This summary is based on the third quarter fiscal 2008 earnings call conducted by H.B. Fuller Co. (FUL: chart) on September 23, 2008.

Management:

- President and Chief Executive Officer: Michele Volpi
- Chief Financial Officer: James R. Giertz
- Director of Investor Relations: Steven Brazones

Key Investors Issues

- Net revenue was up 2.8%, to $362 million.
- Income from continuing operations was $21.7 million, or 44 cents per diluted share, down 19%.
- The firm recently announced the acquisition of Egymelt in Cairo, Egypt.

Year to Date Highlights:

- Income from continuing operations was $61.3 million or $1.16 per diluted share, down 13% from $70.4 million, or $1.15 per diluted share in 2007.
- Net revenue was $1.04 billion, up 0.2%.

Third Quarter Highlights

Net revenue was up 2.8%, to $362 million from $352 million in the prior year driven by favorable foreign currency translation.

- Organic sales, while down slightly, are heading in the right direction with volume declines eased and pricing momentum continued.
- Foreign currency translation favorably contributed 4.8 percentage points to net revenue growth.
- Higher average selling prices positively impacted net revenue growth by 2.6 percentage points and lower volume adversely impacted net revenue growth by 4.6 percentage points.

Income from continuing operations was $21.7 million, or 44 cents per diluted share, down 19% from $26.8 million, or 44 per diluted share, in last year''s third quarter on weaker margins.

- With respect to EBITDA margin, the raw material situation led to a deterioration of 390 basis points year-over-year.
- Operating costs were reduced by 130 basis points, partially mitigating the lower gross profit margin.
- ROGI declined 50 basis points versus the second quarter, with the decline primarily due to the reduction in EBITDA.
- However, cross-investment improved during the quarter, due in part to reductions in net working capital.

Operational Overview:

- Raw material costs, which have been a headwind for the entire year, increased farther in a rapid and unpredictable way and significantly more than expected.
- As a result, pricing actions, although improved, were not enough to offset the increased costs.
- Organic sales trend continued to improve despite ongoing weaknesses in many of the end markets, and this trend is expected to continue to improve in the fourth quarter, ultimately leading to a return to positive organic growth.

Significant pricing actions raised average selling price by 2.6% year-over-year, nearly three times the increase achieved in the second quarter.

- SG&A expense controls and continued scrutiny of discretionary spending drove SG&A down year-over-year in both absolute and percentage terms.
- The firm reduced the net working capital position by 60 basis points versus the second quarter, further strengthening the solid balance sheet.
- The firm recently announced the acquisition of Egymelt in Cairo, Egypt, which specializes in hot melt and specialty water-based technologies.
- This acquisition will serve as the platform for growth in the Middle East and North Africa, one of the fastest-growing regions in the world.
- In China, the technology center is currently in the build-out phase and the firm expects it to be fully stocked an operational by year end.
- In Latin America, investments made on the customer-facing side of the business continue to fuel strong organic growth.

Regional Review of The Business:

- In North America, the macroeconomic situation is little changed from that of the prior quarter.
- Construction continues to be the weakest end market and recessionary concerns have not abated.
- While the region''s net revenue declined, the organic sales strength continued to improve despite the challenging end market conditions.

Recent hurricane activity has led to even tighter supply conditions for several of raw materials and this is expected to continue for at least the next few months.

- In Europe, the firm has struggled, with year-to-date organic revenue 7.1% below last year.
- Volume has been impacted by a variety of end market, competitive and internal issues that have created erosion that has outweighed the benefit of new business.
- In Latin America, top line performance was strong, with pricing actions in the region most aggressive, with average selling price up nearly 7% year-over-year.
- The adhesives business was flat while the paints business posted a 15% increase.
- In Asia-Pacific, double-digit organic growth driven by new business wins plus positive currency translation, the region grew net revenue by more than 17% year-over-year.