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): November
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):
o
Written communications
pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o
Soliciting material pursuant to Rule
14a-12 under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement communications pursuant
to Rule 14d-2(b) under the Exchange Act (17
CFR
240.14d-2(b))
o
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
November 3, 2006, Griffon Corporation (the “Registrant”) issued a press release
announcing the Registrant’s financial results for the fourth fiscal quarter and
year ended September 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 November 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:
November 3, 2006
3
Exhibit
Index
|
99.1.
|
Press
release, dated November 3,
2006
|
GRIFFON
CORPORATION ANNOUNCES FOURTH QUARTER
OPERATING
RESULTS AND 2006 FISCAL YEAR RESULTS
Jericho,
New York, November 3, 2006 - Griffon Corporation (NYSE:GFF) today announced
operating results for the fourth quarter and fiscal year ended September 30,
2006. Net sales for the fourth quarter increased to $482,834,000 up from
$388,442,000 for the fourth quarter of fiscal 2005. Pretax income for the
quarter was $29,494,000 compared to $35,358,000 for last year's record fourth
quarter. Net income for the current quarter was $18,439,000 compared to
$22,623,000 for the last quarter of 2005. Diluted earnings per share was $.60
for the fourth quarter of fiscal 2006 compared to $.71 in last year's fourth
quarter.
The
sales
increase in the fourth quarter was primarily attributable to the electronic
information and communication systems segment (Telephonics), which achieved
significant revenue and earnings growth as a result of the Syracuse Research
Corporation (SRC) contract. The decline in fourth quarter earnings in the garage
doors segment was primarily attributable to a volume decline in dealer sales.
The significant decline in fourth quarter earnings in the specialty plastic
films segment was primarily attributable to the impact of resin price increases
and start-up production inefficiencies.
Net
sales
for the fiscal year ended September 30, 2006 were $1,636,580,000 compared to
$1,401,993,000 for fiscal 2005. Pretax income for fiscal 2006 was $78,698,000
compared to $78,945,000 last year. Net income for fiscal 2006 was $51,786,000
compared to last year’s earnings of $48,813,000. Diluted earnings per share was
$1.65 compared to $1.55 a year earlier.
For
the
year, the significant increase in operating results for Telephonics was
substantially offset by a decline in operating results for the specialty plastic
films segment. The increase was attributable to the SRC contract and the decline
was primarily attributable to the impact of resin price increases and production
inefficiencies. The Company has now received contracts in excess of $250 million
with SRC and these awards are expected to be completed by the third quarter
of
fiscal 2007.
Cash
generated from operations for the year was $16.3 million which, together with
existing cash balances funded capital expenditures of $42.1 million, the
majority of which was for the specialty plastic films and garage doors segments.
The company also continued its stock buyback program, using approximately $19.8
million during the year to acquire approximately 814,000 shares of common
stock.
Griffon
Corporation -
|
l
|
is
a leading manufacturer and marketer of residential, commercial and
industrial garage doors sold to professional installing dealers and
major
home center retail chains;
|
|
l
|
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;
|
|
l
|
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
|
|
l
|
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.
|
OPERATING
HIGHLIGHTS
|
|||||||||||||
|
(IN
THOUSANDS)
|
|||||||||||||
|
PRELIMINARY
|
|||||||||||||
|
For
the Three Months Ended
|
For
the Years Ended
|
||||||||||||
|
September
30,
|
September
30,
|
||||||||||||
|
2006
|
2005
|
2006
|
2005
|
||||||||||
|
Net
sales:
|
|||||||||||||
|
Garage
Doors
|
$
|
145,990
|
$
|
149,027
|
$
|
549,701
|
$
|
532,348
|
|||||
|
Installation
Services
|
88,502
|
84,154
|
338,731
|
300,041
|
|||||||||
|
Specialty
Plastic Films
|
102,085
|
93,686
|
381,373
|
370,158
|
|||||||||
|
Electronic
Information and Communication Systems
|
151,735
|
67,234
|
387,437
|
220,993
|
|||||||||
|
Intersegment
eliminations
|
(5,478
|
)
|
(5,659
|
)
|
(20,662
|
)
|
(21,547
|
)
|
|||||
|
$
|
482,834
|
$
|
388,442
|
$
|
1,636,580
|
$
|
1,401,993
|
||||||
|
Operating
income:
|
|||||||||||||
|
Garage
Doors
|
$
|
13,640
|
$
|
15,585
|
$
|
41,171
|
$
|
37,669
|
|||||
|
Installation
Services
|
3,021
|
3,976
|
9,238
|
9,135
|
|||||||||
|
Specialty
Plastic Films
|
39
|
10,724
|
15,450
|
31,582
|
|||||||||
|
Electronic
Information and Communication Systems
|
19,221
|
9,366
|
39,609
|
18,117
|
|||||||||
|
Segment
operating income
|
35,921
|
39,651
|
105,468
|
96,503
|
|||||||||
|
Unallocated
amounts
|
(4,099
|
)
|
(2,353
|
)
|
(18,058
|
)
|
(15,121
|
)
|
|||||
|
Interest
and other, net
|
(2,328
|
)
|
(1,940
|
)
|
(8,712
|
)
|
(2,437
|
)
|
|||||
|
Income
before income taxes
|
$
|
29,494
|
$
|
35,358
|
$
|
78,698
|
$
|
78,945
|
|||||
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
|||||||
|
(IN
THOUSANDS EXCEPT FOR PER SHARE AMOUNTS)
|
|||||||
|
PRELIMINARY
|
|||||||
|
FOR
THE THREE MONTHS ENDED
|
|||||||
|
SEPTEMBER
30,
|
|||||||
|
2006
|
2005
|
||||||
|
Net
sales
|
$
|
482,834
|
$
|
388,442
|
|||
|
Cost
of sales
|
368,780
|
276,018
|
|||||
|
Gross
profit
|
114,054
|
112,424
|
|||||
|
Selling,
general and administrative expenses
|
82,421
|
75,766
|
|||||
|
Income
from operations
|
31,633
|
36,658
|
|||||
|
Other
income (expense):
|
|||||||
|
Interest
expense
|
(2,777
|
)
|
(2,498
|
)
|
|||
|
Interest
income
|
449
|
558
|
|||||
|
Other,
net
|
189
|
640
|
|||||
|
(2,139
|
)
|
(1,300
|
)
|
||||
|
Income
before income taxes
|
29,494
|
35,358
|
|||||
|
Provision
for income taxes:
|
|||||||
|
Federal
|
10,008
|
9,410
|
|||||
|
State
and foreign
|
1,047
|
3,325
|
|||||
|
11,055
|
12,735
|
||||||
|
Net
income
|
$
|
18,439
|
$
|
22,623
|
|||
|
Basic
earnings per share of common stock:
|
$
|
.62
|
$
|
.74
|
|||
|
Diluted
earnings per share of common stock:
|
$
|
.60
|
$
|
.71
|
|||
|
Weighted
average number of shares outstanding:
|
|||||||
|
Basic
|
29,897,000
|
30,529,000
|
|||||
|
Diluted
|
30,983,000
|
31,910,000
|
|||||
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
|||||||
|
(IN
THOUSANDS EXCEPT FOR PER SHARE AMOUNTS)
|
|||||||
|
PRELIMINARY
|
|||||||
|
FOR
THE YEARS ENDED
|
|||||||
|
SEPTEMBER
30,
|
|||||||
|
2006
|
2005
|
||||||
|
Net
sales
|
$
|
1,636,580
|
$
|
1,401,993
|
|||
|
Cost
of sales
|
1,234,826
|
1,032,365
|
|||||
|
Gross
profit
|
401,754
|
369,628
|
|||||
|
Selling,
general and administrative expenses
|
316,696
|
289,527
|
|||||
|
Income
from operations
|
85,058
|
80,101
|
|||||
|
Other
income (expense):
|
|||||||
|
Interest
expense
|
(10,492
|
)
|
(8,266
|
)
|
|||
|
Interest
income
|
1,780
|
2,085
|
|||||
|
Other,
net
|
2,352
|
5,025
|
(1) | ||||
|
(6,360
|
)
|
(1,156
|
)
|
||||
|
Income
before income taxes
|
78,698
|
78,945
|
|||||
|
Provision
for income taxes (2):
|
|||||||
|
Federal
|
21,135
|
14,794
|
|||||
|
State
and foreign
|
5,777
|
10,923
|
|||||
|
26,912
|
25,717
|
||||||
|
Income
before minority interest
|
51,786
|
53,228
|
|||||
|
Minority
interest
|
-
|
(4,415
|
)
|
||||
|
Net
income
|
$
|
51,786
|
$
|
48,813
|
|||
|
Basic
earnings per share of common stock:
|
$
|
1.73
|
$
|
1.64
|
|||
|
Diluted
earnings per share of common stock:
|
$
|
1.65
|
$
|
1.55
|
|||
|
Weighted
average number of shares outstanding:
|
|||||||
|
Basic
|
29,968,000
|
29,851,000
|
|||||
|
Diluted
|
31,326,000
|
31,416,000
|
|||||
|
(1)
Includes gain of $3.7 million on sale of land and building.
|
|||||||
|
(2)
Was favorably impacted by the reversal of estimated income tax liabilities
in
connection with closed tax years.
|
|||||||
|
|
|||||||
|
GRIFFON
CORPORATION AND SUBSIDIARIES
|
|||||||
|
CONSOLIDATED
BALANCE SHEETS
|
|||||||
|
(IN
THOUSANDS)
|
|||||||
|
PRELIMINARY
|
|||||||
|
SEPTEMBER
30,
|
|||||||
|
2006
|
2005
|
||||||
|
ASSETS
|
|||||||
|
Current
Assets:
|
|||||||
|
Cash
and cash equivalents
|
$
|
22,389
|
$
|
60,663
|
|||
|
Accounts
receivable, net
|
247,172
|
189,904
|
|||||
|
Contract
costs and recognized income not yet billed
|
68,279
|
43,065
|
|||||
|
Inventories
|
165,089
|
148,350
|
|||||
|
Prepaid
expenses and other current assets
|
42,075
|
41,227
|
|||||
|
Total
current assets
|
545,004
|
483,209
|
|||||
|
Property,
plant and equipment, at cost less
|
|||||||
|
depreciation
and amortization
|
231,975
|
216,900
|
|||||
|
Goodwill
|
99,540
|
96,098
|
|||||
|
Intangible
and other assets
|
51,695
|
55,220
|
|||||
|
$
|
928,214
|
$
|
851,427
|
||||
|
LIABILITIES
AND SHAREHOLDERS' EQUITY
|
|||||||
|
Current
Liabilities:
|
|||||||
|
Notes
payable and current portion of long-term debt
|
$
|
8,092
|
$
|
16,625
|
|||
|
Accounts
payable
|
128,104
|
91,970
|
|||||
|
Accrued
liabilities
|
81,672
|
78,849
|
|||||
|
Income
taxes
|
18,431
|
22,599
|
|||||
|
Total
current liabilities
|
236,299
|
210,043
|
|||||
|
Long-term
debt:
|
|||||||
|
Convertible
subordinated notes
|
130,000
|
130,000
|
|||||
|
Other
|
79,228
|
66,540
|
|||||
|
Other
liabilities and deferred credits
|
70,242
|
82,890
|
|||||
|
Shareholders'
equity
|
412,445
|
361,954
|
|||||
|
$
|
928,214
|
$
|
851,427
|
||||
|
GRIFFON
CORPORATION AND SUBSIDIARIES
|
|||||||
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|||||||
|
(IN
THOUSANDS)
|
|||||||
|
PRELIMINARY
|
For
the Years Ended
|
||||||
|
September
30,
|
|||||||
|
2006
|
2005
|
||||||
|
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
|||||||
|
Net
income
|
$
|
51,786
|
$
|
48,813
|
|||
|
Adjustments
to reconcile net income to net cash
|
|||||||
|
provided
by operating activities:
|
|||||||
|
Depreciation
and amortization
|
35,100
|
32,613
|
|||||
|
Stock
based compensation
|
1,711
|
-
|
|||||
|
Gain
on sale of land and building
|
-
|
(3,744
|
)
|
||||
|
Minority
interest
|
-
|
4,415
|
|||||
|
Provision
for losses on accounts receivable
|
1,792
|
988
|
|||||
|
Deferred
income taxes
|
(4,012
|
)
|
(1,740
|
)
|
|||
|
Change
in assets and liabilities:
|
|||||||
|
Increase
in accounts receivable and contract
|
|||||||
|
costs
and recognized income not yet billed
|
(79,799
|
)
|
(24,595
|
)
|
|||
|
Increase
in inventories
|
(15,624
|
)
|
(5,718
|
)
|
|||
|
(Increase)
decrease in prepaid expenses and other assets
|
722
|
(880
|
)
|
||||
|
Increase
in accounts payable, accrued liabilities and income taxes payable,
net
|
25,090
|
5,644
|
|||||
|
Other
changes, net
|
(482
|
)
|
2,526
|
||||
|
Total
adjustments
|
(35,502
|
)
|
9,509
|
||||
|
Net
cash provided by operating activities
|
16,284
|
58,322
|
|||||
|
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
|||||||
|
Acquisition
of property, plant and equipment
|
(42,107
|
)
|
(40,000
|
)
|
|||
|
Proceeds
from sale of land and building
|
-
|
6,931
|
|||||
|
Acquisition
of minority interest in subsidiaries
|
-
|
(85,928
|
)
|
||||
|
Acquired
businesses
|
(1,304
|
)
|
(9,577
|
)
|
|||
|
(Increase)
decrease in equipment lease deposits
|
(1,988
|
)
|
6,856
|
||||
|
Net
cash used in investing activities
|
(45,399
|
)
|
(121,718
|
)
|
|||
|
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
|||||||
|
Purchase
of shares for treasury
|
(19,811
|
)
|
(25,909
|
)
|
|||
|
Proceeds
from issuance of long-term debt
|
74,000
|
67,778
|
|||||
|
Payments
of long-term debt
|
(69,892
|
)
|
(25,038
|
)
|
|||
|
Increase
(decrease) in short-term borrowings
|
(398
|
)
|
1,045
|
||||
|
Exercise
of stock options
|
2,639
|
20,261
|
|||||
|
Distributions
to minority interests
|
(354
|
)
|
(1,362
|
)
|
|||
|
Tax
benefit from exercise of stock options
|
4,136
|
-
|
|||||
|
Other,
net
|
(179
|
)
|
-
|
||||
|
Net
cash provided by (used in) financing activities
|
(9,859
|
)
|
36,775
|
||||
|
Effect
of exchange rate changes on cash and cash equivalents
|
700
|
(763
|
)
|
||||
|
NET
DECREASE IN CASH AND CASH EQUIVALENTS
|
(38,274
|
)
|
(27,384
|
)
|
|||
|
CASH
AND CASH EQUIVALENTS AT BEGINNING OF YEAR
|
60,663
|
88,047
|
|||||
|
CASH
AND CASH EQUIVALENTS AT END OF YEAR
|
$
|
22,389
|
$
|
60,663
|
|||