RPM International Inc. Q1 FY2026 earnings call

• Pivot to growth was on display with organic revenue growth and successful acquisitions; all segments achieved record quarterly sales and 6%+ growth. - Key factors for record results: turnkey offerings in roofing and flooring, customer-focused new products, strategic M&A, engineered solutions, system selling, focus on repair and maintenance, hiring sales and support staff, and efficiency initiatives including plant consolidations. - MAP 2025 benefits and sales growth offset profitability headwinds; 14th record adjusted EBIT in 15 quarters. - Industrial Coatings Group (ICG) organically grew revenues high single digits in Q1, with investments in salespeople, collaboration, and innovation at the Innovation Center of Excellence

Construction Products Group: Sales increased to a record driven by systems and turnkey roofing solutions for high-performance buildings and infrastructure projects, though softness in Europe and disaster restoration was present. Adjusted EBIT was a record. Revenue contribution: N/A. Performance Coatings Group: Achieved record sales with broad-based strength in turnkey flooring, protective coatings, and specialty OEM; acquisitions contributed to sales growth. Adjusted EBIT was a record. Revenue contribution: N/A. Consumer Group: Sales increased to a record due to successful integration of Pink Stuff and Ready Seal acquisitions, but DIY demand was soft. Adjusted EBIT increased but was offset by cost inflation, reduced fixed cost utilization, plant consolidation inefficiencies, and increased marketing expenses. Revenue contribution: N/A

• Second quarter expected record sales and adjusted EBIT led by systems, turnkey solutions, and acquisitions; SG&A streamlining and pricing actions to address headwinds. - Full-year sales expected at high end of low single to mid-single-digit growth range; adjusted EBIT expected toward lower end of high single-digit to low double-digit growth range; continuing growth investments and self-help measures. - Consumer expected to grow sales moderately more than PCG and CPG due to acquisitions

• Healthcare costs increased by $8.8 million over prior year. - Uncertainty around tariff impacts, with unmitigated impact of about $90-95 million. - Temporary inefficiencies from plant consolidations, with about $10 million unfavorable conversion and absorption costs in Q1 and expected in Q2

Q: Just when you think about the outlook for this year, and being at the lower end, how much of that was due to your investments for growth and how much was due to weaker demand?

A: Investments to growth are delivering higher organic growth; $10 million of higher quarterly spend includes $5.3M on new hires, $2.1M on higher M&A expense, $3.2M on higher advertising, and $8M on healthcare costs. The spending is deliberate and having desired outcome.

Q: Hoping for more detail on increased marketing spend in consumer segment. Any specific product lines?

A: Higher advertising, disproportionately more social media e-commerce; focused on cleaners category, including Pink Stuff, both acquisition contribution and expanding advertising beyond.

Q: Impact of manufacturing inefficiencies from plant consolidation. Quantify and trend?

A: Six plant consolidations in process; $10M unfavorable year-over-year conversion cost and absorption in Q1; expected to continue in Q2 as consolidations continue Q: Top line organic growth in construction and performance. Subsectors and backlog?

A: Construction products expanding sales forces; Tremco roofing has backlog in reroofing, institutional projects; Pureira sales taking off; WTI growing faster than material sales. Performance Coatings Group's Stoneheart and Industrial Coatings Group outperforming with salespeople and capabilities Q: Guidance change from July. What's changed?

A: Challenges in gross profit margin, uncertainty around tariffs, healthcare cost increase ($8M, $6M over last six months related to weight loss drugs); $0.05 price increase in quarter, expected higher in Q2 Q: Stocking up on raw materials. What and why?

A: Stocked up on construction products, Tremco sealant products during transition, consumer new products, key raw materials like epoxy in front of tariff increases Q: Shape of realization in consumer and structural price in other businesses?

A: Less than 1% in quarter, expected 2% in Q2; getting price in consumer related to packaging costs, monitoring tariff regime Q: Cost investments and volume leverage. Where are cost investments going?

A: Reallocated SG&A dollars to salespeople, advertising, e-commerce; pivot to growth with reallocation from G&A to sales and marketing; offshored some expenses to shared service center but reallocating to drive growth Q: Raw material inflation outlook and net gross costs?

A: Material inflation about 1% in quarter, anticipated 2%-3% in Q2, disproportionately in consumer Q: Public new three-year plan and consumer initiative to enter dollar stores?

A: Will come out public in spring/summer 2027; consumer initiative to enter dollar stores and supermarkets going well, with product packaging modifications and traction Q: DIY softness and rebound?

A: Pivot to growth anticipates improvement in spring/summer 2027 due to easier comps and improving interest rate environment; housing turnover at 40-year low, but expecting better dynamics Q: Expansion of sales force. Where and profitability?

A: Adding salespeople, sales support staff; examples in Tremco roofing training program, ICG integration; sales reps and support staff expansion to free up reps to sell more; payoff in 3-5 years with turnover Q: SG&A expense jump. Reasons and growth in 2026?

A: Driven by acquisitions, healthcare costs, $10M growth investments; three areas: acquisitions, healthcare, growth investments; will continue to push levers if driving organic growth Q: Pink Stuff pro forma and roofing demand?

A: Pink Stuff integration going as expected, accretive to margins; roofing business seeing high revenue growth, including Pureira refurbishment of HVAC units Q: SG&A expense jump reasons and 2026 growth?

A: Three areas: acquisitions (mix effect), healthcare costs, $10M growth investments; will continue to push levers if driving organic growth Q: Growth algorithm and consumer price increases?

A: Not normal year due to tariff, inflation, and SG&A challenges; in normal environment 7% revenue growth should drive mid-teens earnings growth; planning price increases in Q2 for consumer