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Adjusted EPS zooms 45% at adhesives producer H.B. Fuller

29 Sep '15

3 min read

For the third fiscal quarter ended August 29, 2015, adjusted diluted earnings per share zoomed 45 per cent year over year at industrial adhesives producer H.B. Fuller Company.

“Adjusted diluted earnings per share in the third quarter of fiscal 2015 were $0.61, up 45 per cent versus the prior fiscal's third quarter's adjusted result of $0.42,” it said in a press release.

According to H.B. Fuller, the primary driver of the lower than expected earnings was lower than expected revenue in the Americas operating segment.

Net income for the reporting quarter was $26.8 million or $0.52 per diluted share compared to net income of $4.0 million, or $0.08 per diluted share, in last fiscal's same period.

Net revenue for the third quarter of fiscal 2015 amounted to $524.1 million, down 0.5 per cent as against the same quarter of the earlier fiscal.

“Higher volume and higher average selling prices positively impacted net revenue growth by 6.2 and 0.5 percentage points, respectively,” the company added.

“Revenue generation in the Americas operating segment is running below prior year levels primarily due to generally weak end market conditions,” it explained.

Foreign currency translation negatively impacted net revenue growth by 7.2 percentage points and at the same time, constant currency revenue grew by 6.7 per cent year over year.

Adjusted SG&A expense was up about 4 per cent vis-a-vis the comparable quarter of fiscal 2014, but, excluding the SG&A added by the Tonsan acquisition, adjusted SG&A expense was down 6 per cent.

Adjusted EBITDA in the quarter under review was $72 million and stood at 13.8 per cent of adjusted net revenue, up 31 per cent and 330 basis points, respectively, from the prior fiscal third quarter.

“Special charges and non-recurring items were significantly reduced in the current quarter versus the prior year, driving substantial improvement of year on year GAAP earnings,” the company informed.

At the end of the third quarter of fiscal 2015, the company had cash totaling $86 million and total debt of $728 million.

This compares to second quarter of fiscal 2015 cash and debt levels of $79 million and $737 million, respectively.

Cash flow from operations was a positive $37 million in the third quarter of fiscal 2015 and $153 million for the year-to-date, while capex amounted to $10 million in the third quarter and $49 million for the year-to-date.

CEO Jim Owens said, “We posted an adjusted EBITDA margin of nearly 14 percent in the third quarter and we expect further margin improvement in the fourth quarter.”

“The operational problems that hampered us a year ago are largely behind us and our focus is to re-establish growth momentum in the Americas and EIMEA operating segments and drive productivity gains”, he added. (AR)

Fibre2Fashion News Desk – India