Reported EPS (diluted) of $0.91; Adjusted EPS (diluted) of $1.12, up 20% year-on-year

Net income of $51 million; Adjusted EBITDA of $157 million, up 10% year-on-year

Adjusted EBITDA margin of 17.1%, up 120 basis points year-on-year

Updates full year adjusted EBITDA guidance to upper end of previously provided range

H.B. Fuller Company (NYSE:FUL) today reported financial results for its second quarter that ended June 1, 2024.

Second Quarter 2024 Noteworthy Items:

Net revenue was $917 million, up 2.1% year-on-year; organic revenue was flat year-on-year with volume up 3.3% and all three global business units achieving volume growth;
Gross profit margin was 30.8%; adjusted gross profit margin was 31.1%, up 210 basis points year-on-year, driven principally by favorable net pricing and raw material cost impact, restructuring benefits and volume growth;
Net income was $51 million; adjusted EBITDA was $157 million, up 10% year-on-year; adjusted EBITDA margin expanded 120 basis points year-on-year to 17.1%;
Reported EPS (diluted) was $0.91; adjusted EPS (diluted) was $1.12, up 20% versus the prior year, driven by strong operating income growth;
Year-to-date cash flow from operations increased $21 million year-on-year to $129 million, driven by improved profitability;
Net working capital, as a percentage of annualized net revenue, decreased 190 basis points year-on-year from 18.1% to 16.2%;
Reinitiated share repurchase program, acquiring 182,400 shares during the quarter;
Acquired ND Industries, Inc., a leading provider of specialty adhesives and fastener locking solutions for the automotive, electronics, and aerospace markets.

Summary of Second Quarter 2024 Results:

The Company's net revenue for the second quarter of fiscal 2024 was $917 million, up 2.1% versus the second quarter of fiscal 2023. Volume increased net revenue by 3.3% and was offset by anticipated pricing adjustments, resulting in flat organic revenue year-on-year. Volume grew in all three global business units. Foreign currency translation reduced net revenue by 1.7% and acquisitions increased net revenue by 3.9%.

Gross profit in the second quarter of fiscal 2024 was $282 million. Adjusted gross profit was $286 million. Adjusted gross profit margin of 31.1% increased 210 basis points year-on-year. The net impact of pricing and raw material cost actions as well as restructuring benefits and volume leverage principally drove the year-on-year increase in adjusted gross profit margin.

Selling, general and administrative (SG&A) expense was $181 million in the second quarter of fiscal 2024 and adjusted SG&A was $173 million versus $159 million in the second quarter of fiscal 2023. The impact of acquisitions, inflation in wages and services, and higher variable compensation expense, partially offset by restructuring savings, drove the year-on-year increase in adjusted SG&A.

Net income attributable to H.B. Fuller for the second quarter of fiscal 2024 was $51 million, or $0.91 per diluted share. Adjusted net income attributable to H.B. Fuller for the second quarter of fiscal 2024 was $64 million. Adjusted EPS was $1.12 per diluted share, up 20% year-on-year driven by strong operating income growth.

Adjusted EBITDA in the second quarter of fiscal 2024 was $157 million, up 10% year-on-year driven principally by the net impact of pricing and raw material cost actions, volume growth, restructuring savings, and benefits from recent acquisitions. Adjusted EBITDA margin increased 120 basis points year-on-year to 17.1%.

H.B. Fuller President and CEO Celeste Mastin said, "Our strong second quarter financial performance reflects the team's steadfast commitment to execution while driving our long-term strategy to focus on more profitable, higher growth segments of the market. We continue to innovate and deliver customized value-enhancing solutions to our customers while acquiring highly profitable, fast-growing businesses, like ND Industries, to expand our market presence in the most differentiated segments. As we execute our restructuring program focused on streamlining our global footprint, we are driving sustainable enhancements to our cost structure and improving our ROIC. In a large total addressable market, where we win one application at a time, we continue to meaningfully move the needle and remain on track to deliver adjusted EBITDA margin greater than 20 percent in the next three to five years."

Balance Sheet and Working Capital:

Net debt at the end of the second quarter of fiscal 2024 was $1,910 million, up $131 million year-on-year. The increase in net debt was driven primarily by the acquisition of ND Industries, Inc. during the quarter. The ratio of net debt-to-adjusted EBITDA increased from 2.9X at the end of fiscal year 2023 to 3.1X at the end of the second quarter.

Net working capital in the second quarter of fiscal 2024 decreased $56 million year-on-year. As a percentage of annualized net revenue, net working capital decreased 190 basis points year-on-year to 16.2%.

Fiscal 2024 Outlook:

As a result of our strong first half performance and recent acquisition activity, partially offset by the strengthening US Dollar, we are updating our previously communicated financial guidance for fiscal 2024 as follows:

Net revenue growth is now expected to be in the range of up 2% to 4% with organic revenue flat to up 2% year-on-year;
Adjusted EBITDA is now expected to be in the range of $620 million to $640 million, equating to growth of approximately 7% to 10% year-on-year, and for third quarter adjusted EBITDA to be in the range of $165 million to $175 million;
Net interest expense is now expected to be approximately $130 million;
Adjusted EPS (diluted) is now expected to be in the range of $4.20 to $4.45, equating to year-on-year growth of between 9% and 15%;
Operating cash flow is still expected to be between $300 million and $350 million.

Conference Call:

The Company will hold a conference call on June 27, 2024, at 9:30 a.m. CT (10:30 a.m. ET) to discuss its results. Interested parties may listen to the conference call on a live webcast. The webcast, along with a supplemental presentation, may be accessed from the Company's website at https://investors.hbfuller.com. Participants must register prior to accessing the webcast using this link and should do so at least 10 minutes prior to the start of the call to install and test any necessary software and audio connections. A telephone replay of the conference call will be available from 12:30 p.m. CT on June 27, 2024, to 10:59 p.m. CT on July 4, 2024. To access the telephone replay dial 1-800-770-2030 (toll free) or 1-609-800-9909, and enter Conference ID: 6370505.

Regulation G

The information presented in this earnings release regarding consolidated and segment organic revenue growth, operating income, adjusted gross profit, adjusted gross profit margin, adjusted selling, general and administrative expense, adjusted income before income taxes and income from equity investments, adjusted income taxes, adjusted effective tax rate, adjusted net income, adjusted diluted earnings per share, adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA), adjusted EBITDA margin, net debt, net debt-to-adjusted EBITDA, trailing twelve months adjusted EBITDA, net working capital, annualized net revenue and net working capital as a percentage of annualized net revenue does not conform to U.S. generally accepted accounting principles (U.S. GAAP) and should not be construed as an alternative to the reported results determined in accordance with U.S. 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 to the results of other companies. The non-GAAP information provided may not be consistent with the methodologies used by other companies. All non-GAAP information is reconciled with reported U.S. GAAP results in the "Regulation G Reconciliation" tables in this press release with the exception of our forward-looking non-GAAP measures contained above in our Fiscal 2024 Outlook, which the Company cannot reconcile to forward-looking GAAP results without unreasonable effort.

About H.B. Fuller

As the largest pureplay adhesives company in the world, H.B. Fuller's (NYSE:FUL) innovative, functional coatings, adhesives and sealants enhance the quality, safety and performance of products people use every day. Founded in 1887, with 2023 revenue of $3.5 billion, our mission to Connect What Matters is brought to life by more than 7,000 global team members who collaborate with customers across more than 30 market segments in over 140 countries to develop highly specified solutions that enable customers to bring world-changing innovations to their end markets. Learn more at www.hbfuller.com.

Safe Harbor for Forward-Looking Statements

Certain statements in this press release may be considered forward-looking statements within the meaning of the federal securities laws, including Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements often address expected future business and financial performance, financial condition, and other matters, and often contain words or phrases such as "anticipate," "believe," "estimate," "expect," "intend," "may," "opportunity," "outlook," "plan," "project," "seek," "should," "strategy," "target," "will," "will be," "will continue," "will likely result," "would" and similar expressions, and variations or negatives of these words or phrases. These statements are subject to various risks and uncertainties that could cause our actual results to differ materially from those in the forward-looking statements, including but not limited to the following: the availability and pricing of raw materials; the impact of potential cybersecurity attacks and security breaches; the impact on the supply chain, raw material costs and pricing of our products due to military conflict, including between Russia and Ukraine and Israel and Hamas; the consequences of the COVID-19 outbreak and other pandemics on our operations and financial results; the impact on our margins and product demand due to inflationary pressures; the substantial amount of debt we have incurred to finance our acquisition of Royal, our ability to repay or refinance our debt or to incur additional debt in the future, our need for a significant amount of cash to service and repay the debt and to pay dividends on our common stock, and the effect of debt covenants that limit the discretion of management in operating the business or in paying dividends; our ability to pay dividends and to pursue growth opportunities if we continue to pay dividends according to our current dividend policy; our ability to acquire and integrate complementary businesses; our ability to achieve expected synergies, cost savings and operating efficiencies from our restructuring initiatives and operational improvement projects within the expected time frames or at all; our ability to effectively implement Project ONE; uncertain political and economic conditions; fluctuations in product demand; competing products and pricing; our geographic and product mix; disruptions to our relationships with our major customers and suppliers; failures in our information technology systems; regulatory compliance across our global footprint; trade policies and economic sanctions impacting our markets; changes in tax laws and tariffs; devaluations and other foreign exchange rate fluctuations; the impact of litigation and investigations, including for product liability and environmental matters; impairment charges on our goodwill or long-lived assets; the effect of new accounting pronouncements and accounting charges and credits; and similar matters.

Additional information about these various risks and uncertainties can be found in the "Risk Factors" section of our Form 10-K filings, and any updates to the risk factors in our Form 10-Q and 8-K filings with the SEC, but there may be other risks and uncertainties that we are unable to identify at this time or that we do not currently expect to have a material impact on the business. You should not place undue reliance on forward-looking statements, which speak only as of the date they are made. We do not undertake to update or revise any forward-looking statements, except as required by law.

H.B. FULLER COMPANY AND SUBSIDIARIES

CONSOLIDATED FINANCIAL INFORMATION

In thousands, except per share amounts (unaudited)

	Three Months Ended			Percent of			Three Months Ended			Percent of
	June 1, 2024			Net Revenue			June 3, 2023			Net Revenue
Net revenue	$	917,107			100.0	%	$	898,239			100.0	%
Cost of sales		(635,055	)		(69.2	)%		(641,464	)		(71.4	)%
Gross profit		282,052			30.8	%		256,775			28.6	%

Selling, general and administrative expenses		(181,456	)		(19.8	)%		(166,625	)		(18.6	)%
Other income, net		3,634			0.4	%		605			0.1	%
Interest expense		(32,314	)		(3.5	)%		(33,131	)		(3.7	)%
Interest income		1,199			0.1	%		932			0.1	%
Income before income taxes and income from equity method investments		73,115			8.0	%		58,556			6.5	%

Income taxes		(22,418	)		(2.4	)%		(19,291	)		(2.1	)%

Income from equity method investments		600			0.1	%		1,157			0.1	%
Net income including non-controlling interest		51,297			5.6	%		40,422			4.5	%

Net income attributable to non-controlling interest		(33	)		(0.0	)%		(21	)		(0.0	)%
Net income attributable to H.B. Fuller	$	51,264			5.6	%	$	40,401			4.5	%

Basic income per common share attributable to H.B. Fuller	$	0.93					$	0.74
Diluted income per common share attributable to H.B. Fuller	$	0.91					$	0.73

Weighted-average common shares outstanding:
Basic		54,946						54,269
Diluted		56,636						55,717

Dividends declared per common share	$	0.223					$	0.205

H.B. FULLER COMPANY AND SUBSIDIARIES

CONSOLIDATED FINANCIAL INFORMATION

In thousands, except per share amounts (unaudited)

	Six Months Ended			Percent of			Six Months Ended			Percent of
	June 1, 2024			Net Revenue			June 3, 2023			Net Revenue
Net revenue	$	1,727,525			100.0	%	$	1,707,421			100.0	%
Cost of sales		(1,206,237	)		(69.8	)%		(1,235,838	)		(72.4	)%
Gross profit		521,288			30.2	%		471,583			27.6	%

Selling, general and administrative expenses		(353,817	)		(20.5	)%		(321,167	)		(18.8	)%

Other income, net		5,135			0.3	%		3,209			0.2	%
Interest expense		(64,216	)		(3.7	)%		(66,200	)		(3.9	)%
Interest income		2,506			0.1	%		1,599			0.1	%
Income before income taxes and income from equity method investments		110,896			6.4	%		89,024			5.2	%

Income taxes		(30,231	)		(1.7	)%		(29,024	)		(1.7	)%

Income from equity method investments		1,644			0.1	%		2,338			0.1	%
Net income including non-controlling interest		82,309			4.8	%		62,338			3.7	%

Net income attributable to non-controlling interest		(54	)		(0.0	)%		(48	)		(0.0	)%
Net income attributable to H.B. Fuller	$	82,255			4.8	%	$	62,290			3.6	%


Basic income per common share attributable to H.B. Fuller	$	1.50					$	1.15
Diluted income per common share attributable to H.B. Fuller	$	1.45					$	1.12

Weighted-average common shares outstanding:
Basic		54,824						54,222
Diluted		56,604						55,818

Dividends declared per common share	$	0.428					$	0.395

H.B. FULLER COMPANY AND SUBSIDIARIES

REGULATION G RECONCILIATION

In thousands, except per share amounts (unaudited)

	Three Months Ended						Six Months Ended
	June 1, 2024			June 3, 2023			June 1, 2024			June 3, 2023

Net income attributable to H.B. Fuller	$	51,264		$	40,401		$	82,255		$	62,290
Adjustments:
Acquisition project costs¹		1,467			2,919			3,510			5,154
Organizational realignment²		7,275			5,690			14,536			8,634
Project One³		2,845			2,681			6,058			4,853
Other⁴		914			521			914			3,594
Discrete tax items⁵		1,317			2,042			(1,210	)		2,888
Income tax effect on adjustments⁶		(1,558	)		(2,172	)		(4,848	)		(4,572	)
Adjusted net income attributable to H.B. Fuller⁷		63,524			52,082			101,215			82,841
Add:
Interest expense		32,313			33,131			64,215			63,511
Interest income		(1,197	)		(932	)		(2,504	)		(1,599	)
Adjusted Income taxes		22,658			19,421			36,289			30,707
Depreciation and Amortization expense⁸		39,952			39,063			81,053			76,976
Adjusted EBITDA⁷		157,250			142,765			280,268			252,436

Diluted Shares		56,636			55,717			56,604			55,818
Adjusted diluted income per common share attributable to H.B. Fuller⁷	$	1.12		$	0.93		$	1.79		$	1.48
Revenue	$	917,107		$	898,239		$	1,727,525		$	1,707,421
Adjusted EBITDA margin⁷		17.1	%		15.9	%		16.2	%		14.8	%

¹ Acquisition project costs include costs related to evaluating, acquiring and integrating business acquisitions. Acquisition project costs include $1,385 and $2,105 in transaction costs (primarily consulting and professional fees, representations and warranties insurance premiums and employee acquisition-related travel expenses), $41 and $815 in purchasing accounting costs (primarily professional fees for valuation services, inventory step-up cost and the impact of changes to contingent consideration liabilities after the completion of the purchase price allocation) and $41 and $0 in business integration costs (primarily costs of transition services agreements) for the three months ended June 1, 2024 and June 3, 2023, respectively. Acquisition project costs include $2,678 and $3,741 in transaction costs (primarily consulting and professional fees, representations and warranties insurance premiums and employee acquisition related travel expenses), $255 and $1,413 in purchasing accounting costs (primarily professional fees for valuation services, inventory step-up cost and the impact of changes to contingent consideration liabilities after the completion of the purchase price allocation) and $577 and $0 in business integration costs (primarily costs of transition services agreements and, for the three months ended March 2, 2024, retention bonuses paid to employees of the acquired entities) for the six months ended June 1, 2024 and June 3, 2023, respectively.

² Organizational realignment includes costs incurred as a direct result of the organizational realignment program, including professional fees related to legal entity and business structure changes, employee retention and severance costs, and facility rationalization costs related to the closure of production facilities and consolidation of business activities. Facility rationalization costs include plant closure costs, the impact of accelerated depreciation, and, for the three months ended March 2, 2024, operational inefficiencies. Organizational realignment includes $2,246 and $1,031 in professional fees related to legal entity and business structure changes, $2,252 and $4,659 in employee severance and other related costs, and $2,777 and $0 related to facility rationalization costs for the three months ended June 1, 2024 and June 3, 2023, respectively. Organizational realignment includes $3,869 and $3,724 in professional fees related to legal entity and business structure changes, $4,426 and $4,910 in employee severance and other related costs, and $6,241 and $0 related to facility rationalization costs for the six months ended June 1, 2024 and June 3, 2023, respectively.

³ Project One includes non-capitalizable project costs related implementing our global Enterprise Resource Planning system, including upgrading to SAP S/4HANA®, which will upgrade and standardize our information system.

⁴ For fiscal 2023, Other includes the write-off of unamortized debt fees and non-cash gains and losses related to legal entity consolidations.

⁵ Discrete tax items for the three and six months ended June 1, 2024 are related to various foreign tax matters as well as excess tax benefit related to U.S. stock compensation. Discrete tax items for fiscal 2023 are related to various foreign tax matters offset by excess tax benefit related to U.S. stock compensation.

⁶ The income tax effect on adjustments represents the difference between income taxes on net income before income taxes and income from equity method investments reported in accordance with U.S. GAAP and adjusted net income before income taxes and income from equity method investments.

⁷ Adjusted net income attributable to H.B. Fuller, adjusted diluted income per common share attributable to H.B. Fuller, adjusted EBITDA and adjusted EBITDA margin are non-GAAP financial measures. Adjusted net income attributable to H.B. Fuller is defined as net income before the specific adjustments shown above. Adjusted diluted income per common share is defined as adjusted net income attributable to H.B. Fuller divided by the number of diluted common shares. Adjusted EBITDA is defined as net income before interest, income taxes, depreciation, amortization and the specific adjustments shown above. Adjusted EBITDA margin is defined as adjusted EBITDA divided by net revenue. The table above provides a reconciliation of adjusted net income attributable to H.B. Fuller, adjusted diluted income per common share attributable to H.B. Fuller, adjusted EBITDA and adjusted EBITDA margin to net income attributable to H.B. Fuller, the most directly comparable financial measure determined and reported in accordance with U.S. GAAP.

⁸ Depreciation and amortization expense added back for EBITDA is adjusted for amounts already included in adjusted net income attributable to H.B. Fuller totaling ($1,198) and $18 for the three months ended June 1, 2024 and June 3, 2023, respectively and ($3,620) and $0 for the six months ended June 1, 2024 and June 3, 2023, respectively.

H.B. FULLER COMPANY AND SUBSIDIARIES

SEGMENT FINANCIAL INFORMATION

In thousands (unaudited)

	Three Months Ended						Six Months Ended
	June 1,			June 3,			June 1,			June 3,
	2024			2023			2024			2023
Net Revenue:
Hygiene, Health and Consumable Adhesives	$	393,111		$	404,486		$	760,804		$	788,014
Engineering Adhesives		373,518			364,080			702,283			697,147
Construction Adhesives		150,478			129,673			264,438			222,260
Corporate unallocated		-			-			-			-
Total H.B. Fuller	$	917,107		$	898,239		$	1,727,525		$	1,707,421

Segment Operating Income (Loss):
Hygiene, Health and Consumable Adhesives	$	50,488		$	51,592		$	97,366		$	96,738
Engineering Adhesives		51,822			44,400			86,655			76,875
Construction Adhesives		10,418			5,969			7,799			(3,664	)
Corporate unallocated		(12,133	)		(11,811	)		(24,349	)		(19,533	)
Total H.B. Fuller	$	100,595		$	90,150		$	167,471		$	150,416

Adjusted EBITDA⁷
Hygiene, Health and Consumable Adhesives	$	65,216		$	65,234		$	127,474		$	124,953
Engineering Adhesives		68,817			61,159			121,164			111,035
Construction Adhesives		22,628			18,221			32,195			21,065
Corporate unallocated		589			(1,849	)		(565	)		(4,617	)
Total H.B. Fuller	$	157,250		$	142,765		$	280,268		$	252,436

Adjusted EBITDA Margin⁷
Hygiene, Health and Consumable Adhesives		16.6	%		16.1	%		16.8	%		15.9	%
Engineering Adhesives		18.4	%		16.8	%		17.3	%		15.9	%
Construction Adhesives		15.0	%		14.1	%		12.2	%		9.5	%
Corporate unallocated		NMP			NMP			NMP			NMP
Total H.B. Fuller		17.1	%		15.9	%		16.2	%		14.8	%

NMP = non-meaningful percentage

H.B. FULLER COMPANY AND SUBSIDIARIES

REGULATION G RECONCILIATION

In thousands, except per share amounts (unaudited)

	Three Months Ended				Six Months Ended
	June 1,		June 3,		June 1,		June 3,
	2024		2023		2024		2023
Income before income taxes and income from equity method investments	$	73,115	$	58,556	$	110,896	$	89,024

Adjustments:
Acquisition project costs¹		1,467		2,919		3,510		5,154
Organizational realignment²		7,275		5,690		14,536		8,634
Project One³		2,845		2,681		6,058		4,853
Other⁴		914		521		914		3,594
Adjusted income before income taxes and income from equity method investments⁹	$	85,616	$	70,367	$	135,914	$	111,259

⁹ Adjusted income before income taxes and income from equity investments is a non-GAAP financial measure. Adjusted income before income taxes and income from equity investments is defined as income before income taxes and income from equity investments before the specific adjustments shown above. The table above provides a reconciliation of adjusted income before income taxes and income from equity investments to income before income taxes and income from equity investments, the most directly comparable financial measure determined and reported in accordance with U.S. GAAP.

H.B. FULLER COMPANY AND SUBSIDIARIES

REGULATION G RECONCILIATION

In thousands, except per share amounts (unaudited)

	Three Months Ended						Six Months Ended
	June 1,			June 3,			June 1,			June 3,
	2024			2023			2024			2023
Income Taxes	$	(22,418	)	$	(19,291	)	$	(30,231	)	$	(29,024	)

Adjustments:
Acquisition project costs¹		(183	)		(537	)		(720	)		(1,051	)
Organizational realignment²		(906	)		(1,046	)		(2,815	)		(1,724	)
Project One³		(355	)		(493	)		(1,199	)		(993	)
Other⁴		1,204			1,946			(1,324	)		2,085
Adjusted income taxes¹⁰	$	(22,658	)	$	(19,421	)	$	(36,289	)	$	(30,707	)

Adjusted income before income taxes and income from equity method investments	$	85,616		$	70,367		$	135,914		$	111,259
Adjusted effective income tax rate¹⁰		26.5	%		27.6	%		26.7	%		27.6	%

¹⁰ Adjusted income taxes and adjusted effective income tax rate are non-GAAP financial measures. Adjusted income taxes is defined as income taxes before the specific adjustments shown above. Adjusted effective income tax rate is defined as income taxes divided by adjusted income before income taxes and income from equity method investments. The table above provides a reconciliation of adjusted income taxes and adjusted effective income tax rate to income taxes, the most directly comparable financial measure determined and reported in accordance with U.S. GAAP.

H.B. FULLER COMPANY AND SUBSIDIARIES

REGULATION G RECONCILIATION

In thousands (unaudited)

	Three Months Ended						Six Months Ended
	June 1,			June 3,			June 1,			June 3,
	2024			2023			2024			2023

Net revenue	$	917,107		$	898,239		$	1,727,525		$	1,707,421

Gross profit	$	282,052		$	256,775		$	521,288		$	471,583
Gross profit margin		30.8	%		28.6	%		30.2	%		27.6	%

Adjustments:
Acquisition project costs¹		(8	)		1,058			73			1,101
Organizational realignment²		3,466			2,690			7,880			5,011
Project One³		13			-			13			-
Other⁴		-			53			-			160
Adjusted gross profit¹¹	$	285,523		$	260,576		$	529,254		$	477,855
Adjusted gross profit margin¹¹		31.1	%		29.0	%		30.6	%		28.0	%

¹¹ Adjusted gross profit and adjusted gross profit margin are non-GAAP financial measures. Adjusted gross profit and adjusted gross profit margin is defined as gross profit and gross profit margin excluding the specific adjustments shown above. The table above provides a reconciliation of adjusted gross profit and gross profit margin to gross profit and gross profit margin, the most directly comparable financial measure determined and reported in accordance with U.S. GAAP.

H.B. FULLER COMPANY AND SUBSIDIARIES

REGULATION G RECONCILIATION

In thousands (unaudited)

	Three Months Ended						Six Months Ended
	June 1,			June 3,			June 1,			June 3,
	2024			2023			2024			2023

Selling, general and administrative expenses	$	(181,456	)	$	(166,625	)	$	(353,817	)	$	(321,167	)

Adjustments:
Acquisition project costs¹		1,475			1,861			3,437			4,053
Organizational realignment²		3,439			3,000			5,986			3,623
Project One³		2,832			2,681			6,045			4,853
Other⁴		914			468			914			731
Adjusted selling, general and administrative expenses¹²	$	(172,796	)	$	(158,615	)	$	(337,435	)	$	(307,907	)

¹² Adjusted selling, general and administrative expenses is a non-GAAP financial measure. Adjusted selling, general and administrative expenses is defined as selling, general and administrative expenses excluding the specific adjustments shown above. The table above provides a reconciliation of adjusted selling, general and administrative expenses to selling, general and administrative expenses, the most directly comparable financial measure determined and reported in accordance with U.S. GAAP.

H.B. FULLER COMPANY AND SUBSIDIARIES

REGULATION G RECONCILIATION

In thousands (unaudited)

	Hygiene, Health
Three Months Ended	and Consumable			Engineering			Construction						Corporate			H.B. Fuller
June 1, 2024	Adhesives			Adhesives			Adhesives			Total			Unallocated			Consolidated
Net income attributable to H.B. Fuller	$	51,984		$	52,876		$	11,849		$	116,709		$	(65,445	)	$	51,264
Adjustments:
Acquisition project costs¹		-			-			-			-			1,467			1,467
Organizational realignment²		-			-			-			-			7,275			7,275
Project One³		-			-			-			-			2,845			2,845
Other⁴		-			-			-			-			914			914
Discrete tax items⁵		-			-			-			-			1,317			1,317
Income tax effect on adjustments⁶		-			-			-			-			(1,558	)		(1,558	)
Adjusted net income attributable to H.B. Fuller⁷		51,984			52,876			11,849			116,709			(53,185	)		63,524
Add:
Interest expense		-			-			-			-			32,313			32,313
Interest income		-			-			-			-			(1,197	)		(1,197	)
Adjusted Income taxes		-			-			-			-			22,658			22,658
Depreciation and amortization expense⁸		13,232			15,941			10,779			39,952			-			39,952
Adjusted EBITDA⁷	$	65,216		$	68,817		$	22,628		$	156,661		$	589		$	157,250
Revenue	$	393,111		$	373,518		$	150,478		$	917,107			-		$	917,107
Adjusted EBITDA Margin⁷		16.6	%		18.4	%		15.0	%		17.1	%	NMP				17.1	%

	Hygiene, Health
Six Months Ended	and Consumable				Engineering			Construction						Corporate			H.B. Fuller
June 1, 2024		Adhesives			Adhesives			Adhesives			Total			Unallocated			Consolidated
Net income attributable to H.B. Fuller		$	100,356		$	88,762		$	10,662		$	199,780		$	(117,525	)	$	82,255
Adjustments:
Acquisition project costs¹			-			-			-			-			3,510			3,510
Organizational realignment²			-			-			-			-			14,536			14,536
Project One³			-			-			-			-			6,058			6,058
Other⁴			-			-			-			-			914			914
Discrete tax items⁵			-			-			-			-			(1,210	)		(1,210	)
Income tax effect on adjustments⁶			-			-			-			-			(4,848	)		(4,848	)
Adjusted net income attributable to H.B. Fuller⁷			100,356			88,762			10,662			199,780			(98,565	)		101,215
Add:
Interest expense			-			-			-			-			64,215			64,215
Interest income			-			-			-			-			(2,504	)		(2,504	)
Adjusted Income taxes			-			-			-			-			36,289			36,289
Depreciation and amortization expense⁸			27,118			32,402			21,533			81,053			-			81,053
Adjusted EBITDA⁷		$	127,474		$	121,164		$	32,195		$	280,833		$	(565	)	$	280,268
Revenue			760,804			702,283			264,438			1,727,525			-			1,727,525
Adjusted EBITDA Margin⁷			16.8	%		17.3	%		12.2	%		16.3	%	NMP				16.2	%

Note: Adjusted EBITDA is a non-GAAP financial measure. The table above provides a reconciliation of adjusted EBITDA for each segment to net income attributable to H.B. Fuller for each segment, the most directly comparable financial measure determined and reported in accordance with U.S. GAAP.

NMP = Non-meaningful percentage

H.B. FULLER COMPANY AND SUBSIDIARIES

REGULATION G RECONCILIATION

In thousands (unaudited)

	Hygiene, Health
Three Months Ended	and Consumable			Engineering			Construction						Corporate			H.B. Fuller
June 3, 2023	Adhesives			Adhesives			Adhesives			Total			Unallocated			Consolidated
Net income attributable to H.B. Fuller	$	52,692		$	45,172		$	7,687		$	105,551		$	(65,150	)	$	40,401
Adjustments:
Acquisition project costs¹		-			-			-			-			2,919			2,919
Organizational realignment²		-			-			-			-			5,690			5,690
Project One³		-			-			-			-			2,681			2,681
Other⁴		-			-			-			-			521			521
Discrete tax items⁵		-			-			-			-			2,042			2,042
Income tax effect on adjustments⁶		-			-			-			-			(2,172	)		(2,172	)
Adjusted net income attributable to H.B. Fuller⁷		52,692			45,172			7,687			105,551			(53,469	)		52,082
Add:
Interest expense		-			-			-			-			33,131			33,131
Interest income		-			-			-			-			(932	)		(932	)
Adjusted Income taxes		-			-			-			-			19,421			19,421
Depreciation and amortization expense⁸		12,542			15,987			10,534			39,063			-			39,063
Adjusted EBITDA⁷	$	65,234		$	61,159		$	18,221		$	144,614		$	(1,849	)	$	142,765
Revenue	$	404,486		$	364,080		$	129,673		$	898,239			-		$	898,239
Adjusted EBITDA Margin⁷		16.1	%		16.8	%		14.1	%		16.1	%	NMP				15.9	%

	Hygiene, Health
Six Months Ended	and Consumable		Engineering		Construction				Corporate			H.B. Fuller
June 3, 2023	Adhesives		Adhesives		Adhesives		Total		Unallocated			Consolidated
Net income attributable to H.B. Fuller	$	100,399	$	79,522	$	156	$	180,077	$	(117,787	)	$	62,290
Adjustments:
Acquisition project costs¹		-		-		-		-		5,154			5,154

H.B. Fuller Reports Second Quarter 2024 Results