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Year-over-year tone shift - average net-tone change across Risk Factors and MD&A vs the prior 10-K. This filing is -0.09pp more bearish than last year's.
Why YoY instead of absolute: the LM lexicon has ~6.6× more negative words than positive (legal/risk-disclosure language is heavy on hedging), so every 10-K reads bearish on raw tone. Year-over-year change strips that bias and surfaces the actual shift in management's framing.
Tone shift by section
The two components the gauge averages: how Risk Factors and MD&A each shifted in net tone versus last year's 10-K. The headline above is their average, so a green needle over a soft section just means the other section carried it.
Risk Factors
-0.15pp
Flat
Net-tone change vs last year's 10-K.
MD&A
-0.02pp
Flat
Net-tone change vs last year's 10-K.
Per-snippet highlights
Sentence-level sentiment highlighting with category and subcategory filters is coming once the snippet-scoring pipeline lands. For now, dig into the actual section text on the Sections tab.
Language change vs prior 10-K
Risk Factors (Item 1A) - words with the biggest YoY frequency increase
Negative rising
negatively+2
failure+2
restructuring+1
penalties+1
disruption+1
Positive rising
effective+1
beautiful+1
Risk Factors (Item 1A)
5,052 words
Item 1A. Risk Factors
As a global manufacturer of adhesives, sealants and other specialty chemical products, we operate in a business environment that is subject to various risks and uncertainties. Below are the most significant factors that could adversely affect our business, financial condition and results of operations.
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Strategic and Operational Risks
Increases in prices and declines in the availability of raw materials have adversely affected, and could continue to erode, our profit margins, and could negatively impact our operating results.
In 2025, raw material costs made up appr oximately 75 percent of our cost of sales. Based on 2025 financial results, a hypothetical one percent change in our raw material costs would have resulted in a change in net income of approximately $12.6 million or $0.23 per diluted share. Accordingly, changes in the cost of raw materials, due to scarcity, supplier disruptions, inflation and for other reasons, can significantly impact our earnings. Raw materials needed to manufacture products are obtained from a number of suppliers and m any of the raw materials are petroleum and natural gas based derivatives. Under normal market conditions, these raw materials are generally available on the open market from a variety of producers. While alternate supplies of most key raw materials are available, supplier production may lead to supply-demand situations for certain raw materials. The substitution of key raw materials requires us to identify new supply sources, reformulate and re-test and may require seeking re-approval from our customers using those products. From time to time, the prices and availability of these raw materials may fluctuate, which could our ability to procure necessary materials, or increase the cost of manufacturing products. If the prices of raw materials increase in a short period of time, we may be to pass these increases on to our customers in a timely manner and could experience reductions to our profit margins.
Language change vs prior 10-K
MD&A (Item 7) - words with the biggest YoY frequency increase
Negative rising
divestitures+4
litigation+3
divested+3
against+2
divestiture+2
Positive rising
gains+1
superior+1
opportunity+1
improve+1
MD&A (Item 7)
10,376 words
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
Overview
H.B. Fuller Company is a global formulator, manufacturer and marketer of adhesives and other specialty chemica l products. We have three reportable segments: Hygiene, Health and Consumable Adhesives, Engineering Adhesives and Building Adhesive Solutions. See Operating Segment Results for further discussion of changes to our operating segments in fiscal 2025.
The Hygiene, Health and Consumable Adhesives operating segment manufactures and supplies adhesives products in the assembly, packaging, converting, nonwoven, hygiene, health and beauty, flexible packaging, graphic arts and envelope markets. The Engineering Adhesives operating segment provides high-performance adhesives to the transportation, electronics, clean energy, aerospace and defense, textile, appliance and heavy machinery markets. The Building Adhesive Solutions operating segment manufactures and provides specialty adhesives, sealants, tapes and application devices for commercial building roofing systems, heavy infrastructure projects, road/highway transportation applications, telecom/5G utilities, industrial LNG plants, building envelope applications, HVAC insulation systems, performance woodworking and insulating glass.
Total Company
When reviewing our financial statements, it is important to understand how certain external factors impact us. These factors include:
Changes in the prices of our raw materials that are primarily derived from refining crude oil and natural gas,
We are at risk of cyber-attacks and other security breaches that could compromise sensitive business information, undermine our ability to operate effectively and expose us to liability, which could cause our business and reputation to suffer.
Increasingly, companies are subject to a wide variety of attacks on their networks on an ongoing basis. In addition to traditional computer “hackers,” malicious code (such as viruses and worms), phishing attempts, ransomware, employee theft or misuse, and denial of service attacks, sophisticated nation-state and nation-state supported actors engage in intrusions and attacks (including advanced persistentthreat intrusions) and add to the risks to internal networks, cloud deployed enterprise and customer-facing environments and the information they store and process. In addition, new technologies such as artificial intelligence and quantum computing may increase the frequency and magnitude of cyber-attacks. Despite significant efforts to create security barriers to such threats, it is virtually impossible for us to entirely mitigate these risks. We, and our third-party software and service providers, have experienced and will continue to experience security threats and attacks from a variety of sources.
As part of our business, we store our data, including intellectual property, and certain data about our employees, customers and vendors in our information technology systems. Our security measures may be breached as a result of third-party action, including intentionalmisconduct by computer hackers, employee error, malfeasance or otherwise. Third parties may attempt to fraudulently induce employees or customers into disclosing sensitive information such as usernames, passwords, or other information to gain access to our customers' data or our data, including our intellectual property and other confidential business information, or our information technology systems. In addition, given their size and complexity, our information systems could be vulnerable to service interruptions or to security breaches from inadvertent or intentional actions by our employees, third-party vendors and/or business partners, or from cyber-attacks by malicious third parties attempting to gainunauthorized access to our products, systems or confidential information.
We are subject to increasingly complex and evolving laws, regulations and customer-imposed controls, that govern privacy and cybersecurity. These laws and regulations have been adopted by multiple agencies at the federal and state level, as well as in foreign jurisdictions, and the regimes have not been harmonized. Our failure to comply with these regulatory regimes may result in significant liabilities or penalties.
Security breaches resulting in unauthorized access to our data, including any data regarding our employees, customers or vendors, expose us to risks. Such unauthorized access and a failure to effectively recover from breaches could compromise confidential information, disrupt our business, harm our reputation, result in the loss of customer confidence, business and assets (including trade secrets and other intellectual property), result in regulatory proceedings and legal claims, and have a negative impact on our financial results.
We experience substantial competition in each of the operating segments and geographic areas in which we operate.
Our wide variety of products are sold in numerous markets, each of which is competitive. Our competitive position in markets is, in part, subject to external factors. For example, supply and demand for certain of our products is driven by end-use markets and worldwide capacities which, in turn, impact demand for and pricing of our products. Many of our direct competitors are part of large multinational companies and may have more resources than we do. Any increase in competition may result in lost market share or reduced prices, which could result in reduced profit margins. This may impair our ability to grow or even to maintain current levels of revenues and earnings. While we have an extensive customer base, loss of certain top customers could adversely affect our financial condition and results of operations until such business is replaced, and no assurances can be made that we would be able to regain or replace any lost customers.
Failure to develop and/or acquire new products and protect our intellectual property could negatively impact our future performance and growth.
Ongoing innovation and product development are important factors in our competitiveness, as is acquisition of new technologies. Failure to create and/or acquire new products and generate new ideas, including with the effective use of artificial intelligence, could negatively impact our ability to grow and deliver strong financial results. We may face difficulties marketing products produced using new technologies including, but not limited to, sustainable adhesives, which may adversely impact our sales and financial results. Failure of our products to work as predicted could lead to liability and damage to our reputation.
We continually apply for and obtain U.S. and foreign patents to protect the results of our research for use in our operations and licensing. We are party to a number of patent licenses and other technology agreements. We rely on patents, confidentiality agreements and internal security measures to protect our intellectual property. Failure to protect this intellectual property could negatively affect our future performance and growth.
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Our operations may present health and safety risks.
Notwithstanding our emphasis on the safety of our employees and contractors and the precautions we take related to health and safety, we may be unable to avoid safety incidents relating to our operations that result in injuries or deaths. Certain safety incidents may result in legal or regulatory action that could result in increased expenses or reputational damage. We maintain workers' compensation insurance to address the risk of incurring material liabilities for injuries or deaths, but there can be no assurance that the insurance coverage will be adequate or will continue to be available on terms acceptable to us, or at all, which could result in material liabilities to us for any injuries or deaths. Changes to federal, state and local employee health and safety regulations, and legislative, regulatory or societal responses to safety incidents may result in heightened regulations or public scrutiny that may increase our compliance costs or result in reputational damage.
A failure in our information technology systems could negatively impact our business.
We rely on information technology to record and process transactions, manage our business and maintain the financial accuracy of our records. Our computer systems are subject to damage or interruption from various sources, including power outages, computer and telecommunications failures, computer viruses, security breaches, vandalism, catastrophic events and human error. Interruptions of our computer systems could disrupt our business, for example by leading to plant downtime and/or power outages and could result in the loss of business and cause us to incur additional expense.
We are in the process of implementing a global Enterprise Resource Planning (“ERP”) system, that we refer to as Project ONE, which will upgrade and standardize our information system. Implementation of Project ONE began in our North America adhesives business in 2014 and, through 2025, we completed implementation of this system in various parts of our business including Latin America (except Brazil), Australia and various other businesses in North America and Europe, India, Middle East and Africa (EIMEA). During 2026 and beyond, we will continue implementation in Brazil and Asia Pacific.
Any delays or other failure to achieve our implementation goals may adversely impact our financial results. In addition, the failure to either deliver the application on time or anticipate the necessary readiness and training needs could lead to business disruption and loss of business. Failure or abandonment of any part of the ERP system could result in a write-off of part or all of the costs that have been capitalized on the project.
Risks associated with acquisitions and divestitures could have an adverse effect on us and the inability to execute organizational restructuring may affect our results.
As part of our growth strategy, we have made, and will likely continue to make, acquisitions of complementary businesses or products and divestitures of businesses or products that do not align with our portfolio optimization strategy. The ability to grow through acquisitions and optimize our portfolio through divestitures depends upon our ability to identify, negotiate, and complete suitable acquisitions and divestitures. If we fail to successfully integrate acquisitions into our existing business, our results of operations and our cash flows could be adversely affected. Our acquisition strategy also involves other risks and uncertainties, including distraction of management from current operations, greater than expected liabilities and expenses, inadequate return on capital, unidentified issues not discovered in our investigations and evaluations of those strategies and acquisitions, and difficulties implementing and maintaining consistent standards, controls, procedures, policies and systems. Future acquisitions could result in additional debt and other liabilities, and increased interest expense, restructuring charges and amortization expense related to intangible assets. Divestiture activity poses similar risks, including distraction of management from current operations, disruption of operations in adjacent or related businesses, greater than expected time and expenses, reductions to profit margins if we are unable to reduce fixed costs, loss of customer, supplier, or other business relationships, and employee retention challenges. The inability to successfully manage the risks associated with our divestiture activity may result in higher production costs, lost sales or otherwise negatively affect earnings and financial results.
Our growth strategy depends in part on our ability to further penetrate markets outside the United States, where there is the potential for significant economic and political disruptions. Our operations in these markets may be subject to greater risks than those faced by our operations in the United States, including political and economic instability, project delay or abandonment due to unanticipated government actions, inadequate investment in infrastructure, undeveloped property rights and legal systems, unfamiliar regulatory environments, relationships with local partners, language and cultural differences and increased difficulty recruiting, training and retaining qualified employees.
In addition, our profitability is dependent on our ability to drive sustainable productivity improvements such as cost savings through organizational restructuring, including our Quantum Leap global supply chain restructuring initiative. Delays or unexpected costs may prevent us from realizing the full operational and financial benefits of such restructuring initiatives and may potentially disrupt our operations.
Macroeconomic Risks
Uncertainties in foreign economic, political, regulatory and social conditions and fluctuations in foreign currency may adversely affect our results.
Appr oximately 56 percent, or $2.0 billion, of our net revenue was generated outside the United States in 2025. International operations could be adversely affected by changes in economic, political, regulatory, and social conditions, especially in Brazil, Russia, China, the Middle East, including Turkey and Egypt, and other developing or emerging markets where we do business. An economic downturn in the businesses or geographic areas in which we sell our products could reduce demand for these products and result in a decrease in sales volume that could have a negative impact on our results of operations. Product demand often depends on end-use markets. Economic conditions that reduce consumer confidence or discretionary spending may reduce product demand. Challenging economic conditions may also impair the ability of our customers to pay for products they have purchased, and as a result, our reserves for doubtful accounts and write-offs of accounts receivable may increase. In addition, tariffs and other trade protection measures, anti-bribery and anti-corruption regulations, restrictions on repatriation of earnings and cash, currency controls implemented by foreign governments, differing intellectual property rights and changes in legal and regulatory requirements that restrict the sales of products or increase costs could adversely affect our results of operations.
In addition, anti-bribery and anti-corruption regulations, restrictions on repatriation of earnings and cash, currency controls implemented by the U.S. and foreign governments, differing intellectual property rights and changes in legal and regulatory requirements that restrict the sales of products or increase costs could adversely affect our results of operations. Import tariffs, taxes, customs duties and other trading regulations imposed by the U.S. government on foreign countries, or by foreign countries on the U.S., could significantly increase the prices we pay for raw materials that are critical to our ability to manufacture our products. In addition, we may be unable to find a domestic supplier to provide the necessary raw materials on an economical basis in the amounts we require. Tariffs may decrease the competitiveness of our products in foreign markets or foreclose our sales entirely into those markets. We could experience a negative impact on our operating results, profitability, customer relationships and future cash flows.
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Fluctuations and volatility in exchange rates between the U.S. dollar and other currencies could potentially result in increases or decreases in net revenue, cost of raw materials and earnings and may adversely affect the value of our assets outside the United States. In 2025, the change in foreign currencies negatively impacted our net revenue by approximately $20.1 million. In 2025, we spent approximately $1.7 billion for raw materials worldwide of which approximately $0.9 billion was purchased outside the United States. Based on 2025 financial results, a hypothetical one percent change in our cost of sales due to foreign currency rate changes would have resulted in a change in net income of approximately $9.1 million or $0.17 per diluted share. Although we utilize risk management tools, including hedging, as appropriate, to mitigate market fluctuations in foreig n currencies, any changes in strategy in regard to risk management tools can also affect revenue, expenses and results of operations and there can be no assurance that such measures will result in cost savings or that all market fluctuation exposure will be eliminated.
Distressed financial markets may result in disruption to the availability of capital .
Adverse equity market conditions and volatility in the credit markets could have a negative impact on the value of our pension trust assets, our future estimated pension liabilities and other postretirement benefit plans. In addition, we could be required to provide increased pension plan funding. As a result, our financial results could be negatively impacted.
In a rising interest rate environment, more costly debt and reduced access to capital markets may affect our ability to invest in strategic growth initiatives such as acquisitions. In addition, the reduced credit availability could limit our customers’ ability to invest in their businesses, refinance maturing debt obligations, or meet their ongoing working capital needs. If these customers do not have sufficient access to the financial markets, demand for our products may decline.
Military conflicts, including the Russia and Ukraine conflict, and the global response to these events, could adversely impact our revenues, gross margins and financial results.
The U.S. government and other nations have imposed significant restrictions on most companies’ ability to do business in Russia as a result of the military conflict between Russia and Ukraine. Increases in energy demand and supply disruptions caused by the Russia and Ukraine conflict have resulted in significantly higher energy prices, particularly in Europe. It is not possible to predict the broader or longer-term consequences of that conflict or other military conflicts, which could include further sanctions, embargoes, regional instability, energy shortages, geopolitical shifts and adverse effects on macroeconomic conditions, security conditions, currency exchange rates and financial markets. Such geopolitical instability and uncertainty could have a negative impact on our ability to sell to, ship products to, collect payments from, and support customers in certain regions based on trade restrictions, embargoes and export control law restrictions, and logistics restrictions including closures of air space, and could increase the costs, risks and adverse impacts from these new challenges. We may also be the subject of increased cyber-attacks. While the countries involved in these conflicts do not constitute a material portion of our business, a significant escalation or expansion of economic disruption or the conflicts' current scope could have a material adverse effect on our results of operations.
Catastrophic events could disrupt our operations or the operations of our suppliers or customers, having a negative impact on our financial results.
Unexpected events, including global pandemics, natural disasters and severe weather events, droughts, fires or explosions at our facilities or those of our suppliers, acts of war or terrorism, supply disruptions or breaches of security of our information technology systems could increase the cost of doing business or otherwise harm our operations, our customers and our suppliers. Such events could reduce demand for our products or make it difficult or impossible for us to receive raw materials from suppliers and deliver products to our customers.
Legal and Regulatory Risks
The impact of changing laws or regulations or the manner of interpretation or enforcement of existing laws or regulations could adversely impact our financial performance and restrict our ability to operate our business or execute our strategies.
New laws or regulations, or changes in existing laws or regulations or the manner of their interpretation or enforcement, could increase our cost of doing business and restrict our ability to operate our business or execute our strategies. In addition, compliance with laws and regulations is complicated by our substantial global footprint, which will require significant and additional resources to ensure compliance with applicable laws and regulations in the various countries where we conduct business.
Our global operations expose us to trade and economic sanctions and other restrictions imposed by the U.S., the EU and other governments and organizations. The U.S. Departments of Justice, Commerce, State, Homeland Security, and Treasury and other federal agencies and authorities have a broad range of civil and criminalpenalties they may seek to impose against corporations and individuals for violations of economic sanctions laws, export control laws, the FCPA and other federal statutes and regulations, including those established by the OFAC. Under these laws and regulations, as well as other anti-corruption laws, anti-money-laundering laws, export control laws, customs laws, sanctions laws and other laws governing our operations, various government agencies may require export licenses, may seek to impose modifications to business practices, including cessation of business activities in sanctioned countries or with sanctioned persons or entities and modifications to compliance programs, including import restrictions, which may increase compliance costs, and may subject us to fines, penalties and other sanctions. A violation of these laws, regulations, policies or procedures could adversely impact our business, results of operations and financial condition.
Although we have implemented policies and procedures in these areas, we cannot assure that our policies and procedures are sufficient or that directors, officers, employees, representatives, manufacturers, suppliers and agents have not engaged and will not engage in conduct in violation of such policies and procedures.
Costs and expenses resulting from compliance with environmental laws and regulations may negatively impact our operations and financial results.
We are subject to numerous environmental laws and regulations that impose various environmental controls on us or otherwise relate to environmental protection, the sale and export of certain chemicals or hazardous materials, and various health and safety matters. The costs of complying with these laws and regulations can be significant and may increase as applicable requirements and their enforcement become more stringent and new rules are implemented. Adverse developments and/or periodic settlements could negatively impact our results of operations and cash flows. See Item 3. Legal Proceedings for a discussion of current environmental matters.
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Failure to comply with regulatory reporting requirements may negatively impact our financial results and reputation.
We are subject to various financial and other regulatory reporting requirements imposed by governments and organizations in the U.S., EU, and across the globe, including the EU’s CSRD, California’s Climate Corporate Data Accountability Act and Climate Related Financial Risk Act, and other new and proposed regulatory frameworks. We are experiencing increased compliance burdens and costs to meet the regulatory obligations, and these obligations may adversely affect raw material sourcing, manufacturing operations, and the distribution of our products. Failure to comply with expanding regulatory requirements may result in fines, penalties, and increased compliance costs, impacting our financial results. Deficiencies in our regulatory reporting may also reduce customer confidence or otherwise negatively impact our reputation.
Our business exposes us to potential product liability, warranty, and tort claims, as well as recalls and regulatory enforcement actions, which may negatively impact our operations, financial results, and reputation.
The development, manufacture and sale of adhesives, sealants, and other specialty chemical products by us, including products produced for the medical device, automotive, food and beverage, aerospace and defense, construction, and hygiene products end markets, involves a risk of exposure to product liability, warranty, and tort claims, product recalls, product seizures and related adverse publicity. A product liability, warranty, or tort claim or judgment against us could also result in substantial and unexpected expenditures, affect customer confidence in our products, and divert management's attention from other responsibilities. Although we maintain product liability insurance, there can be no assurance that the level of coverage is adequate, that coverage will apply, or that we will be able to continue to maintain our existing insurance or obtain comparable insurance at a reasonable cost, if at all. We also have contracting policies and controls in place to limit our exposure to third party claims, though we might not always be able to limit our exposure to those claims.
In addition to tort claims, our industry is also facing new compliance obligations and potential enforcement activity related to recent federal and state initiatives to regulate additional per- and polyfluoroalkyl substances (“PFAS”) in an expanding set of products. Such initiatives include proposals and rules from the U.S. EPA to regulate certain types and uses of PFAS under the Toxic Substances Control Act (“TSCA”), the Toxics Release Inventory (“TRI”), and the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”), as well as statutes proposed and enacted by various states. These emerging regulations and laws create obligations regarding assessment, reporting, and in some cases, elimination of certain PFAS in products; they also could create increased obligations around environmental discharges, waste handling, and possible remediation. We continue to monitor the development and implementation of these and other PFAS regulatory initiatives, analyze their potential impact on our operations, products, and supply chains, and assess adaptations that may become necessary to comply.
We have lawsuits and claimsagainst us with uncertain outcomes.
Our operations from time to time are parties to or targets of lawsuits, claims, investigations and proceedings, including product liability, personal injury, asbestos, patent and intellectual property, commercial, contract, environmental, antitrust, health and safety, and employment matters, which are handled and defended in the ordinary course of business. The results of any future litigation or settlement of such lawsuits and claims are inherently unpredictable, but such outcomes could be adverse and material in amount. See Item 3. Legal Proceedings for a discussion of current litigation.
The Company ’ s effective tax rate could be volatile and materially change as a result of the adoption of new tax legislation and other factors.
A change in tax laws is one of many factors that impact the Company’s effective tax rate. The U.S. Congress and other government agencies in jurisdictions where the Company does business have had an extended focus on issues related to the taxation of multinational corporations. As a result, the tax laws in the U.S. and other countries in which the Company does business could change, and any such changes could adversely impact our effective tax rate, financial condition and results of operations.
The Organization for Economic Co-operation and Development ("OECD"), an international association of 38 countries including the United States, finalized and adopted numerous changes to long-standing tax principles. Certain of these changes became effective for the Company in 2025 and will likely increase tax uncertainty and may adversely affect our provision for income taxes.
While the Company expects to qualify for transitional safe harbor relief in many jurisdictions, there remains uncertainty regarding the interpretation and application of the rules, especially in jurisdictions where safe harbor relief is not available or where local implementation deviates from OECD guidance. The Company may be subject to additional tax liabilities, including top-up taxes under the Global Anti-Base Erosion (GloBE) rules and Qualified Domestic Minimum Top-up Taxes (QDMTTs).
In addition, the enactment of the One Big Beautiful Bill Act (OBBBA) in the United States introduced significant changes to U.S. international tax provisions. These changes may interact with Pillar Two in complex ways. While recent G7 statements suggest a potential “side-by-side” framework that could exempt certain U.S.-parented groups from these rules, the final outcome remains uncertain. The evolving nature of these reforms may impact our tax planning strategies, increase compliance costs, and create additional risks of double taxation or inconsistent treatment across jurisdictions.
We continue to monitor legislative developments and assess their potential impact on our global tax position.
Additional income tax expense or exposure to additional income tax liabilities could have a negative impact on our financial results.
We are subject to income tax laws and regulations in the United States and various foreign jurisdictions. Significant judgment is required in evaluating and estimating our provision and accruals for these taxes. Our income tax liabilities are dependent upon the location of earnings among these different jurisdictions. Our income tax provision and income tax liabilities could be adversely affected by the jurisdictional mix of earnings, changes in valuation of deferred tax assets and liabilities and changes in tax laws and regulations. In the ordinary course of our business, we are also subject to continuous examinations of our income tax returns by tax authorities. Although we believe our tax estimates are reasonable, the final results of any tax examination or related litigation could be materially different from our related historical income tax provisions and accruals. Adverse developments in an audit, examination or litigation related to previously filed tax returns, or in the relevant jurisdiction’s tax laws, regulations, administrative practices, principles and interpretations could have a material effect on our results of operations and cash flows in the period or periods for which that development occurs, as well as for prior and subsequent periods. The decision to repatriate foreign earnings could result in higher withholding taxes.
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Financial Risks
We may be required to record impairment charges on our goodwill or long-lived assets.
Weak demand may cause underutilization of our manufacturing capacity or elimination of product lines; contract terminations or customer shutdowns may force sale or abandonment of facilities and equipment; or other events associated with weak economic conditions or specific product or customer events may require us to record an impairment on tangible assets, such as facilities and equipment, as well as intangible assets, such as intellectual property or goodwill, which would have a negative impact on our financial results.
Our current indebtedness could have a negative impact on our liquidity or restrict our activities.
Our current indebtedness contains various covenants that limit our ability to engage in specified types of transactions. Our overall leverage and the terms of our financing arrangements could:
limit our ability to obtain additional financing in the future for working capital, capital expenditures and acquisitions, even when necessary to maintain adequate liquidity, particularly if any ratings assigned to our debt securities by rating organizations were revised downward;
make it more difficult to satisfy our obligations under the terms of our indebtedness;
limit our ability to refinance our indebtedness on terms acceptable to us or at all;
limit our flexibility to plan for and adjust to changing business and market conditions in the industries in which we operate and increase our vulnerability to general adverse economic and industry conditions;
require us to dedicate a substantial portion of our cash flow to make interest and principal payments on our debt, thereby limiting the availability of our cash flow to fund future acquisitions, working capital, business activities and other general corporate requirements;
subject us to higher levels of indebtedness than our competitors, which may cause a competitive disadvantage and may reduce our flexibility in responding to increased competition; and
expose us to interest rate risk since a portion of our debt obligations are at variable rates. This could negatively impact our earnings, cash flows and our ability to grow. For example, a one percentage point increase in the average interest rate on our floating rate debt at November 29, 2025 would increase future interest expense by approxim ately $6.6 milli on per year.
In addition, the restrictive covenants require us to maintain specified financial ratios and satisfy other financial condition tests. Our ability to meet those financial ratios and tests will depend on our ongoing financial and operating performance, which, in turn, will be subject to economic conditions and to financial, market and competitive factors, many of which are beyond our control. A breach of any of these covenants could result in a default under the instruments governing our indebtedness.
Currency exchange rates compared to the U.S. dollar.
We purchase thousands of raw materials, the majority of which are petroleum/natural gas derivatives. The price of these derivatives impacts the cost of our raw materials. However, the supply of and demand for key raw materials has a greater impact on our costs. As demand increases in high-growth areas, the supply of key raw materials may tighten, resulting in certain materials being put on allocation. Natural disasters, such as hurricanes, also can have an impact as key raw material producers are shut down for extended periods of time. We continually monitor capacity utilization figures, market supply and demand conditions, feedstock costs and inventory levels, as well as derivative and intermediate prices, which affect our raw materials. With approximately 75 percent of our cost of sales accounted for by raw materials, our financial results are extremely sensitive to changing costs in this area.
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The pace of economic growth directly impacts certain industries to which we supply products. For example, adhesives-related revenues from durable goods customers in areas such as appliances, furniture and other woodworking applications tend to fluctuate with the overall economic activity. In our Building Adhesive Solutions operating segment and business components such as insulating glass, revenues tend to move with more specific economic indicators such as housing starts and other construction-related activity.
The movement of foreign currency exchange rates as compared to the U.S. dollar impacts the translation of the foreign entities’ financial statements into U.S. dollars. As foreign currencies weakenagainst the U.S. dollar, our revenues and costs decrease as the foreign currency-denominated financial statements translate into fewer U.S. dollars. The fluctuations of the Euro, British pound sterling, Turkish lira, Egyptian pound, Brazilian real, Mexican peso and Chinese renminbi against the U.S. dollar have the largest impact on our financial results as compared to all other currencies. In 2025 , currency fluctuations had a negative i mpact on net revenue of approximately $20.1 million as compared to 2024.
K ey financial results and transactions for 2025 included the following:
Net revenue decreased 2.7 percent from 2024 primarily driven by a 2.1 percent decrease due to acquisitions/divestitures, a 0.8 percent decrease in sales volume and a 0.6 percent decrease due to currency fluctuations partially offset by a 0.8 percent increase in product pricing.
Gross profit margin increased to 31.1 percent in 2025 from 29.8 percent in 2024, due to higher product pricing, lower raw materials cost, the impact of acquisitions/divestitures and restructuring actions.
Net income attributable to H.B. Fuller increased to $152.0 in 2025 from $130.3 in 2024, due to higher gross profit, increased pension and other postretirement plan income partially offset by higher compensation expense. In 2025 , our diluted earnings per share was $2.75 compared to $2.30 in 2024 .
Adjusted EBITDA increa sed 4.5 p ercent from 2024 primarily driven by higher net income and depreciation and amortization expense.
Cash flow generated by operating activities was $263.5 million in 2025 as compared to $302.4 million in 2024.
Our total year organic revenue growth, which we define as the combined variances from sales volume and product pricing, was flat for 2025 compared to 2024 due to an increase in product pricing offset by a decrease in sales volume.
Adjusted EBITDA is a non-GAAP financial measure and should not be construed as an alternative to the reported results determined in accordance with U.S. GAAP. For a reconciliation of Adjusted EBITDA to net income attributable to H.B. Fuller as reflected in the audited consolidated statements of income, see “Non-GAAP Measures” below.
Information pertaining to fiscal year 2023 was included in the Company’s Annual Report on Form 10-K for the year ended November 30, 2024, under Part II, Item 7 “Management’s Discussion and Analysis of Financial Position and Results of Operations,” which was filed with the SEC on January 23, 2025.
Project ONE
In December 2012, our Board of Directors approved a multi-year project to replace and enhance our existing core information technology platforms. The scope for this project includes most of the basic transaction processing for the Company including customer orders, procurement, manufacturing and financial reporting. The project envisions harmonized business processes for each of our operating segments supported with one standard software configuration. The execution of this project, which we refer to as Project ONE, is being supported by internal resources and consulting servic es. Implementation of Project ONE began in our North America adhesives business in 2014 and, through 2025 , we completed implementation of this system in various parts of our business including Latin America (except Brazil), Australia, and various other businesses in North America and EIMEA. During 2026 and beyond, we will continue implementation in Brazil and Asia Pacific.
Total expenditures for Project ONE are estimated to be $300 to $320 million, of which 60 - 65% is expected to be capital expenditures. Our total project-to-date expenditures are approximately $265 million, of which approximately $165 million are capital expenditures. Given the complexity of the implementation, the total investment to complete the project may exceed our estimate.
Restructuring Plans
During the second and third quarters of 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 a pproximately $80.0 million to $85.0 million ($54.6 million to $58.0 million after-tax), which include (i) cash expenditures of approximately $47.0 million to $48.0 million ($32.1 million to $32.8 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 $79.2 mill ion under the Plans as of November 29, 2025. The Plans were implemented in the second quarter of fiscal year 2023 and were completed as of November 29, 2025. Remaining cash payments will continue into fiscal year 2026.
Critical Accounting Policies and Significant Estimates
Management’s discussion and analysis of our results of operations and financial condition are based upon the Consolidated Financial Statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosure of contingent assets and liabilities. We believe the critical accounting policies and areas that require the most significant judgments and estimates to be used in the preparation of the Consolidated Financial Statements relate to goodwill impairment; pension and other postretirement plan assumptions; long-lived assets recoverability; valuation of product, environmental and other litigation liabilities; valuation of deferred tax assets and accuracy of tax contingencies; and valuation of acquired assets and liabilities.
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Goodwill
Goodwill is the excess of cost of an acquired entity over the amounts assigned to assets acquired and liabilities assumed in a business combination. Goodwill is allocated to our reporting units, which are our operating segments or one level below our operating segments (the component level). Reporting units are determined by the discrete financial information available for the component and whether it is regularly reviewed by segment management. Components are aggregated into a single reporting unit if they share similar economic characteristics. Our reporting units are as follows: Hygiene, Health and Consumable Adhesives, Engineering Adhesives and Building Adhesive Solutions.
We evaluate our goodwill for impairment annually at the beginning of the fourth quarter or earlier upon the occurrence of substantive unfavorable events or changes in economic conditions, industry trends, costs, cash flows, or ongoing declines in market capitalization. The quantitative impairment test requires judgment, including the identification of reporting units, the assignment of assets, liabilities and goodwill to reporting units, and the determination of fair value of each reporting unit. The impairment test requires the comparison of the fair value of each reporting unit to its carrying value, including goodwill. In performing the impairment test, we determined the fair value of our reporting units through the income approach by using discounted cash flow (“DCF”) analyses. Determining fair value requires the Company to make judgments about appropriate forecasted revenue and related revenue growth rate, the earnings before interest, taxes, depreciation and amortization ("EBITDA") margins rate and the weighted average cost of capital. The cash flows employed in the DCF analysis for each reporting unit are based on the reporting unit's budget, long-term business plan and recent operating performance. Discount rate assumptions are based on an assessment of the risk inherent in the future cash flows of the respective reporting unit and market conditions. Given the inherent uncertainty in determining the assumptions underlying a DCF analysis, actual results may differ from those used in our valuations. In assessing the reasonableness of the determined fair values, we reconciled the aggregate determined fair value of the Company to the Company's market capitalization, which, at the date of our 2025 impairment test, included a 21.4 percent control premium.
For the 2025 impairment test, the fair value of the reporting units exceeded the respective carrying values by a range of 33 percent to 80 percent. Significant assumptions used in the DCF analysis included discount rates that ranged from 10.4 percent to 10.7 percent and long-term revenue growth rates and EBITDA margins.
See Note 5 to the Consolidated Financial Statements for further information regarding goodwill. See Note 2 to the Consolidated Financial Statements for further information regarding the impairment of goodwill associated with the North America Flooring business that was held for sale as of November 30, 2024.
Pension and Other Postretirement Plan Assumptions
We sponsor defined-benefit pension plans in both the U.S. and non-U.S. entities. Also in the U.S., we sponsor other postretirement plans for health care and life insurance benefits. Expenses and liabilities for the pension plans and other postretirement plans are actuarially calculated. These calculations are based on our assumptions related to the discount rate, expected return on assets, projected salary increases and health care cost trend rates. Note 10 to the Consolidated Financial Statements includes disclosure of assumptions employed in these measurements for both the U.S. and non-U.S. plans.
The discount rate assumption is determined using an actuarial yield curve approach, which results in a discount rate that reflects the characteristics of the plan. The approach identifies a broad population of corporate bonds that meet the quality and size criteria for the particular plan. We use this approach rather than a specific index that has a certain set of bonds that may or may not be representative of the characteristics of our particular plan. A higher discount rate reduces the present value of the pension obligations. The discount rate for the U.S. pension plan was 5.15 percent at November 29, 2025, 5.23 percent at November 30, 2024 and 5.66 percent at December 2, 2023. Net periodic pension cost for a given fiscal year is based on assumptions developed at the end of the previous fiscal year. A discount rate change of 0.5 percentage points at November 29, 2025 would impact U.S. pension and other postretirement plan (income) expense by $0.1 million (pre-tax) in fiscal 2025. Discount rates for non-U.S. plans are determined in a manner consistent with the U.S. plans.
The expected long-term rat e of return on plan assets assumption for the U.S. pension plan was 7.50 percent in 2025 and 7.75 percent in both 2024 and 2023 . Our expected long-term rate of return on U.S. plan assets was based on our target asset allocation assumption of 55 percent equities and 45 percent fixed-income. Management, in conjunction with our external financial advisors, determines the expected long-term rate of return on plan assets by considering the expected future returns and volatility levels for each asset class that are based on historical returns and forward-looking observations. For 2025 , the expected long-term rate of return on the target equities allocation was 8.50 percent and the expected long-term rate of return on the target fixed-income allocation was 5.60 percent. The total plan rate of return assumption included an estimate of the effect of diversification and the plan expense. A change of 0.5 percentage points for the expected return on assets assumption would impact U.S. net pension and other postretirement plan expense by approximately $2.8 million (pre-tax).
Management, in conjunction with our external financial advisors, uses the actual historical rates of return of the asset categories to assess the reasonableness of the expected long-term rate of return on plan assets. The most recent 10-year and 20-year historical equity returns are shown in the table below. Our expected rate of return on our total portfolio is consistent with the historical patterns observed over longer time frames.
Total
Fixed
U.S. Pension Plan Historical Actual Rates of Return
Portfolio
Equities
Income
10-year period
20-year period
Beginning in 2022, our target allocation migrated from 60 percent equities and 40 percent fixed-income to 55 percent equities and 45 percent fixed income. The historical actual rate of return for the fixed income of 5.5 percent is since inception (18 years, 11 months).
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The expected long-term rate of return on plan assets assumption for non-U.S. pension plans was a weighted average of 5.03 percent in 2025 compared to 5.01 percent in 2024 and 5.02 percent in 2023. The expected long-term rate of return on plan assets assumption used in each non-U.S. plan is determined on a plan-by-plan basis for each local jurisdiction and is based on expected future returns for the investment mix of assets currently in the portfolio for that plan. Management, in conjunction with our external financial advisors, develops expected rates of return for each plan, considers expected long-term returns for each asset category in the plan, reviews expectations for inflation for each local jurisdiction, and estimates the effect of active management of the plan’s assets. Our largest non-U.S. pension plans are in the United Kingdom and Germany. The expected long-term rate of return on plan assets for the United Kingdom was 4.50 percent and the expected long-term rate of return on plan assets for Germany was 5.50 percent. Management, in conjunction with our external financial advisors, uses actual historical returns of the asset portfolio to assess the reasonableness of the expected rate of return for each plan.
The projected salary increase assumption is based on historic trends and comparisons to the external market. Higher rates of increase result in higher pension expenses. As this rate is also a long-term expected rate, it is less likely to change on an annual basis . Under the U.S. pension plan, the compensation amount was locked-in as of May 31, 2011 and thus the benefit no longer includes compensation increases.
Recoverability of Long-Lived Assets
The assessment of the recoverability of long-lived assets reflects our assumptions and estimates. Factors that we must estimate when performing impairment tests include sales volume, prices, inflation, currency exchange rates, tax rates and capital spending. Significant judgment is involved in estimating these factors, and they include inherent uncertainties. The measurement of the recoverability of these assets is dependent upon the accuracy of the assumptions used in making these estimates and how the estimates compare to the eventual future operating performance of the specific businesses to which the assets are attributed.
Judgments made by us include the expected useful lives of long-lived assets. The ability to realize undiscounted cash flows in excess of the carrying amounts of such assets is affected by factors such as the ongoing maintenance and improvement of the assets, changes in economic conditions and changes in operating performance.
See Note 2 to the Consolidated Financial Statements for further information regarding the impairment of long-lived assets associated with the North America Flooring business that was held for sale as of November 30, 2024.
Product, Environmental and Other Litigation Liabilities
As disclosed in Item 3. Legal Proceedings and in Note 1 and Note 14 to the Consolidated Financial Statements, we are subject to various claims, lawsuits and other legal proceedings. Reserves for loss contingencies associated with these matters are established when it is determined that a liability is probable and the amount can be reasonably estimated. The assessment of the probable liabilities is based on the facts and circumstances known at the time that the financial statements are being prepared. For cases in which it is determined that a liability is probable but only a range for the potential loss exists, the minimum amount of the range is recorded and subsequently adjusted as better information becomes available.
For cases in which insurance coverage is available, the gross amount of the estimated liabilities is accrued, and a receivable is recorded for any realizable insurance recoveries. A discussion of environmental, product and other litigation liabilities is disclosed in Item 3. Legal Proceedings and Note 14 to the Consolidated Financial Statements.
Based upon currently available facts, we do not believe that the ultimate resolution of any pending legal proceeding, individually or in the aggregate, will have a material adverse effect on our long-term financial condition. However, adverse developments and/or periodic settlements could negatively affect our future results of operations or cash flows.
Income Tax Accounting
As part of the process of preparing the Consolidated Financial Statements, we are required to estimate income taxes in each of the jurisdictions in which we operate. The process involves estimating actual current tax expense along with assessing temporary differences resulting from differing treatment of items for book and tax purposes. These temporary differences result in deferred tax assets and liabilities, which are included in the Consolidated Balance Sheets. We record a valuation allowance to reduce our deferred tax assets to the amount that is more-likely-than-not to be realized. We have considered future taxable income and ongoing tax planning strategies in assessing the need for the valuation allowance. Increases in the valuation allowance result in additional expense to be reflected within the tax provision in the Consolidated Statements of Income. The valuation allowance to reduce deferred tax assets totaled $11.1 million as of November 29, 2025, and $11.7 million as of November 30, 2024.
We recognize tax benefits for tax positions for which it is more-likely-than-not that the tax position will be sustained by the applicable tax authority at the largest amount of tax benefit that is greater than fifty percent likely of being realized upon ultimate settlement. We do not recognize a financial statement benefit for a tax position that does not meet the more-likely-than-not threshold. We believe that our liabilities for income taxes reflect the most likely outcome. It is difficult to predict the final outcome or the timing of the resolution of any particular tax position. Future changes in judgment related to the resolution of tax positions will impact earnings in the quarter of such change. We adjust our income tax liabilities related to tax positions in light of changing facts and circumstances. Settlement with respect to a tax position would usually require cash. Based upon our analysis of tax positions taken on prior year returns and expected tax positions to be taken for the current year tax returns, we have identified gross uncertain tax positions of $9.2 million as of November 29, 2025 and $15.6 million as of November 30, 2024.
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We have not recorded U.S. deferred income taxes for certain of our non-U.S. subsidiaries' undistributed earnings as such amounts are intended to be indefinitely reinvested outside of the U.S. Should we change our business strategies related to these non-U.S. subsidiaries, additional U.S. tax liabilities could be incurred. It is not practical to estimate the amount of these additional tax liabilities. See Note 11 to the Consolidated Financial Statements for further information on income tax accounting.
Acquisition Accounting
As we enter into business combinations, we perform acquisition accounting requirements including the following:
Identifying the acquirer,
Determining the acquisition date,
Recognizing and measuring the identifiable assets acquired and the liabilities assumed, and
Recognizing and measuring goodwill or a gain from a bargain purchase.
We complete valuation procedures and record the resulting fair value of the acquired assets and assumed liabilities based upon the valuation of the business enterprise and the tangible and intangible assets acquired. Enterprise value allocation methodology requires management to make assumptions and apply judgment to estimate the fair value of assets acquired and liabilities assumed. If estimates or assumptions used to complete the enterprise valuation and estimates of the fair value of the acquired assets and assumed liabilities significantly differed from assumptions made, the resulting difference could materially affect the fair value of net assets.
The calculation of the fair value of the tangible assets, including property, plant and equipment, utilizes the cost approach, which computes the cost to replace the asset, less accrued depreciation resulting from physical deterioration, functional obsolescence and external obsolescence. The calculation of the fair value of the identified intangible assets are determined using cash flow models following the income approach or a discounted market-based methodology approach. Significant inputs include estimated revenue growth rates, gross margins, operating expenses, and estimated attrition, royalty and discount rates. Goodwill is recorded as the difference in the fair value of the acquired assets and assumed liabilities and the purchase price.
Results of Operations
Net revenue
($ in millions)
Net revenue
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 fiscal 2025 compared to fiscal 2024.
Organic revenue growth
Currency
Net revenue growth
Organic revenue in 2025 compared to 2024 was flat and consisted of a 0.7 percent increase in Engineering Adhesives, a 0.1 percent increase in Hygiene, Health and Consumable Adhesives and a 1.3 percent decrease in Building Adhesive Solutions. The flat organic revenue was driven by a 0.8 percent increase in product pricing offset by a 0.8 percent decrease in sales volume. The 2.1 percent decrease from M&A was due to our acquisitions and divestiture that occurred during the last year. The negative 0.6 percent currency impact was primarily driven by a weaker Turkish lira, Egyptian pound, Brazilian real, Mexican peso and Chinese renminbi offset by a stronger Euro and British pound sterling compared to the U.S. dollar.
Cost of sales
($ in millions)
Cost of sales
Percent of net revenue
Cost of sales in 2025 compared to 2024 decreased 130 basis points as a percentage of net revenue. Raw material cost as a percentage of net revenue decreased 100 basis points in 2025 compared to 2024 due to higher pricing and lower raw material costs. Other manufacturing costs as a percentage of net revenue decreased 30 basis points in 2025 compared to 2024.
Gross profit
($ in millions)
Gross profit
Percent of net revenue
Gross profit in 2025 increased 1.8 percent and gross profit margin increased 130 basis points compared to 2024. The increase in gross profit margin as a percentage of net revenue was primarily due to higher pricing, lower raw materials cost and a decrease in other manufacturing costs.
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Selling, general and administrative (SG&A) expenses
($ in millions)
Percent of net revenue
SG&A expenses for 2025 compared to 2024 increased 90 basis points as a percentage of net revenue. The increase is due to the impact of acquisitions/divestitures and higher compensation costs.
Other expense, net
($ in millions)
Other expense, net
Other expense, net in 2025 included $34.8 million for a loss contingency associated with ongoing litigation, $2.3 million for a loss in sale of business a nd $1.3 million loss of other expense , partially offset by a $22.8 million of pension and other postretirement plan income, a $3.6 million gain on disposal of assets and $0.9 million of currency transaction gains. O ther expense, net in 2024 included a $47.3 million loss on the impairment of assets associated with our North American flooring business that was held for sale as of November 30, 2024, $2.5 million of currency transaction losses, a $2.0 million loss on an equity investment and $1.6 million of other expense, partially offset by $15.9 million of net defined benefit pension benefits and a $0.4 million gain on disposal of assets.
Interest expense
($ in millions)
Interest expense
Interest expense was $133.3 million and $133.1 million in 2025 and 2024, respectively. We capitalized $0.6 million and $1.9 million of interest expense in 2025 and 2024, respectively.
Interest income
($ in millions)
Interest income
Interest income in 2025 and 2024 was $4.8 million and $4.7 million, respectively, consisting primarily of interest on cross-currency swap activity and other miscellaneous interest income.
Income tax expense:
($ in millions)
Income tax expense
Effective tax rate
Income tax expense of $67.1 million in 2025 includes $7.5 million of discrete tax expense, primarily related to the impact of withholding tax recorded on earnings no longer permanently reinvested, offset by various U.S. and foreign tax matters. Excluding the discrete tax expense of $7.5 million, the overall effective tax rate was 27.7 percent.
Income tax expense of $56.4 million in 2024 includes $5.5 million of discrete tax benefit, primarily related to various foreign tax matters as well as an excess tax benefit related to U.S. stock compensation. Excluding the discrete tax benefit of $5.5 million, the overall effective tax rate was 33.9 percent.
The decrease in the overall effective tax rate for 2025 compared to 2024 , excluding the impact of discrete items, is primarily due to the change in the mix of earnings across jurisdictions.
Income from equity method investments
($ in millions)
Income from equity method investments
The income from equity method investments relates to our 50 percent ownership of the Sekisui-Fuller joint venture in Japan. The lower income for 2025 compared to 2024 is due to the unfavorable impact of the weakening of the Japanese yen against the U.S. dollar.
Net income attributable to H.B. Fuller
($ in millions)
Net income attributable to H.B. Fuller
Percent of net revenue
Net income attributable to H.B. Fuller was $152.0 million in 2025 compared to $130.3 million in 2024. due to higher gross profit, increased pension and other postretirement plan income offset by higher compensation expense. Diluted earnings per share were $2.75 per share in 2025 and $2.30 per share in 2024.
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Adjusted EBITDA
($ in millions)
Adjusted EBITDA
Percent of net revenue
Adjusted EBITDA for H.B. Fuller was $620.7 million in 2025 compared to $593.9 million in 2024. Adjusted EBITDA as a percentage of net revenue increased 130 basis points in 2025 compared to 2024 due to higher net income and depreciation and amortization expense. For a reconciliation of Adjusted EBITDA to net income attributable to H.B. Fuller as reflected in the audited consolidated statements of income see “Non-GAAP Measures” below.
Operating Segment Results
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.
As of November 30, 2024, our three operating segments consisted of Hygiene, Health and Consumable Adhesives, Engineering Adhesives and Construction Adhesives. As of the beginning of fiscal 2025, we reorganized our operating segments by selling our North America Flooring business, previously part of the Construction Adhesives operating segment, and combining our Insulated Glass, Woodworking and Composite businesses, previously part of the Engineering Adhesives operating segment, with Construction Adhesives Roofing and Building Envelope and Infrastructure businesses to form the Building Adhesive Solutions operating segment. All financial results related to North America Flooring have been moved to our Corporate Unallocated segment. Prior period segment information has been recast retrospectively to reflect the realignment.
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. As a result of the change in operating segments and the sale of our North America Flooring business, we have retrospectively moved the results of our divested North America Flooring business to Corporate Unallocated for prior periods.
Net Revenue by Segment
Net
Net
($ in millions)
Revenue
Total
Revenue
Total
Hygiene, Health and Consumable Adhesives
Engineering Adhesives
Building Adhesive Solutions
Segment total
Corporate Unallocated
Total
Adjusted EBITDA
Adjusted
Adjusted
($ in millions)
EBITDA
Total
EBITDA
Total
Hygiene, Health and Consumable Adhesives
Engineering Adhesives
Building Adhesive Solutions
Segment total
Corporate Unallocated
Total
Hygiene, Health and Consumable Adhesives
($ in millions)
Net revenue
Segment adjusted EBITDA
Segment adjusted EBITDA margin
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The following tables provide details of Hygiene, Health and Consumable Adhesives net revenue variances:
Organic revenue growth
Currency
Net revenue growth
Net revenue increased 0.3 percent in 2025 compared to 2024. The 0.1 percent increase in organic revenue growth was attributable to an increase in product pricing, partially offset by a decrease in sales volume. The 1.5 percent increase in net revenue from M&A was due to acquisitions of GEM S.r.l and Medifill Limited in the first quarter of 2025. The 1.3 percent negative currency effect was due to a weaker Egyptian pound, Brazilian real, Mexican peso and Turkish lira offset by a stronger Euro compared to the U .S. dollar. As a percentage of net r evenue, raw material costs increased 10 basis points. Other manufacturing costs as a percentage of net revenue decreased 20 basis points. SG&A expenses as a percentage of net revenue increased 100 basis points due to the impact of acquisitions and higher compensation costs. Segment adjusted EBITDA margin increased 70 basis points due to higher depreciation and amortization expense and higher pension and other postretirement plan income. Segment adjusted EBITDA decreased 0.6 percent and segment adjusted EBITDA margin decreased 20 basis points in 2025 as compared to 2024.
Engineering Adhesives
($ in millions)
Net revenue
Segment adjusted EBITDA
Segment adjusted EBITDA margin
The following tables provide details of Engineering Adhesives net revenue variances:
Organic revenue growth
Currency
Net revenue growth
Net revenue increased 5.2 percent in 2025 compared to 2024. The 0.7 percent increase in organic revenue growth was attributable to an increase in product pricing. The 4.7 percent increase in net revenue from M&A was due to the acquisition of ND Industries, Inc. and ND Industries Asia, Inc. in the second quarter of 2024. The 0.2 percent ne gative currency effect was due to a weaker Chinese renminbi, Turkish lira and Mexican peso offset by a stronger Euro and British pound sterling compared to the U.S. dollar. As a percentage of net r evenue, raw material costs decreased 260 basis points due to increased pricing, lower raw material costs and the impact of acquisitions. Other manufacturing costs as a percentage of net revenue increased 20 basis points. SG&A expenses as a percentage of net revenue increased 60 basis points primarily due to the impact of acquisitions and higher compensation costs. Segment adjusted EBITDA margin increased 50 basis points due to higher depreciation and amortization expense and higher pension and other postretirement plan income. Segment adjusted EBITDA increased 17.7 percent and segment adjusted EBITDA margin increased 230 basis points in 2025 as compared to 2024.
Building Adhesive Solutions
($ in millions)
Net revenue
Segment adjusted EBITDA
Segment adjusted EBITDA margin
The following tables provide details of Construction Adhesives net revenue variances:
Organic revenue growth
Currency
Net revenue growth
Net revenue increased 0.4 percent in 2025 compared to 2024. The 1.3 percent decrease in organic revenue growth was attributable to a decrease in sales volume, partially offset by an increase in product pricing. The 1.5 percent increase in net revenue from M&A was due to the acquisition of HS Butyl in the third quarter of 2024. The 0.2 percent positive currency effect was due to a stronger Euro and British pound sterling offset by a weaker Turkish lira and Australian dollar compared to the U.S. doll ar. As a percentage of net r evenue, raw material costs decreased 100 basis points due to increased pricing and lower raw material costs. Other manufacturing costs as a percentage of net revenue increased 50 basis points. SG&A expenses as a percentage of net revenue increased 90 basis points primarily due to higher compensation costs. Segment adjusted EBITDA margin increased 40 basis points due to higher depreciation and amortization expense and higher pension and other postretirement plan income. Segment adjusted EBITDA increased 0.6 percent and segment adjusted EBITDA margin was flat in 2025 as compared to 2024.
Corporate Unallocated
($ in millions)
Net revenue
Adjusted EBITDA
Corporate Unallocated includes acquisition and integration-related charges, restructuring-related charges and costs related to the implementation of Project ONE. As a result of the change in operating segments and the sale of our North America Flooring business, we have retrospectively moved the results of our divested North America Flooring business to Corporate Unallocated for prior periods.
Financial Condition, Liquidity and Capital Resources
Total cash and cash equivalents as of November 29, 2025 were $107.2 million compared to $169.4 million as of November 30, 2024. Total long and short-term debt was $2,016.9 million as of November 29, 2025 and $2,010.6 million as of November 30, 2024.
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. At November 29, 2025, we were in compliance with all covenants of our contractual obligations for outstanding indebtedness as shown in the following table:
Covenant
Debt Instrument
Measurement
Result as of November 29, 2025
Secured Total Indebtedness / TTM 1 EBITDA
Revolving Facility and Term Loan A Facility
Not greater than 4.50
TTM 1 EBITDA / Consolidated Interest Expense
Revolving Facility and Term Loan A Facility
Not less than 2.0
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 impairmentlosses, (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 the Company filed as an exhibit to its 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 in fiscal 2026.
Net Financial Assets (Liabilities)
($ in millions)
Financial assets:
Cash and cash equivalents
Foreign exchange contracts
Interest rate swaps
Financial liabilities:
Notes payable
Long-term debt
Foreign exchange contracts
Interest rate swaps
Net investment hedges
Net financial liabilities
Of the $107.2 million in cash and cash equivalents as of November 29, 2025 , $105.4 million was held outside the U.S. Of the $105.4 million of cash held outside the U.S., earnings of $104.6 million are indefinitely reinvested outside of the U.S. It is not practical for us to determine the U.S. tax implications of the repatriation of these funds.
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There are no contractual or regulatory restrictions on the ability of consolidated and unconsolidated subsidiaries to transfer funds in the form of cash dividends, loans or advances to us. Our credit facilities have the following restrictions related to investments and general limitations: 1) a credit facility limitation restricting investments, loans, advances or capital contributions from Loan Parties to non-Loan Parties in excess of $150.0 million, 2) a credit facility limitation that provides total investments, loans, advances or guarantees not otherwise permitted in the credit agreement for all subsidiaries shall not exceed $150.0 million in the aggregate, 3) a credit facility limitation that provides total investments, dividends, and distributions shall not exceed the Available Amount defined in these agreements, all three of which do not apply when our secured leverage ratio is below 4.0x, and 4) typical statutory restrictions, which prohibit distributions in excess of net capital or similar tests. Additionally, we have taken the income tax position that the majority of our cash in non-U.S. locations is indefinitely reinvested.
Debt Outstanding and Debt Capacity
Notes Payable
There were no notes payable at November 29, 2025 and a balance of $0.6 million at November 30, 2024. Notes payable primarily represents various foreign subsidiaries’ short-term borrowings that were not part of committed lines. The weighted-average interest rate on these short-term borrowings was approximately 1.35 percent in 2024.
Long-Term Debt
Long-term debt consists of a senior secured term loan (“Term Loan A”) with an aggregate principal amount of $500.0 million and a senior secured term loan (“Term Loan B”) with an aggregate principal amount of $994.0 million, issued pursuant to a Second Amended and Restated Credit Agreement, dated as of February 15, 2023, as amended. Interest on Term Loan A is payable at the Secured Overnight Financing Rate ("SOFR") plus an adjustment of 0.10 percent and an interest rate spread of 1.50 perc ent (5.52 percent at November 29, 2025). The interest rate spread is bas ed on a secured leverage grid. Term Loan A matures on February 15, 2028. At November 29, 2025 , a balance of $431.3 million was outstanding on Term Loan A. Interest on Term Loan B is payable at SOFR plus an interest rate spread of 1.75 percent with a SOFR floor of 0.50 percent (5.67 percent at November 29, 2025 ). Term Loan B matures on February 15, 2030. At November 29, 2025 , a balance of $979.1 million was outstanding on Term Loan B. O n January 12, 2023, we entered into an interest rate swap agreement (amended on February 28, 2023) to convert $400,000 of our variable rate 1-month SOFR debt to a fixed rate of 3.7260. On March 16, 2023, we entered into interest rate swap agreements to convert $300,000 of our 1-month SOFR rate debt to a fixed rate of 3.7210 percent and to convert $100,000 of our 1-month SOFR rate debt to a fixed rate of 3.8990 percent.
Long-term debt also consists of 10-year unsecured public notes (“10-year Public Notes”) with an aggregate principal amount of $300.0 million due February 15, 2027 with a fixed coupon of 4.00 percent and 8-year unsecured public notes (“8-year Public Notes”) with an aggregate principal amount of $300.0 million due October 15, 2028 with a fixed coupon of 4.25 percent. We currently have no intention to prepay the Public Notes. On February 12, 2021, we entered into an interest rate swap agreement to convert our 8-year Public Notes to a variable interest rate of 1-month LIBOR plus 3.28 percent. See Note 12 to the Consolidated Financial Statements for further discussion of this interest rate swap.
Interest payable on our long-term deb t totaled $4.5 mil lion as of November 29, 2025.
Revolving Credit Facility
We have a revolving credit agreement with a consortium of financial institutions at November 29, 2025. This revolving credit agreement creates a secured multi-currency revolving credit facility that we can draw upon to repay existing indebtedness, finance working capital needs, finance acquisitions and for general corporate purposes up to a maximum of $700.0 million. Interest on the revolving credit facility is payable at SOFR plus an adjustment of 0.10 percent and an interest rate spread of 1.50 percent ( 5.52 percent at November 29, 2025). A facility fee of 20 basis points of the unused commitment under the revolving credit facility is payable quarterly. The interest rate spread and the facility fee are based on a secured lever age grid. At November 29, 2025 , there was $36.0 million outstand ing on the Revolving Credit Facility. The Revolving Credit Facility matures on February 15, 2028.
We are subject to mandatory prepayments in the first quarter of each fiscal year equal to 50 percent of Excess Cash Flow, as defined in our debt agreement, of the prior fiscal year less any voluntary prepayments made during that fiscal year. The Excess Cash Flow Percentage shall be reduced to 25 percent when our Secured Leverage Ratio is below 4.25:1.00 and to 0 percent when our Secured Leverage Ratio is below 3.75:1.00.
For further information related to debt outstanding and debt capacity, see Note 7 to the Consolidated Financial Statements.
Goodwill and Other Intangible Assets
As of November 29, 2025, goodwill totaled $1,680.1 million (32.4 percent of total assets) and other intangible assets, net of accumulated amortization, totaled $805.9 million (15.5 percent of total assets).
The components of goodwill and other identifiable intangible assets, net of amortization, by segment are as follows:
Hygiene, Health
Building
and Consumable
Engineering
Adhesive
($ in millions)
Adhesives
Adhesives
Solutions
Total
Goodwill
Purchased technology and patents
Customer relationships
Tradenames
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Hygiene, Health
Building
and Consumable
Engineering
Adhesive
($ in millions)
Adhesives
Adhesives
Solutions
Total
Goodwill
Purchased technology and patents
Customer relationships
Tradenames
Indefinite-lived intangible assets
Selected Metrics of Liquidity and Capital Resources
Key metrics we monitor are net working capital as a percent of annualized net revenue, trade receivables days sales outstanding (DSO), inventory days on hand, free cash flow and debt capitalization ratio.
November 29,
November 30,
Net working capital as a percentage of annualized net revenue 1
Trade receivables DSO (in days) 2
Inventory days on hand (in days) 3
Trade accounts payable DPO (in days) 4
Free cash flow 5
Debt capitalization ratio 6
1 Net working capital (trade receivables, net of allowance for doubtful accounts plus inventory minus trade payables) divided by annualized net revenue.
2 Trade receivables net of allowance for doubtful accounts multiplied by 91 (13 weeks) and divided by the net revenue.
3 Total inventory multiplied by 91 (13 weeks) and divided by cost of sales (excluding delivery costs).
4 Trade accounts payable multiplied by 91 (13 weeks) and divided by cost of sales.
5 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
($ in millions)
Net cash provided by operating activities
Net income including non-controlling interest was $152.1 million in 2025 and $130.4 million in 2024. Depreciation and amortization expense totaled $178.3 million in 2025 compared to $174.7 million in 2024. The higher depreciation and amortization expense in 2025 is related to the assets acquired in our business acquisitions.
Changes in net working capital (trade receivables, inventory and trade payables) accounted for a use of cash of $51.9 million compared to a source of cash of $28.6 million in 2025 and 2024, respectively. Following is an assessment of each of the net working capital components:
Trade Receivables, net – Changes in trade receivables resulted in a $3.4 million use of cash in 2025 and a $10.7 million source of cash in 2024. The use of cash in 2025 compared to source of cash in 2024 was due to less cash collected on trade receivables in the current year compared to the prior year. The DSO was 57 days at November 29, 2025 and 55 days at November 30, 2024.
Inventory – Changes in inventory resulted in a $10.3 million and a $30.1 use of cash in 2025 and 2024, respectively. The lower use of cash in 2025, compared to 2024 was due to higher inventory purchases at higher prices in 2024 compared to the current year. Inventory days on hand were 73 days at November 29, 2025 and 67 days on hand at November 30, 2024.
Trade Payables – Changes in trade payables resulted in a $38.2 million use of cash in 2025 compared to a $47.9 million source of cash in 2024. The use of cash in 2025 compared to the source of cash in 2024 reflects higher payments on trade payables in the current year compared to the prior year. The DPO was 70 days at November 29, 2025 and 68 days at November 30, 2024.
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Contributions to our pension and other postretirement benefit plans wer e $3.3 million and $2.9 million in 2025 and 2024, respectively. Income taxes payable resulted in a $6.1 million and a $23.1 million use of cash in 2025 and 2024, respectively. Other asse ts resulted in a $28.7 million and a $17.5 million use of cash in 2025 and 2024 , respectively. The higher use of cash in 2025 compared to 2024 is primarily driven by short-term investments and other taxes partially offset by a decrease in other long-term prepaid assets in 2025 compared to 2024. Other accrued expenses resulted in a $35.3 million and $6.0 million source of cash in 2025 and 2024 , respectively. The large source of cash in 2025 compared to 2024 is primarily due to a liability for a loss contingency associated with ongoing litigation. Accrued compensation resulted in a $4.9 million and a $12.7 million source of cash in 2025 and 2024, respectivel y, relating to lower overall compensation accruals at the end of 2025 compared to 2024 . Other liabilities resulted in a $34.9 million source of cash and a $30.3 million use of cash in 2025 and 2024 , respectively. The source of cash in 2025 compared to use of cash in 2024 was due to an increase in hedging liabilities from interest rate swap activity of $55.3 million in 2025 compared to a decrease of $6.2 million in the prior year. In 2024, we also recorded a $47.3 million loss on the impairment of assets held for sale.
Cash Flows used in Investing Activities
($ in millions)
Net cash used in investing activities
Purchases of property, plant and equipment were $142.3 million in 2025 compared to $139.2 million in 2024. The higher purchases in 2025 reflect the timing of capital projects and expenditures related to growth initiatives. We paid cash, net of cash acquired, of $167.0 million and $273.9 million for purchased businesses in 2025 and 2024, respectively. We received cash of $75.7 million in proceeds from the sale of a business in 2025. Proceeds from the sale of property, plant and equipment were $5.0 million in 2025 compared to $1.2 million in 2024. We received cash of $4.9 million in proceeds from insurance recoveries related to property, plant and equipment in 2024.
Cash Flows from Financing Activities
($ in millions)
Net cash provided by financing activities
In 2025, we received $1,300.3 million in proceeds and repaid $1,305.4 million of long-term debt including borrowings and repayments on our revolving credit facility and in 2024, we received $1,932.9 million in proceeds and repaid $1,764.9 million of long-term debt. See Note 7 to the Consolidated Financial Statements for further discussion of debt borrowings and repayments. Debt issuance costs of $1.0 million were paid in 2025 compared to $3.5 million paid in 2024. Cash paid for dividends were $50.3 million and $47.6 million in 2025 and 2024, respectively. Cash generated from the exercise of stock options was $9.8 million and $35.9 million in 2025 and 2024, respectively. Indirect repurchases of common stock through a net-settlement feature related to statutory minimum tax withholding upon vesting of restricted stock we re $3.8 mi llion in 2025 compared to $7.8 million in 2024. We had $56.9 million of repurchases of stock from our share repurchase program in 2025 and $31.8 million of repurchases of common stock from our share repurchase program in 2024.
We expect 2026 capital expenditures to be approximately $160.0 million.
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
Year Ended
November 29,
November 30,
December 2,
Net income attributable to H.B. Fuller
Adjustments:
Acquisition project costs
Organizational realignment
Project One
Business divestiture
Other 1
Discrete tax items
Income tax effect on adjustments
Adjusted net income attributable to H.B. Fuller
Add:
Interest expense 2
Interest income
Income taxes
Depreciation and amortization expense 3
Adjusted EBITDA
1 Other includes losses associated with ongoing litigation and product claims related to a divested business and costs associated with the exit of a product line for the year ended November 29, 2025.
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
($ in millions)
Net cash provided by operating activities
Less: Purchased property, plant and equipment
Free cash flow
Forward-Looking Statements and Risk Factors
The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements. This Annual Report on Form 10-K 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 Annual Report on Form 10-K.
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.
