RPM International Inc. (NYSE:RPM) Q1 2024 Earnings Call Transcript

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Frank Sullivan: Yes. I think the expansion will come from our continued market share gains, broadly roofing. But the areas that will expand like a Pure Air are where we can add value. So we can add significant value versus replacement. And so we’ll look for other opportunities but they’ll be limited to areas where we can truly add value as opposed to areas that are more commodity-like in services. And I think it’s critical and it’s back to that component of it’s not just the service, but it’s adding the material element or the cleaning or disinfecting or blade repair components that go along with it. One other factor, which is also true for our Stonhard flooring business, and the reason that we got off to a rough start in the first year of Pure Air was staffing.

I think anybody that is doing any work in residential or commercial and industrial construction, workforce issues are significant. We have solved that issue with Pure Air with our WTI roofing workforce. We have a great collection of installers with our Stonhard business. And so that certainty of having our people on the job on time, staying on the job to get it done in this environment is also getting us a competitive advantage in the roofing and the HVAC restoration and in the industrial flooring markets.

Stephen Byrne: Okay. Thank you, Frank. And one quick one on Nudura. Do you see the value proposition of that product to be more in, you know, its insulation value, thus either cold or hot climates, or more for its hurricane tornado protective value? And how are you marketing that product based on those two value propositions?

Frank Sullivan: So the simple answer to that is yes. It’s one of the most energy-efficient building systems for residential and commercial structures in the market today. It’s got its unique characteristics that we continue to have to educate people on. But it’s also one of the most durable residential and commercial structures today. So for instance, we got approval for Nudura specifications for schools in Kentucky. And that was, in part, a direct result of a terrible experience they had with a tornado a few years ago. The durability of Nudura in hurricanes is also becoming well-known, and so it’s a combination of the energy efficiency for people that are looking for net-zero buildings. We completed the first net-zero school in Kentucky a year ago. It’s not just the new Nudura piece, it’s other building components, but — so we can deliver that and the durability in the face of expectations for more climate-driven weather events.

Stephen Byrne: Thank you.

Operator: The next question comes from Josh Spector of UBS. Please go ahead.

Frank Sullivan: Good morning, Josh.

Josh Spector: Hi. Good morning, Frank. So, thanks for taking my question. I wanted to ask on group pricing overall and maybe if you could drill into the segments a little bit more beyond Construction. I guess based on what you’ve given, I mean, it seems like price was up 3.5-ish percent. Our math at least is on a stack versus a few years ago. Second half last year, you’re tracking about 30% pricing multiyear stack. This quarter implies maybe about mid-20s. I’m not sure if those numbers are right with your thinking that there has been a step down sequentially or not. And just curious how you think pricing would trend in the various segments based on that information through the rest of the year.

Frank Sullivan: Sure. And we don’t provide that detail by segment. But on a consolidated basis, we’re in the 3.5% range. So, you know, across our businesses, you’re seeing price impact in the quarter that might be as low as 1.5% and might be as high as 5%, depending – and it’s really not by segment, it’s by product line and really driven by raw material issues. But on a consolidated basis, we were about 3.5% price in the quarter.

Josh Spector: Okay. Thanks. I mean, I guess the crux of my question more is, is there any sequential step down in pricing in any of the segments? Or is that math may be incorrect?

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