RPM International Inc. (RPM) Earnings Call Transcript & Summary

Welcome back, and good afternoon, everyone. It's a pleasure for me to host this fireside chat with Frank Sullivan, CEO of RPM. Frank spent a couple of years out of college in the banking world, but joined his father at RPM and has been there nearly 35 years. So a year ago, Frank and I were sitting next to each other in 70 degree, in Fort Lauderdale weather. And while we're both surrounded by snow, we're once again together, and I'm delightful to have you, Frank. Really appreciate the opportunity to have this chat.

Thanks, Steve.

So let's look at your tenure at RPM. You've been there almost 35 years. The growth rate in the company has been tremendous. Just would like to hear your kind of intermediate to longer-term view for the company now? How would you envision RPM, say, 5 or 10 years from now? How could it be different than where it is today?

Sure. Thanks, Steve. And again, thank you for investor conference today. So I joined RPM, boy, in an operating business in '87. I joined the corporate headquarters in '89. I did 4 years of banking before that. We were about $300 million of revenues. I became CEO in 2003, we were doing $1.9 billion. This year, the fiscal year that ends May 31, '21, we should do about $6 billion. And if Andy, you pull up Slide 6, might be relevant to a lot of questions today and it's our org chart. At $6 billion, we are working to think about how RPM becomes an $8 billion to $10 billion revenue business and a $15 million or $20 billion market cap business. And it's really in a couple of areas. Number one, we've had a lot of success with our operating improvement program, our 2020 MAP to Growth initiatives. There's more to come on that. But in the information that we provided, you can see the addressable markets that we believe RPM can grow into related to our 4 groups. And those addressable markets total about $134 billion. Half of that is in the construction chemicals and waterproofing space globally. And so I think you'll see us evolving from a Consumer Group that is principally small project paints, patch and repair products and caulks and sealants and some cleaners into a larger more true Consumer Group in terms of different categories. And I think you'll see our Construction products Group, leading the charge, both next year and in the years to come with the fastest growth, both globally and in terms of how we're positioned to compete and win in the marketplace. In our Specialty Coatings Group -- our Speciality Products Group, there's a couple of categories in here. Mantrose-Haeuser, for instance, very profitable $70 million flavors and fragrances business. And that's just one example of, particularly in this group of ours, where I would expect us to be perhaps a $300 million to $400 million flavors and fragrances business. And if we can't see our way there, then we would exit. And so that's kind of how I think we get to $8 billion or $10 billion in terms of revenues over the next 3 to 5 years. And hopefully, a $15 billion to $20 billion market cap company.

- 3 to 5 years. Got that, Frank. Maybe let's talk a little bit about the transformation in the company that you've led in the last couple of years with MAP to Growth? Significant cost-cutting on the manufacturing supply chain, mostly consolidation and facility closures. The procurement synergies of just, I guess, leveraging the buying power of all of these businesses that perhaps just weren't buying as 1 unit. That seems to have been a very significant bucket of the Map to Growth. And then the last one in there is which you attribute to just G&A had 70-some ERP systems, which just sounds mind-boggling to me. How you -- how much of a potential barrier to for those businesses to work together when they have all different ERP systems? My question for you on all of that is what of those has occurred maybe a little easier than you expected and those that have been much more difficult when you first laid it out at that event, I guess it was down in Baltimore, I think it was a couple of Novembers back. What was more challenging? What was maybe a little easier than you had thought?

Sure. Andy, if you could pull up Slide 3, I think that will be instructive to your question, Steve, and that was November of 2018. So we've had an interesting couple of years. Our original goal, and we laid out a 70-page deck with a lot of detail around what we called our 2020 MAP to Growth operating improvement program. And the goal was to improve through efficiency and cost cuts by about $290 million on an annualized basis. It was in 3 areas: manufacturing, procurement and G&A and across 3 waves. We originally hoped to conclude this in December '20, because of COVID, we now have extended that to May 31, '21, which is the end of this fiscal year. You can see how we performed in the first 2 waves. At May 31, 2020, we were about $50 million ahead of our original plan. On an annualized run rate at May 31, '21, so coming up in a few months, I believe we'll be somewhere between $300 million and $325 million on an annualized run rate. There should be about $50 million of additional MAP to Growth savings that benefit our new fiscal year that starts June 1. And the areas to your question that have been most impactful have really been on the procurement manufacturing piece. First, in procurement, we set out to save about $165 million. $65 million or $70 million of that was assumed through the commodity cycle benefits that we anticipated, and we experienced that at the end of '19 and throughout calendar '20. But the balance of that was truly centralizing our procurement activities that had been loosely coordinated, and that's paid off in a big way for us. We have global contracts signed at the RPM level. And we have been able to not only reduce our raw material costs, but enter into some volume price reductions in certain categories. Most importantly, and this will be a question we get to here in a minute, we are in a very challenging raw material environment as we speak. Raw material prices have been trending up. The winter storm that impacted most of the United States a few weeks ago, and particularly Texas, knocked out some significant chemical -- base chemical production, and that's having some issues in the near-term on price and availability. And I mentioned that, and again, we'll talk about that later, if you'd like. But today, what we have is a database both in retrospect and looking forward of our key raw materials and our key raw material inputs across all of RPM in a manner that can allow for better information and better decision-making on a more timely basis than even we had a couple of years ago. And that's been a direct output of the MAP to Growth area in procurement. And then the last area I'll mention is manufacturing. It's probably the area where we've gotten the biggest bang beyond what we expected. We originally set out of the entirety of the program to have about $75 million in annualized savings. Half through a footprint consolidation, we set out to close 31 facilities. And the other half through instituting lean manufacturing disciplines and continuous improvement programs on a consistent basis across all our manufacturing and operations. When we're finished, we should be more like 35 closed facilities instead of the original 31, slightly better in the savings that we expected out of the footprint consolidation. But the continuous improvement activities by the end of this fiscal year will have generated somewhere in the neighborhood of $70 million to $75 million in savings as opposed to the $40 million we originally planned. And we expect that on a smaller but incrementally continuing basis to deliver improvements in the, let's say, $10 million range in subsequent years. So that's been a real home run for us as well.

So Frank, you said another $10 million you could get out of that manufacturing. What about in the other 2 buckets? What do you do come the end of May? Do you drive another round 2 of MAP to Growth? Or are you likely to change your focus over to maybe more M&A or more organic top outline growth? How do you think your focus will change when you conclude this MAP to growth program?

Sure. First of all, there'll be some incrementally continuing improvements in the G&A area, which I skipped over. Part of that's been delayed because of the ERP implementations that were delayed or halted because of the COVID pandemic. So that's going to be coming. As I mentioned, we expect about $50 million of MAP to Growth, incremental MAP to Growth benefits in fiscal '22, which starts on June 1. And then really going forward, we have an expectation of improving the EBIT margins by another $150 million to $200 million. We've achieved the -- and will exceed the target savings or efficiency number, but we're below the original EBIT margin goal. So we're continuing to pursue that. But we are shifting to M&A, and we are shifting to growth. And you're going to see it in 3 areas: growth with the market, which we've been good at. The ability to accelerate small, medium, bolt-on acquisitions, which, for a period of time, we were internally focused in really getting the MAP to Growth program up and running. And then the M&A market pretty much froze last spring with the advent of the COVID pandemic. The M&A market is decidedly unfrozen. And there's a lot of activity out there, both small to medium-sized transactions, which were pretty good at sourcing as well as larger transactions. And then the third element is cross-selling, what we call connections creating value, and that's paying off in a pretty big way for RPM. I provided some examples in past meetings. We are selling Rust-Oleum -- I'm sorry, Tremco Roof Restoration Coatings in a 50-store test at Home Depot. It's a little slower than we hope because that was rolled out in the spring of last year and got interrupted by the COVID pandemic. We are selling our Vulkem sealant, which is a Tremco sealants, the #1 urethane sealant in the construction markets now in Menards, the whole set. And so we are opening up different channels and different technologies and leveraging resources across our businesses in ways that we haven't in the past. You combine those 3 things, and I would expect us to be able to generate growth levels that are 2x our industry. And that's what we were able to do back in the early part of the 2000s. From 2003 up until 2016, with a few exceptions, mostly around the Financial Crisis. Our organic growth rates range between 4%, 5% in the low side and 8% or 9% in the high side. And we aspire to get back to there, and that's getting a lot of focus as we speak.

Okay. Let's tackle each one of those. And the organic growth, Frank, you have 75% of your revenue is in the U.S. What can you do to drive that more ex-U.S.? And you highlighted construction as a large market opportunity for you or at least where you think you have the most potential share to gain your revenue in the construction segment out of that $70-some-billion number that you mentioned. So you're still at a relatively small share. Is that $70 billion number global? And if so, how you're going to drive that global growth?

Sure. It's a 70 -- so $134 billion of total addressable market across RPM, roughly half of which are $73 billion is in construction chemicals and waterproofing products, concrete repair products. And we are predominantly North American, but in our Construction Products group, we've got a real good presence in Latin America, in Brazil, in Chile and Colombia. We've got a strong and growing presence in Europe. And we have a, I'd say, a footprint in the Middle East and in South Africa and in India. And so we have consolidated a lot of the administration and accounting and are really able to focus on driving sales and earnings growth. As an example, we have a very small presence in India today, maybe $15 million or $20 million, but we are growing organically at double-digit rates. And so we have the footprint to begin growing out. And I think our execution in the last year is bearing out our strategy. We have had quarter after quarter of flat or slightly up revenue growth in an environment, particularly in North America, where construction activity has been negative month after month. We've leveraged that really nicely to the bottom line. We've picked up about 350 basis points of margin in our Construction Products group. And we're coming out of the -- let's focus internally and make MAP to Growth work. So you'll see more M&A there to build up capacity in these international markets and a more effective transfer of products and technology than we've had in the past. And for the construction chemical markets -- and it's stone hard. It's much easier for us to grow internationally there because we have specifications with big global customers. So I would expect the global expansion other than acquisition is going to be much more pronounced in our Performance Coatings and our Construction Chemical business than in our Consumer.

And on your Construction Products, is the demand for the products that you have, we're talking about Tremco, the concrete products and some of the exterior, like the product that makes a shore house hurricane proof. Can you just characterize whether the end markets for those Construction Products have the same potential in say, emerging markets as they do in the U.S.? Or is the market opportunity less?

So I think the market globally, it will be more driven by infrastructure. So bridge deck, which we're big in concrete ad mixtures, fibers. So infrastructure growth in the rest of the world. In Western Europe and the United States, what's really going to accelerate our growth beyond the core market is a focus on energy efficiency, a focus on getting to 0 emissions, both in construction and other parts of the economy. We have integrated what previously were relatively freestanding operations. So our Dryvit business, our Nudura business, which is that insulated concrete forms business, the Tremco sealants, we now are specifying a whole wall system and warranting it. It is the most high-performance, energy-efficient wall system in the market today for residential and light commercial. We're going after educational markets. We're going after the medical community. And so there's a real huge upside there. On the roofing side, we've been the leader in roof restoration coatings. And you're seeing literally billions of square feet of former rubber roofs that are 30- or 40-years-old that are ending their useful life. And we were the innovator of restoration coatings that could extend those lives for 10 to 20 years. And so while we're leading that in terms of revenue and growth, there's still a huge opportunity for that. And again, that's mostly North America and Western Europe. So we see the dynamics in the market around 0 emissions, energy efficiency, restoration as opposed to tear out and replace as reasons that we will have good growth and that we're well positioned. So we ought to outgrow the broader market in general and we're pretty excited about those.

And is there just as much of an opportunity in performance as construction in some of these ex-U.S. markets? It sounded like when it comes to Stonhard and Carboline, you have a little bit of an edge in the ex-U.S. market. So the growth potential ex-U.S. in performance could be pretty significant?

That's correct. And there's a couple of dynamics there. Number one, that's been our poorest performing business group or segment in the last 12 months, principally because of their big exposure to the energy markets, oil and gas, refining. And with oil prices down, with the impact of economic slowdowns in industrial markets, aviation, things like that, you've seen a significant decline in maintenance spending and construction in those markets. We are slowly starting to see that turn. You've seen oil prices rise to a level, I think, are going to be sustained. And so in the next 12 months, you'll see what I think is going to be really strong performance in terms of sales and earnings growth, in part because we'll be annualizing very poor comps, so easier comps. But also in part because you're going to see a resurgence in the maintenance spending and the industrial capital budget spending that's been lacking for the last 12 months. And so we see the dynamics moving in that direction. And both Carboline and Stonehard, for instance, are global brands with global specifications. And so there are opportunities for growth and expansion, particularly in a recovering global economy are pretty broad.

But on Carboline, is the growth more in kind of waterproofing or in fire proofing, which of those functional areas is a bigger opportunity?

Carboline is mostly high-performance coatings for steel. And so whether it's corrosion control coatings or fireproof either passive fireproofing or active fire proofing coatings, so you'll see it in heavy industry. In marine settings, every element of energy, we do coatings for the lead edge of windmill blades. We're in oil and gas. We're on fracking pads. We're in refining. We're in basic crackers. We're in and you name it, if it's exposed steel, and in some cases, concrete, that's our market. And whether it's corrosion control, and these are all exterior, a lot of steel in exterior settings in different environments or areas where you need the safety and egress coatings in a combustible or flammable area, fireproof coatings, that's our market. But energy has been a big driver of it and energy has not driven much of anything for the last 12 months.

So a lot of the various ways to grow the Construction segment whether it's ex-U.S.? Or would you just say that organic growth is likely to be a bigger driver than M&A?

Sure. Andy, if you could pull up Slide 6 again? I think that as we look at our fiscal '22, which starts on June 1, we're going to be rounding extraordinarily positive COVID-driven numbers in Consumer. So in the first half of the year, we'll probably be somewhat down versus the prior year, where we saw organic growth in the 25% to 30% range. And then we'll gain on it in the second half of the year. So Consumer for the next year and the top and bottom line ought to be flat. I think you're with a -- or assuming a recovery in the North American economy and the global economy, which timing-wise, ought to match our fiscal year pretty well, which starts on June 1. I think you're going to see outsized organic growth in the rest of our segments. And you're going to see acquisition activity, particularly in our Construction Products Group, but also in our Consumer Group. And so I think we're poised to outperform. One of the things that's negatively impacted RPM stock over the last month is the perception and they're right that with the big boom in Consumer over the last year, that we'll have difficult comparisons. And so whether we're slightly down or flat year-over-year, I think that's the market that we're looking at in Consumer. That's $2 billion out of a $6 billion business. And the other 3 segments are better positioned to really both organically and through bolt-on acquisitions benefit in a post-COVID global economic recovery. And I'm not sure people appreciate that element of RPM in light of a focus on our better known consumer brands, but again, that's 1/3 of RPM.

And why do you have the view, Frank, that Consumer might not have the same level of growth opportunity as Construction and Performance? Is it that you already have a fairly high share of some of those markets like caulks and sealants and stains and so forth, you're already doing quite well?

No, it's really about the impact of COVID. So COVID marginally negatively impacted our industrial businesses, thankfully, not as much as we feared. But we had a real boom in Consumer DIY takeaway. And so just as an example, in the first half of the year ended November 30, which are the last financial results that we put forward, our Consumer Group revenue was up 28%. 25% of that was organic growth. We've never seen organic growth rates in the 20% to 30% range, which we saw in the last summer. And that drove an EBIT margin improvement of 95%, those are going to be tough to comp. What happened, which we're excited about, is that the impact of the stay-at-home orders drove an expansion of the confident DIY market size. So there is a larger base of confident DIYers than either we or our big customers could have created on our own in a normal sales and marketing and promotional activity. And so through some new product areas that I'm happy to talk about and through, I think, a larger base of business, we think we'll be able to sustain a lot of the levels of revenue and earnings from the prior year, but it will be with a lot of effort and some new product introductions because of the difficult comparisons. So for instance, it's likely that we're going to be down in the first quarter in Consumer. Why is that? Last year's organic growth in Consumer was 34%. My guess is we'll never see a 34% organic growth quarter in Consumer in my lifetime. And so those will be tough comps. The flip side is we saw some negative impact on our industrial businesses. We manage through that better than most. And as the economies recover, we think we're in a good position to benefit from them.

What are the new products that you're -- have you already announced them? Or is there something coming that you're about to roll out?

No, it's things that we've talked about, Steve. So we have a grab-and-go architectural paint. So pre-tinted paint program that was introduced at Walmart last year. We had a 50 store test this spring, that's rolling out to 300 stores. And so the 50 store test went well. We've expanded to 300 stores. And we're hopeful, over time, if that program goes well, that we can expand it across the entire base of Walmart, which would be a big boom for us. We have some also architectural test programs, relatively small depot, which is Internet-based and at Menards. We have the Tremco roof restoration coating sales through Home Depot. That was a test in the Texas stores that we hope to expand this year. DAP's come out with a pretty exciting new product called Eclipse for patch and repair. So those are the type of normal new product categories that we're talking about that will overcome some slip back, if you will, of the extraordinary DIY and Consumer takeaway that we had last year. We're seeing Consumer takeaway still month-by-month in the low teens. Historically, that was an awesome number. Last summer and in the fall, from 1 week to the next, we see Consumer takeaway that was 25% or 30%, which are numbers that we've never experienced.

So other than a year-over-year comp headwind in Consumer, is your longer-term outlook for that segment still constructive?

Absolutely.

I want to make sure -- okay. Because your comments earlier in the discussion about seeing more growth potential in Construction wasn't meant to indicate that Consumer was not going to be a targeted segment for you?

Oh, no, no. We're -- I see us growing that organically and through acquisitions. I just want to make it clear that I think people expect and they're right. We're going to have a difficult comparison in fiscal '22 in Consumer. And we're going to fight to maintain the levels that we've achieved, but there are good acquisition opportunities there, and we've proven very good at growing that. We have a cleaning category that 7 years ago was $5 million. And through some good acquisitions, good growth and the benefit of COVID this year is $100 million. So that whole cleaning category is new for us in the last 7 years. We'll continue to expand that. And we have tons of room to grow internationally, although that will likely be initially kick-started with an acquisition to get us access to local market distribution. And then bringing our technology and our brands from North America into that market. We're doing that in the U.K. very successfully. We're starting to do it in Continental Europe, but we had a lot of work to do in Consumer relative to international growth, but also a lot of opportunity.

You mentioned raw materials in your earlier remarks. Can you just comment on where you're seeing the most inflation on raws? And which of your businesses has the most challenge of passing it through in higher pricing?

So historically, we've eventually picked up any lost margin because of raw material price increases, but it's been with a lag. That lag might be 3 or 4 months in our industrial businesses and could be as much as 9 or 12 months in Consumer. I mentioned the benefits of centralizing our procurement activities. So I think that will lessen the lag. We're dealing with better data and can make more timely decisions. As we were getting into the beginning of calendar '21, we and our whole industry, we're seeing a base level of inflation in raw materials that we have been preparing price increases to address. And I think we're in a good position there. In the interim, we've had the big winter storm and the power outages in Texas that disrupted really some major core chemical refineries, ethylene, propylene, all the bases of the various resins that go into our products. And so for the next 30 to 45 days, I think it's going to be pretty tough. We, and our whole industry, have received about 30 force majeure notices. Some of those have been rescinded. I think there's going to be some raw material availability issues. I don't expect them to be lengthy. But there could be a period of a week or more, where key raw materials in certain resin areas will not be available. And so it's forcing decision-making about what customers and/or what segments of our businesses, we would have to delay. And that's not unique to RPM. The whole downstream chemical and coating space is dealing with a rather unique, thankfully, temporary disruption because of the winter storm. But underlying that was a base level of inflation, that is resulting in price increases across our industry, including in every segment of RPM now and into the spring.

So maybe a product that potentially crosses multiple segments for you would be sealants. Certainly, DAP has some DIY sealants, and I got quite the display of your products in my own garage.

Thank you.

But there would be plenty of sealant that goes into construction, adhering panels on the side of a commercial building, a lot of sealants go into various OEMs, autos and so forth. How do you take that expertise in that one chemistry category and expand into new markets? Or can you?

Yes, we can. And so the one example I gave previously was last year, we were able to place our Vulkem Sealant, which is the leading urethane sealant in the construction chemical markets, traditionally sold through Tremco through waterproofing houses and building material distributors. And we will do tens of millions of dollars for that product through Menards. And so that's a whole new channel. So a home center channel, what, for decades, had previously been a well-known urethane sealant that had only been sold through commercial distribution. And so we're doing that. Another example is Grainger, which was a traditional MRO customer of some of the spot maintenance products of our DAP and Rust-Oleum Consumer segment businesses. And we are able to -- because we do supply and apply, we are growing rapidly with Tremco Roofing through the Grainger catalog, same things with Stonhard flooring. So we're taking some good customer relationships of one part of RPM and doing a better job of identifying where other RPM products or services might be of interest. And I think over time, the opportunities in what we call connections creating value, exist to generate hundreds of millions of dollars of additional internal growth that 5 years ago, we weren't organized to get there. So we're very excited about that. And that's going to be a story that will be able to provide more detail on in the coming year.

Those examples that you just gave are not just different businesses within the same segment, but aren't they different businesses between different segments?

Absolutely. It's a great observation, and you have followed us for a long time. Previously, we organized into 6 groups. And the operating efficiencies and/or the any synergies typically happened in those 6 group silos. And having reorganized into 4 groups, having a leadership structure that is both compensated more based on the consolidated results of RPM and where we have more and regular meetings about products and markets and competing and winning in the marketplace, we have really opened the door to sharing technology, best practices and even opening up new sales channels across RPM and across segments. And I think inherent in your question is, correct, which is 4 or 5 years ago, we were not -- we couldn't do it, whether we were organized improperly to do it or didn't have the right approach, but we're doing it today, and I think we're just scratching the surface.

And how are you driving that, Frank? Is there someone in the organization that is able to look across segments? Or is this just kind of a bottoms-up initiative where one business in one segment sees an opportunity to drive growth through relationships and channels in a different business?

So we have a procurement team and a manufacturing and operations team here. It's about 15 people at the corporate headquarters. They all report up through Mike Sullivan, who's our VP of Operations and took on the role as Chief Restructuring Officer. He came from consulting in AlixPartners. He's helping drive that. Scott Copeland, who works for our CFO, Rusty Gordon. Scott is our Vice President of FP&A, and he is intimately involved in that, but it's really our 4 group presidents. And we meet as a senior leadership team weekly, every Monday evening. And we do performance reviews. So we do monthly performance reviews aside from Board stuff by group. So that's siloed. But our senior leadership meeting, including our 4 group presidents meet weekly, and we talk about what's happening in the markets. We talk about what's going on in procurement. We share data that we didn't have a few years ago. And I think we're incentivizing people, as I mentioned earlier. These group presidents in the past were incentivized based on the performance of their group. The way for these group presidents today to create real personal wealth is through RPM equity. And the way to create personal wealth through RPM equity is to drive up the RPM stock. And if there are opportunities for us to share technologies or introduce people to channels where it could drive $10 million or $50 million or $100 million of additional sales, we'd be nuts not to do it. And so as I said, I think we're better organized. We've got the best operating leadership we've ever had. Interestingly enough, the ability to manage 4 group presidents seems a hell of a lot easier than managing 6. And the cooperation across those operating leaders is exceptional.

And then within each of those 4, the business units that report up to those 4, if I'm correct, they are -- could be spread around the country. Do you see any potential benefit by co-locating those business unit leaders together so that perhaps they identify more of these synergy opportunities?

We're pretty much reliant on our group presidents to drive it. We are combining some manufacturing. We're certainly combining back office stuff in terms of ERP systems and accounting more aggressively than we have in the past. But I will tell you, below those 4 group presidents, roughly 40 independent operating companies. And while we have consolidated procurement, while we're driving common disciplines across manufacturing, we're sharing some manufacturing, we're consolidating IT and accounting. Our sales and marketing approach is still relatively entrepreneurial and that's, I think, a good thing. We've got over 1,000 direct salespeople across RPM. We sell-through thousands of distributors. And those resources and those assets, particularly when it comes to some of these bolt-on acquisitions, the real home run for us in acquisitions come with small deals. And there's a number of analysts and investors that wonder why we keep doing all these small deals. And as we've gotten so big, don't we have to do bigger deals. If we can acquire a $10 million product line and position it properly to expand it across a Carboline sales force of 200 people, for instance, or the Rust-Oleum distribution across all sectors of DIY. In 2 or 3 years, we can turn a $10 million product line into $30 million, that's a home run. The IRRs are through the roof. And when you look at the effort it takes to start from idea to development, to market introduction and success of a new internally developed product line or organic growth, to be able to identify bolt-on acquisitions, really from a sales perspective, we can get the back end synergy. But the real home runs are the ones where you identify the ability to really accelerate the sales growth across our sales force or our distribution, and they get us really excited. So while some people may not be excited about our small deals, we are, and we just need to find more of them.

And one more topic I'd like to talk to you about, Frank, is e-commerce. And I know that you've been expanding that through the home centers and some of your consumer, I guess, is probably where most of it is. How big could that get? And could you see moving more products through that channel?

I think over time, the answer is yes, but it's expanding quickly. The COVID situation helped that. But you're talking about $20 million or $30 million of revenues across a $6 billion business. So the percentage gains look impressive, but they're on a very small base. We do have an architectural paint program test with Home Depot. It's almost entirely internet or online web based. So time will tell as to whether or not that takes off. The other thing that I think will be interesting, particularly in our space, is whether the acceleration of some of the Internet or e-commerce-based business during COVID continues. Or whether it backs off because people are more comfortable in shopping at Lowes or Menards or Home Depot or a Walmart or an ACE hardware store, and all great customers of ours. And so -- and I say all that with a backdrop that if you are selling relatively high weight to low-value gallon paint or combustible cans of spray paint or you're selling items that are part of a project as a opposed to a regular consumable, whether it's tissue paper or dog food, the dynamics of our industry do not lend themselves naturally to e-commerce. But that doesn't mean that e-commerce won't evolve over time as a bigger channel. Certainly -- in our cleaning products, it has, and that's one area where it can continue to grow as a bigger channel. But a lot of the paint projects or products or other products don't have the dynamics that would suggest that you'll see a lot of growth there in the future.

And just to drill in real quickly on that e-commerce architectural paint pilot that you're working with Home Depot, does the customer select a color and it gets premixed and shipped as a premixed paint?

Yes.

And there's a wide variety of choices. So how do they pick up the color? Did they go to the Home Depot? Or is that also done electronically?

It's done electronic or they can do both. They can go to Home Depot and pick out a color. And where they can go online, pick up the color matches online, and then they can pick up the product at Home Depot or it can be direct shipped to their home.

Interesting. A very good, Frank. We've run out of time. But I sure appreciate the chat once again. My best to you, sir, and look forward to staying in touch in the months ahead. So thank you.

Steve, thank you, and thanks to all of the BofA clients who participated in your investor conference today, and I look forward to participating again next year in person in Fort Lauderdale, Florida.

I'm with you. Very good. Looking forward to it, Frank. You take care.

You, too.