GRIFFON CORPORATION ANNOUNCES
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OPERATING RESULTS FOR THE SECOND QUARTER OF FISCAL 2003
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Jericho, New York, April 30, 2003 - Griffon Corporation (NYSE:GFF) today
reported operating performance for the second quarter of fiscal 2003, ended
March 31, 2003. Net sales for the quarter were $277,330,000 compared to
$267,308,000 for the second quarter of fiscal 2002. Income before income taxes
increased to $11,236,000 from $10,445,000. Net income was $4,617,000 in the
current quarter compared to $4,815,000 in the second quarter of 2002. Diluted
and basic earnings per share were $.14 in the second quarter of both fiscal 2003
and 2002.
Garage doors' profitability improved on the strength of manufacturing
efficiencies and effective cost control, and was also positively impacted by the
2002 divestiture of Atlas, an unprofitable commercial operation. Net sales of
the garage doors segment were lower compared to last year primarily due to the
Atlas divestiture and inclement weather conditions in the segment's markets.
Net sales of the specialty plastic films segment increased substantially
compared to last year's second quarter. The growth was principally due to higher
unit volumes, the effect of a weaker U.S. dollar on translated foreign sales,
the net sales of the Brazilian operation acquired in the latter half of fiscal
2002 and selling price adjustments to pass through raw material (resin) price
increases to customers. Resin price increases have been substantial; raw
material cost increases in the quarter exceeded related selling price
adjustments by approximately $3.5 million. Also impacting the segment's
profitability in the quarter were costs associated with manufacturing facility
expansion for existing and new products. The electronic information and
communication systems segment, Telephonics, reported lower sales primarily due
to delays in anticipated awards of new orders which are expected to pick up as
the year progresses. Earnings in this segment declined slightly compared to last
year principally due to the sales decrease and increased research and
development expenditures.
Net sales for the six months ended March 31, 2003 were $579,484,000
compared to $569,210,000 for the first six months of fiscal 2002. Pretax income
for the six months rose to $32,317,000 compared to $30,739,000 last year. Income
before the accounting change last year to adopt Statement of Financial
Accounting Standards No. 142, "Goodwill and Other Intangible Assets", was
$15,537,000 for the first six months of 2003 compared to $15,397,000 last year.
During the quarter, cash generated from operations and existing cash
balances funded treasury stock purchases of $3,100,000, further reductions in
bank debt of $9,700,000 and capital expenditures of $12,300,000 primarily in
connection with ongoing programs in the specialty plastic films segment.
Griffon Corporation -
o is a leading manufacturer and marketer of residential, commercial and
industrial garage doors sold to professional installing dealers and
major home center retail chains;
o 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;
o 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
o 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, competitive factors and pricing
pressures, 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.
GRIFFON CORPORATION
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OPERATING HIGHLIGHTS
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(Unaudited, in thousands except for per share amounts)
For the Three Months Ended For the Six Months Ended
March 31, March 31,
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2003 2002 2003 2002
---- ---- ---- ----
Net sales:
Garage Doors $ 82,886 $ 93,302 $196,349 $213,039
Installation Services 66,672 63,520 138,992 134,630
Specialty Plastic Films 92,129 68,948 179,471 141,514
Electronic Information and Communication Systems 40,612 46,675 76,373 92,362
Intersegment eliminations (4,969) (5,137) (11,701) (12,335)
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$277,330 $267,308 $579,484 $569,210
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Operating income:
Garage Doors $ 2,966 $ 336 $ 13,883 $ 9,581
Installation Services 528 721 2,207 3,105
Specialty Plastic Films 9,156 10,064 19,822 19,884
Electronic Information and Communication Systems 2,894 3,086 4,616 5,526
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Segment operating income 15,544 14,207 40,528 38,096
Unallocated amounts (3,450) (2,863) (6,584) (5,397)
Interest expense, net ( 858) (899) (1,627) (1,960)
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Income before income taxes 11,236 10,445 32,317 30,739
Provision for income taxes (4,269) (4,178) (12,280) (12,295)
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Income before minority interest and
cumulative effect of a change in accounting principle 6,967 6,267 20,037 18,444
Minority interest (2,350) (1,452) (4,500) (3,047)
------ ------ ------ ------
Income before cumulative effect of a change
in accounting principle 4,617 4,815 15,537 15,397
Cumulative effect of a change in accounting principle, net
of income tax effect - - - (24,118) (1)
-------- -------- -------- --------
Net income(loss) $ 4,617 $ 4,815 $ 15,537 $ (8,721)
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Basic earnings per share of common stock:
Income before cumulative effect of a change
in accounting principle $ .14 $ .14 $ .47 $ .47
Cumulative effect of a change in accounting principle - - - (.73)
-------- -------- -------- --------
Net income(loss) $ .14 $ .14 $ .47 $ (.26)
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Diluted earnings per share of common stock:
Income before cumulative effect of a change
in accounting principle $ .14 $ .14 $ .46 $ .44
Cumulative effect of a change in accounting principle - - - (.69)
-------- -------- -------- --------
Net income(loss) $ .14 $ .14 $ .46 $ (.25)
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<FN>
(1) To reflect the impairment of the goodwill of the installation services segment pursuant to the adoption of Statement
of Financial Accounting Standards No. 142.
</FN>