GFF earnings- A penny above expectations-
Griffon Corporation Announces Operating Results for the Third Quarter Of Fiscal 2003
PR Newswire ~ August 7, 2003 ~ 1:22 pm EST
JERICHO, N.Y., Aug. 7 /PRNewswire-FirstCall/ -- Griffon Corporation (NYSE: GFF) today reported operating performance for the third quarter of fiscal 2003. Net sales for the quarter ended June 30, 2003 were $312,547,000 compared to $ 297,335,000 for the third quarter of fiscal 2002. Income before income taxes increased to $19,183,000 from $17,108,000. Net income was $11,322,000 in the current quarter compared to $11,437,000 in the third quarter of 2002. Diluted earnings per share was $.33 per share for the third quarter of fiscal 2003 compared to $.32 per share last year. Basic earnings per share was $.34 per share in the third quarter of both fiscal 2003 and 2002.
Garage doors' profitability continued to improve due to higher unit volume and effective cost control, as well as the 2002 divestiture of Atlas, an unprofitable commercial operation. Excluding the effect of the Atlas divestiture, net sales of the garage doors segment increased 3.6% compared to last year.
Specialty plastic films also continued to perform well as the segment realized substantial increases in sales and higher earnings compared to last year's third quarter. Growth continued to be driven principally by higher unit volumes, the effect of a weaker U.S. dollar on translated foreign sales and the net sales of the Brazilian operation acquired in the latter half of fiscal 2002. The segment's profitability in the quarter was tempered by costs associated with ongoing manufacturing facility expansion for existing and new products.
The electronic information and communication systems segment, Telephonics, reported lower sales primarily due to lower than anticipated awards of new orders. Earnings in this segment declined compared to last year principally due to the sales decrease.
Earnings for the three and nine month periods ended June 30, 2003 and 2002 benefited from tax credits approximating $1,700,000 in 2003 and $2,000,000 in 2002 to reflect the resolution of certain previously recorded tax liabilities and, in 2003, the finalization of income taxes on foreign earnings and remittances.
Net sales for the nine months ended June 30, 2003 were $892,031,000 compared to $866,545,000 for the first nine months of fiscal 2002. Pretax income for the nine months rose to $51,500,000 compared to $47,847,000 last year. Income before the accounting change last year to adopt Statement of Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets," was $26, 859,000 for the first nine months of 2003 compared to $26,834,000 last year.
During the quarter, cash generated from operations increased to $28,000,000, funding further reductions in bank debt of $3,700,000 and capital expenditures of $13,000,000 primarily in connection with ongoing programs in the specialty plastic films segment. In July 2003, the company sold $130,000,000 (including $ 5,000,000 related to an over-allotment option) of 4% convertible subordinated notes. Approximately $50,000,000 of the net proceeds from the sale of the notes was used to repurchase 3,067,484 shares of common stock, $49,000,000 was used to repay revolving credit debt with the remainder to be used for general corporate purposes.
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, competitive factors and pricing pressures, 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
OPERATING HIGHLIGHTS
(Unaudited, in thousands except for per share amounts)
For the Three Months For the Nine Months
Ended Ended
June 30, June 30,
2003 2002 2003 2002
Net sales:
Garage Doors $106,294 $110,209 $302,643 $323,248
Installation Services 71,699 70,646 210,691 205,276
Specialty Plastic Films 98,050 74,830 277,521 216,344
Electronic Information and
Communication Systems 42,501 48,007 118,874 140,369
Intersegment eliminations (5,997) (6,357) (17,698) (18,692)
$312,547 $297,335 $892,031 $866,545
Operating income:
Garage Doors $9,036 $6,420 $22,919 $16,001
Installation Services 1,993 2,181 4,200 5,286
Specialty Plastic Films 9,643 8,722 29,465 28,606
Electronic Information and
Communication Systems 1,847 3,433 6,463 8,959
Segment operating income 22,519 20,756 63,047 58,852
Unallocated amounts (2,503) (2,774) (9,087) (8,171)
Interest expense, net (833) (874) (2,460) (2,834)
Income before income taxes 19,183 17,108 51,500 47,847
Provision for income taxes (1) (5,601) (3,920) (17,881) (16,215)
Income before minority
interest and cumulative
effect of a change in
accounting principle 13,582 13,188 33,619 31,632
Minority interest (2,260) (1,751) (6,760) (4,798)
Income before cumulative
effect of a change in
accounting principle 11,322 11,437 26,859 26,834
Cumulative effect of a change
in accounting principle, net
of income tax effect -- -- -- (24,118)(2)
Net income $11,322 $11,437 $26,859 $2,716
Basic earnings per share of
common stock:
Income before cumulative
effect of a change in
accounting principle $.34 $.34 $.81 $.81
Cumulative effect of a
change in accounting
principle -- -- -- (.73)
Net income $.34 $.34 $.81 $.08
Diluted earnings per share of
common stock:
Income before cumulative
effect of a change in
accounting principle $.33 $.32 $.79 $.76
Cumulative effect of a
change in accounting
principle -- -- -- (.68)
Net income $.33 $.32 $.79 $.08
(1) Includes benefit of $1.7 million in 2003 and $2.0 million in 2002 on
resolution of tax contingencies and, in 2003, finalization of income
taxes on foreign earnings and remittances.
(2) To reflect the impairment of the goodwill of the installation
services segment pursuant to the adoption of Statement of Financial
Accounting Standards No. 142.
/CONTACT: Robert Balemian, President of Griffon Corporation, +1-516-938- 5544/ |
