H.B. Fuller sees 12% EBITDA growth; deleveraging slower than forecast

By Devika Patel

Knoxville, Tenn., March 24 – H.B. Fuller Co. is on track to deliver double-digit year-on-year EBITDA growth in each quarter this fiscal year, management said Thursday, after having grown EBITDA 12% last quarter.

Despite this strong growth in EBITDA, the company has not managed to achieve its leverage goals set last year under which it planned to have its net debt to EBITDA below 3x early in fiscal 2022.

“Net debt to EBITDA is anticipated to be between 3x and 3.3x at year-end 2022,” the company stated in a Wednesday press release.

This compares to management saying they planned to lower the leverage ratio to below 3x by early this fiscal 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,” president and chief executive officer Jim Owens said on the company’s second quarter 2021 ended May 29, 2021 conference call in June 2021, as previously reported.

“I think the current projections will be around 3.2x at the end of this year [2021].

“So, [getting to below 3x] should happen early next year [2022].

“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 in June 2021.

The company grew EBITDA 12% in the last quarter and expects this level of growth in each quarter this year, which will help towards reducing leverage.

“We delivered $113 million of EBITDA, which was up 12% and ahead of our expectations for the quarter,” Owens said on the company’s first quarter ended Feb. 26 earnings conference call on Thursday.

“This strong performance is continuing as we begin the second quarter and look ahead to the rest of the year,” Owens said.

The company expects double-digit year-on-year EBITDA growth in each quarter this year.

“We are increasing our adjusted EBITDA guidance range to $530 million to $550 million, reflecting the impact of acquisitions and our strong start to the year, with forecasted double-digit year-on-year EBITDA growth in each quarter this year,” executive vice president and chief financial officer John Corkrean said on the call.

As of the end of the first quarter of fiscal 2022, the company had $63,511,000 of cash on hand and $1,914,000,000 of total debt. This compares to cash and debt levels of $81 million and $1,758,000,000, respectively, as of the end of the first quarter of fiscal 2021.

The industrial adhesives, sealants, coatings and specialty materials company is based in St. Paul.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.