SEC Filing Summary: H. B. Fuller Company (10-K)
Business Context and Reporting Period
Company: H. B. Fuller Company
Filing Type: Form 10-K (Annual Report)
Period Ended: November 30, 1995
Business Overview: Founded in 1887, H. B. Fuller is a worldwide manufacturer and marketer of adhesives, sealants, coatings, paints, and specialty chemical products. The company employs approximately 6,400 people and operates in 42 countries across North America, Europe, Latin America, and the Asia/Pacific region.
Primary Products: Adhesives, sealants, and coatings generated more than 85% of 1995 sales. Other products include powder coatings, commercial paints, specialty waxes, and sanitation chemicals.
Key Financial Metrics
Revenue: Total sales to unaffiliated customers in 1995 were $1,243,818,000. North American operations accounted for $692,099,000 of this total.
Research & Development: Expenses for 1995 were $26,541,000 (compared to $23,624,000 in 1994 and $21,826,000 in 1993).
Customer Concentration: The largest customer accounts for less than 4% of consolidated sales.
Backlog: No significant backlog of unfilled orders as of November 30, 1995, due to short processing times (generally one week).
Stock Information: As of January 31, 1996, 14,008,156 common shares were outstanding with an aggregate market value of approximately $469,276,000 held by non-affiliates.
Missing Data: The provided text does not contain specific values for net profit, operating margins, total debt, or cash flow figures, as these are incorporated by reference from the 1995 Annual Report to Stockholders.
Material Changes and Operational Highlights
- Product Mix: Adhesives, sealants, and coatings increased their contribution to sales from 86% in 1994 to 87% in 1995.
- Global Footprint: The company maintained plants in 31 countries outside the U.S. and satellite sales offices in 10 additional countries.
- Raw Materials: A significant portion of raw materials are petroleum-based. Latin American operations require higher inventory levels due to extended delivery schedules for imported materials.
- Environmental Expenditures: Estimated expenditures to comply with environmental regulations over the next two fiscal years are approximately $11.0 million.
Outlook, Risks, and Contingencies
Legal and Environmental Risks: The company is a potentially responsible party (PRP) in numerous government enforcement and private actions regarding hazardous waste sites. While specific costs vary, management believes these claims will not result in material liability. Notable sites include Helen Kramer (NJ), Gloucester (NJ), and Sunrise (MI).
Other Litigation:
- Class Action: Named as one of 94 defendants in a Texas federal court case seeking $500 million in damages for alleged chemical exposure at an Army Depot. Management does not expect material liability.
- Wrongful Death: A lawsuit filed in Minnesota alleging death due to solvent abuse seeks damages in excess of $50,000. The company has filed a motion to dismiss.
Operational Risks: International operations face varying degrees of economic and political risk. The company insures physical assets against civil unrest where possible. Competition is high, with factors including product performance, service, quality, and price.
Investor Verification Checklist
- Verify the specific net income, operating margin, and cash flow figures in the 1995 Annual Report to Stockholders (incorporated by reference), as they are not detailed in this 10-K text.
- Review the "Selected Financial Data" (Item 6) in the Annual Report to confirm year-over-year revenue and profit trends.
- Assess the status of the $11.0 million estimated environmental compliance costs and any updates on the Helen Kramer and Sunrise landfill liabilities.
- Confirm the outcome of the Texas class action lawsuit and the Minnesota wrongful death suit.
- Examine the impact of petroleum-based raw material price fluctuations on future margins.