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Item 2. Management’s Discussion and Analysis

2026-03-26 compared with 2025-09-25 · 180 added, 231 removed, 162 unchanged (72% of the section changed)

1 unchanged sentence

The Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) should be read in conjunction with the MD&A included in our Annual Report on Form 10-K for the year ended November 29, 2025, for important background information related to our business.

Net revenue in the third quarter of 2025 decreased 2.8 percent from the third quarter of 2024.

The decrease was due to a 2.9 percent decrease in acquisitions/divestitures, and a 1.9 percent decrease due to sales volume, partially offset by a 1.0 percent increase due to positive currency effects compared to the third quarter of 2024 and a 1.0 percent increase due to pricing.

The positive currency effect was primarily driven by a stronger Euro, British pound, and Egyptian pound, partially offset by a weaker T urkish lira c ompared to the U.S.

Gross profit margin increased 200 basis points primarily due to the higher product pricing, lower distribution costs, and the impact of acquisitions/divestitures.

Net revenue in the first nine months of 2025 decreased 2.5 percent from the first nine months of 2024 .

The decrease was due to a 1.8 percent decrease in acquisitions/divestitures, a 1.1 percent decrease due to negative currency effects compared to the first nine months of 2024 and a 0.2 percent decrease due to sales volume, partially offset by a 0.6 increase due to pricing.

The negative currency effect was primarily driven by a weaker Brazilian real, Egyptian pound, Mexican peso and Turkish lira, partially offset by a stronger Euro compared to the U.S.

Gross profit margin increased 90 basis points due to higher pricing and the impact of acquisitions/divestitures.

Net income attributable to H.B.

Fuller in the third quarter of 2025 was $67.2 million compared to $55.4 million in the third quarter of 2024 .

Diluted earnings per share for the third quarter of 2025 was $1.22 per share compared to $0.98 per share for the third quarter of 2024 .

Net revenue in the first quarter of 2026 decreased 2.3 percent from the first quarter of 2025.

The decrease was due to a 7.2 percent decrease due to sales volume, partially offset by a 3.6 percent increase due to positive currency effects, a 0.7 percent increase due to acquisitions and a 0.6 percent increase due to pricing compared to the first quarter of 2025.

The positive currency effect was primarily driven by a stronger Euro, Chinese renminbi, British pound, Brazilian real, Mexican peso and Australian dollar partially offset by a weaker T urkish lira compared to the U.S.

Gross profit margin increased 180 basis points primarily due to higher product pricing, lower raw material costs, the impact of acquisitions and restructuring actions.

Net income attributable to H.B.

Fuller in the first nine months of 2025 was $122.2 million compared to $137.6 million in the first nine months of 2024 .

Diluted earnings per share for the first nine months of 2025 was $2.21 per share compared to $2.43 per share for the first nine months of 2024 .

Fuller in the first quarter of 2026 was $21.0 million compared to $13.2 million in the first quarter of 2025 .

Diluted earnings per share for the first quarter of 2026 was $0.38 per share compared to $0.24 per share for the first quarter of 2025 .

Adjusted EBITDA in the first three months of 2026 increased 3.8 percent from the first three months of 2025 , primarily driven by higher net income and depreciation and amortization expense.

Restructuring Plans

During th e second and third quarters of 2023, the Company approved restructuring plans (the “Plans”) related to organizational changes and other actions to optimize operations and integrate acquired businesses.

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.

In implementing the Plans, the Company currently expects to incur costs of approximately $85.0 million to $90.0 million ($58.0 million to $61.4 million after tax), which include (i) cash expenditures of approximately $51.0 million to $52.0 million ($34.8 million to $35.5 million after tax) for severance and related employee costs globally and (ii) other restructuring costs related to the streamlining of processes and the payment of anticipated income taxes in certain jurisdictions related to the Plans.

We have incurred costs of $69.7 million under the Plans as of August 30, 2025.

The Plans were implemented in the second quarter of fiscal year 2023 and are currently expected to be completed during fiscal year 2026.

The remaining restructuring costs will be spread across the next several fiscal quarters as the measures are implemented.

We have incurred costs of $83.2 million under the Plans as of February 28, 2026 .

Remaining cash payments will continue into fiscal year 2026.

During the first quarter of 2026, the Company approved other restructuring actions related to global footprint optimization.

In implementing the other restructuring actions, the Company currently expects to incur costs of approximately $10.2 million to $12.2 million ($7.5 million to $9.0 million after tax), which include (i) cash expenditures of approximately $5.8 million to $6.8 million ($4.3 million to $5.0 million after tax) for severance and related employee costs globally and (ii) other restructuring costs related to optimizing the Company’s footprint and the payment of anticipated income taxes in certain jurisdictions related to the other restructuring actions.

We have incurred costs of $4.8 million under the other restructuring actions as of February 28, 2026.

The other restructuring actions began to be implemented in the first quarter of 2026 and are currently expected to be completed during fiscal year 2028.

Restructuring costs are expected to be incurred over the next several fiscal quarters as the measures are implemented with the majority of the charges recognized and cash payments occurring in fiscal 2026 and 2027.

Results of Operations

Three Months Ended

Nine Months Ended

($ in millions)

We review variances in net revenue in terms of changes related to sales volume and product pricing (referred to as organic revenue growth), business acquisitions and divestitures (“M&A”) and changes in foreign currency exchange rates.

The following table shows the net revenue variance analysis for the third quarter and first nine months of 2025 compared to the third quarter and first nine months of 2024:

We review variances in net revenue in terms of changes related to sales volume and product pricing (referred to as organic revenue growth), business acquisitions/divestitures (“M&A”) and changes in foreign currency exchange rates.

The following table shows the net revenue variance analysis for the first quarter of 2026 compared to the first quarter of 2025:

Three Months Ended

Nine Months Ended

August 30, 2025 vs.

August 31, 2024

August 30, 2025 vs.

August 31, 2024

Organic growth

Organic revenue decreased 0.9 percent in the third quarter of 2025 compared to the third quarter of 2024 driven by a 1.9 percent decrease in sales volume, partially offset by a 1.0 percent increase in product pricing .

The 2.9 percent decrease from M&A was due to the sale of our North American Flooring business ( “ NA Flooring ” ), discussed further in Operating Segment Results below, net of acquisitions that occurred in the last twelve months.

The positive 1.0 percent foreign currency impact was primarily driven by a stronger Euro, British pound, and Egyptian pound, partially offset by a weaker T urkish lira c ompared to the U.S.

Organic revenue increased 0.4 percent in the first nine months of 2025 compared to the first nine months of 2024 driven by a 0.6 percent increase in product pricing, partially offset by a 0.2 percent decrease in sales volume.

T he 1.8 percent decrease from M&A was due to the sale of NA Flooring, net of acquisitions that occurred in the last twelve months.

The negative 1.1 percent foreign currency impact was primarily driven by a weaker Brazilian real, Egyptian pound, Mexican peso and Turkish lira, partially offset by a stronger Euro compared to the U.S.

February 28, 2026 vs.

March 1, 2025

Organic revenue growth

Net revenue growth

Organic revenue decreased 6.6 percent in the first quarter of 2026 compared to the first quarter of 2025 and consisted of a 10.1 percent decrease in Hygiene, Health and Consumable Adhesives, a 5.1 percent decrease in Building Adhesive Solutions and a 2.0 percent decrease in Engineering Adhesives.

The overall decrease was driven by a 7.2 percent decrease in sales volume, partially offset by a 0.6 percent increase in product pricing .

The 0.7 percent increase from M&A was due to the acquisition of GEM, Medifill, ND Industries Taiwan and ND Industries Turkey, discussed further in Operating Segment Results below.

The positive 3.6 percent foreign currency impact was primarily driven by a stronger Euro, Chinese renminbi, British pound, Brazilian real, Mexican peso and Australian dollar, partially offset by a weaker Turkish lira compared to the U.S.

Cost of sales:

Three Months Ended

Nine Months Ended

($ in millions)

1 unchanged sentence

Percent of net revenue

Cost of sales as a percentage of net revenue in the third quarter of 2025 compared to the third quarter of 2024 decreased 200 basis points.

Raw material cost as a percentage of net revenue decreased 130 basis points in 2025 compared to 2024 primarily due to higher product pricing and the impact of acquisitions/divestitures.

Other manufacturing costs as a percentage of net revenue decreased 70 basis points in 2025 compared to 2024 due to lower manufacturing and distribution costs, and the impact of acquisitions/divestitures.

Cost of sales as a percentage of net revenue in the first nine months of 2025 compared to the first nine months of 2024 decreased 90 basis points.

Raw material cost as a percentage of net revenue decre ased 50 basis points in 2025 compared to 2024 .

Other manufacturing costs as a percentage of net revenue decreased 40 basis points in 2025 compared to 2024 .

Cost of sales as a percentage of net revenue in the first quarter of 2026 compared to the first quarter of 2025 decreased 180 basis points.

Raw material cost as a percentage of net revenue decreased 250 basis points in 2026 compared to 2025 primarily due to higher product pricing, lower raw material costs and the impact of acquisitions.

Other manufacturing costs as a percentage of net revenue increased 70 basis points in 2026 compared to 2025 due to higher manufacturing and distribution costs and the impact of acquisitions.

Gross profit:

Three Months Ended

Nine Months Ended

($ in millions)

Percent of net revenue

Gross profit in the third quarter of 2025 increased 3.4 percent and gross profit margin increased 200 basis points compared to the third quarter of 2024 .

The increase in gross profit margin was due to due to higher product pricing and the impact of acquisitions/divestitures.

Gross profit in the first nine months of 2025 increased 0.2 percent and gross profit margin increased 90 basis points compared to the first nine months of 2024 .

The increase in gross profit margin was due to higher product pricing and the impact of acquisitions/divestitures.

Gross profit in the first quarter of 2026 increased 3.9 percent and gross profit margin increased 180 basis points compared to the first quarter of 2025 .

The increase in gross profit margin was due to higher product pricing, lower raw material costs and the impact of acquisitions.

Selling, general and administrative (SG&A) expenses:

Three Months Ended

Nine Months Ended

($ in millions)

Percent of net revenue

SG&A expenses for the third quarter of 2025 compared to the third quarter of 2024 increased 90 basis points as a percentage of net reve nue.

The increase was due to higher compensation costs and the impact of acquisitions/divestitures .

SG&A expenses for the first nine months of 2025 compared to the first nine months of 2024 increased 110 basis points as a percentage of net reve nue.

The increase was due to higher compensation costs and the impact of acquisitions/divestitures .

SG&A expenses for the first quarter of 2026 compared to the first quarter of 2025 increased 100 basis points as a percentage of net revenue.

The increase was due to lower revenue and the impact of acquisitions.

Other income, net:

Three Months Ended

Nine Months Ended

($ in millions)

Other income, net

Other income, net in the third quarter of 2025 included $5.7 million of net defined benefit pension benefits and $0.1 million of other income, partially offset by a $0.5 million of currency transaction losses.

Other income, net in the third quarter of 2024 included $4.0 million of net defined benefit pension benefits, and $0.3 million of currency transaction gains, partially offset by a $2.0 million loss on equity investment and $0.2 million of other expense.

Other income, net in the first nine months of 2025 included $17.1 million of net defined benefit pension benefits and $1.5 million of currency transaction gains, partially offset by a $1.5 million loss on the sale of our NA Flooring business and $1.4 million of other expense.

Other income, net in the first nine months of 2024 included $11.9 million of net defined benefit pension benefits, partially offset by $2.0 million of currency transaction losses, a $2.0 million loss on equity investment and $0.6 million of other expense.

Other income, net in the first quarter of 2026 included $6.3 million of net defined benefit pension benefits, $0.3 million of currency transaction gains and $0.1 million of other income .

Other income, net in the first quarter of 2025 included $5.7 million of net defined benefit pension benefits and $0.6 million of currency transaction gains, partially offset by a $1.5 million loss on the sale of our North American Flooring business ("NA Flooring") and $1.6 million of other expense.

Interest expense:

Three Months Ended

Nine Months Ended

($ in millions)

Interest expense

Interest expense in the third quarter of 2025 was $33.6 million compared to $35.3 million in the third quarter of 2024 due to lower interest rates partially offset by higher debt levels.

Interest expense in the first nine months of 2025 was $100.5 million compared to $99.5 million in the first nine months of 2024 due to higher debt levels.

Interest expense in the first quarter of 2026 was $32.9 million compared to $32.0 million in the first quarter of 2025 due to higher debt levels partially offset by lower interest rates.

Interest income:

Three Months Ended

Nine Months Ended

($ in millions)

Interest income

Interest income in the third quarter of 2025 and 2024 was $1.1 million and $1.1 million, respectively, consisting primarily of interest on cross-currency swap activity and other miscellaneous interest income.

Interest income in the first nine months of 2025 and 2024 was $3.1 million and $3.6 million, respectively, consisting primarily of interest on cross-currency swap activity and other miscellaneous interest income.

Interest income in the first quarter of 2026 and 2025 was $2.1 million and $1.1 million, respectively, consisting primarily of interest on cross-currency swap activity and other miscellaneous interest income.

Income taxes:

Three Months Ended

Nine Months Ended

($ in millions)

Effective tax rate

Income tax expense of $16.5 million in the third quarter of 2025 includes $3.7 million of discrete tax benefit.

Excluding the discrete tax benefit, the overall effective tax rate was 24.4 percent.

The discrete tax benefit relates to various U.S.

and foreign tax matters.

Income tax expense of $18.3 million in the third quarter of 2024 includes $2.9 million of discrete tax benefit.

Excluding the discrete tax benefit, the overall effective tax rate was 29.3 percent.

The discrete tax benefit related to an excess tax benefit on U.S.

stock compensation, as well as other various U.S.

and foreign tax matters.

Income tax expense of $55.2 million in the first nine months of 2025 includes $11.2 million of discrete tax expense.

Income tax expense of $7.4 million in the first quarter of 2026 includes $0.1 million of discrete tax expense.

Excluding the discrete tax expense, the overall effective tax rate was 26.6 percent.

The discrete tax expense relates to the impact of withholding tax recorded on earnings that are no longer permanently reinvested, offset by v arious U.S.

The discrete tax expense relates to various U.S.

and foreign tax matters.

Income tax expense of $48.5 million in the first nine months of 2024 includes $4.1 million of discrete tax benefit.

Excluding the discrete tax benefit, the overall effective tax rate was 28.7 percent.

The discrete tax benefit related to an excess tax benefit on U.S.

stock compensation, as well as other various U.S.

Income tax expense of $5.9 million in the first quarter of 2025 includes $0.9 million of discrete tax expense.

Excluding the discrete tax expense, the overall effective tax rate was 26.5 percent.

The discrete tax expense related to various U.S.

and foreign tax matters.

1 unchanged sentence

Three Months Ended

Nine Months Ended

($ in millions)

1 unchanged sentence

The income from equity method investments relates to our 50 percent ownership of the Sekisui-Fuller joint venture in Japan.

The lower income for the third quarter of 2025 compared to the third quarter of 2024 is due to lower net income in our joint venture during the quarter compared to the prior year partially offset by the strengthening of the Japanese yen compared to the U.S.

The income from equity method investments relates to our 50 percent ownership of the Sekisui-Fuller joint venture in Japan.

The lower income for the first nine months of 2025 compared to the first nine months of 2024 is due to lower net income in our joint venture compared to the prior year partially offset by the strengthening of the Japanese yen compared to the U.S.

The higher income for the first quarter of 2026 compared to the first quarter of 2025 is due to higher net income in our joint venture during the quarter compared to the prior year.

Net income attributable to H.B.

Three Months Ended

Nine Months Ended

($ in millions)

2 unchanged sentences

The net income attributable to H.B.

Fuller in the third quarter of 2025 was $67.2 million compared to $55.4 million in the third quarter of 2024 .

The diluted earnings per share in the third quarter of 2025 was $1.22 per share as compared to $0.98 per share in the third quarter of 2024 .

The net income attributable to H.B.

Fuller in the first nine months of 2025 was $122.2 million compared to $137.6 million in the first nine months of 2024 .

The diluted earnings per share in the first nine months of 2025 was $2.21 per share as compared to $2.43 per share in the first nine months of 2024 .

Fuller in the first quarter of 2026 was $21.0 million compared to $13.2 million in the first quarter of 2025 .

The diluted earnings per share in the first quarter of 2026 was $0.38 per share as compared to $0.24 per share in the first quarter of 2025 .

Adjusted EBITDA:

Three Months Ended

($ in millions)

Adjusted EBITDA

Percent of net revenue

Adjusted EBITDA for H.B.

Fuller in the first quarter of 2026 was $118.7 million compared to $114.4 million in the first quarter of 2025 .

Adjusted EBITDA as a percentage of net revenue increased 90 basis points in the first quarter of 2026 compared to first quarter of 2025 due to higher net income and depreciation and amortization expense.

For a reconciliation of Adjusted EBITDA to net income attributable to H.B.

Fuller as reflected in the unaudited consolidated statement of income see "Non-GAAP Measures" below.

Operating Segment Results

As of November 30, 2024, our three operating segments consisted of Hygiene, Health and Consumable Adhesives, Engineering Adhesives and Construction Adhesives.

As of the beginning of fiscal 2025, we reorganized our operating segments by selling our NA Flooring business, previously part of the Construction Adhesives operating segment, and combining our Insulated Glass, Woodworking and Composite businesses, previously part of the Engineering Adhesives operating segment, with Construction Adhesives Roofing and Building Envelope and Infrastructure businesses to form the newly named Building Adhesive Solutions operating segment.

All financial results related to NA Flooring have been moved to our Corporate Unallocated segment.

Prior period segment information has been recast retrospectively to reflect the realignment.

The tables below provide certain information regarding the net revenue and operating income of each of our operating segments.

Our three reportable operating segments consist of Hygiene, Health and Consumable Adhesives, Engineering Adhesives and Building Adhesive Solutions.

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 Adjusted EBITDA of each of our segments are regularly reviewed by our chief executive officer, who acts as our chief operating decision maker, to make decisions about resources to be allocated to the segments and assess their performance.

Adjusted EBITDA is defined as net income before interest, income taxes, depreciation and amortization and foreign currency gain/loss, adjusted for other items within a relevant period which are not reflective of the segment’s operating performance in the period.

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

The tables below provide certain information regarding the net revenue, Adjusted EBITDA and Adjusted EBITDA margin of each of our operating segments.

Adjusted EBITDA margin is defined as Adjusted EBITDA divided by net revenue for each operating segment.

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.

As a result of the change in operating segments and the sale of our NA Flooring business, we have retrospectively moved the results of our Flooring business to Corporate Unallocated for prior periods.

Net Revenue by Segment:

Three Months Ended

Nine Months Ended

August 30, 2025

August 31, 2024

August 30, 2025

August 31, 2024

February 28, 2026

March 1, 2025

($ in millions)

4 unchanged sentences

Corporate Unallocated

Segment Operating Income (Loss):

Segment Adjusted EBITDA

Three Months Ended

Nine Months Ended

August 30, 2025

August 31, 2024

August 30, 2025

August 31, 2024

February 28, 2026

March 1, 2025

($ in millions)

6 unchanged sentences

Three Months Ended

Nine Months Ended

($ in millions)

Segment operating income

Segment operating margin

Segment adjusted EBITDA

Segment adjusted EBITDA margin

The following table provides details of the Hygiene, Health and Consumable Adhesives net revenue variances:

Three Months Ended

Nine Months Ended

August 30, 2025 vs.

August 31, 2024

August 30, 2025 vs.

August 31, 2024

Organic growth

Net revenue decreased 1.0 percent in the third quarter of 2025 compared to the third quarter of 2024 .

Organic growth decreased due to a decrease in sales volume, partially offset by an increase in product pricing.

The 1.5 percent increase in net revenue from M&A was due to the acquisitions of GEM and Medifill in the first quarter of 2025.

The positive currency effect was due to a stronger Euro and Egyptian pound, partially offset by a weaker Turkish lira compared to the U.S.

As a percentage of net revenue, raw material costs decreased 90 basis points due to higher product pricing and the impact of acquisitions.

Other manufacturing costs as a percentage of net revenue decreased 60 basis points compared to the prior year due to higher product pricing and the impact of acquisitions.

SG&A expenses as a percentage of net revenue increased 200 basis points due to higher compensation costs and the impact of acquisitions.

Segment operating income decreased 4.3 percent and segment operating margin as a percentage of net revenue decreased 50 basis points compared to the third quarter of 2024 .

Net revenue was flat in the first nine months of 2025 compared to the first nine months of 2024 .

Organic growth increased due to an increase in product pricing, partially offset by a decrease in sales volume.

February 28, 2026 vs.

March 1, 2025

Organic revenue growth

Net revenue decreased 5.9 percent in the first quarter of 2026 compared to the first quarter of 2025 .

Organic revenue growth decreased due to decrease in sales volume and product pricing.

The 0.8 percent increase in net revenue from M&A was due to the acquisitions of GEM and Medifill in the first quarter of 2025.

The negative currency effect was due to a weaker Egyptian pound, Brazilian real and Mexican peso c ompared to the U.S.

As a percentage of net revenue, raw material costs increased 110 basis points due to higher raw material costs partially offset by higher product pricing and the impact of acquisitions.

Other manufacturing costs as a percentage of net revenue were flat compared to the prior year.

SG&A expenses as a percentage of net revenue increased 120 basis points due to higher compensation costs and the impact of acquisitions.

Segment operating income decreased 17.9 percent and segment operating margin as a percentage of net revenue decreased 230 basis points compared to the first nine months of 2024 .

The positive currency effect was due to a stronger Euro, Brazilian real, Mexican peso and Chinese renminbi, partially offset by a weaker Turkish lira compared to the U.S.

Segment adjusted EBITDA increased 2.3 percent in the first quarter of 2026 compared to the first quarter of 2025 .

Segment adjusted EBITDA margin increased 120 basis points primarily due to lower revenue, lower raw materials cost and the impact of acquisitions.

Engineering Adhesives

Three Months Ended

Nine Months Ended

($ in millions)

Segment operating income

Segment operating margin

Segment adjusted EBITDA

Segment adjusted EBITDA margin

The following tables provide details of the Engineering Adhesives net revenue variances:

Three Months Ended

Nine Months Ended

August 30, 2025 vs.

August 31, 2024

August 30, 2025 vs.

August 31, 2024

Organic growth

Net revenue increased 4.7 percent in the third quarter of 2025 compared to the third quarter of 2024 .

Organic growth increased due to an increase in both product pricing and sales volume.

The 1.3 percent increase in net revenue from M&A was due to the acquisition of ND Industries Taiwan.

The positive currency effect was due to a stronger Euro and British pound com pared to the U.S.

A s a percentage of net revenue, raw material costs decreased 140 basis points primarily due to higher product pricing and the impact of acquisitions offset by higher raw material costs.

Other manufacturing costs as a percentage of net revenue decreased 70 basis points due to the impact of higher sales volume offset by the impact of acquisitions.

SG&A expenses as a percentage of net revenue increased 30 basis points.

Segment operating income increased 16.7 percent and segment operating margin increased 180 basis points compared to the third quarter of 2024 .

Net revenue increased 5.6 percent in the first nine months of 2025 compared to the first nine months of 2024 .

Organic growth increased due to an increase in product pricing, partially offset by a decrease in sales volume.

The 6.0 percent increase in net revenue from M&A was due to the acquisition of ND Industries and ND Industries Taiwan.

The negative currency effect was d ue to a weaker Chinese renminbi and Mexican peso, partially offset by a stronger Euro and British pound compared to the U.S.

As a percentage of net revenue, raw material costs decreased 280 basis points due to higher product pricing and the impact of acquisitions.

Other manufacturing costs as a percentage of net revenue increased 30 basis points.

SG&A expenses as a percentage of net revenue increased 110 basis points primarily due to higher compensation and the impact of acquisitions.

Segment operating income increased 16.2 percent and segment operating margin increased 140 basis points compared to the first nine months of 2024 .

February 28, 2026 vs.

March 1, 2025

Organic revenue growth

Net revenue increased 2.4 percent in the first quarter of 2026 compared to the first quarter of 2025 .

Organic revenue growth decreased due to a decrease in sales volume, partially offset by an increase in product pricing.

The 1.1 percent increase in net revenue from M&A was due to the acquisition of ND Industries Taiwan and ND Industries Turkey.

The positive currency effect was due to a stronger Euro and Chinese renminbi compared to the U.S.

Segment adjusted EBITDA increased 9.0 percent in the first quarter of 2026 compared to the first quarter of 2025.

S egment adjusted EBITDA margin increased 120 basis points primarily due to higher product pricing, lower raw materials cost and the impact of acquisitions, partially offset by higher manufacturing and distribution costs.

Building Adhesive Solutions

Three Months Ended

Nine Months Ended

($ in millions)

Segment operating income

Segment operating margin

Segment adjusted EBITDA

Segment adjusted EBITDA margin

The following tables provide details of the Building Adhesive Solutions net revenue variances:

Three Months Ended

Nine Months Ended

August 30, 2025 vs.

August 31, 2024

August 30, 2025 vs.

August 31, 2024

Organic growth

Net revenue increased 2.3 percent in the third quarter of 2025 compared to the third quarter of 2024 .

February 28, 2026 vs.

March 1, 2025

Organic revenue growth

Net revenue decreased 1.0 percent in the first quarter of 2026 compared to the first quarter of 2025 .

Organic growth decreased due to a decrease in sales volume partially offset by an increase in product pricing .

The 1.7 percent increase in net revenue from M&A was due to the acquisition of HS Butyl in the third quarter of 2024.

The positive currency effe ct was due to a stronger Euro and British pound co mpared to the U.S.

As a percentage of net revenue, raw material costs decreased 40 basis points.

O ther manufacturing costs as a percentage of net revenue increased 30 basis points.

SG&A expenses as a percentage of net revenue increased 40 basis points.

S egment operating income decreased 0.4 percent and segment operating margin decreased 30 basis points compared to the third quarter of 2024 .

Net revenue increased 1.7 percent in the first nine months of 2025 compared to the first nine months of 2024 .

Organic growth was flat due to a decrease in sales volume offset by an increase in product pricing.

T he 2.0 percent increase in net revenue from M&A was due to the acquisition of HS Butyl in the third quarter of 2024.

The negative currency effect was due to a weaker Turkish lira and Australia dollar, partially offset by the Euro and British pound, compared to the U.S.

As a percenta ge of net revenue, raw material costs decreased 40 basis points.

O ther manufacturing costs as a percentage of net revenue increased 10 basis points.

SG&A expenses as a percentage of net revenue increased 50 basis points.

S egment operating income decreased 1.1 percent and segment operating margin decreased 20 basis points compared to the first nine months of 2024 .

The positive currency effe ct was due to a str onger Euro and British pound compared to the U.S.

Segment adjusted EBITDA increased 0.9 percent in the first quarter of 2026 compared to the first quarter of 2025.

Segment adjusted EBITDA margin was flat.

Corporate Unallocated

Three Months Ended

Nine Months Ended

($ in millions)

Segment operating loss

Segment operating margin

Adjusted EBITDA

NMP = Non-meaningful percentage

Segment operating loss in the third quarter of 2025 decreased 12.5 percent compared to the third quarter of 2024 due to the inclusion of the NA Flooring business results in 2024.

Segment operating loss in the first nine months of 2025 increased 16.1 percent compared to the first nine months of 2024 due to higher acquisition project in costs and the inclusion of the NA Flooring business results in 2024.

Financial Condition, Liquidity and Capital Resources

Total cash and cash equivalents as of August 30, 2025 were $122.5 million compared to $169.4 million as of November 30, 2024 and $131.4 million as of August 31, 2024.

The majority of the $122.5 million in cash and cash equivalents as of August 30, 2025 was held outside the United States.

Total long and short-term debt was $2,080.5 million as of August 30, 2025, $2,010.6 million as of November 30, 2024 and $2,021.1 million as of August 31, 2024.

The total debt to total capital ratio as measured by total debt divided by total debt plus total stockholders’ equity was 51.5 percent as of August 30, 2025 as compared to 50.8 percent as of November 30, 2024 and 52.3 percent as of August 31, 2024.

Total cash and cash equivalents as of February 28, 2026 were $107.9 million compared to $107.2 million as of November 29, 2025 and $105.7 million as of March 1, 2025.

The majority of the $107.9 million in cash and cash equivalents as of February 28, 2026 was held outside the United States.

Total long and short-term debt was $2,076.1 million as of February 28, 2026, $2,016.9 million as of November 29, 2025 and $2,180.0 million as of March 1, 2025.

The total debt to total capital ratio as measured by total debt divided by total debt plus total stockholders’ equity was 50.1 percent as of February 28, 2026 as compared to 50.2 percent as of November 29, 2025 and 55.1 percent as of March 1, 2025.

We believe that cash flows from operating activities will be adequate to meet our short-term and long-term liquidity and capital expenditure needs.

7 unchanged sentences

Our credit agreements include restrictive covenants that, if not met, could lead to a renegotiation of our credit lines and a significant increase in our cost of financing.

As of August 30, 2025, we were in compliance with all covenants of our contractual obligations as shown in the following table:

As of February 28, 2026, we were in compliance with all covenants of our credit agreement contractual obligations as shown in the following table:

Debt Instrument

Result as of August 30, 2025

Result as of February 28, 2026

Secured Total Indebtedness / TTM 1 EBITDA

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Selected Metrics of Liquidity

Key metrics we monitor are net working capital as a percent of annualized net revenue, trade receivable days sales outstanding (“DSO”), inventory days on hand, trade accounts payable outstanding ("DPO") free cash flow after dividends and debt capitalization ratio.

Net working capital as a percentage of annualized net revenue 1

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Total debt to total capital ratio 6

1 Current quarter net working capital (trade receivables, net of allowance for doubtful accounts plus inventory minus trade payables) divided by annualized net revenue (current quarter multiplied by four).

2 Trade receivables net of the allowance for doubtful accounts at the balance sheet date multiplied by 91 (13 weeks) and divided by the net revenue for the quarter.

1 Net working capital (trade receivables, net of allowance for doubtful accounts plus inventory minus trade payables) divided by annualized net revenue (current quarter multiplied by four).

2 Trade receivables net of the allowance for doubtful accounts multiplied by 91 (13 weeks) and divided by the net revenue for the quarter.

3 Total inventory multiplied by 91 (13 weeks) and divided by cost of sales (excluding delivery costs) for the quarter.

4 Trade accounts payable multiplied by 91 (13 weeks) and divided by the net revenue for the quarter.

4 Trade accounts payable multiplied by 91 (13 weeks) and divided by net revenue for the quarter.

5 Year-to-date net cash provided by operating activities, less purchased property, plant and equipment.

See reconciliation of net cash provided by operating activities to free cash flow.

See "Non GAAP Measures" for reconciliation of net cash provided by operating activities to free cash flow.

6 Total debt divided by (total debt plus total stockholders’ equity).

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Free cash flow is an integral financial measure used by the Company to assess its ability to generate cash in excess of its operating needs, therefore, the Company believes this financial measure provides useful information to investors.

The following table reflects the manner in which free cash flow is determined and provides a reconciliation of free cash flow to net cash provided by operating activities, the most directly comparable financial measure calculated and reported in accordance with U.S.

Reconciliation of "Net cash provided by operating activities" to free cash flow

Nine Months Ended

($ in millions)

August 30, 2025

August 31, 2024

Net cash provided by operating activities

Purchased property, plant and equipment

Free cash flow

For a reconciliation of net cash provided by operating activities to free cash flow see “Non-GAAP Measures” below.

Summary of Cash Flows

Cash Flows from Operating Activities:

Nine Months Ended

Three Months Ended

($ in millions)

Net cash provided by operating activities

Net income including non-controlling interest was $122.3 million in the first nine months of 2025 compared to $137.6 million in the first nine months of 2024.

Depreciation and amortization expense totaled $132.8 million in the first nine months of 2025 compared to $128.7 million in the first nine months of 2024.

Deferred income taxes was a use of cash of $39.2 million in the first nine months of 2025 compared to $46.0 million in the first nine months of 2024.

Accrued compensation was a use of cash of $19.2 million in 2025 compared to $11.6 million in 2024.

Other assets was a use of cash of $7.5 million in the first nine months of 2025 compared to $39.0 million in the first nine months of 2024.

Other liabilities was a source of cash of $28.6 million in the first nine months of 2025 compared to $0.9 million in the first nine months of 2024.

Changes in net working capital (trade receivables, inventory and trade payables) accounted for a use of cash of $71.2 million compared to a source of cash of $13.9 million last year.

Net income including non-controlling interest was $21.0 million in the first three months of 2026 compared to $13.3 million in the first three months of 2025.

Depreciation and amortization expense totaled $46.4 million in the first three months of 2026 compared to $42.6 million in the first three months of 2025.

Deferred income taxes were a use of cash of $2.4 million in the first three months of 2026 compared to a source of cash of $5.8 million in the first three months of 2025.

Accrued compensation was a use of cash of $46.4 million in the first three months of 2026 compared to $37.9 million in the first three months of 2025.

Other assets were a use of cash of $3.2 million in the first three months of 2026 compared to $0.3 million in the first three months of 2025.

Other liabilities were a use of cash of $9.9 million in the first three months of 2026 compared to $0.3 million in the first three months of 2025.

Changes in net working capital (trade receivables, inventory and trade payables) accounted for a source of cash of $13.7 million in the first three months of 2026 compared to a use of cash of $27.5 million in the first three months of 2025.

The table below provides the cash flow impact due to changes in the components of net working capital and an assessment of each of the components:

Nine Months Ended

Three Months Ended

($ in millions)

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Total cash flow impact

Trade receivables, net – Trade receivables, net was a use of cash of $3.3 million and a source of cash of $26.4 million in the first nine months of 2025 and 2024, respectively.

The use of cash in 2025 compared to source of cash in 2024 was due to less cash collected on trade receivables in the current year compared to the prior year.

The DSO were 57 days at August 30, 2025 and 57 days at August 31, 2024.

Inventory – Inventory was a use of cash of $42.1 million and $62.2 million in the first nine months of 2025 and 2024, respectively.

The lower use of cash in 2025 compared to 2024 was due to lower inventory purchases in 2025 compared to 2024.

Inventory days on hand were 78 days as of August 30, 2025 and 75 days as of August 31, 2024.

Trade payables – Trade payables was a use of cash of $25.8 million and a source of cash of $49.7 million in the first nine months of 2025 and 2024, respectively.

The use of cash in 2025 compared to source of cash in 2024 reflects higher payments on trade payables in the current year compared to the prior year.

Days payable outstanding were 69 days as of August 30, 2025 and 70 days as of August 31, 2024.

Trade receivables, net – Trade receivables, net was a source of cash of $39.6 million and $13.9 million in the first three months of 2026 and 2025, respectively.

The higher source of cash in 2026 compared to 2025 was due to more cash collected on trade receivables in the current year compared to the prior year.

The DSO were 63 days at February 28, 2026 and 61 days at March 1, 2025.

Inventory – Inventory was a use of cash of $28.9 million and $27.1 million in the first three months of 2026 and 2025, respectively.

The slightly higher use of cash in 2026 compared to 2025 was due to higher inventory purchases in 2026 compared to 2025.

Inventory days on hand were 90 days as of February 28, 2026 and 79 days as of March 1, 2025.

Trade payables – Trade payables was a source of cash of $3.0 million and a use of cash of $14.3 million in the first three months of 2026 and 2025, respectively.

The source of cash in 2026 compared to use of cash in 2025 reflects lower payments on trade payables in the current year compared to the prior year.

Days payable outstanding were 77 days as of February 28, 2026 and 73 days as of March 1, 2025.

Cash Flows from Investing Activities:

Nine Months Ended

Three Months Ended

($ in millions)

Net cash used in investing activities

Purchases of property, plant and equipment were $94.6 million during the first nine months of 2025 compared to $112.8 million for the same period of 2024 .

Purchases of property, plant and equipment were $57.7 million during the first three months of 2026 compared to $33.0 million for the same period of 2025 .

This difference reflects the timing of capital projects and expenditures related to growth initiatives.

During the first nine months of 2025, we paid $162.1 million of cash for business acquisitions.

Additionally, we received $75.7 million in cash related to the sale of our NA Flooring business.

During the first nine months of 2024, we paid $274.1 million of cash for business acquisitions.

We did not pay any cash for business acquisitions during the first three months of 2026 .

During the first three months of 2025 we paid $162.0 million in cash for business acquisitions and we received $75.7 million in cash related to the sale of our NA Flooring business.

Cash Flows from Financing Activities:

Nine Months Ended

Three Months Ended

($ in millions)

Net cash provided by financing activities

In the first nine months of 2025 , borrowings on our revolving credit facility were $1,114.3 million and repayments on our revolving credit facility and our long-term debt totaled $1,053.6 million.

In the first three months of 2026 , borrowings on our revolving credit facility were $288.1 million and repayments on our revolving credit facility and our long-term debt totaled $231.4 million.

These borrowings are for general working capital purposes and permitted acquisitions.

Borrowings on our revolving credit facility were $1,732.9 and repayments on our revolving credit facility and our long-term debt totaled $1,556.1 million in the first nine months of 2024 .

Net payments of notes payable were a use of cash of $0.6 million in the first nine months of 2025 compared to $1.0 million in the same period of 2024 .

Cash dividends paid were $37.6 million in the first nine months of 2025 compared to $35.4 million in the same period of 2024 .

Repurchases of common stock were $60.7 million in the first nine months of 2025 compared to $39.4 million in the same period of 2024 .

Borrowings on our revolving credit facility were $526.3 million and repayments on our revolving credit facility and our long-term debt totaled $359.5 million in the first three months of 2025 .

There were no net payments of notes payable in the first three months of 2026 compared to $0.2 million in the same period of 2025 .

Cash dividends paid were $12.8 million in the first three months of 2026 compared to $12.2 million in the same period of 2025 .

Repurchases of common stock were $2.9 million in the first three months of 2026 compared to $44.4 million in the same period of 2025 .

Non-GAAP Measures

We use both GAAP and non-GAAP financial measures for operational and financial decision making, and to assess Company and segment business performance.

Our non-GAAP measures include Adjusted EBITDA and Free Cash Flow.

Our calculation of these non-GAAP measures may not be comparable to similarly titled measures of other companies due to potential differences between companies in the method of calculation.

As a result, the use of these non-GAAP measures has limitations and should not be considered superior to, in isolation from, or as a substitute for, related U.S.

GAAP measures.

These non-GAAP measures allow management and investors to view operating trends, perform analytical comparisons and benchmark performance between periods and among geographic regions to understand operating performance without regard to items we do not consider a component of our core operating performance.

Furthermore, these non-GAAP measures allow investors the opportunity to measure and monitor our performance against our externally communicated targets and evaluate the investment decisions being made by management to improve Adjusted EBITDA.

Management uses these measures in its financial, investment and operational decision-making processes, for internal reporting and as part of its forecasting and budgeting processes.

Further, our Board of Directors uses certain of these and other measures as key metrics to determine management performance under our performance-based compensation plans.

For these reasons, we believe these non-GAAP measures are useful for our investors.

Adjusted EBITDA is presented net of noncontrolling interests and is used by management and can be used by investors to review our consolidated operating results because it excludes depreciation, amortization, interest income, interest expense and income taxes as well as certain additional adjustments that are not considered part of our core operations.

Examples of adjustments to EBITDA include, but are not limited to, costs for acquisition projects, organizational realignment, Project One, business divestitures, discrete taxes, and the income tax effect on these adjustments.

For Adjusted EBITDA, once we have made an adjustment in the current period for an item, we will also adjust the related non-GAAP measure in future periods in which there is an impact from the item.

The following table reflects the manner in which Adjusted EBITDA is determined and provides a reconciliation of Adjusted EBITDA to Net income attributable to H.B.

Fuller, the most directly comparable financial measure calculated and reported in accordance with U.S.

Reconciliation of Net income attributable to H.B.

Fuller to Adjusted EBITDA

Three Months Ended

Net income attributable to H.B.

Acquisition project costs

Organizational realignment

Discrete tax items

Income tax effect on adjustments

Adjusted net income attributable to H.B.

Interest expense 1

Interest income

Adjusted Income taxes

Depreciation and Amortization expense 2

Adjusted EBITDA

1 Interest expense added back for EBITDA is adjusted for amounts already included in adjusted net income attributable to H.B.

2 Depreciation and amortization expense added back for EBITDA is adjusted for amounts already included in adjusted net income attributable to H.B.

Free cash flow, a non-GAAP financial measure, is defined as net cash provided by operating activities less purchased property, plant and equipment.

Reconciliation of Net cash provided by operating activities to Free cash flow

Three Months Ended

($ in millions)

February 28, 2026

March 1, 2025

Net cash provided by operating activities

Purchased property, plant and equipment

Free cash flow

Forward-Looking Statements and Risk Factors

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What changed 10-Q

Item 2. Management’s Discussion and Analysis