FULLER H B CO 10-Q

Item 1. Financial Statements H.B. FULLER COMPANY AND SUBSIDIARIES Consolidated Statements of Income (In thousands, except per share amounts) (Unaudited) Three Months Ended March 2, March 4, 2024 2023 Net revenue $ 810,419 $ 809,183 Cost of sales ( 571,182 ) ( 594,374 ) Gross profit 239,237 214,809 Selling, general and administrative expenses ( 172,362 ) ( 154,542 ) Other income, net 1,501 2,604 Interest expense ( 31,901 ) ( 33,069 ) Interest income 1,307 667 Income before income taxes and income from equity method investments 37,782 30,469 Income taxes ( 7,814 ) ( 9,733 ) Income from equity method investments 1,044 1,180 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. Fuller $ 30,991 $ 21,889 Earnings per share attributable to H.B. Fuller common stockholders: Basic $ 0.57 $ 0.40 Diluted $ 0.55 $ 0.39 Weighted-average common shares outstanding: Basic 54,702 54,174 Diluted 56,573 55,919 Dividends declared per common share $ 0.205 $ 0.190 See accompanying Notes to Unaudited Consolidated Financial Statements. 3 Table of Contents H.B. FULLER COMPANY AND SUBSIDIARIES Consolidated Statements of Comprehensive Income (In thousands) (Unaudited) Three Months Ended March 2, March 4, 2024 2023 Net income including non-controlling interest $ 31,012 $ 21,916 Other comprehensive (loss) income Foreign currency translation ( 19,362 ) ( 3,636 ) Defined benefit pension plans adjustment, net of tax 2,119 851 Interest rate swaps, net of tax ( 2,465 ) 8,335 Net investment hedges, net of tax 3,790 ( 299 ) Other comprehensive (loss) income ( 15,918 ) 5,251 Comprehensive income 15,094 27,167 Less: Comprehensive income attributable to non-controlling interest 12 37 Comprehensive income attributable to H.B. Fuller $ 15,082 $ 27,130 See accompanying Notes to Unaudited Consolidated Financial Statements. 4 Table of Contents H.B. FULLER COMPANY AND SUBSIDIARIES Consolidated Balance Sheets (In thousands, except share and per share amounts) (Unaudited) March 2, December 2, 2024 2023 Assets Current assets: Cash and cash equivalents $ 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 Inventories 490,179 442,040 Other current assets 115,731 112,678 Total current assets 1,296,848 1,312,103 Property, plant and equipment 1,772,088 1,755,035 Accumulated depreciation ( 949,189 ) ( 930,380 ) Property, plant and equipment, net 822,899 824,655 Goodwill 1,486,784 1,486,512 Other intangibles, net 702,307 729,140 Other assets 373,135 371,165 Total assets $ 4,681,973 $ 4,723,575 Liabilities, non-controlling interest and total equity Current liabilities Notes payable $ 1,544 $ 1,841 Trade payables 460,649 439,700 Accrued compensation 63,116 95,680 Income taxes payable 49,516 47,688 Other accrued expenses 78,352 107,902 Total current liabilities 653,177 692,811 Long-term debt 1,829,253 1,836,590 Accrued pension liabilities 50,529 50,189 Other liabilities 380,769 388,072 Total liabilities $ 2,913,728 $ 2,967,662 Commitments and contingencies (Note 12) Equity H.B. Fuller stockholders' equity: 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 309,624 301,485 Retained earnings 1,862,252 1,842,507 Accumulated other comprehensive loss ( 458,789 ) ( 442,880 ) Total H.B. Fuller stockholders' equity 1,767,525 1,755,205 Non-controlling interest 720 708 Total equity 1,768,245 1,755,913 Total liabilities, non-controlling interest and total equity $ 4,681,973 $ 4,723,575 See accompanying Notes to Unaudited Consolidated Financial Statements. 5 Table of Contents H.B. FULLER COMPANY AND SUBSIDIARIES Consolidated Statements of Total Equity (In thousands) (Unaudited) H.B. Fuller Company Shareholders Accumulated Additional Other Common Paid-in Retained Comprehensive Non-Controlling Stock Capital Earnings Income (Loss) Interest Total 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 Dividends - - ( 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 $ 54,438 $ 309,624 $ 1,862,252 $ ( 458,789 ) $ 720 $ 1,768,245 H.B. Fuller Company Shareholders Accumulated Additional Other Common Paid-in Retained Comprehensive Non-Controlling Stock Capital Earnings Income (Loss) Interest Total 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 Dividends - - ( 10,305 ) - - ( 10,305 ) Stock option exercises 76 3,520 - - - 3,596 Share-based compensation plans and other, net 102 5,221 - - - 5,323 Repurchases of common stock ( 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. 6 Table of Contents H.B. FULLER COMPANY AND SUBSIDIARIES Consolidated Statements of Cash Flows (In thousands) (Unaudited) 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: Depreciation 23,168 19,248 Amortization 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 - 2,689 Loss on fair value adjustment on contingent consideration liability - 139 Gain on sale or disposal of assets ( 86 ) ( 4 ) Share-based compensation 5,088 4,527 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 Inventories ( 50,189 ) ( 33,800 ) Other assets ( 9,064 ) ( 28,947 ) Trade payables 27,640 8,996 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 ) Other 791 15,827 Net cash provided by operating activities 47,351 5,545 Cash flows from investing activities: Purchased property, plant and equipment ( 43,293 ) ( 47,604 ) Purchased businesses, net of cash acquired - ( 16,723 ) Proceeds from sale of property, plant and equipment 568 611 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 - ( 10,214 ) Net payment of notes payable ( 276 ) ( 881 ) Dividends paid ( 11,151 ) ( 10,222 ) Proceeds from stock options exercised 8,977 3,595 Repurchases of common stock ( 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. 7 Table of Contents H.B. FULLER COMPANY AND SUBSIDIARIES Notes to Consolidated Financial Statements (Amounts in thousands, except per share amounts) (Unaudited) Note 1: Basis of Presentation Overview The accompanying unaudited interim Consolidated Financial Statements of H.B. Fuller Company and Subsidiaries have been prepared in accordance with U.S. 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. generally accepted accounting principles. In our opinion, the unaudited interim Consolidated Financial Statements reflect all adjustments of a normal recurring nature considered necessary for the fair presentation of the results for the periods presented. Operating results for interim periods are not necessarily indicative of results that may be expected for the fiscal year as a whole. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses and related disclosures at the date of the financial statements and during the reporting period. 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 2, 2023 as filed with the Securities and Exchange Commission. New Accounting Pronouncements 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 ): Disclosure of Supplier Finance Program Obligations. 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. 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. 8 Table of Contents Recently issued accounting standards or pronouncements not disclosed above have been excluded as they are not relevant to the company. Note 2: Acquisitions 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 $ 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 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. 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 $ 14,496 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 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. 9 Table of Contents 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. 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 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. Lemtapes Oy 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 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. Note 3: 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 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 March 2, 2024 March 4, 2023 Cost of sales $ 2,915 $ 2,301 Selling, general and administrative 1,165 625 $ 4,080 $ 2,926 The restructuring charges are all recorded in Corporate Unallocated for segment reporting purposes. A summary of the restructuring liability is presented below: Employee-Related Asset-Related Other Total Balance at December 3, 2022 $ 57 $ - $ - $ 57 Expenses incurred 22,731 1,369 487 24,587 Non-cash charges - ( 1,369 ) ( 453 ) ( 1,822 ) Cash payments ( 9,802 ) - ( 34 ) ( 9,836 ) Foreign currency translation ( 1,263 ) - - ( 1,263 ) Balance at December 2, 2023 $ 11,723 $ - $ - $ 11,723 Expenses incurred 1,611 2,417 52 4,080 Non-cash charges - ( 2,417 ) ( 41 ) ( 2,458 ) Cash payments ( 4,118 ) - ( 11 ) ( 4,129 ) Foreign currency translation ( 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. 10 Table of Contents Note 4: Inventories The composition of inventories is as follows: March 2, December 2, 2024 2023 Raw materials $ 230,044 $ 206,140 Finished goods 260,135 235,900 Total inventories $ 490,179 $ 442,040 Note 5: Goodwill and Other Intangible Assets The goodwill activity by reportable segment for the three months ended March 2, 2024 is presented below: Hygiene, Health and Consumable Engineering Construction Adhesives Adhesives Adhesives Total Balance at December 2, 2023 $ 402,598 $ 651,145 $ 432,769 $ 1,486,512 Acquisitions $ 551 $ - $ 3,006 3,557 Foreign currency translation effect $ ( 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: March 2, 2024 Purchased Technology Customer Amortizable Intangible Assets and Patents Relationships Trade Names Other Total Original cost $ 136,904 $ 973,481 $ 58,205 $ 9,885 $ 1,178,475 Accumulated amortization ( 54,091 ) ( 391,506 ) ( 24,815 ) ( 6,229 ) ( 476,641 ) Net identifiable intangibles $ 82,813 $ 581,975 $ 33,390 $ 3,656 $ 701,834 December 2, 2023 Purchased Technology Customer Amortizable Intangible Assets and Patents Relationships Trade Names Other Total Original cost $ 144,763 $ 986,470 $ 58,484 $ 10,911 $ 1,200,628 Accumulated amortization ( 59,631 ) ( 382,220 ) ( 23,099 ) ( 7,012 ) ( 471,962 ) Net identifiable intangibles $ 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. Table of Contents Estimated aggregate amortization expense based on the current carrying value of amortizable intangible assets for the next five fiscal years is as follows: Remainder Fiscal Year 2024 2025 2026 2027 2028 Thereafter Amortization expense $ 55,446 $ 76,531 $ 69,810 $ 66,495 $ 66,188 $ 367,364 11 Table of Contents 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. Note 6: Components of Net Periodic Benefit related to Pension and Other Postretirement Benefit Plans Three Months Ended March 2, 2024 and March 4, 2023 Other Pension Benefits Postretirement U.S. Plans Non-U.S. Plans Benefits Net periodic (benefit) cost: 2024 2023 2024 2023 2024 2023 Service cost $ - $ - $ 350 $ 413 $ - $ - Interest cost 3,464 3,475 1,569 1,410 291 301 Expected return on assets ( 6,555 ) ( 7,206 ) ( 1,637 ) ( 1,730 ) ( 2,727 ) ( 2,465 ) Amortization: Prior service cost - - 16 15 - - Actuarial loss 1,159 635 513 491 - - Net periodic (benefit) cost $ ( 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. Note 7: Accumulated Other Comprehensive Income (Loss) The following table provides details of total comprehensive income (loss): Three Months Ended March 2, 2024 Three Months Ended March 4, 2023 Non- Non- controlling controlling H.B. Fuller Stockholders Interest H.B. Fuller Stockholders Interest Pre-tax Tax Net Net Pre-tax Tax Net Net Net income attributable to H.B. Fuller and non-controlling interest $ 30,991 $ 21 $ 21,889 $ 27 Foreign currency translation¹ $ ( 19,353 ) $ - ( 19,353 ) ( 9 ) $ ( 3,646 ) $ - ( 3,646 ) 10 Defined benefit pension plans adjustment² 2,821 ( 702 ) 2,119 - 1,141 ( 290 ) 851 - Interest rate swaps³ ( 3,276 ) 811 ( 2,465 ) - 11,055 ( 2,720 ) 8,335 - Net investment hedges³ 5,025 ( 1,235 ) 3,790 - ( 397 ) 98 ( 299 ) - Other comprehensive (loss) income $ ( 14,783 ) $ ( 1,126 ) $ ( 15,909 ) $ ( 9 ) $ 8,153 $ ( 2,912 ) $ 5,241 $ 10 Comprehensive income $ 15,082 $ 12 $ 27,130 $ 37 ¹ Income taxes are not provided for foreign currency translation relating to permanent investments in international subsidiaries. ² Loss reclassified from accumulated other comprehensive income ("AOCI") into earnings as part of net periodic cost related to pension and other postretirement benefit plans is reported in cost of sales and SG&A expense. ³ Income (loss) reclassified from AOCI into earnings is reported in other income, net. 12 Table of Contents The components of accumulated other comprehensive loss are as follows: March 2, 2024 Non- H.B. Fuller controlling Total Stockholders Interest Foreign currency translation adjustment $ ( 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 ) 2,007 2,007 - Net investment hedges, net of taxes of $ 16,509 ( 51,060 ) ( 51,060 ) - Reclassification of AOCI tax effects ( 18,341 ) ( 18,341 ) - Accumulated other comprehensive loss $ ( 458,824 ) $ ( 458,789 ) $ ( 35 ) December 2, 2023 Non- H.B. Fuller controlling Total Stockholders Interest Foreign currency translation adjustment $ ( 246,736 ) $ ( 246,692 ) $ ( 44 ) Defined benefit pension plans adjustment, net of taxes of $ 66,982 ( 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 ) - Accumulated other comprehensive loss $ ( 442,924 ) $ ( 442,880 ) $ ( 44 ) Note 8: Income Taxes 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. 13 Table of Contents Note 9: Earnings Per Share A reconciliation of the common share components for the basic and diluted earnings per share calculations is as follows: Three Months Ended March 2, March 4, (Shares in thousands) 2024 2023 Weighted-average common shares - basic 54,702 54,174 Equivalent shares from share-based compensations plans 1,871 1,745 Weighted-average common and common equivalent shares diluted 56,573 55,919 Basic earnings per share is calculated by dividing net income attributable to H.B. Fuller by the weighted-average number of common shares outstanding during the applicable period. Diluted earnings per share is based upon the weighted-average number of common and common equivalent shares outstanding during the applicable period. The difference between basic and diluted earnings per share is attributable to share-based compensation awards. We use the treasury stock method to calculate the effect of outstanding shares, which computes total employee proceeds as the sum of (a) the amount the employee must pay upon exercise of the award and (b) the amount of unearned share-based compensation costs attributed to future services. 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 1,138,264 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. 14 Table of Contents Note 10: Financial Instruments Overview 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 do not hold derivative financial instruments of a speculative nature or for trading purposes. We record derivatives as assets and liabilities on the balance sheet at fair value. Changes in fair value are recognized immediately in earnings unless the derivative qualifies and is designated as a hedge. Cash flows from derivatives are classified in the Consolidated Statement of Cash Flows in the same category as the cash flows from the items subject to designated hedge or undesignated (economic) hedge relationships. We evaluate hedge effectiveness at inception and on an ongoing basis. If a derivative is no longer expected to be effective, hedge accounting is discontinued. Hedge ineffectiveness, if any, is recorded in earnings. We are exposed to credit risk in the event of nonperformance of counterparties for foreign currency forward exchange contracts and interest rate swap agreements. We select investment-grade multinational banks and financial institutions as counterparties for derivative transactions and monitor the credit quality of each of these banks on a periodic basis as warranted. We do not anticipate nonperformance by any of these counterparties, and valuation allowances, if any, are de minimis. 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 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 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 $ 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 (losses) gains recognized in Comprehensive Income related to derivative instruments designated as cash flow hedges are as follows: Three Months Ended March 2, 2024 March 4, 2023 Interest rate swap contracts ( 3,276 ) 11,055 15 Table of Contents 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. Changes in the fair value of a hypothetically perfect swap with terms that match the critical terms of our $ 300,000 fixed rate Public Notes are compared with the change in the fair value of the swaps. 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 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 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. 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 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. 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. 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 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 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 March 2, 2024 , there were no significant concentrations of credit risk. 16 Table of Contents Note 11: Fair Value Measurements Overview Estimates of fair value for financial assets and liabilities are based on the framework established in the accounting guidance for fair value measurements. The framework defines fair value, provides guidance for measuring fair value and requires certain disclosures. The framework discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow) and the cost approach (cost to replace the service capacity of an asset or replacement cost). The framework utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels: ● Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities. ● Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. 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. ● Level 3: 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 March 2, 2024 and December 2, 2023 , and indicates the fair value hierarchy of the valuation techniques utilized to determine such fair value. March 2, Fair Value Measurements Using: Description 2024 Level 1 Level 2 Level 3 Assets: Marketable securities $ 11,052 $ 11,052 $ - $ - Foreign exchange contract assets 8,972 - 8,972 - Interest rate swaps, cash flow hedge assets 4,070 - 4,070 - Liabilities: Foreign exchange contract liabilities $ 3,911 $ - 3,911 $ - Interest rate swaps, cash flow hedge liabilities 4,044 - 4,044 - Interest rate swaps, fair value hedge liabilities 40,698 - 40,698 - Net investment hedge liabilities 67,574 - 67,574 - Contingent consideration liability 500 - - 500 December 2, Fair Value Measurements Using: Description 2023 Level 1 Level 2 Level 3 Assets: Marketable securities $ 19,314 $ 19,314 $ - $ - Foreign exchange contract assets 13,501 - 13,501 - Interest rate swaps, cash flow hedge assets 3,632 - 3,632 - Liabilities: Foreign exchange contract liabilities $ 5,004 $ - $ 5,004 $ - Interest rate swaps, cash flow hedge liabilities 63 - 63 Interest rate swaps, fair value hedge liabilities 41,532 - 41,532 Net investment hedge liabilities 72,589 - 72,589 - Contingent consideration liabilities 1,370 - - 1,370 17 Table of Contents 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: Amounts Balance at December 2, 2023 $ 1,370 Contingent consideration payment ( 870 ) Balance at March 2, 2024 $ 500 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 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. Balances Disclosed at Fair Value 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. The estimated fair value of these long-term obligations is not necessarily indicative of the amount that would be realized in a current market exchange. Note 12: 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. As a PRP, we may be required to pay a share of the costs of investigation and clean-up of these sites. We are subject to similar laws in some of the countries where current and former facilities are located. 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 $ 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. 18 Table of Contents 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. While we are unable to predict the outcome of these matters, we have concluded, based upon currently available information, that the ultimate resolution of any pending matter, individually or in the aggregate, including the asbestos litigation described in the following paragraphs, will not have a material adverse effect on our results of operations, financial condition or cash flow. We have been named as a defendant in lawsuits in which plaintiffs have alleged injury due to products containing asbestos manufactured more than 35 years ago. The plaintiffs generally bring these lawsuits against multiple defendants and seek damages (both actual and punitive) in very large amounts. In many cases, plaintiffs are unable to demonstrate that they have suffered any compensable injuries or that the injuries suffered were the result of exposure to products manufactured by us. We are typically dismissed as a defendant in such cases without payment. If the plaintiff presents evidence indicating that compensable injury occurred as a result of exposure to our products, the case is generally settled for an amount that reflects the seriousness of the injury, the length, intensity and character of exposure to products containing asbestos, the number and solvency of other defendants in the case, and the jurisdiction in which the case has been brought. A significant portion of the defense costs and settlements in asbestos-related litigation is paid by third parties, including indemnification pursuant to the provisions of a 1976 agreement under which we acquired a business from a third party. 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. A summary of the number of and settlement amounts for asbestos-related lawsuits and claims is as follows: Three Months Ended 3 Years Ended March 2, 2024 March 4, 2023 December 2, 2023 Lawsuits and claims settled 4 2 18 Settlement amounts $ 705 $ 30 $ 4,581 Insurance payments received or expected to be received $ 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. v. H.B. 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. 19 Table of Contents 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. Note 13: Segments 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. 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: Hygiene, Health and Consumable Adhesives, Engineering Adhesives and Construction Adhesives. The business components within each operating segment are managed to maximize the results of the overall operating segment rather than the results of any individual business component of the operating segment. Results of individual components of each operating segment are subject to numerous allocations of segment-wide costs that may or may not have been focused on that particular component for a particular reporting period. 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. Three Months Ended March 2, 2024 March 4, 2023 Net Operating Net Operating Revenue Income (Loss) Revenue Income (Loss) Hygiene, Health and Consumable Adhesives $ 367,693 $ 46,877 $ 383,528 $ 45,146 Engineering Adhesives 328,766 34,834 333,067 32,475 Construction Adhesives 113,960 ( 2,619 ) 92,588 ( 9,634 ) Total segment $ 810,419 $ 79,092 $ 809,183 $ 67,987 Corporate Unallocated 1 - ( 12,217 ) - ( 7,720 ) Total $ 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 March 2, March 4, 2024 2023 Operating income $ 66,875 $ 60,267 Other income, net 1,501 2,604 Interest expense ( 31,901 ) ( 33,069 ) Interest income 1,307 667 Income before income taxes and income from equity method investments $ 37,782 $ 30,469 20 Table of Contents 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 March 2, 2024 Hygiene, Health and Consumable Engineering Construction Adhesives Adhesives Adhesives Total Americas $ 216,306 $ 133,051 $ 82,532 $ 431,889 EIMEA 103,889 105,132 24,985 234,006 Asia Pacific 47,498 90,583 6,443 144,524 Total $ 367,693 $ 328,766 $ 113,960 $ 810,419 Three Months Ended March 4, 2023 Hygiene, Health and Consumable Engineering Construction Adhesives Adhesives Adhesives Total Americas $ 223,618 $ 133,470 $ 70,964 $ 428,052 EIMEA 107,072 113,360 14,578 235,010 Asia Pacific 52,838 86,237 7,046 146,121 Total $ 383,528 $ 333,067 $ 92,588 $ 809,183 Note 14: Subsequent Event 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. 21 Table of Contents