Griffon Corporation (“Griffon” or the “Company”) (NYSE:GFF)
today announced that its Board of Directors has initiated a process
to review a comprehensive range of strategic alternatives to
maximize shareholder value including a sale, merger, divestiture,
recapitalization or other strategic transaction. Griffon has
retained Goldman Sachs & Co. LLC as its financial advisor and
Dechert LLP as its legal counsel to assist in the review
process.
Ronald J. Kramer, Chairman and Chief Executive Officer, said “We
are proud of what the Board, management and our employees have
accomplished in building Griffon. We have executed a substantial
transformation, which started in 2018 with the divestiture of the
Plastics business and the acquisitions of ClosetMaid and Cornell
Cookson. During the past four years Griffon’s operating performance
has been outstanding with significant increases in profitability
and free cash flow. The recent strategic acquisition of Hunter Fan
Company complements and diversifies our Consumer & Professional
Products segment while the announced divestiture of our defense
electronics business, Telephonics, will strengthen our balance
sheet.”
“Demonstrating the conviction in its ability to continue to
deliver strong operating performance for the business, Griffon
raised its fiscal year 2022 adjusted EBITDA guidance for its
business segments to $475 million, an increase of $120 million or
34%, during the company’s second quarter results conference call on
April 28th,” said Mr. Kramer. “Additionally, management also
discussed its expectation that the company’s leverage, as
calculated in accordance with Griffon’s credit agreement, will be
less than 3.0x EBITDA by the end of fiscal 2022 ending September 30
(a reduction of at least 1.5x from the second quarter ended March
31), driven by second half cash generation and EBITDA performance
and the proceeds from the divestiture of Telephonics.”
“Notwithstanding the increased guidance for fiscal 2022, and our
confidence in our forward outlook, there is a profound disconnect
between Griffon's share price and the underlying value of our
businesses. Given this disconnect, the Board and management believe
it is necessary to consider a review of alternatives, with a focus
on maximizing near-term shareholder value creation. Our top
priority is unlocking the true intrinsic value of Griffon for our
shareholders.”
There is no timeline for this review and there is no assurance
that the Board’s review will result in any transaction being
entered into or consummated. Griffon does not intend to comment on
the process or disclose further developments until the Board
approves a specific transaction or otherwise concludes its review
of strategic alternatives.
Safe Harbor Statements
“Safe Harbor” Statements under the Private Securities Litigation
Reform Act of 1995: All statements related to, among other things,
income (loss), earnings, cash flows, revenue, changes in
operations, operating improvements, industries in which Griffon
operates and the United States and global economies that are not
historical are hereby identified as “forward-looking statements”
and may be indicated by words or phrases such as “anticipates,”
“supports,” “plans,” “projects,” “expects,” “believes,” “should,”
“would,” “could,” “hope,” “forecast,” “management is of the
opinion,” “may,” “will,” “estimates,” “intends,” “explores,”
“opportunities,” the negative of these expressions, use of the
future tense and similar words or phrases. Such forward-looking
statements are subject to inherent risks and uncertainties that
could cause actual results to differ materially from those
expressed in any forward-looking statements. These risks and
uncertainties include, among others: current economic conditions
and uncertainties in the housing, credit and capital markets;
Griffon’s ability to achieve expected savings from cost control,
restructuring, integration and disposal initiatives; the ability to
identify and successfully consummate, and integrate, value-adding
acquisition opportunities (including, in particular, integration of
the Hunter Fan acquisition); increasing competition and pricing
pressures in the markets served by Griffon’s operating companies;
the ability of Griffon’s operating companies to expand into new
geographic and product markets, and to anticipate and meet customer
demands for new products and product enhancements and innovations;
reduced military spending by the government on projects for which
Griffon's Telephonics Corporation supplies products, including as a
result of defense budget cuts or other government actions; the
ability of the federal government to fund and conduct its
operations; increases in the cost or lack of availability of raw
materials such as resin, wood and steel, components or purchased
finished goods, including any potential impact on costs or
availability resulting from tariffs; changes in customer demand or
loss of a material customer at one of Griffon’s operating
companies; the potential impact of seasonal variations and
uncertain weather patterns on certain of Griffon’s businesses;
political events that could impact the worldwide economy; a
downgrade in Griffon’s credit ratings; changes in international
economic conditions including interest rate and currency exchange
fluctuations; the reliance by certain of Griffon’s businesses on
particular third party suppliers and manufacturers to meet customer
demands; the relative mix of products and services offered by
Griffon’s businesses, which impacts margins and operating
efficiencies; short-term capacity constraints or prolonged excess
capacity; unforeseen developments in contingencies, such as
litigation, regulatory and environmental matters; unfavorable
results of government agency contract audits of Telephonics
Corporation; our strategy, future operations, prospects and the
plans of our businesses, including closing of the disposition of
Telephonics Corporation; Griffon’s ability to adequately protect
and maintain the validity of patent and other intellectual property
rights; the cyclical nature of the businesses of certain of
Griffon’s operating companies; possible terrorist threats and
actions and their impact on the global economy; the impact of
COVID-19 on the U.S. and the global economy, including business
disruptions, reductions in employment and an increase in business
and operating facility failures, specifically among our customers
and suppliers; Griffon's ability to service and refinance its debt;
and the impact of recent and future legislative and regulatory
changes, including, without limitation, changes in tax laws. Such
statements reflect the views of the Company with respect to future
events and are subject to these and other risks, as previously
disclosed in the Company’s Securities and Exchange Commission
filings. Readers are cautioned not to place undue reliance on these
forward-looking statements. These forward-looking statements speak
only as of the date made. Griffon undertakes no obligation to
publicly update or revise any forward-looking statements, whether
as a result of new information, future events or otherwise, except
as required by law.
About Griffon
Corporation
Griffon is a diversified management and holding company that
conducts business through wholly-owned subsidiaries. Griffon
oversees the operations of its subsidiaries, allocates resources
among them and manages their capital structures. Griffon provides
direction and assistance to its subsidiaries in connection with
acquisition and growth opportunities as well as in connection with
divestitures. In order to further diversify, Griffon also seeks
out, evaluates and, when appropriate, will acquire additional
businesses that offer potentially attractive returns on
capital.
Griffon conducts its operations through three reportable
segments:
- Consumer and Professional Products (“CPP”) is a leading
North American manufacturer and a global provider of branded
consumer and professional tools; residential, industrial and
commercial fans; home storage and organization products; and
products that enhance indoor and outdoor lifestyles. CPP sells
products globally through a portfolio of leading brands including
AMES, since 1774, Hunter, since 1886, True Temper, and
ClosetMaid.
- Home and Building Products conducts its operations
through Clopay Corporation (“Clopay”). Founded in 1964, Clopay is
the largest manufacturer and marketer of garage doors and rolling
steel doors in North America. Residential and commercial sectional
garage doors are sold through professional dealers and leading home
center retail chains throughout North America under the brands
Clopay, Ideal, and Holmes. Rolling steel door and grille products
designed for commercial, industrial, institutional, and retail use
are sold under the CornellCookson brand.
Classified as a discontinued operation, Defense Electronics
conducts its operations through Telephonics Corporation
("Telephonics"), founded in 1933, a globally recognized leading
provider of highly sophisticated intelligence, surveillance and
communications solutions for defense, aerospace and commercial
customers.
For more information on Griffon and its operating subsidiaries,
please see the Company’s website at www.griffon.com.
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version on businesswire.com: https://www.businesswire.com/news/home/20220516005570/en/
Company: Brian G. Harris SVP &
Chief Financial Officer Griffon Corporation (212) 957-5000
Investor Relations: Michael
Callahan Managing Director ICR Inc. (203) 682-8311
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