RPM - RPM International Inc. (RPM) Q3 2024 Earnings Call Transcript

2024-04-04 18:00:08 ET

RPM International Inc. (RPM)

Q3 2024 Earnings Conference Call

April 4, 2024 10:00 ET

Company Participants

Matthew Schlarb - Senior Director, Investor Relations

Frank Sullivan - Chairman & Chief Executive Officer

Michael Laroche - Vice President, Controller & Chief Accounting Officer

Russell Gordon - Vice President & Chief Financial Officer

Conference Call Participants

Lucas Beaumont - UBS

Frank Mitsch - Fermium Research

Michael Harrison - Seaport Research Partners

John Roberts - Mizuho

David Huang - Deutsche Bank

John McNulty - BMO Capital Markets

Michael Sison - Wells Fargo

Aleksey Yefremov - KeyBanc Capital Markets

Jeff Zekauskas - JPMorgan

Stephen Byrne - Bank of America

Kevin McCarthy - Vertical Research Partners

Ghansham Panjabi - Baird

Arun Viswanathan - RBC Capital Markets

Steven Haynes - Morgan Stanley

Presentation

Operator

Good morning everyone and welcome to the RPM International's Fiscal Third Quarter 2024 Earnings Call. [Operator Instructions] Please also note that this event is being recorded.

At this time, I'd like to turn the floor over to Matt Schlarb, Senior Director of Investor Relations. Sir, please go ahead.

Matthew Schlarb

Thank you, Jamie and welcome to RPM International's Conference Call for the fiscal 2024 third quarter. Joining today's call are Frank Sullivan, RPM's Chair and CEO, who is dialing in remotely today; Rusty Gordon, Vice President and Chief Financial Officer; and Mike Laroche, Vice President, Controller and Chief Accounting Officer. This call is also being webcast and can be accessed live or replayed on the RPM website at www.rpminc.com.

Comments made on this call may include forward-looking statements based on current expectations that involve risks and uncertainties which could cause actual results to be materially different. For more information on these risks and uncertainties, please visit RPM's reports filed with the SEC. During this conference call, references may be made to non-GAAP financial measures. To assist you in understanding these non-GAAP terms, RPM has posted reconciliations to the most directly comparable GAAP financial measures on the RPM website. Also, please note that our comments will be on an as-adjusted basis and all comparisons are to the third quarter of fiscal 2023, unless otherwise indicated. We have provided a supplemental slide presentation to support our comments on this call. It can be accessed in the Presentations and Webcasts section of the RPM website at www.rpminc.com. Additionally, as a reminder, certain businesses in Asia Pacific that were previously part of the Construction Products Group are now being managed and reported under the Performance Coatings Group effective June 1, 2023. As a result, all references to CPG and PCG today reflect the updated structure. The recast businesses generate approximately $100 million in annual sales and this change has no impact on our consolidated results.

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

Frank Sullivan

Thank you, Matt and thank you to everybody for participating on our call today. I'll start with a high-level review of our third quarter results. Then I'll turn the call over to Mike Laroche to discuss the financials in more detail. Matt will then provide an update on the balance sheet on organic growth investments in emerging markets and Rusty will cover our outlook for the balance of the year. At the end of the prepared remarks, we'll be pleased to answer your questions.

I'll begin on Slide 3 with our third quarter results. In addition to our strategic balance and focus on repair and maintenance, positive momentum with our MAP 2025 operational improvement initiatives continued in the third quarter which generated our ninth consecutive quarter of record sales and EBIT results. Margins expanded and we had our fourth consecutive quarter of record cash from operations. During this trailing 12-month period, we generated $1,260 million in cash flow from operating activities far exceeding any previous 12-month period in RPM's history. Much of this has been driven by improvements in working capital which has been a particular area of focus with our MAP 2025 initiatives....

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