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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended
November 30, 1995 Commission File No. 0-3488
H. B. FULLER COMPANY
A Minnesota Corporation
IRS Employer Identification No. 41-0268370
2400 Energy Park Drive, St. Paul, Minnesota 55108
Telephone - (612) 645-3401
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock (par value of $1.00 per share)
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. ____
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 of 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
----- -----
As of January 31, 1996, 14,008,156 Common Shares were outstanding and the
aggregate market value of the Common Shares held by non-affiliates of the
Registrant on that date was approximately $469,276,000.
DOCUMENTS INCORPORATED BY REFERENCE
Parts I, II and IV incorporate information by reference from the H. B. Fuller
Company 1995 Annual Report to Stockholders.
Part III incorporates information by reference from the Registrant's Proxy
Statement dated March 3, 1996.
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H. B. FULLER COMPANY
1995 Form 10-K Annual Report
Table of Contents
Page
----
PART I
------
Item 1. Business 3
Item 2. Properties 6
Item 3. Legal Proceedings 7
Item 4. Submission of Matters to a Vote of Security Holders 11
Executive Officers of the Registrant 12
PART II
-------
Item 5. Market for the Registrant's Common Stock and Related Stockholder
Matters 13
Item 6. Selected Financial Data 13
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations 13
Item 8. Financial Statements and Supplementary Data 13
Item 9. Change in and Disagreements with Accountants on Accounting
and Financial Disclosure 13
PART III
--------
Item 10. Directors and Executive Officers of the Registrant 13
Item 11. Executive Compensation 13
Item 12. Security Ownership of Certain Beneficial Owners and Management 13
Item 13. Certain Relationships and Related Transactions 13
PART IV
-------
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K 14
Signatures 17
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PART I
Item 1.
Business
- --------
Founded in 1887 and incorporated as a Minnesota corporation in 1915, H.B. Fuller
Company today is a worldwide manufacturer and marketer of adhesives, sealants,
coatings, paints and other specialty chemical products. The Company currently
employs approximately 6,400 people and has sales operations in 42 countries in
North America, Europe, Latin America and the Asia/Pacific region.
The Company's largest worldwide business category is adhesives, sealants and
coatings, which generated more than 85 percent of 1995 sales. These products,
in thousands of formulations, are sold to customers in a wide range of
industries, including packaging, woodworking, automotive, aerospace, graphic
arts (books/magazines), appliances, filtration, windows, sporting goods,
nonwovens, shoes and ceramic tile.
H.B. Fuller also is a quality producer and supplier of powder coatings to metal
finishing industries; commercial and industrial paints in Latin American
markets; specialty waxes in European markets, as well as mastics and coatings
for thermal insulation, indoor air quality and asbestos abatement applications
and sanitation chemicals to the dairy, beverage and food processing industries
in the U.S.
Segment Information
- -------------------
For financial information relating to major geographic areas of H. B. Fuller,
see Note 14, "Business Segment Information", on page 46 of the Company's 1995
Annual Report to Stockholders, incorporated herein by reference.
Line of Business and Classes of Similar Products
- ------------------------------------------------
The Company is engaged in one line of business, the manufacturing of specialty
chemical products which includes formulating, compounding and marketing
adhesives, sealants and coatings, paints, sanitizing chemicals, specialty waxes
and related chemicals.
The following tabulation sets forth information concerning the approximate
contribution to consolidated sales of the Company's classes of products:
Class of Product Sales
------------------
1995 1994 1993
---- ---- ----
Adhesives, sealants and coatings 87% 86% 84%
Paints 7 7 8
Sanitation chemicals 3 3 3
Other 3 4 5
---- ---- ----
100% 100% 100%
==== ==== ====
-3-
International Operations
- ------------------------
The international business of H. B. Fuller is conducted primarily by
subsidiaries manufacturing in countries outside of North America. Wherever
feasible, H. B. Fuller's practice has been to establish manufacturing units
outside of North America to service the local markets. The principal markets,
products and methods of distribution in the international business vary with the
country or business practices of the country. The products sold include not
only those developed by the local manufacturing plants but also those developed
within North America and elsewhere in the world.
The Company's operations overseas face varying degrees of economic and political
risk. At year-end 1995, the Company had plants in 31 countries outside the
United States and satellite sales offices in another ten countries and license
agreements used to maintain a worldwide manufacturing network. In the opinion
of management, there are several countries where the Company has operating
facilities which have political risks higher than in North America. Where
possible, the Company insures its physical assets against damage from civil
unrest.
Competition
- -----------
The Company encounters a high degree of competition in the marketing of its
products. Because of the large number and variety of its products, the Company
does not compete directly with any one competitor in all of its markets. The
Company competes with several large firms as well as many smaller local,
independent firms. In North America there are a large number of competitors.
Since adhesives of all types are widely used, it is not possible to identify a
few competitors who would represent the major competition.
In Latin America, the Company experiences substantial competition in marketing
its plastics, printing inks and industrial adhesives. In Central America, it is
a major factor in the industrial adhesives market and, along with several other
large paint manufacturing firms, in the residential paint market. In Europe,
the Company is a large manufacturer of adhesives and specialty waxes and
competes in certain areas of this market with several large companies.
The principal competitive factors in the sale of adhesives, paints, coatings and
sealants are product performance, customer and technical service, quality, and
price.
Customers
- ---------
Of the Company's $1,243,818,000 total sales to unaffiliated customers in 1995,
$692,099,000 was sold through North American operations. The Company's largest
customer accounts for less than 4% of consolidated sales.
Backlog
- -------
Orders for the Company's products are generally processed within one week.
Therefore, the Company had no significant backlog of unfilled orders at November
30, 1995, 1994 or 1993.
-4-
Raw Materials
- -------------
The Company purchases from large chemical suppliers raw materials including
solvents, plasticizers, waxes, resins, polymers and vinyl acetate monomer which
the Company uses to manufacture its principal products. Natural raw materials
are also purchased from outside suppliers and include starch, dextrines, natural
latex and resins. The Company attempts to find multiple sources for all of its
raw materials and alternate sources of supply are generally available. An
adequate supply of the raw materials used by the Company is presently available
in the open market. The Company's Latin American operations import many of
their raw materials. Extended delivery schedules of these materials are common,
thereby requiring maintenance of higher inventory levels than those maintained
in North America and Europe.
A significant portion of the Company's raw materials are derived from petroleum-
based products and this is common to all adhesive manufacturers.
The Company is not a large consumer of energy and, therefore, has not
experienced any difficulties in obtaining energy for its manufacturing
operations. It anticipates it will be able to obtain needed energy supplies in
the future.
Patents, Trademarks and Licenses
- --------------------------------
Much of the technology used in the manufacturing of adhesives, coatings and
other specialty chemicals is in the public domain. To the extent that it is
not, the Company relies on trade secrets and patents to protect its know-how.
The Company has agreements with many of its employees for the purpose of
protecting the Company's rights to technology and intellectual property. The
Company also routinely obtains confidentiality commitments from customers,
suppliers and others to safeguard its proprietary information. Company
trademarks such as HB Fuller(R), Kativo(R), Rakoll(R), and Monarch(R) are of
continuing importance in marketing its products.
Research and Development
- ------------------------
The Company conducts research and development activities in an effort to improve
existing products and to design new products and processes. The Company's
research and development expenses during 1995, 1994 and 1993 aggregated
$26,541,000, $23,624,000, and $21,826,000, respectively.
Environmental
- -------------
The Company regularly reviews and upgrades its environmental policies, practices
and procedures and seeks improved production methods that reduce waste,
particularly toxic waste, coming out of its facilities, based upon evolving
societal standards and increased environmental understanding.
The Company's high standards of environmental consciousness are supported by an
organizational program supervised by environmental professionals and the
Worldwide Environment, Health and Safety Committee, a committee with management
membership from around the world which proactively monitors practices at all
facilities. Company practices are often more stringent than local government
standards. The Company integrates environmental programs into operating
objectives, thereby translating philosophy into every day practice.
The Company believes that as a general matter its current policies, practices
and procedures in the areas of environmental regulations and the handling of
hazardous waste are designed to substantially reduce risks of
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environmental and other damage that would result in litigation and financial
liability. Some risk of environmental and other damage is, however, inherent in
particular operations and products of the Company, as it is with other companies
engaged in similar businesses.
The Company is and has been engaged in the handling, manufacture, use, sale
and/or disposal of substances, some of which are considered by federal or state
environmental agencies to be hazardous. The Company believes that its
manufacture, handling, use, sale and disposal of such substances are generally
in accord with current applicable environmental regulations. Increasingly
strict environmental laws, standards, and enforcement policies may increase the
risk of liability and compliance costs associated with such substances.
Environmental expenditures, reasonably known to management, to comply with
environmental regulations over the Company's next two fiscal years are estimated
to be approximately $11.0 million. The effects of compliance with environmental
laws and regulations are not expected to be material to the Company's
consolidated capital expenditures, earnings, or competitive position. See
additional disclosure under Item 3, Legal Proceedings.
Employees
- ---------
H. B. Fuller Company and consolidated subsidiaries employed approximately 6,400
persons on November 30, 1995, of which approximately 2,400 persons were employed
in the United States.
Item 2.
Properties
- ----------
The principal manufacturing plants and other properties are located in 32
countries:
U.S. Locations
--------------
California Michigan
Los Angeles (1 owned, 1 leased) Grand Rapids
Roseville Warren (1 owned, 1 leased)
Tulare Minnesota
Florida Minneapolis and St. Paul
Gainesville (7 owned, 1 leased)
Pompano Beach New Jersey - Edison
Georgia (1 owned, 1 leased)
Conyers* New York - Geneva
Covington North Carolina
Forest Park Greensboro
Tucker Charlotte*
Illinois Ohio
Palatine Cincinnati*
Tinley Park Dayton
Indiana - Elkhart Oregon - Portland
Kansas - Kansas City Tennessee - Memphis*
Kentucky - Paducah Texas
Maryland - Baltimore Dallas
Massachusetts Fort Worth
Marlboro* Houston
Wilmington Washington - Vancouver
*Leased properties
-6-
Other Locations
---------------
Argentina - Buenos Aires Honduras
Australia San Pedro Sula (2 owned)
Melbourne Tegucigalpa
Sydney* Italy - Borgolavezzaro
Austria - Wels Japan - Hamamatsu
Brazil - Sao Paulo Mexico - Mexico City*
Canada Netherlands - Amerongen
St. Andre est New Zealand - Auckland (2 owned)
Montreal Nicaragua - Managua
Toronto People's Republic of
Chile - Santiago China - Guangzhou*
Colombia - Itagui* Peru - Lima
Costa Rica - San Jose (6 owned) Philippines - Manila*
Dominican Republic - Santo Domingo Puerto Rico - Bayamon
Ecuador - Guayaquil (2 owned) Republic of Panama - Panama City
El Salvador - San Salvador (1 owned, 1 leased) (2 owned, 1 leased)
Federal Republic of Germany Spain - Alicante
Luneburg Switzerland - Basel*
Munich* Taiwan - Taipei
Nienburg* United Kingdom
France - Le Trait Birmingham*
Guatemala - Guatemala City (2 leased) Derbyshire*
Venezuela - Caracas
*Leased properties
The Company's principal executive offices and central research facilities are
Company owned and located in the St. Paul, Minnesota metropolitan area.
The Company has facilities for the manufacture of various products with total
floor space of approximately 1,683,000 square feet, including 183,000 square
feet of leased space. In addition, the Company has approximately 2,105,000
square feet of warehouse, including 371,000 square feet of leased space. Offices
and other facilities total 1,784,000 square feet, including 446,000 square feet
of leased space. The Company believes that the properties owned or leased are
suitable and adequate for its business.
Item 3.
Legal Proceedings.
- -----------------
ENVIRONMENTAL REMEDIATION.
- -------------------------
The Company currently is deemed a potentially responsible party ("PRP"), in
conjunction with numerous other parties, in a number of government enforcement
and private actions associated with hazardous waste sites ("Sites"). As a PRP or
defendant, the Company may be required to pay a share of the cost of
investigation and cleanup of these Sites. In some cases, the Company may have
rights of indemnification from other parties.
The Company's future liability for such claims is difficult to predict because
of uncertainty as to the cost of investigation and cleanup of the Sites, the
Company's responsibility for such hazardous wastes and the number or financial
condition of other PRPs or defendants. Reserves for future liabilities at the
Sites are established as soon as an estimate of potential cleanup costs and
allocation can be determined. The reserves are reviewed and revised quarterly in
light of currently available technical and legal information.
-7-
Based upon such available information, it is the Company's opinion that these
environmental claims will not result in material liability to the Company.
Following is a list of Sites where the Company has or expects to have more than
a de minimis share of liability for remedial investigation and/or remediation
costs or which are too new to make an assessment. The expected or anticipated
costs for these Sites are included in the current reserves of the Company.
HELEN KRAMER, MANTUA, NEW JERSEY.
----------------------------------
The Company is named as a third-party defendant by both the EPA and the New
Jersey EPA for remediation at this Federal Superfund Site. Currently, the
Company is participating in an allocation process for third-party generators. An
outside waste accountant has found no evidence of any of the Company's waste at
the Site. Negotiations for a settlement proposal between third-party defendants
and the EPA continue. Because the waste accountant has found no evidence that
any Company waste was disposed of at the Site, the Company does not believe that
any liability allocated to it will materially affect its business or financial
condition.
GLOUCESTER ENVIRONMENTAL MANAGEMENT SERVICES, INC., GLOUCESTER TOWNSHIP.,
-------------------------------------------------------------------------
NEW JERSEY.
----------
The Company has received notice from the EPA that it may be a PRP at this
landfill. The New Jersey EPA served the Company with a complaint and named
Paisley Products, Inc., from which the Company acquired certain assets, as the
PRP. The predecessor in interest has agreed to indemnify and hold the Company
harmless pursuant to the asset purchase agreement. The Company has paid
approximately $149,000 as its portion of the allocation for the time period that
the Company operated the acquired facility. It is estimated that the Company has
a remaining contribution of approximately $20,000 for future cleanup costs.
WAUCONDA SAND & GRAVEL, WAUCONDA, ILLINOIS.
------------------------------------------
The Company and other PRPs signed a consent decree with the EPA that provides
for payment of remedial work at this Site. The Company has paid assessments of
approximately $440,000. The Company believes that any future costs will be
minimal, and will not materially affect its business or financial condition.
BAY DRUMS, TAMPA, FLORIDA.
-------------------------
The Company has been identified as a PRP at this Site. The Company has joined a
PRP Group which has retained an outside waste accountant for allocating cleanup
costs amongst the PRPs. The Company is allocated 175 drums or .673% of the
Group's total. Based on this allocation, the Company's estimated share is
approximately $47,188. While the allocation may change due to the ability or
willingness of additional PRPs to share in the cleanup costs, the Company
believes that its final cost will be minimal, and will not materially affect its
business or financial condition.
-8-
SEABOARD CHEMICAL, JAMESTOWN, NORTH CAROLINA.
--------------------------------------------
In September of 1991, the Company's Pompano Beach, Florida and Covington,
Georgia facilities were identified as having contributed 40,590 pounds of waste
to the Site. The Company joined a PRP and de minimis Group and signed the
Consent Order and the Buy-Out Agreement for the Phase I remediation. The North
Carolina Department of Natural Resources asserts that additional response costs
are necessary to complete the remediation of the Site. Because of its de minimis
status, the Company believes that any future costs will be minimal, and will not
materially affect its business or financial condition.
SOLVENTS RECOVERY SERVICES, SOUTHINGTON, CONNECTICUT.
----------------------------------------------------
The Company has been named a PRP (ranked 325 out of 885) as a result of
allegedly generating 12,240 gallons of hazardous waste disposed of through
Solvents Recovery Service. The Company at issue was acquired from the Terrell
Corp. in July, 1986.
The EPA offered a de minimis settlement to PRPs who have been allocated less
than 10,000 gallons at the Site. The Company accepted the de minimis settlement
and paid $61,635.89 for a full and final settlement of this Site. The EPA
subsequently rejected the Company as a de minimis party. The Company has
requested the EPA to clarify its status, and objected to the EPA's determination
that the Company is not a de minimis party. Although the Company's allocation
may change due to the ability or willingness of additional PRPs to share in the
cleanup costs, the Company believes that its future costs will be minimal, and
will not materially affect its business or financial condition.
SUNRISE, WAYLAND, MICHIGAN.
--------------------------
The Company has received a notice of demand for payment and response activities
from the Michigan Department of Natural Resources ("DNR") requesting that the
Company participate in the cleanup of the Sunrise Landfill.
At this time, the DNR has estimated that clean-up may cost in excess of $17
million. The Company has joined a PRP Group, which has submitted a good faith
proposal to the DNR for a Remedial Investigation and Feasibility Study, the cost
of which is expected to range from $337,000 to $471,000. In addition, the State
has incurred $3,744,744 in response costs to date. The Company has paid $30,000
for a remedial investigation. It is expected that numerous additional PRPs will
be located to participate in these costs, as well as final remediation. Because
of the participation of other financially viable PRPs, it is the Company's
opinion that its future costs will not materially affect its business or
financial condition.
WASTE OIL TANK SERVICE, HOUSTON, TEXAS.
--------------------------------------
The Texas Water Commission ("Commission") notified the Company that it is a PRP
at the Waste Oil Tank Service Site. The Site was used as a waste oil and
collection facility from 1975 to 1984, and has been included on the State's
Superfund registry. Although the Site is relatively small, approximately 1/2
acre, it has a high priority for cleanup by the Commission because its
investigation has shown hydrocarbon and heavy metal contamination in the soil
and surface water. The Commission's investigation indicated that on one occasion
in April of 1982, one of the Company's facilities arranged for 2,600 gallons of
hazardous waste to be disposed of at the Site. The Company has joined a PRP
Group which has submitted a good faith proposal to the Commission for a Remedial
Investigation and Feasibility Study, the cost of which may range from $105,000
to $236,000. Because of the participation of numerous other financially
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viable PRPs, it is the Company's opinion that its allocation at this Site will
not materially affect its business or financial condition.
SCHNITZER IRON & METAL, ST. PAUL, MINNESOTA.
-------------------------------------------
The Company recently received a Request for Information from the Minnesota
Pollution Control Agency with respect to the Company's use of this Site. Records
indicate that the Company disposed of a small amount of material at this Site on
two occasions in the early-1980's. Because of the Company's limited use of this
Site, it is the Company's opinion that any future costs at this Site will be
minimal, and will not materially affect its business or financial condition.
ARCHEM COMPANY, HOUSTON, TEXAS.
------------------------------
The Company has received notice from the Texas Water Commission that it is a PRP
concerning remediation of the ArChem property in Houston, Texas. The Company
acquired the property in June of 1976, and in 1978, the property was sold. The
Commission's focus is on the companies that sent chemicals to the Site pursuant
to tolling agreements or otherwise had specialty products manufactured by
ArChem. The materials at issue were not generated by or attributable to the
Company. Because of an indemnification agreement with a financially able
indemnitor, and because the materials at issue were not generated by the
Company, it is the Company's opinion that this Site will not have a material
affect on the Company's business or financial condition.
OTHER ENVIRONMENTAL MATTERS PREVIOUSLY DISCLOSED.
- ------------------------------------------------
In 1994, the Minnesota Legislature enacted the Landfill Cleanup Act (the "Act")
whereby potentially responsible parties ("PRP") that have expended funds for
remediation at a Minnesota landfill may forego any future obligations for
remediation and obtain reimbursement for remedial expenses incurred in exchange
for a waiver of claims through participation in the Landfill Cleanup Program.
The Company has applied for participation in this Program, through each Sites'
respective PRP Group, for the following three Sites previously reported.
EAST BETHEL LANDFILL, EAST BETHEL, MINNESOTA.
--------------------------------------------
The Company was a defendant in a private cost recovery action brought by the
owners and operators of the landfill, designated as a Federal Superfund Site.
The defendants entered into a settlement with the plaintiffs. The Company has
paid approximately $194,000 for its share of allocated cleanup costs. The
Company, through the PRP Group at the Site, has applied for participation in
Minnesota's Landfill Cleanup Program. The State has indicated that this Site
qualifies for participation in the Program, and the Company expects that any
further remediation and management of this Site has been assigned to the State.
Accordingly, the Company has no further remediation liability at this Site.
OAK GROVE LANDFILL, OAK GROVE, MINNESOTA.
----------------------------------------
The Company and other defendants have signed a consent decree with the EPA that
provides for the implementation of remedial work at this Federal Superfund Site.
The Company has paid approximately $128,000 as its portion of the cleanup cost.
The Company, through the PRP Group at the Site, has applied for participation in
Minnesota's Landfill Cleanup Program. The State has indicated that this Site
qualifies for participation in the Program, and the Company expects that any
further remediation and management of
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this Site will be assigned to the State in the near future. Accordingly, the
Company does not believe that it will incur any further costs at this Site.
WASTE DISPOSAL ENGINEERING, ANDOVER, MINNESOTA.
----------------------------------------------
The Company and other PRPs signed a consent decree with the Environmental
Protection Agency ("EPA") that provides for payment of remedial work at the
Site. The Company has paid assessments of approximately $84,000 for the remedial
work. The Company, through the PRP Group at the Site, has applied for
participation in Minnesota's Landfill Cleanup Program. The State has indicated
that this Site qualifies for participation in the Program, and the Company
expects that any further remediation and management of this Site has been
assigned to the State. Accordingly, the Company has no further remediation
liability at this Site.
OTHER LEGAL PROCEEDINGS.
- -----------------------
On August 30, 1995, the Company was named one of 94 defendants, including
numerous other chemical companies, in a purported class action filed in Federal
District Court for the District of Texas on behalf of approximately 114
plaintiffs that worked at the Army Depot in Corpus Christi, Texas. The
plaintiffs seek $100 million in compensatory damages and $400 million in
punitive damages for injuries allegedly resulting from exposure to various
chemicals manufactured by the 94 defendants.
On January 4, 1996, Ruth Linares Polanco filed a wrongful death action against
the Company and two Central American subsidiaries in Federal District Court for
the District of Minnesota. The plaintiff subsequently amended the complaint,
dropping the two subsidiaries as defendants. The plaintiff alleges that her
brother abused a solvent-based adhesive manufactured by the Company by inhaling
fumes from the adhesive, and that the Company is substantially responsible for
his death. The plaintiff seeks damages in excess of $50,000. The Company has
filed a motion to dismiss the lawsuit on a number of legal grounds, including
forum nonconveniens. The Company also has filed an answer to the plaintiff's
complaint denying all liability.
As with other types of litigation and proceedings to which the Company is a
party, based upon currently available information, it is the Company's opinion
that none of the matters will result in material liability to the Company.
Item 4.
Submission of Matters to a Vote of Security Holders
- ---------------------------------------------------
Not applicable.
-11-
Executive Officers of the Registrant
- ------------------------------------
The executive officers of the Company as of November 30, 1995, their ages and
current offices are set forth below:
Name Age Position Period Served
- ---- --- -------- -------------
Anthony L. Andersen 59 Chair, Board of Directors Since 1992
Director Since 1966
Walter Kissling 64 President Since 1992
Chief Executive Officer Since 1995
Director Since 1968
John T. Ray, Jr. 58 Senior Vice President Since 1984
Richard C. Johnson 66 Senior Vice President Since 1992
Chief Administrative Officer Since 1992
Wolfgang Weber 56 Senior Vice President Since 1992
Jorge Walter Bolanos 51 Chief Financial Officer and Treasurer Since 1992
Senior Vice President Since 1995
Lars T. Carlson 57 Vice President Since 1986
Sarah R. Coffin 43 Vice President Since 1994
Antonio Lobo 52 Vice President Since 1989
Rolf Schubert 57 Vice President Since 1982
Director Since 1972
Jerald L. Scott 54 Vice President Since 1980
David J. Maki 54 Vice President Since 1990
Controller Since 1987
Richard C. Baker 43 Vice President Since 1993
Corporate Secretary Since 1995
General Counsel Since 1990
Officers are elected by the Board of Directors or appointed by the Chief
Executive Officer. Each of the Company's officers has served in various
capacities with the Company for more than five years, except Sarah R. Coffin.
Sarah R. Coffin joined the Company and was named Vice President/Specialty Group
Manager in 1994. In her most recent position prior to joining the Company, Ms.
Coffin served as Managing Director, Specialty Chemicals, General Electric
Plastics, a position she had held since 1991. Prior to that she had been General
Manager, Polymerland, Inc., a subsidiary of the General Electric Company.
-12-
PART II
Information for Items 5 through 8 of this report appear in the 1995 H. B. Fuller
Company Annual Report to Stockholders as indicated on the following table and
are incorporated by reference to this Report:
Annual Report
to Stockholders
Item Page
---- ---------------
Item 5. Market for Registrant's Common Stock
and Related Stockholder Matters
Trading Market 52
High and Low Market Value 52
Dividend Payments 52
Dividend Restrictions (Note 13) 44-45
Holders of Common Stock 53
Item 6. Selected Financial Data
1969 - 1995 in Review and
Selected Financial Data 50-51
Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations
Management's Analysis of Results of
Operations and Financial Condition 29-32
Item 8. Financial Statements and Supplementary Data
Consolidated Financial Statements 33-46
Quarterly Data (Unaudited)(Note 15) 47
Item 9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure
None
PART III
Items 10, 11, 12 and 13.
Directors and Executive Officers of the Registrant; Executive Compensation;
Security Ownership of Certain Beneficial Owners and Management; and Certain
Relationships and Related Transactions
The information required by these Items other than the information set forth in
Part I, "Executive Officers of the Registrant", is omitted because the Company
will file within 120 days after the close of the Company's last fiscal year a
definitive proxy statement pursuant to Regulation 14A, which information, other
than the sections entitled "Compensation Committee Report on Executive
Compensation" and "Shareholder Return Performance Presentation" contained
therein, is herein incorporated by reference as if set out in full.
-13-
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
Reference
--------------------------------
Form 10-K Annual Report
Annual Report to Stockholders
Page Page
------------- ---------------
(a)(1.) Index to Consolidated Financial Statements
Incorporated by Reference to the 1995 Annual
Report to Stockholders of H. B. Fuller Company:
Consolidated Statements of Earnings for the
Three Years Ended November 30, 1995 33
Consolidated Balance Sheets as of
November 30, 1995 and 1994 34
Consolidated Statements of Stockholders' Equity
for the Three Years Ended November 30, 1995 35
Consolidated Statements of Cash Flows
for the Three Years Ended November 30, 1995 36
Notes to Consolidated Financial Statements 37-47
Report of Independent Accountants 49
(a)(2.) Index to Consolidated Financial Statement
Schedules for the Three Years Ended November 30, 1995:
Auditors' Report on Financial Statement Schedules 18
Schedule II Valuation and Qualifying Accounts 19
All other financial statement schedules are omitted as the required information
is inapplicable or the information is given in the financial statements or
related notes.
-14-
(a)(3.) Exhibits
Exhibit Number
3(a) Restated Articles of Incorporation - incorporated by reference to
Exhibit 3(a) to the Registrant's Annual Report on Form 10-K for the year
ended November 30, 1992.
3(b) By-Laws of H.B. Fuller Company - as amended to date.
4(a) Amended and Restated Shareholder Rights Plan - incorporated by reference
to Exhibit 4(a) to the Registrant's Registration Statement on Form 8-A
(Commission File No. 1-9225).
4(b) Restated Articles of Incorporation referring to rights of security
holders, Articles III, VII - incorporated by reference to Exhibit 4(b)
to the Registrant's Annual Report on Form 10-K for the year ended
November 30, 1992.
4(c) Specimen Stock Certificate.
*10(a) H.B. Fuller Company 1992 Stock Incentive Plan - incorporated by
reference to Exhibit 10(a) to the Registrant's Annual Report on Form
10-K for the year ended November 30, 1992.
*10(b) H.B. Fuller Company Restricted Stock Plan - incorporated by reference to
Exhibit 10(c) to the Registrant's Annual Report on Form 10-K for the
year ended November 30, 1993.
*10(c) H.B. Fuller Company Restricted Stock Unit Plan - incorporated by
reference to Exhibit 10(d) to the Registrant's Annual Report on Form
10-K for the year ended November 30, 1993.
*10(d) Director's Stock Plan - incorporated by reference to Exhibit 10(d) to
the Registrant's Annual Report on Form 10-K for the year ended November
30, 1994.
*10(e) H.B. Fuller Company 1987 Stock Incentive Plan - incorporated by
reference to Exhibit 4(a) to the Registrant's Registration Statement on
Form S-8 (Commission File No. 33-16082).
*10(f) H.B. Fuller Company Incentive Stock Option Plan of 1982 - incorporated
by reference to the Registrant's Registration Statement on Form S-8
(Commission File No. 2-89810).
*10(g) H.B. Fuller Company Nonqualified Retirement Plan for Costa Rica -
incorporated by reference to Exhibit 10(f) to the Registrant's Annual
Report on Form 10-K for the year ended November 30, 1988 (Commission
File No. 0-3488).
*10(h) Form of Employment Agreement signed by executive officers and certain
other employees - incorporated by reference to Exhibit 10(e) to the
Registrant's Annual Report on Form 10-K for the year ended November 30,
1990.
*10(i) Managing Director Agreement with Wolfgang Weber signed March 23, 1990 -
incorporated by reference to Exhibit 10(f) to the Registrant's Annual
Report on Form 10-K for the year ended November 30, 1990.
-15-
(a)(3.) Exhibits (continued)
*10(j) Supplement Agreement, dated March 10, 1993, to Managing Director
Agreement with Wolfgang Weber - incorporated by reference to Exhibit
10(k) to the Registrant's Annual Report on Form 10-K for the year ended
November 30, 1993.
*10(k) Supplemental Agreement to Managing Director Agreement with Wolfgang
Weber and Supplement Agreement.
*10(l) H.B. Fuller GmbH Pension Plan (summary of plan in English) -
incorporated by reference to Exhibit 10(g) to the Registrant's Annual
Report on Form 10-K for the year ended November 30, 1990.
*10(m) H.B. Fuller Company Supplemental Executive Retirement Plan -
incorporated by reference to Exhibit 10(j) to the Registrant's Annual
Report on Form 10-K for the year ended November 30, 1992.
*10(n) Deferred Compensation Agreement with Walter Kissling - incorporated by
reference to Exhibit 10(m) to the Registrant's Annual Report on Form
10-K405 for the year ended November 30, 1994.
*10(o) Retirement Plan for Directors of H.B. Fuller Company - incorporated by
reference to Exhibit 10(n) to the Registrant's Annual Report on Form
10-K405 for the year ended November 30, 1994.
*10(p) Performance Units Plan as of January 17, 1995.
*Asterisked items are management contracts or compensatory plans or arrangements
required to be filed as an exhibit pursuant to Item 14(a) of this Form 10-K.
11 Statement re: Computation of Net Earnings Per Common Share
13 Pages 29-53 of the 1995 Annual Report to Shareholders.
21 Subsidiaries of the Registrant
23 Consent of Price Waterhouse LLP
24 Manually signed Powers of Attorney
27 Financial Data Schedule
99 Report on Form 11-K of H.B. Fuller Company Thrift Plan
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the fourth quarter of the
fiscal year ended November 30, 1995.
-16-
S I G N A T U R E S
-------------------
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
H. B. FULLER COMPANY
Dated: February 23, 1996 By /s/ Walter Kissling
-------------------------------
WALTER KISSLING
President and
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated:
Signature Title
--------- -----
/s/ Walter Kissling President and
- ----------------------------- Chief Executive Officer and Director
WALTER KISSLING (Principal Executive Officer)
/s/ Jorge Walter Bolanos Senior Vice President,
- ----------------------------- Chief Financial Officer and Treasurer
JORGE WALTER BOLANOS (Principal Financial Officer)
/s/ David J. Maki Vice President and Controller
- ----------------------------- (Principal Accounting Officer)
DAVID J. MAKI
*ANTHONY L. ANDERSEN Chair, Board of Directors and Director
*NORBERT R. BERG Director
*EDWARD L. BRONSTIEN, JR. Director
*ROBERT J. CARLSON Director
*FREEMAN A. FORD Director
*GAIL D. FOSLER Director
*REATHA CLARK KING Director
*JOHN J. MAURIEL, JR. Director
*ROLF SCHUBERT Vice President and Director
*LORNE C. WEBSTER Director
By: /s/ Richard C. Baker Dated: February 23, 1996
--------------------------
RICHARD C. BAKER
Attorney in Fact
*Power of Attorney filed with this report as Exhibit 24 hereto.
-17-
Price Waterhouse LLP
REPORT OF INDEPENDENT ACCOUNTANTS
---------------------------------
To the Board of Directors
and Stockholders of
H.B. Fuller Company
In our opinion, the accompanying consolidated balance sheets and the related
consolidated statements of earnings, of stockholders' equity and of cash flows
present fairly, in all material respects, the financial position of H.B. Fuller
Company and its subsidiaries at November 30, 1995 and 1994, and the results of
their operations and their cash flows for each of the three years in the period
ended November 30, 1995, in conformity with generally accepted accounting
principles. These financial statements are the responsibility of the Company's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these statements in
accordance with generally accepted auditing standards which require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for the opinion expressed
above.
As discussed in Notes 1 and 6 to the consolidated financial statements, the
Company adopted the provisions of Statement of Financial Accounting Standards
(SFAS) No. 112, "Employers' Accounting for Postemployment Benefits," in 1995 and
the provisions of SFAS No. 109, "Accounting for Income Taxes," and No. 106,
"Employers' Accounting for Postretirement Benefits Other Than Pensions," in
1993.
/s/ Price Waterhouse LLP
Price Waterhouse LLP
Minneapolis, Minnesota
January 9, 1996
Schedule II
-----------
H.B. Fuller Company and Consolidated Subsidiaries
Valuation and Qualifying Accounts
Years Ended November 30, 1995, 1994, and 1993
(Dollars in thousands)
Allowance for doubtful receivables
------------------------------------------
1995 1994 1993
------ ------ ------
Balance at beginning of period $6,221 $5,519 $5,451
Additions(deductions):
Charged to costs and expenses 1,954 1,391 1,740
Accounts charged off during year (2,073) (1,091) (1,409)
Accounts of acquired businesses - 288 57
Effect of currency exchange rate
changes on beginning of year
balance 154 114 (320)
------ ------ ------
Balance at end of period $6,256 $6,221 $5,519
====== ====== ======
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