Griffon Corporation

Ladies and gentlemen, good morning and welcome to the Griffin Corporation Annual and Fiscal Fourth Quarter Financial Results Conference Call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star and zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Brian Harris, Chief Financial Officer. Please go ahead.

Thank you. Good morning, and welcome to Griffin Corporation's fourth quarter fiscal 2024 earnings call. Joining me this morning is Ron Kramer, Griffin's Chairman and Chief Executive Officer. Our press release was issued earlier this morning and is available on our website at www.griffin.com. Today's call is being recorded, and the replay instructions are included in our earnings report. Our comments will include forward-looking statements about Griffin's performance. These statements are subject to risks and uncertainties that can change as the world changes. Pre-seed the cautionary statements in today's press release and in our SEC filing. Finally, some of today's remarks will 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 Ron.

Good morning, everyone, and thanks for joining us. We are very pleased with our results for the fourth quarter and the fiscal year, which were driven by a consistently strong performance from our home and building product segment and improved profitability at our consumer and professional product segment. For the year, home and building products, HBP, revenue of $1.6 billion was consistent with the prior year, Driven by increased residential volume, which was offset by reduced demand for commercial projects, HBP sustained strong EBITDA margin performance throughout the year, ending with an EBITDA margin of 31.5%. HBP's fourth quarter results confirm the trends we saw throughout the year, with growth in residential volume more than offsetting reduced commercial volume. At HVP, we are continuing to invest in productivity and innovation to further drive growth. These investments include expanding Clopay's Troy, Ohio, sectional door manufacturing capacity and adding advanced manufacturing equipment to better satisfy customer demand for premium products. We plan to make further investments in capacity expansion and technology in 2025. Turning to consumer and professional product segment, CPP's results for the year continue to reflect challenging market conditions, with revenues decreasing 6% to $1 billion. Reduced consumer demand in North America drove most of the revenue year over year, offset by increased volume in the Australian market. Volume in the U.K. increased year over year, indicating a potential market recovery for a region that has endured a significant drop-off in consumer demand over the last several years. CPP profitability significantly improved year over year, despite the reduced consumer demand in North America. This was driven by improved North American production costs and increased profit from the additional volume in Australia. EBITDA increased 1%. George Munro, 44% to $73 million, which represented a margin improvement of 240 basis points to 7%. CPP successfully concluded its global sourcing expansion project ahead of schedule as of the end of September 2024. The positive effects of this initiative are already improving the profitability of CPP's U.S. operations, and the completion of the Global Sourcing Initiative establishes a foundation for CPP to achieve its target of 15% EBITDA margin. Turning to capital allocation, in fiscal 2024, we took significant actions to deliver shareholder value through stock buybacks and cash dividends while maintaining a strong balance sheet. During the year, we repurchased 4.8 million shares at an average price of $57.52. Since September 30th, we repurchased approximately half a million shares at an average price of $67.91, which used the remaining authorization available under our share repurchase program. Since April 2023 and through November 12, 2024, our share repurchases totaled 9.4 million shares of common stock, or 16.4% of the April 2023 outstanding shares, for a total of $458 million, or an average of $48.74 per share. We continue to believe that our shares are a compelling value, trading well below intrinsic value, and as a result, Griffin's Board of Directors has authorized an additional $400 million of share repurchases. Also this morning, we announced that the Griffin Board authorized a regular quarterly dividend of $0.18 per share, payable on December 18th to shareholders of record on November 25th, marking the 53rd consecutive quarterly dividend to shareholders. This dividend represents a 20 percent increase over the prior quarter dividend, and since we began paying dividends in 2012, reflects growth at an annualized compound rate of 18 percent. During fiscal 2024, we also took action to improve our financial flexibility with the repricing of our 459 million term loan B facility which matures in 2029, thus reducing the cost of this financing. Utilizing our $326 million of fiscal 2024 free cash flow, Griffin returned a total of $310 million to shareholders in 2024 through dividends and share repurchases, while also maintaining our year-over-year leverage at 2.6 times improving our financial flexibility, and making substantial investments in our businesses. These actions reflect the strength of our business, as well as our confidence in our strategic plan and outlook. I'll turn it over to Brian for the financial update and to provide some details about our 2025 guidance. Thank you, Ron.