H.B. Fuller recently reported net income for the third quarter of 2010 of $19 million, or $0.38 per diluted share, compared to $35.4 million, or $0.72 per diluted share, in last year's third quarter. Net income for the third quarter 2009 included a significant one-time gain related to the settlement of a lawsuit. Excluding this settlement, net income in last year's third quarter was $0.48 per diluted share.
Net revenue for the third quarter of 2010 was $338.6 million, up 7.4% vs. the third quarter of 2009. Higher volume, higher average selling prices, and acquisitions positively impacted net revenue growth by 6.4, 2.5 and 1.6 percentage points, respectively. Unfavorable foreign currency translation reduced net revenue growth by 3.1 percentage points. Organic sales grew by 8.9% year-over-year.
"We faced many challenges in the third quarter, most notably rising raw material costs and raw material shortages, and achieved mixed results,” said Michele Volpi, president and CEO. “While we were successful in sourcing sufficient material to satisfy customer orders, our material costs escalated more than our prices and profit margins did not meet our expectations. Additionally, in the North America region, end-market demand contracted significantly at the beginning of the quarter; consequently, we did not achieve our volume expectations in the region. Amidst these challenges, we successfully maintained the overall growth momentum that is a key component of our strategic transformation. While we are disappointed in our bottom line performance this quarter, we believe that we have put in place the actions necessary to improve financial performance in the fourth quarter and beyond."
In North America, net revenue grew by 5.2% year-over-year, with Adhesives up 6.2% and Construction Products up 1.9%. Nearly all of the growth for the segment was organic. After recording stronger volume growth in the previous quarter, sales momentum (especially in Construction Products) slowed significantly at the start of the third quarter, but improved somewhat at the end of the quarter.
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H.B. Fuller Reports 7.4% Revenue Increase
September 16, 2010