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		September 24, 2014

H.B. Fuller Reports Third Quarter 2014 Results

Third Quarter Adjusted Diluted EPS $0.42¹;

Third Quarter Diluted EPS $0.08;

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

ST. PAUL, Minn. – H.B. Fuller Company (NYSE: FUL) today reported financial results for the third quarter that ended August 30, 2014.

Items of Note for the Third Quarter of 2014:

 

•

Volume increased 2 percent compared to the prior year; organic growth outside the EIMEA region up 5 percent;

 

•

Completed closure of Wels, Austria production site;

 

•

Revised project management approach to accelerate the completion of the European business integration project and the enhancement of the SAP environment in North America;

 

•

After the end of the quarter, completed acquisition of ProSpec, a construction products business with strong customer relationships in key US markets.

Third Quarter 2014 Results:

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

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

---

Gross profit margin was down versus the prior year’s result due to a variety of factors including excess costs associated with the business integration project in Europe and Project ONE in North America and margin pressure in several operating segments related to raw material cost fluctuations. SG&A expense was well controlled, up only 2 percent versus the prior year’s third quarter, excluding certain non-recurring costs^1.

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

Balance Sheet and Cash Flow:

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

Year-To-Date Results:

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

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

 

2

---

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

Project ONE and Business Integration:

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

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

Fiscal 2014 Outlook:

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

 

3

---

Conference Call:

The Company will host an investor conference call to discuss third quarter 2014 results on Thursday, September 25, 2014, at 9:30 a.m. Central U.S. time (10:30 a.m. Eastern U.S. time). The conference call audio and accompanying presentation slides will be available to all interested parties via a simultaneous webcast at www.hbfuller.com under the Investor Relations section. The event is scheduled to last one hour. For those unable to listen live, an audio replay of the event along with the accompanying presentation will be archived on the Company’s website.

Regulation G:

The information presented in this earnings release regarding segment operating income, adjusted diluted earnings per share and earnings before interest, taxes, depreciation, and amortization (EBITDA) does not conform to generally accepted accounting principles (GAAP) and should not be construed as an alternative to the reported results determined in accordance with GAAP. Management has included this non-GAAP information to assist in understanding the operating performance of the Company and its operating segments as well as the comparability of results. The non-GAAP information provided may not be consistent with the methodologies used by other companies. All non-GAAP information is reconciled with reported GAAP results in the tables below.

About H.B. Fuller Company:

For over 125 years, H.B. Fuller has been a leading global adhesives provider focusing on perfecting adhesives, sealants and other specialty chemical products to improve products and lives. With fiscal 2013 net revenue of $2.05 billion, H.B. Fuller’s commitment to innovation brings together people, products and processes that answer and solve some of the world’s biggest challenges. Our reliable, responsive service creates lasting, rewarding connections with customers in packaging, hygiene, general assembly, electronic and assembly materials, paper converting, woodworking, construction, automotive and consumer businesses. And our promise to our people connects them with opportunities to innovate and thrive. For more information, visit us at www.hbfuller.com and subscribe to our blog.

Safe Harbor for Forward-Looking Statements:

Certain statements in this document may be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are subject to various risks and uncertainties, including but not limited to the following: the Company’s ability to effectively integrate and operate acquired businesses; the ability to effectively implement Project ONE; political and economic conditions; product demand; competitive products and pricing; costs of and savings from restructuring initiatives; geographic and product mix; availability and price of raw materials; the Company’s relationships with its major customers and suppliers; changes in tax laws

 

4

---

and tariffs; devaluations and other foreign exchange rate fluctuations; the impact of litigation and environmental matters; the effect of new accounting pronouncements and accounting charges and credits; and similar matters. Further information about the various risks and uncertainties can be found in the Company’s SEC 10-K filing for the fiscal year ended November 30, 2013. All forward-looking information represents management’s best judgment as of this date based on information currently available that in the future may prove to have been inaccurate. Additionally, the variety of products sold by the Company and the regions where the Company does business make it difficult to determine with certainty the increases or decreases in net revenue resulting from changes in the volume of products sold, currency impact, changes in product mix, and selling prices. However, management’s best estimates of these changes as well as changes in other factors have been included.

 

5

---

H.B. FULLER COMPANY AND SUBSIDIARIES

CONSOLIDATED FINANCIAL INFORMATION

In thousands, except per share amounts (unaudited)

 

		13 Weeks Ended				Percent of				13 Weeks Ended				Percent of
		August 30, 2014				Net Revenue				August 31, 2013				Net Revenue
Net revenue		$	526,765				100.0	%		$	514,579				100.0	%
Cost of sales			(401,611	)			(76.2	%)			(370,072	)			(71.9	%)
Gross profit			125,154				23.8	%			144,507				28.1	%
Selling, general and administrative expenses			(96,779	)			(18.4	%)			(90,604	)			(17.6	%)
Special charges, net			(12,343	)			(2.3	%)			(12,775	)			(2.5	%)
Other income (expense), net			(289	)			(0.1	%)			(1,046	)			(0.2	%)
Interest expense			(5,292	)			(1.0	%)			(4,579	)			(0.9	%)
Income from continuing operations before income taxes and income from equity method investments			10,451				2.0	%			35,503				6.9	%
Income taxes			(8,035	)			(1.5	%)			(10,290	)			(2.0	%)
Income from equity method investments			1,668				0.3	%			1,937				0.4	%
Income from continuing operations			4,084				0.8	%			27,150				5.3	%
Income from discontinued operations, net of tax			—				0.0	%			1,211				0.2	%
Net income including non-controlling interests			4,084				0.8	%			28,361				5.5	%
Net income attributable to non-controlling interests			(97	)			(0.0	%)			(92	)			(0.0	%)
Net income attributable to H.B. Fuller		$	3,987				0.8	%		$	28,269				5.5	%
Basic income per common share attributable to H.B. Fullera
Income from continuing operations			0.08								0.54
Income from discontinued operations			—								0.02
		$	0.08							$	0.57
Diluted income per common share attributable to H.B. Fuller
Income from continuing operations			0.08								0.53
Income from discontinued operations			—								0.02
		$	0.08							$	0.55
Weighted-average common shares outstanding:
Basic			50,053								49,913
Diluted			51,297								51,127
Dividends declared per common share		$	0.120							$	0.100

 

a	Income per share amounts may not add due to rounding

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

 

		August 30, 2014				November 30, 2013				August 31, 2013
Cash & cash equivalents		$	75,544			$	155,121			$	160,259
Trade accounts receivable, net			345,104				331,125				318,611
Inventories			281,265				221,537				221,256
Trade payables			212,491				201,575				169,267
Total assets			1,937,518				1,873,028				1,800,483
Total debt			562,901				492,904				493,454

 

6

---

H.B. FULLER COMPANY AND SUBSIDIARIES

CONSOLIDATED FINANCIAL INFORMATION

In thousands, except per share amounts (unaudited)

 

		39 Weeks Ended				Percent of				39 Weeks Ended				Percent of
		August 30, 2014				Net Revenue				August 31, 2013				Net Revenue
Net revenue		$	1,556,780				100.0	%		$	1,513,437				100.0	%
Cost of sales			(1,155,926	)			(74.3	%)			(1,088,938	)			(72.0	%)
Gross profit			400,854				25.7	%			424,499				28.0	%
Selling, general and administrative expenses			(289,950	)			(18.6	%)			(282,050	)			(18.6	%)
Special charges			(37,615	)			(2.4	%)			(28,951	)			(1.9	%)
Other income (expense), net			(1,543	)			(0.1	%)			(2,482	)			(0.2	%)
Interest expense			(14,178	)			(0.9	%)			(14,790	)			(1.0	%)
Income from continuing operations before income taxes and income from equity method investments			57,568				3.7	%			96,226				6.4	%
Income taxes			(23,414	)			(1.5	%)			(28,274	)			(1.9	%)
Income from equity method investments			5,205				0.3	%			6,020				0.4	%
Income from continuing operations			39,359				2.5	%			73,972				4.9	%
Income from discontinued operations			—				0.0	%			1,211				0.1	%
Net income including non-controlling interests			39,359				2.5	%			75,183				5.0	%
Net income attributable to non-controlling interests			(264	)			(0.0	%)			(308	)			(0.0	%)
Net income attributable to H.B. Fuller		$	39,095				2.5	%		$	74,875				4.9	%
Basic income per common share attributable to H.B. Fuller
Income from continuing operations			0.78								1.48
Income from discontinued operations			—								0.02
		$	0.78							$	1.50
Diluted income per common share attributable to H.B. Fullera
Income from continuing operations			0.76								1.44
Income from discontinued operations			—								0.02
		$	0.76							$	1.47
Weighted-average common shares outstanding:
Basic			49,973								49,888
Diluted			51,242								51,102
Dividends declared per common share		$	0.340							$	0.285

 

a	Income per share amounts may not add due to rounding

 

 

7

---

H.B. FULLER COMPANY AND SUBSIDIARIES

SEGMENT FINANCIAL INFORMATION

In thousands (unaudited)

 

		13 Weeks Ended				13 Weeks Ended
		August 30, 2014				August 31, 2013
Net Revenue:
Americas Adhesives		$	237,657			$	233,515
EIMEA			177,478				180,753
Asia Pacific			63,847				59,454
Construction Products			47,783				40,857
Total H.B. Fuller		$	526,765			$	514,579
Segment Operating Income:2
Americas Adhesives		$	21,854			$	34,871
EIMEA			3,139				14,199
Asia Pacific			897				1,564
Construction Products			2,485				3,269
Total H.B. Fuller		$	28,375			$	53,903
Depreciation Expense:
Americas Adhesives		$	4,353			$	3,710
EIMEA			4,594				3,094
Asia Pacific			1,340				1,121
Construction Products			918				816
Total H.B. Fuller		$	11,205			$	8,741
Amortization Expense:
Americas Adhesives		$	1,394			$	1,387
EIMEA			1,924				1,843
Asia Pacific			462				481
Construction Products			1,954				1,933
Total H.B. Fuller		$	5,734			$	5,644
EBITDA:3
Americas Adhesives		$	27,601			$	39,968
EIMEA			9,657				19,136
Asia Pacific			2,698				3,166
Construction Products			5,358				6,018
Total H.B. Fuller		$	45,314			$	68,288
Segment Operating Margin:4
Americas Adhesives			9.2	%			14.9	%
EIMEA			1.8	%			7.9	%
Asia Pacific			1.4	%			2.6	%
Construction Products			5.2	%			8.0	%
Total H.B. Fuller			5.4	%			10.5	%
EBITDA Margin:3
Americas Adhesives			11.6	%			17.1	%
EIMEA			5.4	%			10.6	%
Asia Pacific			4.2	%			5.3	%
Construction Products			11.2	%			14.7	%
Total H.B. Fuller			8.6	%			13.3	%
Net Revenue Growth:
Americas Adhesives			1.8	%
EIMEA			(1.8	%)
Asia Pacific			7.4	%
Construction Products			17.0	%
Total H.B. Fuller			2.4	%

 

8

---

H.B. FULLER COMPANY AND SUBSIDIARIES

SEGMENT FINANCIAL INFORMATION

In thousands (unaudited)

 

		39 Weeks Ended				39 Weeks Ended
		August 30, 2014				August 31, 2013
Net Revenue:
Americas Adhesives		$	684,308			$	670,019
EIMEA			538,693				543,448
Asia Pacific			196,842				182,148
Construction Products			136,937				117,822
Total H.B. Fuller		$	1,556,780			$	1,513,437
Segment Operating Income:2
Americas Adhesives		$	78,949			$	92,621
EIMEA			21,735				34,817
Asia Pacific			4,443				6,331
Construction Products			5,777				8,680
Total H.B. Fuller		$	110,904			$	142,449
Depreciation Expense:
Americas Adhesives		$	12,284			$	11,214
EIMEA			11,895				9,745
Asia Pacific			3,930				3,419
Construction Products			2,684				2,444
Total H.B. Fuller		$	30,793			$	26,822
Amortization Expense:
Americas Adhesives		$	4,182			$	3,926
EIMEA			5,815				5,589
Asia Pacific			1,453				1,441
Construction Products			5,861				5,790
Total H.B. Fuller		$	17,311			$	16,746
EBITDA:3
Americas Adhesives		$	95,415			$	107,761
EIMEA			39,445				50,151
Asia Pacific			9,826				11,191
Construction Products			14,322				16,914
Total H.B. Fuller		$	159,008			$	186,017
Segment Operating Margin:4
Americas Adhesives			11.5	%			13.8	%
EIMEA			4.0	%			6.4	%
Asia Pacific			2.3	%			3.5	%
Construction Products			4.2	%			7.4	%
Total H.B. Fuller			7.1	%			9.4	%
EBITDA Margin:3
Americas Adhesives			13.9	%			16.1	%
EIMEA			7.3	%			9.2	%
Asia Pacific			5.0	%			6.1	%
Construction Products			10.5	%			14.4	%
Total H.B. Fuller			10.2	%			12.3	%
Net Revenue Growth:
Americas Adhesives			2.1	%
EIMEA			(0.9	%)
Asia Pacific			8.1	%
Construction Products			16.2	%
Total H.B. Fuller			2.9	%

 

9

---

H.B. FULLER COMPANY AND SUBSIDIARIES

SEGMENT FINANCIAL INFORMATION

NET REVENUE GROWTH

(unaudited)

 

						13 Weeks Ended August 30, 2014
		Americas Adhesives				EIMEA				Asia Pacific				Construction Products				Total HBF
Price			(1.6	%)			0.4	%			0.3	%			(1.5	%)			(0.7	%)
Volume			3.6	%			(5.4	%)			6.7	%			18.5	%			2.0	%
Organic Growth			2.0	%			(5.0	%)			7.0	%			17.0	%			1.3	%
F/X			(0.2	%)			3.2	%			0.4	%			0.0	%			1.1	%
			1.8	%			(1.8	%)			7.4	%			17.0	%			2.4	%
						39 Weeks Ended August 30, 2014
		Americas Adhesives				EIMEA				Asia Pacific				Construction Products				Total HBF
Price			(1.3	%)			0.5	%			(0.1	%)			(3.0	%)			(0.6	%)
Volume			3.8	%			(3.5	%)			10.7	%			19.2	%			3.2	%
Organic Growth			2.5	%			(3.0	%)			10.6	%			16.2	%			2.6	%
F/X			(0.4	%)			2.1	%			(2.5	%)			0.0	%			0.3	%
			2.1	%			(0.9	%)			8.1	%			16.2	%			2.9	%

 

10

---

H.B. FULLER COMPANY AND SUBSIDIARIES

REGULATION G RECONCILIATION

In thousands (unaudited)

 

		13 Weeks Ended				13 Weeks Ended
		August 30, 2014				August 31, 2013
Net income including non-controlling interests		$	4,084			$	28,361
Income from discontinued operations			—				(1,211	)
Income from equity method investments			(1,668	)			(1,937	)
Income taxes			8,035				10,290
Interest expense			5,292				4,579
Other income (expense), net			289				1,046
Special charges			12,343				12,775
Segment operating income2			28,375				53,903
Depreciation expense			11,205				8,741
Amortization expense			5,734				5,644
EBITDA3		$	45,314			$	68,288
EBITDA margin3			8.6	%			13.3	%
		39 Weeks Ended				39 Weeks Ended
		August 30, 2014				August 31, 2013
Net income including non-controlling interests		$	39,359			$	75,183
Income from discontinued operations			—				(1,211	)
Income from equity method investments			(5,205	)			(6,020	)
Income taxes			23,414				28,274
Interest expense			14,178				14,790
Other income (expense), net			1,543				2,482
Special charges			37,615				28,951
Segment operating income2			110,904				142,449
Depreciation expense			30,793				26,822
Amortization expense			17,311				16,746
EBITDA3		$	159,008			$	186,017
EBITDA margin3			10.2	%			12.3	%

 

11

---

H.B. FULLER COMPANY AND SUBSIDIARIES

REGULATION G RECONCILIATION

In thousands (unaudited)

 

		13 Weeks Ended				13 Weeks Ended
		August 30, 2014				August 31, 2013
Net revenue		$	526,765			$	514,579
Cost of sales			(401,611	)			(370,072	)
Gross profit			125,154				144,507
Selling, general and administrative expenses			(96,779	)			(90,604	)
Segment operating income2			28,375				53,903
Depreciation expense			11,205				8,741
Amortization expense			5,734				5,644
EBITDA3		$	45,314			$	68,288
EBITDA margin3			8.6	%			13.3	%
		39 Weeks Ended				39 Weeks Ended
		August 30, 2014				August 31, 2013
Net revenue		$	1,556,780			$	1,513,437
Cost of sales			(1,155,926	)			(1,088,938	)
Gross profit			400,854				424,499
Selling, general and administrative expenses			(289,950	)			(282,050	)
Segment operating income2			110,904				142,449
Depreciation expense			30,793				26,822
Amortization expense			17,311				16,746
EBITDA3		$	159,008			$	186,017
EBITDA margin3			10.2	%			12.3	%

 

12

---

H.B. FULLER COMPANY AND SUBSIDIARIES

REGULATION G RECONCILIATION

In thousands, except per share amounts (unaudited)

 

														Adjusted
						13 Weeks Ended								13 Weeks Ended
						August 30, 2014				Adjustments				August 30, 2014
Net revenue						$	526,765			$	—			$	526,765
Cost of sales							(401,611	)			(5,337	)			(396,274	)
Gross profit							125,154				(5,337	)			130,491
Selling, general and administrative expenses							(96,779	)			(4,543	)			(92,236	)
Acquisition and transformation related costs			(1,864	)
Workforce reduction costs			55
Facility exit costs			(8,802	)
Other related costs			(1,732	)
Special charges, net							(12,343	)			(12,343	)			—
Other income (expense), net							(289	)			—				(289	)
Interest expense							(5,292	)			—				(5,292	)
Income before income taxes and income from equity method investments							10,451				(22,223	)			32,674
Income taxes							(8,035	)			4,531				(12,566	)
Income from equity method investments							1,668				—				1,668
Net income including non-controlling interests							4,084				(17,692	)			21,776
Net income attributable to non-controlling interests							(97	)			—				(97	)
Net income attributable to H.B. Fuller						$	3,987			$	(17,692	)		$	21,679
Basic income (loss) per common share attributable to H.B. Fuller						$	0.08			$	(0.35	)		$	0.43
Diluted income (loss) per common share attributable to H.B. Fuller						$	0.08			$	(0.34	)		$	0.42	1
Weighted-average common shares outstanding:
Basic							50,053				50,053				50,053
Diluted							51,297				51,297				51,297

 

13

---

H.B. FULLER COMPANY AND SUBSIDIARIES

REGULATION G RECONCILIATION

In thousands, except per share amounts (unaudited)

 

														Adjusted
						13 Weeks Ended								13 Weeks Ended
						August 31, 2013				Adjustments				August 31, 2013
Net revenue						$	514,579			$	—			$	514,579
Cost of sales							(370,072	)			(1,098	)			(368,974	)
Gross profit							144,507				(1,098	)			145,605
Selling, general and administrative expenses							(90,604	)							(90,604	)
Acquisition and transformation related costs			(1,641	)
Workforce reduction costs			(3,212	)
Facility exit costs			(5,118	)
Other related costs			(2,804	)
Special charges, net							(12,775	)			(12,775	)			—
Other income (expense), net							(1,046	)			—				(1,046	)
Interest expense							(4,579	)			—				(4,579	)
Income from continuing operations before income taxes and income from equity method investments							35,503				(13,873	)			49,376
Income taxes							(10,290	)			3,262				(13,552	)
Income from equity method investments							1,937				—				1,937
Net income from continuing operations							27,150				(10,611	)			37,761
Income from discontinued operations							1,211				1,211				—
Net income including non-controlling interests							28,361				(9,400	)			37,761
Net income attributable to non-controlling interests							(92	)			—				(92	)
Net income attributable to H.B. Fuller						$	28,269			$	(9,400	)		$	37,669
Basic income per common share attributable to H.B. Fullera
Income from continuing operations							0.54				(0.21	)			0.75
Income from discontinued operations							0.02				0.02				—
						$	0.57			$	(0.19	)		$	0.75
Diluted income per common share attributable to H.B. Fullera
Income from continuing operations							0.53				(0.21	)			0.74	1
Income from discontinued operations							0.02				0.02				—
						$	0.55			$	(0.18	)		$	0.74
Weighted-average common shares outstanding:
Basic							49,913				49,913				49,913
Diluted							51,127				51,127				51,127

 

a	Income per share amounts may not add due to rounding

 

14

---

H.B. FULLER COMPANY AND SUBSIDIARIES

REGULATION G RECONCILIATION

In thousands, except per share amounts (unaudited)

 

														Adjusted
						39 Weeks Ended								39 Weeks Ended
						August 30, 2014				Adjustments				August 30, 2014
Net revenue						$	1,556,780			$	—			$	1,556,780
Cost of sales							(1,155,926	)			(12,022	)			(1,143,904	)
Gross profit							400,854				(12,022	)			412,876
Selling, general and administrative expenses							(289,950	)			(10,502	)			(279,448	)
Acquisition and transformation related costs			(6,150	)
Workforce reduction costs			(2,903	)
Facility exit costs			(21,254	)
Other related costs			(7,308	)
Special charges							(37,615	)			(37,615	)			—
Other income (expense), net							(1,543	)			—				(1,543	)
Interest expense							(14,178	)			—				(14,178	)
Income before income taxes and income from equity method investments							57,568				(60,139	)			117,707
Income taxes							(23,414	)			12,411				(35,825	)
Income from equity method investments							5,205				—				5,205
Net income including non-controlling interests							39,359				(47,728	)			87,087
Net income attributable to non-controlling interests							(264	)			—				(264	)
Net income attributable to H.B. Fuller						$	39,095			$	(47,728	)		$	86,823
Basic income per common share attributable to H.B. Fuller						$	0.78			$	(0.96	)		$	1.74
Diluted income per common share attributable to H.B. Fuller						$	0.76			$	(0.93	)		$	1.69	1
Weighted-average common shares outstanding:
Basic							49,973				49,973				49,973
Diluted							51,242				51,242				51,242

 

15

---

H.B. FULLER COMPANY AND SUBSIDIARIES

REGULATION G RECONCILIATION

In thousands, except per share amounts (unaudited)

 

														Adjusted
						39 Weeks Ended								39 Weeks Ended
						August 31, 2013				Adjustments				August 31, 2013
Net revenue						$	1,513,437			$	—			$	1,513,437
Cost of sales							(1,088,938	)			(1,098	)			(1,087,840	)
Gross profit							424,499				(1,098	)			425,597
Selling, general and administrative expenses							(282,050	)							(282,050	)
Acquisition and transformation related costs			(5,807	)
Workforce reduction costs			(7,393	)
Facility exit costs			(10,174	)
Other related costs			(5,577	)
Special charges							(28,951	)			(28,951	)			—
Other income (expense), net							(2,482	)							(2,482	)
Interest expense							(14,790	)							(14,790	)
Income from continuing operations before income taxes and income from equity method investments							96,226				(30,049	)			126,275
Income taxes							(28,274	)			6,829				(35,103	)
Income from equity method investments							6,020				—				6,020
Income from continuing operations							73,972				(23,220	)			97,192
Income from discontinued operations							1,211				1,211				—
Net income including non-controlling interests							75,183				(22,009	)			97,192
Net income attributable to non-controlling interests							(308	)			—				(308	)
Net income attributable to H.B. Fuller						$	74,875			$	(22,009	)		$	96,884
Basic income per common share attributable to H.B. Fullera
Income from continuing operations							1.48				(0.47	)			1.94
Income from discontinued operations							0.02				0.02				—
						$	1.50			$	(0.44	)		$	1.94
Diluted income per common share attributable to H.B. Fullera
Income from continuing operations							1.44				(0.45	)			1.90	1
Income from discontinued operations							0.02				0.02				—
						$	1.47			$	(0.43	)		$	1.90
Weighted-average common shares outstanding:
Basic							49,888				49,888				49,888
Diluted							51,102				51,102				51,102

 

a	Income per share amounts may not add due to rounding

 

16

---

H.B. FULLER COMPANY AND SUBSIDIARIES

ADJUSTED EARNING PER SHARE RECONCILIATION

In thousands (unaudited)

 

		13 weeks ended August 30, 2014												13 weeks ended August 31, 2013
		Income												Income
		before				Income				Diluted				before				Income				Diluted
		Income Tax				Taxes				EPSa				Income Tax				Taxes				EPS
GAAP Earnings		$	12,022			$	8,035			$	0.08			$	37,348			$	10,290			$	0.53
Special charges, net			12,343				1,406				0.21				12,775				3,031				0.19
Other business integration costs			1,896				144				0.03				—				—				—
Project ONE			7,692				2,931				0.09				—				—				—
Acquisition project costs			292				50				—				—				—				—
Other			—				—				—				1,098				231				0.02
Adjusted Earnings		$	34,245			$	12,566			$	0.42			$	51,221			$	13,552			$	0.74
		39 weeks ended August 30, 2014												39 weeks ended August 31, 2013
		Income												Income
		before				Income				Diluted				before				Income				Diluted
		Income Tax				Taxes				EPS				Income Tax				Taxes				EPS
GAAP Earnings		$	62,509			$	23,414			$	0.76			$	101,938			$	28,274			$	1.44
Special charges, net			37,615				5,303				0.63				28,951				6,598				0.44
Other business integration costs			5,392				867				0.09				—				—				—
Project ONE			15,799				6,020				0.19				—				—				—
Acquisition project costs			1,333				221				0.02				—				—				—
Other			—				—				—				1,098				231				0.02
Adjusted Earnings		$	122,648			$	35,825			$	1.69			$	131,987			$	35,103			$	1.90

 

a	Income per share amounts may not add due to rounding

 

17

---

 

1

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

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

3

EBITDA is a non-GAAP financial measure defined on a consolidated basis as gross profit, less SG&A expense, plus depreciation expense, plus amortization expense. On a segment basis it is defined as operating income, plus depreciation expense, plus amortization expense. EBITDA margin is defined as EBITDA divided by net revenue.

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

 

18