Note 7 - Redeemable Non-controlling Interest

9 Months Ended

Sep. 02, 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

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 purchased the remaining shares from the non-controlling shareholder for

€4,206.

The difference between the non-controlling interest balance and the purchase price was recorded in additional paid-in capital 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 September 2, 2017	$	-