FULLER H B CO Fair Value Disclosure

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:

 

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Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.

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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.

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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 November 29, 2025 and November 30, 2024, and indicates the fair value hierarchy of the valuation techniques utilized to determine such fair value.

 

						Fair Value Measurements Using:
		November 29,
Description		2025				Level 1				Level 2				Level 3
Assets:
Marketable securities		$	4,352			$	4,352			$	-			$	-
Foreign exchange contract assets			4,841				-				4,841				-
Liabilities:
Foreign exchange contract liabilities		$	635			$	-			$	635			$	-
Interest rate swaps, cash flow hedge liabilities			8,498				-				8,498				-
Interest rate swaps, fair value hedge liabilities			20,481				-				20,481				-
Net investment hedge liabilities			113,144				-				113,144				-
Holdback liability			33,578				-				-				33,578

 

						Fair Value Measurements Using:
		November 30,
Description		2024				Level 1				Level 2				Level 3
Assets:
Marketable securities		$	8,584			$	8,584			$	-			$	-
Foreign exchange contract assets			2,147				-				2,147				-
Interest rate swaps, cash flow hedge assets			1,781				-				1,781				-
Liabilities:
Foreign exchange contract liabilities		$	7,074			$	-			$	7,074			$	-
Interest rate swaps, cash flow hedge liabilities			265				-				265				-
Interest rate swaps, fair value hedge liabilities			32,775				-				32,775				-
Net investment hedge liabilities			51,871				-				51,871				-

 

The fair value of the holdback liability related to the acquisition of GEM and Medifill, based on a discounted cash flow model, was $33,578 as of November 29, 2025. Adjustments to the fair value of the holdback are recorded to interest expense in the Statement of Income. See Note 2 for further discussion regarding our acquisitions. The following table provides details of this Level 3 liability.

 

Holdback Liability		2025
Level 3 balance at beginning of year		$	-
Initial valuation of holdback liability			28,922
Interest			905
Foreign currency translation adjustment			3,751
Level 3 balance at end of year		$	33,578

 

Balances Measured at Fair Value on a Nonrecurring Basis

 

We measure certain assets and liabilities at fair value on a nonrecurring basis. These assets include intangible assets acquired in an acquisition. The identified intangible assets of customer relationships, technology and tradenames acquired in connection with our acquisitions were measured using unobservable (Level 3) inputs. The fair value of the intangible assets was calculated using either the income or cost approach. Significant inputs include estimated revenue growth rates, gross margins, operating expenses, attrition rate, royalty rate and discount rate.  

 

See Note 2 for further discussion regarding our acquisitions.

 

See Note 7 for discussion regarding the fair value of debt.