GFF Griffon Corporation

Griffon Corporation (“Griffon” or the “Company”) (NYSE:GFF) today reported results for the fiscal year and fourth quarter ended September 30, 2024.

Revenue for fiscal 2024 totaled $2.6 billion, a 2% decrease compared to the $2.7 billion in the prior year.

Fiscal 2024 net income totaled $209.9 million, or $4.23 per share, compared to $77.6 million, or $1.42 per share, in the prior year. Excluding all items that affect comparability from both periods, current year adjusted net income was $254.2 million, or $5.12 per share, compared to $247.7 million, or $4.54 per share, in the prior year. For a reconciliation of net income to adjusted net income, and earnings per share to adjusted earnings per share, see the attached table.

Fiscal 2024 adjusted EBITDA was $513.6 million, a 2% increase from the prior year of $505.3 million. Adjusted EBITDA excluding unallocated amounts (primarily corporate overhead) of $60.0 million, was $573.6 million in 2024, increasing 2% from the prior year of $561.2 million (which excluded unallocated amounts of $55.9 million). For a reconciliation and definition of adjusted EBITDA, a non-GAAP measure, to income before taxes, see the attached table.

Revenue for the fourth quarter totaled $659.7 million, increasing 3% from $641.4 million in the prior year quarter.

Fourth quarter net income was $62.5 million, or $1.29 per share, compared to $42.0 million, or $0.79 per share, in the prior year quarter. Excluding all items that affect comparability from both periods, current year fourth quarter adjusted net income was $70.9 million, or $1.47 per share compared to $63.1 million, or $1.19 per share, in the prior year fourth quarter. For a reconciliation of net income to adjusted net income, and earnings per share to adjusted earnings per share, see the attached table.

Adjusted EBITDA for the fourth quarter totaled $137.5 million, a 13% increase from the prior year quarter of $121.3 million. Adjusted EBITDA, excluding unallocated amounts (primarily corporate overhead) of $16.0 million in the current quarter and $13.5 million in the prior year quarter, totaled $153.6 million, increasing 14% from the prior year quarter of $134.8 million. For a reconciliation and definition of adjusted EBITDA, a non-GAAP measure, to income before taxes, see the attached table.

“We are very pleased with Griffon’s results for the fourth quarter and fiscal year. The consistent strong performance from the Home and Building Products (“HBP”) segment and improved profitability from the Consumer and Professional Products (“CPP”) segment positions us for further growth in the years ahead,” said Ronald J. Kramer, Chairman and Chief Executive Officer.

“Our results were highlighted by the $326 million of free cash flow we generated during the year, which supported our repurchase of 4.8 million Griffon shares and our regular quarterly dividends. Griffon returned a total of $310 million to shareholders through dividends and share repurchases during 2024 while maintaining our year-over-year leverage at 2.6x and making substantial investments in capacity expansion, modernization, and technology in our businesses."

“In fiscal 2025, we will continue to use our operating cash flow to support our capital allocation strategy with a focus on opportunistically repurchasing shares, reducing debt, supporting our regular quarterly dividend and investing in our businesses. In support of this strategy, earlier today we announced that our Board approved both a $400 million share buyback authorization and a 20% increase in our regular quarterly dividend to $0.18 per share. These actions reflect the strength of our businesses, as well as our confidence in our strategic plan and outlook,” Mr. Kramer stated in conclusion.

Segment Operating Results

Home and Building Products

HBP revenue in 2024 of $1.6 billion was consistent with the prior year reflecting increased residential volume offset by reduced commercial volume.

HBP adjusted EBITDA in 2024 of $501.0 million decreased 2% compared to 2023 primarily resulting from increased labor and distribution costs.

HBP revenue in the current quarter of $406.6 million increased 3% from the prior year quarter primarily due to favorable product mix of 2% and increased volume of 1%, with improved residential volume, partially offset by reduced commercial volume.

HBP adjusted EBITDA in the current quarter of $128.8 million increased 7% compared to the prior year quarter due to the increased revenue noted above and reduced material costs, partially offset by increased labor and distribution costs.

Consumer and Professional Products

CPP revenue in 2024 was $1.0 billion, a decline of 6%, compared to 2023, primarily resulting from decreased volume driven by reduced consumer demand in North America, partially offset by increased volume in Australia, inclusive of the Pope acquisition (1%).

CPP adjusted EBITDA in 2024 of $72.6 million increased 44% compared to 2023, primarily due to improved North American production costs and improved margins in Australia, partially offset by the unfavorable impact of the reduced revenue noted above.

CPP revenue in the current quarter of $253.1 million increased 2% compared to the prior year period primarily due to increased volume from Australia, inclusive of the Pope acquisition (3%), and the U.K., partially offset by decreased volume driven by reduced consumer demand in North America.

CPP adjusted EBITDA in the current quarter of $24.7 million increased $10.5 million due to improved North American production costs and the increased revenue noted above.

CPP Global Sourcing Strategy Expansion

The global sourcing strategy expansion has been successfully completed as of September 30, 2024, ahead of the previously announced date of December 31, 2024. As a result, manufacturing operations have concluded at all affected sites with CPP reducing its facility footprint by approximately 1.2 million square feet, or approximately 15% of CPP's square footage, and its headcount by approximately 600.

By transitioning these product lines to an asset-light structure, CPP enhanced its operations by positioning itself to better serve customers with a more flexible and cost-effective sourcing model that leverages supplier relationships around the world, and improved its competitive positioning. These actions will be essential for CPP to achieve its target of 15% EBITDA margin while enhancing free cash flow through improved working capital and significantly reduced capital expenditures.

Implementation of this strategy over the duration of the project resulted in charges of $133.8 million, which included $51.1 million of cash charges and $82.7 million of non-cash charges. This excludes proceeds from the sale of real estate and equipment, which through September 30, 2024 were $13.3 million, and excludes future proceeds from the sale of remaining real estate and equipment.

Taxes

For the years ended September 30, 2024 and 2023, the Company reported pre-tax income and recognized a tax provision of 29.2% and 31.1%, respectively. Excluding discrete and certain other tax provisions, net and items that affect comparability, the effective tax rates for the years ended September 30, 2024 and 2023 were 27.6% and 27.3%, respectively.

Balance Sheet and Capital Expenditures

At September 30, 2024, the Company had cash and cash equivalents of $114.4 million and total debt outstanding of $1.52 billion, resulting in net debt of $1.41 billion. Leverage, as calculated in accordance with our credit agreement (see the attached table), was 2.6x net debt to EBITDA at September 30, 2024 and consistent with the leverage at September 30, 2023. Free cash flow was $326.1 million in fiscal 2024. At September 30, 2024, borrowing availability under the revolving credit facility was $379.3 million, subject to certain loan covenants. Capital expenditures, net, were $53.9 million for the year ended September 30, 2024, inclusive of $14.5 million of asset sales. For a reconciliation and definition of free cash flow, a non-GAAP measure, to net cash provided by operating activities, see the attached table.

Share Repurchases

Share repurchases during the quarter ended September 30, 2024 totaled 1.1 million shares of common stock, for a total of $68.4 million, or an average of $65.09 per share. Share repurchases totaled 4.8 million shares of common stock in fiscal 2024, for a total of $274.5 million, or an average of $57.52 per share. As of September 30, 2024, $32.7 million remained under these Board authorized share repurchase programs. During the period October 1, 2024 through market close on November 12, 2024, Griffon utilized the remaining authorization repurchasing 0.5 million shares of common stock for a total of $32.7 million or an average of $67.91 per share. Since April 2023 and through November 12, 2024, share repurchases totaled 9.4 million shares of common stock, or 16.4% of the outstanding shares, for a total of $458.0 million or an average of $48.74 per share.

Earlier today, Griffon announced its Board of Directors authorized the repurchase of an additional $400 million of shares of Griffon common stock.

2025 Outlook

We expect Griffon fiscal year 2025 revenue to be consistent with 2024 at $2.6 billion and adjusted EBITDA in a range of $575 million to $600 million, excluding unallocated costs of $55 million and charges related to strategic review retention costs of approximately $5 million. Free cash flow, including capital expenditures of $65 million, is expected to exceed net income, with depreciation of $42 million and amortization of $23 million. Fiscal year 2025 interest expense is expected to be $102 million, and Griffon's normalized tax rate is expected to be 28%.

From a segment perspective, we anticipate 2025 HBP and CPP revenue will both be in line with 2024. We anticipate 2025 EBITDA margin at HBP to continue to be in excess of 30% and at CPP to be in excess of 9%.

Conference Call Information

The Company will hold a conference call today, November 13, 2024, at 8:30 AM ET.

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 Griffon Corporation teleconference or provide conference ID number 13748928. Participants are encouraged to dial-in at least 10 minutes before the scheduled start time.

A replay of the call will be available starting on Wednesday, November 13, 2024 at 11:30 AM ET by dialing 1-844-512-2921 (U.S.) or 1-412-317-6671 (International), and entering the conference ID number: 13748928. The replay will be available through Wednesday, November 27, 2024 at 11:59 PM ET.

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 Corporation (the “Company” or “Griffon”) operates and the United States and global economies that are not historical are hereby identified as “forward-looking statements,” and may be indicated by words or phrases such as “anticipates,” “supports,” “plans,” “projects,” “expects,” “believes,”, "achieves", “should,” “would,” “could,” “hope,” “forecast,” “management is of the opinion,” “may,” “will,” “estimates,” “intends,” “explores,” “opportunities,” the negative of these expressions, use of the future tense and similar words or phrases. Such forward-looking statements are subject to inherent risks and uncertainties that could cause actual results to differ materially from those expressed in any forward-looking statements. These risks and uncertainties include, among others: current economic conditions and uncertainties in the housing, credit and capital markets; Griffon’s ability to achieve expected savings and improved operational results from cost control, restructuring, integration and disposal initiatives (including the expanded CPP global outsourcing strategy announced in May 2023); the ability to identify and successfully consummate, and integrate, value-adding acquisition opportunities; increasing competition and pricing pressures in the markets served by Griffon’s operating companies; the ability of Griffon’s operating companies to expand into new geographic and product markets, and to anticipate and meet customer demands for new products and product enhancements and innovations; increases in the cost or lack of availability of raw materials such as steel, resin and wood, components or purchased finished goods, including any potential impact on costs or availability resulting from tariffs; changes in customer demand or loss of a material customer at one of Griffon’s operating companies; the potential impact of seasonal variations and uncertain weather patterns on certain of Griffon’s businesses; political events or military conflicts that could impact the worldwide economy; a downgrade in Griffon’s credit ratings; changes in international economic conditions including inflation, interest rate and currency exchange fluctuations; the reliance by certain of Griffon’s businesses on particular third party suppliers and manufacturers to meet customer demands; the relative mix of products and services offered by Griffon’s businesses, which impacts margins and operating efficiencies; short-term capacity constraints or prolonged excess capacity; unforeseen developments in contingencies, such as litigation, regulatory and environmental matters; Griffon’s ability to adequately protect and maintain the validity of patent and other intellectual property rights; the cyclical nature of the businesses of certain of Griffon’s operating companies; possible terrorist threats and actions and their impact on the global economy; effects of possible IT system failures, data breaches or cyber-attacks; the impact of pandemics, such as COVID-19, on the U.S. and the global economy, including business disruptions, reductions in employment and an increase in business and operating facility failures, specifically among our customers and suppliers; Griffon’s ability to service and refinance its debt; and the impact of recent and future legislative and regulatory changes, including, without limitation, changes in tax laws. Such statements reflect the views of the Company with respect to future events and are subject to these and other risks, as previously disclosed in the Company’s Securities and Exchange Commission filings. Readers are cautioned not to place undue reliance on these forward-looking statements. These forward-looking statements speak only as of the date made. Griffon undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

About Griffon Corporation

Griffon Corporation 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 with acquisition and growth opportunities as well as divestitures. As long-term investors, we intend to continue to grow and strengthen our existing businesses, and to diversify further through investments in our businesses and acquisitions.

Griffon conducts its operations through two reportable segments:

• Home and Building Products ("HBP") conducts its operations through Clopay Corporation ("Clopay"). Founded in 1964, Clopay is the largest manufacturer and marketer of garage doors and rolling steel doors in North America. Residential and commercial sectional garage doors are sold through professional dealers and leading home center retail chains throughout North America under the brands Clopay, Ideal, and Holmes. Rolling steel door and grille products designed for commercial, industrial, institutional, and retail use are sold under the Cornell and Cookson brands.

• Consumer and Professional Products (“CPP”) is a global provider of branded consumer and professional tools; residential, industrial and commercial fans; home storage and organization products; and products that enhance indoor and outdoor lifestyles. CPP sells products globally through a portfolio of leading brands including AMES, since 1774, Hunter, since 1886, True Temper, and ClosetMaid.

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 segment adjusted EBITDA and adjusted EBITDA, non-GAAP measures, which are defined as income before taxes, excluding interest income and expense, depreciation and amortization, strategic review charges, non-cash impairment charges, restructuring charges, gain/loss from debt extinguishment and acquisition related expenses, as well as other items that may affect comparability, as applicable. Segment adjusted EBITDA also excludes unallocated amounts, mainly corporate overhead. Griffon believes this information is useful to investors.

The following table provides operating highlights and a reconciliation of segment adjusted EBITDA and adjusted EBITDA to income before taxes:

 

(Unaudited) For the Three Months Ended September 30,

 

For the Year Ended September 30,

REVENUE

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

 

 

 

 

 

 

 

 

Home and Building Products

$

406,558

 

 

$

394,131

 

 

$

1,588,625

 

 

$

1,588,505

 

Consumer and Professional Products

 

253,115

 

 

 

247,254

 

 

 

1,034,895

 

 

 

1,096,678

 

Total revenue

$

659,673

 

 

$

641,385

 

 

$

2,623,520

 

 

$

2,685,183

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ADJUSTED EBITDA

 

 

 

 

 

 

 

Home and Building Products

$

128,842

 

 

$

120,530

 

 

$

501,001

 

 

$

510,876

 

Consumer and Professional Products

 

24,709

 

 

 

14,252

 

 

 

72,632

 

 

 

50,343

 

Total Segments

 

153,551

 

 

 

134,782

 

 

 

573,633

 

 

 

561,219

 

Unallocated amounts, excluding depreciation*

 

(16,025

)

 

 

(13,499

)

 

 

(60,031

)

 

 

(55,887

)

Adjusted EBITDA

 

137,526

 

 

 

121,283

 

 

 

513,602

 

 

 

505,332

 

Net interest expense

 

(25,010

)

 

 

(24,957

)

 

 

(101,652

)

 

 

(99,351

)

Depreciation and amortization

 

(15,554

)

 

 

(15,409

)

 

 

(60,704

)

 

 

(65,445

)

Goodwill and intangible impairments

 

—

 

 

 

(9,200

)

 

 

—

 

 

 

(109,200

)

Restructuring charges

 

(7,820

)

 

 

(10,272

)

 

 

(41,309

)

 

 

(92,468

)

Debt extinguishment, net

 

—

 

 

 

(437

)

 

 

(1,700

)

 

 

(437

)

Acquisition costs

 

(441

)

 

 

—

 

 

 

(441

)

 

 

—

 

Gain (loss) on sale of buildings

 

106

 

 

 

1,803

 

 

 

(61

)

 

 

12,655

 

Strategic review - retention and other

 

(1,390

)

 

 

9

 

 

 

(10,594

)

 

 

(20,225

)

Special dividend ESOP charges

 

—

 

 

 

(6,452

)

 

 

—

 

 

 

(15,494

)

Proxy expenses

 

—

 

 

 

—

 

 

 

—

 

 

 

(2,685

)

Fair value step-up of acquired inventory sold

 

(491

)

 

 

—

 

 

 

(491

)

 

 

—

 

Income before taxes

$

86,926

 

 

$

56,368

 

 

$

296,650

 

 

$

112,682

 

* Primarily Corporate Overhead

 

For the Three Months Ended September 30,

 

For the Year Ended September 30,

DEPRECIATION and AMORTIZATION

 

2024

 

 

2023

 

 

2024

 

 

2023

Segment:

 

 

 

 

 

 

 

Home and Building Products

$

4,061

 

$

3,541

 

$

15,349

 

$

15,066

Consumer and Professional Products

 

11,344

 

 

11,720

 

 

44,797

 

 

49,811

Total segment depreciation and amortization

$

15,405

 

$

15,261

 

$

60,146

 

$

64,877

Corporate

 

149

 

 

148

 

 

558

 

 

568

Total consolidated depreciation and amortization

$

15,554

 

$

15,409

 

$

60,704

 

$

65,445

Griffon believes free cash flow ("FCF", a non-GAAP measure) is a useful measure for investors because it demonstrates the Company's ability to generate cash from operations for purposes such as repaying debt, funding acquisitions and paying dividends. FCF is defined as net cash provided by operating activities less capital expenditures, net of proceeds.

The following table provides a reconciliation of net cash provided by operating activities to FCF:

 

For the year ended September 30,

(in thousands)

 

2024

 

 

 

2023

 

 

Net cash provided by operating activities

$

380,042

 

 

$

431,765

 

 

Acquisition of property, plant and equipment

 

(68,399

)

 

 

(63,604

)

 

Proceeds from the sale of property, plant and equipment

 

14,479

 

 

 

20,961

 

 

FCF

$

326,122

 

 

$

389,122

 

 

Net debt to EBITDA (Leverage ratio), a non-GAAP measure, is a key financial measure that is used by management to assess the borrowing capacity of the Company. The Company has defined its net debt to EBITDA leverage ratio as net debt (total principal debt outstanding net of cash and equivalents) divided by the sum of adjusted EBITDA (as defined above) and stock-based compensation expense. The following table provides a calculation of our net debt to EBITDA leverage ratio as calculated per our credit agreement:

(in thousands)

 

September 30, 2024

 

September 30, 2023

 

Cash and equivalents

 

$

114,438

 

$

102,889

 

 

Notes payables and current portion of long-term debt

 

$

8,155

 

 

9,625

 

 

Long-term debt, net of current maturities

 

 

1,515,897

 

 

1,459,904

 

 

Debt discount/premium and issuance costs

 

 

15,633

 

 

20,283

 

 

Total gross debt

 

 

1,539,685

 

 

1,489,812

 

 

Debt, net of cash and equivalents

 

$

1,425,247

 

$

1,386,923

 

 

 

 

 

 

 

 

Adjusted EBITDA(1)

 

 

513,602

 

$

505,332

 

 

Special dividend ESOP Charges

 

 

—

 

 

(15,494

)

 

Stock and ESOP-based compensation

 

 

26,838

 

 

41,112

 

 

Adjusted EBITDA, per debt compliance

 

$

540,440

 

$

530,950

 

 

 

 

 

 

 

 

Leverage ratio

 

2.6x

 

2.6x

 

 

 

 

 

 

 

1. Griffon defines Adjusted EBITDA as operating results before interest income and expense, income taxes, depreciation and amortization, restructuring charges, debt extinguishment, net and acquisition related expenses, as well as other items that may affect comparability, as applicable.

The following tables provide a reconciliation of Gross profit and Selling, general and administrative expenses for items that affect comparability for the quarter and year ended September 30, 2024 and 2023:

(in thousands)

For the Three Months Ended September 30,

 

For the Twelve Months Ended September 30,

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

Gross Profit, as reported

$

263,480

 

 

$

245,880

 

 

$

1,019,935

 

 

$

948,821

 

% of revenue

 

39.9

%

 

 

38.3

%

 

 

38.9

%

 

 

35.3

%

Adjusting items:

 

 

 

 

 

 

 

Restructuring charges(1)

 

7,083

 

 

 

5,606

 

 

 

35,806

 

 

 

82,028

 

Fair value step-up of acquired inventory sold

 

491

 

 

 

—

 

 

 

491

 

 

 

—

 

Gross Profit, as adjusted

$

271,054

 

 

$

251,486

 

 

$

1,056,232

 

 

$

1,030,849

 

% of revenue

 

41.1

%

 

 

39.2

%

 

 

40.3

%

 

 

38.4

%

(1) For the quarters and years ended September 30, 2024 and 2023, restructuring charges relates to the CPP global sourcing expansion.

(in thousands)

For the Three Months Ended September 30,

 

For the For the Twelve Months Ended September 30,

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

Selling, general and administrative expenses, as reported

$

151,808

 

 

$

157,274

 

 

$

621,638

 

 

$

642,734

 

% of revenue

 

23.0

%

 

 

24.5

%

 

 

23.7

%

 

 

23.9

%

Adjusting items:

 

 

 

 

 

 

 

Restructuring charges(1)

 

(737

)

 

 

(4,666

)

 

 

(5,503

)

 

 

(10,440

)

Acquisition costs

 

(441

)

 

 

—

 

 

 

(441

)

 

 

—

 

Strategic review - retention and other

 

(1,390

)

 

 

9

 

 

 

(10,594

)

 

 

(20,225

)

Proxy expenses

 

—

 

 

 

—

 

 

 

—

 

 

 

(2,685

)

Special dividend - ESOP

 

—

 

 

 

(6,453

)

 

 

—

 

 

 

(15,494

)

Selling, general and administrative expenses, as adjusted

$

149,240

 

 

$

146,164

 

 

$

605,100

 

 

$

593,890

 

% of revenue

 

22.6

%

 

 

22.8

%

 

 

23.1

%

 

 

22.1

%

(1) For the quarters and years ended September 30, 2024 and 2023, restructuring charges relates to the CPP global sourcing expansion.

GRIFFON CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND

COMPREHENSIVE INCOME (LOSS)

(in thousands, except per share data)

 

(Unaudited)

Three Months Ended September 30,

 

Twelve Months Ended September 30,

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

Revenue

$

659,673

 

 

$

641,385

 

 

$

2,623,520

 

 

$

2,685,183

 

Cost of goods and services

 

396,193

 

 

 

395,505

 

 

 

1,603,585

 

 

 

1,736,362

 

Gross profit

 

263,480

 

 

 

245,880

 

 

 

1,019,935

 

 

 

948,821

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

151,808

 

 

 

157,274

 

 

 

621,638

 

 

 

642,734

 

Goodwill and intangible asset impairments

 

—

 

 

 

9,200

 

 

 

—

 

 

 

109,200

 

Total operating expenses

 

151,808

 

 

 

166,474

 

 

 

621,638

 

 

 

751,934

 

 

 

 

 

 

 

 

 

Income from operations

 

111,672

 

 

 

79,406

 

 

 

398,297

 

 

 

196,887

 

 

 

 

 

 

 

 

 

Other income (expense)

 

 

 

 

 

 

 

Interest expense

 

(25,614

)

 

 

(26,277

)

 

 

(104,086

)

 

 

(101,445

)

Interest income

 

604

 

 

 

1,320

 

 

 

2,434

 

 

 

2,094

 

Gain (loss) on sale of building

 

106

 

 

 

1,803

 

 

 

(61

)

 

 

12,655

 

Debt extinguishment, net

 

—

 

 

 

(437

)

 

 

(1,700

)

 

 

(437

)

Other, net

 

158

 

 

 

553

 

 

 

1,766

 

 

 

2,928

 

Total other expense, net

 

(24,746

)

 

 

(23,038

)

 

 

(101,647

)

 

 

(84,205

)

 

 

 

 

 

 

 

 

Income before taxes

 

86,926

 

 

 

56,368

 

 

 

296,650

 

 

 

112,682

 

Provision for income taxes

 

24,435

 

 

 

14,403

 

 

 

86,753

 

 

 

35,065

 

Net income

$

62,491

 

 

$

41,965

 

 

$

209,897

 

 

$

77,617

 

 

 

 

 

 

 

 

 

Basic earnings per common share

$

1.34

 

 

$

0.83

 

 

$

4.41

 

 

$

1.49

 

Weighted-average shares outstanding

 

46,529

 

 

 

50,522

 

 

 

47,573

 

 

 

52,111

 

 

 

 

 

 

 

 

 

Diluted earnings per common share

$

1.29

 

 

$

0.79

 

 

$

4.23

 

 

$

1.42

 

Weighted-average shares outstanding

 

48,424

 

 

 

53,143

 

 

 

49,668

 

 

 

54,612

 

 

 

 

 

 

 

 

 

Net income

$

62,491

 

 

$

41,965

 

 

$

209,897

 

 

$

77,617

 

Other comprehensive income (loss), net of taxes:

 

 

 

 

 

 

 

Foreign currency translation adjustments

 

7,925

 

 

 

(6,133

)

 

 

10,137

 

 

 

8,447

 

Pension and other post retirement plans

 

(57

)

 

 

4,279

 

 

 

1,538

 

 

 

6,634

 

Gain (loss) on cash flow hedge

 

(239

)

 

 

(565

)

 

 

311

 

 

 

(2,353

)

Total other comprehensive income (loss), net of taxes

 

7,629

 

 

 

(2,419

)

 

 

11,986

 

 

 

12,728

 

Comprehensive income (loss), net

$

70,120

 

 

$

39,546

 

 

$

221,883

 

 

$

90,345

 

GRIFFON CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except per share)

 

At September 30, 2024

 

At September 30, 2023

CURRENT ASSETS

 

 

 

Cash and equivalents

$

114,438

 

 

$

102,889

 

Accounts receivable, net of allowances of $10,986 and $11,264

 

312,765

 

 

 

312,432

 

Inventories

 

425,489

 

 

 

507,130

 

Prepaid and other current assets

 

61,604

 

 

 

57,139

 

Assets held for sale

 

14,532

 

 

 

—

 

Assets of discontinued operations

 

648

 

 

 

1,001

 

Total Current Assets

 

929,476

 

 

 

980,591

 

PROPERTY, PLANT AND EQUIPMENT, net

 

288,297

 

 

 

279,218

 

OPERATING LEASE RIGHT-OF-USE ASSETS

 

171,211

 

 

 

169,942

 

GOODWILL

 

329,393

 

 

 

327,864

 

INTANGIBLE ASSETS, net

 

618,782

 

 

 

635,243

 

OTHER ASSETS

 

30,378

 

 

 

21,731

 

ASSETS OF DISCONTINUED OPERATIONS

 

3,417

 

 

 

4,290

 

Total Assets

$

2,370,954

 

 

$

2,418,879

 

CURRENT LIABILITIES

 

 

 

Notes payable and current portion of long-term debt

$

8,155

 

 

$

9,625

 

Accounts payable

 

119,354

 

 

 

116,646

 

Accrued liabilities

 

181,918

 

 

 

193,098

 

Current portion of operating lease liabilities

 

35,065

 

 

 

32,632

 

Liabilities of discontinued operations

 

4,498

 

 

 

7,148

 

Total Current Liabilities

 

348,990

 

 

 

359,149

 

LONG-TERM DEBT, net

 

1,515,897

 

 

 

1,459,904

 

LONG-TERM OPERATING LEASE LIABILITIES

 

147,369

 

 

 

147,224

 

OTHER LIABILITIES

 

130,540

 

 

 

132,708

 

LIABILITIES OF DISCONTINUED OPERATIONS

 

3,270

 

 

 

4,650

 

Total Liabilities

 

2,146,066

 

 

 

2,103,635

 

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, issued shares of 84,746 in both 2024 and 2023

 

21,187

 

 

 

21,187

 

Capital in excess of par value

 

677,028

 

 

 

662,680

 

Retained earnings

 

461,442

 

 

 

281,516

 

Treasury shares, at cost, 36,443 common shares and 31,684 common shares, respectively

 

(876,527

)

 

 

(577,686

)

Accumulated other comprehensive loss

 

(58,024

)

 

 

(70,010

)

Deferred compensation

 

(218

)

 

 

(2,443

)

Total Shareholders’ Equity

 

224,888

 

 

 

315,244

 

Total Liabilities and Shareholders’ Equity

$

2,370,954

 

 

$

2,418,879

 

GRIFFON CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

 

Years Ended September 30,

 

 

2024

 

 

 

2023

 

 

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

Net income

$

209,897

 

 

$

77,617

 

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

Depreciation and amortization

 

60,704

 

 

 

65,445

 

 

Fair value write-up of acquired inventory sold

 

491

 

 

 

—

 

 

Stock-based compensation

 

26,838

 

 

 

41,112

 

 

Goodwill and intangible asset impairments

 

—

 

 

 

109,200

 

 

Asset impairment charges - restructuring

 

23,763

 

 

 

58,932

 

 

Provision for losses on accounts receivable

 

636

 

 

 

971

 

 

Amortization of deferred financing costs and debt discounts

 

4,202

 

 

 

4,232

 

 

Debt extinguishment, net

 

1,700

 

 

 

437

 

 

Deferred income tax provision (benefit)

 

3,574

 

 

 

(37,795

)

 

Gain on sale of assets and investments

 

(61

)

 

 

(12,960

)

 

Change in assets and liabilities, net of assets and liabilities acquired:

 

 

 

 

Decrease in accounts receivable

 

4,243

 

 

 

51,119

 

 

Decrease in inventories

 

73,582

 

 

 

129,209

 

 

(Increase) decrease in prepaid and other assets

 

(925

)

 

 

621

 

 

Decrease in accounts payable, accrued liabilities and income taxes payable

 

(30,732

)

 

 

(67,843

)

 

Other changes, net

 

2,130

 

 

 

11,468

 

 

Net cash provided by operating activities

 

380,042

 

 

 

431,765

 

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

Acquisition of property, plant and equipment

 

(68,399

)

 

 

(63,604

)

 

Acquired business, net of cash acquired

 

(14,579

)

 

 

—

 

 

Proceeds (payments) from sale of business, net

 

3,500

 

 

 

(2,568

)

 

Proceeds from sale of property, plant and equipment

 

14,479

 

 

 

20,961

 

 

Net cash used in investing activities

 

(64,999

)

 

 

(45,211

)

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

Dividends paid

 

(35,806

)

 

 

(133,814

)

 

Purchase of shares for treasury

 

(309,916

)

 

 

(163,970

)

 

Proceeds from long-term debt

 

217,000

 

 

 

122,558

 

 

Payments of long-term debt

 

(168,778

)

 

 

(221,781

)

 

Financing costs

 

(907

)

 

 

(3,025

)

 

Other, net

 

(341

)

 

 

(130

)

 

Net cash used in financing activities

 

(298,748

)

 

 

(400,162

)

 

CASH FLOWS FROM DISCONTINUED OPERATIONS:

 

 

 

 

Net cash in operating activities used in discontinued operations

 

(2,776

)

 

 

(2,994

)

 

Effect of exchange rate changes on cash and equivalents

 

(1,970

)

 

 

(693

)

 

NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS

 

11,549

 

 

 

(17,295

)

 

CASH AND EQUIVALENTS AT BEGINNING OF PERIOD

 

102,889

 

 

 

120,184

 

 

CASH AND EQUIVALENTS AT END OF PERIOD

$

114,438

 

 

$

102,889

 

 

Supplemental Disclosure of Cash Flow Information:

 

 

 

 

Cash paid for interest

$

100,676

 

 

$

99,833

 

 

Cash paid for taxes

 

102,978

 

 

 

70,937

 

 

Griffon evaluates performance based on adjusted net income and the related adjusted earnings per share, which excludes restructuring charges, gain/loss from debt extinguishment, acquisition related expenses, discrete and certain other tax items, as well other items that may affect comparability, as applicable, non-GAAP measures. Griffon believes this information is useful to investors. The following tables provides a reconciliation of net income to adjusted net income, and earnings per common share to adjusted earnings per common share:

(in thousands, except per share data)

For the Three Months Ended September 30,

 

For the Years Ended September 30,

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

Net income

$

62,491

 

 

$

41,965

 

 

$

209,897

 

 

$

77,617

 

Adjusting items:

 

 

 

 

 

 

 

Restructuring charges(1)

 

7,820

 

 

 

10,272

 

 

 

41,309

 

 

 

92,468

 

(Gain) loss on sale of buildings

 

(106

)

 

 

(1,803

)

 

 

61

 

 

 

(12,655

)

Debt extinguishment, net

 

—

 

 

 

437

 

 

 

1,700

 

 

 

437

 

Acquisition costs

 

441

 

 

 

—

 

 

 

441

 

 

 

—

 

Strategic review - retention and other

 

1,390

 

 

 

(9

)

 

 

10,594

 

 

 

20,225

 

Special dividend ESOP charges

 

—

 

 

 

6,452

 

 

 

—

 

 

 

15,494

 

Proxy expenses

 

—

 

 

 

—

 

 

 

—

 

 

 

2,685

 

Fair value step-up of acquired inventory sold

 

491

 

 

 

—

 

 

 

491

 

 

 

—

 

Goodwill and intangible asset impairments

 

—

 

 

 

9,200

 

 

 

—

 

 

 

109,200

 

Tax impact of above items(2)

 

(2,529

)

 

 

(6,166

)

 

 

(13,832

)

 

 

(57,925

)

Discrete and other certain tax provisions(3)

 

946

 

 

 

2,712

 

 

 

3,586

 

 

 

175

 

Adjusted net income

$

70,944

 

 

$

63,060

 

 

$

254,247

 

 

$

247,721

 

 

 

 

 

 

 

 

 

Earnings per common share

$

1.29

 

 

$

0.79

 

 

$

4.23

 

 

$

1.42

 

 

 

 

 

 

 

 

 

Adjusting items, net of tax:

 

 

 

 

 

 

 

Restructuring charges(1)

 

0.12

 

 

 

0.14

 

 

 

0.62

 

 

 

1.26

 

(Gain) loss on sale of buildings

 

—

 

 

 

(0.02

)

 

 

—

 

 

 

(0.18

)

Debt extinguishment, net

 

—

 

 

 

0.01

 

 

 

0.03

 

 

 

0.01

 

Acquisition costs

 

0.01

 

 

 

—

 

 

 

0.01

 

 

 

—

 

Strategic review - retention and other

 

0.02

 

 

 

—

 

 

 

0.16

 

 

 

0.28

 

Special dividend ESOP charges

 

—

 

 

 

0.09

 

 

 

—

 

 

 

0.22

 

Proxy expenses

 

—

 

 

 

—

 

 

 

—

 

 

 

0.04

 

Fair value step-up of acquired inventory sold

 

0.01

 

 

 

—

 

 

 

0.01

 

 

 

—

 

Goodwill and intangible asset impairments

 

—

 

 

 

0.13

 

 

 

—

 

 

 

1.49

 

Discrete and other certain tax provisions(3)

 

0.02

 

 

 

0.05

 

 

 

0.07

 

 

 

—

 

Adjusted earnings per share

$

1.47

 

 

$

1.19

 

 

$

5.12

 

 

$

4.54

 

Weighted-average shares outstanding

 

46,529

 

 

 

50,522

 

 

 

47,573

 

 

 

52,111

 

Diluted weighted average shares outstanding

 

48,424

 

 

 

53,143

 

 

 

49,668

 

 

 

54,612

 

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.

(1) For the quarters and years ended September 30, 2024 and 2023, restructuring charges relate to the CPP global sourcing expansion. For the quarter and year ended September 30, 2024, $7,083 and $35,806, respectively, is included in Cost of goods and services and $737 and $5,503, respectively, is included in SG&A. For the quarter and year ended September 30, 2023, $5,606 and $82,028, respectively, is included in Cost of goods and services and $4,666 and $10,440, respectively, is included in SG&A.

(2) Tax impact for the above reconciling adjustments from GAAP to non-GAAP Income from continuing operations and the related adjusted EPS is determined by comparing the Company's tax provision, including the reconciling adjustments, to the tax provision excluding such adjustments.

(3) Discrete and certain other tax provisions primarily relate to the impact of a rate differential between statutory and annual effective tax rate on items impacting the quarter.

View source version on businesswire.com: https://www.businesswire.com/news/home/20241112057880/en/

Company Contact: Brian G. Harris SVP & Chief Financial Officer Griffon Corporation (212) 957-5000 IR@Griffon.com Investor Relations Contact: Tom Cook Managing Director ICR Inc. (203) 682-8250