GFF - Earnings call transcript Q4 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 Annual and Fiscal Fourth Quarter Financial Results 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.

Brian Harris

Thank you. to Fourth welcome Earnings Fiscal and Call. morning, Griffon Quarter Corporation's XXXX Good

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

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

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

during comparability today's to over included I'll are our remarks that Finally, that, will adjust call reconciliations between explained Ron. items for non-GAAP in affect With the items our opportunities. periods. These turn in

Ronald Kramer

Good us. everyone, morning, thanks for and joining

quarter a year, were and Products our We are very Professional strong pleased consistently segment at segment. with Home fourth the driven and which and our & by Consumer from Products the results our performance profitability Building improved fiscal for

billion revenue an Home year, volume, offset the For for with by by performance increased sustained EBITDA of throughout reduced ending year, commercial which XX.X%. margin $X.X & with year, the residential was strong demand margin Products, HBP, the prior HBP driven projects EBITDA of was Building consistent

sectional Ohio for better further invest fourth to and manufacturing with in HBP's throughout to we productivity premium ] Troy to commercial reduced confirm volume, we more offsetting continuing the drive and trends growth saw innovation results door [ adding include quarter the year, growth. than products. residential investments HBP, in volume. are At demand manufacturing Clopay's capacity These customer satisfy equipment advanced expanding

technology further make investments and in XXXX. to plan in capacity We expansion

America market in to CPP's Professional Products results demand year-over-year, volume reflect continue the in drove Reduced consumer decreasing $X the X% most to of North Australian revenue revenues increased offset to with the for Turning by and conditions year billion. segment. Consumer challenging market.

endured a for North market the year-over-year America. costs demand consumer and despite significant production in years. the increased profit over has reduced region volume indicating from drop-off several a improved additional improved the North a U.K. demand that the in significantly potential by American last in driven consumer year-over-year, recovery Australia. Volume profitability CPP increased was This in

million, operations achieve of XX% XX% increased The expansion margin September X% of positive U.S. establishes initiative the points a of $XX CPP to its sourcing ahead are improving EBITDA of XXX which successfully of improvement end represented of EBITDA effects to of the sourcing already concluded as schedule project a XXXX. of and its global and target the margin. completion to CPP this for profitability global initiative the CPP's foundation basis

took capital to actions allocation. In shareholder buybacks sheet. we value cash dividends balance fiscal through to while Turning maintaining significant restock strong a XXXX, deliver and

price XX, an shares of which the average X.X we at we During at program. repurchased used million approximately $XX.XX. authorization year, remaining September X.X under repurchase repurchased our average million $XX.XX available the share price shares Since of an

for Since of of XXXX, a April XXXX average of totaled total share. stock and $XX.XX common November April our shares repurchases through $XXX or XX.X% an share shares outstanding X.X XXXX or the million of XX, per million

authorized We as of continue And Board a value. result, shares are that value, million trading Directors below of repurchases. well a share to believe compelling our has Griffon's additional intrinsic an $XXX

and prior quarterly annualized dividend began quarter dividends marking quarterly to XX, shareholders. November increase in compound XX% reflects since dividend the over of XX%. rate to record the This December payable a XXXX dividend an dividend growth we paying announced we that shareholders Also Griffon consecutive represents authorized at of on of share $X.XX morning, XX per Board this a regular the on

thus through Loan and while B Griffon reducing we flexibility the XXXX and cash the shareholders million XXXX $XXX leverage making in businesses. XXXX, with financial in XXXX, repricing our of this million of flow, in returned which our repurchases, of improve our fiscal financial of improving also $XXX took fiscal cost financing. our Term total substantial Utilizing During matures action also share million a to investments at maintaining flexibility X.Xx $XXX dividends our free our year-over-year facility,

Brian as These to strength our XXXX guidance. financial I'll business as of it actions reflect the strategic over update confidence outlook. about turn details our some plan provide well in our our and the to for

Brian Harris

comparison review XX.X%, year fiscal $XXX in million in and an excluding that million year. million was X% for prior then $XXX margin Thank by revenue you, profit to compared XXXX. prior fourth quarter increase basis the EBITDA with quarter comparability increased both performance Gross was Ron. start quarter. for increased a the Fourth of XXX quarter of XX% from million, I'll the our $XXX quarter, fourth items year current the prior and prior basis on our to $XXX affect points to the periods. and GAAP guidance over EBITDA adjusted

Fourth current million selling, to quarter GAAP the million $XXX in to administrative prior increased year million compared gross $XXX quarter. and basis the million XXX was to were profit in compared general points Gross $XXX XX.X%. quarter by year $XXX the margin Normalized in quarter. prior year-over-year expenses

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

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

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

to the the Griffon the to for quarter share expense destock $XX.X the million and prior prior to unallocated million $XX.X increased year. year primarily the year, amortization $XX Depreciation expenses, million to due by compared compared in increase totaled Corporate in in expenditures depreciation, in in driven quarter quarter. price. were and Net were capital million the excluding fourth prior the in million $XX $XX quarter million fourth $XX.X compared

driven and increased by costs, costs. products for year X% by decreased over increased increased by the increased to effect X% quarter, commercial volume. from by compared driven revenue X% partially the quarter, residential year volume mix performance. labor reduced homebuilding increased partially and material of segment Adjusted the distribution EBITDA offset and Regarding favorable prior Revenue our prior X%

Products from due from $XXX revenue increased the year partially increased offset North The in Pulp acquisition America demand. volume Professional in well the due to decreased contribution increased to increase X% consumer which and in including Consumer X% by reduced U.K., revenue volume million. to prior as the is quarter Australia, was as volume in a

has as by XXXX, of XXXX. $XX increased strategy of and XX, December the ahead production previously American September successfully CPP of million adjusted announced reduced increased revenue. million been of EBITDA completed North XX, from global costs sourcing driven expansion prior year $XX date The

XXX. facility reducing count CPP feet As a its have essential reduced to result, its concluded and million all while achieve CPP be cash improved of free square footprint working enhancing approximately actions square affected will sites X.X EBITDA capital approximately capital approximately for by manufacturing XX% by operations target margin And expenditures. XX% significant head of These or flow with through its footage. CPP

in benefits we the fiscal of environment Given in 'XX, be since a margin to more challenged we commenced XXXX. May realized full now expect this macroeconomic initiative

balance our Regarding and liquidity. sheet

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

year. stock even consistent returning after leverage buyback to shareholders was during via the dividends Our September approximately the $XXX ending and with XXXX, prior million year

to year related we expect million adjusted XXXX of $XX Regarding XXXX EBITDA million our million strategic to of retention of be $X $X.X guidance, in costs at range revenue charges and to billion costs with $XXX approximately unallocated fiscal consistent million. a and $XXX excluding review

during XXXX HBP reduced we anticipate XXXX. demand from offset be residential includes CPP segment for in projects, From are months. winter and reduced to will but revenue will volume, both to benefit commercial we by a HBP line which patterns, sales perspective, normal return with seasonal be to and expect revenue expected increased volume

continued sales Australia, through but expected in of to which XXXX. America, reflect offset by CPP North first in to persist is weakness half are expected the growth

excess the performance benefits X%. continue completed ongoing margins HBP XX%. be initiative we CPP sourcing in to the anticipate expected incremental with continued excess EBITDA of at it profitability, segment strong should is EBITDA reflect Regarding and to margin in global of of

capital income and Griffon's and amortization flow with normalized $XX of be million million. interest expense for is million expenditures including net be is year $XX $XX tax of to million, Free depreciation to expected expected XXXX Fiscal is $XXX of to exceed XXXX, rate cash expected XX%.

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

Ronald Kramer

Brian. Thanks,

to to continue We are are completed XXXX, in while CPP in the which schedule maintaining their CPP weaker extremely and commercial performance to and grow CPP's margin, will profit strong sourcing share has especially team products, profitability. and global in market uncertain coming pleased of the capture ahead environment. offsetting with expansion efforts successfully given so volume did residential macroeconomic continue contributing in team demand projects already our The these The years. improve team's

how teams the to excellent as balance our to skilled about have in enough for our giving team, that say we well an cannot positioned firmly and ability fiscal proven We strategy, robust are performance. enter XXXX with generate beyond. position we believe a XXXX sheet, I us company strong continue financial

allocation cash to a flow continue and shareholders. our performance delivers capital long-term will use strong drive strategy We for operating to value free our that

execute intend To generate cash flow. we the to X our free over generation We to perspective, over years, cash billion put this of our expect $X capabilities to into next cash make and the investments program, plan. in ongoing our outlook down underscores high-return strategic strategy and Griffon's business. complete acquisitions our in and tuck-in confidence share pay Board This management has repurchase debt, use

that, are our questions. happy take you new ask at a we any look to also questions, to we with www.griffon.com. Before operator, take refresh website, I'll And take

Operator

[Operator question from comes CJS Labick Instructions] from Securities. The first Bob

Lee Jagoda

Bob Jagoda Lee actually for It's morning. this

win the when guess, cross-selling maybe you've choosing side, there some dealer commercial run to here? about then network side, side, talk how and door much you customers room just starting with door seen on look the you competition? the resi about and the So just, there talk can successes from your is for And factors our versus door they're a the through I your why key on of

Brian Harris

Sure.

lot and commercial it in for product But us. selling is seeing 'XX. as side years likely as an 'XX, some and turn a runway On continue to in goes, ahead to there's expect general this we will and the dealers. past ongoing commercial far generally come. project softness regarding that year of to that expect sectional That continue to of Clopay, through that We're process commercial commercial our

on points. On the to business, the of able side many residential we're win

consistently new to. are come that consumers with design have We attracted up

our marketplace. And the these tools, supports for that help products have all -- customers, them. we distribution succeed have in the our factors the We our best dealers, direct best really together selling

Lee Jagoda

then what's just would whether from a obligatory tariff how the here? guess, ask environment, given Great. Maybe see a be on And to And then you from going impacted tariffs or question. directly headwind benefit I'll to the standpoint, you macro a competitive I do if tariffs. it's in speak we

Ronald Kramer

what to our I'll business. No, start foreign for assume is we're business of HBP saying American-made that business are going our speculate by to that's say tariffs that subject side I will is not and not relevant an competition or

we've how ability with For the and CPP costs. side, increased pass tariff been before, to to deal know the along here we

a customers model We to best in us to cheapest product manufacturing our to global whatever that States. way the and United sourcing whatever our move deliver have cost allows the the to the flexibility

think through ongoing the economic Then foggy impact in the several the us very navigate last trends business years. going the a emerging over broader that are to we ability to beyond. environment be we for optimistic and about very bullish XXXX So are

profitability. raise think be improve do of we'll not be ahead company what able both may and able to position regardless see to the to our may and or We we volume sunshine tariffs

Operator

of comes Darkatsh James. line The from Sam from next question the Raymond

Sam Darkatsh

the specific Brian, I a First segment. the had it happens lag the HBP basis between because when your steel, June to of you to question, hundred relates of -- as quarter got points headwind follow-up. effects headwind in when what for was the couple versus I've I of or quarter, -- think you're a hits help fiscal as and up P&L. the your anticipating recall, the in the in what of with And then September which down stock tailwind 'XX? in markets steel what us it and Can you

Brian Harris

Sure.

trend the not for the So in quarter, third complete saw reversal. but quarter, the reversal in fourth we a saw a we

the steel and of a there normalize. overhang prices So months little into early bit then was

current to As the that's for through far expect levels -- year. 'XX, as assumption be our we the maintained

Sam Darkatsh

versus 'XX fiscal Maintain, the meaning look it you year? will tailwind, a at be 'XX when entire

Brian Harris

year, with No. 'XX expect to whole flat was million with for about 'XX the roughly and fiscal we 'XX. be 'XX flat

Sam Darkatsh

impact the around actually it is my prior If you tariffs. to bit the question, more product, to occur? If a Terrific. the such you Chinese as do were approximate a specific. and see follow-up And a tariffs from follow-up we be be I to then move question what now, development ask could little would XX% how if dollar could CPP stands quickly it China from to

Brian Harris

a appreciate this See, Sure. the has I questions lot point. The question. at regime more new and tariff answers potential

we those past, going successfully it's appropriate amounts on benefited geographies So mentioned, what managing will tons as Ron products to on don't from We've which us believe experience this impacted from be think serve speculate the will be. and well will forward. or

meet customers as the manage tariffs. have guidance past we expect the long-term we We of policy And any in work with impact to our to our of CPP done suppliers and for tariff through and mitigate XX%. the

Operator

line Grooms Stephens. the from of The Trey next question from comes

Trey Grooms

quarter. and done Congrats in well the

touch be be to the wanted tariffs exit how in any an could should X%. thinking of I Maybe excess we And next profitability think margins just trajectory for year, about about CPP? update in on EBITDA rate how we to on aside, there? So 'XX

Brian Harris

Sure. Yes.

We continue manufactured North the in inventory to And go America, muted, as to specifically. the transition expect first that inventory. soft we'll sourced would year, to selling CPP say, starts the the the be from I we year demand the more through be as for U.S. will half

follow the expect margins and to as continues. we the year So improve

Trey Grooms

margins as lines, guys Okay. I Got up just it. -- of And think there. on you -- along about have kind put those HBP, great are mean, we

are into to there you there changes You're Is adjustments foresee any have outlook that on kind strong any what next But 'XX? continue you make to these need any price the margins cost of thinking year. or cost any for projecting expectation there? kind or of for

Brian Harris

Yes.

expect generally we So similar to costs XXXX. pricing remain to

stable adjustments But expect in price make stable. changes, to input if that and will we there's costs. that be if the any We moment, any at remain changes to

Ronald Kramer

resilient residential this, and And share market add, business think gains, of team throughout side outstanding I'll in both amount commercial gains development ourselves we've the commercial is just of the management proven on building inclusion an Clopay, ahead. and particularly from be the an done of to the the a has to we enormous volume job there years

garage sustainable intend rolling a the margin XX a business developed period of and it. is we're clearly of door door business, leader This grow steel years and in a XX% has investment over the business, building, we to or commercial and

Operator

of The next Romero Julio line question comes Company. Sidoti from from & the

Julio Romero

of Brian, think of to expect us happens, the you would of gradually? pronounced that see that maybe start they on how should kick when up? to have improvement to CPP. the When step kind in, you shift the pace sourced Or inventory improve more do about margin does a kind you would

Brian Harris

see then into ramp that happen from we a 'XX. It in would manufacturers looking 'XX from 'XX work in then gradually to and expect 'XX, Yes. for the Generally, happen again and to really the changeover type will beyond in similar we will saw we source march on 'XX to gradually years down and we as XX%, because the successive as other. increase up

Julio Romero

anything over different Excellent. going to And long-term follow-up, of in of for expectation the you you're years. cash embedded billion doing to X just over and Ron, a are my X the goal be talk that next $X flow about if mentioned assumptions you that years? over the Can free next generate kind

Ronald Kramer

to organic continue company is going continued growth trajectory story on just assumption and That and we the that enjoy acquisitions not maintain the it's side. on the improvement The our into that global that own the it. that success is the CPP the we've on margins the initiative built about sourcing assuming side on ability on any to have we're and HBP of businesses to built the does run already it's an

go value cash from strong stock the position. We free a to a don't flow amount 'XX are close back we cash of a flow debt to very and and delever undervalued, gap that expect we'll company. maturity materially think free will the in buy cash is stock continue We We generate or have either significant our flow. to until

Operator

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

Ronald Kramer

I to around world for making here's the And to you, all X,XXX year making a Thank such again, employees of everyone. 'XX thank better. want our and successful this

Operator

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

You disconnect now may lines. your

Griffon (GFF) 13 Nov 242024 Q4 Earnings call transcript