GFF - Earnings call transcript Q3 2024

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

Operator

Ladies and gentlemen, good morning, and welcome to the Griffon Corporation Fiscal Third Quarter 2024 Earnings Conference Call. [Operator Instructions].

As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Brian Harris, Chief Financial Officer. Please go ahead, sir.

Brian Harris

Thank you. morning. Good to Griffon Griffon Earnings Corporation's pleasure morning, -- Call. everyone to welcome Third welcome my Corporation's to good It's Quarter XXXX

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

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

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

release. With today's of I call the to are some affect in will comparability Ron. adjusted periods. over remarks Finally, press for explained items included that that, will be reconciliations our turn items These non-GAAP between our in

Ronald Kramer

morning, Good us. and joining for everyone, thanks

support provided segments capital $XXX and adjusted strong with the Our performance XX.X% and products both highlighted as and the quarter previously approach of generating EBITDA our operating XXXX, EBITDA with line also to strong performance EBITDA X.X%. With basis cash was well quarter and from we third full our to reiterating points expectations, allocation guidance million we both fiscal Consumer of year. the continues products, third were of Home million quarter our segments, margin are in by Building Professional in results margin XXX for our improving end Free its performing by segment flow $XXX at of and strategy.

Board September record consecutive to and paid quarterly payable XXnd quarterly shareholders. million in $X.XX quarterly $XX paid million in the XX, debt, dividend. authorized on stock XX quarter, on dividend regular regular we marking share, of the During to of $X a dividend per repurchased shareholders August down Yesterday, our $XX a million

compounded Our we XX% dividends dividend an grown since of at in has rate annualized initiated XXXX.

shares repurchased X.X June and These $XXX average an million. million share buyback price we've reduced repurchases this since allocation shares These shares a to quarter by total that the April our of to our capital of of of share delivers at year, our Griffin's end to the shareholders. at total outstanding XXXX value the $XX.XX at XX.X% have second fiscal commitment program through Looking XXXX. strategy actions of relative a underscore for outstanding

We continue it for is turn a compelling Brian? over more detail. to that believe financial our stock to Brian value. I'll little a

Brian Harris

Thank you, Ron.

to XX.X%. Current X% unallocated Third million for year by million a and $XXX to decreased quarter of EBITDA the quarter. before was prior unallocated the in margin was $XXX comparison million before compared quarter. amount revenue of million by quarter $XXX $XXX GAAP decreased EBITDA year both the basis in adjusted on prior X%, profit

the million Excluding increased $XXX by year-over-year profit in XX.X%. $XXX items that the points comparability the gross million to period, quarter current prior to margin was XX Normalized year. in compared prior affect and from current gross profit basis

million year. GAAP quarter million selling, were expenses prior $XXX administrative in the general compared $XXX Third to and

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

$XX per $X.XX million quarter year share. share net the in GAAP or was million quarter prior per Third $XX to or income compared $X.XX

year in or the the expenses, quarter, quarter net income million prior the from excluding in and amortization compared million per compared prior that in $X.XX Depreciation quarter the quarter to for prior primarily in items million the Excluding $XX.X share. Corporate periods, driven increase ESOP affect totaled capital year. million to the both to quarter depreciation year $XX were current due share of rise expenditures Griffon's unallocated million Net million prior and $X.XX in per the $X.X increased year the the stock third with comparability $XX by million to expense price. adjusted compared $X.X or were in to third was $XX.X million compared $XX $XX quarter.

residential segment commercial product XX% above, America, and HBP $XXX due decreased Building increased was offset quarter, our and volume margin increased unfavorable performance, the from revenue by by being Regarding by as from Home to and in of volume consumer volume. year Professional Products due EBITDA XX.X%. Consumer adjusted XX% Australia. partially steel, reduced X% year $XXX EBITDA Products declined decreased of distribution million reduced driven for and increased in primarily with prior labor costs. demand the quarter mix revenue revenue decreased prior the noted North offset million to

adjusted For partially year quarter, margin the spending, prior offset and quarter impact North unfavorable noted increased due American the improved above. reduced improved EBITDA to prior $XX points XX% to costs million of decreased the discretionary by third EBITDA CPP CPP compared current the quarter. of basis from to volume X.X% the XXX production year

of Our time an X, and of products excited Australian Pope add in the Australian from Pope, acquisition are of with note, well-regarded sourcing Toro on to initiative is on we market. and brand July Australian Pope XXX-year to provider residential of a we Also Company. water global and extremely expansion completed on our iconic the budget. an portfolio products remains the history,

Australia. million annual $XX approximately contribute to Pope sales AMES in expect We to

and Regarding liquidity. our balance sheet

calculated we billion of X.Xx covenants. XXXX, XX, based and our June debt had $X.XX debt net net of debt-to-EBITDA on leverage of As

our would fiscal to in I the for remind half. last after guidance, and first XXXX our everyone, we raised Regarding strong expectations quarter performance like our

billion adjusted third unallocated of touched million and which that line our other certain $XXX and Ron excludes including quarter earlier, comparability. affect our we of in that our As costs performance was with charges expectations, given EBITDA revenue reiterating are segment guidance, on $X.XX XXXX

also million flow normalized expense unchanged, net XX% XXXX amortization and corporate of tax free of of million, a including of $XX for exceed $XX cash expectations $XX depreciation other rate of remain costs income. Our million, to interest $XXX million,

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

Ronald Kramer

Thank you, Brian.

we evidenced CPP's EBITDA HBP of our a of performance market. At our to in both margins reduced which as margin has backdrop. has are that's volumes. I segments focused for to softness value backdrop global operating in volume, Our CPP, by performance offset some and our seeing our improving door early that we're from resulted despite we free shareholders. strong improve realizing increased delivering year-to-date Profitability residential flow weak despite allocation plus sales has reiterate challenging strong persistently expansion from continue demand, on driven capital use want the benefits long-term by profile. a macroeconomic been the of strategy cash the sourcing XX% results a which consumer to strategy will sustained have operating commercial and to drive continues has

the dedication employees and questions, taking questions. commitment, see also all to the our effort teams Griffon continues the it's of operating to for we're to around acknowledge effort start continue and because want such I strong that their and world we of ready demonstrate, management Before businesses performance. Operator,

Operator

Instructions]. [Operator

Tim comes Baird. question first of the Wojs from with Our line

Timothy Wojs

off with and to start just Maybe Home Products. Building

if It kind is curious, Commercial, the of seems seen of continues to of be in business down like Just change a much the residential sequentially, kind think, demand I year-over-year. little better. kind you've still environment. kind of bit

around can helpful. And getting is kind little understand then of what headwinds Just be color a the if would better worse? or incrementally that add anything mix were if trying maybe bit you of to

Ronald Kramer

July. add The big as to the is construction resiliency. us and residential, as The continues going a year outlook and outlook steady. picks business excellent. same, remodel to saw future market is you looking story better slowing up, of home things in of think in residential things remains growth We to is as its The want lumpy got still housing the front come down I remains for rates part excellent think shown of interest are the the down, from for the margin the recovery business, I do that? be us. Brian, to commercial business ahead the for think us. business. of a And still has is May repair the new trend I on And always takeaway back us June the of for to

Bob Labick

I it think summarized you well.

Timothy Wojs

the mix Maybe Brian? just piece,

Brian Harris

Yes.

down and is residential improving. So the commercial with versus residential commercial slightly the you're mix mix seeing

just So mixed dynamic. that's

Timothy Wojs

I got you.

then quarter you've debt bit basis? on change Any just on kind cash of a allocation flow noticed philosophy what strategy, the prior kind I free done And this go-forward quarters. in the Okay. more in and you of debt buybacks capital little the a few my paydown reduction than follow-up of did versus

Ronald Kramer

No, we our debt in flexibility both think buybacks, pipeline. And do we didn't I the quarter, are have acquisitions to reduction always this do any. during and

Brian Harris

the had million chose $XXX point Yes, during with buybacks And quarter debt just of we just I cash that then flow, bit. a to this year. would reduce out we also

Operator

of is Our Labick Bob line from next with question CJS Securities. the

Bob Labick

sourcing, global on start year-over-year. CPP progress So and I the to margins with wanted continued sequentially steady and

quarters in heavy benefits? transition Or Any the a your executed. that the get to over lifting full XX% to on your few thoughts as next of it's So this time changes any more frame? and working for goal them several end is gradual left? And

Ronald Kramer

change no asset-light really in over us. going. This direction And has execution we're long-term for has is in the for is XX% this that path our for place excellent. in year the we target future. Australian rightsized and business a for to in sourcing heavy been The that hunter We've down done. U.S. business laid going pointing the of our The model we're encouraging our the business both ago. in margin facilities. this shut the we believe XX% been to business expected, team the U.S. the is business. metrics out, that we a lifting as The We was is performance business. There we global and business performance our continue We've The very the announced follow direction right us. the already for have the the

Brian Harris

course that with to will sourced that next That just And 'XX. inventory we margins improve our manufactured from inventory 'XX and to would into manufactured. occur now, it. inventory continue I we're over selling add of will year, the will early that. fiscal Right shift

Bob Labick

-- commercial COVID. residential gaining was There Okay. demand, this, Super. industry a but side, you've had up, at have continued the on then ton the your on I just taking kind stay guys There's XX% been outperform. been And a change the in disruption, house Obviously, on back. think But you and pricing, fix a supply of and side stay step of above to said home cetera. doors, guys, share. you both since et

to is differentiated X, the share question the positioned to X continue Clopay how and changes the in how and in they're talk gain years So market. now, are the CornellCookson industry and over this grow past about

Brian Harris

Sure.

I'll we many, up stronger have Clopay with CornellCookson many with innovative in us it start market. made with has come products. integrating fact much Purchasing So and commercial the that the

our excellent have lead and in operations, We have execution we industry-leading continue to times.

safely customers We have to in to ensure freight products proper deliver get our form. to own their and and they our dealers

excellent an have able things that We is installations. us have execute And a very on these strong in all together to dealer network put position.

Operator

with question line next of Our the from Darkatsh Raymond James. Sam is

Sam Darkatsh

A couple questions. of

and First, and the as you hits into lag third steel-related steel -- P&L, your relates I'm and between of guessing just HBP tailwinds. it then the your guessing guessing reported what quarter, to headwinds. beginning costs prevailing when I'm it the markets are we in I'm had the see in quarter there when quarter still first And because the fourth

steel? put is I've of off, impacts follow-up. can secondly, a got And in of the accurate? then meat terms you bone on of a First the little or quantify bit that And

Ronald Kramer

entirely I'll that's yes, accurate. start Brian? by saying,

Brian Harris

impact knew points discussed last as basis the We we actually was a deal. and this As couple impact, far it from hundred it quarter. saw coming of

Sam Darkatsh

And term made is, at how the getting that I deal but but over you with was you Pope then a that to of acquisition. what I look you What continued my know near came question small what's that genesis versus, the say, the of mentioned repurchase? continually it's the know further together? I'm share follow-up intermediate M&A let's Ron, relatively at, targets likelihood of pipeline the you. have Got you strategic. M&A

Ronald Kramer

We and to things are add that very attuned to for are our enhancing portfolio. value looking

into HBP improving businesses CPP. are We've both a kinds and history Pope have of that deals broader come buying in the like in portfolio our that transactions and long carve-outs. are of So got

to So to have to things expect right ability now want product point right enhancing the the our of stock. portfolio. and the and we and free back now. And see to us But as we doing. getting businesses that that -- buy with our our cash the us to generated, is be things from stock that as is things Nothing financially flow of cheapest thing like not are are like accretive accretive we're cheap afraid to geography own allow own immediately in both the Pope, position expand to your about add to delever we value price stock and our we what us, are that

Operator

Our next the question Romero Sidoti of Julio is Company. with line & from

Alex Hantman

on Hantman Alex is Julio. This

think on just pull or last question, up any deferrals following quarter? First quarter from fourth HBP, the forward to there do you was

Brian Harris

that the we as is Nothing continues to side, residential on the Demand some earlier, very softness the mentioned side position. I'm good there's business be aware strong. on And of. overall, very but commercial in

Alex Hantman

then follow-up context. CPP. update you destocking and my on Great Could an the geographies. provide channels inventory And across in

Brian Harris

Sure.

to So fourth the the and Australia more is normal. inventory quarter, and usual, continue than high reasonably inventory are somewhat a level. bringing destocking And that still is higher the U.K., level the we there. the inventory over in situation it expect in we quarter U.S., but the in see to Canada channel normalized in there the

Operator

[Operator Instructions].

is line Bergner of question Justin Gabelli the Our with next from Funds.

Justin Bergner

are respect residential trading mix in any customers Two within headwinds seeing down mix, the questions. With more you portfolio? to

Brian Harris

the no. balance, good and be dealers between we down buy retail slight channel channel. But mix, a On to -- continues the in see dealer

Justin Bergner

And further your sales expectations. is it for CPP, that fairly destocking in it. seemed that Does the they versus true then sense? then in And CPP, results lightness, were demand any respect you like because that with to much light? mentioned were in Got how of that the hold

Brian Harris

combination than causing a to our that consumer the On that's weakness. really met balance, as that the expectations. revenue originally little overall and weak. inventory continues CPP expected And our it's was a lighter be consumer we of

Operator

gentlemen, and Kramer, our hand question-and-answer Ron over concludes session. would I to CEO, for the now closing this Ladies comments. conference

Ronald Kramer

look to with you to the our and pleased very November. we outlook forward quarter, future. in the our We're performance year-to-date you, for speaking Thank and

Operator

The your Corporation conference now of Thank participation. you Griffon has for concluded.

You lines. disconnect may your now

Griffon (GFF) 7 Aug 242024 Q3 Earnings call transcript