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H.B. Fuller Reports Third Quarter 2021 Results

September, 22, 2021

Net revenue up 20% and organic revenue up 16% driven by strong volume growth and pricing
Net income of $32 million and EPS of $0.58; adjusted EPS of $0.79
Adjusted EBITDA of $111 million, up 5% year-on-year despite significant raw materials headwinds

H.B. Fuller Company (NYSE: FUL) today reported financial results for its third quarter ended August 28, 2021.

Items of Note

  • Net revenue increased 20% versus the third quarter of last year. Organic revenue increased 16%, with 10% from volume growth and 6% from pricing.
  • Organic revenue was up 13% when compared with the non-COVID-impacted third quarter of 2019.
  • Net income increased to $32 million; volume leverage, pricing and operating expense efficiencies offset higher raw material costs and drove a 5% year-over-year increase in adjusted EBITDA to $111 million, ahead of our expectations.
  • Earnings per diluted share (EPS) were $0.58; adjusted EPS of $0.79 increased 4% year over year.
  • Strategic supply chain management enabled the company to secure raw materials to meet increasing demand, and pricing actions have been implemented that are expected to restore margins in the fourth quarter and into 2022.
  • Year-to-date debt paydown of $110 million keeps the company on track to its $200 million debt reduction target for the full year.

Summary of Third Quarter 2021 Results

Net revenue of $827 million increased 20% compared with the third quarter of 2020. Foreign currency exchange rates favorably impacted revenue by 3%. Organic revenue, which excludes impacts from foreign currency translation, increased 16% versus last year, with double-digit organic growth in all three Global Business Units (GBUs). Organic revenue also significantly increased by 13% when compared with the non-COVID impacted third quarter of 2019, with strong organic growth in all three GBUs.

Gross profit was $194 million. Adjusted gross profit of $196 million increased 4% versus the same period last year. Adjusted gross profit margin declined year over year, as expected, as higher sales volume and pricing gains were offset by elevated raw material and freight costs. Selling, General and Administrative (SG&A) expense was $135 million. Adjusted SG&A expense of $129 million improved by 220 basis points as a percent of revenue versus the third quarter last year, resulting from strong volume leverage and general expense controls.

As a result of these factors, net income attributable to H.B. Fuller in the quarter was $32 million, or $0.58 per diluted share. Adjusted net income attributable to H.B. Fuller of $43 million and adjusted EPS of $0.79 increased by 7% and 4%, respectively, compared with $40 million and $0.76 in the same period last year. Adjusted EBITDA of $111 million increased 5% compared with $106 million in the prior year.

“H.B. Fuller delivered another strong quarter with double-digit organic revenue growth as we gained share in key market segments through innovative solutions, improved pricing and took decisive actions to secure raw materials and meet customer demand,” said Jim Owens, H.B. Fuller’s president and chief executive officer. “Throughout the quarter, we took strategic steps to serve customers in the face of ongoing raw material and packaging shortages as well as increasing inflationary pressures on logistics, freight, and labor. We have implemented $225 million of annualized pricing adjustments this year and recently announced additional price increases and a surcharge on global shipments effective September 1, 2021. We anticipate a significant improvement in margins in the fourth quarter as a result of these actions. As our business continues to demonstrate resilience, we are increasingly confident in our ability to create and deliver significant value for shareholders in any market environment. The actions that we have taken over the last nine months in support of our customers enables us to exit the year with strong margin momentum.”

Other Financial Metrics

At the end of the third quarter of fiscal 2021, the company had cash and equivalents of $68 million and total debt equal to $1,664 million. This compares to cash and debt levels equal to $75 million and $1,869 million, respectively, at the end of the third quarter of 2020. Capital expenditures for the nine-month period were $77 million compared with $72 million in the same period last year.

Planning Assumptions

  • Based on current assumptions, we have increased our estimated full-year revenue guidance. Full-year revenue growth is now anticipated to be 17% to 18% compared with fiscal 2020, resulting in anticipated fourth quarter revenue growth of 15% to 17% versus the fourth quarter of 2020.
  • For the fiscal year 2021, adjusted EBITDA is anticipated to be approximately $460 million to $470 million, an increase of 13% to 16% versus 2020, which is supported by on-going recovery in global industrial production, pricing actions balancing higher input costs, and benefits from the company’s operational improvement projects.

Conference Call

The company will hold a conference call on September 23, 2021, at 9:30 a.m. CDT (10:30 a.m. EDT) 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 should access the webcast 10 minutes prior to the start of the call to install and test any necessary audio software. A telephone replay of the conference call will be available from 12:30 p.m. CDT on September 23, 2021 through October 1, 2021. To access the telephone replay dial (800) 585-8367 or (416) 621-4642 and enter Conference ID: 1786575.

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 and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) 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 2021 Planning Assumptions, which the company cannot reconcile to forward-looking GAAP results without unreasonable effort.

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 2020 net revenue of $2.8 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 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 consequences of the COVID-19 outbreak and other pandemics on our operations and financial results; 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, 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 the current dividend policy; 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; availability and price of raw materials; 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. Many of the foregoing risks and uncertainties are, and will be, exacerbated by COVID-19 and resulting deterioration of the global business and economic environment.

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

 

 

Aug. 28, 2021

 

Net Revenue

 

Aug. 29, 2020

 

Net Revenue

Net revenue

 

$

826,830

 

 

 

100.0

%

 

$

691,463

 

 

 

100.0

%

Cost of sales

 

 

(632,880

)

 

 

(76.5

)%

 

 

(503,619

)

 

 

(72.8

)%

Gross profit

 

 

193,950

 

 

 

23.5

%

 

 

187,844

 

 

 

27.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

 

(134,497

)

 

 

(16.3

)%

 

 

(129,113

)

 

 

(18.7

)%

Other income, net

 

 

6,150

 

 

 

0.7

%

 

 

3,722

 

 

 

0.5

%

Interest expense

 

 

(19,396

)

 

 

(2.3

)%

 

 

(20,196

)

 

 

(2.9

)%

Interest income

 

 

2,520

 

 

 

0.3

%

 

 

2,945

 

 

 

0.4

%

Income before income taxes and income from equity method investments

 

 

48,727

 

 

 

5.9

%

 

 

45,202

 

 

 

6.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income taxes

 

 

(19,095

)

 

 

(2.3

)%

 

 

(5,112

)

 

 

(0.7

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from equity method investments

 

 

1,998

 

 

 

0.2

%

 

 

1,541

 

 

 

0.2

%

Net income including non-controlling interest

 

 

31,630

 

 

 

3.8

%

 

 

41,631

 

 

 

6.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to non-controlling interest

 

 

(14

)

 

 

(0.0

)%

 

 

(24

)

 

 

(0.0

)%

Net income attributable to H.B. Fuller

 

$

31,616

 

 

 

3.8

%

 

$

41,607

 

 

 

6.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

$

0.60

 

 

 

 

 

 

$

0.80

 

 

 

 

 

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

 

$

0.58

 

 

 

 

 

 

$

0.79

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

53,049

 

 

 

 

 

 

 

52,130

 

 

 

 

 

Diluted

 

 

54,646

 

 

 

 

 

 

 

52,591

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends declared per common share

 

$

0.168

 

 

 

 

 

 

$

0.163

 

 

 

 

 

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

 

 

August 28, 2021

 

November 28, 2020

 

August 29, 2020

Cash & cash equivalents

 

$

68,134

 

 

$

100,534

 

 

$

74,922

 

Trade accounts receivable, net

 

 

572,855

 

 

 

514,916

 

 

 

476,099

 

Inventories

 

 

462,635

 

 

 

323,213

 

 

 

354,221

 

Trade payables

 

 

485,796

 

 

 

316,460

 

 

 

272,232

 

Total assets

 

 

4,258,272

 

 

 

4,036,704

 

 

 

3,981,725

 

Total debt

 

 

1,664,007

 

 

 

1,773,910

 

 

 

1,868,926

 

 

 

 

H.B. FULLER COMPANY AND SUBSIDIARIES

CONSOLIDATED FINANCIAL INFORMATION

In thousands, except per share amounts (unaudited)

 

 

 

Nine Months Ended
August 28,
2021

 

Percent of
Net Revenue

 

Nine Months Ended
August 29,
2020

 

Percent of
Net Revenue

Net revenue

 

$

2,380,607

 

 

 

100.0

%

 

$

2,012,629

 

 

 

100.0

%

Cost of sales

 

 

(1,776,744

)

 

 

(74.6

)%

 

 

(1,469,622

)

 

 

(73.0

)%

Gross profit

 

 

603,863

 

 

 

25.4

%

 

 

543,007

 

 

 

27.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

 

(426,921

)

 

 

(17.9

)%

 

 

(398,620

)

 

 

(19.8

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income, net

 

 

25,899

 

 

 

1.1

%

 

 

11,740

 

 

 

0.6

%

Interest expense

 

 

(59,699

)

 

 

(2.5

)%

 

 

(64,597

)

 

 

(3.2

)%

Interest income

 

 

7,709

 

 

 

0.3

%

 

 

8,761

 

 

 

0.4

%

Income before income taxes and income from equity method investments

 

 

150,851

 

 

 

6.3

%

 

 

100,291

 

 

 

5.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income taxes

 

 

(46,362

)

 

 

(1.9

)%

 

 

(22,194

)

 

 

(1.1

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from equity method investments

 

 

6,071

 

 

 

0.3

%

 

 

5,068

 

 

 

0.3

%

Net income including non-controlling interest

 

 

110,560

 

 

 

4.6

%

 

 

83,165

 

 

 

4.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to non-controlling interest

 

 

(51

)

 

 

(0.0

)%

 

 

(50

)

 

 

(0.0

)%

Net income attributable to H.B. Fuller

 

$

110,509

 

 

 

4.6

%

 

$

83,115

 

 

 

4.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

$

2.09

 

 

 

 

 

 

$

1.60

 

 

 

 

 

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

 

$

2.04

 

 

 

 

 

 

$

1.59

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

52,794

 

 

 

 

 

 

 

51,959

 

 

 

 

 

Diluted

 

 

54,093

 

 

 

 

 

 

 

52,400

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends declared per common share

 

$

0.498

 

 

 

 

 

 

$

0.485

 

 

 

 

 

H.B. FULLER COMPANY AND SUBSIDIARIES

REGULATION G RECONCILIATION

In thousands, except per share amounts (unaudited)

 

 

Three Months Ended

 

Nine Months Ended

 

 

August 28,

 

August 29,

 

August 28,

 

August 29,

 

 

2021

 

2020

 

2021

 

2020

Net income attributable to H.B. Fuller

 

$

31,616

 

 

$

41,607

 

 

$

110,509

 

 

$

83,115

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition project costs

 

 

901

 

 

 

(73

)

 

 

2,277

 

 

 

(1,584

)

Organizational realignment1

 

 

3,087

 

 

 

3,308

 

 

 

9,029

 

 

 

8,286

 

Royal restructuring and integration2

 

 

1,016

 

 

 

1,790

 

 

 

3,537

 

 

 

7,379

 

Tax reform

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(35

)

Project One

 

 

2,305

 

 

 

1,602

 

 

 

6,469

 

 

 

4,141

 

Other3

 

 

111

 

 

 

654

 

 

 

(3,701

)

 

 

1,725

 

Discrete tax items4

 

 

5,626

 

 

 

(7,183

)

 

 

5,068

 

 

 

(5,129

)

Income tax effect on adjustments5

 

 

(1,746

)

 

 

(1,755

)

 

 

(4,359

)

 

 

(5,012

)

Adjusted net income attributable to H.B. Fuller6

 

 

42,916

 

 

 

39,950

 

 

 

128,829

 

 

 

92,886

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Add:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

19,412

 

 

 

20,220

 

 

 

59,769

 

 

 

64,650

 

Interest income

 

 

(2,520

)

 

 

(2,945

)

 

 

(7,709

)

 

 

(8,761

)

Income taxes

 

 

15,216

 

 

 

14,050

 

 

 

45,653

 

 

 

32,335

 

Depreciation and Amortization expense7

 

 

35,705

 

 

 

34,432

 

 

 

106,596

 

 

 

102,992

 

Adjusted EBITDA6

 

 

110,729

 

 

 

105,707

 

 

 

333,138

 

 

 

284,102

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted Shares

 

 

54,646

 

 

 

52,591

 

 

 

54,093

 

 

 

52,400

 

Adjusted diluted income per common share attributable to H.B. Fuller6

 

$

0.79

 

 

$

0.76

 

 

$

2.38

 

 

$

1.77

 

Revenue

 

$

826,830

 

 

$

691,463

 

 

$

2,380,607

 

 

$

2,012,629

 

Adjusted EBITDA margin6

 

 

13.4

%

 

 

15.3

%

 

 

14.0

%

 

 

14.1

%

1 Includes costs incurred as a direct result of the organizational realignment program, including compensation for employees supporting the program, consulting expense and operational inefficiencies related to the closure of production facilities and consolidation of business activities.

2 Costs incurred as a direct result of the Royal restructuring and integration program including compensation for employees supporting the program, consulting expense and operational inefficiencies related to the closure of production facilities and consolidation of business activities.

3 Three and nine months ended August 28, 2021 includes one-time, non-cash gains related to a transactional tax legal settlement in Brazil and a legal entity merger.

4 Includes adjustment of $5,626 of discrete tax expense in the quarter ended August 28, 2021 relating to the revaluation of cross-currency swap agreements due to depreciation of the Euro versus U.S. dollar and various foreign tax matters. Includes adjustment of ($7,183) of discrete tax benefit in the quarter ended August 29, 2020 relating to the revaluation of cross-currency swap agreements due to appreciation of the Euro versus U.S. dollar and various foreign tax matters.

5 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.

6 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.

7 Depreciation and amortization expense added back for EBITDA is adjusted for amounts already included in Adjusted net income attributable to H.B. Fuller totaling ($292) and ($413) for the three months ended August 28, 2021 and August 29, 2020, respectively and ($1,026) and ($509) for the nine months ended August 28, 2021 and August 29, 2020, respectively.

H.B. FULLER COMPANY AND SUBSIDIARIES

SEGMENT FINANCIAL INFORMATION

In thousands (unaudited)

 

 

Three Months Ended

 

Nine Months Ended

 

 

August 28,

 

August 29,

 

August 28,

 

August 29,

 

 

2021

 

2020

 

2021

 

2020

Net Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hygiene, Health and Consumable Adhesives

 

$

369,439

 

 

$

320,187

 

 

$

1,069,922

 

 

$

977,373

 

Engineering Adhesives

 

 

342,300

 

 

 

276,083

 

 

 

1,000,337

 

 

 

761,040

 

Construction Adhesives

 

 

115,091

 

 

 

95,193

 

 

 

310,348

 

 

 

274,216

 

Corporate unallocated

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Total H.B. Fuller

 

$

826,830

 

 

$

691,463

 

 

$

2,380,607

 

 

$

2,012,629

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment Operating Income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hygiene, Health and Consumable Adhesives

 

$

29,652

 

 

$

31,883

 

 

$

98,493

 

 

$

89,556

 

Engineering Adhesives

 

 

34,087

 

 

 

29,873

 

 

 

96,580

 

 

 

65,386

 

Construction Adhesives

 

 

3,339

 

 

 

4,284

 

 

 

4,974

 

 

 

9,436

 

Corporate unallocated

 

 

(7,625

)

 

 

(7,309

)

 

 

(23,105

)

 

 

(19,991

)

Total H.B. Fuller

 

$

59,453

 

 

$

58,731

 

 

$

176,942

 

 

$

144,387

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hygiene, Health and Consumable Adhesives

 

$

44,496

 

 

$

43,697

 

 

$

142,671

 

 

$

127,914

 

Engineering Adhesives

 

 

52,001

 

 

 

46,831

 

 

 

150,034

 

 

 

112,918

 

Construction Adhesives

 

 

14,247

 

 

 

14,394

 

 

 

37,785

 

 

 

39,893

 

Corporate unallocated

 

 

(15

)

 

 

785

 

 

 

2,648

 

 

 

3,377

 

Total H.B. Fuller

 

$

110,729

 

 

$

105,707

 

 

$

333,138

 

 

$

284,102

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA Margin6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hygiene, Health and Consumable Adhesives

 

 

12.0

%

 

 

13.6

%

 

 

13.3

%

 

 

13.1

%

Engineering Adhesives

 

 

15.2

%

 

 

17.0

%

 

 

15.0

%

 

 

14.8

%

Construction Adhesives

 

 

12.4

%

 

 

15.1

%

 

 

12.2

%

 

 

14.5

%

Corporate unallocated

 

NMP

 

 

NMP

 

 

NMP

 

 

NMP

 

Total H.B. Fuller

 

 

13.4

%

 

 

15.3

%

 

 

14.0

%

 

 

14.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NMP = non-meaningful percentage

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

H.B. FULLER COMPANY AND SUBSIDIARIES

REGULATION G RECONCILIATION

In thousands, except per share amounts (unaudited)

 

 

Three Months Ended

 

Nine Months Ended

 

 

August 28,

 

August 29,

 

August 28,

 

August 29,

 

 

2021

 

2020

 

2021

 

2020

Income before income taxes and income from equity method investments

 

$

48,727

 

 

$

45,202

 

 

$

150,851

 

 

$

100,291

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition project costs

 

 

901

 

 

 

(73

)

 

 

2,277

 

 

 

(1,584

)

Organizational realignment

 

 

3,087

 

 

 

3,308

 

 

 

9,029

 

 

 

8,286

 

Royal restructuring and integration

 

 

1,016

 

 

 

1,790

 

 

 

3,537

 

 

 

7,379

 

Tax reform

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(35

)

Project One

 

 

2,305

 

 

 

1,602

 

 

 

6,469

 

 

 

4,141

 

Other3

 

 

111

 

 

 

654

 

 

 

(3,701

)

 

 

1,725

 

Adjusted income before income taxes and income from equity method investments8

 

$

56,147

 

 

$

52,483

 

 

$

168,462

 

 

$

120,203

 

8 Adjusted income before income taxes and income from equity investments is a non-GAAP financial measure. Adjusted income before income taxes and income from equity investments is defined as income before income taxes and income from equity investments before the specific adjustments shown above. The table above provides a reconciliation of adjusted income before income taxes and income from equity investments to income before income taxes and income from equity investments, the most directly comparable financial measure determined and reported in accordance with U.S. GAAP.

H.B. FULLER COMPANY AND SUBSIDIARIES

REGULATION G RECONCILIATION

In thousands, except per share amounts (unaudited)

 

 

Three Months Ended

 

Nine Months Ended

 

 

August 28,

 

August 29,

 

August 28,

 

August 29,

 

 

2021

 

2020

 

2021

 

2020

Income Taxes

 

$

(19,095

)

 

$

(5,112

)

 

$

(46,362

)

 

$

(22,194

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition project costs

 

 

(212

)

 

 

18

 

 

 

(495

)

 

 

423

 

Organizational realignment

 

 

(726

)

 

 

(797

)

 

 

(2,204

)

 

 

(2,087

)

Royal restructuring and integration

 

 

(239

)

 

 

(431

)

 

 

(846

)

 

 

(1,877

)

Tax reform

 

 

-

 

 

 

-

 

 

 

-

 

 

 

9

 

Project One

 

 

(542

)

 

 

(386

)

 

 

(1,551

)

 

 

(1,043

)

Other4

 

 

5,598

 

 

 

(7,342

)

 

 

5,805

 

 

 

(5,566

)

Adjusted income taxes9

 

$

(15,216

)

 

$

(14,050

)

 

$

(45,653

)

 

$

(32,335

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted income before income taxes and income from equity method investments

 

$

56,147

 

 

$

52,483

 

 

$

168,462

 

 

$

120,203

 

Adjusted effective income tax rate9

 

 

27.1

%

 

 

26.8

%

 

 

27.1

%

 

 

26.9

%

9 Adjusted income taxes and adjusted effective income tax rate are non-GAAP financial measures. Adjusted income taxes are defined as income taxes before the specific adjustments shown above. Adjusted effective income tax rate is defined as income taxes divided by adjusted income before income taxes and income from equity method investments. The table above provides a reconciliation of adjusted income taxes and adjusted effective income tax rate to income taxes, the most directly comparable financial measure determined and reported in accordance with U.S. GAAP.

H.B. FULLER COMPANY AND SUBSIDIARIES

REGULATION G RECONCILIATION

In thousands (unaudited)

 

 

Three Months Ended

 

Nine Months Ended

 

 

August 28,

 

August 29,

 

August 28,

 

August 29,

 

 

2021

 

2020

 

2021

 

2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net revenue

 

$

826,830

 

 

$

691,463

 

 

$

2,380,607

 

 

$

2,012,629

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

$

193,950

 

 

$

187,844

 

 

$

603,863

 

 

$

543,007

 

Gross profit margin

 

 

23.5

%

 

 

27.2

%

 

 

25.4

%

 

 

27.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition project costs

 

 

1

 

 

 

-

 

 

 

64

 

 

 

-

 

Organizational realignment

 

 

1,472

 

 

 

(204

)

 

 

2,265

 

 

 

(53

)

Royal restructuring and integration

 

 

644

 

 

 

1,132

 

 

 

1,962

 

 

 

2,730

 

Project ONE

 

 

(22

)

 

 

-

 

 

 

(22

)

 

 

-

 

Other

 

 

247

 

 

 

272

 

 

 

1,635

 

 

 

1,263

 

Adjusted gross profit10

 

$

196,292

 

 

$

189,044

 

 

$

609,767

 

 

$

546,947

 

Adjusted gross profit margin10

 

 

23.7

%

 

 

27.3

%

 

 

25.6

%

 

 

27.2

%

10 Adjusted gross profit and adjusted gross profit margin are non-GAAP financial measures. Adjusted gross profit and adjusted gross profit margin is defined as gross profit and gross profit margin excluding the specific adjustments shown above. The table above provides a reconciliation of adjusted gross profit and gross profit margin to gross profit and gross profit margin, the most directly comparable financial measure determined and reported in accordance with U.S. GAAP.

H.B. FULLER COMPANY AND SUBSIDIARIES

REGULATION G RECONCILIATION

In thousands (unaudited)

 

 

Three Months Ended

 

Nine Months Ended

 

 

August 28,

 

August 29,

 

August 28,

 

August 29,

 

 

2021

 

2020

 

2021

 

2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

$

(134,497

)

 

$

(129,113

)

 

$

(426,921

)

 

$

(398,620

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition project costs

 

 

901

 

 

 

(73

)

 

 

2,214

 

 

 

(1,584

)

Organizational realignment

 

 

1,614

 

 

 

3,516

 

 

 

6,819

 

 

 

8,342

 

Royal restructuring and integration

 

 

388

 

 

 

682

 

 

 

1,644

 

 

 

4,725

 

Tax reform

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(35

)

Project ONE

 

 

2,327

 

 

 

1,602

 

 

 

6,491

 

 

 

4,142

 

Other

 

 

55

 

 

 

382

 

 

 

32

 

 

 

462

 

Adjusted selling, general and administrative expenses11

 

$

(129,212

)

 

$

(123,004

)

 

$

(409,721

)

 

$

(382,568

)

11 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

August 28, 2021

 

Adhesives

 

Adhesives

 

Adhesives

 

Total

 

 

Unallocated

 

Consolidated

Net income attributable to H.B. Fuller

 

$

32,924

 

 

$

36,599

 

 

$

5,516

 

 

$

75,039

 

 

$

(43,423

)

 

$

31,616

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition project costs

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

901

 

 

 

901

 

Organizational realignment

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

3,087

 

 

 

3,087

 

Royal Restructuring

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

1,016

 

 

 

1,016

 

Project One

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

2,305

 

 

 

2,305

 

Other3

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

111

 

 

 

111

 

Discrete tax items4

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

5,626

 

 

 

5,626

 

Income tax effect on adjustments5

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(1,746

)

 

 

(1,746

)

Adjusted net income attributable to H.B. Fuller6

 

 

32,924

 

 

 

36,599

 

 

 

5,516

 

 

 

75,039

 

 

 

(32,123

)

 

 

42,916

 

Add:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

19,412

 

 

 

19,412

 

Interest income

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(2,520

)

 

 

(2,520

)

Income taxes

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

15,216

 

 

 

15,216

 

Depreciation and amortization expense

 

 

11,572

 

 

 

15,402

 

 

 

8,731

 

 

 

35,705

 

 

 

-

 

 

 

35,705

 

Adjusted EBITDA6

 

$

44,496

 

 

$

52,001

 

 

$

14,247

 

 

$

110,744

 

 

$

(15

)

 

$

110,729

 

Revenue

 

$

369,439

 

 

$

342,300

 

 

$

115,091

 

 

$

826,830

 

 

 

-

 

 

$

826,830

 

Adjusted EBITDA Margin6

 

 

12.0

%

 

 

15.2

%

 

 

12.4

%

 

 

13.4

%

 

NMP

 

 

 

13.4

%

 

 

Hygiene, Health

 

 

 

 

 

 

 

 

 

 

Nine Months Ended

 

and Consumable

 

Engineering

 

Construction

 

 

 

Corporate

 

H.B. Fuller

August 28, 2021

 

Adhesives

 

Adhesives

 

Adhesives

 

Total

 

Unallocated

 

Consolidated

Net income attributable to H.B. Fuller

 

$

108,291

 

 

$

104,099

 

 

$

11,504

 

 

$

223,894

 

 

$

(113,385

)

 

$

110,509

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition project costs

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

2,277

 

 

 

2,277

 

Organizational realignment

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

9,029

 

 

 

9,029

 

Royal Restructuring

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

3,537

 

 

 

3,537

 

Project One

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

6,469

 

 

 

6,469

 

Other3

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(3,701

)

 

 

(3,701

)

Discrete tax items4

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

5,068

 

 

 

5,068

 

Income tax effect on adjustments5

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(4,359

)

 

 

(4,359

)

Adjusted net income attributable to H.B. Fuller6

 

 

108,291

 

 

 

104,099

 

 

 

11,504

 

 

 

223,894

 

 

 

(95,065

)

 

 

128,829

 

Add:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

59,769

 

 

 

59,769

 

Interest income

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(7,709

)

 

 

(7,709

)

Income taxes

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

45,653

 

 

 

45,653

 

Depreciation and amortization expense

 

 

34,380

 

 

 

45,935

 

 

 

26,281

 

 

 

106,596

 

 

 

-

 

 

 

106,596

 

Adjusted EBITDA6

 

$

142,671

 

 

$

150,034

 

 

$

37,785

 

 

$

330,490

 

 

$

2,648

 

 

$

333,138

 

Revenue

 

 

1,069,922

 

 

 

1,000,337

 

 

 

310,348

 

 

 

2,380,607

 

 

 

-

 

 

 

2,380,607

 

Adjusted EBITDA Margin6

 

 

13.3

%

 

 

15.0

%

 

 

12.2

%

 

 

13.9

%

 

NMP

 

 

 

14.0

%

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

August 29, 2020

 

Adhesives

 

Adhesives

 

Adhesives

 

Total

 

 

Unallocated

 

Consolidated

Net income attributable to H.B. Fuller

 

$

33,688

 

 

$

31,334

 

 

$

5,468

 

 

$

70,490

 

 

$

(28,883

)

 

$

41,607

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition project costs

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(73

)

 

 

(73

)

Organizational realignment

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

3,308

 

 

 

3,308

 

Royal Restructuring

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

1,790

 

 

 

1,790

 

Project One

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

1,602

 

 

 

1,602

 

Other3

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

654

 

 

 

654

 

Discrete tax items4

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(7,183

)

 

 

(7,183

)

Income tax effect on adjustments5

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(1,755

)

 

 

(1,755

)

Adjusted net income attributable to H.B. Fuller6

 

 

33,688

 

 

 

31,334

 

 

 

5,468

 

 

 

70,490

 

 

 

(30,540

)

 

 

39,950

 

Add:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

20,220

 

 

 

20,220

 

Interest income

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(2,945

)

 

 

(2,945

)

Income taxes

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

14,050

 

 

 

14,050

 

Depreciation and amortization expense

 

 

10,009

 

 

 

15,497

 

 

 

8,926

 

 

 

34,432

 

 

 

-

 

 

 

34,432

 

Adjusted EBITDA6

 

$

43,697

 

 

$

46,831

 

 

$

14,394

 

 

$

104,922

 

 

$

785

 

 

$

105,707

 

Revenue

 

$

320,187

 

 

$

276,083

 

 

$

95,193

 

 

$

691,463

 

 

 

-

 

 

$

691,463

 

Adjusted EBITDA Margin6

 

 

13.6

%

 

 

17.0

%

 

 

15.1

%

 

 

15.2

%

 

NMP

 

 

 

15.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended

Hygiene, Health
and Consumable

 

Engineering

 

Construction

 

 

 

 

Corporate

 

H.B. Fuller

August 29, 2020

Adhesives

 

Adhesives

 

Adhesives

 

Total

 

Unallocated

 

Consolidated

Net income attributable to H.B. Fuller

 

$

94,979

 

 

$

69,767

 

 

$

12,987

 

 

$

177,733

 

 

$

(94,618

)

 

$

83,115

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition project costs

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(1,584

)

 

 

(1,584

)

Organizational realignment

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

8,286

 

 

 

8,286

 

Royal Restructuring

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

7,379

 

 

 

7,379

 

Tax reform

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(35

)

 

 

(35

)

Project One

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

4,141

 

 

 

4,141

 

Other3

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

1,725

 

 

 

1,725

 

Discrete tax items4

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(5,129

)

 

 

(5,129

)

Income tax effect on adjustments5

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(5,012

)

 

 

(5,012

)

Adjusted net income attributable to H.B. Fuller6

 

 

94,979

 

 

 

69,767

 

 

 

12,987

 

 

 

177,733

 

 

 

(84,847

)

 

 

92,886

 

Add:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

64,650

 

 

 

64,650

 

Interest income

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(8,761

)

 

 

(8,761

)

Income taxes

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

32,335

 

 

 

32,335

 

Depreciation and amortization expense

 

 

32,935

 

 

 

43,151

 

 

 

26,906

 

 

 

102,992

 

 

 

-

 

 

 

102,992

 

Adjusted EBITDA6

 

$

127,914

 

 

$

112,918

 

 

$

39,893

 

 

$

280,725

 

 

$

3,377

 

 

$

284,102

 

Revenue

 

$

977,373

 

 

$

761,040

 

 

$

274,216

 

 

$

2,012,629

 

 

 

-

 

 

$

2,012,629

 

Adjusted EBITDA Margin5

 

 

13.1

%

 

 

14.8

%

 

 

14.5

%

 

 

13.9

%

 

NMP

 

 

 

14.1

%

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

(unaudited)

 

 

Three Months
Ended

 

Nine Months
Ended

 

 

August 28, 2021

 

August 28, 2021

Price

 

 

6.3

%

 

 

2.6

%

Volume

 

 

10.1

%

 

 

12.7

%

Organic Growth12

 

 

16.4

%

 

 

15.3

%

F/X

 

 

3.2

%

 

 

3.0

%

Total H.B. Fuller Net Revenue Growth

 

 

19.6

%

 

 

18.3

%

Revenue growth versus 2020

 

Three Months Ended

 

Nine Months Ended

 

 

August 28, 2021

 

August 28, 2021

 

 

Net
Revenue

 

 

F/X

 

 

Organic
Growth11

 

 

Net
Revenue

 

 

F/X

 

 

Organic
Growth11

 

Hygiene, Health and Consumable Adhesives

 

 

15.4

%

 

 

2.4

%

 

 

13.0

%

 

 

9.5

%

 

 

1.6

%

 

 

7.9

%

Engineering Adhesives

 

 

24.0

%

 

 

4.8

%

 

 

19.2

%

 

 

31.4

%

 

 

5.3

%

 

 

26.1

%

Construction Adhesives

 

 

20.9

%

 

 

1.4

%

 

 

19.5

%

 

 

13.2

%

 

 

1.6

%

 

 

11.6

%

Total H.B. Fuller

 

 

19.6

%

 

 

3.2

%

 

 

16.4

%

 

 

18.3

%

 

 

3.0

%

 

 

15.3

%

Revenue growth versus 2019

 

Three Months Ended

 

Nine Months Ended

 

 

August 28, 2021

 

August 28, 2021

 

 

Net
Revenue

 

F/X and
M&A

 

Organic
Growth11

 

Net
Revenue

 

F/X and
M&A

 

Organic
Growth11

Hygiene, Health and Consumable Adhesives

 

 

12.5%

 

 

 

(1.2%)

 

 

 

13.7

%

 

 

8.5%

 

 

 

(2.0%)

 

 

 

10.5

%

Engineering Adhesives

 

 

19.4%

 

 

 

3.8%

 

 

 

15.6

%

 

 

17.0%

 

 

 

3.2%

 

 

 

13.8

%

Construction Adhesives

 

 

6.2%

 

 

 

1.2%

 

 

 

5.0

%

 

 

2.4%

 

 

 

1.0%

 

 

 

1.4

%

Total H.B. Fuller

 

 

14.0%

 

 

 

0.9%

 

 

 

13.1

%

 

 

10.3%

 

 

 

(0.2%)

 

 

 

10.5

%

12 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.

 

 

 

CONSOLIDATED BALANCE SHEETS

H.B. FULLER COMPANY AND SUBSIDIARIES

(In thousands, except share and per share amounts)

 

 

August 28,

 

November 28,

 

 

2021

 

2020

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

68,134

 

 

$

100,534

 

Trade receivables (net of allowances of $9,139 and $12,905, as of August 28, 2021 and November 28, 2020, respectively)

 

 

572,855

 

 

 

514,916

 

Inventories

 

 

462,635

 

 

 

323,213

 

Other current assets

 

 

100,834

 

 

 

81,113

 

Total current assets

 

 

1,204,458

 

 

 

1,019,776

 

 

 

 

 

 

 

 

 

 

Property, plant and equipment

 

 

1,476,158

 

 

 

1,428,183

 

Accumulated depreciation

 

 

(800,266

)

 

 

(757,439

)

Property, plant and equipment, net

 

 

675,892

 

 

 

670,744

 

 

 

 

 

 

 

 

 

 

Goodwill

 

 

1,313,824

 

 

 

1,312,003

 

Other intangibles, net

 

 

710,127

 

 

 

755,968

 

Other assets

 

 

353,971

 

 

 

278,213

 

Total assets

 

$

4,258,272

 

 

$

4,036,704

 

 

 

 

 

 

 

 

 

 

Liabilities, non-controlling interest and total equity

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Notes payable

 

$

27,313

 

 

$

16,925

 

Trade payables

 

 

485,796

 

 

 

316,460

 

Accrued compensation

 

 

82,129

 

 

 

83,598

 

Income taxes payable

 

 

32,079

 

 

 

29,173

 

Other accrued expenses

 

 

82,417

 

 

 

83,976

 

Total current liabilities

 

 

709,734

 

 

 

530,132

 

 

 

 

 

 

 

 

 

 

Long-term debt

 

 

1,636,694

 

 

 

1,756,985

 

Accrued pension liabilities

 

 

86,954

 

 

 

88,806

 

Other liabilities

 

 

257,034

 

 

 

278,919

 

Total liabilities

 

 

2,690,416

 

 

 

2,654,842

 

 

 

 

 

 

 

 

 

 

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 – 52,549,798 and 51,906,663, as of August 28, 2021 and November 28, 2020, respectively

 

 

52,550

 

 

 

51,907

 

Additional paid-in capital

 

 

200,180

 

 

 

157,867

 

Retained earnings

 

 

1,558,619

 

 

 

1,474,406

 

Accumulated other comprehensive loss

 

 

(244,060

)

 

 

(302,859

)

Total H.B. Fuller stockholders' equity

 

 

1,567,289

 

 

 

1,381,321

 

Non-controlling interest

 

 

567

 

 

 

541

 

Total equity

 

 

1,567,856

 

 

 

1,381,862

 

Total liabilities, non-controlling interest and total equity

 

$

4,258,272

 

 

$

4,036,704

 

CONSOLIDATED STATEMENTS of CASH FLOWS

H.B. FULLER COMPANY AND SUBSIDIARIES

(In thousands)

 

 

Nine Months Ended

 

 

August 28, 2021

 

August 29, 2020

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net income including non-controlling interest

 

$

110,560

 

 

$

83,165

 

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

 

 

 

 

 

 

 

 

Depreciation

 

 

54,158

 

 

 

50,558

 

Amortization

 

 

53,464

 

 

 

52,943

 

Deferred income taxes

 

 

(1,547

)

 

 

(10,952

)

Income from equity method investments, net of dividends received

 

 

4,363

 

 

 

2,660

 

Gain on sale of assets

 

 

641

 

 

 

118

 

Share-based compensation

 

 

19,400

 

 

 

14,087

 

Pension and other post-retirement benefit plan activity

 

 

(23,192

)

 

 

(5,954)

 

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

 

 

 

 

 

 

 

 

Trade receivables, net

 

 

(61,900

)

 

 

17,307

 

Inventories

 

 

(141,112

)

 

 

(17,195

)

Other assets

 

 

(26,060)

 

 

31,372

 

Trade payables

 

 

176,210

 

 

 

(9,449

)

Accrued compensation

 

 

(1,283

)

 

 

(12,345

)

Other accrued expenses

 

 

(2,292

)

 

 

8,776

 

Income taxes payable

 

 

1,001

 

 

 

330

 

Other liabilities

 

 

(53,498

)

 

 

20,481

Other

 

 

52,221

 

 

 

(32,872

)

Net cash provided by operating activities

 

 

161,134

 

 

 

193,030

 

 

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Purchased property, plant and equipment

 

 

(77,237

)

 

 

(71,939

)

Purchased businesses, net of cash acquired

 

 

(5,445

)

 

 

(9,500

)

Purchase of assets

 

 

-

 

 

 

(5,623

)

Proceeds from sale of property, plant and equipment

 

 

2,751

 

 

 

1,407

 

Cash received from government grant

 

 

5,800

 

 

 

-

 

Cash payments related to government grant

 

 

(1,526

)

 

 

(5,326

)

Net cash used in investing activities

 

 

(75,657

)

 

 

(90,981

)

 

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Repayment of long-term debt

 

 

(118,000

)

 

 

(128,000

)

Net proceeds of notes payable

 

 

9,846

 

 

 

8,422

 

Dividends paid

 

 

(26,045

)

 

 

(24,970

)

Contingent consideration payment

 

 

-

 

 

 

(767

)

Proceeds from stock options exercised

 

 

22,053

 

 

 

6,567

 

Repurchases of common stock

 

 

(2,668

)

 

 

(3,342

)

Net cash used in financing activities

 

 

(114,814

)

 

 

(142,090

)

 

 

 

 

 

 

 

 

 

Effect of exchange rate changes on cash and cash equivalents

 

 

(3,063

)

 

 

2,772

 

Net change in cash and cash equivalents

 

 

(32,400

)

 

 

(37,269

)

Cash and cash equivalents at beginning of period

 

 

100,534

 

 

 

112,191

 

Cash and cash equivalents at end of period

 

$

68,134

 

 

$

74,922

 

 

Barbara Doyle
Investor Relations contact
651-236-5023

Source: H.B. Fuller Company

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