H.B. FULLER COMPANY 
By ST. PAUL, Minn., Jan. 15, 2014 /PRNewswire/ -- H.B. Fuller Company (NYSE: FUL) today reported financial results for the fourth quarter that ended November 30, 2013 and guidance for 2014:
(Logo: http://photos.prnewswire.com/prnh/20110215/CG49203LOGO)
Items of Note for 2014 Guidance:
-- Adjusted diluted EPS projected at between $3.00 and $3.15, an increase
of 16 to 22 percent over 2013;
-- EBITDA margin improves to 14 percent, up 150 basis points from the prior
year;
-- Business continues to be on track to deliver 2015 strategic targets;
-- Company will launch important information technology project and
complete business integration;
-- Core tax rate 30 percent.
Items of Note for the Fourth Quarter of 2013:
-- Organic revenue increased by 3.6 percent compared to the prior year, the
highest quarterly organic growth rate of the year;
-- Contribution margin was strong and consistent with prior quarters, but
additional non-recurring manufacturing costs totaling about $4 million
in the fourth quarter, primarily in facilities involved in the business
integration project, caused gross profit margin to fall below the recent
trend line;
-- Selling, General and Administrative (SG&A) expenses were tightly
controlled, in line with internal plans, and about 3 percent lower than
the prior year's fourth quarter;
-- Adjusted diluted EPS of $0.68(1) was up 6 percent versus last year.
Items of Note for the Full-Year 2013:
-- Achieved record levels of net revenue, operating income and adjusted
diluted EPS;
-- Organic revenue increased about 2 percent, despite ongoing weakness in
European end-markets;
-- Adjusted EBITDA margin(1,2) of 12.5 percent was 80 basis points above
last year and in line with the Company's strategic plan to achieve 15
percent EBITDA margin in 2015;
-- Adjusted segment operating income(1,3) increased 19 percent
year-over-year;
-- Adjusted diluted EPS(1) grew 17 percent year-over-year and, since 2010
our adjusted diluted EPS has increased at a compound annual rate of 17
percent.
Fiscal 2014 Outlook:
Our 2014 fiscal year represents the fourth year of our current, transformational five-year plan. We expect to take further significant steps toward our 2015 goals this year, following on the success of the prior three years. Our key long-term financial objectives remain unchanged: achieve organic revenue growth of between 5 and 8 percent per annum, increase our EBITDA margin to 15 percent by 2015, grow EPS by 15 percent per annum and increase Return on Invested Capital (ROIC) to 15 percent by 2015.
In 2014, we expect revenue growth at the low end of our long-term growth targets of 5 to 8 percent. We expect our recent momentum in the Asia Pacific and Construction Products operating segments to lead our growth this year. Our gross profit margin is expected to increase in 2014, primarily driven by the cost benefits that will be realized upon the completion of the business integration project in Europe. SG&A expenses should increase at a rate below the increase in net revenue. Overall, we expect our EBITDA margin(2) to be about 14 percent for the full year, about 150 basis points higher than the level in the 2013 fiscal year. Our core tax rate should remain steady at about 30 percent, excluding the impact of discrete items. Finally, our adjusted diluted EPS for the year is expected to fall within a range of $3.00 and $3.15 per diluted share, representing an increase of between 16 and 22 percent over 2013. We expect our financial performance to improve as the fiscal year progresses and anticipate that our first quarter adjusted diluted EPS will be about $0.50 per share.
Our core capital expenditures to fund ongoing operations will be about $45 million, representing about 2 percent of net revenue and in line with our long-term strategic cash generation model. We expect capital expenditures for Project ONE, which is described later in this release, to be about $20 million in 2014, and the completion of the business integration project to add $40 million to our capital expenditure plan, bringing the total 2014 capital spend to $105 million. In 2015, our capital expenditures should move toward normal levels, or about 2 percent of net revenue plus any residual capital requirements for Project ONE.
Fiscal 2013 Performance Compared to Initial Guidance and Prior Year:
"We are pleased with our 2013 financial results which demonstrate solid operational improvement and another step towards our 2015 targets," said Jim Owens, H. B. Fuller president and chief executive officer. "In the midst of a major business integration and weaker than expected end-market conditions in some key markets, our team delivered solid results. We delivered record revenue and grew organically for the fourth year in a row with stronger organic growth at the end of the year. We significantly improved our EBITDA margin toward our strategic target of 15 percent and delivered another year of record earnings per share. We are still gaining momentum as we complete our business integration in EIMEA, which we anticipate to finish by the middle of the 2014 fiscal year. Our 2014 fiscal year guidance indicates that we are on track to achieve the key performance metrics established in our five-year plan."
At the beginning of the 2013 fiscal year we communicated an aggressive plan, along with financial projections (guidance), for several key financial metrics. These projections were provided in our quarterly earnings press releases, quarterly conference calls and during our investor conference held in February of 2013. The table below shows our actual results in 2013 relative to our original projections and guidance and the prior year.
Metric 2012 2013 Actual 2013 Projected
------ ---- ----------- --------------
Revenue $1,886 million $2,047 million $2,074-$2,115 million
(Organic Revenue
Growth) (Up 1.6%) (Up 3% to 5%)
---------------- -------- ------------
Adjusted EBITDA1,2 $220.3 million $255.4 million $260 - $265 million
------------------ -------------- -------------- -------------------
Adjusted EBITDA
Margin1,2 11.7% 12.5% 12.5%
--------------- ---- ---- ----
Adjusted Diluted
EPS(1) $2.20 $2.58 $2.55 to $2.65
---------------- ----- ----- --------------
EIMEA Q4 EBITDA
Margin(2) 9.4% 11.5% 12%
--------------- --- ---- ---
Core Tax Rate 30% 30% 30%
------------- --- --- ---
Capex $39 million $124 million $110 million
----- ----------- ------------ ------------
Our actual performance in the year tracked very closely to our original projections and is in-line with our current five-year plan and the related 2015 financial targets. The most significant variance from our original projections is that our organic revenue growth was lower than expected, primarily due to weak end-market conditions in Europe. Despite lower than expected revenue growth we achieved our target for adjusted EBITDA margin(1,2) for the year at 12.5 percent. The fourth quarter EBITDA margin in our EIMEA segment of 11.5 percent was up 210 basis points relative to the prior year but was a bit short of our 12 percent target, mostly due to temporarily higher than expected non-recurring manufacturing costs in the fourth quarter related to the business integration project. Our capital expenditures were slightly higher than the original forecast, due to the ramp up of our information technology project that we call Project ONE, which is described later in this release, and was not included in our original guidance.
Fourth Quarter 2013 Results:
Income from continuing operations for the fourth quarter of 2013 was $22.0 million, or $0.43 per diluted share, versus income from continuing operations of $25.0 million, or $0.49 per diluted share, in last year's fourth quarter. Adjusted diluted earnings per share in the fourth quarter of 2013 were $0.68(1), up 6 percent from the prior year's adjusted result of $0.64(1).
Net revenue for the fourth quarter of 2013 was $533.5 million, up 4.0 percent versus the fourth quarter of 2012. Higher volume and positive foreign currency translation positively impacted net revenue growth by 4.2 and 0.4 percentage points, respectively. Lower average selling prices negatively impacted net revenue growth by 0.6 percentage points. Organic revenue grew by 3.6 percent year-over-year.
Gross profit margin was down approximately 100 basis points from the prior quarter's adjusted result(1). The drop in gross profit margin was the primary reason the operating earnings and adjusted diluted EPS fell short of the guidance the Company provided at the end of the third quarter. About $4 million of additional and non-recurring manufacturing costs were incurred in the quarter, primarily in facilities involved in the business integration project, and this accounted for essentially all of the gross profit margin shortfall. Contribution margin (defined as net revenue less the cost of raw materials, containers and delivery expense) in the quarter was essentially flat relative to the prior quarter and full-year average and in line with internal expectations. Also, Selling, General and Administrative (SG&A) expense was in line with the Company's expectations for the quarter, down by 3 percent, or 120 basis points as a percentage of net revenue, versus the prior years fourth quarter.
Balance Sheet and Cash Flow:
At the end of the fourth quarter of 2013, the Company had cash totaling $155 million and total debt of $493 million. This compares to third quarter 2013 levels of $160 million and $493 million, respectively. Sequentially, net debt was up by approximately $5 million. Capital expenditures were $42 million in the fourth quarter and $124 million for the year, with the bulk of this spending related to the Company's ongoing business integration activities. Operating cash flow in the fourth quarter was $43 million.
Fiscal Year 2013 Results:
Income from continuing operations for the 2013 fiscal year was $96.0 million, or $1.87 per diluted share, versus income from continuing operations of $68.3 million, or $1.34 per diluted share, in the 2012 fiscal year. Adjusted total diluted earnings per share from continuing operations in 2013 were $2.58(1), up 17 percent from the prior year's result of $2.20(1).
Net revenue for the 2013 fiscal year was $2,047.0 million, up 8.5 percent versus the 2012 fiscal year. Higher volume, higher average selling prices, positive foreign currency translation and acquisitions positively impacted net revenue growth by 1.5, 0.1, 0.4 and 6.5 percentage points, respectively. Organic revenue grew by 1.6 percent year-over-year.
Adjusted Gross profit margin(1) was up approximately 30 basis points relative to last year, benefitting from generally favorable raw material cost development and savings from the business integration activity. Selling, General and Administrative (SG&A) expense was up by 6 percent, but down 50 basis points as a percentage of net revenue versus the prior year, approaching the Company's long-term target level of 18 percent.
Business Integration and Special Charges:
We have been working on a comprehensive business integration project since March of 2012 to fully assimilate the Forbo industrial adhesives business and to improve the operating performance of our legacy EIMEA operating segment. We expect to complete the bulk of this project in the summer of 2014. The table below shows the expected costs for the business integration project that we communicated at the inception of the project and our current cost estimates related to the project. Our estimate of the total cash costs to execute the project has not changed. However, we now expect to spend slightly less on workforce reduction, offset by slightly higher spending in our "other" category. The non-cash costs have been revised upward by about $4 million. All of the figures below represent our best estimate of the costs to be incurred through the completion of the project.
Initial Current ____ Actual Costs
Incurred________
Expected Expected
Costs Costs
----- -----
Q4 2013 FY 2013 Inception
------- ------- ---------
Cost Elements ($ millions) ($ millions) ($ millions) ($ millions) ($ millions)
-------------
Acquisition and transformation 35 35 3 8 34
Workforce reduction 53 46 2 10 38
Facility exit 17 17 5 12 13
Other 10 17 3 9 11
--- --- --- --- ---
Total cash costs 115 115 13 39 96
Total non-cash costs 6 10 3 6 9
--- --- ---
Project ONE:
Following the acquisition of the Forbo industrial adhesives business we formed a team to evaluate our existing information technology platforms in order to develop a more efficient infrastructure to support our integrated business in the future. As a result, our Board of Directors has approved a multi-year project to replace and enhance our existing core information technology platforms with SAP application software. The scope for this project includes most of the basic transaction processing for the company, including customer orders, procurement, manufacturing, and financial reporting. The project envisions harmonized business processes for all of our operating segments supported with one standard software configuration. The execution of this project, which we will refer to as "Project ONE", is being supported by consulting services provided by Accenture. The key metrics and milestones for the project include:
-- The project will be completed by the end of fiscal year 2016;
-- Total capital expenditures over the life of the project are estimated at
$60 million, of which $22 million has been spent to date; $4 million in
project expense was absorbed in 2013, and we anticipate a similar amount
of project expense in 2014;
-- Roll out of the new platform will be accomplished in four waves
generally aligned to geographic regions; the first "go live" will be in
the USA and Canada geography of our Americas Adhesives operating segment
before the end of June 2014;
-- We anticipate obtaining significant tangible and intangible benefits
following the completion of this project in 2016. We expect cost savings
in the areas of procurement, processing of transactions and support of
our information technology infrastructure. In addition, the system will
enable us to manage inventory more efficiently. Overall, the project is
expected to earn a return on investment well in excess our internal
hurdle rates.
Conference Call:
The Company will host an investor conference call to discuss fourth quarter 2013 results on Thursday, January 16, 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, segment operating margin, adjusted diluted earnings per share from continuing operations 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. Recognized for unmatched technical support and innovation, H.B. Fuller brings knowledge and expertise to help its customers find precisely the right formulation for the right performance. With fiscal 2013 net revenue of over $2 billion, H.B. Fuller serves customers in packaging, hygiene, general assembly, electronic materials and assembly, paper converting, woodworking, construction, automotive and consumer businesses. 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-Q filings of September 27, June 28 and March 29, 2013 and 10-K filing for the fiscal year ended December 1, 2012. 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
November 30, 2013 Net Revenue December 1, 2012 Net Revenue
----------------- ----------- ---------------- -----------
Net revenue $533,531 100.0% $513,255 100.0%
Cost of sales (387,859) (72.7%) (369,541) (72.0%)
-------- ------ -------- ------
Gross profit 145,672 27.3% 143,714 28.0%
Selling, general and
administrative
expenses (92,619) (17.4%) (95,395) (18.6%)
Special charges, net (16,136) (3.0%) (9,204) (1.8%)
Asset impairment
charges - 0.0% (846) (0.2%)
Other income
(expense), net (1,269) (0.2%) 759 0.1%
Interest expense (4,330) (0.8%) (5,476) (1.1%)
------ ----- ------ -----
Income from
continuing
operations before
income taxes and
income from equity
method investments 31,318 5.9% 33,552 6.5%
Income taxes (11,675) (2.2%) (11,191) (2.2%)
Income from equity
method investments 2,360 0.4% 2,651 0.5%
----- --- ----- ---
Income from
continuing
operations 22,003 4.1% 25,012 4.9%
Income from
discontinued
operations, net of
tax - 0.0% 182 0.0%
--- --- --- ---
Net income including
non-controlling
interests 22,003 4.1% 25,194 4.9%
Net income
attributable to
non-controlling
interests (117) (0.0%) (82) (0.0%)
---- ----- --- -----
Net income
attributable
to H.B.
Fuller $21,886 4.1% $25,112 4.9%
======= === ======= ===
Basic income per
common share
attributable to
H.B. Fullera
Income from
continuing
operations 0.44 0.50
Income from
discontinued
operations - 0.00
--- ----
$0.44 $0.51
===== =====
Diluted income per
common share
attributable to
H.B. Fullera
Income from
continuing
operations 0.43 0.49
Income from
discontinued
operations - 0.00
--- ----
$0.43 $0.49
===== =====
Weighted-average
common shares
outstanding:
Basic 49,909 49,640
Diluted 51,236 50,798
Dividends
declared per
common share $0.010 $0.085
Selected Balance Sheet Information (subject to change prior to filing of the Company's Annual Report on Form 10-K)
-----------------------------------------------------------------------------------------------------------------
November 30, 2013 December 1, 2012 December 3, 2011
----------------- ---------------- ----------------
Cash &
cash
equivalents $155,121 $200,436 $154,649
Trade accounts
receivable,
net 331,125 320,152 217,424
Inventories 221,537 208,531 116,443
Trade payables 201,575 163,062 104,418
Total assets 1,873,028 1,786,320 1,227,709
Total debt 492,904 520,225 232,296
a Income per share amounts may not add due to rounding
H.B. FULLER COMPANY AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
In thousands, except per share amounts (unaudited)
52 Weeks Ended Percent of 52 Weeks Ended Percent of
November 30, 2013 Net Revenue December 1, 2012 Net Revenue
----------------- ----------- ---------------- -----------
Net revenue $2,046,968 100.0% $1,886,239 100.0%
Cost of sales (1,476,797) (72.1%) (1,368,963) (72.6%)
---------- ------ ---------- ------
Gross profit 570,171 27.9% 517,276 27.4%
Selling, general
and administrative
expenses (374,669) (18.3%) (354,735) (18.8%)
Special charges (45,087) (2.2%) (52,467) (2.8%)
Asset impairment
charges - 0.0% (1,517) (0.1%)
Other income
(expense), net (3,751) (0.2%) 784 0.0%
Interest expense (19,120) (0.9%) (19,793) (1.0%)
------- ----- ------- -----
Income from
continuing
operations before
income taxes and
income from equity
method investments 127,544 6.2% 89,548 4.7%
Income taxes (39,949) (2.0%) (30,479) (1.6%)
Income from equity
method investments 8,380 0.4% 9,218 0.5%
----- --- ----- ---
Income from
continuing
operations 95,975 4.7% 68,287 3.6%
Income from
discontinued
operationsa 1,211 0.1% 57,568 3.1%
----- --- ------ ---
Net income
including non-
controlling
interests 97,186 4.7% 125,855 6.7%
Net (income) loss
attributable to
non-controlling
interests (425) (0.0%) (233) (0.0%)
---- ----- ---- -----
Net income
attributable
to H.B.
Fuller $96,761 4.7% $125,622 6.7%
======= === ======== ===
Basic income per
common share
attributable to
H.B. Fuller
Income from
continuing
operations 1.92 1.37
Income from
discontinued
operations 0.02 1.16
---- ----
$1.94 $2.53
===== =====
Diluted income per
common share
attributable to
H.B. Fuller
Income from
continuing
operations 1.87 1.34
Income from
discontinued
operations 0.02 1.14
---- ----
$1.89 $2.48
===== =====
Weighted-average
common shares
outstanding:
Basic 49,893 49,571
Diluted 51,136 50,618
Dividends
declared per
common share $0.385 $0.330
a Fiscal 2012 includes the gain on sale of discontinued operations of $51,060, net of tax of $15,119
H.B. FULLER COMPANY AND SUBSIDIARIES
SEGMENT FINANCIAL INFORMATION
In thousands (unaudited)
The Company has realigned its regional reporting to reflect the current organization structure and
management accountability. Reconciliations are provided on pages 19 and 20.
13 Weeks Ended 13 Weeks Ended
November 30, 2013 December 1, 2012
----------------- ----------------
Net Revenue:
Americas
Adhesives $232,554 $223,179
Construction Products 40,754 37,317
EIMEA 189,763 190,336
Asia Pacific 70,460 62,423
------ ------
Total H.B.
Fuller $533,531 $513,255
======== ========
Segment Operating
Income:3
Americas
Adhesives $30,644 $29,853
Construction Products 2,260 3,415
EIMEA 16,709 12,181
Asia Pacific 3,440 2,870
----- -----
Total H.B.
Fuller $53,053 $48,319
======= =======
Depreciation Expense:
Americas
Adhesives $4,267 $4,184
Construction Products 852 807
EIMEA 3,165 3,850
Asia Pacific 1,181 1,228
----- -----
Total H.B.
Fuller $9,465 $10,069
====== =======
Amortization Expense:
Americas
Adhesives $1,425 $1,301
Construction Products 1,935 1,919
EIMEA 1,921 1,799
Asia Pacific 481 471
--- ---
Total H.B.
Fuller $5,762 $5,490
====== ======
EBITDA:2
Americas
Adhesives $36,336 $35,338
Construction Products 5,047 6,141
EIMEA 21,795 17,830
Asia Pacific 5,102 4,569
----- -----
Total H.B.
Fuller $68,280 $63,878
======= =======
Segment Operating
Margin:4
Americas Adhesives 13.2% 13.4%
Construction Products 5.5% 9.2%
EIMEA 8.8% 6.4%
Asia Pacific 4.9% 4.6%
--- ---
Total H.B. Fuller 9.9% 9.4%
=== ===
EBITDA Margin:2
Americas Adhesives 15.6% 15.8%
Construction Products 12.4% 16.5%
EIMEA 11.5% 9.4%
Asia Pacific 7.2% 7.3%
--- ---
Total H.B. Fuller 12.8% 12.4%
==== ====
Net Revenue Growth:
Americas Adhesives 4.2%
Construction Products 9.2%
EIMEA (0.3%)
Asia Pacific 12.9%
----
Total H.B. Fuller 4.0%
===
H.B. FULLER COMPANY AND SUBSIDIARIES
SEGMENT FINANCIAL INFORMATION
In thousands (unaudited)
The Company has realigned its regional reporting to reflect the current organization structure and management
accountability. Reconciliations are provided on pages 19 and 20.
52 Weeks Ended 52 Weeks Ended
November 30, 2013 December 1, 2012
----------------- ----------------
Net Revenue:
Americas Adhesives $902,573 $838,615
Construction Products 158,576 147,080
EIMEA 733,211 672,423
Asia Pacific 252,608 228,121
------- -------
Total H.B. Fuller $2,046,968 $1,886,239
========== ==========
Segment Operating Income:3
Americas Adhesives $123,265 $112,368
Construction Products 10,940 8,334
EIMEA 51,526 34,483
Asia Pacific 9,771 7,356
----- -----
Total H.B. Fuller $195,502 $162,541
======== ========
Depreciation Expense:
Americas Adhesives $15,481 $15,126
Construction Products 3,296 3,352
EIMEA 12,910 12,746
Asia Pacific 4,600 4,563
----- -----
Total H.B. Fuller $36,287 $35,787
======= =======
Amortization Expense:
Americas Adhesives $5,351 $3,726
Construction Products 7,725 7,649
EIMEA 7,510 5,653
Asia Pacific 1,922 1,675
----- -----
Total H.B. Fuller $22,508 $18,703
======= =======
EBITDA:2
Americas Adhesives $144,097 $131,220
Construction Products 21,961 19,335
EIMEA 71,946 52,882
Asia Pacific 16,293 13,594
------ ------
Total H.B. Fuller $254,297 $217,031
======== ========
Segment Operating Margin:4
Americas Adhesives 13.7% 13.4%
Construction Products 6.9% 5.7%
EIMEA 7.0% 5.1%
Asia Pacific 3.9% 3.2%
--- ---
Total H.B. Fuller 9.6% 8.6%
=== ===
EBITDA Margin:2
Americas Adhesives 16.0% 15.6%
Construction Products 13.8% 13.1%
EIMEA 9.8% 7.9%
Asia Pacific 6.4% 6.0%
--- ---
Total H.B. Fuller 12.4% 11.5%
==== ====
Net Revenue Growth:
Americas Adhesives 7.6%
Construction Products 7.8%
EIMEA 9.0%
Asia Pacific 10.7%
----
Total H.B. Fuller 8.5%
===
* Numbers are not
adjusted to remove
the one-time
negative impact of
the fair value
step-up on the
inventory acquired
with the Forbo
business of $3.3
million in the
second quarter of
2012 or the
negative impact as
the result of a
review of custom
duties of $1.1
million in the
third quarter of
2013.
H.B. FULLER COMPANY AND SUBSIDIARIES
SEGMENT FINANCIAL INFORMATION
NET REVENUE GROWTH
(unaudited)
13 Weeks Ended November 30, 2013
--------------------------------
Americas Construction EIMEA Asia Pacific Total HBF
Adhesives Products
--------- --------
Price (1.1%) (3.2%) 0.8% (1.7%) (0.6%)
Volume 5.7% 12.4% (3.2%) 16.5% 4.2%
--- ---- ------ ---- ---
Organic
Growth 4.6% 9.2% (2.4%) 14.8% 3.6%
F/X (0.4%) 0.0% 2.1% (1.9%) 0.4%
4.2% 9.2% (0.3%) 12.9% 4.0%
=== === ====== ==== ===
52 Weeks Ended November 30, 2013
--------------------------------
Americas Construction EIMEA Asia Pacific Total HBF
Adhesives Products
--------- --------
Price (0.3%) (1.1%) 1.5% (1.8%) 0.1%
Volume 1.9% 8.9% (3.0%) 8.3% 1.5%
--- --- ------ --- ---
Organic
Growth 1.6% 7.8% (1.5%) 6.5% 1.6%
F/X (0.2%) 0.0% 1.5% (0.1%) 0.4%
Acquisition 6.2% 0.0% 9.0% 4.3% 6.5%
--- --- --- --- ---
7.6% 7.8% 9.0% 10.7% 8.5%
=== === === ==== ===
H.B. FULLER COMPANY AND SUBSIDIARIES
REGULATION G RECONCILIATION
In thousands (unaudited)
13 Weeks Ended 13 Weeks Ended
November 30, 2013 December 1, 2012
----------------- ----------------
Net
income
including
non-
controlling
interests $22,003 $25,194
Income from
discontinued
operations - (182)
Income from
equity
method
investments (2,360) (2,651)
Income taxes 11,675 11,191
Interest
expense 4,330 5,476
Other income
(expense),
net 1,269 (759)
Asset
impairment
charges - 846
Special
charges 16,136 9,204
Segment
Operating
Income3 53,053 48,319
Depreciation
expense 9,465 10,069
Amortization
expense 5,762 5,490
----- -----
EBITDA2 $68,280 $63,878
EBITDA
margin(2) 12.8% 12.4%
52 Weeks Ended 52 Weeks Ended
November 30, 2013 December 1, 2012
----------------- ----------------
Net
income
including
non-
controlling
interests $97,186 $125,855
Income from
discontinued
operations (1,211) (57,568)
Income from
equity
method
investments (8,380) (9,218)
Income taxes 39,949 30,479
Interest
expense 19,120 19,793
Other income
(expense),
net 3,751 (784)
Asset
impairment
charges - 1,517
Special
charges 45,087 52,467
Segment
Operating
Income3 195,502 162,541
Depreciation
expense 36,287 35,787
Amortization
expense 22,508 18,703
------ ------
EBITDA2 $254,297 $217,031
EBITDA
margin2 12.4% 11.5%
* Numbers are not
adjusted to remove
the one-time
negative impact of
the fair value
step-up on the
inventory acquired
with the Forbo
business of $3.3
million in the
second quarter of
2012 or the
negative impact as
the result of a
review of custom
duties of $1.1
million in the
third quarter of
2013.
H.B. FULLER COMPANY AND SUBSIDIARIES
REGULATION G RECONCILIATION
In thousands (unaudited)
13 Weeks Ended 13 Weeks Ended
November 30, 2013 December 1, 2012
----------------- ----------------
Net
revenue $533,531 $513,255
Cost of
sales (387,859) (369,541)
-------- --------
Gross
profit 145,672 143,714
Selling,
general
and
administrative
expenses (92,619) (95,395)
------- -------
Segment
operating
income3 53,053 48,319
Depreciation
expense 9,465 10,069
Amortization
expense 5,762 5,490
----- -----
EBITDA2 $68,280 $63,878
EBITDA
margin2 12.8% 12.4%
52 Weeks Ended 52 Weeks Ended
November 30, 2013 December 1, 2012
----------------- ----------------
Net
revenue $2,046,968 $1,886,239
Cost of
sales (1,476,797) (1,368,963)
---------- ----------
Gross
profit 570,171 517,276
Selling,
general
and
administrative
expenses (374,669) (354,735)
-------- --------
Segment
operating
income3 195,502 162,541
Depreciation
expense 36,287 35,787
Amortization
expense 22,508 18,703
------ ------
EBITDA2 $254,297 $217,031
EBITDA
margin2 12.4% 11.5%
* Numbers are not
adjusted to remove
the one-time
negative impact of
the fair value
step-up on the
inventory acquired
with the Forbo
business of $3.3
million in the
second quarter of
2012 or the
negative impact as
the result of a
review of custom
duties of $1.1
million in the
third quarter of
2013.
H.B. FULLER COMPANY AND SUBSIDIARIES
REGULATION G RECONCILIATION
In thousands, except per share amounts (unaudited)
Adjusted
13 Weeks Ended 13 Weeks Ended
November 30, 2013 Adjustments November 30, 2013
----------------- ----------- -----------------
Net revenue $533,531 $ - $533,531
Cost of sales (387,859) - (387,859)
-------- --- --------
Gross profit 145,672 - 145,672
Selling, general and
administrative expenses (92,619) - (92,619)
Acquisition and
transformation
related costs (2,890)
Workforce
reduction costs (2,391)
Facility exit
costs (7,695)
Other related
costs (3,160)
------
Special charges,
net (16,136) (16,136) -
Other income
(expense), net (1,269) - (1,269)
Interest expense (4,330) - (4,330)
------ --- ------
Income from continuing
operations before income taxes
and income from equity method
investments 31,318 (16,136) 47,454
Income taxes (11,675) 3,183 (14,858)
Income from
equity method
investments 2,360 - 2,360
----- --- -----
Net income from
continuing
operations 22,003 (12,953) 34,956
Net income including non-
controlling interests 22,003 (12,953) 34,956
Net income attributable to non-
controlling interests (117) - (117)
---- --- ----
Net income attributable to H.B.
Fuller $21,886 $(12,953) $34,839
======= ======== =======
Basic income per common share
attributable to H.B. Fuller
Income (loss) from continuing
operations 0.44 (0.26) 0.70
$0.44 $(0.26) $0.70
===== ====== =====
Diluted income per common share
attributable to H.B. Fuller
Income (loss) from continuing
operations 0.43 (0.25) 0.68 1
$0.43 $(0.25) $0.68
===== ====== =====
Weighted-average common shares
outstanding:
Basic 49,909 49,909 49,909
Diluted 51,236 51,236 51,236
H.B. FULLER COMPANY AND SUBSIDIARIES
REGULATION G RECONCILIATION
In thousands, except per share amounts (unaudited)
Adjusted
13 Weeks Ended 13 Weeks Ended
December 1, 2012 Adjustments December 1, 2012
---------------- ----------- ----------------
Net revenue $513,255 $ - $513,255
Cost of sales (369,541) - (369,541)
-------- --- --------
Gross profit 143,714 - 143,714
Selling, general
and administrative
expenses (95,395) - (95,395)
Special charges,
net (9,204) (9,204) -
Asset impairment
charges (846) - (846)
Other income
(expense), net 759 - 759
Interest expense (5,476) - (5,476)
------ --- ------
Income from
continuing
operations before
income taxes and
income from equity
method investments 33,552 (9,204) 42,756
Income taxes (11,191) 1,701 (12,892)
Income from equity
method investments 2,651 - 2,651
----- --- -----
Net income from
continuing
operations 25,012 (7,503) 32,515
Income from
discontinued
operations 182 - 182
Net income
including non-
controlling
interests 25,194 (7,503) 32,697
Net income
attributable to
non-controlling
interests (82) - (82)
Net income
attributable
to H.B.
Fuller $25,112 $(7,503) $32,615
======= ======= =======
Basic income per
common share
attributable to
H.B. Fullera
Income (loss) from
continuing
operations 0.50 (0.15) 0.65
income from
discontinued
operations 0.00 - 0.00
---- --- ----
$0.51 $(0.15) $0.66
===== ====== =====
Diluted income per
common share
attributable to
H.B. Fullera
Income (loss) from
continuing
operations 0.49 (0.15) 0.64 1
income from
discontinued
operations 0.00 - 0.00
---- --- ----
$0.49 $(0.15) $0.64
===== ====== =====
Weighted-average
common shares
outstanding:
Basic 49,640 49,640 49,640
Diluted 50,798 50,798 50,798
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
52 Weeks Ended 52 Weeks Ended
November 30, 2013 Adjustments November 30, 2013
----------------- ----------- -----------------
Net revenue $2,046,968 $ - $2,046,968
Cost of sales (1,476,797) (1,098) (1,475,699)
---------- ------ ----------
Gross profit 570,171 (1,098) 571,269
Selling, general and
administrative expenses (374,669) - (374,669)
Acquisition and
transformation
related costs (8,698)
Workforce
reduction
costs (9,784)
Facility exit
costs (17,869)
Other related
costs (8,736)
------
Special charges, net (45,087) (45,087) -
Other income (expense), net (3,751) - (3,751)
Interest expense (19,120) - (19,120)
------- --- -------
Income from continuing operations
before income taxes and income from
equity method investments 127,544 (46,185) 173,729
Income taxes (39,949) 10,012 (49,961)
Income from equity method
investments 8,380 - 8,380
----- --- -----
Income from continuing operations 95,975 (36,173) 132,148
Income from discontinued
operations 1,211 - 1,211
----- --- -----
Net income including non-
controlling interests 97,186 (36,173) 133,359
Net income attributable to non-
controlling interests (425) - (425)
---- --- ----
Net income attributable to H.B.
Fuller $96,761 $(36,173) $132,934
======= ======== ========
Basic income per common share
attributable to H.B. Fullera
Income (loss) from continuing
operations 1.92 (0.73) 2.64
Income from discontinued operations 0.02 - 0.02
---- --- ----
$1.94 $(0.73) $2.66
===== ====== =====
Diluted income per common share
attributable to H.B. Fuller
Income (loss) from continuing
operations 1.87 (0.71) 2.58 1
Income from discontinued operations 0.02 - 0.02
---- --- ----
$1.89 $(0.71) $2.60
===== ====== =====
Weighted-average common shares
outstanding:
Basic 49,893 49,893 49,893
Diluted 51,136 51,136 51,136
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
52 Weeks Ended 52 Weeks Ended
December 1, 2012 Adjustments December 1, 2012
---------------- ----------- ----------------
Net revenue $1,886,239 $ - $1,886,239
Cost of sales (1,368,963) (3,314) (1,365,649)
---------- ------ ----------
Gross profit 517,276 (3,314) 520,590
Selling, general
and
administrative
expenses (354,735) - (354,735)
Special charges (52,467) (52,467) -
Asset impairment
charges (1,517) - (1,517)
Other income
(expense), net 784 - 784
Interest expense (19,793) - (19,793)
------- --- -------
Income from
continuing
operations before
income taxes and
income from
equity method
investments 89,548 (55,781) 145,329
Income taxes (30,479) 12,534 (43,013)
Income from equity
method
investments 9,218 - 9,218
----- --- -----
Income from
continuing
operations 68,287 (43,247) 111,534
Income from
discontinued
operations 57,568 - 57,568
Net income
including non-
controlling
interests 125,855 (43,247) 169,102
Net loss
attributable to
non-controlling
interests (233) - (233)
Net income
attributable
to H.B.
Fuller $125,622 $(43,247) $168,869
======== ======== ========
Basic income per
common share
attributable to
H.B. Fullera
Income (loss) from
continuing
operations 1.37 (0.87) 2.25
Income from
discontinued
operations 1.16 - 1.16
---- --- ----
$2.53 $(0.87) $3.41
===== ====== =====
Diluted income per
common share
attributable to
H.B. Fullera
Income (loss) from
continuing
operations 1.34 (0.85) 2.20 1
Income from
discontinued
operations 1.14 - 1.14
---- --- ----
$2.48 $(0.85) $3.34
===== ====== =====
Weighted-average
common shares
outstanding:
Basic 49,571 49,571 49,571
Diluted 50,618 50,618 50,618
a Income per share amounts may not add due to rounding
H.B. FULLER COMPANY AND SUBSIDIARIES
REVISED REGIONAL/SEGMENT REPORTING STRUCTURE
In thousands, except per share amounts (unaudited)
Old Regional Structure New Segment Structure
Net Revenue Q4 2013 Q3 2013 Q2 2013 Q1 2013 Net Revenue Q4 2013 Q3 2013 Q2 2013 Q1 2013
----------- ------- ------- ------- ------- ----------- ------- ------- ------- -------
North America
Adhesives 185,396 190,082 190,641 172,262 Americas Adhesives 232,554 233,515 228,773 207,731
Construction
Products 40,754 40,857 42,934 34,031 Construction Products 40,754 40,857 42,934 34,031
------ ------ ------ ------
North America 226,150 230,939 233,575 206,293 EIMEA 189,763 180,753 185,194 177,501
EIMEA 189,763 180,753 185,194 177,501 Asia Pacific 70,460 59,454 62,115 60,579
------ ------ ------ ------
Latin America
Adhesives 47,158 43,433 38,132 35,469 Total H.B. Fuller 533,531 514,579 519,016 479,842
Asia Pacific 70,460 59,454 62,115 60,579
------ ------ ------ ------
Total H.B.
Fuller 533,531 514,579 519,016 479,842
Operating
Income Q4 2013 Q3 2013 Q2 2013 Q1 2013 Operating Income Q4 2013 Q3 2013 Q2 2013 Q1 2013
--------- ------- ------- ------- ------- ---------------- ------- ------- ------- -------
North America
Adhesives 26,408 32,171 28,448 23,474 Americas Adhesives 30,644 34,871 31,825 25,925
Construction
Products 2,260 3,269 4,047 1,364 Construction Products 2,260 3,269 4,047 1,364
----- ----- ----- -----
North America 28,668 35,440 32,495 24,838 EIMEA 16,709 14,199 14,145 6,473
EIMEA 16,709 14,199 14,145 6,473 Asia Pacific 3,440 1,564 2,793 1,974
----- ----- ----- -----
Latin America
Adhesives 4,236 2,700 3,377 2,451 Total H.B. Fuller 53,053 53,903 52,810 35,736
Asia Pacific 3,440 1,564 2,793 1,974
----- ----- ----- -----
Total H.B.
Fuller 53,053 53,903 52,810 35,736
Operating
Margin Q4 2013 Q3 2013 Q2 2013 Q1 2013 Operating Margin Q4 2013 Q3 2013 Q2 2013 Q1 2013
--------- ------- ------- ------- ------- ---------------- ------- ------- ------- -------
North America
Adhesives 14.2% 16.9% 14.9% 13.6% Americas Adhesives 13.2% 14.9% 13.9% 12.5%
Construction
Products 5.5% 8.0% 9.4% 4.0% Construction Products 5.5% 8.0% 9.4% 4.0%
--- --- --- ---
North America 12.7% 15.3% 13.9% 12.0% EIMEA 8.8% 7.9% 7.6% 3.6%
EIMEA 8.8% 7.9% 7.6% 3.6% Asia Pacific 4.9% 2.6% 4.5% 3.3%
--- --- --- ---
Latin America
Adhesives 9.0% 6.2% 8.9% 6.9% Total H.B. Fuller 9.9% 10.5% 10.2% 7.4%
Asia Pacific 4.9% 2.6% 4.5% 3.3%
--- --- --- ---
Total H.B.
Fuller 9.9% 10.5% 10.2% 7.4%
Depreciation &
Amortization Q4 2013 Q3 2013 Q2 2013 Q1 2013 Depreciation & Amortization Q4 2013 Q3 2013 Q2 2013 Q1 2013
-------------- ------- ------- ------- ------- --------------------------- ------- ------- ------- -------
North America
Adhesives 5,045 4,511 4,447 4,769 Americas Adhesives 5,692 5,097 4,842 5,201
Construction
Products 2,787 2,749 2,729 2,755 Construction Products 2,787 2,749 2,729 2,755
----- ----- ----- -----
North America 7,832 7,260 7,176 7,524 EIMEA 5,086 4,937 4,821 5,576
EIMEA 5,086 4,937 4,821 5,576 Asia Pacific 1,662 1,602 1,539 1,719
----- ----- ----- -----
Latin America
Adhesives 647 586 395 432 Total H.B. Fuller 15,227 14,385 13,931 15,251
Asia Pacific 1,662 1,602 1,539 1,719
----- ----- ----- -----
Total H.B.
Fuller 15,227 14,385 13,931 15,251
EBITDA Q4 2013 Q3 2013 Q2 2013 Q1 2013 EBITDA Q4 2013 Q3 2013 Q2 2013 Q1 2013
------ ------- ------- ------- ------- ------ ------- ------- ------- -------
North America
Adhesives 31,453 36,682 32,895 28,243 Americas Adhesives 36,336 39,968 36,667 31,126
Construction
Products 5,047 6,018 6,776 4,119 Construction Products 5,047 6,018 6,776 4,119
----- ----- ----- -----
North America 36,500 42,700 39,671 32,362 EIMEA 21,795 19,136 18,966 12,049
EIMEA 21,795 19,136 18,966 12,049 Asia Pacific 5,102 3,166 4,332 3,693
----- ----- ----- -----
Latin America
Adhesives 4,883 3,286 3,772 2,883 Total H.B. Fuller 68,280 68,288 66,741 50,987
Asia Pacific 5,102 3,166 4,332 3,693
----- ----- ----- -----
Total H.B.
Fuller 68,280 68,288 66,741 50,987
EBITDA Margin Q4 2013 Q3 2013 Q2 2013 Q1 2013 EBITDA Margin Q4 2013 Q3 2013 Q2 2013 Q1 2013
------------- ------- ------- ------- ------- ------------- ------- ------- ------- -------
North America
Adhesives 17.0% 19.3% 17.3% 16.4% Americas Adhesives 15.6% 17.1% 16.0% 15.0%
Construction
Products 12.4% 14.7% 15.8% 12.1% Construction Products 12.4% 14.7% 15.8% 12.1%
---- ---- ---- ----
North America 16.1% 18.5% 17.0% 15.7% EIMEA 11.5% 10.6% 10.2% 6.8%
EIMEA 11.5% 10.6% 10.2% 6.8% Asia Pacific 7.2% 5.3% 7.0% 6.1%
--- --- --- ---
Latin America
Adhesives 10.4% 7.6% 9.9% 8.1% Total H.B. Fuller 12.8% 13.3% 12.9% 10.6%
Asia Pacific 7.2% 5.3% 7.0% 6.1%
--- --- --- ---
Total H.B.
Fuller 12.8% 13.3% 12.9% 10.6%
* Numbers are not
adjusted to
remove the one-
time negative
impact as the
result of a
review of custom
duties of $1.1
million in the
third quarter of
2013.
H.B. FULLER COMPANY AND SUBSIDIARIES
REVISED REGIONAL/SEGMENT REPORTING STRUCTURE
In thousands, except per share amounts (unaudited)
Old Regional Structure New Segment Structure
Net Revenue Q4 2012 Q3 2012 Q2 2012 Q1 2012 Net Revenue Q4 2012 Q3 2012 Q2 2012 Q1 2012
----------- ------- ------- ------- ------- ----------- ------- ------- ------- -------
North America
Adhesives 181,269 190,234 193,382 118,096 Americas Adhesives 223,179 229,806 231,937 153,693
Construction
Products 37,317 37,590 39,679 32,494 Construction Products 37,317 37,590 39,679 32,494
------ ------ ------ ------
North America 218,586 227,824 233,061 150,590 EIMEA 190,336 177,493 193,943 110,651
EIMEA 190,336 177,493 193,943 110,651 Asia Pacific 62,423 55,646 61,436 48,616
------ ------ ------ ------
Latin America
Adhesives 41,910 39,572 38,555 35,597 Total H.B. Fuller 513,255 500,535 526,995 345,454
Asia Pacific 62,423 55,646 61,436 48,616
------ ------ ------ ------
Total H.B.
Fuller 513,255 500,535 526,995 345,454
Operating
Income Q4 2012 Q3 2012 Q2 2012 Q1 2012 Operating Income Q4 2012 Q3 2012 Q2 2012 Q1 2012
--------- ------- ------- ------- ------- ---------------- ------- ------- ------- -------
North America
Adhesives 26,061 30,478 25,115 17,495 Americas Adhesives 29,853 33,788 28,844 19,882
Construction
Products 3,415 1,299 3,148 472 Construction Products 3,415 1,299 3,148 472
----- ----- ----- ---
North America 29,476 31,777 28,263 17,967 EIMEA 12,181 6,269 9,485 6,548
EIMEA 12,181 6,269 9,485 6,548 Asia Pacific 2,870 1,613 2,118 755
----- ----- ----- ---
Latin America
Adhesives 3,792 3,310 3,729 2,387 Total H.B. Fuller 48,319 42,969 43,595 27,657
Asia Pacific 2,870 1,613 2,118 755
----- ----- ----- ---
Total H.B.
Fuller 48,319 42,969 43,595 27,657
Operating
Margin Q4 2012 Q3 2012 Q2 2012 Q1 2012 Operating Margin Q4 2012 Q3 2012 Q2 2012 Q1 2012
--------- ------- ------- ------- ------- ---------------- ------- ------- ------- -------
North America
Adhesives 14.4% 16.0% 13.0% 14.8% Americas Adhesives 13.4% 14.7% 12.4% 12.9%
Construction
Products 9.2% 3.5% 7.9% 1.5% Construction Products 9.2% 3.5% 7.9% 1.5%
--- --- --- ---
North America 13.5% 13.9% 12.1% 11.9% EIMEA 6.4% 3.5% 4.9% 5.9%
EIMEA 6.4% 3.5% 4.9% 5.9% Asia Pacific 4.6% 2.9% 3.4% 1.6%
--- --- --- ---
Latin America
Adhesives 9.0% 8.4% 9.7% 6.7% Total H.B. Fuller 9.4% 8.6% 8.3% 8.0%
Asia Pacific 4.6% 2.9% 3.4% 1.6%
--- --- --- ---
Total H.B.
Fuller 9.4% 8.6% 8.3% 8.0%
Depreciation &
Amortization Q4 2012 Q3 2012 Q2 2012 Q1 2012 Depreciation & Amortization Q4 2012 Q3 2012 Q2 2012 Q1 2012
-------------- ------- ------- ------- ------- --------------------------- ------- ------- ------- -------
North America
Adhesives 4,922 4,709 4,760 2,461 Americas Adhesives 5,485 5,355 5,239 2,787
Construction
Products 2,726 2,752 2,736 2,773 Construction Products 2,726 2,752 2,736 2,773
----- ----- ----- -----
North America 7,648 7,461 7,496 5,234 EIMEA 5,649 5,111 5,352 2,287
EIMEA 5,649 5,111 5,352 2,287 Asia Pacific 1,699 1,550 1,686 1,303
----- ----- ----- -----
Latin America
Adhesives 563 646 479 326 Total H.B. Fuller 15,559 14,768 15,013 9,150
Asia Pacific 1,699 1,550 1,686 1,303
----- ----- ----- -----
Total H.B.
Fuller 15,559 14,768 15,013 9,150
EBITDA Q4 2012 Q3 2012 Q2 2012 Q1 2012 EBITDA Q4 2012 Q3 2012 Q2 2012 Q1 2012
------ ------- ------- ------- ------- ------ ------- ------- ------- -------
North America
Adhesives 30,983 35,187 29,875 19,956 Americas Adhesives 35,338 39,143 34,083 22,669
Construction
Products 6,141 4,051 5,884 3,245 Construction Products 6,141 4,051 5,884 3,245
----- ----- ----- -----
North America 37,124 39,238 35,759 23,201 EIMEA 17,830 11,380 14,837 8,835
EIMEA 17,830 11,380 14,837 8,835 Asia Pacific 4,569 3,163 3,804 2,058
----- ----- ----- -----
Latin America
Adhesives 4,355 3,956 4,208 2,713 Total H.B. Fuller 63,878 57,737 58,608 36,807
Asia Pacific 4,569 3,163 3,804 2,058
----- ----- ----- -----
Total H.B.
Fuller 63,878 57,737 58,608 36,807
EBITDA Margin Q4 2012 Q3 2012 Q2 2012 Q1 2012 EBITDA Margin Q4 2012 Q3 2012 Q2 2012 Q1 2012
------------- ------- ------- ------- ------- ------------- ------- ------- ------- -------
North America
Adhesives 17.1% 18.5% 15.4% 16.9% Americas Adhesives 15.8% 17.0% 14.7% 14.7%
Construction
Products 16.5% 10.8% 14.8% 10.0% Construction Products 16.5% 10.8% 14.8% 10.0%
---- ---- ---- ----
North America 17.0% 17.2% 15.3% 15.4% EIMEA 9.4% 6.4% 7.7% 8.0%
EIMEA 9.4% 6.4% 7.7% 8.0% Asia Pacific 7.3% 5.7% 6.2% 4.2%
--- --- --- ---
Latin America
Adhesives 10.4% 10.0% 10.9% 7.6% Total H.B. Fuller 12.4% 11.5% 11.1% 10.7%
Asia Pacific 7.3% 5.7% 6.2% 4.2%
--- --- --- ---
Total H.B.
Fuller 12.4% 11.5% 11.1% 10.7%
* Numbers are not
adjusted to remove
the one-time
negative impact of
the fair value
step-up on the
inventory acquired
with the Forbo
business of $3.3
million in the
second quarter of
2012.
1 Adjusted
diluted
earnings
per share
(EPS) from
continuing
operations
is a non-
GAAP
financial
measure.
During the
third
quarter of
2013, the
Company
recorded a
negative
impact on
the gross
profit
margin line
of the
income
statement
as the
result of a
review of
custom
duties owed
for the
years 2000
- 2008 in
Argentina.
On a pre-
tax basis,
this item
amounted to
$1.1
million
($0.02 per
diluted
share).
First,
second,
third and
fourth
quarters of
2013 and
2012
exclude
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".
Special
charges,
net
amounted to
$16.1
million,
$12.8
million,
$10.8
million,
$5.3
million,
$9.2
million
$4.7
million,
$32.1
million and
$6.5
million on
a pre-tax
basis
($0.25,
$0.19,
$0.16,
$0.08,
$0.15,
$0.05,
$0.52 and
$0.14 per
diluted
share) in
Q4 2013, Q3
2013, Q2
2013, Q1
2013, Q4
2012, Q3
2012, Q2
2012 and Q1
2012,
respectively.
During the
second
quarter of
2012, the
Company
recorded a
one-time
negative
impact of
the fair
value step-
up on the
inventory
acquired
with the
Forbo
business on
the gross
profit
margin line
of the
income
statement.
On a pre-
tax basis,
this "step-
up"
amounted to
$3.3
million
dollars
($0.05 per
diluted
share).
2 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.
3 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.
In Q4
2013, Q3
2013, Q2
2013, Q1
2013, Q4
2012, Q3
2012, Q2
2012 and
Q1 2012,
special
charges,
net
totaled
$16.1
million,
$12.8
million,
$10.8
million,
$5.3
million,
$9.2
million
$4.7
million,
$32.1
million
and $6.5
million,
respectively.
4 Segment
operating
margin
is a
non-
GAAP
financial
measure
defined
as
gross
profit,
less
SG&A
expense,
divided
by net
revenue.
SOURCE H.B. Fuller Company
