-----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, A0K2SyUnOsCWlMIWnr6nJ908Q8yXmY2t/+SX2mtRNS2FdELzG/VhlLEc2ZFhKklw mgNnWoNh1pfodsP/gmbEhw== 0000893838-99-000102.txt : 19990426 0000893838-99-000102.hdr.sgml : 19990426 ACCESSION NUMBER: 0000893838-99-000102 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990423 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19990423 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: 99599761 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 April 23, 1999 (April 23, 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.) 1700 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 April 23, 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 April 23, 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: April 23, 1999 EXHIBIT INDEX Sequentially Exhibit Numbered Page - ------- -------------- 20. Press release of Registrant dated April 23, 1999. EX-20 2 EXHIBIT 20 Exhibit 20 NEWS RELEASE NEWS RELEASE Fortune Brands, Inc., 1700 East Putnam Avenue, NEWS RELEASE Old Greenwich, CT 06870 Contact: Media Relations: Investor Relations: Clarkson Hine Anthony J. Diaz (203) 698-5148 (203) 698-5553 FORTUNE BRANDS REPORTS SOLID FIRST QUARTER RESULTS Diluted EPS Up 7%, On Track for Double-Digit Full Year Increase; Strong Performance for Home Products, Spirits & Wine, Titleist Brand Fuel Growth Old Greenwich, CT, April 23, 1999 - Fortune Brands, Inc. (NYSE-FO), the consumer products company, today announced solid 1999 first quarter earnings growth, backed by a 7% sales increase and record operating company contribution. Record performance for home products and spirits and wine, plus the strength of the Titleist and FootJoy golf brands, more than offset previously anticipated adverse comparisons in office products and the overall golf business. The results propelled the company to its 8th straight solid growth quarter since it began trading as Fortune Brands in June 1997. For the first quarter: - - Sales +7% to $1.29 billion - - Income from Operations +6% to $56 million - - Diluted E.P.S. +7% to 32 cents (+28% including 1998 extraordinary charge) - - Diluted cash earnings (excluding amortization) +7% to 47 cents "The solid earnings growth in the first quarter again demonstrated the strength of our broad brand portfolio," said Chairman and Chief Executive Officer Thomas C. Hays. "With substantial financial flexibility and the benefit of our recent acquisitions, Fortune Brands continues to be on track for another double-digit E.P.S. growth year in 1999. "We continue to aggressively seize opportunities to enhance shareholder value, and we're encouraged by the recent strong performance by our stock. We've substantially increased our share purchase authorization, and we've been aggressively capitalizing on favorable market conditions," Hays continued. In March, the company doubled its 1999 share repurchase authorization from 5 million to 10 million shares, in addition to its existing 1 million share systematic repurchase program. Year to date, the company has repurchased more than 4.5 million shares. "As previously indicated, we are also evaluating further cost reduction opportunities -- including a downsizing and move of the corporate office -- and we are examining our accounting practices with respect to goodwill. We expect decisions on these matters very soon," Hays added. First quarter highlights include: - Sales and contribution from home products increased sharply to records. Even excluding record performance by Schrock cabinets (acquired June 1998), sales and contribution were up double-digits, with robust demand from major customers. Moen -- the company's largest selling brand -Aristokraft cabinets and Waterloo tool storage all achieved record sales. - Sales and contribution from spirits and wine surged to record levels. Price increases and related trade purchases, along with solid underlying demand, helped fuel double-digit sales increases in the Americas and Asia-Pacific regions. Jim Beam, the world's #1 bourbon, had an excellent quarter, and DeKuyper strengthened its position as the #1 cordial brand in the U.S. The addition of Geyser Peak wines (acquired August 1998) contributed substantially to the increases. In March, the spirits and wine business reached agreement in principle with Remy-Cointreau and Highland Distillers to form a powerful new international sales and distribution joint venture. The joint venture is projected to begin operations in late summer, and the distribution cost savings alone are expected to add modestly to earnings in 1999 and more substantially in 2000. - Record sales for golf balls -- the biggest segment of the company's golf business -- for FootJoy golf shoes, and for Titleist clubs tempered the overall decline in golf sales and contribution. Continued strength of the premium-priced Titleist Professional, plus strong initial orders for the Titleist Tour Prestige and the Cobra Dista golf balls, helped drive the solid growth in golf ball sales. Continued demand for Titleist Titanium drivers and strong response for new irons and fairway woods contributed to the increase in Titleist club sales. Titleist is also delivering record results on the PGA Tour, where the #1 ball in golf won the year's first 15 tournaments. As previously forecast, the timing of new product introductions and discounting on older models led to a significant decline in sales of Cobra clubs, which were up 23% in the year-ago quarter. Newly introduced Cobra Gravity Back irons began shipping late in the quarter, and drivers started shipping in April. - Sell-through of office products from retailers and distributors to customers remains positive. As anticipated, reported results were adversely affected by inventory reductions by major customers, a difficult pricing environment associated with major mid-1998 trade consolidations, and transitional costs related to major cost saving initiatives. The company continues to expect improved performance from office products in the second half of 1999, with modest contribution growth targeted for the full year. * * * 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 spirits and wine. 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 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. * * * 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 spirits and wine, 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 March 31, 1999 1998 % Change Net Sales $1,292.3 $1,203.5 7.4 Cost of goods sold 677.7 618.7 9.5 Excise taxes on spirits and wine 96.7 87.1 11.0 Advertising, selling, general and administrative expenses 364.3 346.5 5.1 Amortization of intangibles 27.3 26.3 3.8 Interest expense 25.3 25.1 0.8 Other (income) expense, net 0.9 2.1 (57.1) Income Before Taxes 100.1 97.7 2.5 Income taxes 44.0 44.7 (1.6) Income From Operations 56.1 53.0 5.8 Extraordinary items * - (8.4) - Net Income $56.1 $44.6 25.8 Earnings Per Common Share Basic Income from operations $0.33 $0.31 6.5 Extraordinary items * - (0.05) - Net income $0.33 $0.26 26.9 Diluted Income from operations $0.32 $0.30 6.7 Extraordinary items * - (0.05) - Net income $0.32 $0.25 28.0 Avg. Common Shares Outstanding Basic 169.9 172.3 (1.4) Diluted 173.2 177.1 (2.2) Actual Common Shares Outstanding Basic 167.5 173.0 (3.2) Diluted 171.8 177.2 (3.0) * Extraordinary items amounts represent charges for the early extinguishment of debt. FORTUNE BRANDS, INC. (In millions) (Unaudited) Three Months Ended March 31, 1999 1998 % Change SEGMENT DATA NET SALES Home Products $441.2 $342.4 28.9 Office Products 315.2 321.8 (2.1) Home and Office Products 756.4 664.2 13.9 Golf Products 250.1 277.0 (9.7) Spirits and Wine 285.8 262.3 9.0 Total $1,292.3 $1,203.5 7.4 OPERATING COMPANY CONTRIBUTION* Home Products $68.7 $55.2 24.5 Office Products 15.5 28.2 (45.0) Home and Office Products 84.2 83.4 1.0 Golf Products 36.5 41.7 (12.5) Spirits and Wine 50.1 43.0 16.5 Total $170.8 $168.1 1.6 * 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 expense, other (income) expense, net and income taxes. FORTUNE BRANDS, INC. CONDENSED CONSOLIDATED BALANCE SHEET (In millions) March 31, December 31, 1999 1998 (Unaudited) Assets Current assets Cash and cash equivalents $43.6 $40.3 Accounts receivable, net 930.0 919.9 Inventories 1,085.9 1,087.6 Other current assets 247.3 217.5 --------- --------- Total current assets 2,306.8 2,265.3 Property, plant and equipment, net 1,103.8 1,119.9 Intangibles resulting from business acquisitions, net 3,700.4 3,761.3 Other assets 218.5 213.2 --------- --------- Total assets $7,329.5 $7,359.7 ========= ========= Liabilities and Stockholders' Equity Current liabilities Short-term debt $506.4 $321.4 Current portion of long-term debt 182.8 183.3 Other current liabilities 1,243.0 1,339.9 --------- --------- Total current liabilities 1,932.2 1,844.6 Long-term debt 974.4 981.7 Other long-term liabilities 436.4 435.9 --------- --------- Total liabilities 3,343.0 3,262.2 Stockholders' equity 3,986.5 4,097.5 --------- --------- Total liabilities and stockholders' equity $7,329.5 $7,359.7 ========= ========= -----END PRIVACY-ENHANCED MESSAGE-----