Griffon Corporation (NYSE:GFF) Q3 2020 Earnings Conference Call - Final Transcript

Jul 30, 2020 • 04:30 pm ET


Griffon Corporation (NYSE:GFF) Q3 2020 Earnings Conference Call - Final Transcript


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Thank you for standing by. This is the conference operator. Welcome to the Griffon Corporation's Third Quarter 2020 Earnings Conference Call. [Operator Instructions] I would now like to turn the conference over to Brian Harris, Chief Financial Officer. Please go ahead.

Brian G. Harris

Thank you. 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 adjust for those items that affect comparability between periods. These items are explained in our non-GAAP reconciliations included in our press release. Now, I'll turn the call over to Ron.

Ronald J. Kramer

Thanks, and good afternoon everyone. I hope you and all your families are doing well in these turbulent times. Griffon entered the unprecedented COVID-19 pandemic from a position of strength, both operationally and competitively. Building on our already strong results in this fiscal year prior to March, our businesses have benefited from the stay-at-home nature of the pandemic. Both, existing and new customers, have been investing in home projects such as closet renovations, tending to their lawns and gardens and enhancing their enjoyment of the outdoors, upgrading the exterior of their homes, including their garage doors. We believe these trends will continue to grow in the years ahead.

Our third quarter results were outstanding. Revenues increased 10%. Adjusted EBITDA increased 31% and adjusted earnings per share increased 90% compared to the prior year period. These results are a reflection of the strategic actions taken by Griffon starting with the September 2017 announcement regarding the disposition of our plastics business and the purchase of ClosetMaid, further enhanced by the purchase of CornellCookson in June of 2018, coupled with the home improvement trends that I described. Our pivot out of the capital-intensive commodity-driven plastics business into branded domestically-manufactured Consumer and Professional Product businesses positioned us for market share gains, as well as revenue, earnings, and cash flow growth.

Further underscoring this quarter's results, our 2020 nine-month free cash flow increased $34 million over the comparable 2019 nine-month period and builds on the prior year's full year free cash flow of $69 million. As a result of this performance, our net debt to EBITDA leverage has been reduced by one full turn from the prior year quarter to 4.4 times.

Ensuring the health and safety of our employees and our customers continues to be our top priority. Since early March, we have proactively implemented health and safety measures across our global workforce as local and national authorities have circulated additional guidelines for employee