Exhibit 99.1

 

Worldwide Headquarters 1200 Willow Lake Boulevard St. Paul, Minnesota 55110-5101						Maximillian Marcy Investor Relations Contact 651-236-5062

 

NEWS		For Immediate Release		June 26, 2013

H.B. Fuller Reports Second Quarter 2013 Results

Second Quarter Adjusted Diluted EPS $0.67¹;

Second Quarter Diluted EPS $0.51;

Company Maintains 2013 EPS guidance of $2.55 to $2.65

ST. PAUL, Minn. – H.B. Fuller Company (NYSE: FUL) today reported financial results for the second quarter that ended June 1, 2013.

Second Quarter 2013 Highlights Included:

 

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Gross Profit margin improved 170 basis points versus the prior year’s adjusted result1 and 40 basis points relative to the prior quarter;

 

•

Selling, General and Administrative (SG&A) expense down 4 percent versus the prior quarter;

 

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EBITDA margin up over 100 basis points versus prior year’s adjusted result1, EIMEA EBITDA margin over 10 percent for the first time since 2009;

 

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Regional operating income2 increased 13 percent and 130 basis points versus last year’s adjusted result1;

 

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Adjusted diluted EPS from continuing operations of $0.671 up 8 percent versus last year;

 

•

Acquisition of Plexbond in Brazil announced.

Second Quarter 2013 Results:

Net income for the second quarter of 2013 was $25.9 million, or $0.51 per diluted share, versus net income from continuing operations of $5.1 million, or $0.10 per diluted share, in last year’s second quarter. Adjusted diluted earnings per share in the second quarter of 2013 were $0.67¹, up 8 percent from the prior year’s adjusted result of $0.62¹.

Net revenue for the second quarter of 2013 was $519.0 million, down 1.5 percent versus the second quarter of 2012. Higher average selling prices positively impacted net revenue growth by 0.2 percentage points. Foreign currency translation and lower volume reduced net revenue growth by 0.3 and 1.4 percentage points, respectively. Organic revenue declined by 1.2 percent year-over-year. Volume was slightly higher relative to last year in each geographic region except the EIMEA region where volume was down about 5 percent.

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“We are satisfied with the overall results we delivered this quarter,” said Jim Owens, H.B. Fuller president and chief executive officer. “While we did not deliver the organic growth we expected in the quarter, we managed our margins well, took another step toward completion of the business integration plan and reduced discretionary spending to deliver on our commitments. We have initiatives in the pipeline which will generate improved revenue results in the second half. We remain on track to deliver the Forbo synergies, our business integration project in Europe, our EPS commitments for the year and our strategic target of 15 percent EBITDA margin in 2015.”

Gross profit margin was up approximately 170 basis points compared to the prior year’s adjusted result¹ reflecting solid operational improvement as a result of the ongoing business integration project. Selling, General and Administrative (SG&A) expense was down versus the prior quarter and relatively flat versus last year’s second quarter result.

Balance Sheet and Cash Flow:

At the end of the second quarter of 2013, the Company had cash totaling $161 million and total debt of $496 million. This compares to first quarter 2013 levels of $163 million and $511 million, respectively. Sequentially, net debt was down by approximately $13 million. Capital expenditures were $28 million in the second quarter, with the bulk of this spending related to the Company’s ongoing business integration activities. Operating cash flow in the second quarter was $52 million.

Year-To-Date:

Net income for the first half of 2013 was $46.6 million, or $0.91 per diluted share, versus net income from continuing operations of $18.7 million, or $0.37 per diluted share, in the first half of 2012. Adjusted total diluted earnings per share in the first half of 2013 were $1.16¹, up 13 percent from the prior year’s first half adjusted result of $1.03¹.

Net revenue for the first half of 2013 was $998.9 million, up 14.5 percent versus the first half of 2012. Higher average selling prices and acquisitions positively impacted net revenue growth by 0.5 and 14.0 percentage points, respectively. Volume and foreign currency translation had no impact to net revenue growth. Organic revenue increased by 0.5 percent year-over-year.

 

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Business Integration and Special Charges

The Company has implemented a comprehensive business integration program to deliver synergies related to the acquisition of the Forbo adhesives business and to improve the performance of the EIMEA operating segment. The table below provides an estimate of the expected one-time costs of executing this multi-year project. In addition, the table lists, for each cost element, the costs incurred in the current quarter, for the fiscal year to date and since the project’s inception in the fourth quarter of 2011:

 

		Expected				Costs Incurred
		Costs				Q2 2013				YTD 2013				Inception
Cost Elements		($ millions)				($ millions)				($ millions)				($ millions)
Acquisition and transformation			35				2				4				30
Workforce reduction			53				4				4				32
Facility exit			17				2				4				5
Other			10				2				3				5
Total cash costs			115				10				15				72
Total non-cash costs			6				1				1				4

Fiscal 2013 Outlook:

The Company has maintained earnings guidance for the 2013 fiscal year at a range of $2.55 to $2.65 per diluted share. Guidance is based on adjusted earnings per share, which exclude all special charges related to the business integration project which is ongoing.

The table below shows each of the elements of the Company’s 2013 guidance. All amounts shown are presented on the basis described above.

 

		Expected Full-Year
Earnings per Diluted Share (no-change)		$2.55 to $2.65
Core Tax Rate (no-change)		30%
Capex ( $ millions) (no-change)		$110
EBITDA ($ millions) (no-change)		$260-$265

Conference Call:

The Company will host an investor conference call to discuss second quarter 2013 results on Thursday, June 27, 2013, 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.

 

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Regulation G:

The information presented in this earnings release regarding regional operating income, regional 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 2012 net revenue of $1.9 billion, H.B. Fuller serves customers in packaging, hygiene, general 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; 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 filing of 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.

 

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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
		June 1, 2013				Net Revenue				June 2, 2012				Net Revenue
Net revenue		$	519,016				100.0	%		$	526,995				100.0	%
Cost of sales			(372,400	)			(71.8	%)			(390,444	)			(74.1	%)
Gross profit			146,616				28.2	%			136,551				25.9	%
Selling, general and administrative expenses			(93,806	)			(18.1	%)			(92,956	)			(17.6	%)
Special charges, net			(10,843	)			(2.1	%)			(32,127	)			(6.1	%)
Asset impairment charges			—				0.0	%			(671	)			(0.1	%)
Other income (expense), net			(1,814	)			(0.3	%)			231				0.0	%
Interest expense			(4,884	)			(0.9	%)			(5,749	)			(1.1	%)
Income from continuing operations before income taxes and income from equity method investments			35,269				6.8	%			5,279				1.0	%
Income taxes			(10,864	)			(2.1	%)			(2,367	)			(0.4	%)
Income from equity method investments			1,643				0.3	%			2,148				0.4	%
Income from continuing operations			26,048				5.0	%			5,060				1.0	%
Income (loss) from discontinued operations, net of tax			—				0.0	%			(3,053	)			(0.6	%)
Net income including non-controlling interests			26,048				5.0	%			2,007				0.4	%
Net income attributable to non-controlling interests			(119	)			(0.0	%)			(71	)			(0.0	%)
Net income attributable to H.B. Fuller		$	25,929				5.0	%		$	1,936				0.4	%
Basic income per common share attributable to H.B. Fuller
Income from continuing operations			0.52								0.10
Income (loss) from discontinued operations			—								(0.06	)
		$	0.52							$	0.04
Diluted income per common share attributable to H.B. Fuller
Income from continuing operations			0.51								0.10
Income (loss) from discontinued operations			—								(0.06	)
		$	0.51							$	0.04
Weighted-average common shares outstanding:
Basic			49,935								49,652
Diluted			51,152								50,722
Dividends declared per common share		$	0.100							$	0.085

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

 

		June 1, 2013				December 1, 2012						June 2, 2012
Cash & cash equivalents		$	161,185					$	200,436					$	154,299
Trade accounts receivable, net			317,048						320,152						315,475
Inventories			222,381						208,531						212,364
Trade payables			166,664						163,062						173,471
Total assets			1,773,853						1,786,320						1,735,403
Total debt			496,408						520,225						616,801

 

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H.B. FULLER COMPANY AND SUBSIDIARIES

CONSOLIDATED FINANCIAL INFORMATION

In thousands, except per share amounts (unaudited)

 

		26 Weeks Ended				Percent of				26 Weeks Ended				Percent of
		June 1, 2013				Net Revenue				June 2, 2012				Net Revenue
Net revenue		$	998,858				100.0	%		$	872,449				100.0	%
Cost of sales			(718,866	)			(72.0	%)			(633,211	)			(72.6	%)
Gross profit			279,992				28.0	%			239,238				27.4	%
Selling, general and administrative expenses			(191,446	)			(19.2	%)			(167,986	)			(19.3	%)
Special charges			(16,176	)			(1.6	%)			(38,609	)			(4.4	%)
Asset impairment charges			—				0.0	%			(671	)			(0.1	%)
Other income (expense), net			(1,436	)			(0.1	%)			648				0.1	%
Interest expense			(10,211	)			(1.0	%)			(8,367	)			(1.0	%)
Income from continuing operations before income taxes and income from equity method investments			60,723				6.1	%			24,253				2.8	%
Income taxes			(17,984	)			(1.8	%)			(9,930	)			(1.1	%)
Income from equity method investments			4,083				0.4	%			4,344				0.5	%
Income from continuing operations			46,822				4.7	%			18,667				2.1	%
Income (loss) from discontinued operationsa			—				0.0	%			(1,330	)			(0.2	%)
Net income including non-controlling interests			46,822				4.7	%			17,337				2.0	%
Net (income) loss attributable to non-controlling interests			(216	)			(0.0	%)			(96	)			(0.0	%)
Net income attributable to H.B. Fuller		$	46,606				4.7	%		$	17,241				2.0	%
Basic income per common share attributable to H.B. Fuller
Income from continuing operations			0.93								0.38
Income (loss) from discontinued operations			—								(0.03	)
		$	0.93							$	0.35
Diluted income per common share attributable to H.B. Fuller
Income from continuing operations			0.91								0.37
Income (loss) from discontinued operations			—								(0.03	)
		$	0.91							$	0.34
Weighted-average common shares outstanding:
Basic			49,876								49,509
Diluted			51,090								50,488
Dividends declared per common share		$	0.185							$	0.160

 

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H.B. FULLER COMPANY AND SUBSIDIARIES

REGION FINANCIAL INFORMATION

In thousands (unaudited)

 

		13 Weeks Ended				13 Weeks Ended
		June 1, 2013				June 2, 2012
Net Revenue:
North America		$	233,575			$	233,061
EIMEA			185,194				193,943
Latin America			38,132				38,555
Asia Pacific			62,115				61,436
Total H.B. Fuller		$	519,016			$	526,995
Regional Operating Income:2
North America		$	32,495			$	28,263
EIMEA			14,145				9,485
Latin America			3,377				3,729
Asia Pacific			2,793				2,118
Total H.B. Fuller		$	52,810			$	43,595
Depreciation Expense:
North America		$	4,020			$	4,462
EIMEA			2,940				3,518
Latin America			325				415
Asia Pacific			1,052				1,210
Total H.B. Fuller		$	8,337			$	9,605
Amortization Expense:
North America		$	3,156			$	3,034
EIMEA			1,881				1,834
Latin America			70				64
Asia Pacific			487				476
Total H.B. Fuller		$	5,594			$	5,408
EBITDA:3
North America		$	39,671			$	35,759
EIMEA			18,966				14,837
Latin America			3,772				4,208
Asia Pacific			4,332				3,804
Total H.B. Fuller		$	66,741			$	58,608
Regional Operating Margin:4
North America			13.9	%			12.1	%
EIMEA			7.6	%			4.9	%
Latin America			8.9	%			9.7	%
Asia Pacific			4.5	%			3.4	%
Total H.B. Fuller			10.2	%			8.3	%
EBITDA Margin:3
North America			17.0	%			15.3	%
EIMEA			10.2	%			7.7	%
Latin America			9.9	%			10.9	%
Asia Pacific			7.0	%			6.2	%
Total H.B. Fuller			12.9	%			11.1	%
Net Revenue Growth:
North America			0.2	%
EIMEA			(4.5	%)
Latin America			(1.1	%)
Asia Pacific			1.1	%
Total H.B. Fuller			(1.5	%)

 

*	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

 

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H.B. FULLER COMPANY AND SUBSIDIARIES

REGION FINANCIAL INFORMATION

In thousands (unaudited)

 

		26 Weeks Ended				26 Weeks Ended
		June 1, 2013				June 2, 2012
Net Revenue:
North America		$	439,868			$	383,651
EIMEA			362,695				304,594
Latin America			73,601				74,152
Asia Pacific			122,694				110,052
Total H.B. Fuller		$	998,858			$	872,449
Regional Operating Income:2
North America		$	57,333			$	46,230
EIMEA			20,618				16,033
Latin America			5,828				6,116
Asia Pacific			4,767				2,873
Total H.B. Fuller		$	88,546			$	71,252
Depreciation Expense:
North America		$	8,437			$	7,650
EIMEA			6,651				5,566
Latin America			695				733
Asia Pacific			2,298				2,245
Total H.B. Fuller		$	18,081			$	16,194
Amortization Expense:
North America		$	6,263			$	5,080
EIMEA			3,746				2,073
Latin America			132				72
Asia Pacific			960				744
Total H.B. Fuller		$	11,101			$	7,969
EBITDA:3
North America		$	72,033			$	58,960
EIMEA			31,015				23,672
Latin America			6,655				6,921
Asia Pacific			8,025				5,862
Total H.B. Fuller		$	117,728			$	95,415
Regional Operating Margin:4
North America			13.0	%			12.1	%
EIMEA			5.7	%			5.3	%
Latin America			7.9	%			8.2	%
Asia Pacific			3.9	%			2.6	%
Total H.B. Fuller			8.9	%			8.2	%
EBITDA Margin:3
North America			16.4	%			15.4	%
EIMEA			8.6	%			7.8	%
Latin America			9.0	%			9.3	%
Asia Pacific			6.5	%			5.3	%
Total H.B. Fuller			11.8	%			10.9	%
Net Revenue Growth:
North America			14.7	%
EIMEA			19.1	%
Latin America			(0.7	%)
Asia Pacific			11.5	%
Total H.B. Fuller			14.5	%

 

*	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

 

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H.B. FULLER COMPANY AND SUBSIDIARIES

REGION FINANCIAL INFORMATION

NET REVENUE GROWTH

(unaudited)

13 Weeks Ended June 1, 2013

 

		North America				EIMEA				Latin America				Asia Pacific				Total HBF
Price			0.0	%			1.8	%			(1.2	%)			(2.9	%)			0.2	%
Volume			0.3	%			(5.3	%)			0.1	%			3.2	%			(1.4	%)
Organic Growth			0.3	%			(3.5	%)			(1.1	%)			0.3	%			(1.2	%)
F/X			(0.1	%)			(1.0	%)			0.0	%			0.8	%			(0.3	%)
			0.2	%			(4.5	%)			(1.1	%)			1.1	%			(1.5	%)

26 Weeks Ended June 1, 2013

 

		North America				EIMEA				Latin America				Asia Pacific				Total HBF
Price			0.5	%			2.0	%			(0.9	%)			(2.1	%)			0.5	%
Volume			0.9	%			(2.3	%)			(0.8	%)			3.7	%			0.0	%
Organic Growth			1.4	%			(0.3	%)			(1.7	%)			1.6	%			0.5	%
F/X			0.0	%			(0.4	%)			0.0	%			1.0	%			0.0	%
Acquisition			13.3	%			19.8	%			1.0	%			8.9	%			14.0	%
			14.7	%			19.1	%			(0.7	%)			11.5	%			14.5	%

 

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H.B. FULLER COMPANY AND SUBSIDIARIES

REGULATION G RECONCILIATION

In thousands (unaudited)

 

		13 Weeks Ended				13 Weeks Ended
		June 1, 2013				June 2, 2012
Net income including non-controlling interests		$	26,048			$	2,007
Income (loss) from discontinued operations			—				3,053
Income from equity method investments			(1,643	)			(2,148	)
Income taxes			10,864				2,367
Interest expense			4,884				5,749
Other income (expense), net			1,814				(231	)
Asset impairment charges			—				671
Special charges			10,843				32,127
Regional Operating Income2			52,810				43,595
Depreciation expense			8,337				9,605
Amortization expense			5,594				5,408
EBITDA3		$	66,741			$	58,608
EBITDA margin3			12.9	%			11.1	%

 

		26 Weeks Ended				26 Weeks Ended
		June 1, 2013				June 2, 2012
Net income including non-controlling interests		$	46,822			$	17,337
Income from discontinued operations			—				1,330
Income from equity method investments			(4,083	)			(4,344	)
Income taxes			17,984				9,930
Interest expense			10,211				8,367
Other income (expense), net			1,436				(648	)
Asset impairment charges			—				671
Special charges			16,176				38,609
Regional Operating Income2			88,546				71,252
Depreciation expense			18,081				16,194
Amortization expense			11,101				7,969
EBITDA3		$	117,728			$	95,415
EBITDA margin3			11.8	%			10.9	%

 

*	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

 

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H.B. FULLER COMPANY AND SUBSIDIARIES

REGULATION G RECONCILIATION

In thousands (unaudited)

 

		13 Weeks Ended				13 Weeks Ended
		June 1, 2013				June 2, 2012
Net revenue		$	519,016			$	526,995
Cost of sales			(372,400	)			(390,444	)
Gross profit			146,616				136,551
Selling, general and administrative expenses			(93,806	)			(92,956	)
Regional operating income2			52,810				43,595
Depreciation expense			8,337				9,605
Amortization expense			5,594				5,408
EBITDA3		$	66,741			$	58,608
EBITDA margin3			12.9	%			11.1	%

 

		26 Weeks Ended				26 Weeks Ended
		June 1, 2013				June 2, 2012
Net revenue		$	998,858			$	872,449
Cost of sales			(718,866	)			(633,211	)
Gross profit			279,992				239,238
Selling, general and administrative expenses			(191,446	)			(167,986	)
Regional operating income2			88,546				71,252
Depreciation expense			18,081				16,194
Amortization expense			11,101				7,969
EBITDA3		$	117,728			$	95,415
EBITDA margin3			11.8	%			10.9	%

 

*	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

 

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H.B. FULLER COMPANY AND SUBSIDIARIES

REGULATION G RECONCILIATION

In thousands, except per share amounts (unaudited)

 

														Adjusted
						13 Weeks Ended								13 Weeks Ended
						June 1, 2013				Adjustments				June 1, 2013
Net revenue						$	519,016			$	—			$	519,016
Cost of sales							(372,400	)			—				(372,400	)
Gross profit							146,616				—				146,616
Selling, general and administrative expenses							(93,806	)			—				(93,806	)
Acquisition and transformation related costs			(1,884	)
Workforce reduction costs			(3,697	)
Facility exit costs			(3,267	)
Other related costs			(1,995	)
Special charges, net							(10,843	)			(10,843	)			—
Other income (expense), net							(1,814	)			—				(1,814	)
Interest expense							(4,884	)			—				(4,884	)
Income from continuing operations before income taxes and income from equity method investments							35,269				(10,843	)			46,112
Income taxes							(10,864	)			2,467				(13,331	)
Income from equity method investments							1,643				—				1,643
Net income from continuing operations							26,048				(8,376	)			34,424
Net (income) loss attributable to non-controlling interests							(119	)			—				(119	)
Net income attributable to H.B. Fuller						$	25,929			$	(8,376	)		$	34,305
Basic income (loss) from continuing operations per common share attributable to H.B. Fuller						$	0.52			$	(0.17	)		$	0.69
Diluted income (loss) from continuing operations per common share attributable to H.B. Fuller						$	0.51			$	(0.16	)		$	0.67	1
Weighted-average common shares outstanding:
Basic							49,935				49,935				49,935
Diluted							51,152				51,152				51,152

 

12

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H.B. FULLER COMPANY AND SUBSIDIARIES

REGULATION G RECONCILIATION

In thousands, except per share amounts (unaudited)

 

														Adjusted
						13 Weeks Ended								13 Weeks Ended
						June 2, 2012				Adjustments				June 2, 2012
Net revenue						$	526,995			$				$	526,995
Cost of sales							(390,444	)			(3,314	)			(387,130	)
Gross profit							136,551				(3,314	)			139,865
Selling, general and administrative expenses							(92,956	)							(92,956	)
Acquisition and transformation related costs			(11,091	)
Workforce reduction costs			(19,567	)
Facility exit costs			(1,153	)
Other related costs			(316	)
Special charges, net							(32,127	)			(32,127	)			—
Asset impairment charges							(671	)							(671	)
Other income (expense), net							231				—				231
Interest expense							(5,749	)			—				(5,749	)
Income from continuing operations before income taxes and income from equity method investments							5,279				(35,441	)			40,720
Income taxes							(2,367	)			8,848				(11,215	)
Income from equity method investments							2,148				—				2,148
Net income from continuing operations							5,060				(26,593	)			31,653
Income (loss) from discontinued operations							(3,053	)			—				(3,053	)
Net income including non-controlling interests							2,007				(26,593	)			28,600
Net (income) loss attributable to non-controlling interests							(71	)			—				(71	)
Net income attributable to H.B. Fuller						$	1,936			$	(26,593	)		$	28,529
Basic income per common share attributable to H.B. Fuller
Income from continuing operations							0.10				(0.54	)			0.64
Income (loss) from discontinued operations							(0.06	)			—				(0.06	)
						$	0.04			$	(0.54	)		$	0.58
Diluted income per common share attributable to H.B. Fuller
Income from continuing operations							0.10				(0.52	)			0.62	1
Income (loss) from discontinued operations							(0.06	)			—				(0.06	)
						$	0.04			$	(0.52	)		$	0.56
Weighted-average common shares outstanding:
Basic							49,652				49,652				49,652
Diluted							50,722				50,722				50,722

 

13

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H.B. FULLER COMPANY AND SUBSIDIARIES

REGULATION G RECONCILIATION

In thousands, except per share amounts (unaudited)

 

														Adjusted
						26 Weeks Ended								26 Weeks Ended
						June 1, 2013				Adjustments				June 1, 2013
Net revenue						$	998,858			$	—			$	998,858
Cost of sales							(718,866	)							(718,866	)
Gross profit							279,992				—				279,992
Selling, general and administrative expenses							(191,446	)			—				(191,446	)
Acquisition and transformation related costs			(4,166	)
Workforce reduction costs			(4,181	)
Facility exit costs			(5,056	)
Other related costs			(2,773	)
Special charges							(16,176	)			(16,176	)			—
Other income (expense), net							(1,436	)			—				(1,436	)
Interest expense							(10,211	)			—				(10,211	)
Income from continuing operations before income taxes and income from equity method investments							60,723				(16,176	)			76,899
Income taxes							(17,984	)			3,566				(21,550	)
Income from equity method investments							4,083				—				4,083
Income from continuing operations							46,822				(12,610	)			59,432
Net income including non-controlling interests							46,822				(12,610	)			59,432
Net (income) loss attributable to non-controlling interests							(216	)			—				(216	)
Net income attributable to H.B. Fuller						$	46,606			$	(12,610	)		$	59,216
Basic income per common share attributable to H.B. Fuller4, a
Income (loss) from continuing operations							0.93				(0.25	)			1.19
						$	0.93			$	(0.25	)		$	1.19
Diluted income per common share attributable to H.B. Fuller4
Income (loss) from continuing operations							0.91				(0.25	)			1.16	1
						$	0.91			$	(0.25	)		$	1.16
Weighted-average common shares outstanding:
Basic							49,876				49,876				49,876
Diluted							51,090				51,090				51,090

 

a	Income per share amounts may not add due to rounding

 

14

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H.B. FULLER COMPANY AND SUBSIDIARIES

REGULATION G RECONCILIATION

In thousands, except per share amounts (unaudited)

 

														Adjusted
						26 Weeks Ended								26 Weeks Ended
						June 2, 2012				Adjustments				June 2, 2012
Net revenue						$	872,449			$	—			$	872,449
Cost of sales							(633,211	)			(3,314	)			(629,897	)
Gross profit							239,238				(3,314	)			242,552
Selling, general and administrative expenses							(167,986	)							(167,986	)
Acquisition and transformation related costs			(13,034	)
Workforce reduction costs			(23,522	)
Facility exit costs			(1,496	)
Other related costs			(557	)
Special charges							(38,609	)			(38,609	)			—
Asset impairment charges							(671	)							(671	)
Other income (expense), net							648								648
Interest expense							(8,367	)							(8,367	)
Income from continuing operations before income taxes and income from equity method investments							24,253				(41,923	)			66,176
Income taxes							(9,930	)			8,477				(18,407	)
Income from equity method investments							4,344				—				4,344
Income from continuing operations							18,667				(33,446	)			52,113
Income (loss) from discontinued operations							(1,330	)			—				(1,330	)
Net income including non-controlling interests							17,337				(33,446	)			50,783
Net loss attributable to non-controlling interests							(96	)			—				(96	)
Net income attributable to H.B. Fuller						$	17,241			$	(33,446	)		$	50,687
Basic income per common share attributable to H.B. Fullera
Income from continuing operations							0.38				(0.68	)			1.05
Income (loss) from discontinued operations							(0.03	)			—				(0.03	)
						$	0.35			$	(0.68	)		$	1.02
Diluted income per common share attributable to H.B. Fuller
Income from continuing operations							0.37				(0.66	)			1.03	1
Income (loss) from discontinued operations							(0.03	)			—				(0.03	)
						$	0.34			$	(0.66	)		$	1.00
Weighted-average common shares outstanding:
Basic							49,509				49,509				49,509
Diluted							50,488				50,488				50,488

 

a	Income per share amounts may not add due to rounding

 

15

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1

Adjusted diluted earnings per share (EPS) from continuing operations is a non-GAAP financial measure. First and second 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 $10.8 million, $5.3 million, $32.1 million and $6.5 million on a pre-tax basis ($0.16, $0.08, $0.52 and $0.14 per diluted share) in Q2 2013, Q1 2013, 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

Regional 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 regional operating income calculation. In Q2 2013, Q1 2013, Q2 2012 and Q1 2012, special charges, net totaled $10.8 million, $5.3 million, $32.1 million and $6.5 million, respectively.

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

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

 

16