For the second quarter ended May 28, H.B. Fuller’s net revenue was $387.9 million, a 6.8% increase over the second quarter of 2004. Improved pricing, volume, and positive currency effects contributed 6.6%, 0.1%, and two percent, respectively. The deconsolidation of the company’s Japanese operations, due to entering into a joint venture with Sekisui Chemical Company in Japan, resulted in an offsetting 1.9% impact, the company said.
The global adhesives unit’s net revenue fell 6.7%, while the Full-Valu/Specialty group’s net revenue rose 7.2% compared to the same quarter one year ago.
“We continued to make incremental improvement with respect to pricing during the second quarter. Unfortunately, raw material cost increases still outstripped our price increases, resulting in a year-over-year deterioration in gross profit margin,” said CEO Al Stroucken. “Clearly, we still have quite a bit of catching up to do in light of the inflationary raw material environment. Therefore, we must remain steadfast in our approach to the marketplace in the quarters ahead in order to bridge the gap.”
Fuller’s second quarter net income was $16.2 million compared to $11.2 million in the same period one year ago. This year’s net income includes, on a pre-tax basis, a $4.8 million gain on the sale of a 20% equity interest in its China operations to Sekisui Chemical as previously announced, and $2.9 million in severance and other expenses associated with the outsourcing of a portion of the company’s IT organization and other business reorganizations, according to H.B. Fuller.
For the first six months, net revenue rose 8.7% to $740.9 million and net income was $22.7 million.