Griffon Corporation (NYSE:GFF) Q1 2024 Earnings Call Transcript
Griffon Corporation (NYSE:GFF) Q1 2024 Earnings Call Transcript February 7, 2024
Griffon Corporation beats earnings expectations. Reported EPS is $1.19, expectations were $0.78. GFF isn't one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).
Operator: Greetings. Welcome to the Griffon Corporation Fiscal First Quarter 2024 Earnings Conference Call. [Operator Instructions]. Please note, this conference is being recorded. I would now like to turn the conference over to Brian Harris, Chief Financial Officer. Thank you. You may begin.
Brian Harris: Thank you. Good morning. It's my pleasure to welcome everybody to Griffon Corporation's First Quarter Fiscal 2024 Earnings Call. Joining me for this morning's call is Ron Kramer, Griffon's Chairman and Chief Executive Officer. Our press release was issued earlier this morning and is available on our website. Today's call is being recorded, and the replay instructions are included in our earnings release. Our comments will include forward-looking statements about Griffon's performance. These statements are subject to risks and uncertainties that can change as the world changes. Please see the cautionary statements in today's press release and in our SEC filings. Finally, some of today's remarks, we'll adjust for items that affect comparability between periods. These items are explained in our non-GAAP reconciliations included in our press release. With that, I'll turn the call over to Rob.
Ronald Kramer: Thanks, Brian. Good morning, everyone, and thanks for joining us. Fiscal 2024 is off to a good start with the first quarter highlighted by strong free cash flow of $133 million, continued solid operating performance at Home & Building Products and improved profitability at Consumer and Professional Products. we are well positioned to meet our financial targets for the year. For the quarter, Home & Building Products or HBP, revenue and EBITDA were consistent with the prior year. Revenue benefited from favorable price and mix and increased customer orders, offset by reduced year-over-year volume due to the elevated sectional door backlog we had in the prior year. Turning to the Consumer and Professional Products segment, or CPP.
First quarter revenue decreased 2%, primarily due to decreased volume, driven by reduced customer demand in North America. CPP improved EBITDA by $7 million in the quarter, driven by decreased North American production costs. I'm very pleased to tell you that our previously announced initiative to expand CPP's global sourcing strategy remains on schedule and within budget. Since May 2023, when we announced the initiative, operations have ceased at the 4 identified wood mills and all of the affected U.S. manufacturing facilities, except one. We expect operations at the remaining affected manufacturing facility in Grantsville, Maryland to conclude by March 2024. These actions will reduce our manufacturing footprint by over 1.2 million square feet.
As we've emphasized before, the global sourcing expansion with AMES is a key element of our strategy to improve the margins of CPP. We will continue to provide updates throughout the year as we achieve additional milestones. Turning to our capital allocation. In November, we announced a $200 million increase to our share repurchase authorization, bringing the total authorization to $262 million at that time. During the first quarter, we repurchased 1.6 million shares totaling $70 million or an average of $42.61 per share. At December 31, $238 million remained under the repurchase authorization. Since April 2023 and through December, we've repurchased 5.8 million shares at an average price of $38.15 for a total of $220 million. These repurchases have reduced Griffon's outstanding shares by 10.1% relative to total shares outstanding at the end of the second quarter of fiscal 2023.
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