Fortune Brands Reports Strong 2Q 2022 Results and More Business Updates

Fortune Brands Home & Security, Inc. (the “Company”, or “Fortune Brands”), an industry-leading home and security products company, announced second quarter 2022 results.

Business and Operations Highlights

• 2Q 2022 sales of $2.1 billion, an increase of 9 percent versus a year ago
• 2Q 2022 earnings per share (EPS) of $1.46, a decrease of 6 percent versus a year ago; EPS before charges / gains of $1.67, an increase of 7 percent versus a year ago
• Separation of companies progressing ahead of schedule; Company expects to file initial Form 10 during 3Q

“Our teams once again delivered strong results while also advancing key strategic priorities,” said Nicholas Fink, chief executive officer, Fortune Brands. “Consumer demand for our products remained resilient as net sales grew solidly, especially considering the stimulus-driven growth during this quarter last year. Additionally, each segment improved its margins sequentially and versus the prior year. The long-term fundamentals driving the housing market remain intact, and we are committed to thoughtfully taking the actions necessary to deliver margin progression and effectively manage our cash through any short-term softness in demand. Just as in previous cycles, we will be proactive and agile in our response to dynamic conditions, enabling us to continue achieving our long-term objectives. Finally, the separation of our two companies is moving forward ahead of schedule. Our teams are executing with excellence, and we are excited for the future of both New Fortune Brands and Cabinets.”

Second Quarter 2022

For the second quarter of 2022, sales were $2.1 billion, an increase of 9 percent over the second quarter of 2021. Earnings per share were $1.46, compared to $1.55 in the prior-year quarter, a decrease of 6 percent. EPS before charges / gains were $1.67, compared to $1.56 the same quarter last year, an increase of 7 percent. Operating income was $284.1 million, compared to $294.9 million in the prior-year quarter, a decrease of 4 percent. Operating income before charges / gains was $319.8 million, compared to $297.5 million the same quarter last year, up 7 percent. Operating margin was 13.5 percent, compared to 15.2 percent in the second quarter of 2021. Operating margin before charges / gains was 15.1 percent, compared to 15.4 percent in the second quarter of 2021.

For each segment in the second quarter of 2022, compared to the prior-year quarter:

• Water Innovations sales decreased 6 percent, or 5 percent adjusting for FX. Results were impacted by coronavirus-related shutdowns in China; excluding China, sales increased 4 percent. Operating margin before charges / gains was 24.9 percent.
• Outdoors & Security sales increased 13 percent driven by price across all product categories. Organically, sales increased 12 percent. Operating margin before charges / gains was 15.4 percent, up 70 basis points in the period over last year
• Cabinet sales increased 21 percent, driven by price and volume growth. Operating margin before charges / gains was 11.5 percent, up 60 basis points in the period over last year.

Balance Sheet and Liquidity

At the end of the quarter, net debt was $3.0 billion and net debt to EBITDA was 2.3x. The Company had $361 million in cash and $564 million of availability under its revolving credit facility.
During the second quarter, the Company repurchased approximately $125 million in common stock and year-to-date has repurchased approximately $505 million in common stock.

Annual Outlook Update

The Company now anticipates delivering an increased full-year sales growth in the range of 6.5 percent to 7.5 percent relative to a global home products market growing at 3 percent to 5 percent and a U.S. home products market growing at 4 percent to 6 percent.

The Company now expects EPS before charges / gains for the full year to be in the range of $6.36 to $6.50 to account for incremental costs related to the separation.

The Company now expects to generate free cash flow of approximately $590 million to $630 million.

“We remain well positioned to achieve our long-term objectives,” said Patrick Hallinan, chief financial officer, Fortune Brands. “We are proactively managing expenses and cash in response to a dynamic housing products market and will continue to drive value-creation opportunities. Our balance sheet remains strong, and we will appropriately manage our liquidity and cash flow to pursue the best returns for our stakeholders.”

For the complete Press Release, click here.

About Fortune Brands

Fortune Brands Home & Security, Inc. (NYSE: FBHS), headquartered in Deerfield, IL., is a Fortune 500 company, part of the S&P 500 Index and a leader in the home products industry. With trusted brands and market leadership positions in each of its three operating segments, Water Innovations, Outdoors & Security, and Cabinets, Fortune Brands’ 28,000 associates work with a purpose to fulfill the dreams of home.
The Company’s growing portfolio of complementary businesses and innovative brands includes Moen and the House of Rohl within Water Innovations; outdoor living and security products from Therma-Tru, LARSON, Fiberon, Master Lock and SentrySafe; and MasterBrand Cabinets’ wide-ranging offerings from MANTRA, Diamond, Omega and many more. Visit www.FBHS.com to learn more about FBHS, its brands and how the Company is accelerating its environmental, social and governance (ESG) commitments.

Contact:

Matthew Skelly – Investor & Media Contact – investor.questions@fbhs.com – (847) 484-4573

Source: Fortune Brands Home & Security, Inc.