ANNUAL MEETING OF STOCKHOLDERS - RPM INTERNATIONAL INC

Financial Performance:

• Fiscal 2026 full-year revenue reached a record $7.9 billion, a 6.7% increase.
• Adjusted EBIT grew 4.4% to a record $1.119 billion; adjusted diluted EPS increased 4.3% to $5.53.
• Fiscal 2027 Q1 sales rose 4.8% to a record level, with adjusted EBITDA up 4.5% and diluted EPS increasing 5.3% to $1.98.
• Operating cash flow in fiscal 2026 grew 17% to $899 million, the second-highest in company history.
• Geographic revenue split for fiscal 2026: 77% North America, 15% Europe, 8% developing southern hemisphere.
• Capital allocation includes a 5.6% dividend increase to $2.28 annually (53rd consecutive year of increases) and active share repurchases.

Guidance and Future Outlook:

• Management forecasts another record year in sales and earnings for fiscal 2027.
• Long-term strategic plan extending to 2030 will be detailed at an investor day on November 9.
• Focus areas include a $75 million SG&A improvement target for fiscal 2027 and over $50 million delivered via Greenbelt programs, with $25 million more in the pipeline.
• Expansion into the data center market is targeted at generating over $100 million in annualized revenue through Euclid, Tremco, Carboline, and Stoneheart units.

Business Segments and Product Lines:

• RPM operates across three segments: Construction Products Group, Performance Coatings Group, and Consumer Group, comprising 20 independent business units.
• Recent strategic acquisition of Calzip (German specialty aluminum/metal roofing) to complement Tremco's North American roofing business.
• Integration of Volteco (Italian waterproofing), aiming to double business size by expanding in Europe and introducing lines to the U.S. via Tremco.
• Ready Seal, acquired by Rust-Oleum, continues rapid expansion in the wood stain and protective products sector.
• Manufacturing footprint expansion includes a new facility in Mumbai, India, following the Malaysia plant opening.

Market and Competitive Landscape:

• RPM outperformed peers in coatings and construction chemicals for total shareholder return over the fiscal year.
• Outperformance against the broader S&P 500 has been moderated recently due to AI and tech stock concentration.
• Strong growth observed in the developing southern hemisphere, where sales rose to 8% of consolidated revenue from under 5% a few years ago.
• Data centers identified as a high-growth market segment driven by infrastructure investment globally.

Risks and Challenges:

• Market volatility noted as a potential risk factor affecting future comments and outlooks.
• Challenges in outperforming the broader market over the last 3–4 years due to the concentrated rise of technology sectors.
• Operational efficiencies remain a focus to address SG&A deficiencies and optimize product lines.

Management Commentary and Tone:

• Management tone was highly confident, emphasizing a track record of outperformance and value creation.
• Leadership highlighted the "Value of 168" strategy (transparency, trust, respect) and the "cathedral builders" culture of retaining top talent.
• Chairman Frank Sullivan credited the company's 80-year success to the founder's philosophy of hiring the best people and letting them work.
• Emphasis on long-term value delivery through earnings growth, dividends, and share repurchases.

Analyst Questions and Answers:

• Volteco Acquisition: Clarified as a strategic move to leverage Tremco's distribution to expand Volteco's unique below-grade waterproofing systems in the U.S.
• CERP/SERP Plans: Explained as a supplemental executive pension plan; RPM remains one of <5% of companies with an active pension, aiming to replace 85-115% of pre-retirement income for qualified long-term employees.
• Retail Distribution: Confirmed "The Pink Stuff" is available at major retailers like Target and online via Amazon and the company shop.
• Data Centers: Validated significant growth opportunities in serving data center construction needs across the portfolio.

Other Key Points:

• The Board elected 12 directors (including new members Jeff Rowe and Tom Gentile) and ratified the appointment of Deloitte & Touche LLP for fiscal 2027.
• Shareholder approval was obtained for 98% of votes for director election, 93% for executive compensation (Say-on-Pay), and 99% for audit firm ratification.
• Founders Bruce Carboneri and William Summers were recognized for retiring after serving during a period where sales grew from $1.9B to $7.9B and market cap increased from $2B to $14B.