10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended February 29, 2020

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 incorporation or organization)	(I.R.S. Employer Identification No.)

1200 Willow Lake Boulevard, St. Paul, Minnesota	55110-5101
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (651) 236-5900

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to section 12(b) of the Act:

Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, par value $1.00 per share	FUL	New York Stock Exchange

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 ☒  No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes ☒   No ☐

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

Large accelerated filer ☒	Accelerated filer ☐
Non-accelerated filer ☐	Smaller reporting company ☐
	Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12(b) of the Exchange Act. Yes ☐  No ☒

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PROCEEDING FIVE YEARS:

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ☐  No ☐

APPLICABLE ONLY TO CORPORATE ISSUERS

The number of shares outstanding of the Registrant’s Common Stock, par value $1.00 per share, was 51,411,113 as of March 23, 2020.

1

H.B. Fuller Company

Quarterly Report on Form 10-Q

Table of Contents

		Page
PART 1. FINANCIAL INFORMATION
ITEM 1.	FINANCIAL STATEMENTS (Unaudited)	3
	Consolidated Statements of Income for the three months ended February 29, 2020 and March 2, 2019	3
	Consolidated Statements of Comprehensive Income for the three months ended February 29, 2020 and March 2, 2019	4
	Consolidated Balance Sheets as of February 29, 2020 and November 30, 2019	5
	Consolidated Statements of Total Equity for the three months ended February 29, 2020 and March 2, 2019	6
	Consolidated Statements of Cash Flows for the three months ended February 29, 2020 and March 2, 2019	7
	Notes to Consolidated Financial Statements	8
ITEM 2.	MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	25
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	34
ITEM 4.	CONTROLS AND PROCEDURES	34
PART II. OTHER INFORMATION		35
ITEM 1.	LEGAL PROCEEDINGS	35
ITEM 1A.	RISK FACTORS	37
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	37
ITEM 6.	EXHIBITS	38
SIGNATURES		39

2

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

H.B. FULLER COMPANY AND SUBSIDIARIES

Consolidated Statements of Income

(In thousands, except per share amounts)

(Unaudited)

	Three Months Ended
	February 29,			March 2,
	2020			2019
Net revenue	$	646,564		$	672,935
Cost of sales		(476,302	)		(493,010	)
Gross profit		170,262			179,925
Selling, general and administrative expenses		(141,509	)		(145,713	)
Other income (expense), net		4,969			3,365
Interest expense		(22,757	)		(26,807	)
Interest income		2,918			3,053
Income before income taxes and income from equity method investments		13,883			13,823
Income taxes		(5,611	)		(3,140	)
Income from equity method investments, net of dividends received		1,634			1,565
Net income including non-controlling interest		9,906			12,248
Net income attributable to non-controlling interest		(11	)		(4	)
Net income attributable to H.B. Fuller	$	9,895		$	12,244
Earnings per share attributable to H.B. Fuller common stockholders:
Basic		0.19			0.24
Diluted		0.19			0.24
Weighted-average common shares outstanding:
Basic		51,295			50,752
Diluted		52,580			51,901
Dividends declared per common share	$	0.160		$	0.155

See accompanying Notes to Unaudited Consolidated Financial Statements.

3

H.B. FULLER COMPANY AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income

(In thousands)

(Unaudited)

	Three Months Ended
	February 29,			March 2,
	2020			2019
Net income including non-controlling interest	$	9,906		$	12,248
Other comprehensive (loss) income
Foreign currency translation		(2,781	)		17,699
Defined benefit pension plans adjustment, net of tax		2,086			1,482
Interest rate swaps, net of tax		(8,999	)		(11,444	)
Cash flow hedges, net of tax		4,644			4,086
Other comprehensive (loss) income		(5,050	)		11,823
Comprehensive income		4,856			24,071
Less: Comprehensive income attributable to non-controlling interest		10			10
Comprehensive income attributable to H.B. Fuller	$	4,846		$	24,061

See accompanying Notes to Unaudited Consolidated Financial Statements.

4

H.B. FULLER COMPANY AND SUBSIDIARIES

Consolidated Balance Sheets

(In thousands, except share and per share amounts)

(Unaudited)

	February 29,			November 30,
	2020			2019
Assets
Current assets:
Cash and cash equivalents	$	78,738		$	112,191
Trade receivables (net of allowances of $11,845 and $10,682, as of February 29, 2020 and November 30, 2019, respectively)		457,826			493,181
Inventories		380,975			337,267
Other current assets		110,691			90,723
Total current assets		1,028,230			1,033,362
Property, plant and equipment		1,323,664			1,304,231
Accumulated depreciation		(689,368	)		(674,418	)
Property, plant and equipment, net		634,296			629,813
Goodwill		1,281,249			1,281,808
Other intangibles, net		796,322			799,399
Other assets		285,169			241,352
Total assets	$	4,025,266		$	3,985,734
Liabilities, non-controlling interest and total equity
Current liabilities:
Notes payable	$	16,572		$	15,732
Current maturities of long-term debt		52,000			65,000
Trade payables		333,749			298,869
Accrued compensation		57,391			78,582
Income taxes payable		16,373			23,229
Other accrued expenses		67,230			60,745
Total current liabilities		543,315			542,157
Long-term debt, excluding current maturities		1,904,900			1,898,384
Accrued pension liabilities		81,241			80,214
Other liabilities		273,756			242,190
Total liabilities		2,803,212			2,762,945
Commitments and contingencies (Note 15)
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 – 51,407,204 and 51,241,190, as of February 29, 2020 and November 30, 2019, respectively		51,407			51,241
Additional paid-in capital		132,851			130,295
Retained earnings		1,385,993			1,384,411
Accumulated other comprehensive loss		(348,649	)		(343,600	)
Total H.B. Fuller stockholders' equity		1,221,602			1,222,347
Non-controlling interest		452			442
Total equity		1,222,054			1,222,789
Total liabilities, non-controlling interest and total equity	$	4,025,266		$	3,985,734

See accompanying Notes to Unaudited Consolidated Financial Statements.

5

H.B. FULLER COMPANY AND SUBSIDIARIES

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 Interest		Total
Balance at November 30, 2019	$	51,241		$	130,295		$	1,384,411		$	(343,600	)	$	442	$	1,222,789
Comprehensive income (loss)		-			-			9,895			(5,049	)		10		4,856
Dividends		-			-			(8,313	)		-			-		(8,313	)
Stock option exercises		26			881			-			-			-		907
Share-based compensation plans other, net		206			4,821			-			-			-		5,027
Repurchases of common stock		(66	)		(3,146	)		-			-			-		(3,212	)
Balance at February 29, 2020	$	51,407		$	132,851		$	1,385,993		$	(348,649	)	$	452	$	1,222,054

	H.B. Fuller Company Shareholders
	Common Stock			Additional Paid-in Capital			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Non- Controlling Interest		Total
Balance at December 1, 2018, as previously reported	$	50,733		$	95,940		$	1,285,246		$	(280,152	)	$	401	$	1,152,168
Change in accounting principles		-			-			1,043			-			-		1,043
Balance at December 1, 2018, as adjusted		50,733			95,940			1,286,289			(280,152	)		401		1,153,211
Comprehensive income		-			-			12,244			11,817			10		24,071
Dividends		-			-			(7,962	)		-			-		(7,962	)
Stock option exercises		41			1,025			-			-			-		1,066
Share-based compensation plans other, net		168			6,233			-			-			-		6,401
Repurchases of common stock		(58	)		(2,625	)		-			-			-		(2,683	)
Balance at March 2, 2019	$	50,884		$	100,573		$	1,290,571		$	(268,335	)	$	411	$	1,174,104

See accompanying Notes to Unaudited Consolidated Financial Statements.

6

H.B. FULLER COMPANY AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

	Three Months Ended
	February 29, 2020			March 2, 2019
Cash flows from operating activities:
Net income including non-controlling interest	$	9,906		$	12,248
Adjustments to reconcile net income including non-controlling interest to net cash provided by operating activities:
Depreciation		16,595			16,842
Amortization		17,990			19,212
Deferred income taxes		(4,035	)		(1,426	)
Income from equity method investments, net of dividends received		(1,634	)		(1,565	)
Gain on sale of assets		-			30
Share-based compensation		4,703			5,906
Change in assets and liabilities, net of effects of acquisitions:
Trade receivables, net		33,705			5,873
Inventories		(46,947	)		(21,630	)
Other assets		(32,769	)		(21,065	)
Trade payables		55,110			7,905
Accrued compensation		(21,145	)		(19,205	)
Other accrued expenses		(3,055	)		(5,253	)
Income taxes payable		(3,040	)		(1,622	)
Accrued / prepaid pensions		(1,120	)		(5,289	)
Other liabilities		12,801			(3,009	)
Other		(2,638	)		12,541
Net cash provided by operating activities		34,427			493
Cash flows from investing activities:
Purchased property, plant and equipment		(32,124	)		(13,865	)
Purchased businesses, net of cash acquired		(9,500	)		-
Purchase of assets		(3,998	)		-
Proceeds from sale of property, plant and equipment		1,516			141
Cash payments related to government grant		(234	)		-
Net cash used in investing activities		(44,340	)		(13,724	)
Cash flows from financing activities:
Repayment of long-term debt		(13,000	)		(20,000	)
Net proceeds from notes payable		1,497			2,645
Dividends paid		(8,222	)		(7,883	)
Proceeds from stock options exercised		907			1,065
Repurchases of common stock		(3,213	)		(2,683	)
Net cash used in financing activities		(22,031	)		(26,856	)
Effect of exchange rate changes on cash and cash equivalents		(1,509	)		2,770
Net change in cash and cash equivalents		(33,453	)		(37,317	)
Cash and cash equivalents at beginning of period		112,191			150,793
Cash and cash equivalents at end of period	$	78,738		$	113,476

See accompanying Notes to Unaudited Consolidated Financial Statements.

7

H.B. FULLER COMPANY AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(Amounts in thousands, except per share amounts)

(Unaudited)

Note 1: Basis of Presentation

Overview

The accompanying unaudited interim 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 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 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 November 30, 2019 as filed with the Securities and Exchange Commission.

Change in Segments

As of November 30, 2019, we had five reportable segments: Americas Adhesives, EIMEA, Asia Pacific, Construction Adhesives and Engineering Adhesives. As of the beginning of fiscal 2020, we realigned our operating segment structure and now have three reportable segments: Hygiene, Health and Consumable Adhesives, Engineering Adhesives and Construction Adhesives. The change in operating segments is based on how we have organized the company to make operating decisions and assess business performance. Prior period segment information has been recast retrospectively to reflect the realignment.

Change in Accounting Principle – Leases

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, Leases (Subtopic 842). This ASU 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. In December 2018, the FASB also issued ASU No. 2018-20, Leases (Topic 842): Narrow-Scope Improvements for Lessors, which clarifies the accounting for lessors for variable payments that relate to both a lease component and a nonlease component and is effective in the same timeframe as ASU 2016-02, and ASU No. 2019-01, Leases (Topic 842): Codification Improvements, which clarifies the transition disclosure requirements. In July 2018, the FASB issued ASU No. 2018-11, Leases (Topic 842): Targeted Improvements. This ASU allows entities to not recast comparative periods in transition to ASC 842 and instead report the comparative periods presented in the period of adoption under ASC 840. The ASU also includes a practical expedient for lessors to not separate the lease and nonlease components of a contract. In July 2018, the FASB issued ASU No. 2018-10, Codification Improvements to Topic 842, Leases. This ASU includes certain clarifications to address potential narrow-scope implementation issues which we are incorporating into our assessment and adoption of ASU No. 2016-02.

We adopted these ASUs and related standards during the first quarter ended February 29, 2020 using the modified retrospective method of adoption. As a result of the adoption of these ASUs, as of December 1, 2019 we recorded $28,254 of right-of-use assets and liabilities on the balance sheet. Adoption of these ASUs did not have a significant impact on the Consolidated Statements of Income. We have included the disclosures required by these ASUs in Note 6.

Change in Accounting Principle – Revenue Recognition

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. We adopted this ASU during the quarter ended March 2, 2019 using the modified retrospective method of adoption. As a result of the adoption of this ASU, we recorded an increase to opening retained earnings of $1,776 as of December 1, 2018 related to accelerated recognition for arrangements where we provide shipping and handling services after control of the goods has transferred to the customer. Prior periods were not restated. We have included the disclosures required by this ASU in Note 16.

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 were adopted during the quarter ended March 2, 2019 with ASU No. 2014-09 as discussed above.

8

Change in Accounting Principle – Income Tax Impact of Intra-Entity Transfers of Assets Other Than Inventory

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. We adopted this ASU during the quarter ended March 2, 2019. We recorded a decrease to opening retained earnings of $733 as of December 1, 2018 as a result of the adoption of this ASU.

New Accounting Pronouncements

In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. This ASU provides practical expedients and exception for applying U.S. GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. This ASU is applicable to our contracts and hedging relationships that reference LIBOR. The amendments may be applied through December 31, 2022. We will apply this guidance to transactions and modifications of these arrangements.

In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. This ASU simplifies the accounting for income taxes by clarifying and amending existing guidance related to the recognition of franchise tax, the evaluation of a step up in the tax basis of goodwill, and the effects of enacted changes in tax laws or rates in the effective tax rate computation, among other clarifications. Our effective date for adoption of this ASU is our fiscal year beginning November 28, 2021 with early adoption permitted. We have evaluated the effect that this guidance will have on our Consolidated Financial Statements and determined it will not have a material impact.

In June 2016, the FASB issued 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. The FASB also issued ASU No. 2018-19, Codification Improvements to Topic 326, Financial Instruments - Credit Losses, in November 2018, ASU No. 2019-04, Codification Improvements to Topic 326, Financial Instruments, in April 2019 and ASU No. 2019-11, Codification Improvements to Topic 326, Financial Instruments, in November 2019. ASU No. 2018-19 clarifies that receivables arising from operating leases are within the scope of Topic 842, Leases. ASU No. 2019-04 and ASU No. 2019-11 clarify various scoping and other issues arising from ASU No. 2016-13. The amendments in this ASU affect the guidance in ASU No. 2016-13 and are effective in the same timeframe as ASU No. 2016-13. Our effective date for adoption of these ASUs is our fiscal year beginning November 29, 2020. We are currently evaluating the effect that these ASUs will have on our Consolidated Financial Statements.

Note 2: Acquisitions and Divestiture

D.H.M. Adhesives, Inc.

On February 3, 2020, we acquired certain assets of D.H.M. Adhesives, Inc. (“D.H.M.”) for approximately $9,500 which was funded through existing cash. In addition, the agreement requires us to pay contingent consideration of up to approximately $8,100 based upon a formula related to revenue during the fiscal years ended November 27, 2021 and December 3, 2022. D.H.M., headquartered in Calhoun, Georgia, is a provider of hotmelt adhesives. The acquisition fair value measurement was preliminary as of February 29, 2020, which includes goodwill of $1,071 and customer relationship intangible of $11,900. The fair value of the contingent consideration as of the date of acquisition was $5,000. See Note 13 for further discussion of the fair value of the contingent consideration. Goodwill is deductible for tax purposes. D.H.M. and the related goodwill are reported in our Hygiene, Health and Consumable Adhesives (“HHC”) operating segment. The D.H.M acquisition does not represent a material business combination, and therefore pro forma financial information is not provided.

9

Ramapo Sales and Marketing, Inc.

On May 17, 2019, we acquired certain assets from a window and insulating glass sealants sales and distribution company, Ramapo Sales and Marketing, Inc. (“Ramapo”), headquartered in Charleston, South Carolina. This acquisition supports the integration of the insulating glass business that we acquired as part of the Royal Adhesives acquisition. The purchase price of $8,292 was funded through existing cash. In addition, we are required to pay up to $3,400 in contingent consideration based upon financial results for the twelve months ended December 31, 2019. Existing receivables of $2,166 from Ramapo were effectively settled as a result of the acquisition. The acquisition fair value measurement was preliminary as of February 29, 2020, which includes goodwill of $165, customer relationship intangible of $8,800, and additional acquired assets of $4,148. The fair value of the contingent consideration is $2,700. Goodwill is deductible for tax purposes. Ramapo and the related goodwill are reported in our Engineering Adhesives (“EA”) operating segment.

Note 3: Restructuring Actions

The Company has approved restructuring plans consisting of consolidation plans, organizational changes and other actions related to the reorganization of our business into three segments, the integration of the operations of Royal Adhesives with the operations of the Company, and other actions to optimize operations. The following table summarizes the pre-tax distribution of charges under these restructuring plans by income statement classification:

	Three Months Ended
	February 29, 2020			March 2, 2019
Cost of sales	$	60		$	376
Selling, general and administrative		(17	)		1,077
	$	43		$	1,453

The restructuring charges are all recorded in Corporate Unallocated.

A summary of the restructuring liability is presented below:

	Employee-Related			Asset-Related			Other			Total
Balance at December 1, 2018	$	4,256		$	-		$	-		$	4,256
Expenses incurred		9,140			1,929			3,466			14,535
Non-cash charges		-			(968	)		-			(968	)
Cash payments		(3,494	)		(961	)		(2,542	)		(6,997	)
Foreign currency translation		(72	)		-			-			(72	)
Balance at November 30, 2019	$	9,830		$	-		$	924		$	10,754
Expenses incurred		(379	)		-			422			43
Cash payments		(2,666	)		-			(759	)		(3,425	)
Foreign currency translation		2			-			-			2
Balance at February 29, 2020	$	6,787		$	-		$	587		$	7,374

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 in the Consolidated Balance Sheets.

10

Note 4: Inventories

The composition of inventories is as follows:

	February 29,		November 30,
	2020		2019
Raw materials	$	171,896	$	150,338
Finished goods		209,079		186,929
Total inventories	$	380,975	$	337,267

Note 5: Goodwill and Other Intangible Assets

The goodwill activity for the three months ended February 29, 2020 is presented below:

	Hygiene, Health and Consumable		Engineering			Construction
	Adhesives		Adhesives			Adhesives			Total
Balance at November 30, 2019	$	321,274	$	649,555		$	310,979		$	1,281,808
Acquisition		1,071		(746	)		-			325
Currency impact		1,489		(2,270	)		(103	)		(884	)
Balance at February 29, 2020	$	323,834	$	646,539		$	310,876		$	1,281,249

As discussed in Note 16, as of the beginning of fiscal 2020, we realigned our operating segment structure and now have three reportable segments: Hygiene, Health and Consumable Adhesives, Engineering Adhesives and Construction Adhesives. We allocated goodwill within our reporting units to reflect this realignment using the relative fair value approach.

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

	February 29, 2020
Amortizable Intangible Assets	Purchased Technology and Patents			Customer Relationships			Trade Names			Other			Total
Original cost	$	110,212		$	924,540		$	62,539		$	11,421		$	1,108,712
Accumulated amortization		(45,951	)		(236,848	)		(25,964	)		(4,107	)		(312,870	)
Net identifiable intangibles	$	64,261		$	687,692		$	36,575		$	7,314		$	795,842

	November 30, 2019
Amortizable Intangible Assets	Purchased Technology and Patents			Customer Relationships			Trade Names			Other			Total
Original cost	$	109,967		$	913,968		$	62,537		$	27,453		$	1,113,925
Accumulated amortization		(43,351	)		(223,563	)		(24,819	)		(23,273	)		(315,006	)
Net identifiable intangibles	$	66,616		$	690,405		$	37,718		$	4,180		$	798,919

Amortization expense with respect to amortizable intangible assets was $17,990 and $19,212 for the three months ended February 29, 2020 and March 2, 2019, respectively.

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

	Remainder
Fiscal Year	2020		2021		2022		2023		2024		Thereafter
Amortization Expense	$	52,567	$	69,025	$	67,533	$	64,673	$	59,892	$	482,152

Non-amortizable intangible assets as of February 29, 2020 and November 30, 2019 are $480 for both years and are related to trademarks and trade names.

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Note 6: Leases

We adopted ASU No. 2016-02 and related standards (collectively, “ASC 842”), which replaced previous lease accounting guidance, during the first quarter ended February 29, 2020 using the modified retrospective method of adoption. As a result of electing this transition method, prior periods have not been restated. The adoption of ASC 842 resulted in the recording of right of use assets and associated lease liabilities of approximately $28,254 each as of the first day of the quarter ended February 29, 2020. ASC 842 did not have a material impact on our Consolidated Statement of Income. We elected the package of practical expedients permitted under the transition guidance within ASC 842, which includes not reassessing lease classification of existing leases. We did not elect the hindsight practical expedient.

As a lessee, the Company leases office, manufacturing and warehouse space and equipment. Certain lease agreements include rental payments adjusted annually based on changes in an inflation index. Our leases do not contain material residual value guarantees or material restrictive covenants. Lease expense is recognized on a straight-line basis over the lease term. We determine if an arrangement is a lease upon inception. A contract is or contains a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The right to control the use of an asset includes the right to obtain substantially all of the economic benefits of the underlying asset and the right to direct how and for what purpose the asset is used.

Operating lease right-of-use assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. The discount rate used to calculate present value is the Company’s incremental borrowing rate. We determine the incremental borrowing rate for each lease based primarily on its lease term and the economic environment of the applicable country or region.

Certain leases include one or more options to renew, with terms that can extend the lease term up to five years. We include options to renew the lease as part of the right of use lease asset and liability when it is reasonably certain we will exercise the option. In addition, certain leases contain termination options with an associated penalty. In general, the Company is not reasonably certain to exercise such options.

For the measurement and classification of its lease agreements, we group lease and non-lease components into a single lease component for all underlying asset classes. Variable lease payments primarily include payments for non-lease components, such as maintenance costs, payments for leased assets used beyond their non-cancelable lease term as adjusted for contractual options to terminate or renew, and payments for non-components such as sales tax. Certain leases contain immaterial variable lease payments based on usage.

We also enter into insignificant finance leases.

The components of lease expense are as follows:

	Three Months Ended
	February 29,
	2020
Operating lease cost	$	3,261
Variable lease cost		758
Total net lease cost	$	4,019

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Supplemental balance sheet information related to leases is as follows:

			Three Months Ended
	Location on		February 29,
	Balance Sheet		2020
Operating leases:
Operating lease right of use assets		Other assets	$	26,669
Current operating lease liabilities		Other accrued expenses	$	9,477
Noncurrent operating lease liabilities		Other liabilities		17,068
Total operating lease liabilities			$	26,545

The weighted average remaining lease term is 4.5 years and the weighted average discount rate is 3.7% as of February 29, 2020. 

Supplemental cash flow information and other related to leases is as follows:

	Three Months Ended
	February 29,
	2020
Cash paid amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	2,230
Right of use assets obtained in exchange for lease liabilities:
Operating leases	$	521

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Maturities of lease liabilities as follows:

Fiscal Year	Amount
Remainder of 2020	$	8,378
2021		7,078
2022		4,419
2023		3,278
2024		2,283
2025 and beyond		3,376
Total		28,812
Less: amounts representing interest		(2,267	)
Present value of future minimum payments		26,545
Less: current obligations		(9,477	)
Noncurrent operating lease liabilities	$	17,068

Disclosures related to periods prior to adoption of new lease standard

The minimum lease payments, related to buildings, equipment and vehicles, that are expected to be made in each of the years indicated based on operating leases in effect at November 30, 2019 were:

Fiscal Year	Remainder 2020		2021		2022		2023		2024 and Beyond		Total Minimum Lease Payments
Operating leases	$	11,492	$	7,984	$	5,497	$	4,686	$	8,217	$	37,876

Rent expense for all operating leases, which includes minimum lease payments and other charges such as common area maintenance fees, was $19,618 and $20,620 in 2019 and 2018, respectively.

Note 7: Accounting for Share-Based Compensation

Overview 

We have various share-based compensation programs which provide for equity awards including non-qualified stock options, incentive 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 November 30, 2019.

Grant-Date Fair Value 

We use the Black-Scholes option pricing model to calculate the grant-date fair value of stock option awards. The fair value of options granted during the three months ended February 29, 2020 and March 2, 2019 was calculated using the following weighted average assumptions:

	Three Months Ended
	February 29, 2020				March 2, 2019
Expected life (in years)			5.00				4.75
Weighted-average expected volatility			24.29%				24.25%
Expected volatility		24.29%	-	24.30%		24.25%	-	24.33%
Risk-free interest rate			1.50%			2.51%	-	2.55%
Weighted-average expected dividend yield			1.36%				1.40
Expected dividend yield range		1.35%	-	1.42%		1.26%	-	1.41%
Weighted-average fair value of grants			$9.76				$9.80

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.

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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 was $4,703 and $5,906 for the three months ended February 29, 2020 and March 2, 2019, respectively. All share-based compensation expense was recorded as selling, general and administrative (SG&A) expense.

As of February 29, 2020, there was $13,766 of unrecognized compensation costs related to unvested stock option awards, which is expected to be recognized over a weighted-average period of 1.1 years.  Unrecognized compensation costs related to unvested restricted stock units was $14,654, which is expected to be recognized over a weighted-average period of 1.4 years.

Stock Option Activity

The stock option activity for the three months ended February 29, 2020 is presented below:

				Average
	Options			Exercise Price
Outstanding at November 30, 2019		5,060,310		$	46.04
Granted		1,021,629			48.21
Exercised		(25,594	)		35.44
Forfeited or cancelled		(73,601	)		53.71
Outstanding at February 29, 2020		5,982,744		$	46.36

The fair value of options granted during the three months ended February 29, 2020 and March 2, 2019 was $9,961 and $9,331, respectively. Total intrinsic value of options exercised during the three months ended February 29, 2020 and March 2, 2019 was $346 and $910, 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 three months ended February 29, 2020 and March 2, 2019 were $907 and $1,065, respectively.

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Restricted Stock Activity

The nonvested restricted stock activity for the three months ended February 29, 2020 is presented below:

						Weighted-
				Weighted-		Average
				Average		Remaining
				Grant		Contractual
				Date Fair		Life
	Units			Value		(in Years)
Nonvested at November 30, 2019		487,997		$	46.56		0.8
Granted		205,383			47.90		2.9
Vested		(206,856	)		46.73		-
Forfeited		(39,608	)		47.73		2.5
Nonvested at February 29, 2020		446,916		$	46.99		1.4

Total fair value of restricted stock vested during the three months ended February 29, 2020 and March 2, 2019 was $9,667 and $7,846, respectively. The total fair value of nonvested restricted stock at February 29, 2020 was $21,003.

We repurchased 66,598 and 57,917 restricted stock shares during the three months ended February 29, 2020 and March 2, 2019, respectively, related 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 unit activity for the three months ended February 29, 2020 is presented below:

	Non-employee
	Directors		Employees			Total
Units outstanding November 30, 2019		525,660		36,664			562,324
Participant contributions		5,901		3,055			8,956
Company match contributions		590		306			896
Payouts		-		(5,710	)		(5,710	)
Units outstanding February 29, 2020		532,151		34,315			566,466

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

Note 8: Components of Net Periodic Benefit related to Pension and Other Postretirement Benefit Plans

	Three Months Ended February 29, 2020 and March 2, 2019
													Other
	Pension Benefits												Postretirement
	U.S. Plans						Non-U.S. Plans						Benefits
Net periodic cost (benefit):	2020			2019			2020			2019			2020			2019
Service cost	$	-		$	1		$	725		$	568		$	18		$	24
Interest cost		2,935			3,673			794			1,184			284			387
Expected return on assets		(6,440	)		(6,326	)		(2,842	)		(2,587	)		(1,994	)		(1,753	)
Amortization:
Prior service cost (benefit)		(1	)		3			16			16			-			-
Actuarial loss		1,799			1,169			950			789			15			8
Net periodic benefit	$	(1,707	)	$	(1,480	)	$	(357	)	$	(30	)	$	(1,677	)	$	(1,334	)

Service cost is included with employee compensation cost in cost of sales and selling, general and administrative expenses in the Consolidated Statements of Income.  The components of our net periodic defined benefit pension and postretirement benefit costs other than service cost are presented in other income (expense), net in the Consolidated Statements of Income.

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Note 9: Accumulated Other Comprehensive Income (Loss)

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

	Three Months Ended February 29, 2020												Three Months Ended March 2, 2019
	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		-			-		$	9,895		$	11			-			-		$	12,244		$	4
Foreign currency translation adjustment¹	$	(2,780	)		-			(2,780	)		(1	)	$	17,693			-			17,693			6
Defined benefit pension plans adjustment²		2,779		$	(693	)		2,086			-			1,986		$	(504	)		1,482			-
Interest rate swap³		(11,900	)		2,901			(8,999	)		-			(15,259	)		3,815			(11,444	)		-
Cash flow hedges³		4,746			(102	)		4,644			-			4,284			(198	)		4,086			-
Other comprehensive income (loss)	$	(7,155	)	$	2,106			(5,049	)		(1	)	$	8,704		$	3,113			11,817			6
Comprehensive income (loss)							$	4,846		$	10								$	24,061		$	10

¹ Income taxes are not provided for foreign currency translation relating to permanent investments in international subsidiaries.

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 and SG&A expense.

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

The components of accumulated other comprehensive loss is as follows:

	February 29, 2020
	Total			H.B. Fuller Stockholders			Non- controlling Interests
Foreign currency translation adjustment	$	(150,600	)	$	(150,496	)	$	(104	)
Interest rate swap, net of taxes of ($7,201)		(22,337	)		(22,337	)		-
Cash flow hedges, net of taxes of $125		6,407			6,407			-
Defined benefit pension plans adjustment, net of taxes of $81,198		(163,882	)		(163,882	)		-
Reclassification of AOCI tax effects		(18,341	)		(18,341	)		-
Accumulated other comprehensive loss	$	(348,753	)	$	(348,649	)	$	(104	)

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	November 30, 2019
	Total			H.B. Fuller Stockholders			Non-controlling Interests
Foreign currency translation adjustment	$	(147,821	)	$	(147,716	)	$	(105	)
Interest rate swap, net of taxes of ($4,300)		(13,338	)		(13,338	)		-
Cash flow hedges, net of taxes of $21		1,763			1,763			-
Defined benefit pension plans adjustment, net of taxes of $81,891		(165,968	)		(165,968	)		-
Reclassification of AOCI tax effects		(18,341	)		(18,341	)		-
Accumulated other comprehensive loss	$	(343,705	)	$	(343,600	)	$	(105	)

Note 10: Income Taxes

As of  February 29, 2020, we had a liability of $10,495 recorded for gross unrecognized tax benefits (excluding interest) compared to $8,946 as of November 30, 2019. As of February 29, 2020, we had accrued $1,147 of gross interest relating to unrecognized tax benefits. For the three months ended February 29, 2020, our recorded liability for gross unrecognized tax benefits increased by $1,549.

Note 11: 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
	February 29,		March 2,
(Shares in thousands)	2020		2019
Weighted-average common shares - basic		51,295		50,752
Equivalent shares from share-based compensations plans		1,285		1,149
Weighted-average common and common equivalent shares - diluted		52,580		51,901

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 and (b) the amount of unearned share-based compensation costs attributed to future services. 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.

Share-based compensation awards for 3,606,776 and 3,002,073 shares for the three months ended February 29, 2020 and March 2, 2019, respectively, were excluded from diluted earnings per share calculations because they were antidilutive.

Note 12: 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 Consolidated Statement of Cash Flows in the same category as the cash flows from the items subject to designated hedge or undesignated (economic) hedge relationships. The company evaluates 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.

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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 monitor the credit quality of each of these banks on a 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

As of February 29, 2020, we had the following cash flow hedges: 1) six cross-currency swap agreements effective October 20, 2017 to convert a notional amount of $401,200 of foreign currency denominated intercompany loans into U.S. dollars and maturing in 2021 and 2022 and 2) one cross-currency swap agreement effective February 24, 2017 to convert a notional amount of $42,600 of foreign currency denominated intercompany loans into U.S. dollars and maturing on October 7, 2020.

As of February 29, 2020, the combined fair value of the swaps was an asset of $31,332 and was included in other assets in the 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 Consolidated Balance Sheets and in other net cash provided by operating activities in the Consolidated Statement of Cash Flows. The differences 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 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 amount in accumulated other comprehensive income (loss) related to cross-currency swaps was a gain of $6,407 as of February 29, 2020. The estimated net amount of the existing gain that is reported in accumulated other comprehensive income (loss) as of February 29, 2020 that is expected to be reclassified into earnings within the next twelve months is $2,848. As of February 29, 2020, 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 February 29, 2020:

	Fiscal Year of Expiration		Interest Rate		Notional Value		Fair Value
Pay EUR		2020		1.95%	$	42,600	$	(1,396	)
Receive USD				4.3038%
Pay EUR		2021		2.75%	$	133,340	$	10,214
Receive USD				4.9330%
Pay EUR		2022		3.00%	$	267,860	$	22,514
Receive USD				5.1803%
Total					$	443,800	$	31,332

On March 9, 2018, we entered into an interest rate swap agreement to convert $100,000 of our $2,150,000 Term Loan B issued on October 20, 2017 to a fixed interest rate of 4.490 percent. On February 27, 2018, we entered into an interest rate swap agreement to convert $200,000 of our $2,150,000 Term Loan B to a fixed interest rate of 4.589 percent. On October 20, 2017, we entered into interest rate swap agreements to convert $1,050,000 of our $2,150,000 Term Loan B to a fixed interest rate of 4.0275 percent. The combined fair value of the interest rate swaps in total was a liability of $29,537 at February 29, 2020 and was included in other liabilities in the Consolidated Balance Sheets. The swaps were designated for hedge accounting treatment as cash flow hedges. We are applying the hypothetical derivative method to assess hedge effectiveness for these interest rate swaps. Changes in the fair value of a hypothetically perfect swap with terms that match the critical terms of our $1,350,000 variable rate Term Loan B are compared with the change in the fair value of the swaps.

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On April 23, 2018, we amended our Term Loan B Credit Agreement to reduce the interest rate from LIBOR plus 2.25 percent to LIBOR plus 2.00 percent. Fixed interest rates related to swap agreements disclosed have been updated to reflect the amendment.

The amounts of pretax gains (losses) recognized in Comprehensive Income related to derivative instruments designated as cash flow hedges are as follows:

	Three Months Ended
	February 29, 2020			March 2, 2019
Cross-currency swap contracts	$	4,746		$	4,284
Interest rate swap contracts		(11,900	)		(15,259	)

Fair Value Hedges

On February 14, 2017, we entered into interest rate swap agreements to convert $150,000 of our $300,000 Public Notes that were issued on February 14, 2017 to a variable interest rate of 1-month LIBOR plus 1.86 percent. The combined fair value of the interest rate swaps in total was an asset of $11,122 at February 29, 2020, and was included in other assets in the Consolidated Balance Sheets. The swaps were designated for hedge accounting treatment as fair value hedges. We are applying the hypothetical derivative method to assess hedge effectiveness for these interest rate swaps. Changes in the fair value of a hypothetically perfect swap with terms that match the critical terms of our $150,000 fixed rate Public Notes are compared with the change in the fair value of the swaps.

Derivatives Not Designated As Hedging Instruments

The company uses foreign currency forward contracts to offset its exposure to the change in value of certain foreign currency denominated assets and liabilities held at foreign subsidiaries that are remeasured at the end of each period. Although the contracts are effective economic hedges, they are not designated as accounting hedges. Foreign currency forward contracts are recorded as assets and liabilities on the balance sheet at fair value. Changes in the value of these derivatives are recognized immediately in earnings, thereby offsetting the current earnings effect of the related foreign currency denominated assets and liabilities. See Note 13 for fair value amounts of these derivative instruments.

As of February 29, 2020, we had forward foreign currency contracts maturing between March 2, 2020 and January 19, 2021. The mark-to-market effect associated with these contracts was largely offset by the underlying transaction gains and losses resulting from the foreign currency exposures for which these contracts relate.

The amounts of pretax gains (losses) recognized in other income, net related to derivative instruments not designated as hedging instruments for the three months ended February 29, 2020 and March 2, 2019 were $3,230 and $4,076, respectively.

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 February 29, 2020, there were no significant concentrations of credit risk.

Note 13: 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 February 29, 2020 and November 30, 2019, and indicates the fair value hierarchy of the valuation techniques utilized to determine such fair value.

	February 29,		Fair Value Measurements Using:
Description	2020		Level 1		Level 2		Level 3
Assets:
Marketable securities	$	3,934	$	3,934	$	-	$	-
Foreign exchange contract assets		7,026		-		7,026		-
Interest rate swaps, fair value hedges		11,122		-		11,122		-
Cross-currency cash flow hedges		31,332		-		31,332		-
Liabilities:
Foreign exchange contract liabilities	$	3,797	$	-	$	3,797	$	-
Interest rate swaps, cash flow hedges		29,537		-		29,537		-
Contingent consideration		5,000						5,000

	November 30,		Fair Value Measurements Using:
Description	2019		Level 1		Level 2		Level 3
Assets:
Marketable securities	$	19,430	$	19,430	$	-	$	-
Foreign exchange contract assets		1,227		-		1,227		-
Interest rate swaps, fair value hedges		5,741		-		5,741		-
Cross-currency cash flow hedges		26,896		-		26,896		-
Liabilities:
Foreign exchange contract liabilities	$	1,800	$	-	$	1,800	$	-
Interest rate swaps, cash flow hedges		17,637		-		17,637		-

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, 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 valuation of our contingent consideration related to the acquisition of D.H.M. resulted in a fair value of $5,000.

	Amounts
Balance at November 30, 2019	$	-
Acquisitions		5,000
Balance at February 29, 2020	$	5,000

Long-term debt had an estimated fair value of $1,987,586 and $2,016,516 as of February 29, 2020 and November 30, 2019, 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.

Note 14: Share Repurchase Program

On April 6, 2017, the Board of Directors authorized a share repurchase program of up to $200,000 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 reduce our common stock for the par value of the shares with the excess being applied against additional paid-in capital. This authorization replaces the September 30, 2010 authorization to repurchase shares.

We did not repurchase any shares under this authorization during the three months ended February 29, 2020 and March 2, 2019.

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Note 15: 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 (CERCLA) 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 an undiscounted financial provision. We recorded liabilities of $7,938 and $8,535 as of February 29, 2020 and November 30, 2019, respectively, for probable and reasonably estimable environmental remediation costs. Of the amount reserved, $4,061 and $4,117 as of February 29, 2020 and November 30, 2019, respectively, is attributable to a facility we own in Simpsonville, South Carolina as a result of our Royal Adhesives acquisition that is a designated site under CERCLA.

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.

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

	Three Months Ended				3 Years Ended
	February 29, 2020		March 2, 2019		November 30, 2019
Lawsuits and claims settled		2		1		24
Settlement amounts	$	30	$	12	$	2,487
Insurance payments received or expected to be received	$	21	$	8	$	1,937

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.

During 2018, we retained legal counsel to conduct an internal investigation of the possible resale of our hygiene products into Iran by certain customers of our subsidiaries in Turkey (beginning in 2011) and India (beginning in 2014), in possible violation of the economic sanctions against Iran administered by the U.S. Department of the Treasury’s Office of Foreign Assets (“OFAC”) and our compliance policy. The sales to these customers represented less than one percent of our net revenue in each of our 2017 and 2018 fiscal years. The sales to the customers who were reselling our products into Iran ceased during fiscal year 2018 and we do not currently conduct any business in Iran. In January 2018, we voluntarily contacted OFAC to advise it of this internal investigation and our intention to cooperate fully with OFAC and, in September 2018, we submitted the results and findings of our investigation to OFAC. We have not yet received a response from OFAC. At this time, we cannot predict the outcome or effect of the investigation, however, based on the results of our investigation to date, we believe we could incur penalties ranging from zero to $10,000.

Note 16: 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. Corporate assets are not allocated to the operating segments. Operating results of each of our 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.

As of November 30, 2019, we had five reportable segments: Americas Adhesives, EIMEA, Asia Pacific, Construction Adhesives and Engineering Adhesives. As of the beginning of fiscal 2020, we realigned our operating segment structure and now have three reportable segments: Hygiene, Health and Consumable Adhesives, Engineering Adhesives and Construction Adhesives. The change in operating segments is based on how we have organized the company to make operating decisions and assess business performance. Prior period segment information has been recast retrospectively to reflect the realignment.

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

	Three Months Ended
	February 29, 2020					March 2, 2019
			Segment					Segment
	Trade		Operating			Trade		Operating
	Revenue		Income (Loss)			Revenue		Income (Loss)
Hygiene, Health and Consumable Adhesives	$	312,512	$	22,664		$	319,854	$	20,890
Engineering Adhesives		248,895		15,365			264,372		21,986
Construction Adhesives		85,157		(1,373	)		82,790		(1,656	)
Total segment		646,564		36,656			667,016		41,220
Corporate Unallocated		-		(7,903	)		5,919		(7,008	)
Total	$	646,564	$	28,753		$	672,935	$	34,212

Consistent with our internal management reporting, Corporate Unallocated amounts in the table above include charges that are not allocated to the Company’s reportable segments.  For the three months ended March 2, 2019, Corporate Unallocated also includes operating results related to our surfactants and thickeners business, which we divested during the third quarter of 2019.

The table below provides a reconciliation of segment operating income to income before income taxes and income from equity method investments:

	Three Months Ended
	February 29,			March 2,
	2020			2019
Operating income	$	28,753		$	34,212
Other income, net		4,969			3,365
Interest expense		(22,757	)		(26,807	)
Interest income		2,918			3,053
Income before income taxes and income from equity method investments	$	13,883		$	13,823

The table below provides total assets of each of our operating segments as of November 30, 2019:

Total assets	November 30, 2019
Hygiene, Health and Consumable Adhesives	$	1,253,864
Engineering Adhesives		1,610,748
Construction Adhesives		799,995
Corporate		321,127
Total	$	3,985,734

We view the following disaggregation of revenue by geographic region as useful to understanding the composition of revenue recognized during the respective reporting periods:

	Three Months Ended February 29, 2020
	Hygiene, Health
	and Consumable		Engineering		Construction		Corporate
	Adhesives		Adhesives		Adhesives		Unallocated		Total
Americas	$	173,275	$	105,373	$	74,258	$	-	$	352,906
EIMEA		92,382		83,676		6,126		-		182,184
Asia Pacific		46,855		59,846		4,773		-		111,474
	$	312,512	$	248,895	$	85,157	$	-	$	646,564

	Three Months Ended March 2, 2019
	Hygiene, Health
	and Consumable		Engineering		Construction		Corporate
	Adhesives		Adhesives		Adhesives		Unallocated		Total
Americas	$	174,865	$	105,621	$	72,346	$	5,919	$	358,751
EIMEA		95,428		93,800		4,881		-		194,109
Asia Pacific		49,561		64,951		5,563		-		120,075
	$	319,854	$	264,372	$	82,790	$	5,919	$	672,935

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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 November 30, 2019 for important background information related to our business.

Net revenue in the first quarter of 2020 decreased 3.9 percent from the first quarter of 2019. Net revenue decreased 0.2 percent due to sales volume, 1.1 percent due to unfavorable product pricing and 0.9 percent due to the divestiture of our surfactants and thickeners business. Negative currency effects of 1.7 percent compared to the first quarter of 2019 were primarily driven by the weaker Brazilian real, Euro, Argentinian peso, Turkish lira, Chinese renminbi and Australian dollar compared to the U.S. dollar. Gross profit margin decreased 40 basis points primarily due to lower sales price and unfavorable mix partially offset by decreased raw material costs.

Net income attributable to H.B. Fuller in the first quarter of 2020 was $9.9 million compared to $12.2 million in the first quarter of 2019. On a diluted earnings per share basis, the first quarter of 2020 was $0.19 per share compared to $0.24 per share for the first quarter of 2019.

Restructuring Plan

2020 Restructuring Plan

During the fourth quarter of 2019, we approved a restructuring plan related to organizational changes and other actions to optimize operations in connection with the realignment of the Company into three segments (“2020 Restructuring Plan”). In implementing the 2020 Restructuring Plan, we expect to incur costs of approximately $9.0 million to $11.0 million ($7.1 million to $8.7 million after-tax), which includes (i) cash expenditures of approximately $6.0 million to $8.0 million ($4.8 million to $6.4 million after tax) for severance and related employee costs globally and (ii) $3.0 million ($2.3 million after-tax) related to streamlining of processes and other restructuring-related costs. All restructuring costs are expected to be cash costs. We have incurred costs of $9.8 million under this plan as of February 29, 2020. The 2020 Restructuring Plan was implemented in the fourth quarter of 2019 and is currently expected to be completed by mid-year of fiscal year 2021.

Royal Adhesives Restructuring Plan

During the first quarter of 2018, we approved a restructuring plan consisting of consolidation plans, organizational changes and other actions related to the integration of the operations of Royal Adhesives with the operations of the Company (the “Royal Adhesives Restructuring Plan”). In implementing the Royal Adhesives Restructuring Plan, we have incurred costs of approximately $10.5 million, which includes (i) cash expenditures of approximately $6.2 million for severance and related employee costs globally and (ii) other costs of approximately $4.3 million related to the optimization of production facilities, streamlining of processes and accelerated depreciation of long-lived assets. Approximately $8.0 million of the costs were cash costs. The Royal Adhesives Restructuring Plan was implemented in the first quarter of 2018 and is substantially complete.

Results of Operations

Net revenue:

	Three Months Ended
	February 29,		March 2,		2020 vs
($ in millions)	2020		2019		2019
Net revenue	$	646.6	$	672.9		(3.9%	)

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We review variances in net revenue in terms of changes related to sales volume, product pricing, business acquisitions and divestitures (M&A) and changes in foreign currency exchange rates. The following table shows the net revenue variance analysis for the first quarter of 2020 compared to the same period in 2019:

	Three Months Ended February 29, 2020
	vs March 2, 2019
Organic growth		(1.3%	)
M&A		(0.9%	)
Currency		(1.7%	)
Total		(3.9%	)

Organic growth was a negative 1.3 percent in the first quarter of 2020 compared to the first quarter of 2019. The 1.3 percent negative organic growth in the first quarter of 2020 was driven by a 4.4 percent decrease in Engineering Adhesives, partially offset by 3.2 percent growth in Construction Adhesives. HHC was flat. The decrease is predominately driven by a decrease in sales price. The 0.9 percent decrease related to M&A is due to the sale of our surfactants and thickeners business. The negative 1.7 percent currency impact was primarily driven by a weaker Brazilian real, Euro, Argentinian peso, Turkish lira, Chinese renminbi and Australian dollar compared to the U.S. dollar.

Cost of sales:

	Three Months Ended
	February 29,		March 2,		2020 vs
($ in millions)	2020		2019		2019
Raw materials	$	345.2	$	361.1		(4.4%	)
Other manufacturing costs		131.1		131.9		(0.6%	)
Cost of sales	$	476.3	$	493.0		(3.4%	)
Percent of net revenue		73.7%		73.3%

Cost of sales in the first quarter of 2020 compared to the first quarter of 2019 increased 40 basis points as a percentage of net revenue. Raw material cost as a percentage of net revenue decreased 30 basis points in the first quarter of 2020 compared to the first quarter of 2019 primarily due to decreased raw material costs. Other manufacturing costs as a percentage of revenue increased 70 basis points in the first quarter of 2020 compared to the first quarter of 2019 primarily due to the impact of lower net revenue.

Gross profit:

	Three Months Ended
	February 29,		March 2,		2020 vs
($ in millions)	2020		2019		2019
Gross profit	$	170.3	$	179.9		(5.3%	)
Percent of net revenue		26.3%		26.7%

Gross profit in the first quarter of 2020 decreased 5.3 percent and gross profit margin decreased 40 basis points compared to the first quarter of 2019. The decrease in gross profit margin was primarily due to lower sales price and unfavorable mix partially offset by decreased raw material costs.

Selling, general and administrative (SG&A) expenses:

	Three Months Ended
	February 29,		March 2,		2020 vs
($ in millions)	2020		2019		2019
SG&A	$	141.5	$	145.7		(2.9%	)
Percent of net revenue		21.9%		21.7%

SG&A expenses for the first quarter of 2020 decreased $4.2 million, or 2.9 percent, compared to the first quarter of 2019. The decrease is primarily due to cost savings realized from our business realignment to three segments.

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Other income (expense), net:

	Three Months Ended
	February 29,		March 2,		2020 vs
($ in millions)	2020		2019		2019
Other income (expense), net	$	5.0	$	3.4		47.1%

Other income, net in the first quarter of 2020 included $4.5 million of net defined benefit pension benefits, $0.3 of other income and $0.2 million of currency transaction gains. Other income, net in the first quarter of 2019 included $3.4 million of net defined benefit pension benefits and $0.3 million of other income offset by $0.3 million of currency transaction losses.

Interest expense:

	Three Months Ended
	February 29,		March 2,		2020 vs
($ in millions)	2020		2019		2019
Interest expense	$	22.8	$	26.8		(14.9%	)

Interest expense in the first quarter of 2020 was $22.8 million compared to $26.8 million in the first quarter of 2019. Interest expense in the first quarter of 2020 compared to the first quarter of 2019 was lower due to lower U.S. debt balances. We capitalized $0.1 million of interest expense in both the first quarter of 2020 and 2019.

Interest income:

	Three Months Ended
	February 29,		March 2,		2020 vs
($ in millions)	2020		2019		2019
Interest income	$	2.9	$	3.1		(6.5%	)

Interest income in the first quarter of 2020 was $2.9 million. Interest income in the first quarter of 2019 was $3.1 million.

Income taxes:

	Three Months Ended
	February 29,		March 2,		2020 vs
($ in millions)	2020		2019		2019
Income taxes	$	5.6	$	3.1		80.6%
Effective tax rate		40.4%		22.7%

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Income tax expense of $5.6 million in the first quarter of 2020 includes $2.0 million of discrete tax expense. Excluding the discrete tax expense of $2.0 million related to various foreign tax matters, the overall effective tax rate was 25.9 percent. Income tax expense of $3.1 million in the first quarter of 2019 included $0.8 million of discrete tax benefit. Excluding the discrete tax benefit, the overall effective tax rate was 28.2 percent. The reduction in rate without discrete taxes relates to changes in the geographic mix of earnings.

Income from equity method investments:

	Three Months Ended
	February 29,		March 2,		2020 vs
($ in millions)	2020		2019		2019
Income from equity method investments	$	1.6	$	1.6		0.0%

The income from equity method investments relates to our 50 percent ownership of the Sekisui-Fuller joint venture in Japan.

Net income attributable to H.B. Fuller:

	Three Months Ended
	February 29,		March 2,		2020 vs
($ in millions)	2020		2019		2019
Net income attributable to H.B. Fuller	$	9.9	$	12.2		(18.9%	)
Percent of net revenue		1.5%		1.8%

The net income attributable to H.B. Fuller for the first quarter of 2020 was $9.9 million compared to $12.2 million for the first quarter of 2019. The diluted earnings per share for the first quarter of 2020 was $0.19 per share as compared to $0.24 per share for the first quarter of 2019.

Operating Segment Results

As of November 30, 2019, we had five reportable segments: Americas Adhesives, EIMEA, Asia Pacific, Construction Adhesives and Engineering Adhesives. As of the beginning of fiscal 2020, we realigned our operating segment structure and now have three reportable segments: Hygiene, Health and Consumable Adhesives, Engineering Adhesives and Construction Adhesives. The change in operating segments is based on how we have organized the company to make operating decisions and assess business performance. Prior period segment information has been recast retrospectively to reflect the realignment.

The tables below provide certain information regarding the net revenue and segment operating income of each of our operating segments.

Corporate Unallocated includes acquisition and integration-related charges, restructuring-related charges and the results of business divestitures.

Net Revenue by Segment:

	Three Months Ended
	February 29, 2020				March 2, 2019
	Net		% of		Net		% of
($ in millions)	Revenue		Total		Revenue		Total
Hygiene, Health and Consumable Adhesives	$	312.5		48%	$	319.8		48%
Engineering Adhesives		248.9		39%		264.4		39%
Construction Adhesives		85.2		13%		82.8		12%
Segment total	$	646.6		100%	$	667.0		99%
Corporate Unallocated		-		-		5.9		1%
Total	$	646.6		100%	$	672.9		100%

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Segment Operating Income (Loss):

	Three Months Ended
	February 29, 2020						March 2, 2019
($ in millions)	Segment Operating Income (Loss)			% of Total			Segment Operating Income (Loss)			% of Total
Hygiene, Health and Consumable Adhesives	$	22.7			79%		$	20.9			61%
Engineering Adhesives		15.4			53%			22.0			64%
Construction Adhesives		(1.4	)		(5%	)		(1.7	)		(5%	)
Segment total		36.7			127%			41.2			120%
Corporate Unallocated		(7.9	)		(27%	)		(7.0	)		(20%	)
Total	$	28.8			100%		$	34.2			100%

Hygiene, Health and Consumable Adhesives

	Three Months Ended
	February 29,		March 2,		2020 vs
($ in millions)	2020		2019		2019
Net revenue	$	312.5	$	319.8		(2.3%	)
Segment operating income	$	22.7	$	20.9		8.6%
Segment operating margin		7.3%		6.5%

The following table provides details of the Hygiene, Health and Consumable Adhesives net revenue variances:

	Three Months Ended February 29, 2020
	vs March 2, 2019
Organic growth		0.0%
Currency		(2.3%	)
Total		(2.3%	)

Net revenue decreased 2.3 percent in the first quarter of 2020 compared to the first quarter of 2019. Flat organic growth reflected increased sales volume offset by a decrease in product pricing. The negative currency effect was due to the weaker Brazilian real, Argentinian peso, Euro, Turkish lira, Chilean peso, Chinese renminbi and Colombian peso compared to the U.S. dollar. As a percentage of net revenue, raw material costs decreased 80 basis points due to lower raw material costs. Other manufacturing costs as a percentage of net revenue increased 20 basis points. SG&A expenses as a percentage of net revenue decreased 20 basis points. Segment operating income increased 8.6 percent and segment operating margin as a percentage of net revenue increased 80 basis points compared to the first quarter of 2019.

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Engineering Adhesives

	Three Months Ended
	February 29,		March 2,		2020 vs
($ in millions)	2020		2019		2019
Net revenue	$	248.9	$	264.4		(5.9%	)
Segment operating income	$	15.4	$	22.0		(30.0%	)
Segment operating margin		6.2%		8.3%

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

	Three Months Ended February 29, 2020
	vs March 2, 2019
Organic growth		(4.4%	)
Currency		(1.5%	)
Total		(5.9%	)

Net revenue decreased 5.9 percent in the first quarter of 2020 compared to the first quarter of 2019. The decrease in organic growth was attributable to a decrease in sales volume and product pricing. The negative currency effect was due to a weaker Euro, Chinese renminbi, Turkish lira, Brazilian real, Argentinian peso and South Korean won compared to the U.S. dollar. Raw material costs as a percentage of net revenue increased 20 basis points. Other manufacturing costs as a percentage of net revenue increased 120 basis points due to lower sales volume and unfavorable product mix. SG&A expenses as a percentage of net revenue increased 70 basis points due to lower net revenue. Segment operating income decreased 30.0 percent and segment operating margin decreased 210 basis points compared to the first quarter of 2019.

Construction Adhesives

	Three Months Ended
	February 29,			March 2,			2020 vs
($ in millions)	2020			2019			2019
Net revenue	$	85.2		$	82.8			2.9%
Segment operating loss	$	(1.4	)	$	(1.7	)		17.6%
Segment operating margin		(1.6%	)		(2.1%	)

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

	Three Months Ended February 29, 2020
	vs March 2, 2019
Organic growth		3.2%
Currency		(0.3%	)
Total		2.9%

Net revenue increased 2.9 percent in the first quarter of 2020 compared to the first quarter of 2019. The increase in organic growth was driven by higher sales volume, partially offset by unfavorable product pricing. The negative currency effect was due to the weaker Australian dollar and Euro compared to the U.S. dollar. Raw material costs as a percentage of net revenue decreased 30 basis points. Other manufacturing costs as a percentage of net revenue increased 90 basis points due to higher production costs. SG&A expenses as a percentage of net revenue decreased 110 basis points due to cost savings realized from the Company’s business realignment. Segment operating loss decreased 17.6 percent and segment operating margin increased 50 basis points compared to the first quarter of 2019.

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Corporate Unallocated

	Three Months Ended
	February 29,			March 2,			2020 vs
($ in millions)	2020			2019			2019
Net revenue	$	-		$	5.9			(100.0%	)
Segment operating income	$	(7.9	)	$	(7.0	)		12.9%
Segment operating margin		NMP			NMP

NMP = Non-meaningful percentage

Corporate Unallocated includes acquisition and integration-related charges, restructuring-related charges and the results of business divestitures.

Net revenue in Corporate Unallocated in the first quarter of 2019 included revenue from our surfactants and thickeners business that was divested during the third quarter of 2019. Segment operating loss increased 12.9 percent compared to the first quarter of 2019 reflecting increased organizational realignment costs.

Financial Condition, Liquidity and Capital Resources

Total cash and cash equivalents as of February 29, 2020 were $78.7 million compared to $112.2 million as of November 30, 2019 and $113.5 million as of March 2, 2019. The majority of the $78.7 million in cash and cash equivalents as of February 29, 2020 was held outside the United States. Total long and short-term debt was $1,973.5 million as of February 29, 2020, $1,979.1 million as of November 30, 2019 and $2,235.2 million as of March 2, 2019. The total debt to total capital ratio as measured by Total Debt divided by (Total Debt plus Total Stockholders’ Equity) was 61.8 percent as of February 29, 2020 as compared to 61.8 percent as of November 30, 2019 and 65.6 percent as of March 2, 2019.

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, 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 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 February 29, 2020, we were in compliance with all covenants of our contractual obligations as shown in the following table:

Covenant	Debt Instrument	Measurement	Result as of February 29, 2020
Secured Indebtedness / TTM EBITDA	Revolving Credit Agreement and Term Loan B Credit Agreement	Not greater than 5.9	3.8

● TTM = Trailing 12 months

● EBITDA for covenant purposes is defined as consolidated net income, plus interest expense, expense for taxes paid or accrued, depreciation and amortization, certain non-cash impairment losses, extraordinary non-cash losses incurred other than in the ordinary course of business, nonrecurring extraordinary non-cash restructuring charges and the non-cash impact of purchase accounting, expenses related to the Royal Adhesives acquisition not to exceed $40.0 million, expenses relating to the integration of Royal Adhesives during the fiscal years ending in 2017, 2018 and 2019 not exceeding $30 million in aggregate, restructuring expenses that began prior to the Royal Adhesives acquisition incurred in fiscal years ending in 2017 and 2018 not exceeding $28 million in aggregate, and non-capitalized charges relating to the SAP implementation during fiscal years ending in 2017 through 2021 not exceeding $13 million in any single fiscal year, minus extraordinary non-cash gains.  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. The full definition is set forth in the Term Loan B Credit Agreement and the Amended Revolving Credit Agreement, and can be found in the Company’s 8-K filings dated October 20, 2017 and 8-K dated November 17, 2017, respectively.

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We believe we have the ability to meet all of our contractual obligations and commitments in fiscal 2020.

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 after dividends and debt capitalization ratio.

	February 29,			March 2,
	2020			2019
Net working capital as a percentage of annualized net revenue1		19.7%			21.4%
Accounts receivable DSO (in days)2		58			57
Inventory days on hand (in days)3		70			68
Free cash flow after dividends4	$	(5.9	)	$	(21.3	)
Total debt to total capital ratio5		61.8%			65.6%

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 operating activities, less purchased property, plant and equipment and dividends paid. See reconciliation to Net cash provided by operating activities from continuing operations below.

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

Free cash flow after dividends, a non-GAAP financial measure, is defined as net cash provided by (used in) operations less purchased property, plant and equipment and dividends paid. Free cash flow after dividends is an integral financial measure used by the Company to assess its ability to generate cash in excess of its operating needs, therefore, the Company believes this financial measure provides useful information to investors. The following table reflects the manner in which free cash flow after dividends is determined and provides a reconciliation of free cash flow after dividends to net cash provided by (used in) operating activities from continuing operations, the most directly comparable financial measure calculated and reported in accordance with U.S. GAAP.

Reconciliation of "Net cash provided by operating activities" to Free cash flow after dividends

	Three Months Ended
($ in millions)	February 29, 2020			March 2, 2019
Net cash provided by operating activities	$	34.4		$	0.5
Less: Purchased property, plant and equipment		32.1			13.9
Less: Dividends paid		8.2			7.9
Free cash flow after dividends		(5.9	)		(21.3	)

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Summary of Cash Flows

Cash Flows from Operating Activities:

	Three Months Ended
	February 29,		March 2,
($ in millions)	2020		2019
Net cash provided by operating activities	$	34.4	$	0.5

Net income including non-controlling interest was $9.9 million in the first quarter of 2020 compared to $12.2 million in the first quarter of 2019. Depreciation and amortization expense totaled $34.6 million in the first quarter of 2020 compared to $36.1 million in the first quarter of 2019. Deferred income taxes was a use of cash of $4.0 million in 2020 compared to $1.4 million in the first quarter of 2019. Accrued compensation was a use of cash of $21.1 million in 2020 compared to $19.2 million last year related to lower accruals for our employee incentive plans in the current year. Other assets was a use of cash of $32.8 million in the quarter ending February 29, 2020 compared to $21.1 million in the same period last year. Other liabilities was a source of cash of $12.8 million in the first quarter of 2020 compared to a use of cash of $3.0 million in the first quarter of 2019. 

Changes in net working capital (trade receivables, inventory and trade payables) accounted for a source of cash of $41.9 million compared to a use of cash of $7.8 million last year. The table below provides the cash flow impact due to changes in the components of net working capital:

	Three Months Ended
	February 29,			March 2,
($ in millions)	2020			2019
Trade receivables, net	$	33.7		$	5.9
Inventory		(46.9	)		(21.6	)
Trade payables		55.1			7.9
Total cash flow impact	$	41.9		$	(7.8	)

● Trade Receivables, net – Trade receivables, net was a source of cash of $33.7 million and $5.9 million in the first quarter of 2020 and 2019, respectively. The higher source of cash in 2020 compared to 2019 was due to more cash collected on trade receivables in the current year compared to the prior year. The DSO were 58 days at February 29, 2020 and 57 days at March 2, 2019. 

● Inventory – Inventory was a use of cash of $46.9 million and $21.6 million in the first quarter of 2020 and 2019, respectively. The higher use of cash in 2020 is due to increasing inventory levels in 2020 compared to 2019. Inventory days on hand were 70 days as of February 29, 2020 and 68 days as of March 2, 2019.   

● Trade Payables – Trade payables was a source of cash of $55.1 million and $7.9 million in the first quarter of 2020 and 2019, respectively. The higher source of cash in 2020 compared to 2019 reflects lower payments on trade payables in the prior year.

Cash Flows from Investing Activities:

	Three Months Ended
	February 29,			March 2,
($ in millions)	2020			2019
Net cash provided by (used in) investing activities	$	(44.3	)	$	(13.7	)

Purchases of property, plant and equipment were $32.1 million during the first quarter of 2020 as compared to $13.9 million for the same period of 2019.

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Cash Flows from Financing Activities:

	Three Months Ended
	February 29,			March 2,
($ in millions)	2020			2019
Net cash used in financing activities	$	(22.0	)	$	(26.9	)

Repayments of long-term debt were $13.0 million in the first quarter of 2020 and $20.0 million in the first quarter of 2019. Net proceeds of notes payable were $1.5 million in the first quarter of 2020 and $2.6 million in the same period of 2019. Cash dividends paid were $8.2 million in the first quarter of 2020 compared to $7.9 million in the same period of 2019. Repurchases of common stock were $3.2 million in the first quarter of 2020 compared to $2.7 million in the same period of 2019.

Forward-Looking Statements and Risk Factors

The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements. 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, Item 1A. Risk Factors identifies some of the important factors that could cause our actual results to differ materially from those in any such forward-looking statements. 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. These factors should be considered, together with any similar risk factors or other cautionary language that may be made elsewhere in this Quarterly Report on Form 10-Q.

The list of important factors in Item 1A. Risk Factors does not necessarily present the risk factors in order of importance. 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 SEC or in our press releases) on related subjects.

Item 3. Quantitative and Qualitative Disclosures about 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.  See Part II, Item 7A in our Annual Report on Form 10-K for the year ended November 30, 2019 for further discussion of these market risks. There have been no material changes in the reported market risk of the Company since November 30, 2019. 

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 February 29, 2020. Based on this evaluation, our president and chief executive officer and executive vice president, chief financial officer concluded that, as of February 29, 2020, our disclosure controls and procedures were effective.

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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.

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 (CERCLA) 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.

We are engaged in environmental remediation and monitoring efforts at a number of current and former operating facilities. As of February 29, 2020, we had reserved $7.9 million, which represents our best estimate of probable liabilities with respect to environmental matters. Of the amount reserved, $4.1 million is attributable to a facility we own in Simpsonville, South Carolina as a result of our Royal Adhesives acquisition that is a designated site under CERCLA. It is reasonably possible that we may have additional liabilities related to these known environmental matters. However, the full extent of our future liability for environmental matters is difficult to predict because of uncertainty as to the cost of investigation and clean up of the sites, our responsibility for such hazardous substances and the number of and financial condition of other potentially responsible parties.

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.

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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
($ in millions)	February 29, 2020		March 2, 2019		November 30, 2019
Lawsuits and claims settled		2		1		24
Settlement amounts	$	0.03	$	0.01	$	2.5
Insurance payments received or expected to be received	$	0.02	$	0.01	$	1.9

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.

During 2018, we retained legal counsel to conduct an internal investigation of the possible resale of our hygiene products into Iran by certain customers of our subsidiaries in Turkey (beginning in 2011) and India (beginning in 2014), in possible violation of the economic sanctions against Iran administered by OFAC and our compliance policy. The sales to these customers represented less than one percent of our net revenue in each of our 2017 and 2018 fiscal years. The sales to the customers who were reselling our products into Iran ceased during fiscal year 2018 and we do not currently conduct any business in Iran. In January 2018, we voluntarily contacted OFAC to advise it of this internal investigation and our intention to cooperate fully with OFAC and, in September 2018, we submitted the results and findings of our investigation to OFAC. We have not yet received a response from OFAC. At this time, we cannot predict the outcome or effect of the investigation, however, based on the results of our investigation to date, we believe we could incur penalties ranging from zero to $10.0 million.

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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 November 30, 2019. 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 November 30, 2019, except for the addition of the following risk factor:

The COVID-19 pandemic could affect our operations and financial results.

In December 2019, a novel strain of coronavirus (COVID-19) was reported to have surfaced in Wuhan, China, which has become a global pandemic. We operate facilities around the world which could be adversely affected by the pandemic, including disruption of our supply of raw materials, production, transportation and delivery of our products. Demand for our products could be adversely affected.  Due to the evolving and highly uncertain nature of this event, it is currently not possible to estimate the direct or indirect impacts this outbreak may have on our business, however, the disruption of the manufacturing of our product, commerce and related activity caused by the COVID-19 pandemic could materially and adversely affect our results of operations and financial condition.

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 ended February 29, 2020 is as 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 1, 2019 - January 4, 2020		-	$	-	$	187,170
January 5, 2020 - February 1, 2020		62	$	48.35	$	187,170
February 2, 2020 - February 29, 2020		5	$	48.40	$	187,170

¹ The total number of shares purchased are 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.

On April 6, 2017, the Board of Directors authorized a new share repurchase program of up to $200.0 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 reduce our common stock for the par value of the shares with the excess being applied against additional paid-in capital. This authorization replaces the September 30, 2010 authorization to repurchase shares.

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Item 6. Exhibits

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 February 29, 2020 formatted in Extensible Business Reporting Language (XBRL): (i) the Consolidated Statements of Income, (ii) the Consolidated Statements of Comprehensive Income, (iii) the Consolidated Balance Sheets, (iv) the Consolidated Statements of Total Equity, (v) the Consolidated Statements of Cash Flows and (vi) the Notes to Consolidated Financial Statements.

104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

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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 26, 2020	/s/ John J. Corkrean
	John J. Corkrean
	Executive Vice President,
	Chief Financial Officer

39

Exhibit Index

Exhibits

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 February 29, 2020 formatted in Extensible Business Reporting Language (XBRL): (i) the Consolidated Statements of Income, (ii) the Consolidated Statements of Comprehensive Income, (iii) the Consolidated Balance Sheets, (iv) the Consolidated Statements of Total Equity, (v) the Consolidated Statements of Cash Flows and (vi) the Notes to Consolidated Financial Statements.

104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

40

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 26, 2020

/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 26, 2020

/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 February 29, 2020 (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 26, 2020

/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 February 29, 2020 (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 26, 2020

/s/ John J. Corkrean

John J. Corkrean

Executive Vice President, Chief Financial Officer

XML

Note 14 - Share Repurchase Program

3 Months Ended

Feb. 29, 2020

Notes to Financial Statements

Stockholders' Equity Note Disclosure [Text Block]

Note 14: Share Repurchase Program

On April 6, 2017, the Board of Directors authorized a share repurchase program of up to $200,000 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 reduce our common stock for the par value of the shares with the excess being applied against additional paid-in capital. This authorization replaces the September 30, 2010 authorization to repurchase shares.

We did not repurchase any shares under this authorization during the three months ended February 29, 2020 and March 2, 2019.

XML

Note 3 - Restructuring Actions (Tables)

3 Months Ended

Feb. 29, 2020

Notes Tables

Restructuring and Related Costs [Table Text Block]

	Three Months Ended
	February 29, 2020			March 2, 2019
Cost of sales	$	60		$	376
Selling, general and administrative		(17	)		1,077
	$	43		$	1,453

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

	Employee-Related			Asset-Related			Other			Total
Balance at December 1, 2018	$	4,256		$	-		$	-		$	4,256
Expenses incurred		9,140			1,929			3,466			14,535
Non-cash charges		-			(968	)		-			(968	)
Cash payments		(3,494	)		(961	)		(2,542	)		(6,997	)
Foreign currency translation		(72	)		-			-			(72	)
Balance at November 30, 2019	$	9,830		$	-		$	924		$	10,754
Expenses incurred		(379	)		-			422			43
Cash payments		(2,666	)		-			(759	)		(3,425	)
Foreign currency translation		2			-			-			2
Balance at February 29, 2020	$	6,787		$	-		$	587		$	7,374

XML

Note 7 - Accounting for Share-based Compensation (Tables)

3 Months Ended

Feb. 29, 2020

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
	February 29, 2020				March 2, 2019
Expected life (in years)			5.00				4.75
Weighted-average expected volatility			24.29%				24.25%
Expected volatility		24.29%	-	24.30%		24.25%	-	24.33%
Risk-free interest rate			1.50%			2.51%	-	2.55%
Weighted-average expected dividend yield			1.36%				1.40
Expected dividend yield range		1.35%	-	1.42%		1.26%	-	1.41%
Weighted-average fair value of grants			$9.76				$9.80

Share-based Payment Arrangement, Option, Activity [Table Text Block]

				Average
	Options			Exercise Price
Outstanding at November 30, 2019		5,060,310		$	46.04
Granted		1,021,629			48.21
Exercised		(25,594	)		35.44
Forfeited or cancelled		(73,601	)		53.71
Outstanding at February 29, 2020		5,982,744		$	46.36

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

						Weighted-
				Weighted-		Average
				Average		Remaining
				Grant		Contractual
				Date Fair		Life
	Units			Value		(in Years)
Nonvested at November 30, 2019		487,997		$	46.56		0.8
Granted		205,383			47.90		2.9
Vested		(206,856	)		46.73		-
Forfeited		(39,608	)		47.73		2.5
Nonvested at February 29, 2020		446,916		$	46.99		1.4

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

	Non-employee
	Directors		Employees			Total
Units outstanding November 30, 2019		525,660		36,664			562,324
Participant contributions		5,901		3,055			8,956
Company match contributions		590		306			896
Payouts		-		(5,710	)		(5,710	)
Units outstanding February 29, 2020		532,151		34,315			566,466

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Note 6 - Leases - Components of Lease Expense (Details) $ in Thousands	3 Months Ended
	Feb. 29, 2020 USD ($)
Operating lease cost	$ 3,261
Variable lease cost	758
Total net lease cost	$ 4,019

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Note 5 - Goodwill and Other Intangible Assets - Goodwill by Segment (Details) $ in Thousands	3 Months Ended
	Feb. 29, 2020 USD ($)
Balance	$ 1,281,808
Acquisition	325
Currency impact	(884)
Balance	1,281,249
Hygiene, Health, and Consumable Adhesives [Member]
Balance	321,274
Acquisition	1,071
Currency impact	1,489
Balance	323,834
Engineering Adhesives [Member]
Balance	649,555
Acquisition	(746)
Currency impact	(2,270)
Balance	646,539
Construction Adhesives [Member]
Balance	310,979
Acquisition	0
Currency impact	(103)
Balance	$ 310,876

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Note 3 - Restructuring Actions - Restructuring Charges (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Feb. 29, 2020	Mar. 02, 2019	Nov. 30, 2019
Expenses incurred	$ 43	$ 1,453	$ 14,535
Cost of Sales [Member]
Expenses incurred	60	376
Selling, General and Administrative Expenses [Member]
Expenses incurred	$ (17)	$ 1,077

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Consolidated Statements of Income (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Feb. 29, 2020	Mar. 02, 2019
Net revenue	$ 646,564	$ 672,935
Cost of sales	(476,302)	(493,010)
Gross profit	170,262	179,925
Selling, general and administrative expenses	(141,509)	(145,713)
Other income (expense), net	(4,969)	(3,365)
Interest expense	(22,757)	(26,807)
Interest income	2,918	3,053
Income before income taxes and income from equity method investments	13,883	13,823
Income taxes	(5,611)	(3,140)
Income from equity method investments, net of dividends received	1,634	1,565
Net income including non-controlling interest	9,906	12,248
Net income attributable to non-controlling interest	(11)	(4)
Net income attributable to H.B. Fuller	$ 9,895	$ 12,244
Basic (in dollars per share)	$ 0.19	$ 0.24
Diluted (in dollars per share)	$ 0.19	$ 0.24
Weighted-average common shares outstanding:
Basic (in shares)	51,295	50,752
Diluted (in shares)	52,580	51,901
Dividends declared per common share (in dollars per share)	$ 0.160	$ 0.155

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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 Dec. 01, 2018	$ 50,733	$ 95,940	$ 1,285,246	$ (280,152)	$ 401	$ 1,152,168
Comprehensive income (loss)	0	0	12,244	11,817	10	24,071
Dividends	0	0	(7,962)	0	0	(7,962)
Stock option exercises	41	1,025	0	0	0	1,066
Share-based compensation plans other, net	168	6,233	0	0	0	6,401
Repurchases of common stock	(58)	(2,625)	0	0	0	(2,683)
Balance at Mar. 02, 2019	50,884	100,573	1,290,571	(268,335)	411	1,174,104
Change in accounting principles at Dec. 01, 2018	0	0	1,043	0	0	1,043
Balance at Dec. 01, 2018	50,733	95,940	1,286,289	(280,152)	401	1,153,211
Balance at Nov. 30, 2019	51,241	130,295	1,384,411	(343,600)	442	1,222,789
Comprehensive income (loss)	0	0	9,895	(5,049)	10	4,856
Dividends	0	0	(8,313)	0	0	(8,313)
Stock option exercises	26	881	0	0	0	907
Share-based compensation plans other, net	206	4,821	0	0	0	5,027
Repurchases of common stock	(66)	(3,146)	0	0	0	(3,212)
Balance at Feb. 29, 2020	$ 51,407	$ 132,851	$ 1,385,993	$ (348,649)	$ 452	$ 1,222,054

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Note 11 - Earnings Per Share (Details Textual) - shares	3 Months Ended
	Feb. 29, 2020	Mar. 02, 2019
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	3,606,776	3,002,073

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Note 12 - Financial Instruments - Gains (Losses) on Derivative Instruments (Details) - Cash Flow Hedging [Member] - Designated as Hedging Instrument [Member] - USD ($) $ in Thousands	3 Months Ended
	Feb. 29, 2020	Mar. 02, 2019
Currency Swap [Member]
Pretax gain (loss) recognized in other comprehensive income	$ 4,746	$ 4,284
Interest Rate Swap [Member]
Pretax gain (loss) recognized in other comprehensive income	$ (11,900)	$ (15,259)

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Note 6 - Leases - Schedule of Minimum Payments Under Operating Leases (Details) $ in Thousands	Feb. 29, 2020 USD ($)
Remainder of 2020	$ 8,378
2021	7,078
2022	4,419
2023	3,278
2024	2,283
2025 and beyond	3,376
Total	28,812
Less: amounts representing interest	(2,267)
Present value of future minimum payments	26,545
Less: current obligations	(9,477)
Noncurrent operating lease liabilities	$ 17,068

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Note 7 - Accounting for Share-based Compensation - Stock Option Activity (Details) - $ / shares	3 Months Ended
	Feb. 29, 2020	Nov. 30, 2019
Outstanding Options (in shares)	5,060,310
Outstanding Options, weighted-average exercise price (in dollars per share)	$ 46.36	$ 46.04
Granted (in shares)	1,021,629
Granted, weighted-average exercise price (in dollars per share)	$ 48.21
Exercised (in shares)	(25,594)
Exercised, weighted-average exercise price (in dollars per share)	$ 35.44
Forfeited or cancelled (in shares)	(73,601)
Forfeited or cancelled, weighted-average exercise price (in dollars per share)	$ 53.71
Outstanding Options (in shares)	5,982,744

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Note 9 - Accumulated Other Comprehensive Income (Loss) - Comprehensive Income (Loss) Information (Details) - USD ($) $ in Thousands		3 Months Ended
		Feb. 29, 2020	Mar. 02, 2019
Net income including non-controlling interests		$ 9,895	$ 12,244
Non-controlling interests		11	4
Foreign currency translation adjustment¹, pretax	[1]	(2,780)	17,693
Foreign currency translation adjustment¹, tax	[1]	0	0
Foreign currency translation adjustment¹	[1]	(2,780)	17,693
Foreign currency translation adjustment¹, non-controlling interests	[1]	(1)	6
Defined benefit pension plans adjustment², pretax	[2]	2,779	1,986
Defined benefit pension plans adjustment², tax	[2]	(693)	(504)
Defined benefit pension plans adjustment²	[2]	2,086	1,482
Interest rate swap³, pretax	[3]	(11,900)	(15,259)
Interest rate swap³, tax	[3]	2,901	3,815
Interest rate swap³	[3]	(8,999)	(11,444)
Cash flow hedges³, pretax	[3]	4,746	4,284
Cash flow hedges³, tax	[3]	(102)	(198)
Cash flow hedges³	[3]	4,644	4,086
Other comprehensive income (loss), pretax		(7,155)	8,704
Other comprehensive income (loss), tax		2,106	3,113
Other comprehensive income (loss)		(5,049)	11,817
Other comprehensive income (loss), non-controlling interests		(1)	6
Comprehensive income (loss)		4,846	24,061
Comprehensive income (loss), non-controlling interests		$ 10	$ 10

[1] Income taxes are not provided for foreign currency translation relating to permanent investments in international subsidiaries.

[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 and SG&A expense.

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

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Note 16 - 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
	Feb. 29, 2020	Mar. 02, 2019
Operating income	$ 28,753	$ 34,212
Other income, net	4,969	3,365
Interest expense	(22,757)	(26,807)
Interest income	2,918	3,053
Income before income taxes and income from equity method investments	$ 13,883	$ 13,823

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Note 15 - Commitments and Contingencies (Details Textual) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Feb. 29, 2020	Nov. 30, 2019
Accrued Environmental Loss Contingencies, Noncurrent	$ 7,938	$ 8,535
Penalties from Possible Resale of Products by Customers Contrary to U.S. Law and Regulations [Member] | Minimum [Member]
Loss Contingency, Estimate of Possible Loss	0
Penalties from Possible Resale of Products by Customers Contrary to U.S. Law and Regulations [Member] | Maximum [Member]
Loss Contingency, Estimate of Possible Loss	10,000
Facility in Simpsonville, South Carolina [Member]
Operating Leases, Rent Expense, Total	$ 4,061	$ 4,117

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Note 6 - Leases

3 Months Ended

Feb. 29, 2020

Notes to Financial Statements

Lessee, Operating Leases [Text Block]

Note 6: Leases

We adopted ASU No. 2016-02 and related standards (collectively, “ASC 842”), which replaced previous lease accounting guidance, during the first quarter ended February 29, 2020 using the modified retrospective method of adoption. As a result of electing this transition method, prior periods have not been restated. The adoption of ASC 842 resulted in the recording of right of use assets and associated lease liabilities of approximately $28,254 each as of the first day of the quarter ended February 29, 2020. ASC 842 did not have a material impact on our Consolidated Statement of Income. We elected the package of practical expedients permitted under the transition guidance within ASC 842, which includes not reassessing lease classification of existing leases. We did not elect the hindsight practical expedient.

As a lessee, the Company leases office, manufacturing and warehouse space and equipment. Certain lease agreements include rental payments adjusted annually based on changes in an inflation index. Our leases do not contain material residual value guarantees or material restrictive covenants. Lease expense is recognized on a straight-line basis over the lease term. We determine if an arrangement is a lease upon inception. A contract is or contains a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The right to control the use of an asset includes the right to obtain substantially all of the economic benefits of the underlying asset and the right to direct how and for what purpose the asset is used.

Operating lease right-of-use assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. The discount rate used to calculate present value is the Company’s incremental borrowing rate. We determine the incremental borrowing rate for each lease based primarily on its lease term and the economic environment of the applicable country or region.

Certain leases include one or more options to renew, with terms that can extend the lease term up to five years. We include options to renew the lease as part of the right of use lease asset and liability when it is reasonably certain we will exercise the option. In addition, certain leases contain termination options with an associated penalty. In general, the Company is not reasonably certain to exercise such options.

For the measurement and classification of its lease agreements, we group lease and non-lease components into a single lease component for all underlying asset classes. Variable lease payments primarily include payments for non-lease components, such as maintenance costs, payments for leased assets used beyond their non-cancelable lease term as adjusted for contractual options to terminate or renew, and payments for non-components such as sales tax. Certain leases contain immaterial variable lease payments based on usage.

We also enter into insignificant finance leases.

The components of lease expense are as follows:

	Three Months Ended
	February 29,
	2020
Operating lease cost	$	3,261
Variable lease cost		758
Total net lease cost	$	4,019

Supplemental balance sheet information related to leases is as follows:

			Three Months Ended
	Location on		February 29,
	Balance Sheet		2020
Operating leases:
Operating lease right of use assets		Other assets	$	26,669
Current operating lease liabilities		Other accrued expenses	$	9,477
Noncurrent operating lease liabilities		Other liabilities		17,068
Total operating lease liabilities			$	26,545

The weighted average remaining lease term is 4.5 years and the weighted average discount rate is 3.7% as of February 29, 2020. 

Supplemental cash flow information and other related to leases is as follows:

	Three Months Ended
	February 29,
	2020
Cash paid amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	2,230
Right of use assets obtained in exchange for lease liabilities:
Operating leases	$	521

Maturities of lease liabilities as follows:

Fiscal Year	Amount
Remainder of 2020	$	8,378
2021		7,078
2022		4,419
2023		3,278
2024		2,283
2025 and beyond		3,376
Total		28,812
Less: amounts representing interest		(2,267	)
Present value of future minimum payments		26,545
Less: current obligations		(9,477	)
Noncurrent operating lease liabilities	$	17,068

Disclosures related to periods prior to adoption of new lease standard

The minimum lease payments, related to buildings, equipment and vehicles, that are expected to be made in each of the years indicated based on operating leases in effect at November 30, 2019 were:

Fiscal Year	Remainder 2020		2021		2022		2023		2024 and Beyond		Total Minimum Lease Payments
Operating leases	$	11,492	$	7,984	$	5,497	$	4,686	$	8,217	$	37,876

Rent expense for all operating leases, which includes minimum lease payments and other charges such as common area maintenance fees, was $19,618 and $20,620 in 2019 and 2018, respectively.

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Note 10 - Income Taxes

3 Months Ended

Feb. 29, 2020

Notes to Financial Statements

Income Tax Disclosure [Text Block]

Note 10: Income Taxes

As of  February 29, 2020, we had a liability of $10,495 recorded for gross unrecognized tax benefits (excluding interest) compared to $8,946 as of November 30, 2019. As of February 29, 2020, we had accrued $1,147 of gross interest relating to unrecognized tax benefits. For the three months ended February 29, 2020, our recorded liability for gross unrecognized tax benefits increased by $1,549.

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Note 2 - Acquisitions and Divestiture (Details Textual) - USD ($) $ in Thousands	Feb. 03, 2020	May 17, 2019	Feb. 29, 2020	Nov. 30, 2019
Goodwill, Ending Balance			$ 1,281,249	$ 1,281,808
D.H.M Adhesives, Inc [Member]
Payments to Acquire Businesses, Gross	$ 9,500
Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, High	8,100
Goodwill, Ending Balance			1,071
Business Combination, Contingent Consideration, Liability, Total	$ 5,000		5,000	$ 0
D.H.M Adhesives, Inc [Member] | Customer Relationships [Member]
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill, Total			11,900
Ramapo [Member]
Payments to Acquire Businesses, Gross		$ 8,292
Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, High		3,400
Goodwill, Ending Balance			165
Business Combination, Contingent Consideration, Liability, Total			2,700
Business Combination, Consideration Transferred, Receivables Settled		$ 2,166
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets, Excluding Intangible Assets			4,148
Ramapo [Member] | Customer Relationships [Member]
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill, Total			$ 8,800

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Note 13 - Fair Value Measurements (Tables)

3 Months Ended

Feb. 29, 2020

Notes Tables

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

	February 29,		Fair Value Measurements Using:
Description	2020		Level 1		Level 2		Level 3
Assets:
Marketable securities	$	3,934	$	3,934	$	-	$	-
Foreign exchange contract assets		7,026		-		7,026		-
Interest rate swaps, fair value hedges		11,122		-		11,122		-
Cross-currency cash flow hedges		31,332		-		31,332		-
Liabilities:
Foreign exchange contract liabilities	$	3,797	$	-	$	3,797	$	-
Interest rate swaps, cash flow hedges		29,537		-		29,537		-
Contingent consideration		5,000						5,000

	November 30,		Fair Value Measurements Using:
Description	2019		Level 1		Level 2		Level 3
Assets:
Marketable securities	$	19,430	$	19,430	$	-	$	-
Foreign exchange contract assets		1,227		-		1,227		-
Interest rate swaps, fair value hedges		5,741		-		5,741		-
Cross-currency cash flow hedges		26,896		-		26,896		-
Liabilities:
Foreign exchange contract liabilities	$	1,800	$	-	$	1,800	$	-
Interest rate swaps, cash flow hedges		17,637		-		17,637		-

Schedule of Fair Value, Contingent Consideration [Table Text Block]

	Amounts
Balance at November 30, 2019	$	-
Acquisitions		5,000
Balance at February 29, 2020	$	5,000

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Note 8 - Components of Net Periodic Benefit Related to Pension and Other Postretirement Benefit Plans (Tables)

3 Months Ended

Feb. 29, 2020

Notes Tables

Schedule of Net Benefit Costs [Table Text Block]

	Three Months Ended February 29, 2020 and March 2, 2019
													Other
	Pension Benefits												Postretirement
	U.S. Plans						Non-U.S. Plans						Benefits
Net periodic cost (benefit):	2020			2019			2020			2019			2020			2019
Service cost	$	-		$	1		$	725		$	568		$	18		$	24
Interest cost		2,935			3,673			794			1,184			284			387
Expected return on assets		(6,440	)		(6,326	)		(2,842	)		(2,587	)		(1,994	)		(1,753	)
Amortization:
Prior service cost (benefit)		(1	)		3			16			16			-			-
Actuarial loss		1,799			1,169			950			789			15			8
Net periodic benefit	$	(1,707	)	$	(1,480	)	$	(357	)	$	(30	)	$	(1,677	)	$	(1,334	)

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Note 8 - Components of Net Periodic Benefit Related to Pension and Other Postretirement Benefit Plans - Components of Net Periodic Benefit Cost (Details) - USD ($) $ in Thousands	3 Months Ended
	Feb. 29, 2020	Mar. 02, 2019
Pension Plan [Member] | UNITED STATES
Service cost	$ 0	$ 1
Interest cost	2,935	3,673
Expected return on assets	(6,440)	(6,326)
Prior service cost (benefit)	(1)	3
Actuarial loss	1,799	1,169
Net periodic (benefit) cost	(1,707)	(1,480)
Pension Plan [Member] | Foreign Plan [Member]
Service cost	725	568
Interest cost	794	1,184
Expected return on assets	(2,842)	(2,587)
Prior service cost (benefit)	16	16
Actuarial loss	950	789
Net periodic (benefit) cost	(357)	(30)
Other Postretirement Benefits Plan [Member]
Service cost	18	24
Interest cost	284	387
Expected return on assets	(1,994)	(1,753)
Prior service cost (benefit)	0	0
Actuarial loss	15	8
Net periodic (benefit) cost	$ (1,677)	$ (1,334)

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Note 6 - Leases - Supplemental Cash Flow Information (Details) $ in Thousands	3 Months Ended
	Feb. 29, 2020 USD ($)
Operating cash flows from operating leases	$ 2,230
Operating leases	$ 521

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Note 7 - Accounting for Share-based Compensation - Fair Value of Options Granted (Details) - $ / shares	3 Months Ended
	Feb. 29, 2020	Mar. 02, 2019
Expected life (Year)	5 years	4 years 9 months
Weighted-average expected volatility	24.29%	24.25%
Risk-free interest rate	1.50%
Weighted-average expected dividend yield	1.36%	1.40%
Expected dividend yield range (in dollars per share)	$ 9.76	$ 9.80
Minimum [Member]
Expected volatility	24.29%	24.25%
Risk-free interest rate		2.51%
Expected dividend yield range	1.35%	1.26%
Maximum [Member]
Expected volatility	24.30%	24.33%
Risk-free interest rate		2.55%
Expected dividend yield range	1.42%	1.41%

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Note 16 - Operating Segments - Disaggregated Revenue Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Feb. 29, 2020	Mar. 02, 2019
Net revenue	$ 646,564	$ 672,935
Corporate, Non-Segment [Member]
Net revenue	0	5,919
Americas [Member]
Net revenue	352,906
Americas [Member] | Operating Segments [Member]
Net revenue		358,751
Americas [Member] | Corporate, Non-Segment [Member]
Net revenue	0
EIMEA [Member]
Net revenue	182,184	194,109
EIMEA [Member] | Corporate, Non-Segment [Member]
Net revenue	0
Asia Pacific [Member]
Net revenue	111,474
Asia Pacific [Member] | Operating Segments [Member]
Net revenue		120,075
Asia Pacific [Member] | Corporate, Non-Segment [Member]
Net revenue	0
Hygiene, Health, and Consumable Adhesives [Member]
Net revenue	312,512	319,854
Hygiene, Health, and Consumable Adhesives [Member] | Operating Segments [Member]
Net revenue	312,512	319,854
Hygiene, Health, and Consumable Adhesives [Member] | Americas [Member] | Operating Segments [Member]
Net revenue	173,275	174,865
Hygiene, Health, and Consumable Adhesives [Member] | EIMEA [Member] | Operating Segments [Member]
Net revenue	92,382	95,428
Hygiene, Health, and Consumable Adhesives [Member] | Asia Pacific [Member] | Operating Segments [Member]
Net revenue	46,855	49,561
Engineering Adhesives [Member]
Net revenue	248,895	264,372
Engineering Adhesives [Member] | Operating Segments [Member]
Net revenue	248,895	264,372
Engineering Adhesives [Member] | Americas [Member] | Operating Segments [Member]
Net revenue	105,373	105,621
Engineering Adhesives [Member] | EIMEA [Member] | Operating Segments [Member]
Net revenue	83,676	93,800
Engineering Adhesives [Member] | Asia Pacific [Member] | Operating Segments [Member]
Net revenue	59,846	64,951
Construction Adhesives [Member]
Net revenue	85,157	82,790
Construction Adhesives [Member] | Operating Segments [Member]
Net revenue	85,157	82,790
Construction Adhesives [Member] | Americas [Member] | Operating Segments [Member]
Net revenue	74,258	72,346
Construction Adhesives [Member] | EIMEA [Member] | Operating Segments [Member]
Net revenue	6,126	4,881
Construction Adhesives [Member] | Asia Pacific [Member] | Operating Segments [Member]
Net revenue	$ 4,773	5,563
Corporate Segment [Member] | Corporate, Non-Segment [Member]
Net revenue		5,919
Corporate Segment [Member] | Americas [Member] | Corporate, Non-Segment [Member]
Net revenue		5,919
Corporate Segment [Member] | EIMEA [Member] | Corporate, Non-Segment [Member]
Net revenue		0
Corporate Segment [Member] | Asia Pacific [Member] | Corporate, Non-Segment [Member]
Net revenue		$ 0

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Note 15 - Commitments and Contingencies - Asbestos Related Lawsuits and Claims (Details) - Asbestos Related Lawsuits and Claims [Member] $ in Thousands	3 Months Ended		35 Months Ended
	Feb. 29, 2020 USD ($)	Mar. 02, 2019 USD ($)	Nov. 30, 2019 USD ($)
Lawsuits and claims settled	2	1	24
Settlement amounts	$ 30	$ 12	$ 2,487
Insurance payments received or expected to be received	$ 21	$ 8	$ 1,937

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Note 5 - Goodwill and Other Intangible Assets

3 Months Ended

Feb. 29, 2020

Notes to Financial Statements

Goodwill and Intangible Assets Disclosure [Text Block]

Note 5: Goodwill and Other Intangible Assets

The goodwill activity for the three months ended February 29, 2020 is presented below:

	Hygiene, Health and Consumable		Engineering			Construction
	Adhesives		Adhesives			Adhesives			Total
Balance at November 30, 2019	$	321,274	$	649,555		$	310,979		$	1,281,808
Acquisition		1,071		(746	)		-			325
Currency impact		1,489		(2,270	)		(103	)		(884	)
Balance at February 29, 2020	$	323,834	$	646,539		$	310,876		$	1,281,249

As discussed in Note 16, as of the beginning of fiscal 2020, we realigned our operating segment structure and now have three reportable segments: Hygiene, Health and Consumable Adhesives, Engineering Adhesives and Construction Adhesives. We allocated goodwill within our reporting units to reflect this realignment using the relative fair value approach.

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

	February 29, 2020
Amortizable Intangible Assets	Purchased Technology and Patents			Customer Relationships			Trade Names			Other			Total
Original cost	$	110,212		$	924,540		$	62,539		$	11,421		$	1,108,712
Accumulated amortization		(45,951	)		(236,848	)		(25,964	)		(4,107	)		(312,870	)
Net identifiable intangibles	$	64,261		$	687,692		$	36,575		$	7,314		$	795,842

	November 30, 2019
Amortizable Intangible Assets	Purchased Technology and Patents			Customer Relationships			Trade Names			Other			Total
Original cost	$	109,967		$	913,968		$	62,537		$	27,453		$	1,113,925
Accumulated amortization		(43,351	)		(223,563	)		(24,819	)		(23,273	)		(315,006	)
Net identifiable intangibles	$	66,616		$	690,405		$	37,718		$	4,180		$	798,919

Amortization expense with respect to amortizable intangible assets was $17,990 and $19,212 for the three months ended February 29, 2020 and March 2, 2019, respectively.

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

	Remainder
Fiscal Year	2020		2021		2022		2023		2024		Thereafter
Amortization Expense	$	52,567	$	69,025	$	67,533	$	64,673	$	59,892	$	482,152

Non-amortizable intangible assets as of February 29, 2020 and November 30, 2019 are $480 for both years and are related to trademarks and trade names.

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Note 9 - Accumulated Other Comprehensive Income (Loss)

3 Months Ended

Feb. 29, 2020

Notes to Financial Statements

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

Note 9: Accumulated Other Comprehensive Income (Loss)

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

	Three Months Ended February 29, 2020												Three Months Ended March 2, 2019
	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		-			-		$	9,895		$	11			-			-		$	12,244		$	4
Foreign currency translation adjustment¹	$	(2,780	)		-			(2,780	)		(1	)	$	17,693			-			17,693			6
Defined benefit pension plans adjustment²		2,779		$	(693	)		2,086			-			1,986		$	(504	)		1,482			-
Interest rate swap³		(11,900	)		2,901			(8,999	)		-			(15,259	)		3,815			(11,444	)		-
Cash flow hedges³		4,746			(102	)		4,644			-			4,284			(198	)		4,086			-
Other comprehensive income (loss)	$	(7,155	)	$	2,106			(5,049	)		(1	)	$	8,704		$	3,113			11,817			6
Comprehensive income (loss)							$	4,846		$	10								$	24,061		$	10

¹ Income taxes are not provided for foreign currency translation relating to permanent investments in international subsidiaries.

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 and SG&A expense.

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

The components of accumulated other comprehensive loss is as follows:

	February 29, 2020
	Total			H.B. Fuller Stockholders			Non- controlling Interests
Foreign currency translation adjustment	$	(150,600	)	$	(150,496	)	$	(104	)
Interest rate swap, net of taxes of ($7,201)		(22,337	)		(22,337	)		-
Cash flow hedges, net of taxes of $125		6,407			6,407			-
Defined benefit pension plans adjustment, net of taxes of $81,198		(163,882	)		(163,882	)		-
Reclassification of AOCI tax effects		(18,341	)		(18,341	)		-
Accumulated other comprehensive loss	$	(348,753	)	$	(348,649	)	$	(104	)

	November 30, 2019
	Total			H.B. Fuller Stockholders			Non-controlling Interests
Foreign currency translation adjustment	$	(147,821	)	$	(147,716	)	$	(105	)
Interest rate swap, net of taxes of ($4,300)		(13,338	)		(13,338	)		-
Cash flow hedges, net of taxes of $21		1,763			1,763			-
Defined benefit pension plans adjustment, net of taxes of $81,891		(165,968	)		(165,968	)		-
Reclassification of AOCI tax effects		(18,341	)		(18,341	)		-
Accumulated other comprehensive loss	$	(343,705	)	$	(343,600	)	$	(105	)

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Note 15 - Commitments and Contingencies (Tables)

3 Months Ended

Feb. 29, 2020

Notes Tables

Schedule of Loss Contingencies by Contingency [Table Text Block]

	Three Months Ended				3 Years Ended
	February 29, 2020		March 2, 2019		November 30, 2019
Lawsuits and claims settled		2		1		24
Settlement amounts	$	30	$	12	$	2,487
Insurance payments received or expected to be received	$	21	$	8	$	1,937

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Note 9 - Accumulated Other Comprehensive Income (Loss) (Tables)

3 Months Ended

Feb. 29, 2020

Notes Tables

Comprehensive Income (Loss) [Table Text Block]

	Three Months Ended February 29, 2020												Three Months Ended March 2, 2019
	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		-			-		$	9,895		$	11			-			-		$	12,244		$	4
Foreign currency translation adjustment¹	$	(2,780	)		-			(2,780	)		(1	)	$	17,693			-			17,693			6
Defined benefit pension plans adjustment²		2,779		$	(693	)		2,086			-			1,986		$	(504	)		1,482			-
Interest rate swap³		(11,900	)		2,901			(8,999	)		-			(15,259	)		3,815			(11,444	)		-
Cash flow hedges³		4,746			(102	)		4,644			-			4,284			(198	)		4,086			-
Other comprehensive income (loss)	$	(7,155	)	$	2,106			(5,049	)		(1	)	$	8,704		$	3,113			11,817			6
Comprehensive income (loss)							$	4,846		$	10								$	24,061		$	10

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

	February 29, 2020
	Total			H.B. Fuller Stockholders			Non- controlling Interests
Foreign currency translation adjustment	$	(150,600	)	$	(150,496	)	$	(104	)
Interest rate swap, net of taxes of ($7,201)		(22,337	)		(22,337	)		-
Cash flow hedges, net of taxes of $125		6,407			6,407			-
Defined benefit pension plans adjustment, net of taxes of $81,198		(163,882	)		(163,882	)		-
Reclassification of AOCI tax effects		(18,341	)		(18,341	)		-
Accumulated other comprehensive loss	$	(348,753	)	$	(348,649	)	$	(104	)

	November 30, 2019
	Total			H.B. Fuller Stockholders			Non-controlling Interests
Foreign currency translation adjustment	$	(147,821	)	$	(147,716	)	$	(105	)
Interest rate swap, net of taxes of ($4,300)		(13,338	)		(13,338	)		-
Cash flow hedges, net of taxes of $21		1,763			1,763			-
Defined benefit pension plans adjustment, net of taxes of $81,891		(165,968	)		(165,968	)		-
Reclassification of AOCI tax effects		(18,341	)		(18,341	)		-
Accumulated other comprehensive loss	$	(343,705	)	$	(343,600	)	$	(105	)

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Note 3 - Restructuring Actions (Details Textual)	3 Months Ended	12 Months Ended
	Feb. 29, 2020	Nov. 30, 2019
Number of Reportable Segments	3	5

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Note 6 - Leases (Tables)

3 Months Ended

Feb. 29, 2020

Notes Tables

Lease, Cost [Table Text Block]

	Three Months Ended
	February 29,
	2020
Operating lease cost	$	3,261
Variable lease cost		758
Total net lease cost	$	4,019

Lessee, Supplemental Balance Sheet Information and Weighted Average [Table Text Block]

			Three Months Ended
	Location on		February 29,
	Balance Sheet		2020
Operating leases:
Operating lease right of use assets		Other assets	$	26,669
Current operating lease liabilities		Other accrued expenses	$	9,477
Noncurrent operating lease liabilities		Other liabilities		17,068
Total operating lease liabilities			$	26,545

Lessee, Supplemental Cash Flow Information [Table Text Block]

	Three Months Ended
	February 29,
	2020
Cash paid amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	2,230
Right of use assets obtained in exchange for lease liabilities:
Operating leases	$	521

Lessee, Operating Lease, Liability, Maturity [Table Text Block]

Fiscal Year	Amount
Remainder of 2020	$	8,378
2021		7,078
2022		4,419
2023		3,278
2024		2,283
2025 and beyond		3,376
Total		28,812
Less: amounts representing interest		(2,267	)
Present value of future minimum payments		26,545
Less: current obligations		(9,477	)
Noncurrent operating lease liabilities	$	17,068

Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block]

Fiscal Year	Remainder 2020		2021		2022		2023		2024 and Beyond		Total Minimum Lease Payments
Operating leases	$	11,492	$	7,984	$	5,497	$	4,686	$	8,217	$	37,876

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Note 13 - Fair Value Measurements

3 Months Ended

Feb. 29, 2020

Notes to Financial Statements

Fair Value Disclosures [Text Block]

Note 13: 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 February 29, 2020 and November 30, 2019, and indicates the fair value hierarchy of the valuation techniques utilized to determine such fair value.

	February 29,		Fair Value Measurements Using:
Description	2020		Level 1		Level 2		Level 3
Assets:
Marketable securities	$	3,934	$	3,934	$	-	$	-
Foreign exchange contract assets		7,026		-		7,026		-
Interest rate swaps, fair value hedges		11,122		-		11,122		-
Cross-currency cash flow hedges		31,332		-		31,332		-
Liabilities:
Foreign exchange contract liabilities	$	3,797	$	-	$	3,797	$	-
Interest rate swaps, cash flow hedges		29,537		-		29,537		-
Contingent consideration		5,000						5,000

	November 30,		Fair Value Measurements Using:
Description	2019		Level 1		Level 2		Level 3
Assets:
Marketable securities	$	19,430	$	19,430	$	-	$	-
Foreign exchange contract assets		1,227		-		1,227		-
Interest rate swaps, fair value hedges		5,741		-		5,741		-
Cross-currency cash flow hedges		26,896		-		26,896		-
Liabilities:
Foreign exchange contract liabilities	$	1,800	$	-	$	1,800	$	-
Interest rate swaps, cash flow hedges		17,637		-		17,637		-

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, 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 valuation of our contingent consideration related to the acquisition of D.H.M. resulted in a fair value of $5,000.

	Amounts
Balance at November 30, 2019	$	-
Acquisitions		5,000
Balance at February 29, 2020	$	5,000

Long-term debt had an estimated fair value of $1,987,586 and $2,016,516 as of February 29, 2020 and November 30, 2019, 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.

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Significant Accounting Policies (Policies)

3 Months Ended

Feb. 29, 2020

Accounting Policies [Abstract]

Segment Reporting, Policy [Policy Text Block]

Change in Segments

As of November 30, 2019, we had five reportable segments: Americas Adhesives, EIMEA, Asia Pacific, Construction Adhesives and Engineering Adhesives. As of the beginning of fiscal 2020, we realigned our operating segment structure and now have three reportable segments: Hygiene, Health and Consumable Adhesives, Engineering Adhesives and Construction Adhesives. The change in operating segments is based on how we have organized the company to make operating decisions and assess business performance. Prior period segment information has been recast retrospectively to reflect the realignment.

New Accounting Pronouncements, Policy [Policy Text Block]

Change in Accounting Principle – Leases

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, Leases (Subtopic 842). This ASU 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. In December 2018, the FASB also issued ASU No. 2018-20, Leases (Topic 842): Narrow-Scope Improvements for Lessors, which clarifies the accounting for lessors for variable payments that relate to both a lease component and a nonlease component and is effective in the same timeframe as ASU 2016-02, and ASU No. 2019-01, Leases (Topic 842): Codification Improvements, which clarifies the transition disclosure requirements. In July 2018, the FASB issued ASU No. 2018-11, Leases (Topic 842): Targeted Improvements. This ASU allows entities to not recast comparative periods in transition to ASC 842 and instead report the comparative periods presented in the period of adoption under ASC 840. The ASU also includes a practical expedient for lessors to not separate the lease and nonlease components of a contract. In July 2018, the FASB issued ASU No. 2018-10, Codification Improvements to Topic 842, Leases. This ASU includes certain clarifications to address potential narrow-scope implementation issues which we are incorporating into our assessment and adoption of ASU No. 2016-02.

We adopted these ASUs and related standards during the first quarter ended February 29, 2020 using the modified retrospective method of adoption. As a result of the adoption of these ASUs, as of December 1, 2019 we recorded $28,254 of right-of-use assets and liabilities on the balance sheet. Adoption of these ASUs did not have a significant impact on the Consolidated Statements of Income. We have included the disclosures required by these ASUs in Note 6.

Change in Accounting Principle – Revenue Recognition

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. We adopted this ASU during the quarter ended March 2, 2019 using the modified retrospective method of adoption. As a result of the adoption of this ASU, we recorded an increase to opening retained earnings of $1,776 as of December 1, 2018 related to accelerated recognition for arrangements where we provide shipping and handling services after control of the goods has transferred to the customer. Prior periods were not restated. We have included the disclosures required by this ASU in Note 16.

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 were adopted during the quarter ended March 2, 2019 with ASU No. 2014-09 as discussed above.

Change in Accounting Principle – Income Tax Impact of Intra-Entity Transfers of Assets Other Than Inventory

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. We adopted this ASU during the quarter ended March 2, 2019. We recorded a decrease to opening retained earnings of $733 as of December 1, 2018 as a result of the adoption of this ASU.

New Accounting Pronouncements

In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. This ASU provides practical expedients and exception for applying U.S. GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. This ASU is applicable to our contracts and hedging relationships that reference LIBOR. The amendments may be applied through December 31, 2022. We will apply this guidance to transactions and modifications of these arrangements.

In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. This ASU simplifies the accounting for income taxes by clarifying and amending existing guidance related to the recognition of franchise tax, the evaluation of a step up in the tax basis of goodwill, and the effects of enacted changes in tax laws or rates in the effective tax rate computation, among other clarifications. Our effective date for adoption of this ASU is our fiscal year beginning November 28, 2021 with early adoption permitted. We have evaluated the effect that this guidance will have on our Consolidated Financial Statements and determined it will not have a material impact.

In June 2016, the FASB issued 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. The FASB also issued ASU No. 2018-19, Codification Improvements to Topic 326, Financial Instruments - Credit Losses, in November 2018, ASU No. 2019-04, Codification Improvements to Topic 326, Financial Instruments, in April 2019 and ASU No. 2019-11, Codification Improvements to Topic 326, Financial Instruments, in November 2019. ASU No. 2018-19 clarifies that receivables arising from operating leases are within the scope of Topic 842, Leases. ASU No. 2019-04 and ASU No. 2019-11 clarify various scoping and other issues arising from ASU No. 2016-13. The amendments in this ASU affect the guidance in ASU No. 2016-13 and are effective in the same timeframe as ASU No. 2016-13. Our effective date for adoption of these ASUs is our fiscal year beginning November 29, 2020. We are currently evaluating the effect that these ASUs will have on our Consolidated Financial Statements.

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Note 5 - Goodwill and Other Intangible Assets - Amortizable Intangible Assets (Details) - USD ($) $ in Thousands	Feb. 29, 2020	Nov. 30, 2019
Original cost	$ 1,108,712	$ 1,113,925
Accumulated amortization	(312,870)	(315,006)
Net identifiable intangibles	795,842	798,919
Purchased Technology And Patents [Member]
Original cost	110,212	109,967
Accumulated amortization	(45,951)	(43,351)
Net identifiable intangibles	64,261	66,616
Customer Relationships [Member]
Original cost	924,540	913,968
Accumulated amortization	(236,848)	(223,563)
Net identifiable intangibles	687,692	690,405
Trade Names [Member]
Original cost	62,539	62,537
Accumulated amortization	(25,964)	(24,819)
Net identifiable intangibles	36,575	37,718
Other Intangible Assets [Member]
Original cost	11,421	27,453
Accumulated amortization	(4,107)	(23,273)
Net identifiable intangibles	$ 7,314	$ 4,180

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Note 3 - Restructuring Actions - Restructuring Reserve (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Feb. 29, 2020	Mar. 02, 2019	Nov. 30, 2019
Balance	$ 10,754	$ 4,256	$ 4,256
Expenses incurred	43	1,453	14,535
Non-cash charges			(968)
Cash payments	(3,425)		(6,997)
Foreign currency translation	2		(72)
Balance	7,374		10,754
Employee Related [Member]
Balance	9,830	4,256	4,256
Expenses incurred	(379)		9,140
Non-cash charges			0
Cash payments	(2,666)		(3,494)
Foreign currency translation	2		(72)
Balance	6,787		9,830
Asset Related [Member]
Balance	0	0	0
Expenses incurred	0		1,929
Non-cash charges			(968)
Cash payments	0		(961)
Foreign currency translation	0		0
Balance	0		0
Other Restructuring [Member]
Balance	924	$ 0	0
Expenses incurred	422		3,466
Non-cash charges			0
Cash payments	(759)		(2,542)
Foreign currency translation	0		0
Balance	$ 587		$ 924

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Note 6 - Leases - Supplemental Balance Sheet Information (Details) $ in Thousands	Feb. 29, 2020 USD ($)
Current operating lease liabilities	$ 9,477
Noncurrent operating lease liabilities	17,068
Total operating lease liabilities	26,545
Other Noncurrent Assets [Member]
Operating lease right of use assets	26,669
Other Accrued Expenses [Member]
Current operating lease liabilities	9,477
Other Noncurrent Liabilities [Member]
Noncurrent operating lease liabilities	$ 17,068

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Note 10 - Income Taxes (Details Textual) - USD ($) $ in Thousands	3 Months Ended
	Feb. 29, 2020	Nov. 30, 2019
Unrecognized Tax Benefits, Ending Balance	$ 10,495	$ 8,946
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued, Total	1,147
Unrecognized Tax Benefits, Period Increase (Decrease), Total	$ 1,549

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Note 12 - Financial Instruments - Swaps Outstanding (Details) - Cross Currency Interest Rate Contract [Member] - USD ($) $ in Thousands	3 Months Ended
	Feb. 29, 2020	Oct. 20, 2017	Feb. 24, 2017
Derivative, Notional Amount	$ 443,800	$ 401,200	$ 42,600
Foreign Currency Cash Flow Hedge Asset at Fair Value	$ 31,332
Currency Swap 1 [Member]
Fiscal Year of Expiration	2020
Interest rate minimum	1.95%
Derivative, Notional Amount	$ 42,600
Fair Value	$ (1,396)
Interest rate maximum	4.3038%
Currency Swap 2 [Member]
Fiscal Year of Expiration	2021
Interest rate minimum	2.75%
Derivative, Notional Amount	$ 133,340
Interest rate maximum	4.933%
Foreign Currency Cash Flow Hedge Asset at Fair Value	$ 10,214
Currency Swap 3 [Member]
Fiscal Year of Expiration	2022
Interest rate minimum	3.00%
Derivative, Notional Amount	$ 267,860
Interest rate maximum	5.1803%
Foreign Currency Cash Flow Hedge Asset at Fair Value	$ 22,514

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Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Feb. 29, 2020	Mar. 02, 2019
Net income including non-controlling interest	$ 9,906	$ 12,248
Other comprehensive (loss) income
Foreign currency translation	(2,781)	17,699
Defined benefit pension plans adjustment, net of tax	2,086	1,482
Interest rate swaps, net of tax	(8,999)	(11,444)
Cash flow hedges, net of tax	4,644	4,086
Other comprehensive (loss) income	(5,050)	11,823
Comprehensive income	4,856	24,071
Less: Comprehensive income attributable to non-controlling interest	10	10
Comprehensive income attributable to H.B. Fuller	$ 4,846	$ 24,061

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Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Feb. 29, 2020	Mar. 02, 2019
Cash flows from operating activities:
Net income including non-controlling interest	$ 9,906	$ 12,248
Adjustments to reconcile net income including non-controlling interest to net cash provided by operating activities:
Depreciation	16,595	16,842
Amortization	17,990	19,212
Deferred income taxes	(4,035)	(1,426)
Income from equity method investments, net of dividends received	(1,634)	(1,565)
Gain on sale of assets	0	30
Share-based compensation	4,703	5,906
Trade receivables, net	33,705	5,873
Inventories	(46,947)	(21,630)
Other assets	(32,769)	(21,065)
Trade payables	55,110	7,905
Accrued compensation	(21,145)	(19,205)
Other accrued expenses	(3,055)	(5,253)
Income taxes payable	3,040	1,622
Accrued / prepaid pensions	(1,120)	(5,289)
Other liabilities	(12,801)	3,009
Other	(2,638)	12,541
Net cash provided by operating activities	34,427	493
Cash flows from investing activities:
Purchased property, plant and equipment	(32,124)	(13,865)
Purchased businesses, net of cash acquired	(9,500)	0
Purchase of assets	(3,998)	0
Proceeds from sale of property, plant and equipment	1,516	141
Cash payments related to government grant	(234)	0
Net cash used in investing activities	(44,340)	(13,724)
Cash flows from financing activities:
Repayment of long-term debt	(13,000)	(20,000)
Net proceeds from notes payable	1,497	2,645
Dividends paid	(8,222)	(7,883)
Proceeds from stock options exercised	907	1,065
Repurchases of common stock	(3,213)	(2,683)
Net cash used in financing activities	(22,031)	(26,856)
Effect of exchange rate changes on cash and cash equivalents	(1,509)	2,770
Net change in cash and cash equivalents	(33,453)	(37,317)
Cash and cash equivalents at beginning of period	112,191	150,793
Cash and cash equivalents at end of period	$ 78,738	$ 113,476

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Note 16 - Operating Segments - Reportable Operating Segment Financial Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Feb. 29, 2020	Mar. 02, 2019	Nov. 30, 2019
Revenue	$ 646,564	$ 672,935
Segment operating income (loss)	28,753	34,212
Assets	4,025,266		$ 3,985,734
Corporate, Non-Segment [Member]
Revenue	0	5,919
Segment operating income (loss)	(7,903)	(7,008)
Assets			321,127
Hygiene, Health, and Consumable Adhesives [Member]
Revenue	312,512	319,854
Hygiene, Health, and Consumable Adhesives [Member] | Operating Segments [Member]
Revenue	312,512	319,854
Segment operating income (loss)	22,664	20,890
Assets			1,253,864
Engineering Adhesives [Member]
Revenue	248,895	264,372
Engineering Adhesives [Member] | Operating Segments [Member]
Revenue	248,895	264,372
Segment operating income (loss)	15,365	21,986
Assets			1,610,748
Construction Adhesives [Member]
Revenue	85,157	82,790
Construction Adhesives [Member] | Operating Segments [Member]
Revenue	85,157	82,790
Segment operating income (loss)	(1,373)	(1,656)
Assets			$ 799,995
Total Segment [Member]
Revenue	646,564	667,016
Total Segment [Member] | Operating Segments [Member]
Segment operating income (loss)	$ 36,656	$ 41,220

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Note 14 - Share Repurchase Program (Details Textual) $ in Billions	Apr. 06, 2017 USD ($)
The 2017 Share Repurchase Program [Member]
Stock Repurchase Program, Authorized Amount	$ 0.2

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Note 6 - Leases - Future Minimum Rental Commitments Under ASC 840 (Details) $ in Thousands	Nov. 30, 2019 USD ($)
Remainder 2020	$ 11,492
2021	7,984
2022	5,497
2023	4,686
2024 and Beyond	8,217
Total Minimum Lease Payments	$ 37,876

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Note 7 - Accounting for Share-based Compensation - Nonvested Restricted Stock Activity (Details) - Restricted Stock [Member] - $ / shares	3 Months Ended	12 Months Ended
	Feb. 29, 2020	Nov. 30, 2019
Nonvested (in shares)	487,997
Nonvested, Weighted average grant date fair value (in dollars per share)	$ 46.99	$ 46.56
Nonvested, Weighted average remaining contractual life (Year)	1 year 4 months 24 days	9 months 18 days
Granted (in shares)	205,383
Granted, Weighted average grant date fair value (in dollars per share)	$ 47.90
Granted, Weighted average remaining contractual life (Year)	2 years 10 months 24 days
Vested (in shares)	(206,856)
Vested, Weighted average grant date fair value (in dollars per share)	$ 46.73
Forfeited (in shares)	(39,608)
Forfeited, Weighted average grant date fair value (in dollars per share)	$ 47.73
Forfeited, Weighted average remaining contractual life (Year)	2 years 6 months
Nonvested (in shares)	446,916	487,997

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Note 1 - Basis of Presentation (Details Textual) $ in Thousands	3 Months Ended	12 Months Ended
	Feb. 29, 2020 USD ($)	Nov. 30, 2019 USD ($)	Dec. 01, 2019 USD ($)	Dec. 01, 2018 USD ($)
Number of Reportable Segments	3	5
Operating Lease, Liability, Total	$ 26,545
Retained Earnings (Accumulated Deficit), Ending Balance	$ 1,385,993	$ 1,384,411
Accounting Standards Update 2016-02 [Member]
Operating Lease, Liability, Total			$ 28,254
Operating Lease, Right-of-Use Asset			$ 28,254
Accounting Standards Update 2014-09 [Member]
Retained Earnings (Accumulated Deficit), Ending Balance				$ 1,776
Accounting Standards Update 2016-16 [Member]
Retained Earnings (Accumulated Deficit), Ending Balance				$ 733

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Note 12 - Financial Instruments (Tables)

3 Months Ended

Feb. 29, 2020

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		2020		1.95%	$	42,600	$	(1,396	)
Receive USD				4.3038%
Pay EUR		2021		2.75%	$	133,340	$	10,214
Receive USD				4.9330%
Pay EUR		2022		3.00%	$	267,860	$	22,514
Receive USD				5.1803%
Total					$	443,800	$	31,332

Derivative Instruments, Gain (Loss) [Table Text Block]

	Three Months Ended
	February 29, 2020			March 2, 2019
Cross-currency swap contracts	$	4,746		$	4,284
Interest rate swap contracts		(11,900	)		(15,259	)

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Note 3 - Restructuring Actions

3 Months Ended

Feb. 29, 2020

Notes to Financial Statements

Restructuring and Related Activities Disclosure [Text Block]

Note 3: Restructuring Actions

The Company has approved restructuring plans consisting of consolidation plans, organizational changes and other actions related to the reorganization of our business into three segments, the integration of the operations of Royal Adhesives with the operations of the Company, and other actions to optimize operations. The following table summarizes the pre-tax distribution of charges under these restructuring plans by income statement classification:

	Three Months Ended
	February 29, 2020			March 2, 2019
Cost of sales	$	60		$	376
Selling, general and administrative		(17	)		1,077
	$	43		$	1,453

The restructuring charges are all recorded in Corporate Unallocated.

A summary of the restructuring liability is presented below:

	Employee-Related			Asset-Related			Other			Total
Balance at December 1, 2018	$	4,256		$	-		$	-		$	4,256
Expenses incurred		9,140			1,929			3,466			14,535
Non-cash charges		-			(968	)		-			(968	)
Cash payments		(3,494	)		(961	)		(2,542	)		(6,997	)
Foreign currency translation		(72	)		-			-			(72	)
Balance at November 30, 2019	$	9,830		$	-		$	924		$	10,754
Expenses incurred		(379	)		-			422			43
Cash payments		(2,666	)		-			(759	)		(3,425	)
Foreign currency translation		2			-			-			2
Balance at February 29, 2020	$	6,787		$	-		$	587		$	7,374

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 in the Consolidated Balance Sheets.

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Note 7 - Accounting for Share-based Compensation

3 Months Ended

Feb. 29, 2020

Notes to Financial Statements

Share-based Payment Arrangement [Text Block]

Note 7: Accounting for Share-Based Compensation

Overview 

We have various share-based compensation programs which provide for equity awards including non-qualified stock options, incentive 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 November 30, 2019.

Grant-Date Fair Value 

We use the Black-Scholes option pricing model to calculate the grant-date fair value of stock option awards. The fair value of options granted during the three months ended February 29, 2020 and March 2, 2019 was calculated using the following weighted average assumptions:

	Three Months Ended
	February 29, 2020				March 2, 2019
Expected life (in years)			5.00				4.75
Weighted-average expected volatility			24.29%				24.25%
Expected volatility		24.29%	-	24.30%		24.25%	-	24.33%
Risk-free interest rate			1.50%			2.51%	-	2.55%
Weighted-average expected dividend yield			1.36%				1.40
Expected dividend yield range		1.35%	-	1.42%		1.26%	-	1.41%
Weighted-average fair value of grants			$9.76				$9.80

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 was $4,703 and $5,906 for the three months ended February 29, 2020 and March 2, 2019, respectively. All share-based compensation expense was recorded as selling, general and administrative (SG&A) expense.

As of February 29, 2020, there was $13,766 of unrecognized compensation costs related to unvested stock option awards, which is expected to be recognized over a weighted-average period of 1.1 years.  Unrecognized compensation costs related to unvested restricted stock units was $14,654, which is expected to be recognized over a weighted-average period of 1.4 years.

Stock Option Activity

The stock option activity for the three months ended February 29, 2020 is presented below:

				Average
	Options			Exercise Price
Outstanding at November 30, 2019		5,060,310		$	46.04
Granted		1,021,629			48.21
Exercised		(25,594	)		35.44
Forfeited or cancelled		(73,601	)		53.71
Outstanding at February 29, 2020		5,982,744		$	46.36

The fair value of options granted during the three months ended February 29, 2020 and March 2, 2019 was $9,961 and $9,331, respectively. Total intrinsic value of options exercised during the three months ended February 29, 2020 and March 2, 2019 was $346 and $910, 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 three months ended February 29, 2020 and March 2, 2019 were $907 and $1,065, respectively.

Restricted Stock Activity

The nonvested restricted stock activity for the three months ended February 29, 2020 is presented below:

						Weighted-
				Weighted-		Average
				Average		Remaining
				Grant		Contractual
				Date Fair		Life
	Units			Value		(in Years)
Nonvested at November 30, 2019		487,997		$	46.56		0.8
Granted		205,383			47.90		2.9
Vested		(206,856	)		46.73		-
Forfeited		(39,608	)		47.73		2.5
Nonvested at February 29, 2020		446,916		$	46.99		1.4

Total fair value of restricted stock vested during the three months ended February 29, 2020 and March 2, 2019 was $9,667 and $7,846, respectively. The total fair value of nonvested restricted stock at February 29, 2020 was $21,003.

We repurchased 66,598 and 57,917 restricted stock shares during the three months ended February 29, 2020 and March 2, 2019, respectively, related 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 unit activity for the three months ended February 29, 2020 is presented below:

	Non-employee
	Directors		Employees			Total
Units outstanding November 30, 2019		525,660		36,664			562,324
Participant contributions		5,901		3,055			8,956
Company match contributions		590		306			896
Payouts		-		(5,710	)		(5,710	)
Units outstanding February 29, 2020		532,151		34,315			566,466

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

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Note 11 - Earnings Per Share

3 Months Ended

Feb. 29, 2020

Notes to Financial Statements

Earnings Per Share [Text Block]

Note 11: 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
	February 29,		March 2,
(Shares in thousands)	2020		2019
Weighted-average common shares - basic		51,295		50,752
Equivalent shares from share-based compensations plans		1,285		1,149
Weighted-average common and common equivalent shares - diluted		52,580		51,901

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 and (b) the amount of unearned share-based compensation costs attributed to future services. 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.

Share-based compensation awards for 3,606,776 and 3,002,073 shares for the three months ended February 29, 2020 and March 2, 2019, respectively, were excluded from diluted earnings per share calculations because they were antidilutive.

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Note 15 - Commitments and Contingencies

3 Months Ended

Feb. 29, 2020

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

Note 15: 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 (CERCLA) 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 an undiscounted financial provision. We recorded liabilities of $7,938 and $8,535 as of February 29, 2020 and November 30, 2019, respectively, for probable and reasonably estimable environmental remediation costs. Of the amount reserved, $4,061 and $4,117 as of February 29, 2020 and November 30, 2019, respectively, is attributable to a facility we own in Simpsonville, South Carolina as a result of our Royal Adhesives acquisition that is a designated site under CERCLA.

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
	February 29, 2020		March 2, 2019		November 30, 2019
Lawsuits and claims settled		2		1		24
Settlement amounts	$	30	$	12	$	2,487
Insurance payments received or expected to be received	$	21	$	8	$	1,937

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.

During 2018, we retained legal counsel to conduct an internal investigation of the possible resale of our hygiene products into Iran by certain customers of our subsidiaries in Turkey (beginning in 2011) and India (beginning in 2014), in possible violation of the economic sanctions against Iran administered by the U.S. Department of the Treasury’s Office of Foreign Assets (“OFAC”) and our compliance policy. The sales to these customers represented less than one percent of our net revenue in each of our 2017 and 2018 fiscal years. The sales to the customers who were reselling our products into Iran ceased during fiscal year 2018 and we do not currently conduct any business in Iran. In January 2018, we voluntarily contacted OFAC to advise it of this internal investigation and our intention to cooperate fully with OFAC and, in September 2018, we submitted the results and findings of our investigation to OFAC. We have not yet received a response from OFAC. At this time, we cannot predict the outcome or effect of the investigation, however, based on the results of our investigation to date, we believe we could incur penalties ranging from zero to $10,000.

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Note 4 - Inventories (Tables)

3 Months Ended

Feb. 29, 2020

Notes Tables

Schedule of Inventory, Current [Table Text Block]

	February 29,		November 30,
	2020		2019
Raw materials	$	171,896	$	150,338
Finished goods		209,079		186,929
Total inventories	$	380,975	$	337,267

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Note 9 - Accumulated Other Comprehensive Income (Loss) - Components of Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands	Feb. 29, 2020	Nov. 30, 2019
Accumulated other comprehensive loss	$ (348,649)	$ (343,600)
AOCI Including Portion Attributable to Noncontrolling Interest [Member]
Foreign currency translation adjustment	(150,600)	(147,821)
Interest rate swap, net of taxes	(22,337)	(13,338)
Cash flow hedges, net of taxes	6,407	1,763
Defined benefit pension plans adjustment, net of taxes	(163,882)	(165,968)
Reclassification of AOCI tax effects	(18,341)	(18,341)
Accumulated other comprehensive loss	(348,753)	(343,705)
AOCI Attributable to Parent [Member]
Foreign currency translation adjustment	(150,496)	(147,716)
Interest rate swap, net of taxes	(22,337)	(13,338)
Cash flow hedges, net of taxes	6,407	1,763
Defined benefit pension plans adjustment, net of taxes	(163,882)	(165,968)
Reclassification of AOCI tax effects	(18,341)	(18,341)
Accumulated other comprehensive loss	(348,649)	(343,600)
AOCI Attributable to Noncontrolling Interest [Member]
Foreign currency translation adjustment	(104)	(105)
Interest rate swap, net of taxes	0	0
Cash flow hedges, net of taxes	0	0
Defined benefit pension plans adjustment, net of taxes	0	0
Reclassification of AOCI tax effects	0	0
Accumulated other comprehensive loss	$ (104)	$ (105)

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Note 11 - Earnings Per Share - Earnings Per Share (Details) - shares shares in Thousands	3 Months Ended
	Feb. 29, 2020	Mar. 02, 2019
Basic (in shares)	51,295	50,752
Equivalent shares from share-based compensations plans (in shares)	1,285	1,149
Weighted-average common and common equivalent shares - diluted (in shares)	52,580	51,901

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Note 2 - Acquisitions and Divestiture

3 Months Ended

Feb. 29, 2020

Notes to Financial Statements

Business Combination Disclosure [Text Block]

Note 2: Acquisitions and Divestiture

D.H.M. Adhesives, Inc.

On February 3, 2020, we acquired certain assets of D.H.M. Adhesives, Inc. (“D.H.M.”) for approximately $9,500 which was funded through existing cash. In addition, the agreement requires us to pay contingent consideration of up to approximately $8,100 based upon a formula related to revenue during the fiscal years ended November 27, 2021 and December 3, 2022. D.H.M., headquartered in Calhoun, Georgia, is a provider of hotmelt adhesives. The acquisition fair value measurement was preliminary as of February 29, 2020, which includes goodwill of $1,071 and customer relationship intangible of $11,900. The fair value of the contingent consideration as of the date of acquisition was $5,000. See Note 13 for further discussion of the fair value of the contingent consideration. Goodwill is deductible for tax purposes. D.H.M. and the related goodwill are reported in our Hygiene, Health and Consumable Adhesives (“HHC”) operating segment. The D.H.M acquisition does not represent a material business combination, and therefore pro forma financial information is not provided.

Ramapo Sales and Marketing, Inc.

On May 17, 2019, we acquired certain assets from a window and insulating glass sealants sales and distribution company, Ramapo Sales and Marketing, Inc. (“Ramapo”), headquartered in Charleston, South Carolina. This acquisition supports the integration of the insulating glass business that we acquired as part of the Royal Adhesives acquisition. The purchase price of $8,292 was funded through existing cash. In addition, we are required to pay up to $3,400 in contingent consideration based upon financial results for the twelve months ended December 31, 2019. Existing receivables of $2,166 from Ramapo were effectively settled as a result of the acquisition. The acquisition fair value measurement was preliminary as of February 29, 2020, which includes goodwill of $165, customer relationship intangible of $8,800, and additional acquired assets of $4,148. The fair value of the contingent consideration is $2,700. Goodwill is deductible for tax purposes. Ramapo and the related goodwill are reported in our Engineering Adhesives (“EA”) operating segment.

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Document And Entity Information - shares	3 Months Ended
	Feb. 29, 2020	Mar. 23, 2020
Document Information [Line Items]
Entity Central Index Key	0000039368
Entity Registrant Name	FULLER H B CO
Amendment Flag	false
Current Fiscal Year End Date	--11-28
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2020
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Feb. 29, 2020
Document Transition Report	false
Entity File Number	001-09225
Entity Incorporation, State or Country Code	MN
Entity Tax Identification Number	41-0268370
Entity Address, Address Line One	1200 Willow Lake Boulevard
Entity Address, City or Town	St. Paul
Entity Address, State or Province	MN
Entity Address, Postal Zip Code	55110-5101
City Area Code	651
Local Phone Number	236-5900
Title of 12(b) Security	Common Stock, par value $1.00 per share
Trading Symbol	FUL
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		51,411,113

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Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($) $ in Thousands	Feb. 29, 2020	Nov. 30, 2019
Trade receivables, allowances	$ 11,845	$ 10,682
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)	$ 1.00	$ 1.00
Common stock, shares authorized (in shares)	160,000,000	160,000,000
Common stock, shares outstanding (in shares)	51,407,204	51,241,190

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Note 13 - Fair Value Measurements (Details Textual) - USD ($) $ in Thousands	Feb. 29, 2020	Feb. 03, 2020	Nov. 30, 2019
Long-term Debt, Fair Value	$ 1,987,586		$ 2,016,516
D.H.M Adhesives, Inc [Member]
Business Combination, Contingent Consideration, Liability, Total	$ 5,000	$ 5,000	$ 0

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Note 6 - Leases (Details Textual) - USD ($) $ in Thousands	12 Months Ended
	Nov. 30, 2019	Dec. 01, 2018	Feb. 29, 2020	Dec. 01, 2019
Operating Lease, Liability, Total			$ 26,545
Lessee, Operating Lease, Renewal Term			5 years
Operating Lease, Weighted Average Remaining Lease Term			4 years 6 months
Operating Lease, Weighted Average Discount Rate, Percent			3.70%
Operating Leases, Rent Expense, Net, Total	$ 19,618	$ 20,620
Accounting Standards Update 2016-02 [Member]
Operating Lease, Right-of-Use Asset				$ 28,254
Operating Lease, Liability, Total				$ 28,254

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Note 5 - Goodwill and Other Intangible Assets (Details Textual) - USD ($) $ in Thousands	3 Months Ended
	Feb. 29, 2020	Mar. 02, 2019	Nov. 30, 2019
Amortization of Intangible Assets, Total	$ 17,990	$ 19,212
Indefinite Lived Trademarks and Trade Names	$ 480		$ 480

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Note 16 - Operating Segments

3 Months Ended

Feb. 29, 2020

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

Note 16: 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. Corporate assets are not allocated to the operating segments. Operating results of each of our 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.

As of November 30, 2019, we had five reportable segments: Americas Adhesives, EIMEA, Asia Pacific, Construction Adhesives and Engineering Adhesives. As of the beginning of fiscal 2020, we realigned our operating segment structure and now have three reportable segments: Hygiene, Health and Consumable Adhesives, Engineering Adhesives and Construction Adhesives. The change in operating segments is based on how we have organized the company to make operating decisions and assess business performance. Prior period segment information has been recast retrospectively to reflect the realignment.

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

	Three Months Ended
	February 29, 2020					March 2, 2019
			Segment					Segment
	Trade		Operating			Trade		Operating
	Revenue		Income (Loss)			Revenue		Income (Loss)
Hygiene, Health and Consumable Adhesives	$	312,512	$	22,664		$	319,854	$	20,890
Engineering Adhesives		248,895		15,365			264,372		21,986
Construction Adhesives		85,157		(1,373	)		82,790		(1,656	)
Total segment		646,564		36,656			667,016		41,220
Corporate Unallocated		-		(7,903	)		5,919		(7,008	)
Total	$	646,564	$	28,753		$	672,935	$	34,212

Consistent with our internal management reporting, Corporate Unallocated amounts in the table above include charges that are not allocated to the Company’s reportable segments.  For the three months ended March 2, 2019, Corporate Unallocated also includes operating results related to our surfactants and thickeners business, which we divested during the third quarter of 2019.

The table below provides a reconciliation of segment operating income to income before income taxes and income from equity method investments:

	Three Months Ended
	February 29,			March 2,
	2020			2019
Operating income	$	28,753		$	34,212
Other income, net		4,969			3,365
Interest expense		(22,757	)		(26,807	)
Interest income		2,918			3,053
Income before income taxes and income from equity method investments	$	13,883		$	13,823

The table below provides total assets of each of our operating segments as of November 30, 2019:

Total assets	November 30, 2019
Hygiene, Health and Consumable Adhesives	$	1,253,864
Engineering Adhesives		1,610,748
Construction Adhesives		799,995
Corporate		321,127
Total	$	3,985,734

We view the following disaggregation of revenue by geographic region as useful to understanding the composition of revenue recognized during the respective reporting periods:

	Three Months Ended February 29, 2020
	Hygiene, Health
	and Consumable		Engineering		Construction		Corporate
	Adhesives		Adhesives		Adhesives		Unallocated		Total
Americas	$	173,275	$	105,373	$	74,258	$	-	$	352,906
EIMEA		92,382		83,676		6,126		-		182,184
Asia Pacific		46,855		59,846		4,773		-		111,474
	$	312,512	$	248,895	$	85,157	$	-	$	646,564

	Three Months Ended March 2, 2019
	Hygiene, Health
	and Consumable		Engineering		Construction		Corporate
	Adhesives		Adhesives		Adhesives		Unallocated		Total
Americas	$	174,865	$	105,621	$	72,346	$	5,919	$	358,751
EIMEA		95,428		93,800		4,881		-		194,109
Asia Pacific		49,561		64,951		5,563		-		120,075
	$	319,854	$	264,372	$	82,790	$	5,919	$	672,935

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Note 5 - Goodwill and Other Intangible Assets (Tables)

3 Months Ended

Feb. 29, 2020

Notes Tables

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

	February 29, 2020
Amortizable Intangible Assets	Purchased Technology and Patents			Customer Relationships			Trade Names			Other			Total
Original cost	$	110,212		$	924,540		$	62,539		$	11,421		$	1,108,712
Accumulated amortization		(45,951	)		(236,848	)		(25,964	)		(4,107	)		(312,870	)
Net identifiable intangibles	$	64,261		$	687,692		$	36,575		$	7,314		$	795,842

	November 30, 2019
Amortizable Intangible Assets	Purchased Technology and Patents			Customer Relationships			Trade Names			Other			Total
Original cost	$	109,967		$	913,968		$	62,537		$	27,453		$	1,113,925
Accumulated amortization		(43,351	)		(223,563	)		(24,819	)		(23,273	)		(315,006	)
Net identifiable intangibles	$	66,616		$	690,405		$	37,718		$	4,180		$	798,919

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

	Remainder
Fiscal Year	2020		2021		2022		2023		2024		Thereafter
Amortization Expense	$	52,567	$	69,025	$	67,533	$	64,673	$	59,892	$	482,152

Operating Segments [Member]

Notes Tables

Schedule of Goodwill [Table Text Block]

	Hygiene, Health and Consumable		Engineering			Construction
	Adhesives		Adhesives			Adhesives			Total
Balance at November 30, 2019	$	321,274	$	649,555		$	310,979		$	1,281,808
Acquisition		1,071		(746	)		-			325
Currency impact		1,489		(2,270	)		(103	)		(884	)
Balance at February 29, 2020	$	323,834	$	646,539		$	310,876		$	1,281,249

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Consolidated Balance Sheets (Current Period Unaudited) - USD ($) $ in Thousands	Feb. 29, 2020	Nov. 30, 2019
Current assets:
Cash and cash equivalents	$ 78,738	$ 112,191
Trade receivables (net of allowances of $11,845 and $10,682, as of February 29, 2020 and November 30, 2019, respectively)	457,826	493,181
Inventories	380,975	337,267
Other current assets	110,691	90,723
Total current assets	1,028,230	1,033,362
Property, plant and equipment	1,323,664	1,304,231
Accumulated depreciation	(689,368)	(674,418)
Property, plant and equipment, net	634,296	629,813
Goodwill	1,281,249	1,281,808
Other intangibles, net	796,322	799,399
Other assets	285,169	241,352
Total assets	4,025,266	3,985,734
Current liabilities:
Notes payable	16,572	15,732
Current maturities of long-term debt	52,000	65,000
Trade payables	333,749	298,869
Accrued compensation	57,391	78,582
Income taxes payable	16,373	23,229
Other accrued expenses	67,230	60,745
Total current liabilities	543,315	542,157
Long-term debt, excluding current maturities	1,904,900	1,898,384
Accrued pension liabilities	81,241	80,214
Other liabilities	273,756	242,190
Total liabilities	2,803,212	2,762,945
Commitments and contingencies (Note 15)
H.B. Fuller stockholders' equity:
Preferred stock (no shares outstanding) shares authorized – 10,045,900	0	0
Common stock, par value $1.00 per share, shares authorized – 160,000,000, shares outstanding – 51,407,204 and 51,241,190, as of February 29, 2020 and November 30, 2019, respectively	51,407	51,241
Additional paid-in capital	132,851	130,295
Retained earnings	1,385,993	1,384,411
Accumulated other comprehensive loss	(348,649)	(343,600)
Total H.B. Fuller stockholders' equity	1,221,602	1,222,347
Non-controlling interest	452	442
Total equity	1,222,054	1,222,789
Total liabilities, non-controlling interest and total equity	$ 4,025,266	$ 3,985,734

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Note 13 - Fair Value Measurements - Fair Value Measurements (Details) - USD ($) $ in Thousands	Feb. 29, 2020	Nov. 30, 2019
Assets:
Interest Rate Fair Value Hedge Liability at Fair Value	$ 11,122
Fair Value, Inputs, Level 2 [Member]
Assets:
Foreign exchange contract assets		$ 1,227
Fair Value, Recurring [Member]
Assets:
Marketable securities	3,934	19,430
Foreign exchange contract assets	7,026	1,227
Interest Rate Fair Value Hedge Liability at Fair Value	11,122	5,741
Foreign Currency Cash Flow Hedge Asset at Fair Value	31,332	26,896
Liabilities:
Foreign exchange contract liabilities	3,797	1,800
Interest rate swaps, cash flow hedges	29,537	17,637
Business Combination, Contingent Consideration, Liability, Total	5,000
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 1 [Member]
Assets:
Marketable securities	3,934	19,430
Foreign exchange contract assets	0	0
Interest Rate Fair Value Hedge Liability at Fair Value	0	0
Foreign Currency Cash Flow Hedge Asset at Fair Value	0	0
Liabilities:
Foreign exchange contract liabilities	0	0
Interest rate swaps, cash flow hedges	0	0
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 2 [Member]
Assets:
Marketable securities	0	0
Foreign exchange contract assets	7,026
Interest Rate Fair Value Hedge Liability at Fair Value	11,122	5,741
Foreign Currency Cash Flow Hedge Asset at Fair Value	31,332	26,896
Liabilities:
Foreign exchange contract liabilities	3,797	1,800
Interest rate swaps, cash flow hedges	29,537	17,637
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 3 [Member]
Assets:
Marketable securities	0	0
Foreign exchange contract assets	0	0
Interest Rate Fair Value Hedge Liability at Fair Value	0	0
Foreign Currency Cash Flow Hedge Asset at Fair Value	0	0
Liabilities:
Foreign exchange contract liabilities	0	0
Interest rate swaps, cash flow hedges	0	$ 0
Business Combination, Contingent Consideration, Liability, Total	$ 5,000

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Note 9 - Accumulated Other Comprehensive Income (Loss) - Components of Accumulated Other Comprehensive Income (Loss) (Details) (Parentheticals) - USD ($) $ in Thousands	Feb. 29, 2020	Nov. 30, 2019
AOCI Including Portion Attributable to Noncontrolling Interest [Member]
Tax on interest swap	$ (7,201)	$ (4,300)
Tax on cash flow hedge	125	21
Tax on defined benefit pension plans adjustment	81,198	81,891
AOCI Attributable to Parent [Member]
Tax on interest swap	(7,201)	(4,300)
Tax on cash flow hedge	125	21
Tax on defined benefit pension plans adjustment	$ 81,198	$ 81,891

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Note 12 - Financial Instruments (Details Textual) - USD ($) $ in Thousands			3 Months Ended
	Apr. 23, 2018	Apr. 22, 2018	Feb. 29, 2020	Mar. 02, 2019	Nov. 30, 2019	Mar. 09, 2018	Feb. 27, 2018	Oct. 20, 2017	Feb. 24, 2017	Feb. 14, 2017
Interest Rate Fair Value Hedge Liability at Fair Value			$ 11,122
Other Operating Income (Expense) [Member]
Derivative Instruments Not Designated as Hedging Instruments, Gain (Loss), Net, Total			3,230	$ 4,076
Public Notes [Member]
Debt Instrument, Face Amount										$ 300,000
Term Loan B [Member]
Debt Instrument, Face Amount						$ 2,150,000	$ 2,150,000	$ 2,150,000
Derivative, Fixed Interest Rate						4.49%
Term Loan B [Member] | London Interbank Offered Rate (LIBOR) [Member]
Debt Instrument, Basis Spread on Variable Rate	2.00%	2.25%
Cross Currency Interest Rate Contract [Member]
Derivative, Notional Amount			443,800					401,200	$ 42,600
Foreign Currency Cash Flow Hedge Asset at Fair Value			31,332
Accumulated Other Comprehensive Income (Loss), Cumulative Changes in Net Gain (Loss) from Cash Flow Hedges, Effect Net of Tax, Ending Balance			6,407
Foreign Currency Cash Flow Hedge Gain (Loss) to be Reclassified During Next 12 Months			2,848
Cross Currency Interest Rate Contract [Member] | Other Assets [Member]
Foreign Currency Cash Flow Hedge Asset at Fair Value			31,332
Interest Rate Swap [Member]
Derivative, Amount of Hedged Item					$ 1,350,000	$ 100,000	$ 200,000	$ 1,050,000
Derivative, Fixed Interest Rate							4.589%	4.0275%
Interest Rate Swap [Member] | Other Assets [Member]
Interest Rate Fair Value Hedge Asset at Fair Value			$ 29,537
Interest Rate Swap Related to Public Notes [Member]
Derivative, Amount of Hedged Item										$ 150,000
Interest Rate Swap Related to Public Notes [Member] | London Interbank Offered Rate (LIBOR) [Member]
Derivative, Variable Interest Rate										1.86%

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Note 1 - Basis of Presentation

3 Months Ended

Feb. 29, 2020

Notes to Financial Statements

Business Description and Accounting Policies [Text Block]

Note 1: Basis of Presentation

Overview

The accompanying unaudited interim 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 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 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 November 30, 2019 as filed with the Securities and Exchange Commission.

Change in Segments

As of November 30, 2019, we had five reportable segments: Americas Adhesives, EIMEA, Asia Pacific, Construction Adhesives and Engineering Adhesives. As of the beginning of fiscal 2020, we realigned our operating segment structure and now have three reportable segments: Hygiene, Health and Consumable Adhesives, Engineering Adhesives and Construction Adhesives. The change in operating segments is based on how we have organized the company to make operating decisions and assess business performance. Prior period segment information has been recast retrospectively to reflect the realignment.

Change in Accounting Principle – Leases

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, Leases (Subtopic 842). This ASU 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. In December 2018, the FASB also issued ASU No. 2018-20, Leases (Topic 842): Narrow-Scope Improvements for Lessors, which clarifies the accounting for lessors for variable payments that relate to both a lease component and a nonlease component and is effective in the same timeframe as ASU 2016-02, and ASU No. 2019-01, Leases (Topic 842): Codification Improvements, which clarifies the transition disclosure requirements. In July 2018, the FASB issued ASU No. 2018-11, Leases (Topic 842): Targeted Improvements. This ASU allows entities to not recast comparative periods in transition to ASC 842 and instead report the comparative periods presented in the period of adoption under ASC 840. The ASU also includes a practical expedient for lessors to not separate the lease and nonlease components of a contract. In July 2018, the FASB issued ASU No. 2018-10, Codification Improvements to Topic 842, Leases. This ASU includes certain clarifications to address potential narrow-scope implementation issues which we are incorporating into our assessment and adoption of ASU No. 2016-02.

We adopted these ASUs and related standards during the first quarter ended February 29, 2020 using the modified retrospective method of adoption. As a result of the adoption of these ASUs, as of December 1, 2019 we recorded $28,254 of right-of-use assets and liabilities on the balance sheet. Adoption of these ASUs did not have a significant impact on the Consolidated Statements of Income. We have included the disclosures required by these ASUs in Note 6.

Change in Accounting Principle – Revenue Recognition

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. We adopted this ASU during the quarter ended March 2, 2019 using the modified retrospective method of adoption. As a result of the adoption of this ASU, we recorded an increase to opening retained earnings of $1,776 as of December 1, 2018 related to accelerated recognition for arrangements where we provide shipping and handling services after control of the goods has transferred to the customer. Prior periods were not restated. We have included the disclosures required by this ASU in Note 16.

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 were adopted during the quarter ended March 2, 2019 with ASU No. 2014-09 as discussed above.

Change in Accounting Principle – Income Tax Impact of Intra-Entity Transfers of Assets Other Than Inventory

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. We adopted this ASU during the quarter ended March 2, 2019. We recorded a decrease to opening retained earnings of $733 as of December 1, 2018 as a result of the adoption of this ASU.

New Accounting Pronouncements

In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. This ASU provides practical expedients and exception for applying U.S. GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. This ASU is applicable to our contracts and hedging relationships that reference LIBOR. The amendments may be applied through December 31, 2022. We will apply this guidance to transactions and modifications of these arrangements.

In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. This ASU simplifies the accounting for income taxes by clarifying and amending existing guidance related to the recognition of franchise tax, the evaluation of a step up in the tax basis of goodwill, and the effects of enacted changes in tax laws or rates in the effective tax rate computation, among other clarifications. Our effective date for adoption of this ASU is our fiscal year beginning November 28, 2021 with early adoption permitted. We have evaluated the effect that this guidance will have on our Consolidated Financial Statements and determined it will not have a material impact.

In June 2016, the FASB issued 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. The FASB also issued ASU No. 2018-19, Codification Improvements to Topic 326, Financial Instruments - Credit Losses, in November 2018, ASU No. 2019-04, Codification Improvements to Topic 326, Financial Instruments, in April 2019 and ASU No. 2019-11, Codification Improvements to Topic 326, Financial Instruments, in November 2019. ASU No. 2018-19 clarifies that receivables arising from operating leases are within the scope of Topic 842, Leases. ASU No. 2019-04 and ASU No. 2019-11 clarify various scoping and other issues arising from ASU No. 2016-13. The amendments in this ASU affect the guidance in ASU No. 2016-13 and are effective in the same timeframe as ASU No. 2016-13. Our effective date for adoption of these ASUs is our fiscal year beginning November 29, 2020. We are currently evaluating the effect that these ASUs will have on our Consolidated Financial Statements.

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Note 5 - Goodwill and Other Intangible Assets - Estimated Aggregate Amortization Expense (Details) $ in Thousands	Feb. 29, 2020 USD ($)
Remainder 2020	$ 52,567
2021	69,025
2022	67,533
2023	64,673
2024	59,892
Thereafter	$ 482,152

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Note 4 - Inventories - Inventories (Details) - USD ($) $ in Thousands	Feb. 29, 2020	Nov. 30, 2019
Raw materials	$ 171,896	$ 150,338
Finished goods	209,079	186,929
Total inventories	$ 380,975	$ 337,267

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Note 16 - Operating Segments (Details Textual)	3 Months Ended	12 Months Ended
	Feb. 29, 2020	Nov. 30, 2019
Number of Reportable Segments	3	5

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Note 13 - Fair Value Measurements - Contingent Consideration (Details) - D.H.M Adhesives, Inc [Member] - USD ($) $ in Thousands	Feb. 29, 2020	Feb. 03, 2020	Nov. 30, 2019
Balance	$ 5,000	$ 5,000	$ 0
Acquisitions	$ 5,000

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Note 7 - Accounting for Share-based Compensation (Details Textual) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Feb. 29, 2020	Mar. 02, 2019
Fair Value Options Granted During Period Value Share-based Compensation	$ 9,961	$ 9,331
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Intrinsic Value	346	910
Proceeds, Issuance of Shares, Share-based Payment Arrangement, Including Option Exercised, Total	907	$ 1,065
Total Fair Value of Nonvested Restricted Stock	$ 21,003
Repurchased Restricted Stock Shares	66,598	57,917
Share-based Payment Arrangement, Option [Member]
Share-based Payment Arrangement, Nonvested Award, Option, Cost Not yet Recognized, Amount	$ 13,766
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition	1 year 1 month 6 days
Restricted Stock Units (RSUs) [Member]
Share-based Payment Arrangement, Nonvested Award, Option, Cost Not yet Recognized, Amount	$ 14,654
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition	1 year 4 months 24 days
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Fair Value	$ 9,667	$ 7,846
Selling, General and Administrative Expenses [Member]
Share-based Payment Arrangement, Expense	$ 4,703	$ 5,906

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Note 7 - Accounting for Share-Based Compensation - Deferred Compensation Units (Details)	3 Months Ended
	Feb. 29, 2020 shares
Units outstanding (in shares)	562,324
Participant contributions (in shares)	8,956
Company match contributions (in shares)	896
Payouts (in shares)	(5,710)
Units outstanding (in shares)	566,466
Non Employee Directors [Member]
Units outstanding (in shares)	525,660
Participant contributions (in shares)	5,901
Company match contributions (in shares)	590
Payouts (in shares)	0
Units outstanding (in shares)	532,151
Employees [Member]
Units outstanding (in shares)	36,664
Participant contributions (in shares)	3,055
Company match contributions (in shares)	306
Payouts (in shares)	(5,710)
Units outstanding (in shares)	34,315

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Note 16 - Operating Segments (Tables)

3 Months Ended

Feb. 29, 2020

Notes Tables

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

	Three Months Ended
	February 29, 2020					March 2, 2019
			Segment					Segment
	Trade		Operating			Trade		Operating
	Revenue		Income (Loss)			Revenue		Income (Loss)
Hygiene, Health and Consumable Adhesives	$	312,512	$	22,664		$	319,854	$	20,890
Engineering Adhesives		248,895		15,365			264,372		21,986
Construction Adhesives		85,157		(1,373	)		82,790		(1,656	)
Total segment		646,564		36,656			667,016		41,220
Corporate Unallocated		-		(7,903	)		5,919		(7,008	)
Total	$	646,564	$	28,753		$	672,935	$	34,212

Total assets	November 30, 2019
Hygiene, Health and Consumable Adhesives	$	1,253,864
Engineering Adhesives		1,610,748
Construction Adhesives		799,995
Corporate		321,127
Total	$	3,985,734

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

	Three Months Ended
	February 29,			March 2,
	2020			2019
Operating income	$	28,753		$	34,212
Other income, net		4,969			3,365
Interest expense		(22,757	)		(26,807	)
Interest income		2,918			3,053
Income before income taxes and income from equity method investments	$	13,883		$	13,823

Disaggregation of Revenue [Table Text Block]

	Three Months Ended February 29, 2020
	Hygiene, Health
	and Consumable		Engineering		Construction		Corporate
	Adhesives		Adhesives		Adhesives		Unallocated		Total
Americas	$	173,275	$	105,373	$	74,258	$	-	$	352,906
EIMEA		92,382		83,676		6,126		-		182,184
Asia Pacific		46,855		59,846		4,773		-		111,474
	$	312,512	$	248,895	$	85,157	$	-	$	646,564

	Three Months Ended March 2, 2019
	Hygiene, Health
	and Consumable		Engineering		Construction		Corporate
	Adhesives		Adhesives		Adhesives		Unallocated		Total
Americas	$	174,865	$	105,621	$	72,346	$	5,919	$	358,751
EIMEA		95,428		93,800		4,881		-		194,109
Asia Pacific		49,561		64,951		5,563		-		120,075
	$	319,854	$	264,372	$	82,790	$	5,919	$	672,935

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Note 11 - Earnings Per Share (Tables)

3 Months Ended

Feb. 29, 2020

Notes Tables

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

	Three Months Ended
	February 29,		March 2,
(Shares in thousands)	2020		2019
Weighted-average common shares - basic		51,295		50,752
Equivalent shares from share-based compensations plans		1,285		1,149
Weighted-average common and common equivalent shares - diluted		52,580		51,901

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Note 12 - Financial Instruments

3 Months Ended

Feb. 29, 2020

Notes to Financial Statements

Derivative Instruments and Hedging Activities Disclosure [Text Block]

Note 12: 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 Consolidated Statement of Cash Flows in the same category as the cash flows from the items subject to designated hedge or undesignated (economic) hedge relationships. The company evaluates 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 monitor the credit quality of each of these banks on a 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

As of February 29, 2020, we had the following cash flow hedges: 1) six cross-currency swap agreements effective October 20, 2017 to convert a notional amount of $401,200 of foreign currency denominated intercompany loans into U.S. dollars and maturing in 2021 and 2022 and 2) one cross-currency swap agreement effective February 24, 2017 to convert a notional amount of $42,600 of foreign currency denominated intercompany loans into U.S. dollars and maturing on October 7, 2020.

As of February 29, 2020, the combined fair value of the swaps was an asset of $31,332 and was included in other assets in the 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 Consolidated Balance Sheets and in other net cash provided by operating activities in the Consolidated Statement of Cash Flows. The differences 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 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 amount in accumulated other comprehensive income (loss) related to cross-currency swaps was a gain of $6,407 as of February 29, 2020. The estimated net amount of the existing gain that is reported in accumulated other comprehensive income (loss) as of February 29, 2020 that is expected to be reclassified into earnings within the next twelve months is $2,848. As of February 29, 2020, 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 February 29, 2020:

	Fiscal Year of Expiration		Interest Rate		Notional Value		Fair Value
Pay EUR		2020		1.95%	$	42,600	$	(1,396	)
Receive USD				4.3038%
Pay EUR		2021		2.75%	$	133,340	$	10,214
Receive USD				4.9330%
Pay EUR		2022		3.00%	$	267,860	$	22,514
Receive USD				5.1803%
Total					$	443,800	$	31,332

On March 9, 2018, we entered into an interest rate swap agreement to convert $100,000 of our $2,150,000 Term Loan B issued on October 20, 2017 to a fixed interest rate of 4.490 percent. On February 27, 2018, we entered into an interest rate swap agreement to convert $200,000 of our $2,150,000 Term Loan B to a fixed interest rate of 4.589 percent. On October 20, 2017, we entered into interest rate swap agreements to convert $1,050,000 of our $2,150,000 Term Loan B to a fixed interest rate of 4.0275 percent. The combined fair value of the interest rate swaps in total was a liability of $29,537 at February 29, 2020 and was included in other liabilities in the Consolidated Balance Sheets. The swaps were designated for hedge accounting treatment as cash flow hedges. We are applying the hypothetical derivative method to assess hedge effectiveness for these interest rate swaps. Changes in the fair value of a hypothetically perfect swap with terms that match the critical terms of our $1,350,000 variable rate Term Loan B are compared with the change in the fair value of the swaps.

On April 23, 2018, we amended our Term Loan B Credit Agreement to reduce the interest rate from LIBOR plus 2.25 percent to LIBOR plus 2.00 percent. Fixed interest rates related to swap agreements disclosed have been updated to reflect the amendment.

The amounts of pretax gains (losses) recognized in Comprehensive Income related to derivative instruments designated as cash flow hedges are as follows:

	Three Months Ended
	February 29, 2020			March 2, 2019
Cross-currency swap contracts	$	4,746		$	4,284
Interest rate swap contracts		(11,900	)		(15,259	)

Fair Value Hedges

On February 14, 2017, we entered into interest rate swap agreements to convert $150,000 of our $300,000 Public Notes that were issued on February 14, 2017 to a variable interest rate of 1-month LIBOR plus 1.86 percent. The combined fair value of the interest rate swaps in total was an asset of $11,122 at February 29, 2020, and was included in other assets in the Consolidated Balance Sheets. The swaps were designated for hedge accounting treatment as fair value hedges. We are applying the hypothetical derivative method to assess hedge effectiveness for these interest rate swaps. Changes in the fair value of a hypothetically perfect swap with terms that match the critical terms of our $150,000 fixed rate Public Notes are compared with the change in the fair value of the swaps.

Derivatives Not Designated As Hedging Instruments

The company uses foreign currency forward contracts to offset its exposure to the change in value of certain foreign currency denominated assets and liabilities held at foreign subsidiaries that are remeasured at the end of each period. Although the contracts are effective economic hedges, they are not designated as accounting hedges. Foreign currency forward contracts are recorded as assets and liabilities on the balance sheet at fair value. Changes in the value of these derivatives are recognized immediately in earnings, thereby offsetting the current earnings effect of the related foreign currency denominated assets and liabilities. See Note 13 for fair value amounts of these derivative instruments.

As of February 29, 2020, we had forward foreign currency contracts maturing between March 2, 2020 and January 19, 2021. The mark-to-market effect associated with these contracts was largely offset by the underlying transaction gains and losses resulting from the foreign currency exposures for which these contracts relate.

The amounts of pretax gains (losses) recognized in other income, net related to derivative instruments not designated as hedging instruments for the three months ended February 29, 2020 and March 2, 2019 were $3,230 and $4,076, respectively.

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 February 29, 2020, there were no significant concentrations of credit risk.

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Note 4 - Inventories

3 Months Ended

Feb. 29, 2020

Notes to Financial Statements

Inventory Disclosure [Text Block]

Note 4: Inventories

The composition of inventories is as follows:

	February 29,		November 30,
	2020		2019
Raw materials	$	171,896	$	150,338
Finished goods		209,079		186,929
Total inventories	$	380,975	$	337,267

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Note 8 - Components of Net Periodic Benefit Related to Pension and Other Postretirement Benefit Plans

3 Months Ended

Feb. 29, 2020

Notes to Financial Statements

Pension and Other Postretirement Benefits Disclosure [Text Block]

Note 8: Components of Net Periodic Benefit related to Pension and Other Postretirement Benefit Plans

	Three Months Ended February 29, 2020 and March 2, 2019
													Other
	Pension Benefits												Postretirement
	U.S. Plans						Non-U.S. Plans						Benefits
Net periodic cost (benefit):	2020			2019			2020			2019			2020			2019
Service cost	$	-		$	1		$	725		$	568		$	18		$	24
Interest cost		2,935			3,673			794			1,184			284			387
Expected return on assets		(6,440	)		(6,326	)		(2,842	)		(2,587	)		(1,994	)		(1,753	)
Amortization:
Prior service cost (benefit)		(1	)		3			16			16			-			-
Actuarial loss		1,799			1,169			950			789			15			8
Net periodic benefit	$	(1,707	)	$	(1,480	)	$	(357	)	$	(30	)	$	(1,677	)	$	(1,334	)

Service cost is included with employee compensation cost in cost of sales and selling, general and administrative expenses in the Consolidated Statements of Income.  The components of our net periodic defined benefit pension and postretirement benefit costs other than service cost are presented in other income (expense), net in the Consolidated Statements of Income.