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Press Release

Griffon Corporation Announces Third Quarter Results

NEW YORK--(BUSINESS WIRE)--Jul. 30, 2020-- Griffon Corporation (“Griffon” or the “Company”) (NYSE:GFF) today reported results for the fiscal third quarter ended June 30, 2020.

Consolidated revenue for the third quarter of $632.1 million increased 10% compared to the prior year quarter revenue of $575.0 million.

Income from continuing operations for the third quarter totaled $21.8 million, or $0.50 per share, compared to $14.1 million, or $0.33 per share, in the prior year quarter. Current year third quarter results included a loss from debt extinguishment of $1.2 million ($1.0 million, net of tax, or $0.02 per share), restructuring charges of $1.6 million ($1.2 million, net of tax, or $0.03 per share), and discrete and certain other tax provisions, net, that affect comparability of approximately $1.8 million or $0.04 per share. Prior year quarter results included discrete and certain other tax benefits, net, that affect comparability of $0.7 million or $0.02 per share. Excluding these items, current income from continuing operations would have been $25.9 million, or $0.59 per share, compared to $13.5 million, or $0.31 per share, in the prior year quarter, a 90% increase.

Adjusted EBITDA for the third quarter was $69.5 million, increasing 31% from the prior year quarter of $53.1 million. Unallocated amounts (primarily corporate overhead) in the third quarter of 2020 and 2019, respectively, were $11.1 million and $12.0 million, respectively. Adjusted EBITDA excluding unallocated amounts totaled $80.5 million in the third quarter of 2020, increasing 24% from the prior year of $65.1 million. Adjusted EBITDA is defined as net income excluding 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).

Ronald J. Kramer, Chairman and Chief Executive Officer, commented, "Our strong results this quarter are a reflection of the operating excellence of our team in challenging times. The resilience of our businesses and the execution of our strategic actions has positioned us for continued growth in revenue, earnings and cash flow. Our team's dedication and extraordinary performance in supporting our customers has driven these exceptional results, while maintaining a safe and healthy work environment for our employees. We are poised to continue to build on our successes in the future."

Segment Operating Results

Consumer and Professional Products ("CPP")

CPP revenue in the third quarter of $328.9 million increased 20% compared to the prior year period, primarily due to increased volume of 19% driven by increased consumer demand for home improvement initiatives in North America and Australia resulting from COVID-19 stay at home orders, favorable price and mix of 1% and incremental revenue from the Apta acquisition of 2%, partially offset by an unfavorable impact of foreign exchange of 2%. Organic growth was 18%.

CPP Adjusted EBITDA in the third quarter was $37.1 million, increasing 55% from the prior year quarter primarily from the increased revenue noted above, partially offset by increased tariffs and COVID-19 related inefficiencies and direct costs. For the quarter ended June 30, 2020, EBITDA reflects an unfavorable foreign exchange impact of 2%. Adjusted EBITDA margin was 11.3% in the current quarter compared to 8.8% in the prior year quarter. Direct COVID-19 related expenses totaled approximately $2.2 million and $2.5 million for the quarter and year-to-date periods, respectively.

On November 29, 2019, AMES acquired Vatre Group Limited ("Apta"), a leading United Kingdom supplier of innovative garden pottery and associated products sold to leading UK and Ireland garden centers for approximately $10.5 million. This acquisition broadens AMES' product offerings in the market and increases its in-country operational footprint.

Strategic Initiative

In November 2019, Griffon announced the development of a next-generation business platform for CPP to enhance the growth, efficiency, and competitiveness of its U.S. operations.

This initiative includes three key development areas. First, multiple independent information systems will be unified into a single data and analytics platform which will serve the whole CPP U.S. enterprise. Second, certain CPP U.S. operations will be consolidated to optimize facilities footprint and talent. Third, strategic investments in automation and facilities expansion will be made to increase the efficiency of our manufacturing and fulfillment operations, and support e-commerce growth.

The roll-out of the new business platform will occur over approximately a three-year period, with completion expected by the end of calendar 2022. When fully implemented, these actions will result in an annual cash savings of $15 million to $20 million, and a $20 million to $25 million reduction in inventory, both based on operating levels at the beginning of the initiative.

The cost to implement this new business platform, over the three-year duration of the project, will include approximately $35 million of one-time charges and approximately $40 million in capital investments. The one-time charges are comprised of $16 million of cash charges, which includes $12 million of personnel-related costs such as training, severance, and duplicate personnel costs, as well as $4 million of facility and lease exit costs. The remaining $19 million of charges are non-cash and primarily relate to asset write-downs.

In addition to the growth, efficiency and competitive benefits, this initiative is expected to increase our operating margin and free cash flow.

In connection with this initiative, during the nine months ended June 30, 2020, CPP incurred pre-tax restructuring and other related exit costs approximating $11.2 million, comprised of cash charges of approximately $6.5 million and non-cash, asset-related charges of $4.7 million; the cash charges included $4.9 million for one-time termination benefits and other personnel-related costs and $1.6 million for facility exit costs. Capital expenditures related to the initiative were $3.7 million through the nine months ended June 30, 2020.

Home and Building Products ("HBP")

HBP revenue in the current quarter totaling $219.2 million decreased 1% from the prior year quarter, due to decreased volume driven by reduced residential sectional garage door orders in April of approximately 18% and a subsequent recovery in May and June.

HBP Adjusted EBITDA in the current quarter was $39.3 million, increasing 16% from the prior year quarter. EBITDA benefited from general operating efficiency improvements, partially offset by the decrease in revenue and COVID-19 related inefficiencies and direct costs. Adjusted EBITDA margin was 17.9% in the current quarter compared to 15.3% in the prior year quarter. Direct COVID-19 related expenses totaled approximately $1.7 million for the quarter and year-to-date periods.

Defense Electronics ("DE")

DE revenue in the current quarter totaled $84.0 million, increasing 5% from the prior year quarter, primarily due to increased deliveries and volume of radar and communications systems, partially offset by reduced volume of airborne surveillance systems.

DE Adjusted EBITDA in the current quarter was $4.1 million, decreasing 43% from the prior year quarter, driven by program mix and program inefficiencies on radar and communications systems. Adjusted EBITDA margin was 4.9% in the current quarter compared to 9.1% in the prior year quarter. Direct COVID-19 related expenses totaled approximately $0.6 million and $0.7 million for the quarter and year-to-date periods, respectively.

Contract backlog was $350 million at June 30, 2020, an $18.7 million increase from the second quarter, with 72% expected to be fulfilled in the next 12 months. During the year, DE was awarded several new contracts and received incremental funding on existing contracts approximating $193 million, which translates into a 0.9 book-to-bill ratio for the trailing twelve months.

Taxes

The Company reported pretax income for the quarters ended June 30, 2020 and 2019, respectively, and recognized tax provisions of 36.7% and 30.7%, respectively. Excluding all items that affect comparability, the effective tax rates for the quarters ended June 30, 2020 and 2019 were 30.8% and 34.0%, respectively. The current year-to-date effective tax rate was 38.7% and the rate excluding all items that affect comparability was 32.6%.

Balance Sheet and Capital Expenditures

At June 30, 2020, the Company had cash and equivalents of $72.0 million and total debt outstanding of $1.13 billion, resulting in a net debt position of $1.06 billion. Borrowing availability under the revolving credit facility was $274.2 million subject to certain loan covenants. Capital expenditures were $12.2 million for the quarter ended June 30, 2020.

During the second and third quarters, Griffon refinanced its $1 billion of senior notes and $400 million revolving credit facility, extending maturities to 2028 and 2025, respectively.

Share Repurchases

As of June 30, 2020, Griffon had $58 million remaining under its Board of Directors authorized repurchase program. There have been no purchases under these authorizations to date in fiscal 2020.

Conference Call Information

The Company will hold a conference call today, July 30, 2020, at 4:30 PM ET.

The call can be accessed by dialing 1-855-327-6837 (U.S. participants) or 1-631-891-4304 (International participants). Callers should ask to be connected to the Griffon Corporation teleconference or provide conference ID number 10010402. Participants are encouraged to dial-in at least 10 minutes before the scheduled start time.

A replay of the call will be available starting on Thursday, July 30, 2020 at 7:30 PM ET by dialing 1-844-512-2921 (U.S.) or 1-412-317-6671 (International), and entering the conference ID number: 10010402. The replay will be available through Thursday, August 13, 2020 at 11:59 PM ET.

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 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; Griffon's ability to achieve expected savings from cost control, restructuring, 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 defense budget cuts or other government actions; the ability of the federal government to fund and conduct its operations; increases in the cost or lack of availability of raw materials such as resin, wood and steel, components or purchased finished goods, including the impact from tariffs; changes in customer demand or loss of a material customer at one of Griffon's operating companies; 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 Griffon’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 impacts margins and operating efficiencies; short-term capacity constraints or prolonged excess capacity; unforeseen developments in contingencies, such as litigation, regulatory and environmental matters; 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 of Griffon’s operating companies; and possible terrorist threats and actions and their impact on the global economy; the impact of COVID-19 on the U.S. and the global economy, including business disruptions, reductions in employment and an increase in business and operating facility failures, specifically among our customers; Griffon's ability to service and refinance its debt; and the impact of recent and future legislative and regulatory changes, including, without limitation, the Tax Cuts and Jobs Act of 2017. 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. Griffon 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 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 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, and ClosetMaid.
  • HBP conducts its operations through Clopay. Founded in 1964, Clopay is the largest manufacturer and marketer of garage doors and rolling steel doors in North America. Residential and commercial sectional garage doors are sold through professional dealers and leading home center retail chains throughout North America under the brands Clopay, Ideal, and Holmes. 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 a reconciliation of Adjusted EBITDA to Income before taxes from continuing operations:

GRIFFON CORPORATION AND SUBSIDIARIES

OPERATING HIGHLIGHTS

(in thousands)

 

 

 

 

 

 

 

For the Three Months Ended
June 30,

 

For the Nine Months Ended
June 30,

REVENUE

 

2020

 

2019

 

2020

 

2019

Consumer and Professional Products

$

328,929

 

 

$

273,710

 

 

$

844,917

 

 

$

777,916

 

Home and Building Products

219,164

 

 

221,521

 

 

670,374

 

 

631,615

 

Defense Electronics

83,968

 

 

79,739

 

 

231,558

 

 

225,594

 

Total consolidated net sales

$

632,061

 

 

$

574,970

 

 

$

1,746,849

 

 

$

1,635,125

 

 

ADJUSTED EBITDA

 

 

 

 

 

 

 

Consumer and Professional Products

$

37,115

 

 

$

23,970

 

 

$

84,068

 

 

$

73,151

 

Home and Building Products

39,299

 

 

33,851

 

 

110,635

 

 

85,283

 

Defense Electronics

4,122

 

 

7,280

 

 

12,845

 

 

17,001

 

Total

80,536

 

 

65,101

 

 

207,548

 

 

175,435

 

Unallocated amounts, excluding depreciation*

(11,080

)

 

(12,033

)

 

(34,969

)

 

(34,505

)

Adjusted EBITDA

69,456

 

 

53,068

 

 

172,579

 

 

140,930

 

Net interest expense

(16,585

)

 

(17,087

)

 

(49,096

)

 

(50,723

)

Depreciation and amortization

(15,523

)

 

(15,595

)

 

(47,067

)

 

(46,172

)

Loss from debt extinguishment

(1,235

)

 

 

 

(7,925

)

 

 

Restructuring charges

(1,633

)

 

 

 

(11,171

)

 

 

Acquisition costs

 

 

 

 

(2,960

)

 

 

Income before taxes from continuing operations

$

34,480

 

 

$

20,386

 

 

$

54,360

 

 

$

44,035

 

* Primarily Corporate Overhead

 

For the Three Months Ended
June 30,

 

For the Nine Months Ended
June 30,

DEPRECIATION and AMORTIZATION

2020

 

2019

 

2020

 

2019

Segment:

 

 

 

 

 

 

 

Consumer and Professional Products

$

8,197

 

 

$

8,158

 

 

$

24,650

 

 

$

24,148

 

Home and Building Products

4,507

 

 

4,626

 

 

13,975

 

 

13,683

 

Defense Electronics

2,666

 

 

2,669

 

 

7,986

 

 

7,926

 

Total segment depreciation and amortization

15,370

 

 

15,453

 

 

46,611

 

 

45,757

 

Corporate

153

 

 

142

 

 

456

 

 

415

 

Total consolidated depreciation and amortization

$

15,523

 

 

$

15,595

 

 

$

47,067

 

 

$

46,172

 

GRIFFON CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

AND COMPREHENSIVE INCOME

(in thousands, except per share data)

 

 

 

 

 

 

 

Three Months Ended June 30,

 

Nine Months Ended June 30,

 

 

2020

 

2019

 

2020

 

2019

Revenue

$

632,061

 

 

$

574,970

 

 

$

1,746,849

 

 

$

1,635,125

 

Cost of goods and services

467,058

 

 

420,487

 

 

1,279,893

 

 

1,200,092

 

Gross profit

165,003

 

 

154,483

 

 

466,956

 

 

435,033

 

Selling, general and administrative expenses

113,509

 

 

117,989

 

 

357,774

 

 

343,526

 

Income from operations

51,494

 

 

36,494

 

 

109,182

 

 

91,507

 

Other income (expense)

 

 

 

 

 

 

 

Interest expense

(16,725

)

 

(17,288

)

 

(49,807

)

 

(51,334

)

Interest income

140

 

 

201

 

 

711

 

 

611

 

Loss from debt extinguishment, net

(1,235

)

 

 

 

(7,925

)

 

 

Other, net

806

 

 

979

 

 

2,199

 

 

3,251

 

Total other expense, net

(17,014

)

 

(16,108

)

 

(54,822

)

 

(47,472

)

Income before taxes from continuing operations

34,480

 

 

20,386

 

 

54,360

 

 

44,035

 

Provision for income taxes

12,649

 

 

6,258

 

 

21,022

 

 

14,664

 

Income from continuing operations

$

21,831

 

 

$

14,128

 

 

$

33,338

 

 

$

29,371

 

Discontinued operations:

 

 

 

 

 

 

 

Loss from operations of discontinued operations

 

 

 

 

 

 

(11,000

)

Provision (benefit) for income taxes

 

 

533

 

 

 

 

(2,821

)

Loss from discontinued operations

 

 

(533

)

 

 

 

(8,179

)

Net income

$

21,831

 

 

$

13,595

 

 

$

33,338

 

 

$

21,192

 

 

 

 

 

 

 

 

 

Income from continuing operations

$

0.52

 

 

$

0.34

 

 

$

0.80

 

 

$

0.72

 

Loss from discontinued operations

 

 

(0.01

)

 

 

 

(0.20

)

Basic earnings per common share

$

0.52

 

 

$

0.33

 

 

$

0.80

 

 

$

0.52

 

Basic weighted-average shares outstanding

41,712

 

 

40,967

 

 

41,483

 

 

40,888

 

Income from continuing operations

$

0.50

 

 

$

0.33

 

 

$

0.76

 

 

$

0.69

 

Income (loss) from discontinued operations

 

 

(0.01

)

 

 

 

(0.19

)

Diluted earnings per common share

$

0.50

 

 

$

0.31

 

 

$

0.76

 

 

$

0.50

 

Diluted weighted-average shares outstanding

43,774

 

 

43,164

 

 

43,818

 

 

42,649

 

Dividends paid per common share

$

0.0750

 

 

$

0.0725

 

 

$

0.2250

 

 

$

0.2175

 

 

 

 

 

 

 

 

 

Net income

$

21,831

 

 

$

13,595

 

 

$

33,338

 

 

$

21,192

 

Other comprehensive income (loss), net of taxes:

 

 

 

 

 

 

 

Foreign currency translation adjustments

9,508

 

 

(1,092

)

 

(493

)

 

(3,943

)

Pension and other post retirement plans

1,139

 

 

184

 

 

2,480

 

 

552

 

Change in cash flow hedges

(1,945

)

 

(127

)

 

(1,278

)

 

(214

)

Total other comprehensive income (loss), net of taxes

8,702

 

 

(1,035

)

 

709

 

 

(3,605

)

Comprehensive income, net

$

30,533

$

12,560

 

$

34,047

$

17,587

 

GRIFFON CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

 

 

 

 

 

 

 

(Unaudited)

 

 

 

 

June 30,
2020

 

September 30,
2019

CURRENT ASSETS

 

 

 

Cash and equivalents

$

71,999

 

 

$

72,377

 

Accounts receivable, net of allowances of $13,901 and $7,881

359,464

 

 

264,450

 

Contract costs and recognized income not yet billed, net of progress payments of $28,981 and $13,861

92,143

 

 

105,111

 

Inventories

411,028

 

 

442,121

 

Prepaid and other current assets

51,365

 

 

40,799

 

Assets of discontinued operations

1,951

 

 

321

 

Total Current Assets

987,950

 

 

925,179

 

PROPERTY, PLANT AND EQUIPMENT, net

335,318

 

 

337,326

 

OPERATING LEASE RIGHT-OF-USE ASSETS

154,955

 

 

 

GOODWILL

439,667

 

 

437,067

 

INTANGIBLE ASSETS, net

354,384

 

 

356,639

 

OTHER ASSETS

31,860

 

 

15,840

 

ASSETS OF DISCONTINUED OPERATIONS

6,086

 

 

2,888

 

Total Assets

$

2,310,220

 

 

$

2,074,939

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

Notes payable and current portion of long-term debt

$

9,235

 

 

$

10,525

 

Accounts payable

218,024

 

 

250,576

 

Accrued liabilities

176,164

 

 

124,665

 

Current portion of operating lease liabilities

29,018

 

 

 

Liabilities of discontinued operations

3,730

 

 

4,333

 

Total Current Liabilities

436,171

 

 

390,099

 

LONG-TERM DEBT, net

1,123,365

 

 

1,093,749

 

LONG-TERM OPERATING LEASE LIABILITIES

131,650

 

 

 

OTHER LIABILITIES

104,298

 

 

109,997

 

LIABILITIES OF DISCONTINUED OPERATIONS

6,281

 

 

3,331

 

Total Liabilities

1,801,765

 

 

1,597,176

 

COMMITMENTS AND CONTINGENCIES

 

 

 

SHAREHOLDERS’ EQUITY

 

 

 

Total Shareholders’ Equity

508,455

 

 

477,763

 

Total Liabilities and Shareholders’ Equity

$

2,310,220

 

 

$

2,074,939

 

GRIFFON CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

 

 

 

 

 

Nine Months Ended June 30,

 

 

2020

 

2019

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

Net income

$

33,338

 

 

$

21,192

 

Net loss from discontinued operations

 

 

8,179

 

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

Depreciation and amortization

47,067

 

 

46,172

 

Stock-based compensation

12,809

 

 

11,547

 

Asset impairment charges - restructuring

4,388

 

 

 

Provision for losses on accounts receivable

512

 

 

306

 

Amortization of debt discounts and issuance costs

2,871

 

 

4,133

 

Loss from debt extinguishment, net

7,925

 

 

 

Deferred income taxes

448

 

 

(353

)

Gain on sale of assets and investments

(261

)

 

(111

)

Non-cash lease expense

28,648

 

 

 

Change in assets and liabilities, net of assets and liabilities acquired:

 

 

 

Increase in accounts receivable and contract costs and recognized income not yet billed

(81,718

)

 

(33,223

)

(Increase) decrease in inventories

34,822

 

 

(18,009

)

Increase in prepaid and other assets

(17,393

)

 

(3,921

)

Decrease in accounts payable, accrued liabilities, income taxes payable and operating lease liabilities

(18,112

)

 

(22,688

)

Other changes, net

600

 

 

1,758

 

Net cash provided by operating activities

55,944

 

 

14,982

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

Acquisition of property, plant and equipment

(34,751

)

 

(27,794

)

Acquired businesses, net of cash acquired

(10,531

)

 

(9,219

)

Payments related to sale of business

 

 

(9,500

)

Insurance payments

 

 

(10,604

)

Proceeds from sale of assets

339

 

 

104

 

Investment purchase

(130

)

 

(149

)

Net cash used in investing activities

(45,073

)

 

(57,162

)

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

Dividends paid

(10,639

)

 

(10,262

)

Purchase of shares for treasury

(7,479

)

 

(1,478

)

Proceeds from long-term debt

1,230,618

 

 

156,800

 

Payments of long-term debt

(1,205,231

)

 

(108,260

)

Financing costs

(16,543

)

 

(1,012

)

Contingent consideration for acquired businesses

 

 

(1,686

)

Other, net

(31

)

 

(197

)

Net cash provided by (used in) financing activities

(9,305

)

 

33,905

 

GRIFFON CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

 

 

 

Nine Months Ended June 30,

 

 

2020

 

2019

CASH FLOWS FROM DISCONTINUED OPERATIONS:

 

 

 

Net cash used in operating activities

(2,899

)

 

(3,874

)

Net cash provided by investing activities

418

 

 

 

Net cash used in financing activities

 

 

 

 

 

 

 

Net cash used in discontinued operations

(2,481

)

 

(3,874

)

Effect of exchange rate changes on cash and equivalents

537

 

 

503

 

NET DECREASE IN CASH AND EQUIVALENTS

(378

)

 

(11,646

)

CASH AND EQUIVALENTS AT BEGINNING OF PERIOD

72,377

 

 

69,758

 

CASH AND EQUIVALENTS AT END OF PERIOD

$

71,999

 

 

$

58,112

 

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 Income from continuing operations to Adjusted income from continuing operations and Earnings per common share from continuing operations to Adjusted earnings per common share from continuing operations:

GRIFFON CORPORATION AND SUBSIDIARIES

RECONCILIATION OF INCOME FROM CONTINUING OPERATIONS

TO ADJUSTED INCOME FROM CONTINUING OPERATIONS

(in thousands, except per share data)

 

 

 

 

 

 

 

For the Three Months Ended
June 30,

 

For the Nine Months Ended
June 30,

 

 

2020

 

2019

 

2020

 

2019

Income from continuing operations

$

21,831

 

 

$

14,128

 

 

$

33,338

 

 

$

29,371

 

 

 

 

 

 

 

 

 

Adjusting items:

 

 

 

 

 

 

 

Loss from debt extinguishment

1,235

 

 

 

 

7,925

 

 

 

Restructuring charges

1,633

 

 

 

 

11,171

 

 

 

Acquisition costs

 

 

 

 

2,960

 

 

 

Tax impact of above items

(675

)

 

 

 

(5,144

)

 

 

Discrete and certain other tax provisions (benefits), net

1,828

 

 

(669

)

 

1,248

 

 

(299

)

 

 

 

 

 

 

 

 

Adjusted income from continuing operations

$

25,852

 

 

$

13,459

 

 

$

51,498

 

 

$

29,072

 

 

 

 

 

 

 

 

 

Diluted earnings per common share

$

0.50

 

 

$

0.33

 

 

$

0.76

 

 

$

0.69

 

 

 

 

 

 

 

 

 

Adjusting items, net of tax:

 

 

 

 

 

 

 

Loss from debt extinguishment

0.02

 

 

 

 

0.14

 

 

 

Restructuring charges

0.03

 

 

 

 

0.19

 

 

 

Acquisition costs

 

 

 

 

0.05

 

 

 

Discrete and certain other tax provisions (benefits), net

0.04

 

 

(0.02

)

 

0.03

 

 

(0.01

)

 

 

 

 

 

 

 

 

Adjusted earnings per common share

$

0.59

 

 

$

0.31

 

 

$

1.18

 

 

$

0.68

 

 

 

 

 

 

 

 

 

Weighted-average shares outstanding (in thousands)

43,774

 

 

43,164

 

 

43,818

 

 

42,649

 

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.

Company Contact:
Brian G. Harris
SVP & Chief Financial Officer
Griffon Corporation
(212) 957-5000

Investor Relations Contact:
Michael Callahan
Managing Director
ICR Inc.
(203) 682-8311

Source: Griffon Corporation

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