RPM International Inc RPM
Q4 2013 Earnings Call Transcript

Transcript Call Date 07/22/2013

Operator: Welcome to RPM International's Conference Call for the Fiscal 2013 Fourth Quarter and Year End. Today's call is being recorded. This call is also being webcast and can be accessed live or replayed on the RPM website at

Comments made on this call may include forward-looking statements based on current expectations that involve risk and uncertainties which could cause actual results to be materially different. For more information on these risks and uncertainties, please review RPM's report 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, RPM has posted reconciliations of the most directly comparable GAAP financial measures on the RPM website. Following today's presentation, there will be a question-and-answer session. Please note that only financial analysts will be permitted to ask questions.

At this time, I would like to turn the call over to RPM's Chairman and CEO, Mr. Frank Sullivan for opening remarks. Please go ahead, sir.

Frank C. Sullivan - Chairman and CEO: Thank you Alex. Good morning, and welcome to the RPM International Inc. investor call for the fiscal year 2013 year-end and fourth quarter period ended May 31, 2013. With me on today's call are Rusty Gordon, RPM's Vice President and Chief Financial Officer; and Barry Slifstein, RPM's Vice President of investor Relations and Planning.

Our 2013 fiscal year was certainly an interesting one. To paraphrase Charles Dickens, it was the best of times; it was the worst of times. Throughout the year, we had a number of one-time adjustments or charges, including in the fourth quarter. These generally fall in four categories; the first related to our prior investments in Kemrock Industries Limited in India. Our fourth quarter charges here have totally eliminated any carrying costs associated with Kemrock.

The second area was our Building Solutions Group Roofing Division, and the settlement of our GSA issue. The charges in the fourth quarter have also squared away this issue, and we have a tentative agreement which we hope will be finalized in the coming weeks.

Also, in the fourth quarter, our Rust-Oleum Group announced plant closures in two areas, one in Rock, Illinois, associated with the Testors division and the other in Europe associated with our European operations. Rust-Oleum has been working for the last couple of years to streamline manufacturing and their supply chain, and while they are a top performing group in fiscal '13, are continuing their focus on rightsizing manufacturing in Europe as well as positioning their hobby division for stronger growth in the future. Those were the reasons behind the plant closures related charges in the fourth quarter associated with Rust-Oleum.

Lastly, earlier this year, in conjunction with our acquisition of Viapol in Brazil, we made the decision to discontinue a small, Stonhard flooring operation in order to take advantage of the manufacturing, sales, marketing, distribution and leadership of Viapol in the flooring area for the Brazilian marketplace. Aside from these one-time adjustments, our deliberate strategic balance between consumer and industrial markets paid off again.

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