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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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Silver Spring Networks, Inc. (NYSE: SSNI) extended its Internet of Things technology platform with performance enhancements to Gen5 – its fifth generation critical infrastructure networking platform. Already delivering nearly 23 million devices on five continents as one of the leading networking providers in the market, Silver Spring announced it is doubling the maximum speed of its Gen5 network to up to 2.4 Mbps, increasing computational performance by 10x, supporting simultaneous mesh communic...
The cloud promises new levels of agility and cost-savings for Big Data, data warehousing and analytics. But it’s challenging to understand all the options – from IaaS and PaaS to newer services like HaaS (Hadoop as a Service) and BDaaS (Big Data as a Service). In her session at @BigDataExpo at @ThingsExpo, Hannah Smalltree, a director at Cazena, will provide an educational overview of emerging “as-a-service” options for Big Data in the cloud. This is critical background for IT and data profes...
Eighty percent of a data scientist’s time is spent gathering and cleaning up data, and 80% of all data is unstructured and almost never analyzed. Cognitive computing, in combination with Big Data, is changing the equation by creating data reservoirs and using natural language processing to enable analysis of unstructured data sources. This is impacting every aspect of the analytics profession from how data is mined (and by whom) to how it is delivered. This is not some futuristic vision: it's ha...
With the Apple Watch making its way onto wrists all over the world, it’s only a matter of time before it becomes a staple in the workplace. In fact, Forrester reported that 68 percent of technology and business decision-makers characterize wearables as a top priority for 2015. Recognizing their business value early on, FinancialForce.com was the first to bring ERP to wearables, helping streamline communication across front and back office functions. In his session at @ThingsExpo, Kevin Roberts...
Cognitive Computing is becoming the foundation for a new generation of solutions that have the potential to transform business. Unlike traditional approaches to building solutions, a cognitive computing approach allows the data to help determine the way applications are designed. This contrasts with conventional software development that begins with defining logic based on the current way a business operates. In her session at 18th Cloud Expo, Judith S. Hurwitz, President and CEO of Hurwitz & ...
One of the bewildering things about DevOps is integrating the massive toolchain including the dozens of new tools that seem to crop up every year. Part of DevOps is Continuous Delivery and having a complex toolchain can add additional integration and setup to your developer environment. In his session at @DevOpsSummit at 18th Cloud Expo, Miko Matsumura, Chief Marketing Officer of Gradle Inc., will discuss which tools to use in a developer stack, how to provision the toolchain to minimize onboa...
With an estimated 50 billion devices connected to the Internet by 2020, several industries will begin to expand their capabilities for retaining end point data at the edge to better utilize the range of data types and sheer volume of M2M data generated by the Internet of Things. In his session at @ThingsExpo, Don DeLoach, CEO and President of Infobright, will discuss the infrastructures businesses will need to implement to handle this explosion of data by providing specific use cases for filte...
SYS-CON Events announced today that Pythian, a global IT services company specializing in helping companies adopt disruptive technologies to optimize revenue-generating systems, has been named “Bronze Sponsor” of SYS-CON's 18th Cloud Expo, which will take place on June 7-9, 2015 at the Javits Center in New York, New York. Founded in 1997, Pythian is a global IT services company that helps companies compete by adopting disruptive technologies such as cloud, Big Data, advanced analytics, and DevO...
SYS-CON Events announced today that Avere Systems, a leading provider of enterprise storage for the hybrid cloud, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. Avere delivers a more modern architectural approach to storage that doesn’t require the overprovisioning of storage capacity to achieve performance, overspending on expensive storage media for inactive data or the overbuilding of data centers ...
SYS-CON Events announced today that Commvault, a global leader in enterprise data protection and information management, has been named “Bronze Sponsor” of SYS-CON's 18th International Cloud Expo, which will take place on June 7–9, 2016, at the Javits Center in New York City, NY, and the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Commvault is a leading provider of data protection and information management...
The Quantified Economy represents the total global addressable market (TAM) for IoT that, according to a recent IDC report, will grow to an unprecedented $1.3 trillion by 2019. With this the third wave of the Internet-global proliferation of connected devices, appliances and sensors is poised to take off in 2016. In his session at @ThingsExpo, David McLauchlan, CEO and co-founder of Buddy Platform, will discuss how the ability to access and analyze the massive volume of streaming data from mil...
SYS-CON Events announced today that Alert Logic, Inc., the leading provider of Security-as-a-Service solutions for the cloud, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. Alert Logic, Inc., provides Security-as-a-Service for on-premises, cloud, and hybrid infrastructures, delivering deep security insight and continuous protection for customers at a lower cost than traditional security solutions. Ful...
SYS-CON Events announced today that Interoute, owner-operator of one of Europe's largest networks and a global cloud services platform, has been named “Bronze Sponsor” of SYS-CON's 18th Cloud Expo, which will take place on June 7-9, 2015 at the Javits Center in New York, New York. Interoute is the owner-operator of one of Europe's largest networks and a global cloud services platform which encompasses 12 data centers, 14 virtual data centers and 31 colocation centers, with connections to 195 ad...
SYS-CON Events announced today that Men & Mice, the leading global provider of DNS, DHCP and IP address management overlay solutions, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. The Men & Mice Suite overlay solution is already known for its powerful application in heterogeneous operating environments, enabling enterprises to scale without fuss. Building on a solid range of diverse platform support,...
WebSocket is effectively a persistent and fat pipe that is compatible with a standard web infrastructure; a "TCP for the Web." If you think of WebSocket in this light, there are other more hugely interesting applications of WebSocket than just simply sending data to a browser. In his session at 18th Cloud Expo, Frank Greco, Director of Technology for Kaazing Corporation, will compare other modern web connectivity methods such as HTTP/2, HTTP Streaming, Server-Sent Events and new W3C event APIs ...
Fortunately, meaningful and tangible business cases for IoT are plentiful in a broad array of industries and vertical markets. These range from simple warranty cost reduction for capital intensive assets, to minimizing downtime for vital business tools, to creating feedback loops improving product design, to improving and enhancing enterprise customer experiences. All of these business cases, which will be briefly explored in this session, hinge on cost effectively extracting relevant data from ...
There will be new vendors providing applications, middleware, and connected devices to support the thriving IoT ecosystem. This essentially means that electronic device manufacturers will also be in the software business. Many will be new to building embedded software or robust software. This creates an increased importance on software quality, particularly within the Industrial Internet of Things where business-critical applications are becoming dependent on products controlled by software. Qua...
SYS-CON Events announced today that iDevices®, the preeminent brand in the connected home industry, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. iDevices, the preeminent brand in the connected home industry, has a growing line of HomeKit-enabled products available at the largest retailers worldwide. Through the “Designed with iDevices” co-development program and its custom-built IoT Cloud Infrastruc...
Companies can harness IoT and predictive analytics to sustain business continuity; predict and manage site performance during emergencies; minimize expensive reactive maintenance; and forecast equipment and maintenance budgets and expenditures. Providing cost-effective, uninterrupted service is challenging, particularly for organizations with geographically dispersed operations.
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