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Item 1. Financial Statements

2024-03-28 compared with 2023-09-28 · 396 added, 713 removed, 346 unchanged (76% of the section changed)

4 unchanged sentences

Three Months Ended

Nine Months Ended

$ 810,419 $ 809,183

Cost of sales

( 571,182 ) ( 594,374 )

239,237 214,809

Selling, general and administrative expenses

( 172,362 ) ( 154,542 )

Other income, net

Interest expense

( 31,901 ) ( 33,069 )

Interest income

Income before income taxes and income from equity method investments

37,782 30,469

( 7,814 ) ( 9,733 )

Income from equity method investments

Net income including non-controlling interest

31,012 21,916

Net income attributable to non-controlling interest

( 21 ) ( 27 )

Net income attributable to H.B.

$ 30,991 $ 21,889

Earnings per share attributable to H.B.

Fuller common stockholders:

$ 0.57 $ 0.40

$ 0.55 $ 0.39

Weighted-average common shares outstanding:

54,702 54,174

56,573 55,919

Dividends declared per common share

$ 0.205 $ 0.190

See accompanying Notes to Unaudited Consolidated Financial Statements.

3 unchanged sentences

Three Months Ended

Nine Months Ended

Net income including non-controlling interest

Other comprehensive income (loss)

$ 31,012 $ 21,916

Other comprehensive (loss) income

Foreign currency translation

( 19,362 ) ( 3,636 )

Defined benefit pension plans adjustment, net of tax

Interest rate swaps, net of tax

Cross-currency swaps, net of tax

( 2,465 ) 8,335

Net investment hedges, net of tax

Other comprehensive income (loss)

Comprehensive income (loss)

Comprehensive income (loss) attributable to non-controlling interest

Comprehensive income (loss) attributable to H.B.

3,790 ( 299 )

Other comprehensive (loss) income

( 15,918 ) 5,251

Comprehensive income

15,094 27,167

Comprehensive income attributable to non-controlling interest

Comprehensive income attributable to H.B.

$ 15,082 $ 27,130

See accompanying Notes to Unaudited Consolidated Financial Statements.

4 unchanged sentences

Cash and cash equivalents

$ 94,934  

$ 79,910  

Trade receivables (net of allowances of $ 12,458 and $ 10,939 , as of September 2, 2023 and December 3, 2022, respectively)

576,060  

607,365  

472,641  

491,781  

$ 165,249 $ 179,453

Trade receivables (net of allowances of $ 11,658 and $ 11,080 , as of March 2, 2024 and December 2, 2023, respectively)

525,689 577,932

490,179 442,040

Other current assets

97,756  

120,319  

115,731 112,678

Total current assets

1,241,391  

1,299,375  

1,296,848 1,312,103

Property, plant and equipment

1,709,191  

1,579,738  

1,772,088 1,755,035

Accumulated depreciation

( 907,895 )  

( 949,189 ) ( 930,380 )

Property, plant and equipment, net

801,296  

733,667  

1,490,535  

1,392,627  

822,899 824,655

1,486,784 1,486,512

Other intangibles, net

746,521  

702,092  

380,165  

335,868  

$ 4,659,908  

$ 4,463,629  

702,307 729,140

373,135 371,165

$ 4,681,973 $ 4,723,575

Liabilities, non-controlling interest and total equity

1 unchanged sentence

Notes payable

$ 12,553  

$ 28,860  

$ 1,544 $ 1,841

Trade payables

394,914  

460,669  

460,649 439,700

Accrued compensation

75,035  

108,328  

63,116 95,680

Income taxes payable

33,007  

18,530  

49,516 47,688

Other accrued expenses

102,837  

89,345  

78,352 107,902

Total current liabilities

618,346  

705,732  

653,177 692,811

Long-term debt

1,872,468  

1,736,256  

1,829,253 1,836,590

Accrued pension liabilities

54,661  

52,561  

50,529 50,189

Other liabilities

387,307  

358,286  

380,769 388,072

Total liabilities

$ 2,932,782  

$ 2,852,835  

$ 2,913,728 $ 2,967,662

Commitments and contingencies (Note 12)

Fuller stockholders' equity:

Preferred stock ( no shares outstanding) shares authorized –

Common stock, par value $ 1.00 per share, shares authorized –

160,000,000 , shares outstanding –

54,016,374 and 53,676,576 as of September 2, 2023 and December 3, 2022, respectively

$ 54,016  

$ 53,677  

Preferred stock ( no shares outstanding) shares authorized – 10,045,900

Common stock, par value $ 1.00 per share, shares authorized – 160,000,000 , shares outstanding – 54,437,953 and 54,092,987 as of March 2, 2024 and December 2, 2023, respectively

$ 54,438 $ 54,093

Additional paid-in capital

294,035  

266,491  

309,624 301,485

Retained earnings

1,808,687  

1,741,359  

1,862,252 1,842,507

Accumulated other comprehensive loss

( 430,295 )  

( 458,789 ) ( 442,880 )

Fuller stockholders' equity

1,726,443  

1,610,170  

1,767,525 1,755,205

Non-controlling interest

1,727,126  

1,610,794  

1,768,245 1,755,913

Total liabilities, non-controlling interest and total equity

$ 4,659,908  

$ 4,463,629  

 See accompanying Notes to Unaudited Consolidated Financial Statements.

$ 4,681,973 $ 4,723,575

See accompanying Notes to Unaudited Consolidated Financial Statements.

FULLER COMPANY AND SUBSIDIARIES

6 unchanged sentences

Balance at December 2, 2023

$ 54,093 $ 301,485 $ 1,842,507 $ ( 442,880 ) $ 708 $ 1,755,913

Comprehensive income

- - 30,991 ( 15,909 ) 12 15,094

- - ( 11,246 ) - - ( 11,246 )

Stock option exercises

200 8,777 - - - 8,977

Share-based compensation plans and other, net

225 5,490 - - - 5,715

Repurchases of common stock

( 80 ) ( 6,128 ) - - - ( 6,208 )

Balance at March 2, 2024

Comprehensive income

Stock option exercises

Share-based compensation plans and other, net

Repurchases of common stock

Balance at June 3, 2023

Comprehensive income (loss)

Stock option exercises

Share-based compensation plans and other, net

Repurchases of common stock

Balance at September 2, 2023

$ 54,438 $ 309,624 $ 1,862,252 $ ( 458,789 ) $ 720 $ 1,768,245

Fuller Company Shareholders

2 unchanged sentences

Income (Loss)

Balance at November 27, 2021

Balance at December 3, 2022

$ 53,677 $ 266,491 $ 1,741,359 $ ( 451,357 ) $ 624 $ 1,610,794

Comprehensive income

- - 21,889 5,241 37 27,167

- - ( 10,305 ) - - ( 10,305 )

Stock option exercises

76 3,520 - - - 3,596

Share-based compensation plans and other, net

Repurchases of common stock

Balance at February 26, 2022

Comprehensive income (loss)

Stock option exercises

Share-based compensation plans other, net

Repurchases of common stock

Balance at May 28, 2022

Comprehensive income

Stock option exercises

Share-based compensation plans other, net

102 5,221 - - - 5,323

Repurchases of common stock

Balance at August 27, 2022

See accompanying Notes to Unaudited Consolidated Financial Statements. 

( 36 ) ( 2,412 ) - - - ( 2,448 )

Balance at March 4, 2023

$ 53,819 $ 272,820 $ 1,752,943 $ ( 446,116 ) $ 661 $ 1,634,127

See accompanying Notes to Unaudited Consolidated Financial Statements.

FULLER COMPANY AND SUBSIDIARIES

1 unchanged sentence

(In thousands)

Nine Months Ended

September 2, 2023

August 27, 2022

Three Months Ended

March 2, 2024

March 4, 2023

Cash flows from operating activities:

Net income including non-controlling interest

$ 31,012 $ 21,916

Adjustments to reconcile net income including non-controlling interest to net cash provided by operating activities:

23,168 19,248

20,355 18,683

Deferred income taxes

( 5,658 ) ( 5,746 )

Income from equity method investments, net of dividends received

( 1,044 ) ( 1,180 )

Debt issuance costs write-off

3 unchanged sentences

Pension and other post-retirement benefit plan activity

( 2,126 ) ( 3,476 )

Change in assets and liabilities, net of effects of acquisitions:

Trade receivables, net

56,886 55,407

( 50,189 ) ( 33,800 )

( 9,064 ) ( 28,947 )

Trade payables

Accrued compensation

( 31,862 ) ( 57,000 )

Other accrued expenses

( 12,040 ) ( 6,414 )

Income taxes payable

( 5,121 ) ( 2,235 )

Other liabilities

( 399 ) ( 3,085 )

Net cash provided by operating activities

1 unchanged sentence

Purchased property, plant and equipment

( 43,293 ) ( 47,604 )

Purchased businesses, net of cash acquired

Proceeds from sale of property, plant and equipment

Cash received from government grant

Net cash used in investing activities

( 42,725 ) ( 63,716 )

Cash flows from financing activities:

Proceeds from issuance of long-term debt

195,000 1,300,000

Repayment of long-term debt

( 203,250 ) ( 1,176,650 )

Payment of debt issuance costs

Net payment of notes payable

( 276 ) ( 881 )

Dividends paid

Contingent consideration payment

( 11,151 ) ( 10,222 )

Proceeds from stock options exercised

Repurchases of common stock

Net cash provided by financing activities

( 6,208 ) ( 2,448 )

Net cash (used in) provided by financing activities

( 16,908 ) 103,180

Effect of exchange rate changes on cash and cash equivalents

( 1,922 ) 563

Net change in cash and cash equivalents

( 14,204 ) 45,572

Cash and cash equivalents at beginning of period

179,453 79,910

Cash and cash equivalents at end of period

$ 165,249 $ 125,482

See accompanying Notes to Unaudited Consolidated Financial Statements.

6 unchanged sentences

generally accepted accounting principles for interim financial information and the instructions to Form 10 -Q and Article 10 of Regulation S- X.

Accordingly, they do not include all of the information necessary for a fair presentation of results of operations, comprehensive income, financial position and cash flows in conformity with U.S.

Accordingly, they do not include all of the information necessary for a fair presentation of results of operations, comprehensive income, financial position and cash flows in conformity with U.S.

generally accepted accounting principles.

4 unchanged sentences

Actual results could differ from these estimates.

These unaudited interim Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and Notes thereto included in our Annual Report on Form 10 -K for the year ended 

December 3, 2022 as filed with the Securities and Exchange Commission.

New Accounting Pronouncements

In September 2022, the Financial Accounting Standards Board (“FASB”) issued ASU 

In December 2023, the Financial Accounting Standards Board (“FASB”) issued ASU No.

2023 - 09, Income Taxes (Topic 740 ) - Improvements to Income Tax Disclosures .

This ASU provides new disclosure requirements including presentation of prescribed line items in the effective tax rate reconciliation and disclosures regarding state and local tax payments.

Our effective date for adoption of this ASU is our fiscal year ending November 28, 2026.

We are evaluating the impact the new disclosure guidance will have on our Consolidated Finance Statements.

In November 2023, the FASB issued ASU No.

2023 - 07, Segment Reporting (Topic 280 ) - Improvements to Reportable Segment Disclosures .

This ASU extends the existing requirements for annual disclosures to quarterly periods, and requires that both annual and quarterly disclosures present segment expenses using line items consistent with information regularly provided to the chief operating decision maker.

Our effective date for adoption of this ASU is our fiscal year ending November 29, 2025.

We are evaluating the impact the new disclosure guidance will have on our Consolidated Finance Statements.

Supplier Finance Program

In September 2022, the FASB issued ASU No.

2022 - 04, Liabilities - Supplier Finance Programs (Subtopic 405 - 50 ):

1 unchanged sentence

This ASU requires that a buyer in a supplier finance program disclose sufficient information about the program to allow a user of the financial statements to understand the program's nature, activity during the period, changes from period to period, and potential magnitude.

To achieve that objective, the buyer should disclose qualitative and quantitative information about its supplier finance programs. 

Our effective date of this ASU is our fiscal year ending December 1, 2024.

We are evaluating the effect that this guidance will have on our Consolidated Financial Statements. 

To achieve that objective, the buyer should disclose qualitative and quantitative information about its supplier finance programs.

ASU 2022 - 04 is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, except for the requirement on rollforward information which is an annual requirement.

During the first quarter of our fiscal year ending November 30, 2024, we adopted ASU 2022 - 04.

We will present the annual roll-forward disclosure requirement within our annual report on Form 10 -K.

We have agreements with third parties to provide supplier finance programs which facilitate participating suppliers' ability to finance payment obligations of the Company with designated third -party financial institutions.

Participating suppliers may, at their sole discretion, elect to finance one or more payment obligations of the Company prior to their scheduled due dates at a discounted price to participating financial institutions.

The Company has no economic interest in the sale of these suppliers’ receivables and no direct financial relationship with the financial institutions concerning these services.

The Company’s obligations to its suppliers, including amounts due and scheduled payment dates, are not impacted by suppliers’ decisions to finance amounts under these arrangements.

The outstanding payment obligations that were confirmed as valid and remained outstanding as of March 2, 2024 were approximately $ 4,025 .

These obligations under the Company’s supplier finance programs are included in Accounts Payable in the Consolidated Balance Sheets, and the associated payments are reflected in the cash flows from operating activities section of the Consolidated Statements of Cash Flows.

Recently issued accounting standards or pronouncements not disclosed above have been excluded as they are not relevant to the company.

Sanglier Ltd.

On September 8, 2023, we acquired the assets of Sanglier Ltd.

(“Sanglier”) for a base purchase price of 13,361 British pound sterling, or approximately $ 16,660 which was funded through existing cash.

This includes a holdback amount of 2,100 British pound sterling that will be paid on the 18 -month anniversary of the closing date.

Sanglier, headquartered in Mansfield, United Kingdom, is a manufacturer and filler of sprayable (aerosol and cannister) industrial adhesives.

The acquisition of Sanglier expands our innovation capabilities and product portfolio across the Un ited Kingdom and Europe transforming adhesives applications to enable sprayable delivery providing end users with an opportunity to greatly improve labor efficiency.

The acquisition fair value measurement was preliminary as of March 2, 2024 and includes intangible assets of $ 10,723 and other net assets of $ 5,937 .

Sanglier is included in our Construction Adhesives operating segment.

Adhezion Biomedical LLC

On June 23, 

2023, we acquired Adhezion Biomedical LLC (“Adhezion”) for a base purchase price of approximately $ 81,201 which was funded through borrowings on our credit facility.

On June 23, 2023, we acquired Adhezion Biomedical LLC (“Adhezion”) for a base purchase price of $ 80,802 which was funded through borrowings on our credit facility.

This includes a holdback amount of $ 780 that will be paid on the 12 -month anniversary of the closing date.

The agreement includes a payment of contingent consideration up to $ 15,000 following the completion of certain performance goals and conditions.

Adhezion, headquartered in Wyomissing, Pennsylvania, is a manufacturer of cyanoacrylate-based medical adhesives and infection prevention products.

The acquisition of Adhezion positions us for expansion in the medical adhesives industry and creates a solid, unique platform from which to scale and innovate in the healthcare adhesives industry. 

The acquisition fair value measurement was preliminary as of September 2, 2023 and includes intangible asse ts of $ 40,800 , goodwill of $ 37,063  and other net asse ts of $ 3,338 .

The agreement includes a payment of contingent consideration up to $ 15,000 following the completion of certain performance goals and conditions.

Adhezion, headquartered in Wyomissing, Pennsylvania, is a manufacturer of cyanoacrylate-based healthcare adhesives and infection prevention products.

The acquisition of Adhezion positions us for expansion in the healthcare adhesives industry and creates a solid, unique platform from which to scale and innovate in the healthcare adhesives industry.

The acquisition fair value measurement was preliminary as of March 2, 2024 and includes intangible assets of $ 38,500 , goodwill of $ 37,589 and other net assets of $ 4,713 .

Goodwill represents expected synergies from combining Adhezion with our existing business.

We are evaluating how much goodwill is deductible for tax purposes . Adhezion will be included in our Hygiene, Health and Consumable Adhesives operating segment.

As of March 2, 2024 , the amount of goodwill that is deductible for tax purposes is $ 25,702 .

Adhezion is included in our Hygiene, Health and Consumable Adhesives operating segment.

XChem International LLC

On June 12, 2023, we acquired XChem International LLC ("XChem") for a base purchase price of approximately $ 14,591  which was funded through borrowings on our credit facility.

This includes a holdback amount of $ 1,650 that will be paid on the 18 -month anniversary of the closing date. XChem, headquartered in Ras Al-Khaimah, United Arab Emirates, is a manufacturer of adhesives and sealants for construction-related applications.

The acquisition of XChem provides our construction adhesives global business with additional manufacturing presence for certain brands outside the U.S.

and broadens our construction adhesives portfolio of highly specified applications and diversifies it toward both non-U.S.

and infrastructure-oriented markets. 

The acquisition fair value measurement was preliminary as of September 2, 2023 and includes intangible asse ts of $ 8,664  

and other net asse ts of $ 5,927 . Goodwill represents expected synergies from combining XChem with our existing business. Goodwill is not deductible for tax purposes.

XChem will be included in our Construction Adhesives operating segment.

On June 12, 2023, we acquired XChem International LLC ("XChem") for a base purchase price of approximately $ 14,496 which was funded through borrowings on our credit facility.

This includes a holdback amount of $ 1,650 that will be paid on the 18 -month anniversary of the closing date.

XChem, headquartered in Ras Al-Khaimah, United Arab Emirates, is a manufacturer of adhesives and sealants for construction-related applications.

The acquisition of XChem provides our construction adhesives global business with additional manufacturing presence for certain brands outside the U.S.

and broadens our construction adhesives portfolio of highly specified applications and diversifies it toward both non-U.S.

and infrastructure-oriented markets.

The acquisition fair value measurement was preliminary as of March 2, 2024 and includes intangible assets of $ 4,600 , goodwill of $ 4,504 and other net assets of $ 5,392 .

Goodwill represents expected synergies from combining XChem with our existing business.

Goodwill is not deductible for tax purposes.

XChem is included in our Construction Adhesives operating segment.

Beardow Adams Holdings Ltd.

On May 1, 2023, we acquired Beardow Adams Holdings Ltd. (“Beardow Adams”) for a total purchase price of 80,738 British pound sterling, or approximately $ 100,885 , which was funded through borrowings on our credit facility. This includes a holdback amount of 8,000 British pound sterling that will be paid on the 18 -month anniversary of the closing date.

Beardow Adams, based in the  United Kingdom, develops and manufactures adhesives, sealants and coatings, principally in the fields of packaging and related applications. The acquisition of Beardow Adams is expected to accelerate profitable growth in many of our core end markets and generate business synergies through better raw material pricing, production optimization, an expanded distribution platform and difference-making innovation.

The acquisition fair value measurement was preliminary as of September 2, 2023 and includes intangible asse ts of $ 40,485 , goodwill of $ 45,961  and other net asse ts of $ 14,439 . Goodwill represents expected synergies from combining Beardow Adams with our existing business.

We are evaluating how much goodwill is deductible for tax purposes.

Beardow Adams  is included in our Hygiene, Health and Consumable Adhesives operating segment. 

On May 1, 2023, we acquired Beardow Adams Holdings Ltd.

(“Beardow Adams”) for a total purchase price of 80,738 British pound sterling, or approximately $ 100,885 , which was funded through borrowings on our credit facility.

This includes a holdback amount of 8,000 British pound sterling that will be paid on the 18 -month anniversary of the closing date.

Beardow Adams, based in the United Kingdom, develops and manufactures adhesives, sealants and coatings, principally in the fields of packaging and related applications.

The acquisition of Beardow Adams is expected to accelerate profitable growth in many of our core end markets and generate business synergies through better raw material pricing, production optimization and an expanded distribution platform.

The acquisition fair value measurement was preliminary as of March 2, 2024 and includes intangible assets of $ 35,425 , goodwill of $ 27,280 and other net assets of $ 38,180 .

Goodwill represents expected synergies from combining Beardow Adams with our existing business.

As of March 2, 2024 , the amount of goodwill that is deductible for tax purposes is $ 2,998 .

The remaining goodwill is not deductible for tax purposes.

Beardow Adams is included in our Hygiene, Health and Consumable Adhesives operating segment.

Aspen Research Corporation

On January 31, 2023, we acquired the assets of Aspen Research Corporation (“Aspen”) for a total purchase price of $ 9,761 , which was funded through existing cash.

This includes a holdback amount of $ 500 that will be paid on the 18 -month anniversary of the closing date.

Aspen, located in Maple Grove, Minnesota, is a contract research organization that develops and manufactures innovative solutions for some of the adhesives used in our insulating glass market.

On January 31, 2023, we acquired the assets of Aspen Research Corporation (“Aspen”) for a total purchase price of $ 9,761 , which was funded through existing cash.

This includes a holdback amount of $ 500 that will be paid on the 18 -month anniversary of the closing date.

Aspen, located in Maple Grove, Minnesota, is a contract research organization that develops and manufactures innovative solutions for some of the adhesives used in our insulating glass market.

Aspen is known for their superior understanding of materials science, engineering and analytical testing and specializes in custom materials manufacturing for chemicals and adhesives products.

The acquisition of Aspen is expected to expand our Engineering Adhesives footprint in North America and strengthen our capabilities in the insulating glass market, in addition to bringing additive continuous flow, process manufacturing capabilities that we plan to leverage.

The acquisition fair value measurement was preliminary as of September 2, 2023 and includes intangible asse ts of $ 4,900 , goodwill of $ 2,788  

and other net assets of $ 2,073 .

Goodwill represents expected synergies from combining Aspen with our existing business. Goodwill is deductible for tax purposes.

A spen is included in our Engineering Adhesives operating segment. 

On December 15, 2022, we acquired Lemtapes Oy (“Lemtapes”) for a total purchase price of 8,048 Euro, or approximately $ 8,554  which was funded through existing cash.

This includes a holdback amount of 850 Euro that will be paid on the 18 -month anniversary of the closing date.

Lemtapes, located in Valkeakoski, Finland, is a solutions provider of ecological, innovative tapes and adhesives for the packaging and plywood industries.

The acquisition of Aspen is expected to expand our Engineering Adhesives footprint in North America and strengthen our capabilities in the insulating glass market, in addition to bringing additive continuous flow, process manufacturing capabilities that we plan to leverage.

The acquisition fair value measurement was final as of December 2, 2023 and includes intangible assets of $ 4,900 , goodwill of $ 3,832 and other net assets of $ 1,029 .

Goodwill represents expected synergies from combining Aspen with our existing business.

Goodwill is deductible for tax purposes.

Aspen is included in our Engineering Adhesives operating segment.

On December 15, 2022, we acquired Lemtapes Oy (“Lemtapes”) for a total purchase price of $ 8,922 Euro, or approximately $ 9,482 which was funded through existing cash.

This includes a holdback amount of 850 Euro that will be paid on the 18 -month anniversary of the closing date.

Lemtapes, located in Valkeakoski, Finland, is a solutions provider of ecological, innovative tapes and adhesives for the packaging and plywood industries.

The acquisition of Lemtapes is expected to reinforce our strategic position in Europe, especially for our adhesives coated solutions products.

This acquisition will also accelerate our growth strategy of fast-growing, high margin businesses while adding technology capabilities and strong customer relationships.

The acquisition fair value measurement was preliminary as of September 2, 2023 and includes intangible ass ets of $ 5,526 , goodwill of $ 955 and other net assets of $ 2,073 .

Goodwill represents expected synergies from combining Lemtapes with our existing business. Goodwill is not deductible for tax purposes. 

Lemta pes is included in our Hygiene, Health and Consumable Adhesives operating segment.

GSSI Sealants                                                                                                    

On October 24, 2022, we acquired GSSI Sealants, Inc. ("GSSI") for a total purchase price of $ 7,701 , which was funded through existing cash.

This includes a holdback amount of $ 1,050 that will be paid on the 12 -month anniversary of the closing date.

GSSI, headquartered in Houston, Texas, is a manufacturer of premier elastomeric butyl rubber sealant tapes.

The acquisition of GSSI is expected to support our strategy to expand our Construction Adhesives business selectively via high margin applications and expand our reach to new regions. The acquisition fair value measurement was final as of September 2, 2023 and includes intangible a ssets of $ 3,400 , goodwill of $ 1,123  and other net assets of $ 3,178 .

Goodwill represents expected synergies from combining GSSI with our existing business. Goodwill is not deductible for tax purposes. GSSI is included in our Construction Adhesives operating segment. 

ZKLT Polymer Co.

On August 16, 2022, we acquired ZKLT Polymer Co., Ltd.

("ZKLT") for a base purchase price of 143,965 Chinese renminbi, or approximately $ 21,260 , which was funded through existing cash.

This includes a holdback of 27,000 Chinese renminbi, or approximately $ 3,987 , that will be paid half on each of the 12 -month and 18 -month anniversaries of the closing date, as well as contingent consideration up to 30,000 Chinese renminbi, or approximately $ 4,132 , following the completion of certain performance goals and conditions. ZKLT, headquartered in Chongquin City, China, is a manufacturer of liquid adhesives primarily for the automotive market.

The acquisition of ZKLT is expected to add unique technology, strong customer relationships and a strategic manufacturing location to further strengthen our presence in central China.

The acquisition fair value measurement was final as of September 2, 2023  and includes intangible assets of $ 5,183 , goodwill of $ 5,992  

and other net as sets of $ 10,085 .

Goodwill represents expected synergies from combining ZKLT with our existing business. Goodwill is not deductible for tax purposes.

See Note 12  for further discussion of the fair value of the contingent consideration.

ZKLT is included in our Engineering Adhesives operating segment. 

On January 26, 2022, we acquired Apollo Chemicals Limited, Apollo Roofing Solutions Limited and Apollo Construction Solutions Limited (collectively, "Apollo") for a total purchase price of 152,714 British pound sterling, or approximately $ 205,592 , which was funded through borrowings on our credit facility. 

Apollo, headquartered in Tamworth, UK, is a manufacturer of liquid adhesives, coatings and primers for the roofing, industrial and construction markets.

Apollo is expected to enhance our position in key high-value, high-margin markets in the UK and throughout Europe.

The acquisition fair value measurement was final as of December 3, 2022 and includes intangible assets of $ 76,198 , goodwill of $ 119,358  and other net assets of $ 10,036 .

Goodwill represents expected synergies from combining Apollo with our existing business. Goodwill is not deductible for tax purposes.  The acquisition is included in our Construction Adhesives operating segment. 

On January 11, 2022, we acquired Fourny NV ("Fourny") for a base purchase price of 12,867 Euro, or approximately $ 14,627 , which was funded through existing cash.

The agreement required us to pay an additional holdback amount 18 months following the date of acquisition and during the three months ended September 2, 2023 we paid $ 3,060 .

Fourny, headquartered in Willebroek, Belgium, is a manufacturer of construction adhesives.

Fourny is expected to enhance our position in key high-value, high-margin markets in Europe.

The acquisition fair value measurement was final as of December 3, 2022 and includes intangible assets of $ 10,117 , goodwill of $ 6,455 and other net assets of $ 1,391 .

Goodwill represents expected synergies from combining Fourny with our existing business. Goodwill is not deductible for tax purposes.

Fourny is included in our Construction Adhesives operating segment. 

All acquisitions, individually and in the aggregate, are

not material and therefore pro forma financial information is

not provided.

The acquisition fair value measurement was final as of December 2, 2023 and includes intangible assets of $ 5,526 , goodwill of $ 3,028 and other net assets of $ 928 .

Goodwill represents expected synergies from combining Lemtapes with our existing business.

Goodwill is not deductible for tax purposes.

Lemtapes is included in our Hygiene, Health and Consumable Adhesives operating segment.

All acquisitions, individually and in the aggregate, are not material and therefore pro forma financial information is not provided.

Restructuring Actions

During fiscal year 2023, the Company approved restructuring plans (the "Plans") related to organizational changes and other actions to optimize operations and integrate acquired businesses.

The Plans began to be implemented in the second quarter of fiscal year 2023 and are currently expected to be completed during fiscal year 2026, with the majority of the charges recognized and cash payments occurring in fiscal 2023 and 2024.

In implementing the Plans, the Company currently expects to incur pre-tax costs of approximately $ 39,100  to $ 44,100  for severance and related employee costs globally, other restructuring costs related to the streamlining of processes and the payment of anticipated income taxes in certain jurisdictions related to the Plans. 

The following table summarizes the pre-tax restructuring charges by income statement classification:

During fiscal year 2023, the Company approved restructuring plans (the "Plans") related to organizational changes and other actions to optimize operations and integrate acquired businesses.

The Plans were implemented in the second quarter of fiscal year 2023 and are currently expected to be completed during fiscal year 2026, with the majority of the charges recognized and cash payments occurring in fiscal 2023 and 2024.

In implementing the Plans, the Company currently expects to incur pre-tax costs of approximately $ 39,100 to $ 44,100 for severance and related employee costs globally, other restructuring costs related to the streamlining of processes and the payment of anticipated income taxes in certain jurisdictions related to the Plans.

The following table summarizes the pre-tax distribution of charges under these restructuring plans by income statement classification:

Three Months Ended

Nine Months Ended

September 2, 2023

August 27, 2022

September 2, 2023

August 27, 2022

March 2, 2024

March 4, 2023

Cost of sales

$ 3,322  

$ 8,407  

$ 2,915 $ 2,301

Selling, general and administrative

( 222 )  

$ 8,399  

$ ( 222 )  

$ 16,727  

$ 4,080 $ 2,926

The restructuring charges are all recorded in Corporate Unallocated for segment reporting purposes.

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Asset-Related

Balance at November 27, 2021

$ 1,095  

Balance at December 3, 2022

$ 57 $ - $ - $ 57

Expenses incurred

( 449 )  

22,731 1,369 487 24,587

Non-cash charges

- ( 1,369 ) ( 453 ) ( 1,822 )

Cash payments

( 529 )  

( 9,802 ) - ( 34 ) ( 9,836 )

Foreign currency translation

( 60 )  

( 1,263 ) - - ( 1,263 )

Balance at December 2, 2023

$ 11,723 $ - $ - $ 11,723

Expenses incurred

16,394  

16,727  

1,611 2,417 52 4,080

Non-cash charges

( 333 )  

- ( 2,417 ) ( 41 ) ( 2,458 )

Cash payments

( 6,910 )  

( 4,118 ) - ( 11 ) ( 4,129 )

Foreign currency translation

( 1,130 )  

Balance at September 2, 2023

$ 8,411  

Non-cash charges include accelerated depreciation resulting from the cessation of use of certain long-lived assets.

( 142 ) - - ( 142 )

Balance at March 2, 2024

$ 9,074 $ - $ - $ 9,074

Non-cash charges primarily include accelerated depreciation resulting from the cessation of use of certain long-lived assets.

Restructuring liabilities have been classified as a component of other accrued expenses on the Consolidated Balance Sheets.

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Raw materials

$ 221,385  

$ 237,071  

Finished goods

251,256  

254,710  

Total inventories

$ 472,641  

$ 491,781  

Goodwill and Other Intangible Assets

The goodwill activity by reportable segment for the 

nine months ended September 2, 2023 is presented below:

The goodwill activity by reportable segment for the three months ended March 2, 2024 is presented below:

Hygiene, Health

1 unchanged sentence

Balance at December 2, 2023

$ 328,962  

$ 637,910  

$ 425,755  

$ 1,392,627  

$ 84,158  

$ 2,788  

86,946  

$ 402,598 $ 651,145 $ 432,769 $ 1,486,512

$ 551 $ - $ 3,006 3,557

Foreign currency translation effect

$ 3,416  

$ 3,516  

$ 4,030  

10,962  

Balance at September 2, 2023

$ 416,536  

$ 644,214  

$ 429,785  

$ 1,490,535  

$ ( 1,129 ) $ ( 2,214 ) $ 58 ( 3,285 )

Balance at March 2, 2024

$ 402,020 $ 648,931 $ 435,833 $ 1,486,784

Balances of amortizable identifiable intangible assets, excluding goodwill and other non-amortizable intangible assets, are as follows:

September 2, 2023

March 2, 2024

Amortizable Intangible Assets

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Original cost

$ 144,597  

$ 1,052,458  

$ 55,379  

$ 10,919  

$ 1,263,353  

$ 136,904 $ 973,481 $ 58,205 $ 9,885 $ 1,178,475

Accumulated amortization

( 56,624 )  

( 432,044 )  

( 21,837 )  

( 6,797 )  

( 54,091 ) ( 391,506 ) ( 24,815 ) ( 6,229 ) ( 476,641 )

Net identifiable intangibles

$ 87,973  

$ 620,414  

$ 33,542  

$ 4,122  

$ 746,051  

$ 82,813 $ 581,975 $ 33,390 $ 3,656 $ 701,834

December 2, 2023

2 unchanged sentences

Original cost

$ 118,727  

$ 1,004,008  

$ 50,324  

$ 11,053  

$ 1,184,112  

$ 144,763 $ 986,470 $ 58,484 $ 10,911 $ 1,200,628

Accumulated amortization

( 66,433 )  

( 388,394 )  

( 21,401 )  

( 6,251 )  

( 59,631 ) ( 382,220 ) ( 23,099 ) ( 7,012 ) ( 471,962 )

Net identifiable intangibles

$ 52,294  

$ 615,614  

$ 28,923  

$ 4,802  

$ 701,633  

Amortization expense with respect to amortizable intangible assets was $ 20,820 and $ 18,676  for the three months ended September 2, 2023 and August 27, 2022 , respectively, and $ 58,633  and $ 55,088 for the 

nine months ended 

September 2, 2023 and August 27, 2022 , respectively.  

$ 85,132 $ 604,250 $ 35,385 $ 3,899 $ 728,666

Amortization expense with respect to amortizable intangible assets was $ 20,355 and $ 18,683 for the three months ended March 2, 2024 and March 4, 2023 , respectively.

Estimated aggregate amortization expense based on the current carrying value of amortizable intangible assets for the next five fiscal years is as follows:

Amortization expense

$ 17,238  

$ 79,499  

$ 76,732  

$ 70,072  

$ 66,754  

$ 435,756  

Non-amortizable intangible assets as of 

September 2, 2023 and December 3, 2022 were $ 470  and $ 459 , respectively, and relate to trademarks and trade names.

The change in non-amortizable assets as of September 2, 2023 compared to December 3, 2022 was due to changes in foreign currency exchange rates.

Long-Term Debt

On February 15, 2023, we entered into a credit agreement with a consortium of financial institutions (“Second Amended and Restated Credit Agreement”) which replaces our existing revolving credit agreement under the amended and restated revolving credit agreement dated October 20, 2020 and also replaces our secured term loan credit agreement dated October 20, 2017.

The Second Amended and Restated Credit Agreement provides for a new senior secured term loan A facility in an aggregate principal amount of $ 500,000 (“Term Loan A”), a new senior secured term loan B facility in an aggregate principal amount of $ 800,000 (“Term Loan B”) and amendments to and extension of our existing senior secured revolving credit facility with an aggregate commitment in the amount of $ 700,000 (“Revolving Credit Facility”).

A portion of the proceeds of the combined facilities, (the “Credit Facilities”) was used to pay off the existing term loan and revolver.

The Credit Facilities will generally be used to finance working capital needs and acquisitions, and for general corporate purposes.

All of our obligations under the Credit Facilities will be secured by a first -lien security interest in substantially all personal property and material real property of the Company and its material U.S.

subsidiaries, and will be guaranteed by all of the Company’s material U.S.

subsidiaries.

Interest on Term Loan A is payable at the Secured Overnight Financing Rate ("SOFR") plus an adjustment of 

0.10 percent and an interest rate spread of 1.75 percent ( 7.15  percent at September 2, 2023 ).

The interest rate spread is based on a secured leverage grid.

Term Loan A matures on February 15, 2028.

On August 16, 2023, we amended the Term Loan B agreement to an interest rate of SOFR plus an interest rate spread of 2.25 percent with a SOFR floor of 0.50 percent ( 7.55  percent at September 2, 2023 ).

Term Loan B matures on February 15, 2030. 

On January 12, 2023, we entered into an interest rate swap agreement to convert $ 400,000 of our variable rate 1 -month LIBOR rate debt to a fixed rate of 3.6895 percent. On February 28, 2023, after entering into the Second Amended and Restated Credit Agreement, we amended the interest rate swap agreement to 1 -month SOFR and a fixed rate of 3.7260 in accordance with the practical expedients included in ASC 848, Reference Rate Reform .

See Note 11 for further discussion of this interest rate swap.

On March 16, 2023, we entered into interest rate swap agreements to convert $ 300,000 of our 1 -month SOFR rate debt to a fixed rate of 3.7210 percent and to convert $ 100,000 of our 1 -month SOFR rate debt to a fixed rate of 3.8990 percent.

See Note 11 for further discussion of these interest rate swaps.

Revolving Credit Facility

Interest on the Revolving Credit Facility is payable at SOFR plus an adjustment of 0.10 percent and an interest rate spread of 1.75 percent ( 7.15  percent at September 2, 2023 ).

A facility fee of 25 basis points of the unused commitment under the Revolving Credit Facility is payable quarterly.

The interest rate spread and the facility fee are based on a secured leverage grid.

At September 2, 2023 , there was no balance outstanding on the Revolving Credit Facility.

The Revolving Credit Facility matures on February 15, 2028.

The Revolving Credit Facility can be drawn upon for general corporate purposes up to a maximum of $ 700,000 , less issued letters of credit.

At June 3, 2023, letters of credit reduced the available amount under the Revolving Credit Facil ity by $ 9,968 .

Covenants and Other

Under the Second Amended and Restated Credit Agreement, the Revolving Credit Facility and Term Loan A are subject to certain covenants and restrictions.

For these facilities, we are required to maintain a secured leverage ratio, as defined in the agreement, no greater than 4.75 to 1.00 for our fiscal quarters ending on or prior to June 1, 2024 and then 4.50 to 1.00 thereafter.

We are also required to maintain an interest coverage ratio of not less than 2.00 to 1.00.

Restrictive covenants include, but are not limited to, limitations on secured and unsecured borrowings, interest coverage, intercompany transfers and investments, third party investments, dispositions of assets, leases, liens, dividends and distributions, and contains a maximum total debt to trailing twelve months EBITDA requirement. Certain covenants become less restrictive after meeting leverage or other financial ratios.

In addition, we cannot be a member of any consolidated group as defined for income tax purposes other than with our subsidiaries.

We are subject to mandatory prepayments in the first quarter of each fiscal year equal to 50 percent of Excess Cash Flow, as defined in the Second Amended and Restated Credit Agreement, of the prior fiscal year less any voluntary prepayments made during that fiscal year.

The Excess Cash Flow Percentage shall be reduced to 25 percent when our Secured Leverage Ratio is below 4.25:1.00 and to 0 percent when our Secured Leverage Ratio is below 3.75:1.00.

The principal balance of the Term Loan B loans will be repayable in equal quarterly installments in an aggregate annual amount equal to 1 percent of the original principal amount thereof, with the balance due at maturity on February 15, 2030. 

The principal balance of the Term Loan A loans will be repayable in quarterly installments as follows:

(i) with respect to the first eight fiscal quarters ended after the effective date of the Second Amended and Restated Credit Agreement, 1.25 percent of the aggregate principal amount of the original principal of the Term Loan A loans, (ii) with respect to the eight fiscal quarters ended after the end of the period set forth in the preceding clause (i), 1.875 percent of the aggregate principal amount of the original principal amount of the Term Loan A loans, and (iii) thereafter, 2.5 percent of the original principal amount of the Term Loan A loans, with the balance due at maturity on February 15, 2028.

$ 55,446 $ 76,531 $ 69,810 $ 66,495 $ 66,188 $ 367,364

The above amortization expense forecast is an estimate.

Actual amounts may change from such estimated amounts due to fluctuations in foreign currency exchange rates, additional intangible asset acquisitions, potential impairment, accelerated amortization or other events.

Non-amortizable intangible assets as of March 2, 2024 and December 2, 2023 were $ 473 and $ 474 , respectively, and relate to trademarks and trade names.

The change in non-amortizable assets as of March 2, 2024 compared to December 2, 2023 was due to changes in foreign currency exchange rates.

Components of Net Periodic Benefit related to Pension and Other Postretirement Benefit Plans

Three Months Ended September 2, 2023 and August 27, 2022

Pension Benefits

Postretirement

Net periodic (benefit) cost:

Interest cost

Expected return on assets

( 7,205 )  

( 7,117 )  

( 1,785 )  

( 1,525 )  

( 2,465 )  

Amortization:

Prior service (benefit) cost

Actuarial loss (gain)

Settlement charge

Net periodic (benefit) cost

$ ( 3,095 )  

$ ( 3,737 )  

$ ( 2,164 )  

Nine Months Ended September 2, 2023 and August 27, 2022

Three Months Ended March 2, 2024 and March 4, 2023

Pension Benefits

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Net periodic (benefit) cost:

$ 1,255  

$ 2,086  

$ - $ - $ 350 $ 413 $ - $ -

Interest cost

10,426  

3,464 3,475 1,569 1,410 291 301

Expected return on assets

( 21,617 )  

( 21,353 )  

( 5,277 )  

( 4,916 )  

( 7,394 )  

( 6,555 ) ( 7,206 ) ( 1,637 ) ( 1,730 ) ( 2,727 ) ( 2,465 )

Amortization:

Prior service (benefit) cost

Actuarial loss (gain)

Settlement charge

Prior service cost

- - 16 15 - -

Actuarial loss

1,159 635 513 491 - -

Net periodic (benefit) cost

$ ( 9,285 )  

$ ( 11,212 )  

$ 1,821  

$ 4,580  

$ ( 6,491 )  

$ ( 1,932 ) $ ( 3,096 ) $ 811 $ 599 $ ( 2,436 ) $ ( 2,164 )

Service cost is included with employee compensation cost in cost of sales and selling, general and administrative expenses in the Consolidated Statements of Income.

The components of our net periodic defined benefit pension and postretirement benefit costs other than service cost are presented in other income, net in the Consolidated Statements of Income.

In the nine months ended August 27, 2022, we recognized a non-cash settlement charge of $ 3,329 related to the termination of our Canadian defined benefit pension plan. 

The settlement charge is included in other income, net in the Consolidated Statement of Income.

Accumulated Other Comprehensive Income (Loss)

The following table provides details of total comprehensive income (loss): 

Three Months Ended September 2, 2023

Three Months Ended August 27, 2022

Fuller Stockholders

Net income attributable to H.B.

Fuller and non-controlling interest

$ 37,627  

$ 46,497  

Foreign currency translation¹

$ ( 8,710 )  

( 8,710 )  

$ ( 87,743 )  

( 87,743 )  

Defined benefit pension plans adjustment²

( 294 )  

( 94 )  

Interest rate swaps³

21,086  

( 5,188 )  

15,898  

( 437 )  

Cross-currency swaps³

( 377 )  

( 371 )  

Net investment hedges³

( 6,156 )  

( 4,641 )  

Other comprehensive income (loss)

$ 7,377  

$ ( 3,967 )  

$ 3,410  

$ ( 7 )  

$ ( 85,559 )  

$ ( 525 )  

$ ( 86,084 )  

Comprehensive income (loss)

$ 41,037  

$ ( 39,587 )  

Nine Months Ended September 2, 2023

Nine Months Ended August 27, 2022

The following table provides details of total comprehensive income (loss):

Three Months Ended March 2, 2024

Three Months Ended March 4, 2023

Fuller Stockholders

2 unchanged sentences

Fuller and non-controlling interest

$ 99,916  

$ 132,007  

Foreign currency translation adjustment¹

$ 14,070  

14,070  

( 12 )  

$ ( 165,302 )  

( 165,302 )  

Defined benefit pension plans adjustment²

( 877 )  

( 1,507 )  

Interest rate swap³

19,557  

( 4,812 )  

14,745  

14,473  

( 3,549 )  

10,924  

Cross-currency swaps³

( 3,720 )  

( 3,664 )  

Net investment hedges³

( 13,694 )  

( 10,324 )  

Other comprehensive income (loss)

$ 23,382  

$ ( 2,319 )  

$ 21,063  

( 12 )  

$ ( 149,066 )  

$ ( 5,000 )  

( 154,066 )  

Comprehensive income (loss)

$ 120,979  

$ ( 22,059 )  

Foreign currency translation¹

Defined benefit pension plans adjustment²

Interest rate swaps³

Net investment hedges³

Other comprehensive (loss) income

Comprehensive income

¹ Income taxes are not provided for foreign currency translation relating to permanent investments in international subsidiaries.

1 unchanged sentence

³ Income (loss) reclassified from AOCI into earnings is reported in other income, net.

The components of accumulated other comprehensive loss are as follows:

September 2, 2023

The components of accumulated other comprehensive loss are as follows:

March 2, 2024

Foreign currency translation adjustment

$ ( 249,973 )  

$ ( 249,943 )  

$ ( 266,080 ) $ ( 266,045 ) $ ( 35 )

Defined benefit pension plans adjustment, net of taxes of $ 66,280

( 125,350 ) ( 125,350 ) -

Interest rate swap, net of taxes of ($ 649 )

14,745  

2,007 2,007 -

Net investment hedges, net of taxes of $ 16,509

( 51,067 )  

Defined benefit pension plans adjustment, net of taxes of $ 66,867

( 125,689 )  

( 51,060 ) ( 51,060 ) -

Reclassification of AOCI tax effects

( 18,341 )  

( 18,341 ) ( 18,341 ) -

Accumulated other comprehensive loss

$ ( 430,325 )  

$ ( 430,295 )  

$ ( 458,824 ) $ ( 458,789 ) $ ( 35 )

December 2, 2023

Foreign currency translation adjustment

$ ( 264,054 )  

$ ( 264,012 )  

Net investment hedges, net of taxes of $ 13,297

( 40,743 )  

$ ( 246,736 ) $ ( 246,692 ) $ ( 44 )

Defined benefit pension plans adjustment, net of taxes of $ 66,982

( 128,261 )  

( 127,469 ) ( 127,469 ) -

Interest rate swap, net of taxes of ($ 1,460 )

4,472 4,472 -

Net investment hedges, net of taxes of $ 17,744

( 54,850 ) ( 54,850 ) -

Reclassification of AOCI tax effects

( 18,341 )  

( 18,341 ) ( 18,341 ) -

Accumulated other comprehensive loss

$ ( 451,399 )  

$ ( 451,357 )  

Income tax expense for the 

three and nine months ended September 2, 2023  includes $ 6,243  and $ 9,130 of discrete tax expense, respectively, relating to various U.S.

and foreign tax matters.

Excluding the discrete tax expense, the overall effective tax rate was 

27.1 percent and 

28.5 percent for the three and nine months ended September 2, 2023 , respectively.

Income tax expense for the three and nine months ended August 27, 2022 includes $ 6,449  and $ 7,696 of discrete tax expense, respectively, primarily relating to the revaluation of cross-currency swap agreements due to depreciation of the Euro versus the U.S.

Dollar, as well as U.S.

and various foreign tax matters offset by the tax effect of legal entity mergers. Excluding the discrete tax expense, the overall effective tax rate was 

29.9  percent and 

28.7  percent for the 

three and nine months ended August 27, 2022 , respectively.

September 2, 2023 , we had a liability of $ 16,010  recorded for gross unrecognized tax benefits (excluding interest) compared to $ 17,582  as of December 3, 2022 .

As of September 2, 2023 and December 3, 2022 , we had accrued $ 7,137 and $ 5,680 of gross interest relating to unrecognized tax benefits, respectively.

$ ( 442,924 ) $ ( 442,880 ) $ ( 44 )

Income tax expense for the three months ended March 2, 2024 includes $ 2,527 of discrete tax benefit relating to various foreign tax matters, as well as an excess tax benefit related to U.S.

stock compensation.

Excluding the discrete tax benefit, the overall effective tax rate was 27.4 percent for the three months ended March 2, 2024 .

Income tax expense for the three months ended March 4, 2023 includes $ 846 of discrete tax expense relating to various foreign tax matters offset by an excess tax benefit related to U.S.

stock compensation.

Excluding the discrete tax expense, the overall effective tax rate was 29.2 percent for the three months ended March 4, 2023 .

As of March 2, 2024 , we had a liability of $ 14,127 recorded for gross unrecognized tax benefits (excluding interest) compared to $ 14,254 as of December 2, 2023 .

As of March 2, 2024 and December 2, 2023 , we had accrued $ 6,649 and $ 6,310 of gross interest relating to unrecognized tax benefits, respectively.

Earnings Per Share

1 unchanged sentence

Three Months Ended

Nine Months Ended

(Shares in thousands)

Weighted-average common shares - basic

54,394  

53,644  

54,279  

53,498  

54,702 54,174

Equivalent shares from share-based compensations plans

Weighted-average common and common equivalent shares diluted

56,033  

55,130  

55,890  

55,201  

56,573 55,919

Basic earnings per share is calculated by dividing net income attributable to H.B.

4 unchanged sentences

Share-based compensation awards for which total employee proceeds exceed the average market price over the applicable period have an antidilutive effect on earnings per share, and accordingly, are excluded from the calculation of diluted earnings per share.

Share-based compensation awards of 

1,025,337 and 573,914  shares for the three months ended September 2, 2023 and August 27, 2022 , respectively, and 

1,164,870  and 

691,856  shares for the 

nine months ended September 2, 2023 and August 27, 2022 , respectively, were excluded from diluted earnings per share calculations because they were antidilutive.

Share-based compensation awards of 1,138,264 and 1,172,987 shares for the three months ended March 2, 2024 and March 4, 2023 , respectively, were excluded from diluted earnings per share calculations because they were antidilutive.

Financial Instruments

As a result of being a global enterprise, foreign currency exchange rates and fluctuations in those rates may affect the Company's net investment in foreign subsidiaries, and our earnings, cash flows and financial position are exposed to foreign currency risk from foreign currency denominated receivables and payables.

We use foreign currency forward contracts, cross-currency swaps, interest rate swaps and net investment hedges to manage risks associated with foreign currency exchange rates and interest rates.

We use foreign currency forward contracts, cross-currency swaps, interest rate swaps and net investment hedges to manage risks associated with foreign currency exchange rates and interest rates.

We do not hold derivative financial instruments of a speculative nature or for trading purposes.

9 unchanged sentences

Cash Flow Hedges

On January 12, 2023, we entered into an interest rate swap agreement to convert $ 400,000 of our variable rate 1 -month LIBOR rate debt to a fixed rate of 3.6895 percent that matures on January 12, 2028. 

On February 28, 2023, after refinancing our debt, we amended the interest rate swap agreement to our 1 -month SOFR rate debt to a fixed rate of 3.7260 in accordance with the practical expedients included in ASC 848, Reference Rate Reform .

The combined fair value of the interest rate swap was an asset of $ 6,652  at September 2, 2023 and was included in other assets i n the Consolidated Balance Sheets.

The swap was designated for hedge accounting treatment as a cash flow hedge.

We are applying the hypothetical derivative method to assess hedge effectiveness for this interest rate swap.

On February 28, 2023, after refinancing our debt, we amended t he interest rate swap agreement to our 1 -month SOFR rate debt to a fixed rate of 3.7260 in accordance with the practical expedients included in ASC 848, Reference Rate Reform .

The combined fair value of the interest rate swap was an asset of $ 3,777 at March 2, 2024 and was included in other assets in the Consolidated Balance Sheets.

The swap was designated for hedge accounting treatment as a cash flow hedge.

We are applying the hypothetical derivative method to assess hedge effectiveness for this interest rate swap.

Changes in the fair value of a hypothetically perfect swap with terms that match the critical terms of our variable rate debt are compared with the change in the fair value of the swap.

On March 16, 2023, we entered into an interest rate swap agreement to convert $ 300,000 of our 1 -month SOFR rate debt to a fixed rate of 3.7210 percent that matures on February 15, 2028.

The combined fair value of the interest rate swap wa s an asset of $ 4,227  a t September 2, 2023 and was included in other liabilities  in the Consolidated Balance Sheets.

The swap was designated for hedge accounting treatment as a cash flow hedge.

We are applying the hypothetical derivative method to assess hedge effectiveness for this interest rate swap.

The combined fair value of the interest rate swap was a liability of $ 4,044 at March 2, 2024 and was included in other liabilities in the Consolidated Balance Sheets.

The swap was designated for hedge accounting treatment as a cash flow hedge.

We are applying the hypothetical deriv ative method to assess hedge effectiveness for this interest rate swap.

Changes in the fair value of a hypothetically perfect swap with terms that match the critical terms of our variable rate debt are compared with the change in the fair value of the swaps.

On March 16, 2023, we entered into an interest rate swap agreement to convert $ 100,000 of our 1 -month SOFR rate debt to a fixed rate of 3.8990 percent that matures on February 15, 2028.

The combined fair value of the interest rate swap was an 

asset of $ 951  

at September 2, 2023 and was included i n other liabilities in the Consolidated Balance Sheets.

The swap was designated for hedge accounting treatment as a cash flow hedge.

The combined fair value of the interest rate swap was an asset of $ 293 at March 2, 2024 and was included i n other assets in the Consolidated Balance Sheets.

The swap was designated for hedge accounting treatment as a cash flow hedge.

We are applying the hypothetical derivative method to assess hedge effectiveness for these interest rate swaps.

Changes in the fair value of a hypothetically perfect swap with terms that match the critical terms of our variable rate debt are compared with the change in the fair value of the swaps.

The amounts of pretax gains (losses) recognized in Comprehensive Income related to derivative instruments designated as cash flow hedges are as follows:

The amounts of pretax (losses) gains recognized in Comprehensive Income related to derivative instruments designated as cash flow hedges are as follows:

Three Months Ended

Nine Months Ended

September 2, 2023

August 27, 2022

September 2, 2023

August 27, 2022

Cross-currency swap contracts

$ ( 377 )  

March 2, 2024

March 4, 2023

Interest rate swap contracts

21,086  

19,557  

14,473  

( 3,276 ) 11,055

Fair Value Hedges

On February 12, 2021, we entered into interest rate swap agreements to convert our $ 300,000  Public Notes that were issued on October 

20, 2020 to a variable interest rate of 1 -month LIBOR plus 3.28 percent. On June 30, 2023, 1 -month LIBOR rates ceased to exist and the IBOR Fallbacks Protocol published by the International Swaps and Derivatives Association ("ISDA") took effect as outlined in the interest rate swap agreement.

As a result, the interest rate swap agreement was converted to Overnight SOFR plus 3.28  percent.

We applied the practical expedients included in ASC 848, Reference Rate Reform . 

These interest rate swap agreements mature on October 15, 2028.

The combined fair value of the interest rate swaps was a liabili ty of $ 46,843 a t 

September 2, 2023 , and was included in other liabilities in the Consolidated Balance Sheets. The swaps were designated for hedge accounting treatment as fair value hedges.

On February 12, 2021, we entered into interest rate swap agreements to convert our $ 300,000 Public Notes that were issued on October 20, 2020 to a variable interest rate of 1 -month LIBOR plus 3.28 percent.

On June 30, 2023, 1 -month LIBOR rates ceased to exist and the IBOR Fallbacks Protocol published by the International Swaps and Derivatives Association ("ISDA") took effect as outlined in the interest rate swap agreement.

As a result, the interest rate swap agreement was converted to Overnight SOFR plus 3.28 percent.

We applied the practical expedients included in ASC 848, Reference Rate Reform .

These interest rate swap agreements mature on October 15, 2028.

The combined fair value of the interest rate swaps was a liabili ty of $ 40,698 a t March 2, 2024 , and was included in other liabilities in the Consolidated Balance Sheets.

The swaps were designated for hedge accounting treatment as fair value hedges.

We apply the short cut method and assume hedge effectiveness.

1 unchanged sentence

Net Investment Hedges

On October 17, 2022, we entered into a float-to-float cross-currency interest rate swap agreement with a notional amount of €307,173 maturing in October 2028.

On October 20, 2022, we entered into fixed-to-fixed cross-currency interest rate swap agreements for a total notional amount of €300,000 with tranches maturing in August 2025, August 2026 and February 2027. 

On October 17, 2022, we entered into a float-to-float cross-currency interest rate swap agreement with a notional amount of €307,173 maturing in October 2028.

On June 30, 2023, 1 -month LIBOR rates ceased to exist and the IBOR Fallbacks Protocol published by the International Swaps and Derivatives Association (ISDA) took effect as outlined in the interest rate swap agreemen t.

As a result, the 1 -month LIBOR leg of the float-to-float agreement was converted to Overnight SOFR plus 3.28  percent.

On July 17, 2023, we amended the 1 -month EURIBOR leg of the float-to-float agreement to Overnight ESTR plus 3.2195  percent.

We applied the practical expedients included in ASC 848, Reference Rate Reform . As of September 2, 2023 , the combined fair value of the swaps w as a liability of $ 67,740  a nd was included in other liabilities in the Consolidated Balance Sheets.

The cross-currency interest rate swaps hedge a portion of the Company’s investment in Euro denominated foreign subsidiaries.

As a result, the 1 -month LIBOR leg of the float-to-float agreement was converted to Overnight SOFR plus 3.28 percent.

On July 17, 2023, we amended the 1 -month EURIBOR leg of the float-to-float agreement to Overnight ESTR plus 3.2195 percent.

We applied the practical expedients included in ASC 848, Reference Rate Reform .

As of March 2, 2024 , the combined fair value of the swaps w as a liability of $ 67,574 and was included in other liabilities in the C onsolidated Balance Sheets.

The cross-currency interest rate swaps hedge a portion of the Company’s investment in Euro denominated foreign subsidiaries.

The swaps are designated as net investment hedges for accounting treatment.

The net gains or losses attributable to changes in spot exchange rates are recorded in the cumulative translation adjustment within other comprehensive income (loss).

The net gains or losses attributable to changes in spot exchange rates are recorded in the cumulative translation adjustment within other comprehensive income.

The gains or losses are reclassified into earnings upon a liquidation event or deconsolidation of the foreign subsidiary.

Any ineffective portions of net investment hedges are reclassified from accumulated other comprehensive income (loss) into earnings during the period of change.

The amount in accumulated other comprehensive income (loss) related to net investment hedge cross-currency swaps was a loss of $ 51,067  of September 2, 2023 .

The amounts of pretax loss recognized in comprehensive income related to the net investment he dge was $ 13,694  

for the nine  months ended September 2, 2023 .

As of September 2, 2023 , we did not reclassify any gains or losses into earnings from net investment hedges and we do not expect to reclassify any such gain or loss into earnings within the next twelve months.

The amount in accumulated other comprehensive income (loss) related to net investment hedge cross-currency sw aps was a loss of $ 51,060 of March 2, 2024 .

The amounts of pretax gain recognized in comprehensive income related to the net investment he dge was $ 5,025 f or the three months ended March 2, 2024 .

As of March 2, 2024 , we did not reclassify any gains or losses into earnings from net investment hedges and we do not expect to reclassify any such gain or loss into earnings within the next twelve months.

No amounts related to net investment hedges have been excluded from the assessment of hedge effectiveness.

Derivatives Not Designated as Hedging Instruments

We use foreign currency forward contracts to offset our exposure to the change in value of certain foreign currency denominated assets and liabilities held at foreign subsidiaries that are remeasured at the end of each period.

We use foreign currency forward contracts to offset our exposure to the change in value of certain foreign currency denominated assets and liabilities held at foreign subsidiaries that are remeasured at the end of each period.

Although the contracts are effective economic hedges, they are not designated as accounting hedges.

Foreign currency forward contracts are recorded as assets and liabilities on the balance sheet at fair value.

Changes in the value of these derivatives are recognized immediately in earnings, thereby offsetting the current earnings effect of the related foreign currency denominated assets and liabilities. 

As of September 2, 2023 , we had forward foreign currency contracts maturing between September 6, 2023 

and May 13, 2024 .

The ma rk-to-market effect associated with these contracts was largely offset by the underlying transaction gains and losses resulting from the foreign currency exposures for which these contracts relate. 

The amounts of pretax gains (losses) recognized in other income, net related to derivative instruments not designated as hedging instruments for the 

nine months ended September 2, 2023 and August 27, 2022 were ($ 798 )  a nd $ 2,378 , respectively.

Changes in the value of these derivatives are recognized immediately in earnings, thereby offsetting the current earnings effect of the related foreign currency denominated assets and liabilities.

See Note 11 for the fair value amounts of these derivative instruments.

As of March 2, 2024 , we had forward foreign currency contracts maturing betw een March 4, 2024 and May 13, 2024.

The amounts of pretax gains (losses) recognized in other income, net related to derivative instruments not designated as hedging instruments for the three months ended March 2, 2024 and March 4, 2023 were $ 5,061 a nd $ 7,154 , respectively.

Concentrations of credit risk with respect to trade accounts receivable are limited due to the large number of entities in the customer base and their dispersion across many different industries and countries.

As of September 2, 2023 , there were no significant concentrations of credit risk.

As of March 2, 2024 , there were no significant concentrations of credit risk.

Fair Value Measurements

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These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

Unobservable inputs that reflect management’s assumptions, and include situations where there is little, if any, market activity for the asset or liability.

Balances Measured at Fair Value on a Recurring Basis

The following table presents information about our financial assets and liabilities that are measured at fair value on a recurring basis as of September 2, 2023 and December 3, 2022 , and indicates the fair value hierarchy of the valuation techniques utilized to determine such fair value.

The following table presents information about our financial assets and liabilities that are measured at fair value on a recurring basis as of March 2, 2024 and December 2, 2023 , and indicates the fair value hierarchy of the valuation techniques utilized to determine such fair value.

Fair Value Measurements Using:

Marketable securities

$ 1,565  

$ 11,052 $ 11,052 $ - $ -

Foreign exchange contract assets

8,972 - 8,972 -

Interest rate swaps, cash flow hedge assets

11,830  

4,070 - 4,070 -

Foreign exchange contract liabilities

$ 7,208  

$ 3,911 $ - 3,911 $ -

Interest rate swaps, cash flow hedge liabilities

4,044 - 4,044 -

Interest rate swaps, fair value hedge liabilities

46,843  

40,698 - 40,698 -

Net investment hedge liabilities

67,740  

Contingent consideration liabilities

67,574 - 67,574 -

Contingent consideration liability

Fair Value Measurements Using:

Marketable securities

$ 4,013  

$ 19,314 $ 19,314 $ - $ -

Foreign exchange contract assets

10,282  

13,501 - 13,501 -

Interest rate swaps, cash flow hedge assets

3,632 - 3,632 -

Foreign exchange contract liabilities

$ 4,570  

$ 5,004 $ - $ 5,004 $ -

Interest rate swaps, cash flow hedge liabilities

Interest rate swaps, fair value hedge liabilities

42,542  

41,532 - 41,532

Net investment hedge liabilities

54,046  

72,589 - 72,589 -

Contingent consideration liabilities

The valuation of our contingent consideration liability related to the acquisitions of ZKLT and TissueSeal was $ 4,132 and $ 500 , respectively, as of 

September 2, 2023 . Adjustments to the fair value of contingent consideration are recorded to selling, general and administrative expenses in the Statement of Income. See Note 2 for further discussion regarding our acquisitions.

The following table provides details of the contingent consideration liabilities: 

1,370 - - 1,370

The valuation of our contingent consideration liability related to the acquisition of TissueSeal and was $ 500 as of March 2, 2024 .

The contingent consideration of $ 870 related to the acquisition of GSSI was paid in the first quarter of 2024.

Adjustments to the fair value of contingent consideration are recorded to selling, general and administrative expenses in the Statement of Income.

See Note 2 for further discussion regarding our acquisitions.

The following table provides details of the contingent consideration liabilities:

Balance at December 2, 2023

$ 1,977  

Fair value adjustment

Foreign currency translation adjustment

Balance at September 2, 2023

$ 4,632  

Contingent consideration payment

Balance at March 2, 2024

Balances Measured at Fair Value on a Nonrecurring Basis

We measure certain assets and liabilities at fair value on a nonrecurring basis.

These assets include intangible assets acquired in an acquisition.

The identified intangible assets of customer relationships, technology and tradenames acquired in connection with our acquisitions were measured using unobservable (Level 

These assets include intangible assets acquired in an acquisition.

The identified intangible assets of customer relationships, technology and tradenames acquired in connection with our acquisitions were measured using unobservable (Level 3 ) inputs.

The fair value of the intangible assets was calculated using either the income or cost approach.

Significant inputs include estimated revenue growth rates, gross margins, operating expenses, attrition rate, royalty rate and discount rate.  

See Note 

2  for further discussion regarding our acquisitions.

Significant inputs include estimated revenue growth rates, gross margins, operating expenses, attrition rate, royalty rate and discount rate.

See Note 2 for further discussion regarding our acquisitions.

Balances Disclosed at Fair Value

Long-term debt had an estimated fair value of $ 1,744,678  and $ 1,713,257 as of September 2, 2023 and December 3, 2022 , respectively.

Long-term debt had an estimated fair value of $ 1,804,124 and $ 1,785,199 as of March 2, 2024 and December 2, 2023 , respectively.

The fair value of long-term debt is based on quoted market prices for the same or similar issues or on the current rates offered for debt of similar maturities.

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Commitments and Contingencies

Environmental Matters  

We are involved in environmental investigations, clean-up activities and administrative proceedings related to environmental compliance matters at former and current operating facilities.  

We have also been identified as a potentially responsible party (“PRP”) under the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”) and/or similar state laws that impose liability for costs relating to the clean-up of contamination resulting from past spills, disposal or other release of hazardous substances associated with landfills and/or hazardous waste sites.

Environmental Matters

We are involved in environmental investigations, clean-up activities and administrative proceedings related to environmental compliance matters at former and current operating facilities.

As a PRP, we may be required to pay a share of the costs of investigation and clean-up of these sites.

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Our environmental, health and safety department monitors compliance with applicable laws on a global basis.

To the extent we can reasonably estimate the amount of our probable liabilities for environmental matters, we establish an undiscounted financial provision. We recorded liabilities of $ 5,329 and $ 5,754  as of September 2, 2023 and December 3, 2022 , respectively, for probable and reasonably estimable environmental remediation costs. Of the amount reserved, $ 2,561 and $ 2,789  as of September 2, 2023 and December 3, 2022 , respectively, is attributable to a facility we own in Simpsonville, South Carolina as a result of our Royal Adhesives acquisition that is a designated site under CERCLA.

To the extent we can reasonably estimate the amount of our probable liabilities for environmental matters, we establish an undiscounted financial provision.

We recorded liabilities of $ 4,581 and $ 5,034 as of March 2, 2024 and December 2, 2023 , respectively, for probable and reasonably estimable environmental remediation costs.

Of the amount reserved, $ 1,888 and $ 2,301 as of March 2, 2024 and December 2, 2023 , respectively, is attributable to a facility we own in Simpsonville, South Carolina as a result of our Royal Adhesives acquisition that is a designated site under CERCLA.

While uncertainties exist with respect to the amounts and timing of the ultimate environmental liabilities, based on currently available information, we have concluded that these matters, individually or in the aggregate, will not have a material adverse effect on our results of operations, financial condition or cash flow.

Other Legal Proceedings  

From time to time and in the ordinary course of business, we are a party to, or a target of, lawsuits, claims, investigations and proceedings, including product liability, personal injury, contract, patent and intellectual property, environmental, health and safety, tax and employment matters.

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Currently, this third party is defending and paying settlement amounts, under a reservation of rights, in most of the asbestos cases tendered to the third party.

In addition to the indemnification arrangements with third parties, we have insurance policies that generally provide coverage for asbestos liabilities, including defense costs. Historically, insurers have paid a significant portion of our defense costs and settlements in asbestos-related litigation.

However, certain of our insurers are insolvent. We have entered into cost-sharing agreements with our insurers that provide for the allocation of defense costs and settlements and judgments in asbestos-related lawsuits. These agreements require, among other things, that we fund a share of settlements and judgments allocable to years in which the responsible insurer is insolvent.

In addition to the indemnification arrangements with third parties, we have insurance policies that generally provide coverage for asbestos liabilities, including defense costs.

Historically, insurers have paid a significant portion of our defense costs and settlements in asbestos-related litigation.

However, certain of our insurers are insolvent.

We have entered into cost-sharing agreements with our insurers that provide for the allocation of defense costs and settlements and judgments in asbestos-related lawsuits.

These agreements require, among other things, that we fund a share of settlements and judgments allocable to years in which the responsible insurer is insolvent.

A summary of the number of and settlement amounts for asbestos-related lawsuits and claims is as follows:

Nine Months Ended

Three Months Ended

3 Years Ended

September 2, 2023

August 27, 2022

March 2, 2024

March 4, 2023

December 2, 2023

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Settlement amounts

$ 3,985  

$ 705 $ 30 $ 4,581

Insurance payments received or expected to be received

$ 2,307  

$ 519 $ 39 $ 2,629

We do not believe that it would be meaningful to disclose the aggregate number of asbestos-related lawsuits filed against us because relatively few of these lawsuits are known to involve exposure to asbestos-containing products that we manufactured.

Rather, we believe it is more meaningful to disclose the number of lawsuits that are settled and result in a payment to the plaintiff.

To the extent we can reasonably estimate the amount of our probable liabilities for pending asbestos-related claims, we establish a financial provision and a corresponding receivable for insurance recoveries. 

In February 2024, the named plaintiffs in Rouse et al.

Fuller Company et al.

filed a third amended complaint in their lawsuit against the Company and one of its subsidiaries, which was initiated in September 2022.

The suit is pending in the federal District of Minnesota and seeks damages arising from property damage attributed to alleged defects in grout sold by the Company or its affiliates.

The named plaintiffs seek to represent a class but have not yet moved for class certification.

The Company intends to vigorously defend itself against the claims outlined in this lawsuit.

As of March 2, 2024, we are unable to estimate any possible loss or range of possible losses and have not recorded a loss contingency for this matter.

Based on currently available information, we have concluded that the resolution of any pending matter, including asbestos-related litigation, individually or in the aggregate, will not have a material adverse effect on our results of operations, financial condition or cash flow.

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 operating income of each of our segments are regularly reviewed by our chief operating decision maker to make decisions about resources to be allocated to the segments and assess their performance. Segment operating income is identified as gross profit less SG&A expenses.

Revenue and operating income of each of our segments are regularly reviewed by our chief operating decision maker to make decisions about resources to be allocated to the segments and assess their performance.

Segment operating income is identified as gross profit less SG&A expenses.

Corporate expenses, other than those included in Corporate Unallocated, are allocated to each operating segment.

Consistent with our internal management reporting, Corporate Unallocated amounts include business acquisition and integration costs, organizational restructuring charges and project costs associated with implementing 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.

We have 

three reportable segments:

We have three reportable segments:

Hygiene, Health and Consumable Adhesives, Engineering Adhesives and Construction Adhesives.

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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.

The table below provides certain information regarding net revenue and operating income (loss) for each of our operating segments. 

The table below provides certain information regarding net revenue and operating income (loss) for each of our operating segments.

Three Months Ended

September 2, 2023

August 27, 2022

Income (Loss)

Hygiene, Health and Consumable Adhesives

$ 402,388  

$ 52,737  

$ 424,978  

$ 47,470  

Engineering Adhesives

365,862  

52,931  

378,264  

39,776  

Construction Adhesives

132,384  

137,988  

Total segment

$ 900,634  

$ 111,521  

$ 941,230  

$ 93,637  

Corporate Unallocated 1

( 20,202 )  

$ 900,634  

$ 91,319  

$ 941,230  

$ 87,954  

Nine Months Ended

September 2, 2023

August 27, 2022

March 2, 2024

March 4, 2023

Income (Loss)

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Hygiene, Health and Consumable Adhesives

$ 1,190,402  

$ 149,474  

$ 1,252,405  

$ 122,950  

$ 367,693 $ 46,877 $ 383,528 $ 45,146

Engineering Adhesives

1,063,009  

129,806  

1,137,587  

115,266  

328,766 34,834 333,067 32,475

Construction Adhesives

354,644  

400,977  

22,032  

113,960 ( 2,619 ) 92,588 ( 9,634 )

Total segment

$ 2,608,055  

$ 281,469  

$ 2,790,969  

$ 260,248  

$ 810,419 $ 79,092 $ 809,183 $ 67,987

Corporate Unallocated 1

( 39,734 )  

$ 2,608,055  

$ 241,735  

$ 2,790,969  

$ 232,468  

1 Consistent with our internal management reporting, Corporate Unallocated amounts in the tables above include charges that are not allocated to the Company’s reportable segments. 

- ( 12,217 ) - ( 7,720 )

$ 810,419 $ 66,875 $ 809,183 $ 60,267

1 Consistent with our internal management reporting, Corporate Unallocated amounts in the tables above include charges that are not allocated to the Company’s reportable segments.

The table below provides a reconciliation of operating income to income before income taxes and income from equity method investments:

Three Months Ended

Nine Months Ended

Operating income

$ 91,319  

$ 87,954  

$ 241,735  

$ 232,468  

$ 66,875 $ 60,267

Other income, net

12,701  

Interest expense

( 35,105 )  

( 23,450 )  

( 101,305 )  

( 31,901 ) ( 33,069 )

Interest income

Income before income taxes and income from equity method investments

$ 58,897  

$ 73,202  

$ 147,920  

$ 189,864  

$ 37,782 $ 30,469

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 September 2, 2023

Hygiene, Health

and Consumable

$ 227,947  

$ 147,115  

$ 100,510  

$ 475,572  

127,080  

109,151  

23,443  

259,674  

47,361  

109,596  

165,388  

$ 402,388  

$ 365,862  

$ 132,384  

$ 900,634  

Three Months Ended August 27, 2022

Hygiene, Health

and Consumable

$ 261,751  

$ 165,398  

$ 106,169  

$ 533,318  

114,186  

111,734  

23,519  

249,439  

49,041  

101,132  

158,473  

$ 424,978  

$ 378,264  

$ 137,988  

$ 941,230  

Nine Months Ended September 2, 2023

Three Months Ended March 2, 2024

Hygiene, Health

and Consumable

$ 688,890  

$ 429,824  

$ 273,116  

$ 1,391,830  

348,876  

341,710  

57,938  

748,524  

152,636  

291,475  

23,590  

467,701  

$ 1,190,402  

$ 1,063,009  

$ 354,644  

$ 2,608,055  

Nine Months Ended August 27, 2022

$ 216,306 $ 133,051 $ 82,532 $ 431,889

103,889 105,132 24,985 234,006

47,498 90,583 6,443 144,524

$ 367,693 $ 328,766 $ 113,960 $ 810,419

Three Months Ended March 4, 2023

Hygiene, Health

and Consumable

$ 737,689  

$ 465,285  

$ 321,167  

$ 1,524,141  

351,983  

361,485  

58,450  

771,918  

162,733  

310,817  

21,360  

494,910  

$ 1,252,405  

$ 1,137,587  

$ 400,977  

$ 2,790,969  

$ 223,618 $ 133,470 $ 70,964 $ 428,052

107,072 113,360 14,578 235,010

52,838 86,237 7,046 146,121

$ 383,528 $ 333,067 $ 92,588 $ 809,183

Subsequent Event

On September 8, 2023, we completed the acquisition of certain assets of the Sanglier Group ("Sanglier") for a purchase price of 14,000 British pound sterling, or approximately $ 17,500 .

Sanglier, headquartered in the United Kingdom, is a manufacturer and filler of sprayable industrial adhesives.

The acquisition will be included in our Construction Adhesives operating segment.

On March 4, 2024, we entered into a Refinancing and Incremental Amendment (the “Refinancing and Incremental Amendment”), which amends the Second Amended and Restated Credit Agreement dated as of February 15, 2023, as previously amended.

Pursuant to the Refinancing and Incremental Amendment, (i) the existing Term B loans under the Credit Agreement were refinanced by “Refinancing Loans” (as defined in the Credit Agreement) in the principal amount of $ 794,000 (the “Amended TLB”), (ii) certain lenders party to the Refinancing and Incremental Amendment made additional Term B loans to the Company in the principal amount of $ 200,000 , thereby increasing the aggregate principal amount of the Amended TLB to $ 994,000 , and (iii) the interest rate margins applicable to the Amended TLB were decreased by 25 basis points ( 0.25 % per annum) to 200 basis points for SOFR rate loans and 100 basis points for prime rate loans.

The commitment fee rates and interest rates applicable to the revolving credit facility and the term loan A facility remain unchanged.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements