RPM International Inc.

Good morning and welcome to the RPM International's fiscal 2023 second quarter earnings conference call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions, and please note that this event is being recorded. I would now like to turn the conference over to Matt Schwartz, Senior Director of Investor Relations. Please go ahead.

Thank you, Cole, and welcome to RPM International's conference call for the fiscal 2023 second quarter. Today's call is being recorded. Joining today's call are Frank Sullivan, RPM's Chairman and CEO, Rusty Gordon, Vice President and Chief Financial Officer, and Michael 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 second quarter of fiscal 2022, 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 Webcast section of the RPM website at www.rpminc.com. At this time, I would like to turn the call over to Frank.

Thanks, Matt. I'll begin today's call by sharing commentary on our consolidated performance for the second quarter. Mike will provide details on our financial results, and then I'll turn the call back over to Matt to provide some business updates. And then finally, Rusty Gordon will conclude our prepared remarks with our outlook for Q3. After our prepared remarks, we'll be pleased to answer your questions. In the second quarter, we continued to build on recent momentum to deliver both record second quarter sales and adjusted EBIT. This represents a 10th consecutive quarter of record revenue and four consecutive quarters of record adjusted EBIT, an impressive accomplishment in today's uncertain economic and volatile climate. An important factor in achieving these results is our MAP 2025 Operating Improvement Program. Across RPM, associates have embraced MAP 25 principles of collaboration and efficiency to successfully implement initiatives and help drive top and bottom line growth and performance. MAP 2025, which officially began at the beginning of this fiscal year, is off to a strong start, and we are on track to meet or exceed our first year EBIT target improvement of $120 million from MAP initiatives. This hard work was evident in our second quarter results, where we achieved strong revenue growth as well as significant adjusted EBIT margin improvement. Importantly, we achieved these positive results despite meaningful macroeconomic headwinds, including intensifying weakness in Europe, FX headwinds and a slowdown in some of our end markets. Turning to the next slide, revenue growth was broad-based with all four of our segments achieving record second quarter sales. This was accomplished primarily through the implementation of pricing increases in response to continued inflation. We also generated volume growth in several of our businesses that benefited from continued reshoring and infrastructure spending, as well as from improved material availability. Importantly, we not only generated strong sales growth, but also expanded margins to achieve record second quarter adjusted EBIT on a consolidated basis at three of our four segments. This was driven by the successful execution of margin enhancement initiatives across the organization. The one outlier segment that did not achieve record second quarter adjusted EBIT was the construction products group, which was most acutely impacted by macroeconomic headwinds because of its relatively outsized exposure to Europe and to new residential home construction in North America. Looking at sales by geography on the next slide, Europe is clearly the laggard among the regions we serve, with sales down nearly 12% for RPM and unit volume down even at a greater rate. This was driven by weak macroeconomic conditions, including persistently high inflation. Additionally, FX weighed heavily on our results in Europe. FX translation also negatively impacted our sales in emerging markets, though we still achieved healthy growth in these regions thanks to the hard work of our associates to align our businesses and products with growing end markets and to successfully increase prices in response to cost inflation. Demand in North America remained strong through the second quarter with growth in all of our segments. Growth in the region was fueled by price increases in response to continued inflation and strength in our businesses that serve customers who are reshoring manufacturing to the U.S. and that serve infrastructure-related activities. Better material availability also contributed to organic growth in a number of our businesses in the quarter. I'll now turn the call over to Mike LaRoche to discuss our consolidated and segment financial results in more detail.