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
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
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240925304542/en/
Steven Brazones Investor Relations Contact 651-236-5060
H B Fuller (NYSE:FUL)
Gráfico Histórico do Ativo
De Ago 2024 até Set 2024
H B Fuller (NYSE:FUL)
Gráfico Histórico do Ativo
De Set 2023 até Set 2024
