LINCOLNSHIRE, IL. – Oct. 23, 2004 – Fortune Brands, Inc. (NYSE: FO), a leading consumer brands company and the parent company of Acushnet, the owner of golf brands – Titleist, FootJoy, Cobra and Pinnacle – has reported record earnings per share that grew at a strong double-digit rate in the third quarter of 2004.
Share-gain initiatives, including successful new products and expanded customer relationships, drove strong underlying sales growth. High-return acquisitions, supply-chain efficiencies and the successful profit recovery program in the office products business further strengthened the company's performance.
Net income increased 55% to $226.8 million, and earnings per diluted share grew to $1.52, up 57% from $0.97 a year ago. In addition to strong operating performance, comparisons also benefited from a substantial tax-related credit and lower restructuring-related charges.
Diluted EPS before charges/gains was $1.20, up 20% from $1.00 and two cents above the mean estimate of Wall Street securities analysts.
Net sales were $1.8 billion, up 14% to a record. Sales benefited 9% from the net impact of acquisitions, favorable foreign exchange and lower excise taxes.
· Operating income was $285.8 million, up 20%.
· Return on equity was 25.3%.
· Return on invested capital was 15.6%.
· Year-to-date share repurchases total 3.8 million shares.
"Fortune Brands delivered another very strong quarter of broad-based growth as we continued to gain share in key markets and create value for our shareholders," said Fortune Brands chairman & CEO Norm Wesley.
“We're driving sales growth and gaining share in a number of ways," Wesley continued. “That includes successful investments to grow market-leading products such as the Titleist Pro V1 golf ball, new Moen faucets, and Jim Beam bourbon. As a partner of choice for major customers, we're benefiting from the rollout of successful kitchen and bath cabinet lines and entry doors at additional home center stores, as well as expanded relationships with large builders, dealers and wholesalers. Reflecting solid execution, we're successfully growing the high-return Therma-Tru doors brand that we acquired last November.
“And with a sharpened marketplace focus, our office products brands grew sales for the third quarter in a row. Beyond winning in the marketplace, we also added value for shareholders in the quarter with another double-digit dividend increase. We're pleased that we delivered such strong results in spite of challenging comparisons and higher commodities costs, which we were able to offset with higher volumes, supply chain efficiencies and select price increases.”
“Fortune Brands remains on track for another excellent year,” Wesley added. “For the fourth quarter, we're targeting to comfortably achieve double-digit growth in diluted EPS before charges/gains. For the full year 2004, we expect to further extend our track record of consistently strong results and improved returns. Our long-term goal is to grow diluted earnings per share at a double-digit rate, and we now expect that diluted EPS before charges/gains for 2004 will grow by 20% or more. We also now expect that free cash flow for 2004 will be near the top of our $400-450 million target range.”
Fortune Brands, Inc. is a $7 billion leading consumer brands company. Its operating companies have premier brands and leading market positions in home and hardware products, spirits and wine, golf equipment and office products.
For further details, please visit www.fortunebrands.com.
Contact:
Media Relations:
Clarkson Hine
(847) 484-4415
Investor Relations:
Tony Diaz
(847) 484-4410
