Net revenue up 20% and organic revenue up 16% driven by strong volume growth and pricing

Net income of $32 million and EPS of $0.58; adjusted EPS of $0.79

Adjusted EBITDA of $111 million, up 5% year-on-year despite significant raw materials headwinds

H.B. Fuller Company (NYSE:FUL) today reported financial results for its third quarter ended August 28, 2021.

Items of Note

Net revenue increased 20% versus the third quarter of last year. Organic revenue increased 16%, with 10% from volume growth and 6% from pricing.
Organic revenue was up 13% when compared with the non-COVID-impacted third quarter of 2019.
Net income increased to $32 million; volume leverage, pricing and operating expense efficiencies offset higher raw material costs and drove a 5% year-over-year increase in adjusted EBITDA to $111 million, ahead of our expectations.
Earnings per diluted share (EPS) were $0.58; adjusted EPS of $0.79 increased 4% year over year.
Strategic supply chain management enabled the company to secure raw materials to meet increasing demand, and pricing actions have been implemented that are expected to restore margins in the fourth quarter and into 2022.
Year-to-date debt paydown of $110 million keeps the company on track to its $200 million debt reduction target for the full year.

Summary of Third Quarter 2021 Results

Net revenue of $827 million increased 20% compared with the third quarter of 2020. Foreign currency exchange rates favorably impacted revenue by 3%. Organic revenue, which excludes impacts from foreign currency translation, increased 16% versus last year, with double-digit organic growth in all three Global Business Units (GBUs). Organic revenue also significantly increased by 13% when compared with the non-COVID impacted third quarter of 2019, with strong organic growth in all three GBUs.

Gross profit was $194 million. Adjusted gross profit of $196 million increased 4% versus the same period last year. Adjusted gross profit margin declined year over year, as expected, as higher sales volume and pricing gains were offset by elevated raw material and freight costs. Selling, General and Administrative (SG&A) expense was $135 million. Adjusted SG&A expense of $129 million improved by 220 basis points as a percent of revenue versus the third quarter last year, resulting from strong volume leverage and general expense controls.

As a result of these factors, net income attributable to H.B. Fuller in the quarter was $32 million, or $0.58 per diluted share. Adjusted net income attributable to H.B. Fuller of $43 million and adjusted EPS of $0.79 increased by 7% and 4%, respectively, compared with $40 million and $0.76 in the same period last year. Adjusted EBITDA of $111 million increased 5% compared with $106 million in the prior year.

"H.B. Fuller delivered another strong quarter with double-digit organic revenue growth as we gained share in key market segments through innovative solutions, improved pricing and took decisive actions to secure raw materials and meet customer demand," said Jim Owens, H.B. Fuller's president and chief executive officer. "Throughout the quarter, we took strategic steps to serve customers in the face of ongoing raw material and packaging shortages as well as increasing inflationary pressures on logistics, freight, and labor. We have implemented $225 million of annualized pricing adjustments this year and recently announced additional price increases and a surcharge on global shipments effective September 1, 2021. We anticipate a significant improvement in margins in the fourth quarter as a result of these actions. As our business continues to demonstrate resilience, we are increasingly confident in our ability to create and deliver significant value for shareholders in any market environment. The actions that we have taken over the last nine months in support of our customers enables us to exit the year with strong margin momentum."

Other Financial Metrics

At the end of the third quarter of fiscal 2021, the company had cash and equivalents of $68 million and total debt equal to $1,664 million. This compares to cash and debt levels equal to $75 million and $1,869 million, respectively, at the end of the third quarter of 2020. Capital expenditures for the nine-month period were $77 million compared with $72 million in the same period last year.

Planning Assumptions

Based on current assumptions, we have increased our estimated full-year revenue guidance. Full-year revenue growth is now anticipated to be 17% to 18% compared with fiscal 2020, resulting in anticipated fourth quarter revenue growth of 15% to 17% versus the fourth quarter of 2020.
For the fiscal year 2021, adjusted EBITDA is anticipated to be approximately $460 million to $470 million, an increase of 13% to 16% versus 2020, which is supported by on-going recovery in global industrial production, pricing actions balancing higher input costs, and benefits from the company's operational improvement projects.

Conference Call

The company will hold a conference call on September 23, 2021, at 9:30 a.m. CDT (10:30 a.m. EDT) 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 should access the webcast 10 minutes prior to the start of the call to install and test any necessary audio software. A telephone replay of the conference call will be available from 12:30 p.m. CDT on September 23, 2021 through October 1, 2021. To access the telephone replay dial (800) 585-8367 or (416) 621-4642 and enter Conference ID: 1786575.

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 and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) 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 2021 Planning Assumptions, which the company cannot reconcile to forward-looking GAAP results without unreasonable effort.

About H.B. Fuller

Since 1887, 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. With fiscal 2020 net revenue of $2.8 billion, H.B. Fuller's commitment to innovation brings together people, products and processes that answer and solve some of the world's biggest challenges. Our reliable, responsive service creates lasting, rewarding connections with customers in electronics, disposable hygiene, medical, transportation, aerospace, clean energy, packaging, construction, woodworking, general industries and other consumer businesses. And, our promise to our people connects them with opportunities to innovate and thrive. For more information, visit us at https://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 consequences of the COVID-19 outbreak and other pandemics on our operations and financial results; 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, 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 the current dividend policy; 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; availability and price of raw materials; 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. Many of the foregoing risks and uncertainties are, and will be, exacerbated by COVID-19 and resulting deterioration of the global business and economic environment.

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
	Aug. 28, 2021			Net Revenue			Aug. 29, 2020			Net Revenue
Net revenue	$	826,830			100.0	%	$	691,463			100.0	%
Cost of sales		(632,880	)		(76.5	)%		(503,619	)		(72.8	)%
Gross profit		193,950			23.5	%		187,844			27.2	%

Selling, general and administrative expenses		(134,497	)		(16.3	)%		(129,113	)		(18.7	)%
Other income, net		6,150			0.7	%		3,722			0.5	%
Interest expense		(19,396	)		(2.3	)%		(20,196	)		(2.9	)%
Interest income		2,520			0.3	%		2,945			0.4	%
Income before income taxes and income from equity method investments		48,727			5.9	%		45,202			6.5	%

Income taxes		(19,095	)		(2.3	)%		(5,112	)		(0.7	)%

Income from equity method investments		1,998			0.2	%		1,541			0.2	%
Net income including non-controlling interest		31,630			3.8	%		41,631			6.0	%

Net income attributable to non-controlling interest		(14	)		(0.0	)%		(24	)		(0.0	)%
Net income attributable to H.B. Fuller	$	31,616			3.8	%	$	41,607			6.0	%

Basic income per common share attributable to H.B. Fuller	$	0.60					$	0.80
Diluted income per common share attributable to H.B. Fuller	$	0.58					$	0.79

Weighted-average common shares outstanding:
Basic		53,049						52,130
Diluted		54,646						52,591

Dividends declared per common share	$	0.168					$	0.163

Selected Balance Sheet Information (subject to change prior to filing of the Company's Quarterly Report on Form 10-Q)

	August 28, 2021		November 28, 2020		August 29, 2020
Cash & cash equivalents	$	68,134	$	100,534	$	74,922
Trade accounts receivable, net		572,855		514,916		476,099
Inventories		462,635		323,213		354,221
Trade payables		485,796		316,460		272,232
Total assets		4,258,272		4,036,704		3,981,725
Total debt		1,664,007		1,773,910		1,868,926

H.B. FULLER COMPANY AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
In thousands, except per share amounts (unaudited)

	Nine Months Ended August 28, 2021			Percent of Net Revenue			Nine Months Ended August 29, 2020			Percent of Net Revenue
Net revenue	$	2,380,607			100.0	%	$	2,012,629			100.0	%
Cost of sales		(1,776,744	)		(74.6	)%		(1,469,622	)		(73.0	)%
Gross profit		603,863			25.4	%		543,007			27.0	%

Selling, general and administrative expenses		(426,921	)		(17.9	)%		(398,620	)		(19.8	)%

Other income, net		25,899			1.1	%		11,740			0.6	%
Interest expense		(59,699	)		(2.5	)%		(64,597	)		(3.2	)%
Interest income		7,709			0.3	%		8,761			0.4	%
Income before income taxes and income from equity method investments		150,851			6.3	%		100,291			5.0	%

Income taxes		(46,362	)		(1.9	)%		(22,194	)		(1.1	)%

Income from equity method investments		6,071			0.3	%		5,068			0.3	%
Net income including non-controlling interest		110,560			4.6	%		83,165			4.1	%

Net income attributable to non-controlling interest		(51	)		(0.0	)%		(50	)		(0.0	)%
Net income attributable to H.B. Fuller	$	110,509			4.6	%	$	83,115			4.1	%


Basic income per common share attributable to H.B. Fuller	$	2.09					$	1.60
Diluted income per common share attributable to H.B. Fuller	$	2.04					$	1.59

Weighted-average common shares outstanding:
Basic		52,794						51,959
Diluted		54,093						52,400

Dividends declared per common share	$	0.498					$	0.485

H.B. FULLER COMPANY AND SUBSIDIARIES

REGULATION G RECONCILIATION

In thousands, except per share amounts (unaudited)

	Three Months Ended						Nine Months Ended
	August 28,			August 29,			August 28,			August 29,
	2021			2020			2021			2020
Net income attributable to H.B. Fuller	$	31,616		$	41,607		$	110,509		$	83,115

Adjustments:
Acquisition project costs		901			(73	)		2,277			(1,584	)
Organizational realignment¹		3,087			3,308			9,029			8,286
Royal restructuring and integration²		1,016			1,790			3,537			7,379
Tax reform		-			-			-			(35	)
Project One		2,305			1,602			6,469			4,141
Other³		111			654			(3,701	)		1,725
Discrete tax items⁴		5,626			(7,183	)		5,068			(5,129	)
Income tax effect on adjustments⁵		(1,746	)		(1,755	)		(4,359	)		(5,012	)
Adjusted net income attributable to H.B. Fuller⁶		42,916			39,950			128,829			92,886

Add:
Interest expense		19,412			20,220			59,769			64,650
Interest income		(2,520	)		(2,945	)		(7,709	)		(8,761	)
Income taxes		15,216			14,050			45,653			32,335
Depreciation and Amortization expense⁷		35,705			34,432			106,596			102,992
Adjusted EBITDA⁶		110,729			105,707			333,138			284,102

Diluted Shares		54,646			52,591			54,093			52,400
Adjusted diluted income per common share attributable to H.B. Fuller⁶	$	0.79		$	0.76		$	2.38		$	1.77
Revenue	$	826,830		$	691,463		$	2,380,607		$	2,012,629
Adjusted EBITDA margin⁶		13.4	%		15.3	%		14.0	%		14.1	%

¹ Includes costs incurred as a direct result of the organizational realignment program, including compensation for employees supporting the program, consulting expense and operational inefficiencies related to the closure of production facilities and consolidation of business activities.

² Costs incurred as a direct result of the Royal restructuring and integration program including compensation for employees supporting the program, consulting expense and operational inefficiencies related to the closure of production facilities and consolidation of business activities.

³ Three and nine months ended August 28, 2021 includes one-time, non-cash gains related to a transactional tax legal settlement in Brazil and a legal entity merger.

⁴ Includes adjustment of $5,626 of discrete tax expense in the quarter ended August 28, 2021 relating to the revaluation of cross-currency swap agreements due to depreciation of the Euro versus U.S. dollar and various foreign tax matters. Includes adjustment of ($7,183) of discrete tax benefit in the quarter ended August 29, 2020 relating to the revaluation of cross-currency swap agreements due to appreciation of the Euro versus U.S. dollar and various foreign tax matters.

⁵ 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.

⁶ 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.

⁷ Depreciation and amortization expense added back for EBITDA is adjusted for amounts already included in Adjusted net income attributable to H.B. Fuller totaling ($292) and ($413) for the three months ended August 28, 2021 and August 29, 2020, respectively and ($1,026) and ($509) for the nine months ended August 28, 2021 and August 29, 2020, respectively.

H.B. FULLER COMPANY AND SUBSIDIARIES

SEGMENT FINANCIAL INFORMATION

In thousands (unaudited)

	Three Months Ended						Nine Months Ended
	August 28,			August 29,			August 28,			August 29,
	2021			2020			2021			2020
Net Revenue:
Hygiene, Health and Consumable Adhesives	$	369,439		$	320,187		$	1,069,922		$	977,373
Engineering Adhesives		342,300			276,083			1,000,337			761,040
Construction Adhesives		115,091			95,193			310,348			274,216
Corporate unallocated		-			-			-			-
Total H.B. Fuller	$	826,830		$	691,463		$	2,380,607		$	2,012,629

Segment Operating Income:
Hygiene, Health and Consumable Adhesives	$	29,652		$	31,883		$	98,493		$	89,556
Engineering Adhesives		34,087			29,873			96,580			65,386
Construction Adhesives		3,339			4,284			4,974			9,436
Corporate unallocated		(7,625	)		(7,309	)		(23,105	)		(19,991	)
Total H.B. Fuller	$	59,453		$	58,731		$	176,942		$	144,387

Adjusted EBITDA⁶
Hygiene, Health and Consumable Adhesives	$	44,496		$	43,697		$	142,671		$	127,914
Engineering Adhesives		52,001			46,831			150,034			112,918
Construction Adhesives		14,247			14,394			37,785			39,893
Corporate unallocated		(15	)		785			2,648			3,377
Total H.B. Fuller	$	110,729		$	105,707		$	333,138		$	284,102

Adjusted EBITDA Margin⁶
Hygiene, Health and Consumable Adhesives		12.0	%		13.6	%		13.3	%		13.1	%
Engineering Adhesives		15.2	%		17.0	%		15.0	%		14.8	%
Construction Adhesives		12.4	%		15.1	%		12.2	%		14.5	%
Corporate unallocated	NMP			NMP			NMP			NMP
Total H.B. Fuller		13.4	%		15.3	%		14.0	%		14.1	%

NMP = non-meaningful percentage

H.B. FULLER COMPANY AND SUBSIDIARIES

REGULATION G RECONCILIATION

In thousands, except per share amounts (unaudited)

	Three Months Ended					Nine Months Ended
	August 28,		August 29,			August 28,			August 29,
	2021		2020			2021			2020
Income before income taxes and income from equity method investments	$	48,727	$	45,202		$	150,851		$	100,291

Adjustments:
Acquisition project costs		901		(73	)		2,277			(1,584	)
Organizational realignment		3,087		3,308			9,029			8,286
Royal restructuring and integration		1,016		1,790			3,537			7,379
Tax reform		-		-			-			(35	)
Project One		2,305		1,602			6,469			4,141
Other³		111		654			(3,701	)		1,725
Adjusted income before income taxes and income from equity method investments⁸	$	56,147	$	52,483		$	168,462		$	120,203

⁸ 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						Nine Months Ended
	August 28,			August 29,			August 28,			August 29,
	2021			2020			2021			2020
Income Taxes	$	(19,095	)	$	(5,112	)	$	(46,362	)	$	(22,194	)

Adjustments:
Acquisition project costs		(212	)		18			(495	)		423
Organizational realignment		(726	)		(797	)		(2,204	)		(2,087	)
Royal restructuring and integration		(239	)		(431	)		(846	)		(1,877	)
Tax reform		-			-			-			9
Project One		(542	)		(386	)		(1,551	)		(1,043	)
Other⁴		5,598			(7,342	)		5,805			(5,566	)
Adjusted income taxes⁹	$	(15,216	)	$	(14,050	)	$	(45,653	)	$	(32,335	)

Adjusted income before income taxes and income from equity method investments	$	56,147		$	52,483		$	168,462		$	120,203
Adjusted effective income tax rate⁹		27.1	%		26.8	%		27.1	%		26.9	%

⁹ Adjusted income taxes and adjusted effective income tax rate are non-GAAP financial measures. Adjusted income taxes are 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						Nine Months Ended
	August 28,			August 29,			August 28,			August 29,
	2021			2020			2021			2020

Net revenue	$	826,830		$	691,463		$	2,380,607		$	2,012,629

Gross profit	$	193,950		$	187,844		$	603,863		$	543,007
Gross profit margin		23.5	%		27.2	%		25.4	%		27.0	%

Adjustments:
Acquisition project costs		1			-			64			-
Organizational realignment		1,472			(204	)		2,265			(53	)
Royal restructuring and integration		644			1,132			1,962			2,730
Project ONE		(22	)		-			(22	)		-
Other		247			272			1,635			1,263
Adjusted gross profit¹⁰	$	196,292		$	189,044		$	609,767		$	546,947
Adjusted gross profit margin¹⁰		23.7	%		27.3	%		25.6	%		27.2	%

¹⁰ 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						Nine Months Ended
	August 28,			August 29,			August 28,			August 29,
	2021			2020			2021			2020

Selling, general and administrative expenses	$	(134,497	)	$	(129,113	)	$	(426,921	)	$	(398,620	)

Adjustments:
Acquisition project costs		901			(73	)		2,214			(1,584	)
Organizational realignment		1,614			3,516			6,819			8,342
Royal restructuring and integration		388			682			1,644			4,725
Tax reform		-			-			-			(35	)
Project ONE		2,327			1,602			6,491			4,142
Other		55			382			32			462
Adjusted selling, general and administrative expenses¹¹	$	(129,212	)	$	(123,004	)	$	(409,721	)	$	(382,568	)

¹¹ 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
August 28, 2021	Adhesives			Adhesives			Adhesives			Total			Unallocated			Consolidated
Net income attributable to H.B. Fuller	$	32,924		$	36,599		$	5,516		$	75,039		$	(43,423	)	$	31,616
Adjustments:
Acquisition project costs		-			-			-			-			901			901
Organizational realignment		-			-			-			-			3,087			3,087
Royal Restructuring		-			-			-			-			1,016			1,016
Project One		-			-			-			-			2,305			2,305
Other³		-			-			-			-			111			111
Discrete tax items⁴		-			-			-			-			5,626			5,626
Income tax effect on adjustments⁵		-			-			-			-			(1,746	)		(1,746	)
Adjusted net income attributable to H.B. Fuller⁶		32,924			36,599			5,516			75,039			(32,123	)		42,916
Add:
Interest expense		-			-			-			-			19,412			19,412
Interest income		-			-			-			-			(2,520	)		(2,520	)
Income taxes		-			-			-			-			15,216			15,216
Depreciation and amortization expense		11,572			15,402			8,731			35,705			-			35,705
Adjusted EBITDA⁶	$	44,496		$	52,001		$	14,247		$	110,744		$	(15	)	$	110,729
Revenue	$	369,439		$	342,300		$	115,091		$	826,830			-		$	826,830
Adjusted EBITDA Margin⁶		12.0	%		15.2	%		12.4	%		13.4	%	NMP				13.4	%

	Hygiene, Health
Nine Months Ended	and Consumable			Engineering			Construction						Corporate			H.B. Fuller
August 28, 2021	Adhesives			Adhesives			Adhesives			Total			Unallocated			Consolidated
Net income attributable to H.B. Fuller	$	108,291		$	104,099		$	11,504		$	223,894		$	(113,385	)	$	110,509
Adjustments:
Acquisition project costs		-			-			-			-			2,277			2,277
Organizational realignment		-			-			-			-			9,029			9,029
Royal Restructuring		-			-			-			-			3,537			3,537
Project One		-			-			-			-			6,469			6,469
Other³		-			-			-			-			(3,701	)		(3,701	)
Discrete tax items⁴		-			-			-			-			5,068			5,068
Income tax effect on adjustments⁵		-			-			-			-			(4,359	)		(4,359	)
Adjusted net income attributable to H.B. Fuller⁶		108,291			104,099			11,504			223,894			(95,065	)		128,829
Add:
Interest expense		-			-			-			-			59,769			59,769
Interest income		-			-			-			-			(7,709	)		(7,709	)
Income taxes		-			-			-			-			45,653			45,653
Depreciation and amortization expense		34,380			45,935			26,281			106,596			-			106,596
Adjusted EBITDA⁶	$	142,671		$	150,034		$	37,785		$	330,490		$	2,648		$	333,138
Revenue		1,069,922			1,000,337			310,348			2,380,607			-			2,380,607
Adjusted EBITDA Margin⁶		13.3	%		15.0	%		12.2	%		13.9	%	NMP				14.0	%

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
August 29, 2020	Adhesives			Adhesives			Adhesives			Total			Unallocated			Consolidated
Net income attributable to H.B. Fuller	$	33,688		$	31,334		$	5,468		$	70,490		$	(28,883	)	$	41,607
Adjustments:
Acquisition project costs		-			-			-			-			(73	)		(73	)
Organizational realignment		-			-			-			-			3,308			3,308
Royal Restructuring		-			-			-			-			1,790			1,790
Project One		-			-			-			-			1,602			1,602
Other³		-			-			-			-			654			654
Discrete tax items⁴		-			-			-			-			(7,183	)		(7,183	)
Income tax effect on adjustments⁵		-			-			-			-			(1,755	)		(1,755	)
Adjusted net income attributable to H.B. Fuller⁶		33,688			31,334			5,468			70,490			(30,540	)		39,950
Add:
Interest expense		-			-			-			-			20,220			20,220
Interest income		-			-			-			-			(2,945	)		(2,945	)
Income taxes		-			-			-			-			14,050			14,050
Depreciation and amortization expense		10,009			15,497			8,926			34,432			-			34,432
Adjusted EBITDA⁶	$	43,697		$	46,831		$	14,394		$	104,922		$	785		$	105,707
Revenue	$	320,187		$	276,083		$	95,193		$	691,463			-		$	691,463
Adjusted EBITDA Margin⁶		13.6	%		17.0	%		15.1	%		15.2	%	NMP				15.3	%


Nine Months Ended	Hygiene, Health and Consumable				Engineering			Construction						Corporate			H.B. Fuller
August 29, 2020	Adhesives				Adhesives			Adhesives			Total			Unallocated			Consolidated
Net income attributable to H.B. Fuller		$	94,979		$	69,767		$	12,987		$	177,733		$	(94,618	)	$	83,115
Adjustments:
Acquisition project costs			-			-			-			-			(1,584	)		(1,584	)
Organizational realignment			-			-			-			-			8,286			8,286
Royal Restructuring			-			-			-			-			7,379			7,379
Tax reform			-			-			-			-			(35	)		(35	)
Project One			-			-			-			-			4,141			4,141
Other³			-			-			-			-			1,725			1,725
Discrete tax items⁴			-			-			-			-			(5,129	)		(5,129	)
Income tax effect on adjustments⁵			-			-			-			-			(5,012	)		(5,012	)
Adjusted net income attributable to H.B. Fuller⁶			94,979			69,767			12,987			177,733			(84,847	)		92,886
Add:
Interest expense			-			-			-			-			64,650			64,650
Interest income			-			-			-			-			(8,761	)		(8,761	)
Income taxes			-			-			-			-			32,335			32,335
Depreciation and amortization expense			32,935			43,151			26,906			102,992			-			102,992
Adjusted EBITDA⁶		$	127,914		$	112,918		$	39,893		$	280,725		$	3,377		$	284,102
Revenue		$	977,373		$	761,040		$	274,216		$	2,012,629			-		$	2,012,629
Adjusted EBITDA Margin⁵			13.1	%		14.8	%		14.5	%		13.9	%	NMP				14.1	%

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

SEGMENT FINANCIAL INFORMATION

NET REVENUE GROWTH

(unaudited)

	Three Months Ended			Nine Months Ended
	August 28, 2021			August 28, 2021
Price		6.3	%		2.6	%
Volume		10.1	%		12.7	%
Organic Growth¹²		16.4	%		15.3	%
F/X		3.2	%		3.0	%
Total H.B. Fuller Net Revenue Growth		19.6	%		18.3	%

Revenue growth versus 2020	Three Months Ended									Nine Months Ended
	August 28, 2021									August 28, 2021
	Net Revenue			F/X			Organic Growth¹¹			Net Revenue			F/X			Organic Growth¹¹
Hygiene, Health and Consumable Adhesives		15.4	%		2.4	%		13.0	%		9.5	%		1.6	%		7.9	%
Engineering Adhesives		24.0	%		4.8	%		19.2	%		31.4	%		5.3	%		26.1	%
Construction Adhesives		20.9	%		1.4	%		19.5	%		13.2	%		1.6	%		11.6	%
Total H.B. Fuller		19.6	%		3.2	%

H.B. Fuller Reports Third Quarter 2021 Results