Press Release
Griffon Corporation Announces First Quarter Results
Revenue Increases 9% to
Segment Adjusted EBITDA Increases 5% to
EPS of
First quarter 2012 revenue totaled
First quarter 2012 net income totaled
Mr. Kramer continued, “We are excited about our new leadership at Plastics and the new, streamlined, more flexible organizational structure recently implemented at Telephonics. These changes will facilitate our strategy to deliver growth and value to our customers and our shareholders.”
First quarter 2012 results included:
-
$1,795 ($1,167 , net of tax, or$0.02 per share) of restructuring and related charges; and -
$178 ($116 , net of tax, or$0.00 per share) of acquisition costs.
First quarter 2011 results included:
-
$11,364 ($7,387 , net of tax, or$0.12 per share) of cost of goods related to the sale of inventory recorded at fair value in connection with acquisition accounting for Ames True Temper (“ATT”); -
Restructuring charges of
$1,393 ($905 , net of tax, or$0.02 per share); and -
Discrete tax benefits of
$320 , or$0.01 per share.
Excluding these items from the respective quarters, adjusted income from
continuing operations for the 2012 quarter would have been
For the current quarter, Segment adjusted EBITDA totaled
On
Segment Operating Results
Home & Building Products
Revenue in the 2012 quarter increased
Segment adjusted EBITDA in the 2012 quarter was
Telephonics
Revenue in the 2012 quarter increased
Segment adjusted EBITDA in the 2012 quarter was
Contract backlog totaled
Plastic Products
Revenue in the 2012 first quarter increased
Segment adjusted EBITDA in the 2012 first quarter decreased
Taxes
The effective tax rate for the quarter ended
Restructuring
In 2012, Telephonics recognized
HBP recognized
Balance Sheet and Capital Expenditures
The Company had cash and equivalents as of
Stock Repurchases
In the quarter, the Company purchased 283,000 shares for a total of
Conference Call Information
The Company will hold a conference call today,
The call can be accessed by dialing 1-800-390-5705 (U.S. participants)
or 1-719-325-2331 (International participants). Callers should ask to be
connected to the
A replay of the call will be available starting on
Forward-looking Statements
“Safe Harbor” Statements under the Private Securities Litigation Reform
Act of 1995: All statements related to, among other things, income,
earnings, cash flows, revenue, changes in operations, operating
improvements, industries in which
About
Griffon currently conducts its operations through Ames True Temper
(“ATT”), Clopay Building Products (“CBP”),
- Home & Building Products is a leading manufacturer and marketer of residential, commercial and industrial garage doors to professional installing dealers and major home center retail chains, as well as a global provider of non-powered landscaping products that make work easier for homeowners and professionals.
- Telephonics designs, develops and manufactures high-technology, integrated information, communication and sensor system solutions for use in military and commercial markets worldwide.
- Plastics is an international leader in the development and production of embossed, laminated and printed specialty plastic films used in a variety of hygienic, health-care and industrial applications.
For more information on Griffon and its operating subsidiaries, please see the Company’s website at www.griffoncorp.com.
Griffon evaluates performance and allocates resources based on each segments’ operating results before interest income or expense, income taxes, depreciation and amortization, gain (losses) from debt extinguishment, unallocated amounts, restructuring charges, acquisition costs and costs related to the fair value of inventory for acquisitions. Griffon believes this information is useful to investors.
The following table provides a reconciliation of Segment Adjusted EBITDA to Income (loss) before taxes:
GRIFFON CORPORATION AND SUBSIDIARIES | ||||||
OPERATING HIGHLIGHTS | ||||||
(in thousands) | ||||||
(Unaudited) | ||||||
For the Three Months Ended December 31, |
||||||
2011 | 2010 | |||||
REVENUE | ||||||
Home & Building Products: |
||||||
ATT | $ | 98,741 | $ | 94,197 | ||
CBP | 111,647 | 104,066 | ||||
Home & Building Products | 210,388 | 198,263 | ||||
Telephonics | 104,513 | 98,279 | ||||
Plastics | 136,130 | 117,860 | ||||
Total consolidated net sales | $ | 451,031 | $ | 414,402 | ||
Segment operating profit (loss): | ||||||
Segment profit before depreciation, amortization, restructuring, fair value write-up of acquired inventory sold and acquisition costs: | ||||||
Home & Building Products | $ | 17,750 | $ | 17,534 | ||
Telephonics | 15,690 | 12,406 | ||||
Plastics | 8,180 | 9,786 | ||||
Total Segment profit before depreciation, amortization, restructuring, fair value write-up of acquired inventory sold and acquisition costs | 41,620 | 39,726 | ||||
Unallocated amounts, less acquisition costs | (6,335) | (5,106) | ||||
Net interest expense | (13,000) | (11,154) | ||||
Segment depreciation and amortization | (15,418) | (13,757) | ||||
Restructuring charges | (1,795) | (1,393) | ||||
Fair value write-up of acquired inventory sold | - | (11,364) | ||||
Acquisition costs | (178) | - | ||||
Income (loss) before taxes | $ | 4,894 | $ | (3,048) | ||
Unallocated amounts typically include general corporate expenses not attributable to a reportable segment. |
The following is a reconciliation of each segments’ operating results to Segment Adjusted EBITDA:
GRIFFON CORPORATION AND SUBSIDIARIES | ||||||
RECONCILIATION OF NON-GAAP MEASURES | ||||||
BY REPORTABLE SEGMENT | ||||||
(Unaudited) | ||||||
For the Three Months Ended December 31, |
||||||
2011 | 2010 | |||||
Home & Building Products | ||||||
Segment operating profit (loss) |
$ | 9,834 | $ | (1,623) | ||
Depreciation and amortization | 7,465 | 6,400 | ||||
Fair value write-up of acquired inventory sold | - | 11,364 | ||||
Restructuring charges | 273 | 1,393 | ||||
Acquisition costs | 178 | - | ||||
Segment adjusted EBITDA | 17,750 | 17,534 | ||||
Telephonics | ||||||
Segment operating profit | 12,515 | 10,693 | ||||
Depreciation and amortization | 1,653 | 1,713 | ||||
Restructuring charges | 1,522 | - | ||||
Segment adjusted EBITDA | 15,690 | 12,406 | ||||
Clopay Plastic Products | ||||||
Segment operating profit | 1,880 | 4,142 | ||||
Depreciation and amortization | 6,300 | 5,644 | ||||
Segment adjusted EBITDA | 8,180 | 9,786 | ||||
All segments: | ||||||
Income from operations - as reported | 17,847 | 6,021 | ||||
Unallocated amounts |
6,335 |
5,106 |
||||
Other, net | 47 | 2,085 | ||||
Segment operating profit | 24,229 | 13,212 | ||||
Depreciation and amortization | 15,418 | 13,757 | ||||
Fair value write-up of acquired inventory sold | - | 11,364 | ||||
Restructuring charges | 1,795 | 1,393 | ||||
Acquisition costs | 178 | - | ||||
Segment adjusted EBITDA | $ | 41,620 | $ | 39,726 |
GRIFFON CORPORATION AND SUBSIDIARIES | ||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||
(in thousands, except per share data) | ||||||
(Unaudited) | ||||||
Three Months Ended December 31, | ||||||
2011 | 2010 | |||||
Revenue | $ | 451,031 | $ | 414,402 | ||
Cost of goods and services | 348,323 | 326,543 | ||||
Gross profit | 102,708 | 87,859 | ||||
Selling, general and administrative expenses | 83,066 | 80,445 | ||||
Restructuring and other related charges | 1,795 | 1,393 | ||||
Total operating expenses | 84,861 | 81,838 | ||||
Income from operations | 17,847 | 6,021 | ||||
Other income (expense) | ||||||
Interest expense | (13,063) | (11,223) | ||||
Interest income | 63 | 69 | ||||
Other, net | 47 | 2,085 | ||||
Total other income (expense) | (12,953) | (9,069) | ||||
Income (loss) before taxes | 4,894 | (3,048) | ||||
Provision (benefit) for income taxes | 2,407 | (1,368) | ||||
Net income (loss) | $ | 2,487 | $ | (1,680) | ||
Basic earnings (loss) per common share | $ | 0.04 | $ | (0.03) | ||
Weighted-average shares outstanding | 56,025 | 59,274 | ||||
Diluted earnings (loss) per common share | $ | 0.04 | $ | (0.03) | ||
Weighted-average shares outstanding | 57,082 | 59,274 |
GRIFFON CORPORATION AND SUBSIDIARIES | ||||||
CONSOLIDATED BALANCE SHEETS | ||||||
(in thousands) | ||||||
(Unaudited) | ||||||
At December 31, 2011 |
At September 30, 2011 |
|||||
CURRENT ASSETS | ||||||
Cash and equivalents | $ | 177,358 | $ | 243,029 | ||
Accounts receivable, net of allowances of $6,699 and $6,072 | 270,067 | 267,471 | ||||
Contract costs and recognized income not yet billed, net of progress payments of $1,221 and $9,697 |
62,217 | 74,737 | ||||
Inventories, net | 296,996 | 263,809 | ||||
Prepaid and other current assets | 46,350 | 48,828 | ||||
Assets of discontinued operations | 1,307 | 1,381 | ||||
Total Current Assets | 854,295 | 899,255 | ||||
PROPERTY, PLANT AND EQUIPMENT, net | 352,729 | 350,050 | ||||
GOODWILL | 360,915 | 357,888 | ||||
INTANGIBLE ASSETS, net | 234,872 | 223,189 | ||||
OTHER ASSETS | 30,304 | 31,197 | ||||
ASSETS OF DISCONTINUED OPERATIONS | 3,006 | 3,675 | ||||
Total Assets | $ | 1,836,121 | $ | 1,865,254 | ||
CURRENT LIABILITIES | ||||||
Notes payable and current portion of long-term debt | $ | 21,302 | $ | 25,164 | ||
Accounts payable | 190,280 | 186,290 | ||||
Accrued liabilities | 80,472 | 99,631 | ||||
Liabilities of discontinued operations | 3,611 | 3,794 | ||||
Total Current Liabilities |
295,665 | 314,879 | ||||
LONG-TERM DEBT, net of debt discount of $18,949 and $19,693 | 685,270 | 688,247 | ||||
OTHER LIABILITIES | 201,008 | 204,434 | ||||
LIABILITIES OF DISCONTINUED OPERATIONS | 4,979 | 5,786 | ||||
Total Liabilities | 1,186,922 | 1,213,346 | ||||
COMMITMENTS AND CONTINGENCIES | ||||||
SHAREHOLDERS' EQUITY | ||||||
Total Shareholders' Equity |
649,199 |
651,908 | ||||
Total Liabilities and Shareholders' Equity | $ | 1,836,121 | $ | 1,865,254 |
GRIFFON CORPORATION AND SUBSIDIARIES | ||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||
(in thousands) | ||||||
(Unaudited) | ||||||
Three Months Ended December 31, | ||||||
2011 | 2010 | |||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||
Net income (loss) | $ | 2,487 | $ | (1,680) | ||
Adjustments to reconcile net income (loss) to net cash used in operating activities: |
||||||
Depreciation and amortization | 15,515 | 13,825 | ||||
Fair value write-up of acquired inventory sold | - | 11,364 | ||||
Stock-based compensation | 2,257 | 2,023 | ||||
Provision for losses on accounts receivable | 569 | 266 | ||||
Amortization/write-off of deferred financing costs and debt discounts | 1,505 | 1,845 | ||||
Deferred income taxes | (141) | (2,582) | ||||
Gain on sale/disposal of assets | (44) | - | ||||
Change in assets and liabilities, net of assets and liabilities acquired: | ||||||
Decrease in accounts receivable and contract costs and recognized income not yet billed |
8,067 | 29,952 | ||||
Increase in inventories | (30,318) | (24,316) | ||||
(Increase) decrease in prepaid and other assets | 4 | (3,850) | ||||
Decrease in accounts payable, accrued liabilities and income taxes payable |
(14,582) | (50,724) | ||||
Other changes, net | 838 | 62 | ||||
Net cash used in operating activities | (13,843) | (23,815) | ||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||
Acquisition of property, plant and equipment | (19,892) | (17,930) | ||||
Acquired business, net of cash acquired | (22,432) | (855) | ||||
Change in funds restricted for capital projects | - | 1,283 | ||||
Change in equipment lease deposits | - | (1,141) | ||||
Proceeds from sale of assets | 61 | - | ||||
Net cash used in investing activities | (42,263) | (18,643) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||
Dividend | (1,184) | - | ||||
Purchase of shares for treasury | (2,351) | - | ||||
Proceeds from issuance of long-term debt | - | 47,974 | ||||
Payments of long-term debt | (6,826) | (35,234) | ||||
Financing costs | (4) | (1,708) | ||||
Exercise of stock options | - | 20 | ||||
Tax effect from exercise/vesting of equity awards, net | 834 | 7 | ||||
Other, net | (14) | (12) | ||||
Net cash provided by (used in) financing activities | (9,545) | 11,047 | ||||
CASH FLOWS FROM DISCONTINUED OPERATIONS: | ||||||
Net cash used in operating activities | (277) | (367) | ||||
Net cash used in discontinued operations | (277) | (367) | ||||
Effect of exchange rate changes on cash and equivalents | 257 | 383 | ||||
NET DECREASE IN CASH AND EQUIVALENTS | (65,671) | (31,395) | ||||
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD | 243,029 | 169,802 | ||||
CASH AND EQUIVALENTS AT END OF PERIOD | $ | 177,358 | $ | 138,407 |
Griffon evaluates performance based on Earnings per share and Net income (loss) excluding restructuring charges, gain (loss) from debt extinguishment, discrete tax items, acquisition costs and costs related to the fair value of inventory for acquisitions. Griffon believes this information is useful to investors. The following table provides a reconciliation of Earnings per share and Net income (loss) to Adjusted earnings per share and Adjusted net income (loss):
GRIFFON CORPORATION AND SUBSIDIARIES | ||||||
RECONCILIATION OF INCOME (LOSS) TO ADJUSTED INCOME (LOSS) | ||||||
(Unaudited) | ||||||
For the Three Months Ended December 31, |
||||||
2011 | 2010 | |||||
Net income (loss) | $ | 2,487 | $ | (1,680) | ||
Adjusting items, net of tax: | ||||||
Fair value write-up of acquired inventory sold | - | 7,387 | ||||
Restructuring and related | 1,167 | 905 | ||||
Acquisition costs | 116 | - | ||||
Discrete tax benefits | - | (320) | ||||
Adjusted net income | $ | 3,770 | $ | 6,292 | ||
Earnings (loss) per common share | $ | 0.04 | $ | (0.03) | ||
Adjusting items, net of tax: | ||||||
Fair value write-up of acquired inventory sold | - | 0.12 | ||||
Restructuring | 0.02 | 0.02 | ||||
Acquisition costs | 0.00 | - | ||||
Discrete tax benefits | - | (0.01) | ||||
Adjusted earnings per common share | $ | 0.07 | $ | 0.11 | ||
Weighted-average shares outstanding (in thousands) | 57,082 | 59,274 | ||||
Note: Due to rounding, the sum of earnings (loss) per common share and adjusting items, net of tax, may not equal adjusted earnings per common share. |
Source:
Griffon Corporation
Douglas J. Wetmore, 212-957-5000
Chief
Financial Officer
or
Investor Relations:
ICR Inc.
James
Palczynski, 203-682-8229
Principal and Director