UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
June 13, 1995 (June 13, 1995)
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Date of Report (Date of earliest event reported)
AMERICAN BRANDS, INC.
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(Exact name of registrant as specified in its charter)
Delaware 1-9076 13-3295276
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
l700 East Putnam Avenue, Old Greenwich, Connecticut 06870-0811
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (203) 698-5000
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INFORMATION TO BE INCLUDED IN THE REPORT
Item 5. Other Events.
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Registrant's press release dated June 13, 1995 is filed herewith as
Exhibit 20 and is incorporated herein by reference.
Item 7. Financial Statements and Exhibits.
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(c) Exhibits.
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20. Press release of Registrant dated June 13, 1995.
This Current Report shall not be construed as a waiver of the right to
contest the validity or scope of any or all of the provisions of the Securities
Exchange Act of 1934 under the Constitution of the United States, or the
validity of any rule or regulation made or to be made under such Act.
SIGNATURE
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Pursuant to the requirements of the Securities Exchange Act of 1934,
as amended, the Registrant has duly caused this Current Report to be signed on
its behalf by the undersigned thereunto duly authorized.
AMERICAN BRANDS, INC.
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(Registrant)
By Gilbert L. Klemann, II
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Gilbert L. Klemann, II
Senior Vice President
and General Counsel
Date: June 13, 1995
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EXHIBIT INDEX
Sequentially
Exhibit Numbered Page
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20. Press release of Registrant dated
June 13, 1995.
Exhibit 20
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FOR IMMEDIATE RELEASE
Contact: Roger W. W. Baker
(203) 698-5148
Daniel A. Conforti
(203) 698-5132
AMERICAN BRANDS AFFIRMS STRONG COMMITMENT TO GROWTH
AT INVESTMENT CONFERENCE
Hays Cites Plans for Internal Growth,
Share Purchases and Possible Acquisitions
Old Greenwich, CT, June 13, 1995 -- Speaking at a Company-hosted
conference in Old Greenwich today, attended by more than a
hundred members of the investment community, American Brands'
Chairman and Chief Executive Officer Thomas C. Hays, said: "The
new American Brands is well positioned to deliver superior E.P.S.
growth.
"We have a powerful combination of leading brands, a
management team with a passion for growth, as well as a strong
balance sheet and tremendous cash flow -- all of which gives us
tremendous flexibility and resources to achieve excellent growth
in earnings per share. We've also been making aggressive stock
purchases. And we're on the lookout for affordable, high-return,
add-on acquisitions that will strengthen our operations and
enhance our prospects, though we have no timetable to effect such
acquisitions."
In reaffirming the Company's long-term goal to achieve
compound earnings per share growth in the range of 10%, Hays
added: "Our foremost priority for our stockholders is to
accelerate and sustain earnings per share growth. If we are
successful in achieving this, we believe that the market should
reward us with a higher multiple and a valuation that better
reflects our performance and future prospects."
In each of its operating categories -- hardware and home
improvement products, office products, golf and leisure products,
distilled spirits, and international tobacco -- American Brands'
major brands are number one or number two in their markets.
"Fifteen had sales over $100 million last year," Hays stated,
"and many others are market leaders with great prospects."
Hays noted that an aggressive share purchase plan totaling
20 million shares, more than 15 million of which have been
purchased to date, will also contribute to E.P.S. growth. In
addition, holders of the $200 million 5.75% Convertible
Debentures due April 2005 exercised a one-time put two months
ago, which had the effect of reducing fully diluted shares by 5.1
million. So fully diluted shares have been reduced by more than
20 million, or about 10%, thus far in 1995.
"When we complete the 20 million share authorization, we may
determine that further stock purchases are in the best interest
of our shareholders," Hays added. "At this point, in addition to
the 20 million shares authorized in connection with recent
dispositions, we have the authority to purchase an additional 5
million shares this year, though no decision regarding additional
purchases has been made."
The strong financial position of American Brands is based on
tremendous cash flow, augmented by proceeds that totaled nearly
$2.2 billion from the sale of The American Tobacco Company and
Franklin Life in December 1994 and January 1995, respectively.
As part of the sale of American Tobacco, the Company received an
indemnity against any pending and future product liability
matters relating to American Tobacco's business.
In a specific reference to the Company's second quarter
prospects, Hays stated that the overall outlook is positive.
"However, consistent with the general slowdown reported at
leading home centers and reflecting inventory reductions by the
trade, orders at MasterBrand have softened significantly during
the second quarter. That softening and increased spending on
growth initiatives will result in lower hardware and home
improvement contribution in the quarter. "Nevertheless," Hays
noted, "MasterBrand's contribution for the six months should be
slightly ahead of last year's. And if the recent decline in
interest rates has a favorable impact on the economy in the
second half, MasterBrand is well positioned to resume solid long-
term growth, with full-year contribution comfortably ahead of
last year's."
Hays concluded his remarks about the second quarter by
stating that even with an effective tax rate expected to
approximate 36-37% for the quarter, compared with the unusually
low 30.3% effective rate (25.7% from ongoing operations, which
excludes The American Tobacco Company) in last year's second
quarter, earnings per share for American Brands should be
modestly ahead of the 55 cents (fully diluted, stated on an
ongoing operations basis) that the Company earned in the second
quarter last year.
Hays also reaffirmed the Company's profit growth
expectations for the full year. Last year, E.P.S. from ongoing
operations was $2.34 (fully diluted). "In January, we indicated
that we expected to exceed last year's 13% growth in earnings per
share from ongoing operations. We are on track to achieve that
objective.
"We continue to believe that our long-term growth goal is
realistic, assuming the key economies remain sound, the exchange
rate for the British pound remains reasonably stable and the
pricing environment is satisfactory."
Headquartered in Old Greenwich, Connecticut, American Brands
is a focused international consumer products company with
powerhouse brands and leading market positions in distilled
spirits, hardware and home improvement products, office products,
golf and leisure products, and international tobacco. Major
brands include Jim Beam and Old Grand-Dad bourbons, DeKuyper
cordials, Titleist, Pinnacle and Foot-Joy golf products, Moen
faucets, Master locks, Aristokraft cabinets, ACCO office products
including Day-Timer and Swingline, and Benson and Hedges and Silk
Cut cigarettes.
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6/13/95
