Press Release
Griffon Corporation Announces First Quarter Results
Revenue was
Segment adjusted EBITDA was
Net income was
Segment Operating Results
Home & Building Products
Revenue was
Segment adjusted EBITDA was
On
Telephonics
Revenue was
Segment adjusted EBITDA was
Contract backlog was
Plastic Products
Revenue was
Segment adjusted EBITDA was
Taxes
The effective tax rate for the quarter ended December 31, 2016 was 5.5% compared to 19.2% in the comparable prior year quarter.
The
Balance Sheet and Capital Expenditures
At
On
Share Repurchases
In each of
From
Conference Call Information
The Company will hold a conference call today,
The call can be accessed by dialing 1-888-455-2308 (U.S. participants)
or 1-719-325-2390 (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 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 in connection with 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.
Headquartered in
Griffon currently conducts its operations through three reportable segments:
-
Home & Building Products consists of two companies, AMES and CBP:
- AMES, founded in 1774, is the leading U.S. manufacturer and a global provider of long-handled tools and landscaping 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
North America .
- Telephonics, founded in 1933, is recognized globally as a leading provider of highly sophisticated intelligence, surveillance and communications solutions for defense, aerospace and commercial customers.
- PPC, incorporated in 1934, is a global leader in the development and production of embossed, laminated and printed specialty plastic films for hygienic, health-care and industrial products and sells to some of the world's largest consumer products companies.
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 before interest income and expense, income taxes, depreciation and amortization, unallocated amounts (mainly corporate overhead) and restructuring charges, 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:
GRIFFON CORPORATION AND SUBSIDIARIES |
|||||||||
For the Three Months Ended December 31, | |||||||||
REVENUE | 2016 | 2015 | |||||||
Home & Building Products: | |||||||||
AMES | $ | 120,724 | $ | 118,290 | |||||
CBP | 143,460 | 142,908 | |||||||
Home & Building Products | 264,184 | 261,198 | |||||||
Telephonics | 88,093 | 109,037 | |||||||
PPC | 114,823 | 123,914 | |||||||
Total consolidated net sales | $ | 467,100 | $ | 494,149 | |||||
Segment adjusted EBITDA: | |||||||||
Home & Building Products | $ | 31,807 | $ | 29,829 | |||||
Telephonics | 8,108 | 10,344 | |||||||
PPC | 14,437 | 11,785 | |||||||
Total Segment adjusted EBITDA | 54,352 | 51,958 | |||||||
Net interest expense | (13,367 | ) | (12,012 | ) | |||||
Segment depreciation and amortization | (18,290 | ) | (16,969 | ) | |||||
Unallocated amounts | (9,719 | ) | (9,628 | ) | |||||
Income before taxes | $ | 12,976 | $ | 13,349 | |||||
The following is a reconciliation of each segment's operating results to Segment adjusted EBITDA:
GRIFFON CORPORATION AND SUBSIDIARIES |
||||||||
Three Months Ended December 31, | ||||||||
2016 | 2015 | |||||||
Home & Building Products | ||||||||
Segment operating profit | $ | 22,640 | $ | 21,159 | ||||
Depreciation and amortization | 9,167 | 8,670 | ||||||
Segment adjusted EBITDA | 31,807 | 29,829 | ||||||
Telephonics | ||||||||
Segment operating profit | 5,391 | 7,813 | ||||||
Depreciation and amortization | 2,717 | 2,531 | ||||||
Segment adjusted EBITDA | 8,108 | 10,344 | ||||||
Clopay Plastic Products | ||||||||
Segment operating profit | 8,031 | 6,017 | ||||||
Depreciation and amortization | 6,406 | 5,768 | ||||||
Segment adjusted EBITDA | 14,437 | 11,785 | ||||||
All segments: | ||||||||
Income from operations - as reported | 26,385 | 24,806 | ||||||
Unallocated amounts | 9,719 | 9,628 | ||||||
Other, net | (42 | ) | 555 | |||||
Segment operating profit | 36,062 | 34,989 | ||||||
Depreciation and amortization | 18,290 | 16,969 | ||||||
Segment adjusted EBITDA | $ | 54,352 | $ | 51,958 | ||||
Unallocated amounts typically include general corporate expenses not attributable to any reportable segment.
GRIFFON CORPORATION AND SUBSIDIARIES |
|||||||||
Three Months Ended December 31, | |||||||||
2016 | 2015 | ||||||||
Revenue | $ | 467,100 | $ | 494,149 | |||||
Cost of goods and services | 350,972 | 378,044 | |||||||
Gross profit | 116,128 | 116,105 | |||||||
Selling, general and administrative expenses | 89,743 | 91,299 | |||||||
Income from operations | 26,385 | 24,806 | |||||||
Other income (expense) | |||||||||
Interest expense | (13,373 | ) | (12,023 | ) | |||||
Interest income | 6 | 11 | |||||||
Other, net | (42 | ) | 555 | ||||||
Total other expense, net | (13,409 | ) | (11,457 | ) | |||||
Income before taxes | 12,976 | 13,349 | |||||||
Provision for income taxes | 712 | 2,561 | |||||||
Net income | $ | 12,264 | $ | 10,788 | |||||
Basic income per common share | $ | 0.31 | $ | 0.26 | |||||
Weighted-average shares outstanding | 39,336 | 41,968 | |||||||
Diluted income per common share | $ | 0.29 | $ | 0.24 | |||||
Weighted-average shares outstanding | 42,312 | 45,384 | |||||||
Net income | $ | 12,264 | $ | 10,788 | |||||
Other comprehensive income (loss), net of taxes: | |||||||||
Foreign currency translation adjustments | (13,479 | ) | (3,349 | ) | |||||
Pension and other post retirement plans | 544 | 386 | |||||||
Change in cash flow hedges | 1,623 | (1,015 | ) | ||||||
Total other comprehensive income (loss), net of taxes | (11,312 | ) | (3,978 | ) | |||||
Comprehensive income (loss), net | $ | 952 | $ | 6,810 | |||||
GRIFFON CORPORATION AND SUBSIDIARIES |
|||||||
(Unaudited) |
At September 30, |
||||||
CURRENT ASSETS | |||||||
Cash and equivalents | $ | 52,269 | $ | 72,553 | |||
Accounts receivable, net of allowances of $6,677 and $6,452 | 228,025 | 233,751 | |||||
Contract costs and recognized income not yet billed, net of progress payments of $7,145 and $8,001 | 108,572 | 126,961 | |||||
Inventories, net | 323,192 | 308,869 | |||||
Prepaid and other current assets | 41,410 | 38,605 | |||||
Assets of discontinued operations | 218 | 219 | |||||
Total Current Assets | 753,686 | 780,958 | |||||
PROPERTY, PLANT AND EQUIPMENT, net | 400,151 | 405,404 | |||||
GOODWILL | 357,507 | 361,185 | |||||
INTANGIBLE ASSETS, net | 210,251 | 210,599 | |||||
OTHER ASSETS | 21,634 | 21,982 | |||||
ASSETS OF DISCONTINUED OPERATIONS | 1,960 | 1,968 | |||||
Total Assets | $ | 1,745,189 | $ | 1,782,096 | |||
CURRENT LIABILITIES | |||||||
Notes payable and current portion of long-term debt | $ | 26,347 | $ | 22,644 | |||
Accounts payable | 161,140 | 190,341 | |||||
Accrued liabilities | 95,594 | 103,594 | |||||
Liabilities of discontinued operations | 1,498 | 1,684 | |||||
Total Current Liabilities | 284,579 | 318,263 | |||||
LONG-TERM DEBT, net | 938,673 | 913,914 | |||||
OTHER LIABILITIES | 130,818 | 137,266 | |||||
LIABILITIES OF DISCONTINUED OPERATIONS | 2,098 | 1,706 | |||||
Total Liabilities | 1,356,168 | 1,371,149 | |||||
COMMITMENTS AND CONTINGENCIES | |||||||
SHAREHOLDERS’ EQUITY | |||||||
Total Shareholders’ Equity | 389,021 | 410,947 | |||||
Total Liabilities and Shareholders’ Equity | $ | 1,745,189 | $ | 1,782,096 | |||
GRIFFON CORPORATION AND SUBSIDIARIES |
||||||||
Three Months Ended December 31, | ||||||||
2016 | 2015 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
Net income | $ | 12,264 | $ | 10,788 | ||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||||||||
Depreciation and amortization | 18,394 | 17,084 | ||||||
Stock-based compensation | 2,452 | 3,066 | ||||||
Provision for losses on accounts receivable | 118 | (24 | ) | |||||
Amortization of debt discounts and issuance costs | 1,915 | 1,671 | ||||||
Deferred income taxes | (196 | ) | 2,763 | |||||
Gain on sale of assets and investments | (103 | ) | (77 | ) | ||||
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 | 21,459 | (6,106 | ) | |||||
Increase in inventories | (16,253 | ) | (9,080 | ) | ||||
(Increase) decrease in prepaid and other assets | (2,637 | ) | 316 | |||||
Decrease in accounts payable, accrued liabilities and income taxes payable | (31,475 | ) | (38,324 | ) | ||||
Other changes, net | 1,616 | 519 | ||||||
Net cash provided by (used in) operating activities | 7,554 | (17,404 | ) | |||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
Acquisition of property, plant and equipment | (22,478 | ) | (25,018 | ) | ||||
Acquired businesses, net of cash acquired | (6,051 | ) | — | |||||
Investment in unconsolidated joint venture | — | (2,726 | ) | |||||
Proceeds from sale of assets | 118 | 484 | ||||||
Investment sales | — | 715 | ||||||
Net cash used in investing activities | (28,411 | ) | (26,545 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
Dividends paid | (2,499 | ) | (2,281 | ) | ||||
Purchase of shares for treasury | (15,073 | ) | (10,910 | ) | ||||
Proceeds from long-term debt | 39,056 | 79,874 | ||||||
Payments of long-term debt | (8,827 | ) | (24,126 | ) | ||||
Change in short-term borrowings | (702 | ) | (147 | ) | ||||
Financing costs | (172 | ) | — | |||||
Purchase of ESOP shares | (9,213 | ) | — | |||||
Other, net | (349 | ) | 203 | |||||
Net cash provided by financing activities | 2,221 | 42,613 | ||||||
CASH FLOWS FROM DISCONTINUED OPERATIONS: | ||||||||
Net cash used in operating activities | (430 | ) | (387 | ) | ||||
Net cash used in discontinued operations | (430 | ) | (387 | ) | ||||
Effect of exchange rate changes on cash and equivalents | (1,218 | ) | (310 | ) | ||||
NET DECREASE IN CASH AND EQUIVALENTS | (20,284 | ) | (2,033 | ) | ||||
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD | 72,553 | 52,001 | ||||||
CASH AND EQUIVALENTS AT END OF PERIOD | $ | 52,269 | $ | 49,968 | ||||
Griffon evaluates performance based on Earnings per share and Net income excluding restructuring charges, and discrete and certain other tax items, as applicable. Griffon believes this information is useful to investors. The following table provides a reconciliation of Net income to adjusted net income and earnings per share to Adjusted earnings per share:
GRIFFON CORPORATION AND SUBSIDIARIES |
|||||||||
For the Three Months Ended December 31, | |||||||||
2016 | 2015 | ||||||||
Net income | $ | 12,264 | $ | 10,788 | |||||
Adjusting items, net of tax: | |||||||||
Discrete and certain other tax provisions (benefits) | (4,263 | ) | (2,591 | ) | |||||
Adjusted net income | $ | 8,001 | $ | 8,197 | |||||
Diluted income per common share | $ | 0.29 | $ | 0.24 | |||||
Adjusting items, net of tax: | |||||||||
Discrete and certain other tax provisions (benefits) | (0.10 | ) | (0.06 | ) | |||||
Adjusted earnings per common share | $ | 0.19 | $ | 0.18 | |||||
Weighted-average shares outstanding (in thousands) | 42,312 | 45,384 | |||||||
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: http://www.businesswire.com/news/home/20170131005387/en/
Source:
Griffon Corporation:
Brian G. Harris, 212-957-5000
SVP & Chief
Financial Officer
or
Investor Relations:
ICR Inc.
Michael
Callahan, 203-682-8311
Senior Vice President