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
January 12, 1998 (January 12, 1998)
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Date of Report (Date of earliest event reported)
FORTUNE 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 January 12, 1998 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 January 12, 1998.
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.
FORTUNE BRANDS, INC.
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(Registrant)
By C. P. Omtvedt
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C. P. Omtvedt
Senior Vice President and
Chief Accounting Officer
Date: January 12, 1998
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EXHIBIT INDEX
Sequentially
Exhibit Numbered Page
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20. Press release of Registrant dated
January 12, 1998.
EXHIBIT 20
NEWS RELEASE
NEWS RELEASE
Fortune Brands, Inc., 1700 East Putnam Avenue, Old Greenwich, CT 06870
NEWS RELEASE
Media Relations: Investor Relations:
Roger W. W. Baker Daniel A. Conforti
(203)698-5148 (203)698-5132
FORTUNE BRANDS EXPECTS 13-15%
PRO FORMA E.P.S. GROWTH IN 1998, FOLLOWING STRONG 1997
Old Greenwich, CT, January 12, 1998 -- Fortune Brands, Inc. (NYSE-
FO), the international consumer products company, will announce
this morning that it anticipates excellent pro forma earnings
growth in 1998, following a strong increase in 1997.
Speaking at a Goldman Sachs Consumer Products Conference at
Turnberry Isle, Florida, Fortune Brands Chairman and Chief
Executive Officer Thomas C. Hays will indicate that "momentum was
strong in the fourth quarter across all our brand groups" and
that 1997 pro forma earnings per share will be "in line with
consensus estimates in the range of $1.48 (diluted), which would
represent a 16% increase over 1996."
Hays will note that the Company's long-term earnings goal is
to achieve E.P.S. growth in the range of 13-15%, assuming a
satisfactory economic and pricing environment. "That's also our
goal for 1998, compared to pro forma 1997. We expect to achieve
that growth despite modest negative impact of currency, assuming
no further erosion in exchange rates.
"Overall," Hays will add, "we currently expect a modestly
adverse translation impact in 1998 -- around $10 million, pre-
tax, or about 3 cents a share. That's less than 2% of consensus
estimates for the year."
Hays will state that Fortune Brands' strong growth outlook
is supported by the Company's powerful consumer brands,
tremendous financial strength and a tight strategic focus on
three "essentials" -- revenue growth, cost initiatives and asset
management.
Cost initiatives include substantial restructuring actions
initiated during 1997. "As the year progressed," Hays added, "we
were able to identify even greater opportunities than we
initially projected, so we expect that the restructuring will
result in a full-year pre-tax charge approximating $295 million,
and annualized savings will be in excess of $50 million. We will
begin realizing much of these savings in 1998, and all will be in
place by 1999. We expect to plow back much of these savings to
support the future growth of our brands, but these aggressive
steps add to our confidence that we can achieve our long-term 13-
15% E.P.S. growth goal." About 30% of the $295 million charge
will result in cash expenditures. Overall, the cost initiatives
are expected to produce continued margin expansion.
Hays will state that the Company's long-term E.P.S. growth
goal is premised on sales growth of 6-7%, driven by unit growth,
new products, international growth and very modest pricing
assumptions, but no assumed benefit from future acquisitions.
With the benefit of operating leverage and the 1997 restructuring
initiatives, the Company's goal is to convert that 6-7% sales
growth into high single-digit growth at the operating company
contribution line. Long-term brand group goals are 7%+ sales and
high single-digit contribution growth for the home and office
brands; double-digit sales and contribution growth for the golf
brands; and, for the distilled spirits brands, modest sales
growth and mid-single-digit contribution growth, but
significantly faster growth in net income.
Hays will also note that the debt-to-capital ratio was just
21% at the end of the third quarter, well below the Company's
long-term target debt-to-capital ratio in the thirties. The
Company has indicated that, from time to time, it may go outside
this range based on opportunities. The Company's long-term
target debt rating is the "A" category.
* * * *
Fortune Brands, Inc. is an international consumer products
company with headquarters in Old Greenwich, Connecticut. Its
operating companies have powerhouse brands and leading market
positions. Home and office products consist of hardware and home
improvement brands -- including Moen faucets, Master locks and
Aristokraft cabinets sold by units of MasterBrand Industries --
and office products brands -- including ACCO World Corporation's
Day-Timer and Swingline. Acushnet Company's golf brands include
Titleist, Cobra and Foot-Joy. Major distilled spirits brands
sold by units of JBB Worldwide, Inc. include Jim Beam and Knob
Creek Bourbon, DeKuyper cordials and Whyte & Mackay Scotch.
* * *
This press release contains statements relating to future
results, which are forward-looking statements as that term is
defined in the Private Securities Litigation Reform Act of 1995.
Actual results may differ materially from those projected as a
result of certain risks and uncertainties, including but not
limited to changes in general economic conditions, foreign
exchange rate fluctuations, competitive product and pricing
pressures, the impact of excise tax increases with respect to
distilled spirits, regulatory developments, the uncertainties of
litigation, as well as other risks and uncertainties detailed
from time to time in the Company's Securities and Exchange
Commission filings.
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