H.B. Fuller Q2'FY14 net revenues up 4.8% to $544mn

26 Jun '14

2 min read

H.B. Fuller Company reported financial results for the second quarter that ended May 31, 2014.

Items of Note for the Second Quarter of 2014:

-Volume increased 5 percent compared to the prior year;

-Selling, General and Administrative (SG&A) expenses were tightly controlled, up less than 3 percent despite absorbing higher than planned Project ONE implementation costs;

-Adjusted diluted EPS of $0.781 was up 16 percent versus last year;

-On track to substantially complete business integration by the end of the third quarter 2014;

-Project ONE proceeding; North America adhesives business operating on SAP and stable;

-Completed closure of Pirmasens, Germany production site; completed consolidation of two production sites in Guangzhou, China;

Second Quarter 2014 Results:

Net income for the second quarter of 2014 was $20.5 million, or $0.40 per diluted share, versus net income of $25.9 million, or $0.51 per diluted share, in last year's second quarter. Adjusted diluted earnings per share in the second quarter of 2014 were $0.781, up 16 percent versus the prior year's adjusted result of $0.671.

Net revenue for the second quarter of 2014 was $544.0 million, up 4.8 percent versus the second quarter of 2013. Higher volume and positive foreign currency translation positively impacted net revenue growth by 4.8 and 0.3 percentage points, respectively. Lower average selling prices negatively impacted net revenue growth by 0.3 percentage points. Organic revenue grew by 4.5 percent year-over-year.

Gross profit margin was down approximately 200 basis points versus the prior year's result due to a variety of factors including excess costs associated with the business integration project in Europe and Project ONE "go-live" in North America, a temporary spike in the cost of certain raw materials in Europe, margin compression on certain products in our Construction Products business and adverse foreign currency exchange effects in Australia. SG&A expense was up only about 3 percent, or $2.6 million, versus the prior year's second quarter, despite absorbing unplanned and non-recurring costs related to Project ONE in North America.

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H.B. Fuller Company

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