Welcome to RPM International's conference call for the fiscal 2022 third quarter. Today's call is being recorded. This call is also being webcast and can be accessed live or replayed on the RPM website at www.rpminc.com. 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 differ materially. For more information on these risks and uncertainties, please review RPM'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, RPM has 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 wish to ask a question, you'll need to press star then 1 on your telephone. Please note that only financial analysts will be permitted to ask questions. At this time, I would now like to turn the call over to RPM's Chairman and CEO, Mr. Frank Sullivan, for opening remarks. Please go ahead, sir. Good morning. Welcome to the RPM International Inc. investor call for our fiscal 2022 third quarter. Joining me on today's call is Russell Gordon, RPM's Vice President and Chief Financial Officer, and Michael Laroche, our Vice President, Controller, and Chief Accounting Officer. I'll share a broad commentary on our consolidated performance for the quarter. Mike will provide details on our financial results, and Rusty will conclude with our formal remarks on our outlook for the fourth quarter of fiscal 2022, after which we'll take your questions. Please note that our comments will be on an as-adjusted basis, and all comparisons are to the third quarter of fiscal 2021, unless otherwise indicated. We provided a supplemental slide presentation to support our comments on this call. It can be accessed in the Presentations and Webcast section of the RPM website at www.rpminc.com. For the third quarter of our fiscal 2022, RPM generated record consolidated EBIT and sales despite a difficult comparison to the prior year. These results were driven by our associates worldwide who persevered despite an extremely challenging operating environment, including ongoing raw material and labor shortages, Omicron-related disruptions that were particularly acute in the third quarter, as well as material wage and freight cost inflation. Our consolidated adjusted EBIT growth was driven by three of our four segments, Construction Products, Performance Coatings, and Specialty Products, which leverage selling price adjustments and operational improvements to the bottom line. Our Consumer Group is the outlier. Mike will discuss this in more detail when he presents our segment results. With our primary raw material costs up more than 40% on average versus a year ago, our consumer group will need to catch up with significant selling price increases, which will be instituted at the end of this month. We have been fast to respond to supply chain challenges by quickly scaling up in-house resin production at manufacturing facility we acquired in September. Additionally, due to our ongoing investments in the fastest-growing areas of our business, our high-performance building construction and coating systems have generated accelerated growth. Construction and industrial maintenance activity is robust, and energy markets have recovered while consumer takeaway remains strong. Due to three years of extraordinary work by our associates to implement our MAP to Growth operating improvement program, we have made structural improvements to RPM while maintaining our entrepreneurial culture, which is a core strength of RPM. As a result, our Performance Coatings Group and Construction Products Group are operating not only at record sales and EBIT, but at record margins in the third quarter. Our Specialty Products Group is trending towards this same performance with record results in sales and EBIT in improving margin performance. We are making good progress in our consumer business. In short, we are playing offense almost everywhere, investing in accelerating organic growth, significant increases in capital expansion, particularly in the areas of Nudura ICF, roof restoration coatings, and a number of our consumer product areas, all of which are building positive momentum as we go into the fourth quarter and we roll into fiscal 2023. I'd now like to turn the call over to Michael Laroche to discuss our financial results in more detail. Thanks, Frank, and good morning, everyone. During the third quarter, we generated consolidated net sales of $1.43 billion, an increase of 13% compared to the $1.27 billion reported during the same quarter of fiscal 2021. Organic sales growth was 13.4% or $170.1 million. Acquisitions contributed 1.4% to sales or $17.8 million, while foreign exchange was a headwind that decreased sales by 1.8% or $23.4 million. Adjusted diluted earnings per share were $0.38, which was unchanged compared to the year ago quarter. Our consolidated adjusted EBIT was up 0.8% to a record $80.6 million compared to the $79.9 million reported in the fiscal 2021 third quarter. On a double stack basis, comparing fiscal Q3 '22 to pre-pandemic Q3 of FY 2020, sales, EBIT, adjusted EBIT, net income, diluted EPS, and adjusted diluted EPS all achieved double- or triple-digit growth. Similar to the first and second quarters of fiscal 2022, our third quarter performance reflects the benefits of our balanced business portfolio, where softness in one segment is generally offset by strength in the others. During the third quarter of fiscal 2022, three of our four operating segments, Construction Products Group, Performance Coatings Group, and Specialty Products Group, generated strong double-digit sales growth. Combined sales in these three segments increased 19%, while sales in the consumer segment were up modestly. Again, after removing consumer, the remainder of RPM produced exceptional adjusted EBIT growth of 97%. Our consumer group continued to be disproportionately impacted by inflation, as well as by Omicron-related labor and supply chain disruption, particularly during December and January. This instability in supply caused inefficiencies and continued to negatively impact conversion costs, resulting in a decline in adjusted EBIT at our consumer group for the fourth consecutive quarter. Later in the call, we'll discuss the actions we're taking to address these challenges affecting this segment. Our Construction Products Group generated third quarter record net sales of $482 million, up 21.7% compared to the fiscal 2021 third quarter. Organic sales growth was 23.2%, and acquisitions contributed 2.2%. Foreign currency translation headwinds reduced sales by 3.7%. CPG record revenue growth was largely due to the segment's ongoing success in promoting its differentiated restoration solutions, which offer particular advantages versus new construction given the current raw materials and labor shortages. These same challenges have continued to help speed the adoption of the segment's innovative building envelope products. CPG's fastest-growing businesses were those providing roofing systems, insulated concrete forms, commercial sealants, as well as concrete admixtures and repair products. The segment's international operations generated strong top-line growth in local currencies, which was muted by the strengthening U.S. dollar. CPG fiscal 2022 third quarter adjusted EBIT increased 89.7% to a record $35.1 million. Despite a difficult prior year comparison, CPG was able to dramatically increase adjusted EBIT and EBIT margin to third quarter records due to improved product mix, volume growth, and operational improvements. All of these factors, combined with selling price increases, helped to offset higher raw material inflation. Our Performance Coatings Group's fiscal 2022 third quarter net sales were a record $270.9 million, an increase of 19.6% over the year ago period. Organic sales increased 17.8%, and acquisitions contributed 3.4%, which were partially offset by foreign currency translation headwind of 1.6%. PCG continued its momentum with all of its North American businesses generating double-digit organic sales growth. PCG's businesses serving emerging markets generated explosive growth, and its European companies continued their steady rebound. Driving its strong top line were increased industrial maintenance spending, recovery in energy markets, and price increases. PCG's best performing businesses were those providing polymer flooring systems, corrosion control coatings, and raised flooring systems. Adjusted EBIT increased 89.9% to a record $26.8 million during the third quarter of fiscal 2022. Adjusted EBIT increased as a result of volume growth, operational improvements, and a more favorable product mix. Additionally, adjusted EBIT margin was a third-quarter record. Specialty Products Group reported record net sales of $189.4 million during the third quarter of fiscal 2022, an increase of 11.9% compared to the fiscal 2021 third quarter. Organic sales increased 11.9%, and acquisitions added 0.8%, which were offset by unfavorable foreign currency translation of 0.8%. SPG generated record sales as a result of strong performance at nearly all of its businesses, with the highest growth coming from those serving OEM and food additive markets. In addition, this segment's sales of disaster restoration equipment rebounded after securing a supply of semiconductor chips and reconfiguring its products to accommodate them. This is an example of how our businesses quickly adjust to challenges, demonstrating a key advantage to RPM's entrepreneurial culture. This business did face a tough comparison to the prior year period, when demand for its restoration equipment was inflated because of Winter Storm Uri. Adjusted EBIT was a record $26.6 million in fiscal 2022 third quarter, an increase of 5.4% compared to adjusted EBIT of $25.3 million in the last year's quarter. This record adjusted EBIT was largely due to operational improvements. Our consumer group achieved record net sales of $491.6 million during the third quarter of fiscal 2022. An increase of 2.9% compared to the third quarter of fiscal 2021. Organic sales increased 3.6%, which was partially offset by unfavorable foreign currency translation of 0.7%. As we anticipated, the segment grew revenue in part due to its ability to mitigate the severe alkyd resin shortages it had experienced by leveraging the new Texas manufacturing facility we acquired in September. During the third quarter, sales and productivity were challenged by unreliable shipping and supply resulting from labor shortages caused by the Omicron variant, particularly in December and January. Speaking of challenges, the Consumer Group also faced a difficult comparison to the prior year period when sales increased 19.8% and adjusted EBIT increased 48.6% due to elevated demand for its home improvement products during the pandemic's first phase. Fiscal 2022 third quarter adjusted EBIT was $17.2 million, a decrease of 63.9% compared to adjusted EBIT of $47.8 million reported during the prior year period. Due to the nature of its products and the markets it serves, inflation has been more impactful on the Consumer Group than RPM's other segments, and raw material inflation, in particular, has had the most significant impact on EBIT. Partially offsetting these factors were price increases and operational improvements, as the consumer group is currently investing in capacity and process improvements to meet customer demand, as well as build resilience in its supply chain. The consumer group is continuing to implement price increases to catch up with the inflation this segment has experienced over the last four quarters. Lastly, I'd like to note that we have significant liquidity, which enables us to fund internal growth initiatives, make acquisitions, reward our investors with cash dividend payments, and repurchase our shares. Helping to keep our liquidity strong is a $300 million bond offering we completed in January. Also, during the third quarter, we repurchased $15 million of our common stock. Now I'll turn the call over to Rusty to discuss our outlook. Thanks, Mike. For the fiscal 2022 fourth quarter, our operations and those of our suppliers are expected to be impacted by ongoing supply chain challenges and raw material shortages, which will exert pressure on revenues and productivity. The strengthening U.S. dollar will also unfavorably impact the translation of our results in international markets. In addition, the war in Ukraine is creating some supply and inflationary pressures, which Frank will address in a little bit. While it's too soon to tell, rising interest rates may slow business and consumer spending in the coming months. Despite these challenges, we expect to generate fiscal 2022 fourth quarter consolidated sales growth in the low teens versus a difficult comparison to last year's fourth quarter sales, which grew 19.6%. On a segment basis, we anticipate sales growth in the low teens% in all four of our operating groups as a result of strategic investments we are making to capitalize on market opportunities and industry trends. We anticipate that consolidated adjusted EBIT for the fourth quarter of fiscal 2022 will increase in the low teens% versus the same period last year when adjusted EBIT was up 10.6%. We expect that earnings will continue to be affected by raw material, freight, and wage inflation, as well as by the impact on sales volumes from operational disruptions caused by raw material shortages. Our consumer group will be disproportionately impacted by these issues. Its EBIT margins have eroded all three quarters of this fiscal year due to inflationary pressures, which have a greater impact on the consumer group than RPM's other segments. We continue to work to neutralize these factors by improving operational efficiencies, employing additional price increases to catch up with inflation, and adding manufacturing capacity to improve resiliency. This concludes our prepared comments. We are now pleased to take your questions. Thank you. As a reminder, to ask a question, you will need to press star one on your telephone. Again, that is star one to ask a question. To withdraw your question, just press the pound key. Please stand by while we compile the Q&A roster. Your first question comes to the line of Frank Mitsch from Fermium Research. Your line is now open. Good morning, Frank. Hey, good morning. Hey, good morning, Frank. You mentioned that raws and some of your primary materials were up 40% plus in the third quarter. That was significantly up from what it was in the second quarter. Can you talk about, you know, where you see that trending? What is of most particular concern for you in terms of raw material availability? Sure. I can give you some examples, I think, Frank. First of all, we were starting to see some flattening out of raw material prices in certain resins and other categories of oil-related items until the onset of the Russian war on Ukraine. That flattening out has changed, and things are once again, for geopolitical reasons now, looking like they might be heading up. It's anybody's guess as to where we'll be in the fourth quarter. I can give you some specifics, just to put things in context. For instance, in consumer aerosol cans year-over-year are up 66%. Alkyd resins are up 113%. Acrylic latex is up 41%. Monomers are up 86%. More appropriately to our industrial product lines, epoxy resins year-over-year are up 72%, MDIs up 106%. It's a litany of such higher increases in critical raw materials. We had seen a significant improvement in availability. Most of the force majeure—not all, but most of the force majeure that had been announced over the last, you know, 12-15 months had been rescinded. Once again, we're anticipating some challenges in certain resins, particularly some bio-based resins that we source in Europe and from India as a result of the disruptions from the Ukraine war. Got you. You did mention a couple of times on the call that you are implementing price increases. You continue to implement price increases. How do we think about when, you know, given what we know, you know, today in terms of when RPM will be able to have pricing cover the impact of raws? And I guess part of that question is also if you're looking at sales in the fiscal fourth quarter up low teens, how are you looking at that in terms of price versus volume versus FX? Sure. On average, in the quarter, price was up 12.5%. You can see when you look at the organic growth, we had tremendous organic growth in our Construction Products Group and our Performance Coatings Group. A modest mix would appear flat in the Specialty Products Group, but was a mix of some organic growth in certain units and others not. When you do the math, you'll see that we had actual unit declines in the quarter in consumer. That was as much a result of the manufacturing and operating disruptions, raw material challenges, as demand remains pretty solid there. As we think about the fourth quarter, as Rusty indicated, we've got really good momentum going into Q4. We would expect to continue to operate at record levels of sales, EBIT and EBIT margins in our Construction Products Group, Performance Coatings Group, and at this point, we believe in our Specialty Products Group. On a consolidated basis, I think we have a shot at having record results. It really depends on where we finish the quarter in consumer. As we sit here today in Q4, price will add about 12.5% in terms of revenues. As Rusty indicated, we are going out with another round of price increases across a number of product lines in RPM where appropriate, but in particular in our Consumer Group at the end of this month in relationship to both being impacted the most directly by raw material costs and packaging costs, being small project driven in paints and patch repair and caulk and sealants. We have a disproportionate packaging impact there as well. We will report results in July. I would anticipate that we will be somewhat higher in the fourth quarter than the 12.5% based on our current pricing situation across RPM today. Got you. Very helpful. Thanks, Frank. Thank you. Your next question comes from the line of John McNulty from BMO Capital Markets. Your line is now open. Yeah, good morning. Hey, John. Thanks for taking my question. Hey, Frank, and great job in a really tough environment. I guess I wanted to dig into maybe two areas. The first one would just be on the alkyd situation. I know it's been a really tough overhang for you guys for the last, call it three quarters or so. It sounds like you've got some of that remedied with the Texas facility up and running. I guess how should we think about how that takes some of the pressure off the consumer business? It seems like there's a lot of other moving parts, but I guess how much does that flip the switch where things get, you know, noticeably better for you? Sure. Since the fall, we have added internal capacity with the addition of the Corsicana, Texas plant and the team's ability to ramp up successfully in producing alkyd resins, which they had not done before. That was part of the reason for the acquisition. There was another supplier during that timeframe that withdrew supply from the marketplace. It remains a challenging environment, let's say. The alkyd situation is a particularly critical raw material for our Consumer Group. Got it. You've got your asset running, but it sounds like somebody else actually took more capacity out. Maybe it's helped, but not as much as it otherwise could have. Is that right? That's correct. Got it. Okay. On the construction business, you know, the volumes are really they're seeming like they're kind of really humming at this point. I guess. Can you speak to how you see that playing out throughout the rest of this year? Because you have kind of a contractor approach where you've got your own labor force, like, I guess I assume it gives you better visibility around that business. I guess how far out in terms of line of sight do you have around the business trends that you're seeing there? I would tell you that the line of sight anywhere isn't very good relative to all the dynamics in the marketplace. You know, as we roll into Q1, I would expect us to have record results in sales, earnings, and margins everywhere. That includes consumer based on the actions that we're taking and also rounding finally some easier comps after the extraordinary kind of stay-at-home driven boom in DIY products that we're rounding now. You know, I think the organic growth that we're seeing in our Construction Products Group for the foreseeable few quarters, as far as we can tell, will remain in the mid to high single digits on an organic growth basis. You can add about 12% in terms of sale price impact to that. Again, without getting too far over our skis, just because it's difficult to predict the future in this environment, the momentum going into the next couple of quarters is really strong, and it doesn't seem like there's anything that will interrupt that at this point. Got it. Perfect. Thanks very much for the color. Yeah. I would add one more thing to that, John. We're, you know, whether it's in our Nudura ICF or roof restoration coatings, as we sit here today, we could be selling more, but we are out of capacity in a few of these product areas. We have a significant capacity expansion program in Nudura, the first elements of which will go into effect at the end of the fourth quarter and through the summer. We have a significant capital expansion in our roof restoration coatings, which should roll out throughout the balance of this calendar year. Got it. Actually, just as a follow-up to that, can you help us to understand how much capacity that might unlock? I can tell you in roof restoration coatings, probably another $50-$100 million. In Nudura, we hope to realize another $40-$50 million of capacity by the end of this calendar year, and as much as another $100 million of capacity by the end of the summer of 2023. Wow. Okay. Pretty notable. Okay. Thanks very much for the color. Really helpful. Thank you. Your next question comes from the line of Ghansham Panjabi from Baird. Your line's now open. Good morning, Ghansham. Morning, Frank. Thanks for fitting me in. You know, just given that Europe is a pretty significant end market for RPM, can you just kind of comment on current operating conditions post the war? Also anything that you may be seeing in China at this point, just given the lockdowns, et cetera. Sure. Our business. First, I'll tackle Asia. Our business in Asia is relatively modest compared to some of our peers. We're not seeing much of an impact, but mostly because we don't have a big slug of business there. The business that we do have is driven by our industrial product lines. At this point, it's relatively stable. We're not seeing much negative impact. As it relates to Europe was recovering more slowly than North America, for sure. That recovery seems to be okay today, although we have not seen any meaningful disruption to our business activities as of yet, although we're certainly heightened to that. As it relates to the Ukraine situation, we were very quick and early to discontinue any and all business activities in Russia. We don't have any manufacturing business there. The business we do have is relatively modest, so it's about $5 million or $6 million on an annualized basis. We both felt it was the right thing to do, and certainly wanted to respond to concerns that a significant number of our workforce in European manufacturing and distribution of Ukrainian descent. You know, that's the impact on Russia and the Russian war in Ukraine. In general, we're heightened of kind of anticipating impacts, but we haven't seen it yet. That's very helpful. Thank you, Frank. Just in terms of the energy end markets, I mean, obviously you've seen a major step function higher with energy prices, et cetera. Just remind us how big energy is as an end market for RPM, and what you're seeing in that end market, from a recovery standpoint, through, you know, post-COVID. Sure. Our energy exposure is mostly in our Performance Coatings Group, and mostly in Carboline. The Performance Coatings Group, let's say, is about $1.1 billion. Carboline and Stonhard are by far and away the two largest business units there. I would guess directly and indirectly, and now you're talking broadly, you know, oil and gas and refinery and pipelines and things like that, probably $300 million or so of exposure to oil and gas markets broadly. Again, as you can see, we had high-teens% organic growth, high single-digit% unit volume, and there's somewhat higher growth in that business than average in those businesses or product lines that are exposed to energy markets, and we see that continuing. There's a little bit of a double-edged sword in that it is driving a significant increase in capital spending and business for us in our industrial segments. It's also driving a significant increase in our raw material costs as well. Fantastic. Thanks so much. Thanks, Ghansham Panjabi. Your next question comes to the line of Steve Byrne from Bank of America. Your line is now open. Good morning. Good morning. You have this intermediary between you and your end customer in your consumer segment, and I just was curious, what is the process that you go through to get price in the consumer segment? Is that—is there, you know, a delay? Is that a negotiation? Is that represent a bigger challenge for you than in your other segments? Yes, there is typically a delay, and yes, it is a negotiation, particularly across our large customers. We've announced three price increases over the last 12 months, and the timing of those being instituted across large customers, it varies a little bit, not a lot. We are both disproportionately being impacted by raw material costs, both direct chemical raw material costs as well as packaging costs in our consumer business, and as our numbers reflect, somewhat behind the curve in terms of addressing cost price mix, which is necessitating a fourth price increase that will be announced at the end of this month. Frank, you mentioned labor shortages in this segment. Is that RPM employee labor shortages? Is that your customer or your distribution channel? Is that improving at this point? It was really in two areas. The biggest area, our largest plants are our consumer plants, and we had in a number of Rust-Oleum plants, both our largest DC, which is in Wisconsin, and our largest manufacturing facility, which is in Wisconsin, a meaningful impact of Omicron in terms of either people that were out infected, and/or people that were quarantined because of exposure. It had a disproportionate impact on our consumer business, particularly Rust-Oleum. We also saw it in our consumer business with, you know, the traditionally just-in-time freight delivery of raws into our plants and then distribution where some of our customers pick up, and in some cases, we handle freight. There was a disproportionate impact over that period of time, we believe because of Omicron on freight availability and truckers, and so that impacted the segment as well. In the last month of this next quarter, are you seeing things improve for you? Yes, we are. In that category, we're seeing things improve, and the flow through our plants is significantly better. That will help profitability and margins as we go into the fourth quarter. You know, the Omicron spike, both across RPM, we've been tracking quarantine and infections in COVID literally from March of 2020 every week. The Omicron spike was shockingly quick, high, and then dissipated pretty quickly. We're back to a much more normal pace in terms of not having that same disruption at the end of February and in March. We're hopeful that, you know, the worst of COVID is behind us. It seems like if COVID isn't done with America is done with COVID. Very good. Thank you. Thank you. Your next question comes to the line of Vincent Andrews from Morgan Stanley. Your line is now open. Good morning. Hey, this is Steve Ames for Vincent. Thanks for taking the question. Just wanna ask you a question on cash flow. Operating cash is down about $500 million year-over-year through the first nine months, and it's mostly on working capital. Could you just talk a little bit on how you're thinking about operating cash generation for the full year and if you're expecting kind of a big release of working capital in the fourth quarter? Sure. You're absolutely right. You know, operating cash flows were negatively impacted by working capital, largely driven by supply chain issues we've been discussing, and inflation, quite honestly. You know, we expect that inflation is going to continue, and we're gonna continue to purchase opportunistically where we can to help lock in availability and price. You may see some unusual relationships in working capital as it relates to cash flows for the next few quarters. Okay. Thank you. Maybe just a quick follow-up on the conversion cost. Is there a way you can maybe size, like, I guess, the cumulative impact, you know, throughout the full year so far and, just so we can get a, like, an idea of, like, what the upside is when ultimately that begins to reverse? Sure. You know, if you look at our EBIT margin in general, quarter by quarter, and in particular, for instance, this quarter where we're suffering the worst in consumer, the vast majority of that EBIT margin decline is a gross margin decline, though we don't disclose gross margins by segment. Of that, I would tell you about two-thirds are maybe a little bit more are material related, and about one-third is operating efficiency and throughput in the plants. We fully expect in all of our businesses as we get back to normal, the workflow disruptions are mitigated or eliminated and put behind us, and we have normal flow through in our plants to where we were just a couple of years ago, that one-third impact on our margins would be recovered. The balance is literally a cost price mix dynamic, which we are managing better in our industrial businesses than we have in our consumer businesses year to date. Okay. Thank you. Your next question comes from the line of Kevin McCarthy from Vertical Research. Your line is now open. Good morning, Kevin. Good morning. How are you? Good. With regard to your Performance Coatings segment, you said in your prepared remarks that you were seeing explosive growth in emerging markets. That word explosive got my attention. I was wondering if you could kind of talk through where you're seeing the strongest growth, and what exactly is driving that. Is it to do with maybe some of the acquisition activity that you've done or more organic in nature? Curious if you can offer any color there. Sure. It's more organic in nature. You know, we've taken a broader RPM platform approach to some of the developing markets. There's a really good cooperation between both our Performance Coatings Group and our Construction Products Group, the two groups of RPM that have the greatest international exposure and the greatest developing world exposure, and a real focus on driving organic growth and investing. We're seeing significant growth in India, significant growth in Africa, in the Middle East, in Latin America. I would tell you some of it is recovery from COVID, for instance, in Latin America. Some of it is a result of a more intense focus on a more RPM platform basis, and putting these regions under proven leaders who are responsible for a broader swath of RPM businesses and products, and it's working. The last thing I would note is it's explosive on a relatively small base, but if we keep growing, that base will keep getting bigger and become a more meaningful part of our business. Great. Then my second question was much broader in nature. If I look at slide 11 of your deck, your sales forecast for the fourth quarter is extremely uniform across all of your segments. They're all expected to grow at a low teens pace. I was wondering if you can talk about 2023. Perhaps it's early to get specific on guidance there, but you know, sitting here today, how would you expect those trends to diverge moving forward? You know, do you have in your mind a segment that you would expect to grow materially faster than the others or slower at the other end of the spectrum? I think two comments on that, Kevin. One is, I think the furthest out we can really see is a quarter or two. As I mentioned earlier, as we sit here today, I would expect every one of our segments, including Consumer, to be generating solid sales and earnings growth in Q1. The momentum that we're seeing in our Performance Coatings Group and Construction Products Group will continue. The Specialty Products Group should be back to record margins, not just higher sales and earnings. We'll see solid recovery in Consumer, both on the top line and bottom line, in part because the actions we're taking are taking hold, in part because of the disruptions of COVID are being put behind us, and in part because we'll be rounding some easier comps in Consumer. You ought to see record results in Q1 for RPM on a consolidated business in each of our segments. I think this outlook really is a continuation of what we're experiencing in our three more industrial segments and an expectation that we're finally gonna see positive results out of consumer. Longer term, again, unless the dynamics change, we would expect to have a solid fiscal 2023, and we'll provide pretty good details on that in July. We also hope to be able to provide some longer-term perspective on where we're going with a MAP to Growth 2.0, something that many of you know we've been working on for a while, but our willingness to get out there and make longer term commitments has been disrupted by COVID and supply chain challenges that were working their way into something more normal and stable until the Russian war in Ukraine. I think that's the caveat here, we're not seeing much of an impact on our European business yet, but time will tell in the coming months as to what impact there might be and to what extent. Excellent. We'll look forward to the updates. Thanks, Frank. Thanks, Kevin. Your next question comes from the line of Arun Viswanathan from RBC Capital Markets. Your line is now open. Morning, Arun. Good morning, Frank. Thanks for taking my question. I hope you're well. Yeah, I guess I just wanted to understand the low teens guidance. You know, I think you mentioned 12.5% price. Is that to imply kind of low single-digit unit volume growth? Or maybe a little bit better and offset by a little bit of FX pressure? How should we think about, you know, kind of your volume versus price, you know, dynamics? Sure. I think, particularly in Performance Coatings and Construction Products, we're expecting a mid- to upper-unit volume growth. You know, the continuation of what's been about a 12%, 12.5% on average price increase. You could see results on an organic basis in a mid- to high teens. That's gonna be knocked down a little bit by the strength in the U.S. dollar, which will take a couple points off our results. I think, you know, overall mix, it's certainly possible that we'll continue mid-teen performance in some of the industrial businesses and would expect to see kind of a low teens, kind of a 10, 12%-ish in consumer. That's where we are. It'll be a mix of both. I think we feel pretty comfortable with this guidance, and as I said, I think we'll be in the fourth quarter at record EBIT on a consolidated basis and hopefully record EBIT margins. It just depends on how quickly the actions we're taking in consumer affect a stronger recovery there. Okay, thanks. I guess I also wanted to just follow up on a comment you made earlier as far as you know potentially some of the cost pressures that you've been feeling over the last couple of years have been plateauing or flattening out. You know, there was a little bit of a spike I guess with the Russia-Ukraine invasion. Has that moderated now? It does appear that you know some of the energy price impacts have started to moderate as well. Would you say that that's the case? Do you see that this is kind of a longer term impact or is it just you know kind of transitory? It's hard to say right now. Again, we were seeing some underlying positive trends in things like ethylene, propylene, and even some of our direct purchase raw materials. All of that reversed with the Russian war in Ukraine. Really, who knows? I'm not trying to be cagey here. If this thing is resolved, which I think the world's praying for, relatively quickly, then I do think we could see some stability. If this thing expands and has greater impact on oil and gas prices, as well as some of the organic resins that are impacting that we purchase principally from India, but they've spiked up for reasons that some people do. I don't directly understand other than they've spiked up because of the impact of the Russian war. It's hard to know how this will expand and what impact that will have on raws. We are paying attention to both its impact on our European business, which so far, thankfully, has not been much, and its impact on raw material costs, which at least in the near term, have reversed an otherwise positive trend. Great. Thanks. Lastly, if I could just ask about the M&A strategy. I know that there was a greater focus on MAP to Growth over the last couple of years. Are you finding yourselves getting back into the inorganic market as well? How would you characterize the environment there? If there's any focus, what areas are you focusing on and how are you seeing valuations? Thanks. The pipeline of the typical RPM small to medium-sized product lines is pretty good. We would expect to be able to just generally complete, let's say $100 million or $200 million on an annualized basis of product line or business acquisitions. That's been our bread and butter. Large transactions have been in extraordinary prices, and I think that you're gonna see some mitigation in valuations as interest rates rise and inflation is seen as something that is other than temporal. We would welcome that. That's kind of where we are. We wouldn't expect to be an aggressive player at these historic high valuations, which seem to be persisting now in face of significant raw material costs. I can tell you, Rusty, Matthew Ratajczak, Michael Laroche, Rusty's team, did a 10-year bond at the end of January. We're able to capture a 2.95% coupon. If we turned around to do that bond today, it would cost us 4.25% or more. I don't know how well the rise in interest rates and its impact on incremental cost of capital is being reflected in the markets yet, but eventually it will be. Thanks. Thank you. Your next question comes from the line of Joshua Spector from UBS. Your line's now open. Yeah. Hey, guys. Morning. Thanks. Hey, good morning, Frank. Thanks for taking my question. Just a clarification first off, just on the raws inflation. Make sure I heard it right. When you talked about the 40% increase, was that total company or consumer? I guess when you think about that in terms of total variable cost inflation, and COGS, what would that number look like? I'm not sure I can answer the last part of your question, but yes, the 40% is total company, and that's materials and packaging. It does not incorporate freight or labor, which are also up, although certainly not to the same extent. Consumer is somewhat higher, in particular in relationship to its exposure on things like acrylic resins, which again, year-over-year, are up 113%, or alkyd resins 113%. Aerosol cans are up 66%, so that's really specific to Rust-Oleum. They have some higher outliers in relationship to their the small packaging nature of our consumer businesses, and the disproportionate impact of acrylic resins on consumer versus the rest of our businesses. Okay, thanks. That's helpful. Just a specific question on Europe and specifically the performance segment. An epoxy producer earlier shut down some capacity in the region, and part of that decision was related with lower demand. That seems a bit counter in terms of what you guys are seeing in terms of that segment. Curious if you have any thoughts or comments around that. Thanks. Sure. First of all, epoxy resin costs for us are up 70% year-over-year. That's not been a good thing. We have been able to pass on price. There was a reference earlier to our ability to provide supply and apply, which is benefiting us both in a lot of our roofing businesses as well as the Stonhard flooring business. That's been an advantage for us. Epoxy resins and some of the intermediate chemicals into epoxies had some availability challenges earlier in the year. As we sit here today, we're in pretty good shape. Okay, thank you. Thank you. Your next question comes from the line of Silke Kueck from JP Morgan. Your line's now open. Morning, Silke. Good morning. How are you? Good, thank you. Last quarter you said that you had a $200 million headwind from lost sales due to the raw material shortages, and maybe $100 million of that was in the consumer segment. Can you tell how much it was this quarter, how much was in consumer, and what would you think you might experience in the fourth quarter, and how do you think about 2023? Sure. I don't think we had much in the way of discernible lost revenue in Q3, and it had as much to do with the seasonal nature of our business, where, as you know, our third quarter is meaningfully lower than our other three quarters. We haven't seen as much of an impact that we can point to. It is possible that it would be an impact in Q4 equal to what we saw in Q1 and Q2, just 'cause Q4 is a significantly large quarter for us as we build into a construction season, and we build into a consumer DIY season, particularly for exterior use products. The short answer is it did not have a noticeable or measurable impact in Q3 like it did in the prior quarters. For the fourth quarter, if I just put it right, do you think maybe it's like order of magnitude, like in the $200 million range, something like that? I would think it would be half of that, and it would be predominantly in consumer, unless there are raw material disruptions as a result of the Russian war on Ukraine that we don't anticipate sitting here today. But we don't have the raw material disruptions in our industrial businesses that we had for the first half of the year. I mean, for the first half of the year, we had enough significant raw material disruptions, either of direct raw materials or ingredients that went into the chemical raw materials we purchased, that we had to shut production in numerous places. That is not occurring as we sit here today. On the consumer side, the disruptions that we had both from a raw material availability perspective and just the normal throughput is improving again as we sit here today. If we have an impact in Q4, I would bet it would be closer to $100 million across the whole business, but we'll give you the details of that in July. My second question is on resins. What percentage of your cost of goods sold baskets are epoxy resins, alkyd resins, acrylic resins? Like if you add it all together, is it like a third of your material cost? Is it bigger than that? And what percentage can you make in-house now? Or maybe like what percentage can you make next year, you know, given the manufacturing capabilities you acquired? Sure. Yeah. In terms of resins, there's not one resin that's even 5% of RPM's total raw material basket. You mentioned some of the bigger ones we do buy, acrylic resins, alkyd resins, epoxy resins. They are meaningful to different product lines. In terms of in-house production, we are supplementing, as we've talked about, in alkyd resins. You know, that's a nice facility in Texas, you know, to absorb shocks in supply like we've had over the last 12 months. But we continue to do business with a number of suppliers of alkyd resins, and expect to continue that in the future. Our expectation would be that the in-house production on alkyd resins would be somewhere in the 20 or 25% range. As I said, we were moving in the right direction, and then another long-term supplier withdrew their capacity from the market in the last couple of months as well, which was unexpected and something we're adjusting to. Okay. In terms of your savings program, are there any measurable savings from the last bit of like the MAP program that you saw in the quarter, or is all of that eaten up by, because some of it is obviously like procurement of raw materials. Was there any measurable savings you can quantify that you've gotten from the MAP program, like incremental year-over-year? As best we can calculate in the quarter, roughly about $15 million. 15. I'll tell you that the ability of the Construction Products Group and Performance Coatings Group to recover in this environment to record levels of EBIT and EBIT margin has got as much to do with the efficiencies from our MAP operating improvement program as they do from a cost price mix. You know, the timing was lucky. It's been hugely beneficial for us as we face the disruptions over the last year. Okay. My last question is on consumer business. You know, PPG expanded its relationship with Home Depot in like, you know, primers and sealers and concrete paint and, you know, stains. You know, when you look at your market share at, you know, Home Depot or generally your big box retail business, do you think your share is like, you know, flat or up or, you know, down? Can you tell? I don't think we have lost any market share, and there's no area where we can point to. The biggest challenge for us and for most people in the consumer markets, as well as some of the basic architectural paint business is supply. You know, we prided ourselves on fill rates of 98%-99%. It's where we operated for a long time. As a result of both the COVID disruption and supply chain challenges, fill rates have been significantly lower. That's been a challenge for us, for others in our industry, and quite candidly, when you go to one of the big retailers for people in a lot of places. The challenge is supply relative to raw material availability and costs and COVID-related disruptions, much more so than market share challenges at this point. We are expanding capacity in our consumer businesses to make sure, as we put these disruptions behind us, that we can get back to those high fill rates and maintain market share and grow. Okay. Thanks very much. Thank you. Your next question comes from the line of Michael Sison from Wells Fargo. Your line is now open. Good morning, Mike. Hi, this is actually Richard on for Mike. So yeah, first question, you did mention that the Russian invasion had a meaningful impact on the supply chain, obviously. Is that comment based on just the higher derivative price for oil and products, or is there specific products which may not be available, you know, in terms of supply chain, such as TiO2 or other ones? Yeah. We have not seen availability issues directly, but we saw a pretty quick reversal in what seemed like stabilizing prices and in some basic commodity chemicals, some trends that were moving in the right direction that would suggest that maybe our raws would be stabilizing or perhaps over time going down, and that reversed very quickly. It's obviously oil directly, oil and solvents and things like that, but it impacted all of our resins. And then as I mentioned earlier, some of the bio-based resins, soy-based resins, soybeans, stuff like that, there are some availability challenges there, and whether those become big problems or get corrected here in the coming weeks and months, time will tell. Okay, thanks. Then just to follow up on the EBIT guidance, low teens across the board. I mean, basically, can you give us some color in terms of where you see the most growth on the EBIT side? Obviously, for consumer, do you expect, you know, sequential improvement as part of that? Excuse me. This is the operator. I apologize, but there will be a slight delay in today's conference. Please hold and the conference will resume shortly. Thank you for your patience. We appear to have a disconnect, and I believe we're back live on the conference call. Operator, if there are any additional questions, we would be happy to take them. Thank you. Your next question comes from the line of Mike Harrison from Seaport Research. Your line's open. Morning, Mike. Hey, good morning. Maybe just to, I guess, close the loop on the last question that was asked. I didn't hear the response. Do you see particular segments with that low teens EBIT guidance for next quarter, particular segments exceeding that? I think my question would be, is the consumer business, do you expect EBIT there to be up on a year-over-year basis? I would tell you that our Construction Products Group, Performance Coatings Group have an opportunity to outperform that low teens% between price and unit volume. It'll be somewhat mitigated by FX given the strength of the dollar. We see good momentum there continuing in both. They are generating record results on top of really strong results a year ago in Q4. Our consumer business will be moving in the right direction, and we're seeing that. We're taking actions to move it there. You'll see a sequential quarter-by-quarter improvement. I would expect positive unit volume growth modestly there. We've suffered some negative unit volume growth in the last couple of quarters. You'll see good progress there. You'll see improvements sequentially in our margins. I don't think we get back to positive EBIT and stronger margins in year-over-year in consumer until the first quarter of our new fiscal year, which starts on June 1. Great. In terms of the consumer business, you mentioned that your fill rates, I think last quarter you said fill rates were in the 50%-70% range. You said they continue to be still a little bit low. I think we're trying to get a sense of, you know, how much, you know, seasonal demand you're gonna be able to meet, and kind of where those inventory levels are as we head into the spring season. Our fill rates are improving meaningfully week by week. A lot of that has to do with the fill rate challenges we had in Q3, which were related, as we talked about earlier, with the Omicron impact, particularly in our Rust-Oleum manufacturing facility in D.C. They're separate, but very large facilities in Wisconsin, availability of raw materials and packaging. There were also freight disruptions over the last two quarters that impacted fill rates as well. All of that is improving. We're not gonna be back to the levels that we wanna be in Q4, but we're gonna be meaningfully better than we've been in the last couple of quarters. I think that will be part of the sequential improvement that we expect to experience in our consumer group. All right. Last question for me is, you mentioned in the press release that inflation and higher interest rates could be impacting consumer demand. Have you seen any evidence of that yet, or is that just kinda what Econ 101 tells you? No, my comment was really an impact on M&A valuations. It's hard. You know, we compare the consumer demand both sequentially and year over year, but we're also looking back to some of the pre-COVID periods. It's somewhat of a challenge to get a good gauge on where the appropriate consumer demand is relative to the literally 30%-35% unit volume increases we saw for about three quarters in a row during the COVID period because of the stay-at-home orders. Our consumer takeaway is solid, and we think that's continuing and will continue into the summer. I think we and our large customers believe that through COVID, we expanded the base of confident DIYers. We've got a larger base of regular consumers that we're excited about. Our problem has been supply. It's been raw material supply and a related product supply that's reflected in fill rates that have been below where they need to be. All right. Thanks very much. Thank you. There are no further questions at this time. I would now like to turn the call over to Mr. Frank Sullivan for closing remarks. Thank you. Thank you very much for your participation on our conference call this morning. We are looking forward to continuing to build momentum and positive growth into our fourth quarter of fiscal 2022 and to a really strong start to our new fiscal year. We look forward to providing you details of our fourth quarter results in July when those are released as well as an outlook both for fiscal 2023 and some longer term goals that we've been working on for quite some time. I am grateful to the RPM associates who have generated a return to record sales and record earnings despite all the challenges that we faced. We appreciate everybody's investment in RPM. Thank you and have a great day. Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.