GRIFFON CORP Q1 FY2025 earnings call

• Fiscal 2025 started strongly with $143 million in robust free cash flow. - HBP had consistent revenue with EBITDA up 2%,受益于住宅销量增加但商业销量减少。CPP营收下降4%，但EBITDA增1300万至1800万，得益于全球采购扩张和澳大利亚销量增长。- 一季度回购4200万美元股票，年底仍有3.9亿美元回购授权。昨日董事会批准季度股息0.18美元/股。- 一季度营收6.32亿美元，降2%；调整后EBITDA 1.45亿美元，增11%。GAAP净利润7100万美元，调整后净利润6600万美元。- 实现1720万美元房地产销售 proceeds，资本支出1750万美元，净资本支出约20万美元。

Home & Building Products (HBP): Revenue consistent with prior year. EBITDA increased 2%. Revenue benefited from increased residential volume but was offset by reduced commercial volume. EBITDA benefited from reduced material costs, partially offset by increased labor and distribution costs. Consumer and Professional Products (CPP): Revenue decreased 4% primarily due to decreased volume in most home markets except Australia (which benefited from increased product offerings and the Pope acquisition). CPP EBITDA increased by $13 million to $18 million, driven by the global sourcing expansion initiative and increased volume in Australia. HBP revenue contribution and CPP revenue contribution are part of the overall financial picture, with HBP revenue consistent and CPP revenue down 4% but EBITDA up.

• Fiscal 2025 guidance remains unchanged: revenue expected to be $2.6 billion, segment adjusted EBITDA $575 million to $600 million, with free cash flow exceeding net income. - HBP revenue in line with 2024,受益于住宅销量但受商业需求下降抵消。CPP销售预计澳大利亚增长，但北美2025年上半年仍疲软。

• Tariffs are a fluid situation. Griffon expects to mitigate tariff effects through price supplier negotiations and further diversifying the global supply chain. Significant amounts of product from China related to Lawn and Garden and Hunter Fan businesses could be impacted by tariffs, but mitigation measures are in place to maintain EBITDA margins.

Q: Within CPP, any update on the geographical mix of imported product?

A: Tariffs are fluid. Significant amounts from China related to Lawn and Garden and Hunter Fan businesses are areas where tariffs could impact, but Griffon expects to mitigate effects via price negotiations and supply chain diversification.

Q: Update on capital allocation between debt paydown and buybacks?

A: Continue to believe stock is opportunistically attractive and would rather buy stock than pay down debt at current levels but can do both.

Q: Next key steps for CPP margin expansion?

A: Transition from manufactured inventory to source inventory during 2025, leverage global supply chain, initially using existing suppliers for Australia, U.K., U.S., Canada, and then look for best sourcing opportunities globally.

Q: Tariffs and guidance?

A: Believe timing in the year and mitigation strategies will keep Griffon within its guidance.

Q: HBP margins and pricing?

A: High-end residential door market outperforms, pricing in line with 2024, and input cost impacts would likely be mitigated via price.

Q: Stock repurchase pace?

A: Purchased $42 million in the quarter ending December 31, expect to continue buying with substantial free cash flow depending on stock price.

Q: CPP spring product and tariffs?

A: A significant portion of spring product has landed, but some is still subject to tariffs.

Q: Real estate proceeds for CPP?

A: About $5 million of held-for-sale assets on the balance sheet, expect at least $5 million more in proceeds over time.