Frank Sullivan: Sure. The fourth quarter guidance that we provided related to Construction Products and Performance Coatings is as much about the timing of the completion of some major projects and we will provide this detail in July. But when you look at the second half of fiscal ’24 on a consolidated basis, I mentioned this earlier, you’ll see sales on a consolidated basis, flat up 1% and EBIT up, let’s say, 13% to 14%. That’s based upon the results we reported today and the guidance that we provided for fiscal fourth quarter here in ’24. When we look back at the second half of the Performance Coatings Group and Construction Products Group, you’re going to see just really solid good unit volume growth and good performance.
It’s being masked a little bit by these project completions at the end of Q3 which will inhibit a little bit of our growth in Q4. We don’t see any slowdown in the solid performance and momentum of those 2 segments as we go into the summer months. And as I mentioned earlier, I think we’ve hit bottom on our Specialty Products Group. And we will start around easier comps, along with a real focus in our Consumer Group on new product introductions and operating efficiencies that will allow us to serve customers at a very high level. So I think we see good trends as we go into fiscal ’25 but the impact will be more as a result of MAP initiatives because the deflation elements and the pricing elements will be coming to an end as we get through the fourth quarter and get into the summer months.
Arun Viswanathan: Great. That’s helpful. And then, yes, if I could just ask another question, I guess, on capital allocation. You guys have done a great job of bringing your leverage down and obviously, that has accreted to the equity side. At this point and in the past, you’ve often kind of favored smaller bolt-on deals. So is there an opportunity now to pursue something larger, given the changes in the organization and the ability to integrate maybe some larger properties? And if so, would you be open to taking on some extra leverage to do that?
Frank Sullivan: Sure. Yes, I appreciate the question. We will continue and actually have a decent pipeline of small- to medium-sized acquisitions that we will integrate and add to the strategies of our different companies and segments. So that I would expect to continue. Particularly in our Consumer Group and our Construction Products Group where we are more integrated than other parts of RPM, I think we are in a position to take on larger acquisitions and really drive synergies that are required to be competitive from a price perspective in those. And we have throughout my 30-plus career at RPM, been very fine with using our balance sheet. And so I think we’ve got tons of leverage. We’ve got a stronger cash flow than we’ve ever had and we would be willing to use our balance sheet right up to maintaining our investment-grade rating.
And so there is plenty of room between cash flow and debt capacity to do larger transactions if we can find them at a price that works for us.
Operator: [Operator Instructions] Our next question comes from Vincent Andrews from Morgan Stanley.
Steven Haynes: This is Steven Haynes on for Vincent. Just wanted to come back to a comment you made on SG&A earlier. I think in your MAP targets, you’re kind of looking for 26% of sales for SG&A. And right now, when you kind of adjust for all the onetime costs, I think you’re running like 200 basis points or so above that. You’re also doing better on gross margin. But just wanted to just like within the broader framework of the MAP program is 26% still kind of the right way to be thinking about your SG&A spend.
Frank Sullivan: Yes, it is.
Operator: And ladies and gentlemen, that will conclude today’s question-and-answer session. I’d like to turn the floor back over to Frank Sullivan for any closing remarks.
Frank Sullivan: Thank you, Jamie and thank you to everybody for your participation on our investor call today. Through the first 9 months of the year, we demonstrated our ability to expand margins and increase cash flow despite some economic challenges, particularly for our Consumer and Specialty Products Group. We look forward to building momentum in those 2 segments and continuing the good momentum in our Construction Products Group and Performance Coatings Group as we enter our fourth quarter in the summer months of our new fiscal year. In July, we’ll provide the details of our FY 2024 fourth quarter which we expect to be our tenth consecutive quarter of record sales and earnings performance and to provide any comments on our outlook for our fiscal 2025. Thanks again for participating in our call and have a great day.
Operator: Ladies and gentlemen, that does conclude today’s conference call. We do thank you for joining. You may now disconnect your lines.
