Press Release
Griffon Corporation Announces Second Quarter Results
Revenue totaled
Segment adjusted EBITDA totaled
Net income totaled
Segment Operating Results
Home & Building Products
Revenue totaled
Segment adjusted EBITDA was
Telephonics
Revenue totaled
Segment adjusted EBITDA was
Contract backlog totaled
Plastic Products
Revenue totaled
Segment adjusted EBITDA was
During
These investments will allow PPC to maintain and extend its technological advantage and allow us to differentiate ourselves from competitors, while meeting increasing customer demand for lighter, softer, more cost effective and more environmentally friendly products.
In addition, PPC expects to record approximately
Taxes
In both the quarter and six months ended
Balance Sheet and Capital Expenditures
At
On
Share Repurchases
In each of March and
From
Conference Call Information
The Company will hold a conference call today,
The call can be accessed by dialing 1-888-505-4328 (U.S. participants)
or 1-719-325-2278 (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 currently conducts its operations through three reportable segments:
-
Home & Building Products consists of two companies, AMES and CBP:
- AMES is a global provider of non-powered landscaping products for homeowners and professionals.
- CBP is a leading manufacturer and marketer of residential, commercial and industrial garage doors to professional dealers and major home center retail chains.
- Telephonics designs, develops and manufactures high-technology integrated information, communication and sensor system solutions for military and commercial markets worldwide.
- PPC 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.griffon.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), 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) |
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For the Three Months Ended March 31, |
For the Six Months Ended March 31, |
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REVENUE | 2016 | 2015 | 2016 | 2015 | ||||||||||||
Home & Building Products: | ||||||||||||||||
AMES | $ | 165,847 | $ | 159,092 | $ | 284,137 | $ | 292,202 | ||||||||
CBP | 113,387 | 104,513 | 256,295 | 243,113 | ||||||||||||
Home & Building Products | 279,234 | 263,605 | 540,432 | 535,315 | ||||||||||||
Telephonics | 105,874 | 98,687 | 214,911 | 189,345 | ||||||||||||
PPC | 114,999 | 137,728 | 238,913 | 277,520 | ||||||||||||
Total consolidated net sales | $ | 500,107 | $ | 500,020 | $ | 994,256 | $ | 1,002,180 | ||||||||
Segment adjusted EBITDA: | ||||||||||||||||
Home & Building Products | $ | 26,338 | $ | 17,330 | $ | 56,167 | $ | 41,800 | ||||||||
Telephonics | 10,444 | 11,616 | 20,788 | 21,648 | ||||||||||||
PPC | 11,781 | 15,764 | 23,566 | 30,315 | ||||||||||||
Total Segment adjusted EBITDA | 48,563 | 44,710 | 100,521 | 93,763 | ||||||||||||
Net interest expense | (12,348 | ) | (11,857 | ) | (24,360 | ) | (23,494 | ) | ||||||||
Segment depreciation and amortization | (16,998 | ) | (17,078 | ) | (33,967 | ) | (34,225 | ) | ||||||||
Unallocated amounts | (9,379 | ) | (7,580 | ) | (19,007 | ) | (15,844 | ) | ||||||||
Income before taxes | $ | 9,838 | $ | 8,195 | $ | 23,187 | $ | 20,200 | ||||||||
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) |
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Three Months Ended March 31, | Six Months Ended March 31, | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Home & Building Products | ||||||||||||||||
Segment operating profit | $ | 17,810 | $ | 8,651 | $ | 38,969 | $ | 25,020 | ||||||||
Depreciation and amortization | 8,528 | 8,679 | 17,198 | 16,780 | ||||||||||||
Segment adjusted EBITDA | 26,338 | 17,330 | 56,167 | 41,800 | ||||||||||||
Telephonics | ||||||||||||||||
Segment operating profit | 7,875 | 9,114 | 15,688 | 16,631 | ||||||||||||
Depreciation and amortization | 2,569 | 2,502 | 5,100 | 5,017 | ||||||||||||
Segment adjusted EBITDA | 10,444 | 11,616 | 20,788 | 21,648 | ||||||||||||
Clopay Plastic Products | ||||||||||||||||
Segment operating profit | 5,880 | 9,867 | 11,897 | 17,887 | ||||||||||||
Depreciation and amortization | 5,901 | 5,897 | 11,669 | 12,428 | ||||||||||||
Segment adjusted EBITDA | 11,781 | 15,764 | 23,566 | 30,315 | ||||||||||||
All segments: | ||||||||||||||||
Income from operations - as reported | 22,571 | 20,809 | 47,377 | 44,902 | ||||||||||||
Unallocated amounts | 9,379 | 7,580 | 19,007 | 15,844 | ||||||||||||
Other, net | (385 | ) | (757 | ) | 170 | (1,208 | ) | |||||||||
Segment operating profit | 31,565 | 27,632 | 66,554 | 59,538 | ||||||||||||
Depreciation and amortization | 16,998 | 17,078 | 33,967 | 34,225 | ||||||||||||
Segment adjusted EBITDA | $ | 48,563 | $ | 44,710 | $ | 100,521 | $ | 93,763 |
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) |
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Three Months Ended March 31, |
Six Months Ended March 31, |
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2016 | 2015 | 2016 | 2015 | |||||||||||||
Revenue | $ | 500,107 | $ | 500,020 | $ | 994,256 | $ | 1,002,180 | ||||||||
Cost of goods and services | 385,950 | 385,645 | 763,994 | 769,816 | ||||||||||||
Gross profit | 114,157 | 114,375 | 230,262 | 232,364 | ||||||||||||
Selling, general and administrative expenses | 91,586 | 93,566 | 182,885 | 187,462 | ||||||||||||
Income from operations | 22,571 | 20,809 | 47,377 | 44,902 | ||||||||||||
Other income (expense) | ||||||||||||||||
Interest expense | (12,392 | ) | (12,012 | ) | (24,415 | ) | (23,766 | ) | ||||||||
Interest income | 44 | 155 | 55 | 272 | ||||||||||||
Other, net | (385 | ) | (757 | ) | 170 | (1,208 | ) | |||||||||
Total other expense, net | (12,733 | ) | (12,614 | ) | (24,190 | ) | (24,702 | ) | ||||||||
Income before taxes | 9,838 | 8,195 | 23,187 | 20,200 | ||||||||||||
Provision for income taxes | 3,743 | 3,073 | 8,496 | 7,607 | ||||||||||||
Net income | $ | 6,095 | $ | 5,122 | $ | 14,691 | $ | 12,593 | ||||||||
Basic income per common share | $ | 0.15 | $ | 0.11 | $ | 0.35 | $ | 0.27 | ||||||||
Weighted-average shares outstanding | 41,426 | 45,349 | 41,697 | 45,829 | ||||||||||||
Diluted income per common share | $ | 0.14 | $ | 0.11 | $ | 0.33 | $ | 0.26 | ||||||||
Weighted-average shares outstanding | 43,891 | 47,669 | 44,727 | 47,682 | ||||||||||||
Net income | $ | 6,095 | $ | 5,122 | $ | 14,691 | $ | 12,593 | ||||||||
Other comprehensive income (loss), net of taxes: | ||||||||||||||||
Foreign currency translation adjustments | 13,683 | (30,384 | ) | 10,334 | (45,884 | ) | ||||||||||
Pension and other post retirement plans | 386 | 353 | 772 | 706 | ||||||||||||
Change in cash flow hedges | (1,649 | ) | (80 | ) | (2,664 | ) | (154 | ) | ||||||||
Change in available-for-sale securities | — | 92 | — | (870 | ) | |||||||||||
Total other comprehensive income (loss), net of taxes | 12,420 | (30,019 | ) | 8,442 | (46,202 | ) | ||||||||||
Comprehensive income (loss), net | $ | 18,515 | $ | (24,897 | ) | $ | 23,133 | $ | (33,609 | ) | ||||||
GRIFFON CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands) |
|||||||
(Unaudited) At March 31, 2016 |
At September 30, 2015 | ||||||
CURRENT ASSETS | |||||||
Cash and equivalents | $ | 54,282 | $ | 52,001 | |||
Accounts receivable, net of allowances of $6,311 and $5,342 | 261,161 | 218,755 | |||||
Contract costs and recognized income not yet billed, net of progress payments of $15,273 and $16,467 | 108,480 | 103,895 | |||||
Inventories, net | 311,567 | 325,809 | |||||
Prepaid and other current assets | 53,022 | 55,086 | |||||
Assets of discontinued operations | 1,325 | 1,316 | |||||
Total Current Assets | 789,837 | 756,862 | |||||
PROPERTY, PLANT AND EQUIPMENT, net | 386,109 | 379,972 | |||||
GOODWILL | 360,094 | 356,241 | |||||
INTANGIBLE ASSETS, net | 214,733 | 213,837 | |||||
OTHER ASSETS | 25,482 | 22,346 | |||||
ASSETS OF DISCONTINUED OPERATIONS | 2,259 | 2,175 | |||||
Total Assets | $ | 1,778,514 | $ | 1,731,433 | |||
CURRENT LIABILITIES | |||||||
Notes payable and current portion of long-term debt | $ | 19,217 | $ | 16,593 | |||
Accounts payable | 161,737 | 199,811 | |||||
Accrued liabilities | 98,889 | 104,997 | |||||
Liabilities of discontinued operations | 1,924 | 2,229 | |||||
Total Current Liabilities | 281,767 | 323,630 | |||||
LONG-TERM DEBT, net | 922,563 | 826,976 | |||||
OTHER LIABILITIES | 145,583 | 146,923 | |||||
LIABILITIES OF DISCONTINUED OPERATIONS | 3,220 | 3,379 | |||||
Total Liabilities | 1,353,133 | 1,300,908 | |||||
COMMITMENTS AND CONTINGENCIES | |||||||
SHAREHOLDERS’ EQUITY | |||||||
Total Shareholders’ Equity | 425,381 | 430,525 | |||||
Total Liabilities and Shareholders’ Equity | $ | 1,778,514 | $ | 1,731,433 | |||
GRIFFON CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (Unaudited) |
||||||||
Six Months Ended March 31, | ||||||||
2016 | 2015 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
Net income | $ | 14,691 | $ | 12,593 | ||||
Adjustments to reconcile net income to net cash used in operating activities: | ||||||||
Depreciation and amortization | 34,202 | 34,453 | ||||||
Stock-based compensation | 5,555 | 5,372 | ||||||
Provision for losses on accounts receivable | (13 | ) | 242 | |||||
Amortization of debt discounts and issuance costs | 3,384 | 3,265 | ||||||
Deferred income taxes | 1,537 | 1,282 | ||||||
Gain on sale of assets and investments | (255 | ) | (315 | ) | ||||
Change in assets and liabilities, net of assets and liabilities acquired: | ||||||||
Increase in accounts receivable and contract costs and recognized income not yet billed | (43,751 | ) | (23,424 | ) | ||||
Decrease (increase) in inventories | 17,617 | (39,252 | ) | |||||
Decrease in prepaid and other assets | 2,220 | 754 | ||||||
Decrease in accounts payable, accrued liabilities and income taxes payable | (42,632 | ) | (40,244 | ) | ||||
Other changes, net | 2,037 | 2,223 | ||||||
Net cash used in operating activities | (5,408 | ) | (43,051 | ) | ||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
Acquisition of property, plant and equipment | (45,952 | ) | (39,713 | ) | ||||
Acquired businesses, net of cash acquired | (4,470 | ) | — | |||||
Proceeds from sale of assets | 868 | 177 | ||||||
Investment sales | 715 | 8,891 | ||||||
Net cash used in investing activities | (48,839 | ) | (30,645 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
Proceeds from issuance of common stock | — | 285 | ||||||
Dividends paid | (4,508 | ) | (3,911 | ) | ||||
Purchase of shares for treasury | (33,640 | ) | (37,577 | ) | ||||
Proceeds from long-term debt | 139,604 | 99,556 | ||||||
Payments of long-term debt | (46,323 | ) | (29,425 | ) | ||||
Change in short-term borrowings | (191 | ) | (572 | ) | ||||
Financing costs | (1,120 | ) | (590 | ) | ||||
Tax benefit from exercise/vesting of equity awards, net | 2,291 | 345 | ||||||
Other, net | 208 | 95 | ||||||
Net cash provided by financing activities | 56,321 | 28,206 | ||||||
CASH FLOWS FROM DISCONTINUED OPERATIONS: | ||||||||
Net cash used in operating activities | (578 | ) | (545 | ) | ||||
Net cash used in discontinued operations | (578 | ) | (545 | ) | ||||
Effect of exchange rate changes on cash and equivalents | 785 | (3,768 | ) | |||||
NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS | 2,281 | (49,803 | ) | |||||
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD | 52,001 | 92,405 | ||||||
CASH AND EQUIVALENTS AT END OF PERIOD | $ | 54,282 | $ | 42,602 | ||||
Griffon evaluates performance based on Earnings per share and Net income excluding discrete tax items, as applicable. Griffon believes this information is useful to investors. The following table provides a reconciliation of Net income to adjusted net income and earnings per share to Adjusted earnings per share:
GRIFFON CORPORATION AND SUBSIDIARIES RECONCILIATION OF NET INCOME TO ADJUSTED NET INCOME (in thousands, except per share data) (Unaudited) |
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For the Three Months Ended March 31, |
For the Six Months Ended March 31, |
||||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||||
Net income | $ | 6,095 | $ | 5,122 |
$ |
14,691 | $ | 12,593 | |||||||||
Adjusting items, net of tax: | |||||||||||||||||
Discrete tax provisions (benefits) | 43 | 145 | (356 | ) | 494 | ||||||||||||
Adjusted net income | $ | 6,138 | $ | 5,267 |
$ |
14,335 | $ | 13,087 | |||||||||
Diluted income per common share | $ | 0.14 | $ | 0.11 |
$ |
0.33 | $ | 0.26 | |||||||||
Adjusting items, net of tax: | |||||||||||||||||
Discrete tax provisions (benefits) | — | — | (0.01 | ) | 0.01 | ||||||||||||
Adjusted earnings per common share | $ | 0.14 | $ | 0.11 |
$ |
0.32 | $ | 0.27 | |||||||||
Weighted-average shares outstanding (in thousands) | 43,891 | 47,669 | 44,727 | 47,682 |
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: http://www.businesswire.com/news/home/20160504006641/en/
Source:
Company Contact:
Griffon Corporation
Brian
G. Harris, 212-957-5000
SVP & Chief Financial Officer
or
Investor
Relations Contact:
ICR Inc.
Michael Callahan,
203-682-8311
Senior Vice President