EX-99 2 numbers.txt FINANCIALS GRIFFON CORPORATION ANNOUNCES OPERATING RESULTS ----------------------------------------------- FOR THE SECOND QUARTER OF FISCAL 2006 ------------------------------------- Jericho, New York, May 3, 2006 - Griffon Corporation (NYSE:GFF) today reported operating results for the second quarter of fiscal 2006. Net sales for the quarter ended March 31, 2006 increased to $366,151,000 up from $322,473,000 for the second quarter of fiscal 2005. Income before income taxes was $11,468,000 compared to $6,101,000 last year. Net income was $7,208,000 in the current quarter compared to $4,144,000 last year. Diluted earnings per share for the quarter was $.23 compared to $.13 in last year's second quarter. The improved operating results for the specialty plastic films segment in the second quarter of fiscal 2006 reflected lower resin costs and a return to normalized sales volume from its largest customer. Improved operating results in our garage doors segment reflected stabilized steel costs, sales volume increases and a more favorable product mix. Higher sales in the installation services segment reflected volume growth in the Phoenix and Las Vegas markets. The electronic information and communication systems segment, Telephonics, reflected higher sales and profits principally due to the previously announced subcontract award from Syracuse Research Corporation. Telephonics has now received subcontracts in excess of $175,000,000. Approximately 70% of these awards are expected to be completed by September 30, 2006 and the fulfillment of the total award will be complete by the second quarter of fiscal 2007. Net sales for the six months ended March 31, 2006 were $724,675,000 compared to $662,647,000 for the first six months of fiscal 2005. Income before income taxes for the six months was $22,261,000 compared to $23,656,000 last year. Net income was $13,984,000 compared to $13,336,000 for the first half of 2005. Diluted earnings per share for the six months was $.45 compared to $.43 last year. Cash flow from operations was $3,800,000 for the quarter, which together with existing cash, funded capital expenditures of $8,800,000. Also, during the quarter $5,300,000 was used to acquire approximately 225,000 shares of the company's common stock under its buyback program. Additional purchases will be made from time to time, depending on market conditions, at prices deemed appropriate by management or under a Rule 10b5-1 trading plan. Griffon Corporation - o is a leading manufacturer and marketer of residential, commercial and industrial garage doors sold to professional installing dealers and major home center retail chains; o 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; o 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 o 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 AND SUBSIDIARIES ------------------------------------ OPERATING HIGHLIGHTS (Unaudited) (IN THOUSANDS)
PRELIMINARY For the Three Months Ended For the Six Months Ended March 31, March 31, -------------------------- ------------------------ 2006 2005 2006 2005 --------- --------- --------- --------- Net sales: Garage Doors $ 121,587 $ 110,174 $ 264,414 $ 245,881 Installation Services 81,621 66,508 163,775 138,797 Specialty Plastic Films 95,869 94,533 182,042 185,865 Electronic Information and Communication Systems 71,617 56,353 124,298 102,755 Intersegment eliminations (4,543) (5,095) (9,854) (10,651) --------- --------- --------- --------- $ 366,151 $ 322,473 $ 724,675 $ 662,647 ========= ========= ========= ========= Operating income: Garage Doors $ 3,637 $ 749 $ 17,207 $ 11,398 Installation Services 1,204 1,287 4,014 2,576 Specialty Plastic Films 8,910 6,220 7,274 14,818 Electronic Information and Communication Systems 4,751 3,397 7,718 5,921 --------- --------- --------- --------- Segment operating income 18,502 11,653 36,213 34,713 Unallocated amounts (4,887) (4,067) (9,717) (8,047) Interest expense, net (2,147) (1,485) (4,235) (3,010) --------- --------- --------- --------- Income before income taxes 11,468 6,101 22,261 23,656 Provision for income taxes 4,260 832 8,277 7,327 --------- --------- --------- --------- Income before minority interest 7,208 5,269 13,984 16,329 Minority interest - (1,125) - (2,993) --------- --------- --------- --------- Net income $ 7,208 $ 4,144 $ 13,984 $ 13,336 ========= ========= ========= =========
GRIFFON CORPORATION AND SUBSIDIARIES ------------------------------------ CONSOLIDATED STATEMENTS OF OPERATIONS (IN THOUSANDS EXCEPT FOR PER SHARE AMOUNTS)
PRELIMINARY FOR THE THREE MONTHS ENDED MARCH 31, -------------------------- 2006 2005 ---------- ---------- Net sales $ 366,151 $ 322,473 Cost of sales 275,898 245,153 ---------- ---------- Gross profit 90,253 77,320 Selling, general and administrative expenses 78,710 69,717 ---------- ---------- Income from operations 11,543 7,603 ---------- ---------- Other income (expense): Interest expense (2,565) (2,057) Interest income 418 572 Other, net 2,072 (17) ---------- ---------- (75) (1,502) ---------- ---------- Income before income taxes 11,468 6,101 ---------- ---------- Provision for income taxes Federal 1,622 (1,071) State and foreign 2,638 1,903 ---------- ---------- 4,260 832 (1) ---------- ---------- Income before minority interest 7,208 5,269 Minority interest - (1,125) ---------- ---------- Net income $ 7,208 $ 4,144 ========== ========== Basic earnings per share of common stock $ .24 $ .14 ========== ========== Diluted earnings per share of common stock $ .23 $ .13 ========== ========== Weighted average number of shares outstanding: Basic 29,874,000 29,387,000 ========== ========== Diluted 31,103,000 31,179,000 ========== ========== (1) Includes a reduced provision as a result of a lower projected annual effective rate and the resolution of other income tax matters.
GRIFFON CORPORATION AND SUBSIDIARIES ------------------------------------ CONSOLIDATED STATEMENTS OF OPERATIONS (IN THOUSANDS EXCEPT FOR PER SHARE AMOUNTS)
PRELIMINARY FOR THE SIX MONTHS ENDED MARCH 31, ------------------------ 2006 2005 ---------- ---------- Net sales $ 724,675 $ 662,647 Cost of sales 545,253 497,035 ---------- ---------- Gross profit 179,422 165,612 Selling, general and administrative expenses 153,934 140,175 ---------- ---------- Income from operations 25,488 25,437 ---------- ---------- Other income (expense): Interest expense (5,143) (4,165) Interest income 908 1,155 Other, net 1,008 1,229 ---------- ---------- (3,227) (1,781) ---------- ---------- Income before income taxes 22,261 23,656 ---------- ---------- Provision for income taxes Federal 4,429 3,017 State and foreign 3,848 4,310 ---------- ---------- 8,277 7,327(1) ---------- ---------- Income before minority interest 13,984 16,329 Minority interest - (2,993) ---------- ---------- Net income $ 13,984 $ 13,336 ========== ========== Basic earnings per share of common stock $ .47 $ .45 ========== ========== Diluted earnings per share of common stock $ .45 $ .43 ========== ========== Weighted average number of shares outstanding: Basic 30,039,000 29,318,000 ========== ========== Diluted 31,302,000 31,172,000 ========== ========== (1) Includes a reduced provision as a result of a lower projected annual effective rate and the resolution of other income tax matters.
GRIFFON CORPORATION AND SUBSIDIARIES ------------------------------------ CONSOLIDATED BALANCE SHEETS (IN THOUSANDS)
PRELIMINARY MARCH 31, SEPTEMBER 30, 2006 2005 ----------- ------------- ASSETS ------ Current Assets: Cash and cash equivalents $ 31,871 $ 60,663 Accounts receivable, net 176,347 189,904 Contract costs and recognized income not yet billed 55,240 43,065 Inventories 156,605 148,350 Prepaid expenses and other current assets 44,478 41,227 ----------- ------------- Total current assets 464,541 483,209 Property, plant and equipment, at cost less depreciation and amortization 214,868 216,900 Goodwill 97,832 96,098 Intangible and other assets 56,625 55,220 ----------- ------------- $ 833,866 $ 851,427 =========== ============= LIABILITIES AND SHAREHOLDERS' EQUITY ------------------------------------ Current Liabilities: Notes payable and current portion of long-term debt $ 8,456 $ 16,625 Accounts payable 95,450 91,970 Accrued liabilities 67,344 78,849 Income taxes 16,630 22,599 ----------- ----------- Total current liabilities 187,880 210,043 Long-term debt: Convertible subordinated notes 130,000 130,000 Other 70,573 66,540 Other liabilities and deferred credits 82,072 82,890 Shareholders' equity 363,341 361,954 ----------- ----------- $ 833,866 $ 851,427 =========== ===========
GRIFFON CORPORATION AND SUBSIDIARIES ------------------------------------ CONSOLIDATED STATEMENTS OF CASH FLOWS (IN THOUSANDS)
PRELIMINARY For the Six Months Ended March 31, ------------------------ 2006 2005 ---------- -------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 13,984 $ 13,336 ---------- -------- Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 16,951 15,272 Minority interest - 2,993 Provision for losses on accounts receivable 816 867 Change in assets and liabilities: Decrease in accounts receivable and contract costs and recognized income not yet billed 812 18,537 (Increase) decrease in inventories (8,003) 4,467 Decrease in prepaid expenses and other assets 257 2,497 Decrease in accounts payable, accrued liabilities and income taxes (17,121) (27,040) Other changes, net 838 3,586 ---------- -------- Total adjustments (5,450) 21,179 ---------- -------- Net cash provided by operating activities 8,534 34,515 ---------- -------- CASH FLOWS FROM INVESTING ACTIVITIES: Acquisition of property, plant and equipment (13,442) (22,533) Acquisition of minority interest in subsidiary (1,304) (3,883) Acquired businesses - (9,235) (Increase) decrease in equipment lease deposits (4,463) 3,314 ---------- -------- Net cash used in investing activities (19,209) (32,337) ---------- -------- CASH FLOWS FROM FINANCING ACTIVITIES: Purchase of shares for treasury (15,573) (7,946) Proceeds from borrowings under long-term debt arrangements 60,000 7,778 Payments of long-term debt (62,982) (9,040) Payment of debt issuance costs (607) - Decrease in short-term borrowings (1,181) (44) Distributions to minority interests (354) (988) Exercise of stock options 649 4,137 Tax benefit from exercise of stock options 1,863 - ---------- -------- Net cash used in financing activities (18,185) (6,103) ---------- -------- Effect of exchange rate changes on cash and cash equivalents 68 533 ---------- -------- NET DECREASE IN CASH AND CASH EQUIVALENTS (28,792) (3,392) CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 60,663 88,047 ---------- -------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 31,871 $ 84,655 ========== ========