Griffon Corp (GFF) Reports Fiscal Year and Fourth Quarter 2023 Results
Griffon Corp (NYSE:GFF) sees a 6% decrease in annual revenue but reports a significant turnaround in income from continuing operations.
Adjusted EBITDA for fiscal 2023 increased by 10% year-over-year, reflecting strong operational performance.
Griffon Corp (NYSE:GFF) continues to return value to shareholders with increased dividends and aggressive share repurchases.
On November 15, 2023, Griffon Corp (NYSE:GFF) released its 8-K filing, announcing its financial results for the fiscal year and fourth quarter ended September 30, 2023. The company reported a 6% decrease in annual revenue, totaling $2.7 billion compared to the previous year's $2.8 billion. However, income from continuing operations showed a remarkable improvement, with fiscal 2023 reporting $77.6 million, or $1.42 per share, a significant recovery from the prior year's loss of $287.7 million, or $5.57 per share.
Fiscal Year and Fourth Quarter Financial Highlights
Adjusted income from continuing operations for fiscal 2023 was $247.7 million, or $4.54 per share, up from $219.8 million, or $4.07 per share, in the prior year. Adjusted EBITDA from continuing operations also saw a 10% increase to $505.3 million. The fourth quarter revenue experienced a 10% decline to $641 million, with adjusted income from continuing operations for the quarter rising to $63.1 million, or $1.19 per share, from $59.7 million, or $1.09 per share, in the prior year's fourth quarter.
Operational and Segment Performance
Griffon's Home and Building Products (HBP) segment reported a 5% increase in revenue for 2023, while the Consumer and Professional Products (CPP) segment faced an 18% decline, primarily due to reduced customer demand and elevated inventory levels. The CPP segment is actively addressing these challenges by expanding its global sourcing strategy, which is expected to enhance future profitability and efficiency.
Capital Allocation and Shareholder Returns
Griffon Corp (NYSE:GFF) has taken significant steps to enhance shareholder value, including a 25% increase in its regular quarterly dividend, a $2.00 per share special dividend, and a $200 million increase to its share repurchase authorization. The company repurchased 4.1 million shares for $151 million and increased its revolving credit facility to $500 million. In total, Griffon returned $285 million to shareholders through dividends and share repurchases during 2023.
Balance Sheet and Cash Flow
As of September 30, 2023, Griffon had cash and cash equivalents of $102.9 million and total debt of $1.47 billion, resulting in net debt of $1.37 billion. The leverage ratio was 2.6x net debt to EBITDA. Free cash flow for fiscal 2023 was a robust $389.1 million, reflecting the company's strong operating results.
Outlook and Strategic Initiatives
For fiscal 2024, Griffon expects revenue of $2.6 billion and adjusted EBITDA of $525 million. The company plans to continue using its free cash flow to support its capital allocation strategy, focusing on share repurchases, debt reduction, dividends, and business investment. The CPP segment's global sourcing strategy expansion is on track, with significant reductions in U.S. facility footprint and headcount expected to be completed by the end of calendar 2024.
Griffon's Chairman and CEO, Ronald J. Kramer, expressed confidence in the company's strategic plan and outlook, citing the strength of Griffon's businesses and the successful execution of operational and financial strategies.
Investors and analysts interested in further details can access the conference call replay or review the full financial statements and management's discussion in the 8-K filing.
Explore the complete 8-K earnings release (here) from Griffon Corp for further details.
This article first appeared on GuruFocus.
