Griffon Corporation Announces Third Quarter Results
- Adjusted income from continuing operations increased by 6%
- HBP segment's adjusted EBITDA increased by 12%
- Raised full-year EBITDA guidance to $550 million
- Repurchased 4.4% of total outstanding shares
- CPP segment's revenue decreased by 22%
- CPP incurred pre-tax cash restructuring charges of $3.9 million
- Effective tax rates increased from the prior year
Revenue for the third quarter totaled
Income from continuing operations totaled
Adjusted EBITDA from continuing operations for the third quarter was
"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
Segment Operating Results
Home and Building Products ("HBP")
HBP revenue in the current quarter of
HBP adjusted EBITDA in the current quarter was
Consumer and Professional Products ("CPP")
CPP revenue in the current quarter of
For the current quarter, adjusted EBITDA was
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
The global sourcing strategy expansion is expected to be complete by the end of calendar 2024. Over that period, CPP expects to reduce its
Implementation of this strategy over the duration of the project will result in charges of
During the quarter ended June 30, 2023, CPP incurred pre-tax cash restructuring charges of
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
Balance Sheet and Capital Expenditures
At June 30, 2023, the Company had cash and equivalents of
On April 20, 2023, Griffon announced that the Board of Directors approved an increase of its share repurchase authorization to
2023 Outlook
We continue to expect 2023 revenue of
We now expect depreciation to be
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 (
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 (
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
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 throughoutNorth America under the brands Clopay, Ideal, andHolmes . 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
|
|
For the Nine Months Ended
|
||||||||
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
|
|
For the Nine Months Ended
|
||||||||||||
|
|
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
|
|
For the Nine Months Ended
|
||||||||
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
|
|
For the Nine Months Ended
|
||||||||||||
|
|
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
|
|||||||||||||||
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
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
|
|||||
|
(Unaudited) |
|
|
||
|
June 30,
|
|
September 30,
|
||
CURRENT ASSETS |
|
|
|
||
Cash and equivalents |
$ |
151,790 |
|
$ |
120,184 |
Accounts receivable, net of allowances of |
|
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
|
|||||||
|
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
|
|||||||
|
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
|
|
For the Nine Months Ended
|
||||||||||||
|
|
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
(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
Source: Griffon Corporation
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