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 $1 billion share repurchase
authorization to replace existing share repurchase authorization,
reflecting confidence in cash generation and commitment to driving
long-term shareholder value
- Company provides full-year 2025 guidance focused on
outperforming the market, expanding margins while continuing to
invest in key strategic priorities and generating and deploying
cash
Fortune Brands Innovations, Inc. (NYSE: FBIN or “Fortune Brands”
or the “Company”), an industry-leading innovation company whose
purpose is to elevate every life by transforming spaces into
havens, today announced fourth quarter and full-year 2024
results.
“We made significant progress in 2024 against our key digital,
brand and organizational priorities. We have built a foundation for
growth which we are confident will accelerate as conditions
improve. Our teams continued to execute in a challenging market,
and we saw areas of sales outperformance against the market in our
core products portfolio, as well as accelerating digital water
sales. The Company again delivered margin expansion while
continuing to invest in our key priorities,” said Fortune Brands
Chief Executive Officer Nicholas Fink. "We recently announced
changes to our organization and leadership that will enable us to
be a more aligned and agile Company with continued focus on our
biggest growth opportunities.”
Fourth Quarter
2024 Results
($ in millions, except per share
amounts)
Unaudited
Q4 2024 Total
Company Results
Reported Net Sales
Operating Income
Operating Margin
EPS
Q4 2024 GAAP
$1,104
$178.3
16.1%
$0.84
Change
(5%)
33%
460 bps
31%
Reported Net Sales
Operating Income Before
Charges / Gains
Operating Margin
Before Charges / Gains
EPS
Before Charges / Gains
Q4 2024 Non-GAAP
$1,104
$181.6
16.4%
$0.98
Change
(5%)
(1)%
60 bps
3%
Q4 2024 Segment
Results
Net Sales
Change
Operating Margin
Change
Operating Margin Before
Charges/Gains
Change
Reported
Organic
Reported
Organic
Water Innovations
$645
$638
(3%)
(4%)
23.5%
240 bps
23.7%
190 bps
Outdoors
$303
$303
(2%)
(2%)
17.9%
1,550 bps
18.2%
430 bps
Security
$157
$157
(17%)
(17%)
8.9%
(410) bps
9.3%
(790) bps
Comments on the Fourth Quarter
Results in the quarter were impacted by a third-party software
outage in our Security distribution centers, as well as by softness
in China impacting our Water Innovations segment and the impact of
the southeastern U.S. hurricanes. Collectively, these impacts
represented approximately a 5 percent impact to the Company’s
fourth quarter organic sales.
Full-Year 2024
Results
($ in millions, except per share
amounts)
Unaudited
Full-Year 2024 Total
Company Results
Reported Net Sales
Operating Income
Operating Margin
EPS
FY 2024 GAAP
$4,609
$737.9
16.0%
$3.75
Change
0%
20%
270 bps
18%
Reported Net Sales
Operating Income Before
Charges / Gains
Operating Margin
Before Charges / Gains
EPS
Before Charges / Gains
FY 2024 Non-GAAP
$4,609
$780.6
16.9%
$4.12
Change
0%
6%
90 bps
5%
Full-Year 2024
Segment Results
Net Sales
Change
Operating Margin
Change
Operating Margin Before
Charges/Gains
Change
Reported
Organic
Reported
Organic
Water Innovations
$2,565
$2,408
0%
(6%)
23.2%
80 bps
23.5%
80 bps
Outdoors
$1,350
$1,350
1%
1%
14.7%
470 bps
16.1%
310 bps
Security
$694
$636
(4%)
(12)%
14.5%
590 bps
16.1%
10 bps
Balance Sheet and Cash
Flow
The Company exited the quarter with a strong balance sheet and
generated $272 million of operating cash flow and $212 million of
free cash flow in the quarter. For the full year, the Company
generated $668 million of operating cash flow and $475 million of
free cash flow, which represents over a 100% cash conversion ratio.
In accordance with its opportunistic, returns-based share
repurchase program, the Company repurchased $50 million of shares
in the fourth quarter, bringing the full year total to $240
million. The Company finished the year with full availability on
its revolving credit facility.
As of the end of the fourth quarter 2024:
Net debt
$2.3 billion
Net debt to EBITDA before charges /
gains
2.4x
Cash
$381 million
Amount available under revolving credit
facility
$1,250 million
Share Repurchase
Authorization
The Company announced that on February 4, 2025, its Board of
Directors authorized the repurchase of up to $1 billion of shares
of the Company’s outstanding common stock over the next two years
on the open market or in privately negotiated transactions or
otherwise (including pursuant to a Rule 10b5-1 trading plan, block
trades and accelerated share repurchase transactions), in
accordance with applicable securities laws. The new $1 billion
share repurchase authorization announced today replaces the
existing authorization, which was set to expire on January 29,
2026, and which had $409 million remaining.
The new purchases, if made, will occur from time to time
depending on market conditions. The newly announced share
repurchase authorization does not obligate the Company to
repurchase any dollar amount or number of shares of common stock.
This authorization is in effect until February 4, 2027, and may be
suspended or discontinued at any time.
2025 Market and Financial
Guidance
“Our full-year guidance reflects current market conditions and
our expectation for continued acceleration of digital products
coupled with R&R softness in the first half of 2025. Our team
is navigating near-term challenges while also executing multiple
foundational strategic initiatives which we expect will enable the
Company to drive market beating growth,” said Fortune Brands Chief
Financial Officer David Barry. “Our new $1 billion share repurchase
authorization shows we continue to have full confidence in our
long-term strategy, and the authorization underscores our ability
to drive cash flow and working capital initiatives while being
mindful of our leverage target.”
2025 Market and Financial
Guidance
2025 Full-Year Guidance
MARKET
Global market
-2% to 1%
U.S. market
-2% to 1%
U.S. R&R
-1% to 2%
U.S. SFNC
-2% to 2%
China market
-15% to -10%
TOTAL COMPANY FINANCIAL METRICS
Net sales
Flat to 3%
Operating margin before charges /
gains
16.5% to 17.5%
EPS before charges / gains
$4.15 to $4.45
Cash flow from operations
Around $680 million to $720 million
Free cash flow
Around $580 million to $620 million
Cash conversion
Around 115% to 125%
SEGMENT FINANCIAL METRICS
Water Innovations net sales
Flat to 4%
Water Innovations operating margin before
charges / gains
23.5% to 24.5%
Outdoors net sales
Flat to 3%
Outdoors operating margin before charges /
gains
16.0% to 17.0%
Security net sales
Flat to 3%
Security operating margin before charges /
gains
16.0% to 17.0%
OTHER ITEMS
Corporate expense
$158 million to $160 million
Interest expense
$114 million to $116 million
Other income / (expense)
Around $6 million
Capex
$100 million to $140 million
Tax rate
24.0% to 24.5%
Share count
124.0 million to 124.5 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 and EPS before charges / gains), 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 restructuring and other charges, which are
excluded from operating margin before charges / gains and EPS
before charges / gains. 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. is an industry-leading
innovation company dedicated to creating smarter, safer and more
beautiful homes and improving lives. The Company’s driving purpose
is to elevate every life by transforming spaces into havens.
The Company is a brand, innovation and channel leader focused on
exciting, supercharged categories in the home products, security
and commercial building markets. The Company’s portfolio of brands
includes Moen, House of Rohl, Aqualisa, SpringWell, Therma-Tru,
Larson, Fiberon, Master Lock, SentrySafe and Yale residential.
Fortune Brands is headquartered in Deerfield, Illinois and
trades on the NYSE as FBIN. To learn more, 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, expected impacts from recently-announced organizational
and leadership changes, 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 or
de-risking initiatives, 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," "focus" 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, including as a result of severe weather events, (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), organic sales
excluding the impact of China and one-time disruptions, 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
Fifty-Two Weeks Ended
Net sales (GAAP)
December 28,
2024
December 30,
2023
$ Change
% Change
December 28,
2024
December 30,
2023
$ Change
% Change
Water
$
644.6
$
663.0
$
(18.4
)
(3
)
$
2,564.6
$
2,562.2
$
2.4
-
Outdoors
303.0
309.2
(6.2
)
(2
)
1,350.1
1,341.1
9.0
1
Security
156.5
189.1
(32.6
)
(17
)
694.3
722.9
(28.6
)
(4
)
Total net sales
$
1,104.1
$
1,161.3
$
(57.2
)
(5
)
$
4,609.0
$
4,626.2
$
(17.2
)
(0
)
RECONCILIATIONS OF GAAP OPERATING
INCOME TO OPERATING INCOME BEFORE CHARGES/GAINS
(In millions)
(Unaudited)
Thirteen Weeks Ended
Fifty-Two Weeks Ended
December 28,
2024
December 30,
2023
$ Change
% Change
December 28,
2024
December 30,
2023
$ Change
% Change
WATER
Operating income (GAAP)
$
151.4
$
139.7
$
11.7
8
$
595.1
$
574.3
$
20.8
4
Restructuring charges
1.0
0.9
0.1
11
5.9
2.2
3.7
168
Other charges/(gains)
Cost of products sold
0.1
2.3
(2.2
)
(96
)
2.5
2.6
(0.1
)
(4
)
Amortization of inventory step-up (f)
-
1.4
(1.4
)
(100
)
0.3
3.5
(3.2
)
(91
)
Operating income before charges/gains
(a)
$
152.5
$
144.3
$
8.2
6
$
603.8
$
582.6
$
21.2
4
OUTDOORS
Operating income (GAAP)
$
54.1
$
7.3
$
46.8
641
$
198.0
$
133.5
$
64.5
48
Restructuring charges
0.1
1.2
(1.1
)
(92
)
5.0
4.2
0.8
19
Other charges/(gains)
Cost of products sold
1.0
0.3
0.7
233
14.8
(0.1
)
14.9
(14,900
)
Selling, general and administrative
expenses
-
-
-
-
0.2
0.1
0.1
100
Solar compensation (e)
-
0.6
(0.6
)
(100
)
-
2.7
(2.7
)
(100
)
Asset impairment charge (g)
-
33.5
(33.5
)
(100
)
-
33.5
(33.5
)
(100
)
Operating income before charges/gains
(a)
55.2
42.9
$
12.3
29
218.0
173.9
$
44.1
25
SECURITY
Operating income (GAAP)
$
13.9
$
24.6
$
(10.7
)
(43
)
$
100.4
$
62.4
$
38.0
61
Restructuring charges
0.7
1.5
(0.8
)
(53
)
3.8
25.4
(21.6
)
(85
)
Other charges/(gains)
Cost of products sold
-
6.5
(6.5
)
(100
)
7.7
19.2
(11.5
)
(60
)
Amortization of inventory step-up (f)
-
-
-
-
-
8.9
(8.9
)
(100
)
Operating income before charges/gains
(a)
$
14.6
$
32.6
$
(18.0
)
(55
)
$
111.9
$
115.9
$
(4.0
)
(3
)
CORPORATE
Corporate expense (GAAP)
$
(41.1
)
$
(37.6
)
$
(3.5
)
9
$
(155.6
)
$
(155.3
)
$
(0.3
)
-
Restructuring charges
0.4
-
0.4
100
1.5
0.7
0.8
114
Other charges/(gains)
Selling, general and administrative
expenses
-
0.3
(0.3
)
(100
)
0.6
0.5
0.1
20
ASSA transaction expenses (d)
-
1.1
(1.1
)
(100
)
0.4
19.7
(19.3
)
(98
)
General and administrative expenses
before charges/gains (a)
$
(40.7
)
$
(36.2
)
$
(4.5
)
12
$
(153.1
)
$
(134.4
)
$
(18.7
)
14
TOTAL COMPANY
Operating income (GAAP)
$
178.3
$
134.0
$
44.3
33
$
737.9
$
614.9
$
123.0
20
Restructuring charges
2.2
3.6
(1.4
)
(39
)
16.2
32.5
(16.3
)
(50
)
Other charges/(gains)
Cost of products sold
1.1
9.1
(8.0
)
(88
)
25.0
21.7
3.3
15
Selling, general and administrative
expenses
-
0.3
(0.3
)
(100
)
0.8
0.6
0.2
33
Solar compensation (e)
-
0.6
(0.6
)
(100
)
-
2.7
(2.7
)
(100
)
ASSA transaction expenses (d)
-
1.1
(1.1
)
(100
)
0.4
19.7
(19.3
)
(98
)
Amortization of inventory step-up (f)
-
1.4
(1.4
)
(100
)
0.3
12.4
(12.1
)
(98
)
Asset impairment charge (g)
-
33.5
(33.5
)
(100
)
-
33.5
(33.5
)
(100
)
Operating income before charges/gains
(a)
$
181.6
$
183.6
$
(2.0
)
(1
)
$
780.6
$
738.0
$
42.6
6
(a) (d) (e) (f) (g) For definitions of
Non-GAAP measures, see Definitions of Terms page
FORTUNE BRANDS INNOVATIONS,
INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS (GAAP)
(In millions)
(Unaudited)
December 28, 2024
December 30, 2023
Assets
Current assets
Cash and cash equivalents
$
381.1
$
366.4
Accounts receivable, net
514.4
534.2
Inventories
960.3
982.3
Other current assets
151.6
162.8
Total current assets
2,007.4
2,045.7
Property, plant and equipment, net
999.2
975.0
Goodwill
1,992.0
1,906.8
Other intangible assets, net of
accumulated amortization
1,297.2
1,354.7
Other assets
266.0
282.8
Total assets
$
6,561.8
$
6,565.0
Liabilities and equity
Current liabilities
Short-term debt
$
499.6
$
-
Accounts payable
513.9
568.1
Other current liabilities
588.8
632.3
Total current liabilities
1,602.3
1,200.4
Long-term debt
2,173.7
2,670.1
Deferred income taxes
117.4
111.3
Other non-current liabilities
246.4
289.8
Total liabilities
4,139.8
4,271.6
Stockholders' equity
2,422.0
2,293.4
Total equity
2,422.0
2,293.4
Total liabilities and equity
$
6,561.8
$
6,565.0
FORTUNE BRANDS INNOVATIONS,
INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
Fifty-Two Weeks Ended
December 28, 2024
December 30, 2023
Operating activities
Net income
$
471.9
$
404.5
Depreciation and amortization
193.6
168.8
Non-cash lease expense
38.6
35.1
Deferred taxes
0.2
(26.1
)
Asset impairment charge
-
33.5
Other non-cash items
54.9
36.8
Changes in assets and liabilities, net
(91.4
)
403.2
Net cash provided by operating
activities
$
667.8
$
1,055.8
Investing activities
Capital expenditures
$
(193.3
)
$
(256.5
)
Proceeds from the disposition of
assets
26.9
2.8
Cost of acquisitions, net of cash
acquired
(135.4
)
(784.1
)
Other investing activities, net
(1.1
)
-
Net cash used in investing
activities
$
(302.9
)
$
(1,037.8
)
Financing activities
Increase in debt, net
$
-
$
(4.9
)
Proceeds from the exercise of stock
options
15.5
18.0
Treasury stock purchases
(240.4
)
(150.0
)
Dividends to stockholders
(119.6
)
(116.8
)
Other items, net
(18.9
)
(17.6
)
Net cash provided by financing
activities
$
(363.4
)
$
(271.3
)
Effect of foreign exchange rate changes on
cash
$
(11.5
)
$
0.5
Net increase (decrease) in cash and cash
equivalents
$
(10.0
)
$
(252.8
)
Cash, cash equivalents and restricted
cash* at beginning of period
395.5
648.3
Cash, cash equivalents and restricted
cash* at end of period
$
385.5
$
395.5
*Restricted cash of $1.3 million and $3.1
million is included in Other current assets and Other assets,
respectively, as of December 28, 2024. Restricted cash of $26.9
million and $2.2 million is included in Other current assets and
Other assets, respectively, as of December 30, 2023.
FREE CASH
FLOW
Fifty-Two Weeks Ended
2025 Full Year
December 28, 2024
December 30, 2023
Estimate
Cash flow from operations
(GAAP)
$
667.8
$
1,055.8
$680 to $720
Less:
Capital expenditures
$
193.3
$
256.5
$100 to $140
Free cash flow**
$
474.5
$
799.3
$580 to $620
CASH CONVERSION
RATIO
Fifty-Two Weeks Ended
2025 Full Year
December 28, 2024
Estimate
Free cash flow**
$
474.5
$580 to $620
Net Income
$
471.9
$464 to $539
Cash conversion ratio ***
101
%
115% to 125%
** 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.
*** Cash conversion ratio is free cash
flow divided by net income calculated in accordance with GAAP. Cash
conversion ratio is a measure not derived in accordance with GAAP.
Management believes that cash conversion ratio 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 by other companies.
FORTUNE BRANDS INNOVATIONS,
INC.
CONDENSED CONSOLIDATED
STATEMENTS OF INCOME (GAAP)
(In millions, except per share
amounts)
(Unaudited)
Thirteen Weeks Ended
Fifty-Two Weeks Ended
December 28,
2024
December 30,
2023
% Change
December 28,
2024
December 30,
2023
% Change
Net sales
$
1,104.1
$
1,161.3
(5
)
$
4,609.0
$
4,626.2
-
Cost of products sold
596.4
666.3
(10
)
2,542.7
2,714.8
(6
)
Selling, general and administrative
expenses
309.3
305.8
1
1,239.1
1,168.4
6
Amortization of intangible assets
18.0
18.1
(1
)
73.1
62.1
18
Asset impairment charge
-
33.5
(100
)
-
33.5
(100
)
Restructuring charges
2.1
3.6
(42
)
16.2
32.5
(50
)
Operating income
178.3
134.0
33
737.9
614.9
20
Interest expense
27.9
28.7
(3
)
120.5
116.5
3
Other (income)/expense, net
17.1
1.4
100
11.9
(19.5
)
(161
)
Income from continuing operations
before taxes
133.3
103.9
28
605.5
517.9
17
Income tax
28.2
22.6
25
133.6
112.4
19
Income from continuing operations, net
of tax
$
105.1
$
81.3
29
$
471.9
$
405.5
16
Loss from discontinued operations, net
of tax
-
-
-
-
(1.0
)
(100
)
Net income
$
105.1
$
81.3
29
$
471.9
$
404.5
17
Diluted earnings per common
share
Continuing operations
$
0.84
$
0.64
31
$
3.75
$
3.17
18
Discontinued operations
$
-
$
-
-
$
-
$
-
-
Diluted EPS
$
0.84
$
0.64
31
$
3.75
$
3.17
18
Diluted average number of shares
outstanding
125.1
127.1
(2
)
125.7
127.7
(2
)
FORTUNE BRANDS INNOVATIONS,
INC.
(In millions)
(Unaudited)
RECONCILIATIONS OF INCOME FROM
CONTINUING OPERATIONS, NET OF TAX TO EBITDA BEFORE
CHARGES/GAINS
Thirteen Weeks Ended
Fifty-Two Weeks Ended
December 28,
2024
December 30,
2023
% Change
December 28,
2024
December 30,
2023
% Change
Income from continuing operations, net
of tax
$
105.1
$
81.3
29
$
471.9
$
405.5
16
Depreciation *
$
25.9
$
30.8
(16
)
$
95.5
$
90.4
6
Amortization of intangible assets
18.0
18.1
(1
)
73.1
62.1
18
Restructuring charges
2.1
3.6
(42
)
16.2
32.5
(50
)
Other charges/(gains)
1.1
9.4
(88
)
25.8
22.3
16
ASSA transaction expenses (d)
-
1.1
(100
)
0.4
19.7
(98
)
Solar compensation (e)
-
0.6
(100
)
-
2.7
(100
)
Amortization of inventory step-up (f)
-
1.4
(100
)
0.3
12.4
(98
)
Interest expense
27.9
28.7
(3
)
120.5
116.5
3
Asset impairment charge (g)
-
33.5
(100
)
-
33.5
(100
)
Defined benefit plan actuarial
losses/(gains)
18.9
1.9
895
18.6
(0.5
)
100
Income taxes
28.2
22.6
25
133.6
112.4
19
EBITDA before charges/gains (c)
$
227.2
$
233.0
(2
)
$
955.9
$
909.5
5
* Depreciation excludes accelerated
depreciation expense of $2.4 million for the thirteen weeks ended
December 28, 2024, and $25.0 million for the fifty-two weeks ended
December 28, 2024. Accelerated depreciation is included in
restructuring and other charges/gains. Depreciation excludes
accelerated depreciation expense of $8.4 million for the thirteen
weeks ended December 30, 2023, and $16.3 million for the fifty-two
weeks ended December 30, 2023. Accelerated depreciation is included
in restructuring and other charges/gains.
CALCULATION OF NET DEBT-TO-EBITDA
BEFORE CHARGES/GAINS RATIO
As of December 28, 2024
Short-term debt **
$
499.6
Long-term debt **
2,173.7
Total debt
2,673.3
Less:
Cash and cash equivalents **
381.1
Net debt (1)
$
2,292.2
For the fifty-two weeks ended December
28, 2024
EBITDA before charges/gains (2) (c)
$
955.9
Net debt-to-EBITDA before charges/gains
ratio (1/2)
2.4
** Amounts are per the Unaudited Condensed
Consolidated Balance Sheet as of December 28, 2024.
(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 December 28, 2024, the diluted EPS
before charges/gains is calculated as income from continuing
operations on a diluted per-share basis, excluding $2.2 million
($1.6 million after tax or $0.01 per diluted share) of
restructuring charges, $1.1 million ($0.9 million after tax or
$0.01 per diluted share) of other charges/gains and $18.8 million
($14.4 million after tax or $0.11 per diluted share) of defined
benefit plan actuarial losses.
For the fifty-two weeks ended December 28, 2024, the diluted EPS
before charges/gains is calculated as income from continuing
operations on a diluted per-share basis, excluding $16.2 million
($12.3 million after tax or $0.1 per diluted share) of
restructuring charges, $25.8 million ($20.1 million after tax or
$0.16 per diluted share) of other charges/gains and $18.6 million
($14.2 million after tax or $0.11 per diluted share) of defined
benefit plan actuarial losses.
For the thirteen weeks ended December 30, 2023, the diluted EPS
before charges/gains is calculated as income from continuing
operations on a diluted per-share basis, excluding $3.6 million
($2.8 million after tax or $0.02 per diluted share) of
restructuring charges, $9.3 million ($7.2 million after tax or
$0.06 per diluted share) of other charges/gains, $1.1 million ($0.8
million after tax or $0.01 per diluted share) of expenses directly
related to our ASSA transaction, $0.6 million ($0.5 million after
tax) related to the compensation agreement with the former owner of
Solar, $1.5 million ($1.1 million after tax or $0.01 per diluted
share) of amortization of inventory step-up related to acquisition
of the ASSA businesses, $33.5 million ($25.4 million after tax or
$0.20 per diluted share) of asset impairment charges and the impact
from actuarial losses associated with our defined benefit plans of
$1.9 million ($1.4 million after tax or $0.01 per diluted
share).
For the fifty-two weeks ended December 30, 2023, the diluted EPS
before charges/gains is calculated as income from continuing
operations on a diluted per-share basis, excluding $32.5 million
($24.8 million after tax or $0.20 per diluted share) of
restructuring charges, $23.3 million ($17.0 million after tax or
$0.13 per diluted share) of other charges/gains, $18.7 million
($15.1 million after tax or $0.12 per diluted share) of expenses
directly related to our ASSA transaction, $2.7 million ($2.0
million after tax or $0.02 per diluted share) related to the
compensation agreement with the former owner of Solar, $12.4
million ($9.5 million after tax or $0.07 per diluted share) of
amortization of inventory step-up related to acquisition of the
ASSA businesses, $33.5 million ($25.4 million after tax or $0.20
per diluted share) of asset impairment charges and the impact from
actuarial gains associated with our defined benefit plans of $0.5
million ($0.4 million after tax).
Thirteen Weeks Ended
Fifty-Two Weeks Ended
December 28,
2024
December 30,
2023
% Change
December 28,
2024
December 30,
2023
% Change
Earnings per common share (EPS) -
Diluted
Diluted EPS from continuing operations
(GAAP)
$
0.84
$
0.64
31
$
3.75
$
3.17
18
Restructuring charges
0.01
0.02
(50
)
0.10
0.20
(50
)
Other charges/(gains)
0.02
0.06
(67
)
0.16
0.13
23
ASSA transaction expenses (d)
-
0.01
(100
)
-
0.12
(100
)
Solar compensation (e)
-
-
-
-
0.02
(100
)
Amortization of inventory step-up (f)
-
0.01
(100
)
-
0.07
(100
)
Asset impairment charge (g)
-
0.20
(100
)
0.20
(100
)
Defined benefit plan actuarial
(losses)/gains
0.11
0.01
100
0.11
-
NM
Diluted EPS from continuing operations
before charges/gains (b)
$
0.98
$
0.95
3
$
4.12
$
3.91
5
(b) (d) (e) (f) (g) 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
Fifty-Two Weeks Ended
December 28,
2024
December 30,
2023
% Change
December 28,
2024
December 30,
2023
% Change
Net sales (GAAP)
Water
$
644.6
$
663.0
(3
)
$
2,564.6
$
2,562.2
-
Outdoors
303.0
309.2
(2
)
1,350.1
1,341.1
1
Security
156.5
189.1
(17
)
694.3
722.9
(4
)
Total net sales
$
1,104.1
$
1,161.3
(5
)
$
4,609.0
$
4,626.2
-
Operating income (loss)
Water
$
151.4
$
139.7
8
$
595.1
$
574.3
4
Outdoors
54.1
7.3
641
198.0
133.5
48
Security
13.9
24.6
(43
)
100.4
62.4
61
Corporate expenses
(41.1
)
(37.6
)
9
(155.6
)
(155.3
)
-
Total operating income (GAAP)
$
178.3
$
134.0
33
$
737.9
$
614.9
20
OPERATING INCOME
BEFORE CHARGES/GAINS RECONCILIATION
Total operating income (GAAP)
$
178.3
$
134.0
33
$
737.9
$
614.9
20
Restructuring charges (1)
2.2
3.6
(39
)
16.2
32.5
(50
)
Other charges/(gains) (2)
1.1
9.4
(88
)
25.8
22.3
16
ASSA transaction expenses (d)
-
1.1
(100
)
0.4
19.7
(98
)
Solar compensation (e)
-
0.6
(100
)
-
2.7
(100
)
Amortization of inventory step-up (f)
-
1.4
(100
)
0.3
12.4
(98
)
Asset impairment charges (g)
-
33.5
(100
)
-
33.5
(100
)
Operating income (loss) before
charges/gains (a)
$
181.6
$
183.6
(1
)
$
780.6
$
738.0
6
Water
$
152.5
$
144.3
6
$
603.8
$
582.6
4
Outdoors
55.2
42.9
29
218.0
173.9
25
Security
14.6
32.6
(55
)
111.9
115.9
(3
)
Corporate expenses
(40.7
)
(36.2
)
12
(153.1
)
(134.4
)
14
Total operating income before
charges/gains (a)
$
181.6
$
183.6
(1
)
$
780.6
$
738.0
6
(1)
Restructuring charges, which include costs
incurred for product-line rationalization within our Outdoors
segment, costs associated with the previously announced closure of
a manufacturing facility within our Security segment and headcount
actions across all segments, totaled $2.2 million and $16.2 million
for the thirteen and fifty-two weeks ended December 28, 2024,
respectively. Restructuring charges, which include costs incurred
for significant cost reduction initiatives and workforce reduction
costs by segment, totaled $3.6 million and $32.5 million for the
thirteen and fifty-two weeks ended December 30, 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 and fifty-two
weeks ended December 28, 2024, total other charges were $1.1
million and $25.8 million, respectively. For the thirteen and
fifty-two weeks ended December 30, 2023, total charges were $9.4
million and $22.3 million, respectively.
(a) (d) (e) (f) (g) For definitions of
Non-GAAP measures, see Definitions of Terms page
FORTUNE BRANDS INNOVATIONS,
INC.
OPERATING MARGIN TO OPERATING MARGIN
BEFORE CHARGES/GAINS
(Unaudited)
Thirteen Weeks Ended
Fifty-Two Weeks Ended
December 28,
2024
December 30,
2023
Change
December 28,
2024
December 30,
2023
Change
WATER
Operating margin
23.5%
21.1%
240 bps
23.2%
22.4%
80 bps
Restructuring charges
0.2%
0.1%
0.2%
0.1%
Other charges/(gains)
Cost of products sold
-
0.3%
0.1%
0.1%
Amortization of inventory step-up (f)
-
0.3%
-
0.1%
Operating margin before
charges/gains
23.7%
21.8%
190 bps
23.5%
22.7%
80 bps
OUTDOORS
Operating margin
17.9%
2.4%
1,550 bps
14.7%
10.0%
470 bps
Restructuring charges
0.0%
0.4%
0.4%
0.3%
Other charges/(gains)
Cost of products sold
0.3%
0.1%
1.0%
-
Solar compensation (e)
-
0.2%
-
0.2%
Asset Impairment charge (g)
-
10.8%
-
2.5%
Operating margin before
charges/gains
18.2%
13.9%
430 bps
16.1%
13.0%
310 bps
SECURITY
Operating margin
8.9%
13.0%
(410) bps
14.5%
8.6%
590 bps
Restructuring charges
0.4%
0.8%
0.5%
3.5%
Other charges/(gains)
Cost of products sold
-
3.4%
1.2%
2.7%
Amortization of inventory step-up (f)
-
-
-
1.2%
Operating margin before
charges/gains
9.3%
17.2%
(790) bps
16.1%
16.0%
10 bps
TOTAL COMPANY
Operating margin
16.1%
11.5%
460 bps
16.0%
13.3%
270 bps
Restructuring charges
0.2%
0.3%
0.4%
0.7%
Other charges/(gains)
Cost of products sold
0.1%
0.8%
0.5%
0.5%
Solar compensation (e)
-
0.1%
-
0.1%
ASSA transaction expenses (d)
-
0.1%
-
0.4%
Amortization of inventory step-up (f)
-
0.1%
-
0.3%
Asset impairment charge (g)
-
2.9%
-
0.7%
Operating margin before
charges/gains
16.4%
15.8%
60 bps
16.9%
16.0%
90 bps
Operating margin is calculated as the
operating income in accordance with GAAP, divided by the GAAP net
sales. The operating margin before charges/gains is calculated as
the operating income, excluding restructuring and other
charges/gains, divided by the GAAP net sales. The operating margin
before charges/gains 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) (f) (g) 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
Fifty-Two Weeks Ended
December 28, 2024
December 30, 2023
$ change
% Change
December 28, 2024
December 30, 2023
$ change
% Change
WATER
Net sales (GAAP)
$
644.6
$
663.0
$
(18.4
)
(3%)
$
2,564.6
$
2,562.2
$
2.4
0%
Impact of SpringWell Acquisition
6.8
-
6.8
22.0
-
22.0
Impact of Emtek and Schaub Acquisition
-
-
-
134.7
-
134.7
Organic net sales excluding impact of
acquisitions
$
637.8
$
663.0
$
(25.2
)
(4%)
$
2,407.9
$
2,562.2
$
(154.3
)
(6%)
OUTDOORS
Net sales (GAAP)
$
303.0
$
309.2
(2%)
$
1,350.1
$
1,341.1
1%
Organic net sales
$
303.0
$
309.2
(2%)
$
1,350.1
$
1,341.1
1%
SECURITY
Net sales (GAAP)
$
156.5
$
189.1
$
(32.6
)
(17%)
$
694.3
$
722.9
$
(28.6
)
(4%)
Impact of Yale and August Acquisition
-
-
58.3
-
58.3
Organic net sales excluding impact of
acquisition
$
156.5
$
189.1
$
(32.6
)
(17%)
$
636.0
$
722.9
$
(86.9
)
(12%)
TOTAL COMPANY
Net sales (GAAP)
$
1,104.1
$
1,161.3
$
(57.2
)
(5%)
$
4,609.0
$
4,626.2
$
(17.2
)
(0%)
Impact of SpringWell Acquisition
6.8
-
6.8
22.0
-
22.0
Impact of Emtek and Schaub Acquisition
-
-
134.7
-
Impact of Yale and August Acquisition
-
-
-
58.3
-
58.3
Organic net sales excluding impact of
acquisitions
$
1,097.3
$
1,161.3
$
(64.0
)
(6%)
$
4,394.0
$
4,626.2
$
(232.2
)
(5%)
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 the impact
of the acquisition of SpringWell in our Water segment, and the
results of the Emtek and Schaub and Yale and August acquisition in
our Water and Security segments, respectively, for the twenty-six
weeks ended June 29, 2024. 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.
FORTUNE BRANDS INNOVATIONS, INC.
RECONCILIATION OF GAAP NET SALES TO
ORGANIC NET SALES EXCLUDING THE IMPACT OF ACQUISITIONS, CHINA
SALES, THE SOFTWARE OUTAGE AND HURRICANES (Unaudited)
Thirteen Weeks Ended December
28, 2024 vs Thirteen Weeks Ended December 30, 2023
% Change
Water
Percentage change in net sales
(GAAP)
(3%)
Impact of acquisitions
(1%)
Organic net sales excluding impact of
acquisitions
(4%)
Excluding China sales
4%
Excluding hurricane impact
2%
Organic net sales excluding impact of
acquisitions, China and hurricane
2%
Thirteen Weeks Ended December
28, 2024 vs Thirteen Weeks Ended December 30, 2023
% Change
Security
Percentage change in net sales
(GAAP)
(17%)
Impact of acquisitions
0%
Organic net sales excluding impact of
acquisitions
(17%)
Excluding software outage
7%
Organic net sales excluding impact of
acquisitions and outage
(10%)
Thirteen Weeks Ended December
28, 2024 vs Thirteen Weeks Ended December 30, 2023
% Change
Total Company
Percentage change in net sales
(GAAP)
(5%)
Impact of acquisitions
(1%)
Organic net sales excluding impact of
acquisitions
(6%)
Excluding China sales
2%
Excluding software outage
2%
Excluding hurricane impact
1%
Organic net sales excluding impact of
acquisitions, China, outage and hurricane
(1%)
Fifty-Two Weeks Ended December
28, 2024 vs Fifty-Two Weeks Ended December 30, 2023
% Change
Water
Percentage change in net sales
(GAAP)
0%
Impact of acquisitions
(6%)
Organic net sales excluding impact of
acquisitions
(6%)
Excluding China sales
4%
Excluding hurricane impact
0%
Organic net sales excluding impact of
acquisitions, China and hurricane
(2%)
Fifty-Two Weeks Ended December
28, 2024 vs Fifty-Two Weeks Ended December 30, 2023
% Change
Security
Percentage change in net sales
(GAAP)
(4%)
Impact of acquisitions
(8%)
Organic net sales excluding impact of
acquisitions
(12%)
Excluding software outage
2%
Organic net sales excluding impact of
acquisitions and outage
(10%)
Fifty-Two Weeks Ended December
28, 2024 vs Fifty-Two Ended December 30, 2023
% Change
Total Company
Percentage change in net sales
(GAAP)
(0%)
Impact of acquisitions
(5%)
Organic net sales excluding impact of
acquisitions
(5%)
Excluding China sales
2%
Excluding software outage
1%
Excluding hurricane impact
0%
Organic net sales excluding impact of
acquisitions, China, outage and hurricane
(2%)
Net sales excluding the impact of acquisitions, China, the
software outage, and hurricanes is net sales derived in accordance
with GAAP excluding the impact of acquisitions, the impact of China
sales, the impact of the software outage, and the impact of
hurricanes. 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 Company and its reportable 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
zero and $0.4 million in the thirteen and fifty-two weeks ended
December 28, 2024, respectively and $1.1 million and $19.7 million
for the thirteen and fifty-two weeks ended December 30, 2023,
respectively, 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 $0.6 million and $2.7
millions for the thirteen and fifty-two weeks ended December 30,
2023, respectively.
(f) For the thirteen and fifty-two weeks ended December 28,
2024, the amortization of inventory step-up associated with the
acquisition of the ASSA business was zero and $0.3 million,
respectively, for the Water segment. For the thirteen and fifty-two
weeks ended December 30, 2023, the amortization of inventory
step-up associated with the acquisition of the ASSA business was
$1.4 million and $12.4 million, respectively, for the Water
segment.
(g) Asset impairment charges for the thirteen and fifty-two
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:
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
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.
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version on businesswire.com: https://www.businesswire.com/news/home/20250206609529/en/
INVESTOR AND MEDIA CONTACT: Leigh Avsec 847-484-4211
Investor.Questions@fbin.com
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