H.B. Fuller Company (NYSE:FUL) stock fell 3.65% (As on January 19, 11:30:36 AM UTC-4, Source: Google Finance) after the company missed the analysts’ expectations for both the topline and bottomline. Organic revenue was up 6.4% year-on-year, as strong pricing actions increased revenue by 11.4% and volume was down 5.0% due to a slowdown in end market demand, particularly in Construction Adhesives, and softness in China due to more severe COVID-related lockdowns. Adjusted gross profit in the fourth quarter of fiscal 2022 was $251 million. Adjusted gross profit margin of 26.2% decreased 90 basis points year-on-year. Raw material inflation and lower volumes, particularly in Construction Adhesives, offset higher pricing versus the prior year and resulted in lower gross profit margin. Adjusted net income attributable to H.B. Fuller for the fourth quarter of fiscal 2022 was $58 million.  Adjusted EBITDA in the fourth quarter of fiscal 2022 was $141 million, up 5% compared with the fourth quarter of last year. Adjusted EBITDA margin was relatively stable year-on-year.

Moreover, Net working capital, as a percentage of annualized net revenue, decreased 100 basis points sequentially from 18.9% in the third quarter to 17.9% in the fourth quarter. Net debt-to-adjusted EBITDA ratio declined sequentially from 3.6X to 3.2X driven by improved cash flow from operations and growth in adjusted EBITDA. At the end of the fourth quarter of fiscal 2022 net debt was $1,685 million, down $172 million sequentially versus the third quarter. The sequential reduction in net debt, together with growth in adjusted EBITDA, reduced the ratio of net debt-to-adjusted EBITDA from 3.6X to 3.2X sequentially

FUL in the fourth quarter of FY 22 has reported the adjusted earnings per share of $1.04, missing the analysts’ estimates for the adjusted earnings per share of $1.24, according to Refinitiv. The company had reported the adjusted revenue growth of 7 percent to $958 million in the fourth quarter of FY 22, missing the analysts’ estimates for revenue of $1.01 billion.

The revenue for 2023 is expected to be flat to down 3% versus 2022; organic revenue growth for fiscal year 2023 is expected to be in the range of 2% to 4%, adjusting for the impact of the extra week in fiscal year 2022. Adjusted EPS in fiscal year 2023 is expected to be in the range of $4.15 to $4.55, equating to growth of between 4% to 14% year-on-year. Adjusted EBITDA for fiscal 2023 is expected to be in the range of $580 million to $610 million.