H.B. Fuller Reports Q3 2023 Net Income of $37.6 Million, a 19% Decrease, Amidst $900.6 Million in Net Revenue

Gross Profit Grows

The company's gross profit for the third quarter showed significant improvement, amounting to $263.5 million, accounting for 29.3% of net revenue. This is compared to $249.2 million (26.5% of net revenue) in the same quarter of the previous year. This growth in gross profit suggests improved cost management and operational efficiency.

Operating Expenses and Income

Selling, general, and administrative expenses for the third quarter amounted to $172.2 million, which is 19.1% of net revenue, slightly higher than the 17.1% recorded in the same period last year.

H.B. Fuller reported other income of $1.6 million and interest expenses of $35.1 million, accounting for 0.2% and 3.9% of net revenue, respectively. Interest income amounted to $1.1 million (0.1% of net revenue), while the company's income before income taxes and income from equity method investments stood at $58.9 million (6.5% of net revenue).

Income and Earnings per Share

Income taxes for the quarter amounted to $22.2 million (2.5% of net revenue), while income from equity method investments was $0.9 million (0.1% of net revenue). The net income attributable to H.B. Fuller was $37.6 million, accounting for 4.2% of net revenue.

The basic income per common share attributable to H.B. Fuller was reported at $0.69, with diluted income per common share at $0.67. The weighted-average common shares outstanding for the quarter were 54.4 million on a basic basis and 56.0 million on a diluted basis.

Dividends Declared

H.B. Fuller declared dividends of $0.205 per common share for the third quarter of 2023, reflecting the company's commitment to returning value to its shareholders.

Nine Months Ended September 2, 2023

Taking a broader view, H.B. Fuller's financial performance for the nine months ending September 2, 2023, also presents key insights:

Steady Revenue Stream

The company's net revenue for the nine months ending September 2, 2023, amounted to $2.6 billion, maintaining a consistent revenue stream compared to the same period in 2022 when it recorded $2.8 billion.

Gross Profit Continues to Grow

H.B. Fuller's gross profit for the nine-month period reached $735.1 million, accounting for 28.2% of net revenue. This represents growth compared to the 25.6% of net revenue ($715.6 million) recorded in the same period last year.

Operating Expenses

Selling, general, and administrative expenses for the nine months totaled $493.3 million, accounting for 18.9% of net revenue. In contrast, the same expenses accounted for 17.3% of net revenue in the prior year.

Income and Earnings per Share

Income before income taxes and income from equity method investments for the nine months was reported at $147.9 million, representing 5.7% of net revenue. Income taxes amounted to $51.3 million (2.0% of net revenue), and income from equity method investments was $3.3 million (0.1% of net revenue). The net income attributable to H.B. Fuller for the nine-month period was $99.9 million, accounting for 3.8% of net revenue.

Basic income per common share attributable to H.B. Fuller was $1.84, while diluted income per common share was $1.79. The weighted-average common shares outstanding were 54.3 million on a basic basis and 55.9 million on a diluted basis.

Dividends Declared

H.B. Fuller declared dividends of $0.600 per common share for the nine months ending September 2, 2023.

H.B. Fuller's financial results for the third quarter of 2023 demonstrate resilience in maintaining its revenue stream despite challenging market conditions. While net income for the quarter decreased compared to the previous year, the company continues to focus on cost management and operational efficiency.

Investors and industry analysts will be closely monitoring how H.B. Fuller navigates the evolving economic landscape in the coming quarters and whether it can sustain its growth momentum.