Company Performance - Griffon (GFF) ended the recent trading session at $82.65, demonstrating a +1.37% change from the preceding day's closing price, outperforming the S&P 500 which registered a daily gain of 0.4% [1] - Shares of Griffon had gained 13.36% over the past month, significantly outpacing the Conglomerates sector's gain of 0.51% and the S&P 500's gain of 4.61% [1] Earnings Projections - The company's earnings per share (EPS) are projected to be $1.5, reflecting a 20.97% increase from the same quarter last year, with quarterly revenue expected to be $660.03 million, up 1.89% from the year-ago period [2] - For the full year, the Zacks Consensus Estimates project earnings of $5.7 per share and revenue of $2.57 billion, representing changes of +11.33% and -1.88%, respectively, from the prior year [3] Analyst Estimates and Valuation - Recent changes to analyst estimates for Griffon are important as they signify the changing landscape of near-term business trends, with positive estimate revisions indicating optimism about the business outlook [3] - Griffon currently features a Zacks Rank of 4 (Sell), with a Forward P/E ratio of 14.3, which is a discount compared to the average Forward P/E of 18.99 of its industry [5] - The PEG ratio for Griffon is currently 0.89, compared to the average PEG ratio of 2.01 for the Diversified Operations industry [6] Industry Context - The Diversified Operations industry, part of the Conglomerates sector, currently has a Zacks Industry Rank of 74, placing it in the top 30% of all 250+ industries [6] - The strength of individual industry groups is measured by the Zacks Industry Rank, with top 50% rated industries outperforming the bottom half by a factor of 2 to 1 [7]

Core Insights - Griffon Corp (NYSE: GFF) is positioned at a cyclical and strategic inflection point in its core business segments, which include essential home products such as garage doors and garden tools [1] Company Overview - Griffon Corp is a US manufacturer specializing in everyday home products, indicating a focus on consumer needs and market demand [1] Investment Potential - The company presents a potential investment opportunity due to its current strategic positioning and the quality of its product offerings [1]

Core Viewpoint - Griffon Corporation (GFF) has experienced a significant decline in share price, dropping 19.5% over the past six months, which is worse than the industry and S&P 500 declines of 6.1% and 3.2%, respectively [1] Group 1: Performance Overview - GFF's stock closed at $67.20, significantly below its 52-week high of $86.73 and above its 52-week low of $55.01 [3] - The company's total revenues for the fiscal second quarter were $611.7 million, missing consensus estimates and reflecting a 9% year-over-year decline [5] Group 2: Segment Performance - The Consumer and Professional Products (CPP) segment saw a revenue decline of 12.9% year-over-year in the second quarter of fiscal 2025, primarily due to reduced consumer demand in North America and the UK [4] - The Home and Building Products (HBP) segment also faced challenges, with revenues declining 6% in the fiscal second quarter due to typical seasonal drops in residential volumes [5] Group 3: Debt and Financial Health - GFF's long-term debt increased by 7.9% CAGR over the last five years, reaching $1.53 billion, with current liabilities at $330.8 million, exceeding cash equivalents of $127.8 million [6] - The company's long-term debt/capital ratio stands at 87.68%, significantly higher than the industry average of 54.02% [6] Group 4: Market Trends and Outlook - Despite recent challenges, the U.S. residential construction market is expected to recover, which may benefit the HBP segment [10] - The company anticipates flat revenues for the HBP segment in fiscal 2025, supported by a recovery in the commercial construction market [11] Group 5: Strategic Initiatives - GFF has been active in acquisitions, including the purchase of Pope, which is expected to generate annual revenues of around $25 million and contributed 2% to the CPP segment's revenues in the fiscal second quarter [12] - The company remains committed to shareholder returns, paying $23.4 million in dividends and repurchasing shares worth $72.9 million in the fiscal second quarter [13] Group 6: Financial Metrics - GFF's trailing 12-month return on equity (ROE) is 114.46%, significantly higher than the industry average of 36.57%, indicating efficient use of shareholder funds [14] - The stock's forward 12-month price-to-earnings ratio is 10.41X, below the industry average of 16.28X, suggesting an attractive valuation for investors [15] Group 7: Earnings Estimates - Earnings estimates for fiscal 2025 have increased by 0.5% to $5.71 per share, while estimates for fiscal 2026 remain stable at $6.85 [18] - The Zacks Consensus Estimate for GFF's sales in fiscal 2025 implies a decline of 1.9% year-over-year, while EPS estimates indicate an 11.5% growth [19]

Core Viewpoint - Griffon Corporation (GFF) and Carlisle Companies Incorporated (CSL) are both key players in the Zacks Diversified Operations industry, focusing on innovative home and building envelope products and solutions. The article evaluates their growth prospects and challenges to determine which company presents a better investment opportunity today [1][2]. Griffon Corporation (GFF) - GFF is experiencing strong fundamentals in the Home and Building Products segment, with stable demand driven by repair and remodeling activities. The U.S. residential construction market is expected to recover, supported by builder incentives and anticipated interest rate cuts [3]. - The Consumer and Professional Products (CPP) segment faces challenges due to reduced consumer demand in North America and the UK, particularly for outdoor tools and decor [4]. - GFF has expanded its business through acquisitions, notably acquiring Pope, an Australia-based company, which is expected to generate annual revenues of approximately $25 million and positively impact earnings in its first full year [5]. - GFF is committed to shareholder returns, paying dividends of $23.4 million and repurchasing shares worth $72.9 million in the fiscal second quarter. The company also approved a new $400 million share repurchase authorization and increased its quarterly dividend by 20% [6]. Carlisle Companies Incorporated (CSL) - CSL is experiencing strong momentum in the Construction Materials segment, driven by high demand for reroofing products and increased sales in the non-residential construction market due to the acquisition of MTL [7]. - The Weatherproofing Technologies segment is negatively impacted by lower volumes in the residential construction market and project delays, attributed to high interest rates and unfavorable weather conditions [8]. - CSL rewarded shareholders with a dividend payment of $45.2 million and share buybacks worth $400 million in the first three months of 2025, along with an 18% dividend hike in August 2024 [9]. - The company is facing rising raw material and labor costs, which are increasing direct expenses and selling, general, and administrative expenses. In the first quarter, the cost of sales rose by 1.8% year over year, while selling and administrative expenses increased by 16.3% [10][11]. Financial Performance and Valuation - The Zacks Consensus Estimate for GFF's fiscal 2025 sales indicates a year-over-year decline of 1.2%, while EPS is expected to grow by 11.5%. GFF's EPS estimates have been trending upward over the past 60 days [12]. - In contrast, CSL's 2025 sales and EPS estimates imply year-over-year growth of 4.9% and 10.3%, respectively, but its EPS estimates have declined over the past 60 days [12]. - Over the past year, CSL's shares have decreased by 4.9%, while GFF's stock has increased by 5.4% [15]. - CSL is trading at a forward price-to-earnings ratio of 17.15X, above its three-year median of 14.84X, while GFF's forward earnings multiple is at 11.41X, close to its median of 10.66X [17]. Conclusion - Both companies hold a Zacks Rank 3 (Hold), making investment decisions challenging. CSL's strength in Construction Materials is offset by weaknesses in its Weatherproofing Technologies unit and rising costs, suggesting caution for investors [18]. - Conversely, GFF's strengths in the Home and Building Products segment, growth investments, and shareholder-friendly policies indicate a more favorable outlook, making it a more attractive investment option compared to CSL [19].

Core Insights - Griffon Corporation (GFF) reported adjusted earnings of $1.23 per share for Q2 fiscal 2025, exceeding the Zacks Consensus Estimate of $1.13, but reflecting an 8.9% year-over-year decline [1] - Total revenues were $611.7 million, missing the consensus estimate of $616 million and decreasing by 9% year over year [1] Segmental Performance - Home and Building Products segment generated revenues of $368.2 million, accounting for 60.2% of net revenues, down 6% year over year due to lower residential volume, although a favorable product mix helped mitigate the decline [1] - Consumer and Professional Products segment revenues totaled $243.5 million, representing 39.8% of total revenues, down 13% year over year, impacted by a 13% volume reduction in North America and the UK, partially offset by strength in Australia [3] Financial Metrics - Adjusted EBITDA was $109.4 million, a decrease of 15% year over year, influenced by lower revenues and increased labor and distribution costs, though partially offset by lower material costs [2] - The adjusted gross margin improved to 41.2% from 40.4% in the prior year, while net income decreased by 11% year over year to $56.8 million [5] Balance Sheet and Cash Flow - At the end of Q2 fiscal 2025, cash and cash equivalents stood at $127.8 million, up from $114.4 million at the end of fiscal 2024, while long-term debt was $1.53 billion [6] - The company generated net cash of $159.4 million from operating activities in the first half of fiscal 2025, down from $185.9 million in the same period last year [7] - Free cash flow for the first six months of fiscal 2025 was $145.8 million, compared to $153.8 million in the prior-year period [8]

[Part I - Financial Information](index=3&type=section&id=Part%20I%20-%20FINANCIAL%20INFORMATION) [Financial Statements](index=3&type=section&id=Item%201%20%E2%80%93%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for the quarterly period ended March 31, 2025, including Balance Sheets, Statements of Operations, Shareholders' Equity, and Cash Flows, with explanatory notes [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Balance Sheet Summary (in thousands) | Balance Sheet Items | March 31, 2025 | September 30, 2024 | | :--- | :--- | :--- | | **Total Current Assets** | $920,495 | $929,476 | | **Total Assets** | **$2,343,941** | **$2,370,954** | | **Total Current Liabilities** | $330,833 | $348,990 | | **Total Liabilities** | $2,129,199 | $2,146,066 | | **Total Shareholders' Equity** | $214,742 | $224,888 | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income%20(Loss)) Statement of Operations Summary (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | 6 Months 2025 | 6 Months 2024 | | :--- | :--- | :--- | :--- | :--- | | **Revenue** | $611,746 | $672,880 | $1,244,117 | $1,316,033 | | **Gross Profit** | $252,211 | $270,665 | $516,487 | $507,306 | | **Income from Operations** | $101,164 | $113,448 | $213,259 | $197,286 | | **Net Income** | $56,762 | $64,143 | $127,613 | $106,320 | | **Diluted EPS** | $1.21 | $1.28 | $2.70 | $2.10 | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash Flow Summary for Six Months Ended March 31 (in thousands) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $159,425 | $185,860 | | **Net cash used in investing activities** | ($13,599) | ($32,017) | | **Net cash used in financing activities** | ($134,000) | ($132,043) | | **Net increase in cash and equivalents** | $13,383 | $20,141 | [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed disclosures on accounting policies and specific financial items, covering business segments, acquisitions, debt, equity, segment performance, restructuring, and legal contingencies - The company operates through two reportable segments: **Home and Building Products (HBP)** and **Consumer and Professional Products (CPP)**[26](index=26&type=chunk)[91](index=91&type=chunk) - On July 1, 2024, the company's subsidiary AMES acquired Pope, an Australian residential watering products provider, for approximately **AUD 21,800 thousand ($14,500 thousand)** in cash, assigned to the CPP segment[43](index=43&type=chunk) - The company's Employee Stock Ownership Plan (ESOP) was **frozen as of September 30, 2024**, with no new participants or contributions, and the final loan payment made in Q1 2025[74](index=74&type=chunk)[78](index=78&type=chunk) - The CPP segment's global sourcing expansion, completed by **September 30, 2024**, resulted in the closure of four manufacturing sites and four wood mills, reducing its facility footprint by approximately **1.2 million square feet**[106](index=106&type=chunk)[107](index=107&type=chunk) - The company is involved in environmental investigations at two sites: Peekskill, NY, where an RI/FS is underway, and Memphis, TN, recommended for potential inclusion on the National Priorities List under CERCLA[129](index=129&type=chunk)[132](index=132&type=chunk) [Management's Discussion and Analysis (MD&A)](index=34&type=section&id=Item%202%20%E2%80%93%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's Q2 and H1 FY2025 financial performance, highlighting revenue decline, improved CPP profitability from global sourcing, and details on liquidity, capital resources, and debt structure [Overall Financial Performance](index=36&type=section&id=Overall%20Financial%20Performance) Q2 2025 vs Q2 2024 Performance (in millions, except per share data) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | **Revenue** | $611.7M | $672.9M | -9.0% | | **Net Income** | $56.8M | $64.1M | -11.4% | | **Diluted EPS** | $1.21 | $1.28 | -5.5% | Six Months 2025 vs Six Months 2024 Performance (in millions, except per share data) | Metric | 6M 2025 | 6M 2024 | Change | | :--- | :--- | :--- | :--- | | **Revenue** | $1,244.1M | $1,316.0M | -5.5% | | **Net Income** | $127.6M | $106.3M | +20.0% | | **Diluted EPS** | $2.70 | $2.10 | +28.6% | - Adjusted net income for Q2 2025 was **$57.6 million ($1.23 per share)**, compared to **$67.5 million ($1.35 per share)** in the prior year quarter[148](index=148&type=chunk)[153](index=153&type=chunk) [Results of Operations by Segment](index=38&type=section&id=Results%20of%20Operations%20by%20Segment) Home and Building Products (HBP) Performance (Q2 2025 vs Q2 2024, in millions) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | **Revenue** | $368.2M | $392.1M | -6% | | **Adjusted EBITDA** | $109.4M | $128.9M | -15% | | **Adjusted EBITDA Margin** | 29.7% | 32.9% | -320 bps | - HBP's revenue decline was driven by a **7% decrease in volume**, primarily due to residential sales activity returning to normal seasonality[158](index=158&type=chunk) Consumer and Professional Products (CPP) Performance (Q2 2025 vs Q2 2024, in millions) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | **Revenue** | $243.5M | $280.8M | -13% | | **Adjusted EBITDA** | $23.7M | $20.1M | +18% | | **Adjusted EBITDA Margin** | 9.7% | 7.2% | +250 bps | - CPP's revenue decreased due to a **13% volume decline** from reduced consumer demand in North America and the UK; however, adjusted EBITDA increased due to benefits from the global sourcing initiative and improved performance in Australia[164](index=164&type=chunk)[165](index=165&type=chunk) [Liquidity and Capital Resources](index=42&type=section&id=Liquidity%20and%20Capital%20Resources) - As of March 31, 2025, the company had **$127.8 million in cash and equivalents** and **$364.5 million available for borrowing** under its Revolver[186](index=186&type=chunk) - Net cash provided by operating activities was **$159.4 million** for the six months ended March 31, 2025, a decrease from **$185.9 million** in the prior year period, primarily due to an increase in net working capital[187](index=187&type=chunk) - During the six months ended March 31, 2025, the company repurchased **1,030,372 shares for $72.9 million**; as of March 31, 2025, **$359.8 million remained available** under the share repurchase authorization[193](index=193&type=chunk) - The company's Net Debt to EBITDA leverage ratio, as calculated per its Credit Agreement, was **2.6x** at March 31, 2025[207](index=207&type=chunk) [Market Risk Disclosures](index=47&type=section&id=Item%203%20-%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company faces market risks from interest rate fluctuations on variable-rate debt and foreign currency exchange rates across its international operations, with management assessing no material effect from typical changes - The company's primary market risk exposures are related to **variable interest rate debt** (SOFR, SONIA, BBSY, CORRA based) and **foreign currency fluctuations** from its international operations[221](index=221&type=chunk)[222](index=222&type=chunk)[223](index=223&type=chunk) [Controls and Procedures](index=48&type=section&id=Item%204%20-%20Controls%20%26%20Procedures) The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting during the quarter - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were **effective** as of the end of the period covered by the report[224](index=224&type=chunk) [Part II - Other Information](index=48&type=section&id=Part%20II%20%E2%80%93%20OTHER%20INFORMATION) [Risk Factors](index=48&type=section&id=Item%201A%20%E2%80%93%20Risk%20Factors) This section updates risk factors, emphasizing increased risks for the CPP segment from international sourcing, particularly from China, due to tariffs, forced labor regulations, and geopolitical tensions - The CPP segment's expanded global sourcing strategy has increased its reliance on suppliers in China, heightening the potential impact of **tariffs and trade disputes**[230](index=230&type=chunk) - In May 2024, the USTR continued Section 301 tariffs on Chinese goods and announced additional tariffs to be implemented from 2024-2026, creating **ongoing risk for CPP's revenue and performance**[232](index=232&type=chunk) - The Uyghur Forced Labor Prevention Act (UFLPA) creates a risk of **shipment detentions by U.S. Customs**, even for goods not directly sourced from the Xinjiang region, which could impact CPP's operating performance[233](index=233&type=chunk)[235](index=235&type=chunk) [Issuer Purchases of Equity Securities](index=50&type=section&id=Item%202%20%E2%80%93%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the company's common stock repurchases during Q2 FY2025, including shares bought under its publicly announced repurchase program Share Repurchases for Q2 2025 (Jan 1 - Mar 31, 2025) | Metric | Value | | :--- | :--- | | **Total Shares Purchased** | 939,844 | | **Average Price Paid Per Share** | $74.89 | | **Shares Purchased Under Plan** | 420,200 | | **Remaining Authorization** | $359,825,000 | [Other Information](index=51&type=section&id=Item%205%20%E2%80%93%20Other%20Information) This section discloses that CEO and Chairman Ronald J. Kramer adopted a Rule 10b5-1 trading plan during the quarter - On February 12, 2025, CEO Ronald J. Kramer adopted a **Rule 10b5-1 trading plan** to sell up to **200,000 shares** of common stock between May 13, 2025, and May 13, 2027[243](index=243&type=chunk)[244](index=244&type=chunk)

分组1 - Griffon reported quarterly earnings of $1.23 per share, exceeding the Zacks Consensus Estimate of $1.13 per share, but down from $1.35 per share a year ago, representing an earnings surprise of 8.85% [1] - The company posted revenues of $611.75 million for the quarter ended March 2025, missing the Zacks Consensus Estimate by 0.64% and down from $672.88 million year-over-year [2] - Over the last four quarters, Griffon has surpassed consensus EPS estimates three times, but has topped consensus revenue estimates only once [2] 分组2 - The stock has underperformed the market, losing about 4.7% since the beginning of the year compared to the S&P 500's decline of 4.3% [3] - The current consensus EPS estimate for the coming quarter is $1.53 on revenues of $669.26 million, and for the current fiscal year, it is $5.71 on revenues of $2.59 billion [7] - The Zacks Industry Rank indicates that the Diversified Operations industry is in the bottom 38% of over 250 Zacks industries, suggesting potential challenges for stock performance [8]

Financial Data and Key Metrics Changes - Second quarter revenue decreased by 9% to $612 million compared to the prior year quarter [15] - Adjusted EBITDA before unallocated amounts decreased by 11% to $133 million, with an EBITDA margin of 21.8%, a decrease of 40 basis points [15] - GAAP net income was $57 million or $1.21 per share, down from $64 million or $1.28 per share in the prior year quarter [16] - Free cash flow during the quarter was $3 million, down from $21 million in the prior year [17] Business Line Data and Key Metrics Changes - Home and Building Products (HBP) revenue decreased by 6%, driven by a 7% decrease in volume, partially offset by a 1% improvement from mix [19] - Adjusted EBITDA for HBP decreased by 15% to $109 million due to decreased revenue and increased labor and distribution costs [19] - Consumer and Professional Products (CPP) revenue decreased by 13% to $243 million, primarily due to decreased consumer demand in North America and the UK, partially offset by increased volume in Australia [20] - CPP adjusted EBITDA increased by 18% to $24 million, driven by global sourcing expansion and improved margins in Australia [20] Market Data and Key Metrics Changes - Approximately 85% of Griffin's total segment EBITDA is generated by HBP, which manufactures and sells over 95% of its products in the U.S. [10] - CPP represents about 15% of total segment EBITDA, with only a portion affected by recent U.S.-China tariff policies [11] Company Strategy and Development Direction - The company is maintaining its fiscal 2025 guidance of $2.6 billion in revenue and $575 million to $600 million in segment adjusted EBITDA [22] - The strategy includes transitioning to an asset-light business model to increase flexibility and reduce operating costs [8] - The company plans to mitigate tariff impacts through supplier negotiations, cost management, and leveraging existing inventory [23] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to manage increased costs due to tariffs and maintain financial guidance for the year [9][10] - The housing market in the U.S. is expected to recover, with a significant demand for new construction [33] - Management believes that the high-end consumer market remains resilient despite economic uncertainties [70] Other Important Information - The company repurchased $31 million of stock during the second quarter, with a total of $498 million repurchased since April 2023 [12][13] - A quarterly dividend of $0.18 per share was authorized, marking the 55th consecutive quarterly dividend [13] Q&A Session Summary Question: What is the annualized revenue exposed to Chinese tariffs for CPP? - Management confirmed that approximately $325 million of CPP revenue is exposed to Chinese tariffs on an annualized basis [29] Question: Is the long-term 15% adjusted EBITDA margin target still achievable for CPP? - Management affirmed that the target is still on the table, depending on the U.S. economy's future performance [31][34] Question: What is the strategy for mitigating tariffs in different product lines? - Management explained that they have diversified their supply chain and are working on alternatives to mitigate tariff impacts [40][42] Question: How is the demand trend for CPP products by geography? - Demand in North America and the UK remains weak, while Australia shows good demand [65] Question: Will inventory be leveraged to manage through tariffs? - Management confirmed that they will leverage inventory to manage through tariffs for the remainder of the year [68]

Financial Data and Key Metrics Changes - Second quarter revenue was $612 million, a decrease of 9% compared to the prior year quarter [13] - Adjusted EBITDA before unallocated amounts was $133 million, down 11% year over year, with an EBITDA margin of 21.8%, a decrease of 40 basis points [13] - GAAP net income for the second quarter was $57 million, or $1.21 per share, compared to $64 million, or $1.28 per share, in the prior year [14] Business Segment Performance - Home and Building Products (HPP) segment maintained an EBITDA margin above 30%, but revenue decreased due to a seasonal decline in residential volume [5][16] - Consumer and Professional Products (CPP) revenue decreased 13% to $243 million, driven by reduced consumer demand in North America and the UK, partially offset by growth in Australia [17] - Adjusted EBITDA for CPP increased by 18% to $24 million, attributed to global sourcing initiatives and improved margins in Australia [17] Market Data and Key Metrics Changes - Approximately 85% of Griffin's total segment EBITDA is generated by HPP, which is primarily U.S.-based [9] - CPP represents about 15% of total segment EBITDA, with a portion affected by U.S.-China tariff policies [10] - The company expects to mitigate inflationary effects from trade policies through various strategies, including supplier negotiations and cost management [21] Company Strategy and Industry Competition - The company is committed to maintaining its fiscal 2025 guidance of $2.6 billion in revenue and $575 million to $600 million in segment adjusted EBITDA [20] - The focus remains on leveraging an asset-light business model to enhance flexibility and reduce operating costs [7] - The company aims to achieve a long-term adjusted EBITDA margin target of 15% for CPP, despite current tariff challenges [26][29] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to manage increased costs due to tariffs and maintain performance amid economic uncertainties [9][21] - The housing market in the U.S. is expected to recover, benefiting the HPP segment, which is largely insulated from tariff impacts [28] - The company anticipates continued solid operating performance in HPP and improved profitability in CPP for the remainder of the fiscal year [21] Other Important Information - The company repurchased $31 million of stock during the second quarter, with a total of $498 million repurchased since April 2023 [11][12] - A quarterly dividend of $0.18 per share was authorized, marking the 55th consecutive quarterly dividend [12] Q&A Session Summary Question: Clarification on CPP revenue exposed to tariffs - The annualized revenue exposed to Chinese tariffs is approximately $325 million, which is lower than expected [25] Question: Long-term EBITDA margin target for CPP - The long-term target of a 15% adjusted EBITDA margin for CPP remains achievable, depending on U.S. economic conditions [26][29] Question: Impact of tariffs on future costs - Management stated it is premature to speculate on fiscal year 2026 costs but emphasized the ability to mitigate tariff impacts [31][32] Question: Market position and pricing strategy in CPP - The company is sensitive to pricing impacts and is working on plans to mitigate tariff-related price increases while maintaining product quality [36] Question: Demand trends in different geographies for CPP - Demand in North America and the UK remains weak, while Australia shows good demand, particularly from the Pope acquisition [48]

Griffon Corporation Overview - Griffon Corporation's revenue is $2.6 billion and adjusted EBITDA is $528 million[5] - The company's market capitalization is $3.5 billion[5] - The adjusted EBITDA margin is 20%[5] - Net debt stands at $1.3 billion, and the company employs 5,160 people[5] Segment Breakdown - Consumer and Professional Products (CPP) accounts for 39% and Home and Building Products (HBP) accounts for 61% of adjusted EBITDA (excluding unallocated)[7] - CPP adjusted EBITDA is $85 million and HBP adjusted EBITDA is $503 million[7,33,26] - U.S. revenue constitutes 82% and international revenue 18% of the total revenue[7] Financial Performance and Strategy - Revenue has grown at a CAGR of 4.4% from FY21 to TTM 1Q25[19] - Adjusted EPS from continuing operations has grown at a CAGR of 43.5% from FY21 to TTM 1Q25[21] - Adjusted EBITDA has grown at a CAGR of 26.5% from FY21 to TTM 1Q25[22] - Net debt to EBITDA leverage has reduced by approximately 8% from FY21 to 1Q25[24,25]