got that, it. one in. makes if actually, one squeeze sense. can No, And last to

MAP a from You of was saw how some versus think guess, out that about I environment. us of much soft of versus was pretty improvements? where some And be can can notable benefit to to margin us you guess bucket I the lift parse volume mix raws the improvement then real maybe improvements. despite in? coming help just But guess, would that help the price third you general some I

and the cost our the million raw mix will in beginning XX-month we spend summer. as an $XXX price in up, to things summer, cost use of We consumer we be and positive the QX. to like in CPG can material, is first positive for And XX- we've businesses in I'll cost that normal these Over inflation in you of example. cost quarter. and increase going most in way as and raw in PCG relative the Sure. went price of just consumer starting we in absorbed margin, material our catching in price to mix be that. lose an efforts back labor positive see price time time higher third the we'll consumer mix, margin period, about And been cycles,

in the Group -- I and when same PCG also leverage start we've performance. unit we expect Coating Performance think positive our generating we in volume. in and the once CPG Specialty you And strong Products Consumer Group, got can sorry, see volume would the I'm

next Huang Bank. with David is from Deutsche question The

end to project by delays of are guess or seeing I cost their Are guess you And delaying just because the specific on projects talk approval because government either and construction reshoring. in people about XXXX you any slower of lower infrastructure markets? expectations? construction, trends seeing you're can I

project tend related not be Construction we have experience the in weather in way Products delays the We the seen to in on particularly much that delays the of would Group. project --

And and other when manufacturing the government so pretty this some actually far, commits a trillion happens it like that there. happening. shape renaissance is of we're of feels is what there stimulus good and $X in infrastructure

major are the that's in onshoring And and on some specified particularly we technology coming. so projects, area,

of You're that suppliers. follow-on seeing the with

the mixtures, And business pretty XX% and/or Roofing about Tremco coatings, just for and space that ad good high-performance our our nuclei a sonar a of is with, as so flooring, million reroofing we're chemicals chemical in reminder, lot $XXX business. instance, a Carboline Also, is of construction renovation. and

And so commercial construction to the we're not there. very exposed cycle

so doing really that's And well.

Lastly, we of a that asset of have well. strong renovation and management that Pure industrial our and including HVAC been some business as commercial some couple ago, systems, and is showing business acquisition the areas, moving of refurbishment years HV with an and into Air, growth is really

much Okay. was quarter? during Got peak? then when on costs deflation I material do expect you it. raw how guess, material, And the the raw to And benefits

Sure. want Matt, do to that? you take

Yes. Sure.

materials second So the about in down we raw quarter. X% were --

are other the particularly category things, down. TiOX product other little labor pretty brought But in the like varies was up packaging and down was raw XX% up, were materials Propellant some Now about X%. average were up. like it going That by overall metal things bit flat. like still and a consumer acetone segment,

fiscal think the third of we raw that we'll of a deflation quarter in XXXX. probably material fourth So or sometime hit peak

from Spector The next Josh UBS. with is question

on So follow SG&A. up I the comments just on wanted to

half some in second the X% inflation year-on-year. talked some that the and about driving first that half. to items about reduce your is discrete actions in So

half your how SG&A into carry are that for fiscal inflation? what second So And does expectations 'XX? then

Sure.

air particularly And lesser in are our in that millions round of see position today. establishment one the there half we performance quarter being wood to You to the Matt finishes a of as we are been in at center. dollars of Brands a we specific things really capture the in a market to environment. the those of investments particularly performance handling, tens in Coatings should the their Nonetheless, We of of rate equipment year year, the areas our been which exposure investing fourth indirect year. in there, some and as there. about, has part direct to turns. good second a last SG&A talked market of number group committed It's Specialty committed in R&D business last of growth our we to a terms are investments grow and group. to our new to it's of relationship in good Legend committed hasn't or Their tough humidification when housing, because areas mentioned

new categories in have spring. coming we're Oleum DAP our most significantly share seeing consumer well some some investing some and been new group. as We And market recapture products placements product in spray of this

savings would Yes, one the other what and we've We about been add harvesting spending separately. guess would other -- opportunities. track growth in reinvesting growth is investment So very add deliberate I yes, between balance we I future MAP I one that. that believe to thing

difficult we something dime And cut soft where little get a a to of our economically, could happen turns the so landing SG&A of of tens millions quickly. more and on if dollars to pretty turn point the ability into

if That's helpful. forward. I of And carry that kind

you're cost investment. excluding realization prior remind you're to you the more? that the us to comments MAP running on your Growth fiscal investing 'XX, can calculus your is in maybe of movements material increased and versus Has price less expectation is same those and the expectations because raw of realized it savings in for So savings the previously? that Or

I'll But what details numbers same. Sure. in programs our of you on Matt investment communicated. essentially let are the terms give the we the

not have cut haven't while things of in increased we've the the been MAP so that doing stage, been they terms At they in program. this back. And also

a a the a to good across bit in of -- of when with in initiatives we growth a harvest gets stronger. to of number economy goal committed little position the are So number being

masked still million. rate had of basis to a those related the that. lower-than-expected track on actually thing benefits of The being Yes. And P&L a savings $XXX communicated absorption $XXX We're and and savings, in run from lot is about MAP for the those rate we under of we've by are prior a million calls, volumes.

is question with from Jeff next The JPMorgan. Zekauskas

how case, likely much base to up is this variable be a As year? compensation

don't disciplines that things we some associated of our exist that compensation businesses, of compensation addressed specifically, Tremco structures but didn't in more Group programs and and have margin. CRM that that part pricing we before other have we've such our replaced a and terms know Roofing some I Construction of number number with commercial in old variable Products with in

part in so And increase of that's glove the increase in margin with hand profitability. SG&A, gross which the goes in

in it And remarks you general you over year think the some demand make United might businesses? on next the progresses? your change months can in as on And outlook your how the States XX various

Sure. in Back to Group Products the of be Group, slug areas long what Construction continues huge well and that we're we Performance a really Coatings with positioned have positioned stimulus to federal to the serve. been

consumers, X last the since The business so stage in into go the fiscal particular, start their new 'XX months homes great. interest into rate model both people aggressive the low interest if directly and will you you that items negative And And impact projects of it's rate terms direct in in I the of we're Mike of new over on windows, or the XX of first industrial And of then housing industry housing which, across on in seeing goods, go the wood interest consumer headlines to the halt stores, been trim. services. finishes. by look mean sell We turnover, we're model not whether impact negative markets if next where also December they're out being some you their of the the back largest declining Fed home Group, performance It's mortgages. results. maybe terms boom our of a most they're more did those in a read campaign months. then market, we better of and redecorating. rates have side, messages they're headlines, construction, indirectly by think said, that of last coatings, as wood year, because homes, COVID and that our I Specialty Products stuck there feel pretty think And had people the because about in suggest And spending there. in history good is Fed unit but the rise I on produce lot

you're environment the going see to and the the we'll at rounding as think in activity activity. consumer in same easier I housing both improvement interest comparables. improves, And rate time, be significantly

And so that improve finish as Specialty market, are housing and just if you're rate both interest well numbers if modestly are new terms turnover of we in to in our up this, to Products in our both Group. construction, as our to DIY we seeing a begins pick environment an improve, going consumer see businesses

The from Stanley. next question is Vincent Andrews Morgan with

you lumpy have completed, in there sell-in Could for infrastructure activity of terms in and maybe to into a how you it's on some your -- talk a particular along this products little how lumpiness potential business on? insight enough that's bit about we you're -- we're sort that far of a of a And the is little be that in reshoring going or the spec-ed volume are these projects bit benefit to suite your -- projects off same business? more? about should Or very hand orderly do projects as another you have to of this think those

put ground. manufacturing a Back onshoring mini shovel specified In Yes. in some feels the because earlier they haven't my projects. a we're in these even larger a lot while like to on of comments, cases, we're renaissance it being Sure.

we're capital multimillion road. now add industrial pretty solid What projects could some to seeing is And our suggest. they number and be larger that's some just so down will on lumpiness share that the dollars, market results, being a But as you for in only not hard gains Group, provide supply been targeted we stone point but our with products, the Cooper our a in of new labor. preference because some Performance we but terms instances two construction there's material, to Coatings products spending flooring the

Tremco So Roofing turnkey for competitive a WTI That's The been in provided same a thing us. where an business in business. labor has we environment our advantage is do project challenging. our with true

both Coatings the our And Stonhard helped so of Group division a of us in having labor elements and in a has competitive advantage. Performance also Tremco component, from

a up consumer, any are volume where facing foot either encourage challenged, to in the might price as retail more traffic? partners then or And promote spend media of things type is ad any that or to areas follow-up, you from like your or step pressure

across We're for and here Sure. RPM price reductions modest there. from customers facing pressure businesses

template, mentioned, costs We our over of And or -- we an seeing costs. terms it As XX- frustratingly, are XX-month around There was acetone couple silicones. over tariff absorbed categories to -- the that meaningful other metal in to have are hit material directly one like still inflation. specific and material or a I the consumer, chemicals some remains about of of raw that's segment like rising broader million absorbed largest resins have some epoxy, raw which not period. cans reduction, goes that chemical $XXX some experienced items that

Mike is with question The next Harrison Partners. from Seaport Research

made some just, improvement better Middle you've Maybe on again, you on. business, to it construction like the benefits you've that Europe was detail related more the could some you the seen the some strategy saw focused to that detail and your East I Frank, and Africa Pacific in more where a And in that come. hoping additional Performance little Asia maybe sales in coordination bit and business Coatings more on give us you the changes there's going in the there. sounds improvement expect

from to gauge actions? you confidence more your around much those wanted Just have could legs how

great it's Sure, And sure. a question.

of in we're we what our efforts it on Europe. Group And executing Construction segments, progress and XXXX he's his in President first, with were Coatings between our progress all providing Europe. made to South to in to MAP a of the in -- leadership of our President Most pandemic. to to America. the focused oversight on we've the Group had step our was and MS-XXX North XXXX the in simplest tremendous senior have MAP But COVID focus, direct done MAP way getting think Products a we -- those by particularly developing out Group. oversight interrupted there. think recall our you small, And of our Growth they've couple COVID I many job. Africa, And we Growth leadership a world. far in Performance years too coordinated exceptional Group back program. got Europe. and the Growth Performance Coatings program, operating locations of with call X team Post MAP about improvement an the of lot is of consolidated operating early Likewise, we first cooperation good 'XX, and our uncoordinated of interrupted had family at the So relocated the We But with across initiative and away the

it's X Middle allocation, as the Africa, of point, that Certainly, good oversight of getting We're in and the under books right products. Asia, benefits. places in eliminating of by approaching addressing we're the costs we of that. asset so places. you'll East in every now at IT X the in consolidating people group, recall, and our so XXX real finance, -- RPM, not month, accounting we're by the And are all and in redundant India, closed But market right more We're we're terms as Southeast having we in systems, products.

all first we're really I'll that in markets these in had so went a really The pretty say involved that the positive we Europe, the is And strong performance last in U.K. quarter. was recession. a into a thing of impact. The have had major the

Europe so feels there. there's well. is activity And say it some doing spending particularly I economically not like would Continental

on good and is the initiative overseeing what would it. of call MAP leadership self-help the ground I on most senior to Growth there European So you're what with a seeing execution

And to a inventory really flow. you your QX your that's done particularly then about look trying up segments, and think and period But the specialty look be as we're we of and across showing guys production point? in as fixed managing are obviously, QX. rates capital, and in at job All in the get cost working the have that kind internal this levels you need cash into pickup through nice Just they business then of right. where consumer to moving seasonally at should spring maybe absorption, in slower how kind

-- cycle. quarters the cash in earlier coming It incremental this you year, months and over XX coming recall, be we last conversion and will again, that days years. There the as particular more And smaller in that is mentioned up in effectively. be improve in generating doing call, because, coming there capital. the improvement will the but days we very quarters I the operating Sure. the working XX to picked for underlying inventories XX another we on we've as tackling our almost time there last been in room There's not and pick up, about talked incrementally to is us efficiencies,

from with is question Mike Sison next Wells The Fargo.

that group the anything point happen? could indicators, to that, confidence an are what the could consumer for for you you you could give looking see -- see looking mentioned maybe you maybe think spring. or you Frank, you're to any What inflection that do in

Sure.

spring a time introduced we which We've and X product. new introduced the X-component year. think essentially prior season. X It's highly anticipated typical selling I last product. component DAP Rust is strongest the get a Rust-Oleum single need in months, We this our to spray that into replaces Stops a

of So picking prior little bit a lost We're number up we've product also year. share from areas. market got a the new of

Consumer Group. is some bit, others to it new up of particularly some going in be so to see as of relates and a picks placements economy product Products to And little Specialty improvement if that a going it it sense be and you'll turnover, the our housing is

home an Products our involved turnover, in turnover, have lot months. and last a a fix at maintenance DAP. then people has selling at when activity are for been lot except economic in more for and new reminder, and and We're the housing housing know Specialty I buyers of lesser indicator extent, that Group redecorating a new us, lows particularly of call you construction, of the not on multi-decade As the repair up repair all that for home a and a think this, XX and is the to directly activity, construction. over you of But lot maintenance of

just Got improvement guys. sort a this. quarter? from you the of some of would I it. apologize the -- a then new some in pricing if be suppliers. What back They lot I -- quick fourth third then home their want there the are did And of And to the inflation and missed get follow-up. some think

handle the for like years? decreases. sounds in you several they're are sort ways pushing there that the to some price How that achieved pricing of other of last it over you the So do keep really consumer group? And

as margin. do it think pricing much Yes. don't I about I so as

anticipate it a the cycle negotiation to product goes margin category management like with quite or it And with The during industry. much I QX. are in some part activities few introductions, frustrating areas a don't Some what's don't to exception attention consumer, price your there I is the way question, QX the be in of the There's tinplate. tariff of around -- paying commodity of activity. of have I new think with in along of along add this item. might happening in It's some people goes the consolidation finally that some with customers. to big we that earlier candidly, lost recapturing

paying So areas there are a couple that attention to. we're of

anticipate QX of But the will across that we whether QX. tell. speaking, price don't way additional broadly or time RPM, price in in drives Now or much not, increases

Aleksey from Yefremov is question KeyBanc. with next The

is want piggyback the off to pricing Aleksey. of This last kind there. just question Ryan of on for I

both about on new trending and projects bids So CPG for is wondering you I pricing how if was can PCG? in maybe talk

across more have be So epoxy few or the businesses, We spaces resins tend exceptions, held very exceptions in general, commodity in RPM to price line participate silicones. striping around most we and sensitive and basic tend and coatings to that chemical be materials. more that are bridge they related raw little underlying the work to and have more tends price highway because a directly to

about business. held just the this guys are here color still then up can Obviously, maybe great. And Is seeing Okay. talk and maintenance growing? any repair Or it's well. in That's you relatively be would what you helpful. business

holding up Absolutely. It's really well.

that You which that Construction repair also Group. then seems that The and Performance can our Coatings And Group. capital industrial our maintenance. in vast impacts Products is see pretty also to be solid, of spending, majority

we're earlier, mentioned of the I who talk acquisition last nice customers the and our on their pushing, response growth of opportunities, seeing a have to Pure X an we didn't that component. roof, equipment? question for mentioned couple we them their to as and calls, years, up we're Tremco When help with some So that now. do we answer other there. in I And many can years ago really was And HVAC in WTI to we're services many, Air

we're roof I on new about about this same roofing as pretty time, sell just more we for over look components an the other materials think same able more purely a it. sales with as And business. to we'll the force. asset maintenance as opposed management, and/or business think we're excited So opportunities sell to asset business And

with Byrne The next question is of Stephen from America. Bank

R&D to more at the do segments? that segment multi-segment new expect and more the you Frank, effect have one technology will do with collaboration Is a down the between was increase on curious maybe segments? seeing another? the more there that in it between to of any commercial I various any you're respect center center changes responses the benefit of And you between innovation Or specifically, primarily from in to them? North cross-selling think from across whether transfer level Carolina,

recall, was if about disciplines decentralized of That's company X with to a the one independent and entrepreneurial. our a MAP question. functions relatively great from of going thinking original program areas. a RPM One to elements remaining perspective key is And in you and Growth holding

The middle other centralized be and is would one then the center-led.

original to Growth meaningfully. our the effectively have of a program. across big element that's helped procurement was MAP us That We centralized RPM

for the XX our we a we are a smaller And We and are center-led manufacturing about playbook instituting common the globe, on facilities. manufacturing and original across closed but Growth program, in We'll MAP continue, facilities operations, to basis.

And particularly better R&D really was incremental closures, that there's few recognizing asking in us a our see the Europe. of and You'll across to our collaboration center for related our opportunity born an businesses. activities operations

in take industrial time the best to think it's about excited take advantage or it for at look think what really practices. cross-fertilization I to be but XX be recognizing going to pretty sharing can RPM I So to technologies going be company it. It's into collaboration. play, of can instance, can much sector realized, we it consumer independent formerly what centralize to We're XX sector. of with units pretty And trying a center-led hand holding goes that from as will glove an to be and with

that Presidents a in Group job words, and X it's leading Our their of positive very the doing organization way. collaboration filtering and extraordinary of their through actions an are in down terms

we that that was As Obviously, to activity. the I would by execution said, the results in good. expect things I really economic will come. of -- this I control impacted be underlying quarter more of the And

continuing having you just as sufficient bit might with just Are cross-selling to maybe view reevaluating that with little I thus, a and you Are maybe way? segment wanted growth ask about not that your no for either businesses some potential this for or specialty potential would group. divestiture? other cross-selling. be you businesses any maybe for they targeted potential And in there there in

the We're a look challenges resin Group. ways, Corsicana and success having expect We've same our some regularly over but business, our many and Products Europe in control in possibility opposite. Construction we our benefits gaining we've key that Texas. type Europe excellence DayGlo MAP huge divestitures And polymers program, But Sure. It's you a regularly, great the some It's 'XX we're going the tell to chemical leadership had question. chemical net our had materials. and taking create then teams plant with with some center working of with we we're in bought DayGlo a in this in of those divestitures at of in part I raw that can Board. of from just

there's next know, swings the that have really steady new efforts that complementary more And will is opportunities the pretty you or M&A for state year look the real from divest. been focus And management next. has Products we some Construction as weather the you X allow business to already MRO, dead. in of if spiked business as Legend events a there a market the to X Our with Brands But will, that to that at regularly all to asset group opposed as quarter their our business.

on or we'll back and and up, And the come have that so valuations both interest come whether the side, see sell and -- buy down activity M&A on the it's to ways. rates side plays

Fermium is The Research. with Frank from Mitsch next question

Happy I up uses If -- beg could that of begs it cash. follow about your just does on last the question on the kind New question Year. of thoughts

M&A your XX the versus if the your thinking ] bit. buybacks M&A markets that I don't signal guys there, made thoughts discussed about about just at these levels? a [ And overstated. know are little that are You was to comment today a I buybacks before increasing try your you buybacks? slip and What

gone to question stock XX So indicated how successfully. debt. payout in be we pay throughout from my continue. years be we've common, We've dividend But mid-XXs. our more has very would buybacks we dividend. aggressive the cash a you of buyer a every get from the buying our opportunities boy, flow by to But year have will perceive we back a permanent we career relative a cash Frank, I when of year. we will might that been focus value. dilution are on look it have about at think if in increasing committed quarter pretty ratio and along And mid-XXs more level and with it down as our over done you. to ago, with regular -- that to by talked And then quarter we generation, the here, higher quarter, to been strategic we

and continue dramatically, be relationship of in to better at our has position some sizable right to acquisition we opportunities and/or stock buyer flow a regular see unless stock, the program value. dividend a our we're our cash increased in Our buying

they would in fiscal item? last year I that this made of fiscal I the MAP on 'XX. thinking Very Got have could program fiscal if are were guess And come about fixed unabsorbed And unabsorbed fixed helpful. comment was are than it benefits less the costs interplay materially fiscal you thinking believe earlier, or costs you. I you. masking back I the what between for of kind How was the XXXX Matt that be and that year

Unfortunately, you're They Coatings in and have we quarter, as of than hoped less volume in not When this going our see we the as and a leverage quarters Performance of MAP in Products seeing had benefits. it's second to real be Products fiscal on Group or we're not today's the growth, 'XX because nice and call, half. our as in covered Group. the volume to of leverage. which Sure. yet line recovery Construction much the be we going Specialty expectation see of a future consumer you're seeing in original to coming, bottom you'll should good 'XX because strong Group But

is from question Research with Partners. next The Vertical Kevin McCarthy

If It geography. XX% to at looks that to negative average Slide A there's a doesn't question in your it on look X% sales X% very seems a be X, quarter. factor look disparity large by was currency what I your mix an between North like America big me and of this positive to overseas.

those how you And well X to why curious, most doing or U.S.? the see I'm so we'll you quarters, maybe speak overseas can you're continue view in sustainable think that to in growth important overseas, and the So be? might future do faster drivers your what X versus are

Sure.

a Europe. it organized Europe we're particularly focus to better better what call, So Think of a as just I Kevin, is that the commented earlier Map Growth for on seeing, in and approach.

a more businesses. And comps, markets into went bunch that recession the a rounding efficiencies other also driving having of there. some we particularly sales easier are of in our the And so focused that we most U.K. effort We're lastly, we're a then serve. in before

We what positive a having and platform call real developing the world organized a in we it's for also effect. approach

Group, we the in will lot and quarter probably is that Hopefully, but So would world will and in North different would world the growth solid than year-over-year of not plenty going a really here, we to America see to some rest in see. unless of Consumer expect there in QX, be again, you Europe coming of because of disruptions. in in flat change of is a negative a the see I Specialty further the growth Products disruption that type the that and

outlook Guardian when And business Frank, divested helpful. level down you I Specialty and That's Okay. had follow cognizant step then higher-margin to margin the the the you up on discussion wanted I'm that Can speak Products. to regarding a there. there, you

it First target do And would of half XX%. current can years? have running segment of you you a the looking think How seems the level couple that margin to the we out year, be trajectory normal? for How versus a there? characterize about X%, likely

a Yes, economic million better that's EBIT a should generating environment, there Group EBIT great an they've And was And Specialty question. been a slightly margins. The before. but we business higher Guardian margin, Products be the to outsized business. Products was pain yes, that $XX do. mid in

few things. to synergize growth. don't mid-teens a now we opportunity Products that within earlier we so Specialty And in expectations can at then future. I'm look group be that very are this a years to Products mid-single will recovery we our Specialty of if advantage to in pieces or an it question, RPM's few the mid economic -- an to taking We're back a get I'm there. But confident there, sorry, get would group double-digit of back take And EBIT relationship

The with next question is from Ghansham Panjabi Baird.

Year. New Happy

due the to guidance, specific segments is back in sales it is to? just offset Can going more sort your guidance of 'XX. cost? maintaining clarify Just just the price year And purely what favorable you lower consolidated incrementally fiscal segment for EBIT or

versus favorable shut significant overhead asked a absorption from when earlier, production year Frank is inventory tackled and down number places. mix Mitsch last 'XX as we our And guidance EBIT a The of No. MAP improvements initiatives. price/cost in some really better

inventories. done getting my finally candidly, career about very to So capital, we've getting basis. in around improving rightsizing working XX after been aggressive a talking it on years And of quite sustainable

executing been And our it's and that's So we're focus. happening.

is margin that. excited improvement 'XX mix, price of in we're our finally combination about of So turned the cost fiscal and which program this EBIT a year operations. the MAP But positive the benefits

majority of areas we in are key to 'XX and a number there. It's the on incentivize of of that is relative the vast related to conversion terms MAP activities salespeople of how costs focused margins. One commercial to initiatives the things that

is margin So the sell you which it gross impact realize impact don't mostly something. means until a you

into really an your like annualize divide over can cut and units. it's -- not you you over as SG&A So move by flows P&L a that It annualize XX year.

in of a the I ups zoom 'XX theory, Okay. And this terms base of in supply chain should of that you the then et the business, consumer in better over year? year impacted base year, rates. at the mean, at downs then, with but in kind cetera, if there's on the that, Are I and a should rates out, point case course, year. years you mean, and What the been of markets is shortages, volumes? for obviously, be be interest base and RPM expecting last calendar lot -- from interest COVID last

Sure.

X. you're maybe asking about on starts which I 'XX, fiscal think June

ago. in XXs the X rates across true board. the Our was years are back high fill not That

shut at And inventories time the we'd season. and a last January production for We adding February are first inventory in spring be year, in sell lower my inventory. of into big typically to career, to levels where rightsize down

gotten in the to ability we we've have as safety our size stock. manufacturing that same agile more so much So don't have

those need are that they have fill we So to are improvements rates But be. made. the where

need the retail real that of just us particular. do. the And help because be. can with of of do for opportunity will seasonality chain they most I the inventories, projects the part, in we back or in supply drive this our customers, stores, to the business need first into to think spring think them that the help And to where consumers for they be

of expect the the leverage not to weather third any where the certainly is in third of but surprises some good we businesses our our see seasonality quarter, we expect consumer see group. of because industrial revenue You and quarter

next question with Viswanathan from RBC Markets. is [Operator Capital Instructions] Arun The

Year. New Happy

strength see kind wanted the maybe and I little of just restoring your switching with the be So kind just you of tale outlook. in of Products calendar kind more PMC. Construction we half I line It sluggish, looks of a maybe back infrastructure thinking? Would that here that's back if sales with X with just Products it's into like to in start a to bit consumer more and move that guess, cities Specialty first go may 'XX, the up, of while I'll as see drives and group

'XX our we of dynamics lines spending the to and industrial business manufacturing are improve focused resurgence whether the well on Construction thing talked we're stimulus those No. continuing terms in expectation, second that a get most in fiscal companies. and again, with product a OEM will to growth businesses We it's Group of 'XX think have very we're had operating we infrastructure not had certain in think half and that the segments a that well. as the positive Group the difficult bills return and not where housing about should manufacturing and done earlier capital growth and to in in Coatings Group Performance and QX go fiscal in of fiscal seeing very anything And some solid Products that coatings that's unit I last units Products for consumer increases into or alone is leverage year that in There have Specialty has exposed year volume we're And touches out having to of construction. challenge. a a residential in tough most of our and

mentioned 'XX. you then And it. Got fiscal

see are EBIT of need the couple factors that put cards? performance? But that would on you targets the points the we're MAP to basis there? that bridge to still that level maybe to getting of XXXX I we now. What see margin some realize of had an what's previously hundred basis below kind XX% maybe of that margin. of annual right Do I you think think out some adjusted in a

Sure.

think target on I that. for we're

when I we think but whether our that in unit and when talk results on Group, the about see the Products MAP growth XXXX pretty of fiscal on positive is program. we we'll end frame consumer the appraisal in depends we time our can have achieve that of that of the July balance year, in or fourth we our which release 'XX quarter timeliness robust and within a communicated the Specialty the turn

Within particular portfolio are wanted And just you but to just see that -- of ask any is likely offered kind maybe again. comments, of I likely may going? have lastly, you not just I review How think there this recover as question any candidates think some the areas are you to businesses, and for divestiture? the

not back question. Yes, your at this Sure. but to earlier time,

or elements XX% XX% EBIT level mid-teens which margin of from of specialty key about getting group a whose today. a in the products that to EBIT level group margins X% up or One the higher slightly consolidated is is are

needs be not there, consolidated recovery that, it. XX% will and significant we goal. on the there to hit So a focused Without we're

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

and appreciate We your in RPM. in you. morning hard their XXXX. interest fiscal associates work for also call everybody's dedication for Thank our tremendous participation investor continuing their our I'd thank in this and to like

happy, at And and you you call. it our you, lastly, and wish a day. and new results. Thank level, We We prosperous can high have see the on all to in are great a year. a healthy executing

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