Fuller(US:FUL)2024-09-26 17:23Financial Performance - Net revenue for the third quarter of 2024 increased by 1.9% to $917.9 million compared to $900.6 million in the third quarter of 2023[96]. - Net income attributable to H.B. Fuller in the third quarter of 2024 was $55.4 million, up from $37.6 million in the same quarter of 2023, with diluted earnings per share increasing to $0.98 from $0.67[97]. - For the first nine months of 2024, net revenue increased by 1.4% to $2,645.5 million compared to $2,608.1 million in the first nine months of 2023[97]. - Net income for the first nine months of 2024 was $137.6 million, up 37.7% from $99.9 million in the same period of 2023[119]. - Total net revenue for Q3 2024 was $917.9 million, a decrease of 3.1% compared to $900.6 million in Q3 2023[124]. Cost and Expenses - SG&A expenses for the first nine months of 2024 increased by 6.5% to $525.2 million compared to $493.3 million in the same period of 2023[108]. - The company incurred costs of approximately $43.0 million related to restructuring plans as of August 31, 2024, with total expected costs between $39.1 million and $50.1 million[99]. - Interest expense for the third quarter of 2024 was $35.3 million, slightly up from $35.1 million in the same quarter of 2023[111]. Profitability Metrics - Gross profit margin for the third quarter of 2024 increased by 70 basis points to 30.0%, driven by lower raw material costs[106]. - Organic revenue growth in the third quarter of 2024 was 0.4%, with a 10.2% increase in Construction Adhesives[101]. - Segment operating income for Hygiene, Health and Consumable Adhesives was $49.8 million in Q3 2024, down 5.5% from $52.7 million in Q3 2023[123]. - Segment operating margin for Hygiene, Health and Consumable Adhesives was 12.8% in Q3 2024, compared to 13.1% in Q3 2023[124]. - Segment operating income for Engineering Adhesives remained flat at $52.9 million, while segment operating margin decreased by 40 basis points to 14.1%[129]. - Segment operating income for Construction Adhesives increased by 111.9% to $12.5 million, with segment operating margin rising to 8.2%[132]. Cash Flow and Liquidity - Total cash and cash equivalents as of August 31, 2024, were $131.4 million, down from $179.5 million as of December 2, 2023[137]. - The company expects cash flows from operating activities to be adequate for short-term and long-term liquidity needs[138]. - Net cash provided by operating activities was $216.8 million for the nine months ended August 31, 2024, slightly up from $216.7 million in 2023[146]. - Free cash flow for the first nine months of 2024 was $104.0 million, down from $107.2 million in the same period of 2023[145]. Debt and Capital Structure - Total long and short-term debt increased to $2,021.1 million as of August 31, 2024, compared to $1,838.4 million as of December 2, 2023[137]. - The total debt to total capital ratio was 52.3% as of August 31, 2024, compared to 51.1% as of December 2, 2023[137]. - Total debt to total capital ratio rose to 53.0% in 2024 from 52.2% in 2023[143]. - The company was in compliance with all covenants of its contractual obligations as of August 31, 2024, with a secured total indebtedness to TTM EBITDA ratio of 2.2[139]. Other Income and Investments - Other income, net for the third quarter of 2024 was $2.1 million, a 31.3% increase from $1.6 million in the third quarter of 2023[109]. - Income from equity method investments increased by 30.0% to $1.3 million in Q3 2024, compared to $1.0 million in Q3 2023[117]. Currency Effects - The company experienced a negative currency effect primarily due to a weaker Egyptian pound, Turkish lira, and Brazilian real compared to the U.S. dollar[126]. Inventory and Trade Receivables - Trade receivables, net contributed $26.4 million to cash flow in 2024, down from $79.5 million in 2023[147]. - Inventory usage increased to $62.2 million in 2024 compared to a cash source of $38.2 million in 2023[148]. - Trade payables provided $49.7 million in cash flow in 2024, contrasting with a cash usage of $74.4 million in 2023[148]. Restructuring Plans - The company expects to complete its restructuring plans by fiscal year 2026, with the majority of costs recognized in fiscal 2023 and 2024[99]. - Segment operating loss in Corporate Unallocated decreased by 46.0% in Q3 2024 compared to Q3 2023, attributed to a gain on insurance claims[137].