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    Fortune Brands Delivers Solid Sales and Strong Margin Results in the Second Quarter; Updates Full Year Guidance

    7/25/24 4:05:00 PM ET
    $FBIN
    Forest Products
    Basic Materials
    Get the next $FBIN alert in real time by email

    Highlights:

    • Q2 2024 sales were $1.2 billion, an increase of 7 percent versus Q2 2023. Organic sales were $1.1 billion, a decrease of 3 percent versus Q2 2023
    • Q2 2024 earnings per share (EPS) were $1.06, an increase of 33 percent versus a year ago; EPS before charges / gains were $1.16, an increase of 8 percent versus Q2 2023
    • Company announced a number of key milestones in its digital products strategy
    • Company updates full-year 2024 guidance, reflecting a revised macro-economic outlook and strength in key businesses while maintaining prior mid-point of EPS before charges / gains range

    Fortune Brands Innovations, Inc. (NYSE:FBIN), an industry-leading innovation company focused on creating smarter, safer and more beautiful homes and improving lives, today announced second quarter 2024 results.

    "Our teams continued to execute at a high level in a dynamic market. We delivered solid second quarter sales as our core U.S. products outperformed the market and we saw acceleration in our digital products," said Fortune Brands Chief Executive Officer Nicholas Fink. "We also delivered strong operating margins, which are a tangible result of our organizational realignment and the other transformational actions we have taken over the past few years."

    Fink continued, "Finally, we announced several significant accelerants to our digital strategy, including with major insurance providers, municipalities and technology partners. I am proud of the continued investments and progress we have made, particularly in an uneven and dynamic external environment."

    Second Quarter 2024 Results

    ($ in millions, except per share amounts)

    Unaudited

    Total Company Results

     

    Reported Net Sales

    Operating Income

    Operating Margin

    EPS

    Q2 2024 GAAP

    $1,240

    $199.1

    16.1%

    $1.06

    Change

    7%

    30%

    300 bps

    33%

     

    Reported Net Sales

    Operating Income Before Charges / Gains

    Operating Margin

    Before Charges / Gains

    EPS

    Before Charges / Gains

    Q2 2024 Non-GAAP

    $1,240

    $215.9

    17.4%

    $1.16

    Change

    7%

    9%

    40 bps

    8%

    Segment Results

     

    Net Sales

    Change

    Operating Margin

    Change

    Operating Margin Before Charges/Gains

    Change

     

    Reported

    Organic

    Reported

    Organic

     

    Water Innovations

    $660

    $586

    7%

    (5%)

    22.9%

    (10) bps

    23.3%

    10 bps

    Outdoors

    $389

    $389

    4%

    4%

    13.3%

    (300) bps

    16.3%

    (10) bps

    Security

    $191

    $159

    12%

    (7)%

    18.0%

    1,820 bps

    18.9%

    330 bps

    Balance Sheet and Cash Flow

    The Company exited the quarter with a strong balance sheet, and generated $262 million of operating cash flow and $223 million of free cash flow in the quarter. In accordance with its opportunistic, returns-based share repurchase program, the Company repurchased $55 million of shares in the quarter, and as of July 25, 2024, has repurchased $190 million of shares year to date.

    As of the end of the second quarter 2024:

    Net debt

    $2.5 billion

    Net debt to EBITDA before charges / gains

    2.6x

    Cash

    $353 million

    Amount available under revolving credit facility

    $1,020 million

    Updated 2024 Market and Financial Guidance

    "Amidst a dynamic market, we are now updating our full-year guidance to reflect our expectations for continued out-performance driven by our core businesses, with particular strength in our Outdoors segment and our Moen North America business, and our accelerating digital sales, which are offset by weaker China sales. Importantly, we are narrowing the range around our prior EPS before charges / gains mid-point due to expected growth in our core and digital businesses and strong margin performance," said Fortune Brands Chief Financial Officer David Barry. "As we position Fortune Brands for long-term shareholder value creation, we will continue to prioritize above-market sales growth opportunities, margin expansion and cash generation, while continuing to effectively manage costs and invest in a strategic set of key priorities."

    Updated 2024 Full-Year Guidance

    Initial 2024 Full-Year Guidance

    Updated 2024 Full-Year Guidance

    MARKET

    Global market

    -3% to flat

    -3% to -1%

    U.S. market

    -2% to flat

    -1% to flat

    U.S. R&R

    -4% to -2%

    -4% to -3%

    U.S. SFNC

    5% to 7%

    8% to 10%

    China market

    -9% to -7%

    -20% to -15%

    TOTAL COMPANY FINANCIAL METRICS

    Net sales

    3.5% to 5.5%

    2.5% to 4.5%

    Net sales [organic]

    -1% to 1%

    -2% to flat

    Operating margin before charges / gains

    16.5% to 17.5%

    17.0% to 17.5%

    EPS before charges / gains

    $4.20 to $4.40

    $4.25 to $4.35

    Cash flow from operations

    Around $720 million

    Around $700 million

    Free cash flow

    Around $520 million

    Around $500 million

    Cash conversion

    Around 100%

    Around 100%

    SEGMENT FINANCIAL METRICS

    Water Innovations net sales

    3% to 5%

    2.5% to 4.5%

    Water Innovations net sales [organic]

    -2% to flat

    -4% to -2%

    Water Innovations operating margin before charges / gains

    24% to 24.5%

    Around 24%

    Outdoors net sales

    1% to 3%

    2% to 4%

    Outdoors operating margin before charges / gains

    13.5% to 14.5%

    14.5% to 15.5%

    Security net sales

    10% to 12%

    5% to 7%

    Security net sales [organic]

    Flat to 2%

    -3% to -1%

    Security operating margin before charges / gains

    15.5% to 16.5%

    15.5% to 16.5%

    OTHER ITEMS

    Corporate expense

    $140 million to $145 million

    $143 million to $148 million

    Interest expense

    $118 million to $120 million

    $122 million to $124 million

    Other income / (expense)

    Around $5 million

    Around $5 million

    Tax rate

    23.25% to 23.5%

    23.25% to 23.5%

    Share count

    Around 127 million

    Around 126 million

    For certain forward-looking non-GAAP measures (as used in this press release, operating margin before charges / gains on a full Company and segment basis, EPS before charges / gains and cash conversion), the Company is unable to provide a reconciliation to the most comparable GAAP financial measure because the information needed to reconcile these measures is unavailable due to the inherent difficulty of forecasting the timing and / or amount of various items that have not yet occurred, including the high variability and low visibility with respect to gains and losses associated with our defined benefit plans, which are excluded from EPS before charges / gains and cash conversion, and restructuring and other charges, which are excluded from operating margin before charges / gains, EPS before charges / gains and cash conversion. Additionally, estimating such GAAP measures and providing a meaningful reconciliation consistent with the Company's accounting policies for future periods requires a level of precision that is unavailable for these future periods and cannot be accomplished without unreasonable effort. Forward-looking non-GAAP measures are estimated consistent with the relevant definitions and assumptions.

    Conference Call Details

    Today at 5:00 p.m. ET, Fortune Brands will host an investor conference call to discuss results. A live internet audio webcast of the conference call will be available on the Fortune Brands website at ir.fbin.com/upcoming-events. It is recommended that listeners log on at least 10 minutes prior to the start of the call. A recorded replay of the call will be made available on the Company's website shortly after the call has ended.

    About Fortune Brands Innovations

    Fortune Brands Innovations, Inc. (NYSE:FBIN), headquartered in Deerfield, Ill., is a brand, innovation and channel leader focused on exciting, supercharged categories in the home products, security and commercial building markets. The Company's growing portfolio of brands includes Moen, Flo, House of Rohl, Aqualisa, Emtek, Therma-Tru, Larson, Fiberon, Master Lock, SentrySafe, Yale residential and August. To learn more about FBIN, its brands and environmental, social and governance (ESG) commitments, visit www.FBIN.com.

    CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

    This press release contains forward-looking statements that are made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include all statements that are not historical statements of fact and those regarding our intent, belief or expectations for our business, operations, financial performance or financial condition in addition to statements regarding our expectations for the markets in which we operate, general business strategies, the market potential of our brands, trends in the housing market, the potential impact of costs, including material and labor costs, the potential impact of inflation, expected capital spending, expected pension contributions, the expected impact of acquisitions, dispositions and other strategic transactions, the anticipated impact of recently issued accounting standards on our financial statements, and other matters that are not historical in nature. Statements preceded by, followed by or that otherwise include the words "believes," "expects," "anticipates," "intends," "projects," "estimates," "plans," "outlook," "positioned," "confident," "opportunity" and similar expressions or future or conditional verbs such as "will," "should," "would," "may," and "could" are generally forward-looking in nature and not historical facts. Where, in any forward-looking statement, we express an expectation or belief as to future results or events, such expectation or belief is based on current expectations, estimates, assumptions and projections of our management about our industry, business and future financial results, available at the time this press release is issued. Although we believe that these statements are based on reasonable assumptions, they are subject to numerous factors, risks and uncertainties that could cause actual outcomes and results to be materially different from those indicated in such statements, including but not limited to: (i) our reliance on the North American and Chinese home improvement, repair and remodel and new home construction activity levels, (ii) the housing market, downward changes in the general economy, unfavorable interest rates or other business conditions, (iii) the competitive nature of consumer and trade brand businesses, (iv) our ability to execute on our strategic plans and the effectiveness of our strategies in the face of business competition, (v) our reliance on key customers and suppliers, including wholesale distributors and dealers and retailers, (vi) risks relating to rapidly evolving technological change, (vii) risks associated with our ability to improve organizational productivity and global supply chain efficiency and flexibility, (viii) risks associated with global commodity and energy availability and price volatility, as well as the possibility of sustained inflation, (ix) delays or outages in our information technology systems or computer networks or breaches of our information technology systems or other cybersecurity incidents, (x) risks associated with doing business globally, including changes in trade-related tariffs and risks with uncertain trade environments, (xi) risks associated with the disruption of operations, (xii) our inability to obtain raw materials and finished goods in a timely and cost-effective manner, (xiii) risks associated with strategic acquisitions, divestitures and joint ventures, including difficulties integrating acquired companies and the inability to achieve the expected financial results and benefits of transactions, (xiv) impairments in the carrying value of goodwill or other acquired intangible assets, (xv) risks of increases in our defined benefit-related costs and funding requirements, (xvi) our ability to attract and retain qualified personnel and other labor constraints, (xvii) the effect of climate change and the impact of related changes in government regulations and consumer preferences, (xviii) risks associated with environmental, social and governance matters, (xix) potential liabilities and costs from claims and litigation, (xx) changes in government and industry regulatory standards, (xxi) future tax law changes or the interpretation of existing tax laws, (xxii) our ability to secure and protect our intellectual property rights, and (xxiii) the impact of COVID-19 on the business. These and other factors are discussed in Part I, Item 1A "Risk Factors" of our Annual Report on Form 10-K for the year ended December 30, 2023. We undertake no obligation to, and expressly disclaim any such obligation to, update or clarify any forward-looking statements to reflect changed assumptions, the occurrence of anticipated or unanticipated events, new information or changes to future results over time or otherwise, except as required by law.

    Use of Non-GAAP Financial Information

    This press release includes measures not derived in accordance with generally accepted accounting principles ("GAAP"), such as diluted earnings per share before charges / gains, operating income before charges / gains, operating margin before charges / gains, net debt, net debt to EBITDA before charges / gains, sales excluding the impact of acquisitions (organic sales), free cash flow and cash conversion. These non-GAAP measures should not be considered in isolation or as a substitute for any measure derived in accordance with GAAP and may also be inconsistent with similar measures presented by other companies. Reconciliations of these measures to the applicable most closely comparable GAAP measures, and reasons for the Company's use of these measures, are presented in the attached pages.

     

    FORTUNE BRANDS INNOVATIONS, INC.

    (In millions)

    (Unaudited)

     

     

    Thirteen Weeks Ended

    Thirteen Weeks Ended

     

     

     

     

    Twenty-Six Weeks Ended

    Twenty-Six Weeks Ended

     

     

    Net sales (GAAP)

    June 29, 2024

    July 1, 2023

    $

    Change

    %

    Change

     

     

    June 29, 2024

    July 1, 2023

    $

    Change

    %

    Change

    Water

    $

    659.6

     

    $

    617.1

     

    $

    42.5

     

    7

     

    $

    1,284.9

     

    $

    1,211.3

     

    $

    73.6

     

    6

     

    Outdoors

     

    389.4

     

     

    375.6

     

     

    13.8

     

    4

     

     

    704.4

     

     

    665.5

     

     

    38.9

     

    6

     

    Security

     

    191.0

     

     

    171.0

     

     

    20.0

     

    12

     

     

    360.2

     

     

    326.9

     

     

    33.3

     

    10

     

    Total net sales

    $

    1,240.0

     

    $

    1,163.7

     

    $

    76.3

     

    7

     

    $

    2,349.5

     

    $

    2,203.7

     

    $

    145.8

     

    7

     

     
     

    RECONCILIATIONS OF GAAP OPERATING INCOME TO OPERATING INCOME BEFORE CHARGES/GAINS

    (In millions)

    (Unaudited)

     

    Thirteen Weeks Ended

    Thirteen Weeks Ended

     

     

    Twenty-Six Weeks Ended

    Twenty-Six Weeks Ended

     

     

    June 29, 2024

    July 1, 2023

    $

    Change

    %

    Change

    June 29, 2024

    July 1, 2023

    $

    Change

    %

    Change

    WATER

     

     

     

     

     

     

    Operating income (GAAP)

    $

    150.9

     

    $

    142.1

     

    $

    8.8

     

    6

     

    $

    292.2

     

    $

    270.5

     

    $

    21.7

     

    8

     

    Restructuring charges

     

    1.1

     

     

    1.1

     

     

    -

     

    -

     

     

    1.6

     

     

    1.3

     

     

    0.3

     

    23

     

    Other charges/(gains)

     

     

     

     

     

     

     

     

    Cost of products sold

     

    1.4

     

     

    -

     

     

    1.4

     

    100

     

     

    1.1

     

     

    0.1

     

     

    1.0

     

    1,000

     

    Operating income before charges/gains (a)

    $

    153.4

     

    $

    143.2

     

    $

    10.2

     

    7

     

    $

    294.9

     

    $

    271.9

     

    $

    23.0

     

    8

     

     

     

     

     

     

     

     

     

     

    OUTDOORS

     

     

     

     

     

     

     

     

    Operating income (GAAP)

    $

    51.8

     

    $

    61.2

     

    $

    (9.4

    )

    (15

    )

    $

    86.0

     

    $

    74.2

     

    $

    11.8

     

    16

     

    Restructuring charges

     

    2.1

     

     

    1.5

     

     

    0.6

     

    40

     

     

    2.5

     

     

    3.0

     

     

    (0.5

    )

    (17

    )

    Other charges/(gains)

     

     

     

     

     

     

     

     

    Cost of products sold

     

    9.4

     

     

    (1.7

    )

     

    11.1

     

    (653

    )

     

    12.4

     

     

    (1.7

    )

     

    14.1

     

    (829

    )

    Selling, general and administrative expenses

     

    -

     

     

    -

     

     

    -

     

    -

     

     

    0.2

     

     

    -

     

     

    0.2

     

    100

     

    Solar compensation (e)

     

    -

     

     

    0.6

     

     

    (0.6

    )

    (100

    )

     

    -

     

     

    1.3

     

     

    (1.3

    )

    (100

    )

    Operating income before charges/gains (a)

     

    63.3

     

     

    61.6

     

    $

    1.7

     

    3

     

     

    101.1

     

     

    76.8

     

    $

    24.3

     

    32

     

     

     

     

     

     

     

     

     

     

    SECURITY

     

     

     

     

     

     

     

     

    Operating income (GAAP)

    $

    34.4

     

    $

    (0.4

    )

    $

    34.8

     

    (8,700

    )

    $

    53.5

     

    $

    20.8

     

    $

    32.7

     

    157

     

    Restructuring charges

     

    0.6

     

     

    19.6

     

     

    (19.0

    )

    (97

    )

     

    2.2

     

     

    20.2

     

     

    (18.0

    )

    (89

    )

    Other charges/(gains)

     

     

     

     

     

     

     

     

    Cost of products sold

     

    1.2

     

     

    7.4

     

     

    (6.2

    )

    (84

    )

     

    7.2

     

     

    7.5

     

     

    (0.3

    )

    (4

    )

    Operating income before charges/gains (a)

    $

    36.2

     

    $

    26.6

     

    $

    9.6

     

    36

     

    $

    62.9

     

    $

    48.5

     

    $

    14.4

     

    30

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    CORPORATE

     

     

     

     

     

     

     

     

    Corporate expense (GAAP)

    $

    (38.0

    )

    $

    (50.3

    )

    $

    12.3

     

    (24

    )

    $

    (77.2

    )

    $

    (81.1

    )

    $

    3.9

     

    (5

    )

    Restructuring charges

     

    0.1

     

     

    -

     

     

    0.1

     

    100

     

     

    0.4

     

     

    0.7

     

     

    (0.3

    )

    (43

    )

    Other charges/(gains)

     

     

     

     

     

     

     

     

    Selling, general and administrative expenses

     

    0.9

     

     

    0.3

     

     

    0.6

     

    200

     

     

    1.1

     

     

    0.3

     

     

    0.8

     

    267

     

    ASSA transaction expenses (d)

     

    -

     

     

    16.4

     

     

    (16.4

    )

    (100

    )

     

    -

     

     

    17.4

     

     

    (17.4

    )

    (100

    )

    General and administrative expenses before charges/gains (a)

    $

    (37.0

    )

    $

    (33.6

    )

    $

    (3.4

    )

    10

     

    $

    (75.7

    )

    $

    (62.7

    )

    $

    (13.0

    )

    21

     

     

     

     

     

     

     

     

     

     

    TOTAL COMPANY

     

     

     

     

     

     

     

     

    Operating income (GAAP)

    $

    199.1

     

    $

    152.6

     

    $

    46.5

     

    30

     

    $

    354.5

     

    $

    284.4

     

    $

    70.1

     

    25

     

    Restructuring charges

     

    3.9

     

     

    22.2

     

     

    (18.3

    )

    (82

    )

     

    6.7

     

     

    25.2

     

     

    (18.5

    )

    (73

    )

    Other charges/(gains)

     

     

     

     

     

     

     

     

    Cost of products sold

     

    12.0

     

     

    5.7

     

     

    6.3

     

    111

     

     

    20.7

     

     

    5.9

     

     

    14.8

     

    251

     

    Selling, general and administrative expenses

     

    0.9

     

     

    0.3

     

     

    0.6

     

    200

     

     

    1.3

     

     

    0.3

     

     

    1.0

     

    333

     

    ASSA transaction expenses (d)

     

    -

     

     

    16.4

     

     

    (16.4

    )

    (100

    )

     

    -

     

     

    17.4

     

     

    (17.4

    )

    (100

    )

    Solar compensation (e)

     

    -

     

     

    0.6

     

     

    (0.6

    )

    (100

    )

     

    -

     

     

    1.3

     

     

    (1.3

    )

    (100

    )

    Operating income before charges/gains (a)

    $

    215.9

     

    $

    197.8

     

    $

    18.1

     

    9

     

    $

    383.2

     

    $

    334.5

     

    $

    48.7

     

    15

     

     

    The Yale/August and Emtek/Schaub acquisition net sales, operating income and cash flows from the date of acquisition to July 1, 2023 were not material to the Company.

    (a) (d) (e) For definitions of Non-GAAP measures, see Definitions of Terms page

     

    FORTUNE BRANDS INNOVATIONS, INC.

    CONDENSED CONSOLIDATED BALANCE SHEETS (GAAP)

    (In millions)

    (Unaudited)

     

     

     

     

     

     

     

    June 29,

    2024

     

    December 30,

    2023

     

     

     

     

     

     

    Assets

     

     

     

     

     

    Current assets

     

     

     

     

     

    Cash and cash equivalents

    $

    352.6

     

     

    $

    366.4

     

    Accounts receivable, net

     

    593.6

     

     

     

    534.2

     

    Inventories

     

    990.5

     

     

     

    982.3

     

    Other current assets

     

    145.2

     

     

     

    162.8

     

    Total current assets

     

    2,081.9

     

     

     

    2,045.7

     

     

     

     

     

     

     

    Property, plant and equipment, net

     

    976.6

     

     

     

    975.0

     

    Goodwill

     

    1,994.8

     

     

     

    1,906.8

     

    Other intangible assets, net of accumulated amortization

     

    1,336.2

     

     

     

    1,354.7

     

    Other assets

     

    284.4

     

     

     

    282.8

     

    Total assets

    $

    6,673.9

     

     

    $

    6,565.0

     

     

     

     

     

     

     

     

     

     

     

     

     

    Liabilities and equity

     

     

     

     

     

    Current liabilities

     

     

     

     

     

    Short-term debt

    $

    499.3

     

     

    $

    -

     

    Accounts payable

     

    554.4

     

     

     

    568.1

     

    Other current liabilities

     

    494.3

     

     

     

    632.3

     

    Total current liabilities

     

    1,548.0

     

     

     

    1,200.4

     

     

     

     

     

     

     

    Long-term debt

     

    2,401.7

     

     

     

    2,670.1

     

    Deferred income taxes

     

    120.6

     

     

     

    111.3

     

    Other non-current liabilities

     

    273.0

     

     

     

    289.8

     

    Total liabilities

     

    4,343.3

     

     

     

    4,271.6

     

     

     

     

     

     

     

    Stockholders' equity

     

    2,330.6

     

     

     

    2,293.4

     

    Total equity

     

    2,330.6

     

     

     

    2,293.4

     

    Total liabilities and equity

    $

    6,673.9

     

     

    $

    6,565.0

     

     
     

    FORTUNE BRANDS INNOVATIONS, INC.

    CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

    (In millions)

    (Unaudited)

     

     

    Twenty-Six Weeks Ended

    Twenty-Six Weeks Ended

     

    June 29, 2024

    July 1, 2023

    Operating activities

     

     

     

     

    Net income

    $

    230.2

     

    $

    186.7

     

    Depreciation and amortization

     

    101.5

     

     

    66.1

     

    Non-cash lease expense

     

    19.3

     

     

    15.8

     

    Deferred taxes

     

    11.8

     

     

    (1.0

    )

    Other non-cash items

     

    19.7

     

     

    16.7

     

    Changes in assets and liabilities, net

     

    (192.3

    )

     

    219.3

     

    Net cash provided by operating activities

    $

    190.2

     

    $

    503.6

     

     

     

     

     

     

    Investing activities

     

     

     

     

    Capital expenditures

    $

    (103.4

    )

    $

    (112.2

    )

    Proceeds from the disposition of assets

     

    5.7

     

     

    2.7

     

    Cost of acquisitions, net of cash acquired

     

    (129.0

    )

     

    (781.8

    )

    Other investing activities, net

     

    (3.5

    )

     

    -

     

    Net cash used in investing activities

    $

    (230.2

    )

    $

    (891.3

    )

     

     

     

     

     

    Financing activities

     

     

     

     

    Increase in debt, net

    $

    230.0

     

    $

    595.1

     

    Proceeds from the exercise of stock options

     

    7.1

     

     

    5.0

     

    Treasury stock purchases

     

    (150.2

    )

     

    (100.0

    )

    Dividends to stockholders

     

    (60.2

    )

     

    (58.6

    )

    Other items, net

     

    (17.0

    )

     

    (13.7

    )

    Net cash provided by financing activities

    $

    9.7

     

    $

    427.8

     

     

     

     

     

     

    Effect of foreign exchange rate changes on cash

    $

    (7.7

    )

    $

    (2.1

    )

     

     

     

     

     

    Net increase (decrease) in cash and cash equivalents

    $

    (38.0

    )

    $

    38.0

     

    Cash, cash equivalents and restricted cash* at beginning of period

     

    395.5

     

     

    648.3

     

    Cash, cash equivalents and restricted cash* at end of period

    $

    357.5

     

    $

    686.3

     

     
     

    FREE CASH FLOW

    Twenty-Six Weeks

    Ended

    Twenty-Six

    Weeks Ended

    2024 Full Year

     

    June 29, 2024

    July 1, 2023

    Estimate

     

     

     

     

     

     

     

    Cash flow from operations (GAAP)

    $

    190.2

     

    $

    503.6

     

    $

    700.0

     

    Less:

     

     

     

     

     

     

    Capital expenditures

    $

    103.4

     

    $

    112.2

     

    $

    200.0

     

    Free cash flow**

    $

    86.8

     

    $

    391.4

     

    $

    500.0

     

     

    *Restricted cash of $2.5 million and $2.4 million is included in Other current assets and Other assets, respectively, as of June 29, 2024. Restricted cash of $2.3 million and $2.3 million is included in Other current assets and Other assets, respectively, as of July 1, 2023.

     

    ** Free cash flow is cash flow from operations calculated in accordance with U.S. generally accepted accounting principles ("GAAP") less capital expenditures. Free cash flow does not include adjustments for certain non-discretionary cash flows such as mandatory debt repayments. Free cash flow is a measure not derived in accordance with GAAP. Management believes that free cash flow provides investors with helpful supplemental information about the Company's ability to fund internal growth, make acquisitions, repay debt and related interest, pay dividends and repurchase common stock. This measure may be inconsistent with similar measures presented by other companies.

     
     

    FORTUNE BRANDS INNOVATIONS, INC.

    CASH FLOW FROM OPERATIONS (GAAP) TO FREE CASH FLOW

    (In millions)

    (Unaudited)

     

     

     

     

     

     

    Thirteen Weeks Ended

     

     

     

    June 29, 2024

     

     

     

     

     

     

     

     

     

    Cash flow from operations (GAAP)

     

    $

    261.5

     

    Less:

     

     

     

    Capital expenditures

     

     

    38.8

     

    Free cash flow*

     

    $

    222.7

     

     

     

     

     

    * Free cash flow is cash flow from operations calculated in accordance with U.S. generally accepted accounting principles ("GAAP") less capital expenditures. Free cash flow does not include adjustments for certain non-discretionary cash flows such as mandatory debt repayments. Free cash flow is a measure not derived in accordance with GAAP. Management believes that free cash flow provides investors with helpful supplemental information about the Company's ability to fund internal growth, make acquisitions, repay debt and related interest, pay dividends and repurchase common stock. This measure may be inconsistent with similar measures presented by other companies.

     
     

    FORTUNE BRANDS INNOVATIONS, INC.

    CONDENSED CONSOLIDATED STATEMENTS OF INCOME (GAAP)

    (In millions, except per share amounts)

    (Unaudited)

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Thirteen Weeks Ended

    Thirteen Weeks Ended

     

     

    Twenty-Six Weeks Ended

    Twenty-Six Weeks Ended

     

     

    June 29, 2024

    July 1, 2023

    %

    Change

     

    June 29, 2024

    July 1, 2023

    %

    Change

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Net sales

    $

    1,240.0

     

    $

    1,163.7

     

     

    7

     

     

    $

    2,349.5

     

    $

    2,203.7

     

     

    7

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Cost of products sold

     

    699.0

     

     

    695.6

     

     

    -

     

     

     

    1,320.9

     

     

    1,327.2

     

     

    -

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Selling, general

     

     

     

     

     

     

     

     

     

     

     

     

     

    and administrative expenses

     

    319.7

     

     

    280.7

     

     

    14

     

     

     

    631.3

     

     

    541.7

     

     

    17

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Amortization of intangible assets

     

    18.3

     

     

    12.6

     

     

    45

     

     

     

    36.1

     

     

    25.2

     

     

    43

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Restructuring charges

     

    3.9

     

     

    22.2

     

     

    (82

    )

     

     

    6.7

     

     

    25.2

     

     

    (73

    )

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Operating income

     

    199.1

     

     

    152.6

     

     

    30

     

     

     

    354.5

     

     

    284.4

     

     

    25

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Interest expense

     

    32.3

     

     

    27.7

     

     

    17

     

     

     

    62.4

     

     

    54.6

     

     

    14

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Other (income)/expense, net

     

    (3.7

    )

     

    (5.2

    )

     

    (29

    )

     

     

    (3.6

    )

     

    (11.6

    )

     

    (69

    )

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Income from continuing operations before income taxes

     

    170.5

     

     

    130.1

     

     

    31

     

     

     

    295.7

     

     

    241.4

     

     

    22

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Income tax

     

    36.6

     

     

    28.0

     

     

    31

     

     

     

    65.5

     

     

    53.7

     

     

    22

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Income from continuing operations, net of tax

    $

    133.9

     

    $

    102.1

     

     

    31

     

     

    $

    230.2

     

    $

    187.7

     

     

    23

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    (Loss) income from discontinued operations, net of tax

     

    -

     

     

    -

     

     

    -

     

     

     

    -

     

     

    (1.0

    )

     

    (100

    )

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Net income

    $

    133.9

     

    $

    102.1

     

     

    31

     

     

    $

    230.2

     

    $

    186.7

     

     

    23

     

    Net income attributable to Fortune Brands

    $

    133.9

     

    $

    102.1

     

     

    31

     

     

    $

    230.2

     

    $

    186.7

     

     

    23

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Diluted earnings per common share

     

     

     

     

     

     

     

     

     

     

     

     

     

    Continuing operations

    $

    1.06

     

    $

    0.80

     

     

    33

     

     

    $

    1.82

     

    $

    1.47

     

     

    24

     

    Discontinued operations

    $

    -

     

    $

    -

     

     

    -

     

     

    $

    -

     

    $

    (0.01

    )

     

    (100

    )

    Diluted EPS attributable to Fortune Brands

    $

    1.06

     

    $

    0.80

     

     

    33

     

     

    $

    1.82

     

    $

    1.46

     

     

    24

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Diluted average number of shares outstanding

     

    125.8

     

     

    127.5

     

     

    (1

    )

     

     

    126.4

     

     

    128.0

     

     

    (1

    )

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    FORTUNE BRANDS INNOVATIONS, INC.

    (In millions)

    (Unaudited)

     

    RECONCILIATIONS OF INCOME FROM CONTINUING OPERATIONS, NET OF TAX TO EBITDA BEFORE CHARGES/GAINS

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Thirteen Weeks Ended

    Thirteen Weeks Ended

     

     

    Twenty-Six Weeks Ended

    Twenty-Six Weeks Ended

     

     

     

    June 29, 2024

    July 1, 2023

    % Change

     

    June 29, 2024

    July 1, 2023

    % Change

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Income from continuing operations, net of tax

    $

    133.9

     

    $

    102.1

     

     

    31

     

     

    $

    230.2

     

    $

    187.7

     

     

    23

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Depreciation *

    $

    26.2

     

    $

    19.5

     

     

    34

     

     

    $

    46.9

     

    $

    38.7

     

     

    21

     

    Amortization of intangible assets

     

    18.3

     

     

    12.6

     

     

    45

     

     

     

    36.1

     

     

    25.2

     

     

    43

     

    Restructuring charges

     

    3.9

     

     

    22.2

     

     

    (82

    )

     

     

    6.7

     

     

    25.2

     

     

    (73

    )

    Other charges/(gains)

     

    12.9

     

     

    6.0

     

     

    115

     

     

     

    22.0

     

     

    6.2

     

     

    255

     

    ASSA transaction expenses (d)

     

    -

     

     

    16.4

     

     

    (100

    )

     

     

    -

     

     

    17.4

     

     

    (100

    )

    Solar compensation (e)

     

    -

     

     

    0.6

     

     

    (100

    )

     

     

    -

     

     

    1.3

     

     

    (100

    )

    Interest expense

     

    32.3

     

     

    27.7

     

     

    17

     

     

     

    62.4

     

     

    54.6

     

     

    14

     

    Income taxes

     

    36.6

     

     

    28.0

     

     

    31

     

     

     

    65.5

     

     

    53.7

     

     

    22

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    EBITDA before charges/gains (c)

    $

    264.1

     

    $

    235.1

     

     

    12

     

     

    $

    469.8

     

    $

    410.0

     

     

    15

     

     

    * Depreciation excludes accelerated depreciation expense of $10.9 million for the thirteen weeks ended June 29, 2024, and $18.5 million for the twenty-six weeks ended June 29, 2024 and excludes accelerated depreciation expense of $2.1 million for the thirteen weeks ended July 1, 2023, and $2.2 million for the twenty-six weeks ended July 1, 2023. Accelerated depreciation is included in other charges/gains.

     

    CALCULATION OF NET DEBT-TO-EBITDA BEFORE CHARGES/GAINS RATIO

     

    As of June 29, 2024

     

     

     

     

    Short-term debt **

     

     

    $

    499.3

     

    Long-term debt **

     

     

     

    2,401.7

     

    Total debt

     

     

     

    2,901.0

     

    Less:

     

     

     

     

    Cash and cash equivalents **

     

     

     

    352.6

     

    Net debt (1)

     

     

    $

    2,548.4

     

    For the twelve months ended June 29, 2024

     

     

     

     

    EBITDA before charges/gains (2) (c)

     

     

    $

    969.5

     

     

     

     

     

     

    Net debt-to-EBITDA before charges/gains ratio (1/2)

     

     

    2.6

     

     

    ** Amounts are per the Unaudited Condensed Consolidated Balance Sheet as of June 29, 2024.

     
     

     

    Twenty-Six Weeks Ended

    Twenty-Six Weeks Ended

    Fifty-Two Weeks Ended

     

    December 30, 2023

    June 29, 2024

    June 29, 2024

     

     

     

     

     

     

     

    Income from continuing operations, net of tax

    $

    217.8

     

    $

    230.2

     

    $

    448.0

     

     

     

     

     

     

     

     

    Depreciation***

    $

    51.8

     

    $

    46.9

     

    $

    98.7

     

    Amortization of intangible assets

     

    36.9

     

     

    36.1

     

     

    73.0

     

    Restructuring charges

     

    7.3

     

     

    6.7

     

     

    14.0

     

    Other charges/(gains)

     

    16.1

     

     

    22.0

     

     

    38.1

     

    ASSA transaction expenses (d)

     

    2.3

     

     

    -

     

     

    2.3

     

    Solar compensation (e)

     

    1.4

     

     

    -

     

     

    1.4

     

    Amortization of inventory step-up (f)

     

    12.4

     

     

    -

     

     

    12.4

     

    Interest expense

     

    62.0

     

     

    62.4

     

     

    124.4

     

    Asset impairment charge (g)

     

    33.5

     

     

    -

     

     

    33.5

     

    Defined benefit plan actuarial gains

     

    (0.5

    )

     

    -

     

     

    (0.5

    )

    Income taxes

     

    58.7

     

     

    65.5

     

     

    124.2

     

    EBITDA before charges/gains (c)

    $

    499.7

     

    $

    469.8

     

    $

    969.5

     

     

    *** Depreciation excludes accelerated depreciation expense of $18.5 million for the twenty-six weeks ended June 29, 2024, and $14.1 million for the twenty-six weeks ended December 30, 2023. Accelerated depreciation is included in other charges/gains.

     

    (c) (d) (e) (f) (g) For definitions of Non-GAAP measures, see Definitions of Terms page

    RECONCILIATION OF DILUTED EPS FROM CONTINUING OPERATIONS BEFORE CHARGES/GAINS

    For the thirteen weeks ended June 29, 2024, the diluted EPS before charges/gains is calculated as income from continuing operations on a diluted per-share basis, excluding $3.9 million ($3.0 million after tax or $0.02 per diluted share) of restructuring charges and $12.9 million ($9.8 million after tax or $0.08 per diluted share) of other charges/gains.

    For the twenty-six weeks ended June 29, 2024, the diluted EPS before charges/gains is calculated as income from continuing operations on a diluted per-share basis, excluding $6.7 million ($5.1 million after tax or $0.04 per diluted share) of restructuring charges and $22.0 million ($16.7 million after tax or $0.13 per diluted share) of other charges/gains.

    For the thirteen weeks ended July 1, 2023, the diluted EPS before charges/gains is calculated as income from continuing operations on a diluted per-share basis, excluding $22.2 million ($16.9 million after tax or $0.13 per diluted share) of restructuring charges, $6.0 million ($4.6 million after tax or $0.04 per diluted share) of other charges/gains, $16.4 million ($12.6 million after tax or $0.10 per diluted share) of expenses directly related to our ASSA transaction and $0.6 million ($0.5 million after tax) related to the compensation agreement with the former owner of Solar.

    For the twenty-six weeks ended July 1, 2023, the diluted EPS before charges/gains is calculated as income from continuing operations on a diluted per-share basis, excluding $25.2 million ($19.2 million after tax or $0.15 per diluted share) of restructuring charges, $6.2 million ($4.6 million after tax or $0.03 per diluted share) of other charges/gains, $17.4 million ($13.4 million after tax or $0.10 per diluted share) of expenses directly related to our ASSA transaction and $1.3 million ($1.0 million after tax or $0.01 per diluted share) related to the compensation agreement with the former owner of Solar.

     

    Thirteen Weeks Ended

    Thirteen Weeks Ended

     

     

     

    Twenty-Six Weeks Ended

    Twenty-Six Weeks Ended

     

     

     

    June 29, 2024

    July 1, 2023

    % Change

     

    June 29, 2024

    July 1, 2023

    % Change

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Earnings per common share (EPS) - Diluted

     

     

     

     

     

     

     

     

     

     

     

     

     

    Diluted EPS from continuing operations (GAAP)

    $

    1.06

     

    $

    0.80

     

     

    33

     

     

    $

    1.82

     

    $

    1.47

     

     

    24

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Restructuring charges

     

    0.02

     

     

    0.13

     

     

    (85

    )

     

     

    0.04

     

     

    0.15

     

     

    (73

    )

    Other charges/(gains)

     

    0.08

     

     

    0.04

     

     

    100

     

     

     

    0.13

     

     

    0.03

     

     

    333

     

    ASSA transaction expenses (d)

     

    -

     

     

    0.10

     

     

    (100

    )

     

     

    -

     

     

    0.10

     

     

    (100

    )

    Solar compensation (e)

     

    -

     

     

    -

     

     

    -

     

     

     

    -

     

     

    0.01

     

     

    (100

    )

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Diluted EPS from continuing operations before charges/gains (b)

    $

    1.16

     

    $

    1.07

     

     

    8

     

     

    $

    1.99

     

    $

    1.76

     

     

    13

     

     

    (d) (e) For definitions of Non-GAAP measures, see Definitions of Terms page

     

    FORTUNE BRANDS INNOVATIONS, INC.

    (In millions, except per share amounts)

    (Unaudited)

     

     

    Thirteen Weeks Ended

    Thirteen Weeks Ended

     

     

     

     

     

    Twenty-Six Weeks Ended

    Twenty-Six Weeks Ended

     

     

     

    June 29, 2024

    July 1, 2023

    % Change

     

     

     

    June 29, 2024

    July 1, 2023

    % Change

    Net sales (GAAP)

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Water

    $

    659.6

     

    $

    617.1

     

     

    7

     

     

     

     

    $

    1,284.9

     

    $

    1,211.3

     

     

    6

     

    Outdoors

     

    389.4

     

     

    375.6

     

     

    4

     

     

     

     

     

    704.4

     

     

    665.5

     

     

    6

     

    Security

     

    191.0

     

     

    171.0

     

     

    12

     

     

     

     

     

    360.2

     

     

    326.9

     

     

    10

     

    Total net sales

    $

    1,240.0

     

    $

    1,163.7

     

     

    7

     

     

     

     

    $

    2,349.5

     

    $

    2,203.7

     

     

    7

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Operating income (loss)

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Water

    $

    150.9

     

    $

    142.1

     

     

    6

     

     

     

     

    $

    292.2

     

    $

    270.5

     

     

    8

     

    Outdoors

     

    51.8

     

     

    61.2

     

     

    (15

    )

     

     

     

     

    86.0

     

     

    74.2

     

     

    16

     

    Security

     

    34.4

     

     

    (0.4

    )

     

    100

     

     

     

     

     

    53.5

     

     

    20.8

     

     

    157

     

    Corporate expenses

     

    (38.0

    )

     

    (50.3

    )

     

    (24

    )

     

     

     

     

    (77.2

    )

     

    (81.1

    )

     

    (5

    )

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Total operating income (GAAP)

    $

    199.1

     

    $

    152.6

     

     

    30

     

     

     

     

    $

    354.5

     

    $

    284.4

     

     

    25

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    OPERATING INCOME BEFORE CHARGES/GAINS RECONCILIATION

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Total operating income (GAAP)

    $

    199.1

     

    $

    152.6

     

     

    30

     

     

     

     

    $

    354.5

     

    $

    284.4

     

     

    25

     

    Restructuring charges (1)

     

    3.9

     

     

    22.2

     

     

    (82

    )

     

     

     

     

    6.7

     

     

    25.2

     

     

    (73

    )

    Other charges/(gains) (2)

     

    12.9

     

     

    6.0

     

     

    115

     

     

     

     

     

    22.0

     

     

    6.2

     

     

    255

     

    ASSA transaction expenses (d)

     

    -

     

     

    16.4

     

     

    (100

    )

     

     

     

     

    -

     

     

    17.4

     

     

    (100

    )

    Solar compensation (e)

     

    -

     

     

    0.6

     

     

    (100

    )

     

     

     

     

    -

     

     

    1.3

     

     

    (100

    )

    Operating income (loss) before charges/gains (a)

    $

    215.9

     

    $

    197.8

     

     

    9

     

     

     

     

    $

    383.2

     

    $

    334.5

     

     

    15

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Water

    $

    153.4

     

    $

    143.2

     

     

    7

     

     

     

     

    $

    294.9

     

    $

    271.9

     

     

    8

     

    Outdoors

     

    63.3

     

     

    61.6

     

     

    3

     

     

     

     

     

    101.1

     

     

    76.8

     

     

    32

     

    Security

     

    36.2

     

     

    26.6

     

     

    36

     

     

     

     

     

    62.9

     

     

    48.5

     

     

    30

     

    Corporate expenses

     

    (37.0

    )

     

    (33.6

    )

     

    10

     

     

     

     

     

    (75.7

    )

     

    (62.7

    )

     

    21

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Total operating income before charges/gains (a)

    $

    215.9

     

    $

    197.8

     

    9

     

     

     

     

    $

    383.2

     

    $

    334.5

     

    15

     

    (1)

    Restructuring charges, which include costs incurred for significant cost reduction initiatives and workforce reduction costs by segment, totaled $3.9 million and $6.7 million for the thirteen weeks ended and twenty-six weeks ended June 29, 2024, respectively, and $22.2 million and $25.2 million for the thirteen weeks ended and twenty-six weeks ended July 1, 2023, respectively.

     

    (2)

    Other charges/gains represent costs that are directly related to restructuring initiatives but cannot be reported as restructuring costs under GAAP. These costs can include losses from disposing of inventories, trade receivables allowances from discontinued product lines, accelerated depreciation due to the closure of facilities, and gains or losses from selling previously closed facilities. During the thirteen weeks and twenty-six weeks ended June 29, 2024, total other charges were $12.9 million and $22.0 million, respectively. For the thirteen weeks and twenty-six weeks ended July 1, 2023, total charges were $6.0 million and $6.2 million, respectively.

     

    (a) (d) (e) For definitions of Non-GAAP measures, see Definitions of Terms page

     

    FORTUNE BRANDS INNOVATIONS, INC.

    OPERATING MARGIN TO BEFORE CHARGES/GAINS OPERATING MARGIN

    (Unaudited)

     

     

     

    Thirteen Weeks Ended

    Thirteen Weeks Ended

     

     

    Twenty-Six Weeks Ended

    Twenty-Six Weeks Ended

     

     

     

    June 29, 2024

    July 1, 2023

    Change

     

    June 29, 2024

    July 1, 2023

    Change

    WATER

     

     

     

     

     

     

     

     

    Operating margin

     

    22.9%

    23.0%

    (10) bps

     

    22.7%

    22.3%

    40 bps

    Restructuring charges

     

    0.2%

    0.2%

     

     

    (0.2%)

    (0.2%)

     

    Other charges/(gains)

     

     

     

     

     

     

     

     

    Cost of products sold

     

    0.2%

    -

     

     

    (0.1%)

    -

     

    Before charges/gains operating margin

     

    23.3%

    23.2%

    10 bps

     

    23.0%

    22.5%

    50 bps

     

     

     

     

     

     

     

     

     

    OUTDOORS

     

     

     

     

     

     

     

     

    Operating margin

     

    13.3%

    16.3%

    (300) bps

     

    12.2%

    11.1%

    110 bps

    Restructuring charges

     

    0.5%

    0.4%

     

     

    (0.4%)

    (0.5%)

     

    Other charges/(gains)

     

     

     

     

     

     

     

     

    Cost of products sold

     

    2.5%

    (0.5%)

     

     

    (1.8%)

    0.3%

     

    Solar compensation (e)

     

    -

    0.2%

     

     

    -

    (0.2%)

     

    Before charges/gains operating margin

     

    16.3%

    16.4%

    (10) bps

     

    14.4%

    11.5%

    290 bps

     

     

     

     

     

     

     

     

     

    SECURITY

     

     

     

     

     

     

     

     

    Operating margin

     

    18.0%

    (0.2%)

    1,820 bps

     

    14.9%

    6.4%

    850 bps

    Restructuring charges

     

    0.3%

    11.5%

     

     

    (0.6%)

    (6.1%)

     

    Other charges/(gains)

     

     

     

     

     

     

     

     

    Cost of products sold

     

    0.6%

    4.3%

     

     

    (2.0%)

    (2.3%)

     

    Before charges/gains operating margin

     

    18.9%

    15.6%

    330 bps

     

    17.5%

    14.8%

    270 bps

     

     

     

     

     

     

     

     

     

    TOTAL COMPANY

     

     

     

     

     

     

     

     

    Operating margin

     

    16.1%

    13.1%

    300 bps

     

    15.1%

    12.9%

    220 bps

    Restructuring charges

     

    0.3%

    1.9%

     

     

    (0.3%)

    (1.1%)

     

    Other charges/(gains)

     

     

     

     

     

     

     

     

    Cost of products sold

     

    0.9%

    0.5%

     

     

    (0.8%)

    (0.3%)

     

    Selling, general and administrative expenses

     

    0.1%

    -

     

     

    (0.1%)

    -

     

    ASSA transaction expenses (d)

     

    -

    1.4%

     

     

    -

    (0.8%)

     

    Solar compensation (e)

     

    -

    0.1%

     

     

    -

    (0.1%)

     

    Before charges/gains operating margin

     

    17.4%

    17.0%

    40 bps

     

    16.3%

    15.2%

    110 bps

     

    Operating margin is calculated as the operating income in accordance with GAAP, divided by the GAAP net sales. The before charges/gains operating margin is calculated as the operating income, excluding restructuring and other charges/gains, divided by the GAAP net sales. This before charges/gains operating margin is not a measure derived in accordance with GAAP. Management uses this measure to evaluate the returns generated by the Company and its business segments. Management believes that this measure provides investors with helpful supplemental information about the Company's underlying performance from period to period. However, this measure may not be consistent with similar measures presented by other companies.

     

    (d) (e) For definitions of Non-GAAP measures, see Definitions of Terms page

     
     

    FORTUNE BRANDS INNOVATIONS, INC.

    RECONCILIATION OF GAAP NET SALES TO ORGANIC NET SALES EXCLUDING THE IMPACT OF ACQUISITIONS

    (Unaudited)

     

     

     

    Thirteen Weeks Ended

    Thirteen Weeks Ended

     

     

     

    June 29, 2024

    July 1, 2023

    % Change

     

     

     

     

     

     

     

    WATER

     

     

     

     

     

     

    Net sales (GAAP)

     

    $

    659.6

     

    $

    617.1

     

    7%

    Impact of SpringWell Acquisition

     

     

    6.9

     

     

    -

     

     

    Impact of Emtek and Schaub Acquisition

     

     

    67.1

     

     

    -

     

     

    Organic net sales excluding impact of acquisitions

     

    $

    585.6

     

    $

    617.1

     

    (5%)

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    OUTDOORS

     

     

     

     

     

     

    Net sales (GAAP)

     

    $

    389.4

     

    $

    375.6

     

    4%

    Organic net sales

     

    $

    389.4

     

    $

    375.6

     

    4%

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    SECURITY

     

     

     

     

     

     

    Net sales (GAAP)

     

    $

    191.0

     

    $

    171.0

     

    12%

    Impact of Yale and August Acquisition

     

     

    32.2

     

     

    -

     

     

    Organic net sales excluding impact of acquisition

     

    $

    158.8

     

    $

    171.0

     

    (7%)

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    TOTAL COMPANY

     

     

     

     

     

     

    Net sales (GAAP)

     

    $

    1,240.0

     

    $

    1,163.7

     

    7%

    Impact of SpringWell Acquisition

     

     

    6.9

     

     

    -

     

     

    Impact of Emtek and Schaub Acquisition

     

     

    67.1

     

     

    -

     

     

    Impact of Yale and August Acquisition

     

     

    32.2

     

     

    -

     

     

    Organic net sales excluding impact of acquisitions

     

    $

    1,133.8

     

    $

    1,163.7

     

    (3%)

     

    Reconciliation of GAAP Net sales to organic net sales excluding the impact of acquisitions on net sales is net sales derived in accordance with GAAP excluding impact of the acquisitions of SpringWell and Emtek and Schaub in our Water segment and the acquisition of Yale and August in our Security segment on net sales. Management uses this measure to evaluate the overall performance of its segments and believes this measure provides investors with helpful supplemental information regarding the underlying performance of the segment from period to period. This measure may be inconsistent with similar measures presented by other companies.

     
     

    Definitions of Terms: Non-GAAP Measures

     

    (a) Operating income (loss) before charges/gains is calculated as operating income derived in accordance with GAAP, excluding restructuring and other charges/gains. Operating income (loss) before charges/gains is a measure not derived in accordance with GAAP. Management uses this measure to evaluate the returns generated by the Company and its business segments. Management believes this measure provides investors with helpful supplemental information regarding the underlying performance of the Company from period to period. This measure may be inconsistent with similar measures presented by other companies.

     

    (b) Diluted earnings per share from continuing operations before charges/gains is calculated as income from continuing operations on a diluted per-share basis, excluding restructuring and other charges/gains. This measure is not in accordance with GAAP. Management uses this measure to evaluate the Company's overall performance and believes it provides investors with helpful supplemental information about the Company's underlying performance from period to period. However, this measure may not be consistent with similar measures presented by other companies.

     

    (c) EBITDA before charges/gains is calculated as income from continuing operations, net of tax in accordance with GAAP, excluding depreciation, amortization of intangible assets, restructuring and other charges/gains, interest expense and income taxes. EBITDA before charges/gains is a measure not derived in accordance with GAAP. Management uses this measure to assess returns generated by the Company. Management believes this measure provides investors with helpful supplemental information about the Company's ability to fund internal growth, make acquisitions and repay debt and related interest. This measure may be inconsistent with similar measures presented by other companies.

     

    (d) At Corporate, other charges also include expenditures of $2.3 million for the twenty-six weeks ended December 30, 2023, $16.4 million for the thirteen weeks ended July 1, 2023, and $17.4 million for the twenty-six weeks ended July 1, 2023, for external banking, legal, accounting, and other similar services directly related to our ASSA transaction.

     

    (e) In Outdoors, other charges include charges for compensation arrangement with the former owner of Solar classified in selling, general and administrative expenses of $1.4 million for the twenty-six weeks ended December 30, 2023, $0.6 million for the thirteen weeks ended July 1,2023, and $1.3 million for the twenty-six weeks ended July 1, 2023.

     

    (f) For the twenty-six weeks ended December 30, 2023, the amortization of inventory step-up associated with the acquisition of the ASSA business was $3.5 million for the Water segment and $8.9 million for the Security segment.

     

    (g) Asset impairment charges for the twenty-six weeks ended December 30, 2023 represent pre-tax impairment charges of $33.5 million related to indefinite-lived tradenames in our Outdoors segment.
     

    Additional Information:

    In January 2023, the Board of Directors of the Company approved a change to the Company's fiscal year end from December 31 to a 52-or 53-week fiscal year ending on the Saturday closest but not subsequent to December 31, effective as of the commencement of the Company's fiscal year on January 1, 2023. This change was made in order to align the Company's fiscal year with that of its operating businesses and to align the Company's reporting calendar with how the Company evaluates its businesses. There was no material impact to any of our previously disclosed financial information.

     

    For certain forward-looking non-GAAP measures (as used in this press release, operating margin before charges/gains, EPS before charges/gains and cash conversion), the Company is unable to provide a reconciliation to the most comparable GAAP financial measure because the information needed to reconcile these measures is unavailable due to the inherent difficulty of forecasting the timing and/or amount of various items that have not yet occurred, including the high variability and low visibility with respect to gains and losses associated with our defined benefit plans, which are excluded from our diluted EPS before charges/gains and cash conversion, and restructuring and other charges, which are excluded from our operating margin before charges/gains, diluted EPS before charges/gains and cash conversion. Additionally, estimating such GAAP measures and providing a meaningful reconciliation consistent with the Company's accounting policies for future periods requires a level of precision that is unavailable for these future periods and cannot be accomplished without unreasonable effort. Forward-looking non-GAAP measures are estimated consistent with the relevant definitions and assumptions.

     

     

    View source version on businesswire.com: https://www.businesswire.com/news/home/20240725227297/en/

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      Janus International Group, Inc. (NYSE:JBI) ("Janus" or the "Company"), a leading provider of access control technologies and building product solutions for the self-storage and other commercial and industrial sectors, today announced the appointment of Jason Williams as President of Janus International Group, LLC ("Janus Core"). He will report directly to Janus's Chief Executive Officer, Ramey Jackson. Mr. Williams will be responsible for the Janus Core strategy including oversight of sales, marketing, financial performance, and product development for the self-storage and commercial door and hallway business. Jason brings over 15 years of experience in leading and growing businesses in th

      5/19/25 6:55:00 AM ET
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    • Janus International Announces Jason Williams as President, Janus International Group LLC ("Janus Core")

      Janus International Group, Inc. (NYSE:JBI) ("Janus" or the "Company"), a leading provider of access control technologies and building product solutions for the self-storage and other commercial and industrial sectors, today announced the appointment of Jason Williams as President of Janus International Group, LLC ("Janus Core"). He will report directly to Janus's Chief Executive Officer, Ramey Jackson. Mr. Williams will be responsible for the Janus Core strategy including oversight of sales, marketing, financial performance, and product development for the self-storage and commercial door and hallway business. Jason brings over 15 years of experience in leading and growing businesses in th

      5/19/25 6:55:00 AM ET
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    • Fortune Brands Appoints Kristin Papesh as Chief Human Resources Officer; Sheri Grissom to Continue Leading Company's Transformation Management Office

      Company appoints Chief Human Resources Officer and shifts current CHRO to become its dedicated Chief Transformation Officer to best support Fortune Brands' strategic growth initiatives and continue building a strong, attractive culture and workplace Fortune Brands Innovations, Inc. (NYSE:FBIN), an industry-leading home, security and commercial building products company, today announced that the Board of Directors has appointed Kristin Papesh to serve as Executive Vice President and Chief Human Resources Officer, effective November 27, 2023. Additionally, Sheri Grissom, the Company's current Chief Human Resources and Transformation Officer, will solely focus on leading the Company's Transf

      10/27/23 4:05:00 PM ET
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    • SEC Form SD filed by Fortune Brands Innovations Inc.

      SD - Fortune Brands Innovations, Inc. (0001519751) (Filer)

      5/30/25 9:16:56 AM ET
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    • Fortune Brands Innovations Inc. filed SEC Form 8-K: Submission of Matters to a Vote of Security Holders

      8-K - Fortune Brands Innovations, Inc. (0001519751) (Filer)

      5/19/25 4:27:35 PM ET
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    • Fortune Brands Innovations Inc. filed SEC Form 8-K: Leadership Update, Regulation FD Disclosure, Financial Statements and Exhibits

      8-K - Fortune Brands Innovations, Inc. (0001519751) (Filer)

      5/14/25 4:30:26 PM ET
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    • Fortune Brands Delivers Margin and EPS Results In-line with Expectations; Plans to Fully Offset Anticipated 2025 Tariff Impacts and Mitigate Volume Softness

      Highlights: Q1 2025 sales were $1.0 billion, a decrease of 7 percent versus Q1 2024; organic sales excluding the impact of China and FX were down 5 percent Q1 2025 earnings per share (EPS) were $0.42, a decrease of 45 percent versus a year ago; EPS before charges / gains were $0.66, a decrease of 20 percent versus Q1 2024 The Company is implementing tariff mitigation strategies designed to fully offset anticipated 2025 tariff impacts while capitalizing on identified opportunities Management will provide an EPS guidance framework for different volume scenarios on today's earnings call Fortune Brands Innovations, Inc. (NYSE:FBIN), an industry-leading innovation company whose purpose

      5/6/25 4:12:00 PM ET
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    • Fortune Brands Names Jonathan Baksht Executive Vice President and Chief Financial Officer; Sets Date for First Quarter 2025 Earnings Announcement and Investor Conference Call

      Fortune Brands Innovations, Inc. (NYSE:FBIN), an industry-leading innovation company whose purpose is to elevate every life by transforming spaces into havens, today announced that Jonathan Baksht was appointed by the Board of Directors to serve as Executive Vice President and Chief Financial Officer beginning May 5, 2025. This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20250403782538/en/Jonathan Baksht Baksht is a proven leader with nearly a decade of public company CFO experience gained at two separate businesses. With an established track record in financial leadership and a deep understanding of market dynamics, he is well posit

      4/3/25 9:00:00 AM ET
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    • Fortune Brands Delivers Solid Margin Progress and Strong Cash Flow Amidst a Dynamic Environment; Announces $1 Billion Share Repurchase Authorization

      Highlights: Q4 2024 sales were $1.1 billion, a decrease of 5 percent versus Q4 2023; organic sales excluding the impact of China and one-time disruptions were down 1 percent Q4 2024 earnings per share (EPS) were $0.84, an increase of 31 percent versus a year ago; EPS before charges / gains were $0.98, an increase of 3 percent versus Q4 2023 Full-year 2024 sales were $4.6 billion, flat versus 2023; organic sales excluding the impact of China and one-time disruptions were down 2 percent Full-year 2024 EPS were $3.75, an increase of 18 percent versus a year ago; EPS before charges / gains were $4.12, an increase of 5 percent versus 2023 Company announces new $1 billion share rep

      2/6/25 4:05:00 PM ET
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    • Deutsche Bank initiated coverage on Fortune Brands Innovations with a new price target

      Deutsche Bank initiated coverage of Fortune Brands Innovations with a rating of Hold and set a new price target of $70.00

      4/1/25 9:05:45 AM ET
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    • Fortune Brands Innovations downgraded by BMO Capital Markets with a new price target

      BMO Capital Markets downgraded Fortune Brands Innovations from Outperform to Market Perform and set a new price target of $82.00 from $76.00 previously

      1/31/24 9:13:41 AM ET
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    • Oppenheimer initiated coverage on Fortune Brands Innovations

      Oppenheimer initiated coverage of Fortune Brands Innovations with a rating of Perform

      1/19/24 7:36:47 AM ET
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    Large Ownership Changes

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    • SEC Form SC 13G filed by Fortune Brands Innovations Inc.

      SC 13G - Fortune Brands Innovations, Inc. (0001519751) (Subject)

      11/14/24 4:23:59 PM ET
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