Griffon Corporation (NYSE:GFF) Q4 2024 Earnings Conference Call November 13, 2024 8:30 AM ET Company Participants Brian Harris - Chief Financial Officer Ron Kramer - Chairman & Chief Executive Officer Conference Call Participants Lee Jagoda - CJS Securities Sam Darkatsh - Raymond James Trey Grooms - Stephens Julio Romero - Sidoti & Company Operator Ladies and gentlemen, good morning and welcome to the Griffon Corporation Annual and Fiscal Fourth Quarter Financial Results Conference Call. At this time, all p ...

Griffon (GFF) came out with quarterly earnings of $1.47 per share, beating the Zacks Consensus Estimate of $1.21 per share. This compares to earnings of $1.19 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 21.49%. A quarter ago, it was expected that this garage door and building products maker would post earnings of $1.46 per share when it actually produced earnings of $1.24, delivering a surprise of -15.07%.Over the last fou ...

Financial Performance - Fiscal 2024 revenue totaled $2.6 billion, a 2% decrease from $2.7 billion in the prior year[1] - Fiscal 2024 net income was $209.9 million, or $4.23 per share, compared to $77.6 million, or $1.42 per share, in the prior year[2] - Adjusted EBITDA for fiscal 2024 was $513.6 million, a 2% increase from $505.3 million in the prior year[3] - Fourth quarter revenue reached $659.7 million, a 3% increase from $641.4 million in the prior year quarter[4] - Fourth quarter adjusted EBITDA totaled $137.5 million, a 13% increase from $121.3 million in the prior year quarter[5] - Free cash flow for fiscal 2024 was $326 million, supporting $310 million returned to shareholders through dividends and share repurchases[7] - Fiscal 2025 revenue is expected to remain consistent at $2.6 billion, with adjusted EBITDA projected between $575 million and $600 million[22] Segment Performance - Home and Building Products segment revenue for 2024 was $1.6 billion, consistent with the prior year, while Consumer and Professional Products revenue was $1.0 billion, a decline of 6%[9][11] - Home and Building Products segment revenue increased to $406.6 million in Q4 2024 from $394.1 million in Q4 2023, representing a 3.6% growth[38] - Consumer and Professional Products segment revenue rose to $253.1 million in Q4 2024, compared to $247.3 million in Q4 2023, marking a 2.9% increase[38] Cash Flow and Shareholder Returns - The Board approved a $400 million share buyback authorization and a 20% increase in the quarterly dividend to $0.18 per share[8] - Free Cash Flow (FCF) for the year ended September 30, 2024, was $326.1 million, down from $389.1 million in 2023[40] - The company paid dividends totaling $35,806 thousand in 2024, a decrease from $133,814 thousand in 2023, reflecting a reduction of 73%[50] Debt and Leverage - Net debt to EBITDA leverage ratio remained stable at 2.6x for both September 30, 2024, and September 30, 2023[42] - Total gross debt as of September 30, 2024, was $1.54 billion, an increase from $1.49 billion in 2023[42] - Total debt extinguishment for the year was $1,700 thousand, up from $437 thousand in 2023, showing a significant increase in debt management efforts[50] Profitability Metrics - Gross profit for Q4 2024 was $263.5 million, representing 39.9% of revenue, compared to 38.3% in Q4 2023[43] - Net income for Q4 2024 was $62.5 million, compared to $42.0 million in Q4 2023, representing a 48.5% increase[47] - Basic earnings per share rose to $1.34, up from $0.83 in the same quarter last year[47] - Retained earnings grew significantly to $461.4 million, up from $281.5 million in the prior year, reflecting a 64.0% increase[49] - Adjusted net income for the quarter ended September 30, 2024, was $70,944 thousand, compared to $63,060 thousand in the same quarter of 2023, reflecting an increase of 14.5%[53] - Earnings per common share for the year ended September 30, 2024, was $4.23, up from $1.42 in 2023, indicating a growth of 197%[53] Operating Expenses and Efficiency - Selling, general and administrative expenses for Q4 2024 were $151.8 million, or 23.0% of revenue, down from 24.5% in Q4 2023[45] - Operating expenses decreased to $151.8 million from $166.5 million year-over-year, a reduction of 8.8%[47] - The company incurred restructuring charges of $41,309 thousand for the year ended September 30, 2024, compared to $92,468 thousand in 2023, indicating a reduction of 55.4%[53] Asset Management - Total current assets decreased to $929.5 million from $980.6 million year-over-year, a decline of 5.2%[49] - Total liabilities increased slightly to $2.15 billion from $2.10 billion in the previous year[49] - Cash and equivalents increased to $114.4 million from $102.9 million, marking a 11.5% rise[49] - Cash flows from operating activities for the year ended September 30, 2024, totaled $380,042 thousand, down from $431,765 thousand in 2023, a decrease of 11.9%[50] - The company reported a net cash used in investing activities of $64,999 thousand for the year ended September 30, 2024, compared to $45,211 thousand in 2023, an increase of 43.5%[50] - The company experienced a decrease in accounts receivable by $4,243 thousand for the year ended September 30, 2024, compared to a decrease of $51,119 thousand in 2023[50] - Cash and equivalents at the end of the period increased to $114,438 thousand in 2024 from $102,889 thousand in 2023, marking a rise of 11.5%[50]

As Griffon Corporation (NYSE: GFF ) entered the second half of the year, its topline continued the downward trend with a mid-single-digit decline in the third quarter, primarily due to weak commercial end market demand. I expect this weakness to continue forAs 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 ...

JamesBrey Business Overview Griffon Corporation (NYSE:GFF) is a diversified management and holding company that operates through Home & Building Products [HBP] and Consumer & Professional Products [CPP]. Their customers are mass merchandisers from home centres and distributors such as Home Depot (HD), Lowe's (LOW), etc. Under HBP, GFF conducts its business through Clopay, one of North America's largest producers of garage doors and rolling steel doors. CPP is a worldwide supplier of branded consumer and pro ...

Q3 FY24 Investor Presentation A ugus t 2 0 2 4 Copyright © 2024 Griffon Corporation. All rights reserved. Griffon Corporation Q3 FY24 Investor Presentation | --- | --- | --- | |----------|----------------|--------------------| | | | | | | $2.6B $497M | 19% | | Revenue | Adj. EBITDA | Adj. EBITDA Margin | | $1.4B | $2.7B | 5,314 | | Net debt | Market Cap 1 | Employees | B R E A K D O W N B Y O P E R AT I N G S E G M E N T U.S. 83% 17% International HBP 61% CPP 39% Revenue Adjusted EBITDA (excl. unallocated) ...

Financial Data and Key Metrics - Q3 2024 revenue decreased by 5% to $648 million compared to the prior year quarter [9] - Adjusted EBITDA before unallocated amounts decreased by 8% to $141 million, with an EBITDA margin of 21.7% [9] - GAAP net income was $41 million or $0.84 per share, compared to $49 million or $0.90 per share in the prior year quarter [10] - Adjusted net income was $61 million or $1.24 per share, compared to $70 million or $1.29 per share in the prior year [10] - Free cash flow in the quarter was strong at $120 million, supporting the capital allocation strategy [5] Segment Performance Home and Building Products (HBP) - Revenue declined 2% due to unfavorable product mix, with increased residential volume offset by decreased commercial volume [11] - Adjusted EBITDA decreased 12% to $119 million, driven by reduced revenue and increased steel, labor, and distribution costs [11] - EBITDA margin for the quarter was 30.1% [11] Consumer and Professional Products (CPP) - Revenue decreased 10% to $254 million, primarily due to reduced consumer demand in North America, partially offset by increased volume in Australia [11] - Adjusted EBITDA increased 22% to $22 million, driven by improved North American production costs and decreased discretionary spending [11] - EBITDA margin improved 230 basis points to 8.8% [11] Market and Strategic Developments - The company completed the acquisition of Pope, an Australian provider of residential watering products, expected to contribute approximately $25 million in annual sales to AMES Australia [12] - The global sourcing expansion initiative remains on time and on budget, with the shift from manufactured inventory to sourced inventory expected to improve margins in fiscal 2025 [12][22] - The company reiterated its 2024 guidance, including revenue of $2.65 billion and segment adjusted EBITDA of $555 million [13] Management Commentary on Operating Environment and Future Outlook - The company highlighted strong operating performance from both segments despite a challenging macroeconomic backdrop [14] - HBP has sustained 30%+ EBITDA margins, with increased residential door volume offsetting softness in the commercial market [14] - CPP is realizing early benefits from the global sourcing expansion strategy, with improving margins despite weak consumer demand [14] - The company remains committed to using strong operating performance and free cash flow to drive a capital allocation strategy focused on long-term shareholder value [14] Capital Allocation and Shareholder Returns - The company paid down $80 million in debt, repurchased $19 million in stock, and paid a $7 million regular quarterly dividend [5] - Since April 2023, the company has repurchased 7.9 million shares at an average price of $45.38 per share, reducing outstanding shares by 13.7% [7] - The Board authorized a regular quarterly dividend of $0.15 per share, marking the 52nd consecutive quarterly dividend [6] Q&A Session Summary Question: Demand environment for Home and Building Products - Residential business remains strong, while commercial business is lumpy but showing signs of improvement [16][17] - The mix headwinds are due to a slight decline in commercial volume and an improvement in residential volume [18] Question: Capital allocation strategy - The company maintains flexibility for buybacks, debt reduction, and acquisitions, with no change in philosophy [19][20] Question: CPP global sourcing progress - The heavy lifting for the global sourcing strategy is complete, with the company on track to achieve a 15% long-term margin target [20][21] - The shift from manufactured inventory to sourced inventory will continue into fiscal 2025, with margins expected to improve [22] Question: Differentiation in the doors industry - The company has introduced innovative products and integrated CornellCookson with Clopay, strengthening its position in the commercial market [24] - Strong execution, industry-leading lead times, and a robust dealer network contribute to the company's competitive advantage [24] Question: Steel cost impact on HBP - Steel costs had a couple of hundred basis points impact in Q3, with tailwinds expected in Q4 and into the next fiscal year [26][27] Question: M&A strategy - The company is focused on value-enhancing acquisitions like Pope, which expand product and geographic reach [31] - The company views its own stock as the most attractive investment opportunity at current prices [31] Question: Inventory destocking in CPP - Inventory levels are high in the U.K., normal in Australia and Canada, and slightly elevated in the U.S., with destocking expected to continue in Q4 [33] Question: Mix headwinds within residential customers - No significant mix headwinds, with slight buy-down observed in the retail channel [34] Question: CPP sales performance - CPP revenue was slightly lighter than expected due to weak consumer demand and inventory destocking [34]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2024 ☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | --- | --- | --- | --- | |------------------------------------------|--------------------|------------------------------------------------------------|---------------------| | | For the | transition perio ...

Griffon (GFF) came out with quarterly earnings of $1.24 per share, missing the Zacks Consensus Estimate of $1.46 per share. This compares to earnings of $1.29 per share a year ago. These figures are adjusted for nonrecurring items. This quarterly report represents an earnings surprise of -15.07%. A quarter ago, it was expected that this garage door and building products maker would post earnings of $0.94 per share when it actually produced earnings of $1.35, delivering a surprise of 43.62%. Over the last fo ...

Griffon Corporation Announces Third Quarter Results NEW YORK, NEW YORK, August 7, 2024 – Griffon Corporation ("Griffon" or the "Company") (NYSE:GFF) today reported results for the fiscal 2024 third quarter ended June 30, 2024. Revenue for the third quarter totaled $647.8 million, a 5% decrease compared to $683.4 million in the prior year quarter. Net income totaled $41.1 million, or $0.84 per share, compared to $49.2 million, or $0.90 per share, in the prior year quarter. Excluding all items that affect com ...