GFF - Earnings call transcript Q4 2020

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Operator

Greetings and welcome to the Griffon Corporation's Fourth Quarter 2020 Earnings Conference Call. At this time, all participants are in a listen-lonely mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Brian Harris, Senior Vice President and Chief Financial Officer. you. Thank

begin. may You

Brian Harris

Good Kramer, With Executive our Maria. call Officer. on is Ron Chairman afternoon, you, me everyone. the Thank and Chief

playback, earlier today. Our be are recorded being our the for in issued call which details release and press of is available will

based past, the performance can environments are they Such Exchange our in in the release the forward-looking subject about Griffon’s world our changes. cautionary the and the today’s statements risks as that comments which change our As views and to include and of will Securities statements see company’s in on and uncertainties Commission various in inherent businesses operate. filings. Please statements press

explained today’s those included adjust for reconciliations remarks, comparability in items our from press between we’ll our items in release. non-GAAP affect Finally, are that periods. These

will I Now Ron. to the over turn call

Ronald Kramer

this Thanks, from competitively. Griffon year operationally a position and everyone. and good strength both afternoon, entered of

capital on set business out plastics intensive Our driven of for stage flow the domestically XXXX branded and growth. strong revenue, the pivot cash commodity earnings focus manufactured continued and products

superior as to We across exceptional continue additional deliver captured quality market we have our businesses, share maintain and innovate to our realize customers. new also our products, product synergies service

the before upgraded their unprecedented homes our show strength well living and repaired year their performing outdoors. spaces, and has throughout as and were continued businesses more the performance of this pandemic portfolio Our product to consumers time organized spent

XX% up X%. strengths over to the results year finished our up the the the revenue reshaping. through year fiscal as years we've with as several portfolio results. and quarter year EBITDA prior reflex and fourth XX% strong up last the well EPS Our actions compared taken adjusted Adjusted We

strong $XX million XXXX generated cash to million also $XX in of free We in XXXX. compared flow

such continue and strong one during and year times well. health the with We conversion priorities of decisively performance spared this we're has risk and coupled pleased of continues $XXX do with year, renovations, dealing circulated stock help have growth of of our XXXX their execute for those strong with our in national across extending be unsecured the COVID-XX and our sufficient incorporating as employee COVID-XX the have guidelines upgrading while the invest to target implemented already continue to to facility our X.X proactively see have coupled no to on projects, of our of financial to and our fortify million additional any completed to outdoors, lawns with proceeds pandemic effects to our all uncertainties. Since our and August in action as the in customers equity was executed coming we safety, employees flow priority. safety leverage have and as our enhancing the balance We of exterior us X.X and brought continue net we're key we global and this bonds our their doors. will common our cash garage and consumers expense and pandemic, At to or authorities To tending year times. homes, enjoyment free of a will onset gardens, to their the strategy credit reacted closet on as health and offering safety took of health and their top public equity This of sheet. net-debt-to local ensuring maturities been facilities March, including to market XXXX other and and home to EBITDA million. businesses of offering, X.X achieving so. reduce early We to investing the end, offering In the providing immediately, our measures and leverage near-term on into that leverage liquidity ratio our a weather shares

be the case and facilities continue deemed All of operational; we however, shutdown of we mindful our shutdown U.S. currently to elevated occur. In should previous again. businesses are counts were of all now expect essential in facilities continue U.S. another our to that in Europe the broad and

lawn globally. and and Turning with our retailers strategic progress initiative Ireland. AMES across previously strategic storage update, market key operations, unified Canada, products, systems made now we've a fourth to in at our of facilities, we China. platform, being multiple Australasia broadened the and three our in centers development same We're major analytics organizational areas demand the home and and now about Professional within AMES into of our are for U.S., geographies, tools, our AMES this AMES excited strong announced initiative. United the data beginning quarter all we and The include segments this products, AMES leverages UK American facility Consumer executed which will Kingdom, focus solutions sure garden will seasonal U.S. all expanded information all Australia, of our and independent initiative businesses recently first manufacturing We've and serve across the North single

operations be footprint to consolidated global optimize will and facilities certain talent. Second,

Third, is fiscal more the U.S. strategic is and are to These AMES When $XX facilities year $XX XXXX actions initiative the global platform operations more million and to and in XXXX. fully $XX Expanding planned million completion our our will new original include end we initiative. now our a planned operations the with million, we inventory will expansion one of year in the of which to we growing million based business cash investments rollout beyond by be in than the an with in implemented, million operating initiative. savings calendar on million reduction $XX result these than of which increase $XX original manufacturing annual to results. efficiency $XX project the will improvements by fulfillment the expected of e-commerce extend and automation made support our

garage from the in Home had residential Products to same and section demand investing segment. resulting around drivers Professional Consumer our segment, homes Moving as Building strong in door XXXX we Products

being benefits for revenue XX% with and security year year increasing prior of over Door driven Commercial the demand warehouse at fourth had Our Backlog increased the XXXX demand e-commerce the combined was also business prior Telephonics products. order to compared and the the ended strong quarter fourth by Clopay, demand construction in strong million. $XXX year quarter.

have a continue of and to domestically internationally. We good opportunities, both pipeline

streamline an as and details. Telephonics We also this initiative organization he its efficiencies the its implemented facilities. announced operational Brian financial consolidating to will today more discuss improve through to goes that

and more efficiencies, demonstrate our to to a operating come improving XXXX. a through sheet XXXX of record you customers authorized XXXX This more since structure and our share shareholders in the on in we initiated per our has that me to Brian? Board $X.XX December to XX, XXth little rate an We XXXX. detail. dividend on cost better and successfully can XX% let we With increasing portfolio. which strengthening broader to take November value and We're to earlier XXXX. today at Finally, an annualized XX, over branded focus Brian managing of it quarterly product marks do results to our compound grown balance it service continuing believe dividend payable turn consecutive our on to shareholders, that,

Brian Harris

to year X% increased you, to XX% Normalized $XXX performance. prior to adjusted the Thank highlighting our prior the in for increased gross comparison quarter. both XX% by $XXX year I'll million, fourth EBITDA million $XX,XXX the profit Ron. quarter start increasing quarter Revenue was quarter. and consolidated over

XX.X% expenses to share and points administrative Our of compared year million income $X.XX quarter Fourth prior quarter were per the normalized the $XXX in compared selling, fourth basis or gross GAAP margin million general or year operations XX.X%. $XX is million XX% or quarter. revenue from of $XXX continuing prior to contracted $XX.X million per or XXX share. $X.XX Fourth to period

from items adjusted periods, that to year operations $X.XX $X.XX $XX from quarter per of or million compared affect million income per both current share prior was or continuing the Excluding share. comparability $XX net

full $XXX continuing in compared $XXX XXXX to the prior Normalized increased points or to and XX.X%. year for while and prior gross or revenue was to the increased income adjusted to million, gross million of XX.X% the results, the year. share. prior-year XX XXXX billion administrative normalized Turning were $X.X period increasing consolidated year operations year. was XX%, revenue million increased share million basis to or from million compared million $X.XX $XX per $XX million affect both general in selling, XX.X% profit share. the GAAP comparison excluding rate, items margin and million of X%to in that full prior full year. XX.X% for EBITDA operations per $XXX comparability year. $XX to or XX% quarter continuing expenses the the or $X.X were was $XX in the $X.X $XXX adjusted to quarter from compared year $XX expenses, year excluding fourth that compared Corporate million Effective million quarter. fiscal the per Again, fourth to prior both $XX for unallocated the XX.X% net XXXX $X.XX the million income was to tax per compared items periods, were year million spending in share $XX depreciation, from Capital excluding and or $XX affect of in compatibility prior our

and $XX initiative. $XX amortization of AMES the for million $XX to For the year million expenditures the million year. year. capital was capital fourth million related The full the expenditures in strategic compared to million quarter included year $XX for and $X prior current full totaled the Depreciation

debt balance position turns prior leverage on from sheet as of our million and a our XX, debt a as XXXX calculated and September we and half of year period. of Regarding reflects X.Xx had $XXX net liquidity one debt-to-EBITDA based This covenant. of deleveraging the

was subject Our loan revolving equivalents credit certain total the cash was outstanding availability $XXX facility and $XXX million billion. $X.XX million under were Borrowing covenants. and to debt

out COVID-XX third guidance We in fiscal like it XXXX, we this because of fiscal a pandemic's gained the having Regarding the clear in the withdrew of of reinstated our many regarding second uncertainties impact quarter year. our our fiscal guidance of in picture companies for effects arising other quarter QX pandemic.

a to has interim practice and guidance been that regular give year to Our update during guidance not once periods.

practice. that to returning are We

both We are pleased our EBITDA adjusted and guidance. revenue that we exceeded

year approximately billion. was full revenue $X.X guidance Our and we $X.X billion XXXX achieved

It Our worth million guidance that plus. achieved compared in was $XXX our back our than guidance adjusted before EBITDA the revenue of expenses was $XXX to XXXX EBITDA guidance provided third $XXX That XXXX. unallocated full noting increase XXXX higher to year significantly X% expenses before November is guidance and unallocated plus million. also and was in quarter X% adjusted reinstated original million we

providing not XXXX. annual guidance Regarding policy we the uncertainty as guidance, in we guidance year, we intend feel face XXXX particularly at and the with XXXX our all we our providing providing events beginning enter of challenging unprecedented XXXX, more is the to given and the updates to the at afterwards. for Nevertheless, continued guidance global follow achieve

We overall approximately in $X.X billion. revenue XXXX expect to be Griffon's

In $XXX terms we year one million and and unallocated profitability, initiative. fiscal costs to be of Telephonics AMES both related million or expect $XX time charges the excluding to adjusted EBITDA XXXX of better

$XX $XX million; million, fiscal $XX to million as in a platform $XX As personal approximately will one-time cost remaining the new costs. end Ron million duplicate are this by related initiative earlier, to of by and of expanded result exit now million costs, million reduction million of inventory $XX we levels. $XX will charges of $XX on one these both fully as $XX million, the The annual severance non-cash calendar as charges asset year one-time $XX million well $XX the initiative from initiative. of lease and increased and $XX from AMES costs, million $XX completion include XXXX implemented primarily and under training, of to The of increased approximately and cash includes million stated actions extend related which the charges and million implement of investments under comprised the to operating write-downs. in When are savings charges cash original based expect The original facility will personnel business project of which capital XXXX. such of are

force expected Telephonics $X was are improve approximately company followed million efficiencies. a consists the million facility which into in During million will initiative is amortization quarter, facilities. two organization is million reduction the initiated and million, cost which to Retirement recognized costs the These which in Depreciation in $X.X Telephonics million, Island $XX based which of be Total facilities in $XX recognized is $XX be Total and quarter in supporting Telephonics includes be million, with $XX AMES the the owned facilities order was the Employee actions QX, to three be will of for and of XXXX. fiscal approximately XXXX. Long amortization. streamline expenditures the occurring primarily $X.X of and supporting Voluntary consolidation. Plan, $X million consolidating expected expenditures first its also to which consolidation remainder for capital will capital fourth XXXX

generate We flow capital other expect we of in inclusive Telephonics. cash AMES other to continue excess investments income, are making free to at investments net of and and

XXXX. We expect net $XX interest approximately million expense for of fiscal

tax earnings legislative case always action geographic grades. will rate as matters and tax reform is the Our expected impact normalized guidance any approximately be including mix new on may XX%,

U.S. global attempts cases, spread and As environment, in our challenging. from and guidance related the environment as of the the to political providing with a XXXX a comment factor variability, in uncertain COVID-XX for potential to final as virus, the make the potential external challenging the combat impacts well increase macroeconomic guidance all fiscal global shutdowns

assumes commodity inflation wage to a of guidance and we mitigation be Our will combination actions and also offset through cost that able pricing.

the turn back over Ron. to I'll call Now,

Ronald Kramer

and XXXX Thanks, adding performance proud is the portfolio since began few pandemic year the in XXXX. to something years we Brian. repositioning, impact the the then we Griffon’s COVID-XX are of, a how from disruptions in has achieved total been just much considering

product top portfolio acquired expansion efficiency. providing expect competitively during and line levels, become realization would expected to the process our We value our in it companies. to our enhanced we the customers for the of Further, service actions and efficiencies improved of opportunities provide terms increased of growth stronger integration through by offerings, broader margin

was times. XX%, Free net for leverage consistent XXXX EBITDA are Our XX%. grew and those through our better with earnings EBITDA achieving XX, to share year position, increased strengthened of opportunities. financial cash and debt million, totaled down increased revenues goal our X%. Total debt, Adjusted flow X.X performance and XXXX per results leverage cash achieving paying $XX September we

strong businesses, to and leading brands advantage. growth on of believe a competitive diversity provides on foundation manufacturing, domestic the We continue emphasis a our focus our our and for

performance made have the there still We our improving progress, of considerable we but all is businesses. of know opportunity for existing

developments With and deliver know to work shown well committed thank strengthen to the appreciate In and will our of excellent to home these monitoring and we on our each Closing, are strategic results. as in acquisitions markets. exceptional remain are like customers operator, our take portfolio addition, but to any their we COVID-XX, all I'd this and continue welfare period. safety our we finding within committed We We our obstacles face order employees, the expand we're happy workforce, of communities. perseverance dedication and to of any product to challenging that that throughout new questions. has which X,XXX as importance our of

Operator

[Operator question. Please Instructions] Bob Our Labick question Securities. first with your is CJS with proceed from

Bob Labick

Thank strong you. Good very congratulations on afternoon nice quarter and a and year.

Ronald Kramer

Thanks, Bob.

Brian Harris

Thanks, Bob.

Bob Labick

It’s good.

whole as it's want exciting it, AMES. well, strong I And returns the be the strong. incremental with start that to looks looks project what expanding So to you're really

your tell where are about combination a that capabilities. you about the could doing little Is bit you're it kind one you'll is us if or and facing? a bit both? this enhancing logistics, Wondering You and now all outcomes front in of being backend just of e-commerce of be? the a where on regard, talked you little And what

Ronald Kramer

the initiative growth Let of individual a our me it's, our customers. -- think of supporting saying e-commerce start is by I each

of then and able when the believe to at for Wayfarers program, It's Lowe’s, there's ultimately, ourselves are in and some as it's delivery that for of broad be products, us to emerging, product those to you infrastructure people our the market a as to ability deliver some question? the essential end order to look the Brian, be Depot of the really our in interface want something the automated to order of Bob's we build branded directly accommodate leading is evolving details give type So well other and with the as the distinguish retailer ongoing people consumer. able going to support world. and But entry do pieces the e-commerce we of the of to Home like be manufacturer, part product ability on the to share be a like continue Amazons able Menards that to to to the and growth to of customer.

Brian Harris

I Yes, to would generally just that orders add completing e-commerce different home that, it are than is doing for large centers. for

on larger service our products orders while And the to automation the side, us So going the just you continuing to of fulfill one well excellent distribution as new as will will customers, centers. home manufacturing individual. as to have those maintain set side the help such one

Bob Labick

helpful, bit, you update coming. most topical, given impact And as then Does Got but an you. presidency have Biden on on and that how give and that's would what obviously international people Telephonics say is little really thank that ramping? the Telephonics outlook a for shifting it, any well, gears can is us the somewhat

Ronald Kramer

demand that we're going multiyear strong. have for turn the the foreign predictability that we that intelligent, Telephonics the sequestration for are is allies core surveillance goes but sales to is in spending and the budget the Telephonics reconnaissance, happened through continue U.S. question that than has in, that went impact to slower from the we back no us there and the an was military been programs products that domestic XXXX gives represents involved would there Clearly, ongoing liked, really that global a funding believe administration. in of defense visibility The business. in has Obama programs

is that the in cycle appreciation five-year have we're So and with a time, us this we revenues the front get five-year revenue very to the were our believe for back while we business cycle. happy not profits profitability at before its owned for seeing and us cyclicality. we the significantly both of we And through going business, down at level an of all in it's that down cycle something that we've long is sequestration a go went go towards that

the supplier. The cost that are as allies, to and for we be for we a continue reality believe effective will Navy, we U.S. ongoing products factual. So being political proven. is movement essential make view And battle the

Bob Labick

Got it.

market just you Okay, year U.S. from queue. back and wondering, snow one weak me in I any of season, the great. everything inventory last know, Last to pretty like, how And is like and seasonal northern, or Northeastern anything terms particularly or I’ll share was a going and generally plan create lumpiness the changes jump you shovels this then that? work like in have do in going through snow that significant ahead and and

Ronald Kramer

the as impact that would we've counter the point planting an any one what is incremental not different term seasonal outcome the and way leading spring any there's robust category products the diversified global product and we given it all balanced, an year been have impact seasonal and or the company, organization, not was. snow demand. just or we're that season, XX And, it's of able that, snow, to that that season least gives I not just enjoyed AMES season. very a and Yes, far far the owned to back but near seeing bit a is its a a lawn spring we those that market sell, far being balanced, issues. the going of we're company of business, years very concerned answer any on every seeing The snow us of both of different globally, than throughout more demand impact winter, or garden, snow the more as and But snow and nearly cyclical. But is all control any have different just this diversified, on we've about is, in one storage share

Bob Labick

it. Got

Okay, super, thank you very much.

Operator

Julio is Sidoti & Our next proceed with Romero question Co. your question. Please with with

Julio Romero

everyone. Hi, good afternoon,

of much for should layer fiscal expansion the On initiative, into models strategic XXXX? how the we restructuring our AMES

Brian Harris

of We million Sure, $XX about expecting were I'll $XX capital that. well million as of answer expenses expenditures. as

Julio Romero

offsets specifically Okay, in deeper got the second is that delve this into year? a expected Products could COVID-XX little related you of and in kind some And linger Consumer it. of and I quarters of the Professional of inefficiencies? kind quarter the the guess, to into And first bit

Brian Harris

Sure.

most long inefficiencies across the We put in will had for So seen and business yes, the pandemic programs we about facilities businesses. of in of place all Those will year as we've the that and CPP safe some keeping continue as million continuing. $X costs million related in have $X of is the because place. direct are to our our costs diminish

on million our costs an costs basis annualized direct So to in basis annualized keep about safe. an our on protocols we're $X place expecting and of employees of

Ronald Kramer

way it to sure and All there's we a horizon, on crisis, clearly add assume will that, the just basis. it's of to bit that employees, the costs. that the this is pandemic, going, been and still going ultimately, that into daily take of the and able in being impact while a when of it the well doing going in I'd we've care deliver this we're is were about going the that on treat take view making that were to because positive things very we haven't on to we able Julio, least and until that care happens, it's we concerned triumph whatever our of been focused same vaccine, to and it's, lot science what of our be keep financially customers, our

Julio Romero

when business, I the margin, your think about mean, range in already what gears garage Yes, exceeding the absolutely. your for, at margin fighting kind guidance, door targeted And, to I guess you're guess I you're I targeted believe. I switching just you're of

pullback the and see Professional in might that segment, a So implication in assumption? expect would you fair little that and bit XXXX, Products, a on margins then Consumer some margin is I for guess improvement the be you might a that of the

Ronald Kramer

is clear. that operated that were faced it be wish give anyone to extraordinary and period has I been the operating guidance business most a easy with. We've ever in

promise give look, has to, saying to guidance. talk record we what and deliver our under guidance, track you we'd the trying given over and been always all start that So that's years over like about we've by when

going many fiscal the so basis a same trends in that year year, fiscal to thing have year, weeks into six daily positive doing what XXXX. last next are were impact the We things and that but all going we're the are on still on, our

to than that we we've to try of years any these conservative. credit set broader but investors holders. our all earnings that the We which giving made far the give is remains be that businesses equity set expectations, try So I've and the power is we given near guidance, that comment same, term more over greater is guidance guidance for bar and our goal to isn't our the the

is to a that believe story. continue We compelling value this

on we lot Telephonics particularly have We continue particularly going way our and that of is margin of ahead still How the believe it's the around Group will and early integration margins much and Home story, business the more AMES, around CornellCookson us. to improvement to things that able in days of in the recovery good a to still our achieve, and be our Clopay. Building Products

warehouses I'll a out We continue change believe back retailing, commercial we a that in package e-commerce. result doors. is opportunity door, five time play and shipped And of out. going coming rolling remind going ago the Those warehouse. getting you accelerated there's movement saw, of steel that the to years every door the that to It's as to your to a have it's

change business several part years. going next Building the growth and over Products Home the of is our and So to

that. expect We

set in and plenty in things the are guidance have of We guidance we so think gone And clearly year are to than there's next going continue the to big turned story better that a a business be margins year good last better to come is saying we team Steve it to set year. clearly ago. that this invest year lot all years. than by the that several be and is his on more Lynch and the us, We reflective the we for and this out over

Julio Romero

questions. taking for the thanks Understood,

Ronald Kramer

Thank you.

Brian Harris

Thanks.

Operator

with Please Chan question. Josh from proceed your is question next with Baird. Our

Josh Chan

Congrats Good Hello. afternoon, good and Ron quarter. Brian. on a

Ronald Kramer

Thank you.

Brian Harris

Thank you.

Josh Chan

you're wanted I’m that getting I about strong same you recognizing but season momentum the current Yes, the kind to at in probably because, ask year it's fiscal kind momentum lawn opportunities? if, continuing and and type the AMES of refilling to into that see the will of have garden time, continuing from away just inventory of some wondering

Brian Harris

you’re [indiscernible]. Yes, actually

Josh Chan

Go sorry. ahead, I’m

Ronald Kramer

the United the are business anywhere I'm a the see is the us in strong States out is fiscal housing of and both will We bill. home believe this is and being I a is ahead One two spending recovery horizon. to that is on make accelerating not of stimulus year, spending go that come going bill, demand near of to levels consumer that the of things still trend believe two We this comment start and infrastructure continue an our clearly lot the to simply over that, well, in categories. the back lot a at trends the of

was and the are that a leading sell. resembling positive what business, and goes in many that occurring March. are in Those share something trends. every workforce, consumer product, will of increases side back have that the again, market country brand, the AMES before vaccine we get going people in pandemic are the these And we as that once wage we leading So product result started the our the to into so ability to are as this and recovery life have essential of once the happen products into a

in is trend COVID accelerating we years. believe there been our good a So that any as that We of around to even once we was effect to of spending on over trends going the that the house the really we don't is it feel in and was positioning people's to had that And period magic business. part were reengage. going a all continue about we of start and what believe

Josh Chan

this side, that's the of All taking of initiative? cost now on to to that, but a number, on sort of good then higher additional the savings could of expecting you the update us year other right, kind now And accomplish you're hear. piece phasing the cost

Brian Harris

Sure.

will end by okay original we'll timeframe hit done time the the initiative to see phase by of to to and $XX call way year first, the million incremental $XX with of after, the that we And with of in So expect we'll the first come on that was calendar XXXX. the what be million now still it the benefits. the balance we

Josh Chan

I $X.X then question my And year. the year last so last is billion $X.X on guess guidance, and this Okay. billion

back year? So just case? of the you're bit the line, sure the but of revenue be little kind I in thinking there you a mean, of of guess, I could guidance could the I'm of the rounding through walk a case there, what contemplate half upside in a and comp terms the there us downside kind does tougher

Brian Harris

Sure.

the So, the we have you as are get year, orders mentioned, off starting said, well, year half of demand. see that, we to, in just first the and the visibility and better we we when agree to When good as for we any we we get how do last, maybe going see items. half of to successful of the And virus the how year, comps. long the a those second of impacts and tougher vaccines lot unknowns, there's economic is

Josh Chan

for you Thank [indiscernible]. both your for time. It’s

Ronald Kramer

like We be conservative. to

Josh Chan

of Thank lot a sense. that you. Understood, makes

Ronald Kramer

Thank you.

Operator

Research. with Please Our Justin G next your question. Bergner proceed question is from with

Justin Bergner

Good Ron. Brian. Good afternoon, afternoon,

Ronald Kramer

Hi, Justin.

Brian Harris

Justin. Hi,

Justin Bergner

I of so the missed remarks. prepared I got dropped, opening some

or there fiscal year of were the guides one and I dropped and that apologies well as you revenue be me adjusted just if hit got what XXXX? So in for Could terms redundancies. two EBITDA others remind might

Brian Harris

cost EBITDA, expected corporate $XXX and Sure, corporate to and is be unallocated million. was - unallocated adjusted $XX million is revenue billion $X.X excluding

Justin Bergner

there? said you XX,

Brian Harris

Yes.

Justin Bergner

program guess Okay. to why defense, does your Thank be I for restructuring and consolidation for M&A in business, defense appetite lessen May presidential changing you. Telephonics? guess this, electronics a administration now the I on switching facility

Ronald Kramer

Well, come to the level the one getting sense were profitability facilities able obvious aligned, of right the think for make Telephonics. parts it revenue and the find better business easy I we is expect add then operating business to to in good for a increased it that a to to the, is, from M&A the would us any as efficient a be sized piece two capture the will footprint. price as I question, recovery And, that more as as of and we to the both have proportionate at one for us wish margin,

most love equity capital. So would our like Unfortunately of unlimited would the defense business. electronics the primes segment. and amount We we so grow of private to an

is for good it's doing So cash we'd being space business love and an find that, invested in opportunities, to better us generate incremental to free that value flow. while -- capital, in for returns continue to the on something and we're the that managing have increasingly competition able we about

Justin Bergner

expected the later? missed Okay, I'm facility the program sense. that is understood, savings to if quantify you makes did come that going consolidation in sorry, or restructuring I it,

Brian Harris

That will come later.

expect could You $X that. to on million one -- million or so $X

Justin Bergner

Products, million $XX of $XX to million $XX to additional in Okay. and $XX million Consumer annual generating you're Building plan. level is, modest the onetime Professional And of business, CapEx And and then in savings Home that seems like of shifting inventory. cost additional relatively just million spending sort an cash and of an in sorry, the savings a the and incremental it Products of reduction back of new cash

a, three program per you four forward should this spend extra though of of program the interpret sort considerations? the to of running and want as of still I So guess, COVID times that it's part with the time good because great return. perhaps even Should go macro budget, to that sort like as returns bit they're over interpret I enough, aren't or was or existing as a I

Brian Harris

on been on and time, The else. running affected to by couple So there a COVID or not things unpack. program anything is budget, initial significantly

returns look we at in investing it we're are a we in business well. different As know We But making an very it far as our much of that sort original projects. ourselves that from aren't acquisition. returns,

we've good year from this last Clopay’s that at have good facility done at prior year We initiatives we think we both gained end expansion did insight of and in Clopay and a Troy and or Top Mountain the is really investment. last original

are and we direct there Secondly, can calculate. things can things out we put the savings that are touch we

get ourselves as should we've we're to to we'll manufacture, beyond Those that, data, should much inventory when stated. to it it should of things our right harder from take we're and going our are how better benefits where going time inventory how better, have, the on much but having be Beyond how at benefit we well service customers it as as to well. above know and able to the be both and customers to it, will have located, be as

Justin Bergner

makes all that Okay, a lot of sense.

Just lastly, Consumer XX% of in versus sell any the and Professional number? terms idea through staggering of that type organic in demand growth Products

Brian Harris

very exactly sale of but meant, strong you're that's has what been asking. point sure yes, if what you not I'm

Justin Bergner

Yes, point sale. of

Ronald Kramer

see continue We trend continuing. to that

Justin Bergner

XX, quite so as very not strong? maybe as Okay, but high still

Ronald Kramer

Yes.

Justin Bergner

it. Got

Brian Harris

other. leads One to the

Justin Bergner

And Right, all good all to luck thanks. the right, initiatives.

Ronald Kramer

much. so you Thank

Brian Harris

Thanks, Justin.

Operator

question with proceed your Truist. Keith Please with with is next Our Hughes question.

Keith Hughes

as you this one of home go good business, from that if around it's next and you, to along? questions it big of off but retracting related that that Products, going seeing wonderful, being Thank and numbers is year, something, goes we Professional wonderful on and year of from Consumer Professional you're top with into lot investors sort I business the fall and understand I expect the have Products, foretells this line and conservative, something guidance, a as but in Consumer

Ronald Kramer

all of went our clearly is - better we're of depth said the accelerating a to what's there telling crisis. pandemic at be good million. and being start recovery. million at than say, that clearly in we good year. the process ago, situation seen the a going in ended million year XXXX. and as The reinitiated it $XXX for year meet have very level we our of to in we're XXXX unprecedented comfortable, makes result $XXX we're in, for predictability into looking it August you a and going plus out guidance, for going into at an just And able We there the happen whole trends that's this demand The we're we be at is of view timing result $XXX pandemic. and the the remind setting us look We at expectations we're is ongoing view the be to off guidance Yes, us a and this the I'll as a suspended to XXXX. we you of the able year that to at as saw that that that of We business that to trends very

ahead consumer happens, the well back be path of million and that run if truly two going door economy knocking $XXX believe, and the was on We've in to business both at the you over I there's the believe margins, Peak put to ahead and sold that's power during business, happens coming able our the it that $XXX continue years to build of incremental ClosetMaid, EBITDA We and our in the plastics into We together. to is times. the we're $XXX go broader million time business not bought is us. that we And in the time of on we both products in we've around margins, a talked really to been of us. power get So, about you'll profitability. period. earning to and we're the a just that five-year future, of when million when bought times how see brands to difficult done earnings the the distant being invest very CornellCookson, and of Well, grow very business. really not whether run we that better our from, business XXXX,

Keith Hughes

consumer there's financial products. look, on and Okay, another question

that COVID the talked You well? persist back strong of out you year-over-year still despite those cost going issues quarter about December went down revenue, margins in the things into the are quarter, some and happened the as were into the to

Ronald Kramer

related related quarter, and natural in distribution areas supply facilities were No, that by with as the closing we around another, inefficiencies consolidations, combining in to to inefficiencies the so one saw hit center what well is sending you're items smaller the up Often you directly trucks, in out with smaller system. those that situations happens out distribution areas full don't at to and stores because end inefficiencies disasters. sending causes as

I things would expect to no, not two occur. those So

Keith Hughes

you. from all that's me. Okay, Thank

Ronald Kramer

you. Thank

Brian Harris

you. Thank

Operator

[Operator your Instructions] Stephens. Our with Grooms next Trey Please question question. is proceed with with

Trey Grooms

Thanks afternoon. question. taking good for my Hi,

up you're pretty any broad outsized products specific I talking was the, believe about guess the specifically mentioned me, gain first where share. one from I were seeing picking based some share CPP, you an there Are So there. market you there? it or

Brian Harris

It of pretty We're based. product are broad those across all lines. our was results seeing,

Trey Grooms

opportunity that and is you on like like for business, that And centers both garage got guys it’s guys that. on I the some residential And it. something Okay, touched then clearly things so commercial. then big the are the think is in and XXXX, is thoughts come you door you is, sounds fulfillment your of dynamic fulfillment a as that kind it helping we just Did or build guys that, XXXX around the that here And/or you helped on your out commercial there? fiscal to side you centers? of has enter the in more

Ronald Kramer

as and our of opportunity the about good XXXX, future. cycle security part that ability being partition, a of initiative predominantly residential do of was to drivers for to the than and rolling it’s CornellCookson out incrementally in in going comes channel, we dealer out new the sales both demand. future business, all a is, long-term strategic the business construction. architectural an sectional It's see be That growth We’re of small behind network what we expand that The that's build door that But products the always to after both we've it's to and clearly in but are replacement purchase that commercial. commercial have, different continue still ability none steel still big is life, part the level of really incremental played our talked beneficial. of about our big COVID, no, very box to are that the retailer the big meaningfully

Trey Grooms

at kind for mentioned demand you shoot setting for in, thanks guess it a out in where and to level it be you, one guess, of other your, you that response the I And that's one of you'd questions, meet to I of there. can of Got that. then expectations the all was

shipments, those me any I that we incremental is demand XXXX? guess yours think or incremental about, whether getting your constraints or a into there, from of thinking end strong is or concern had risk that any there got are I or that we your capacity there it suppliers like, since have concern such look demand be on as So

Ronald Kramer

we're it's distributing the manufacturing our working every in demand as of and see would and sure is able I more our challenge that day and meet to can efficient to that, to customers. demand in to be it and categories, call always we make we each product unlimited be

thrown are the you Trey So guidance. year, unexpected, this environment. open And than at at that, and you're know and to set but you in the good the for level get of change, more being and about that really businesses. trying comment I ever, our way be just we that it feel we things things as shows expectation the the is about setting transparent expectations the covering look try new to us run we to And part

we've We out levels ever the and that being the that have we time see always given most that as we're or exceeded business. any in anyone's met uncertain operated world a

quarter out. of guidance we're it's term free exceptional a worse one from year. is ourselves time, But a over at do more than And EBITDA But amount we going prove have. bar XXXX at we higher no and de-lever to did XXXX. significant cash capability at expect sitting than time, for to be earnings better so at our of And the we We're setting if we and year far time any near year, generate itself even this where one again. our the we're to been we believe than us already line a than at an it's that'll going a year

down the We ability our be ability to bigger see continue going to opportunities. credit deploy as you'll cash, of build of have proven our substantial capital, that is our on of pay debt cash and part story both is, XXXX over and businesses maturity, really have, to of time and, we're sheet. aggressive our we no through able are bonds acquisition so to of we to the to revolver, go our million buyers to balance part continue the grow amount we The $XXX find story

Trey Grooms

pass appreciate Thank on. all color. I it I'll Understood, the you.

Ronald Kramer

you. Thank

Brian Harris

Thank you.

Operator

with question is with Research. Bergner your question. proceed Please G Justin next with Our

Justin Bergner

spend? savings spend $X Thanks. on million $X million follow-ups. restructuring to The restructuring in just Two was and for the or quick electronics facility the consolidation the defense

Brian Harris

the was That facilities. referencing

side, couple that a see as other from the On well. million we'll

Justin Bergner

Home great, have for memory? you other Okay, can term is articulated Building remind And that then question so you margin thanks. Products recently EBITDA what our and just guidance medium us, you can is, refresh the the

Brian Harris

Sure.

well guidance unusual we in our We're say general as macro out as in as the So the least plus. of from times, economics, have lot and outperform Obviously, as macroeconomic. million we and $XX there in that. this uncertainty directly to a year of from well there's COVID

that to continue lap continue plus, going and on work to it. to we'd we're So -- like to

that we We in there and long margin very business. there's haven't opportunity improve expect still been the to that

Justin Bergner

Great, thank you.

Operator

of end comments. Ron the question-and-answer reached for Chief Executive would floor have to We our I Officer concluding Kramer, back session. to like over turn the

Ronald Kramer

well. Bye-bye. to up Thank forward with We be following in you January. you. safe, stay Take care, look

Operator

your for you Thank conference. today's concludes participation. This

disconnect may lines You this your at time.

Griffon (GFF) 12 Nov 202020 Q4 Earnings call transcript