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 19, 2009
GRIFFON
CORPORATION
(Exact
Name of Registrant as Specified in Charter)
|
Delaware
|
1-6620
|
11-1893410
|
|
(State
or Other Jurisdiction
of
Incorporation)
|
(Commission
File
Number)
|
(I.R.S.
Employer
Identification
Number)
|
|
712
Fifth Avenue,
18th
Floor
New
York, New York
|
10019
|
|
(Address
of Principal Executive Offices)
|
(Zip
Code)
|
(212) 957-5000
(Registrant’s
telephone number, including area code)
100
Jericho Quadrangle
Jericho,
New York 11753
(Former
Name or Former Address, if Changed Since Last Report)
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 19, 2009, Griffon Corporation (the “Registrant”) issued a press release
announcing the Registrant’s financial results for the fourth fiscal quarter and
year ended September 30, 2009. 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 19, 2009
|
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/ Douglas J. Wetmore | |
| Douglas J. Wetmore | |||
| Executive Vice President and Chief Financial Officer | |||
Date: November
19, 2009
3
Exhibit
Index
|
99.1.
|
Press
release, dated November 19, 2009
|
4
FOR IMMEDIATE
RELEASE
Griffon
Corporation Announces Fourth Quarter and Fiscal 2009 Operating
Results
Reports
4Q 2009 Continuing Operations EPS of $0.21 vs. Year-ago Loss of
$0.20
Full
Year 2009 Continuing Operations EPS Increase to $0.37 vs. $0.00 in
2008
Griffon Generates Full Year 2009 Operating Cash Flow of $84
Million
Book
Value Increases to $11.53 per Share
NEW YORK, NEW YORK, November 19,
2009 – Griffon Corporation (NYSE: GFF) today reported operating results
for the fourth quarter and fiscal year ended September 30, 2009.
Fourth
Quarter 2009
Revenue
for the 2009 quarter was $328.2 million, compared to $353.7 million in 2008.
Income from continuing operations for the current quarter was $12.3 million, or
$0.21 per diluted share, compared to a loss of $6.7 million, or $0.20 per
diluted share, last year. In the 2008 quarter, the Company recorded a $12.9
million goodwill impairment charge related to the Building Products segment;
excluding this charge, fourth quarter 2008 income from continuing operations
would have been $6.3 million, or $0.19 per diluted share. In 2008, there was a
loss from discontinued operations of $1.3 million or $0.04 per diluted share; in
2009, results of discontinued operations were immaterial. Net income
for the 2009 quarter was $12.4 million, or $0.21 per diluted share, compared to
a loss of $8.0 million, or $0.24 per diluted share, in 2008. Diluted
shares used for per share calculations were 59.4 million in 2009, compared to
33.4 million in 2008, an increase of 78% resulting primarily from the 2008
rights offering.
The
Company’s segment adjusted EBITDA for the 2009 quarter was $34.9 million
compared to $29.5 million in 2008. Segment adjusted EBITDA is defined as
operating income, excluding corporate overhead, interest, taxes, depreciation
and amortization, restructuring charges, goodwill impairment charges and the
benefit of debt extinguishment.
Full
Year 2009
Revenue
for 2009 was $1.2 billion, compared to $1.3 billion in 2008. Income from
continuing operations for 2009 was $22.0 million, or $0.37 per diluted share,
compared to $0.1 million, or zero per diluted share, last year. The 2008 results
included the $12.9 million goodwill impairment charge for the Building Products
segment; excluding this charge, 2008 income from continuing operations would
have been $13.0 million, or $0.40 per diluted share. Income from discontinued
operations for 2009 was $0.8 million, or $0.01 per diluted share, compared to a
loss of $40.6 million, or $1.24 per diluted share, last year. Net income for
2009 was $22.8 million, or $0.39 per diluted share, compared to a loss of $40.5
million, or $1.24 per diluted share in 2008. Diluted shares used for
per share calculations were 59.0 million in 2009 compared to 32.8 million in
2008, an increase of 80% resulting primarily from the 2008 rights
offering.
The
Company’s 2009 segment adjusted EBITDA was $90.7 million compared to $93.0
million in the prior year.
During
2009, the Company purchased $50.6 million face value of the convertible notes
from certain noteholders for $42.7 million. Net of related unamortized debt
issuance costs of $0.5 million, the Company recorded a pre-tax gain of $7.4
million from debt extinguishment.
In June
2009, the Company announced plans to consolidate facilities of its Building
Products segment. The consolidation, scheduled to be completed
in early 2011, is expected to produce annual cost savings approximating $10
million. The Company estimates that it will incur pre-tax exit and
restructuring costs approximating $12 million, substantially all of which will
be cash charges. In addition, the Company expects to invest
approximately $11 million in capital expenditures in order to effectuate the
restructuring plan. These charges and expenditures will occur
primarily in fiscal 2010 and 2011. For the fourth quarter and full
year 2009, the Company incurred $1.2 million in restructuring costs and invested
$2.0 million in related capital expenditures.
RESULTS OF
OPERATIONS
Telephonics
For the
quarter ended September 30, 2009, Telephonics revenue totaled $116.4 million, a
12% increase over 2008. This increase was mainly driven by strong growth in the
Communications Division.
Segment
operating profit increased $0.3 million, or 3%, compared to last year’s quarter,
mainly due to favorable product mix, partially offset by increased operating
expenses related to research and development and additional administrative
expenses necessary to support sales growth.
In 2009,
Telephonics’ revenue increased $21.6 million, or 6%, compared to the prior year,
mainly due to higher sales in the Radar Systems division.
Segment
operating profit increased $2 million to $34.9 million in 2008; segment
operating profit margin remained at 9.0%, due to the strong sales performance
and favorable program mix being offset by higher SG&A expenses. The increase
in SG&A expenses resulted from higher research and development expenditures
and additional administrative expenses to support revenue growth.
Clopay
Building Products
For the
quarter ended September 30, 2009, Building Products revenue totaled $106.8
million, a 14% decrease compared to 2008. Building Products continued
to be adversely impacted by persistent weakness in the residential housing
market. The sales decline was principally due to reduced unit volume, partially
offset by favorable product mix.
Segment
operating profit improved to $4.3 million compared to a loss of $9.4 million in
the 2008 quarter. The 2008 result included the goodwill impairment
charge of $12.9 million; excluding this charge, the 2008 operating results would
have been a $3.5 million profit. Excluding the goodwill
impairment charge from the 2008 comparative, the improvement in segment
operating profit in the 2009 quarter was mainly enabled by the Company’s
cost-cutting and facility rationalization initiatives.
For the
full year 2009, Building Products revenue totaled $393.4 million, a decrease of
$41.9 million, or 10%, compared to 2008; this decline was due to the continued
weak housing market. The revenue decline was principally due to reduced unit
volume, partially offset by a favorable shift in mix to higher priced
products.
2
Segment
operating loss for 2009 was $11.3 million, an improvement of $6.1 million
compared to the prior year. The 2008 result included the goodwill impairment
charge of $12.9 million; excluding this charge, the 2008 operating results would
have been a $4.5 million loss. Excluding the goodwill impairment
charge from the 2008 comparative, the increased loss in 2009 was mainly due to
the sharp decline in volume, and the resultant unfavorable impact on absorption
of fixed operating expenses. Notwithstanding the total loss for 2009,
segment operating profit improved sequentially during 2009, reaching $0.6
million and $4.3 million in the third and fourth quarters, respectively, a
significant improvement over the operating losses incurred in the first two
quarters of 2009.
Clopay
Plastic Products
For the
quarter ended September 30, 2009, Plastics revenue totaled $105.0 million, a 16%
decrease from the prior year. The lower revenue was principally due to lower
volume in our European business, unfavorable foreign exchange translation and
the pass through of lower resin costs in customer selling prices.
Segment
operating profit of $7.2 million increased $2.4 million, or 51% compared to the
prior year quarter, mainly as a result of favorable product mix, and lower
SG&A costs due to lower volume and cost saving initiatives.
For the
full year 2009, Plastics’ revenue totaled $412.8 million, a decrease of $54.9
million or 12%, compared to 2008. This revenue decline was principally due to
lower volume in the European business, translation of the European results into
the stronger U.S. dollar and the pass through of lower resin costs in customer
selling prices.
Segment
operating profit was $24.1 million, an increase of $3.5 million or 17%, compared
to the prior year. The improvement in segment operating profit in 2009 was
mainly enabled by the Company’s cost-cutting initiatives and favorable product
mix, partially offset by lower unit volume. Segment operating profit
margin increased 140 basis points compared to 2008.
Discontinued
Operations
As a
result of the downturn in the residential housing market, in 2008 the Company
exited substantially all of the operating activities of its former Installation
Services segment. Operating results of substantially the entire Installation
Services segment have been reported as discontinued operations in the condensed
consolidated financial statements for all periods presented, and the
Installation Services segment is excluded from segment reporting. The Company
substantially concluded its disposal of the Installation Services segment in the
second quarter of 2009.
3
Balance
Sheet and Capital Expenditures
The
Company’s total cash and equivalents at September 30, 2009 was $320.8 million.
Total debt outstanding at September 30, 2009 was $179.8 million, including $79.4
million of convertible notes, for a net cash position of $141.0 million. Capital
expenditures for 2009 were $32.7 million.
Conference
Call Information
The
Company will hold a conference call today, November 19, 2009, at 4:30 PM
ET.
The call
can be accessed by dialing 1-877-407-0784 (U.S. participants) or (201) 689-8560
(International participants). Callers should ask to be connected to
Griffon Corporation’s fourth quarter 2009 teleconference and provide the
conference ID number 337778.
A replay
of the call will be available starting on November 19, 2009 at 7:30 PM ET by
dialing 1-877-660-6853 (U.S.) or (201) 612-7415 (International). The replay
account number is 3055 with access code 337778. The replay will be
available through December 3, 2009.
Forward-looking
Statements
“Safe
Harbor” Statements under the Private Securities Litigation Reform Act of 1995:
All statements relate to, among other things, income, earnings, cash flows,
revenue, changes in operations, operating improvements, industries in which
Griffon Corporation (the “Company” or “Griffon”) operates and the United States
and global economies. Statements 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; the Company’s ability
to achieve expected savings from cost control, 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; the government reduces military spending on
projects supplied by Griffon’s Telephonics Corporation; increases in cost of raw
materials such as resin and steel; changes in customer demand; political events
that could impact the worldwide economy; a downgrade in the Company’s credit
ratings; international economic conditions including interest rate and currency
exchange fluctuations; the relative mix of products and services which impacts
margins and operating efficiencies; short-term capacity constraints or prolonged
excess capacity; unforeseen developments in contingencies such as litigation;
unfavorable results of government agency contract audits of Griffon’s
subsidiary, Telephonics Corporation; protection and validity of patent and other
intellectual property rights; the cyclical nature of the business of certain
Griffon operating companies; and possible terrorist threats and actions, and
their impact on the global economy. 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 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. The
Company 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.
4
About
Griffon Corporation
Griffon
Corporation (the “Company” or “Griffon”), is a diversified management and
holding company that conducts business through wholly-owned
subsidiaries. The Company oversees the operations of its
subsidiaries, allocates resources among them and manages their capital
structures. The Company provides direction and assistance to its
subsidiaries in connection with acquisition and growth opportunities as well as
in connection with divestitures. Griffon also seeks out, evaluates
and, when appropriate, will acquire additional businesses that offer potentially
attractive returns on capital to further diversify itself.
Headquartered
in New York, N.Y., the Company was incorporated in New York in 1959, and was
reincorporated in Delaware in 1970. It changed its name to Griffon
Corporation in 1995.
Griffon
currently conducts its operations through Telephonics Corporation, Clopay
Building Products Company and Clopay Plastic Products Company.
|
|
·
|
Telephonics
Corporation high-technology engineering and manufacturing capabilities
provide integrated information, communication and sensor system solutions
to military and commercial markets
worldwide.
|
|
|
·
|
Clopay
Building Products Company is a leading manufacturer and marketer of
residential, commercial and industrial garage doors to professional
installing dealers and major home center retail
chains.
|
|
|
·
|
Clopay
Plastic Products Company is an international leader in the development and
production of embossed, laminated and printed specialty plastic films used
in a variety of hygienic, health-care and industrial
applications.
|
For more
information on the Company and its operating subsidiaries, please see the
Company's website at www.griffoncorp.com.
|
Company Contact:
|
Investor Relations
Contact:
|
|
Douglas J. Wetmore
|
James Palczynski
|
|
Chief
Financial Officer
|
Principal
and Director
|
|
Griffon
Corporation
|
ICR
Inc.
|
|
(212)
957-5000
712 Fifth Avenue, 18th Floor
New York, NY 10019
|
(203)
682-8229
|
5
|
GRIFFON
CORPORATION AND SUBSIDIARIES
|
|
OPERATING
HIGHLIGHTS
|
|
(Unaudited)
|
|
Three
months ended
|
For
the Years Ended
|
|||||||||||||||
|
(in
thousands)
|
September
30,
|
September
30,
|
||||||||||||||
|
2009
|
2008
|
2009
|
2008
|
|||||||||||||
|
REVENUE
|
||||||||||||||||
|
Telephonics
|
$ | 116,361 | $ | 103,780 | $ | 387,881 | $ | 366,288 | ||||||||
|
Clopay
Building Products
|
106,848 | 124,409 | 393,414 | 435,321 | ||||||||||||
|
Clopay
Plastic Products
|
105,035 | 125,476 | 412,755 | 467,696 | ||||||||||||
|
Total
consolidated net sales
|
$ | 328,244 | $ | 353,665 | $ | 1,194,050 | $ | 1,269,305 | ||||||||
|
INCOME
(LOSS) FROM CONTINUING OPERATIONS
|
||||||||||||||||
|
Segment operating profit
(loss):
|
||||||||||||||||
|
Telephonics
|
$ | 11,345 | $ | 11,067 | $ | 34,883 | 32,862 | |||||||||
|
Clopay
Building Products
|
4,269 | (9,376 | ) | (11,326 | ) | (17,444 | ) | |||||||||
|
Clopay
Plastic Products
|
7,178 | 4,765 | 24,072 | 20,620 | ||||||||||||
|
Total
segment operating profit
|
22,792 | 6,456 | 47,629 | 36,038 | ||||||||||||
|
Unallocated
amounts
|
(5,471 | ) | (5,589 | ) | (20,960 | ) | (21,281 | ) | ||||||||
|
Gain
from debt extinguishment, net
|
- | - | 7,360 | - | ||||||||||||
|
Net interest expense
|
(1,243 | ) | (2,909 | ) | (8,023 | ) | (10,375 | ) | ||||||||
|
Income before taxes and discontinued
operations
|
$ | 16,078 | $ | (2,042 | ) | $ | 26,006 | $ | 4,382 | |||||||
Unallocated
amounts typically include general corporate expenses not attributable to any
reportable segment.
6
|
GRIFFON
CORPORATION AND SUBSIDIARIES
|
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
|
(Unaudited)
|
|
(in
thousands)
|
|
Three Months Ended September
30,
|
Years
Ended September 30,
|
|||||||||||||||
|
2009
|
2008
|
2009
|
2008
|
|||||||||||||
|
Revenue
|
$ | 328,244 | $ | 353,665 | $ | 1,194,050 | $ | 1,269,305 | ||||||||
|
Cost
of goods and services
|
250,339 | 276,256 | 936,927 | 996,308 | ||||||||||||
|
Gross
profit
|
77,905 | 77,409 | 257,123 | 272,997 | ||||||||||||
|
Selling
and administrative expenses
|
60,287 | 63,779 | 230,736 | 245,430 | ||||||||||||
|
Impairment
of goodwill
|
- | 12,913 | - | 12,913 | ||||||||||||
|
Restructuring
and other related charges
|
1,202 | 38 | 1,240 | 2,610 | ||||||||||||
|
Total
operating expenses
|
61,489 | 76,730 | 231,976 | 260,953 | ||||||||||||
|
Income
from operations
|
16,416 | 679 | 25,147 | 12,044 | ||||||||||||
|
Other
income (expense)
|
||||||||||||||||
|
Interest
expense
|
(1,772 | ) | (3,123 | ) | (9,562 | ) | (12,345 | ) | ||||||||
|
Interest
income
|
529 | 214 | 1,539 | 1,970 | ||||||||||||
|
Gain
from debt extinguishment, net
|
- | - | 7,360 | - | ||||||||||||
|
Other,
net
|
905 | 188 | 1,522 | 2,713 | ||||||||||||
|
Total
other income (expense)
|
(338 | ) | (2,721 | ) | 859 | (7,662 | ) | |||||||||
|
Income
before taxes and discontinued operations
|
16,078 | (2,042 | ) | 26,006 | 4,382 | |||||||||||
|
Provision for income taxes
|
3,737 | 4,619 | 4,005 | 4,294 | ||||||||||||
|
Income from continuing
operations
|
12,341 | (6,661 | ) | 22,001 | 88 | |||||||||||
|
Discontinued
operations:
|
||||||||||||||||
|
Income
(loss) from operations of the discontinued Installation Services
business
|
175 | (10,111 | ) | 1,230 | (62,447 | ) | ||||||||||
|
Provision
(benefit) for income taxes
|
86 | (8,793 | ) | 440 | (21,856 | ) | ||||||||||
|
Income
(loss) from discontinued operations
|
89 | (1,318 | ) | 790 | (40,591 | ) | ||||||||||
|
Net
income (loss)
|
$ | 12,430 | $ | (7,979 | ) | $ | 22,791 | $ | (40,503 | ) | ||||||
|
Basic
earnings (loss) per common share:
|
||||||||||||||||
|
Income
(loss) from continuing operations
|
$ | 0.21 | $ | (0.20 | ) | $ | 0.37 | $ | 0.00 | |||||||
|
Income
(loss) from discontinued operations
|
0.00 | (0.04 | ) | 0.01 | (1.24 | ) | ||||||||||
|
Net
income (loss)
|
0.21 | (0.24 | ) | 0.39 | (1.24 | ) | ||||||||||
|
Weighted-average
shares outstanding
|
58,778 | 33,215 | 58,699 | 32,667 | ||||||||||||
|
Diluted
earnings (loss) per common share:
|
||||||||||||||||
|
Income
(loss) from continuing operations
|
$ | 0.21 | $ | (0.20 | ) | $ | 0.37 | $ | 0.00 | |||||||
|
Income
(loss) from discontinued operations
|
0.00 | (0.04 | ) | 0.01 | (1.24 | ) | ||||||||||
|
Net
income (loss)
|
0.21 | (0.24 | ) | 0.39 | (1.24 | ) | ||||||||||
|
Weighted-average
shares outstanding
|
59,420 | 33,373 | 59,002 | 32,836 | ||||||||||||
Note: Due to
rounding, the sum of earnings per share of Continuing operations and
Discontinued operations may not equal earnings per share of Net
income.
7
|
GRIFFON
CORPORATION AND SUBSIDIARIES
|
|
CONSOLIDATED
BALANCE SHEETS
|
|
(Unaudited)
|
|
(in
thousands)
|
|
At
September 30,
|
At
September 30,
|
|||||||
|
2009
|
2008
|
|||||||
|
CURRENT
ASSETS
|
||||||||
|
Cash
and equivalents
|
$ | 320,833 | $ | 311,921 | ||||
|
Accounts
receivable, net of allowances of $4,457 and $5,609
|
164,619 | 163,586 | ||||||
|
Contract
costs and recognized income not yet billed, net of progress payments of
$14,592 and $8,863
|
75,536 | 69,001 | ||||||
|
Inventories,
net
|
139,170 | 167,158 | ||||||
|
Prepaid
and other current assets
|
39,261 | 52,430 | ||||||
|
Assets
of discontinued operations
|
1,576 | 9,495 | ||||||
|
Total
Current Assets
|
740,995 | 773,591 | ||||||
|
PROPERTY,
PLANT AND EQUIPMENT, net
|
236,019 | 239,003 | ||||||
|
GOODWILL
|
97,657 | 93,782 | ||||||
|
INTANGIBLE
ASSETS, net
|
34,211 | 34,777 | ||||||
|
OTHER
ASSETS
|
30,648 | 22,067 | ||||||
|
ASSETS
OF DISCONTINUED OPERATIONS
|
5,877 | 8,346 | ||||||
|
Total
Assets
|
$ | 1,145,407 | $ | 1,171,566 | ||||
|
CURRENT
LIABILITIES
|
||||||||
|
Notes
payable and current portion of long-term debt
|
$ | 81,410 | $ | 2,258 | ||||
|
Accounts
payable
|
125,027 | 129,823 | ||||||
|
Accrued
liabilities
|
61,120 | 64,450 | ||||||
|
Liabilities
of discontinued operations
|
4,932 | 14,917 | ||||||
|
Total
Current Liabilities
|
272,489 | 211,448 | ||||||
|
LONG-TERM
DEBT
|
98,394 | 230,930 | ||||||
|
OTHER
LIABILITIES
|
78,837 | 59,460 | ||||||
|
LIABILITIES
OF DISCONTINUED OPERATIONS
|
8,784 | 10,048 | ||||||
|
Total
Liabilities
|
458,504 | 511,886 | ||||||
|
COMMITMENTS
AND CONTINGENCIES
|
||||||||
|
SHAREHOLDERS'
EQUITY
|
||||||||
|
Total
Shareholders' Equity
|
686,903 | 659,680 | ||||||
|
Total
Liabilities and Shareholders' Equity
|
$ | 1,145,407 | $ | 1,171,566 | ||||
8
|
GRIFFON
CORPORATION AND SUBSIDIARIES
|
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
(Unaudited)
|
|
(in
thousands)
|
|
Years Ended September
30,
|
||||||||
|
2009
|
2008
|
|||||||
|
CASH
FLOWS FROM OPERATING ACTIVITIES
|
||||||||
|
Net
income (loss)
|
$ | 22,791 | $ | (40,503 | ) | |||
|
Adjustments
to reconcile net income (loss) to net cash provided by operating
activities:
|
||||||||
|
Loss
(income) from discontinued operations
|
(790 | ) | 40,591 | |||||
|
Depreciation
and amortization
|
42,346 | 42,923 | ||||||
|
Impairment
of goodwill
|
- | 12,913 | ||||||
|
Stock-based
compensation
|
4,145 | 3,327 | ||||||
|
Provision
for losses on account receivable
|
628 | 1,089 | ||||||
|
Amortization/write-off
of deferred financing costs
|
1,680 | 1,402 | ||||||
|
Gain
from debt extinguishment, net
|
(7,360 | ) | - | |||||
|
Deferred
income taxes
|
(826 | ) | 212 | |||||
|
Change
in assets and liabilities:
|
||||||||
|
(Increase)
decrease in accounts receivable and contract costs and recognized income
not yet billed
|
(6,690 | ) | 13,585 | |||||
|
(Increase)
decrease in inventories
|
28,498 | (23,500 | ) | |||||
|
(Increase)
decrease in prepaid and other assets
|
11,130 | (12,524 | ) | |||||
|
Increase
(decrease) in accoutns payable, accrued liabilities and income taxes
payable
|
(8,627 | ) | 53,095 | |||||
|
Other
changes, net
|
(2,825 | ) | (6,561 | ) | ||||
|
Net
cash provided by operating activities
|
84,100 | 86,049 | ||||||
|
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
|
Acquisition
of property, plant and equipment
|
(32,697 | ) | (53,116 | ) | ||||
|
Acquired
businesses
|
- | (1,829 | ) | |||||
|
Proceeds
from sale of assets
|
200 | 1,000 | ||||||
|
(Increase)
decrease in equipment lease deposits
|
(336 | ) | 4,593 | |||||
|
Funds
restricted for capital projects
|
- | - | ||||||
|
Net
cash used in investing activities
|
(32,833 | ) | (49,352 | ) | ||||
|
CASH
FLOWS FROM FINANCING ACTIVITIES
|
||||||||
|
Proceeds
from issuance of shares from rights offering
|
7,257 | 241,344 | ||||||
|
Purchase
of shares for treasury
|
- | (579 | ) | |||||
|
Proceeds
from issuance of long-term debt
|
11,431 | 89,235 | ||||||
|
Payments
of long-term debt
|
(56,676 | ) | (87,785 | ) | ||||
|
Decrease
in short-term borrowings
|
(866 | ) | (924 | ) | ||||
|
Financing
costs
|
(597 | ) | (10,027 | ) | ||||
|
Purchase
of ESOP shares
|
(4,370 | ) | - | |||||
|
Exercise
of stock options
|
- | - | ||||||
|
Tax
benefit from vesting of restricted stock
|
217 | 3 | ||||||
|
Other,
net
|
402 | 139 | ||||||
|
Net
cash provided by (used in) financing activities
|
(43,202 | ) | 231,406 | |||||
|
CASH
FLOWS FROM DISCONTINUED OPERATIONS:
|
||||||||
|
Net
cash provided by (used in) discontinued operations
|
(1,305 | ) | (5,410 | ) | ||||
|
Net
cash provided by (used in) investing activities
|
- | 5,496 | ||||||
|
Net
cash provided by (used in) discontinued operations
|
(1,305 | ) | 86 | |||||
|
Effect
of exchange rate changes on cash and cash equivalents
|
2,152 | (1,015 | ) | |||||
|
NET
INCREASE IN CASH AND CASH EQUIVALENTS
|
8,912 | 267,174 | ||||||
|
CASH
AND EQUIVALENTS AT BEGINNING OF YEAR
|
311,921 | 44,747 | ||||||
|
CASH
AND EQUIVALENTS AT END OF YEAR
|
$ | 320,833 | $ | 311,921 | ||||
9
|
The
following is a reconciliation of operating income, which is a GAAP measure
of our operating results, to segment operating income and segment adjusted
EBITDA. Management believes that the presentation of segment operating
income and segment adjusted EBITDA is appropriate to provide additional
information about the Company’s reportable segments. Segment operating
income and segment adjusted EBITDA are not presentations made in
accordance with GAAP, are not measures of financial performance or
condition, liquidity or profitability of the Company, and should not be
considered as an alternative to (1) net income, operating income or any
other performance measures determined in accordance with GAAP or (2)
operating cash flows determined in accordance with GAAP. Additionally,
segment operating income and segment adjusted EBITDA are not intended to
be measures of free cash flow for management’s discretionary use, as they
do not consider certain cash requirements such as interest payments, tax
payments, capital expenditures and debt service
requirements.
|
[
GRIFFON
CORPORATION AND SUBSIDIARIES
RECONCILIATION
OF NON-GAAP MEASURES
SEGMENT
ADJUSTED EBITDA - BY REPORTABLE SEGMENT
(Unaudited)
|
Three months
ended
|
Years Ended
|
|||||||||||||||
|
(in
thousands)
|
September
30,
|
September
30,
|
||||||||||||||
|
2009
|
2008
|
2009
|
2008
|
|||||||||||||
|
Telephonics
|
||||||||||||||||
|
Segment
operating income
|
$ | 11,345 | $ | 11,067 | $ | 34,883 | $ | 32,862 | ||||||||
|
Depreciation
and amortization
|
2,007 | 2,122 | 6,657 | 6,753 | ||||||||||||
|
Segment
adjusted EBITDA
|
13,352 | 13,189 | 41,540 | 39,615 | ||||||||||||
|
Clopay
Building Products
|
||||||||||||||||
|
Segment
operating income (loss)
|
4,269 | (9,376 | ) | (11,326 | ) | (17,444 | ) | |||||||||
|
Depreciation
and amortization
|
3,191 | 2,259 | 13,223 | 12,071 | ||||||||||||
|
Goodwill
write-off
|
- | 12,913 | - | 12,913 | ||||||||||||
|
Restructuring
charges
|
1,202 | 38 | 1,240 | 2,610 | ||||||||||||
|
Segment
adjusted EBITDA
|
8,662 | 5,834 | 3,137 | 10,150 | ||||||||||||
|
Clopay
Plastic Products
|
||||||||||||||||
|
Segment
operating income
|
7,178 | 4,765 | 24,072 | 20,620 | ||||||||||||
|
Depreciation
and amortization
|
5,682 | 5,698 | 21,930 | 22,638 | ||||||||||||
|
Segment
adjusted EBITDA
|
12,860 | 10,463 | 46,002 | 43,258 | ||||||||||||
|
All
segments:
|
||||||||||||||||
|
Income
from operations - as reported
|
16,416 | 679 | 25,147 | 12,044 | ||||||||||||
|
Unallocated
amounts
|
5,471 | 5,589 | 20,960 | 21,281 | ||||||||||||
|
Other,
net
|
905 | 188 | 1,522 | 2,713 | ||||||||||||
|
Segment
operating income
|
22,792 | 6,456 | 47,629 | 36,038 | ||||||||||||
|
Depreciation
and amortization
|
10,880 | 10,079 | 41,810 | 41,462 | ||||||||||||
|
Goodwill
write-off
|
- | 12,913 | - | 12,913 | ||||||||||||
|
Restructuring
charges
|
1,202 | 38 | 1,240 | 2,610 | ||||||||||||
|
Segment
adjusted EBITDA
|
$ | 34,874 | $ | 29,486 | $ | 90,679 | $ | 93,023 | ||||||||
Unallocated
amounts typically include general corporate expenses not attributable to any
reportable segment.
10