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H.B. FULLER COMPANY REPORTS SECOND QUARTER SALES AND EARNINGS

 ST. PAUL, Minn., June 22 /PRNewswire/ -- H.B. Fuller Company (NASDAQ-NMS: FULL) today reported second quarter net sales of $247.3 million for the quarter ended May 31, 1993, an increase of 4 percent from $236.9 million for the same period in 1992. Net earnings for the quarter were $8.9 million, down 13 percent from $10.1 million in 1992. Earnings per share decreased 13 percent to $.63, compared to last year's $.73 per share. European Operations continued to negatively impact the company's results in the second quarter with lower sales and operating earnings.
 For the first six months of 1993 net sales were $475.3 million, up 4 percent from $457.7 million in the first half of 1992. Year-to-date earnings totalled $11.8 million, down 27 percent from $16.2 million in the first half of 1992. Earnings per share were $.84, a decrease of 27 percent from $1.16 for the first half of 1992. The year-to-date results include the one time automotive sales adjustment of $3.4 million before tax or 15 cents per share taken in the first quarter.
 U.S. sales were up 9 percent for the quarter when compared to the same period last year. Total U.S. operations showed a slight improvement in operating earnings with a reduction of operating expenses as a percent of sales and reduced gross margins.
 Adhesive, Sealants and Coatings Division sales were up 9 percent for the quarter compared to 1992 levels. In the Structural Group, sales to the window market increased substantially while automotive sales had a significant increase over the previous year. In the Industrial Group, a strong increase in sales was experienced in the tobacco and polymer markets, and a substantial increase in the nonwoven market. The paper converting and packaging markets showed a moderate increase over the last year.
 Specialty Divisions and Subsidiaries in total also produced a 9 percent increase in sales for the quarter, led by the Industrial Coatings Division's substantial increase.
 The company's European operations experienced an 8 percent decrease in sales for the second quarter compared to 1992, with the depressed European economy continuing to negatively affect results. Excluding a negative currency impact, sales in Europe would have been down approximately 5 percent for the quarter. Operating earnings were down substantially. Although gross profits as a percent of sales were up slightly, the effect of reduced sales outweighed the gross margin improvement.
 Latin American operations had a 15 percent increase in sales, but experienced flat operating earnings for the quarter due to lower gross margins and higher operating expenses. Gross margins are down mainly in South America and operating expenses have been increasing faster than sales in most Latin American divisions. However, the company's paint operations in Central America had a moderate increase in sales and significant improvement in operating earnings.
 Other income/expense decreased from $.1 million income in the second quarter of 1992 to $.9 million expense in 1993. This was primarily the result of increased foreign currency losses in Latin America, primarily Brazil.
 The Asia/Pacific area had sales which approximated the prior year and a substantial decrease in operating earnings for the second quarter compared to 1992. The slowdown in Japan and our investment into new operations in the area adversely affected operating earnings in Asia Pacific. Canada showed a slight increase in sales during the quarter excluding the acquisition. With the addition of the Timminco acquisition, sales were strong over the prior year.
 Walter Kissling, president and chief operating officer, commented, "Explaining operating earnings reductions in a global company is complicated and ours reflects the economies around the world that are in various degrees of


slow growth or recession. Volume reduction in our international operations is a major factor in the decline. Year-end earnings for 1993 will be lower than in 1992." Kissling went on to say, "We are taking steps towards improvement by restricting hiring, putting emphasis on volume purchasing, monitoring our production strategy and intensifying sales and marketing -- all in all, critically reviewing the basics of our business. The company is taking the steps to prepare for future growth as global economics improve."
 H.B. Fuller Company is a worldwide manufacturer and marketer of adhesives, sealants, coatings, paints, and other specialty chemical products with Fiscal 1992 sales of $934 million.
 H.B. FULLER COMPANY
 FINANCIAL INFORMATION
 Dollars in thousands, except per share amounts (unaudited)
 Six Months Ended
 5/31/93 5/31/92
 Net sales $475,329 $457,737 (a)
 Cost of sales (320,756) (303,588) (a)
 Gross profit 154,573 154,149
 Selling, administrative
 and other expenses (127,521) (120,228) (a)
 Operating earnings 27,052 33,921
 Interest expense (5,217) (6,730)
 Other (expense) income, net (1,399) 351
 Earnings before income taxes
 and minority interests 20,436 27,542
 Income taxes (8,257) (10,929)
 Net earnings of consolidated
 subsidiaries applicable to
 minority interests (357) (448)
 Net earnings $11,822 $16,165
 Earnings per common share $.84 $1.16
 Dividends per common share $.26 $.22
 Average number of common and common
 equivalent shares outstanding 14,013,816 13,972,769
 Three Months Ended
 5/31/93 5/31/92
 Net sales $247,275 $236,899 (a)
 Cost of sales (163,778) (155,793) (a)
 Gross profit 83,497 81,106
 Selling, administrative
 and other expenses (64,976) (60,926) (a)
 Operating earnings 18,521 20,180
 Interest expense (2,540) (3,246)
 Other (expense) income, net (853) 81
 Earnings before income taxes
 and minority interests 15,128 17,015
 Income taxes (6,145) (6,698)
 Net earnings of consolidated
 subsidiaries applicable to
 minority interests (110) (173)
 Net earnings $8,873 $10,144
 Earnings per common share $.63 $.73
 Dividends per common share $.14 $.12
 Average number of common and common
 equivalent shares outstanding 14,021,317 13,985,762
 5/31/93 5/31/92
 Working capital $127,269 $121,991
 Total assets 556,811 523,329
 Long-term debt 62,683 58,721
 Stockholders' equity $256,938 $233,555
 (a) Certain accounts reported by the company's European Operations have been reclassified to conform to company policy.
 -0- 6/22/93
 /CONTACT: Richard Edwards, investor relations, 612-647-3650, or Bill Belknap, media relations, 612-647-3604, both of H.B. Fuller/


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

DB -- MN012 -- 4742 06/22/93 17:41 EDT
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Publication:PR Newswire
Date:Jun 22, 1993
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