Sep 24, 2026 earnings call — Margin expansion and Project Quantum Leap progress
Revenue was up 5.2% year-on-year and adjusted EBITDA was $187 million.
Revenue $0.9B (est $0.9B) · EPS $1.52 (est $1.47)
Key quotes
"We continue to target approximately $75 million of annualized conversion cost savings by the end of 2030."
"The continued execution of our pricing actions drove EBITDA growth and margin expansion across all 3 GBUs, enabling us to successfully offset elevated raw material inflation."
"We continue to make strong progress through the required regulatory approval process and remain on track to close the transaction by year-end."
Analyst Q&A 8
why volumes beat guidance and risks
Q (Michael Harrison · Seaport Research Partners): Analyst asked why volumes were better than guided and what drove margin strength. He also asked how confident management is that volumes turn positive in fiscal 2027 and which end markets are most at risk.
A: Management said customer material constraints outside adhesives were less severe than expected, and order patterns have been more volatile with stronger shipments late in the quarter. They said solar exit will be fully lapped for 2027, AMS adds higher-growth business, and key external risks include electronics (chips), construction weakness, and China. They also noted Asia performance was good and BAS innovation helped growth in packaging.
"So looking ahead to 2027, focusing on things that are, let's say, specific to H.B. Fuller, we'll have fully lapped the impact of our exit of solar." — John Corkrean (CFO)
HHC volume drop and AMS update
Q (David Begleiter · Deutsche Bank): Analyst asked why HHC volumes are down about 9% over two years. He also asked how AMS has performed in the last 2–3 months and if it is on track with prior projections.
A: Management said HHC has been hit by lower packaged food consumption after GLP use and weak household formation and homebuilding. They would not comment on AMS month-to-month performance but pointed to AMS first-half results showing adjusted EBITDA up 8% and revenue up 4%, and they expect AMS to grow about 8% a year on average.
"They showed adjusted EBITDA improving by 8% first half of '26 versus first half of '25, which is how they report." — Celeste Mastin (CEO)
EA demand and pricing for 2027
Q (Ghansham Panjabi · Baird): Analyst asked if EA demand is changing, given electronics and auto weakness, and how to think about pricing flow-through and future price increases for fiscal 2027. He asked for variance detail and pricing contribution.
A: Management said EA was strong in Europe and the U.S., but Asia—especially China—saw electronics and EV slowdowns that weighed on the quarter; solar impacts will be clear by Q4. For 2027, they expect carryover of pricing and raw material impacts in H1 and Quantum Leap benefits more in H2, will continue selective price increases, expect a positive but smaller gap between pricing and raw materials next year, and Quantum Leap should add about $20 million to $25 million of incremental savings.
"Quantum Leap, as we said in our remarks, should contribute about $20 million to $25 million of incremental savings next year." — John Corkrean (CFO)
land sale, pricing, and deleveraging plans
Q (Jeffrey Zekauskas · JPMorgan): Analyst asked whether the reported ~$33 million of land sales are sales or sale-and-leasebacks, and whether that is the right cash amount. He also asked if prices are higher than the quarter average of 7.4%, and whether shareholder pressure changed operating plans.
A: Management said these are outright sales of manufacturing facilities and associated land and not leasebacks, and proceeds will pay severance and closure costs. They said pricing exited the quarter at 7.6% and will continue to be adjusted judiciously to cover raw material changes. Management also said deleveraging is a very high priority, they are reviewing the portfolio more critically and considering divestitures, and Quantum Leap and other actions should improve cash flow and help reduce debt.
"So deleveraging will be a very, very high priority for us, as you can imagine, as soon as we close the AMS transaction, Jeff, in fact, we are already working hard on trying to bring our debt level down." — Celeste Mastin (CEO)
margin drivers and medical growth
Q (Citi): Analyst asked for the puts and takes on price versus cost that drove the margin expansion and for confidence on margin expansion into 2027. He also asked about stability of medical end-market growth in a higher-for-longer rate environment.
A: Management said margin expansion was largely driven by pricing execution outpacing raw material costs, plus early Quantum Leap savings; they expect the pricing/raw gap to narrow next quarter but still expect margin expansion next year as Quantum Leap benefits grow. They said the medical surgical bonding market is high-growth and should continue to grow with more procedures and more small procedures where adhesives are used, helping balance cyclicality elsewhere.
"So the impact we're seeing is largely driven by pricing execution relative to raw materials flowing through." — John Corkrean (CFO)
AMS financing and demand vs macro trends
Q (Kevin McCarthy · Vertical Research Partners): Analyst asked for details on AMS financing plans and current cost of debt, and asked whether adhesive demand should reconverge with macro metrics over time.
A: Management said bridge financing is in place and their plan is to execute takeout financing prior to close, with structure likely a mix of shorter-term Term Loan B facilities and unsecured bonds and with takeout financing being finalized before close. They also said it's hard to index adhesives to macro metrics because the business spans many end markets and regions, they have low share so technology and higher-value adhesives can change volumes, and those dynamics can disassociate adhesive volumes from broad macro indices.
"Our plan would be to execute the takeout financing prior to close, having it contingent on the close, and we're quite far along, I would say, in planning for that." — John Corkrean (CFO)
next year outlook and AMS sensitivity
Q (Lucas Beaumont · UBS): Analyst asked how to think about next year's growth given pricing, volumes, Quantum Leap, and whether EBITDA might be low- to mid-single-digit. He also asked how defensive AMS sales and earnings are and whether macro weakness would affect synergy targets or deleveraging.
A: Management said they are not ready to conclude low single-digit EBITDA yet and will give more detail in January; they expect to grow next year and see pricing/raw benefits plus Quantum Leap execution supporting growth. They said AMS is on track with synergies (Peters Surgical closures) and that the surgical tissue-bonding market is growing; the combined business makes them the second-largest surgical tissue-bonding company and should be less sensitive to the industrial and construction cycles.
"The combination of the 2 businesses makes us the second largest surgical tissue bonding company in the world." — Celeste Mastin (CEO)
BAS unsolicited offer and dissynergies
Q (Michael Harrison · Seaport Research Partners): Analyst asked management to quantify dissynergies cited when rejecting the BAS unsolicited proposal and whether there is a price at which a BAS divestiture could still make sense.
A: Management said BAS is significantly integrated into the company and many plants produce multiple materials for many segments, so divesting BAS creates stranded costs and sourcing impacts. They said BAS likely manufactures in 25–30 facilities with about two-thirds shared with other businesses, and BAS represents about 20% of revenue and roughly 35%–40% of solvent purchases, so selling it would reduce purchasing power; those impacts can be overcome depending on valuation but were meaningful in the Board's review.
"They probably manufacture in 25, 30 different manufacturing facilities, probably 2/3 of which they're sharing with the other businesses." — John Corkrean (CFO)