GRIFFON CORPORATION ANNOUNCES OPERATING RESULTS
FOR THE THIRD QUARTER OF FISCAL 2007
Jericho, New York, August 6, 2007 - Griffon Corporation (NYSE:GFF) today reported operating results for the third quarter of fiscal 2007. Net sales for the quarter ended June 30, 2007 were $398,726,000 compared to $429,071,000 for the third quarter of fiscal 2006. Income before income taxes was $7,401,000 compared to $26,943,000 last year. Net income was $4,397,000 in the current quarter compared to $19,363,000 last year. Diluted earnings per share for the quarter was $.14 compared to $.61 in last year’s third quarter.
The decline in sales and operating income in our garage door and installation services segments was principally due to declines in sales volume, principally a result of the slowdown in the new home construction and home resale markets. In both segments, management is continuing to evaluate and implement initiatives to reduce costs and improve operating efficiencies, awaiting an improvement in the market. Specialty Plastic Films segment sales were favorably affected by higher unit volume in Europe and the positive impact of foreign exchange offset by lower selling prices to our major customer and lower selling prices caused by resin cost fluctuations. The decrease in operating income for Specialty Plastic Films is primarily attributable to the impact of resin price and cost fluctuations and the lower selling prices to our major customer. The increase in sales of Telephonics, the company’s electronic information and communication systems segment, was primarily attributable to the MH60 program. The decrease in operating income is primarily attributable to a number of programs which had lower gross profit margins in the quarter and increased marketing expenses.
Net sales for the nine months ended June 30, 2007 were $1,220,412,000 compared to $1,153,746,000 for the first nine months of fiscal 2006. Income before income taxes for the nine months was $22,456,000 compared to $49,204,000 last year. Net income was $13,117,000 compared to $33,347,000 for the first nine months of 2006. Diluted earnings per share for the nine months was $.42 compared to $1.06 last year.
Cash flow provided by operations was $10,472,000 for the quarter. Capital expenditures were $4,123,000 which were funded by existing cash balances. Also, during the quarter $987,000 was used to acquire 45,000 shares of the company's common stock under its buyback program. Additional purchases will be made from time to time, depending on market conditions, at prices deemed appropriate by management or under a Rule 10b5-1 trading plan.
The Company retained Goldman, Sachs & Co. to assist the Company in evaluating components of our business, our capital structure and other potential strategic alternatives. The Company and Goldman, Sachs & Co. have concluded the initial evaluation of such alternatives. Due to present conditions in the residential housing and credit markets, options that would increase shareholder value are being explored but are not attractive at this time.
Griffon Corporation -
| | l | is a leading manufacturer and marketer of residential, commercial and industrial garage doors sold to professional installing dealers and major home center retail chains; |
| | l | installs and services specialty building products and systems, primarily garage doors, openers, fireplaces and cabinets, for new construction markets through a substantial network of operations located throughout the country; |
| | l | is an international leader in the development and production of embossed and laminated specialty plastic films used in the baby diaper, feminine napkin, adult incontinent, surgical and patient care markets; and |
| | l | develops and manufactures information and communication systems for government and commercial markets worldwide. |
“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995: All statements other than statements of historical fact included in this release, including without limitation statements regarding the company’s financial position, business strategy and the plans and objectives of the company’s management for future operations, are forward-looking statements. When used in this release, words such as “anticipate”, “believe”, “estimate”, “expect”, “intend”, and similar expressions, as they relate to the company or its management, identify forward-looking statements. Such forward-looking statements are based on the beliefs of the company’s management, as well as assumptions made by and information currently available to the company’s management. Actual results could differ materially from those contemplated by the forward-looking statements as a result of certain factors, including but not limited to, business and economic conditions, results of integrating acquired businesses into existing operations, competitive factors and pricing pressures for resin and steel, capacity and supply constraints. Such statements reflect the views of the company with respect to future events and are subject to these and other risks, uncertainties and assumptions relating to the operations, results of operations, growth strategy and liquidity of the company. Readers are cautioned not to place undue reliance on these forward-looking statements. The company does not undertake to release publicly any revisions to these forward-looking statements to reflect future events or circumstances or to reflect the occurrence of unanticipated events.
