UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 3, 2006
GRIFFON CORPORATION
(Exact Name of Registrant as Specified in Charter)
Delaware 1-6620 11-1893410
(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification Number)
100 Jericho Quadrangle
Jericho, New York 11753
(Address of Principal Executive Offices) (Zip Code)
(516) 938-5544
(Registrant's telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 2.02. Results of Operations and Financial Condition.
On August 3, 2006, Griffon Corporation (the "Registrant") issued a press
release announcing the Registrant's financial results for the third fiscal
quarter ended June 30, 2006. A copy of the Registrant's press release is
attached hereto as Exhibit 99.1.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
99.1. Press Release, dated August 3, 2006
The information filed as an exhibit to this Form 8-K is being furnished in
accordance with Item 2.02 and shall not be deemed to be "filed" for the purposes
of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), or otherwise subject to the liabilities of such section, nor shall such
information be deemed incorporated by reference in any filing under the
Securities Act of 1933, as amended, or the Exchange Act, except as shall be
expressly set forth by specific reference in such a filing.
2
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
GRIFFON CORPORATION
By: /s/Eric P. Edelstein
---------------------------------------
Eric P. Edelstein
Executive Vice President and
Chief Financial Officer
Date: August 3, 2006
3
Exhibit Index
99.1. Press release, dated August 3, 2006
GRIFFON CORPORATION ANNOUNCES OPERATING RESULTS
-----------------------------------------------
FOR THE THIRD QUARTER OF FISCAL 2006
------------------------------------
Jericho, New York, August 3, 2006 - Griffon Corporation (NYSE:GFF) today
reported operating results for the third quarter of fiscal 2006. Net sales for
the quarter ended June 30, 2006 increased to $429,071,000 up from $350,904,000
for the third quarter of fiscal 2005. Income before income taxes was $26,943,000
compared to $19,931,000 last year. Net income was $19,363,000 in the current
quarter compared to $12,854,000 last year. Diluted earnings per share for the
quarter was $.61 compared to $.41 in last year's third quarter. The improved
results for the quarter were primarily attributable to the electronic
information and communication systems segment, Telephonics.
Telephonics reflected significantly higher sales and profits principally
due to the contract with Syracuse Research Corporation. Telephonics has now
received contracts in excess of $195,000,000. Approximately 70% of these awards
are expected to be completed by September 30, 2006 and the fulfillment of the
total award will be complete by the second quarter of fiscal 2007. Specialty
plastic films' results were impacted by changes in the cost of resin; costs
associated with bringing on new business; and the cost of relocating our
business to our new facility in Brazil. Garage door segment results were
generally consistent with the prior year. For the quarter, the segment
experienced a more
favorable product mix, somewhat offset by higher distribution and freight costs
and advertising and marketing costs.
Net sales for the nine months ended June 30, 2006 were $1,153,746,000
compared to $1,013,551,000 for the first nine months of fiscal 2005. Income
before income taxes for the nine months was $49,204,000 compared to $43,587,000
last year. Net income was $33,347,000 compared to $26,190,000 for the first nine
months of 2005. Diluted earnings per share for the nine months was $1.06
compared to $.84 last year.
Cash flow from operations was $10.8 million for the quarter, of which $9
million was used to fund capital expenditures. Also, during the quarter $1.6
million was used to acquire approximately 63,000 shares of the company's common
stock under its buyback program. Additional purchases will be made from time to
time, depending on market conditions, at prices deemed appropriate by management
or under a Rule 10b5-1 trading plan.
Griffon Corporation -
o is a leading manufacturer and marketer of residential, commercial and
industrial garage doors sold to professional installing dealers and
major home center retail chains;
o installs and services specialty building products and systems,
primarily garage doors, openers, fireplaces and cabinets, for new
construction markets through a substantial network of operations
located throughout the country;
o is an international leader in the development and production of
embossed and laminated specialty plastic films used in the baby
diaper, feminine napkin, adult incontinent, surgical and patient care
markets; and
o develops and manufactures information and communication systems for
government and commercial markets worldwide.
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of
1995: All statements other than statements of historical fact included in this
release, including without limitation statements regarding the company's
financial position, business strategy and the plans and objectives of the
company's management for future operations, are forward-looking statements. When
used in this release, words such as "anticipate", "believe", "estimate",
"expect", "intend", and similar expressions, as they relate to the company or
its management, identify forward-looking statements. Such forward-looking
statements are based on the beliefs of the company's management, as well as
assumptions made by and information currently available to the company's
management. Actual results could differ materially from those contemplated by
the forward-looking statements as a result of certain factors, including but not
limited to, business and economic conditions, results of integrating acquired
businesses into existing operations, competitive factors and pricing pressures
for resin and steel and capacity and supply constraints. Such statements reflect
the views of the company with respect to future events and are subject to these
and other risks, uncertainties and assumptions relating to the operations,
results of operations, growth strategy and liquidity of the company. Readers are
cautioned not to place undue reliance on these forward-looking statements. The
company does not undertake to release publicly any revisions to these
forward-looking statements to reflect future events or circumstances or to
reflect the occurrence of unanticipated events.
GRIFFON CORPORATION AND SUBSIDIARIES
------------------------------------
OPERATING HIGHLIGHTS
(Unaudited)
(IN THOUSANDS)
PRELIMINARY
For the Three Months Ended For the Nine Months Ended
June 30, June 30,
--------------------------- --------------------------
2006 2005 2006 2005
---------- --------- ---------- ----------
Net sales:
Garage Doors $ 139,297 $ 137,440 $ 403,711 $ 383,321
Installation Services 86,454 77,090 250,229 215,887
Specialty Plastic Films 97,246 90,607 279,288 276,472
Electronic Information and Communication Systems 111,404 51,004 235,702 153,759
Intersegment eliminations (5,330) (5,237) (15,184) (15,888)
--------- --------- ---------- ----------
$ 429,071 $ 350,904 $1,153,746 $1,013,551
========= ========= ========== ==========
Operating income:
Garage Doors $ 10,324 $ 10,686 $ 27,531 $ 22,084
Installation Services 2,203 2,583 6,217 5,159
Specialty Plastic Films 8,137 6,040 15,411 20,858
Electronic Information and Communication Systems 12,670 2,830 20,388 8,751
--------- --------- ---------- ----------
Segment operating income 33,334 22,139 69,547 56,852
Unallocated amounts (4,242) (4,721) (13,959) (12,768)
Interest and other, net (2,149) 2,513 (6,384) (497)
--------- --------- ---------- ----------
Income before income taxes $ 26,943 $ 19,931 $ 49,204 $ 43,587
========= ========= ========== ==========
GRIFFON CORPORATION AND SUBSIDIARIES
------------------------------------
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS EXCEPT FOR PER SHARE AMOUNTS)
PRELIMINARY
FOR THE THREE MONTHS ENDED
JUNE 30,
----------------------------------
2006 2005
----------- -----------
Net sales $ 429,071 $ 350,904
Cost of sales 320,793 259,312
----------- -----------
Gross profit 108,278 91,592
Selling, general and administrative expenses 80,341 73,586
----------- -----------
Income from operations 27,937 18,006
----------- -----------
Other income (expense):
Interest expense (2,572) (1,603)
Interest income 423 372
Other, net 1,155 3,156(1)
----------- -----------
(994) 1,925
----------- -----------
Income before income taxes 26,943 19,931
----------- -----------
Provision for income taxes (2):
Federal 6,698 2,367
State and foreign 882 3,288
----------- -----------
7,580 5,655
----------- -----------
Income before minority interest 19,363 14,276
Minority interest - (1,422)
----------- -----------
Net income $ 19,363 $ 12,854
=========== ============
Basic earnings per share of common stock $ .65 $ .43
=========== ============
Diluted earnings per share of common stock $ .61 $ .41
=========== ============
Weighted average number of shares outstanding:
Basic 29,896,000 30,241,000
=========== ============
Diluted 31,718,000 31,410,000
=========== ============
(1) Includes gain of $3.7 million on sale of land and building.
(2) Includes a reduced provision as a result of
the resolution of various income tax matters.
GRIFFON CORPORATION AND SUBSIDIARIES
------------------------------------
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS EXCEPT FOR PER SHARE AMOUNTS)
PRELIMINARY
FOR THE NINE MONTHS ENDED
JUNE 30,
----------------------------
2006 2005
----------- -----------
Net sales $ 1,153,746 $ 1,013,551
Cost of sales 866,046 756,347
----------- -----------
Gross profit 287,700 257,204
Selling, general and administrative expenses 234,275 213,761
----------- -----------
Income from operations 53,425 43,443
----------- -----------
Other income (expense):
Interest expense (7,715) (5,768)
Interest income 1,331 1,527
Other, net 2,163 4,385(1)
----------- -----------
(4,221) 144
----------- -----------
Income before income taxes 49,204 43,587
----------- -----------
Provision for income taxes (2):
Federal 11,127 5,384
State and foreign 4,730 7,598
----------- -----------
15,857 12,982
----------- -----------
Income before minority interest 33,347 30,605
Minority interest - (4,415)
----------- -----------
Net income $ 33,347 $ 26,190
=========== ===========
Basic earnings per share of common stock $ 1.11 $ .88
=========== ===========
Diluted earnings per share of common stock $ 1.06 $ .84
=========== ===========
Weighted average number of shares outstanding:
Basic 29,992,000 29,625,000
=========== ===========
Diluted 31,441,000 31,251,000
=========== ===========
(1) Includes gain of $3.7 million on sale of land and building.
(2) Includes a reduced provision as a result of
the resolution of various income tax matters.
GRIFFON CORPORATION AND SUBSIDIARIES
------------------------------------
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
PRELIMINARY JUNE 30, SEPTEMBER 30,
2006 2005
---------- -------------
ASSETS
- ------
Current Assets:
Cash and cash equivalents $ 32,101 $ 60,663
Accounts receivable, net 204,249 189,904
Contract costs and recognized income not yet billed 54,503 43,065
Inventories 174,560 148,350
Prepaid expenses and other current assets 45,609 41,227
---------- ------------
Total current assets 511,022 483,209
Property, plant and equipment, at cost less
depreciation and amortization 221,805 216,900
Goodwill 99,950 96,098
Intangible and other assets 58,059 55,220
---------- ------------
$ 890,836 $ 851,427
========== ============
LIABILITIES AND SHAREHOLDERS' EQUITY
- ------------------------------------
Current Liabilities:
Notes payable and current portion of long-term debt $ 8,324 $ 16,625
Accounts payable 111,695 91,970
Accrued liabilities 76,616 78,849
Income taxes 19,534 22,599
---------- ------------
Total current liabilities 216,169 210,043
Long-term debt:
Convertible subordinated notes 130,000 130,000
Other 69,441 66,540
Other liabilities and deferred credits 82,579 82,890
Shareholders' equity 392,647 361,954
---------- ------------
$ 890,836 $ 851,427
========== ============
GRIFFON CORPORATION AND SUBSIDIARIES
------------------------------------
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
PRELIMINARY
For the Nine Months Ended
June 30,
-------------------------
2006 2005
-------- --------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 33,347 $ 26,190
-------- --------
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization 25,778 23,789
Gain on sale of land and building - (3,744)
Minority interest - 4,415
Provision for losses on accounts receivable 1,435 804
Change in assets and liabilities:
Increase in accounts receivable and contract
costs and recognized income not yet billed (25,981) (1,984)
Increase in inventories (24,771) (1,545)
(Increase) decrease in prepaid expenses and other assets (19) 482
Increase (decrease) in accounts payable, accrued liabilities
and income taxes 8,394 (7,639)
Other changes, net 1,122 5,361
-------- --------
Total adjustments (14,042) 19,939
-------- --------
Net cash provided by operating activities 19,305 46,129
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property, plant and equipment (22,408) (31,994)
Proceeds from sale of land and building - 6,931
Acquisition of minority interest in subsidiary (1,304) (3,883)
Acquired businesses - (9,577)
(Increase) decrease in equipment lease deposits (5,353) 3,293
-------- --------
Net cash used in investing activities (29,065) (35,230)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Purchase of shares for treasury (17,218) (14,552)
Proceeds from borrowings under long-term debt arrangements 63,000 7,778
Payments of long-term debt (68,455) (20,853)
Increase (decrease) in short-term borrowings (446) 276
Distributions to minority interests (354) (1,362)
Exercise of stock options 2,060 18,928
Tax benefit from exercise of stock options 2,386 -
Other, net (363) -
-------- --------
Net cash used in financing activities (19,390) (9,785)
-------- --------
Effect of exchange rate changes on cash and cash equivalents 588 (680)
-------- --------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (28,562) 434
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 60,663 88,047
-------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 32,101 $ 88,481
======== ========