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The BoD of $FBHS authorized the repurchase of up to $250MM of shares of its common stock over the next two years. The company has about $300MM existing from a prior authorization that expires Feb. 28, 2019, bringing the total share repurchase authorization to about $550MM.
The BoD of $FBHS declared a quarterly cash dividend of $0.20 per common share. The dividend is payable on March 14, 2018, to stockholders of record as of Feb. 23, 2018. The 11% increase in the quarterly dividend from $0.18 to $0.20, represents the fifth consecutive year the company has had a double digit increase in its dividend rate.
$FBHS expects full-year 2017 sales growth in the range of 6-8% and raised its expectation for EPS before charges/gains to be in the range of $3.00-3.12, which compares to $2.75 a year ago. The increase in EPS outlook includes a $0.04 benefit from the impact of stock-based compensation on tax rate and $0.02 from stronger than expected 1Q17 results.
Home and security products company $FBHS posted higher 1Q17 earnings, helped by revenue increase and operating margin improvements. Net income increased 22.88% to $77.4MM, or $0.50 per share from $61MM, or $0.38 per share a year ago. Revenue increased 7.25% YoY to $1.19Bil. Excluding items, $FBHS earned $0.53 per share.
$FBHS BoD authorized the repurchase of up to $300MM in shares over the next two years on the open market or in privately negotiated transactions. The authorization is in effect until February 28, 2019. The $196MM remaining under the existing share repurchase authorization will be in effect until early 2018.
$FBHS FY17 annual outlook is based on a U.S. home products market growth assumption of 6-7% and an assumption of 5-6% growth for our total global market. $FBHS expects its FY17 sales growth to be in the range of 6-8% and EPS before charges/gains to be in the range of $2.95-3.0, the midpoint of which is 14% higher than prior year.
In 3Q16, in $FBHS’ Cabinet segment, sales were flat to the prior year. For the Plumbing segment, sales were up 7% with solid mix and strong operating margin. In the Doors segment, reported sales were up 4%. Security segment sales increased 6% from 4Q15.
For full-year 2016, $FBHS assumes that the home products market, which impacts 70% of its sales, will grow at a combined rate of around 6%. For the near term, in the home products market, the company expects strong underlying demand, some constraints in skilled labor and significant levels of single family new construction activity.
$FBHS said since late September and through October, the company has seen the pace of orders across its business strengthen. In 3Q16, the market for home products grew at the lower end of the pace expected. $FBHS estimates that repair and remodel activity grew at around 4% and new construction grew as expected.
$FBHS narrowed its 2016 EPS outlook, before charges and gains, to $2.72 - $2.76 on sales growth of 9 - 10%. The company said it narrowed the outlook due to slower summer repair and remodel activity. The Company expects to generate free cash flow of approximately $400MM for the full year 2016.