H.B. Fuller's Q3 Net Income Jumps 21% Despite Revenue Dip

TL;DR

**FUL's Q3 net income beat revenue expectations, but the nine-month revenue decline and cash burn on acquisitions signal a risky, long-term bet on specialty markets.**

AI Summary

H.B. Fuller Company reported mixed financial results for the three and nine months ended August 30, 2025. Net revenue decreased by 2.8% to $892.0 million for the three months ended August 30, 2025, compared to $917.9 million in the prior year, and fell 2.5% to $2.58 billion for the nine months, down from $2.65 billion. Despite the revenue decline, net income attributable to H.B. Fuller increased by 21.3% to $67.2 million for the three-month period, up from $55.4 million, but decreased by 11.2% to $122.2 million for the nine-month period, from $137.6 million. Diluted EPS saw a significant increase of 24.5% to $1.22 for the quarter, but a decrease of 9.1% to $2.21 for the nine months. The company strategically acquired ND Industries Asia, Inc. for approximately $8.3 million, GEM S.r.l. and Medifill Limited for a combined $197.0 million, and HS Butyl Limited for $23.4 million, aiming to shift its portfolio towards higher-margin, higher-growth markets like medical adhesives and functional coatings. Cash and cash equivalents decreased by $46.9 million to $122.5 million as of August 30, 2025, primarily due to significant cash used in investing activities, including $162.1 million for business acquisitions.

Why It Matters

H.B. Fuller's strategic acquisitions in medical adhesives and functional coatings, like GEM S.r.l. and ND Industries Asia, signal a clear pivot towards higher-growth, higher-margin segments, which could enhance long-term profitability and competitive positioning against rivals. While revenue declined, the increase in quarterly net income suggests effective cost management and integration of new businesses. Investors should watch how these acquisitions contribute to future revenue growth and margin expansion, especially in the competitive specialty chemicals market. This shift could also impact employees through new skill requirements and customers through an expanded product portfolio.

Risk Assessment

Risk Level: medium — The company's net cash provided by operating activities significantly decreased from $216.8 million in the nine months ended August 31, 2024, to $156.8 million in the nine months ended August 30, 2025, indicating reduced operational cash generation. Furthermore, cash and cash equivalents declined by $46.9 million to $122.5 million, and the company used $182.7 million in investing activities, including $162.1 million for business acquisitions, which could strain liquidity if not managed effectively.

Analyst Insight

Investors should monitor the integration and performance of recent acquisitions, particularly GEM S.r.l. and Medifill Limited, as these are key to H.B. Fuller's strategic shift. Evaluate future earnings reports for signs of revenue growth and margin improvement from these new segments to confirm the success of the company's capital allocation strategy.

Financial Highlights

revenue

$2.58B

net Income

$122.2M

eps

$2.21

gross Margin

31.0%

cash Position

$122.5M

revenue Growth

-2.5%

Revenue Breakdown

Key Numbers

• $892.0M — Net revenue for Q3 2025 (Decreased by 2.8% from $917.9M in Q3 2024)
• $67.2M — Net income attributable to H.B. Fuller for Q3 2025 (Increased by 21.3% from $55.4M in Q3 2024)
• $122.2M — Net income attributable to H.B. Fuller for nine months 2025 (Decreased by 11.2% from $137.6M in nine months 2024)
• $1.22 — Diluted EPS for Q3 2025 (Increased by 24.5% from $0.98 in Q3 2024)
• $2.21 — Diluted EPS for nine months 2025 (Decreased by 9.1% from $2.43 in nine months 2024)
• $162.1M — Cash used for purchased businesses (Significant investment in acquisitions for nine months 2025)
• $122.5M — Cash and cash equivalents as of August 30, 2025 (Decreased by $46.9M from November 30, 2024)
• $197.0M — Total purchase price for GEM S.r.l. and Medifill Limited (Strategic acquisitions in medical adhesives)

Key Players & Entities

• H.B. Fuller Company (company) — registrant
• ND Industries Asia, Inc. (company) — acquired entity
• GEM S.r.l. (company) — acquired entity
• Medifill Limited (company) — acquired entity
• HS Butyl Limited (company) — acquired entity
• New York Stock Exchange (regulator) — exchange where FUL is listed
• FASB (regulator) — Financial Accounting Standards Board
• SEC (regulator) — Securities and Exchange Commission
• Bloomberg (company) — publisher

FAQ

Risk Factors

• Foreign Currency Fluctuations [medium — market]: The company's international operations expose it to foreign currency exchange rate fluctuations. For the nine months ended August 30, 2025, foreign currency translation resulted in other comprehensive income of $139.6 million, a significant swing from a loss of $12.9 million in the prior year, indicating volatility in currency markets impacting reported comprehensive income.
• Interest Rate Sensitivity [medium — financial]: Changes in interest rates can affect the company's financial results. For the nine months ended August 30, 2025, interest rate swaps resulted in other comprehensive income losses of $6.9 million, compared to losses of $18.0 million in the prior year, showing a reduction in negative impact but still a factor.
• Acquisition Integration and Financing [high — financial]: The company has made significant acquisitions, including GEM S.r.l. and Medifill Limited for $197.0 million. These acquisitions require careful integration and financing, which can impact cash flow and financial performance. Cash used for business acquisitions was $162.1 million for the nine months ended August 30, 2025.
• Supply Chain and Cost Management [medium — operational]: Cost of sales was $606.9 million for the three months ended August 30, 2025, and $1.78 billion for the nine months. While gross profit increased to $285.1 million and $798.6 million respectively, effective management of input costs remains crucial.
• New Accounting Standards [low — regulatory]: The company is evaluating the impact of new accounting pronouncements, such as ASU No. 2024-03 and ASU No. 2023-09, which require additional disclosures on expenses and income taxes. These changes will affect reporting starting in fiscal years 2028 and 2026, respectively.

Industry Context

H.B. Fuller operates in the adhesives, sealants, and specialty chemicals market. The industry is characterized by diverse applications across construction, packaging, electronics, and transportation. Key trends include a growing demand for sustainable and high-performance solutions, and consolidation through strategic acquisitions to gain market share and expand into specialized, higher-margin segments like medical adhesives.

Regulatory Implications

The company must comply with various financial reporting regulations, including U.S. GAAP and SEC requirements. Upcoming changes in accounting standards for expense disaggregation and income tax disclosures will necessitate adjustments to reporting practices. Additionally, international operations expose the company to diverse regulatory environments.

What Investors Should Do

1. Monitor acquisition integration and performance.
2. Analyze margin trends and cost management.
3. Evaluate the impact of foreign currency fluctuations.
4. Assess the sustainability of quarterly net income improvement.

Key Dates

• 2025-08-30: End of third quarter and nine-month period — Reporting period for the financial results discussed in the 10-Q, showing revenue decline but improved quarterly net income and EPS.
• 2024-08-31: End of third quarter and nine-month period in prior year — Comparison period for the current year's financial performance, highlighting a decrease in revenue and net income for the nine-month period.
• 2024-11-30: Prior fiscal year end — Balance sheet comparison date, showing a decrease in cash and cash equivalents from $169.4 million to $122.5 million.

Glossary

Non-controlling interest

The portion of equity in a subsidiary that is not attributable to the parent company. It represents the ownership interest of minority shareholders. (The company reported net income attributable to H.B. Fuller after accounting for non-controlling interests, which had a minor negative impact ($73K for the quarter, $106K for the nine months).)

Other comprehensive income (loss)

Components of comprehensive income that are not reported in net income on the income statement. Includes items like foreign currency translation adjustments and pension plan adjustments. (Significant positive foreign currency translation adjustments ($139.6M for nine months) and net investment hedge losses ($53.5M for nine months) heavily influenced the company's comprehensive income.)

Diluted EPS

Earnings per share calculated using the weighted-average number of outstanding common shares plus all dilutive potential common shares, such as stock options and convertible securities. (Diluted EPS increased significantly to $1.22 for the quarter but decreased to $2.21 for the nine months, reflecting mixed performance over the longer term.)

Weighted-average common shares outstanding

The average number of common shares outstanding during a reporting period, adjusted for any stock splits or dividends. Used in EPS calculations. (Diluted weighted-average shares outstanding decreased from 56.65 million in Q3 2024 to 55.16 million in Q3 2025, contributing to the EPS increase.)

Year-Over-Year Comparison

Compared to the prior year's nine-month period, H.B. Fuller's net revenue decreased by 2.5% to $2.58 billion, and net income attributable to the company fell by 11.2% to $122.2 million. Diluted EPS also declined by 9.1% to $2.21. However, the most recent quarter (Q3 2025) showed a positive trend with net income increasing by 21.3% and diluted EPS by 24.5%, suggesting a potential turnaround in short-term performance despite the year-to-date decline. Cash and cash equivalents decreased by $46.9 million, largely due to significant investments in acquisitions.

Key Financial Figures

• $1.00 — ch registered Common Stock, par value $1.00 per share FUL New York Stock Exchan
• $28,922 — dback was 28,170 Euros or approximately $28,922 at the date of acquisition. See Note 12

Filing Documents

• ful20250703_10q.htm (10-Q) — 2144KB
• ex_836324.htm (EX-31.1) — 13KB
• ex_836325.htm (EX-31.2) — 13KB
• ex_836326.htm (EX-32.1) — 5KB
• ex_836327.htm (EX-32.2) — 5KB
• 0001437749-25-029858.txt ( ) — 9538KB
• ful-20250830.xsd (EX-101.SCH) — 63KB
• ful-20250830_cal.xml (EX-101.CAL) — 58KB
• ful-20250830_def.xml (EX-101.DEF) — 438KB
• ful-20250830_lab.xml (EX-101.LAB) — 371KB
• ful-20250830_pre.xml (EX-101.PRE) — 473KB
• ful20250703_10q_htm.xml (XML) — 2008KB

FINANCIAL STATEMENTS (Unaudited)

FINANCIAL STATEMENTS (Unaudited) 4 Consolidated Statements of Income for the three and nine months ended August 30, 2025 and August 31, 2024 4 Consolidated Statements of Comprehensive Income for the three and nine months ended August 30, 2025 and August 31, 2024 5 Consolidated Balance Sheets as of August 30, 2025 and November 30, 2024 6 Consolidated Statements of Total Equity for the three and nine months ended August 30, 2025 and August 31, 2024 7 Consolidated Statements of Cash Flows for the nine months ended August 30, 2025 and August 31, 2024 8

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 9 ITEM 2. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 25 ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 39 ITEM 4.

CONTROLS AND PROCEDURES

CONTROLS AND PROCEDURES 39

OTHER INFORMATION

PART II. OTHER INFORMATION 40 ITEM 1.

LEGAL PROCEEDINGS

LEGAL PROCEEDINGS 40 ITEM 1A.

RISK FACTORS

RISK FACTORS 40 ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS 41 ITEM 6. EXHIBITS 41

SIGNATURES

SIGNATURES 42 3 Table of Contents

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements H.B. FULLER COMPANY AND SUBSIDIARIES Consolidated Statements of Income (In thousands, except per share amounts) (Unaudited) Three Months Ended Nine Months Ended August 30, August 31, August 30, August 31, 2025 2024 2025 2024 Net revenue $ 892,043 $ 917,927 $ 2,578,801 $ 2,645,452 Cost of sales ( 606,929 ) ( 642,198 ) ( 1,780,228 ) ( 1,848,435 ) Gross profit 285,114 275,729 798,573 797,017 Selling, general and administrative expenses ( 174,974 ) ( 171,388 ) ( 541,942 ) ( 525,204 ) Other income, net 5,308 2,148 15,655 7,282 Interest expense ( 33,630 ) ( 35,288 ) ( 100,536 ) ( 99,504 ) Interest income 1,110 1,092 3,064 3,597 Income before income taxes and income from equity method investments 82,928 72,293 174,814 183,188 Income taxes ( 16,527 ) ( 18,264 ) ( 55,198 ) ( 48,496 ) Income from equity method investments 832 1,310 2,726 2,955 Net income including non-controlling interest 67,233 55,339 122,342 137,647 Net (income) loss attributable to non-controlling interest ( 73 ) 22 ( 106 ) ( 32 ) Net income attributable to H.B. Fuller $ 67,160 $ 55,361 $ 122,236 $ 137,615 Earnings per share attributable to H.B. Fuller common stockholders: Basic $ 1.23 $ 1.01 $ 2.24 $ 2.51 Diluted $ 1.22 $ 0.98 $ 2.21 $ 2.43 Weighted-average common shares outstanding: Basic 54,428 54,975 54,623 54,874 Diluted 55,162 56,650 55,381 56,620 See accompanying Notes to Unaudited Consolidated Financial Statements. 4 Table of Contents H.B. FULLER COMPANY AND SUBSIDIARIES Consolidated Statements of Comprehensive Income (In thousands) (Unaudited) Three Months Ended Nine Months Ended August 30, August 31, August 30, August 31, 2025 2024 2025 2024 Net income including non-controlling interest $ 67,233 $ 55,339 $ 122,342 $ 137,647 Other comprehensive income (loss) Foreign currency translation 36,962 33,355 139,626 ( 12,932 ) Defined benefit pension pla

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements (Amounts in thousands, except per share amounts) (Unaudited) Note 1: Basis of Presentation Overview The accompanying unaudited interim Consolidated Financial Statements of H.B. Fuller Company and Subsidiaries have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and the instructions to Form 10 -Q and Article 10 of Regulation S- X. Accordingly, they do not include all of the information necessary for a fair presentation of results of operations, comprehensive income, financial position and cash flows in conformity with U.S. generally accepted accounting principles. In our opinion, the unaudited interim Consolidated Financial Statements reflect all adjustments of a normal recurring nature considered necessary for the fair presentation of the results for the periods presented. Operating results for interim periods are not necessarily indicative of results that may be expected for the fiscal year as a whole. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses and related disclosures at the date of the financial statements and during the reporting period. Actual results could differ from these estimates. These unaudited interim Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and Notes thereto included in our Annual Report on Form 10 -K for the year ended November 30, 2024 as filed with the Securities and Exchange Commission. New Accounting Pronouncements In November 20 24, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2024 - 03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220 - 40 ): Disaggregation o f Income Statement Exp

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