UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report: March 27, 2018
(Date of earliest event reported)
H.B. FULLER COMPANY
(Exact name of registrant as specified in its charter)
Commission File Number: 001-09225
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Minnesota |
41-0268370 |
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(State or other jurisdiction of incorporation) |
(IRS Employer Identification No.) |
1200 Willow Lake Boulevard
P.O. Box 64683
St. Paul, MN 55164-0683
(Address of principal executive offices, including zip code)
(651) 236-5900
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
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Item 8.01. |
Other Events. |
As previously reported, on October 20, 2017, H.B. Fuller Company (“H.B. Fuller” or the “Company”) completed the acquisition (the “Royal Adhesives Acquisition”) of Royal Adhesives & Sealants LLC (“Royal Adhesives”). During the first quarter ended March 3, 2018, H.B. Fuller implemented certain changes to its organizational structure related to the integration of the operations of Royal Adhesives with the Company’s other businesses. This integration resulted in the elimination of one of the Company’s operating segments for financial reporting purposes. In the Company’s Annual Report on Form 10-K for the fiscal year ended December 2, 2017, the Company's business was reported in the following six operating segments: Americas Adhesives; Europe, India, Middle East and Africa (EIMEA); Asia Pacific; Construction Products; Engineering Adhesives; and Royal Adhesives. As of the beginning of the quarter ended March 3, 2018, the Company modified its operating segment structure by including portions of the business of Royal Adhesives into each of H.B. Fuller’s previous operating segments. As a result, H.B. Fuller currently has the following five operating segments: Americas Adhesives; EIMEA; Asia Pacific; Construction Products; and Engineering Adhesives.
The Company is filing this Current Report on Form 8-K to provide pro forma historical segment information in accordance with the Company’s new operating segment structure. Exhibit 99.1 hereto provides financial information for the first quarter ended March 4, 2017, the second quarter ended June 3, 2017, the third quarter ended September 2, 2017 and the fourth quarter ended December 2, 2017 for the Company by segment on a pro forma consolidated basis as if Royal Adhesives had been acquired at the beginning of the year ended December 2, 2017. The changes in the segment structure reflect the manner in which the Royal Adhesives businesses have been integrated into the Company’s historical operating segments. The Company’s new segment structure has no impact on the Company’s consolidated statements of income, consolidated statements of comprehensive income (loss), consolidated balance sheets, consolidated statements of total equity and consolidated statements of cash flows previously reported on the basis of generally accepted accounting principles (“GAAP”).
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Item 9.01. |
Financial Statements and Exhibits. |
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(d) |
Exhibits. |
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99.1 |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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H.B. FULLER COMPANY |
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By: |
/s/ John J. Corkrean |
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John J. Corkrean |
Date: March 27, 2018
EXHIBIT INDEX
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Exhibit No. |
Description |
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99.1 |
H.B. Fuller Pro Forma Segment Results (including the operations of Royal Adhesives as if the Royal Adhesives Acquisition had been completed at the beginning of the Company’s fiscal year ended December 2, 2017) |
4
Exhibit 99.1
H.B. Fuller Pro Forma Consolidated Results (including the operations of Royal Adhesives as if the Royal Adhesives
Acquisition had been completed on December 4, 2016)
Fiscal year ended December 2, 2017(1)
In thousands (unaudited)
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Quarter Ended March 4, 2017 |
Quarter Ended June 3, 2017 |
Quarter Ended September 2, 2017 |
Quarter Ended December 2, 2017 |
Year Ended December 2, 2017 |
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Net revenue |
$ | 641,905 | $ | 733,742 | $ | 741,993 | $ | 770,864 | $ | 2,888,504 | ||||||||||
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Adjusted cost of sales |
(457,767 | ) | (528,220 | ) | (536,842 | ) | (565,927 | ) | (2,088,756 | ) | ||||||||||
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Adjusted gross profit |
$ | 184,138 | $ | 205,522 | $ | 205,151 | $ | 204,937 | $ | 799,748 | ||||||||||
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Adjusted segment operating income |
$ | 50,073 | $ | 74,513 | $ | 75,781 | $ | 73,689 | $ | 274,056 | ||||||||||
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Depreciation and amortization expense |
$ | 33,693 | $ | 34,308 | $ | 34,905 | $ | 35,724 | $ | 138,630 | ||||||||||
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Adjusted EBITDA |
$ | 83,766 | $ | 108,821 | $ | 110,686 | $ | 109,413 | $ | 412,686 | ||||||||||
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Adjusted EBITDA margin |
13.0 | % | 14.8 | % | 14.9 | % | 14.2 | % | 14.3 | % | ||||||||||
(1) The information presented in the table above regarding adjusted cost of sales, gross profit, operating income, depreciation and amortization expense and adjusted earnings before interest, taxes, depreciation, and amortization (“Adjusted EBITDA”), and Adjusted EBITDA margin does not conform to GAAP. This information should not be construed as an alternative to the reported results determined in accordance with GAAP. Management has included this non-GAAP information to assist in understanding the operating performance of the Company as well as the comparability of the Company’s financial results. The non-GAAP information provided may not be consistent with the methodologies used by other companies. Non-GAAP depreciation and amortization expense, Adjusted EBITDA and Adjusted EBITDA margin are reconciled with reported GAAP results in the tables beginning on page 3 of this Exhibit 99.1. As noted above, Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP financial measures. Adjusted EBITDA excludes costs associated with various activities of the Company including the following: organizational realignment costs to support the 2020 strategic plan as announced in December 2016; restructuring costs in EIMEA related to operational efficiency improvement projects; expenses regarding combining Construction Products facilities in Illinois; Project ONE development costs; integrating and accounting for acquisition expenses; and all transaction-related costs of the Royal Adhesives Acquisition. Adjusted EBITDA margin is defined as Adjusted EBITDA divided by net revenue. Adjusted cost of sales reflects reported GAAP results, excluding costs associated with various activities of the Company as previously disclosed in each of the Company's Current Reports on Form 8-K filed on March 30, 2017, June 29, 2017, September 28, 2017 and January 24, 2018, respectively. Adjusted gross profit is defined as net revenue less adjusted cost of sales. Segment operating income is defined as gross profit less selling, general and administrative expenses. Adjusted segment operating income reflects reported GAAP results, as shown on page 2 of this Exhibit 99.1, including the adjustments made to arrive at Adjusted EBITDA shown in the tables beginning on page 3 of this Exhibit 99.1.
H.B. Fuller Pro Forma Consolidated Segment Results (including the operations of Royal Adhesives as if the Royal
Adhesives Acquisition had been completed on December 4, 2016)
Fiscal year ended December 2, 2017(1)
In thousands (unaudited)
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Quarter Ended March 4, 2017 |
Quarter Ended June 3, 2017 |
Quarter Ended September 2, 2017 |
Quarter Ended December 2, 2017 |
Year Ended December 2, 2017 |
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Net Revenue |
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Americas Adhesives |
$ | 231,760 | $ | 275,205 | $ | 277,254 | $ | 277,148 | $ | 1,061,367 | ||||||||||
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EIMEA |
$ | 154,778 | $ | 171,284 | $ | 176,047 | $ | 193,231 | $ | 695,340 | ||||||||||
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Asia Pacific |
$ | 63,477 | $ | 65,553 | $ | 64,050 | $ | 75,566 | $ | 268,646 | ||||||||||
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Construction Products |
$ | 98,032 | $ | 122,541 | $ | 121,405 | $ | 111,223 | $ | 453,201 | ||||||||||
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Engineering Adhesives |
$ | 93,858 | $ | 99,159 | $ | 103,237 | $ | 113,696 | $ | 409,950 | ||||||||||
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Total H.B. Fuller |
$ | 641,905 | $ | 733,742 | $ | 741,993 | $ | 770,864 | $ | 2,888,504 | ||||||||||
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Operating Income |
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Americas Adhesives |
$ | 23,678 | $ | 31,483 | $ | 32,467 | $ | 26,825 | $ | 114,453 | ||||||||||
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EIMEA |
$ | 2,275 | $ | 9,384 | $ | 10,924 | $ | 11,536 | $ | 34,119 | ||||||||||
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Asia Pacific |
$ | 1,640 | $ | 4,465 | $ | 3,566 | $ | 5,598 | $ | 15,269 | ||||||||||
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Construction Products |
$ | 427 | $ | 8,294 | $ | 9,805 | $ | 3,650 | $ | 22,176 | ||||||||||
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Engineering Adhesives |
$ | 6,642 | $ | 11,027 | $ | 8,972 | $ | 12,202 | $ | 38,843 | ||||||||||
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Total H.B. Fuller |
$ | 34,662 | $ | 64,653 | $ | 65,734 | $ | 59,811 | $ | 224,860 | ||||||||||
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EBITDA |
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Americas Adhesives |
$ | 32,177 | $ | 40,479 | $ | 41,319 | $ | 36,256 | $ | 150,231 | ||||||||||
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EIMEA |
$ | 9,325 | $ | 16,485 | $ | 18,529 | $ | 19,409 | $ | 63,748 | ||||||||||
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Asia Pacific |
$ | 4,008 | $ | 6,442 | $ | 5,508 | $ | 7,594 | $ | 23,552 | ||||||||||
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Construction Products |
$ | 9,899 | $ | 18,236 | $ | 19,893 | $ | 13,752 | $ | 61,780 | ||||||||||
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Engineering Adhesives |
$ | 12,946 | $ | 17,319 | $ | 15,390 | $ | 18,524 | $ | 64,179 | ||||||||||
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Total H.B. Fuller |
$ | 68,355 | $ | 98,961 | $ | 100,639 | $ | 95,535 | $ | 363,490 | ||||||||||
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Adjusted EBITDA |
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Americas Adhesives |
$ | 35,678 | $ | 44,219 | $ | 45,036 | $ | 42,829 | $ | 167,762 | ||||||||||
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EIMEA |
$ | 16,308 | $ | 19,316 | $ | 20,824 | $ | 22,874 | $ | 79,322 | ||||||||||
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Asia Pacific |
$ | 5,554 | $ | 6,815 | $ | 5,909 | $ | 8,371 | $ | 26,649 | ||||||||||
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Construction Products |
$ | 11,967 | $ | 23,797 | $ | 21,404 | $ | 16,646 | $ | 73,814 | ||||||||||
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Engineering Adhesives |
$ | 14,259 | $ | 14,674 | $ | 17,513 | $ | 18,693 | $ | 65,139 | ||||||||||
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Total H.B. Fuller |
$ | 83,766 | $ | 108,821 | $ | 110,686 | $ | 109,413 | $ | 412,686 | ||||||||||
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Adjusted EBITDA Margin |
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Americas Adhesives |
15.4 | % | 16.1 | % | 16.2 | % | 15.5 | % | 15.8 | % | ||||||||||
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EIMEA |
10.5 | % | 11.3 | % | 11.8 | % | 11.8 | % | 11.4 | % | ||||||||||
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Asia Pacific |
8.7 | % | 10.4 | % | 9.2 | % | 11.1 | % | 9.9 | % | ||||||||||
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Construction Products |
12.2 | % | 19.4 | % | 17.6 | % | 15.0 | % | 16.3 | % | ||||||||||
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Engineering Adhesives |
15.2 | % | 14.8 | % | 17.0 | % | 16.4 | % | 15.9 | % | ||||||||||
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Total H.B. Fuller |
13.0 | % | 14.8 | % | 14.9 | % | 14.2 | % | 14.3 | % | ||||||||||
(1) See the disclosure relating to non-GAAP financial measures set forth in footnote 1 to the table contained on page 1 of this Exhibit 99.1.
H.B. FULLER COMPANY AND SUBSIDIARIES
REGULATION G RECONCILIATION
In thousands (unaudited)
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Quarter Ended March 4, 2017(1) |
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H.B. Fuller Reported |
Royal Reported |
Combined |
Pro Forma Adjustments(2) |
Pro Forma Combined |
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Net income including non-controlling interests |
$ | 14,831 | $ | 160 | $ | 14,991 | $ | (6,609 | ) | $ | 8,382 | |||||||||
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Income from equity method investments |
$ | (2,274 | ) | $ | - | $ | (2,274 | ) | $ | - | $ | (2,274 | ) | |||||||
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Income taxes |
$ | 5,765 | $ | 494 | $ | 6,259 | $ | (2,911 | ) | $ | 3,348 | |||||||||
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Interest expense |
$ | 8,380 | $ | 11,042 | $ | 19,422 | $ | 6,458 | $ | 25,880 | ||||||||||
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Other income (expense), net |
$ | (621 | ) | $ | (53 | ) | $ | (674 | ) | $ | - | $ | (674 | ) | ||||||
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Segment operating income |
$ | 26,081 | $ | 11,643 | $ | 37,724 | $ | (3,062 | ) | $ | 34,662 | |||||||||
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Depreciation and amortization expense |
$ | 19,300 | $ | 11,331 | $ | 30,631 | $ | 3,062 | $ | 33,693 | ||||||||||
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EBITDA |
$ | 45,381 | $ | 22,974 | $ | 68,355 | $ | - | $ | 68,355 | ||||||||||
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EBITDA adjustments |
$ | 13,566 | $ | 1,845 | $ | 15,411 | $ | - | $ | 15,411 | ||||||||||
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Adjusted EBITDA |
$ | 58,947 | $ | 24,819 | $ | 83,766 | $ | - | $ | 83,766 | ||||||||||
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EBITDA margin |
9.0 | % | 10.6 | % | ||||||||||||||||
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Adjusted EBITDA margin |
11.7 | % | 13.0 | % | ||||||||||||||||
(1) See the disclosure relating to non-GAAP financial measures set forth in footnote 1 to the table contained on page 1 of this Exhibit 99.1.
(2) Adjustments to interest expense and depreciation and amortization expense have been made to reflect the Company’s pro forma combined financial information as if Royal Adhesives had been acquired at the beginning of the year ended December 2, 2017.
H.B. FULLER COMPANY AND SUBSIDIARIES
REGULATION G RECONCILIATION
In thousands (unaudited)
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Quarter Ended June 3, 2017(1) |
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H.B. Fuller Reported |
Royal Reported |
Combined |
Pro Forma Adjustments(2) |
Pro Forma Combined |
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Net income including non-controlling interests |
$ | 25,864 | $ | 14,902 | $ | 40,766 | $ | (8,132 | ) | $ | 32,634 | |||||||||
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Income from equity method investments |
$ | (2,005 | ) | $ | - | $ | (2,005 | ) | $ | - | $ | (2,005 | ) | |||||||
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Income taxes |
$ | 11,151 | $ | 785 | $ | 11,936 | $ | (3,581 | ) | $ | 8,355 | |||||||||
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Interest expense |
$ | 8,148 | $ | 8,615 | $ | 16,763 | $ | 8,885 | $ | 25,648 | ||||||||||
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Other income (expense), net |
$ | 110 | $ | (89 | ) | $ | 21 | $ | - | $ | 21 | |||||||||
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Segment operating income |
$ | 43,268 | $ | 24,213 | $ | 67,481 | $ | (2,828 | ) | $ | 64,653 | |||||||||
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Depreciation and amortization expense |
$ | 19,900 | $ | 11,580 | $ | 31,480 | $ | 2,828 | $ | 34,308 | ||||||||||
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EBITDA |
$ | 63,168 | $ | 35,793 | $ | 98,961 | $ | - | $ | 98,961 | ||||||||||
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EBITDA adjustments |
$ | 6,970 | $ | 2,890 | $ | 9,860 | $ | - | $ | 9,860 | ||||||||||
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Adjusted EBITDA |
$ | 70,138 | $ | 38,683 | $ | 108,821 | $ | - | $ | 108,821 | ||||||||||
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EBITDA margin |
11.2 | % | 13.5 | % | ||||||||||||||||
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Adjusted EBITDA margin |
12.5 | % | 14.8 | % | ||||||||||||||||
(1) See the disclosure relating to non-GAAP financial measures set forth in footnote 1 to the table contained on page 1 of this Exhibit 99.1.
(2) Adjustments to interest expense and depreciation and amortization expense have been made to reflect the Company’s pro forma combined financial information as if Royal Adhesives had been acquired at the beginning of the year ended December 2, 2017.
H.B. FULLER COMPANY AND SUBSIDIARIES
REGULATION G RECONCILIATION
In thousands (unaudited)
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Quarter Ended September 2, 2017(1) |
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H.B. Fuller Reported |
Royal Reported |
Combined |
Pro Forma Adjustments(2) |
Pro Forma Combined |
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Net income including non-controlling interests |
$ | 25,139 | $ | 12,745 | $ | 37,884 | $ | (3,273 | ) | $ | 34,611 | |||||||||
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Income from equity method investments |
$ | (2,170 | ) | $ | - | $ | (2,170 | ) | $ | - | $ | (2,170 | ) | |||||||
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Income taxes |
$ | 9,262 | $ | 194 | $ | 9,456 | $ | (1,442 | ) | $ | 8,014 | |||||||||
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Interest expense |
$ | 8,100 | $ | 9,952 | $ | 18,052 | $ | 7,548 | $ | 25,600 | ||||||||||
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Other income (expense), net |
$ | (150 | ) | $ | (171 | ) | $ | (321 | ) | $ | - | $ | (321 | ) | ||||||
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Segment operating income |
$ | 40,181 | $ | 22,720 | $ | 62,901 | $ | 2,833 | $ | 65,734 | ||||||||||
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Depreciation and amortization expense |
$ | 20,304 | $ | 12,683 | $ | 32,987 | $ | 1,918 | $ | 34,905 | ||||||||||
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EBITDA |
$ | 60,485 | $ | 35,403 | $ | 95,888 | $ | 4,751 | $ | 100,639 | ||||||||||
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EBITDA adjustments |
$ | 11,743 | $ | 3,055 | $ | 14,798 | $ | (4,751 | ) | $ | 10,047 | |||||||||
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Adjusted EBITDA |
$ | 72,228 | $ | 38,458 | $ | 110,686 | $ | - | $ | 110,686 | ||||||||||
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EBITDA margin |
10.7 | % | 13.6 | % | ||||||||||||||||
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Adjusted EBITDA margin |
12.8 | % | 14.9 | % | ||||||||||||||||
(1) See the disclosure relating to non-GAAP financial measures set forth in footnote 1 to the table contained on page 1 of this Exhibit 99.1.
(2) Adjustments to interest expense and depreciation and amortization expense have been made to reflect the Company’s pro forma combined financial information as if Royal Adhesives had been acquired at the beginning of the year ended December 2, 2017. Acquisition-related expenses have also been excluded from the pro forma combined financial information.
H.B. FULLER COMPANY AND SUBSIDIARIES
REGULATION G RECONCILIATION
In thousands (unaudited)
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Quarter Ended December 2, 2017(1) |
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H.B. Fuller Reported(2) |
Royal Reported(2) |
Combined |
Pro Forma Adjustments(3) |
Pro Forma Combined |
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Net income including non-controlling interests |
$ | (7,544 | ) | $ | (10,242 | ) | $ | (17,786 | ) | $ | 45,729 | $ | 27,943 | |||||||
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Income from equity method investments |
$ | (2,228 | ) | $ | - | $ | (2,228 | ) | $ | - | $ | (2,228 | ) | |||||||
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Income taxes |
$ | (17,092 | ) | $ | 6,262 | $ | (10,830 | ) | $ | 20,655 | $ | 9,825 | ||||||||
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Interest expense |
$ | 19,073 | $ | 9,696 | $ | 28,769 | $ | (2,778 | ) | $ | 25,991 | |||||||||
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Other income (expense), net |
$ | 24,401 | $ | (586 | ) | $ | 23,815 | $ | (25,535 | ) | $ | (1,720 | ) | |||||||
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Segment operating income |
$ | 16,610 | $ | 5,130 | $ | 21,740 | $ | 38,071 | $ | 59,811 | ||||||||||
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Depreciation and amortization expense |
$ | 27,811 | $ | 7,935 | $ | 35,746 | $ | (22 | ) | $ | 35,724 | |||||||||
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EBITDA |
$ | 44,421 | $ | 13,065 | $ | 57,486 | $ | 38,049 | $ | 95,535 | ||||||||||
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EBITDA adjustments |
$ | 46,461 | $ | 5,466 | $ | 51,927 | $ | (38,049 | ) | $ | 13,878 | |||||||||
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Adjusted EBITDA |
$ | 90,882 | $ | 18,531 | $ | 109,413 | $ | - | $ | 109,413 | ||||||||||
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EBITDA margin |
6.5 | % | 12.4 | % | ||||||||||||||||
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Adjusted EBITDA margin |
13.4 | % | 14.2 | % | ||||||||||||||||
(1) See the disclosure relating to non-GAAP financial measures set forth in footnote 1 to the table contained on page 1 of this Exhibit 99.1.
(2) Six weeks of Royal Adhesives financial information are included in the H.B. Fuller Reported column, reflecting the period post-acquisition. Conversely, the six week period is excluded from the Royal Reported column.
(3) Adjustments to interest expense and depreciation and amortization expense have been made to reflect the Company’s pro forma combined financial information as if Royal Adhesives had been acquired at the beginning of the year ended December 2, 2017. Acquisition-related expenses, the make-whole cost on debt repayment and the expense related to the fair value adjustment to acquisition-date inventory have also been excluded from the pro forma combined financial information.
H.B. FULLER COMPANY AND SUBSIDIARIES
REGULATION G RECONCILIATION
In thousands (unaudited)
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Year Ended December 2, 2017(1) |
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H.B. Fuller Reported(2) |
Royal Reported(2) |
Combined |
Pro Forma Adjustments(3) |
Pro Forma Combined |
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Net income including non-controlling interests |
$ | 58,290 | $ | 17,565 | $ | 75,855 | $ | 27,715 | $ | 103,570 | ||||||||||
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Income from equity method investments |
$ | (8,677 | ) | $ | - | $ | (8,677 | ) | $ | - | $ | (8,677 | ) | |||||||
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Income taxes |
$ | 9,086 | $ | 7,735 | $ | 16,821 | $ | 12,721 | $ | 29,542 | ||||||||||
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Interest expense |
$ | 43,701 | $ | 39,305 | $ | 83,006 | $ | 20,113 | $ | 103,119 | ||||||||||
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Other income (expense), net |
$ | 23,740 | $ | (899 | ) | $ | 22,841 | $ | (25,535 | ) | $ | (2,694 | ) | |||||||
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Segment operating income |
$ | 126,140 | $ | 63,706 | $ | 189,846 | $ | 35,014 | $ | 224,860 | ||||||||||
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Depreciation and amortization expense |
$ | 87,315 | $ | 43,529 | $ | 130,844 | $ | 7,786 | $ | 138,630 | ||||||||||
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EBITDA |
$ | 213,455 | $ | 107,235 | $ | 320,690 | $ | 42,800 | $ | 363,490 | ||||||||||
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EBITDA adjustments |
$ | 78,740 | $ | 13,256 | $ | 91,996 | $ | (42,800 | ) | $ | 49,196 | |||||||||
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Adjusted EBITDA |
$ | 292,195 | $ | 120,491 | $ | 412,686 | $ | - | $ | 412,686 | ||||||||||
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EBITDA margin |
9.3 | % | 12.6 | % | ||||||||||||||||
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Adjusted EBITDA margin |
12.7 | % | 14.3 | % | ||||||||||||||||
(1) See the disclosure relating to non-GAAP financial measures set forth in footnote 1 to the table contained on page 1 of this Exhibit 99.1
(2) Six weeks of Royal Adhesives financial information are included in the H.B. Fuller Reported column, reflecting the period post-acquisition. Conversely, the six week period is excluded from the Royal Reported column.
(3) Adjustments to interest expense and depreciation and amortization expense have been made to reflect the Company’s pro forma combined financial information as if Royal Adhesives had been acquired at the beginning of the year ended December 2, 2017. Acquisition-related expenses, the make-whole cost on debt repayment and the expense related to the fair value adjustment to acquisition-date inventory have also been excluded from the pro forma combined financial information.
7