Matt Hettwer

Matt Hettwer asked for comments on two items: the potential pace of execution against the $500 million share repurchase authorization and the expected cash proceeds from the pending divestiture deal with Bunge.

Answer

CFO Michael DeVeau stated that the share buyback program commenced on October 1st as part of a trading plan, targeting offsetting dilution (approximately $80 million annually, or $20 million for Q4). He noted flexibility to increase or decrease purchases based on intrinsic value and free cash flow. For the Bunge divestiture, he estimated gross proceeds of about $110 million and net cash proceeds of around $90 million after tax and deal fees.

Matt Hettwer asked about the potential pace of execution against the $500 million share repurchase authorization announced last quarter and the expected cash proceeds from the pending divestiture deal with Bunge.

Answer

CFO Michael DeVeau stated that the share buyback program commenced on October 1st, targeting dilution offset, which is approximately $80 million annually, implying about $20 million for Q4. He noted flexibility to adjust purchases based on intrinsic value and free cash flow generation, with a full update in February. For the Bunge deal, he estimated gross proceeds of $110 million and net cash proceeds of around $90 million after tax and deal fees.

Matt Hettwer asked about the lag effects of lower interest rates on the Building Adhesive Solutions (BAS) business, specific benefiting lines like woodworking, and the size and impact of the high-growth data center business within BAS.

Answer

CEO Celeste Mastin noted a 15-18 month lag for architectural billing index impacts from lower interest rates, but more immediate indirect benefits for HHC and BAS (woodworking/furniture). CFO John Corkrean clarified that the data center business, while growing rapidly (40% this year), is less than half of the roofing business, which itself is 5-10% of total revenue, but is a high-margin strategic focus area.

Matt Hettwer asked about the lag effects of lower interest rates on the BAS (Building Adhesive Solutions) business and which specific lines, like glass or woodworking, might benefit most. He also inquired about the size and impact of the data center business on segment results.

Answer

Celeste Mastin, President and Chief Executive Officer, stated a 15-18 month lag for interest rate impacts after the architectural billing index, but noted more immediate indirect benefits for HHC and BAS (e.g., woodworking/furniture) from increased mobility. She described the data center business as strategically approached with a package of adhesives, and John Corkrean, Executive Vice President and Chief Financial Officer, added it's a high-margin, fast-growing area, though less than half of the roofing business (5-10% of total revenue).