Financial Data and Key Metrics Changes - The company reported a 20% growth in EPS and a consolidated operating margin increase of 150 basis points year-over-year, reaching 16.3% [6][35]. - Sales for the third quarter were $2.1 billion, reflecting a 3% increase, while consolidated operating income rose 14% to $335 million [34][36]. - The three-year organic sales CAGR was reported at 10%, with operating income CAGR at 17% [10]. Business Line Data and Key Metrics Changes - **Water Innovations**: Sales decreased by 14% to $635 million, impacted by channel inventory reductions and a soft market in China, despite a 5% increase in U.S. POS [19][38]. - **Outdoors & Security**: Sales grew by 6% to $560 million, driven by strong performance from the Therma-Tru brand, while security sales declined due to retail inventory reductions [23][40]. - **Cabinets**: Sales increased by 20% to $858 million, with operating income up 71% to $119 million, reflecting successful pricing actions and backlog management [25][44]. Market Data and Key Metrics Changes - The U.S. housing market is experiencing a softening in single-family new construction and R&R activities due to rising interest rates, with expectations for flat growth in new construction [6][13]. - The company anticipates a global market decline of low to mid single-digits in 2023, with the first half expected to be more challenging than the second half [54][55]. Company Strategy and Development Direction - The company is focused on executing a planned separation into two independent public companies, aiming to enhance agility and operational efficiency [8][15]. - Strategic investments in digital transformation and innovation are prioritized to drive long-term growth despite short-term headwinds [6][15]. - The organizational redesign aims to leverage best practices across the company, enhancing productivity and margin progression [16][70]. Management's Comments on Operating Environment and Future Outlook - Management acknowledged increasing headwinds from macroeconomic uncertainties and shifting consumer behavior, particularly in response to housing affordability [13][49]. - The company remains optimistic about long-term housing demand, citing a significant shortage of homes in the U.S. as a fundamental growth driver [17][18]. - Full-year guidance has been revised downward due to market conditions, with expectations for net sales growth adjusted to 4.5% to 5.5% [50][51]. Other Important Information - The company has repurchased approximately $580 million in common stock year-to-date, reflecting a commitment to effective cash and balance sheet management [47][48]. - The upcoming Investor Day is expected to provide further insights into the company's strategic initiatives and operational successes [16][33]. Q&A Session Summary Question: Current demand environment and business performance - Management noted a significant inflection point in the demand environment during the third quarter, with a sharp decline in building orders and permits [59][60]. Question: Water Innovations margins and volume challenges - Management highlighted strong margin performance due to effective cost management and strategic prioritization, despite volume challenges [63][66]. Question: Organizational realignment rationale - The shift to a more aligned operating model is aimed at enhancing growth and productivity by leveraging best practices across the portfolio [69][70]. Question: Decremental margin guidance for 2023 - Management indicated that decremental margins are expected to be higher in the first half of 2023 due to inventory destocking, with a more cautious outlook for the second half [75][78].

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2022 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 1-35166 FORTUNE BRANDS HOME & SECURITY, INC. (Exact name of Registrant as specified in its charter) Delaware 62-1411546 (State or other jur ...

Financial Data and Key Metrics Changes - The company reported sales of $2.1 billion, a 9% increase year-over-year, with consolidated operating income of $320 million, up 7% [34][35] - Total operating margin improved to 15.1%, reflecting year-over-year margin expansion across all segments [34][36] - Earnings per share (EPS) were $1.67 for the quarter, representing a 7% increase [34] Business Line Data and Key Metrics Changes - **Water Innovations**: Sales decreased by mid-single digits to $650 million, impacted by COVID-related shutdowns in China, but grew by 4% excluding China [38][39] - **Outdoors and Security**: Sales increased by 13% to $605 million, driven by strong performance in Therma-Tru and decking sales [41][43] - **Cabinets**: Sales grew by 21% to $856 million, with strong demand across stock and semi-custom cabinets [44][46] Market Data and Key Metrics Changes - The company noted signs of slowing consumer behavior due to inflation and rising interest rates, particularly affecting the housing market [9][23] - Despite the slowdown, the long-term outlook for housing remains positive, supported by favorable demographics and home equity levels [10][25] Company Strategy and Development Direction - The company is progressing with its plan to separate into two publicly traded companies, expecting to file the initial draft of Form-10 with the SEC later this quarter [7][12] - Strategic investments are being made in digital transformation to drive future growth and margin expansion [36][30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating potential short-term softness in the housing market, citing strong fundamentals and proactive measures to maintain value creation [10][11][30] - The company anticipates a potential air pocket in new construction towards the end of the year or into 2023, but remains optimistic about long-term demand [24][25] Other Important Information - The company is adjusting its full-year 2022 guidance to reflect incremental expenses related to the separation and updated market conditions [30][51] - Free cash flow is expected to be approximately $590 million to $630 million, with capital expenditures adjusted to reflect current market conditions [55] Q&A Session Summary Question: Update on the spin-off progress - Management confirmed that the spin-off is ahead of schedule, with significant progress made in scoping and execution [59][60] Question: State of the consumer and macro playbook execution - Management noted that the consumer has remained resilient, with positive trends in point-of-sale data, while preparing for potential market adjustments [62][64] Question: Performance across different price segments - Management indicated that the observed weakness was primarily limited to the Cabinets segment, with other segments performing well [70] Question: Inventory management strategies - Management discussed proactive inventory management, leveraging consumer insights to ensure appropriate stock levels [71][74] Question: Impact of inflation and pricing dynamics - Management acknowledged rising inflation and its impact on costs, but noted successful price adjustments to maintain margins [88][89] Question: Future outlook for decking and pricing - Management expects solid double-digit growth in decking, with a focus on innovation and maintaining pricing power [82][85]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2022 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 1-35166 FORTUNE BRANDS HOME & SECURITY, INC. (Exact name of Registrant as specified in its charter) Delaware 62-1411546 (State or other jurisdic ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2022 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 1-35166 FORTUNE BRANDS HOME & SECURITY, INC. (Exact name of Registrant as specified in its charter) Delaware 62-1411546 (State or other jurisdi ...

Fortune Brands Home & Security, Inc. (FBHS) Q1 2022 Earnings Conference Call April 28, 2022 4:30 PM ET Company Participants Dave Barry – Senior Vice President of Finance and Investor Relations Nick Fink – Chief Executive Officer Pat Hallinan – Chief Financial Officer Conference Call Participants Adam Baumgarten – Zelman Susan Maklari – Goldman Sachs Stephen Kim – Evercore ISI Phil Ng – Jefferies Truman Patterson – Wolfe Research Operator Good morning. My name is [indiscernible] I’ll be your operator for tod ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2021 ☐ 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 1-35166 Fortune Brands Home & Security, Inc. (Exact name of registrant as specified in its charter) Delaware 62-1411546 (State or Other J ...

Financial Data and Key Metrics Changes - In Q4 2021, total sales increased by over 18%, with consolidated operating income rising by 7% and EPS growing by 6% [51][8][28] - For the full year 2021, sales reached $7.7 billion, up 26%, with operating income increasing by 30% to $1.1 billion [51][52] - The total company operating margin improved by 50 basis points to 14.6%, and EPS grew by 37% to $5.73 [52][51] Business Line Data and Key Metrics Changes - **Plumbing**: Q4 sales were $704 million, up 10%, with a full year growth of over 25%. Operating margin was 20.8% for Q4 and 22.9% for the full year [55][56][30] - **Outdoors & Security**: Q4 sales increased by 40% to $514 million, with full year sales at $2 billion, up 44%. Operating margin was 15.9% for Q4 and 14.9% for the full year [57][62][35] - **Cabinets**: Q4 sales rose by 14% to $745 million, with full year sales up 16% to $2.9 billion. Operating margin was 8.9% for Q4 and 10.1% for the full year [63][64] Market Data and Key Metrics Changes - Demand for home products remains strong, driven by demographic trends favoring new construction and repair and remodel activities [22][27] - The existing housing inventory in the U.S. is at an all-time low, contributing to rapid turnover and increased demand for home products [23][26] - The company expects continued strength in new construction and repair and remodel spending, supported by low interest rates and significant home equity wealth [26][27] Company Strategy and Development Direction - The company is focused on expanding its Fortune Brands Advantage capabilities, investing in innovation, and enhancing capacity to serve customers [7][10][17] - A digital transformation initiative is underway, with plans to develop a digital center of excellence to improve brand innovation and operational efficiency [17][19] - The acquisition of Solar Innovations aims to enhance the company's outdoor segment and integrate advanced door systems into its product offerings [37][112] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate challenges such as supply chain disruptions and inflation, while maintaining strong demand for products [10][16] - The outlook for 2022 includes expected sales growth of 5.5% to 7.5% and EPS in the range of $6.35 to $6.55, reflecting confidence in market strength [70][71] - Management anticipates that inflation will be offset by pricing actions, with margin improvements expected in the second half of 2022 [88][77] Other Important Information - The company has made significant investments in capacity expansions and returned over $590 million to shareholders in 2021 [9][51] - The company is committed to advancing its environmental, social, and governance (ESG) initiatives, including carbon emission reduction goals [12][15] Q&A Session Summary Question: Can you provide insights on the shape of the year and customer orders? - Management noted robust demand continuing into 2022, with POS dollars showing strength at or slightly above 21% [83][84] Question: How should we think about pricing and cost impacts on margins? - Management indicated that over 90% of pricing actions are in place, with expectations for margin improvement from Q2 onwards [86][88] Question: What is driving the increase in CapEx for 2022? - The increase in CapEx is driven by the need to accommodate immediate growth and long-term objectives, including investments in decking and plumbing facilities [90][91]

Financial Data and Key Metrics Changes - Company sales increased by 20% in total and 14% organically, reaching nearly $2 billion, marking an all-time record in quarterly sales [10][63] - Operating income rose by 20%, and earnings per share increased by 25%, reflecting strong performance despite external challenges [10][63] - The company expects full-year EPS in the range of $5.63 to $5.73, indicating a growth of 36% over the previous record year [80] Business Line Data and Key Metrics Changes - **Plumbing**: Sales grew by 26% to $741 million, with operating income increasing by 36% to $168 million and an operating margin of 22.6% [64] - **Outdoors & Security**: Sales increased by 30% to $528 million, with operating income of $82 million, up 24%, and an operating margin of 15.6% [65][68] - **Cabinets**: Sales grew over 9% to $717 million, but operating income decreased by 13% to $69 million, with an operating margin of 9.7% [69][70] Market Data and Key Metrics Changes - Demand for products remains strong, with expectations for U.S. housing market growth of 12% to 13% and new construction growth of 11% to 12% [78] - The company anticipates a cash conversion rate of 80% to 85% for the year, with free cash flow expected to be approximately $625 million to $675 million [82] Company Strategy and Development Direction - The company is focused on long-term growth and margin improvement, with significant investments in digital initiatives, brand innovation, and capacity expansion [14][15] - The strategic agenda includes leveraging Fortune Brands advantage capabilities to enhance operational efficiency and reduce complexity [34][35] - The company is committed to returning capital to shareholders, having repurchased over $380 million in shares year-to-date [18][77] Management's Comments on Operating Environment and Future Outlook - Management highlighted strong demand for products and a favorable long-term outlook for the housing market, despite ongoing supply chain challenges [25][26] - The company is addressing labor shortages and material availability issues through strategic investments and operational improvements [33][72] - Management remains optimistic about achieving exceptional growth and margin improvement in 2021, despite external pressures [14][80] Other Important Information - The company celebrated its 10-year anniversary since its spin-off and public listing, with cumulative capital returned to shareholders surpassing $2.5 billion [19] - Recent advancements in ESG initiatives were noted, including partnerships with affordable housing organizations [21][20] Q&A Session Summary Question: Operating margin improvement in fiscal '22 - Management confirmed that the 75 basis points of operating margin improvement would come from a combination of cost mix improvements, volume incrementals, and structural cost changes [88][91] Question: Demand categories with sustained momentum - Management indicated that demand remains solid across all categories, with particular strength in pro-oriented projects and premium offerings [93][94] Question: Price cost timing and inflation offset - Management clarified that they expect to fully offset inflation in the first quarter of 2022 through cost improvement and pricing actions, with a focus on maintaining margins [100][102] Question: Inflation dynamics and impact on Cabinets - Management noted that inflation has significantly impacted costs, particularly in materials and freight, affecting margins in the Cabinets segment [118][120]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2021 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 1-35166 FORTUNE BRANDS HOME & SECURITY, INC. (Exact name of Registrant as specified in its charter) Delaware 62-1411546 (State or other jur ...