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): May
3, 2007
GRIFFON
CORPORATION
(Exact
Name of Registrant as Specified in Charter)
|
Delaware
|
1-06620
|
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
May 3,
2007, Griffon Corporation (the “Registrant”) issued a press release announcing
the Registrant’s financial results for the second fiscal quarter ended March 31,
2007. 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 May 3, 2007
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:
May
3, 2007
3
Exhibit
Index
|
99.1
|
Press
release, dated May 3, 2007
|
4
GRIFFON
CORPORATION ANNOUNCES OPERATING RESULTS
FOR
THE SECOND QUARTER OF FISCAL 2007
Jericho,
New York, May 3, 2007 - Griffon Corporation (NYSE:GFF) today reported operating
results for the second quarter of fiscal 2007. Net sales for the quarter ended
March 31, 2007 increased to $387,371,000 up from $366,151,000 for the second
quarter of fiscal 2006. Income before income taxes was $697,000 compared to
$11,468,000 last year. Net income was $255,000 in the current quarter compared
to $7,208,000 last year. Diluted earnings per share for the quarter was $.01
compared to $.23 in last year’s second quarter.
The
decline in sales and operating income in our garage door and installation
services segments was principally due to declines in sales volume. The Company
believes the sales volume decline is principally a result of the slowdown in
the
new home construction and home resale markets. Higher sales in the Specialty
Plastic Films segment primarily reflects higher unit volume in Europe and the
impact of foreign exchange partially offset by lower selling prices to our
major
customer and an unfavorable product mix. The decrease in operating income for
Specialty Plastic Films is primarily attributable to the selling price
concessions made to our major customer. The increase in sales and operating
income of Telephonics, the Company’s electronic information and communication
systems segment, was primarily attributable to the Syracuse Research Corporation
(SRC) contract and the MH60 program. Total funding for the SRC contract is
approaching $345 million with order fulfillment expected in the fourth
quarter.
Net
sales
for the six months ended March 31, 2007 were $821,686,000 compared to
$724,675,000 for the first six months of fiscal 2006. Income before income
taxes
for the six months was $15,055,000 compared to $22,261,000 last year. Net income
was $8,720,000 compared to $13,984,000 for the first half of 2006. Diluted
earnings per share for the six months was $.28 compared to $.45 last
year.
Cash
flow
used in operations was $14,700,000 for the quarter; capital expenditures were
$9,400,000 and funds used to acquire businesses were $17,100,000, all of which
were funded by existing cash balances and borrowings under the Company’s
revolving credit facility. Also, during the quarter $1,200,000 was used to
acquire 50,000 shares of the company's common stock under its buyback program.
Additional purchases will be made from time to time, depending on market
conditions, at prices deemed appropriate by management or under a Rule 10b5-1
trading plan.
The
Company is undertaking various operating actions
to address the current challenging market environment in the Building Products
segments. The Company has also retained Goldman, Sachs & Co to assist the
Company to evaluate the components of our business, our capital structure and
other potential strategic alternatives. No decision has been made by the Company
to pursue any specific course of action.
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
(Unaudited)
(IN
THOUSANDS)
|
PRELIMINARY
|
|||||||||||||
|
For
the Three Months Ended
|
For
the Six Months Ended
|
||||||||||||
|
March
31,
|
March
31,
|
||||||||||||
|
2007
|
2006
|
2007
|
2006
|
||||||||||
|
Net
sales:
|
|||||||||||||
|
Garage Doors
|
$
|
105,255
|
$
|
121,587
|
$
|
233,895
|
$
|
264,414
|
|||||
|
Installation Services
|
62,276
|
81,621
|
139,211
|
163,775
|
|||||||||
|
Specialty Plastic Films
|
99,730
|
95,869
|
203,385
|
182,042
|
|||||||||
|
Electronic Information and Communication Systems
|
124,164
|
71,617
|
254,014
|
124,298
|
|||||||||
|
Intersegment eliminations
|
(4,054
|
)
|
(4,543
|
)
|
(8,819
|
)
|
(9,854
|
)
|
|||||
|
$
|
387,371
|
$
|
366,151
|
$
|
821,686
|
$
|
724,675
|
||||||
|
Operating
income (loss):
|
|||||||||||||
|
Garage Doors
|
$
|
(4,556
|
)
|
$
|
3,637
|
$
|
(543
|
)
|
$
|
17,207
|
|||
|
Installation Services
|
(4,848
|
)
|
1,204
|
(5,741
|
)
|
4,014
|
|||||||
|
Specialty Plastic Films
|
4,939
|
8,910
|
9,277
|
7,274
|
|||||||||
|
Electronic Information and Communication Systems
|
12,430
|
4,751
|
25,351
|
7,718
|
|||||||||
|
Segment operating income
|
7,965
|
18,502
|
28,344
|
36,213
|
|||||||||
|
Unallocated
amounts
|
(4,968
|
)
|
(4,887
|
)
|
(8,665
|
)
|
(9,717
|
)
|
|||||
|
Interest
and other, net
|
(2,300
|
)
|
(2,147
|
)
|
(4,624
|
)
|
(4,235
|
)
|
|||||
|
Income before income taxes
|
$
|
697
|
$
|
11,468
|
$
|
15,055
|
$
|
22,261
|
|||||
CONSOLIDATED
STATEMENTS OF OPERATIONS
(IN
THOUSANDS EXCEPT FOR PER SHARE AMOUNTS)
|
PRELIMINARY
|
|||||||
|
FOR
THE THREE MONTHS ENDED
|
|||||||
|
MARCH
31,
|
|||||||
|
2007
|
2006
|
||||||
|
Net
sales
|
$
|
387,371
|
$
|
366,151
|
|||
|
Cost
of sales
|
305,853
|
275,898
|
|||||
|
Gross
profit
|
81,518
|
90,253
|
|||||
|
Selling,
general and administrative expenses
|
79,103
|
78,710
|
|||||
|
Income
from operations
|
2,415
|
11,543
|
|||||
|
Other
income (expense):
|
|||||||
|
Interest
expense
|
(3,052
|
)
|
(2,565
|
)
|
|||
|
Interest
income
|
752
|
418
|
|||||
|
Other,
net
|
582
|
2,072
|
|||||
|
(1,718
|
)
|
(75
|
)
|
||||
|
Income
before income taxes
|
697
|
11,468
|
|||||
|
Provision
(credit) for income taxes:
|
|||||||
|
Federal
|
(457
|
)
|
1,622
|
||||
|
State
and foreign
|
899
|
2,638
|
|||||
|
442
|
4,260
|
||||||
|
Net
income
|
$
|
255
|
$
|
7,208
|
|||
|
Basic
earnings per share of common stock:
|
$
|
.01
|
$
|
.24
|
|||
|
Diluted
earnings per share of common stock:
|
$
|
.01
|
$
|
.23
|
|||
|
Weighted
average number of shares outstanding:
|
|||||||
|
Basic
|
29,948,000
|
29,874,000
|
|||||
|
Diluted
|
31,166,000
|
31,103,000
|
|||||
GRIFFON
CORPORATION AND SUBSIDIARIES
CONSOLIDATED
STATEMENTS OF OPERATIONS
(IN
THOUSANDS EXCEPT FOR PER SHARE AMOUNTS)
|
PRELIMINARY
|
|||||||
|
FOR
THE SIX MONTHS ENDED
|
|||||||
|
MARCH
31,
|
|||||||
|
2007
|
2006
|
||||||
|
Net
sales
|
$
|
821,686
|
$
|
724,675
|
|||
|
Cost
of sales
|
646,964
|
545,253
|
|||||
|
Gross
profit
|
174,722
|
179,422
|
|||||
|
Selling,
general and administrative expenses
|
156,243
|
153,934
|
|||||
|
Income
from operations
|
18,479
|
25,488
|
|||||
|
Other
income (expense):
|
|||||||
|
Interest
expense
|
(5,996
|
)
|
(5,143
|
)
|
|||
|
Interest
income
|
1,372
|
908
|
|||||
|
Other,
net
|
1,200
|
1,008
|
|||||
|
(3,424
|
)
|
(3,227
|
)
|
||||
|
Income
before income taxes
|
15,055
|
22,261
|
|||||
|
Provision
for income taxes:
|
|||||||
|
Federal
|
3,999
|
4,429
|
|||||
|
State
and foreign
|
2,336
|
3,848
|
|||||
|
6,335
|
8,277
|
||||||
|
Net
income
|
$
|
8,720
|
$
|
13,984
|
|||
|
Basic
earnings per share of common stock:
|
$
|
.29
|
$
|
.47
|
|||
|
Diluted
earnings per share of common stock:
|
$
|
.28
|
$
|
.45
|
|||
|
Weighted
average number of shares outstanding:
|
|||||||
|
Basic
|
29,950,000
|
30,039,000
|
|||||
|
Diluted
|
31,117,000
|
31,302,000
|
|||||
GRIFFON
CORPORATION AND SUBSIDIARIES
CONSOLIDATED
BALANCE SHEETS
(IN
THOUSANDS)
|
PRELIMINARY
|
|||||||
|
MARCH
31,
|
SEPTEMBER
30,
|
||||||
|
2007
|
2006
|
||||||
|
ASSETS
|
|||||||
|
Current
Assets:
|
|||||||
|
Cash
and cash equivalents
|
$
|
34,374
|
$
|
22,389
|
|||
|
Accounts
receivable, net
|
212,484
|
247,172
|
|||||
|
Contract
costs and recognized income not yet billed
|
74,312
|
68,279
|
|||||
|
Inventories
|
174,426
|
165,089
|
|||||
|
Prepaid
expenses and other current assets
|
46,215
|
42,075
|
|||||
|
Total current assets
|
541,811
|
545,004
|
|||||
|
Property,
plant and equipment, at cost less
|
|||||||
|
depreciation
and amortization
|
235,663
|
231,975
|
|||||
|
Goodwill
|
110,286
|
99,540
|
|||||
|
Intangible
and other assets
|
67,894
|
51,695
|
|||||
|
$
|
955,654
|
$
|
928,214
|
||||
|
LIABILITIES
AND SHAREHOLDERS' EQUITY
|
|||||||
|
Current
Liabilities:
|
|||||||
|
Notes
payable and current portion of long-term debt
|
$
|
3,063
|
$
|
8,092
|
|||
|
Accounts
payable
|
107,155
|
128,104
|
|||||
|
Accrued
liabilities
|
72,642
|
81,672
|
|||||
|
Income
taxes
|
11,349
|
18,431
|
|||||
|
Total current liabilities
|
194,209
|
236,299
|
|||||
|
Long-term
debt:
|
|||||||
|
Convertible
subordinated notes
|
130,000
|
130,000
|
|||||
|
Other
|
121,475
|
79,228
|
|||||
|
Other
liabilities and deferred credits
|
77,365
|
70,242
|
|||||
|
Shareholders'
equity
|
432,605
|
412,445
|
|||||
|
$
|
955,654
|
$
|
928,214
|
||||
CONSOLIDATED
STATEMENTS OF CASH FLOWS
(IN
THOUSANDS)
|
|
|
|
|||||
|
PRELIMINARY
|
|
|
|||||
|
|
For
the Six Months Ended
|
||||||
|
|
March
31,
|
||||||
|
|
2007
|
2006
|
|||||
|
|
|
|
|||||
|
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|||||
|
Net
income
|
$
|
8,720
|
$
|
13,984
|
|||
|
Adjustments
to reconcile net income to net cash
|
|||||||
|
provided
by operating activities:
|
|||||||
|
Depreciation
and amortization
|
19,765
|
16,951
|
|||||
|
Stock
based compensation
|
1,303
|
870
|
|||||
|
Provision
for losses on accounts receivable
|
734
|
816
|
|||||
|
Change
in assets and liabilities:
|
|||||||
|
Decrease
in accounts receivable and contract
|
|||||||
|
costs
and recognized income not yet billed
|
32,828
|
812
|
|||||
|
Increase
in inventories
|
(6,658
|
)
|
(8,003
|
)
|
|||
|
(Increase)
decrease in prepaid expenses and other assets
|
(1,217
|
)
|
257
|
||||
|
Decrease
in accounts payable, accrued liabilities
|
|||||||
|
and
income taxes payable
|
(36,989
|
)
|
(17,121
|
)
|
|||
|
Other
changes, net
|
861
|
(32
|
)
|
||||
|
|
10,627
|
(5,450
|
)
|
||||
|
Net
cash provided by operating activities
|
19,347
|
8,534
|
|||||
|
|
|||||||
|
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
|||||||
|
Acquisition
of property, plant and equipment
|
(19,477
|
)
|
(13,442
|
)
|
|||
|
Acquisition
of minority interest in subsidiary
|
-
|
(1,304
|
)
|
||||
|
Acquired
businesses
|
(17,167
|
)
|
-
|
||||
|
Increase
in equipment lease deposits
|
(1,473
|
)
|
(4,463
|
)
|
|||
|
Funds
restricted for capital projects
|
(4,421
|
)
|
-
|
||||
|
Net
cash used in investing activities
|
(42,538
|
)
|
(19,209
|
)
|
|||
|
|
|||||||
|
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
|||||||
|
Purchase
of shares for treasury
|
(2,300
|
)
|
(15,573
|
)
|
|||
|
Proceeds
from issuance of long-term debt
|
42,891
|
60,000
|
|||||
|
Payments
of long-term debt
|
(482
|
)
|
(62,982
|
)
|
|||
|
Decrease
in short-term borrowings
|
(5,625
|
)
|
(1,181
|
)
|
|||
|
Exercise
of stock options
|
1,111
|
649
|
|||||
|
Tax
benefit from exercise of stock options
|
278
|
1,863
|
|||||
|
Distributions
to minority interest
|
-
|
(354
|
)
|
||||
|
Other,
net
|
(1,238
|
)
|
(607
|
)
|
|||
|
Net
cash provided by (used in) financing activities
|
34,635
|
(18,185
|
)
|
||||
|
|
|||||||
|
Effect
of exchange rate changes on cash and cash equivalents
|
541
|
68
|
|||||
|
|
|||||||
|
NET
INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS
|
11,985
|
(28,792
|
)
|
||||
|
CASH
AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
|
22,389
|
60,663
|
|||||
|
CASH
AND CASH EQUIVALENTS AT END OF PERIOD
|
$
|
34,374
|
$
|
31,871
|
|||