ST. PAUL, MN - H.B. Fuller Co. has reported financial results for the fourth quarter and fiscal year that ended Nov. 27, 2010.
Net income for the fourth quarter of 2010 was $21.9 million, or $0.44 per diluted share, versus $24.6 million, or $0.50 per diluted share, in last year's fourth quarter. Two previously announced events negatively impacted net income in the quarter. The pre-tax impact of the September fire at the company's Mindelo, Portugal, facility was $0.9 million, and the pre-tax costs associated with the departure of the company's CEO were $2.5 million, or taken together, $0.05 per diluted share.
Net revenue for the fourth quarter of 2010 was $360.2 million, up 5.5 percent versus the fourth quarter of 2009. Higher average selling prices, higher volume and acquisitions positively impacted net revenue growth by 4.8, 0.8 and 1.5 percentage points, respectively. Foreign currency translation reduced net revenue growth by 1.6 percentage points. Organic sales grew by 5.6 percent year-over-year. Gross profit margin was down 290 basis points versus the fourth quarter of 2009, primarily due to the cumulative effect of escalating raw material costs over the past year. Selling, General, and Administrative expense was slightly higher on an absolute basis, but was down nearly 100 basis points as a percentage of net revenue.
On a sequential basis, net revenue increased over six percent relative to the third quarter. Gross profit margin was essentially flat quarter-to-quarter. However, the fire at the company's Mindelo, Portugal, facility caused one-time additional costs, which reduced gross profit margin by 25 basis points. Selling, General and Administrative expense declined by over $1 million in the fourth quarter and by 160 basis points relative to net revenue.
On an adjusted (comparable) basis, diluted earnings per share increased nine percent in 2010 relative to the prior year. Net income for fiscal year 2010 was $70.9 million, or $1.43 per diluted share, versus $83.7 million, or $1.70 per diluted share, in 2009. This year's net income included charges related to the exit of the polysulfide-based insulating glass product line in Europe. The combined non-recurring charges reduced net income by $8.4 million, or $0.17 per diluted share. Excluding these items, net income for the full year would have been $79.3 million or $1.60 per diluted share versus the reported results of $1.43 per diluted share. In addition, last year's net income included a net gain primarily related to the settlement of a lawsuit against the former owners of the Roanoke Companies Group. Excluding this net gain, fiscal year 2009 net income was $72.4 million, or $1.47 per diluted share.
Net revenue for fiscal year 2010 was $1.356 billion, up 9.8 percent versus fiscal-year 2009. Higher volume, higher average selling prices, favorable foreign currency translation and acquisitions positively impacted net revenue growth by 7.4, 1.2, 0.1 and 1.1 percentage points, respectively. Consequently, organic sales improved by 8.6 percent year-over-year in 2010.
"Our focus in 2011 will be on accelerating the execution of our current business strategy and leveraging key investments made over the last two years," said Jim Owens, H.B. Fuller President and Chief Executive Officer. "The growth momentum that started in 2010 should carry over to 2011. In addition, past and current pricing actions should enhance our margins. Raw material costs are expected to increase modestly in the first half of the year compared to the fourth-quarter 2010 levels. Overall, we forecast that our net revenue will increase by 8 to 10 percent, and our net income will be between $1.75 and $1.85 per diluted share in 2011."
H.B. Fuller Reports 2010 Results
January 30, 2011