NEW YORK--(BUSINESS WIRE)--Jan. 30, 2014--
Griffon Corporation (“Griffon” or the “Company”) (NYSE:GFF) today
reported results for the fiscal first quarter ended December 31, 2013.
Revenue totaled $453 million, increasing 7% over the prior year quarter.
Home and Building Products (“HBP”) and Clopay Plastics (“Plastics”)
revenue increased 15% and 1%, respectively, over the prior year quarter,
while Telephonics revenue was in-line with the prior year.
Segment adjusted EBITDA totaled $44.2 million, increasing 3% compared to
$42.9 million reported in the prior year quarter. Segment adjusted
EBITDA is defined as net income excluding interest income and expense,
income taxes, depreciation and amortization, unallocated amounts (mainly
corporate overhead), restructuring charges, acquisition-related
expenses, and gains (losses) from pension settlement and debt
extinguishment, as applicable.
Net income totaled $3.2 million, or $0.06 per share, compared to $0.6
million, or $0.01 per share, in the prior year quarter. Current quarter
results included restructuring costs of $0.8 million ($0.5 million, net
of tax, or $0.01 per share), acquisition costs of $0.8 million ($0.5
million, net of tax, or $0.01 per share) and discrete tax benefits of
$0.3 million, or $0.01 per share. The prior year quarter included
restructuring costs of $1.1 million ($0.7 million, net of tax, or $0.01
per share), a loss on pension settlement of $2.1 million ($1.4 million,
net of tax, or $0.02 per share) and discrete tax benefits of $0.1
million or $0.00 per share. Excluding these items from both periods,
current quarter adjusted net income was $4.0 million, or $0.07 per
share, compared to $2.6 million, or $0.05 per share, in the prior year
quarter.
Ronald J. Kramer, Chief Executive Officer, commented, “This is an
excellent start to the year. Our results reflect continued improvement
in our operating performance. Each of our businesses is well positioned
for enhanced growth and profitability as the economic recovery
accelerates. During the quarter, we strengthened our HBP segment with
the acquisition of Northcote Pottery (“Northcote”), a leading brand in
the Australian outdoor planter and decor market. We also completed the
repurchase of $50 million of our common stock. Both transactions are
immediately accretive, and demonstrate our commitment to increasing
shareholder value while maintaining a disciplined approach to capital
allocation.”
Segment Operating Results
Home & Building Products
Revenue totaled $218 million, increasing 15% compared to the prior year
quarter. Ames True Temper (“ATT”) revenue increased 25% compared to the
prior year quarter primarily due to improved U.S. and Canada snow tool
sales. Clopay Building Products (“CBP”) revenue increased 8%, primarily
due to improved volume.
Segment adjusted EBITDA was $19.1 million, increasing 11% compared to
the prior year quarter, primarily as a result of improved volume at ATT
and CBP. Partially offsetting the volume benefit, ATT continued to
experience manufacturing inefficiencies in connection with its plant
consolidation initiative, which are expected to continue until the
initiative is completed. The prior year quarter also benefitted from
$1.0 million in Byrd Amendment receipts (anti-dumping compensation from
the U.S. government); current quarter Byrd Amendment receipts were not
significant.
On December 31, 2013, ATT acquired Northcote, a leading brand in the
Australian outdoor planter and decor market, for approximately $24
million. The acquisition of Northcote complements Southern Patio,
acquired in 2011, and adds to ATT’s existing lawn and garden operations
in Australia. Northcote is expected to generate approximately $28
million of annualized revenue. Griffon incurred $0.8 million of
acquisition costs related to this transaction in the first quarter of
2014.
Telephonics
Revenue totaled $96 million, comparable with the prior year quarter.
This quarter benefitted from increased international radar program
sales, offset by reduced MH-60 Romeo radar sales.
Segment adjusted EBITDA was $12.4 million, decreasing 24% from the prior
year quarter, as expected. The prior year quarter benefitted from a
combination of favorable program mix and manufacturing efficiencies.
Contract backlog totaled $416 million at December 31, 2013 compared to
$444 million at September 30, 2013, with approximately 68% expected to
be fulfilled within the next twelve months.
Plastic Products
Revenue totaled $139 million, increasing 1% compared to the prior year
quarter. The increase reflected the benefit of favorable mix (3%), the
pass through of higher resin costs in customer selling prices (2%) and
favorable foreign exchange translation (1%), partially offset by the
impact of lower volume (5%), a portion of which was attributable to
Plastics exiting certain low margin products in the second half of
fiscal 2013. Plastics adjusts customer selling prices, based on
underlying resin costs, on a delayed basis.
Segment adjusted EBITDA was $12.7 million, increasing 37% from the prior
year quarter, driven by efficiency improvements and a $0.6 million
favorable resin benefit, partially offset by the impact of the reduced
volume.
Taxes
The effective tax rate for the quarter ended December 31, 2013 was 32.4%
compared to 68.1% in the prior year quarter. The rates include discrete
benefits in the current and prior year quarter of $0.3 million and $0.1
million, respectively, primarily resulting from the release of
previously established reserves for uncertain tax positions on
conclusion of certain tax audits, and benefits arising on the filing of
tax returns in various jurisdictions.
Excluding discrete items, the effective tax rate for the quarter ended
December 31, 2013 was 38.4% compared to 71.3% in the prior year quarter.
Rates in both quarters reflect the impact of permanent differences not
deductible in determining taxable income, mainly limited deductibility
of restricted stock, tax reserves and of changes in earnings mix between
domestic and non-domestic operations, all of which are material relative
to the level of pretax result; the impact of the permanent differences
diminished in the current quarter primarily as a result of the improved
pretax result.
Restructuring
In January 2013, ATT announced its intention to close certain
manufacturing facilities and consolidate affected operations primarily
into its Camp Hill and Carlisle, PA locations. The intended actions, to
be completed by the end of calendar 2014, will improve manufacturing and
distribution efficiencies, allow for in-sourcing of certain production
currently performed by third party suppliers, and improve material flow
and absorption of fixed costs. Management estimates that, upon
completion, these actions will result in annual cash savings exceeding
$10 million, based on current operating levels.
ATT anticipates incurring pre-tax restructuring and related exit costs
approximating $8.0 million, comprised of cash charges of $4.0 million
and non-cash, asset-related charges of $4.0 million. Cash charges will
include $2.5 million for personnel-related costs and $1.5 million for
facility exit costs. ATT expects $20 million in capital expenditures in
connection with this initiative and, to date, has incurred $7.2 million
and $14.4 million in restructuring costs and capital expenditures,
respectively.
In the first quarter of 2014 and 2013, HBP recognized $0.8 million and
$1.1 million, respectively, in restructuring and other related exit
costs; such charges primarily related to one-time termination benefits,
facility and other personnel costs, and asset impairment charges related
to the ATT plant consolidation initiatives.
Balance Sheet and Capital Expenditures
At December 31, 2013, the Company had cash and equivalents of $95
million, total debt outstanding of $733 million, net of discounts, and
$180 million available for borrowing, subject to certain loan covenants,
under its revolving credit facility. Capital expenditures were $17.9
million in the current quarter.
Stock Repurchases
On December 10, 2013, Griffon repurchased 4,444,444 shares of its common
stock for $50 million from an affiliate of Goldman Sachs. The repurchase
was effected in a private transaction at a per share price of $11.25, an
approximate 9.2% discount to the stock’s closing price on November 12,
2013, the day before announcement of the transaction. The transaction
was exclusive of the Company´s current $50 million authorized share
repurchase program, of which $11.2 million remains as of December 31,
2013.
Conference Call Information
The Company will hold a conference call today, January 30, 2014, at 4:30
PM ET.
The call can be accessed by dialing 1-888-504-7953 (U.S. participants)
or 1-719-457-1506 (International participants). Callers should ask to be
connected to the Griffon Corporation teleconference.
A replay of the call will be available starting on January 30, 2014 at
7:30 PM ET by dialing 1-877-870-5176 (U.S.) or 1-858-384-5517
(International), and entering the conference ID number: 2335993. The
replay will be available through February 13, 2014.
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 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,” “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; the Company’s
ability to achieve expected savings from cost control, integration and
disposal initiatives; 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; reduced military spending by the
government on projects for which Griffon’s Telephonics Corporation
supplies products, including as a result of sequestration at such time
as the budgetary cuts mandated by sequestration begin to take effect;
increases in the cost of raw materials such as resin and steel; changes
in customer demand; the potential impact of seasonal variations and
uncertain weather patterns on certain of Griffon’s businesses; political
events that could impact the worldwide economy; a downgrade in the
Company’s credit ratings; changes in international economic conditions
including 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 could impact margins
and operating efficiencies; short-term capacity constraints or prolonged
excess capacity; unforeseen developments in contingencies, such as
litigation; unfavorable results of government agency contract audits of
Telephonics Corporation; 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 Griffon’s operating
companies; and possible terrorist threats and actions and their impact
on the global economy. 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. The Company 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 in connection with divestitures. In order to
further diversify, Griffon also seeks out, evaluates and, when
appropriate, will acquire additional businesses that offer potentially
attractive returns on capital.
Griffon currently conducts its operations through three segments:
-
Home & Building Products consists of two companies, Ames True Temper,
Inc. (“ATT”) and Clopay Building Products Company, Inc. (“CBP”):
-
ATT is a global provider of non-powered landscaping products that make
work easier for homeowners and professionals.
-
CBP is a leading manufacturer and marketer of residential, commercial
and industrial garage doors to professional installing dealers and
major home center retail chains.
-
Telephonics Corporation designs, develops and manufactures
high-technology, integrated information, communication and sensor
system solutions for use in military and commercial markets worldwide.
-
Clopay Plastic Products Company, Inc. 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
segment’s operating results before interest income and expense, income
taxes, depreciation and amortization, unallocated amounts (mainly
corporate overhead), restructuring charges, acquisition-related
expenses, and gains (losses) from pension settlement and debt
extinguishment, as applicable (“Segment adjusted EBITDA”). Griffon
believes this information is useful to investors.
The following table provides a reconciliation of Segment adjusted EBITDA
to Income before taxes:
|
|
|
GRIFFON CORPORATION AND SUBSIDIARIES
|
|
OPERATING HIGHLIGHTS
|
|
(in thousands)
|
|
(Unaudited)
|
|
|
|
|
|
For the Three Months Ended December 31,
|
|
REVENUE
|
|
|
2013
|
|
|
|
2012
|
|
|
Home & Building Products:
|
|
|
|
|
|
ATT
|
|
$
|
96,608
|
|
|
$
|
77,309
|
|
|
CBP
|
|
|
121,842
|
|
|
|
112,867
|
|
|
Home & Building Products
|
|
|
218,450
|
|
|
|
190,176
|
|
|
Telephonics
|
|
|
96,025
|
|
|
|
96,050
|
|
|
Plastics
|
|
|
138,983
|
|
|
|
137,523
|
|
|
Total consolidated net sales
|
|
$
|
453,458
|
|
|
$
|
423,749
|
|
|
Segment adjusted EBITDA:
|
|
|
|
|
|
Home & Building Products
|
|
$
|
19,067
|
|
|
$
|
17,239
|
|
|
Telephonics
|
|
|
12,396
|
|
|
|
16,364
|
|
|
Plastics
|
|
|
12,743
|
|
|
|
9,319
|
|
|
Total Segment adjusted EBITDA
|
|
|
44,206
|
|
|
|
42,922
|
|
|
Net interest expense
|
|
|
(13,101
|
)
|
|
|
(13,079
|
)
|
|
Segment depreciation and amortization
|
|
(16,696
|
)
|
|
|
(17,256
|
)
|
|
Unallocated amounts
|
|
|
(7,983
|
)
|
|
|
(7,587
|
)
|
|
Restructuring charges
|
|
|
(842
|
)
|
|
|
(1,108
|
)
|
|
Acquisition costs
|
|
|
(798
|
)
|
|
|
-
|
|
|
Loss on pension settlement
|
|
|
-
|
|
|
|
(2,142
|
)
|
|
Income before taxes
|
|
$
|
4,786
|
|
|
$
|
1,750
|
|
|
|
|
|
|
|
|
|
|
|
The following is a reconciliation of each segment’s operating results to
Segment adjusted EBITDA:
|
GRIFFON CORPORATION AND SUBSIDIARIES
|
|
RECONCILIATION OF NON-GAAP MEASURES
|
|
BY REPORTABLE SEGMENT
|
|
(in thousands)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31,
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
|
|
|
|
|
|
|
|
Home & Building Products
|
|
|
|
|
|
|
Segment operating profit
|
|
$
|
9,393
|
|
$
|
7,271
|
|
|
|
Depreciation and amortization
|
|
|
8,034
|
|
|
8,860
|
|
|
|
Restructuring charges
|
|
|
842
|
|
|
1,108
|
|
|
|
Acquisition costs
|
|
|
798
|
|
|
-
|
|
|
Segment adjusted EBITDA
|
|
|
19,067
|
|
|
17,239
|
|
|
|
|
|
|
|
|
|
Telephonics
|
|
|
|
|
|
|
Segment operating profit
|
|
|
10,652
|
|
|
14,645
|
|
|
|
Depreciation and amortization
|
|
|
1,744
|
|
|
1,719
|
|
|
|
Restructuring charges
|
|
|
-
|
|
|
-
|
|
|
Segment adjusted EBITDA
|
|
|
12,396
|
|
|
16,364
|
|
|
|
|
|
|
|
|
|
Clopay Plastic Products
|
|
|
|
|
|
|
Segment operating profit
|
|
|
5,825
|
|
|
2,642
|
|
|
|
Depreciation and amortization
|
|
|
6,918
|
|
|
6,677
|
|
|
|
Restructuring charges
|
|
|
-
|
|
|
-
|
|
|
Segment adjusted EBITDA
|
|
|
12,743
|
|
|
9,319
|
|
|
|
|
|
|
|
|
|
All segments:
|
|
|
|
|
|
|
Income from operations - as reported
|
|
|
16,981
|
|
|
14,343
|
|
|
|
Unallocated amounts
|
|
|
7,983
|
|
|
7,587
|
|
|
|
Other, net
|
|
|
906
|
|
|
486
|
|
|
|
Loss on pension settlement
|
|
|
-
|
|
|
2,142
|
|
|
Segment operating profit
|
|
|
25,870
|
|
|
24,558
|
|
|
|
Depreciation and amortization
|
|
|
16,696
|
|
|
17,256
|
|
|
|
Restructuring charges
|
|
|
842
|
|
|
1,108
|
|
|
|
Acquisition costs
|
|
|
798
|
|
|
-
|
|
|
Segment adjusted EBITDA
|
|
$
|
44,206
|
|
$
|
42,922
|
|
|
|
|
|
|
|
|
|
|
Unallocated amounts typically include general corporate expenses not
attributable to any reportable segment.
|
|
|
|
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,
|
|
|
|
|
|
|
|
2013
|
|
|
|
2012
|
|
|
Revenue
|
|
|
$
|
453,458
|
|
|
$
|
423,749
|
|
|
Cost of goods and services
|
|
|
347,955
|
|
|
|
326,079
|
|
|
|
Gross profit
|
|
|
|
105,503
|
|
|
|
97,670
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative expenses
|
|
|
87,680
|
|
|
|
82,219
|
|
|
Restructuring and other related charges
|
|
|
842
|
|
|
|
1,108
|
|
|
|
Total operating expenses
|
|
|
88,522
|
|
|
|
83,327
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations
|
|
|
16,981
|
|
|
|
14,343
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense)
|
|
|
|
|
|
|
Interest expense
|
|
|
(13,134
|
)
|
|
|
(13,107
|
)
|
|
|
Interest income
|
|
|
33
|
|
|
|
28
|
|
|
|
Other, net
|
|
|
|
906
|
|
|
|
486
|
|
|
|
|
Total other expense, net
|
|
|
(12,195
|
)
|
|
|
(12,593
|
)
|
|
|
|
|
|
|
|
|
|
|
Income before taxes
|
|
|
4,786
|
|
|
|
1,750
|
|
|
Provision for income taxes
|
|
|
1,550
|
|
|
|
1,192
|
|
|
Net income
|
|
|
$
|
3,236
|
|
|
$
|
558
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per common share
|
|
$
|
0.06
|
|
|
$
|
0.01
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average shares outstanding
|
|
|
52,754
|
|
|
|
55,153
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per common share
|
|
$
|
0.06
|
|
|
$
|
0.01
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average shares outstanding
|
|
|
54,633
|
|
|
|
57,265
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
$
|
3,236
|
|
|
$
|
558
|
|
|
Other comprehensive income (loss), net of taxes:
|
|
|
|
|
|
|
Foreign currency translation adjustments
|
|
|
(3,137
|
)
|
|
|
3,003
|
|
|
|
Pension and other post retirement plans
|
|
|
316
|
|
|
|
3,860
|
|
|
Total other comprehensive income (loss), net of taxes
|
|
|
(2,821
|
)
|
|
|
6,863
|
|
|
Comprehensive income
|
|
$
|
415
|
|
|
$
|
7,421
|
|
|
|
|
GRIFFON CORPORATION AND SUBSIDIARIES
|
|
CONDENSED CONSOLIDATED BALANCE SHEETS
|
|
(in thousands)
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
At December 31, 2013
|
|
At September 30, 2013
|
|
CURRENT ASSETS
|
|
|
|
|
|
|
Cash and equivalents
|
|
$
|
95,374
|
|
$
|
178,130
|
|
|
Accounts receivable, net of allowances of $6,062 and $6,136
|
|
|
245,246
|
|
|
256,215
|
|
|
Contract costs and recognized income not yet billed,
|
|
|
|
|
|
|
|
net of progress payments of $8,727 and $6,941
|
|
|
111,353
|
|
|
109,828
|
|
|
Inventories, net
|
|
|
|
266,921
|
|
|
230,120
|
|
|
Prepaid and other current assets
|
|
|
50,440
|
|
|
48,903
|
|
|
Assets of discontinued operations
|
|
|
1,212
|
|
|
1,214
|
|
|
|
Total Current Assets
|
|
|
770,546
|
|
|
824,410
|
|
PROPERTY, PLANT AND EQUIPMENT, net
|
|
|
355,315
|
|
|
353,593
|
|
GOODWILL
|
|
|
|
368,537
|
|
|
357,730
|
|
INTANGIBLE ASSETS, net
|
|
|
226,079
|
|
|
221,391
|
|
OTHER ASSETS
|
|
|
|
28,621
|
|
|
28,580
|
|
ASSETS OF DISCONTINUED OPERATIONS
|
|
|
3,061
|
|
|
3,075
|
|
|
Total Assets
|
|
|
$
|
1,752,159
|
|
$
|
1,788,779
|
|
|
|
|
|
|
|
|
|
|
CURRENT LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes payable and current portion of long-term debt
|
|
$
|
18,060
|
|
$
|
10,768
|
|
|
Accounts payable
|
|
|
|
158,898
|
|
|
163,610
|
|
|
Accrued liabilities
|
|
|
|
89,700
|
|
|
106,743
|
|
|
Liabilities of discontinued operations
|
|
|
3,142
|
|
|
3,288
|
|
|
|
Total Current Liabilities
|
|
|
269,800
|
|
|
284,409
|
|
LONG-TERM DEBT, net of debt discount of $12,363 and $13,246
|
|
|
715,096
|
|
|
678,487
|
|
OTHER LIABILITIES
|
|
|
167,593
|
|
|
170,675
|
|
LIABILITIES OF DISCONTINUED OPERATIONS
|
|
|
4,577
|
|
|
4,744
|
|
|
Total Liabilities
|
|
|
|
1,157,066
|
|
|
1,138,315
|
|
COMMITMENTS AND CONTINGENCIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
Total Shareholders' Equity
|
|
|
595,093
|
|
|
650,464
|
|
|
Total Liabilities and Shareholders' Equity
|
|
$
|
1,752,159
|
|
$
|
1,788,779
|
|
|
|
GRIFFON CORPORATION AND SUBSIDIARIES
|
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
(in thousands)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31,
|
|
|
|
|
|
|
|
2013
|
|
|
|
2012
|
|
|
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
Net income
|
|
|
$
|
3,236
|
|
|
$
|
558
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments to reconcile net income to
|
|
|
|
|
|
|
net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
16,793
|
|
|
|
17,357
|
|
|
Stock-based compensation
|
|
|
1,675
|
|
|
|
2,960
|
|
|
Fixed asset impairment charges - restructuring
|
|
|
109
|
|
|
|
-
|
|
|
Provision for losses on accounts receivable
|
|
|
185
|
|
|
|
206
|
|
|
Amortization/write-off of deferred financing costs and debt discounts
|
|
|
1,606
|
|
|
|
1,539
|
|
|
Deferred income taxes
|
|
|
(239
|
)
|
|
|
458
|
|
|
(Gain) loss on sale/disposal of assets
|
|
|
53
|
|
|
|
(733
|
)
|
|
Change in assets and liabilities, net of assets and liabilities
acquired:
|
|
|
|
|
|
|
(Increase) decrease in accounts receivable and contract costs
|
|
|
|
|
|
|
|
and recognized income not yet billed
|
|
|
12,835
|
|
|
|
(529
|
)
|
|
|
Increase in inventories
|
|
|
(33,915
|
)
|
|
|
(9,800
|
)
|
|
|
(Increase) decrease in prepaid and other assets
|
|
|
(1,628
|
)
|
|
|
3,625
|
|
|
|
Decrease in accounts payable, accrued liabilities
|
|
|
|
|
|
|
|
and income taxes payable
|
|
|
(25,647
|
)
|
|
|
(50,165
|
)
|
|
|
Other changes, net
|
|
|
543
|
|
|
|
2,022
|
|
|
|
|
Net cash used in operating activities
|
|
|
(24,394
|
)
|
|
|
(32,502
|
)
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
|
Acquisition of property, plant and equipment
|
|
|
(17,916
|
)
|
|
|
(17,288
|
)
|
|
|
Acquired business, net of cash acquired
|
|
|
(23,666
|
)
|
|
|
-
|
|
|
|
Proceeds from sale of assets
|
|
|
224
|
|
|
|
1,055
|
|
|
|
|
Net cash used in investing activities
|
|
|
(41,358
|
)
|
|
|
(16,233
|
)
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
|
Dividends paid
|
|
|
(1,719
|
)
|
|
|
(1,464
|
)
|
|
|
Purchase of shares for treasury
|
|
|
(55,189
|
)
|
|
|
(7,336
|
)
|
|
|
Proceeds from issuance of long-term debt
|
|
|
57,635
|
|
|
|
303
|
|
|
|
Payments of long-term debt
|
|
|
(25,246
|
)
|
|
|
(4,062
|
)
|
|
|
Change in short-term borrowings
|
|
|
9,940
|
|
|
|
1,643
|
|
|
|
Financing costs
|
|
|
(681
|
)
|
|
|
-
|
|
|
|
Purchase of ESOP shares
|
|
|
(1,591
|
)
|
|
|
-
|
|
|
|
Tax benefit from exercise/vesting of equity awards, net
|
|
|
273
|
|
|
|
150
|
|
|
|
Other, net
|
|
|
|
31
|
|
|
|
184
|
|
|
|
|
Net cash used in financing activities
|
|
|
(16,547
|
)
|
|
|
(10,582
|
)
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM DISCONTINUED OPERATIONS:
|
|
|
|
|
|
|
Net cash used in operating activities
|
|
|
(299
|
)
|
|
|
(463
|
)
|
|
|
|
Net cash used in discontinued operations
|
|
|
(299
|
)
|
|
|
(463
|
)
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash and equivalents
|
|
|
(158
|
)
|
|
|
191
|
|
|
|
|
|
|
|
|
|
|
|
NET DECREASE IN CASH AND EQUIVALENTS
|
|
|
(82,756
|
)
|
|
|
(59,589
|
)
|
|
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD
|
|
|
178,130
|
|
|
|
209,654
|
|
|
CASH AND EQUIVALENTS AT END OF PERIOD
|
|
$
|
95,374
|
|
|
$
|
150,065
|
|
Griffon evaluates performance based on Earnings per share and Net income
excluding restructuring charges, acquisition-related expenses, gains
(losses) from pension settlement and debt extinguishment, and discrete
tax items, as applicable. Griffon believes this information is useful to
investors. The following table provides a reconciliation of Earnings per
share and Net income to Adjusted earnings per share and Adjusted net
income:
|
GRIFFON CORPORATION AND SUBSIDIARIES
|
|
RECONCILIATION OF NET INCOME TO ADJUSTED NET INCOME
|
|
(in thousands, except per share data)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended December 31,
|
|
|
|
|
|
|
2013
|
|
|
|
2012
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
3,236
|
|
|
$
|
558
|
|
|
|
|
|
|
|
|
|
|
Adjusting items, net of tax:
|
|
|
|
|
|
|
Restructuring and related
|
|
|
522
|
|
|
|
720
|
|
|
|
Acquisition costs
|
|
|
495
|
|
|
|
-
|
|
|
|
Loss on pension settlement
|
|
|
-
|
|
|
|
1,392
|
|
|
|
Discrete tax benefits
|
|
|
(289
|
)
|
|
|
(55
|
)
|
|
|
|
|
|
|
|
|
|
Adjusted net income
|
|
$
|
3,964
|
|
|
$
|
2,615
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per common share
|
|
$
|
0.06
|
|
|
$
|
0.01
|
|
|
|
|
|
|
|
|
|
|
Adjusting items, net of tax:
|
|
|
|
|
|
|
Restructuring
|
|
|
0.01
|
|
|
|
0.01
|
|
|
|
Acquisition costs
|
|
|
0.01
|
|
|
|
-
|
|
|
|
Loss on pension settlement
|
|
|
-
|
|
|
|
0.02
|
|
|
|
Discrete tax benefits
|
|
|
(0.01
|
)
|
|
|
(0.00
|
)
|
|
|
|
|
|
|
|
|
|
Adjusted diluted earnings per common share
|
|
$
|
0.07
|
|
|
$
|
0.05
|
|
|
|
|
|
|
|
|
|
|
Weighted-average shares outstanding
|
|
|
54,633
|
|
|
|
57,265
|
|
Source: Griffon Corporation
Griffon Corporation
Douglas J. Wetmore
Chief
Financial Officer
212-957-5000
712 Fifth Avenue, 18th
Floor
New York, NY 10019
or
Investor
Relations:
ICR Inc.
Anthony
Gerstein
Senior Vice President
646-277-1242
