Griffon Corporation Announces Third Quarter Results

NEW YORK–(BUSINESS WIRE)–Griffon Corporation (“Griffon” or the “Company”) (NYSE:GFF) today reported results for the fiscal third quarter ended June 30, 2022.

Revenue for the third quarter totaled $768.2 million, a 31% increase compared to the prior year of $584.2 million. Revenue excluding the Hunter acquisition increased 13% to $662.4 million. Hunter contributed $105.8 million.

Income from continuing operations totaled $52.8 million, or $0.98 per share, compared to $14.8 million, or $0.28 per share, in the prior year quarter. Current year third quarter adjusted income from continuing operations was a record $66.5 million, or $1.23 per share, compared to $20.8 million, or $0.39 per share, in the prior year quarter (see reconciliation of Income from continuing operations to Adjusted income from continuing operations for details).

Adjusted EBITDA from continuing operations for the third quarter was $134.8 million, increasing 124% from the prior year quarter of $60.1 million. Adjusted EBITDA from continuing operations, excluding unallocated amounts (primarily corporate overhead) of $13.4 million in the current quarter and $11.5 million in the prior year quarter, totaled $148.2 million, increasing 107% from the prior year of $71.5 million. Adjusted EBITDA is defined as net income excluding interest income and expense, income taxes, depreciation and amortization, restructuring charges, loss on debt extinguishment and acquisition related expenses, as well as other items that may affect comparability, as applicable (for a reconciliation of “Adjusted EBITDA”, a non-GAAP measure, to income before taxes from continuing operations, see the attached table).

On June 27, 2022, Griffon closed the sale of Telephonics to TTM Technologies, Inc. (NASDAQ: TTMI) for $330 million in cash, subject to customary post-closing adjustments.

On May 16, 2022, Griffon announced that its Board of Directors initiated a process to review a comprehensive range of strategic alternatives to maximize shareholder value including a sale, merger, divestiture, recapitalization or other strategic transaction. This process is ongoing and, as previously announced, Griffon does not intend to disclose further developments until its Board approves a specific transaction or otherwise concludes its review of strategic alternatives. Griffon has retained Goldman Sachs & Co. LLC as its financial advisor, and Dechert LLP as its legal counsel to assist in the review process.

Ronald J. Kramer, Chairman and Chief Executive Officer, commented, “We are very pleased with our operating performance this quarter. Griffon’s results highlight the abilities of our strong management teams and global workforce to navigate through a challenging macroeconomic environment while continuing to execute on our plan.

Griffon’s third quarter results were driven by strength in the Home and Building Products segment, with favorable price trends partially offset by reduced residential volume. Commercial product performance was particularly strong due to favorable volume and pricing, as we continue to realize benefits from the investments we made in CornellCookson and its integration with Clopay.

Consumer and Professional Products continues to experience reduced volume in the North American and United Kingdom markets due to slowing consumer demand and rebalancing of customer inventory levels, partially offset by price realization and the contribution of the Hunter Fan Company.

The trends experienced in each of our segments through the third quarter are expected to continue for the remainder of the year. We remain on target to achieve our full-year revenue guidance of $2.85 billion with at least $475 million of EBITDA before unallocated costs. Leverage at the end of the year is expected to be below 3.0x net debt to EBITDA.”

Further, acknowledging the legacy of Telephonics, Mr. Kramer said, “Telephonics had been a part of Griffon since 1961. Over the years, the company grew from a provider of radio communication equipment and inflight entertainment systems to a Tier 1 contractor supplying vital defense electronic systems. We are confident that TTM Technologies and Telephonics leadership, along with the dedicated and hardworking Telephonics employees, will continue the company’s long heritage of innovation, engineering, and manufacturing supporting national and global security. We wish them all the best.”

Segment Operating Results

Consumer and Professional Products (“CPP”)

CPP revenue in the current quarter totaling $362.6 million increased 12% compared to the prior year period primarily resulting from a 33% or $105.8 million contribution from the Hunter acquisition, and price and mix of 10%, partially offset by a 28% reduction in volume, primarily in North America and the United Kingdom, due to reduced consumer demand and rebalancing of customer inventory levels. Foreign exchange was 3% unfavorable.

For the current quarter, Adjusted EBITDA totaling $28.4 million decreased 3% compared to the prior year. The current quarter included EBITDA of $16.8 million from the Hunter acquisition. Excluding the Hunter contribution, EBITDA decreased 61% primarily due to the unfavorable impact of the reduced North American and United Kingdom volume and increased material, labor and transportation costs, partially offset by the benefits of price and mix. The current quarter included increased demurrage and detention costs, primarily related to COVID and global supply chain disruptions, of approximately $6.5 million, primarily related to Hunter.

Home and Building Products (“HBP”)

HBP revenue in the current quarter totaling $405.5 million increased 56% from the prior year period, due to favorable pricing and mix for both residential and commercial products. Increased commercial volume was offset by reduced residential volume due to labor and supply chain disruptions.

HBP Adjusted EBITDA in the current quarter was $119.8 million, increasing 184% compared to the prior year. EBITDA benefited from the increased revenue noted above, partially offset by increased material, labor and transportation costs.

Taxes

The Company reported pretax income from continuing operations for the quarters ended June 30, 2022 and 2021, respectively, and recognized tax provisions of 30.6% and 44.9%, respectively. Excluding all items that affect comparability, the effective tax rates for the quarters ended June 30, 2022 and 2021 were 28.6% and 32.9%, respectively. The current year-to-date effective tax rate was 30.2% and the rate excluding all items that affect comparability was 28.9%.

Balance Sheet and Capital Expenditures

At June 30, 2022, the Company had cash and equivalents of $144.7 million and total debt outstanding of $1.59 billion, resulting in net debt of $1.44 billion. Leverage, as calculated in accordance with our credit agreement, was 3.2x net debt to EBITDA. Borrowing availability under the revolving credit facility was $289.9 million subject to certain loan covenants. Capital expenditures were $11.5 million for the quarter ended June 30, 2022.

On June 27, 2022, Griffon prepaid $300 million principal amount of its $800 million Term Loan B credit facility, and during the quarter Griffon repurchased $15.2 million of its 5.75% Senior Notes due 2028 for $14.3 million or 92.2% of par. Subsequent to the end of the quarter, Griffon repurchased $10 million of its 5.75% Senior Notes due 2028 for $9.1 million or 91.25% of par.

As of June 30, 2022, Griffon had $58 million remaining under its Board of Directors authorized share repurchase program. There were no share repurchases under these authorizations during the quarter ended June 30, 2022.

On July 20, 2022, Griffon paid a $2.00 per share special dividend to shareholders of record as of July 8, 2022. The special dividend, combined with the three $0.09 quarterly dividends paid earlier this fiscal year and the $0.09 dividend announced earlier today, will result in total fiscal 2022 dividends paid of $2.36 per share.

Conference Call Information

Given the ongoing review of strategic alternatives, Griffon will not be hosting a conference call in connection with its third quarter financial results.

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 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: the impact of the strategic alternatives review process announced in May 2022; current economic conditions and uncertainties in the housing, credit and capital markets; Griffon’s ability to achieve expected savings from cost control, restructuring, integration and disposal initiatives; the ability to identify and successfully consummate, and integrate, value-adding acquisition opportunities (including, in particular, integration of the Hunter Fan acquisition); 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 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; the impact of 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 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:

  • 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.
  • 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 CornellCookson brand.

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 operating results from continuing operations before interest income and expense, income taxes, depreciation and amortization, restructuring charges, loss from debt extinguishment and acquisition related expenses, as well as other items that may affect comparability, as applicable (“Adjusted EBITDA”, a non-GAAP measure). Griffon believes this information is useful to investors.

The following table provides operating highlights and a reconciliation of 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

2022

 

2021

 

2022

 

2021

Consumer and Professional Products

$

362,634

 

$

324,826

 

$

1,056,819

 

$

947,739

Home and Building Products

 

405,545

 

 

259,392

 

 

1,082,726

 

 

752,684

Total revenue

$

768,179

 

$

584,218

 

$

2,139,545

 

$

1,700,423

 

For the Three Months Ended June 30,

 

For the Nine Months Ended June 30,

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

ADJUSTED EBITDA

 

 

 

 

 

 

 

Consumer and Professional Products

$

28,373

 

 

$

29,388

 

 

$

92,431

 

 

$

99,524

 

Home and Building Products

 

119,847

 

 

 

42,156

 

 

 

280,618

 

 

 

130,585

 

Total Segments

 

148,220

 

 

 

71,544

 

 

 

373,049

 

 

 

230,109

 

Unallocated amounts, excluding depreciation*

 

(13,405

)

 

 

(11,464

)

 

 

(39,724

)

 

 

(36,810

)

Adjusted EBITDA

 

134,815

 

 

 

60,080

 

 

 

333,325

 

 

 

193,299

 

Net interest expense

 

(23,961

)

 

 

(15,800

)

 

 

(60,985

)

 

 

(46,973

)

Depreciation and amortization

 

(17,688

)

 

 

(13,306

)

 

 

(47,021

)

 

 

(39,118

)

Debt extinguishment, net

 

(5,287

)

 

 

 

 

 

(5,287

)

 

 

 

Restructuring charges

 

(5,909

)

 

 

(4,081

)

 

 

(12,391

)

 

 

(14,662

)

Acquisition costs

 

 

 

 

 

 

 

(9,303

)

 

 

 

Strategic review – retention and other

 

(3,220

)

 

 

 

 

 

(3,220

)

 

 

 

Proxy expenses

 

 

 

 

 

 

 

(6,952

)

 

 

 

Fair value step-up of acquired inventory sold

 

(2,700

)

 

 

 

 

 

(5,401

)

 

 

 

Income before taxes from continuing operations

$

76,050

 

 

$

26,893

 

 

$

182,765

 

 

$

92,546

 

* Primarily Corporate Overhead

 

 

 

 

 

 

 

 

For the Three Months Ended June 30,

 

For the Nine Months Ended June 30,

DEPRECIATION and AMORTIZATION

2022

 

2021

 

2022

 

2021

Segment:

 

 

 

 

 

 

 

Consumer and Professional Products

$

13,434

 

$

8,781

 

$

33,831

 

$

25,600

Home and Building Products

 

4,116

 

 

4,375

 

 

12,778

 

 

13,095

Total segment depreciation and amortization

 

17,550

 

 

13,156

 

 

46,609

 

 

38,695

Corporate

 

138

 

 

150

 

 

412

 

 

423

Total consolidated depreciation and amortization

$

17,688

 

$

13,306

 

$

47,021

 

$

39,118

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)

 

2022

 

 

 

2021

 

Net cash provided by (used in) operating activities

$

(65,001

)

 

$

13,314

 

Acquisition of property, plant and equipment

 

(33,516

)

 

 

(24,949

)

Proceeds from the sale of property, plant and equipment

 

89

 

 

 

116

 

Free Cash Flow provided by Defense Electronics

 

23,632

 

 

 

19,765

 

FCF

$

(74,796

)

 

$

8,246

 

 

 

 

 

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, 2022 and 2021:

 

For the Three Months Ended June 30,

 

For the Nine Months Ended June 30,

(in thousands)

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

Gross Profit, as reported

$

260,601

 

 

$

159,902

 

 

$

687,086

 

 

$

485,244

 

% of revenue

 

33.9

%

 

 

27.4

%

 

 

32.1

%

 

 

28.5

%

Adjusting items:

 

 

 

 

 

 

 

Restructuring charges

 

2,441

 

 

 

695

 

 

 

5,218

 

 

 

4,573

 

Fair value step-up of acquired inventory sold

 

2,700

 

 

 

 

 

 

5,401

 

 

 

 

Gross Profit, as adjusted

$

265,742

 

 

$

160,597

 

 

$

697,705

 

 

$

489,817

 

% of revenue

 

34.6

%

 

 

27.5

%

 

 

32.6

%

 

 

28.8

%

 

For the Three Months Ended June 30,

 

For the Nine Months Ended June 30,

(in thousands)

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

Selling, general and administrative expenses, as reported

$

157,387

 

 

$

117,796

 

 

$

442,577

 

 

$

347,138

 

% of revenue

 

20.5

%

 

 

20.2

%

 

 

20.7

%

 

 

20.4

%

Adjusting items:

 

 

 

 

 

 

 

Restructuring charges

 

(3,468

)

 

 

(3,385

)

 

 

(7,173

)

 

 

(10,088

)

Acquisition costs

 

 

 

 

 

 

 

(9,303

)

 

 

 

Proxy expenses

 

 

 

 

 

 

 

(6,952

)

 

 

 

Strategic review – retention and other

 

(3,220

)

 

 

 

 

 

(3,220

)

 

 

 

Selling, general and administrative expenses, as adjusted

$

150,699

 

 

$

114,411

 

 

$

415,929

 

 

$

337,050

 

% of revenue

 

19.6

%

 

 

19.6

%

 

 

19.4

%

 

 

19.8

%

GRIFFON CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

AND COMPREHENSIVE INCOME

(in thousands, except per share data)

(Unaudited)

 

 

Three Months Ended June 30,

 

Nine Months Ended June 30,

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

Revenue

$

768,179

 

 

$

584,218

 

 

$

2,139,545

 

 

$

1,700,423

 

Cost of goods and services

 

507,578

 

 

 

424,316

 

 

 

1,452,459

 

 

 

1,215,179

 

Gross profit

 

260,601

 

 

 

159,902

 

 

 

687,086

 

 

 

485,244

 

Selling, general and administrative expenses

 

157,387

 

 

 

117,796

 

 

 

442,577

 

 

 

347,138

 

Income from operations

 

103,214

 

 

 

42,106

 

 

 

244,509

 

 

 

138,106

 

Other income (expense)

 

 

 

 

 

 

 

Interest expense

 

(24,022

)

 

 

(15,849

)

 

 

(61,111

)

 

 

(47,370

)

Interest income

 

61

 

 

 

49

 

 

 

126

 

 

 

397

 

Debt extinguishment, net

 

(5,287

)

 

 

 

 

 

(5,287

)

 

 

 

Other, net

 

2,084

 

 

 

587

 

 

 

4,528

 

 

 

1,413

 

Total other expense, net

 

(27,164

)

 

 

(15,213

)

 

 

(61,744

)

 

 

(45,560

)

Income before taxes from continuing operations

 

76,050

 

 

 

26,893

 

 

 

182,765

 

 

 

92,546

 

Provision for income taxes

 

23,268

 

 

 

12,078

 

 

 

55,119

 

 

 

34,868

 

Income from continuing operations

$

52,782

 

 

$

14,815

 

 

$

127,646

 

 

$

57,678

 

 

 

 

 

 

 

 

 

Discontinued operations:

 

 

 

 

 

 

 

Income from operations of discontinued operations

 

113,457

 

 

 

2,180

 

 

 

117,777

 

 

 

3,556

 

Provision (benefit) for income taxes

 

25,952

 

 

 

287

 

 

 

20,149

 

 

 

(2,085

)

Income from discontinued operations

 

87,505

 

 

 

1,893

 

 

 

97,628

 

 

 

5,641

 

Net income

$

140,287

 

 

$

16,708

 

 

$

225,274

 

 

$

63,319

 

 

 

 

 

 

 

 

 

Basic earnings per common share:

 

 

 

 

 

 

 

Income from continuing operations

$

1.02

 

 

$

0.29

 

 

$

2.48

 

 

$

1.14

 

Income from discontinued operations

 

1.69

 

 

 

0.04

 

 

 

1.89

 

 

 

0.11

 

Basic earnings per common share

$

2.71

 

 

$

0.33

 

 

$

4.37

 

 

$

1.25

 

 

 

 

 

 

 

 

 

Basic weighted-average shares outstanding

 

51,734

 

 

 

50,903

 

 

 

51,527

 

 

 

50,779

 

 

 

 

 

 

 

 

 

Diluted earnings per common share:

 

 

 

 

 

 

 

Income from continuing operations

$

0.98

 

 

$

0.28

 

 

$

2.38

 

 

$

1.08

 

Income from discontinued operations

 

1.62

 

 

 

0.04

 

 

 

1.82

 

 

 

0.11

 

Diluted earnings per common share

$

2.60

 

 

$

0.31

 

 

$

4.19

 

 

$

1.19

 

 

 

 

 

 

 

 

 

Diluted weighted-average shares outstanding

 

53,914

 

 

 

53,504

 

 

 

53,704

 

 

 

53,306

 

 

 

 

 

 

 

 

 

Dividends paid per common share

$

0.09

 

 

$

0.08

 

 

$

0.27

 

 

$

0.24

 

Net income

$

140,287

 

 

$

16,708

 

 

$

225,274

 

 

$

63,319

 

Other comprehensive income (loss), net of taxes:

 

 

 

 

 

 

 

Foreign currency translation adjustments

 

(17,822

)

 

 

1,160

 

 

 

(14,092

)

 

 

15,022

 

Pension and other post retirement plans

 

1,196

 

 

 

1,245

 

 

 

2,004

 

 

 

4,196

 

Change in cash flow hedges

 

2,450

 

 

 

351

 

 

 

110

 

 

 

1,454

 

Total other comprehensive income (loss), net of taxes

 

(14,176

)

 

 

2,756

 

 

 

(11,978

)

 

 

20,672

 

Comprehensive income, net

$

126,111

 

 

$

19,464

 

 

$

213,296

 

 

$

83,991

 

GRIFFON CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

 

 

(Unaudited)

 

 

 

June 30,
2022

 

September 30,
2021

CURRENT ASSETS

 

 

 

Cash and equivalents

$

144,687

 

$

248,653

Accounts receivable, net of allowances of $13,541 and $8,787

 

429,683

 

 

294,804

Inventories

 

708,178

 

 

472,794

Prepaid and other current assets

 

59,111

 

 

76,009

Assets of discontinued operations held for sale

 

 

 

275,814

Assets of discontinued operations

 

487

 

 

605

Total Current Assets

 

1,342,146

 

 

1,368,679

PROPERTY, PLANT AND EQUIPMENT, net

 

299,844

 

 

290,222

OPERATING LEASE RIGHT-OF-USE ASSETS

 

193,448

 

 

144,598

GOODWILL

 

705,356

 

 

426,148

INTANGIBLE ASSETS, net

 

939,024

 

 

350,025

OTHER ASSETS

 

21,791

 

 

21,589

ASSETS OF DISCONTINUED OPERATIONS

 

2,623

 

 

3,424

Total Assets

$

3,504,232

 

$

2,604,685

 

 

 

 

CURRENT LIABILITIES

 

 

 

Notes payable and current portion of long-term debt

$

13,085

 

$

12,486

Accounts payable

 

212,038

 

 

260,038

Accrued liabilities

 

306,282

 

 

144,928

Current portion of operating lease liabilities

 

32,426

 

 

29,881

Liabilities of discontinued operations held for sale

 

 

 

81,023

Liabilities of discontinued operations

 

30,806

 

 

3,280

Total Current Liabilities

 

594,637

 

 

531,636

LONG-TERM DEBT, net

 

1,574,697

 

 

1,033,197

LONG-TERM OPERATING LEASE LIABILITIES

 

167,549

 

 

119,315

OTHER LIABILITIES

 

257,209

 

 

109,585

LIABILITIES OF DISCONTINUED OPERATIONS

 

3,825

 

 

3,794

Total Liabilities

 

2,597,917

 

 

1,797,527

COMMITMENTS AND CONTINGENCIES

 

 

 

SHAREHOLDERS’ EQUITY

 

 

 

Total Shareholders’ Equity

 

906,315

 

 

807,158

Total Liabilities and Shareholders’ Equity

$

3,504,232

 

$

2,604,685

GRIFFON CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(Unaudited)

 

 

Nine Months Ended June 30,

 

 

2022

 

 

 

2021

 

 

 

 

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

Net income

$

225,274

 

 

$

63,319

 

Net income from discontinued operations

 

(97,628

)

 

 

(5,641

)

Adjustments to reconcile net income to net cash used in operating activities of continuing operations:

 

 

 

Depreciation and amortization

 

47,021

 

 

 

39,118

 

Stock-based compensation

 

15,978

 

 

 

15,091

 

Asset impairment charges – restructuring

 

2,494

 

 

 

3,883

 

Provision for losses on accounts receivable

 

1,008

 

 

 

173

 

Amortization of debt discounts and issuance costs

 

2,753

 

 

 

2,019

 

Debt extinguishment, net

 

5,287

 

 

 

 

Fair value step-up of acquired inventory sold

 

5,401

 

 

 

 

Deferred income taxes

 

1,465

 

 

 

7,232

 

(Gain) loss on sale of assets and investments

 

(303

)

 

 

155

 

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

 

 

 

Increase in accounts receivable

 

(81,825

)

 

 

(34,914

)

Increase in inventories

 

(135,473

)

 

 

(101,553

)

(Increase) decrease in prepaid and other assets

 

(13,388

)

 

 

(4,359

)

Increase (decrease) in accounts payable, accrued liabilities, income taxes payable and operating lease liabilities

 

(44,864

)

 

 

27,180

 

Other changes, net

 

1,799

 

 

 

1,611

 

Net cash (used in) provided by operating activities – continuing operations

 

(65,001

)

 

 

13,314

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

Acquisition of property, plant and equipment

 

(33,516

)

 

 

(24,949

)

Acquired businesses, net of cash acquired

 

(851,464

)

 

 

(2,242

)

Proceeds from sale of business, net

 

295,712

 

 

 

 

Proceeds (payments) from investments

 

14,923

 

 

 

(4,658

)

Proceeds from the sale of property, plant and equipment

 

89

 

 

 

116

 

Other, net

 

 

 

 

28

 

 

 

 

 

Net cash used in investing activities – continuing operations

 

(574,256

)

 

 

(31,705

)

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

Dividends paid

 

(14,906

)

 

 

(12,907

)

Purchase of shares for treasury

 

(10,886

)

 

 

(2,909

)

Proceeds from long-term debt

 

984,314

 

 

 

20,587

 

Payments of long-term debt

 

(427,883

)

 

 

(18,255

)

Financing costs

 

(17,065

)

 

 

(571

)

Other, net

 

188

 

 

 

(272

)

Net cash provided by (used) in financing activities – continuing operations

 

513,762

 

 

 

(14,327

)

 

 

 

 

Contacts

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

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