Reported EPS (diluted) of $0.91; Adjusted EPS
(diluted) of $1.12, up 20% year-on-year
Net income of $51 million; Adjusted EBITDA of
$157 million, up 10% year-on-year
Adjusted EBITDA margin of 17.1%, up 120 basis
points year-on-year
Updates full year adjusted EBITDA guidance to
upper end of previously provided range
H.B. Fuller Company (NYSE: FUL) today reported financial results
for its second quarter that ended June 1, 2024.
Second Quarter 2024 Noteworthy Items:
- Net revenue was $917 million, up 2.1% year-on-year; organic
revenue was flat year-on-year with volume up 3.3% and all three
global business units achieving volume growth;
- Gross profit margin was 30.8%; adjusted gross profit margin was
31.1%, up 210 basis points year-on-year, driven principally by
favorable net pricing and raw material cost impact, restructuring
benefits and volume growth;
- Net income was $51 million; adjusted EBITDA was $157 million,
up 10% year-on-year; adjusted EBITDA margin expanded 120 basis
points year-on-year to 17.1%;
- Reported EPS (diluted) was $0.91; adjusted EPS (diluted) was
$1.12, up 20% versus the prior year, driven by strong operating
income growth;
- Year-to-date cash flow from operations increased $21 million
year-on-year to $129 million, driven by improved
profitability;
- Net working capital, as a percentage of annualized net revenue,
decreased 190 basis points year-on-year from 18.1% to 16.2%;
- Reinitiated share repurchase program, acquiring 182,400 shares
during the quarter;
- Acquired ND Industries, Inc., a leading provider of specialty
adhesives and fastener locking solutions for the automotive,
electronics, and aerospace markets.
Summary of Second Quarter 2024 Results:
The Company’s net revenue for the second quarter of fiscal 2024
was $917 million, up 2.1% versus the second quarter of fiscal 2023.
Volume increased net revenue by 3.3% and was offset by anticipated
pricing adjustments, resulting in flat organic revenue
year-on-year. Volume grew in all three global business units.
Foreign currency translation reduced net revenue by 1.7% and
acquisitions increased net revenue by 3.9%.
Gross profit in the second quarter of fiscal 2024 was $282
million. Adjusted gross profit was $286 million. Adjusted gross
profit margin of 31.1% increased 210 basis points year-on-year. The
net impact of pricing and raw material cost actions as well as
restructuring benefits and volume leverage principally drove the
year-on-year increase in adjusted gross profit margin.
Selling, general and administrative (SG&A) expense was $181
million in the second quarter of fiscal 2024 and adjusted SG&A
was $173 million versus $159 million in the second quarter of
fiscal 2023. The impact of acquisitions, inflation in wages and
services, and higher variable compensation expense, partially
offset by restructuring savings, drove the year-on-year increase in
adjusted SG&A.
Net income attributable to H.B. Fuller for the second quarter of
fiscal 2024 was $51 million, or $0.91 per diluted share. Adjusted
net income attributable to H.B. Fuller for the second quarter of
fiscal 2024 was $64 million. Adjusted EPS was $1.12 per diluted
share, up 20% year-on-year driven by strong operating income
growth.
Adjusted EBITDA in the second quarter of fiscal 2024 was $157
million, up 10% year-on-year driven principally by the net impact
of pricing and raw material cost actions, volume growth,
restructuring savings, and benefits from recent acquisitions.
Adjusted EBITDA margin increased 120 basis points year-on-year to
17.1%.
H.B. Fuller President and CEO Celeste Mastin said, “Our strong
second quarter financial performance reflects the team’s steadfast
commitment to execution while driving our long-term strategy to
focus on more profitable, higher growth segments of the market. We
continue to innovate and deliver customized value-enhancing
solutions to our customers while acquiring highly profitable,
fast-growing businesses, like ND Industries, to expand our market
presence in the most differentiated segments. As we execute our
restructuring program focused on streamlining our global footprint,
we are driving sustainable enhancements to our cost structure and
improving our ROIC. In a large total addressable market, where we
win one application at a time, we continue to meaningfully move the
needle and remain on track to deliver adjusted EBITDA margin
greater than 20 percent in the next three to five years.”
Balance Sheet and Working Capital:
Net debt at the end of the second quarter of fiscal 2024 was
$1,910 million, up $131 million year-on-year. The increase in net
debt was driven primarily by the acquisition of ND Industries, Inc.
during the quarter. The ratio of net debt-to-adjusted EBITDA
increased from 2.9X at the end of fiscal year 2023 to 3.1X at the
end of the second quarter.
Net working capital in the second quarter of fiscal 2024
decreased $56 million year-on-year. As a percentage of annualized
net revenue, net working capital decreased 190 basis points
year-on-year to 16.2%.
Fiscal 2024 Outlook:
As a result of our strong first half performance and recent
acquisition activity, partially offset by the strengthening US
Dollar, we are updating our previously communicated financial
guidance for fiscal 2024 as follows:
- Net revenue growth is now expected to be in the range of up 2%
to 4% with organic revenue flat to up 2% year-on-year;
- Adjusted EBITDA is now expected to be in the range of $620
million to $640 million, equating to growth of approximately 7% to
10% year-on-year, and for third quarter adjusted EBITDA to be in
the range of $165 million to $175 million;
- Net interest expense is now expected to be approximately $130
million;
- Adjusted EPS (diluted) is now expected to be in the range of
$4.20 to $4.45, equating to year-on-year growth of between 9% and
15%;
- Operating cash flow is still expected to be between $300
million and $350 million.
Conference Call:
The Company will hold a conference call on June 27, 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 June 27, 2024, to 10:59 p.m. CT on
July 4, 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
Percent of
Three Months Ended
Percent of
June 1, 2024
Net Revenue
June 3, 2023
Net Revenue
Net revenue
$
917,107
100.0
%
$
898,239
100.0
%
Cost of sales
(635,055
)
(69.2
)%
(641,464
)
(71.4
)%
Gross profit
282,052
30.8
%
256,775
28.6
%
Selling, general and administrative
expenses
(181,456
)
(19.8
)%
(166,625
)
(18.6
)%
Other income, net
3,634
0.4
%
605
0.1
%
Interest expense
(32,314
)
(3.5
)%
(33,131
)
(3.7
)%
Interest income
1,199
0.1
%
932
0.1
%
Income before income taxes and income from
equity method investments
73,115
8.0
%
58,556
6.5
%
Income taxes
(22,418
)
(2.4
)%
(19,291
)
(2.1
)%
Income from equity method investments
600
0.1
%
1,157
0.1
%
Net income including non-controlling
interest
51,297
5.6
%
40,422
4.5
%
Net income attributable to non-controlling
interest
(33
)
(0.0
)%
(21
)
(0.0
)%
Net income attributable to H.B. Fuller
$
51,264
5.6
%
$
40,401
4.5
%
Basic income per common share attributable
to H.B. Fuller
$
0.93
$
0.74
Diluted income per common share
attributable to H.B. Fuller
$
0.91
$
0.73
Weighted-average common shares
outstanding:
Basic
54,946
54,269
Diluted
56,636
55,717
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)
Six Months Ended
Percent of
Six Months Ended
Percent of
June 1, 2024
Net Revenue
June 3, 2023
Net Revenue
Net revenue
$
1,727,525
100.0
%
$
1,707,421
100.0
%
Cost of sales
(1,206,237
)
(69.8
)%
(1,235,838
)
(72.4
)%
Gross profit
521,288
30.2
%
471,583
27.6
%
Selling, general and administrative
expenses
(353,817
)
(20.5
)%
(321,167
)
(18.8
)%
Other income, net
5,135
0.3
%
3,209
0.2
%
Interest expense
(64,216
)
(3.7
)%
(66,200
)
(3.9
)%
Interest income
2,506
0.1
%
1,599
0.1
%
Income before income taxes and income from
equity method investments
110,896
6.4
%
89,024
5.2
%
Income taxes
(30,231
)
(1.7
)%
(29,024
)
(1.7
)%
Income from equity method investments
1,644
0.1
%
2,338
0.1
%
Net income including non-controlling
interest
82,309
4.8
%
62,338
3.7
%
Net income attributable to non-controlling
interest
(54
)
(0.0
)%
(48
)
(0.0
)%
Net income attributable to H.B. Fuller
$
82,255
4.8
%
$
62,290
3.6
%
Basic income per common share attributable
to H.B. Fuller
$
1.50
$
1.15
Diluted income per common share
attributable to H.B. Fuller
$
1.45
$
1.12
Weighted-average common shares
outstanding:
Basic
54,824
54,222
Diluted
56,604
55,818
Dividends declared per common share
$
0.428
$
0.395
H.B. FULLER COMPANY AND
SUBSIDIARIES
REGULATION G
RECONCILIATION
In thousands, except per share
amounts (unaudited)
Three Months Ended
Six Months Ended
June 1, 2024
June 3, 2023
June 1, 2024
June 3, 2023
Net income attributable to H.B. Fuller
$
51,264
$
40,401
$
82,255
$
62,290
Adjustments:
Acquisition project costs1
1,467
2,919
3,510
5,154
Organizational realignment2
7,275
5,690
14,536
8,634
Project One3
2,845
2,681
6,058
4,853
Other4
914
521
914
3,594
Discrete tax items5
1,317
2,042
(1,210
)
2,888
Income tax effect on adjustments6
(1,558
)
(2,172
)
(4,848
)
(4,572
)
Adjusted net income attributable to H.B.
Fuller7
63,524
52,082
101,215
82,841
Add:
Interest expense
32,313
33,131
64,215
63,511
Interest income
(1,197
)
(932
)
(2,504
)
(1,599
)
Adjusted Income taxes
22,658
19,421
36,289
30,707
Depreciation and Amortization expense8
39,952
39,063
81,053
76,976
Adjusted EBITDA7
157,250
142,765
280,268
252,436
Diluted Shares
56,636
55,717
56,604
55,818
Adjusted diluted income per common share
attributable to H.B. Fuller7
$
1.12
$
0.93
$
1.79
$
1.48
Revenue
$
917,107
$
898,239
$
1,727,525
$
1,707,421
Adjusted EBITDA margin7
17.1
%
15.9
%
16.2
%
14.8
%
1 Acquisition project costs include costs
related to evaluating, acquiring and integrating business
acquisitions. Acquisition project costs include $1,385 and $2,105
in transaction costs (primarily consulting and professional fees,
representations and warranties insurance premiums and employee
acquisition-related travel expenses), $41 and $815 in purchasing
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 $41 and $0 in business integration
costs (primarily costs of transition services agreements) for the
three months ended June 1, 2024 and June 3, 2023, respectively.
Acquisition project costs include $2,678 and $3,741 in transaction
costs (primarily consulting and professional fees, representations
and warranties insurance premiums and employee acquisition related
travel expenses), $255 and $1,413 in purchasing 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 six months ended June 1, 2024 and June 3, 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 $2,246 and $1,031 in professional fees related
to legal entity and business structure changes, $2,252 and $4,659
in employee severance and other related costs, and $2,777 and $0
related to facility rationalization costs for the three months
ended June 1, 2024 and June 3, 2023, respectively. Organizational
realignment includes $3,869 and $3,724 in professional fees related
to legal entity and business structure changes, $4,426 and $4,910
in employee severance and other related costs, and $6,241 and $0
related to facility rationalization costs for the six months ended
June 1, 2024 and June 3, 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 For fiscal 2023, Other includes the
write-off of unamortized debt fees and non-cash gains and losses
related to legal entity consolidations.
5 Discrete tax items for the three and six
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 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 ($1,198)
and $18 for the three months ended June 1, 2024 and June 3, 2023,
respectively and ($3,620) and $0 for the six months ended June 1,
2024 and June 3, 2023, respectively.
H.B. FULLER COMPANY AND
SUBSIDIARIES
SEGMENT FINANCIAL
INFORMATION
In thousands
(unaudited)
Three Months Ended
Six Months Ended
June 1,
June 3,
June 1,
June 3,
2024
2023
2024
2023
Net Revenue:
Hygiene, Health and Consumable
Adhesives
$
393,111
$
404,486
$
760,804
$
788,014
Engineering Adhesives
373,518
364,080
702,283
697,147
Construction Adhesives
150,478
129,673
264,438
222,260
Corporate unallocated
-
-
-
-
Total H.B. Fuller
$
917,107
$
898,239
$
1,727,525
$
1,707,421
Segment Operating Income
(Loss):
Hygiene, Health and Consumable
Adhesives
$
50,488
$
51,592
$
97,366
$
96,738
Engineering Adhesives
51,822
44,400
86,655
76,875
Construction Adhesives
10,418
5,969
7,799
(3,664
)
Corporate unallocated
(12,133
)
(11,811
)
(24,349
)
(19,533
)
Total H.B. Fuller
$
100,595
$
90,150
$
167,471
$
150,416
Adjusted EBITDA7
Hygiene, Health and Consumable
Adhesives
$
65,216
$
65,234
$
127,474
$
124,953
Engineering Adhesives
68,817
61,159
121,164
111,035
Construction Adhesives
22,628
18,221
32,195
21,065
Corporate unallocated
589
(1,849
)
(565
)
(4,617
)
Total H.B. Fuller
$
157,250
$
142,765
$
280,268
$
252,436
Adjusted EBITDA Margin7
Hygiene, Health and Consumable
Adhesives
16.6
%
16.1
%
16.8
%
15.9
%
Engineering Adhesives
18.4
%
16.8
%
17.3
%
15.9
%
Construction Adhesives
15.0
%
14.1
%
12.2
%
9.5
%
Corporate unallocated
NMP
NMP
NMP
NMP
Total H.B. Fuller
17.1
%
15.9
%
16.2
%
14.8
%
NMP = non-meaningful percentage
H.B. FULLER COMPANY AND
SUBSIDIARIES
REGULATION G
RECONCILIATION
In thousands, except per share
amounts (unaudited)
Three Months Ended
Six Months Ended
June 1,
June 3,
June 1,
June 3,
2024
2023
2024
2023
Income before income taxes and income from
equity method investments
$
73,115
$
58,556
$
110,896
$
89,024
Adjustments:
Acquisition project costs1
1,467
2,919
3,510
5,154
Organizational realignment2
7,275
5,690
14,536
8,634
Project One3
2,845
2,681
6,058
4,853
Other4
914
521
914
3,594
Adjusted income before income taxes and
income from equity method investments9
$
85,616
$
70,367
$
135,914
$
111,259
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
Six Months Ended
June 1,
June 3,
June 1,
June 3,
2024
2023
2024
2023
Income Taxes
$
(22,418
)
$
(19,291
)
$
(30,231
)
$
(29,024
)
Adjustments:
Acquisition project costs1
(183
)
(537
)
(720
)
(1,051
)
Organizational realignment2
(906
)
(1,046
)
(2,815
)
(1,724
)
Project One3
(355
)
(493
)
(1,199
)
(993
)
Other4
1,204
1,946
(1,324
)
2,085
Adjusted income taxes10
$
(22,658
)
$
(19,421
)
$
(36,289
)
$
(30,707
)
Adjusted income before income taxes and
income from equity method investments
$
85,616
$
70,367
$
135,914
$
111,259
Adjusted effective income tax rate10
26.5
%
27.6
%
26.7
%
27.6
%
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
Six Months Ended
June 1,
June 3,
June 1,
June 3,
2024
2023
2024
2023
Net revenue
$
917,107
$
898,239
$
1,727,525
$
1,707,421
Gross profit
$
282,052
$
256,775
$
521,288
$
471,583
Gross profit margin
30.8
%
28.6
%
30.2
%
27.6
%
Adjustments:
Acquisition project costs1
(8
)
1,058
73
1,101
Organizational realignment2
3,466
2,690
7,880
5,011
Project One3
13
-
13
-
Other4
-
53
-
160
Adjusted gross profit11
$
285,523
$
260,576
$
529,254
$
477,855
Adjusted gross profit margin11
31.1
%
29.0
%
30.6
%
28.0
%
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
Six Months Ended
June 1,
June 3,
June 1,
June 3,
2024
2023
2024
2023
Selling, general and administrative
expenses
$
(181,456
)
$
(166,625
)
$
(353,817
)
$
(321,167
)
Adjustments:
Acquisition project costs1
1,475
1,861
3,437
4,053
Organizational realignment2
3,439
3,000
5,986
3,623
Project One3
2,832
2,681
6,045
4,853
Other4
914
468
914
731
Adjusted selling, general and
administrative expenses12
$
(172,796
)
$
(158,615
)
$
(337,435
)
$
(307,907
)
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)
Hygiene, Health
Three Months Ended
and Consumable
Engineering
Construction
Corporate
H.B. Fuller
June 1, 2024
Adhesives
Adhesives
Adhesives
Total
Unallocated
Consolidated
Net income attributable to
H.B. Fuller
$
51,984
$
52,876
$
11,849
$
116,709
$
(65,445
)
$
51,264
Adjustments:
Acquisition project costs1
-
-
-
-
1,467
1,467
Organizational realignment2
-
-
-
-
7,275
7,275
Project One3
-
-
-
-
2,845
2,845
Other4
-
-
-
-
914
914
Discrete tax items5
-
-
-
-
1,317
1,317
Income tax effect on adjustments6
-
-
-
-
(1,558
)
(1,558
)
Adjusted net income attributable to H.B.
Fuller7
51,984
52,876
11,849
116,709
(53,185
)
63,524
Add:
Interest expense
-
-
-
-
32,313
32,313
Interest income
-
-
-
-
(1,197
)
(1,197
)
Adjusted Income taxes
-
-
-
-
22,658
22,658
Depreciation and amortization expense8
13,232
15,941
10,779
39,952
-
39,952
Adjusted EBITDA7
$
65,216
$
68,817
$
22,628
$
156,661
$
589
$
157,250
Revenue
$
393,111
$
373,518
$
150,478
$
917,107
-
$
917,107
Adjusted EBITDA Margin7
16.6
%
18.4
%
15.0
%
17.1
%
NMP
17.1
%
Hygiene, Health
Six Months Ended
and Consumable
Engineering
Construction
Corporate
H.B. Fuller
June 1, 2024
Adhesives
Adhesives
Adhesives
Total
Unallocated
Consolidated
Net income attributable to
H.B. Fuller
$
100,356
$
88,762
$
10,662
$
199,780
$
(117,525
)
$
82,255
Adjustments:
Acquisition project costs1
-
-
-
-
3,510
3,510
Organizational realignment2
-
-
-
-
14,536
14,536
Project One3
-
-
-
-
6,058
6,058
Other4
-
-
-
-
914
914
Discrete tax items5
-
-
-
-
(1,210
)
(1,210
)
Income tax effect on adjustments6
-
-
-
-
(4,848
)
(4,848
)
Adjusted net income attributable to H.B.
Fuller7
100,356
88,762
10,662
199,780
(98,565
)
101,215
Add:
Interest expense
-
-
-
-
64,215
64,215
Interest income
-
-
-
-
(2,504
)
(2,504
)
Adjusted Income taxes
-
-
-
-
36,289
36,289
Depreciation and amortization expense8
27,118
32,402
21,533
81,053
-
81,053
Adjusted EBITDA7
$
127,474
$
121,164
$
32,195
$
280,833
$
(565
)
$
280,268
Revenue
760,804
702,283
264,438
1,727,525
-
1,727,525
Adjusted EBITDA Margin7
16.8
%
17.3
%
12.2
%
16.3
%
NMP
16.2
%
Note: Adjusted EBITDA is a non-GAAP
financial measure. The table above provides a reconciliation of
adjusted EBITDA for each segment to net income attributable to H.B.
Fuller for each segment, the most directly comparable financial
measure determined and reported in accordance with U.S. GAAP.
NMP = Non-meaningful percentage
H.B. FULLER COMPANY AND
SUBSIDIARIES
REGULATION G
RECONCILIATION
In thousands
(unaudited)
Hygiene, Health
Three Months Ended
and Consumable
Engineering
Construction
Corporate
H.B. Fuller
June 3, 2023
Adhesives
Adhesives
Adhesives
Total
Unallocated
Consolidated
Net income attributable to
H.B. Fuller
$
52,692
$
45,172
$
7,687
$
105,551
$
(65,150
)
$
40,401
Adjustments:
Acquisition project costs1
-
-
-
-
2,919
2,919
Organizational realignment2
-
-
-
-
5,690
5,690
Project One3
-
-
-
-
2,681
2,681
Other4
-
-
-
-
521
521
Discrete tax items5
-
-
-
-
2,042
2,042
Income tax effect on adjustments6
-
-
-
-
(2,172
)
(2,172
)
Adjusted net income attributable to
H.B. Fuller7
52,692
45,172
7,687
105,551
(53,469
)
52,082
Add:
Interest expense
-
-
-
-
33,131
33,131
Interest income
-
-
-
-
(932
)
(932
)
Adjusted Income taxes
-
-
-
-
19,421
19,421
Depreciation and amortization expense8
12,542
15,987
10,534
39,063
-
39,063
Adjusted EBITDA7
$
65,234
$
61,159
$
18,221
$
144,614
$
(1,849
)
$
142,765
Revenue
$
404,486
$
364,080
$
129,673
$
898,239
-
$
898,239
Adjusted EBITDA Margin7
16.1
%
16.8
%
14.1
%
16.1
%
NMP
15.9
%
Hygiene, Health
Six Months Ended
and Consumable
Engineering
Construction
Corporate
H.B. Fuller
June 3, 2023
Adhesives
Adhesives
Adhesives
Total
Unallocated
Consolidated
Net income attributable to
H.B. Fuller
$
100,399
$
79,522
$
156
$
180,077
$
(117,787
)
$
62,290
Adjustments:
Acquisition project costs1
-
-
-
-
5,154
5,154
Organizational realignment2
-
-
-
-
8,634
8,634
Project One3
-
-
-
-
4,853
4,853
Other4
-
-
-
-
3,594
3,594
Discrete tax items5
-
-
-
-
2,888
2,888
Income tax effect on adjustments6
-
-
-
-
(4,572
)
(4,572
)
Adjusted net income attributable to H.B.
Fuller7
100,399
79,522
156
180,077
(97,236
)
82,841
Add:
Interest expense
-
-
-
-
63,511
63,511
Interest income
-
-
-
-
(1,599
)
(1,599
)
Adjusted Income taxes
-
-
-
-
30,707
30,707
Depreciation and amortization expense8
24,554
31,513
20,909
76,976
-
76,976
Adjusted EBITDA7
$
124,953
$
111,035
$
21,065
$
257,053
$
(4,617
)
$
252,436
Revenue
$
788,014
$
697,147
$
222,260
$
1,707,421
-
$
1,707,421
Adjusted EBITDA Margin7
15.9
%
15.9
%
9.5
%
15.1
%
NMP
14.8
%
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
SEGMENT FINANCIAL
INFORMATION
NET REVENUE GROWTH
(DECLINE)
(unaudited)
Revenue growth versus 2023
Three Months
Ended
Six Months
Ended
June 1, 2024
June 1, 2024
Price
(3.4
)%
(3.4
)%
Volume
3.3
%
1.4
%
Organic Growth13
(0.1
)%
(2.0
)%
M&A
3.9
%
4.4
%
Constant currency
3.8
%
2.4
%
F/X
(1.7
)%
(1.2
)%
Total H.B. Fuller Net Revenue
2.1
%
1.2
%
Revenue growth versus 2023
Three Months Ended
June 1, 2024
Net
Constant
Organic
Revenue
F/X
Currency
M&A
Growth13
Hygiene, Health and Consumable
Adhesives
(2.8
)%
(2.1
)%
(0.7
)%
4.0
%
(4.7
)%
Engineering Adhesives
2.6
%
(1.8
)%
4.4
%
1.9
%
2.5
%
Construction Adhesives
16.0
%
(0.1
)%
16.1
%
8.9
%
7.2
%
Total H.B. Fuller
2.1
%
(1.7
)%
3.8
%
3.9
%
(0.1
)%
Revenue growth versus 2023
Six Months Ended
June 1, 2024
Net
Constant
Organic
Revenue
F/X
Currency
M&A
Growth13
Hygiene, Health and Consumable
Adhesives
(3.5
)%
(1.3
)%
(2.2
)%
4.9
%
(7.1
)%
Engineering Adhesives
0.7
%
(1.4
)%
2.1
%
1.9
%
0.2
%
Construction Adhesives
19.0
%
0.0
%
19.0
%
10.5
%
8.5
%
Total H.B. Fuller
1.2
%
(1.2
)%
2.4
%
4.4
%
(2.0
)%
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
Year
September 2,
2023
December 2,
2023
March 2,
2024
June 1,
2024
Months16 Ended
June 1, 2024
Ended
December 2, 2023
Net income attributable to
H.B. Fuller
$
37,627
$
44,991
$
30,991
$
51,264
$
164,873
$
144,906
Adjustments:
Acquisition project costs1
6,480
4,765
2,043
1,467
14,755
16,874
Organizational realignment2
10,421
10,549
7,262
7,275
35,507
29,900
Project One3
2,734
2,193
3,213
2,845
10,985
9,815
Other4
503
(3,903
)
-
914
(2,486
)
(611
)
Discrete tax items14
6,243
16,955
(2,527
)
1,317
21,988
26,085
Income tax effect on adjustments5
(4,875
)
(1,158
)
(3,290
)
(1,558
)
(10,881
)
(10,604
)
Adjusted net income attributable to H.B.
Fuller7
59,133
74,392
37,692
63,524
234,741
216,365
Add:
Interest expense
35,105
33,297
31,901
32,313
132,616
131,913
Interest income
(1,128
)
(1,217
)
(1,307
)
(1,197
)
(4,849
)
(3,943
)
Adjusted Income taxes
20,862
26,477
13,631
22,658
83,628
78,047
Depreciation and Amortization
expense15
41,826
39,653
41,101
39,952
162,532
158,456
Adjusted EBITDA7
$
155,798
$
172,602
$
123,018
$
157,250
$
608,668
$
580,838
14 Discrete tax items for the three months
ended September 2, 2023 are related to various U.S. and foreign tax
matters offset by an excess 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
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 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
December 2, 2023
June 3, 2023
Total debt
$
2,024,916
$
1,838,431
$
1,882,343
Less: Cash and cash equivalents
114,823
179,453
103,183
Net debt17
$
1,910,093
$
1,658,978
$
1,779,160
Trailing twelve months Adjusted
EBITDA16
$
608,668
580,838
Net Debt-to-Adjusted EBITDA17
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 calculation of both of these non-GAAP
financial measures is 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)
June 1, 2024
June 3, 2023
December 2, 2023
Trade receivables, net
$
571,134
$
586,609
$
577,932
Inventory
496,085
499,275
442,040
Trade payables
474,095
436,376
439,700
Net working capital18
$
593,124
$
649,508
$
580,272
Net revenue three months ended
$
917,107
$
898,239
Annualized net revenue18
3,668,426
3,592,956
Net working capital as a percentage of
annualized revenue18
16.2
%
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 calculation
of each of these non-GAAP financial measures is 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)
June 1,
December 2,
2024
2023
Assets
Current assets:
Cash and cash equivalents
$
114,823
$
179,453
Trade receivables (net of allowances of
$12,523 and $11,080, as of June 1, 2024 and December 2, 2023,
respectively)
571,134
577,932
Inventories
496,085
442,040
Other current assets
109,021
112,678
Total current assets
1,291,063
1,312,103
Property, plant and equipment
1,813,723
1,755,035
Accumulated depreciation
(974,875
)
(930,380
)
Property, plant and equipment,
net
838,848
824,655
Goodwill
1,578,297
1,486,512
Other intangibles, net
813,063
729,140
Other assets
397,839
371,165
Total assets
$
4,919,110
$
4,723,575
Liabilities, non-controlling interest
and total equity
Current liabilities
Notes payable
$
1,396
$
1,841
Trade payables
474,095
439,700
Accrued compensation
78,343
95,680
Income taxes payable
46,883
47,688
Other accrued expenses
83,350
107,902
Total current liabilities
684,067
692,811
Long-term debt
2,023,520
1,836,590
Accrued pension liabilities
50,848
50,189
Other liabilities
368,561
388,072
Total liabilities
$
3,126,996
$
2,967,662
Commitments and contingencies (Note
12)
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 – 54,507,836
and 54,092,987 as of June 1, 2024 and December 2, 2023,
respectively
$
54,508
$
54,093
Additional paid-in capital
310,458
301,485
Retained earnings
1,901,372
1,842,507
Accumulated other comprehensive loss
(474,945
)
(442,880
)
Total H.B. Fuller stockholders' equity
1,791,393
1,755,205
Non-controlling interest
721
708
Total equity
1,792,114
1,755,913
Total liabilities, non-controlling
interest and total equity
$
4,919,110
$
4,723,575
CONSOLIDATED STATEMENTS of
CASH FLOWS
H.B. Fuller Company and
Subsidiaries
(In thousands)
Six Months Ended
June 1, 2024
June 3, 2023
Cash flows from operating
activities:
Net income including non-controlling
interest
$
82,309
$
62,338
Adjustments to reconcile net income
including non-controlling interest to net cash provided by
operating activities:
Depreciation
45,099
39,163
Amortization
39,574
37,813
Deferred income taxes
(24,117
)
(16,831
)
Income from equity method investments, net
of dividends received
(1,644
)
(2,338
)
Debt issuance costs write-off
-
2,689
Loss on fair value adjustment on
contingent consideration liability
-
(220
)
Gain on sale or disposal of assets
(166
)
(42
)
Share-based compensation
11,930
10,953
Pension and other post-retirement benefit
plan activity
(4,370
)
(6,226
)
Change in assets and liabilities, net of
effects of acquisitions:
Trade receivables, net
22,639
66,896
Inventories
(56,512
)
8,285
Other assets
(22,328
)
(36,951
)
Trade payables
38,781
(20,301
)
Accrued compensation
(16,424
)
(42,190
)
Other accrued expenses
(7,002
)
(9,988
)
Income taxes payable
(11,218
)
10,025
Other liabilities
(1,786
)
18,819
Other
34,210
(13,497
)
Net cash provided by operating
activities
128,975
108,397
Cash flows from investing
activities:
Purchased property, plant and
equipment
(90,181
)
(82,578
)
Purchased businesses, net of cash
acquired
(254,287
)
(103,744
)
Proceeds from sale of property, plant and
equipment
694
2,623
Net cash used in investing
activities
(343,774
)
(183,699
)
Cash flows from financing
activities:
Proceeds from issuance of long-term
debt
1,497,000
1,300,000
Repayment of long-term debt
(1,305,500
)
(1,176,650
)
Payment of debt issuance costs
(3,493
)
(10,214
)
Net payment of notes payable
(376
)
(239
)
Dividends paid
(23,295
)
(21,258
)
Proceeds from stock options exercised
18,289
4,193
Repurchases of common stock
(21,809
)
(2,552
)
Net cash provided by financing
activities
160,816
93,280
Effect of exchange rate changes on cash
and cash equivalents
(10,647
)
5,295
Net change in cash and cash
equivalents
(64,630
)
23,273
Cash and cash equivalents at beginning of
period
179,453
79,910
Cash and cash equivalents at end of
period
$
114,823
$
103,183
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240626201453/en/
Steven Brazones Investor Relations Contact 651-236-5060
Grafico Azioni H B Fuller (NYSE:FUL)
Storico
Da Dic 2024 a Gen 2025
Grafico Azioni H B Fuller (NYSE:FUL)
Storico
Da Gen 2024 a Gen 2025
