Press Release
Griffon Corporation Announces First Quarter Results
Consolidated revenue was
Income from continuing operations was
Segment adjusted EBITDA was
Kramer added, “The diversity of our leading brands and businesses positions us to accelerate growth in revenue, free cash flow and earnings per share. The agility of our management team and versatile operating plan continues to produce solid financial results even in uncertain market conditions. We are pleased with our strong results and are optimistic about our outlook this year."
Segment Operating Results
Home & Building Products
Revenue was
Segment adjusted EBITDA was
Defense Electronics
Revenue was
Segment adjusted EBITDA was
Contract backlog was
Taxes
In the quarter ended
Share Repurchases
In
Balance Sheet and Capital Expenditures
At
Conference Call Information
The Company will hold a conference call today,
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
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 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 two reportable segments:
-
Home & Building Products segment consists of two companies, AMES and
CBP:
AMES, founded in 1774, is the leading North American manufacturer and a global provider of branded consumer and professional tools, landscaping products, and outdoor lifestyle solutions. In 2018, we acquired ClosetMaid, a leader in wood and wire closet organization, general living storage and wire garage storage products for homeowners and professionals.
CBP, since 1964, is a leading manufacturer and marketer of residential and commercial garage doors and sells to professional dealers and some of the largest home center retail chains inNorth America . In 2018, we acquired CornellCookson, a leading U.S. manufacturer and marketer of rolling steel door and grille products designed for commercial, industrial, institutional, and retail use.
-
Defense Electronics segment consists of
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 each segment's operating results from continuing operations before interest income and expense, income taxes, depreciation and amortization, unallocated amounts (mainly corporate overhead), restructuring charges, loss on debt extinguishment and acquisition related expenses, as well as other items that may affect comparability, as applicable ("Segment adjusted EBITDA", a non-GAAP measure). Griffon believes this information is useful to investors.
The following table provides a reconciliation of Segment adjusted EBITDA to Income (loss) before taxes from continuing operations:
GRIFFON CORPORATION AND SUBSIDIARIES |
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For the Three Months Ended December 31, | ||||||||
REVENUE | 2018 | 2017 | ||||||
Home & Building Products: | ||||||||
AMES | $ | 216,474 | $ | 216,742 | ||||
CBP | 223,295 | 154,236 | ||||||
Home & Building Products | 439,769 | 370,978 | ||||||
Defense Electronics | 70,753 | 66,325 | ||||||
Total consolidated net sales | $ | 510,522 | $ | 437,303 | ||||
Segment adjusted EBITDA: | ||||||||
Home & Building Products | $ | 51,860 | $ | 39,457 | ||||
Defense Electronics | 4,785 | 4,199 | ||||||
Segment adjusted EBITDA | 56,645 | 43,656 | ||||||
Net interest expense | (16,331 | ) | (16,642 | ) | ||||
Segment depreciation and amortization | (14,951 | ) | (12,852 | ) | ||||
Unallocated amounts | (11,398 | ) | (10,436 | ) | ||||
Acquisition costs | — | (3,185 | ) | |||||
Cost of life insurance benefit | — | (2,614 | ) | |||||
Income (loss) before taxes from continuing operations | $ | 13,965 | $ | (2,073 | ) | |||
The following is a reconciliation of each segment's operating results to Segment adjusted EBITDA from continuing operations:
GRIFFON CORPORATION AND SUBSIDIARIES |
|||||||
Three Months Ended December 31, | |||||||
2018 | 2017 | ||||||
Home & Building Products: | |||||||
Segment operating profit | $ | 39,545 | $ | 27,751 | |||
Depreciation and amortization | 12,315 | 10,133 | |||||
Acquisition costs | — | 1,573 | |||||
Segment adjusted EBITDA | 51,860 | 39,457 | |||||
Defense Electronics: | |||||||
Segment operating profit | 2,149 | 1,480 | |||||
Depreciation and amortization | 2,636 | 2,719 | |||||
Segment adjusted EBITDA | 4,785 | 4,199 | |||||
All segments: | |||||||
Income from operations - as reported | 29,292 | 14,155 | |||||
Unallocated amounts | 11,398 | 10,436 | |||||
Other, net | 1,004 | 414 | |||||
Acquisition costs | — | 1,612 | |||||
Cost of life insurance benefit | — | 2,614 | |||||
Segment operating profit from continuing operations | 41,694 | 29,231 | |||||
Depreciation and amortization | 14,951 | 12,852 | |||||
Acquisition costs | — | 1,573 | |||||
Segment adjusted EBITDA from continuing operations | $ | 56,645 | $ | 43,656 | |||
Unallocated amounts typically include general corporate expenses not attributable to any reportable segment.
GRIFFON CORPORATION AND SUBSIDIARIES |
||||||||
Three Months Ended December 31, | ||||||||
2018 | 2017 | |||||||
Revenue | $ | 510,522 | $ | 437,303 | ||||
Cost of goods and services | 367,476 | 316,524 | ||||||
Gross profit | 143,046 | 120,779 | ||||||
Selling, general and administrative expenses | 113,754 | 106,624 | ||||||
Income from operations | 29,292 | 14,155 | ||||||
Other income (expense) | ||||||||
Interest expense | (16,529 | ) | (16,839 | ) | ||||
Interest income | 198 | 197 | ||||||
Other, net | 1,004 | 414 | ||||||
Total other expense, net | (15,327 | ) | (16,228 | ) | ||||
Income (loss) before taxes from continuing operations | 13,965 | (2,073 | ) | |||||
Provision (benefit) from income taxes | 5,212 | (24,904 | ) | |||||
Income from continuing operations | $ | 8,753 | $ | 22,831 | ||||
Discontinued operations: | ||||||||
Income from operations of discontinued operations | — | 11,466 | ||||||
Provision for income taxes | — | 3,308 | ||||||
Income from discontinued operations | — | 8,158 | ||||||
Net income | $ | 8,753 | $ | 30,989 | ||||
Income from continuing operations | $ | 0.21 | $ | 0.54 | ||||
Income from discontinued operations | — | 0.19 | ||||||
Basic earnings per common share | $ | 0.21 | $ | 0.74 | ||||
Weighted-average shares outstanding | 40,750 | 41,923 | ||||||
Income from continuing operations | $ | 0.21 | $ | 0.53 | ||||
Income from discontinued operations | — | 0.19 | ||||||
Diluted earnings per common share | $ | 0.21 | $ | 0.72 | ||||
Weighted-average shares outstanding | 41,888 | 43,336 | ||||||
Net income | $ | 8,753 | $ | 30,989 | ||||
Other comprehensive income (loss), net of taxes: | ||||||||
Foreign currency translation adjustments | (5,736 | ) | (1,289 | ) | ||||
Pension and other post retirement plans | 184 | 9,559 | ||||||
Change in cash flow hedges | 102 | 88 | ||||||
Total other comprehensive income (loss), net of taxes | (5,450 | ) | 8,358 | |||||
Comprehensive income, net | $ | 3,303 | $ | 39,347 | ||||
GRIFFON CORPORATION AND SUBSIDIARIES |
|||||||
(Unaudited) | |||||||
December 31, 2018 |
September 30, 2018 |
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CURRENT ASSETS | |||||||
Cash and equivalents | $ | 81,752 | $ | 69,758 | |||
Accounts receivable, net of allowances of $7,892 and $6,408 | 253,351 | 280,509 | |||||
Contract costs and recognized income not yet billed, net of progress payments of $4,037 and $3,172 | 89,232 | 121,803 | |||||
Inventories | 452,362 | 398,359 | |||||
Prepaid and other current assets | 39,615 | 42,121 | |||||
Assets of discontinued operations | 325 | 324 | |||||
Total Current Assets | 916,637 | 912,874 | |||||
PROPERTY, PLANT AND EQUIPMENT, net | 336,490 | 342,492 | |||||
GOODWILL | 438,428 | 439,395 | |||||
INTANGIBLE ASSETS, net | 365,381 | 370,858 | |||||
OTHER ASSETS | 14,944 | 16,355 | |||||
ASSETS OF DISCONTINUED OPERATIONS | 2,909 | 2,916 | |||||
Total Assets | $ | 2,074,789 | $ | 2,084,890 | |||
CURRENT LIABILITIES | |||||||
Notes payable and current portion of long-term debt | $ | 12,872 | $ | 13,011 | |||
Accounts payable | 209,202 | 233,658 | |||||
Accrued liabilities | 138,368 | 139,192 | |||||
Liabilities of discontinued operations | 6,882 | 7,210 | |||||
Total Current Liabilities | 367,324 | 393,071 | |||||
LONG-TERM DEBT, net | 1,142,079 | 1,108,071 | |||||
OTHER LIABILITIES | 91,315 | 106,710 | |||||
LIABILITIES OF DISCONTINUED OPERATIONS | 2,510 | 2,647 | |||||
Total Liabilities | 1,603,228 | 1,610,499 | |||||
COMMITMENTS AND CONTINGENCIES | |||||||
SHAREHOLDERS’ EQUITY | |||||||
Total Shareholders’ Equity | 471,561 | 474,391 | |||||
Total Liabilities and Shareholders’ Equity | $ | 2,074,789 | $ | 2,084,890 | |||
GRIFFON CORPORATION AND SUBSIDIARIES |
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Three Months Ended December 31, | ||||||||
2018 | 2017 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES - CONTINUING OPERATIONS: | ||||||||
Net income | $ | 8,753 | $ | 30,989 | ||||
Net (income) from discontinued operations | — | (8,158 | ) | |||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||||||||
Depreciation and amortization | 15,085 | 12,958 | ||||||
Stock-based compensation | 2,933 | 2,555 | ||||||
Provision (recovery) for losses on accounts receivable | 158 | (220 | ) | |||||
Amortization of debt discounts and issuance costs | 1,229 | 1,243 | ||||||
Deferred income taxes | (1,380 | ) | (23,186 | ) | ||||
(Gain) loss on sale of assets and investments | (91 | ) | 209 | |||||
Change in assets and liabilities, net of assets and liabilities acquired: | ||||||||
Decrease in accounts receivable and contract costs and recognized income not yet billed | 37,181 | 38,909 | ||||||
Increase in inventories | (33,958 | ) | (28,073 | ) | ||||
Increase in prepaid and other assets | (444 | ) | (8,459 | ) | ||||
Decrease in accounts payable, accrued liabilities and income taxes payable | (29,622 | ) | (24,973 | ) | ||||
Other changes, net | 1,197 | 552 | ||||||
Net cash provided by (used in) operating activities - continuing operations | 1,041 | (5,654 | ) | |||||
CASH FLOWS FROM INVESTING ACTIVITIES - CONTINUING OPERATIONS: | ||||||||
Acquisition of property, plant and equipment | (8,397 | ) | (10,785 | ) | ||||
Acquired businesses, net of cash acquired | (9,219 | ) | (198,683 | ) | ||||
Proceeds from sale of assets | 51 | 439 | ||||||
Net cash used in investing activities - continuing operations | (17,565 | ) | (209,029 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES - CONTINUING OPERATIONS: | ||||||||
Dividends paid | (3,143 | ) | (2,990 | ) | ||||
Purchase of shares for treasury | (1,348 | ) | (4,332 | ) | ||||
Proceeds from long-term debt | 38,965 | 326,094 | ||||||
Payments of long-term debt | (4,322 | ) | (52,973 | ) | ||||
Change in short-term borrowings | 38 | 35 | ||||||
Financing costs | (67 | ) | (7,392 | ) | ||||
Contingent consideration for acquired businesses | (1,686 | ) | — | |||||
Other, net | 137 | 84 | ||||||
Net cash provided by financing activities - continuing operations | 28,574 | 258,526 | ||||||
CASH FLOWS FROM DISCONTINUED OPERATIONS: | ||||||||
Net cash provided by (used in) operating activities | (458 | ) | 1,261 | |||||
Net cash used in investing activities | — | (8,076 | ) | |||||
Net cash provided by financing activities | — | 396 | ||||||
Net cash used in discontinued operations | (458 | ) | (6,419 | ) | ||||
Effect of exchange rate changes on cash and equivalents | 402 | (685 | ) | |||||
NET INCREASE IN CASH AND EQUIVALENTS | 11,994 | 36,739 | ||||||
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD | 69,758 | 47,681 | ||||||
CASH AND EQUIVALENTS AT END OF PERIOD | $ | 81,752 | $ | 84,420 | ||||
Griffon evaluates performance based on Earnings per share and Net income excluding restructuring charges, loss on debt extinguishment, acquisition related expenses and discrete and certain other tax items, as well as other items that may affect comparability, as applicable. Griffon believes this information is useful to investors for the same reason. The following table provides a reconciliation of Income from continuing operations to Adjusted income from continuing operations and earnings per share from continuing operations to Adjusted earnings per share from continuing operations:
GRIFFON CORPORATION AND SUBSIDIARIES |
||||||||
For the Three Months Ended December 31, | ||||||||
2018 | 2017 | |||||||
Income from continuing operations | $ | 8,753 | $ | 22,831 | ||||
Adjusting items, net of tax: | ||||||||
Acquisition costs | — | 2,348 | ||||||
Cost of life insurance benefit | — | 248 | ||||||
Discrete and certain other tax provisions (benefits) | 467 | (23,018 | ) | |||||
Adjusted income from continuing operations | $ | 9,220 | $ | 2,409 | ||||
Diluted earnings per common share from continuing operations | $ | 0.21 | $ | 0.53 | ||||
Adjusting items, net of tax: | ||||||||
Acquisition costs | — | 0.05 | ||||||
Cost of life insurance benefit | — | 0.01 | ||||||
Discrete and certain other tax benefits | 0.01 | (0.53 | ) | |||||
Adjusted earnings per common share from continuing operations | $ | 0.22 | $ | 0.06 | ||||
Weighted-average shares outstanding (in thousands) | 41,888 | 43,336 | ||||||
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/20190131005465/en/
Source:
Company:
Brian G. Harris
SVP & Chief Financial Officer
Griffon
Corporation
(212) 957-5000
Investor Relations Contact:
Michael
Callahan
Senior Vice President
ICR Inc.
(203) 682-8311