H.B. Fuller Company reported on 27 September 2006 operating results for the third quarter ended 2 September 2006.
Net revenue for the third quarter of 2006 was USD 388.9 million, an increase of 8.6% …
H.B. Fuller Company reported on 27 September 2006 operating results for the third quarter ended 2 September 2006. Net revenue for the third quarter of 2006 was USD 388.9 million, an increase of 8.6% compared to the third quarter of 2005. The net impact of acquisitions and divestitures and favourable foreign currency translation contributed 8.4 and 1.4 percentage points to net revenue growth, respectively. On a comparable basis, adjusting for these factors, net revenue was down 1.2% year-over-year. Selling prices increased 5.8% and volume declined 7% year-over-year, consistent with the company“s ongoing strategy to reposition its product portfolio. Third-quarter net income was USD 24.2 million or USD 0.40 per share compared to USD 15.5 million or USD 0.26 per share in the same period of 2005, an increase of more than 50% year-over-year. A more profitable mix of business, resulting from the ongoing repositioning efforts combined with continued process improvements and productivity gains, drove the increase. Fourth-quarter net income benefited from a favourable adjustment to the effective tax rate, from a previously expected level of 30% to 24.6%. The adjustment was the result of both an improvement in the geographic mix of earnings and a favourable tax settlement (USD 0.9 million after-tax). “The pursuit of our strategy to reposition the company continues to drive strong financial performance in all regions and within both operating segments”, said Al Stroucken, chairman and CEO. “We are shifting the paradigm, transforming the business into a more profitable speciality chemical company.” For the first nine months of fiscal year 2006, net revenue was USD 1.126 billion, up 2.4% compared to the first nine months of last year. The net impact of acquisitions and divestitures contributed 2.9 percentage points to net revenue growth while an unfavourable impact from foreign currency translation reduced net revenue growth by 0.6 percentage points. On a comparable basis, adjusting for these factors, net revenue increased 0.1% year-over-year. Net income was USD 59.0 million or USD 0.99 per diluted share for the first nine months of this year compared to USD 38.3 million or USD 0.66 per diluted share for same period last year, an increase in net income of over 50% year-over-year. With respect to its strong financial performance in the third quarter and the confidence the company has in its strategy, H.B. Fuller now anticipates diluted earnings per share for fiscal year 2006 to be between USD 1.44 and USD 1.46 on a reported basis. This equals to between USD 0.45 and USD 0.47 per share for the fourth quarter. Given the improvement in the geographic mix of earnings, the company“s effective tax rate for the fourth quarter is expected to be 29%. Furthermore, due to the level of spending year-to-date, the company now anticipates fiscal year 2006 capital expenditures to be between USD 20 and USD 25 million.