H.B. Fuller Reports Fourth Quarter and Fiscal Year 2012 Results

Wed Jan 16, 2013 7:44pm EST

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Fourth Quarter Adjusted Diluted EPS from Continuing Operations $0.641;
ST. PAUL, Minn.,  Jan. 16, 2013  /PRNewswire/ -- H.B. Fuller Company (NYSE: FUL)
today reported financial results for the fourth quarter that ended  December 1,
2012.  

(Logo:   http://photos.prnewswire.com/prnh/20110215/CG49203LOGO)

Fourth Quarter 2012 Highlights Included:

* Integration of the acquired Forbo adhesives business remained on or ahead of
schedule and on track to fully deliver synergy targets;  
* Net revenue was up 28 percent, organic revenue was up 3 percent from last
year's fourth quarter, as adjusted to reflect the same number of weeks in each
period;  
* Gross profit margin improved 120 basis points compared to the prior quarter;  
* Regional operating income2  increased 36 percent versus last year;  
* Adjusted diluted EPS from continuing operations of  $0.641  was up
approximately 23 percent on a comparable 13 week basis.

Full-Year 2012 Highlights Included:

* Achieved record levels of net revenue and adjusted diluted earnings per share
from continuing operations;  
* Completed acquisition of Industrial Adhesives business from the Forbo Group;  
* Completed divestiture of Central America Paints business to Grupo Mundial;  
* Integration of the acquired Forbo adhesives business remained on schedule and
on track to fully deliver synergy targets;  
* Organic revenue increased 6 percent when adjusting for the extra week in the
prior year;  
* Regional operating income2  increased 39 percent year-over-year;  
* Adjusted diluted EPS1  from continuing operations grew 28 percent
year-over-year.

Note that the 2011 fiscal year had 53 weeks of commercial activity, with the
extra week in the fourth quarter of 2011, while the 2012 fiscal year was the
normal 52 weeks in length.  



Fourth Quarter 2012 Results:
Net income from continuing operations for the fourth quarter of 2012 was  $25.0
million, or  $0.49  per diluted share, versus net income from continuing
operations of  $22.2 million, or  $0.45  per diluted share, in last year's
fourth quarter. Adjusted total diluted earnings per share from continuing
operations in the fourth quarter of 2012 were  $0.641, up 14 percent from the
prior year's adjusted result of  $0.561  and up 23 percent on a comparable 13
week basis.   

Net revenue for the fourth quarter of 2012 was  $513.3 million, up 27.8 percent
versus the fourth quarter of 2011. Year-over-year growth was approximately 35
percent when adjusting for the extra week in the prior year.  When excluding the
incremental revenue from the acquired Forbo business, net revenue was flat,
representing 3 percent organic growth offset by 3 percentage points of
unfavorable foreign currency translation. The organic growth was comprised of a
1 percent increase in price and 2 percent growth in volume.

"The results we delivered in the final quarter of this fiscal year are
impressive, even when comparing to last year's reported results which included
an extra week," said  Jim Owens,  H.B. Fuller  president and chief executive
officer. "Our fourth quarter revenue came in right on target and we exceeded our
internal expectations for margin expansion as some business integration benefits
were realized earlier than anticipated and the raw material cost environment was
generally favorable. Our performance trends are good, our integration plans are
on schedule and we have strong momentum as we enter the 2013 fiscal year."

Gross profit margin from continuing operations was flat compared to the prior
year as the margin dilution from the acquired Forbo business was fully offset by
benefits from the business integration activities and other margin enhancement
initiatives. Sequentially, gross profit margin increased 120 basis points, due
to the positive impact of the business integration and the favorable raw
material cost environment. Relative to the prior year, Selling, General and
Administrative (SG&A) expense from continuing operations increased by 24 percent
to  $95.4 million, but was down 50 basis points as a percentage of net revenue
to 18.6 percent.  

Balance Sheet and Cash Flow:
At the end of the fourth quarter of 2012, the Company had cash totaling  $200
million  and total debt of  $520 million. This compares to third quarter levels
of  $208 million  and  $532 million, respectively. Sequentially, net debt was
essentially unchanged. Operating cash flow in the fourth quarter was  $44
million  reflecting solid profitability in the core business  and better
inventory management. Operating cash flow for the full-year was  $109 million.
Capital expenditures were  $21.0 million  in the fourth quarter and  $39.2
million  for the full-year.



Fiscal Year 2012 Results:
"This has been a transformative year for  H.B. Fuller", said Owens. "While
working to complete the acquisition of the industrial adhesives business from
the Forbo Group and the divestiture of the Central America Paints business, our
teams kept the momentum going.  EBITDA margin expansion is one of our key
financial metrics and in 2012 we delivered.  In 2012 we increased our EBITDA
margin by 90 basis points relative to the reported level of last year - and this
was achieved while integrating the Forbo business that generated about 6 percent
EBITDA margin in the year before the acquisition. The results of our hard work
are evident and plans are set to extend these trends in 2013."

Net income from continuing operations for the 2012 fiscal year was  $68.3
million, or  $1.34  per diluted share, versus  $80.2 million, or  $1.61  per
diluted share, in the 2011 fiscal year. Adjusted total diluted earnings per
share from continuing operations in the 2012 fiscal year were  $2.201, up 28
percent from the prior year's adjusted result of  $1.721.  

Net revenue for the 2012 fiscal year was  $1,886.2 million, up 30.6 percent
versus the 2011 fiscal year. Year-over-year growth was approximately 33 percent 
when adjusting for the extra week in the prior year.  When excluding the
incremental revenue from the acquired Forbo business, net revenue grew 3
percent, representing 6 percent organic growth offset by 3 percentage points of
unfavorable foreign currency translation. The organic growth was comprised of a
5 percent increase in price and 1 percent growth in volume.



Business Integration and Special Charges
The Company has implemented a comprehensive business integration program to
deliver synergies related to the acquisition of the Forbo adhesives business and
to improve the performance of the EIMEA operating segment. The table below
provides an estimate of the expected one-time costs of executing this multi-year
project.  In addition, the table lists, for each cost element, the costs
incurred in the current quarter, year-to-date period, and since the project's
inception in the fourth quarter of 2011:

                                 Expected Costs    ____________Costs Incurred_____________                               
                                                   
Q4 2012           FY 2012          Total To-Date                     
 Cost Elements                   ($ millions)      ($ millions)              ($ millions)              ($ millions)  
 Acquisition and transformation  35                2                         18                        26            
 Workforce reduction             53                5                         28                        28            
 Facility exit                   17                1                         1                         1             
 Other                           10                0                         2                         2             
 Total cash costs                115               8                         49                        57            
                                                                                                                     
 Total non-cash costs            6                 1                         3                         3             


Fiscal 2013 Outlook:
The Company's adjusted earnings guidance for the 2013 fiscal year is a range of 
$2.55 to $2.65  per diluted share. Adjusted earnings per share exclude all
special charges related to the business integration project which is ongoing.   

The Company expects end-market demand to generally reflect the broad economic
conditions in the regions where the Company operates. Reported revenue growth is
expected to be more than 10 percent while organic revenue growth is expected to
be in the low single digits, the difference reflecting the benefit of a full
year of the Forbo business which was acquired at the beginning of the second
quarter of 2012.  Raw material costs are expected to remain at current levels
through the first half of 2013 with some modest inflation possible in the second
half of the year. The company anticipates margin expansion in 2013, primarily
related to the benefits of the business integration project, driving operating
income and EBITDA growth of about 20 percent. The EBITDA margin goal for 2013 is
12.5 percent, up approximately 100 basis points relative to the 2012 fiscal year
and on track to achieve the 15 percent margin target for 2015. Capital
expenditures will be unusually large in 2013 as a significant portion of the
investment for the business integration project is completed. The company's
earlier projections of  $195 million  of aggregate capital expenditures over the
three years of the business integration project, or a total of about  $250
million  of capital expenditures over the fiscal years 2012 through 2015, are
confirmed.     

The table below shows each of the elements of the Company's 2013 guidance.  All
amounts shown are presented on the basis described above.

                               Expected Full-Year  
 Earnings per Diluted Share    $2.55 to $2.65      
 Core Tax Rate                 30%                 
 Capex  ( $ millions)          $110                
 EBITDA  ($ millions)          $260-$265           


Conference Call:
The Company will host an investor conference call to discuss fourth quarter and
fiscal year 2012 results on  Thursday, January 17, 2013, at  9:30 a.m.  Central
U.S. time (10:30 a.m.  Eastern U.S. time). The conference call audio and
accompanying presentation slides will be available to all interested parties via
a simultaneous webcast at  www.hbfuller.com  under the Investor Relations
section. The event is scheduled to last one hour. For those unable to listen
live, an audio replay of the event along with the accompanying presentation will
be archived on the Company's website.



Regulation G:
Note that the 2011 fiscal year had 53 weeks of commercial activity while the
2012 fiscal year was the normal 52 weeks in length. The fourth quarter of 2011
had 14 weeks while the fourth quarter of 2012 was the normal 13 weeks in length.
Year-over-year comparisons are provided on an as reported basis or in certain
cases presented to reflect the estimated result as if both periods contained the
same number of weeks of commercial activity. In addition, adjusted results are
reported which exclude the special charges related to the business integration
project, the one-time negative impact of the fair value step-up on the inventory
acquired with the Forbo business and certain other one-time tax items.
Reconciliations of all adjusted results are included in the final pages of this
document.

The information presented in this earnings release regarding regional operating
income, regional operating margin, adjusted diluted earnings per share, adjusted
diluted earnings per share from continuing operations and earnings before
interest, taxes, depreciation, and amortization (EBITDA) 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.  



About H.B. Fuller Company:
For 125 years,  H.B. Fuller  has been a leading global adhesives provider
focusing on perfecting adhesives, sealants and other specialty chemical products
to improve products and lives. Recognized for unmatched technical support and
innovation,  H.B. Fuller  brings knowledge and expertise to help its customers
find precisely the right formulation for the right performance. With fiscal 2012
net revenue of  $1.9 billion,  H.B. Fuller  serves customers in packaging,
hygiene, general assembly, paper converting, woodworking, construction,
automotive and consumer businesses. For more information, visit us at 
www.hbfuller.com  and subscribe to our blog.



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 Company's ability to effectively integrate and
operate acquired businesses; 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 SEC 10-Q filings of  October 5, 2012,  July 6, 2012  and 
March 30, 2012, and 10-K filing for the fiscal year ended  December 3, 2011. 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 make it difficult to determine
with certainty the increases or decreases in net revenue 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.

 H.B. FULLER COMPANY AND SUBSIDIARIES                                                                                                                                                                 
 CONSOLIDATED FINANCIAL INFORMATION                                                                                                                                                                   
 In thousands, except per share amounts (unaudited)                                                                                                                                                   
                                                                                                                                                                                             
                                                                                                  13 Weeks Ended                          Percent of     14 Weeks Ended           Percent of   
                                                                                                  December 1, 2012                        Net Revenue    December 3, 2011         Net Revenue  
 Net revenue                                                                                      $            513,255                   100.0%         $          401,545      100.0%       
 Cost of sales                                                                                                 (369,541)                 (72.0%)                   (289,284)    (72.0%)      
 Gross profit                                                                                                  143,714                   28.0%                     112,261      28.0%        
                                                                                                                                                                                             
 Selling, general and administrative expenses                                                                  (95,395)                  (18.6%)                   (76,680)     (19.1%)      
 Special charges, net                                                                                          (9,204)                   (1.8%)                    (7,499)      (1.9%)       
 Asset impairment charges                                                                                      (846)                     (0.2%)                    -            0.0%         
 Other income (expense), net                                                                                   759                       0.1%                      2,170        0.5%         
 Interest expense                                                                                              (5,476)                   (1.1%)                    (2,895)      (0.7%)       
 Income from continuing operations before income taxes and income from equity method investments               33,552                    6.5%                      27,357       6.8%         
                                                                                                                                                                                             
 Income taxes                                                                                                  (11,191)                  (2.2%)                    (7,753)      (1.9%)       
                                                                                                                                                                                             
 Income from equity method investments                                                                         2,651                     0.5%                      2,575        0.6%         
 Income from continuing operations                                                                             25,012                    4.9%                      22,179       5.5%         
                                                                                                                                                                                             
 Income from discontinued operations, net of tax                                                               182                       0.0%                      4,418        1.1%         
 Net income including non-controlling interests                                                                25,194                    4.9%                      26,597       6.6%         
                                                                                                                                                                                             
 Net income attributable to non-controlling interests                                                          (82)                      (0.0%)                    (188)        (0.0%)       
 Net income attributable to H.B. Fuller                                                           $            25,112                    4.9%           $          26,409       6.6%         
                                                                                                                                                                                             
 Basic income per common share attributable to H.B. Fullera                                                                                                                                  
 Income from continuing operations                                                                             0.50                                                0.45                      
 Income from discontinued operations                                                                           -                                                   0.09                      
                                                                                                  $            0.51                                     $          0.54                      
                                                                                                                                                                                             
 Diluted income per common share attributable to H.B. Fullera                                                                                                                                
 Income from continuing operations                                                                             0.49                                                0.45                      
 Income from discontinued operations                                                                           -                                                   0.09                      
                                                                                                  $            0.49                                     $          0.53                      
                                                                                                                                                                                             
 Weighted-average common shares outstanding:                                                                                                                                                 
 Basic                                                                                                         49,640                                              48,937                    
 Diluted                                                                                                       50,798                                              49,821                    
                                                                                                                                                                                             
 Dividends declared per common share                                                              $            0.085                                    $          0.075                     
                                                                                                                                                                                             
 a Income per share amounts may not add due to rounding                                                                                                                                          


 Selected Balance Sheet Information (subject to change prior to filing of the Company's Annual Report on Form 10-K) 
                                                                                                       
                                 December 1, 2012         December 3, 2011         November 27, 2010      
 Cash & cash equivalents         $          200,436      $          154,649      $          131,777    
 Trade accounts receivable, net             320,152                 217,424                 196,965    
 Inventories                                208,531                 116,443                 104,004    
 Trade payables                             163,062                 104,418                 93,881     
 Total assets                               1,786,320               1,227,709               1,153,457  
 Total debt                                 520,225                 232,296                 250,721    


 H.B. FULLER COMPANY AND SUBSIDIARIES                                                                                                                                                                                              
 CONSOLIDATED FINANCIAL INFORMATION                                                                                                                                                                                                
 In thousands, except per share amounts (unaudited)                                                                                                                                                                                
                                                                                                                                                                                                                          
                                                                                                  52 Weeks Ended                                Percent of                    53 Weeks Ended                   Percent of   
                                                                                                  December 1, 2012                              Net Revenue                   December 3, 2011                 Net Revenue  
 Net revenue                                                                                      $              1,886,239                     100.0%                        $              1,444,085        100.0%       
 Cost of sales                                                                                                   (1,368,963)                   (72.6%)                                      (1,040,253)      (72.0%)      
 Gross profit                                                                                                    517,276                       27.4%                                        403,832          28.0%        
                                                                                                                                                                                                                          
 Selling, general and administrative expenses                                                                    (354,735)                     (18.8%)                                      (286,871)        (19.9%)      
 Special charges                                                                                                 (52,467)                      (2.8%)                                       (7,499)          (0.5%)       
 Asset impairment charges                                                                                        (1,517)                       (0.1%)                                       (332)            (0.0%)       
 Other income (expense), net                                                                                     784                           0.0%                                         4,101            0.3%         
 Interest expense                                                                                                (19,793)                      (1.0%)                                       (10,811)         (0.7%)       
 Income from continuing operations before income taxes and income from equity method investments                 89,548                        4.7%                                         102,420          7.1%         
                                                                                                                                                                                                                          
 Income taxes                                                                                                    (30,479)                      (1.6%)                                       (31,211)         (2.2%)       
                                                                                                                                                                                                                          
 Income from equity method investments                                                                           9,218                         0.5%                                         9,006            0.6%         
 Income from continuing operations                                                                               68,287                        3.6%                                         80,215           5.6%         
                                                                                                                                                                                                                          
 Income from discontinued operationsa                                                                            57,568                        3.1%                                         8,832            0.6%         
 Net income including non-controlling interests                                                                  125,855                       6.7%                                         89,047           6.2%         
                                                                                                                                                                                                                          
 Net (income) loss attributable to non-controlling interests                                                     (233)                         (0.0%)                                       58               0.0%         
 Net income attributable to H.B. Fuller                                                           $              125,622                       6.7%                          $              89,105           6.2%         
                                                                                                                                                                                                                          
 Basic income per common share attributable to H.B. Fuller                                                                                                                                                                
 Income from continuing operations                                                                               1.37                                                                       1.64                          
 Income from discontinued operations                                                                             1.16                                                                       0.18                          
                                                                                                  $              2.53                                                        $              1.82                          
                                                                                                                                                                                                                          
 Diluted income per common share attributable to H.B. Fuller                                                                                                                                                              
 Income from continuing operations                                                                               1.34                                                                       1.61                          
 Income from discontinued operations                                                                             1.14                                                                       0.18                          
                                                                                                  $              2.48                                                        $              1.79                          
                                                                                                                                                                                                                          
 Weighted-average common shares outstanding:                                                                                                                                                                              
 Basic                                                                                                           49,571                                                                     48,991                        
 Diluted                                                                                                         50,618                                                                     49,866                        
                                                                                                                                                                                                                          
 Dividends declared per common share                                                              $              0.330                                                       $              0.295                         
                                                                                                                                                                                                                          
 a Fiscal 2012 includes the gain on sale of discontinued operations of $51,060, net of tax of $15,119                                                                                                                            


 H.B. FULLER COMPANY AND SUBSIDIARIES                                             
 REGION FINANCIAL INFORMATION                                                     
 In thousands (unaudited)                                                         
                                                                             
                                                                             
                               13 Weeks Ended           14 Weeks Ended         
                               December 1, 2012         December 3, 2011       
 Net Revenue:                                                                
 North America                 $          218,586      $          169,660    
 EIMEA                                    190,336                 134,130    
 Latin America                            41,910                  42,958     
 Asia Pacific                             62,423                  54,797     
 Total H.B. Fuller             $          513,255      $          401,545    
                                                                             
 Regional Operating Income:2                                                 
 North America                 $          29,476       $          20,672     
 EIMEA                                    12,181                  9,162      
 Latin America                            3,792                   3,151      
 Asia Pacific                             2,870                   2,596      
 Total H.B. Fuller             $          48,319       $          35,581     
                                                                             
 Depreciation Expense:                                                       
 North America                 $          4,492        $          3,742      
 EIMEA                                    3,850                   2,594      
 Latin America                            499                     465        
 Asia Pacific                             1,228                   1,094      
 Total H.B. Fuller             $          10,069       $          7,895      
                                                                             
 Amortization Expense:                                                       
 North America                 $          3,156        $          2,021      
 EIMEA                                    1,799                   313        
 Latin America                            64                      4          
 Asia Pacific                             471                     269        
 Total H.B. Fuller             $          5,490        $          2,607      
                                                                             
 EBITDA:3                                                                    
 North America                 $          37,124       $          26,435     
 EIMEA                                    17,830                  12,069     
 Latin America                            4,355                   3,620      
 Asia Pacific                             4,569                   3,959      
 Total H.B. Fuller             $          63,878       $          46,083     
                                                                             
 Regional Operating Margin:4                                                 
 North America                            13.5%                   12.2%      
 EIMEA                                    6.4%                    6.8%       
 Latin America                            9.0%                    7.3%       
 Asia Pacific                             4.6%                    4.7%       
 Total H.B. Fuller                        9.4%                    8.9%       
                                                                             
 EBITDA Margin:3                                                             
 North America                            17.0%                   15.6%      
 EIMEA                                    9.4%                    9.0%       
 Latin America                            10.4%                   8.4%       
 Asia Pacific                             7.3%                    7.2%       
 Total H.B. Fuller                        12.4%                   11.5%      
                                                                             
 Net Revenue Growth:                                                         
 North America                            28.8%                              
 EIMEA                                    41.9%                              
 Latin America                            (2.4%)                             
 Asia Pacific                             13.9%                              
 Total H.B. Fuller                        27.8%                              


 H.B. FULLER COMPANY AND SUBSIDIARIES                                             
 REGION FINANCIAL INFORMATION                                                     
 In thousands (unaudited)                                                         
                                                                             
                                                                             
                               52 Weeks Ended           53 Weeks Ended         
                               December 1, 2012         December 3, 2011       
 Net Revenue:                                                                
 North America                 $          830,061      $          624,494    
 EIMEA                                    672,423                 473,763    
 Latin America                            155,634                 147,140    
 Asia Pacific                             228,121                 198,688    
 Total H.B. Fuller             $          1,886,239    $          1,444,085  
                                                                             
 Regional Operating Income:2                                                 
 North America                 $          107,484      $          76,500     
 EIMEA                                    34,483                  24,590     
 Latin America                            13,218                  8,002      
 Asia Pacific                             7,356                   7,869      
 Total H.B. Fuller             $          162,541      $          116,961    
                                                                             
 Depreciation Expense:                                                       
 North America                 $          16,659       $          13,467     
 EIMEA                                    12,746                  9,744      
 Latin America                            1,819                   1,686      
 Asia Pacific                             4,563                   3,991      
 Total H.B. Fuller             $          35,787       $          28,888     
                                                                             
 Amortization Expense:                                                       
 North America                 $          11,177       $          8,052      
 EIMEA                                    5,653                   1,004      
 Latin America                            198                     17         
 Asia Pacific                             1,675                   1,089      
 Total H.B. Fuller             $          18,703       $          10,162     
                                                                             
 EBITDA:3                                                                    
 North America                 $          135,320      $          98,019     
 EIMEA                                    52,882                  35,338     
 Latin America                            15,235                  9,705      
 Asia Pacific                             13,594                  12,949     
 Total H.B. Fuller             $          217,031      $          156,011    
                                                                             
 Regional Operating Margin:4                                                 
 North America                            12.9%                   12.2%      
 EIMEA                                    5.1%                    5.2%       
 Latin America                            8.5%                    5.4%       
 Asia Pacific                             3.2%                    4.0%       
 Total H.B. Fuller                        8.6%                    8.1%       
                                                                             
 EBITDA Margin:3                                                             
 North America                            16.3%                   15.7%      
 EIMEA                                    7.9%                    7.5%       
 Latin America                            9.8%                    6.6%       
 Asia Pacific                             6.0%                    6.5%       
 Total H.B. Fuller                        11.5%                   10.8%      
                                                                             
 Net Revenue Growth:                                                         
 North America                            32.9%                              
 EIMEA                                    41.9%                              
 Latin America                            5.8%                               
 Asia Pacific                             14.8%                              
 Total H.B. Fuller                        30.6%                              
                                                                             
 * Numbers are not adjusted to remove the one-time negative impact of the fair value step-up on the inventory acquired with the Forbo business of $3.3 million 


 H.B. FULLER COMPANY AND SUBSIDIARIES                                                               
 REGION FINANCIAL INFORMATION                                                                       
 NET REVENUE GROWTH                                                                                 
 (unaudited)                                                                                        
                                                                                           
 13 Weeks Ended December 1, 2012                                                                    
                                                                                           
                    North America    EIMEA     Latin America    Asia Pacific    Total HBF  
 Price              1.6%             1.0%      0.5%             (0.7%)          1.0%       
 Volume             1.8%             2.4%      2.3%             0.6%            1.9%       
 Organic Growth     3.4%             3.4%      2.8%             (0.1%)          2.9%       
                                                                                           
 F/X                0.1%             (8.7%)    0.0%             0.4%            (2.8%)     
 Acquisition        32.4%            54.3%     1.9%             20.7%           34.8%      
 Extra Week (2011)  (7.1%)           (7.1%)    (7.1%)           (7.1%)          (7.1%)     
                    28.8%            41.9%     (2.4%)           13.9%           27.8%      
                                                                                           
                                                                                           
                                                                                           
                                                                                           
 52 Weeks Ended December 1, 2012                                                                    
                                                                                           
                    North America    EIMEA     Latin America    Asia Pacific    Total HBF  
 Price              6.4%             4.1%      4.3%             1.9%            4.8%       
 Volume             0.5%             3.3%      1.9%             (1.2%)          1.4%       
 Organic Growth     6.9%             7.4%      6.2%             0.7%            6.2%       
                                                                                           
 F/X                (0.1%)           (8.7%)    0.0%             0.3%            (2.9%)     
 Acquisition        28.0%            45.2%     1.7%             15.8%           29.3%      
 Extra Week (2011)  (1.9%)           (2.0%)    (2.1%)           (2.0%)          (2.0%)     
                    32.9%            41.9%     5.8%             14.8%           30.6%      


 H.B. FULLER COMPANY AND SUBSIDIARIES                                                               
 REGULATION G RECONCILIATION                                                                        
 In thousands (unaudited)                                                                           
                                                                                               
                                                                                               
                                                 13 Weeks Ended           14 Weeks Ended         
                                                 December 1, 2012         December 3, 2011       
 Net income including non-controlling interests  $          25,194       $          26,597     
                                                                                               
 Income from discontinued operations                        (182)                   (4,418)    
 Income from equity method investments                      (2,651)                 (2,575)    
 Income taxes                                               11,191                  7,753      
 Interest expense                                           5,476                   2,895      
 Other income (expense), net                                (759)                   (2,170)    
 Asset impairment charges                                   846                     -          
 Special charges                                            9,204                   7,499      
                                                                                               
 Regional Operating Income2                                 48,319                  35,581     
                                                                                               
 Depreciation expense                                       10,069                  7,895      
 Amortization expense                                       5,490                   2,607      
                                                                                               
 EBITDA3                                         $          63,878       $          46,083     
                                                                                               
                                                                                               
                                                                                               
                                                                                               
                                                 52 Weeks Ended           53 Weeks Ended         
                                                 December 1, 2012         December 3, 2011       
 Net income including non-controlling interests  $          125,855      $          89,047     
                                                                                               
 Income from discontinued operations                        (57,568)                (8,832)    
 Income from equity method investments                      (9,218)                 (9,006)    
 Income taxes                                               30,479                  31,211     
 Interest expense                                           19,793                  10,811     
 Other income (expense), net                                (784)                   (4,101)    
 Asset impairment charges                                   1,517                   332        
 Special charges                                            52,467                  7,499      
                                                                                               
 Regional Operating Income2                                 162,541                 116,961    
                                                                                               
 Depreciation expense                                       35,787                  28,888     
 Amortization expense                                       18,703                  10,162     
                                                                                               
 EBITDA3                                         $          217,031      $          156,011    
                                                                                               
 * Numbers are not adjusted to remove the one-time negative impact of the fair value step-up on the inventory acquired with the Forbo business of $3.3 million 


 H.B. FULLER COMPANY AND SUBSIDIARIES                                                                 
 REGULATION G RECONCILIATION                                                                          
 In thousands (unaudited)                                                                             
                                                                                                 
                                                                                                 
                                               13 Weeks Ended             14 Weeks Ended           
                                               December 1, 2012           December 3, 2011         
 Net revenue                                   $          513,255        $          401,545      
 Cost of sales                                            (369,541)                 (289,284)    
                                                                                                 
 Gross profit                                             143,714                   112,261      
                                                                                                 
 Selling, general and administrative expenses             (95,395)                  (76,680)     
                                                                                                 
 Regional operating income2                               48,319                    35,581       
                                                                                                 
 Depreciation expense                                     10,069                    7,895        
 Amortization expense                                     5,490                     2,607        
                                                                                                 
 EBITDA3                                       $          63,878         $          46,083       
                                                                                                 
 EBITDA margin3                                           12.4%                     11.5%        
                                                                                                 
                                                                                                 
                                                                                                 
                                                                                                 
                                                                                                 
                                               52 Weeks Ended             53 Weeks Ended           
                                               December 1, 2012           December 3, 2011         
 Net revenue                                   $          1,886,239      $          1,444,085    
 Cost of sales                                            (1,368,963)               (1,040,253)  
                                                                                                 
 Gross profit                                             517,276                   403,832      
                                                                                                 
 Selling, general and administrative expenses             (354,735)                 (286,871)    
                                                                                                 
 Regional operating income2                               162,541                   116,961      
                                                                                                 
 Depreciation expense                                     35,787                    28,888       
 Amortization expense                                     18,703                    10,162       
                                                                                                 
 EBITDA3                                       $          217,031        $          156,011      
                                                                                                 
 EBITDA margin3                                           11.5%                     10.8%        
                                                                                                 
 * Numbers are not adjusted to remove the one-time negative impact of the fair value step-up on the inventory acquired with the Forbo business of $3.3 million 


 H.B. FULLER COMPANY AND SUBSIDIARIES                                                                                                                                                                  
 REGULATION G RECONCILIATION                                                                                                                                                                           
 In thousands, except per share amounts (unaudited)                                                                                                                                                    
                                                                                                                                                                       Adjusted               
                                                                                                                            13 Weeks Ended                               13 Weeks Ended         
                                                                                                                            December 1, 2012         Adjustments         December 1, 2012       
 Net revenue                                                                                                                $          513,255      $       -          $          513,255    
 Cost of sales                                                                                                                         (369,541)            -                     (369,541)  
 Gross profit                                                                                                                          143,714              -                     143,714    
                                                                                                                                                                                             
 Selling, general and administrative expenses                                                                                           (95,395)             -                     (95,395)   
                                                                                                                                                                                             
 Acquisition and transformation related costs                                                        (2,217)                                                                                 
 Workforce reduction costs                                                                           (4,529)                                                                                 
 Facility exit costs                                                                                 (1,840)                                                                                 
 Other related costs                                                                                 (618)                                                                                   
 Special charges, net                                                                                                                  (9,204)              (9,204)               -          
                                                                                                                                                                                             
 Asset impairment charges                                                                                                              (846)                -                     (846)      
 Other income (expense), net                                                                                                           759                  -                     759        
 Interest expense                                                                                                                      (5,476)              -                     (5,476)    
 Income from continuing operations before income taxes and income from equity method investments                                        33,552               (9,204)               42,756     
                                                                                                                                                                                             
 Income taxes                                                                                                                          (11,191)             1,701                 (12,892)   
                                                                                                                                                                                             
 Income from equity method investments                                                                                                 2,651                -                     2,651      
 Net income from continuing operations                                                                                                 25,012               (7,503)               32,515     
                                                                                                                                                                                             
 Income from discontinued operations                                                                                                   182                  -                     182        
 Net income including non-controlling interests                                                                                         25,194               (7,503)               32,697     
                                                                                                                                                                                             
 Net income attributable to non-controlling interests                                                                                   (82)                 -                     (82)       
 Net income attributable to H.B. Fuller                                                                                      $          25,112       $       (7,503)    $          32,615     
                                                                                                                                                                                             
 Basic income per common share attributable to H.B. Fullera                                                                                                                                    
 Income (loss) from continuing operations                                                                                              0.50                 (0.15)                0.65       
 Income from discontinued operations                                                                                                   -                    -                     -          
                                                                                                                            $          0.51         $       (0.15)     $          0.67       
                                                                                                                                                                                             
 Diluted income per common share attributable to H.B. Fullera                                                                                                                                  
 Income (loss) from continuing operations                                                                                              0.49                 (0.15)                0.64  1    
 Income from discontinued operations                                                                                                   -                    -                     -          
                                                                                                                            $          0.49         $       (0.15)     $          0.64       
                                                                                                                                                                                             
 Weighted-average common shares outstanding:                                                                                                                                                  
 Basic                                                                                                                                 49,640               49,640                49,640     
 Diluted                                                                                                                               50,798               50,798                50,798     
                                                                                                                                                                                             
 a  Income per share amounts may not add due to rounding                                                                                                                                               


 H.B. FULLER COMPANY AND SUBSIDIARIES                                                                                                                                               
 REGULATION G RECONCILIATION                                                                                                                                                        
 In thousands, except per share amounts (unaudited)                                                                                                                                 
                                                                                                                                                                            
                                                                                                     52 Weeks Ended                                  Adjusted                 
                                                                                                                                                     
52 Weeks Ended          
                                                                                                     December 1, 2012           Adjustments          December 1, 2012         
 Net revenue                                                                                         $          1,886,239      $       -           $          1,886,239    
 Cost of sales                                                                                                  (1,368,963)            (3,314)                (1,365,649)  
 Gross profit                                                                                                   517,276                (3,314)                520,590      
                                                                                                                                                                           
 Selling, general and administrative expenses                                                                   (354,735)              -                      (354,735)    
                                                                                                                                                                           
 Acquisition and transformation related costs      (18,167)                                                                                                                
 Workforce reduction costs                         (28,087)                                                                                                                
 Facility exit costs                               (4,203)                                                                                                                 
 Other related costs                               (2,010)                                                                                                                 
 Special charges, net                                                                                           (52,467)               (52,467)               -            
                                                                                                                                                                           
 Asset impairment charges                                                                                       (1,517)                -                      (1,517)      
 Other income (expense), net                                                                                    784                    -                      784          
 Interest expense                                                                                               (19,793)               -                      (19,793)     
 Income from continuing operations before income taxes and income from equity method investments                 89,548                 (55,781)               145,329      
                                                                                                                                                                           
 Income taxes                                                                                                   (30,479)               12,534                 (43,013)     
                                                                                                                                                                           
 Income from equity method investments                                                                          9,218                  -                      9,218        
 Income from continuing operations                                                                              68,287                 (43,247)               111,534      
                                                                                                                                                                           
 Income from discontinued operations                                                                            57,568                 -                      57,568       
 Net income including non-controlling interests                                                                 125,855                (43,247)               169,102      
                                                                                                                                                                           
 Net income attributable to non-controlling interests                                                            (233)                  -                      (233)        
 Net income attributable to H.B. Fuller                                                              $          125,622        $       (43,247)    $          168,869      
                                                                                                                                                                           
 Basic income per common share attributable to H.B. Fuller4, a                                                                                                              
 Income (loss) from continuing operations                                                                       1.37                   (0.87)                 2.25         
 Income from discontinued operations                                                                            1.16                   -                      1.16         
                                                                                                     $          2.53           $       (0.87)      $          3.41         
 Diluted income per common share attributable to H.B. Fuller4, a                                                                                                            
 Income (loss) from continuing operations                                                                       1.34                   (0.85)                 2.20  1      
 Income from discontinued operations                                                                            1.14                   -                      1.14         
                                                                                                     $          2.48           $       (0.85)      $          3.34         
 Weighted-average common shares outstanding:                                                                                                                                
 Basic                                                                                                          49,571                 49,571                 49,571       
 Diluted                                                                                                        50,618                 50,618                 50,618       
                                                                                                                                                                           
 a  Income per share amounts may not add due to rounding                                                                                                                            


 H.B. FULLER COMPANY AND SUBSIDIARIES                                                                                                                                      
 REGULATION G RECONCILIATION                                                                                                                                               
 In thousands, except per share amounts (unaudited)                                                                                                                        
                                                                                                                                                                   
                                                                                                                                             Adjusted               
                                                                                                  14 Weeks Ended                               14 Weeks Ended         
                                                                                                  December 3, 2011         Adjustments         December 3, 2011       
 Net revenue                                                                                      $          401,545      $       -          $          401,545    
 Cost of sales                                                                                               (289,284)            -                     (289,284)  
 Gross profit                                                                                                112,261              -                     112,261    
                                                                                                                                                                   
 Selling, general and administrative expenses                                                                (76,680)             -                     (76,680)   
 Special charges, net                                                                                        (7,499)              (7,499)               -          
 Other income (expense), net                                                                                 2,170                -                     2,170      
 Interest expense                                                                                            (2,895)              -                     (2,895)    
 Income from continuing operations before income taxes and income from equity method investments             27,357               (7,499)               34,856     
                                                                                                                                                                   
 Income taxes                                                                                                (7,753)              1,747                 (9,500)    
                                                                                                                                                                   
 Income from equity method investments                                                                       2,575                -                     2,575      
                                                                                                                                                                   
 Net income from continuing operations                                                                       22,179               (5,752)               27,931     
                                                                                                                                                                   
 Income from discontinued operations                                                                         4,418                -                     4,418      
                                                                                                                                                                   
 Net income including non-controlling interests                                                              26,597               (5,752)               32,349     
                                                                                                                                                                   
 Net income attributable to non-controlling interests                                                        (188)                -                     (188)      
                                                                                                                                                                   
 Net income attributable to H.B. Fuller                                                           $          26,409       $       (5,752)    $          32,161     
                                                                                                                                                                   
                                                                                                                                                                   
 Basic income per common share attributable to H.B. Fullera                                                                                                        
 Income (loss) from continuing operations                                                                    0.45                 (0.12)                0.57       
 income from discontinued operations                                                                         0.09                 -                     0.09       
                                                                                                  $          0.54         $       (0.12)     $          0.66       
                                                                                                                                                                   
 Diluted income per common share attributable to H.B. Fullera                                                                                                      
 Income (loss) from continuing operations                                                                    0.45                 (0.12)                0.56  1    
 income from discontinued operations                                                                         0.09                 -                     0.09       
                                                                                                  $          0.53         $       (0.12)     $          0.65       
                                                                                                                                                                   
 Weighted-average common shares outstanding:                                                                                                                       
 Basic                                                                                                       48,937               48,937                48,937     
 Diluted                                                                                                     49,821               49,821                49,821     
                                                                                                                                                                   
 a  Income per share amounts may not add due to rounding                                                                                                                   


 H.B. FULLER COMPANY AND SUBSIDIARIES                                                                                                                                           
 REGULATION G RECONCILIATION                                                                                                                                                    
 In thousands, except per share amounts (unaudited)                                                                                                                             
                                                                                                                                                                        
                                                                                                                                                                         
                                                                                                  53 Weeks Ended                                  Adjusted                 
                                                                                                                                                  
53 Weeks Ended          
                                                                                                  December 3, 2011           Adjustments          December 3, 2011         
 Net revenue                                                                                      $          1,444,085      $       -           $          1,444,085    
 Cost of sales                                                                                               (1,040,253)            -                      (1,040,253)  
 Gross profit                                                                                                403,832                -                      403,832      
                                                                                                                                                                        
 Selling, general and administrative expenses                                                                (286,871)              -                      (286,871)    
 Special charges                                                                                             (7,499)                (7,499)                -            
 Asset impairment charges                                                                                    (332)                  -                      (332)        
 Other income (expense), net                                                                                 4,101                  -                      4,101        
 Interest expense                                                                                            (10,811)               -                      (10,811)     
 Income from continuing operations before income taxes and income from equity method investments             102,420                (7,499)                109,919      
                                                                                                                                                                        
 Income taxes                                                                                                (31,211)               1,747                  (32,958)     
                                                                                                                                                                        
 Income from equity method investments                                                                       9,006                  -                      9,006        
 Income from continuing operations                                                                           80,215                 (5,752)                85,967       
                                                                                                                                                                        
 Income from discontinued operations                                                                         8,832                  -                      8,832        
                                                                                                                                                                        
 Net income including non-controlling interests                                                              89,047                 (5,752)                94,799       
                                                                                                                                                                        
 Net loss attributable to non-controlling interests                                                          58                     -                      58           
                                                                                                                                                                        
 Net income attributable to H.B. Fuller                                                           $          89,105         $       (5,752)     $          94,857       
                                                                                                                                                                        
                                                                                                                                                                        
 Basic income per common share attributable to H.B. Fullera                                                                                                             
 Income (loss) from continuing operations                                                                    $ 1.64                 $ (0.12)               $ 1.75       
 Income from discontinued operations                                                                         $ 0.18                 $ -                    $ 0.18       
                                                                                                  $          1.82           $       (0.12)      $          1.94         
                                                                                                                                                                        
 Diluted income per common share attributable to H.B. Fullera                                                                                                           
 Income (loss) from continuing operations                                                                    $ 1.61                 $ (0.12)               $ 1.72 1     
 Income from discontinued operations                                                                         $ 0.18                 $ -                    $ 0.18       
                                                                                                  $          1.79           $       (0.12)      $          1.90         
                                                                                                                                                                        
 Weighted-average common shares outstanding:                                                                                                                            
 Basic                                                                                                       48,991                 48,991                 48,991       
 Diluted                                                                                                     49,866                 49,866                 49,866       
                                                                                                                                                                        
 a  Income per share amounts may not add due to rounding                                                                                                                        


1  Adjusted diluted earnings per share (EPS) from continuing operations is a
non-GAAP financial measure. First, second, third and fourth quarters of 2012
exclude special charges associated with two previously announced events: the
EIMEA business transformation project and the expenses associated with the Forbo
acquisition integration project, which have been combined and are now referred
to as the "business integration". Special charges, net amounted to  $6.5
million,  $32.1 million,  $4.7 million  and  $9.2 million  on a pre-tax basis
($0.14,  $0.47,  $0.08  and  $0.15  per diluted share) in the first, second,
third and fourth quarters, respectively. During the fourth quarter of 2011,
these costs amounted to  $7.5 million  on a pre-tax basis ($0.12  per diluted
share in Q4 2011 and  $0.11  per diluted for the full year 2011). During the
second quarter of 2012, the Company recorded a one-time negative impact of the
fair value step-up on the inventory acquired with the Forbo business on the
gross profit margin line of the income statement. On a pre-tax basis, this
"step-up" amounted to  $3.3 million dollars  ($0.05  per diluted share). Lastly,
during the third quarter of 2012, various discrete items impacted the quarter's
results. These tax items had a positive impact on net income of  $1.7 million
dollars  ($0.03  per diluted share). A reconciliation to reported earnings per
diluted share is provided in the tables above.

2 Regional operating income is defined as gross profit less SG&A expense.  Items
that are reported on the special charges line of the income statement are
excluded from the regional operating income calculation. In Q4 2011, special
charges, net totaled  $7.5 million. In Q1, Q2, Q3 and Q4  2012, special charges,
net totaled  $6.5 million,  $32.1 million,  $4.7 million  and  $9.2 million,
respectively.

3   EBITDA is a non-GAAP financial measure defined on a consolidated basis as
gross profit, less SG&A expense, plus depreciation expense, plus amortization
expense. On a regional basis it is defined as operating income, plus
depreciation expense, plus amortization expense. EBITDA margin is defined as
EBITDA divided by net revenue.

4   Regional operating margin is a non-GAAP financial measure defined as gross
profit, less SG&A expense, divided by net revenue.

 

Maximillian Marcy
Investor Relations Contact
651-236-5062

SOURCE  H.B. Fuller Company
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