HB Fuller Co. (NYSE:FUL) Q3 2019 Earnings Conference Call - Final Transcript
Sep 26, 2019 • 10:30 am ET
Good morning, and welcome to the H.B. Fuller Q3 2019 Quarterly Earnings Conference Call. [Operator Instructions] After today's presentation there will be an opportunity to ask questions. [Operator Instructions]
I would now like to turn the conference over to Barbara Doyle, Vice President of Investor Relations for H. B. Fuller. Please go ahead.
Good morning, and welcome to H.B. Fuller's fiscal 2019 third quarter earnings call. Our speakers today are Jim Owens, H.B. Fuller President and Chief Executive Officer, and John Corkrean, Executive Vice President and Chief Financial Officer. After our prepared remarks, we will take your questions. Please let me cover a few items before I turn the call over to Jim.
First, a reminder that our comments today will include references to non-GAAP financial measures. These measures are in addition to the GAAP results in our earnings release and in our forms 10-Q and 10-K. We believe that discussion of these measures is useful to investors to assist in the understanding of our operating performance and the comparability of results with other companies. Reconciliation of non-GAAP measures to the nearest GAAP measure is included in our earnings release.
Also, we will be making forward-looking statements during this call. These statements are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could differ materially from these expectations due to factors discussed in our earnings release, comments made during this call or risk factors in our Form 10-K filed with the SEC and available on our website at investors.hbfuller.com. We do not undertake any duty to update any forward-looking statements.
Now, please turn to Slide 3 in the investor deck and I will turn the call over to Jim Owens.
James J. Owens
Thank you, Barbara, and welcome to everyone on the call. In the third quarter, we delivered solid operating performance and strong cash flow in a weakening environment -- global industrial production. Adjusted EBITDA margin of 16% improved 40 basis points versus last year. Strong cash flow performance allowed us to double our debt pay down to $97 million and increased our full-year debt pay down commitment to $260 million. I'll share gains in Asia and Engineering Adhesives blunted the impact of slower manufacturing activity around the world. We also announced the reorganization of our company into three global business units instead of the combination of two global and three regional business units, which we had in the past. This will provide better strategic clarity and growth and will enable significant cost savings and efficiencies. I'll talk more about this later in the call.
In the third quarter, we continued to drive share gains in strategic markets including Engineering Adhesives. Our Engineering Adhesives segment grew organically by mid- to high single digits this quarter and double digits year-to-date when excluding auto-related businesses. Strong growth in electronics and new energy markets drove the share gains. In our auto business, while negative, outperformed car builds globally this quarter and year-to-date. We improved our margins by leveraging lower raw