What H.B. Fuller Co. told the SEC could break it.

H.B. Fuller's adhesives and sealants are made from raw materials that are predominantly petroleum/natural-gas-based derivatives — resins, polymers, synthetic rubbers, vinyl acetate monomer and plasticizers — so the cost and availability of its inputs are driven by crude oil and natural gas prices and by chemical supply/demand. Although it generally avoids sole-source arrangements (alternate supplies of most key materials exist), unplanned supplier production outages can create strained supply-demand for key inputs such as ethylene, propylene, several polymers and petroleum derivatives like waxes, raising costs and tightening availability.

“The principal raw materials used to manufacture products include resins, polymers, synthetic rubbers, vinyl acetate monomer and plasticizers. We generally avoid sole source supplier arrangements for raw materials. While alternate supplies of most key raw materials are available, unplanned supplier production outages may lead to strained supply-demand situations for several key raw materials such as ethylene and propylene, several polymers and other petroleum derivatives such as waxes.”

Tariffs threaten H.B. Fuller on two fronts: they can raise the prices it pays for critical imported raw materials (and it may be unable to find domestic suppliers on an economical basis in the volumes it needs), and they can decrease the competitiveness of its products in foreign markets — or foreclose sales into them entirely. This is significant because approximately 56% (~$2.0 billion) of its net revenue is generated outside the United States, so both input-cost inflation and retaliatory/foreign-market tariff barriers could hurt operating results, profitability and customer relationships.

“In addition, we may be unable to find a domestic supplier to provide the necessary raw materials on an economical basis in the amounts we require. Tariffs may decrease the competitiveness of our products in foreign markets or foreclose our sales entirely into those markets. We could experience a negative impact on our operating results, profitability, customer relationships and future cash flows.”