View:
Download DOC
Download PDF
Download XLS


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): February 2, 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 February 2, 2007, Griffon Corporation (the “Registrant”) issued a press release announcing the Registrant’s financial results for the first fiscal quarter ended December 31, 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 February 2, 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: February 2, 2007

3

Exhibit Index


 
99.1
Press release, dated February 2, 2007
 
 

GRIFFON CORPORATION ANNOUNCES OPERATING RESULTS
FOR THE FIRST QUARTER OF FISCAL 2007 AND ADDITIONAL AWARDS
FROM SYRACUSE RESEARCH CORPORATION - AWARDS TO DATE
APPROACH $330 MILLION

 
Jericho, New York, February 2, 2007 - Griffon Corporation (NYSE:GFF) today reported operating results for the first quarter of fiscal 2007, ended December 31, 2006. Net sales for the quarter increased to $434,315,000 up from $358,524,000 for the first quarter of fiscal 2006. Income before income taxes was $14,358,000 compared to $10,793,000 last year. Net income was $8,465,000 in the current quarter compared to $6,776,000 last year. Diluted earnings per share for the quarter was $.27 compared to $.22 in last year’s first quarter.
 
The sales increase in the first quarter was primarily attributable to the electronic information and communication systems segment (Telephonics), which achieved significant revenue growth, primarily as a result of the Syracuse Research Corporation contract. The Company announced incremental awards of an additional $23.3 Million in funding from SRCTec, Inc. (a wholly owned subsidiary of SRC) for turnkey production of a Counter Improvised Explosive Device. Telephonics has now received approximately $300 million of funding for the program and when all releases are definitized total value is expected to reach over $330 million. All awards should be complete on or before the fourth quarter of fiscal year 2007. SRCTec is a high-tech manufacturing company providing integrated solutions, program management, full life-cycle support, and state-of-the-art products to a broad range of customers. SRC is a national, independent, not-for-profit trusted advisor that researches next generation challenges and develops innovative solutions in the areas of defense, environment, and intelligence.
 
 
 
 
 
“We continue to collaborate with our customer, SRCTec, to ensure the success of the production aspect of this program critical to the force protection of our troops. The excellent performance and sustained achievements of this effort are unprecedented.” emphasized Mr. Donald C. Pastor, President Telephonics Electronic Systems. “We are excited about the future prospects regarding SRCTec’s leadership in technology and our combined success in the execution of the production requirements.”
 
The decline in revenue in the garage doors and installation services segments is primarily attributable to the slowdown in the housing market, both new home construction and the resale market. The increase in revenue in the specialty plastic films segment is attributable to higher unit volume and increased revenue to pass along the higher cost of resin, somewhat offset by selling price decreases.
 
The overall increase in operating income in the first quarter was reflective of the increased operating income at Telephonics. The decline in operating income in the garage doors and installation services segments is primarily attributable to the decline in sales volume. The increase in operating income in the specialty plastic films segment is attributable to the favorable impact of resin costs and unit volume increases somewhat offset by selling price decreases and production inefficiencies.
 
Cash flow from operations was $34 million for the quarter, which funded capital expenditures of $10.1 million. Also, during the quarter $1.1 million was used to acquire approximately 48,000 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.
 
 
 
 
 
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 and 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
 
   
December 31,
 
           
   
2006
  
2005
  
           
Net sales:
         
   Garage Doors
 
$
128,640
  
$
142,827
  
   Installation Services
   
76,935
   
82,154
 
   Specialty Plastic Films
   
103,655
   
86,173
 
   Electronic Information and Communication Systems
   
129,850
   
52,681
 
   Intersegment eliminations
   
(4,765
)
  
(5,311
)
   
$
434,315
  
$
358,524
  
Operating income:
             
   Garage Doors
 
$
4,013
  
$
13,570
  
   Installation Services
   
(893
)
  
2,810
 
   Specialty Plastic Films
   
4,338
   
(1,636
)
   Electronic Information and Communication Systems
   
12,921
   
2,967
 
     Segment operating income
   
20,379
   
17,711
 
Unallocated amounts
   
(3,697
)
  
(4,830
)
Interest and other, net
   
(2,324
)
  
(2,088
)
   Income before income taxes
 
$
14,358
  
$
10,793
  


 
 
 

CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS EXCEPT FOR PER SHARE AMOUNTS)
           
PRELIMINARY
          
   
FOR THE THREE MONTHS ENDED
 
   
DECEMBER 31,
 
   
2006
 
2005
 
Net sales
 
$
434,315
  
$
358,524
  
Cost of sales
   
341,111
   
269,355
 
    Gross profit
   
93,204
   
89,169
 
               
Selling, general and administrative expenses
   
77,140
   
75,224
 
    Income from operations
   
16,064
   
13,945
 
               
Other income (expense):
             
    Interest expense
   
(2,944
)
  
(2,578
)
    Interest income
   
620
   
490
 
    Other, net
   
618
   
(1,064
)
     
(1,706
)
  
(3,152
)
    Income before income taxes
   
14,358
   
10,793
 
               
Provision for income taxes:
             
    Federal
   
4,456
   
2,807
 
    State and foreign
   
1,437
   
1,210
 
     
5,893
   
4,017
 
               
    Net income
 
$
8,465
  
$
6,776
  
               
Basic earnings per share of common stock:
 
$
.28
  
$
.22
  
               
Diluted earnings per share of common stock:
 
$
.27
  
$
.22
  
Weighted average number of shares outstanding:
             
      Basic
   
29,952,000
   
30,205,000
 
      Diluted
   
31,067,000
   
31,502,000
 
               

 
 
 

CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
           
PRELIMINARY
          
   
DECEMBER 31,
  
SEPTEMBER 30,
  
   
2006
 
2006
 
ASSETS
         
           
Current Assets:
         
    Cash and cash equivalents
 
$
55,626
  
$
22,389
  
    Accounts receivable, net
   
202,521
   
247,172
 
    Contract costs and recognized income not yet billed
   
64,906
   
68,279
 
    Inventories
   
170,137
   
165,089
 
    Prepaid expenses and other current assets
   
44,012
   
42,075
 
       Total current assets
   
537,202
   
545,004
 
Property, plant and equipment, at cost less
             
    depreciation and amortization
   
235,749
   
231,975
 
Goodwill
   
101,586
   
99,540
 
Intangible and other assets
   
62,814
   
51,695
 
   
$
937,351
  
$
928,214
  
               
               
LIABILITIES AND SHAREHOLDERS' EQUITY
             
               
Current Liabilities:
             
    Notes payable and current portion of long-term debt
 
$
2,373
  
$
8,092
  
    Accounts payable
   
102,936
   
128,104
 
    Accrued liabilities
   
75,696
   
81,672
 
    Income taxes
   
21,850
   
18,431
 
       Total current liabilities
   
202,855
   
236,299
 
Long-term debt:
             
    Convertible subordinated notes
   
130,000
   
130,000
 
    Other
   
99,781
   
79,228
 
Other liabilities and deferred credits
   
76,695
   
70,242
 
Shareholders' equity
   
428,020
   
412,445
 
   
$
937,351
  
$
928,214
  


 
 
 

CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
           
PRELIMINARY
  
For the Three Months Ended
 
   
December 31,
 
   
2006
 
2005
 
   
 
  
 
  
CASH FLOWS FROM OPERATING ACTIVITIES:
         
Net income
 
$
8,465
  
$
6,776
  
    Adjustments to reconcile net income to net cash
             
      provided by operating activities:
             
      Depreciation and amortization
   
9,301
   
8,006
 
      Provision for losses on accounts receivable
   
382
   
374
 
    Change in assets and liabilities:
             
        Decrease in accounts receivable and contract  
              
          costs and recognized income not yet billed
   
48,547
   
11,473
 
        Increase in inventories
   
(4,020
)
  
(3,814
)
        Increase in prepaid expenses and other assets
   
(1,899
)
  
(682
)
        Decrease in accounts payable, accrued liabilities and income taxes payable
   
(27,678
)
  
(19,181
)
        Other changes, net
   
941
   
1,776
 
     
25,574
   
(2,048
)
          Net cash provided by operating activities
   
34,039
   
4,728
 
               
CASH FLOWS FROM INVESTING ACTIVITIES:
             
Acquisition of property, plant and equipment
   
(10,092
)
  
(4,690
)
Acquisition of minority interest in subsidiary
   
-
   
(1,304
)
(Increase) decrease in equipment lease deposits
   
500
   
(8
)
Funds restricted for capital projects
   
(4,347
)
  
-
 
          Net cash used in investing activities
   
(13,939
)
  
(6,002
)
               
CASH FLOWS FROM FINANCING ACTIVITIES:
             
Purchase of shares for treasury
   
(1,127
)
  
(10,262
)
Proceeds from issuance of long-term debt
   
20,891
   
60,000
 
Payments of long-term debt
   
(283
)
  
(62,699
)
Decrease in short-term borrowings
   
(6,044
)
  
(1,181
)
Exercise of stock options
   
387
   
66
 
Distributions to minority interest
   
-
   
(354
)
Tax benefit from exercise of stock options
   
156
   
1,679
 
Other, net
   
(1,041
)
  
(607
)
          Net cash provided by (used in) financing activities
   
12,939
   
(13,358
)
               
Effect of exchange rate changes on cash and cash equivalents
   
198
   
(71
)
               
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS        
    
33,237
   
(14,703
)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
   
22,389
   
60,663
 
CASH AND CASH EQUIVALENTS AT END OF PERIOD
 
$
55,626
  
$
45,960