10-Q

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 4, 2017

OR

[  ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 001-09225

H.B. FULLER COMPANY

(Exact name of registrant as specified in its charter)

Minnesota	41-0268370
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)
1200 Willow Lake Boulevard, St. Paul, Minnesota	55110-5101
(Address of principal executive offices)	(Zip Code)

(651) 236-5900

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [  ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [X] No [  ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer [X]	Accelerated filer [  ]
Non-accelerated filer [  ] (Do not check if a smaller reporting company)	Smaller reporting company [  ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).

Yes [  ] No [X]

The number of shares outstanding of the Registrant’s Common Stock, par value $1.00 per share, was 50,527,216 as of March 24, 2017.

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H.B. Fuller Company

Quarterly Report on Form 10-Q

Table of Contents

		Page
PART 1. FINANCIAL INFORMATION
ITEM 1.	FINANCIAL STATEMENTS (Unaudited)	3
	Condensed Consolidated Statements of Income for the three months ended March 4, 2017 and February 27, 2016	3
	Condensed Consolidated Statements of Comprehensive Income (Loss) for the three months ended March 4, 2017 and February 27, 2016	4
	Condensed Consolidated Balance Sheets as of March 4, 2017 and December 3, 2016	5
	Condensed Consolidated Statements of Total Equity as of March 4, 2017 and December 3, 2016	6
	Condensed Consolidated Statements of Cash Flows for the three months ended March 4, 2017 and February 27, 2016	7
	Notes to Condensed Consolidated Financial Statements	8
ITEM 2.	MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	27
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	37
ITEM 4.	CONTROLS AND PROCEDURES	38
PART II. OTHER INFORMATION		39
ITEM 1.	LEGAL PROCEEDINGS	39
ITEM 1A.	RISK FACTORS	40
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	41
ITEM 6.	EXHIBITS	42
SIGNATURES		43

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

H.B. FULLER COMPANY AND SUBSIDIARIES

Condensed Consolidated Statements of Income

(In thousands, except per share amounts)

(Unaudited)

	Three Months Ended
	March 4,			February 27,
	2017			2016
Net revenue	$	503,323		$	474,326
Cost of sales		(364,327	)		(336,721	)
Gross profit		138,996			137,605
Selling, general and administrative expenses		(112,915	)		(99,767	)
Special charges, net		-			(413	)
Other income (expense), net		621			(5,082	)
Interest expense		(8,380	)		(6,308	)
Income from continuing operations before income taxes and income from equity method investments		18,322			26,035
Income taxes		(5,765	)		(8,760	)
Income from equity method investments		2,274			1,692
Net income including non-controlling interests		14,831			18,967
Net income attributable to non-controlling interests		(36	)		(49	)
Net income attributable to H.B. Fuller	$	14,795		$	18,918
Earnings per share attributable to H.B. Fuller common stockholders:
Basic		0.29			0.38
Diluted		0.29			0.37
Weighted-average common shares outstanding:
Basic		50,243			49,958
Diluted		51,460			50,995
Dividends declared per common share	$	0.14		$	0.13

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

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H.B. FULLER COMPANY AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Income (Loss)

(In thousands)

(Unaudited)

	Three Months Ended
	March 4,			February 27,
	2017			2016
Net income including non-controlling interests	$	14,831		$	18,967
Other comprehensive (loss) income
Foreign currency translation		(10,519	)		(950	)
Defined benefit pension plans adjustment, net of tax		1,590			2,665
Interest rate swaps, net of tax		10			10
Cash-flow hedges, net of tax		129			249
Other comprehensive (loss) income		(8,790	)		1,974
Comprehensive income		6,041			20,941
Less: Comprehensive income attributable to non-controlling interests		31			44
Comprehensive income attributable to H.B. Fuller	$	6,010		$	20,897

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

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H.B. FULLER COMPANY AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(In thousands, except share and per share amounts)

	(Unaudited)
	March 4,			December 3,
	2017			2016
Assets
Current assets:
Cash and cash equivalents	$	116,518		$	142,245
Trade receivables (net of allowances of $12,427 and $12,310, as of March 4,2017 and December 3, 2016, respectively)		358,145			351,130
Inventories		286,254			247,399
Other current assets		71,055			70,479
Total current assets		831,972			811,253
Property, plant and equipment		1,086,268			1,093,141
Accumulated depreciation		(576,333	)		(577,866	)
Property, plant and equipment, net		509,935			515,275
Goodwill		423,581			366,248
Other intangibles, net		243,598			205,359
Other assets		160,242			157,733
Total assets	$	2,169,328		$	2,055,868
Liabilities, redeemable non-controlling interest and total equity
Current liabilities:
Notes payable	$	47,120		$	37,334
Current maturities of long-term debt		-			80,178
Trade payables		181,460			162,964
Accrued compensation		45,105			52,444
Income taxes payable		7,812			7,985
Other accrued expenses		43,569			50,939
Total current liabilities		325,066			391,844
Long-term debt, excluding current maturities		757,661			585,759
Accrued pension liabilities		70,370			73,545
Other liabilities		66,466			62,174
Total liabilities		1,219,563			1,113,322
Commitments and contingencies (Note 16)
Redeemable non-controlling interest		-			4,277
Equity:
H.B. Fuller stockholders' equity:
Preferred stock (no shares outstanding) shares authorized – 10,045,900		-			-
Common stock, par value $1.00 per share, shares authorized – 160,000,000, shares outstanding – 50,490,659 and 50,141,343, as of March 4, 2017 and December 3, 2016, respectively		50,491			50,141
Additional paid-in capital		71,758			59,564
Retained earnings		1,098,645			1,090,900
Accumulated other comprehensive loss		(271,514	)		(262,729	)
Total H.B. Fuller stockholders' equity		949,380			937,876
Non-controlling interests		385			393
Total equity		949,765			938,269
Total liabilities, redeemable non-controlling interest and total equity	$	2,169,328		$	2,055,868

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

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H.B. FULLER COMPANY AND SUBSIDIARIES

Condensed Consolidated Statements of Total Equity

(In thousands)

(Unaudited)

	H.B. Fuller Company Shareholders
	Common Stock			Additional Paid-in Capital			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Non- Controlling Interests			Total
Balance at November 28, 2015	$	50,074		$	55,522		$	994,608		$	(227,284	)	$	406		$	873,326
Comprehensive income (loss)		-			-			124,128			(35,445	)		226			88,909
Dividends		-			-			(27,836	)		-			-			(27,836	)
Stock option exercises		519			10,750			-			-			-			11,269
Share-based compensation plans other, net		116			14,485			-			-			-			14,601
Tax benefit on share-based compensation plans		-			1,467			-			-			-			1,467
Repurchases of common stock		(568	)		(22,660	)		-			-			-			(23,228	)
Redeemable non-controlling interest		-			-			-			-			(239	)		(239	)
Balance at December 3, 2016		50,141			59,564			1,090,900			(262,729	)		393			938,269
Comprehensive income (loss)		-			-			14,795			(8,785	)		31			6,041
Dividends		-			-			(7,050	)		-			-			(7,050	)
Stock option exercises		261			8,288			-			-			-			8,549
Share-based compensation plans other, net		140			5,138			-			-			-			5,278
Tax benefit on share-based compensation plans		-			1,053			-			-			-			1,053
Repurchases of common stock		(51	)		(2,379	)		-			-			-			(2,430	)
Purchase of redeemable non-controlling interest		-			94			-			-			-			94
Redeemable non-controlling interest		-			-			-			-			(39	)		(39	)
Balance at March 4, 2017	$	50,491		$	71,758		$	1,098,645		$	(271,514	)	$	385		$	949,765

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

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H.B. FULLER COMPANY AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

	Three Months Ended
	March 4, 2017			February 27, 2016
Cash flows from operating activities:
Net income including non-controlling interests	$	14,831		$	18,967
Adjustments to reconcile net income including non-controlling interests to net cash provided by operating activities:
Depreciation		11,945			13,258
Amortization		7,355			6,698
Deferred income taxes		(246	)		63
Income from equity method investments, net of dividends received		(2,274	)		(1,692	)
(Gain)/loss on sale of assets		(95	)		-
Share-based compensation		5,032			4,267
Excess tax benefit from share-based compensation		(1,053	)		341
Non-cash loss on mark to market adjustment related to contingent consideration liability		37			-
Non-cash charge for the sale of inventories revalued at the date of acquisition		193			-
Changes in assets and liabilities, net of effects of acquisitions
Trade receivables, net		4,884			28,947
Inventories		(32,597	)		(15,861	)
Other assets		3,960			9,298
Trade payables		23,989			(4,301	)
Accrued compensation		(7,540	)		(13,235	)
Other accrued expenses		(8,089	)		(5,258	)
Income taxes payable		(1,109	)		5,673
Accrued / prepaid pensions		(1,361	)		662
Other liabilities		1,754			(1,445	)
Other		(3,157	)		(3,821	)
Net cash provided by operating activities		16,459			42,561
Purchased property, plant and equipment		(19,899	)		(23,361	)
Purchased businesses, net of cash acquired		(123,305	)		-
Purchased investments		(1,250	)		-
Proceeds from sale of property, plant and equipment		109			863
Net cash used in investing activities		(144,345	)		(22,498	)
Proceeds from issuance of long-term debt		453,000			-
Repayment of long-term debt and payment of debt issuance costs		(356,610	)		(5,625	)
Net proceeds from notes payable		8,438			6,378
Dividends paid		(7,048	)		(6,498	)
Purchase of redeemable non-controlling interest		(3,127	)		-
Proceeds from stock options exercised		8,549			32
Excess tax benefit from share-based compensation		1,053			(341	)
Repurchases of common stock		(2,430	)		(6,518	)
Net cash provided by (used in) financing activities		101,825			(12,572	)
Effect of exchange rate changes on cash and cash equivalents		334			112
Net change in cash and cash equivalents		(25,727	)		7,603
Cash and cash equivalents at beginning of period		142,245			119,168
Cash and cash equivalents at end of period	$	116,518		$	126,771
Supplemental disclosure of cash flow information:
Dividends paid with company stock	$	2		$	64
Cash paid for interest, net of amount capitalized of $23 and $117 for the periods ended March 4, 2017 and February 27, 2016, respectively	$	6,979		$	5,566
Cash paid for income taxes, net of refunds	$	6,539		$	4,066

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

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H.B. FULLER COMPANY AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Amounts in thousands, except share and per share amounts)

(Unaudited)

Note 1: Basis of Presentation

The accompanying unaudited interim Condensed Consolidated Financial Statements of H.B. Fuller Company and Subsidiaries have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information necessary for a fair presentation of results of operations, comprehensive income, financial position, and cash flows in conformity with U.S. generally accepted accounting principles. In our opinion, the unaudited interim Condensed Consolidated Financial Statements reflect all adjustments of a normal recurring nature considered necessary for the fair presentation of the results for the periods presented. Operating results for interim periods are not necessarily indicative of results that may be expected for the fiscal year as a whole.

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, and related disclosures at the date of the financial statements and during the reporting period. Actual results could differ from these estimates. These unaudited interim Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and Notes thereto included in our Annual Report on Form 10-K for the year ended December 3, 2016 as filed with the Securities and Exchange Commission.

On December 4, 2016, for our subsidiaries in Latin America, we changed the functional currency from the U.S. dollar to the entity’s local currency based on management’s analysis of the changes of the economic facts and circumstances in which these subsidiaries operate. The change in functional currency is accounted for prospectively from December 4, 2016 and financial statements prior to and including the quarter ended February 27, 2016 and the year ended December 3, 2016 have not been restated for the change in functional currency. Monetary assets and liabilities have been remeasured to the U.S. dollar at current exchange rates. Non-monetary assets (property, plant and equipment, net; goodwill; and intangible assets, net) have been remeasured to reflect the difference between the exchange rate when the asset arose and the exchange rate on the date of the change in functional currency. As a result of this change in functional currency, we recorded an $11,317 cumulative translation adjustment included in other comprehensive loss for the quarter ended March 4, 2017.

New Accounting Pronouncements

In March 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2017-07, Compensation—Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, which requires employers to include only the service cost component of net periodic pension cost and net periodic postretirement benefit cost in operating expenses. The other components of net benefit cost, including amortization of prior service cost/credit, and settlement and curtailment effects, are to be included in nonoperating expenses. The ASU also stipulates that only the service cost component of net benefit cost is eligible for capitalization.  Our effective date for adoption of this guidance is our fiscal year beginning December 2, 2018 with early adoption permitted.  We are currently evaluating the effect that this guidance will have on our Consolidated Financial Statements.

In February 2017, the FASB issued ASU No. 2017-05, Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets. The ASU was issued to clarify the scope of the previous standard and to add guidance for partial sales of nonfinancial assets. Our effective date for adoption of this guidance is our fiscal year beginning December 2, 2018. We have evaluated the effect that this guidance will have on our Consolidated Financial Statements and related disclosures and determined it will not have a material impact.

In January 2017, the FASB issued ASU No. 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment, which removes Step 2 of the goodwill impairment test.  A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill.  Our effective date for prospective adoption of this guidance is our fiscal year beginning November 29, 2020 with early adoption permitted. We will apply this guidance to applicable impairment tests after the adoption date.

In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business.  This ASU clarifies the definition of a business when evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses.  Our effective date for prospective adoption of this guidance is our fiscal year beginning December 2, 2018. We will apply this guidance to applicable transactions after the adoption date.

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In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (a consensus of the FASB Emerging Issues Task Force). This ASU requires that the reconciliation of the beginning-of-period and end-of-period amounts shown in the statement of cash flows include cash and restricted cash equivalents. Our effective date for adoption of this guidance is our fiscal year beginning December 2, 2018. We have evaluated the effect that this guidance will have on our Consolidated Financial Statements and related disclosures and determined it will not have a material impact.

In October 2016, the FASB issued ASU No. 2016-17, Consolidation (Topic 810): Interests Held through Related Parties That Are under Common Control. This ASU changes how a decision maker treats indirect interests in a managed variable interest entity held through an entity under common control in its primary beneficiary (consolidation) analysis. Our effective date for adoption of this guidance is our fiscal year beginning December 3, 2017. We have evaluated the effect that this guidance will have on our Consolidated Financial Statements and related disclosures and determined it will not have a material impact.

In October 2016, the FASB issued ASU No. 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory. This ASU changes the timing of income tax recognition for an intercompany sale of assets. The ASU requires the seller’s tax effects and the buyer’s deferred taxes to be recognized immediately upon the sale instead of deferring accounting for the income tax implications until the assets are sold to a third party or recovered through use. Our effective date for adoption of this guidance is our fiscal year beginning December 2, 2018. We are currently evaluating the effect that this guidance will have on our Consolidated Financial Statements.

In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (a consensus of the Emerging Issues Task Force). This ASU requires changes in the presentation of certain items including but not limited to debt prepayment or debt extinguishment costs; contingent consideration payments made after a business combination; proceeds from the settlement of insurance claims; proceeds from the settlement of corporate-owned life insurance policies and distributions received from equity method investees. Our effective date for adoption of this guidance is our fiscal year beginning December 2, 2018. We are currently evaluating the effect that this guidance will have on our Consolidated Financial Statements.

In June 2016, the FASB ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses on Financial Statements. This ASU requires a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial asset(s) to present the net carrying value at the amount expected to be collected on the financial asset. Our effective date for adoption of this guidance is our fiscal year beginning November 29, 2020. We are currently evaluating the effect that this guidance will have on our Consolidated Financial Statements.

In March 2016, the FASB issued ASU No. 2016-09, Compensation - Stock Compensation (Topic 718), Improvements to Employee Share-Based Payment Accounting. This ASU provides simplification in the accounting for share-based payment transactions including the accounting for income taxes, forfeitures, statutory tax withholding requirements and classification in the statement of cash flows. Our effective date for adoption of this guidance is our fiscal year beginning December 3, 2017. We are currently evaluating the effect that this guidance will have on our Consolidated Financial Statements.

In March 2016, the FASB issued ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606), Principal versus Agent Considerations (Reporting Revenue Gross versus Net).  This ASU provides guidance on recording revenue on a gross basis versus a net basis based on the determination of whether an entity is a principal or an agent when another party is involved in providing goods or services to a customer.  The amendments in this ASU affect the guidance in ASU No. 2014-09 and are effective in the same timeframe as ASU No. 2014-09 as discussed below.

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In February 2016, the FASB issued ASU No. 2016-02, Leases (Subtopic 842). This guidance changes accounting for leases and requires lessees to recognize the assets and liabilities arising from all leases, including those classified as operating leases under previous accounting guidance, on the balance sheet and requires disclosure of key information about leasing arrangements to increase transparency and comparability among organizations. Our effective date for adoption of this guidance is our fiscal year beginning December 1, 2019 with early adoption permitted. The new guidance must be adopted using a modified retrospective transition approach, and provides for certain practical expedients. We are currently evaluating the impact that the new guidance will have on our Consolidated Financial Statements.

In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, which requires that equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) are to be measured at fair value with changes in fair value recognized in net income. However, an entity may choose to measure equity investments that do not have readily determinable fair values at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. Furthermore, equity investments without readily determinable fair values are to be assessed for impairment using a quantitative approach. Our effective date for adoption of this guidance is our fiscal year beginning December 2, 2018. We have evaluated the effect that this guidance will have on our Consolidated Financial Statements and related disclosures and determined it will not have a material impact.

In July 2015, the FASB issued ASU No. 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory, which requires a company to measure inventory within the scope of this guidance (inventory measured using first-in, first-out (FIFO) or average cost) at the lower of cost and net realizable value methods. Subsequent measurement is unchanged for inventory measured using the last-in, first-out (LIFO) or retail inventory method. Our effective date for adoption of this guidance is our fiscal year beginning December 3, 2017. We have evaluated the effect that this guidance will have on our Consolidated Financial Statements and related disclosures and determined it will not have a material impact.

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. This guidance will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The new standard is effective for fiscal years and interim periods beginning after December 15, 2017 (as stated in ASU No. 2015-14 which defers the effective date and was issued in August 2015) and is now effective for our fiscal year beginning December 2, 2018. Early application as of the original effective date is permitted under ASU 2015-14. The standard permits the use of either the retrospective or cumulative effect transition method. We are currently evaluating the impact of the new guidance on the Consolidated Financial Statements. We have identified an implementation project team and related oversight processes and have commenced the assessment phase of the project. We have not concluded as to whether the new guidance will be adopted on a full or modified retrospective basis, but will not apply the early adoption provisions of the new guidance.

Note 2: Acquisitions

Wisdom Adhesives

On January 27, 2017, we acquired substantially all of the assets of H.E. Wisdom & Sons, Inc. and its affiliate Wisdom Adhesives Southeast, L.L.C., (“Wisdom Adhesives”) headquartered in Elgin, Illinois. Wisdom Adhesives is a provider of adhesives for the packaging, paper converting and assembly markets. The acquisition will help strengthen our position in the North America adhesives market. The purchase price of $123,305 was financed through borrowings on our revolving credit facility and was recorded in our Americas Adhesives operating segment. We incurred acquisition related costs of approximately $547, which were recorded as selling, general and administrative (“SG&A”) expenses in the Condensed Consolidated Statements of Income for the three months ended March 4, 2017.

The acquisition fair value measurement was preliminary as of March 4, 2017, subject to the completion of the valuation of Wisdom Adhesives and further management reviews and assessment of the preliminary fair values of the assets acquired and liabilities assumed. We expect the fair value measurement process to be completed when the final appraisals are available, but no later than twelve months from the acquisition date.

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The following table summarizes the preliminary fair value measurement of the assets acquired and liabilities assumed as of the date of acquisition:

	Amount
Current assets	$	13,729
Property, plant and equipment		10,516
Goodwill		60,313
Other intangibles
Customer relationships		33,300
Trademarks/trade names		13,600
Current liabilities		(8,153	)
Total purchase price	$	123,305

The preliminary expected lives of the acquired intangible assets are 15 years for customer relationships and 10 years for trademarks/trade names.

Based on the preliminary fair value measurement of the assets acquired and liabilities assumed, we allocated $60,313 to goodwill for the expected synergies from combining Wisdom Adhesives with our existing business. Such goodwill is deductible for tax purposes. The goodwill was assigned to our Americas Adhesives operating segment. The Wisdom Adhesives acquisition does not represent a material business combination, therefore pro forma financial information is not provided.

Cyberbond

On June 8, 2016, we acquired Cyberbond, L.L.C., (“Cyberbond”) headquartered in Batavia, Illinois with operations in the United States and Europe. Cyberbond is a provider of industrial adhesives for the electronics, medical, audio equipment, automotive and structural markets. The acquisition will help us to broaden our global position and accelerate our growth in the high margin, high growth Engineering Adhesives segment. The purchase price of $42,182, net of cash acquired of $332, was funded through existing cash and was recorded in our Engineering Adhesives operating segment. We incurred acquisition related costs of approximately $527, which were recorded as SG&A expenses in the Condensed Consolidated Statements of Income for the year ended December 3, 2016.

The following table summarizes the final fair value measurement of the assets acquired and liabilities assumed as of the date of acquisition:

	Amount
Current assets	$	4,425
Property, plant and equipment		2,038
Goodwill		23,654
Other intangibles
Developed technology		2,000
Customer relationships		14,400
Trademarks/trade names		700
Other assets		161
Current liabilities		(1,889	)
Long-term liabilities		(3,307	)
Total purchase price	$	42,182

The expected lives of the acquired intangible assets are seven years for developed technology, 15 years for customer relationships and 10 years for trademarks/trade names.

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Based on the fair value measurement of the assets acquired and liabilities assumed, we allocated $23,654 to goodwill for the expected synergies from combining Cyberbond with our existing business. Such goodwill is not deductible for tax purposes. The goodwill was assigned to our Engineering Adhesives operating segment. The Cyberbond acquisition does not represent a material business combination, therefore pro forma financial information is not provided.

Advanced Adhesives

On April 29, 2016, we acquired Advanced Adhesives Pty Limited and the business assets of Advanced Adhesives (New Zealand) Limited (together referred to as “Advanced Adhesives”), providers of industrial adhesives in Australia and New Zealand. The acquisition will help us to strengthen our industrial adhesives market position and leverage a broader technology portfolio in both Australia and New Zealand. The combined purchase price of $10,365 was funded through existing cash and was recorded in our Asia Pacific operating segment. We incurred acquisition related costs of approximately $646, which were recorded as SG&A expenses in the Condensed Consolidated Statements of Income for the year ended December 3, 2016.

The following table summarizes the final fair value measurement of the assets acquired and liabilities assumed as of the date of acquisition:

	Amount
Current assets	$	5,704
Property, plant and equipment		594
Goodwill		102
Other intangibles
Customer relationships		7,575
Trademarks/trade names		146
Current liabilities		(2,671	)
Long-term liabilities		(1,085	)
Total purchase price	$	10,365

The expected lives of the acquired intangible assets are 15 years for customer relationships and one year for trademarks/trade names.

Based on the fair value measurement of the assets acquired and liabilities assumed, we allocated $102 to goodwill for the expected synergies from combining Advanced Adhesives with our existing business. Such goodwill is not deductible for tax purposes. The goodwill was assigned to our Asia Pacific operating segment. The Advanced Adhesives acquisition does not represent a material business combination, therefore pro forma financial information is not provided.

Note 3: Restructuring Actions

Business Integration Project

The integration of the industrial adhesives business we acquired in March 2012 involved a significant amount of restructuring and capital investment to optimize the new combined entity. In addition, we took a series of actions in our existing EIMEA operating segment to improve the profitability and future growth prospects of this operating segment. We combined these two initiatives into a single project which we refer to as the “Business Integration Project.” During the first quarter ended February 27, 2016, we incurred costs of $413 related to transformation costs, workforce reduction costs, facility exit costs and other related costs for the Business Integration Project, which are included in special charges, net. The Business Integration Project was substantially complete at the end of 2016.

2017 Restructuring Plan

During the first quarter of 2017, we approved a restructuring plan (the “2017 Restructuring Plan”) related to organizational changes and other actions to optimize operations. The 2017 Restructuring Plan was implemented in the first quarter of 2017 and is currently expected to be completed by mid-year of fiscal 2018. The 2017 Restructuring Plan resulted in a pre-tax charge of $10,168 during the quarter ended March 4, 2017.

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The following table summarizes the pre-tax distribution of restructuring charges by income statement classification:

	Three Months Ended
	March 4, 2017
Cost of sales	$	3,647
Selling, general and administrative		6,521
	$	10,168

The following table summarizes the pre-tax impact of restructuring charges by segment:

	Three Months Ended
	March 4, 2017
Americas Adhesives	$	1,978
EIMEA		4,628
Asia Pacific		1,679
Construction Products		1,262
Engineering Adhesives		621
	$	10,168

A summary of the restructuring liability during the first quarter ended March 4, 2017 is presented below:

	Employee-Related			Asset-Related			Other			Total
Balance at December 3, 2016	$	-			-			-			-
Expenses incurred		8,759			861			548			10,168
Non-cash charges		-			(417	)		-			(417	)
Cash payments		(4,479	)		(444	)		(210	)		(5,133	)
Foreign currency translation		(49	)		-			-			(49	)
Balance at March 4, 2017	$	4,231		$	-		$	338		$	4,569

Non-cash charges include accelerated depreciation resulting from the cessation of use of certain long-lived assets. Restructuring liabilities have been classified as a component of other accrued expenses on the Condensed Consolidated Balance Sheets.

Note 4: Inventories 

The composition of inventories is as follows:

	March 4,			December 3,
	2017			2016
Raw materials	$	133,615		$	116,200
Finished goods		164,471			142,397
LIFO reserve		(11,832	)		(11,198	)
Total inventories	$	286,254		$	247,399

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Note 5: Goodwill and Other Intangible Assets

The goodwill activity for the quarter ended March 4, 2017 is presented below:

	Americas							Asia			Construction		Engineering
	Adhesives				EIMEA			Pacific			Products		Adhesives			Total
Balance at December 3, 2016	$	59,821			$	98,876		$	17,481		$	21,901	$	168,169		$	366,248
Acquisitions		60,313		1		-			-			-		-			60,313
Currency impact		(1,676	)			(533	)		(8	)		1		(764	)		(2,980	)
Balance at March 4, 2017	$	118,458			$	98,343		$	17,473		$	21,902	$	167,405		$	423,581

¹ Preliminary goodwill balance as of March 4, 2017.

Balances of amortizable identifiable intangible assets, excluding goodwill and other non-amortizable intangible assets, are as follows:

	March 4, 2017
Amortizable Intangible Assets	Purchased Technology & Patents			Customer Relationships			All Other			Total
Original cost	$	69,527		$	286,161		$	64,164		$	419,852
Accumulated amortization		(26,919	)		(118,071	)		(31,728	)		(176,718	)
Net identifiable intangibles	$	42,608		$	168,090		$	32,436		$	243,134

	December 3, 2016
Amortizable Intangible Assets	Purchased Technology & Patents			Customer Relationships			All Other			Total
Original cost	$	70,504		$	251,329		$	51,116		$	372,949
Accumulated amortization		(21,448	)		(116,411	)		(30,198	)		(168,057	)
Net identifiable intangibles	$	49,056		$	134,918		$	20,918		$	204,892

Amortization expense with respect to amortizable intangible assets was $7,355 and $6,698 for the first three months of 2017 and 2016, respectively.

Estimated aggregate amortization expense based on the current carrying value of amortizable intangible assets for the next five fiscal years are as follows:

	Remainder of
Fiscal Year	2017		2018		2019		2020		2021		Thereafter
Amortization Expense	$	24,749	$	32,076	$	29,910	$	27,534	$	26,088	$	102,777

Non-amortizable intangible assets as of March 4, 2017 are $464 and are related to trademarks and trade names.

Note 6: Long-Term Debt

On February 14, 2017, we issued $300,000 aggregate principal of 10-year long-term unsecured public notes (“4.000% Notes”) due February 15, 2027 with a fixed coupon of 4.00 percent. Proceeds from this debt issuance were used to repay $138,000 outstanding under the revolving credit facility and prepay $158,750 of our term loan. We entered into interest rate swap agreements to convert $150,000 of the $300,000 4.000% Notes to a variable interest rate of 1-month LIBOR (in advance) plus 1.86 percent. See Note 13 for further discussion of the interest rate swaps.

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We adopted ASU No. 2015-03, Interest-Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issue Costs, during the quarter ended March 4, 2017 on a retrospective basis.  The impact of adopting ASU No. 2015-03 on our financial statements was the reclassification of deferred debt issuance costs related to our long-term debt, with the exception of our revolving credit line, from an asset to a direct deduction to the corresponding debt.  Reclassifications from an asset to a direct deduction to the corresponding debt of $4,411 and $2,386 were included in our Condensed Consolidated Balance Sheets as of March 4, 2017 and December 3, 2016, respectively. 

Note 7: Redeemable Non-Controlling Interest

We account for the non-controlling interest in H.B. Fuller Kimya Sanayi Ticaret A.S. (“HBF Kimya”) as a redeemable non-controlling interest because both the non-controlling shareholder and H.B. Fuller had an option, exercisable beginning August 1, 2018, to require the redemption of the shares owned by the non-controlling shareholder at a price determined by a formula based on 24 months trailing EBITDA. Since the option made the redemption of the non-controlling ownership shares of HBF Kimya outside of our control, these shares are classified as a redeemable non-controlling interest in temporary equity in the Condensed Consolidated Balance Sheets. The non-controlling shareholder was entitled to increase his ownership by 1 percent per year for 5 years up to a maximum of 13 percent ownership based on the achievement of profitability targets in each year. The option was subject to a minimum price of €3,500. The redemption value of the option, if it were currently redeemable, was estimated to be €3,500.

The results of operations for the HBF Kimya non-controlling interest is consolidated in our financial statements. Both the non-controlling interest and the accretion adjustment to redemption value are included in net income attributable to non-controlling interests in the Condensed Consolidated Statements of Income and in the carrying value of the redeemable non-controlling interest on the Condensed Consolidated Balance Sheets. HBF Kimya’s functional currency is the Turkish lira and changes in exchange rates affect the reported amount of the redeemable non-controlling interest.

During the first quarter of 2017, we entered into an agreement with the non-controlling shareholder to purchase the remaining shares for €4,206. The difference between the non-controlling interest balance and the purchase price was recorded in equity in the first quarter of 2017.

	Redeemable
	Non-Controlling
	Interest
Balance at December 3, 2016	$	4,277
Net income attributed to redeemable non-controlling interest		39
Purchase of redeemable non-controlling interest		(4,468	)
Foreign currency translation adjustment		152
Balance at March 4, 2017	$	-

Note 8: Accounting for Share-Based Compensation

Overview 

We have various share-based compensation programs, which provide for equity awards including non-qualified stock options, restricted stock shares, restricted stock units, performance awards and deferred compensation. These equity awards fall under several plans and are described in detail in our Annual Report on Form 10-K for the year ended December 3, 2016.

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Grant-Date Fair Value 

We use the Black-Scholes option pricing model to calculate the grant-date fair value of an award. The fair value of options granted during the quarter ended March 4, 2017 and February 27, 2016 were calculated using the following weighted average assumptions:

	Three Months Ended
	March 4, 2017				February 27, 2016
Expected life (in years)			4.75				4.75
Weighted-average expected volatility			24.87%				29.03%
Expected volatility		24.84%	-	24.88%		29.03%	-	29.23%
Risk-free interest rate			1.89%				1.44%
Expected dividend yield			1.12%				1.56%
Weighted-average fair value of grants			$10.81				$7.64

Expected life – We use historical employee exercise and option expiration data to estimate the expected life assumption for the Black-Scholes grant-date valuation. We believe that this historical data is currently the best estimate of the expected term of a new option. We use a weighted-average expected life for all awards.

Expected volatility – Volatility is calculated using our stock’s historical volatility for the same period of time as the expected life. We have no reason to believe that our future volatility will differ materially from historical volatility.

Risk-free interest rate – The rate is based on the U.S. Treasury yield curve in effect at the time of the grant for the same period of time as the expected life.

Expected dividend yield – The calculation is based on the total expected annual dividend payout divided by the average stock price.

Expense

We use the straight-line attribution method to recognize share-based compensation expense for option awards, restricted stock shares and restricted stock units with graded and cliff vesting. Incentive stock options and performance awards are based on certain performance-based metrics and the expense is adjusted quarterly, based on our projections of the achievement of those metrics. The amount of share-based compensation expense recognized during a period is based on the value of the portion of the awards that are ultimately expected to vest. The expense is recognized over the requisite service period, which for us is the period between the grant date and the earlier of the award’s stated vesting term or the date the employee is eligible for early vesting based on the terms of the plans.

Total share-based compensation expense of $5,032 and $4,267 was included in our Condensed Consolidated Statements of Income for the first quarter ended March 4, 2017 and February 27, 2016, respectively. All share-based compensation expense was recorded as SG&A expense. For the first quarter ended March 4, 2017, there was $1,053 of excess tax benefit recognized. For the first quarter ended February 27, 2016, there was $341 charged against the APIC pool for tax deficiencies.

As of March 4, 2017, there was $11,388 of unrecognized compensation costs related to unvested stock option awards, which is expected to be recognized over a weighted-average period of 1.6 years. Unrecognized compensation costs related to unvested restricted stock units was $18,035, which is expected to be recognized over a weighted-average period of 1.7 years.

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Stock Option Activity

The stock option activity for the quarter ended March 4, 2017 is presented below:

				Average
	Options			Exercise Price
Outstanding at December 3, 2016		2,986,481		$	34.92
Granted		683,425			49.95
Exercised		(261,346	)		32.71
Forfeited or cancelled		(66,589	)		36.68
Outstanding at March 4, 2017		3,341,971		$	38.13

The total fair value of options granted during the quarter ended March 4, 2017 and February 27, 2016 were $7,384 and $6,138, respectively. Total intrinsic value of options exercised during the first quarter ended March 4, 2017 and February 27, 2016 were $4,420 and $11, respectively. Intrinsic value is the difference between our closing stock price on the respective trading day and the exercise price, multiplied by the number of options exercised. Proceeds received from option exercises during the first quarter ended March 4, 2017 and February 27, 2016 was $8,549 and $32, respectively.

Restricted Stock Activity

The nonvested restricted stock activity for the quarter ended March 4, 2017 is presented below:

											Weighted-
									Weighted-		Average
									Average		Remaining
									Grant		Contractual
									Date Fair		Life
	Units			Shares		Total			Value		(in Years)
Nonvested at December 3, 2016		352,744			36,953		389,697		$	38.36		1.0
Granted		278,043			-		278,043			49.68		1.9
Vested		(137,891	)		(36,953)		(174,844	)		39.62		-
Forfeited		(16,095	)		-		(16,095	)		37.15		1.6
Nonvested at March 4, 2017		476,801			-		476,801		$	44.54		1.7

Total fair value of restricted stock vested during the first quarter ended March 4, 2017 and February 27, 2016 was $6,941 and $5,833, respectively. The total fair value of nonvested restricted stock at March 4, 2017 was $21,214.

We repurchased 50,687 and 66,447 restricted stock shares during the first quarter ended March 4, 2017 and February 27, 2016, respectively. The repurchases relate to statutory minimum tax withholding. 

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Deferred Compensation Activity

We have a Directors’ Deferred Compensation plan that allows non-employee directors to defer all or a portion of their directors’ compensation in a number of investment choices, including units representing shares of our common stock. We also have a Key Employee Deferred Compensation Plan that allows key employees to defer a portion of their eligible compensation in a number of investment choices, including units, representing shares of our common stock. We provide a 10 percent match on deferred compensation invested into units, representing shares of our common stock. The deferred compensation units activity for the quarter ended March 4, 2017 is presented below:

	Non-employee
	Directors			Employees			Total
Units outstanding December 3, 2016		424,319			41,116			465,435
Participant contributions		4,462			3,964			8,426
Company match contributions		446			397			843
Payouts		(13,818	)		(6,137	)		(19,955	)
Units outstanding March 4, 2017		415,409			39,340			454,749

Deferred compensation units are fully vested at the date of contribution.

Note 9: Components of Net Periodic Cost (Benefit) related to Pension and Other Postretirement Benefit Plans

	Three Months Ended March 4, 2017 and February 27, 2016
													Other
	Pension Benefits												Postretirement
	U.S. Plans						Non-U.S. Plans						Benefits
Net periodic cost (benefit):	2017			2016			2017			2016			2017			2016
Service cost	$	28		$	27		$	508		$	480		$	52		$	84
Interest cost		3,603			3,767			1,144			1,367			398			480
Expected return on assets		(6,364	)		(6,077	)		(2,391	)		(2,482	)		(1,447	)		(1,342	)
Amortization:
Prior service cost		7			7			(1	)		(1	)		-			(10	)
Actuarial loss		1,307			1,293			842			752			253			532
Net periodic (benefit) cost	$	(1,419	)	$	(983	)	$	102		$	116		$	(744	)	$	(256	)

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Note 10: Accumulated Other Comprehensive Income (Loss)

The following table provides details of total comprehensive income (loss):

	Three Months Ended March 4, 2017												Three Months Ended February 27, 2016
	H.B. Fuller Stockholders									Non- controlling Interests			H.B. Fuller Stockholders									Non- controlling Interests
	Pre-tax			Tax			Net			Net			Pre-tax			Tax			Net			Net
Net income including non-controlling interests		-			-		$	14,795		$	36			-			-		$	18,918		$	49
Foreign currency translation adjustment¹	$	(10,514	)		-			(10,514	)		(5	)	$	(945	)		-			(945	)		(5	)
Reclassification to earnings:
Defined benefit pension plans adjustment²		2,408		$	(818	)		1,590			-			3,997		$	(1,332	)		2,665			-
Interest rate swap³		16			(6	)		10			-			13			(3	)		10			-
Cash-flow hedges³		209			(80	)		129			-			403			(154	)		249			-
Other comprehensive income (loss)	$	(7,881	)	$	(904	)		(8,785	)		(5	)	$	3,468		$	(1,489	)		1,979			(5	)
Comprehensive income (loss)							$	6,010		$	31								$	20,897		$	44

¹ Income taxes are not provided for foreign currency translation relating to permanent investments in international subsidiaries. As discussed in Note 1, the foreign currency translation adjustment for the quarter ended March 4, 2017 includes the impact of the change in functional currency for our subsidiaries in Latin America.

² Loss reclassified from accumulated other comprehensive income (“AOCI”) into earnings as part of net periodic cost related to pension and other postretirement benefit plans is reported in cost of sales, SG&A expense and special charges, net.

³ Loss reclassified from AOCI into earnings is reported in other income (expense), net.

The components of accumulated other comprehensive loss is as follows:

	March 4, 2017
	Total			H.B. Fuller Stockholders			Non- controlling Interests
Foreign currency translation adjustment	$	(95,966	)	$	(95,895	)	$	(71	)
Defined benefit pension plans adjustment, net of taxes of $89,916		(174,511	)		(174,511	)		-
Interest rate swap, net of taxes of ($23)		38			38			-
Cash-flow hedges, net of taxes of $705		(1,146	)		(1,146	)		-
Accumulated other comprehensive loss	$	(271,585	)	$	(271,514	)	$	(71	)

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	December 3, 2016
	Total			H.B. Fuller Stockholders			Non- controlling Interests
Foreign currency translation adjustment	$	(85,447	)	$	(85,381	)	$	(66	)
Defined benefit pension plans adjustment, net of taxes of $90,734		(176,101	)		(176,101	)		-
Interest rate swap, net of taxes of ($17)		28			28			-
Cash-flow hedges, net of taxes of $785		(1,275	)		(1,275	)		-
Accumulated other comprehensive loss	$	(262,795	)	$	(262,729	)	$	(66	)

Note 11: Income Taxes

As of March 4, 2017, we had a liability of $4,354 recorded under FASB ASC 740, Income Taxes, for gross unrecognized tax benefits (excluding interest), compared to $4,165 as of December 3, 2016. As of March 4, 2017, we had accrued $711 of gross interest relating to unrecognized tax benefits. For the quarter ended March 4, 2017, our recorded liability for gross unrecognized tax benefits increased by $189.

Note 12: Earnings Per Share

A reconciliation of the common share components for the basic and diluted earnings per share calculations is as follows:

	Three Months Ended
	March 4,		February 27,
(Shares in thousands)	2017		2016
Weighted-average common shares - basic		50,243		49,958
Equivalent shares from share-based compensations plans		1,217		1,037
Weighted-average common and common equivalent shares - diluted		51,460		50,995

Basic earnings per share is calculated by dividing net income attributable to H.B. Fuller by the weighted-average number of common shares outstanding during the applicable period. Diluted earnings per share is based upon the weighted-average number of common and common equivalent shares outstanding during the applicable period. The difference between basic and diluted earnings per share is attributable to share-based compensation awards. We use the treasury stock method to calculate the effect of outstanding shares, which computes total employee proceeds as the sum of (a) the amount the employee must pay upon exercise of the award, (b) the amount of unearned share-based compensation costs attributed to future services and (c) the amount of tax benefits, if any, that would be credited to additional paid-in capital assuming exercise of the award. Share-based compensation awards for which total employee proceeds exceed the average market price over the applicable period have an antidilutive effect on earnings per share, and accordingly, are excluded from the calculation of diluted earnings per share.

Options to purchase 632,720 and 1,495,004 shares of common stock at a weighted-average exercise price of $50.10 and $42.88 for the quarters ended March 4, 2017 and February 27, 2016, respectively, were excluded from the diluted earnings per share calculations because they were antidilutive. 

Note 13: Financial Instruments

Overview

As a result of being a global enterprise, our earnings, cash flows and financial position are exposed to foreign currency risk from foreign currency denominated receivables and payables.

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We use foreign currency forward contracts, cross-currency swaps, and interest rate swaps to manage risks associated with foreign currency exchange rates and interest rates. We do not hold derivative financial instruments of a speculative nature or for trading purposes. We record derivatives as assets and liabilities on the balance sheet at fair value. Changes in fair value are recognized immediately in earnings unless the derivative qualifies and is designated as a hedge. Cash flows from derivatives are classified in the statement of cash flows in the same category as the cash flows from the items subject to designated hedge or undesignated (economic) hedge relationship. We evaluate hedge effectiveness at inception and on an ongoing basis. If a derivative is no longer expected to be effective, hedge accounting is discontinued. Hedge ineffectiveness, if any, is recorded in earnings.

We are exposed to credit risk in the event of nonperformance of counterparties for foreign currency forward exchange contracts and interest rate swap agreements. We select investment-grade multinational banks and financial institutions as counterparties for derivative transactions and monitors the credit quality of each of these banks on periodic basis as warranted. We do not anticipate nonperformance by any of these counterparties, and valuation allowances, if any, are de minimis.

Cash Flow Hedges

Effective February 24, 2017, we entered into a cross-currency swap agreement to convert a notional amount of $42,600 of foreign currency denominated intercompany loans into U.S. dollars. The swap matures in 2020. Effective October 7, 2015, we entered into three cross-currency swap agreements to convert a notional amount of $134,736 of foreign currency denominated intercompany loans into U.S. dollars. The first swap matures in 2017, the second swap matures in 2018 and the third swap matures in 2019.

As of March 4, 2017, the combined fair value of the swaps was an asset of $4,971 and was included in other assets in the Condensed Consolidated Balance Sheets. The swaps were designated as cash-flow hedges for accounting treatment. The lesser amount between the cumulative change in the fair value of the actual swaps and the cumulative change in the fair value of hypothetical swaps is recorded in accumulated other comprehensive income (loss) in the Condensed Consolidated Balance Sheets. The difference between the cumulative change in the fair value of the actual swaps and the cumulative change in the fair value of hypothetical swaps are recorded as other income (expense), net in the Condensed Consolidated Statements of Income. In a perfectly effective hedge relationship, the two fair value calculations would exactly offset each other. Any difference in the calculation represents hedge ineffectiveness. The ineffectiveness calculations as of March 4, 2017 resulted in additional pre-tax loss of $20 for the three months ended March 4, 2017 as the change in fair value of the cross-currency swaps was less than the change in the fair value of the hypothetical swaps. The amount in accumulated other comprehensive income (loss) related to cross-currency swaps was a loss of $1,146 as of March 4, 2017. The estimated net amount of the existing loss that is reported in accumulated other comprehensive income (loss) as of March 4, 2017 that is expected to be reclassified into earnings within the next twelve months is $986. As of March 4, 2017, we do not believe any gains or losses will be reclassified into earnings as a result of the discontinuance of these cash flow hedges because the original forecasted transaction will not occur.

The following table summarizes the cross-currency swaps outstanding as of March 4, 2017:

	Fiscal Year of Expiration	Interest Rate			Notional Value		Fair Value
Pay EUR	2017		3.05	%	$	44,912	$	2,181
Receive USD			3.9145	%
Pay EUR	2018		3.45	%	$	44,912	$	1,750
Receive USD			4.5374	%
Pay EUR	2019		3.80	%	$	44,912	$	1,329
Receive USD			5.0530	%
Pay EUR	2020		1.95	%	$	42,600	$	(289	)
Receive USD			4.30375	%
Total					$	177,336	$	4,971

Except for the cross-currency swap agreements listed above, foreign currency derivative instruments outstanding are not designated as hedges for accounting purposes. The gains and losses related to mark-to-market adjustments are recognized as other income or expense in the Condensed Consolidated Statements of Income during the periods in which the derivative instruments are outstanding. See Note 14 for the fair value amounts of these derivative instruments.

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As of March 4, 2017, we had forward foreign currency contracts maturing between March 21, 2017 and April 13, 2018. The mark-to-market effect associated with these contracts, on a net basis, was a gain of $3,117 as of March 4, 2017. These gains were largely offset by the underlying transaction gains and losses resulting from the foreign currency exposures for which these contracts relate.

Fair Value Hedges

We entered into interest rate swap agreements to convert $150,000 of our $300,000 4.000% Notes that were issued on February 14, 2017 to a variable interest rate of 1-month LIBOR (in advance) plus 1.86 percent. See Note 6 for further discussion on the issuance of our 4.000% Notes. The combined fair value of the interest rate swaps in total was a liability of $3,135 at March 4, 2017 and was included in other liabilities in the Condensed Consolidated Balance Sheets. The swaps were designated for hedge accounting treatment as fair value hedges. We are applying the shortcut method in accounting for these interest rate swaps as we expect that the changes in the fair value of the swap will offset the changes in the fair value of the 4.000% Notes resulting in no ineffectiveness. As a result of applying the shortcut method, the change in the fair value of the interest rate swap and an equivalent amount for the change in the fair value of the debt will be reflected in other income (expense) and no ineffectiveness will be recognized in our Condensed Consolidated Statements of Income.

We have interest rate swap agreements to convert $75,000 of our senior notes to variable interest rates. The change in fair value of the senior notes, attributable to the change in the risk being hedged, was a liability of $1,107 at March 4, 2017 and was included in long-term debt and current maturities of long-term debt in the Condensed Consolidated Balance Sheets. The combined fair value of the swaps in total was an asset of $1,077 at March 4, 2017 and $1,579 at December 3, 2016 and were included in other assets in the Condensed Consolidated Balance Sheets. The swaps were designated for hedge accounting treatment as fair value hedges. The changes in the fair value of the swap and the fair value of the senior notes attributable to the change in the risk being hedged are recorded as other income (expense), net in the Condensed Consolidated Statements of Income. In a perfectly effective hedge relationship, the two fair value calculations would exactly offset each other. Any difference in the calculation represents hedge ineffectiveness. For the three months ended March 4, 2017 and February 27, 2016, a pre-tax gain of $3 and $143, respectively, was recorded as the fair value of the interest rate swaps decreased by more than the change in the fair value of the Senior Notes attributable to the change in the risk being hedged.

Concentrations of credit risk with respect to trade accounts receivable are limited due to the large number of entities in the customer base and their dispersion across many different industries and countries. As of March 4, 2017, there were no significant concentrations of credit risk.

Note 14: Fair Value Measurements

Overview

Estimates of fair value for financial assets and liabilities are based on the framework established in the accounting guidance for fair value measurements. The framework defines fair value, provides guidance for measuring fair value and requires certain disclosures. The framework discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow) and the cost approach (cost to replace the service capacity of an asset or replacement cost). The framework utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels:

● Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.

● Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly.  These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

● Level 3: Unobservable inputs that reflect management’s assumptions, and include situations where there is little, if any, market activity for the asset or liability.

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Balances Measured at Fair Value on a Recurring Basis

The following table presents information about our financial assets and liabilities that are measured at fair value on a recurring basis as of March 4, 2017 and December 3, 2016, and indicates the fair value hierarchy of the valuation techniques utilized to determine such fair value.

	March 4,		Fair Value Measurements Using:
Description	2017		Level 1		Level 2		Level 3
Assets:
Marketable securities	$	1,245	$	1,245	$	-	$	-
Foreign exchange contract assets		3,991		-		3,991		-
Interest rate swaps		1,077		-		1,077		-
Cash-flow hedges		5,260		-		5,260		-
Liabilities:
Foreign exchange contract liabilities	$	874	$	-	$	874	$	-
Interest rate swaps		3,135		-		3,135		-
Contingent consideration liability		4,706		-		-		4,706
Cash-flow hedges		289		-		289		-

	December 3,		Fair Value Measurements Using:
Description	2016		Level 1		Level 2		Level 3
Assets:
Marketable securities	$	1,020	$	1,020	$	-	$	-
Foreign exchange contract assets		11,697		-		11,697		-
Interest rate swaps		1,579		-		1,579		-
Cash-flow hedges		4,654		-		4,654		-
Liabilities:
Foreign exchange contract liabilities	$	6,925	$	-	$	6,925	$	-
Contingent consideration liability		4,720		-		-		4,720

Long-term debt had an estimated fair value of $821,211 and $693,283 as of March 4, 2017 and December 3, 2016, respectively. The fair value of long-term debt is based on quoted market prices for the same or similar issues or on the current rates offered for debt of similar maturities. The estimated fair value of these long-term obligations is not necessarily indicative of the amount that would be realized in a current market exchange.

We use the income approach in calculating the fair value of our contingent consideration liability using a real option model with Level 3 inputs. The expected cash flows are affected by various significant judgments and assumptions, including revenue growth rates, profit margin percentages, volatility and discount rate, which are sensitive to change. Estimates of fair value are inherently uncertain and represent only management’s reasonable expectation regarding future developments. These estimates and the judgments and assumptions upon which the estimates are based will, in all likelihood, differ in some respects from actual future results. The contingent consideration liability activity for the quarter ended March 4, 2017 is presented below:

		Amount
Balance at December 3, 2016	$	4,720
Mark to market adjustment		37
Foreign currency translation adjustment		(51	)
Balance at March 4, 2017	$	4,706

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Note 15: Share Repurchase Program

On September 30, 2010, the Board of Directors authorized a share repurchase program of up to $100,000 of our outstanding common shares. Under the program, we are authorized to repurchase shares for cash on the open market, from time to time, in privately negotiated transactions or block transactions, or through an accelerated repurchase agreement. The timing of such repurchases is dependent on price, market conditions and applicable regulatory requirements. Upon repurchase of the shares, we reduced our common stock for the par value of the shares with the excess being applied against additional paid-in capital.

We did not repurchase any shares during the quarter ended March 4, 2017. During the quarter ended February 27, 2016, we repurchased shares under this program, with an aggregate value of $4,210. Of this amount, $125 reduced common stock and $4,085 reduced additional paid-in capital.

Note 16: Commitments and Contingencies

Environmental Matters 

From time to time, we become aware of compliance matters relating to, or receive notices from, federal, state or local entities regarding possible or alleged violations of environmental, health or safety laws and regulations. We review the circumstances of each individual site, considering the number of parties involved, the level of potential liability or our contribution relative to the other parties, the nature and magnitude of the hazardous substances involved, the method and extent of remediation, the estimated legal and consulting expense with respect to each site and the time period over which any costs would likely be incurred. Also, from time to time, we are identified as a potentially responsible party (“PRP”) under the Comprehensive Environmental Response, Compensation and Liability Act and/or similar state laws that impose liability for costs relating to the clean up of contamination resulting from past spills, disposal or other release of hazardous substances. We are also subject to similar laws in some of the countries where current and former facilities are located. Our environmental, health and safety department monitors compliance with applicable laws on a global basis. To the extent we can reasonably estimate the amount of our probable liabilities for environmental matters, we establish a financial provision. 

Currently we are involved in various environmental investigations, clean up activities and administrative proceedings and lawsuits. In particular, we are currently deemed a PRP in conjunction with numerous other parties, in a number of government enforcement actions associated with landfills and/or hazardous waste sites. As a PRP, we may be required to pay a share of the costs of investigation and clean up of these sites. In addition, we are engaged in environmental remediation and monitoring efforts at a number of current and former operating facilities. While uncertainties exist with respect to the amounts and timing of the ultimate environmental liabilities, based on currently available information, we have concluded that these matters, individually or in the aggregate, will not have a material adverse effect on our results of operations, financial condition or cash flow.

Other Legal Proceedings 

From time to time and in the ordinary course of business, we are a party to, or a target of, lawsuits, claims, investigations and proceedings, including product liability, personal injury, contract, patent and intellectual property, environmental, health and safety, tax and employment matters. While we are unable to predict the outcome of these matters, we have concluded, based upon currently available information, that the ultimate resolution of any pending matter, individually or in the aggregate, including the asbestos litigation described in the following paragraphs, will not have a material adverse effect on our results of operations, financial condition or cash flow.

We have been named as a defendant in lawsuits in which plaintiffs have alleged injury due to products containing asbestos manufactured more than 30 years ago. The plaintiffs generally bring these lawsuits against multiple defendants and seek damages (both actual and punitive) in very large amounts. In many cases, plaintiffs are unable to demonstrate that they have suffered any compensable injuries or that the injuries suffered were the result of exposure to products manufactured by us. We are typically dismissed as a defendant in such cases without payment. If the plaintiff presents evidence indicating that compensable injury occurred as a result of exposure to our products, the case is generally settled for an amount that reflects the seriousness of the injury, the length, intensity and character of exposure to products containing asbestos, the number and solvency of other defendants in the case, and the jurisdiction in which the case has been brought.

A significant portion of the defense costs and settlements in asbestos-related litigation is paid by third parties, including indemnification pursuant to the provisions of a 1976 agreement under which we acquired a business from a third party. Currently, this third party is defending and paying settlement amounts, under a reservation of rights, in most of the asbestos cases tendered to the third party.

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In addition to the indemnification arrangements with third parties, we have insurance policies that generally provide coverage for asbestos liabilities, including defense costs.  Historically, insurers have paid a significant portion of our defense costs and settlements in asbestos-related litigation. However, certain of our insurers are insolvent.  We have entered into cost-sharing agreements with our insurers that provide for the allocation of defense costs and settlements and judgments in asbestos-related lawsuits.  These agreements require, among other things, that we fund a share of settlements and judgments allocable to years in which the responsible insurer is insolvent

A summary of the number of and settlement amounts for asbestos-related lawsuits and claims is as follows:

	Three Months Ended				3 Years Ended
	March 4, 2017		February 27, 2016		December 3, 2016
Lawsuits and claims settled		3		2		33
Settlement amounts	$	833	$	75	$	3,061
Insurance payments received or expected to be received	$	685	$	56	$	2,253

We do not believe that it would be meaningful to disclose the aggregate number of asbestos-related lawsuits filed against us because relatively few of these lawsuits are known to involve exposure to asbestos-containing products that we manufactured. Rather, we believe it is more meaningful to disclose the number of lawsuits that are settled and result in a payment to the plaintiff. To the extent we can reasonably estimate the amount of our probable liabilities for pending asbestos-related claims, we establish a financial provision and a corresponding receivable for insurance recoveries. 

Based on currently available information, we have concluded that the resolution of any pending matter, including asbestos-related litigation, individually or in the aggregate, will not have a material adverse effect on our results of operations, financial condition or cash flow.

Note 17: Operating Segments

We are required to report segment information in the same way that we internally organize our business for assessing performance and making decisions regarding allocation of resources. For segment evaluation by the chief operating decision maker, segment operating income is identified as gross profit less SG&A expenses. Segment operating income excludes special charges, net. Corporate expenses are fully allocated to each operating segment. Corporate assets are not allocated to the operating segments. Inter-segment revenues are recorded at cost plus a markup for administrative costs. Operating results of each segment are regularly reviewed by our chief operating decision maker to make decisions about resources to be allocated to the segments and assess their performance.

The table below provides certain information regarding net revenue and segment operating income for each of our operating segments:

	Three Months Ended
	March 4, 2017							February 27, 2016
			Inter-		Segment					Inter-		Segment
	Trade		Segment		Operating			Trade		Segment		Operating
	Revenue		Revenue		Income (Loss)			Revenue		Revenue		Income
Americas Adhesives	$	193,162	$	3,860	$	21,033		$	183,319	$	3,630	$	26,259
EIMEA		124,039		3,522		1,797			124,291		5,271		6,163
Asia Pacific		62,645		1,269		1,879			53,860		951		3,753
Construction Products		57,046		162		(683	)		60,074		104		785
Engineering Adhesives		66,431		-		2,055			52,782		-		878
Total	$	503,323			$	26,081		$	474,326			$	37,838

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Reconciliation of segment operating income to income before income taxes and income from equity method investments:

	Three Months Ended
	March 4,			February 27,
	2017			2016
Segment operating income	$	26,081		$	37,838
Special charges, net		-			(413	)
Other income (expense), net		621			(5,082	)
Interest expense		(8,380	)		(6,308	)
Income before income taxes and income from equity method investments	$	18,322		$	26,035

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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

Overview

The Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) should be read in conjunction with the MD&A included in our Annual Report on Form 10-K for the year ended December 3, 2016 for important background information related to our business.

Net revenue in the first quarter of 2017 increased 6.1 percent from the first quarter of 2016. Revenue increased 11.9 percent due to sales volume, including 3.2 percent from acquisitions, but was partially offset by a 2.2 percent decrease due to unfavorable sales mix and a 0.1 percent decrease in product pricing compared to the first quarter of 2016. A weaker Egyptian pound, Chinese renminbi, Turkish lira and Mexican peso compared to the U.S. dollar for the first quarter of 2017 compared to the first quarter of 2016 were the main drivers of a negative 3.5 percent currency effect. Gross profit margin decreased 140 basis points primarily due to higher raw material costs and the implementation of the 2017 Restructuring Plan.

Net income attributable to H.B. Fuller in the first quarter of 2017 was $14.8 million compared to $18.9 million in the first quarter of 2016. On a diluted earnings per share basis, the first quarter of 2017 was $0.29 per share compared to $0.37 per share for the first quarter of 2016.

Restructuring Plan

During the first quarter of 2017, we approved a restructuring plan (the “2017 Restructuring Plan”) related to organizational changes and other actions to optimize operations. In implementing the 2017 Restructuring Plan, we expect to incur costs of approximately $17.0 million to $20.0 million ($13.0 million to $16.0 million after-tax) which includes (i) cash expenditures of approximately $13.0 million ($11.0 million after-tax) for severance and related employee costs globally and (ii) $4.0 million to $7.0 million ($3.0 million to $5.0 million after-tax) related to the optimization of production facilities, streamlining of processes and accelerated depreciation of long-lived assets. Approximately $15.0 million to $16.0 million ($12.0 million to $13.0 million after-tax) of the costs are expected to be cash costs. The 2017 Restructuring Plan was implemented in the first quarter of 2017 and is currently expected to be completed by mid-year of fiscal 2018. The implementation of the 2017 Restructuring Plan resulted in a first-quarter 2017 pre-tax charge of $10.2 million. 

Results of Operations

Net revenue:

	Three Months Ended
	March 4,		February 27,		2017 vs
($ in millions)	2017		2016		2016
Net revenue	$	503.3	$	474.3		6.1	%

We review variances in net revenue in terms of changes related to sales volume, product pricing, sales mix, business acquisitions and changes in foreign currency exchange rates. The impact of sales volume, product pricing, sales mix and acquisitions are viewed as constant currency growth. The following table shows the net revenue variance analysis for the first quarter of 2017 compared to the same period in 2016:

	Three Months Ended March 4, 2017
	vs February 27, 2016
Constant currency growth		9.6	%
Currency		(3.5	%)
Total		6.1	%

Constant currency growth was a positive 9.6 percent in the first quarter of 2017 compared to the first quarter of 2016. The 9.6 percent constant currency growth in the first quarter of 2017 was driven by 30.0 percent growth in Engineering Adhesives, 20.0 percent growth in Asia Pacific, 9.3 percent growth in EIMEA and 5.7 percent growth in Americas Adhesives, offset by a 5.3 percent decrease in Construction Products. The negative 3.5 percent currency impact was primarily driven by the devaluation of the Egyptian pound, Chinese renminbi, Turkish lira and Mexican peso.

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Cost of sales:

	Three Months Ended
	March 4,			February 27,			2017 vs
($ in millions)	2017			2016			2016
Raw materials	$	273.4		$	254.5			7.4	%
Other manufacturing costs		90.9			82.2			10.6	%
Cost of sales	$	364.3		$	336.7			8.2	%
Percent of net revenue		72.4	%		71.0	%

Cost of sales in the first quarter of 2017 compared to the first quarter of 2016 increased 140 basis points as a percentage of net revenue. Raw material cost as a percentage of net revenue increased 70 basis points compared to last year primarily due to higher raw materials costs. Other manufacturing costs as a percentage of revenue increased 70 basis points compared to the first quarter of last year driven primarily by the impact of acquired businesses and the implementation of the 2017 Restructuring Plan.

Gross profit:            

	Three Months Ended
	March 4,			February 27,			2017 vs
($ in millions)	2017			2016			2016
Gross profit	$	139.0		$	137.6			1.0	%
Percent of net revenue		27.6	%		29.0	%

Gross profit in the firstquarter of 2017 increased 1.0 percent and gross profit margin decreased 140 basis points compared to the firstquarter of 2016. The decrease in gross profit margin was primarily due to higher raw material costs and the implementation of the 2017 Restructuring Plan.

Selling, general and administrative expenses:

	Three Months Ended
	March 4,			February 27,			2017 vs
($ in millions)	2017			2016			2016
SG&A	$	112.9		$	99.8			13.2	%
Percent of net revenue		22.4	%		21.0	%

Selling, general and administrative (“SG&A”) expenses for the first quarter of 2017 increased $13.1 million, or 13.2 percent, compared to the first quarter of 2016. The increase is mainly due to the impact of acquired businesses, the implementation of the 2017 Restructuring Plan and higher variable compensation partially offset by lower expenses related to general spending reductions and foreign currency exchange rate benefits on spending outside the U.S.

Special charges, net:

	Three Months Ended
	March 4,		February 27,		2017 vs
($ in millions)	2017		2016		2016
Special charges, net	$	-	$	0.4		NMP

NMP = Non-meaningful percentage

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The following table provides detail of special charges, net:

	Three Months Ended
	March 4,		February 27,
($ in millions)	2017		2016
Acquisition and transformation related costs	$	-	$	0.1
Facility exit costs		-		0.3
Special charges, net	$	-	$	0.4

The integration of the industrial adhesives business we acquired in March 2012 involved a significant amount of restructuring and capital investment to optimize the new combined entity. In addition to this acquisition, we announced our intentions to take a series of actions in our existing EIMEA operating segment to improve the profitability and future growth prospects of this operating segment. We combined these two initiatives into a single project which we refer to as the “Business Integration Project”. During the first quarter ended February 27, 2016, we incurred special charges, net of $0.4 million for costs related to the Business Integration Project. The Business Integration Project was substantially complete at the end of 2016.

Other income (expense), net:

	Three Months Ended
	March 4,		February 27,			2017 vs
($ in millions)	2017		2016			2016
Other income (expense), net	$	0.6	$	(5.1	)		NMP

NMP = Non-meaningful percentage

Other income (expense), net in the first quarter of 2017 included $0.6 million of interest income. Other income (expense), net in the first quarter of 2016 included $5.8 million of currency translation and re-measurement losses offset by $0.2 million of net financing income and $0.5 million of interest income.

Interest expense:

	Three Months Ended
	March 4,		February 27,		2017 vs
($ in millions)	2017		2016		2016
Interest expense	$	8.4	$	6.3		32.8	%

Interest expense in the first quarter of 2017 compared to the same period last year was higher due to larger local currency debt balances at higher interest rates, higher U.S. debt balances at higher interest rates from the issuance of our 4.000% Notes, and slightly higher LIBOR rates on floating rate debt held in the U.S. In addition, and as a result of the issuance of our 4.000% Notes during the first quarter of 2017, we recorded $0.5 million of accelerated amortization of debt issuance costs related to debt facilities that were repaid with proceeds from the 4.000% Notes. We capitalized less than $0.1 million of interest expense in the first quarter of 2017 compared to $0.1 million in the same period last year.

Income taxes:

	Three Months Ended
	March 4,			February 27,			2017 vs
($ in millions)	2017			2016			2016
Income taxes	$	5.8		$	8.8			(34.2	%)
Effective tax rate		31.5	%		33.6	%

Income tax expense of $5.8 million in the first quarter of 2017 includes $0.1 million of discrete tax expense and $3.9 million of tax benefit from costs primarily related to the restructuring plans and other non-recurring items.  Excluding the discrete tax expense and the effects of these items, the overall effective tax rate was 29.7 percent.

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Income from equity method investments:

	Three Months Ended
	March 4,		February 27,		2017 vs
($ in millions)	2017		2016		2016
Income from equity method investments	$	2.3	$	1.7		34.4	%

The income from equity method investments relates to our 50 percent ownership of the Sekisui-Fuller joint venture in Japan. The higher income for the first quarter of 2017 compared to the first quarter of 2016 is primarily related to higher net income in our joint venture.

Net income attributable to non-controlling interests:

Net income attributable to non-controlling interests relates to an 11 percent redeemable non-controlling interest in HBF Turkey and was not material for the quarter ended March 4, 2017 and February 27, 2016. During the first quarter of 2017, we entered into an agreement with the non-controlling shareholder to purchase the remaining shares.

Net income attributable to H.B. Fuller:

	Three Months Ended
	March 4,			February 27,			2017 vs
($ in millions)	2017			2016			2016
Net income attributable to H.B. Fuller	$	14.8		$	18.9			(21.8	%)
Percent of net revenue		2.9	%		4.0	%

The net income attributable to H.B. Fuller for the first quarter of 2017 was $14.8 million compared to $18.9 million for the first quarter of 2016. The diluted earnings per share for the first quarter of 2017 was $0.29 per share as compared to $0.37 per share for the first quarter of 2016.

Operating Segment Results

We have five reportable segments: Americas Adhesives, EIMEA (Europe, India, Middle East and Africa), Asia Pacific, Construction Products and Engineering Adhesives. Operating results of each of these segments are regularly reviewed by our chief operating decision maker to make decisions about resources to be allocated to the segments and assess their performance.

The tables below provide certain information regarding the net revenue and segment operating income of each of our operating segments. For segment evaluation by the chief operating decision maker, segment operating income is defined as gross profit less SG&A expenses. Segment operating income excludes special charges, net. The impact of sales volume, product pricing, sales mix and acquisitions are viewed as constant currency growth.

Net Revenue by Segment:

	Three Months Ended
	March 4, 2017					February 27, 2016
	Net		% of			Net		% of
($ in millions)	Revenue		Total			Revenue		Total
Americas Adhesives	$	193.2		38	%	$	183.3		39	%
EIMEA		124.0		25	%		124.3		26	%
Asia Pacific		62.6		13	%		53.8		11	%
Construction Products		57.1		11	%		60.1		13	%
Engineering Adhesives		66.4		13	%		52.8		11	%
Total	$	503.3		100	%	$	474.3		100	%

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Segment Operating Income (Loss):

	Three Months Ended
	March 4, 2017						February 27, 2016
($ in millions)	Segment Operating Income (Loss)			% of Total			Segment Operating Income		% of Total
Americas Adhesives	$	21.0			81	%	$	26.3		70	%
EIMEA		1.8			7	%		6.1		16	%
Asia Pacific		1.9			7	%		3.7		10	%
Construction Products		(0.7	)		-3	%		0.8		2	%
Engineering Adhesives		2.1			8	%		0.9		2	%
Total	$	26.1			100	%	$	37.8		100	%

The following table provides a reconciliation of segment operating income to income before income taxes and income from equity method investments, as reported on the Condensed Consolidated Statements of Income:

	Three Months Ended
	March 4,			February 27,
($ in millions)	2017			2016
Segment operating income	$	26.1		$	37.8
Special charges, net		-			(0.4	)
Other income (expense), net		0.6			(5.1	)
Interest expense		(8.4	)		(6.3	)
Income before income taxes and income from equity method investments	$	18.3		$	26.0

Americas Adhesives

	Three Months Ended
	March 4,			February 27,			2017 vs
($ in millions)	2017			2016			2016
Net revenue	$	193.2		$	183.3			5.4	%
Segment operating income	$	21.0		$	26.3			(19.9	%)
Segment operating margin		10.9	%		14.3	%

The following table provides details of the Americas Adhesives net revenue variances:

	Three Months Ended March 4, 2017
	vs February 27, 2016
Constant currency growth		5.7	%
Currency		(0.3	%)
Total		5.4	%

Net revenue increased 5.4 percent in the first quarter of 2017 compared to the first quarter of 2016. The 5.7 percent increase in constant currency growth was attributable to a 11.2 percent increase in sales volume, including a 4.4 percent increase due to the Wisdom Adhesives acquisition, offset by a 4.0 percent decrease due to unfavorable sales mix and a 1.5 percent decrease in product pricing. The negative currency effect was due to the weaker Mexican peso and Argentinian peso compared to the U.S. dollar. As a percentage of net revenue, raw material costs increased 140 basis points mainly due to lower sales prices, higher raw material costs and the impact of valuing inventories related to the Wisdom Adhesives acquisition at fair value. Other manufacturing costs as a percentage of net revenue increased 120 basis points, primarily due to the acquisition of Wisdom Adhesives and higher delivery expense. SG&A expenses as a percentage of net revenue increased 80 basis points due to the implementation of the 2017 Restructuring Plan and the acquisition of Wisdom Adhesives. Segment operating income decreased 19.9 percent and segment operating margin as a percentage of net revenue decreased 340 basis points compared to the first quarter of 2016.

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EIMEA

	Three Months Ended
	March 4,			February 27,			2017 vs
($ in millions)	2017			2016			2016
Net revenue	$	124.0		$	124.3			(0.2	%)
Segment operating income	$	1.8		$	6.1			(70.8	%)
Segment operating margin		1.4	%		5.0	%

The following table provides details of the EIMEA net revenue variances:

	Three Months Ended March 4, 2017
	vs February 27, 2016
Constant currency growth		9.3	%
Currency		(9.5	%)
Total		(0.2	%)

Net revenue decreased 0.2 percent in the first quarter of 2017 compared to the first quarter of 2016. The 9.3 percent increase in constant currency growth was attributable to a 6.5 percent increase in sales volume and a 3.1 percent increase in product pricing, partially offset by unfavorable sales mix. The negative currency effect of 9.5 percent was primarily the result of a weaker Egyptian pound and Turkish lira compared to the U.S. dollar partially offset by a stronger Euro. Sales volume growth was primarily related to the hygiene and durable assembly markets, and strong growth in the emerging markets. Raw material cost as a percentage of net revenue decreased 60 basis points in the first quarter compared to the first quarter last year primarily due to higher product pricing and favorable sales mix. Other manufacturing costs as a percentage of net revenue were 170 basis points higher than the first quarter of 2016. SG&A expenses as a percentage of net revenue increased 270 basis points due to the implementation of the 2017 Restructuring Plan. Segment operating income decreased 70.8 percent and segment operating margin decreased 360 basis points compared to the first quarter of 2016.

Asia Pacific

	Three Months Ended
	March 4,			February 27,			2017 vs
($ in millions)	2017			2016			2016
Net revenue	$	62.6		$	53.8			16.3	%
Segment operating income	$	1.9		$	3.7			(49.9	%)
Segment operating margin		3.0	%		7.0	%

The following table provides details of the Asia Pacific net revenue variances:

	Three Months Ended March 4, 2017
	vs February 27, 2016
Constant currency growth		20.0	%
Currency		(3.7	%)
Total		16.3	%

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Net revenue in the first quarter of 2017 increased 16.3 percent compared to the first quarter of 2016. The 20.0 percent increase in constant currency growth was attributable to a 25.0 percent increase in sales volume, including a 7.0 percent increase due to the Advanced Adhesives acquisition, partially offset by a 2.8 percent decrease due to unfavorable sales mix and a 2.2 percent decrease in product pricing. Organic constant currency growth was primarily driven by volume growth in Greater China. Negative currency effects of 3.7 percent compared to the first quarter of 2016 were primarily driven by the weaker Chinese renminbi and Malaysian ringgit compared to the U.S. dollar partially offset by a stronger Australian dollar. Raw material costs as a percentage of net revenue increased 150 basis points compared to the first quarter of 2016 due to unfavorable sales mix and higher raw material costs. Other manufacturing costs as a percentage of net revenue increased 70 basis points compared to the first quarter of 2016 primarily due to the acquisition of Advanced Adhesives and the impact of the 2017 Restructuring Plan. SG&A expenses as a percentage of net revenue increased 180 basis points due to the acquisition of Advanced Adhesives and the implementation of the 2017 Restructuring Plan. Segment operating income decreased 49.9 percent and segment operating margin decreased 400 basis points compared to the first quarter of 2016.

Construction Products

	Three Months Ended
	March 4,			February 27,			2017 vs
($ in millions)	2017			2016			2016
Net revenue	$	57.1		$	60.1			(5.0	%)
Segment operating income	$	(0.7	)	$	0.8			(187.1	%)
Segment operating margin		(1.2	%)		1.3	%

The following tables provide details of the Construction Products net revenue variances:

	Three Months Ended March 4, 2017
	vs February 27, 2016
Constant currency growth		(5.3	%)
Currency		0.3	%
Total		(5.0	%)

Net revenue decreased 5.0 percent in the first quarter of 2017 compared to the first quarter of 2016. The 5.3 percent decrease in constant currency growth was driven by a 3.6 percent decrease due to unfavorable sales mix and a 1.7 percent decrease in sales volume. The positive currency effect was due to the stronger Australian dollar compared to the U.S. dollar. Raw material cost as a percentage of net revenue was 120 basis points lower in the first quarter of 2017 compared to last year primarily due to favorable sales mix and lower raw material costs. Other manufacturing costs as a percentage of net revenue were 280 basis points higher in the first quarter of 2017 compared to the first quarter of 2016 primarily due to the implementation of the 2017 Restructuring Plan. Segment operating income decreased 187.1 percent and segment operating margin decreased 250 basis points compared to the first quarter of 2016.

Engineering Adhesives

	Three Months Ended
	March 4,			February 27,			2017 vs
($ in millions)	2017			2016			2016
Net revenue	$	66.4		$	52.8			25.9	%
Segment operating income	$	2.1		$	0.9			134.1	%
Segment operating margin		3.1	%		1.7	%

The following tables provide details of the Engineering Adhesives net revenue variances:

	Three Months Ended March 4, 2017
	vs February 27, 2016
Constant currency growth		30.0	%
Currency		(4.1	%)
Total		25.9	%

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Net revenue increased 25.9 percent in the first quarter of 2017 compared to the first quarter of 2016. The 30.0 percent increase in constant currency growth was attributable to a 29.0 percent increase in sales volume, including a 6.5 percent increase due to the acquisition of Cyberbond, and a 1.3 percent increase due to favorable sales mix, partially offset by a 0.3percent decrease in product pricing. Organic constant currency growth was driven by strong performance in the automotive, electronics and Tonsan markets. Negative currency effects of 4.1 percent compared to the first quarter of last year were primarily driven by the weaker Chinese renminbi compared to the U.S. dollar. Raw material cost as a percentage of net revenue was 220 basis points higher in the first quarter of 2017 compared to the first quarter of 2016 due to higher raw material costs. Other manufacturing costs as a percentage of net revenue were 200 basis points lower in the first quarter of 2017 compared to the first quarter of 2016 due to higher sales volume. Segment operating income increased 134.1 percent and segment operating margin increased 140 basis points compared to the first quarter of 2016.

Financial Condition, Liquidity and Capital Resources

Total cash and cash equivalents as of March 4, 2017 were $116.5 million compared to $142.2 million as of December 3, 2016 and $126.8 million as of February 27, 2016. Of the $116.5 million in cash and cash equivalents as of March 4, 2017, $96.5 million was held outside the United States. Total long and short-term debt was $804.8 million as of March 4, 2017, $703.3 million as of December 3, 2016 and $720.4 million as of February 27, 2016. The total debt to total capital ratio as measured by Total Debt divided by (Total Debt plus Total Equity) was 45.9 percent as of March 4, 2017 as compared to 42.8 percent as of December 3, 2016 and 44.9 percent as of February 27, 2016.

We believe that cash flows from operating activities will be adequate to meet our ongoing liquidity and capital expenditure needs. In addition, we believe we have the ability to obtain both short-term and long-term debt to meet our financing needs for the foreseeable future. Cash available in the United States has historically been sufficient and we expect it will continue to be sufficient to fund U.S. operations and U.S. capital spending and U.S. pension and other postretirement benefit contributions in addition to funding U.S. acquisitions, dividend payments, debt service and share repurchases as needed. For those international earnings considered to be reinvested indefinitely, we currently have no intention to, and plans do not indicate a need to, repatriate these funds for U.S. operations.

Our credit agreements and note purchase agreements include restrictive covenants that, if not met, could lead to a renegotiation of our credit lines and a significant increase in our cost of financing. At March 4, 2017, we were in compliance with all covenants of our contractual obligations as shown in the following table:

Covenant	Debt Instrument	Measurement	Result as of March 4, 2017
TTM EBITDA / TTM Interest Expense	All Debt Instruments	Not less than 2.5	9.2
Total Indebtedness / TTM EBITDA	All Debt Instruments	Not greater than 3.5	2.9

● TTM = Trailing 12 months

● EBITDA for covenant purposes is defined as consolidated net income, plus interest expense, taxes, depreciation and amortization, non-cash impairment losses, extraordinary non-cash losses incurred other than in the ordinary course of business, nonrecurring extraordinary non-cash restructuring charges, cash expenses related to the Tonsan acquisition for advisory services and for arranging financing for the acquired business with cash expenses not to exceed $10.0 million, minus extraordinary non-cash gains incurred other than in the ordinary course of business. For the Total Indebtedness / TTM EBITDA ratio, TTM EBITDA is adjusted for the pro forma results from Material Acquisitions and Material Divestitures as if the acquisition or divestiture occurred at the beginning of the calculation period. Additional detail is provided in the Form 8-K dated October 31, 2014.

We believe we have the ability to meet all of our contractual obligations and commitments in fiscal 2017.

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Selected Metrics of Liquidity

Key metrics we monitor are net working capital as a percent of annualized net revenue, trade accounts receivable days sales outstanding (“DSO”), inventory days on hand, free cash flow and debt capitalization ratio.

	March 4,			February 27,
	2017			2016
Net working capital as a percentage of annualized net revenue1		23.0	%		23.1	%
Accounts receivable DSO2 (in days)		60			59
Inventory days on hand3 (in days)		70			68
Free cash flow4	$	(10.5	)	$	12.7
Total debt to total capital ratio5		45.9	%		44.9	%

¹ Current quarter net working capital (trade receivables, net of allowance for doubtful accounts plus inventory minus trade payables) divided by annualized net revenue (current quarter multiplied by four).

² Trade receivables net of the allowance for doubtful accounts at the balance sheet date multiplied by 56 (8 weeks) and divided by the net revenue for the last 2 months of the quarter.

³ Total inventory multiplied by 56 and divided by cost of sales (excluding delivery costs) for the last 2 months of the quarter.

⁴ Year-to-date net cash provided by (used in) operations from continuing operations, less purchased property, plant and equipment and dividends paid.

⁵ Total debt divided by (total debt plus total stockholders’ equity).

Summary of Cash Flows

Cash Flows from Operating Activities:    

	Three Months Ended
	March 4,		February 27,
($ in millions)	2017		2016
Net cash provided by operating activities	$	16.5	$	42.6

Net income including non-controlling interests was $14.8 million in the first three months of 2017 compared to $19.0 million in the first three months of 2016. Depreciation and amortization expense totaled $19.3 million in the first three months of 2017 compared to $20.0 million in the first three months of 2016. Accrued compensation was a use of cash of $7.5 million in 2017 compared to a use of cash of $13.2 million last year related to lower accruals for our employee incentive plans. Other accrued expenses was a use of cash of $8.1 million in the first three months of 2017 compared to a use of cash of $5.3 million in same period last year. Other liabilities was a source of cash of $1.8 million in the first three months of 2017 compared to a use of cash of $1.4 million in the first three months of 2016.

Changes in net working capital (trade receivables, inventory and trade payables) accounted for a use of cash of $3.7 million compared to a source of cash of $8.7 million last year. The table below provides the cash flow impact due to changes in the components of net working capital:

	Three Months Ended
	March 4,			February 27,
($ in millions)	2017			2016
Trade receivables, net	$	4.9		$	28.9
Inventory		(32.6	)		(15.9	)
Trade payables		24.0			(4.3	)
Total cash flow impact	$	(3.7	)	$	8.7

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● Trade Receivables, net – Trade Receivables, net was a source of cash of $4.9 million in 2017 compared to a source of cash of $28.9 million in 2016. The higher source of cash in 2016 compared to 2017 was due to strong collection activity of trade receivables. The DSO were 60 days at March 4, 2017 and 59 days at February 27, 2016.

● Inventory – Inventory was a use of cash of $32.6 million and $15.9 million in 2017 and 2016, respectively. The lower use of cash in 2016 is related to lower seasonal build of inventory in 2016. Inventory days on hand were 70 days as of March 4, 2017 and 68 days as of February 27, 2016.

● Trade Payables – For the first three months of 2017 trade payables was a source of cash of $24.0 million compared to a use of cash of $4.3 million in 2016. The use of cash in 2016 compared to the source of cash in 2017 is primarily related to higher purchases of inventory and property, plant and equipment.

Cash Flows from Investing Activities:

	Three Months Ended
	March 4,			February 27,
($ in millions)	2017			2016
Net cash used in investing activities	$	(144.3	)	$	(22.5	)

In the first quarter of 2017, we acquired Wisdom Adhesives for $123.3 million. Purchases of property, plant and equipment were $19.9 million in the first three months of 2017 as compared to $23.4 million for the same period of 2016. The decrease in 2017 compared to 2016 was primarily related to lower capital expenditures in 2017. 

Cash Flows from Financing Activities:

	Three Months Ended
	March 4,		February 27,
($ in millions)	2017		2016
Net cash provided by (used in) financing activities	$	101.8	$	(12.6	)

We had $453.0 million of proceeds from the issuance of long-term debt in the first three months of 2017 which consisted of $300.0 million of proceeds from the issuance of the 4.000% Notes and $153.0 million of proceeds from our revolving credit facility. Proceeds from our revolving credit facility were drawn in conjunction with the acquisition of Wisdom Adhesives. Repayments of long-term debt were $354.2 million in the first three months of 2017 and $5.6 million in the first three months of 2016. We also paid $2.4 million in debt issuance costs associated with the issuance of the 4.000% Notes in the first three months of 2017. Net proceeds from notes payable were $8.4 million in 2017 compared to net payments of $6.4 million in 2016. Cash dividends paid were $7.0 million in 2017 compared to $6.5 million in 2016. Repurchases of common stock were $2.4 million in the first three months of 2017 compared to $6.5 million in the same period of 2016. There were no repurchases of common stock in 2017 from our 2010 share repurchase program.

Forward-Looking Statements and Risk Factors

The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements. In this Quarterly Report on Form 10-Q, we discuss expectations regarding our future performance which include anticipated financial performance, savings from restructuring and process initiatives, global economic conditions, liquidity requirements, the impact of litigation and environmental matters, the effect of new accounting pronouncements and one-time accounting charges and credits, and similar matters. This Quarterly Report on Form 10-Q contains forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements may be identified by the use of words like "plan," "expect," "aim," "believe," "project," "anticipate," "intend," "estimate," "will," "should," "could" (including the negative or variations thereof) and other expressions that indicate future events and trends. These plans and expectations are based upon certain underlying assumptions, including those mentioned with the specific statements. Such assumptions are in turn based upon internal estimates and analyses of current market conditions and trends, our plans and strategies, economic conditions and other factors. These plans and expectations and the assumptions underlying them are necessarily subject to risks and uncertainties inherent in projecting future conditions and results. Actual results could differ materially from expectations expressed in the forward-looking statements if one or more of the underlying assumptions and expectations proves to be inaccurate or is unrealized. In addition to the factors described in this report, Part II, Item 1A. Risk Factors in this report and Part I, Item 1A. Risk Factors in our Annual Report on Form 10-K for the fiscal year ended December 3, 2016, identify some of the important factors that could cause our actual results to differ materially from those in any such forward-looking statements. This list of important factors does not include all such factors nor necessarily present them in order of importance. In order to comply with the terms of the safe harbor, we have identified these important factors which could affect our financial performance and could cause our actual results for future periods to differ materially from the anticipated results or other expectations expressed in the forward-looking statements. Additionally, the variety of products sold by us and the regions where we do business makes it difficult to determine with certainty the increases or decreases in revenues resulting from changes in the volume of products sold, currency impact, changes in geographic and product mix and selling prices. Our best estimates of these changes as well as changes in other factors have been included. References to volume changes include volume, product mix and delivery charges, combined. These factors should be considered, together with any similar risk factors or other cautionary language, which may be made elsewhere in this Quarterly Report on Form 10-Q.

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We may refer to Part II, Item 1A. Risk Factors and this section of the Form 10-Q to identify risk factors related to other forward looking statements made in oral presentations, including investor conferences and/or webcasts open to the public.

This disclosure, including that under "Forward-Looking Statements and Risk Factors," and other forward-looking statements and related disclosures made by us in this report and elsewhere from time to time, represents our best judgment as of the date the information is given. We do not undertake responsibility for updating any of such information, whether as a result of new information, future events, or otherwise, except as required by law. Investors are advised, however, to consult any further public company disclosures (such as in filings with the Securities and Exchange Commission or in company press releases) on related subjects.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Market Risk 

We are exposed to various market risks, including changes in interest rates, foreign currency rates and prices of raw materials. Market risk is the potential loss arising from adverse changes in market rates and prices, such as interest rates and foreign currency exchange rates.

Our financial performance has been, and may continue to be, negatively affected by the unfavorable economic conditions. Continued or further recessionary economic conditions may have an adverse impact on our sales volumes, pricing levels and profitability. As domestic and international economic conditions change, trends in discretionary consumer spending also become unpredictable and subject to reductions due to uncertainties about the future. A general reduction in consumer discretionary spending due to recession in the domestic and international economies, or uncertainties regarding future economic prospects, could have a material adverse effect on our results of operations.

Interest Rate Risk 

Exposure to changes in interest rates result primarily from borrowing activities used to fund operations. Committed floating rate credit facilities are used to fund a portion of operations. We believe that probable near-term changes in interest rates would not materially affect financial condition, results of operations or cash flows. The annual impact on interest expense of a one-percentage point interest rate change on the outstanding balance of our variable rate debt as of March 4, 2017 would have resulted in a change in net income of approximately $2.3 million or $0.04 per diluted share.

Foreign Exchange Risk 

As a result of being a global enterprise, there is exposure to market risks from changes in foreign currency exchange rates, which may adversely affect operating results and financial condition. Approximately 59 percent of net revenue was generated outside of the United States for the first quarter of 2017. Principal foreign currency exposures relate to the Euro, British pound sterling, Canadian dollar, Chinese renminbi, Japanese yen, Australian dollar, Argentine peso, Brazilian real, Colombian peso, Mexican peso, Turkish lira, Egyptian pound, Indian rupee, Indonesian rupiah and Malaysian ringgit.

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Our objective is to balance, where possible, non-functional currency denominated assets to non-functional currency denominated liabilities to have a natural hedge and minimize foreign exchange impacts. We enter into cross border transactions through importing and exporting goods to and from different countries and locations. These transactions generate foreign exchange risk as they create assets, liabilities and cash flows in currencies other than their functional currency. This also applies to services provided and other cross border agreements among subsidiaries. Based on financial results for the first quarter of 2017, a hypothetical one percent change in our cost of sales due to foreign currency rate changes would have resulted in a change in net income attributable to H.B. Fuller of approximately $1.4 million or $0.03 per diluted share.

We take steps to minimize risks from foreign currency exchange rate fluctuations through normal operating and financing activities and, when deemed appropriate, through the use of derivative instruments. We do not enter into any speculative positions with regard to derivative instruments.

Based on financial results for the first quarter of 2017 and foreign currency balance sheet positions as of March 4, 2017, a hypothetical overall 10 percent change in the U.S. dollar would have resulted in a change in net income of approximately $1.5 million or $0.03 per diluted share.

On December 4, 2016, for our subsidiaries in Latin America, we changed the functional currency from the U.S. dollar to the entity’s local currency based on management’s analysis of the changes of the economic facts and circumstances in which these subsidiaries operate. The change in functional currency is accounted for prospectively from December 4, 2016 and financial statements prior to and including the year ended December 3, 2016 have not been restated for the change in functional currency.

Raw Materials 

The principal raw materials used to manufacture products include resins, polymers, synthetic rubbers, vinyl acetate monomer and plasticizers. We generally avoid sole source supplier arrangements for raw materials. While alternate supplies of most key raw materials are available, unplanned supplier production outages may lead to strained supply-demand situations for several key raw materials such as ethylene and propylene, several polymers and other petroleum derivatives such as waxes.

The purchase of raw materials is our largest expenditure. Our objective is to purchase raw materials that meet both our quality standards and production needs at the lowest total cost. Most raw materials are purchased on the open market or under contracts that limit the frequency but not the magnitude of price increases. In some cases, however, the risk of raw material price changes is managed by strategic sourcing agreements which limit price increases to increases in supplier feedstock costs, while requiring decreases as feedstock costs decline. The leverage of having substitute raw materials approved for use wherever possible is used to minimize the impact of possible price increases. Based on financial results for the first quarter of 2017, a hypothetical one percent change in our raw material costs would have resulted in a change in net income of approximately $1.9 million or $0.04 per diluted share.

Item 4. Controls and Procedures

Controls and Procedures

We conducted an evaluation, under the supervision and with the participation of our president and chief executive officer and executive vice president, chief financial officer, of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (Exchange Act)) as of March 4, 2017.  We acquired Wisdom Adhesives in the first quarter of 2017. They represented approximately six percent of our total assets as of March 4, 2017. As this acquisition occurred in the first quarter of 2017, the scope of our assessment of the effectiveness of internal control over financial reporting does not include this recent acquisition. This exclusion is in accordance with the SEC’s general guidance that an assessment of a recently acquired business may be omitted from our scope in the year of acquisition. Based on this evaluation, our president and chief executive officer and executive vice president, chief financial officer concluded that, as of March 4, 2017, our disclosure controls and procedures were effective.

For purposes of Rule 13a-15(e), the term disclosure controls and procedures means controls and other procedures of an issuer that are designed to ensure that information required to be disclosed by the issuer in the reports that it files or submits under the Exchange Act (15 U.S.C. 78a et seq.) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its president and chief executive officer and executive vice president, chief financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

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Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during our most recently completed fiscal quarter that have materially affected or are reasonably likely to materially affect our internal control over financial reporting, as defined in Rule 13a-15(f) under the Exchange Act.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

Environmental Matters 

From time to time, we become aware of compliance matters relating to, or receive notices from, federal, state or local entities regarding possible or alleged violations of environmental, health or safety laws and regulations. We review the circumstances of each individual site, considering the number of parties involved, the level of potential liability or our contribution relative to the other parties, the nature and magnitude of the hazardous substances involved, the method and extent of remediation, the estimated legal and consulting expense with respect to each site and the time period over which any costs would likely be incurred. Also, from time to time, we are identified as a potentially responsible party (“PRP”) under the Comprehensive Environmental Response, Compensation and Liability Act and/or similar state laws that impose liability for costs relating to the clean up of contamination resulting from past spills, disposal or other release of hazardous substances. We are also subject to similar laws in some of the countries where current and former facilities are located. Our environmental, health and safety department monitors compliance with applicable laws on a global basis. To the extent we can reasonably estimate the amount of our probable liabilities for environmental matters, we establish a financial provision. 

Currently we are involved in various environmental investigations, clean up activities and administrative proceedings and lawsuits. In particular, we are currently deemed a PRP in conjunction with numerous other parties, in a number of government enforcement actions associated with landfills and/or hazardous waste sites. As a PRP, we may be required to pay a share of the costs of investigation and clean up of these sites. In addition, we are engaged in environmental remediation and monitoring efforts at a number of current and former operating facilities. While uncertainties exist with respect to the amounts and timing of the ultimate environmental liabilities, based on currently available information, we have concluded that these matters, individually or in the aggregate, will not have a material adverse effect on our results of operations, financial condition or cash flow. However, adverse developments and/or periodic settlements could negatively impact the results of operations or cash flows in one or more future periods.

Other Legal Proceedings 

From time to time and in the ordinary course of business, we are a party to, or a target of, lawsuits, claims, investigations and proceedings, including product liability, personal injury, contract, patent and intellectual property, environmental, health and safety, tax and employment matters. While we are unable to predict the outcome of these matters, we have concluded, based upon currently available information, that the ultimate resolution of any pending matter, individually or in the aggregate, including the asbestos litigation described in the following paragraphs, will not have a material adverse effect on our results of operations, financial condition or cash flow.

We have been named as a defendant in lawsuits in which plaintiffs have alleged injury due to products containing asbestos manufactured more than 30 years ago. The plaintiffs generally bring these lawsuits against multiple defendants and seek damages (both actual and punitive) in very large amounts. In many cases, plaintiffs are unable to demonstrate that they have suffered any compensable injuries or that the injuries suffered were the result of exposure to products manufactured by us. We are typically dismissed as a defendant in such cases without payment. If the plaintiff presents evidence indicating that compensable injury occurred as a result of exposure to our products, the case is generally settled for an amount that reflects the seriousness of the injury, the length, intensity and character of exposure to products containing asbestos, the number and solvency of other defendants in the case, and the jurisdiction in which the case has been brought.

A significant portion of the defense costs and settlements in asbestos-related litigation is paid by third parties, including indemnification pursuant to the provisions of a 1976 agreement under which we acquired a business from a third party. Currently, this third party is defending and paying settlement amounts, under a reservation of rights, in most of the asbestos cases tendered to the third party.

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In addition to the indemnification arrangements with third parties, we have insurance policies that generally provide coverage for asbestos liabilities (including defense costs).  Historically, insurers have paid a significant portion of our defense costs and settlements in asbestos-related litigation. However, certain of our insurers are insolvent.  We have entered into cost-sharing agreements with our insurers that provide for the allocation of defense costs and settlements and judgments in asbestos-related lawsuits.  These agreements require, among other things, that we fund a share of settlements and judgments allocable to years in which the responsible insurer is insolvent.

A summary of the number of and settlement amounts for asbestos-related lawsuits and claims is as follows:

	Three Months Ended				3 Years Ended
($ in millions)	March 4, 2017		February 27, 2016		December 3, 2016
Lawsuits and claims settled		3		2		33
Settlement amounts	$	0.8	$	0.1	$	3.1
Insurance payments received or expected to be received	$	0.7	$	0.1	$	2.3

We do not believe that it would be meaningful to disclose the aggregate number of asbestos-related lawsuits filed against us because relatively few of these lawsuits are known to involve exposure to asbestos-containing products that we manufactured. Rather, we believe it is more meaningful to disclose the number of lawsuits that are settled and result in a payment to the plaintiff. To the extent we can reasonably estimate the amount of our probable liabilities for pending asbestos-related claims, we establish a financial provision and a corresponding receivable for insurance recoveries. 

Based on currently available information, we have concluded that the resolution of any pending matter, including asbestos-related litigation, individually or in the aggregate, will not have a material adverse effect on our results of operations, financial condition or cash flow.  However, adverse developments and/or periodic settlements could negatively impact the results of operations or cash flows in one or more future periods.

Item 1A. Risk Factors

This Form 10-Q contains forward-looking statements concerning our future programs, products, expenses, revenue, liquidity and cash needs as well as our plans and strategies. These forward-looking statements are based on current expectations and we assume no obligation to update this information. Numerous factors could cause actual results to differ significantly from the results described in these forward-looking statements, including the risk factors identified under Part I, Item 1A. Risk Factors contained in our Annual Report on Form 10-K for the fiscal year ended December 3, 2016. There have been no material changes in the risk factors disclosed by us under Part I, Item 1A. Risk Factors contained in the Annual Report on Form 10-K for the fiscal year ended December 3, 2016.

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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Issuer Purchases of Equity Securities

Information on our purchases of equity securities during the first quarter follows:

Period	(a) Total Number of Shares Purchased1		(b) Average Price Paid per Share		(d) Maximum Approximate Dollar Value of Shares that may yet be Purchased Under the Plan or Program (millions)
December 4, 2016 - January 7, 2017		534	$	46.44	$	24,036
January 8, 2017 - February 4, 2017		-	$	-	$	24,036
February 5, 2017 - March 4, 2017		50,153	$	47.96	$	24,036

¹   The total number of shares purchased relate to shares withheld to satisfy the employees’ withholding taxes upon vesting of restricted stock.

Repurchases of common stock are made to support our stock-based employee compensation plans and for other corporate purposes. Upon vesting of restricted stock awarded to employees, shares are withheld to cover the employees’ minimum withholding taxes.

In 2010, the Board of Directors authorized a new share repurchase program of up to $100.0 million of our outstanding common shares. Under the program, we are authorized to repurchase shares for cash on the open market, from time to time, in privately negotiated transactions or block transactions, or through an accelerated repurchase agreement. The timing of such repurchases is dependent on price, market conditions and applicable regulatory requirements. Upon repurchase of the shares, we reduced our common stock for the par value of the shares with the excess being applied against additional paid-in capital.

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Item 6. Exhibits

4.1 Indenture, dated February 14, 2017, between H.B. Fuller Company and U.S. Bank National Association, as Trustee (incorporated by reference to Exhibit 4.1 in H.B. Fuller’s Current Report on Form 8-K filed on February 14, 2017)

4.2 First Supplemental Indenture, dated February 14, 2017, between H.B. Fuller Company and U.S. Bank National Association, as Trustee, relating to the 4.000% Notes due 2027 (incorporated by reference to Exhibit 4.2 in H.B. Fuller’s Current Report on Form 8-K filed on February 14, 2017)

4.3	Form of Global Note representing the 4.000% Notes due 2027 (included in Exhibit 4.2) (incorporated by reference to Exhibit 4.3 in H.B. Fuller’s Current Report on Form 8-K filed on February 14, 2017)
10.1*	Employment Agreement between H.B. Fuller Benelux B.V. and P. Kivits fully executed on October 10, 2015

31.1 Form of 302 Certification –James J. Owens

31.2 Form of 302 Certification –John J. Corkrean

32.1 Form of 906 Certification –James J. Owens

32.2 Form of 906 Certification –John J. Corkrean

101 The following materials from the H.B. Fuller Company Quarterly Report on Form 10-Q for the quarter ended March 4, 2017 formatted in Extensible Business Reporting Language (XBRL): (i) the Condensed Consolidated Statements of Income, (ii) the Condensed Consolidated Statements of Comprehensive Income, (iii) the Condensed Consolidated Balance Sheets, (iv) the Condensed Consolidated Statements of Total Equity, (v) the Condensed Consolidated Statements of Cash Flows and (vi) the Notes to Condensed Consolidated Financial Statements.

* Management contract or compensatory plan or arrangement required to be filed.

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SIGNATURES

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 thereunto duly authorized.

	H.B. Fuller Company
Dated: March 31, 2017		/s/ John J. Corkrean
		John J. Corkrean
		Executive Vice President,
		Chief Financial Officer

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Exhibit Index

Exhibits

4.1 Indenture, dated February 14, 2017, between H.B. Fuller Company and U.S. Bank National Association, as Trustee (incorporated by reference to Exhibit 4.1 in H.B. Fuller’s Current Report on Form 8-K filed on February 14, 2017)

4.2 First Supplemental Indenture, dated February 14, 2017, between H.B. Fuller Company and U.S. Bank National Association, as Trustee, relating to the 4.000% Notes due 2027 (incorporated by reference to Exhibit 4.2 in H.B. Fuller’s Current Report on Form 8-K filed on February 14, 2017)

4.3 Form of Global Note representing the 4.000% Notes due 2027 (included in Exhibit 4.2) (incorporated by reference to Exhibit 4.3 in H.B. Fuller’s Current Report on Form 8-K filed on February 14, 2017)

10.1*	Employment Agreement between H.B. Fuller Benelux B.V. and P. Kivits fully executed on October 10, 2015
31.1	Form of 302 Certification – James J. Owens

31.2 Form of 302 Certification – John J. Corkrean

32.1 Form of 906 Certification –James J. Owens

32.2 Form of 906 Certification –John J. Corkrean

101 The following materials from the H.B. Fuller Company Quarterly Report on Form 10-Q for the quarter ended March 4, 2017 formatted in Extensible Business Reporting Language (XBRL): (i) the Condensed Consolidated Statements of Income, (ii) the Condensed Consolidated Statements of Comprehensive Income, (iii) the Condensed Consolidated Balance Sheets, (iv) the Condensed Consolidated Statements of Total Equity, (v) the Condensed Consolidated Statements of Cash Flows and (vi) the Notes to Condensed Consolidated Financial Statements.

* Management contract or compensatory plan or arrangement required to be filed. 

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EX-10.1

Exhibit 10.1

EMPLOYMENT AGREEMENT

PARTIES,

H.B. Fuller Benelux B.V., a private limited liability company, having its registered office at (1075 BD) Amsterdam on the Prins Hendriklaan 26, for the purposes hereof lawfully represented by Louise Cail HR Manager, hereinafter referred to as ‘Employer’,

and

Patrick Kivits, Boterbloemdreef 13, (6075 DK) Herkenbosch, date of birth 10^th October 1967

hereinafter referred to as ‘Employee’,

WHEREAS

- The stipulations and conditions in this employment agreement will replace any and all previous employment agreements which the Employee has entered into with the Employer, or its parent, H.B. Fuller Company, a Minnesota corporation having its headquarters at 1200 Willow Lake Boulevard, Vadnais Heights, MN 55110, USA, save for the stipulations and conditions detailed in the Offer of Employment Letter dated 24 August 2015 and a Supplemental Offer of Employment Letter dated 8 September 2015, the Change In Control Agreement entered with H.B. Fuller Company and the Severance Agreement and Non-Compete Agreement (Exhibit A to Severance Agreement) entered into with H.B. Fuller Company.

- The previous years of service of the Employee with the Employer, i.e. as of 14 September 2015, will be taken into account.

HAVE AGREED TO THE FOLLOWING

Article 1: Commencement, term and notice

1. The employment agreement will commence on 14 September 2015 (hereinafter: “Commencement Date”) and is entered into for an indefinite period of time.

2. Employee and Employer may terminate the employment agreement in writing as per the last day of a calendar month, subject to the statutory notice periods.

3. The employment contract will end in any event without notice being required on the day on which the Employee reaches state pension age.

Article 2: Position

1. Employee will hold the position of Senior Vice President, EIMEA. In this function, the Employee will report directly to H.B. Fuller Company’s President and Chief Executive Officer.

2. Employee, as Senior Vice President, EIMEA, will serve as an Executive Officer of H.B. Fuller Company.

3. The Employee covenants that the Employee will also perform duties other than those that are considered the usual duties, if such performance may be reasonably expected from the Employee.

4. The Employee will be required to perform work for a company affiliated with the Employer, should the Employer so demand.

1

Article 3: Working hours and workplace

1. The workweek will run from Monday to Friday. The working hours amount to 40 hours a week.

2. The Employee is expected to work during the Company’s normal business hours relevant to his Department. The Employee covenants that, at the Employer’s request, he will work overtime outside the normal working hours whenever a proper performance of his duties so requires. No remuneration will be paid for overtime.

3. The Employee will perform his duties based from his home office in Herkenbosch in accordance with the applicable Home Office Working Policy. The Employer may relocate the workplace if the company’s interests so require.

Article 4: Holidays

1. The Employee is entitled to 25 (twenty-five) days’ holiday per calendar year, on the basis of a 40-hour working week. If the Employee performed work during only a part of the year, the number of days’ holiday will be calculated proportionately. Holidays are taken with the Employer’s consent, which consent may not unreasonably be withheld.

2. The Employee will be required to take days’ holiday as much as possible in the year in which they are accrued, failing which the Employer will unilaterally determine when the Employee is to take them.

Article 5: Salary

1. The gross monthly base salary will be € 22,564.47. Salary is paid out at the end of each calendar month by transfer to the Employee's bank account.

2. The holiday allowance amounts to 8% (eight percent) of twelve times the gross monthly base salary. Holiday allowance is usually paid out in the month of May of the relevant year. The Employer reserves the right to amend payment dates. If the Employee was employed during only a part of the calendar year, the holiday allowance will be calculated and paid proportionately.

Article 6: 13th month and bonus entitlements

1. The Employee is entitled to a 13^th month-payment. The 13^th month is paid in December of the relevant year. The amount paid is based upon a full 12-month period (from January until December) and is equal to one gross monthly base salary (exclusive of holiday allowance). When the Employee has worked for less than a 12 month-period, the 13^th month payment will be paid out proportionately.

2. The Employee will participate in the applicable bonus schemes. The granting of the bonuses is at the Employer’s discretion. The Employee can in no event lay claim to a bonus that has not yet been granted. The granting of a bonus in any given year or during several years will not create a precedent for any subsequent years. The tax and social security consequences of participation in the bonus scheme will be at the Employee’s expense. The Employee will receive the gross bonus on condition that the Employee is in the Employer’s service on the date of payment of the bonus in accordance with the scheme in force.

Article 7: Health care insurance contribution

1. In accordance with Dutch Health Care Insurance Act (‘Zorgverzekeringswet’), the Employer will pay the Tax Authorities on behalf of the Employee the income-related contribution fixed by the authorities each year.

2. The Employer reserves the right to amend this Article unilaterally in the event of any amendment to the legislation on health insurance.

2

Article 8: Personal accident insurance policy

1. A personal accident insurance policy with employment coverage has been taken out on the Employee’s behalf. This policy exclusively applies to accidents that involve the insured party while performing work for the employer.

Article 9

1. As of the commencement date the Employee will participate in the disability benefit scheme (WIA-hiaat insurance) that currently applies. The Employer bears the costs associated with this scheme.

2. The Employer reserves the right to amend this Article unilaterally in the event of any amendment to the legislation and in the event the Employer has a legitimate interest in doing so that is of such a nature that the Employee’s interests, insofar as they are harmed by the amendment, in all reasonableness and fairness must yield to the Employer’s interest

Article 10: Illness

1. If the Employee is unable to perform the agreed work due to illness, the Employee will be obliged to inform the Employer thereof before 10 a.m. on the first day of illness, stating the expected period of illness and the correct address at which the Employee can be reached during that period. As soon as the Employee knows on what day the Employee will be able to resume work, the Employee will inform the Employer thereof immediately.

2. If the Employee is unfit to perform the agreed work due to illness, the Employee will remain entitled to continued payment of wages for a maximum period of 104 weeks or up to the date of termination of the employment contract if that date is earlier, on the basis of the following conditions:

● during the first 52 weeks of illness, the Employee remains entitled to 100% of the most recent gross base salary

● as of the 53rd week up to and including the 104th week of illness, the Employee remains entitled to 70% of the most recent gross base salary

Article 11: Pension

1. For the duration of the employment contract, the Employee will participate in the pension scheme if and as soon as the Employee meets the relevant requirements set out in the pension scheme rules.

2. The rights and obligations with respect to the pension provision are laid down in the pension plan, a copy of which can be obtained from the HR Department.

3. The costs of the pension plan will be borne jointly by the Employer and the Employee. The division of the costs is laid down in further detail in the pension plan. The Employee hereby authorises the Employer to withhold his contribution from the salary, to the extent possible in equal instalments upon each salary payment (if applicable). The Employer will arrange for payment of the total premium to the pension insurer.

4. The Employer may amend the pension scheme – and, consequently, the pension agreement – without the Employee’s consent if and insofar as it has a weighty interest in doing so that is of such a nature that the Employee’s interests, insofar as they are harmed by the amendment, in all reasonableness and fairness must yield to the Employer’s interest

Article 12: Lease car

1. For the performance of the Employee’s work, the Employer will place at the Employee’s disposal – in conformity with the conditions contained in the lease car scheme

3

2. The Employee’s private use of the lease car will be considered equivalent to wages in kind if it exceeds 500 kilometres in a calendar year. Consequently, the Employer will deduct the addition for private use of the lease car from the Employee’s gross salary in accordance with the rules and regulations currently in force. If the Employee’s private use of the lease car does not exceed 500 kilometres in a calendar year, no addition for private use of the lease car is due. The Employee must notify the Employer in advance if the anticipated private use of the lease car in a calendar year does not exceed 500 kilometres. The Employer will not deduct the addition for private use of the lease car upon receipt of a ‘Statement of no private use of lease car’ (Verklaring geen privégebruik auto), which the Employee must apply for in advance with the Dutch Tax and Customs Administration.

3. Upon termination of the employment contract or if the Employee has been placed in non-active service, the Employee will return the lease car to the Employer, together with the keys, papers and other accessories, in a good state of repair, should the Employer so demand. If the Employee is ill for a period exceeding three months, the Employer will be entitled to suspend the use of the lease car until the Employee resumes work.

Article 13: Confidentiality clause

1. Neither during the term of the employment agreement nor upon termination thereof may the Employee inform any third party in any form, directly or indirectly, of any particulars concerning or related to the business conducted by the Employer or its affiliated companies related to i) any confidential information or Know-How (as defined in this employment contract in the Article of this employment contract concerning Intellectual Property Rights) of which the Employee became aware in the performance of the work or during the term of this employment contract, or b) any technical, financial and business information and models, names of potential clients or partners, proposed transactions, reports, plans, market prognoses, computer software, databases, data, technical knowledge or other confidential proprietary information concerning the Employer’s business, regardless of whether such information includes any reference to its confidential nature or ownership and regardless of how the Employee learned of the particulars.

2. Other than for the benefit of the Employer within the scope of the normal work, the Employee may also not copy, compile, publish, merge, assemble or process information, products or systems of the Employer or disassemble, reproduce or decompile the source code of the computer software that is included in those products or systems or otherwise available on the Employer’s premises or attempt to deduce the source code of such software in any other manner.

3. Notwithstanding the provisions of Article 7:650(3), (4) and (5) of the Dutch Civil Code, if the Employee violates the confidentiality clause contained in this Article the Employee will forfeit to the Employer an immediately due and payable penalty of EUR 10,000 for each violation, as well as a penalty of EUR 250 for each day that the violation continues, without prejudice to the Employer’s right to claim full compensation instead of that penalty.

Article 14: Intellectual Property

1. All intellectual property rights, including but not limited to inventions, patent applications, patent rights, design rights, copyrights, neighbouring rights, database rights, trademark rights, chip rights, trade name rights and Know-How (as defined in paragraph 2 of this Article), ensuing in the Netherlands or abroad, during the term of this employment contract or after its termination, from or in the course of the work performed by the Employee (‘Intellectual Property Rights’) will exclusively vest in the Employer.

2. ‘Know-How’ is defined as any and all trade secrets, secret formulas, inventions, designs, standards, technical and other data or information, processes, methods, draft materials and business methods and any and all related information, knowledge, details, commercial practices and improvements.

3. Insofar as any Intellectual Property Rights are not vested in the Employer by operation of law, the Employee hereby transfers those rights to the Employer insofar as possible, which transfer is hereby accepted by the Employer. If and insofar as it is potentially impossible to transfer any future Intellectual Property Rights, the Employee covenants that the Employee will transfer those rights to the Employer should the Employer so demand and that the Employee will sign any and all documents to effect that transfer.

4

4. Insofar as any Intellectual Property Rights are incapable of being transferred from the Employee to the Employer, the Employee hereby grants the Employer the exclusive, royalty-free, worldwide, perpetual right, with the right to grant sublicenses, to use those Intellectual Property Rights in the broadest sense, which right is hereby accepted by the Employer.

5. Insofar as personality rights vest in the Employee, for example within the meaning of Section 25 of the Dutch Copyright Act (Auteurswet), the Employee hereby waives those rights to the extent permitted by law, including but not limited to the rights referred to in Section 25(1)(a), (b) and (c) of the Dutch Copyright Act (such as the right to have one’s name stated and the right to object to changes in the work).

6. The Employee will promptly disclose to the Employer all works, inventions, results, information and Intellectual Property Rights that ensue from the work under this employment contract and/or that are in any way relevant to the creation, protection and/or enforcement of the Intellectual Property Rights.

7. During the term of this employment contract and after its termination, the Employee will perform all acts that are necessary to register the Intellectual Property Rights in the Employer’s name with any competent authority in the world.

8. If the Employee is unable to provide the cooperation referred to in paragraphs 3 and 7 of this Article for any reason, the Employee hereby grants the Employer an irrevocable power of attorney to represent the Employee with respect to the transfer and registration of the Intellectual Property Rights referred to in paragraphs 3 and 7 of this Article, respectively.

9. The Employee acknowledges that the salary and/or pecuniary allowance the Employee receives already includes equitable compensation for the loss of Intellectual Property Rights, including the equitable compensation referred to in Section 12(6) of the Dutch Patents Act of 1995 (Rijksoctrooiwet 1995).

10. The Employee may neither during the term of this employment contract nor after its termination use the Intellectual Property Rights or the ensuing results, including but not limited to the documents in which they are recorded, for own use or for any purpose other than the performance of the work under this employment contract. All paragraph of this Article will remain in full force after the termination of the employment contract

Article 15: Personal data protection

1. The Employee acknowledges that the Employer processes his personal data for the performance of the employment contract and/or provisions ensuing from or in relation to the employment relationship.

2. The Employer processes the Employee’s personal data to comply with its statutory obligations, such as withholding wage tax and social insurance contributions, to maintain and improve effective personnel records, including payroll records and compliance with statutory obligations, to administer employee benefits, including insurance and pension provisions, and to administer programmes and plans with respect to training and development, job assessment, compensation, planning and organisation, all of the foregoing in the broadest sense.

3. For these purposes- and provided that the Employer has a legitimate interest in doing so- the Employer may also transfer the Employee’s personal data to third parties (including accountants, lawyers and advisers) and other companies of the Employer located in countries inside and outside the European Union.

5

4. The Employer will take the appropriate technical and organisational measures to ensure that the Employee’s personal data is secure, accurate and fully updated. The Employer will therefore ask the Employee from time to time to review and update the personal data it holds about him. The Employee will be entitled to contact the Employer with a reasonable request to review, correct, supplement, delete or block the Employee’s personal data. Furthermore, the Employee will promptly notify the Employer of any changes in the personal data.

5. In accordance with the Dutch Personal Data Protection Act (Wet Bescherming Persoonsgegevens), the Employer will hold the aforementioned information only for as long as it is appropriate with a view to the employment relationship between the parties or for as long as it is necessary to comply with any of its statutory obligations.

Article 16: Non-competition

1. During the term of this employment contract and for a period of 12 months after its termination, the Employee may not, without the Employer’s prior written consent, alone or with others, whether or not for consideration, in any way whatsoever:

a. perform work that competes with the business operations of the Employer or its group companies;

b. perform work for any business that competes with the Employer or its group companies;

c. incorporate, conduct or cause the conduct of a business that competes with the Employer or its group companies or take any interest in such business;

d. other than for the performance of this employment contract: maintain contact with or perform work for or with business relations of the Employer or its group companies, regardless of whether such contact is maintained or work is performed directly or indirectly or at the Employee’s own expense or at the expense of third parties; ‘business relations’ are all natural persons with whom and legal entities with which the Employer or its group companies maintained business relations at any given time during the 12-month period preceding the termination of the employment contract;

e. induce employees or contractors of the Employer or its group companies, either directly or indirectly, to terminate their employment contract or contract for services with the Employer or its group companies; or

f. with respect to contracts between the Employer or its group companies and suppliers to supply goods or services: directly or indirectly thwart the supply of such goods or services or induce a supplier, either directly or indirectly, to discontinue or refuse the supply of such goods or services to the Employer or its group companies.

2. The geographic scope of the restrictions set forth in Article 16.1 above is H.B. Fuller’s EIMEA Region, for which Employee is responsible for leading all business activities on behalf of H.B. Fuller through the performance of his duties as Senior Vice President, EIMEA.

3. Notwithstanding the provisions of Section 7:650(3), (4) and (5) of the Dutch Civil Code, if the Employee violates the non-competition clause contained in paragraph 1 of this Article, the Employee will forfeit to the Employer an immediately due and payable penalty of EUR 10,000 for each violation as well as a penalty of EUR 250 for each day that the violation continues, without prejudice to other (statutory) rights of the Employer (including to claim specific performance of the employment contract in addition to that penalty and full compensation instead of that penalty).

4. Upon each breach of paragraph 1 of this Article, the period of 12 months referred to in the first sentence of that paragraph will be extended by the duration of that violation, with a minimum of one month for each violation.

Article 17: Amendment to employment conditions

1. In accordance with Section 7:613 of the Dutch Civil Code, the Employer will be authorised to unilaterally amend the conditions contained in this employment contract if and insofar as it has a weighty interest in doing so that is of such a nature that the Employee’s interest, insofar as it is harmed by the amendment, in all reasonableness and fairness must yield to the Employer’s interest.

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Article 18: Applicable law

1. This employment contract is governed by the laws of the Netherlands.

Thus agreed upon, drawn up in duplicate and signed.

Date: 30th September 2015	Date: …10 Oct. 2015……..
Place:…Amsterdam………	Place: Herkenbosch, NL...
/s/ Louise Cail---------------------	/s/ P. Kivits-------------------------
H.B. Fuller Benelux B.V.	P. Kivits

7

H.B. Fuller Company
1200 Willow Lake Boulevard	Correspondence to:
St. Paul, Minnesota 55110-5101	P.O. Box 64683
Phone: (651) 236-5900	St. Paul, Minnesota 55164-0683

8^th September 2015                              

Patrick Kivits

Boterbloemdreef 13

6075 DK Herkenbosch

Netherlands

Dear Patrick,

In addition to the compensation and benefits offered to you in your employment contract and offer letter, I am very pleased to also offer to you the following that will remain in effect during your employment with H.B. Fuller in recognition of your role as Senior Vice President, EIMEA.

■ Health Insurance: Cover with IAK, ‘Compleet’ cover or similar, provided to you and your wife, plus both your children until they reach the age of 18.

■ Life Assurance: A fixed life assurance sum of €1,000,000 will be paid to your beneficiary in the event of your death while you are a H.B. Fuller employee. Please inform your HR Director of your wishes in relation to beneficiaries. This will take effective on acceptance from the life assurance company.

■ Netherlands School Fees: You will be reimbursed for secondary school fees paid to the International School Eindhoven for both your children. These fees are approximately €7,000 each year for each child. The fees will be paid up to age 18 for each child, inclusive of that academic year, directly to you on presentation of invoices paid.

■ Swiss School Fees: On relocation to Switzerland from your current Netherlands base, school tuition fees at the International School will be paid by H.B. Fuller for your children. These fees are approximately CHF 36,000 each year for each child. The fees will be paid up to age 18 for each child, inclusive of that academic year, directly to you on presentation of invoices paid.

Sincerely,

/s/ Jim Owens /s/ P. Kivits

Jim Owens

President and Chief Executive Officer

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EX-31.1

Exhibit 31.1

CERTIFICATION

I, James J. Owens, certify that:

1. I have reviewed this report on Form 10-Q of H.B. Fuller Company;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-115(e) and 15d-115(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d–15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

 Date: March 31, 2017

 /s/ James J. Owens

 James J. Owens

 President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

I, John J. Corkrean, certify that:

1. I have reviewed this report on Form 10-Q of H.B. Fuller Company;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-115(e) and 15d-115(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d–15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

 Date: March 31, 2017

 /s/ John J. Corkrean

 John J. Corkrean

 Executive Vice President, Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION

I, James J. Owens, in connection with the Quarterly Report of H.B. Fuller Company on Form 10-Q for the quarter ended March 4, 2017 (the “Report”), hereby certify that:

(a) the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)), and

(b) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of H.B. Fuller Company.

Date:   March 31, 2017

 /s/ James J. Owens

 James J. Owens

President and Chief Executive Officer

EX-32.2

Exhibit 32.2

CERTIFICATION

I, John J. Corkrean, in connection with the Quarterly Report of H.B. Fuller Company on Form 10-Q for the quarter ended March 4, 2017 (the “Report”), hereby certify that:

(a) the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)), and

(b) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of H.B. Fuller Company.

Date: March 31, 2017

 /s/ John J. Corkrean

 John J. Corkrean

Executive Vice President, Chief Financial Officer

XML

Document And Entity Information - shares	3 Months Ended
	Mar. 04, 2017	Mar. 24, 2017
Document Information [Line Items]
Entity Registrant Name	FULLER H B CO
Entity Central Index Key	0000039368
Trading Symbol	ful
Current Fiscal Year End Date	--12-02
Entity Filer Category	Large Accelerated Filer
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	Yes
Entity Common Stock, Shares Outstanding (in shares)		50,527,216
Document Type	10-Q
Document Period End Date	Mar. 04, 2017
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q1
Amendment Flag	false

XML

Condensed Consolidated Statements of Income (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 04, 2017	Feb. 27, 2016
Net revenue	$ 503,323	$ 474,326
Cost of sales	(364,327)	(336,721)
Gross profit	138,996	137,605
Selling, general and administrative expenses	(112,915)	(99,767)
Special charges, net		(413)
Other income (expense), net	621	(5,082)
Interest expense	(8,380)	(6,308)
Income from continuing operations before income taxes and income from equity method investments	18,322	26,035
Income taxes	(5,765)	(8,760)
Income from equity method investments	2,274	1,692
Net income including non-controlling interests	14,831	18,967
Net income attributable to non-controlling interests	(36)	(49)
Net income attributable to H.B. Fuller	$ 14,795	$ 18,918
Earnings per share attributable to H.B. Fuller common stockholders:
Basic (in dollars per share)	$ 0.29	$ 0.38
Diluted (in dollars per share)	$ 0.29	$ 0.37
Weighted-average common shares outstanding:
Basic (in shares)	50,243	49,958
Diluted (in shares)	51,460	50,995
Dividends declared per common share (in dollars per share)	$ 0.14	$ 0.13

XML

Condensed Consolidated Statements of Comprehesive Income (Loss) (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 04, 2017	Feb. 27, 2016
Net income including non-controlling interests	$ 14,831	$ 18,967
Other comprehensive (loss) income
Foreign currency translation	(10,519)	(950)
Defined benefit pension plans adjustment, net of tax	1,590	2,665
Interest rate swaps, net of tax	10	10
Cash-flow hedges, net of tax	129	249
Other comprehensive (loss) income	(8,790)	1,974
Comprehensive income	6,041	20,941
Less: Comprehensive income attributable to non-controlling interests	31	44
Comprehensive income attributable to H.B. Fuller	$ 6,010	$ 20,897

XML

Condensed Consolidated Balance Sheets (Current Period Unaudited) - USD ($) $ in Thousands	Mar. 04, 2017	Dec. 03, 2016
Current assets:
Cash and cash equivalents	$ 116,518	$ 142,245
Trade receivables (net of allowances of $12,427 and $12,310, as of March 4, 2017 and December 3, 2016, respectively)	358,145	351,130
Inventories	286,254	247,399
Other current assets	71,055	70,479
Total current assets	831,972	811,253
Property, plant and equipment	1,086,268	1,093,141
Accumulated depreciation	(576,333)	(577,866)
Property, plant and equipment, net	509,935	515,275
Goodwill	423,581	366,248
Other intangibles, net	243,598	205,359
Other assets	160,242	157,733
Total assets	2,169,328	2,055,868
Current liabilities:
Notes payable	47,120	37,334
Current maturities of long-term debt		80,178
Trade payables	181,460	162,964
Accrued compensation	45,105	52,444
Income taxes payable	7,812	7,985
Other accrued expenses	43,569	50,939
Total current liabilities	325,066	391,844
Long-term debt, excluding current maturities	757,661	585,759
Accrued pension liabilities	70,370	73,545
Other liabilities	66,466	62,174
Total liabilities	1,219,563	1,113,322
Commitments and contingencies (Note 16)
Redeemable non-controlling interest		4,277
H.B. Fuller stockholders' equity:
Preferred stock (no shares outstanding) shares authorized – 10,045,900
Common stock, par value $1.00 per share, shares authorized – 160,000,000, shares outstanding – 50,490,659 and 50,141,343, as of March 4, 2017 and December 3, 2016, respectively	50,491	50,141
Additional paid-in capital	71,758	59,564
Retained earnings	1,098,645	1,090,900
Accumulated other comprehensive loss	(271,514)	(262,729)
Total H.B. Fuller stockholders' equity	949,380	937,876
Non-controlling interests	385	393
Total equity	949,765	938,269
Total liabilities, redeemable non-controlling interest and total equity	$ 2,169,328	$ 2,055,868

XML

Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($) $ in Thousands	Mar. 04, 2017	Dec. 03, 2016
Allowance for doubtful accounts	$ 12,427	$ 12,310
Preferred stock, shares authorized (in shares)	10,045,900	10,045,900
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 1	$ 1
Common stock, shares authorized (in shares)	160,000,000	160,000,000
Common stock, shares outstanding (in shares)	50,490,659	50,141,343

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Condensed Consolidated Statements of Total Equity (Unaudited) - USD ($) $ in Thousands	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	AOCI Attributable to Parent [Member]	Noncontrolling Interest [Member]	Total
Balance at Nov. 28, 2015	$ 50,074	$ 55,522	$ 994,608	$ (227,284)	$ 406	$ 873,326
Comprehensive income (loss)			124,128	(35,445)	226	88,909
Dividends			(27,836)			(27,836)
Stock option exercises	519	10,750				11,269
Share-based compensation plans other, net	116	14,485				14,601
Tax benefit on share-based compensation plans		1,467				1,467
Repurchases of common stock	(568)	(22,660)				(23,228)
Redeemable non-controlling interest					(239)	(239)
Balance at Dec. 03, 2016	50,141	59,564	1,090,900	(262,729)	393	938,269
Comprehensive income (loss)			14,795	(8,785)	31	6,041
Dividends			(7,050)			(7,050)
Stock option exercises	261	8,288				8,549
Share-based compensation plans other, net	140	5,138				5,278
Tax benefit on share-based compensation plans		1,053				1,053
Repurchases of common stock	(51)	(2,379)				(2,430)
Redeemable non-controlling interest					(39)	(39)
Balance at Mar. 04, 2017	50,491	71,758	1,098,645	(271,514)	385	949,765
Purchase of redeemable non-controlling interest		$ 94				$ 94

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Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 04, 2017	Feb. 27, 2016
Cash flows from operating activities:
Net income including non-controlling interests	$ 14,831	$ 18,967
Adjustments to reconcile net income including non-controlling interests to net cash provided by operating activities:
Depreciation	11,945	13,258
Amortization	7,355	6,698
Deferred income taxes	(246)	63
Income from equity method investments, net of dividends received	(2,274)	(1,692)
(Gain)/loss on sale of assets	(95)
Share-based compensation	5,032	4,267
Excess tax benefit from share-based compensation	(1,053)	341
Non-cash loss on mark to market adjustment related to contingent consideration liability	37
Non-cash charge for the sale of inventories revalued at the date of acquisition	193
Trade receivables, net	4,884	28,947
Inventories	(32,597)	(15,861)
Other assets	3,960	9,298
Trade payables	23,989	(4,301)
Accrued compensation	(7,540)	(13,235)
Other accrued expenses	(8,089)	(5,258)
Income taxes payable	1,109	(5,673)
Accrued / prepaid pensions	(1,361)	662
Other liabilities	(1,754)	1,445
Other	(3,157)	(3,821)
Net cash provided by operating activities	16,459	42,561
Purchased property, plant and equipment	(19,899)	(23,361)
Purchased businesses, net of cash acquired	(123,305)
Purchased investments	(1,250)
Proceeds from sale of property, plant and equipment	109	863
Net cash used in investing activities	(144,345)	(22,498)
Proceeds from issuance of long-term debt	453,000
Repayment of long-term debt and payment of debt issuance costs	(356,610)	(5,625)
Net proceeds from notes payable	8,438	6,378
Dividends paid	(7,048)	(6,498)
Purchase of redeemable non-controlling interest	(3,127)
Proceeds from stock options exercised	8,549	32
Excess tax benefit from share-based compensation	1,053	(341)
Repurchases of common stock	(2,430)	(6,518)
Net cash provided by (used in) financing activities	101,825	(12,572)
Effect of exchange rate changes on cash and cash equivalents	334	112
Net change in cash and cash equivalents	(25,727)	7,603
Cash and cash equivalents at beginning of period	142,245	119,168
Cash and cash equivalents at end of period	116,518	126,771
Supplemental disclosure of cash flow information:
Dividends paid with company stock	2	64
Cash paid for interest, net of amount capitalized of $23 and $117 for the periods ended March 4, 2017 and February 27, 2016, respectively	6,979	5,566
Cash paid for income taxes, net of refunds	$ 6,539	$ 4,066

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Condensed Consolidated Statements of Cash Flows (Unaudited) (Parentheticals) - USD ($) $ in Thousands	3 Months Ended
	Mar. 04, 2017	Feb. 27, 2016
Capitalized interest costs	$ 23	$ 117

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Note 1 - Basis of Presentation

3 Months Ended

Mar. 04, 2017

Notes to Financial Statements

Nature of Operations [Text Block]

Note

1

:

Basis of Presentation

The accompanying unaudited interim Condensed Consolidated Financial Statements of H.B. Fuller Company and Subsidiaries have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and the instructions to Form

10

-Q and Article

10

of Regulation S-X. Accordingly, they do not include all of the information necessary for a fair presentation of results of operations, comprehensive income, financial position, and cash flows in conformity with U.S. generally accepted accounting principles. In our opinion, the unaudited interim Condensed Consolidated Financial Statements reflect all adjustments of a normal recurring nature considered necessary for the fair presentation of the results for the periods presented. Operating results for interim periods are not necessarily indicative of results that

may

be expected for the fiscal year as a whole.

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, and related disclosures at the date of the financial statements and during the reporting period. Actual results could differ from these estimates. These unaudited interim Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and Notes thereto included in our Annual Report on Form

10

-K for the year ended

December

3,

2016

as filed with the Securities and Exchange Commission.

On

December

4,

2016,

for our subsidiaries in Latin America, we changed the functional currency from the U.S. dollar to the entity’s local currency based on management’s analysis of the changes of the economic facts and circumstances in which these subsidiaries operate. The change in functional currency is accounted for prospectively from

December

4,

2016

and financial statements prior to and including the quarter ended

February

27,

2016

and the year ended

December

3,

2016

have not been restated for the change in functional currency.

Monetary assets and liabilities have been remeasured to the U.S. dollar at current exchange rates. Non-monetary assets (property, plant and equipment, net; goodwill; and intangible assets, net)

have been remeasured to reflect the difference between the exchange rate when the asset arose and the exchange rate on the date of the change in functional currency. As a result of this change in functional currency, we recorded an 

$11,317

cumulative translation adjustment included in other comprehensive loss for the quarter ended

March

4,

2017.

New Accounting Pronouncements

In

March

2017,

the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No.

2017

-

07,

 

Compensation—Retirement Benefits (Topic

715):

Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost,

which requires employers to include only the service cost component of net periodic pension cost and net periodic postretirement benefit cost in operating expenses. The other components of net benefit cost, including amortization of prior service cost/credit, and settlement and curtailment effects, are to be included in nonoperating expenses. The ASU also stipulates that only the service cost component of net benefit cost is eligible for capitalization.  Our effective date for adoption of this guidance is our fiscal year beginning

December

2,

2018

with early adoption permitted.  We are currently evaluating the effect that this guidance will have on our Consolidated Financial Statements.

In

February

2017,

the FASB issued ASU No.

2017

-

05,

 

Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic

610

-

20):

Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets.

 The ASU was issued to clarify the scope of the previous standard and to add guidance for partial sales of nonfinancial assets. Our effective date for adoption of this guidance is our fiscal year beginning

December

2,

2018.

 We have evaluated the effect that this guidance will have on our Consolidated Financial Statements and related disclosures and determined it will not have a material impact.

In

January

2017,

the FASB issued ASU No.

2017

-

04,

 

Intangibles—Goodwill and Other (Topic

350):

Simplifying the Test for Goodwill Impairment,

which removes Step

2

of the goodwill impairment test.  A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill.  Our effective date for prospective adoption of this guidance is our fiscal year beginning

November

29,

2020

with early adoption permitted. We will apply this guidance to applicable impairment tests after the adoption date.

In

January

2017,

the FASB issued ASU No.

2017

-

01,

Business Combinations (Topic

805):

Clarifying the Definition of a Business. 

This ASU clarifies the definition of a business when evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses.  Our effective date for prospective adoption of this guidance is our fiscal year beginning

December

2,

2018.

We will apply this guidance to applicable transactions after the adoption date.

In

November

2016,

the FASB issued ASU No.

2016

-

18,

Statement of Cash Flows (Topic

230):

Restricted Cash (a consensus of the FASB Emerging Issues Task Force).

This ASU requires that the reconciliation of the beginning-of-period and end-of-period amounts shown in the statement of cash flows include cash and restricted cash equivalents. Our effective date for adoption of this guidance is our fiscal year beginning

December

2,

2018.

We have evaluated the effect that this guidance will have on our Consolidated Financial Statements and related disclosures and determined it will not have a material impact.

In

October

2016,

the FASB issued ASU No.

2016

-

17,

Consolidation (Topic

810):

Interests Held through Related Parties That Are under Common Control.

This ASU changes how a decision maker treats indirect interests in a managed variable interest entity held through an entity under common control in its primary beneficiary (consolidation) analysis. Our effective date for adoption of this guidance is our fiscal year beginning

December

3,

2017.

We have evaluated the effect that this guidance will have on our Consolidated Financial Statements and related disclosures and determined it will not have a material impact.

In

October

2016,

the FASB issued ASU No.

2016

-

16,

Income Taxes (Topic

740):

Intra-Entity Transfers of Assets Other Than Inventory.

This ASU changes the timing of income tax recognition for an intercompany sale of assets. The ASU requires the seller’s tax effects and the buyer’s deferred taxes to be recognized immediately upon the sale instead of deferring accounting for the income tax implications until the assets are sold to a

third

party or recovered through use. Our effective date for adoption of this guidance is our fiscal year beginning

December

2,

2018.

We are currently evaluating the effect that this guidance will have on our Consolidated Financial Statements.

In

August

2016,

the FASB issued ASU No.

2016

-

15,

Statement of Cash Flows (Topic

230):

Classification of Certain Cash Receipts and Cash Payments (a consensus of the Emerging Issues Task Force).

This ASU requires changes in the presentation of certain items including but not limited to debt prepayment or debt extinguishment costs; contingent consideration payments made after a business combination; proceeds from the settlement of insurance claims; proceeds from the settlement of corporate-owned life insurance policies and distributions received from equity method investees. Our effective date for adoption of this guidance is our fiscal year beginning

December

2,

2018.

We are currently evaluating the effect that this guidance will have on our Consolidated Financial Statements.

In

June

2016,

the FASB ASU No.

2016

-

13

, Financial Instruments - Credit Losses (Topic

326),

Measurement of Credit Losses on Financial Statements.

This ASU requires a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial asset(s) to present the net carrying value at the amount expected to be collected on the financial asset. Our effective date for adoption of this guidance is our fiscal year beginning

November

29,

2020.

We are currently evaluating the effect that this guidance will have on our Consolidated Financial Statements.

In

March

2016,

the FASB issued ASU No.

2016

-

09,

Compensation - Stock Compensation (Topic

718),

Improvements to Employee Share-Based Payment Accounting.

This ASU provides simplification in the accounting for share-based payment transactions including the accounting for income taxes, forfeitures, statutory tax withholding requirements and classification in the statement of cash flows.

Our effective date for adoption of this guidance is our fiscal year beginning

December

3,

2017.

We are currently evaluating the effect that this guidance will have on our Consolidated Financial Statements.

In

March

2016,

the FASB issued ASU No.

2016

-

08,

Revenue from Contracts with Customers (Topic

606),

Principal versus Agent Considerations (Reporting Revenue Gross versus Net)

.  This ASU provides guidance on recording revenue on a gross basis versus a net basis based on the determination of whether an entity is a principal or an agent when another party is involved in providing goods or services to a customer.  The amendments in this ASU affect the guidance in ASU No.

2014

-

09

and are effective in the same timeframe as ASU No.

2014

-

09

as discussed below.

In

February

2016,

the FASB issued ASU No.

2016

-

02,

Leases (Subtopic

842).

This guidance changes accounting for leases and requires lessees to recognize the assets and liabilities arising from all leases, including those classified as operating leases under previous accounting guidance, on the balance sheet and requires disclosure of key information about leasing arrangements to increase transparency and comparability among organizations. Our effective date for adoption of this guidance is our fiscal year beginning

December

1,

2019

with early adoption permitted. The new guidance must be adopted using a modified retrospective transition approach, and provides for certain practical expedients. We are currently evaluating the impact that the new guidance will have on our Consolidated Financial Statements.

In

January

2016,

the FASB issued ASU No.

2016

-

01,

 

Financial Instruments - Overall (Subtopic

825

-

10):

Recognition and Measurement of Financial Assets and Financial Liabilities

, which requires that equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) are to be measured at fair value with changes in fair value recognized in net income. However, an entity

may

choose to measure equity investments that do not have readily determinable fair values at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. Furthermore, equity investments without readily determinable fair values are to be assessed for impairment using a quantitative approach.

Our effective date for adoption of this guidance is our fiscal year beginning

December

2,

2018.

We have evaluated the effect that this guidance will have on our Consolidated Financial Statements and related disclosures and determined it will not have a material impact.

In

July

2015,

the FASB issued ASU No.

2015

-

11,

 

Inventory (Topic

330):

Simplifying the Measurement of

Inventory

, which requires a company to measure inventory within the scope of this guidance (inventory measured using

first

-in,

first

-out (FIFO) or average cost) at the lower of cost and net realizable value methods. Subsequent measurement is unchanged for inventory measured using the last-in,

first

-out (LIFO) or retail inventory method. Our effective date for adoption of this guidance is our fiscal year beginning

December

3,

2017.

We have evaluated the effect that this guidance will have on our Consolidated Financial Statements and related disclosures and determined it will not have a material impact.

In

May

2014,

the FASB issued ASU No.

2014

-

09,

Revenue from Contracts with Customers (Topic

606),

which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. This guidance will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The new standard is effective for fiscal years and interim periods beginning after

December

15,

2017

(as stated in ASU No.

2015

-

14

which defers the effective date and was issued in

August

2015)

and is now effective for our fiscal year beginning

December

2,

2018.

Early application as of the original effective date is permitted under ASU

2015

-

14.

The standard permits the use of either the retrospective or cumulative effect transition method. We are currently evaluating the impact of the new guidance on the Consolidated Financial Statements. We have identified an implementation project team and related oversight processes and have commenced the assessment phase of the project. We have not concluded as to whether the new guidance will be adopted on a full or modified retrospective basis, but will not apply the early adoption provisions of the new guidance.

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Note 2 - Acquisitions

3 Months Ended

Mar. 04, 2017

Notes to Financial Statements

Business Combination Disclosure [Text Block]

Note

2:

Acquisitions

Wisdom Adhesives

On

January

27,

2017,

we acquired substantially all of the assets of H.E. Wisdom & Sons, Inc. and its affiliate Wisdom Adhesives Southeast, L.L.C., (“Wisdom Adhesives”) headquartered in Elgin, Illinois. Wisdom Adhesives is a provider of adhesives for the packaging, paper converting and assembly markets. The acquisition will help strengthen our position in the North America adhesives market.

The purchase price of

$123,305

was financed through borrowings on our revolving credit facility and was recorded in our Americas Adhesives operating segment. We incurred acquisition related costs of approximately

$547,

which were recorded as selling, general and administrative (“SG&A”) expenses in the Condensed Consolidated Statements of Income for the

three

months ended

March

4,

2017.

The acquisition fair value measurement was preliminary as of

March

4,

2017,

subject to the completion of the valuation of Wisdom Adhesives and further management reviews and assessment of the preliminary fair values of the assets acquired and liabilities assumed. We expect the fair value measurement process to be completed when the final appraisals are available, but no later than

twelve

months from the acquisition date.

The following table summarizes the preliminary fair value measurement of the assets acquired and liabilities assumed as of the date of acquisition:

	Amount
Current assets	$	13,729
Property, plant and equipment		10,516
Goodwill		60,313
Other intangibles
Customer relationships		33,300
Trademarks/trade names		13,600
Current liabilities		(8,153	)
Total purchase price	$	123,305

The preliminary expected lives of the acquired intangible assets are

15

years for customer relationships and

10

years for trademarks/trade names.

Based on the preliminary fair value measurement of the assets acquired and liabilities assumed, we allocated

$60,313

to goodwill for the expected synergies from combining Wisdom Adhesives with our existing business. Such goodwill is deductible for tax purposes. The goodwill was assigned to our Americas Adhesives operating segment. The Wisdom Adhesives acquisition does not represent a material business combination, therefore pro forma financial information is not provided.

Cyberbond

On

June

8,

2016,

we acquired Cyberbond, L.L.C., (“Cyberbond”) headquartered in Batavia, Illinois with operations in the United States and Europe. Cyberbond is a provider of industrial adhesives for the electronics, medical, audio equipment, automotive and structural markets. The acquisition will help us to broaden our global position and accelerate our growth in the high margin, high growth Engineering Adhesives segment.

The purchase price of

$42,182,

net of cash acquired of

$332,

was funded through existing cash and was recorded in our Engineering Adhesives operating segment. We incurred acquisition related costs of approximately

$527,

which were recorded as SG&A expenses in the Condensed Consolidated Statements of Income for the year ended

December

3,

 

2016.

The following table summarizes the final fair value measurement of the assets acquired and liabilities assumed as of the date of acquisition:

	Amount
Current assets	$	4,425
Property, plant and equipment		2,038
Goodwill		23,654
Other intangibles
Developed technology		2,000
Customer relationships		14,400
Trademarks/trade names		700
Other assets		161
Current liabilities		(1,889	)
Long-term liabilities		(3,307	)
Total purchase price	$	42,182

The expected lives of the acquired intangible assets are

seven

years for developed technology,

15

years for customer relationships and

10

years for trademarks/trade names.

Based on the fair value measurement of the assets acquired and liabilities assumed, we allocated

$23,654

to goodwill for the expected synergies from combining Cyberbond with our existing business. Such goodwill is not deductible for tax purposes. The goodwill was assigned to our Engineering Adhesives operating segment. The Cyberbond acquisition does not represent a material business combination, therefore pro forma financial information is not provided.

Advanced Adhesives

On

April

29,

2016,

we acquired Advanced Adhesives Pty Limited and the business assets of Advanced Adhesives (New Zealand) Limited (together referred to as “Advanced Adhesives”), providers of industrial adhesives in Australia and New Zealand. The acquisition will help us to strengthen our industrial adhesives market position and leverage a broader technology portfolio in both Australia and New Zealand. The combined purchase price of

$10,365

was funded through existing cash and was recorded in our Asia Pacific operating segment. We incurred acquisition related costs of approximately

$646,

which were recorded as SG&A expenses in the Condensed Consolidated Statements of Income for the year ended

December

3,

2016.

The following table summarizes the final fair value measurement of the assets acquired and liabilities assumed as of the date of acquisition:

	Amount
Current assets	$	5,704
Property, plant and equipment		594
Goodwill		102
Other intangibles
Customer relationships		7,575
Trademarks/trade names		146
Current liabilities		(2,671	)
Long-term liabilities		(1,085	)
Total purchase price	$	10,365

The expected lives of the acquired intangible assets are

15

years for customer relationships and

one

year for trademarks/trade names.

Based on the fair value measurement of the assets acquired and liabilities assumed, we allocated

$102

to goodwill for the expected synergies from combining Advanced Adhesives with our existing business. Such goodwill is not deductible for tax purposes. The goodwill was assigned to our Asia Pacific operating segment. The Advanced Adhesives acquisition does not represent a material business combination, therefore pro forma financial information is not provided.

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Note 3 - Restructuring Actions

3 Months Ended

Mar. 04, 2017

Notes to Financial Statements

Restructuring and Related Activities Disclosure [Text Block]

Note

3

:

Restructuring Actions

Business Integration Project

The integration of the industrial adhesives business we acquired in

March

2012

involved a significant amount of restructuring and capital investment to optimize the new combined entity. In addition, we took a series of actions in our existing EIMEA operating segment to improve the profitability and future growth prospects of this operating segment. We combined these

two

initiatives into a single project which we refer to as the “Business Integration Project.” During the

first

quarter ended

February

27,

2016,

we

incurred costs of

$413

related to transformation costs, workforce reduction costs, facility exit costs and other related costs for the Business Integration Project, which are included in special charges, net. The Business Integration Project was substantially complete at the end of

2016.

2017

Restructuring Plan

During the

first

quarter of

2017,

we approved a restructuring plan (the

“2017

Restructuring Plan”) related to organizational changes and other actions to optimize operations. The

2017

Restructuring Plan was implemented in the

first

quarter of

2017

and is currently expected to be completed by mid-year of fiscal

2018.

The

2017

Restructuring Plan resulted in a pre-tax charge of

$10,168

during the quarter ended

March

4,

2017.

The following table summarizes the pre-tax distribution of restructuring charges by income statement classification:

	Three Months Ended
	March 4, 2017
Cost of sales	$	3,647
Selling, general and administrative		6,521
	$	10,168

The following table summarizes the pre-tax impact of restructuring charges by segment:

	Three Months Ended
	March 4, 2017
Americas Adhesives	$	1,978
EIMEA		4,628
Asia Pacific		1,679
Construction Products		1,262
Engineering Adhesives		621
	$	10,168

A summary of the restructuring liability during the

first

quarter ended

March

4,

2017

is presented below:

	Employee-Related			Asset-Related			Other			Total
Balance at December 3, 2016	$	-			-			-			-
Expenses incurred		8,759			861			548			10,168
Non-cash charges		-			(417	)		-			(417	)
Cash payments		(4,479	)		(444	)		(210	)		(5,133	)
Foreign currency translation		(49	)		-			-			(49	)
Balance at March 4, 2017	$	4,231		$	-		$	338		$	4,569

Non-cash charges include accelerated depreciation resulting from the cessation of use of certain long-lived assets. Restructuring liabilities have been classified as a component of other accrued expenses on the Condensed Consolidated Balance Sheets.

XML

Note 4 -Inventories

3 Months Ended

Mar. 04, 2017

Notes to Financial Statements

Inventory Disclosure [Text Block]

Note

4:

Inventories

The composition of inventories is as follows:

	March 4,			December 3,
	2017			2016
Raw materials	$	133,615		$	116,200
Finished goods		164,471			142,397
LIFO reserve		(11,832	)		(11,198	)
Total inventories	$	286,254		$	247,399

XML

Note 5 - Goodwill and Other Intangible Assets

3 Months Ended

Mar. 04, 2017

Notes to Financial Statements

Goodwill and Intangible Assets Disclosure [Text Block]

Note

5

: Goodwill

and Other Intangible Assets

The goodwill activity for the quarter ended

March

4,

2017

is presented below:

	Americas							Asia			Construction		Engineering
	Adhesives				EIMEA			Pacific			Products		Adhesives			Total
Balance at December 3, 2016	$	59,821			$	98,876		$	17,481		$	21,901	$	168,169		$	366,248
Acquisitions		60,313		1		-			-			-		-			60,313
Currency impact		(1,676	)			(533	)		(8	)		1		(764	)		(2,980	)
Balance at March 4, 2017	$	118,458			$	98,343		$	17,473		$	21,902	$	167,405		$	423,581

1 Preliminary goodwill balance as of March 4, 2017.

Balances of amortizable identifiable intangible assets, excluding goodwill and other non-amortizable intangible assets, are as follows:

	March 4, 2017
Amortizable Intangible Assets	Purchased Technology & Patents			Customer Relationships			All Other			Total
Original cost	$	69,527		$	286,161		$	64,164		$	419,852
Accumulated amortization		(26,919	)		(118,071	)		(31,728	)		(176,718	)
Net identifiable intangibles	$	42,608		$	168,090		$	32,436		$	243,134

	December 3, 2016
Amortizable Intangible Assets	Purchased Technology & Patents			Customer Relationships			All Other			Total
Original cost	$	70,504		$	251,329		$	51,116		$	372,949
Accumulated amortization		(21,448	)		(116,411	)		(30,198	)		(168,057	)
Net identifiable intangibles	$	49,056		$	134,918		$	20,918		$	204,892

Amortization expense with respect to amortizable intangible assets was

$7,355

and

$6,698

for the

first

three

months of

2017

and

2016,

respectively.

Estimated aggregate amortization expense based on the current carrying value of amortizable intangible assets for the next

five

fiscal years are as follows:

	Remainder of
Fiscal Year	2017		2018		2019		2020		2021		Thereafter
Amortization Expense	$	24,749	$	32,076	$	29,910	$	27,534	$	26,088	$	102,777

Non-amortizable intangible assets as of

March

4,

2017

are

$464

and are related to trademarks and trade names.

XML

Note 6 - Long-term Debt

3 Months Ended

Mar. 04, 2017

Notes to Financial Statements

Debt Disclosure [Text Block]

Note

6:

Long-Term Debt

On

February

14,

2017,

we issued

$300,000

aggregate principal of

10

-year long-term unsecured public notes

(“4.000%

Notes”) due

February

15,

2027

with a fixed coupon of

4.00

percent. Proceeds from this debt issuance were used to repay

$138,000

outstanding under the revolving credit facility and prepay

$158,750

of our term loan. We entered into interest rate swap agreements to convert

$150,000

of the

$300,000

4.000%

Notes to a variable interest rate of

1

-month LIBOR (in advance) plus

1.86

percent. See Note

13

for further discussion of the interest rate swaps.

We adopted ASU No.

2015

-

03,

Interest-Imputation of Interest (Subtopic

835

-

30):

Simplifying the Presentation of Debt Issue Costs

, during the quarter ended

March

4,

2017

on a retrospective basis.  The impact of adopting ASU No.

2015

-

03

on our financial statements was the reclassification of deferred debt issuance costs related to our long-term debt, with the exception of our revolving credit line, from an asset to a direct deduction to the corresponding debt.  Reclassifications from an asset to a direct deduction to the corresponding debt of

$4,411

and

$2,386

were included in our Condensed Consolidated Balance Sheets as of

March

4,

2017

and

December

3,

2016,

respectively. 

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Note 7 - Redeemable Non-controlling Interest

3 Months Ended

Mar. 04, 2017

Notes to Financial Statements

Noncontrolling Interest Disclosure [Text Block]

Note

7:

Redeemable Non-Controlling Interest

We account for the non-controlling interest in H.B. Fuller Kimya Sanayi Ticaret A.S. (“HBF Kimya”) as a redeemable non-controlling interest because both the non-controlling shareholder and H.B. Fuller had an option, exercisable beginning

August

1,

2018,

to require the redemption of the shares owned by the non-controlling shareholder at a price determined by a formula based on

24

months trailing EBITDA. Since the option made the redemption of the non-controlling ownership shares of HBF Kimya outside of our control, these shares are classified as a redeemable non-controlling interest in temporary equity in the Condensed Consolidated Balance Sheets. The non-controlling shareholder was entitled to increase his ownership by

1

percent per year for

5

years up to a maximum of

13

percent ownership based on the achievement of profitability targets in each year. The option was subject to a minimum price of

€3,500.

The redemption value of the option, if it were currently redeemable, was estimated to be

€3,500.

The results of operations for the HBF Kimya non-controlling interest is consolidated in our financial statements. Both the non-controlling interest and the accretion adjustment to redemption value are included in net income attributable to non-controlling interests in the Condensed Consolidated Statements of Income and in the carrying value of the redeemable non-controlling interest on the Condensed Consolidated Balance Sheets. HBF Kimya’s functional currency is the Turkish lira and changes in exchange rates affect the reported amount of the redeemable non-controlling interest.

During the

first

quarter of

2017,

we entered into an agreement with the non-controlling shareholder to purchase the remaining shares for

€4,206.

The difference between the non-controlling interest balance and the purchase price was recorded in equity in the

first

quarter of

2017.

	Redeemable
	Non-Controlling
	Interest
Balance at December 3, 2016	$	4,277
Net income attributed to redeemable non-controlling interest		39
Purchase of redeemable non-controlling interest		(4,468	)
Foreign currency translation adjustment		152
Balance at March 4, 2017	$	-

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Note 8 - Accounting for Share-based Compensation

3 Months Ended

Mar. 04, 2017

Notes to Financial Statements

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

Note

8:

Accounting for Share-Based Compensation

Overview

 

We have various share-based compensation programs, which provide for equity awards including non-qualified stock options, restricted stock shares, restricted stock units, performance awards and deferred compensation. These equity awards fall under several plans and are described in detail in our Annual Report on Form

10

-K for the year ended

December

3,

2016.

Grant-Date Fair Value

We use the Black-Scholes option pricing model to calculate the grant-date fair value of an award. The fair value of options granted during the quarter ended

March

4,

2017

and

February

27,

2016

were calculated using the following weighted average assumptions:

	Three Months Ended
	March 4, 2017				February 27, 2016
Expected life (in years)			4.75				4.75
Weighted-average expected volatility			24.87%				29.03%
Expected volatility		24.84%	-	24.88%		29.03%	-	29.23%
Risk-free interest rate			1.89%				1.44%
Expected dividend yield			1.12%				1.56%
Weighted-average fair value of grants			$10.81				$7.64

Expected life – We use historical employee exercise and option expiration data to estimate the expected life assumption for the Black-Scholes grant-date valuation. We believe that this historical data is currently the best estimate of the expected term of a new option. We use a weighted-average expected life for all awards.

Expected volatility – Volatility is calculated using our stock’s historical volatility for the same period of time as the expected life. We have no reason to believe that our future volatility will differ materially from historical volatility.

Risk-free interest rate – The rate is based on the U.S. Treasury yield curve in effect at the time of the grant for the same period of time as the expected life.

Expected dividend yield – The calculation is based on the total expected annual dividend payout divided by the average stock price.

Expense

We use the straight-line attribution method to recognize share-based compensation expense for option awards, restricted stock shares and restricted stock units with graded and cliff vesting. Incentive stock options and performance awards are based on certain performance-based metrics and the expense is adjusted quarterly, based on our projections of the achievement of those metrics. The amount of share-based compensation expense recognized during a period is based on the value of the portion of the awards that are ultimately expected to vest. The expense is recognized over the requisite service period, which for us is the period between the grant date and the earlier of the award’s stated vesting term or the date the employee is eligible for early vesting based on the terms of the plans.

Total share-based compensation expense of

$5,032

and

$4,267

was included in our Condensed Consolidated Statements of Income for the

first

quarter ended

March

4,

2017

and

February

27,

2016,

respectively. All share-based compensation expense was recorded as SG&A expense. For the

first

quarter ended

March

4,

2017,

there was

$1,053

of excess tax benefit recognized. For the

first

quarter ended

February

27,

2016,

there was

$341

charged against the APIC pool for tax deficiencies.

As of

March

4,

2017,

there was

$11,388

of unrecognized compensation costs related to unvested stock option awards, which is expected to be recognized over a weighted-average period of

1.6

years. Unrecognized compensation costs related to unvested restricted stock units was

$18,035,

which is expected to be recognized over a weighted-average period of

1.7

years.

Stock Option Activity

The stock option activity for the quarter ended 

March

4,

2017

is presented below:

				Average
	Options			Exercise Price
Outstanding at December 3, 2016		2,986,481		$	34.92
Granted		683,425			49.95
Exercised		(261,346	)		32.71
Forfeited or cancelled		(66,589	)		36.68
Outstanding at March 4, 2017		3,341,971		$	38.13

The total fair value of options granted during the quarter ended

March

4,

2017

and

February

27,

2016

were

$7,384

and

$6,138,

respectively. Total intrinsic value of options exercised during the

first

quarter ended

March

4,

2017

and

February

27,

2016

were

$4,420

and

$11,

respectively. Intrinsic value is the difference between our closing stock price on the respective trading day and the exercise price, multiplied by the number of options exercised. Proceeds received from option exercises during the

first

quarter ended

March

4,

2017

and

February

27,

2016

was

$8,549

and

$32,

respectively.

Restricted Stock Activity

The nonvested restricted stock activity for the quarter ended

March

4,

2017

is presented below:

											Weighted-
									Weighted-		Average
									Average		Remaining
									Grant		Contractual
									Date Fair		Life
	Units			Shares		Total			Value		(in Years)
Nonvested at December 3, 2016		352,744			36,953		389,697		$	38.36		1.0
Granted		278,043			-		278,043			49.68		1.9
Vested		(137,891	)		(36,953)		(174,844	)		39.62		-
Forfeited		(16,095	)		-		(16,095	)		37.15		1.6
Nonvested at March 4, 2017		476,801			-		476,801		$	44.54		1.7

Total fair value of restricted stock vested during the

first

quarter ended

March

4,

2017

and

February

27,

2016

was

$6,941

and

$5,833,

respectively. The total fair value of nonvested restricted stock at

March

4,

2017

was

$21,214.

We repurchased

50,687

and

66,447

restricted stock shares during the

first

quarter ended

March

4,

2017

and

February

27,

2016,

respectively. The repurchases relate to statutory minimum tax withholding. 

Deferred Compensation Activity

We have a Directors’ Deferred Compensation plan that allows non-employee directors to defer all or a portion of their directors’ compensation in a number of investment choices, including units representing shares of our common stock. We also have a Key Employee Deferred Compensation Plan that allows key employees to defer a portion of their eligible compensation in a number of investment choices, including units, representing shares of our common stock. We provide a

10

percent match on deferred compensation invested into units, representing shares of our common stock. The deferred compensation units activity for the quarter ended

March

4,

2017

is presented below:

	Non-employee
	Directors			Employees			Total
Units outstanding December 3, 2016		424,319			41,116			465,435
Participant contributions		4,462			3,964			8,426
Company match contributions		446			397			843
Payouts		(13,818	)		(6,137	)		(19,955	)
Units outstanding March 4, 2017		415,409			39,340			454,749

Deferred compensation units are fully vested at the date of contribution.

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Note 9 - Components of Net Periodic Cost (Benefit) Related to Pension and Other Postretirement Benefit Plans

3 Months Ended

Mar. 04, 2017

Notes to Financial Statements

Pension and Other Postretirement Benefits Disclosure [Text Block]

Note

9:

Components of Net Periodic Cost (Benefit) related to Pension and Other Postretirement Benefit Plans

	Three Months Ended March 4, 2017 and February 27, 2016
													Other
	Pension Benefits												Postretirement
	U.S. Plans						Non-U.S. Plans						Benefits
Net periodic cost (benefit):	2017			2016			2017			2016			2017			2016
Service cost	$	28		$	27		$	508		$	480		$	52		$	84
Interest cost		3,603			3,767			1,144			1,367			398			480
Expected return on assets		(6,364	)		(6,077	)		(2,391	)		(2,482	)		(1,447	)		(1,342	)
Amortization:
Prior service cost		7			7			(1	)		(1	)		-			(10	)
Actuarial loss		1,307			1,293			842			752			253			532
Net periodic (benefit) cost	$	(1,419	)	$	(983	)	$	102		$	116		$	(744	)	$	(256	)

XML

Note 10 - Accumulated Other Comprehensive Income (Loss)

3 Months Ended

Mar. 04, 2017

Notes to Financial Statements

Accumulated Other Comprehensive Income (Loss) Disclosure [Text Block]

Note

10:

Accumulated Other Comprehensive Income (Loss)

The following table provides details of total comprehensive income (loss):

	Three Months Ended March 4, 2017												Three Months Ended February 27, 2016
	H.B. Fuller Stockholders									Non- controlling Interests			H.B. Fuller Stockholders									Non- controlling Interests
	Pre-tax			Tax			Net			Net			Pre-tax			Tax			Net			Net
Net income including non-controlling interests		-			-		$	14,795		$	36			-			-		$	18,918		$	49
Foreign currency translation adjustment ¹	$	(10,514	)		-			(10,514	)		(5	)	$	(945	)		-			(945	)		(5	)
Reclassification to earnings:
Defined benefit pension plans adjustment²		2,408		$	(818	)		1,590			-			3,997		$	(1,332	)		2,665			-
Interest rate swap ³		16			(6	)		10			-			13			(3	)		10			-
Cash-flow hedges ³		209			(80	)		129			-			403			(154	)		249			-
Other comprehensive income (loss)	$	(7,881	)	$	(904	)		(8,785	)		(5	)	$	3,468		$	(1,489	)		1,979			(5	)
Comprehensive income (loss)							$	6,010		$	31								$	20,897		$	44

¹

Income taxes are not provided for foreign currency translation relating to permanent investments in international subsidiaries. As discussed in Note

1,

the foreign currency translation adjustment for the quarter ended

March

4,

2017

includes the impact of the change in functional currency for our subsidiaries in Latin America.

²

Loss reclassified from accumulated other comprehensive income (“AOCI”) into earnings as part of net periodic cost related to pension and other postretirement benefit plans is reported in cost of sales, SG&A expense and special charges, net.

³

Loss reclassified from AOCI into earnings is reported in other income (expense), net.

The components of accumulated other comprehensive loss is as follows:

	March 4, 2017
	Total			H.B. Fuller Stockholders			Non- controlling Interests
Foreign currency translation adjustment	$	(95,966	)	$	(95,895	)	$	(71	)
Defined benefit pension plans adjustment, net of taxes of $89,916		(174,511	)		(174,511	)		-
Interest rate swap, net of taxes of ($23)		38			38			-
Cash-flow hedges, net of taxes of $705		(1,146	)		(1,146	)		-
Accumulated other comprehensive loss	$	(271,585	)	$	(271,514	)	$	(71	)

	December 3, 2016
	Total			H.B. Fuller Stockholders			Non- controlling Interests
Foreign currency translation adjustment	$	(85,447	)	$	(85,381	)	$	(66	)
Defined benefit pension plans adjustment, net of taxes of $90,734		(176,101	)		(176,101	)		-
Interest rate swap, net of taxes of ($17)		28			28			-
Cash-flow hedges, net of taxes of $785		(1,275	)		(1,275	)		-
Accumulated other comprehensive loss	$	(262,795	)	$	(262,729	)	$	(66	)

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Note 11 - Income Taxes

3 Months Ended

Mar. 04, 2017

Notes to Financial Statements

Income Tax Disclosure [Text Block]

Note

11

: Income Taxes

As of

March

4,

2017,

we had a liability of

$4,354

recorded under FASB ASC

740,

Income Taxes,

for gross unrecognized tax benefits (excluding interest), compared to

$4,165

as of

December

3,

2016.

As of

March

4,

2017,

we had accrued

$711

of gross interest relating to unrecognized tax benefits. For the quarter ended

March

4,

2017,

our recorded liability for gross unrecognized tax benefits increased by

$189.

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Note 12 - Earnings Per Share

3 Months Ended

Mar. 04, 2017

Notes to Financial Statements

Earnings Per Share [Text Block]

Note

12:

Earnings Per Share

A reconciliation of the common share components for the basic and diluted earnings per share calculations is as follows:

	Three Months Ended
	March 4,		February 27,
(Shares in thousands)	2017		2016
Weighted-average common shares - basic		50,243		49,958
Equivalent shares from share-based compensations plans		1,217		1,037
Weighted-average common and common equivalent shares - diluted		51,460		50,995

Basic earnings per share is calculated by dividing net income attributable to H.B. Fuller by the weighted-average number of common shares outstanding during the applicable period. Diluted earnings per share is based upon the weighted-average number of common and common equivalent shares outstanding during the applicable period. The difference between basic and diluted earnings per share is attributable to share-based compensation awards. We use the treasury stock method to calculate the effect of outstanding shares, which computes total employee proceeds as the sum of (a) the amount the employee must pay upon exercise of the award, (b) the amount of unearned share-based compensation costs attributed to future services and (c) the amount of tax benefits, if any, that would be credited to additional paid-in capital assuming exercise of the award. Share-based compensation awards for which total employee proceeds exceed the average market price over the applicable period have an antidilutive effect on earnings per share, and accordingly, are excluded from the calculation of diluted earnings per share.

Options to purchase

632,720

and

1,495,004

shares of common stock at a weighted-average exercise price of

$50.10

and

$42.88

for the quarters ended

March

4,

2017

and

February

27,

2016,

respectively, were excluded from the diluted earnings per share calculations because they were antidilutive. 

XML

Note 13 - Financial Instruments

3 Months Ended

Mar. 04, 2017

Notes to Financial Statements

Derivative Instruments and Hedging Activities Disclosure [Text Block]

Note

13:

Financial Instruments

Overview

As a result of being a global enterprise, our earnings, cash flows and financial position are exposed to foreign currency risk from foreign currency denominated receivables and payables.

We use foreign currency forward contracts, cross-currency swaps, and interest rate swaps to manage risks associated with foreign currency exchange rates and interest rates. We do not hold derivative financial instruments of a speculative nature or for trading purposes. We record derivatives as assets and liabilities on the balance sheet at fair value. Changes in fair value are recognized immediately in earnings unless the derivative qualifies and is designated as a hedge. Cash flows from derivatives are classified in the statement of cash flows in the same category as the cash flows from the items subject to designated hedge or undesignated (economic) hedge relationship. We evaluate hedge effectiveness at inception and on an ongoing basis. If a derivative is no longer expected to be effective, hedge accounting is discontinued. Hedge ineffectiveness, if any, is recorded in earnings.

We are exposed to credit risk in the event of nonperformance of counterparties for foreign currency forward exchange contracts and interest rate swap agreements. We select investment-grade multinational banks and financial institutions as counterparties for derivative transactions and monitors the credit quality of each of these banks on periodic basis as warranted. We do not anticipate nonperformance by any of these counterparties, and valuation allowances, if any, are

de

minimis.

Cash Flow H

e

dges

Effective

February

24,

2017,

we entered into a cross-currency swap agreement to convert a notional amount of

$42,600

of foreign currency denominated intercompany loans into U.S. dollars. The swap matures in

2020.

Effective

October

7,

2015,

we entered into

three

cross-currency swap agreements to convert a notional amount of

$134,736

of foreign currency denominated intercompany loans into U.S. dollars. The

first

swap matures in

2017,

the

second

swap matures in

2018

and the

third

swap matures in

2019.

As of

March

4,

2017,

the combined fair value of the swaps was an asset of

$4,971

and was included in other assets in the Condensed Consolidated Balance Sheets. The swaps were designated as cash-flow hedges for accounting treatment. The lesser amount between the cumulative change in the fair value of the actual swaps and the cumulative change in the fair value of hypothetical swaps is recorded in accumulated other comprehensive income (loss) in the Condensed Consolidated Balance Sheets. The difference between the cumulative change in the fair value of the actual swaps and the cumulative change in the fair value of hypothetical swaps are recorded as other income (expense), net in the Condensed Consolidated Statements of Income. In a perfectly effective hedge relationship, the

two

fair value calculations would exactly offset each other. Any difference in the calculation represents hedge ineffectiveness. The ineffectiveness calculations as of

March

4,

2017

resulted in additional pre-tax loss of

$20

for the

three

months ended

March

4,

2017

as the change in fair value of the cross-currency swaps was less than the change in the fair value of the hypothetical swaps. The amount in accumulated other comprehensive income (loss) related to cross-currency swaps was a loss of

$1,146

as of

March

4,

2017.

The estimated net amount of the existing loss that is reported in accumulated other comprehensive income (loss) as of

March

4,

2017

that is expected to be reclassified into earnings within the next

twelve

months is

$986.

As of

March

4,

2017,

we do not believe any gains or losses will be reclassified into earnings as a result of the discontinuance of these cash flow hedges because the original forecasted transaction will not occur.

The following table summarizes the cross-currency swaps outstanding as of

March

4,

2017:

	Fiscal Year of Expiration	Interest Rate			Notional Value		Fair Value
Pay EUR	2017		3.05	%	$	44,912	$	2,181
Receive USD			3.9145	%
Pay EUR	2018		3.45	%	$	44,912	$	1,750
Receive USD			4.5374	%
Pay EUR	2019		3.80	%	$	44,912	$	1,329
Receive USD			5.0530	%
Pay EUR	2020		1.95	%	$	42,600	$	(289	)
Receive USD			4.30375	%
Total					$	177,336	$	4,971

Except for the cross-currency swap agreements listed above, foreign currency derivative instruments outstanding are not designated as hedges for accounting purposes. The gains and losses related to mark-to-market adjustments are recognized as other income or expense in the Condensed Consolidated Statements of Income during the periods in which the derivative instruments are outstanding. See Note

14

for the fair value amounts of these derivative instruments.

As of

March

4,

2017,

we had forward foreign currency contracts maturing between

March

21,

2017

and

April

13,

2018.

The mark-to-market effect associated with these contracts, on a net basis, was a gain of

$3,117

as of 

March

4,

2017.

These gains were largely offset by the underlying transaction gains and losses resulting from the foreign currency exposures for which these contracts relate.

Fair Value Hedges

We entered into interest rate swap agreements to convert

$150,000

of our

$300,000

4.000%

Notes that were issued on

February

14,

2017

to a variable interest rate of

1

-month LIBOR (in advance) plus

1.86

percent. See Note 

6

for further discussion on the issuance of our

4.000%

Notes. The combined fair value of the interest rate swaps in total was a liability of

$3,135

at

March

4,

2017

and was included in other liabilities in the Condensed Consolidated Balance Sheets. The swaps were designated for hedge accounting treatment as fair value hedges. We are applying the shortcut method in accounting for these interest rate swaps as we expect that the changes in the fair value of the swap will offset the changes in the fair value of the

4.000%

Notes resulting in no ineffectiveness. As a result of applying the shortcut method, the change in the fair value of the interest rate swap and an equivalent amount for the change in the fair value of the debt will be reflected in other income (expense) and no ineffectiveness will be recognized in our Condensed Consolidated Statements of Income.

We have interest rate swap agreements to convert

$75,000

of our senior notes to variable interest rates. The change in fair value of the senior notes, attributable to the change in the risk being hedged, was a liability of

$1,107

at

March

4,

2017

and was included in long-term debt and current maturities of long-term debt in the Condensed Consolidated Balance Sheets. The combined fair value of the swaps in total was an asset of

$1,077

at

March

4,

2017

and

$1,579

at

December

3,

2016

and were included in other assets in the Condensed Consolidated Balance Sheets. The swaps were designated for hedge accounting treatment as fair value hedges. The changes in the fair value of the swap and the fair value of the senior notes attributable to the change in the risk being hedged are recorded as other income (expense), net in the Condensed Consolidated Statements of Income. In a perfectly effective hedge relationship, the

two

fair value calculations would exactly offset each other. Any difference in the calculation represents hedge ineffectiveness. For the

three

months ended

March

4,

2017

and

February

27,

2016,

a pre-tax gain of

$3

and

$143,

respectively, was recorded as the fair value of the interest rate swaps decreased by more than the change in the fair value of the Senior Notes attributable to the change in the risk being hedged.

Concentrations of credit risk with respect to trade accounts receivable are limited due to the large number of entities in the customer base and their dispersion across many different industries and countries. As of

March

4,

2017,

there were no significant concentrations of credit risk.

XML

Note 14 - Fair Value Measurements

3 Months Ended

Mar. 04, 2017

Notes to Financial Statements

Fair Value Disclosures [Text Block]

Note

14:

Fair Value Measurements

Overview

Estimates of fair value for financial assets and liabilities are based on the framework established in the accounting guidance for fair value measurements. The framework defines fair value, provides guidance for measuring fair value and requires certain disclosures. The framework discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow) and the cost approach (cost to replace the service capacity of an asset or replacement cost). The framework utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into

three

broad levels. The following is a brief description of those

three

levels:

● Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.

● Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly.  These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

● Level 3: Unobservable inputs that reflect management’s assumptions, and include situations where there is little, if any, market activity for the asset or liability.

Balances Measured at Fair Value on a Recurring Basis

The following table presents information about our financial assets and liabilities that are measured at fair value on a recurring basis as of

March

4,

2017

and

December

3,

2016,

and indicates the fair value hierarchy of the valuation techniques utilized to determine such fair value.

	March 4,		Fair Value Measurements Using:
Description	2017		Level 1		Level 2		Level 3
Assets:
Marketable securities	$	1,245	$	1,245	$	-	$	-
Foreign exchange contract assets		3,991		-		3,991		-
Interest rate swaps		1,077		-		1,077		-
Cash-flow hedges		5,260		-		5,260		-
Liabilities:
Foreign exchange contract liabilities	$	874	$	-	$	874	$	-
Interest rate swaps		3,135		-		3,135		-
Contingent consideration liability		4,706		-		-		4,706
Cash-flow hedges		289		-		289		-

	December 3,		Fair Value Measurements Using:
Description	2016		Level 1		Level 2		Level 3
Assets:
Marketable securities	$	1,020	$	1,020	$	-	$	-
Foreign exchange contract assets		11,697		-		11,697		-
Interest rate swaps		1,579		-		1,579		-
Cash-flow hedges		4,654		-		4,654		-
Liabilities:
Foreign exchange contract liabilities	$	6,925	$	-	$	6,925	$	-
Contingent consideration liability		4,720		-		-		4,720

Long-term debt had an estimated fair value of

$821,211

and

$693,283

as of

March

4,

2017

and

December

3,

2016,

respectively. The fair value of long-term debt is based on quoted market prices for the same or similar issues or on the current rates offered for debt of similar maturities. The estimated fair value of these long-term obligations is not necessarily indicative of the amount that would be realized in a current market exchange.

We use the income approach in calculating the fair value of our contingent consideration liability using a real option model with Level

3

inputs. The expected cash flows are affected by various significant judgments and assumptions, including revenue growth rates, profit margin percentages, volatility and discount rate, which are sensitive to change. Estimates of fair value are inherently uncertain and represent only management’s reasonable expectation regarding future developments. These estimates and the judgments and assumptions upon which the estimates are based will, in all likelihood, differ in some respects from actual future results. The contingent consideration liability activity for the quarter ended

March

4,

2017

is presented below:

		Amount
Balance at December 3, 2016	$	4,720
Mark to market adjustment		37
Foreign currency translation adjustment		(51	)
Balance at March 4, 2017	$	4,706

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Note 15 - Share Repurchase Program

3 Months Ended

Mar. 04, 2017

Notes to Financial Statements

Stockholders' Equity Note Disclosure [Text Block]

Note

15

: Share Repurchase Program

On

September

30,

2010,

the Board of Directors authorized a share repurchase program of up to

$100,000

of our outstanding common shares. Under the program, we are authorized to repurchase shares for cash on the open market, from time to time, in privately negotiated transactions or block transactions, or through an accelerated repurchase agreement. The timing of such repurchases is dependent on price, market conditions and applicable regulatory requirements. Upon repurchase of the shares, we reduced our common stock for the par value of the shares with the excess being applied against additional paid-in capital.

We did

not

repurchase any shares during the quarter ended

March

4,

2017

.

During the quarter ended

February

27,

2016,

we repurchased shares under this program, with an aggregate value of

$4,210.

Of this amount,

$125

reduced common stock and

$4,085

reduced additional paid-in capital.

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Note 16 - Commitments and Contingencies

3 Months Ended

Mar. 04, 2017

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

Note

16

: Commitments and Contingencies

Environmental Matters

 

From time to time, we become aware of compliance matters relating to, or receive notices from, federal, state or local entities regarding possible or alleged violations of environmental, health or safety laws and regulations. We review the circumstances of each individual site, considering the number of parties involved, the level of potential liability or our contribution relative to the other parties, the nature and magnitude of the hazardous substances involved, the method and extent of remediation, the estimated legal and consulting expense with respect to each site and the time period over which any costs would likely be incurred. Also, from time to time, we are identified as a potentially responsible party (“PRP”) under the Comprehensive Environmental Response, Compensation and Liability Act and/or similar state laws that impose liability for costs relating to the clean up of contamination resulting from past spills, disposal or other release of hazardous substances. We are also subject to similar laws in some of the countries where current and former facilities are located. Our environmental, health and safety department monitors compliance with applicable laws on a global basis. To the extent we can reasonably estimate the amount of our probable liabilities for environmental matters, we establish a financial provision. 

Currently we are involved in various environmental investigations, clean up activities and administrative proceedings and lawsuits. In particular, we are currently deemed a PRP in conjunction with numerous other parties, in a number of government enforcement actions associated with landfills and/or hazardous waste sites. As a PRP, we

may

be required to pay a share of the costs of investigation and clean up of these sites. In addition, we are engaged in environmental remediation and monitoring efforts at a number of current and former operating facilities. While uncertainties exist with respect to the amounts and timing of the ultimate environmental liabilities, based on currently available information, we have concluded that these matters, individually or in the aggregate, will not have a material adverse effect on our results of operations, financial condition or cash flow.

Other Legal Proceedings

 

From time to time and in the ordinary course of business, we are a party to, or a target of, lawsuits, claims, investigations and proceedings, including product liability, personal injury, contract, patent and intellectual property, environmental, health and safety, tax and employment matters. While we are unable to predict the outcome of these matters, we have concluded, based upon currently available information, that the ultimate resolution of any pending matter, individually or in the aggregate, including the asbestos litigation described in the following paragraphs, will not have a material adverse effect on our results of operations, financial condition or cash flow.

We have been named as a defendant in lawsuits in which plaintiffs have alleged injury due to products containing asbestos manufactured more than

30

years ago. The plaintiffs generally bring these lawsuits against multiple defendants and seek damages (both actual and punitive) in very large amounts. In many cases, plaintiffs are unable to demonstrate that they have suffered any compensable injuries or that the injuries suffered were the result of exposure to products manufactured by us. We are typically dismissed as a defendant in such cases without payment. If the plaintiff presents evidence indicating that compensable injury occurred as a result of exposure to our products, the case is generally settled for an amount that reflects the seriousness of the injury, the length, intensity and character of exposure to products containing asbestos, the number and solvency of other defendants in the case, and the jurisdiction in which the case has been brought.

A significant portion of the defense costs and settlements in asbestos-related litigation is paid by

third

parties, including indemnification pursuant to the provisions of a

1976

agreement under which we acquired a business from a

third

party. Currently, this

third

party is defending and paying settlement amounts, under a reservation of rights, in most of the asbestos cases

tendered

to the

third

party.

In addition to the indemnification arrangements with

third

parties, we have insurance policies that generally provide coverage for asbestos liabilities, including defense costs.  Historically, insurers have paid a significant portion of our defense costs and settlements in asbestos-related litigation. However, certain of our insurers are insolvent.  We have entered into cost-sharing agreements with our insurers that provide for the allocation of defense costs and settlements and judgments in asbestos-related lawsuits.  These agreements require, among other things, that we fund a share of settlements and judgments allocable to years in which the responsible insurer is insolvent

A summary of the number of and settlement amounts for asbestos-related lawsuits and claims is as follows:

	Three Months Ended				3 Years Ended
	March 4, 2017		February 27, 2016		December 3, 2016
Lawsuits and claims settled		3		2		33
Settlement amounts	$	833	$	75	$	3,061
Insurance payments received or expected to be received	$	685	$	56	$	2,253

We do not believe that it would be meaningful to disclose the aggregate number of asbestos-related lawsuits filed against us because relatively few of these lawsuits are known to involve exposure to asbestos-containing products that we manufactured. Rather, we believe it is more meaningful to disclose the number of lawsuits that are settled and result in a payment to the plaintiff. To the extent we can reasonably estimate the amount of our probable liabilities for pending asbestos-related claims, we establish a financial provision and a corresponding receivable for insurance recoveries. 

Based on currently available information, we have concluded that the resolution of any pending matter, including asbestos-related litigation, individually or in the aggregate, will not have a material adverse effect on our results of operations, financial condition or cash flow.

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Note 17 - Operating Segments

3 Months Ended

Mar. 04, 2017

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

Note

17

: Operating Segments

We are required to report segment information in the same way that we internally organize our business for assessing performance and making decisions regarding allocation of resources. For segment evaluation by the chief operating decision maker, segment operating income is identified as gross profit less SG&A expenses. Segment operating income excludes special charges, net. Corporate expenses are fully allocated to each operating segment. Corporate assets are not allocated to the operating segments. Inter-segment revenues are recorded at cost plus a markup for administrative costs. Operating results of each segment are regularly reviewed by our chief operating decision maker to make decisions about resources to be allocated to the segments and assess their performance.

The table below provides certain information regarding net revenue and segment operating income for each of our operating segments:

	Three Months Ended
	March 4, 2017							February 27, 2016
			Inter-		Segment					Inter-		Segment
	Trade		Segment		Operating			Trade		Segment		Operating
	Revenue		Revenue		Income (Loss)			Revenue		Revenue		Income
Americas Adhesives	$	193,162	$	3,860	$	21,033		$	183,319	$	3,630	$	26,259
EIMEA		124,039		3,522		1,797			124,291		5,271		6,163
Asia Pacific		62,645		1,269		1,879			53,860		951		3,753
Construction Products		57,046		162		(683	)		60,074		104		785
Engineering Adhesives		66,431		-		2,055			52,782		-		878
Total	$	503,323			$	26,081		$	474,326			$	37,838

Reconciliation of segment operating income to income before income taxes and income from equity method investments:

	Three Months Ended
	March 4,			February 27,
	2017			2016
Segment operating income	$	26,081		$	37,838
Special charges, net		-			(413	)
Other income (expense), net		621			(5,082	)
Interest expense		(8,380	)		(6,308	)
Income before income taxes and income from equity method investments	$	18,322		$	26,035

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Significant Accounting Policies (Policies)

3 Months Ended

Mar. 04, 2017

Accounting Policies [Abstract]

New Accounting Pronouncements, Policy [Policy Text Block]

The accompanying unaudited interim Condensed Consolidated Financial Statements of H.B. Fuller Company and Subsidiaries have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and the instructions to Form

10

-Q and Article

10

of Regulation S-X. Accordingly, they do not include all of the information necessary for a fair presentation of results of operations, comprehensive income, financial position, and cash flows in conformity with U.S. generally accepted accounting principles. In our opinion, the unaudited interim Condensed Consolidated Financial Statements reflect all adjustments of a normal recurring nature considered necessary for the fair presentation of the results for the periods presented. Operating results for interim periods are not necessarily indicative of results that

may

be expected for the fiscal year as a whole.

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, and related disclosures at the date of the financial statements and during the reporting period. Actual results could differ from these estimates. These unaudited interim Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and Notes thereto included in our Annual Report on Form

10

-K for the year ended

December

3,

2016

as filed with the Securities and Exchange Commission.

On

December

4,

2016,

for our subsidiaries in Latin America, we changed the functional currency from the U.S. dollar to the entity’s local currency based on management’s analysis of the changes of the economic facts and circumstances in which these subsidiaries operate. The change in functional currency is accounted for prospectively from

December

4,

2016

and financial statements prior to and including the quarter ended

February

27,

2016

and the year ended

December

3,

2016

have not been restated for the change in functional currency.

Monetary assets and liabilities have been remeasured to the U.S. dollar at current exchange rates. Non-monetary assets (property, plant and equipment, net; goodwill; and intangible assets, net)

have been remeasured to reflect the difference between the exchange rate when the asset arose and the exchange rate on the date of the change in functional currency. As a result of this change in functional currency, we recorded a 

$11.3

million cumulative translation adjustment included in other comprehensive loss for the quarter ended

March

4,

2017.

New Accounting Pronouncements

In

March

2017,

the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No.

2017

-

07,

 

Compensation—Retirement Benefits (Topic

715):

Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost,

which requires employers to include only the service cost component of net periodic pension cost and net periodic postretirement benefit cost in operating expenses. The other components of net benefit cost, including amortization of prior service cost/credit, and settlement and curtailment effects, are to be included in nonoperating expenses. The ASU also stipulates that only the service cost component of net benefit cost is eligible for capitalization.  Our effective date for adoption of this guidance is our fiscal year beginning

December

2,

2018

with early adoption permitted.  We are currently evaluating the effect that this guidance will have on our Consolidated Financial Statements.

In

February

2017,

the FASB issued ASU No.

2017

-

05,

 

Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic

610

-

20):

Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets.

 The ASU was issued to clarify the scope of the previous standard and to add guidance for partial sales of nonfinancial assets. Our effective date for adoption of this guidance is our fiscal year beginning

December

2,

2018.

 We have evaluated the effect that this guidance will have on our Consolidated Financial Statements and related disclosures and determined it will not have a material impact.

In

January

2017,

the FASB issued ASU No.

2017

-

04,

 

Intangibles—Goodwill and Other (Topic

350):

Simplifying the Test for Goodwill Impairment,

which removes Step

2

of the goodwill impairment test.  A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill.  Our effective date for prospective adoption of this guidance is our fiscal year beginning

November

29,

2020

with early adoption permitted. We will apply this guidance to applicable impairment tests after the adoption date.

In

January

2017,

the FASB issued ASU No.

2017

-

01,

Business Combinations (Topic

805):

Clarifying the Definition of a Business. 

This ASU clarifies the definition of a business when evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses.  Our effective date for prospective adoption of this guidance is our fiscal year beginning

December

2,

2018.

We will apply this guidance to applicable transactions after the adoption date.

In

November

2016,

the FASB issued ASU No.

2016

-

18,

Statement of Cash Flows (Topic

230):

Restricted Cash (a consensus of the FASB Emerging Issues Task Force).

This ASU requires that the reconciliation of the beginning-of-period and end-of-period amounts shown in the statement of cash flows include cash and restricted cash equivalents. Our effective date for adoption of this guidance is our fiscal year beginning

December

2,

2018.

We have evaluated the effect that this guidance will have on our Consolidated Financial Statements and related disclosures and determined it will not have a material impact.

In

October

2016,

the FASB issued ASU No.

2016

-

17,

Consolidation (Topic

810):

Interests Held through Related Parties That Are under Common Control.

This ASU changes how a decision maker treats indirect interests in a managed variable interest entity held through an entity under common control in its primary beneficiary (consolidation) analysis. Our effective date for adoption of this guidance is our fiscal year beginning

December

3,

2017.

We have evaluated the effect that this guidance will have on our Consolidated Financial Statements and related disclosures and determined it will not have a material impact.

In

October

2016,

the FASB issued ASU No.

2016

-

16,

Income Taxes (Topic

740):

Intra-Entity Transfers of Assets Other Than Inventory.

This ASU changes the timing of income tax recognition for an intercompany sale of assets. The ASU requires the seller’s tax effects and the buyer’s deferred taxes to be recognized immediately upon the sale instead of deferring accounting for the income tax implications until the assets are sold to a

third

party or recovered through use. Our effective date for adoption of this guidance is our fiscal year beginning

December

2,

2018.

We are currently evaluating the effect that this guidance will have on our Consolidated Financial Statements.

In

August

2016,

the FASB issued ASU No.

2016

-

15,

Statement of Cash Flows (Topic

230):

Classification of Certain Cash Receipts and Cash Payments (a consensus of the Emerging Issues Task Force).

This ASU requires changes in the presentation of certain items including but not limited to debt prepayment or debt extinguishment costs; contingent consideration payments made after a business combination; proceeds from the settlement of insurance claims; proceeds from the settlement of corporate-owned life insurance policies and distributions received from equity method investees. Our effective date for adoption of this guidance is our fiscal year beginning

December

2,

2018.

We are currently evaluating the effect that this guidance will have on our Consolidated Financial Statements.

In

June

2016,

the FASB ASU No.

2016

-

13

, Financial Instruments - Credit Losses (Topic

326),

Measurement of Credit Losses on Financial Statements.

This ASU requires a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial asset(s) to present the net carrying value at the amount expected to be collected on the financial asset. Our effective date for adoption of this guidance is our fiscal year beginning

November

29,

2020.

We are currently evaluating the effect that this guidance will have on our Consolidated Financial Statements.

In

March

2016,

the FASB issued ASU No.

2016

-

09,

Compensation - Stock Compensation (Topic

718),

Improvements to Employee Share-Based Payment Accounting.

This ASU provides simplification in the accounting for share-based payment transactions including the accounting for income taxes, forfeitures, statutory tax withholding requirements and classification in the statement of cash flows.

Our effective date for adoption of this guidance is our fiscal year beginning

December

3,

2017.

We are currently evaluating the effect that this guidance will have on our Consolidated Financial Statements.

In

March

2016,

the FASB issued ASU No.

2016

-

08,

Revenue from Contracts with Customers (Topic

606),

Principal versus Agent Considerations (Reporting Revenue Gross versus Net)

.  This ASU provides guidance on recording revenue on a gross basis versus a net basis based on the determination of whether an entity is a principal or an agent when another party is involved in providing goods or services to a customer.  The amendments in this ASU affect the guidance in ASU No.

2014

-

09

and are effective in the same timeframe as ASU No.

2014

-

09

as discussed below.

In

February

2016,

the FASB issued ASU No.

2016

-

02,

Leases (Subtopic

842).

This guidance changes accounting for leases and requires lessees to recognize the assets and liabilities arising from all leases, including those classified as operating leases under previous accounting guidance, on the balance sheet and requires disclosure of key information about leasing arrangements to increase transparency and comparability among organizations. Our effective date for adoption of this guidance is our fiscal year beginning

December

1,

2019

with early adoption permitted. The new guidance must be adopted using a modified retrospective transition approach, and provides for certain practical expedients. We are currently evaluating the impact that the new guidance will have on our Consolidated Financial Statements.

In

January

2016,

the FASB issued ASU No.

2016

-

01,

 

Financial Instruments - Overall (Subtopic

825

-

10):

Recognition and Measurement of Financial Assets and Financial Liabilities

, which requires that equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) are to be measured at fair value with changes in fair value recognized in net income. However, an entity

may

choose to measure equity investments that do not have readily determinable fair values at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. Furthermore, equity investments without readily determinable fair values are to be assessed for impairment using a quantitative approach.

Our effective date for adoption of this guidance is our fiscal year beginning

December

2,

2018.

We have evaluated the effect that this guidance will have on our Consolidated Financial Statements and related disclosures and determined it will not have a material impact.

In

July

2015,

the FASB issued ASU No.

2015

-

11,

 

Inventory (Topic

330):

Simplifying the Measurement of

Inventory

, which requires a company to measure inventory within the scope of this guidance (inventory measured using

first

-in,

first

-out (FIFO) or average cost) at the lower of cost and net realizable value methods. Subsequent measurement is unchanged for inventory measured using the last-in,

first

-out (LIFO) or retail inventory method. Our effective date for adoption of this guidance is our fiscal year beginning

December

3,

2017.

We have evaluated the effect that this guidance will have on our Consolidated Financial Statements and related disclosures and determined it will not have a material impact.

In

May

2014,

the FASB issued ASU No.

2014

-

09,

Revenue from Contracts with Customers (Topic

606),

which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. This guidance will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The new standard is effective for fiscal years and interim periods beginning after

December

15,

2017

(as stated in ASU No.

2015

-

14

which defers the effective date and was issued in

August

2015)

and is now effective for our fiscal year beginning

December

2,

2018.

Early application as of the original effective date is permitted under ASU

2015

-

14.

The standard permits the use of either the retrospective or cumulative effect transition method. We are currently evaluating the impact of the new guidance on the Consolidated Financial Statements. We have identified an implementation project team and related oversight processes and have commenced the assessment phase of the project. We have not concluded as to whether the new guidance will be adopted on a full or modified retrospective basis, but will not apply the early adoption provisions of the new guidance.

XML

Note 2 - Acquisitions (Tables)

3 Months Ended

Mar. 04, 2017

Advanced Adhesives Pty Limited and Advance Adhesives (New Zealand) [Member]

Notes Tables

Schedule of Business Acquisitions, by Acquisition [Table Text Block]

	Amount
Current assets	$	5,704
Property, plant and equipment		594
Goodwill		102
Other intangibles
Customer relationships		7,575
Trademarks/trade names		146
Current liabilities		(2,671	)
Long-term liabilities		(1,085	)
Total purchase price	$	10,365

Cyberbond LLC [Member]

Notes Tables

Schedule of Business Acquisitions, by Acquisition [Table Text Block]

	Amount
Current assets	$	4,425
Property, plant and equipment		2,038
Goodwill		23,654
Other intangibles
Developed technology		2,000
Customer relationships		14,400
Trademarks/trade names		700
Other assets		161
Current liabilities		(1,889	)
Long-term liabilities		(3,307	)
Total purchase price	$	42,182

H. E. Wisdom & Sons, Inc. and Wisdom Adhesives Southeast, LLC [Member]

Notes Tables

Schedule of Business Acquisitions, by Acquisition [Table Text Block]

	Amount
Current assets	$	13,729
Property, plant and equipment		10,516
Goodwill		60,313
Other intangibles
Customer relationships		33,300
Trademarks/trade names		13,600
Current liabilities		(8,153	)
Total purchase price	$	123,305

XML

Note 3 - Restructuring Actions (Tables)

3 Months Ended

Mar. 04, 2017

Notes Tables

Restructuring and Related Costs [Table Text Block]

	Three Months Ended
	March 4, 2017
Cost of sales	$	3,647
Selling, general and administrative		6,521
	$	10,168

Schedule of Restructuring Charges by Segment [Table Text Block]

	Three Months Ended
	March 4, 2017
Americas Adhesives	$	1,978
EIMEA		4,628
Asia Pacific		1,679
Construction Products		1,262
Engineering Adhesives		621
	$	10,168

Schedule of Restructuring Reserve by Type of Cost [Table Text Block]

	Employee-Related			Asset-Related			Other			Total
Balance at December 3, 2016	$	-			-			-			-
Expenses incurred		8,759			861			548			10,168
Non-cash charges		-			(417	)		-			(417	)
Cash payments		(4,479	)		(444	)		(210	)		(5,133	)
Foreign currency translation		(49	)		-			-			(49	)
Balance at March 4, 2017	$	4,231		$	-		$	338		$	4,569

XML

Note 4 -Inventories (Tables)

3 Months Ended

Mar. 04, 2017

Notes Tables

Schedule of Inventory, Current [Table Text Block]

	March 4,			December 3,
	2017			2016
Raw materials	$	133,615		$	116,200
Finished goods		164,471			142,397
LIFO reserve		(11,832	)		(11,198	)
Total inventories	$	286,254		$	247,399

XML

Note 5 - Goodwill and Other Intangible Assets (Tables)

3 Months Ended

Mar. 04, 2017

Notes Tables

Schedule of Acquired Finite-Lived Intangible Assets by Major Class [Table Text Block]

	March 4, 2017
Amortizable Intangible Assets	Purchased Technology & Patents			Customer Relationships			All Other			Total
Original cost	$	69,527		$	286,161		$	64,164		$	419,852
Accumulated amortization		(26,919	)		(118,071	)		(31,728	)		(176,718	)
Net identifiable intangibles	$	42,608		$	168,090		$	32,436		$	243,134

	December 3, 2016
Amortizable Intangible Assets	Purchased Technology & Patents			Customer Relationships			All Other			Total
Original cost	$	70,504		$	251,329		$	51,116		$	372,949
Accumulated amortization		(21,448	)		(116,411	)		(30,198	)		(168,057	)
Net identifiable intangibles	$	49,056		$	134,918		$	20,918		$	204,892

Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block]

	Remainder of
Fiscal Year	2017		2018		2019		2020		2021		Thereafter
Amortization Expense	$	24,749	$	32,076	$	29,910	$	27,534	$	26,088	$	102,777

Operating Segments [Member]

Notes Tables

Schedule of Goodwill [Table Text Block]

	Americas							Asia			Construction		Engineering
	Adhesives				EIMEA			Pacific			Products		Adhesives			Total
Balance at December 3, 2016	$	59,821			$	98,876		$	17,481		$	21,901	$	168,169		$	366,248
Acquisitions		60,313		1		-			-			-		-			60,313
Currency impact		(1,676	)			(533	)		(8	)		1		(764	)		(2,980	)
Balance at March 4, 2017	$	118,458			$	98,343		$	17,473		$	21,902	$	167,405		$	423,581

XML

Note 7 - Redeemable Non-controlling Interest (Tables)

3 Months Ended

Mar. 04, 2017

Notes Tables

Redeemable Noncontrolling Interest [Table Text Block]

	Redeemable
	Non-Controlling
	Interest
Balance at December 3, 2016	$	4,277
Net income attributed to redeemable non-controlling interest		39
Purchase of redeemable non-controlling interest		(4,468	)
Foreign currency translation adjustment		152
Balance at March 4, 2017	$	-

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Note 8 - Accounting for Share-based Compensation (Tables)

3 Months Ended

Mar. 04, 2017

Notes Tables

Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value [Table Text Block]

	Three Months Ended
	March 4, 2017				February 27, 2016
Expected life (in years)			4.75				4.75
Weighted-average expected volatility			24.87%				29.03%
Expected volatility		24.84%	-	24.88%		29.03%	-	29.23%
Risk-free interest rate			1.89%				1.44%
Expected dividend yield			1.12%				1.56%
Weighted-average fair value of grants			$10.81				$7.64

Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block]

				Average
	Options			Exercise Price
Outstanding at December 3, 2016		2,986,481		$	34.92
Granted		683,425			49.95
Exercised		(261,346	)		32.71
Forfeited or cancelled		(66,589	)		36.68
Outstanding at March 4, 2017		3,341,971		$	38.13

Schedule of Nonvested Restricted Stock Units Activity [Table Text Block]

											Weighted-
									Weighted-		Average
									Average		Remaining
									Grant		Contractual
									Date Fair		Life
	Units			Shares		Total			Value		(in Years)
Nonvested at December 3, 2016		352,744			36,953		389,697		$	38.36		1.0
Granted		278,043			-		278,043			49.68		1.9
Vested		(137,891	)		(36,953)		(174,844	)		39.62		-
Forfeited		(16,095	)		-		(16,095	)		37.15		1.6
Nonvested at March 4, 2017		476,801			-		476,801		$	44.54		1.7

Schedule of Deferred Compensation Arrangement with Individual, Share-based Payments [Table Text Block]

	Non-employee
	Directors			Employees			Total
Units outstanding December 3, 2016		424,319			41,116			465,435
Participant contributions		4,462			3,964			8,426
Company match contributions		446			397			843
Payouts		(13,818	)		(6,137	)		(19,955	)
Units outstanding March 4, 2017		415,409			39,340			454,749

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Note 9 - Components of Net Periodic Cost (Benefit) Related to Pension and Other Postretirement Benefit Plans (Tables)

3 Months Ended

Mar. 04, 2017

Notes Tables

Schedule of Net Benefit Costs [Table Text Block]

	Three Months Ended March 4, 2017 and February 27, 2016
													Other
	Pension Benefits												Postretirement
	U.S. Plans						Non-U.S. Plans						Benefits
Net periodic cost (benefit):	2017			2016			2017			2016			2017			2016
Service cost	$	28		$	27		$	508		$	480		$	52		$	84
Interest cost		3,603			3,767			1,144			1,367			398			480
Expected return on assets		(6,364	)		(6,077	)		(2,391	)		(2,482	)		(1,447	)		(1,342	)
Amortization:
Prior service cost		7			7			(1	)		(1	)		-			(10	)
Actuarial loss		1,307			1,293			842			752			253			532
Net periodic (benefit) cost	$	(1,419	)	$	(983	)	$	102		$	116		$	(744	)	$	(256	)

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Note 10 - Accumulated Other Comprehensive Income (Loss) (Tables)

3 Months Ended

Mar. 04, 2017

Notes Tables

Comprehensive Income (Loss) [Table Text Block]

	Three Months Ended March 4, 2017												Three Months Ended February 27, 2016
	H.B. Fuller Stockholders									Non- controlling Interests			H.B. Fuller Stockholders									Non- controlling Interests
	Pre-tax			Tax			Net			Net			Pre-tax			Tax			Net			Net
Net income including non-controlling interests		-			-		$	14,795		$	36			-			-		$	18,918		$	49
Foreign currency translation adjustment ¹	$	(10,514	)		-			(10,514	)		(5	)	$	(945	)		-			(945	)		(5	)
Reclassification to earnings:
Defined benefit pension plans adjustment²		2,408		$	(818	)		1,590			-			3,997		$	(1,332	)		2,665			-
Interest rate swap ³		16			(6	)		10			-			13			(3	)		10			-
Cash-flow hedges ³		209			(80	)		129			-			403			(154	)		249			-
Other comprehensive income (loss)	$	(7,881	)	$	(904	)		(8,785	)		(5	)	$	3,468		$	(1,489	)		1,979			(5	)
Comprehensive income (loss)							$	6,010		$	31								$	20,897		$	44

Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block]

	March 4, 2017
	Total			H.B. Fuller Stockholders			Non- controlling Interests
Foreign currency translation adjustment	$	(95,966	)	$	(95,895	)	$	(71	)
Defined benefit pension plans adjustment, net of taxes of $89,916		(174,511	)		(174,511	)		-
Interest rate swap, net of taxes of ($23)		38			38			-
Cash-flow hedges, net of taxes of $705		(1,146	)		(1,146	)		-
Accumulated other comprehensive loss	$	(271,585	)	$	(271,514	)	$	(71	)

	December 3, 2016
	Total			H.B. Fuller Stockholders			Non- controlling Interests
Foreign currency translation adjustment	$	(85,447	)	$	(85,381	)	$	(66	)
Defined benefit pension plans adjustment, net of taxes of $90,734		(176,101	)		(176,101	)		-
Interest rate swap, net of taxes of ($17)		28			28			-
Cash-flow hedges, net of taxes of $785		(1,275	)		(1,275	)		-
Accumulated other comprehensive loss	$	(262,795	)	$	(262,729	)	$	(66	)

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Note 12 - Earnings Per Share (Tables)

3 Months Ended

Mar. 04, 2017

Notes Tables

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

	Three Months Ended
	March 4,		February 27,
(Shares in thousands)	2017		2016
Weighted-average common shares - basic		50,243		49,958
Equivalent shares from share-based compensations plans		1,217		1,037
Weighted-average common and common equivalent shares - diluted		51,460		50,995

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Note 13 - Financial Instruments (Tables)

3 Months Ended

Mar. 04, 2017

Notes Tables

Schedule of Derivative Instruments in Statement of Financial Position, Fair Value [Table Text Block]

	Fiscal Year of Expiration	Interest Rate			Notional Value		Fair Value
Pay EUR	2017		3.05	%	$	44,912	$	2,181
Receive USD			3.9145	%
Pay EUR	2018		3.45	%	$	44,912	$	1,750
Receive USD			4.5374	%
Pay EUR	2019		3.80	%	$	44,912	$	1,329
Receive USD			5.0530	%
Pay EUR	2020		1.95	%	$	42,600	$	(289	)
Receive USD			4.30375	%
Total					$	177,336	$	4,971

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Note 14 - Fair Value Measurements (Tables)

3 Months Ended

Mar. 04, 2017

Notes Tables

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block]

	March 4,		Fair Value Measurements Using:
Description	2017		Level 1		Level 2		Level 3
Assets:
Marketable securities	$	1,245	$	1,245	$	-	$	-
Foreign exchange contract assets		3,991		-		3,991		-
Interest rate swaps		1,077		-		1,077		-
Cash-flow hedges		5,260		-		5,260		-
Liabilities:
Foreign exchange contract liabilities	$	874	$	-	$	874	$	-
Interest rate swaps		3,135		-		3,135		-
Contingent consideration liability		4,706		-		-		4,706
Cash-flow hedges		289		-		289		-

	December 3,		Fair Value Measurements Using:
Description	2016		Level 1		Level 2		Level 3
Assets:
Marketable securities	$	1,020	$	1,020	$	-	$	-
Foreign exchange contract assets		11,697		-		11,697		-
Interest rate swaps		1,579		-		1,579		-
Cash-flow hedges		4,654		-		4,654		-
Liabilities:
Foreign exchange contract liabilities	$	6,925	$	-	$	6,925	$	-
Contingent consideration liability		4,720		-		-		4,720

Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block]

		Amount
Balance at December 3, 2016	$	4,720
Mark to market adjustment		37
Foreign currency translation adjustment		(51	)
Balance at March 4, 2017	$	4,706

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Note 16 - Commitments and Contingencies (Tables)

3 Months Ended

Mar. 04, 2017

Notes Tables

Schedule of Loss Contingencies by Contingency [Table Text Block]

	Three Months Ended				3 Years Ended
	March 4, 2017		February 27, 2016		December 3, 2016
Lawsuits and claims settled		3		2		33
Settlement amounts	$	833	$	75	$	3,061
Insurance payments received or expected to be received	$	685	$	56	$	2,253

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Note 17 - Operating Segments (Tables)

3 Months Ended

Mar. 04, 2017

Notes Tables

Schedule of Segment Reporting Information, by Segment [Table Text Block]

	Three Months Ended
	March 4, 2017							February 27, 2016
			Inter-		Segment					Inter-		Segment
	Trade		Segment		Operating			Trade		Segment		Operating
	Revenue		Revenue		Income (Loss)			Revenue		Revenue		Income
Americas Adhesives	$	193,162	$	3,860	$	21,033		$	183,319	$	3,630	$	26,259
EIMEA		124,039		3,522		1,797			124,291		5,271		6,163
Asia Pacific		62,645		1,269		1,879			53,860		951		3,753
Construction Products		57,046		162		(683	)		60,074		104		785
Engineering Adhesives		66,431		-		2,055			52,782		-		878
Total	$	503,323			$	26,081		$	474,326			$	37,838

Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Table Text Block]

	Three Months Ended
	March 4,			February 27,
	2017			2016
Segment operating income	$	26,081		$	37,838
Special charges, net		-			(413	)
Other income (expense), net		621			(5,082	)
Interest expense		(8,380	)		(6,308	)
Income before income taxes and income from equity method investments	$	18,322		$	26,035

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Note 1 - Basis of Presentation (Details Textual) $ in Thousands	3 Months Ended
	Mar. 04, 2017 USD ($)
Cumulative Transalation Adjustment Due to Change in Functional Currency	$ (11,317)

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Note 2 - Acquisitions (Details Textual) - USD ($) $ in Thousands	Jan. 27, 2017	Jun. 08, 2016	Apr. 29, 2016	Mar. 04, 2017	Dec. 03, 2016
Goodwill				$ 423,581	$ 366,248
H. E. Wisdom & Sons, Inc. and Wisdom Adhesives Southeast, LLC [Member]
Payments to Acquire Businesses, Gross	$ 123,305
Goodwill	$ 60,313	$ 23,654
H. E. Wisdom & Sons, Inc. and Wisdom Adhesives Southeast, LLC [Member] | Customer Relationships [Member]
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life	15 years
H. E. Wisdom & Sons, Inc. and Wisdom Adhesives Southeast, LLC [Member] | Trademarks and Trade Names [Member]
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life	10 years
H. E. Wisdom & Sons, Inc. and Wisdom Adhesives Southeast, LLC [Member] | Selling, General and Administrative Expenses [Member]
Business Combination, Acquisition Related Costs	$ 547
Cyberbond LLC [Member]
Payments to Acquire Businesses, Gross		42,182
Goodwill		23,654
Cash Acquired from Acquisition		$ 332
Cyberbond LLC [Member] | Customer Relationships [Member]
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life		15 years
Cyberbond LLC [Member] | Trademarks and Trade Names [Member]
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life		10 years
Cyberbond LLC [Member] | Developed Technology Rights [Member]
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life		7 years
Cyberbond LLC [Member] | Selling, General and Administrative Expenses [Member]
Business Combination, Acquisition Related Costs		$ 527
Advanced Adhesives Pty Limited and Advance Adhesives (New Zealand) [Member]
Payments to Acquire Businesses, Gross			$ 10,365
Goodwill			$ 102
Advanced Adhesives Pty Limited and Advance Adhesives (New Zealand) [Member] | Customer Relationships [Member]
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life			15 years
Advanced Adhesives Pty Limited and Advance Adhesives (New Zealand) [Member] | Trademarks and Trade Names [Member]
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life			1 year
Advanced Adhesives Pty Limited and Advance Adhesives (New Zealand) [Member] | Selling, General and Administrative Expenses [Member]
Business Combination, Acquisition Related Costs			$ 646

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Note 2 - Acquisitions and Divestitures - Purchase Price Allocation of Assets and Liabilities Assumed of Wisdom Adhesives (Details) - USD ($) $ in Thousands	Mar. 04, 2017	Jan. 27, 2017	Dec. 03, 2016	Jun. 08, 2016
Goodwill	$ 423,581		$ 366,248
H. E. Wisdom & Sons, Inc. and Wisdom Adhesives Southeast, LLC [Member]
Current assets		$ 13,729
Property, plant and equipment		10,516
Goodwill		60,313		$ 23,654
Current liabilities		(8,153)
Total purchase price		123,305
H. E. Wisdom & Sons, Inc. and Wisdom Adhesives Southeast, LLC [Member] | Customer Relationships [Member]
Other intangibles		33,300
H. E. Wisdom & Sons, Inc. and Wisdom Adhesives Southeast, LLC [Member] | Trademarks and Trade Names [Member]
Other intangibles		$ 13,600

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Note 2 - Acquisitions and Divestitures - Purchase Price Allocation of Assets and Liabilities Assumed of Cyberbond (Details) - USD ($) $ in Thousands	Mar. 04, 2017	Dec. 03, 2016	Jun. 08, 2016	Apr. 29, 2016
Goodwill	$ 423,581	$ 366,248
Cyberbond LLC [Member]
Current assets			$ 4,425
Property, plant and equipment			2,038
Goodwill			23,654
Cyberbond LLC [Member] | Developed Technology Rights [Member]
Other intangibles			2,000
Advanced Adhesives Pty Limited and Advance Adhesives (New Zealand) [Member]
Current assets				$ 5,704
Property, plant and equipment				594
Goodwill				102
Other assets			161
Current liabilities			(1,889)	(2,671)
Long-term liabilities			(3,307)	(1,085)
Total purchase price			42,182
Advanced Adhesives Pty Limited and Advance Adhesives (New Zealand) [Member] | Customer Relationships [Member]
Other intangibles			14,400	7,575
Advanced Adhesives Pty Limited and Advance Adhesives (New Zealand) [Member] | Trademarks and Trade Names [Member]
Other intangibles			$ 700	$ 146

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Note 2 - Acquisitions and Divestitures - Purchase Price Allocation of Assets and Liabilities Assumed of Advanced Adhesives (Details) - USD ($) $ in Thousands	Mar. 04, 2017	Dec. 03, 2016	Jun. 08, 2016	Apr. 29, 2016
Goodwill	$ 423,581	$ 366,248
Advanced Adhesives Pty Limited and Advance Adhesives (New Zealand) [Member]
Current assets				$ 5,704
Property, plant and equipment				594
Goodwill				102
Current liabilities			$ (1,889)	(2,671)
Long-term liabilities			(3,307)	(1,085)
Total purchase price			42,182
Advanced Adhesives Pty Limited and Advance Adhesives (New Zealand) [Member] | Customer Relationships [Member]
Other intangibles			14,400	7,575
Advanced Adhesives Pty Limited and Advance Adhesives (New Zealand) [Member] | Trademarks and Trade Names [Member]
Other intangibles			$ 700	146
Continental Products Limited [Member]
Total purchase price				$ 10,365

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Note 3 - Restructuring Actions (Details Textual) - USD ($) $ in Thousands	3 Months Ended
	Mar. 04, 2017	Feb. 27, 2016
Restructuring Charges	$ 10,168
Business Integration Project [Member]
Restructuring Charges		$ 413

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Note 3 - Restructuring Actions - Restructuring Charges (Details) $ in Thousands	3 Months Ended
	Mar. 04, 2017 USD ($)
Restructuring Charges	$ 10,168
Cost of Sales [Member]
Restructuring Charges	3,647
Selling, General and Administrative Expenses [Member]
Restructuring Charges	$ 6,521

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Note 3 - Restructuring Actions - Restructuring Charges by Segment (Details) $ in Thousands	3 Months Ended
	Mar. 04, 2017 USD ($)
Restructuring Charges	$ 10,168
Americas Adhesives [Member]
Restructuring Charges	1,978
EIMEA [Member]
Restructuring Charges	4,628
Asia Pacific [Member]
Restructuring Charges	1,679
Construction Products [Member]
Restructuring Charges	1,262
Engineering Adhesives [Member]
Restructuring Charges	$ 621

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Note 3 - Restructuring Actions - Restructuring Reserve (Details) $ in Thousands	3 Months Ended
	Mar. 04, 2017 USD ($)
Restructuring Charges	$ 10,168
Non-cash charges	(417)
Cash payments	(5,133)
Foreign currency translation	(49)
Balance at March 4, 2017	4,569
Employee Related [Member]
Restructuring Charges	8,759
Non-cash charges
Cash payments	(4,479)
Foreign currency translation	(49)
Balance at March 4, 2017	4,231
Asset Related [Member]
Restructuring Charges	861
Non-cash charges	(417)
Cash payments	(444)
Foreign currency translation
Balance at March 4, 2017
Other Restructuring [Member]
Restructuring Charges	548
Non-cash charges
Cash payments	(210)
Foreign currency translation
Balance at March 4, 2017	$ 338

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Note 4 - Inventories - Inventories (Details) - USD ($) $ in Thousands	Mar. 04, 2017	Dec. 03, 2016
Raw materials	$ 133,615	$ 116,200
Finished goods	164,471	142,397
LIFO reserve	(11,832)	(11,198)
Total inventories	$ 286,254	$ 247,399

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Note 5 - Goodwill and Other Intangible Assets (Details Textual) - USD ($) $ in Thousands	3 Months Ended
	Mar. 04, 2017	Feb. 27, 2016
Amortization of Intangible Assets	$ 7,355	$ 6,698
Indefinite Lived Trademarks and Trade Names	$ 464

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Note 5 - Goodwill and Other Intangible Assets - Goodwill by Segment (Details) $ in Thousands	3 Months Ended
	Mar. 04, 2017 USD ($)
Goodwill	$ 366,248
Acquisitions	60,313
Currency impact	(2,980)
Goodwill	423,581
Americas Adhesives [Member]
Goodwill	59,821
Acquisitions	60,313	[1]
Currency impact	(1,676)
Goodwill	118,458
EIMEA [Member]
Goodwill	98,876
Acquisitions
Currency impact	(533)
Goodwill	98,343
Asia Pacific [Member]
Goodwill	17,481
Acquisitions
Currency impact	(8)
Goodwill	17,473
Construction Products [Member]
Goodwill	21,901
Acquisitions
Currency impact	1
Goodwill	21,902
Engineering Adhesives [Member]
Goodwill	168,169
Acquisitions
Currency impact	(764)
Goodwill	$ 167,405

[1] Preliminary goodwill balance as of March 4, 2017.

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Note 5 - Goodwill and Other Intangible Assets - Amortizable Intangible Assets (Details) - USD ($) $ in Thousands	Mar. 04, 2017	Dec. 03, 2016
Original cost	$ 419,852	$ 372,949
Accumulated amortization	(176,718)	(168,057)
Net identifiable intangibles	243,134	204,892
Original cost	419,852	372,949
Accumulated amortization	(176,718)	(168,057)
Purchased Technology And Patents [Member]
Original cost	69,527	70,504
Accumulated amortization	(26,919)	(21,448)
Net identifiable intangibles	42,608	49,056
Original cost	69,527	70,504
Accumulated amortization	(26,919)	(21,448)
Customer Relationships [Member]
Original cost	286,161	251,329
Accumulated amortization	(118,071)	(116,411)
Net identifiable intangibles	168,090	134,918
Original cost	286,161	251,329
Accumulated amortization	(118,071)	(116,411)
Other Intangible Assets [Member]
Original cost	64,164	51,116
Accumulated amortization	(31,728)	(30,198)
Net identifiable intangibles	32,436	20,918
Original cost	64,164	51,116
Accumulated amortization	$ (31,728)	$ (30,198)

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Note 5 - Goodwill and Other Intangible Assets - Estimated Aggregate Amortization Expense (Details) $ in Thousands	Mar. 04, 2017 USD ($)
2016	$ 24,749
2017	32,076
2018	29,910
2019	27,534
2020	26,088
Thereafter	$ 102,777

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Note 6 - Long-term Debt (Details Textual) - USD ($) $ in Thousands		3 Months Ended
	Feb. 14, 2017	Mar. 04, 2017
Reclassification of an Asset to a Direct Deduction on Debt [Member]
Current Period Reclassification Adjustment		$ 4,411
Reclassification of an Asset to a Direct Deduction on Debt [Member] | December 3, 2016 [Member]
Prior Period Reclassification Adjustment		2,386
Interest Rate Swap Related to Public Notes [Member]
Derivative, Amount of Hedged Item	$ 150,000
Interest Rate Swap [Member]
Derivative, Amount of Hedged Item		$ 75,000
Interest Rate Swap [Member] | London Interbank Offered Rate (LIBOR) [Member]
Derivative, Basis Spread on Variable Rate	1.86%
Revolving Credit Facility [Member]
Repayments of Lines of Credit	$ 138,000
Public Notes [Member]
Debt Instrument, Face Amount	$ 300,000
Debt Instrument, Term	10 years
Debt Instrument, Interest Rate, Stated Percentage	4.00%
Term Loan [Member]
Repayments of Debt	$ 158,750

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Note 7 - Redeemable Non-controlling Interest (Details Textual) € in Thousands	3 Months Ended
	Mar. 04, 2017 EUR (€)
Noncontrolling Interest, Increase in Ownership Percentage Per Year	1.00%
Noncontrolling Interest, Number of Years Ownership can Be Increased	5 years
Noncontrolling Interest, Maximum Ownership Percentage by Noncontrolling Shareholder	13.00%
Redeemable Noncontrolling Interest, Equity, Minimum Redemption Value	€ 3,500
Redeemable Noncontrolling Interest, Equity, Redemption Value	3,500
Tonsan Adhesive [Member]
Business Combination, Agreement to Purchase Remaining Equity	€ 4,206

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Note 7 - Redeemable Non-controlling Interest - Redeemable Non-controlling Interests (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 04, 2017	Dec. 03, 2016
Balance at beginning of period	$ 4,277
Net income attributed to redeemable non-controlling interest	39	$ 239
Purchase of redeemable non-controlling interest	(4,468)
Foreign currency translation adjustment	152
Balance at end of period		$ 4,277

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Note 8 - Accounting for Share-based Compensation (Details Textual) - USD ($) $ in Thousands	3 Months Ended
	Mar. 04, 2017	Feb. 27, 2016
Allocated Share-based Compensation Expense	$ 5,032	$ 4,267
Employee Service Share-based Compensation, Tax Benefit Realized from Exercise of Stock Options	1,053
Adjustments to Additional Paid in Capital, Income Tax Deficiency from Share-based Compensation		341
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Stock Options	11,388
Fair Value Options Granted During Period Value Share-based Compensation	7,384	6,138
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Intrinsic Value	4,420	11
Proceeds from Issuance of Shares under Incentive and Share-based Compensation Plans, Including Stock Options	8,549	32
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Fair Value	6,941	$ 5,833
Total Fair Value of Nonvested Restricted Stock	$ 21,214
Repurchased Restricted Stock Shares	50,687	66,447
Employees [Member]
Deferred Compensation Plan, Matching Percentage	10.00%
Employee Stock Option [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term	1 year 219 days
Restricted Stock Units (RSUs) [Member]
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Share-based Awards Other than Options	$ 18,035
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition	1 year 255 days

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Note 8 - Accounting for Share-based Compensation - Fair Value of Options Granted (Details) - $ / shares	3 Months Ended
	Mar. 04, 2017	Feb. 27, 2016
Expected life (Year)	4 years 273 days	4 years 273 days
Weighted-average expected volatility	24.87%	29.03%
Risk-free interest rate	1.89%	1.44%
Expected dividend yield	1.12%	1.56%
Weighted-average fair value of grants (in dollars per share)	$ 10.81	$ 7.64
Minimum [Member]
Expected volatility	24.84%	29.03%
Maximum [Member]
Expected volatility	24.88%	29.23%

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Note 8 - Accounting for Share-based Compensation - Stock Option Activity (Details)	3 Months Ended
	Mar. 04, 2017 $ / shares shares
Outstanding Options (in shares) | shares	2,986,481
Outstanding Options (in dollars per share) | $ / shares	$ 34.92
Granted (in shares) | shares	683,425
Granted (in dollars per share) | $ / shares	$ 49.95
Exercised (in shares) | shares	(261,346)
Exercised (in dollars per share) | $ / shares	$ 32.71
Forfeited or cancelled (in shares) | shares	(66,589)
Forfeited or cancelled (in dollars per share) | $ / shares	$ 36.68
Outstanding Options (in shares) | shares	3,341,971
Outstanding Options (in dollars per share) | $ / shares	$ 38.13

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Note 8 - Accounting for Share-based Compensation - Nonvested Restricted Stock Activity (Details) - $ / shares	3 Months Ended	12 Months Ended
	Mar. 04, 2017	Dec. 03, 2016
Nonvested at December 3, 2016 (in shares)	389,697
Nonvested at December 3, 2016 (in dollars per share)	$ 38.36
Nonvested at December 3, 2016 (Year)	1 year 255 days	1 year
Granted (in shares)	278,043
Granted (in dollars per share)	$ 49.68
Granted (Year)	1 year 328 days
Vested (in shares)	(174,844)
Vested (in dollars per share)	$ 39.62
Forfeited (in shares)	(16,095)
Forfeited (in dollars per share)	$ 37.15
Forfeited (Year)	1 year 219 days
Nonvested at March 4, 2017 (in shares)	476,801	389,697
Nonvested at March 4, 2017 (in dollars per share)	$ 44.54	$ 38.36
Restricted Stock Units (RSUs) [Member]
Nonvested at December 3, 2016 (in shares)	352,744
Granted (in shares)	278,043
Vested (in shares)	(137,891)
Forfeited (in shares)	(16,095)
Nonvested at March 4, 2017 (in shares)	476,801	352,744
Restricted Stock [Member]
Nonvested at December 3, 2016 (in shares)	36,953
Granted (in shares)
Vested (in shares)	(36,953)
Forfeited (in shares)
Nonvested at March 4, 2017 (in shares)		36,953

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Note 8 - Accounting for Share-based Compensation - Deferred Compensation Units (Details)	3 Months Ended
	Mar. 04, 2017 shares
Units outstanding (in shares)	465,435
Participant contributions (in shares)	8,426
Company match contributions (in shares)	843
Payouts (in shares)	(19,955)
Units outstanding (in shares)	454,749
Non Employee Directors [Member]
Units outstanding (in shares)	424,319
Participant contributions (in shares)	4,462
Company match contributions (in shares)	446
Payouts (in shares)	(13,818)
Units outstanding (in shares)	415,409
Employees [Member]
Units outstanding (in shares)	41,116
Participant contributions (in shares)	3,964
Company match contributions (in shares)	397
Payouts (in shares)	(6,137)
Units outstanding (in shares)	39,340

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Note 9 - Components of Net Periodic Cost (Benefit) Related to Pension and Other Postretirement Benefit Plans - Components of Net Periodic Benefit Cost (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 04, 2017	Feb. 27, 2016
United States Pension Plan of US Entity [Member]
Service cost	$ 28	$ 27
Interest cost	3,603	3,767
Expected return on assets	(6,364)	(6,077)
Prior service cost	7	7
Actuarial loss	1,307	1,293
Net periodic (benefit) cost	(1,419)	(983)
Foreign Pension Plan [Member]
Service cost	508	480
Interest cost	1,144	1,367
Expected return on assets	(2,391)	(2,482)
Prior service cost	(1)	(1)
Actuarial loss	842	752
Net periodic (benefit) cost	102	116
Other Postretirement Benefit Plan [Member]
Service cost	52	84
Interest cost	398	480
Expected return on assets	(1,447)	(1,342)
Prior service cost		(10)
Actuarial loss	253	532
Net periodic (benefit) cost	$ (744)	$ (256)

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Note 10 - Accumulated Other Comprehensive Income (Loss) - Comprehensive Income (Loss) Information (Details) - USD ($) $ in Thousands		3 Months Ended
		Mar. 04, 2017	Feb. 27, 2016
Net income attributable to H.B. Fuller		$ 14,795	$ 18,918
Net income including non-controlling interests		36	49
Foreign currency translation adjustment¹, pretax	[1]	(10,514)	(945)
Foreign currency translation adjustment¹, tax	[1]
Foreign currency translation adjustment¹		(10,514)	(945)
Foreign currency translation adjustment¹, non-controlling interests		(5)	(5)
Defined benefit pension plans adjustment², pretax	[2]	2,408	3,997
Defined benefit pension plans adjustment², tax	[2]	(818)	(1,332)
Defined benefit pension plans adjustment²		1,590	2,665
Interest rate swap³, pretax	[3]	16	13
Interest rate swap³, tax	[3]	(6)	(3)
Interest rate swap³		10	10
Cash-flow hedges³, pretax	[3]	209	403
Cash-flow hedges³, tax	[3]	(80)	(154)
Cash-flow hedges³		129	249
Other comprehensive income (loss), pretax		(7,881)	3,468
Other comprehensive income (loss), tax		(904)	(1,489)
Other comprehensive income (loss)		(8,785)	1,979
Other comprehensive income (loss), non-controlling interests		(5)	(5)
Comprehensive income (loss)		6,010	20,897
Comprehensive income (loss), non-controlling interests		$ 31	$ 44

[1] Income taxes are not provided for foreign currency translation relating to permanent investments in international subsidiaries. As discussed in Note 1, the foreign currency translation adjustment for the quarter ended March 4, 2017 includes the impact of the change in functional currency for the Company's subsidiaries in Latin America.

[2] Loss reclassified from accumulated other comprehensive income (“AOCI”) into earnings as part of net periodic cost related to pension and other postretirement benefit plans is reported in cost of sales, SG&A expense and special charges, net.

[3] Loss reclassified from AOCI into earnings is reported in other income (expense), net.

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Note 10 - Accumulated Other Comprehensive Income (Loss) - Components of Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands	Mar. 04, 2017	Dec. 03, 2016
Accumulated other comprehensive loss	$ (271,514)	$ (262,729)
AOCI Including Portion Attributable to Noncontrolling Interest [Member]
Foreign currency translation adjustment	(95,966)	(85,447)
Defined benefit pension plans adjustment, net of taxes	(174,511)	(176,101)
Interest rate swap, net of taxes	38	28
Cash-flow hedges, net of taxes	(1,146)	(1,275)
Accumulated other comprehensive loss	(271,585)	(262,795)
AOCI Attributable to Parent [Member]
Foreign currency translation adjustment	(95,895)	(85,381)
Defined benefit pension plans adjustment, net of taxes	(174,511)	(176,101)
Interest rate swap, net of taxes	38	28
Cash-flow hedges, net of taxes	(1,146)	(1,275)
Accumulated other comprehensive loss	(271,514)	(262,729)
AOCI Attributable to Noncontrolling Interest [Member]
Foreign currency translation adjustment	(71)	(66)
Defined benefit pension plans adjustment, net of taxes
Interest rate swap, net of taxes
Cash-flow hedges, net of taxes
Accumulated other comprehensive loss	$ (71)	$ (66)

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Note 10 - Accumulated Other Comprehensive Income (Loss) - Components of Accumulated Other Comprehensive Income (Loss) (Details) (Parentheticals) - USD ($) $ in Thousands	Mar. 04, 2017	Dec. 03, 2016
AOCI Including Portion Attributable to Noncontrolling Interest [Member]
Tax on defined benefit pension plans adjustment	$ 89,916	$ 90,734
Tax on interest rate swap	(23)	17
Tax on cash flow hedges	705	785
AOCI Attributable to Parent [Member]
Tax on defined benefit pension plans adjustment	89,916	90,734
Tax on interest rate swap	(23)	17
Tax on cash flow hedges	$ 705	$ 785

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Note 11 - Income Taxes (Details Textual) - USD ($) $ in Thousands	3 Months Ended
	Mar. 04, 2017	Dec. 03, 2016
Unrecognized Tax Benefits	$ 4,354	$ 4,165
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued	711
Unrecognized Tax Benefits, Period Increase (Decrease)	$ 189

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Note 12 - Earnings Per Share (Details Textual) - $ / shares	3 Months Ended
	Mar. 04, 2017	Feb. 27, 2016
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	632,720	1,495,004
Antidilutive Weighted Average Share Price Excluded from Computation of Earnings Per Share Amount	$ 50.10	$ 42.88

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Note 12 - Earnings Per Share - Earnings Per Share (Details) - shares shares in Thousands	3 Months Ended
	Mar. 04, 2017	Feb. 27, 2016
Basic (in shares)	50,243	49,958
Equivalent shares from share-based compensations plans (in shares)	1,217	1,037
Weighted-average common and common equivalent shares - diluted (in shares)	51,460	50,995

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Note 13 - Financial Instruments (Details Textual) € in Thousands, $ in Thousands	3 Months Ended
	Mar. 04, 2017 USD ($)	Feb. 27, 2016 USD ($)	Feb. 24, 2017 EUR (€)	Feb. 14, 2017 USD ($)	Dec. 03, 2016 USD ($)	Oct. 07, 2015 EUR (€)
Foreign Currency Cash Flow Hedge Asset at Fair Value	$ 5,260				$ 4,654
Interest Rate Fair Value Hedge Liability at Fair Value	3,135
Interest Rate Fair Value Hedge Asset at Fair Value	1,077				1,579
Public Notes [Member]
Debt Instrument, Face Amount				$ 300,000
Cross Currency Interest Rate Contract [Member]
Derivative, Notional Amount	177,336		€ 42,600			€ 134,736
Foreign Currency Cash Flow Hedge Asset at Fair Value	4,971
Gain (Loss) on Foreign Currency Cash Flow Hedge Ineffectiveness	(20)
Accumulated Other Comprehensive Income (Loss), Cumulative Changes in Net Gain (Loss) from Cash Flow Hedges, Effect Net of Tax	1,146
Foreign Currency Cash Flow Hedge Gain (Loss) to be Reclassified During Next 12 Months	986
Foreign Exchange Forward [Member]
Gain (Loss) on Foreign Currency Derivatives Recorded in Earnings, Net	3,117
Interest Rate Swap Related to Public Notes [Member]
Derivative, Amount of Hedged Item				$ 150,000
Interest Rate Swap Related to Public Notes [Member] | Other Liabilities [Member]
Interest Rate Fair Value Hedge Liability at Fair Value	3,135
Interest Rate Swap Related to Public Notes [Member] | London Interbank Offered Rate (LIBOR) [Member]
Derivative, Variable Interest Rate				1.86%
Interest Rate Swap [Member]
Derivative, Amount of Hedged Item	75,000
Interest Rate Fair Value Hedge Liability at Fair Value	1,107
Interest Rate Fair Value Hedge Asset at Fair Value	1,077				$ 1,579
Derivative, Net Hedge Ineffectiveness Gain (Loss)	$ 3	$ 143

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Note 13 - Financial Instruments - Swaps Outstanding (Details) € in Thousands, $ in Thousands	3 Months Ended
	Mar. 04, 2017 USD ($)	Mar. 04, 2017 EUR (€)	Feb. 24, 2017 EUR (€)	Dec. 03, 2016 USD ($)	Oct. 07, 2015 EUR (€)
Foreign Currency Cash Flow Hedge Asset at Fair Value | $	$ 5,260			$ 4,654
Fair Value | $	(3,135)
Cross Currency Interest Rate Contract [Member]
Derivative, Notional Amount	177,336		€ 42,600		€ 134,736
Foreign Currency Cash Flow Hedge Asset at Fair Value | $	$ 4,971
Cross Currency Interest Rate Contract [Member] | Currency Swap 1 [Member]
Fiscal Year of Expiration	2017
Interest rate minimum	3.05%	3.05%
Derivative, Notional Amount		€ 44,912
Foreign Currency Cash Flow Hedge Asset at Fair Value		€ 2,181
Interest rate maximum	3.9145%	3.9145%
Cross Currency Interest Rate Contract [Member] | Currency Swap 2 [Member]
Fiscal Year of Expiration	2018
Interest rate minimum	3.45%	3.45%
Derivative, Notional Amount		€ 44,912
Foreign Currency Cash Flow Hedge Asset at Fair Value		€ 1,750
Interest rate maximum	4.5374%	4.5374%
Cross Currency Interest Rate Contract [Member] | Currency Swap 3 [Member]
Fiscal Year of Expiration	2019
Interest rate minimum	3.80%	3.80%
Derivative, Notional Amount		€ 44,912
Foreign Currency Cash Flow Hedge Asset at Fair Value		€ 1,329
Interest rate maximum	5.053%	5.053%
Cross Currency Interest Rate Contract [Member] | Currency Swap 4 [Member]
Fiscal Year of Expiration	2020
Interest rate minimum	1.95%	1.95%
Derivative, Notional Amount		€ 42,600
Interest rate maximum	4.30375%	4.30375%
Fair Value		€ (289)

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Note 14 - Fair Value Measurements (Details Textual) - USD ($) $ in Thousands	Mar. 04, 2017	Dec. 03, 2016
Long-term Debt, Fair Value	$ 821,211	$ 693,283

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Note 14 - Fair Value Measurements - Fair Value Measurements (Details) - USD ($) $ in Thousands	Mar. 04, 2017	Dec. 03, 2016
Assets:
Marketable securities	$ 1,245	$ 1,020
Foreign exchange contract assets	3,991	11,697
Interest Rate Fair Value Hedge Asset at Fair Value	1,077	1,579
Foreign Currency Cash Flow Hedge Asset at Fair Value	5,260	4,654
Liabilities:
Foreign exchange contract liabilities	874	6,925
Interest Rate Fair Value Hedge Liability at Fair Value	3,135
Contingent consideration liability	4,706	4,720
Cash-flow hedges	289
Fair Value, Inputs, Level 1 [Member]
Assets:
Marketable securities	1,245	1,020
Foreign exchange contract assets
Interest Rate Fair Value Hedge Asset at Fair Value
Foreign Currency Cash Flow Hedge Asset at Fair Value
Liabilities:
Foreign exchange contract liabilities
Interest Rate Fair Value Hedge Liability at Fair Value
Contingent consideration liability
Cash-flow hedges
Fair Value, Inputs, Level 2 [Member]
Assets:
Marketable securities
Foreign exchange contract assets	3,991	11,697
Interest Rate Fair Value Hedge Asset at Fair Value	1,077	1,579
Foreign Currency Cash Flow Hedge Asset at Fair Value	5,260	4,654
Liabilities:
Foreign exchange contract liabilities	874	6,925
Interest Rate Fair Value Hedge Liability at Fair Value	3,135
Contingent consideration liability
Cash-flow hedges	289
Fair Value, Inputs, Level 3 [Member]
Assets:
Marketable securities
Foreign exchange contract assets
Interest Rate Fair Value Hedge Asset at Fair Value
Foreign Currency Cash Flow Hedge Asset at Fair Value
Liabilities:
Foreign exchange contract liabilities
Interest Rate Fair Value Hedge Liability at Fair Value
Contingent consideration liability	4,706	$ 4,720
Cash-flow hedges

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Note 14 - Fair Value Measurements - Schedule of Contingent Consideration Liabilities (Details) - Fair Value, Inputs, Level 3 [Member] $ in Thousands	3 Months Ended
	Mar. 04, 2017 USD ($)
Balance at December 3, 2016	$ 4,720
Mark to market adjustment	37
Foreign currency translation adjustment	(51)
Balance at March 4, 2017	$ 4,706

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Note 15 - Share Repurchase Program (Details Textual) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 04, 2017	Feb. 27, 2016	Dec. 03, 2016	Sep. 30, 2010
Stock Repurchased During Period, Value	$ 2,430		$ 23,228
2010 Share Repurchase Program [Member]
Stock Repurchase Program, Authorized Amount				$ 100,000
Stock Repurchased During Period, Value	$ 0	$ 4,210
Decreased Value of Common Stock Shares Repurchased		125
Decreased Value of Additional Paid in Capital for Shares Repurchased		$ 4,085

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Note 16 - Commitments and Contingencies - Asbestos Related Lawsuits and Claims (Details) - Asbestos Related Lawsuits And Claims [Member] $ in Thousands	3 Months Ended		36 Months Ended
	Mar. 04, 2017 USD ($)	Feb. 27, 2016 USD ($)	Dec. 03, 2016 USD ($)
Lawsuits and claims settled	3	2	33
Settlement amounts	$ 833	$ 75	$ 3,061
Insurance payments received or expected to be received	$ 685	$ 56	$ 2,253

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Note 17 - Operating Segments - Reportable Operating Segment Financial Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 04, 2017	Feb. 27, 2016
Trade Revenue	$ 503,323	$ 474,326
Segment Operating Income	26,081	37,838
Operating Segments [Member]
Trade Revenue	503,323	474,326
Segment Operating Income	26,081	37,838
Operating Segments [Member] | Americas Adhesives [Member]
Trade Revenue	193,162	183,319
Segment Operating Income	21,033	26,259
Operating Segments [Member] | EIMEA [Member]
Trade Revenue	124,039	124,291
Segment Operating Income	1,797	6,163
Operating Segments [Member] | Asia Pacific [Member]
Trade Revenue	62,645	53,860
Segment Operating Income	1,879	3,753
Operating Segments [Member] | Construction Products [Member]
Trade Revenue	57,046	60,074
Segment Operating Income	(683)	785
Operating Segments [Member] | Engineering Adhesives [Member]
Trade Revenue	66,431	52,782
Segment Operating Income	2,055	878
Intersegment Eliminations [Member]
Trade Revenue
Intersegment Eliminations [Member] | Americas Adhesives [Member]
Trade Revenue	3,860	3,630
Intersegment Eliminations [Member] | EIMEA [Member]
Trade Revenue	3,522	5,271
Intersegment Eliminations [Member] | Asia Pacific [Member]
Trade Revenue	1,269	951
Intersegment Eliminations [Member] | Construction Products [Member]
Trade Revenue	162	104
Intersegment Eliminations [Member] | Engineering Adhesives [Member]
Trade Revenue

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Note 17 - Operating Segments - Reconciliation of Segment Operating Income to Income From Continuing Operations Before Income Taxes and Income From Equity Method Investments (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 04, 2017	Feb. 27, 2016
Segment operating income	$ 26,081	$ 37,838
Special charges, net		(413)
Other income (expense), net	621	(5,082)
Interest expense	(8,380)	(6,308)
Income before income taxes and income from equity method investments	$ 18,322	$ 26,035