News Releases

H.B. Fuller Reports Fourth Quarter and Fiscal Year 2019 Results
Debt pay down of $268 million in 2019 exceeded $200 million target
Diluted FY19 EPS of $2.52; Adjusted diluted FY19 EPS of $2.96, within company's guidance range
Completed previously announced business realignment to 3 global segments
Announced Fiscal Year 2020 Adjusted Diluted EPS Guidance of $3.15 to $3.35

ST. PAUL, Minn., Jan. 22, 2020 /PRNewswire/ -- H.B. Fuller Company (NYSE: FUL) today reported financial results for the fourth quarter and fiscal year ended Nov. 30, 2019.

(PRNewsfoto/H.B. Fuller Company)

Items of Note for Fourth Quarter 2019

  • Higher full year 2019 operating cash flow of $269 million enabled debt pay down of $268 million, exceeding the company's initial 2019 paydown target of $200 million by 34%, and also exceeding its updated outlook of $260 million, as provided during its Sept. 25, 2019 analyst call;
  • Integration of Royal Adhesives on target with $15 million of incremental cost synergies realized in fiscal 2019;
  • Organic revenue was down 0.9% versus the fourth quarter of 2018, with improved volume trends sequentially versus the third quarter of 2019; 
  • Net income was $32 million or $0.61 of earnings per diluted share (EPS). Adjusted net income was $46 million1, or $0.881 adjusted EPS. Adjusted EPS decreased 2% versus the same period last year, and would have increased approximately 4% excluding unfavorable impacts from foreign currency exchange and the divestiture of the surfactants, thickeners and dispersants business;
  • Completed the previously announced strategic realignment of our business into three new global business units as of Dec. 1, 2019.

Items of Note for 2020 Guidance

  • Adjusted diluted EPS of $3.15 to $3.35; up approximately 10% at the midpoint;
  • Adjusted EBITDA of $440 to $460 million; up approximately 4% at the midpoint;
  • Organic revenue growth of 1 to 2% from new business wins and share gains, even as challenging global macroeconomic conditions are assumed to continue in manufacturing sectors in 2020;
  • Approximately $20 million of cost savings resulting from the company's business realignment drives additional earnings growth;
  • Debt repayment of approximately $200 million, on-track to accelerate the company's 2020 deleveraging and exceed the three-year target by more than 10%.

Summary of Fourth Quarter 2019 Results
Net revenue of $739 million decreased 3.8% compared with the fourth quarter of 2018. Foreign currency exchange rates negatively impacted revenues by 2.1%, and the sale of the surfactants, thickeners and dispersants business negatively impacted revenues by 0.8%. Organic revenue, which excludes impacts from foreign currency and divestitures, was down 0.9% versus last year. Organic revenue growth in Americas Adhesives, Asia Pacific and Engineering Adhesives was offset by organic revenue declines in Construction Adhesives and EIMEA, primarily reflecting general industry and economic slowdowns in these areas.

Gross profit margin was 27.2%. Adjusted gross profit margin of 27.6%4 was down 20 basis points versus last year, driven by lower revenues and temporary higher manufacturing and inventory write off costs at certain former Royal Adhesives factories in the quarter, partially offset by favorable raw material costs. Selling, General and Administrative (SG&A) expense was $149 million. Adjusted SG&A expense of $133 million5 was roughly flat compared with the fourth quarter of 2018.

As a result of these factors, net income attributable to H.B. Fuller for the fourth quarter of 2019 was $32 million, or $0.61 per diluted share. Adjusted net income attributable to H.B. Fuller was $46 million1, or $0.881 of adjusted EPS, versus $47 million1, or $0.901 of adjusted EPS last year. Adjusted EPS decreased 2% versus the same period last year, and would have increased approximately 4% excluding unfavorable impacts from foreign currency exchange and the divestiture of the surfactants, thickeners and dispersants business.

"In the fourth quarter, we continued to gain share in strategic businesses including Engineering Adhesives and Hygiene, and our organic revenue trends improved sequentially compared with the third quarter," said Jim Owens, president and chief executive officer. "For the full year, adjusted EPS was within our guidance range of $2.95 to $3.05 and adjusted earnings and EBITDA improved year-over-year on a constant currency basis. These results were achieved in a weak external environment which impacted organic growth. Our cash flow conversion remained very strong as a result of solid earnings and working capital management and we significantly exceeded our debt paydown target."

Full Year 2019 Summary
Net revenue for fiscal 2019 of $2,897 million decreased 4.7% compared with fiscal 2018. Foreign currency exchange rates negatively impacted full year revenues by 3.3%, and the divestiture negatively impacted revenues by 0.3%. Organic full year revenue decreased by 1.1% year-over-year, due to lower revenues in Construction Adhesives and EIMEA partially offset by growth in Engineering Adhesives, Americas Adhesives and Asia Pacific.

Gross profit margin was 27.9%. Adjusted gross profit margin of 28.1%4 increased 50 basis points versus last year on lower raw material cost, favorable pricing and cost synergies from the integration of Royal Adhesives. Net income attributable to H.B. Fuller for fiscal 2019 was $131 million, or $2.52 per diluted share. Adjusted net income attributable to H.B. Fuller was $154 million1, or $2.961 per diluted share, compared with $1561 million, or $3.001 per diluted share, in fiscal 2018. Adjusted EPS would have increased approximately 6% compared with fiscal 2018 excluding the unfavorable impacts of foreign currency exchange and the divestiture of the surfactants and thickeners business. Adjusted EBITDA was $432 million1, compared with $449 million1 in the prior year period, and would have modestly increased year-over-year excluding unfavorable impacts from foreign currency and the divestiture.

Balance Sheet and Cash Flow
At the end of the fourth quarter of 2019, the Company had cash on hand of $112 million and total debt equal to $1,979 million. This compares to cash and debt levels equal to $151 million and $2,248 million, respectively, at the end of the fourth quarter of 2018. Cash flow from operations for the full year increased to $269 million from $253 million in 2018. Capital expenditures were $62 million in 2019, compared with $68 million in 2018.

Update on Business Realignment
Effective Dec. 1, 2019, H.B. Fuller completed the realignment of its business from five to three operating segments. Aligning our resources around the three new global business units (GBUs) – Engineering Adhesives, Hygiene, Health and Consumable Adhesives, and Construction Adhesives – better positions us to quickly identify trends and utilize our vast adhesives portfolio to deliver new solutions targeted to evolving trends. In addition, the new organizational structure enabled a simplification of our business processes and elimination of more than 150 redundant positions, globally, leading to reduced costs.

"We are entering the new year with a strategically focused and realigned business poised for growth and beginning to see areas of positive trends on the top line," said Owens. "We win with customers by solving their adhesive problems better and faster than competitors. By organizing into global business units, we benefit from reduced complexity, enhanced collaboration, and increased speed to market. Our new global teams and expanded utilization of our shared services model are in place, and our entire organization is focused on capturing new market share at greater profitability in 2020, and in the years ahead."

The company updated the range of its previously disclosed cost savings target from this realignment to $25 to $35 million by 2021, with approximately two thirds of the savings to be realized in 2020. In its Nov. 13, 2019 filing on Form 8-K with the Securities and Exchange Commission, the company announced approximately $9 to $11 million of restructuring costs associated with this initiative to be recognized across the next several fiscal quarters. The company incurred $9 million of restructuring costs in the quarter ended Nov. 30, 2019.            

Financial Guidance
For fiscal year 2020, the company anticipates adjusted EPS of $3.15 to $3.35 and adjusted EBITDA of $440 to $460 million. Full year organic revenue growth is expected to be 1 to 2% compared with 2019, with net revenue growth impacted by an estimated unfavorable impact from foreign currency exchange rates of 0.5% and an unfavorable 0.5% impact from the divestiture of the surfactants business resulting in net revenue growth between 0 and 1%. The company's core tax rate, excluding the impact of discrete items, is expected to be between 26% and 28%. H.B. Fuller expects to invest approximately $85 million in capital items in 2020.

"In 2020, we are focused on executing the growth drivers and cost savings that are enabled by our GBU realignment and the synergies provided by the Royal Adhesives acquisition," Owens said. "Our plan delivers organic growth in a continued challenging global manufacturing environment forecasted for 2020. In addition, we are reducing costs to support 10% earnings growth and increased cash flow. As a result of profit margin and working capital improvements, high cash flow conversion rates and our focused capital management programs, we remain on track to significantly exceed our committed $600 million in debt paydown by the end of 2020."

This guidance excludes estimated pre-tax expenses of $6 to $10 million related to the company's global business realignment and completion of the integration of the Royal business, and pre-tax expenses of $12 to $15 million related to ERP development costs. The company's guidance could be impacted by further rule making relative to U.S. Tax Reform as well as potential tax law changes in other countries where we do business. A complete reconciliation of the non-GAAP financial information contained in our 2020 guidance is not being provided in accordance with the "unreasonable efforts" exception of Item 10(e)(1)(i)(B) of Regulation S-K of the Securities and Exchange Commission.

Conference Call
The Company will host an investor conference call to discuss fourth quarter results on Thursday, Jan. 23, 2020, at 10:30 a.m. EST. The conference call audio and accompanying presentation slides will be available to interested parties via a simultaneous webcast, and may be accessed from the company's website at https://investors.hbfuller.com/calendar. Participants should access the webcast prior to the start of the call to register for the event and install and test any necessary software. The webcast and presentation will be archived on the Company's website. A telephone replay of the conference call will be available approximately 1 hour after the conclusion of the call, through Jan. 30, 2020. To access the telephone replay dial 1-877-344-7529 or 1-412-317-0088 and enter access code 10137645.

Certain amounts presented in this release and the accompanying financial statements and data are preliminary and are subject to change in the company's Annual Report on Form 10-K for the year ended Nov. 30, 2019 when it is filed with the Securities and Exchange Commission.

Regulation G
The information presented in this earnings release regarding segment 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 and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) does not conform to generally accepted accounting principles (GAAP) and should not be construed as an alternative to the reported results determined in accordance with 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 GAAP results in the "Regulation G Reconciliation" tables in this press release with the exception of our forward-looking non-GAAP measures contained in our fiscal 2019 outlook, which the company cannot reconcile to forward-looking GAAP results without unreasonable effort. The footnotes in the text of this press release refer to the footnotes in these tables.

About H.B. Fuller
Since 1887, H.B. Fuller has been a leading global adhesives provider focusing on perfecting adhesives, sealants and other specialty chemical products to improve products and lives. With fiscal 2019 net revenue of $2.9 billion, H.B. Fuller's commitment to innovation brings together people, products and processes that answer and solve some of the world's biggest challenges. Our reliable, responsive service creates lasting, rewarding connections with customers in electronics, disposable hygiene, medical, transportation, aerospace, clean energy, packaging, construction, woodworking, general industries and other consumer businesses. And, our promise to our people connects them with opportunities to innovate and thrive. For more information, visit us at https://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 Private Securities Litigation Reform Act of 1995. These statements are subject to various risks and uncertainties, including but not limited to the following: the Royal Adhesives transaction may involve unexpected costs or liabilities; our business or stock price may suffer as a results of uncertainty surrounding the transaction; the substantial amount of debt we have incurred to finance our acquisition of Royal, our ability to repay or refinance it or 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 restrictions contained in our debt agreements that limit the discretion of management in operating the business or ability to pay dividends; various risks to stockholders of not receiving dividends and risks to our ability to pursue growth opportunities if we continue to pay dividends according to the current dividend policy; we may be unable to achieve expected synergies, cost savings and operating efficiencies from the Royal transaction or the business realignment within the expected time frames or at all; we may be unable to successfully integrate Royal's operations into our own, or such integration may be more difficult, time consuming or costly than expected; the ability to effectively implement Project ONE; political and economic conditions; product demand; competitive products and pricing; costs of and savings from restructuring initiatives; geographic and product mix; availability and price of raw materials; the company's relationships with its major customers and suppliers; changes in tax laws and tariffs; devaluations and other foreign exchange rate fluctuations; the impact of litigation and environmental matters; the effect of new accounting pronouncements and accounting charges and credits; and similar matters. Further information about the various risks and uncertainties can be found in the company's SEC 10-K filing for the fiscal year ended December 1, 2018. All forward-looking information represents management's best judgment as of this date based on information currently available that in the future may prove to have been inaccurate. Additionally, the variety of products sold by the company and the regions where the company does business make it difficult to determine with certainty the increases or decreases in net revenue resulting from changes in the volume of products sold, currency impact, changes in product mix, and selling prices. However, managements' best estimate of these changes as well as changes in other factors have been included.  

H.B. FULLER COMPANY AND SUBSIDIARIES

CONSOLIDATED FINANCIAL INFORMATION

In thousands, except per share amounts (unaudited)












13 Weeks Ended


Percent of


13 Weeks Ended


Percent of


November 30, 2019


Net Revenue


December 1, 2018


Net Revenue

Net revenue

$

739,106


100.0%


$

768,429


100.0%

Cost of sales


(537,889)


(72.8%)



(561,000)


(73.0%)

Gross profit


201,217


27.2%



207,429


27.0%











Selling, general and administrative expenses


(148,521)


(20.1%)



(142,932)


(18.6%)

Other expense, net


8,830


1.2%



2,935


0.4%

Interest expense


(23,933)


(3.2%)



(27,574)


(3.6%)

Interest income


2,987


0.4%



3,005


0.4%

Income (loss) before income taxes and income from equity method investments


40,580


5.5%



42,863


5.6%











Income taxes


(10,506)


(1.4%)



(3,488)


(0.5%)











Income from equity method investments


2,151


0.3%



1,990


0.3%

Net income including non-controlling interests


32,225


4.4%



41,365


5.4%











Net income attributable to non-controlling interests


(11)


(0.0%)



(20)


(0.0%)

Net income attributable to H.B. Fuller

$

32,214


4.4%


$

41,345


5.4%











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

$

0.63




$

0.82



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

$

0.61




$

0.79













Weighted-average common shares outstanding:










Basic


51,089





50,712



Diluted


52,423





52,017













Dividends declared per common share

$

0.160




$

0.155




 

Selected Balance Sheet Information (subject to change prior to filing of the Company's Annual Report on Form 10-K)











November 30, 2019


December 1, 2018


December 2, 2017

Cash & cash equivalents

$

112,191


$

150,793


$

194,398

Trade accounts receivable, net


493,181



495,008



473,700

Inventories


337,267



348,461



372,102

Trade payables


298,869



273,378



268,467

Total assets


3,985,734



4,176,314



4,373,243

Total debt


1,979,116



2,247,527



2,451,910

 

H.B. FULLER COMPANY AND SUBSIDIARIES

CONSOLIDATED FINANCIAL INFORMATION

In thousands, except per share amounts (unaudited)











52 Weeks Ended


Percent of


52 Weeks Ended

Percent of


November 30, 2019


Net Revenue


December 1, 2018

Net Revenue

Net revenue

$

2,897,000


100.0%


$

3,041,002

100.0%

Cost of sales


(2,090,078)


(72.1%)



(2,212,844)

(72.8%)

Gross profit


806,922


27.9%



828,158

27.2%










Selling, general and administrative expenses


(580,928)


(20.1%)



(590,267)

(19.4%)










Other income (expense), net


37,943


1.3%



18,055

0.6%

Interest expense


(103,287)


(3.6%)



(110,994)

(3.6%)

Interest income


12,178


0.4%



11,774

0.4%

Income from continuing operations before income taxes and income from equity method investments


172,828


6.0%



156,726

5.2%










Income taxes


(49,408)


(1.7%)



6,356

0.2%










Income from equity method investments


7,424


0.3%



8,150

0.3%

Net income including non-controlling interests


130,844


4.5%



171,232

5.6%










Net income attributable to non-controlling interests


(27)


(0.0%)



(24)

(0.0%)

Net income attributable to H.B. Fuller

$

130,817


4.5%


$

171,208

5.6%



















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

$

2.57




$

3.38


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

$

2.52




$

3.29











Weighted-average common shares outstanding:









Basic


50,920





50,591


Diluted


51,983





51,975











Dividends declared per common share

$

0.635




$

0.615











a Income per share amounts may not add due to rounding





 

H.B. FULLER COMPANY AND SUBSIDIARIES


REGULATION G RECONCILIATION


In thousands, except per share amounts (unaudited)


















13 Weeks Ended


52 Weeks Ended




November 30,
2019


December 1,
2018


November 30,
2019


December 1,
2018
















Net income attributable to H.B. Fuller


$

32,214


$

41,345


$

130,817


$

171,208
















Adjustments:














Acquisition project costs



45



616



2,204



2,833


Tonsan call option agreement



-



3,555



-



1,496


Organizational realignment



6,535



469



7,647



2,836


Royal restructuring and integration



1,957



5,930



787



20,351


Tax reform



76



(7,138)



132



(43,276)


Project One



937



451



4,115



4,780


Other



4,520



1,336



7,964



(4,266)


Adjusted net income attributable to H.B. Fuller1



46,284



46,564



153,666



155,962
















Add:














Interest expense



23,933



27,468



103,287



110,624


Interest income



(2,987)



(3,005)



(12,178)



(11,774)


Income taxes



10,246



13,580



47,465



49,541


Depreciation and amortization expenseA



34,702



35,964



140,105



144,400


Adjusted EBITDA1



112,178



120,571



432,345



448,753
















Diluted Shares



52,423



52,017



51,983



51,975


Adjusted diluted income per common share attributable to H.B. Fuller1


$

0.88


$

0.90


$

2.96


$

3.00


Revenue


$

739,106


$

768,429


$

2,897,000


$

3,041,002


Adjusted EBITDA margin1



15.2%



15.7%



14.9%



14.8%



1 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 GAAP.

A Depreciation and amortization expense added back for Adjusted EBITDA is adjusted for amounts already included in Adjusted net income attributable to H.B. Fuller totaling $34 and ($1,101) for the three and twelve months ended November 30, 2019, respectively, and $0 and ($726) for the three and twelve months ended December 1, 2018, respectively.


 


H.B. FULLER COMPANY AND SUBSIDIARIES


SEGMENT FINANCIAL INFORMATION


In thousands (unaudited)














13 Weeks Ended


52 Weeks Ended


November 30, 2019


December 1, 2018


November 30, 2019


December 1, 2018

Net Revenue












Americas Adhesives

$

261,366


$

265,434


$

1,022,775


$

1,051,365

EIMEA


164,669



174,790



640,913



697,448

Asia Pacific


71,476



71,172



271,585



278,162

Construction Adhesives


93,294



106,921



394,912



452,046

Engineering Adhesives


148,301



150,112



566,815



561,981

Total H.B. Fuller

$

739,106


$

768,429


$

2,897,000


$

3,041,002













Segment Operating Income












Americas Adhesives

$

21,723


$

26,173


$

92,195


$

98,966

EIMEA


3,802



6,875



22,256



29,589

Asia Pacific


6,514



6,737



22,165



17,742

Construction Adhesives


823



6,008



11,971



30,418

Engineering Adhesives


19,834



18,704



77,407



61,176

Total H.B. Fuller

$

52,696


$

64,497


$

225,994


$

237,891













Adjusted EBITDA1












Americas Adhesives

$

36,834


$

42,263


$

148,492


$

159,907

EIMEA


18,159



18,702



66,020



73,153

Asia Pacific


10,044



9,295



34,435



29,101

Construction Adhesives


12,457



17,980



56,696



78,461

Engineering Adhesives


31,152



32,516



119,255



103,423

Corporate unallocated


3,532



(185)



7,447



4,708

Total H.B. Fuller

$

112,178


$

120,571


$

432,345


$

448,753













Adjusted EBITDA Margin1












Americas Adhesives


14.1%



15.9%



14.5%



15.2%

EIMEA


11.0%



10.7%



10.3%



10.5%

Asia Pacific


14.1%



13.1%



12.7%



10.5%

Construction Adhesives


13.4%



16.8%



14.4%



17.4%

Engineering Adhesives


21.0%



21.7%



21.0%



18.4%

Corporate unallocated


0.5%



(0.0%)



0.3%



0.2%

Total H.B. Fuller


15.2%



15.7%



14.9%



14.8%













 

H.B. FULLER COMPANY AND SUBSIDIARIES


REGULATION G RECONCILIATION


In thousands, except per share amounts (unaudited)



13 Weeks Ended


52 Weeks Ended



November 30,
2019


December 1,
2018


November 30,
2019


December 1,
2018


Income before income taxes and income from equity method investments

$

40,580


$

42,863


$

172,828


$

156,726















Adjustments:













Acquisition project costs


63



848



2,703



3,957


Tonsan call option agreement


-



3,555



-



1,496


Organizational realignment


9,280



544



10,168



2,840


Royal restructuring and integration


2,327



8,094



713



28,566


Tax reform


106



305



180



305


Project One


1,293



601



5,275



6,867


Other


741



1,364



1,867



(3,380)


Adjusted income before income taxes and income from equity method investments2

$

54,390


$

58,174


$

193,734


$

197,377



2 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 GAAP.

 

H.B. FULLER COMPANY AND SUBSIDIARIES


REGULATION G RECONCILIATION


In thousands, except per share amounts (unaudited)



13 Weeks Ended


52 Weeks Ended



November 30,
2019


December 1,
2018


November 30,
2019


December 1,
2018


Income Taxes

$

(10,506)


$

(3,488)


$

(49,408)


$

6,356















Adjustments:













Acquisition project costs


(17)



(232)



(500)



(1,124)


Organizational realignment


(2,746)



(75)



(2,521)



(4)


Royal restructuring and integration


(371)



(2,164)



74



(8,215)


Tax reform


(29)



(7,444)



(49)



(43,582)


Project One


(356)



(150)



(1,159)



(2,087)


Other


3,779



(27)



6.098



(885)


Adjusted income taxes3

$

(10,246)


$

(13,580)


$

(47,465)


$

(49,541)















Adjusted income before income taxes and income from equity method investments

$

54,390


$

58,174


$

193,734


$

197,377


Adjusted effective income tax rate3


18.8%



23.3%



24.5%



25.1%



3 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 adjusted 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 GAAP.

 

H.B. FULLER COMPANY AND SUBSIDIARIES


REGULATION G RECONCILIATION


In thousands (unaudited)
















13 Weeks Ended


52 Weeks Ended



November 30,
2019


December 1,

2018


November 30,
2019


December 1,

2018















Net revenue

$

739,106


$

768,429


$

2,897,000


$

3,041,002















Gross profit

$

201,217


$

207,429


$

806,922


$

828,158


Gross profit margin


27.2%



27.0%



27.9%



27.2%















Adjustments:













Acquisition project costs


-



526



-



2,522


Organizational realignment


506



235



381



1,533


Royal restructuring and integration


2,065



2,810



6,316



5,026


Other


199



2,407



191



2,407


Adjusted gross profit4

$

203,987


$

213,407


$

813,810


$

839,646


Adjusted gross profit margin4


27.6%



27.8%



28.1%



27.6%



4 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 GAAP. 

 

H.B. FULLER COMPANY AND SUBSIDIARIES


REGULATION G RECONCILIATION


In thousands (unaudited)
















13 Weeks Ended


52 Weeks Ended



November 30,
2019


December 1,

2018


November 30,
2019


December 1,

2018















Selling, general and administrative expenses

$

(148,521)


$

(142,932)


$

(580,928)


$

(590,267)















Adjustments:













Acquisition project costs


63



323



2,703



1,437


Tonsan call option agreement


-



3,450



-



1,127


Organizational realignment


8,746



309



13,300



1,307


Royal restructuring and integration


4,551



5,114



15,296



23,370


Tax reform


105



305



180



305


Project ONE


1,293



601



5,275



6,867


Other


363



380



1,497



407


Adjusted selling, general and administrative expenses5

$

(133,400)


$

(132,450)


$

(542,677)


$

(555,447)
















5 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 GAAP. 

 

H.B. FULLER COMPANY AND SUBSIDIARIES

REGULATION G RECONCILIATION

In thousands (unaudited)



























Americas





Asia

Construction

Engineering




Corporate

H.B. Fuller


Adhesives


EIMEA


Pacific

Adhesives

Adhesives


Total

Unallocated

Consolidated

13 Weeks Ended

November 30, 2019

























Net income attributable to H.B. Fuller


$

23,703


$

4,352


$

6,555


$

1,536


$

19,908


$

56,054


$

(23,840)


$

32,214


























Adjustments:

























Acquisition project costs



16



10



25



5



6



62



(17)



45

Organizational realignment



2,866



3,827



852



778



929



9,252



(2,717)



6,535

Royal restructuring and integration



1,242



2,678



390



840



1,465



6,615



(4,658)



1,957

Tax reform



40



26



13



12



15



106



(30)



76

Project One



493



314



159



146



181



1,293



(356)



937

Other



199



363



-



-



-



562



3,958



4,520


























Adjusted net income attributable to H.B. Fuller1



28,559



11,570



7,994



3,317



22,504



73,944



(27,660)



46,284

Add:

























Interest expense



-



-



-



-



-



-



23,933



23,933

Interest income



-



-



-



-



-



-



(2,987)



(2,987)

Income taxes



-



-



-



-



-



-



10,246



10,246

Depreciation and amortization expense



8,275



6,589



2,050



9,140



8,648



34,702



-



34,702

Adjusted EBITDA1

$


36,834


$

18,159


$

10,044


$

12,457


$

31,152


$

108,646


$

3,532


$

112,178












Americas




Asia

Construction

Engineering




Corporate

H.B. Fuller


Adhesives

EIMEA

Pacific

Adhesives

Adhesives


Total

Unallocated

Consolidated

52 Weeks Ended

November 30, 2019

























Net income attributable to H.B. Fuller


$

100,101


$

24,752


$

22,328


$

14,741


$

77,734


$

239,656


$

(108,839)


$

130,817


























Adjustments:

























Acquisition project costs



1,000



649



378



302



375



2,704



(500)



2,204

Organizational realignment



5,942



4,889



1,040



655



1,155



13,681



(6,034)



7,647

Royal restructuring and integration



4,578



6,975



1,679



4,261



4,093



21,586



(20,799)



787

Tax reform



68



44



22



21



25



180



(48)



132

Project One



1,993



1,288



652



598



744



5,275



(1,160)



4,115

Other



1,113



598



-



-



-



1,711



6,253



7,964


























Adjusted net income attributable to H.B. Fuller1



114,795



39,195



26,099



20,578



84,126



284,793



(131,127)



153,666

Add:

























Interest expense



-



-



-



-



-



-



103,287



103,287

Interest income



-



-



-



-



-



-



(12,178)



(12,178)

Income taxes



-



-



-



-



-



-



47,465



47,465

Depreciation and amortization expense



33,697



26,825



8,336



36,118



35,129



140,105



-



140,105

Adjusted EBITDA1

$


148,492


$

66,020


$

34,435


$

56,696


$

119,255


$

424,898


$

7,447


$

432,345



























Note: Adjusted EBITDA is a non-GAAP financial measure. The tables above provide 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.

 

H.B. FULLER COMPANY AND SUBSIDIARIES

REGULATION G RECONCILIATION

In thousands (unaudited)




























Americas





Asia

Construction

Engineering






H.B. Fuller



Adhesives


EIMEA


Pacific

Adhesives

Adhesives


Total

Unallocated

Consolidated


13 Weeks Ended

December 1, 2018


























Net income attributable to H.B. Fuller


$

28,576


$

8,153


$

6,945


$

7,015


$

19,067


$

69,756


$

(28,411)


$

41,345




























Adjustments:


























Acquisition project costs



796



22



10



10



11



849



(233)



616


Tonsan call option agreement



-



-



-



-



3,449



3,449



106



3,555


Organizational realignment



12



361



4



163



4



544



(75)



469


Royal Restructuring



1,688



3,053



391



1,506



1,287



7,925



(1,995)



5,930


Tax reform



120



75



35



36



39



305



(7,443)



(7,138)


Project One



236



148



70



71



76



601



(150)



451


Other



1,796



(8)



(169)



(77)



(179)



1,363



(27)



1,336




























Adjusted net income attributable to H.B. Fuller1



33,224



11,804



7,286



8,724



23,754



84,792



(38,228)



46,564




























Add:


























Interest expense



-



-



-



-



-



-



27,468



27,468


Interest income



-



-



-



-



-



-



(3,005)



(3,005)


Income taxes



-



-



-



-



-



-



13,580



13,580


Depreciation and amortization expense



9,039



6,898



2,009



9,256



8,762



35,964



-



35,964


Adjusted EBITDA1

$


42,263


$

18,702


$

9,295


$

17,980


$

32,516


$

120,756

$

(185)


$

120,571





























Americas





Asia

Construction

Engineering






H.B. Fuller



Adhesives


EIMEA


Pacific

Adhesives

Adhesives


Total

Unallocated

Consolidated


52 Weeks Ended

December 1, 2018

























Net income attributable to H.B. Fuller


$

106,955


$

33,742


$

18,063


$

33,908


$

62,094


$

254,762

$

(83,554)

$

171,208




























Adjustments:


























Acquisition project costs



3,679



94



45



45



95



3,958



(1,125)



2,833


Tonsan call option agreement



-



-



-



-



1,126



1,126



370



1,496


Organizational realignment



200



1,702



8



922



9



2,841



(5)



2,836


Royal Restructuring



9,002



7,597



1,874



5,843



4,081



28,397



(8,046)



20,351


Tax reform



121



75



35



36



39



306



(43,582)



(43,276)


Project One



2,700



1,690



797



809



871



6,867



(2,087)



4,780


Other



1,817



(7)



(168)



(76)



(178)



1,388



(5,654)



(4,266)




























Adjusted net income attributable to H.B. Fuller1



124,474



44,893



20,654



41,487



68,137



299,645



(143,683)



155,962




























Add:


























Interest expense



-



-



-



-



-



-



110,624



110,624


Interest income



-



-



-



-



-



-



(11,774)



(11,774)


Income taxes



-



-



-



-



-



-



49,541



49,541


Depreciation and amortization expense



35,433



28,260



8,447



36,974



35,286



144,400


-



144,400


Adjusted EBITDA1

$


159,907


$

73,153


$

29,101


$

78,461


$

103,423


$

444,045

$

4,708


$

448,753





























Note: Adjusted EBITDA is a non-GAAP financial measure. The tables above provide 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.

 

H.B. FULLER COMPANY AND SUBSIDIARIES

SEGMENT FINANCIAL INFORMATION

NET REVENUE GROWTH (DECLINE)

(unaudited)
















13 Weeks Ended

52 Weeks Ended











November 30,
2019


November 30,
2019












Total


Total










Price


(0.5%)


1.0%










Volume


(0.4%)


(2.1%)










Organic


(0.9%)


(1.1%)










M&A


(0.8%)


(0.3%)










F/X


(2.1%)


(3.3%)










Total H.B. Fuller


(3.8%)


(4.7%)








































13 Weeks Ended



52 Weeks Ended



November 30, 2019



November 30, 2019



Net Revenue


F/X and M&A


Organic
Growth
(Decline)



Net Revenue


F/X and M&A


Organic
Growth
(Decline)















Americas Adhesives


(1.5%)


(4.7%)


3.2%



(2.7%)


(3.8%)


1.1%

EIMEA


(5.8%)


(2.3%)


(3.5%)



(8.1%)


(5.4%)


(2.7%)

Asia Pacific


0.4%


(1.8%)


2.2%



(2.4%)


(3.5%)


1.1%

Construction Adhesives


(12.7%)


(0.4%)


(12.3%)



(12.6%)


(0.6%)


(12.0%)

Engineering Adhesives


(1.2%)


(2.4%)


1.2%



0.9%


(3.3%)


4.2%

Total H.B. Fuller


(3.8%)


(2.9%)


(0.9%)



(4.7%)


(3.6%)


(1.1%)















 

SOURCE H.B. Fuller Company

For further information: Barbara Doyle, Investor Relations, 651-236-5023
Financial Expert
Chairman of the Board
NYSEFUL

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