H.B. Fuller Company,(FUL) a global leader in adhes ive solutions, has released its consolidated financial information for the third quarter of 2023, ending September 2. The company reported a net income of $37.6 million, marking a 19% decrease compared to the same period in the previous year. This news comes in the backdrop of the company's net revenue for the quarter, which amounted to $900.6 million.Let's delve deeper into H.B. Fuller's financial performance for the third quarter and also take a look at its nine-month performance.
Q3 2023 Financial Performance
H.B. Fuller's net revenue for the third quarter of 2023 stood at $900.6 million. Despite economic uncertainties and market fluctuations, the company managed to maintain a stable revenue stream, albeit slightly lower than the same period last year when it recorded $941.2 million in net revenue.
The company's gross profit for the third quarter showed significant improvement, amounting to $263.5 million, accounting for 29.3% of net revenue. This is compared to $249.2 million (26.5% of net revenue) in the same quarter of the previous year. This growth in gross profit suggests improved cost management and operational efficiency.
Operating Expenses and Income
Selling, general, and administrative expenses for the third quarter amounted to $172.2 million, which is 19.1% of net revenue, slightly higher than the 17.1% recorded in the same period last year.
H.B. Fuller reported other income of $1.6 million and interest expenses of $35.1 million, accounting for 0.2% and 3.9% of net revenue, respectively. Interest income amounted to $1.1 million (0.1% of net revenue), while the company's income before income taxes and income from equity method investments stood at $58.9 million (6.5% of net revenue).
Income taxes for the quarter amounted to $22.2 million (2.5% of net revenue), while income from equity method investments was $0.9 million (0.1% of net revenue). The net income attributable to H.B. Fuller was $37.6 million, accounting for 4.2% of net revenue.
The basic income per common share attributable to H.B. Fuller was reported at $0.69, with diluted income per common share at $0.67. The weighted-average common shares outstanding for the quarter were 54.4 million on a basic basis and 56.0 million on a diluted basis.
Dividends Declared
H.B. Fuller declared dividends of $0.205 per common share for the third quarter of 2023, reflecting the company's commitment to returning value to its shareholders.
Taking a broader view, H.B. Fuller's financial performance for the nine months ending September 2, 2023, also presents key insights:
The company's net revenue for the nine months ending September 2, 2023, amounted to $2.6 billion, maintaining a consistent revenue stream compared to the same period in 2022 when it recorded $2.8 billion.
H.B. Fuller's gross profit for the nine-month period reached $735.1 million, accounting for 28.2% of net revenue. This represents growth compared to the 25.6% of net revenue ($715.6 million) recorded in the same period last year.
Selling, general, and administrative expenses for the nine months totaled $493.3 million, accounting for 18.9% of net revenue. In contrast, the same expenses accounted for 17.3% of net revenue in the prior year.
Income before income taxes and income from equity method investments for the nine months was reported at $147.9 million, representing 5.7% of net revenue. Income taxes amounted to $51.3 million (2.0% of net revenue), and income from equity method investments was $3.3 million (0.1% of net revenue). The net income attributable to H.B. Fuller for the nine-month period was $99.9 million, accounting for 3.8% of net revenue.
Basic income per common share attributable to H.B. Fuller was $1.84, while diluted income per common share was $1.79. The weighted-average common shares outstanding were 54.3 million on a basic basis and 55.9 million on a diluted basis.
Dividends Declared
H.B. Fuller declared dividends of $0.600 per common share for the nine months ending September 2, 2023.
H.B. Fuller's financial results for the third quarter of 2023 demonstrate resilience in maintaining its revenue stream despite challenging market conditions. While net income for the quarter decreased compared to the previous year, the company continues to focus on cost management and operational efficiency.
Investors and industry analysts will be closely monitoring how H.B. Fuller navigates the evolving economic landscape in the coming quarters and whether it can sustain its growth momentum.