By: ICN Bureau
Last updated : September 26, 2021 11:18 am
Strategic supply chain management enabled the company to secure raw materials to meet increasing demand
H.B. Fuller delivered another strong quarter with double-digit organic revenue growth. 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 &CEO.
“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.”