H.B. Fuller Co. reported financial results for its second quarter that ended June 1, 2024. The company’s net revenue for the second quarter of fiscal 2024 was $917 million, up 2.1% versus the second quarter of fiscal 2023. Volume increased net revenue by 3.3% and was offset by anticipated pricing adjustments, resulting in flat organic revenue year-on-year. Volume grew in all three global business units. Foreign currency translation reduced net revenue by 1.7%, and acquisitions increased net revenue by 3.9%. 

Gross profit in the second quarter of fiscal 2024 was $282 million. Adjusted gross profit was $286 million. Adjusted gross profit margin of 31.1% increased 210 basis points year-on-year. The net impact of pricing and raw material cost actions as well as restructuring benefits and volume leverage principally drove the year-on-year increase in adjusted gross profit margin. 

Selling, general and administrative (SG&A) expense was $181 million in the second quarter of fiscal 2024 and adjusted SG&A was $173 million versus $159 million in the second quarter of fiscal 2023. The impact of acquisitions, inflation in wages and services, and higher variable compensation expense, partially offset by restructuring savings, drove the year-on-year increase in adjusted SG&A. 

Net income attributable to H.B. Fuller for the second quarter of fiscal 2024 was $51 million, or $0.91 per diluted share. Adjusted net income attributable to H.B. Fuller for the second quarter of fiscal 2024 was $64 million. Adjusted EPS was $1.12 per diluted share, up 20% year-on-year driven by strong operating income growth. 

Adjusted EBITDA in the second quarter of fiscal 2024 was $157 million, up 10% year-on-year driven principally by the net impact of pricing and raw material cost actions, volume growth, restructuring savings, and benefits from recent acquisitions. Adjusted EBITDA margin increased 120 basis points year-on-year to 17.1%. 

H.B. Fuller President and CEO Celeste Mastin said, “Our strong second quarter financial performance reflects the team’s steadfast commitment to execution while driving our long-term strategy to focus on more profitable, higher growth segments of the market. We continue to innovate and deliver customized value-enhancing solutions to our customers while acquiring highly profitable, fast-growing businesses, like ND Industries, to expand our market presence in the most differentiated segments. As we execute our restructuring program focused on streamlining our global footprint, we are driving sustainable enhancements to our cost structure and improving our ROIC. In a large total addressable market, where we win one application at a time, we continue to meaningfully move the needle and remain on track to deliver adjusted EBITDA margin greater than 20 percent in the next three to five years.” 

As a result of its strong first half performance and recent acquisition activity, partially offset by the strengthening US Dollar, H.B. Fuller is updating its previously communicated financial guidance for fiscal 2024 as follows: 

• Net revenue growth is now expected to be in the range of up 2% to 4% with organic revenue flat to up 2% year-on-year 
• Adjusted EBITDA is now expected to be in the range of $620 million to $640 million, equating to growth of approximately 7% to 10% year-on-year, and for third quarter adjusted EBITDA to be in the range of $165 million to $175 million 
• Net interest expense is now expected to be approximately $130 million 
• Adjusted EPS (diluted) is now expected to be in the range of $4.20 to $4.45, equating to year-on-year growth of between 9% and 15%;
• Operating cash flow is still expected to be between $300 million and $350 million

Learn more about H.B. Fuller at www.hbfuller.com.