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H.B. FULLER COMPANY REPORTS FOURTH QUARTER AND FULL-YEAR 1993 SALES AND EARNINGS

 ST. PAUL, Minn., Jan. 6 /PRNewswire/ -- H.B. Fuller Company (NASDAQ-NMS: FULL) today reported net sales of $247.8 million for the fourth quarter ended Nov. 30, 1993, an increase of 1 percent from $245.7 million for the same period in 1992. A previously announced restructuring charge had a $5.3 million negative impact on earnings for the fourth quarter, reducing them to $1.6 million, compared to $9.2 million in fourth quarter 1992. Net earnings per share for the fourth quarter were $.11, down from $.66 in fourth quarter 1992. Excluding the restructuring charge, earnings would have been $6.9 million and earnings per share would have been $.49 in fourth quarter 1993.
 The restructuring charge stems from the planned closing of certain facilities over the next two years and associated costs of consolidating their production into other facilities. This includes the closing or sale of a production plant in Brazil, Mexico and Nicaragua, two small specialty businesses in Central America and the consolidation of certain Central American paint operations. The planned restructuring of Linear Products Division operations in Finland and pending sale of a Foster Products Corporation product line also are included in the charge.
 Net sales for fiscal year 1993 were $975.3 million, up 3 percent from $942.4 million in fiscal 1992. Net earnings before cumulative effects of accounting changes were $21.7 million, down 39 percent from $35.6 million in 1992, and earnings per share before accounting changes were $1.55, down 39 percent from $2.55 per share in fiscal 1992. The reduction in earnings included the fourth quarter restructuring charge of $5.3 million or $.38 per share and a first quarter $3.4 million or $.15 per share retroactive Automotive sales adjustment.
 As previously announced, the company decided in the fourth quarter to adopt the provisions of FAS106 (Postretirement Benefits Other Than Pensions) and FAS109 (Accounting for Income Taxes) in 1993. This triggered an accounting charge of $11.7 million ($12.8 million expense for FAS106 and $1.1 million income for FAS109) or $.84 per share. As a result, net earnings were $10.0 million or $.71 per share for fiscal 1993.
 Sales by U.S. operations were up 9 percent for the fourth quarter and 6 percent for the year when compared to the same periods in 1992. U.S. operating earnings were up slightly in the fourth quarter and, for the year, approximated 1992 results, excluding the restructuring charge.
 Adhesives, Sealants and Coatings Division sales were up moderately for the quarter and the year compared to 1992. Cost containment, new product development and greater utilization of production facilities contributed to a moderate increase in operating earnings in the fourth quarter and a substantial improvement for the year, excluding the first quarter Automotive adjustment.
 The company's Specialty Divisions and Subsidiaries experienced a moderate sales increase in the fourth quarter and for the year, compared to 1992. Excluding the restructuring charge, operating earnings were down slightly in the fourth quarter and up slightly for the year as a result of operating expense controls.
 Sales by European operations were down 20 percent in the fourth quarter compared to that period in 1992. The strengthening U.S. dollar caused 14 percentage points of the decrease. For the year, European sales were down 9 percent compared to 1992, including 4 percentage points due to currency. The weak economy coupled with strong competitive pressures caused a decline in sales and a substantial decrease in operating earnings for the quarter and full year, compared to prior year.
 Sales by Latin American operations in fourth quarter 1993 approximated those of 1992 and were up moderately for the full year. Increased competition coming from the lifting of trade barriers throughout Latin America caused gross margins to decrease, while inflationary pressures brought about an increase in operating expenses. As a result, operating earnings decreased substantially when compared to the same period in 1992.
 Combined sales in all other geographic regions grew significantly in the fourth quarter and moderately for the year, compared to 1992. The sales gains were spurred by acquisitions in Canada and the Philippines and a weakening U.S. dollar in comparison to the Japanese yen. Combined operating earnings in these regions declined substantially during the quarter and for the year, compared to 1992. The cost of continued deliberate business development investments in these regions, the expense of assimilating the acquisitions and the weak economies in Canada and Japan contributed to the decline.
 Other income decreased from $1.2 million income in fourth quarter 1992 to $.3 million expense in 1993, primarily as a result of nonrecurring gains in 1992 and increased foreign currency losses in 1993.
 The company's effective tax rate increased to 79.3 percent in fourth quarter 1993 compared to 40.7 percent a year ago, reflecting the impact of the fourth quarter 1993 restructuring charges on which little tax benefit is anticipated. Without the restructuring charges, the company's 1993 effective tax rate would have been 42.5 percent, up due largely to the U.S. federal tax rate increase and losses in South America.
 "Fiscal 1993 was a challenging year for us. We faced a number of negative external economic factors that had a direct impact on our results," said Walter Kissling, president and chief operating officer. "We took steps during the year that will help us improve our results in 1994 and beyond. The restructuring of our Latin American operations, the realigning of our sales organization in Europe, the closing of a production facility in Munich and the appointment of new managers to key positions are examples of some of the steps that will help move us toward our goal of improving our profitability as a global company."
 H.B. Fuller is a worldwide manufacturer and marketer of adhesives, sealants, coatings, paints, and other specialty chemical products.
 H.B. FULLER COMPANY
 FINANCIAL INFORMATION
 Dollars in thousands, except per share amounts
 (Unaudited)
 Year Ended
 11/30/93 11/30/92
 Net sales $975,287 $942,438
 Cost of sales (658,046) (624,799)
 Gross profit 317,241 317,639
 Selling, administrative and other expenses (257,770) (246,233)
 Restructuring (6,001) --
 Operating earnings 53,470 71,406
 Interest expense (10,459) (12,537)
 Other (expense)/income, net (2,158) 2,078
 Earnings before income taxes
 and minority interests 40,853 60,947
 Income taxes (19,191) (24,716)
 Net earnings of consolidated subsidiaries
 applicable to minority interests 39 (609)
 Earnings before cumulative effects of
 accounting changes 21,701 35,622
 Cumulative effects of accounting changes (11,717) --
 Net earnings $9,984 $35,622
 Earnings per common share before cumulative
 effects of accounting changes $1.55 $2.55
 Accounting changes (.84) --
 Earnings per common share $.71 $2.55
 Dividends per common share $.54 $.46
 Average number of common and common
 equivalent shares outstanding 14,017,951 13,989,443
 Three months ended
 11/30/93 11/30/92
 Net sales $247,756 $245,692
 Cost of sales (167,533) (163,738)
 Gross profit 80,223 81,954
 Selling, administrative and other expenses (65,510) (64,633)
 Restructuring (6,001) --
 Operating earnings 8,712 17,321
 Interest expense (2,625) (2,867)
 Other (expense)/income, net (335) 1,191
 Earnings before income taxes
 and minority interests 5,752 15,645
 Income taxes (4,561) (6,369)
 Net earnings of consolidated subsidiaries
 applicable to minority interests 385 (78)
 Net earnings $1,576 $9,198
 Earnings per common share $.11 $.66
 Dividends per common share $.14 $.12
 Average number of common and common
 equivalent shares outstanding 14,014,407 14,002,245
 11/30/93 11/30/92
 Working capital $119,778 $130,817
 Total assets $566,276 $561,204
 Long-term debt $60,261 $53,457
 Stockholders' equity $249,396 $255,040
 -0- 1/6/94
 /CONTACT: Richard Edwards, investor relations, 612-647-3650; or Bill Belknap, media relations, 612-647-3604, both of H.B. Fuller/
 (FULL)


CO: H.B. Fuller Company ST: Minnesota IN: CHM SU: ERN

CP-PB -- MN015 -- 9942 01/06/94 17:54 EST
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Date:Jan 6, 1994
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