AMERICAN BRANDS SECOND QUARTER EARNINGS; E.P.S. FROM ONGOING OPERATIONS UP 15% TO 63 CENTS; EXPECTS 17%+ INCREASE IN 1995 E.P.S. FROM ONGOING OPERATIONS.OLD GREENWICH Old Greenwich is a neighborhood or section in the southeast corner of Greenwich in Fairfield County, Connecticut, United States. The Old Greenwich Railroad Station serves commuters in the neighborhood. , CT--(BUSINESS WIRE)--July 24, 1995--American Brands, Inc. (NYSE-AMB) today announced that earnings per Common share from ongoing operations for the quarter ended June June: see month. 30, 1995 rose 15% to 63 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. , compared with 55 cents per share for the second quarter of 1994. Fully diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of rose 13% to 62 cents. Sales from ongoing operations declined 2%, but excluding businesses sold or pending disposition, sales would have been up 9%. Income from ongoing operations rose 6% to $119 million. For the six months, earnings per share from ongoing operations were $1.23, up 18% from $1.04 last year. Fully diluted earnings per share rose 16% to $1.21. Sales from ongoing operations were up 2%, but excluding businesses sold or pending disposition, sales would have been up 11%. Income from ongoing operations rose 11% to $236 million. Ongoing operations for 1994 excludes results from Franklin Life, which was sold in January January: see month. 1995 and was accounted for as a discontinued operation discontinued operation A segment of a business that has been abandoned or sold or for which plans for one or another of these actions have been approved. See also continuing operations. , and treats The American Tobacco Company The American Tobacco Company was founded in 1890 by J. B. Duke as a merger between a number of tobacco manufacturers including Allen and Ginter and Goodwin & Company. The company was one of the original 12 members of the Dow Jones Industrial Average in 1896. , which was sold in December December: see month. 1994, as if it were a discontinued operation. Net income, compared with 1994 results including discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. and The American Tobacco Company, declined 29% in the quarter and 26% for the six months. Fluctuations in exchange rates for foreign currencies, primarily the British pound, favorably fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. affected sales, net income and E.P.S. by $100 million, $5 million and 3 cents, respectively, in the quarter, and by $221 million, $12 million and 6 cents for the six months. Lower average Common shares outstanding benefited E.P.S. by 4 cents in the quarter and 6 cents for the six months. "Interest and related expenses" and "Other (income) expenses, net" benefited substantially from the disposition proceeds. Conversely con·verse 1 intr.v. con·versed, con·vers·ing, con·vers·es 1. To engage in a spoken exchange of thoughts, ideas, or feelings; talk. See Synonyms at speak. 2. , the comparison was adversely affected by an increase in the effective income tax rate for the quarter to 36.3% from 30.3% a year ago; last year's quarter reflected higher reversals of tax provisions no longer required. For the six months, the effective rate was 39.3% versus 36.2% last year. Chairman and Chief Executive Officer Thomas (language) Thomas - A language compatible with the language Dylan(TM). Thomas is NOT Dylan(TM). The first public release of a translator to Scheme by Matt Birkholz, Jim Miller, and Ron Weiss, written at Digital Equipment Corporation's Cambridge Research Laboratory runs C. Hays Hays, city (1990 pop. 17,767), seat of Ellis co., W central Kans.; inc. 1885. It is a rail, trade, and medical center in a grain, cattle, and oil area. Manufactures include electronic equipment, plastics, feeds, medical supplies, aircraft, and motorcycles. said: "We have continued to move aggressively to build shareholder value, with another strong gain in ongoing earnings per share; solid performance from most operations, including a 9% overall increase in sales, excluding businesses sold or pending disposition; substantial share repurchases Share Repurchase A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares. This is usually an indication that the company's management thinks the shares are undervalued. , and continued sale of nonstrategic assets. "Our principal operations all achieved growth in operating company operating company A business that engages in transactions with outsiders. contribution in the first half, with double-digit dou·ble-dig·it adj. Being between 10 and 99 percent: double-digit inflation. increases recorded by brands that represented nearly two-thirds of our consolidated contribution: office products and golf and leisure as well as by international tobacco, which benefited from favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. foreign exchange. "Earnings per share growth has been accelerated by aggressive share repurchases. Under the 20 million share authorization The right or permission to use a system resource; the process of granting access. See access control. , we have now purchased 16.3 million shares, and, subject to market conditions, we expect to complete that authorization before the end of this year. In addition, we have authority to purchase a further five million shares this year, and, subject to market conditions, we may well purchase those shares as well. Three months ago, holders of the $200 million 5.75% Convertible Debentures Convertible Debenture Any type of debenture that can be converted into some other security. Notes: For example, a convertible bond can be converted into stock. due April 2005 exercised a one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. put, which resulted in an extraordinary charge of 1 cent per share and had the effect of reducing fully diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. shares by 5.1 million. So fully diluted shares have been reduced by more than 21 million, or more than 10%, thus far in 1995. "We have also been moving aggressively with dispositions. In May, Prestige housewares house·wares pl.n. Cooking utensils, dishes, and other small articles used in a household, especially in the kitchen. was sold. A smaller U.K. operation was sold in February February: see month. , and we're we're Contraction of we are. we're we are moving ahead with the pending disposition of Gallaher's retail operations. "In the second quarter, contribution from our U.K.-based Gallaher Tobacco brands was up 8% in dollars and 2% in sterling. Profits benefited from an April cigarette price increase, averaging about 5% to Gallaher, as well as ongoing productivity improvements. These factors more than offset cigarette unit volume declines in the U.K. as well as in the C.I.S., where sales are opportunistic opportunistic /op·por·tu·nis·tic/ (op?er-tldbomacn-is´tik) 1. denoting a microorganism which does not ordinarily cause disease but becomes pathogenic under certain circumstances. 2. . For the six months, Gallaher's U.K. cigarette volume declined 1.6%, and worldwide volume declined 3.3%. U.K. industry consumer sales for the six months are estimated to have declined in the range of 2.5%, and Gallaher's estimated share was stable at approximately 39.5% for the third successive quarter. In June, Gallaher strengthened premium-priced Benson Benson may mean: Places in England:
n. A long narrow pillow or cushion. tr.v. bol·stered, bol·ster·ing, bol·sters 1. To support or prop up with or as if with a long narrow pillow or cushion. 2. its price-value Berkeley Berkeley (bûr`klē), city (1990 pop. 102,724), Alameda co., W Calif., on the E shore of San Francisco Bay just N of Oakland; inc. 1878. Originally (1820) part of a Spanish rancho, the site was purchased by Americans in 1853. brand with the launch of Berkeley King Size. "Distilled spirits contribution increased 6% in the quarter, with increases at both Jim Beam Jim Beam is a brand of bourbon whiskey, distilled in Clermont, Kentucky. This brand of whiskey has been distilled since 1795. The Jim Beam brand is owned by Beam Global Spirits & Wine, which is in turn owned by holding company Fortune Brands. Brands and Whyte & Mackay Mackay (məkī`), city (1991 pop. 40,250), Queensland, NE Australia on the Pioneer River. A port city, Mackay exports sugar, beef, and coal. . Jim Beam, the second largest distilled spirits company in the U.S., achieved a 1% increase in contribution despite aggressive marketing investments, particularly for Jim Beam bourbon Bourbon (b  rbôN`), European royal family, originally of France; a cadet branch of the Capetian dynasty. , the world's leading bourbon,
which is celebrating its 200th anniversary. Beam continued to achieve
strong results in international markets. International case shipments
were up 13.4%, led by particularly strong gains in Australia Australia (ôstrāl`yə), smallest continent, between the Indian and Pacific oceans. With the island state of Tasmania to the south, the continent makes up the Commonwealth of Australia, a federal parliamentary state (2005 est. pop. and
Germany, its two largest overseas markets. International contribution
was up 9% and represented 24% of Beam's total contribution in the
quarter. Although competitive conditions remain intense in the U.S.,
Beam has increased prices in selected regional markets. Domestic case
sales were up slightly in the quarter, and Beam has continued to
introduce new products. After Shock, an innovative imported premium
cordial cordial: see liqueur. , is off to a particularly promising start, with over one million
bottles sold in its first three months of distribution.
"Whyte & Mackay, which was recently ranked as the number one supplier of scotch scotch 1 tr.v. scotched, scotch·ing, scotch·es 1. To put an abrupt end to: The prime minister scotched the rumors of her illness with a public appearance. 2. in the U.K. market, achieved substantially higher contribution in the quarter, up 53% in dollars and 45% in sterling, reflecting the timing of trade purchases last year. Underlying competitive conditions remain difficult, particularly in the U.K. Late last month, we announced new management at Whyte & Mackay with the election of Kenneth Hitchcock, who had a superb record as Managing Director of Jim Beam's Australian Australian pertaining to or originating in Australia. Australian bat lyssavirus disease see Australian bat lyssavirus disease. Australian cattle dog a medium-sized, compact working dog used for control of cattle. subsidiary, as Chairman and Chief Executive. "As we noted last month, orders at the MasterBrand hardware and home improvement group softened soft·en v. soft·ened, soft·en·ing, soft·ens v.tr. 1. To make soft or softer. 2. To undermine or reduce the strength, morale, or resistance of. 3. significantly in the quarter, consistent with the general slowdown For articles with similar titles, see Slow Down (disambiguation). A slowdown is an industrial action in which employees perform their duties but seek to reduce productivity or efficiency in their performance of these duties. reported at home centers as well as in new construction, and reflecting significant inventory reductions by the trade. Including the reversal of reserves primarily related to a joint venture, contribution was down 6% in the second quarter but was up 2% for the six months. Particularly affected were Moen, the number one faucet brand in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. , which has been investing heavily in new product, manufacturing and marketing programs, and Aristokraft, which is number two in kitchen and bath cabinets in the U.S. Earlier this month, Moen, which has been gaining market share in North America, completed arrangements for a joint venture to manufacture and sell Moen-branded products in the People's Republic People's Republic n. A political organization founded and controlled by a national Communist party. of China. Master Lock, the world's leading padlock brand, and Waterloo Waterloo, town, Belgium Waterloo (vä`tərlō), commune (1991 pop. 27,860), Walloon Brabant prov., central Belgium, near Brussels. The battle of Waterloo (see Waterloo campaign) was fought just south of there on June 18, 1815. , the world leader in tool storage products, both achieved higher contribution in the quarter and six months. Master Lock continues to benefit from strong growth in its door hardware line, which achieved a 19% sales increase in the quarter. "ACCO ACCO American College of Chiropractic Orthopedists ACCO Association of County Commissioners of Oklahoma ACCo American Cyanamid Company ACCO Adenoid Cystic Carcinoma Organization ACCO American Clip Company ACCO Assistant Central Control Officer , the world leader in office supplies Office supplies is the generic term that refers to all supplies regularly used in offices by businesses and other organizations, from private citizens to governments, who works with the collection, refinement, and output of information (colloquially referred to as "paper work"). , again achieved strong market and profit gains. Contribution rose 10% in the quarter. In North America, a double-digit sales increase was achieved despite a reduction in trade inventories, following a buildup build·up also build-up n. 1. The act or process of amassing or increasing: a military buildup; a buildup of tension during the strike. 2. in the first quarter. Solid sales gains in Europe were led by strength on the Continent. ACCO is continuing to gain share with key customers, with major gains achieved by the Wilson Jones Charles Wilson Jones (born April 29, 1914 in Wrexham, Wales, died January 9, 1986 in Birmingham) was a Welsh professional footballer who played as an centre-forward for Wrexham, Birmingham and Nottingham Forest in the Football League, and for Wales at international level. brand of ring binders ring binder Noun a loose-leaf binder with metal rings that can be opened to insert perforated paper ring binder n → carpeta de anillas ring binder n , and is benefiting from significant new products, such as the Day-Timer Organizer software line, which is gaining wider distribution in superstores This is a list of superstores by country. Multi-national
v. es·ca·lat·ed, es·ca·lat·ing, es·ca·lates v.tr. To increase, enlarge, or intensify: escalated the hostilities in the Persian Gulf. v.intr. substantially in the first half, ACCO has been benefiting from its ongoing restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). , improved customer service levels and price increases. During the past month, ACCO announced two fill-in product acquisitions: Silicon Sports, a leading brand in computer accessories such as ergonomic ergonomic - Concerning ergonomics or exhibitting good ergonimics. wrist rests A platform used to raise the wrist above keyboard level for typing. The correct height for a wrist rest is several inches higher than the keyboard (even though almost none of them are). The arms and wrist should be level, and the fingers should be pointing down towards the keyboard. and specialty mouse pads A fabric-covered rubber pad roughly 9" square that provides a smooth surface for rolling a mouse. There are also mouse pads that provide a better surface; for example, 3M makes the Precise Mousing Surface, an ultra-thin mouse pad that is engineered to reduce friction. , and Statx Brands, which are high-technology cleaning and protection products for computers and other office products. These brands are being integrated into ACCO's Kensington computer accessories group. "Titleist and Foot-Joy, the world leader in golf, had another outstanding quarter. Contribution was up 12%, with strong volume increases in all categories. Golf ball units were up 11%, golf gloves were up 11% and golf shoes were up 12%. Titleist has been having exceptional success in aggressively developing its club business. Golf club sales were up 28% for the second successive quarter, backed by excellent acceptance of new products, including the supersize supersize or supersized Adjective larger than standard size Verb [-sizes, -sizing, -sized] to increase the size of (something, such as a standard portion of food) Titleist Howitzer howitzer: see artillery. titanium titanium (tītā`nēəm, tĭ–) [from Titan], metallic chemical element; symbol Ti; at. no. 22; at. wt. 47.88; m.p. 1,675°C;; b.p. 3,260°C;; sp. gr. 4.54 at 20°C;; valence +2, +3, or +4. drivers and Scotty Cameron Scotty Cameron (1962—) is an American golf club maker primarily known for creating putters. Scotty was born in Glendale, California on November 8th, 1962. He later moved to Huntington Beach, where he attended Edison High School. by Titleist putters. On worldwide competitive golf tours, the Titleist ball continues its hottest start ever with 19 wins in 26 U.S. P.G.A. tour events. Worldwide, Titleist was the winning ball at 69 tournaments, more than five times as many as its nearest competitor. "Overall, our prospects are excellent. We have a powerful array of market leading brands, backed by tremendous financial resources. Bolstered by the benefits of our aggressive share repurchases this year, we expect a strong second half, with a particularly strong ongoing E.P.S. comparison in the third quarter. For the full year, we now anticipate that earnings per share will exceed last year's $2.37 ($2.34 fully diluted) from ongoing operations by more than 17%. "Longer term, our goal is to achieve compound earnings per share growth in the range of 10% -- depending on the economy, exchange rate stability and the pricing environment --and we are committed to use our powerful resources to build value for our shareholders. Our operations are generating excellent returns on net operating assets Operating Assets Another term for working capital. , so our principal focus is on internal growth and investment. We are also seeking high return acquisitions, with the principal objective of accelerating the growth of our hardware and home improvement, office products, golf and leisure and distilled spirits businesses. We will also consider whether further share repurchases beyond the current authorizations would be in the best interest of our shareholders. "Gallaher Tobacco continues to contend with substantial U.K. excise tax Excise Tax 1. An indirect tax charged on the sale of a particular good. 2. A penalty tax applied to ineligible transactions in retirement accounts. This penalty is assessed by and paid to the IRS. Notes: 1. increases that have stimulated trading down by consumers in an intensely competitive market. In this situation, Gallaher is moving aggressively to defend its brands, and it will be challenging to achieve profit growth in the last half of the year. Longer term, Gallaher has powerful assets, including its potent position as the market leader, its enviable en·vi·a·ble adj. So desirable as to arouse envy: "the enviable English quality of being able to be mute without unrest" Henry James. brand portfolio, highly effective marketing programs and tremendous cash flow. "In distilled spirits, Jim Beam Brands and Whyte & Mackay continue to cope with difficult home market conditions. Beam's international business continues to perform very well and has excellent potential, and the 200th anniversary programs have further strengthened the image of Jim Beam bourbon, worldwide. We expect modest contribution growth from Beam for the full year. For Whyte & Mackay, as we have been noting, some nonrecurring items benefited 1994 results, principally one-time bulk sales late in the year. So, the fourth quarter comparison will be very difficult, and we anticipate lower contribution for the full year. Nevertheless, we have moved decisively to strengthen the management to vigorously address the issues at Whyte & Mackay. "The MasterBrand hardware and home improvement brands were adversely affected by economic and trade conditions in the second quarter. If the recent decline in interest rates has a favorable impact on the economy, MasterBrand is well positioned to resume solid long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. growth, and contribution for the full year should be ahead of last year's level. "Our ACCO office products brands and Titleist and Foot-Joy golf brands are positioned as world leaders For a list of heads of state, see . World leaders is a MMORPG. The game involves creating a state, joining an alliance and going into war. It is mostly played by players from Israel, China, USA, Britain, Brazil and Saudi-Arabia. . Both should achieve excellent results for the full year." Headquartered in Old Greenwich, Connecticut Connecticut, state, United States Connecticut (kənĕt`ĭkət), southernmost of the New England states of the NE United States. It is bordered by Massachusetts (N), Rhode Island (E), Long Island Sound (S), and New York (W). , American Brands is a focused international consumer products company with powerhouse A fourth-generation language from Cognos that was introduced in the late 1970s for midrange computers. It supports both character-oriented, terminal-based applications as well as Windows clients. Applications developed under PowerHouse can be imported into Cognos' Axiant client/server environment. brands and leading market positions in distilled spirits, hardware and home improvement products, office products, golf and leisure products, and international tobacco. Major brands include Jim Beam and Old Grand-Dad Old Grand-Dad is the name of a bourbon whiskey from Nelson County, Kentucky. The company was created by Raymond B. Hayden and named after his grandfather Basil Hayden, Sr., a well known distiller during his lifetime who is depicted on the front of each bottle. bourbons, DeKuyper cordials, Titleist, Pinnacle pinnacle (pĭn`ĭkəl), minor architectural motif of vertical tapering shape, usually crowning a pier, buttress, or gable. Although sometimes it appears in Renaissance design, as in the Certosa di Pavia, it is almost exclusively a medieval and Foot-Joy golf products, Moen faucets, Master locks, Aristokraft cabinets, ACCO office products including Day-Timer and Swingline, and Benson and Hedges and Silk Cut Silk Cut is brand of low tar cigarette produced by the Gallaher Group. The packaging is characterised by a distinctive stark white packet with the brand name in a purple square. Tobacco only makes up 75% of the filling; the rest is Cytrel. cigarettes. -0-
AMERICAN BRANDS, INC.
(In millions, except per share amounts)
(Unaudited)
Three
Months
Ended June
30,
1995 1994 % Change
Net Sales
International Tobacco (2) $1,334.0 $1,215.4 9.8
Distilled Spirits (2) 315.3 292.9 7.6
Hardware & Home Improve. Prods. 312.2 309.0 1.0
Office Products 259.0 232.7 11.3
Golf & Leisure Products 192.4 167.9 14.6
Other Businesses (3)(5) 181.8 417.4 (56.4)
--------- --------- -------
Ongoing Operations 2,594.7 2,635.3 (1.5)
Domestic Tobacco (2)(4) - 405.6 -
--------- --------- -------
Total Continuing Operations 2,594.7 3,040.9 (14.7)
========= ========= =======
Operating Company Contribution
International Tobacco 101.6 94.1 8.0
Distilled Spirits 56.5 53.2 6.2
Hardware & Home Improve. Prods. 49.6 52.7 (5.9)
Office Products 13.8 12.5 10.4
Golf & Leisure Products 37.0 33.1 11.8
Other Businesses (3)(5) 3.9 4.7 (17.0)
--------- --------- -------
Ongoing Operations 262.4 250.3 4.8
Domestic Tobacco (4) - 70.2 -
--------- --------- -------
Total Continuing Operations 262.4 320.5 (18.1)
========= ========= =======
Amortization of Intangibles 24.1 23.9 0.8
--------- --------- -------
Operating Income 238.3 296.6 (19.7)
--------- --------- -------
Interest and Related Expenses 40.1 55.5 (27.7)
Corporate Admin. Expenses 20.0 21.0 (4.8)
Other (Income) Expenses, Net (8.9) 2.2 -
--------- --------- -------
Income Before Income Taxes 187.1 217.9 (14.1)
Income Taxes 68.0 66.0 3.0
--------- --------- -------
Income From Continuing Opers.(1) 119.1 151.9 (21.6)
Discontinued Operations (6) - 12.0 -
Extraordinary Item (7) (2.7) - -
--------- --------- -------
Net Income 116.4 163.9 (29.0)
========= ========= =======
Earnings per Common Share
Primary
Income From Continuing Opers.(1) $0.63 $0.75 (16.0)
Discontinued Operations (6) - 0.06 -
Extraordinary Item (7) (0.01) - -
--------- --------- -------
Net Income $0.62 $0.81 (23.5)
Fully diluted
Income From Continuing Opers.(1) $0.62 $0.74 (16.2)
Discontinued Operations (6) - 0.06 -
Extraordinary Item (7) (0.01) - -
--------- --------- -------
Net Income $0.61 $0.80 (23.8)
Avg. Common Shares Outstanding Primary 188.0 201.8 (6.8) Fully Diluted 195.6 213.4 (8.3)
(NOTES FOLLOW)
AMERICAN BRANDS, INC.
(In millions, except per share amounts)
(Unaudited)
Six Months
Ended June
30,
1995 1994 % Change
Net Sales
International Tobacco (2) $2,857.1 $2,545.7 12.2
Distilled Spirits (2) 570.5 533.5 6.9
Hardware & Home Improve. Prods. 634.5 598.3 6.1
Office Products 544.5 465.6 16.9
Golf & Leisure Products 342.3 301.4 13.6
Other Businesses (3)(5) 438.3 815.2 (46.2)
--------- --------- -------
Ongoing Operations 5,387.2 5,259.7 2.4
Domestic Tobacco (2)(4) - 782.1 -
--------- --------- -------
Total Continuing Operations 5,387.2 6,041.8 (10.8)
========= ========= =======
Operating Company Contribution
International Tobacco 250.4 220.3 13.7
Distilled Spirits 92.3 91.6 0.8
Hardware & Home Improve. Prods. 103.1 101.3 1.8
Office Products 36.3 31.9 13.8
Golf & Leisure Products 60.7 54.6 11.2
Other Businesses (3)(5) 5.9 10.0 (41.0)
--------- --------- -------
Ongoing Operations 548.7 509.7 7.7
Domestic Tobacco (4) - 125.6 -
--------- --------- -------
Total Continuing Operations 548.7 635.3 (13.6)
========= ========= =======
Amortization of Intangibles 48.2 47.8 0.8
--------- --------- -------
Operating Income 500.5 587.5 (14.8)
--------- --------- -------
Interest and Related Expenses 86.1 112.8 (23.7)
Corporate Admin. Expenses 42.2 28.7 47.0
Other (Income) Expenses, Net (16.0) 4.9 -
--------- --------- -------
Income Before Income Taxes 388.2 441.1 (12.0)
Income Taxes 152.5 159.7 (4.5)
--------- --------- -------
Income From Continuing Opers.(1) 235.7 281.4 (16.2)
Discontinued Operations (6) - 31.7 -
Extraordinary Item (7) (2.7) - -
--------- --------- -------
Net Income 233.0 313.1 (25.6)
========= ========= =======
Earnings per Common Share
Primary
Income From Continuing Opers.(1) $1.23 $1.39 (11.5)
Discontinued Operations (6) - 0.16 -
Extraordinary Item (7) (0.01) - -
--------- --------- -------
Net Income $1.22 $1.55 (21.3)
Fully diluted
Income From Continuing Opers.(1) $1.21 $1.37 (11.7)
Discontinued Operations (6) - 0.15 -
Extraordinary Item (7) (0.01) - -
--------- --------- -------
Net Income $1.20 $1.52 (21.1)
Avg. Common Shares Outstanding Primary 191.3 201.8 (5.2) Fully Diluted 201.1 213.5 (5.8)
AMERICAN BRANDS, INC.
NOTES:
(1) Ongoing operations comparisons, excluding results
of Franklin Life which was accounted for as a
discontinued operation and treating The American
Tobacco Company as if it were a discontinued
operation, are as follows (in millions, except
EPS):
Income from Continuing Operations Before Extraordinary Item:
Three Months Six Months
1995 1994 %Change 1995 1994 %Change
Income:
Ongoing $119.1 $112.7 5.7 $235.7 $211.7 11.3
Operations
Domestic Tobacco - 39.2 - - 69.7 -
As Reported $119.1 $151.9 (21.6) $235.7 $281.4 (16.2)
Earnings per Common share:
Primary
Ongoing $0.63 $0.55 14.5 $1.23 $1.04 18.3
Operations
Domestic Tobacco - 0.20 - - 0.35 -
As Reported $0.63 $0.75 (16.0) $1.23 $1.39 (11.5)
Fully Diluted
Ongoing $0.62 $0.55 12.7 $1.21 $1.04 16.3
Operations
Domestic Tobacco - 0.19 - - 0.33 -
As Reported $0.62 $0.74 (16.2) $1.21 $1.37 (11.7)
Ongoing operations continue to include results of
nonstrategic businesses disposed of including
Optical, Acushnet Rubber Division and Housewares.
(2) Federal and foreign excise taxes included in net
sales for the three months and six months ended
June 30 are as follows (in millions):
Three Months Six Months
1995 1994 1995 1994
International Tobacco $1,021.7 $ 921.5 $2,197.6 $1,949.8
Domestic Tobacco - 116.4 - 212.7
Distilled Spirits 117.6 115.4 219.4 206.1
$1,139.3 $1,153.3 $2,417.0 $2,368.6
(3) On July 12, 1994, Dollond & Aitchison Group PLC,
a subsidiary of Gallaher Limited, was sold for
total consideration of $146 million, which
approximated the carrying value of the company.
AMERICAN BRANDS, INC.
NOTES (CONTINUED):
(4) On December 22, 1994, the Company sold The
American Tobacco Company, its domestic tobacco
business, for $1 billion in cash, before related
expenses. An after-tax gain of $508.3 million,
or $2.52 per Common share, was recognized on the
transaction in the fourth quarter of 1994.
(5) The Company announced plans to dispose of a
number of nonstrategic businesses and product
lines, including U.K.-based Forbuoys and
Prestige, both subsidiaries of Gallaher Limited,
and in the fourth quarter of 1994 recorded an
after-tax loss of $241.3 million, or $1.20 per
Common share, substantially non-cash, based on
the anticipated sale of these businesses for
proceeds in the range of $150-$175 million. The
sale of Prestige was completed on May 2, 1995.
(6) On November 30, 1994, the Company entered into an
agreement to sell its Franklin life insurance
business for $1.17 billion in cash, before
related expenses. A net loss of $206.8 million
was recognized on the transaction in the fourth
quarter of 1994 in discontinued operations. The
sale was completed on January 31, 1995.
(7) On April 11, 1995, holders of $199.5 million of
the $200 million 5 3/4% Eurodollar Convertible
Debentures, Due 2005, exercised their right to
"put" their debentures at a price of 114.74%,
plus accrued interest. This resulted in a total
payment by the Company of $240.4 million,
including premium and accrued interest, and had
the effect of reducing fully diluted shares by
5.1 million. The early extinguishment of debt
resulted in a charge of $4.1 million ($2.7
million net of taxes).
(8) The Company and its subsidiaries are defendants
in various lawsuits associated with their
business and operations, including actions based
upon allegations that human ailments have
resulted from tobacco use. It is not possible to
predict the outcome of the pending litigation,
but management believes that there are
meritorious defenses to the pending actions and
that the pending actions will not have a material
adverse effect upon the results of operations,
cash flow or financial condition of the Company.
These actions are being vigorously contested.
On December 22, 1994, the Company sold The
American Tobacco Company subsidiary to Brown &
Williamson Tobacco Corporation, a wholly-owned
subsidiary of B.A.T Industries p.l.c. In
connection with the sale, Brown & Williamson
Tobacco Corporation and The American Tobacco
Company agreed to indemnify the Company against
claims arising from smoking and health and fire
safe cigarette matters relating to the tobacco
business of The American Tobacco Company.
AMERICAN BRANDS, INC.
CONDENSED CONSOLIDATED
BALANCE SHEET
(In millions)
June 30, December 31,
1995 1994
Assets (Unaudited)
Current Assets
Cash and Cash Equivalents $634.9 $110.1
Accounts Receivable, Net 1,358.5 1,067.9
Inventories 1,397.0 2,015.7
Net Assets of Discontinued Operations 0.0 1,170.0
Other Current Assets 212.3 307.2
-------- --------
Total Current Assets 3,602.7 4,670.9
Property, Plant and Equipment, Net 1,192.1 1,212.7
Intangibles Resulting From
Business Acquisitions 3,493.2 3,549.1
Other Assets 404.8 361.7
-------- --------
Total Assets $8,692.8 $9,794.4
========= =========
Liabilities and Stockholders' Equity
Current Liabilities
Short-Term Debt $64.6 $180.6
Current Portion - Long-term Debt 341.1 525.2
Other Current Liabilities 2,164.5 2,409.7
-------- --------
Total Current Liabilities 2,570.2 3,115.5
Long-Term Debt 1,436.3 1,512.1
Other Long-Term Liabilities 543.3 529.3
-------- --------
Total Liabilities 4,549.8 5,156.9
Stockholders' Equity 4,143.0 4,637.5
-------- --------
Total Liabilities and Stockholders' Equity $8,692.8 $9,794.4
========= =========
CONTACT: American Brands, Old Greenwich Roger W. W. Baker, (203) 698-5148 Daniel A. Conforti, (203) 698-5132 |
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