H.B. Fuller Reports Fourth Quarter 2016 Results

Fourth Quarter Diluted EPS $0.76, Fourth Quarter Adjusted Diluted EPS $0.74¹;
Fiscal Year 2016 Diluted EPS $2.42, Fiscal Year Adjusted Diluted EPS $2.48¹;
Fiscal Year 2017 Adjusted Diluted EPS Guidance set at $2.57 to $2.77

ST. PAUL, Minn., Jan. 18, 2017 (GLOBE NEWSWIRE) -- H.B. Fuller Company (NYSE:FUL) today reported financial results for the fourth quarter that ended December 3, 2016.

Note that the 2016 fiscal year had 53 weeks of activity while fiscal years 2015 and 2017 are each the normal 52 weeks in length.²

Items of Note for the Fourth Quarter of 2016:

Net revenue grew 5 percent in the fourth quarter of 2016 versus the fourth quarter of 2015. The Engineering Adhesives and Asia Pacific segments delivered double digit revenue and volume growth, and the Americas and EIMEA segments showed expected solid revenue and volume growth;
Gross profit margin was 29.2 percent; adjusted gross profit margin³ of 29.3 percent improved 60 basis points versus the prior year’s fourth quarter, reflecting effective management of pricing and raw material costs;
Net income was $39.1 million; adjusted net income was $37.9 million, or $0.74¹ per diluted share, an increase of 7 percent versus the prior year;
Adjusted EBITDA margin⁴ was 13.9 percent; EIMEA adjusted EBITDA margin⁴ was 14 percent in the quarter, up 330 basis points from the prior year; Engineering Adhesives adjusted EBITDA margin exceeded 14 percent and Asia Pacific adjusted EBITDA margins were nearly 12 percent, all up solidly from prior year;
Cash flow from operating activities was $50 million in the fourth quarter, driven by solid net income; fiscal year 2016 cash flow from operations was $195 million.

Items of Note for 2017 Guidance:
Based on a comparable 52 week basis:

4 percent constant currency revenue growth offset by 3 percent negative foreign currency translation resulting in net 1 percent growth;
Adjusted diluted EPS in the range of $2.57 to $2.77, an increase of 10 percent at the mid-point;
Adjusted EBITDA margin of approximately 14 percent, an increase of 60 basis points;
Core tax rate of approximately 30 percent;
Capital expenditures planned at approximately $60 million.

Fiscal 2017 Guidance:
We are introducing an adjusted EPS guidance range of $2.57 to $2.77 for the 2017 year. The mid-point of the adjusted EPS range represents 10 percent earnings growth versus a comparable 52 week year in 2016 as communicated in December. Constant currency growth, on a comparable 52 week basis, is expected to be around 4 percent for 2017 versus the 2016 fiscal year, which will be offset by 3 percentage points of negative foreign currency translation. We expect to deliver adjusted EBITDA margin of approximately 14 percent, reflecting approximately $290 million of adjusted EBITDA in 2017. Our core tax rate, excluding the impact of discrete items, is expected to be about 30 percent. We expect to invest approximately $60 million in capital items in 2017.

This guidance excludes approximately $18 million of previously announced pre-tax restructuring charges as well as other unusual items that cannot be quantified at this time.

Fourth Quarter 2016 Results:
Net income for the fourth quarter of 2016 was $39.1 million, or $0.76 per diluted share, versus net income of $25.0 million, or $0.49 per diluted share, in last year’s fourth quarter. Adjusted diluted earnings per share in the fourth quarter of 2016 were $0.74¹, up 7 percent versus the prior year’s adjusted result of $0.69¹. Adjusted EBITDA⁴ was $79.8 million in the fourth quarter, or 13.9 percent of net revenue.

Net revenue for the fourth quarter of 2016 was $574.9 million, up 4.9 percent versus the fourth quarter of 2015. Higher volume/mix and an extra week positively impacted net revenue growth by 7.8 percentage points. Lower average selling prices and negative foreign currency translation negatively impacted net revenue growth by 2.4 and 0.5 percentage points, respectively. Constant currency revenue⁵ grew by 5.4 percent year-over-year.

During the quarter, margins improved through effective management of pricing and raw material costs and discretionary expenses. Gross profit margin was 29.2 percent. Adjusted gross profit margin³ was 29.3 percent, an increase of 60 basis points sequentially and versus the prior year. Selling, General and Administrative (SG&A) expense was $106.5 million. Adjusted SG&A expense⁶ was $109.0 million, up by approximately 4 percent versus last year on a comparable 13 week basis, primarily driven by acquisitions and strategic investments for growth, offset by discretionary expense control.

”We delivered on our strategic and financial commitments in the 2016 fiscal year and are positioned for further success in 2017,” said Jim Owens, H.B. Fuller president and chief executive officer. “We delivered double digit sales growth in Engineering Adhesives, we dramatically improved the EIMEA margin profile and we returned to volume growth in Americas Adhesives. The net result was an improvement of consolidated EBITDA margin by 60 basis points, 14 percent growth in adjusted earnings per share and strong operating cash flow – all in-line with our initial guidance for the year. Our plan for 2017 reflects double digit earnings improvement as a result of constant currency revenue growth and continued margin expansion. The 2017 fiscal year will be another year of strong progress toward our 2020 strategic targets of 17 percent EBITDA margin, sizable operating cash flow and solid organic growth.”

Fiscal Year 2016 Results:
Net income for the 2016 fiscal year was $124.1 million, or $2.42 per diluted share, versus income from continuing operations of $88.4 million, or $1.71 per diluted share, in the 2015 fiscal year. Adjusted diluted earnings per share in the 2016 fiscal year were $2.48¹, up 14 percent versus the prior year’s result of $2.17¹.

Net revenue for the 2016 fiscal year was $2,094.6 million, up 0.5 percent versus the 2015 fiscal year. Higher volume/mix and an extra week positively impacted net revenue growth by 3.9 percentage points. Lower average selling prices and negative foreign currency translation negatively impacted net revenue growth by 1.6 and 1.8 percentage points, respectively. Constant currency revenue⁴ grew by 2.3 percent year-over-year.

Balance Sheet and Cash Flow:
At the end of the fourth quarter of 2016, we had cash totaling $142 million and total debt of $706 million. This compares to third quarter 2016 cash and debt levels of $133 million and $712 million, respectively. Sequentially, net debt was down approximately $15 million. Cash flow from operations was positive $50 million in the fourth quarter. Capital expenditures were $14 million in the fourth quarter.

Conference Call:
The Company will host an investor conference call to discuss fourth quarter and full-year 2016 results on Thursday, January 19, 2017, at 9:30 a.m. Central U.S. time (10:30 a.m. Eastern U.S. time). The conference call audio and accompanying presentation slides will be available to all interested parties via a simultaneous webcast at www.hbfuller.com under the Investor Relations section. The event is scheduled to last one hour. For those unable to listen live, an audio replay of the event along with the accompanying presentation will be archived on the Company’s website.

Regulation G:
The information presented in this earnings release regarding segment operating income, adjusted gross profit, adjusted selling, general and administrative expense, adjusted diluted earnings per share, earnings before interest, taxes, depreciation, and amortization (EBITDA) and constant currency revenue does not conform to generally accepted accounting principles (GAAP) and should not be construed as an alternative to the reported results determined in accordance with GAAP. Management has included this non-GAAP information to assist in understanding the operating performance of the Company and its operating segments as well as the comparability of results. The non-GAAP information provided may not be consistent with the methodologies used by other companies. All non-GAAP information is reconciled with reported GAAP results in the tables below with the exception of our forward looking non-GAAP measures contained in our fiscal 2016 outlook, which are unknown and have not yet occurred.

About H.B. Fuller Company:
For over 125 years, H.B. Fuller has been a leading global adhesives provider focusing on perfecting adhesives, sealants and other specialty chemical products to improve products and lives. With fiscal 2016 net revenue of $2.1 billion, H.B. Fuller’s commitment to innovation brings together people, products and processes that answer and solve some of the world's biggest challenges. Our reliable, responsive service creates lasting, rewarding connections with customers in packaging, hygiene, general assembly, electronic and assembly materials, paper converting, woodworking, construction, automotive and consumer businesses. And our promise to our people connects them with opportunities to innovate and thrive. For more information, visit us at www.hbfuller.com and subscribe to our blog.

Safe Harbor for Forward-Looking Statements:
Certain statements in this document may be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are subject to various risks and uncertainties, including but not limited to the following: the Company's ability to effectively integrate and operate acquired businesses; the ability to effectively implement Project ONE; political and economic conditions; product demand; competitive products and pricing; costs of and savings from restructuring initiatives; geographic and product mix; availability and price of raw materials; the Company's relationships with its major customers and suppliers; changes in tax laws and tariffs; devaluations and other foreign exchange rate fluctuations; the impact of litigation and environmental matters; the effect of new accounting pronouncements and accounting charges and credits; and similar matters. Further information about the various risks and uncertainties can be found in the Company's SEC 10-K filing for the fiscal year ended November 28, 2015. All forward-looking information represents management's best judgment as of this date based on information currently available that in the future may prove to have been inaccurate. Additionally, the variety of products sold by the Company and the regions where the Company does business make it difficult to determine with certainty the increases or decreases in net revenue resulting from changes in the volume of products sold, currency impact, changes in product mix, and selling prices. However, management's best estimates of these changes as well as changes in other factors have been included.

H.B. FULLER COMPANY AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
In thousands, except per share amounts (unaudited)

	14 Weeks Ended			Percent of		13 Weeks Ended			Percent of
	December 3, 2016			Net Revenue		November 28, 2015			Net Revenue
Net revenue	$	574,907		100.0	%	$	548,104		100.0	%
Cost of sales		(407,086	)	(70.8	%)		(392,044	)	(71.5	%)
Gross profit		167,821		29.2	%		156,060		28.5	%

Selling, general and administrative expenses		(106,495	)	(18.6	%)		(103,846	)	(18.9	%)
Special charges, net		(1,856	)	(0.3	%)		(62	)	(0.0	%)
Other income (expense), net		54		0.0	%		(1,219	)	(0.2	%)
Interest expense		(7,645	)	(1.3	%)		(6,256	)	(1.1	%)
Income before income taxes and income from equity method investments		51,879		9.0	%		44,677		8.2	%

Income taxes		(14,873	)	(2.6	%)		(21,327	)	(3.9	%)

Income from equity method investments		2,221		0.4	%		1,750		0.3	%
Income from continuing operations		39,227		6.8	%		25,100		4.6	%

Net income including non-controlling interests		39,227		6.8	%		25,100		4.6	%

Net income attributable to non-controlling interests		(93	)	(0.0	%)		(109	)	(0.0	%)
Net income attributable to H.B. Fuller	$	39,134		6.8	%	$	24,991		4.6	%

Basic income per common share attributable to H.B. Fuller	$	0.78				$	0.50

Diluted income per common share attributable to H.B. Fuller	$	0.76				$	0.49

Weighted-average common shares outstanding:
Basic		50,180					50,143
Diluted		51,378					51,194

Dividends declared per common share	$	0.14				$	0.13

Selected Balance Sheet Information (subject to change prior to filing of the Company's Annual Report on Form 10-K)

	December 3, 2016		November 28, 2015		November 29, 2014
Cash & cash equivalents	$	142,245	$	119,168	$	77,569
Trade accounts receivable, net		351,130		364,704		341,307
Inventories		247,399		248,504		251,290
Trade payables		162,964		177,864		174,494
Total assets		2,058,254		2,042,252		1,869,006
Total debt		705,657		722,863		574,884

H.B. FULLER COMPANY AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
In thousands, except per share amounts (unaudited)

	53 Weeks Ended			Percent of		52 Weeks Ended			Percent of
	December 3, 2016			Net Revenue		November 28, 2015			Net Revenue
Net revenue	$	2,094,605		100.0	%	$	2,083,660		100.0	%
Cost of sales		(1,484,802	)	(70.9	%)		(1,515,617	)	(72.7	%)
Gross profit		609,803		29.1	%		568,043		27.3	%

Selling, general and administrative expenses		(407,638	)	(19.5	%)		(397,558	)	(19.1	%)
Special charges		168		0.0	%		(4,654	)	(0.2	%)
Other income (expense), net		(7,549	)	(0.3	%)		(2,465	)	(0.1	%)
Interest expense		(27,359	)	(1.3	%)		(25,021	)	(1.2	%)
Income from continuing operations before income taxes and income from equity method investments		167,425		8.0	%		138,345		6.6	%

Income taxes		(50,436	)	(2.4	%)		(55,855	)	(2.7	%)

Income from equity method investments		7,393		0.3	%		5,907		0.3	%
Income from continuing operations		124,382		5.9	%		88,397		4.2	%

Income from discontinued operations		-		0.0	%		(1,300	)	(0.1	%)
Net income including non-controlling interests		124,382		5.9	%		87,097		4.2	%

Net income attributable to non-controlling interests		(254	)	(0.0	%)		(417	)	(0.0	%)
Net income attributable to H.B. Fuller	$	124,128		5.9	%	$	86,680		4.2	%

Basic income per common share attributable to H.B. Fuller
Income from continuing operations		2.48					1.75
Income from discontinued operations		-					(0.03	)
	$	2.48				$	1.72

Diluted income per common share attributable to H.B. Fuller^a
Income from continuing operations		2.42					1.71 ¹
Income from discontinued operations		-					(0.03	)
	$	2.42				$	1.69

Weighted-average common shares outstanding:
Basic		50,136					50,274
Diluted		51,270					51,393

Dividends declared per common share	$	0.55				$	0.51

a Income per share amounts may not add due to rounding

H.B. FULLER COMPANY AND SUBSIDIARIES
REGULATION G RECONCILIATION
In thousands, except per share amounts (unaudited)

						% of					Adjusted			% of
			14 Weeks Ended			Net					14 Weeks Ended			Net
			December 3, 2016			Revenue		Adjustments			December 3, 2016			Revenue
Net revenue			$	574,907		100.0	%	$	-		$	574,907		100.0	%
Cost of sales				(407,086	)	(70.8	%)		(543	)		(406,543	)	(70.7	%)
Gross profit				167,821		29.2	%		543			168,364		29.3	%

Selling, general and administrative expenses				(106,495	)	(18.6	%)		2,520			(109,015	)	(19.0	%)

Acquisition and transformation related costs	(15	)
Facility exit costs	(1,841	)
Special charges, net				(1,856	)	(0.3	%)		(1,856	)		-		0.0	%

Other income (expense), net				54		0.0	%		-			54		0.0	%
Interest expense				(7,645	)	(1.3	%)		(58	)		(7,587	)	(1.3	%)
Income before income taxes and income from equity method investments				51,879		9.0	%		(63	)		51,816		9.0	%

Income taxes				(14,873	)	(2.6	%)		1,161			(16,034	)	(2.8	%)
- Effective tax rate				28.7	%							30.9	%

Income from equity method investments				2,221		0.4	%		-			2,221		0.4	%
Net income including non-controlling interests				39,227		6.8	%		(1,224	)		38,003		6.6	%

Net income attributable to non-controlling interests				(93	)	(0.0	%)		-			(93	)	(0.0	%)
Net income attributable to H.B. Fuller			$	39,134		6.8	%	$	(1,224	)	$	37,910		6.6	%


Basic income per common share attributable to H.B. Fuller			$	0.78				$	(0.02	)	$	0.76

Diluted income per common share attributable to H.B. Fuller			$	0.76				$	(0.02	)	$	0.74 ¹

Weighted-average common shares outstanding:
Basic				50,180					50,180			50,180
Diluted				51,378					51,378			51,378

H.B. FULLER COMPANY AND SUBSIDIARIES
REGULATION G RECONCILIATION
In thousands, except per share amounts (unaudited)

						% of					Adjusted			% of
			13 Weeks Ended			Net					13 Weeks Ended			Net
			November 28, 2015			Revenue		Adjustments			November 28, 2015			Revenue
Net revenue			$	548,104		100.0	%	$	47		$	548,151		100.0	%
Cost of sales				(392,044	)	(71.5	%)		(1,033	)		(391,011	)	(71.3	%)
Gross profit				156,060		28.5	%		1,080			157,140		28.7	%

Selling, general and administrative expenses				(103,846	)	(18.9	%)		(6,326	)		(97,520	)	(17.8	%)

Acquisition and transformation related costs	(120	)
Workforce reduction costs	39
Facility exit costs	19
Special charges, net				(62	)	(0.0	%)		(62	)		-		0.0	%

Other income (expense), net				(1,219	)	(0.2	%)		-			(1,219	)	(0.2	%)
Interest expense				(6,256	)	(1.1	%)		(75	)		(6,181	)	(1.1	%)
Income before income taxes and income from equity method investments				44,677		8.2	%		7,543			52,220		9.5	%

Income taxes				(21,327	)	(3.9	%)		(2,636	)		(18,691	)	(3.4	%)
- Effective tax rate				47.7	%				34.9	%		35.8	%

Income from equity method investments				1,750		0.3	%		-			1,750		0.3	%
Net income including non-controlling interests				25,100		4.6	%		10,179			35,279		6.4	%

Net income attributable to non-controlling interests				(109	)	(0.0	%)		-			(109	)	(0.0	%)
Net income attributable to H.B. Fuller			$	24,991		4.6	%	$	10,179		$	35,170		6.4	%


Basic income per common share attributable to H.B. Fuller			$	0.50				$	0.20		$	0.70

Diluted income per common share attributable to H.B. Fuller			$	0.49				$	0.20		$	0.69 ¹

Weighted-average common shares outstanding:
Basic				50,143					50,143			50,143
Diluted				51,194					51,194			51,194

H.B. FULLER COMPANY AND SUBSIDIARIES
REGULATION G RECONCILIATION
In thousands, except per share amounts (unaudited)

						% of					Adjusted			% of
			53 Weeks Ended			Net					53 Weeks Ended			Net
			December 3, 2016			Revenue		Adjustments			December 3, 2016			Revenue
Net revenue			$	2,094,605		100.0	%	$	-		$	2,094,605		100.0	%
Cost of sales				(1,484,802	)	(70.9	%)		(4,442	)		(1,480,360	)	(70.7	%)
Gross profit				609,803		29.1	%		4,442			614,245		29.3	%

Selling, general and administrative expenses				(407,638	)	(19.5	%)		697			(408,335	)	(19.5	%)

Acquisition and transformation related costs	(258	)
Workforce reduction costs	2
Facility exit costs	614
Other related costs	(190	)
Special charges, net				168		0.0	%		168			-		0.0	%

Other income (expense), net				(7,549	)	(0.3	%)		(684	)		(6,865	)	(0.3	%)
Interest expense				(27,359	)	(1.3	%)		(280	)		(27,079	)	(1.3	%)
Income from continuing operations before income taxes and income from equity method investments				167,425		8.0	%		4,541			171,966		8.2	%

Income taxes				(50,436	)	(2.4	%)		1,656			(52,092	)	(2.4	%)
-Effective tax rate				30.1	%				-36.5	%		30.3	%

Income from equity method investments				7,393		0.3	%		-			7,393		0.3	%
Income from continuing operations				124,382		5.9	%		2,885			127,267		6.1	%

Net income including non-controlling interests				124,382					2,885			127,267

Net income attributable to non-controlling interests				(254	)	(0.0	%)		-			(254	)	(0.0	%)
Net income attributable to H.B. Fuller			$	124,128		5.9	%	$	2,885		$	127,013		6.1	%


Basic income per common share attributable to H.B. Fuller^a			$	2.48				$	0.06		$	2.53

Diluted income per common share attributable to H.B. Fuller			$	2.42				$	0.06		$	2.48 ¹

Weighted-average common shares outstanding:
Basic				50,136					50,136			50,136
Diluted				51,270					51,270			51,270

a Income per share amounts may not add due to rounding

H.B. FULLER COMPANY AND SUBSIDIARIES
REGULATION G RECONCILIATION
In thousands, except per share amounts (unaudited)

						% of					Adjusted			% of
			52 Weeks Ended			Net					52 Weeks Ended			Net
			November 28, 2015			Revenue		Adjustments			November 28, 2015			Revenue
Net revenue			$	2,083,660		100.0	%	$	1,002		$	2,084,662		100.0	%
Cost of sales				(1,515,617	)	(72.7	%)		(9,205	)		(1,506,412	)	(72.3	%)
Gross profit				568,043		27.3	%		10,207			578,250		27.7	%

Selling, general and administrative expenses				(397,558	)	(19.1	%)		(12,245	)		(385,313	)	(18.5	%)

Acquisition and transformation related costs	(715	)
Workforce reduction costs	37
Facility exit costs	(3,664	)
Other related costs	(312	)
Special charges				(4,654	)	(0.2	%)		(4,654	)		-		0.0	%

Other income (expense), net				(2,465	)	(0.1	%)		-			(2,465	)	(0.1	%)
Interest expense				(25,021	)	(1.2	%)		(260	)		(24,761	)	(1.2	%)
Income before income taxes and income from equity method investments				138,345		6.6	%		27,366			165,711		7.9	%

Income taxes				(55,855	)	(2.7	%)		3,935			(59,790	)	(2.9	%)
- Effective tax rate				40.4	%				-14.4	%		36.1	%

Income from equity method investments				5,907		0.3	%		-			5,907		0.3	%
Income from continuing operations				88,397		4.2	%		23,431			111,828		5.4	%

Income (loss) from discontinued operations				(1,300	)				(1,300	)		-
Net income including non-controlling interests				87,097		4.2	%		24,731			111,828		5.4	%

Net income attributable to non-controlling interests				(417	)	(0.0	%)		-			(417	)	(0.0	%)
Net income attributable to H.B. Fuller			$	86,680		4.2	%	$	24,731		$	111,411		5.3	%

Basic income per common share attributable to H.B. Fuller^a
Income from continuing operations				1.75					0.47			2.22
Income (loss) from discontinued operations				(0.03	)				0.03			-
			$	1.72				$	0.49		$	2.22
Diluted income per common share attributable to H.B. Fuller^a
Income from continuing operations				1.71					0.46			2.17 ¹
Income (loss) from discontinued operations				(0.03	)				0.03			-
			$	1.69				$	0.48		$	2.17

Weighted-average common shares outstanding:
Basic				50,274					50,274			50,274
Diluted				51,393					51,393			51,393

a Income per share amounts may not add due to rounding

H.B. FULLER COMPANY AND SUBSIDIARIES
ADJUSTED EARNING PER SHARE RECONCILIATION
In thousands (unaudited)

	14 Weeks ended December 3, 2016									13 Weeks ended November 28, 2015

	Income									Income
	before				Income		Diluted			before			Income		Diluted
	Income Tax				Taxes		EPS			Income Tax			Taxes		EPS
Income from continuing operations	$	54,007		$	14,873		$	0.76		$	46,318	$	21,327		$	0.49

Special charges, net		1,856			452			0.03			62		(698	)		0.01
Acquisition project costs^b		500			141			0.01			3,129		106			0.06
Construction Products^c		128			45			-			350		(17	)		0.01
EIMEA business integration costs^d		1,210			92			0.02			3,393		253			0.06
Tonsan call option agreement^e		(5,173	)		-			(0.10	)		-		-			-
Discrete Tax Impact^f		-			-			-			-		(2,412	)		0.05
Other^g		1,416			431			0.02			610		132			0.01
Adjusted Earnings	$	53,944		$	16,034		$	0.74		$	53,862	$	18,691		$	0.69


	53 Weeks ended December 3, 2016									52 Weeks ended November 28, 2015

	Income									Income
	before				Income		Diluted			before			Income		Diluted
	Income Tax				Taxes		EPS			Income Tax			Taxes		EPS^a
Income from continuing operations	$	174,564		$	50,436		$	2.42		$	143,835	$	55,855		$	1.71

Special charges, net		(168	)		(232	)		-			4,654		(49	)		0.09
Acquisition project costs^b		2,633			640			0.04			7,642		659			0.14
Construction Products^c		128			45			-			4,772		1,668			0.06
EIMEA business integration costs^d		3,801			289			0.07			5,753		433			0.10
Tonsan call option agreement^e		(5,370	)		-			(0.10	)		-		-			-
Discrete Tax Impact^f		-			-			-			-		-			-
Other^g		3,517			914			0.05			4,545		1,224			0.06
Adjusted Earnings	$	179,105		$	52,092		$	2.48		$	171,201	$	59,790		$	2.17

a Income per share amounts may not add due to rounding
b Costs related to integrating and accounting for past and potential acquisitions
c Costs related to the ramp up of new business with Lowes and the combination of facilities in Illinois
d Costs related to EIMEA restructuring announced November 2015, plant inefficiencies and inventory variances
e Non-cash costs related to accretion and revaluation of the Tonsan call option agreement
f Catch-up of full-year tax impact due to a rate change at the end of 2015. Item adjusted only in the fourth quarter of 2015, not for the full year 2015 result
g Costs related to the completion and start-up of a new electronics facility in Yantai China, Project ONE development costs, a planned facility closure in the Philippines and the exit from the windows business in Korea

H.B. FULLER COMPANY AND SUBSIDIARIES
SEGMENT FINANCIAL INFORMATION
In thousands (unaudited)


	14 Weeks Ended			13 Weeks Ended
	December 3, 2016			November 28, 2015
Net Revenue:
Americas Adhesives	$	217,639		$	212,638
EIMEA		150,328			144,524
Asia Pacific		70,361			63,130
Construction Products		64,235			66,002
Engineering Adhesives		72,344			61,810
Total H.B. Fuller	$	574,907		$	548,104

Segment Operating Income:⁷
Americas Adhesives	$	31,936		$	36,758
EIMEA		14,502			6,813
Asia Pacific		6,111			4,115
Construction Products		(2,147	)		2,977
Engineering Adhesives		10,924			1,551
Total H.B. Fuller	$	61,326		$	52,214

Depreciation Expense:
Americas Adhesives	$	3,878		$	4,030
EIMEA		3,898			3,999
Asia Pacific		1,384			1,359
Construction Products		1,567			1,586
Engineering Adhesives		1,733			1,621
Total H.B. Fuller	$	12,460		$	12,595

Amortization Expense:
Americas Adhesives	$	1,138		$	1,038
EIMEA		1,222			1,163
Asia Pacific		478			302
Construction Products		2,507			2,345
Engineering Adhesives		2,641			2,090
Total H.B. Fuller	$	7,986		$	6,938

EBITDA:⁴
Americas Adhesives	$	36,952		$	41,826
EIMEA		19,622			11,975
Asia Pacific		7,973			5,776
Construction Products		1,927			6,908
Engineering Adhesives		15,298			5,262
Total H.B. Fuller	$	81,772		$	71,747

Segment Operating Margin:⁷
Americas Adhesives		14.7	%		17.3	%
EIMEA		9.6	%		4.7	%
Asia Pacific		8.7	%		6.5	%
Construction Products		(3.3	%)		4.5	%
Engineering Adhesives		15.1	%		2.5	%
Total H.B. Fuller		10.7	%		9.5	%

EBITDA Margin:⁴
Americas Adhesives		17.0	%		19.7	%
EIMEA		13.1	%		8.3	%
Asia Pacific		11.3	%		9.1	%
Construction Products		3.0	%		10.5	%
Engineering Adhesives		21.1	%		8.5	%
Total H.B. Fuller		14.2	%		13.1	%

Adjusted EBITDA⁴
Americas Adhesives	$	37,336		$	42,019
EIMEA		21,039			15,495
Asia Pacific		8,177			6,011
Construction Products		2,967			7,322
Engineering Adhesives		10,235			8,306
Total H.B. Fuller	$	79,754		$	79,153

Adjusted EBITDA Margin⁴
Americas Adhesives		17.2	%		19.8	%
EIMEA		14.0	%		10.7	%
Asia Pacific		11.6	%		9.5	%
Construction Products		4.6	%		11.1	%
Engineering Adhesives		14.1	%		13.4	%
Total H.B. Fuller		13.9	%		14.4	%

H.B. FULLER COMPANY AND SUBSIDIARIES
SEGMENT FINANCIAL INFORMATION
In thousands (unaudited)


	53 Weeks Ended			52 Weeks Ended
	December 3, 2016			November 28, 2015
Net Revenue:
Americas Adhesives	$	806,062		$	830,808
EIMEA		545,135			549,569
Asia Pacific		241,827			230,671
Construction Products		256,346			272,693
Engineering Adhesives		245,235			199,919
Total H.B. Fuller	$	2,094,605		$	2,083,660

Segment Operating Income:⁷
Americas Adhesives	$	125,979		$	127,778
EIMEA		40,121			15,117
Asia Pacific		15,410			12,953
Construction Products		3,265			13,766
Engineering Adhesives		17,390			871
Total H.B. Fuller	$	202,165		$	170,485

Depreciation Expense:
Americas Adhesives	$	14,730		$	15,716
EIMEA		16,795			15,224
Asia Pacific		5,879			5,586
Construction Products		5,495			5,842
Engineering Adhesives		6,291			5,537
Total H.B. Fuller	$	49,190		$	47,905

Amortization Expense:
Americas Adhesives	$	4,249		$	4,174
EIMEA		4,646			4,741
Asia Pacific		1,605			1,344
Construction Products		9,482			9,479
Engineering Adhesives		8,513			7,246
Total H.B. Fuller	$	28,495		$	26,984

EBITDA:⁴
Americas Adhesives	$	144,958		$	147,668
EIMEA		61,562			35,082
Asia Pacific		22,894			19,883
Construction Products		18,242			29,087
Engineering Adhesives		32,194			13,654
Total H.B. Fuller	$	279,850		$	245,374

Segment Operating Margin:⁷
Americas Adhesives		15.6	%		15.4	%
EIMEA		7.4	%		2.8	%
Asia Pacific		6.4	%		5.6	%
Construction Products		1.3	%		5.0	%
Engineering Adhesives		7.1	%		0.4	%
Total H.B. Fuller		9.7	%		8.2	%

EBITDA Margin:⁴
Americas Adhesives		18.0	%		17.8	%
EIMEA		11.3	%		6.4	%
Asia Pacific		9.5	%		8.6	%
Construction Products		7.1	%		10.7	%
Engineering Adhesives		13.1	%		6.8	%
Total H.B. Fuller		13.4	%		11.8	%

Adjusted EBITDA⁴
Americas Adhesives	$	145,890		$	149,285
EIMEA		63,912			41,940
Asia Pacific		24,061			20,514
Construction Products		19,473			34,393
Engineering Adhesives		27,607			21,695
Total H.B. Fuller	$	280,943		$	267,827

Adjusted EBITDA Margin⁴
Americas Adhesives		18.1	%		18.0	%
EIMEA		11.7	%		7.6	%
Asia Pacific		9.9	%		8.9	%
Construction Products		7.6	%		12.6	%
Engineering Adhesives		11.3	%		10.9	%
Total H.B. Fuller		13.4	%		12.8	%

H.B. FULLER COMPANY AND SUBSIDIARIES
SEGMENT FINANCIAL INFORMATION
NET REVENUE GROWTH
(unaudited)

14 Weeks Ended December 3, 2016

	Americas Adhesives		EIMEA		Asia Pacific		Construction Products			Engineering Adhesives		Total HBF
Price	(4.1	%)	(1.1	%)	(5.2	%)	0.8	%		(0.6	%)	(2.4	%)
Volume / Mix	6.5	%	5.8	%	16.0	%	(4.2	%)		21.8	%	7.8	%
Constant Currency Growth	2.4	%	4.7	%	10.8	%	(3.4	%)		21.2	%	5.4	%

F/X	0.0	%	(0.7	%)	0.6	%	0.7	%		(4.2	%)	(0.5	%)
	2.4	%	4.0	%	11.4	%	(2.7	%)		17.0	%	4.9	%




53 Weeks Ended December 3, 2016

	Americas Adhesives		EIMEA		Asia Pacific		Construction Products		Engineering Adhesives			Total HBF
Price	(2.9	%)	(1.0	%)	(2.3	%)	0.9	%	(0.6		%)	(1.6	%)
Volume / Mix	0.2	%	3.0	%	10.8	%	(6.7	%)	27.9		%	3.9	%
Constant Currency Growth	(2.7	%)	2.0	%	8.5	%	(5.8	%)	27.3		%	2.3	%

F/X	(0.3	%)	(2.8	%)	(3.7	%)	(0.2	%)	(4.6		%)	(1.8	%)
	(3.0	%)	(0.8	%)	4.8	%	(6.0	%)	22.7		%	0.5	%

H.B. FULLER COMPANY AND SUBSIDIARIES
REGULATION G RECONCILIATION
In thousands (unaudited)


	14 Weeks Ended			13 Weeks Ended
	December 3, 2016			November 28, 2015
Net income including non-controlling interests	$	39,227		$	25,100

Income from equity method investments		(2,221	)		(1,750	)
Income taxes		14,873			21,327
Interest expense		7,645			6,256
Other income (expense), net		(54	)		1,219
Special charges		1,856			62
Segment Operating Income⁷		61,326			52,214

Depreciation expense		12,460			12,595
Amortization expense		7,986			6,938
EBITDA⁴	$	81,772		$	71,747

EBITDA margin⁴		14.2	%		13.1	%

Non-recurring costs		(2,018	)		7,404
Adjusted EBITDA⁴	$	79,754		$	79,151

Adjusted EBITDA margin⁴		13.9	%		14.4	%



	53 Weeks Ended			52 Weeks Ended
	December 3, 2016			November 28, 2015
Net income including non-controlling interests	$	124,382		$	87,097

Income from discontinued operations		-			1,300
Income from equity method investments		(7,393	)		(5,907	)
Income taxes		50,436			55,855
Interest expense		27,359			25,021
Other income (expense), net		7,549			2,465
Special charges		(168	)		4,654
Segment Operating Income⁷		202,165			170,485

Depreciation expense		49,190			47,906
Amortization expense		28,495			26,984
EBITDA⁴	$	279,850		$	245,375

EBITDA margin⁴		13.4	%		11.8	%

Non-recurring costs		1,093			22,452
Adjusted EBITDA⁴	$	280,943		$	267,827

Adjusted EBITDA margin⁴		13.4	%		12.8	%

¹ Adjusted diluted earnings per share (EPS) is a non-GAAP financial measure and excludes the following non-recurring costs listed on the adjusted earnings per share reconciliation table above: special charges related to the “business integration”; restructuring in EIMEA related to operational efficiency improvement projects; and the start-up of a new electronics facility in Yantai China. We have not included a reconciliation of adjusted EPS to EPS as part of our guidance because all potential adjustments are not known at this time.
² The fourth quarter of 2016 had 14 weeks while the fourth quarter of 2015 was the normal 13 weeks in length. Year-over-year comparisons below are provided on an as reported basis. We estimate that the extra week in fiscal year 2016 increased the full-year results by approximately 2 percent.
³Adjusted gross profit and adjusted gross profit margin are non-GAAP financial measures. Adjusted gross profit excludes non-recurring costs associated with: integrating and accounting for past and present acquisitions; the closing of a facility in the Philippines; combining Construction Products facilities in Illinois; ramping up new business with Lowes; the start-up of a new electronics facility in Yantai China; and inventory adjustments and plant inefficiencies in EIMEA related to the business integration. Adjusted gross profit margin is defined as adjusted gross profit divided by adjusted net revenue.
⁴EBITDA is a non-GAAP financial measure defined on a consolidated basis as gross profit, less SG&A expense, plus depreciation expense, plus amortization expense. Adjusted EBITDA excludes items listed on the adjusted earnings per share reconciliation table above. On a segment basis it is defined as operating income, plus depreciation expense, plus amortization expense. Adjusted EBITDA margin is defined as adjusted EBITDA divided by net revenue. We have not included a reconciliation of adjusted EBITDA to EBITDA or net income as part of our guidance because all of the potential adjustments are not known at this time.
⁵Constant currency revenue is a non-GAAP financial measure defined as changes in revenue due to price, volume and mix and excludes revenue changes driven by foreign currency translation. The schedule above reconciles each component of net revenue growth.
⁶ Adjusted SG&A expense is a non-GAAP financial measure which excludes non-recurring costs associated with: integrating and accounting for past and present acquisitions; ramping up new business with Lowes; restructuring charges in EIMEA related to operational efficiency improvement projects and the prior year’s implementation of SAP in North America.
⁷ Segment operating income is defined as gross profit less SG&A expense. Segment operating margin is defined as segment operating income divided by net revenue.

H.B. Fuller Reports Fourth Quarter 2016 Results

Coordonnées