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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
Yahoo
02-04-2025
- Business
- Yahoo
Home Construction Materials Stocks Q4 In Review: Griffon (NYSE:GFF) Vs Peers
The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let's take a look at how Griffon (NYSE:GFF) and the rest of the home construction materials stocks fared in Q4. Traditionally, home construction materials companies have built economic moats with expertise in specialized areas, brand recognition, and strong relationships with contractors. More recently, advances to address labor availability and job site productivity have spurred innovation that is driving incremental demand. However, these companies are at the whim of residential construction volumes, which tend to be cyclical and can be impacted heavily by economic factors such as interest rates. Additionally, the costs of raw materials can be driven by a myriad of worldwide factors and greatly influence the profitability of home construction materials companies. The 12 home construction materials stocks we track reported a satisfactory Q4. As a group, revenues beat analysts' consensus estimates by 1.5%. Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 10.9% since the latest earnings results. Initially in the defense industry, Griffon (NYSE:GFF) is a now diversified company specializing in home improvement, professional equipment, and building products. Griffon reported revenues of $632.4 million, down 1.7% year on year. This print fell short of analysts' expectations by 0.8%, but it was still a very strong quarter for the company with an impressive beat of analysts' EBITDA estimates and a solid beat of analysts' EPS estimates. 'Fiscal 2025 is off to a strong start, with our first quarter results highlighted by free cash flow of $143 million, continued solid operating performance at Home and Building Products ("HBP"), and improved profitability from our global sourcing expansion initiative at Consumer and Professional Products ('CPP'),' said Ronald J. Kramer, Chairman and Chief Executive Officer. The stock is down 3.1% since reporting and currently trades at $72.06. Is now the time to buy Griffon? Access our full analysis of the earnings results here, it's free. Credited with the discovery of fiberglass, Owens Corning (NYSE:OC) supplies building and construction materials to the United States and international markets. Owens Corning reported revenues of $2.84 billion, up 23.3% year on year, outperforming analysts' expectations by 2.7%. The business had a stunning quarter with an impressive beat of analysts' organic revenue and EBITDA estimates. Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 13.3% since reporting. It currently trades at $143.55. Is now the time to buy Owens Corning? Access our full analysis of the earnings results here, it's free. Starting as a small millwork shop, American Woodmark (NASDAQ:AMWD) is a cabinet manufacturing company that helps customers from inspiration to installation. American Woodmark reported revenues of $397.6 million, down 5.8% year on year, falling short of analysts' expectations by 3.3%. It was a disappointing quarter as it posted full-year EBITDA guidance missing analysts' expectations significantly and a significant miss of analysts' adjusted operating income estimates. As expected, the stock is down 17.8% since the results and currently trades at $58.49. Read our full analysis of American Woodmark's results here. Gibraltar (NASDAQ:ROCK) makes renewable energy, agriculture technology and infrastructure products. Its mission statement is to make everyday living more sustainable. Gibraltar reported revenues of $302.1 million, down 8.1% year on year. This print lagged analysts' expectations by 1.9%. In spite of that, it was a very strong quarter as it put up full-year EPS guidance exceeding analysts' expectations and an impressive beat of analysts' EBITDA estimates. Gibraltar scored the highest full-year guidance raise among its peers. The stock is down 1.3% since reporting and currently trades at $57.26. Read our full, actionable report on Gibraltar here, it's free. Credited with introducing the first variable-speed pool pump, Hayward (NYSE:HAYW) makes residential and commercial pool equipment and accessories. Hayward reported revenues of $327.1 million, up 17.5% year on year. This result surpassed analysts' expectations by 7.7%. Overall, it was a very strong quarter as it also put up a solid beat of analysts' organic revenue and EBITDA estimates. Hayward delivered the biggest analyst estimates beat among its peers. The stock is down 4.3% since reporting and currently trades at $13.76. Read our full, actionable report on Hayward here, it's free. Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Growth Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate. Join Paid Stock Investor Research Help us make StockStory more helpful to investors like yourself. Join our paid user research session and receive a $50 Amazon gift card for your opinions. Sign up here.
Associated Press
05-02-2025
- Business
- Associated Press
Griffon Corporation Announces First Quarter Results
Griffon Corporation ('Griffon' or the 'Company') (NYSE:GFF) today reported results for the fiscal 2025 first quarter ended December 31, 2024. Revenue for the first quarter totaled $632.4 million, a 2% decrease compared to $643.2 million in the prior year quarter. Net income totaled $70.9 million, or $1.49 per share, compared to $42.2 million, or $0.82 per share, in the prior year quarter. Excluding all items that affect comparability from both periods, adjusted net income was $65.9 million, or $1.39 per share, in the current year quarter compared to $55.3 million, or $1.07 per share, in the prior year quarter. For a reconciliation of net income to adjusted net income, and earnings per share to adjusted earnings per share, see the attached table. Adjusted EBITDA for the first quarter was $131.2 million, a 13% increase from the prior year quarter of $116.4 million. Adjusted EBITDA, excluding unallocated amounts (primarily corporate overhead) of $14.0 million in the current quarter and $13.9 million in the prior year quarter, totaled $145.2 million, increasing 11% from the prior year of $130.3 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. 'Fiscal 2025 is off to a strong start, with our first quarter results highlighted by free cash flow of $143 million, continued solid operating performance at Home and Building Products ('HBP'), and improved profitability from our global sourcing expansion initiative at Consumer and Professional Products ('CPP'),' said Ronald J. Kramer, Chairman and Chief Executive Officer. 'We are pleased with our performance and are on track to meet our financial targets for the year.' Segment Operating Results Home and Building Products ('HBP') HBP's first quarter revenue of $395.4 million remained consistent with the prior year quarter reflecting increased residential volume, offset by reduced commercial volume. Adjusted EBITDA of $127.0 million increased 2% from $124.7 million in the prior year quarter. The variance to the prior year resulted from reduced material costs, partially offset by increased labor and distribution costs. Consumer and Professional Products ('CPP') CPP's first quarter revenue of $237.0 million decreased 4% compared to the prior year quarter, primarily driven by decreased volume of 8% due to reduced consumer demand in North America and the United Kingdom, partially offset by organic growth in Australia. The Pope acquisition contributed 4%. Adjusted EBITDA of $18.2 million increased by $12.7 million from $5.5 million in the prior year quarter, primarily due to the benefits from the global sourcing expansion initiative and increased revenue in Australia as noted above. Taxes The Company reported pretax income from operations for the quarters ended December 31, 2024 and December 31, 2023, and recognized effective tax rates of 27.3% and 29.9%, respectively. Excluding all items that affect comparability, the effective tax rates for the quarters ended December 31, 2024 and 2023 were 27.7% and 27.9%, respectively. Balance Sheet and Capital Expenditures As of December 31, 2024, the Company had cash and equivalents of $152.0 million and total debt outstanding of $1.48 billion, resulting in net debt of $1.32 billion. Leverage, as calculated in accordance with our credit agreement (see the attached table), was 2.4x net debt to EBITDA compared to 2.5x at December 31, 2023 and 2.6x at September 30, 2024. Free cash flow of $142.7 million for the three month period ended December 31, 2024 reflects the Company's strong operating results through the first quarter of 2025. At December 31, 2024, borrowing availability under the revolving credit facility was $427.5 million, subject to certain loan covenants. During the quarter the Company sold real estate as a result of the CPP sourcing expansion initiative, realizing $17.2 million in proceeds. This offset capital expenditures of $17.5 million, resulting in net capital expenditures of $0.2 million for the quarter ended December 31, 2024. 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 December 31, 2024 totaled 0.6 million for a total of $42.3 million, or an average of $69.40 per share. Since April 2023 and through December 31, 2024, the Company purchased 9.5 million shares of common stock or 16.7% of the outstanding shares, for a total of $467.6 million or an average of $49.09 per share. As of December 31, 2024, $390.3 million remained under the Board authorized share repurchase program. Conference Call Information The Company will hold a conference call today, February 5, 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 13751075. 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 Wednesday, February 5, 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: 13751075. The replay will be available through Wednesday, February 19, 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 December 31, (in thousands) 2024 2023 ADJUSTED EBITDA Home and Building Products $ 127,042 $ 124,719 Consumer and Professional Products 18,192 5,539 Segment adjusted EBITDA 145,234 130,258 Unallocated amounts, excluding depreciation* (14,042 ) (13,907 ) Adjusted EBITDA 131,192 116,351 Net interest expense (24,481 ) (24,875 ) Depreciation and amortization (15,614 ) (14,823 ) Restructuring charges — (12,400 ) Gain on sale of real estate 7,974 547 Strategic review - retention and other (1,651 ) (4,658 ) Income before taxes $ 97,420 $ 60,142 * Primarily Corporate Overhead (in thousands) For the Three Months Ended December 31, DEPRECIATION and AMORTIZATION 2024 2023 Segment: Home and Building Products $ 4,275 $ 3,633 Consumer and Professional Products 11,218 11,057 Total segment depreciation and amortization 15,493 14,690 Corporate 121 133 Total consolidated depreciation and amortization $ 15,614 $ 14,823 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: For the Three Months Ended December 31, (in thousands) 2024 2023 Net provided by operating activities $ 142,922 $ 146,058 Acquisition of property, plant and equipment (17,456 ) (14,330 ) Proceeds from the sale of property, plant and equipment 17,220 787 FCF $ 142,686 $ 132,515 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: (in thousands) December 31, 2 024 September 30, 2 024 December 31, 2 023 Cash and equivalents $ 151,952 $ 114,438 $ 110,546 Notes payable and current portion of long-term debt $ 8,143 $ 8,155 $ 9,274 Long-term debt, net of current maturities 1,466,889 1,515,897 1,430,235 Debt discount/premium and issuance costs 14,604 15,633 19,227 Total gross debt 1,489,636 1,539,685 1,458,736 Debt, net of cash and equivalents $ 1,337,684 $ 1,425,247 $ 1,348,190 TTM Adjusted EBITDA (1) $ 528,442 $ 513,602 $ 513,123 TTM Stock and ESOP-based compensation 25,799 26,838 25,293 TTM Adjusted EBITDA $ 554,241 $ 540,440 $ 538,416 Leverage ratio 2.4x 2.6x 2.5x 1. Griffon defines Adjusted EBITDA as operating results before interest income and expense, income taxes, depreciation and amortization, restructuring charges, debt extinguishment, net and acquisition related expenses, as well as other items that may affect comparability, as applicable. The following tables provide a reconciliation of gross profit and selling, general and administrative expenses for items that affect comparability for the three months ended December 31, 2024, and 2023: (in thousands) For the Three Months Ended December 31, 2024 2023 Gross profit, as reported $ 264,276 $ 236,641 % of revenue 41.8 % 36.8 % Adjusting items: Restructuring charges (1) — 11,646 Gross profit, as adjusted $ 264,276 $ 248,287 % of revenue 41.8 % 38.6 % (1) For the quarter ended December 31, 2023, restructuring charges relate to the CPP global sourcing expansion. (in thousands) For the Three Months Ended December 31, 2024 2023 Selling, general and administrative expenses, as reported $ 152,181 $ 152,803 % of revenue 24.1 % 23.8 % Adjusting items: Restructuring charges (1) — (754 ) Strategic review - retention and other (1,651 ) (4,658 ) Selling, general and administrative expenses, as adjusted $ 150,530 $ 147,391 % of revenue 23.8 % 22.9 % (1) For the quarter ended December 31, 2023, restructuring charges relate to the CPP global sourcing expansion. GRIFFON CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (in thousands, except per share data) (Unaudited) Three Months Ended December 31, 2024 2023 Revenue $ 632,371 $ 643,153 Cost of goods and services 368,095 406,512 Gross profit 264,276 236,641 Selling, general and administrative expenses 152,181 152,803 Income from operations 112,095 83,838 Other income (expense) Interest expense (24,887 ) (25,299 ) Interest income 406 424 Gain on sale of real estate 7,974 547 Other, net 1,832 632 Total other expense, net (14,675 ) (23,696 ) Income before taxes 97,420 60,142 Provision for income taxes 26,569 17,965 Net income $ 70,851 $ 42,177 Basic earnings per common share $ 1.56 $ 0.86 Basic weighted-average shares outstanding 45,538 48,784 Diluted earnings per common share $ 1.49 $ 0.82 Diluted weighted-average shares outstanding 47,541 51,467 Dividends paid per common share $ 0.18 $ 0.15 Net income $ 70,851 $ 42,177 Other comprehensive income (loss), net of taxes: Foreign currency translation adjustments (20,018 ) 10,238 Pension and other post retirement plans 55 532 Change in cash flow hedges 2,264 (295 ) Total other comprehensive income (loss), net of taxes (17,699 ) 10,475 Comprehensive income, net $ 53,152 $ 52,652 The accompanying notes to condensed consolidated financial statements are an integral part of these statements. GRIFFON CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands) (Unaudited) December 31, 2 024 September 30, 2 024 CURRENT ASSETS Cash and equivalents $ 151,952 $ 114,438 Accounts receivable, net of allowances of $11,766 and $10,986 268,951 312,765 Inventories 418,164 425,489 Prepaid and other current assets 49,850 61,604 Assets held for sale 5,559 14,532 Assets of discontinued operations 650 648 Total Current Assets 895,126 929,476 PROPERTY, PLANT AND EQUIPMENT, net 287,755 288,297 OPERATING LEASE RIGHT-OF-USE ASSETS 169,984 171,211 GOODWILL 329,393 329,393 INTANGIBLE ASSETS, net 609,232 618,782 OTHER ASSETS 30,231 30,378 ASSETS OF DISCONTINUED OPERATIONS 3,431 3,417 Total Assets $ 2,325,152 $ 2,370,954 CURRENT LIABILITIES Notes payable and current portion of long-term debt $ 8,143 $ 8,155 Accounts payable 142,702 119,354 Accrued liabilities 166,890 181,918 Current portion of operating lease liabilities 33,928 35,065 Liabilities of discontinued operations 4,368 4,498 Total Current Liabilities 356,031 348,990 LONG-TERM DEBT, net 1,466,889 1,515,897 LONG-TERM OPERATING LEASE LIABILITIES 147,463 147,369 OTHER LIABILITIES 123,757 130,540 LIABILITIES OF DISCONTINUED OPERATIONS 3,236 3,270 Total Liabilities 2,097,376 2,146,066 COMMITMENTS AND CONTINGENCIES SHAREHOLDERS' EQUITY Total Shareholders' Equity 227,776 224,888 Total Liabilities and Shareholders' Equity $ 2,325,152 $ 2,370,954 GRIFFON CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (Unaudited) Three Months Ended December 31, 2024 2023 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 70,851 $ 42,177 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 15,614 14,823 Stock-based compensation 5,378 6,417 Asset impairment charges - restructuring — 8,482 Provision for losses on accounts receivable 1,182 562 Amortization of debt discounts and issuance costs 1,029 1,056 Loss (gain) on sale of assets and investments 168 (3 ) Gain on sale of real estate (7,974 ) (547 ) Change in assets and liabilities: Decrease in accounts receivable 35,445 14,491 (Increase) decrease in inventories (393 ) 24,623 Increase in prepaid and other assets (5,066 ) (3,631 ) Increase in accounts payable, accrued liabilities, income taxes payable and operating lease liabilities 26,423 36,491 Other changes, net 265 1,117 Net cash provided by operating activities 142,922 146,058 CASH FLOWS FROM INVESTING ACTIVITIES: Acquisition of property, plant and equipment (17,456 ) (14,330 ) Proceeds from the sale of property, plant and equipment 17,220 787 Net cash used in investing activities (236 ) (13,543 ) CASH FLOWS FROM FINANCING ACTIVITIES: Dividends paid (9,037 ) (9,965 ) Purchase of shares for treasury (49,083 ) (81,449 ) Proceeds from long-term debt — 31,500 Payments of long-term debt (50,000 ) (63,860 ) Financing costs (42 ) (114 ) Other, net 41 (59 ) Net cash used in financing activities (108,121 ) (123,947 ) CASH FLOWS FROM DISCONTINUED OPERATIONS: Net cash used in operating activities (180 ) (2,926 ) Net cash used in discontinued operations (180 ) (2,926 ) Effect of exchange rate changes on cash and equivalents 3,129 2,015 NET INCREASE IN CASH AND EQUIVALENTS 37,514 7,657 CASH AND EQUIVALENTS AT BEGINNING OF PERIOD 114,438 102,889 CASH AND EQUIVALENTS AT END OF PERIOD $ 151,952 $ 110,546 Supplemental Disclosure of Non-Cash Flow Information: Capital expenditures in accounts payable $ 2,064 $ 2,306 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 December 31, 2024 2023 (in thousands, except per share data) (Unaudited) Net income $ 70,851 $ 42,177 Adjusting items: Restructuring charges (1) — 12,400 Gain on sale of real estate (7,974 ) (547 ) Strategic review - retention and other 1,651 4,658 Tax impact of above items (2) 1,595 (4,204 ) Discrete and certain other tax (benefits) provisions, net (3) (250 ) 783 Adjusted net income $ 65,873 $ 55,267 Earnings per common share $ 1.49 $ 0.82 Adjusting items, net of tax: Restructuring charges (1) — 0.18 Gain on sale of real estate (0.13 ) (0.01 ) Strategic review - retention and other 0.03 0.07 Discrete and certain other tax (benefits) provisions, net (3) (0.01 ) 0.02 Adjusted earnings per common share $ 1.39 $ 1.07 Diluted weighted-average shares outstanding 47,541 51,467 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 months ended December 31, 2023, restructuring charges relate to the CPP global sourcing expansion, of which $11.6 million is included in Cost of goods and services and $0.8 million is 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. View source version on CONTACT: Company Contact Brian G. Harris EVP & Chief Financial Officer Griffon Corporation (212) 957-5000 [email protected] Relations Contact Tom Cook Managing Director ICR Inc. (203) 682-8250 KEYWORD: NEW YORK UNITED STATES NORTH AMERICA INDUSTRY KEYWORD: LIFESTYLE OTHER RETAIL CONSTRUCTION & PROPERTY PROFESSIONAL SERVICES OTHER CONSUMER BUILDING SYSTEMS RETAIL HOME GOODS CONSUMER OTHER CONSTRUCTION & PROPERTY FINANCE SOURCE: Griffon Corporation Copyright Business Wire 2025. PUB: 02/05/2025 07:32 AM/DISC: 02/05/2025 07:32 AM
