Highlights from operations:

• 3Q 2021 sales increased 20 percent year-over-year and approached $2.0 billion
• 3Q 2021 earnings per share (EPS) increased 24 percent to $1.45 per share versus the prior-year-quarter; EPS before charges / gains increased 25 percent year-over-year to $1.49
• Company on track to deliver both record performance in 2021 and long-term growth and margin targets
• Company revising 2021 full year financial outlook to reflect near-term supply chain and labor availability challenges

Fortune Brands Home & Security, Inc. (NYSE: FBHS, the “Company”, or “Fortune Brands”), an industry-leading home and security products company, today announced third quarter 2021 results.

“Our teams produced very strong results in an extremely challenging environment,” said Nicholas Fink, chief executive officer, Fortune Brands. “Demand remains strong across our portfolio and our investments in innovation, capacity, and digital transformation continue to accelerate the value proposition behind our world-class brands. While supply chain and labor availability headwinds have increased, we are addressing these challenges head-on. We continue to develop and deploy our Fortune Brands Advantage capabilities to further reduce complexity and increase our efficiencies in global sourcing. These actions will help offset these near-term headwinds while also increasing our ability to invest further. The steps we are taking position the Company for continued outperformance and will contribute to achieving our long-term goals in this elongating and expanding housing market.”

Third Quarter 2021

For the third quarter of 2021, sales approached $2.0 billion, an increase of 20 percent over the third quarter of 2020. Earnings per share were $1.45, compared to $1.17 in the prior-year quarter. EPS before charges / gains were $1.49, compared to $1.19 in the prior-year quarter, an increase of 25 percent. Operating income was $286.6 million, compared to $240.2 million in the prior-year quarter. Operating income before charges / gains was $293.3 million, compared to $244.2 million in the prior-year quarter, up 20 percent. Operating margin was 14.4 percent, compared to 14.5 percent in the third quarter of 2020. Operating margin before charges / gains was 14.8 percent, even versus the third quarter of 2020.

For each segment in the third quarter of 2021, compared to the prior-year quarter:

• Plumbing sales increased approximately 26 percent, or 23 percent excluding FX, the result of strong performance across the business. Operating margin before charges / gains was 22.6 percent.

• Outdoors & Security sales increased approximately 30 percent, driven by the addition of LARSON and organic growth of 6 percent. Operating margin before charges / gains was 15.6 percent.

• Cabinets sales increased by over 9 percent, driven by strong growth across all price points. Operating margin before charges / gains was 9.7 percent.

Balance Sheet, Liquidity and Share Repurchase Authorization

At the end of the quarter, net debt was $2.2 billion and net debt to EBITDA was 1.7x. The Company had $461 million in cash and $410 million of availability under its revolving credit facility.

During the third quarter, the Company repurchased $114 million in common stock and as of October 26, 2021, has repurchased over $380 million in common stock during 2021.

Update to Annual Outlook for 2021

The Company expects to continue outperforming a fundamentally strong housing market. The Company now anticipates delivering full-year sales growth in the range of 24.5 percent to 25.5 percent, or 17.5 percent to 18.5 percent excluding the LARSON acquisition. This reflects the Company’s revised assumptions of a global home products market now expanding by approximately 11 percent to 12 percent, including growth in the U.S. home products market of approximately 12 percent to 13 percent.

The Company now expects EPS before charges / gains for the full year to be in the range of $5.63 to $5.73, representing an increase at the midpoint of 36 percent versus a year ago.

For 2021, the Company expects to generate free cash flow of approximately $625 to $675 million.

“Our business remains well positioned to achieve our long-term goals,” said Patrick Hallinan, chief financial officer, Fortune Brands. “While the near-term backdrop has become increasingly dynamic, we have the talent and capabilities to overcome these challenges. We continue to see high consumer demand and multiple pathways for earnings growth. Our balance sheet remains strong, and we have the ability to deploy capital to pursue the best returns for our shareholders.”

About Fortune Brands

Fortune Brands Home & Security, Inc. (NYSE: FBHS), headquartered in Deerfield, IL., is a Fortune 500 company, part of the S&P 500 Index and a leader in the home products industry. With trusted brands and market leadership positions in each of its three operating segments, Plumbing, Outdoors & Security, and Cabinets, Fortune Brands’ 27,500 associates work with a purpose to fulfill the dreams of home.

The Company’s growing portfolio of complementary businesses and innovative brands include Moen and the House of Rohl within the Global Plumbing Group; outdoor living and security products from Therma-Tru, LARSON, Fiberon, Master Lock and SentrySafe; and MasterBrand Cabinets’ wide-ranging offerings from Mantra, Diamond, Omega and many more. Visit www.FBHS.com to learn more about FBHS, its brands and how the Company is accelerating its environmental, social and governance (ESG) commitments.

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

This press release contains certain “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”), regarding general business strategies, market potential, anticipated future financial performance, the potential of our brands and the housing market, and other matters. Statements preceded by, followed by or that otherwise include the words “believes”, “positioned”, “expects”, “estimates”, “plans”, “look to”, “outlook”, “intend”, 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 the current plans and expectations of our management. 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 general business and economic conditions; our reliance on the North American repair and remodel and new home construction activity levels; our reliance on key customers and suppliers; our ability to maintain our strong brands and to develop innovative products while maintaining our competitive positions; our ability to improve organizational productivity and global supply chain efficiency; our ability to obtain raw materials and finished goods in a timely and cost-effective manner; the impact of sustained inflation, including global commodity and energy availability and price volatility; the impact of trade-related tariffs and risks with uncertain trade environments or changes in government and industry regulatory standards; our ability to attract and retain qualified personnel and other labor constraints; the uncertainties relating to the impact of COVID-19 on the Company’s business and results; our ability to achieve the anticipated benefits of our strategic initiatives; our ability to successfully execute our acquisition strategy and integrate businesses that we have and may acquire; and the other factors discussed in our securities filings, including in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2020, filed with the Securities and Exchange Commission. The forward-looking statements included in this release are made as of the date hereof, and except as required by law, we undertake no obligation to update, amend or clarify any forward-looking statements to reflect events, new information or circumstances occurring after the date of this release.

Use of Non-GAAP Financial Information

This press release includes measures not derived in accordance with generally accepted accounting principles (“GAAP”), such as diluted earnings per share before charges / gains, operating income before charges / gains, net sales excluding FX impact, net sales excluding LARSON net sales, operating margin before charges / gains, EBITDA before charges / gains, net debt, net debt to EBITDA before charges / gains, and free cash flow. These measures should not be considered in isolation or as a substitute for any measure derived in accordance with GAAP and may also be inconsistent with similar measures presented by other companies. Reconciliations of these measures to the most closely comparable GAAP measures, and reasons for the Company’s use of these measures, are presented in the attached pages.

Source: Fortune Brands Home & Security, Inc.