H.B. Fuller Company (NYSE: FUL), founded in 1887, is a leading global adhesives manufacturer headquartered in St. Paul, Minnesota. The company reported its fourth quarter and fiscal year 2024 financial results, highlighting a stable performance despite some challenges.

For the fiscal year 2024, H.B. Fuller achieved a net revenue of $3.57 billion, reflecting a year-on-year increase of 1.6%. However, organic revenue fell by 1.0%, attributed to a 2.7% decrease in pricing, which was partially offset by a 1.7% rise in volume. The company’s gross margin improved to 29.8%, with an adjusted gross margin of 30.3%, an increase of 90 basis points from the previous year due to pricing actions, higher volume, and restructuring benefits.

Net income for fiscal year 2024 was $130 million, while adjusted EBITDA reached $594 million, representing a 2.2% rise year-on-year. The adjusted EBITDA margin increased to 16.6%. Reported diluted EPS was $2.30, and adjusted diluted EPS was $3.84, remaining effectively flat from the prior year due to higher amortization costs. H.B. Fuller’s net working capital as a percentage of annualized net revenue improved, declining 160 basis points to 14.5%, with cash flow from operations reported at $301 million.

In the fourth quarter, net revenue was $923 million, an increase of 2.3% year-on-year, but organic sales slipped 0.2%. The gross margin fell to 28.7%, and the adjusted gross margin decreased to 29.6%, attributed to unfavorable raw material cost developments and delays in price realization. Net income for the quarter was a loss of $7 million, which included a significant $38 million non-cash impact from the Flooring divestiture. Adjusted EBITDA was $148 million, showing a decrease of 14% year-on-year, leading to an adjusted EBITDA margin of 16.1%. Reported diluted EPS for the fourth quarter was ($0.13), and adjusted diluted EPS was $0.92, a decrease driven by lower operating income.

On the balance sheet, H.B. Fuller reported net debt of $1.84 billion, unchanged from the previous quarter but up $182 million year-on-year. The net debt-to-adjusted EBITDA ratio stood firm at 3.1x, consistent with the prior quarter.

Looking towards fiscal 2025, the company anticipates a net revenue decline of 2% to 4%. Adjusted EBITDA guidance for the year is projected in the range of $600 million to $625 million.

The company is continuing a strategic expansion of its manufacturing and supply chain footprint, anticipated to yield a $75 million annualized cost saving by 2030. It has also realigned its business segments, specifically in the building and construction market. This reorganization is aimed at improving operational efficiencies and sustaining long-term growth in a challenging market environment.