Frank C. Sullivan - Chairman of the Board, Chief Executive Officer P. Kelly Tompkins - Chief Financial Officer, Executive Vice President - Administration Ronald A. Rice - President, Chief Operating Officer

Analyst for Jeffrey J. Zekauskas - J.P. Morgan Rosemarie Morbelli - Ingalls & Snyder Kevin W. McCarthy - Bank of America Merrill Lynch Saul Ludwig - KeyBanc Jason Rogers - Great Lakes Review Edward H. Yang - Oppenheimer Amy Zang - Goldman Sachs

Good day, ladies and gentlemen. Welcome to the RPM International conference call for the fiscal 2010 first quarter. (Operator Instructions) Comments made on this call may include forward-looking statements based on current expectations that involve risks and uncertainties, which could cause actual results to be materially different. For more information on these risks and uncertainties, please review RPM's report filed with the SEC. During this conference call, references may be made to non-GAAP financial measures. To assist you in understanding these non-GAAP terms, RPM has posted reconciliations to the most directly comparable GAAP financial measures on the RPM website. (Operator Instructions) At this time, I would like to turn the call over to RPM's Chairman and CEO, Mr. Frank Sullivan, for opening remarks. Please go ahead, sir. Frank C. Sullivan: Thank you, Stephanie. Good morning and welcome to RPM's first quarter earnings conference call for our 2010 fiscal year. As the world now knows, last year at this time we were on the precipice of a near collapse in the capital markets that led to the broadest and deepest recession in nearly 80 years. I remember in October with poor results joking that if we had 12 Octobers, we’d have a very challenging year. In November, which was worse than October, we quit joking and were spurred to action. For the first time in my 20 years at RPM, we abandoned our operating plan and refocused our goals on capital structure, cash flow, and liquidity. These actions included the elimination of manufacturing shifts, sharp reductions in SG&A spending, and cut-backs in capital spending and our acquisition activity. These actions allowed us to finish the 2009 fiscal year with record levels of cash flow and liquidity and entering our 2010 fiscal year on June 1 having lowered the break-even point of every RPM operating unit. Many of you are also aware of RPM's longstanding deliberate strategic balance between consumer and industrial markets. Combined with our acquisition activities, this balance allowed us to continue to grow through all economic cycles over the last 30 years right up until 2009. We are pleased to see today that the more typical differentiated performance of our two segments is seeming to return to more historic trends. As we had hoped, our generally low cost, high-value consumer DIY product line appeared to be leading a modest return to consumer spending as housing turnover picks up and as homeowners are returning to home maintenance repair and redecoration. This led to a strong volume growth in our consumer businesses and product lines, which combined with the benefits of the aggressive actions taken last year, has resulted in a strong profit rebound. The positive impact of these prior year adjustments are also evident in our industrial businesses where as expected, we are experiencing revenue declines versus the prior year’s record level of sales, but have reduced the negative impact that these declines would have otherwise had on profitability. We also remain focused on cash generation across all our PM business units. The results of all of this is a return to record levels of earnings and cash flow at RPM for the first quarter ended August 31, 2009. I would now like to turn the call over to Kelly Tompkins, RPM's Executive Vice President and Chief Financial Officer, to provide you with more of the details on our first quarter. P. Kelly Tompkins: Thanks, Frank. Good morning, everyone. Thanks for joining us on the call. I will go over the first quarter in detail and the turn it back to Frank for some closing comments before we take your questions. Looking at consolidated net sales, down 7.1% quarter over quarter, foreign exchange accounted for 3.9% of the decrease due to the continued strength of the U.S. dollar during the quarter compared to a year ago, most notably against the EURO and the Canadian dollar. Unit volume declined 4.8%, although we had strong core growth in our consumer segment, it was not enough to offset the as-expected top line pressure we experienced in our larger industrial segment. Acquisitions in our industrial segment and the contribution of prior period price increases in both segments contributed 1.6% of our quarter over quarter growth. Looking at the industrial segment, net sales of $599.7 million, which accounts for approximately 65.5% of total sales, declined 14% from last year, largely driven by volume declines of 11.1% and unfavorable foreign exchange of 4.4%. Partially offsetting these declines were acquisitions and prior period price increases, which contributed 0.8% and 0.7% respectively. Consumer segment net sales of $316.3 million, 34.5% of our total sales, improved 9.9% over last year’s first quarter. Unit volume was very strong, up 10.5% and price increases accounted for 2% of the sales growth with foreign exchange unfavorable by 2.6%. Consolidated gross profit of 43% in the quarter was up 200 basis points from 41% last year due to more stable raw material costs, prior period price increases, and the benefit of last year’s cost reduction actions, which significantly reduced our conversion costs. Industrial segment quarter over quarter gross profit margin of 44.1% increased 230 basis points from 41.8% last year, due primarily to lower year-over-year raw material costs, favorable prior period price increases, and the impact of improved mix toward higher margin product lines. Consumer segment quarter over quarter gross profit margin of 40.9% increased 210 basis points from 38.8% last year due principally to lower conversion costs. Looking at consolidated SG&A as a percent of sales, SG&A increased slightly to 29.8% from 29.7% last year, due to the loss of leverage attributable to the overall decline in sales. However, in absolute dollars, SG&A declined $19.5 million, or 6.7% from last year reflecting the prior year cost reduction actions. Industrial segment SG&A as a percent of net sales increased from 28.7% last year to 30.4% this year, due primarily to sales volume declines. In absolute dollars, industrial segment SG&A decreased $17.7 million or 8.8% due to lower compensation and distribution expenses, lower headcount, and tighter cost controls. Consumer segment SG&A as a percent of sales decreased to 24% from 26.8% last year on higher unit sales volume and a lower cost structure. Even with a 9.9% sales increase, SG&A expenses decreased by $1.4 million year over year, confirming the impact of last year’s aggressive cost reduction activities. Corporate other expense decreased slightly year over year for a current year expense of $14.5 million versus last year’s $15 million, which is overall on track with our expectations. Consolidated EBIT dollars and margins increased to $120.6 million, or 13.2% of net sales this year, from $110.9 million, or 11.3% of net sales last year, due principally to sales volume growth in the consumer segment, improved gross margins in both segments, and again prior year cost reduction benefits. Industrial segment EBIT decreased from $91.3 million to $81.9 million principally due to lower unit volume. As a percent of net sales, industrial EBIT improved from 13.1% of sales to 13.7% of sales due primarily to improved gross margins. Consumer segment EBIT increased from $34.6 million or 12% of net sales to $53.3 million or 16.9% of net sales, due to improve absorption on higher sales and a lower SG&A cost structure. Interest expense decreased $2 million from last year on lower average borrowings and lower interest rates. Interest rates for the quarter averaged 5.0% compared to 5.4% last year. Investment income net decreased to $1.1 million this year compared to $4.2 million last year from lower gains realized on sales of marketable securities combined with lower investment income. Tax rate for the quarter was 33% compared to 30.7% last year. The year-over-year change reflected decreases in projected net foreign source income, primarily from our industrial businesses, resulting in a lower utilization of foreign tax credits and reflecting our overall jurisdictional mix of income. Net income of $73 million or $0.57 per share improved over the same period last year of $69.5 million, or $0.53. I will wrap up with a few comments on the balance sheet and cash flow, beginning with asbestos for the quarter ended August 31, we had cash payments of $18.6 million, with $11.1 million for indemnity and 7.5 for defense. This compares to total cash payments of $16 million last year, of which $9.3 million was for settlement and 6.7 for defense. As of August 31, we had a total of 10,271 active asbestos cases compared to 11,399 cases at last year’s first quarter. At August 31, our balance sheet accrual for asbestos related liability totaled $471.8 million. Capital spending for the quarter was $3.3 million versus $12.2 million during the same period last year and as we noted on our fourth quarter conference call at year-end, our fiscal ’10 CapEx budget is $25 million. Depreciation expense for the quarter was $15.6 million, which was slightly lower than last year’s $16.4 million, with amortization expense for the quarter at $5.4 million compared to $5.8 million last year. Accounts receivable DSO decreased 4.9 days year over year and days of inventory decreased 3.8 days year over year primarily due to sales volume increases in the consumer segment and tighter inventory controls across both segments. Cash from operating activities provided $52.1 million compared to a $12.3 million use of cash at last year’s first quarter. This improvement is largely attributable to higher net earnings and balance sheet accrual changes, such as compensation, benefits, and other accrued liabilities. Finally, in terms of our capital structure and overall liquidity, at the end of the first quarter total debt was $906.7 million compared to $972.4 million last year, for a total reduction of $65.7 million. Our net debt to cap ratio stood at 34.7% compared to 37.9% last year, and overall liquidity at the end of the first quarter at $635.1 million with $256 million in cash and $379 million available through our bank revolver and AR securitization facility. Finally, we continue to actively monitor the capital markets with respect to our mid-October maturity and are encouraged by the tightening of credit spreads over the past couple of months. Likewise, liquidity available through our revolver and AR facility gives us ample flexibility to address this debt maturity in the most optimum manner. With those comments, I will turn the call back to Frank for some wrap-up comments. Frank C. Sullivan: Thanks, Kelly. In July, we provided guidance for our 2010 fiscal year of expectations that earnings per share would be up over 2009, the adjusted $1.05, by 5% to 25%. The performance in the first quarter has made us comfortable in narrowing what was a beginning of the year rather wide guidance that we provided. For the first half of our 2010 fiscal year, we expect our consumer segment sales to be up in the neighborhood of 5% to 8%, driving 40% to 50% earnings growth. Industrial segment sales are still expected to decline for the balance of the first half in relationship to operating at record levels of sales through October of last year. This is expected to drive earnings declines in our industrial segment in the 10% to 15% decline range. RPM consolidated sales for the first half of the year are expected to be down in the neighborhood of 8% to 10%, with earnings flat to up 5%. In the second half of 2010, we expect our consumer segment sales to grow at approximately 5%, driving earnings growth in the 15% to 20% range. Industrial segment sales are expected to improve to roughly flat in part because we will be comping weaker comparisons to the prior year second half results, driving earnings growth up 15% to 20%. While we don’t want to provide quarterly guidance as it relates to third and fourth quarter, this forecast roughly equates to a third quarter loss of last year which will be cut in half and assume modest industrial segment growth in the fourth quarter. Putting all this together, we expect for the fiscal year ended May 31, 2010, that consolidated sales will be roughly flat and earnings per share will be up 20% to 25% at the higher end of our original guidance for the year. The two variables in this outlook in guidance are first and foremost the economy. We do not need a robust pick-up in the economy to meet or exceed this guidance. However, as many fear, if there is some return to a recession or a double-dip, then certainly this guidance will go out the window. Secondly, this guidance and forecast assumes stable raw material costs. Given the volatility and dramatic swings that we have seen in raw materials over the last five years, that is something that we will be on the lookout for as well. Lastly, as it relates to acquisition activity, with more than $600 million in long-term liquidity, we would expect to pick up our acquisition activity in the coming couple of years, again looking at product line or freestanding businesses that typically would fall in the range of $5 million in the smaller side from a product line perspective to $100 million freestanding businesses and are aggressively working to get our acquisition pipeline refilled. That concludes our formal comments on today’s call. We now look forward to answering your questions.

(Operator Instructions) Our first question comes from the line of Jeff Zekauskas from J.P. Morgan. Analyst for Jeffrey J. Zekauskas - J.P. Morgan: Good morning. This is [Silka] for Jeff. If you look at both the industrial sales and the consumer sales on a sequential basis, were there any items that led to the sale growth? Were there any sales that may have gotten pushed from the May quarter into the August quarter or are there any sales that may have been pulled forward from future quarters into August? Frank C. Sullivan: No. I mean, certainly not that we are aware of. I think the things that drove our sales in the consumer segment were very strong volume that was consistent across each month of the quarter in our type of low ticket item, high value DIY maintenance and repair products. We had seen signs of that, as you’ll recall, in the spring and while it’s not exactly right to tie big macroeconomic trends to the results of a company like RPM, certainly to the extent there is one in our consumer segment, it would be housing turnover in North America which with the pick-up of the sale of foreclosed homes started kind of in January and February, a strengthening on a regional basis of either housing turnover and housing prices were something that we think is one of the major factors that is helping to drive takeaway. We’ve also introduced some new products. There’s a Rustoleum 2X product out there that is moving very nicely. The DAP 3.0 product that was introduced more than a year ago just in time for the recession is now moving pretty quickly, so we picked up share in a number of major automotive accounts, and so I think those are the principal factors that drove sales growth in the quarter in consumer. On the industrial side, obviously it was really a function of benefiting from the expense reductions last year and stronger pricing power in our industrial businesses versus our consumer businesses, which mitigated what otherwise you would expect a harder hit on our bottom line given the earnings declines we experienced in the quarter. Analyst for Jeffrey J. Zekauskas - J.P. Morgan: And if I can ask one question on the asbestos side, the 12-month reserve was lifted from $65 million to $75 million. What’s the underlying reason for that? Frank C. Sullivan: We expect somewhat higher costs this year. We finished last year with cash costs of $69 million and we had 18 and change in the quarter. I can tell you from a longer term perspective, I’ve never had a better outlook. You’ll note some of that higher cost is associated with higher defense cost, which is something we also talked about last year. There have been some favorable changes in certain court rulings, favorable change on a ruling by the Illinois Supreme Court, all of which in the long-term we believe will serve to reduce caseload and costs but as you’ll recall, starting last spring we talked about a change in our defense posture to more of a natural defense that is much aggressive because a change in court rulings or a Supreme Court ruling in Illinois in and of themselves don’t change anything unless we are willing to be more aggressive in our defense. And so in the near-term, you will see higher costs, as evidenced by our first quarter but long-term, I have not been as hopeful as I am today that we are moving in the right direction. Analyst for Jeffrey J. Zekauskas - J.P. Morgan: Thanks. I’ll get back in the queue.

Your next question comes from the line of Rosemarie Morbelli from Ingalls & Snyder. Rosemarie Morbelli - Ingalls & Snyder: Thank you. Good morning, all. Congratulations on a very good first quarter. Frank, do you have a feel as to -- I mean, I understand that there has been a lot of foreclosed homes and therefore more [inaudible] and so on but do you have a feel as to whether the bulk -- well, as to the percentage, let’s call it that, of the 15% growth in consumer came from inventory replenishing versus products actually walking off the shelves? Frank C. Sullivan: I think it’s mostly products walking off the shelf. There’s no doubt in the early part of the summer and probably even a little bit in the fourth quarter and the spring that there was some inventory replenishing because starting in October or November of last year, retailers almost across every channel were very aggressive in reducing inventory and that occurred through the winter months as well. You will note we also converted working capital cash very aggressively so there’s some of that but we are seeing good consumer takeaway and I think it relates to people fixing up homes and housing turnover and also perhaps the elimination of some of the uncertainty that really froze retail sales at the end of last fall and in the winter. You know, some of the challenges that we faced in our consumer product lines, which historically in past recessions have actually held up pretty well, was the fact that retail sales in general and retail traffic in general all but died. And that has picked up and again we have long thought, given the nature of our products, that we would be kind of leading into a recovery because of the nature of our products and it’s nice to see that the reality sometimes matches your rhetoric. Rosemarie Morbelli - Ingalls & Snyder: And do you see a difference following up on that in the demand or the amount walking off the shelves in the big box versus hardware stores versus other of your consumer channels? Frank C. Sullivan: You know, I don’t have handy the specific channel activity but I can tell you that the big box sales were very good and positive in the first quarter, which was not true in certainly this second quarter and third quarter and early fourth quarter of last year. We’ve also had some market share gains with the introduction of some new products, as well as some expansion into the automotive after-market channel, which we didn’t have much of a presence in until the last three or four months. Rosemarie Morbelli - Ingalls & Snyder: And on the industrial side, do you see signs of a bottom? Could you give us a feel as to what you saw every month of the quarter sequentially and in September? Frank C. Sullivan: We typically would not provide month by month analysis but I can tell you that the experience of our first quarter is what we would expect to see in our second quarter. I think as long as the economy doesn’t get worse, our industrial businesses will show better results in the second half of the year if for no other reason than we’ll start to compare to weaker comps last year when we were starting to see sales declines. In general, our maintenance and repair industrial products, product lines for corrosion control, for flooring that go into energy or maintenance or infrastructure are holding up much better than those product lines that are involved in construction, in particular commercial and new construction. Those product lines of our Dryvit and Tremco sealants businesses that are involved in commercial new construction are seeing significant revenue deterioration and we don’t see that improving until at least the spring of next year. Rosemarie Morbelli - Ingalls & Snyder: Last question, if I may -- any help from the stimulus? Do you see it coming? Have you seen it? Do you expect to see it? Frank C. Sullivan: Very little help from the stimulus program, and we ask our people that. The fact of the matter is is that there is anticipation of a new highway bill that’s not come out of congress. That would do more to help infrastructure and particularly in the highway and bridge area than the stimulus package and this delves into the political but as far as I can tell, I believe that the stimulus dollars have mostly gone towards helping state governments fill budget holes and/or supporting folks from a benefit perspective who have lost their job in the recession. We’re not seeing meaningful steady dollars from the stimulus package. The few high profile projects that are out there are so heavily bid that the margins aren’t very good. Rosemarie Morbelli - Ingalls & Snyder: Thanks. I’ll get back on queue.

Your next question comes from the line of Kevin McCarthy from Bank of America Merrill Lynch. Kevin W. McCarthy - Bank of America Merrill Lynch: Frank, if I heard your guidance comments correctly, you’re expecting 5% to 8% sales growth in consumer for the first half and so I am wondering if there’s a measure of conservatism in there or if you are expecting some deceleration, perhaps due to destocking or other factors relative to the 10% growth that you posted in the first quarter. Frank C. Sullivan: You know, Kevin, it’s our best guess for the first half of the year and that’s the best I can tell you. I am still hesitant to be very bullish because the underlying economy seems pretty fragile. As I mentioned in my comments, if the economic recovery picks up a little bit from here, if we see a return to some revenue growth in more of our industrial businesses, we can beat these numbers. On the other hand, if the economy continues to weaken, then meeting these numbers will be a challenge. That’s not a very good answer to your question but I like, and I think we at RPM like most other folks looking at this economy, we’re still very hesitant to look at three months and decide that that’s indicative of what the rest of the year will hold. But we will be, particularly in the second half, comparing to much weaker comps and so on the revenue side, as long as there’s not deterioration in the economy, that should help us pretty significantly. Kevin W. McCarthy - Bank of America Merrill Lynch: Understood and then second question, you made a comment, Frank, that you expect acquisition activity to pick up in coming years. I was wondering if you could provide a little color as to what sorts of product lines, geographies, and or size of deal investors should be looking for over that period. Frank C. Sullivan: You know, we are currently looking at product line or freestanding entrepreneurial business acquisitions, a handful of them that are in the $5 million to $50 million range. The nature of acquisitions are they are never done until they are done. We’ve been working on one in India for six or eight months. I fully expect it to be announced and it will be relatively small -- fully expected it to be announced last month. I’m hopeful it will be announced next month. It’s not material in terms of sales or earnings but it’s just gives you the sense of the tenuous nature of these. I will tell you that for fiscal -- our fiscal 2008, so 2007, 2008 calendar years, there was a lot of stalled transactions because of a beginning difference between seller expectations that were still driven by private equity, high valuations in the boom years, and buyers starting to get more realistic. Then in the past year, I think we saw two transactions which just halted and they halted because neither we nor the sellers could get comfortable -- it was no longer about the multiples than it was about the [E] and if you are staring at earnings of 2008, what did that mean for what those earnings might be in 2009? I think with some stability coming back to the markets and some predictability, you are going to see transactions starting to pick up at the high-end like they are but also at the low-end because that freezing of activity and uncertainty is starting to thaw. Also at meaningfully lower valuations, principally because private equity -- the private equity crazy game is over. Private equity still has tons of money to put to work but they will now lose the cost of capital advantage they have because the crazy capital structures that they were able to put in place probably won't come back in my business career and in the more immediate future, we’re not going to be staring at sellers and having to answer questions about 10 times EBITDA valuations that they read about in the paper from some big private equity firm. So you’ve got a thawing of activity, people moving forward and on more reasonable values, and so that’s what is really behind my thinking that we will see more activity in the next couple of years. Kevin W. McCarthy - Bank of America Merrill Lynch: Okay. Thanks very much, Frank.

Your next question comes from the line of Saul Ludwig from KeyBanc. Saul Ludwig - KeyBanc: Good morning. Kelly, a couple of questions on your side of the thing here -- what should we be thinking about for interest expense for the year? P. Kelly Tompkins: Given where we’re at at this point and just trying to make some assumptions in terms of where rates are and looking ahead at our upcoming maturity, probably in the range of $60 million full-year. Saul Ludwig - KeyBanc: Okay, and then the reason that interest income was down in the quarter from $4 million to $1 million, while you had more cash -- what was -- P. Kelly Tompkins: Well, just basically a decline quarter over quarter in overall investment income. You know, interest income, we had a significant gain on marketable securities last year of about $3 million. It was only $100,000 this year, so it’s just overall lower investment income. Saul Ludwig - KeyBanc: And next question, in the asbestos area, how many cases got settled this quarter? P. Kelly Tompkins: During the quarter, we resolved 424 cases. Saul Ludwig - KeyBanc: Okay. And Frank, when you’re thinking about the outlook, go back to that question that Kevin asked on the consumer side -- if you look at your first half projections and you subtract what you did for the first quarter, you’re in essence saying that you think that the second quarter revenues are going to be basically flat to up maybe 5% or 6%. Is there -- was there some pipeline filling with the new accounts that accentuated the revenue growth in the first quarter that you wouldn’t have in the second? When you think about the change from plus sort of 10% level in revenues in the first quarter to 0% to 5% in the second, have you seen some big deceleration in the month of September that has precipitated that caution? It’s a fairly dramatic change and I’m trying to get a little clarity on it. Frank C. Sullivan: No, I -- our gut right now is that consumer will be up in the mid-single-digits in the second quarter versus what was a very strong first quarter and early signs in the quarter as that’s where we are, Saul, I don’t have the facts in front of me to tell you whether it was comps. We did pick up some market share at the end of the spring and in the first quarter in the automotive DIY so -- but you know, versus last year, that will be new. And that’s -- I think that’s pretty much the best I can give you. The nature of our products are such that in prior recessions, our consumer product lines grew modestly. They didn’t last year. The nature of our products are when the economy is humming and everybody is booming, our products grow in the 4% or 5% range, not 10% or 11%. So I guess some of it is just being appropriately guided by what we have done in the past and not falling in love with an extraordinary first quarter from a unit perspective in our business. If the housing market continues to improve through the fall, we could do better. If it slows down, we won't and that’s the best I can tell you. Saul Ludwig - KeyBanc: Tax rate, should we use 33% for the year? Frank C. Sullivan: Probably. Kelly, you have -- P. Kelly Tompkins: I think it’s just as good a chance we’ll be a little below that. We could be anywhere in the range of 31.5% to 33%. It’s tough to say. It’s really so dependent on the mix of income as we alluded to in my opening comments. Frank C. Sullivan: The biggest factor in that tax rate and this is something that our current political leaders should take into account, is that the vast majority of our international business is from our industrial segment, which obviously is under pressure on the revenue line and also on the earnings line, and we enjoy in almost every country that we do business in lower effective tax rates than the United States. Saul Ludwig - KeyBanc: Okay, and then just finally, Frank, you know, in the first quarter the Euro worked against you. We’ve now seen a sudden reversion in the Euro and it would appear to be a more positive factor, looking out for the balance of the year. Have you factored that into the guidance completely, representing today’s Euro value? Frank C. Sullivan: We have factored that into the earnings growth guidance of 20% to 25% improvement but surely the foreign exchange, if the dollar remains relatively weak, will be a positive to our revenue growth for the balance of the year and it was a negative, obviously, in this quarter versus the foreign exchange translation impact that we had a year ago. So that’s absolutely correct and that could be a variable for the balance of the year in terms of some of these growth areas but the biggest thing that has really impacted our earnings, which is where we are focused, is last year’s expense reductions. You know, when you look at, even on the consumer piece, you know, the year over year improvement in EBIT I think was about $18 million. Half of that came from SG&A in terms of just the reduction of SG&A as a percent of sales versus where it had been had we not made those cost cuts. Almost the entirety of the other half in gross profit came from lower conversion costs. We dropped some shifts, we eliminated a do it for you application service in our consumer business last year which saved us a couple of million bucks in the quarter, and so we continue to be focused, our businesses, on maintaining the benefits of the aggressive actions that we took last year and so obviously as sales go up or down, we will benefit, particularly if we have better sales, if we maintain the discipline of hanging on to the expense cuts and the aggressive actions we took to kind of realign our P&L last year. Saul Ludwig - KeyBanc: Okay. Great. Thank you very much.

Your next question comes from the line of Jason Rogers from Great Lakes Review. Jason Rogers - Great Lakes Review: I wondered if you could talk about your outlook for pricing for fiscal 2010, if you are seeing any pressure from either side of the business from a type of give-back, given that raw material costs have evened out here. Frank C. Sullivan: We have seen attempts over the last couple of months at price increases. Most of those have failed and this is on the raw materials side -- most of those have failed, some of those are moderately happening and so it’s a real spotty thing. Things like tin plate have been up pretty dramatically this year, which is the principal raw material that goes into cans and there’s a number of companies that we have like Rustoleum whose principal raw material is a steel can, either for quarts or for spray cans. We’ve seen some modest attempts at raising prices on TIO2, so as long as raw materials stay stable and we are down from the historic crazy peaks of last year of $140 barrel of oil but still substantially up from where we were just a few years ago, as long as they stay stable I think we are in pretty good shape but given the volatility that we’ve seen over the last five or six years, whether it was from hurricanes in ’04 and ’05 or supply and demand issues or energy costs, we are going to watch that very closely. Jason Rogers - Great Lakes Review: Thank you. Frank C. Sullivan: I would say, in last to respond to that, that the movement in raw materials is, if any direction, it’s up although it’s not happening in a meaningful way at this point.

Your next question comes from the line of Edward H. Yang from Oppenheimer. Edward H. Yang - Oppenheimer: You had a comment in the press release about securing share in consumer and I was wondering how you were able to gain market share and also can you quantify which -- what percentage of the 12.5% increase in organic sales was related to share gains versus an overall improvement in the market? Frank C. Sullivan: I don’t have any specific numbers to tell you what percent of that was share gains. I can tell you that we have been successful in introducing some new products, particularly in big box accounts. Rustoleum has come out with a 2X product that is moving quite nicely. I mentioned earlier the DAP 3.0, which was introduced a year ago, just in time for the recession to hit, is now moving very nicely. It will be interesting to see with the stimulus plan focus and billions of dollars that have been set aside for low income housing, energy efficiency, whether that starts moving our DAP products more aggressively -- you know, we get the lion’s share of the consumer DIY, caulk and sealant market, and so we’ll be interested to see what that does for us. I commented earlier that in other parts of our business, we have a hard time identifying any stimulus impact, so we’ll see where that goes. And then we have picked up -- lastly, we have picked up share in the automotive after-market in a number of accounts where we didn’t have a presence before and we have picked up a touch-up and repair and spray paint lines at the expense of certain competitors. Edward H. Yang - Oppenheimer: Related to the new product introductions, you mentioned DAP 3.0 from last year and I remember, I recall that there was a significant amount of promotional spending related to some of the new products, like DAP and also the Rustoleum Universal, and I know you have new products this year as well too but in terms of the improvement in SG&A spending in terms of absolute dollars, how much was that less promotional spending related to new products year over year? Frank C. Sullivan: It was somewhat less promotional spending but we will -- I think you will start to see now and in the spring a more aggressive promotional spending towards this. Unfortunately last year we introduced some great new products which are helping us now with some good promotional spends right into the teeth of a pretty bad recession so in hindsight, it wasn’t dollars well spent. But they are great products and we will continue to promote them, particularly in light of improved consumer takeaway to the extent that we continue to see that. Edward H. Yang - Oppenheimer: On the CapEx side, I believe you said in the past that $50 million or so was sort of a normal run-rate of spending, and you are obviously guiding towards half that this year. When should we expect CapEx to go back to trendline? Frank C. Sullivan: I think CapEx will go back to trendline in our 2011 fiscal year. I think that we have really responded well. We challenged our businesses to focus on cash flow very aggressively and in the spring and even through the first quarter in our industrial businesses, you’re seeing very good conversion of working capital. You are seeing a significant expense focus and I think we have found -- I think we will be able to tell companies or analysts and investors with much more certainty what our maintenance CapEx spending level is because we are finding it. Edward H. Yang - Oppenheimer: That’s right. And finally on the dividend, you’ve raised the dividend for 35 consecutive years. This year I think you had signaled that maybe the increase could be a little bit smaller than normal. Has anything changed, given your greater confidence in your guidance? Frank C. Sullivan: Nothing has changed. We have increased our dividend for 35 straight years. I can tell you if you go to our annual report that was mailed in August on the inside flap is a graph that highlights RPM's five-year performance versus the S&P 500 in our peer group and our 10-year performance versus the S&P 500 in our peer group and if you invest $100 in RPM, our peer group and S&P over the last 10 years, our peer group would be up slightly versus that $100, the S&P would be down somewhere around $90, and RPM was at $163. And when we proofed the annual report, I didn’t believe that number because I know what our stock has done up and down and the answer is that that assumed for the S&P 500, our peer group, and RPM the reinvestment of dividends. And so when you look at the power of a dividend which grows every year to providing a total return to long-term shareholders, you know, again, we’ve always believed that, talked about it. It’s nice when reality matches your rhetoric and this is an instance where that differential made a big difference. So we will continue to increase our dividend on a go-forward basis and consistent with growing earnings and cash flow. Our pay-out ratio last year went from mid-40s to low 70s, so our intent over the next three or four years, assuming that earnings and cash flow move in the right direction, is to consistently grow our dividend as we have for the last 35 years but to do so at a rate that will allow us to get that pay-out ratio down below 50% let’s say over the next three years or so. Edward H. Yang - Oppenheimer: Thank you.

(Operator Instructions) Your next question comes from the line of Rosemarie Morbelli from Ingalls & Snyder. Rosemarie Morbelli - Ingalls & Snyder: I have a couple of questions. On the inventory side, Frank, you have taken it down substantially. Are you done or do you think that this is a sustainable level even if the economy picks up, the demand picks up because now you are more efficient? Frank C. Sullivan: I’ll have Kelly answer the details on that. P. Kelly Tompkins: As Frank mentioned in his opening comments, we put such a focus last year on cash flow and really pressed our operating [inaudible] and they delivered in terms of working capital management. We expect to see that discipline continue. Certainly if we get into the second half of the year and the top line is growing as we all hope, you’ll see some greater use of cash in terms of working capital but in a way, that will be a bit of a happy problem that will be reflecting an up-tick in the economy but we are going to continue the discipline until we see that turn more discernible. Rosemarie Morbelli - Ingalls & Snyder: Okay, that is helpful, thanks. And we know that the industrial business is obviously not on the verge of recovery quite yet in North America but I read different inputs regarding what is going on in Europe and while everyone was talking about Europe lagging on the recovery, lagging the U.S., more recent articles are actually talking about the opposite and Western Europe picking up faster than the U.S. What do you see? Frank C. Sullivan: I think we don’t see a real difference geographically except for developing countries. We have a small but growing presence in China and India and we’ve seen our business activities there continue on a small base. But between Europe and the United States, I think that the more discernible trend is our product lines that are focused on industrial maintenance spending and focused into the energy markets and infrastructure markets are doing okay. And our product lines involved with commercial new construction, or even industrial new construction, whether it’s in North America or Europe, are still seeing revenue declines. Rosemarie Morbelli - Ingalls & Snyder: Okay. Frank C. Sullivan: And there’s no -- we’re okay in both places and we are hurting in both places on kind of an equal basis right now. And one other exception, Latin America, where we continue to show nice growth. Rosemarie Morbelli - Ingalls & Snyder: How big are you in Latin America? Not much, I would think. Frank C. Sullivan: Not much -- about $100 million, but growing. Rosemarie Morbelli - Ingalls & Snyder: All right, and you talked a little bit about the multiples for transactions. What do you see today in the marketplace and what is your definition of a more reasonable value? Frank C. Sullivan: I would hesitate to get into too specific valuation language but I can tell you for 30 years that RPM has been involved in acquisition activity in many years we were at the high level of valuation because we’ve always had a good sense of where we pay for a business but I can use the example of one major industrial company in our space which coming out of the last recession in like 2001, 2002 in Europe was sold to a private equity firm for about 5.5 times EBITDA and it was sold again in 2008, I believe, 2007 for about 11.5 times EBITDA. And I could tell you that we are a heck of a lot closer to that first number than we are to the peak number. Rosemarie Morbelli - Ingalls & Snyder: Okay, so -- Frank C. Sullivan: And that was a multi-billion dollar European coatings business. Rosemarie Morbelli - Ingalls & Snyder: All right. Very helpful, and my last -- Frank C. Sullivan: Hopefully that frames kind of the high and the low in our industry over the last decade. Rosemarie Morbelli - Ingalls & Snyder: Yeah, it does, thanks, it is helpful. And then lastly, all of the cost-cutting steps that you took in 2009, are they permanent or are we going to see an increase and you will benefit over the long-run by only half of what you cut because you actually need to spend? Frank C. Sullivan: No, I think that the expense reductions that we took, we were much more thoughtful about. They happened to be in areas of G&A, mostly. In a couple of our industrial businesses in particular in the last recession to respond, we cut some sales expense and paid for that on the recovery by recovering slower, so you are seeing some marketing dollars be cut, you’ve seen some G&A being cut. I think we are learning how to use our tens of millions of dollars in IT systems that we made over the last six or eight years, that pretty much ended a few years ago but I think we are learning to be able to get some productivity out of those that means some of those positions won’t be replaced. My guess is about -- and this is a rough number -- but about 20% to 25% of our headcount reduction came in the elimination of manufacturing shifts and that will be a variable expense that will come back when the revenues come back and we can add shifts. A number of our plants a year, year-and-a-half ago were operating on a three-shift basis. Many of those are now operating on one or two shifts only. Rosemarie Morbelli - Ingalls & Snyder: Okay. Thanks very much.

Your next question comes from the line of Amy [Zang] from Goldman Sachs. Amy Zang - Goldman Sachs: I have a quick question on the raw materials -- you know, we heard several [inaudible] coatings ingredients suppliers have been pretty vocal recently about sequential inflation in their feedstock costs and they have raised prices it looks like pretty aggressively. Also in oil prices back to -- expected to trend higher in 2010 versus 2009, I’m wondering what -- can you talk about the raw materials cost assumption behind your FY2010 segment earnings guidance? Frank C. Sullivan: Yes, the raw materials assumptions behind this earnings guidance is for stable raw materials in terms of where they are now. As I mentioned, we’ve seen some raw material costs declines versus last year’s crazy peaks but they are still ahead of where they were a couple of years ago and meaningfully ahead of where they were four or five years ago. The trendline is up and as long as raw material costs are stable or marginally up, I think we will be able to meet these projections. If we begin to see some spikes -- and the supply and demand ratio has changed pretty dramatically and demand is down dramatically in a lot of areas. Even though a lot of our raw material suppliers have taken supply out of the market, there is still ample supply out there so I think it would take either a quicker economic recovery than we are anticipating, which I think would have benefits for us in terms of revenue growth and the leverage we have in the bottom line for the expense reductions and kind of P&L realignment that we have taken, or from some geopolitical event. But natural gas prices, which is a primary input to most of our chemical raw material suppliers are still relatively low and oil prices at the current rate don’t cause us a lot of problem or heartache and again, the trend seems to be up but I think it’s manageable for us unless we start to see a good return of some of the crazy volatility that we have experienced in the last four or five years. Amy Zang - Goldman Sachs: Thank you.

At this time, there are no further questions. I would like now to turn the call over to RPM's Chairman and CEO, Mr. Frank Sullivan, for closing remarks. Please go ahead, sir. Frank C. Sullivan: Thank you for participating in our first quarter call today. RPM's annual meeting of shareholders will be held this Thursday at 2:00 p.m. at the Holiday Inn in Strongsville. We typically get anywhere from 800 to 1,000 shareholders, so it’s a more interesting event than the typical annual meeting. And we would welcome any and all of you to participate in this year’s annual meeting as well. We look forward to reporting to you the results of our second quarter early after the turn of the year in early January and are quite pleased about the efforts of our companies to return RPM at least in the first quarter to record levels of earnings per share and cash flow generation. I just want to close by thanking the RPM employees worldwide for their extraordinary efforts in this extraordinary time. Thank you very much for your participation in our call today and have a great day.

Ladies and gentlemen, thank you for your participation in today’s conference. This concludes the presentation. You may now disconnect and have a great day.