Company Increases Return of Capital to
Shareholders with an Upsized $258 million Buyback Authorization and
a $2.00 per share Special Dividend
Griffon Corporation (“Griffon” or the “Company”) (NYSE:GFF)
announced today its Board of Directors unanimously decided to
conclude its review of strategic alternatives. After extensive
evaluation and deliberation, the Board determined the ongoing
execution of the Company’s strategic plan is the best way to
maximize value for shareholders at this time.
Also today, the Griffon Board approved two actions to return
additional capital to shareholders. First, Griffon increased its
share repurchase authorization to $258 million from the prior
unused authorization of $58 million. Second, the Griffon Board
declared a special cash dividend of $2.00 per share, payable on May
19, 2023 to shareholders of record as of the close of business on
May 9, 2023.
The Griffon Board initiated the strategic alternatives process
in January 2022 with the formation of a Committee on Strategic
Considerations, comprised solely of independent members of the
Board. The Committee, together with its advisors Goldman Sachs
& Co and Dechert LLP, evaluated a comprehensive range of
strategic alternatives to maximize shareholder value including a
possible sale, merger, divestiture, and recapitalization. Griffon
publicly announced the process in May 2022 and subsequently
solicited interest from a wide range of potential counterparties.
After careful consideration, the Board unanimously determined that
none of the proposals received reflect the intrinsic value and
strong operating performance of the business, and therefore elected
to conclude its review.
James W. Sight, Chair of the Committee of Strategic
Considerations, said, “After a comprehensive and exhaustive
process, the Committee recommended, and the Board unanimously
agreed, that continuing to execute Griffon’s strategic plan is the
best approach for maximizing shareholder value. Although the
process has now concluded, Griffon’s Board will continue to be open
to and consider all opportunities to enhance shareholder
value.”
“Over the past year, our financial performance has improved
despite headwinds in the housing market and the global economy. We
remain confident about our business and operating strategy,” said
Ronald J. Kramer, Chairman and CEO of Griffon. “The special
dividend announced today demonstrates our commitment to providing
immediate value to our shareholders, and reflects the confidence of
Griffon’s Board and management regarding our outlook.”
“We have a strong balance sheet with no significant debt
maturities until 2028. Regarding our capital allocation, we expect
to utilize excess cash to further reduce debt, and will use the
special dividend and increased repurchase authorization to return
value to shareholders,” Mr. Kramer continued. “Based on our
confidence in the Company’s continued strong operating performance
and free cash flow, we believe Griffon’s best days are ahead of
us.”
The Company will release fiscal second quarter results on
Wednesday, May 3, 2023, followed by a conference call at 8:30 AM
ET.
Safe Harbor Statements
“Safe Harbor” Statements under the Private Securities Litigation
Reform Act of 1995: All statements related to, among other things,
income (loss), earnings, cash flows, revenue, changes in
operations, operating improvements, the impact of the Hunter Fan
transaction, the outcome of our strategic alternatives review
process, industries in which Griffon Corporation (the “Company” or
“Griffon”) operates and the United States and global economies that
are not historical are hereby identified as “forward-looking
statements” and may be indicated by words or phrases such as
“anticipates,” “supports,” “plans,” “projects,” “expects,”
“believes,” “should,” “would,” “could,” “hope,” “forecast,”
“management is of the opinion,” “may,” “will,” “estimates,”
“intends,” “explores,” “opportunities,” the negative of these
expressions, use of the future tense and similar words or phrases.
Such forward-looking statements are subject to inherent risks and
uncertainties that could cause actual results to differ materially
from those expressed in any forward-looking statements. These risks
and uncertainties include, among others: the impact of the
strategic alternatives review process announced in May 2022, any
transaction that may result from that process and the possibility
that the process may not result in any transaction; current
economic conditions and uncertainties in the housing, credit and
capital markets; Griffon’s ability to achieve expected savings from
cost control, restructuring, integration and disposal initiatives;
the ability to identify and successfully consummate, and integrate,
value-adding acquisition opportunities (including, in particular,
integration of the Hunter Fan acquisition); increasing competition
and pricing pressures in the markets served by Griffon’s operating
companies; the ability of Griffon’s operating companies to expand
into new geographic and product markets, and to anticipate and meet
customer demands for new products and product enhancements and
innovations; increases in the cost or lack of availability of raw
materials such as resin, wood and steel, components or purchased
finished goods, including any potential impact on costs or
availability resulting from tariffs; changes in customer demand or
loss of a material customer at one of Griffon’s operating
companies; the potential impact of seasonal variations and
uncertain weather patterns on certain of Griffon’s businesses;
political events that could impact the worldwide economy; a
downgrade in Griffon’s credit ratings; changes in international
economic conditions including inflation, interest rate and currency
exchange fluctuations; the reliance by certain of Griffon’s
businesses on particular third party suppliers and manufacturers to
meet customer demands; the relative mix of products and services
offered by Griffon’s businesses, which impacts margins and
operating efficiencies; short-term capacity constraints or
prolonged excess capacity; unforeseen developments in
contingencies, such as litigation, regulatory and environmental
matters; Griffon’s ability to adequately protect and maintain the
validity of patent and other intellectual property rights; the
cyclical nature of the businesses of certain of Griffon’s operating
companies; possible terrorist threats and actions and their impact
on the global economy; effects of possible IT system failures, data
breaches or cyber-attacks; the impact of COVID-19, or some other
future pandemic, on the U.S. and the global economy, including
business disruptions, reductions in employment and an increase in
business and operating facility failures, specifically among our
customers and suppliers; Griffon’s ability to service and refinance
its debt; and the impact of recent and future legislative and
regulatory changes, including, without limitation, changes in tax
laws. Such statements reflect the views of the Company with respect
to future events and are subject to these and other risks, as
previously disclosed in the Company’s Securities and Exchange
Commission filings. Readers are cautioned not to place undue
reliance on these forward-looking statements. These forward-looking
statements speak only as of the date made. Griffon undertakes no
obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise, except as required by law.
About Griffon
Corporation
Griffon is a diversified management and holding company that
conducts business through wholly-owned subsidiaries. Griffon
oversees the operations of its subsidiaries, allocates resources
among them and manages their capital structures. Griffon provides
direction and assistance to its subsidiaries in connection with
acquisition and growth opportunities as well as in connection with
divestitures. In order to further diversify, Griffon also seeks
out, evaluates and, when appropriate, will acquire additional
businesses that offer potentially attractive returns on
capital.
Griffon conducts its operations through two reportable
segments:
- Consumer and Professional Products (“CPP”) is a leading
North American manufacturer and a global provider of branded
consumer and professional tools; residential, industrial and
commercial fans; home storage and organization products; and
products that enhance indoor and outdoor lifestyles. CPP sells
products globally through a portfolio of leading brands including
AMES, since 1774, Hunter, since 1886, True Temper, and
ClosetMaid.
- Home and Building Products conducts its operations
through Clopay Corporation (“Clopay”). Founded in 1964, Clopay is
the largest manufacturer and marketer of garage doors and rolling
steel doors in North America. Residential and commercial sectional
garage doors are sold through professional dealers and leading home
center retail chains throughout North America under the brands
Clopay, Ideal, and Holmes. Rolling steel door and grille products
designed for commercial, industrial, institutional, and retail use
are sold under the Cornell and Cookson brands.
For more information on Griffon and its operating subsidiaries,
please see the Company’s website at www.griffon.com.
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version on businesswire.com: https://www.businesswire.com/news/home/20230420005427/en/
Company: Brian G. Harris SVP &
Chief Financial Officer Griffon Corporation (212) 957-5000
Investor Relations: Michael
Callahan Managing Director ICR Inc. (203) 682-8311
Griffon (NYSE:GFF)
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