HB Fuller Co. (NYSE:FUL) Q3 2020 Earnings Conference Call - Final Transcript

Good day, and welcome to the H.B. Fuller Third Quarter Investor Call. [Operator Instructions] Please note this event is being recorded.

I would now like to turn the conference over to Barbara Doyle, Vice President of Investor Relations. Please go ahead.

Good morning, and welcome to H.B. Fuller's third quarter 2020 earnings call for the fiscal quarter ended August 29, 2020. Our speakers 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 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 and references to organic revenue, which excludes the impact of foreign currency fluctuation and the impact of acquisitions and divestitures. On this call, unless otherwise specified, discussions of sales and revenue refer to organic revenues, and discussions of EPS, margins or EBITDA refer to adjusted non-GAAP measures. These measures are in addition to the GAAP results in our earnings release and in our Forms 10-K and 10-Q. 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. Many of these risks and uncertainties are and will be exacerbated by the COVID-19, and any worsening of the global business and economic environment as a result. 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 and 10-Q filed with the SEC and available on our Web site at investors.hbfuller.com.

Now, I'll turn the call over to Jim Owens.

Thank you, Barbara, and welcome to everyone on the call. In June, we reported second quarter results that were ahead of expectations and ahead of our competitors' performance. Last evening, we reported strong third quarter results, with $691 million in sales, $0.76 of adjusted EPS, and $106 million of adjusted EBITDA. Our third quarter results were also ahead of our expectations and ahead of the prior quarter.

In the fourth quarter, we expect to deliver EBITDA results in line with the fourth quarter of 2019. The performance over the last two quarters and our expected performance are a direct result of the actions we took to reorganize our business and invest in growth segments and opportunities. This performance is also a result of the strength of H.B. Fuller's leadership team and our position as a leader in the adhesive industry.

Our operational performance in the third quarter resulted in a solid sequential improvement in sales, EPS, and EBITDA. In the quarter, we leveraged new business wins and