H.B. Fuller Company, based in St. Paul, Minnesota, is a leading provider of adhesives, sealants, and other specialty chemical products, focusing on functional coatings. The company operates primarily within the construction, automotive, and consumer goods sectors, serving customers across more than 30 market segments and 140 countries.

In the first quarter of fiscal 2025, H.B. Fuller reported a slight decline in financial performance, with net revenue totaling $789 million, down 2.7% compared to the prior year. The decrease stemmed from a 3.4% negative impact due to foreign exchange and a 1.2% revenue decline from divestitures, although organic revenue increased by 1.9% year-on-year, driven by a 1.7% increase in volume and a 0.2% increase in pricing.

Adjusted EBITDA for the quarter was $114 million, a year-on-year decline of 7%. This resulted in an adjusted EBITDA margin of 14.5%. Gross profit for the quarter was $227 million, reflecting an adjusted gross margin of 29.6%, which was down 50 basis points compared to the prior year, attributable to increased raw material costs impacting profitability despite positive pricing and volume leverage.

Operating expenses increased with adjusted selling, general, and administrative (SG&A) expense rising by 2% year-on-year to $169 million. The increase was driven by acquisitions and higher variable compensation, though offset partially by favorable foreign exchange impacts.

Net income attributable to H.B. Fuller for the first quarter was $13 million, resulting in an adjusted earnings per share of $0.54, down from $0.67 for the same period last year. The company also increased its share repurchases, buying back 678,000 shares during the quarter.

Looking ahead, H.B. Fuller reiterated its financial guidance for fiscal year 2025, expecting net revenue to decline by 2% to 4%. Organic revenue growth is projected to be flat to up 2%, while adjusted EBITDA is forecasted in the range of $600 million to $625 million, which represents 1% to 5% growth year-on-year. Additionally, full-year adjusted earnings per share is expected in the range of $3.90 to $4.20.

The company’s balance sheet reflects a net debt of $2.074 billion at the end of the first quarter, an increase from $1.665 billion year-on-year. The net debt to adjusted EBITDA ratio stood at 3.5x, up from 3.1x at the end of the previous fiscal year. Cash flow from operations was down compared to the previous year, primarily due to increased working capital requirements. The management anticipates cash flow delivery for the year to be weighted toward the second half.

H.B. Fuller will continue to seek operational efficiencies and maintain its commitment to price discipline as it navigates a challenging market environment. The next quarterly conference call is scheduled for June 2025 to discuss the latest financial and operational developments.