Press Release
Griffon Corporation Announces Annual and Fourth Quarter Results
For the full year 2018, revenue from continuing operations totaled
For the full year 2018, Income from continuing operations totaled
For the full year 2018, Segment adjusted EBITDA from continuing
operations totaled
Fourth quarter revenue from continuing operations of
Fourth quarter Income from continuing operations totaled
Fourth quarter Segment adjusted EBITDA from continuing operations
totaled
Segment Operating Results
Home & Building Products
Revenue in 2018 totaled
Segment adjusted EBITDA for 2018 was
Revenue in the current quarter totaling
Fourth quarter Segment adjusted EBITDA was
Defense Electronics
Revenue in 2018 totaled
Segment adjusted EBITDA for 2018 was
Revenue in the current quarter totaled
Fourth quarter Segment adjusted EBITDA of
Contract backlog totaled
Taxes
The Company reported pretax income from continuing operations for the
years ended
Balance Sheet and Capital Expenditures
At
Share Repurchases
In each of
Conference Call Information
The Company will hold a conference call today,
The call can be accessed by dialing 1-877-407-0792 (U.S. participants)
or 1-201-689-8263 (International participants). Callers should ask to be
connected to the
A replay of the call will be available starting on
Forward-looking Statements
“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, industries in which Griffon operates and
About
Griffon currently conducts its operations through two reportable segments:
- HBP segment consists of two companies, AMES and CBP:
AMES, founded in 1774, is the leading U.S. manufacturer and a global provider of branded consumer and professional tools, landscaping products, and outdoor lifestyle solutions. In 2018, we acquired ClosetMaid, a leader in wood and wire closet organization, general living storage and wire garage storage products for homeowners and professionals.
CBP, since 1964, is a leading manufacturer and marketer of residential
and commercial garage doors and sells to professional dealers and some
of the largest home center retail chains in
-
Defense Electronics segment consists of
Telephonics Corporation ("Telephonics"), founded in 1933, a globally recognized leading provider of highly sophisticated intelligence, surveillance and communications solutions for defense, aerospace and commercial customers.
For more information on Griffon and its operating subsidiaries, please see the Company’s website at www.griffon.com.
Griffon evaluates performance and allocates resources based on each segment's operating results from continuing operations before interest income and expense, income taxes, depreciation and amortization, unallocated amounts (mainly corporate overhead), restructuring charges, loss on debt extinguishment and acquisition related expenses, as well as other items that may affect comparability, as applicable (“Segment adjusted EBITDA”, a non-GAAP measure). Griffon believes this information is useful to investors.
The following table provides a reconciliation of Segment adjusted EBITDA to Income before taxes from continuing operations:
GRIFFON CORPORATION AND SUBSIDIARIES | ||||||||||||||||
OPERATING HIGHLIGHTS | ||||||||||||||||
(in thousands) | ||||||||||||||||
(Unaudited) |
For the Twelve Months |
|||||||||||||||
REVENUE | 2018 | 2017 | 2018 | 2017 | ||||||||||||
Home & Building Products: | ||||||||||||||||
AMES | $ | 216,276 | $ | 125,506 | $ | 953,612 | $ | 545,269 | ||||||||
CBP | 227,898 | 161,564 | 697,969 | 568,001 | ||||||||||||
Home & Building Products | 444,174 | 287,070 | 1,651,581 | 1,113,270 | ||||||||||||
Defense Electronics |
101,331 | 143,729 | 326,337 | 411,727 | ||||||||||||
Total revenue | $ | 545,505 | $ | 430,799 | $ | 1,977,918 | $ | 1,524,997 | ||||||||
Home & Building Products | $ | 48,150 | $ | 34,260 | $ | 177,400 | $ | 126,766 | ||||||||
Defense Electronics |
19,107 | 19,253 | 36,063 | 45,931 | ||||||||||||
Total Segment adjusted EBITDA from continuing operations | 67,257 | 53,513 | 213,463 | 172,697 | ||||||||||||
Net interest expense | (15,389 | ) | (12,793 | ) | (63,871 | ) | (51,449 | ) | ||||||||
Segment depreciation and amortization | (15,356 | ) | (11,396 | ) | (55,334 | ) | (47,398 | ) | ||||||||
Unallocated amounts | (12,819 | ) | (11,019 | ) | (45,812 | ) | (42,398 | ) | ||||||||
Acquisition costs | — | (9,617 | ) | (7,597 | ) | (9,617 | ) | |||||||||
Special dividend ESOP charges | — | — | (3,220 | ) | — | |||||||||||
Secondary equity offering costs | — | — | (1,205 | ) | — | |||||||||||
Cost of life insurance benefits | — | — | (2,614 | ) | — | |||||||||||
Contract settlement charges | — | (5,137 | ) | — | (5,137 | ) | ||||||||||
Income before taxes from continuing operations | $ | 23,693 | $ | 3,551 | $ | 33,810 | $ | 16,698 | ||||||||
The following is a reconciliation of each segment's operating results to Segment adjusted EBITDA:
GRIFFON CORPORATION AND SUBSIDIARIES | ||||||||||||||||
RECONCILIATION OF NON-GAAP MEASURES | ||||||||||||||||
FROM CONTINUING OPERATIONS | ||||||||||||||||
BY REPORTABLE SEGMENT | ||||||||||||||||
(in thousands) | ||||||||||||||||
(Unaudited) |
For the Twelve Months Ended |
|||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Home & Building Products | ||||||||||||||||
Segment operating profit | $ | 35,505 | $ | 24,834 | $ | 130,487 | $ | 89,495 | ||||||||
Depreciation and amortization | 12,645 | 8,702 | 44,533 | 36,547 | ||||||||||||
Acquisition costs | — | 724 | 2,380 | 724 | ||||||||||||
Segment adjusted EBITDA | $ | 48,150 | $ | 34,260 | $ | 177,400 | $ | 126,766 | ||||||||
Defense Electronics |
||||||||||||||||
Segment operating profit | $ | 16,396 | $ | 11,422 | $ | 25,262 | $ | 29,943 | ||||||||
Depreciation and amortization | 2,711 | 2,694 | 10,801 | 10,851 | ||||||||||||
Contract settlement charges | — | 5,137 | — | 5,137 | ||||||||||||
Segment adjusted EBITDA | $ | 19,107 | $ | 19,253 | $ | 36,063 | $ | 45,931 | ||||||||
All segments: | ||||||||||||||||
Income from continuing operations - as reported | $ | 39,117 | $ | 16,803 | $ | 96,450 | $ | 69,027 | ||||||||
Unallocated amounts | 12,819 | 11,019 | 45,812 | 42,398 | ||||||||||||
Other, net | (35 | ) | (459 | ) | 1,231 | (880 | ) | |||||||||
Corporate acquisition costs | — | 8,893 | 5,217 | 8,893 | ||||||||||||
Special dividend ESOP charges | — | — | 3,220 | — | ||||||||||||
Secondary equity offering costs | — | — | 1,205 | — | ||||||||||||
Cost of life insurance benefit | — | — | 2,614 | — | ||||||||||||
Segment operating profit from continuing operations | 51,901 | 36,256 | 155,749 | 119,438 | ||||||||||||
Segment depreciation and amortization | 15,356 | 11,396 | 55,334 | 47,398 | ||||||||||||
Acquisition costs | — | 724 | 2,380 | 724 | ||||||||||||
Contract settlement charges | — | 5,137 | — | 5,137 | ||||||||||||
Segment adjusted EBITDA from continuing operations | $ | 67,257 | $ | 53,513 | $ | 213,463 | $ | 172,697 | ||||||||
Unallocated amounts typically include general corporate expenses not attributable to any reportable segment.
GRIFFON CORPORATION AND SUBSIDIARIES | ||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND | ||||||||||||||||
COMPREHENSIVE INCOME | ||||||||||||||||
(in thousands, except per share data) | ||||||||||||||||
(Unaudited) |
For the Twelve Months |
|||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Revenue | $ | 545,505 | $ | 430,799 | $ | 1,977,918 | $ | 1,524,997 | ||||||||
Cost of goods and services | 397,054 | 316,279 | 1,448,358 | 1,116,881 | ||||||||||||
Gross profit | 148,451 | 114,520 | 529,560 | 408,116 | ||||||||||||
Selling, general and administrative expenses | 109,334 | 97,717 | 433,110 | 339,089 | ||||||||||||
Income from continuing operations | 39,117 | 16,803 | 96,450 | 69,027 | ||||||||||||
Other income (expense) | ||||||||||||||||
Interest expense | (15,595 | ) | (12,819 | ) | (65,568 | ) | (51,513 | ) | ||||||||
Interest income | 206 | 26 | 1,697 | 64 | ||||||||||||
Other, net | (35 | ) | (459 | ) | 1,231 | (880 | ) | |||||||||
Total other income (expense) | (15,424 | ) | (13,252 | ) | (62,640 | ) | (52,329 | ) | ||||||||
Income before taxes from continuing operations | 23,693 | 3,551 | 33,810 | 16,698 | ||||||||||||
Provision (benefit) for income taxes | 22,662 | (786 | ) | 555 | (1,085 | ) | ||||||||||
Income from continuing operations | $ | 1,031 | $ | 4,337 | $ | 33,255 | $ | 17,783 | ||||||||
Discontinued operations: | ||||||||||||||||
Income (loss) from operations of discontinued businesses | (4,661 | ) | 637 | 119,981 | 22,276 | |||||||||||
Provision (benefit) for income taxes | (2,212 | ) | 16,924 | 27,558 | 25,147 | |||||||||||
Income (loss) from discontinued operations | (2,449 | ) | (16,287 | ) | 92,423 | (2,871 | ) | |||||||||
Net income (loss) | $ | (1,418 | ) | $ | (11,950 | ) | $ | 125,678 | $ | 14,912 | ||||||
Income from continuing operations | $ | 0.03 | $ | 0.10 | $ | 0.81 | $ | 0.43 | ||||||||
Income (loss) from discontinued operations | (0.06 | ) | (0.39 | ) | 2.25 | (0.07 | ) | |||||||||
Basic earnings (loss) per common share | $ | (0.04 | ) | $ | (0.29 | ) | $ | 3.06 | $ | 0.36 | ||||||
Weighted-average shares outstanding | 40,326 | 41,726 | 41,005 | 41,005 | ||||||||||||
Income from continuing operations | $ | 0.02 | $ | 0.10 | $ | 0.78 | $ | 0.41 | ||||||||
Income (loss) from discontinued operations | (0.06 | ) | (0.39 | ) | 2.18 | (0.07 | ) | |||||||||
Diluted earnings (loss) per common share | $ | (0.04 | ) | $ | (0.29 | ) | $ | 2.96 | $ | 0.35 | ||||||
Weighted-average shares outstanding | 40,326 | 41,726 | 42,422 | 43,011 | ||||||||||||
Net income (loss) | $ | (1,418 | ) | $ | (11,950 | ) | $ | 125,678 | $ | 14,912 | ||||||
Other comprehensive income (loss), net of taxes: | ||||||||||||||||
Foreign currency translation adjustments | 114 | 9,323 | 9,403 | 10,667 | ||||||||||||
Pension and other post retirement plans | 6,328 | 7,571 | 16,381 | 9,203 | ||||||||||||
Gain (loss) on cash flow hedge | (27 | ) | 89 | 585 | 890 | |||||||||||
Total other comprehensive income, net of taxes | 6,415 | 16,983 | 26,369 | 20,760 | ||||||||||||
Comprehensive income | $ | 4,997 | $ | 5,033 | $ | 152,047 | $ | 35,672 | ||||||||
GRIFFON CORPORATION AND SUBSIDIARIES | ||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
(in thousands) | ||||||||
At September 30, |
At September 30, |
|||||||
CURRENT ASSETS | ||||||||
Cash and equivalents | $ | 69,758 | $ | 47,681 | ||||
Accounts receivable, net of allowances of $6,408 and $5,966 | 280,509 | 208,229 | ||||||
Contract costs and recognized income not yet billed, net of progress payments of $3,172 and $4,407 | 121,803 | 131,662 | ||||||
Inventories | 398,359 | 299,437 | ||||||
Prepaid and other current assets | 42,121 | 40,067 | ||||||
Assets of discontinued operations held for sale | — | 370,724 | ||||||
Assets of discontinued operations not held for sale | 324 | 329 | ||||||
Total Current Assets | 912,874 | 1,098,129 | ||||||
PROPERTY, PLANT AND EQUIPMENT, net | 342,492 | 232,135 | ||||||
GOODWILL | 439,395 | 319,139 | ||||||
INTANGIBLE ASSETS, net | 370,858 | 205,127 | ||||||
OTHER ASSETS | 16,355 | 16,051 | ||||||
ASSETS OF DISCONTINUED OPERATIONS | 2,916 | 2,960 | ||||||
Total Assets | $ | 2,084,890 | $ | 1,873,541 | ||||
CURRENT LIABILITIES | ||||||||
Notes payable and current portion of long-term debt | $ | 13,011 | $ | 11,078 | ||||
Accounts payable | 233,658 | 183,951 | ||||||
Accrued liabilities | 139,192 | 83,258 | ||||||
Liabilities of discontinued operations held for sale | — | 84,450 | ||||||
Liabilities of discontinued operations | 7,210 | 8,342 | ||||||
Total Current Liabilities | 393,071 | 371,079 | ||||||
LONG-TERM DEBT, net | 1,108,071 | 968,080 | ||||||
OTHER LIABILITIES | 106,710 | 132,537 | ||||||
LIABILITIES OF DISCONTINUED OPERATIONS | 2,647 | 3,037 | ||||||
Total Liabilities | 1,610,499 | 1,474,733 | ||||||
COMMITMENTS AND CONTINGENCIES | ||||||||
SHAREHOLDERS’ EQUITY | ||||||||
Preferred stock, par value $0.25 per share, authorized 3,000 shares, no shares issued | — | — | ||||||
Common stock, par value $0.25 per share, authorized 85,000 shares, |
20,380 | 20,166 | ||||||
Capital in excess of par value | 503,396 | 487,077 | ||||||
Retained earnings | 550,523 | 480,347 | ||||||
Treasury shares, at cost, 35,846 common shares and 33,557 common shares | (534,830 | ) | (489,225 | ) | ||||
Accumulated other comprehensive loss | (34,112 | ) | (60,481 | ) | ||||
Deferred compensation | (30,966 | ) | (39,076 | ) | ||||
Total Shareholders’ Equity | 474,391 | 398,808 | ||||||
Total Liabilities and Shareholders’ Equity | $ | 2,084,890 | $ | 1,873,541 | ||||
GRIFFON CORPORATION AND SUBSIDIARIES | ||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||||
(in thousands) | ||||||||||||
Years Ended September 30, | ||||||||||||
2018 | 2017 | 2016 | ||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES - CONTINUING OPERATIONS: | ||||||||||||
Net income | $ | 125,678 | $ | 14,912 | $ | 30,010 | ||||||
Net (income) loss from discontinued operations | (92,423 | ) | 2,871 | (10,229 | ) | |||||||
Adjustments to reconcile net income to net cash provided by operating activities of continuing operations: | ||||||||||||
Depreciation and amortization | 55,803 | 47,878 | 46,342 | |||||||||
Stock-based compensation | 10,078 | 8,090 | 10,136 | |||||||||
Provision for losses on accounts receivable | 96 | 271 | 351 | |||||||||
Amortization of deferred financing costs and debt discounts | 5,219 | 4,511 | 7,321 | |||||||||
Deferred income tax | (17,633 | ) | 2,341 | 6,044 | ||||||||
Gain (loss) on sale/disposal of assets and investments | 290 | (126 | ) | (319 | ) | |||||||
Change in assets and liabilities, net of assets and liabilities acquired: | ||||||||||||
(Increase) decrease in accounts receivable and contract costs and recognized income not yet billed | 2,681 | (19,131 | ) | (35,933 | ) | |||||||
(Increase) decrease in inventories | (52,122 | ) | (29,299 | ) | 16,103 | |||||||
(Increase) decrease in prepaid and other assets | 5,969 | (4,781 | ) | 1,462 | ||||||||
Increase in accounts payable, accrued liabilities and income taxes payable | 11,078 | 17,541 | 4,829 | |||||||||
Other changes, net | 11,732 | 4,073 | 4,001 | |||||||||
Net cash provided by operating activities - continuing operations | 66,446 | 49,151 | 80,118 | |||||||||
CASH FLOWS FROM INVESTING ACTIVITIES - CONTINUING OPERATIONS: | ||||||||||||
Acquisition of property, plant and equipment | (50,138 | ) | (34,937 | ) | (59,276 | ) | ||||||
Acquired business, net of cash acquired | (430,932 | ) | (34,719 | ) | (4,470 | ) | ||||||
Investment sales (purchases) | — | (1,824 | ) | 715 | ||||||||
Proceeds from sale of business | 474,727 | — | — | |||||||||
Proceeds from sale of property, plant and equipment | 663 | 143 | 770 | |||||||||
Net cash used in investing activities - continuing operations | (5,680 | ) | (71,337 | ) | (62,261 | ) | ||||||
CASH FLOWS FROM FINANCING ACTIVITIES - CONTINUING OPERATIONS: | ||||||||||||
Dividends paid | (49,797 | ) | (10,325 | ) | (8,798 | ) | ||||||
Purchase of shares for treasury | (45,605 | ) | (15,841 | ) | (65,307 | ) | ||||||
Proceeds from long-term debt | 443,058 | 233,443 | 302,362 | |||||||||
Payments of long-term debt | (300,993 | ) | (170,454 | ) | (208,514 | ) | ||||||
Change in short-term borrowings | 144 | — | — | |||||||||
Share premium payment on settled debt | — | (24,997 | ) | — | ||||||||
Financing costs | (7,793 | ) | (1,548 | ) | (4,384 | ) | ||||||
Purchase of ESOP shares | — | (10,908 | ) | — | ||||||||
Other, net | 51 | (70 | ) | 55 | ||||||||
Net cash provided by (used) in financing activities - continuing operations | 39,065 | (700 | ) | 15,414 | ||||||||
CASH FLOWS FROM DISCONTINUED OPERATIONS: | ||||||||||||
Net cash provided by (used in) operating activities | (45,624 | ) | 47,193 | 24,264 | ||||||||
Net cash used in investing activities | (10,762 | ) | (45,075 | ) | (31,343 | ) | ||||||
Net cash provided by (used in) financing activities | (22,541 | ) | (4,268 | ) | (6,526 | ) | ||||||
Net cash provided by (used in) discontinued operations | (78,927 | ) | (2,150 | ) | (13,605 | ) | ||||||
Effect of exchange rate changes on cash and equivalents | 1,173 | 164 | 886 | |||||||||
NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS | 22,077 | (24,872 | ) | 20,552 | ||||||||
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD | 47,681 | 72,553 | 52,001 | |||||||||
CASH AND EQUIVALENTS AT END OF PERIOD | $ | 69,758 | $ | 47,681 | $ | 72,553 | ||||||
Supplemental Disclosure of Cash Flow Information: | ||||||||||||
Cash paid for interest | $ | 59,793 | $ | 48,137 | $ | 43,208 | ||||||
Cash paid for taxes | 32,140 | 20,998 | 3,431 | |||||||||
Griffon evaluates performance based on Earnings per share and Net income excluding restructuring charges, loss on debt extinguishment, acquisition related expenses, discrete and certain other tax items, as well other items that may affect comparability, as applicable. Griffon believes this information is useful to investors. The following tables provides a reconciliation of Income from continuing operations to Adjusted income from continuing operations and Earnings per common share from continuing operations to Adjusted earnings per common share from continuing operations:
GRIFFON CORPORATION AND SUBSIDIARIES | ||||||||||||||||
RECONCILIATION OF INCOME FROM CONTINUING OPERATIONS | ||||||||||||||||
TO ADJUSTED INCOME FROM CONTINUING OPERATIONS | ||||||||||||||||
(in thousands, except per share data) | ||||||||||||||||
For the Three Months |
For the Twelve Months |
|||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Income from continuing operations | $ | 1,031 | $ | 4,337 | $ | 33,255 | $ | 17,783 | ||||||||
Adjusting items, net of tax: | ||||||||||||||||
Acquisition costs | — | 6,145 | 5,047 | 6,145 | ||||||||||||
Contract settlement charges | — | 3,300 | — | 3,300 | ||||||||||||
Special dividend ESOP charges | — | — | 2,125 | — | ||||||||||||
Secondary equity offering costs | — | — | 795 | — | ||||||||||||
Cost of life insurance benefit | — | — | 248 | — | ||||||||||||
Discrete and other certain tax provisions (benefits) | 14,696 | (1,769 | ) | (9,384 | ) | (8,274 | ) | |||||||||
Adjusted income from continuing operations | $ | 15,727 | $ | 12,013 | $ | 32,086 | $ | 18,954 | ||||||||
Earnings per common share from continuing operations | $ | 0.02 | $ | 0.10 | $ | 0.78 | $ | 0.41 | ||||||||
Adjusting items, net of tax: | ||||||||||||||||
Acquisition costs | — | 0.14 | 0.12 | 0.14 | ||||||||||||
Contract settlement charges | — | 0.08 | — | 0.08 | ||||||||||||
Special dividend ESOP charges | — | — | 0.05 | — | ||||||||||||
Secondary equity offering costs | — | — | 0.02 | — | ||||||||||||
Cost of life insurance benefit | — | — | 0.01 | — | ||||||||||||
Discrete and other certain tax provisions (benefits) | 0.35 | (0.04 | ) | (0.22 | ) | (0.19 | ) | |||||||||
Adjusted earnings per share from continuing operations | $ | 0.38 | $ | 0.28 | $ | 0.76 | $ | 0.44 | ||||||||
Weighted-average shares outstanding (in thousands) | 41,797 | 43,237 | 42,422 | 43,011 | ||||||||||||
Note: Due to rounding, the sum of earnings per common share and adjusting items, net of tax, may not equal adjusted earnings per common share.
View source version on businesswire.com: https://www.businesswire.com/news/home/20181114005881/en/
Source:
Company:
Brian G. Harris
SVP &
Chief Financial Officer
Griffon Corporation
(212) 957-5000
Investor Relations:
Michael Callahan
Senior
Vice President
ICR Inc.
(203) 682-8311