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H.B. Fuller Reports Second Quarter Fiscal 2022 Results

June, 22, 2022

22% year-over-year organic growth drove record quarterly revenue

Earnings per diluted share (EPS) of $0.86; Adjusted diluted EPS of $1.11 up 18% year over year

Adjusted EBITDA of $139M, up 14% year over year

H.B. Fuller Company (NYSE: FUL) today reported financial results for its second quarter ended May 28, 2022.

Items of Note for Second Quarter 2022

  • Strong operational execution delivered record quarterly revenue of $993 million.
  • Net revenue increased 20% and organic revenue increased 22% versus last year.
  • All three Global Business Units (GBUs) delivered mid-teens percentage or higher organic revenue growth compared with the prior year.
  • Higher volumes, pricing gains and cost efficiencies resulted in net income of $47 million and adjusted EBITDA of $139 million which increased 14% year over year.
  • Earnings per diluted share were $0.86; adjusted EPS of $1.11 increased 18% year over year.

Summary of Second Quarter 2022 Results

Net revenue of $993 million increased 20% compared with the second quarter of 2021. Foreign currency exchange rates unfavorably impacted revenue by 3.9%, and acquisitions favorably impacted revenue by 2%. Total company organic revenue increased 21.9% versus last year with 3.4% from volume growth and 18.5% from pricing. Hygiene, Health and Consumables Adhesives organic revenue increased 24.5% year over year, Engineering Adhesives organic revenue was up 21.8%, and Construction Adhesives organic revenue grew 14.3%.

Gross profit was $254 million. Adjusted gross profit of $255 million increased 16% versus the same period last year. Gross profit margin and adjusted gross profit margin declined year over year, as expected, as elevated raw material and freight costs were offset by sales volume and pricing gains. Selling, General and Administrative (SG&A) expense was $166 million. SG&A and adjusted SG&A improved as a percent of revenue compared with the second quarter last year resulting from strong volume leverage and general expense controls. Adjusted SG&A as a percent of revenue improved by 130 basis points versus last year

As a result of these factors, net income attributable to H.B. Fuller in the quarter was $47 million, or $0.86 per diluted share. Adjusted net income attributable to H.B. Fuller of $61 million and adjusted EPS of $1.11 were up 20% and 18%, respectively, versus the same period last year. Adjusted EBITDA of $139 million increased 14% compared with the prior year.

“H.B. Fuller continues to deliver differentiated performance for our customers and shareholders,” said Jim Owens, H.B. Fuller president and chief executive officer. “In the second quarter, we added to our track record of strong performance by delivering 22% organic revenue growth, a 14% increase in EBITDA and an 18% increase in EPS. Our organic sales have increased by double-digit percentages in each of the last 6 quarters and quarterly EBITDA growth has averaged 15%, even with prolonged supply chain constraints, shortages of materials, and significant economic impacts from COVID shutdowns and a war in Ukraine. With our focus on strategic pricing and delivering innovation to solve the toughest adhesion challenges, we are confident in our full year outlook for fiscal 2022 despite persistent inflationary pressures and expected slowing in some markets. Delivering strong, sustainable shareholder value regardless of the economic environment remains a priority in 2022 and in the years ahead.”

Key Balance Sheet and Cash Flow Items

At the end of the second quarter of fiscal 2022, the company had cash on hand of $68 million and total debt equal to $1,936 million. This compares with cash and debt levels of $64 million and $1,914 million, respectively, in the first fiscal quarter of 2022. Cash flow from operations of $8.5 million in the second quarter improved sequentially from the first quarter, as expected, as working capital as a percentage of annualized revenue improved by 140 basis points to 17.1%. Capital expenditures of $20 million in the second quarter increased from $15 million in the prior year quarter primarily due to timing of projects.

Fiscal 2022 Outlook

  • Raw material and delivery costs are expected to continue to rise as the year progresses primarily driven by industrial demand and supply constraints of U.S. petrochemicals. The company anticipates an increase of more than 20% for the full year versus the fourth quarter 2021 exit rate.
  • H.B. Fuller has implemented annualized price adjustments of approximately $330 million in the first half of 2022, including over $200 million in the second quarter, and is planning additional annualized increases of over $175 million in the third quarter. When combined with annualized price increases of approximately $450 million executed in fiscal 2021, the company’s total pricing actions are anticipated to more than offset raw material and delivery cost increases. The company is prepared to implement further increases as necessary.
  • Adjusted EBITDA is expected to be in the range of $530 to $550 million, an increase of approximately 14% to 18% versus fiscal 2021, with double-digit year-over-year growth in all four quarters.
  • Adjusted EPS is expected to be in the range of $4.10 to $4.35, an increase of between 18% and 25% versus fiscal year 2021.
  • Working capital as a percentage of revenue is expected to continue to improve over the course of the year and to decline below 16% by fiscal 2022 year-end, resulting in more normalized levels of cash flow generation in the second half of the year.

Conference Call

The company will hold a conference call on June 23, 2022, at 9:30 a.m. CT (10:30 a.m. ET) to discuss its results. Interested parties may listen to the conference call on a live webcast. The webcast, along with a supplemental presentation, may be accessed from the company’s website at https://investors.hbfuller.com. Participants must register prior to accessing the webcast using this link and should do so at least 10 minutes prior to the start of the call to install and test any necessary software and audio connections. A telephone replay of the conference call will be available from 12:30 p.m. CT on June 23, 2022 through 10:59 p.m. CT on June 30, 2022. To access the telephone replay dial 1-800-770-2030 (toll free) or 1-647-362-9199, and enter Conference ID: 6370505.

Regulation G

The information presented in this earnings release regarding consolidated and segment organic revenue growth, operating income, adjusted gross profit, adjusted gross profit margin, adjusted selling, general and administrative expense, adjusted income before income taxes and income from equity investments, adjusted income taxes, adjusted effective tax rate, adjusted net income, adjusted diluted earnings per share 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 2022 Guidance, 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 2021 net revenue of $3.3 billion, H.B. Fuller’s commitment to innovation and sustainable adhesive solutions 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 impact on the supply chain, raw material costs and pricing of our products due to the Russia-Ukraine war; the impact on our margins and product demand due to inflationary pressures; the substantial amount of debt we have incurred to finance our acquisition of Royal, our ability to repay or refinance our debt or to incur additional debt in the future, our need for a significant amount of cash to service and repay the debt and to pay dividends on our common stock, 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 the Russia-Ukraine war and the 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
May 28, 2022

 

Percent of
Net Revenue

 

Three Months Ended
May 29, 2021

 

Percent of
Net Revenue

Net revenue

$

993,258

 

100.0

%

$

827,873

 

100.0

%

Cost of sales

 

(739,737

)

(74.5

)%

 

(610,323

)

(73.7

)%

Gross profit

 

253,521

 

25.5

%

 

217,550

 

26.3

%

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

(166,007

)

(16.7

)%

 

(148,409

)

(17.9

)%

Other income, net

 

-

 

0.0

%

 

11,879

 

1.4

%

Interest expense

 

(19,828

)

(2.0

)%

 

(19,942

)

(2.4

)%

Interest income

 

2,091

 

0.2

%

 

2,530

 

0.3

%

Income before income taxes and income from equity method investments

 

69,777

 

7.0

%

 

63,608

 

7.7

%

 

 

 

 

 

 

 

 

 

 

 

Income taxes

 

(23,616

)

(2.4

)%

 

(16,660

)

(2.0

)%

 

 

 

 

 

 

 

 

 

 

 

Income from equity method investments

 

1,066

 

0.1

%

 

2,176

 

0.3

%

Net income including non-controlling interest

 

47,227

 

4.8

%

 

49,124

 

5.9

%

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to non-controlling interest

 

(24

)

(0.0

)%

 

(22

)

(0.0

)%

Net income attributable to H.B. Fuller

$

47,203

 

4.8

%

$

49,102

 

5.9

%

 

 

 

 

 

 

 

 

 

 

 

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

$

0.88

 

 

 

$

0.93

 

 

 

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

$

0.86

 

 

 

$

0.90

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

Basic

 

53,497

 

 

 

 

52,839

 

 

 

Diluted

 

55,078

 

 

 

 

54,294

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends declared per common share

$

0.190

 

 

 

$

0.168

 

 

 

H.B. FULLER COMPANY AND SUBSIDIARIES

CONSOLIDATED FINANCIAL INFORMATION

In thousands, except per share amounts (unaudited)

 

 

Six Months Ended

Percent of

 

Six Months Ended

 

Percent of

 

May 28, 2022

Net Revenue

May 29, 2021

Net Revenue

Net revenue

$

1,849,739

 

100.0

%

$

1,553,777

 

100.0

%

Cost of sales

 

(1,383,326

)

(74.8

)%

 

(1,143,863

)

(73.6

)%

Gross profit

 

466,413

 

25.2

%

 

409,914

 

26.4

%

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

(321,898

)

(17.4

)%

 

(292,423

)

(18.8

)%

 

 

 

 

 

 

 

 

 

 

 

Other income, net

 

6,142

 

0.3

%

 

19,748

 

1.3

%

Interest expense

 

(38,025

)

(2.1

)%

 

(40,303

)

(2.6

)%

Interest income

 

4,030

 

0.2

%

 

5,189

 

0.3

%

Income before income taxes and income from equity method investments

 

116,662

 

6.3

%

 

102,125

 

6.6

%

 

 

 

 

 

 

 

 

 

 

 

Income taxes

 

(33,765

)

(1.8

)%

 

(27,267

)

(1.8

)%

 

 

 

 

 

 

 

 

 

 

 

Income from equity method investments

 

2,649

 

0.1

%

 

4,072

 

0.3

%

Net income including non-controlling interest

 

85,546

 

4.6

%

 

78,930

 

5.1

%

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to non-controlling interest

 

(37

)

(0.0

)%

 

(37

)

(0.0

)%

Net income attributable to H.B. Fuller

$

85,509

 

4.6

%

$

78,893

 

5.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

$

1.60

 

 

 

$

1.50

 

 

 

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

$

1.55

 

 

 

$

1.47

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

Basic

 

53,425

 

 

 

 

52,666

 

 

 

Diluted

 

55,237

 

 

 

 

53,817

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends declared per common share

$

0.358

 

 

 

$

0.330

 

 

 

H.B. FULLER COMPANY AND SUBSIDIARIES

REGULATION G RECONCILIATION

In thousands, except per share amounts (unaudited)

 

 

Three Months Ended

 

Six Months Ended

 

May 28,

 

May 29,

 

May 28,

 

May 29,

 

2022

 

2021

 

2022

 

2021

Net income attributable to H.B. Fuller

$

47,203

 

 

$

49,102

 

 

$

85,509

 

 

$

78,893

 

Adjustments:

 

 

 

 

 

 

 

Acquisition project costs1

 

2,014

 

 

 

1,302

 

 

 

7,871

 

 

 

1,376

 

Organizational realignment2

 

2,818

 

 

 

2,307

 

 

 

4,446

 

 

 

5,942

 

Royal restructuring and integration3

 

412

 

 

 

1,239

 

 

 

810

 

 

 

2,521

 

Project One

 

1,853

 

 

 

1,959

 

 

 

5,057

 

 

 

4,164

 

Other4

 

6,264

 

 

 

(3,857

)

 

 

7,430

 

 

 

(3,812

)

Discrete tax items5

 

4,149

 

 

 

(600

)

 

 

1,248

 

 

 

(558

)

Income tax effect on adjustments6

 

(3,526

)

 

 

(594

)

 

 

(7,035

)

 

 

(2,613

)

Adjusted net income attributable to H.B. Fuller7

 

61,187

 

 

 

50,858

 

 

 

105,336

 

 

 

85,913

 

Add:

 

 

 

 

 

 

 

Interest expense

 

19,841

 

 

 

19,965

 

 

 

38,051

 

 

 

40,357

 

Interest income

 

(2,091

)

 

 

(2,530

)

 

 

(4,041

)

 

 

(5,189

)

Adjusted Income taxes

 

22,993

 

 

 

17,854

 

 

 

39,552

 

 

 

30,437

 

Depreciation and Amortization expense8

 

36,637

 

 

 

35,389

 

 

 

72,434

 

 

 

70,891

 

Adjusted EBITDA7

 

138,567

 

 

 

121,536

 

 

 

251,332

 

 

 

222,409

 

 

 

 

 

 

 

 

 

Diluted Shares

 

55,078

 

 

 

54,294

 

 

 

55,237

 

 

 

53,817

 

Adjusted diluted income per common share attributable
to H.B. Fuller7

$

1.11

 

 

$

0.94

 

 

$

1.91

 

 

$

1.60

 

Revenue

$

993,258

 

 

$

827,873

 

 

$

1,849,739

 

 

$

1,553,777

 

Adjusted EBITDA margin7

 

14.0

%

 

 

14.7

%

 

 

13.6

%

 

 

14.3

%

1 Acquisition project costs include costs related to integrating and accounting for acquisitions.

2 Organizational realignment 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.

3 Royal restructuring and integration program includes 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.

4 Other expenses include a $3.3 million non-cash charge related to wind down and settlement of the Company’s Canadian defined benefit pension plan, $1.3 million of hedging costs related to the Russian ruble devaluation driven by the war in Ukraine, $1.2 million of transactional tax expense associated with an audit settlement, other expenses for COVID-19 testing, vaccinations, and exceptional medical claims, and non-cash gains and losses related to legal entity consolidations.

5 Discrete tax items are related to revaluation of cross-currency swap agreements due to depreciation of the Euro versus the U.S. Dollar and various foreign tax matters, offset by the tax effect of legal entity mergers.

6 Represents the difference between income taxes on net income before income taxes and income from equity method investments reported in accordance with U.S. GAAP and adjusted net income before income taxes and income from equity method investments.

7 Adjusted net income attributable to H.B. Fuller, adjusted diluted income per common share attributable to H.B. Fuller, adjusted EBITDA and adjusted EBITDA margin are non-GAAP financial measures. Adjusted net income attributable to H.B. Fuller is defined as net income before the specific adjustments shown above. Adjusted diluted income per common share is defined as adjusted net income attributable to H.B. Fuller divided by the number of diluted common shares. Adjusted EBITDA is defined as net income before interest, income taxes, depreciation, amortization and the specific adjustments shown above. Adjusted EBITDA margin is defined as adjusted EBITDA divided by net revenue. The table above provides a reconciliation of adjusted net income attributable to H.B. Fuller, adjusted diluted income per common share attributable to H.B. Fuller, adjusted EBITDA and adjusted EBITDA margin to net income attributable to H.B. Fuller, the most directly comparable financial measure determined and reported in accordance with U.S. GAAP.

8 Depreciation and amortization expense added back for EBITDA is adjusted for amounts already included in Adjusted net income attributable to H.B. Fuller totaling ($153) and ($507) for the three months ended May 28, 2022 and May 29, 2021, respectively and ($311) and ($734) for the six months ended May 28, 2022 and May 29, 2021, respectively.

H.B. FULLER COMPANY AND SUBSIDIARIES

SEGMENT FINANCIAL INFORMATION

In thousands (unaudited)

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

May 28,

 

 

May 29,

 

 

May 28,

 

 

May 29,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Net Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hygiene, Health and Consumable Adhesives

 

$

437,889

 

 

$

364,814

 

 

$

827,427

 

 

$

700,482

 

Engineering Adhesives

 

 

405,346

 

 

 

345,373

 

 

 

759,323

 

 

 

658,037

 

Construction Adhesives

 

 

150,023

 

 

 

117,686

 

 

 

262,989

 

 

 

195,258

 

Corporate unallocated

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Total H.B. Fuller

 

$

993,258

 

 

$

827,873

 

 

$

1,849,739

 

 

$

1,553,777

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment Operating Income (Loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hygiene, Health and Consumable Adhesives

 

$

43,267

 

 

$

38,929

 

 

$

75,480

 

 

$

68,840

 

Engineering Adhesives

 

 

42,917

 

 

 

32,075

 

 

 

75,489

 

 

 

62,493

 

Construction Adhesives

 

 

11,285

 

 

 

6,338

 

 

 

15,641

 

 

 

1,635

 

Corporate unallocated

 

 

(9,955

)

 

 

(8,201

)

 

 

(22,095

)

 

 

(15,477

)

Total H.B. Fuller

 

$

87,514

 

 

$

69,141

 

 

$

144,515

 

 

$

117,491

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hygiene, Health and Consumable Adhesives

 

$

57,872

 

 

$

53,569

 

 

$

104,470

 

 

$

98,175

 

Engineering Adhesives

 

 

59,520

 

 

 

49,864

 

 

 

109,399

 

 

 

98,032

 

Construction Adhesives

 

 

24,121

 

 

 

17,252

 

 

 

39,998

 

 

 

23,539

 

Corporate unallocated

 

 

(2,946

)

 

 

851

 

 

 

(2,535

)

 

 

2,663

 

Total H.B. Fuller

 

$

138,567

 

 

$

121,536

 

 

$

251,332

 

 

$

222,409

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA Margin7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hygiene, Health and Consumable Adhesives

 

 

13.2

%

 

 

14.7

%

 

 

12.6

%

 

 

14.0

%

Engineering Adhesives

 

 

14.7

%

 

 

14.4

%

 

 

14.4

%

 

 

14.9

%

Construction Adhesives

 

 

16.1

%

 

 

14.7

%

 

 

15.2

%

 

 

12.1

%

Corporate unallocated

 

NMP

 

 

NMP

 

 

NMP

 

 

NMP

 

Total H.B. Fuller

 

 

14.0

%

 

 

14.7

%

 

 

13.6

%

 

 

14.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NMP = non-meaningful percentage

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

H.B. FULLER COMPANY AND SUBSIDIARIES

REGULATION G RECONCILIATION

In thousands, except per share amounts (unaudited)

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

May 28,

 

 

May 29,

 

 

May 28,

 

 

May 29,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Income before income taxes and income from equity method investments

 

$

69,777

 

 

$

63,608

 

 

$

116,662

 

 

$

102,125

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition project costs1

 

 

2,014

 

 

 

1,302

 

 

 

7,871

 

 

 

1,376

 

Organizational realignment2

 

 

2,818

 

 

 

2,307

 

 

 

4,446

 

 

 

5,942

 

Royal restructuring and integration3

 

 

412

 

 

 

1,239

 

 

 

810

 

 

 

2,521

 

Project One

 

 

1,853

 

 

 

1,959

 

 

 

5,057

 

 

 

4,164

 

Other4

 

 

6,264

 

 

 

(3,857

)

 

 

7,430

 

 

 

(3,812

)

Adjusted income before income taxes and income from equity method investments9

 

$

83,138

 

 

$

66,558

 

 

$

142,276

 

 

$

112,316

 

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

H.B. FULLER COMPANY AND SUBSIDIARIES

REGULATION G RECONCILIATION

In thousands, except per share amounts (unaudited)

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

May 28,

 

 

May 29,

 

 

May 28,

 

 

May 29,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Income Taxes

 

$

(23,616

)

 

$

(16,660

)

 

$

(33,765

)

 

$

(27,267

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition project costs1

 

 

(531

)

 

 

(262

)

 

 

(2,209

)

 

 

(283

)

Organizational realignment2

 

 

(744

)

 

 

(465

)

 

 

(1,210

)

 

 

(1,478

)

Royal restructuring and integration3

 

 

(109

)

 

 

(249

)

 

 

(223

)

 

 

(606

)

Project One

 

 

(489

)

 

 

(395

)

 

 

(1,406

)

 

 

(1,009

)

Other4

 

 

2,496

 

 

 

177

 

 

 

(739

)

 

 

206

 

Adjusted income taxes10

 

$

(22,993

)

 

$

(17,854

)

 

$

(39,552

)

 

$

(30,437

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted income before income taxes and income from equity method investments

 

$

83,138

 

 

$

66,558

 

 

$

142,276

 

 

$

112,316

 

Adjusted effective income tax rate10

 

 

27.7

%

 

 

26.8

%

 

 

27.8

%

 

 

27.1

%

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

H.B. FULLER COMPANY AND SUBSIDIARIES

REGULATION G RECONCILIATION

In thousands (unaudited)

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

May 28,

 

 

May 29,

 

 

May 28,

 

 

May 29,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net revenue

 

$

993,258

 

 

$

827,873

 

 

$

1,849,739

 

 

$

1,553,777

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

$

253,521

 

 

$

217,550

 

 

$

466,413

 

 

$

409,914

 

Gross profit margin

 

 

25.5

%

 

 

26.3

%

 

 

25.2

%

 

 

26.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition project costs1

 

 

(238

)

 

 

63

 

 

 

424

 

 

 

63

 

Organizational realignment2

 

 

1,520

 

 

 

544

 

 

 

1,783

 

 

 

793

 

Royal restructuring and integration3

 

 

140

 

 

 

578

 

 

 

372

 

 

 

1,319

 

Project ONE

 

 

6

 

 

 

(725

)

 

 

6

 

 

 

-

 

Other4

 

 

447

 

 

 

1,378

 

 

 

825

 

 

 

1,386

 

Adjusted gross profit11

 

$

255,396

 

 

$

219,388

 

 

$

469,823

 

 

$

413,475

 

Adjusted gross profit margin11

 

 

25.7

%

 

 

26.5

%

 

 

25.4

%

 

 

26.6

%

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

H.B. FULLER COMPANY AND SUBSIDIARIES

REGULATION G RECONCILIATION

In thousands (unaudited)

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

May 28,

 

 

May 29,

 

 

May 28,

 

 

May 29,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

$

(166,007

)

 

$

(148,409

)

 

$

(321,898

)

 

$

(292,423

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition project costs1

 

 

2,252

 

 

 

1,239

 

 

 

7,447

 

 

 

1,313

 

Organizational realignment2

 

 

2,275

 

 

 

1,818

 

 

 

3,630

 

 

 

5,205

 

Royal restructuring and integration3

 

 

286

 

 

 

683

 

 

 

464

 

 

 

1,255

 

Project ONE

 

 

1,847

 

 

 

2,684

 

 

 

5,051

 

 

 

4,164

 

Other4

 

 

1,421

 

 

 

(59

)

 

 

2,094

 

 

 

(23

)

Adjusted selling, general and administrative expenses12

 

$

(157,926

)

 

$

(142,044

)

 

$

(303,212

)

 

$

(280,509

)

12 Adjusted selling, general and administrative expenses is a non-GAAP financial measure. Adjusted selling, general and administrative expenses is defined as selling, general and administrative expenses excluding the specific adjustments shown above. The table above provides a reconciliation of adjusted selling, general and administrative expenses to selling, general and administrative expenses, the most directly comparable financial measure determined and reported in accordance with U.S. GAAP.

H.B. FULLER COMPANY AND SUBSIDIARIES

REGULATION G RECONCILIATION

In thousands (unaudited)

 

Hygiene, Health

 

 

 

 

 

Three Months Ended:

and Consumable

Engineering

Construction

 

Corporate

H.B. Fuller

May 28, 2022

Adhesives

Adhesives

Adhesives

Total

Unallocated

Consolidated

Net income attributable to

H.B. Fuller

$

46,186

 

$

45,077

 

$

13,613

 

$

104,876

 

$

(57,673

)

$

47,203

 

 

Adjustments:

 

 

 

 

 

 

Acquisition project costs1

 

-

 

 

-

 

 

-

 

 

-

 

 

2,014

 

 

2,014

 

Organizational realignment2

 

-

 

 

-

 

 

-

 

 

-

 

 

2,818

 

 

2,818

 

Royal Restructuring and integration3

 

-

 

 

-

 

 

-

 

 

-

 

 

412

 

 

412

 

Project One

 

-

 

 

-

 

 

-

 

 

-

 

 

1,853

 

 

1,853

 

Other4

 

-

 

 

-

 

 

-

 

 

-

 

 

6,264

 

 

6,264

 

Discrete tax items5

 

-

 

 

-

 

 

-

 

 

-

 

 

4,149

 

 

4,149

 

Income tax effect on adjustments6

 

-

 

 

-

 

 

-

 

 

-

 

 

(3,526

)

 

(3,526

)

Adjusted net income attributable to H.B. Fuller7

 

46,186

 

 

45,077

 

 

13,613

 

 

104,876

 

 

(43,689

)

 

61,187

 

 

Add:

 

 

 

 

 

 

Interest expense

 

-

 

 

-

 

 

-

 

 

-

 

 

19,841

 

 

19,841

 

Interest income

 

-

 

 

-

 

 

-

 

 

-

 

 

(2,091

)

 

(2,091

)

Adjusted Income taxes

 

-

 

 

-

 

 

-

 

 

-

 

 

22,993

 

 

22,993

 

Depreciation and amortization expense8

 

11,686

 

 

14,443

 

 

10,508

 

 

36,637

 

 

-

 

 

 

 

36,637

 

 

 

Adjusted EBITDA7

$

57,872

 

$

59,520

 

$

24,121

 

$

141,513

 

$

(2,946

)

$

138,567

 

 

Revenue

$

437,889

 

$

405,346

 

$

150,023

 

$

993,258

 

 

-

 

$

993,258

 

 

Adjusted EBITDA Margin7

 

13.2

%

 

14.7

%

 

16.1

%

 

14.2

%

NMP

 

14.0

%

 

Note: Adjusted EBITDA is a non-GAAP financial measure. The table above provides a reconciliation of adjusted EBITDA for each segment to net income attributable to H.B. Fuller for each segment, the most directly comparable financial measure determined and reported in accordance with U.S. GAAP.

NMP = Non-meaningful percentage

H.B. FULLER COMPANY AND SUBSIDIARIES

REGULATION G RECONCILIATION

In thousands (unaudited)

 

 

 

Hygiene, Health

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended

and Consumable

 

Engineering

 

 

Construction

 

 

 

 

 

 

Corporate

 

 

H.B. Fuller

 

May 28, 2022

Adhesives

 

 

Adhesives

 

 

Adhesives

 

 

Total

 

 

Unallocated

 

 

Consolidated

 

Net income attributable to

H.B. Fuller

$

81,323

 

$

79,814

 

$

20,296

 

$

181,433

 

$

(95,924

)

$

85,509

 

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition project costs1

 

-

 

 

-

 

 

-

 

 

-

 

 

7,871

 

 

7,871

 

Organizational realignment2

 

-

 

 

-

 

 

-

 

 

-

 

 

4,446

 

 

4,446

 

Royal Restructuring and integration3

 

-

 

 

-

 

 

-

 

 

-

 

 

810

 

 

810

 

Project One

 

-

 

 

-

 

 

-

 

 

-

 

 

5,057

 

 

5,057

 

Other4

 

-

 

 

-

 

 

-

 

 

-

 

 

7,430

 

 

7,430

 

Discrete tax items5

 

-

 

 

-

 

 

-

 

 

-

 

 

1,248

 

 

1,248

 

Income tax effect on adjustments6

 

-

 

 

-

 

 

-

 

 

-

 

 

(7,035

)

 

(7,035

)

Adjusted net income attributable to H.B. Fuller7

 

81,323

 

 

79,814

 

 

20,296

 

 

181,433

 

 

(76,097

)

 

105,336

 

 

Add:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

-

 

 

-

 

 

-

 

 

-

 

 

38,051

 

 

38,051

 

Interest income

 

-

 

 

-

 

 

-

 

 

-

 

 

(4,041

)

 

(4,041

)

Adjusted Income taxes

 

-

 

 

-

 

 

-

 

 

-

 

 

39,552

 

 

39,552

 

Depreciation and amortization expense8

 

23,147

 

 

29,585

 

 

19,702

 

 

72,434

 

 

-

 

 

72,434

 

 

Adjusted EBITDA7

$

104,470

 

$

109,399

 

$

39,998

 

$

253,867

 

$

(2,535

)

$

251,332

 

 

Revenue

 

827,427

 

 

759,323

 

 

262,989

 

 

1,849,739

 

 

-

 

 

1,849,739

 

 

Adjusted EBITDA Margin7

 

12.6

%

 

14.4

%

 

15.2

%

 

13.7

%

NMP

 

 

13.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Note: Adjusted EBITDA is a non-GAAP financial measure. The table above provides a reconciliation of adjusted EBITDA for each segment to net income attributable to H.B. Fuller for each segment, the most directly comparable financial measure determined and reported in accordance with U.S. GAAP.

NMP = Non-meaningful percentage

H.B. FULLER COMPANY AND SUBSIDIARIES

REGULATION G RECONCILIATION

In thousands (unaudited)

 

Hygiene, Health

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended:

and Consumable

Engineering

 

Construction

 

 

 

 

Corporate

 

H.B. Fuller

 

May 29, 2021

Adhesives

Adhesives

 

Adhesives

 

Total

 

Unallocated

 

Consolidated

 

Net income attributable to

H.B. Fuller

$

42,197

 

$

34,584

 

$

8,515

 

$

85,296

 

$

(36,194

)

$

49,102

 

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition project costs1

 

-

 

 

-

 

 

-

 

 

-

 

 

1,302

 

 

1,302

 

Organizational realignment2

 

-

 

 

-

 

 

-

 

 

-

 

 

2,307

 

 

2,307

 

Royal Restructuring and integration3

 

-

 

 

-

 

 

-

 

 

-

 

 

1,239

 

 

1,239

 

Project One

 

-

 

 

-

 

 

-

 

 

-

 

 

1,959

 

 

1,959

 

Other4

 

-

 

 

-

 

 

-

 

 

-

 

 

(3,857

)

 

(3,857

)

Discrete tax items5

 

-

 

 

-

 

 

-

 

 

-

 

 

(600

)

 

(600

)

Income tax effect on adjustments6

 

-

 

 

-

 

 

-

 

 

-

 

 

(594

)

 

(594

)

Adjusted net income attributable to H.B. Fuller7

 

42,197

 

 

34,584

 

 

8,515

 

 

85,296

 

 

(34,438

)

 

50,858

 

 

Add:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

-

 

 

-

 

 

-

 

 

-

 

 

19,965

 

 

19,965

 

Interest income

 

-

 

 

-

 

 

-

 

 

-

 

 

(2,530

)

 

(2,530

)

Adjusted Income taxes

 

-

 

 

-

 

 

-

 

 

-

 

 

17,854

 

 

17,854

 

Depreciation and amortization expense8

 

11,372

 

 

15,280

 

 

8,737

 

 

35,389

 

 

-

 

 

35,389

 

 

Adjusted EBITDA7

$

53,569

 

$

49,864

 

$

17,252

 

$

120,685

 

$

851

 

$

121,536

 

 

Revenue

$

364,814

 

$

345,373

 

$

117,686

 

$

827,873

 

 

-

 

$

827,873

 

 

Adjusted EBITDA Margin7

 

14.7

%

 

14.4

%

 

14.7

%

 

14.6

%

NMP

 

 

14.7

%

Note: Adjusted EBITDA is a non-GAAP financial measure. The table above provides a reconciliation of adjusted EBITDA for each segment to net income attributable to H.B. Fuller for each segment, the most directly comparable financial measure determined and reported in accordance with U.S. GAAP.

NMP = Non-meaningful percentage

H.B. FULLER COMPANY AND SUBSIDIARIES

REGULATION G RECONCILIATION

In thousands (unaudited)

 

Hygiene, Health

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended

and Consumable

 

 

Engineering

 

Construction

 

 

 

 

 

 

Corporate

 

 

H.B. Fuller

 

May 29, 2021

Adhesives

 

 

Adhesives

 

Adhesives

 

 

Total

 

 

Unallocated

 

 

Consolidated

 

Net income attributable to

H.B. Fuller

$

75,367

 

$

67,500

 

$

5,988

 

$

148,855

 

$

(69,962

)

$

78,893

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition project costs1

-

 

 

-

 

 

-

 

 

-

 

 

1,376

 

 

1,376

 

Organizational realignment2

-

 

 

-

 

 

-

 

 

-

 

 

5,942

 

 

5,942

 

Royal Restructuring and integration3

-

 

 

-

 

 

-

 

 

-

 

 

2,521

 

 

2,521

 

Project One

-

 

 

-

 

 

-

 

 

-

 

 

4,164

 

 

4,164

 

Other4

-

 

 

-

 

 

-

 

 

-

 

 

(3,812

)

 

(3,812

)

Discrete tax items5

-

 

 

-

 

 

-

 

 

-

 

 

(558

)

 

(558

)

Income tax effect on adjustments6

-

 

 

-

 

 

-

 

 

-

 

 

(2,613

)

 

(2,613

)

Adjusted net income attributable to H.B. Fuller7

75,367

 

 

67,500

 

 

5,988

 

 

148,855

 

 

(62,942

)

 

85,913

 

 

Add:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

-

 

 

-

 

 

-

 

 

-

 

 

40,357

 

 

40,357

 

Interest income

-

 

 

-

 

 

-

 

 

-

 

 

(5,189

)

 

(5,189

)

Adjusted Income taxes

-

 

 

-

 

 

-

 

 

-

 

 

30,437

 

 

30,437

 

Depreciation and amortization expense8

22,808

 

 

30,532

 

 

17,551

 

 

70,891

 

 

-

 

 

70,891

 

 

Adjusted EBITDA7

$

98,175

 

$

98,032

 

$

23,539

 

$

219,746

 

$

2,663

 

$

222,409

 

 

Revenue

$700,482

 

$

658,037

 

$

195,258

 

$

1,553,777

 

 

-

 

$

1,553,777

 

 

Adjusted EBITDA Margin7

14.0

%

 

14.9

%

 

12.1

%

 

14.1

%

NMP

 

 

14.3

%

Note: Adjusted EBITDA is a non-GAAP financial measure. The table above provides a reconciliation of adjusted EBITDA for each segment to net income attributable to H.B. Fuller for each segment, the most directly comparable financial measure determined and reported in accordance with U.S. GAAP.

NMP = Non-meaningful percentage

H.B. FULLER COMPANY AND SUBSIDIARIES

SEGMENT FINANCIAL INFORMATION

NET REVENUE GROWTH (DECLINE)

(unaudited)

 

 

Three Months Ended

 

Six Months Ended

 

 

May 28, 2022

 

May 28, 2022

Price

 

 

18.5

%

 

 

16.8

%

Volume

 

 

3.4

%

 

 

4.6

%

Organic Growth13

 

 

21.9

%

 

 

21.4

%

M&A

 

 

2.0

%

 

 

1.5

%

Growth at Constant Currency

 

 

23.9

%

 

 

22.9

%

F/X

 

 

(3.9

)%

 

 

(3.8

)%

Total H.B. Fuller Net Revenue Growth

 

 

20.0

%

 

 

19.1

%

 

 

Three Months Ended

Six Months Ended

 

 

May 28, 2022

May 28, 2022

 

 

Net Revenue

F/X

Constant Currency

M&A

Organic Growth 11

 

Net Revenue

F/X

Constant Currency

M&A

Organic Growth 11

 

Hygiene, Health and Consumable Adhesives

20.0

%

(4.5

)%

24.5

%

0.0

%

24.5

%

 

18.1

%

(4.6

)%

22.7

%

0.0

%

22.7

%

Engineering Adhesives

17.4

%

(4.4

)%

21.8

%

0.0

%

21.8

%

 

15.4

%

(3.9

)%

19.3

%

0.0

%

19.3

%

Construction Adhesives

27.5

%

(0.8

)%

28.3

%

14.0

%

14.3

%

 

34.7

%

(0.8

)%

35.5

%

11.7

%

23.8

%

Total H.B. Fuller

20.0

%

(3.9

)%

23.9

%

2.0

%

21.9

%

 

19.1

%

(3.8

)%

22.9

%

1.5

%

21.4

%

 

13 We use the term “organic revenue” to refer to net revenue, excluding the effect of foreign currency changes and acquisitions and divestitures. Organic growth reflects adjustments for the impact of period-over-period changes in foreign currency exchange rates on revenues and the revenues associated with acquisitions and divestitures.

H.B. FULLER COMPANY AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share amounts)

 

 

May 28,

 

 

November 27,

 

 

 

2022

 

 

2021

 

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

68,149

 

 

$

61,786

 

Trade receivables (net of allowances of $12,701 and $9,935, as of May 28, 2022 and November 27, 2021, respectively)

 

 

644,544

 

 

 

614,645

 

Inventories

 

 

543,126

 

 

 

448,404

 

Other current assets

 

 

153,187

 

 

 

96,335

 

Total current assets

 

 

1,409,006

 

 

 

1,221,170

 

 

 

 

 

 

 

 

 

 

Property, plant and equipment

 

 

1,527,711

 

 

 

1,500,989

 

Accumulated depreciation

 

 

(825,256

)

 

 

(805,622

)

Property, plant and equipment, net

 

 

702,455

 

 

 

695,367

 

 

 

 

 

 

 

 

 

 

Goodwill

 

 

1,406,369

 

 

 

1,298,845

 

Other intangibles, net

 

 

737,551

 

 

 

687,075

 

Other assets

 

 

365,098

 

 

 

372,073

 

Total assets

 

$

4,620,479

 

 

$

4,274,530

 

 

 

 

 

 

 

 

 

 

Liabilities, non-controlling interest and total equity

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Notes payable

 

$

31,867

 

 

$

24,983

 

Trade payables

 

 

507,103

 

 

 

500,321

 

Accrued compensation

 

 

67,991

 

 

 

109,542

 

Income taxes payable

 

 

28,180

 

 

 

15,943

 

Other accrued expenses

 

 

86,842

 

 

 

86,061

 

Total current liabilities

 

 

721,983

 

 

 

736,850

 

 

 

 

 

 

 

 

 

 

Long-term debt

 

 

1,903,977

 

 

 

1,591,479

 

Accrued pension liabilities

 

 

69,820

 

 

 

71,651

 

Other liabilities

 

 

309,945

 

 

 

277,190

 

Total liabilities

 

 

3,005,725

 

 

 

2,677,170

 

 

 

 

 

 

 

 

 

 

Commitments and contingencies (Note 12)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity:

 

 

 

 

 

 

 

 

H.B. Fuller stockholders' equity:

 

 

 

 

 

 

 

 

Preferred stock (no shares outstanding) shares authorized – 10,045,900

 

 

-

 

 

 

-

 

Common stock, par value $1.00 per share, shares authorized – 160,000,000, shares outstanding – 53,153,056 and 52,777,753 as of May 28, 2022 and November 27, 2021, respectively

 

 

53,153

 

 

 

52,778

 

Additional paid-in capital

 

 

232,253

 

 

 

213,637

 

Retained earnings

 

 

1,666,969

 

 

 

1,600,601

 

Accumulated other comprehensive loss

 

 

(338,228

)

 

 

(270,247

)

Total H.B. Fuller stockholders' equity

 

 

1,614,147

 

 

 

1,596,769

 

Non-controlling interest

 

 

607

 

 

 

591

 

Total equity

 

 

1,614,754

 

 

 

1,597,360

 

Total liabilities, non-controlling interest and total equity

 

$

4,620,479

 

 

$

4,274,530

 

H.B. FULLER COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS of CASH FLOWS

(In thousands)

 

Six Months Ended

 

 

May 28, 2022

 

May 29, 2021

 

Cash flows from operating activities:

 

 

 

 

 

Net income including non-controlling interest

$

85,546

 

$

78,930

 

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

 

 

 

 

 

 

Depreciation

 

36,333

 

 

35,976

 

Amortization

 

36,412

 

 

 

35,649

 

Deferred income taxes

(4,961

)

(1,167

)

Income from equity method investments, net of dividends received

 

(2,649

)

 

(4,072

)

Loss on sale or disposal of assets

 

(1,087

)

 

-

 

Share-based compensation

 

13,625

 

 

12,486

 

Pension and other post-retirement benefit plan activity

 

(9,720

)

 

(15,927

)

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

 

 

 

 

 

 

Trade receivables, net

 

(35,491

)

 

(43,191

)

Inventories

 

(95,413

)

 

(100,358

)

Other assets

 

(21,908

)

 

(21,709

)

Trade payables

 

27,237

 

 

115,488

 

Accrued compensation

 

(40,448

)

 

(8,760

)

Other accrued expenses

 

4,402

 

 

1,925

 

Income taxes payable

 

(5,864

)

 

(1,513

)

Other liabilities

 

(23,597

)

 

(28,980

)

Other

 

28,452

 

 

25,055

 

Net cash (used in) provided by operating activities

 

(9,131

)

 

79,832

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

Purchased property, plant and equipment

 

(69,055

)

 

(50,726

)

Purchased businesses, net of cash acquired

 

(229,314

)

 

(5,445

)

Proceeds from sale of property, plant and equipment

 

1,269

 

 

1,237

 

Cash received from government grant

 

3,928

 

 

-

 

Cash payments related to government grant

 

-

 

 

(1,526

)

Net cash used in investing activities

 

(293,172

)

 

(56,460

)

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

Proceeds from debt

 

335,000

 

 

-

 

Repayment of long-term debt

 

-

 

 

(68,000

)

Payment of debt issuance costs

 

(600

)

 

-

 

Net (payments) proceeds of notes payable

 

3,565

 

 

9,335

 

Dividends paid

 

(18,965

)

 

(17,244

)

Contingent consideration payment

 

(5,000

)

 

-

 

Proceeds from stock options exercised

 

7,837

 

 

20,621

 

Repurchases of common stock

 

(3,609

)

 

(2,628

)

Net cash provided by (used in) financing activities

 

318,228

 

 

(57,916

)

 

 

 

 

 

 

 

Effect of exchange rate changes on cash and cash equivalents

 

(9,562

)

 

3,607

 

Net change in cash and cash equivalents

 

6,363

 

 

(30,937

)

Cash and cash equivalents at beginning of period

 

61,786

 

 

100,534

 

Cash and cash equivalents at end of period

$

68,149

 

$

69,597

 

 

 

Barbara Doyle
Investor Relations contact
651-236-5023

Source: H.B. Fuller Company

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