Q3 2020 Earnings Call

Thank you for joining the RPM International conference call for the fiscal 2020 third-quarter. We will begin shortly. We appreciate your patience. Please continue to stand by.

bath bath, bath bath

Welcome to the RPM International conference call for the fiscal 2020 quarter. Today's call is being recorded. This call is also being webcast can be accessed live or we played on the RPM website at ww.w comments made on this call may include forward-looking statements based on current expectations that involve risks and uncertainties which could cause actual results to be materially different for more information on these risks and uncertainties. Please read our PM's reports filed with the SEC during this conference call references may be made to non-gaap financial measures to assist you in understanding these non-gaap terms are p.m. Posted reconciliations to the most directly comparable gaap Financial measures on the RPM website following today's presentation. There will be a question-and-answer session at which time if you woke

To ask a question you need to press * then 1 on your telephone, please standby. Please note that only financial analysts will be permitted to ask questions at this time. I would like to turn the call over to our chairman and CEO. Mr. Frank Sullivan for opening remarks, please go ahead sir. Good morning and welcome to the international investor call for our fiscal twenty twenty third quarter and in February 29th, 2020 on the call with me today are Rusty Gordon RPM's vice president and Chief Financial Officer and our vice president of Global Tax and treasury was also heading our investor relations function.

I'll start the call by discussing how we are managing our business through the covid-19 pandemic then I'll provide an update on our 2022 growth operating Improvement program. After that. I'll take the call over to Matt will walk through our third quarter results in detail, and he'll be followed by Rusty who will discuss the outlook for the fourth quarter and year-end.

First we know that.

All of you are dealing with disruptions in your professional and personal lives resulting from the covid-19 pandemic, especially our analysts and investors from the New York City area. I'd like to thank you for being a call today and for your continuing interest in our p.m. And wish you and your family's good health during this challenging time. There are p.m. Our priorities have been to protect the health and well-being of our Associates in their family members to support our local communities to control the spread of the virus and to serve our customers by maintaining the continuity and success of our business operations team are 15,000 Associates around the world have really embraced these priorities and I'd like to commend them for the incredible work that they've gone to continue each and every day when he comes to protecting their own health and that of their families we've established many protocols across our operations.

We're taking precautions in our facilities to keep our people safe by aggressively cleaning and disinfecting high-touch areas practicing practicing social distancing and good hygiene and have been screening for colon symptoms prior to entry and all of our facilities for more than three weeks. As of April 7th. We've been informed by 14 of our 15,000 employees that they have had various times confirmed cases of coronavirus in these cases. We enacted are protocols to shut down the the affected location have them thoroughly cleaned and disinfected County and all appropriate affected people and then reopen the facilities following an appropriate shut down.

In terms of our communities. We are working from home monitoring the hygiene and health of our manufacturing and distribution Associates and Reporting any infection or disruptions. We're also donating time and material to help stem the spread of the virus in one case. I would finish his group supplied thousands of plastic bottles to a local Distillery that has been converting product to hand sanitizer and it's providing it to freeze in the community, especially to healthcare First Responders in another case. Our Rust-Oleum operation source is concrobium fogger product and donated it to First Responders so that they're dead air ambulance helicopters could be disinfected and return to service quickly. These are just a few examples of how our operations are responding to local needs.

It's one of the world's largest suppliers, especially coding to building materials. RPM is in a strong position to whether the told that the covid-19 pandemic is having on the global economy. We are taking action to adjust. Our business activities during this period of uncertainty and are well-positioned with strong cash flow a solid capital structure and one point 1 billion dollars in liquidity many of our products are used for construction maintenance and repair projects, which are deemed essential in many cases and a relatively recession-resistant RPM companies around the world with a few exceptions have been able to continue to operate their plants and distribution centers. In fact today nearly nearly. All of our North American plants are operational with a few exceptions while a number of our international plans have been closed due to government mandates.

a large number of our

American customers such as those in such as those in construction infrastructure and DIY home and Hardware retail are also considered essential and currently remains open for business with people spending more time in their homes. There is potential for increased DIY activity projects raw material cost inflation seems to be moderation in a number of our key product categories are Global Supply Chain remains strong and our distribution and operations Associates continue to work diligently to meet customer demand. We continue to be proactive and taking actions around the globe in our operations as the situation of olives.

now I would like to discuss our map to growth restructuring program it is steadily been gaining momentum each quarter this quarter is no different as demonstrated by our excellent bottle of wine results strong organic growth strong earnings leverage and record levels of cash generation restructuring activities include an actual operational improvements that are production facilities consolidating manufacturing plants delayering management and rationalizing product lines during the third quarter an early in the fourth quarter we announced closure of two additional plants which brings our total to twenty out of a Thirty One plants that were originally targeted for closure at the beginning of the map to grow the program versus last year on a solid dated basis we realized incremental map to growth Savings in the third quarter totaling 21 million dollars of which five million came from manufacturing twelve million from procurement and four million dead

from sg&a

looking ahead as the covid-19 pandemic slows Economic and Business activity. It is also impacting our map to growth program while there are some initiatives that can be carried out virtually many particularly those dealing with additional manufacturing improvements and the completion of our implementations require a physical Presence at some of our plans in offices limits on travel and access to facilities have required us to temporarily halt some of our operating Improvement activities as such we we will be extending out the time from our original map to growth goals in terms of their ultimate achievement at this point. There is too much uncertainty to set a new date for reaching our objectives as our Market. Stay home as we gain more clarity into the business conditions. We will communicate our new map to growth timeline. But as you can see once again in our third quarter results are people are executing on our map.

Growth initiatives very effectively and I'll turn the call over to Matt rata check for a detailed review of our results for the third quarter.

Thanks, Frank and good morning. Everyone note that my comments will be on an as adjusted basis during the third quarter. We generated Consolidated net sales of one point one seven billion dollars an increase of 2.9% compared to the one point one four billion reported during the same quarter of fiscal 2019 organic sales growth was 3% or 34.0 Acquisitions contributed 0.7% to sales or nine point zero million while foreign exchange was a headwind that we do sales by 0.8% or 9.6 million. This was solid top-line growth during the third quarter which typically generates are most modest results each year because it falls during the winter months when painting and construction activity slow.

adjusted diluted

Earnings-per-share. We're $0.23 an increase of 76.9% compared to the Thirteen Cents in the year-ago quarter are Consolidated adjusted earnings before interest and taxes ebit. We're up 30.4% to sixty point five million compared to forty six point four million reported in a fiscal 2019 third-quarter. These excerpts bottom-line results were largely due to initiatives under our map to growth restructuring program. Our earnings also benefited from pricing and moderating raw material costs.

Turning now to our segments sales and our Construction Products group were strong and increased 4.7% to 372.1 million growth was primary Mission organic is 5.1% or 18.5 million Acquisitions contributed 1% or three point four million foreign currency translation reduced sales by 1.4% or 5.1 million sales growth was driven by market share gains and the introduction of innovative new products with the fastest growth being generated in our Roofing the low-wage waterproofing and concrete admixtures businesses.

Adjusted ebit in the Construction Products segment increased 6 .0 million from adjusted ebit loss of zero point three million during last year's third quarter. This Improvement was largely attributed the pricing moderating raw material costs map to grow savings and the favorable leverage impact of higher sales volume.

Sales in our performance Coatings group were 255.7 million 1% from the two hundred fifty three point two million. We reported during last year's third quarter.

Organic growth was 1.6% or three point nine million sales growth in the segment was mixed. It's Highway and Bridge maintenance businesses were slowed by government budget constraints particularly in the UK. However, its protective and Marine Coatings business unit increased market share and its Continental European operations grew sharply driven by a new Global Management structure.

Acquisitions added 0.2% to sales or a half a million dollars while foreign exchange was a headwind of 0.8% or 1.9 million segments adjusted ebit increased 33.2% to 24.2 million from 18.2 million during last year's third quarter a focus on higher-margin products and service offerings as well as map to growth business rationalization initiatives drove a significant adjusted ebit margin Improvement of 230 basis points in the segment.

And the consumer group sales were robust increasing 5.4% to three hundred ninety-eight point seven million organic sales increased 6% or 22.6 million driven by market share gains and on seasonably warm winter weather in North America that enabled consumers to complete more DIY Home Improvement projects with the fastest-growing achieved our cocks sealant and patch and repair product lines. There was no impact for me at positions during the quarter foreign currency translation reduced sales by 0.6 per month or two point two million adjusted even in a consumer group was thirty two point 1 million an increase of 19.2% over the prior-year. This bottom-line performance is driven by saving a map to growth Opera Improvement plan, and we're partially offset by inflation and certain raw materials and channel mix.

on the top line

The Specialty Products groups would Coatings business successfully outperform its peers in a challenging Market, however, sales of the segments water damage restoration products face a difficult compared to the prior-year when demand was exceptionally High to the significant weather events in North America sales were also down in our fluorescent pigments nail polish and edible Coatings businesses long segment sales were a hundred forty seven point five million organic sales decreased 7.1% and foreign currency translation reduced sales by 0.3% the segment benefit 3.3% or 5.1 million from acquisitions.

Adjusted ebit was seventeen point five million during the quarter which was lower than the twenty point two million of adjusted ebit reported in the same period last year savings from our operating Improvement program helped to move. The impact declining sales volume had on earnings in addition. We have new management in place and are implementing cost-cutting measures and new processes to reignite growth.

Now provide some comments and our cash flow and liquidity.

For the first nine months of fiscal 2020 cash from operations grew by 162% to 381.2 million compared to 145.5 million years ago. This increase of 235.7 million was due to improved working Capital Management and operating Improvement initiatives free-cash-flow improved to a source of cash of $137 million during the first nine months of fiscal 2020 as compared to a use of cash of 74.5 million during the first nine months of fiscal 2019. This 2011 point five million increase is a result of higher earnings coupled with overall improved working capital metrics.

Next a few comments on our liquidity profile the maturities of our long-term debt portfolio are nicely staggered with the next schedule maturity out in November of 2022 and we have multiple options for access to short-term liquidity under both our revolving credit and accounts receivables facilities further in the month of February. We improved our financial flexibility and increased our liquidity by former million dollars by securing to three year term loans. We borrowed four hundred million immediately after closing and swapped to a Euro fixed interest rate of approximately 0.6% of the proceeds were used to pay down the balance on a revolving credit facility.

Finally as Frank stated at February 29th, 2020 our total equality including cash and committed revolving credit facilities with 1.1 billion. Now turn the call over to Rusty for details of our share reports repurchase program and the outlook for the remainder of fiscal 2020. Thanks, man.

It's part of our Maps growth program. We established the goal of repurchasing 1 billion of our stock in March subsequent to the end of the third quarter. We exceeded the halfway point of that goal when we repurchased approximately twenty-five million of our common shares. This is in addition to the three hundred million. We repurchased during fiscal 2019 and the first three quarters of fiscal 2020 coupled with a $200 million cash Redemption of our convertible notes in November of 2018 while we were making good progress on this goal given recent macro economic uncertainty resulting from the covid-19 pandemic. We have suspected our share buyback program.

Looking ahead.

Fourth quarter is seasonally our strongest and was off to a good start in March Consolidated sales for the month increased 5% over the prior-year led by the special segment, which was up 9% consumer was up 7% Construction Products group sales increased 7% and performance Coatings group declined 3% However, like most companies we expect our financial results to be impacted by the disruption and uncertainty covid-19. I'm having on the global economy today nearly. All of our plants are open in North America where we generate 74% of our sales.

Some of our international plans have been shut down due to government mandates around the world these facilities generate approximately 6% of our page in sales while these shutdowns are are a various durations ranging from days to weeks. They are likely to impact our fourth-quarter sales in a school in May.

In our Construction Products group demand for our Innovative products and solutions has been robust and the segment as very strong momentum behind it construction is on the US Department of Homeland Security's essential critical infrastructure Workforce advisory list. The segment has a large number of hospital and Healthcare System clients that will continue to require its offerings during a good sales month in March travel was able to support schools during this unexpected shutdown by moving up planned Roofing and other facility restoration work.

At our performance Coatings group results will be mixed. We anticipate seeing a boost in sales for our hygienic seamless flooring systems how long the portion of our corrosion control and fireproofing Coatings that are tied directly or indirectly to oil and gas markets a little more than two hundred million in sales. Annually. Maybe at risks. Should there be a prolonged drop in pricing in those markets? So we are closely monitoring investment in this area.

POS take away at our consumer group has been strong with unit growth in the mid-to-high single-digits particularly for our professional and consumer cleaning and disinfecting Brands some of which are effective against the coronavirus. The majority of the segments sales are in North America where DIY home the hardware retailers remain open for business as consumers shelter-in-place. They are spending more time in their homes and have more time and birth and home repair maintenance improving and cleaning projects, which should continue to benefit the segment.

Our Specialty Products group. The Outlook is mixed some of our companies such as our marine Coatings business will be slowed by the closures of their distributor out in retail networks on the other hand Legend Brands, which manufactures cleaning products and equipment is seeing spiking demand as its restoration contractor base is Shifting to disinfecting services and this trend should continue over the coming months according to current government projections. It appears that the covid-19 crisis May reach its peak in April or May this is obviously a fluid situation and the information available to us is rapidly changing as we said here today. We anticipate that are Consolidated fourth-quarter. Revenue will be down 10 to 15% off.

Year-over-year. This is assumed are strong March results are counterbalanced by sales drops in April and May of 15 to 20% off with that being said given the uncertainties around this crisis. We are withdrawing our prior earnings guidance for the fourth quarter an age of fiscal 2020.

We will continue to assess the situation and the short and long-term impacts have covid-19.

We are taking aggressive action to manage Cash Flow by reducing working capital capital expenditures and discretionary spending the map too. Gross program timing has been fortunate for us in this regard since we have improved margins and are starting to see the benefits of our working capital Reduction Program resulting in improved cash flow this year additionally as Frank mentioned we have significant liquidity in a strong balance sheet, which we anticipate will keep us in a solid financial position.

This concludes our formal comments. We will now be pleased to take your questions. Thank you. We will now begin the question-and-answer session office, please press * then 1 on your touchtone phone. If you wish to be removed from the queue, please press the pound sign or the hash key. If you're using a speakerphone, you may need to pick up the handset first before pressing the numbers. Once again, if you have a question, please press * then 1 and we have our first question from John McNulty with BMO Capital. Hi John goodmorning Franklin for thanks for taking my questions. So I guess I the first one would just be on on the revenue Outlook. So the commentary around April and May looking down 15 to 20% off it. Okay. It's a it's a tough Market to try to forecast now, but like looking at some of Rusty's commentary on each of the divisions. It doesn't sound like it's it's kind of trending wage.

Bad as maybe that guy.

Would would necessarily indicate so I guess where are the puts and takes their and I guess when you think about the the four segments where you see kind of the biggest pressures when you're looking at that 15 to 20% down versus maybe where there may be some bright spots. How should we be thinking about that? Sure. So first of all, it doesn't behoove anybody to do for casting with an optimistic Outlook. And so I think our assumptions of April and May being down fifteen to twenty percent have been done appropriately with a, you know, a negative conservative cast but it's literally hard to tell from day-to-day, you know, we will have spikes in some of our Construction Products businesses over a couple of day. Because that looks really good and then you'll see some slow downs. Um,

The the things that are are pretty certain will be the negative impact of multi-week shutdowns. Most of this is outside of the United States should be a little less than half of our manufacturing facilities in Europe are closed and I won't get into all the details but it's an interesting mix. We had a plant in Norway Club reopen interestingly. Our primary plan in Italy is now reopened but we have plants in the UK and various parts of the continent that are closed by government mandate for life. Of weeks. We are also closed in our two major plants in India in almost every manufacturing facility in Latin and South America and South Africa, there's a few other locations, but they're so small as to be inconsequential.

You know is rusty said when you add that all up on an annualized basis, it's about 6% of our revenues. So it's not big and the impact of reopening will determine you know, whether we're at the bottom end of that range and and the top end of that range. I think the good news for us is we're not yet. I'm not seeing the underlying demand destruction that exists in some Industries. Obviously, the the hospitality industry has challenges, but even the auto assembly Industries got some challenges now that

Around the demand side that will be challenging. We're not seeing that yet. We are very aware of the possibility for that and one primary Market, which is oil and gas in across our performance Coatings group. That's a little more than two hundred million dollars of annualized Revenue. And so our expectation is in the coming quarters and year that's an area that will be under pressure.

I hopefully that's responsive to your question. Yeah, no that that's that's definitely helpful. And then I guess maybe shifting gears a little bit to the to the map to growth cost-cutting program. I guess. Can you can you give us some clarity you had wave one that was you were going to get the full year benefit this year kind of coming in wave to you were going to get a decent chunk and then there was going to be waived 3 phone next year as it would roll in. I guess can you give us an update as to where you are and those buckets and what what things are kind of already in the bag and and what percent maybe actually kind of pushed off at this point is Thursday to think about that sure and so I could tell you from my perspective and I don't mean this to be trite. Obviously this uh, a coronavirus pandemic app is horribly impactful to everybody but as it relates to map to growth there's a plus and a minus the minus is if you can see in this quarter and in subsequent quarters before this

The things that we have planned the things that we are executing are working, you know, we had talked about.

Not working Capital Improvements and then quickly realized that they would come later in the cycle. You're seeing those now and so it's a little bit disappointing that a map to growth program that and it said you should and positive impact is being disrupted on the other hand. There are a number of instances where I think the timing of certain things were lucky and this is one of those are cash conversion cycle stronger than it's ever been and we have affected close to two-thirds of what we wanted to do in map to growth across every certainly across manufacturing jobs in in the procurement process by centralizing are purchasing globally probably less than 2/3 in the GNA area because the bath the last bigger piece of that will come once the Erp implementations are completed. So the areas that are most disrupted is getting the continuous Improvement disciplines into our dog.

In smaller plants and also completing the Erp implementations that we had set to complete over the next twelve to Fifteen months and those will be put off because they they require in some instances of physical presence. But the the gains that we have made have been solidified and will continue to benefit us and how long it's been a it's been a a really good program that was accelerating Rusty provided details of March, you know, March is a repeat of what we've been showing quarter after quarter off, but obviously that will be anticipation that that will be meaningfully disrupted in April and May the last comment that I will make is you know, if you believe what you read and you believe what you see on the ground it does appear as if April and May will be the most negatively impacted. 60-day period as it relates to government-mandated shut down and business disrobe.

Ins and it'll be interesting to see as we get into the summer months both globally and then in the United States state-by-state how the reopening of the economy happens both in terms of sectors and speed.

Great. Thanks for the call or Frank. Thanks John. We have our next question from Frank with fermion research. Hey, good morning Frank. I appreciate the collar on expected declines in in April May and obviously, you know, your your your results are really good start. What is underpinning? What are your thoughts in terms of housing housing starts and commercial construction activity in April and May that is underpinning that that 15 to 20% sales decline.

So I can't answer that question. We you know, we haven't gone from a macro perspective into that. What we have done is talk to each of our businesses. We've looked at the exact in Plants. Globally. We have had some affected plants in the United States not surprisingly. They principally been manufacturing facilities in the New Jersey North Jersey area of of kind of Metro New York, and we've had shutdowns we've quarantined people we closed the plant we've disinfected it cleaned it and brought people back. So we've been through that cycle and it's not a good cycle to go through but when you've done it once or twice you begin to develop a rhythm of understanding the quarantine time the cleaning process of getting people back to work, but we really have done it a bottom-up company by company in an assessment of their sales force and so in New Jersey,

consumer DIY

There's not only been you know more people at home. But at least temporarily there seems to be a shift from contractor do it for me to DIY and uh that will benefit our consumer DIY businesses. For instance. The only element of our consumer DIY business that's not acted by residential new construction would be the clocks and sealant segment of our business. We haven't done an analysis of what that means. But that's the area in consumer that would be impacted.

The Construction Products group continues to see spotty cycles of big order flow and Roofing projects and then stops in our performance Coatings group. We're building a solid with good, you know customer bases in Tech and food and beverage in areas, that will will I think I perform well through this but some of that's being put off and so I'm not answering your questions that we we have gone this bottom-up business use my business unit and trying to understand the order flow and the impact and as I said earlier, I think the only big Market that we're very concerned about as a real challenge coming is oil and gas.

Just wondering Frank whether you could touch on the the lower capex. Which what do you think the amount will be by year-end wage which are the projects that you are eliminating?

So our goal this year was to spend about a hundred and eighty million in capex. I think when we finished a year will be closer to 150,000 notably with a really strong cash flow through nine months that included a year over a year higher level of capex of about twenty million dollars. So that gives you a sense of the strong cash flow that way generating for next year. Our preliminary budgeting was about a hundred and fifty million dollars in capex. And at this point in time, I think we can pair that back by 12 or 4:30 without negatively interrupting our map to growth program or the areas that were growing and if need be a depending on circumstances, we could pair that back further, but that's our current plan. Okay. Thanks and when you are talking about most of your facility's operating in

In North America all together. What is the capacity utilization? Yes, they are open, but how much business is coming out of there?

It's very hard to say Rose. Marie is I think we highlighted either in Rusty's comments or in our press release. It's circumstantial to each business. But if you're in the small project paint patch repair a particularly are cleaner categories, there's an I don't have them exactly one of them is crud cutter and Thursday and other is a mean green anti-bacterial product. We have three cleaning products through Rust-Oleum that are certified as dead approved for cleaning surfaces relative to covid-19. Those are through the roof and the constraints there is raw materials, but you know, we're continuing to that. The flipside is our marine Coatings business, which is a a smaller business as part of our Specialty Products group, you know in total. That's maybe a

$25 in Revenue business, and we normally wouldn't talk about sbu sizes. But to put that in perspective and many of their large green product retailers and or shipyards that do repair maintenance and recoding for yachts and boats are closed. And so that's a business wage might at this point be impacted as much as 50% but that's a temporary. And whether that last for another few weeks or another few months time.

Thanks, and if I may sneak another one and with Q4 of the news down 15% what could be the impact on your bottom line and change that is linked to the Marine business being down 50% and I think if I am not wrong that it has a very high margin sure, you know, we don't offer is rusty said we're suspending guidance. And at this point we're looking at expense reductions expense deferrals cutbacks and capital spending money taking advantage of a few of the things that are in the cares act that applied to larger businesses one example is a deferral of FICA taxes. We're looking at things like that to Thursday Drive cash flow generation, and that's very much our Focus. I think the map to growth program will allow us to generate better birth.

Online income than we are.

Would have in the face of Revenue declines, but beyond that we're not in a position really to talk about earnings or earnings per share or any projections around that for the quarter off. Thank you.

And we have our next question from Steve Byrne with Bank of America Steve. Good morning. Thanks Frank. What's the time lag and frequency by which you receive sales data from the from the big box Home Centers on your consumer products and and well, let me just see how you how you answer that one. First month sure. I you know, I'm pretty certain that in most categories are consumer businesses get that information on a weekly basis.

And can you tell whether or not the Home Centers are placing orders for inventory restocking that's commensurate with that or do you sense any change in in stock levels as they look forward into these next couple of months?

It it literally is week-by-week. So your question spot on in terms of things that we're paying two I'm paying attention to they'll be some interesting new Dynamics for all of us birth relative to learning how to work from home and I say that because we have a a senior senior leader meeting every other day at the end of the day we talked about code infractions if there any fortunately as as our statistics show, they're not many and they've been sporadic there and they've actually mostly been in the New Jersey area for us back and we talked about impacting our operations, but we also talked about every other day what's going on, you know order flow impacts, so we have some good insight into that. It's very circumstantial some of our retail customers are showing a solid uh-uh POS and the early part of April or what we would forecast for the you know early.

April hear some of them are showing levels that are below where we were in March and we think that has more to do with deliberate decisions to limit the traffic flow into their stores than it does with actually command. And then lastly as I indicated earlier, it's very spotty. We are selling all the cleaning and cooking products that we can make that's true at our Legend Brands business as well. And and so that's an area that maybe by July will have a better sense of what we can say in some detail about the different DIY product categories. And and what's really moving the needle

And on that 6% organic growth that you posted in the fiscal third-quarter in in the consumer segments. Is that mostly volume and and can you comment on the outlook for for Price giving moderating Roz? Sure. It's it's mostly volume as you saw given the strong volume there and in our consumer, I'm sorry. I'm a Construction Products group and performance Coatings group The Leverage to the bottom line has been a little less in our consumer business in part because we've been facing some unique raw material challenge is there some of which are now debating the biggest one was packaging in certain areas. And and so it's in all three of those of those segments Construction Products and consumer products the the unit volume growth been really solid in the performance Coatings group actual unit volume growth through Thursday.

Which has been better than the number.

Because they've been very deliberate in pairing back lower-margin product categories and in closing some lower-margin or break even international business is so as we indicated, you know, we've said close to sixty or seventy million dollars on an annualized basis deliberately in in this reorganization and that's been disproportionately in our performance Coatings group in our Construction Products group. Not in consumer, although there is some coming in consumer with some overseas businesses that don't meet our criteria and and so it's been very solid organic growth.

Thank you. We have our next question from Punjabi. Hey guys, good morning. But, you know, obviously employee Mobility impacting some of your map to growth initiatives, you know, clearly a customer is going to be impacted by the same Dynamic and presumably will be even as the economy starts to gradually open up. I'm just curious for my segment standpoint. How should we think about this dynamic as relates to customer qualification of your products, you know for future capital projects et cetera. How are you sort of adapting towards the new normal if you want to call it that sure and so in our Construction Products business

I think we're fortunate both in every segment of our p.m. Cuz the benefits of map to growth but if you think about where we've been strong so while are in general and to your question, I do think that there will be a reduction for a period of time in industrial Capital spending in certainly outside of oil and gas which is part of that a little more than two hundred million. Well, there's probably a half a billion dollars of our revenues that are driven by industrial Capital spending or major projects. But again, it's circumstantial, you know, our our Stone Heart business has been a leading provider globally including the application portion of it of polymer flooring with a birthday presents and food beverage hospitals Fab plants, and so areas of the economy that we think are going to do pretty well the interesting anecdote wage.

Stoneheart business that was cashed by a major contractor to put together the hygienic flooring in the the hospital temporary Hospital facilities off to be set up in Central Park in New York. And we got that order. It was under strict requirements relative to timing. We took the material and the applicators there and then good news relatively quickly that order got cut in half because it seems as if the the anticipated need off of the number of bed spaces for this temporary Hospital spot in New York City is is not going to be needed. I hope that's true. But that gives you a sense of why we think over time that segment will do well our trip go roofing business has been the leader in North America in these long-term high-performing rep.

Roofing projects and

What they've been very good at is being able to dry out an old roof as opposed to tear it off and then apply a roof restoration coating and extend the life of a thirty or forty year old roof for another 10 to 20 years. That's at a third of the cost of ripping off and replacing with new materials a old roof surely we would be seeing enhanced competition there, but we're the leader there and I say that because I think that the negative impact in that sector for us will be more off the rip off and OEM replacement. We don't play in that space 95% of our tremco roofing business is Ben re-roofing and so without filibustering the foul here, you know, we've looked at oil and gas that will be a problem. We've looked at a half a billion dollars driven by industrial Capital spending cuz clearly we're going to be cutting off.

And others will do the same and it's circumstantial but in a lot of cases, I think we're in a pretty good position.

That's super helpful and frankly. I know you don't want to give guidance completely understandable. But you know as you kind of think back to the financial crisis, you know, what was the initial detrimental margin that off before it started to be dampened to some extent by lower raw-material cause obviously you're in a position of strength with map to growth and the momentum. They're they're just curious as to what transpired back then and then second thought you kind of think about disruption risk yourselves, you know, given the fluid operating environment. How should we think about working capital? Will that be will you build up a little bit more inventory as part of your safety stock for you know supplying a customer a working capital to be a benefit this year to the extent that it has been sure. So when you go back to 08 and 09 are fiscal year could not have modeled the Great Recession and Thursday. We start our 09 fiscal year in June of 08 and we finish our 09 fiscal year. I'm a 31 of 09 so we pretty much modeled the

The beginning of the financial crisis and then when people started to feel okay in that period of time our sales were down 7% and our adjusted net income was off a little more than 35% off. We had our best cash flow year ever in fiscal 2010 sales on a Consolidated basis recovered by about 1% and earning a net income and EPS is up 25% an adjusted basis. And so we had a a strong recovery and and that was not inconsistent with kind of the recovery that many people had I think our cash conversion cycle is better now thanks to the timing of map to growth. I do think you know while we will bring up some Safety stock in a few areas. I do think through a combination of map to growth and in some cases reduce volume, you will see working capital as a contributor to cash Generation Dead.

in the coming quarters

As I commented our you know, we look bottom of the entrepreneurial nature of our p.m. In terms of how we serve our customers is still alive and well and will will suit us well in terms of flexibility and this is a big picture perspective but contrary to what some people expect I do not see a V4 Global economies here. I see a month and I think the U will be shorter for some and longer for others depending on and all of you know this better than we do on the impact of this pandemic which has been devastating a certain industries and Hospitality for instance and and then, you know helpful to some unique businesses relative to cleaning products, but for us off, you know, I see a improved performance as we get into our new fiscal year relative to our conservatively a negative expectations for Q4 dead.

But I think for everybody we're looking at a new recovery. Not a v.

Thank you. Frank. Stay healthy everyone. Thank you. And we have our next question from silk with JPMorgan. Good morning. How are you doing? I was wondering what I could do like a similar exercise like look at like what happened in 09 and what sort of like happened is is that in the notes in separate make orders the the organic growth was sort of like down, you know ten or 15% which is why your guidance make, you know really make sense. And if you took a bite bite by divisions are like one of the things that happen is is that both of the industrial business, which is now your construction your performance Coatings business, you know, they were down may be in terms of volumes like, you know, twelve percent in the February quarter and then 19% in the make water, but the consumer business had similar results are the consumer business in February was down 14% off.

Volumes maybe 19 and the May quarter and in part it had to do that. There was a financial crisis and you know people couldn't spend money and like somehow it feels like something similar is going on with no we're a lot of people will be, you know, unemployed and you know, like a third of the, you know, people didn't pay a rent for April and so one of the questions is when we model down this like ten to fifteen percent should that really be stuck into all the segments rather than saying well consumers don't five and everything else is down twenty.

Sure, I am.

You know, I think this is different from the financial crisis. And so I don't have in front of me the details by segment. We had three segments back then. So can't be specific to that. But I can tell you in the third quarter our consumer segments tanked and you know, we literally anecdotally we're talking about shooting cannons down the aisle of our big customers including Home Centers like Walmart and not hitting anybody and so for a very short period of time during the financial crisis consumer, stop buying every month and I think the fear there was that, you know at some point they're going to go to their ATM and nothing's going to come out that East up very quickly. I think what we're seeing now is very different Thursday. We're seeing pretty steady on a segment basis, but spiky based on different product categories business activity log.

It does speak uh-huh.

Silka to the comment I made earlier we do not anticipate AV recovery for us for anybody. I do think that there will be even as economies recover off even as these mandated government restrictions are eased. I do think that there will be a period of time in which economic activity from where we were three year ago will be somewhat subdued.

So you're more of a believer that if that if you look at the and then I don't mean to criticize just trying to understand so like your viewers is that there's probably a lot more from a point of view. That would be like a lot more head went on the construction Performance Group businesses in terms of negative volumes in the make water and a lot less on the consumer side. Oh, I I think long and the make order it is our expectation that there will be less. Uh,

Negative impacts in our consumer segments then in our other segments. That is correct. The one that's despite key is for us right now is Construction Products group home because we're seeing days of year-over-year record overflow and then days of of crickets and so it's very spiky. So it's hard to know. Okay, that's helpful. And then just the question of clarification on the on the macros product program if you realized twenty 1 million in in Savings year-over-year in the third quarter, that's one analyze it and say the Run rate savings are like eighty-five or a for a million for the year that the way to look at it.

Yeah, the savings were talking to are the incremental year-over-year Savings of $21 and then change each quarter are accumulated savings. We use the report in the past, but we found it would be more helpful for analysts to discuss, you know, the quarter and the increment. Yeah, and so, you know back to our original goal of $290 in Savings in terms of the manufacturing piece the procurement piece and the g n a piece. We are on track for the G&A but that slowed down we are ahead of of both of the manufacturing and procurement piece relative to our original two hundred million two hundred ninety million dollar goal. There have been some offsets to that FX has hurt us in ways. We didn't anticipate slower growth has hurt us. But you know, we're through 20 a plant closures out of a plan 31 club.

We're through six sixty to seventy million of either business or product line rationalizations. The The Continuous Improvement activity in our plants Burgan by the time we're done this with this will exceed our original goals meaningfully. So if you'll recall we had seventy-five million dollars of targeted map to growth goals in life. In fact from area split roughly between the impact of footprint consolidation and continuous Improvement will achieve the half from footprint consolidation and we will have that tens of millions of dollars of more out of the continuous Improvement efforts by the time we're done and that will be incrementally continuing. So all of those have been going quite well for us and and they're pretty well embedded the momentum, you know, as as you guys had pointed out year one and a 3-year restructuring program was too easy.

Used for the lowest hanging fruit what?

You're too is going exceedingly. Well in our momentum was continuing to build my biggest disappointment. And again, it's a trite statement in light of what's happening in the world is that momentum now has been a little disruptive.

Okay. Thanks so much for answering the questions.

And we have our next question from Simpson Andrews with Morgan Stanley. Thank you and good morning. Everyone. Just want to ask in the in the fourth quarter sales guidance. What's the impact you have any foreign exchange and for m&a just so that we can kind of get to the true organic range that you're looking for. Yeah, that's that's a great question and Thursday. We are trying to take into account FX and again, you know, I mentioned that we we talk as a senior leadership team every other day and the the swings in developing country. Currency zone. No nuts. So in Latin America, you're seeing, you know, thirty percent 40% plus negative impacts, you know, I would remind folks that that's about three hundred million of Revenue loss total. Yeah. Yeah, and so it's not huge but and then you could see the the strength of the dollar versus the Euro and and the Canadian dollar and and the pound which are other bigger.

Currencies, so we are anticipating that in this guidance for fourth-quarter. The acquisition activity will be very modest as you saw in the and the third quarter so but we don't anticipate in some prior quarters acquisition activity at 1 or 2% has been offset by FX. We think FX will be decidedly more negative and and certainly will not be offset by 1% acquisition positive impact. So if we think like three to five percent for a fact is that in the ballpark keeping in a moving Target? Yeah, that would be our best guess right now. I think that's good math, but who knows?

Okay, and then if I could just just want to clarify one other thing you called out the two hundred million of oil and gas exposed revenue and the five hundred million tied to Industrial Age. You know, you're obviously quite concerned about four four easy-to-understand reason. Is there another subset of Revenue at all that you have the same concerns about or slightly damaged concerns about or I'm just just trying to you know, clearly consumer we can tell there's there's a good DIY opportunity there and the sustainability of it we can all debate or is it pull forward or whatever but I'm just trying to you know walk through the the broader buckets. Just want to make sure that there aren't some other areas of Revenue where your ass concern does, um, uh industrial tap expand in in oil and gas. Yeah those two biggest ones too that I think is appropriate to point out to our investors to say look. These are the two big pots that that we're paying attention to and we provided some color as to why we moved.

We'll ride through for instance and in dust.

Field Capital spending our big maintenance spending better than most then it's anecdotal. I mentioned the the Marine Coatings business. That's mostly pleasure Marines and Yachts and in fact, and it's a smaller business, but because of the shutdown of their customer base and boatyards, you know, we anticipate their revenues could be half in the fourth quarter of what they were a year ago it down anybody's guess as to when those retailers and those boatyards open up as to whether we have a a modest recovery or depending on the health circumstances. If everybody's happy to put their boats back in the water and there's a a little bit of a spike in order flow from what's been a very ugly economic impact of coronavirus related shutdowns on that business. So we just were monitoring business unit by business unit to try and assess those same questions, but we've highlighted in the call today the the birth

Areas that were paying attention to and we think investors should as well. Thanks very much guys. Thank you. We have our next question from Mike Harrison with global Thursday morning Mike. Hi, good morning. You mentioned I think primarily in performance. The 50 is 70 million dollars worth of our product lines, where where you been shedding some lower-margin business. Can we just get a little bit of a sense on kind of where you are in in those actions and when you start to get those actions and then I think your reference some similar actions and other segments including consumer have you started on those already or are those actions yet to come in other segments? So yeah, the the answer to that is we started on those but their impact will be in the future and I would anticipate by the time we're done with our map to growth program.

That on the 60 to 70 million of product lines are businesses that we have either closed or or eliminated. There's probably another 30 million to come home and maybe a little bit more and and that would come mostly outside of our performance Coatings group and our Construction Products group. So it would be a little bit and Specialty and some principally some of far away overseas, uh-uh operations in our consumer segments.

All right, and then just in terms of the map to growth the areas that are being disrupted or delayed what are some of the things that you can still move forward on and and what do you what do you stuck waiting until people can can travel more freely and then I guess the second issue behind that is should we think of that delay as just wants to stay at home orders are lifted. You'll get back to work or or will it take time to ramp those activities back up and so it could be longer after the the state of homeowners with

sure, and so I'll highlight the

For me cash flow perspective first, you know at at in the first year of our map to growth program. We were probably spending upwards of thirty million dollars in outside Consulting fees and related map to Kathy's that's down or was down to about four or five million bucks on an annualized basis and very quickly about 3 or 4 weeks ago. We hardened all our manufacturing facilities and all our locations. And so if you were a non-essential employee that includes me you don't belong in our plants and that includes outside contractors and so the choice of having, you know smaller Consultants that were helping us with continuous Improvement who go from our plant to plant the plant and who come from other plants wasn't a good idea. So the people that have been working with our team and we're now getting down to the kind of did smaller size manufacturing facilities to Institute what we call fit events, and these continuous Improvement discipline.

Have been halted I can assure you. They're all eager to get back going. I have no idea when when you know, the world will be ready and we will be ready to turn the green light on that wage, but I can assure you the second we are those Consultants are going to be eager to get back to work. Cuz when we halted their activity, we halted their payments the same thing is true on some accounting foundation and Erp consolidation activities to the extent that we have these that you know, that would be generated with paybacks that are let's say over a three-year period off all their activities halted and so if we don't see a pay back on some of the of the activity even that we can do remotely that is in inside of a year those programs and stopped both practically because we can't put people into our facilities personally and financially because some of the activities that we're going to have a dog

Pay out which is a good irr but still a payout longer than two or three years has been halted and you know, I I would tell you the things that all good companies are thinking about our capital structure cash flow and liquidity and cash generation. So in in things large like, you know, reducing plan capped by twenty-five or Thirty million bucks with the bulb that we could do more and think small like every fifty or $500,000 contract with an outside consultant. They're all being canceled or delayed.

All right. Thanks very much. Thank you. We have our next question from Josh. Yeah. Hey, good morning. Thanks for taking my question just on the raw material front. You guys talked about more moderating raw material inflation not necessarily declines. I was wondering if you could provide some more color on where you're seeing wage increases and related to that if oil kind of stays where it is, which I know is a big if what point would you start to expect to see some of those savings slow through the p&l?

Great.

In in in so initially we were seeing some tightening in certain raw material categories and some uh, because of that some pricing pressure one category of was a silicones, um, that pricing pressure and availability has seemed to ease off on the flip side is over the last month or so one of the categories that was defying ROM ROM material deflation was metal packaging and you know, I would anticipate with what's happening globally in certain categories that maybe we'll finally see some relief in that category. So it's been circumstantial around different categories. There's no doubt that with oil prices being where they are if they settle into a sustained area that there will be some solvent and resin categories birth.

It will see uh some decreases in class versus where we sit today.

Thanks, that's helpful. And I guess related to that as we look across the different segments if raw materials were to decline meaningfully how quickly would you expect prices to react in the industrial construction segments and maybe Converse to that how slow would price and react and consumer segments?

It's really hard to say at this point in time. You know, we are.

Holding onto the pricing that we've been able to effect over the last year and half we needed that because of a two and half year cyclical raw material wage increase we're not back to where we were in terms of that makes two and a half years ago. But I you know at this point most of our customers are focused on Iraq apply fill rates availability and really working with them to make sure that we have product when they need it and where they need it and it's been a a supply chains across Industries have had to be more Nimble because of the spiciness of order flows. And so that's where we are today. We don't need I don't have a good answer to that question. And I don't think that that'll really unfold for another quarter or two.

Okay. Got it. Thanks.

Thank you or next question is from Arun vishwanath on with RBC Capital markets. Thanks. I hope you're staying safe there. I just wanted to understand I guess when you look at you know, your commentary that some of your International locations are closed. So should we expect I guess the greatest decline in your home or sales in both Construction Products and Industrial um, is that the right way to think about it? Yes, so our own performance Coatings group and our Construction Products group. What was formerly our industrial segment has our greatest exposure to markets outside of North America off and you know, Europe is seeing has been seeing weak demand as we've been communicating for a year. We've had some spots of brightness there in the last couple of quarters.

But not quite half of our European Opera.

Have been closed at one time or another so there's been more aggressive government-mandated closures in various countries in Europe than we've seen in North America and Thursday. I commented earlier is true throughout Latin America and and India and and those are predominantly performance Coatings in construction product group businesses. Okay. Thanks. Yeah, and so I guess just try to understand how this works. I mean when you guys do take a plant down, I think you noted that was about 6% of your sales potential that are affected by close plants. Is it effectively that that whole 6% is lost or is it or are you kind of thinking that maybe 50% of that amount is lost and and not does that real, you know relate to the inventory? I guess. Do you guys already have inventory on hand to potentially service some customers or is it just kind of stops for the time to plan this down?

New neural, that's correct. I mean, you know, we have inventory on hand and depending on the nature of the different business, you know, we can cover close Downs without much much better option for you know, as long as twenty or Thirty days after that your inventory depletion based on certain product categories can be problematic and in one particular formula or color versus others, but it's very circumstantial to plants. You know, as I said, we had a plant in a way that was closed as part of our performance Coatings group has been reopened. We split a single a marine coating single, uh shift plant into two shifts. We had an infection on a shift. We may close the plan for 2 days aggressively disinfected it and quarantined the shift of the people that were working with the individual that was infected and Broadway.

At the other shift that was not and so I could give you a plant by plant circumstance. I think all companies were operating are becoming much more Nimble as to how to segregate shifts how to do cleaning between shifts how to understand we had a we had a plant where a contractor who was in to repair equipment was diagnosed with a coronavirus and he had been in that plant 10 days prior and we didn't know it for 10 days. We closed the plant. It's actually a plant currently closed and we're closing at 4 6 days. We're cleaning that place and that's 6 days plus the 10 days when the last time the contractor was in there. It's a 16 day. Interestingly the plants that have been affected in the United States are all dead. You know Metropolitan New York-New Jersey area and from what we can tell that then all at home infections because we have not had any hot spots off.

a reference to close a plant clean it and then

Bring people back in the appropriate time has been affected or or effective. So that that's probably more than you need to know but it's very circumstantial inventory plays a big part having a protocol by which you understand how quickly you can get back in business and then understanding what the government mandates our so for instance we're closed in our two major plants and in fact, and they're set to reopen in another couple of weeks that closure could be extended and and we don't know yet. There's been closures in other countries that have occurred and then we've had three openings

Okay, so I guess it it all depends on how long the plants are down for so so I guess just just to follow up. So typically I guess the inventory levels that you do keep it very often that also varies but or or should we assume it's kind of maybe at least maybe 30 days or so. So if there's a 30-day shut down, maybe you can manage through that or is that the right way to think about it off business by business, but I do think that in almost all of our businesses, you know, we could get by for a period of twenty to Thirty days, but after that you begin to negatively impact your ability to supply customers particularly in uh more unique product categories. Okay. Thanks. Sorry to take up so much time at this point do we gain or do we anticipate any closures anywhere of 30 days or more but uh circumstances could be different in different parts of the world.

Great and just lastly similarly on the supply chain. So I know a couple of years back you had some issues with sourcing. Mme may be out of Asia and and some other Ra's has anything that transpired you expect any of that. Um, you know, is that kind of factored into your statement about maybe not expecting as much of a tale one from the raw side or how do you think about the supply chain for your input costs? Yeah, we we try and pay attention to that every day. I commented earlier on Silicon which was an issue a few weeks back seems to be okay today cleaning product and this was should not be a surprise cleaning product raw materials are an issue and we get what we need relative to past allegations in some cases. We cannot get what we need to meet in an explosive demand dead.

And so that is a product category that that we pay attention to a lot that impacts some of our consumer businesses. So those categories are significantly ahead of Prior years, but in certain circumstances may not be meeting demand because of raw material supply the same is true in our Legend brand business that makes HEPA filter equipment and filter change and Industrial disinfecting and cleaning products including products that are sold in the hospitals. That was before all this happened and we could sell more of those products if we could get more raw materials.

Okay.

Thanks. Good luck with the restaurant. Thank you. We have our next question from Kevin McCarthy with vertical research is good morning. How are you? I just wanted to probe a little bit more on the subject of detrimental margins as you look across the portfolio or their businesses that would stand out to you as having unusual racial issues of a fixed versus variable costs, you know on either end of the spectrum trying to get a handle on you know, how we might take some of these larger than normal sales variances and then take them down to the bottom line during this period of this location.

Sure. I don't know that that's particularly true in general across RPM. Obviously, every business has its own break-even Point wage. If it's truer in certain segments than others, it would be in our specialty segment. And so you have businesses like our Dayglo fluorescent color business or other specially said businesses that have lower than average gross margins, but but higher-than-average ebit margins and so they do have a a fixed point there. You're already seeing that in the revenue challenges that we've been having in the last couple of quarters in our Specialty Products group. Those numbers would have been somewhat worse were it not for the map to growth programs, but in general when you look across our Construction Products group, you look across our performance Coatings group. There's a high level of variability between raw material cost per month.

Obviously are variable to sales and probably represent 40% of our p&l and selling costs which depending on the business are split may be fifty-fifty between fixed and variable or two thirds fixed and 1/3 variable but a pretty high level of variability and a lot of our business has off. Okay, that that's helpful and then Frank I wanted to ask you to having suspended to share repurchases. I expect a lot of companies will do what is your current view on m&a have you hit the pause button there as well or or do you see some opportunities, you know with lower multiples, for example, sure. Well, we have hit the pause button on that, you know, we are looking at a couple of smaller size transactions that were all but gone in in, you know, I think we're working with those businesses on what to do in birth.

Terms of timing and other items, but in terms of new transactions, I think our cash flow that had been devoted to looking at a positions and or repurchasing our stock and as you can see our cash flow generation is better than it's ever been will be devoted to continuing operations maintaining our divorce and everything else to repaying debt.

excellent

Thank you so much. Thank you. And thank you. We have our last question from Kevin Kosovo with North Coast research. Hey, good morning. Good morning. Thanks for choosing me in as long as you you know, obviously the coronavirus is impacted the US in different places at different times and in different degrees and the states have responded differently about in terms of how their prohibiting construction activity. So as we look at do you have any visibility in terms of the states that are most prohibitive in terms of construction like New York Michigan places like that how your construction end markets are doing versus other parts of the country where you know, there's less prohibitive restrictions in place. Just curious if you have any visibility and can separate between the different regions theyre sure for the most part construction activity in general and particularly as it relates to infrastructure.

Is up and running throughout North America. The most states are following the Department of Homeland Security guidelines, which qualify a construction activity just as essential the state that I'm aware of and and this could be a different other places the state that I'm aware of that had the harshest, uh, focus on construction was Pennsylvania and the construction industry worked with the governor's office to talk about p p e protocols and social distancing and what was happening in other states and within a week or ten days the original a halting of construction activity in Pennsylvania was East and I believe now Pennsylvania is following the Department of Homeland Security guidelines on construction. We saw a a similar order in Quebec province of Canada, and that has also been East somewhat dead.

The rest of North America as far as I know sitting here today is allowing construction activity as long as as there is a maintenance of sucks p p e and social distancing protocols in in a number of our areas. It's truer than most when you're doing Roofing activity log in the USL business and your activities outside or outdoors. I think there's less concerned if you're doing flooring work and you can maintain all those protocols off again, I mentioned spiky business one of the reasons we're seeing spiky business in that business activity is it requires the shutdown of a manufacturing operation to get home and do rehab and or replacement of floors, whether it's manufacturing facilities institutional facilities and in particular for roofing dead.

schools in

In universities those all have uh, a closure areas that are allowing for some of the construction activity that we do and and so we'll see each other that's been beneficial for us or perhaps is pulling some summer work into the into the fourth quarter, but it's very spiky and what report the results in July when we have a nice 4th quarter results final. Okay, great. And then on the DIY side the strength that you're seeing there, what's your sense? I mean is this something you believe is, you know month near term phenomenon is people are are have stay-at-home orders in place that they're looking for things to do going to Home Depot and doing a small project themselves or and when those orders are lifted that that maybe we should get back to normal or is this, uh, friend that you think could last for a while is you know, as maybe people don't want contractors coming in the home and and look to do things themselves. Just curious your thoughts they're dead.

Sure, I it really depends. I think that this will be somewhat spiky now because people are at home and they you know, when I'm tired of watching Netflix, they can get at the small project paint or home decorating and repair activity that they want. There is a a decided shift two people doing it themselves as opposed to having outside contractors come in and do it do it for them. It would be nice to think that things would revert back to normal. So a slower level of POS perhaps when the world gets back to more normal this goes without saying I think it depends on how quickly a medical advances save the day if you will and if that doesn't happen and for instance the United States were seeing a dead.

A meaningful and sustained unemployment rate that's ten twelve percent which some people believe for a period of time that will negatively impact our DIY business over time, but all of that circumstantial to what's coming this summer and this fall related to the impact of the coronavirus and how quickly people can get back to work. And that's what the medical outcomes relative to vaccines are treatments are

Okay. Thank you very much. Thank you.

Thank you. I will now turn the call back over to Frank Sullivan for a closing remarks. Thank you very much Vanessa. I'd like to thank our Associates around the world for their efforts wage. They have continued to grow the business while carrying out our map to growth restructuring program very effectively. Now, they're demonstrating incredible resilience by also finding ways to protect their health support their communities and maintain our business operations in particular. I'd like to thank the men and women who courageously courageously show up to work every day in our manufacturing facilities and distribution centers. These front-line associates are keeping RPM running to the benefit of all of our Associates our customers and our shareholders off.

We look forward.

Yes.

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