Quarterly Report for Quarter Ending May 30, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations

Overview

The Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") should be read in conjunction with the MD&A included in our Annual Report on Form 10-K for the year ended November 29, 2025, for important background information related to our business.

Net revenue in the second quarter of 2026 increased 5.8 percent from the second quarter of 2025. The increase was due to a 3.1 percent increase due to positive currency effects, a 3.0 percent increase due to pricing and a 0.1 percent increase due to acquisitions, partially offset by a 0.4 percent decrease due to sales volume compared to the second quarter of 2025. The positive currency effect was primarily driven by a stronger Euro, Chinese renminbi, Brazilian real, Australian dollar, Mexican peso, British pound and Polish złoty partially offset by a weaker Indian rupee and Turkish lira compared to the U.S. dollar. Gross profit margin increased 170 basis points primarily due to higher product pricing and the impact of restructuring actions.

Net revenue in the first six months of 2026 increased 2.0 percent from the first six months of 2025. The increase was due to a 3.3 percent increase due to positive currency effects, a 1.8 percent increase due to pricing and a 0.4 percent increase due to acquisitions, partially offset by a 3.5 percent decrease due to sales volume compared to the first six months of 2025. The positive currency effect was primarily driven by a stronger Euro, Chinese renminbi, Brazilian real, British pound, Mexican peso and Australian dollar partially offset by a weaker Turkish lira and Indian rupee compared to the U.S. dollar. Gross profit margin increased 190 basis points primarily due to higher product pricing and the impact of acquisitions and restructuring actions.

Net income attributable to H.B. Fuller in the second quarter of 2026 was $67.8 million compared to $41.8 million in the second quarter of 2025. Diluted earnings per share for the second quarter of 2026 was $1.23 per share compared to $0.76 per share for the second quarter of 2025.

Net income attributable to H.B. Fuller in the first six months of 2026 was $88.9 million compared to $55.1 million in the first six months of 2025. Diluted earnings per share for the first six months of 2026 was $1.61 per share compared to $0.99 per share for the first six months of 2025.

Adjusted EBITDA in the second quarter of 2026 increased 9.3 percent from the second quarter of 2025, primarily due to higher gross profit, partially offset by higher compensation expense and higher foreign currency losses

.

Adjusted EBITDA in the first six months of 2026 increased 7.0 percent from the first six months of 2025, primarily due to higher gross profit, partially offset by higher compensation expense and higher foreign currency losses

.

Restructuring Plans

During fiscal year 2023, the Company approved restructuring plans (the "Plans") related to organizational changes and other actions to optimize operations and integrate acquired businesses. In implementing the Plans, the Company currently expects to incur costs of approximately $85.0 million to $90.0 million ($58.0 million to $61.4 million after tax), which include (i) cash expenditures of approximately $51.0 million to $52.0 million ($34.8 million to $35.5 million after tax) for severance and related employee costs globally and (ii) other restructuring costs related to the streamlining of processes and the payment of anticipated income taxes in certain jurisdictions related to the Plans. We have incurred costs of $84.4 million under the Plans as of May 30, 2026. Remaining cash payments will continue into fiscal year 2026.

The Company approved restructuring actions related to global footprint optimization during the fourth quarter of 2025. In implementing these restructuring actions, the Company currently expects to incur costs of approximately $11.2 million to $13.0 million ($8.3 million to $9.6 million after tax), which include (i) cash expenditures of approximately $6.5 million to $7.5 million ($4.8 million to $5.5 million after tax) for severance and related employee costs globally and (ii) other restructuring costs related to optimizing the Company's footprint and the payment of anticipated income taxes in certain jurisdictions related to the other restructuring actions. We have incurred costs of $7.3 million under the other restructuring actions as of May 30, 2026. The restructuring actions related to global footprint optimization began to be implemented in the fourth quarter of 2025 and are currently expected to be completed during fiscal year 2028. Restructuring costs are expected to be incurred over the next several fiscal quarters as the measures are implemented with the majority of the charges recognized and cash payments occurring in fiscal 2026 and 2027.

Results of Operations

Net revenue:

		Three Months Ended												Six Months Ended
		May 30,				May 31,				2026 vs				May 30,				May 31,				2026 vs
($ in millions)		2026				2025				2025				2026				2025				2025
Net revenue		$	950.3			$	898.1				5.8	%		$	1,721.1			$	1,686.8				2.0	%

We review variances in net revenue in terms of changes related to sales volume and product pricing (referred to as organic revenue growth), business acquisitions/divestitures ("M&A") and changes in foreign currency exchange rates. The following table shows the net revenue variance analysis for the second quarter and first six months of 2026 compared to the second quarter and first six months of 2025:

		Three Months Ended				Six Months Ended
		May 30, 2026 vs. May 31, 2025				May 30, 2026 vs. May 31, 2025
Organic revenue growth			2.6	%			(1.7	)%
M&A			0.1	%			0.4	%
Currency			3.1	%			3.3	%
Net revenue growth			5.8	%			2.0	%

Organic revenue increased 2.6 percent in the second quarter of 2026 compared to the second quarter of 2025 and consisted of a 6.2 percent increase in Building Adhesive Solutions, a 3.0 percent increase in Hygiene, Health and Consumable Adhesives, and a 1.0 percent decrease in Engineering Adhesives. The overall increase was driven by a 3.0 percent increase in product pricing, partially offset by a 0.4 percent decrease in sales volume. The 0.1 percent increase from M&A was due to the acquisition of ND Industries Turkey, discussed further in Operating Segment Results below. The positive 3.1 percent foreign currency impact was primarily driven by a stronger Euro, Chinese renminbi, Brazilian real, Australian dollar, Mexican peso, British pound and Polish złoty partially offset by a weaker Indian rupee and Turkish lira compared to the U.S. dollar.

Organic revenue decreased 1.7 percent in the first six months of 2026 compared to the first six months of 2025 and consisted of a 3.2 percent decrease in Hygiene, Health and Consumable Adhesives, a 1.4 percent decrease in Engineering Adhesives and a 1.1 percent increase in Building Adhesive Solutions. The overall decrease was driven by a 3.5 percent decrease in sales volume, partially offset by a 1.8 percent increase in product pricing. The 0.4 percent increase from M&A was due to the acquisition of GEM, ND Industries Taiwan and ND Industries Turkey, discussed further in Operating Segment Results below. The positive 3.3 percent foreign currency impact was primarily driven by a stronger Euro, Chinese renminbi, Brazilian real, British pound, Mexican peso and Australian dollar partially offset by a weaker Turkish lira and Indian rupee compared to the U.S. dollar.

Cost of sales:

		Three Months Ended												Six Months Ended
		May 30,				May 31,				2026 vs				May 30,				May 31,				2026 vs
($ in millions)		2026				2025				2025				2026				2025				2025
Cost of sales		$	630.6			$	611.7				3.1	%		$	1,165.4			$	1,173.3				(0.7	)%
Percent of net revenue			66.4	%			68.1	%							67.7	%			69.6	%

Cost of sales as a percentage of net revenue in the second quarter of 2026 compared to the second quarter of 2025 decreased 170 basis points. Raw material cost as a percentage of net revenue decreased 230 basis points in 2026 compared to 2025 primarily due to higher product pricing. Other manufacturing costs as a percentage of net revenue increased 60 basis points in 2026 compared to 2025 due to higher manufacturing and distribution costs partially offset by restructuring actions.

Cost of sales as a percentage of net revenue in the first six months of 2026 compared to the first six months of 2025 decreased 190 basis points. Raw material cost as a percentage of net revenue decreased 240 basis points in 2026 compared to 2025 primarily due to higher product pricing and the impact of acquisitions. Other manufacturing costs as a percentage of net revenue increased 50 basis points in 2026 compared to 2025 due to higher manufacturing and distribution costs.

Gross profit:

		Three Months Ended												Six Months Ended
		May 30,				May 31,				2026 vs				May 30,				May 31,				2026 vs
($ in millions)		2026				2025				2025				2026				2025				2025
Gross profit		$	319.7			$	286.4				11.6	%		$	555.7			$	513.5				8.2	%
Percent of net revenue			33.6	%			31.9	%							32.3	%			30.4	%

Gross profit in the second quarter of 2026 increased 11.6 percent and gross profit margin increased 170 basis points compared to the second quarter of 2025. The increase in gross profit margin was due to higher product pricing and the impact of restructuring actions, partially offset by higher manufacturing and distribution costs.

Gross profit in the first six months of 2026 increased 8.2 percent and gross profit margin increased 190 basis points compared to the first six months of 2025. The increase in gross profit margin was due to higher product pricing and the impact of acquisitions and restructuring actions, partially offset by higher manufacturing and distribution costs.

Selling, general and administrative (SG&A) expenses:

		Three Months Ended												Six Months Ended
		May 30,				May 31,				2026 vs				May 30,				May 31,				2026 vs
($ in millions)		2026				2025				2025				2026				2025				2025
SG&A		$	202.4			$	186.3				8.6	%		$	386.8			$	367.0				5.4	%
Percent of net revenue			21.3	%			20.7	%							22.5	%			21.8	%

SG&A expenses for the second quarter of 2026 compared to the second quarter of 2025 increased 60 basis points as a percentage of net revenue. The increase was due to the impact of higher compensation expense and a weaker U.S. dollar compared to various foreign currencies, partially offset by higher revenue.

SG&A expenses for the first six months of 2026 compared to the first six months of 2025 increased 70 basis points as a percentage of net revenue. The increase was due to the impact of higher compensation expense, acquisitions and a weaker U.S. dollar compared to various foreign currencies, partially offset by higher revenue.

Other income, net:

		Three Months Ended												Six Months Ended
		May 30,				May 31,				2026 vs				May 30,				May 31,				2026 vs
($ in millions)		2026				2025				2025				2026				2025				2025
Other income, net		$	5.6			$	7.1				(21.1	)%		$	12.4			$	10.3				20.4	%

Other income, net in the second quarter of 2026 included $6.5 million of net defined benefit pension benefits, $0.3 million of other income and $1.2 million of currency transaction loss. Other income, net in the second quarter of 2025 included $5.7 million of net defined benefit pension benefits and $1.4 million of currency transaction gains.

Other income, net in the first six months of 2026 included $12.8 million of net defined benefit pension benefits, $0.4 million of other income and $0.8 million of currency transaction loss. Other income, net in the first six months of 2025 included $11.4 million of net defined benefit pension benefits and $2.0 million of currency transaction gains, partially offset by a $1.5 million loss on the sale of our North American Flooring business ("NA Flooring") and $1.6 million of other expense.

Interest expense:

		Three Months Ended												Six Months Ended
		May 30,				May 31,				2026 vs				May 30,				May 31,				2026 vs
($ in millions)		2026				2025				2025				2026				2025				2025
Interest expense		$	32.8			$	34.9				(6.0	)%		$	65.6			$	66.9				(1.9	)%

Interest expense in the second quarter of 2026 was $32.8 million compared to $34.9 million in the second quarter of 2025 due to lower interest rates partially offset by higher debt levels.

Interest expense in the first six months of 2026 was $65.6 million compared to $66.9 million in the first six months of 2025 due to lower interest rates partially offset by higher debt levels.

Interest income:

	Three Months Ended							Six Months Ended
	May 30,		May 31,		2026 vs			May 30,		May 31,		2026 vs
($ in millions)	2026		2025		2025			2026		2025		2025
Interest income	$	2.0	$	0.9		122.2	%	$	4.0	$	2.0		100.0	%

Interest income in the second quarter of 2026 and 2025 was $2.0 million and $0.9 million, respectively, consisting primarily of interest related to net investment hedge activity and other miscellaneous interest income.

Interest income in the first six months of 2026 and 2025 was $4.0 million and $2.0 million, respectively, consisting primarily of interest related to net investment hedge activity and other miscellaneous interest income.

Income taxes:

		Three Months Ended												Six Months Ended
		May 30,				May 31,				2026 vs				May 30,				May 31,				2026 vs
($ in millions)		2026				2025				2025				2026				2025				2025
Income taxes		$	25.6			$	32.7				(21.7	)%		$	33.0			$	38.7				(14.7	)%
Effective tax rate			27.8	%			44.7	%							27.6	%			42.1	%

Income tax expense of $25.6 million in the second quarter of 2026 includes $0.3 million of discrete tax expense. Excluding the discrete tax expense, the overall effective tax rate was 27.4 percent. The discrete tax expense relates to various U.S. and foreign tax matters. Income tax expense of $32.7 million in the second quarter of 2025 includes $14.0 million of discrete tax expense. Excluding the discrete tax expense, the overall effective tax rate was 25.7 percent. The discrete tax expense related to the impact of withholding tax recorded on earnings that are no longer permanently reinvested as well as other various U.S. and foreign tax matters.

Income tax expense of $33.0 million in the first six months of 2026 includes $0.5 million of discrete tax expense. Excluding the discrete tax expense, the overall effective tax rate was 27.2 percent. The discrete tax expense relates to various U.S. and foreign tax matters. Income tax expense of $38.7 million in the first six months of 2025 includes $15.0 million of discrete tax expense. Excluding the discrete tax expense, the overall effective tax rate was 25.8 percent. The discrete tax expense related to the impact of withholding tax recorded on earnings that are no longer permanently reinvested as well as other various U.S. and foreign tax matters.

Income from equity method investments:

		Three Months Ended												Six Months Ended
		May 30,				May 31,				2026 vs				May 30,				May 31,				2026 vs
($ in millions)		2026				2025				2025				2026				2025				2025
Income from equity method investments		$	1.3			$	1.4				(7.1	)%		$	2.2			$	1.9				15.8	%

The income from equity method investments relates to our 50 percent ownership of the Sekisui-Fuller joint venture in Japan. The lower income for the second quarter of 2026 compared to the second quarter of 2025 is primarily due to the weakening of the Japanese yen compared to the U.S. dollar.

The income from equity method investments relates to our 50 percent ownership of the Sekisui-Fuller joint venture in Japan. The higher income for the first six months of 2026 compared to the first six months of 2025 is due to higher net income in our joint venture during the year compared to the prior year, partially offset by the weakening of the Japanese yen compared to the U.S. dollar.

Net income attributable to H.B. Fuller:

		Three Months Ended												Six Months Ended
		May 30,				May 31,				2026 vs				May 30,				May 31,				2026 vs
($ in millions)		2026				2025				2025				2026				2025				2025
Net income attributable to H.B. Fuller		$	67.8			$	41.8				62.2	%		$	88.9			$	55.1				61.4	%
Percent of net revenue			7.1	%			4.7	%							5.2	%			3.3	%

The net income attributable to H.B. Fuller in the second quarter of 2026 was $67.8 million compared to $41.8 million in the second quarter of 2025. The diluted earnings per share in the second quarter of 2026 was $1.23 per share as compared to $0.76 per share in the second quarter of 2025.

The net income attributable to H.B. Fuller in the first six months of 2026 was $88.9 million compared to $55.1 million in the first six months of 2025. The diluted earnings per share in the first six months of 2026 was $1.61 per share as compared to $0.99 per share in the first six months of 2025.

Adjusted EBITDA:

		Three Months Ended												Six Months Ended
		May 30,				May 31,				2026 vs				May 30,				May 31,				2026 vs
($ in millions)		2026				2025				2025				2026				2025				2025
Adjusted EBITDA		$	181.0			$	165.7				9.3	%		$	299.7			$	280.0				7.0	%
Percent of net revenue			19.1	%			18.4	%							17.4	%			16.6	%

Adjusted EBITDA for H.B. Fuller in the second quarter of 2026 was $181.0 million compared to $165.7 million in the second quarter of 2025. Adjusted EBITDA as a percentage of net revenue increased 70 basis points in the second quarter of 2026 compared to second quarter of 2025 due to higher gross profit, partially offset by higher compensation expense and higher foreign currency losses. For a reconciliation of Adjusted EBITDA to net income attributable to H.B. Fuller as reflected in the unaudited consolidated statement of income see "Non-GAAP Measures" below.

Adjusted EBITDA for H.B. Fuller in the first six months of 2026 was $299.7 million compared to $280.0 million in the first six months of 2025. Adjusted EBITDA as a percentage of net revenue increased 80 basis points in the first six months of 2026 compared to first six months of 2025 primarily due to higher gross profit, partially offset by higher compensation expense and higher foreign currency losses. For a reconciliation of Adjusted EBITDA to net income attributable to H.B. Fuller as reflected in the unaudited consolidated statement of income see "Non-GAAP Measures" below.

Operating Segment Results

Our three reportable operating segments consist of Hygiene, Health and Consumable Adhesives, Engineering Adhesives and Building Adhesive Solutions. We are required to report segment information in the same way that we internally organize our business for assessing performance and making decisions regarding allocation of resources. Revenue and Adjusted EBITDA of each of our segments are regularly reviewed by our chief executive officer, who acts as our chief operating decision maker, to make decisions about resources to be allocated to the segments and assess their performance. Adjusted EBITDA is defined as net income before interest, income taxes, depreciation and amortization and foreign currency gain/loss, adjusted for other items within a relevant period which are not reflective of the segment's operating performance in the period. Corporate expenses, other than those included in Corporate Unallocated, are allocated to each operating segment.

The tables below provide certain information regarding the net revenue, Adjusted EBITDA and Adjusted EBITDA margin of each of our operating segments. Adjusted EBITDA margin is defined as Adjusted EBITDA divided by net revenue for each operating segment. Corporate Unallocated amounts include business acquisition and integration costs, organizational restructuring charges and project costs associated with implementing a global Enterprise Resource Planning ("ERP") system that we refer to as Project ONE.

Net Revenue by Segment:

		Three Months Ended																Six Months Ended
		May 30, 2026								May 31, 2025								May 30, 2026								May 31, 2025
		Net				% of				Net				% of				Net				% of				Net				% of
($ in millions)		Revenue				Total				Revenue				Total				Revenue				Total				Revenue				Total
Hygiene, Health and Consumable Adhesives		$	421.9				44	%		$	397.5				44	%		$	768.4				45	%		$	765.7				46	%
Engineering Adhesives			283.2				30	%			276.4				31	%			525.7				30	%			513.2				30	%
Building Adhesive Solutions			245.2				26	%			224.2				25	%			427.0				25	%			407.9				24	%
Segment total		$	950.3				100	%		$	898.1				100	%		$	1,721.1				100	%		$	1,686.8				100	%
Corporate Unallocated			-				-				-				-				-				-				-				-
Total		$	950.3				100	%		$	898.1				100	%		$	1,721.1				100	%		$	1,686.8				100	%

Segment Adjusted EBITDA

		Three Months Ended																Six Months Ended
		May 30, 2026								May 31, 2025								May 30, 2026								May 31, 2025
		Adjusted				% of				Adjusted				% of				Adjusted				% of				Adjusted				% of
($ in millions)		EBITDA				Total				EBITDA				Total				EBITDA				Total				EBITDA				Total
Hygiene, Health and Consumable Adhesives		$	75.6				42	%		$	62.1				37	%		$	123.6				42	%		$	108.9				39	%
Engineering Adhesives			63.5				35	%			63.3				38	%			111.7				37	%			107.5				38	%
Building Adhesive Solutions			41.4				23	%			37.5				23	%			63.0				21	%			59.3				21	%
Segment total		$	180.5				100	%		$	162.9				98	%		$	298.3				100	%		$	275.7				98	%
Corporate Unallocated			0.5				0	%			2.8				2	%			1.4				0	%			4.3				2	%
Total		$	181.0				100	%		$	165.7				100	%		$	299.7				100	%		$	280.0				100	%

Hygiene, Health and Consumable Adhesives

		Three Months Ended												Six Months Ended
		May 30,				May 31,				2026 vs				May 30,				May 31,				2026 vs
($ in millions)		2026				2025				2025				2026				2025				2025
Net revenue		$	421.9			$	397.5				6.1	%		$	768.4			$	765.7				0.4	%
Segment adjusted EBITDA		$	75.6			$	62.1				21.7	%		$	123.6			$	108.9				13.5	%
Segment adjusted EBITDA margin			17.9	%			15.6	%							16.1	%			14.2	%

The following table provides details of the Hygiene, Health and Consumable Adhesives net revenue variances:

		Three Months Ended				Six Months Ended
		May 30, 2026 vs. May 31, 2025				May 30, 2026 vs. May 31, 2025
Organic revenue growth			3.0	%			(3.2	)%
M&A			0.0	%			0.4	%
Currency			3.1	%			3.2	%
Total			6.1	%			0.4	%

Net revenue increased 6.1 percent in the second quarter of 2026 compared to the second quarter of 2025. Organic revenue growth increased due to an increase in product pricing, partially offset by a decrease in sales volume. The positive currency effect was due to a stronger Euro, Brazilian real, Chinese renminbi and Mexican peso partially offset by a weaker Indian rupee compared to the U.S. dollar. Segment adjusted EBITDA increased 21.7 percent in the second quarter of 2026 compared to the second quarter of 2025 primarily due to higher product pricing, partially offset by higher manufacturing and distribution costs and higher compensation expense. Segment adjusted EBITDA margin increased 230 basis points primarily due to higher segment adjusted EBITDA, partially offset by the impact of higher revenue.

Net revenue increased 0.4 percent in the first six months of 2026 compared to the first six months of 2025. Organic revenue growth decreased due to a decrease in sales volume, partially offset by an increase in product pricing. The 0.4 percent increase in net revenue from M&A was due to the acquisition of GEM in the first quarter of 2025. The positive currency effect was due to a stronger Euro, Brazilian real, Chinese renminbi and Mexican peso partially offset by a weaker Indian rupee compared to the U.S. dollar. Segment adjusted EBITDA increased 13.5 percent in the first six months of 2026 compared to the first six months of 2025 primarily due to higher product pricing, the impact of acquisitions, partially offset by higher compensation expense. Segment adjusted EBITDA margin increased 190 basis points primarily due to higher segment adjusted EBITDA, partially offset by the impact of higher revenue.

Engineering Adhesives

		Three Months Ended												Six Months Ended
		May 30,				May 31,				2026 vs				May 30,				May 31,				2026 vs
($ in millions)		2026				2025				2025				2026				2025				2025
Net revenue		$	283.2			$	276.4				2.5	%		$	525.7			$	513.2				2.4	%
Segment adjusted EBITDA		$	63.5			$	63.3				0.3	%		$	111.7			$	107.5				3.9	%
Segment adjusted EBITDA margin			22.4	%			22.9	%							21.2	%			20.9	%

The following tables provide details of the Engineering Adhesives net revenue variances:

		Three Months Ended				Six Months Ended
		May 30, 2026 vs. May 31, 2025				May 30, 2026 vs. May 31, 2025
Organic revenue growth			(1.0	)%			(1.4	)%
M&A			0.3	%			0.6	%
Currency			3.2	%			3.2	%
Total			2.5	%			2.4	%

Net revenue increased 2.5 percent in the second quarter of 2026 compared to the second quarter of 2025. Organic revenue growth decreased due to a decrease in sales volume, partially offset by an increase in product pricing. The 0.3 percent increase in net revenue from M&A was due to the acquisition of ND Industries Taiwan and ND Industries Turkey. The positive currency effect was due to a stronger Chinese renminbi and Euro compared to the U.S. dollar. Segment adjusted EBITDA increased 0.3 percent in the second quarter of 2026 compared to the second quarter of 2025. Segment adjusted EBITDA margin decreased 50 basis points primarily due to the impact of higher revenue.

Net revenue increased 2.4 percent in the first six months of 2026 compared to the first six months of 2025. Organic revenue growth decreased due to a decrease in sales volume, partially offset by an increase in product pricing. The 0.6 percent increase in net revenue from M&A was due to the acquisition of ND Industries Taiwan and ND Industries Turkey. The positive currency effect was due to a stronger Euro and Chinese renminbi compared to the U.S. dollar. Segment adjusted EBITDA increased 3.9 percent in the first six months of 2026 compared to the first six months of 2025 primarily due to higher product pricing and the impact of acquisitions, partially offset by higher compensation expense. Segment adjusted EBITDA margin increased 30 basis points.

Building Adhesive Solutions

		Three Months Ended												Six Months Ended
		May 30,				May 31,				2026 vs				May 30,				May 31,				2026 vs
($ in millions)		2026				2025				2025				2026				2025				2025
Net revenue		$	245.2			$	224.2				9.4	%		$	427.0			$	407.9				4.7	%
Segment adjusted EBITDA		$	41.4			$	37.5				10.4	%		$	63.0			$	59.3				6.2	%
Segment adjusted EBITDA margin			16.9	%			16.7	%							14.8	%			14.5	%

The following tables provide details of the Building Adhesive Solutions net revenue variances:

		Three Months Ended				Six Months Ended
		May 30, 2026 vs. May 31, 2025				May 30, 2026 vs. May 31, 2025
Organic revenue growth			6.2	%			1.1	%
M&A			0.0	%			0.0	%
Currency			3.2	%			3.6	%
Total			9.4	%			4.7	%

Net revenue increased 9.4 percent in the second quarter of 2026 compared to the second quarter of 2025. Organic growth increased due to an increase in sales volume and product pricing. The positive currency effect was due to a stronger Euro and Australian dollar compared to the U.S. dollar. Segment adjusted EBITDA increased 10.4 percent in the second quarter of 2026 compared to the second quarter of 2025 primarily due to higher revenue, partially offset by higher manufacturing and distribution costs and higher compensation expense. Segment adjusted EBITDA margin increased 20 basis points.

Net revenue increased 4.7 percent in the first six months of 2026 compared to the first six months of 2025. Organic growth increased due to an increase in product pricing, partially offset by a decrease in sales volume. The positive currency effect was due to a stronger Euro and British pound compared to the U.S. dollar. Segment adjusted EBITDA increased 6.2 percent in the first six months of 2026 compared to the first six months of 2025 primarily due to higher product pricing, partially offset by higher manufacturing and distribution costs and higher compensation expense. Segment adjusted EBITDA margin increased 30 basis points.

Corporate Unallocated

		Three Months Ended												Six Months Ended
		May 30,				May 31,				2026 vs				May 30,				May 31,				2026 vs
($ in millions)		2026				2025				2025				2026				2025				2025
Net revenue		$	-			$	-				0.0	%		$	-			$	-				0.0	%
Adjusted EBITDA		$	0.5			$	2.8				(82.1	)%		$	1.4			$	4.3				(67.4	)%

Corporate Unallocated amounts include business acquisition and integration costs, organizational restructuring charges and project costs associated with implementing a global Enterprise Resource Planning ("ERP") system that we refer to as Project ONE.

Financial Condition, Liquidity and Capital Resources

Total cash and cash equivalents as of May 30, 2026 were $114.1 million compared to $107.2 million as of November 29, 2025 and $96.8 million as of May 31, 2025. The majority of the $114.1 million in cash and cash equivalents as of May 30, 2026 was held outside the United States. Total long and short-term debt was $2,072.2 million as of May 30, 2026, $2,016.9 million as of November 29, 2025 and $2,112.4 million as of May 31, 2025. The total debt to total capital ratio as measured by total debt divided by total debt plus total stockholders' equity was 49.9 percent as of May 30, 2026 as compared to 50.2 percent as of November 29, 2025 and 53.0 percent as of May 31, 2025.

We believe that cash flows from operating activities will be adequate to meet our short-term and long-term liquidity and capital expenditure needs. In addition, we believe we have the ability to obtain both short-term and long-term debt to meet our financing needs for the foreseeable future. Cash available in the United States has historically been sufficient and we expect it will continue to be sufficient to fund U.S. operations, U.S. capital spending and U.S. pension and other postretirement benefit contributions in addition to funding U.S. acquisitions, dividend payments, debt service and share repurchases as needed. For those international earnings considered to be reinvested indefinitely, we currently have no intention to, and plans do not indicate a need to, repatriate these funds for U.S. operations.

Our credit agreements include restrictive covenants that, if not met, could lead to a renegotiation of our credit lines and a significant increase in our cost of financing. As of May 30, 2026, we were in compliance with all covenants of our credit agreement contractual obligations as shown in the following table:

Covenant		Debt Instrument		Measurement		Result as of May 30, 2026
Secured Total Indebtedness / TTM1 EBITDA		Revolving Facility and Term Loan A Facility		Not greater than 4.50		2.3
TTM1 EBITDA / Consolidated Interest Expense		Revolving Facility and Term Loan A Facility		Not less than 2.0		5.2

1 TTM = Trailing 12 months

EBITDA for covenant purposes is defined as consolidated net income, plus (i) interest expense, (ii) expense for taxes paid or accrued, (iii) depreciation and amortization, (iv) certain non-cash impairment losses, (v) extraordinary non-cash losses incurred other than in the ordinary course of business, (vi) nonrecurring extraordinary non-cash restructuring charges and the non-cash impact of purchase accounting, (vii) any non-cash charge for the excess of rent expense over actual cash rent paid due to the use of straight-line rent, non-cash charge pursuant to any management equity plan, stock option plan or any other management or employee benefit, (viii) any non-cash finance charges in respect of any pension liabilities or other provisions and income (loss) attributable to deferred compensation plans, (ix) any non-recurring or unusual cash restructuring charges and operating improvements, (x) cost savings initiative and cost synergies related to acquisitions within 12 months, (xi) non-capitalized charges relating to the Company's SAP implementation, (xii) fees, costs, expenses and charges incurred in connection with the financing, (xiii) fees, costs, expenses, make-whole or penalty payments and other similar items arising out of acquisitions, investments and dispositions, the incurrence, issuance, repayment or refinancing of indebtedness and any issuance of equity interests; minus, non-recurring or unusual non-cash gains incurred not in the ordinary course of business. Provided that the aggregate amounts that may be added back for any period pursuant to clauses (ix), (x) and (xi) shall not exceed 15% of EBITDA for such period (calculated prior to giving effect to all addbacks and adjustments). For Secured Total Indebtedness / TTM EBITDA ratio, TTM EBITDA is adjusted for the pro forma results from Material Acquisitions and Material Divestitures, both as defined in the Second Amended and Restated Credit Agreement, as if the acquisition or divestiture occurred at the beginning of the calculation period. The full definition is set forth in the Second Amended and Restated Credit Agreement filed as an exhibit to the Company's 8-K filing dated February 21, 2023.

Consolidated Interest Expense for covenant purposes is defined as the interest expense (including without limitation to the portion of capital lease obligations that constitutes imputed interest in accordance with GAAP) of the Company and its subsidiaries calculated on a consolidated basis for such period with respect to all outstanding indebtedness allocable to such period in accordance with GAAP, including net costs (or benefits) under Interest Rate Swap Agreements and commissions, discounts and other fees and charges with respect to letters of credit and the interest component of all Attributable Receivables Indebtedness.

We believe we have the ability to meet all of our contractual obligations and commitments for the next twelve months.

Selected Metrics of Liquidity

Key metrics we monitor are net working capital as a percentage of annualized net revenue, accounts receivable days sales outstanding ("DSO"), inventory days on hand ("DOH"), accounts payable days purchases outstanding ("DPO"), free cash flow and debt capitalization ratio.

		May 30,				May 31,
		2026				2025
Net working capital as a percentage of annualized net revenue1			16.4	%			16.6	%
Accounts receivable DSO (in days)2			60				59
Inventory DOH (in days)			79				77
Accounts payable DPO (in days)4			76				72
Free cash flow5		$	12.8			$	(6.7	)
Total debt to total capital ratio6			49.9	%			53.0	%

¹ Net working capital (accounts receivable, net plus inventory minus accounts payable) divided by annualized net revenue (current quarter multiplied by four).

² Accounts receivable, net multiplied by 91 (13 weeks) and divided by the net revenue for the quarter.

³ Total inventory multiplied by 91 (13 weeks) and divided by cost of goods sold for the quarter.

⁴ Accounts payable multiplied by 91 (13 weeks) and divided by cost of goods sold for the quarter.

⁵ Year-to-date net cash provided by operating activities, less purchased property, plant and equipment. See "Non GAAP Measures" for reconciliation of net cash provided by operating activities to free cash flow.

⁶ Total debt divided by (total debt plus total stockholders' equity).

Free cash flow, a non-GAAP financial measure, is defined as net cash provided by operating activities less purchased property, plant and equipment. Free cash flow is an integral financial measure used by the Company to assess its ability to generate cash in excess of its operating needs, therefore, the Company believes this financial measure provides useful information to investors. For a reconciliation of net cash provided by operating activities to free cash flow see "Non-GAAP Measures" below.

Summary of Cash Flows

Cash Flows from Operating Activities:

		Six Months Ended
		May 30,				May 31,
($ in millions)		2026				2025
Net cash provided by operating activities		$	117.2			$	57.8

Net income including non-controlling interest was $88.9 million in the first six months of 2026 compared to $55.1 million in the first six months of 2025. Depreciation and amortization expense totaled $92.4 million in the first six months of 2026 compared to $87.3 million in the first six months of 2025. Deferred income taxes were a use of cash of $9.1 million in the first six months of 2026 compared to $14.1 million in the first six months of 2025. Accrued compensation was a use of cash of $19.6 million in the first six months of 2026 compared to $23.5 million in the first six months of 2025. Other assets were a use of cash of $9.3 million in the first six months of 2026 compared to $2.4 million in the first six months of 2025. Other liabilities were a use of cash of $6.1 million in the first six months of 2026 compared to a source of cash $24.8 million in the first six months of 2025.

Changes in net working capital (accounts receivable, net, inventory and accounts payables) accounted for a use of cash of $24.7 million in the first six months of 2026 compared $57.5 million in the first six months of 2025. The table below provides the cash flow impact due to changes in the components of net working capital and an assessment of each of the components:

	Six Months Ended
	May 30,			May 31,
($ in millions)	2026			2025
Accounts receivable, net	$	(53.9	)	$	(28.9	)
Inventory		(51.3	)		(40.2	)
Accounts payable		80.5			11.6
Total cash flow impact	$	(24.7	)	$	(57.5	)

●

Accounts receivable, net - Accounts receivable, net was a use of cash of $53.9 million and $28.9 million in the first six months of 2026 and 2025, respectively. The higher use of cash in 2026 compared to 2025 was due to higher accounts receivable balances in the current year compared to the prior year and more cash collected on accounts receivable in 2025 compared to 2026. The DSO were 60 days at May 30, 2026 and 59 days at May 31, 2025.

●

Inventory - Inventory was a use of cash of $51.3 million and $40.2 million in the first six months of 2026 and 2025, respectively. The higher use of cash in 2026 compared to 2025 was due to higher inventory purchases in 2026 compared to 2025. Inventory days on hand were 79 days as of May 30, 2026 and 77 days as of May 31, 2025.

●

Accounts payable - Accounts payable was a source of cash of $80.5 million and $11.6 million in the first six months of 2026 and 2025, respectively. The higher source of cash in 2026 compared to 2025 reflects lower payments on accounts payable in the current year compared to the prior year. Days payable outstanding were 76 days as of May 30, 2026 and 72 days as of May 31, 2025.

Cash Flows from Investing Activities:

		Six Months Ended
		May 30,				May 31,
($ in millions)		2026				2025
Net cash used in investing activities		$	(111.6	)		$	(152.0	)

Purchases of property, plant and equipment were $104.4 million during the first six months of 2026 compared to $64.5 million for the same period of 2025. This difference reflects the timing of capital projects and expenditures related to growth initiatives.

We did not pay any cash for business acquisitions during the first six months of 2026. During the first six months of 2025, we paid $162.0 million in cash for business acquisitions and we received $75.7 million in cash related to the sale of our NA Flooring business.

Cash Flows from Financing Activities:

		Six Months Ended
		May 30,				May 31,
($ in millions)		2026				2025
Net cash (used in) provided by financing activities		$	(9.2	)		$	12.5

In the first six months of 2026, borrowings on our revolving credit facility were $627.0 million and repayments on our revolving credit facility and our long-term debt totaled $571.7 million. These borrowings are for general working capital purposes and permitted acquisitions. Borrowings on our revolving credit facility were $784.9 million and repayments on our revolving credit facility and our long-term debt totaled $687.8 million in the first six months of 2025. There were no net payments of notes payable in the first six months of 2026 compared to $0.6 million in the same period of 2025. Cash dividends paid were $26.0 million in the first six months of 2026 compared to $24.9 million in the same period of 2025. Repurchases of common stock were $48.8 million in the first six months of 2026 compared to $60.7 million in the same period of 2025.

Non-GAAP Measures

We use both GAAP and non-GAAP financial measures for operational and financial decision making, and to assess Company and segment business performance. Our non-GAAP measures include Adjusted EBITDA and Free Cash Flow. Our calculation of these non-GAAP measures may not be comparable to similarly titled measures of other companies due to potential differences between companies in the method of calculation. As a result, the use of these non-GAAP measures has limitations and should not be considered superior to, in isolation from, or as a substitute for, related U.S. GAAP measures.

These non-GAAP measures allow management and investors to view operating trends, perform analytical comparisons and benchmark performance between periods and among geographic regions to understand operating performance without regard to items we do not consider a component of our core operating performance. Furthermore, these non-GAAP measures allow investors the opportunity to measure and monitor our performance against our externally communicated targets and evaluate the investment decisions being made by management to improve Adjusted EBITDA. Management uses these measures in its financial, investment and operational decision-making processes, for internal reporting and as part of its forecasting and budgeting processes. Further, our Board of Directors uses certain of these and other measures as key metrics to determine management performance under our performance-based compensation plans. For these reasons, we believe these non-GAAP measures are useful for our investors.

Adjusted EBITDA is presented net of noncontrolling interests and is used by management and can be used by investors to review our consolidated operating results because it excludes depreciation, amortization, interest income, interest expense and income taxes as well as certain additional adjustments that are not considered part of our core operations. Examples of adjustments to EBITDA include, but are not limited to, costs for acquisition projects, organizational realignment, Project One, business divestitures, discrete taxes, and the income tax effect on these adjustments. For Adjusted EBITDA, once we have made an adjustment in the current period for an item, we will also adjust the related non-GAAP measure in future periods in which there is an impact from the item. The following table reflects the manner in which Adjusted EBITDA is determined and provides a reconciliation of Adjusted EBITDA to Net income attributable to H.B. Fuller, the most directly comparable financial measure calculated and reported in accordance with U.S. GAAP.

Reconciliation of Net income attributable to H.B. Fuller to Adjusted EBITDA

		Three Months Ended								Six Months Ended
		May 30,				May 31,				May 30,				May 31,
		2026				2025				2026				2025
Net income attributable to H.B. Fuller		$	67,805			$	41,828			$	88,850			$	55,076
Adjustments:
Acquisition project costs			1,395				3,602				2,325				13,430
Organizational realignment			4,413				6,635				14,435				15,409
Project One			2,387				2,581				5,440				5,646
Other1			3,024				44				2,929				44
Discrete tax items			356				13,961				454				14,952
Income tax effect on adjustments			(1,848	)			(3,999	)			(5,386	)			(9,907	)
Adjusted net income attributable to H.B. Fuller			77,532				64,652				109,047				94,650
Add:
Interest expense2			32,584				34,484				64,957				66,514
Interest income			(1,961	)			(854	)			(4,030	)			(1,954	)
Adjusted Income taxes			27,075				22,765				37,937				33,626
Depreciation and Amortization expense 3			45,815				44,613				91,838				87,180
Adjusted EBITDA		$	181,045			$	165,660			$	299,749			$	280,016

¹ Other for the three and six months ended May 30, 2026 includes acquired environmental liabilities and ongoing litigation and product claims related to a divested business.

² Interest expense added back for EBITDA is adjusted for amounts already included in adjusted net income attributable to H.B. Fuller.

³ Depreciation and amortization expense added back for EBITDA is adjusted for amounts already included in adjusted net income attributable to H.B. Fuller.

Free cash flow, a non-GAAP financial measure, is defined as net cash provided by operating activities less purchased property, plant and equipment. Free cash flow is an integral financial measure used by the Company to assess its ability to generate cash in excess of its operating needs, therefore, the Company believes this financial measure provides useful information to investors. The following table reflects the manner in which free cash flow is determined and provides a reconciliation of free cash flow to net cash provided by operating activities, the most directly comparable financial measure calculated and reported in accordance with U.S. GAAP.

Reconciliation of Net cash provided by operating activities to Free cash flow

		Six Months Ended
($ in millions)		May 30, 2026				May 31, 2025
Net cash provided by operating activities		$	117.2			$	57.8
Less: Purchased property, plant and equipment			104.4				64.5
Free cash flow		$	12.8			$	(6.7	)

Forward-Looking Statements and Risk Factors

The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements. This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements may be identified by the use of words like "plan," "expect," "aim," "believe," "project," "anticipate," "intend," "estimate," "will," "should," "could" (including the negative or variations thereof) and other expressions that indicate future events and trends. These plans and expectations are based upon certain underlying assumptions, including those mentioned with the specific statements. Such assumptions are in turn based upon internal estimates and analyses of current market conditions and trends, our plans and strategies, economic conditions and other factors. These plans and expectations and the assumptions underlying them are necessarily subject to risks and uncertainties inherent in projecting future conditions and results. Actual results could differ materially from expectations expressed in the forward-looking statements if one or more of the underlying assumptions and expectations proves to be inaccurate or is unrealized. In addition to the factors described in this report, Item 1A. Risk Factors identifies some of the important factors that could cause our actual results to differ materially from those in any such forward-looking statements. In order to comply with the terms of the safe harbor, we have identified these important factors which could affect our financial performance and could cause our actual results for future periods to differ materially from the anticipated results or other expectations expressed in the forward-looking statements. These factors should be considered, together with any similar risk factors or other cautionary language that may be made elsewhere in this Quarterly Report on Form 10-Q.

The list of important factors in Item 1A. Risk Factors does not necessarily present the risk factors in order of importance. This disclosure, including that under Forward-Looking Statements and Risk Factors, and other forward-looking statements and related disclosures made by us in this report and elsewhere from time to time, represents our best judgment as of the date the information is given. We do not undertake responsibility for updating any of such information, whether as a result of new information, future events, or otherwise, except as required by law. Investors are advised, however, to consult any further public company disclosures (such as in filings with the SEC or in our press releases) on related subjects.