H.B. Fuller Reports Third Quarter 2014 Results

Third Quarter Adjusted Diluted EPS $0.42(1);

Third Quarter Diluted EPS $0.08;

Fourth Quarter Adjusted Diluted EPS Guidance Set At $0.60 to $0.70

ST. PAUL, Minn., Sept. 24, 2014 /PRNewswire/ -- H.B. Fuller Company FUL today reported financial results for the third quarter that ended August 30, 2014.

H.B. Fuller Company logo.

Items of Note for the Third Quarter of 2014:

  • Volume increased 2 percent compared to the prior year; organic growth outside the EIMEA region up 5 percent;
  • Completed closure of Wels, Austria production site;
  • Revised project management approach to accelerate the completion of the European business integration project and the enhancement of the SAP environment in North America;
  • After the end of the quarter, completed acquisition of ProSpec, a construction products business with strong customer relationships in key US markets.

Third Quarter 2014 Results:

Net income for the third quarter of 2014 was $4.0 million, or $0.08 per diluted share, versus net income from continuing operations of $27.2 million, or $0.53 per diluted share, in last year's third quarter. Adjusted diluted earnings per share in the third quarter of 2014 were $0.421, down versus the prior year's adjusted result of $0.741

Net revenue for the third quarter of 2014 was $526.8 million, up 2.4 percent versus the third quarter of 2013. Higher volume and foreign currency translation positively impacted net revenue growth by 2.0 and 1.1 percentage points, respectively. Lower average selling prices negatively impacted net revenue growth by 0.7 percentage points. Organic revenue grew by 1.3 percent year-over-year.

Gross profit margin was down versus the prior year's result due to a variety of factors including excess costs associated with the business integration project in Europe and Project ONE in North America and margin pressure in several operating segments related to raw material cost fluctuations. SG&A expense was well controlled, up only 2 percent versus the prior year's third quarter, excluding certain non-recurring costs1.

"The delayed and costly execution of our SAP project in North America and European business integration project led to disappointing and unacceptable results this quarter," said Jim Owens, H.B. Fuller president and chief executive officer. "We entered this fiscal year with plans that by the third quarter we would complete a major project in Europe, initiate a major systems upgrade project in North America, improve our organic growth rate and, at the same time, improve our margins and take another significant step forward toward our 2015 strategic goals. Our commitment and confidence in achieving our long term goals is clear and confirmed; however, the achievement of these goals will be delayed. We invested heavily this quarter to minimize disruptions to our customers and preserve our strong relationships and we took decisive actions to accelerate the completion of our major projects and move to normal operating conditions. More work is to be done in the fourth quarter but we expect our intensified focus on completing these projects will lead to improved operating performance in the fourth quarter and pave the way for a strong 2015, putting us back on track to achieve our long term goals of 15 percent EBITDA margin and solid organic growth."

Balance Sheet and Cash Flow:

At the end of the third quarter of 2014, we had cash totaling $76 million and total debt of $563 million. This compares to second quarter 2014 cash and debt levels of $95 million and $566 million, respectively. Sequentially, net debt was up by $16 million. Cash flow from operations was positive $21 million in the third quarter. Capital expenditures were $34 million in the third quarter, with the bulk of this spending related to our ongoing business integration activities and to support Project ONE.

Year-To-Date Results:

Net income for the first nine months of 2014 was $39.1 million, or $0.76 per diluted share, versus net income from continuing operations of $74.0 million, or $1.44 per diluted share, in the first nine months of 2013. Adjusted total diluted earnings per share in the first nine months of 2014 were $1.691, down from the prior year's result of $1.901.

Net revenue for the first nine months of 2014 was $1,556.8 million, up 2.9 percent versus the first nine months of 2013. Higher volume and foreign currency translation positively impacted net revenue growth by 3.2 and 0.3 percentage points, respectively. Lower average selling prices negatively impacted net revenue growth by 0.6 percentage points. Organic revenue grew by 2.6 percent year-over-year.

Gross profit margin for the first nine months was down relative to last year due primarily to excess costs related to ongoing project work related to the European business integration and Project ONE.  SG&A expense was down 1 percent versus the prior year reflecting tight control of discretionary expenses, excluding certain non-recurring costs1.

Project ONE and Business Integration:

Project ONE is a multi-year project to install SAP application software as our global information technology platform in four phases over several years. The initial "go live" occurred in the North America region of our Americas operating segment in April of this year. The effort required to adopt the new system and return to normal productivity levels has been longer and more costly than we had anticipated. Currently the SAP system in North America is stable and fully supporting our business, though productivity is still below expectations. To address this situation we have taken several significant steps to restructure and refocus our efforts to accelerate the productivity improvement in the North America region. In addition, we have modified our phased implementation schedule, delaying the "go live" in Latin America to mid-2015 and postponing the implementation in Europe to sometime after 2015. These changes should accelerate the productivity improvements in North America and reduce the risk of business interruption in future go-live events.

In Europe the business integration project is nearing completion. We have experienced considerable delays in the final stages of this project and the costs associated with finalizing facility closures and bringing new assets up to full capacity continue to hinder the profitability of the EIMEA segment. To address these issues we have restructured and refocused our project management teams in Europe to accelerate the completion of all project work and rapidly move to continuous improvement mode.  Completion of this project, expected by the first quarter of the 2015 fiscal year, will enable significant margin improvement and enhance our ability to drive organic growth.

Fiscal 2014 Outlook:

We are establishing fourth quarter 2014 adjusted diluted EPS guidance at a range of between $0.60 and $0.70. Our forward projection of our core tax rate remains at 29 percent; however, due to the shift in geographic mix of our profitability, we expect our core tax rate in fourth quarter of this year to be about 32 percent. Lastly, we have revised our full year capital expenditure forecast to $135 million.

Conference Call:

The Company will host an investor conference call to discuss third quarter 2014 results on Thursday, September 25, 2014, 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 at www.hbfuller.com under the Investor Relations section. 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 diluted earnings per share and earnings before interest, taxes, depreciation, and amortization (EBITDA) 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.

About H.B. Fuller Company:

For over 125 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 2013 net revenue of $2.05 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 packaging, hygiene, general assembly, electronic and assembly materials, paper converting, woodworking, construction, automotive and 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 Company's ability to effectively integrate and operate acquired businesses; 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 November 30, 2013. 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.

Maximillian Marcy

Investor Relations Contact

651-236-5062

 

H.B. FULLER COMPANY AND SUBSIDIARIES

CONSOLIDATED FINANCIAL INFORMATION

In thousands, except per share amounts (unaudited)












13 Weeks Ended


Percent of


13 Weeks Ended


Percent of


August 30, 2014


Net Revenue


August 31, 2013


Net Revenue

Net revenue

$

526,765


100.0%


$

514,579


100.0%

Cost of sales


(401,611)


(76.2%)



(370,072)


(71.9%)

Gross profit


125,154


23.8%



144,507


28.1%











Selling, general and administrative expenses


(96,779)


(18.4%)



(90,604)


(17.6%)

Special charges, net


(12,343)


(2.3%)



(12,775)


(2.5%)

Other income (expense), net


(289)


(0.1%)



(1,046)


(0.2%)

Interest expense


(5,292)


(1.0%)



(4,579)


(0.9%)

Income from continuing operations before income taxes and income from equity method investments


10,451


2.0%



35,503


6.9%











Income taxes


(8,035)


(1.5%)



(10,290)


(2.0%)











Income from equity method investments


1,668


0.3%



1,937


0.4%

Income from continuing operations


4,084


0.8%



27,150


5.3%











Income from discontinued operations, net of tax


-


0.0%



1,211


0.2%

Net income including non-controlling interests


4,084


0.8%



28,361


5.5%











Net income attributable to non-controlling interests


(97)


(0.0%)



(92)


(0.0%)

Net income attributable to H.B. Fuller

$

3,987


0.8%


$

28,269


5.5%











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










   Income from continuing operations


0.08





0.54



   Income from discontinued operations


-





0.02




$

0.08




$

0.57













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










   Income from continuing operations


0.08





0.53



   Income from discontinued operations


-





0.02




$

0.08




$

0.55













Weighted-average common shares outstanding:










  Basic


50,053





49,913



  Diluted


51,297





51,127













Dividends declared per common share

$

0.120




$

0.100













a Income per share amounts may not add due to rounding






 

 

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











August 30, 2014


November 30, 2013


August 31, 2013

Cash & cash equivalents

$

75,544


$

155,121


$

160,259

Trade accounts receivable, net


345,104



331,125



318,611

Inventories


281,265



221,537



221,256

Trade payables


212,491



201,575



169,267

Total assets


1,937,518



1,873,028



1,800,483

Total debt


562,901



492,904



493,454


 


 

H.B. FULLER COMPANY AND SUBSIDIARIES

CONSOLIDATED FINANCIAL INFORMATION

In thousands, except per share amounts (unaudited)












39 Weeks Ended


Percent of


39 Weeks Ended


Percent of


August 30, 2014


Net Revenue


August 31, 2013


Net Revenue

Net revenue

$

1,556,780


100.0%


$

1,513,437


100.0%

Cost of sales


(1,155,926)


(74.3%)



(1,088,938)


(72.0%)

Gross profit


400,854


25.7%



424,499


28.0%











Selling, general and administrative expenses


(289,950)


(18.6%)



(282,050)


(18.6%)

Special charges


(37,615)


(2.4%)



(28,951)


(1.9%)

Other income (expense), net


(1,543)


(0.1%)



(2,482)


(0.2%)

Interest expense


(14,178)


(0.9%)



(14,790)


(1.0%)

Income from continuing operations before income taxes and income from equity method investments


57,568


3.7%



96,226


6.4%











Income taxes


(23,414)


(1.5%)



(28,274)


(1.9%)











Income from equity method investments


5,205


0.3%



6,020


0.4%

Income from continuing operations


39,359


2.5%



73,972


4.9%











Income from discontinued operations


-


0.0%



1,211


0.1%

Net income including non-controlling interests


39,359


2.5%



75,183


5.0%











Net income attributable to non-controlling interests


(264)


(0.0%)



(308)


(0.0%)

Net income attributable to H.B. Fuller

$

39,095


2.5%


$

74,875


4.9%











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










   Income from continuing operations


0.78





1.48



   Income from discontinued operations


-





0.02




$

0.78




$

1.50













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










   Income from continuing operations


0.76





1.44



   Income from discontinued operations


-





0.02




$

0.76




$

1.47













Weighted-average common shares outstanding:










  Basic


49,973





49,888



  Diluted


51,242





51,102













Dividends declared per common share

$

0.340




$

0.285













a Income per share amounts may not add due to rounding




 


 

H.B. FULLER COMPANY AND SUBSIDIARIES

SEGMENT FINANCIAL INFORMATION

In thousands (unaudited)














13 Weeks Ended


13 Weeks Ended


August 30, 2014


August 31, 2013

Net Revenue:






Americas Adhesives

$

237,657


$

233,515

EIMEA


177,478



180,753

Asia Pacific


63,847



59,454

Construction Products


47,783



40,857

Total H.B. Fuller

$

526,765


$

514,579







Segment Operating Income:2






Americas Adhesives

$

21,854


$

34,871

EIMEA


3,139



14,199

Asia Pacific


897



1,564

Construction Products


2,485



3,269

Total H.B. Fuller

$

28,375


$

53,903







Depreciation Expense:






Americas Adhesives

$

4,353


$

3,710

EIMEA


4,594



3,094

Asia Pacific


1,340



1,121

Construction Products


918



816

Total H.B. Fuller

$

11,205


$

8,741







Amortization Expense:






Americas Adhesives

$

1,394


$

1,387

EIMEA


1,924



1,843

Asia Pacific


462



481

Construction Products


1,954



1,933

Total H.B. Fuller

$

5,734


$

5,644







EBITDA:3






Americas Adhesives

$

27,601


$

39,968

EIMEA


9,657



19,136

Asia Pacific


2,698



3,166

Construction Products


5,358



6,018

Total H.B. Fuller

$

45,314


$

68,288







Segment Operating Margin:4






Americas Adhesives


9.2%



14.9%

EIMEA


1.8%



7.9%

Asia Pacific


1.4%



2.6%

Construction Products


5.2%



8.0%

Total H.B. Fuller


5.4%



10.5%







EBITDA Margin:3






Americas Adhesives


11.6%



17.1%

EIMEA


5.4%



10.6%

Asia Pacific


4.2%



5.3%

Construction Products


11.2%



14.7%

Total H.B. Fuller


8.6%



13.3%







Net Revenue Growth:






Americas Adhesives


1.8%




EIMEA


(1.8%)




Asia Pacific


7.4%




Construction Products


17.0%




Total H.B. Fuller


2.4%





 


 



H.B. FULLER COMPANY AND SUBSIDIARIES

SEGMENT FINANCIAL INFORMATION

In thousands (unaudited)














39 Weeks Ended


39 Weeks Ended


August 30, 2014


August 31, 2013

Net Revenue:






Americas Adhesives

$

684,308


$

670,019

EIMEA


538,693



543,448

Asia Pacific


196,842



182,148

Construction Products


136,937



117,822

Total H.B. Fuller

$

1,556,780


$

1,513,437







Segment Operating Income:2






Americas Adhesives

$

78,949


$

92,621

EIMEA


21,735



34,817

Asia Pacific


4,443



6,331

Construction Products


5,777



8,680

Total H.B. Fuller

$

110,904


$

142,449







Depreciation Expense:






Americas Adhesives

$

12,284


$

11,214

EIMEA


11,895



9,745

Asia Pacific


3,930



3,419

Construction Products


2,684



2,444

Total H.B. Fuller

$

30,793


$

26,822







Amortization Expense:






Americas Adhesives

$

4,182


$

3,926

EIMEA


5,815



5,589

Asia Pacific


1,453



1,441

Construction Products


5,861



5,790

Total H.B. Fuller

$

17,311


$

16,746







EBITDA:3






Americas Adhesives

$

95,415


$

107,761

EIMEA


39,445



50,151

Asia Pacific


9,826



11,191

Construction Products


14,322



16,914

Total H.B. Fuller

$

159,008


$

186,017







Segment Operating Margin:4






Americas Adhesives


11.5%



13.8%

EIMEA


4.0%



6.4%

Asia Pacific


2.3%



3.5%

Construction Products


4.2%



7.4%

Total H.B. Fuller


7.1%



9.4%







EBITDA Margin:3






Americas Adhesives


13.9%



16.1%

EIMEA


7.3%



9.2%

Asia Pacific


5.0%



6.1%

Construction Products


10.5%



14.4%

Total H.B. Fuller


10.2%



12.3%







Net Revenue Growth:






Americas Adhesives


2.1%




EIMEA


(0.9%)




Asia Pacific


8.1%




Construction Products


16.2%




Total H.B. Fuller


2.9%




 



H.B. FULLER COMPANY AND SUBSIDIARIES

SEGMENT FINANCIAL INFORMATION

NET REVENUE GROWTH

(unaudited)











13 Weeks Ended August 30, 2014












Americas

Adhesives


EIMEA


Asia

Pacific


Construction

Products


Total HBF

Price

(1.6%)


0.4%


0.3%


(1.5%)


(0.7%)

Volume

3.6%


(5.4%)


6.7%


18.5%


2.0%

  Organic Growth

2.0%


(5.0%)


7.0%


17.0%


1.3%











F/X

(0.2%)


3.2%


0.4%


0.0%


1.1%


1.8%


(1.8%)


7.4%


17.0%


2.4%









































39 Weeks Ended August 30, 2014












Americas

Adhesives


EIMEA


Asia

Pacific


Construction

Products


Total HBF

Price

(1.3%)


0.5%


(0.1%)


(3.0%)


(0.6%)

Volume

3.8%


(3.5%)


10.7%


19.2%


3.2%

  Organic Growth

2.5%


(3.0%)


10.6%


16.2%


2.6%











F/X

(0.4%)


2.1%


(2.5%)


0.0%


0.3%


2.1%


(0.9%)


8.1%


16.2%


2.9%

 



 


H.B. FULLER COMPANY AND SUBSIDIARIES

REGULATION G RECONCILIATION

In thousands (unaudited)














13 Weeks Ended


13 Weeks Ended


August 30, 2014


August 31, 2013

Net income including non-controlling interests

$

4,084


$

28,361







Income from discontinued operations


-



(1,211)

Income from equity method investments


(1,668)



(1,937)

Income taxes


8,035



10,290

Interest expense


5,292



4,579

Other income (expense), net


289



1,046

Special charges


12,343



12,775







Segment operating income2


28,375



53,903







Depreciation expense


11,205



8,741

Amortization expense


5,734



5,644







EBITDA3

$

45,314


$

68,288







EBITDA margin3


8.6%



13.3%














39 Weeks Ended


39 Weeks Ended


August 30, 2014


August 31, 2013

Net income including non-controlling interests

$

39,359


$

75,183







Income from discontinued operations


-



(1,211)

Income from equity method investments


(5,205)



(6,020)

Income taxes


23,414



28,274

Interest expense


14,178



14,790

Other income (expense), net


1,543



2,482

Special charges


37,615



28,951







Segment operating income2


110,904



142,449







Depreciation expense


30,793



26,822

Amortization expense


17,311



16,746







EBITDA3

$

159,008


$

186,017







EBITDA margin3


10.2%



12.3%

 


 







H.B. FULLER COMPANY AND SUBSIDIARIES

REGULATION G RECONCILIATION

In thousands (unaudited)














13 Weeks Ended


13 Weeks Ended


August 30, 2014


August 31, 2013

Net revenue

$

526,765


$

514,579

Cost of sales


(401,611)



(370,072)







Gross profit


125,154



144,507







Selling, general and administrative expenses


(96,779)



(90,604)







Segment operating income2


28,375



53,903







Depreciation expense


11,205



8,741

Amortization expense


5,734



5,644







EBITDA3

$

45,314


$

68,288







EBITDA margin3


8.6%



13.3%














39 Weeks Ended


39 Weeks Ended


August 30, 2014


August 31, 2013

Net revenue

$

1,556,780


$

1,513,437

Cost of sales


(1,155,926)



(1,088,938)







Gross profit


400,854



424,499







Selling, general and administrative expenses


(289,950)



(282,050)







Segment operating income2


110,904



142,449







Depreciation expense


30,793



26,822

Amortization expense


17,311



16,746







EBITDA3

$

159,008


$

186,017







EBITDA margin3


10.2%



12.3%






















H.B. FULLER COMPANY AND SUBSIDIARIES

REGULATION G RECONCILIATION

In thousands, except per share amounts (unaudited)










Adjusted




13 Weeks Ended




13 Weeks Ended




August 30, 2014


Adjustments


August 30, 2014

Net revenue



$

526,765


$

-


$

526,765

Cost of sales




(401,611)



(5,337)



(396,274)

Gross profit




125,154



(5,337)



130,491












Selling, general and administrative expenses




(96,779)



(4,543)



(92,236)












  Acquisition and transformation related costs


(1,864)









  Workforce reduction costs


55









  Facility exit costs


(8,802)









  Other related costs


(1,732)









Special charges, net




(12,343)



(12,343)



-












Other income (expense), net




(289)



-



(289)

Interest expense




(5,292)



-



(5,292)

Income before income taxes and income from equity method investments




10,451



(22,223)



32,674












Income taxes




(8,035)



4,531



(12,566)












Income from equity method investments




1,668



-



1,668

Net income including non-controlling interests




4,084



(17,692)



21,776












Net income attributable to non-controlling interests




(97)



-



(97)

Net income attributable to H.B. Fuller



$

3,987


$

(17,692)


$

21,679












Basic income (loss) per common share attributable to H.B. Fuller



$

0.08


$

(0.35)


$

0.43












Diluted income (loss) per common share attributable to H.B. Fuller



$

0.08


$

(0.34)


$

 0.42 1












Weighted-average common shares outstanding:











  Basic




50,053



50,053



50,053

  Diluted




51,297



51,297



51,297


 


 

H.B. FULLER COMPANY AND SUBSIDIARIES

REGULATION G RECONCILIATION

In thousands, except per share amounts (unaudited)



















Adjusted



13 Weeks Ended




13 Weeks Ended



August 31, 2013


Adjustments


August 31, 2013

Net revenue


$

514,579


$

-


$

514,579

Cost of sales



(370,072)



(1,098)



(368,974)











Gross profit



144,507



(1,098)



145,605











Selling, general and administrative expenses



(90,604)






(90,604)











Acquisition and transformation related costs

(1,641)









Workforce reduction costs

(3,212)









Facility exit costs

(5,118)









Other related costs

(2,804)









Special charges, net



(12,775)



(12,775)



-











Other income (expense), net



(1,046)



-



(1,046)

Interest expense



(4,579)



-



(4,579)

Income from continuing operations before income taxes and income from equity method investments



35,503



(13,873)



49,376











Income taxes



(10,290)



3,262



(13,552)











Income from equity method investments



1,937



-



1,937

Net income from continuing operations



27,150



(10,611)



37,761











Income from discontinued operations



1,211



1,211



-

Net income including non-controlling interests



28,361



(9,400)



37,761











Net income attributable to non-controlling interests



(92)



-



(92)

Net income attributable to H.B. Fuller


$

28,269


$

(9,400)


$

37,669











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










   Income from continuing operations



0.54



(0.21)



0.75

   Income from discontinued operations



0.02



0.02



-


$

0.57


$

(0.19)


$

0.75











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










   Income from continuing operations



0.53



(0.21)



 0.74 1

  Income from discontinued operations



0.02



0.02



-


$

0.55


$

(0.18)


$

0.74











Weighted-average common shares outstanding:










  Basic



49,913



49,913



49,913

  Diluted



51,127



51,127



51,127











a  Income per share amounts may not add due to rounding


 


 

H.B. FULLER COMPANY AND SUBSIDIARIES

REGULATION G RECONCILIATION

In thousands, except per share amounts (unaudited)









Adjusted



39 Weeks Ended




39 Weeks Ended



August 30, 2014


Adjustments


August 30, 2014

Net revenue


$

1,556,780


$

-


$

1,556,780

Cost of sales



(1,155,926)



(12,022)



(1,143,904)

Gross profit



400,854



(12,022)



412,876











Selling, general and administrative expenses



(289,950)



(10,502)



(279,448)











  Acquisition and transformation related costs

(6,150)









  Workforce reduction costs

(2,903)









  Facility exit costs

(21,254)









  Other related costs

(7,308)









Special charges



(37,615)



(37,615)



-











Other income (expense), net



(1,543)



-



(1,543)

Interest expense



(14,178)



-



(14,178)

Income before income taxes and income from equity method investments



57,568



(60,139)



117,707











Income taxes



(23,414)



12,411



(35,825)











Income from equity method investments



5,205



-



5,205

Net income including non-controlling interests



39,359



(47,728)



87,087











Net income attributable to non-controlling interests



(264)



-



(264)

Net income attributable to H.B. Fuller


$

39,095


$

(47,728)


$

86,823











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


$

0.78


$

(0.96)


$

1.74











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


$

0.76


$

(0.93)


$

 1.69 1

Weighted-average common shares outstanding:










  Basic



49,973



49,973



49,973

  Diluted



51,242



51,242



51,242


 


 


H.B. FULLER COMPANY AND SUBSIDIARIES

REGULATION G RECONCILIATION

In thousands, except per share amounts (unaudited)



















Adjusted



39 Weeks Ended




39 Weeks Ended



August 31, 2013


Adjustments


August 31, 2013

Net revenue


$

1,513,437


$

-


$

1,513,437

Cost of sales



(1,088,938)



(1,098)



(1,087,840)











Gross profit



424,499



(1,098)



425,597











Selling, general and administrative expenses



(282,050)






(282,050)











Acquisition and transformation related costs

(5,807)









Workforce reduction costs

(7,393)









Facility exit costs

(10,174)









Other related costs

(5,577)









Special charges



(28,951)



(28,951)



-











Other income (expense), net



(2,482)






(2,482)

Interest expense



(14,790)






(14,790)

Income from continuing operations before income taxes and income from equity method investments



96,226



(30,049)



126,275











Income taxes



(28,274)



6,829



(35,103)











Income from equity method investments



6,020



-



6,020

Income from continuing operations



73,972



(23,220)



97,192











Income from discontinued operations



1,211



1,211



-











Net income including non-controlling interests



75,183



(22,009)



97,192











Net income attributable to non-controlling interests



(308)



-



(308)

Net income attributable to H.B. Fuller


$

74,875


$

(22,009)


$

96,884











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










   Income from continuing operations



1.48



(0.47)



1.94

   Income from discontinued operations



0.02



0.02



-


$

1.50


$

(0.44)


$

1.94











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










   Income from continuing operations



1.44



(0.45)



 1.90  1

   Income from discontinued operations



0.02



0.02



-


$

1.47


$

(0.43)


$

1.90











Weighted-average common shares outstanding:










  Basic



49,888



49,888



49,888

  Diluted



51,102



51,102



51,102











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 August 30, 2014


13 weeks ended August 31, 2013



Income








Income









before



Income


Diluted


before



Income


Diluted



Income Tax



Taxes


EPSa


Income Tax



Taxes


EPS

GAAP Earnings


$

12,022


$

8,035


$

0.08


$

37,348


$

10,290


$

0.53




















Special charges, net



12,343



1,406



0.21



12,775



3,031



0.19

Other business integration costs



1,896



144



0.03



-



-



-

Project ONE



7,692



2,931



0.09



-



-



-

Acquisition project costs



292



50



-



-



-



-

Other



-



-



-



1,098



231



0.02

Adjusted Earnings


$

34,245


$

12,566


$

0.42


$

51,221


$

13,552


$

0.74









































39 weeks ended August 30, 2014


39 weeks ended August 31, 2013



Income








Income









before



Income


Diluted


before



Income


Diluted



Income Tax



Taxes


EPS


Income Tax



Taxes


EPS

GAAP Earnings


$

62,509


$

23,414


$

0.76


$

101,938


$

28,274


$

1.44




















Special charges, net



37,615



5,303



0.63



28,951



6,598



0.44

Other business integration costs



5,392



867



0.09



-



-



-

Project ONE



15,799



6,020



0.19



-



-



-

Acquisition project costs



1,333



221



0.02



-



-



-

Other



-



-



-



1,098



231



0.02

Adjusted Earnings


$

122,648


$

35,825


$

1.69


$

131,987


$

35,103


$

1.90




















a  Income per share amounts may not add due to rounding

 







1

Adjusted diluted earnings per share (EPS) is a non-GAAP financial measure and excludes items listed on the adjusted earnings per share reconciliation table above which excludes: special charges associated with two previously announced events: the EIMEA business transformation project and the expenses associated with the Forbo acquisition integration project, which have been combined and are now referred to as the "business integration"; additional costs associated with the Company's ongoing Project ONE implementation; and acquisition project costs.

2

Segment operating income is defined as gross profit less SG&A expense. Items that are reported on the special charges line of the income statement are excluded from the segment operating income calculation.

3

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. On a segment basis it is defined as operating income, plus depreciation expense, plus amortization expense. EBITDA margin is defined as EBITDA divided by net revenue.

4

Segment operating margin is a non-GAAP financial measure defined as gross profit, less SG&A expense, divided by net revenue.

Photo - http://photos.prnewswire.com/prnh/20110215/CG49203LOGO

SOURCE H.B. Fuller Company

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