Frank Sullivan - CEO Bob Matejka - SVP & CFO Barry Slifstein - VP & Controller

Kevin McCarthy - Bank of America Merrill Lynch Saul Ludwig - Northcoast Research Edward Yang - Oppenheimer Rosemarie Morbelli - Ingalls & Snyder Mike Sison - KeyBanc Silka Cook [ph] - JPMorgan

Welcome to RPM International’s Conference Call for the Fiscal 2010 Fourth Quarter and Year-end. Today’s call is being recorded. This call is also being webcast and can be accessed live or replayed on the RPM website at 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 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. Following today’s presentation, there will be a question and answer session (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.

Thank you [Badestra] and good morning. Welcome to the RPM's 2010 year-end earnings teleconference. We are conducting this call from a conference room at the New York Stock Exchange. We've released our year-end results from New York for the last 40 plus years. With me on today's call are Bob Matejka, our Senior Vice President and Chief Financial Officer and Barry Slifstein, Vice President and Controller. On our call today, we will provide you details of our fourth quarter ended May 31, 2011, some highlights for the full fiscal year and understanding of the impact of the Bondex Specialty Products Holdco Chapter 11 filing on our financial statements and our outlook to the RPM 2011 fiscal year, afterwards we will be happy to answer your questions. Please note that we would like to split our Q&A session today into two parts. The first being questions about our fourth quarter and 2010 full-year results and when we’ve finished answering those questions, and then we'll move to answering questions about the Bondex SPHC filing impact on FY'2011 and our outlook. In the fourth quarter, we experienced strong quarter return to growth in our industrial businesses, particularly in flooring, corrosion control, maintenance and industrial OEM coatings, and roofing and waterproofing products. Our consumer businesses continued to show good growth through sale of maintenance, repair and small project redecorating products. New product introduction like Rust-Oleum Kitchen and Bath and Countertop refinishing kits and market share gains especially in the DIY automotive channels. From a raw material perspective, we are having the same cost and availability issues negatively affect the entire industry. Having said that, the better overall product mix of sales from higher market product lines versus last year, and the diversity of RPM's businesses product lines and end markets versus some of the larger product area concentrations of some of our major competitors has so far allowed RPM to perform relatively better in what is and continues to be a very challenging raw material environment. Lastly as Bob Matejka will note will note in his comments, SG&A spending was up considerably in the quarter to support continuing growth and related to higher compensation levels particularly compared to last year where discretionary spending was been aggressively cut and where compensation across many categories was substantially lower. These SG&A comments relates to RPM across all of our businesses. The impact of higher spending on growth initiatives is especially noticeable on our Consumer segment as we deliberately ramped up advertising and promotion to support our continuing growth. With strong return to growth across almost all RPM's businesses, we were very pleased with our fourth quarter performance. I would now like to turn the call over to Bob Matejka to provide some financial statement details on our fourth quarter and year end after which we will open up the call for questions.

Thanks, Frank, and good morning everyone. Thanks for joining us on today’s call. I will review the fourth quarter in detail as Frank said, touch up on a few year-to-date measures and then I will turn it back to Frank for closing comments before we take your questions. All comments that follow exclude the one time non-cash cost of deconsolidation of SPHC of $7.9 million during our fourth quarter this fiscal year and the non-cash impairment charges of 15.5 million during the fourth quarter of fiscal 2009. For the fourth quarter, consolidated net sales increased 13.3% quarter-over-quarter to 791.5 million. This increase was compromised of 2.5% favorable foreign exchange, growth of 2.1% from acquisitions, and 9% from share unit volume. In the Industrial segment, net sales of 633 million accounting for about 65% of total sales increased 12.9% over last year’s fourth quarter. Foreign exchange here in industrial contributed 3%, acquisitions contributed 2.7% and volume was up 7.1%. On the consumer side, sales were 338.5 million, an improvement of 14% quarter-over-quarter. Foreign exchange and consumer contributed 1.5%, acquisitions were just under 1% and volume was up 12.5 and this volume was partially offset by pricing pressure of approximately 0.8%. Consolidated gross profit was 43.1% for the quarter up from 41.8% for the same quarter last year and the Industrial segment gross profit was 44.4%, an improvement from last year’s 43% favorable mix and approved plan operating leverage attributable to the higher sales volumes helped on this increase. On the Consumer segment, GP, the gross profit was 40.6% improved from 39.5 last year due to improved plant operating leverage attributable to the higher sales volumes. SG&A as a percent of sales increased to 31.4% of sales from 30.4% last year. During the fourth quarter, as Frank mentioned this year SG&A increased due to higher year-over-year advertising expense and employee benefits. And this spending was consistent with increased experienced in both segments. Earnings before interest and taxes or EBIT increased to 111.2 million this year from 98.9 million last year, a 12.4% increase and it is due principally to the higher sales volume and the benefit of improved manufacturing leverage in both segments. Interest expensed increased from 12.2 last year to 16 million this year due to the higher average interest rate we experienced of 6.25% compared with 4.6 last year and it was partially offset by lower average borrowings. With our new $300 million 6.125% bond that was issued in October of 2009, substantially off all of our outstanding debt at May 31st 2010 is text. Investment income of 2.6 million improved from a net expense of 6.6 million for the same quarter last year mainly due to a 7.7 million other than temporary impairment charge last year compared to zero for this year. Our income tax rate of 29.7 for the three months ended May 31st 2010 compared favorably to the tax rate last year of 31.9, principally due to the jurisdictional mix of earnings and the impact of certain foreign operations on our U.S. taxes. Net income of 68.5 million or $0.53 a share improved over the same period last year from 54.6 million or $0.42 a share representing an increase of 26.2%. I'll now cover a few of the 2010 fiscal year-to-date measures as well. Our sales increased 1.3% year-over-year. Foreign exchange accounted for 1.1% of the increase with price and acquisitions contributing 1.2% of the growth which were partially offset by lower volumes of 1%. Our consolidated gross profit was 42.1%, up from 40.2 for the same period last year. Consolidated SG&A as a percent of sales improved slightly from 32.5% to32.4%. EBIT or earnings before interest and taxes, here we had an increase to 328.1 million from 256.6 million last year, representing a 27.9% increase. As a percent of net sales EBIT ended the year at 9.6%, up significantly from last years 7.6%. I'll now close with a few comments on the balance sheet and cash flows. Our balance sheet on May 31, 2010, on that balance sheet you will see that Bondex International Inc. was deconsolidated with SPHC, its parent company and as a result all of the related Bondex asbestos liabilities are no longer reflected on the balance sheet of RPM International. Our CapEx this year was 23.2 million, down from last year's 55 million. Depreciation and amortization expense combined for the full year was 84.3 million, compared to 85.1 a year ago. Receivable in inventory days improved nicely. Our receivable were down 4.7 days year-over-year and inventory decreased 3.3 days year-over-year. On the cash flow side, cash from operating activities for the year ended May 31, 2010 provided 203.9 million compared to 267 million last year. The decline was due to higher working capital performance driven by significant sales growth this year in our fourth quarter. Free cash flow for the year and as you know we defined that as cash from operating activities less CapEx and cash dividend was 75.3 million this year, compared 110.2 million last year. Lastly, a few comments on our capital structure and our overall liquidity as of March 31, 2010, total debt was 928.6 million, compared with 930.8 million a year ago. Our net debt to cap ratio was 39.8, and that compares to 37.2 last year. Our total long-term liquidity at May 31, 2010 sat at $689 million with 215 million of cash and 474 million available through our bank revolver and account receivable securitization facilities. Before we go back to Frank, I want to have Barry Slifstein, our Controller to spend a few minutes talking about the impact of the deconsolidation of SPHC. Barry's comments will help all of the analyst recalibrate our 2011 models, or your 2011 models excuse me for RPM. Thanks Bob.

As you know on May 31, 2010 SPHC and his wholly owned subsidiary Bondex International Inc, files Chapter 11 in Delaware. SPHC, the holding company owns a collection of companies that will not be affected by the filing, but will be included as part of the deconsolidation. The deconsolidated companies accounted for approximately 300 million of total consolidated RPM sales of 3.4 billion or less than 10%. They also accounted for approximately 6% of consolidated net income of RPM fiscal 2010. In our press release, we reported full-year EPS of $1.39. We indicated that the one time non-cash cost of deconsolidation of 7.9 million equated the $0.06 per share. Excluding this one time charge, full-year fiscal 2010 EPS was a $1.45 on an adjusted basis. I would like to now walk you through a bridge that gets you through our fiscal 2010 pro forma results of $1.26 per share as if to deconsolidation of SPHC occurred prior to fiscal 2010. There are two pieces in the bridge. The first is the loss of the results of operations in cash flows of the roughly 300 million in net sales of the deconsolidated companies, which will reduce our go forward EPS by approximately $0.08 per share. The second piece relates to accounting rules regarding non-controlling interest, which require RPM's record SPHC's operating business unit non-controlling ownership interest in certain RPM foreign subsidiary as a non-cash reductions in net income. On a pro forma basis for fiscal 2010 that non-cash, non-controlling interest would have been 14.4 million or approximately $0.11 per share. Included in our press release was a pro forma P&L for fiscal 2010 by quarter as if the deconsolidation occurred prior to fiscal 2010 highlighting EPS by quarter. As you can see pro forma fiscal 2010 include sales of 843 million and EPS at $0.49 per share for the first quarter. Sales of 784 million and EPS of $0.37 per share for the second quarter, sales of 603 million and an EPS loss of $0.08 per share during our seasonally low third quarter, 886 million in sales and $0.47 per share for the fourth quarter with full year results of 3.1 billion in net sales and EPS of a $1.26 per share. On our consolidated balance sheet at May 31, 2010 as Bon said please note that the asbestos liability is no longer included as it was part of the deconsolidation of the SPHC on that date beginning June 1, 2010 the start of fiscal 2011 the results of operations and cash flows of SPHC of group of companies will not be included in the consolidated results of RPM International. Going forward we expect cash flow to improve by approximately 50 million for year as a result of the deconsolidation. With that I would like to turn the call back over to Frank.

Thank you Bob and thank you Barry. Please note that my 2011 outlook comments are based upon and should be compared to the 2010 pro forma results just reviewed by Barry Slifstein. We expect sales growth for the 2011 fiscal year to be in the range of 4% to 6% with our industrial businesses growing 5% to 8% driven by flooring, maintenance, corrosion control and waterproofing and roofing systems. Products driven by commercial construction should bottom out this fall and begin to show growth in the second half of our fiscal year. Lastly a broader and growing international presence will also continue to support growth across our industrial businesses though this also exposes this segment to swing and foreign exchange rates especially the euro and British pound. Our Consumer segment growth is expected to slow to a range of 2% to 4% with higher growth in small project paints and patch and repair products and an expectation for flat results in coats and ceilings category. Earnings in the first half of fiscal 2010 should be up modestly in the 2% to 4% range compared to our record first quarter and second quarter results fiscal 2010 and in part due to expectations related to the current raw material cost environment. Second half earnings are projected to be up 15% to 20% as a result of a return to growth from our businesses associated with construction markets and expectations for more stable raw material environment this fall. Free cash flow will approach record levels in 2011; key issues to watch for the year are three, raw material cost, product price mix, the impact to foreign exchange rates and our expectations for continuing modest macro economic recovery. This forecast does not include acquisition activity which from a timing cost insight perspective is very hard to predict so we don’t. Having said that we would be disappointed if we do not complete $100 million or more of product line or free standing company acquisitions in 2011. That concludes our prepared remarks. We'd now we pleased to answer any of your questions.

(Operator Instructions). Your first question comes from the line of Kevin McCarthy with Bank of America Merrill Lynch. Please proceed. Kevin McCarthy - Bank of America Merrill Lynch: Yes, good morning gentlemen. How are you?

Good. Good morning Kevin. Kevin McCarthy - Bank of America Merrill Lynch: Frank, you mentioned the challenging environment in raw materials. Would you advise us how much raw material costs would have inflated in the quarter on a year-over-year basis and perhaps also any sequential comments and then what your expectations would be for fiscal '11 there?

Starting with the spring, a number of critical raw materials for our entire industry saw significant price increases and in some cases product shortages related to some of the major chemical manufacturing suppliers, plant shut downs for various reasons. In some instances we saw price increases up 10 - 15%. In other instances we saw price increases that were up double or triple that. At the same time there were certain products, categories in terms of raw materials that run allocation. As I mentioned, I don’t have Kevin a specific impact to that handy but it was certainly mid single digits across RPM. We were able to overcome that in the quarter as a result of a better product mix to generally higher margin product lines that had better growth in the fourth quarter versus some of our lower margin product lines which had slower or no growth. And then lastly as I mentioned, the diversity of RPM's companies and products are such that we don’t have the single exposure that companies that have a much bigger concentration in certain product categories have. So that’s kind of the circumstance that we're now. Those challenges remain over the summer. The availability issue has lessened for the most part which is a good thing and we anticipate from what we're hearing in the industry that some of the pricing situation will settle down towards the end of the summer or this fall. But nonetheless, as we sit here today in the middle of the summer and middle of our first quarter we certainly are facing a higher year-over-year raw material cost than we experienced a year ago. Kevin McCarthy - Bank of America Merrill Lynch: As a follow-up then Frank if I may, would you foresee the need or the opportunity to recover those costs via price increases, let's say in the consumer segment relative to the 0.8% year-over-year decline that you referenced in the quarter.

It's really a combination across our different businesses. In some select categories we're getting price increases because we just got to have them. In some of our industrial businesses we've already enacted some price increases and so as I mentioned, and we're seeing price increases starting to come across a lot of our major competitors in different areas and so I think a combination of seeing where the pricing increase efforts in our industry settle out and where raw material costs settle out, I think that settling out should happen this fall really in our second quarter. We would expect to see a better raw material cost price mix but that’s going to be a fall phenomenon, not necessarily a first quarter phenomenon. Kevin McCarthy - Bank of America Merrill Lynch: Okay, thank you very much.

Thank you.

Your next question comes from the line of Saul Ludwig with Northcoast Research. Please proceed. Saul Ludwig - Northcoast Research: Hey good morning everybody.

Good morning Saul. Saul Ludwig - Northcoast Research: Frank, in your 46% revenue growth for the current for the new fiscal year, how much of that 46% is price, just kind of following up Kevin's question?

1%. Saul Ludwig - Northcoast Research: That sounds pretty modest.

It is pretty modest. Again it's circumstantial versus where we are. That will change the raw material circumstances that we are facing are more persistent, and if there is expectation this fog, we're going to see some better pricing and we're already seeing the availability issue is ease up. There is expectations, there will be more capacity coming online. If that is not the case, that is I indicated in my prepared remarks, we will see price increases much more aggressive. Saul Ludwig - Northcoast Research: I'm trying to reconcile the comments you made about the substantial increase in advertising and promotional activities that you spent money for -- in the fourth quarter followed up by pretty modest expectations for revenue growth. I guess I would have thought with big increase in advertising and promotion, you would expect more of that spending to have transferred into top line growth?

As I indicated Saul, we're expecting kind of 2 to 4% in our consumer business. In our small project paint categories, it will be higher than that. In our [coats] and ceilings categories, it will be flat and perhaps even slightly down. That will result in particular of our GAAP businesses, which should begin generating record results last summer. It really came out of the recession early, so they are having a challenging comparison. They are the only portion of our consumer segment. It has some impact of the housing market in terms of new construction, and so it's really a balance between expected higher growth, in our small project paint and patch repair categories, and expectation for flat results in [coats] and ceilings. Saul Ludwig - Northcoast Research: Apparently, hey Bob where is SPHC on the balance sheet? How do we -- what are you valuing that asset add and where does it show up?

It's essentially Saul, the investment is carried, it will be a long-term other asset and the other asset and other asset has a final, a four sub-categories, and goodwill and casual deferred. It's in the other and essentially it's down at a value that recognizes the issues of taking the $7.9 million charge that we took here in our fourth quarter.

Bob, if can you help me?

The whole balance sheet is collapsed into that 101 million that you see in the balance sheet. Saul Ludwig - Northcoast Research: Into other long-term liabilities?

No other long-term assets. The other 101.4 million bucks that we have there, this group of things, but that's where we categorize SPHC for now the long-term asset. Saul Ludwig - Northcoast Research: Other in that 101 million, and how much is the SPHC component?

It's essentially zero which is a little bit misleading if you see offset between some asset and liabilities that were netted. They got to the $0.06 loss as of May 31. Saul Ludwig - Northcoast Research: And the non-controlling interest are a portions of your assets that are owned by somebody else?

No it's interesting nuance of accounting, the non-controlling interest which normally would be equated to what used to be called minority interest are actually the ownership of SPHC operating businesses that were deconsolidated. In RPM International foreign affiliates, so for instance the Day-Glo businesses overseas are not part of the filing, aren’t part of the Day-Glo structure but there is a minority interest by Day-Glo and some of its foreign affiliates. So, with that example it is the ownership, minority ownership with foreign affiliates of SPHC companies. Collectively it's all owned by RPM. Saul Ludwig - Northcoast Research: Got you.

They're not -- its accounting and its non-cash. Saul Ludwig - Northcoast Research: Thank you very much.

Thank you Saul.

Your next question comes from the line of Edward Yang with Oppenheimer. Please proceed.

Good morning Ed. Edward Yang - Oppenheimer: Good morning Frank. Just following up on the SPHC questions, I was a little surprised that the EPS impact particularly for 2009 was a bit higher and I guess it was related to this ownership in foreign subsidiaries again. I think in the June press release you alluded to pretax income hit from SPHC around 19 million back into a net income effect of 13 million and when I look at my model and the pro form it looks like that hit in 2009 was 23.9 million. Was that a surprise to you or a change of bookings since June that additional impact from the select deconsolidation of these units?

Since the June 1 announcement and we were communicating what we knew at that time with the filing of Bondex and SPHC at May 31 and very much focused on the deconsolidated entities and subsequent to then we became aware of the accounting treatment for this non-controlling interest which is non-cash, all those businesses are wholly owned by RPM or have a minority, a small minority interest that is owned by one of the deconsolidated businesses. The sales earnings and cash flow of those companies are fully incorporated into consolidation. So, as indicated earlier it's the nuance of accounting which seems a little bit odd that we have to reflect a non-controlling interest because the deconsolidation because normally that would indicate an ownership interest by an independent third party which is not the case here. So, it is an accounting issue that we had not fully bettered as of June 1 and that’s the proper way to account for it but it is non-cash and all those related businesses are part of the RPM International consolidation. Edward Yang - Oppenheimer: With the asbestos plaintiffs is have -- will they be entitled to that again the non-controlling interest through the 524(g) trust.

No, the asbestos plaintiffs and their lawyers are entitled to the appropriate value associated with the Bondex products and their liability which is the process by which through 524(g) we essentially determined the value of those liabilities that exist today and prospectively for the future. Edward Yang - Oppenheimer: Okay, and on FX, looks like you've got a boost from FX this quarter. I thought that was surprising given that the euro and British pound was down.

Yeah, FX hurt us a little bit in the full year but in the quarter it’s just a combination of how the euro has recovered a little bit versus the dollar and it also is a function of where foreign exchange rates were a year ago at this time which oddly enough helped us in the quarter. But one of the key things that we need to pay attention to for fiscal 2011 is just that because foreign exchange rates, particularly the dollar and Euro relationship which is our largest foreign exchange exposure has been hugely volatile and so that’s an issue that people need to pay attention to relative to our reported results. Edward Yang - Oppenheimer: How do you account for FX? Is that just the average exchange rate during the quarter or do you just take a spot rate at the end of the quarter?

No, the accounting for that is the average exchange rate over the year in the year and then in the quarter it’s the average exchange rate for the quarter. Edward Yang - Oppenheimer: Okay. And you talked a lot about the raw material being a pressure on the margins but actually your gross margins were up. From an operating basis, it looked like most of the pressure came from SG&A. What was the breakout, what's the dollar breakout or percentage breakout in your SG&A line item by advertising or salaries and commissions and so on and what were those up for the quarter?

The area that I focused on is in the consumer area. We had a generally good leverage to the bottom line in our industrial segment in the fourth quarter. Both in the industrial segment and consumer and across all of our businesses we had significantly higher compensation and benefit costs. We had higher pension cash cost and expense for the year and then across almost every category of compensation from participants in our incentive equity plans all the way through to selling commissions who are higher in the quarter year-over-year versus where they were a year ago. And then in particular in the consumer segment, we had about $5 million of additional advertising, TV adverting spend in the quarter versus last year. And also in the consumer segment, we had a one time $2.5 million environmental charge to permanently resolve a long standing on a [super fund side]. So that was 7.5 million in terms of detail in consumer year-over-year. Edward Yang - Oppenheimer: Okay, thank you.

Thank you.

(Operator Instructions). Your next question comes from the line of Rosemarie Morbelli with Ingalls & Snyder. Please proceed. Rosemarie Morbelli - Ingalls & Snyder: Thank you, good morning. Frank, in your press release you say that commercial construction is nearing bottom and you expect the volume to increase by the second half of next year which will be February, May 2011. Do you have any concrete evidence that this will be the case? Is it a question of backlogs, customers comments, customers actions? Could you give us a better feel as to why you made that particular comment?

It's as much related to easy comparisons, Rosemarie. Housing starts are down dramatically but they're not zero. Commercial construction is down dramatically, but it's not zero and in some of our product categories we will be comping negative sales of 25 to 30, 35%. So, some of it is just hitting bottom, and actually in certain product categories we are starting to see that this summer. Other parts of it we anticipate some kind of demand and some freeing up which seems to be slowly happening, financing. A big part of the construction markets challenges have been the availability of project financing which for the last 18 months has been basically zero. So, those are the reasons that we anticipate things improving, and that we anecdotally, we're starting to see that in a couple of product categories as we speak. Rosemarie Morbelli - Ingalls & Snyder: Okay, and could you talk a little bit as to the trends you see in terms of the demand level both in the U.S. and Europe. In another words, when you look at your quarter, we know based on the comments you made in the previous quarter that March was strong. Did you see a continuation of that strength in April and May? Are you see -- did you also see it in June since we are now over that and we almost at the end of July, could you give us a feel as to what you're actually seeing out there in terms of trends sequentially?

Sure. First of all, in the fourth quarter, we saw that continuation in April and May. As you see from our results, we had industrial segment sales up very nicely, 7% plus of that was volume. Consumer segment sales were up nicely in the spring, 12% plus volume increases there. We are starting to experience and that is part of the reason for our forecast, some slowing in consumer takeaway. It's still positive, and we expect it to remain positive, but for some reason it seems to be slowing this summer versus the pretty robust takeaway in our fourth quarter and spring levels. Our industrial segment is continuing to show good revenue growth during the summer, and again we expect that to be positive both from a sales, pricing and volume for the balance of the year, but are forecasting for modest growth in 6 to 8% range versus what we've been experiencing over the last quarter. So, the biggest slowdown is really coming in our consumer businesses, and that's just a function of what we are experiencing over the summer, and it would be interesting to see whether a higher level of growth picks back up, which is certainly possible relative to economic activity, or whether the slowing we're seeing is a trend to slower economic activity. Rosemarie Morbelli - Ingalls & Snyder: And any difference between what is going on here, and what is going on in Western Europe?

No. Our Western European business is continuing to do pretty well for a couple of reasons. In our industrial segment, we're very well positioned with a base in Germany for products that go into building envelope energy efficiency. Those products continue to serve well. We continue to expand in a broader geography and they are being driven by national standards for energy efficiency which quite candidly don't exist in the United States. Also in the European marketplace, Rust-Oleum in particular through a combination of acquisitions and some new investments, we invested in a aerosol filling line in UK, I believe first new aerosol filling capacity investment in Europe in probably 30 years, and despite the challenges in Europe we are continuing to grow nicely there just through picking up market share. Rosemarie Morbelli - Ingalls & Snyder: Okay, thanks.

The last comment is that Latin America, India and the little we do in China are booming but those numbers are relatively small on the total of RPM. Rosemarie Morbelli - Ingalls & Snyder: Okay, and no major change here, you have already addressed that.

Yeah, that’s correct. Thank you. Rosemarie Morbelli - Ingalls & Snyder: Thank you.

Your next question comes from the line of Mike Sison with KeyBanc. Please proceed.

Good morning, Mike. Mike Sison - KeyBanc: Hey, good morning. Nice end of the year.

Thank you and welcome to RPM’s conference call. Mike Sison - KeyBanc: Yeah. In terms of the consumer segment, I think I understand the lack of leverage in the fourth quarter. Does that start to improve in the first half of the year as some of those costs, advertising cost flow through?

I think that should -- it's really just a function of seeing some slower growth in our consumer segment over the summer months and raw material challenges that we see and that’s why when you look at our forecast, our forecast for first half is really very modest earnings growth. We think we can overcome most of the raw material challenges but on a slower sales based on our consumer businesses. And hopefully things will perk back up little bit but it's growing at a slower rate than what we experienced in the spring. And lastly in our consumer businesses in particular in RPM in general we generated records results in our first quarter of last year and our second quarter and then just had two big of hole to fill in the second half of the year although we are making good progress on that as well. Mike Sison - KeyBanc: Okay and then in the Industrial segment, trying to get a better feel for how you ended the quarter in terms of year-over-year growth. Did the strength improve as the month went on; is the June versus same, that 7% or better level?

Yes we had a very strong quarter, we are still experiencing good growth, mid to high single-digit unit volume growth in certain product categories in our Performance Coatings Group we actually had a significantly amount of business in the Gulf States area and so far we haven’t been hurt too much by what’s happening in the Gulf but if you are a major producer of fire proofing products and corrosion control coatings and non-slip floor coatings a lot of products into oil platforms and chemical plants in that region. We have been very sensitive to paying attention to what’s going on down there and it's hard to say whether we will see a significantly slow down or there are certain product categories because of the activity down there that overtime will pick back up and we will pay attention to that as soon as that trend becomes clear communication. Mike Sison - KeyBanc: Okay and last question on acquisitions, you noted about a 100 million sort of the target for 2011, any particular areas of focus?

No we completed a 80 million plus this last year. I think when you look at our cash flow and our (inaudible) levels were down slightly and will generate hopefully record levels of free cash flow this year. But there is a good price line of small product line acquisitions and pre-standing company acquisitions that we have and so I would expect that we would do 100 million at least throughout the fiscal year. The vast majority of those acquisition opportunities that are in that pipeline are outside of the United States and its just a function of our focus of trying to pursue growth more aggressively in regions of the world like India, Latin America or China where there are higher levels of growth and then also opportunities like what we're with Rust-Oleum in the last 18 months has really broken out of its mostly North American DIY credence so far successfully. Mike Sison - KeyBanc: Okay and one last one. In terms of the outlook for raw materials, [purchase] for the pricing be up 1%, it's about 30 million or so. Can it be in the first half of the year in terms of the raw material hits?

That’s correct and we anticipate, I think our whole industry anticipates and are starting to at least see some trends that the availability issues are getting better and that the raw material price challenges are getting better. Pretty volatile still and if that assumption does not change and we are challenged the way we were at the end of the spring, then we will have to revisit price increase issues across many of our businesses this fall. Mike Sison - KeyBanc: So the plan for '11 would just be neutral on raw materials within that assumption?

That’s correct and so the plan and its neutral and that impact is in the first half of the year. Mike Sison - KeyBanc: Okay, great, thank you.

Thank you.

Your next question comes from the line of Jeff Zekauskas. Please proceed. Silka Cook - JPMorgan: Hi, good morning, this is Silka Cook [ph] for Jeff. How are you?

Good morning Silka. Good. Silka Cook - JPMorgan: A couple of questions. Exiting acquisitions you already made, should those add something like I don’t know, 60 or 70 million to your sales line next year if I look at universal and fiber thread and all the others.

That’s correct. Probably somewhere in the 60 to $70 million range. Correct. Silka Cook - JPMorgan: And some questions on SPHC. Was SPHC consolidated still in the fourth quarter results?

Yes they were. And they were part of the $0.53 and the $1.45 a year. Silka Cook - JPMorgan: Okay and I wanted to be a little slow but can you explain again what the $0.06 charge represents?

Sure, it's at the -- at the point of deconsolidation we had to remove SPHC from our balance sheet and so the actual filing date was May 31, 2010. So as of that date, we had to accomplish a deconsolidation and the impact of the asset and liabilities and our investment in SPHC and all those offset in terms of the balance sheet hits was the $0.06 we flowed through our P&L. The impact of the deconsolidation on a pro-forma basis relative to sales and earnings really started on June 1 and that’s the detail we provided on the pro-forma quarters in our earnings release and what Barry Slifstein talked about today in the call. Does that answer your question? Silka Cook - JPMorgan: Yes.

Thank you. Silka Cook - JPMorgan: And one follow-up if I may. Is the deconsolidation approved by the bankruptcy court or does it have to be approved or is it something that is still pending.

I believe it's been approved. Again we, from that process we are a probably three to four year process and at least in the early stages probably first 9 to 12 months, it's going to be kind of quite in the sense, it will be back at in the ring, jacking for position by all side in terms of issues, but so far all the issues relative to the filing have been approved by the court. Silka Cook - JPMorgan: Though the bankruptcy judge has made the decision that he allows the subsidiary to go through bankruptcy and to actually establish the asbestos trust?

Again I -- the answer to that is yes, but this is a process by which various issues come up when you challenge anytime between now and the next two or four years. As we figure it today and all the issues relative to our filing and how, and how Bondex and SPHC file have been ended and filing were all been approved by the court. That's correct. Silka Cook - JPMorgan: And then a last question on that subject the -- what will happen on the -- as I remember though seems like an August 9 trial date. What will happen on that day? What would be discussed?

I don't know the specifics to that question. That's really a SPHC, Bondex situation. But I do know is really what it's referenced before. The court schedules hearings monthly, and so it's partly a slow process because the court had lot of cases to cover, and they take generally a day to two every month to address this particular case, and so that's part of the timeframe here. And as I indicated whether it's August or September, it's our understanding that the next 9 to 12 months, this is really a period of time of time of fact gathering by all sides around this filing, and then we don't expect any major issues or material rulings for that period of time, so there are already major rulings or impact to the decisions we would certainly communicate those. Silka Cook - JPMorgan: Okay, thanks very much.

Thank you.

Your final question for today comes from the line of Saul Ludwig with Northcoast Research. Please proceed. Saul Ludwig - Northcoast Research: Your total material bill on your $3 billion of revenue is approximately what?

Generally, raw materials for us Saul, I mean this is up at the top of my head, but depending on the business generally raw materials run 45% of sales. Saul Ludwig - Northcoast Research: Would do you think 45, 45%?

Yeah. Generally conversion cost are in between factory overhead and direct labor are, 15 put it, but that's a generalization. It ranges widely from one business unit to another. Saul Ludwig - Northcoast Research: And if you exclude raw materials as a part of plastic goods sold here, all other cost, did they change a lot in the fourth quarter, compared to a year ago as you look at your non-raw material cost?

In SG&A or in general?

No, in cost of goods sold? Northcoast Research: No, in cost of goods sold?

In cost of goods sold? Nothing really changed materially, but I think it's the product that was favorable for us in the quarter, and some of the leverage over conversion cost whether it's factory overhead or direct labor by the higher sale math what is been a massively challenging raw material situation for everybody in our industry, and we're not the only one to address it.

Right. Northcoast Research: Right.

I did think -- I think that the product mix and the diversity of our product lines benefited to us so far in this circumstances.

And then finally, will you -- will RPM incur any ongoing costs during this current fiscal year relative to the SPHC or do you expect your results on a quarterly basis to be clean or will they be encumbered with special costs as we go through the year. Northcoast Research: And then finally, will you -- will RPM incur any ongoing costs during this current fiscal year relative to the SPHC or do you expect your results on a quarterly basis to be clean or will they be encumbered with special costs as we go through the year.

Our expectation at this point is that there will be zero cost associated with that. The cost of the filing by Bondex and Specialty Products whole co. will be borne by those entities and will have no impact on RPM and so as you look at the deconsolidation and its impact on our sales and earnings if you also look at the impact on our cash flow. Our cash flow ratios will get substantially better and we should be generating at/or near record levels of free cash flow from RPM. So, there will be zero costs associated with the filing those reform by the filed entities.

Thank you very much. Northcoast Research: Thank you very much.

Thank you, Saul.

You have one follow-up question from the line of Jeff Zekauskas. Please proceed.

Yes, Silka Cook one more time. I wanted to just ask one more question on business trends on the industrial side. Has capital expenditure levels at Europe, customers either maintenance work for picked up, have you seen that trend yet? JP Morgan: Yes, Silka Cook one more time. I wanted to just ask one more question on business trends on the industrial side. Has capital expenditure levels at Europe, customers either maintenance work for picked up, have you seen that trend yet?

Yes we have. And I think one of the things that’s driving good growth in our industrial businesses is we are seeing industrial capital spending improved percentage wise significantly and RPM is a good example. Our CapEx this year should be 40 million maybe a little bit higher. Last year it was 24, the unit just ended was 24 million. We are still little, just slightly lower than half of what we were two years ago. So, well industrial capital spending levels are not near where they were two years ago. The percentage improvement is significant and we are benefiting from that and we would expect that to continue. Silka Cook - JP Morgan: And how far are your peak levels?

I can’t answer that other than from an RPM perspective, our peak raw materials - our peak capital spending was somewhere in the 75 to $78 million and last year it was 24 - 25, this year it will be 40 million plus. So, if we have any indication and if you look at our growth in our industrial businesses and what we were seeing I think you are seeing, 15,20, 25% improvements in some areas in capital raw materials major industrial companies globally. My guess is they are still half of where they were at the peak. So, on hand there is a long good curtailment in terms of things that will drive our core industrial businesses, continue good growth and on the other hand it depends on the continuation of the modest economy recovery that we are seeing and we are seeing it in our businesses and we are seeing it in our industrial customers but obviously there is a lot of concern amongst economists and major banking institutions about the sustainability of that. So, that as I mentioned in our prepared remarks will be one of the things that we pay attention to relative to our ability to outperform these forecasts or whether these forecasts become more challenging. Silka Cook - JP Morgan: And have you been able to get any new customers during this period now?

We gained a lot of new customers particularly internationally as the number of our industrial businesses have expanded their geographic footprint. And in our consumer segment we are picking up market share in a number of different categories. We now find Rust-Oleum products in some select outlets or channels in building materials area to new product category or into them and we picked up a lot of market share in automotive DIY channels. So we are picking up new customers, both in our industrial markets more globally and in our consumer markets in some different categories than the ones that we traditionally played in. Silka Cook - JPMorgan: If I can ask a last question on raw materials. When I look at some basic commodity chemical prices, they've really fallen pretty fast like the past, two or maybe even three months and so I'm a little surprised that you're expecting raw materials to sort off hit a peak probably next quarter than it having peaked really this quarter and costs actually coming down. Why is that?

Our expectation is that we'll see, hopefully it's our expectation that we'll see a better cost price margin really in the fall. I think some of it is just what our experience has been. A small part of it would be FIFO accounting versus LIFO accounting for us versus some of our competitors but that’s what we're currently seeing. Silka Cook - JPMorgan: Thank you very much for clarifying.

Sure, thank you Silka.

I would now like to turn it back over to management for closing remarks.

Thank you and thank you all for your participation on our call today. We are very pleased with the strong revenue growth in our industrial and consumer businesses in the fourth quarter. We look forward to reporting our first quarter results which we expect to be continued strong sales in our industrial segment and more modest sales in our consumer segment for the first quarter which ends in August. We will report those results in early October and look forward to following up on any questions that you all may have particularly related to the deconsolidation in the comparative quarters that we released on a pro-forma basis in our earnings release. Thank you to all the RPM employees again for a tremendous performance in a challenging environment and thank you everybody for your investment in RPM. Have a great day.

Ladies and Gentlemen, that concludes today's conference. Thank you for your participation. You may now disconnect. Have a great day.