US HB Fuller Q2 profit slips to $11m, but sales rise 16%

22 June 2010 22:34  [Source: ICIS news]

HOUSTON (ICIS news)--HB Fuller posted a 2010 second-quarter net income of $11m (€8.9m), down 37% year over year due to costs associated with discontinuing its glass sealant line in Europe, the US producer said on Tuesday.

After adjusting for exit costs and non-cash impairment charges, second-quarter earnings were $19.5m, up 10.8% year over year.

Net sales were $347.9m, up 16% year over year and 12% quarter over quarter.

“In the second quarter, our organic sales trend continued to strengthen and organic sales expanded twice as fast as in the previous quarter,” said chief executive Michele Volpi.

“HB Fuller has not achieved this level of growth in a very long time,” he added.

The company’s sales growth was led by the Asia Pacific region, HB Fuller said, where sales increased nearly 35% year over year as a result of new business and an economic recovery.

In North America, net revenues grew 11.7% year over year - led by a 18.6% jump in construction products.

For the first half of fiscal 2010, sales were up 13.8%. Looking ahead, HB Fuller said it expected growth of 10-12% for the full year as stronger-than-anticipated organic growth would more than offset the effects of a weakening euro.

The company also said that raw material costs would likely increase about 8% for the full year, but noted that corresponding price increases were underway and that gross margins would improve sequentially in the second half as those are implemented.

($1 = €0.81)

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By: Ben DuBose
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