GRIFFON CORPORATION ANNOUNCES
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OPERATING RESULTS FOR THE SECOND QUARTER OF FISCAL 2005
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Jericho, New York, May 3, 2005 - Griffon Corporation (NYSE:GFF) today
reported operating results for the second quarter of fiscal 2005, ended March
31, 2005. Net sales for the quarter were $322,473,000 compared to $317,636,000
for the second quarter of fiscal 2004. Income before income taxes was $4,101,000
compared to $19,348,000 last year. Net income was $2,884,000 in the current
quarter, down from $8,662,000 in the second quarter of 2004. Diluted earnings
per share for the quarter was $.09 compared to $.27 in last year's second
quarter.
Operating results in the second quarter of fiscal 2005 were impacted by the
continued raw material price escalation in the specialty plastic films and
garage doors segments. The garage doors segment experienced significant raw
material (steel) cost increases in the second quarter. In specialty plastic
films, raw material (resin) costs also increased over first quarter levels in
North America and advanced more sharply in Europe. Although the company has
continued to raise selling prices in both of these segments, their raw material
cost increases have not been fully recovered. In garage doors, higher net sales
were driven primarily by selling price increases and by favorable product mix.
Specialty plastic films continued to experience reduced unit volume related to
product design changes by its major customer. These reductions were partly
offset by the effects of higher selling prices to pass through raw material cost
increases. Sales volume and profitability in installation services continued to
be negatively affected by narrower margins due to higher costs of products with
significant steel content (garage doors and
fireplaces), a weaker construction environment in certain of its markets and by
increased competition. Net sales of the electronic information and communication
systems segment, Telephonics, increased principally due to growth in
international radar programs. Telephonics profitability was reduced slightly
compared to last year primarily due to operating costs associated with companies
acquired during the quarter.
Net sales for the six months ended March 31, 2005 were $662,647,000
compared to $656,138,000 for the first six months of fiscal 2004. Income before
income taxes for the six months was $23,656,000 compared to $45,006,000 last
year. Net income was $13,336,000 compared to $21,777,000 for the first half of
2004. Diluted earnings per share for the six-months was $.43 compared to $.69
last year.
Cash flow from operations during the quarter was $25,000,000 which was used
to fund acquisitions of $9,000,000, capital expenditures of $6,000,000, and
long-term debt reductions of $6,000,000.
A conference call discussing second quarter results is scheduled for 4:00
p.m. EDT on May 3, 2005 and can be accessed by dialing (877) 423-3902. Callers
should ask to be connected to Griffon Corporation's second quarter earnings
teleconference. A replay of the call will be available one hour following the
call and can be accessed by dialing (800) 642-1687, conference code: 5740620.
The replay will be available until 5:00 p.m. EDT on May 17, 2005. In conjunction
with this conference call, the Company has also posted on its website at
www.griffoncorp.com certain financial information regarding its second quarter
results which will be archived and available at the website for one year.
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 Six Months Ended
March 31, March 31,
2005 2004 2005 2004
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Net sales:
Garage Doors $ 110,174 $ 96,093 $ 245,881 $ 217,953
Installation Services 66,508 72,332 138,797 149,037
Specialty Plastic Films 94,533 106,613 185,865 210,614
Electronic Information and Communication Systems 56,353 47,259 102,755 88,899
Intersegment eliminations (5,095) (4,661) (10,651) (10,365)
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$ 322,473 $ 317,636 $662,647 $ 656,138
Operating income:
Garage Doors $ (1,251) $ 3,964 $ 11,398 $ 17,224
Installation Services 1,287 1,692 2,576 4,698
Specialty Plastic Films 6,220 15,142 14,818 28,082
Electronic Information and Communication Systems 3,397 3,669 5,921 5,699
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Segment operating income 9,653 24,467 34,713 55,703
Unallocated amounts (4,067) (3,360) (8,047) (7,088)
Interest expense, net (1,485) (1,759) (3,010) (3,609)
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Income before income taxes 4,101 19,348 23,656 45,006
Provision for income taxes (1) (92) (7,159) (7,327) (16,652)
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Income before minority interest 4,009 12,189 16,329 28,354
Minority interest (1,125) (3,527) (2,993) (6,577)
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Net income $ 2,884 $ 8,662 $ 13,336 $ 21,777
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Earnings per share of common stock:
Basic $ .10 $ .29 $ .45 $ .73
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Diluted $ .09 $ .27 $ .43 $ .69
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(1) Includes a reduced provision in the second quarter of fiscal 2005 as a
result of a lower projected annual effective tax rate and the resolution of
other income tax matters