H.B. Fuller (NYSE: FUL) reported Q2 EPS of $1.11, $0.04 better than the analyst estimate of $1.07. Revenue for the quarter came in at $993 million versus the consensus estimate of $966.38 million.

GUIDANCE:

H.B. Fuller sees FY2022 EPS of $4.10-$4.35, versus the consensus of $4.20.

• Raw material and delivery costs are expected to continue to rise as the year progresses primarily driven by industrial demand and supply constraints of U.S. petrochemicals. The company anticipates an increase of more than 20% for the full year versus the fourth quarter 2021 exit rate.
• H.B. Fuller has implemented annualized price adjustments of approximately $330 million in the first half of 2022, including over $200 million in the second quarter, and is planning additional annualized increases of over $175 million in the third quarter. When combined with annualized price increases of approximately $450 million executed in fiscal 2021, the company’s total pricing actions are anticipated to more than offset raw material and delivery cost increases. The company is prepared to implement further increases as necessary.
• Adjusted EBITDA is expected to be in the range of $530 to $550 million, an increase of approximately 14% to 18% versus fiscal 2021, with double-digit year-over-year growth in all four quarters.
• Adjusted EPS is expected to be in the range of $4.10 to $4.35, an increase of between 18% and 25% versus fiscal year 2021.
• Working capital as a percentage of revenue is expected to continue to improve over the course of the year and to decline below 16% by fiscal 2022 year-end, resulting in more normalized levels of cash flow generation in the second half of the year.

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