ST. PAUL, Minn.—H.B. Fuller Co. reported a decline in net income in its second quarter financial statement.
Net income fell to $25.9 million for the second quarter of 2017, a decline of 22.4 percent compared to 2016. Higher raw material costs were the primary driver of the year-over-year decline, according to the company's statement.
Net sales for the quarter reached $561.7 million, an increase of 5.5 percent. Higher volume and acquisitions positively impacted net sales growth, which was offset by negative foreign currency translation.
Gross profit margin was 26 percent. During the quarter, margins declined year over year due to increasing raw material costs relative to the timing of price increases, according to the statement.
Through the first half, net income was $40.7 million, a decrease of 22 percent compared to the same period last year. Net sales came in at $1.07 billion, up 5.8 percent from 2016. Higher volume and acquisitions positively impacted net revenue growth offset by negative foreign currency translation and negative mix, according to the statement.
"A spike in raw material costs and the timing of our price increases impacted earnings in the second quarter," Jim Owens, president and CEO of H.B. Fuller, said in a statement. "However, price increases have been implemented and the underlying performance of our business is in line with expectations for 2017."
Growth across the business was led by about 20 percent volume growth in the Engineering Adhesives business and strong constant currency growth in Americas, Europe, India, Middle East, Africa and Asia-Pacific. Price increases announced early in the quarter were successfully implemented late in the second quarter to deliver targeted earnings and cash flow performance, he said.
For the second quarter of 2017, Americas Adhesives net sales increased to $229.6 million, up from $206.1 million the previous year, an increase of 11.4 percent. Operating income feel in the same period to $26.5 million, a 26.2 percent decrease from last year's $35.9 million.
For the EIMEA region, net sales decreased to $135.2 million, down from $139.9 million, a 3.36 percent change. Operating income also decreased to $8.08 million from $11 million, a change of 26.5 percent.
In the Asia-Pacific region, net sales rose to $64.5 million in 2017, a 7.32 percent increase from $60.1 million last year. Operating income also increased to $4.75 million from $3.04 million, an increase of 56.3 percent.