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Griffon Corporation Announces Fourth Quarter and Annual Results

Griffon Corporation (NYSE: GFF) today reported results for the fourth quarter and fiscal year ended September 30, 2012.

Ron Kramer, Chief Executive Officer, commented “Fourth quarter results were in-line with our expectations and underscore how well each of our businesses are operating in this challenging global economic environment. Specifically, Telephonics had another strong quarter benefiting in part from a more favorable product mix, achieving record-level profitability for the year. Clopay Plastics (“Plastics”) continued to show ongoing improvement from the initiatives undertaken to address manufacturing inefficiencies arising from our capacity expansions in Germany and Brazil. Home & Building Products (“HBP”), benefited from our doors business, but customer build up of snow tool inventory resulting from last year’s unusually warm winter contributed to lower sales at Ames in the quarter.”

Fourth quarter revenue totaled $447 million, decreasing 8% compared to the 2011 quarter. HBP, Telephonics and Plastics revenue decreased 5%, 13% and 6%, respectively, compared to the prior year quarter.

For the current quarter, Segment adjusted EBITDA totaled $37.2 million, decreasing 10% compared to $41.5 million in the prior year quarter. Segment adjusted EBITDA is defined as net income, excluding corporate overhead, interest, taxes, depreciation and amortization, acquisition-related expenses including the impact from the fair value of inventory acquired as part of a business combination, restructuring charges and the gain (loss) from debt extinguishment, as applicable.

Fourth quarter net income totaled $3.4 million, or $0.06 per share, compared to $3.4 million, or $0.06 per share, in the prior year quarter. Fourth quarter 2012 results included restructuring and acquisition costs, net, of $2.1 million, or $0.04 per share, and net discrete tax benefits of $3.5 million, or $0.06 per share. Fourth quarter 2011 results included restructuring and acquisition costs, net, of $2.1 million, or $0.03 per share, and net discrete tax benefits of $1.3 million, or $0.02 per share. Current quarter adjusted net income was $2.0 million, or $0.04 per share, compared to $4.2 million, or $0.07 per share, in the prior year quarter.

For the full year 2012, revenue totaled $1.9 billion, increasing 2% compared to 2011, driven by HBP and Plastics, which increased 2% and 5%, respectively. Telephonics revenue decreased 3% compared to 2011 because of a decline in the Counter Remote Control Improvised Explosive Device Electronic Warfare 3.1 (“CREW 3.1”) program for which Telephonics serves as a contract manufacturer.

For the year ended September 30, 2012, Segment adjusted EBITDA totaled $171.0 million, increasing 3% compared to $165.6 million in the prior year.

For the year ended September 30, 2012, net income was $17.0 million, or $0.30 per share, compared to a net loss of $7.4 million, or $0.13 per share, in the prior year. Adjusted income for 2012 was $15.3 million, or $0.27 per share, compared to $19.9 million, or $0.34 per share, in the prior year. Results for 2012 included restructuring of $4.7 million ($3.0 million, net of tax, or $0.05 per share) and acquisition costs of $0.5 million ($0.3 million, net of tax, or $0.01 per share), as well as discrete tax benefits, net, of $5.1 million, or $0.09 per share. Full year 2011 results included a charge of $26.2 million ($16.8 million, net of tax, or $0.29 per share) resulting from the refinancing of Ames True Temper (“ATT”) acquisition-related debt; $15.2 million ($9.8 million, net of tax, or $0.17 per share) of cost of goods related to the sale of inventory recorded at fair value in connection with ATT acquisition accounting; $7.5 million ($4.9 million, net of tax, or $0.08 per share) of restructuring charges related to the consolidation of Clopay Building Product (“CBP”) facilities, and headcount reductions at Telephonics and ATT; $0.4 million ($0.3 million net of tax) of Southern Patio (“SP”) acquisition costs; and $4.6 million, or $0.08 per share, of net discrete tax benefits.

Mr. Kramer continued, “While we are prepared for economic conditions to remain challenging, our businesses are well-positioned for growth and improved profitability. We remain committed to driving shareholder value through a range of opportunities including organic improvement, a disciplined approach to capital investment and, in the longer term, our ongoing evaluation of additional strategic transactions.”

Segment Operating Results

Telephonics

Revenue in the current quarter decreased $18.1 million or 13% compared to the 2011 quarter. In the current and prior year quarters, revenue included $1.8 million and $11.3 million, respectively, related to the CREW 3.1 program. Excluding CREW 3.1 from both quarters, revenue decreased 7% from the prior year quarter primarily due to timing of Mobile Surveillance Capability and Integrated Fix Tower awards for follow-on production, and timing of awards for Ground Surveillance radars and Firescout, partially offset by LAMPS MMR.

Segment adjusted EBITDA in the 2012 quarter was $13.7 million, increasing 2% from the prior year quarter, mainly driven by higher gross profit from a combination of favorable program mix and manufacturing efficiencies, and lower selling, general and administrative expenses related to the timing of proposal and research and development activities. Operating results also benefited from cost reductions resulting from the voluntary early retirement plan undertaken in the prior year and other restructuring activities implemented earlier this year.

Revenue in 2012 decreased $13.9 million or 3% compared to the prior year. In the current and prior year, revenue included $24.1 million and $44.3 million, respectively, related to the CREW 3.1 program. Excluding CREW 3.1 from both years, revenue increased 2% over the prior year primarily attributable to LAMPS MMR.

Segment adjusted EBITDA for the full year 2012 totaled $60.6 million, increasing 19% over the prior year, mainly driven by higher gross profit from a combination of favorable program mix and manufacturing efficiencies, partially offset by higher selling, general and administrative expenses primarily due to the timing of proposal and research and development activities. Operating results also benefited from cost reductions resulting from the voluntary early retirement plan undertaken in the prior year and other restructuring activities implemented earlier this year.

Contract backlog totaled a record $451 million at September 30, 2012 compared to $417 million at September 30, 2011, with approximately 70% expected to be filled within the next twelve months.

Plastic Products

Revenue in the current quarter decreased $8.8 million, or 6%, compared to the 2011 quarter; a volume increase of 3% and a 1% benefit from favorable mix were more than offset by the 9% unfavorable impact of translation of European and Brazilian revenue into a stronger U.S. dollar. Selling price adjustments due to resin fluctuations reduced revenue by 1% in the quarter; Plastics adjusts customer selling prices, based on underlying resin costs, on a delayed basis.

Segment adjusted EBITDA in the 2012 quarter increased $2.0 million, or 19%, compared to the prior year quarter, primarily driven by the improved volume, favorable mix and continued efficiency improvements on past capital initiatives, partially offset by a 3% unfavorable impact of foreign exchange as well as the impact of somewhat higher selling, general and administrative expenses. The impact of resin was not material in the quarter.

Revenue in 2012 increased $27.4 million, or 5%, compared to 2011, driven by a 10% increase in volume. The benefit of the volume growth was partially offset by a 5% unfavorable impact of translation of European and Brazilian revenue into a stronger U.S. dollar. Selling price adjustments due to resin fluctuations did not have a significant impact on 2012 revenue.

Segment adjusted EBITDA in 2012 increased $2.4 million, or 6%, compared to the prior year, primarily driven by the higher volume, a $3.7 million favorable resin impact and efficiency improvement on past capital initiatives, partially offset by a 2% unfavorable impact of foreign exchange, product mix and the impact of somewhat higher selling, general and administrative expenses.

Home & Building Products

Fourth quarter revenue decreased $10.6 million, or 5%, compared to the prior year quarter. ATT revenue decreased 12% primarily due to lower snow tool sales. Typically, ATT has strong snow tool sales in the last fiscal quarter as customers build inventory in anticipation of the coming snow season; however, excess snow tool inventory remaining at customers following the record warm weather of the 2011-2012 winter substantially reduced such sales. The snow tool impact was partially offset by the inclusion of SP. CBP revenue decreased 1% mainly due to volume, partially offset by favorable mix.

Segment adjusted EBITDA in the 2012 quarter decreased $6.4 million, or 37%, compared to the prior year quarter. The decrease was driven by the lower snow volume that also affected ATT plant absorption of manufacturing expenses in the quarter. The ATT decline was partially offset by CBP favorable product mix as well as CBP manufacturing efficiencies, and lower warehouse and distribution costs.

Revenue in 2012 increased $16.8 million, or 2%, compared to the prior year. ATT revenue was flat with the prior year, mainly because of weak snow tool sales, driven by the absence of snow throughout much of the country during the 2011-2012 winter, substantially offset by the inclusion of SP, acquired in October 2011. CBP revenue increased 4% due to a combination of favorable mix and higher volume.

Segment adjusted EBITDA in 2012 decreased $6.7 million, or 9%, compared to the prior year, driven mainly by the decline in snow volume at ATT; the ATT volume decline was partially offset by the inclusion of SP as well as improved CBP profitability driven by increased volume, favorable mix, and lower warehouse and distribution costs.

Taxes

Griffon’s effective tax rate for 2012 was 22.5% compared to a benefit of 48.2% in 2011. The 2012 rate reflected net discrete benefits of $5.1 million primarily from the release of previously established reserves for uncertain tax positions on conclusion of various tax audits, and benefits related to various tax planning initiatives. The 2011 rate reflected net discrete benefits of $4.6 million primarily from tax planning related to unremitted foreign earnings. Excluding discrete tax items, the 2012 rate would have been 45.8%, and the 2011 benefit would have been 16.4%. In both years, the effective rates reflect the impact of permanent differences not deductible in determining taxable income, mainly limited deductibility of restricted stock, as well as the impact of tax reserves and changes in earnings mix between domestic and non-domestic operations.

Restructuring

In 2012 and 2011, respectively, Telephonics recognized $3.8 and $3.0 million of restructuring charges in connection with two discrete voluntary early retirement plans and other restructuring costs related to changes in its organizational structure; such charges were personnel-related, reducing headcount by 185 employees.

In both 2012 and 2011, ATT recognized $0.9 million in restructuring costs primarily related to termination benefits, reducing headcount by 38 employees.

The consolidation of the CBP manufacturing facilities plan, announced in June 2009, was completed in 2011. In completing the consolidation plan, CBP incurred total pre-tax exit and restructuring costs of $9.0 million, substantially all of which were cash charges, and had $10.4 million of related capital expenditures. The restructuring costs were $3.6 million in 2011, $4.2 million in 2010 and $1.2 million in 2009.

Balance Sheet and Capital Expenditures

At September 30, 2012, the Company had cash and equivalents of $210 million, total debt outstanding of $700 million, net of discounts, and $178 million available for borrowing under its revolving credit facility. Capital expenditures were $68.9 million in 2012. The Company expects capital spending of $60 to $65 million for 2013.

Stock Repurchases

During 2012, the Company purchased 1.2 million shares of its common stock under an authorized stock repurchase plan, for $10.4 million, of which 486,000 shares were purchased in the fourth quarter, for $4.7 million. At September 30, 2012, the Company had a remaining authorization of $38.3 million. During 2011, the Company’s Employee Stock Ownership Plan purchased 1.9 million shares for a total of $20.0 million and the Company purchased 1.5 million shares for a total of $12.4 million under authorized repurchase plans.

Conference Call Information

The Company will hold a conference call today, November 13, 2012, at 4:30 PM ET.

The call can be accessed by dialing 1-800-231-9012 (U.S. participants) or 1-719-457-2619 (International participants). Callers should ask to be connected to the Griffon Corporation teleconference.

A replay of the call will be available starting on November 13, 2012 at 7:30 PM ET by dialing 1-877-870-5176 (U.S.) or 1-858-384-5517 (International), and entering the conference ID number: 4942707. The replay will be available through November 27, 2012.

Forward-looking Statements

“Safe Harbor” Statements under the Private Securities Litigation Reform Act of 1995: All statements related to, among other things, income, earnings, cash flows, revenue, changes in operations, operating improvements, 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: current economic conditions and uncertainties in the housing, credit and capital markets; the Company’s ability to achieve expected savings from cost control, integration and disposal initiatives; the ability to identify and successfully consummate and integrate value-adding acquisition opportunities; 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; reduced military spending by the government on projects for which Telephonics Corporation supplied products; increases in the cost of raw materials such as resin and steel; changes in customer demand; 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 the Company’s credit ratings; changes in international economic conditions including 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 could impact margins and operating efficiencies; short-term capacity constraints or prolonged excess capacity; unforeseen developments in contingencies, such as litigation; unfavorable results of government agency contract audits of Telephonics Corporation, including as a result of sequestration which is currently scheduled to take effect in January 2013; 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 Griffon’s operating companies; and possible terrorist threats and actions and their impact on the global economy. 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. The Company 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 Corporation (the “Company” or “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 currently conducts its operations through three segments:

  • Home & Building Products consists of two companies, Ames True Temper, Inc. (“ATT”) and Clopay Building Products Company, Inc. (“CBP”):
    • ATT is a global provider of non-powered landscaping products that make work easier for homeowners and professionals.
    • CBP is a leading manufacturer and marketer of residential, commercial and industrial garage doors to professional installing dealers and major home center retail chains.
  • Telephonics Corporation designs, develops and manufactures high-technology, integrated information, communication and sensor system solutions for use in military and commercial markets worldwide.
  • Clopay Plastic Products Company, Inc. is an international leader in the development and production of embossed, laminated and printed specialty plastic films used in a variety of hygienic, health-care and industrial applications.

For more information on Griffon and its operating subsidiaries, please see the Company’s website at www.griffoncorp.com.

Griffon evaluates performance and allocates resources based on each segments’ operating results before interest income or expense, income taxes, depreciation and amortization, gain (loss) from debt extinguishment, unallocated amounts, restructuring charges and acquisition-related expenses including the impact from the fair value of inventory acquired as part of a business combination (“Segment Adjusted EBITDA”). Griffon believes this information is useful to investors.

The following table provides a reconciliation of Segment Adjusted EBITDA to Income (loss) before taxes:

               
GRIFFON CORPORATION AND SUBSIDIARIES
OPERATING HIGHLIGHTS
(in thousands)
 
(Unaudited)
For the Three Months Ended For the Years Ended
September 30, September 30,
2012 2011   2012     2011  
REVENUE
Home & Building Products:
ATT $ 71,492 $ 80,804 $ 433,866 $ 434,789
CBP   112,849     114,107     422,674     404,947  
Home & Building Products 184,341 194,911 856,540 839,736
Telephonics 121,882 140,019 441,503 455,353
Plastics   141,213     150,059     563,102     535,713  
Total consolidated net sales $ 447,436   $ 484,989   $ 1,861,145   $ 1,830,802  
 
Segment profit:
Segment profit before depreciation, amortization, restructuring, fair value write-up of acquired inventory sold and acquisition costs:
Home & Building Products $ 11,033 $ 17,479 $ 70,467 $ 77,119
Telephonics 13,653 13,418 60,565 50,875
Plastics   12,538     10,574     40,000     37,639  
Total Segment profit before depreciation, amortization, restructuring, fair value write-up of acquired inventory sold and acquisition costs 37,224 41,471 171,032 165,633
Unallocated amounts (6,305 ) (3,400 ) (26,346 ) (22,868 )
Loss from debt extinguishment, net - - - (26,164 )
Net interest expense (12,940 ) (12,609 ) (51,715 ) (47,448 )
Segment depreciation and amortization (17,491 ) (15,544 ) (65,864 ) (60,361 )
Restructuring charges (2,894 ) (2,820 ) (4,689 ) (7,543 )
Fair value write-up of acquired inventory sold - - - (15,152 )
Acquisition costs   (299 )   (446 )   (477 )   (446 )
Income (loss) before taxes $ (2,705 ) $ 6,652   $ 21,941   $ (14,349 )
 
Unallocated amounts typically include general corporate expenses not attributable to a reportable segment.
 

The following is a reconciliation of each segment’s operating results to Segment Adjusted EBITDA:

               
GRIFFON CORPORATION AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP MEASURES
BY REPORTABLE SEGMENT
Unaudited
 
Three Months Ended
September 30, Years Ended September 30,
2012 2011 2012 2011
 
Home & Building Products
Segment operating profit $ 1,670 $ 9,408 $ 37,082 $ 28,228
Depreciation and amortization 8,463 7,248 32,034 28,796
Fair value write-up of acquired inventory sold - - - 15,152
Restructuring charges 601 377 874 4,497
Acquisition costs   299   446   477   446
Segment adjusted EBITDA 11,033 17,479 70,467 77,119
 
Telephonics
Segment operating profit 9,061 8,952 49,232 40,595
Depreciation and amortization 2,299 2,023 7,518 7,234
Restructuring charges   2,293   2,443   3,815   3,046
Segment adjusted EBITDA 13,653 13,418 60,565 50,875
 
Clopay Plastic Products
Segment operating profit 5,809 4,301 13,688 13,308
Depreciation and amortization   6,729   6,273   26,312   24,331
Segment adjusted EBITDA 12,538 10,574 40,000 37,639
 
All segments:
Income from operations - as reported 9,722 18,955 72,420 55,549
Unallocated amounts 6,305 3,400 26,346 22,868
Other, net   513   306   1,236   3,714
Segment operating profit 16,540 22,661 100,002 82,131
Depreciation and amortization 17,491 15,544 65,864 60,361
Fair value write-up of acquired inventory sold - - - 15,152
Restructuring charges 2,894 2,820 4,689 7,543
Acquisition costs   299   446   477   446
Segment adjusted EBITDA $ 37,224 $ 41,471 $ 171,032 $ 165,633
 
 
GRIFFON CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
               
(Unaudited)
Three Months Ended September 30, Years Ended September 30,
  2012     2011     2012     2011  
Revenue $ 447,436 $ 484,989 $ 1,861,145 $ 1,830,802
Cost of goods and services   349,785     379,699     1,442,340     1,437,341  
Gross profit 97,651 105,290 418,805 393,461
 
Selling, general and administrative expenses 85,035 83,515 341,696 330,369
Restructuring and other related charges   2,894     2,820     4,689     7,543  
Total operating expenses   87,929     86,335     346,385     337,912  
 
Income from operations 9,722 18,955 72,420 55,549
 
Other income (expense)
Interest expense (13,007 ) (12,735 ) (52,007 ) (47,846 )
Interest income 67 126 292 398
Loss from debt extinguishment, net - - - (26,164 )
Other, net   513     306     1,236     3,714  
Total other income (expense)   (12,427 )   (12,303 )   (50,479 )   (69,898 )
 
Income (loss) before taxes (2,705 ) 6,652 21,941 (14,349 )
Provision (benefit) for income taxes   (6,153 )   3,274     4,930     (6,918 )
Net Income (loss) $ 3,448   $ 3,378   $ 17,011   $ (7,431 )
 
 
Basic earnings (loss) per common share $ 0.06   $ 0.06   $ 0.30   $ (0.13 )
 
Weighted-average shares outstanding   55,560     57,516     55,914     58,919  
 
 
Diluted earnings (loss) per common share $ 0.06   $ 0.06   $ 0.30   $ (0.13 )
 
Weighted-average shares outstanding   57,374     58,284     57,329     58,919  
 
 
GRIFFON CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands)
         
 
At September 30, At September 30,
2012 2011
 
CURRENT ASSETS
Cash and equivalents $ 209,654 $ 243,029
Accounts receivable, net of allowances of $5,433 and $6,072 239,857 267,471
Contract costs and recognized income not yet billed,

net of progress payments of $3,748 and $9,697

70,777 74,737
Inventories, net 257,868 263,809
Prepaid and other current assets 47,472 48,828
Assets of discontinued operations   587   1,381
Total Current Assets 826,215 899,255
PROPERTY, PLANT AND EQUIPMENT, net 356,879 350,050
GOODWILL 358,372 357,888
INTANGIBLE ASSETS, net 230,473 223,189
OTHER ASSETS 31,317 31,197
ASSETS OF DISCONTINUED OPERATIONS   2,936   3,675
Total Assets $ 1,806,192 $ 1,865,254
 
CURRENT LIABILITIES

 

 

Notes payable and current portion of long-term debt

$ 17,703 $ 25,164

Accounts payable

141,704 186,290

Accrued liabilities

110,337 99,631

Liabilities of discontinued operations

  3,639   3,794

Total Current Liabilities

273,383 314,879
LONG-TERM DEBT, net of debt discount of $16,607 and $19,693 681,907 688,247
OTHER LIABILITIES 193,107 204,434
LIABILITIES OF DISCONTINUED OPERATIONS   3,643   5,786

Total Liabilities

1,152,040 1,213,346

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' EQUITY
Total Shareholders' Equity   654,152   651,908

Total Liabilities and Shareholders' Equity

$ 1,806,192 $ 1,865,254
 
   
GRIFFON CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
     
Years Ended September 30,
  2012     2011  
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 17,011 $ (7,431 )
 
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Income from discontinued operations - -
Depreciation and amortization 66,264 60,712
Fair value write-up of acquired inventory sold - 15,152
Stock-based compensation 10,439 8,956
Provision for losses on accounts receivable 1,212 1,225
Amortization/write-off of deferred financing costs and debt discounts 6,023 6,733
Loss from debt extinguishment, net - 26,164
Deferred income taxes (2,627 ) (2,749 )
(Gain) loss on sale/disposal of assets 56 (251 )
Change in assets and liabilities, net of assets and liabilities acquired:
(Increase) decrease in accounts receivable and contract costs
and recognized income not yet billed 27,269 (30,593 )
(Increase) decrease in inventories 9,011 (12,803 )
Increase in prepaid and other assets (3,281 ) 9,065
Decrease in accounts payable, accrued liabilities
and income taxes payable (46,368 ) (42,604 )
Other changes, net   5,121     3,809  
Net cash provided by operating activities 90,130 35,385
 
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property, plant and equipment (68,851 ) (87,617 )
Acquired business, net of cash acquired (22,432 ) (855 )
Change in funds restricted for capital projects - 4,629
Proceeds from sale of assets   309     1,510  
Net cash used in investing activities (90,974 ) (82,333 )
 
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock - -
Dividends paid (4,743 ) -
Purchase of shares for treasury (10,382 ) (18,139 )
Proceeds from issuance of long-term debt 4,000 674,251
Payments of long-term debt (18,546 ) (498,572 )
Change in short-term borrowings (1,859 ) 3,538
Financing costs (97 ) (21,653 )
Purchase of ESOP shares - (19,973 )
Exercise of stock options - 2,306
Tax effect from exercise/vesting of equity awards, net 834 7
Other, net   100     345  
Net cash provided by (used in) financing activities (30,693 ) 122,110
 
CASH FLOWS FROM DISCONTINUED OPERATIONS:
Net cash used in operating activities   (2,801 )   (962 )
Net cash used in discontinued operations (2,801 ) (962 )
 
Effect of exchange rate changes on cash and equivalents   963     (973 )
 
NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS (33,375 ) 73,227
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD   243,029     169,802  
CASH AND EQUIVALENTS AT END OF PERIOD $ 209,654   $ 243,029  
 

Griffon evaluates performance based on Earnings per share and Net income (loss) excluding restructuring charges, gain (loss) from debt extinguishment, discrete tax items and acquisition-related expenses including the impact from the fair value of inventory acquired as part of a business combination. Griffon believes this information is useful to investors. The following table provides a reconciliation of Earnings (loss) per share and Net income (loss) to Adjusted earnings per share and Adjusted net income:

       
GRIFFON CORPORATION AND SUBSIDIARIES
RECONCILIATION OF INCOME (LOSS) TO ADJUSTED INCOME (LOSS)
(Unaudited)
         
For the Three Months For the Years Ended
Ended September 30, September 30,
  2012     2011     2012     2011  
 
Net income (loss) $ 3,448 $ 3,378 $ 17,011 $ (7,431 )
 
Adjusting items, net of tax:
Loss from debt extinguishment, net - - - 16,813
Fair value write-up of acquired inventory sold - - - 9,849
Restructuring and related 1,881 1,833 3,048 4,903
Acquisition costs 194 290 310 290
Discrete tax benefits   (3,484 )   (1,252 )   (5,110 )   (4,570 )
 
Adjusted net income $ 2,039   $ 4,249   $ 15,259   $ 19,854  
 
Earnings (loss) per common share $ 0.06 $ 0.06 $ 0.30 $ (0.13 )
 
Adjusting items, net of tax:
Loss from debt extinguishment, net - - - 0.29
Fair value write-up of acquired inventory sold - - - 0.17
Restructuring 0.03 0.03 0.05 0.08
Acquisition costs 0.00 0.00 0.01 0.00
Discrete tax benefits (0.06 ) (0.02 ) (0.09 ) (0.08 )
 
Adjusted earnings per share $ 0.04   $ 0.07   $ 0.27   $ 0.34  
 
Weighted-average shares outstanding (in thousands)   57,374     58,284     57,329     58,919  

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Cultural, regulatory, environmental, political and economic (CREPE) conditions over the past decade are creating cross-industry solution spaces that require processes and technologies from both the Internet of Things (IoT), and Data Management and Analytics (DMA). These solution spaces are evolving into Sensor Analytics Ecosystems (SAE) that represent significant new opportunities for organizations of all types. Public Utilities throughout the world, providing electricity, natural gas and water, are pursuing SmartGrid initiatives that represent one of the more mature examples of SAE. We have s...
The Internet of Things will put IT to its ultimate test by creating infinite new opportunities to digitize products and services, generate and analyze new data to improve customer satisfaction, and discover new ways to gain a competitive advantage across nearly every industry. In order to help corporate business units to capitalize on the rapidly evolving IoT opportunities, IT must stand up to a new set of challenges. In his session at @ThingsExpo, Jeff Kaplan, Managing Director of THINKstrategies, will examine why IT must finally fulfill its role in support of its SBUs or face a new round of...
The true value of the Internet of Things (IoT) lies not just in the data, but through the services that protect the data, perform the analysis and present findings in a usable way. With many IoT elements rooted in traditional IT components, Big Data and IoT isn’t just a play for enterprise. In fact, the IoT presents SMBs with the prospect of launching entirely new activities and exploring innovative areas. CompTIA research identifies several areas where IoT is expected to have the greatest impact.
Can call centers hang up the phones for good? Intuitive Solutions did. WebRTC enabled this contact center provider to eliminate antiquated telephony and desktop phone infrastructure with a pure web-based solution, allowing them to expand beyond brick-and-mortar confines to a home-based agent model. It also ensured scalability and better service for customers, including MUY! Companies, one of the country's largest franchise restaurant companies with 232 Pizza Hut locations. This is one example of WebRTC adoption today, but the potential is limitless when powered by IoT.
One of the biggest challenges when developing connected devices is identifying user value and delivering it through successful user experiences. In his session at Internet of @ThingsExpo, Mike Kuniavsky, Principal Scientist, Innovation Services at PARC, described an IoT-specific approach to user experience design that combines approaches from interaction design, industrial design and service design to create experiences that go beyond simple connected gadgets to create lasting, multi-device experiences grounded in people's real needs and desires.
The Internet of Things will greatly expand the opportunities for data collection and new business models driven off of that data. In her session at @ThingsExpo, Esmeralda Swartz, CMO of MetraTech, discussed how for this to be effective you not only need to have infrastructure and operational models capable of utilizing this new phenomenon, but increasingly service providers will need to convince a skeptical public to participate. Get ready to show them the money!
SYS-CON Events announced today that MetraTech, now part of Ericsson, has been named “Silver Sponsor” of SYS-CON's 16th International Cloud Expo®, which will take place on June 9–11, 2015, at the Javits Center in New York, NY. Ericsson is the driving force behind the Networked Society- a world leader in communications infrastructure, software and services. Some 40% of the world’s mobile traffic runs through networks Ericsson has supplied, serving more than 2.5 billion subscribers.
The Internet of Things is not only adding billions of sensors and billions of terabytes to the Internet. It is also forcing a fundamental change in the way we envision Information Technology. For the first time, more data is being created by devices at the edge of the Internet rather than from centralized systems. What does this mean for today's IT professional? In this Power Panel at @ThingsExpo, moderated by Conference Chair Roger Strukhoff, panelists will addresses this very serious issue of profound change in the industry.
SYS-CON Events announced today that BMC will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. BMC delivers software solutions that help IT transform digital enterprises for the ultimate competitive business advantage. BMC has worked with thousands of leading companies to create and deliver powerful IT management services. From mainframe to cloud to mobile, BMC pairs high-speed digital innovation with robust IT industrialization – allowing customers to provide amazing user experiences with optimized IT per...
The Internet of Things is not new. Historically, smart businesses have used its basic concept of leveraging data to drive better decision making and have capitalized on those insights to realize additional revenue opportunities. So, what has changed to make the Internet of Things one of the hottest topics in tech? In his session at @ThingsExpo, Chris Gray, Director, Embedded and Internet of Things, discussed the underlying factors that are driving the economics of intelligent systems. Discover how hardware commoditization, the ubiquitous nature of connectivity, and the emergence of Big Data a...
SYS-CON Events announced today that O'Reilly Media has been named “Media Sponsor” of SYS-CON's 16th International Cloud Expo®, which will take place on June 9–11, 2015, at the Javits Center in New York City, NY. O'Reilly Media spreads the knowledge of innovators through its books, online services, magazines, and conferences. Since 1978, O'Reilly Media has been a chronicler and catalyst of cutting-edge development, homing in on the technology trends that really matter and spurring their adoption by amplifying "faint signals" from the alpha geeks who are creating the future. An active participa...
The world is at a tipping point where the technology, the device and global adoption are converging to such a point that we will see an explosion of a world where smartphone devices not only allow us to talk to each other, but allow for communication between everything – serving as a central hub from which we control our world – MediaTek is at the heart of both driving this and allowing the markets to drive this reality forward themselves. The next wave of consumer gadgets is here – smart, connected, and small. If your ambitions are big, so are ours. In his session at @ThingsExpo, Jack Hu, D...
The 4th International Internet of @ThingsExpo, co-located with the 17th International Cloud Expo - to be held November 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA - announces that its Call for Papers is open. The Internet of Things (IoT) is the biggest idea since the creation of the Worldwide Web more than 20 years ago.
SYS-CON Events announced today that DragonGlass, an enterprise search platform, will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. After eleven years of designing and building custom applications, OpenCrowd has launched DragonGlass, a cloud-based platform that enables the development of search-based applications. These are a new breed of applications that utilize a search index as their backbone for data retrieval. They can easily adapt to new data sets and provide access to both structured and unstruc...
We’re entering a new era of computing technology that many are calling the Internet of Things (IoT). Machine to machine, machine to infrastructure, machine to environment, the Internet of Everything, the Internet of Intelligent Things, intelligent systems – call it what you want, but it’s happening, and its potential is huge. IoT is comprised of smart machines interacting and communicating with other machines, objects, environments and infrastructures. As a result, huge volumes of data are being generated, and that data is being processed into useful actions that can “command and control” thi...
As the Internet of Things unfolds, mobile and wearable devices are blurring the line between physical and digital, integrating ever more closely with our interests, our routines, our daily lives. Contextual computing and smart, sensor-equipped spaces bring the potential to walk through a world that recognizes us and responds accordingly. We become continuous transmitters and receivers of data. In his session at @ThingsExpo, Andrew Bolwell, Director of Innovation for HP's Printing and Personal Systems Group, discussed how key attributes of mobile technology – touch input, sensors, social, and ...
All major researchers estimate there will be tens of billions devices - computers, smartphones, tablets, and sensors - connected to the Internet by 2020. This number will continue to grow at a rapid pace for the next several decades. With major technology companies and startups seriously embracing IoT strategies, now is the perfect time to attend @ThingsExpo, June 9-11, 2015, at the Javits Center in New York City. Learn what is going on, contribute to the discussions, and ensure that your enterprise is as "IoT-Ready" as it can be
WebRTC defines no default signaling protocol, causing fragmentation between WebRTC silos. SIP and XMPP provide possibilities, but come with considerable complexity and are not designed for use in a web environment. In his session at @ThingsExpo, Matthew Hodgson, technical co-founder of the Matrix.org, discussed how Matrix is a new non-profit Open Source Project that defines both a new HTTP-based standard for VoIP & IM signaling and provides reference implementations.
Buzzword alert: Microservices and IoT at a DevOps conference? What could possibly go wrong? In this Power Panel at DevOps Summit, moderated by Jason Bloomberg, the leading expert on architecting agility for the enterprise and president of Intellyx, panelists will peel away the buzz and discuss the important architectural principles behind implementing IoT solutions for the enterprise. As remote IoT devices and sensors become increasingly intelligent, they become part of our distributed cloud environment, and we must architect and code accordingly. At the very least, you'll have no problem fil...
Almost everyone sees the potential of Internet of Things but how can businesses truly unlock that potential. The key will be in the ability to discover business insight in the midst of an ocean of Big Data generated from billions of embedded devices via Systems of Discover. Businesses will also need to ensure that they can sustain that insight by leveraging the cloud for global reach, scale and elasticity.