-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, HStxltiLyKWtscPMLOyqPcasp32KiyFVON2FNkBnFjb3StdkkbUiSlJ1PYXhg8C+ sZhCcGg3V0iJD7xUyBxopw== 0000893838-99-000009.txt : 19990125 0000893838-99-000009.hdr.sgml : 19990125 ACCESSION NUMBER: 0000893838-99-000009 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990122 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19990122 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FORTUNE BRANDS INC CENTRAL INDEX KEY: 0000789073 STANDARD INDUSTRIAL CLASSIFICATION: HEATING EQUIP, EXCEPT ELEC & WARM AIR & PLUMBING FIXTURES [3430] IRS NUMBER: 133295276 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-09076 FILM NUMBER: 99511512 BUSINESS ADDRESS: STREET 1: 1700 E PUTNAM AVE CITY: OLD GREENWICH STATE: CT ZIP: 06870-0811 BUSINESS PHONE: 2036985000 FORMER COMPANY: FORMER CONFORMED NAME: AMERICAN BRANDS INC /DE/ DATE OF NAME CHANGE: 19920703 8-K 1 FORM 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 January 22, 1999 (January 22, 1999) --------------------------------------------------------------------------- Date of Report (Date of earliest event reported) FORTUNE BRANDS, INC. --------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 1-9076 13-3295276 --------------------------------------------------------------------------- (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) l700 East Putnam Avenue, Old Greenwich, Connecticut 06870-0811 --------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (203) 698-5000 ---------------------- INFORMATION TO BE INCLUDED IN THE REPORT Item 5. Other Events. - ------ ------------ Registrant's press release dated January 22, 1999 is filed herewith as Exhibit 20 and is incorporated herein by reference. Item 7. Financial Statements and Exhibits. - ------ --------------------------------- (c) Exhibits. -------- 20. Press release of Registrant dated January 22, 1999. SIGNATURE --------- Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Current Report to be signed on its behalf by the undersigned thereunto duly authorized. FORTUNE BRANDS, INC. -------------------- (Registrant) By /s/ C.P. Omtvedt -------------------------------- C. P. Omtvedt Senior Vice President and Chief Accounting Officer Date: January 22, 1999 EXHIBIT INDEX Sequentially Exhibit Numbered Page - ------- ------------- 20. Press release of Registrant dated January 22, 1999. EX-20 2 EXHIBIT 20 Exhibit 20 NEWS RELEASE NEWS RELEASE Fortune Brands, Inc., 1700 East Putnam Avenue, Old Greenwich, CT 06870 NEWS RELEASE Contact: Media Relations: Investor Relations Clarkson Hine Anthony J. Diaz (203) 698-5148 (203) 698-5553 FORTUNE BRANDS ANNOUNCES EXCELLENT FOURTH QUARTER AND FULL YEAR RESULTS Record 1998 Operating Company Contribution from Every Category; Sales Surpass $5 Billion; 1998 EPS Up 13% Pro Forma Old Greenwich, CT, January 22, 1999 -- Fortune Brands, Inc. (NYSE-FO), the consumer products company, today reported excellent fourth quarter and full year results, compared with 1997 pro forma results. For the fourth quarter: o Sales +7% to $1.41 billion o Income from Operations +11% to $96 million o Diluted E.P.S. +12% to 55 cents o Cash earnings (excluding amortization) +11% to 70 cents per share For the year 1998: o Sales +8% to $5.24 billion o Income from Operations +14% to $294 million o Diluted E.P.S. +13% to $1.67 o Cash earnings (excluding amortization) +10% to $2.26 Highlights include: o Very strong fourth quarter and full year results for home products. Moen (Fortune Brands' topselling brand) and the cabinet brands, Aristokraft and Schrock (acquired in June 1998), all posted solid double-digit sales gains. The robust housing market, recent acquisitions, and strong gains with large customers (including home centers) all contributed. o Excellent results for spirits and wine. Excluding the impact of foreign currency translation, operating company contribution was up 6% and 8%, respectively, for the fourth quarter and full year. The key Jim Beam Bourbon and DeKuyper cordial brands achieved excellent sales and contribution growth, and the year closed with strong momentum. o Office products sell-through from retailers and distributors to customers was strong. Results, as previously indicated, were negatively affected by widespread trade inventory reduction programs and pricing pressure related to mid-1998 trade consolidations. Even so, with the benefit of acquisitions, full year sales and contribution were up solidly to records. o While golf results in the seasonally slow fourth quarter were negatively affected, as previously projected, by the contraction in the golf club market, sales and contribution increased to records for the full year. Golf ball sales surged 11% to a record for the year, and, despite the market weakness, golf club revenues increased 6%. Tremendous demand for new Titleist Titanium clubs more than offset a decline for Cobra in line with the industry's decline. Although conditions in the club market are likely to affect comparisons early in the year, aggressive actions are underway to bring Cobra expenses in line with lower demand and lower prices, and to drive further synergies between Titleist and Cobra. Chairman and Chief Executive Officer Thomas C. Hays said: "We had another excellent earnings growth year in 1998. Every category achieved record contribution. We completed three acquisitions, increased the dividend and reduced our total shares outstanding. "Our sharp focus on revenue growth, cost initiatives and enhanced asset management is delivering sustained results, and the outlook is bright. With our leading positions in growing consumer categories, we expect another fine, double-digit E.P.S. growth year in 1999. We believe the consensus outlook for 10-to-11% growth is realistic." Other highlights: o Dividend +5% effective with the December 1 payment o 3.4 million shares repurchased in 1998 o Add-on acquisitions are performing well; 8 completed in 1997-98 (3 in 1998); Schrock cabinets, the largest, achieved results well ahead of plan; Geyser Peak wines outperformed major competitors and garnered prestigious recognition for outstanding quality. * * * * Fortune Brands, Inc. is a consumer products company with headquarters in Old Greenwich, Connecticut. Its operating companies have premier brands and leading market positions in home and office products, golf equipment and distilled spirits. Home and office brands include Moen faucets, Master locks and Aristokraft and Schrock cabinets sold by units of MasterBrand Industries and Day-Timer, Swingline and Wilson Jones sold by units of ACCO World Corporation. Acushnet Company's golf brands include Titleist, Cobra and FootJoy. Major spirit and wine brands sold by units of Jim Beam Brands Worldwide, Inc. include Jim Beam and Knob Creek Bourbon, DeKuyper cordials, Whyte & Mackay Scotch and Geyser Peak and Canyon Road wines. * * * This press release contains statements relating to future results, which are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Readers are cautioned that these forward-looking statements speak only as of the date hereof. Actual results may differ materially from those projected as a result of certain risks and uncertainties, including but not limited to changes in general economic conditions, foreign exchange rate fluctuations, competitive product and pricing pressures, the impact of excise tax increases with respect to distilled spirits, regulatory developments, the uncertainties of litigation, changes in golf equipment regulatory standards, the impact of weather, particularly on the home products and golf brand groups, expenses and disruptions related to shifts in manufacturing to different locations and sources, delays in the integration of recent acquisitions, the timely resolution of the Year 2000 issue, as well as other risks and uncertainties detailed from time to time in the Company's Securities and Exchange Commission filings. # # # FORTUNE BRANDS, INC. CONSOLIDATED STATEMENT OF INCOME (In millions, except per share amounts) (Unaudited)
Three Months Ended December 31, 1998 1997 % Change Net Sales $1,410.9 $1,318.4 7.0 Cost of products sold 700.2 635.3 10.2 Excise taxes on spirits and wine 136.7 132.0 3.6 Advertising, selling, general and administrative expenses 353.9 341.7 3.6 Amortization of intangibles 27.7 26.3 5.3 Restructuring and other nonrecurring charges - 170.8 - Interest and related expenses 26.1 24.0 8.8 Other (income) expenses, net 1.3 6.6 (80.3) Income From Continuing Operations Before Income Taxes 165.0 (18.3) - Income taxes 69.1 7.5 - Income From Continuing Operations 95.9 (25.8) - Income from discontinued operations - - - Extraordinary items * - (8.1) - Net Income $95.9 ($33.9) 382.9 Earnings Per Common Share Basic Income from operations $0.56 $0.51 9.8 Restructuring and other nonrecurring charges - (0.66) - Income from continuing operations 0.56 (0.15) - Income from discontinued operations - - - Extraordinary items - (0.05) - Net income $0.56 ($0.20) 380.0 Diluted Income from operations $0.55 $0.51 7.8 Restructuring and other nonrecurring charges - (0.66) - Income from continuing operations 0.55 (0.15) - Income from discontinued operations - - - Extraordinary items * - (0.05) - Net income $0.55 ($0.20) 375.0 Avg. Common Shares Outstanding Basic 171.1 171.7 (0.3) Diluted 174.6 171.7 1.7
FORTUNE BRANDS, INC. CONSOLIDATED STATEMENT OF INCOME (In millions, except per share amounts) (Unaudited)
Twelve Months Ended December 31, 1998 1997 % Change Net Sales $5,240.9 $4,844.5 8.2 Cost of products sold 2,667.9 2,451.3 8.8 Excise taxes on spirits and wine 443.7 418.7 6.0 Advertising, selling, general and administrative expenses 1,401.5 1,301.6 7.7 Amortization of intangibles 108.2 104.2 3.8 Restructuring and other nonrecurring charges - 298.2 - Interest and related expenses 102.7 116.7 (12.0) Other (income) expenses, net 5.0 14.1 (64.5) Income From Continuing Operations Before Income Taxes 511.9 139.7 - Income taxes 218.3 98.2 - Income From Continuing Operations 293.6 41.5 - Income from discontinued operations - 65.1 - Extraordinary items * (30.5) (8.1) - Net Income $263.1 $98.5 167.1 Earnings Per Common Share Basic Income from operations $1.70 $1.41 20.6 Restructuring and other nonrecurring charges - (1.17) - Income from continuing operations 1.70 0.24 - Income from discontinued operations - 0.38 - Extraordinary items * (0.18) (0.05) - Net income $1.52 $0.57 166.7 Diluted Income from operations $1.67 $1.39 20.1 Restructuring and other nonrecurring charges - (1.16) - Income from continuing operations 1.67 0.23 - Income from discontinued operations - 0.38 - Extraordinary items (0.18) (0.05) - Net income $1.49 $0.56 166.1 Avg. Common Shares Outstanding Basic 172.2 171.6 0.3 Diluted 176.2 173.3 1.7 Actual Common Shares Outstanding Basic 170.9 171.9 (0.6) Diluted 173.9 175.4 (0.9)
* Extraordinary items amounts represent charges for the early extinguishment of debt. FORTUNE BRANDS, INC. (In millions, except per share amounts) (Unaudited)
Three Months Ended Twelve Months Ended December 31, December 31, 1998 1997 % Change 1998 1997 % Change SEGMENT DATA NET SALES Home Products $481.1 $377.4 27.5 $1,624.4 $1,394.0 16.5 Office Products 401.2 402.3 (0.3) 1,387.7 1,294.2 7.2 Home and Office Products 882.3 779.7 13.2 3,012.1 2,688.2 12.0 Golf Products 142.8 161.6 (11.6) 962.9 911.6 5.6 Sprits and Wine 385.8 377.1 2.3 1,265.9 1,244.7 1.7 Total $1,410.9 $1,318.4 7.0 $5,240.9 $4,844.5 8.2 OPERATING COMPANY CONTRIBUTION* Home Products $80.3 $64.0 25.5 $252.5 $222.9 13.3 Office Products 55.0 58.2 (5.5) 134.0 128.1 4.6 Home and Office Products 135.3 122.2 10.7 386.5 351.0 10.1 Golf Products 5.3 11.9 (55.5) 142.9 138.2 3.4 Spirits and Wine 96.9 92.4 4.9 268.9 257.2 4.5 Total $237.5 $226.5 4.9 $798.3 $746.4 7.0
* Operating company contribution is net sales less all costs and expenses excluding restructuring and other nonrecurring charges, amortization of intangibles, corporate administrative expenses, interest and related expenses and other (income) expenses, net.
Three Months Ended Twelve Months Ended December 31, December 31, 1998 1997 % Change 1998 1997 % Change Pro Forma Pro Forma PRO FORMA FINANCIAL INFORMATION** Income from Operations $95.9 $86.7 10.6 $293.6 $257.8 13.9 Earnings Per Common Share: Basic $0.56 $0.51 9.8 $1.70 $1.51 12.6 Diluted 0.55 0.49 12.2 1.67 1.48 12.8
** Pro Forma Financial Information sets forth income from operations (income from continuing operations excluding restructuring and other nonrecurring charges) for the three-month and twelve-month periods ended December 31, 1997. The twelve months is also adjusted to reflect the net cash payment made to the Company related to the spin-off of Gallaher Group Plc, the Company's international tobacco subsidiary, on May 30, 1997, and the assumption that such proceeds were used to purchase 2.5 million Common shares and repay debt as of January 1, 1997. FORTUNE BRANDS, INC. CONDENSED CONSOLIDATED BALANCE SHEET (In millions)
December 31, December 31, 1998 1997 (Unaudited) Assets Current assets Cash and cash equivalents $40.3 $54.2 Accounts receivable, net 919.9 862.0 Inventories 1,087.6 955.2 Other current assets 217.5 224.2 --------- --------- Total current assets 2,265.3 2,095.6 Property, plant and equipment, net 1,119.9 980.9 Intangibles resulting from business acquisitions, net 3,761.3 3,674.1 Other assets 213.2 191.9 --------- --------- Total assets $7,359.7 $6,942.5 ========= ========= Liabilities and Stockholders' Equity Current liabilities Short-term debt $321.4 $228.4 Current portion of long-term debt 183.3 176.2 Other current liabilities 1,339.9 1,363.9 --------- --------- Total current liabilities 1,844.6 1,768.5 Long-term debt 981.7 739.1 Other long-term liabilities 435.9 417.8 --------- --------- Total liabilities 3,262.2 2,925.4 Stockholders' equity 4,097.5 4,017.1 --------- --------- Total liabilities and stockholders' equity $7,359.7 $6,942.5 ========= =========
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