Fuller(FUL)2024-01-23 16:00Company Structure and Operations - The company operates in three reportable segments: Hygiene, Health and Consumable Adhesives, Engineering Adhesives, and Construction Adhesives[12]. - As of December 2, 2023, the company has sales offices and manufacturing plants in 25 countries outside the United States, with satellite sales offices in another 9 countries[13]. - The company has approximately 7,200 employees in 45 countries, with about 2,600 employees based in the U.S.[20]. Financial Investments and Expenditures - The company expects to invest approximately $21.4 million over the next two years to comply with environmental regulations, including about $0.9 million in capital expenditures[38]. - 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 $13.3 million or $0.24 per diluted share[201]. - 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 $5.3 million or $0.09 per diluted share[195]. Employee Compensation and Performance - The company emphasizes a "Pay for Performance" compensation strategy to align employee performance with business objectives[22]. - The company is committed to fair pay and conducts global pay equity assessments to ensure competitive compensation[23]. Research, Development, and Innovation - The company has a strong focus on research and development, aiming to create new adhesive technology platforms and improve product performance[35]. - The company monitors market trends related to sustainability and invests in innovation to meet changing consumer demands[37]. Customer Relationships and Market Exposure - The company has cultivated strong relationships with diverse customers, with no single customer accounting for more than 10% of consolidated net revenue[17]. - Approximately 56% of net revenue was generated outside of the United States in 2023, indicating significant international exposure[196]. Risk Management and Economic Conditions - Unfavorable economic conditions may negatively affect sales volumes, pricing levels, and profitability, particularly during recessionary periods[194]. - The company avoids sole source supplier arrangements for raw materials to mitigate supply chain risks[200]. - The company does not enter into speculative positions with regard to derivative instruments, focusing instead on minimizing risks from foreign currency exchange rate fluctuations[198]. - 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 $9.4 million or $0.17 per diluted share[199]. - The company aims to balance non-functional currency denominated assets to liabilities to minimize foreign exchange impacts[197]. Governance and Oversight - The Board of Directors elects the executive officers annually, ensuring governance and oversight of company operations[46]. Environmental and Safety Commitment - The company has a strong environmental, health, and safety program, focusing on workplace safety and compliance with regulations[21].