Fortune Brands, Inc. reported that its The Acushnet Company golf business, which includes the Footjoy, Cobra, Titleist, and Pinnacle brands, saw second quarter sales increase 9.7% to $407.9 million from $371.8 million in the year-ago period. FO said the increase was on top of a double-digit increase last year. YTD sales are up 14.2%. Operating income in Q2 increased 8.5% to $73.7 million from $68.5 million in Q2 last year.
The company said that recent data show that YTD golf rounds are up 3% versus year. They said they also increased golf ball market share by a point at on- and off-course golf shops. Sales of golf clubs were flat versus a 20% increase in the year-ago period.
Acushnet expects to see high-single-digit growth in operating income for the year, up a bit from its previous forecast.
Overall Fortune Brands Q2 net income was $167.8 million, or $1.11 per diluted share, as compared to $176.7 million, or $1.18 per diluted share in the year ago quarter. Comparisons were adversely impacted by a substantial tax credit in 2003 and, to a lesser degree, a higher level of restructuring-related charges in 2004.
Excluding special items in both years, diluted EPS before charges/gains was $1.28, up 24% from $1.03, and 3 cents above the mean estimate of Wall Street securities analysts.
Net sales were $1.89 billion, up 19%. Sales benefited 9% from the net impact of acquisitions, favorable foreign exchange and lower excise taxes. Operating income was $295.9 million, up 23%.
FORTUNE BRANDS, INC.
CONSOLIDATED STATEMENT OF INCOME
(In millions, except per share amounts)
(Unaudited)
Three Months Ended June 30,
2004 2003 % Change
Net Sales $1,889.5 $1,582.1 19.4
Cost of goods sold 1,041.3 855.8 21.7
Excise taxes on spirits and wine 65.1 71.3 (8.7)
Advertising, selling, general
and administrative expenses 451.9 391.3 15.5
Amortization of intangibles 8.3 4.7 76.6
Identifiable intangible write-
downs - 12.0 -
Restructuring
and restructuring-related items 27.0 6.6 309.1
Operating Income 295.9 240.4 23.1
Interest expense 21.7 18.6 16.7
Other (income) expense, net (7.5) (7.8) 3.8
Income taxes 109.7 49.0 123.9
Minority interests 4.2 3.9 7.7
Net Income 167.8 176.7 (5.0)
Earnings Per Common Share
Basic 1.15 1.22 (5.7)
Diluted 1.11 1.18 (5.9)
NET SALES AND OPERATING INCOME
Three Months Ended June 30,
2004 2003 % Change
Net Sales
Home and Hardware $952.8 $704.0 35.3
Spirits and Wine 260.0 253.6 2.5
Golf 407.9 371.8 9.7
Office 268.8 252.7 6.4
Total $1,889.5 $1,582.1 19.4
Operating Income
Home and Hardware $161.2 $119.4 35.0
Spirits and Wine 75.9 69.5 9.2
Golf 73.7 68.5 7.6
Office 4.0 (3.1) 229.0
Corporate expenses 18.9 13.9 36.0
Total $295.9 $240.4 23.1
Operating Income Before Charges (a)
Home and Hardware $163.3 $119.4 36.8
Spirits and Wine 75.9 69.5 9.2
Golf 76.5 70.5 8.5
Office 26.1 13.5 93.3
Less:
Corporate expenses 18.9 13.9 36.0
Identifiable intangible write-downs - 12.0 -
Restructuring
and restructuring-related items 27.0 6.6 309.1
Operating Income $295.9 $240.4 23.1
