StockSelector.com
  Research, Select, & Monitor Sunday, July 22, 2018 1:13:32 AM ET  
Trade Ideas The Market Industries Stocks Portfolio

 
Ticker Lookup
H.B. Fuller Company$56.26($.33)(.58%)

  Quote | Ranking | Chart | Valuations | Sentiment | Industry | News | Earnings | Analysts | More...

Your Target?

 H.B. Fuller Reports Fourth Quarter and Fiscal Year 2017 Results
   Wednesday, January 24, 2018 7:50:22 AM ET

Fiscal Year 2017 Diluted EPS $1.13, Fiscal Year Adjusted Diluted EPS $2.45;

Excluding Impacts of the Royal Transaction, Fiscal Year Adjusted Diluted EPS $2.50Fiscal Year 2018 Adjusted Diluted EPS Guidance set at $3.10 to $3.40

H.B. Fuller Company (FUL ) today reported financial results for the fourth quarter and fiscal year that ended December 2, 2017 and initiated guidance for fiscal 2018. In October 2017, the Company acquired Royal Adhesives & Sealants, LLC ("Royal"), which had net revenue of $658 million during the 2017 fiscal year ended December 2, 2017.

Items of Note for 2018 Guidance:

-- More than 30 percent revenue growth versus 2017 fiscal year; 6 to 7 percent revenue growth on a pro forma basis;

-- Adjusted EBITDA of approximately $465 million, an increase of about 60 percent versus 2017 and approximately 13 percent growth versus 2017 on a pro forma basis;

-- Adjusted diluted EPS in the range of $3.10 to $3.40, an increase of 24 percent to 36 percent versus 2017;

-- Core tax rate of between 25 and 27 percent, reflecting an estimate based on the recently passed legislation;

-- Cash flow from operating activities of approximately $290 million. Capital expenditures planned at approximately $90 million;

-- Free cash flow of approximately $200 million of which approximately $170 million will be used to repay debt.

Items of Note for the Fourth Quarter of 2017:

-- Our acquisition of Royal has expanded our position in markets that require highly specified adhesive solutions;

-- Net revenue growth of 18 percent versus the fourth quarter of 2016. Adjusting for the Royal acquisition and the extra week in the fourth quarter of 2016, constant currency revenue growth was 12 percent, with organic revenue growth of 10 percent and organic volume growth of 8 percent;

-- Net loss was $7.6 million in the fourth quarter of 2017; adjusted net income, excluding the impact of the Royal transaction, was $38.9 million, or $0.75 per diluted share;

-- Adjusted EBITDA margin, excluding the impact of the Royal transaction, was up sequentially to 13.1 percent;

-- Cash flow from operations for the 2017 fiscal year was $136 million. Excluding the impact of Royal, cash flow from operations was $120 million in the fourth quarter and $197 million for the 2017 fiscal year;

-- Adjusting for the extra week in the fourth quarter of 2016, organic volume growth for Engineering Adhesives was 19 percent in the quarter; Asia Pacific and the Americas both grew volume approximately 10 percent versus last year; EIMEA had solid mid-single digit volume growth and Construction Products saw improved top-line trends versus prior periods this year;

-- Construction Products adjusted EBITDA margin was up 550 basis points versus the prior year’s fourth quarter and back to double digits.

Fiscal 2018 Guidance:

We are introducing an adjusted EPS guidance range for 2018 of between $3.10 and $3.40. Adjusted EBITDA for fiscal year 2018 is expected to be approximately $465 million. Organic growth on proforma revenue is expected to be 6 to 7 percent for 2018 versus the 2017 fiscal year which reflects good volume growth, favorable foreign currency translation and further pricing to offset continued raw material inflation. Our core tax rate is expected to be between 25 and 27 percent, which reflects our current estimate of the impact of the recently passed tax legislation. We expect capital expenditures to be around $90 million, which includes approximately $15 million for integration related capital expenditures.

"Our 2018 guidance reflects a step change in performance as a result of the continuation of the strong underlying growth and profit improvement in our existing business combined with continued success of the Royal business which we acquired in the fourth quarter," said Jim Owens, H.B. Fuller President and Chief Executive Officer. "Integration activities are well under way and are going very smoothly and we are excited about the cost synergy and growth opportunities that combining these two great companies will create. The combined businesses will create solid organic growth, sizable margin improvement and significant increases in free cash flow for H.B. Fuller."

This guidance excludes between $15 and $20 million, pre-tax, of expenses required to integrate the Royal business and other businesses acquired in 2017, between $7 and $10 million of expenses, pre-tax, related to Project ONE ERP development costs as well as other items that cannot reasonably be estimated at this time. A complete reconciliation of the non-GAAP financial information contained in our 2018 guidance is not being provided in accordance with the "unreasonable efforts" exception of Item 10(e)(1)(i)(B) of Regulation S-K of the Securities and Exchange Commission.

Fourth Quarter 2017 Results:

Net loss for the fourth quarter of 2017 was $7.6 million, or a loss of $0.15 per diluted share, versus net income of $39.1 million, or $0.76 per diluted share, in last year’s fourth quarter. Adjusted diluted earnings per share in the fourth quarter of 2017, excluding the impact of the Royal transaction, were $0.75 versus the prior year’s adjusted result of $0.74, which included an extra week. Adjusting for the extra week in 2016, adjusted earnings per share were up 9 percent as strong volume growth was offset by higher year-over-year raw material costs.

Net revenue for the fourth quarter of 2017 was $678.2 million, up 18 percent versus the fourth quarter of 2016. Adjusting for the extra week in 2016 and excluding the impact of Royal, revenue was up 12 percent as higher volume, pricing and acquisitions all positively impacted net revenue growth. Organic revenue, defined as constant currency revenue less the impact from acquisitions, was up 10 percent year-over-year.

Gross profit margin was 24.7 percent. Adjusted gross profit margin, excluding the impact of the Royal transaction, was 26.5 percent. Margins remained lower year-over-year due to continued increasing raw material costs relative to the timing of additional price increases. Selling, General and Administrative (SG&A) expense was $151.1 million. Adjusted SG&A expense, excluding the impact of the Royal transaction, was $101.5 million, down versus the prior year, due to one fewer operating week as well as good overall expense control.

"We had continued strong revenue performance and excellent cash flow performance in the fourth quarter as organic growth was again very strong," said Mr. Owens. "The pricing actions we implemented early in the year had a positive impact on our margins, however, as a result of Hurricane Harvey and continued environmental controls in China, raw materials continued to increase during the fourth quarter. We have implemented additional pricing actions that will offset inflation in the first half of 2018. Engineering Adhesives, Asia Pacific and Americas all delivered double digit sales growth, with results above our long term targets. Adjusting for the Royal acquisition, we had by far our strongest cash flow quarter of the year. Most importantly, we completed the transformative and complementary acquisition of Royal Adhesives which is accelerating our strategy by combining their strong presence in specified adhesive applications with our global reach and focus."

Balance Sheet and Cash Flow:

At the end of the fourth quarter of 2017, cash balances totaled $194 million with total debt of $2,452 million. This compares to third quarter 2017 cash and debt levels of $120 million and $799 million, respectively. Sequentially, net debt was up by approximately $1,579 million dollars, reflecting the purchase price of Royal offset by strong cash flow from operations. Cash flow from operations for the 2017 fiscal year was $136 million. Excluding the impact of Royal, cash flow from operations was $120 million in the fourth quarter and $197 million for the 2017 fiscal year, reflecting strong topline growth and good working capital management, offset by restructuring charges. Capital expenditures were $19 million in the fourth quarter of 2017 and $55 million for the 2017 fiscal year.

Year-To-Date Results:

Net income for the 2017 fiscal year was $58.2 million, or $1.13 per diluted share, versus net income of $124.1 million, or $2.42 per diluted share, in the 2016 fiscal year. Adjusted diluted earnings per share in the 2017 fiscal year, excluding the impact of the Royal transaction, were $2.50. Adjusting for the extra week last year, adjusted diluted earnings per share were up 3 percent year-over-year.

Net revenue for the 2017 fiscal year was $2,306.0 million, up 10 percent versus the 2016 fiscal year. Adjusting for Royal and the extra week in 2016, constant currency revenue grew by 10.6 percent year-over-year and organic revenue, defined as constant currency revenue less the impact from acquisitions, was up 7 percent.

Conference Call:

The Company will host an investor conference call to discuss fourth quarter results on Wednesday, January 24, 2017, at 9:30 a.m. Central U.S. time (10:30 a.m. Eastern U.S. time). The conference call audio and accompanying presentation slides will be available to all interested parties via a simultaneous webcast under the Investor Relations section of the Company’s website. The event is scheduled to last one hour. For those unable to listen live, an audio replay of the event along with the accompanying presentation will be archived on the Company’s website.

Regulation G:

The information presented in this earnings release regarding segment operating income, adjusted gross profit, adjusted selling, general and administrative expense, adjusted diluted earnings per share, earnings before interest, taxes, depreciation, and amortization (EBITDA) and constant currency revenue does not conform to generally accepted accounting principles (GAAP) and should not be construed as an alternative to the reported results determined in accordance with GAAP. Management has included this non-GAAP information to assist in understanding the operating performance of the Company and its operating segments as well as the comparability of results. The non-GAAP information provided may not be consistent with the methodologies used by other companies. All non-GAAP information is reconciled with reported GAAP results in the tables below with the exception of our forward looking non-GAAP measures contained in our fiscal 2018 outlook, which are unknown or have not yet occurred.

About H.B. Fuller Company:

For 130 years, H.B. Fuller has been a leading global adhesives provider focusing on perfecting adhesives, sealants and other specialty chemical products to improve products and lives. With fiscal 2017 net revenue of $2.3 billion, H.B. Fuller’s commitment to innovation brings together people, products and processes that answer and solve some of the world’s biggest challenges. Our reliable, responsive service creates lasting, rewarding connections with customers in electronics, disposable hygiene, medical, transportation, 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 www.hbfuller.com and subscribe to our blog.

Safe Harbor for Forward-Looking Statements:

Certain statements in this document may be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are subject to various risks and uncertainties, including but not limited to the following: the Royal transaction may involve unexpected costs or liabilities; our business or stock price may suffer as a result of uncertainty surrounding the transaction; the substantial amount of debt we have incurred to finance our acquisition of Royal, our ability to repay or refinance it or incur additional debt in the future, our need for a significant amount of cash to service and repay the debt and to pay dividends on our common stock, and the effect of restrictions contained in our debt agreements that limit the discretion of management in operating the business or ability to pay dividends; various risks to stockholders of not receiving dividends and risks to our ability to pursue growth opportunities if we continue to pay dividends according to the current dividend policy; we may be unable to achieve expected synergies and operating efficiencies from the transaction within the expected time frames or at all; we may be unable to successfully integrate Royal’s operations into our own, or such integration may be more difficult, time consuming or costly than expected; following the transaction, revenues may be lower than expected, and operating costs, customer loss and business disruption (including, without limitation, difficulties in maintaining relationships with employees, customers, clients or suppliers) may be greater than expected; risks that the transaction disrupts current plans and operations and the potential difficulties in employee retention as a result of the transaction; the ability to effectively implement Project ONE; political and economic conditions; product demand; competitive products and pricing; costs of and savings from restructuring initiatives; geographic and product mix; availability and price of raw materials; the Company’s relationships with its major customers and suppliers; changes in tax laws and tariffs; devaluations and other foreign exchange rate fluctuations; the impact of litigation and environmental matters; the effect of new accounting pronouncements and accounting charges and credits; and similar matters. Further information about the various risks and uncertainties can be found in the Company’s SEC 10-K filing for the fiscal year ended December 3, 2016, and its SEC 10-Q filing for the quarter ended September 2, 2017. All forward-looking information represents management’s best judgment as of this date based on information currently available that in the future may prove to have been inaccurate. Additionally, the variety of products sold by the Company and the regions where the Company does business make it difficult to determine with certainty the increases or decreases in net revenue resulting from changes in the volume of products sold, currency impact, changes in product mix, and selling prices. However, management’s best estimates of these changes as well as changes in other factors have been included.

H.B. FULLER COMPANY AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
In thousands, except per share amounts (unaudited)
                                                                            13 Weeks Ended    Percent of   14 Weeks Ended    Percent of
                                                                            December 2, 2017  Net Revenue  December 3, 2016  Net Revenue
Net revenue                                                                 $     678,200     100.0 %      $     574,907     100.0 %
Cost of sales                                                                     (510,464 )  (75.3 %)           (407,086 )  (70.8 %)
Gross profit                                                                      167,736     24.7  %            167,821     29.2  %
Selling, general and administrative expenses                                      (151,126 )  (22.3 %)           (106,495 )  (18.6 %)
Special charges, net                                                              -           0.0   %            (1,856   )  (0.3  %)
Other income (expense), net                                                       (24,401  )  (3.6  %)           54          0.0   %
Interest expense                                                                  (19,073  )  (2.8  %)           (7,645   )  (1.3  %)
Income (loss) before income taxes and income from equity method investments       (26,864  )  (4.0  %)           51,879      9.0   %
Income taxes                                                                      17,092      2.5   %            (14,873  )  (2.6  %)
Income from equity method investments                                             2,228       0.3   %            2,221       0.4   %
Net income (loss) including non-controlling interests                             (7,544   )  (1.1  %)           39,227      6.8   %
Net income (loss) attributable to non-controlling interests                       (14      )  (0.0  %)           (93      )  (0.0  %)
Net income (loss) attributable to H.B. Fuller                               $     (7,558   )  (1.1  %)     $     39,134      6.8   %
Basic income (loss) per common share attributable to H.B. Fuller            $     (0.15    )               $     0.78
Diluted income (loss) per common share attributable to H.B. Fuller          $     (0.15    )               $     0.76
Weighted-average common shares outstanding:
Basic                                                                             50,356                         50,180
Diluted                                                                           51,724                         51,378
Dividends declared per common share                                         $     0.15                     $     0.14
Selected Balance Sheet Information (subject to change prior to the filing of the Company’s Annual Report on Form 10-K)
                               December 2, 2017             December 3, 2016             November 28, 2015
Cash & cash equivalents        $             194,398        $             142,245        $             119,168
Trade accounts receivable, net               473,700                      351,130                      364,704
Inventories                                  359,505                      247,399                      248,504
Trade payables                               268,467                      162,964                      177,864
Total assets                                 4,365,276                    2,058,254                    2,042,252
Total debt                                   2,451,910                    705,657                      722,863
H.B. FULLER COMPANY AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
In thousands, except per share amounts (unaudited)
                                                                                                52 Weeks Ended         Percent of         53 Weeks Ended     Percent of
                                                                                                December 2, 2017       Net Revenue        December 3, 2016   Net Revenue
Net revenue                                                                                     $        2,306,043     100.0    %         $     2,094,605    100.0 %
Cost of sales                                                                                            (1,702,873 )  (73.8    %)              (1,484,802 ) (70.9 %)
Gross profit                                                                                             603,170       26.2     %               609,803      29.1  %
Selling, general and administrative expenses                                                             (477,030   )  (20.7    %)              (407,638   ) (19.5 %)
Special charges                                                                                          -             0.0      %               168          0.0   %
Other income (expense), net                                                                              (23,740    )  (1.0     %)              (7,549     ) (0.3  %)
Interest expense                                                                                         (43,701    )  (1.9     %)              (27,359    ) (1.3  %)
Income from continuing operations before income taxes and income from equity method investments          58,699        2.5      %               167,425      8.0   %
Income taxes                                                                                             (9,086     )  (0.4     %)              (50,436    ) (2.4  %)
Income from equity method investments                                                                    8,677         0.4      %               7,393        0.3   %
Net income including non-controlling interests                                                           58,290        2.5      %               124,382      5.9   %
Net income attributable to non-controlling interests                                                     (48        )  (0.0     %)              (254       ) (0.0  %)
Net income attributable to H.B. Fuller                                                          $        58,242        2.5      %         $     124,128      5.9   %
Basic income per common share attributable to H.B. Fuller                                       $        1.16                             $     2.48
Diluted income per common share attributable to H.B. Fuller                                     $        1.13                             $     2.42
Weighted-average common shares outstanding:
Basic                                                                                                    50,370                                 50,136
Diluted                                                                                                  51,619                                 51,270
Dividends declared per common share                                                             $        0.59                             $     0.55
a   Income per share amounts may not add due to rounding
H.B. FULLER COMPANY AND SUBSIDIARIES
REGULATION G RECONCILIATION - Income Statement
In thousands, except per share amounts (unaudited)
                                                                                                                                                  Less           Adjusted
                                                                                                                                Adjusted          Adjusted       Excluding Royal   % of
                                                                                             13 Weeks Ended    Add              13 Weeks Ended    Royal          13 Weeks Ended    Net
                                                                                             December 2, 2017  Adjustments      December 2, 2017  Results        December 2, 2017  Revenue
Net revenue                                                                                  $     678,200     $   -            $     678,200     $  77,034      $     601,166     100.0 %
Cost of sales                                                                                      (510,464 )      12,566             (497,898 )     (55,858 )         (442,040 )  (73.5 %)
Gross profit                                                                                       167,736         12,566             180,302        21,176            159,126     26.5%
Selling, general and administrative expenses                                                       (151,126 )      33,893             (117,233 )     (15,769 )         (101,464 )  (16.9 %)
Other income (expense), net                                                                        (24,401  )      25,966             1,565          1,087             478         0.1   %
Interest expense                                                                                   (19,073  )      -                  (19,073  )     (10,286 )         (8,787   )  (1.5  %)
Income (loss) before income taxes and income from equity method investments                        (26,864  )      72,425             45,561         (3,792  )         49,353      8.2   %
Income taxes                                                                                       17,092          (28,318 )          (11,226  )     1,437             (12,663  )  (2.1  %)
- Effective tax rate                                                                               63.6     %                         24.6     %     37.9    %         25.7     %
Income from equity method investments                                                              2,228           -                  2,228          -                 2,228       0.4   %
Net income (loss) including non-controlling interests                                              (7,544   )      44,107             36,563         (2,355  )         38,918      6.5   %
Net income attributable to non-controlling interests                                               (14      )      -                  (14      )     -                 (14      )  (0.0  %)
Net income (loss) attributable to H.B. Fuller                                                $     (7,558   )  $   44,107       $     36,549      $  (2,355  )   $     38,904      6.5   %
Basic income (loss) per common share attributable to H.B. Fuller                             $     (0.15    )  $   0.88         $     0.73        $  (0.05   )   $     0.77
Diluted income (loss) per common share attributable to H.B. Fuller                           $     (0.15    )  $   0.85         $     0.71        $  (0.05   )   $     0.75
Weighted-average common shares outstanding:
Basic                                                                                              50,356          50,356             50,356         50,356            50,356
Diluted                                                                                            51,724          51,724             51,724         51,724            51,724
H.B. FULLER COMPANY AND SUBSIDIARIES
REGULATION G RECONCILIATION - Income Statement
In thousands, except per share amounts (unaudited)
                                                                                        % of                       Adjusted          % of
                                                                      14 Weeks Ended    Net                        14 Weeks Ended    Net
                                                                      December 3, 2016  Revenue    Adjustments     December 3, 2016  Revenue
Net revenue                                                           $     574,907     100.0 %    $   -           $     574,907     100.0 %
Cost of sales                                                               (407,086 )  (70.8 %)       (543   )          (406,543 )  (70.7 %)
Gross profit                                                                167,821     29.2  %        543               168,364     29.3  %
Selling, general and administrative expenses                                (106,495 )  (18.6 %)       2,520             (109,015 )  (19.0 %)
Special charges, net                                                        (1,856   )  (0.3  %)       (1,856 )          -           0.0   %
Other income (expense), net                                                 54          -              -                 54          0.0   %
Interest expense                                                            (7,645   )  (1.3  %)       (58    )          (7,587   )  (1.3  %)
Income before income taxes and income from equity method investments        51,879      9.0   %        (63    )          51,816      9.0   %
Income taxes                                                                (14,873  )  (2.6  %)       1,161             (16,034  )  (2.8  %)
- Effective tax rate                                                        28.7     %                                   30.9     %
Income from equity method investments                                       2,221       0.4   %        -                 2,221       0.4   %
Net income including non-controlling interests                              39,227      6.8   %        (1,224 )          38,003      6.6   %
Net income attributable to non-controlling interests                        (93      )  -              -                 (93      )  (0.0  %)
Net income attributable to H.B. Fuller                                $     39,134      6.8   %    $   (1,224 )    $     37,910      6.6   %
Basic income per common share attributable to H.B. Fuller             $     0.78                   $   (0.02  )    $     0.76
Diluted income per common share attributable to H.B. Fuller           $     0.76                   $   (0.02  )    $     0.74
Weighted-average common shares outstanding:
Basic                                                                       50,180                     50,180            50,180
Diluted                                                                     51,378                     51,378            51,378
H.B. FULLER COMPANY AND SUBSIDIARIES
REGULATION G RECONCILIATION - Income Statement
In thousands, except per share amounts (unaudited)
                                                                                                                                                         Less           Adjusted
                                                                                                                                     Adjusted            Adjusted       Excluding Royal      % of
                                                                                                52 Weeks Ended      Add              52 Weeks Ended      Royal          52 Weeks Ended       Net
                                                                                                December 2, 2017    Adjustments      December 2, 2017    Results        December 2, 2017     Revenue
Net revenue                                                                                     $     2,306,043     $   -            $     2,306,043     $  77,034      $     2,229,009      100.0 %
Cost of sales                                                                                         (1,702,873 )      26,520             (1,676,353 )     55,858            (1,620,495 )   (72.7 %)
Gross profit                                                                                          603,170           26,520             629,690          (21,176 )         608,514        27.3  %
Selling, general and administrative expenses                                                          (477,030   )      52,734             (424,296   )     15,769            (408,527   )   (18.3 %)
Other income (expense), net                                                                           (23,740    )      26,179             2,439            1,087             1,352          0.1   %
Interest expense                                                                                      (43,701    )      -                  (43,701    )     10,286            (33,415    )   (1.5  %)
Income from continuing operations before income taxes and income from equity method investments       58,699            105,433            164,132          (3,792  )         167,924        7.5   %
Income taxes                                                                                          (9,086     )      (37,114 )          (46,200    )     1,437             (47,637    )   (2.1  %)
-Effective tax rate                                                                                   15.5       %      35.2    %          28.1       %     37.9    %         28.4       %
Income from equity method investments                                                                 8,677             -                  8,677            -                 8,677          0.4   %
Net income including non-controlling interests                                                        58,290            68,319             126,609          (2,355  )         128,964        5.8   %
Net income attributable to non-controlling interests                                                  (48        )      -                  (48        )     -                 (48        )   (0.0  %)
Net income attributable to H.B. Fuller                                                          $     58,242        $   68,319       $     126,561       $  (2,355  )   $     128,916        5.8   %
Basic income per common share attributable to H.B. Fuller                                       $     1.16          $   1.36               2.51          $  (0.05   )   $     2.56
Diluted income per common share attributable to H.B. Fuller                                     $     1.13          $   1.32               2.45          $  (0.05   )   $     2.50
Weighted-average common shares outstanding:
Basic                                                                                                 50,370            50,370             50,370           50,370            50,370
Diluted                                                                                               51,619            51,619             51,619           51,619            51,619
a   Income per share amounts may not add due to rounding
H.B. FULLER COMPANY AND SUBSIDIARIES
REGULATION G RECONCILIATION - Income Statement
In thousands, except per share amounts (unaudited)
                                                                                          % of                       Adjusted            % of
                                                                      53 Weeks Ended      Net                        53 Weeks Ended      Net
                                                                      December 3, 2016    Revenue    Adjustments     December 3, 2016    Revenue
Net revenue                                                           $     2,094,605     100.0 %    $   -           $     2,094,605     100.0 %
Cost of sales                                                               (1,484,802 )  (70.9 %)       (4,442 )          (1,480,360 )  (70.7 %)
Gross profit                                                                609,803       29.1  %        4,442             614,245       29.3  %
Selling, general and administrative expenses                                (407,638   )  (19.5 %)       697               (408,335   )  (19.5 %)
Special charges. net                                                        168           0.0   %        168               -             0.0   %
Other income (expense), net                                                 (7,549     )  (0.3  %)       (684   )          (6,865     )  (0.3  %)
Interest expense                                                            (27,359    )  (1.3  %)       (280   )          (27,079    )  (1.3  %)
Income before income taxes and income from equity method investments        167,425       8.0   %        4,541             171,966       8.2   %
Income taxes                                                                (50,436    )  (2.4  %)       1,656             (52,092    )  (2.4  %)
- Effective tax rate                                                        30.1       %                 -36.5  %          30.3       %
Income from equity method investments                                       7,393         0.3   %        -                 7,393         0.3   %
Net income including non-controlling interests                              124,382       5.9   %        2,885             127,267       6.1   %
Net income attributable to non-controlling interests                        (254       )  -              -                 (254       )  (0.0  %)
Net income attributable to H.B. Fuller                                $     124,128       5.9   %    $   2,885       $     127,013       6.1   %
Basic income per common share attributable to H.B. Fuller             $     2.48                     $   0.06        $     2.53
Diluted income per common share attributable to H.B. Fuller           $     2.42                     $   0.06        $     2.48
Weighted-average common shares outstanding:
Basic                                                                       50,136                       50,136            50,136
Diluted                                                                     51,270                       51,270            51,270
a   Income per share amounts may not add due to rounding
H.B. FULLER COMPANY AND SUBSIDIARIES
ADJUSTED EARNING PER SHARE RECONCILIATION
In thousands (unaudited)
                                    13 Weeks ended December 2, 2017                                 14 Weeks ended December 3, 2016
                                    Income                                                          Income
                                    before                          Income     Diluted              before                 Income    Diluted
                                    Income Tax                      Taxes      EPS                  Income Tax             Taxes     EPS
GAAP Earnings                       $                 (24,650  )  $ (17,092  ) $        (0.15    )  $        54,007      $ 14,873    $        0.76
Acquisition project costs         b                   15,298        4,195               0.21                 500           141                0.01
Make-whole cost on debt repayment c                   25,535        8,937               0.32                 -             -                  -
Advisory/financing fees           d                   28,499        9,975               0.36                 -             -                  -
Tonsan call option agreement      e                   (1,705   )    -                   (0.03    )           (5,173   )    -                  (0.10    )
Organizational realignment        f                   1,018         230                 0.02                 3,066         544                0.05
Other                             g                   3,780         4,981               (0.02    )           1,544         476                0.02
Adjusted Earnings                   $                 47,775        11,226              0.71        $        53,944      $ 16,034    $        0.74
Adjusted Royal results                                3,792         1,437               0.05
Adjusted earnings excluding Royal   $                 51,567        12,663              0.75
                                    52 Weeks ended December 2, 2017                                 53 Weeks ended December 3, 2016
                                    Income                                                          Income
                                    before                          Income     Diluted              before                 Income    Diluted
                                    Income Tax                      Taxes      EPS                  Income Tax             Taxes     EPS
GAAP Earnings                       $        67,328               $ 9,086      $        1.13        $        174,564     $ 50,436    $        2.42
Acquisition project costs         b          20,493                 5,993               0.28                 2,633         640                0.04
Make-whole cost on debt repayment c          25,535                 8,937               0.32                 -             -                  -
Advisory/financing fees           d          33,879                 11,858              0.43                 -             -                  -
Tonsan call option agreement      e          (3,945            )    -                   (0.08    )           (5,370   )    -                  (0.10    )
Organizational realignment        f          19,963                 4,343               0.30                 3,633         57                 0.07
Other                             g          9,508                  5,983               0.08                 3,645         959                0.05
Adjusted Earnings                   $        172,761                46,200              2.45        $        179,105     $ 52,092    $        2.48
Adjusted Royal results                       3,792                  1,437               0.05
Adjusted earnings excluding Royal   $        176,553                47,637              2.50
a   Income per share amounts may not add due to rounding
b   Costs related to integrating and accounting for acquisitions
c   Cash costs related to make whole payments associated with the early repayment of certain debt in conjunction with the Royal Transaction
d   Cash costs related to transaction advisory costs and costs for arranging financing in conjunction with the Royal Transaction
e   Non-cash costs related to accretion and revaluation of the Tonsan call option agreement
f   Costs related to Organizational Realignment to Support 2020 Strategic Plan, Construction Products facility combination, EIMEA restructuring announced November 2015, business integration and Special Charges
g   Costs related to Project One development costs, discrete tax items and other corporate costs
H.B. FULLER COMPANY AND SUBSIDIARIES
SEGMENT FINANCIAL INFORMATION
In thousands (unaudited)
                                      13 Weeks Ended       14 Weeks Ended
                                      December 2, 2017     December 3, 2016
Net Revenue
Americas Adhesives                    $     234,887        $     217,639
EIMEA                                       151,765              150,328
Asia Pacific                                74,107               70,361
Construction Products                       58,634               64,235
Engineering Adhesives                       81,773               72,344
Royal Adhesives                             77,034               -
Total H.B. Fuller                     $     678,200        $     574,907
Segment Operating Income
Americas Adhesives                    $     24,827         $     31,936
EIMEA                                       10,091               14,502
Asia Pacific                                5,898                6,111
Construction Products                       461                  (2,147  )
Engineering Adhesives                       7,974                10,924
Royal Adhesives                             (32,641 )            -
Total H.B. Fuller                     $     16,610         $     61,326
Depreciation and Amortization Expense
Americas Adhesives                    $     5,779          $     5,016
EIMEA                                       5,304                5,120
Asia Pacific                                1,958                1,862
Construction Products                       4,277                4,074
Engineering Adhesives                       3,733                4,374
Royal Adhesives                             6,760                -
Total H.B. Fuller                     $     27,811         $     20,446
EBITDA
Americas Adhesives                    $     30,607         $     36,952
EIMEA                                       15,395               19,622
Asia Pacific                                7,856                7,973
Construction Products                       4,738                1,927
Engineering Adhesives                       11,707               15,298
Royal Adhesives                             (25,881 )            -
Total H.B. Fuller                     $     44,422         $     81,772
Segment Operating Margin
Americas Adhesives                          10.6    %            14.7    %
EIMEA                                       6.6     %            9.6     %
Asia Pacific                                8.0     %            8.7     %
Construction Products                       0.8     %            (3.3    %)
Engineering Adhesives                       9.8     %            15.1    %
Royal Adhesives                             (42.4   %)           -
Total H.B. Fuller                           2.4     %            10.7    %
EBITDA Margin
Americas Adhesives                          13.0    %            17.0    %
EIMEA                                       10.1    %            13.1    %
Asia Pacific                                10.6    %            11.3    %
Construction Products                       8.1     %            3.0     %
Engineering Adhesives                       14.3    %            21.1    %
Royal Adhesives                             (33.6   %)           -
Total H.B. Fuller                           6.5     %            14.2    %
Adjusted EBITDA
Americas Adhesives                    $     35,818         $     37,336
EIMEA                                       17,524               21,039
Asia Pacific                                8,586                8,177
Construction Products                       5,938                2,967
Engineering Adhesives                       10,848               10,235
Royal Adhesives                             12,167               -
Total H.B. Fuller                     $     90,881         $     79,754
Adjusted EBITDA Margin
Americas Adhesives                          15.2    %            17.2    %
EIMEA                                       11.5    %            14.0    %
Asia Pacific                                11.6    %            11.6    %
Construction Products                       10.1    %            4.6     %
Engineering Adhesives                       13.3    %            14.1    %
Royal Adhesives                             15.8    %            -
Total H.B. Fuller                           13.4    %            13.9    %
H.B. FULLER COMPANY AND SUBSIDIARIES
SEGMENT FINANCIAL INFORMATION
In thousands (unaudited)
                                      52 Weeks Ended         53 Weeks Ended
                                      December 2, 2017       December 3, 2016
Net Revenue
Americas Adhesives                    $     888,552          $     806,062
EIMEA                                       548,439                545,135
Asia Pacific                                264,191                241,827
Construction Products                       238,513                256,346
Engineering Adhesives                       289,314                245,235
Royal Adhesives                             77,034                 -
Total H.B. Fuller                     $     2,306,043        $     2,094,605
Segment Operating Income
Americas Adhesives                    $     98,979           $     125,979
EIMEA                                       29,870                 40,121
Asia Pacific                                15,350                 15,410
Construction Products                       (1,120    )            3,265
Engineering Adhesives                       20,453                 17,390
Royal Adhesives                             (37,392   )            -
Total H.B. Fuller                     $     126,140          $     202,165
Depreciation and Amortization Expense
Americas Adhesives                    $     21,171           $     18,979
EIMEA                                       19,845                 21,441
Asia Pacific                                8,135                  7,484
Construction Products                       16,316                 14,977
Engineering Adhesives                       15,088                 14,804
Royal Adhesives                             6,760                  -
Total H.B. Fuller                     $     87,315           $     77,685
EBITDA
Americas Adhesives                    $     120,150          $     144,958
EIMEA                                       49,714                 61,562
Asia Pacific                                23,484                 22,894
Construction Products                       15,196                 18,242
Engineering Adhesives                       35,542                 32,194
Royal Adhesives                             (30,631   )            -
Total H.B. Fuller                     $     213,455          $     279,850
Segment Operating Margin
Americas Adhesives                          11.1      %            15.6      %
EIMEA                                       5.4       %            7.4       %
Asia Pacific                                5.8       %            6.4       %
Construction Products                       (0.5      %)           1.3       %
Engineering Adhesives                       7.1       %            7.1       %
Royal Adhesives                             (48.5     %)           -
Total H.B. Fuller                           5.5       %            9.7       %
EBITDA Margin
Americas Adhesives                          13.5      %            18.0      %
EIMEA                                       9.1       %            11.3      %
Asia Pacific                                8.9       %            9.5       %
Construction Products                       6.4       %            7.1       %
Engineering Adhesives                       12.3      %            13.1      %
Royal Adhesives                             (39.8     %)           -
Total H.B. Fuller                           9.3       %            13.4      %
Adjusted EBITDA
Americas Adhesives                    $     134,249          $     145,890
EIMEA                                       62,280                 63,912
Asia Pacific                                26,487                 24,061
Construction Products                       22,942                 19,473
Engineering Adhesives                       34,070                 27,607
Royal Adhesives                             12,167                 -
Total H.B. Fuller                     $     292,195          $     280,943
Adjusted EBITDA Margin
Americas Adhesives                          15.1      %            18.1      %
EIMEA                                       11.4      %            11.7      %
Asia Pacific                                10.0      %            9.9       %
Construction Products                       9.6       %            7.6       %
Engineering Adhesives                       11.8      %            11.3      %
Royal Adhesives                             15.8      %            -
Total H.B. Fuller                           12.7      %            13.4      %
H.B. FULLER COMPANY AND SUBSIDIARIES
SEGMENT FINANCIAL INFORMATION
NET REVENUE GROWTH
(unaudited)
13 Weeks Ended December 2, 2017
                         Americas   EIMEA    Asia Pacific   Construction   Engineering     Total HBF
                         Adhesives                          Products       Adhesives
Price                    0.9  %     5.4  %   0.5    %       0.1    %       0.5   %         1.9  %
Volume                   9.5  %     4.0  %   10.4   %       (1.7   %)      19.3  %         8.2  %
Mix                      0.1  %     0.6  %   0.2    %       (0.4   %)      (0.7  %)        0.1  %
Acquisition              4.3  %     -        -              -              -               1.6  %
Constant Currency Growth 14.8 %     10.0 %   11.1   %       (2.0   %)      19.1  %         11.8 %
F/X                      0.2  %     (1.9 %)  1.3    %       0.4    %       1.1   %         (0.1 %)
Royal Impact             -          -        -              -              -               13.4 %
Extra Week               (7.1 %)    (7.1 %)  (7.1   %)      (7.1   %)      (7.1  %)        (7.1 %)
                         7.9  %     1.0  %   5.3    %       (8.7   %)      13.1  %         18.0 %
52 Weeks Ended December 2, 2017
                         Americas   EIMEA    Asia Pacific   Construction   Engineering     Total HBF
                         Adhesives                          Products       Adhesives
Price                    (0.4 %)    4.5  %   (0.6   %)      0.0    %       (1.2  %)        0.8  %
Volume                   6.1  %     4.6  %   11.1   %       (4.9   %)      20.3  %         6.1  %
Mix                      (0.8 %)    0.1  %   (0.5   %)      (0.3   %)      (0.5  %)        (0.4 %)
Acquisition              7.6  %     -        2.8    %       -              3.2   %         4.1  %
Constant Currency Growth 12.5 %     9.2  %   12.8   %       (5.2   %)      21.8  %         10.6 %
F/X                      (0.3 %)    (6.6 %)  (1.6   %)      0.2    %       (1.8  %)        (2.2 %)
Royal Impact             -          -        -              -              -               3.7  %
Extra Week               (2.0 %)    (2.0 %)  (2.0   %)      (2.0   %)      (2.0  %)        (2.0 %)
                         10.2 %     0.6  %   9.2    %       (7.0   %)      18.0  %         10.1 %
H.B. FULLER COMPANY AND SUBSIDIARIES
REGULATION G RECONCILIATION - EBITDA
In thousands (unaudited)
                                                      13 Weeks Ended   14 Weeks Ended
                                                      December 2, 2017 December 3, 2016
Net income (loss) including non-controlling interests $     (7,544  )  $     39,227
Income from equity method investments                       (2,228  )        (2,221  )
Income taxes                                                (17,092 )        14,873
Interest expense                                            19,073           7,645
Other income (expense), net                                 24,401           (54     )
Special charges                                             -                1,856
Segment Operating Income                                    16,610           61,326
Depreciation expense                                        14,697           12,460
Amortization expense                                        13,115           7,986
EBITDA                                                $     44,422     $     81,772
Non-recurring costs                                         46,459           (2,018  )
Adjusted EBITDA                                       $     90,881     $     79,754
Less: Adjusted Royal EBITDA                           $     (12,167 )
                                                      $     78,714
Adjusted EBITDA marginon core HB Fuller                     13.1    %        13.9    %
                                                      52 Weeks Ended   53 Weeks Ended
                                                      December 2, 2017 December 3, 2016
Net income including non-controlling interests        $     58,290     $     124,382
Income from equity method investments                       (8,677  )        (7,393  )
Income taxes                                                9,086            50,436
Interest expense                                            43,701           27,359
Other income (expense), net                                 23,740           7,549
Special charges                                             -                (168    )
Segment Operating Income                                    126,140          202,165
Depreciation expense                                        51,072           49,190
Amortization expense                                        36,243           28,495
EBITDA                                                $     213,455    $     279,850
Non-recurring costs                                         78,740           1,093
Adjusted EBITDA                                       $     292,195    $     280,943
Less: Adjusted Royal EBITDA                           $     (12,167 )
                                                      $     280,028
Adjusted EBITDA margin on core HB Fuller                    12.6    %        13.4    %
H.B. FULLER COMPANY AND SUBSIDIARIES
PROFORMA FINANCIAL MEASURES
In thousands (unaudited)
                                      Royal         Royal            Royal            H.B. Fuller          Proforma
                                      12/4/16 -     10/20/17 -       52 weeks ended - Standalone           Combined
                                      10/19/17      12/2/17          December 2017    December 2017        December 2017
Net income (loss)                     $    17,565   $   (31,486 )    $     (13,921 )  $    89,777          $    75,856
Income from equity method investments      -            -                  -               (8,677    )          (8,677    )
Income taxes                               7,735        (16,147 )          (8,412  )       25,232               16,820
Interest expense                           39,306       10,286             49,592          33,415               83,007
Other income (expense), net                -            (45     )          (45     )       23,785               23,740
Segment Operating Income              $    64,606   $   (37,392 )    $     27,214     $    163,532         $    190,746
Depreciation expense                  $    9,354    $   1,712              11,066     $    49,360               60,426
Amortization expense                       34,175       5,049              39,224          31,194               70,418
EBITDA                                $    108,135  $   (30,631 )    $     77,504     $    244,086         $    321,590
Non-recurring costs                   $    12,670   $   42,798             55,468     $    35,942               91,410
Adjusted EBITDA                       $    120,805  $   12,167       $     132,972    $    280,028         $    413,000
Net Revenue                           $    580,719  $   77,034       $     657,753    $    2,229,009       $    2,886,762
H.B. FULLER COMPANY AND SUBSIDIARIES
OPERATING CASH FLOW RECONCILIATION
In thousands (unaudited)
                                                           13 Weeks Ended     52 Weeks Ended
                                                           December 2, 2017   December 2, 2017
Cash Flow from Operations                                  $        65,532    $        136,337
Make-whole cost on debt restructuring                               25,535             25,535
Advisory/financing fees                                             28,499             33,879
Net Royal cash flow impact                                          752                803
Cash flow from operations, excluding the Royal acquisition $        120,318   $        196,554
 Adjusted diluted earnings per share (EPS) is a non-GAAP financial measure and excludes the following costs included on the adjusted earnings per share reconciliation table above: special charges related to the "business integration"; organizational realignment to support the 2020 strategic plan as announced in December 2016; restructuring in EIMEA related to operational efficiency improvement projects; combining Construction Products facilities in Illinois; Project ONE development costs; the closing of a facility in the Philippines; integrating and accounting for past and present acquisitions and all transaction related costs of the Royal transaction.
 Adjusted diluted earnings per share excluding Royal (EPS) is a non-GAAP financial measure and excludes the costs included on the adjusted earnings per share reconciliation table above in addition to the income generated from operating the business for 6 weeks.
 Proforma financial results represent combined 2017 fiscal year financial results of H.B. Fuller on a standalone basis, the Royal business for the period under prior ownership and the 6 weeks under H.B. Fuller ownership. The proforma results are presented to provide the reader with a baseline to evaluate 2018 financial guidance.
 EBITDA is a non-GAAP financial measure defined on a consolidated basis as gross profit, less SG&A expense, plus depreciation expense, plus amortization expense. Adjusted EBITDA excludes operating items listed on the adjusted earnings per share reconciliation table above. On a segment basis it is defined as operating income, plus depreciation expense, plus amortization expense. Adjusted EBITDA margin is defined as adjusted EBITDA divided by net revenue.
 Free cash flow is a non-GAAP financial measure defined as cash flow from operating activities less capital expenditures.
 Constant currency revenue is a non-GAAP financial measure defined as changes in revenue due to price, volume, mix and acquisitions and excludes revenue changes driven by foreign currency translation. The schedule above reconciles each component of net revenue growth.
 Adjusted gross profit and adjusted gross profit margin are non-GAAP financial measures. Adjusted gross profit excludes costs associated with: organizational realignment to support the 2020 strategic plan as announced in December 2016; restructuring in EIMEA related to operational efficiency improvement projects; combining Construction Products facilities in Illinois; the closing of a facility in the Philippines; integrating and accounting for past and present acquisitions; and all impacts related to the Royal transaction, including the income generated from operating the business for 6 weeks. Adjusted gross profit margin is defined as adjusted gross profit divided by adjusted net revenue.
 Adjusted SG&A expense is a non-GAAP financial measure which excludes costs associated with: organizational realignment to support the 2020 strategic plan as announced in December 2016; restructuring in EIMEA related to operational efficiency improvement projects; combining Construction Products facilities in Illinois; Project ONE development costs; integrating and accounting for past and present acquisitions; and all impacts related to the Royal transaction, including the income generated from operating the business for 6 weeks.
 Segment operating income is defined as gross profit less SG&A expense. Segment operating margin is defined as segment operating income divided by net revenue.
 Segment financial information excludes all impacts related to the Royal transaction, including the income generated from operating the business for 6 weeks.

Maximillian Marcy

Investor Relations Contact

651-236-5062

https://resource.globenewswire.com/Resource/Download/634cd470-d3fa-4f92-a520-2072da7869bb?size=1

<img src="http://www.globenewswire.com/newsroom/ti?ndecode=MTUwIzcwOTM3MzI=" alt="" width="1" height="1"/>



Register |  Password |  Feedback |  Copyright |  Usage Agreement |  Privacy Policy |  Advertising |  About Us |  Contact Us |  FAQ 

Past performance is not indicative of future results

StockSelector.com, the StockSelector.com logo, and News Selects are trademarks of StockSelector.com.
Copyright © 1998 - 2018 StockSelector.com. All rights reserved.