Fuller(FUL) - 2026 Q1 - Quarterly Results

Financial Performance - Net revenue for Q1 2026 was $771 million, a decrease of 2.3% compared to Q1 2025, with a 6.6% organic revenue decline year-on-year[5] - Adjusted EBITDA for Q1 2026 was $119 million, up 4% year-on-year, with an adjusted EBITDA margin of 15.4%, an increase of 90 basis points year-on-year[6] - Reported EPS (diluted) was $0.38, while adjusted EPS (diluted) was $0.57, reflecting a 6% increase year-on-year[9] - Gross margin for Q1 2026 was 30.6%, with an adjusted gross margin of 31.3%, up 170 basis points year-on-year due to restructuring savings and pricing actions[7] - Net income attributable to H.B. Fuller for Q1 2026 was $21 million, with adjusted net income of $32 million[9] - Revenue for the three months ended February 28, 2026, was $770,844,000, down from $788,663,000 in the same period of 2025, indicating a decline of 2.3%[31] - Adjusted EBITDA for the three months ended February 28, 2026, was $118,704,000, compared to $114,356,000 for the same period in 2025, marking an increase of 3.0%[31] - The adjusted EBITDA margin improved to 15.4% for the three months ended February 28, 2026, up from 14.5% in the prior year[31] - H.B. Fuller reported a net income attributable to the company of $21,045 thousand for the three months ended February 28, 2026, a decrease from $32,160 thousand in the same period of 2025[42] - The total revenue for H.B. Fuller was $770,844 thousand for the three months ended February 28, 2026, compared to $788,663 thousand for the same period in 2025, reflecting a decline of 2.3%[44] - Net income for the three months ended February 28, 2026, is $21,045, an increase from $13,264 in the same period last year[57] Guidance and Projections - Full-year revenue guidance is now expected to increase by mid-single digits, with organic revenue expected to rise by low-single digits[15] - Adjusted EBITDA for fiscal 2026 is projected to be in the range of $645 million to $675 million[15] Debt and Cash Flow - Net debt at the end of Q1 2026 was $1,968 million, down $106 million year-on-year, with a net debt-to-adjusted EBITDA ratio of 3.1X[11] - Cash flow from operations improved by $49 million year-on-year, primarily driven by higher income[12] - The company’s trailing twelve months adjusted EBITDA reached $625,009 thousand, demonstrating strong cumulative performance over the year[47] - Total debt as of February 28, 2026, is $2,076,062, an increase from $2,016,937 as of November 29, 2025[51] - Net debt stands at $1,968,185, compared to $1,909,724 in the previous quarter, with a net debt-to-adjusted EBITDA ratio of 3.1[51] - Cash flows from operating activities show a net cash used of $3,974, a significant improvement from $52,907 in the previous quarter[57] - Cash and cash equivalents at the end of the period are $107,877, slightly up from $107,213 at the beginning of the period[57] Segment Performance - Segment revenue for Hygiene, Health and Consumable Adhesives decreased to $346,527,000 from $368,225,000, a decline of 5.9% year-over-year[31] - Segment operating income for Engineering Adhesives increased to $31,143,000, up from $28,051,000, reflecting a growth of 11.1%[31] - Organic revenue growth for H.B. Fuller was reported at -6.6% for the three months ended February 28, 2026, indicating challenges in market demand[44] - The Hygiene, Health and Consumable Adhesives segment experienced a revenue decline of 10.1% on an organic basis for the three months ended February 28, 2026[44] - Engineering Adhesives segment revenue grew by 2.4% for the same period, indicating resilience in this segment despite overall declines[44] Costs and Investments - The company incurred acquisition project costs of $931 thousand and organizational realignment costs of $10,022 thousand during the three months ended February 28, 2026[42] - The company invested $57,701 in property, plant, and equipment during the quarter, compared to $32,984 in the previous quarter[57] - Proceeds from the issuance of long-term debt amounted to $288,100, while repayment of long-term debt was $231,441[57] Tax and Effective Rates - The adjusted effective income tax rate for the three months ended February 28, 2026, was 26.2%, slightly down from 26.9% in the prior year[35]