RPM International Inc. (NYSE:RPM) Q3 2023 Earnings Call Transcript

So, a great home for our Guardian Protective Products people and an exit, which generated $50 million of cash in total and a nice gain in the quarter, which we obviously carved out in terms of our adjusted results. That was part of MAP €˜25. We took an impairment charge related to our USL business in the quarter. And you saw that as well. That was also adjusted out of our adjusted results. But we looked at that business and there was a contracting component of that business. It did not make money, and we are working with a couple of parties to sell that to a UK contracting business and hang on to the high-margin product lines areas there. So, the net result of that will be a reduction in revenues, but an improvement in profitability and margins.

And so those are two examples that we can talk about because they have happened already of structural changes that we are looking at as part of MAP €˜25, and there certainly could be others in the future.

Arun Viswanathan: Okay. Great. Thanks a lot.

Frank Sullivan: Thank you.

Operator: This concludes our question-and-answer session. I would like to turn the conference back over to Frank Sullivan for any closing remarks.

Frank Sullivan: Thank you to everybody for participating in our investor call today and for your questions. While we had a challenging quarter and we are being somewhat conservative about the outlook for our Q4, I think we are actually very excited about the actions that we are taking, both in our MAP 2025 initiative specifically and then also understanding the impact of the inventory in particular, but working capital adjustments that are necessary to get our inventory levels back to where they should be and get our cash flow back to where they should be. And those actions are good. They had a negative impact on gross profit and profitability in the quarter, and we will do so in Q4, but they are one-time events that we will get behind us in the next couple of months.

So, we remain excited about the activities that we are taking and its impact on our margins in the coming years. And we look forward to providing you more detail on fiscal €˜24 when we release our fourth quarter results and talk about €˜23 year-end in July. Thanks again, a blessed Easter to all on the call to you and your families. And thank you for your participation and interest in RPM. Have a great day.

Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.