RPM International Inc.

Good morning, and welcome to the RPM International Fiscal Second Quarter 2024 Earnings Conference Call. All participants will be in 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. To ask a question, you may press star, then one on your telephone keypad. To withdraw your question, please press star, then two. 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 caller, 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. The 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 second quarter of fiscal 2023 unless otherwise indicated. We have provided a supplemental slide presentation to support our comments on the call. It can be accessed in the Presentations and Webcast 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 reporting under the performance coding 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 consolidated results. At this time, I would like to turn the call over to Frank.

Thank you, Matt, and welcome to everybody joining us on our call today. I'll start with an overview of our second quarter performance, 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 and the recent opening of an R&D facility, and Rusty will cover our outlook. At the end of the prepared remarks, we'll be pleased to answer your questions. Starting with our second quarter results on slide three, we generated our eighth consecutive quarter of record sales and adjusted EBITs. While revenue growth was slightly positive because of softness in certain end markets, we continued our trend of good margin expansion led by our MAP 2025 initiatives. This resulted in double digit adjusted EBIT growth, which is squarely in the guidance we provided and in addition to the strong growth we generated in the prior year quarter. The MAP 2025 initiatives were also a key reason we generated all-time record cash flow of $408.6 million from operating activities during the quarter. Enhanced collaboration between commercial and operational functions means we are now able to respond to customer demand more quickly without having to build large safety stocks as we have done in the past. And this is having a positive impact on working capital. Through the first six months of fiscal 2024, we generated $767.8 million of cash flow from operating activities, which surpassed our previous all-time fiscal year record. Turning to slide four, sales were led by our construction products group and performance coding segment, which benefited from their focus on repair and maintenance, as well as their positioning to serve strong demand for infrastructure, reshoring, and high-performance buildings with their engineered solutions. Volumes declined in the consumer and specialty products group segments as demand in DIY and specialty OEM end markets, particularly those with residential exposure, remained soft. Both of the segments have been pressured for the past year as individuals have focused their spending on travel and entertainment and existing home turnover has been at a multi-decade low. Pricing was positive in all segments and helped offset lower overall volumes. Despite these challenging end markets, we achieved another quarter of strong margin expansion led by our MAP 2025 initiatives. Margin expansion was strongest at the construction products group and the performance coatings group, which both generated positive volume during the quarter. This demonstrates the potential for our MAP 2025-enabled margin expansion and our businesses underperforming when volumes begin to grow again. As a reminder, second quarter growth was in addition to a strong quarter in the prior year period. The two-year stack growth for sales and adjusted EBIT was 9.3% and 50.6%, respectively. Moving to slide five, I'm pleased to report that the changes we recently made to our management structure are showing good progress. In Europe, new management teams have focused their sales strategy and implemented MAP 2025 initiatives to grow sales and expand margins. In Africa, Middle East, and Asia Pacific, which are now aligned under our performance coding group management, our businesses are realizing the potential of increased collaboration in our operations. Sales in Africa and Middle East grew 13%, and Asia Pacific increased 6.4%. And we're realizing operational synergies that are leading to even greater profitability growth. Overall, I'm proud of our associates' performance in the second quarter. We're executing exceedingly well on the things that we can control. And the hard work we are doing on MAP 2025 initiatives is enabling collaboration, efficiencies, and cash flow that benefit us now. And I'm optimistic that we have even greater opportunities in the future. I'd now like to turn the call over to Matt Schlarb to cover our financial, I'm sorry, Mike LaRoche to cover our financial results in more detail. Mike.