Latest news with #Griffon
Yahoo
7 hours ago
- Business
- Yahoo
GFF Q1 Earnings Call: Tariff Mitigation and Asset-Light Model Shape Outlook
Multi-industry consumer and professional products manufacturer Griffon Corporation (NYSE:GFF) fell short of the market's revenue expectations in Q1 CY2025, with sales falling 9.1% year on year to $611.7 million. Its non-GAAP profit of $1.23 per share was 12.5% above analysts' consensus estimates. Is now the time to buy GFF? Find out in our full research report (it's free). Revenue: $611.7 million vs analyst estimates of $618.2 million (9.1% year-on-year decline, 1% miss) Adjusted EPS: $1.23 vs analyst estimates of $1.09 (12.5% beat) Operating Margin: 16.6%, in line with the same quarter last year Market Capitalization: $3.31 billion Griffon's first quarter results were shaped by a return to pre-pandemic seasonality in its Home and Building Products (HBP) segment and ongoing adjustments in Consumer and Professional Products (CPP). CEO Ron Kramer cited the normalization of garage door demand and the segment's ability to maintain EBITDA margins above 30% as evidence of HBP's resilience, emphasizing the impact of steady residential performance and product mix. Management pointed to the launch of new products like the VertiStack Avante garage door as a differentiator, while CPP's profitability improved due to the transition toward an asset-light model and global sourcing. CFO Brian Harris noted that CPP's increased EBITDA was driven by sourcing initiatives and stronger results in Australia, despite persistent softness in North America and the UK. Management acknowledged that volume declines were expected and largely attributed to cyclical trends in both segments. Looking ahead, management remains focused on mitigating the impact of U.S.-China tariffs, especially within the CPP segment. While maintaining full-year guidance, CEO Ron Kramer asserted that tariff exposure is manageable due to HBP's domestic manufacturing base and ongoing supply chain diversification efforts in CPP. He said, 'We expect CPP to mitigate the inflationary effects of trade policy and other headwinds during the remainder of the fiscal year through supplier negotiations, cost management, leveraging existing inventory and, when necessary, taking price actions.' CFO Brian Harris added that supply chain shifts away from China for lawn and garden tools are on track, with similar strategies planned for the fan business by year-end. Overall, management's outlook depends on balancing price realization, cost controls, and maintaining flexibility within a dynamic operating environment. Management identified HBP's stable domestic business and CPP's asset-light transition as key factors influencing results, while highlighting tariff risk management as a top priority for the remainder of the year. HBP segment seasonality returns: HBP revenue reflected a normalization to pre-pandemic seasonal cycles, with the garage door business seeing typical second-quarter softness after last year's weather-driven strength. Management emphasized that residential demand remained stable, supporting margins above 30% in the segment. Product innovation spotlight: The launch of the VertiStack Avante garage door, which eliminates overhead tracks for more space and light, was highlighted as a significant product milestone. Management expects continued innovation to drive competitive differentiation in both residential and commercial door markets. CPP asset-light model benefits: Shifting U.S. CPP operations to an asset-light, globally sourced structure increased flexibility and lowered costs. This transition was credited with improving year-over-year EBITDA in CPP, despite volume declines in North America and the UK, and was supported by organic and acquisition-driven growth in Australia. Tariff risk management: Management explained that while about one-third of CPP's revenue is exposed to China-related tariffs, HBP—which generates 85% of segment EBITDA—is largely insulated due to its domestic focus. CPP's exposure is being managed through supply chain diversification, supplier negotiations, inventory strategies, and selective price increases. Capital allocation priorities: The company repurchased $31 million of stock during the quarter and reaffirmed its commitment to shareholder returns through ongoing buybacks and dividends. Management underscored that these actions are supported by the resilient cash flow of the business and a balanced approach to debt reduction and reinvestment. Management's outlook for the year centers on navigating tariff impacts, optimizing the CPP supply chain, and leveraging product innovation to support margins and growth. Tariff mitigation strategies: Management believes the financial impact of U.S.-China tariffs can be offset by shifting sourcing out of China, negotiating with suppliers, and managing inventory. CEO Ron Kramer reiterated that 'multiple levers of management' are available to address any increased costs, and that CPP's asset-light model enables operational flexibility. Product and market resilience: HBP's domestic manufacturing and focus on mid-to-high-end garage doors are expected to sustain margins even if consumer sentiment softens. CFO Brian Harris said that demand through April remained healthy, and management expects continued resilience due to home renovation trends and new product introductions. CPP segment improvement targets: Management reaffirmed the long-term 15% EBITDA margin target for CPP, supported by further global supply chain diversification and cost actions. They noted that while North America and the UK remain challenging, the Australian market and recent acquisitions are expected to underpin future growth. In upcoming quarters, the StockStory team will watch for (1) execution on supply chain diversification away from China in the CPP segment, (2) margin stability in HBP as seasonal demand returns, and (3) the company's ability to offset tariff-related cost pressures through pricing and cost management. The trajectory of North American consumer demand and the pace of new product adoption will also be key signals for future results. Griffon currently trades at a forward P/E ratio of 11.7×. In the wake of earnings, is it a buy or sell? See for yourself in our full research report (it's free). Donald Trump's victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs. While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025). Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
01-06-2025
- Business
- Yahoo
3M Rises 15.8% YTD: Should You Buy the Stock Now or Wait?
3M Company's MMM investors have been witnessing some short-term gains from the stock of late. The conglomerate giant's shares have gained 15.8% in the year-to-date period, outpacing the industry's and the S&P 500 composite's growth of 2.3% and 0.3%, respectively. The company has also outperformed other industry players like Honeywell International Inc. HON and Griffon Corporation GFF, which have declined 1.7% and 4.3%, respectively, over the same time frame. Image Source: Zacks Investment Research Closing at $149.40 in the last trading session, the stock is trading close to its 52-week high of $156.35 and significantly higher than its 52-week low of $96.76. 3M stock is trading above both its 50-day and 200-day moving averages, indicating solid upward momentum and price stability. This reflects a positive market sentiment and confidence in the company's financial health and long-term prospects. Image Source: Zacks Investment Research 3M has been witnessing solid momentum in the Safety and Industrial segment, driven by strength in roofing granules, industrial adhesives and tapes, and electrical markets. Strong demand for cable accessories, driven by an increase in the construction of data centers and renewable energy projects, is driving the segment's performance. Also, an increase in demand for industrial and electronics bonding solutions bodes the first quarter of 2025, revenues from the electrical, industrial adhesives and tapes markets grew in the high-single-digit range, while the same from roofing granules, industrial specialties and personal safety markets increased in the low-single-digit range. The Safety and Industrial segment's organic sales improved 2.5% year over year in the company's Transportation and Electronics segment has been benefiting from strength in the transportation and aerospace end markets. Strong momentum in the commercial aircraft and defense-related business and project wins in the advanced materials business are proving beneficial for the the first quarter, revenues from the aerospace market increased in low-double-digit, and the same from the advanced materials market grew in high-single-digit. The Transportation and Electronics segment's adjusted organic sales grew 1.1% in the quarter. However, persistent weakness in the automotive electrification market, due to lower automotive OEM build rates, remains a concern.3M has been undertaking several restructuring actions that include streamlining the geographic footprint, simplifying the supply chain and optimizing manufacturing roles to align with production volumes. In the first quarter, these actions, together with strong organic volume and productivity, raised 3M's adjusted operating margin by 220 basis points year over year to 23.5%.The company also remains focused on increasing shareholders' wealth through dividend payments and share buybacks. In the first quarter of 2025, it rewarded its shareholders with $396 million in dividends and $1.3 billion in buybacks. Also, in 2024, it paid dividends worth $2 billion and repurchased shares for $1.8 billion. In February 2025, the company hiked its quarterly dividend by 4%. For 2025, it expects to repurchase shares worth $2 billion. MMM's trailing 12-month return on equity (ROE) is indicative of its growth potential. ROE for the trailing 12 months is 96.2%, much higher than the industry's 38.2%. This reflects the company's efficient usage of shareholder funds. Despite the aforementioned growth opportunities, 3M faces certain challenges that one should consider before investing in this stock. Weakness in the consumer retail end markets has been affecting the performance of the Consumer segment of late. The segment's sales declined 1.4% in the first quarter. There was a particular weakness in the command and packaging & expression businesses. Lower consumer retail discretionary spending on hardline goods is expected to hurt the company's overall performance in the first quarter, 3M's long-term debt was high at $12.3 billion, up 10.8% sequentially. Also, interest expenses in the quarter remained high at $255 million. Exiting the first quarter, its short-term borrowings and current portion of long-term debt totaled $1.2 billion. It's worth noting that 3M's long-term debt-to-capital ratio is currently 73.1%, higher than the industry's 55.2%. High debt levels, if not controlled, can increase financial obligations and prove detrimental to profitability in the quarters company has been subject to several litigations, including earplug lawsuits. It has committed substantial funds to resolve these disputes, as ongoing litigation might lead to additional also operates in the highly competitive electronics, transportation, aerospace, defense and other markets, comprising well-recognised providers of highly engineered products. As one of its peers, Honeywell serves as a global diversified technology and manufacturing company, with diversified products and services. Griffon, another peer, manufactures a wide range of consumer and professional, and home and building products. Earnings estimates for 3M have decreased over the past 30 days. Earnings estimates for 2025 and 2026 have inched down 0.8% and 0.1%, respectively. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.) Image Source: Zacks Investment Research MMM is trading at a premium to industry peers with a forward 12-month price-to-earnings (P/E) multiple of 18.93X. The current valuation is above its five-year median of 15.98X and has surpassed the broader industry's multiple of 16.73X. In comparison, Honeywell and Griffon are trading at 20.72X and 10.57X, respectively. Image Source: Zacks Investment Research Despite its several upsides and solid share price returns, the near-term challenges such as persistent weakness in the retail market, high debt level and premium valuation are limiting this Zacks Rank #3 (Hold) company's prospects. While current shareholders should hold their positions, new investors should wait for the stock to retract some of its recent gains and provide a better entry can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Honeywell International Inc. (HON) : Free Stock Analysis Report 3M Company (MMM) : Free Stock Analysis Report Griffon Corporation (GFF) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
22-05-2025
- Business
- Yahoo
3 Market-Beating Stocks to Target This Week
The best-performing stocks typically have robust sales growth, increasing margins, and rising returns on capital, and those that can maintain this trifecta year in and year out often become the legends of the investing world. Long story short, there is a near-perfect correlation between consistent earnings growth and huge winners. On that note, here are three market-beating stocks that deserve a spot on your list. Five-Year Return: +315% Initially in the defense industry, Griffon (NYSE:GFF) is a now diversified company specializing in home improvement, professional equipment, and building products. Why Could GFF Be a Winner? Operating profits increased over the last five years as the company gained some leverage on its fixed costs and became more efficient Incremental sales significantly boosted profitability as its annual earnings per share growth of 32.6% over the last five years outstripped its revenue performance Free cash flow margin jumped by 10 percentage points over the last five years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends Griffon's stock price of $68.17 implies a valuation ratio of 11.4x forward P/E. Is now the time to initiate a position? Find out in our full research report, it's free. Five-Year Return: +191% Helping build race cars at one point, Allison Transmission (NYSE:ALSN) offers transmissions to original equipment manufacturers and fleet operators. Why Do We Like ALSN? Offerings are difficult to replicate at scale and lead to a best-in-class gross margin of 47.7% Highly efficient business model is illustrated by its impressive 28.8% operating margin, and its operating leverage amplified its profits over the last five years Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends Allison Transmission is trading at $103.84 per share, or 10.1x forward EV-to-EBITDA. Is now the right time to buy? See for yourself in our full research report, it's free. Five-Year Return: +355% One of the original 12 companies on the Dow Jones Industrial Average, General Electric (NYSE:GE) is a multinational conglomerate providing technologies for various sectors including aviation, power, renewable energy, and healthcare. Why Will GE Beat the Market? Market share has increased this cycle as its 20.1% annual revenue growth over the last two years was exceptional Robust free cash flow margin of 16.2% gives it many options for capital deployment, and its growing cash flow gives it even more resources to deploy Rising returns on capital show management is finding more attractive investment opportunities At $233.25 per share, GE Aerospace trades at 41.6x forward P/E. Is now a good time to buy? Find out in our full research report, it's free. The market surged in 2024 and reached record highs after Donald Trump's presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025. While the crowd speculates what might happen next, we're homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver's seat and build a durable portfolio by checking out our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 176% over the last five years. Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today for free. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
20-05-2025
- Automotive
- Yahoo
2 Russell 2000 Stocks with Solid Fundamentals and 1 to Turn Down
Small-cap stocks in the Russell 2000 (^RUT) can be a goldmine for investors looking beyond the usual large-cap names. But with less stability and fewer resources than their bigger counterparts, these companies face steeper challenges in scaling their businesses. Navigating this part of the market can be tricky, which is why we built StockStory to help you separate the winners from the laggards. Keeping that in mind, here are two Russell 2000 stocks that could deliver strong gains and one best left off your watchlist. Market Cap: $688.6 million Originally started as a joint venture between several media companies including The Washington Post and The New York Times, (NYSE:CARS) is a digital marketplace that connects new and used car buyers and sellers. Why Does CARS Worry Us? Likely needs to improve its platform or increase its marketing budget for penetration to accelerate as its dealer customers were flat over the last two years Estimated sales growth of 1.5% for the next 12 months implies demand will slow from its three-year trend Earnings growth underperformed the sector average over the last three years as its EPS grew by just 1.9% annually is trading at $10.87 per share, or 3.2x forward EV/EBITDA. If you're considering CARS for your portfolio, see our FREE research report to learn more. Market Cap: $3.45 billion Initially in the defense industry, Griffon (NYSE:GFF) is a now diversified company specializing in home improvement, professional equipment, and building products. Why Does GFF Stand Out? Operating profits and efficiency rose over the last five years as it benefited from some fixed cost leverage Incremental sales significantly boosted profitability as its annual earnings per share growth of 32.6% over the last five years outstripped its revenue performance Free cash flow margin grew by 10 percentage points over the last five years, giving the company more chips to play with At $73.01 per share, Griffon trades at 12.2x forward P/E. Is now a good time to buy? See for yourself in our full research report, it's free. Market Cap: $4.74 billion A developer of the communication systems used in the Batmobile of 'The Dark Knight,' ESCO (NYSE:ESE) is a provider of engineered components for the aerospace, defense, and utility sectors. Why Does ESE Catch Our Eye? Exciting sales outlook for the upcoming 12 months calls for 18.2% growth, an acceleration from its two-year trend Operating profits increased over the last five years as the company gained some leverage on its fixed costs and became more efficient Earnings per share grew by 20.7% annually over the last two years and trumped its peers ESCO's stock price of $183.34 implies a valuation ratio of 29.6x forward P/E. Is now the time to initiate a position? Find out in our full research report, it's free. Donald Trump's victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs. While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 176% over the last five years. Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today for free. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Business Wire
08-05-2025
- Business
- Business Wire
Griffon Corporation Announces Second Quarter Results
NEW YORK--(BUSINESS WIRE)--Griffon Corporation ('Griffon' or the 'Company') (NYSE:GFF) today reported results for the fiscal 2025 second quarter ended March 31, 2025. Revenue for the second quarter totaled $611.7 million, a 9% decrease compared to $672.9 million in the prior year quarter. Net income totaled $56.8 million, or $1.21 per share, compared to $64.1 million, or $1.28 per share, in the prior year quarter. Excluding all items that affect comparability from both periods, adjusted net income was $57.6 million, or $1.23 per share, in the current year quarter compared to $67.5 million, or $1.35 per share, in the prior year quarter. For a reconciliation of net income to adjusted net income (a non-GAAP measure), and earnings per share to adjusted earnings per share (a non-GAAP measure), see the attached table. Adjusted EBITDA for the second quarter was $118.5 million, a 12% decrease from the prior year quarter of $134.2 million. Adjusted EBITDA, excluding unallocated amounts (primarily corporate overhead) of $14.6 million in the current quarter and $14.8 million in the prior year quarter, totaled $133.2 million, decreasing 11% from the prior year of $149.0 million. For a reconciliation of adjusted EBITDA, a non-GAAP measure, to income before taxes, and the definition of adjusted EBITDA, see the attached table. 'I am pleased to report that the performance of both of our segments for the first half was in-line with our expectations,' said Ronald J. Kramer, Chairman and CEO of Griffon. 'Home and Building Products ('HBP') maintained a strong 30% EBITDA margin, driven by steady residential performance and favorable mix. Consumer and Professional Products ('CPP') continued to deliver improving EBITDA margin year-over-year, driven by the transition of our U.S. operations to an asset-light business model and solid performance from our team in Australia.' 'Given our year-to-date performance, we are maintaining our financial guidance for the year, despite the uncertain economic operating conditions,' continued Mr. Kramer. 'We expect HBP, which is largely unaffected by tariffs, to generate approximately 85% of our segment EBITDA for the year. We anticipate CPP will be able to mitigate the impact of the current tariff policy and other headwinds through supplier negotiations, cost management, leveraging existing inventory and when necessary, by taking price actions, as we continue our process of leveraging our global supply chain.' Segment Operating Results Home and Building Products ("HBP") HBP's second quarter revenue of $368.2 million decreased 6% from the prior year quarter due to decreased volume of 7% primarily reflecting residential sales activity returning to normal seasonality, partially offset by favorable product mix of 1%. Adjusted EBITDA of $109.4 million decreased 15% from $128.9 million in the prior year quarter. The variance to the prior year resulted from decreased revenue noted above and the related volume impact on overhead absorption, and increased labor and distribution costs, partially offset by reduced material costs. Consumer and Professional Products ("CPP") CPP's second quarter revenue of $243.5 million decreased 13% compared to the prior year quarter, primarily driven by decreased volume of 13% due to reduced consumer demand in North America and the United Kingdom ("UK"), partially offset by increased organic volume in Australia. The Pope acquisition contributed 2%. Foreign currency had a 2% unfavorable impact on the current quarter revenue. Adjusted EBITDA of $23.7 million increased 18% from $20.1 million in the prior year quarter, primarily due to the benefits from the global sourcing expansion initiative and increased volume and improved margin in Australia, partially offset by the unfavorable impact of the reduced North American and UK volume. Foreign currency had a 1% unfavorable impact on the current quarter adjusted EBITDA. Taxes The Company reported pretax income from operations for the quarters ended March 31, 2025 and 2024, and recognized effective tax rates of 27.8% and 27.6%, respectively. Excluding all items that affect comparability, the effective tax rates for the quarters ended March 31, 2025 and 2024 were 27.7% and 27.9%, respectively. Balance Sheet and Capital Expenditures As of March 31, 2025, the Company had cash and equivalents of $127.8 million and total debt outstanding of $1.54 billion, resulting in net debt of $1.41 billion. Leverage, as calculated in accordance with our credit agreement (see the attached table), was 2.6x net debt to EBITDA compared to 2.8x at March 31, 2024 and 2.6x at September 30, 2024. At March 31, 2025, borrowing availability under the revolving credit facility was $364.5 million, subject to certain loan covenants. Free cash flow of $145.8 million for the six month period ended March 31, 2025 reflects the Company's strong operating results through the first half. Capital expenditures, net, were $13.4 million for the quarter ended March 31, 2025. For a reconciliation of free cash flow, a non-GAAP measure, to net cash provided by operating activities, and the definition of free cash flow, see the attached table. Share Repurchases Share repurchases during the quarter ended March 31, 2025 totaled 0.4 million shares for a total of $30.5 million, or an average of $72.64 per share. Since April 2023 and through March 31, 2025, the Company purchased 9.9 million shares of common stock or 17.4% of the outstanding shares, for a total of $498.1 million or an average of $50.09 per share. As of March 31, 2025, $359.8 million remained under the Board authorized share repurchase program. Conference Call Information The Company will hold a conference call today, May 8, 2025, at 8:30 AM ET. The call can be accessed by dialing 1-877-407-0792 (U.S. participants) or 1-201-689-8263 (International participants). Callers should ask to be connected to the Griffon Corporation teleconference or provide conference ID number 13752648. Participants are encouraged to dial-in at least 10 minutes before the scheduled start time. A replay of the call will be available starting on Thursday, May 8, 2025 at 11:30 AM ET by dialing 1-844-512-2921 (U.S.) or 1-412-317-6671 (International), and entering the conference ID number: 13752648. The replay will be available through Thursday, May 22, 2025 at 11:59 PM ET. Forward-looking Statements 'Safe Harbor' Statements under the Private Securities Litigation Reform Act of 1995: All statements related to, among other things, income (loss), earnings, cash flows, revenue, changes in operations, operating improvements, industries in which Griffon Corporation (the 'Company' or 'Griffon') operates and the United States and global economies that are not historical are hereby identified as 'forward-looking statements,' and may be indicated by words or phrases such as 'anticipates,' 'supports,' 'plans,' 'projects,' 'expects,' 'believes,' "achieves", 'should,' 'would,' 'could,' 'hope,' 'forecast,' 'management is of the opinion,' 'may,' 'will,' 'estimates,' 'intends,' 'explores,' 'opportunities,' the negative of these expressions, use of the future tense and similar words or phrases. Such forward-looking statements are subject to inherent risks and uncertainties that could cause actual results to differ materially from those expressed in any forward-looking statements. These risks and uncertainties include, among others: current economic conditions and uncertainties in the housing, credit and capital markets; Griffon's ability to achieve expected savings and improved operational results from cost control, restructuring, integration and disposal initiatives (including the expanded CPP global outsourcing strategy announced in May 2023); the ability to identify and successfully consummate, and integrate, value-adding acquisition opportunities; increasing competition and pricing pressures in the markets served by Griffon's operating companies; the ability of Griffon's operating companies to expand into new geographic and product markets, and to anticipate and meet customer demands for new products and product enhancements and innovations; increases in the cost or lack of availability of raw materials such as steel, resin and wood, components or purchased finished goods, including any potential impact on costs or availability resulting from tariffs; changes in customer demand or loss of a material customer at one of Griffon's operating companies; the potential impact of seasonal variations and uncertain weather patterns on certain of Griffon's businesses; political events or military conflicts that could impact the worldwide economy; a downgrade in Griffon's credit ratings; changes in international economic conditions including inflation, interest rate and currency exchange fluctuations; the reliance by certain of Griffon's businesses on particular third party suppliers and manufacturers to meet customer demands; the relative mix of products and services offered by Griffon's businesses, which impacts margins and operating efficiencies; short-term capacity constraints or prolonged excess capacity; unforeseen developments in contingencies, such as litigation, regulatory and environmental matters; Griffon's ability to adequately protect and maintain the validity of patent and other intellectual property rights; the cyclical nature of the businesses of certain of Griffon's operating companies; possible terrorist threats and actions and their impact on the global economy; effects of possible IT system failures, data breaches or cyber-attacks; the impact of pandemics, such as COVID-19, on the U.S. and the global economy, including business disruptions, reductions in employment and an increase in business and operating facility failures, specifically among our customers and suppliers; Griffon's ability to service and refinance its debt; and the impact of recent and future legislative and regulatory changes, including, without limitation, changes in tax laws. Such statements reflect the views of the Company with respect to future events and are subject to these and other risks, as previously disclosed in the Company's Securities and Exchange Commission filings. Readers are cautioned not to place undue reliance on these forward-looking statements. These forward-looking statements speak only as of the date made. Griffon undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. About Griffon Corporation Griffon Corporation is a diversified management and holding company that conducts business through wholly-owned subsidiaries. Griffon oversees the operations of its subsidiaries, allocates resources among them and manages their capital structures. Griffon provides direction and assistance to its subsidiaries in connection with acquisition and growth opportunities as well as divestitures. As long-term investors, we intend to continue to grow and strengthen our existing businesses, and to diversify further through investments in our businesses and acquisitions. Griffon conducts its operations through two reportable segments: Home and Building Products ("HBP") conducts its operations through Clopay Corporation. Founded in 1964, Clopay is the largest manufacturer and marketer of garage doors and rolling steel doors in North America. Residential and commercial sectional garage doors are sold through professional dealers and leading home center retail chains throughout North America under the brands Clopay, Ideal, and Holmes. Rolling steel door and grille products designed for commercial, industrial, institutional, and retail use are sold under the Cornell and Cookson brands. Consumer and Professional Products ('CPP') is a global provider of branded consumer and professional tools; residential, industrial and commercial fans; home storage and organization products; and products that enhance indoor and outdoor lifestyles. CPP sells products globally through a portfolio of leading brands including AMES, since 1774, Hunter, since 1886, True Temper, and ClosetMaid. For more information on Griffon and its operating subsidiaries, please see the Company's website at Griffon evaluates performance and allocates resources based on segment adjusted EBITDA and adjusted EBITDA, non-GAAP measures, which are defined as income before taxes, excluding interest income and expense, depreciation and amortization, strategic review charges, non-cash impairment charges, restructuring charges, gain/loss from debt extinguishment and acquisition related expenses, as well as other items that may affect comparability, as applicable. Segment adjusted EBITDA also excludes unallocated amounts, mainly corporate overhead. Griffon believes this information is useful to investors. The following tables provide operating highlights and a reconciliation of segment adjusted EBITDA and adjusted EBITDA to income before taxes: For the Three Months Ended March 31, For the Six Months Ended March 31, (in thousands) 2025 2024 2025 2024 ADJUSTED EBITDA Home and Building Products $ 109,434 $ 128,924 $ 236,476 $ 253,643 Consumer and Professional Products 23,726 20,121 41,918 25,660 Segment adjusted EBITDA 133,160 149,045 278,394 279,303 Unallocated amounts, excluding depreciation* (14,635 ) (14,814 ) (28,677 ) (28,721 ) Adjusted EBITDA 118,525 134,231 249,717 250,582 Net interest expense (23,222 ) (25,512 ) (47,703 ) (50,387 ) Depreciation and amortization (15,650 ) (15,080 ) (31,264 ) (29,903 ) Restructuring charges — (2,401 ) — (14,801 ) Gain on sale of real estate 183 11 8,157 558 Strategic review - retention and other (1,199 ) (2,676 ) (2,850 ) (7,334 ) Income before taxes $ 78,637 $ 88,573 $ 176,057 $ 148,715 * Primarily Corporate Overhead Expand (in thousands) For the Three Months Ended March 31, For the Six Months Ended March 31, DEPRECIATION and AMORTIZATION 2025 2024 2025 2024 Segment: Home and Building Products $ 4,334 $ 3,772 $ 8,609 $ 7,405 Consumer and Professional Products 11,178 11,171 22,396 22,228 Total segment depreciation and amortization 15,512 14,943 31,005 29,633 Corporate 138 137 259 270 Total consolidated depreciation and amortization $ 15,650 $ 15,080 $ 31,264 $ 29,903 Expand Griffon believes free cash flow ("FCF", a non-GAAP measure) is a useful measure for investors because it demonstrates the Company's ability to generate cash from operations for purposes such as repaying debt, funding acquisitions and paying dividends. FCF is defined as net cash provided by operating activities less capital expenditures, net of proceeds. The following table provides a reconciliation of net cash provided by operating activities to FCF: Net debt to EBITDA (Leverage ratio), a non-GAAP measure, is a key financial measure that is used by management to assess the borrowing capacity of the Company. The Company has defined its net debt to EBITDA leverage ratio as net debt (total principal debt outstanding net of cash and equivalents) divided by the sum of trailing twelve-month ('TTM') adjusted EBITDA (as defined above) and TTM stock-based compensation expense. The following table provides a calculation of our net debt to EBITDA leverage ratio as calculated per our credit agreement: The following tables provide a reconciliation of gross profit and selling, general and administrative expenses for items that affect comparability for the three and six months ended March 31, 2025, and 2024: (in thousands) For the Three Months Ended March 31, For the Six Months Ended March 31, 2025 2024 2025 2024 Gross profit, as reported $ 252,211 $ 270,665 $ 516,487 $ 507,306 % of revenue 41.2 % 40.2 % 41.5 % 38.5 % Adjusting items: Restructuring charges (1) — 1,334 — 12,980 Gross profit, as adjusted $ 252,211 $ 271,999 $ 516,487 $ 520,286 % of revenue 41.2 % 40.4 % 41.5 % 39.5 % (1) For the quarter and six months ended March 31, 2024, restructuring charges relate to the CPP global sourcing expansion. Expand (in thousands) For the Three Months Ended March 31, For the Six Months Ended March 31, 2025 2024 2025 2024 Selling, general and administrative expenses, as reported $ 151,047 $ 157,217 $ 303,228 $ 310,020 % of revenue 24.7 % 23.4 % 24.4 % 23.6 % Adjusting items: Restructuring charges (1) — (1,067 ) — (1,821 ) Strategic review - retention and other (1,199 ) (2,676 ) (2,850 ) (7,334 ) Selling, general and administrative expenses, as adjusted $ 149,848 $ 153,474 $ 300,378 $ 300,865 % of revenue 24.5 % 22.8 % 24.1 % 22.9 % (1) For the quarter and six months ended March 31, 2024, restructuring charges relate to the CPP global sourcing expansion. Expand (in thousands, except per share data) (Unaudited) Three Months Ended March 31, Six Months Ended March 31, 2025 2024 2025 2024 Revenue $ 611,746 $ 672,880 $ 1,244,117 $ 1,316,033 Cost of goods and services 359,535 402,215 727,630 808,727 Gross profit 252,211 270,665 516,487 507,306 Selling, general and administrative expenses 151,047 157,217 303,228 310,020 Income from operations 101,164 113,448 213,259 197,286 Other income (expense) Interest expense (23,930 ) (26,149 ) (48,817 ) (51,448 ) Interest income 708 637 1,114 1,061 Gain on sale of real estate 183 11 8,157 558 Other, net 512 626 2,344 1,258 Total other expense, net (22,527 ) (24,875 ) (37,202 ) (48,571 ) Income before taxes 78,637 88,573 176,057 148,715 Provision for income taxes 21,875 24,430 48,444 42,395 Net income $ 56,762 $ 64,143 $ 127,613 $ 106,320 Basic earnings per common share $ 1.24 $ 1.34 $ 2.80 $ 2.20 Basic weighted-average shares outstanding 45,658 47,946 45,598 48,365 Diluted weighted-average shares outstanding 46,900 49,931 47,226 50,714 Net income $ 56,762 $ 64,143 $ 127,613 $ 106,320 Other comprehensive income (loss), net of taxes: Foreign currency translation adjustments 2,970 (7,199 ) (17,048 ) 3,039 Pension and other post retirement plans 541 531 596 1,063 Change in cash flow hedges (1,094 ) 1,772 1,170 1,477 Total other comprehensive income (loss), net of taxes 2,417 (4,896 ) (15,282 ) 5,579 Comprehensive income, net $ 59,179 $ 59,247 $ 112,331 $ 111,899 Expand GRIFFON CORPORATION AND SUBSIDIARIES (in thousands) (Unaudited) March 31, 2025 September 30, 2024 CURRENT ASSETS Cash and equivalents $ 127,821 $ 114,438 Accounts receivable, net of allowances of $11,155 and $10,986 301,481 312,765 Inventories 431,335 425,489 Prepaid and other current assets 53,263 61,604 Assets held for sale 5,450 14,532 Assets of discontinued operations 1,145 648 Total Current Assets 920,495 929,476 PROPERTY, PLANT AND EQUIPMENT, net 291,753 288,297 OPERATING LEASE RIGHT-OF-USE ASSETS 163,572 171,211 GOODWILL 329,529 329,393 INTANGIBLE ASSETS, net 604,440 618,782 OTHER ASSETS 29,712 30,378 ASSETS OF DISCONTINUED OPERATIONS 4,440 3,417 Total Assets $ 2,343,941 $ 2,370,954 CURRENT LIABILITIES Notes payable and current portion of long-term debt $ 8,133 $ 8,155 Accounts payable 140,566 119,354 Accrued liabilities 144,784 181,918 Current portion of operating lease liabilities 32,445 35,065 Liabilities of discontinued operations 4,905 4,498 Total Current Liabilities 330,833 348,990 LONG-TERM DEBT, net 1,528,838 1,515,897 LONG-TERM OPERATING LEASE LIABILITIES 142,570 147,369 OTHER LIABILITIES 122,726 130,540 LIABILITIES OF DISCONTINUED OPERATIONS 4,232 3,270 Total Liabilities 2,129,199 2,146,066 COMMITMENTS AND CONTINGENCIES SHAREHOLDERS' EQUITY Total Shareholders' Equity 214,742 224,888 Total Liabilities and Shareholders' Equity $ 2,343,941 $ 2,370,954 Expand GRIFFON CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) Six Months Ended 2025 2024 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 127,613 $ 106,320 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 31,264 29,903 Stock-based compensation 11,893 12,674 Asset impairment charges - restructuring — 8,482 Provision for losses on accounts receivable 499 904 Amortization of debt discounts and issuance costs 2,070 2,113 Gain on sale of assets and investments (27 ) (517 ) Gain on sale of real estate (8,157 ) (558 ) Change in assets and liabilities: (Increase) decrease in accounts receivable 5,225 (33,503 ) (Increase) decrease in inventories (11,928 ) 56,250 (Increase) decrease in prepaid and other assets 3,136 (5,766 ) Increase (decrease) in accounts payable, accrued liabilities, income taxes payable and operating lease liabilities (1,592 ) 7,979 Other changes, net (571 ) 1,579 Net cash provided by operating activities 159,425 185,860 CASH FLOWS FROM INVESTING ACTIVITIES: Acquisition of property, plant and equipment (31,174 ) (33,289 ) Proceeds from the sale of property, plant and equipment 17,575 1,272 Net cash used in investing activities (13,599 ) (32,017 ) CASH FLOWS FROM FINANCING ACTIVITIES: Dividends paid (23,441 ) (21,676 ) Purchase of shares for treasury (121,453 ) (222,421 ) Proceeds from long-term debt 63,000 179,500 Payments of long-term debt (52,079 ) (67,184 ) Other, net (27 ) (262 ) Net cash used in financing activities (134,000 ) (132,043 ) CASH FLOWS FROM DISCONTINUED OPERATIONS: Net cash used in operating activities (289 ) (3,273 ) Net cash provided by investing activities 137 — Net cash used in discontinued operations (152 ) (3,273 ) Effect of exchange rate changes on cash and equivalents 1,709 1,614 NET INCREASE IN CASH AND EQUIVALENTS 13,383 20,141 CASH AND EQUIVALENTS AT BEGINNING OF PERIOD 114,438 102,889 CASH AND EQUIVALENTS AT END OF PERIOD $ 127,821 $ 123,030 Supplemental Disclosure of Non-Cash Flow Information: Capital expenditures in accounts payable $ 1,934 $ 2,931 Expand Griffon evaluates performance based on adjusted net income and the related adjusted earnings per share, which excludes restructuring charges, gain/loss from debt extinguishment, acquisition related expenses, discrete and certain other tax items, as well other items that may affect comparability, as applicable, non-GAAP measures. Griffon believes this information is useful to investors. The following table provides a reconciliation of net income to adjusted net income and earnings per common share to adjusted earnings per common share: For the Three Months Ended March 31, For the Six Months Ended March 31, 2025 2024 2025 2024 (in thousands, except per share data) (Unaudited) (Unaudited) Net income $ 56,762 $ 64,143 $ 127,613 $ 106,320 Adjusting items: Restructuring charges (1) — 2,401 — 14,801 Gain on sale of real estate (183 ) (11 ) (8,157 ) (558 ) Strategic review - retention and other 1,199 2,676 2,850 7,334 Tax impact of above items (2) (254 ) (1,309 ) 1,341 (5,513 ) Discrete and certain other tax (benefits) provisions, net (3) 75 (390 ) (175 ) 393 Adjusted net income $ 57,599 $ 67,510 $ 123,472 $ 122,777 Earnings per common share $ 1.21 $ 1.28 $ 2.70 $ 2.10 Adjusting items, net of tax: Restructuring charges (1) — 0.04 — 0.22 Gain on sale of real estate — — (0.13 ) (0.01 ) Strategic review - retention and other 0.02 0.04 0.04 0.11 Discrete and certain other tax (benefits) provisions, net (3) — (0.01 ) — 0.01 Diluted weighted-average shares outstanding 46,900 49,931 47,226 50,714 Note: Due to rounding, the sum of earnings per common share and adjusting items, net of tax, may not equal adjusted earnings per common share. (1) For the three and six months ended March 31, 2024, restructuring charges relate to the CPP global sourcing expansion, of which $1.3 million and $13.0 million, respectively, are included in Cost of goods and services and $1.1 million and $1.8 million, respectively, are included in SG&A in the Company's Condensed Consolidated Statements of Operations. (2) The tax impact for the above reconciling adjustments from GAAP to non-GAAP net income and EPS is determined by comparing the Company's tax provision, including the reconciling adjustments, to the tax provision excluding such adjustments. (3) Discrete and certain other tax provisions (benefits) primarily relate to the impact of a rate differential between statutory and annual effective tax rate on items impacting the quarter. Expand
