
Fourth Quarter and Fiscal Year 2017 Results
Fiscal Year 2017 Diluted EPS
Excluding Impacts of the Royal Transaction, Fiscal Year Adjusted Diluted EPS
Fiscal Year 2018 Adjusted Diluted EPS Guidance set at
Items of Note for 2018 Guidance:
- More than 30 percent revenue growth versus 2017 fiscal year; 6 to 7 percent revenue growth on a pro forma basis2;
- Adjusted EBITDA3 of approximately
$465 million , an increase of about 60 percent versus 2017 and approximately 13 percent growth versus 2017 on a pro forma basis2; - Adjusted diluted EPS1a in the range of
$3.10 to $3.40 , an increase of 24 percent to 36 percent versus 2017; - Core tax rate of between 25 and 27 percent, reflecting an estimate based on the recently passed legislation;
- Cash flow from operating activities of approximately
$290 million . Capital expenditures planned at approximately$90 million ; - Free cash flow4 of approximately
$200 million of which approximately$170 million will be used to repay debt.
Items of Note for the Fourth Quarter of 2017:
- Our acquisition of Royal has expanded our position in markets that require highly specified adhesive solutions;
- Net revenue growth of 18 percent versus the fourth quarter of 2016. Adjusting for the Royal acquisition and the extra week in the fourth quarter of 2016, constant currency revenue5 growth was 12 percent, with organic revenue growth of 8 percent and organic volume growth of 6 percent;
- Net loss was
$7.6 million in the fourth quarter of 2017; adjusted net income, excluding the impact of the Royal transaction, was$38.9 million , or$0.75 1 per diluted share; - Adjusted EBITDA3 margin, excluding the impact of the Royal transaction, was up sequentially to 13.1 percent;
- Cash flow from operations for the 2017 fiscal year was
$136 million . Excluding the impact of Royal, cash flow from operations was$120 million in the fourth quarter and$197 million for the 2017 fiscal year; - Adjusting for the extra week in the fourth quarter of 2016, organic volume growth for Engineering Adhesives was 19 percent in the quarter;
Asia Pacific grew volume approximately 10 percent versus last year; theAmericas and EIMEA had solid mid-single digit volume growth and Construction Products saw improved top-line trends versus prior periods this year; - Construction Products adjusted EBITDA3 margin was up 550 basis points versus the prior year’s fourth quarter and back to double digits.
Fiscal 2018 Guidance:
We are introducing an adjusted EPS1a guidance range for 2018 of between
“Our 2018 guidance reflects a step change in performance as a result of the continuation of the strong underlying growth and profit improvement in our existing business combined with continued success of the Royal business which we acquired in the fourth quarter,” said
This guidance excludes between
Fourth Quarter 2017 Results:
Net loss for the fourth quarter of 2017 was
Net revenue for the fourth quarter of 2017 was
Gross profit margin was 24.7 percent. Adjusted gross profit margin6, excluding the impact of the Royal transaction, was 26.5 percent. Margins remained lower year-over-year due to continued increasing raw material costs relative to the timing of additional price increases. Selling, General and Administrative (SG&A) expense was
“We had continued strong revenue performance and excellent cash flow performance in the fourth quarter as organic growth was again very strong,” said Mr. Owens. “The pricing actions we implemented early in the year had a positive impact on our margins, however, as a result of Hurricane Harvey and continued environmental controls in
Balance Sheet and Cash Flow:
At the end of the fourth quarter of 2017, cash balances totaled
Year-To-Date Results:
Net income for the 2017 fiscal year was
Net revenue for the 2017 fiscal year was
Conference Call:
The Company will host an investor conference call to discuss fourth quarter results on
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 2018 outlook, which are unknown or have not yet occurred.
About
For 130 years,
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 Royal transaction may involve unexpected costs or liabilities; our business or stock price may suffer as a result of uncertainty surrounding the transaction; the substantial amount of debt we have incurred to finance our acquisition of Royal, our ability to repay or refinance it or incur additional debt in the future, our need for a significant amount of cash to service and repay the debt and to pay dividends on our common stock, and the effect of restrictions contained in our debt agreements that limit the discretion of management in operating the business or ability to pay dividends; various risks to stockholders of not receiving dividends and risks to our ability to pursue growth opportunities if we continue to pay dividends according to the current dividend policy; we may be unable to achieve expected synergies and operating efficiencies from the transaction within the expected time frames or at all; we may be unable to successfully integrate Royal’s operations into our own, or such integration may be more difficult, time consuming or costly than expected; following the transaction, revenues may be lower than expected, and operating costs, customer loss and business disruption (including, without limitation, difficulties in maintaining relationships with employees, customers, clients or suppliers) may be greater than expected; risks that the transaction disrupts current plans and operations and the potential difficulties in employee retention as a result of the transaction; 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
Media Contacts
News Media:
Kimberlee SinclairDirector, Global Communications
H.B. Fuller
1200 Willow Lake Boulevard
St. Paul, MN 55110
Office: +1 651-236-5823
Investors:
Barbara DoyleVice President, Investor Relations
H.B. Fuller
1200 Willow Lake Boulevard
St. Paul, MN 55110
Office: +1 651-236-5023
All Others:
H.B. Fuller Corporate1200 Willow Lake Boulevard
P.O. Box 64683
St. Paul, MN 55164-0683
+1 888-423-8553
Contact a Specialist
We're here when you need us, every step of the way.
