H.B. Fuller Reports Fourth Quarter and Fiscal Year 2012 Results

January 16, 2013
Fourth Quarter Adjusted Diluted EPS from Continuing Operations $0.641;
Fourth Quarter Diluted EPS from Continuing Operations $0.49;
Company Sets 2013 EPS guidance at $2.55 to $2.65
ST. PAUL, Minn., Jan. 16, 2013 /PRNewswire/ -- H.B. Fuller Company (NYSE: FUL) today reported financial results for the fourth quarter that ended December 1, 2012.

(Logo:  http://photos.prnewswire.com/prnh/20110215/CG49203LOGO)

Fourth Quarter 2012 Highlights Included:

  • Integration of the acquired Forbo adhesives business remained on or ahead of schedule and on track to fully deliver synergy targets;
  • Net revenue was up 28 percent, organic revenue was up 3 percent from last year's fourth quarter, as adjusted to reflect the same number of weeks in each period;
  • Gross profit margin improved 120 basis points compared to the prior quarter;
  • Regional operating income2 increased 36 percent versus last year;
  • Adjusted diluted EPS from continuing operations of $0.641 was up approximately 23 percent on a comparable 13 week basis.

 

Full-Year 2012 Highlights Included:

  • Achieved record levels of net revenue and adjusted diluted earnings per share from continuing operations;
  • Completed acquisition of Industrial Adhesives business from the Forbo Group;
  • Completed divestiture of Central America Paints business to Grupo Mundial;
  • Integration of the acquired Forbo adhesives business remained on schedule and on track to fully deliver synergy targets;
  • Organic revenue increased 6 percent when adjusting for the extra week in the prior year;
  • Regional operating income2 increased 39 percent year-over-year;
  • Adjusted diluted EPS1 from continuing operations grew 28 percent year-over-year.

 

Note that the 2011 fiscal year had 53 weeks of commercial activity, with the extra week in the fourth quarter of 2011, while the 2012 fiscal year was the normal 52 weeks in length.

 

Fourth Quarter 2012 Results:
Net income from continuing operations for the fourth quarter of 2012 was $25.0 million, or $0.49 per diluted share, versus net income from continuing operations of $22.2 million, or $0.45 per diluted share, in last year's fourth quarter. Adjusted total diluted earnings per share from continuing operations in the fourth quarter of 2012 were $0.641, up 14 percent from the prior year's adjusted result of $0.561 and up 23 percent on a comparable 13 week basis. 

Net revenue for the fourth quarter of 2012 was $513.3 million, up 27.8 percent versus the fourth quarter of 2011. Year-over-year growth was approximately 35 percent when adjusting for the extra week in the prior year.  When excluding the incremental revenue from the acquired Forbo business, net revenue was flat, representing 3 percent organic growth offset by 3 percentage points of unfavorable foreign currency translation. The organic growth was comprised of a 1 percent increase in price and 2 percent growth in volume.

"The results we delivered in the final quarter of this fiscal year are impressive, even when comparing to last year's reported results which included an extra week," said Jim Owens, H.B. Fuller president and chief executive officer. "Our fourth quarter revenue came in right on target and we exceeded our internal expectations for margin expansion as some business integration benefits were realized earlier than anticipated and the raw material cost environment was generally favorable. Our performance trends are good, our integration plans are on schedule and we have strong momentum as we enter the 2013 fiscal year."

Gross profit margin from continuing operations was flat compared to the prior year as the margin dilution from the acquired Forbo business was fully offset by benefits from the business integration activities and other margin enhancement initiatives. Sequentially, gross profit margin increased 120 basis points, due to the positive impact of the business integration and the favorable raw material cost environment. Relative to the prior year, Selling, General and Administrative (SG&A) expense from continuing operations increased by 24 percent to $95.4 million, but was down 50 basis points as a percentage of net revenue to 18.6 percent.

Balance Sheet and Cash Flow:
At the end of the fourth quarter of 2012, the Company had cash totaling $200 million and total debt of $520 million. This compares to third quarter levels of $208 million and $532 million, respectively. Sequentially, net debt was essentially unchanged. Operating cash flow in the fourth quarter was $44 million reflecting solid profitability in the core business  and better inventory management. Operating cash flow for the full-year was $109 million. Capital expenditures were $21.0 million in the fourth quarter and $39.2 million for the full-year.

 

Fiscal Year 2012 Results:
"This has been a transformative year for H.B. Fuller", said Owens. "While working to complete the acquisition of the industrial adhesives business from the Forbo Group and the divestiture of the Central America Paints business, our teams kept the momentum going.  EBITDA margin expansion is one of our key financial metrics and in 2012 we delivered.  In 2012 we increased our EBITDA margin by 90 basis points relative to the reported level of last year – and this was achieved while integrating the Forbo business that generated about 6 percent EBITDA margin in the year before the acquisition. The results of our hard work are evident and plans are set to extend these trends in 2013."

Net income from continuing operations for the 2012 fiscal year was $68.3 million, or $1.34 per diluted share, versus $80.2 million, or $1.61per diluted share, in the 2011 fiscal year. Adjusted total diluted earnings per share from continuing operations in the 2012 fiscal year were $2.201, up 28 percent from the prior year's adjusted result of $1.721.

Net revenue for the 2012 fiscal year was $1,886.2 million, up 30.6 percent versus the 2011 fiscal year. Year-over-year growth was approximately 33 percent  when adjusting for the extra week in the prior year.  When excluding the incremental revenue from the acquired Forbo business, net revenue grew 3 percent, representing 6 percent organic growth offset by 3 percentage points of unfavorable foreign currency translation. The organic growth was comprised of a 5 percent increase in price and 1 percent growth in volume.

 

Business Integration and Special Charges
The Company has implemented a comprehensive business integration program to deliver synergies related to the acquisition of the Forboadhesives business and to improve the performance of the EIMEA operating segment. The table below provides an estimate of the expected one-time costs of executing this multi-year project.  In addition, the table lists, for each cost element, the costs incurred in the current quarter, year-to-date period, and since the project's inception in the fourth quarter of 2011:

 

Expected Costs

 

____________Costs Incurred_____________

Q4 2012           FY 2012         Total To-Date

Cost Elements

($ millions)

 

($ millions)

 

($ millions)

 

($ millions)

Acquisition and transformation

35

 

2

 

18

 

26

Workforce reduction

53

 

5

 

28

 

28

Facility exit

17

 

1

 

1

 

1

Other

10

 

0

 

2

 

2

Total cash costs

115

 

8

 

49

 

57

               

Total non-cash costs

6

 

1

 

3

 

3

 

 

Fiscal 2013 Outlook:
The Company's adjusted earnings guidance for the 2013 fiscal year is a range of $2.55 to $2.65 per diluted share. Adjusted earnings per share exclude all special charges related to the business integration project which is ongoing. 

The Company expects end-market demand to generally reflect the broad economic conditions in the regions where the Company operates. Reported revenue growth is expected to be more than 10 percent while organic revenue growth is expected to be in the low single digits, the difference reflecting the benefit of a full year of the Forbo business which was acquired at the beginning of the second quarter of 2012.  Raw material costs are expected to remain at current levels through the first half of 2013 with some modest inflation possible in the second half of the year. The company anticipates margin expansion in 2013, primarily related to the benefits of the business integration project, driving operating income and EBITDA growth of about 20 percent. The EBITDA margin goal for 2013 is 12.5 percent, up approximately 100 basis points relative to the 2012 fiscal year and on track to achieve the 15 percent margin target for 2015. Capital expenditures will be unusually large in 2013 as a significant portion of the investment for the business integration project is completed. The company's earlier projections of $195 million of aggregate capital expenditures over the three years of the business integration project, or a total of about $250 million of capital expenditures over the fiscal years 2012 through 2015, are confirmed.   

The table below shows each of the elements of the Company's 2013 guidance.  All amounts shown are presented on the basis described above.

   

Expected Full-Year

Earnings per Diluted Share

 

$2.55 to $2.65

Core Tax Rate

 

30%

Capex ( $ millions)

 

$110

EBITDA ($ millions)

 

$260-$265

 

Conference Call:
The Company will host an investor conference call to discuss fourth quarter and fiscal year 2012 results on Thursday, January 17, 2013, at 9:30 a.m. Central U.S. time (10:30 a.m. Eastern U.S. time). The conference call audio and accompanying presentation slides will be available to all interested parties via a simultaneous webcast at www.hbfuller.com under the Investor Relations section. The event is scheduled to last one hour. For those unable to listen live, an audio replay of the event along with the accompanying presentation will be archived on the Company's website.

 

Regulation G:
Note that the 2011 fiscal year had 53 weeks of commercial activity while the 2012 fiscal year was the normal 52 weeks in length. The fourth quarter of 2011 had 14 weeks while the fourth quarter of 2012 was the normal 13 weeks in length. Year-over-year comparisons are provided on an as reported basis or in certain cases presented to reflect the estimated result as if both periods contained the same number of weeks of commercial activity. In addition, adjusted results are reported which exclude the special charges related to the business integration project, the one-time negative impact of the fair value step-up on the inventory acquired with the Forbo business and certain other one-time tax items. Reconciliations of all adjusted results are included in the final pages of this document.

The information presented in this earnings release regarding regional operating income, regional operating margin, adjusted diluted earnings per share, adjusted diluted earnings per share from continuing operations and 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.  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 tables below.

 

About H.B. Fuller Company:
For 125 years, 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. Recognized for unmatched technical support and innovation, H.B. Fuller brings knowledge and expertise to help its customers find precisely the right formulation for the right performance. With fiscal 2012 net revenue of $1.9 billion, H.B. Fuller serves customers in packaging, hygiene, general assembly, paper converting, woodworking, construction, automotive and consumer businesses. For more information, visit us at www.hbfuller.com and subscribe to our blog.

 

Safe Harbor for Forward-Looking Statements:
Certain statements in this document 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 Company's ability to effectively integrate and operate acquired businesses; 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-Q filings of October 5, 2012, July 6, 2012 and March 30, 2012, and 10-K filing for the fiscal year ended December 3, 2011. 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, management's best estimates 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

 

14 Weeks Ended

 

Percent of

 

December 1, 2012

 

Net Revenue

 

December 3, 2011

 

Net Revenue

Net revenue

$

513,255

 

100.0%

 

$

401,545

 

100.0%

Cost of sales

 

(369,541)

 

(72.0%)

   

(289,284)

 

(72.0%)

Gross profit

 

143,714

 

28.0%

   

112,261

 

28.0%

                   

Selling, general and administrative expenses

 

(95,395)

 

(18.6%)

   

(76,680)

 

(19.1%)

Special charges, net

 

(9,204)

 

(1.8%)

   

(7,499)

 

(1.9%)

Asset impairment charges

 

(846)

 

(0.2%)

   

-

 

0.0%

Other income (expense), net

 

759

 

0.1%

   

2,170

 

0.5%

Interest expense

 

(5,476)

 

(1.1%)

   

(2,895)

 

(0.7%)

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

 

33,552

 

6.5%

   

27,357

 

6.8%

                   

Income taxes

 

(11,191)

 

(2.2%)

   

(7,753)

 

(1.9%)

                   

Income from equity method investments

 

2,651

 

0.5%

   

2,575

 

0.6%

Income from continuing operations

 

25,012

 

4.9%

   

22,179

 

5.5%

                   

Income from discontinued operations, net of tax

 

182

 

0.0%

   

4,418

 

1.1%

Net income including non-controlling interests

 

25,194

 

4.9%

   

26,597

 

6.6%

                   

Net income attributable to non-controlling interests

 

(82)

 

(0.0%)

   

(188)

 

(0.0%)

Net income attributable to H.B. Fuller

$

25,112

 

4.9%

 

$

26,409

 

6.6%

                   

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

                 

   Income from continuing operations

 

0.50

       

0.45

   

   Income from discontinued operations

 

-

       

0.09

   
 

$

0.51

     

$

0.54

   
                   

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

                 

   Income from continuing operations

 

0.49

       

0.45

   

   Income from discontinued operations

 

-

       

0.09

   
 

$

0.49

     

$

0.53

   
                   

Weighted-average common shares outstanding:

                 

Basic

 

49,640

       

48,937

   

Diluted

 

50,798

       

49,821

   
                   

Dividends declared per common share

$

0.085

     

$

0.075

   
                   

a Income per share amounts may not add due to rounding

         
 

 

 

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

                 
 

December 1, 2012

 

December 3, 2011

 

November 27, 2010

Cash & cash equivalents

$

200,436

 

$

154,649

 

$

131,777

Trade accounts receivable, net

 

320,152

   

217,424

   

196,965

Inventories

 

208,531

   

116,443

   

104,004

Trade payables

 

163,062

   

104,418

   

93,881

Total assets

 

1,786,320

   

1,227,709

   

1,153,457

Total debt

 

520,225

   

232,296

   

250,721

 

 

 

H.B. FULLER COMPANY AND SUBSIDIARIES

CONSOLIDATED FINANCIAL INFORMATION

In thousands, except per share amounts (unaudited)

                   
 

52 Weeks Ended

 

Percent of

 

53 Weeks Ended

 

Percent of

 

December 1, 2012

 

Net Revenue

 

December 3, 2011

 

Net Revenue

Net revenue

$

1,886,239

 

100.0%

 

$

1,444,085

 

100.0%

Cost of sales

 

(1,368,963)

 

(72.6%)

   

(1,040,253)

 

(72.0%)

Gross profit

 

517,276

 

27.4%

   

403,832

 

28.0%

                   

Selling, general and administrative expenses

 

(354,735)

 

(18.8%)

   

(286,871)

 

(19.9%)

Special charges

 

(52,467)

 

(2.8%)

   

(7,499)

 

(0.5%)

Asset impairment charges

 

(1,517)

 

(0.1%)

   

(332)

 

(0.0%)

Other income (expense), net

 

784

 

0.0%

   

4,101

 

0.3%

Interest expense

 

(19,793)

 

(1.0%)

   

(10,811)

 

(0.7%)

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

 

89,548

 

4.7%

   

102,420

 

7.1%

                   

Income taxes

 

(30,479)

 

(1.6%)

   

(31,211)

 

(2.2%)

                   

Income from equity method investments

 

9,218

 

0.5%

   

9,006

 

0.6%

Income from continuing operations

 

68,287

 

3.6%

   

80,215

 

5.6%

                   

Income from discontinued operationsa

 

57,568

 

3.1%

   

8,832

 

0.6%

Net income including non-controlling interests

 

125,855

 

6.7%

   

89,047

 

6.2%

                   

Net (income) loss attributable to non-controlling interests

 

(233)

 

(0.0%)

   

58

 

0.0%

Net income attributable to H.B. Fuller

$

125,622

 

6.7%

 

$

89,105

 

6.2%

                   

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

                 

   Income from continuing operations

 

1.37

       

1.64

   

   Income from discontinued operations

 

1.16

       

0.18

   
 

$

2.53

     

$

1.82

   
                   

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

                 

   Income from continuing operations

 

1.34

       

1.61

   

   Income from discontinued operations

 

1.14

       

0.18

   
 

$

2.48

     

$

1.79

   
                   

Weighted-average common shares outstanding:

                 

Basic

 

49,571

       

48,991

   

Diluted

 

50,618

       

49,866

   
                   

Dividends declared per common share

$

0.330

     

$

0.295

   
                   

a Fiscal 2012 includes the gain on sale of discontinued operations of $51,060, net of tax of $15,119

   
 

 

 

H.B. FULLER COMPANY AND SUBSIDIARIES

REGION FINANCIAL INFORMATION

In thousands (unaudited)

           
           
 

13 Weeks Ended

 

14 Weeks Ended

 

December 1, 2012

 

December 3, 2011

Net Revenue:

         

North America

$

218,586

 

$

169,660

EIMEA

 

190,336

   

134,130

Latin America

 

41,910

   

42,958

Asia Pacific

 

62,423

   

54,797

Total H.B. Fuller  

$

513,255

 

$

401,545

           

Regional Operating Income:2 

         

North America

$

29,476

 

$

20,672

EIMEA

 

12,181

   

9,162

Latin America

 

3,792

   

3,151

Asia Pacific

 

2,870

   

2,596

Total H.B. Fuller  

$

48,319

 

$

35,581

           

Depreciation Expense:

         

North America

$

4,492

 

$

3,742

EIMEA

 

3,850

   

2,594

Latin America

 

499

   

465

Asia Pacific

 

1,228

   

1,094

Total H.B. Fuller  

$

10,069

 

$

7,895

           

Amortization Expense:

         

North America

$

3,156

 

$

2,021

EIMEA

 

1,799

   

313

Latin America

 

64

   

4

Asia Pacific

 

471

   

269

Total H.B. Fuller  

$

5,490

 

$

2,607

           

EBITDA:3 

         

North America

$

37,124

 

$

26,435

EIMEA

 

17,830

   

12,069

Latin America

 

4,355

   

3,620

Asia Pacific

 

4,569

   

3,959

Total H.B. Fuller  

$

63,878

 

$

46,083

           

Regional Operating Margin:4 

         

North America

 

13.5%

   

12.2%

EIMEA

 

6.4%

   

6.8%

Latin America

 

9.0%

   

7.3%

Asia Pacific

 

4.6%

   

4.7%

Total H.B. Fuller  

 

9.4%

   

8.9%

           

EBITDA Margin:3 

         

North America

 

17.0%

   

15.6%

EIMEA

 

9.4%

   

9.0%

Latin America

 

10.4%

   

8.4%

Asia Pacific

 

7.3%

   

7.2%

Total H.B. Fuller  

 

12.4%

   

11.5%

           

Net Revenue Growth:

         

North America

 

28.8%

     

EIMEA

 

41.9%

     

Latin America

 

(2.4%)

     

Asia Pacific

 

13.9%

     

Total H.B. Fuller  

 

27.8%

     
 

 

 

H.B. FULLER COMPANY AND SUBSIDIARIES

REGION FINANCIAL INFORMATION

In thousands (unaudited)

           
           
 

52 Weeks Ended

 

53 Weeks Ended

 

December 1, 2012

 

December 3, 2011

Net Revenue:

         

North America

$

830,061

 

$

624,494

EIMEA

 

672,423

   

473,763

Latin America

 

155,634

   

147,140

Asia Pacific

 

228,121

   

198,688

Total H.B. Fuller  

$

1,886,239

 

$

1,444,085

           

Regional Operating Income:2 

         

North America

$

107,484

 

$

76,500

EIMEA

 

34,483

   

24,590

Latin America

 

13,218

   

8,002

Asia Pacific

 

7,356

   

7,869

Total H.B. Fuller  

$

162,541

 

$

116,961

           

Depreciation Expense:

         

North America

$

16,659

 

$

13,467

EIMEA

 

12,746

   

9,744

Latin America

 

1,819

   

1,686

Asia Pacific

 

4,563

   

3,991

Total H.B. Fuller  

$

35,787

 

$

28,888

           

Amortization Expense:

         

North America

$

11,177

 

$

8,052

EIMEA

 

5,653

   

1,004

Latin America

 

198

   

17

Asia Pacific

 

1,675

   

1,089

Total H.B. Fuller  

$

18,703

 

$

10,162

           

EBITDA:3 

         

North America

$

135,320

 

$

98,019

EIMEA

 

52,882

   

35,338

Latin America

 

15,235

   

9,705

Asia Pacific

 

13,594

   

12,949

Total H.B. Fuller  

$

217,031

 

$

156,011

           

Regional Operating Margin:4 

         

North America

 

12.9%

   

12.2%

EIMEA

 

5.1%

   

5.2%

Latin America

 

8.5%

   

5.4%

Asia Pacific

 

3.2%

   

4.0%

Total H.B. Fuller  

 

8.6%

   

8.1%

           

EBITDA Margin:3 

         

North America

 

16.3%

   

15.7%

EIMEA

 

7.9%

   

7.5%

Latin America

 

9.8%

   

6.6%

Asia Pacific

 

6.0%

   

6.5%

Total H.B. Fuller  

 

11.5%

   

10.8%

           

Net Revenue Growth:

         

North America

 

32.9%

     

EIMEA

 

41.9%

     

Latin America

 

5.8%

     

Asia Pacific

 

14.8%

     

Total H.B. Fuller  

 

30.6%

     
           

* Numbers are not adjusted to remove the one-time negative impact of the fair value step-up on the inventory acquired with the Forbo business of $3.3 million

 

 

 

H.B. FULLER COMPANY AND SUBSIDIARIES

REGION FINANCIAL INFORMATION

NET REVENUE GROWTH

(unaudited)

                   

13 Weeks Ended December 1, 2012

                   
 

North America

 

EIMEA

 

Latin America

 

Asia Pacific

 

Total HBF

Price

1.6%

 

1.0%

 

0.5%

 

(0.7%)

 

1.0%

Volume

1.8%

 

2.4%

 

2.3%

 

0.6%

 

1.9%

  Organic Growth

3.4%

 

3.4%

 

2.8%

 

(0.1%)

 

2.9%

                   

F/X

0.1%

 

(8.7%)

 

0.0%

 

0.4%

 

(2.8%)

Acquisition

32.4%

 

54.3%

 

1.9%

 

20.7%

 

34.8%

Extra Week (2011)

(7.1%)

 

(7.1%)

 

(7.1%)

 

(7.1%)

 

(7.1%)

 

28.8%

 

41.9%

 

(2.4%)

 

13.9%

 

27.8%

                   
                   
                   
                   

52 Weeks Ended December 1, 2012

                   
 

North America

 

EIMEA

 

Latin America

 

Asia Pacific

 

Total HBF

Price

6.4%

 

4.1%

 

4.3%

 

1.9%

 

4.8%

Volume

0.5%

 

3.3%

 

1.9%

 

(1.2%)

 

1.4%

  Organic Growth

6.9%

 

7.4%

 

6.2%

 

0.7%

 

6.2%

                   

F/X

(0.1%)

 

(8.7%)

 

0.0%

 

0.3%

 

(2.9%)

Acquisition

28.0%

 

45.2%

 

1.7%

 

15.8%

 

29.3%

Extra Week (2011)

(1.9%)

 

(2.0%)

 

(2.1%)

 

(2.0%)

 

(2.0%)

 

32.9%

 

41.9%

 

5.8%

 

14.8%

 

30.6%

 

 

 

H.B. FULLER COMPANY AND SUBSIDIARIES

REGULATION G RECONCILIATION

In thousands (unaudited)

           
           
 

13 Weeks Ended

 

14 Weeks Ended

 

December 1, 2012

 

December 3, 2011

Net income including non-controlling interests

$

25,194

 

$

26,597

           

Income from discontinued operations

 

(182)

   

(4,418)

Income from equity method investments

 

(2,651)

   

(2,575)

Income taxes

 

11,191

   

7,753

Interest expense

 

5,476

   

2,895

Other income (expense), net

 

(759)

   

(2,170)

Asset impairment charges

 

846

   

-

Special charges

 

9,204

   

7,499

           

Regional Operating Income2 

 

48,319

   

35,581

           

Depreciation expense

 

10,069

   

7,895

Amortization expense

 

5,490

   

2,607

           

EBITDA3 

$

63,878

 

$

46,083

           
           
           
           
 

52 Weeks Ended

 

53 Weeks Ended

 

December 1, 2012

 

December 3, 2011

Net income including non-controlling interests

$

125,855

 

$

89,047

           

Income from discontinued operations

 

(57,568)

   

(8,832)

Income from equity method investments

 

(9,218)

   

(9,006)

Income taxes

 

30,479

   

31,211

Interest expense

 

19,793

   

10,811

Other income (expense), net

 

(784)

   

(4,101)

Asset impairment charges

 

1,517

   

332

Special charges

 

52,467

   

7,499

           

Regional Operating Income2 

 

162,541

   

116,961

           

Depreciation expense

 

35,787

   

28,888

Amortization expense

 

18,703

   

10,162

           

EBITDA3 

$

217,031

 

$

156,011

           

* Numbers are not adjusted to remove the one-time negative impact of the fair value step-up on the inventory acquired with the Forbo business of $3.3 million

 

 

 

H.B. FULLER COMPANY AND SUBSIDIARIES

REGULATION G RECONCILIATION

In thousands (unaudited)

           
           
 

13 Weeks Ended

 

14 Weeks Ended

 

December 1, 2012

 

December 3, 2011

Net revenue

$

513,255

 

$

401,545

Cost of sales

 

(369,541)

   

(289,284)

           

Gross profit

 

143,714

   

112,261

           

Selling, general and administrative expenses

 

(95,395)

   

(76,680)

           

Regional operating income2 

 

48,319

   

35,581

           

Depreciation expense

 

10,069

   

7,895

Amortization expense

 

5,490

   

2,607

           

EBITDA3 

$

63,878

 

$

46,083

           

EBITDA margin3 

 

12.4%

   

11.5%

           
           
           
           
           
 

52 Weeks Ended

 

53 Weeks Ended

 

December 1, 2012

 

December 3, 2011

Net revenue

$

1,886,239

 

$

1,444,085

Cost of sales

 

(1,368,963)

   

(1,040,253)

           

Gross profit

 

517,276

   

403,832

           

Selling, general and administrative expenses

 

(354,735)

   

(286,871)

           

Regional operating income2 

 

162,541

   

116,961

           

Depreciation expense

 

35,787

   

28,888

Amortization expense

 

18,703

   

10,162

           

EBITDA3 

$

217,031

 

$

156,011

           

EBITDA margin3 

 

11.5%

   

10.8%

           

* Numbers are not adjusted to remove the one-time negative impact of the fair value step-up on the inventory acquired with the Forbo business of $3.3 million

 

 

 

H.B. FULLER COMPANY AND SUBSIDIARIES

REGULATION G RECONCILIATION

In thousands, except per share amounts (unaudited)

                 

Adjusted

     

13 Weeks Ended

     

13 Weeks Ended

     

December 1, 2012

 

Adjustments

 

December 1, 2012

Net revenue

   

$

513,255

 

$

-

 

$

 513,255 

Cost of sales

     

(369,541)

   

-

   

 (369,541)

Gross profit

     

143,714

   

-

   

 143,714 

                     

Selling, general and administrative expenses

   

(95,395)

   

-

   

 (95,395)

                     

Acquisition and transformation related costs

 

 (2,217)

               

Workforce reduction costs

 

 (4,529)

               

Facility exit costs

 

 (1,840)

               

Other related costs

 

 (618)

               

Special charges, net

     

(9,204)

   

(9,204)

   

 - 

                     

Asset impairment charges

     

(846)

   

-

   

 (846)

Other income (expense), net

     

759

   

-

   

 759 

Interest expense

     

(5,476)

   

-

   

 (5,476)

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

   

33,552

   

(9,204)

   

 42,756 

                     

Income taxes

     

(11,191)

   

1,701

   

 (12,892)

                     

Income from equity method investments

     

2,651

   

-

   

 2,651 

Net income from continuing operations

     

25,012

   

(7,503)

   

 32,515 

                     

Income from discontinued operations

     

182

   

-

   

 182 

Net income including non-controlling interests

   

25,194

   

(7,503)

   

 32,697 

                     

Net income attributable to non-controlling interests

   

(82)

   

-

   

 (82)

Net income attributable to H.B. Fuller

 

$

25,112

 

$

(7,503)

 

$

 32,615 

                     

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

               

   Income (loss) from continuing operations

     

0.50

   

(0.15)

   

 0.65 

   Income from discontinued operations

     

-

   

-

   

     

$

0.51

 

$

(0.15)

 

$

 0.67 

                     

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

               

   Income (loss) from continuing operations

     

0.49

   

(0.15)

   

 0.64  1 

   Income from discontinued operations

     

-

   

-

   

     

$

0.49

 

$

(0.15)

 

$

 0.64 

                     

Weighted-average common shares outstanding:

                 

Basic

     

49,640

   

49,640

   

 49,640 

Diluted

     

50,798

   

50,798

   

 50,798 

                     

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)

                 
   

52 Weeks Ended

     

Adjusted

52 Weeks Ended

   

December 1, 2012

 

Adjustments

 

December 1, 2012

Net revenue

 

$

1,886,239

 

$

-

 

$

 1,886,239 

Cost of sales

   

(1,368,963)

   

(3,314)

   

 (1,365,649)

Gross profit

   

517,276

   

(3,314)

   

 520,590 

                   

Selling, general and administrative expenses

   

(354,735)

   

-

   

 (354,735)

                   

Acquisition and transformation related costs

 (18,167)

               

Workforce reduction costs

 (28,087)

               

Facility exit costs

 (4,203)

               

Other related costs

 (2,010)

               

Special charges, net

   

(52,467)

   

(52,467)

   

 - 

                   

Asset impairment charges

   

(1,517)

   

-

   

 (1,517)

Other income (expense), net

   

784

   

-

   

 784 

Interest expense

   

(19,793)

   

-

   

 (19,793)

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

 

89,548

   

(55,781)

   

 145,329 

                   

Income taxes

   

(30,479)

   

12,534

   

 (43,013)

                   

Income from equity method investments

   

9,218

   

-

   

 9,218 

Income from continuing operations

   

68,287

   

(43,247)

   

 111,534 

                   

Income from discontinued operations

   

57,568

   

-

   

 57,568 

Net income including non-controlling interests

   

125,855

   

(43,247)

   

 169,102 

                   

Net income attributable to non-controlling interests

 

(233)

   

-

   

 (233)

Net income attributable to H.B. Fuller

 

$

125,622

 

$

(43,247)

 

$

 168,869 

                   

Basic income per common share attributable to H.B. Fuller4, a

               

   Income (loss) from continuing operations

   

1.37

   

(0.87)

   

 2.25 

   Income from discontinued operations

   

1.16

   

-

   

 1.16 

   

$

2.53

 

$

(0.87)

 

$

 3.41 

Diluted income per common share attributable to H.B. Fuller4, a

               

   Income (loss) from continuing operations

   

1.34

   

(0.85)

   

 2.20  1 

   Income from discontinued operations

   

1.14

   

-

   

 1.14 

   

$

2.48

 

$

(0.85)

 

$

 3.34 

Weighted-average common shares outstanding:

               

Basic

   

49,571

   

49,571

   

 49,571 

Diluted

   

50,618

   

50,618

   

 50,618 

                   

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)

                 
             

Adjusted

 

14 Weeks Ended

     

14 Weeks Ended

 

December 3, 2011

 

Adjustments

 

December 3, 2011

Net revenue

$

401,545

 

$

-

 

$

 401,545 

Cost of sales

 

(289,284)

   

-

   

 (289,284)

Gross profit

 

112,261

   

-

   

 112,261 

                 

Selling, general and administrative expenses

 

(76,680)

   

-

   

 (76,680)

Special charges, net

 

(7,499)

   

(7,499)

   

 - 

Other income (expense), net

 

2,170

   

-

   

 2,170 

Interest expense

 

(2,895)

   

-

   

 (2,895)

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

 

27,357

   

(7,499)

   

 34,856 

                 

Income taxes

 

(7,753)

   

1,747

   

 (9,500)

                 

Income from equity method investments

 

2,575

   

-

   

 2,575 

                 

Net income from continuing operations

 

22,179

   

(5,752)

   

 27,931 

                 

Income from discontinued operations

 

4,418

   

-

   

 4,418 

                 

Net income including non-controlling interests

 

26,597

   

(5,752)

   

 32,349 

                 

Net income attributable to non-controlling interests

 

(188)

   

-

   

 (188)

                 

Net income attributable to H.B. Fuller

$

26,409

 

$

(5,752)

 

$

 32,161 

                 
                 

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

               

   Income (loss) from continuing operations

 

0.45

   

(0.12)

   

 0.57 

   income from discontinued operations

 

0.09

   

-

   

 0.09 

 

$

0.54

 

$

(0.12)

 

$

 0.66 

                 

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

               

   Income (loss) from continuing operations

 

0.45

   

(0.12)

   

 0.56  1 

   income from discontinued operations

 

0.09

   

-

   

 0.09 

 

$

0.53

 

$

(0.12)

 

$

 0.65 

                 

Weighted-average common shares outstanding:

               

Basic

 

48,937

   

48,937

   

 48,937 

Diluted

 

49,821

   

49,821

   

 49,821 

                 

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)

                 
               
 

53 Weeks Ended

     

Adjusted

53 Weeks Ended

 

December 3, 2011

 

Adjustments

 

December 3, 2011

Net revenue

$

1,444,085

 

$

-

 

$

 1,444,085 

Cost of sales

 

(1,040,253)

   

-

   

 (1,040,253)

Gross profit

 

403,832

   

-

   

 403,832 

                 

Selling, general and administrative expenses

 

(286,871)

   

-

   

 (286,871)

Special charges

 

(7,499)

   

(7,499)

   

 - 

Asset impairment charges

 

(332)

   

-

   

 (332)

Other income (expense), net

 

4,101

   

-

   

 4,101 

Interest expense

 

(10,811)

   

-

   

 (10,811)

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

 

102,420

   

(7,499)

   

 109,919 

                 

Income taxes

 

(31,211)

   

1,747

   

 (32,958)

                 

Income from equity method investments

 

9,006

   

-

   

 9,006 

Income from continuing operations

 

80,215

   

(5,752)

   

 85,967 

                 

Income from discontinued operations

 

8,832

   

-

   

 8,832 

                 

Net income including non-controlling interests

 

89,047

   

(5,752)

   

 94,799 

                 

Net loss attributable to non-controlling interests

 

58

   

-

   

 58 

                 

Net income attributable to H.B. Fuller

$

89,105

 

$

(5,752)

 

$

 94,857 

                 
                 

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

               

   Income (loss) from continuing operations

 

$ 1.64

   

$ (0.12)

   

$ 1.75

   Income from discontinued operations

 

$ 0.18

   

$ -

   

$ 0.18

 

$

1.82

 

$

(0.12)

 

$

 1.94 

                 

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

               

   Income (loss) from continuing operations

 

$ 1.61

   

$ (0.12)

   

$ 1.72 1 

   Income from discontinued operations

 

$ 0.18

   

$ -

   

$ 0.18

 

$

1.79

 

$

(0.12)

 

$

 1.90 

                 

Weighted-average common shares outstanding:

               

Basic

 

48,991

   

48,991

   

 48,991 

Diluted

 

49,866

   

49,866

   

 49,866 

                 

a  Income per share amounts may not add due to rounding

 

 

 

 

 


 

1  Adjusted diluted earnings per share (EPS) from continuing operations is a non-GAAP financial measure. First, second, third and fourth quarters of 2012 exclude special charges associated with two previously announced events: the EIMEA business transformation project and the expenses associated with the Forbo acquisition integration project, which have been combined and are now referred to as the "business integration". Special charges, net amounted to $6.5 million, $32.1 million, $4.7 million and $9.2 million on a pre-tax basis ($0.14, $0.47, $0.08 and $0.15 per diluted share) in the first, second, third and fourth quarters, respectively. During the fourth quarter of 2011, these costs amounted to $7.5 million on a pre-tax basis ($0.12 per diluted share in Q4 2011 and $0.11 per diluted for the full year 2011). During the second quarter of 2012, the Company recorded a one-time negative impact of the fair value step-up on the inventory acquired with the Forbobusiness on the gross profit margin line of the income statement. On a pre-tax basis, this "step-up" amounted to $3.3 million dollars ($0.05per diluted share). Lastly, during the third quarter of 2012, various discrete items impacted the quarter's results. These tax items had a positive impact on net income of $1.7 million dollars ($0.03 per diluted share). A reconciliation to reported earnings per diluted share is provided in the tables above.

2 Regional operating income is defined as gross profit less SG&A expense.  Items that are reported on the special charges line of the income statement are excluded from the regional operating income calculation. In Q4 2011, special charges, net totaled $7.5 million. In Q1, Q2, Q3 and Q4  2012, special charges, net totaled $6.5 million, $32.1 million, $4.7 million and $9.2 million, respectively.

3   EBITDA is a non-GAAP financial measure defined on a consolidated basis as gross profit, less SG&A expense, plus depreciation expense, plus amortization expense. On a regional basis it is defined as operating income, plus depreciation expense, plus amortization expense. EBITDA margin is defined as EBITDA divided by net revenue.

4   Regional operating margin is a non-GAAP financial measure defined as gross profit, less SG&A expense, divided by net revenue.

 

Maximillian Marcy
Investor Relations Contact
651-236-5062

SOURCE H.B. Fuller Company