Griffon Corporation Q2 FY2026 earnings call

• Announced strategic actions in February including forming a joint venture with ONCAP for Ames North America businesses, strategic review of Ames Australia and UK businesses. Continuing operations presented as single segment with Global AIMS as discontinued. - Clopay's innovation: Recognized for second year in a row at IBS, VertiStack Avante and C-Power enabled products. - Expect to close joint venture with ONCAP by end of June 2026, receive $100M cash and $161M notes, own 43% and have board representation. - Exited Ames UK business due to economic challenges. - Repurchased 33 million shares in second quarter, $247M remaining under authorization. Board authorized quarterly dividend of 22 cents per share.

Second quarter revenue was $422 million, a 1% year-over-year decrease, with a 6% volume reduction in residential partially offset by a 5% price and mix improvement. Adjusted EBITDA was $98 million, down 4% year-over-year. Profit for the quarter was $192 million with a 45.5% gross margin. Selling general and administrative expenses were $105 million, or 24.8% of revenue. DAP income from continuing operations was $47 million, or $1.03 per share. Year-to-date free cash flow from continuing operations was $101 million compared to $114 million in the prior year.

Maintaining fiscal 2026 guidance: Expect revenue of $1.8 billion on continuing operations, adjusted EBITDA $458 million, free cash flow from continuing operations to exceed income from continuing operations, capital expenditures $50 million, depreciation $27 million, amortization $15 million, interest expense $93 million (excluding joint venture interest income), normalized tax rate 28%.

Q: As we think about your fiscal second half, any changes to end market assumptions?

A: Expect second half quarters similar to recent, residential volume soft, commercial roughly flat, benefit from price and mix; Clopay had price increases effective end of March.

Q: Detail on pro forma cash generation profile?

A: Cash flow primarily from Clopay, slightly less than historical due to removed AIMS tools businesses, balance sheet impact from discontinued operations.

Q: Innovation pipeline and growth?

A: Clopay is leading brand, commercial business in development, core business repair and remodel driven.

Q: Impact of steel prices?

A: Generally a four- or five-month lag of purchase to cost realization.

Q: Price mix and mix improvement?

A: Quarter saw more price than mix benefit, innovation drives higher-end products.

Q: Capital allocation post-focus?

A: Continue share repurchases, deleveraging, M&A not on table.

Q: Hunter fan business?

A: Stable currently.

Q: HVP integration and joint venture interest income?

A: Leveraging Hunter commercial fan, $161M PIP notes with 10% interest rate.