H.B. Fuller Company (NYSE:FUL), a global leader in adhesives, sealants, and functional coatings, stock fell 0.46% (As on January 15, 11:23:19 AM UTC-4, Source: Google Finance) after the company reported fourth quarter adjusted earnings that exceeded analyst expectations, driven by significant margin expansion despite lower revenue. H.B. Fuller’s profitability showed marked improvement, with adjusted EBITDA rising 14.6% YoY to $170 million. The adjusted EBITDA margin expanded to 19.0%, up 290 basis points from the same period last year, driven by favorable pricing and raw material cost actions, acquisition benefits, and restructuring initiatives. Net debt at the end of Q4 was $1.91 billion, down $48 million from the previous quarter, with net debt-to-adjusted EBITDA improving to 3.1X from 3.5X in the first quarter of 2025. Net income was $30 million and adjusted EBITDA was $170 million, up 14.6% year-on-year. Net working capital in the fourth quarter of fiscal 2025 declined $41 million sequentially versus the third quarter. As a percentage of annualized net revenue, net working capital decreased 120 basis points versus the third quarter. On a year-on-year basis, net working capital increased 130 basis points to 15.8%, due to slightly higher inventory days on hand as we execute our manufacturing footprint optimization. Operating cash flow in fiscal year 2026 is expected to be between $275 million and $300 million. Capital expenditures of approximately $160 million are expected in fiscal 2026, which includes approximately $50 million related to the company’s manufacturing footprint consolidation initiative.

FUL in the third quarter of FY26 has reported the adjusted earnings per share of $1.28, beating the analysts’ estimates for the adjusted earnings per share of $1.23. The company had reported the adjusted revenue decline of 3.1 percent to $894.8 million in the third quarter of FY26, missing the analysts’ estimates for revenue of $902.51 billion. Though when adjusted for the flooring divestiture, revenue increased 0.9%. Organic revenue was down 1.3% year-on-year, with pricing actions increasing organic revenue by 1.2% and volume decreasing organic revenue by 2.5%.

For fiscal 2026, H.B. Fuller expects revenue to be flat to up 2% compared to 2025, with adjusted EBITDA projected between $630 million and $660 million. The company anticipates adjusted EPS of $4.35 to $4.70. For the first quarter of 2026, net revenue is expected to decline by low single digits, with adjusted EBITDA between $110 million and $120 million. The company also anticipates capital expenditures of approximately $160 million, including $50 million related to manufacturing footprint consolidation.