H. B. Fuller Company

Hello and welcome to the HB Fuller second quarter 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. And if you would like to ask a question during this time, please press star one on your telephone keypad. I would now like to turn the conference over to Scott Jensen, Director of Investor Relations. You may begin.

Thank you, operator. Welcome to HB Fuller's second quarter 2026 investor conference call. Presenting today are Celeste Mastin, President and Chief Executive Officer, and John Corkrean, 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 operating 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. During this call, we will be referencing information from our second quarter earnings release along with the press release related to our announced offer to acquire Advanced Medical Solutions. I will now turn the call over to Celeste Mastin. Celeste?

Thank you, Scott, and welcome to today's call. We executed very well in the second quarter, delivering strong year-on-year revenue, EBITDA, and EPS growth with results above the midpoint of our EBITDA guidance range. Our global sourcing capabilities and swift pricing actions have enabled us to maintain supply continuity and reliably serve our customers through this market disruption. These efforts, combined with our quantum leap restructuring initiative, have strengthened our competitive position and we remain confident in our ability to deliver superior financial results. To start today's call, we'll cover our consolidated results for the second quarter, We will then spend time discussing our announced offer to acquire Advanced Medical Solutions, or AMS. AMS is a highly compelling strategic fit and represents a rare opportunity to advance our long-term strategic priorities. We have long been clear that medical is a core strategic growth market for HB Fuller, given its durable demand trends, high regulatory-based entry barriers, and attractive margin profile. Advanced Medical Solutions has built an exceptional business as a differentiated formulator with an innovation-led platform and outstanding product suite, impressive R&D capabilities, and a global commercial footprint with supporting regulatory expertise. The transaction is expected to result in significant revenue and cost synergies and accelerate our transformation into a higher growth, higher margin business. We remain committed to disciplined and balanced capital allocation and believe that the continued up-tiering of our portfolio, as well as the other steps we're taking to improve our cost structure and cash flow profile, will allow for robust deleveraging post-acquisition. We look forward to walking you through more details later in the call. Turning back to our consolidated results in the second quarter, revenue was up 5.8% year on year. Adjusting for foreign exchange and acquisitions, organic growth was 2.6%, driven by pricing of 3%, partially offset by slightly lower volume year-on-year. From a profitability perspective, EBITDA of $181 million increased 9% year-on-year, and EBITDA margin expanded 70 basis points to 19.1%, with EPS up 19%. versus the same period last year. Our previously announced pricing initiatives are gaining traction, offsetting the anticipated impact of increasing raw material costs. Now let me move on to review the performance in each of our segments in the second quarter. In HHC, organic revenue increased 3% year over year, reflecting the impact of positive pricing. Strength in medical, Tape and label and end of line packaging was partially offset by weakness in flexible packaging. We saw improved volume performance compared to the first quarter, demonstrating our ability to reliably serve customers during widespread disruption. EBITDA margins were 17.9%, up 230 basis points versus last year, reflecting the impact of strong pricing execution. EA organic revenue increased approximately 5% in the second quarter, excluding the impact of exiting the lower margin solar business, driven by continued strength in aerospace, electronics, and general industries. Organic revenue declined 1% in the second quarter, including solar. EBITDA margin of 22.4% was down slightly year on year, as favorable pricing and restructuring savings were offset by higher variable compensation associated with higher profit. BAS performed very well with organic sales up 6% year on year, underscoring our strong competitive position. Both pricing and volumes were positive, driven by strength in glass and infrastructure and mechanical. EBITDA for BAS increased 10% year on year, Driven by the impact of positive pricing and volume. Geographically, America's organic revenue was up 1% year-on-year. Strength in EA and BAS, which both achieved organic revenue growth of 4% year-on-year, more than offset declines in HHC. Positive organic growth was driven by strong performance in aerospace, general industries, and infrastructure and mechanical market segments. In EIMEA, organic revenue increased 8% year-on-year with positive price and volume growth in all three GBUs. Our strategic footprint and strong customer relationships allowed us to drive broad-based organic growth given the significant supply dislocation in the region. Asia Pacific organic revenue was up 10% year-on-year, excluding solar, Driven by Strength in HHC and EA, again reflecting our strong sourcing capabilities in the region. Total organic revenue was flat year on year, including solar. Now let me provide an update on the petrochemical supply chain disruption and what we're seeing as we enter into the back half of the year. Events are playing out in line with our expectations and consistent with what we shared on our first quarter call. Our execution continues to be strong. The pricing actions we announced in the second quarter are ramping as expected, and we are seeing that traction build across our business. Our global sourcing organization continues to lead the industry in maintaining supply continuity for our customers, and the same differentiated capabilities that set us apart in 2021 and 2022 are setting us apart again today. This environment is showcasing our competitive strengths as some companies struggle with availability and reliability. Regardless of how or when the conflict in the Middle East resolves, we do not expect a rapid recovery of global supply chains. Even after activity normalizes in the Strait, we expect the aftershocks of this dislocation to persist and the risk of intermittent shortages remains real We also do not expect raw material costs to fully retrace to pre-disruption levels. The inflationary pressures introduced by this supply shock have reset the cost structure of our industry, and we are managing our business accordingly. At the same time, we are watching the demand environment carefully. We remain focused on what we can control, maintaining supply, executing on pricing, and continuing to serve our customers with the reliability that has always differentiated H.B. Fuller. Now let me turn the call over to John Corkrean to review our second quarter results in more detail and our updated outlook for 2026.