FULLER H B CO

Previous wording

Net revenue in the first quarter of 2025 decreased 2.7 percent from the first quarter of 2024. Net revenue increased 1.7 percent due to sales volume and 0.2 percent due to pricing but was offset by a 1.2 percent decrease due toacquisitions/divestitures and a 3.4 percent decrease due to negative currency effect compared to the first quarter of 2024. The negative currency effect was primarily driven by aweaker Euro, Egyptian pound, Brazilian real, and Mexican peso compared to the U.S. dollar. Gross profit margin decreased 70 basis points primarily due to lower revenue, and higher raw material and manufacturing costs.

Current wording

Net revenue in the second quarter of 2025 decreased 2.1 percent from the second quarter of 2024. The decrease was due to a 1.3 percent decrease in acquisitions/divestitures, a 1.2 percent decrease due to negative currency effects compared to the second quarter of 2024 and a 0.3 percent decrease due to sales volume, partially offset by a 0.7 percent increase due to pricing. The negative currency effect was primarily driven by aweaker Brazilian real, Mexican peso, Egyptian pound, and Turkish Lira compared to the U.S. dollar. Gross profit margin increased 110 basis pointsdue to the impact of acquisitions/divestitures.

Previous wording

Net income attributable to H.B. Fuller in the first quarter of 2025 was $13.2 million compared to $31.0 million in the first quarter of 2024. Diluted earnings per share for the first quarter of 2025 was $0.24 per share compared to $0.55 per share for the first quarter of 2024.

Current wording

Net income attributable to H.B. Fuller in thesecond quarter of 2025 was$41.8 million compared to$51.3 million in thesecond quarter of 2024. Diluted earnings per share for thesecond quarter of 2025 was$0.76 per share compared to$0.91 per share for thesecond quarter of 2024.

Previous wording

During the second and third quarters of 2023, the Company approved restructuring plans (the “Plans”) related to organizational changes and other actions to optimize operations and integrate acquired businesses. In implementing the Plans, the Company currently expects to incur costs of approximately $60.0 million to $65.0 million ($40.9 million to $44.3 million after-tax), which include (i) cash expenditures of approximately $38.0 million to $39.0 million ($25.9 million to $26.6 million after tax) for severance and related employee costs globally and (ii) other restructuring costs related to the streamlining of processes and the payment of anticipated income taxes in certain jurisdictions related to the Plans. We have incurred costs of $61.7 million under the Plans as of March 1, 2025. The Plans were implemented in the second quarter of fiscal year 2023 and are currently expected to be completed during fiscal year 2026. The restructuring costs will be spread across the next several fiscal quarters as the measures are implemented.

Current wording

During the second and third quarters of 2023, the Company approved restructuring plans (the “Plans”) related to organizational changes and other actions to optimize operations and integrate acquired businesses. In implementing the Plans, the Company currently expects to incur costs of approximately $70.0 million to $75.0 million ($47.8 million to $51.2 million after-tax), which include (i) cash expenditures of approximately $41.0 million to $42.0 million ($28.0 million to $28.7 million after tax) for severance and related employee costs globally and (ii) other restructuring costs related to the streamlining of processes and the payment of anticipated income taxes in certain jurisdictions related to the Plans. We have incurred costs of $66.3 million under the Plans as of May 31, 2025. The Plans were implemented in the second quarter of fiscal year 2023 and are currently expected to be completed during fiscal year 2026. The remaining restructuring costs will be spread across the next several fiscal quarters as the measures are implemented.

Previous wording

We review variances in net revenue in terms of changes related to sales volume and product pricing (referred to as organic revenue growth), business acquisitions and divestitures (“M&A”) and changes in foreign currency exchange rates. The following table shows the net revenue variance analysis for the first quarter of 2025 compared to the first quarter of 2024:

Current wording

We review variances in net revenue in terms of changes related to sales volume and product pricing (referred to as organic revenue growth), business acquisitions and divestitures (“M&A”) and changes in foreign currency exchange rates. The following table shows the net revenue variance analysis for the second quarter and first six months of 2025 compared to the second quarter and first six months of 2024:

Previous wording

Organic revenue increased 1.9 percent in the first quarter of 2025 compared to the first quarter of 2024 and consisted of a 4.2 percent increase in Hygiene, Health and Consumable Adhesives and a 2.2 percent increase in Building Adhesive Solutions, partially offset by a 1.9 percent decrease in Engineering Adhesives. The increase was drivenby a 1.7 percent increase in sales volume anda 0.2 percent increase in product pricing. The 1.2 percent decrease from M&A was due to the sale of our North American Flooring business ("NA Flooring"), discussed further in Operating Segment Results below, net of our acquisitions that occurred in the last twelve months. The negative 3.4 percent foreign currency impact was primarily driven by aweaker Euro, Egyptian pound, Brazilian real and Mexican peso compared to the U.S. dollar.

Current wording

Organic revenue increased 0.4 percent in thesecond quarter of 2025 compared to thesecond quarter of 2024 drivenby a 0.7 percent increase in product pricing, partially offset by a 0.3 percent decrease in sales volume. The 1.3 percent decrease from M&A was due to the sale of our North American Flooring business (“NA Flooring”), discussed further in Operating Segment Results below, net of acquisitions that occurred in the last twelve months. The negative 1.2 percent foreign currency impact was primarily driven by a weaker Brazilian real, Mexican peso, Egyptian pound, and Turkish lira compared to the U.S. dollar.

Previous wording

Cost of sales as a percentage of net revenue in thefirst quarter of 2025 compared to thefirst quarter of 2024 increased 70 basis points. Raw material cost as a percentage of net revenue increased 50 basis points in 2025 compared to 2024 and other manufacturing cost as a percentage of net revenue increased 20 basis points in 2025 compared to 2024.

Current wording

Cost of sales as a percentage of net revenue in thesecond quarter of 2025 compared to thesecond quarter of 2024 decreased 120 basis points. Raw material cost as a percentage of net revenue decreased 70 basis points in 2025 compared to 2024 due to the impact of acquisitions/divestitures and other manufacturing costs as a percentage of net revenue decreased 50 basis points in 2025 compared to 2024.

Previous wording

Gross profit in the first quarter of 2025 decreased 5.1 percent and gross profit margin decreased 70 basis points compared to the first quarter of 2024. The decrease in gross profit margin was due to higher raw material and other manufacturing costs.

Current wording

Gross profit in thesecond quarter of 2025 increased 1.5 percent and gross profit margin increased 110 basis points compared to thesecond quarter of 2024. The increase in gross profit margin was due to the impact of acquisitions/divestitures.

Previous wording

SG&A expenses for the first quarter of 2025 compared to the first quarter of 2024 increased 160 basis points as a percentage of net revenue. The increase was due to the impact of acquisitions, net of the sale of NA Flooring, and higher compensation costs.

Current wording

SG&A expenses for the first six months of 2025 compared to the first six months of 2024 increased 130 basis points as a percentage of net revenue. The increase was due to the impact of acquisitions/divestitures and higher compensation costs.

Previous wording

Other income, net in the first quarter of 2025 included $5.7 million of net defined benefit pension benefits and $0.6 million of currency transaction gains, partially offset by a $1.5 million loss on the sale of our North American Flooring business ("NA Flooring") and $1.6 million of other expense. Other income, net in the first quarter of 2024 included $4.0 million of net defined benefit pension benefits, partially offset by $2.1 million of currency transaction losses and a $0.4 million loss from the write-off a cost method investment.

Current wording

Other income, net in the firstsix months of 2025 included$11.4 million of net defined benefit pension benefits and$2.0 million of currency transaction gains, partially offset by a $1.5 million loss on the sale of our NA Flooring business and$1.6 million of other expense. Other income, net in the firstsix months of 2024 included$7.9 million of net defined benefit pension benefits, partially offset by$2.3 million of currency transaction losses, a $0.4 million loss from the write-off of a cost method investment and $0.1 million of other expense.

Previous wording

Interest income in the first quarter of 2025 and 2024 was $1.1 million and $1.3 million, respectively, consisting primarily of interest on cross-currency swap activity and other miscellaneous interest income.

Current wording

Interest income in thesecond quarter of 2025 and 2024 was$0.9 million and$1.2 million, respectively, consisting primarily of interest on cross-currency swap activity and other miscellaneous interest income.

Previous wording

Income tax expense of $5.9 million in the first quarter of 2025 includes $0.9 million of discrete tax expense. Excluding the discrete tax expense, the overall effective tax rate was 26.5 percent. The discrete tax expense relates to various U.S. and foreign tax matters. Income tax expense of $7.8 million in the first quarter of 2024 includes $2.5 million of discrete tax benefit. Excluding the discrete tax benefit, the overall effective tax rate was 27.4 percent. The discrete tax benefit related to various foreign tax matters, as well an excess tax benefit related to U.S. stock compensation.

Current wording

Income tax expense of$38.7 million in the firstsix months of 2025 includes$15.0 million of discrete tax expense. Excluding the discrete tax expense, the overall effective tax rate was 25.8 percent. The discrete tax expense relates tothe impact of withholding tax recorded on earnings that are no longer permanently reinvested as well as other various U.S. and foreign tax matters. Income tax expense of$30.2 million in the firstsix months of 2024 includes$1.2 million of discrete tax benefit. Excluding the discrete tax benefit, the overall effective tax rate was 28.4 percent. The discrete tax benefit related to an excess tax benefit related to U.S. stock compensation offset by various foreign tax matters.

Previous wording

The income from equity method investments relates to our 50 percent ownership of the Sekisui-Fuller joint venture in Japan. The lower income for the first quarter of 2025 compared to thefirst quarter of 2024 is due to lower net income in our joint venture during the quarter compared to the prior year and the impact of the weakening of the Japanese yen compared to the U.S. dollar.

Current wording

The income from equity method investments relates to our 50 percent ownership of the Sekisui-Fuller joint venture in Japan. The higher income for thesecond quarter of 2025 compared to thesecond quarter of 2024 is due to higher net income in our joint venture during the quarter compared to the prior yearand the impact of the strengthening of the Japanese yen compared to the U.S. dollar.

Previous wording

The net income attributable to H.B. Fuller for the first quarter of 2025 was $13.2 million compared to $31.0 million for the first quarter of 2024. The diluted earnings per share for the first quarter of 2025 was $0.24 per share as compared to $0.55 per share for the first quarter of 2024.

Current wording

The net income attributable to H.B. Fuller in thesecond quarter of 2025 was$41.8 million compared to$51.3 million in thesecond quarter of 2024. The diluted earnings per share in thesecond quarter of 2025 was$0.76 per share as compared to$0.91 per share in thesecond quarter of 2024.

Previous wording

As of November 30, 2024, our three operating segments consisted of Hygiene, Health and Consumable Adhesives, Engineering Adhesives and Construction Adhesives. As of the beginning of fiscal 2025, we reorganized our operating segments by selling our NA Flooring, previously part of the Construction Adhesives operating segment, and combining our Insulated Glass, Woodworking and Composite businesses, previously part of the Engineering Adhesives operating segment, with Construction Adhesives Roofing and Building Envelope and Infrastructure businesses to form the newly named Building Adhesive Solutions operating segment. All financial results related to NA Flooring have been moved to our Corporate Unallocated segment. Prior period segment information has been recast retrospectively to reflect the realignment.

Current wording

As of November 30, 2024, our three operating segments consisted of Hygiene, Health and Consumable Adhesives, Engineering Adhesives and Construction Adhesives. As of the beginning of fiscal 2025, we reorganized our operating segments by selling our NA Flooring business, previously part of the Construction Adhesives operating segment, and combining our Insulated Glass, Woodworking and Composite businesses, previously part of the Engineering Adhesives operating segment, with Construction Adhesives Roofing and Building Envelope and Infrastructure businesses to form the newly named Building Adhesive Solutions operating segment. All financial results related to NA Flooring have been moved to our Corporate Unallocated segment. Prior period segment information has been recast retrospectively to reflect the realignment.

Previous wording

Net revenue was flat in the first quarter of 2025 compared to the first quarter of 2024. Organic growth increased due to an increase in both sales volume and in product pricing. The negative currency effect wasdue to a weaker Egyptian pound, Brazilian real, Euro and Mexican peso compared to the U.S. dollar. As a percentage of net revenue, raw material costs increased 330 basis points due to higher raw material costs. Other manufacturing costs as a percentage of net revenue increased 80 basis points due to higher compensation and delivery costs. SG&A expenses as a percentage of net revenue increased 70 basis points due to higher compensation costs. Segment operating income decreased 36.9 percent and segment operating margin as a percentage of net revenue decreased 480 basis points compared to thefirst quarter of 2024.

Current wording

Net revenue increased 1.1 percent in thesecond quarter of 2025 compared to thesecond quarter of 2024. Organic growth increased due to an increasein both product pricing and sales volume. The 1.4 percent increase in net revenue from M&A was due to the acquisitions of GEM and Medifill in the first quarter of 2025. The negative currency effect wasdue to a weaker Brazilian real, Mexican peso, and Egyptian pound compared to the U.S. dollar. As a percentage of net revenue, raw material costs increased 100 basis points due to higher raw material costs, partially offset by the impact of acquisitions. Other manufacturing costs as a percentage of net revenue was flat compared to the prior year. SG&A expenses as a percentage of net revenue increased 80 basis points due to higher compensation costs. Segment operating income decreased 12.9 percent and segment operating margin as a percentage of net revenue decreased 180 basis points compared to thesecond quarter of 2024.

Previous wording

Net revenue increased 4.7 percent in thefirst quarter of 2025 compared to thefirst quarter of 2024. Organic growth decreased due to a decrease in both sales volume and in product pricing. The 8.7 percent increase in net revenue from M&A was due to the acquisition of ND Industries in the second quarter of 2024. The negative currency effect was due to aweaker Euro and Chinese renminbico mpared to the U.S. dollar. As a percentage of net revenue, raw material costs decreased 360 basis points due to lower raw material costs and the impact of acquisitions. Other manufacturing costs as a percentage of net revenue increased 110 basis points due to the impact of lower product pricing and sales volume as well as the impact of acquisitions. SG&A expenses as a percentage of net revenue increased 210 basis points primarily due to higher compensation. Segment operating income increased 8.5 percentand segment operating margin increased 40 basis points compared to thefirst quarter of 2024.

Current wording

Net revenue increased 6.1 percent in thefirstsix months of 2025 compared to thefirstsix months of 2024. Organic growth decreased due to a decrease insales volume. The 8.5 percent increase in net revenue from M&A was due to the acquisition of ND Industries. The negative currency effect was due toa weaker Chinese renminbi and Euro compared to the U.S. dollar. As a percentage of net revenue, raw material costs decreased 350 basis points due to lower raw material costs and the impact of acquisitions. Other manufacturing costs as a percentage of net revenue increased 90 basis points due to the impact of lower sales volume offset by acquisitions. SG&A expenses as a percentage of net revenue increased 140 basis points primarily due to higher compensation. Segment operating income increased 15.7 percentand segment operating margin increased 120 basis points compared to thefirstsix months of 2024.

Previous wording

Net revenue increased 2.2 percent in the first quarter of 2025 compared to the first quarter of 2024. Organic growth increased due to an increase insales volume, partially offset by a decrease in product pricing. The 2.4 percent increase in net revenue from M&A was due to the acquisition of HS Butyl in the third quarter of 2024. The negative currency effect was due to aweaker Euroco mpared to the U.S. dollar. As a percentage of net revenue, raw material costs decreased 20 basis points. Other manufacturing costs as a percentage of net revenue was flat compared to the first quarter of 2024. SG&A expenses as a percentage of net revenue increased 60 basis points due to higher compensation. Segment operating income decreased 8.3 percent and segment operating margin decreased 40 basis points compared to thefirst quarter of 2024.

Current wording

Net revenue increased 1.4 percent in the firstsix months of 2025 compared to the firstsix months of 2024. Organic growth increased due to an increase insales volume. The 2.3 percent increase in net revenue from M&A was due to the acquisition of HS Butyl in the third quarter of 2024. The negative currency effect was due to a weaker Euro compared to the U.S. dollar. As a percentage of net revenue, raw material costs decreased 50 basis points due to lower raw material costs. Other manufacturing costs as a percentage of net revenue was flat. SG&A expenses as a percentage of net revenue increased 70 basis points due to higher compensation. Segment operating income decreased 1.4 percent and segment operating margin decreased 20 basis points compared to thefirstsix months of 2024.

Previous wording

Segment operating loss in the first quarter of 2025 decreased 34.1 percent compared to the first quarter of 2024 due to due to the inclusion of the NA Flooring business results in 2024.

Current wording

Segment operating loss in thesecond quarter of 2025 increased 21.6 percent compared to thesecond quarter of 2024 due to the inclusion of the NA Flooring business results in 2024.

Previous wording

Total cash and cash equivalents as of March 1, 2025 were $105.7 million compared to $169.4 million as of November 30, 2024 and $165.2 million as of March 2, 2024. The majority of the $105.7 million in cash and cash equivalents as of March 1, 2025 was held outside the United States. Total long and short-term debt was $2,180.0 million as of March 1, 2025, $2,010.6 million as of November 30, 2024 and $1,830.8 million as of March 2, 2024. The total debt to total capital ratio as measured by total debt divided by total debt plus total stockholders’ equity was 55.1 percent as of March 1, 2025 as compared to 50.8 percent as of November 30, 2024 and 50.9 percent as of March 2, 2024.

Current wording

Total cash and cash equivalents as of May 31, 2025 were $96.8 million compared to $169.4 million as of November 30, 2024 and $114.8 million as of June 1, 2024. The majority of the $96.8 million in cash and cash equivalents as of May 31, 2025 was held outside the United States. Total long and short-term debt was $2,112.4 million as of May 31, 2025, $2,010.6 million as of November 30, 2024 and $2,024.9 million as of June 1, 2024. The total debt to total capital ratio as measured by total debt divided by total debt plus total stockholders’ equity was 53.0 percent as of May 31, 2025 as compared to 50.8 percent as of November 30, 2024 and 53.0 percent as of June 1, 2024.

Previous wording

Net income including non-controlling interest was $13.3 million in the first three months of 2025 compared to $31.0 million in the first three months of 2024. Depreciation and amortization expense totaled $42.6 million in the first three months of 2025 compared to $43.5 million in the first three months of 2024. Deferred income taxes was a source of cash of $5.8 million in the first three months of 2025 compared to a use of cash of $5.7 million in the first three months of 2024. Accrued compensation was a use of cash of $37.9 million in 2025 compared to $31.9 million in 2024. Other assets was a use of cash of $0.3 million in the first three months of 2025 compared to $9.1 million in the first three months of 2024. Other liabilities was a use of cash of $0.3 million in the first three months of 2025 compared to $0.4 million in the first three months of 2024.

Current wording

Net income including non-controlling interest was $55.1 million in the first six months of 2025 compared to $82.3 million in the first six months of 2024. Depreciation and amortization expense totaled $87.3 million in the first six months of 2025 compared to $84.7 million in the first six months of 2024. Deferred income taxes was a use of cash of $14.1 million in the first six months of 2025 compared to $24.1 million in the first six months of 2024. Accrued compensation was a use of cash of $23.5 million in 2025 compared to $16.4 million in 2024. Other assets was a use of cash of $4.1 million in the first six months of 2025 compared to $22.3 million in the first six months of 2024. Other liabilities was a source of cash of $24.8 million in the first six months of 2025 compared to a use of cash of $1.8 million in the first six months of 2024.

Previous wording

Changes in net working capital (trade receivables, inventory and trade payables) accounted for a use of cash of $27.5 million compared to a source of cash of $34.3 million last year. The table below provides the cash flow impact due to changes in the components of net working capital and an assessment of each of the components:

Current wording

Changes in net working capital (trade receivables, inventory and trade payables) accounted for a use of cash of $57.5 million compared to a source of cash of $4.9 million last year. The table below provides the cash flow impact due to changes in the components of net working capital and an assessment of each of the components:

Previous wording

Purchases of property, plant and equipment were $33.0 million during the first three months of 2025 compared to $43.3 million for the same period of 2024. This difference reflects the timing of capital projects and expenditures related to growth initiatives.

Current wording

Purchases of property, plant and equipment were $64.5 million during the firstsix months of 2025 compared to $90.2 million for the same period of 2024. This difference reflects the timing of capital projects and expenditures related to growth initiatives.

Previous wording

During the first three months of 2025, we paid $162.0 million of cash for business acquisitions. Additionally, we received $75.8 million in cash related to the sale of NA Flooring.

Current wording

During the first six months of 2025, we paid $162.0 million of cash for business acquisitions. Additionally, we received $75.8 million in cash related to the sale of our NA Flooring business. During the first six months of 2024, we paid $254.3 million of cash for business acquisitions.

Previous wording

In the first three months of 2025, borrowings on our revolving credit facility were $526.3 million and repayments on our revolving credit facility and our long-term debt totaled $359.5 million. These borrowings are for general working capital purposes and permitted acquisitions. Borrowings on our revolving credit facility were $195.0 and repayments on our revolving credit facility and our long-term debt totaled $203.3 million in the first three months of 2024. Net payments of notes payable were a use of cash of $0.2 million in the first three months of 2025 compared to $0.3 million in the same period of 2024. Cash dividends paid were $12.2 million in the first three months of 2025 compared to $11.2 million in the same period of 2024. Repurchases of common stock were $44.4 million in the first three months of 2025 compared to $6.2 million in the same period of 2024.

Current wording

In the firstsix months of 2025, borrowings on our revolving credit facility were $784.9 million and repayments on our revolving credit facility and our long-term debt totaled $687.8 million. These borrowings are for general working capital purposes and permitted acquisitions. Borrowings on our revolving credit facility were $1,497.0 and repayments on our revolving credit facility and our long-term debt totaled $1,305.5 million in the firstsix months of 2024. Net payments of notes payable were a use of cash of $0.6 million in the firstsix months of 2025 compared to $0.4 million in the same period of 2024. Cash dividends paid were $24.9 million in the firstsix months of 2025 compared to $23.3 million in the same period of 2024. Repurchases of common stock were $60.7 million in the firstsix months of 2025 compared to $21.8 million in the same period of 2024.