Fuller(FUL)2025-01-23 20:35Company Overview - The company operates in three reportable segments: Hygiene, Health and Consumable Adhesives, Engineering Adhesives, and Construction Adhesives[14]. - As of November 30, 2024, the company had approximately 7,500 employees in 45 countries, with about 2,800 employees based in the U.S.[22]. - The company has sales offices and manufacturing plants in 25 countries outside the United States and satellite sales offices in another 9 countries[15]. Financial Performance and Risks - Approximately 55% of net revenue was generated outside of the United States in 2024, indicating significant global exposure[206]. - A hypothetical one percent change in cost of sales due to foreign currency rate changes would have resulted in a change in net income of approximately $8.4 million or $0.15 per diluted share[209]. - The purchase of raw materials is the largest expenditure for the company, with a hypothetical one percent change in raw material costs resulting in a change in net income of approximately $12.0 million or $0.21 per diluted share[211]. - The annual impact on interest expense of a one-percentage point interest rate change on the outstanding balance of variable rate debt would have resulted in a change in net income of approximately $6.0 million or $0.11 per diluted share[205]. - The company aims to balance non-functional currency denominated assets to liabilities to minimize foreign exchange impacts[207]. - Unfavorable economic conditions may adversely impact sales volumes, pricing levels, and profitability, particularly during recessionary periods[204]. - A general reduction in consumer discretionary spending could have a material adverse effect on the company's results of operations[204]. Environmental and Regulatory Compliance - The company estimates expenditures to comply with environmental regulations over the next two years to be approximately $20.9 million, including $0.3 million of capital expenditures[39]. - The company continues to monitor regulatory developments related to climate change and sustainability, adapting its strategies accordingly[40]. - The company has a strong environmental, health, and safety program aimed at enhancing workplace safety[23]. Research and Development - The company invests significantly in research and development to create new adhesive technology platforms and enhance product performance[36]. Customer Relations and Competitive Factors - The company has cultivated strong relationships with a diverse set of customers, with no single customer accounting for more than 10% of consolidated net revenue[19]. - The company focuses on product performance, supply assurance, technical service, quality, price, and customer service as principal competitive factors[18]. Compensation and Equity - The company is committed to fair pay and conducts global pay equity assessments and compensation reviews[25]. Market and Financial Risk Management - The company does not enter into speculative positions with regard to derivative instruments, focusing instead on minimizing risks from foreign currency fluctuations[208]. - The principal raw materials include resins, polymers, and synthetic rubbers, with strategic sourcing agreements in place to manage price changes[210]. - The company is exposed to market risks from changes in interest rates, foreign currency rates, and prices of raw materials[202].