Exhibit 99.1
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Corporate Headquarters P.O 64683 St. Paul, Minnesota 55164-0683 | | Contact: | | Scott Dvorak Investor Relations 651-236-5150 |
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| NEWS | | For Immediate Release | | September 21, 2004 |
Note: H.B. Fuller will host a conference call September 22, 2004 at 9:30 a.m. central time (10:30 a.m. eastern time). The call can be heard live over the Internet at H.B. Fuller’s website at http://www.hbfuller.com under the section shareholder information or atwww.streetevents.com. A replay is also available.
H.B. Fuller Reports Third Quarter Results
ST. PAUL, Minn. - H.B. Fuller Company (NYSE: FUL) today reported operating results for the third quarter that ended August 28, 2004.
Third quarter net income was $9.5 million or $0.33 per share (diluted). Last year’s third quarter net income was $12.3 million or $0.43 per share (diluted), which included $0.02 per share (diluted) of net income from gains on sale of assets, net of severance and other costs related to the restructuring initiative announced in the early part of 2002. Excluding the net income related to the restructuring initiative, last year’s third quarter net income totaled $11.8 million or $0.41 per share (diluted).
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| | | | | Net income
| | | EPS (diluted)
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As reported | | Q3, 2004 | | $ | 9.5 million | | | $ | 0.33 | |
| | | Q3, 2003 | | $ | 12.3 million | | | $ | 0.43 | |
| | | Change | | | - 22.5 | % | | | -23.3 | % |
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| | | | | Net income
| | | EPS (diluted)
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Excluding special items related to the restructuring initiative in 2003 | | Q3, 2004 | | $ | 9.5 million | | | $ | 0.33 | |
| | | Q3, 2003 | | $ | 11.8 million | | | $ | 0.41 | |
| | | Change | | | -19.4 | % | | | -19.5 | % |
Third Quarter Net Revenue
Net revenue for the third quarter of 2004 was $349.5 million, an 8.5 percent increase from the third quarter of 2003. Improved volumes and positive currency effects contributed to increases of 4.7 percent and 1.9 percent, respectively. The acquisition announced earlier this year accounted for an increase in revenue of 2.5 percent and reduced pricing caused a decrease of 0.6 percent.
Third Quarter Segment Net Revenue
| | • | Global Adhesives’ net revenue increased 8.7 percent compared to last year. |
| | • | Volume increased 3.5 percent. |
| | • | Prices decreased 0.8 percent. |
| | • | Currency had a positive impact of 2.3 percent. |
| | • | Acquisition had a positive impact of 3.7 percent. |
| | • | Full-Value/ Specialty Group’s net revenue increased 8.1 percent compared to last year. |
| | • | Volume increased 7.4 percent. |
| | • | Prices decreased 0.1 percent. |
| | • | Currency had a positive impact of 0.8 percent. |
Al Stroucken, CEO, said, “Our focus for the remainder of the year will be to deal effectively with the run- up in raw material costs by putting a strong effort behind improved operational efficiencies and working with our customers to raise our selling prices, while securing the positive trend of our top-line growth.”
Nine Month Results
For the first nine months of 2004, net income was $25.8 million or $0.89 per share (diluted). For the same period last year, net income was $25.3 million, or $0.88 per share (diluted), which included $0.18 per share (diluted) of net charges for severance and other costs relating to the restructuring initiative. Excluding the special charges related to the restructuring initiative, last year’s first nine months net income was $30.4 million or $1.06 per share (diluted).
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| | | Nine Months
| | Net income
| | | EPS (diluted)
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As reported | | YTD, 2004 | | $ | 25.8 million | | | $ | 0.89 | |
| | | YTD, 2003 | | $ | 25.3 million | | | $ | 0.88 | |
| | | Change | | | 2.1 | % | | | 1.1 | % |
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| | | Nine Months
| | Net income
| | | EPS (diluted)
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Excluding special items related to the restructuring initiative in 2003 | | YTD, 2004 | | $ | 25.8 million | | | $ | 0.89 | |
| | | YTD, 2003 | | $ | 30.4 million | | | $ | 1.06 | |
| | | Change | | | -15.0 | % | | | -16.0 | % |
Net revenue for the first nine months of 2004 was $1,031.2 million, a 9.6 percent increase from the first nine months of 2003. Improved volumes and positive currency effects contributed to increases of 4.9 percent and 3.6 percent, respectively. The acquisition announced earlier this year accounted for an increase in revenue of 1.8 percent and reduced pricing caused a decrease of 0.7 percent.
Some of the information presented above reflects adjustments to ‘As reported’ results to exclude certain special items related to the company’s restructuring initiative. This adjusted information should not be construed as an alternative to the reported results determined in accordance with accounting principles generally accepted in the United States of America. It is provided solely to assist in an investor’s understanding of the impact of the special items on the comparability of the company’s operations. A reconciliation of the company’s results excluding the special items related to the company’s restructuring initiatives and the company’s reported results is provided in the accompanying consolidated financial information.
Safe Harbor for Forward-Looking Statement
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: political and economic conditions; product demand; competitive products and pricing; costs of and savings from restructuring initiatives; 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 (particularly with respect to the euro, the British pound, the Japanese yen, the Australian and Canadian dollars, the Argentine peso and the Brazilian real); 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 SEC 10-K filing of February 25, 2004 and 10-Q filings of April 6 and July 2, 2004. All forward-looking information represents management’s best judgment as of this date based on information currently available that in the future may prove to have been inaccurate. Additionally, the variety of products sold by the company and the regions where the company does business makes it difficult to determine with certainty the increases or decreases in sales resulting from changes in the volume of products sold, currency impact, changes in product mix and selling prices. However, management’s best estimates of these changes as well as changes in other factors have been included.References to volume changes include volume and product mix changes, combined.
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H.B. Fuller Company is a worldwide manufacturer and marketer of adhesives, sealants, coatings, paints and other specialty chemical products, with fiscal 2003 net sales of $1,287 million. Common stock is traded on the NYSE exchange under the symbol FUL. For more information about the Company, visit their website at: http://www.hbfuller.com.
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H.B. FULLER COMPANY AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
In thousands, except per share amounts (unaudited)
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| | | 13 Weeks
Ended
August 28, 2004
| | | 13 Weeks
Ended
August 30, 2003
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Net revenue | | $ | 349,514 | | | $ | 322,089 | |
Cost of sales | | | (255,064 | ) | | | (235,023 | ) |
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Gross profit | | | 94,450 | | | | 87,066 | |
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Selling, general and administrative expenses | | | (79,078 | ) | | | (67,838 | ) |
Gains (losses) from asset disposals, net | | | (436 | ) | | | 1,937 | |
Interest expense | | | (3,205 | ) | | | (3,662 | ) |
Other expense, net | | | (1,139 | ) | | | (944 | ) |
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Income before income taxes, minority interests and income from equity investments | | | 10,592 | | | | 16,559 | |
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Income taxes | | | (1,806 | ) | | | (4,804 | ) |
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Minority interests in consolidated income | | | 283 | | | | (30 | ) |
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Income from equity investments | | | 447 | | | | 561 | |
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Net Income | | $ | 9,516 | | | $ | 12,286 | |
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Basic income per common share | | $ | 0.33 | | | $ | 0.43 | |
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Diluted income per common share | | $ | 0.33 | | | $ | 0.43 | |
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Weighted-average common shares outstanding: | | | | | | | | |
Basic | | | 28,471 | | | | 28,262 | |
Diluted | | | 28,928 | | | | 28,709 | |
Selected Balance Sheet Information(subject to change prior to filing of the Company’s Quarterly Report on Form 10-Q)
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| | | August 28, 2004
| | November 29, 2003
| | August 30, 2003
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Inventory | | $ | 155,920 | | $ | 146,571 | | $ | 153,276 |
Trade accounts receivable, net | | | 240,161 | | | 239,593 | | | 218,493 |
Trade accounts payable | | | 132,774 | | | 117,001 | | | 103,593 |
Total assets | | | 1,045,941 | | | 1,007,588 | | | 976,521 |
Long-term debt, including current installments | | | 161,610 | | | 162,430 | | | 171,954 |
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H.B. FULLER COMPANY AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
In thousands, except per share amounts (unaudited)
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| | | 13 Weeks Ended
August 28, 2004
| | | 13 Weeks Ended - August 30, 2003
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| | | | As Reported
| | | Special Items
| | | Excluding
Special Items
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Net revenue | | $ | 349,514 | | | $ | 322,089 | | | | | | | $ | 322,089 | |
Cost of sales | | | (255,064 | ) | | | (235,023 | ) | | | (358 | ) | | | (234,665 | ) |
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Gross profit | | | 94,450 | | | | 87,066 | | | | (358 | ) | | | 87,424 | |
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Selling, general and administrative expenses | | | (79,078 | ) | | | (67,838 | ) | | | (671 | ) | | | (67,167 | ) |
Gains (losses) from asset disposals, net | | | (436 | ) | | | 1,937 | | | | 1,955 | | | | (18 | ) |
Interest expense | | | (3,205 | ) | | | (3,662 | ) | | | — | | | | (3,662 | ) |
Other expense, net | | | (1,139 | ) | | | (944 | ) | | | — | | | | (944 | ) |
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Income before income taxes, minority interests and income from equity investments | | | 10,592 | | | | 16,559 | | | | 926 | | | | 15,633 | |
Income taxes | | | (1,806 | ) | | | (4,804 | ) | | | (446 | ) | | | (4,358 | ) |
Minority interests in consolidated income | | | 283 | | | | (30 | ) | | | — | | | | (30 | ) |
Income from equity investments | | | 447 | | | | 561 | | | | — | | | | 561 | |
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Net Income | | $ | 9,516 | | | $ | 12,286 | | | $ | 480 | | | $ | 11,806 | |
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Basic income (loss) per common share | | $ | 0.33 | | | $ | 0.43 | | | $ | 0.02 | | | $ | 0.42 | |
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Diluted income (loss) per common share | | $ | 0.33 | | | $ | 0.43 | | | $ | 0.02 | | | $ | 0.41 | |
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Weighted-average common shares outstanding: | | | | | | | | | | | | | | | | |
Basic | | | 28,471 | | | | 28,262 | | | | 28,262 | | | | 28,262 | |
Diluted | | | 28,928 | | | | 28,709 | | | | 28,709 | | | | 28,709 | |
The information presented above reflects adjustments to ‘As Reported’ results to exclude certain special items related to the Company’s restructuring initiative. This adjusted information should not be construed as an alternative to the reported results determined in accordance with accounting principles generally accepted in the United States of America. It is provided solely to assist in an investor’s understanding of the impact of the special items on the comparability of the Company’s operations.
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H.B. FULLER COMPANY AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
In thousands, except per share amounts (unaudited)
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| | | 39 Weeks
Ended
August 28, 2004
| | | 39 Weeks
Ended
August 30, 2003
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Net revenue | | $ | 1,031,151 | | | $ | 941,158 | |
Cost of sales | | | (750,377 | ) | | | (682,372 | ) |
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Gross profit | | | 280,774 | | | | 258,786 | |
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Selling, general and administrative expenses | | | (232,218 | ) | | | (211,910 | ) |
Gains (losses) from asset disposals, net | | | (679 | ) | | | 2,047 | |
Interest expense | | | (10,407 | ) | | | (11,029 | ) |
Other expense, net | | | (3,979 | ) | | | (4,349 | ) |
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Income before income taxes, minority interests and income from equity investments | | | 33,491 | | | | 33,545 | |
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Income taxes | | | (9,134 | ) | | | (9,102 | ) |
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Minority interests in consolidated income | | | 170 | | | | (580 | ) |
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Income from equity investments | | | 1,300 | | | | 1,435 | |
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Net Income | | $ | 25,827 | | | $ | 25,298 | |
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Basic income per common share | | $ | 0.91 | | | $ | 0.90 | |
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Diluted income per common share | | $ | 0.89 | | | $ | 0.88 | |
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Weighted-average common shares outstanding: | | | | | | | | |
Basic | | | 28,407 | | | | 28,228 | |
Diluted | | | 28,889 | | | | 28,672 | |
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H.B. FULLER COMPANY AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
In thousands, except per share amounts (unaudited)
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| | | 39 Weeks Ended August 28, 2004
| | | 39 Weeks Ended - August 30, 2003
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| | | | | | | Excluding Special Items
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| | | | As Reported
| | | Special Items
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Net revenue | | $ | 1,031,151 | | | $ | 941,158 | | | $ | — | | | $ | 941,158 | |
Cost of sales | | | (750,377 | ) | | | (682,372 | ) | | | (3,794 | ) | | | (678,578 | ) |
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Gross profit | | | 280,774 | | | | 258,786 | | | | (3,794 | ) | | | 262,580 | |
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Selling, general and administrative expenses | | | (232,218 | ) | | | (211,910 | ) | | | (4,887 | ) | | | (207,023 | ) |
Gains (losses) from asset disposals, net | | | (679 | ) | | | 2,047 | | | | 1,955 | | | | 92 | |
Interest expense | | | (10,407 | ) | | | (11,029 | ) | | | — | | | | (11,029 | ) |
Other expense, net | | | (3,979 | ) | | | (4,349 | ) | | | — | | | | (4,349 | ) |
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Income before income taxes, minority interests and income from equity investments | | | 33,491 | | | | 33,545 | | | | (6,726 | ) | | | 40,271 | |
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Income taxes | | | (9,134 | ) | | | (9,102 | ) | | | 1,646 | | | | (10,748 | ) |
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Minority interests in consolidated income | | | 170 | | | | (580 | ) | | | — | | | | (580 | ) |
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Income from equity investments | | | 1,300 | | | | 1,435 | | | | — | | | | 1,435 | |
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Net Income | | $ | 25,827 | | | $ | 25,298 | | | $ | (5,080 | ) | | $ | 30,378 | |
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Basic income (loss) per common share | | $ | 0.91 | | | $ | 0.90 | | | $ | (0.18 | ) | | $ | 1.08 | |
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Diluted income (loss) per common share | | $ | 0.89 | | | $ | 0.88 | | | $ | (0.18 | ) | | $ | 1.06 | |
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Weighted-average common shares outstanding: | | | | | | | | | | | | | | | | |
Basic | | | 28,407 | | | | 28,228 | | | | 28,228 | | | | 28,228 | |
Diluted | | | 28,889 | | | | 28,672 | | | | 28,672 | | | | 28,672 | |
The information presented above reflects adjustments to ‘As Reported’ results to exclude certain special items related to the Company’s restructuring initiative. This adjusted information should not be construed as an alternative to the reported results determined in accordance with accounting principles generally accepted in the United States of America. It is provided solely to assist in an investor’s understanding of the impact of the special items on the comparability of the Company’s operations.
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