Slide 15 of 35
Notes:
I’D LIKE TO BEGIN MY COMMENTS TODAY BY THANKING YOU FOR YOUR ONGOING SUPPORT OF H.B. FULLER. MY PARTICULAR THANKS GO TO THOSE SHAREHOLDERS THAT ARE ALSO OUR EMPLOYEES OR RETIREES AND AS SUCH HAVE BEEN DEDICATING AN IMPORTANT PART OF THEIR LIVES TO THE SUCCESS OF OUR COMPANY.
WE HAVE SPENT THE PAST SIX YEARS STRENGTHENING THE ORGANIZATION, FINETUNING OUR STRATEGIC DIRECTION, AND IMPROVING OUR COMPETITIVENESS. IT HAS NOT ALWAYS BEEN EASY NOR HAVE THESE BEEN THE BEST OF TIMES FROM AN ECONOMIC PERSPECTIVE. HOWEVER, WE HAVE FASHIONED A COMPANY THAT IS CAPABLE OF HOLDING ITS OWN IN DIFFICULT TIMES, AND, WE ARE CONVINCED, POISED TO EXCEL IN AN IMPROVED ECONOMIC ENVIRONMENT SUCH AS WE ARE STARTING TO EXPERIENCE AT THIS POINT IN TIME.
BY ALL ACCOUNTS, AND BASED ON MY OWN WORKING LIFE EXPERIENCE - WHICH IS HITTING ITS 40TH ANNIVERSARY THIS YEAR - THE LAST THREE TO FOURYEARS HAVE BEEN THE MOST CHALLENGING IN A VERY, VERY LONG TIME.
HOWEVER, WE HELD OUR OWN IN TOUGH TIMES YET AGAIN IN 2003.
THIS PAST YEAR, WE EXPERIENCED INCREASES IN RAW MATERIAL COSTS, PARTLY DUE TO THE UNCERTAINTY SURROUNDING THE MIDDLE EAST, AN ELUSIVE ECONOMIC RECOVERY, AND HEAVY COMPETITION FOR VOLUME. THIS RESULTED IN DECREASES IN OUR OVERALL SALES VOLUME, IN OUR AVERAGE SELLING PRICE, AND A GROSS MARGIN EROSION COMPARED TO 2002. MOST OF THESE NEGATIVE FACTORS PLAYED OUT IN THE FIRST HALF OF 2003, AND FORTUNATELY WE SAW CONSIDERABLE STRENGTHENING IN THE SECOND HALF OF THE YEAR.
