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H.B. Fuller Company (NYSE:FUL), a global manufacturer of adhesives, sealants, and other specialty chemical products with a market capitalization of $2.95 billion, announced a significant reorganization of its business segments. The company, which according to InvestingPro analysis is currently trading near its 52-week low and appears undervalued, filed a Current Report on Form 8-K with the Securities and Exchange Commission to provide restated unaudited historical financial information for fiscal years 2023 and 2024 due to changes in its operating segments.
The St. Paul, Minnesota-based company disclosed that it had restructured its operating segments at the beginning of fiscal 2025, which started on March 1, 2025. This realignment follows the sale of its Flooring business and the consolidation of several segments into a new unit named Building Adhesive Solutions (BAS). The move aims to leverage growth opportunities in the global infrastructure market, which includes energy, utilities, and data centers, as well as to strengthen the company’s position in the architectural market. InvestingPro data shows the company maintains strong financial health with a comfortable current ratio of 1.81 and has impressively raised its dividend for 32 consecutive years.
H.B. Fuller’s restated financials reflect the segment changes as if they had been in effect since the beginning of the fiscal year ended December 2, 2023. The restatement includes minor adjustments to the revenues and operating income of the Hygiene, Health, and Consumable Adhesives segment due to changes in customer market allocations. The company emphasized that these adjustments have no impact on its previously reported consolidated financial statements in accordance with GAAP.
In addition to the GAAP financials, H.B. Fuller provided supplemental unaudited revised non-GAAP measures, including adjusted net income attributable to H.B. Fuller, adjusted EBITDA, and adjusted EBITDA margin. These measures have been adjusted to reflect the new operating segment structure and are intended to aid investors in assessing the company’s performance and comparability of results. The non-GAAP measures have been reconciled to the nearest GAAP measures in the provided tables, with no changes to the consolidated non-GAAP measures as a result of the segment change.
The company’s decision to realign its business segments is a strategic step towards optimizing its portfolio to better address the demands of the infrastructure and construction markets. This information is based on the company’s SEC filing and is intended to provide investors with clarity on H.B. Fuller’s historical financial performance in light of the recent organizational changes. With the company’s next earnings report scheduled for March 26, 2025, InvestingPro subscribers can access detailed analysis and additional insights through the comprehensive Pro Research Report, which is part of the platform’s coverage of over 1,400 US stocks.
In other recent news, H.B. Fuller reported its Q4 2024 earnings, which revealed an earnings per share (EPS) of $0.92, falling short of the forecasted $1.23. Revenue for the quarter was $923 million, missing the projected $945.32 million. The company’s performance was impacted by a challenging market environment despite strategic acquisitions and operational adjustments. In light of these results, Seaport Global Securities downgraded H.B. Fuller’s stock rating from "Buy" to "Neutral," citing concerns over increased tariffs and competitive pressures in certain segments. The downgrade reflects worries about potential suppression of demand and constraints on margin growth, particularly in the transportation, new energy, and construction markets. Additionally, the company’s Hygiene, Health, and Consumable Adhesives segment is reportedly facing competitive challenges, while the Engineering Adhesives segment shows promise due to strong customer relationships. H.B. Fuller has expressed confidence in its strategic plan and aims to achieve a long-term EBITDA margin of over 20%, despite acknowledging the need for adjustments in light of current market conditions.
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