Fortune Brands Innovations, Inc 10-Q for FY2025 Q3
Fortune Brands Innovations, Inc. (FBIN)
About this 10-Q
Fortune Brands Innovations, Inc filed this 10-Q on October 30, 2025, covering the quarter ended September 27, 2025 (FY2025 Q3).
Headline figures
Quarter ended September 27, 2025, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $1.15B
- down 0.5% from $1.16B a year earlier
- Net income
- $70.8M
- down 48.2% from net income of $136.6M a year earlier
- Diluted EPS
- $0.59
- down 45.9% from $1.09 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission file number
(Exact name of Registrant as specified in its charter)
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(State or other jurisdiction of incorporation or organization) |
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(I.R.S. Employer Identification No.) |
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: (
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Accelerated filer |
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Non-accelerated filer |
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Smaller reporting company |
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Emerging growth company |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
The number of shares outstanding of the registrant’s common stock, par value $0.01 per share, at October 17, 2025 was
1
PART I. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS.
FORTUNE BRANDS INNOVATIONS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
For the Thirty-Nine and Thirteen Weeks Ended September 27, 2025 and September 28, 2024
(In millions, except per share amounts)
(Unaudited)
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Thirty-Nine Weeks Ended September 27, 2025 |
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Thirty-Nine Weeks Ended September 28, 2024 |
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Thirteen Weeks Ended September 27, 2025 |
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Thirteen Weeks Ended September 28, 2024 |
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Net sales |
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$ |
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$ |
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Cost of products sold |
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Selling, general and administrative expenses |
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Amortization of intangible assets |
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Asset impairment charges |
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Restructuring charges |
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Operating income |
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Interest expense |
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Other (income) expense, net |
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Income before taxes |
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Income tax |
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Net income |
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$ |
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$ |
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$ |
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Basic earnings per common share |
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$ |
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$ |
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$ |
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Diluted earnings per common share |
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$ |
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$ |
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Comprehensive income |
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$ |
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$ |
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$ |
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$ |
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See notes to condensed consolidated financial statements.
2
FORTUNE BRANDS INNOVATIONS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions)
(Unaudited)
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September 27, 2025 |
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December 28, 2024 |
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Assets |
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Current assets |
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Cash and cash equivalents |
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$ |
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$ |
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Accounts receivable less allowance for credit losses of $ |
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Inventories |
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Other current assets |
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Total current assets |
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Property, plant and equipment, net |
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Operating lease assets |
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Goodwill |
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Other intangible assets, net of accumulated amortization |
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Assets held for sale |
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Other assets |
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Total assets |
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$ |
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$ |
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Liabilities and equity |
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Current liabilities |
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Short-term debt |
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$ |
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$ |
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Accounts payable |
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Other current liabilities |
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Total current liabilities |
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Long-term debt |
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Deferred income taxes |
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Accrued defined benefit plans |
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Operating lease liabilities |
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Other non-current liabilities |
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Total liabilities |
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Stockholders' equity |
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Common stock(a) |
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Paid-in capital |
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Accumulated other comprehensive income |
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Retained earnings |
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Treasury stock |
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Total stockholders' equity |
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Total liabilities and equity |
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$ |
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$ |
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(a)
See notes to condensed consolidated financial statements.
3
FORTUNE BRANDS INNOVATIONS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Thirty-Nine Weeks Ended September 27, 2025 and September 28, 2024
(In millions)
(Unaudited)
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Thirty-Nine Weeks Ended September 27, 2025 |
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Thirty-Nine Weeks Ended September 28, 2024 |
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Operating activities |
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Net income |
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$ |
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$ |
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Non-cash adjustments: |
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Depreciation |
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Amortization of intangibles |
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Non-cash lease expense |
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Stock-based compensation |
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Deferred taxes |
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Asset impairment charges |
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Other operating activities, net |
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Changes in operating assets and liabilities: |
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Increase in accounts receivable |
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(Increase) decrease in inventories |
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Increase (decrease) in accounts payable |
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(Increase) decrease in other assets |
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Decrease in accrued expenses and other liabilities |
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Decrease in accrued taxes |
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Net cash provided by operating activities |
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Investing activities |
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Capital expenditures (a) |
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Cost of acquisitions, net of cash acquired |
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Other investing activities, net |
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Net cash used in investing activities |
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( |
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Financing activities |
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Repayment of short-term debt |
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Issuance of long-term debt |
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Repayment of long-term debt |
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Proceeds from the exercise of stock options |
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Treasury stock purchases |
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Employee withholding taxes related to stock-based compensation |
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Dividends to stockholders |
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Other financing activities, net |
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( |
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( |
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Net cash used in financing activities |
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( |
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Effect of foreign exchange rate changes on cash |
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Net decrease in cash and cash equivalents |
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$ |
( |
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$ |
( |
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Cash, cash equivalents and restricted cash(b) at beginning of period |
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$ |
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$ |
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Cash, cash equivalents and restricted cash(b) at end of period |
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$ |
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$ |
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See notes to condensed consolidated financial statements.
4
FORTUNE BRANDS INNOVATIONS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
For the Thirty-Nine and Thirteen Weeks Ended September 27, 2025 and September 28, 2024
(In millions)
(Unaudited)
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Common |
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Paid-In |
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Accumulated |
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Retained |
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Treasury |
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Total |
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Balance at December 30, 2023 |
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$ |
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$ |
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$ |
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$ |
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$ |
( |
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$ |
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Comprehensive income: |
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Net income |
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- |
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- |
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- |
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- |
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Other comprehensive income |
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- |
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- |
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( |
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- |
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- |
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( |
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Stock options exercised |
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- |
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- |
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- |
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- |
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Stock-based compensation |
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- |
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- |
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- |
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( |
) |
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Treasury stock purchases |
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- |
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- |
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- |
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- |
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( |
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( |
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Dividends ($ |
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- |
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- |
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- |
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( |
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- |
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( |
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Balance at September 28, 2024 |
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$ |
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$ |
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$ |
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$ |
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$ |
( |
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$ |
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Balance at December 28, 2024 |
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$ |
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$ |
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$ |
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$ |
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$ |
( |
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$ |
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Comprehensive income: |
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Net income |
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- |
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- |
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- |
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- |
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Other comprehensive income |
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- |
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- |
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- |
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- |
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Stock options exercised |
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- |
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- |
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- |
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- |
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Stock-based compensation |
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- |
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- |
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- |
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( |
) |
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Treasury stock purchases |
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- |
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- |
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- |
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- |
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( |
) |
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( |
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Dividends ($ |
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- |
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- |
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- |
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( |
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- |
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( |
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Balance at September 27, 2025 |
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$ |
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$ |
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$ |
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$ |
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$ |
( |
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$ |
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Common |
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Paid-In |
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Accumulated |
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Retained |
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Treasury |
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Total |
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Balance at June 29, 2024 |
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$ |
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$ |
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$ |
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$ |
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$ |
( |
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$ |
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Comprehensive income: |
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Net income |
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- |
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- |
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- |
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- |
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Other comprehensive income |
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- |
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- |
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- |
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- |
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Stock options exercised |
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- |
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- |
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- |
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- |
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Stock-based compensation |
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- |
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- |
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- |
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( |
) |
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Treasury stock purchases |
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- |
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- |
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- |
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- |
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( |
) |
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( |
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Dividends ($ |
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- |
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- |
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- |
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( |
) |
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- |
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( |
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Balance at September 28, 2024 |
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$ |
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$ |
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$ |
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$ |
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$ |
( |
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$ |
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Balance at June 28, 2025 |
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$ |
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$ |
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$ |
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$ |
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$ |
( |
) |
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$ |
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Comprehensive income: |
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Net income |
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- |
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- |
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- |
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- |
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Other comprehensive income |
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- |
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- |
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( |
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- |
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- |
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( |
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Stock options exercised |
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- |
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- |
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- |
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- |
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Stock-based compensation |
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- |
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- |
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- |
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( |
) |
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Treasury stock purchases |
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- |
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- |
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- |
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- |
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Dividends ($ |
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- |
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- |
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- |
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( |
) |
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- |
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( |
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Balance at September 27, 2025 |
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$ |
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$ |
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$ |
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$ |
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$ |
( |
) |
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$ |
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See notes to condensed consolidated financial statements.
5
FORTUNE BRANDS INNOVATIONS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
FORTUNE BRANDS INNOVATIONS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Presentation and Principles of Consolidation
The Company is a leading home, security and digital company whose purpose is to elevate every life by transforming spaces into havens. The Company makes innovative products for residential and commercial environments, with a growing focus on digital solutions and products that add luxury, contribute to safety and enhance sustainability. References to “Fortune Brands,” “the Company,” “we,” “our” and “us” refer to Fortune Brands Innovations, Inc. and its consolidated subsidiaries as a whole, unless the context otherwise requires.
The condensed consolidated financial statements and notes are presented pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and do not contain certain information included in our annual audited consolidated financial statements and notes. The December 28, 2024 condensed consolidated balance sheet was derived from our audited consolidated financial statements, but does not include all disclosures required by U.S. generally accepted accounting principles (“GAAP”). This Quarterly Report on Form 10-Q should be read in conjunction with the audited consolidated financial statements and notes included in our Annual Report on Form 10-K for the year ended December 28, 2024.
The condensed consolidated balance sheet as of September 27, 2025, the related condensed consolidated statements of comprehensive income and equity for the thirty-nine weeks and thirteen weeks ended September 27, 2025, the related condensed consolidated statements of comprehensive income and equity for the thirty-nine weeks and thirteen weeks ended September 28, 2024, and the related condensed consolidated statements of cash flows for the thirty-nine weeks ended September 27, 2025 and September 28, 2024 are unaudited. The presentation of these financial statements requires us to make estimates and assumptions that affect reported amounts and related disclosures. Actual results could differ from those estimates. In the opinion of management, all adjustments necessary for a fair statement of the financial statements have been included. Interim results may not be indicative of results for a full year.
2. Recently Issued Accounting Standards
In December 2023, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2023-09 which requires expanded disclosure of the effective tax rate reconciliation and income taxes paid. ASU 2023-09 is effective for annual periods beginning after December 15, 2024. We will adopt this ASU for the annual period ending December 27, 2025, and it will only impact our disclosures with no impact to our financial statements or results of operations.
In November 2024, the FASB issued ASU 2024-03 which requires an entity to disclose the amounts of purchases of inventory, employee compensation, depreciation, and intangible asset amortization included in each relevant expense caption. It also requires an entity to include certain amounts that are required to be disclosed under current GAAP in the same disclosure. Additionally, it requires an entity to disclose a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively, and to disclose the total amount of selling expenses and, in annual reporting periods, an entity’s definition of selling expenses. The ASU is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027, with early adoption permitted. An entity may apply the amendments prospectively for reporting periods after the effective date or retrospectively to any or all prior periods presented in the financial statements. While this ASU will impact only our disclosures and not our financial statements or results of operations, we are currently evaluating when we will adopt the ASU.
In September 2025, the FASB issued ASU 2025-06 which amends guidance related to the accounting for internal-use software development costs. The amendments are intended to modernize the recognition and capitalization framework to reflect current software development practices, including iterative and agile methodologies, by removing references to "development stages" and clarifying the threshold to begin capitalizing costs. The ASU is effective for fiscal years beginning after December 15, 2027 and interim periods within those fiscal years, with early adoption permitted. An entity may apply the amendments prospectively, retrospectively, or utilizing a modified transition approach. We are in the process of evaluating the impact of the ASU on our consolidated financial statements and related disclosures.
6
FORTUNE BRANDS INNOVATIONS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
3. Balance Sheet Information
Supplemental information on our balance sheets is as follows:
(In millions) |
|
September 27, 2025 |
|
|
December 28, 2024 |
|
||
Inventories: |
|
|
|
|
|
|
||
Raw materials and supplies |
|
$ |
|
|
$ |
|
||
Work in process |
|
|
|
|
|
|
||
Finished products |
|
|
|
|
|
|
||
Total inventories |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
Property, plant and equipment, gross |
|
$ |
|
|
$ |
|
||
Less: accumulated depreciation |
|
|
|
|
|
|
||
Property, plant and equipment, net |
|
$ |
|
|
$ |
|
||
During the thirteen weeks ended September 27, 2025, we determined one of our assets, with a carrying value of $
4. Acquisitions
SpringWell
On February 29, 2024, we acquired
7
FORTUNE BRANDS INNOVATIONS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
5. Goodwill and Identifiable Intangible Assets
We had goodwill of $
(In millions) |
|
Water |
|
|
Outdoors |
|
|
Security |
|
|
Total |
|
||||
Goodwill at December 28, 2024(a) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Year-to-date foreign currency translation adjustments |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Goodwill at September 27, 2025(a) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
(a)
The gross carrying value and accumulated amortization by class of identifiable intangible assets as of September 27, 2025 and December 28, 2024 were as follows:
(In millions) |
|
As of September 27, 2025 |
|
|
As of December 28, 2024 |
|
||||||||||||||||||
|
|
Gross |
|
|
Accumulated |
|
|
Net |
|
|
Gross |
|
|
Accumulated |
|
|
Net |
|
||||||
Indefinite-lived tradenames |
|
$ |
|
|
$ |
- |
|
|
$ |
|
|
$ |
|
|
$ |
- |
|
|
$ |
|
||||
Amortizable intangible assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Tradenames |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||
Customer and contractual relationships |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
||||
Patents/proprietary technology |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
||||
Total |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
||||
Total intangible assets |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||
We had net identifiable intangible assets of $
Amortizable identifiable intangible assets, principally customer relationships, are subject to amortization over their estimated useful life, ranging from
6. External Debt and Financing Arrangements
Senior Notes
In June 2025, we repaid our
At September 27, 2025, the Company had aggregate outstanding senior notes in the principal amount of $
|
|
|
|
|
|
|
|
Net Carrying Value |
|
||||||
(in millions) |
Principal Amount |
|
|
Issuance Date |
|
Maturity Date |
|
September 27, 2025 |
|
|
December 28, 2024 |
|
|||
4.000% Senior Notes |
$ |
|
|
|
|
$ |
|
|
$ |
|
|||||
3.250% Senior Notes |
$ |
|
|
|
|
|
|
|
|
|
|||||
4.000% Senior Notes |
$ |
|
|
|
|
|
|
|
|
|
|||||
4.500% Senior Notes |
$ |
|
|
|
|
|
|
|
|
|
|||||
5.875% Senior Notes |
$ |
|
|
|
|
|
|
|
|
|
|||||
Total Senior Notes |
|
|
|
|
|
|
|
$ |
|
|
$ |
|
|||
Less: current portion |
|
|
|
|
|
|
|
|
|
|
|
|
|||
Total Senior Notes long-term |
|
|
|
|
|
|
|
$ |
|
|
$ |
|
|||
8
FORTUNE BRANDS INNOVATIONS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Credit Facilities
In August 2022, the Company entered into a third amended and restated $
We currently have uncommitted bank lines of credit in China, which provide for unsecured borrowings for working capital of up to $
Commercial Paper
The Company operates a commercial paper program (the “Commercial Paper Program”) pursuant to which the Company may issue unsecured commercial paper notes. The Company’s Revolving Credit Agreement is the liquidity backstop for the repayment of any notes issued under the Commercial Paper Program, and as such, borrowings under the Commercial Paper Program are included in Long-term debt in the condensed consolidated balance sheets. Amounts available under the Commercial Paper Program may be borrowed, repaid and re-borrowed, with the aggregate principal amount outstanding at any time, including borrowings under the Revolving Credit Agreement, not to exceed $
7. Financial Instruments
We do not enter into financial instruments for trading or speculative purposes. We principally use financial instruments to reduce the impact of changes in foreign currency exchange rates and commodities used as raw materials in our products. The principal derivative financial instruments we enter into on a routine basis are foreign exchange contracts. Derivative financial instruments are recorded at fair value in the consolidated balance sheet and are reflected on a gross basis. We have not entered into any master netting arrangements. The counterparties to derivative contracts are major financial institutions. We are subject to credit risk on these contracts equal to the fair value of these instruments. Management currently believes that the risk of incurring material losses is unlikely and that the losses, if any, would be immaterial to the Company.
Raw materials used by the Company are subject to price volatility caused by weather, supply conditions, geopolitical and economic variables, and other unpredictable external factors. As a result, from time to time, we enter into commodity swaps to manage the price risk associated with forecasted purchases of materials used in our operations. We account for these commodity derivatives as economic hedges or cash flow hedges. Changes in the fair value of economic hedges are immediately recognized in current period earnings.
We may be exposed to interest rate risk on existing debt or forecasted debt issuance. To mitigate this risk, we may enter into interest rate hedge contracts. There were
We may enter into foreign currency forward contracts to protect against foreign exchange risks associated with certain existing assets and liabilities, forecasted future cash flows, and net investments in foreign subsidiaries. Foreign exchange contracts related to forecasted future cash flows correspond to the periods of the forecasted transactions, which generally do not exceed
9
FORTUNE BRANDS INNOVATIONS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
We have entered into cross-currency swap contracts to hedge both our Canadian dollar and Chinese Yuan exposures of the Company's net investments in certain foreign subsidiaries. As of September 27, 2025, the notional value of the cross-currency swap contracts was $
For derivative instruments that are designated as fair value hedges, the gain or loss on the derivative instrument, as well as the offsetting loss or gain on the hedged item, are recognized on the same line of the consolidated statements of income. The changes in the fair value of cash flow hedges are reported in accumulated other comprehensive income and are recognized in the consolidated statements of income when the hedged item affects earnings.
The fair values of derivative instruments on the consolidated balance sheets as of September 27, 2025 and December 28, 2024 were as follows:
|
|
|
|
Fair Value |
|
|||||
(In millions) |
|
Location |
|
September 27, 2025 |
|
|
December 28, 2024 |
|
||
Assets: |
|
|
|
|
|
|
|
|
||
Foreign exchange contracts |
|
Other current assets |
|
$ |
|
|
$ |
|
||
Commodity contracts |
|
Other current assets |
|
|
|
|
|
|
||
Net investment hedges |
|
Other current assets |
|
|
|
|
|
|
||
Net investment hedges |
|
Other assets |
|
|
|
|
|
|
||
|
|
Total assets |
|
$ |
|
|
$ |
|
||
Liabilities: |
|
|
|
|
|
|
|
|
||
Foreign exchange contracts |
|
Other current liabilities |
|
$ |
|
|
$ |
|
||
Commodity contracts |
|
Other current liabilities |
|
|
|
|
|
|
||
|
|
Total liabilities |
|
$ |
|
|
$ |
|
||
10
FORTUNE BRANDS INNOVATIONS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The effects of derivative financial instruments on the statements of comprehensive income for the thirty-nine weeks ended September 27, 2025 and September 28, 2024 were as follows:
(In millions) |
|
Classification and Amount of Gain (Loss) |
|
|||||||||
|
|
Thirty-Nine Weeks Ended September 27, 2025 |
|
|||||||||
|
|
Cost of |
|
|
Interest |
|
|
Other income, net |
|
|||
|
$ |
|
|
$ |
|
|
$ |
|
||||
Gain (loss) on fair value hedging relationships |
|
|
|
|
|
|
|
|
|
|||
Foreign exchange contracts: |
|
|
|
|
|
|
|
|
|
|||
Hedged items |
|
|
- |
|
|
|
- |
|
|
|
|
|
Derivative designated as hedging instruments |
|
|
- |
|
|
|
- |
|
|
|
( |
) |
Gain on net investment hedging relationships |
|
|
|
|
|
|
|
|
|
|||
Gain (loss) on cash flow hedging relationships |
|
|
|
|
|
|
|
|
|
|||
Foreign exchange contracts: |
|
|
|
|
|
|
|
|
|
|||
of gain or (loss) reclassified from accumulated other comprehensive (loss) income into income |
|
|
|
|
|
- |
|
|
|
- |
|
|
Commodity contracts: |
|
|
|
|
|
|
|
|
|
|||
of gain or (loss) reclassified from accumulated other comprehensive (loss) income into income |
|
|
- |
|
|
|
- |
|
|
|
- |
|
Interest rate contracts: |
|
|
|
|
|
|
|
|
|
|||
of gain or (loss) reclassified from accumulated other comprehensive (loss) income into income |
|
|
- |
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|||
(In millions) |
|
Classification and Amount of Gain (Loss) |
|
|||||||||
|
|
Thirty-Nine Weeks Ended September 28, 2024 |
|
|||||||||
|
|
Cost of |
|
|
Interest |
|
|
Other income, net |
|
|||
|
$ |
|
|
$ |
|
|
$ |
|
||||
Gain (loss) on fair value hedging relationships |
|
|
|
|
|
|
|
|
|
|||
Foreign exchange contracts: |
|
|
|
|
|
|
|
|
|
|||
Hedged items |
|
|
- |
|
|
|
- |
|
|
|
|
|
Derivative designated as hedging instruments |
|
|
- |
|
|
|
- |
|
|
|
( |
) |
Gain on net investment hedging relationships |
|
|
|
|
|
|
|
|
|
|||
Gain (loss) on cash flow hedging relationships |
|
|
|
|
|
|
|
|
|
|||
Foreign exchange contracts: |
|
|
|
|
|
|
|
|
|
|||
of gain or (loss) reclassified from accumulated other comprehensive (loss) income into income |
|
|
|
|
|
- |
|
|
|
- |
|
|
Commodity contracts: |
|
|
|
|
|
|
|
|
|
|||
Amount of gain or (loss) reclassified from accumulated other comprehensive (loss) income into income |
|
|
- |
|
|
|
- |
|
|
|
- |
|
Interest rate contracts: |
|
|
|
|
|
|
|
|
|
|||
Amount of gain or (loss) reclassified from accumulated other comprehensive (loss) income into income |
|
|
- |
|
|
|
|
|
|
- |
|
|
11
FORTUNE BRANDS INNOVATIONS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The effects of derivative financial instruments on the statements of comprehensive income for the thirteen weeks ended September 27, 2025 and September 28, 2024 were as follows:
(In millions) |
|
Classification and Amount of Gain (Loss) |
|
|||||||||
|
|
Thirteen Weeks Ended September 27, 2025 |
|
|||||||||
|
|
Cost of |
|
|
Interest |
|
|
Other expense, net |
|
|||
|
$ |
|
|
$ |
|
|
$ |
|
||||
Gain (loss) on fair value hedging relationships |
|
|
|
|
|
|
|
|
|
|||
Foreign exchange contracts: |
|
|
|
|
|
|
|
|
|
|||
Hedged items |
|
|
- |
|
|
|
- |
|
|
|
( |
) |
Derivative designated as hedging instruments |
|
|
- |
|
|
|
- |
|
|
|
( |
) |
Gain on net investment hedging relationships |
|
|
|
|
|
|
|
|
|
|||
Gain (loss) on cash flow hedging relationships |
|
|
|
|
|
|
|
|
|
|||
Foreign exchange contracts: |
|
|
|
|
|
|
|
|
|
|||
of gain or (loss) reclassified from accumulated other comprehensive (loss) income into income |
|
|
|
|
|
- |
|
|
|
- |
|
|
Commodity contracts: |
|
|
|
|
|
|
|
|
|
|||
of gain or (loss) reclassified from accumulated other comprehensive (loss) income into income |
|
|
- |
|
|
|
- |
|
|
|
- |
|
Interest rate contracts: |
|
|
|
|
|
|
|
|
|
|||
of gain or (loss) reclassified from accumulated other comprehensive (loss) income into income |
|
|
- |
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|||
(In millions) |
|
Classification and Amount of Gain (Loss) |
|
|||||||||
|
|
Thirteen Weeks Ended September 28, 2024 |
|
|||||||||
|
|
Cost of |
|
|
Interest |
|
|
Other income, net |
|
|||
|
$ |
|
|
$ |
|
|
$ |
|
||||
Gain (loss) on fair value hedging relationships |
|
|
|
|
|
|
|
|
|
|||
Foreign exchange contracts: |
|
|
|
|
|
|
|
|
|
|||
Hedged items |
|
|
- |
|
|
|
- |
|
|
|
|
|
Derivative designated as hedging instruments |
|
|
- |
|
|
|
- |
|
|
|
( |
) |
Gain on net investment hedging relationships |
|
|
|
|
|
|
|
|
|
|||
Gain (loss) on cash flow hedging relationships |
|
|
|
|
|
|
|
|
|
|||
Foreign exchange contracts: |
|
|
|
|
|
|
|
|
|
|||
Amount of gain or (loss) reclassified from accumulated other comprehensive (loss) income into income |
|
|
- |
|
|
|
- |
|
|
|
- |
|
Commodity contracts: |
|
|
|
|
|
|
|
|
|
|||
of gain or (loss) reclassified from accumulated other comprehensive (loss) income into income |
|
|
|
|
|
- |
|
|
|
- |
|
|
Interest rate contracts: |
|
|
|
|
|
|
|
|
|
|||
Amount of gain or (loss) reclassified from accumulated other comprehensive (loss) income into income |
|
|
- |
|
|
|
|
|
|
- |
|
|
12
FORTUNE BRANDS INNOVATIONS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
8. Fair Value Measurements
The FASB Accounting Standards Codification requirements for Fair Value Measurements and Disclosures establish a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three levels. Level 1 inputs, the highest priority, are quoted prices in active markets for identical assets or liabilities. Level 2 inputs reflect other than quoted prices included in Level 1 that are either observable directly or through corroboration with observable market data. Level 3 inputs are unobservable inputs, due to little or
The carrying value and fair value of debt as of September 27, 2025 and December 28, 2024 were as follows:
(In millions) |
|
September 27, 2025 |
|
|
December 28, 2024 |
|
||||||||||
|
|
Carrying |
|
|
Fair |
|
|
Carrying |
|
|
Fair |
|
||||
Notes, net of underwriting commissions, price discounts and debt issuance costs |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Commercial paper borrowings |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total debt |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
The estimated fair value of our Notes is determined by using quoted market prices of our debt securities, which are Level 1 inputs. The estimated fair value of borrowings under our Commercial Paper Program is determined primarily using broker quotes, which are Level 2 inputs, and are equal to their carrying value.
Assets and liabilities measured at fair value on a recurring basis as of September 27, 2025 and December 28, 2024 were as follows:
(In millions) |
|
Fair Value |
|
|||||
|
|
September 27, 2025 |
|
|
December 28, 2024 |
|
||
Assets |
|
|
|
|
|
|
||
Derivative financial instruments (Level 2) |
|
$ |
|
|
$ |
|
||
Liabilities |
|
|
|
|
|
|
||
Derivative financial instruments (Level 2) |
|
$ |
|
|
$ |
|
||
13
FORTUNE BRANDS INNOVATIONS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
9. Accumulated Other Comprehensive Income (Loss)
Total accumulated other comprehensive income (loss) consists of net income (loss) and other changes in business equity from transactions and other events from sources other than stockholders. It includes currency translation gains and losses, unrealized gains and losses from derivative instruments designated as cash flow hedges, and defined benefit plan adjustments.
(In millions) |
|
Foreign |
|
|
Derivative |
|
|
Defined |
|
|
Accumulated |
|
||||
Balance at December 30, 2023 |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|||
Amounts classified into accumulated other |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Amounts reclassified from accumulated other |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
Net current-period other comprehensive (loss) income |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Balance at September 28, 2024 |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Balance at December 28, 2024 |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||
Amounts classified into accumulated other |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Amounts reclassified from accumulated other |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
||
Net current-period other comprehensive (loss) income |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|||
Balance at September 27, 2025 |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||
(In millions) |
|
Foreign |
|
|
Derivative |
|
|
Defined |
|
|
Accumulated |
|
||||
Balance at June 29, 2024 |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||
Amounts classified into accumulated other |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
||
Amounts reclassified from accumulated other |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
Net current-period other comprehensive (loss) income |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
||
Balance at September 28, 2024 |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Balance at June 28, 2025 |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|||
Amounts classified into accumulated other |
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
||
Amounts reclassified from accumulated other |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
||
Net current-period other comprehensive (loss) income |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
Balance at September 27, 2025 |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||
14
FORTUNE BRANDS INNOVATIONS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The reclassifications out of accumulated other comprehensive loss for the thirty-nine and thirteen weeks ended September 27, 2025 and September 28, 2024 were as follows:
(In millions) |
||||||||||
Details about Accumulated Other |
|
Amount Reclassified from |
|
|
Affected Line Item in |
|||||
|
|
Thirty-Nine Weeks Ended September 27, 2025 |
|
|
Thirty-Nine Weeks Ended September 28, 2024 |
|
|
|
||
Gains (losses) on cash flow hedges |
|
|
|
|
|
|
|
|
||
Foreign exchange contracts |
|
$ |
|
|
$ |
|
|
Cost of products sold |
||
Interest rate contracts |
|
|
|
|
|
|
|
Interest expense |
||
Total before tax |
|
|
|
|
|
|
|
|
||
Tax expense |
|
|
( |
) |
|
|
( |
) |
|
|
Net of tax |
|
$ |
|
|
$ |
|
|
|
||
Defined benefit plan items |
|
|
|
|
|
|
|
|
||
Recognition of actuarial losses |
|
$ |
|
|
$ |
|
|
Other (income) expense, net |
||
Total before tax |
|
|
|
|
|
|
|
|
||
Tax expense |
|
|
|
|
|
( |
) |
|
|
|
Net of tax |
|
$ |
|
|
$ |
|
|
|
||
Total reclassifications for the period, net of tax |
|
$ |
|
|
$ |
|
|
|
||
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
||
(In millions) |
||||||||||
Details about Accumulated Other |
|
Amount Reclassified from |
|
|
Affected Line Item in |
|||||
|
|
Thirteen Weeks Ended September 27, 2025 |
|
|
Thirteen Weeks Ended September 28, 2024 |
|
|
|
||
Gains (losses) on cash flow hedges |
|
|
|
|
|
|
|
|
||
Foreign exchange contracts |
|
$ |
|
|
$ |
|
|
Cost of products sold |
||
Interest rate contracts |
|
|
|
|
|
|
|
Interest expense |
||
Total before tax |
|
|
|
|
|
|
|
|
||
Tax expense |
|
|
( |
) |
|
|
( |
) |
|
|
Total reclassifications for the period |
|
$ |
|
|
$ |
|
|
|
||
Defined benefit plan items |
|
|
|
|
|
|
|
|
||
Recognition of actuarial losses |
|
$ |
|
|
$ |
|
|
Other (income) expense, net |
||
Total before tax |
|
|
|
|
|
|
|
|
||
Tax expense |
|
|
|
|
|
( |
) |
|
|
|
Net of tax |
|
$ |
|
|
$ |
|
|
|
||
Total reclassifications for the period, net of tax |
|
$ |
|
|
$ |
|
|
|
||
15
FORTUNE BRANDS INNOVATIONS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
10. Revenue
The following table disaggregates our consolidated revenue by major sales distribution channels for the thirty-nine and thirteen weeks ended September 27, 2025 and September 28, 2024:
(In millions) |
|
Thirty-Nine Weeks Ended September 27, 2025 |
|
|
Thirty-Nine Weeks Ended September 28, 2024 |
|
|
Thirteen Weeks Ended September 27, 2025 |
|
|
Thirteen Weeks Ended September 28, 2024 |
|
||||
Wholesalers(a) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Home Center retailers(b) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other retailers(c) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
U.S. net sales |
|
|
|
|
|
|
|
|
|
|
|
|
||||
International(d) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net sales |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
` `
As part of our contracts with customers, we recognize contract liabilities, principally deferred revenue. Deferred revenue liabilities represents advanced payments and billings in excess of revenue recognized. Deferred revenue liabilities of $
11. Defined Benefit Plans
The components of net periodic benefit income for pension benefits for the thirty-nine and thirteen weeks ended September 27, 2025 and September 28, 2024 were as follows:
|
Pension Benefits |
|
|||||||||||||
(In millions) |
Thirty-Nine Weeks Ended September 27, 2025 |
|
|
Thirty-Nine Weeks Ended September 28, 2024 |
|
|
Thirteen Weeks Ended September 27, 2025 |
|
|
Thirteen Weeks Ended September 28, 2024 |
|
||||
Interest cost |
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Expected return on plan assets |
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Net periodic benefit cost (income) |
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
||
12. Income Taxes
The effective income tax rates for the thirty-nine and thirteen weeks ended September 27, 2025 were
The difference between the Company’s effective income tax rate for the thirty-nine weeks ended September 27, 2025, and the U.S. statutory rate of
The difference between the Company’s effective income tax rate for the thirteen weeks ended September 27, 2025, and the U.S. statutory rate of
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted into law. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. As permitted by the OBBBA, the Company is currently planning to deduct amounts for domestic research and experimental costs that had previously been required to be capitalized and amortized and take
16
FORTUNE BRANDS INNOVATIONS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
13. Product Warranties
We generally record warranty expense related to contractual warranty terms at the time of sale. We may also provide customer concessions for claims made outside of the contractual warranty terms and those expenses are recorded in the period in which the concession is made. We offer our customers various warranty terms based on the type of product that is sold. Warranty expense is determined based on historic claim experience and the nature of the product category.
(In millions) |
|
Thirty-Nine Weeks Ended September 27, 2025 |
|
|
Thirty-Nine Weeks Ended September 28, 2024 |
|
||
Reserve balance at beginning of period |
|
$ |
|
|
$ |
|
||
Provision for warranties issued |
|
|
|
|
|
|
||
Settlements made (in cash or in kind) |
|
|
( |
) |
|
|
( |
) |
Acquisition |
|
|
|
|
|
|
||
Foreign translation adjustments |
|
|
( |
) |
|
|
|
|
Reserve balance at end of period |
|
$ |
|
|
$ |
|
||
14. Information on Business Segments
The Company’s operations are structured into three segments, Water, Outdoors and Security. These segments are strategic business units with differing products and services.
The chief operating decision maker (“CODM”), our , uses operating income to evaluate the performance of our segments and to make resource allocation decisions. Segment operating income excludes unallocated corporate costs.
The significant expense categories and amounts shown below align with the segment level information that is regularly provided to the CODM. Intersegment expenses are included within the amounts below. Other operating expenses principally consist of cost of sales and selling, general and administrative expenses, which are not provided to the CODM in managing performance of the operating segments.
The Water segment manufactures or assembles and sells faucets, accessories, kitchen sinks and waste disposals, predominantly under the Moen, ROHL, Riobel, Victoria+Albert, Perrin & Rowe, Aqualisa, Shaws, Emtek, Schaub and SpringWell brands. The Outdoors segment includes fiberglass and steel entry door systems under the Therma-Tru brand name, storm, screen and security doors under the Larson brand name, composite decking and railing under the Fiberon brand name, urethane millwork under the Fypon brand name and wide-opening exterior door systems and outdoor enclosures under the Solar Innovations brand. The Security segment includes locks, safety and security devices, connected and mechanical lock out tag out solutions and electronic security products under the Master Lock, American Lock, Yale and August brands, and fire-resistant safes, security containers and commercial cabinets under the SentrySafe brand. Corporate expenses consist primarily of headquarters administrative expenses.
17
FORTUNE BRANDS INNOVATIONS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Net sales and operating income for the thirty-nine weeks ended September 27, 2025 and September 28, 2024 by segment were as follows:
(In millions) |
|
Water |
|
|
Outdoors |
|
|
Security |
|
|
Thirty-Nine Weeks Ended September 27, 2025 |
|
||||
Net sales |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Depreciation |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Amortization of intangibles |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other segment items (1) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Unallocated expenses |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total operating income |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
(1)
(In millions) |
|
Water |
|
|
Outdoors |
|
|
Security |
|
|
Thirty-Nine Weeks Ended September 28, 2024 |
|
||||
Net sales |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Depreciation |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Amortization of intangibles |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other segment items (1) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Unallocated expenses |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total operating income |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
(1)
Net sales and operating income for the thirteen weeks ended September 27, 2025 and September 28, 2024 by segment were as follows:
(In millions) |
|
Water |
|
|
Outdoors |
|
|
Security |
|
|
Thirteen Weeks Ended September 27, 2025 |
|
||||
Net sales |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Depreciation |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Amortization of intangibles |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other segment items (1) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Unallocated expenses |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total operating income |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|||
(1)
(In millions) |
|
Water |
|
|
Outdoors |
|
|
Security |
|
|
Thirteen Weeks Ended September 28, 2024 |
|
||||
Net sales |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Depreciation |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Amortization of intangibles |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other segment items (1) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Unallocated expenses |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total operating income |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
(1)
18
FORTUNE BRANDS INNOVATIONS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
15. Restructuring and Other Charges
On January 18, 2025, we announced the decision to consolidate U.S. regional offices into one campus headquarters in Deerfield, Illinois. In connection with these consolidation activities and related organizational and personnel changes, the Company currently expects to incur certain cash and non-cash restructuring and other charges related to employee relocation, severance, retention, non-cash asset related costs, lease exit costs, and other transition activities estimated in the range of approximately $10
Total restructuring and other charges (gains) for the thirty-nine and thirteen weeks ended September 27, 2025 and September 28, 2024 are shown below.
(In millions) |
|
Thirty-Nine Weeks Ended September 27, 2025 |
|
|||||||||||||
|
|
|
|
|
Other Charges (Gains) (a) |
|
|
|
|
|||||||
|
|
Restructuring |
|
|
Cost of Products Sold |
|
|
SG&A (b) |
|
|
Total |
|
||||
Water |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Outdoors |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Security |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Corporate |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
(In millions) |
|
Thirty-Nine Weeks Ended September 28, 2024 |
|
|||||||||||||
|
|
|
|
|
Other Charges (Gains) (a) |
|
|
|
|
|||||||
|
|
Restructuring |
|
|
Cost of Products Sold |
|
|
SG&A (b) |
|
|
Total |
|
||||
Water |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Outdoors |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Security |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Corporate |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Restructuring and other charges (gains) in the thirty-nine weeks ended September 27, 2025, are primarily attributable to costs associated with the decision to consolidate the Company's U.S. regional offices into one campus headquarters and its related organizational and personnel changes, a product-line rationalization within our Outdoors segment, and plant closures in all our segments. Restructuring and other charges in the thirty-nine weeks ended September 28, 2024, were primarily attributable to costs associated with the closure of a manufacturing facility within our Security segment, a product-line rationalization within our Outdoors segment and headcount-reduction actions across all segments.
19
FORTUNE BRANDS INNOVATIONS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(In millions) |
|
Thirteen Weeks Ended September 27, 2025 |
|
|||||||||||||
|
|
|
|
|
Other Charges (Gains) (a) |
|
|
|
|
|||||||
|
|
Restructuring |
|
|
Cost of Products Sold |
|
|
SG&A (b) |
|
|
Total |
|
||||
Water |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Outdoors |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Security |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Corporate |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
(In millions) |
|
Thirteen Weeks Ended September 28, 2024 |
|
|||||||||||||
|
|
|
|
|
Other Charges (Gains) (a) |
|
|
|
|
|||||||
|
|
Restructuring |
|
|
Cost of Products Sold |
|
|
SG&A (b) |
|
|
Total |
|
||||
Water |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Outdoors |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Security |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Corporate |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Restructuring and other charges (gains) in the thirteen weeks ended September 27, 2025, are primarily due to costs incurred in connection within the Company's headquarters consolidation and its related organizational changes and plant and distribution center closures in all our segments. Restructuring and other charges in the thirteen weeks ended September 28, 2024, are largely related to costs associated with the closure of a manufacturing facility within our Security segment, a product line rationalization within our Outdoors segment and headcount-reduction actions across all segments.
Reconciliation of Restructuring Liability
(In millions) |
|
Balance at |
|
|
2025 |
|
|
Cash |
|
|
Non-Cash |
|
|
Balance at |
|
|||||
Workforce reduction costs |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
- |
|
|
$ |
|
|||
Other |
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|||
Total |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|||
(a)
(In millions) |
|
Balance at |
|
|
2024 |
|
|
Cash |
|
|
Non-Cash |
|
|
Balance at |
|
|||||
Workforce reduction costs |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|||
Other |
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|||
Total |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
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$ |
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(a)
20
FORTUNE BRANDS INNOVATIONS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
16. Earnings Per Share
The computations of earnings per common share for the thirty-nine and thirteen weeks ended September 27, 2025 and September 28, 2024 were as follows:
(In millions, except per share data) |
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Thirty-Nine Weeks Ended September 27, 2025 |
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Thirty-Nine Weeks Ended September 28, 2024 |
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Thirteen Weeks Ended September 27, 2025 |
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Thirteen Weeks Ended September 28, 2024 |
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Net income |
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$ |
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$ |
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$ |
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$ |
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Earnings per common share |
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Basic earnings per share |
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$ |
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$ |
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$ |
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$ |
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Diluted earnings per share |
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$ |
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$ |
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$ |
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$ |
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Basic average shares outstanding |
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Stock-based awards |
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Diluted average shares outstanding |
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Antidilutive stock-based awards excluded from weighted-average number of shares outstanding for diluted earnings per share |
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17. Commitments and Contingencies
Litigation
The Company is a party to lawsuits that are ordinary, routine litigation matters incidental to its businesses. It is not possible to predict the outcome of the pending actions, and, as with any litigation, it is possible that these actions could be decided unfavorably to the Company. The Company believes that there are meritorious defenses to these actions and that these actions will not have a material adverse effect upon our results of operations, cash flows or financial condition, and where appropriate, these actions are being vigorously contested. Accordingly, the Company believes the likelihood of material loss is remote.
Environmental
We are involved in remediation activities to clean up hazardous wastes as required by federal and state laws. Liabilities for remediation costs of each site are based on our best estimate of undiscounted future costs, excluding possible insurance recoveries or recoveries from other third parties. Uncertainties about the status of laws, regulations, technology and information related to individual sites make it difficult to develop estimates of environmental remediation exposures. Some of the potential liabilities relate to sites we own, and some relate to sites we no longer own or never owned. Several of our subsidiaries have been designated as potentially responsible parties (“PRP”) under Superfund or similar state laws. In most instances where our subsidiaries are named as a PRP, we enter into cost-sharing arrangements with other PRPs. We give notice to insurance carriers of potential PRP liability, but very rarely, if ever, receive reimbursement from insurance for PRP costs. We believe compliance with current environmental protection laws (before taking into account estimated recoveries from third parties) will not have a material adverse effect upon our results of operations, cash flows or financial condition.
Other
On September 12, 2025, the Company experienced a fire within a portion of one of its manufacturing facilities within the Outdoors segment. The fire primarily caused damage to owned property and equipment. Net sales were not impacted as a result of the fire, due to existing inventory levels and increased output at other manufacturing facilities. The charges of $
18. Subsequent Events
Dividend Declared
On
21
Item 2.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and the notes thereto, which are included in this report, as well as our audited consolidated financial statements for the year ended December 28, 2024, which are included in our Annual Report on Form 10-K for the year ended December 28, 2024.
This discussion contains forward-looking statements that are made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements include all statements that are not historical statements of fact and those regarding our intent, belief or expectations for our business, operations, financial performance or financial condition in addition to statements regarding our expectations for the markets in which we operate, general business strategies, expected impacts from recently-announced organizational and leadership changes, the market potential of our brands, trends in the housing market, the potential impact of costs, including material and labor costs, the potential impact of inflation, expected capital spending, expected pension contributions or de-risking initiatives, the expected impact of acquisitions, dispositions and other strategic transactions, the anticipated impact of recently issued accounting standards on our financial statements, and other matters that are not historical in nature. Statements preceded by, followed by or that otherwise include the words “believes,” “expects,” “anticipates,” “intends,” “projects,” “estimates,” “plans,” “outlook,” “positioned,” “confident,” “opportunity,” “focus” and similar expressions or future or conditional verbs such as “will,” “should,” “would,” “may,” and “could” are generally forward-looking in nature and not historical facts. Where, in any forward-looking statement, we express an expectation or belief as to future results or events, such expectation or belief is based on current expectations, estimates, assumptions and projections of our management about our industry, business and future financial results, available at the time this report is filed with the Securities and Exchange Commission. Although we believe that these statements are based on reasonable assumptions, they are subject to numerous factors, risks and uncertainties that could cause actual outcomes and results to be materially different from those indicated in such statements, including but not limited to: (i) our reliance on the North American and Chinese home improvement, repair and remodel and new home construction activity levels, (ii) the housing market, downward changes in the general economy, unfavorable interest rates or other business conditions, (iii) the competitive nature of consumer and trade brand businesses, (iv) our ability to execute on our strategic plans and the effectiveness of our strategies in the face of business competition, (v) our reliance on key customers and suppliers, including wholesale distributors and dealers and retailers, (vi) risks relating to rapidly evolving technological change, (vii) risks associated with our ability to improve organizational productivity and global supply chain efficiency and flexibility, (viii) risks associated with global commodity and energy availability and price volatility, as well as the possibility of sustained inflation, (ix) delays or outages in our information technology systems or computer networks or breaches of our information technology systems or other cybersecurity incidents, (x) risks associated with doing business globally, including changes in trade-related tariffs (including recent U.S. tariffs announced or imposed on China, Canada, Mexico and other countries and any reciprocal actions taken by such countries) and risks with uncertain trade environments, (xi) risks associated with the disruption of operations, including as a result of severe weather events, (xii) our inability to obtain raw materials and finished goods in a timely and cost-effective manner, (xiii) risks associated with strategic acquisitions, divestitures and joint ventures, including difficulties integrating acquired companies and the inability to achieve the expected financial results and benefits of transactions, (xiv) impairments in the carrying value of goodwill or other acquired intangible assets, (xv) risks of increases in our defined benefit-related costs and funding requirements, (xvi) our ability to attract and retain qualified personnel and other labor constraints, (xvii) the effect of climate change and the impact of related changes in government regulations and consumer preferences, (xviii) risks associated with environmental, social and governance matters, (xix) potential liabilities and costs from claims and litigation, (xx) changes in government and industry regulatory standards, (xxi) future tax law changes or the interpretation of existing tax laws, (xxii) our ability to secure and protect our intellectual property rights, (xxiii) our ability to achieve the expected benefits of the separation of MasterBrand, Inc. (“MasterBrand”), the Company’s Cabinets business (the “Separation”) (xxiv) the risk that we may be required to indemnify MasterBrand in connection with the Separation or that MasterBrand’s indemnities to us may not be sufficient to hold us harmless for the full amount of liabilities for which MasterBrand has been allocated responsibility and (xxv) the potential that the Separation fails to qualify as tax-free for U.S. federal income tax purposes. These and other factors are discussed in Part I, Item 1A “Risk Factors” of our Annual Report on Form 10-K for the year ended December 28, 2024. We undertake no obligation to, and expressly disclaim any such obligation to, update or clarify any forward-looking statements to reflect changed assumptions, the occurrence of anticipated or unanticipated events, new information or changes to future results over time or otherwise, except as required by law.
22
OVERVIEW
References to “Fortune Brands,” “the Company,” “we,” “our” and “us” refer to Fortune Brands Innovations, Inc. and its consolidated subsidiaries as a whole, unless the context otherwise requires. The Company is a leading home, security and digital company whose purpose is to elevate every life by transforming spaces into havens. The Company makes innovative products for residential and commercial environments, with a growing focus on digital solutions and products that add luxury, contribute to safety and enhance sustainability.
We believe that the Company has certain competitive advantages including market-leading brands, a diversified mix of channels, lean and flexible supply chains, a strong capital structure, as well as a tradition of strong innovation and customer service. We are focused on outperforming our markets in growth, profitability and returns in order to drive increased stockholder value. We believe the Company’s track record reflects the long-term attractiveness and potential of the categories we serve and our leading brands. We believe the long-term outlook for our products remains favorable, and our strategic advantages, including the set of capabilities we refer to as the Fortune Brands Advantage, will help us to continue to achieve profitable organic growth over time.
We continue to believe our most attractive opportunities are to invest in profitable organic growth initiatives, pursue accretive strategic acquisitions, non-controlling equity investments, and joint ventures, and return cash to stockholders through a combination of dividends and repurchases of shares of our common stock under our share repurchase program as explained in further detail under “Liquidity and Capital Resources” below.
The U.S. market for our products primarily consists of spending on both new home construction and repair and remodel activities within existing homes, with a substantial majority of the markets we serve consisting of repair and remodel spending. Growth in the U.S. market for our home products will largely depend on consumer confidence, employment, wage growth, home prices, equity levels and rates of extraction, stable mortgage rates and credit availability. Increases in inflation and mortgage rates during the preceding years have slowed the pace of single-family and existing home sales activity and new home construction and repair and remodel activities. However, we believe we are well positioned to manage the continued slow-down in the housing market as we believe the fundamental drivers of the housing market remain intact.
We have been and may continue to be impacted by near-term supply, labor and freight constraints, a volatile geopolitical environment, as well as increased rates of inflation, increased interest rates, unfavorable fluctuations in foreign exchange rates and the ongoing and worsening costs of tariffs (including U.S. tariffs announced or imposed on China, Canada, Mexico and other countries and any reciprocal actions taken by such countries).
We anticipate that, absent any mitigation efforts, our costs of goods sold would increase based on the tariffs that have been announced or imposed (either by the United States or by other countries, including China) as of the date of this report. The Company is actively working to mitigate the anticipated impacts of tariffs through a combination of supply chain actions, cost-out activities and strategic pricing actions across all of our channels and brands. However, this is a rapidly evolving landscape, and the Company’s ability to mitigate the anticipated impacts of tariffs could be affected by a number of factors, including additional tariffs or trade-related sanctions imposed by the U.S. or other countries, and if the Company is ultimately not able to substantially mitigate the impacts of tariffs, there would be negative impacts to the Company’s results of operations. We are also unable at this time to determine any future negative impacts from reduced consumer spending as a result of inflationary or other macroeconomic pressures or uncertainty that may result from the imposition of current or future tariffs. We are currently monitoring, and will continue to monitor, potential changes to these tariffs or the imposition of reciprocal or other tariffs or trade restrictions by other countries.
23
RESULTS OF OPERATIONS
Thirty-Nine Weeks Ended September 27, 2025 Compared To Thirty-Nine Weeks Ended September 28, 2024
Fortune Brands delivered net income of $222.4 million, or $1.83 per diluted common share for the thirty-nine weeks ended September 27, 2025 compared to net income of $366.8 million, or $2.91 per diluted common share in the prior year. Net income for the thirty-nine weeks ended September 27, 2025 was negatively impacted by lower sales unit volume, asset impairment charges of $50.1 million and restructuring and restructuring-related expenses in connection with our headquarters consolidation of $69.2 million. We delivered cash provided by operating activities of $270.4 million of the thirty-nine weeks ended September 27, 2025, compared to $395.5 million in the same prior year period.
|
|
Net Sales |
|||||||||||
(In millions) |
|
2025 |
|
|
2024 |
|
|
% Change |
|||||
Water |
|
$ |
1,830.8 |
|
|
$ |
1,920.0 |
|
|
|
(4.6 |
) |
% |
Outdoors |
|
|
1,028.1 |
|
|
|
1,047.1 |
|
|
|
(1.8 |
) |
|
Security |
|
|
526.8 |
|
|
|
537.7 |
|
|
|
(2.0 |
) |
|
Net sales |
|
$ |
3,385.7 |
|
|
$ |
3,504.8 |
|
|
|
(3.4 |
) |
% |
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
Operating Income (Loss) |
|||||||||||
|
|
2025 |
|
|
2024 |
|
|
% Change |
|
|
|||
Water |
|
$ |
405.1 |
|
|
$ |
443.6 |
|
|
|
(8.7 |
) |
% |
Outdoors |
|
|
59.7 |
|
|
|
143.9 |
|
|
|
(58.5 |
) |
|
Security |
|
|
66.4 |
|
|
|
86.5 |
|
|
|
(23.2 |
) |
|
Less: Corporate expenses |
|
|
(136.8 |
) |
|
|
(114.4 |
) |
|
|
19.6 |
|
|
Operating income |
|
$ |
394.4 |
|
|
$ |
559.6 |
|
|
|
(29.5 |
) |
% |
The following discussion of consolidated results of operations and segment results refers to the thirty-nine weeks ended September 27, 2025 compared to the thirty-nine weeks ended September 28, 2024. Consolidated results of operations should be read in conjunction with segment results of operations.
Net sales
Net sales decreased by $119.1 million, or 3.4%, primarily due to sales volume decreases in China of $59.0 million. The remaining decreases were due to lower sales volume, partially offset by disciplined pricing actions, including strategic adjustments to mitigate tariff-related costs and lower customer sales incentives. Net sales were unfavorably impacted by foreign exchange of $5.4 million.
Cost of products sold
Cost of products sold decreased by $77.9 million, or 4.0%, primarily due to the lower sales volume, lower restructuring-related charges of $10.5 million and continued productivity gains across the segments, supported by strategic sourcing initiatives and manufacturing efficiencies, partially offset by tariff and cost inflation. Cost of products sold also includes a loss, net of insurance recovery, of $3.0 million relating to a fire in a portion of a manufacturing facility within the Outdoors segment.
Selling, general and administrative expenses
Selling, general and administrative expenses increased by $37.5 million, or 4.0%, primarily due to higher restructuring-related charges of $27.8 million, distribution costs, and higher professional fees, partially offset by reductions to incentive compensation.
Asset impairment charges
During the thirty-nine weeks ended September 27, 2025, we determined one of our assets within the Outdoors segment met the criteria to be classified as held-for-sale criteria. An impairment charge of $49.7 million was recorded to reduce the carrying value of the asset to equal fair value, less estimated costs to sell.
24
Restructuring charges
Restructuring charges of $49.3 million in the thirty-nine weeks ended September 27, 2025 are primarily due to $43.3 million of costs incurred in connection with the Company's headquarters consolidation and its related organizational changes, as well as a product-line rationalization within our Outdoors segment and plant and distribution center closures in our Water and Security segments.
Operating income
Operating income decreased by $165.2 million, or 29.5%, primarily due to lower sales volume, material cost inflation, asset impairment charges of $50.1 million, higher distribution costs, and higher restructuring and restructuring-related charges of $52.5 million, partially offset by continued productivity gains across the segments supported by strategic sourcing initiatives and manufacturing efficiencies as well as reductions to incentive compensation.
Interest expense
Interest expense decreased by $4.2 million, or 4.5%, primarily due to lower interest rates on current-period commercial paper borrowings and lower senior unsecured notes outstanding, partially offset by higher commercial paper borrowings net of repayments during the thirty-nine weeks ended September 27, 2025, as compared to the thirty-nine weeks ended September 28, 2024 ($479.1 million in 2025 versus $104.7 million in 2024).
Other (income) expense, net
Other (income) expense, net, was $(5.8) million in the thirty-nine weeks ended September 27, 2025, compared to $(5.2) million in the thirty-nine weeks ended September 28, 2024. The increase of $(0.6) million in other (income) expense, net is primarily due to an increase in interest and investment income of $4.8 million and a decrease in foreign currency transaction expense of $1.9 million, partially offset by an increase in net periodic benefit expense of $6.5 million.
Income taxes
The effective income tax rates for the thirty-nine weeks ended September 27, 2025 and thirty-nine weeks ended September 28, 2024 were 28.7% and 22.3%, respectively.
The difference between the Company’s effective income tax rate for the thirty-nine weeks ended September 27, 2025, and the U.S. statutory rate of 21% primarily relates to state income taxes, including the state income tax impacts of legal entity restructuring, dividend withholding tax and foreign income taxed at higher rates, partially offset by decreases in uncertain tax positions.
The difference between the Company’s effective income tax rate for the thirty-nine weeks ended September 28, 2024, and the U.S. statutory rate of 21% primarily relates to state income taxes and foreign income taxed at higher rates, partially offset by favorable benefits related to a valuation allowance release, provision to return adjustments, decreases in uncertain tax positions, and tax credits.
Net income
Net income was $222.4 million in the thirty-nine weeks ended September 27, 2025, compared to $366.8 million in the thirty-nine weeks ended September 28, 2024.
Results By Segment
Water
Net sales decreased by $89.2 million, or 4.6%, primarily due to sales volume decreases in China of $59.0 million. The remaining decreases were due to lower sales unit volume, partially offset by disciplined pricing actions across our portfolio, including strategic adjustments to mitigate tariff-related costs. Net sales was unfavorably impacted by foreign exchange of $5.7 million.
Operating income decreased by $38.5 million, or 8.7%, primarily due to lower sales volume, material cost inflation, including tariff costs, higher restructuring and restructuring-related charges of $17.5 million, partially offset by manufacturing efficiencies and lower selling, general and administrative expenses, including reductions to incentive compensation.
Outdoors
Net sales decreased by $19.0 million, or 1.8%, primarily due to lower sales unit volume, partially offset by disciplined pricing actions, including strategic adjustments to mitigate tariff-related costs, and lower customer sales incentives.
Operating income decreased by $84.2 million, or 58.5%, due to lower sales unit volume, material cost inflation, including tariff costs, higher restructuring and restructuring-related charges of $2.2 million, partially offset by manufacturing efficiencies. Operating income was also unfavorably impacted by asset impairment charges of $50.1 million and by losses, net of insurance recovery, relating to a fire in a portion of a manufacturing facility of $3.0 million.
25
Security
Net sales decreased by $10.9 million, or 2.0%, primarily due to lower sales unit volume, partially offset by disciplined pricing actions, including strategic adjustments to mitigate tariff-related costs, and lower customer sales incentives.
Operating income decreased by $20.1 million, or 23.2%, primarily due to lower sales unit volume, material cost inflation, including tariff costs, and higher restructuring and restructuring-related charges of $5.5 million, partially offset by manufacturing efficiencies.
Corporate
Corporate expenses increased by $22.4 million, or 19.6%, primarily due to higher restructuring and restructuring-related charges of $27.3 million and higher professional fees, partially offset by reductions to incentive compensation.
Thirteen Weeks Ended September 27, 2025 Compared To Thirteen Weeks Ended September 28, 2024
Fortune Brands delivered net income of $70.8 million, or $0.59 per diluted common share for the thirteen weeks ended September 27, 2025 compared to net income of $136.6 million, or $1.09 per diluted common share in the prior year. Net income for the thirteen weeks ended September 27, 2025 was negatively impacted by lower sales unit volume, asset impairment charges of $50.1 million and restructuring and restructuring-related expenses in connection with our headquarters consolidation of $20.5 million.
|
|
Net Sales |
|||||||||||
(In millions) |
|
2025 |
|
|
2024 |
|
|
% Change |
|||||
Water |
|
$ |
618.5 |
|
|
$ |
635.1 |
|
|
|
(2.6 |
) |
% |
Outdoors |
|
|
344.5 |
|
|
|
342.7 |
|
|
|
0.5 |
|
|
Security |
|
|
186.2 |
|
|
|
177.5 |
|
|
|
4.9 |
|
|
Net sales |
|
$ |
1,149.2 |
|
|
$ |
1,155.3 |
|
|
|
(0.5 |
) |
% |
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
Operating Income (Loss) |
|||||||||||
|
|
2025 |
|
|
2024 |
|
|
% Change |
|||||
Water |
|
$ |
145.9 |
|
|
$ |
151.4 |
|
|
|
(3.6 |
) |
% |
Outdoors |
|
|
(5.0 |
) |
|
|
57.8 |
|
|
|
(108.7 |
) |
|
Security |
|
|
27.7 |
|
|
|
33.0 |
|
|
|
(16.1 |
) |
|
Less: Corporate expenses |
|
|
(42.7 |
) |
|
|
(37.1 |
) |
|
|
15.1 |
|
|
Operating income |
|
$ |
125.9 |
|
|
$ |
205.1 |
|
|
|
(38.6 |
) |
% |
The following discussion of consolidated results of operations and segment results refers to the thirteen weeks ended September 27, 2025 compared to the thirteen weeks ended September 28, 2024. Consolidated results of operations should be read in conjunction with segment results of operations.
Net sales
Net sales decreased by $6.1 million, or 0.5%, primarily due to sales volume decreases in China of $14.5 million. The remaining decreases were due to lower sales volume, partially offset by disciplined pricing actions, including strategic adjustments to mitigate tariff-related costs. Net sales were favorably impacted by foreign exchange of $1.2 million.
Cost of products sold
Cost of products sold increased by $4.3 million, or 0.7%, primarily due to material cost inflation, including tariff costs, higher transportation costs, partially offset by the lower sales volume and continued productivity gains across the segments, supported by strategic sourcing initiatives and manufacturing efficiencies. Cost of products sold also includes a loss, net of insurance recovery, of $3.0 million relating to a fire in a portion of a manufacturing facility in the Outdoors segment.
Selling, general and administrative expenses
Selling, general and administrative expenses increased by $15.0 million, or 5.0%, primarily due to higher restructuring-related charges of $12.3 million, distribution costs, and professional fees, partially offset by reductions to incentive compensation.
26
Asset impairment charges
During the thirteen weeks ended September 27, 2025, we determined one of our assets within the Outdoors segment, met the criteria to be classified as held-for-sale. An impairment charge of $49.7 million was recorded to reduce the carrying value of the asset to equal fair value, less estimated costs to sell.
Restructuring charges
Restructuring charges of $10.8 million in the thirteen weeks ended September 27, 2025 are primarily due to costs incurred in connection within the Company's headquarters consolidation and its related organizational changes.
Operating income
Operating income decreased by $79.2 million, or 38.6%, primarily due to lower sales volume, material cost inflation, asset impairment charges of $50.1 million, higher restructuring and restructuring-related charges of $15.6 million, and higher distribution costs, partially offset by continued productivity gains across the segments, supported by strategic sourcing initiatives and manufacturing efficiencies, as well as reductions to incentive compensation.
Interest expense
Interest expense decreased by $1.6 million, or 5.3%, primarily due to lower interest rates on current-period commercial paper borrowings and lower unsecured senior notes outstanding.
Other (income) expense, net
Other (income) expense, net, was $2.6 million in the thirteen weeks ended September 27, 2025, compared to $(1.6) million in the thirteen weeks ended September 28, 2024. The decrease of $4.2 million in other (income) expense, net is primarily due to an increase in net periodic benefit expense of $2.0 million, and increase in foreign currency transaction expense of $1.0 million and a decrease in interest and investment income of $0.5 million.
Income taxes
The effective income tax rates for the thirteen weeks ended September 27, 2025 and thirteen weeks ended September 28, 2024 were 25.3% and 22.6%, respectively.
The difference between the Company’s effective income tax rate for the thirteen weeks ended September 27, 2025, and the U.S. statutory rate of 21% primarily relates to state income taxes and foreign income taxed at higher rates, partially offset by provision to return adjustments.
The difference between the Company’s effective income tax rate for the thirteen weeks ended September 28, 2024, and the U.S. statutory rate of 21% primarily relates to state income taxes and foreign income taxed at higher rates, partially offset by favorable benefits related to provision to return adjustments and tax credits.
Net income
Net income was $70.8 million in the thirteen weeks ended September 27, 2025, compared to $136.6 million in the thirteen weeks ended September 28, 2024.
Results By Segment
Water
Net sales decreased by $16.6 million, or 2.6%, primarily due to sales volume decreases in China of $14.5 million. The remaining decreases were due to lower sales unit volume, partially offset by disciplined pricing actions across our portfolio, including strategic adjustments to mitigate tariff-related costs.
Operating income decreased by $5.5 million, or 3.6%, primarily due to lower sales volume, material cost inflation, including tariff costs, partially offset by manufacturing efficiencies and lower selling, general and administrative expenses, including reductions to incentive compensation.
27
Outdoors
Net sales increased by $1.8 million, or 0.5%, primarily due to disciplined pricing actions, including strategic adjustments to mitigate tariff-related costs, partially offset by lower sales unit volume.
Operating income decreased by $62.8 million, or 108.7%, due to higher material costs, including tariff costs, lower sales unit volume, product mix and higher restructuring and restructuring-related charges of $1.5 million, partially offset by manufacturing efficiencies. Operating income was also unfavorably impacted by asset impairment charges of $50.1 million and by losses, net of insurance recovery, relating to a fire in a portion of a manufacturing facility of $3.0 million.
Security
Net sales increased by $8.7 million, or 4.9%, primarily due to disciplined pricing actions, including strategic adjustments to mitigate tariff-related costs, partially offset by lower sales unit volume. Net sales was favorably impacted by foreign exchange of $0.9 million.
Operating income decreased by $5.3 million, or 16.1%, primarily due to lower sales unit volume, product mix and higher restructuring and restructuring-related charges of $4.2 million.
Corporate
Corporate expenses increased by $5.6 million, or 15.1%, primarily due to higher restructuring and restructuring-related charges of $9.7 million, and higher professional fees, partially offset by reductions to incentive compensation.
LIQUIDITY AND CAPITAL RESOURCES
Our principal sources of liquidity are cash on hand, cash flows from operating activities, cash borrowed under our credit facility and cash from debt issuances in the capital markets. Our operating income is generated by our subsidiaries. We believe our operating cash flows, including funds available under the credit facility and access to capital markets, provide sufficient liquidity to support the Company’s working capital requirements, capital expenditures and service of indebtedness, as well as to finance acquisitions, repurchase shares of our common stock and pay dividends to stockholders, as the Board of Directors deems appropriate both for the 12-month period following September 27, 2025, and in the long-term.
Our cash flows from operations, borrowing availability and overall liquidity are subject to certain risks and uncertainties, including those described in the section of our Annual Report on Form 10-K for the year ended December 28, 2024 entitled “Item 1A. Risk Factors”. In addition, we cannot predict whether or when we may enter into acquisitions, joint ventures or dispositions, repurchase shares of our common stock under our share repurchase program or pay dividends, or what impact any such transactions could have on our results of operations, cash flows or financial condition, whether as a result of the issuance of debt or equity securities, or otherwise.
Long-Term Debt
In June 2025, we repaid our 4.000% senior unsecured notes issued in June 2015 at their maturity date using a combination of cash on hand and commercial paper borrowings.
At September 27, 2025, the Company had aggregate outstanding notes in the principal amount of $2.2 billion, with varying maturities (the “Notes”). The Notes are unsecured senior obligations of the Company. In addition, we believe that we have the ability to obtain alternative sources of financing if required. The following table provides a summary of the Company’s outstanding Notes, including the net carrying value of the Notes, net of underwriting commissions, price discounts and debt issuance costs as of September 27, 2025 and December 28, 2024:
|
|
|
|
|
|
|
|
Net Carrying Value |
|
||||||
(in millions) |
Principal Amount |
|
|
Issuance Date |
|
Maturity Date |
|
September 27, 2025 |
|
|
December 28, 2024 |
|
|||
4.000% Senior Notes |
$ |
500.0 |
|
|
June 2015 |
|
June 2025 |
|
$ |
- |
|
|
$ |
499.6 |
|
3.250% Senior Notes |
$ |
700.0 |
|
|
September 2019 |
|
September 2029 |
|
|
697.0 |
|
|
|
696.5 |
|
4.000% Senior Notes |
$ |
450.0 |
|
|
March 2022 |
|
March 2032 |
|
|
447.0 |
|
|
|
446.7 |
|
4.500% Senior Notes |
$ |
450.0 |
|
|
March 2022 |
|
March 2052 |
|
|
436.8 |
|
|
|
436.4 |
|
5.875% Senior Notes |
$ |
600.0 |
|
|
June 2023 |
|
June 2033 |
|
|
594.7 |
|
|
|
594.1 |
|
Total Senior Notes |
|
|
|
|
|
|
|
$ |
2,175.5 |
|
|
$ |
2,673.3 |
|
|
Less: current portion |
|
|
|
|
|
|
|
|
- |
|
|
|
499.6 |
|
|
Total Senior Notes long-term |
|
|
|
|
|
|
|
$ |
2,175.5 |
|
|
$ |
2,173.7 |
|
|
28
Credit Facilities
In August 2022, the Company entered into a third amended and restated $1.25 billion revolving credit facility (the “Revolving Credit Agreement”), and borrowings thereunder will be used for general corporate purposes. The maturity date of the facility is August 2027. Interest rates under the Revolving Credit Agreement are variable based on the Secured Overnight Financing Rate ("SOFR") at the time of the borrowing and the Company’s long-term credit rating and can range from SOFR + 1.02% to SOFR + 1.525%. Under the Revolving Credit Agreement, the Company is required to maintain a minimum ratio of consolidated EBITDA to consolidated interest expense of 3.0 to 1.0. Consolidated EBITDA is defined as consolidated net income before interest expense, income taxes, depreciation, amortization of intangible assets, losses from asset impairments, and certain other one-time adjustments. In addition, the Company's ratio of consolidated debt minus certain cash and cash equivalents to consolidated EBITDA generally may not exceed 3.5 to 1.0. There were no outstanding borrowings under this facility as of September 27, 2025 and December 28, 2024. As of September 27, 2025, we were in compliance with all covenants under this facility.
We currently have uncommitted bank lines of credit in China, which provide for unsecured borrowings for working capital of up to $30.5 million in aggregate as of September 27, 2025 and December 28, 2024, respectively. There were no outstanding balances as of September 27, 2025 and December 28, 2024.
Commercial Paper
The Company operates a commercial paper program (the “Commercial Paper Program”) pursuant to which the Company may issue unsecured commercial paper notes. The Company's Revolving Credit Agreement is the liquidity backstop for the repayment of any notes issued under the Commercial Paper Program, and as such borrowings under the Commercial Paper Program are included in Long-term debt in the condensed consolidated balance sheets. Amounts available under the Commercial Paper Program may be borrowed, repaid and re-borrowed, with the aggregate principal amount outstanding at any time, including borrowings under the Revolving Credit Agreement, not to exceed $1.25 billion. The Company expects to use any issuances under the Commercial Paper Program for general corporate purposes. Outstanding borrowings under the Commercial Paper Program as of September 27, 2025 was $479.0 million. No amounts were outstanding as of December 28, 2024.
Cash and Seasonality
On September 27, 2025, we had non-restricted cash and cash equivalents of $227.4 million, of which $191.1 million was held at non-U.S. subsidiaries. We manage our global cash requirements considering (i) available funds among the subsidiaries through which we conduct business, (ii) the geographic location of our liquidity needs, and (iii) the cost to access international cash balances. The repatriation of non-U.S. cash balances from certain subsidiaries could have adverse tax consequences as we may be required to pay and record tax expense on those funds that are repatriated.
Our operating cash flows are significantly impacted by the seasonality of our business. We typically generate most of our operating cash flow in the third and fourth fiscal quarters of each year.
We believe that our current cash position, cash flow generated from operations, amounts available under our revolving credit facility and access to the capital markets should be sufficient for our operating requirements and enable us to fund our capital expenditures, share repurchases, dividend payments, and required long-term debt payments.
Share Repurchases and Dividends
In the thirty-nine weeks ended September 27, 2025, we repurchased 3.8 million shares of our outstanding common stock under the Company’s share repurchase program for $237.8 million. As of September 27, 2025, the Company’s total remaining share repurchase authorization under its share repurchase program was approximately $837.2 million. The share repurchase program does not obligate the Company to repurchase any specific dollar amount or number of shares and may be suspended or discontinued at any time.
In the thirty-nine weeks ended September 27, 2025, we paid dividends in the amount of $90.6 million to the Company’s stockholders. Our Board of Directors will continue to evaluate dividend payment opportunities on a quarterly basis. There can be no assurance as to when and if future dividends will be paid, and at what level, because the payment of dividends is dependent on our financial condition, results of operations, cash flows, capital requirements and other factors deemed relevant by our Board of Directors. Our subsidiaries are not limited by long-term debt or other agreements in their abilities to pay cash dividends or to make other distributions with respect to their capital stock or other payments to the Company.
29
Acquisitions
On February 29, 2024, we acquired 100% of the outstanding equity interests of Wise Water Solutions, LLC, doing business as Springwell Water Filtration Systems ("SpringWell") for a purchase price of $105.6 million, net of cash acquired of $1.4 million. We financed the transaction using cash on hand and borrowings under our existing credit facility. The results of SpringWell are reported as part of the Water Innovations ("Water") segment.
We periodically review our portfolio of brands and evaluate potential strategic transactions and other capital initiatives to increase stockholder value.
Cash Flows
Below is a summary of cash flows for the thirty-nine weeks ended September 27, 2025 and September 28, 2024.
|
|
|
|
|
|
|
||
'(In millions) |
|
Thirty-Nine Weeks Ended |
|
|
Thirty-Nine Weeks Ended September 28, 2024 |
|
||
Net cash provided by operating activities |
|
$ |
270.4 |
|
|
$ |
395.5 |
|
Net cash used in investing activities |
|
|
(84.4 |
) |
|
|
(258.7 |
) |
Net cash used in financing activities |
|
|
(352.6 |
) |
|
|
(183.1 |
) |
Effect of foreign exchange rate changes on cash |
|
|
8.6 |
|
|
|
0.8 |
|
Net decrease in cash and cash equivalents |
|
$ |
(158.0 |
) |
|
$ |
(45.5 |
) |
Net cash provided by operating activities was $270.4 million in the thirty-nine weeks ended September 27, 2025, compared to net cash provided by operating activities of $395.5 million in the thirty-nine weeks ended September 28, 2024. The decrease in cash provided of $125.1 million was primarily due to lower net income in 2025 and an increase in accounts receivable and inventory balances compared to the prior period, partially offset by an increase in accounts payable and accrued expenses and other liabilities.
Net cash used in investing activities was $84.4 million in the thirty-nine weeks ended September 27, 2025, compared to net cash used in investing activities of $258.7 million in the thirty-nine weeks ended September 28, 2024. The decrease in cash used of $174.3 million primarily relates to the absence of acquisition-related outflows in 2025 and lower capital expenditures in 2025 as compared to 2024.
Net cash used in financing activities was $352.6 million in the thirty-nine weeks ended September 27, 2025, compared to net cash used in financing activities of $183.1 million in the thirty-nine weeks ended September 28, 2024. The increase in cash used of $169.5 million was primarily due to higher net debt repayments in 2025 as compared to 2024 of $125.0 million and higher share repurchases in 2025 compared to 2024 of $47.4 million.
Pension Plans
Subsidiaries of Fortune Brands sponsor their respective defined benefit pension plans that are funded by a portfolio of investments maintained within our benefit plan trust. As of December 28, 2024, the fair value of our total pension plan assets was $177.1 million, representing funding of approximately 95% of the accumulated qualified benefit obligation liability. During the thirty-nine weeks ended September 27, 2025, we made no pension contributions. For the foreseeable future, we believe that we have sufficient liquidity to meet the minimum funding that may be required by the Pension Protection Act of 2006.
Foreign Exchange
We have operations in various foreign countries, principally Canada, Mexico, the United Kingdom, China, South Africa, Vietnam and France. Therefore, changes in the value of the related currencies affect our financial statements when translated into U.S. dollars.
CRITICAL ACCOUNTING ESTIMATES
There have been no material changes in the information provided in the section entitled “Critical Accounting Estimates” in our Annual Report on Form 10-K for the year ended December 28, 2024.
30
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
There have been no material changes in the information provided in the section entitled “Quantitative and Qualitative Disclosures about Market Risk” in our Annual Report on Form 10-K for the year ended December 28, 2024.
Item 4. CONTROLS AND PROCEDURES.
The Company’s management has evaluated, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, the effectiveness of the Company's disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and the Chief Financial Officer have concluded that the Company's disclosure controls and procedures were effective as of the end of the period covered by this report.
(b) Changes in Internal Control Over Financial Reporting.
There have been no changes in the Company's internal control over financial reporting that occurred during thirteen weeks ended September 27, 2025 that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.
31
PART II. OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS.
The Company is a party to lawsuits that are ordinary, routine litigation matters incidental to its businesses. It is not possible to predict the outcome of the pending actions, and, as with any litigation, it is possible that these actions could be decided unfavorably to the Company. The Company believes that there are meritorious defenses to these actions and that these actions will not have a material adverse effect upon our results of operations, cash flows or financial condition, and where appropriate, these actions are being vigorously contested. Accordingly, the Company believes the likelihood of material loss is remote.
We are involved in remediation activities to clean up hazardous wastes as required by federal and state laws. Liabilities for remediation costs of each site are based on our best estimate of undiscounted future costs, excluding possible insurance recoveries or recoveries from other third parties. Uncertainties about the status of laws, regulations, technology and information related to individual sites make it difficult to develop estimates of environmental remediation exposures. Some of the potential liabilities relate to sites we own, and some relate to sites we no longer own or never owned. Several of our subsidiaries have been designated as potentially responsible parties (“PRP”) under Superfund or similar state laws. In most instances where our subsidiaries are named as a PRP, we enter into cost-sharing arrangements with other PRPs. We give notice to insurance carriers of potential PRP liability, but very rarely, if ever, receive reimbursement from insurance for PRP costs. We believe compliance with current environmental protection laws (before taking into account estimated recoveries from third parties) will not have a material adverse effect upon our results of operations, cash flows or financial condition.
Item 1A. RISK FACTORS.
There have been no material changes to the risk factors previously disclosed in our Annual Report on Form 10-K for the fiscal year ended December 28, 2024.
Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
Below are the repurchases of common stock by the Company or any “affiliated purchaser” (as defined in Rule 10b-18(a)(3) under the Exchange Act) for the thirteen weeks ended September 27, 2025:
Issuer Purchases of Equity Securities
Thirteen Weeks Ended September 27, 2025 |
|
Total |
|
|
Average |
|
|
Total number of |
|
|
Maximum dollar |
|
||||
June 29 – July 26 |
|
|
— |
|
|
$ |
— |
|
|
|
— |
|
|
$ |
837,245,452 |
|
July 27 – August 23 |
|
|
— |
|
|
$ |
— |
|
|
|
— |
|
|
|
837,245,452 |
|
August 24 – September 27 |
|
|
— |
|
|
$ |
— |
|
|
|
— |
|
|
|
837,245,452 |
|
Total |
|
|
— |
|
|
$ |
— |
|
|
|
— |
|
|
|
|
|
Authorization date |
|
Announcement date |
|
Authorization amount |
|
Expiration date |
February 4, 2025 |
|
February 6, 2025 |
|
$1,000,000,000 |
|
February 4, 2027 |
32
Item 5. OTHER INFORMATION.
Securities Trading Plans of Directors and Officers
A significant portion of the compensation of our officers is delivered in the form of equity awards, including performance share awards, restricted stock units and stock options. The Company’s compensation programs and practices are designed to pay for performance and to align management’s interests with those of the Company’s stockholders while attracting, motivating and retaining superior talent to lead our Company. In addition, members of the Board of Directors receive a portion of their compensation in Company common stock. Our executive officers and directors may engage from time to time in the open-market sale or other transactions involving those securities, and may also purchase our securities.
Transactions in our securities by our directors and officers are required to be made in accordance with our Insider Trading Policy, which, among other things, requires that the transactions be in accordance with applicable U.S. federal securities laws that prohibit trading while in possession of material nonpublic information. Rule 10b5-1 under the Exchange Act provides an affirmative defense that enables prearranged transactions in securities in a manner that avoids concerns about initiating transactions at a future date while possibly in possession of material nonpublic information. Our directors and officers are permitted to enter into trading plans designed to comply with Rule 10b5-1.
During the third quarter of 2025, none of our directors or officers
33
Item 6. EXHIBITS
3.1 |
|
|
|
3.2 |
|
|
|
31.1* |
Certificate of Chief Executive Officer Required Under Section 302 of the Sarbanes-Oxley Act of 2002. |
|
|
31.2* |
Certificate of Chief Financial Officer Required Under Section 302 of the Sarbanes-Oxley Act of 2002. |
|
|
32.* |
Joint CEO/CFO Certificate Required Under Section 906 of the Sarbanes-Oxley Act of 2002. |
|
|
101.* |
The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 27, 2025 formatted in Inline eXtensible Business Reporting Language (iXBRL): (i) the Cover Page, (ii) the Condensed Consolidated Statements of Comprehensive Income, (iii) the Condensed Consolidated Balance Sheets, (iv) the Condensed Consolidated Statements of Cash Flows, (v) the Condensed Consolidated Statements of Equity, and (vi) the Notes to the Condensed Consolidated Financial Statements. |
|
|
104.* |
Cover Page Interactive Data File (embedded within the iXBRL document). |
* Filed or furnished herewith.
34
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
|
FORTUNE BRANDS INNOVATIONS, INC. |
|
(Registrant) |
|
|
Date: October 30, 2025 |
/s/ Jonathan H. Baksht |
|
Jonathan H. Baksht |
|
Executive Vice President and Chief Financial Officer |
|
(Duly authorized officer and principal financial officer of the Registrant) |
35
EXHIBIT 31.1
CERTIFICATION
I, Nicholas I. Fink, certify that:
1. I have reviewed this quarterly report on Form 10-Q for the quarter ended September 27, 2025 of Fortune Brands Innovations, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date: October 30, 2025
/s/ Nicholas I. Fink |
Nicholas I. Fink |
Chief Executive Officer |
EXHIBIT 31.2
CERTIFICATION
I, Jonathan H. Baksht, certify that:
1. I have reviewed this quarterly report on Form 10-Q for the quarter ended September 27, 2025 of Fortune Brands Innovations, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date: October 30, 2025
/s/ Jonathan H. Baksht |
Jonathan H. Baksht |
Executive Vice President and |
Chief Financial Officer |
EXHIBIT 32
JOINT CEO/CFO CERTIFICATE REQUIRED PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
Each of the undersigned, the Chief Executive Officer and the Executive Vice President and Chief Financial Officer of Fortune Brands Innovations, Inc. (the “Company”), hereby certifies pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002, that the Quarterly Report of the Company on Form 10-Q for the period ended September 27, 2025, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and the results of operations of the Company.
Dated: October 30, 2025
/s/ Nicholas I. Fink |
Nicholas I. Fink |
Chief Executive Officer |
/s/ Jonathan H Baksht |
Jonathan H. Baksht |
Executive Vice President and |
Chief Financial Officer |
A signed original of this written statement required by Section 906 has been provided to Fortune Brands Innovations, Inc. and will be retained by Fortune Brands Innovations, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.