H.B. Fuller Reports First Quarter 2025 Results

Rhea-AI Summary

H.B. Fuller (NYSE: FUL) reported Q1 2025 financial results with net revenue of $789 million, down 2.7% year-on-year, while organic revenue grew 1.9%. The company posted net income of $13 million with diluted EPS of $0.24 and adjusted EPS of $0.54.

Key metrics include adjusted EBITDA of $114 million (down 7% year-on-year) and adjusted EBITDA margin of 14.5%. The company repurchased 678 thousand shares during the quarter. Gross margin stood at 28.8%, with adjusted gross margin at 29.6%, showing a slight decrease due to higher raw material costs.

For fiscal 2025, Fuller maintains its outlook with expected net revenue decline of 2-4%, organic revenue growth of 0-2%, and adjusted EBITDA between $600-625 million. The company projects adjusted EPS of $3.90-4.20, representing 2-9% year-on-year growth.

Positive

• Organic revenue growth of 1.9% year-on-year
• Volume growth of 1.7% despite weak market conditions
• Share repurchase program actively continuing with 678k shares bought
• Maintained full-year guidance showing business stability

Negative

• Net revenue declined 2.7% year-on-year to $789 million
• Adjusted EBITDA decreased 7% year-on-year to $114 million
• Adjusted gross margin contracted 50 basis points due to higher raw material costs
• Net debt increased by $409 million year-on-year to $2,074 million
• Operating cash flow decreased year-on-year

Insights

Financial Analyst

H.B. Fuller's Q1 results showcase a company navigating challenging conditions with some resilience. The 1.9% organic revenue growth - driven by 1.7% volume growth and 0.2% pricing - demonstrates the ability to capture market share despite what management describes as weak overall demand conditions. However, this positive is offset by several concerns.

The 7% year-over-year decline in adjusted EBITDA to $114 million reflects ongoing margin pressure from elevated raw material costs, even as inflation moderates. The company's debt position has deteriorated significantly, with net debt increasing to $2,074 million and the leverage ratio rising to 3.5x EBITDA - primarily acquisition-driven, but nonetheless concerning in the current interest rate environment.

While management maintained full-year guidance (adjusted EBITDA of $600-625 million), this implies much stronger performance in upcoming quarters to offset Q1 weakness. The strategic focus on portfolio optimization through divestitures (flooring business) and the share repurchase program (678,000 shares repurchased) suggest confidence in their long-term strategy despite near-term headwinds.

The 50 basis point contraction in adjusted gross margin to 29.6% bears watching, though management's commitment to pricing discipline and manufacturing efficiency improvements could help reverse this trend. Cash flow delivery being weighted to the second half increases execution risk but provides a pathway to deleveraging if successfully implemented.

Net Revenue of $789 million, down 2.7% year-on-year; Organic revenue up 1.9% year-on-year

Net income of $13 million; Reported EPS (diluted) of $0.24; Adjusted EPS (diluted) of $0.54

Adjusted EBITDA of $114 million; Adjusted EBITDA margin of 14.5%

Repurchased 678 thousand shares in the first quarter

ST. PAUL, Minn.--(BUSINESS WIRE)-- H.B. Fuller Company (NYSE: FUL) today reported financial results for its first quarter that ended March 1, 2025.

First Quarter 2025 Noteworthy Items:

• Net revenue was $789 million; unfavorable foreign currency translation and the divestiture of the flooring business resulted in net revenue declining 2.7% year-on-year; organic revenue was up 1.9% year-on-year driven by improved volume;
• Gross margin was 28.8%; adjusted gross margin of 29.6% decreased slightly year-on-year driven by increased raw material costs;
• Net income was $13 million; adjusted EBITDA was $114 million, down 7% versus last year, as expected, as volume growth and positive pricing was more than offset by higher raw material costs and variable compensation;
• Repurchased 678 thousand shares during the quarter.

Summary of First Quarter 2025 Results:

The Company’s net revenue for the first quarter of fiscal 2025 was $789 million, down 2.7% versus the first quarter of fiscal 2024. Organic revenue increased 1.9% year-on-year, with pricing increasing 0.2% and volume increasing 1.7%. Foreign currency translation decreased net revenue by 3.4% and acquisitions/divestitures decreased net revenue by 1.2%.

Gross profit in the first quarter of fiscal 2025 was $227 million. Adjusted gross profit was $233 million. Adjusted gross profit margin of 29.6% decreased 50 basis points year-on-year. While raw material cost inflation has started to moderate, it was still up year-on-year in the first quarter, resulting in the decline in adjusted gross margin.

Selling, general and administrative (SG&A) expense was $181 million in the first quarter of fiscal 2025 and adjusted SG&A was $169 million, up 2 percent year-on-year. The impact of acquisitions and higher variable compensation drove most of the year-on-year increase in adjusted SG&A.

Net income attributable to H.B. Fuller for the first quarter of fiscal 2025 was $13 million. Adjusted net income attributable to H.B. Fuller for the first quarter of fiscal 2025 was $30 million. Reported EPS (diluted) was $0.24 and Adjusted EPS (diluted) was $0.54.

Adjusted EBITDA in the first quarter of fiscal 2025 was $114 million, down 7% year-on-year, as expected, driven by the impact of higher raw material costs and higher variable compensation.

“I am encouraged by our first quarter financial performance and positive organic sales growth,” said Celeste Mastin, president and chief executive officer. “Despite weak overall market demand conditions, we remain focused on pricing discipline, market share gains, and effectively managing our cost structure. Simultaneously, we continue to execute our long-term strategic plan to optimize our portfolio mix and streamline our manufacturing cost structure to drive our business toward our greater than 20% EBITDA margin target.

“As we look ahead, we remain cautious given weak overall market demand and unpredictable geopolitical conditions around the globe. Nevertheless, we are off to a solid start to the year and remain confident we can successfully adapt and execute in this dynamic environment to deliver growth in both organic sales and EBITDA for the year, while expanding EBITDA margin.”

Balance Sheet and Working Capital:

Net debt at the end of the first quarter of fiscal 2025 was $2,074 million, up $233 million sequentially versus the fourth quarter and up $409 million year-on-year. Acquisitions principally drove the increase in net debt, both year-on-year and sequentially. Net debt-to-adjusted EBITDA increased to 3.5X at the end of the first quarter of fiscal 2025.

Net working capital in the first quarter of fiscal 2025 increased $9 million sequentially versus the fourth quarter and declined $12 million year-on-year. As a percentage of annualized net revenue, net working capital was essentially flat year-on-year. Cash flow from operations was down versus last year, as expected, driven by higher working capital needs associated with revenue growth. As previously communicated, cash flow delivery for 2025 is expected to be weighted to the second half of the year.

Fiscal 2025 Outlook:

The Company’s full year outlook for fiscal year 2025 remains unchanged from what was previously communicated in January of this year.

• Net revenue growth for fiscal 2025 is expected to be down 2% to 4%, adjusting for the divestiture of the Flooring business, net revenue is expected to be up 1% to 2%;
• Organic revenue growth is expected to be flat to up 2% versus fiscal 2024;
• Adjusted EBITDA for fiscal 2025 is expected to be in the range of $600 million to $625 million, equating to growth of approximately 1% to 5% year-on-year;
• Adjusted EPS (diluted) is expected to be in the range of $3.90 to $4.20, equating to a range of up 2% to 9% year-on-year;
• Operating cash flow in fiscal year 2025 is expected to be between $300 million and $325 million;
• Adjusted EBITDA for the second quarter of 2025 is expected to be in the range of $150 million to $160 million.

Conference Call:

The Company will hold a conference call on March 27, 2025, at 9:30 a.m. CT (10:30 a.m. ET) to discuss its results. Interested parties may listen to the conference call on a live webcast. The webcast, along with a supplemental presentation, may be accessed from the Company’s website at https://investors.hbfuller.com. Participants must register prior to accessing the webcast using this link and should do so at least 10 minutes prior to the start of the call to install and test any necessary software and audio connections. A telephone replay of the conference call will be available from 12:30 p.m. CT on March 27, 2025, to 10:59 p.m. CT on April 3, 2025. To access the telephone replay dial 1-800-770-2030 (toll free) or 1-609-800-9909, and enter Conference ID: 6370505.

Regulation G:

The information presented in this earnings release regarding consolidated and segment organic revenue growth, operating income, adjusted gross profit, adjusted gross profit margin, adjusted selling, general and administrative expense, adjusted income before income taxes and income from equity investments, adjusted income taxes, adjusted effective tax rate, adjusted net income, adjusted diluted earnings per share, adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA), adjusted EBITDA margin, net debt, net debt-to-adjusted EBITDA, trailing twelve months adjusted EBITDA, net working capital, annualized net revenue and net working capital as a percentage of annualized net revenue does not conform to U.S. generally accepted accounting principles (U.S. GAAP) and should not be construed as an alternative to the reported results determined in accordance with U.S. GAAP. Management has included this non-GAAP information to assist in understanding the operating performance of the Company and its operating segments as well as the comparability of results to the results of other companies. The non-GAAP information provided may not be consistent with the methodologies used by other companies. All non-GAAP information is reconciled with reported U.S. GAAP results in the “Regulation G Reconciliation” tables in this press release with the exception of our forward-looking non-GAAP measures contained above in our Fiscal 2025 Outlook, which the Company cannot reconcile to forward-looking GAAP results without unreasonable effort.

About H.B. Fuller:

As the largest pureplay adhesives company in the world, H.B. Fuller’s (NYSE: FUL) innovative, functional coatings, adhesives and sealants enhance the quality, safety and performance of products people use every day. Founded in 1887, with 2024 revenue of $3.6 billion, our mission to Connect What Matters is brought to life by more than 7,500 global team members who collaborate with customers across more than 30 market segments in over 140 countries to develop highly specified solutions that enable customers to bring world-changing innovations to their end markets. Learn more at www.hbfuller.com.

Safe Harbor for Forward-Looking Statements:

Certain statements in this press release may be considered forward-looking statements within the meaning of the federal securities laws, including Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements often address expected future business and financial performance, financial condition, and other matters, and often contain words or phrases such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “opportunity,” “outlook,” “plan,” “project,” “seek,” “should,” “strategy,” “target,” “will,” “will be,” “will continue,” “will likely result,” “would” and similar expressions, and variations or negatives of these words or phrases. These statements are subject to various risks and uncertainties that could cause our actual results to differ materially from those in the forward-looking statements, including but not limited to the following: the availability and pricing of raw materials; the impact of potential cybersecurity attacks and security breaches; failures in our information technology systems; the impact on the supply chain, raw material costs and pricing of our products due to military conflict, including between Russia and Ukraine and in the Middle East; the impact on our margins and product demand due to inflationary pressures; the substantial amount of debt we have incurred to finance our acquisition of Royal, our ability to repay or refinance our debt or to incur additional debt in the future, our need for a significant amount of cash to service and repay the debt and to pay dividends on our common stock, and the effect of debt covenants that limit the discretion of management in operating the business or in paying dividends; our ability to pay dividends and to pursue growth opportunities if we continue to pay dividends according to our current dividend policy; our ability to effectively manage and realize expected benefits from completed and future mergers, acquisitions, and divestitures; our ability to achieve expected synergies, cost savings and operating efficiencies from our restructuring initiatives and operational improvement projects within the expected time frames or at all; our ability to effectively implement Project ONE; uncertain political and economic conditions; fluctuations in product demand; competing products and pricing; our geographic and product mix; disruptions to our relationships with our major customers and suppliers; regulatory compliance across our global footprint; trade policies and economic sanctions impacting our markets; changes in tax laws and tariffs; devaluations and other foreign exchange rate fluctuations; the impact of litigation and investigations, including for product liability and environmental matters; impairment charges on our goodwill or long-lived assets; the consequences of the COVID-19 outbreak and other pandemics on our operations and financial results; the effect of new accounting pronouncements and accounting charges and credits; and similar matters.

Additional information about these various risks and uncertainties can be found in the “Risk Factors” section of our Form 10-K filings, and any updates to the risk factors in our Form 10-Q and 8-K filings with the SEC, but there may be other risks and uncertainties that we are unable to identify at this time or that we do not currently expect to have a material impact on the business. You should not place undue reliance on forward-looking statements, which speak only as of the date they are made. We do not undertake to update or revise any forward-looking statements, except as required by law.

H.B. FULLER COMPANY AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
In thousands, except per share amounts (unaudited)
	Three Months Ended				Percent of			Three Months Ended				Percent of
	March 1, 2025				Net Revenue			March 2, 2024				Net Revenue
Net revenue	$	788,663			100.0	%		$	810,419			100.0	%
Cost of sales		(561,588	)		(71.2	)%			(571,182	)		(70.5	)%
Gross profit		227,075			28.8	%			239,237			29.5	%
Selling, general and administrative expenses		(180,628	)		(22.9	)%			(172,362	)		(21.3	)%
Other income, net		3,207			0.4	%			1,501			0.2	%
Interest expense		(32,042	)		(4.1	)%			(31,901	)		(3.9	)%
Interest income		1,100			0.1	%			1,307			0.2	%
Income before income taxes and income from equity method investments		18,712			2.4	%			37,782			4.7	%
Income taxes		(5,945	)		(0.8	)%			(7,814	)		(1.0	)%
Income from equity method investments		497			0.1	%			1,044			0.1	%
Net income including non-controlling interest		13,264			1.7	%			31,012			3.8	%
Net income attributable to non-controlling interest		(16	)		(0.0	)%			(21	)		(0.0	)%
Net income attributable to H.B. Fuller	$	13,248			1.7	%		$	30,991			3.8	%
Basic income per common share attributable to H.B. Fuller	$	0.24						$	0.57
Diluted income per common share attributable to H.B. Fuller	$	0.24						$	0.55
Weighted-average common shares outstanding:
Basic		54,998							54,702
Diluted		56,029							56,573

H.B. FULLER COMPANY AND SUBSIDIARIES
REGULATION G RECONCILIATION
In thousands, except per share amounts (unaudited)
	Three Months Ended
	March 1,				March 2,
	2025				2024
Net income attributable to H.B. Fuller	$	13,248			$	30,991
Adjustments:
Acquisition project costs1		9,828				2,043
Organizational realignment2		8,774				7,262
Project One3		3,064				3,213
Discrete tax items4		992				(2,527	)
Income tax effect on adjustments5		(5,909	)			(3,290	)
Adjusted net income attributable to H.B. Fuller6		29,997				37,692
Add:
Interest expense		32,030				31,901
Interest income		(1,100	)			(1,307	)
Adjusted Income taxes		10,862				13,631
Depreciation and Amortization expense7		42,567				41,101
Adjusted EBITDA6		114,356				123,018
Diluted Shares		56,029				56,573
Adjusted diluted income per common share attributable to H.B. Fuller6	$	0.54			$	0.67
Revenue	$	788,663			$	810,419
Adjusted EBITDA margin6		14.5	%			15.2	%

1 Acquisition project costs include costs related to evaluating, acquiring and integrating business acquisitions. Acquisition project costs include $9,192 and $1,293 in transaction costs (primarily consulting and professional fees, representations and warranties insurance premiums and employee acquisition-related travel expenses) and $636 and $214 in purchase accounting costs (primarily professional fees for valuation services, inventory step-up cost and the impact of changes to contingent consideration liabilities after the completion of the purchase price allocation) and $0 and $536 in business integration costs (primarily costs of transition services agreements and for the three months ended March 2, 2024, retention bonuses paid to employees of the acquired entities) for the three months ended March 1, 2025 and March 2, 2024, respectively.

2 Organizational realignment includes costs incurred as a direct result of the organizational realignment program, including professional fees related to legal entity and business structure changes, employee retention and severance costs, and facility rationalization costs related to the closure of production facilities and consolidation of business activities. Facility rationalization costs include plant closure costs, the impact of accelerated depreciation and for the three months ended March 2, 2024, operational inefficiencies. Organizational realignment includes $2,240 and $1,553 in professional fees related to legal entity and business structure changes, $1,172 and $2,191 in employee severance and other related costs, and $5,362 and $3,516 related to facility rationalization costs for the three months ended March 1, 2025 and March 2, 2024, respectively.

3 Project One includes non-capitalizable project costs related to implementing our global Enterprise Resource Planning system, including upgrading to SAP S/4HANA®, which has upgraded and standardized our information system.

4 Discrete tax items for the three months ended March 1, 2025 are related to various foreign tax matters. Discrete tax items for the three months March 2, 2024 are related to various foreign tax matters as well as excess tax benefit related to U.S. stock compensation.

5 The income tax effect on adjustments represents the difference between income taxes on net income before income taxes and income from equity method investments reported in accordance with U.S. GAAP and adjusted net income before income taxes and income from equity method investments.

6 Adjusted net income attributable to H.B. Fuller, adjusted diluted income per common share attributable to H.B. Fuller, adjusted EBITDA and adjusted EBITDA margin are non-GAAP financial measures. Adjusted net income attributable to H.B. Fuller is defined as net income before the specific adjustments shown above. Adjusted diluted income per common share is defined as adjusted net income attributable to H.B. Fuller divided by the number of diluted common shares. Adjusted EBITDA is defined as net income before interest, income taxes, depreciation, amortization and the specific adjustments shown above. Adjusted EBITDA margin is defined as adjusted EBITDA divided by net revenue. The table above provides a reconciliation of adjusted net income attributable to H.B. Fuller, adjusted diluted income per common share attributable to H.B. Fuller, adjusted EBITDA and adjusted EBITDA margin to net income attributable to H.B. Fuller, the most directly comparable financial measure determined and reported in accordance with U.S. GAAP.

7 Depreciation and amortization expense added back for EBITDA is adjusted for amounts already included in adjusted net income attributable to H.B. Fuller totaling ($30) and ($2,422) for the three months ended March 1, 2025 and March 2, 2024, respectively.

H.B. FULLER COMPANY AND SUBSIDIARIES
SEGMENT FINANCIAL INFORMATION
In thousands (unaudited)
	Three Months Ended
	March 1,				March 2,
	2025				2024
Net Revenue:
Hygiene, Health and Consumable Adhesives	$	368,225			$	368,078
Engineering Adhesives		236,758				226,075
Building Adhesive Solutions		183,680				179,666
Corporate unallocated		-				36,600
Total H.B. Fuller	$	788,663			$	810,419
Segment Operating Income (Loss):
Hygiene, Health and Consumable Adhesives	$	29,949			$	47,393
Engineering Adhesives		28,051				25,820
Building Adhesive Solutions		6,577				7,139
Corporate unallocated		(18,130	)			(13,477	)
Total H.B. Fuller	$	46,447			$	66,875
Adjusted EBITDA6
Hygiene, Health and Consumable Adhesives	$	46,891			$	62,863
Engineering Adhesives		44,188				38,202
Building Adhesive Solutions		21,803				21,410
Corporate unallocated		1,474				543
Total H.B. Fuller	$	114,356			$	123,018
Adjusted EBITDA Margin6
Hygiene, Health and Consumable Adhesives		12.7	%			17.1	%
Engineering Adhesives		18.7	%			16.9	%
Building Adhesive Solutions		11.9	%			11.9	%
Corporate unallocated		0.0	%			1.5	%
Total H.B. Fuller		14.5	%			15.2	%

H.B. FULLER COMPANY AND SUBSIDIARIES
REGULATION G RECONCILIATION
In thousands, except per share amounts (unaudited)
	Three Months Ended
	March 1,				March 2,
	2025				2024
Income before income taxes and income from equity method investments	$	18,712			$	37,782
Adjustments:
Acquisition project costs1		9,828				2,043
Organizational realignment2		8,774				7,262
Project One3		3,064				3,213
Adjusted income before income taxes and income from equity method investments8	$	40,378			$	50,300

8 Adjusted income before income taxes and income from equity investments is a non-GAAP financial measure. Adjusted income before income taxes and income from equity investments is defined as income before income taxes and income from equity investments before the specific adjustments shown above. The table above provides a reconciliation of adjusted income before income taxes and income from equity investments to income before income taxes and income from equity investments, the most directly comparable financial measure determined and reported in accordance with U.S. GAAP.

H.B. FULLER COMPANY AND SUBSIDIARIES
REGULATION G RECONCILIATION
In thousands, except per share amounts (unaudited)
	Three Months Ended
	March 1,				March 2,
	2025				2024
Income Taxes	$	(5,945	)		$	(7,814	)
Adjustments:
Acquisition project costs1		(2,680	)			(537	)
Organizational realignment2		(2,393	)			(1,908	)
Project One3		(836	)			(845	)
Discrete tax items4		992				(2,527	)
Adjusted income taxes9	$	(10,862	)		$	(13,631	)
Adjusted income before income taxes and income from equity method investments	$	40,378			$	50,300
Adjusted effective income tax rate9		26.9	%			27.1	%

9 Adjusted income taxes and adjusted effective income tax rate are non-GAAP financial measures. Adjusted income taxes is defined as income taxes before the specific adjustments shown above. Adjusted effective income tax rate is defined as income taxes divided by adjusted income before income taxes and income from equity method investments. The table above provides a reconciliation of adjusted income taxes and adjusted effective income tax rate to income taxes, the most directly comparable financial measure determined and reported in accordance with U.S. GAAP.

H.B. FULLER COMPANY AND SUBSIDIARIES
REGULATION G RECONCILIATION
In thousands (unaudited)
	Three Months Ended
	March 1,				March 2,
	2025				2024
Net revenue	$	788,663			$	810,419
Gross profit	$	227,075			$	239,237
Gross profit margin		28.8	%			29.5	%
Adjustments:
Acquisition project costs1		607				81
Organizational realignment2		5,456				4,411
Project One3		94				-
Adjusted gross profit10	$	233,232			$	243,729
Adjusted gross profit margin10		29.6	%			30.1	%

10 Adjusted gross profit and adjusted gross profit margin are non-GAAP financial measures. Adjusted gross profit and adjusted gross profit margin is defined as gross profit and gross profit margin excluding the specific adjustments shown above. The table above provides a reconciliation of adjusted gross profit and gross profit margin to gross profit and gross profit margin, the most directly comparable financial measure determined and reported in accordance with U.S. GAAP.

H.B. FULLER COMPANY AND SUBSIDIARIES
REGULATION G RECONCILIATION
In thousands (unaudited)
	Three Months Ended
	March 1,				March 2,
	2025				2024
Selling, general and administrative expenses	$	(180,628	)		$	(172,362	)
Adjustments:
Acquisition project costs1		7,706				1,962
Organizational realignment2		1,296				2,551
Project One3		2,970				3,213
Adjusted selling, general and administrative expenses11	$	(168,656	)		$	(164,636	)

11 Adjusted selling, general and administrative expenses is a non-GAAP financial measure. Adjusted selling, general and administrative expenses is defined as selling, general and administrative expenses excluding the specific adjustments shown above. The table above provides a reconciliation of adjusted selling, general and administrative expenses to selling, general and administrative expenses, the most directly comparable financial measure determined and reported in accordance with U.S. GAAP.

H.B. FULLER COMPANY AND SUBSIDIARIES
REGULATION G RECONCILIATION
In thousands (unaudited)
	Hygiene, Health								Building
Three Months Ended:	and Consumable				Engineering				Adhesive								Corporate				H.B. Fuller
March 1, 2025	Adhesives				Adhesives				Solutions				Total				Unallocated				Consolidated
Net income attributable to H.B. Fuller	$	32,160			$	29,023			$	9,132			$	70,315			$	(57,067	)		$	13,248
Adjustments:
Acquisition project costs1		-				-				-				-				9,828				9,828
Organizational realignment2		-				-				-				-				8,774				8,774
Project One3		-				-				-				-				3,064				3,064
Discrete tax items4		-				-				-				-				992				992
Income tax effect on adjustments5		-				-				-				-				(5,909	)			(5,909	)
Adjusted net income attributable to H.B. Fuller6		32,160				29,023				9,132				70,315				(40,318	)			29,997
Add:
Interest expense		-				-				-				-				32,030				32,030
Interest income		-				-				-				-				(1,100	)			(1,100	)
Adjusted Income taxes		-				-				-				-				10,862				10,862
Depreciation and amortization expense7		14,731				15,165				12,671				42,567				-				42,567
Adjusted EBITDA6	$	46,891			$	44,188			$	21,803			$	112,882			$	1,474			$	114,356
Revenue	$	368,225			$	236,758			$	183,680			$	788,663			$	-			$	788,663
Adjusted EBITDA Margin6		12.7	%			18.7	%			11.9	%			14.3	%		NMP					14.5	%

Note: Adjusted EBITDA is a non-GAAP financial measure. The table above provides a reconciliation of adjusted EBITDA for each segment to net income attributable to H.B. Fuller for each segment, the most directly comparable financial measure determined and reported in accordance with U.S. GAAP.

NMP = Non-meaningful percentage

H.B. FULLER COMPANY AND SUBSIDIARIES
REGULATION G RECONCILIATION
In thousands (unaudited)
	Hygiene, Health								Building
Three Months Ended:	and Consumable				Engineering				Adhesive								Corporate				H.B. Fuller
March 2, 2024	Adhesives				Adhesives				Solutions				Total				Unallocated				Consolidated
Net income attributable to H.B. Fuller	$	48,888			$	26,476			$	8,967			$	84,331			$	(53,340	)		$	30,991
Adjustments:
Acquisition project costs1		-				-				-				-				2,043				2,043
Organizational realignment2		-				-				-				-				7,262				7,262
Project One3		-				-				-				-				3,213				3,213
Discrete tax items4		-				-				-				-				(2,527	)			(2,527	)
Income tax effect on adjustments5		-				-				-				-				(3,290	)			(3,290	)
Adjusted net income attributable to H.B. Fuller6		48,888				26,476				8,967				84,331				(46,639	)			37,692
Add:
Interest expense		-				-				-				-				31,901				31,901
Interest income		-				-				-				-				(1,307	)			(1,307	)
Adjusted Income taxes		-				-				-				-				13,631				13,631
Depreciation and amortization expense7		13,975				11,726				12,443				38,144				2,957				41,101
Adjusted EBITDA6	$	62,863			$	38,202			$	21,410			$	122,475			$	543			$	123,018
Revenue	$	368,078			$	226,075			$	179,666			$	773,819			$	36,600			$	810,419
Adjusted EBITDA Margin6		17.1	%			16.9	%			11.9	%			15.8	%			1.5	%			15.2	%

Note: Adjusted EBITDA is a non-GAAP financial measure. The table above provides a reconciliation of adjusted EBITDA for each segment to net income attributable to H.B. Fuller for each segment, the most directly comparable financial measure determined and reported in accordance with U.S. GAAP.

NMP = Non-meaningful percentage

H.B. FULLER COMPANY AND SUBSIDIARIES
SEGMENT FINANCIAL INFORMATION
NET REVENUE GROWTH (DECLINE)
(unaudited)
	Three Months Ended
	March 1, 2025
Price	0.2	%
Volume	1.7	%
Organic Growth12	1.9	%
M&A	(1.2	)%
Constant currency	0.7	%
F/X	(3.4	)%
Total H.B. Fuller Net Revenue	(2.7	)%

Revenue growth versus 2024	Three Months Ended
	March 1, 2025
	Net Revenue			F/X			Constant Currency			M&A			Organic Growth12
Hygiene, Health and Consumable Adhesives	0.0	%		(5.0	)%		5.0	%		0.8	%		4.2	%
Engineering Adhesives	4.7	%		(2.1	)%		6.8	%		8.7	%		(1.9	)%
Building Adhesive Solutions	2.2	%		(2.4	)%		4.6	%		2.4	%		2.2	%
Corporate Unallocated13	(100.0	)%		0.0	%		(100.0	)%		(100.0	)%		0.0	%
Total H.B. Fuller	(2.7	)%		(3.4	)%		0.7	%		(1.2	)%		1.9	%

12 We use the term “organic revenue” to refer to net revenue, excluding the effect of foreign currency changes and acquisitions and divestitures. Organic growth reflects adjustments for the impact of period-over-period changes in foreign currency exchange rates on revenues and the revenues associated with acquisitions and divestitures.

13 Corporate Unallocated includes revenue for the North America Flooring business for the three months ended March 2, 2024. This business was sold in the first quarter of 2025 and as a result all activity for prior years was moved to Corporate Unallocated.

H.B. FULLER COMPANY AND SUBSIDIARIES
REGULATION G RECONCILIATION
In thousands (unaudited)
		Three Months Ended
		June 1, 2024				August 31, 2024				November 30, 2024				March 1, 2025				Trailing Twelve Months Ended18 March 1, 2025				Year Ended November 30, 2024
Net income attributable to H.B. Fuller		$	51,264			$	55,361			$	(7,359	)		$	13,248			$	112,514			$	130,256
Adjustments:
Acquisition project costs1			1,467				3,474				4,051				9,828				18,820				11,035
Organizational realignment2			7,275				9,471				15,958				8,774				41,478				39,996
Project One3			2,845				3,154				2,672				3,064				11,735				11,885
Business divestiture14			-				-				47,267				-				47,267				47,267
Other15			914				(2,904	)			39				-				(1,951	)			(1,981	)
Discrete tax items16			1,317				(2,937	)			(1,322	)			992				(1,950	)			(5,469	)
Income tax effect on adjustments5			(1,558	)			(1,624	)			(9,339	)			(5,909	)			(18,430	)			(15,811	)
Adjusted net income attributable to H.B. Fuller6			63,524				63,995				51,967				29,997				209,483				217,178
Add:
Interest expense			32,313				35,287				33,621				32,030				133,251				133,122
Interest income			(1,197	)			(1,090	)			(1,084	)			(1,100	)			(4,471	)			(4,679	)
Adjusted Income taxes			22,658				22,825				18,546				10,862				74,891				77,661
Depreciation and Amortization expense17			39,952				44,235				45,286				42,567				172,040				170,573
Adjusted EBITDA6		$	157,250			$	165,252			$	148,336			$	114,356			$	585,194			$	593,855
14 Business divestiture for the three months and year ended November 30, 2024 includes impairment losses for goodwill and long-lived assets, and project costs incurred as a direct result of the pending sale of the North America Flooring business. Impairment losses represent the difference between the book value of the assets held for sale and their net realizable value.
15 Other includes a gain from insurance recoveries and a loss from the write-off The original source-language text of this announcement is the official, authoritative version. Translations are provided as an accommodation only, and should be cross-referenced with the source-language text, which is the only version of the text intended to have legal effect of a cost method investment for the three months ended August 31, 2024 and the year ended November 30, 2024.
16 Discrete tax items for the three months ended June 1, 2024 are related to various foreign tax matters as well as excess tax benefit related to U.S. stock compensation. Discrete tax items for the three months ended August 31, 2024 are related to various foreign tax matters as well as excess tax benefit related to U.S. stock compensation. Discrete tax items for the three months ended November 30, 2024 are related to various foreign tax matters. Discrete tax items for the three months ended March 1, 2025 are related to various foreign tax matters. Discrete tax items for the year ended November 30, 2024 are related to various foreign tax matters as well as excess tax benefit related to U.S. stock compensation.
17 Depreciation and amortization expense added back for EBITDA is adjusted for amounts already included in adjusted net income attributable to H.B. Fuller. Depreciation and amortization expense added back was ($1,198) for the three months ended June 1, 2024, $194 for the three months ended August 31, 2024, ($711) for the three months ended November 30, 2024, ($30) for the three months ended March 1, 2025 and ($4,137) for the year ended November 30, 2024.
18 Trailing twelve months adjusted EBITDA is a non-GAAP financial measure and is defined as adjusted EBITDA for the twelve-month period ended on the date presented. The table above provides a reconciliation of trailing twelve month adjusted EBITDA to net income attributable to H.B. Fuller for the trailing twelve-month period presented, the most directly comparable financial measure determined and reported in accordance with U.S. GAAP.

H.B. FULLER COMPANY AND SUBSIDIARIES
REGULATION G RECONCILIATION
In thousands (unaudited)
	March 1, 2025			November 30, 2024			March 2, 2024
Total debt	$	2,179,997		$	2,010,639		$	1,830,797
Less: Cash and cash equivalents		105,743			169,352			165,249
Net debt19	$	2,074,254		$	1,841,287		$	1,665,548
Trailing twelve months18 / Year ended Adjusted EBITDA	$	585,194		$	593,855		$	594,183
Net Debt-to-Adjusted EBITDA19		3.5			3.1			2.8

19 Net debt and net debt-to-adjusted EBITDA are non-GAAP financial measures. Net debt is defined as total debt less cash and cash equivalents. Net debt-to-adjusted EBITDA is defined as net debt divided by trailing twelve months adjusted EBITDA. The calculations of these non-GAAP financial measures are shown in the table above. The table above provides a reconciliation of each of these non-GAAP financial measures to total debt, the most directly comparable financial measure determined and reported in accordance with U.S. GAAP.

H.B. FULLER COMPANY AND SUBSIDIARIES

REGULATION G RECONCILIATION

In thousands (unaudited)

	March 1, 2025				March 2, 2024				November 30, 2024
Trade receivables, net	$	525,496			$	525,689			$	558,336
Inventory		468,323				490,179				467,498
Trade payables		450,401				460,649				491,435
Net working capital20	$	543,418			$	555,219			$	534,399
Net revenue three months ended	$	788,663			$	810,419
Annualized net revenue20		3,154,652				3,241,676
Net working capital as a percentage of annualized revenue20		17.2	%			17.1	%

20 Net working capital, annualized net revenue and net working capital as a percentage of annualized net revenue are non-GAAP financial measures. Net working capital is defined as trade receivables, net plus inventory less trade payables. Annualized net revenue is defined as net revenue for the three months ended on the date presented multiplied by four. Net working capital as a percentage of annualized net revenue is net working capital divided by annualized net revenue. The calculations of these non-GAAP financial measures are shown in the table above. The table above provides a reconciliation of each of these non-GAAP financial measures to the most directly comparable financial measure determined and reported in accordance with U.S. GAAP.

CONSOLIDATED BALANCE SHEETS
H.B. Fuller Company and Subsidiaries
(In thousands, except share and per share amounts)
	March 1,				November 30,
	2025				2024
Assets
Current assets:
Cash and cash equivalents	$	105,743			$	169,352
Trade receivables (net of allowances of $10,222 and $11,621, as of March 1, 2025 and November 30, 2024, respectively)		525,496				558,336
Inventories		468,323				467,498
Other current assets		114,588				104,019
Total current assets		1,214,150				1,299,205
Property, plant and equipment		1,794,291				1,864,558
Accumulated depreciation		(950,290	)			(982,631	)
Property, plant and equipment, net		844,001				881,927
Goodwill		1,624,347				1,532,221
Other intangibles, net		834,515				770,226
Other assets		443,893				449,665
Total assets	$	4,960,906			$	4,933,244
Liabilities, non-controlling interest and total equity
Current liabilities
Notes payable	$	578			$	587
Trade payables		450,401				491,435
Accrued compensation		67,271				106,005
Income taxes payable		15,986				24,225
Other accrued expenses		80,588				97,038
Total current liabilities		614,824				719,290
Long-term debt		2,179,419				2,010,052
Accrued pension liabilities		51,986				51,755
Other liabilities		336,316				322,299
Total liabilities	$	3,182,545			$	3,103,396
Commitments and contingencies
Equity
H.B. Fuller stockholders' equity:
Preferred stock (no shares outstanding) shares authorized – 10,045,900		-				-
Common stock, par value $1.00 per share, shares authorized – 160,000,000, shares outstanding – 54,189,853 and 54,657,103 as of March 1, 2025 and November 30, 2024, respectively	$	54,190			$	54,657
Additional paid-in capital		285,646				322,636
Retained earnings		1,925,724				1,924,761
Accumulated other comprehensive loss		(488,421	)			(473,395	)
Total H.B. Fuller stockholders' equity		1,777,139				1,828,659
Non-controlling interest		1,222				1,189
Total equity		1,778,361				1,829,848
Total liabilities, non-controlling interest and total equity	$	4,960,906			$	4,933,244

CONSOLIDATED STATEMENTS of CASH FLOWS
H.B. Fuller Company and Subsidiaries
(In thousands)
	Three Months Ended
	March 1, 2025				March 2, 2024
Cash flows from operating activities:
Net income including non-controlling interest	$	13,264			$	31,012
Adjustments to reconcile net income including non-controlling interest to net cash provided by operating activities:
Depreciation		21,717				23,168
Amortization		20,880				20,355
Deferred income taxes		5,837				(5,658	)
Income from equity method investments, net of dividends received		(497	)			(1,044	)
Loss on the sale of a business		1,515				-
Gain on sale or disposal of assets		(46	)			(86	)
Share-based compensation		4,708				5,088
Change in assets and liabilities, net of effects of acquisitions:
Trade receivables, net		13,900				56,886
Inventories		(27,122	)			(50,189	)
Other assets		(295	)			(9,064	)
Trade payables		(14,272	)			27,640
Accrued compensation		(37,913	)			(31,862	)
Other accrued expenses		(11,959	)			(12,040	)
Income taxes payable		(21,854	)			(5,121	)
Accrued / prepaid pensions		(1,988	)			(2,126	)
Other liabilities		(311	)			(399	)
Foreign currency remeasurement		(18,471	)			791
Net cash (used in) provided by operating activities		(52,907	)			47,351
Cash flows from investing activities:
Purchased property, plant and equipment		(32,984	)			(43,293	)
Purchased businesses, net of cash acquired		(162,032	)			-
Purchase of cost method investment		(2,549	)			-
Proceeds from sale of property, plant and equipment		477				568
Proceeds from the sale of a business		75,727				-
Net cash used in investing activities		(121,361	)			(42,725	)
Cash flows from financing activities:
Proceeds from issuance of long-term debt		526,300				195,000
Repayment of long-term debt		(359,535	)			(203,250	)
Net payment of notes payable		(164	)			(276	)
Dividends paid		(12,193	)			(11,151	)
Proceeds from stock options exercised		1,384				8,977
Repurchases of common stock		(44,377	)			(6,208	)
Net cash provided by (used in) financing activities		111,415				(16,908	)
Effect of exchange rate changes on cash and cash equivalents		(756	)			(1,922	)
Net change in cash and cash equivalents		(63,609	)			(14,204	)
Cash and cash equivalents at beginning of period		169,352				179,453
Cash and cash equivalents at end of period	$	105,743			$	165,249

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20250326510812/en/

Worldwide Headquarters

1200 Willow Lake Boulevard

St. Paul, Minnesota 55110-5101



Steven Brazones

Investor Relations Contact

651-236-5060

Source: H.B. Fuller Company

FAQ

What was H.B. Fuller's (FUL) organic revenue growth in Q1 2025?

H.B. Fuller's organic revenue grew 1.9% year-on-year in Q1 2025, with pricing up 0.2% and volume increasing 1.7%.

How many shares did H.B. Fuller (FUL) repurchase in Q1 2025?

H.B. Fuller repurchased 678 thousand shares during the first quarter of 2025.

What is H.B. Fuller's (FUL) adjusted EBITDA guidance for fiscal 2025?

The company expects adjusted EBITDA to be between $600 million and $625 million, representing growth of 1% to 5% year-on-year.

What caused H.B. Fuller's (FUL) adjusted gross margin decline in Q1 2025?

The adjusted gross margin declined 50 basis points to 29.6% due to higher year-on-year raw material costs.

What is H.B. Fuller's (FUL) net debt position as of Q1 2025?

Net debt was $2,074 million, with a net debt-to-adjusted EBITDA ratio of 3.5X at the end of Q1 2025.