Aleksey Yefremov: Frank, just to come back to Consumer, I guess, how should we think about potential volume recovery or snapback? Is that volumes are down low single digit, so you’ll get that back and then maybe the market is growing low singles or whenever that comes or is it some bigger number?
Frank Sullivan: No, I think it’s a steady return to normal Consumer takeaway combined with the volume driven by some new product introductions that Matt just talked about. We don’t see any huge snapback per se but we will be rounding easier comparisons as we get into fiscal ’25 when we really started to see Consumer takeaway. I think some of this is a long tail rebalancing from the boom in COVID. And I think some of it is the simple fact that in manufacturing. And again, we’ve talked about this in past quarters, while broadly speaking, perhaps we’re avoiding a major recession. The manufacturing sector has gone through a rolling recession. Anything that touched housing has gone through a rolling recession and things that are driven by housing turnover have gone through a rolling recession.
So we see that in our core Specialty Products Group that manufacturers wood, paints, finishes and things that go into kitchen cabinets and doors and windows and RVs and all kinds of things that are housing related. You can see that in other companies that manufacture goods that are in there. The housing turnover is starting to perk up which is a good thing for both our Specialty Products Group and our Consumer Group. Because housing turnover tends to drive some of our Consumer takeaway. And as was noted by just a few months ago, broadly, we’re at a 30-year low in the United States for housing turnover. So that’s been a challenging dynamic. I think all those things are moving in the right direction and then you’ll start to see what’s been consistently over the last fiscal year, negative Consumer takeaway in the low to mid-single digits, slowly turn into a positive number in terms of unit volume that would be low single digits, be nice if it was higher but there’s no big boom that we foresee in terms of some huge snapback in volume.
Aleksey Yefremov: And then across your product lines, not just in Consumer but to have clients like Nudura, there is probably more optimism around new residential construction, not immediately but later this year or into even next calendar year. So in these areas, do you see any more optimism as far as your product takeaway or backlogs or anything like that?
Frank Sullivan: Absolutely. We are performing really well in our Construction Products Group. Nudura specifically was not immune to the decline in residential new construction and the negative impact of interest rates both on construction and housing turnover. So that product line was hurt in last year. We’re seeing those products, the Nudura products and projects grow. It was principally a residential product when we acquired it 5 years ago. Our Tremco Construction Products Group is now successfully targeting Nudura at the broad North American school market and we’re having some successes there. So we’re expanding what was primarily a residential new construction product line into some more commercial markets that we’re excited about.
Tremco is also relatively unique between Nudura and Dryvit. And the Tremco Sealants and putting together what they call a One Tremco package where they are working with architects and engineers to actually have specified an entire wall system. And so instead of having different components from different manufacturers that have different warranties or no warranties at all, we can put together a complete wall system and warrant the entire wall performance as opposed to individual components. So those are all dynamics that we’ve been working on and they are making good progress and momentum. And I think with a return of new construction residentially, a return of commercial construction which has also been down pretty significantly in the last 12 to 15 months, you’ll see even better momentum in our Construction Products Group.
Operator: Our next question comes from Jeff Zekauskas from JPMorgan.
Jeff Zekauskas: Home Depot was buying SRS sort of building products and they have Specialty and Roofing. Is that something which is positive for RPM, or negative or it really doesn’t matter?
Frank Sullivan: I don’t think at this stage, it matters. We have certainly good relationship with Home Depot and they are our largest customer. And so if there’s opportunities for us to explore what that might mean, we’d be excited about it. But as I just mentioned relative to the previous question, most of our products are specified into schools, into universities, into hospitals. So they’re highly specialized, particularly, as you know, in our stone hard flooring but in this case, Tremco Roofing. We do a lot of our own application, either outright or as the general manager — general contractor on a major project. So not a lot of our products in the Roofing segment are sold through distribution. That does not mean that there’s an opportunity in the future that we could explore to expand some of our product ranges more broadly into distribution.
But at the current time, there’s not a real — it’s not a positive or negative because of the nature of how we go to market versus people that have more commodity type products that go to market through distribution today.
Jeff Zekauskas: In response to an earlier question, you said that there were parts of the PPG business that might be interesting to RPM. Does that mean the whole business is not interesting to RPM?
Frank Sullivan: Again, it’s an odd circumstance where we normally wouldn’t comment on M&A activity, except for the fact that this is very much in our space and a very much of a public announcement. It’s our understanding that detailed material will be forthcoming in some weeks or months whenever it comes out. We have a sincere interest in looking at the entirety of what might be for sale. But there are certainly brands, pieces and parts that we would have a real interest in and could integrate. But Jeff, I can’t answer that question in any detail because we have yet to see any detail.
Operator: Our next question comes from Steve Byrne from Bank of America.
