Griffon Corporation (“Griffon” or the “Company”) (NYSE:GFF)
today reported results for the fiscal 2023 third quarter ended June
30, 2023.
Revenue for the third quarter totaled $683.4 million, an 11%
decrease compared to $768.2 million in the prior year quarter.
Income from continuing operations totaled $49.2 million, or
$0.90 per share, compared to $52.8 million, or $0.98 per share, in
the prior year quarter. Excluding all items that affect
comparability from both periods, adjusted income from continuing
operations was $70.3 million, or $1.29 per share in the current
year quarter compared to $66.5 million, or $1.23 per share in the
prior year quarter. For a reconciliation of income from continuing
operations to adjusted income from continuing operations, see the
attached table.
Adjusted EBITDA from continuing operations for the third quarter
was $138.6 million, a 3% increase from the prior year quarter of
$134.8 million. Adjusted EBITDA from continuing operations,
excluding unallocated amounts (primarily corporate overhead) of
$14.0 million in the current quarter and $13.4 million in the prior
year quarter, totaled $152.6 million, increasing 3% from the prior
year of $148.2 million. For a reconciliation and definition of
adjusted EBITDA, a non-GAAP measure, to income before taxes from
continuing operations, see the attached table.
"Griffon’s results for the third quarter have exceeded
expectations due to the outstanding performance of our Home and
Building Products ("HBP") segment," said Ronald J. Kramer, Chairman
and Chief Executive Officer. "HBP benefited from increased
commercial volume as well as favorable pricing and mix across all
products and channels. HBP’s performance has been supported by an
increased investment in business development, as well as
investments in productivity and innovation that will drive future
growth.”
“Our Consumer and Professional Products ("CPP") segment's
performance continues to reflect challenging market conditions,
with all channels and geographies being affected by reduced
consumer demand, and elevated customer inventory levels,” continued
Mr. Kramer. “As we announced last quarter, CPP is addressing these
challenges by expanding its global sourcing strategy to include
certain product categories that are currently manufactured in and
for the U.S. market. These efforts are underway and progressing
well.”
“Given our overall strong performance year-to-date, and
expectations for the fourth quarter, we are raising full-year
EBITDA guidance to $550 million from at least $525 million,” Mr.
Kramer said. “Regarding capital allocation, during the fiscal third
quarter, we repurchased more than 2.5 million Griffon shares, or
4.4% of total outstanding shares, at an average price of $33.58 per
share. These actions demonstrate the confidence Griffon’s Board and
management have in our strategic plan and outlook, and our
continued commitment to delivering value to our shareholders.”
Segment Operating
Results
Home and Building Products ("HBP")
HBP revenue in the current quarter of $401.1 million declined 1%
from the prior year period due to decreased volume of 5% driven by
reduced residential volume partially offset by increased commercial
volume, and favorable pricing and mix of 4% driven by both
residential and commercial.
HBP adjusted EBITDA in the current quarter was $134.3 million,
increasing 12% compared to the prior year period. Adjusted EBITDA
benefited from reduced material costs, partially offset by reduced
revenue noted above and increased labor, advertising and marketing
costs.
Consumer and Professional Products ("CPP")
CPP revenue in the current quarter of $282.3 million decreased
22% compared to the prior year period primarily due to a 22%
reduction in volume across all channels and geographies driven by
reduced consumer demand, elevated customer inventory levels, and
customer supplier diversification in the U.S. Hunter contributed
$87.8 million in the current quarter compared to $105.8 million in
the prior year period.
For the current quarter, adjusted EBITDA was $18.3 million,
compared to $28.4 million in the prior year primarily due to the
unfavorable impact of the reduced volume noted above, and its
related impact on manufacturing and overhead absorption, partially
offset by reduced discretionary spending. Hunter contributed $25.1
million in the current quarter compared to $16.8 million in the
prior year period.
CPP Global Sourcing Strategy Expansion
In response to market conditions, Griffon’s CPP segment will
expand its global sourcing strategy to include long handle tools,
material handling, and wood storage and organization product lines
for the U.S. market.
By transitioning these product lines to an asset-light
structure, CPP’s operations will be better positioned to serve
customers with a more flexible and cost-effective sourcing model
that leverages supplier relationships around the world. These
actions will be essential to CPP achieving 15% EBITDA margins,
while enhancing free cash flow through improved working capital and
significantly lower capital expenditures.
The global sourcing strategy expansion is expected to be
complete by the end of calendar 2024. Over that period, CPP expects
to reduce its U.S. facility footprint by approximately 1.2 million
square feet, or 30%, and its headcount by approximately 600.
Implementation of this strategy over the duration of the project
will result in charges of $120 to $130 million, including $50 to
$55 million of cash charges for employee retention and severance,
operational transition, and facility and lease exit costs, and $70
to $75 million of non-cash charges primarily related to asset
write-downs. Capital investment in the range of $3 to $5 million
will also be required. These costs exclude cash proceeds from the
sale of real estate and equipment, which are expected to largely
offset the cash charges, and also exclude inefficiencies due to
duplicative labor costs and absorption impacts during
transition.
During the quarter ended June 30, 2023, CPP incurred pre-tax
cash restructuring charges of $3.9 million. During the nine months
ended June 30, 2023, pre-tax restructuring charges totaling $82.2
million consisted of cash charges of $23.1 million and non-cash,
asset-related charges totaled $59.1 million.
Taxes
The Company reported pretax income from continuing operations
for the quarter ended June 30, 2023 and June 30, 2022, and
recognized the effective tax rates of 37.3% and 30.6%,
respectively. Excluding all items that affect comparability, the
effective tax rates for the quarters ended June 30, 2023 and 2022
were 28.1% and 28.6%, respectively.
Balance Sheet and Capital
Expenditures
At June 30, 2023, the Company had cash and equivalents of $151.8
million and total debt outstanding of $1.55 billion, resulting in
net debt of $1.39 billion. Leverage, as calculated in accordance
with our credit agreement, was 2.6x net debt to EBITDA.
Year-to-date June 30, 2023 free cash flow of $300.7 million
reflects the strong operating results through the third quarter of
2023. At June 30, 2023, borrowing availability under the revolving
credit facility was $300.5 million subject to certain loan
covenants. Capital expenditures, net, were $8.3 million for the
quarter ended June 30, 2023.
On April 20, 2023, Griffon announced that the Board of Directors
approved an increase of its share repurchase authorization to $258
million from the prior unused authorization of $58 million. Share
repurchases during the quarter ended June 30, 2023 totaled
2,541,932 shares of common stock, for a total of $85.4 million, or
an average of $33.58 per share. As of June 30, 2023, $172.6 million
remains under these Board authorized repurchase programs.
2023 Outlook
We continue to expect 2023 revenue of $2.7 billion. Adjusted
EBITDA in 2023 is now expected to be $550 million (prior at least
$525 million), excluding unallocated costs of $56 million, and
charges related to the strategic review process of $22 million and
AMES’s global sourcing expansion. Increased adjusted EBITDA
expectations reflect the continuation of strong HBP results
partially offset by reduced CPP volume, and its related impact on
manufacturing and overhead absorption.
We now expect depreciation to be $45 million (prior $50 million)
and capital expenditures to be $40 million (prior $50 million).
Other guidance remains unchanged for 2023, including free cash flow
to exceed net income, amortization of $22 million, interest expense
of $103 million, and a normalized tax rate of 29%.
Conference Call
Information
The Company will hold a conference call today, August 2, 2023,
at 8:30 AM ET.
The call can be accessed by dialing 1-844-825-9789 (U.S.
participants) or 1-412-317-5180 (International participants).
Callers should ask to be connected to the Griffon Corporation
teleconference or provide conference ID number 5130874.
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,
August 2, 2023 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: 10180001. The replay will be available through Wednesday,
August 16, 2023 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, the impact of the Hunter Fan
transaction, the 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,” “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, in particular, the
expanded CPP 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 resin, wood and steel, 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 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 COVID-19, or some other
future pandemic, 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 in connection
with acquisition and growth opportunities as well as 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.
Griffon conducts its operations through two reportable
segments:
- Home and Building Products ("HBP") conducts its operations
through 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 leading North
American manufacturer and 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 is defined as income before taxes from continuing operations,
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 from continuing operations:
(in thousands)
For the Three Months Ended
June 30,
For the Nine Months Ended June
30,
REVENUE
2023
2022
2023
2022
Home and Building Products
$
401,142
$
405,545
$
1,194,374
$
1,082,726
Consumer and Professional Products
282,288
362,634
849,424
1,056,819
Total revenue
$
683,430
$
768,179
$
2,043,798
$
2,139,545
For the Three Months Ended
June 30,
For the Nine Months Ended June
30,
2023
2022
2023
2022
ADJUSTED EBITDA
Home and Building Products
$
134,330
$
119,847
$
390,346
$
280,618
Consumer and Professional Products
18,265
28,373
36,091
92,431
Segment adjusted EBITDA
152,595
148,220
426,437
373,049
Unallocated amounts, excluding
depreciation*
(13,982
)
(13,405
)
(42,388
)
(39,724
)
Adjusted EBITDA
138,613
134,815
384,049
333,325
Net interest expense
(25,207
)
(23,961
)
(74,394
)
(60,985
)
Depreciation and amortization
(15,669
)
(17,688
)
(50,036
)
(47,021
)
Debt extinguishment, net
—
(5,287
)
—
(5,287
)
Gain on sale of building
—
—
10,852
—
Strategic review - retention and other
(5,812
)
(3,220
)
(20,234
)
(3,220
)
Proxy expenses
(568
)
—
(2,685
)
(6,952
)
Acquisition costs
—
—
—
(9,303
)
Restructuring charges
(3,862
)
(5,909
)
(82,196
)
(12,391
)
Intangible asset impairment
—
—
(100,000
)
—
Special dividend ESOP charges
(9,042
)
—
(9,042
)
—
Fair value step-up of acquired inventory
sold
—
(2,700
)
—
(5,401
)
Income before taxes from continuing
operations
$
78,453
$
76,050
$
56,314
$
182,765
* Primarily Corporate Overhead
For the Three Months Ended
June 30,
For the Nine Months Ended June
30,
DEPRECIATION and
AMORTIZATION
2023
2022
2023
2022
Segment:
Home and Building Products
$
3,868
$
4,116
$
11,525
$
12,778
Consumer and Professional Products
11,661
13,434
38,091
33,831
Total segment depreciation and
amortization
15,529
17,550
49,616
46,609
Corporate
140
138
420
412
Total consolidated depreciation and
amortization
$
15,669
$
17,688
$
50,036
$
47,021
Griffon believes free cash flow ("FCF", a non-GAAP measure) is a
useful measure for investors because it portrays the Company's
ability to generate cash from operations for purposes such as
repaying debt, funding acquisitions and paying dividends.
The following table provides a reconciliation of net cash
provided by (used in) operating activities to FCF:
For the Nine Months Ended June
30,
(in thousands)
2023
2022
Net cash provided by (used in) operating
activities
$
309,003
$
(65,001
)
Acquisition of property, plant and
equipment
(20,183
)
(33,516
)
Proceeds from the sale of property, plant
and equipment
11,840
89
FCF
$
300,660
$
(98,428
)
The following tables provide a reconciliation of gross profit
and selling, general and administrative expenses for items that
affect comparability for the three and nine month periods ended
June 30, 2023 and 2022:
(in thousands)
For the Three Months Ended
June 30,
For the Nine Months Ended June
30,
2023
2022
2023
2022
Gross profit, as reported
$
274,624
$
260,601
$
702,941
$
687,086
% of revenue
40.2
%
33.9
%
34.4
%
32.1
%
Adjusting items:
Restructuring charges(1)
1,777
2,441
76,422
5,218
Fair value step-up of acquired inventory
sold
—
2,700
—
5,401
Gross profit, as adjusted
$
276,401
$
265,742
$
779,363
$
697,705
% of revenue
40.4
%
34.6
%
38.1
%
32.6
%
(1) For the quarter and nine months ended June 30, 2023
restructuring charges relates to the CPP global sourcing
expansion.
(in thousands)
For the Three Months Ended
June 30,
For the Nine Months Ended June
30,
2023
2022
2023
2022
Selling, general and administrative
expenses, as reported
$
172,439
$
157,387
$
585,460
$
442,577
% of revenue
25.2
%
20.5
%
28.6
%
20.7
%
Adjusting items:
Restructuring charges(1)
(2,085
)
(3,468
)
(5,774
)
(7,173
)
Intangible asset impairment
—
—
(100,000
)
—
Acquisition costs
—
—
—
(9,303
)
Proxy expenses
(568
)
—
(2,685
)
(6,952
)
Strategic review - retention and other
(5,812
)
(3,220
)
(20,234
)
(3,220
)
Special dividend ESOP charges
(9,042
)
—
(9,042
)
—
Selling, general and administrative
expenses, as adjusted
$
154,932
$
150,699
$
447,725
$
415,929
% of revenue
22.7
%
19.6
%
21.9
%
19.4
%
(1) For the quarter and nine months ended June 30, 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 June
30,
Nine Months Ended June
30,
2023
2022
2023
2022
Revenue
$
683,430
$
768,179
$
2,043,798
$
2,139,545
Cost of goods and services
408,806
507,578
1,340,857
1,452,459
Gross profit
274,624
260,601
702,941
687,086
Selling, general and administrative
expenses
172,439
157,387
485,460
442,577
Intangible asset impairment
—
—
100,000
—
Total operating expenses
172,439
157,387
585,460
442,577
Income from operations
102,185
103,214
117,481
244,509
Other income (expense)
Interest expense
(25,641
)
(24,022
)
(75,168
)
(61,111
)
Interest income
434
61
774
126
Gain on sale of building
—
—
10,852
—
Debt extinguishment, net
—
(5,287
)
—
(5,287
)
Other, net
1,475
2,084
2,375
4,528
Total other expense, net
(23,732
)
(27,164
)
(61,167
)
(61,744
)
Income before taxes from continuing
operations
78,453
76,050
56,314
182,765
Provision for income taxes
29,248
23,268
20,662
55,119
Income from continuing operations
$
49,205
$
52,782
$
35,652
$
127,646
Discontinued operations:
Income from operations of discontinued
operations
—
113,457
—
117,777
Provision for income taxes
—
25,952
—
20,149
Income from discontinued operations
—
87,505
—
97,628
Net income
$
49,205
$
140,287
$
35,652
$
225,274
Basic earnings per common share:
Income from continuing operations
$
0.94
$
1.02
$
0.68
$
2.48
Income from discontinued operations
—
1.69
—
1.89
Basic earnings per common share
$
0.94
$
2.71
$
0.68
$
4.37
Basic weighted-average shares
outstanding
52,304
51,734
52,640
51,527
Diluted earnings per common share:
Income from continuing operations
$
0.90
$
0.98
$
0.65
$
2.38
Income from discontinued operations
—
1.62
—
1.82
Diluted earnings per common share
$
0.90
$
2.60
$
0.65
$
4.19
Diluted weighted-average shares
outstanding
54,602
53,914
55,087
53,704
Dividends paid per common share
$
2.125
$
0.09
$
2.325
$
0.27
Net income
$
49,205
$
140,287
$
35,652
$
225,274
Other comprehensive income (loss), net of
taxes:
Foreign currency translation
adjustments
2,309
(17,823
)
14,580
(14,093
)
Pension and other post retirement
plans
747
1,196
2,355
2,004
Change in cash flow hedges
(2,741
)
2,450
(1,788
)
110
Total other comprehensive income (loss),
net of taxes
315
(14,177
)
15,147
(11,979
)
Comprehensive income, net
$
49,520
$
126,110
$
50,799
$
213,295
GRIFFON CORPORATION AND
SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(Unaudited)
June 30, 2023
September 30,
2022
CURRENT ASSETS
Cash and equivalents
$
151,790
$
120,184
Accounts receivable, net of allowances of
$12,516 and $12,137
359,398
361,653
Inventories
554,958
669,193
Prepaid and other current assets
64,108
62,453
Assets of discontinued operations
984
1,189
Total Current Assets
1,131,238
1,214,672
PROPERTY, PLANT AND EQUIPMENT,
net
262,623
294,561
OPERATING LEASE RIGHT-OF-USE
ASSETS
174,187
183,398
GOODWILL
327,864
335,790
INTANGIBLE ASSETS, net
651,096
761,914
OTHER ASSETS
20,066
21,553
ASSETS OF DISCONTINUED
OPERATIONS
4,141
4,586
Total Assets
$
2,571,215
$
2,816,474
CURRENT LIABILITIES
Notes payable and current portion of
long-term debt
$
10,043
$
12,653
Accounts payable
152,202
194,793
Accrued liabilities
183,161
171,797
Current portion of operating lease
liabilities
29,637
31,680
Liabilities of discontinued operations
7,260
12,656
Total Current Liabilities
382,303
423,579
LONG-TERM DEBT, net
1,536,415
1,560,998
LONG-TERM OPERATING LEASE
LIABILITIES
154,608
159,414
OTHER LIABILITIES
156,533
190,651
LIABILITIES OF DISCONTINUED
OPERATIONS
5,650
4,262
Total Liabilities
2,235,509
2,338,904
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS’ EQUITY
Total Shareholders’ Equity
335,706
477,570
Total Liabilities and Shareholders’
Equity
$
2,571,215
$
2,816,474
GRIFFON CORPORATION AND
SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS (in thousands) (Unaudited)
Nine Months Ended June
30,
2023
2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income
$
35,652
$
225,274
Net income from discontinued
operations
—
(97,628
)
Adjustments to reconcile net income to net
cash provided by (used in) operating activities of continuing
operations:
Depreciation and amortization
50,036
47,021
Stock-based compensation
28,587
15,978
Intangible asset impairments
100,000
—
Asset impairment charges -
restructuring
59,118
2,494
Provision for losses on accounts
receivable
689
1,008
Amortization of debt discounts and
issuance costs
3,068
2,753
Debt extinguishment, net
—
5,287
Fair value step-up of acquired inventory
sold
—
5,401
Deferred income tax provision
(benefit)
(25,744
)
1,465
Gain on sale of assets and investments
(10,852
)
(303
)
Change in assets and liabilities, net of
assets and liabilities acquired:
(Increase) decrease in accounts
receivable
6,236
(81,825
)
(Increase) decrease in inventories
84,190
(135,473
)
(Increase) decrease in prepaid and other
assets
1,887
(13,388
)
Decrease in accounts payable, accrued
liabilities, income taxes payable and operating lease
liabilities
(36,945
)
(44,864
)
Other changes, net
13,081
1,799
Net cash provided by (used in) operating
activities - continuing operations
309,003
(65,001
)
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property, plant and
equipment
(20,183
)
(33,516
)
Acquired businesses, net of cash
acquired
—
(851,464
)
Proceeds (payments) from sale of business,
net
(2,568
)
295,712
Proceeds from investments
—
14,923
Proceeds from the sale of property, plant
and equipment
11,840
89
Net cash used in investing activities -
continuing operations
(10,911
)
(574,256
)
CASH FLOWS FROM FINANCING ACTIVITIES:
Dividends paid
(127,372
)
(14,906
)
Purchase of shares for treasury
(98,350
)
(10,886
)
Proceeds from long-term debt
102,558
984,314
Payments of long-term debt
(139,244
)
(427,883
)
Financing costs
—
(17,065
)
Other, net
(152
)
188
Net cash provided by ( used in) financing
activities - continuing operations
(262,560
)
513,762
GRIFFON CORPORATION AND
SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS (in thousands) (Unaudited)
Nine Months Ended June
30,
2023
2022
CASH FLOWS FROM DISCONTINUED
OPERATIONS:
Net cash provided by (used in) operating
activities
(2,799
)
26,889
Net cash used in investing activities
—
(2,627
)
Net cash provided by (used in)
discontinued operations
(2,799
)
24,262
Effect of exchange rate changes on cash
and equivalents
(1,127
)
(2,733
)
NET INCREASE (DECREASE) IN CASH AND
EQUIVALENTS
31,606
(103,966
)
CASH AND EQUIVALENTS AT BEGINNING OF
PERIOD
120,184
248,653
CASH AND EQUIVALENTS AT END OF PERIOD
$
151,790
$
144,687
Griffon evaluates performance based on adjusted income from
continuing operations 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 income from continuing operations to adjusted
income from continuing operations and earnings per common share
from continuing operations to adjusted earnings per common share
from continuing operations:
(in thousands, except per share
data)
For the Three Months Ended
June 30,
For the Nine Months Ended June
30,
2023
2022
2023
2022
Income from continuing operations
$
49,205
$
52,782
$
35,652
$
127,646
Adjusting items:
Restructuring charges(1)
3,862
5,909
82,196
12,391
Intangible asset impairment
—
—
100,000
—
Debt extinguishment, net
—
5,287
—
5,287
Gain on sale of building
—
—
(10,852
)
—
Acquisition costs
—
—
—
9,303
Special dividend ESOP charges
9,042
—
9,042
—
Strategic review - retention and other
5,812
3,220
20,234
3,220
Secondary equity offering costs
—
—
—
—
Proxy expenses
568
—
2,685
6,952
Fair value step-up of acquired inventory
sold(2)
—
2,700
—
5,401
Tax impact of above items(3)
(4,704
)
(4,314
)
(51,759
)
(9,411
)
Discrete and certain other tax provisions
(benefits), net(4)
6,519
913
(2,537
)
(661
)
Adjusted income from continuing
operations
$
70,304
$
66,497
$
184,661
$
160,128
Earnings per common share from continuing
operations
$
0.90
$
0.98
$
0.65
$
2.38
Adjusting items, net of tax:
Restructuring charges(1)
0.05
0.08
1.11
0.17
Intangible asset impairment
—
—
1.35
—
Debt extinguishment, net
—
0.07
—
0.07
Gain on sale of building
—
—
(0.15
)
—
Acquisition costs
—
—
—
0.15
Special dividend ESOP charges
0.13
—
0.13
—
Strategic review - retention and other
0.08
0.04
0.28
0.04
Proxy expenses
0.01
—
0.04
0.10
Fair value step-up of acquired inventory
sold
—
0.04
—
0.07
Discrete and certain other tax provisions
(benefits), net(4)
0.12
0.02
(0.05
)
(0.01
)
Adjusted earnings per common share from
continuing operations
$
1.29
$
1.23
$
3.35
$
2.98
Diluted weighted-average shares
outstanding (in thousands)
54,602
53,914
55,087
53,704
Note: Due to rounding, the sum of earnings per common share from
continuing operations and adjusting items, net of tax, may not
equal adjusted earnings per common share from continuing
operations.
(1) For the quarter and nine months ended June 30, 2023,
restructuring charges relate to the CPP global sourcing expansion,
of which $1,777 and $76,422, respectively, is included in Cost of
goods and services and $2,085 and $5,774, respectively, is included
in SG&A.
(2) The fair value step-up of acquired inventory sold is
included in Cost of goods and services.
(3) The tax impact for the above reconciling adjustments from
GAAP to non-GAAP Net income and EPS is determined by comparing the
Company's tax provision, including the reconciling adjustments, to
the tax provision excluding such adjustments.
(4) Discrete and certain other tax benefits 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/20230801702517/en/
Company Contact Brian G. Harris SVP
& Chief Financial Officer Griffon Corporation (212) 957-5000
IR@griffon.com
Investor Relations Contact Michael
Callahan Managing Director ICR Inc. (203) 682-8311
Griffon (NYSE:GFF)
Historical Stock Chart
From Apr 2024 to May 2024
Griffon (NYSE:GFF)
Historical Stock Chart
From May 2023 to May 2024