H.B. Fuller Reports Third Quarter 2025 Results

Reported EPS (diluted) of $1.22; Adjusted EPS (diluted) of $1.26, up 12% year-on-year

Net income of $67 million; Adjusted EBITDA of $171 million, up 3% year-on-year

Adjusted EBITDA margin of 19.1%, up 110 basis points year-on-year

H.B. Fuller Company (NYSE:FUL) today reported financial results for its third quarter that ended August 30, 2025.

Third Quarter 2025 Noteworthy Items:

• Net revenue for the third quarter of fiscal 2025 was $892 million, down 2.8% versus the third quarter of fiscal 2024; adjusting for the flooring divestiture, net revenue was up 1.6% year-on-year;
• Gross profit margin was 32.0%; adjusted gross profit margin was 32.3%, up 190 basis points year-on-year, driven principally by favorable net pricing and raw material cost actions, the impact of acquisitions and divestitures, and cost reduction efforts;
• Net income was $67 million; adjusted EBITDA was $171 million, up 3% year-on-year; adjusted EBITDA margin expanded 110 basis points year-on-year to 19.1%;
• Cash flow from operations increased 13% year-on-year to $99 million;
• Reported EPS (diluted) was $1.22; adjusted EPS (diluted) was $1.26, up 12% year-on-year, driven by higher adjusted net income and lower shares outstanding.

Summary of Third Quarter 2025 Results:

The Company's net revenue for the third quarter of fiscal 2025 was $892 million, down 2.8%; adjusting for the flooring divestiture, net revenue was up 1.6% year-on-year versus the third quarter of fiscal 2024. Pricing increased net revenue by 1.0%, which was more than offset by lower volume, resulting in a 0.9% organic revenue decline year-on-year. Foreign currency translation increased net revenue by 1.0% and the net impact of acquisitions and divestitures decreased net revenue by 2.9%.

Gross profit in the third quarter of fiscal 2025 was $285 million. Adjusted gross profit was $288 million. Adjusted gross profit margin of 32.3% increased 190 basis points year-on-year. The net impact of pricing and raw material cost actions, the impact of acquisitions and divestitures, and targeted cost reduction efforts drove the year-on-year increase in adjusted gross profit margin.

Selling, general and administrative (SG&A) expense was $175 million in the third quarter of fiscal 2025 and adjusted SG&A was $169 million versus $164 million in the third quarter of fiscal 2024. Adjusting for the net impact of acquisitions and divestitures, foreign exchange, and variable compensation, adjusted SG&A was flat year-on-year, reflecting diligent expense management.

Net income attributable to H.B. Fuller for the third quarter of fiscal 2025 was $67 million, or $1.22 per diluted share. Adjusted net income attributable to H.B. Fuller for the third quarter of fiscal 2025 was $69 million. Adjusted EPS was $1.26 per diluted share, up 12% year-on-year driven by higher adjusted net income and lower shares outstanding.

Adjusted EBITDA in the third quarter of fiscal 2025 was $171 million, up 3% year-on-year driven principally by the net impact of pricing and raw material cost actions. Adjusted EBITDA margin increased 110 basis points year-on-year to 19.1%.

Commenting on the third quarter, H.B. Fuller President and CEO Celeste Mastin said, "We delivered a strong quarter, evidenced by continued margin expansion and double-digit EPS growth despite the challenging operating environment. Our continued operational discipline, strong execution, and ongoing portfolio shift keep us on track to achieve our greater than 20% EBITDA margin target. Despite our strong performance, we remain cautious and have tightened our guidance range for the year to reflect a globally subdued economic backdrop. Looking forward, we expect volume growth to remain elusive, and end market conditions to be challenging. However, we continue to actively focus on enhancing the composition of our portfolio, driving continued efficiencies, and structurally repositioning the company for growth and continued margin expansion, consistent with our long-term strategy."

Balance Sheet and Working Capital:

As a percentage of annualized revenue, net working capital increased 90 basis points year-on-year to 17.0% due to slightly higher inventory days on hand in preparation for our manufacturing footprint optimization.

Net debt at the end of the third quarter of fiscal 2025 was $1,958 million, down $58 million sequentially versus the second quarter and up $68 million year-on-year. Net debt-to-adjusted EBITDA decreased from 3.4X at the end of the second quarter of fiscal 2025, to 3.3X at the end of the third quarter of fiscal 2025, consistent with our plan to bring down leverage. Solid cash flow from operations and growth in adjusted EBITDA drove the sequential decrease in the ratio.

Fiscal 2025 Outlook:

As a result of our year-to-date performance and current macroeconomic conditions, we are updating our previously communicated financial guidance for fiscal 2025 as follows:

• Net revenue for fiscal 2025 is expected to be down 2% to 3%; organic revenue for fiscal 2025 is now expected to be flat to up 1%; we now expect foreign exchange to adversely impact net revenue by approximately 1.0%;
• Adjusted EBITDA for fiscal 2025 is now expected to be in the range of $615 million to $625 million, equating to growth of 4% to 5% year-on-year;
• Adjusted EPS (diluted) is now expected to be in the range of $4.10 to $4.25, equating to growth of 7% to 11% year-on-year;
• Cash flow from operations is now expected to be in the range of $275 million to $300 million and capital expenditures are now expected to be approximately $140 million for the year;
• We now expect net interest expense for the year to be approximately $125 million to $130 million and the full year adjusted tax rate to be between 26.0% and 26.5%.

Conference Call:

The Company will hold a conference call on September 25, 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 September 25, 2025, to 10:59 p.m. CT on October 2, 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.

About H.B. Fuller:

As the largest pureplay adhesives company in the world, H.B. Fuller's (NYSE:FUL) innovative, functional coatings, adhesives and sealants enhance the quality, safety and performance of products people use every day. Founded in 1887, with 2024 revenue of $3.6 billion, our mission to Connect What Matters is brought to life by more than 7,500 global team members who collaborate with customers across more than 30 market segments in over 140 countries to develop highly specified solutions that enable customers to bring world-changing innovations to their end markets. Learn more at 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 availability and pricing of raw materials; the impact of potential cybersecurity attacks and security breaches; failures in our information technology systems; the impact on the supply chain, raw material costs and pricing of our products due to military conflict, including between Russia and Ukraine and in the Middle East; the impact on our margins and product demand due to inflationary pressures; 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, and 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 our current dividend policy; our ability to effectively manage and realize expected benefits from completed and future mergers, acquisitions, and divestitures; 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; disruptions to our relationships with our major customers and suppliers; 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 consequences of the COVID-19 outbreak and other pandemics on our operations and financial results; the effect of new accounting pronouncements and accounting charges and credits; and similar matters.

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.