H.B. Fuller Reports $788.7M Revenue in Q1 2025, Net Income Drops to $13.2M

H.B. Fuller Company reported a net revenue of $788.7 million for the first quarter of fiscal 2025, reflecting a decrease of 2.7% compared to $810.4 million in the same period last year. The decline was attributed to a 1.2% decrease from acquisitions and divestitures, alongside a 3.4% negative impact from foreign currency fluctuations, primarily due to a weaker Euro and other currencies against the U.S. dollar. Despite these challenges, organic revenue growth was positive at 1.9%, driven by a 4.2% increase in the Hygiene, Health and Consumable Adhesives segment and a 2.2% increase in Building Adhesive Solutions, although this was partially offset by a 1.9% decrease in Engineering Adhesives.

The company's net income attributable to H.B. Fuller was $13.2 million, a significant drop from $31.0 million in the prior year, resulting in diluted earnings per share of $0.24 compared to $0.55. The gross profit margin also decreased by 70 basis points to 28.8%, primarily due to higher raw material and manufacturing costs. Selling, general, and administrative (SG&A) expenses rose to $180.6 million, up from $172.4 million, reflecting increased costs associated with acquisitions and higher compensation expenses.

Strategically, H.B. Fuller has been active in expanding its portfolio through acquisitions. In the first quarter of 2025, the company completed the acquisition of ND Industries Asia, Inc. for approximately $8.2 million and GEM S.r.l. for about $147.9 million, both aimed at enhancing its capabilities in specialty adhesives and medical adhesive technologies. Additionally, the company divested its North American Flooring business, which resulted in a loss of $1.5 million recorded in other income. These moves are part of H.B. Fuller’s strategy to focus on higher-margin, high-growth market segments.

Operationally, the company reported a total cash and cash equivalents balance of $105.7 million as of March 1, 2025, down from $169.4 million at the end of the previous fiscal year. Total debt increased to $2.18 billion, reflecting ongoing investments and acquisitions. The company’s total debt to total capital ratio rose to 55.1%, compared to 50.8% at the end of November 2024. H.B. Fuller continues to expect that cash flows from operating activities will be sufficient to meet its liquidity and capital expenditure needs, despite the recent challenges in revenue and profitability.

Looking ahead, H.B. Fuller anticipates that the restructuring plans initiated in 2023 will incur costs of approximately $60 million to $65 million, aimed at optimizing operations and integrating acquired businesses. The company expects these plans to be completed by fiscal year 2026. Management remains focused on driving organic growth and enhancing operational efficiency while navigating the impacts of foreign currency fluctuations and rising costs.