FUL 10-K & 10-Q changes, risk factors and insider trading

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 persistent threat 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.

Our wide variety of products are sold in numerous markets, each of which is highly 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.

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 ideasideas, 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 are in the process of implementing a global Enterprise Resource Planning (“ERP”) system, including the upgrade to SAP S/4HANA® at the beginning of fiscal 2025, 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 2024,2025, 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 20252026 and beyond, we will continue implementation in North America; Europe, India, the Middle East and Africa ("EIMEA"); Brazil and Asia Pacific.

In addition, our profitability is dependent on our ability to drive sustainable productivity improvements such as cost savings through organizational restructuring.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.

Distressed financial markets may result in dramaticdisruption deflation of financial asset valuations and high interest rates may disruptto the availability of capital.

TheMilitary militaryconflicts, conflictsincluding betweenthe Russia and Ukraine and in the Middle East,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 theother ongoingmilitary conflict in the Middle East,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.

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.

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 becomebecame effective for the Company in 2025 and will likely increase tax uncertainty and may adversely affect our provision for income taxes.

H.B. Fuller Company is a global formulator, manufacturer and marketer of adhesives and other specialty chemical products. We have three reportable segments: Hygiene, Health and Consumable Adhesives, Engineering Adhesives and ConstructionBuilding Adhesives.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 andnonwoven, 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, performance wood, insulating glass, textile, appliance and heavy machinery markets. The ConstructionBuilding AdhesivesAdhesive Solutions operating segment manufactures and provides specialty adhesives, sealants, tapes, mortars, grouts,tapes and application devices for commercial building roofing systems, heavy infrastructure projects, road/highway/airport transportation applications, telecom/5G utilities, industrial LNG plants, building envelope applications, HVAC insulation systems, andperformance for both residentialwoodworking and commercialinsulating flooring underlayment solutions.glass.

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 ConstructionBuilding AdhesivesAdhesive Solutions operating segment and business components such as insulating glass in Engineering Adhesives,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 weaken against 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, Chinese renminbi, British pound sterling, Turkish lira, Egyptian pound, Turkish lira, Brazilian real, ChileanMexican peso and ColombianChinese pesorenminbi against the U.S. dollar have the largest impact on our financial results as compared to all other currencies. In 2024,2025, currency fluctuations had a negative impact on net revenue of approximately $34.9$20.1 million as compared to 2023.2024.

Key financial results andtransactionsand transactions for 20242025 included the following:

Our total year organic revenue growth, which we define as the combined variances from sales volume and product pricing, decreasedwas 1.0 percentflat for 20242025 compared to 20232024 due to an increase in product pricing offset by a decrease in product pricing, partially offset by an increase in sales volume.

Information pertaining to fiscal year 20222023 was included in the Company’s Annual Report on Form 10-K for the year ended DecemberNovember 2,30, 2023,2024, 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 24,23, 2024.2025.

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 services. Implementation of Project ONE began in our North America adhesives business in 2014 and, through 2024,2025, 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 20252026 and beyond, we will continue implementation in North America, EIMEA, Brazil and Asia Pacific.

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 approximately $60.0$80.0 million to $65.0$85.0 million ($46.6$54.6 million to $50.7$58.0 million after-tax), which include (i) cash expenditures of approximately $28.4$47.0 million to $29.6$48.0 million ($22.0$32.1 million to $23.0$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 $55.5$79.2 million under the Plans as of November 30,29, 2024.2025. The Plans were implemented in the second quarter of fiscal year 2023 and are currently expected to bewere completed duringas of November 29, 2025. Remaining cash payments will continue into fiscal year 2026. The restructuring costs will be spread across the next several fiscal quarters as the measures are implemented with the majority of the charges recognized and cash payments occurring in fiscal 2023 and 2024.

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.

Goodwill is the excess of cost of an acquired entity over the amounts assigned to assets acquired and liabilities assumed in a purchase 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 ConstructionBuilding Adhesives.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 withto its carrying amount,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 also reconciled the aggregate determined fair value of the Company to the Company's market capitalization, which, at the date of our 20242025 impairment test, included a 1621.4 percent control premium.

For the 20242025 impairment test, the fair value of the reporting units exceeded the respective carrying values by 20a range of 33 percent to 14780 percent. Significant assumptions used in the DCF analysis included discount rates that ranged from 9.110.4 percent to 10.110.7 percent and long-term revenue growth rates.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 iswas held for sale.sale as of November 30, 2024.

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 non-U.S.U.S. and U.S.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, 2024,2024 and 5.66 percent at December 2, 2023 and 5.36 percent at December 3, 2022.2023. 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 30,29, 20242025 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 rate of return on plan assets assumption for the U.S. pension plan was 7.757.50 percent in 2024,2025 and 7.75 percent in 2023both 2024 and 7.00 percent in 2022.2023. 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 2024,2025, 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 5.625.60 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 $2.6$2.8 million (pre-tax).

The expected long-term rate of return on plan assets assumption for non-U.S. pension plans was a weighted-averageweighted average of 5.03 percent in 2025 compared to 5.01 percent in 2024 compared toand 5.02 percent in 2023 and 3.49 percent in 2022.2023. 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. Projected salary increase assumptions for non-U.S. plans are determined in a manner consistent with the U.S. plans.

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 iswas held for sale.sale as of November 30, 2024.

For cases in which insurance coverage is available, the gross amount of the estimated liabilities is accrued, and a receivable is recorded for any probable estimatedrealizable 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 in one or more future quarters.flows.

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, and $15.6 million as of December 2, 2023.2024.

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 and $14.3 million as of December 2, 2023.2024.

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 and /divestitures (M&A) and changes in foreign currency exchange rates. The following table shows the net revenue variance analysis for fiscal 20242025 compared to fiscal 2023.2024.

Organic revenue in 20242025 compared to 20232024 decreasedwas 1.0 percentflat and consisted of a 9.50.7 percent increase in ConstructionEngineering Adhesives, a 4.00.1 percent decreaseincrease in Hygiene, Health and Consumable Adhesives and a 1.01.3 percent decrease in EngineeringBuilding Adhesives.Adhesive Solutions. The decreaseflat organic revenue was driven by a 2.60.8 percent decreaseincrease in product pricing, partiallypricing offset by a 1.60.8 percent increasedecrease in sales volume. The 3.62.1 percent increasedecrease from M&A was due to our acquisitions and divestiture that occurred during the last year. The negative 1.00.6 percent currency impact was primarily driven by a weaker Turkish lira, Egyptian pound, Turkish lira, Brazilian real, Mexican peso and Chinese renminbi and Chilean peso offset by a stronger Euro,Euro and British pound sterling and Colombian peso compared to the U.S. dollar.

Cost of sales in 20242025 compared to 20232024 decreased 110130 basis points as a percentage of net revenue. Raw material cost as a percentage of net revenue decreased 210100 basis points in 20242025 compared to 20232024 due to higher pricing and lower raw material costs. Other manufacturing costs as a percentage of net revenue increaseddecreased 10030 basis points in 20242025 compared to 2023 primarily due to a decrease in product pricing partially offset by higher sales volume.2024.

Gross profit in 20242025 increased 5.31.8 percent and gross profit margin increased 110130 basis points compared to 2023.2024. The increase in gross profit margin as a percentage of net revenue was primarily due to ahigher 210pricing, basis points decrease inlower raw materials offsetcost byand a 100 basis point increasedecrease in other manufacturing costs.

SG&A expenses for 20242025 compared to 20232024 increased 14090 basis points as a percentage of net revenue. The increase is due to the impact of acquisitions/divestitures and higher compensation costs, partially offset by a gain on insurance claims.costs.

Other (expense)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 and $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. Other expense, net in 2024 included a $47.3 million loss on the impairment of assets associated with our North American flooring business that iswas held for sale,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. Other (expense) income, net in 2023 included $20.3 million of net defined benefit pension benefits and $1.2 of other income, partially offset by $11.6 million of currency transaction losses and a $0.1 million loss on disposal of assets.

Interest expense was $133.1$133.3 million and $134.6$133.1 million in 20242025 and 2023,2024, respectively, and was lower primarily due to lower interest rates, partially offset by higher debt balances.respectively. We capitalized $1.9$0.6 million and $1.8$1.9 million of interest expense in 20242025 and 2023,2024, respectively.

The increasedecrease in the overall effective tax rate for 20242025 compared to 2023,2024, excluding the impact of discrete items, is primarily due to the change in the mix of earnings across jurisdictions.

The income from equity method investments relates to our 50 percent ownership of the Sekisui-Fuller joint venture in Japan. The lower income for 20242025 compared to 20232024 is due to the lowerunfavorable netimpact income in our joint venture forof the year.weakening of the Japanese yen against the U.S. dollar.

Net income attributable to H.B. Fuller was $152.0 million in 2025 compared to $130.3 million in 20242024. compareddue to $144.9higher milliongross inprofit, 2023.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 and $2.59 per share in 2023.2024.

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. ForRevenue segmentand evaluationAdjusted EBITDA of each of our segments are regularly reviewed by theour chief executive officer, who acts as our chief operating decision maker, segmentto operatingmake incomedecisions about resources to be allocated to the segments and assess their performance. Adjusted EBITDA is defined as grossnet profitincome lessbefore SG&Ainterest, expenses.income Inter-segmenttaxes, revenuesdepreciation and amortization and foreign currency gain/loss, adjusted for other items within a relevant period which are recordednot atreflective costof plusthe asegment’s markupoperating forperformance administrativein costs.the period. Corporate expenses, other than those included in Corporate Unallocated, are allocated to each operating segment.

Net revenue decreasedincreased 3.40.3 percent in 20242025 compared to 2023.2024. The 4.00.1 decreasepercent increase in organic revenue growth was attributable to an increase in product pricing, partially offset by a decrease in product pricing and sales volume. The 2.31.5 percent increase in net revenue from M&A was due to acquisitions of BeardowGEM AdamsS.r.l and Medifill Limited in the secondfirst quarter of 2023 and Adhezion in the third quarter of 2023.2025. The 1.71.3 percent negative currency effect was due to a weaker Egyptian pound, Turkish lira, Brazilian realreal, Mexican peso and ChileanTurkish pesolira offset by a stronger Euro, Colombian peso and British pound sterlingEuro compared to the U.S. dollar. As a percentage of net revenue, raw material costs decreasedincreased 12010 basis points due to lower raw material costs.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 lower product pricing and the impact of acquisitions. SG&A expenses as a percentage of net revenue increased 150 basis points due to the impact of acquisitions, lower net revenueacquisitions and higher compensation costs. Segment operatingadjusted incomeEBITDA margin increased 70 basis points due to higher depreciation and amortization expense and higher pension and other postretirement plan income. Segment adjusted EBITDA decreased 12.90.6 percent and segment operatingadjusted EBITDA margin as a percentage of net revenue decreased 13020 basis points in 20242025 as compared to 2023.2024.

Net revenue increased 2.15.2 percent in 20242025 compared to 2023.2024. The 1.00.7 percent decreaseincrease in organic revenue growth was attributable to a decrease in product pricing, partially offset by an increase in salesproduct volume.pricing. The 3.74.7 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 0.60.2 percent negative currency effect was due to a weaker Chinese renminbi, Turkish lira, Chinese renminbilira and BrazilianMexican realpeso offset by a stronger Euro and British pound sterling compared to the U.S. dollar. As a percentage of net revenue, raw material costs decreased 310260 basis points due to increased pricing, lower raw material costs.costs and the impact of acquisitions. Other manufacturing costs as a percentage of net revenue increased 14020 basis points due to the impact of lower product pricing and the impact of acquisitions, partially offset by increased sales volume.points. SG&A expenses as a percentage of net revenue increased 16060 basis points primarily due to the acquisitionimpact of ND Industriesacquisitions and higher compensation costs. Segment operatingadjusted incomeEBITDA margin increased 3.050 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 operatingadjusted EBITDA margin increased 10230 basis points in 20242025 as compared to 2023.2024.

Net revenue increased 17.20.4 percent in 20242025 compared to 2023.2024. The 9.51.3 percent increasedecrease in organic revenue growth was attributable to ana increasedecrease in sales volume, partially offset by aan decreaseincrease in product pricing. The 7.51.5 percent increase in net revenue from M&A was due to the acquisitionsacquisition of XChem in the third quarter of 2023, Sanglier in the fourth quarter of 2023 and 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. dollar. As a percentage of net revenue, raw material costs decreased 80100 basis points due to increased pricing and lower raw material costs. Other manufacturing costs as a percentage of net revenue decreasedincreased 6050 basis points due to higher sales volume, partially offset by lower product pricing.points. SG&A expenses as a percentage of net revenue decreasedincreased 19090 basis points primarily due to higher compensation costs. Segment adjusted EBITDA margin increased 40 basis points due to increasedhigher netdepreciation revenue,and partiallyamortization offset by the impact of acquisitionsexpense and higher compensationpension costs.and other postretirement plan income. Segment operatingadjusted incomeEBITDA increased 321.70.6 percent and segment operatingadjusted EBITDA margin aswas a percentage of net revenue increased 330 basis pointsflat in 20242025 as compared to 2023.2024.

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.

Total cash and cash equivalents as of November 30,29, 20242025 were $169.4$107.2 million compared to $179.5$169.4 million as of DecemberNovember 2,30, 2023.2024. 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 and $1,838.4 million as of December 2, 2023.2024.

NotesThere were no notes payable wereat November 29, 2025 and a balance of $0.6 million at November 30, 20242024. andNotes $1.8 million at December 2, 2023. These amountspayable primarily representedrepresents various foreign subsidiaries’ short-term borrowings that were not part of committed lines. The current weighted-average interest ratesrate on these short-term borrowings werewas approximately 6.171.35 percent in 2024 and 10.75 percent in 2023.2024.

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 percent (6.175.52 percent at November 30,29, 20242025). The interest rate spread is based on a secured leverage grid. Term Loan A matures on February 15, 2028. At November 30,29, 2024,2025, a balance of $462.5$431.3 million was outstanding on Term Loan A. Interest on Term Loan B is payable at SOFR plus an interest rate spread of 2.001.75 percent with a SOFR floor of 0.50 percent (6.575.67 percent at November 30,29, 20242025). Term Loan B matures on February 15, 2030. At November 30,29, 2024,2025, a balance of $989.0$979.1 million was outstanding on Term Loan B. On 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.

We have a revolving credit agreement with a consortium of financial institutions at November 30,29, 2024.2025. 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 (6.175.52 percent at November 30,29, 20242025). 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 leverage grid. At November 30,29, 2024,2025, there was no$36.0 balancemillion outstanding on the Revolving Credit Facility. The Revolving Credit Facility matures on February 15, 2028.

1 Net working capital (trade receivables, net of allowance for doubtful accounts plus inventory minus trade payables) divided by annualized net revenue (current quarter, multiplied by 4).revenue.

2 Trade receivables net of allowance for doubtful accounts multiplied by 91 (13 weeks) and divided by the net revenue for the quarter.revenue.

This Form 10-Q contains forward-looking statements concerning our future programs, products, expenses, revenue, liquidity and cash needs as well as our plans and strategies. These forward-looking statements are based on current expectations and we assume no obligation to update this information. Numerous factors could cause actual results to differ significantly from the results described in these forward-looking statements, including the risk factors identified under Part I, Item 1A. Risk Factors contained in our Annual Report on Form 10-K for the fiscal year ended November 29, 2025. There have been no material changes in the risk factors disclosed by us under Part I, Item 1A. Risk Factors contained in the Annual Report on Form 10-K for the fiscal year ended November 29, 2025.2025, except for the addition of the following risk factor:

Net revenue in the secondthird quarter of 2026 increased 5.85.2 percent from the secondthird quarter of 2025. The increase was due to a 3.17.4 percent increase due to pricing, a 0.7 percent increase due to positive currency effects, a 3.0 percent increase due to pricingeffects and a 0.1 percent increase due to acquisitions, partially offset by a 0.43.0 percent decrease due to sales volume compared to the secondthird quarter of 2025. The positive currency effect was primarily driven by a stronger Euro, Chinese renminbi, Brazilian real, Australian dollar, Mexican peso, British poundpeso and PolishColombian złotypeso partially offset by a weaker Indian rupeerupee, Euro, and Turkish lira compared to the U.S. dollar. Gross profit margin increased 170120 basis points primarily due to higher product pricing and the impact of restructuring actions.

Net revenue in the first sixnine months of 2026 increased 2.03.1 percent from the first sixnine months of 2025. The increase was due to a 3.33.7 percent increase due to pricing, a 2.4 percent increase due to positive currency effects, a 1.8 percent increase due to pricingeffects and a 0.40.3 percent increase due to acquisitions, partially offset by a 3.53.3 percent decrease due to sales volume compared to the first sixnine months of 2025. The positive currency effect was primarily driven by a stronger Euro, Chinese renminbi, Brazilian real, British pound, Mexican peso andpeso, Australian dollar and British pound partially offset by a weaker Indian rupee and Turkish lira and Indian rupee compared to the U.S. dollar. Gross profit margin increased 190160 basis points primarily due to higher product pricing and the impact of acquisitions and restructuring actions.

Net income attributable to H.B. Fuller in the secondthird quarter of 2026 was $67.8$79.2 million compared to $41.8$67.2 million in the secondthird quarter of 2025. Diluted earnings per share for the secondthird quarter of 2026 was $1.23$1.44 per share compared to $0.76$1.22 per share for the secondthird quarter of 2025.

Net income attributable to H.B. Fuller in the first sixnine months of 2026 was $88.9$168.0 million compared to $55.1$122.2 million in the first sixnine months of 2025. Diluted earnings per share for the first sixnine months of 2026 was $1.61$3.05 per share compared to $0.99$2.21 per share for the first sixnine months of 2025.

Adjusted EBITDA in the secondthird quarter of 2026 increased 9.39.4 percent from the secondthird quarter of 2025, primarily due to higher gross profit, partially offset by higher compensation expense and higher foreign currency losses .expense.

Adjusted EBITDA in the first sixnine months of 2026 increased 7.08.0 percent from the first sixnine months of 2025, primarily due to higher gross profit, partially offset by higher compensation expense and higher foreign currency losses .expense.

During fiscal year 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 approximately $85.0$87.0 million to $90.0 million ($58.0$59.2 million to $61.4 million after tax), which include (i) cash expenditures of approximately $51.0 million to $52.0 million ($34.8 million to $35.5 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 $84.4$85.2 million under the Plans as of MayAugust 30,29, 2026. Remaining cash payments will continue intofor the remainder of fiscal year 2026.

The Company approved restructuring actions related to global footprint optimization during the fourth quarter of 2025. In implementing these restructuring actions, the Company currently expects to incur costs of approximately $11.2$45.0 million to $13.0$50.0 million ($8.3$33.3 million to $9.6$37.0 million after tax), which include (i) cash expenditures of approximately $6.5$14.0 million to $7.5$16.0 million ($4.8$10.4 million to $5.5$11.8 million after tax) for severance and related employee costs globally and (ii) other restructuring costs related to optimizing the Company’s footprint and the payment of anticipated income taxes in certain jurisdictions related to the other restructuring actions. We have incurred costs of $7.3$11.6 million under the other restructuring actions as of MayAugust 30,29, 2026. The restructuring actions related to global footprint optimization began to be implemented in the fourth quarter of 2025 and are currently expected to be completed during fiscal year 2028. Restructuring costs are expected to be incurred over the next several fiscal quarters as the measures are implemented with the majority of the charges recognized and cash payments occurring in fiscal 2026 and 2027.

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 the secondthird quarter and first sixnine months of 2026 compared to the secondthird quarter and first sixnine months of 2025:

Organic revenue increased 2.64.4 percent in the secondthird quarter of 2026 compared to the secondthird quarter of 2025 and consisted of a 6.2 percent increase in Building Adhesive Solutions, a 3.06.4 percent increase in Hygiene, Health and Consumable Adhesives, a 5.2 percent increase in Building Adhesive Solutions and a 1.00.7 percent decreaseincrease in Engineering Adhesives. The overall increase was driven by a 3.07.4 percent increase in product pricing, partially offset by a 0.43.0 percent decrease in sales volume. The 0.1 percent increase from M&A was due to the acquisition of ND Industries Turkey, discussed further in Operating Segment Results below. The positive 3.10.7 percent foreign currency impact was primarily driven by a stronger Euro, Chinese renminbi, Brazilian real, Australian dollar, Mexican peso, British poundpeso and PolishColombian złotypeso partially offset by a weaker Indian rupeerupee, Euro, and Turkish lira compared to the U.S. dollar.

Organic revenue decreasedincreased 1.70.4 percent in the first sixnine months of 2026 compared to the first sixnine months of 2025 and consisted of a 3.22.6 percent increase in Building Adhesive Solutions, a 0.1 percent decrease in Hygiene, Health and Consumable Adhesives,Adhesives and a 1.40.7 percent decrease in Engineering Adhesives and a 1.1 percent increase in Building Adhesive Solutions.Adhesives. The overall decreaseincrease was driven by a 3.53.7 percent increase in product pricing, partially offset by a 3.3 percent decrease in sales volume, partially offset by a 1.8 percent increase in product pricing.volume. The 0.40.3 percent increase from M&A was due to the acquisition of GEM, ND Industries Taiwan and ND Industries Turkey, discussed further in Operating Segment Results below. The positive 3.32.4 percent foreign currency impact was primarily driven by a stronger Euro, Chinese renminbi, Brazilian real, British pound, Mexican peso andpeso, Australian dollar and British pound partially offset by a weaker Indian rupee and Turkish lira and Indian rupee compared to the U.S. dollar.

Cost of sales as a percentage of net revenue in the secondthird quarter of 2026 compared to the secondthird quarter of 2025 decreased 170120 basis points. Raw material cost as a percentage of net revenue decreased 23040 basis points in 2026 compared to 2025 primarily due to higher product pricing.pricing partially offset by higher raw material costs. Other manufacturing costs as a percentage of net revenue increaseddecreased 6080 basis points in 2026 compared to 2025 primarily due to higher manufacturingproduct pricing and distributionthe costsimpact partially offset byof restructuring actions.

Cost of sales as a percentage of net revenue in the first sixnine months of 2026 compared to the first sixnine months of 2025 decreased 190160 basis points. Raw material cost as a percentage of net revenue decreased 240170 basis points in 2026 compared to 2025 primarily due to higher product pricing and the impact of acquisitions.acquisitions partially offset by higher raw material costs. Other manufacturing costs as a percentage of net revenue increased 5010 basis points in 2026 compared to 2025 due to higher manufacturing and distribution costs.2025.

Gross profit in the secondthird quarter of 2026 increased 11.69.3 percent and gross profit margin increased 170120 basis points compared to the secondthird quarter of 2025. The increase in gross profit margin was due to higher product pricing and the impact of restructuring actions, partially offset by higher manufacturing and distribution costs.actions.

Gross profit in the first sixnine months of 2026 increased 8.28.6 percent and gross profit margin increased 190160 basis points compared to the first sixnine months of 2025. The increase in gross profit margin was due to higher product pricing and the impact of acquisitions and restructuring actions, partially offset by higher manufacturing and distribution costs.

SG&A expenses for the secondthird quarter of 2026 compared to the secondthird quarter of 2025 increased 60160 basis points as a percentage of net revenue. The increase was due to the impact of higher compensation expense and a weaker U.S. dollar compared to various foreign currencies, partially offset by higher revenue.

SG&A expenses for the first sixnine months of 2026 compared to the first sixnine months of 2025 increased 70100 basis points as a percentage of net revenue. The increase was due to the impact of higher compensation expense, acquisitions and a weaker U.S. dollar compared to various foreign currencies, partially offset by higher revenue.

Other income, net in the secondthird quarter of 2026 included $6.5 million of net defined benefit pension benefits, $0.3$0.4 million of other income and $1.2$19.5 million of currency transaction loss.gains. The currency transaction gains primarily consisted of a $19.7 million unrealized gain on a forward exchange contract related to a pending acquisition. Other income, net in the secondthird quarter of 2025 included $5.7 million of net defined benefit pension benefits and $1.4$0.1 million of other income, partially offset by a $0.5 million of currency transaction gains.losses.

Other income, net in the first sixnine months of 2026 included $12.8$19.3 million of net defined benefit pension benefits, $0.4$0.9 million of other income and $0.8$18.6 million of currency transaction loss.gains. The currency transaction gains primarily consisted of a $19.7 million unrealized gain on a forward exchange contract related to a pending acquisition. Other income, net in the first sixnine months of 2025 included $11.4$17.1 million of net defined benefit pension benefits and $2.0$1.5 million of currency transaction gains, partially offset by a $1.5 million loss on the sale of our North American Flooring business ("NA Flooring") and $1.6$1.4 million of other expense.

Interest expense in the secondthird quarter of 2026 was $32.8$40.9 million compared to $34.9$33.6 million in the secondthird quarter of 2025 primarily due to lower interest rates partially offset by higher debt levels.levels and debt extinguishment costs.

Interest expense in the first sixnine months of 2026 was $65.6$106.5 million compared to $66.9$100.5 million in the first sixnine months of 2025 primarily due to lower interest rates partially offset by higher debt levels.levels and debt extinguishment costs.

Interest income in the secondthird quarter of 2026 and 2025 was $2.0$2.5 million and $0.9$1.1 million, respectively, consisting primarily of interest related to net investment hedge activity and other miscellaneous interest income.

Interest income in the first sixnine months of 2026 and 2025 was $4.0$6.5 million and $2.0$3.1 million, respectively, consisting primarily of interest related to net investment hedge activity and other miscellaneous interest income.

Income tax expense of $25.6$24.7 million in the secondthird quarter of 2026 includes $0.3$2.1 million of discrete tax expense.benefit. Excluding the discrete tax expense,benefit, the overall effective tax rate was 27.426.4 percent. The discrete tax expensebenefit relates to various U.S. and foreign tax matters. Income tax expense of $32.7$16.5 million in the secondthird quarter of 2025 includes $14.0$3.7 million of discrete tax expense.benefit. Excluding the discrete tax expense,benefit, the overall effective tax rate was 25.724.4 percent. The discrete tax expensebenefit related to the impact of withholding tax recorded on earnings that are no longer permanently reinvested as well as other various U.S. and foreign tax matters.

Income tax expense of $33.0$57.7 million in the first sixnine months of 2026 includes $0.5$1.6 million of discrete tax benefit. Excluding the discrete tax benefit, the overall effective tax rate was 26.8 percent. The discrete tax benefit relates to various U.S. and foreign tax matters. Income tax expense of $55.2 million in the first nine months of 2025 includes $11.2 million of discrete tax expense. Excluding the discrete tax expense, the overall effective tax rate was 27.2 percent. The discrete tax expense relates to various U.S. and foreign tax matters. Income tax expense of $38.7 million in the first six months of 2025 includes $15.0 million of discrete tax expense. Excluding the discrete tax expense, the overall effective tax rate was 25.825.2 percent. The discrete tax expense related to the impact of withholding tax recorded on earnings that arewere no longer permanently reinvestedreinvested, asoffset well as otherby various U.S. and foreign tax matters.

The income from equity method investments relates to our 50 percent ownership of the Sekisui-Fuller joint venture in Japan. The higher income for the firstthird six monthsquarter of 2026 compared to the firstthird six monthsquarter of 2025 is primarily due to the higher net income in our joint venture during the yearquarter compared to the prior year, partially offset by the weakening of the Japanese yen compared to the U.S. dollar.

The net income attributable to H.B. Fuller in the secondthird quarter of 2026 was $67.8$79.2 million compared to $41.8$67.2 million in the secondthird quarter of 2025. The diluted earnings per share in the secondthird quarter of 2026 was $1.23$1.44 per share as compared to $0.76$1.22 per share in the secondthird quarter of 2025.

The net income attributable to H.B. Fuller in the first sixnine months of 2026 was $88.9$168.0 million compared to $55.1$122.2 million in the first sixnine months of 2025. The diluted earnings per share in the first sixnine months of 2026 was $1.61$3.05 per share as compared to $0.99$2.21 per share in the first sixnine months of 2025.

Adjusted EBITDA for H.B. Fuller in the secondthird quarter of 2026 was $181.0$186.7 million compared to $165.7$170.6 million in the secondthird quarter of 2025. Adjusted EBITDA as a percentage of net revenue increased 7080 basis points in the secondthird quarter of 2026 compared to secondthird quarter of 2025 due to higher gross profit, partially offset by higher compensation expense and higher foreign currency losses.expense. For a reconciliation of Adjusted EBITDA to net income attributable to H.B. Fuller as reflected in the unaudited consolidated statement of income see "Non-GAAP Measures" below.

Adjusted EBITDA for H.B. Fuller in the first sixnine months of 2026 was $299.7$486.5 million compared to $280.0$450.6 million in the first sixnine months of 2025. Adjusted EBITDA as a percentage of net revenue increased 80 basis points in the first sixnine months of 2026 compared to first sixnine months of 2025 primarily due to higher gross profit, partially offset by higher compensation expense and higher foreign currency losses.expense. For a reconciliation of Adjusted EBITDA to net income attributable to H.B. Fuller as reflected in the unaudited consolidated statement of income see "Non-GAAP Measures" below.

Our three reportable operating segments consist of Hygiene, Health and Consumable Adhesives, Engineering Adhesives and Building Adhesive Solutions. 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,taxes and depreciation and amortization and foreign currency gain/loss,amortization, 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.

Net revenue increased 6.17.0 percent in the secondthird quarter of 2026 compared to the secondthird quarter of 2025. Organic revenue growth increased due to an increase in product pricing, partially offset by a decrease in sales volume. The positive currency effect was due to a stronger Euro,Chinese renminbi, Brazilian real, Chinese renminbireal and MexicanColombian peso partially offset by a weaker Indian rupee compared to the U.S. dollar. Segment adjusted EBITDA increased 21.711.5 percent in the secondthird quarter of 2026 compared to the secondthird quarter of 2025 primarily due to higher product pricing,pricing and slightly lower manufacturing costs, partially offset by higher manufacturing and distribution costs and higher compensation expense. Segment adjusted EBITDA margin increased 23070 basis points primarily due to higher segment adjusted EBITDA, partially offset by the impact of higher revenue.

Net revenue increased 0.42.6 percent in the first sixnine months of 2026 compared to the first sixnine months of 2025. Organic revenue growth decreased due to a decrease in sales volume, partially offset by an increase in product pricing. The 0.40.3 percent increase in net revenue from M&A was due to the acquisition of GEM in the first quarter of 2025. The positive currency effect was due to a stronger Euro, Brazilian real, Chinese renminbi and Mexican peso partially offset by a weaker Indian rupee compared to the U.S. dollar. Segment adjusted EBITDA increased 13.512.7 percent in the first sixnine months of 2026 compared to the first sixnine months of 2025 primarily due to higher product pricing, the impact of acquisitions, partially offset by higher compensation expense. Segment adjusted EBITDA margin increased 190150 basis points primarily due to higher segment adjusted EBITDA, partially offset by the impact of higher revenue.EBITDA.

Net revenue increased 2.4 percent in the firstthird six monthsquarter of 2026 compared to the firstthird six monthsquarter of 2025. Organic revenue growth decreasedincreased due to an increase in product pricing, partially offset by a decrease in sales volume, partially offset by an increase in product pricing.volume. The 0.60.4 percent increase in net revenue from M&A was due to the acquisition of ND Industries Taiwan and ND Industries Turkey. The positive currency effect was due to a stronger Euro and Chinese renminbi compared to the U.S. dollar. Segment adjusted EBITDA increased 3.94.7 percent in the firstthird six monthsquarter of 2026 compared to the firstthird six monthsquarter of 20252025, primarily due to higher product pricing and the impact of acquisitions,pricing, partially offset by higher compensation expense. Segment adjusted EBITDA margin increased 3050 basis points.

Net revenue increased 9.45.5 percent in the secondthird quarter of 2026 compared to the secondthird quarter of 2025. Organic growth increased due to an increase in product pricing, partially offset by a decrease in sales volume and product pricing.volume. The positive currency effect was due to a stronger Euro and Australian dollar partially offset by a weaker Euro compared to the U.S. dollar. Segment adjusted EBITDA increased 10.48.0 percent in the secondthird quarter of 2026 compared to the secondthird quarter of 2025 primarily due to higher revenue, partially offset by higher manufacturing and distribution costs and higher compensation expense. Segment adjusted EBITDA margin increased 2050 basis points.

Net revenue increased 4.75.0 percent in the first sixnine months of 2026 compared to the first sixnine months of 2025. Organic growth increased due to an increase in product pricing, partially offset by a decrease in sales volume. The positive currency effect was due to a stronger Euro and British pound compared to the U.S. dollar. Segment adjusted EBITDA increased 6.26.9 percent in the first sixnine months of 2026 compared to the first sixnine months of 2025 primarily due to higher product pricing, partially offset by higher manufacturing and distribution costs and higher compensation expense. Segment adjusted EBITDA margin increased 30 basis points.

Total cash and cash equivalents as of MayAugust 30,29, 2026 were $114.1$97.2 million compared to $107.2 million as of November 29, 2025 and $96.8$122.5 million as of MayAugust 31,30, 2025. The majority of the $114.1$97.2 million in cash and cash equivalents as of MayAugust 30,29, 2026 was held outside the United States. Total long and short-term debt was $2,072.2$2,054.5 million as of MayAugust 30,29, 2026, $2,016.9 million as of November 29, 2025 and $2,112.4$2,080.5 million as of MayAugust 31,30, 2025. The total debt to total capital ratio as measured by total debt divided by total debt plus total stockholders’ equity was 49.948.7 percent as of MayAugust 30,29, 2026 as compared to 50.2 percent as of November 29, 2025 and 53.051.5 percent as of MayAugust 31,30, 2025.

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. As of MayAugust 30,29, 2026, we were in compliance with all covenants of our credit agreement contractual obligations as shown in the following table:

Net income including non-controlling interest was $88.9$168.0 million in the first sixnine months of 2026 compared to $55.1$122.3 million in the first sixnine months of 2025. Depreciation and amortization expense totaled $92.4$138.5 million in the first sixnine months of 2026 compared to $87.3$132.8 million in the first sixnine months of 2025. Deferred income taxes were a use of cash of $9.1$15.5 million in the first sixnine months of 2026 compared to $14.1$39.2 million in the first sixnine months of 2025. Accrued compensation was a use of cash of $19.6$15.2 million in the first sixnine months of 2026 compared to $23.5$19.2 million in the first sixnine months of 2025. Other assets were a use of cash of $9.3$4.8 million in the first sixnine months of 2026 compared to $2.4a source of cash of $2.2 million in the first sixnine months of 2025. Other liabilities were a use of cash of $6.1$5.1 million in the first sixnine months of 2026 compared to a source of cash $24.8$28.6 million in the first sixnine months of 2025.

Changes in net working capital (accounts receivable, net, inventory and accounts payables) accounted for a use of cash of $24.7$91.7 million in the first sixnine months of 2026 compared $57.5$71.2 million in the first sixnine months of 2025. The table below provides the cash flow impact due to changes in the components of net working capital and an assessment of each of the components:

Purchases of property, plant and equipment were $104.4$141.7 million during the first sixnine months of 2026 compared to $64.5$94.6 million for the same period of 2025. This difference reflects the timing of capital projects and expenditures related to growth initiatives.

We did not pay any cash for business acquisitions during the first six months of 2026. During the first sixnine months of 2025,2026, we paid $162.0$3.8 million in cash for business acquisitions and $11.6 million of a holdback for our acquisitions. During the first nine months of 2025, we paid $162.1 million in cash for business acquisitions and received $75.7 million in cash related to the sale of our NA Flooring business.

In the first sixnine months of 2026, borrowings on our revolving credit facility were $627.0$1,643.5 million and repayments on our revolving credit facility and our long-term debt totaled $571.7$1,604.0 million. These borrowings are for general working capital purposes and permitted acquisitions. Borrowings on our revolving credit facility were $784.9$1,114.3 million and repayments on our revolving credit facility and our long-term debt totaled $687.8$1,053.6 million in the first sixnine months of 2025. There were no net payments of other short-term notes payable in the first sixnine months of 2026 compared to $0.6 million in the same period of 2025. Cash dividends paid were $26.0$39.1 million in the first sixnine months of 2026 compared to $24.9$37.6 million in the same period of 2025. Repurchases of common stock were $48.8$48.9 million in the first sixnine months of 2026 compared to $60.7 million in the same period of 2025.

1 Other for the three and sixnine months ended MayAugust 30,29, 2026 includes debt extinguishment and bridge financing costs related to a pending acquisition of $7,791. Additionally, it includes acquired environmental liabilities and ongoing litigation and product claims related to a divested business.