H.B. Fuller to Discontinue Production of Polysulfide-Based IG Sealant Product Line in Europe

H.B. Fuller to Discontinue Production of Polysulfide-Based IG Sealant Product Line in Europe
April 27, 2010

H.B. Fuller Co. announced on April 26 that it will exit the polysulfide-based insulating glass sealant product line in Europe by the end of calendar year 2010. The company, which provides sealant solutions for the residential insulating glass market in the United States and has a presence in Asia, says the move will allow the company to "focus on more innovative technologies."

In 2006 the company expanded into the European residential insulating glass market by acquiring a polysulfide-based product line. In fiscal year 2009, the company says this product line generated net revenue of approximately $25 million.

The company says it will now focus on "more innovative technologies for this market" and adds that polysulfide-based products are difficult to differentiate and have essentially become commodity products, leading to this decision.

According to a company press release, the change in Europe does not affect the company's business in the United States or any other region of the world.

HB Fuller says it will incur exit costs of approximately $2.2 million ($1.8 million after tax, or $0.04 per diluted share) and non-cash impairment charges of about $9.2 million ($6.3 million after-tax, or $0.13 per diluted share). These figures are estimates and will be finalized in the next quarterly filing. The exit costs primarily consist of severance and other related charges.

"This decision is consistent with our long-term strategic plan and represents another step in our transformation toward a profitable growth company that thrives around innovation, value-added solutions and superior human capital," says Michele Volpi, H.B. Fuller president and chief executive officer. "Exiting this business will meaningfully enhance both our growth and profitability profile in EIMEA and allow us to more effectively focus on our core market segments."

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