STOCK TITAN

H.B. Fuller Reports Third Quarter 2024 Results

Rhea-AI Impact
(Neutral)
Rhea-AI Sentiment
(Neutral)
Tags

H.B. Fuller Company (NYSE: FUL) reported financial results for its third quarter ended August 31, 2024. Key highlights include:

  • Net income of $55 million
  • Adjusted EBITDA of $165 million, up 6% year-on-year
  • Adjusted EBITDA margin of 18.0%, up 70 basis points year-on-year
  • Reported EPS (diluted) of $0.98; adjusted EPS (diluted) of $1.13, up 7% versus prior year
  • Net revenue of $918 million, up 1.9% year-on-year including organic volume growth of 3.0%

The company updated its fiscal 2024 outlook, now expecting net revenue growth of approximately 2% with organic revenue flat year-on-year. Adjusted EBITDA is projected to be between $610 million and $620 million, while adjusted EPS (diluted) is expected to be in the range of $4.10 to $4.20.

H.B. Fuller Company (NYSE: FUL) ha riportato i risultati finanziari per il terzo trimestre chiuso il 31 agosto 2024. Principali punti salienti includono:

  • Utile netto di 55 milioni di dollari
  • EBITDA rettificato di 165 milioni di dollari, in aumento del 6% rispetto all’anno precedente
  • Margine EBITDA rettificato del 18,0%, in aumento di 70 punti base rispetto all’anno precedente
  • Utile per azione riportato (diluito) di 0,98 dollari; utile per azione rettificato (diluito) di 1,13 dollari, in aumento del 7% rispetto all’anno precedente
  • Fatturato netto di 918 milioni di dollari, in aumento dell’1,9% rispetto all’anno precedente, con una crescita del volume organico del 3,0%

L’azienda ha aggiornato la sua previsione fiscale per il 2024, ora aspettandosi una crescita del fatturato netto di circa il 2% con ricavi organici stabili rispetto all’anno precedente. Si prevede che l'EBITDA rettificato sarà compreso tra 610 milioni e 620 milioni di dollari, mentre l'utile per azione rettificato (diluito) è atteso nell'intervallo di 4,10 a 4,20 dollari.

La empresa H.B. Fuller Company (NYSE: FUL) reportó resultados financieros para su tercer trimestre que finalizó el 31 de agosto de 2024. Puntos destacados clave incluyen:

  • Ingreso neto de 55 millones de dólares
  • EBITDA ajustado de 165 millones de dólares, un aumento del 6% en comparación con el año anterior
  • Margen EBITDA ajustado del 18.0%, un aumento de 70 puntos básicos en comparación con el año anterior
  • EPS reportado (diluido) de 0.98 dólares; EPS ajustado (diluido) de 1.13 dólares, un aumento del 7% respecto al año anterior
  • Ingresos netos de 918 millones de dólares, un incremento del 1.9% en comparación con el año anterior, incluyendo un crecimiento de volumen orgánico del 3.0%

La empresa actualizó su perspectiva fiscal para 2024, ahora anticipando un crecimiento de ingresos netos de aproximadamente el 2% con ingresos orgánicos sin cambios en comparación con el año anterior. Se proyecta que el EBITDA ajustado esté entre 610 millones y 620 millones de dólares, mientras que se espera que el EPS ajustado (diluido) esté en el rango de 4.10 a 4.20 dólares.

H.B. 플레더 컴퍼니 (NYSE: FUL)는 2024년 8월 31일에 종료된 3분기 재무 결과를 보고했습니다. 주요 하이라이트는 다음과 같습니다:

  • 순이익 5천5백만 달러
  • 조정 EBITDA 1억6천5백만 달러, 전년 대비 6% 증가
  • 조정 EBITDA 마진 18.0%, 전년 대비 70 베이시스 포인트 증가
  • 보고된 주당순이익 (희석) 0.98달러; 조정 주당순이익 (희석) 1.13달러, 전년 대비 7% 증가
  • 순매출 9억1천8백만 달러, 전년 대비 1.9% 증가, 유기적 매출 성장 3.0% 포함

회사는 2024 회계연도 전망을 업데이트했으며, 이제 순매출이 약 2% 성장할 것으로 예상하고 있으며, 유기적 매출은 전년 대비 변동이 없을 것으로 보입니다. 조정 EBITDA는 6억1천만 달러에서 6억2천만 달러 사이로 예상되며, 조정 주당순이익 (희석)은 4.10달러에서 4.20달러 범위로 예상됩니다.

La société H.B. Fuller Company (NYSE: FUL) a rapporté ses résultats financiers pour son troisième trimestre terminé le 31 août 2024. Principaux points forts incluent :

  • Bénéfice net de 55 millions de dollars
  • EBITDA ajusté de 165 millions de dollars, en hausse de 6 % par rapport à l'année précédente
  • Marche d'EBITDA ajusté de 18,0 %, en hausse de 70 points de base par rapport à l'année précédente
  • BPA rapporté (dilué) de 0,98 $ ; BPA ajusté (dilué) de 1,13 $, en hausse de 7 % par rapport à l'année précédente
  • Chiffre d'affaires net de 918 millions de dollars, en hausse de 1,9 % par rapport à l'année précédente, incluant une croissance organique du volume de 3,0 %

L'entreprise a mis à jour ses prévisions fiscales pour 2024, s'attendant désormais à une croissance du chiffre d'affaires net d'environ 2 % avec des revenus organiques stables par rapport à l'année précédente. L'EBITDA ajusté devrait se situer entre 610 millions et 620 millions de dollars, tandis que le BPA ajusté (dilué) est prévu dans une fourchette de 4,10 à 4,20 dollars.

Die H.B. Fuller Company (NYSE: FUL) hat die finanziellen Ergebnisse für das im Jahr 31. August 2024 endende dritte Quartal bekannt gegeben. Wichtige Highlights umfassen:

  • Nettoeinkommen von 55 Millionen Dollar
  • Bereinigtes EBITDA von 165 Millionen Dollar, ein Anstieg von 6 % im Vergleich zum Vorjahr
  • Bereinigte EBITDA-Marge von 18,0 %, ein Anstieg um 70 Basispunkte im Vergleich zum Vorjahr
  • Berichtetes EPS (verwässert) von 0,98 Dollar; bereinigtes EPS (verwässert) von 1,13 Dollar, ein Anstieg von 7 % gegenüber dem Vorjahr
  • Nettoerlös von 918 Millionen Dollar, ein Anstieg von 1,9 % im Vergleich zum Vorjahr, einschließlich organischem Volumenwachstum von 3,0 %

Das Unternehmen hat seinen Ausblick für das Geschäftsjahr 2024 aktualisiert und erwartet nun ein Wachstum des Nettoumsatzes von etwa 2 % mit einem organischen Umsatz, der im Vergleich zum Vorjahr stabil bleibt. Das bereinigte EBITDA wird voraussichtlich zwischen 610 Millionen und 620 Millionen Dollar liegen, während das bereinigte EPS (verwässert) im Bereich von 4,10 bis 4,20 Dollar erwartet wird.

Positive
  • Adjusted EBITDA increased 6% year-on-year to $165 million
  • Adjusted EBITDA margin expanded 70 basis points to 18.0%
  • Adjusted EPS (diluted) grew 7% to $1.13
  • Net revenue increased 1.9% year-on-year to $918 million
  • Organic volume growth of 3.0%
  • Net working capital as a percentage of annualized net revenue decreased 200 basis points to 16.1%
  • Acquired HS Butyl , expanding position in global waterproofing tape market
Negative
  • Pricing adjustments reduced organic revenue by 2.6%
  • Foreign currency translation reduced net revenue by 1.5%
  • SG&A expense increased year-on-year
  • Net debt increased by $100 million year-on-year
  • Lowered full-year guidance due to slowing market demand in certain durable goods markets

Insights

H.B. Fuller's Q3 2024 results show modest growth and margin expansion despite challenging macroeconomic conditions. Key highlights include:

  • Net revenue up 1.9% year-on-year to $918 million, with organic volume growth of 3.0%
  • Adjusted EBITDA increased 6% to $165 million, with margin expanding 70 basis points to 18.0%
  • Adjusted EPS up 7% to $1.13 per diluted share
  • Improved working capital management, decreasing 200 basis points year-on-year to 16.1% of annualized revenue

However, the company has revised its full-year 2024 outlook due to slowing demand in certain markets. The updated guidance projects flat organic revenue growth and adjusted EBITDA of $610-$620 million, representing 5-7% year-on-year growth. This tempered outlook suggests caution for investors, balancing the company's operational improvements against broader economic headwinds.

H.B. Fuller's Q3 results reveal a company navigating a complex market landscape. The 3.0% organic volume growth is encouraging, indicating resilient demand for adhesives across various sectors. However, the revised full-year outlook points to emerging challenges, particularly in durable goods markets.

The acquisition of HS Butyl demonstrates a strategic focus on expanding into high-growth segments like waterproofing tapes. This move could provide a buffer against softening demand in other areas. The company's ability to expand margins through restructuring and strategic acquisitions showcases effective management in a tough environment.

Investors should monitor the company's performance in Q4 closely, as it will be important in determining whether the revised outlook was appropriately conservative or if further headwinds are emerging. The adhesives market's performance often serves as a leading indicator for broader industrial and consumer trends, making H.B. Fuller's results a valuable barometer for the overall economy.

Reported EPS (diluted) of $0.98; Adjusted EPS (diluted) of $1.13, up 7% year-on-year

Net income of $55 million; Adjusted EBITDA of $165 million, up 6% year-on-year

Adjusted EBITDA margin of 18.0%, up 70 basis points year-on-year

ST. PAUL, Minn.--(BUSINESS WIRE)-- H.B. Fuller Company (NYSE: FUL) today reported financial results for its third quarter that ended August 31, 2024.

Third Quarter 2024 Noteworthy Items:

  • Net income was $55 million; adjusted EBITDA was $165 million, up 6% year-on-year; adjusted EBITDA margin expanded 70 basis points year-on-year to 18.0%;
  • Reported EPS (diluted) was $0.98; adjusted EPS (diluted) was $1.13, up 7% versus the prior year;
  • Net revenue was $918 million, up 1.9% year-on-year including organic volume growth of 3.0%;
  • Gross profit margin was 30.0%; adjusted gross profit margin was 30.4%, up 40 basis points year-on-year;
  • Net working capital, as a percentage of annualized net revenue, decreased 200 basis points year-on-year from 18.1% to 16.1%;
  • Repurchased 407,400 shares year-to-date, including 225,000 shares in the quarter;
  • Acquired HS Butyl Limited, the UK’s largest manufacturer and distributor of high-quality butyl tapes, expanding H.B. Fuller’s position in the global waterproofing tape market.

Summary of Third Quarter 2024 Results:

The Company’s net revenue for the third quarter of fiscal 2024 was $918 million, up 1.9% versus the third quarter of fiscal 2023. Organic revenue increased slightly year-on-year, with pricing adjustments reducing organic revenue by 2.6% and volume increasing organic revenue by 3.0%. Foreign currency translation reduced net revenue by 1.5% and acquisitions increased net revenue by 3.0%.

Gross profit in the third quarter of fiscal 2024 was $276 million. Adjusted gross profit was $279 million. Adjusted gross profit margin of 30.4% increased 40 basis points year-on-year. Volume leverage, restructuring savings, and the benefit from acquisitions primarily drove the year-on-year increase in adjusted gross profit.

Selling, general and administrative (SG&A) expense was $171 million in the third quarter of fiscal 2024 and adjusted SG&A was $164 million versus $159 million in the third quarter of fiscal 2023. The impact of acquisitions and inflation in wages and services drove most of the year-on-year increase in adjusted SG&A.

Net income attributable to H.B. Fuller for the third quarter of fiscal 2024 was $55 million, or $0.98 per diluted share. Adjusted net income attributable to H.B. Fuller for the third quarter of fiscal 2024 was $64 million. Adjusted EPS was $1.13 per diluted share, up 7% year-on-year.

Adjusted EBITDA in the third quarter of fiscal 2024 was $165 million, up 6% year-on-year, driven principally by volume growth, restructuring savings, and benefits from recent acquisitions. Adjusted EBITDA margin increased 70 basis points year-on-year to 18.0%.

H.B. Fuller President and CEO Celeste Mastin said, “In the third quarter, we continued to advance our strategy and expand EBITDA margins through volume growth, restructuring actions, and the acquisition of highly profitable, fast-growing businesses. At the same time, we continue to navigate a dynamic macroeconomic environment across our portfolio. Our volume growth during the quarter was impacted by slowing market demand in certain durable goods markets in EA, and we are adjusting our full year outlook accordingly. While this quarter’s volume growth was at the low end of our expectations, we have a clear and focused strategy and a highly engaged team that is well equipped to execute and drive business success. We remain on track to deliver upon our long-term EBITDA margin and organic growth targets.”

Balance Sheet and Working Capital:

Net debt at the end of the third quarter of fiscal 2024 was $1,890 million, up $100 million year-on-year. The ratio of net debt-to-adjusted EBITDA was 3.1X, consistent with the second quarter.

Net working capital in the third quarter of fiscal 2024 decreased $64 million year-on-year. As a percentage of annualized net revenue, net working capital decreased 200 basis points year-on-year to 16.1%.

Fiscal 2024 Outlook:

As a result of our year-to-date performance and current macroeconomic conditions, we are updating our previously communicated financial guidance for fiscal 2024 as follows:

  • Net revenue growth is now expected to be up approximately 2% with organic revenue flat year-on-year;
  • Adjusted EBITDA is now expected to be in the range of $610 million to $620 million, equating to year-on-year growth of between 5% and 7%;
  • Adjusted EPS (diluted) is now expected be in the range of $4.10 to $4.20, equating to year-on-year growth of between 6% and 9%;
  • Operating cash flow is now expected to be between $325 million and $350 million.

Conference Call:

The Company will hold a conference call on September 26, 2024, 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 September 26, 2024, to 10:59 p.m. CT on October 3, 2024. 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 2024 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 2023 revenue of $3.5 billion, our mission to Connect What Matters is brought to life by more than 7,000 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; the impact on the supply chain, raw material costs and pricing of our products due to military conflict, including between Russia and Ukraine and Israel and Hamas; the consequences of the COVID-19 outbreak and other pandemics on our operations and financial results; 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 acquire and integrate complementary businesses; 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; failures in our information technology systems; 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 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

August 31,
2024

 

Percent of
Net Revenue

 

Three
Months
Ended

September 2,
2023

 

Percent of
Net Revenue

Net revenue

 

$

917,927

 

 

 

100.0

%

 

$

900,634

 

 

 

100.0

%

Cost of sales

 

 

(642,198

)

 

 

(70.0

)%

 

 

(637,162

)

 

 

(70.7

)%

Gross profit

 

 

275,729

 

 

 

30.0

%

 

 

263,472

 

 

 

29.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

 

(171,388

)

 

 

(18.7

)%

 

 

(172,153

)

 

 

(19.1

)%

Other income, net

 

 

2,148

 

 

 

0.2

%

 

 

1,555

 

 

 

0.2

%

Interest expense

 

 

(35,288

)

 

 

(3.8

)%

 

 

(35,105

)

 

 

(3.9

)%

Interest income

 

 

1,092

 

 

 

0.1

%

 

 

1,128

 

 

 

0.1

%

Income before income taxes and income from equity method investments

 

 

72,293

 

 

 

7.9

%

 

 

58,897

 

 

 

6.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Income taxes

 

 

(18,264

)

 

 

(2.0

)%

 

 

(22,231

)

 

 

(2.5

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from equity method investments

 

 

1,310

 

 

 

0.1

%

 

 

984

 

 

 

0.1

%

Net income including non-controlling interest

 

 

55,339

 

 

 

6.0

%

 

 

37,650

 

 

 

4.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to non-controlling interest

 

 

22

 

 

 

0.0

%

 

 

(23

)

 

 

(0.0

)%

Net income attributable to H.B. Fuller

 

$

55,361

 

 

 

6.0

%

 

$

37,627

 

 

 

4.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic income per common share attributable to H.B. Fuller

 

$

1.01

 

 

 

 

 

$

0.69

 

 

 

 

Diluted income per common share attributable to H.B. Fuller

 

$

0.98

 

 

 

 

 

$

0.67

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

54,975

 

 

 

 

 

 

54,394

 

 

 

 

Diluted

 

 

56,650

 

 

 

 

 

 

56,033

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends declared per common share

 

$

0.223

 

 

 

 

 

$

0.205

 

 

 

 

H.B. FULLER COMPANY AND SUBSIDIARIES

CONSOLIDATED FINANCIAL INFORMATION

In thousands, except per share amounts (unaudited)

 

 

Nine Months
Ended

August 31,
2024

 

Percent of
Net Revenue

 

Nine Months
Ended

September 2,
2023

 

Percent of
Net Revenue

Net revenue

 

$

2,645,452

 

 

 

100.0

%

 

$

2,608,055

 

 

 

100.0

%

Cost of sales

 

 

(1,848,435

)

 

 

(69.9

)%

 

 

(1,873,000

)

 

 

(71.8

)%

Gross profit

 

 

797,017

 

 

 

30.1

%

 

 

735,055

 

 

 

28.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

 

(525,204

)

 

 

(19.9

)%

 

 

(493,320

)

 

 

(18.9

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income, net

 

 

7,282

 

 

 

0.3

%

 

 

4,764

 

 

 

0.2

%

Interest expense

 

 

(99,504

)

 

 

(3.8

)%

 

 

(101,305

)

 

 

(3.9

)%

Interest income

 

 

3,597

 

 

 

0.1

%

 

 

2,726

 

 

 

0.1

%

Income before income taxes and income from equity method investments

 

 

183,188

 

 

 

6.9

%

 

 

147,920

 

 

 

5.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Income taxes

 

 

(48,496

)

 

 

(1.8

)%

 

 

(51,255

)

 

 

(2.0

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from equity method investments

 

 

2,955

 

 

 

0.1

%

 

 

3,322

 

 

 

0.1

%

Net income including non-controlling interest

 

 

137,647

 

 

 

5.2

%

 

 

99,987

 

 

 

3.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to non-controlling interest

 

 

(32

)

 

 

(0.0

)%

 

 

(71

)

 

 

(0.0

)%

Net income attributable to H.B. Fuller

 

$

137,615

 

 

 

5.2

%

 

$

99,916

 

 

 

3.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic income per common share attributable to H.B. Fuller

 

$

2.51

 

 

 

 

 

$

1.84

 

 

 

 

Diluted income per common share attributable to H.B. Fuller

 

$

2.43

 

 

 

 

 

$

1.79

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

54,874

 

 

 

 

 

 

54,279

 

 

 

 

Diluted

 

 

56,620

 

 

 

 

 

 

55,890

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends declared per common share

 

$

0.651

 

 

 

 

 

$

0.600

 

 

 

H.B. FULLER COMPANY AND SUBSIDIARIES

REGULATION G RECONCILIATION

In thousands, except per share amounts (unaudited)

 

 

Three Months Ended

 

Nine Months Ended

 

 

August 31,

 

September 2,

 

August 31,

 

September 2,

 

 

2024

 

2023

 

2024

 

2023

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to H.B. Fuller

 

$

55,361

 

 

$

37,627

 

 

$

137,615

 

 

$

99,916

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition project costs1

 

 

3,474

 

 

 

6,480

 

 

 

6,984

 

 

 

11,634

 

Organizational realignment2

 

 

9,471

 

 

 

10,421

 

 

 

24,038

 

 

 

19,055

 

Project One3

 

 

3,154

 

 

 

2,734

 

 

 

9,213

 

 

 

7,587

 

Other4

 

 

(2,904

)

 

 

503

 

 

 

(2,021

)

 

 

4,098

 

Discrete tax items5

 

 

(2,937

)

 

 

6,243

 

 

 

(4,147

)

 

 

9,131

 

Income tax effect on adjustments6

 

 

(1,624

)

 

 

(4,875

)

 

 

(6,472

)

 

 

(9,447

)

Adjusted net income attributable to H.B. Fuller7

 

 

63,995

 

 

 

59,133

 

 

 

165,210

 

 

 

141,974

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Add:

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

35,287

 

 

 

35,105

 

 

 

99,502

 

 

 

98,615

 

Interest income

 

 

(1,090

)

 

 

(1,128

)

 

 

(3,594

)

 

 

(2,726

)

Adjusted Income taxes

 

 

22,825

 

 

 

20,862

 

 

 

59,114

 

 

 

51,569

 

Depreciation and Amortization expense8

 

 

44,235

 

 

 

41,826

 

 

 

125,288

 

 

 

118,803

 

Adjusted EBITDA7

 

 

165,252

 

 

 

155,798

 

 

 

445,520

 

 

 

408,235

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted Shares

 

 

56,650

 

 

 

56,033

 

 

 

56,620

 

 

 

55,890

 

Adjusted diluted income per common share attributable to H.B. Fuller7

 

$

1.13

 

 

$

1.06

 

 

$

2.92

 

 

$

2.54

 

Revenue

 

$

917,927

 

 

$

900,634

 

 

$

2,645,452

 

 

$

2,608,055

 

Adjusted EBITDA margin7

 

 

18.0

%

 

 

17.3

%

 

 

16.8

%

 

 

15.7

%

1 Acquisition project costs include costs related to evaluating, acquiring and integrating business acquisitions. Acquisition project costs include $2,457 and $1,757 in transaction costs (primarily consulting and professional fees, representations and warranties insurance premiums and employee acquisition-related travel expenses) and $1,017 and $4,723 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) for the three months ended August 31, 2024 and September 2, 2023, respectively. Acquisition project costs include $5,135 and $5,498 in transaction costs (primarily consulting and professional fees, representations and warranties insurance premiums and employee acquisition related travel expenses), $1,272 and $6,136 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 $577 and $0 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 nine months ended August 31, 2024 and September 2, 2023, 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 $2,939 and $139 in professional fees related to legal entity and business structure changes, $5,363 and $8,798 in employee severance and other related costs, and $1,169 and $1,484 related to facility rationalization costs for the three months ended August 31, 2024 and September 2, 2023, respectively. Organizational realignment includes $6,915 and $3,863 in professional fees related to legal entity and business structure changes, $9,721 and $13,708 in employee severance and other related costs, and $7,402 and $1,484 related to facility rationalization costs for the nine months ended August 31, 2024 and September 2, 2023, respectively.

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

4 Other includes a gain from insurance recoveries and a loss from the write-off of a cost method investment for the three and nine months ended August 31, 2024. Other includes the write-off of unamortized debt fees and non-cash gains and losses related to legal entity consolidations for fiscal 2023.

5 Discrete tax items for the three and nine 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 fiscal 2023 are related to various foreign tax matters offset by excess tax benefit related to U.S. stock compensation.

6 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.

7 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.

8 Depreciation and amortization expense added back for EBITDA is adjusted for amounts already included in adjusted net income attributable to H.B. Fuller totaling $194 and ($348) for the three months ended August 31, 2024 and September 2, 2023, respectively and ($3,425) and ($348) for the nine months ended August 31, 2024 and September 2, 2023, respectively.

H.B. FULLER COMPANY AND SUBSIDIARIES

SEGMENT FINANCIAL INFORMATION

In thousands (unaudited)

 

 

Three Months Ended

 

Nine Months Ended

 

 

August 31,

 

September 2,

 

August 31,

 

September 2,

 

 

2024

 

2023

 

2024

 

2023

Net Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

Hygiene, Health and Consumable Adhesives

 

$

389,854

 

 

$

402,388

 

 

$

1,150,658

 

 

$

1,190,402

 

Engineering Adhesives

 

 

374,923

 

 

 

365,862

 

 

 

1,077,206

 

 

 

1,063,009

 

Construction Adhesives

 

 

153,150

 

 

 

132,384

 

 

 

417,588

 

 

 

354,644

 

Corporate unallocated

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Total H.B. Fuller

 

$

917,927

 

 

$

900,634

 

 

$

2,645,452

 

 

$

2,608,055

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment Operating Income (Loss):

 

 

 

 

 

 

 

 

 

 

 

 

Hygiene, Health and Consumable Adhesives

 

$

49,782

 

 

$

52,737

 

 

$

147,147

 

 

$

149,474

 

Engineering Adhesives

 

 

52,865

 

 

 

52,931

 

 

 

139,522

 

 

 

129,806

 

Construction Adhesives

 

 

12,543

 

 

 

5,853

 

 

 

20,342

 

 

 

2,189

 

Corporate unallocated

 

 

(10,849

)

 

 

(20,202

)

 

 

(35,198

)

 

 

(39,734

)

Total H.B. Fuller

 

$

104,341

 

 

$

91,319

 

 

$

271,813

 

 

$

241,735

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA7

 

 

 

 

 

 

 

 

 

 

 

 

Hygiene, Health and Consumable Adhesives

 

$

64,320

 

 

$

69,172

 

 

$

191,793

 

 

$

194,125

 

Engineering Adhesives

 

 

73,968

 

 

 

70,723

 

 

 

195,133

 

 

 

181,758

 

Construction Adhesives

 

 

25,119

 

 

 

18,519

 

 

 

57,314

 

 

 

39,584

 

Corporate unallocated

 

 

1,845

 

 

 

(2,616

)

 

 

1,280

 

 

 

(7,232

)

Total H.B. Fuller

 

$

165,252

 

 

$

155,798

 

 

$

445,520

 

 

$

408,235

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA Margin7

 

 

 

 

 

 

 

 

 

 

 

 

Hygiene, Health and Consumable Adhesives

 

 

16.5

%

 

 

17.2

%

 

 

16.7

%

 

 

16.3

%

Engineering Adhesives

 

 

19.7

%

 

 

19.3

%

 

 

18.1

%

 

 

17.1

%

Construction Adhesives

 

 

16.4

%

 

 

14.0

%

 

 

13.7

%

 

 

11.2

%

Corporate unallocated

 

NMP

 

NMP

 

NMP

 

NMP

Total H.B. Fuller

 

 

18.0

%

 

 

17.3

%

 

 

16.8

%

 

 

15.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

NMP = non-meaningful percentage

 

 

 

 

 

 

 

 

 

 

 

 

H.B. FULLER COMPANY AND SUBSIDIARIES

REGULATION G RECONCILIATION

In thousands, except per share amounts (unaudited)

 

 

Three Months Ended

 

Nine Months Ended

 

 

August 31,

 

September 2,

 

August 31,

 

September 2,

 

 

2024

 

2023

 

2024

 

2023

Income before income taxes and income from equity method investments

 

$

72,293

 

 

$

58,897

 

$

183,188

 

 

$

147,920

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition project costs1

 

 

3,474

 

 

 

6,480

 

 

6,984

 

 

 

11,634

Organizational realignment2

 

 

9,471

 

 

 

10,421

 

 

24,038

 

 

 

19,055

Project One3

 

 

3,154

 

 

 

2,734

 

 

9,213

 

 

 

7,587

Other4

 

 

(2,904

)

 

 

503

 

 

(2,021

)

 

 

4,098

Adjusted income before income taxes and income from equity method investments9

 

$

85,488

 

 

$

79,035

 

$

221,402

 

 

$

190,294

9 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

 

Nine Months Ended

 

 

August 31,

 

September 2,

 

August 31,

 

September 2,

 

 

2024

 

2023

 

2024

 

2023

Income Taxes

 

$

(18,264

)

 

$

(22,231

)

 

$

(48,496

)

 

$

(51,255

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition project costs1

 

 

(428

)

 

 

(1,569

)

 

 

(1,147

)

 

 

(2,620

)

Organizational realignment2

 

 

(1,166

)

 

 

(2,523

)

 

 

(3,984

)

 

 

(4,247

)

Project One3

 

 

(388

)

 

 

(662

)

 

 

(1,587

)

 

 

(1,655

)

Other4

 

 

(2,579

)

 

 

6,123

 

 

 

(3,900

)

 

 

8,208

 

Adjusted income taxes10

 

$

(22,825

)

 

$

(20,862

)

 

$

(59,114

)

 

$

(51,569

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted income before income taxes and income from equity method investments

 

$

85,488

 

 

$

79,035

 

 

$

221,402

 

 

$

190,294

 

Adjusted effective income tax rate10

 

 

26.7

%

 

 

26.4

%

 

 

26.7

%

 

 

27.1

%

10 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

 

Nine Months Ended

 

 

August 31,

 

September 2,

 

August 31,

 

September 2,

 

 

2024

 

2023

 

2024

 

2023

 

 

 

 

 

 

 

 

 

 

 

 

 

Net revenue

 

$

917,927

 

 

$

900,634

 

 

$

2,645,452

 

 

$

2,608,055

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

$

275,729

 

 

$

263,472

 

 

$

797,017

 

 

$

735,055

 

Gross profit margin

 

 

30.0

%

 

 

29.3

%

 

 

30.1

%

 

 

28.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition project costs1

 

 

927

 

 

 

1,516

 

 

 

1,000

 

 

 

2,617

 

Organizational realignment2

 

 

2,799

 

 

 

4,961

 

 

 

10,679

 

 

 

9,972

 

Project One3

 

 

-

 

 

 

-

 

 

 

13

 

 

 

-

 

Other4

 

 

-

 

 

 

318

 

 

 

-

 

 

 

479

 

Adjusted gross profit11

 

$

279,455

 

 

$

270,267

 

 

$

808,709

 

 

$

748,123

 

Adjusted gross profit margin11

 

 

30.4

%

 

 

30.0

%

 

 

30.6

%

 

 

28.7

%

11 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

 

Nine Months Ended

 

 

August 31,

 

September 2,

 

August 31,

 

September 2,

 

 

2024

 

2023

 

2024

 

2023

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

$

(171,388

)

 

$

(172,153

)

 

$

(525,204

)

 

$

(493,320

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition project costs1

 

 

2,524

 

 

 

5,066

 

 

 

5,962

 

 

 

9,119

 

Organizational realignment2

 

 

6,307

 

 

 

5,460

 

 

 

12,322

 

 

 

9,083

 

Project One3

 

 

3,154

 

 

 

2,734

 

 

 

9,200

 

 

 

7,587

 

Other4

 

 

(4,871

)

 

 

149

 

 

 

(3,988

)

 

 

880

 

Adjusted selling, general and administrative expenses12

 

$

(164,274

)

 

$

(158,744

)

 

$

(501,708

)

 

$

(466,651

)

12 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)

Three Months Ended:

 

Hygiene, Health
and Consumable

 

Engineering

 

Construction

 

 

 

 

Corporate

 

H.B. Fuller

August 31, 2024

 

Adhesives

 

Adhesives

 

Adhesives

 

Total

 

Unallocated

 

Consolidated

Net income attributable to H.B. Fuller

 

$

51,280

 

 

$

53,918

 

 

$

13,974

 

 

$

119,172

 

 

$

(63,811

)

 

$

55,361

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition project costs1

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

3,474

 

 

 

3,474

 

Organizational realignment2

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

9,471

 

 

 

9,471

 

Project One3

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

3,154

 

 

 

3,154

 

Other4

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(2,904

)

 

 

(2,904

)

Discrete tax items5

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(2,937

)

 

 

(2,937

)

Income tax effect on adjustments6

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(1,624

)

 

 

(1,624

)

Adjusted net income attributable to H.B. Fuller7

 

 

51,280

 

 

 

53,918

 

 

 

13,974

 

 

 

119,172

 

 

 

(55,177

)

 

 

63,995

 

Add:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

35,287

 

 

 

35,287

 

Interest income

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(1,090

)

 

 

(1,090

)

Adjusted Income taxes

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

22,825

 

 

 

22,825

 

Depreciation and amortization expense8

 

 

13,040

 

 

 

20,050

 

 

 

11,145

 

 

 

44,235

 

 

 

-

 

 

 

44,235

 

Adjusted EBITDA7

 

$

64,320

 

 

$

73,968

 

 

$

25,119

 

 

$

163,407

 

 

$

1,845

 

 

$

165,252

 

Revenue

 

$

389,854

 

 

$

374,923

 

 

$

153,150

 

 

$

917,927

 

 

 

-

 

 

$

917,927

 

Adjusted EBITDA Margin7

 

 

16.5

%

 

 

19.7

%

 

 

16.4

%

 

 

17.8

%

 

NMP

 

 

18.0

%

Nine Months Ended

 

Hygiene, Health
and Consumable

 

Engineering

 

Construction

 

 

 

 

Corporate

 

H.B. Fuller

August 31, 2024

 

Adhesives

 

Adhesives

 

Adhesives

 

Total

 

Unallocated

 

Consolidated

Net income attributable to H.B. Fuller

 

$

151,636

 

 

$

142,681

 

 

$

24,635

 

 

$

318,952

 

 

$

(181,337

)

 

$

137,615

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition project costs1

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

6,984

 

 

 

6,984

 

Organizational realignment2

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

24,038

 

 

 

24,038

 

Project One3

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

9,213

 

 

 

9,213

 

Other4

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(2,021

)

 

 

(2,021

)

Discrete tax items5

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(4,147

)

 

 

(4,147

)

Income tax effect on adjustments6

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(6,472

)

 

 

(6,472

)

Adjusted net income attributable to H.B. Fuller7

 

 

151,636

 

 

 

142,681

 

 

 

24,635

 

 

 

318,952

 

 

 

(153,742

)

 

 

165,210

 

Add:

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

99,502

 

 

 

99,502

 

Interest income

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(3,594

)

 

 

(3,594

)

Adjusted Income taxes

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

59,114

 

 

 

59,114

 

Depreciation and amortization expense8

 

 

40,157

 

 

 

52,452

 

 

 

32,679

 

 

 

125,288

 

 

 

-

 

 

 

125,288

 

Adjusted EBITDA7

 

$

191,793

 

 

$

195,133

 

 

$

57,314

 

 

$

444,240

 

 

$

1,280

 

 

$

445,520

 

Revenue

 

 

1,150,658

 

 

 

1,077,206

 

 

 

417,588

 

 

 

2,645,452

 

 

 

-

 

 

 

2,645,452

 

Adjusted EBITDA Margin7

 

 

16.7

%

 

 

18.1

%

 

 

13.7

%

 

 

16.8

%

 

NMP

 

 

16.8

%

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)

Three Months Ended:

Hygiene, Health
and Consumable

Engineering

Construction

 

Corporate

H.B. Fuller

September 2, 2023

Adhesives

Adhesives

Adhesives

Total

Unallocated

Consolidated

Net income attributable to H.B. Fuller

$

54,568

 

$

54,256

 

$

7,764

 

$

116,588

 

$

(78,961

)

$

37,627

 

Adjustments:

 

 

 

 

 

 

Acquisition project costs1

 

-

 

 

-

 

 

-

 

 

-

 

 

6,480

 

 

6,480

 

Organizational realignment2

 

-

 

 

-

 

 

-

 

 

-

 

 

10,421

 

 

10,421

 

Project One3

 

-

 

 

-

 

 

-

 

 

-

 

 

2,734

 

 

2,734

 

Other4

 

-

 

 

-

 

 

-

 

 

-

 

 

503

 

 

503

 

Discrete tax items5

 

-

 

 

-

 

 

-

 

 

-

 

 

6,243

 

 

6,243

 

Income tax effect on adjustments6

 

-

 

 

-

 

 

-

 

 

-

 

 

(4,875

)

 

(4,875

)

Adjusted net income attributable to H.B. Fuller7

 

54,568

 

 

54,256

 

 

7,764

 

 

116,588

 

 

(57,455

)

 

59,133

 

Add:

 

 

 

 

 

 

Interest expense

 

-

 

 

-

 

 

-

 

 

-

 

 

35,105

 

 

35,105

 

Interest income

 

-

 

 

-

 

 

-

 

 

-

 

 

(1,128

)

 

(1,128

)

Adjusted Income taxes

 

-

 

 

-

 

 

-

 

 

-

 

 

20,862

 

 

20,862

 

Depreciation and amortization expense8

 

14,604

 

 

16,467

 

 

10,755

 

 

41,826

 

 

-

 

 

41,826

 

Adjusted EBITDA7

$

69,172

 

$

70,723

 

$

18,519

 

$

158,414

 

$

(2,616

)

$

155,798

 

Revenue

$

402,388

 

$

365,862

 

$

132,384

 

$

900,634

 

 

-

 

$

900,634

 

Adjusted EBITDA Margin7

 

17.2

%

 

19.3

%

 

14.0

%

 

17.6

%

NMP

 

17.3

%

Nine Months Ended

 

Hygiene, Health
and Consumable

 

Engineering

 

Construction

 

 

 

Corporate

 

H.B. Fuller

September 2, 2023

 

Adhesives

 

Adhesives

 

Adhesives

 

Total

 

Unallocated

 

Consolidated

Net income attributable to H.B. Fuller

 

$

154,966

 

 

$

133,778

 

 

$

7,920

 

 

$

296,664

 

 

$

(196,748

)

 

$

99,916

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition project costs1

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

11,634

 

 

 

11,634

 

Organizational realignment2

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

19,055

 

 

 

19,055

 

Project One3

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

7,587

 

 

 

7,587

 

Other4

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

4,098

 

 

 

4,098

 

Discrete tax items5

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

9,131

 

 

 

9,131

 

Income tax effect on adjustments6

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(9,447

)

 

 

(9,447

)

Adjusted net income attributable to H.B. Fuller7

 

 

154,966

 

 

 

133,778

 

 

 

7,920

 

 

 

296,664

 

 

 

(154,690

)

 

 

141,974

 

Add:

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

98,615

 

 

 

98,615

 

Interest income

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(2,726

)

 

 

(2,726

)

Adjusted Income taxes

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

51,569

 

 

 

51,569

 

Depreciation and amortization expense8

 

 

39,159

 

 

 

47,980

 

 

 

31,664

 

 

 

118,803

 

 

 

-

 

 

 

118,803

 

Adjusted EBITDA7

 

$

194,125

 

 

$

181,758

 

 

$

39,584

 

 

$

415,467

 

 

$

(7,232

)

 

$

408,235

 

Revenue

 

$

1,190,402

 

 

$

1,063,009

 

 

$

354,644

 

 

$

2,608,055

 

 

 

-

 

 

$

2,608,055

 

Adjusted EBITDA Margin7

 

 

16.3

%

 

 

17.1

%

 

 

11.2

%

 

 

15.9

%

 

NMP

 

 

15.7

%

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

 

Nine Months Ended

 

 

August 31, 2024

 

August 31, 2024

Price

 

 

(2.6

)%

 

 

(3.1

)%

Volume

 

 

3.0

%

 

 

1.9

%

Organic Growth13

 

 

0.4

%

 

 

(1.2

)%

M&A

 

 

3.0

%

 

 

3.9

%

Constant currency

 

 

3.4

%

 

 

2.7

%

F/X

 

 

(1.5

)%

 

 

(1.3

)%

Total H.B. Fuller Net Revenue

 

 

1.9

%

 

 

1.4

%

Revenue growth versus 2023

 

Three Months Ended

 

 

August 31, 2024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net
Revenue

 

F/X

 

Constant
Currency

 

M&A

 

Organic
Growth13

Hygiene, Health and Consumable Adhesives

 

 

(3.1

)%

 

 

(2.6

)%

 

 

(0.5

)%

 

 

0.0

%

 

 

(0.5

)%

Engineering Adhesives

 

 

2.5

%

 

 

(0.8

)%

 

 

3.3

%

 

 

5.3

%

 

 

(2.0

)%

Construction Adhesives

 

 

15.7

%

 

 

(0.1

)%

 

 

15.8

%

 

 

5.6

%

 

 

10.2

%

Total H.B. Fuller

 

 

1.9

%

 

 

(1.5

)%

 

 

3.4

%

 

 

3.0

%

 

 

0.4

%

Revenue growth versus 2023

 

Nine Months Ended

 

 

August 31, 2024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net
Revenue

 

F/X

 

Constant
Currency

 

M&A

 

Organic
Growth13

Hygiene, Health and Consumable Adhesives

 

 

(3.3

)%

 

 

(1.7

)%

 

 

(1.6

)%

 

 

3.2

%

 

 

(4.8

)%

Engineering Adhesives

 

 

1.3

%

 

 

(1.2

)%

 

 

2.5

%

 

 

3.2

%

 

 

(0.7

)%

Construction Adhesives

 

 

17.7

%

 

 

0.0

%

 

 

17.7

%

 

 

8.7

%

 

 

9.0

%

Total H.B. Fuller

 

 

1.4

%

 

 

(1.3

)%

 

 

2.7

%

 

 

3.9

%

 

 

(1.2

)%

13 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.

H.B. FULLER COMPANY AND SUBSIDIARIES

REGULATION G RECONCILIATION

In thousands (unaudited)

 

 

Three Months Ended

 

Trailing Twelve Months16 Ended

 

Year Ended

 

 

September 2,

2023

 

December 2,

2023

 

March 2,

2024

 

June 1,

2024

 

August 31,

2024

 

August 31,

2024

 

June 1,

2024

 

December 2,

2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to H.B. Fuller

 

$

37,627

 

 

$

44,991

 

 

$

30,991

 

 

$

51,264

 

 

$

55,361

 

 

$

182,607

 

 

$

164,873

 

 

$

144,906

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition project costs1

 

 

6,480

 

 

 

4,765

 

 

 

2,043

 

 

 

1,467

 

 

 

3,474

 

 

 

11,749

 

 

 

14,755

 

 

 

16,874

 

Organizational realignment2

 

 

10,421

 

 

 

10,549

 

 

 

7,262

 

 

 

7,275

 

 

 

9,471

 

 

 

34,557

 

 

 

35,507

 

 

 

29,900

 

Project One3

 

 

2,734

 

 

 

2,193

 

 

 

3,213

 

 

 

2,845

 

 

 

3,154

 

 

 

11,405

 

 

 

10,985

 

 

 

9,815

 

Other4

 

 

503

 

 

 

(3,903

)

 

 

-

 

 

 

914

 

 

 

(2,904

)

 

 

(5,893

)

 

 

(2,486

)

 

 

(611

)

Discrete tax items14

 

 

6,243

 

 

 

16,955

 

 

 

(2,527

)

 

 

1,317

 

 

 

(2,937

)

 

 

12,808

 

 

 

21,988

 

 

 

26,085

 

Income tax effect on adjustments5

 

 

(4,875

)

 

 

(1,158

)

 

 

(3,290

)

 

 

(1,558

)

 

 

(1,624

)

 

 

(7,630

)

 

 

(10,881

)

 

 

(10,604

)

Adjusted net income attributable to H.B. Fuller7

 

 

59,133

 

 

 

74,392

 

 

 

37,692

 

 

 

63,524

 

 

 

63,995

 

 

 

239,603

 

 

 

234,741

 

 

 

216,365

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Add:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

35,105

 

 

 

33,297

 

 

 

31,901

 

 

 

32,313

 

 

 

35,287

 

 

 

132,798

 

 

 

132,616

 

 

 

131,913

 

Interest income

 

 

(1,128

)

 

 

(1,217

)

 

 

(1,307

)

 

 

(1,197

)

 

 

(1,090

)

 

 

(4,811

)

 

 

(4,849

)

 

 

(3,943

)

Adjusted Income taxes

 

 

20,862

 

 

 

26,477

 

 

 

13,631

 

 

 

22,658

 

 

 

22,825

 

 

 

85,591

 

 

 

83,628

 

 

 

78,047

 

Depreciation and Amortization expense15

 

 

41,826

 

 

 

39,653

 

 

 

41,101

 

 

 

39,952

 

 

 

44,235

 

 

 

164,941

 

 

 

162,532

 

 

 

158,456

 

Adjusted EBITDA7

 

$

155,798

 

 

$

172,602

 

 

$

123,018

 

 

$

157,250

 

 

$

165,252

 

 

$

618,122

 

 

$

608,668

 

 

$

580,838

 

14 Discrete tax items for the three months ended September 2, 2024 are related to various U.S. and foreign tax matters offset by an excess tax benefit related to U.S. stock compensation. Discrete tax items for the three months ended March 2, 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 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 and year ended December 2, 2023 are related to the tax impact of withholding tax recorded on earnings that are no longer permanently reinvested, as well as other various U.S. and foreign tax matters.

15 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 $348 for the three months ended September 2, 2023, ($1,036) for the three months ended December 2, 2023, ($2,422) for the three months ended March 2, 2024, ($1,198) for the three months ended June 1, 2024, $194 for the three months ended August 31, 2024 and ($1,384) for the year ended December 2, 2023.

16 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)

 

 

June 1, 2024

 

August 31,
2024

 

December 2,
2023

 

September 2,
2023

Total debt

 

$

2,024,916

 

$

2,021,070

 

$

1,838,431

 

$

1,885,021

Less: Cash and cash equivalents

 

 

114,823

 

 

131,412

 

 

179,453

 

 

94,934

Net debt17

 

$

1,910,093

 

$

1,889,658

 

$

1,658,978

 

$

1,790,087

 

 

 

 

 

 

 

 

 

 

 

 

 

Trailing twelve months Adjusted EBITDA16

 

$

608,668

 

$

618,122

 

 

580,838

 

 

 

Net Debt-to-Adjusted EBITDA17

 

 

3.1

 

 

3.1

 

 

2.9

 

 

 

17 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)

 

 

August 31,
2024

 

September 2,
2023

 

December 2,
2023

Trade receivables, net

 

$

574,781

 

 

$

576,060

 

 

$

577,932

Inventory

 

 

509,029

 

 

 

472,641

 

 

 

442,040

Trade payables

 

 

493,550

 

 

 

394,914

 

 

 

439,700

Net working capital18

 

$

590,260

 

 

$

653,787

 

 

$

580,272

 

 

 

 

 

 

 

 

 

 

Net revenue three months ended

 

$

917,927

 

 

$

900,634

 

 

 

 

Annualized net revenue18

 

 

3,671,708

 

 

 

3,602,536

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net working capital as a percentage of annualized revenue18

 

 

16.1

%

 

 

18.1

%

 

 

 

18 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)

 

 

August 31,

 

December 2,

 

 

2024

 

2023

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

131,412

 

 

$

179,453

 

Trade receivables (net of allowances of $13,389 and $11,080, as of August 31, 2024 and December 2, 2023, respectively)

 

 

574,781

 

 

 

577,932

 

Inventories

 

 

509,029

 

 

 

442,040

 

Other current assets

 

 

115,070

 

 

 

112,678

 

Total current assets

 

 

1,330,292

 

 

 

1,312,103

 

 

 

 

 

 

 

 

Property, plant and equipment

 

 

1,855,203

 

 

 

1,755,035

 

Accumulated depreciation

 

 

(993,884

)

 

 

(930,380

)

Property, plant and equipment, net

 

 

861,319

 

 

 

824,655

 

 

 

 

 

 

 

 

Goodwill

 

 

1,591,709

 

 

 

1,486,512

 

Other intangibles, net

 

 

806,148

 

 

 

729,140

 

Other assets

 

 

388,777

 

 

 

371,165

 

Total assets

 

$

4,978,245

 

 

$

4,723,575

 

 

 

 

 

 

 

 

Liabilities, non-controlling interest and total equity

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

Notes payable

 

$

797

 

 

$

1,841

 

Trade payables

 

 

493,550

 

 

 

439,700

 

Accrued compensation

 

 

83,861

 

 

 

95,680

 

Income taxes payable

 

 

39,244

 

 

 

47,688

 

Other accrued expenses

 

 

87,495

 

 

 

107,902

 

Total current liabilities

 

 

704,947

 

 

 

692,811

 

 

 

 

 

 

 

 

Long-term debt

 

 

2,020,273

 

 

 

1,836,590

 

Accrued pension liabilities

 

 

51,739

 

 

 

50,189

 

Other liabilities

 

 

359,565

 

 

 

388,072

 

Total liabilities

 

$

3,136,524

 

 

$

2,967,662

 

 

 

 

 

 

 

 

Commitments and contingencies (Note 13)

 

 

 

 

 

 

 

 

 

 

 

 

 

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 – 54,612,541 and 54,092,987 as of August 31, 2024 and December 2, 2023, respectively

 

$

54,613

 

 

$

54,093

 

Additional paid-in capital

 

 

316,324

 

 

 

301,485

 

Retained earnings

 

 

1,944,380

 

 

 

1,842,507

 

Accumulated other comprehensive loss

 

 

(474,326

)

 

 

(442,880

)

Total H.B. Fuller stockholders' equity

 

 

1,840,991

 

 

 

1,755,205

 

Non-controlling interest

 

 

730

 

 

 

708

 

Total equity

 

 

1,841,721

 

 

 

1,755,913

 

Total liabilities, non-controlling interest and total equity

 

$

4,978,245

 

 

$

4,723,575

 

CONSOLIDATED STATEMENTS of CASH FLOWS

H.B. Fuller Company and Subsidiaries

(In thousands)

 

 

Nine Months Ended

 

 

August 31, 2024

 

September 2, 2023

Cash flows from operating activities:

 

 

 

 

 

 

Net income including non-controlling interest

 

$

137,647

 

 

$

99,987

 

Adjustments to reconcile net income including non-controlling interest to net cash provided by operating activities:

 

 

 

 

 

 

Depreciation

 

 

66,990

 

 

 

60,518

 

Amortization

 

 

61,723

 

 

 

58,633

 

Deferred income taxes

 

 

(45,998

)

 

 

(30,064

)

(Income) loss from equity method investments, net of dividends received

 

 

622

 

 

 

260

 

Gain from Insurance Proceeds

 

 

(7,264

)

 

 

-

 

Equity Investment Impairment Loss

 

 

1,966

 

 

 

-

 

Debt issuance costs write-off

 

 

-

 

 

 

2,689

 

Loss on fair value adjustment on contingent consideration liability

 

 

-

 

 

 

2,893

 

Gain on sale or disposal of assets

 

 

(501

)

 

 

(78

)

Share-based compensation

 

 

17,662

 

 

 

16,279

 

Pension and other post-retirement benefit plan activity

 

 

(6,671

)

 

 

(8,890

)

Change in assets and liabilities, net of effects of acquisitions:

 

 

 

 

 

 

Trade receivables, net

 

 

26,373

 

 

 

79,495

 

Inventories

 

 

(62,206

)

 

 

38,212

 

Other assets

 

 

(39,025

)

 

 

(30,901

)

Trade payables

 

 

49,705

 

 

 

(74,443

)

Accrued compensation

 

 

(11,566

)

 

 

(33,796

)

Other accrued expenses

 

 

(5,244

)

 

 

(6,992

)

Income taxes payable

 

 

(17,873

)

 

 

24,461

 

Other liabilities

 

 

856

 

 

 

12,408

 

Other

 

 

49,591

 

 

 

6,023

 

Net cash provided by operating activities

 

 

216,787

 

 

 

216,694

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

Purchased property, plant and equipment

 

 

(112,799

)

 

 

(109,545

)

Purchased businesses, net of cash acquired

 

 

(274,067

)

 

 

(194,248

)

Proceeds from sale of property, plant and equipment

 

 

1,048

 

 

 

4,257

 

Net cash used in investing activities

 

 

(385,818

)

 

 

(299,536

)

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

Proceeds from issuance of long-term debt

 

 

1,732,900

 

 

 

1,333,000

 

Repayment of long-term debt

 

 

(1,556,135

)

 

 

(1,184,900

)

Payment of debt issuance costs

 

 

(3,493

)

 

 

(10,214

)

Net payment of notes payable

 

 

(1,014

)

 

 

(18,000

)

Dividends paid

 

 

(35,440

)

 

 

(32,319

)

Proceeds from stock options exercised

 

 

34,161

 

 

 

11,251

 

Repurchases of common stock

 

 

(39,371

)

 

 

(2,560

)

Net cash provided by financing activities

 

 

131,608

 

 

 

96,258

 

 

 

 

 

 

 

 

Effect of exchange rate changes on cash and cash equivalents

 

 

(10,618

)

 

 

1,608

 

Net change in cash and cash equivalents

 

 

(48,041

)

 

 

15,024

 

Cash and cash equivalents at beginning of period

 

 

179,453

 

 

 

79,910

 

Cash and cash equivalents at end of period

 

$

131,412

 

 

$

94,934

 

 

Steven Brazones

Investor Relations Contact

651-236-5060

Source: H.B. Fuller Company

FAQ

What was H.B. Fuller's (FUL) adjusted EPS for Q3 2024?

H.B. Fuller's adjusted EPS (diluted) for Q3 2024 was $1.13, up 7% compared to the prior year.

How much did H.B. Fuller's (FUL) net revenue grow in Q3 2024?

H.B. Fuller's net revenue for Q3 2024 was $918 million, up 1.9% compared to the same quarter in the previous year.

What is H.B. Fuller's (FUL) updated adjusted EBITDA guidance for fiscal 2024?

H.B. Fuller updated its adjusted EBITDA guidance for fiscal 2024 to be in the range of $610 million to $620 million, representing year-on-year growth of 5% to 7%.

Did H.B. Fuller (FUL) make any acquisitions in Q3 2024?

Yes, H.B. Fuller acquired HS Butyl , the UK's largest manufacturer and distributor of high-quality butyl tapes, expanding its position in the global waterproofing tape market.

H.B. Fuller Company

NYSE:FUL

FUL Rankings

FUL Latest News

FUL Stock Data

4.01B
54.43M
0.32%
98.68%
1.88%
Specialty Chemicals
Adhesives & Sealants
Link
United States of America
ST PAUL