Business Wire | Jun 23, 2021 04:06PM EDT

H.B. Fuller Reports Second Quarter Fiscal 2021 Results

Jun. 23, 2021

ST. PAUL, Minn.--(BUSINESS WIRE)--Jun. 23, 2021--H.B. Fuller Company (NYSE: FUL) today reported financial results for its second quarter ended May 29, 2021.

Items of Note for Second Quarter 2021

* Strong operational execution, benefits from restructuring efficiencies and improved global industrial demand drove significant revenue and earnings growth versus the second quarter of fiscal 2020. * Revenue was up 22.7% versus the second quarter of last year. Organic revenue increased 18.8% versus the second quarter last year. Organic revenue was up 9.5% when compared with the non-COVID-impacted second quarter of 2019. * Net income increased to $49 million; volume leverage, pricing and operational efficiencies offset higher raw material costs and drove a 21% year-over-year increase in adjusted EBITDA to $122 million. * Earnings per diluted share (EPS) were $0.90; adjusted EPS of $0.94 increased 38% year over year, driven primarily by strong operating income growth and lower interest expense associated with reduced debt. * Year-to-date debt paydown of $61.5 million was 20% higher than the same period last year. The company remains on track to its $200 million debt reduction target for the full year.

Summary of Second Quarter 2021 Results

Net revenue of $828 million increased 22.7% compared with the second quarter of 2020. Foreign currency exchange rates favorably impacted revenue by 3.9%. Organic revenue, which excludes impacts from foreign currency translation, increased 18.8% versus last year, with organic growth in all three Global Business Units (GBUs) including strong, double-digit growth in Engineering Adhesives and Construction Adhesives. Organic revenue also significantly increased by 9.5% when compared with the non-COVID impacted second quarter of 2019, with strong organic growth in all three GBUs.

Gross profit was $218 million. Adjusted gross profit of $219 million increased 18% versus the same period last year. Adjusted gross profit margin declined by 120 basis points year over year as higher sales volume and pricing gains were offset by higher raw material costs. Selling, General and Administrative (SG&A) expense was $148 million. Adjusted SG&A expense of $142 million improved by 130 basis points as a percent of revenue versus the second quarter last year, resulting from strong volume leverage and savings related to the business reorganization to our three GBUs.

As a result of these factors, net income attributable to H.B. Fuller in the quarter was $49 million, or $0.90 per diluted share. Adjusted net income attributable to H.B. Fuller of $51 million and adjusted EPS of $0.94 increased by 45% and 38%, respectively, compared with $35 million and $0.68 in the same period last year. Adjusted EBITDA of $122 million increased 21% compared with $101 million in the prior year.

"H.B. Fuller did an outstanding job supporting customers during the quarter, and we delivered another quarter of strong sales and earnings growth," said Jim Owens, H.B. Fuller president and chief executive officer. "Despite considerable raw material and packaging shortages, H.B. Fuller was able to meet a sizeable increase in demand by leveraging our extensive global network and partnering with customers and suppliers. Raw material costs increased substantially in the second quarter, exacerbated by shortages and impacts from Storm Uri earlier this year. We have implemented significant price adjustments and delivered efficiencies through our streamlined global business unit structure and operational excellence programs. These actions are enabling us to seamlessly serve our customers, achieve our profit targets, and increase our debt paydown over last year's level, in line with our target for $200 million of debt reduction in 2021. Our effective sourcing strategies, market-driven innovation and operational agility are supporting H.B. Fuller's profitable business growth in the current supply-constrained environment. We continue to demonstrate the resiliency of our business, and our ability to grow, gain share and deliver value for shareholders."

Other Financial Metrics

At the end of the second quarter of fiscal 2021, the company had cash and equivalents of $70 million and total debt equal to $1,712 million. This compares to cash and debt levels equal to $70 million and $1,928 million, respectively, at the end of the second quarter of 2020. Capital expenditures for the six-month period were $51 million compared with $55 million in the same period last year.

2021 Planning Assumptions

* Based on current assumptions, full year 2021 revenue growth is anticipated to be in the low double-digits versus 2020. * The company expects raw material cost increases to exceed 10% on a full year basis versus 2020, with the most significant margin head winds expected in the third quarter. The company has implemented annualized price adjustments of $150 million effective March 1 through July 15 and is planning additional increases of $75 million in August and September to offset higher raw material costs. The company is prepared to implement further increases as necessary. * Given these assumptions, the company's prior outlook for full year adjusted EBITDA in the range of $455 million to $475 million remains unchanged. This reflects adjusted EBTIDA growth of 12% to 17% versus 2020, which is supported by share gains, on-going recovery in global industrial production, pricing actions balancing higher input costs, and benefits from the company's operational improvement projects.

Conference Call

The company will hold a conference call on June 24, 2021, at 9:30 a.m. CDT (10:30 a.m. EDT) to discuss its results. Interested parties may listen to the conference call on a live webcast. The webcast, along with a supplemental presentation, may be accessed from the company's website at https://investors.hbfuller.com. Participants should access the webcast 10 minutes prior to the start of the call to install and test any necessary audio software. A telephone replay of the conference call will be available from 12:30 p.m. CDT on June 24, 2021 through July 1, 2021. To access the telephone replay dial (800) 585-8367 or (416) 621-4642 and enter Conference ID: 9378807.

Regulation G

The information presented in this earnings release regarding consolidated and segment organic revenue growth, operating income, adjusted gross profit, adjusted gross profit margin, adjusted selling, general and administrative expense, adjusted income before income taxes and income from equity investments, adjusted income taxes, adjusted effective tax rate, adjusted net income, adjusted diluted earnings per share and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) does not conform to U.S. generally accepted accounting principles (U.S. GAAP) and should not be construed as an alternative to the reported results determined in accordance with U.S. 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 to the results of other companies. The non-GAAP information provided may not be consistent with the methodologies used by other companies. All non-GAAP information is reconciled with reported U.S. GAAP results in the "Regulation G Reconciliation" tables in this press release with the exception of our forward-looking non-GAAP measures contained above in our fiscal 2021 Planning Assumptions, which the company cannot reconcile to forward-looking GAAP results without unreasonable effort.

About H.B. Fuller

Since 1887, 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 2020 net revenue of $2.8 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 electronics, disposable hygiene, medical, transportation, aerospace, clean energy, packaging, construction, woodworking, general industries and other consumer businesses. And, our promise to our people connects them with opportunities to innovate and thrive. For more information, visit us at https://www.hbfuller.com/.

Safe Harbor for Forward-Looking Statements

Certain statements in this press release may be considered forward-looking statements within the meaning of the federal securities laws, including Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements often address expected future business and financial performance, financial condition, and other matters, and often contain words or phrases such as "anticipate," "believe," "estimate," "expect," "intend," "may," "opportunity," "outlook," "plan," "project," "seek," "should," "strategy," "target," "will," "will be," "will continue," "will likely result," "would" and similar expressions, and variations or negatives of these words or phrases. These statements are subject to various risks and uncertainties that could cause our actual results to differ materially from those in the forward-looking statements, including but not limited to the following: the consequences of the COVID-19 outbreak and other pandemics on our operations and financial results; the substantial amount of debt we have incurred to finance our acquisition of Royal, our ability to repay or refinance our debt or to incur additional debt in the future, our need for a significant amount of cash to service and repay the debt and to pay dividends on our common stock, the effect of debt covenants that limit the discretion of management in operating the business or in paying dividends; our ability to pay dividends and to pursue growth opportunities if we continue to pay dividends according to the current dividend policy; our ability to achieve expected synergies, cost savings and operating efficiencies from our restructuring initiatives and operational improvement projects within the expected time frames or at all; our ability to effectively implement Project ONE; uncertain political and economic conditions; fluctuations in product demand; competing products and pricing; our geographic and product mix; availability and price of raw materials; disruptions to our relationships with our major customers and suppliers; failures in our information technology systems; regulatory compliance across our global footprint; trade policies and economic sanctions impacting our markets; changes in tax laws and tariffs; devaluations and other foreign exchange rate fluctuations; the impact of litigation and investigations, including for product liability and environmental matters; impairment charges on our goodwill or long-lived assets; the effect of new accounting pronouncements and accounting charges and credits; and similar matters. Many of the foregoing risks and uncertainties are, and will be, exacerbated by COVID-19 and resulting deterioration of the global business and economic environment.

Additional information about these various risks and uncertainties can be found in the "Risk Factors" section of our Form 10-K filings, and any updates to the risk factors in our Form 10-Q and 8-K filings with the SEC, but there may be other risks and uncertainties that we are unable to identify at this time or that we do not currently expect to have a material impact on the business. You should not place undue reliance on forward-looking statements, which speak only as of the date they are made. We do not undertake to update or revise any forward-looking statements, except as required by law.

H.B. FULLER COMPANY AND SUBSIDIARIES

CONSOLIDATED FINANCIAL INFORMATION

In thousands, except per share amounts (unaudited)

Three Months Percent Three Months Percent Ended of Ended of

May 29, 2021 Net May 30, 2020 Net Revenue Revenue

Net revenue $ 827,873 100.0 % $ 674,602 100.0 %

Cost of sales (610,323 ) (73.7 ) (489,701 ) (72.6 ) % %

Gross profit 217,550 26.3 % 184,901 27.4 %



Selling, general and (148,409 ) (17.9 ) (127,998 ) (19.0 )administrative expenses % %

Other income, net 11,879 1.4 % 3,049 0.5 %

Interest expense (19,942 ) (2.4 ) (21,644 ) (3.2 ) % %

Interest income 2,530 0.3 % 2,898 0.4 %

Income before incometaxes and income from 63,608 7.7 % 41,206 6.1 %equity method investments



Income taxes (16,660 ) (2.0 ) (11,471 ) (1.7 ) % %



Income from equity method 2,176 0.3 % 1,893 0.3 %investments

Net income including 49,124 5.9 % 31,628 4.7 %non-controlling interest



Net income attributable ) )to non-controlling (22 ) (0.0 % (15 ) (0.0 %interest

Net income attributable $ 49,102 5.9 % $ 31,613 4.7 %to H.B. Fuller



Basic income per commonshare attributable to $ 0.93 $ 0.61 H.B. Fuller

Diluted income per commonshare attributable to $ 0.90 $ 0.61 H.B. Fuller



Weighted-average common shares outstanding:

Basic 52,839 51,420

Diluted 54,294 52,029



Dividends declared per $ 0.168 $ 0.163 common share

Selected Balance Sheet Information (subject to change prior to filing of the Company's Annual Report on Form 10-K)

May 29, 2021

November 28, 2020

May 30, 2020

Cash & cash equivalents

$

69,597

$

100,534

$

70,346

Trade accounts receivable, net

583,270

514,916

448,126

Inventories

427,835

323,213

388,698

Trade payables

433,515

316,460

319,616

Total assets

4,266,927

4,036,704

3,979,060

Total debt

1,712,410

1,773,910

1,928,055

Selected Balance Sheet Information (subject to change prior to filing of theCompany's Annual Report on Form 10-K)

May 29, 2021 November 28, May 30, 2020 2020

Cash & cash equivalents $ 69,597 $ 100,534 $ 70,346

Trade accounts receivable, net 583,270 514,916 448,126

Inventories 427,835 323,213 388,698

Trade payables 433,515 316,460 319,616

Total assets 4,266,927 4,036,704 3,979,060

Total debt 1,712,410 1,773,910 1,928,055

H.B. FULLER COMPANY AND SUBSIDIARIES

CONSOLIDATED FINANCIAL INFORMATION

In thousands, except per share amounts (unaudited)

Six Months Ended

Percent of

Six Months Ended

Percent of

May 29, 2021

Net Revenue

May 30, 2020

Net Revenue

Net revenue

$

1,553,777

100.0

%

$

1,321,166

100.0

%

Cost of sales

(1,143,863

)

(73.6

)%

(966,003

)

(73.1

)%

Gross profit

409,914

26.4

%

355,163

26.9

%

Selling, general and administrative expenses

(292,423

)

(18.8

)%

(269,507

)

(20.4

)%

Other income, net

19,748

1.3

%

8,018

0.6

%

Interest expense

(40,303

)

(2.6

)%

(44,401

)

(3.4

)%

Interest income

5,189

0.3

%

5,816

0.4

%

Income before income taxes and income from equity method investments

102,125

6.6

%

55,089

4.2

%

Income taxes

(27,267

)

(1.8

)%

(17,082

)

(1.3

)%

Income from equity method investments

4,072

0.3

%

3,527

0.3

%

Net income including non-controlling interest

78,930

5.1

%

41,534

3.1

%

Net income attributable to non-controlling interest

(37

)

(0.0

)%

(26

)

(0.0

)%

Net income attributable to H.B. Fuller

$

78,893

5.1

%

$

41,508

3.1

%

Basic income per common share attributable to H.B. Fuller

$

1.50

$

0.80

Diluted income per common share attributable to H.B. Fuller

$

1.47

$

0.79

Weighted-average common shares outstanding:

Basic

52,666

51,874

Diluted

53,817

52,305

Dividends declared per common share

$

0.330

$

0.323

H.B. FULLER COMPANY AND SUBSIDIARIES

CONSOLIDATED FINANCIAL INFORMATION

In thousands, except per share amounts (unaudited)

Six Months Percent Six Months Percent Ended of Ended of

May 29, 2021 Net May 30, 2020 Net Revenue Revenue

Net revenue $ 1,553,777 100.0 % $ 1,321,166 100.0 %

Cost of sales (1,143,863 ) (73.6 ) (966,003 ) (73.1 ) % %

Gross profit 409,914 26.4 % 355,163 26.9 %



Selling, general and ) )administrative (292,423 ) (18.8 % (269,507 ) (20.4 %expenses



Other income, net 19,748 1.3 % 8,018 0.6 %

Interest expense (40,303 ) (2.6 ) (44,401 ) (3.4 ) % %

Interest income 5,189 0.3 % 5,816 0.4 %

Income before incometaxes and income from 102,125 6.6 % 55,089 4.2 %equity methodinvestments



Income taxes (27,267 ) (1.8 ) (17,082 ) (1.3 ) % %



Income from equity 4,072 0.3 % 3,527 0.3 %method investments

Net income includingnon-controlling 78,930 5.1 % 41,534 3.1 %interest



Net incomeattributable to (37 ) (0.0 ) (26 ) (0.0 )non-controlling % %interest

Net incomeattributable to H.B. $ 78,893 5.1 % $ 41,508 3.1 %Fuller





Basic income percommon share $ 1.50 $ 0.80 attributable to H.B.Fuller

Diluted income percommon share $ 1.47 $ 0.79 attributable to H.B.Fuller



Weighted-averagecommon shares outstanding:

Basic 52,666 51,874

Diluted 53,817 52,305



Dividends declared per $ 0.330 $ 0.323 common share

H.B. FULLER COMPANY AND SUBSIDIARIES

REGULATION G RECONCILIATION

In thousands, except per share amounts (unaudited)

Three Months Ended

Six Months Ended

May 29,

May 30,

May 29,

May 30,

2021

2020

2021

2020

Net income attributable to H.B. Fuller

$

49,102

$

31,613

$

78,893

$

41,508

Adjustments:

Acquisition project costs

1,302

(1,725

)

1,376

(1,512

)

Organizational realignment 1

2,307

2,113

5,942

4,978

Royal restructuring and integration 2

1,239

2,603

2,521

5,589

Project One

1,959

1,165

4,164

2,540

Other 3

(3,857

)

598

(3,812

)

1,036

Discrete tax items

(600

)

45

(558

)

1,959

Income tax effect on adjustments 4

(594

)

(1,266

)

(2,613

)

(3,162

)

Adjusted net income attributable to H.B. Fuller 5

50,858

35,146

85,913

52,936

Add:

Interest expense

19,965

21,670

40,357

44,431

Interest income

(2,530

)

(2,898

)

(5,189

)

(5,816

)

Income taxes

17,854

12,692

30,437

18,284

Depreciation and Amortization expense 6

35,389

34,009

70,891

68,561

Adjusted EBITDA 5

121,536

100,619

222,409

178,396

Diluted Shares

54,294

52,029

53,817

52,305

Adjusted diluted income per common share attributable to

H.B. Fuller 5

$

0.94

$

0.68

$

1.60

$

1.01

Revenue

$

827,873

$

674,602

$

1,553,777

$

1,321,166

Adjusted EBITDA margin 5

14.7

%

14.9

%

14.3

%

13.5

%

H.B. FULLER COMPANY AND SUBSIDIARIES

REGULATION G RECONCILIATION

In thousands, except per share amounts (unaudited)

Three Months Ended Six Months Ended

May 29, May 30, May 29, May 30,

2021 2020 2021 2020



Net incomeattributable to $ 49,102 $ 31,613 $ 78,893 $ 41,508 H.B. Fuller



Adjustments:

Acquisition project 1,302 (1,725 ) 1,376 (1,512 )costs

Organizational 2,307 2,113 5,942 4,978 realignment ^1

Royal restructuring 1,239 2,603 2,521 5,589 and integration ^2

Project One 1,959 1,165 4,164 2,540

Other ^3 (3,857 ) 598 (3,812 ) 1,036

Discrete tax items (600 ) 45 (558 ) 1,959

Income tax effect (594 ) (1,266 ) (2,613 ) (3,162 )on adjustments ^4

Adjusted net incomeattributable to 50,858 35,146 85,913 52,936 H.B. Fuller ^5



Add:

Interest expense 19,965 21,670 40,357 44,431

Interest income (2,530 ) (2,898 ) (5,189 ) (5,816 )

Income taxes 17,854 12,692 30,437 18,284

Depreciation andAmortization 35,389 34,009 70,891 68,561 expense ^6

Adjusted EBITDA ^5 121,536 100,619 222,409 178,396



Diluted Shares 54,294 52,029 53,817 52,305

Adjusted dilutedincome per commonshare attributable $ 0.94 $ 0.68 $ 1.60 $ 1.01 to

H.B. Fuller ^5

Revenue $ 827,873 $ 674,602 $ 1,553,777 $ 1,321,166

Adjusted EBITDA 14.7 % 14.9 % 14.3 % 13.5 %margin ^5

1 Includes costs incurred as a direct result of the organizational realignment program, including compensation for employees supporting the program, consulting expense and operational inefficiencies related to the closure of production facilities and consolidation of business activities.

2 Costs incurred as a direct result of the Royal restructuring and integration program including compensation for employees supporting the program, consulting expense and operational inefficiencies related to the closure of production facilities and consolidation of business activities.

3 Three and six months ended May 29, 2021 includes one-time, non-cash gains related to a transactional tax legal settlement in Brazil and a legal entity merger.

4 The income tax effect on adjustments represents the difference between income taxes on net income before income taxes and income from equity method investments reported in accordance with U.S. GAAP and adjusted net income before income taxes and income from equity method investments.

5 Adjusted net income attributable to H.B. Fuller, adjusted diluted income per common share attributable to H.B. Fuller, adjusted EBITDA and adjusted EBITDA margin are non-GAAP financial measures. Adjusted net income attributable to H.B. Fuller is defined as net income before the specific adjustments shown above. Adjusted diluted income per common share is defined as adjusted net income attributable to H.B. Fuller divided by the number of diluted common shares. Adjusted EBITDA is defined as net income before interest, income taxes, depreciation, amortization and the specific adjustments shown above. Adjusted EBITDA margin is defined as adjusted EBITDA divided by net revenue. The table above provides a reconciliation of adjusted net income attributable to H.B. Fuller, adjusted diluted income per common share attributable to H.B. Fuller, adjusted EBITDA and adjusted EBITDA margin to net income attributable to H.B. Fuller, the most directly comparable financial measure determined and reported in accordance with U.S. GAAP.

6 Depreciation and amortization expense added back for EBITDA is adjusted for amounts already included in Adjusted net income attributable to H.B. Fuller totaling ($507) and ($63) for the three months ended May 29, 2021 and May 30, 2020, respectively and ($734) and ($96) for the six months ended May 29, 2021 and May 30, 2020, respectively.

^1 Includes costs incurred as a direct result of the organizational realignmentprogram, including compensation for employees supporting the program,consulting expense and operational inefficiencies related to the closure ofproduction facilities and consolidation of business activities.

^2 Costs incurred as a direct result of the Royal restructuring and integrationprogram including compensation for employees supporting the program, consultingexpense and operational inefficiencies related to the closure of productionfacilities and consolidation of business activities.

^3 Three and six months ended May 29, 2021 includes one-time, non-cash gainsrelated to a transactional tax legal settlement in Brazil and a legal entitymerger.

^4 The income tax effect on adjustments represents the difference betweenincome taxes on net income before income taxes and income from equity methodinvestments reported in accordance with U.S. GAAP and adjusted net incomebefore income taxes and income from equity method investments.

^5 Adjusted net income attributable to H.B. Fuller, adjusted diluted income percommon share attributable to H.B. Fuller, adjusted EBITDA and adjusted EBITDAmargin are non-GAAP financial measures. Adjusted net income attributable toH.B. Fuller is defined as net income before the specific adjustments shownabove. Adjusted diluted income per common share is defined as adjusted netincome attributable to H.B. Fuller divided by the number of diluted commonshares. Adjusted EBITDA is defined as net income before interest, income taxes,depreciation, amortization and the specific adjustments shown above. AdjustedEBITDA margin is defined as adjusted EBITDA divided by net revenue. The tableabove provides a reconciliation of adjusted net income attributable to H.B.Fuller, adjusted diluted income per common share attributable to H.B. Fuller,adjusted EBITDA and adjusted EBITDA margin to net income attributable to H.B.Fuller, the most directly comparable financial measure determined and reportedin accordance with U.S. GAAP.

^6 Depreciation and amortization expense added back for EBITDA is adjusted foramounts already included in Adjusted net income attributable to H.B. Fullertotaling ($507) and ($63) for the three months ended May 29, 2021 and May 30,2020, respectively and ($734) and ($96) for the six months ended May 29, 2021and May 30, 2020, respectively.

H.B. FULLER COMPANY AND SUBSIDIARIES

SEGMENT FINANCIAL INFORMATION

In thousands (unaudited)

Three Months Ended

Six Months Ended

May 29,

May 30,

May 29,

May 30,

2021

2020

2021

2020

Net Revenue:

Hygiene, Health and Consumable Adhesives

$

364,814

$

344,673

$

700,482

$

657,185

Engineering Adhesives

345,373

236,063

658,037

484,958

Construction Adhesives

117,686

93,866

195,258

179,023

Corporate unallocated

-

-

-

-

Total H.B. Fuller

$

827,873

$

674,602

$

1,553,777

$

1,321,166

Segment Operating Income:

Hygiene, Health and Consumable Adhesives

$

38,929

$

35,009

$

68,840

$

57,673

Engineering Adhesives

32,075

20,149

62,493

35,514

Construction Adhesives

6,338

6,527

1,635

5,152

Corporate unallocated

(8,201

)

(4,782

)

(15,477

)

(12,683

)

Total H.B. Fuller

$

69,141

$

56,903

$

117,491

$

85,656

Adjusted EBITDA 5

Hygiene, Health and Consumable Adhesives

$

53,569

$

48,321

$

98,175

$

84,217

Engineering Adhesives

49,864

35,172

98,032

66,087

Construction Adhesives

17,252

16,626

23,539

25,499

Corporate unallocated

851

500

2,663

2,593

Total H.B. Fuller

$

121,536

$

100,619

$

222,409

$

178,396

Adjusted EBITDA Margin 5

Hygiene, Health and Consumable Adhesives

14.7

%

14.0

%

14.0

%

12.8

%

Engineering Adhesives

14.4

%

14.9

%

14.9

%

13.6

%

Construction Adhesives

14.7

%

17.7

%

12.1

%

14.2

%

Corporate unallocated

NMP

NMP

NMP

NMP

Total H.B. Fuller

14.7

%

14.9

%

14.3

%

13.5

%

NMP = non-meaningful percentage

H.B. FULLER COMPANY AND SUBSIDIARIES

SEGMENT FINANCIAL INFORMATION

In thousands (unaudited)

Three Months Ended Six Months Ended

May 29, May 30, May 29, May 30,

2021 2020 2021 2020

Net Revenue:

Hygiene, Health andConsumable $ 364,814 $ 344,673 $ 700,482 $ 657,185Adhesives

Engineering 345,373 236,063 658,037 484,958Adhesives

Construction 117,686 93,866 195,258 179,023Adhesives

Corporate - - - -unallocated

Total H.B. Fuller $ 827,873 $ 674,602 $ 1,553,777 $ 1,321,166



Segment Operating Income:

Hygiene, Health andConsumable $ 38,929 $ 35,009 $ 68,840 $ 57,673Adhesives

Engineering 32,075 20,149 62,493 35,514Adhesives

Construction 6,338 6,527 1,635 5,152Adhesives

Corporate (8,201 ) (4,782 ) (15,477 ) (12,683 )unallocated

Total H.B. Fuller $ 69,141 $ 56,903 $ 117,491 $ 85,656



Adjusted EBITDA ^5

Hygiene, Health andConsumable $ 53,569 $ 48,321 $ 98,175 $ 84,217Adhesives

Engineering 49,864 35,172 98,032 66,087Adhesives

Construction 17,252 16,626 23,539 25,499Adhesives

Corporate 851 500 2,663 2,593unallocated

Total H.B. Fuller $ 121,536 $ 100,619 $ 222,409 $ 178,396



Adjusted EBITDA Margin ^5

Hygiene, Health andConsumable 14.7 % 14.0 % 14.0 % 12.8 %Adhesives

Engineering 14.4 % 14.9 % 14.9 % 13.6 %Adhesives

Construction 14.7 % 17.7 % 12.1 % 14.2 %Adhesives

Corporate NMP NMP NMP NMPunallocated

Total H.B. Fuller 14.7 % 14.9 % 14.3 % 13.5 %



NMP =non-meaningful percentage

H.B. FULLER COMPANY AND SUBSIDIARIES

REGULATION G RECONCILIATION

In thousands, except per share amounts (unaudited)

H.B. FULLER COMPANY AND SUBSIDIARIES

REGULATION G RECONCILIATION

In thousands, except per share amounts (unaudited)

Three Months Ended

Six Months Ended

May 29,

May 30,

May 29,

May 30,

2021

2020

2021

2020

Income before income taxes and income from equity method investments

$

63,608

$

41,206

$

102,125

$

55,089

Adjustments:

Acquisition project costs

1,302

(1,725

)

1,376

(1,512

)

Organizational realignment

2,307

2,113

5,942

4,978

Royal restructuring and integration

1,239

2,603

2,521

5,589

Project One

1,959

1,165

4,164

2,540

Other 3

(3,857

)

598

(3,812

)

1,036

Adjusted income before income taxes and income from equity method investments 7

$

66,558

$

45,960

$

112,316

$

67,720

7 Adjusted income before income taxes and income from equity investments is a non-GAAP financial measure. Adjusted income before income taxes and income from equity investments is defined as income before income taxes and income from equity investments before the specific adjustments shown above. The table above provides a reconciliation of adjusted income before income taxes and income from equity investments to income before income taxes and income from equity investments, the most directly comparable financial measure determined and reported in accordance with U.S. GAAP.



Three Months Ended Six Months Ended

May 29, May 30, May 29, May 30,

2021 2020 2021 2020

Income before income taxesand income from equity $ 63,608 $ 41,206 $ 102,125 $ 55,089method investments



Adjustments:

Acquisition project costs 1,302 (1,725 ) 1,376 (1,512 )

Organizational realignment 2,307 2,113 5,942 4,978

Royal restructuring and 1,239 2,603 2,521 5,589integration

Project One 1,959 1,165 4,164 2,540

Other ^3 (3,857 ) 598 (3,812 ) 1,036

Adjusted income beforeincome taxes and income $ 66,558 $ 45,960 $ 112,316 $ 67,720from equity methodinvestments ^7

^7 Adjusted income before income taxes and income from equity investments is anon-GAAP financial measure. Adjusted income before income taxes and income fromequity investments is defined as income before income taxes and income fromequity investments before the specific adjustments shown above. The table aboveprovides a reconciliation of adjusted income before income taxes and incomefrom equity investments to income before income taxes and income from equityinvestments, the most directly comparable financial measure determined andreported in accordance with U.S. GAAP.

H.B. FULLER COMPANY AND SUBSIDIARIES

REGULATION G RECONCILIATION

In thousands, except per share amounts (unaudited)

Three Months Ended

Six Months Ended

May 29,

May 30,

May 29,

May 30,

2021

2020

2021

2020

Income Taxes

$

(16,660

)

$

(11,471

)

$

(27,267

)

$

(17,082

)

Adjustments:

Acquisition project costs

(262

)

459

(283

)

514

Organizational realignment

(465

)

(562

)

(1,478

)

177

Royal restructuring and integration

(249

)

(693

)

(606

)

71

Project One

(395

)

(310

)

(1,009

)

42

Other

177

(115

)

206

(2,006

)

Adjusted income taxes 8

$

(17,854

)

$

(12,692

)

$

(30,437

)

$

(18,284

)

Adjusted income before income taxes and income from equity method investments

$

66,558

$

45,960

$

112,316

$

67,720

Adjusted effective income tax rate 8

26.8

%

27.6

%

27.1

%

27.0

%

8 Adjusted income taxes and adjusted effective income tax rate are non-GAAP financial measures. Adjusted income taxes are defined as income taxes before the specific adjustments shown above. Adjusted effective income tax rate is defined as income taxes divided by adjusted income before income taxes and income from equity method investments. The table above provides a reconciliation of adjusted income taxes and adjusted effective income tax rate to income taxes, the most directly comparable financial measure determined and reported in accordance with U.S. GAAP.

H.B. FULLER COMPANY AND SUBSIDIARIES

REGULATION G RECONCILIATION

In thousands, except per share amounts (unaudited)

Three Months Ended Six Months Ended

May 29, May 30, May 29, May 30,

2021 2020 2021 2020

Income Taxes $ (16,660 ) $ (11,471 ) $ (27,267 ) $ (17,082 )



Adjustments:

Acquisition project (262 ) 459 (283 ) 514costs

Organizational (465 ) (562 ) (1,478 ) 177realignment

Royal restructuring and (249 ) (693 ) (606 ) 71integration

Project One (395 ) (310 ) (1,009 ) 42

Other 177 (115 ) 206 (2,006 )

Adjusted income taxes ^ $ (17,854 ) $ (12,692 ) $ (30,437 ) $ (18,284 )8



Adjusted income beforeincome taxes and income $ 66,558 $ 45,960 $ 112,316 $ 67,720from equity methodinvestments

Adjusted effective 26.8 % 27.6 % 27.1 % 27.0 %income tax rate ^8

^8 Adjusted income taxes and adjusted effective income tax rate are non-GAAPfinancial measures. Adjusted income taxes are defined as income taxes beforethe specific adjustments shown above. Adjusted effective income tax rate isdefined as income taxes divided by adjusted income before income taxes andincome from equity method investments. The table above provides areconciliation of adjusted income taxes and adjusted effective income tax rateto income taxes, the most directly comparable financial measure determined andreported in accordance with U.S. GAAP.

H.B. FULLER COMPANY AND SUBSIDIARIES

REGULATION G RECONCILIATION

In thousands (unaudited)

Three Months Ended

Six Months Ended

May 29,

May 30,

May 29,

May 30,

2021

2020

2021

2020

Net revenue

$

827,873

$

674,602

$

1,553,777

$

1,321,166

Gross profit

$

217,550

$

184,901

$

409,914

$

355,163

Gross profit margin

26.3

%

27.4

%

26.4

%

26.9

%

Adjustments:

Acquisition project costs

63

-

63

-

Organizational realignment

544

70

793

151

Royal restructuring and integration

578

697

1,319

1,598

Project ONE

(725

)

-

-

-

Other

1,378

981

1,386

991

Adjusted gross profit 9

$

219,388

$

186,649

$

413,475

$

357,903

Adjusted gross profit margin 9

26.5

%

27.7

%

26.6

%

27.1

%

H.B. FULLER COMPANY AND SUBSIDIARIES

REGULATION G RECONCILIATION

In thousands (unaudited)

Three Months Ended Six Months Ended

May 29, May 30, May 29, May 30,

2021 2020 2021 2020



Net revenue $ 827,873 $ 674,602 $ 1,553,777 $ 1,321,166



Gross profit $ 217,550 $ 184,901 $ 409,914 $ 355,163

Gross profit margin 26.3 % 27.4 % 26.4 % 26.9 %



Adjustments:

Acquisition project 63 - 63 -costs

Organizational 544 70 793 151realignment

Royal restructuring 578 697 1,319 1,598and integration

Project ONE (725 ) - - -

Other 1,378 981 1,386 991

Adjusted gross $ 219,388 $ 186,649 $ 413,475 $ 357,903profit ^9

Adjusted gross 26.5 % 27.7 % 26.6 % 27.1 %profit margin ^9

9 Adjusted gross profit and adjusted gross profit margin are non-GAAP financial measures. Adjusted gross profit and adjusted gross profit margin is defined as gross profit and gross profit margin excluding the specific adjustments shown above. The table above provides a reconciliation of adjusted gross profit and gross profit margin to gross profit and gross profit margin, the most directly comparable financial measure determined and reported in accordance with U.S. GAAP.

^9 Adjusted gross profit and adjusted gross profit margin are non-GAAPfinancial measures. Adjusted gross profit and adjusted gross profit margin isdefined as gross profit and gross profit margin excluding the specificadjustments shown above. The table above provides a reconciliation of adjustedgross profit and gross profit margin to gross profit and gross profit margin,the most directly comparable financial measure determined and reported inaccordance with U.S. GAAP.

H.B. FULLER COMPANY AND SUBSIDIARIES

REGULATION G RECONCILIATION

In thousands (unaudited)

Three Months Ended

Six Months Ended

May 29,

May 30,

May 29,

May 30,

2021

2020

2021

2020

Selling, general and administrative expenses

$

(148,409

)

$

(127,998

)

$

(292,423

)

$

(269,507

)

Adjustments:

Acquisition project costs

1,239

(1,725

)

1,313

(1,512

)

Organizational realignment

1,818

2,042

5,205

4,826

Royal restructuring and integration

683

1,932

1,255

4,043

Project ONE

2,684

1,166

4,164

2,541

Other

(59

)

(382

)

(23

)

45

Adjusted selling, general and administrative expenses 10

$

(142,044

)

$

(124,965

)

$

(280,509

)

$

(259,564

)

H.B. FULLER COMPANY AND SUBSIDIARIES

REGULATION G RECONCILIATION

In thousands (unaudited)

Three Months Ended Six Months Ended

May 29, May 30, May 29, May 30,

2021 2020 2021 2020



Selling, generaland administrative $ (148,409 ) $ (127,998 ) $ (292,423 ) $ (269,507 )expenses



Adjustments:

Acquisition project 1,239 (1,725 ) 1,313 (1,512 )costs

Organizational 1,818 2,042 5,205 4,826realignment

Royal restructuring 683 1,932 1,255 4,043and integration

Project ONE 2,684 1,166 4,164 2,541

Other (59 ) (382 ) (23 ) 45

Adjusted selling,general and $ (142,044 ) $ (124,965 ) $ (280,509 ) $ (259,564 )administrativeexpenses ^10

10 Adjusted selling, general and administrative expenses is a non-GAAP financial measure. Adjusted selling, general and administrative expenses is defined as selling, general and administrative expenses excluding the specific adjustments shown above. The table above provides a reconciliation of adjusted selling, general and administrative expenses to selling, general and administrative expenses, the most directly comparable financial measure determined and reported in accordance with U.S. GAAP.



^10 Adjusted selling, general and administrative expenses is a non-GAAPfinancial measure. Adjusted selling, general and administrative expenses isdefined as selling, general and administrative expenses excluding the specificadjustments shown above. The table above provides a reconciliation of adjustedselling, general and administrative expenses to selling, general andadministrative expenses, the most directly comparable financial measuredetermined and reported in accordance with U.S. GAAP.



H.B. FULLER COMPANY AND SUBSIDIARIES

REGULATION G RECONCILIATION

In thousands (unaudited)

Hygiene, Health

Three Months Ended:

and Consumable

Engineering

Construction

Corporate

H.B. Fuller

May 29, 2021

Adhesives

Adhesives

Adhesives

Total

Unallocated

Consolidated

Net income attributable to H.B. Fuller

$

42,197

$

34,584

$

8,515

$

85,296

$

(36,194

)

$

49,102

Adjustments:

Acquisition project costs

-

-

-

-

1,302

1,302

Organizational realignment

-

-

-

-

2,307

2,307

Royal Restructuring

-

-

-

-

1,239

1,239

Project One

-

-

-

-

1,959

1,959

Other 3

-

-

-

-

(3,857

)

(3,857

)

Discrete tax items

-

-

-

-

(600

)

(600

)

Income tax effect on adjustments 4

-

-

-

-

(594

)

(594

)

Adjusted net income attributable to H.B. Fuller 5

42,197

34,584

8,515

85,296

(34,438

)

50,858

Add:

Interest expense

-

-

-

-

19,965

19,965

Interest income

-

-

-

-

(2,530

)

(2,530

)

Income taxes

-

-

-

-

17,854

17,854

Depreciation and amortization expense

11,372

15,280

8,737

35,389

-

35,389

Adjusted EBITDA 5

$

53,569

$

49,864

$

17,252

$

120,685

$

851

$

121,536

Revenue

$

364,814

$

345,373

$

117,686

$

827,873

-

$

827,873

Adjusted EBITDA Margin 5

14.7

%

14.4

%

14.7

%

14.6

%

NMP

14.7

%

H.B. FULLER COMPANY AND SUBSIDIARIES

REGULATION G RECONCILIATION

In thousands (unaudited)

Hygiene, Health

Three Months and Engineering Construction Corporate H.B. FullerEnded: Consumable

May 29, 2021 Adhesives Adhesives Adhesives Total Unallocated Consolidated

Net incomeattributable $ 42,197 $ 34,584 $ 8,515 $ 85,296 $ (36,194 ) $ 49,102to H.B. Fuller

Adjustments:

Acquisition - - - - 1,302 1,302project costs

Organizational - - - - 2,307 2,307realignment

Royal - - - - 1,239 1,239Restructuring

Project One - - - - 1,959 1,959

Other ^3 - - - - (3,857 ) (3,857 )

Discrete tax - - - - (600 ) (600 )items

Income taxeffect on - - - - (594 ) (594 )adjustments ^4

Adjusted netincomeattributable 42,197 34,584 8,515 85,296 (34,438 ) 50,858to H.B. Fuller^5

Add:

Interest - - - - 19,965 19,965expense

Interest - - - - (2,530 ) (2,530 )income

Income taxes - - - - 17,854 17,854

Depreciationand 11,372 15,280 8,737 35,389 - 35,389amortizationexpense

Adjusted $ 53,569 $ 49,864 $ 17,252 $ 120,685 $ 851 $ 121,536EBITDA ^5

Revenue $ 364,814 $ 345,373 $ 117,686 $ 827,873 - $ 827,873

AdjustedEBITDA Margin 14.7 % 14.4 % 14.7 % 14.6 % NMP 14.7 %^5

Hygiene, Health

Six Months Ended:

and Consumable

Engineering

Construction

Corporate

H.B. Fuller

May 29, 2021

Adhesives

Adhesives

Adhesives

Total

Unallocated

Consolidated

Net income attributable to H.B. Fuller

$

75,367

$

67,500

$

5,988

$

148,855

$

(69,962

)

$

78,893

Adjustments:

Acquisition project costs

-

-

-

-

1,376

1,376

Organizational realignment

-

-

-

-

5,942

5,942

Royal Restructuring

-

-

-

-

2,521

2,521

Project One

-

-

-

-

4,164

4,164

Other 3

-

-

-

-

(3,812

)

(3,812

)

Discrete tax items

-

-

-

-

(558

)

(558

)

Income tax effect on adjustments 4

-

-

-

-

(2,613

)

(2,613

)

Adjusted net income attributable to H.B. Fuller 5

75,367

67,500

5,988

148,855

(62,942

)

85,913

Add:

Interest expense

-

-

-

-

40,357

40,357

Interest income

-

-

-

-

(5,189

)

(5,189

)

Income taxes

-

-

-

-

30,437

30,437

Depreciation and amortization expense

22,808

30,532

17,551

70,891

-

70,891

Adjusted EBITDA 5

$

98,175

$

98,032

$

23,539

$

219,746

$

2,663

$

222,409

Revenue

700,482

658,037

195,258

1,553,777

-

1,553,777

Adjusted EBITDA Margin 5

14.0

%

14.9

%

12.1

%

14.1

%

NMP

14.3

%

Note: Adjusted EBITDA is a non-GAAP financial measure. The table above provides a reconciliation of adjusted EBITDA for each segment to net income attributable to H.B. Fuller for each segment, the most directly comparable financial measure determined and reported in accordance with U.S. GAAP.

NMP = Non-meaningful percentage

Hygiene, Health

Six Months and Engineering Construction Corporate H.B. FullerEnded: Consumable

May 29, 2021 Adhesives Adhesives Adhesives Total Unallocated Consolidated

Net incomeattributable $ 75,367 $ 67,500 $ 5,988 $ 148,855 $ (69,962 ) $ 78,893to H.B. Fuller

Adjustments:

Acquisition - - - - 1,376 1,376project costs

Organizational - - - - 5,942 5,942realignment

Royal - - - - 2,521 2,521Restructuring

Project One - - - - 4,164 4,164

Other ^3 - - - - (3,812 ) (3,812 )

Discrete tax - - - - (558 ) (558 )items

Income taxeffect on - - - - (2,613 ) (2,613 )adjustments ^4

Adjusted netincomeattributable 75,367 67,500 5,988 148,855 (62,942 ) 85,913to H.B. Fuller^5

Add:

Interest - - - - 40,357 40,357expense

Interest - - - - (5,189 ) (5,189 )income

Income taxes - - - - 30,437 30,437

Depreciationand 22,808 30,532 17,551 70,891 - 70,891amortizationexpense

Adjusted $ 98,175 $ 98,032 $ 23,539 $ 219,746 $ 2,663 $ 222,409EBITDA ^5

Revenue 700,482 658,037 195,258 1,553,777 - 1,553,777

AdjustedEBITDA Margin 14.0 % 14.9 % 12.1 % 14.1 % NMP 14.3 %^5

Note: Adjusted EBITDA is a non-GAAP financial measure. The table above providesa reconciliation of adjusted EBITDA for each segment to net income attributableto H.B. Fuller for each segment, the most directly comparable financial measuredetermined and reported in accordance with U.S. GAAP.

NMP = Non-meaningful percentage

H.B. FULLER COMPANY AND SUBSIDIARIES

REGULATION G RECONCILIATION

In thousands (unaudited)

Hygiene, Health

Three Months Ended:

and Consumable

Engineering

Construction

Corporate

H.B. Fuller

May 30, 2020

Adhesives

Adhesives

Adhesives

Total

Unallocated

Consolidated

Net income attributable to H.B. Fuller

$

36,804

$

21,598

$

7,708

$

66,110

$

(34,497

)

$

31,613

Adjustments:

Acquisition project costs

-

-

-

-

(1,725

)

(1,725

)

Organizational realignment

-

-

-

-

2,113

2,113

Royal Restructuring

-

-

-

-

2,603

2,603

Project One

-

-

-

-

1,165

1,165

Other

-

-

-

-

598

598

Discrete tax items

-

-

-

-

45

45

Income tax effect on adjustments 4

-

-

-

-

(1,266

)

(1,266

)

Adjusted net income attributable to H.B. Fuller 5

36,804

21,598

7,708

66,110

(30,964

)

35,146

Add:

Interest expense

-

-

-

-

21,670

21,670

Interest income

-

-

-

-

(2,898

)

(2,898

)

Income taxes

-

-

-

-

12,692

12,692

Depreciation and amortization expense

11,517

13,574

8,918

34,009

-

34,009

Adjusted EBITDA 5

$

48,321

$

35,172

$

16,626

$

100,119

$

500

$

100,619

Revenue

$

344,673

$

236,063

$

93,866

$

674,602

-

$

674,602

Adjusted EBITDA Margin 5

14.0

%

14.9

%

17.7

%

14.8

%

NMP

14.9

%

Hygiene, Health

Six Months Ended:

and Consumable

Engineering

Construction

Corporate

H.B. Fuller

May 30, 2020

Adhesives

Adhesives

Adhesives

Total

Unallocated

Consolidated

Net income attributable to H.B. Fuller

$

61,291

$

38,433

$

7,518

$

107,242

$

(65,734

)

$

41,508

Adjustments:

Acquisition project costs

-

-

-

-

(1,512

)

(1,512

)

Organizational realignment

-

-

-

-

4,978

4,978

Royal Restructuring

-

-

-

-

5,589

5,589

Project One

-

-

-

-

2,540

2,540

Other

-

-

-

-

1,036

1,036

Discrete tax items

-

-

-

-

1,959

1,959

Income tax effect on adjustments 4

-

-

-

-

(3,162

)

(3,162

)

Adjusted net income attributable to H.B. Fuller 5

61,291

38,433

7,518

107,242

(54,306

)

52,936

Add:

Interest expense

-

-

-

-

44,431

44,431

Interest income

-

-

-

-

(5,816

)

(5,816

)

Income taxes

-

-

-

-

18,284

18,284

Depreciation and amortization expense

22,926

27,654

17,981

68,561

-

68,561

Adjusted EBITDA 5

$

84,217

$

66,087

$

25,499

$

175,803

$

2,593

$

178,396

Revenue

$

657,185

$

484,958

$

179,023

$

1,321,166

-

$

1,321,166

Adjusted EBITDA Margin 5

12.8

%

13.6

%

14.2

%

13.3

%

NMP

13.5

%

Note: Adjusted EBITDA is a non-GAAP financial measure. The table above provides a reconciliation of adjusted EBITDA for each segment to net income attributable to H.B. Fuller for each segment, the most directly comparable financial measure determined and reported in accordance with U.S. GAAP.

NMP = Non-meaningful percentage

H.B. FULLER COMPANY AND SUBSIDIARIES

REGULATION G RECONCILIATION

In thousands (unaudited)



Hygiene, Health

Three Months and Consumable Engineering Construction Corporate H.B. FullerEnded:

May 30, 2020 Adhesives Adhesives Adhesives Total Unallocated Consolidated

Net incomeattributable $ 36,804 $ 21,598 $ 7,708 $ 66,110 $ (34,497 ) $ 31,613to H.B. Fuller

Adjustments:

Acquisition - - - - (1,725 ) (1,725 )project costs

Organizational - - - - 2,113 2,113realignment

Royal - - - - 2,603 2,603Restructuring

Project One - - - - 1,165 1,165

Other - - - - 598 598

Discrete tax - - - - 45 45items

Income taxeffect on - - - - (1,266 ) (1,266 )adjustments ^4

Adjusted netincomeattributable 36,804 21,598 7,708 66,110 (30,964 ) 35,146to H.B. Fuller^5

Add:

Interest - - - - 21,670 21,670expense

Interest - - - - (2,898 ) (2,898 )income

Income taxes - - - - 12,692 12,692

Depreciationand 11,517 13,574 8,918 34,009 - 34,009amortizationexpense

Adjusted $ 48,321 $ 35,172 $ 16,626 $ 100,119 $ 500 $ 100,619EBITDA ^5

Revenue $ 344,673 $ 236,063 $ 93,866 $ 674,602 - $ 674,602

AdjustedEBITDA Margin 14.0 % 14.9 % 17.7 % 14.8 % NMP 14.9 %^5

Hygiene, Health

Six Months Ended: and Engineering Construction Corporate H.B. Fuller Consumable

May 30, 2020 Adhesives Adhesives Adhesives Total Unallocated Consolidated

Net incomeattributable to $ 61,291 $ 38,433 $ 7,518 $ 107,242 $ (65,734 ) $ 41,508H.B. Fuller

Adjustments:

Acquisition - - - - (1,512 ) (1,512 )project costs

Organizational - - - - 4,978 4,978realignment

Royal - - - - 5,589 5,589Restructuring

Project One - - - - 2,540 2,540

Other - - - - 1,036 1,036

Discrete tax - - - - 1,959 1,959items

Income tax effect - - - - (3,162 ) (3,162 )on adjustments ^4

Adjusted netincome 61,291 38,433 7,518 107,242 (54,306 ) 52,936attributable toH.B. Fuller ^5

Add:

Interest expense - - - - 44,431 44,431

Interest income - - - - (5,816 ) (5,816 )

Income taxes - - - - 18,284 18,284

Depreciation andamortization 22,926 27,654 17,981 68,561 - 68,561expense

Adjusted EBITDA ^ $ 84,217 $ 66,087 $ 25,499 $ 175,803 $ 2,593 $ 178,3965

Revenue $ 657,185 $ 484,958 $ 179,023 $ 1,321,166 - $ 1,321,166

Adjusted EBITDA 12.8 % 13.6 % 14.2 % 13.3 % NMP 13.5 %Margin ^5

Note: Adjusted EBITDA is a non-GAAP financial measure. The table above providesa reconciliation of adjusted EBITDA for each segment to net income attributableto H.B. Fuller for each segment, the most directly comparable financial measuredetermined and reported in accordance with U.S. GAAP.

NMP = Non-meaningful percentage

H.B. FULLER COMPANY AND SUBSIDIARIES

SEGMENT FINANCIAL INFORMATION

NET REVENUE GROWTH (DECLINE)

(unaudited)

Three Months Ended

Six Months Ended

May 29, 2021

May 29, 2021

Price

1.4

%

0.7

%

Volume

17.4

%

14.0

%

Organic Growth (Decline)11

18.8

%

14.7

%

M&A

0.0

%

0.0

%

F/X

3.9

%

2.8

%

Total H.B. Fuller Net Revenue Growth (Decline)

22.7

%

17.5

%

H.B. FULLER COMPANY AND SUBSIDIARIES

SEGMENT FINANCIAL INFORMATION

NET REVENUE GROWTH (DECLINE)

(unaudited)

Three Months Six Months Ended Ended

May 29, 2021 May 29, 2021

Price 1.4 % 0.7 %

Volume 17.4 % 14.0 %

Organic Growth (Decline)^11 18.8 % 14.7 %

M&A 0.0 % 0.0 %

F/X 3.9 % 2.8 %

Total H.B. Fuller Net Revenue Growth (Decline) 22.7 % 17.5 %

Revenue growth versus 2020

Three Months Ended

Six Months Ended

May 29, 2021

May 29, 2021

Net Revenue

Organic Growth11

Net Revenue

Organic Growth11

F/X and M&A

F/X and M&A

Hygiene, Health and Consumable Adhesives

5.8

%

2.5

%

3.3

%

6.6

%

1.2

%

5.4

%

Engineering Adhesives

46.3

%

6.6

%

39.7

%

35.7

%

5.5

%

30.2

%

Construction Adhesives

25.4

%

2.2

%

23.2

%

9.1

%

1.7

%

7.4

%

Total H.B. Fuller

22.7

%

3.9

%

18.8

%

17.5

%

2.8

%

14.7

%

Revenue growth Three Months Ended Six Months Ended versus 2020

May 29, 2021 May 29, 2021

Organic Organic Net Growth^ Net Growth^ Revenue F/X and 11 Revenue F/X and 11 M&A M&A

Hygiene, Healthand Consumable 5.8 % 2.5 % 3.3 % 6.6 % 1.2 % 5.4 %Adhesives

Engineering 46.3 % 6.6 % 39.7 % 35.7 % 5.5 % 30.2 %Adhesives

Construction 25.4 % 2.2 % 23.2 % 9.1 % 1.7 % 7.4 %Adhesives

Total H.B. 22.7 % 3.9 % 18.8 % 17.5 % 2.8 % 14.7 %Fuller

Revenue growth versus 2019

Three Months Ended

May 29, 2021

Organic Growth11

Net Revenue

F/X and M&A

Hygiene, Health and Consumable Adhesives

8.0

%

(2.3

)%

10.3

%

Engineering Adhesives

13.6

%

2.9

%

10.7

%

Construction Adhesives

5.3

%

1.1

%

4.2

%

Total H.B. Fuller

9.0

%

(0.5

)%

9.5

%

Three Months Ended Revenue growth versus 2019

May 29, 2021

Organic Net F/X and Growth^11 Revenue M&A

Hygiene, Health and Consumable Adhesives 8.0 % (2.3 )% 10.3 %

Engineering Adhesives 13.6 % 2.9 % 10.7 %

Construction Adhesives 5.3 % 1.1 % 4.2 %

Total H.B. Fuller 9.0 % (0.5 )% 9.5 %

11 We use the term "organic revenue" to refer to net revenue, excluding the effect of foreign currency changes and acquisitions and divestitures. Organic growth reflects adjustments for the impact of period-over-period changes in foreign currency exchange rates on revenues and the revenues associated with acquisitions and divestitures.

^11 We use the term "organic revenue" to refer to net revenue, excluding theeffect of foreign currency changes and acquisitions and divestitures. Organicgrowth reflects adjustments for the impact of period-over-period changes inforeign currency exchange rates on revenues and the revenues associated withacquisitions and divestitures.

H.B. FULLER COMPANY AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETIn thousands, except share and per share amounts (unaudited)

May 29,

November 28,

2021

2020

Assets

Current assets:

Cash and cash equivalents

$

69,597

$

100,534

Trade receivables (net of allowances of $11,486 and $12,905, as of May 29, 2021 and November 28, 2020, respectively)

583,270

514,916

Inventories

427,835

323,213

Other current assets

86,242

81,113

Total current assets

1,166,944

1,019,776

Property, plant and equipment

1,476,601

1,428,183

Accumulated depreciation

(795,025

)

(757,439

)

Property, plant and equipment, net

681,576

670,744

Goodwill

1,330,535

1,312,003

Other intangibles, net

732,760

755,968

Other assets

355,112

278,213

Total assets

$

4,266,927

$

4,036,704

Liabilities, non-controlling interest and total equity

Current liabilities:

Notes payable

$

26,857

$

16,925

Trade payables

433,515

316,460

Accrued compensation

75,902

83,598

Income taxes payable

28,074

29,173

Other accrued expenses

87,324

83,976

Total current liabilities

651,672

530,132

Long-term debt

1,685,553

1,756,985

Accrued pension liabilities

89,145

88,806

Other liabilities

277,345

278,919

Total liabilities

2,703,715

2,654,842

Equity:

H.B. Fuller stockholders' equity:

Preferred stock (no shares outstanding) shares authorized - 10,045,900

-

-

Common stock, par value $1.00 per share, shares authorized - 160,000,000, shares outstanding - 52,499,414 and 51,906,663, as of May 29, 2021 and November 28, 2020, respectively

52,499

51,907

Additional paid-in capital

190,243

157,867

Retained earnings

1,535,887

1,474,406

Accumulated other comprehensive loss

(215,997

)

(302,859

)

Total H.B. Fuller stockholders' equity

1,562,632

1,381,321

Non-controlling interest

580

541

Total equity

1,563,212

1,381,862

Total liabilities, non-controlling interest and total equity

$

4,266,927

$

4,036,704

H.B. FULLER COMPANY AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETIn thousands, except share and per share amounts (unaudited)

May 29, November 28,

2021 2020

Assets

Current assets:

Cash and cash equivalents $ 69,597 $ 100,534

Trade receivables (net of allowances of $11,486and $12,905, as of May 29, 2021 and November 583,270 514,91628, 2020, respectively)

Inventories 427,835 323,213

Other current assets 86,242 81,113

Total current assets 1,166,944 1,019,776



Property, plant and equipment 1,476,601 1,428,183

Accumulated depreciation (795,025 ) (757,439 )

Property, plant and equipment, net 681,576 670,744



Goodwill 1,330,535 1,312,003

Other intangibles, net 732,760 755,968

Other assets 355,112 278,213

Total assets $ 4,266,927 $ 4,036,704



Liabilities, non-controlling interest and total equity

Current liabilities:

Notes payable $ 26,857 $ 16,925

Trade payables 433,515 316,460

Accrued compensation 75,902 83,598

Income taxes payable 28,074 29,173

Other accrued expenses 87,324 83,976

Total current liabilities 651,672 530,132



Long-term debt 1,685,553 1,756,985

Accrued pension liabilities 89,145 88,806

Other liabilities 277,345 278,919

Total liabilities 2,703,715 2,654,842



Equity:

H.B. Fuller stockholders' equity:

Preferred stock (no shares outstanding) shares - -authorized - 10,045,900

Common stock, par value $1.00 per share, sharesauthorized - 160,000,000, shares outstanding - 52,499 51,90752,499,414 and 51,906,663, as of May 29, 2021and November 28, 2020, respectively

Additional paid-in capital 190,243 157,867

Retained earnings 1,535,887 1,474,406

Accumulated other comprehensive loss (215,997 ) (302,859 )

Total H.B. Fuller stockholders' equity 1,562,632 1,381,321

Non-controlling interest 580 541

Total equity 1,563,212 1,381,862

Total liabilities, non-controlling interest and $ 4,266,927 $ 4,036,704total equity

H.B. FULLER COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

In thousands (unaudited)

Six Months Ended

May 29, 2021

May 30, 2020

Cash flows from operating activities:

Net income including non-controlling interest

$

78,930

$

41,534

Adjustments to reconcile net income including non-controlling interest to net cash provided by operating activities:

Depreciation

35,976

33,198

Amortization

35,649

35,458

Deferred income taxes

(1,167

)

(10,412

)

Income from equity method investments, net of dividends received

(4,072

)

(3,527

)

Share-based compensation

12,486

9,236

Pension and other post-retirement benefit plan activity

(15,927

)

(2,993

)

Change in assets and liabilities, net of effects of acquisitions:

Trade receivables, net

(43,191)

33,867

Inventories

(100,358

)

(59,232

)

Other assets

(21,709

)

(13,070

)

Trade payables

115,488

42,182

Accrued compensation

(8,760

)

(21,587

)

Other accrued expenses

1,925

8,981

Income taxes payable

(1,513)

(2,728

)

Other liabilities

(28,980

)

24,705

Other

25,055

(7,199

)

Net cash provided by operating activities

79,832

108,413

Cash flows from investing activities:

Purchased property, plant and equipment

(50,726

)

(54,533

)

Purchased businesses, net of cash acquired

(5,445

)

(9,500

)

Purchase of assets

-

(3,998

)

Proceeds from sale of property, plant and equipment

1,237

1,416

Cash payments related to government grant

(1,526

)

(2,331

)

Net cash used in investing activities

(56,460

)

(68,946

)

Cash flows from financing activities:

Repayment of long-term debt

(68,000

)

(67,000

)

Net (payments) proceeds of notes payable

9,335

6,994

Dividends paid

(17,244

)

(16,577

)

Proceeds from stock options exercised

20,621

1,557

Repurchases of common stock

(2,628

)

(3,246

)

Net cash used in financing activities

(57,916

)

(78,272

)

Effect of exchange rate changes on cash and cash equivalents

3,607

(3,040

)

Net change in cash and cash equivalents

(30,937

)

(41,845

)

Cash and cash equivalents at beginning of period

100,534

112,191

Cash and cash equivalents at end of period

$

69,597

$

70,346

View source version on businesswire.com: https://www.businesswire.com/news/home/20210623005917/en/

CONTACT: Barbara Doyle Investor Relations contact 651-236-5023