Core Viewpoint - Seaport Global Securities upgraded HB Fuller from Neutral to Buy with a price target of $80.00, resulting in a pre-market share increase of over 1% [1] Financial Performance - HB Fuller is expected to achieve strong year-on-year EBITDA growth in fiscal 2025 despite sluggish demand, driven by margin expansion from lower costs and mix improvements [2] - The EBITDA margin increased by 110 basis points year-over-year, even with declining volumes, indicating effective execution in pricing, procurement, portfolio restructuring, and manufacturing optimization [2] Segment Performance - The Engineering Adhesives segment led growth with a 14% EBITDA increase, while Building Adhesive Solutions outperformed underlying markets, benefiting from data center construction demand and growth in the Middle East [3] - The Hygiene, Health & Consumables segment showed weakness but was partially offset by demand from medical applications [3] Future Projections - Seaport projects an additional $25 million in price/cost tailwinds for FY26 and approximately $70 million in optimization benefits through FY30 [4] - The current valuation at 7.8x forward EBITDA is below the 3-year average of 9.0x, supporting the upgrade [4]

Financial Data and Key Metrics Changes - Organic sales decreased by 0.9%, with positive pricing of 1% offset by a volume decline of 1.9% [4][10] - Adjusted EBITDA for the quarter was $171 million, up 3% year-on-year, with an EBITDA margin of 19.1%, an increase of 110 basis points year-on-year [4][12] - Adjusted gross profit margin was 32.3%, up 190 basis points versus last year [10] - Adjusted earnings per share (EPS) of $1.26 was up 12% compared to the third quarter of 2024 [12] - Operating cash flow increased by 13% year-on-year [12] Business Line Data and Key Metrics Changes - HHC: Organic revenue decreased by 3.1%, with EBITDA up 2% year-on-year and EBITDA margin at 16.9% [5][6] - Engineering Adhesives (EA): Organic revenue increased by 2.2%, with EBITDA up 14% and EBITDA margin expanded to 23.3% [6][7] - Building Adhesive Solutions (BAS): Organic sales decreased by 1%, with EBITDA increasing by 3% to $41 million and EBITDA margin at 17.7% [7][8] Market Data and Key Metrics Changes - Americas: Organic revenue was up 1% year-on-year, driven by EA's high single-digit increase [8] - EIMEA: Organic revenue declined by 2% year-on-year, with EA flat and HHC and BAS down modestly [8] - Asia-Pacific: Organic revenue decreased by 4% year-on-year, primarily due to significant volume decline in solar [8] Company Strategy and Development Direction - The company is focused on enhancing its portfolio, driving efficiencies, and repositioning for growth and margin expansion [4][15] - The strategy includes proactive measures in pricing and raw material management, as well as cost controls [15][16] - The company aims to achieve a greater than 20% EBITDA margin target in the long term [17] Management's Comments on Operating Environment and Future Outlook - Management expressed caution due to a globally subdued economic backdrop, expecting volume growth to remain elusive [4][9] - The manufacturing sector is weak, with customer demand appearing uneven and less predictable [9] - The company anticipates a slow growth environment with continued economic volatility and high interest rates [9] Other Important Information - The company updated its financial guidance for fiscal 2025, expecting net revenue to be down 2%-3% year-on-year and organic revenue to be flat to up 1% [13][14] - Full-year adjusted diluted EPS is expected to be in the range of $4.10-$4.25, equating to year-on-year growth of 7%-11% [14] Q&A Session Summary Question: Could you provide some more detail behind the reduction in cash flow guidance? - The reduction is primarily due to higher inventory levels in preparation for footprint consolidation actions, which is expected to be temporary [19][20] Question: Did anything accelerate in the quarter for EA? - EA experienced a return to double-digit organic growth in electronics, with strong performance in the U.S. driven by new customer wins and share take [24][25][26] Question: How would you explain the HHC decline in volumes versus EA? - HHC volumes reflect a tougher consumer environment, with mid-single-digit declines across major regions, while EA is outperforming the market [32] Question: What are the expectations for solar in fiscal year 2026? - The company will continue to face headwinds in revenue from the silicon sealant product line, but expects to shore up EBITDA and margins by exiting lower-margin spaces [35] Question: What is the status of pricing versus raw material cost tailwinds? - The company has generated about $15 million of the anticipated $55 million in price and cost actions, with expectations for additional benefits in Q4 and into next year [40][41] Question: How do you see growth opportunities in the next year or two? - The company is experiencing accelerated growth in EA and medical adhesives, with strong performance in new geographies and product ranges [44][45] Question: What kind of lag effects do you expect from lower interest rates? - Lower interest rates typically impact the business 15-18 months later, but immediate benefits are expected in various segments, particularly in woodworking [50][51] Question: How large is the data center business and its impact? - The data center business is growing quickly, with a strategic focus on roofing systems, contributing to overall segment growth [52][53]

Third Quarter 2025 Conference Call September 25, 2025 ® 2025 H.B. Fuller Title Slide Disclosure ® 2025 H.B. Fuller Third Quarter Highlights Adjusted EBITDA $171M Up 3% YOY Adjusted EBITDA Margin 19.1% Up 110 bps YOY Safe Harbor Statement Certain matters discussed today are forward-looking statements within the meaning of the federal securities laws, including Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements reflect our ...

Core Insights - H. B. Fuller (FUL) is expected to report quarterly earnings of $1.24 per share, reflecting a 9.7% increase year-over-year, while revenues are forecasted at $891.95 million, indicating a decline of 2.8% compared to the previous year [1] - The consensus EPS estimate has remained unchanged over the past 30 days, suggesting analysts have reassessed their projections [1] Revenue Projections - Analysts project 'Net Revenue- Hygiene, Health and Consumable Adhesives' to reach $397.69 million, representing a year-over-year increase of 2% [4] - 'Net Revenue- Construction Adhesives' is expected to be $232.65 million, indicating a significant year-over-year increase of 51.9% [4] - 'Net Revenue- Engineering Adhesives' is forecasted at $265.33 million, suggesting a year-over-year decline of 29.2% [4] Stock Performance - H. B. Fuller shares have increased by 3.9% over the past month, outperforming the Zacks S&P 500 composite, which rose by 3% [4] - The company holds a Zacks Rank of 3 (Hold), indicating it is expected to closely follow overall market performance in the near term [4]

Core Insights - Meridian has entered into a definitive agreement to divest its Flooring Adhesives Division to Avery Dennison, which will integrate the brands into its Materials Group business, aiming for accelerated innovation and expanded reach [1][2][3] Company Overview - Meridian Adhesives Group is a leading manufacturer of high-performance adhesives, providing solutions across various markets including electronics, product assembly, infrastructure, packaging, and flooring [3] - Avery Dennison Corporation is a global leader in materials science and digital identification solutions, reported sales of $8.8 billion in 2024, and employs approximately 35,000 employees in over 50 countries [4]

Financial Performance - Adjusted EBITDA and Adjusted EPS increased by 5% year-over-year[6] - Adjusted gross margin increased by 110 bps to 32.2% due to cost savings, acquisitions/divestitures, and pricing actions[6] - Adjusted EBITDA margin increased by 130 bps year-over-year to 18.4%[6] - Q2 2025 adjusted EBITDA increased 5% year-over-year to $166 million[16] - Q2 2025 adjusted EPS increased 5% year-over-year to $1.18, driven by higher adjusted net income and lower shares outstanding[16] Revenue and Organic Growth - Organic revenue increased by 0.4% year-over-year[16] - Expect fiscal year 2025 net revenue to be down 2% to 3%[18] - Expect fiscal year 2025 organic revenue to be flat to up 2% year-over-year[18] Segment Performance - Hygiene, Health, and Consumable Adhesives organic revenue increased 1.7% year-over-year, with an adjusted EBITDA margin of 15.6%[9] - Engineering Adhesives organic revenue declined 0.4% year-over-year, but adjusted EBITDA margin increased 310 bps year-over-year to 22.9%[9] - Building Adhesive Solutions organic sales decreased 0.9% year-over-year, but adjusted EBITDA margin expanded 60 bps year-over-year to 16.7%[9] Financial Guidance - Expect fiscal year 2025 adjusted EBITDA to be in the range of $615 million to $630 million, representing a 4% to 6% increase year-over-year[18] - Expect fiscal year 2025 adjusted EPS to be in the range of $4.10 to $4.30, representing growth of 7% to 12% year-over-year[18]

Financial Data and Key Metrics Changes - The company reported a 2.1% decrease in revenue year on year, but net revenue adjusted for the flooring divestiture increased by 2.8% [14] - Organic revenue was up 0.4%, with pricing growth of 0.7% and a volume decline of 0.3% year on year [15] - Adjusted EBITDA for the quarter was $166 million, reflecting a 5% year on year increase, driven by targeted pricing actions and cost savings [16] - Adjusted earnings per share (EPS) increased by 5% to $1.18 due to higher net income and lower shares outstanding [17] - Operating cash flow increased by 36% year on year to $111 million, reflecting improved net income and working capital [17] - Net debt to adjusted EBITDA decreased from 3.5 times to 3.4 times, indicating improved cash flow and lower debt balances [17] Business Line Data and Key Metrics Changes - In the HHC segment, organic revenue increased by 1.8% year on year, driven by positive volume and pricing, although EBITDA margin was down year on year due to higher raw material costs [8] - Engineering Adhesives saw a 0.4% decrease in organic revenue, with strong performance in transportation markets offset by weakness in solar [9] - Building Adhesive Solutions experienced a 0.9% decrease in organic sales year on year, but EBITDA increased by 5% with a margin expansion of 60 basis points [10] Market Data and Key Metrics Changes - In the Americas, organic revenue was up 2% year on year, driven by strength in roofing and flexible packaging [10] - EIMEA region saw a 2% decline in year-over-year organic revenue, with strong performance in hygiene offset by weak demand in construction-related markets [11] - Asia Pacific experienced slight organic revenue growth year on year, with strong performance in transportation markets but slower results in solar and electronics [11] Company Strategy and Development Direction - The company is focused on delivering positive organic revenue growth while managing costs and leveraging global sourcing to respond to market uncertainties [6] - A strategic shift towards higher growth and higher margin markets is underway, including the divestiture of lower margin businesses [6] - The company aims to achieve a greater than 20% EBITDA margin target and is optimistic about margin expansion in 2025 [26] Management's Comments on Operating Environment and Future Outlook - Management expects a challenging operating environment with high uncertainty and constrained demand, particularly in the second half of the year [12] - Despite economic uncertainties, the company is optimistic about its strong execution and expects profit growth to accelerate in the second half [12] - The company anticipates slightly weaker volume in the latter half of the year but expects continued margin expansion due to pricing actions and raw material purchasing leverage [12] Other Important Information - The company was recognized as one of the world's greenest companies in 2025 by Newsweek, highlighting its commitment to sustainability [23] - The Vice President of Investor Relations announced his retirement, with plans for a smooth transition [24][25] Q&A Session Summary Question: Can you provide more context on the strong margin performance in Engineering Adhesives? - Management noted that the acquisition of ND Industries performed better than expected and strong cost control contributed to margin expansion [32][33] Question: How did volume velocity across business units compare in fiscal Q2? - Overall volume trends were flat in Q2, with some positive momentum in automotive and flexible packaging, while residential construction markets showed softness [38][39] Question: What is the expected impact of tariffs on the business? - The company has limited direct tariff impact due to local sourcing but is prepared for potential lower volumes and is actively managing costs to mitigate impacts [86][89] Question: Can you elaborate on the capital expenditure trajectory? - The company expects to close the gap in capital spending in the second half of the year, with a full-year guidance of $150 million [61][62] Question: What was the pension income for the quarter? - Pension income for the quarter was approximately $5.7 million, up from $4 million in the previous year [67]

Financial Data and Key Metrics Changes - The company reported a 2.1% decrease in revenue year on year, but net revenue adjusted for the flooring divestiture increased by 2.8% [15] - Organic revenue was up 0.4%, with pricing up 0.7% and volume down 0.3% year on year [16] - Adjusted EBITDA for the quarter was $166 million, reflecting a 5% year on year increase [17] - Adjusted earnings per share (EPS) was $1.18, up 5% compared to the second quarter of 2024 [17] - Operating cash flow increased by 36% year on year to $111 million [17] - Net debt to adjusted EBITDA decreased from 3.5 times to 3.4 times [17] Business Line Data and Key Metrics Changes - In HHC, organic revenue increased by 1.8% year on year, driven by positive volume and pricing, although EBITDA margin was down year on year due to higher raw material costs [8] - Engineering Adhesives saw a 0.4% decrease in organic revenue, but EBITDA increased by 24% with EBITDA margin rising to 22.9% [10] - Building Adhesive Solutions experienced a 0.9% decrease in organic sales, while EBITDA increased by 5% and EBITDA margin expanded to 16.7% [11] Market Data and Key Metrics Changes - In the Americas, organic revenue was up 2% year on year, driven by strength in roofing and flexible packaging [11] - EIMEA region saw a 2% decline in year-over-year organic revenue, with strong performance in hygiene offset by weak demand in construction-related markets [12] - Asia Pacific organic revenue was slightly up year on year, with strong performance in transportation-related markets but slower results in solar and electronics [12] Company Strategy and Development Direction - The company is focused on delivering positive organic revenue growth while managing costs and leveraging global sourcing to respond to market uncertainties [6] - A strategic shift towards higher growth, higher margin markets is underway, including the divestiture of lower margin businesses [6] - The company aims to achieve a greater than 20% EBITDA margin target and is optimistic about margin expansion in 2025 [26] Management's Comments on Operating Environment and Future Outlook - Management expects a challenging operating environment with constrained demand and high uncertainty, particularly in the second half of the year [12] - Despite economic uncertainties, the company is optimistic about its strong execution and expects profit growth to accelerate in the second half [13] - The company is prepared for potential lower volumes due to tariffs and is actively managing costs to mitigate impacts [89] Other Important Information - The company was recognized as one of the world's greenest companies in 2025 by Newsweek, highlighting its commitment to sustainability [23] - The Vice President of Investor Relations announced retirement, with a transition plan in place [24] Q&A Session Summary Question: Can you provide more context on the strong margin performance in Engineering Adhesives? - The strong margin performance was attributed to better-than-expected performance from the ND Industries acquisition and strong cost control measures [34] Question: How did volume velocity compare across business units in fiscal Q2? - Overall volume trends were flat in Q2, with some positive momentum in automotive and flexible packaging, while residential construction showed softness [39] Question: What is the outlook for the electronics market, particularly in China? - There was a temporary pause in electronics exports from China, but the company expects recovery in the second half due to new business opportunities [48] Question: How should we think about the progression of price cost and margin profile in HHC? - The company anticipates significant margin expansion in HHC due to raw material cost reductions and strong pricing actions [50] Question: What is the expected capital expenditure trajectory for the remainder of the year? - The company expects to close the gap in capital spending in the second half of the year, with a total guidance of $150 million for the full year [61] Question: What is the impact of tariffs on the company's operations? - The direct impact of tariffs is limited due to local sourcing, but the company is prepared for potential volume impacts and is actively managing costs [89]

Core Insights - Analysts project H. B. Fuller (FUL) will report quarterly earnings of $1.10 per share, reflecting a year-over-year decline of 1.8% [1] - Revenue is expected to reach $898.25 million, down 2.1% from the same quarter last year [1] - The consensus EPS estimate has remained unchanged over the past 30 days, indicating a reassessment by covering analysts [1] Revenue Projections - 'Net Revenue- Hygiene, Health and Consumable Adhesives' is forecasted to be $394.59 million, showing a change of +0.4% from the prior-year quarter [4] - 'Net Revenue- Construction Adhesives' is expected to reach $232.15 million, indicating a significant increase of +54.3% from the prior-year quarter [4] - 'Net Revenue- Engineering Adhesives' is estimated at $272.46 million, reflecting a decline of -27.1% from the year-ago quarter [5] EBITDA Estimates - 'Adjusted EBITDA- Engineering Adhesives' is projected to be $56.36 million, down from $68.82 million reported in the same quarter last year [5] - 'Adjusted EBITDA- Construction Adhesives' is expected to reach $37.82 million, compared to $22.63 million in the previous year [6] - 'Adjusted EBITDA- Hygiene, Health and Consumable Adhesives' is forecasted at $60.93 million, down from $65.22 million reported in the same quarter last year [6] Stock Performance - H. B. Fuller shares have experienced a -1% change in the past month, contrasting with a +0.6% move of the Zacks S&P 500 composite [6] - The company holds a Zacks Rank 3 (Hold), suggesting it is expected to mirror overall market performance in the near future [6]

Financial Performance - Adjusted EPS was $0.54[6], down compared to Q1 2024 due to lower operating income[14] - Adjusted EBITDA reached $114 million[6], but was negatively impacted by foreign exchange by approximately $5 million year-over-year[14] - Adjusted EBITDA margin was 14.5%[6], compared to 15.2% in the prior year[24] - Organic revenue increased by 1.9% year-over-year, driven by positive volume and pricing performance[6] - Net revenue decreased by 2.7% year-over-year[36], from $810.419 million to $788.663 million[22] Segment Performance - Hygiene, Health, and Consumable Adhesives saw organic revenue increase by 4% year-over-year[8] - Engineering Adhesives organic revenue declined by 2%[8], but adjusted EBITDA margin increased by 180 basis points year-over-year to 18.7%[8] - Building Adhesive Solutions organic sales increased by 2% year-over-year[8] Regional Performance - Americas organic revenue decreased by 1% year-over-year[12] - EIMEA (Europe, India, Middle East, and Africa) organic revenue increased by 4% year-over-year[12] - Asia-Pacific organic revenue increased by 7% year-over-year[12] 2025 Financial Guidance - The company expects net revenue to be down 2% to 4% year-over-year[16]; excluding the impact of Flooring, net revenue is expected to be up 1% to 2% year-over-year[16] - Adjusted EBITDA is expected to be in the range of $600 million to $625 million[16], representing a 1% to 5% increase year-over-year[16] - Adjusted EPS is expected to be in the range of $3.90 to $4.20[16], representing year-over-year growth of 2% to 9%[16]