Financial Data and Key Metrics Changes - In Q1 2025, the company reported revenue of $632 million, a decrease of 2% compared to the prior year quarter, while adjusted EBITDA increased by 11% to $145 million, resulting in an EBITDA margin of 23%, up 270 basis points [13][15] - Free cash flow for the quarter was robust at $143 million, reflecting solid operating performance [7] - GAAP net income was $71 million or $1.49 per share, compared to $42 million or $0.82 per share in the prior year quarter [15] Business Line Data and Key Metrics Changes - Home & Building Products (HBP) revenue was consistent with the prior year, with EBITDA increasing by 2% due to reduced material costs, offset by increased labor and distribution costs [7][17] - Consumer and Professional Products (CPP) revenue decreased by 4% to $237 million, primarily due to decreased volume in North America and the UK, although Australia saw growth from increased product offerings and the Pope acquisition [8][18] - CPP EBITDA increased by $13 million to $18 million, reflecting the positive effects of global sourcing expansion [9][18] Market Data and Key Metrics Changes - The company noted that residential volume in HBP increased, while commercial volume decreased, indicating a shift in market demand [7][20] - In CPP, the company experienced reduced consumer demand in North America and the UK, but organic growth in Australia was noted [8][18] Company Strategy and Development Direction - The company is focused on a capital allocation strategy that includes investing in businesses, opportunistically repurchasing shares, and reducing debt [23] - The management expressed confidence in maintaining long-term EBITDA margin targets despite potential tariff impacts, emphasizing a diversified global supply chain [28][29] Management Comments on Operating Environment and Future Outlook - Management indicated that fiscal 2025 is off to a strong start, with expectations for continued solid performance in HBP and improved profitability in CPP [22] - The company anticipates that HBP and CPP revenues will align with 2024 levels, with HBP benefiting from increased residential volume and CPP reflecting growth in Australia [20][21] Other Important Information - The company repurchased $42 million of its stock during the first quarter, with $390 million remaining under repurchase authorization [10] - A quarterly dividend of $0.18 per share was authorized, marking the 54th consecutive quarterly dividend [11] Q&A Session Summary Question: Geographical mix of imported products in CPP - Management acknowledged significant imports from China related to specific businesses and discussed strategies to mitigate tariff impacts [26][28] Question: Update on capital allocation strategy - Management indicated a preference for stock buybacks over debt paydown at current levels, while maintaining the ability to do both [30][31] Question: Key steps for CPP margin expansion - Management outlined a transition from manufactured to sourced inventory and emphasized leveraging global supply chains for margin improvement [34][35] Question: Performance in residential and commercial door markets - Management noted strong performance in high-end residential doors, while commercial volumes have been affected by soft market indicators [38][40] Question: Impact of tariffs on CPP guidance - Management confirmed that they are factoring in tariff navigation strategies into their guidance for the year [42][44] Question: Status of spring product inventory - A significant portion of the spring product has already landed, reducing exposure to tariffs [53][54] Question: Future CPP margins with demand recovery - Management indicated that current margins are around 15%, with expectations for improvement as demand recovers [56][57] Question: Additional proceeds from real estate sales - Management expects at least $5 million from held-for-sale assets on the balance sheet [58][59]

Core Viewpoint - Griffon (GFF) reported quarterly earnings of $1.39 per share, exceeding the Zacks Consensus Estimate of $1.28 per share, and showing an increase from $1.07 per share a year ago, indicating a positive earnings surprise of 8.59% [1][2] Financial Performance - The company posted revenues of $632.37 million for the quarter ended December 2024, which was 1.19% below the Zacks Consensus Estimate and a decrease from $643.15 million in the same quarter last year [2] - Over the last four quarters, Griffon has surpassed consensus EPS estimates three times and topped consensus revenue estimates two times [2] Stock Performance - Griffon shares have increased approximately 4.3% since the beginning of the year, outperforming the S&P 500's gain of 2.7% [3] Future Outlook - The company's earnings outlook is crucial for investors, with current consensus EPS estimates at $1.23 for the coming quarter and $5.51 for the current fiscal year, with expected revenues of $641 million and $2.62 billion respectively [7] - The estimate revisions trend for Griffon is currently mixed, resulting in a Zacks Rank 3 (Hold), suggesting the stock is expected to perform in line with the market in the near future [6] Industry Context - The Diversified Operations industry, to which Griffon belongs, is currently ranked in the bottom 34% of over 250 Zacks industries, indicating potential challenges ahead [8]

Revenue and Income - Revenue for Q1 2025 totaled $632.4 million, a 2% decrease from $643.2 million in Q1 2024[2] - Net income for Q1 2025 was $70.9 million, or $1.49 per share, compared to $42.2 million, or $0.82 per share, in Q1 2024[3] - Revenue for the three months ended December 31, 2024, was $632,371, down from $643,153 in 2023, a decrease of 1.2%[26] - Net income for the three months ended December 31, 2024, was $70,851, compared to $42,177 in 2023, an increase of 67.6%[26] - For the three months ended December 31, 2024, net income increased to $70.851 million from $42.177 million in the same period of 2023, representing a growth of 67.8%[33] - Earnings per common share rose to $1.49, up from $0.82 in the prior year, marking an increase of 81.7%[33] Adjusted Metrics - Adjusted EBITDA for Q1 2025 was $131.2 million, a 13% increase from $116.4 million in Q1 2024[4] - The adjusted EBITDA for the twelve months ended December 31, 2024, was $554,241, compared to $538,416 in 2023, an increase of 2.9%[21] - Adjusted net income for the same period was $65.873 million, compared to $55.267 million in 2023, reflecting an increase of 19.2%[33] - Adjusted earnings per common share increased to $1.39 from $1.07, a growth of 29.9%[33] Cash Flow and Debt - Free cash flow for Q1 2025 was $143 million, reflecting strong operating performance[5] - Free cash flow (FCF) for the three months ended December 31, 2024, was $142,686, compared to $132,515 in 2023, representing an increase of 7.7%[21] - As of December 31, 2024, total debt outstanding was $1.48 billion, resulting in net debt of $1.32 billion[10] - The net debt to EBITDA leverage ratio improved to 2.4x as of December 31, 2024, down from 2.5x in 2023[21] Segment Performance - Home and Building Products (HBP) revenue for Q1 2025 was $395.4 million, consistent with the prior year quarter[6] - Consumer and Professional Products (CPP) revenue for Q1 2025 was $237.0 million, a 4% decrease compared to Q1 2024, primarily due to an 8% decrease in volume[7] - The Pope acquisition contributed 4% to CPP revenue despite overall volume decline[7] Expenses and Tax - Selling, general and administrative expenses for the three months ended December 31, 2024, were $152,181, slightly down from $152,803 in 2023[24] - The effective tax rate for Q1 2025 was 27.3%, down from 29.9% in Q1 2024[9] - The tax impact of reconciling adjustments from GAAP to non-GAAP net income and EPS was calculated based on the company's tax provision[35] - Discrete and certain other tax provisions primarily relate to the impact of a rate differential between statutory and annual effective tax rates[35] Shareholder Returns - Share repurchases in Q1 2025 totaled 0.6 million shares for $42.3 million, averaging $69.40 per share[11] - The company paid dividends of $0.18 per share in the three months ended December 31, 2024, compared to $0.15 per share in 2023[26] Assets and Cash Position - Cash and equivalents increased to $151,952 as of December 31, 2024, from $110,546 in 2023, an increase of 37.5%[31] - Total assets decreased to $2,325,152 as of December 31, 2024, from $2,370,954 as of September 30, 2024[29] Restructuring Charges - Restructuring charges related to the CPP global sourcing expansion totaled $12.4 million, with $11.6 million included in Cost of goods and services and $0.8 million in SG&A[34]

Core Viewpoint - Griffon (GFF) has shown strong performance in recent trading sessions, with a notable increase in share price and positive expectations for upcoming earnings [1][2]. Company Performance - Griffon's share price closed at $77.70, reflecting a +1.44% change from the previous trading day, outperforming the S&P 500's gain of 0.53% [1]. - Over the past month, Griffon's shares have gained 7.48%, significantly higher than the Conglomerates sector's gain of 2.26% and the S&P 500's gain of 1.24% [2]. Upcoming Financial Results - Griffon is set to announce its earnings on February 5, 2025, with an expected EPS of $1.28, representing a 19.63% increase from the same quarter last year [3]. - The consensus estimate for revenue is $640 million, indicating a slight decrease of 0.49% compared to the previous year [3]. Annual Estimates - For the annual period, the Zacks Consensus Estimates project earnings of $5.51 per share and revenue of $2.62 billion, reflecting increases of +7.62% and a slight decrease of -0.1% respectively from the last year [4]. Analyst Sentiment - Recent changes in analyst estimates for Griffon indicate a positive outlook, suggesting optimism regarding the company's business and profitability [4]. - The Zacks Rank for Griffon is currently 3 (Hold), with the consensus EPS projection remaining stable over the past 30 days [6]. Valuation Metrics - Griffon's Forward P/E ratio is 13.9, which is lower than the industry average of 15.33, indicating that Griffon is trading at a discount compared to its peers [7]. - The Diversified Operations industry, which includes Griffon, is ranked 177 in the Zacks Industry Rank, placing it in the bottom 30% of over 250 industries [7].

Griffon Corporation (GFF) is well-poised for growth in the coming quarters, courtesy of strength across the Home and Building Products (HBP) segment. The company's efforts to reward its shareholders handsomely add to its appeal.Based in New York, Griffon Corporation is a diversified holding company with exposure in several industries. The company engages in the manufacture and sale of a wide range of consumer and professional, and home and building products, including garage doors, shutters, materials for d ...

As Griffon Corporation (NYSE: GFF ) exited the year, it saw growth across both of its segments due to volume recovery in certain parts of the business, primarily in the residential business of the HBP segment. DespiteAs a finance enthusiast with years of experience in research, I am deeply engaged in studying diverse businesses, especially in the technology, industrial, and conglomerate sectors. I really like companies that have strong foundations and see them doing well in the long run. I enjoy writing abo ...

Griffon (GFF) ended the recent trading session at $72, demonstrating a -0.25% swing from the preceding day's closing price. This change lagged the S&P 500's daily loss of 0.09%. On the other hand, the Dow registered a gain of 0.04%, and the technology-centric Nasdaq decreased by 0.1%.The the stock of garage door and building products maker has fallen by 9.06% in the past month, lagging the Conglomerates sector's loss of 5.11% and the S&P 500's loss of 0.29%.The investment community will be paying close atte ...

It has been about a month since the last earnings report for Griffon (GFF) . Shares have added about 2.1% in that time frame, outperforming the S&P 500.Will the recent positive trend continue leading up to its next earnings release, or is Griffon due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers. Griffon’s Q4 Earnings Top Estimates, Revenues Rise Y/YGr ...

In the latest trading session, Griffon (GFF) closed at $79.04, marking a -1.01% move from the previous day. This change lagged the S&P 500's 0.54% loss on the day. Meanwhile, the Dow lost 0.53%, and the Nasdaq, a tech-heavy index, lost 0.66%.The the stock of garage door and building products maker has fallen by 0.83% in the past month, leading the Conglomerates sector's loss of 3.9% and undershooting the S&P 500's gain of 1.5%.The investment community will be closely monitoring the performance of Griffon in ...

Acquisitions and Divestitures - Griffon's subsidiary AMES acquired Pope, a leading Australian provider of residential watering products, for approximately AUD 21,800 (approximately $14,500) in cash, expected to contribute approximately $25,000 in revenue in the first twelve months[11] - Griffon completed the sale of its Defense Electronics segment (Telephonics) for $330,000 in cash, excluding customary post-closing adjustments[12] - Griffon acquired Hunter, a market leader in residential ceiling, commercial, and industrial fans, for a contractual purchase price of $845,000[13] Global Sourcing and Facility Optimization - CPP expanded its global sourcing strategy, resulting in a facility footprint reduction of approximately 1.2 million square feet (15% of CPP's square footage) and a headcount reduction of approximately 600[16] - CPP aims to achieve a 15% EBITDA margin through its asset-light business model, leveraging global supplier relationships and reducing capital expenditures[17] - Implementation of CPP's global sourcing strategy resulted in charges of $133,777, including $51,082 in cash charges and $82,695 in non-cash charges[18] - CPP's reliance on Chinese suppliers increased due to its global sourcing strategy, exposing it to risks from U.S.-China trade disputes and tariffs[112][114] - CPP is developing multiple suppliers outside China to mitigate risks from tariffs and supply chain disruptions[114] - The expansion of CPP's global sourcing strategy includes long-handled tools, material handling, and wood storage products for the U.S. market[109][124] - CPP's global sourcing strategy has reduced its facility footprint by 1.2 million square feet (15% of total square footage) and resulted in a headcount reduction of 600 employees[127] Clopay Operations and Market Position - Clopay, part of the HBP segment, is the largest manufacturer and marketer of residential and commercial garage doors in North America, with approximately 3,000 employees[24][25] - Clopay's sales are driven by home remodeling, commercial construction, and new residential housing construction, with strong relationships with major retailers like Home Depot and Menards[24][30] - Clopay operates 56 distribution centers across the U.S. and Canada, supporting quick-ship services to retail and professional dealer customers[29] - Clopay's product development focuses on strength, design, performance, durability, and energy efficiency, supported by in-house technical development centers[32] - Clopay operates manufacturing facilities totaling 1,582,000 square feet in Troy and Russia, Ohio, 279,000 square feet in Mountain Top, Pennsylvania, and 163,000 square feet in Goodyear, Arizona, with a distribution network of 56 centers covering approximately 1,200,000 square feet[38] CPP Brand and Product Portfolio - CPP (Consumer and Professional Products) employs approximately 2,300 employees worldwide and operates under globally recognized brands such as AMES, Hunter, and ClosetMaid[39][40] - CPP's brand portfolio includes over 20 recognized brands across long-handled tools, outdoor décor, home organization, and fans, with key brands like AMES®, True Temper®, and Hunter Fan®[42] - CPP's product portfolio spans six core categories: seasonal outdoor tools, project tools, outdoor décor and watering, home organization, fans, and cleaning products, with market-leading positions in each[44] - CPP's largest customers include Home Depot, Lowe's, and Bunnings, with Home Depot accounting for 15% of CPP's revenue in 2024[72] Manufacturing and Distribution Facilities - CPP operates principal manufacturing facilities in Ocala, Florida (676,000 square feet) and St. Francois, Quebec (353,000 square feet), with additional facilities in China and Australia[65] - CPP's distribution network includes a 1.4 million square foot facility in Carlisle, Pennsylvania, a 997,000 square foot facility in Reno, Nevada, and a 600,000 square foot facility in Byhalia, Mississippi[66] - Griffon's manufacturing facilities are concentrated in a few locations, with some third-party facilities located abroad in low-cost regions[153] Financial Performance and Seasonality - Griffon's revenue and earnings are generally lowest in the first and fourth quarters, with 52% of CPP's sales occurring in the second and third quarters in 2024, compared to 54% in 2023 and 58% in 2022[74] - 52% of CPP's sales occurred during the second and third quarters of 2024, compared to 54% in 2023 and 58% in 2022[130] - Approximately 61% of Griffon's consolidated revenue in FY2024 was derived from the HBP segment, while 39% came from the CPP segment[98] - The annual inflation rate in the U.S. decreased to 3.5% for the twelve months ended September 30, 2024, down from 3.7% in the previous year[100] - Home Depot accounted for 11% of Griffon's consolidated revenue, 8% of HBP's revenue, and 15% of CPP's revenue in FY2024[106] Environmental, Social, and Governance (ESG) Initiatives - Griffon aims to reduce carbon emissions, air emissions, water consumption, hazardous waste, lost time rates, and recordable injury rates by 30% by 2030[83] - Approximately 70% of the steel used in HBP's garage doors is recycled steel[85] - Griffon has invested over $1 million in employee welfare facilities, including break areas and cafeterias[87] - U.S. employees own approximately 9% of Griffon stock through the Employee Stock Ownership Plan[88] - Griffon's Supplier Code of Conduct (SCC) requires suppliers to comply with environmental, social, and governance (ESG) goals, with audits phased in over several years[89] Intellectual Property and Innovation - Griffon's HBP and CPP businesses hold approximately 1,596 registered trademarks and 140 pending trademark applications worldwide[80] - HBP holds 56 issued patents and 24 pending patent applications in the U.S., while CPP has 782 issued patents and 245 pending patent applications in the U.S.[81] - Griffon relies on a combination of patent, copyright, trademark laws, and trade secrets to protect proprietary rights, but these measures may not be absolute[172] - Griffon's success depends on its ability to develop and commercialize innovative new products, with risks including development costs and market acceptance[166] Risks and Challenges - Demand for lawn and garden products is highly influenced by weather, with adverse weather patterns potentially reducing AMES' sales volume[75] - CPP's ability to import products may be affected by port conditions, transportation issues, and geopolitical conflicts, such as the Russia-Ukraine war[123] - Griffon faces risks related to product liability and warranty claims, which could increase in frequency and severity, potentially impacting profitability[177] - Griffon's international operations are subject to anti-corruption laws, export controls, and economic sanctions, with potential severe penalties for violations[171] - Griffon's product development efforts face risks such as budget overruns, delays, and failure to achieve market acceptance, which could adversely affect financial results[168] - Griffon's supply chain is vulnerable to disruptions, which could impact profitability, contract termination, fines, and harm to the company's reputation[164] - Griffon is exposed to environmental laws and regulations, with potential material expenditures or liabilities related to environmental claims[180] Financial Structure and Debt - Griffon's senior notes are not due until 2028, with a $800 million Term Loan B (current balance of $457 million) due in 2029 and a $500 million revolving line of credit maturing in 2028[143] - Griffon recorded a non-cash, pre-tax indefinite-lived intangible assets impairment of $109,200 in fiscal year 2023, resulting in a $1.49 decrease in earnings per share[162] - Griffon is authorized to issue up to 85,000,000 shares of common stock, with 48,303,240 shares outstanding as of September 30, 2024[151] International Operations - Griffon's non-U.S. businesses are primarily located in Canada, Australia, the U.K., Ireland, and China[77] - Griffon's non-U.S. sales accounted for approximately 16% of consolidated revenue for the year ended September 30, 2024[170] - A 100 basis point change in SONIA, SOFR, CORRA, or BBSY would not have a material impact on Griffon's results of operations or liquidity[338] - A 10% change in the value of all applicable foreign currencies would not have a material effect on Griffon's financial position and cash flows[339] Employee and Labor Relations - Griffon Corporation employs approximately 5,300 employees globally as of September 30, 2024, with 158 employees in Canada represented by the Trade Union Advisory Committee[68][69] - Griffon employed approximately 5,300 full-time employees as of September 30, 2024, with 3% covered by collective bargaining agreements[133] Advertising and Promotion - Griffon's advertising and promotion spend may not deliver anticipated results, potentially impacting operating results[158] Impairment and Financial Reporting - Griffon's annual impairment testing for fiscal year 2024 did not result in any impairments to goodwill or indefinite-lived intangible assets[162]