EX-99.1 2 pressrelease080305.txt PRESS RELEASE GRIFFON CORPORATION ANNOUNCES ----------------------------- OPERATING RESULTS FOR THE THIRD QUARTER OF FISCAL 2005 ------------------------------------------------------ Jericho, New York, August 3, 2005 - Griffon Corporation (NYSE:GFF) today reported operating results for the third quarter of fiscal 2005, ended June 30, 2005. Net sales for the quarter were $350,904,000 compared to $367,948,000 for the third quarter of fiscal 2004. Income before income taxes was $19,931,000 compared to $24,760,000 last year. Net income was $12,854,000 in the current quarter compared to $13,157,000 in the third quarter of 2004. Diluted earnings per share for the quarter was $.41 compared to $.42 in last year's third quarter. Consolidated operating results in the third quarter of fiscal 2005 reflected significant improvement over the first half of the year principally as a result of higher selling prices and moderating raw material costs in both the garage doors and specialty plastic films segments. In garage doors, the effects of selling price increases and favorable product mix drove higher net sales and operating income. Specialty plastic films continued to experience reduced unit sales volume from its major customer. These sales reductions were partly offset by the effects of higher selling prices to pass through resin cost increases. Third quarter operating performance of the installation services segment also improved over the first half due to strengthening construction environments in several of its markets and improved product mix. However, installation services' sales volume and profitability lagged when compared to last year due primarily to increased competition and higher costs of products with significant steel content (garage doors and fireplaces). Operating results of the electronic information and communication systems segment reflected a strong performance and improved demand in its core markets. These trends are continuing and are expected to result in a solid fourth quarter for this segment. However, this segment's current year operating results do not compare favorably to the prior year due to significant shipments in the third quarter of 2004 under a $35 million contract for ground surveillance radar providing perimeter protection of U.S. Air Force bases. Net sales for the nine months ended June 30, 2005 were $1,013,551,000 compared to $1,024,086,000 for the first nine months of fiscal 2004. Income before income taxes for the nine months was $43,587,000 compared to $69,766,000 last year. Net income was $26,190,000 compared to $34,934,000 for the first nine months of 2004. Diluted earnings per share for the nine months was $.84 compared to $1.10 last year. Cash flow from operations during the quarter was $12,000,000 which, together with existing cash, was used to fund capital expenditures of $9,000,000, purchases of shares for treasury of $7,000,000 and long-term debt reductions of $12,000,000. A conference call discussing third quarter results is scheduled for 4:00 p.m. EDT on August 3, 2005 and can be accessed by dialing (800) 322-0079. Callers should ask to be connected to Griffon Corporation's third quarter earnings teleconference. A replay of the call will be available one hour following the call and can be accessed by dialing (877) 519-4471, conference code: 6300959. The replay will be available until 5:00 p.m. EDT on August 17, 2005. In conjunction with this conference call, the Company has also posted on its website at www.griffoncorp.com certain financial information regarding its third quarter results which will be archived and available at the website for one year. Griffon Corporation - - is a leading manufacturer and marketer of residential, commercial and industrial garage doors sold to professional installing dealers and major home center retail chains; - installs and services specialty building products and systems, primarily garage doors, openers, fireplaces and cabinets, for new construction markets through a substantial network of operations located throughout the country; - is an international leader in the development and production of embossed and laminated specialty plastic films used in the baby diaper, feminine napkin, adult incontinent, surgical and patient care markets; and - develops and manufactures information and communication systems for government and commercial markets worldwide. "Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: All statements other than statements of historical fact included in this release, including without limitation statements regarding the company's financial position, business strategy and the plans and objectives of the company's management for future operations, are forward-looking statements. When used in this release, words such as "anticipate", "believe", "estimate", "expect", "intend", and similar expressions, as they relate to the company or its management, identify forward-looking statements. Such forward-looking statements are based on the beliefs of the company's management, as well as assumptions made by and information currently available to the company's management. Actual results could differ materially from those contemplated by the forward-looking statements as a result of certain factors, including but not limited to, business and economic conditions, results of integrating acquired businesses into existing operations, competitive factors and pricing pressures for resin and steel, capacity and supply constraints. Such statements reflect the views of the company with respect to future events and are subject to these and other risks, uncertainties and assumptions relating to the operations, results of operations, growth strategy and liquidity of the company. Readers are cautioned not to place undue reliance on these forward-looking statements. The company does not undertake to release publicly any revisions to these forward-looking statements to reflect future events or circumstances or to reflect the occurrence of unanticipated events.
GRIFFON CORPORATION ------------------- SEGMENT OPERATING HIGHLIGHTS ---------------------------- (Unaudited, in thousands) PRELIMINARY For the Three Months Ended For the Nine Months Ended June 30, June 30, -------------------------- ------------------------- 2005 2004 2005 2004 ---- ---- ---- ---- Net sales: Garage Doors $ 137,440 $120,525 $ 383,321 $ 338,478 Installation Services 77,090 79,900 215,887 228,937 Specialty Plastic Films 90,607 100,065 276,472 310,679 Electronic Information and Communication Systems 51,004 73,302 153,759 162,201 Intersegment eliminations (5,237) (5,844) (15,888) (16,209) --------- -------- ---------- ---------- $ 350,904 $367,948 $1,013,551 $1,024,086 ========= ======== ========== ========== Operating income: Garage Doors $ 10,686 $ 9,638 $ 22,084 $ 26,862 Installation Services 2,583 3,495 5,159 8,193 Specialty Plastic Films 6,040 10,780 20,858 38,862 Electronic Information and Communication Systems 2,830 6,237 8,751 11,936 --------- -------- ---------- ---------- Segment operating income 22,139 30,150 56,852 85,853 Unallocated amounts (4,721) (3,605) (12,768) (10,693) Interest and other, net (1) 2,513 (1,785) (497) (5,394) --------- -------- ---------- ---------- Income before income taxes and minority interest $ 19,931 $ 24,760 $ 43,587 $ 69,766 ========= ======== ========== ==========
(1) Includes gain in 2005 of $3.7 million on sale of land and building.
GRIFFON CORPORATION AND SUBSIDIARIES ------------------------------------ CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (IN THOUSANDS EXCEPT FOR PER SHARE AMOUNTS) PRELIMINARY FOR THE THREE MONTHS ENDED JUNE 30, -------------------------------- 2005 2004 ------------- ------------ Net Sales $ 350,904 $ 367,948 Cost of sales 259,312 268,169 ---------- ---------- Gross profit 91,592 99,779 Selling, general and administrative expenses 73,586 72,980 ---------- ---------- Income from operations 18,006 26,799 ---------- ---------- Other income (expense): Interest expense (1,603) (2,035) Interest income 372 250 Other, net 3,156 (1) (254) ---------- ---------- 1,925 (2,039) ---------- ---------- Income before income taxes 19,931 24,760 ---------- ---------- Provision for income taxes: Federal 2,367 4,339 State and foreign 3,288 4,823 ---------- ---------- 5,655 (2) 9,162 ---------- ---------- Income before minority interest 14,276 15,598 Minority interest (1,422) (2,441) ---------- ---------- Net income $ 12,854 $ 13,157 ========== ========== Basic earnings per share of common stock $ .43 $ .44 ===== ===== Diluted earnings per share of common stock $ .41 $ .42 ===== ===== Weighted average number of shares outstanding: Basic 30,241,000 29,789,000 ========== ========== Diluted 31,410,000 31,611,000 ========== ==========
(1) Includes gain of $3.7 million on sale of land and building. (2) Includes a reduced provision as a result of a lower projected annual effective tax rate and the resolution of other income tax matters.
GRIFFON CORPORATION AND SUBSIDIARIES ------------------------------------ CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (IN THOUSANDS EXCEPT FOR PER SHARE AMOUNTS) PRELIMINARY FOR THE NINE MONTHS ENDED JUNE 30, -------------------------------- 2005 2004 ------------ ----------- Net sales $ 1,013,551 $ 1,024,086 Cost of sales 756,347 734,658 ------------ ----------- Gross profit 257,204 289,428 Selling, general and administrative expenses 213,761 214,629 ------------ ----------- Income from operations 43,443 74,799 ------------ ----------- Other income (expense): Interest expense (5,768) (6,125) Interest income 1,527 731 Other, net 4,385 (1) 361 ------------ ----------- 144 (5,033) ------------ ----------- 43,587 69,766 ------------ ----------- Provision for income taxes: Federal 5,384 8,906 State and foreign 7,598 16,908 ------------ ----------- 12,982 (2) 25,814 ------------ ----------- Income before minority interest 30,605 43,952 Minority interest (4,415) (9,018) ------------ ----------- Net income $ 26,190 $ 34,934 ============ =========== Basic earnings per share of common stock $ .88 $ 1.17 ===== ====== Diluted earnings per share of common stock $ .84 $ 1.10 ===== ====== Weighted average number of shares outstanding: Basic 29,625,000 29,836,000 ========== ========== Diluted 31,251,000 31,706,000 ========== ==========
(1) Includes gain of $3.7 million on sale of land and building. (2) Includes a reduced provision as a result of a lower projected annual effective tax rate and the resolution of other income tax matters.
GRIFFON CORPORATION AND SUBSIDIARIES ------------------------------------ CONSOLIDATED BALANCE SHEETS (UNAUDITED) (IN THOUSANDS) PRELIMINARY JUNE 30, SEPTEMBER 30, 2005 2004 ----------- ------------- ASSETS ------ Current Assets: Cash and cash equivalents $ 88,481 $ 88,047 Accounts receivable, net 173,729 174,938 Contract costs and recognized income not yet billed 36,732 32,700 Inventories 143,659 141,567 Prepaid expenses and other current assets 39,421 43,381 ---------- ---------- Total current assets 482,022 480,633 Property, plant and equipment, at cost less depreciation and amortization 206,991 203,539 Deferred charges and other assets 92,069 65,344 ---------- ---------- $ 781,082 $ 749,516 ========== ========== LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Notes payable and current portion of long-term debt $ 11,823 $ 14,490 Accounts payable 87,374 85,589 Accrued liabilities 79,203 96,288 Income taxes 20,414 14,264 ---------- ---------- Total current liabilities 198,814 210,631 Long-term debt: Convertible subordinated notes 130,000 130,000 Other 14,815 24,445 Other liabilities and deferred credits 50,282 40,293 Minority interest 26,111 25,175 Shareholders' equity 361,060 318,972 ---------- ---------- $ 781,082 $ 749,516 ========== ==========
GRIFFON CORPORATION AND SUBSIDIARIES ------------------------------------ CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (IN THOUSANDS) PRELIMINARY For the Nine Months Ended June 30, ------------------------- 2005 2004 -------- ------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 26,190 $ 34,934 -------- -------- Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 23,789 21,155 Gain on sale of land and building (3,744) - Minority interest 4,415 9,018 Provision for losses on accounts receivable 804 1,406 Change in assets and liabilities: Increase in accounts receivable and contract costs and recognized income not yet billed (1,984) (1,687) Increase in inventories (1,545) (15,552) (Increase) decrease in prepaid expenses and other assets 482 (1,426) Increase (decrease) in accounts payable, accrued liabilities and income taxes (7,639) 1,571 Other changes, net 5,361 5,244 -------- -------- Total adjustments 19,939 19,729 -------- -------- Net cash provided by operating activities 46,129 54,663 -------- -------- CASH FLOWS FROM INVESTING ACTIVITIES: Acquisition of property, plant and equipment (31,994) (30,739) Proceeds from sale of land and building 6,931 - Acquisition of minority interest in subsidiary (3,883) - Acquired businesses (9,577) - (Increase) decrease in lease deposits 3,293 (453) -------- -------- Net cash used in investing activities (35,230) (31,192) -------- -------- CASH FLOWS FROM FINANCING ACTIVITIES: Purchase of shares for treasury (14,552) (20,178) Proceeds from issuance of long-term debt 7,778 3,774 Payments of long-term debt (20,853) (12,168) Increase in short-term borrowings 276 - Distributions to minority interests (1,362) (5,509) Exercise of stock options 18,928 5,302 Other, net - (269) -------- -------- Net cash used in financing activities (9,785) (29,048) -------- -------- Effect of exchange rate changes on cash and cash equivalents (680) 752 -------- -------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 434 (4,825) CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 88,047 69,816 -------- -------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 88,481 $ 64,991 ======== ========