Griffon Corporation (NYSE:GFF) Q4 2019 Earnings Conference Call - Final Transcript

Nov 14, 2019 • 04:30 pm ET


Griffon Corporation (NYSE:GFF) Q4 2019 Earnings Conference Call - Final Transcript


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Greetings and welcome to the Griffon Corporation's Fourth Quarter Fiscal Year 2019 Earnings Call.

[Operator Instructions]

I'll now turn the conference over to your host, Brian Harris, Griffon's Chief Financial Officer. You may begin.

Brian G. Harris

Thank you, Ashley. Good afternoon, everyone. With me on the call is Ron Kramer, our Chairman and Chief Executive Officer. Our call is being recorded and will be available for playback, the details of which are in our press release issued earlier today.

As in the past, our comments will include forward-looking statements about the Company's performance based on our views of Griffon's businesses and the environments in which they operate. Such statements are subject to inherent risks and uncertainties that can change as the world changes. Please see the cautionary statements in today's press release, and in our various Securities and Exchange Commission filings.

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

Now, I will turn the call over to Ron.

Ronald J. Kramer

Thanks and welcome everyone. I am very pleased with our strong results for our fiscal fourth quarter and full year growth. Our 2019 revenue increased 12%, organic growth was 5%, driven by strong demand across our portfolio, in both our Home and Building Products and Defense Electronics business.

We generated $69 million in free cash flow during 2019, which reflects solid operating results coupled with the benefits of Griffon's portfolio, reshaping and integration activities, our improved free cash flow profile has allowed us to lower net debt to EBITDA to 4.8 times which is down from the prior year end of 5.5 times. We remain focused on our goal of driving leverage down to 3.5 times.

Let's go through some strategic updates. So first, let me spend a few minutes providing an operational update, including some comments on the initiative for AMES in our ClosetMaid business and an update on our CornellCookson facility expansion project. We announced earlier today the development of a next-generation business platform for the AMES and ClosetMaid US businesses to enhance the growth, efficiency and competitiveness of these operations. The goal is to further enhance our profitability.

As part of this initiative, multiple independent information systems will be unified into a single data and analytics platform, which will serve the entire AMES US enterprise. This platform will improve business tracking, enable faster decision-making and improve AMES' ability to predict and respond to external factors with improved lead times. Given the seasonal and weather-dependent nature of the AMES businesses, these enhancements in tracking and prediction, will allow us to improve our service and speed up the velocity of our operations.

In addition, this initiative will consolidate manufacturing and distribution, better leveraging the investments in talent and infrastructure at our key sites. We'll also see benefits from reduced fixed cost and a streamlined facilities footprint. The final piece of this next-generation platform is an investment in plant automation. We remain committed to being