Press Release
Griffon Corporation Announces First Quarter Results
Revenue totaled
Segment adjusted EBITDA totaled
Net income totaled
Segment Operating Results
Home & Building Products
Revenue totaled
Segment adjusted EBITDA was
HBP recognized
Telephonics
Revenue totaled
Segment adjusted EBITDA was
Contract backlog totaled
Plastic Products
Revenue totaled
Segment adjusted EBITDA was
Taxes
The effective tax rate for the quarter ended
The quarter ended
Excluding discrete items, the effective tax rate for the quarter ended December 31, 2014 was 34.9% compared to 38.4% in the comparable prior year quarter.
Balance Sheet and Capital Expenditures
At December 31, 2014, the Company had cash and equivalents of
Share Repurchases
On
Since
Conference Call Information
The Company will hold a conference call today, January 29, 2015, at
The call can be accessed by dialing 1-888-710-3981 (U.S. participants)
or 1-913-312-1413 (International participants). Callers should ask to be
connected to the
A replay of the call will be available starting on January 29, 2015 at
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 three reportable segments:
-
Home & Building Products consists of two companies,
The AMES Companies, Inc. andClopay Building Products Company, Inc. :- AMES is a global provider of non-powered landscaping products that make work easier for homeowners and professionals.
- CBP is a leading manufacturer and marketer of residential, commercial and industrial garage doors to professional installing dealers and major home center retail chains.
-
Telephonics Corporation designs, develops and manufactures high-technology, integrated information, communication and sensor system solutions for use in military and commercial markets worldwide. -
Clopay Plastic Products Company, Inc. 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 Griffon and its operating subsidiaries, please see the Company’s website at www.griffoncorp.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), restructuring charges and acquisition-related expenses, as applicable ("Segment adjusted EBITDA"). 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 OPERATING HIGHLIGHTS (in thousands) (Unaudited) |
|||||||||||
For the Three Months Ended December 31, |
|||||||||||
REVENUE | 2014 | 2013 | |||||||||
Home & Building Products: | |||||||||||
AMES | $ | 133,110 | $ | 96,608 | |||||||
CBP | 138,600 | 121,842 | |||||||||
Home & Building Products | 271,710 | 218,450 | |||||||||
Telephonics | 90,658 | 96,025 | |||||||||
Plastics | 139,792 | 138,983 | |||||||||
Total consolidated net sales | $ | 502,160 | $ | 453,458 | |||||||
Segment adjusted EBITDA: | |||||||||||
Home & Building Products | $ | 24,470 | $ | 19,067 | |||||||
Telephonics | 10,032 | 12,396 | |||||||||
Plastics | 14,551 | 12,743 | |||||||||
Total Segment adjusted EBITDA | 49,053 | 44,206 | |||||||||
Net interest expense | (11,637 | ) | (13,101 | ) | |||||||
Segment depreciation and amortization | (17,147 | ) | (16,696 | ) | |||||||
Unallocated amounts | (8,264 | ) | (7,983 | ) | |||||||
Restructuring charges | — | (842 | ) | ||||||||
Acquisition costs | — | (798 | ) | ||||||||
Income before taxes | $ | 12,005 | $ | 4,786 | |||||||
The following is a reconciliation of each segment's operating results to Segment adjusted EBITDA:
GRIFFON CORPORATION AND SUBSIDIARIES RECONCILIATION OF NON-GAAP MEASURES BY REPORTABLE SEGMENT (in thousands) (Unaudited) |
|||||||||||
Three Months Ended December 31, | |||||||||||
2014 | 2013 | ||||||||||
Home & Building Products | |||||||||||
Segment operating profit | $ | 16,369 | $ | 9,393 | |||||||
Depreciation and amortization | 8,101 | 8,034 | |||||||||
Restructuring charges | — | 842 | |||||||||
Acquisition costs | — | 798 | |||||||||
Segment adjusted EBITDA | 24,470 | 19,067 | |||||||||
Telephonics | |||||||||||
Segment operating profit | 7,517 | 10,652 | |||||||||
Depreciation and amortization | 2,515 | 1,744 | |||||||||
Segment adjusted EBITDA | 10,032 | 12,396 | |||||||||
Clopay Plastic Products | |||||||||||
Segment operating profit | 8,020 | 5,825 | |||||||||
Depreciation and amortization | 6,531 | 6,918 | |||||||||
Segment adjusted EBITDA | 14,551 | 12,743 | |||||||||
All segments: | |||||||||||
Income from operations - as reported | 24,093 | 16,981 | |||||||||
Unallocated amounts | 8,264 | 7,983 | |||||||||
Other, net | (451 | ) | 906 | ||||||||
Segment operating profit | 31,906 | 25,870 | |||||||||
Depreciation and amortization | 17,147 | 16,696 | |||||||||
Restructuring charges | — | 842 | |||||||||
Acquisition costs | — | 798 | |||||||||
Segment adjusted EBITDA | $ | 49,053 | $ | 44,206 |
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 (LOSS) (in thousands, except per share data) (Unaudited) |
||||||||||||
Three Months Ended December 31, | ||||||||||||
2014 | 2013 | |||||||||||
Revenue | $ | 502,160 | $ | 453,458 | ||||||||
Cost of goods and services | 384,171 | 347,955 | ||||||||||
Gross profit | 117,989 | 105,503 | ||||||||||
Selling, general and administrative expenses | 93,896 | 87,680 | ||||||||||
Restructuring and other related charges | — | 842 | ||||||||||
Total operating expenses | 93,896 | 88,522 | ||||||||||
Income from operations | 24,093 | 16,981 | ||||||||||
Other income (expense) | ||||||||||||
Interest expense | (11,754 | ) | (13,134 | ) | ||||||||
Interest income | 117 | 33 | ||||||||||
Other, net | (451 | ) | 906 | |||||||||
Total other expense, net | (12,088 | ) | (12,195 | ) | ||||||||
Income before taxes | 12,005 | 4,786 | ||||||||||
Provision for income taxes | 4,534 | 1,550 | ||||||||||
Net income | $ | 7,471 | $ | 3,236 | ||||||||
Basic income per common share | $ | 0.16 | $ | 0.06 | ||||||||
Weighted-average shares outstanding | 46,310 | 52,754 | ||||||||||
Diluted income per common share | $ | 0.16 | $ | 0.06 | ||||||||
Weighted-average shares outstanding | 48,136 | 54,633 | ||||||||||
Net income | $ | 7,471 | $ | 3,236 | ||||||||
Other comprehensive income (loss), net of taxes: | ||||||||||||
Foreign currency translation adjustments | (15,500 | ) | (3,137 | ) | ||||||||
Pension and other post retirement plans | 353 | 316 | ||||||||||
Loss on cash flow hedge | (74 | ) | — | |||||||||
Loss on available-for-sale securities | (962 | ) | — | |||||||||
Total other comprehensive income (loss), net of taxes | (16,183 | ) | (2,821 | ) | ||||||||
Comprehensive income (loss), net | $ | (8,712 | ) | $ | 415 |
GRIFFON CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands) |
||||||||||
(Unaudited) 2014 |
At September 30, 2014 |
|||||||||
CURRENT ASSETS | ||||||||||
Cash and equivalents | $ | 46,566 | $ | 92,405 | ||||||
Accounts receivable, net of allowances of $7,506 and $7,336 | 237,177 | 258,436 | ||||||||
Contract costs and recognized income not yet billed, net of
progress |
102,465 | 109,930 | ||||||||
Inventories, net | 319,421 | 290,135 | ||||||||
Prepaid and other current assets | 58,347 | 62,569 | ||||||||
Assets of discontinued operations | 1,622 | 1,624 | ||||||||
Total Current Assets | 765,598 | 815,099 | ||||||||
PROPERTY, PLANT AND EQUIPMENT, net | 367,182 | 370,565 | ||||||||
GOODWILL | 367,091 | 371,846 | ||||||||
INTANGIBLE ASSETS, net | 227,834 | 233,623 | ||||||||
OTHER ASSETS | 25,849 | 27,102 | ||||||||
ASSETS OF DISCONTINUED OPERATIONS | 2,109 | 2,126 | ||||||||
Total Assets | $ | 1,755,663 | $ | 1,820,361 | ||||||
CURRENT LIABILITIES | ||||||||||
Notes payable and current portion of long-term debt | $ | 6,615 | $ | 7,886 | ||||||
Accounts payable | 201,131 | 218,703 | ||||||||
Accrued liabilities | 83,120 | 101,292 | ||||||||
Liabilities of discontinued operations | 3,170 | 3,282 | ||||||||
Total Current Liabilities | 294,036 | 331,163 | ||||||||
LONG-TERM DEBT, net of debt discount of $8,622 and $9,584 | 802,855 | 805,101 | ||||||||
OTHER LIABILITIES | 143,365 | 148,240 | ||||||||
LIABILITIES OF DISCONTINUED OPERATIONS | 3,542 | 3,830 | ||||||||
Total Liabilities | 1,243,798 | 1,288,334 | ||||||||
COMMITMENTS AND CONTINGENCIES - See Note 19 | ||||||||||
SHAREHOLDERS’ EQUITY | ||||||||||
Total Shareholders’ Equity | 511,865 | 532,027 | ||||||||
Total Liabilities and Shareholders’ Equity | $ | 1,755,663 | $ | 1,820,361 |
GRIFFON CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (Unaudited) |
||||||||||||
Three Months Ended December 31, | ||||||||||||
2014 | 2013 | |||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||||
Net income | $ | 7,471 | $ | 3,236 | ||||||||
Adjustments to reconcile net income to net cash used in operating activities: |
||||||||||||
Depreciation and amortization | 17,260 | 16,793 | ||||||||||
Stock-based compensation | 2,577 | 1,675 | ||||||||||
Asset impairment charges - restructuring | — | 109 | ||||||||||
Provision for losses on accounts receivable | 156 | 185 | ||||||||||
Amortization of deferred financing costs and debt discounts | 1,634 | 1,606 | ||||||||||
Deferred income taxes | 1,501 | (239 | ) | |||||||||
Loss on sale/disposal of assets | 171 | 53 | ||||||||||
Change in assets and liabilities, net of assets and liabilities acquired: | ||||||||||||
Decrease in accounts receivable and contract costs and recognized income not yet billed | 24,824 | 12,835 | ||||||||||
Increase in inventories | (32,658 | ) | (33,915 | ) | ||||||||
Increase in prepaid and other assets | (2,177 | ) | (1,628 | ) | ||||||||
Decrease in accounts payable, accrued liabilities and income taxes payable | (30,051 | ) | (27,532 | ) | ||||||||
Other changes, net | 1,242 | 543 | ||||||||||
Net cash used in operating activities | (8,050 | ) | (26,279 | ) | ||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||||
Acquisition of property, plant and equipment | (18,921 | ) | (17,916 | ) | ||||||||
Acquired businesses, net of cash acquired | — | (21,781 | ) | |||||||||
Proceeds from sale of assets | 107 | 224 | ||||||||||
Net cash used in investing activities | (18,814 | ) | (39,473 | ) | ||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||||
Dividends paid | (1,910 | ) | (1,719 | ) | ||||||||
Purchase of shares for treasury | (13,170 | ) | (55,189 | ) | ||||||||
Proceeds from long-term debt | 10,279 | 57,635 | ||||||||||
Payments of long-term debt | (11,295 | ) | (25,246 | ) | ||||||||
Change in short-term borrowings | (1,201 | ) | 9,940 | |||||||||
Financing costs | (29 | ) | (681 | ) | ||||||||
Purchase of ESOP shares | — | (1,591 | ) | |||||||||
Tax benefit from exercise/vesting of equity awards, net | 342 | 273 | ||||||||||
Other, net | 102 | 31 | ||||||||||
Net cash used in financing activities | (16,882 | ) | (16,547 | ) | ||||||||
CASH FLOWS FROM DISCONTINUED OPERATIONS: | ||||||||||||
Net cash used in operating activities | (380 | ) | (299 | ) | ||||||||
Net cash used in discontinued operations | (380 | ) | (299 | ) | ||||||||
Effect of exchange rate changes on cash and equivalents | (1,713 | ) | (158 | ) | ||||||||
NET DECREASE IN CASH AND EQUIVALENTS | (45,839 | ) | (82,756 | ) | ||||||||
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD | 92,405 | 178,130 | ||||||||||
CASH AND EQUIVALENTS AT END OF PERIOD | $ | 46,566 | $ | 95,374 | ||||||||
Griffon evaluates performance based on Earnings per share and Net income excluding restructuring charges, acquisition-related expenses, and discrete 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 RECONCILIATION OF NET INCOME TO ADJUSTED NET INCOME (in thousands, except per share data) (Unaudited) |
|||||||||||
For the Three Months Ended December 31, |
|||||||||||
2014 | 2013 | ||||||||||
Net income | $ | 7,471 | $ | 3,236 | |||||||
Adjusting items, net of tax: | |||||||||||
Restructuring charges | — | 522 | |||||||||
Acquisition costs | — | 495 | |||||||||
Discrete tax provision (benefits) | 349 | (289 | ) | ||||||||
Adjusted net income | $ | 7,820 | $ | 3,964 | |||||||
Diluted income per common share | $ | 0.16 | $ | 0.06 | |||||||
Adjusting items, net of tax: | |||||||||||
Restructuring charges | — | 0.01 | |||||||||
Acquisition costs | — | 0.01 | |||||||||
Discrete tax provisions (benefits) | 0.01 | (0.01 | ) | ||||||||
Adjusted earnings per common share | $ | 0.16 | $ | 0.07 | |||||||
Weighted-average shares outstanding (in thousands) | 48,136 | 54,633 | |||||||||
Source:
Griffon Corporation
Douglas J. Wetmore, 212-957-5000
EVP &
Chief Financial Officer
or
Investor Relations:
ICR Inc.
Michael
Callahan, 203-682-8311
Senior Vice President