H.B. Fuller Reports Fourth Quarter and Fiscal Year 2024 Results

H.B. Fuller Reports Fourth Quarter and Fiscal Year 2024 Results

FY 2024 Net Income of $130 million; Adjusted EBITDA of $594 million

Continued expansion of FY Adjusted EBITDA Margin to 16.6%

Finalizing plan to drive savings through optimization of manufacturing and supply chain footprint

ST. PAUL, Minn.–(BUSINESS WIRE)–
H.B. Fuller Company (NYSE: FUL) today reported financial results for its fourth quarter and fiscal year that ended November 30, 2024.

Fiscal Year 2024 Noteworthy Items:

  • Net revenue was $3.57 billion, up 1.6% year-on-year; organic revenue decreased 1.0% year-on-year, driven by 2.7% unfavorable pricing, partially offset by 1.7% higher volume;

  • Gross margin was 29.8%; adjusted gross margin of 30.3% increased 90 basis points year-on-year, driven by pricing and raw material cost actions, higher volume, and restructuring benefits;

  • Net income was $130 million; adjusted EBITDA was $594 million, up 2.2% year-on-year; adjusted EBITDA margin expanded year-on-year to 16.6%;

  • Reported EPS (diluted) was $2.30; adjusted EPS (diluted) was $3.84, effectively flat versus the prior year as higher adjusted EBITDA was offset by higher amortization expense;

  • Net working capital, as a percentage of annualized net revenue, declined 160 basis points year-on-year to 14.5%; cash flow from operations was $301 million.

Fourth Quarter 2024 Noteworthy Items:

  • Net revenue was $923 million, up 2.3% year-on-year, with organic sales down 0.2% year-on-year;

  • Gross margin was 28.7%; adjusted gross margin of 29.6% decreased year-on-year driven by unfavorable raw material cost developments and delayed price realization;

  • Net income/(loss) was ($7) million including an unfavorable $38 million non-cash, after-tax impact related to the Flooring divestiture; adjusted EBITDA was $148 million, down 14% year-on-year, and adjusted EBITDA margin was 16.1%;

  • Reported EPS (diluted) was ($0.13); adjusted EPS (diluted) was $0.92, down versus the prior year, driven by lower operating income;

  • Subsequent to quarter end, realigned building and construction market segments into the newly named Building Adhesive Solutions (BAS) global business unit (starting in fiscal 2025) and divested the Flooring market segment;

  • Subsequent to quarter end, expanded the geographic reach and technology offering of our Medical Adhesive Technology market segment with the announced acquisitions of GEM S.r.l. and Medifill Ltd;

  • Finalizing an expanded plan to streamline manufacturing and supply chain footprint and cost structure, which is expected to generate additional annualized pre-tax cost savings of approximately $75 million when completed by fiscal 2030.

Summary of Fourth Quarter 2024 Results:

The Company’s net revenue for the fourth quarter of fiscal 2024 was $923 million, up 2.3% versus the fourth quarter of fiscal 2023. Organic revenue declined 0.2% year-on-year, with pricing adjustments reducing organic revenue by 1.5% and volume increasing organic revenue by 1.3%. Foreign currency translation decreased net revenue by 0.2%, and acquisitions increased net revenue by 2.7%.

Gross profit in the fourth quarter of fiscal 2024 was $265 million. Adjusted gross profit was $273 million. Adjusted gross profit margin of 29.6% decreased 170 basis points year-on-year. Unfavorable pricing in conjunction with higher raw material costs, principally led to the decline in adjusted gross margin year-on-year.

Selling, general and administrative (SG&A) expense was $188 million in the fourth quarter of fiscal 2024 and adjusted SG&A was $174 million, up 12 percent year-on-year. The impact of acquisitions and higher variable compensation drove most of the year-on-year increase in adjusted SG&A.

Net income/(loss) attributable to H.B. Fuller for the fourth quarter of fiscal 2024 was ($7) million, including an unfavorable $38 million non-cash, after-tax impact related to the Flooring divestiture. Adjusted net income attributable to H.B. Fuller for the fourth quarter of fiscal 2024 was $52 million. Adjusted EPS was $0.92 per diluted share.

Adjusted EBITDA in the fourth quarter of fiscal 2024 was $148 million, down 14% year-on-year, driven by unfavorable raw material cost developments, delayed price realization, and higher variable compensation expense.

“Overall, I am proud of the progress we made in fiscal year 2024. We continued to expand adjusted EBITDA margin and enhanced the profile of our portfolio through several strategic acquisitions and the divestiture of our Flooring business,” said Celeste Mastin, President and Chief Executive Officer. “At the same time, I am disappointed that we were unable to finish the year as strong as we had expected. In the fourth quarter, we encountered an unexpected deceleration in volume across the majority of our end markets. Furthermore, delays in customer order patterns, particularly in the consumer product goods related market segments, shifted price increase realization into fiscal 2025, delaying the offset of higher raw material costs and resulting in margin deterioration.

“We are intensely focused on what we can control and have already begun executing additional pricing actions and cost controls to prudently prepare for a challenging volume growth environment in 2025. Our strategic plan to continue to evolve H.B Fuller into a higher growth, higher margin company remains on track on the timeline we originally communicated.”

Balance Sheet and Working Capital:

Net debt at the end of the fourth quarter of fiscal 2024 was $1,841 million, down $48 million sequentially versus the third quarter and up $182 million year-on-year. Net debt-to-adjusted EBITDA of 3.1X was flat versus the previous quarter.

Net working capital in the fourth quarter of fiscal 2024 declined $56 million sequentially versus the third quarter and $46 million year-on-year. As a percentage of annualized net revenue, net working capital declined 160 basis points, both sequentially and year-on-year, to 14.5%.

Manufacturing and Supply Chain Footprint Consolidation:

The Company is finalizing an expanded plan to significantly reduce its global manufacturing footprint and streamline its North American planning and logistics structure. This multi-year plan is expected to reduce the number of manufacturing facilities from 82 today to a target of 55 when completed in 2030. Additionally, it will reduce the number of warehouses in North America from 55 today to approximately 10 by the end of 2027.

As a result of these combined actions, the Company expects to generate approximately $75 million in annualized cost savings once the plan is fully implemented in fiscal 2030. These figures are incremental to the ongoing restructuring actions, which are still expected to generate annualized cost savings of $45 million by the end of fiscal 2025. The Company expects to invest approximately $150 million in incremental capital over the next five years associated with the expanded plan.

“Our manufacturing footprint consolidation, coupled with our planning and logistics reorganization, are important steps in our strategic plan to achieve an EBITDA margin consistently greater than 20 percent. These actions will not only reduce costs through improved capacity utilization, they will also enable us to better serve our customers and reduce future capital expenditure requirements,” said Mastin.

Fiscal 2025 Outlook:

  • Net revenue growth for fiscal 2025 is expected to be down 2% to 4%, adjusting for the divestiture of the Flooring business, net revenue is expected to be up 1% to 2%;

  • Organic revenue growth is expected to be flat to up 2% versus fiscal 2024;

  • Adjusted EBITDA for fiscal 2025 is expected to be in the range of $600 million to $625 million, equating to growth of approximately 1% to 5% year-on-year;

  • Adjusted EBITDA for the first quarter of 2025 is expected to be in the range of $105 million to $115 million;

  • The core tax rate, excluding the impact of discrete items, is anticipated to be between 26% and 27% in fiscal year 2025;

  • Net interest expense for fiscal 2025 is expected to be between $120 million and $125 million;

  • Adjusted EPS (diluted) is expected to be in the range of $3.90 to $4.20, equating to a range of up 2% to 9% year-on-year;

  • Operating cash flow in fiscal year 2025 is expected to be between $300 million and $325 million;

  • Capital expenditures of approximately $160 million are expected in fiscal 2025, which includes approximately $40 million related to the Company’s manufacturing footprint consolidation initiative.

Conference Call:

The Company will hold a conference call on January 16, 2025, 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 January 16, 2025, to 10:59 p.m. CT on January 23, 2025. To access the telephone replay dial 1-800-770-2030 (toll free) or 1-609-800-9909, and enter Conference ID: 6370505.

Regulation G:

The information presented in this earnings release regarding consolidated and segment organic revenue growth, operating income, adjusted gross profit, adjusted gross profit margin, adjusted selling, general and administrative expense, adjusted income before income taxes and income from equity investments, adjusted income taxes, adjusted effective tax rate, adjusted net income, adjusted diluted earnings per share, adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA), adjusted EBITDA margin, net debt, net debt-to-adjusted EBITDA, trailing twelve months adjusted EBITDA, net working capital, annualized net revenue and net working capital as a percentage of annualized net revenue does not conform to U.S. generally accepted accounting principles (U.S. GAAP) and should not be construed as an alternative to the reported results determined in accordance with U.S. GAAP. Management has included this non-GAAP information to assist in understanding the operating performance of the Company and its operating segments as well as the comparability of results to the results of other companies. The non-GAAP information provided may not be consistent with the methodologies used by other companies. All non-GAAP information is reconciled with reported U.S. GAAP results in the “Regulation G Reconciliation” tables in this press release with the exception of our forward-looking non-GAAP measures contained above in our Fiscal 2025 Outlook, which the Company cannot reconcile to forward-looking GAAP results without unreasonable effort.

About H.B. Fuller:

As the largest pureplay adhesives company in the world, H.B. Fuller’s (NYSE: FUL) innovative, functional coatings, adhesives and sealants enhance the quality, safety and performance of products people use every day. Founded in 1887, with 2024 revenue of $3.6 billion, our mission to Connect What Matters is brought to life by more than 7,500 global team members who collaborate with customers across more than 30 market segments in over 140 countries to develop highly specified solutions that enable customers to bring world-changing innovations to their end markets. Learn more at www.hbfuller.com.

Safe Harbor for Forward-Looking Statements:

Certain statements in this press release may be considered forward-looking statements within the meaning of the federal securities laws, including Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements often address expected future business and financial performance, financial condition, and other matters, and often contain words or phrases such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “opportunity,” “outlook,” “plan,” “project,” “seek,” “should,” “strategy,” “target,” “will,” “will be,” “will continue,” “will likely result,” “would” and similar expressions, and variations or negatives of these words or phrases. These statements are subject to various risks and uncertainties that could cause our actual results to differ materially from those in the forward-looking statements, including but not limited to the following: the availability and pricing of raw materials; the impact of potential cybersecurity attacks and security breaches; failures in our information technology systems; the impact on the supply chain, raw material costs and pricing of our products due to military conflict, including between Russia and Ukraine and in the Middle East; the impact on our margins and product demand due to inflationary pressures; the substantial amount of debt we have incurred to finance our acquisition of Royal, our ability to repay or refinance our debt or to incur additional debt in the future, our need for a significant amount of cash to service and repay the debt and to pay dividends on our common stock, and the effect of debt covenants that limit the discretion of management in operating the business or in paying dividends; our ability to pay dividends and to pursue growth opportunities if we continue to pay dividends according to our current dividend policy; our ability to effectively manage and realize expected benefits from completed and future mergers, acquisitions, and divestitures; our ability to achieve expected synergies, cost savings and operating efficiencies from our restructuring initiatives and operational improvement projects within the expected time frames or at all; our ability to effectively implement Project ONE; uncertain political and economic conditions; fluctuations in product demand; competing products and pricing; our geographic and product mix; disruptions to our relationships with our major customers and suppliers; 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 consequences of the COVID-19 outbreak and other pandemics on our operations and financial results; the effect of new accounting pronouncements and accounting charges and credits; and similar matters.

Additional information about these various risks and uncertainties can be found in the “Risk Factors” section of our Form 10-K filings, and any updates to the risk factors in our Form 10-Q and 8-K filings with the SEC, but there may be other risks and uncertainties that we are unable to identify at this time or that we do not currently expect to have a material impact on the business. You should not place undue reliance on forward-looking statements, which speak only as of the date they are made. We do not undertake to update or revise any forward-looking statements, except as required by law. 

H.B. FULLER COMPANY AND SUBSIDIARIES

CONSOLIDATED FINANCIAL INFORMATION

In thousands, except per share amounts (unaudited)

   

 

 

Three Months

Ended

 

 

 

 

Three Months

Ended

 

 

 

 

 

November 30,

2024

 

 

Percent of Net

Revenue

 

 

December 2,

2023

 

 

Percent of Net

Revenue

 

Net revenue

 

$

923,284

 

 

 

100.0

%

 

$

902,879

 

 

 

100.0

%

Cost of sales

 

 

(658,424

)

 

 

(71.3

)%

 

 

(629,037

)

 

 

(69.7

)%

Gross profit

 

 

264,860

 

 

 

28.7

%

 

 

273,842

 

 

 

30.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

 

(188,453

)

 

 

(20.4

)%

 

 

(160,440

)

 

 

(17.8

)%

Other income, net

 

 

(44,396

)

 

 

(4.8

)%

 

 

4,918

 

 

 

0.5

%

Interest expense

 

 

(33,621

)

 

 

(3.6

)%

 

 

(33,297

)

 

 

(3.7

)%

Interest income

 

 

1,084

 

 

 

0.1

%

 

 

1,217

 

 

 

0.1

%

Income before income taxes and income from equity method investments

 

 

(526

)

 

 

(0.1

)%

 

 

86,240

 

 

 

9.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income taxes

 

 

(7,885

)

 

 

(0.9

)%

 

 

(42,274

)

 

 

(4.7

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from equity method investments

 

 

1,159

 

 

 

0.1

%

 

 

1,036

 

 

 

0.1

%

Net income including non-controlling interest

 

 

(7,252

)

 

 

(0.8

)%

 

 

45,002

 

 

 

5.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to non-controlling interest

 

 

(107

)

 

 

(0.0

)%

 

 

(11

)

 

 

(0.0

)%

Net income attributable to H.B. Fuller

 

$

(7,359

)

 

 

(0.8

)%

 

$

44,991

 

 

 

5.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

$

(0.13

)

 

 

 

 

 

$

0.83

 

 

 

 

 

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

 

$

(0.13

)

 

 

 

 

 

$

0.80

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

55,106

 

 

 

 

 

 

 

54,491

 

 

 

 

 

Diluted

 

 

56,658

 

 

 

 

 

 

 

56,161

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

H.B. FULLER COMPANY AND SUBSIDIARIES

CONSOLIDATED FINANCIAL INFORMATION

In thousands, except per share amounts (unaudited)

   

 

 

Year Ended

 

 

 

 

Year Ended

 

 

 

 

 

November 30,

2024

 

 

Percent of Net

Revenue

 

 

December 2,

2023

 

 

Percent of Net

Revenue

 

Net revenue

 

$

3,568,736

 

 

 

100.0

%

 

$

3,510,934

 

 

 

100.0

%

Cost of sales

 

 

(2,506,859

)

 

 

(70.2

)%

 

 

(2,502,037

)

 

 

(71.3

)%

Gross profit

 

 

1,061,877

 

 

 

29.8

%

 

 

1,008,897

 

 

 

28.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

 

(713,657

)

 

 

(20.0

)%

 

 

(653,760

)

 

 

(18.6

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income, net

 

 

(37,115

)

 

 

(1.0

)%

 

 

9,682

 

 

 

0.3

%

Interest expense

 

 

(133,124

)

 

 

(3.7

)%

 

 

(134,602

)

 

 

(3.8

)%

Interest income

 

 

4,682

 

 

 

0.1

%

 

 

3,943

 

 

 

0.1

%

Income before income taxes and income from equity method investments

 

 

182,663

 

 

 

5.1

%

 

 

234,160

 

 

 

6.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income taxes

 

 

(56,381

)

 

 

(1.6

)%

 

 

(93,529

)

 

 

(2.7

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from equity method investments

 

 

4,113

 

 

 

0.1

%

 

 

4,357

 

 

 

0.1

%

Net income including non-controlling interest

 

 

130,395

 

 

 

3.7

%

 

 

144,988

 

 

 

4.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to non-controlling interest

 

 

(139

)

 

 

(0.0

)%

 

 

(82

)

 

 

(0.0

)%

Net income attributable to H.B. Fuller

 

$

130,256

 

 

 

3.6

%

 

$

144,906

 

 

 

4.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

$

2.37

 

 

 

 

 

 

$

2.67

 

 

 

 

 

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

 

$

2.30

 

 

 

 

 

 

$

2.59

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

54,932

 

 

 

 

 

 

 

54,332

 

 

 

 

 

Diluted

 

 

56,629

 

 

 

 

 

 

 

55,958

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

H.B. FULLER COMPANY AND SUBSIDIARIES

REGULATION G RECONCILIATION

In thousands, except per share amounts (unaudited)

   

 

 

Three Months Ended

 

 

Year Ended

 

 

 

November 30,

 

December 2,

 

November 30,

 

December 2,

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to H.B. Fuller

 

$

(7,359

)

 

$

44,991

 

 

$

130,256

 

 

$

144,906

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition project costs 1

 

 

4,051

 

 

 

4,765

 

 

 

11,035

 

 

 

16,874

 

Organizational realignment 2

 

 

15,958

 

 

 

10,549

 

 

 

39,996

 

 

 

29,900

 

Project One 3

 

 

2,672

 

 

 

2,193

 

 

 

11,885

 

 

 

9,815

 

Business divestiture 4

 

 

47,267

 

 

 

 

 

 

47,267

 

 

 

 

Other 5

 

 

39

 

 

 

(3,903

)

 

 

(1,981

)

 

 

(611

)

Discrete tax items 6

 

 

(1,322

)

 

 

16,955

 

 

 

(5,469

)

 

 

26,085

 

Income tax effect on adjustments 7

 

 

(9,339

)

 

 

(1,158

)

 

 

(15,811

)

 

 

(10,604

)

Adjusted net income attributable to H.B. Fuller 8

 

 

51,967

 

 

 

74,392

 

 

 

217,178

 

 

 

216,365

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Add:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

33,621

 

 

 

33,297

 

 

 

133,122

 

 

 

131,913

 

Interest income

 

 

(1,084

)

 

 

(1,217

)

 

 

(4,679

)

 

 

(3,943

)

Income taxes

 

 

18,546

 

 

 

26,477

 

 

 

77,661

 

 

 

78,047

 

Depreciation and Amortization expense 9

 

 

45,286

 

 

 

39,653

 

 

 

170,573

 

 

 

158,456

 

Adjusted EBITDA 8

 

 

148,336

 

 

 

172,602

 

 

 

593,855

 

 

 

580,838

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted Shares

 

 

56,658

 

 

 

56,161

 

 

 

56,629

 

 

 

55,958

 

Adjusted diluted income per common share attributable to H.B. Fuller 8

 

$

0.92

 

 

$

1.32

 

 

$

3.84

 

 

$

3.87

 

Adjusted net revenue

 

$

923,284

 

 

$

902,879

 

 

$

3,568,736

 

 

$

3,510,934

 

Adjusted EBITDA margin 8

 

 

16.1

%

 

 

19.1

%

 

 

16.6

%

 

 

16.5

%

1 Acquisition project costs include costs related to evaluating, acquiring and integrating business acquisitions. Acquisition project costs include $4,583 and $1,421 in transaction costs (primarily consulting and professional fees, representations and warranties insurance premiums and employee acquisition-related travel expenses) and ($532) and $1,489 in purchase accounting costs (primarily professional fees for valuation services, inventory step-up cost and the impact of changes to contingent consideration liabilities after the completion of the purchase price allocation) and $0 and $1,855 in business integration costs (primarily costs of transition services agreements) for the three months ended November 30, 2024 and December 2, 2023, respectively. Acquisition project costs include $9,718 and $6.960 in transaction costs (primarily consulting and professional fees, representations and warranties insurance premiums and employee acquisition related travel expenses), $740 and $7,712 in purchase accounting costs (primarily professional fees for valuation services, inventory step-up cost and the impact of changes to contingent consideration liabilities after the completion of the purchase price allocation) and $577 and $2,202 in business integration costs (primarily costs of transition services agreements and for the three months ended March 2, 2024 and the twelve months ended December 2, 2023, retention bonuses paid to employees of the acquired entities) for the years ended November 30, 2024 and December 2, 2023, respectively.

2 Organizational realignment includes costs incurred as a direct result of the organizational realignment program, including professional fees related to legal entity and business structure changes, employee retention and severance costs, and facility rationalization costs related to the closure of production facilities and consolidation of business activities. Facility rationalization costs include plant closure costs, the impact of accelerated depreciation, and for the three months ended March 2, 2024 and the twelve months ended December 2, 2023, operational inefficiencies. Organizational realignment includes $2,169 and $812 in professional fees related to legal entity and business structure changes, $6,832 and $8,110 in employee severance and other related costs, and $6,957 and $1,627 related to facility rationalization costs for the three months ended November 30, 2024 and December 2, 2023, respectively. Organizational realignment includes $9,084 and $1,525 in professional fees related to legal entity and business structure changes, $16,553 and $25,490 in employee severance and other related costs, and $14,359 and $2,885 related to facility rationalization costs for the year ended November 30, 2024 and December 2, 2023, respectively.

3 Project One includes non-capitalizable project costs related implementing our global Enterprise Resource Planning system, including upgrading to SAP S/4HANA®, which will upgrade and standardize our information system.

4 Business divestiture for the three months and year ended November 30, 2024 includes impairment losses for goodwill and long-lived assets, and project costs incurred as a direct result of the pending sale of the North America Flooring business, which is a component of our Construction Adhesives operating segment. Impairment losses represent the difference between the book value of the assets held for sale and their net realizable value.

5 Other includes a gain from insurance recoveries and a loss from the write-off of a cost method investment for the year ended November 30, 2024.

6 Discrete tax items for the three months ended November 30, 2024 are related to various foreign tax matters and for the year ended November 30, 2024 are related to various foreign tax matters as well as excess tax benefit related to U.S. stock compensation. Discrete tax items for the three months and year ended December 2, 2023 are related to the tax impact of withholding tax recorded on earnings that are no longer permanently reinvested, as well as other various U.S. and foreign tax matters.

7 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.

8 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.

9 Depreciation and amortization expense added back for EBITDA is adjusted for amounts already included in adjusted net income attributable to H.B. Fuller totaling ($711) and ($1,036) for the three months ended November 30, 2024 and December 2, 2023, respectively and ($4,137) and ($1,384) for the year ended November 30, 2024 and December 2, 2023, respectively.

H.B. FULLER COMPANY AND SUBSIDIARIES

SEGMENT FINANCIAL INFORMATION

In thousands (unaudited) 

   

 

 

Three Months Ended

 

 

Year Ended

 

 

November 30,

 

December 2,

November 30,

 

December 2,

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Net Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hygiene, Health and Consumable Adhesives

 

$

395,693

 

 

$

411,085

 

 

$

1,546,351

 

 

$

1,601,487

 

Engineering Adhesives

 

 

381,931

 

 

 

365,735

 

 

 

1,459,137

 

 

 

1,428,744

 

Construction Adhesives

 

 

145,660

 

 

 

126,059

 

 

 

563,248

 

 

 

480,703

 

Corporate unallocated

 

 

 

 

 

 

 

 

 

 

 

 

Total H.B. Fuller

 

$

923,284

 

 

$

902,879

 

 

$

3,568,736

 

 

$

3,510,934

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment Operating Income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hygiene, Health and Consumable Adhesives

 

$

40,266

 

 

$

65,614

 

 

$

187,413

 

 

$

215,088

 

Engineering Adhesives

 

 

53,516

 

 

 

57,539

 

 

 

193,038

 

 

 

187,346

 

Construction Adhesives

 

 

4,962

 

 

 

3,772

 

 

 

25,304

 

 

 

5,961

 

Corporate unallocated

 

 

(22,336

)

 

 

(13,523

)

 

 

(57,535

)

 

 

(53,258

)

Total H.B. Fuller

 

$

76,408

 

 

$

113,402

 

 

$

348,220

 

 

$

355,137

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA 8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hygiene, Health and Consumable Adhesives

 

$

54,969

 

 

$

81,677

 

 

$

246,762

 

 

$

275,802

 

Engineering Adhesives

 

 

75,153

 

 

 

74,020

 

 

 

270,286

 

 

 

255,778

 

Construction Adhesives

 

 

17,888

 

 

 

15,933

 

 

 

75,201

 

 

 

55,517

 

Corporate unallocated

 

 

326

 

 

 

972

 

 

 

1,606

 

 

 

(6,259

)

Total H.B. Fuller

 

$

148,336

 

 

$

172,602

 

 

$

593,855

 

 

$

580,838

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA Margin 8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hygiene, Health and Consumable Adhesives

 

 

13.9

%

 

 

19.9

%

 

 

16.0

%

 

 

17.2

%

Engineering Adhesives

 

 

19.7

%

 

 

20.2

%

 

 

18.5

%

 

 

17.9

%

Construction Adhesives

 

 

12.3

%

 

 

12.6

%

 

 

13.4

%

 

 

11.5

%

Corporate unallocated

 

NMP

 

 

NMP

 

 

NMP

 

 

NMP

 

Total H.B. Fuller

 

 

16.1

%

 

 

19.1

%

 

 

16.6

%

 

 

16.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NMP = non-meaningful percentage

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

H.B. FULLER COMPANY AND SUBSIDIARIES

REGULATION G RECONCILIATION

In thousands, except per share amounts (unaudited)

   

 

 

Three Months Ended

 

 

Year Ended

 

 

November 30,

 

December 2,

 

November 30,

 

December 2,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Income before income taxes and income from equity method investments

 

$

(526

)

 

$

86,240

 

 

$

182,663

 

 

$

234,160

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition project costs 1

 

 

4,051

 

 

 

4,765

 

 

 

11,035

 

 

 

16,874

 

Organizational realignment 2

 

 

15,958

 

 

 

10,549

 

 

 

39,996

 

 

 

29,900

 

Project One 3

 

 

2,672

 

 

 

2,193

 

 

 

11,885

 

 

 

9,815

 

Business divestiture 4

 

 

47,267

 

 

 

 

 

 

47,267

 

 

 

 

Other 5

 

 

39

 

 

 

(3,903

)

 

 

(1,981

)

 

 

(611

)

Adjusted income before income taxes and income from equity method investments 10

 

$

69,461

 

 

$

99,844

 

 

$

290,865

 

 

$

290,138

 

10 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

 

 

Year Ended

 

 

 

November 30,

 

December 2,

 

November 30,

 

December 2,

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Income Taxes

 

$

(7,885

)

 

$

(42,274

)

 

$

(56,381

)

 

$

(93,529

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition project costs 1

 

 

(77

)

 

 

(405

)

 

 

(1,125

)

 

 

(3,127

)

Organizational realignment 2

 

 

(305

)

 

 

(898

)

 

 

(4,350

)

 

 

(5,206

)

Project One 3

 

 

(51

)

 

 

(187

)

 

 

(1,669

)

 

 

(1,848

)

Business divestiture 4

 

 

(8,905

)

 

 

 

 

 

(8,905

)

 

 

 

Other 5

 

 

(1

)

 

 

332

 

 

 

238

 

 

 

(422

)

Discrete tax items 6

 

 

(1,322

)

 

 

16,955

 

 

 

(5,469

)

 

 

26,085

 

Adjusted income taxes 11

 

$

(18,546

)

 

$

(26,477

)

 

$

(77,661

)

 

$

(78,047

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted income before income taxes and income from equity method investments

 

$

69,461

 

 

$

99,844

 

 

$

290,865

 

 

$

290,138

 

Adjusted effective income tax rate 11

 

 

26.7

%

 

 

26.5

%

 

 

26.7

%

 

 

26.9

%

11 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

 

 

Year Ended

 

 

 

November 30,

 

December 2,

 

November 30,

December 2,

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net revenue

 

$

923,284

 

 

$

902,879

 

 

$

3,568,736

 

 

$

3,510,934

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

$

264,860

 

 

$

273,842

 

 

$

1,061,877

 

 

$

1,008,897

 

Gross profit margin

 

 

28.7

%

 

 

30.3

%

 

 

29.8

%

 

 

28.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition project costs 1

 

 

1

 

 

 

529

 

 

 

1,001

 

 

 

3,146

 

Organizational realignment 2

 

 

8,035

 

 

 

8,136

 

 

 

18,714

 

 

 

18,108

 

Project ONE 3

 

 

24

 

 

 

223

 

 

 

37

 

 

 

223

 

Other 5

 

 

 

 

 

52

 

 

 

(1

)

 

 

530

 

Adjusted gross profit 12

 

$

272,920

 

 

$

282,782

 

 

$

1,081,628

 

 

$

1,030,904

 

Adjusted gross profit margin 12

 

 

29.6

%

 

 

31.3

%

 

 

30.3

%

 

 

29.4

%

12 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

 

 

Year Ended

 

 

 

November 30,

December 2,

 

November 30,

December 2,

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

$

(188,453

)

 

$

(160,440

)

 

$

(713,657

)

 

$

(653,760

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition project costs 1

 

 

4,558

 

 

 

4,236

 

 

 

10,519

 

 

 

13,831

 

Organizational realignment 2

 

 

7,031

 

 

 

2,333

 

 

 

19,354

 

 

 

11,712

 

Project ONE 3

 

 

2,648

 

 

 

1,969

 

 

 

11,847

 

 

 

9,592

 

Other 5

 

 

41

 

 

 

(3,954

)

 

 

(3,946

)

 

 

(3,882

)

Adjusted selling, general and administrative expenses 13

 

$

(174,175

)

 

$

(155,856

)

 

$

(675,883

)

 

$

(622,507

)

13 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)

    

Three Months Ended:

 

Hygiene, Health and Consumable

 

Engineering

 

Construction

 

 

 

 

 

Corporate

 

 

H.B. Fuller

 

November 30, 2024

 

Adhesives

 

 

Adhesives

 

 

Adhesives

 

Total

 

 

Unallocated

 

 

Consolidated

 

Net income attributable to H.B. Fuller

 

$

41,767

 

 

$

54,564

 

 

$

6,393

 

 

$

102,724

 

 

$

(110,083

)

 

$

(7,359

)

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition project costs 1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4,051

 

 

 

4,051

 

Organizational realignment 2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

15,958

 

 

 

15,958

 

Project One 3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,672

 

 

 

2,672

 

Business divestiture 4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

47,267

 

 

 

47,267

 

Other 5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

39

 

 

 

39

 

Discrete tax items 6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,322

)

 

 

(1,322

)

Income tax effect on adjustments 7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(9,339

)

 

 

(9,339

)

Adjusted net income attributable to H.B. Fuller 8

 

 

41,767

 

 

 

54,564

 

 

 

6,393

 

 

 

102,724

 

 

 

(50,757

)

 

 

51,967

 

Add:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

33,621

 

 

 

33,621

 

Interest income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,084

)

 

 

(1,084

)

Income taxes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

18,546

 

 

 

18,546

 

Depreciation and amortization expense 9

 

 

13,202

 

 

 

20,589

 

 

 

11,495

 

 

 

45,286

 

 

 

 

 

 

45,286

 

Adjusted EBITDA 8

 

$

54,969

 

 

$

75,153

 

 

$

17,888

 

 

$

148,010

 

 

$

326

 

$

148,336

 

Adjusted net revenue

 

$

395,693

 

 

$

381,931

 

 

$

145,660

 

 

$

923,284

 

 

 

 

 

$

923,284

 

Adjusted EBITDA margin 8

 

 

13.9

%

 

 

19.7

%

 

 

12.3

%

 

 

16.0

%

 

NMP

 

 

 

16.1

%

Year Ended

 

Hygiene, Health and Consumable

 

Engineering

 

Construction

 

 

 

 

 

Corporate

 

 

H.B. Fuller

 

November 30, 2024

 

Adhesives

 

 

Adhesives

 

 

Adhesives

 

 

Total

 

 

Unallocated

 

 

Consolidated

 

Net income attributable to H.B. Fuller

 

$

193,403

 

 

$

197,245

 

 

$

31,028

 

 

$

421,676

 

 

$

(291,420

)

 

$

130,256

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition project costs 1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

11,035

 

 

 

11,035

 

Organizational realignment 2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

39,996

 

 

 

39,996

 

Project One 3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

11,885

 

 

 

11,885

 

Business divestiture 4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

47,267

 

 

 

47,267

 

Other 5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,981

)

 

 

(1,981

)

Discrete tax items 6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(5,469

)

 

 

(5,469

)

Income tax effect on adjustments 7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(15,811

)

 

 

(15,811

)

Adjusted net income attributable to H.B. Fuller 8

 

 

193,403

 

 

 

197,245

 

 

 

31,028

 

 

 

421,676

 

 

 

(204,498

)

 

 

217,178

 

Add:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

133,122

 

 

 

133,122

 

Interest income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(4,679

)

 

 

(4,679

)

Income taxes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

77,661

 

 

 

77,661

 

Depreciation and amortization expense 9

 

 

53,359

 

 

 

73,041

 

 

 

44,173

 

 

 

170,573

 

 

 

 

 

 

170,573

 

Adjusted EBITDA 8

 

$

246,762

 

 

$

270,286

 

 

$

75,201

 

 

$

592,249

 

 

$

1,606

 

 

$

593,855

 

Adjusted net revenue

 

 

1,546,351

 

 

 

1,459,137

 

 

 

563,248

 

 

$

3,568,736

 

 

 

 

 

 

3,568,736

 

Adjusted EBITDA margin 8

 

 

16.0

%

 

 

18.5

%

 

 

13.4

%

 

 

16.6

%

 

NMP

 

 

 

16.6

%

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)

   

Three Months Ended:

 

Hygiene, Health and Consumable

 

Engineering

 

Construction

 

 

 

 

 

Corporate

 

 

H.B. Fuller

 

December 2, 2023

 

Adhesives

 

 

Adhesives

 

 

Adhesives

 

 

Total

 

 

Unallocated

 

 

Consolidated

 

Net income attributable to H.B. Fuller

 

$

67,438

 

 

$

58,857

 

 

$

5,682

 

 

$

131,977

 

 

$

(86,986

)

 

$

44,991

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition project costs 1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4,765

 

 

 

4,765

 

Organizational realignment 2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10,549

 

 

 

10,549

 

Project One 3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,193

 

 

 

2,193

 

Other 5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(3,903

)

 

 

(3,903

)

Discrete tax items 6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

16,955

 

 

 

16,955

 

Income tax effect on adjustments 7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,158

)

 

 

(1,158

)

Adjusted net income attributable to H.B. Fuller 8

 

 

67,438

 

 

 

58,857

 

 

 

5,682

 

 

 

131,977

 

 

 

(57,585

)

 

 

74,392

 

Add:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

33,297

 

 

 

33,297

 

Interest income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,217

)

 

 

(1,217

)

Income taxes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

26,477

 

 

 

26,477

 

Depreciation and amortization expense 9

 

 

14,239

 

 

 

15,163

 

 

 

10,251

 

 

 

39,653

 

 

 

 

 

 

39,653

 

Adjusted EBITDA 8

 

$

81,677

 

 

$

74,020

 

 

$

15,933

 

 

$

171,630

 

 

$

972

 

 

$

172,602

 

Adjusted net revenue

 

$

411,085

 

 

$

365,735

 

 

$

126,059

 

 

$

902,879

 

 

 

 

 

$

902,879

 

Adjusted EBITDA margin 8

 

 

19.9

%

 

 

20.2

%

 

 

12.6

%

 

 

19.0

%

 

NMP

 

 

 

19.1

%

Year Ended

 

Hygiene, Health and Consumable

 

Engineering

 

Construction

 

 

 

 

 

Corporate

 

 

H.B. Fuller

 

December 2, 2023

 

Adhesives

 

 

Adhesives

 

 

Adhesives

 

 

Total

 

 

Unallocated

 

 

Consolidated

 

Net income attributable to H.B. Fuller

 

$

222,404

 

 

$

192,635

 

 

$

13,602

 

 

$

428,641

 

 

$

(283,735

)

 

$

144,906

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition project costs 1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

16,874

 

 

 

16,874

 

Organizational realignment 2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

29,900

 

 

 

29,900

 

Project One 3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

9,815

 

 

 

9,815

 

Other 5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(611

)

 

 

(611

)

Discrete tax items 6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

26,085

 

 

 

26,085

 

Income tax effect on adjustments 7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(10,604

)

 

 

(10,604

)

Adjusted net income attributable to H.B. Fuller 8

 

 

222,404

 

 

 

192,635

 

 

 

13,602

 

 

 

428,641

 

 

 

(212,276

)

 

 

216,365

 

Add:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

131,913

 

 

 

131,913

 

Interest income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(3,943

)

 

 

(3,943

)

Income taxes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

78,047

 

 

 

78,047

 

Depreciation and amortization expense 9

 

 

53,398

 

 

 

63,143

 

 

 

41,915

 

 

 

158,456

 

 

 

 

 

 

158,456

 

Adjusted EBITDA 8

 

$

275,802

 

 

$

255,778

 

 

$

55,517

 

 

$

587,097

 

 

$

(6,259

)

 

$

580,838

 

Adjusted net revenue

 

$

1,601,487

 

 

$

1,428,744

 

 

$

480,703

 

 

$

3,510,934

 

 

 

 

 

$

3,510,934

 

Adjusted EBITDA margin 8

 

 

17.2

%

 

 

17.9

%

 

 

11.5

%

 

 

16.7

%

 

NMP

 

 

 

16.5

%

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)

     

Net revenue growth versus 2023

 

Three Months Ended

 

 

Year Ended

 

 

 

 

November 30, 2024

 

 

November 30, 2024

 

 

Price

 

 

(1.5

)%

 

 

(2.7

)%

 

Volume

 

 

1.3

%

 

 

1.7

%

 

Organic Growth 14

 

 

(0.2

)%

 

 

(1.0

)%

 

M&A

 

 

2.7

%

 

 

3.6

%

 

Constant Currency

 

 

2.5

%

 

 

2.6

%

 

F/X

 

 

(0.2

)%

 

 

(1.0

)%

 

Total H.B. Fuller Net Revenue Growth

 

 

2.3

%

 

 

1.6

%

 

Net revenue growth versus 2023

 

Three Months Ended

 

 

 

November 30, 2024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net

 

 

 

 

 

 

Constant

 

 

 

 

 

 

Organic

 

 

 

Revenue

 

 

F/X

 

 

Currency

 

 

M&A

 

 

Growth 14

 

Hygiene, Health and Consumable Adhesives

 

 

(3.7

)%

 

 

(1.5

)%

 

 

(2.2

)%

 

 

0.0

%

 

 

(2.2

)%

Engineering Adhesives

 

 

4.4

%

 

 

1.0

%

 

 

3.4

%

 

 

5.3

%

 

 

(1.9

)%

Construction Adhesives

 

 

15.5

%

 

 

0.8

%

 

 

14.7

%

 

 

4.2

%

 

 

10.5

%

Total H.B. Fuller

 

 

2.3

%

 

 

(0.2

)%

 

 

2.5

%

 

 

2.7

%

 

 

(0.2

)%

Net revenue growth versus 2023

 

Year Ended

 

 

 

November 30, 2024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net

 

 

 

 

 

 

Constant

 

 

 

 

 

 

Organic

 

 

 

Revenue

 

 

F/X

 

 

Currency

 

 

M&A

 

 

Growth 14

 

Hygiene, Health and Consumable Adhesives

 

 

(3.4

)%

 

 

(1.7

)%

 

 

(1.7

)%

 

 

2.3

%

 

 

(4.0

)%

Engineering Adhesives

 

 

2.1

%

 

 

(0.6

)%

 

 

2.7

%

 

 

3.7

%

 

 

(1.0

)%

Construction Adhesives

 

 

17.2

%

 

 

0.2

%

 

 

17.0

%

 

 

7.5

%

 

 

9.5

%

Total H.B. Fuller

 

 

1.6

%

 

 

(1.0

)%

 

 

2.6

%

 

 

3.6

%

 

 

(1.0

)%

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

H.B. FULLER COMPANY AND SUBSIDIARIES

REGULATION G RECONCILIATION

In thousands (unaudited)

   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Trailing Twelve

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Months17 Ended

 

 

Year Ended

 

 

December 2, 2023

March 2, 2024

June 1, 2024

August 31, 2024

August 31, 2024

November 30, 2024

December 2, 2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to H.B. Fuller

 

$

44,991

 

 

$

30,991

 

 

$

51,264

 

 

$

55,361

 

 

$

182,607

 

 

$

130,256

 

 

$

144,906

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition project costs 1

 

 

4,765

 

 

 

2,043

 

 

 

1,467

 

 

 

3,474

 

 

 

11,749

 

 

 

11,035

 

 

 

16,874

 

Organizational realignment 2

 

10,549

 

 

 

7,262

 

 

 

7,275

 

 

 

9,471

 

 

 

34,557

 

 

 

39,996

 

 

 

29,900

 

Project One 3

 

 

2,193

 

 

 

3,213

 

 

 

2,845

 

 

 

3,154

 

 

 

11,405

 

 

 

11,885

 

 

 

9,815

 

Business divestiture 4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

47,267

 

 

 

 

Other 5

 

 

(3,903

)

 

 

 

 

 

914

 

 

 

(2,904

)

 

 

(5,893

)

 

 

(1,981

)

 

 

(611

)

Discrete tax items 15

 

 

16,955

 

 

 

(2,527

)

 

 

1,317

 

 

 

(2,937

)

 

 

12,808

 

 

 

(5,469

)

 

 

26,085

 

Income tax effect on adjustments 5

 

 

(1,158

)

 

 

(3,290

)

 

 

(1,558

)

 

 

(1,624

)

 

 

(7,630

)

 

 

(15,811

)

 

 

(10,604

)

Adjusted net income attributable to H.B. Fuller 8

 

 

74,392

 

 

 

37,692

 

 

 

63,524

 

 

 

63,995

 

 

 

239,603

 

 

 

217,178

 

 

 

216,365

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Add:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

33,297

 

 

 

31,901

 

 

 

32,313

 

 

 

35,287

 

 

 

132,798

 

 

 

133,122

 

 

 

131,913

 

Interest income

 

 

(1,217

)

 

 

(1,307

)

 

 

(1,197

)

 

 

(1,090

)

 

 

(4,812

)

 

 

(4,679

)

 

 

(3,943

)

Adjusted Income taxes

 

 

26,477

 

 

 

13,631

 

 

 

22,658

 

 

 

22,825

 

 

 

85,591

 

 

 

77,661

 

 

 

78,047

 

Depreciation and Amortization expense 16

 

 

39,653

 

 

 

41,101

 

 

 

39,952

 

 

 

44,235

 

 

 

164,941

 

 

 

170,573

 

 

 

158,456

 

Adjusted EBITDA 8

 

$

172,602

 

 

$

123,018

 

 

$

157,250

 

 

$

165,252

 

 

$

618,122

 

 

$

593,855

 

 

$

580,838

 

15 Discrete tax items for the three months ended March 2, 2024 are related to various foreign tax matters as well as excess tax benefit related to U.S. stock compensation. Discrete tax items for the three months ended June 1, 2024 are related to various foreign tax matters as well as excess tax benefit related to U.S. stock compensation. Discrete tax items for the three months ended August 31, 2024 are related to various foreign tax matters as well as excess tax benefit related to U.S. stock compensation. Discrete tax items for the three months ended November 30, 2024 are related to various foreign tax matters and for the year ended November 30, 2024 are related to various foreign tax matters as well as excess tax benefit related to U.S. stock compensation. Discrete tax items for the three months and year ended December 2, 2023 are related to the tax impact of withholding tax recorded on earnings that are no longer permanently reinvested, as well as other various U.S. and foreign tax matters.

16 Depreciation and amortization expense added back for EBITDA is adjusted for amounts already included in adjusted net income attributable to H.B. Fuller. Depreciation and amortization expense added back was ($1,036) for the three months ended December 2, 2023, ($2,422) for the three months ended March 2, 2024, ($1,198) for the three months ended June 1, 2024, $194 for the three months ended August 31, 2024, ($4,137) for the year ended November 30, 2024 and ($1,384) for the year ended December 2, 2023.

17 Trailing twelve months adjusted EBITDA is a non-GAAP financial measure and is defined as adjusted EBITDA for the twelve-month period ended on the date presented. The table above provides a reconciliation of trailing twelve month adjusted EBITDA to net income attributable to H.B. Fuller for the trailing twelve-month period presented, the most directly comparable financial measure determined and reported in accordance with U.S. GAAP.

H.B. FULLER COMPANY AND SUBSIDIARIES

REGULATION G RECONCILIATION

In thousands (unaudited)

   

 

 

August 31, 2024

 

 

November 30, 2024

 

December 2, 2023

 

Total debt

 

$

2,021,070

 

 

$

2,010,640

 

 

$

1,838,431

 

Less: Cash and cash equivalents

 

 

131,412

 

 

 

169,352

 

 

 

179,453

 

Net debt18

 

$

1,889,658

 

 

$

1,841,288

 

 

$

1,658,978

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Trailing twelve months 18 / Year ended Adjusted EBITDA

 

$

618,122

 

 

$

593,855

 

 

 

580,838

 

Net Debt-to-Adjusted EBITDA18

 

 

3.1

 

 

 

3.1

 

 

 

2.9

 

18 Net debt and net debt-to-adjusted EBITDA are non-GAAP financial measures. Net debt is defined as total debt less cash and cash equivalents. Net debt-to-adjusted EBITDA is defined as net debt divided by trailing twelve months adjusted EBITDA. The calculations of these non-GAAP financial measures are shown in the table above. The table above provides a reconciliation of each of these non-GAAP financial measures to total debt, the most directly comparable financial measure determined and reported in accordance with U.S. GAAP.

H.B. FULLER COMPANY AND SUBSIDIARIES

REGULATION G RECONCILIATION

In thousands (unaudited)

 

 

August 31, 2024

 

November 30, 2024

 

December 2, 2023

 

Trade receivables, net

 

$

574,781

 

 

$

558,336

 

 

$

577,932

 

Inventory

 

 

509,029

 

 

 

467,498

 

 

 

442,040

 

Trade payables

 

 

493,550

 

 

 

491,435

 

 

 

439,700

 

Net working capital19

 

$

590,260

 

 

$

534,399

 

 

$

580,272

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net revenue three months ended

 

$

917,927

 

 

$

923,284

 

 

$

902,879

 

Annualized net revenue19

 

 

3,671,708

 

 

 

3,693,137

 

 

 

3,611,516

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net working capital as a percentage of annual net revenue19

 

 

16.1

%

 

 

14.5

%

 

 

16.1

%

19 Net working capital, annualized net revenue and net working capital as a percentage of annualized net revenue are non-GAAP financial measures. Net working capital is defined as trade receivables, net plus inventory less trade payables. Annualized net revenue is defined as net revenue for the three months ended on the date presented multiplied by four. Net working capital as a percentage of annualized net revenue is net working capital divided by annualized net revenue. The calculations of these non-GAAP financial measures are shown in the table above. The table above provides a reconciliation of each of these non-GAAP financial measures to the most directly comparable financial measure determined and reported in accordance with U.S. GAAP.

CONSOLIDATED BALANCE SHEETS

H.B. Fuller Company and Subsidiaries

(In thousands, except share and per share amounts)

   

 

 

November 30,

 

 

December 2,

 

 

 

2024

 

 

2023

 

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

169,352

 

 

$

179,453

 

Trade receivables, net

 

 

558,336

 

 

 

577,932

 

Inventories

 

 

467,498

 

 

 

442,040

 

Other current assets

 

 

104,019

 

 

 

112,678

 

Total current assets

 

 

1,299,205

 

 

 

1,312,103

 

 

 

 

 

 

 

 

 

 

Property, plant and equipment, net

 

 

881,927

 

 

 

824,655

 

Goodwill

 

 

1,532,221

 

 

 

1,486,512

 

Other intangibles, net

 

 

770,226

 

 

 

729,140

 

Other assets

 

 

449,665

 

 

 

371,165

 

Total assets

 

$

4,933,244

 

 

$

4,723,575

 

 

 

 

 

 

 

 

 

 

Liabilities, non-controlling interest and total equity

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Notes payable

 

$

587

 

 

$

1,841

 

Trade payables

 

 

491,435

 

 

 

439,700

 

Accrued compensation

 

 

106,005

 

 

 

95,680

 

Income taxes payable

 

 

24,225

 

 

 

47,688

 

Other accrued expenses

 

 

97,038

 

 

 

107,902

 

Total current liabilities

 

 

719,290

 

 

 

692,811

 

 

 

 

 

 

 

 

 

 

Long-term debt, net of current maturities

 

 

2,010,052

 

 

 

1,836,590

 

Accrued pension liabilities

 

 

51,755

 

 

 

50,189

 

Other liabilities

 

 

322,299

 

 

 

388,072

 

Total liabilities

 

 

3,103,396

 

 

 

2,967,662

 

 

 

 

 

 

 

 

 

 

Commitments and contingencies (Note 14)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity:

 

 

 

 

 

 

 

 

H.B. Fuller stockholders’ equity:

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

Common stock, par value $1.00 per share, Shares authorized – 160,000,000, Shares outstanding – 54,657,103 and 54,092,987 for 2024 and 2023, respectively

 

 

54,657

 

 

 

54,093

 

Additional paid-in capital

 

 

322,636

 

 

 

301,485

 

Retained Earnings

 

 

1,924,761

 

 

 

1,842,507

 

Accumulated other comprehensive loss

 

 

(473,395

)

 

 

(442,880

)

Total H.B. Fuller stockholders’ equity

 

 

1,828,659

 

 

 

1,755,205

 

Non-controlling interest

 

 

1,189

 

 

 

708

 

Total equity

 

 

1,829,848

 

 

 

1,755,913

 

Total liabilities, non-controlling interest and total equity

 

$

4,933,244

 

 

$

4,723,575

 

CONSOLIDATED STATEMENTS of CASH FLOWS

H.B. Fuller Company and Subsidiaries

(In thousands)

   

 

 

Fiscal Years

 

 

 

November 30,

 

 

December 2,

 

 

December 3,

 

 

 

2024

 

 

2023

 

 

2022

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

Net income including non-controlling interest

 

$

130,395

 

 

$

144,988

 

 

$

180,407

 

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

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation

 

 

91,054

 

 

 

80,327

 

 

 

72,593

 

Amortization

 

 

83,656

 

 

 

79,514

 

 

 

74,383

 

Deferred income taxes

 

 

(36,186

)

 

 

(25,114

)

 

 

(15,230

)

(Income) loss from equity method investments, net of dividends received

 

 

(537

)

 

 

1,259

 

 

 

(9

)

Foreign currency remeasurement

 

 

47,533

 

 

 

(28,011)

 

 

 

6,213

 

Loss on impairment of assets held for sale

 

 

47,267

 

 

 

 

 

 

 

Loss on impairment of cost method investment

 

 

1,966

 

 

 

 

 

 

 

Gain from insurance proceeds

 

 

(6,064

)

 

 

 

 

 

 

 

 

(Gain) loss on disposal of assets

 

 

(501

)

 

 

59

 

 

 

(1,195

)

Share-based compensation

 

 

21,914

 

 

 

19,911

 

 

 

24,368

 

Pension and other postretirement benefit plan contributions

 

 

(2,909

)

 

 

(4,346

)

 

 

(3,009

)

Pension and other postretirement benefit plan income

 

 

(14,444

)

 

 

(18,591

)

 

 

(24,021

)

Debt issuance cost write-off

 

 

 

 

 

2,689

 

 

 

 

Loss on fair value adjustment on contingent consideration liabilities

 

 

 

 

 

2,893

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

Trade receivables, net

 

 

10,749

 

 

 

68,721

 

 

 

(24,753

)

Inventories

 

 

(30,099

)

 

 

72,576

 

 

 

(55,772

)

Other assets

 

 

(55,274

)

 

 

(7,927

)

 

 

46,499

 

Trade payables

 

 

47,915

 

 

 

(57,752

)

 

 

(22,629

)

Accrued compensation

 

 

12,653

 

 

 

(13,836

)

 

 

1,135

 

Other accrued expenses

 

 

6,008

 

 

 

(3,070

)

 

 

6,303

 

Income taxes payable

 

 

(23,090

)

 

 

41,190

 

 

 

(12,873

)

Other liabilities

 

 

(30,762

)

 

 

22,918

 

 

 

4,104

 

Net cash provided by operating activities

 

 

301,244

 

 

 

378,398

 

 

 

256,514

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

 

 

 

 

Purchased property, plant and equipment

 

 

(139,238

)

 

 

(119,137

)

 

 

(129,964

)

Purchased businesses, net of cash acquired

 

 

(273,863

)

 

 

(205,093

)

 

 

(250,807

)

Proceeds from sale of property, plant and equipment

 

 

1,152

 

 

 

5,029

 

 

 

1,556

 

Proceeds from insurance recoveries

 

 

6,064

 

 

 

 

 

 

 

Cash received from government grant

 

 

 

 

 

 

 

 

3,928

 

Net cash used in investing activities

 

 

(405,885

)

 

 

(319,201

)

 

 

(375,287

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

 

 

 

 

Proceeds from issuance of long-term debt

 

 

1,932,900

 

 

 

2,233,300

 

 

 

335,000

 

Repayment of long-term debt

 

 

(1,764,870

)

 

 

(2,126,450

)

 

 

(159,500

)

Payment of debt issue costs

 

 

(3,493

)

 

 

(10,214

)

 

 

(600

)

Net (payment on) proceeds from notes payable

 

 

(1,219

)

 

 

(28,674

)

 

 

3,455

 

Dividends paid

 

 

(47,598

)

 

 

(43,395

)

 

 

(39,207

)

Contingent consideration payment

 

 

 

 

 

(1,477

)

 

 

(5,000

)

Proceeds from stock options exercised

 

 

35,927

 

 

 

14,619

 

 

 

30,122

 

Repurchases of common stock

 

 

(39,558

)

 

 

(2,567

)

 

 

(3,950

)

Net cash provided by financing activities

 

 

112,089

 

 

 

35,142

 

 

 

160,320

 

Effect of exchange rate changes on cash and cash equivalents

 

 

(17,549

)

 

 

5,204

 

 

 

(23,423

)

Net change in cash and cash equivalents

 

 

(10,101

)

 

 

99,543

 

 

 

18,124

 

Cash and cash equivalents at beginning of year

 

 

179,453

 

 

 

79,910

 

 

 

61,786

 

Cash and cash equivalents at end of year

 

$

169,352

 

 

$

179,453

 

 

$

79,910

 

 

Steven Brazones

Investor Relations Contact

651-236-5060

KEYWORDS: Minnesota United States North America

INDUSTRY KEYWORDS: Retail Chemicals/Plastics Other Construction & Property Home Goods Manufacturing Specialty Construction & Property

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