v3.26.1
Note 14 - Segments
3 Months Ended
Feb. 28, 2026
Notes to Financial Statements  
Segment Reporting Disclosure [Text Block]

Note 14: Segments

 

Our three reportable operating segments consist of Hygiene, Health and Consumable Adhesives, Engineering Adhesives and Building Adhesive Solutions. We are required to report segment information in the same way that we internally organize our business for assessing performance and making decisions regarding allocation of resources. Revenue and Adjusted EBITDA of each of our segments are regularly reviewed by our chief executive officer, who acts as our chief operating decision maker, to make decisions about resources to be allocated to the segments and assess their performance. Adjusted EBITDA is defined as net income before interest, income taxes, depreciation and amortization and foreign currency gain/loss, adjusted for other items within a relevant period which are not reflective of the segment’s operating performance in the period. Corporate expenses, other than those included in Corporate Unallocated, are allocated to each operating segment. Consistent with our internal management reporting, Corporate Unallocated includes and Adjusted EBITDA excludes amounts related to business acquisition and integration costs, organizational restructuring charges and project costs associated with our implementation of a global Enterprise Resource Planning ("ERP") system that we refer to as Project ONE. Corporate assets are not allocated to the operating segments. Inter-segment revenues are recorded at cost plus a markup for administrative costs. See below for a reconciliation of Adjusted EBITDA to net income attributable H.B. Fuller as reflected in the audited consolidated statement of income.

 

The business components within each operating segment are managed to maximize the results of the overall operating segment rather than the results of any individual business component of the operating segment. Results of individual components of each operating segment are subject to numerous allocations of segment-wide costs that may or may not have been focused on that particular component for a particular reporting period. The costs for these allocated resources are not tracked on a “where-used” basis as financial performance is assessed at the total operating segment level.

 

Reportable operating segment financial information is as follows: 

 

   

Hygiene, Health

           

Building

                         

Three Months Ended:

 

and Consumable

   

Engineering

   

Adhesive

           

Corporate

   

H.B. Fuller

 

February 28, 2026

 

Adhesives

   

Adhesives

   

Solutions

   

Total

   

Unallocated

   

Consolidated

 

Net revenue

  $ 346,527     $ 242,448     $ 181,869     $ 770,844     $ -     $ 770,844  

Segment expenses and other items 1

    298,490       194,289       160,260       653,039       (899 )     652,140  

Adjusted EBITDA

  $ 48,037     $ 48,159     $ 21,609     $ 117,805     $ 899     $ 118,704  

Depreciation and amortization

  $ 16,553     $ 15,922     $ 13,548     $ 46,023     $ 342     $ 46,365  

Capital Expenditures

    9,905       6,608       8,233       24,746       32,955       57,701  

 

   

Hygiene, Health

           

Building

                         

Three Months Ended:

 

and Consumable

   

Engineering

   

Adhesive

           

Corporate

   

H.B. Fuller

 

March 1, 2025

 

Adhesives

   

Adhesives

   

Solutions

   

Total

   

Unallocated

   

Consolidated

 

Net revenue

  $ 368,225     $ 236,758     $ 183,680     $ 788,663     $ -     $ 788,663  

Segment expenses and other items 1

    321,334       192,570       161,877       675,781       (1,474 )     674,307  

Adjusted EBITDA

  $ 46,891     $ 44,188     $ 21,803     $ 112,882     $ 1,474     $ 114,356  

Depreciation and amortization

  $ 14,731     $ 15,165     $ 12,671     $ 42,567     $ 30     $ 42,597  

Capital Expenditures

    2,286       6,999       6,438       15,723       17,261       32,984  

 

1 Segment expenses and other items for all segments primarily include raw material costs, compensation and benefits, delivery expense, rent and lease expense, professional services, travel and entertainment, repairs and maintenance and other manufacturing overhead.

 

Reconciliation of Net income attributable to H.B. Fuller to Adjusted EBITDA:

 

   

Three Months Ended

 
   

February 28,

   

March 1,

 
   

2026

   

2025

 

Net income attributable to H.B. Fuller

  $ 21,045     $ 13,248  
                 

Adjustments:

               

Acquisition project costs

    931       9,828  

Organizational realignment

    10,022       8,774  

Project One

    3,053       3,064  

Other

    (95 )     -  

Discrete tax items

    98       992  

Income tax effect on adjustments

    (3,539 )     (5,909 )

Adjusted net income attributable to H.B. Fuller

    31,515       29,997  
                 

Add:

               

Interest expense1

    32,373       32,030  

Interest income

    (2,069 )     (1,100 )

Adjusted Income taxes

    10,862       10,862  

Depreciation and Amortization expense2

    46,023       42,567  

Adjusted EBITDA

    118,704       114,356  

 

 

1 Interest expense added back for EBITDA is adjusted for amounts already included in adjusted net income attributable to H.B. Fuller.

2 Depreciation and amortization expense added back for EBITDA is adjusted for amounts already included in adjusted net income attributable to H.B. Fuller.

 

We view the following disaggregation of net revenue by geographic region as useful to understanding the composition of revenue recognized during the respective reporting periods:

 

   

Three Months Ended February 28, 2026

 
                                 
   

Hygiene, Health

           

Building

         
   

and Consumable

   

Engineering

   

Adhesive

         
   

Adhesives

   

Adhesives

   

Solutions

   

Total

 

Americas

  $ 189,143     $ 105,159     $ 93,698     $ 388,000  

EIMEA

    104,354       54,392       74,193       232,939  

Asia Pacific

    53,030       82,897       13,978       149,905  

Total

  $ 346,527     $ 242,448     $ 181,869     $ 770,844  

  

   

Three Months Ended March 1, 2025

 
                                 
   

Hygiene, Health

           

Building

         
   

and Consumable

   

Engineering

   

Adhesive

         
   

Adhesives

   

Adhesives

   

Solutions

   

Total

 

Americas

  $ 207,354     $ 97,209     $ 95,700     $ 400,263  

EIMEA

    110,767       50,262       75,163       236,192  

Asia Pacific

    50,104       89,287       12,817       152,208  

Total

  $ 368,225     $ 236,758     $ 183,680     $ 788,663