The chief executive officer of Fortune Brands Home & Security (FBHS)--the day-old corporate spinoff whose brands include MasterBrand cabinets, Moen faucets, Simonton windows, Therma-Tru entry doors, and Master Lock--says the company begins life strong, profitable, and contemplating acquisitions once the housing market recovers.
"We restructured our business early, so by the end of 2009 we were complete [with the changes] and generating profits," Christoper Klein told ProSales in an interview. "... We have been growing and investing in organic growth. ... We plan on expanding in terms of adjacent markets and maybe some acquisition markets. We see ourselves as at the bottom of the market, and that's not a bad time to be investing."
FBHS was officially spun off late Monday from its former parent, Fortune Brands, which from now on will focus on its spirits units under the Beam Inc. corporate name. The $3.2 billion company started trading today on the New York Stock Exchange with the symbol FBHS, and will ring open the exchange's trading session on Friday.
The change comes two months after Fortune Brands said its former home and security unit's income fell 14.8% in the second quarter from the year-earlier period even though sales rose 1.3% to $889.7 million. At that time, company officials raised their level of optimism for the second half of 2011 by saying economic conditions would be flat vs. the same period last year. That's an improvement from earlier, when it had forecast weaker conditions in the fall and winter.
Klein said FBHS hasn't updated that guidance and noted that the new company's first call with equity analysts will occur at the end of this month. But he added that conditions in general haven't improved.
The firm's earnings reports will include income by business segments, he said.
A press release issued earlier today quoted Klein as saying "Our brands, and of course our customers and consumers, will benefit from the focus we can bring to our business as an independent company." Klein told ProSales that in the past, the home and security unit had never had problems getting its top priorities funded but did have to fight with other Fortune units on secondary initiatives.
"Going forward, as a standalone company, our priorities will be our priorities," he said. "...We have a bank facility. And we have the resources."
Though each of FBHS' major brands operates in a different sector, Klein noted they all are "consumer-facing products" that require a homeowner's input to make the final choice. FBHS gets 26% of its revenues from big-box home centers, 31% from wholesalers (Ferguson is an example), 14% from lumberyards and kitchen/bath dealers, and 8% from all other kinds of retailers.