FAIRHAVEN – The Acushnet Co., the golf-products division of Deerfield, Ill.-based consumer products company Fortune Brands Inc. (NYSE: FO), “delivered its second-best sales year on record [in 2008], benefiting from new-product development and double-digit growth in Asian markets,” Fortune Chairman and Chief Executive Officer Bruce A. Carbonari said in the parent company’s annual report.
The golf division – whose brands include Cobra, FootJoy, Pinnacle and Titleist – posted annual operating income of $125.3 million, down 1.9 percent from 2007’s $165.5 million, on sales that fell 2.6 percent to $1.37 billion.
For the three months ended Dec. 31, Acushnet posted an operating loss of $18.3 million, or nearly three times its 2007 fourth-quarter loss of $6.7 million, on division sales that fell 13.4 percent to $212.2 million.
“Full-year golf operating income was impacted by brand investment, higher commodities costs and lower volumes,” Carbonari said. “While golf results in the seasonally smallest fourth quarter reflected soft industry demand and adverse operating leverage, we benefited from strong sell-in for new advanced-technology Titleist golf clubs.”
Fortune Brands yesterday posted annual net income of $317.1 million, a 58.4 percent decline from its 2007 profit of $762.6 million, on revenue that fell 11.1 percent to $7.61 billion. Earnings fell to $2.06 cents per diluted common share from the previous year’s $4.87 per share.
Its Fortune Brands Home & Hardware LLC division – whose brands include Aristokraft, Omega Diamond and Kitchen Craft cabinetry plus Moen faucets – posted an operating loss of $465.6 million, compared with 2007 income of $503.0 million, on sales that fell 17.4 percent to $3.76 billion. The company’s distilled-spirits division, led by Beam Global Spirits & Wine Inc. posted operating income of $543.7 million, a 29.1 percent decline from 2007’s $766.7 million, on sales that fell 4.8 percent to $2.48 billion.
Dividends of 42 cents per share on the company’s common stock and 66.75 cents per share of the company’s $2.67 Convertible Preferred Stock were payable Dec. 10 to shareholders at the close of business Nov. 10. (READ MORE)
For the fourth quarter, the parent company posted a loss of $275.3 million, compared with its 2007 fourth-quarter profit of $201.5 million, on sales that fell 19.4 percent to $1.79 billion.
“Even with the more challenging fourth-quarter environment … our full-year results were within our earnings target range, albeit towards the low end. We also achieved our free cash flow target, before a $63 million after-tax year-end contribution to our pension plans,” Carbonari said. “We’re planning for the global economy to get worse before it gets better,” he added, “and we expect the challenges of 2008 to continue throughout 2009.”
Fortune Brands is projecting 2009 full-year earnings of $2 to $2.50 per diluted share, excluding charges, on free cash flow of about $100 million to $200 million after dividends and net capital expenditures.
“While we anticipate the home products market will decline in the range of 20 percent, Fortune Brands will benefit from our significant presence in the relatively recession-resistant distilled spirits category, which now provides nearly 60 percent of our operating income before charges,” Carbonari said.
“While we can’t control the health of our markets or headwinds such as adverse foreign exchange, we can control how we compete,” he added.
“The actions we’re taking position Fortune Brands well to navigate these challenging times and to return to strong growth when the economy recovers.”
Fortune Brands Inc. (NYSE: FO), a member of the S&P 500 Index and the MCSI World Index, is a leading consumer brands company. Its businesses include the Fairhaven-based Acushnet Co. – a maker of golf equipment and apparel under brands including Cobra, FootJoy, Pinnacle and Titleist – as well as manufactures and marketers of distilled spirits and home and hardware products. For more information, go to www.FortuneBrands.com or www.AcushnetCompany.com.
