Upcoming AWS Coverage on Sherwin-Williams Post-Earnings Results

LONDON, UK / ACCESSWIRE / January 24, 2017 / Active Wall St. announces its post-earnings coverage on H.B. Fuller Co. (NYSE: FUL). The Company disclosed its fourth quarter and fiscal 2016 results on January 18, 2017. The adhesives Company's revenue numbers outperformed market estimates. H.B Fuller stated that FY16 had 53 weeks of activity while FY15 and FY17 are each the normal 52 weeks in length. Register with us now for your free membership at:

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One of H.B. Fuller's competitors within the Specialty Chemicals space, The Sherwin-Williams Co. (NYSE: SHW), announced on January 05, 2017, that it will release its financial results for Q4 and year ended December 31, 2016 prior to the opening of the market on Thursday, January 26, 2017. AWS will be initiating a research report on Sherwin-Williams in the coming days.

Today, AWS is promoting its earnings coverage on FUL; touching on SHW. Get our free coverage by signing up to:

http://www.activewallst.com/registration-3/?symbol=FUL

http://www.activewallst.com/registration-3/?symbol=SHW

Earnings Reviewed

For the three months ended on December 03, 2016, H.B. Fuller reported net revenue of $574.9 million, up 4.9% versus Q4 2015. The Company stated that higher volume/mix and an extra week positively impacted net revenue growth by 7.8%, but was offset by lower average selling prices and negative foreign currency translation by 2.4% and 0.5%, respectively. The Company's revenue numbers outperformed analyst estimates of $565 million. For FY16, H.B. Fuller generated net revenue of $2.09 billion, up 0.5% versus FY15.

During Q4 2016, H.B. Fuller's margins improved through effective management of pricing and raw material costs and discretionary expenses. The Company's gross profit margin was 29.2%, while adjusted gross profit margin was 29.3%, an increase of 60 basis points sequentially and versus the prior year.

H.B. Fuller's net income for Q4 2016 was $39.1 million, or $0.76 per diluted share, versus net income of $25.0 million, or $0.49 per diluted share, in Q4 2015. Adjusted diluted earnings per share in the reported quarter were $0.74, up 7% versus the prior year's adjusted result of $0.691. The results fell short of Wall Street's expectations for earnings of $0.75 per share. The Company's net income for FY16 was $124.1 million, or $2.42 per diluted share, versus income from continuing operations of $88.4 million, or $1.71 per diluted share, in FY15. Adjusted diluted earnings per share in FY16 were $2.481, up 14% versus the prior year's result of $2.171.

Segment Results

During Q4 2016, H.B. Fuller's Americas segment, excluding the extra week and the impact of mix, volume grew by about 2%. For the EIMEA segment, the company delivered volume growth of 6%. When adjusting for the extra week and the negative mix impact, volume was up about 1%. From a profitability perspective, the segment's adjusted EBITDA margin had improved by 330 basis points versus Q4 2015, up to 14%.

In the Asia/Pacific segment volume grew by 16% in Q4 2016, or just over 8% on a comparable 13-week basis, with strong growth coming from China. Volume growth for the FY16 was about 9% on a comparable 52-week basis. The adjusted EBITDA margin in this segment was up over 200 basis points in Q4 2016 versus the prior year, reflecting volume leverage and raw material cost savings.

In engineering adhesives, volume was up nearly 15% versus Q4 2015 on a comparable 13-week basis, led by good growth in Tonsan and our automotive business. The Company's engineering adhesives adjusted EBITDA margin in Q4 2016 was 14.1%, up 70 basis points versus Q4 2015.

Outlook

Based on current foreign exchange rates, H.B. Fuller is forecasting Forex to negatively impact FY17 revenue growth by about 300 basis points. The Company stated that the current quarter included an extra week; this will reduce net revenue growth by about 2% for FY17 and reduce Q4 2017 net revenue growth by about 7% to 8% compared to 2016. H.B. Fuller is forecasting FY017 EBITDA margin to be about 14%. Cash flow from operations is expected to be incrementally better in FY17 at about $200 million, driven by higher operating income and some improvement in working capital management. The Company is projecting EPS guidance range of between $2.57 and $2.77 for FY17.

Cash Flow & Balance Sheet

As of December 31, 2016, H.B Fuller had cash totaling $142 million and total debt of $706 million compared to Q3 2016 cash and debt levels of $133 million and $712 million, respectively. Sequentially, net debt was down approximately $15 million. Cash flow from operations was positive $50 million in Q4 2016, while Capital expenditures were $14 million in the reported quarter.

Stock Performance

On January 23, 2017, H.B. Fuller's share price finished the trading session at $47.48, slipping 1.70%. A total volume of 365.66 thousand shares exchanged hands, which was higher than the 3 months average volume of 264.09 thousand shares. The stock has rallied 8.65% and 38.53% in the last three months and past twelve months, respectively. The stock is trading at a PE ratio of 19.63 and has a dividend yield of 1.18%.

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SOURCE: Active Wall Street