Fortune’s Home and Security Stands Alone; Interview with Top ExecOctober 4th, 2011 by DWM Magazine
Fortune Brands Home & Security unit began its first full day as an independent company today, following its spin-off from Fortune Brands yesterday. The company’s stock trades today on the New York Stock Exchange under the symbol “FBHS.” The brands and products included under this umbrella are Simonton Windows, Therma-Tru entry door systems, Master Lock, MasterBrand cabinets and Moen faucets.
To commemorate the company’s spin-off and its new stock listing, Christopher J. Klein, chief executive officer, Fortune Brands Home & Security, along with other members of the FBHS management team, will ring the NYSE’s Opening Bell on Friday, October 7, at 9:30 a.m. A live webcast of the event will be available.
Fortune Brands had announced late last year that the spin-off was in the works.
DWM magazine spoke with Klein earlier today to learn more about the change, and how this will affect its Therma-Tru and Simonton brands.
DWM: What are the most significant ways in which this spin-off will be positive for the company as a separate unit?
Klein: First off is the degree of focus in terms of allocation of capital. Our home unit was always funding its top priorities but inevitably there was a second tier of opportunities that sometimes were unmet, and we now have the opportunities to fund those as well.
Additionally, we are not highly leveraged as many companies are. We have a lot of financial growth opportunities and, again now we don’t have to compete for capital.
DWM: What brands offer the best opportunities?
Klein: Across the board within each there are opportunities in adjacent markets and adjacent product categories. For example, there may be fast growth internationally for a company like Moen or MasterLock. We have always invested heavily in product development and that will be about the same. But there are future opportunities in the adjacent markets. We will also look at acquisitions—initially it will probably be the smaller ones. As our cash flow improves we can look at larger companies.
DWM: What is Fortune doing differently to perform relatively well in challenging times?
Klein: We did a couple of things: We restructured faster. We started that process in 2007 and pressed hard in 2008. By the middle of 2009 we were done with the bulk of that. In the last two years we were focused on growth so we now have the ability to start growing again. We are not waiting for a recovery to make money. Although the market has been tepid since 2009 we are positioned for growth.
DWM: What can you tell us about future plans for the Simonton and Therma-Tru brands?
Klein: Those are both very important to us. The window and door industry has been hit very hard. The energy tax credit helped last year as it definitely brought demand in 2010—but still it has been challenging. We continue to bring out new products, and 2012 will probably be more normalized.
Therma-Tru is down to one main plant but it is very effective; Simonton recently announced the closure of its Oklahoma plant. We still have a strong national network and offer very strong service.