H.B. FULLER COMPANY ST. PAUL, Minn., Sept. 24, 2014 /PRNewswire/ -- H.B. Fuller Company (NYSE: FUL) today reported financial results for the third quarter that ended August 30, 2014.
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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 $0.42(1), down versus the prior year's adjusted result of $0.74(1).
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 $1.69(1), down from the prior year's result of $1.90(1).
Net revenue for the first nine months of 2014 was $1,556.8 million, up 2.9 percent versus the first nine months of 2013. Higher volume and foreign currency translation positively impacted net revenue growth by 3.2 and 0.3 percentage points, respectively. Lower average selling prices negatively impacted net revenue growth by 0.6 percentage points. Organic revenue grew by 2.6 percent year-over-year.
Gross profit margin for the first nine months was down relative to last year due primarily to excess costs related to ongoing project work related to the European business integration and Project ONE. SG&A expense was down 1 percent versus the prior year reflecting tight control of discretionary expenses, excluding certain non-recurring costs(1).
Project ONE and Business Integration:
Project ONE is a multi-year project to install SAP application software as our global information technology platform in four phases over several years. The initial "go live" occurred in the North America region of our Americas operating segment in April of this year. The effort required to adopt the new system and return to normal productivity levels has been longer and more costly than we had anticipated. Currently the SAP system in North America is stable and fully supporting our business, though productivity is still below expectations. To address this situation we have taken several significant steps to restructure and refocus our efforts to accelerate the productivity improvement in the North America region. In addition, we have modified our phased implementation schedule, delaying the "go live" in Latin America to mid-2015 and postponing the implementation in Europe to sometime after 2015. These changes should accelerate the productivity improvements in North America and reduce the risk of business interruption in future go-live events.
In Europe the business integration project is nearing completion. We have experienced considerable delays in the final stages of this project and the costs associated with finalizing facility closures and bringing new assets up to full capacity continue to hinder the profitability of the EIMEA segment. To address these issues we have restructured and refocused our project management teams in Europe to accelerate the completion of all project work and rapidly move to continuous improvement mode. Completion of this project, expected by the first quarter of the 2015 fiscal year, will enable significant margin improvement and enhance our ability to drive organic growth.
Fiscal 2014 Outlook:
We are establishing fourth quarter 2014 adjusted diluted EPS guidance at a range of between $0.60 and $0.70. Our forward projection of our core tax rate remains at 29 percent; however, due to the shift in geographic mix of our profitability, we expect our core tax rate in fourth quarter of this year to be about 32 percent. Lastly, we have revised our full year capital expenditure forecast to $135 million.
Conference Call:
The Company will host an investor conference call to discuss third quarter 2014 results on Thursday, September 25, 2014, at 9:30 a.m. Central U.S. time (10:30 a.m. Eastern U.S. time). The conference call audio and accompanying presentation slides will be available to all interested parties via a simultaneous webcast at www.hbfuller.com under the Investor Relations section. The event is scheduled to last one hour. For those unable to listen live, an audio replay of the event along with the accompanying presentation will be archived on the Company's website.
Regulation G:
The information presented in this earnings release regarding segment operating income, adjusted diluted earnings per share and earnings before interest, taxes, depreciation, and amortization (EBITDA) does not conform to generally accepted accounting principles (GAAP) and should not be construed as an alternative to the reported results determined in accordance with GAAP. Management has included this non-GAAP information to assist in understanding the operating performance of the Company and its operating segments as well as the comparability of results. The non-GAAP information provided may not be consistent with the methodologies used by other companies. All non-GAAP information is reconciled with reported GAAP results in the tables below.
About H.B. Fuller Company:
For over 125 years, H.B. Fuller has been a leading global adhesives provider focusing on perfecting adhesives, sealants and other specialty chemical products to improve products and lives. With fiscal 2013 net revenue of $2.05 billion, H.B. Fuller's commitment to innovation brings together people, products and processes that answer and solve some of the world's biggest challenges. Our reliable, responsive service creates lasting, rewarding connections with customers in packaging, hygiene, general assembly, electronic and assembly materials, paper converting, woodworking, construction, automotive and consumer businesses. And our promise to our people connects them with opportunities to innovate and thrive. For more information, visit us at www.hbfuller.com and subscribe to our blog.
Safe Harbor for Forward-Looking Statements:
Certain statements in this document may be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are subject to various risks and uncertainties, including but not limited to the following: the Company's ability to effectively integrate and operate acquired businesses; the ability to effectively implement Project ONE; political and economic conditions; product demand; competitive products and pricing; costs of and savings from restructuring initiatives; geographic and product mix; availability and price of raw materials; the Company's relationships with its major customers and suppliers; changes in tax laws and tariffs; devaluations and other foreign exchange rate fluctuations; the impact of litigation and environmental matters; the effect of new accounting pronouncements and accounting charges and credits; and similar matters. Further information about the various risks and uncertainties can be found in the Company's SEC 10-K filing for the fiscal year ended November 30, 2013. All forward-looking information represents management's best judgment as of this date based on information currently available that in the future may prove to have been inaccurate. Additionally, the variety of products sold by the Company and the regions where the Company does business make it difficult to determine with certainty the increases or decreases in net revenue resulting from changes in the volume of products sold, currency impact, changes in product mix, and selling prices. However, management's best estimates of these changes as well as changes in other factors have been included.
Maximillian Marcy
Investor Relations Contact
651-236-5062
H.B. FULLER COMPANY AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
In thousands, except per share amounts (unaudited)
13 Weeks Ended Percent of 13 Weeks Ended Percent of
August 30, 2014 Net Revenue August 31, 2013 Net Revenue
--------------- ----------- --------------- -----------
Net revenue $526,765 100.0% $514,579 100.0%
Cost of sales (401,611) (76.2%) (370,072) (71.9%)
-------- ------ -------- ------
Gross profit 125,154 23.8% 144,507 28.1%
Selling, general and
administrative expenses (96,779) (18.4%) (90,604) (17.6%)
Special charges, net (12,343) (2.3%) (12,775) (2.5%)
Other income (expense), net (289) (0.1%) (1,046) (0.2%)
Interest expense (5,292) (1.0%) (4,579) (0.9%)
------ ----- ------ -----
Income from continuing operations
before income taxes and income
from equity method investments 10,451 2.0% 35,503 6.9%
Income taxes (8,035) (1.5%) (10,290) (2.0%)
Income from equity method
investments 1,668 0.3% 1,937 0.4%
----- --- ----- ---
Income from continuing operations 4,084 0.8% 27,150 5.3%
Income from discontinued
operations, net of tax - 0.0% 1,211 0.2%
--- --- ----- ---
Net income including non-
controlling interests 4,084 0.8% 28,361 5.5%
Net income attributable to non-
controlling interests (97) (0.0%) (92) (0.0%)
--- ----- --- -----
Net income
attributable to H.B.
Fuller $3,987 0.8% $28,269 5.5%
====== === ======= ===
Basic income per common share
attributable to H.B. Fullera
Income from continuing operations 0.08 0.54
Income from discontinued
operations - 0.02
--- ----
$0.08 $0.57
===== =====
Diluted income per common share
attributable to H.B. Fuller
Income from continuing operations 0.08 0.53
Income from discontinued
operations - 0.02
--- ----
$0.08 $0.55
===== =====
Weighted-average common shares
outstanding:
Basic 50,053 49,913
Diluted 51,297 51,127
Dividends declared
per common share $0.120 $0.100
a Income per share amounts may not add due to rounding
Selected Balance Sheet Information (subject to change prior to filing of the Company's Quarterly Report on Form 10-Q)
--------------------------------------------------------------------------------------------------------------------
August 30, 2014 November 30, 2013 August 31, 2013
--------------- ----------------- ---------------
Cash & cash
equivalents $75,544 $155,121 $160,259
Trade accounts
receivable, net 345,104 331,125 318,611
Inventories 281,265 221,537 221,256
Trade payables 212,491 201,575 169,267
Total assets 1,937,518 1,873,028 1,800,483
Total debt 562,901 492,904 493,454
H.B. FULLER COMPANY AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
In thousands, except per share amounts (unaudited)
39 Weeks Ended Percent of 39 Weeks Ended Percent of
August 30, 2014 Net Revenue August 31, 2013 Net Revenue
--------------- ----------- --------------- -----------
Net revenue $1,556,780 100.0% $1,513,437 100.0%
Cost of sales (1,155,926) (74.3%) (1,088,938) (72.0%)
---------- ------ ---------- ------
Gross profit 400,854 25.7% 424,499 28.0%
Selling, general and
administrative expenses (289,950) (18.6%) (282,050) (18.6%)
Special charges (37,615) (2.4%) (28,951) (1.9%)
Other income (expense), net (1,543) (0.1%) (2,482) (0.2%)
Interest expense (14,178) (0.9%) (14,790) (1.0%)
------- ----- ------- -----
Income from continuing
operations before income taxes
and income from equity method
investments 57,568 3.7% 96,226 6.4%
Income taxes (23,414) (1.5%) (28,274) (1.9%)
Income from equity method
investments 5,205 0.3% 6,020 0.4%
----- --- ----- ---
Income from continuing
operations 39,359 2.5% 73,972 4.9%
Income from discontinued
operations - 0.0% 1,211 0.1%
--- --- ----- ---
Net income including non-
controlling interests 39,359 2.5% 75,183 5.0%
Net income attributable to non-
controlling interests (264) (0.0%) (308) (0.0%)
---- ----- ---- -----
Net income
attributable to
H.B. Fuller $39,095 2.5% $74,875 4.9%
======= === ======= ===
Basic income per common share
attributable to H.B. Fuller
Income from continuing
operations 0.78 1.48
Income from discontinued
operations - 0.02
--- ----
$0.78 $1.50
===== =====
Diluted income per common share
attributable to H.B. Fullera
Income from continuing
operations 0.76 1.44
Income from discontinued
operations - 0.02
--- ----
$0.76 $1.47
===== =====
Weighted-average common shares
outstanding:
Basic 49,973 49,888
Diluted 51,242 51,102
Dividends declared
per common share $0.340 $0.285
a Income per share amounts may not add due to rounding
H.B. FULLER COMPANY AND SUBSIDIARIES
SEGMENT FINANCIAL INFORMATION
In thousands (unaudited)
13 Weeks Ended 13 Weeks Ended
August 30, 2014 August 31, 2013
--------------- ---------------
Net Revenue:
Americas Adhesives $237,657 $233,515
EIMEA 177,478 180,753
Asia Pacific 63,847 59,454
Construction Products 47,783 40,857
------ ------
Total H.B. Fuller $526,765 $514,579
======== ========
Segment Operating Income:(2)
Americas Adhesives $21,854 $34,871
EIMEA 3,139 14,199
Asia Pacific 897 1,564
Construction Products 2,485 3,269
----- -----
Total H.B. Fuller $28,375 $53,903
======= =======
Depreciation Expense:
Americas Adhesives $4,353 $3,710
EIMEA 4,594 3,094
Asia Pacific 1,340 1,121
Construction Products 918 816
--- ---
Total H.B. Fuller $11,205 $8,741
======= ======
Amortization Expense:
Americas Adhesives $1,394 $1,387
EIMEA 1,924 1,843
Asia Pacific 462 481
Construction Products 1,954 1,933
----- -----
Total H.B. Fuller $5,734 $5,644
====== ======
EBITDA:(3)
Americas Adhesives $27,601 $39,968
EIMEA 9,657 19,136
Asia Pacific 2,698 3,166
Construction Products 5,358 6,018
----- -----
Total H.B. Fuller $45,314 $68,288
======= =======
Segment Operating Margin:4
Americas Adhesives 9.2% 14.9%
EIMEA 1.8% 7.9%
Asia Pacific 1.4% 2.6%
Construction Products 5.2% 8.0%
--- ---
Total H.B. Fuller 5.4% 10.5%
=== ====
EBITDA Margin:(3)
Americas Adhesives 11.6% 17.1%
EIMEA 5.4% 10.6%
Asia Pacific 4.2% 5.3%
Construction Products 11.2% 14.7%
---- ----
Total H.B. Fuller 8.6% 13.3%
=== ====
Net Revenue Growth:
Americas Adhesives 1.8%
EIMEA (1.8%)
Asia Pacific 7.4%
Construction Products 17.0%
----
Total H.B. Fuller 2.4%
===
H.B. FULLER COMPANY AND SUBSIDIARIES
SEGMENT FINANCIAL INFORMATION
In thousands (unaudited)
39 Weeks Ended 39 Weeks Ended
August 30, 2014 August 31, 2013
--------------- ---------------
Net Revenue:
Americas Adhesives $684,308 $670,019
EIMEA 538,693 543,448
Asia Pacific 196,842 182,148
Construction Products 136,937 117,822
------- -------
Total H.B. Fuller $1,556,780 $1,513,437
========== ==========
Segment Operating Income:(2)
Americas Adhesives $78,949 $92,621
EIMEA 21,735 34,817
Asia Pacific 4,443 6,331
Construction Products 5,777 8,680
----- -----
Total H.B. Fuller $110,904 $142,449
======== ========
Depreciation Expense:
Americas Adhesives $12,284 $11,214
EIMEA 11,895 9,745
Asia Pacific 3,930 3,419
Construction Products 2,684 2,444
----- -----
Total H.B. Fuller $30,793 $26,822
======= =======
Amortization Expense:
Americas Adhesives $4,182 $3,926
EIMEA 5,815 5,589
Asia Pacific 1,453 1,441
Construction Products 5,861 5,790
----- -----
Total H.B. Fuller $17,311 $16,746
======= =======
EBITDA:(3)
Americas Adhesives $95,415 $107,761
EIMEA 39,445 50,151
Asia Pacific 9,826 11,191
Construction Products 14,322 16,914
------ ------
Total H.B. Fuller $159,008 $186,017
======== ========
Segment Operating Margin:4
Americas Adhesives 11.5% 13.8%
EIMEA 4.0% 6.4%
Asia Pacific 2.3% 3.5%
Construction Products 4.2% 7.4%
--- ---
Total H.B. Fuller 7.1% 9.4%
=== ===
EBITDA Margin:(3)
Americas Adhesives 13.9% 16.1%
EIMEA 7.3% 9.2%
Asia Pacific 5.0% 6.1%
Construction Products 10.5% 14.4%
---- ----
Total H.B. Fuller 10.2% 12.3%
==== ====
Net Revenue Growth:
Americas Adhesives 2.1%
EIMEA (0.9%)
Asia Pacific 8.1%
Construction Products 16.2%
----
Total H.B. Fuller 2.9%
===
H.B. FULLER COMPANY AND SUBSIDIARIES
SEGMENT FINANCIAL INFORMATION
NET REVENUE GROWTH
(unaudited)
13 Weeks Ended August 30, 2014
------------------------------
Americas EIMEA Asia Construction Total HBF
Adhesives Pacific Products
--------- ------- --------
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 EIMEA Asia Construction Total HBF
Adhesives Pacific Products
--------- ------- --------
Price (1.3%) 0.5% (0.1%) (3.0%) (0.6%)
Volume 3.8% (3.5%) 10.7% 19.2% 3.2%
--- ----- ---- ---- ---
Organic Growth 2.5% (3.0%) 10.6% 16.2% 2.6%
F/X (0.4%) 2.1% (2.5%) 0.0% 0.3%
2.1% (0.9%) 8.1% 16.2% 2.9%
=== ===== === ==== ===
H.B. FULLER COMPANY AND SUBSIDIARIES
REGULATION G RECONCILIATION
In thousands (unaudited)
13 Weeks Ended 13 Weeks Ended
August 30, 2014 August 31, 2013
--------------- ---------------
Net income including non-controlling interests $4,084 $28,361
Income from discontinued operations - (1,211)
Income from equity method investments (1,668) (1,937)
Income taxes 8,035 10,290
Interest expense 5,292 4,579
Other income (expense), net 289 1,046
Special charges 12,343 12,775
Segment operating income(2) 28,375 53,903
Depreciation expense 11,205 8,741
Amortization expense 5,734 5,644
----- -----
EBITDA(3) $45,314 $68,288
EBITDA margin(3) 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 income(2) 110,904 142,449
Depreciation expense 30,793 26,822
Amortization expense 17,311 16,746
------ ------
EBITDA(3) $159,008 $186,017
EBITDA margin(3) 10.2% 12.3%
H.B. FULLER COMPANY AND SUBSIDIARIES
REGULATION G RECONCILIATION
In thousands (unaudited)
13 Weeks Ended 13 Weeks Ended
August 30, 2014 August 31, 2013
--------------- ---------------
Net revenue $526,765 $514,579
Cost of sales (401,611) (370,072)
-------- --------
Gross profit 125,154 144,507
Selling, general and administrative expenses (96,779) (90,604)
------- -------
Segment operating income(2) 28,375 53,903
Depreciation expense 11,205 8,741
Amortization expense 5,734 5,644
----- -----
EBITDA(3) $45,314 $68,288
EBITDA margin(3) 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 income(2) 110,904 142,449
Depreciation expense 30,793 26,822
Amortization expense 17,311 16,746
------ ------
EBITDA(3) $159,008 $186,017
EBITDA margin(3) 10.2% 12.3%
H.B. FULLER COMPANY AND SUBSIDIARIES
REGULATION G RECONCILIATION
In thousands, except per share amounts (unaudited)
Adjusted
13 Weeks Ended 13 Weeks Ended
August 30, 2014 Adjustments August 30, 2014
--------------- ----------- ---------------
Net revenue $526,765 $ - $526,765
Cost of sales (401,611) (5,337) (396,274)
-------- ------ --------
Gross profit 125,154 (5,337) 130,491
Selling, general and administrative expenses (96,779) (4,543) (92,236)
Acquisition and transformation related costs (1,864)
Workforce reduction costs 55
Facility exit costs (8,802)
Other related costs (1,732)
------
Special charges, net (12,343) (12,343) -
Other income (expense), net (289) - (289)
Interest expense (5,292) - (5,292)
------ --- ------
Income before income taxes and income from equity method
investments 10,451 (22,223) 32,674
Income taxes (8,035) 4,531 (12,566)
Income from equity method investments 1,668 - 1,668
----- --- -----
Net income including non-controlling interests 4,084 (17,692) 21,776
Net income attributable to non-controlling interests (97) - (97)
--- --- ---
Net income attributable to H.B. Fuller $3,987 $(17,692) $21,679
====== ======== =======
Basic income (loss) per common share attributable to H.B.
Fuller $0.08 $(0.35) $0.43
===== ====== =====
Diluted income (loss) per common share attributable to
H.B. Fuller $0.08 $(0.34) $0.42 (1)
===== ====== ========
Weighted-average common shares outstanding:
Basic 50,053 50,053 50,053
Diluted 51,297 51,297 51,297
H.B. FULLER COMPANY AND SUBSIDIARIES
REGULATION G RECONCILIATION
In thousands, except per share amounts (unaudited)
Adjusted
13 Weeks Ended 13 Weeks Ended
August 31, 2013 Adjustments August 31, 2013
--------------- ----------- ---------------
Net revenue $514,579 $ - $514,579
Cost of sales (370,072) (1,098) (368,974)
-------- ------ --------
Gross profit 144,507 (1,098) 145,605
Selling, general and administrative expenses (90,604) (90,604)
Acquisition and transformation related costs (1,641)
Workforce reduction costs (3,212)
Facility exit costs (5,118)
Other related costs (2,804)
------
Special charges, net (12,775) (12,775) -
Other income (expense), net (1,046) - (1,046)
Interest expense (4,579) - (4,579)
------ --- ------
Income from continuing operations before income taxes and income from
equity method investments 35,503 (13,873) 49,376
Income taxes (10,290) 3,262 (13,552)
Income from equity method investments 1,937 - 1,937
----- --- -----
Net income from continuing operations 27,150 (10,611) 37,761
Income from discontinued operations 1,211 1,211 -
----- ----- ---
Net income including non-controlling interests 28,361 (9,400) 37,761
Net income attributable to non-controlling interests (92) - (92)
--- --- ---
Net income attributable to H.B. Fuller $28,269 $(9,400) $37,669
======= ======= =======
Basic income per common share attributable to H.B. Fullera
Income from continuing operations 0.54 (0.21) 0.75
Income from discontinued operations 0.02 0.02 -
---- ---- ---
$0.57 $(0.19) $0.75
===== ====== =====
Diluted income per common share attributable to H.B. Fullera
Income from continuing operations 0.53 (0.21) 0.74 (1)
Income from discontinued operations 0.02 0.02 -
---- ---- ---
$0.55 $(0.18) $0.74
===== ====== =====
Weighted-average common shares outstanding:
Basic 49,913 49,913 49,913
Diluted 51,127 51,127 51,127
a Income per share amounts may not add due to rounding
H.B. FULLER COMPANY AND SUBSIDIARIES
REGULATION G RECONCILIATION
In thousands, except per share amounts (unaudited)
Adjusted
39 Weeks Ended 39 Weeks Ended
August 30, 2014 Adjustments August 30, 2014
--------------- ----------- ---------------
Net revenue $1,556,780 $ - $1,556,780
Cost of sales (1,155,926) (12,022) (1,143,904)
---------- ------- ----------
Gross profit 400,854 (12,022) 412,876
Selling, general and administrative expenses (289,950) (10,502) (279,448)
Acquisition and transformation related costs (6,150)
Workforce reduction costs (2,903)
Facility exit costs (21,254)
Other related costs (7,308)
------
Special charges (37,615) (37,615) -
Other income (expense), net (1,543) - (1,543)
Interest expense (14,178) - (14,178)
------- --- -------
Income before income taxes and income from equity method investments 57,568 (60,139) 117,707
Income taxes (23,414) 12,411 (35,825)
Income from equity method investments 5,205 - 5,205
----- --- -----
Net income including non-controlling interests 39,359 (47,728) 87,087
Net income attributable to non-controlling interests (264) - (264)
---- --- ----
Net income attributable to H.B. Fuller $39,095 $(47,728) $86,823
======= ======== =======
Basic income per common share attributable to H.B. Fuller $0.78 $(0.96) $1.74
===== ====== =====
Diluted income per common share attributable to H.B. Fuller $0.76 $(0.93) $1.69 (1)
===== ====== ========
Weighted-average common shares outstanding:
Basic 49,973 49,973 49,973
Diluted 51,242 51,242 51,242
H.B. FULLER COMPANY AND SUBSIDIARIES
REGULATION G RECONCILIATION
In thousands, except per share amounts (unaudited)
Adjusted
39 Weeks Ended 39 Weeks Ended
August 31, 2013 Adjustments August 31, 2013
--------------- ----------- ---------------
Net revenue $1,513,437 $ - $1,513,437
Cost of sales (1,088,938) (1,098) (1,087,840)
---------- ------ ----------
Gross profit 424,499 (1,098) 425,597
Selling, general and administrative expenses (282,050) (282,050)
Acquisition and transformation related costs (5,807)
Workforce reduction costs (7,393)
Facility exit costs (10,174)
Other related costs (5,577)
------
Special charges (28,951) (28,951) -
Other income (expense), net (2,482) (2,482)
Interest expense (14,790) (14,790)
------- -------
Income from continuing operations before income taxes and income from equity method
investments 96,226 (30,049) 126,275
Income taxes (28,274) 6,829 (35,103)
Income from equity method investments 6,020 - 6,020
----- --- -----
Income from continuing operations 73,972 (23,220) 97,192
Income from discontinued operations 1,211 1,211 -
Net income including non-controlling interests 75,183 (22,009) 97,192
Net income attributable to non-controlling interests (308) - (308)
---- --- ----
Net income attributable to H.B. Fuller $74,875 $(22,009) $96,884
======= ======== =======
Basic income per common share attributable to H.B. Fullera
Income from continuing operations 1.48 (0.47) 1.94
Income from discontinued operations 0.02 0.02 -
---- ---- ---
$1.50 $(0.44) $1.94
===== ====== =====
Diluted income per common share attributable to H.B. Fullera
Income from continuing operations 1.44 (0.45) 1.90 1
Income from discontinued operations 0.02 0.02 -
---- ---- ---
$1.47 $(0.43) $1.90
===== ====== =====
Weighted-average common shares outstanding:
Basic 49,888 49,888 49,888
Diluted 51,102 51,102 51,102
a Income per share amounts may not add due to rounding
H.B. FULLER COMPANY AND SUBSIDIARIES
ADJUSTED EARNING PER SHARE RECONCILIATION
In thousands (unaudited)
13 weeks ended August 30, 2014 13 weeks ended August 31, 2013
Income Income
before Income Diluted before Income Diluted
Income Tax Taxes EPSa Income Tax Taxes EPS
---------- ----- ---- ---------- ----- ---
GAAP Earnings $12,022 $8,035 $0.08 $37,348 $10,290 $0.53
Special charges, net 12,343 1,406 0.21 12,775 3,031 0.19
Other business integration
costs 1,896 144 0.03 - - -
Project ONE 7,692 2,931 0.09 - - -
Acquisition project costs 292 50 - - - -
Other - - - 1,098 231 0.02
--- --- --- ----- --- ----
Adjusted Earnings $34,245 $12,566 $0.42 $51,221 $13,552 $0.74
======= ======= ===== ======= ======= =====
39 weeks ended August 30, 2014 39 weeks ended August 31, 2013
Income Income
before Income Diluted before Income Diluted
Income Tax Taxes EPS Income Tax Taxes EPS
---------- ----- --- ---------- ----- ---
GAAP Earnings $62,509 $23,414 $0.76 $101,938 $28,274 $1.44
Special charges, net 37,615 5,303 0.63 28,951 6,598 0.44
Other business integration
costs 5,392 867 0.09 - - -
Project ONE 15,799 6,020 0.19 - - -
Acquisition project costs 1,333 221 0.02 - - -
Other - - - 1,098 231 0.02
--- --- --- ----- --- ----
Adjusted Earnings $122,648 $35,825 $1.69 $131,987 $35,103 $1.90
======== ======= ===== ======== ======= =====
a Income per share amounts may not add due to rounding
(1) Adjusted diluted
earnings per
share (EPS) is
a non-GAAP
financial
measure and
excludes items
listed on the
adjusted
earnings per
share
reconciliation
table above
which excludes:
special charges
associated with
two previously
announced
events: the
EIMEA business
transformation
project and the
expenses
associated with
the Forbo
acquisition
integration
project, which
have been
combined and
are now
referred to as
the "business
integration";
additional
costs
associated with
the Company's
ongoing Project
ONE
implementation;
and acquisition
project costs.
(2) Segment
operating
income is
defined as
gross profit
less SG&A
expense. Items
that are
reported on the
special charges
line of the
income
statement are
excluded from
the segment
operating
income
calculation.
(3) EBITDA is a non-
GAAP financial
measure defined
on a
consolidated
basis as gross
profit, less
SG&A expense,
plus
depreciation
expense, plus
amortization
expense. On a
segment basis
it is defined
as operating
income, plus
depreciation
expense, plus
amortization
expense. EBITDA
margin is
defined as
EBITDA divided
by net revenue.
4 Segment
operating
margin is a
non-GAAP
financial
measure defined
as gross
profit, less
SG&A expense,
divided by net
revenue.
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SOURCE H.B. Fuller Company
