RPM International Inc. (NYSE:RPM) Q1 2021 Earnings Conference Call - Final Transcript

Oct 07, 2020 • 10:00 am ET


RPM International Inc. (NYSE:RPM) Q1 2021 Earnings Conference Call - Final Transcript


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Ladies and gentlemen, thank you for standing by, and welcome to the First Quarter 2021 RPM International Earnings Conference Call. [Operator Instructions]. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions]. I'd now like to hand the conference over to your host today, Mr. Frank Sullivan, Chairman and CEO. Please go ahead, sir.

Frank C. Sullivan

Thank you, Liz. Good morning and welcome to the RPM International Inc. investor call for our fiscal 2021 first quarter. Joining me on today's call are, Rusty Gordon, RPM's Vice President and Chief Financial Officer and Matt Ratajczak, our Vice President of Global Tax and Treasury, who is supporting our Investor Relation activities.

I'll share insights behind our strong financial performance for the quarter as well as an update on our MAP to Growth operating improvement program, then Matt will walk you through a review of our first quarter adjusted financial results. Rusty will conclude our formal remarks with our outlook for the remainder of fiscal '21 after which we'll take your questions.

Our strategically balanced business model, the resiliency of our operating companies in our MAP to Growth operating improvement program have enabled RPM to pull through the depths of the economic slowdown, created by the COVID-19 pandemic. With the dual benefit of improved margins and better working capital management, our businesses are generating excellent cash flow which allowed us to pay down nearly $200 million of debt during the first quarter.

Today, our liquidity is up to $1.5 billion. We have pivoted back to investing for accelerating growth as demonstrated by the acquisition of Ali Industries as well as our strong organic growth in a number of our segments in the first quarter. During our fiscal '21 first quarter, selected segments of the global economy began to gain momentum as stay-at-home orders were relaxed. This freed pent-up demand from last year's fourth quarter and helped drive our record topline results, which grew 9.1% over the prior year period.

This was in sharp contrast to the COVID-19 related sales decline we reported for the fiscal 2020 fourth quarter. Our two largest segments posted positive growth in the first quarter, while two of our segments declined. Overall RPM's results benefited from the positive impact of our MAP to Growth operating improvement program and our balanced business model where strength in one segment offsets weakness in another.

In addition, much credit for our strong performance is due to our management philosophy, which keeps customer centric decision making at the operating level and enables our companies to be very nimble and adapting to change. Some examples around RPM of leaning into the pandemic's disruption include Rust-Oleum, tinting wall paint and shipping to residents through a new e-commerce program hosted by a big box home center. Tremco developing innovative indoor air quality services with a global MRO distributor for use on its customer's facilities and our Legend Brands business pivoting from disaster remediation to disinfecting and air purification in response to evolution of its contractor's business needs.