On June 27, 2024, H.B. Fuller Co (FUL, Financial) released its 8-K filing for the second quarter of fiscal 2024, reporting notable financial achievements and strategic advancements.
Company Overview
H.B. Fuller Co manufactures and sells adhesives, sealants, and other chemical-based products. The company organizes itself into three segments: Hygiene, Health and Consumable Adhesives, Engineering Adhesives, and Construction Adhesives. It generates the maximum revenue from hygiene, health, and consumable adhesives, which includes specialty industrial adhesives for various markets such as packaging, converting, nonwoven and hygiene, and health and beauty. Approximately half of its revenue is generated in the United States.
Performance Highlights
H.B. Fuller Co (FUL, Financial) reported net revenue of $917 million for Q2 2024, a 2.1% increase year-on-year, aligning closely with the analyst estimate of $913.53 million. The company's reported EPS (diluted) was $0.91, while adjusted EPS (diluted) was $1.12, surpassing the analyst estimate of $1.05 and marking a 20% increase year-on-year.
Financial Achievements
H.B. Fuller Co (FUL, Financial) achieved a gross profit margin of 30.8%, with an adjusted gross profit margin of 31.1%, up 210 basis points year-on-year. This improvement was driven by favorable net pricing, raw material cost impact, restructuring benefits, and volume growth. Adjusted EBITDA was $157 million, up 10% year-on-year, with an adjusted EBITDA margin of 17.1%, an increase of 120 basis points year-on-year.
Income Statement and Key Metrics
Net income for the quarter was $51 million, with adjusted net income at $64 million. The company's year-to-date cash flow from operations increased by $21 million year-on-year to $129 million, reflecting improved profitability. Net working capital as a percentage of annualized net revenue decreased by 190 basis points year-on-year to 16.2%.
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Net Revenue | $917 million | $898 million |
| Gross Profit Margin | 30.8% | 28.6% |
| Adjusted EBITDA | $157 million | $143 million |
| Adjusted EPS (diluted) | $1.12 | $0.93 |
Strategic Developments
During the quarter, H.B. Fuller Co (FUL, Financial) reinitiated its share repurchase program, acquiring 182,400 shares. The company also completed the acquisition of ND Industries, Inc., enhancing its market presence in the automotive, electronics, and aerospace sectors.
"Our strong second quarter financial performance reflects the team’s steadfast commitment to execution while driving our long-term strategy to focus on more profitable, higher growth segments of the market," said H.B. Fuller President and CEO Celeste Mastin.
Balance Sheet and Outlook
Net debt at the end of Q2 2024 was $1,910 million, up $131 million year-on-year, primarily due to the acquisition of ND Industries, Inc. The net debt-to-adjusted EBITDA ratio increased from 2.9x to 3.1x. The company updated its full-year adjusted EBITDA guidance to the upper end of the previously provided range, now expecting adjusted EPS (diluted) to be between $4.20 and $4.45.
For more detailed insights and analysis, visit the full 8-K filing.
Explore the complete 8-K earnings release (here) from H.B. Fuller Co for further details.
