NEW YORK--(BUSINESS WIRE)--Aug. 2, 2023--
Griffon Corporation (“Griffon” or the “Company”) (NYSE:GFF) announced today that it amended its credit agreement (the “Amended Credit Agreement”) to increase the size of its revolving credit facility (the “Revolver Facility”) from $400 million to $500 million, and extend the maturity of the Revolver Facility from March 22, 2025 to August 1, 2028. The Amended Credit Agreement continues to provide for a Term Loan B facility, which matures on January 24, 2029.
Commenting on the amendment, Ronald J. Kramer, Chairman and Chief Executive Officer, said “The closing of our amended revolving credit facility provides us with additional financial and operating flexibility that will support our working capital requirements and position us to continue to grow our Company and further enhance shareholder value.”
Bank of America, N.A. acts as administrative agent under the Amended Credit Agreement. The Revolver Facility provides for revolver borrowings in an aggregate principal amount of up to $500 million and contains a $125 million letter of credit sub-facility (increased from $100 million), and a $200 million foreign currency sub-facility. The Amended Credit Agreement also has a customary accordion feature that permits Griffon to request an increase in the Revolving Facility and/or one or more additional term loan commitments, up to an aggregate principal amount equal to the greater of $500 million (increased from $375 million) and an amount such that, immediately after giving effect to the incurrence of the relevant incremental facilities, Griffon’s secured leverage ratio does not exceed 3.50 to 1.00. Griffon may elect to pay interest based on either Term SOFR (subject to a 0.50% floor with respect to the Term Loan B facility and 0.00% with respect to the Revolver Facility) or an alternate base rate, plus an applicable margin that depends on Griffon’s leverage ratio. Initial pricing for the Revolver Facility is Term SOFR plus 2.00% or alternate base rate plus 1.00%. The Revolver Facility is guaranteed by Griffon’s material domestic subsidiaries and is secured by substantially all the assets of Griffon and the guarantors. The Revolver Facility also contains customary financial and other affirmative covenants, negative covenants and events of default. If the Company’s 5.75% senior notes are not refinanced prior to December 1, 2027, the Revolver Facility will mature on that date.
“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, the impact of the Hunter Fan transaction, the 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; Griffon’s ability to achieve expected savings and improved operational results from cost control, restructuring, integration and disposal initiatives (including, in particular, the expanded CPP outsourcing strategy announced in May 2023); 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; increases in the cost or lack of availability of raw materials such as resin, wood and steel, components or purchased finished goods, including any potential impact on costs or availability resulting 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 inflation, 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; 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; possible terrorist threats and actions and their impact on the global economy; effects of possible IT system failures, data breaches or cyber-attacks; the impact of COVID-19, or some other future pandemic, 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 and suppliers; Griffon’s ability to service and refinance its debt; and the impact of recent and future legislative and regulatory changes, including, without limitation, changes in tax laws. 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 conducts its operations through two reportable segments:
Home and Building Products ("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 Cornell and Cookson brands.
Consumer and Professional Products (“CPP”) is a leading North American manufacturer and a global provider of branded consumer and professional tools; residential, industrial and commercial fans; home storage and organization products; and products that enhance indoor and outdoor lifestyles. CPP sells products globally through a portfolio of leading brands including AMES, since 1774, Hunter, since 1886, True Temper, and ClosetMaid.
For more information on Griffon and its operating subsidiaries, please see the Company’s website at www.griffon.com.
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Brian G. Harris
SVP & Chief Financial Officer
Source: Griffon Corporation