-----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, DOF9tlJlLQrL0vJjmkMkTjXqmz3yWbSW08Gm5rUlWCd3O/grsaiphtaIyGTvf34S w6MGhEzi+3BNttb764662A== 0000893838-00-000116.txt : 20000424 0000893838-00-000116.hdr.sgml : 20000424 ACCESSION NUMBER: 0000893838-00-000116 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000420 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20000421 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: 606144 BUSINESS ADDRESS: STREET 1: 300 TOWER PARKWAY CITY: LINCOLNSHIRE STATE: IL ZIP: 60069 BUSINESS PHONE: 2036985000 FORMER COMPANY: FORMER CONFORMED NAME: AMERICAN BRANDS INC /DE/ DATE OF NAME CHANGE: 19920703 8-K 1 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 April 20, 2000 (April 20, 2000) --------------------------------------------------------------------------- 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.) 300 Tower Parkway, Lincolnshire, Illinois 60069 --------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (847) 484-4400 ---------------------- INFORMATION TO BE INCLUDED IN THE REPORT Item 5. Other Events. - ------ ------------ Registrant's press release dated April 20, 2000 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 April 20, 2000. 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 Financial Officer Date: April 20, 2000 EXHIBIT INDEX Sequentially Exhibit Numbered Page - ------- ------------- 20. Press release of Registrant dated April 20, 2000. EX-20 2 EXHIBIT 20 [GRAPHIC OMITTED] Fortune Brands, Inc., 300 Tower Parkway, Lincolnshire, IL 60069 NEWS RELEASE NEWS RELEASE NEWS RELEASE Contact: Media Relations: Investor Relations: Clarkson Hine Anthony J. Diaz (847) 484-4415 (847) 484-4410 FORTUNE BRANDS REPORTS RECORD FIRST QUARTER RESULTS Diluted EPS Up 31%, Before Charges; Solid Top-Line Growth, ---------------------------------------------------------- Strength of Home, Spirits and Golf Brands Drive Results; -------------------------------------------------------- Company Reaffirms Full-Year Outlook for Solid Double-Digit EPS Growth --------------------------------------------------------------------- Lincolnshire, IL, April 20, 2000 - Fortune Brands, Inc. (NYSE: FO, www.fortunebrands.com), the consumer products company, today announced record first quarter 2000 earnings propelled by solid top-line growth and strong operating company contribution from the home, golf and spirits and wine businesses. Diluted EPS before charges reached 42 cents, up 31% from 32 cents a year ago. Excluding a five cent per share benefit from lower goodwill amortization, diluted EPS before charges grew 16%. "Our brand leadership, new product innovation and major business improvements are a powerful combination that delivered a very strong quarter for Fortune Brands," said Chairman and Chief Executive Officer Norm Wesley. "We're building momentum by investing in market-leading brands like Moen, Titleist and Jim Beam. And we're supplementing solid top-line growth with major cost reductions and aggressive business improvements that have bottom-line impact and enhance returns. Corporate office expenses were sharply lower, and our major supply chain restructuring is boosting margins, asset returns and competitiveness." "These strong first quarter results put Fortune Brands on track to deliver solid double-digit EPS growth for the full year," Wesley added. First quarter financial highlights include: o Record sales +6% to $1.36 billion (+7% adjusting for sales through the new Maxxium international spirits and wine joint venture, which are now net of distribution expense and excise tax) o Record operating company contribution +7% to $183 million o Diluted EPS +31% to 42 cents (+16% excluding a five cent per share benefit from lower goodwill amortization) o Diluted cash earnings were even higher at 53 cents per share (more) www.fortunebrands.com The company also announced that it accelerated share repurchases in the first quarter. As of April 14th, the company had repurchased 5 million shares in 2000. Over the past 16 months, Fortune Brands has bought back 16 million shares, reducing shares outstanding by nearly 10%. The company's Executive Committee has authorized the repurchase of up to 5 million additional shares. In the first quarter, the company recorded restructuring and non-recurring charges of $7 million. The charges related primarily to the relocation of the corporate office, supply chain restructuring at Master Lock, and European facilities consolidation in the golf and office products businesses. Including the charges, reported net earnings were $64.3 million, or 39 cents per share. Operational highlights include: o Robust demand from home centers helped drive record sales and contribution for home products. Moen faucets (#1 in North America) and the Aristokraft, Schrock and NHB cabinet brands (combined #2) continued to gain market share. Innovative new products, productivity improvements, strong Waterloo tool storage sales and the benefits of Master Lock's supply chain restructuring contributed to the record home products performance. Strength in the growing remodeling market positions the home products business for continued strong growth. o The spirits and wine business achieved record contribution and continued to capitalize on a strategic mix shift towards premium brands. Strong brand investment helped drive performance in the U.S. for Jim Beam, the world's #1 bourbon, and DeKuyper, the leading domestic line of cordials. Depletions - sales from distributors to retailers - climbed 3% for Jim Beam and 6% for DeKuyper. For Knob Creek small batch bourbon, high-margin super-premium spirits and Geyser Peak wines, depletions increased more than 20%. Adjusting for the impact of sales through the new Maxxium international joint venture, which are net of distribution expense and excise taxes, total spirits and wine sales increased 2%. o The golf brands drove increased sales and record contribution, even with intensified competition. Titleist, the #1 ball in golf, scored solid sales gains and maintained its leading market share. Advanced technology products, including the new Titleist HP series and Titleist Tour Prestige golf balls, helped propel the volume growth. On the worldwide professional tours this year, Titleist golf balls have recorded 48 victories, 12 times the nearest competitor. Strong sales of FootJoy golf shoes, improved profitability of Cobra golf clubs and dramatic progress in asset management boosted performance. o With increased sales and flat contribution, the office products business stabilized after disappointing 1999 results. Solid sell-through at office superstores, strong sales for newly acquired Boone presentation products and improved customer service levels contributed to the results. The company expects office products to further rebound during the year. * * * Fortune Brands, Inc. is a consumer products company with annual sales exceeding $5.5 billion. Its operating companies have premier brands and leading market positions in home products, office products, golf equipment and spirits and wine. Home brands include Moen faucets, Master locks and Aristokraft and Schrock cabinets sold by units of MasterBrand Industries. Office brands include Day-Timer, Swingline, Kensington and Wilson Jones sold by units of ACCO World Corporation. Acushnet Company's golf brands include Titleist, Cobra and FootJoy. Major spirits and wine brands sold by units of Jim Beam Brands Worldwide, Inc. include Jim Beam and Knob Creek bourbons, DeKuyper cordials, Whyte & Mackay Scotch and Geyser Peak and Canyon Road wines. Fortune Brands, headquartered in Lincolnshire, Illinois, is traded on the New York Stock Exchange under the ticker symbol FO and is included in the S&P 500 Index. To receive company news releases by e-mail, please visit www.fortunebrands.com. --------------------- * * * 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, changes in interest rates, competitive product and pricing pressures, trade consolidations, 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 and joint ventures, 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 March 31, 2000 1999 % Change Net Sales $ 1,363.8 $ 1,292.3 5.5 Cost of goods sold 725.5 677.7 7.1 Excise taxes on spirits and wine 80.3 96.7 (17.0) Advertising, selling, general and administrative expenses 389.0 364.3 6.8 Amortization of intangibles 19.9 27.3 (27.1) Restructuring and other nonrecurring charges 7.0 - - Interest and related expenses 31.9 25.3 26.1 Other (income) expense, net 0.8 0.9 (11.1) Income Before Taxes 109.4 100.1 9.3 Income taxes 45.1 44.0 2.5 Net Income $ 64.3 $ 56.1 14.6 Earnings Per Common Share Basic Income from operations $ 0.43 $ 0.33 30.3 Restructuring and other nonrecurring charges (0.03) - - Net income $ 0.40 $ 0.33 21.2 Diluted Income from operations $ 0.42 $ 0.32 31.3 Restructuring and other nonrecurring charges (0.03) - - Net income $ 0.39 $ 0.32 21.9 Avg. Common Shares Outstanding Basic 161.1 169.9 (5.2) Diluted 163.5 173.2 (5.6) Actual Common Shares Outstanding Basic 158.7 167.5 (5.3) Diluted 161.0 171.8 (6.3) FORTUNE BRANDS, INC. (In millions, except per share amounts) (Unaudited) SEGMENT DATA Three Months Ended March 31, 2000 1999 % Change Net Sales Home Products $503.8 $441.2 14.2 Office Products 326.3 315.2 3.5 Golf Products 261.1 250.1 4.4 Spirits and Wine** 272.6 285.8 (4.6)/ 2.5** Total** $1,363.8 $1,292.3 5.5 / 7.1** Operating Company Contribution* Home Products $ 74.8 $ 68.7 8.9 Office Products 15.5 15.5 - Golf Products 38.2 36.5 4.7 Spirits and Wine 54.0 50.1 7.8 Total $182.5 $170.8 6.9 * Operating company contribution (OCC) is net sales less all costs and expenses other than restructuring and other nonrecurring charges, amortization of intangibles, corporate administrative expense, interest and related expenses, other (income) expense, net and income taxes. ** With the transfer of certain distribution to the new Maxxium joint venture, product is now sold to the venture net of distribution costs and excise taxes. On a comparable basis to prior periods, net sales would be $20.3 million higher in the quarter. The adjusted sales percentage improvement for Spirits and Wine would be an increase to 2.5% in the quarter. For the consolidated Company, comparable net sales would have increased to 7.1%. INCOME FROM OPERATIONS BEFORE NET CHARGES The following sets forth income from operations before net charges, which represents income before the $7.0 million ($4.5 million after tax) restructuring and other nonrecurring charges taken in the three-month period ended March 31, 2000. Three Months Ended March 31, 2000 1999 % Change Income from Operations Before Net Charges $68.8 $56.1 22.6 Earnings Per Common Share Basic $0.43 $0.33 30.3 Diluted 0.42 0.32 31.3 RESTRUCTURING AND OTHER NONRECURRING CHARGES In connection with the Company's previously announced restructuring program, during the three months ended March 31, 2000, the Company recorded pre-tax restructuring and nonrecurring charges of $7.0 million. The charges by segment, as shown below, principally relate to the downsizing and relocation of the Corporate office, product discontinuations and manufacturing consolidation in the golf segment, rationalization of operations in the home segment and other workforce reduction initiatives across these segments. Three Months Ended March 31, 2000 (In millions, except per share amounts) Nonrecurring Cost of Sales Restructuring Charges SG&A Charges Total Home Products $ - $1.3 $0.2 1.5 Office Products 1.3 0.5 - 1.8 Golf Products 1.2 0.1 0.1 1.4 Spirits and Wine - - - - Corporate Office - - 2.3 2.3 Total $2.5 $1.9 $2.6 $7.0 Income Tax Benefit 2.5 Net Charge $4.5 Charge Per Common Share Basic $0.03 Diluted $0.03 FORTUNE BRANDS, INC. CONDENSED CONSOLIDATED BALANCE SHEET (In millions) March 31, December 31, 2000 1999 (Unaudited) Assets Current assets Cash and cash equivalents $95.1 $71.9 Accounts receivable, net 922.8 956.5 Inventories 1,099.1 1,061.4 Other current assets 237.3 223.0 --------- --------- Total current assets 2,354.3 2,312.8 Property, plant and equipment, net 1,169.4 1,176.5 Intangibles resulting from business acquisitions, net 2,565.0 2,592.1 Other assets 344.4 335.7 --------- --------- Total assets $6,433.1 $6,417.1 ========= ========= Liabilities and Stockholders' Equity Current liabilities Short-term debt $907.2 $637.3 Current portion of long-term debt 2.3 2.7 Other current liabilities 1,249.1 1,362.9 --------- --------- Total current liabilities 2,158.6 2,002.9 Long-term debt 1,163.6 1,204.8 Other long-term liabilities 472.2 471.2 --------- --------- Total liabilities 3,794.4 3,678.9 Stockholders' equity 2,638.7 2,738.2 --------- --------- Total liabilities and stockholders' equity $6,433.1 $6,417.1 ======== ======== -----END PRIVACY-ENHANCED MESSAGE-----