H.B. Fuller Reports Second Quarter 2013 Results Second Quarter Adjusted Diluted EPS $0.67 (1);

Second Quarter Diluted EPS $0.51;

Company Maintains 2013 EPS guidance of $2.55 to $2.65

ST. PAUL, Minn, June 26, 2013 /PRNewswire/ -- H.B. Fuller Company (NYSE: FUL) today reported financial results for the second quarter that ended June 1, 2013.

(Logo:  http://photos.prnewswire.com/prnh/20110215/CG49203LOGO)

Second Quarter 2013 Highlights Included:

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

"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.

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


____________Costs Incurred_____________

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.

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.

 

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





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







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





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





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%





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





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





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





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)



 0.621

  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





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





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)



 1.031

   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



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.

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



 

Maximillian Marcy
Investor Relations Contact
651-236-5062

SOURCE H.B. Fuller Company



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