Griffon Corporation Announces Operating Results for the First
Quarter of Fiscal 2005 and Contract Awards to Supply Radar Systems
for the U.S. Coast Guard's Deepwater Program JERICHO, N.Y., Feb. 8
/PRNewswire-FirstCall/ -- Griffon Corporation (NYSE: GFF) today
reported operating results for the first quarter of fiscal 2005,
ended December 31, 2004. Net sales for the quarter increased to
$340,174,000, up from $338,502,000 for the first quarter of fiscal
2004. Income before income taxes was $19,555,000 compared to
$25,658,000 last year. Net income was $10,452,000 in the current
quarter compared to $13,115,000 last year. Diluted earnings per
share for the quarter was $.34 compared to $.41 in last year's
first quarter. Operating results in the first quarter of fiscal
2005 reflected continued increases in raw material costs for both
the specialty plastic films and garage doors segments. Higher
selling prices in both segments moderated the effect of the raw
material cost increases, but did not fully recover them. In garage
doors, selling price increases to pass along increased raw material
(steel) costs and favorable product mix resulted in higher net
sales. Garage doors' profitability was negatively impacted
primarily by the net effect of the raw material cost increases.
Specialty plastic films experienced reduced unit volume related to
product design changes by its major customer that were partly
offset by higher selling prices due to raw material (resin) cost
increases and the effect of a weaker U.S. dollar on foreign
operations. Specialty plastic films' profitability in the quarter
was unfavorably impacted by the unit volume reduction and the
effect of the raw material cost increases. Lower sales and profits
in installation services reflected the effects of increased
competition, a weaker construction environment in certain of its
markets and narrower margins due to higher costs of products with
significant steel content (garage doors and fireplaces). The
electronic information and communication systems segment,
Telephonics, reflected higher sales and profits principally due to
growth in defense and international production programs. The
company also announced that Telephonics received two contract
awards valued in excess of $7.3 million from Lockheed Martin to
develop radar systems for the United States Coast Guard's CN-235
Maritime Patrol Aircraft and the HV-911 Vertical Takeoff Unmanned
Aerial Vehicle. The first contract award is for development of an
advanced version of Telephonics' APS-143 radar, designated the
APS-143C(V)3. When fielded, this high performance radar will be a
major element of the CN-235 Maritime Patrol Aircraft. This flexible
and versatile mission system can be adapted to any other fixed wing
aircraft utilized by the Coast Guard. The second contract award is
for a customized version of Telephonics' RDR- 1700B lightweight
imaging radar, which will be integrated on the Coast Guard's HV-911
Vertical Takeoff Unmanned Aerial Vehicle. Designated the
RDR-1700CG, this radar will provide the HV-911 with maritime
surveillance, weather avoidance and search and rescue capabilities.
The contract awards span an eighteen-month time period, covering
system development, non-recurring engineering, and the first
engineering development models for the CN-235 MPA and the HV-911.
The contracts were awarded under Deepwater, a critical multi-year,
multi-billion dollar program to modernize and replace the Coast
Guard's aging ships and aircraft, and improve command and control
and logistics systems. It is the largest recapitalization effort in
the history of the Coast Guard. Cash flow from operations was
$9,000,000 for the quarter, which together with existing cash
balances, funded capital expenditures of $17,000,000, principally
for the specialty plastic films segment capital expansion programs.
Also, during the quarter $7,000,000 was used to acquire
approximately 300,000 shares of the company's common stock under
its buyback program. Additional purchases will be made from time to
time, depending on market conditions, at prices deemed appropriate
by management. 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) For the Three Months Ended December 31, 2004 2003 Net
sales: Garage Doors $135,707,000 $121,860,000 Installation Services
72,289,000 76,705,000 Specialty Plastic Films 91,332,000
104,001,000 Electronic Information and Communication Systems
46,402,000 41,640,000 Intersegment eliminations (5,556,000)
(5,704,000) $340,174,000 $338,502,000 Operating income: Garage
Doors $12,649,000 $13,260,000 Installation Services 1,289,000
3,006,000 Specialty Plastic Films 8,598,000 12,940,000 Electronic
Information and Communication Systems 2,524,000 2,030,000 Segment
operating income 25,060,000 31,236,000 Unallocated amounts
(3,980,000) (3,728,000) Interest expense, net (1,525,000)
(1,850,000) Income before income taxes 19,555,000 25,658,000
Provision for income taxes (7,235,000) (9,493,000) Income before
minority interest 12,320,000 16,165,000 Minority interest
(1,868,000) (3,050,000) Net income $10,452,000 $13,115,000 Earnings
per share of common stock: Basic $.36 $.44 Diluted $.34 $.41
DATASOURCE: Griffon Corporation CONTACT: Robert Balemian,
President, Griffon Corporation, +1-516-938-5544
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