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

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

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 ...

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]

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 ...

As such, the Zacks rating upgrade for Griffon is essentially a positive comment on its earnings outlook that could have a favorable impact on its stock price. The change in a company's future earnings potential, as reflected in earnings estimate revisions, has proven to be strongly correlated with the near-term price movement of its stock. That's partly because of the influence of institutional investors that use earnings and earnings estimates for calculating the fair value of a company's shares. An increa ...

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