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Mar 04, 2023
H.B. Fuller Q1 2023 Earnings Report
Reported net income of $22 million and adjusted EBITDA of $110 million, which was at the high-end of the company's guidance.
Key Takeaways
H.B. Fuller reported first quarter 2023 results with net revenue of $809 million, a decrease of 5.5% year-on-year. Net income was $22 million, and adjusted EBITDA was $110 million, at the high end of the company's expectations. The company initiated strategic restructuring to align cost structure and completed a refinancing of a majority of outstanding debt.
Net revenue of $809 million, down 5.5% year-on-year, in-line with Company expectations
Adjusted gross margin of 26.9% increased 190 basis points year-on-year, driven by the combined effect of pricing and raw material cost developments
Adjusted EBITDA was $110 million, at the high end of Company expectations, and adjusted EBITDA margin expanded year-on-year to 13.6%
Cash flow from operations in the first quarter improved $23 million year-on-year
Revenue by Segment
Forward Guidance
The Company continues to expect adjusted EBITDA for fiscal 2023 to be in the range of $580 million to $610 million. Adjusted EPS (diluted) is now expected to be in the range of $4.10 to $4.50. Revenue for fiscal 2023 is now expected to be down 1% to 4% versus 2022.
Positive Outlook
- Adjusted EBITDA for fiscal 2023 to be in the range of $580 million to $610 million, equating to growth of approximately 9% to 15% versus fiscal year 2022
- Adjusted EPS (diluted) is now expected to be in the range of $4.10 to $4.50, equating to growth of between 3% to 13% year-on-year
- Fully diluted shares outstanding is now expected to be approximately 56 million
- Operating cash flow in fiscal 2023 is still expected to be between $300 million and $350 million
Challenges Ahead
- Revenue for fiscal 2023 is now expected to be down 1% to 4% versus 2022
- Organic revenue for fiscal 2023 is now expected to be in the range of down 1% to up 1%, reflecting expected demand weakness in Construction Adhesives
- Foreign currency translation is now expected to unfavorably impact net revenue growth by between 1% and 2% in fiscal year 2023
Historical Earnings Impact
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Avg. Return Before/After Earnings
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