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H.B. Fuller to repay $200 million of debt, have 3.2x leverage by 2022
By Devika Patel
Knoxville, Tenn., June 25 – H.B. Fuller Co. is on track to meet its target of $200 million of debt paydown for 2021, with an eye to getting leverage to 3.2x by the end of 2021 and to below 3x by early 2022.
“The actions we have taken on price and to drive efficiencies across our business enabled us to seamlessly serve our customers and achieve our profit targets in the quarter, while at the same time, increasing our debt pay-down over last year’s level, in line with our target for $200 million of debt reduction in 2021,” president and chief executive officer Jim Owens said on the company’s second quarter ended May 29 earnings conference call on Thursday.
The company paid down $62 million of debt thus far this year.
“We continue to reduce debt, paying down $62 million in the first half of 2021 compared to $51 million during the same period last year and keeping us on track for our full year debt pay-down plan of $200 million,” executive vice president and chief financial officer John Corkrean said on the call.
Management intends to get leverage below 3x early next year and keep the debt to EBITDA ratio in the range of 2x to 3x long-term.
“Our goal is to get our debt to EBITDA ratio below 3x,” Owens said.
“I think the current projections will be around 3.2x at the end of this year.
“So, [getting to below 3x] should happen early next year.
“We see ourselves staying in that range long-term.
“Our long-term commitment is to be in that 2x to 3x debt to EBITDA ratio [range],” Owens said.
At the end of the second quarter of 2021, the company had $70 million of cash and equivalents and $1,712,000,000 of total debt. This compares to cash and debt levels equal to $70 million and $1,928,000,000, respectively, at the end of the second quarter of 2020.
The industrial adhesives, sealants, coatings and specialty materials company is based in St. Paul.
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