Adhesives and specialty chemicals maker HB Fuller Co. (FUL) said Tuesday that its first quarter profit declined from last year, hurt by sharp contraction in global demand associated with the financial market disruption. Looking ahead, the company also said it expects net revenue to decline in the range of about 10% to 12% over last year.

The St. Paul, Minnesota-based company's net income for the first quarter was $6.1 million or $0.13 per share, down from $18.2 million or $0.32 per share in prior year quarter.

Results for the quarter under review included a non-cash true-up for the estimated goodwill impairment charge of $0.5 million or $0.01 per share associated with the Specialty Construction Brands business component.

Excluding the non-cash impairment charge, adjusted net income was $6.6 million or $0.14 per share for the first quarter of fiscal 2009. On average, 7 analysts polled by Thomson Reuters expected the company to earn $0.14 per share for the first quarter. Analysts' estimate typically excludes special items.

Net revenue for the first quarter declined to $278.6 million from $322.6 million in the same quarter of last year, hurt by lower volume and unfavorable foreign currency translation, partially offset by higher average selling prices and the acquisition in Egypt. Four analysts had a consensus revenue estimate of $285.65 million for the first quarter.

Gross profit for the quarter decreased to $75.0 million from $91.5 million in the previous year quarter. The company noted that gross margin was lower in the first quarter of 2009, reflecting the residual negative impact of raw material cost increases.

For the full year 2009, HB Fuller anticipates net revenue to be down about 10% to 12% over last year. The Street currently expects revenue of $1.29 billion for the year.

During the quarter, HB Fuller entered into an agreement to acquire Nordic Adhesives, a German manufacturer of flexible packaging adhesives. Nordic Adhesives has generated net revenue of about US$9 million in fiscal 2008.

Last month, KeyBanc Capital lowered its 2009 estimate on weaker volumes. The reduction is fairly front-end loaded and the brokerage continues to look for sequential improvement as the year unfolds. The brokerage reduced its first quarter estimate due to weaker volumes and margin pressure as FUL works its way through higher cost inventory.

HB Fuller closed Tuesday's regular trading session at $13.00, up 3 cents, on a volume of 0.33 million shares. The stock has been moving in a range of $9.70 - $27.84 for the past 52 weeks, with an average daily volume of about 0.44 million shares for the past three months.

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