[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]

[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].