H.B. Fuller (NYSE: FUL) reported Q1 EPS of $0.66, $0.18 better than the analyst estimate of $0.48. Revenue for the quarter came in at $726 million versus the consensus estimate of $680.98 million.

2021 Planning Assumptions:

H.B. Fuller has updated its planning assumptions for fiscal year 2021 based on current market conditions:

• Raw material costs are expected to rise as the year progresses driven by increasing industrial demand and supply constraints of U.S. petrochemicals resulting from severe winter weather in the Gulf Coast in February. The company expects full year raw material costs to increase 5% to 8% versus 2020. H.B. Fuller has implemented annualized price adjustments of more than $100 million that are effective in the second quarter which are anticipated to offset raw material increases. The company is prepared to implement further increases in the third quarter, as necessary.
• Based on current conditions, the company anticipates high-single digit to low double-digit revenue growth, and adjusted EBITDA in the range of $455 to $475 million for fiscal 2021. This reflects adjusted EBTIDA growth of 12% to 17% versus 2020, which is supported by share gains, on-going recovery in global industrial production, pricing actions balancing higher input costs, and benefits from the company’s operational improvement projects.
• Income growth and working capital improvement will enable the company to continue to drive strong cash flow and pay down an additional $200 million of debt in 2021, after dividends and approximately $95 million of capital investments.
• The company’s core tax rate, excluding the impact of discrete items, is anticipated to be between 26% and 29%, and full year net interest expense is estimated to be approximately $70 million.

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