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Industry & Trends

MasterBrand Cabinets to Separate from Fortune Brands


April 23, 2022 | Bill Esler

Deerfield, IL—Fortune Brands Home & Security, Inc. will separate into two publicly traded companies, spinning off its MasterBrand Cabinets and other cabinetry business into a freestanding publicly-traded firm. Fortune’s cabinet operations reported $777.1 million in revenue, rising 13 percent during the first quarter ended March 31, 2022.

Fortune Brands’ Board of Directors authorized the company to pursue a tax-free spin-off of its cabinets business into a standalone publicly traded company. Upon closing of the proposed separation, shareholders would hold interests in two leading companies. The separation represents the Company’s next chapter of outstanding value creation. The result will be two well-positioned, leading companies with exceptional potential.

New Fortune Brands will bring brand and innovation excellence to super-charged categories, leveraging secular growth themes of water management, outdoor living, material conversion and science, and connected products. Additionally, shareholders would hold interests in North America’s leading cabinets company delivering top-tier performance through operational excellence. A potential separation is subject to further board approval and other customary conditions and is expected to take approximately 12 months to complete. Management will discuss the separation as part of its first quarter earnings call later today. An investor presentation highlighting the proposed separation, as well as first quarter earnings call details, can be found in the investor section on the Company’s website at

“We are excited to be taking the next step in our value creation journey for stakeholders. There is much work to be done, but together with the rest of our Board, I believe that this separation will enable each company to recognize its full potential and unlock even greater long-term stakeholder value,” said Nicholas Fink, chief executive officer, Fortune Brands. “Each company will pursue independent paths with fit-for-purpose strategies supported by thoughtful investments. Our entire Company has delivered exceptional results over the past ten years, and our cabinets business has implemented the capabilities and demonstrated the performance required to thrive as an independent entity. The separation will result in two world class businesses with the scale, winning strategies, capabilities, and leadership to sustain and accelerate value creation. We are very excited for the future.”


The Company will be advised on the proposed separation by Ardea Partners, Barclays, Rothschild & Co, and Sidley Austin LLP.

First Quarter 2022

For the first quarter of 2022, sales were $1.9 billion, an increase of 8 percent over the first quarter of 2021. Earnings per share were $1.34, compared to $1.26 in the prior-year quarter, an increase of 6 percent. EPS before charges / gains were $1.31, compared to $1.36 the same quarter last year, a decrease of 4 percent. Operating income was $253.4 million, compared to $248.4 million in the prior-year quarter, an increase of 2 percent. Operating income before charges / gains was $249.6 million, compared to $261.8 million the same quarter last year, down 5 percent. Operating margin was 13.2 percent, compared to 14.0 percent in the first quarter of 2021. Operating margin before charges / gains was 13.0 percent, compared to 14.8 percent in the first quarter of 2021.

For each segment in the first quarter of 2022, compared to the prior-year quarter:

Water Innovations (formerly the Global Plumbing Group) sales increased 4 percent, with no material FX impact in the period. Results were driven by sales growth across all major markets. Operating margin before charges / gains was 23.3 percent.
Outdoors & Security sales increased 8 percent, driven by double-digit sales growth in doors and security products. Operating margin before charges / gains was 11.2 percent.
Cabinet sales increased 13 percent, driven by growth across stock and make-to-order. Operating margin before charges / gains was 9.5 percent.
“Our teams again delivered excellent results in an extremely dynamic environment, demonstrating our commitment to serving our valued channel partners and consumers,” said Fink. “Demand remains robust across the portfolio and the consumer is continuing to invest in the home. We remain fully aware of the potential challenges from rising interest rates and continued inflation on consumers in the near-term, and our teams are actively managing our businesses to create value and deliver regardless of the environment. Demand and demographic fundamentals for housing remain favorable and support long-term growth and margin expansion going forward.”

Balance Sheet and Liquidity

At the end of the quarter, net debt was $3.0 billion and net debt to EBITDA was 2.3x. The Company had $378 million in cash and $553 million of availability under its revolving credit facility.

During the first quarter, the Company announced a $750 million share repurchase reauthorization. During the quarter, the Company repurchased approximately $380 million in common stock and year-to-date has repurchased approximately $405 million in common stock.

Additionally, on March 28, 2022, the Company announced it had priced $900 million in senior unsecured notes and used the proceeds and other liquidity sources to retire an outstanding term loan.

Annual Outlook for 2022

The Company is increasing the midpoint of full-year EPS by $0.05 to a range of $6.40 to $6.60, reflecting the impact of share repurchases net of interest expense and tax items. The midpoint implies EPS growth of 13 percent versus prior year. The Company is maintaining its operational guidance for the year.

“Our strong business model and track record of performance have proven resilient in a variety of complex market conditions over the past few years,” said Patrick Hallinan, chief financial officer, Fortune Brands. “We believe in the strength of long-term housing fundamentals, and we are confident in our leadership’s ability to seize on the opportunities and mitigate the challenges that may arise in the fluid near-term environment. We will continue to utilize our strength to position our Company for success and opportunistically deploy capital to drive value creation.”

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, Water Innovations, Outdoors & Security, and Cabinets, Fortune Brands’ 28,000 associates work with a purpose to fulfill the dreams of home.

The Company’s growing portfolio of complementary businesses and innovative brands includes Moen and the House of Rohl within Water Innovations; 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 to learn more about FBHS, its brands and how the Company is accelerating its environmental, social and governance (ESG) commitments.


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