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Nov 27, 2021
H.B. Fuller Q4 2021 Earnings Report
Reported a revenue increase of 15% and adjusted EBITDA increase of 9%, driven by volume growth and accelerated pricing.
Key Takeaways
H.B. Fuller reported strong Q4 2021 results, with a 15% increase in revenue and a 9% increase in adjusted EBITDA. The company successfully executed its priorities of volume growth, pricing, and productivity, driving double-digit organic revenue growth and improving its net debt to EBITDA ratio.
Net and organic revenue increased 15% versus the fourth quarter of 2020.
Volume growth and more than $100 million of pricing realized in the quarter drove 340 basis points of sequential gross margin improvement versus the third quarter of 2021.
Net income increased year over year to $65 million; adjusted EBITDA increased 9% to $134 million as volume leverage and accelerated pricing offset raw material cost inflation.
Strong debt paydown and EBITDA growth reduced net debt leverage to 3.3x adjusted EBITDA, compared with 4.1x at year-end 2020.
Revenue by Segment
Forward Guidance
The company is providing financial guidance for fiscal 2022 based on current economic views and assumptions for global commercial activity.
Positive Outlook
- Full year organic sales are expected to increase between 10% and 15% year over year.
- Management anticipates annual adjusted EPS in the range of $4.00 to $4.25.
- Annual adjusted EBITDA in the range of $515 to $535 million.
- Fiscal year 2022 has an extra week in the fourth quarter for 53 weeks of activity versus the normal 52 week fiscal year, which is included in its financial guidance.
Challenges Ahead
- Foreign currency exchange rates are anticipated to have an unfavorable impact of 2% to 3% on full year net revenue growth versus fiscal 2021.
- The company’s core tax rate, excluding the impact of discrete items, is anticipated to be between 27% and 29%.
- Full year interest expense is estimated to be between $65 million and $70 million.
- Capital investments are planned to be in the range of $100 to $110 million.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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