H. B. Fuller Company

Thank you for standing by. My name is Kate, and I will be your conference operator today. At this time, I would like to welcome everyone to the HB Fuller Q1 2026 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you. I would now like to turn the call over to Scott Jensen, Investor Relations. Please go ahead.

Thank you, operator. Welcome to HP Fuller's first quarter 2026 investor conference call. Presenting today are Celeste Mastin, President and Chief Executive Officer, and John Corcoran, Executive Vice President and Chief Financial Officer. After our prepared remarks, we will have a question and answer session. Before we begin, let me remind everyone that our comments today will include references to certain non-GAAP financial measures. These measures are supplemental to the results determined in accordance with GAAP. We believe that these measures are useful to investors in understanding our operational performance and to compare our performance with other companies. Reconciliation of non-GAAP measures to the nearest GAAP measure are included in our earnings release. Unless otherwise noted, comments about revenue refer to organic revenue and comments about EPS, EBITDA, and profit margins refer to adjusted non-GAAP measures. We will also 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 covered in our earnings release, comments made during this call, and the risk factors detailed in our filings with the SEC, all of which are available on our website at investors.hbfuller.com. I will now turn the call over to Celeste Mastin. Celeste?

Thank you, Scott, and welcome to today's call. In the first quarter, we delivered on our profit commitment and executed with discipline in a challenging operating environment. We continued to expand margins by leveraging our global sourcing strength and maintaining a focused approach to cost and portfolio management. To start today's call, we will cover our consolidated results in the first quarter. We will also spend significant time discussing the impact on supply chains resulting from the recent events in the Middle East and the actions we are taking to successfully navigate this new operating environment. In the first quarter, organic revenue decreased 6.6% year on year as positive pricing was offset by lower volume. From a profitability perspective, EBITDA of $119 million, which was at the higher end of our guidance range, increased 4% year-on-year, and EBITDA margin expanded 90 basis points to 15.4%. This was primarily driven by continued restructuring savings from Quantum Leap and the positive impact from price and raw material cost actions that more than offset the impact from lower volumes. Now let me move on to review the performance in each of our segments in the first quarter. EA organic revenue increased approximately 3 percent in the first quarter, excluding the impact of exiting the lower margin solar business, driven by continued strength in electronics and aerospace. Organic revenue declined 2 percent in the first quarter, including solar. EBITDA increased 9% in EA and EBITDA margin increased 120 basis points year on year to 19.9%. Favorable net pricing and raw material cost actions and the benefit from restructuring drove the year on year margin expansion. In HHC, organic revenue declined 10% year over year reflecting a challenging environment and a tough comparison to the first quarter of 2025 when the business delivered 4% organic growth. We saw customers maintain tighter inventory levels and consumers continue to shift away from premium products to lower cost alternatives and smaller package sizes as they manage ongoing affordability pressures. Through disciplined cost management, EBITDA margins were 13.9%, up 120 basis points versus last year, reflecting pricing and raw material cost actions as well as strong expense control. In BAS, organic sales decreased 5.1% year-on-year, consistent with our expectations. The team executed well, even under challenging weather conditions. EBITDA for BAS decreased 1% year on year and EBITDA margins were flat as positive price and raw material actions as well as restructuring savings were offset by volume declines. Geographically, America's organic revenue was down 4% year on year. Declines in HHC were partially offset by EA, which achieved organic revenue growth of 8% year on year driven by continued strength in the aerospace and general industries market segments. In EIMEA, organic revenue decreased 11% year-on-year, primarily driven by tighter customer inventory management in HHC, a weak construction market in BAS, and a tough comparison to the first quarter of 2025 when HHC revenue grew over 10%. Asia Pacific organic revenue was up 2%, excluding solar, lower than trend due to the timing of Chinese New Year. Total organic revenue decreased 6% year on year, including solar. Now let's turn to the developing supply chain impact resulting from the conflict in the Middle East and its implication for our business. This is a critical development for our industry. This conflict is already creating significant constraints on raw material availability with impacts that extend across feedstocks, intermediates, logistics lanes, and energy inputs. We have received over 40 force majeure letters from suppliers in recent weeks, clear evidence that this is a major disruption. Chemical production capacity has decreased significantly and tanker routes have been disrupted and repositioned. Even if this conflict were resolved tomorrow, we would expect supply chain aftershocks to persist throughout the year as inventories rebalance, transportation and logistics normalize, and plants work through restart cycles. As a result, there will likely be significant broad-based inflationary pressure and raw material shortages. While the magnitude will vary by region and technology, it is clear the system is under stress and volatility will remain elevated. We are taking swift and decisive action by deploying the full scope of our global sourcing and supply assurance infrastructure. Our global sourcing organization was an industry first mover, leveraging our long-established, strong relationships with suppliers and strategic category management. Since the conflict began, they have taken mitigating actions in securing raw materials ahead of the broader market, reallocating volumes across regions, and pursuing qualified substitutes where available. These are the same capabilities that differentiated HB Fuller in 2021 and 2022 when we navigated unprecedented volatility and successfully supported our customers. We have already taken swift pricing action to reflect the increase in raw material prices, announcing a minimum 10% price increase across all product lines globally, effective April 1st, with significantly higher price adjustments for certain technologies and regions where cost escalation is more acute. These steps are designed to offset supply shock inflation and protect customer service levels. Importantly, the adhesive industry is traditionally one where gaining market share is a function of bringing solutions for new applications. It's more difficult to take share from established business allocation given the high performance requirements of products and the natural customer aversion to change. In current conditions, many competitors are now confronting real supply uncertainty, creating an opening for HB Fuller. In summary, this disruption creates a unique opportunity to support existing customers and gain market share, positioning us for improved volume growth in the future. Now let me turn the call over to John Corcoran to review our first quarter results in more detail and our updated outlook for 2026.