RPM International Inc. (NYSE:RPM) Q3 2020 Earnings Conference Call - Final Transcript

Apr 08, 2020 • 10:00 am ET

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RPM International Inc. (NYSE:RPM) Q3 2020 Earnings Conference Call - Final Transcript

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Executive
Frank C. Sullivan

have been informed by 14 of our 15,000 employees that they have had, at various times, confirmed cases of coronavirus. In these cases, we enacted our protocols to shut down the affected location, have them thoroughly cleaned and disinfected, quarantined all appropriate -- affected people and then reopened the facilities following an appropriate shutdown period.

In terms of our communities, we are working from home, monitoring the hygiene and health of our manufacturing and distribution associates and reporting any infection or disruptions. We are also donating time and materials to help stem the spread of the virus. In one case, our wood finishes Group supplied thousands of plastic bottles to a local distillery that has been converting product to hand sanitizer and is providing it for free in the community, especially to healthcare first responders.

In another case our Rust Oleum operation sourced it's Concrobium fiber product and donated it to first responders so that their air ambulance helicopters could be disinfected and returned to service quickly. These are just a few examples of how our operations are responding to local needs.

As one of the world's largest suppliers especially coatings and building materials, RPM is in a strong position to weather the toll that the COVID-19 pandemic is having on the global economy. We are taking action to adjust our business activities during this period of uncertainty and are well-positioned with strong cash flow, a solid capital structure and $1.1 billion in liquidity. Many of our products are used for construction, maintenance and repair projects which are deemed essential in many cases and are relatively recession-resistant. RPM companies around the world, with a few exceptions, have been able to continue to operate their plants and distribution centers.

In fact, today, nearly all of our North American plants are operational, with a few exceptions, while a number of our international plants have been closed due to government mandates. A large number of our North American customers such as those in construction, infrastructure and DIY home and hardware retail are also considered essential and currently remain open for business. With people spending more time in their homes, there is potential for increased DIY activity projects.

Raw material cost inflation seems to be moderating in a number of our key product categories. Our global supply chain remains strong and our distribution and operations associates continue to work diligently to meet customer demand. We continue to be proactive in taking actions around the globe in our operations as the situation evolves.

Now I'd like to discuss our MAP to Growth restructuring program. It has steadily been gaining momentum each quarter. This quarter is no different as demonstrated by our excellent bottom-line results, strong organic growth, strong earnings leverage and record levels of cash generation. Restructuring activities include enacting operational improvements in our production facilities, consolidating manufacturing plants, delayering management and rationalizing product lines.

During the third quarter and early in the fourth quarter, we announced the closure of two additional plants, which brings