RPM International Inc.

Good day and welcome to the RPM International Fiscal Third Quarter Earnings Conference Call. All participants are 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. To ask a question, you may press star then one on your telephone keypad, and to withdraw your question, please press star then two. Please note today's event is being recorded. I would now like to turn the conference over to Matt Schlarb, Vice President, Investor Relations and Sustainability. Please go ahead.

Thank you, Rocco, and welcome to RPM International's conference call for the fiscal 2026 third quarter. Today's call is being recorded. 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. 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 risk 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 for the third quarter of fiscal 2025, 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. As a reminder, certain businesses that were previously part of the specialty products group have been reallocated to other segments effective June 1st, 2025. As a result, all references today reflect the updated structure and prior year figures have been recast accordingly. This change has no impact on consolidation. Now, I will turn the call over to Frank.

Thank you, Matt. Thank you all for joining our investor call this morning. I'll begin with an overview of our third quarter results, provide an update on how current events in the Middle East are impacting our business, followed by Michael Roach, who will cover our financials in more detail. Matt Schlar will then provide an update on cash flow, the balance sheet, and how our focus on maintenance, restoration, and energy efficiencies has helped us during these volatile economic times. And then finally, Rusty Gordon will conclude our prepared remarks with our outlook, after which we'll be happy to answer your questions. Beginning on slide three, we generated record results in the third quarter with top line growth, including higher unit volumes, translating into strong earnings growth and improved margins in all segments. The RPM associates are executing at a high level on the things that we can control. The economic backdrop remains volatile during the third quarter with some of our geographies experiencing severe winter weather. We successfully navigated these challenges by focusing on our competitive strengths, including turnkey and system solutions for high-performance buildings, a focus on maintenance, restoration, and repair, and a nimble sales approach that targeted expanding end markets. Aided by the operational improvements initiatives we put in place, we were able to leverage this growth to achieve a nearly 50% increase in adjusted EBIT. With this quarter, we have delivered record-adjusted EBIT results in 15 of the last 17 quarters. Turning to slide four, we previously talked about the power of RPM, combining RPM's ability to outgrow our markets and improve operational efficiency. This was on full display in our third quarter. We saw positive results in the targeted growth investments we previously shared, and the profitability of this growth was amplified by the operational improvements we have and continue to put in place. These include actions like our Green Belt program, which has now trained over 600 RPM associates and has expanded to administrative functions. Green Belts have generated more than $50 million in savings, with $30 million in our current pipeline. We have also started realizing benefits from the STNA-focused optimization actions we announced last quarter. These actions generated approximately $5 million in savings during the third quarter. The optimization actions underway go beyond expense reduction. They're designed to make our organization more agile, better positioned to serve customers, and to achieve accelerated growth. All segments have begun this transformation with some of the most meaningful changes occurring in our consumer segment. As announced in a press release this morning, we promoted Don Harmeyer to president of the Consumer Group. Under his leadership, the Consumer Group is reallocating assets towards its highest growth opportunities while maintaining strong financial discipline. Our center-led procurement team continues to do excellent work leveraging our company-wide buying power to achieve savings. They have played a critical role in navigating new supply chain challenges caused by current geopolitical activities. Turning to slide five, I'd like to address the conflict in the Middle East, its impact on our business, and how we are responding. Recent geopolitical events have created supply chain disruptions and increased raw material costs, which, as a reminder, represent approximately 60% of RPM's cost of goods sold. While the conflict is having a global impact on cost, the effects are being felt most acutely in the Middle East, Africa, and the Asia Pacific regions, which together account for approximately 4% of RPM's year-to-date revenues. In Europe and South America, which represents about 20% of sales, inflation has picked up meaningfully. North America, at 70% of RPM sales, has also experienced inflation, but to a lesser extent, and remains the region most insulated from the direct effects of the current conflict. Having navigated significant supply chain disruption and inflation in recent years, our teams are prepared for the current environment. We have contracts in place covering the vast majority of our raw material volume requirements. These contracts help ensure continuity of supply during periods of disruption and reduce volatility from underlying commodity price movements. In addition, our use of FIFO accounting delays the P&L impact of cost changes, providing us additional time to respond. Previous actions, such as qualifying multiple suppliers for key raw materials and developing strategic long-term supplier relationships, have further positioned RPM to manage through the current challenges. As a result of these efforts and the execution of our center-led procurement team, supply conditions generally remain good for us globally. with only limited disruptions primarily in the Middle East. We currently expect raw material inflation of approximately one to 2% in the fourth quarter of fiscal 26, increasing to an estimated mid to high single digit range in the first quarter of fiscal 27. While the situation remains dynamic, we are taking appropriate actions to mitigate cost pressures and consistent with prior inflationary cycles to begun implementing price increase offset inflation that we are unable to mitigate. These price increases vary by business and by region, with those experiencing the most inflation also having the largest price increases. Finally, I want to commend our procurement team for their strong execution, both in the current environment and through the volatile tariff conditions we've experienced over the past year. I also want to thank our teams around the world who continue to focus on serving our customers during these challenging times, and particularly our associates in the Middle East where safety is our top priority, they have continued to operate despite the many challenges facing that region today. I'll now turn the call over to Mike LaRoche to cover our financials for the quarter in more detail.