Press Release
Griffon Corporation Announces First Quarter Results
Consolidated revenue for the first quarter totaled
Net income totaled
Adjusted EBITDA for the first quarter was
Segment Operating Results
Consumer and Professional Products ("CPP")
CPP revenue in the current quarter totaling
CPP Adjusted EBITDA in the first quarter was
Strategic Initiative
In
The expanded focus of this initiative leverages the same three key development areas being executed within our
Expanding the roll-out of the new business platform from our
The cost to implement this new business platform, over the duration of the project, will include one-time charges of approximately
During the quarters ended
Home and Building Products ("HBP")
HBP revenue in the current quarter totaling
HBP Adjusted EBITDA in the current quarter was
Defense Electronics ("DE")
DE revenue in the current quarter totaled
DE Adjusted EBITDA in the current quarter was
Contract backlog was
Restructuring and Divestiture
In
In addition, charges of
On
Taxes
The Company reported pretax income for the quarters ended
Balance Sheet and Capital Expenditures
At
Share Repurchases
As of
Conference Call Information
The Company will hold a conference call today,
The call can be accessed by dialing 1-877-407-0792 (
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 (loss), earnings, cash flows, revenue, changes in operations, operating improvements, industries in which Griffon operates and
About
Griffon currently conducts its operations through three reportable segments:
-
CPP conducts its operations through
AMES . Founded in 1774,AMES is the leading North American manufacturer and a global provider of branded consumer and professional tools and products for home storage and organization, landscaping, and enhancing outdoor lifestyles. CPP sells products globally through a portfolio of leading brands including True Temper,AMES , andClosetMaid .
-
HBP conducts its operations through
Clopay . Founded in 1964,Clopay is the largest manufacturer and marketer of garage doors and rolling steel doors inNorth America . Residential and commercial sectional garage doors are sold through professional dealers and leading home center retail chains throughoutNorth America under the brandsClopay , Ideal, andHolmes . Rolling steel door and grille products designed for commercial, industrial, institutional, and retail use are sold under the CornellCookson brand.
-
Defense Electronics conducts its operations through
Telephonics Corporation , founded in 1933, a globally recognized leading provider of highly sophisticated intelligence, surveillance and communications solutions for defense, aerospace and commercial customers.
For more information on Griffon and its operating subsidiaries, please see the Company’s website at www.griffon.com.
Griffon evaluates performance and allocates resources based on operating results from continuing operations before interest income and expense, income taxes, depreciation and amortization, restructuring charges, loss from debt extinguishment and acquisition related expenses, as well as other items that may affect comparability, as applicable (“Adjusted EBITDA”, a non-GAAP measure). Griffon believes this information is useful to investors.
The following table provides operating highlights and a reconciliation of Adjusted EBITDA to Income before taxes from operations:
(in thousands) | For the Three Months Ended |
|||||||
REVENUE |
2020 |
2019 |
||||||
Consumer and Professional Products | $ |
291,042 |
$ |
241,076 |
||||
Home and Building Products |
250,481 |
241,381 |
||||||
Defense Electronics |
67,768 |
65,981 |
||||||
Total consolidated net sales | $ |
609,291 |
$ |
548,438 |
||||
ADJUSTED EBITDA | ||||||||
Consumer and Professional Products | $ |
32,713 |
$ |
21,926 |
||||
Home and Building Products |
48,369 |
40,701 |
||||||
Defense Electronics |
5,585 |
4,475 |
||||||
Total |
86,667 |
67,102 |
||||||
Unallocated amounts, excluding depreciation* |
(12,027) |
(11,942) |
||||||
Adjusted EBITDA |
74,640 |
55,160 |
||||||
Net interest expense |
(15,645) |
(15,950) |
||||||
Depreciation and amortization |
(15,266) |
(15,825) |
||||||
Restructuring charges |
(10,800) |
(6,434) |
||||||
Gain on sale of SEG business |
6,240 |
— |
||||||
Income before taxes from operations | $ |
39,169 |
$ |
16,951 |
||||
DEPRECIATION and AMORTIZATION | ||||||||
Segment: | ||||||||
Consumer and Professional Products | $ |
8,199 |
$ |
8,231 |
||||
Home and Building Products |
4,341 |
4,800 |
||||||
Defense Electronics |
2,676 |
2,644 |
||||||
Total segment depreciation and amortization |
15,216 |
15,675 |
||||||
Corporate |
50 |
150 |
||||||
Total consolidated depreciation and amortization | $ |
15,266 |
$ |
15,825 |
||||
* Primarily Corporate Overhead |
Griffon believes Free Cash Flow ("FCF", a non-GAAP measure) is a useful measure for investors because it portrays the Company's ability to generate cash from operations for purposes such as repaying debt, funding acquisitions and paying dividends.
The following table below provides a reconciliation of Net cash provided by (used in) operating activities to FCF:
|
For the Three Months Ended |
||||||
|
2020 |
|
2019 |
||||
Net cash provided by (used in) operating activities |
$ |
20,829 |
|
|
$ |
(18,169) |
|
Acquisition of property, plant and equipment |
(11,926) |
|
|
(13,172) |
|
||
Proceeds from the sale of property, plant and equipment |
53 |
|
|
184 |
|
||
FCF |
$ |
8,956 |
|
|
$ |
(31,157) |
|
|
|
|
|
GRIFFON CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME
(in thousands, except per share data)
(Unaudited)
|
|
Three Months Ended |
||||||
|
|
2020 |
|
2019 |
||||
Revenue |
|
$ |
609,291 |
|
|
$ |
548,438 |
|
Cost of goods and services |
|
439,119 |
|
|
398,517 |
|
||
Gross profit |
|
170,172 |
|
|
149,921 |
|
||
Selling, general and administrative expenses |
|
121,557 |
|
|
117,798 |
|
||
Income from operations |
|
48,615 |
|
|
32,123 |
|
||
Other income (expense) |
|
|
|
|
||||
Interest expense |
|
(15,690) |
|
|
(16,211) |
|
||
Interest income |
|
45 |
|
|
261 |
|
||
Gain on sale of business |
|
6,240 |
|
|
— |
|
||
Other, net |
|
(41) |
|
|
778 |
|
||
Total other expense, net |
|
(9,446) |
|
|
(15,172) |
|
||
Income before taxes |
|
39,169 |
|
|
16,951 |
|
||
Provision for income taxes |
|
9,669 |
|
|
6,339 |
|
||
Net income |
|
$ |
29,500 |
|
|
$ |
10,612 |
|
Basic earnings per common share |
|
$ |
0.58 |
|
|
$ |
0.26 |
|
Basic weighted-average shares outstanding |
|
50,596 |
|
|
41,173 |
|
||
Diluted earnings per common share |
|
$ |
0.55 |
|
|
$ |
0.24 |
|
Diluted weighted-average shares outstanding |
|
53,192 |
|
|
43,895 |
|
||
Dividends paid per common share |
|
$ |
0.08 |
|
|
$ |
0.075 |
|
|
|
|
|
|
||||
Net income |
|
$ |
29,500 |
|
|
$ |
10,612 |
|
Other comprehensive income (loss), net of taxes: |
|
|
|
|
||||
Foreign currency translation adjustments |
|
12,123 |
|
|
6,470 |
|
||
Pension and other post retirement plans |
|
1,706 |
|
|
672 |
|
||
Change in cash flow hedges |
|
(688) |
|
|
(301) |
|
||
Total other comprehensive income (loss), net of taxes |
|
13,141 |
|
|
6,841 |
|
||
Comprehensive income, net |
|
$ |
42,641 |
|
|
$ |
17,453 |
|
GRIFFON CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
|
(Unaudited) |
|
|
||||
|
|
|
|
||||
CURRENT ASSETS |
|
|
|
||||
Cash and equivalents |
$ |
233,807 |
|
|
$ |
218,089 |
|
Accounts receivable, net of allowances of |
318,535 |
|
|
340,546 |
|
||
Contract assets, net of progress payments of |
86,260 |
|
|
84,426 |
|
||
Inventories |
445,022 |
|
|
413,825 |
|
||
Prepaid and other current assets |
59,116 |
|
|
46,897 |
|
||
Assets of discontinued operations |
1,591 |
|
|
2,091 |
|
||
Total Current Assets |
1,144,331 |
|
|
1,105,874 |
|
||
PROPERTY, PLANT AND EQUIPMENT, net |
342,706 |
|
|
343,964 |
|
||
OPERATING LEASE RIGHT-OF-USE ASSETS |
157,860 |
|
|
161,627 |
|
||
|
446,456 |
|
|
442,643 |
|
||
INTANGIBLE ASSETS, net |
357,832 |
|
|
355,028 |
|
||
OTHER ASSETS |
29,861 |
|
|
32,897 |
|
||
ASSETS OF DISCONTINUED OPERATIONS |
5,397 |
|
|
6,406 |
|
||
Total Assets |
$ |
2,484,443 |
|
|
$ |
2,448,439 |
|
|
|
|
|
||||
CURRENT LIABILITIES |
|
|
|
||||
Notes payable and current portion of long-term debt |
$ |
11,158 |
|
|
$ |
9,922 |
|
Accounts payable |
237,900 |
|
|
232,107 |
|
||
Accrued liabilities |
161,594 |
|
|
163,994 |
|
||
Current portion of operating lease liabilities |
31,304 |
|
|
31,848 |
|
||
Liabilities of discontinued operations |
4,842 |
|
|
3,797 |
|
||
Total Current Liabilities |
446,798 |
|
|
441,668 |
|
||
LONG-TERM DEBT, net |
1,037,413 |
|
|
1,037,042 |
|
||
LONG-TERM OPERATING LEASE LIABILITIES |
132,634 |
|
|
136,054 |
|
||
OTHER LIABILITIES |
122,047 |
|
|
126,510 |
|
||
LIABILITIES OF DISCONTINUED OPERATIONS |
5,504 |
|
|
7,014 |
|
||
Total Liabilities |
1,744,396 |
|
|
1,748,288 |
|
||
COMMITMENTS AND CONTINGENCIES |
|
|
|
||||
SHAREHOLDERS’ EQUITY |
|
|
|
||||
Total Shareholders’ Equity |
740,047 |
|
|
700,151 |
|
||
Total Liabilities and Shareholders’ Equity |
$ |
2,484,443 |
|
|
$ |
2,448,439 |
|
GRIFFON CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - continued
(in thousands)
(Unaudited)
Three Months Ended |
|||||||
|
2020 |
|
2019 |
||||
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
||||
Net income |
$ |
29,500 |
|
|
$ |
10,612 |
|
Adjustments to reconcile net income to net cash provided by (used in) operating activities: |
|
|
|
||||
Depreciation and amortization |
15,266 |
|
|
15,825 |
|
||
Stock-based compensation |
4,208 |
|
|
3,982 |
|
||
Asset impairment charges - restructuring |
5,794 |
|
|
4,160 |
|
||
Provision for losses on accounts receivable |
93 |
|
|
35 |
|
||
Amortization of debt discounts and issuance costs |
680 |
|
|
1,273 |
|
||
Deferred income taxes |
442 |
|
|
198 |
|
||
Gain (loss) on sale of assets and investments |
174 |
|
|
(186) |
|
||
Gain on sale of business |
(6,240) |
|
|
— |
|
||
Change in assets and liabilities, net of assets and liabilities acquired: |
|
|
|
||||
Decrease in accounts receivable and contract assets, net |
10,494 |
|
|
2,942 |
|
||
Increase in inventories |
(31,924) |
|
|
(19,480) |
|
||
Increase in prepaid and other assets |
(3,517) |
|
|
(2,269) |
|
||
Decrease in accounts payable, accrued liabilities, income taxes payable and operating lease liabilities |
(5,425) |
|
|
(36,445) |
|
||
Other changes, net |
1,284 |
|
|
1,184 |
|
||
Net cash provided by (used in) operating activities |
20,829 |
|
|
(18,169) |
|
||
CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
||||
Acquisition of property, plant and equipment |
(11,926) |
|
|
(13,172) |
|
||
Acquired businesses, net of cash acquired |
(2,242) |
|
|
(10,531) |
|
||
Proceeds from sale of business, net |
15,580 |
|
|
— |
|
||
Proceeds from the sale of property, plant and equipment |
53 |
|
|
184 |
|
||
Other, net |
26 |
|
|
— |
|
||
Net cash provided by (used in) investing activities |
1,491 |
|
|
(23,519) |
|
||
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
||||
Dividends paid |
(4,422) |
|
|
(3,392) |
|
||
Purchase of shares for treasury |
(2,909) |
|
|
(1,758) |
|
||
Proceeds from long-term debt |
40,791 |
|
|
71,957 |
|
||
Payments of long-term debt |
(42,120) |
|
|
(32,045) |
|
||
Financing costs |
(569) |
|
|
(21) |
|
||
Other, net |
(68) |
|
|
(40) |
|
||
Net cash provided by (used in) financing activities |
(9,297) |
|
|
34,701 |
|
GRIFFON CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - continued
(in thousands)
(Unaudited)
Three Months Ended |
|||||||
|
2020 |
|
2019 |
||||
CASH FLOWS FROM DISCONTINUED OPERATIONS: |
|
|
|
||||
Net cash used in operating activities |
(752) |
|
|
(606) |
|
||
Net cash provided by investing activities |
2,224 |
|
|
— |
|
||
Net cash provided by (used in) discontinued operations |
1,472 |
|
|
(606) |
|
||
Effect of exchange rate changes on cash and equivalents |
1,223 |
|
|
8 |
|
||
NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS |
15,718 |
|
|
(7,585) |
|
||
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD |
218,089 |
|
|
72,377 |
|
||
CASH AND EQUIVALENTS AT END OF PERIOD |
$ |
233,807 |
|
|
$ |
64,792 |
|
Griffon evaluates performance based on Earnings per share and Net income excluding restructuring charges, loss from debt extinguishment, acquisition related expenses, discrete and certain other tax items, as well other items that may affect comparability, as applicable. Griffon believes this information is useful to investors. The following tables provides a reconciliation of Net Income to Adjusted net income and Earnings per common share from operations to Adjusted earnings per common share from operations:
(in thousands, except per share data) |
|
For the Three Months Ended |
||||||
|
|
2020 |
|
2019 |
||||
Net income |
|
$ |
29,500 |
|
|
$ |
10,612 |
|
|
|
|
|
|
||||
Adjusting items: |
|
|
|
|
||||
Restructuring charges |
|
10,800 |
|
|
6,434 |
|
||
Gain on sale of SEG business |
|
(6,240) |
|
|
— |
|
||
Tax impact of above items |
|
(2,277) |
|
|
(2,286) |
|
||
Discrete and certain other tax provisions (benefits), net |
|
(2,028) |
|
|
833 |
|
||
Adjusted net income |
|
$ |
29,755 |
|
|
$ |
15,593 |
|
Diluted earnings per common share |
|
$ |
0.55 |
|
|
$ |
0.24 |
|
Adjusting items, net of tax: |
|
|
|
|
||||
Restructuring charges |
|
0.16 |
|
|
0.09 |
|
||
Gain on sale of SEG business |
|
(0.11) |
|
|
— |
|
||
Discrete and certain other tax provisions (benefits), net |
|
(0.04) |
|
|
0.02 |
|
||
Adjusted earnings per common share |
|
$ |
0.56 |
|
|
$ |
0.36 |
|
Weighted-average shares outstanding (in thousands) |
|
53,192 |
|
|
43,895 |
|
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.
View source version on businesswire.com: https://www.businesswire.com/news/home/20210128005612/en/
Company Contact:
SVP & Chief Financial Officer
(212) 957-5000
Investor Relations Contact:
Managing Director
(203) 682-8311
Source: