Griffon(GFF) - 2025 Q2 - Quarterly Results

Griffon Corporation Second Quarter 2025 Earnings Release Financial Highlights 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] - The company anticipates the Home and Building Products (HBP) segment will generate approximately 85% of total segment EBITDA for the year[5] Segment Performance 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) 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] - Adjusted EBITDA decreased 15% due to lower revenue, reduced overhead absorption, and higher labor/distribution costs, partially offset by lower material costs[7] - The HBP segment maintained a strong 30% EBITDA margin during the quarter[5] Consumer and Professional Products (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] - Adjusted EBITDA grew 18%, credited to the benefits of the global sourcing expansion and strong performance in Australia[9] - The company is leveraging its global supply chain and taking actions like supplier negotiations, cost management, and pricing to mitigate tariff impacts[5] Financial Position and Capital Management 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][21] - Borrowing availability under the revolving credit facility was $364.5 million at the end of the quarter[11] Shareholder Returns 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] - 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] - As of March 31, 2025, $359.8 million remained available under the Board-authorized share repurchase program[12] Consolidated Financial Statements 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 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 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 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 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 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] - 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] - A conference call to discuss the results was scheduled for May 8, 2025, at 8:30 AM ET[13]