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Fortune Brands Home & Security CEO Christopher Klein on the momentum in the housing market.
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-- the strength -- housing is also helping companies that make products for the home Fortune Brands home and security makes cabinets -- -- -- and it's had a phenomenal year.
Shares of the company op more than 70% near -- 52 week high.
The CEO Chris Klein joining us now to talk about a Chris like you posted some solid fourth quarter numbers such as we say shares up 70%.
Over the past year.
Does this truly reflect the improvement it was seeing in the housing industry.
Absolutely we've -- not real strength -- new construction.
Really build throughout 2012 and that momentum is coming under thirteen.
About 30% of our business is new construction.
The other 70% is the repair and model side of the marketplace.
Other current -- market is grown maybe three to 4%.
So not as strong as as -- 40% new construction market.
But put them together and we were up 8% last year.
And we're projecting up is strong.
Single digits this year so yeah that momentum continues that sounds very encouraging that we haven't seen a strong rebound -- in not.
Hope rebuilding which is inching which also would be a big audio product line now why do you think that is.
The other parent model side is more tied to the general economy and so it's consumer confidence and its access to credit.
It's their willingness to step up and do big project like total kitchen remodel.
And while we're seeing signs of life there it's it's definitely positive it's just not at the same pace -- new construction.
New construction right now is really being driven I think by supply demand imbalance across the country.
Would you stop building a lot of homes and are running out of a lot of inventory and markets and and that's what's really -- the new construction.
You know you talked customers and homebuilders unsure what are they telling you.
But I think builders are being somewhat cautious they're building to order but frankly their order volume is pretty strong so.
I think they're optimistic but they're they're trying not to get out ahead of themselves.
I think consumers are in the same boat there cautiously optimistic.
But everybody who's lived through this so last five years doesn't want to get too far ahead of themselves.
Can you say live through this we always think about -- calls directly to home builders but for a company like yours how tough is it being.
Throughout this housing downtown.
It's pretty dramatic back in 2006 -- a company of 28000 employees.
Almost five billion in sales.
We -- a massive amount of restructuring took that down to 161000 employees shot over twenty plants across the country sales went down about three billion.
Happy to say that since then we've been growing steadily and -- with the results of last year.
We're back up to about three point six billion in sales and and and really see you know room for growth ahead of us say allow some 121000 jobs are you hopeful -- perhaps you can -- as some of those people back.
Absolutely right what we'll be prudent and -- market ahead of ourselves but.
But -- an -- com we'll bring -- second shifts will start to hire back in the good news is a lot of these are American jobs.
So of our 161000 employees 121000 RRR in the US and and so as the economy goes and grow as will be -- people and that's pretty -- those those are much better days in the days we saw in 2007.
Through the other.
No kidding I can tell by the smiling of face and listen do you think this will continue through this year -- beyond do you see any headwinds out that.
I I think we see good consistent growth and new construction.
Under Kerry models side it's really tied it to the broader economy -- so clearly there's still some headwinds in the broader economy.
But we're optimistic that that starts to improve over time we do consumer research and consumers are still passionate about their homes.
They want to put in under -- and new bathroom.
It's just they're waiting for the confidence in the right time to do it right well thank you so much -- -- decline with Fortune Brands home and security a great story and thank you for joining us.
Thank you for.
