Financial Data and Key Metrics Changes - Third quarter revenue decreased by 5% to $614 million, while adjusted EBITDA before unallocated amounts increased by 5% to $148 million, resulting in an EBITDA margin of 24.1%, an increase of 240 basis points [8][11] - GAAP net loss for the third quarter was $120 million or $2.65 per share, compared to net income of $41 million or $0.84 per share in the prior year quarter [11] - Free cash flow during the quarter was $115 million, slightly down from $120 million in the prior year quarter [11] Business Line Data and Key Metrics Changes - Home and Building Products (HBP) revenue increased by 2% to $400 million, with an adjusted EBITDA of $129 million, up 9% year-over-year [12] - Consumer and Professional Products (CPP) revenue decreased by 16% to $213 million, with adjusted EBITDA down 14% to $19 million, primarily due to decreased volume and weak consumer demand [12][13] Market Data and Key Metrics Changes - The overall consumer demand remains weak, particularly affecting the CPP segment, with ongoing tariff impacts disrupting historical customer ordering patterns [5][14] - The Australian market showed solid performance, contributing positively to the overall results [6] Company Strategy and Development Direction - The company is committed to a capital allocation strategy that includes investing in businesses, opportunistically repurchasing shares, and reducing debt [16] - The company reaffirmed its full-year EBITDA guidance of $575 million to $600 million while reducing revenue expectations by $100 million to $2.5 billion due to ongoing consumer weakness in the CPP segment [6][14] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the long-term recovery of the CPP segment, contingent on stabilization of tariffs and consumer confidence returning [27][28] - The company expects to generate over $1 billion in free cash flow during the fiscal year and the next two years [16] Other Important Information - The company repurchased $40 million of its stock during the third quarter, with a total of $538 million repurchased since April 2023, reducing outstanding shares by 18.4% [6][7] - A quarterly dividend of $0.18 per share was authorized, marking the 56th consecutive quarterly dividend [7] Q&A Session Summary Question: Can you discuss the pricing strategy for CPP and the impact of tariffs? - Management indicated that price increases have been implemented in certain instances, but detailed information is limited due to sensitive customer discussions [19] Question: What are the sell-through trends at retail? - Retail continues to see reduced point-of-sale activity, influenced by weak consumer demand and weather conditions [20] Question: How is pricing realization tracking in HBP? - Pricing realization is generally tracking in line with expectations, with positive price mix contributing to performance [22] Question: What is the outlook for CPP demand recovery? - Management noted that it is difficult to project the timing of a demand rebound, but stabilization of tariffs may help restore consumer confidence [27][28] Question: What are the long-term margin targets for CPP? - The long-term target for CPP margins is 15%, but achieving this will require a return of consumer demand [30][35] Question: Are there any new cost optimization initiatives underway? - Ongoing investments in automation and efficiency projects are in place, particularly in the home building product segment [43]

[Third Quarter 2025 Financial Highlights](index=1&type=section&id=Third%20Quarter%202025%20Financial%20Highlights) [Consolidated Performance](index=1&type=section&id=Consolidated%20Performance) Griffon's Q3 2025 revenue decreased 5% to $613.6 million, reporting a $120.1 million net loss due to impairment, yet adjusted net income grew 14.4% and adjusted EBITDA increased 7.3% Q3 2025 Consolidated Financial Results | Metric | Q3 2025 (USD) | Q3 2024 (USD) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | $613.6 million | $647.8 million | -5% | | Net Income (Loss) | ($120.1 million) | $41.1 million | N/A | | EPS (Loss) | ($2.65) | $0.84 | N/A | | Adjusted Net Income | $69.2 million | $60.5 million | +14.4% | | Adjusted EPS | $1.50 | $1.24 | +21.0% | | Adjusted EBITDA | $134.7 million | $125.5 million | +7.3% | - The net loss was driven by a pre-tax impairment charge of **$243.6 million** (**$217.2 million** after tax) related to the Hunter Fan acquisition goodwill and intangible assets within the Consumer and Professional Products (CPP) segment[3](index=3&type=chunk)[24](index=24&type=chunk) [Management Commentary](index=1&type=section&id=Management%20Commentary) Management noted strong HBP performance and improved CPP margins, reaffirming full-year EBITDA guidance, supported by free cash flow for capital allocation - The Home and Building Products (HBP) segment's performance exceeded expectations, driven by a **31.4% EBITDA margin** in the first nine months due to favorable price and mix[6](index=6&type=chunk) - The Consumer and Professional Products (CPP) segment's EBITDA margin improved by **270 basis points** year-over-year for the first nine months, despite weak demand, thanks to a shift to an asset-light model in the U.S[6](index=6&type=chunk) - In the first nine months of fiscal 2025, the company utilized its **$261 million** of free cash flow for significant capital return and deleveraging activities[6](index=6&type=chunk) Capital Allocation (First Nine Months of FY2025) | Activity | Amount (USD) | | :--- | :--- | | Share Repurchases | $113 million | | Debt Reduction | $76 million | | Dividends Paid | $32 million | [Segment Operating Results](index=2&type=section&id=Segment%20Operating%20Results) [Home and Building Products (HBP)](index=2&type=section&id=Home%20and%20Building%20Products%20(HBP)) HBP segment revenue increased 2% to $400.2 million in Q3, driven by favorable price and mix, with adjusted EBITDA growing 9% to $128.8 million HBP Q3 Performance | Metric | Q3 2025 (USD) | Q3 2024 (USD) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | $400.2 million | $394.2 million | +2% | | Adjusted EBITDA | $128.8 million | $118.5 million | +9% | - Revenue growth was attributed to a **3% positive impact** from price and mix, partially offset by a **1% decline** in volume[7](index=7&type=chunk) [Consumer and Professional Products (CPP)](index=2&type=section&id=Consumer%20and%20Professional%20Products%20(CPP)) CPP segment revenue declined 16% to $213.4 million in Q3 due to weak demand and tariffs, resulting in a 14% adjusted EBITDA decrease to $19.2 million, partially mitigated by sourcing CPP Q3 Performance | Metric | Q3 2025 (USD) | Q3 2024 (USD) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | $213.4 million | $253.6 million | -16% | | Adjusted EBITDA | $19.2 million | $22.3 million | -14% | - The revenue decrease was primarily driven by a **19% volume decline** resulting from reduced consumer demand and disrupted customer ordering patterns in the U.S. due to increased tariffs[8](index=8&type=chunk) - The negative impact of lower revenue on Adjusted EBITDA was partially offset by benefits from the U.S. global sourcing expansion, improved margins, and reduced administrative expenses[9](index=9&type=chunk) [Financial Position and Capital Allocation](index=2&type=section&id=Financial%20Position%20and%20Capital%20Allocation) [Balance Sheet and Liquidity](index=2&type=section&id=Balance%20Sheet%20and%20Liquidity) As of June 30, 2025, Griffon maintained strong liquidity with $107.3 million cash and $449.5 million revolver availability, reducing net debt to $1.34 billion and improving its leverage ratio to 2.5x Balance Sheet Summary (as of June 30, 2025) | Metric | Value (USD) | | :--- | :--- | | Cash and Equivalents | $107.3 million | | Total Debt Outstanding | $1.45 billion | | Net Debt | $1.34 billion | | Revolver Availability | $449.5 million | - The net debt to EBITDA leverage ratio improved to **2.5x**, compared to **2.6x** at September 30, 2024, and **2.7x** at June 30, 2024[11](index=11&type=chunk)[26](index=26&type=chunk) [Cash Flow](index=2&type=section&id=Cash%20Flow) The company generated strong cash flow, with free cash flow reaching $261 million for the first nine months of fiscal 2025, and Q3 capital expenditures totaling $8.4 million - Free cash flow for the first nine months of fiscal 2025 was **$261 million**, reflecting strong operating results[12](index=12&type=chunk)[26](index=26&type=chunk) - Net capital expenditures for the third quarter ended June 30, 2025, were **$8.4 million**[12](index=12&type=chunk) [Share Repurchases](index=2&type=section&id=Share%20Repurchases) Griffon repurchased 0.6 million shares for $40.3 million in Q3, totaling 18.4% of outstanding shares since April 2023, with $319.6 million remaining in the authorization - In Q3 2025, the company repurchased **0.6 million shares** for **$40.3 million**, at an average price of **$69.28 per share**[13](index=13&type=chunk) - From April 2023 through June 30, 2025, Griffon has purchased **10.5 million shares** (**18.4%** of outstanding shares) for a total of **$538.4 million**[13](index=13&type=chunk) - As of June 30, 2025, **$319.6 million** remained available under the share repurchase authorization[13](index=13&type=chunk) [Updated 2025 Outlook](index=3&type=section&id=Updated%202025%20Outlook) [Full-Year Guidance](index=3&type=section&id=Full-Year%20Guidance) Griffon updated its FY2025 outlook, lowering revenue guidance to $2.5 billion due to weak CPP demand, but maintained adjusted EBITDA guidance of $575 million to $600 million, supported by improved HBP margins Fiscal 2025 Guidance Update | Metric | New Guidance | Prior Guidance | | :--- | :--- | :--- | | Revenue | $2.5 billion | $2.6 billion | | Adjusted EBITDA | $575 million - $600 million | Maintained | | HBP EBITDA Margin | > 31% | > 30% | | CPP EBITDA Margin | ~ 8% | > 9% | | Interest Expense | $95 million | $102 million | | Capital Expenditures | $60 million | $65 million | - The **$100 million** revenue guidance reduction is attributed to the CPP segment, reflecting ongoing weak consumer demand and the impact of increased tariffs[14](index=14&type=chunk) - The company continues to expect free cash flow to exceed net income for the full fiscal year[16](index=16&type=chunk) [Appendix: Financial Statements and Reconciliations](index=6&type=section&id=Appendix%3A%20Financial%20Statements%20and%20Reconciliations) [Non-GAAP Reconciliations](index=6&type=section&id=Non-GAAP%20Reconciliations) This section provides detailed reconciliations of non-GAAP financial measures, such as Adjusted EBITDA and free cash flow, to their most directly comparable GAAP counterparts - Reconciliation of segment adjusted EBITDA and adjusted EBITDA to income (loss) before taxes is provided, detailing adjustments for interest, depreciation, amortization, impairments, and other items[23](index=23&type=chunk)[24](index=24&type=chunk) - A reconciliation of net cash provided by operating activities to Free Cash Flow (FCF) is included[25](index=25&type=chunk)[26](index=26&type=chunk) - A reconciliation of net income (loss) to adjusted net income and the corresponding earnings per share figures is presented, excluding items like restructuring charges and goodwill impairments[35](index=35&type=chunk) [Condensed Consolidated Financial Statements](index=9&type=section&id=Condensed%20Consolidated%20Financial%20Statements) This appendix presents the unaudited condensed consolidated financial statements, including Statements of Operations, Balance Sheets, and Statements of Cash Flows, for periods ended June 30, 2025, and 2024 - The Condensed Consolidated Statements of Operations details revenue, costs, operating expenses, and net income (loss) for the three and nine months ended June 30, 2025 and 2024[31](index=31&type=chunk) - The Condensed Consolidated Balance Sheets present the company's assets, liabilities, and shareholders' equity as of June 30, 2025, compared to September 30, 2024[32](index=32&type=chunk)[33](index=33&type=chunk) - The Condensed Consolidated Statements of Cash Flows outline the cash inflows and outflows from operating, investing, and financing activities for the nine months ended June 30, 2025 and 2024[34](index=34&type=chunk)

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]