Exhibit 99.1
GRIFFON CORPORATION ANNOUNCES RECORD OPERATING RESULTS FOR
THE FOURTH QUARTER AND FISCAL YEAR ENDED SEPTEMBER 30, 2003
Jericho, New York, November 5, 2003 - Griffon Corporation (NYSE:GFF)
today announced record operating results for the fourth quarter and fiscal year
ended September 30, 2003.
Net sales for the fourth quarter increased to $362,619,000 compared to
$326,059,000 for the fourth quarter of fiscal 2002. Pretax income for the
quarter rose to $31,565,000 compared to $16,556,000 for last year's fourth
quarter, which included a pre-tax charge of $10,200,000 to reflect the
divestiture of Atlas, an unprofitable peripheral garage door operation. Net
income for the current quarter was $16,163,000 compared to $7,220,000 for the
last quarter of 2002. Diluted earnings per share was $.50 for the fourth quarter
of fiscal 2003; last year's fourth quarter diluted earnings per share was $.21,
after a reduction of $.18 per share due to the divestiture charge. Basic
earnings per share for the last quarter of 2003 was $.53 compared to $.22 for
2002.
The strong fourth quarter results concluded a very successful year for
Griffon. Net sales for the fiscal year ended September 30, 2003 were
$1,254,650,000 compared to $1,192,604,000 for fiscal 2002. Pretax income for
fiscal 2003 increased to $83,065,000 from $64,403,000 last year. Net income for
fiscal 2003 was a record $43,022,000, and diluted earnings per share rose to
$1.28.
Specialty plastic films achieved sales increases in the quarter and
fiscal year due to higher unit volume and inclusion for a full year of operating
results for a business acquired in Brazil in late 2002. Selling price
adjustments to pass through higher raw material costs to customers and the
effect of a weaker U.S. dollar on translated foreign sales also contributed to
the sales growth. The segment's operating profits for the quarter and fiscal
year were driven by the sales increases, earnings of the acquired company and
operating efficiencies. The company is gratified by the success specialty
plastic films has achieved internationally. Its European operations are highly
profitable and growing, and in 2003 the segment successfully integrated its
Brazilian acquisition, solidifying its presence in Latin America. Specialty
Plastic Films has also commenced a major capital expenditure program in
connection with new opportunities with its major customers and to increase
capacity throughout its operations.
Sales and earnings of the building products operations reflected steady
improvement throughout the year. Higher sales in the fourth quarter were
principally attributable to increased unit volume and improved pricing. Building
products' operating profits improved principally due to the sales increases,
improved manufacturing efficiencies and the divestiture of Atlas. We are pleased
by the strong showing made by our building products operations, and expect to
see additional progress in 2004 through continued cost controls, and aggressive
programs to maintain high customer service levels.
Telephonics, the company's electronic information and communication
systems segment, finished 2003 strongly, with increased sales and profits in the
last quarter of the year primarily due to higher sales in connection with C-17,
LAMPS and other military production programs. Significant contract awards
recently announced by Telephonics include: a $35,000,000 contract to provide
Ground Surveillance Radar Systems for the U.S. Air Force that will be deployed
at air
bases worldwide; awards totaling $38,000,000 for our new Communications
Open System Architecture Integrated Radio Management System for the U.S. Air
Force C-17A Globemaster III transport aircraft; and a contract award to develop,
manufacture and deliver an advanced surveillance radar for the Canadian Air
Force's CP-140 Aurora Incremental Modernization Program that is expected to
exceed $60,000,000 over the life of the contract. We anticipate that this
segment will experience sales increases and earnings growth in 2004 in
connection with these newly awarded programs and as other programs transition
from development to production.
The company's operational performance in fiscal 2003 continued to
generate substantial cash flow. Cash generated from operations for the year was
$67,000,000, funding capital expenditures of $44,000,000. Also, in 2003 the
company successfully sold $130,000,000 of 4% convertible subordinated notes, the
proceeds of which were used to pay down $49,000,000 of revolving credit bank
debt and to purchase 3,100,000 shares of common stock for $50,000,000. During
2003, approximately $61,000,000 was used to acquire 3,800,000 shares of common
stock. Additional purchases under the company's stock buyback program will be
made from time to time, depending on market conditions, at prices deemed
appropriate by management.
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
OPERATING HIGHLIGHTS
(Unaudited, in thousands except for per share amounts)
For the Three Months Ended For the Twelve Months Ended
September 30, September 30,
-------------------------- ---------------------------
2003 2002 2003 2002
---- ---- ---- ----
Net sales:
Garage Doors $ 125,794 $ 121,195 $ 428,437 $ 444,443
Installation Services 78,718 73,555 289,409 278,831
Specialty Plastic Films 104,389 83,241 381,910 299,585
Electronic Information and
Communication Systems 59,819 55,061 178,693 195,430
Intersegment eliminations (6,101) (6,993) (23,799) (25,685)
------- ------- -------- --------
$ 362,619 $ 326,059 $1,254,650 $1,192,604
-------- -------- ---------- ----------
Operating income:
Garage Doors $ 10,836 $ 9,413 $ 33,755 $ 25,414
Installation Services 3,180 2,450 7,380 7,736
Specialty Plastic Films 14,779 11,672 44,244 40,278
Electronic Information and
Communication Systems 7,698 6,197 14,161 15,156
----- ----- ------ ------
Segment operating income 36,493 29,732 99,540 88,584
Unallocated amounts (3,202) (2,107) (12,290) (10,278)
Loss on divestiture of business - (10,200) - (10,200)
Interest expense, net (1,726) (869) (4,185) (3,703)
------- ------- ------- -------
Income before income taxes 31,565 16,556 83,065 64,403
Provision for income taxes (11,995) (6,291) (29,876)(1) (22,506)(1)
Income before minority interest and
cumulative effect of a change in
accounting principle 19,570 10,265 53,189 41,897
Minority interest (3,407) (3,045) (10,167) (7,843)
------- ------- -------- -------
Income before cumulative effect of
a change in accounting principle 16,163 7,220 43,022 34,054
Cumulative effect of a change in accounting
principle, net of income tax effect - - - (24,118)(2)
--------- -------- --------- ---------
Net income $ 16,163 $ 7,220 $ 43,022 $ 9,936
--------- -------- --------- ---------
Basic earnings per share of common stock:
Income before cumulative effect of
a change in accounting principle $ .53 $ .22 $ 1.33 $ 1.03
Cumulative effect of a change in
accounting principle - - - (.73)
Net income $ .53 $ .22 $ 1.33 $ .30
----- ----- ------ -----
Diluted earnings per share of common stock:
Income before cumulative effect of
a change in accounting principle $ .50 $ .21 $ 1.28 $ .97
Cumulative effect of a change in
accounting principle - - - (.69)
----- ----- ------ -----
Net income $ .50 $ .21 $ 1.28 $ .28
----- ----- ------ -----
(1) Includes benefit of $1.7 million in 2003 and $2.0 million in 2002 on
resolution of tax contingencies and, in 2003, finalization of income taxes
on foreign earnings and remittances.
(2) To reflect the impairment of the goodwill of the installation services
segment pursuant to the adoption of Statement of Financial Accounting
Standards No. 142.