GRIFFON CORPORATION ANNOUNCES
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RECORD OPERATING RESULTS FOR THE THIRD QUARTER OF FISCAL 2004
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Jericho, New York, August 3, 2004 - Griffon Corporation (NYSE:GFF) today
reported record operating performance for the third quarter of fiscal 2004,
ended June 30, 2004, with each of its business units contributing to the
improved operating results.
Net sales for the quarter were $367,948,000 compared to $312,547,000 for
the third quarter of fiscal 2003. Income before income taxes increased to
$24,760,000 from $19,183,000. Net income was $13,157,000 in the current quarter,
up from $11,322,000 in the third quarter of 2003. Basic earnings per share for
the quarter was $.44 compared to $.34 last year and diluted earnings per share
was $.42 compared to $.33 in 2003.
Telephonics, the company's electronic information and communication systems
segment, had a very strong third quarter, attaining substantial increases in
sales and operating profit. The improvement was primarily driven by Telephonics'
performance on new program awards for 2004, including a contract to provide
ground surveillance radars for perimeter protection of U.S. Air Force bases.
Specialty plastic films also achieved higher sales and increased operating
profit. The segment's operating improvement reflects improved pricing and
product mix and the effect of a weaker U.S. dollar on translated foreign sales,
partly offset by lower domestic unit volumes. The building products operations
also contributed to the quarter's improved operating results. Continued sales
gains in installation services and its elimination last year of an
underperforming location coupled with effective expense control and higher unit
sales of garage doors in all channels of distribution were the principal reasons
for the operating improvement.
Consolidated earnings in the quarter reflected increased interest expense of
$1,100,000 associated with the company's convertible subordinated notes which
were sold in the latter part of fiscal 2003.
Net sales for the nine months ended June 30, 2004 were $1,024,086,000
compared to $892,031,000 for the first nine months of fiscal 2003. Income before
income taxes for the nine months rose to $69,766,000, up from $51,500,000 last
year. Net income increased to $34,934,000 from $26,859,000 for the first nine
months of 2003. Diluted earnings per share for the nine months was $1.10
compared to $.79 last year.
Cash flow from operations during the quarter was $12,000,000, funding
treasury stock purchases of $5,000,000 and capital expenditures of $6,000,000.
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 Nine Months Ended
June 30, June 30,
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2004 2003 2004 2003
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Net sales:
Garage Doors $ 120,525 $ 106,294 $ 338,478 $302,643
Installation Services 79,900 71,699 228,937 210,691
Speciality Plastic Films 100,065 98,050 310,679 277,521
Electronic Information and
Communication Systems 73,302 42,501 162,201 118,874
Intersegment eliminations (5,844) (5,997) (16,209) (17,698)
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$ 367,948 $ 312,547 $1,024,086 $892,031
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Operating income:
Garage Doors $ 9,638 $ 9,036 $ 26,862 $ 22,919
Installation Services 3,495 1,993 8,193 4,200
Speciality Plastic Films 10,780 9,643 38,862 29,465
Electronic Information and
Communication Systems 6,237 1,847 11,936 6,463
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Segment operating income 30,150 22,519 85,853 63,047
Unallocated amounts (3,605) (2,504) (10,693) (9,088)
Interest expense, net (1,785) (832) (5,394) (2,459)
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Income before income taxes 24,760 19,183 69,766 51,500
Provision for income taxes (9,162) (5,601) (1) (25,814) (17,881) (1)
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Income before minority interest 15,598 13,582 43,952 33,619
Minority interest (2,441) (2,260) (9,018) (6,760)
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Net income $ 13,157 $ 11,322 $ 34,934 $ 26,859
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Earnings per share of common stock:
Basic $ .44 $ .34 $1.17 $ .81
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Diluted $ .42 $ .33 $1.10 $ .79
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(1) Includes benefit of $1.7 million on resolution of tax contingencies and
finalization of income taxes on foreign earnings and remittances.