GFF - Earnings call 1 2024 | Griffon Corporation

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Greetings. Welcome to the Griffon Corporation Fiscal First Quarter 2024 Earnings Conference Call.

[Operator Instructions] Please note, this conference is being recorded. I would now like to turn the conference over to Brian Harris, Chief Financial Officer. Thank you.

begin. may You

Brian Harris

morning. Griffon Good pleasure welcome to Thank First It's Quarter to Corporation's Call. Fiscal everybody you. my XXXX Earnings

for is call Chief this Griffon's me and Executive Ron Chairman Officer. Joining Kramer, morning's

our are was release recorded, morning available is earlier Our our website. replay earnings press call instructions issued Today's the in and this is on included and being release.

and see the forward-looking These today's and statements cautionary to risks Our world in performance. are as change Please Griffon's comments uncertainties statements will press can about in the filings. include statements our changes. that subject release SEC

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

With that, I'll the over turn call to Rob.

Ronald Kramer

thanks off at improved XXXX us. performance the for solid are targets well and for at cash positioned start strong with continued & Thanks, joining to and Professional the quarter good of Building Brian. meet is profitability financial highlighted by Products. our flow operating year. to we Consumer Home first and free morning, Fiscal a million, Good $XXX everyone, Products

benefited offset For year. favorable and due Products Home & Revenue revenue and prior sectional had HBP, EBITDA price to consistent by door orders, reduced quarter, elevated with year-over-year prior increased the the year. or customer were mix the we in the and Building from volume backlog

the Professional CPP. and Products Consumer to or Turning segment,

very all initiative, remains announced the by you expand and affected manufacturing to decreased schedule North improved driven May decreased budget. except the have to First costs. driven EBITDA in mills X at due facilities, U.S. CPP's tell previously million the the that ceased reduced XXXX, demand and production within wood on identified quarter $X when announced one. sourcing of Since quarter, global in strategy we American to revenue operations X%, decreased America. I'm by volume, customer our North CPP primarily pleased by initiative

manufacturing million over affected by actions feet. to the facility by conclude in These Grantsville, at reduce March operations X.X remaining XXXX. square footprint expect We will manufacturing Maryland our

the is As CPP. improve AMES with before, the key we've of emphasized strategy global element expansion to margins of our sourcing a

We will additional throughout achieve as the year updates we continue milestones. to provide

capital share allocation. increase authorization, total a authorization bringing Turning announced $XXX $XXX that to million November, to In time. we repurchase our to million at our the

totaling have at million. Since a During average XXXX the total authorization. or an shares at first X.X and $XX.XX shares share. of of under repurchased shares repurchase shares outstanding million end December we total $XX.XX remained $XXX price for average $XX These quarter, an outstanding million by XX, April of of quarter relative fiscal $XXX the XXXX. second of repurchases reduced we've through X.X repurchased At XX.X% the million per Griffon's million the to December,

Griffon a to March to of Board XX, Also of record dividend dividend shareholders. shareholders share quarterly authorized marking regularly quarterly XX February XXth yesterday, consecutive $X.XX per the the payable our on on

the resiliency we These dividends and our as continued reflect Our rate of dividend at confidence an in XX% compounded has initiated the plan annualized as in and our of businesses well XXXX. actions strategic since outlook. strength grown

it the to on turn details Brian more I'll financials. over for

Brian Harris

Ron. Thank you,

the million $XXX year. quarter, the to for prior quarter to $XXX quarter that Gross prior year increase margin of before the prior of an and EBITDA to basis million quarter. current from comparison by was in was to current XXX million compared year in million GAAP basis $XXX revenue X%, unallocated million adjusted before increased on profit period. of XX.X%, the $XXX amounts affect was quarter $XXX items decreased by excluding points. First comparability in Gross approximately compared X% prior in unallocated million the both year a the $XXX EBITDA profit

XXX Normalized increased points gross XX.X%. year-over-year basis margin by to

GAAP prior the year. and quarter general were First with expenses consistent administrative million, $XXX selling,

adjusting from compared expenses to of were SG&A $XXX the or revenue $XXX prior XX% XX.X% million both million periods, or revenue. items of Excluding year of

income net or year prior quarter $X.XX to in $XX to items current prior share compared or $XX $X.XX $XX million share income of or per year excluding share. quarter net million that comparability the $X.XX $XX was from million First per or Again, adjusted share. GAAP quarter both million affect periods, per the per all compared $X.XX was

consistent a $XX.X the million million in in to benefit quarter first $XX.X the million expenditures and quarter. expenses, million the prior $XX.X for quarter the Net quarter. compared in quarter unallocated the the $X.X Corporate prior million, year and Depreciation of year to year. prior with were compared excluding were depreciation $XX.X in capital totaled first amortization

segment Regarding our performance.

As and elevated earlier, backlog. orders for Building mentioned consistent year the from was volume offset customer well revenue of favorable pricing mix with Products Home quarter, as improved year by the prior Ron prior benefit & as reflecting X%,

$X.X and the by from year with footprint quarter mix. which from primarily American will prior effects volume labor being million, costs, Professional smaller $XXX to driven more million quarter Products production $X.X than and in reduced revenue. by reduced year quarter was the the and decreased reduced EBITDA to and North CPP's the due manufacturing and prior costs decreased North Consumer adjusted costs price the with increased demand the effects favorable of customer revenue of distribution and EBITDA consistent by to material Adjusted due offset America volume offset and to year million reduced reduced X% increased prior

which billion better than the end calculated debt-to-EBITDA net on debt of Regarding our $X.X our X.Xx based at debt year's of turn last quarter. a December is as X.Xx the first balance sheet as we covenants, X/XX liquidity net leverage leverage of of XXXX, XX, and had of

certain affect comparability of leverage in Our billion cash flow which in unallocated even In November net shareholders free the after $X.X $XXX to net from debt exceeding buybacks slightly at XXXX XXXX, fiscal $XX year. quarter. our via our guidance stock XXXX other revenue and and provided costs that September in -- year-end EBITDA, adjusted unchanged segment remains returning the income for charges million fiscal decreased XXXX and million and excludes

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

Ronald Kramer

Thanks, Brian.

for and I results debt. free at strong capital will upfront, This drive plan. said cash long-term We'll in strong in a operating the at operating improved solid profitability reinforce and continue shareholders. that our strategy These management Board and shares opportunistically performance to to our delivers our good include allocation use CPP. reducing to continue to cash flow, free flow continued outlook a value repurchasing performance off investing strategy businesses, is start confidence XXXX and strategic As and HBP our Griffon's with of

to recognize of dedication the to world Before like contributions I'd our and around and turn we employees Q&A, to their efforts the our success. management and

questions. any take we'll Operator,

Operator

come the Ahlersmeyer Deutsche first from with Instructions] Our Bank. line [Operator Joe of questions

Joseph Ahlersmeyer

a Congratulations orders update. strong in for within start HBP into improvement on here. the could dig the Great Yes. customer the wonder I if bit. we

any and sales Just between visibility order if offer bit trends color give on you can into those little commercial you second a then quarter just And trends? ahead HBP quarter residential maybe any here? potential the thoughts the more

Ronald Kramer

Sure.

be the taking investing market share. plus which by driven allows are We our times normalized helped marketing the been orders, to the and and have we our don't So side. trends with year overhang, it us prior we have residential are in mostly backlog being lead order believe

Northeast down the And and the quarter, year, far backlog -- year's As back second second driven we year. by be weather. prior overhang quarter we expect reasons. are to seasonality now for basically have elevated still the be Midwest to point backlog which from is the to X our we normal this low our as expecting of those volume And

Joseph Ahlersmeyer

Also your HBP, is you aided to kind sales quarter, expectations for bit like Understood. seems have price came also maybe of looks where a margin in in little ahead it the of here. the mix

the thinking I'm an emphasis maybe XX% the maybe update on plus year, more an Just thinking it? the on the now your plus for about around way of

Ronald Kramer

We're still at for year. comfortable that margins this in target and the or XX% confirming looking

Operator

CJS of from Our the line Bob come Labick with Securities. questions next

Bob Labick

And stick share showing the for on to just you're good to of in success a I Congratulations kind doors gains. start a with year. second. want

mentioned expanding sectional commercial gains in the can as down you bit. Clopay a the dealers. little residential doors just you're into CornellCookson You in now But backlog showing also share as the gains fulfill you're

Just far where you and along think process with . how on forward? an you give that are going update that us can go

Ronald Kramer

through days relatively and take and that in offering continue that us. some time. having pleased expanded process, So and product early quite in very getting we're will with are the for our still more good We're dealers

Bob Labick

in sell-in? I from Great. coming the what on we're expand just What American large was then the noted, spring into? hearing softness areas soft? And are it CPP demand. customers season And for Can CPP, Or North you were outlook in on your from is guess, a Okay. their And you that? sell-through for consumer? it little that

Brian Harris

Sure.

compared last year, our the now, is for very So customers, consumer very for as season, main which to most of be spring The not elevated at weather to weak we're weather reduced still wasn't which -- and good. was the assuming the still there's seems inventory of the driver demand. just normalized

Operator

from questions the with next Our Baird. of come line Robert Schultz

Robert Schultz

the should I the we was year. look conversion of the we the HBP cadence for just of through the about rest backlog How 'XX? rest and about think thinking as lapping

Brian Harris

Sure.

of would So last quarter, XX. we end year's the normalize second that March at be

I apples-to-apples mentioned comparison. more We've of and earlier, we second half to second year-over-year expect be as made the investments improve So the in an marketing, . half. year the volume in will of

Robert Schultz

we for the the it. year? how about thinking are And then buybacks of Got rest

Ronald Kramer

is and We'll a continue continue opportunistic, stock think be to to our value. compelling we

Operator

Stephens. of Our Trey line Grooms come the with next questions from

Trey Grooms

the Congrats nice on really results.

you on free So guess I to maybe flow. could cash first, up cash you flow the for Brian, on are mean And very cash touch thinking want year. free about free I strong on guys putting flow. the -- you're touch how I

as but to as I think concerned? be to free far to is for -- And there? guide any typically us as for it the for items or income, the flow changes we aware of cadence as see any cash update net current unusual far exceed what anything in is

Brian Harris

Sure.

global a for the expansion sourcing. sourcing CapEx CapEx, be our global We year. into project to to the So that the It related net as the cash generally, and second related any believe will all period. well than will including costs any income expansion our better does expansion quarter other as be usage to include still Troy

cadence flow be the being half the So strong. in second pretty cash will seen historically that we've with much

Trey Grooms

exceed -- expectation for But cash it to those here, you're investments about correct? items. with the to -- those that even flow unique be talking your Is is -- net income free includes

Brian Harris

correct. is That

Trey Grooms

in Great. strategy moving clearly It's is along there was it sounds on CPP. guess global and I your Is within on nicely. And like improved budget. impressive, and pretty Great. The sourcing profitability track there targets goals the about how what quarters think update sourcing any cadence in mean the of kind getting your coming your could and we that for on the should margins? of to around

Brian Harris

Yes.

selling expect as mind we So expect that still for and half at Keep in year, year that that improvement the is year, North we America we're our we this customers' it to the is the somewhat cost this higher that elevated. into in modest product of inventory built products most well in back that the as is of normalizing still EBITDA. current still fact be CPP's

the margin time goal. And CPP see be 'XX, EBITDA of in XX% the So remains, to cadence get to we'll margin we improved at across our we all by expect 'XX.

Operator

the Our with of Julio next from Romero Sidoti. questions come line

Julio Romero

up if if ask that price and I CPP, down you to year-over-year? or speak wanted could or quarter about in mix was flat to the

Brian Harris

impact Yes. mix, and right. really flat. significant price That's no much pretty There was from

Julio Romero

flowing Troy Okay. cost Are track right is going the are CPP P&L benefits then to And outs you are the cost-outs they mentioned a of of kind expected? Understood. of on little earlier, expectations? through like well. kind those bit sounds than earlier the your it as well, going Or

Brian Harris

as some step benefit we're close project this They're sales. as into part track. to the will up and have that year, sourced of continue more facilities, the see year and started through remainder bleed really at generally of the see next some We on and to inventory levels as our the of more modest we'll we

Operator

with James. Our of next the questions Sam from Raymond Darkatsh come line

Sam Darkatsh

window year, see earlier And as it while. year the And to industry manufacturers start more channel for residential the the mid-single-digit Is first indicating input guess, the same well. labor low dealers also sticky door little this the major like My and environment. also. are cost a door P&L? prompting move? you I've like price difficult garage time virtually follow-up announced HBP be, and the of I mean, the more rates? And to cyclical Terrific do conversion hitting increases the I got inflation? recently Or I in What's when it is a first for especially with operating in this have guess, would all the

Brian Harris

Sure.

So we of for our price change if in In remain steady. case, operators, business, as is far our expectations the structure, for general, flat. our be real year the will costs except seeing part input no some minor small that as our have is we're that's our own had a roughly on -- will pricing And which business. increases prices

see increased we costs, will input if we react accordingly. However,

Sam Darkatsh

then think And your the conversion once you you. question. lots potential products. you'll new partners And Got complete? within new on is to yet ultimately my obviously on Have exposure manufacturer do Chinese increased contract attention how There's China tariffs CPP? of last have much you sourced that determined

Brian Harris

Go ahead, sorry. Ron,

Ronald Kramer

for we U.K. our that are tariffs changes all asset-light already competition years, generally them last, by China. same location. initially, So to been making which with have and we'll geographies, sources providers any across going in react in we partners working product the models. the and considering our other And in supporting We've world. Australian with are Ultimately, is

Operator

with [Operator from questions of Instructions] Our next Funds. Gabelli the Justin line Bergner come

Justin Bergner

allocation your change The ago. capital versus allocation press there's press repurchases the value Maybe for statements capital elaborate in the change seem prioritizing that there? to that long-term Very nice small just is shareholders our of driving any to release forward, the bit you quarter a deliver one will quarter. from can release a if priorities in been one going a

Ronald Kramer

change. No No.

Justin Bergner

the second & Products, Home Building question. then the over in comment And the on backlog? And you or improved. In said that my how can you developed follow-up any Great. know quarter? question I trends backlog Okay. orders

Brian Harris

levels or generally another lead at Generally, times said are our backlog normal way, remains normal.

Operator

you. Thank

over We would reached floor closing session. question-and-answer turn end for Kramer remarks. have to now now like back Ron the of to I the our

Ronald Kramer

to and look us, forward Thank you joining to all in we for May. speaking you

Operator

Thank your participation. appreciate you. This teleconference. We does conclude today's

time. this disconnect of your day. may your lines You rest at Enjoy the

Griffon (GFF) 7 Feb 242024 Q1 Earnings call transcript