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09-07-25
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H.B. Fuller Reports Second Quarter 2025 Results

On 25 June H.B. Fuller Company (NYSE: FUL) reported financial results for its second quarter that ended May 31, 2025.

Second Quarter 2025 Noteworthy Items:

  • Net revenue for the second quarter of fiscal 2025 was $898 million, down 2.1% versus the second quarter of fiscal 2024; adjusting for the flooring divestiture, net revenue was up 2.8% year-on-year;
  • Gross profit margin was 31.9%; adjusted gross profit margin was 32.2%, up 110 basis points year-on-year, driven by cost savings, the impact of acquisitions and divestitures, and targeted pricing actions;
  • Net income was $42 million; adjusted EBITDA was $166 million, up 5% year-on-year; adjusted EBITDA margin expanded 130 basis points year-on-year to 18.4%;
  • Reported EPS (diluted) was $0.76; adjusted EPS (diluted) was $1.18, up 5% year-on-year, driven by higher adjusted net income and lower shares outstanding;
  • Cash flow from operations increased $29 million year-on-year to $111 million;
  • Repurchased approximately one million shares year-to-date.

Summary of Second Quarter 2025 Results:

The Company’s net revenue for the second quarter of fiscal 2025 was $898 million, down 2.1% versus the second quarter of fiscal 2024. Pricing increased net revenue by 0.7%, offset by slightly lower volume, resulting in 0.4% organic revenue growth year-on-year. Foreign currency translation reduced net revenue by 1.2% and the net impact of acquisitions and divestitures decreased net revenue by 1.3%.

Gross profit in the second quarter of fiscal 2025 was $286 million. Adjusted gross profit was $289 million. Adjusted gross profit margin of 32.2% increased 110 basis points year-on-year. Cost savings, the impact of acquisitions and divestitures, and targeted pricing actions principally drove the year-on-year increase in adjusted gross profit margin.

Selling, general and administrative (SG&A) expense was $186 million in the second quarter of fiscal 2025 and adjusted SG&A was $176 million versus $173 million in the second quarter of fiscal 2024. Adjusting for the net impact of acquisitions and divestitures, adjusted SG&A was flat year-on-year, reflecting strong expense management.

Net income attributable to H.B. Fuller for the second quarter of fiscal 2025 was $42 million, or $0.76 per diluted share. Adjusted net income attributable to H.B. Fuller for the second quarter of fiscal 2025 was $65 million. Adjusted EPS was $1.18 per diluted share, up 5% year-on-year driven by higher adjusted net income and lower shares outstanding.

Adjusted EBITDA in the second quarter of fiscal 2025 was $166 million, up 5% year-on-year driven principally by favorable pricing, cost savings, and the net benefit from acquisitions and divestitures. Adjusted EBITDA margin increased 130 basis points year-on-year to 18.4%.

Commenting on the second quarter, H.B. Fuller President and CEO Celeste Mastin said, “Our strong financial performance is a testament to our team's disciplined execution in a highly dynamic environment, and we are performing better than the underlying markets. We remain nimble and focused on delivering positive organic revenue growth, while managing costs in a deliberate manner and leveraging our global sourcing infrastructure to adeptly respond to geopolitical and market uncertainties. Our EBITDA margin expansion highlights the success of the actions we are taking which include an increased focus on pricing, cost savings efforts, and our active portfolio shift towards higher growth, higher margin markets. While global economic activity remains subdued, we continue to perform well and are raising our full-year outlook to reflect our strong execution.”

Balance Sheet and Working Capital:

Net debt at the end of the second quarter of fiscal 2025 was $2,016 million, down $59 million sequentially versus the first quarter and up $106 million year-on-year. Net debt-to-adjusted EBITDA decreased from 3.5X at the end of the first quarter of fiscal 2025, to 3.4X at the end of the second quarter of fiscal 2025. Improved cashflow from operations and growth in adjusted EBITDA principally drove the sequential decrease in the ratio.

Net working capital in the second quarter of fiscal 2025 was relatively flat year-on-year. As a percentage of annualized net revenue, net working capital increased 40 basis points year-on-year to 16.6%.

Fiscal 2025 Outlook:

As a result of our strong financial performance, we are updating our previously communicated financial guidance for fiscal 2025 as follows:

  • Net revenue for fiscal 2025 is now expected to be down 2% to 3%; organic revenue for fiscal 2025 is still expected to be flat to up 2%; we now expect foreign exchange to adversely impact net revenue by 1.0% to 1.5%;
  • Adjusted EBITDA for fiscal 2025 is now expected to be in the range of $615 million to $630 million, equating to growth of 4% to 6% year-on-year;
  • Adjusted EPS (diluted) is now expected to be in the range of $4.10 to $4.30, equating to growth of 7% to 12% year-on-year;
  • Fully diluted shares outstanding for fiscal 2025 is now expected to be in the range of 55 million to 56 million;
  • Adjusted EBITDA for the third quarter of 2025 is expected to be in the range of $165 million to $175 million.

Conference Call:

The Company will hold a conference call on June 26, 2025, at 9:30 a.m. CT (10:30 a.m. ET) 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 must register prior to accessing the webcast using this link and should do so at least 10 minutes prior to the start of the call to install and test any necessary software and audio connections. A telephone replay of the conference call will be available from 12:30 p.m. CT on June 26, 2025, to 10:59 p.m. CT on July 3, 2025. To access the telephone replay dial 1-800-770-2030 (toll free) or 1-609-800-9909 and enter the Conference ID: 6370505.

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, adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA), adjusted EBITDA margin, net debt, net debt-to-adjusted EBITDA, trailing twelve months adjusted EBITDA, net working capital, annualized net revenue and net working capital as a percentage of annualized net revenue 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 2025 Outlook, which the Company cannot reconcile to forward-looking GAAP results without unreasonable effort.