Business Wire | Sep 22, 2021 04:07PM EDT

H.B. Fuller Reports Third Quarter 2021 Results

Sep. 22, 2021

ST. PAUL, Minn.--(BUSINESS WIRE)--Sep. 22, 2021--H.B. Fuller Company (NYSE: FUL) today reported financial results for its third quarter ended August 28, 2021.

Items of Note

* Net revenue increased 20% versus the third quarter of last year. Organic revenue increased 16%, with 10% from volume growth and 6% from pricing. * Organic revenue was up 13% when compared with the non-COVID-impacted third quarter of 2019. * Net income increased to $32 million; volume leverage, pricing and operating expense efficiencies offset higher raw material costs and drove a 5% year-over-year increase in adjusted EBITDA to $111 million, ahead of our expectations. * Earnings per diluted share (EPS) were $0.58; adjusted EPS of $0.79 increased 4% year over year. * Strategic supply chain management enabled the company to secure raw materials to meet increasing demand, and pricing actions have been implemented that are expected to restore margins in the fourth quarter and into 2022. * Year-to-date debt paydown of $110 million keeps the company on track to its $200 million debt reduction target for the full year.

Summary of Third Quarter 2021 Results

Net revenue of $827 million increased 20% compared with the third quarter of 2020. Foreign currency exchange rates favorably impacted revenue by 3%. Organic revenue, which excludes impacts from foreign currency translation, increased 16% versus last year, with double-digit organic growth in all three Global Business Units (GBUs). Organic revenue also significantly increased by 13% when compared with the non-COVID impacted third quarter of 2019, with strong organic growth in all three GBUs.

Gross profit was $194 million. Adjusted gross profit of $196 million increased 4% versus the same period last year. Adjusted gross profit margin declined year over year, as expected, as higher sales volume and pricing gains were offset by elevated raw material and freight costs. Selling, General and Administrative (SG&A) expense was $135 million. Adjusted SG&A expense of $129 million improved by 220 basis points as a percent of revenue versus the third quarter last year, resulting from strong volume leverage and general expense controls.

As a result of these factors, net income attributable to H.B. Fuller in the quarter was $32 million, or $0.58 per diluted share. Adjusted net income attributable to H.B. Fuller of $43 million and adjusted EPS of $0.79 increased by 7% and 4%, respectively, compared with $40 million and $0.76 in the same period last year. Adjusted EBITDA of $111 million increased 5% compared with $106 million in the prior year.

"H.B. Fuller delivered another strong quarter with double-digit organic revenue growth as we gained share in key market segments through innovative solutions, improved pricing and took decisive actions to secure raw materials and meet customer demand," said Jim Owens, H.B. Fuller's president and chief executive officer. "Throughout the quarter, we took strategic steps to serve customers in the face of ongoing raw material and packaging shortages as well as increasing inflationary pressures on logistics, freight, and labor. We have implemented $225 million of annualized pricing adjustments this year and recently announced additional price increases and a surcharge on global shipments effective September 1, 2021. We anticipate a significant improvement in margins in the fourth quarter as a result of these actions. As our business continues to demonstrate resilience, we are increasingly confident in our ability to create and deliver significant value for shareholders in any market environment. The actions that we have taken over the last nine months in support of our customers enables us to exit the year with strong margin momentum."

Other Financial Metrics

At the end of the third quarter of fiscal 2021, the company had cash and equivalents of $68 million and total debt equal to $1,664 million. This compares to cash and debt levels equal to $75 million and $1,869 million, respectively, at the end of the third quarter of 2020. Capital expenditures for the nine-month period were $77 million compared with $72 million in the same period last year.

Planning Assumptions

* Based on current assumptions, we have increased our estimated full-year revenue guidance. Full-year revenue growth is now anticipated to be 17% to 18% compared with fiscal 2020, resulting in anticipated fourth quarter revenue growth of 15% to 17% versus the fourth quarter of 2020. * For the fiscal year 2021, adjusted EBITDA is anticipated to be approximately $460 million to $470 million, an increase of 13% to 16% versus 2020, which is supported by 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 September 23, 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 September 23, 2021 through October 1, 2021. To access the telephone replay dial (800) 585-8367 or (416) 621-4642 and enter Conference ID: 1786575.

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 Ended

Percent of

Three Months Ended

Percent of

Aug. 28, 2021

Net Revenue

Aug. 29, 2020

Net Revenue

Net revenue

$

826,830

100.0

%

$

691,463

100.0

%

Cost of sales

(632,880

)

(76.5

)%

(503,619

)

(72.8

)%

Gross profit

193,950

23.5

%

187,844

27.2

%

Selling, general and administrative expenses

(134,497

)

(16.3

)%

(129,113

)

(18.7

)%

Other income, net

6,150

0.7

%

3,722

0.5

%

Interest expense

(19,396

)

(2.3

)%

(20,196

)

(2.9

)%

Interest income

2,520

0.3

%

2,945

0.4

%

Income before income taxes and income from equity method investments

48,727

5.9

%

45,202

6.5

%

Income taxes

(19,095

)

(2.3

)%

(5,112

)

(0.7

)%

Income from equity method investments

1,998

0.2

%

1,541

0.2

%

Net income including non-controlling interest

31,630

3.8

%

41,631

6.0

%

Net income attributable to non-controlling interest

(14

)

(0.0

)%

(24

)

(0.0

)%

Net income attributable to H.B. Fuller

$

31,616

3.8

%

$

41,607

6.0

%

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

$

0.60

$

0.80

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

$

0.58

$

0.79

Weighted-average common shares outstanding:

Basic

53,049

52,130

Diluted

54,646

52,591

Dividends declared per common share

$

0.168

$

0.163

Three Months Percent Three Months Percent Ended of Ended of

Aug. 28, Net Aug. 29, Net 2021 Revenue 2020 Revenue

Net revenue $ 826,830 100.0 % $ 691,463 100.0 %

Cost of sales (632,880 ) (76.5 ) (503,619 ) (72.8 ) % %

Gross profit 193,950 23.5 % 187,844 27.2 %



Selling, general and (134,497 ) (16.3 ) (129,113 ) (18.7 )administrative expenses % %

Other income, net 6,150 0.7 % 3,722 0.5 %

Interest expense (19,396 ) (2.3 ) (20,196 ) (2.9 ) % %

Interest income 2,520 0.3 % 2,945 0.4 %

Income before incometaxes and income from 48,727 5.9 % 45,202 6.5 %equity method investments



Income taxes (19,095 ) (2.3 ) (5,112 ) (0.7 ) % %



Income from equity method 1,998 0.2 % 1,541 0.2 %investments

Net income including 31,630 3.8 % 41,631 6.0 %non-controlling interest



Net income attributable ) )to non-controlling (14 ) (0.0 % (24 ) (0.0 %interest

Net income attributable $ 31,616 3.8 % $ 41,607 6.0 %to H.B. Fuller



Basic income per commonshare attributable to $ 0.60 $ 0.80 H.B. Fuller

Diluted income per commonshare attributable to $ 0.58 $ 0.79 H.B. Fuller



Weighted-average common shares outstanding:

Basic 53,049 52,130

Diluted 54,646 52,591



Dividends declared per $ 0.168 $ 0.163 common share

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

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

August 28, 2021

November 28, 2020

August 29, 2020

Cash & cash equivalents

$

68,134

$

100,534

$

74,922

Trade accounts receivable, net

572,855

514,916

476,099

Inventories

462,635

323,213

354,221

Trade payables

485,796

316,460

272,232

Total assets

4,258,272

4,036,704

3,981,725

Total debt

1,664,007

1,773,910

1,868,926

August 28, November 28, August 29, 2021 2020 2020

Cash & cash equivalents $ 68,134 $ 100,534 $ 74,922

Trade accounts receivable, 572,855 514,916 476,099 net

Inventories 462,635 323,213 354,221

Trade payables 485,796 316,460 272,232

Total assets 4,258,272 4,036,704 3,981,725

Total debt 1,664,007 1,773,910 1,868,926

H.B. FULLER COMPANY AND SUBSIDIARIES

CONSOLIDATED FINANCIAL INFORMATION

In thousands, except per share amounts (unaudited)

Nine Months Ended August 28, 2021

Percent of Net Revenue

Nine Months Ended August 29, 2020

Percent of Net Revenue

Net revenue

$

2,380,607

100.0

%

$

2,012,629

100.0

%

Cost of sales

(1,776,744

)

(74.6

)%

(1,469,622

)

(73.0

)%

Gross profit

603,863

25.4

%

543,007

27.0

%

Selling, general and administrative expenses

(426,921

)

(17.9

)%

(398,620

)

(19.8

)%

Other income, net

25,899

1.1

%

11,740

0.6

%

Interest expense

(59,699

)

(2.5

)%

(64,597

)

(3.2

)%

Interest income

7,709

0.3

%

8,761

0.4

%

Income before income taxes and income from equity method investments

150,851

6.3

%

100,291

5.0

%

Income taxes

(46,362

)

(1.9

)%

(22,194

)

(1.1

)%

Income from equity method investments

6,071

0.3

%

5,068

0.3

%

Net income including non-controlling interest

110,560

4.6

%

83,165

4.1

%

Net income attributable to non-controlling interest

(51

)

(0.0

)%

(50

)

(0.0

)%

Net income attributable to H.B. Fuller

$

110,509

4.6

%

$

83,115

4.1

%

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

$

2.09

$

1.60

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

$

2.04

$

1.59

Weighted-average common shares outstanding:

Basic

52,794

51,959

Diluted

54,093

52,400

Dividends declared per common share

$

0.498

$

0.485

H.B. FULLER COMPANY AND SUBSIDIARIES

CONSOLIDATED FINANCIAL INFORMATION

In thousands, except per share amounts (unaudited)

Nine Months Percent Nine Months Percent Ended of Ended of August 28, Net August 29, Net 2021 Revenue 2020 Revenue

Net revenue $ 2,380,607 100.0 % $ 2,012,629 100.0 %

Cost of sales (1,776,744 ) (74.6 ) (1,469,622 ) (73.0 ) % %

Gross profit 603,863 25.4 % 543,007 27.0 %



Selling, general and ) )administrative (426,921 ) (17.9 % (398,620 ) (19.8 %expenses



Other income, net 25,899 1.1 % 11,740 0.6 %

Interest expense (59,699 ) (2.5 ) (64,597 ) (3.2 ) % %

Interest income 7,709 0.3 % 8,761 0.4 %

Income before incometaxes and income from 150,851 6.3 % 100,291 5.0 %equity methodinvestments



Income taxes (46,362 ) (1.9 ) (22,194 ) (1.1 ) % %



Income from equity 6,071 0.3 % 5,068 0.3 %method investments

Net income includingnon-controlling 110,560 4.6 % 83,165 4.1 %interest



Net incomeattributable to (51 ) (0.0 ) (50 ) (0.0 )non-controlling % %interest

Net incomeattributable to H.B. $ 110,509 4.6 % $ 83,115 4.1 %Fuller





Basic income percommon share $ 2.09 $ 1.60 attributable to H.B.Fuller

Diluted income percommon share $ 2.04 $ 1.59 attributable to H.B.Fuller



Weighted-averagecommon shares outstanding:

Basic 52,794 51,959

Diluted 54,093 52,400



Dividends declared $ 0.498 $ 0.485 per common share

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

Nine Months Ended

August 28,

August 29,

August 28,

August 29,

2021

2020

2021

2020

Net income attributable to H.B. Fuller

$

31,616

$

41,607

$

110,509

$

83,115

Adjustments:

Acquisition project costs

901

(73

)

2,277

(1,584

)

Organizational realignment1

3,087

3,308

9,029

8,286

Royal restructuring and integration2

1,016

1,790

3,537

7,379

Tax reform

-

-

-

(35

)

Project One

2,305

1,602

6,469

4,141

Other3

111

654

(3,701

)

1,725

Discrete tax items4

5,626

(7,183

)

5,068

(5,129

)

Income tax effect on adjustments5

(1,746

)

(1,755

)

(4,359

)

(5,012

)

Adjusted net income attributable to H.B. Fuller6

42,916

39,950

128,829

92,886

Add:

Interest expense

19,412

20,220

59,769

64,650

Interest income

(2,520

)

(2,945

)

(7,709

)

(8,761

)

Income taxes

15,216

14,050

45,653

32,335

Depreciation and Amortization expense7

35,705

34,432

106,596

102,992

Adjusted EBITDA6

110,729

105,707

333,138

284,102

Diluted Shares

54,646

52,591

54,093

52,400

Adjusted diluted income per common share attributable to H.B. Fuller6

$

0.79

$

0.76

$

2.38

$

1.77

Revenue

$

826,830

$

691,463

$

2,380,607

$

2,012,629

Adjusted EBITDA margin6

13.4

%

15.3

%

14.0

%

14.1

%

Three Months Ended Nine Months Ended

August 28, August 29, August 28, August 29,

2021 2020 2021 2020

Net incomeattributable to $ 31,616 $ 41,607 $ 110,509 $ 83,115 H.B. Fuller



Adjustments:

Acquisition project 901 (73 ) 2,277 (1,584 )costs

Organizational 3,087 3,308 9,029 8,286 realignment^1

Royal restructuring 1,016 1,790 3,537 7,379 and integration^2

Tax reform - - - (35 )

Project One 2,305 1,602 6,469 4,141

Other^3 111 654 (3,701 ) 1,725

Discrete tax items^ 5,626 (7,183 ) 5,068 (5,129 )4

Income tax effect (1,746 ) (1,755 ) (4,359 ) (5,012 )on adjustments^5

Adjusted net incomeattributable to 42,916 39,950 128,829 92,886 H.B. Fuller^6



Add:

Interest expense 19,412 20,220 59,769 64,650

Interest income (2,520 ) (2,945 ) (7,709 ) (8,761 )

Income taxes 15,216 14,050 45,653 32,335

Depreciation andAmortization 35,705 34,432 106,596 102,992 expense^7

Adjusted EBITDA^6 110,729 105,707 333,138 284,102



Diluted Shares 54,646 52,591 54,093 52,400

Adjusted dilutedincome per common $ 0.79 $ 0.76 $ 2.38 $ 1.77 share attributableto H.B. Fuller^6

Revenue $ 826,830 $ 691,463 $ 2,380,607 $ 2,012,629

Adjusted EBITDA 13.4 % 15.3 % 14.0 % 14.1 %margin^6

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 nine months ended August 28, 2021 includes one-time, non-cash gains related to a transactional tax legal settlement in Brazil and a legal entity merger.

4 Includes adjustment of $5,626 of discrete tax expense in the quarter ended August 28, 2021 relating to the revaluation of cross-currency swap agreements due to depreciation of the Euro versus U.S. dollar and various foreign tax matters. Includes adjustment of ($7,183) of discrete tax benefit in the quarter ended August 29, 2020 relating to the revaluation of cross-currency swap agreements due to appreciation of the Euro versus U.S. dollar and various foreign tax matters.

5 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.

6 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.

7 Depreciation and amortization expense added back for EBITDA is adjusted for amounts already included in Adjusted net income attributable to H.B. Fuller totaling ($292) and ($413) for the three months ended August 28, 2021 and August 29, 2020, respectively and ($1,026) and ($509) for the nine months ended August 28, 2021 and August 29, 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 nine months ended August 28, 2021 includes one-time, non-cashgains related to a transactional tax legal settlement in Brazil and a legalentity merger.

^4 Includes adjustment of $5,626 of discrete tax expense in the quarter endedAugust 28, 2021 relating to the revaluation of cross-currency swap agreementsdue to depreciation of the Euro versus U.S. dollar and various foreign taxmatters. Includes adjustment of ($7,183) of discrete tax benefit in the quarterended August 29, 2020 relating to the revaluation of cross-currency swapagreements due to appreciation of the Euro versus U.S. dollar and variousforeign tax matters.

^5 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.

^6 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.

^7 Depreciation and amortization expense added back for EBITDA is adjusted foramounts already included in Adjusted net income attributable to H.B. Fullertotaling ($292) and ($413) for the three months ended August 28, 2021 andAugust 29, 2020, respectively and ($1,026) and ($509) for the nine months endedAugust 28, 2021 and August 29, 2020, respectively.

H.B. FULLER COMPANY AND SUBSIDIARIES

SEGMENT FINANCIAL INFORMATION

In thousands (unaudited)

H.B. FULLER COMPANY AND SUBSIDIARIES

SEGMENT FINANCIAL INFORMATION

In thousands (unaudited)

Three Months Ended

Nine Months Ended

August 28,

August 29,

August 28,

August 29,

2021

2020

2021

2020

Net Revenue:

Hygiene, Health and Consumable Adhesives

$

369,439

$

320,187

$

1,069,922

$

977,373

Engineering Adhesives

342,300

276,083

1,000,337

761,040

Construction Adhesives

115,091

95,193

310,348

274,216

Corporate unallocated

-

-

-

-

Total H.B. Fuller

$

826,830

$

691,463

$

2,380,607

$

2,012,629

Segment Operating Income:

Hygiene, Health and Consumable Adhesives

$

29,652

$

31,883

$

98,493

$

89,556

Engineering Adhesives

34,087

29,873

96,580

65,386

Construction Adhesives

3,339

4,284

4,974

9,436

Corporate unallocated

(7,625

)

(7,309

)

(23,105

)

(19,991

)

Total H.B. Fuller

$

59,453

$

58,731

$

176,942

$

144,387

Adjusted EBITDA6

Hygiene, Health and Consumable Adhesives

$

44,496

$

43,697

$

142,671

$

127,914

Engineering Adhesives

52,001

46,831

150,034

112,918

Construction Adhesives

14,247

14,394

37,785

39,893

Corporate unallocated

(15

)

785

2,648

3,377

Total H.B. Fuller

$

110,729

$

105,707

$

333,138

$

284,102

Adjusted EBITDA Margin6

Hygiene, Health and Consumable Adhesives

12.0

%

13.6

%

13.3

%

13.1

%

Engineering Adhesives

15.2

%

17.0

%

15.0

%

14.8

%

Construction Adhesives

12.4

%

15.1

%

12.2

%

14.5

%

Corporate unallocated

NMP

NMP

NMP

NMP

Total H.B. Fuller

13.4

%

15.3

%

14.0

%

14.1

%

NMP = non-meaningful percentage

Three Months Ended Nine Months Ended

August 28, August 29, August 28, August 29,

2021 2020 2021 2020

Net Revenue:

Hygiene, Health andConsumable $ 369,439 $ 320,187 $ 1,069,922 $ 977,373 Adhesives

Engineering 342,300 276,083 1,000,337 761,040 Adhesives

Construction 115,091 95,193 310,348 274,216 Adhesives

Corporate - - - - unallocated

Total H.B. Fuller $ 826,830 $ 691,463 $ 2,380,607 $ 2,012,629



Segment Operating Income:

Hygiene, Health andConsumable $ 29,652 $ 31,883 $ 98,493 $ 89,556 Adhesives

Engineering 34,087 29,873 96,580 65,386 Adhesives

Construction 3,339 4,284 4,974 9,436 Adhesives

Corporate (7,625 ) (7,309 ) (23,105 ) (19,991 )unallocated

Total H.B. Fuller $ 59,453 $ 58,731 $ 176,942 $ 144,387



Adjusted EBITDA^6

Hygiene, Health andConsumable $ 44,496 $ 43,697 $ 142,671 $ 127,914 Adhesives

Engineering 52,001 46,831 150,034 112,918 Adhesives

Construction 14,247 14,394 37,785 39,893 Adhesives

Corporate (15 ) 785 2,648 3,377 unallocated

Total H.B. Fuller $ 110,729 $ 105,707 $ 333,138 $ 284,102



Adjusted EBITDA Margin^6

Hygiene, Health andConsumable 12.0 % 13.6 % 13.3 % 13.1 %Adhesives

Engineering 15.2 % 17.0 % 15.0 % 14.8 %Adhesives

Construction 12.4 % 15.1 % 12.2 % 14.5 %Adhesives

Corporate NMP NMP NMP NMP unallocated

Total H.B. Fuller 13.4 % 15.3 % 14.0 % 14.1 %



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

Nine Months Ended

August 28,

August 29,

August 28,

August 29,

2021

2020

2021

2020

Income before income taxes and income from equity method investments

$

48,727

$

45,202

$

150,851

$

100,291

Adjustments:

Acquisition project costs

901

(73

)

2,277

(1,584

)

Organizational realignment

3,087

3,308

9,029

8,286

Royal restructuring and integration

1,016

1,790

3,537

7,379

Tax reform

-

-

-

(35

)

Project One

2,305

1,602

6,469

4,141

Other3

111

654

(3,701

)

1,725

Adjusted income before income taxes and income from equity method investments8

$

56,147

$

52,483

$

168,462

$

120,203

Three Months Ended Nine Months Ended

August 28, August 29, August 28, August 29,

2021 2020 2021 2020

Income before incometaxes and income from $ 48,727 $ 45,202 $ 150,851 $ 100,291 equity method investments



Adjustments:

Acquisition project costs 901 (73 ) 2,277 (1,584 )

Organizational 3,087 3,308 9,029 8,286 realignment

Royal restructuring and 1,016 1,790 3,537 7,379 integration

Tax reform - - - (35 )

Project One 2,305 1,602 6,469 4,141

Other^3 111 654 (3,701 ) 1,725

Adjusted income beforeincome taxes and income $ 56,147 $ 52,483 $ 168,462 $ 120,203 from equity methodinvestments^8

8 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.

^8 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)

H.B. FULLER COMPANY AND SUBSIDIARIES

REGULATION G RECONCILIATION

In thousands, except per share amounts (unaudited)

Three Months Ended

Nine Months Ended

August 28,

August 29,

August 28,

August 29,

2021

2020

2021

2020

Income Taxes

$

(19,095

)

$

(5,112

)

$

(46,362

)

$

(22,194

)

Adjustments:

Acquisition project costs

(212

)

18

(495

)

423

Organizational realignment

(726

)

(797

)

(2,204

)

(2,087

)

Royal restructuring and integration

(239

)

(431

)

(846

)

(1,877

)

Tax reform

-

-

-

9

Project One

(542

)

(386

)

(1,551

)

(1,043

)

Other4

5,598

(7,342

)

5,805

(5,566

)

Adjusted income taxes9

$

(15,216

)

$

(14,050

)

$

(45,653

)

$

(32,335

)

Adjusted income before income taxes and income from equity method investments

$

56,147

$

52,483

$

168,462

$

120,203

Adjusted effective income tax rate9

27.1

%

26.8

%

27.1

%

26.9

%

Three Months Ended Nine Months Ended

August 28, August 29, August 28, August 29,

2021 2020 2021 2020

Income Taxes $ (19,095 ) $ (5,112 ) $ (46,362 ) $ (22,194 )



Adjustments:

Acquisition project (212 ) 18 (495 ) 423 costs

Organizational (726 ) (797 ) (2,204 ) (2,087 )realignment

Royal restructuring and (239 ) (431 ) (846 ) (1,877 )integration

Tax reform - - - 9

Project One (542 ) (386 ) (1,551 ) (1,043 )

Other^4 5,598 (7,342 ) 5,805 (5,566 )

Adjusted income taxes^9 $ (15,216 ) $ (14,050 ) $ (45,653 ) $ (32,335 )



Adjusted income beforeincome taxes and income $ 56,147 $ 52,483 $ 168,462 $ 120,203 from equity methodinvestments

Adjusted effective 27.1 % 26.8 % 27.1 % 26.9 %income tax rate^9

9 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.

^9 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)

H.B. FULLER COMPANY AND SUBSIDIARIES

REGULATION G RECONCILIATION

In thousands (unaudited)

Three Months Ended

Nine Months Ended

August 28,

August 29,

August 28,

August 29,

2021

2020

2021

2020

Net revenue

$

826,830

$

691,463

$

2,380,607

$

2,012,629

Gross profit

$

193,950

$

187,844

$

603,863

$

543,007

Gross profit margin

23.5

%

27.2

%

25.4

%

27.0

%

Adjustments:

Acquisition project costs

1

-

64

-

Organizational realignment

1,472

(204

)

2,265

(53

)

Royal restructuring and integration

644

1,132

1,962

2,730

Project ONE

(22

)

-

(22

)

-

Other

247

272

1,635

1,263

Adjusted gross profit10

$

196,292

$

189,044

$

609,767

$

546,947

Adjusted gross profit margin10

23.7

%

27.3

%

25.6

%

27.2

%

Three Months Ended Nine Months Ended

August 28, August 29, August 28, August 29,

2021 2020 2021 2020



Net revenue $ 826,830 $ 691,463 $ 2,380,607 $ 2,012,629



Gross profit $ 193,950 $ 187,844 $ 603,863 $ 543,007

Gross profit margin 23.5 % 27.2 % 25.4 % 27.0 %



Adjustments:

Acquisition project 1 - 64 - costs

Organizational 1,472 (204 ) 2,265 (53 )realignment

Royal restructuring 644 1,132 1,962 2,730 and integration

Project ONE (22 ) - (22 ) -

Other 247 272 1,635 1,263

Adjusted gross $ 196,292 $ 189,044 $ 609,767 $ 546,947 profit^10

Adjusted gross 23.7 % 27.3 % 25.6 % 27.2 %profit margin^10

10 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.

^10 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)

H.B. FULLER COMPANY AND SUBSIDIARIES

REGULATION G RECONCILIATION

In thousands (unaudited)

Three Months Ended

Nine Months Ended

August 28,

August 29,

August 28,

August 29,

2021

2020

2021

2020

Selling, general and administrative expenses

$

(134,497

)

$

(129,113

)

$

(426,921

)

$

(398,620

)

Adjustments:

Acquisition project costs

901

(73

)

2,214

(1,584

)

Organizational realignment

1,614

3,516

6,819

8,342

Royal restructuring and integration

388

682

1,644

4,725

Tax reform

-

-

-

(35

)

Project ONE

2,327

1,602

6,491

4,142

Other

55

382

32

462

Adjusted selling, general and administrative expenses11

$

(129,212

)

$

(123,004

)

$

(409,721

)

$

(382,568

)

Three Months Ended Nine Months Ended

August 28, August 29, August 28, August 29,

2021 2020 2021 2020



Selling, generaland administrative $ (134,497 ) $ (129,113 ) $ (426,921 ) $ (398,620 )expenses



Adjustments:

Acquisition project 901 (73 ) 2,214 (1,584 )costs

Organizational 1,614 3,516 6,819 8,342 realignment

Royal restructuring 388 682 1,644 4,725 and integration

Tax reform - - - (35 )

Project ONE 2,327 1,602 6,491 4,142

Other 55 382 32 462

Adjusted selling,general and $ (129,212 ) $ (123,004 ) $ (409,721 ) $ (382,568 )administrativeexpenses^11

11 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.

^11 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)

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

August 28, 2021

Adhesives

Adhesives

Adhesives

Total

Unallocated

Consolidated

Net income attributable to H.B. Fuller

$

32,924

$

36,599

$

5,516

$

75,039

$

(43,423

)

$

31,616

Adjustments:

Acquisition project costs

-

-

-

-

901

901

Organizational realignment

-

-

-

-

3,087

3,087

Royal Restructuring

-

-

-

-

1,016

1,016

Project One

-

-

-

-

2,305

2,305

Other3

-

-

-

-

111

111

Discrete tax items4

-

-

-

-

5,626

5,626

Income tax effect on adjustments5

-

-

-

-

(1,746

)

(1,746

)

Adjusted net income attributable to H.B. Fuller6

32,924

36,599

5,516

75,039

(32,123

)

42,916

Add:

Interest expense

-

-

-

-

19,412

19,412

Interest income

-

-

-

-

(2,520

)

(2,520

)

Income taxes

-

-

-

-

15,216

15,216

Depreciation and amortization expense

11,572

15,402

8,731

35,705

-

35,705

Adjusted EBITDA6

$

44,496

$

52,001

$

14,247

$

110,744

$

(15

)

$

110,729

Revenue

$

369,439

$

342,300

$

115,091

$

826,830

-

$

826,830

Adjusted EBITDA Margin6

12.0

%

15.2

%

12.4

%

13.4

%

NMP

13.4

%

Hygiene, Health

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

August 28, Adhesives Adhesives Adhesives Total Unallocated Consolidated2021

Net incomeattributable $ 32,924 $ 36,599 $ 5,516 $ 75,039 $ (43,423 ) $ 31,616 to H.B. Fuller

Adjustments:

Acquisition - - - - 901 901 project costs

Organizational - - - - 3,087 3,087 realignment

Royal - - - - 1,016 1,016 Restructuring

Project One - - - - 2,305 2,305

Other^3 - - - - 111 111

Discrete tax - - - - 5,626 5,626 items^4

Income taxeffect on - - - - (1,746 ) (1,746 )adjustments^5

Adjusted netincomeattributable 32,924 36,599 5,516 75,039 (32,123 ) 42,916 to H.B. Fuller^6

Add:

Interest - - - - 19,412 19,412 expense

Interest - - - - (2,520 ) (2,520 )income

Income taxes - - - - 15,216 15,216

Depreciationand 11,572 15,402 8,731 35,705 - 35,705 amortizationexpense

Adjusted $ 44,496 $ 52,001 $ 14,247 $ 110,744 $ (15 ) $ 110,729 EBITDA^6

Revenue $ 369,439 $ 342,300 $ 115,091 $ 826,830 - $ 826,830

AdjustedEBITDA Margin^ 12.0 % 15.2 % 12.4 % 13.4 % NMP 13.4 %6

Hygiene, Health

Nine Months Ended

and Consumable

Engineering

Construction

Corporate

H.B. Fuller

August 28, 2021

Adhesives

Adhesives

Adhesives

Total

Unallocated

Consolidated

Net income attributable to H.B. Fuller

$

108,291

$

104,099

$

11,504

$

223,894

$

(113,385

)

$

110,509

Adjustments:

Acquisition project costs

-

-

-

-

2,277

2,277

Organizational realignment

-

-

-

-

9,029

9,029

Royal Restructuring

-

-

-

-

3,537

3,537

Project One

-

-

-

-

6,469

6,469

Other3

-

-

-

-

(3,701

)

(3,701

)

Discrete tax items4

-

-

-

-

5,068

5,068

Income tax effect on adjustments5

-

-

-

-

(4,359

)

(4,359

)

Adjusted net income attributable to H.B. Fuller6

108,291

104,099

11,504

223,894

(95,065

)

128,829

Add:

Interest expense

-

-

-

-

59,769

59,769

Interest income

-

-

-

-

(7,709

)

(7,709

)

Income taxes

-

-

-

-

45,653

45,653

Depreciation and amortization expense

34,380

45,935

26,281

106,596

-

106,596

Adjusted EBITDA6

$

142,671

$

150,034

$

37,785

$

330,490

$

2,648

$

333,138

Revenue

1,069,922

1,000,337

310,348

2,380,607

-

2,380,607

Adjusted EBITDA Margin6

13.3

%

15.0

%

12.2

%

13.9

%

NMP

14.0

%

Hygiene, Health

Nine Months and Engineering Construction Corporate H.B. FullerEnded Consumable

August 28, Adhesives Adhesives Adhesives Total Unallocated Consolidated2021

Net incomeattributable $ 108,291 $ 104,099 $ 11,504 $ 223,894 $ (113,385 ) $ 110,509 to H.B. Fuller

Adjustments:

Acquisition - - - - 2,277 2,277 project costs

Organizational - - - - 9,029 9,029 realignment

Royal - - - - 3,537 3,537 Restructuring

Project One - - - - 6,469 6,469

Other^3 - - - - (3,701 ) (3,701 )

Discrete tax - - - - 5,068 5,068 items^4

Income taxeffect on - - - - (4,359 ) (4,359 )adjustments^5

Adjusted netincomeattributable 108,291 104,099 11,504 223,894 (95,065 ) 128,829 to H.B. Fuller^6

Add:

Interest - - - - 59,769 59,769 expense

Interest - - - - (7,709 ) (7,709 )income

Income taxes - - - - 45,653 45,653

Depreciationand 34,380 45,935 26,281 106,596 - 106,596 amortizationexpense

Adjusted $ 142,671 $ 150,034 $ 37,785 $ 330,490 $ 2,648 $ 333,138 EBITDA^6

Revenue 1,069,922 1,000,337 310,348 2,380,607 - 2,380,607

AdjustedEBITDA Margin^ 13.3 % 15.0 % 12.2 % 13.9 % NMP 14.0 %6

H.B. FULLER COMPANY AND SUBSIDIARIES

REGULATION G RECONCILIATION

In thousands (unaudited)

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

August 29, 2020

Adhesives

Adhesives

Adhesives

Total

Unallocated

Consolidated

Net income attributable to H.B. Fuller

$

33,688

$

31,334

$

5,468

$

70,490

$

(28,883

)

$

41,607

Adjustments:

Acquisition project costs

-

-

-

-

(73

)

(73

)

Organizational realignment

-

-

-

-

3,308

3,308

Royal Restructuring

-

-

-

-

1,790

1,790

Project One

-

-

-

-

1,602

1,602

Other3

-

-

-

-

654

654

Discrete tax items4

-

-

-

-

(7,183

)

(7,183

)

Income tax effect on adjustments5

-

-

-

-

(1,755

)

(1,755

)

Adjusted net income attributable to H.B. Fuller6

33,688

31,334

5,468

70,490

(30,540

)

39,950

Add:

Interest expense

-

-

-

-

20,220

20,220

Interest income

-

-

-

-

(2,945

)

(2,945

)

Income taxes

-

-

-

-

14,050

14,050

Depreciation and amortization expense

10,009

15,497

8,926

34,432

-

34,432

Adjusted EBITDA6

$

43,697

$

46,831

$

14,394

$

104,922

$

785

$

105,707

Revenue

$

320,187

$

276,083

$

95,193

$

691,463

-

$

691,463

Adjusted EBITDA Margin6

13.6

%

17.0

%

15.1

%

15.2

%

NMP

15.3

%

Hygiene, Health

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

August 29, Adhesives Adhesives Adhesives Total Unallocated Consolidated2020

Net incomeattributable $ 33,688 $ 31,334 $ 5,468 $ 70,490 $ (28,883 ) $ 41,607 to H.B. Fuller

Adjustments:

Acquisition - - - - (73 ) (73 )project costs

Organizational - - - - 3,308 3,308 realignment

Royal - - - - 1,790 1,790 Restructuring

Project One - - - - 1,602 1,602

Other^3 - - - - 654 654

Discrete tax - - - - (7,183 ) (7,183 )items^4

Income taxeffect on - - - - (1,755 ) (1,755 )adjustments^5

Adjusted netincomeattributable 33,688 31,334 5,468 70,490 (30,540 ) 39,950 to H.B. Fuller^6

Add:

Interest - - - - 20,220 20,220 expense

Interest - - - - (2,945 ) (2,945 )income

Income taxes - - - - 14,050 14,050

Depreciationand 10,009 15,497 8,926 34,432 - 34,432 amortizationexpense

Adjusted $ 43,697 $ 46,831 $ 14,394 $ 104,922 $ 785 $ 105,707 EBITDA^6

Revenue $ 320,187 $ 276,083 $ 95,193 $ 691,463 - $ 691,463

AdjustedEBITDA Margin^ 13.6 % 17.0 % 15.1 % 15.2 % NMP 15.3 %6

Nine Months Ended

Hygiene, Health and Consumable

Engineering

Construction

Corporate

H.B. Fuller

August 29, 2020

Adhesives

Adhesives

Adhesives

Total

Unallocated

Consolidated

Net income attributable to H.B. Fuller

$

94,979

$

69,767

$

12,987

$

177,733

$

(94,618

)

$

83,115

Adjustments:

Acquisition project costs

-

-

-

-

(1,584

)

(1,584

)

Organizational realignment

-

-

-

-

8,286

8,286

Royal Restructuring

-

-

-

-

7,379

7,379

Tax reform

-

-

-

-

(35

)

(35

)

Project One

-

-

-

-

4,141

4,141

Other3

-

-

-

-

1,725

1,725

Discrete tax items4

-

-

-

-

(5,129

)

(5,129

)

Income tax effect on adjustments5

-

-

-

-

(5,012

)

(5,012

)

Adjusted net income attributable to H.B. Fuller6

94,979

69,767

12,987

177,733

(84,847

)

92,886

Add:

Interest expense

-

-

-

-

64,650

64,650

Interest income

-

-

-

-

(8,761

)

(8,761

)

Income taxes

-

-

-

-

32,335

32,335

Depreciation and amortization expense

32,935

43,151

26,906

102,992

-

102,992

Adjusted EBITDA6

$

127,914

$

112,918

$

39,893

$

280,725

$

3,377

$

284,102

Revenue

$

977,373

$

761,040

$

274,216

$

2,012,629

-

$

2,012,629

Adjusted EBITDA Margin5

13.1

%

14.8

%

14.5

%

13.9

%

NMP

14.1

%



Hygiene,Nine Months Health Engineering Construction Corporate H.B. FullerEnded and Consumable

August 29, Adhesives Adhesives Adhesives Total Unallocated Consolidated2020

Net incomeattributable $ 94,979 $ 69,767 $ 12,987 $ 177,733 $ (94,618 ) $ 83,115 to H.B. Fuller

Adjustments:

Acquisition - - - - (1,584 ) (1,584 )project costs

Organizational - - - - 8,286 8,286 realignment

Royal - - - - 7,379 7,379 Restructuring

Tax reform - - - - (35 ) (35 )

Project One - - - - 4,141 4,141

Other^3 - - - - 1,725 1,725

Discrete tax - - - - (5,129 ) (5,129 )items^4

Income taxeffect on - - - - (5,012 ) (5,012 )adjustments^5

Adjusted netincomeattributable 94,979 69,767 12,987 177,733 (84,847 ) 92,886 to H.B. Fuller^6

Add:

Interest - - - - 64,650 64,650 expense

Interest - - - - (8,761 ) (8,761 )income

Income taxes - - - - 32,335 32,335

Depreciationand 32,935 43,151 26,906 102,992 - 102,992 amortizationexpense

Adjusted $ 127,914 $ 112,918 $ 39,893 $ 280,725 $ 3,377 $ 284,102 EBITDA^6

Revenue $ 977,373 $ 761,040 $ 274,216 $ 2,012,629 - $ 2,012,629

AdjustedEBITDA Margin^ 13.1 % 14.8 % 14.5 % 13.9 % NMP 14.1 %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

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

(unaudited)

H.B. FULLER COMPANY AND SUBSIDIARIES

SEGMENT FINANCIAL INFORMATION

NET REVENUE GROWTH

(unaudited)

Three Months Ended

Nine Months Ended

August 28, 2021

August 28, 2021

Price

6.3

%

2.6

%

Volume

10.1

%

12.7

%

Organic Growth12

16.4

%

15.3

%

F/X

3.2

%

3.0

%

Total H.B. Fuller Net Revenue Growth

19.6

%

18.3

%

Three Months Nine Months Ended Ended

August 28, 2021 August 28, 2021

Price 6.3 % 2.6 %

Volume 10.1 % 12.7 %

Organic Growth^12 16.4 % 15.3 %

F/X 3.2 % 3.0 %

Total H.B. Fuller Net Revenue Growth 19.6 % 18.3 %

Revenue growth versus 2020

Three Months Ended

Nine Months Ended

August 28, 2021

August 28, 2021

Net Revenue

F/X

Organic Growth11

Net Revenue

F/X

Organic Growth11

Hygiene, Health and Consumable Adhesives

15.4

%

2.4

%

13.0

%

9.5

%

1.6

%

7.9

%

Engineering Adhesives

24.0

%

4.8

%

19.2

%

31.4

%

5.3

%

26.1

%

Construction Adhesives

20.9

%

1.4

%

19.5

%

13.2

%

1.6

%

11.6

%

Total H.B. Fuller

19.6

%

3.2

%

16.4

%

18.3

%

3.0

%

15.3

%

Revenuegrowth Three Months Ended Nine Months Endedversus 2020

August 28, 2021 August 28, 2021

Net Organic Net Organic Revenue F/X Growth^ Revenue F/X Growth^ 11 11

Hygiene,Health and 15.4 % 2.4 % 13.0 % 9.5 % 1.6 % 7.9 %ConsumableAdhesives

Engineering 24.0 % 4.8 % 19.2 % 31.4 % 5.3 % 26.1 %Adhesives

Construction 20.9 % 1.4 % 19.5 % 13.2 % 1.6 % 11.6 %Adhesives

Total H.B. 19.6 % 3.2 % 16.4 % 18.3 % 3.0 % 15.3 %Fuller

Revenue growth versus 2019

Three Months Ended

Nine Months Ended

August 28, 2021

August 28, 2021

Net Revenue

F/X and M&A

Organic Growth11

Net Revenue

F/X and M&A

Organic Growth11

Hygiene, Health and Consumable Adhesives

12.5%

(1.2%)

13.7

%

8.5%

(2.0%)

10.5

%

Engineering Adhesives

19.4%

3.8%

15.6

%

17.0%

3.2%

13.8

%

Construction Adhesives

6.2%

1.2%

5.0

%

2.4%

1.0%

1.4

%

Total H.B. Fuller

14.0%

0.9%

13.1

%

10.3%

(0.2%)

10.5

%

Revenuegrowth Three Months Ended Nine Months Endedversus 2019

August 28, 2021 August 28, 2021

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

Hygiene,Health and 12.5% (1.2%) 13.7 % 8.5% (2.0%) 10.5 %ConsumableAdhesives

Engineering 19.4% 3.8% 15.6 % 17.0% 3.2% 13.8 %Adhesives

Construction 6.2% 1.2% 5.0 % 2.4% 1.0% 1.4 %Adhesives

Total H.B. 14.0% 0.9% 13.1 % 10.3% (0.2%) 10.5 %Fuller

12 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.

^12 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.

CONSOLIDATED BALANCE SHEETS

H.B. FULLER COMPANY AND SUBSIDIARIES

(In thousands, except share and per share amounts)

August 28,

November 28,

2021

2020

Assets

Current assets:

Cash and cash equivalents

$

68,134

$

100,534

Trade receivables (net of allowances of $9,139 and $12,905, as of August 28, 2021 and November 28, 2020, respectively)

572,855

514,916

Inventories

462,635

323,213

Other current assets

100,834

81,113

Total current assets

1,204,458

1,019,776

Property, plant and equipment

1,476,158

1,428,183

Accumulated depreciation

(800,266

)

(757,439

)

Property, plant and equipment, net

675,892

670,744

Goodwill

1,313,824

1,312,003

Other intangibles, net

710,127

755,968

Other assets

353,971

278,213

Total assets

$

4,258,272

$

4,036,704

Liabilities, non-controlling interest and total equity

Current liabilities:

Notes payable

$

27,313

$

16,925

Trade payables

485,796

316,460

Accrued compensation

82,129

83,598

Income taxes payable

32,079

29,173

Other accrued expenses

82,417

83,976

Total current liabilities

709,734

530,132

Long-term debt

1,636,694

1,756,985

Accrued pension liabilities

86,954

88,806

Other liabilities

257,034

278,919

Total liabilities

2,690,416

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 - 52,549,798 and 51,906,663, as of August 28, 2021 and November 28, 2020, respectively

52,550

51,907

Additional paid-in capital

200,180

157,867

Retained earnings

1,558,619

1,474,406

Accumulated other comprehensive loss

(244,060

)

(302,859

)

Total H.B. Fuller stockholders' equity

1,567,289

1,381,321

Non-controlling interest

567

541

Total equity

1,567,856

1,381,862

Total liabilities, non-controlling interest and total equity

$

4,258,272

$

4,036,704

CONSOLIDATED BALANCE SHEETS

H.B. FULLER COMPANY AND SUBSIDIARIES

(In thousands, except share and per share amounts)

August 28, November 28,

2021 2020

Assets

Current assets:

Cash and cash equivalents $ 68,134 $ 100,534

Trade receivables (net of allowances of $9,139and $12,905, as of August 28, 2021 and November 572,855 514,916 28, 2020, respectively)

Inventories 462,635 323,213

Other current assets 100,834 81,113

Total current assets 1,204,458 1,019,776



Property, plant and equipment 1,476,158 1,428,183

Accumulated depreciation (800,266 ) (757,439 )

Property, plant and equipment, net 675,892 670,744



Goodwill 1,313,824 1,312,003

Other intangibles, net 710,127 755,968

Other assets 353,971 278,213

Total assets $ 4,258,272 $ 4,036,704



Liabilities, non-controlling interest and total equity

Current liabilities:

Notes payable $ 27,313 $ 16,925

Trade payables 485,796 316,460

Accrued compensation 82,129 83,598

Income taxes payable 32,079 29,173

Other accrued expenses 82,417 83,976

Total current liabilities 709,734 530,132



Long-term debt 1,636,694 1,756,985

Accrued pension liabilities 86,954 88,806

Other liabilities 257,034 278,919

Total liabilities 2,690,416 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 - 52,550 51,907 52,549,798 and 51,906,663, as of August 28,2021 and November 28, 2020, respectively

Additional paid-in capital 200,180 157,867

Retained earnings 1,558,619 1,474,406

Accumulated other comprehensive loss (244,060 ) (302,859 )

Total H.B. Fuller stockholders' equity 1,567,289 1,381,321

Non-controlling interest 567 541

Total equity 1,567,856 1,381,862

Total liabilities, non-controlling interest and $ 4,258,272 $ 4,036,704 total equity

CONSOLIDATED STATEMENTS of CASH FLOWS

H.B. FULLER COMPANY AND SUBSIDIARIES

(In thousands)

CONSOLIDATED STATEMENTS of CASH FLOWS

H.B. FULLER COMPANY AND SUBSIDIARIES

(In thousands)

Nine Months Ended

August 28, 2021

August 29, 2020

Cash flows from operating activities:

Net income including non-controlling interest

$

110,560

$

83,165

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

Depreciation

54,158

50,558

Amortization

53,464

52,943

Deferred income taxes

(1,547

)

(10,952

)

Income from equity method investments, net of dividends received

4,363

2,660

Gain on sale of assets

641

118

Share-based compensation

19,400

14,087

Pension and other post-retirement benefit plan activity

(23,192

)

(5,954)

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

Trade receivables, net

(61,900

)

17,307

Inventories

(141,112

)

(17,195

)

Other assets

(26,060)

31,372

Trade payables

176,210

(9,449

)

Accrued compensation

(1,283

)

(12,345

)

Other accrued expenses

(2,292

)

8,776

Income taxes payable

1,001

330

Other liabilities

(53,498

)

20,481

Other

52,221

(32,872

)

Net cash provided by operating activities

161,134

193,030

Cash flows from investing activities:

Purchased property, plant and equipment

(77,237

)

(71,939

)

Purchased businesses, net of cash acquired

(5,445

)

(9,500

)

Purchase of assets

-

(5,623

)

Proceeds from sale of property, plant and equipment

2,751

1,407

Cash received from government grant

5,800

-

Cash payments related to government grant

(1,526

)

(5,326

)

Net cash used in investing activities

(75,657

)

(90,981

)

Cash flows from financing activities:

Repayment of long-term debt

(118,000

)

(128,000

)

Net proceeds of notes payable

9,846

8,422

Dividends paid

(26,045

)

(24,970

)

Contingent consideration payment

-

(767

)

Proceeds from stock options exercised

22,053

6,567

Repurchases of common stock

(2,668

)

(3,342

)

Net cash used in financing activities

(114,814

)

(142,090

)

Effect of exchange rate changes on cash and cash equivalents

(3,063

)

2,772

Net change in cash and cash equivalents

(32,400

)

(37,269

)

Cash and cash equivalents at beginning of period

100,534

112,191

Cash and cash equivalents at end of period

$

68,134

$

74,922

View source version on businesswire.com: https://www.businesswire.com/news/home/20210922005924/en/

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