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, 2005
GRIFFON CORPORATION
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(Exact name of registrant as specified in charter)
Delaware 1-6620 11-1893410
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(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
100 Jericho Quadrangle, Jericho, New York 11753
- ----------------------------------------- -------
(Address of Principal Executive Offices) (Zip Code)
(516) 938-5544
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(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, 2005, Griffon Corporation (the "Registrant") issued a press
release announcing the Registrant's financial results for the fiscal quarter
ended June 30, 2005. A copy of the Registrant's press release is attached hereto
as Exhibit 99.1.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
(c) EXHIBITS
99.1 Press Release dated August 3, 2005
The information filed as Exhibit 99.1 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 Edelstein
--------------------------------
Eric Edelstein
Executive Vice President and
Chief Financial Officer
Date: August 3, 2005
3
EXHIBIT INDEX
99.1 Press release dated August 3, 2005.
GRIFFON CORPORATION ANNOUNCES
-----------------------------
OPERATING RESULTS FOR THE THIRD QUARTER OF FISCAL 2005
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Jericho, New York, August 3, 2005 - Griffon Corporation (NYSE:GFF) today
reported operating results for the third quarter of fiscal 2005, ended June 30,
2005. Net sales for the quarter were $350,904,000 compared to $367,948,000 for
the third quarter of fiscal 2004. Income before income taxes was $19,931,000
compared to $24,760,000 last year. Net income was $12,854,000 in the current
quarter compared to $13,157,000 in the third quarter of 2004. Diluted earnings
per share for the quarter was $.41 compared to $.42 in last year's third
quarter.
Consolidated operating results in the third quarter of fiscal 2005
reflected significant improvement over the first half of the year principally as
a result of higher selling prices and moderating raw material costs in both the
garage doors and specialty plastic films segments. In garage doors, the effects
of selling price increases and favorable product mix drove higher net sales and
operating income. Specialty plastic films continued to experience reduced unit
sales volume from its major customer. These sales reductions were partly offset
by the effects of higher selling prices to pass through resin cost increases.
Third quarter operating performance of the installation services segment also
improved over the first half due to strengthening construction environments in
several of its markets and improved product mix. However, installation services'
sales volume and profitability lagged when compared to last year due primarily
to increased competition and higher costs of products with significant steel
content (garage doors and fireplaces). Operating results of the electronic
information and communication systems segment reflected a strong performance and
improved demand in its
core markets. These trends are continuing and are expected to result in a solid
fourth quarter for this segment. However, this segment's current year operating
results do not compare favorably to the prior year due to significant shipments
in the third quarter of 2004 under a $35 million contract for ground
surveillance radar providing perimeter protection of U.S. Air Force bases.
Net sales for the nine months ended June 30, 2005 were $1,013,551,000
compared to $1,024,086,000 for the first nine months of fiscal 2004. Income
before income taxes for the nine months was $43,587,000 compared to $69,766,000
last year. Net income was $26,190,000 compared to $34,934,000 for the first nine
months of 2004. Diluted earnings per share for the nine months was $.84 compared
to $1.10 last year.
Cash flow from operations during the quarter was $12,000,000 which,
together with existing cash, was used to fund capital expenditures of
$9,000,000, purchases of shares for treasury of $7,000,000 and long-term debt
reductions of $12,000,000.
A conference call discussing third quarter results is scheduled for 4:00
p.m. EDT on August 3, 2005 and can be accessed by dialing (800) 322-0079.
Callers should ask to be connected to Griffon Corporation's third quarter
earnings teleconference. A replay of the call will be available one hour
following the call and can be accessed by dialing (877) 519-4471, conference
code: 6300959. The replay will be available until 5:00 p.m. EDT on August 17,
2005. In conjunction with this conference call, the Company has also posted on
its website at www.griffoncorp.com certain financial information regarding its
third quarter results which will be archived and available at the website for
one year.
Griffon Corporation -
- is a leading manufacturer and marketer of residential, commercial
and industrial garage doors sold to professional installing
dealers and major home center retail chains;
- 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;
- 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
- 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, 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
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SEGMENT OPERATING HIGHLIGHTS
----------------------------
(Unaudited, in thousands)
PRELIMINARY
For the Three Months Ended For the Nine Months Ended
June 30, June 30,
-------------------------- -------------------------
2005 2004 2005 2004
---- ---- ---- ----
Net sales:
Garage Doors $ 137,440 $120,525 $ 383,321 $ 338,478
Installation Services 77,090 79,900 215,887 228,937
Specialty Plastic Films 90,607 100,065 276,472 310,679
Electronic Information and Communication Systems 51,004 73,302 153,759 162,201
Intersegment eliminations (5,237) (5,844) (15,888) (16,209)
--------- -------- ---------- ----------
$ 350,904 $367,948 $1,013,551 $1,024,086
========= ======== ========== ==========
Operating income:
Garage Doors $ 10,686 $ 9,638 $ 22,084 $ 26,862
Installation Services 2,583 3,495 5,159 8,193
Specialty Plastic Films 6,040 10,780 20,858 38,862
Electronic Information and Communication Systems 2,830 6,237 8,751 11,936
--------- -------- ---------- ----------
Segment operating income 22,139 30,150 56,852 85,853
Unallocated amounts (4,721) (3,605) (12,768) (10,693)
Interest and other, net (1) 2,513 (1,785) (497) (5,394)
--------- -------- ---------- ----------
Income before income taxes and minority interest $ 19,931 $ 24,760 $ 43,587 $ 69,766
========= ======== ========== ==========
(1) Includes gain in 2005 of $3.7 million on sale of land and building.
GRIFFON CORPORATION AND SUBSIDIARIES
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CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(IN THOUSANDS EXCEPT FOR PER SHARE AMOUNTS)
PRELIMINARY
FOR THE THREE MONTHS ENDED
JUNE 30,
--------------------------------
2005 2004
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Net Sales $ 350,904 $ 367,948
Cost of sales 259,312 268,169
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Gross profit 91,592 99,779
Selling, general and administrative expenses 73,586 72,980
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Income from operations 18,006 26,799
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Other income (expense):
Interest expense (1,603) (2,035)
Interest income 372 250
Other, net 3,156 (1) (254)
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1,925 (2,039)
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Income before income taxes 19,931 24,760
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Provision for income taxes:
Federal 2,367 4,339
State and foreign 3,288 4,823
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5,655 (2) 9,162
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Income before minority interest 14,276 15,598
Minority interest (1,422) (2,441)
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Net income $ 12,854 $ 13,157
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Basic earnings per share of common stock $ .43 $ .44
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Diluted earnings per share of common stock $ .41 $ .42
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Weighted average number of shares outstanding:
Basic 30,241,000 29,789,000
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Diluted 31,410,000 31,611,000
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(1) Includes gain of $3.7 million on sale of land and building.
(2) Includes a reduced provision as a result of a lower projected annual
effective tax rate and the resolution of other income tax matters.
GRIFFON CORPORATION AND SUBSIDIARIES
------------------------------------
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(IN THOUSANDS EXCEPT FOR PER SHARE AMOUNTS)
PRELIMINARY
FOR THE NINE MONTHS ENDED
JUNE 30,
--------------------------------
2005 2004
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Net sales $ 1,013,551 $ 1,024,086
Cost of sales 756,347 734,658
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Gross profit 257,204 289,428
Selling, general and administrative expenses 213,761 214,629
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Income from operations 43,443 74,799
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Other income (expense):
Interest expense (5,768) (6,125)
Interest income 1,527 731
Other, net 4,385 (1) 361
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144 (5,033)
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43,587 69,766
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Provision for income taxes:
Federal 5,384 8,906
State and foreign 7,598 16,908
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12,982 (2) 25,814
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Income before minority interest 30,605 43,952
Minority interest (4,415) (9,018)
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Net income $ 26,190 $ 34,934
============ ===========
Basic earnings per share of common stock $ .88 $ 1.17
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Diluted earnings per share of common stock $ .84 $ 1.10
===== ======
Weighted average number of shares outstanding:
Basic 29,625,000 29,836,000
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Diluted 31,251,000 31,706,000
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(1) Includes gain of $3.7 million on sale of land and building.
(2) Includes a reduced provision as a result of a lower projected annual
effective tax rate and the resolution of other income tax matters.
GRIFFON CORPORATION AND SUBSIDIARIES
------------------------------------
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(IN THOUSANDS)
PRELIMINARY
JUNE 30, SEPTEMBER 30,
2005 2004
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ASSETS
- ------
Current Assets:
Cash and cash equivalents $ 88,481 $ 88,047
Accounts receivable, net 173,729 174,938
Contract costs and recognized income
not yet billed 36,732 32,700
Inventories 143,659 141,567
Prepaid expenses and other current assets 39,421 43,381
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Total current assets 482,022 480,633
Property, plant and equipment, at cost less
depreciation and amortization 206,991 203,539
Deferred charges and other assets 92,069 65,344
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$ 781,082 $ 749,516
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Notes payable and current portion of long-term debt $ 11,823 $ 14,490
Accounts payable 87,374 85,589
Accrued liabilities 79,203 96,288
Income taxes 20,414 14,264
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Total current liabilities 198,814 210,631
Long-term debt:
Convertible subordinated notes 130,000 130,000
Other 14,815 24,445
Other liabilities and deferred credits 50,282 40,293
Minority interest 26,111 25,175
Shareholders' equity 361,060 318,972
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$ 781,082 $ 749,516
========== ==========
GRIFFON CORPORATION AND SUBSIDIARIES
------------------------------------
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(IN THOUSANDS)
PRELIMINARY
For the Nine Months Ended
June 30,
-------------------------
2005 2004
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CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 26,190 $ 34,934
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Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization 23,789 21,155
Gain on sale of land and building (3,744) -
Minority interest 4,415 9,018
Provision for losses on accounts receivable 804 1,406
Change in assets and liabilities:
Increase in accounts receivable and contract
costs and recognized income not yet billed (1,984) (1,687)
Increase in inventories (1,545) (15,552)
(Increase) decrease in prepaid expenses and other assets 482 (1,426)
Increase (decrease) in accounts payable, accrued liabilities
and income taxes (7,639) 1,571
Other changes, net 5,361 5,244
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Total adjustments 19,939 19,729
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Net cash provided by operating activities 46,129 54,663
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CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property, plant and equipment (31,994) (30,739)
Proceeds from sale of land and building 6,931 -
Acquisition of minority interest in subsidiary (3,883) -
Acquired businesses (9,577) -
(Increase) decrease in lease deposits 3,293 (453)
-------- --------
Net cash used in investing activities (35,230) (31,192)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Purchase of shares for treasury (14,552) (20,178)
Proceeds from issuance of long-term debt 7,778 3,774
Payments of long-term debt (20,853) (12,168)
Increase in short-term borrowings 276 -
Distributions to minority interests (1,362) (5,509)
Exercise of stock options 18,928 5,302
Other, net - (269)
-------- --------
Net cash used in financing activities (9,785) (29,048)
-------- --------
Effect of exchange rate changes on cash and cash equivalents (680) 752
-------- --------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 434 (4,825)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 88,047 69,816
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CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 88,481 $ 64,991
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