RPM International Inc.

Good morning, and welcome to the RPM International's Fiscal Fourth Quarter and Full Year 2023 Earnings Conference Call. All participants will be in a listen-only mode, and should you need any assistance during the call, 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. Please note that 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, sir.

Thank you, Joe, and welcome to RPM International's conference call for the fiscal 2023 fourth quarter and full year results. 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 review 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 fourth 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. Good morning, everyone. For those following the slides, I'm going to start with slide three. We'll begin by discussing our high-level performance for the fourth quarter, after which Mike will provide details on our financial results, and Matt will provide a balance sheet and business update. Finally, Rusty will conclude our prepared remarks with our outlook, after which we'll be pleased to answer your questions. Starting on slide three, you can see that in the fourth quarter, we generated the sixth consecutive quarter of record sales and adjusted EBIT on top of the strong growth we achieved in the fourth quarter of last year. Importantly, we achieved these record results at the same time we generated record fourth quarter operating cash flow. In a time of economic uncertainty, we prioritized cash flow generation over P&L management, which resulted in cash flow from operations of $314 million, primarily through initiatives to normalize inventories and benefits from our MAP 2025 initiative. The strong cash flow allowed us to reduce debt by nearly $140 million during the quarter. Moving to slide four, the agility of our businesses demonstrated played an important role in achieving these record results. As an example, several of our businesses repositioned to focus on engineered solutions for infrastructure and reshoring projects, which are the fastest growing sectors in the construction industry. Our strategic focus on maintenance and repair Our differentiated service model and the agility of our sales teams to find pockets of growth helped offset a decline in other new build construction sectors where volume declines were compounded by customer destocking. We have also improved our operational agility through our MAP 2025 program so we can quickly respond to demand changes. In our consumer group, our customers were holding leaner than normal inventories heading into the warm months of when demand usually picks up. As is typical, there was an increase in consumer takeaway late in the quarter, and we were able to quickly fill these orders. Destocking was the driver of volume declines at our specialty products group, particularly in businesses serving OEM manufacturing. We faced additional profitability headwinds in this segment from continued cost inflation effects and initiatives we put in place to normalize our inventory, which had a particularly pronounced impact on the SPG profitability. Turning to slide five, looking at sales by geography, sales growth was strongest in emerging markets, where growth ranged between high single digits to high teens, despite foreign currency headwinds. These regions are investing significantly in infrastructure, an area that we are well positioned to serve. Europe declined nearly 2 percent, but excluding FX headwinds, Europe grew in the quarter, the first sign of improving performance after more than a year of challenging economic conditions. Despite the challenging second half, fiscal 2023 was a solid one for RPM, with sales up 8%, driving adjusted EBIT up nearly 19%. We finished the year with improving results in our construction products group, and in particular, the Trenco roofing division. Improving performance in Europe, The challenges of supply chain disruptions and customer inventory destocking mostly now behind us. And finally, an improving cost-price mix dynamic with major raw materials cycling down from historic highs. These dynamics indicate a strong start to our new 2024 fiscal year. I'd now like to turn the call over to Mike to cover our financial results in the quarter in more detail. Thanks, Frank.