GFF - Earnings call transcript Q1 2025

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Operator

Greetings, and welcome to the Griffon Corporation Fiscal First Quarter 2025 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. Thank you.

You may begin.

Brian Harris

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

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

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

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

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

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

Ronald Kramer

off free profitability to year. achieve delivered Consumer Home strong QX, targets Products. morning, we flow performance solid and In to cash saw a Brian. continued financial improvements on are joining thanks Thanks, Good is everyone, start. the robust $XXX and Building for track Products our at operating With we at XXXX million, of & this maintaining momentum, Professional for us. and Fiscal

labor quarter, X% the from reduced revenue all revenue For volume. commercial residential see the to of prior CPP with partially CPP, first from except by material costs. EBITDA increased offset volume which as reduced Australia, and due demand. increased distribution continued volume, offset quarter was by primarily In benefited home increased and decreased revenue EBITDA benefited was year, decreased to and X%, consumer for markets, the reduced HBP by consistent costs,

and increased $XX effects reflects volume in Pope by in This million. the channel product million and initiative benefited in to Australia. increased of sourcing the profitability contributed by through $XX quarter EBITDA CPP increased retail expansion global positive from Australia first acquisition. the the the offerings sold increase revenue

capital to allocation. Turning

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

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

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

the I'll turn for it more details quarter. Brian a few back to on

Brian Harris

you, Ron. Thank

. XX%, prior quarter $XXX amounts increased $XXX $XXX EBITDA an to of the quarter X% in quarter. the increase GAAP prior XX%, EBITDA of of for quarter. First before unallocated million where in revenue to before basis million million of margin profit year was on comparison basis points. million Gross compared adjusted a $XXX decreased the both amounts year XXX unallocated

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

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

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

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

consistent in the per prior the unallocated Corporate $XX per periods, excluding million, $XX share million prior expenses, share. to with Excluding or year. and items adjusted that net both compared $X.XX $XX million was the affect comparability quarter of depreciation current year $X.XX or quarter from was income

During sourcing expenditures estate global net offset real were our initiative. as $XX.X quarter, $XXX,XXX. capital Prior result capital CPP This a realized of proceeds the million. approximately net of of in million, in expansion capital resulting sale expenditures year million the expenditures $XX from we of $XX.X

revenue with segment residential and performance, material Ron offset offset costs. the to our Building year quarter, year by commercial X% quarter the compared EBITDA reduced distribution year labor was consistent costs as reduced by Regarding as were prior quarter. also increased Price/mix with mentioned was reflecting for in earlier, Home and prior increased increased Adjusted Products volume prior volume. line the

decreased demand $XXX CPP acquisition. million expansion million, initiative EBITDA and from effects Pope the year $XX quarter the to Professional Kingdom, and driven $XX organic to Consumer North sourcing revenue offset and the by now consumer due partially prior by the and prior from to volume, positive quarter volume our Australia X% year contribution United by America growth million in decreased Products adjusted a due primarily reduced increased completed from the in in X% from Australia. the to global increased

our and sheet Regarding balance liquidity.

debt had XX, first As of debt-to-EBITDA of based December X.Xx last net quarter. as leverage we on of $X.X to compared at calculated a leverage billion, covenant our X.Xx year's debt of end net XXXX, the

and stock returning net debt even our XXXX, decrease leverage in year dividends Our after $XX quarter. buybacks million September shareholders and to from through end the

EBITDA, exceeding to in $X.X $XXX the segment other million and free year. flow certain net guidance our billion for provided XXXX remain affect unallocated of excludes of including fiscal million cash aspects of comparability unchanged, costs $XXX revenue which adjusted charges All income and and that November XXXX

are benefit continue which reduced XXXX be for offset sales first America, we offset We reduced XXXX. to commercial projects. HBP will by patterns, residential HBP are increased persist expect during months. to which to both CPP which revenue through expected growth reflect North volume, volume expected in seasonal of anticipate CPP the normal to continued to is by includes demand winter return be in half but with weakness And line and Australia, to from in sales We will XXXX. expected

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

Ronald Kramer

Thanks, Brian.

This there's continued driven investing more the year. for what all operating with flow, at We'll and I capital cash a businesses whose around our effort express world an in of Our to businesses, cash I in to couldn't repurchasing These employees shareholders. conclude to want improved ahead. value strategy performance opportunistically be HBP free financial sincere Griffon our continue reducing prouder includes for gratitude long-term off much and outlook our we've to together results and success. the confidence and shares have strong delivers solid that our dedication at drive accomplished this, our free the of excellent debt. To of performance our flow use strong continued reinforce our profitability operating my CPP. start allocation XXXX and is strategy to

take questions. any we'll Operator,

Operator

[Operator first Robert Instructions] from Schultz Baird. with of line comes question Our the

Robert Schultz

to now, regions guys have and businesses. or other like a the Any sourcing key strategy you there? of storage any So the and to any you help way imported mix tools geographical within CPP, or the product us switched color understand give countries could

Ronald Kramer

is tariffs. Sure. Sure, upon obviously question you're touching

price So tariff financial to in and situation let further Mexico, the mitigate negotiations Canada is fluid. said, of global the with XXXX start changing policy comfortable to extremely XXXX, we maintaining Similar given that With proposed our and of we supplier tariffs are diversifying with guidance. tariff expect a the me combination China, through our supply effects tariffs on chain.

effect, target. long-term expect implemented and we our tariff exit Griffon XXXX, to margin mitigation EBITDA allowing be our measures in maintain we As to its fiscal

an And significant where and to to from . yes, our significant coming could are your amounts China Lawn impact. we tariffs Garden specifically, businesses. Fan question areas do Those have have and related only Hunter the

Robert Schultz

you it. thinking Got on buybacks? any allocation. And levels, then debt how about paydown versus today's just At of update are capital kind

Ronald Kramer

opportunistically do continue believe We both. than but these And our to rather can attractive. stock levels, stock buy at debt, we down pay is we'd

Operator

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

Bob Labick

strong performance. continued on Congratulations

Ronald Kramer

Thanks, Bob.

Bob Labick

Yes.

situation. little So and just the progress margins obviously, well. But talked of, about you've substantially few getting here about speaking in great up years made over -- next you've a you as bit talked the from tariff CPP,

the is on going a and and process steps from expansion operate the margin maybe there, next what So bit talk about please? here key forward CPP little

Brian Harris

Sure.

inventory transition. source leverage year as go from we'll chain. forward, transitioning the inventory global year, the to inventory we continue this we'll be up anticipation build did And as So last through supply we We through go manufactured this in of year. to

using . And opportunities. step Canada. was suppliers with we move go the initial and the is that always best as and for sourcing already Australia U.K. U.S. we've to for were X, planned, globe Our for look the the somewhat across then and to

particular, We levels products the currently -- into the and bring to well. the of come course, in U.S., levels over the happening. time, that that And we it's of world to the back from at expect, consumer as across will will continue low purchasing design new

Bob Labick

kind performance down the then And headwinds resi the residential in on and commercial there. Great. of about volumes to mentioned versus market? commercial you the Talk tailwinds markets door also in up, and your . general HBP and overall Okay.

Brian Harris

Sure.

On side, high-end believe be to the We gaining that on market door, we outperforming we're and the market market residential continues the mostly of play strong. part share. the residential and

that now, commercial But side, the feels last have to it ABIs Momentum the anybody commercial almost like On and else. bottom. over starting would meantime, the the affects . Dodge Indexes years been in they're X It as volume our the soft.

Ronald Kramer

to consumer unit housing. believe able see we're ultimately be to this demand benefit volumes and expect for to continue year. interest to we for growth and as in pent-up demand lower there higher, And a XX% is rates And at going its of that the get margin gets continue HBP

that in market. have housing we economy upside still has an for U.S. So the an excellent the got some and particularly U.S. expansion business

Operator

the Stephens of Our line next from Trey with question comes Grooms .

Trey Grooms

Brian, the . results. Ron congrats and on good

Ronald Kramer

and good morning. . Thanks,

Trey Grooms

that. to just from response on earlier I your to Brian, an question want something So be and clear

that kind on now will -- And of that. result, into you'll So be guide. the is as able a and reiterating you're to of the play you're CPP tariffs fair to that kind through coming navigating year be it be assuming that say will you

tariffs . I the So you're in the baking of is hear Did right? navigation guide. that the effect, basically into of lack and it this impact

Brian Harris

believe the will keep year us mitigation heard guidance. correct. within that you We the Yes, in the that timing strategies our and

Trey Grooms

the getting, as been an I you a and of here. and question going important noise I definitely been well. takes point it's now know around in mean lot And there's lot getting think and tariffs have around a puts we've I and Perfect. guys that's of a right

then So . And thank that up. you clearing on, HBP let's say, for margins.

there very on remains the the continue residential be to strong. Demand good. side margins So

'XX that primarily your mentioned, say it Is wondering entry-level you know entry play level really that in your you of is this outperform portfolio a you higher HBP kind fair to and be entry not the just kind in across -- bread cost front versus level. me, to Are the end. butter, pricing on excuse of but to still 'XX? high-end here? the expecting comparing And continues similar how what is to As then expect I being still products. price year

Ronald Kramer

brand we this remodel by why market the view which the category. Let as leader me leading continue Repair share. start we be to in Clopay strong, we views think the we're be the garage saying . in and door and and gaining category, just residential to Clopay is continues space, market

Brian Harris

expect reason, that Yes. add in to those far the costs likely do mitigated line cost be input be price price. to and via And on any line for just as impact and any if as be in with XXXX there's I'll will pricing. to We

Ronald Kramer

is correctly the believe point of the intent stronger if and you U.S. ultimately to going recovers. is grow swirl the a we'll out the side that U.S. economy to out, both residential commercial side. benefit on But there as continue on commercial the business, side plays over better tariffs. And that and economy. the is And ComellCookson, a We

see residential has to commercial business well, continue believe that and continue we of We the side the doing growth. to our business

Operator

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

Sam Darkatsh

if if to I similar throughout kind that, questions, million, I of follow-up. that mentioned quarter $XX you're to to the million, I hear didn't it, have a and Two to $XX didn't that, And $XX January? been Related in it, I I missed quick apologize, you repo we should anticipate could. what a but might pace million hear what year? related . I expecting be then have

Ronald Kramer

levels, to have when We million expect the we're you going you'll to quarter report second purchased expect on repurchase ending to the we'll be that buyer for May. continue depending And stock, . and to continue get should And to generate the cash free $XX the a price continue these quarter XX, to flow. buyer. December a to of we in at wait substantial us be

Sam Darkatsh

are product would spring to of question, landed? be . And is my you product, point second CPP, therefore, Or back already the still waiting getting at the additional tariffs? subjected to this entirety for

Brian Harris

of A product spring landed. has significant the portion

Operator

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

Julio Romero

Brian.

Really strong channels expand on out, lines? especially here on question as is the And notable what volume. look strategy . could seeing of here? North lower call in on kind America by to demand margins when secondly, what like First does fully then you CPP CPP. Can North global up CPP recover sourcing changes product in and margins you're Any running to or America?

Brian Harris

Sure.

Fan Garden So across And lines. it's We're XX% CPP is it's a and of as and across business our across what Hunter forward, the be business. seen and in XX% margins the for really going XX% which balance product globe our not consumer seeing really all spending the far past. for Lawn weak as we've the globally,

Julio Romero

some related here million. follow-up, for then sell to real the And Excellent. in estate the quarter to $XXX were CPP able to you my

there Just and sales from view? proceeds equipment runway estate real additional in how . much is your for more

Brian Harris

Sure.

So our $X assets sheet. we million have of balance held-for-sale about on

So over time. $X we least expect at million

Operator

We call have to . back reached of over closing the turn session. question-and-answer Ron for end And Kramer remarks. CEO, the I'll the now

Ronald Kramer

going about to look where headed. to you performance, outstanding plan is continue to and our be excited business May. in continue execute deliver company we speaking to We and our to forward We're

Operator

ladies And conference. this today's and you. Thank concludes gentlemen,

lines your your may at you Thank You for disconnect participation. time. this

Griffon (GFF) 5 Feb 252025 Q1 Earnings call transcript