[Griffon Corporation Second Quarter 2025 Earnings Release](index=1&type=section&id=Griffon%20Corporation%20Second%20Quarter%202025%20Earnings%20Release) [Financial Highlights](index=1&type=section&id=Financial%20Highlights) The company reported a decline in key financial metrics for Q2 2025 but maintained its full-year guidance as performance met expectations Q2 2025 Key Financial Metrics (YoY Comparison) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Revenue | $611.7M | $672.9M | -9% | | Net Income | $56.8M | $64.1M | -11% | | Diluted EPS | $1.21 | $1.28 | -5% | | Adjusted Net Income | $57.6M | $67.5M | -15% | | Adjusted Diluted EPS | $1.23 | $1.35 | -9% | | Adjusted EBITDA | $118.5M | $134.2M | -12% | - CEO Ronald J. Kramer stated that first-half performance met expectations and the company is maintaining its full-year financial guidance despite economic uncertainty[5](index=5&type=chunk) - The company anticipates the **Home and Building Products (HBP) segment will generate approximately 85% of total segment EBITDA** for the year[5](index=5&type=chunk) [Segment Performance](index=1&type=section&id=Segment%20Performance) The company's segments showed divergent trends, with HBP declining while CPP's Adjusted EBITDA grew due to sourcing and operational initiatives Segment Revenue and Adjusted EBITDA (Q2 2025 vs Q2 2024) | Segment | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | :--- | | **HBP** | Revenue | $368.2M | $392.1M | -6% | | | Adj. EBITDA | $109.4M | $128.9M | -15% | | **CPP** | Revenue | $243.5M | $280.8M | -13% | | | Adj. EBITDA | $23.7M | $20.1M | +18% | [Home and Building Products (HBP)](index=1&type=section&id=Home%20and%20Building%20Products%20(HBP)) HBP's revenue and Adjusted EBITDA declined due to lower residential volume, though the segment maintained a strong EBITDA margin - Revenue decreased 6% due to a **7% volume decline**, primarily from residential sales returning to normal seasonality[6](index=6&type=chunk) - Adjusted EBITDA decreased 15% due to lower revenue, reduced overhead absorption, and higher labor/distribution costs, partially offset by lower material costs[7](index=7&type=chunk) - The HBP segment maintained a **strong 30% EBITDA margin** during the quarter[5](index=5&type=chunk) [Consumer and Professional Products (CPP)](index=2&type=section&id=Consumer%20and%20Professional%20Products%20(CPP)) CPP's revenue fell due to lower volume, but Adjusted EBITDA grew significantly driven by global sourcing benefits and Australian performance - Revenue decreased 13% primarily due to reduced consumer demand in North America and the UK, with an unfavorable foreign currency impact of 2%[8](index=8&type=chunk) - **Adjusted EBITDA grew 18%**, credited to the benefits of the global sourcing expansion and strong performance in Australia[9](index=9&type=chunk) - The company is leveraging its global supply chain and taking actions like supplier negotiations, cost management, and pricing to mitigate tariff impacts[5](index=5&type=chunk) [Financial Position and Capital Management](index=2&type=section&id=Financial%20Position%20and%20Capital%20Management) The company maintained a solid financial position with improved leverage, strong free cash flow, and $1.41 billion in net debt Balance Sheet and Leverage Summary (as of March 31, 2025) | Metric | March 31, 2025 | March 31, 2024 | | :--- | :--- | :--- | | Cash and equivalents | $127.8M | $123.0M | | Total Debt Outstanding | $1.54B | $1.60B | | Net Debt | $1.41B | $1.48B | | Net Debt to EBITDA Leverage | 2.6x | 2.8x | - Free cash flow for the six months ended March 31, 2025, was **$145.8 million**, compared to $153.8 million in the prior year period[11](index=11&type=chunk)[21](index=21&type=chunk) - Borrowing availability under the revolving credit facility was **$364.5 million** at the end of the quarter[11](index=11&type=chunk) [Shareholder Returns](index=2&type=section&id=Shareholder%20Returns) The company continued returning capital to shareholders, repurchasing 0.4 million shares for $30.5 million in the second quarter - In Q2 2025, repurchased **0.4 million shares for $30.5 million** at an average price of $72.64 per share[12](index=12&type=chunk) - From April 2023 through March 31, 2025, the company has repurchased **9.9 million shares (17.4% of outstanding shares)** for a total of $498.1 million[12](index=12&type=chunk) - As of March 31, 2025, **$359.8 million remained available** under the Board-authorized share repurchase program[12](index=12&type=chunk) [Consolidated Financial Statements](index=8&type=section&id=Consolidated%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for the three and six months ended March 31, 2025, and 2024 [Condensed Consolidated Statements of Operations](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Income Statement Highlights (in thousands, except per share data) | | Three Months Ended Mar 31, 2025 | Three Months Ended Mar 31, 2024 | Six Months Ended Mar 31, 2025 | Six Months Ended Mar 31, 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 Balance Sheets](index=9&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Balance Sheet Highlights (in thousands) | | March 31, 2025 | September 30, 2024 | | :--- | :--- | :--- | | Cash and equivalents | $127,821 | $114,438 | | Total Current Assets | $920,495 | $929,476 | | **Total Assets** | **$2,343,941** | **$2,370,954** | | Total Current Liabilities | $330,833 | $348,990 | | Long-term debt, net | $1,528,838 | $1,515,897 | | **Total Liabilities** | **$2,129,199** | **$2,146,066** | | **Total Shareholders' Equity** | **$214,742** | **$224,888** | [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash Flow Highlights (in thousands, Six Months Ended March 31) | | 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** | | Cash and equivalents at end of period | $127,821 | $123,030 | [Reconciliation of GAAP to Non-GAAP Measures](index=5&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Measures) This section reconciles non-GAAP measures like Adjusted EBITDA and Adjusted Net Income to their comparable GAAP counterparts Reconciliation of Net Income to Adjusted Net Income (Q2) | (in thousands) | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net income | $56,762 | $64,143 | | Adjusting items (net of tax) | $837 | $3,367 | | **Adjusted net income** | **$57,599** | **$67,510** | Reconciliation of Diluted EPS to Adjusted Diluted EPS (Q2) | | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Diluted EPS | $1.21 | $1.28 | | Adjusting items, net of tax | $0.02 | $0.07 | | **Adjusted Diluted EPS** | **$1.23** | **$1.35** | Reconciliation of Income Before Taxes to Adjusted EBITDA (Q2) | (in thousands) | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Income before taxes | $78,637 | $88,573 | | Net interest expense | $23,222 | $25,512 | | Depreciation and amortization | $15,650 | $15,080 | | Other adjustments | $1,016 | $5,077 | | **Adjusted EBITDA** | **$118,525** | **$134,231** | [Company Information](index=2&type=section&id=Company%20Information) Griffon Corporation is a diversified holding company with segments in Home and Building Products (HBP) and Consumer and Professional Products (CPP) - **Home and Building Products (HBP):** Operates through Clopay, the largest manufacturer of garage and rolling steel doors in North America, with brands like Clopay, Ideal, Holmes, Cornell, and Cookson[18](index=18&type=chunk) - **Consumer and Professional Products (CPP):** A global provider of branded tools, fans, and storage products, featuring brands such as AMES, Hunter, True Temper, and ClosetMaid[18](index=18&type=chunk) - A conference call to discuss the results was scheduled for May 8, 2025, at 8:30 AM ET[13](index=13&type=chunk)

Company Performance - Griffon (GFF) closed at $68.11, reflecting a +0.41% change from the previous trading day's close, outperforming the S&P 500's daily gain of 0.15% [1] - Over the past month, Griffon's shares have depreciated by 7.18%, underperforming the Conglomerates sector's loss of 2.37% and the S&P 500's loss of 0.21% [1] Earnings Expectations - The upcoming earnings release is anticipated, with expected EPS of $1.13, down 16.3% from the prior-year quarter [2] - Revenue is forecasted to be $615.7 million, indicating an 8.5% decline compared to the same quarter of the previous year [2] Full Year Projections - For the full year, earnings are projected at $5.71 per share and revenue at $2.59 billion, representing changes of +11.52% and -1.16% from the prior year, respectively [3] - Recent changes to analyst estimates for Griffon indicate the evolving nature of near-term business trends, with positive revisions reflecting analysts' confidence in the company's performance [3] Valuation Metrics - Griffon has a Forward P/E ratio of 11.89, indicating a discount compared to its industry's Forward P/E of 16.22 [6] - The company holds a PEG ratio of 0.69, which is lower than the Diversified Operations industry's average PEG ratio of 1.43 [6] Industry Context - The Diversified Operations industry, part of the Conglomerates sector, has a Zacks Industry Rank of 89, placing it in the top 36% of over 250 industries [7] - Strong individual industry groups, as measured by the Zacks Industry Rank, tend to outperform weaker groups by a factor of 2 to 1 [7]

Core Viewpoint - Growth stocks are appealing due to their potential for above-average financial growth, but identifying strong candidates can be challenging due to inherent volatility and risks [1] Group 1: Company Overview - Griffon (GFF) is highlighted as a recommended growth stock with a favorable Growth Score and a top Zacks Rank [2] - The company has a historical EPS growth rate of 37.9%, with projected EPS growth of 11.5% this year, surpassing the industry average of 10.4% [4] Group 2: Financial Metrics - Cash flow growth is crucial for growth-oriented companies, and Griffon currently shows a year-over-year cash flow growth of 0.6%, compared to an industry average of -16.8% [5] - The historical annualized cash flow growth rate for Griffon over the past 3-5 years is 25.3%, significantly higher than the industry average of 6.3% [6] Group 3: Earnings Estimates - Positive trends in earnings estimate revisions are correlated with stock price movements, and Griffon's current-year earnings estimates have increased by 0.5% over the past month [7][8] - Griffon has achieved a Growth Score of A and a Zacks Rank 1 due to favorable earnings estimate revisions, indicating strong potential for growth investors [10]

Core Viewpoint - 3M Company (MMM) faces challenges in its consumer retail segment, while Griffon Corporation (GFF) shows strong growth potential in its Home and Building Products segment, making GFF a more attractive investment option currently [20][21]. 3M Company (MMM) - 3M is experiencing solid momentum in its Safety and Industrial segment, with organic sales improving approximately 2.4% year over year in Q4 2024, driven by demand in roofing granules and electrical markets [3]. - The Transportation and Electronics segment benefits from strong aerospace and electronics markets, with adjusted organic revenues growing 2% in Q4 2024 [4]. - In 2024, 3M paid $2 billion in dividends and repurchased shares worth $1.8 billion, with $2.4 billion remaining under the share repurchase program [5]. - The Consumer segment saw a decline of 1.9% in 2024 due to decreased consumer discretionary spending, particularly in packaging, home care, and consumer safety [6]. - 3M's long-term debt was $11.1 billion at the end of 2024, with interest expenses increasing 26.5% year over year to $1.2 billion [7]. - Ongoing litigations, including a $6 billion settlement related to earplug lawsuits, may lead to additional expenses [8]. - The Zacks Consensus Estimate for 3M's 2025 sales implies a year-over-year decline of 10%, while EPS indicates growth of 6.7% [14]. - 3M shares have lost 5.7% in the past six months, trading at a forward P/E ratio of 15.97X, above its three-year median of 12.03X [16][17]. Griffon Corporation (GFF) - Griffon is witnessing strong momentum in its Home and Building Products segment, with flat revenues year-over-year in Q1 fiscal 2025, supported by resilient residential construction activity [9]. - The recovery in the U.S. residential construction market, aided by lower interest rates, is expected to benefit Griffon's segment in the coming quarters [10]. - The Consumer and Professional Products segment faced a revenue decline of 4.2% year-over-year in Q1 fiscal 2025 due to weak consumer demand [11]. - Griffon is investing in the expansion and modernization of its manufacturing facilities, including the expansion of Clopay's Troy facility and sectional door manufacturing capacity in Ohio [12]. - The acquisition of Australia-based Pope is expected to generate annual revenues of around $25 million and positively impact earnings in the first full year [13]. - The Zacks Consensus Estimate for Griffon's fiscal 2025 sales implies a year-over-year decline of 1.2%, while EPS indicates growth of 11.5% [14]. - Griffon stock has increased by 0.4% in the past six months, trading at a forward P/E ratio of 10.80X, close to its three-year median of 10.58X [16][17].

Core Viewpoint - Value investing remains a preferred strategy for identifying strong stocks, focusing on companies believed to be undervalued based on fundamental analysis [2]. Group 1: Value Investing Metrics - Zacks has developed a Style Scores system to identify stocks with specific traits, particularly in the "Value" category, which is of interest to value investors [3]. - Stocks with "A" grades in the Value category and high Zacks Ranks are considered among the strongest value stocks currently available [3]. Group 2: Griffon (GFF) Analysis - Griffon (GFF) is currently rated with a Zacks Rank of 2 (Buy) and holds a Value grade of A, indicating strong potential [4]. - GFF has a P/E ratio of 11.67, significantly lower than the industry average of 16.37, suggesting it may be undervalued [4]. - Over the past 52 weeks, GFF's Forward P/E has fluctuated between 9.47 and 14.95, with a median of 12.29 [4]. - GFF's P/CF ratio stands at 11.42, compared to the industry's average of 13.84, further indicating potential undervaluation [5]. - The P/CF for GFF has ranged from 7.47 to 15.24 over the past year, with a median of 10.67 [5]. - These metrics contribute to GFF's strong Value grade and suggest it is likely undervalued, supported by a positive earnings outlook [6].

Core Viewpoint - Growth investors are interested in stocks with above-average financial growth, but identifying such stocks can be challenging due to inherent risks and volatility [1] Group 1: Company Overview - Griffon (GFF) is currently recommended as a growth stock by the Zacks Growth Style Score system, which evaluates a company's real growth prospects beyond traditional metrics [2] - The stock has a favorable Growth Score and a top Zacks Rank, indicating strong potential for performance [2] Group 2: Earnings Growth - Historical EPS growth rate for Griffon is 37.9%, but projected EPS growth for this year is 10.9%, surpassing the industry average of 10.7% [4] - Double-digit earnings growth is preferred by growth investors as it signals strong future prospects [3] Group 3: Cash Flow Growth - Griffon's year-over-year cash flow growth is 0.6%, which is significantly better than the industry average of -15.6% [5] - The company's annualized cash flow growth rate over the past 3-5 years is 25.3%, compared to the industry average of 6.9% [6] Group 4: Earnings Estimate Revisions - Current-year earnings estimates for Griffon have been revised upward, with the Zacks Consensus Estimate increasing by 2.4% over the past month [7] - Positive trends in earnings estimate revisions are correlated with near-term stock price movements [7] Group 5: Investment Positioning - Griffon has achieved a Zacks Rank of 2 (Buy) and a Growth Score of A, positioning it well for potential outperformance in the market [9]

The Zacks Style Scores is a unique set of guidelines that rates stocks based on three popular investing types, and were developed as complementary indicators for the Zacks Rank. This combination helps investors choose securities with the highest chances of beating the market over the next 30 days. Based on their value, growth, and momentum characteristics, each stock is assigned a rating of A, B, C, D, or F. The better the score, the better chance the stock will outperform; an A is better than a B, a B is b ...

Griffon Corporation (GFF) stands to benefit from strength across its businesses, focus on operational excellence and shareholder-friendly policies. The company remains focused on investing in growth opportunities and strengthening its long-term market position. GFF, which has a market capitalization of nearly $3.4 billion, currently sports a Zacks Rank #1 (Strong Buy). Let's delve into the factors that have been aiding the firm for a while now. End-Market Strength: Griffon is witnessing strong momentum in t ...

Group 1 - Zacks Premium offers various tools to help investors make informed decisions and invest confidently in the stock market [1][2] - The Zacks Style Scores are indicators that rate stocks based on value, growth, and momentum characteristics, aiding investors in selecting stocks likely to outperform the market [3][4][5][6][7] Group 2 - The Value Score focuses on identifying undervalued stocks using financial ratios like P/E and Price/Sales [4] - The Growth Score assesses a company's financial health and future outlook based on earnings and sales projections [5] - The Momentum Score helps investors capitalize on price trends by analyzing recent price changes and earnings estimate revisions [6] Group 3 - The VGM Score combines all three Style Scores, providing a comprehensive rating for stocks based on value, growth, and momentum [7] - The Zacks Rank is a proprietary model that utilizes earnings estimate revisions to guide investors in building successful portfolios [8][9] - Stocks rated 1 (Strong Buy) have historically produced an average annual return of +25.41% since 1988, significantly outperforming the S&P 500 [9] Group 4 - Griffon Corporation (GFF) is highlighted as a stock to watch, rated 1 (Strong Buy) with a VGM Score of A [12] - GFF has a Momentum Style Score of B, with a 0.7% increase in shares over the past four weeks and an upward revision in earnings estimates for fiscal 2025 [13]

Investors might want to bet on Griffon (GFF) , as it has been recently upgraded to a Zacks Rank #1 (Strong Buy). This upgrade is essentially a reflection of an upward trend in earnings estimates -- one of the most powerful forces impacting stock prices.The Zacks rating relies solely on a company's changing earnings picture. It tracks EPS estimates for the current and following years from the sell-side analysts covering the stock through a consensus measure -- the Zacks Consensus Estimate.Since a changing ea ...