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

Nov 14, 2019 • 04:30 pm ET

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

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Q & A
Operator
Operator

Thank you. At this time, we will be conducting a question-and-answer session. [Operator Instructions] Your first question comes from Bob Labick with CJS Securities. Please go ahead.

Analyst
Bob Labick

Thank you. And good afternoon and congratulations on a nice quarter and fiscal '19.

Executive
Ronald J. Kramer

Thank you.

Executive
Brian G. Harris

Thanks, Bob.

Analyst
Bob Labick

I know you just mentioned this. I just wanted to ask if you could expand a little bit. Obviously, you had a really strong year in '19 that exceeded expectations. And your guidance appears a bit conservative for 2020, you mentioned some restraints there. So maybe you could just walk us through some of the potential headwinds that you see out there and then some of the upside potential, where you may be conservative if things don't turn out as bad as you might think?

Executive
Ronald J. Kramer

Look we give guidance once a year. We've always said that we try to balance all the risks and opportunities. We clearly all live in uncertain times and we feel that the balance across our businesses, we're performing well. We believe the earnings power of our businesses is always potentially higher than what guidance is in any one year. We've been showing that consistently over a period of years. We think 2020 is shaping up to be a better year than 2019 was.

In 2019, we significantly outperformed our guidance. We've every expectation that our teams are working hard, but you set a bar once, we go into a fiscal year that starts on October 1, each year. We react to things that are moving the landscape of issues that have been out there over the last year are still unsettled, most importantly trade and tariffs are still there. We're hopeful that it will be resolved. So we went into our planning cycle this summer when we started the year on October 1. We're going to take the worst-case scenario view. And if you're going to give guidance, you should be able to be have confidence, you're going to be able to exceed guidance.

So for now, we're very pleased about what we did in 2019. We like the way the year ahead of us shaping up. But we've got a long way to go till November of 2020, and I'll remind you, there will be an election by the time we have our year-end call next year. So being on the conservative side taxes, we rather under-promise and overperform.

Analyst
Bob Labick

Got it. Okay. No, that's great. And then the new announcement this afternoon about the AMES initiative sense really exciting. And obviously, it seems like it'll be a terrific payback when you're done. And I'm sure you guys -- you're giving yourselves a couple of years to do it. Can you talk about some of the risks of implementing a change this big and what you have in the plans to mitigate any risks for making these changes?

Executive
Ronald J. Kramer

Look, I think you have to look at it relative to our track record over a period of years in a number of