Wednesday, April 9, 2025
H.B. Fuller (NYSE: FUL) has released its first-quarter financial results for fiscal 2025, reporting net revenue of $789 million, a 2.7% decline year-on-year. The decline was driven by unfavorable foreign currency translation and the divestiture of the company’s flooring business. However, organic revenue grew by 1.9%, driven by improved volume growth.
The company’s gross margin for the quarter was 28.8%, with an adjusted gross margin of 29.6%, marking a slight decline from last year. This decrease was primarily attributed to higher raw material costs, although inflation in this area has shown signs of moderating.
Adjusted EBITDA and Profitability
H.B. Fuller reported net income of $13 million for the quarter, with an adjusted EBITDA of $114 million, a 7% decline from the previous year. This decrease was largely expected and resulted from higher raw material costs and increased variable compensation, which offset positive pricing and volume growth. Adjusted net income for the quarter was $30 million, and the company reported an adjusted diluted EPS of $0.54.
Outlook for Fiscal 2025
Despite weak overall market demand and unpredictable geopolitical conditions, the company remains cautiously optimistic. H.B. Fuller expects fiscal 2025 net revenue to decline by 2% to 4%, with organic revenue growth forecasted to be flat to up 2%. Adjusted EBITDA for the year is projected to range from $600 million to $625 million, with an expected increase in adjusted EPS of 2% to 9%.
Celeste Mastin, president and CEO, expressed confidence in the company’s ability to navigate the dynamic environment, highlighting the importance of pricing discipline, market share gains, and effective cost management. Mastin also reaffirmed the company’s long-term strategic focus on portfolio optimization and cost structure improvements, aiming for an EBITDA margin greater than 20%.
Balance Sheet and Working Capital
At the end of the first quarter, H.B. Fuller reported net debt of $2.074 billion, a $233 million increase from the previous quarter, largely due to acquisitions. The company’s net debt-to-adjusted EBITDA ratio stood at 3.5X. Net working capital increased by $9 million sequentially and declined $12 million year-on-year. Cash flow from operations was down compared to last year, as expected, with higher working capital needs tied to revenue growth.
Conference Call and Additional Information
H.B. Fuller hosted a conference call on March 27, 2025, at 9:30 a.m. CT to discuss its first-quarter results. A live webcast and supplementary presentation was available on the company’s investor relations website.
For more detailed information on the company’s performance and forward-looking guidance, visit the company website.
Source: HB Fuller
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Tags: acquisitions, adjusted EBITDA, divestitures, financial results, fiscal 2025 outlook, H.B. Fuller, net income, organic revenue growth, Q1 2025 results, raw material costs
