Griffon Corporation

Thank you for standing by. This is the conference operator. Welcome to the Griffin Corporation third quarter fiscal 2021 earnings conference call. As a reminder, all participants are in listen only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star then one on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star and zero. I would now like to turn the conference over to Brian Harris, CFO. Please go ahead.

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 Griffin'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 with those items that affect comparability between reporting periods. These items are explained in our non-GAAP reconciliations included in our press release or in our investor presentation which will be available on our website. Now I'll turn the call over to Ron. Thanks.

Good afternoon, everyone. We're pleased with our third quarter performance, which was slightly above our expectations. Revenue increased 2 percent over the prior year quarter, or 4 percent, excluding the impact of the SEG disposition. Adjusted EBITDA was 76 million, excluding unallocated costs. And adjusted EPS was 43 cents. We're executing well in a very complex operating environment. I want to spend a minute discussing it before moving to the segments. Demand remained very healthy across our product categories, supported by strong housing market, repair and remodel activity, and consumer spending. We're currently carrying record levels of backlog in both the CPP and HBP segments due to transportation disruptions and tight labor availability, which limited our ability to catch up with demand. We implemented price adjustments and continually worked through efficiency programs to mitigate rapidly rising input costs, and we'll continue to work with our suppliers and customers to implement further price adjustments. Our businesses have proven to be resilient, and we're reiterating our full-year guidance. Our AIM strategic initiative that will consolidate operations, increase automation, support e-commerce growth, and create a new global data and analytics platform for AIMS by the end of 2023 is on track. We expect this to further improve margins in the years ahead. We reiterate our expectation to realize annual cash savings of $30 million to $35 million and inventory reductions of the same magnitude when the benefits of the initiative are fully realized. As we navigate through the second year of managing our businesses during the global pandemic, we continue to prioritize protecting our employees, even as restrictions in the United States, Canada, the United Kingdom, and Australia are evolving. We are closely monitoring the situation due to the spread of the COVID-19 Delta variant, and we'll make adjustments as needed to be responsive to government guidelines and to ensure the safety of our employees and customers. Turning to the segments, in consumer and professional products, we saw robust demand across all geographies and product lines. Shipping delays related to availability of transportation impacted U.S. revenue, and EBITDA was impacted by the implementation of price adjustments, which, as expected, lagged input cost increases. In the home and building product segment, we continue to see strong demand for both residential and commercial door products. Sales increased from the prior year quarter, driven by increased volume and favorable pricing and mix. EBITDA also increased, benefiting from the increased sales, partially offset by the timing of price adjustments versus increasing input costs. In defense electronics, telephonics revenue decreased from the prior year, primarily driven by reduced volume, resulting from timing of deliveries on communications and radar systems. as well as the divestiture of SEG, partially offset by volume increases in naval and cyber systems. EBITDA increased over the prior year as actions taken to reduce operating expenses took effect and performance on naval and cyber system programs improved. Backlog in the quarter was $375 million compared to $341 million at June 30, 2020, excluding SEG with trailing 12-month book-to-bill earnings. of 1.1 times. We continue to see a bright future for the telephonics, intelligence, surveillance, and reconnaissance products in the years ahead. Turning to the balance sheet, we continue to have a solid capital structure with excellent flexibility. We have $221 million in cash and $362 million available in our revolving credit facility, putting us in an excellent position to execute on our organic growth initiatives and to capitalize on an active pipeline of acquisition opportunities while returning to shareholders through our quarterly dividends. We've delevered to 2.9 times, marking 1.5 turns of improvement over the prior year period. Earlier today, our board authorized an $0.08 per share dividend payable on September 16, 2021, to shareholders of record on August 19th. This marks the 40th consecutive quarterly dividend to shareholders, which has grown at an annualized compound rate of 17% since we initiated it in 2012. Let me turn it over to Brian, who will take you through some of the financials. Thank you, Ron.