Breaking Down Griffon Corporation (GFF) Financial Health: Key Insights for Investors

Are you an investor trying to understand the financial health of Griffon Corporation? Did you know that in fiscal year 2024, the company reported revenue of $2.6 billion and net income of $209.9 million, or $4.23 per share? With adjusted EBITDA at $513.6 million and free cash flow reaching $326.1 million, how does Griffon manage its debt of $1.52 billion and maintain a leverage ratio of 2.6x? Let's delve into the key financial insights that can help you make informed decisions.

Griffon Corporation (GFF) Revenue Analysis

Understanding Griffon Corporation's financial health begins with a detailed look at its revenue streams. A breakdown of where the company's money comes from provides key insights into its performance and stability.

Griffon Corporation operates through two main segments:

• Consumer and Professional Products (CPP): This segment focuses on manufacturing and marketing consumer and professional tools for home storage and organization, landscaping, and cleaning.
• Home and Building Products (HBP): This segment includes the manufacturing and distribution of windows, doors, and associated products for residential and commercial construction markets.

Analyzing the revenue contribution from each segment helps to understand Griffon's diversification and reliance on specific markets.

For the fiscal year 2024, Griffon reported net sales of $3.1 billion. Examining the year-over-year revenue growth rate reveals important trends. While specific growth rates can fluctuate due to market conditions and strategic decisions, understanding these historical trends is crucial for investors.

Here's a summarized illustrative breakdown of Griffon's revenue streams based on the segments:

Analyzing any significant changes in revenue streams is also crucial. This includes evaluating the impact of acquisitions, divestitures, or shifts in market demand on Griffon's overall revenue composition.

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Griffon Corporation (GFF) Profitability Metrics

Understanding Griffon Corporation's profitability is crucial for investors. Key metrics to consider include gross profit, operating profit, and net profit margins. These figures reveal how efficiently Griffon manages its costs and generates earnings.

As of February 12, 2025, Griffon Corp. reported strong profitability. Its trailing-twelve-month gross profit margin is at 41.04%, which is 30% higher than the industry average of 31.58%. The trailing-twelve-month EBIT margin stands at 17.48%, 68.9% higher than the industry average of 10.35%. The company's trailing-twelve-month net income margin is 9.13%, 40.4% higher than the sector average of 6.51%.

Here's a look at Griffon's profitability metrics compared to industry averages:

For the fiscal year 2025 first quarter that ended December 31, 2024, Griffon's total revenue was reported at $632.37 million, with a gross profit increase of 11.7% year-over-year to $264.28 million. The operating profit grew by 33.7% from the prior year's quarter to $112.09 million. Net income came in at $70.85 million, up 67.9% year-over-year, and the adjusted EPS was $1.39, reflecting a 29.9% increase from the same period last year. The adjusted EBITDA rose 12.7% year-ago value to $131.19 million.

Examining profitability trends over time provides valuable insights. Over the past three years, Griffon has shown consistent growth:

• Revenue grew at a CAGR of 4%.
• EBITDA rose at a CAGR of 30.9%.
• Operational income (EBIT) expanded at a CAGR of 36.8%.
• Net income and EPS grew at CAGRs of 51.2% and 56.1%, respectively.

The company's profitability has been improving, driven by effective cost management and global sourcing initiatives. S&P Global upgraded Griffon Corp's issuer credit rating from 'B+' to 'BB-' due to continued strong earnings and improved financial ratios. Additionally, Loop Capital Markets initiated coverage on Griffon with a Buy rating.

Operational efficiency is evident in Griffon's ability to maintain higher gross profit and EBITDA margins compared to the industry average.

Here's a summary of Griffon's key financial data:

For more insights, you can check out: Breaking Down Griffon Corporation (GFF) Financial Health: Key Insights for Investors

Griffon Corporation (GFF) Debt vs. Equity Structure

Understanding how Griffon Corporation (GFF) finances its operations and growth is crucial for investors. A key aspect of this involves analyzing the company's debt and equity structure. This analysis provides insights into the company's financial leverage, risk profile, and overall financial health.

As of the fiscal year 2024, Griffon Corporation's (GFF) debt levels include both long-term and short-term obligations. While specific figures fluctuate, it's essential to consider these components to assess the company's ability to meet its financial commitments. Key considerations include:

• Long-term debt: This represents debt due beyond one year, often used to fund significant capital expenditures or acquisitions.
• Short-term debt: This includes obligations due within one year, such as accounts payable, short-term loans, and the current portion of long-term debt.

The debt-to-equity ratio is a vital metric for evaluating Griffon Corporation's (GFF) financial leverage. This ratio compares the total debt to shareholders' equity, indicating the extent to which the company is using debt to finance its assets. A higher ratio suggests greater financial risk, as the company has a larger debt burden relative to its equity base.

Industry standards for debt-to-equity ratios vary, but comparing Griffon Corporation's (GFF) ratio to its peers provides valuable context. A ratio significantly above the industry average may raise concerns about the company's ability to manage its debt, while a ratio below average could indicate a more conservative financial approach.

Recent activities, such as debt issuances, credit ratings, or refinancing, can significantly impact Griffon Corporation's (GFF) debt profile. For instance:

• Debt issuances: New debt can provide capital for growth initiatives but also increase the company's debt burden.
• Credit ratings: Ratings from agencies like Standard & Poor's and Moody's reflect the company's creditworthiness and can influence borrowing costs.
• Refinancing: Replacing existing debt with new debt, potentially at a lower interest rate or with different terms, can improve cash flow and financial flexibility.

Griffon Corporation (GFF) strategically balances debt and equity financing to optimize its capital structure. Debt financing can offer tax advantages and potentially lower the cost of capital, while equity financing reduces financial risk and provides a cushion against downturns. The company's approach involves carefully weighing the benefits and risks of each financing method to achieve its financial goals.

Here is a hypothetical table illustrating how Griffon Corporation (GFF) manages its debt and equity:

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Griffon Corporation (GFF) Liquidity and Solvency

Liquidity and solvency are critical indicators of a company's financial health, revealing its ability to meet short-term obligations and sustain long-term operations. For Griffon Corporation (GFF), assessing these metrics provides valuable insights into its financial stability and risk profile.

Assessing Griffon Corporation's Liquidity:

Analyzing Griffon Corporation's liquidity involves examining key ratios and working capital trends to gauge its ability to cover its immediate liabilities.

• Current and Quick Ratios: These ratios measure a company's ability to pay off its short-term liabilities with its current assets. A higher ratio generally indicates better liquidity.
  • For the fiscal year 2024, Griffon Corporation reported a current ratio of 1.71, compared to 1.81 in 2023.
  • The quick ratio, which excludes inventory from current assets, was 1.02 in 2024, slightly lower than the 1.09 reported in 2023.
• Analysis of Working Capital Trends: Working capital, calculated as current assets minus current liabilities, reflects the company's operational liquidity. Monitoring its trend helps identify potential liquidity issues.

Cash Flow Statements Overview:

An overview of Griffon Corporation's cash flow statements provides insights into the company's ability to generate cash from its operating, investing, and financing activities.

• Operating Cash Flow: This indicates the cash a company generates from its normal business operations.
• Investing Cash Flow: This section reflects cash spent on investments, such as property, plant, and equipment (PP&E).
• Financing Cash Flow: This shows cash flow related to debt, equity, and dividends.

For the fiscal year 2024, Griffon Corporation's cash flow trends reveal the following:

• Net cash provided by operating activities was $231.4 million.
• Net cash used for investing activities totaled $48.6 million.
• Net cash used for financing activities amounted to $149.4 million.

Potential Liquidity Concerns or Strengths:

Based on the analyzed data, here's an overview of potential liquidity concerns and strengths for Griffon Corporation:

• Strengths:
  • A current ratio of 1.71 indicates a reasonable ability to cover short-term liabilities.
  • Positive cash flow from operating activities suggests the company can generate cash from its core business.
• Concerns:
  • The slight decrease in the current and quick ratios from 2023 to 2024 may warrant monitoring.

Here is a summary of Griffon Corporation's key financial ratios and figures:

Understanding Griffon Corporation's liquidity and solvency positions requires a comprehensive review of its financial statements and key ratios. This analysis helps investors and stakeholders assess the company's financial health and make informed decisions.

For more insights into Griffon Corporation's values, see: Mission Statement, Vision, & Core Values of Griffon Corporation (GFF).

Griffon Corporation (GFF) Valuation Analysis

Determining whether Griffon Corporation (GFF) is overvalued or undervalued requires a multifaceted approach, incorporating several key financial metrics and market indicators. These include price-to-earnings (P/E), price-to-book (P/B), and enterprise value-to-EBITDA (EV/EBITDA) ratios, stock price trends, dividend yield and payout ratios (if applicable), and analyst consensus.

As of April 20, 2025, it's crucial to analyze Griffon Corporation's (GFF) valuation ratios relative to its industry peers and historical averages. A high P/E ratio compared to its peers might suggest overvaluation, while a lower ratio could indicate undervaluation. Similarly, the P/B ratio helps investors understand if they are paying a premium for the company's net assets. The EV/EBITDA ratio provides insight into the company's overall value compared to its earnings before interest, taxes, depreciation, and amortization, offering a more comprehensive valuation measure that includes debt.

Analyzing Griffon Corporation’s (GFF) stock price trends over the last 12 months, or longer, provides context on market sentiment and investor confidence. A consistent upward trend may reflect positive market perception, while a downward trend could signal concerns about the company's performance or industry outlook. Significant price volatility can also influence valuation assessments.

For companies that pay dividends, the dividend yield and payout ratios are important valuation considerations. A higher dividend yield can make a stock more attractive to income-seeking investors, while the payout ratio indicates the sustainability of the dividend payments. Griffon Corporation’s (GFF) dividend policy, if applicable, should be evaluated in relation to its earnings and cash flow.

Analyst consensus on Griffon Corporation’s (GFF) stock valuation—categorized as buy, hold, or sell—represents the collective opinion of financial analysts who cover the company. These ratings are typically based on in-depth financial analysis, industry knowledge, and macroeconomic forecasts. Investors often consider analyst ratings as part of their overall valuation assessment.

To provide a more structured overview, consider the following table, which would ideally be populated with Griffon Corporation’s (GFF) current data as of the fiscal year 2024:

Furthermore, factors such as company-specific news, industry trends, and overall economic conditions can significantly impact Griffon Corporation’s (GFF) valuation. Keeping abreast of these developments is essential for making informed investment decisions.

To gain further insights into the company's strategic direction, see Mission Statement, Vision, & Core Values of Griffon Corporation (GFF).

Griffon Corporation (GFF) Risk Factors

Understanding the risks Griffon Corporation faces is crucial for investors. These risks can stem from both internal and external factors, impacting the company's financial stability and future performance. Here’s a breakdown of key areas to consider:

Industry Competition: Griffon operates in industries characterized by intense competition. This includes competition in terms of product offerings, pricing, and distribution channels. Increased competition could lead to reduced profit margins and loss of market share.

Regulatory Changes: Changes in laws and regulations, both in the United States and internationally, can significantly affect Griffon's operations. These changes might relate to environmental standards, trade policies, or safety regulations, potentially increasing compliance costs and limiting business activities.

Market Conditions: Economic downturns, fluctuations in raw material prices, and shifts in consumer demand can all impact Griffon's financial health. For example, a decrease in construction activity could negatively affect demand for the company's building products.

Operational Risks: Disruptions in the supply chain, production inefficiencies, or quality control issues can lead to increased costs and decreased revenues. These operational challenges can arise from various sources, including natural disasters, labor disputes, or equipment failures.

Financial Risks: Griffon's financial health is subject to risks associated with debt levels, interest rate fluctuations, and access to capital markets. High debt levels can increase vulnerability to economic downturns and limit the company's ability to invest in growth opportunities. Based on the latest 10-K filing, the company's total debt was approximately $1.3 billion as of September 30, 2024.

Strategic Risks: Strategic risks involve decisions related to acquisitions, divestitures, and capital allocation. Poorly executed acquisitions or unsuccessful expansion into new markets can lead to financial losses and damage to the company's reputation.

Mitigation Strategies: Griffon employs various strategies to mitigate these risks. These include:

• Diversifying product offerings and end markets to reduce dependence on any single sector.
• Implementing cost-control measures to improve efficiency and protect profit margins.
• Maintaining strong relationships with suppliers to ensure a stable supply chain.
• Investing in research and development to innovate and stay ahead of the competition.
• Closely monitoring regulatory developments and adapting business practices accordingly.

For instance, in response to market volatility, Griffon has focused on improving operational efficiency and reducing costs. They have also strategically divested certain businesses to streamline operations and focus on core areas.

Here is a summary of key risk areas for Griffon Corporation:

Understanding these risks and the company's strategies to mitigate them is essential for making informed investment decisions. For a deeper dive into Griffon Corporation's financial health, check out: Breaking Down Griffon Corporation (GFF) Financial Health: Key Insights for Investors.

Griffon Corporation (GFF) Growth Opportunities

Griffon Corporation's future growth prospects are multifaceted, driven by strategic initiatives, market dynamics, and competitive positioning. A comprehensive analysis reveals several key factors influencing its potential trajectory.

Key growth drivers for Griffon Corporation (GFF) include:

• Product Innovations: Continuous development and introduction of new and improved products across its segments.
• Market Expansion: Extending its reach into new geographic regions and customer segments.
• Acquisitions: Strategic acquisitions to expand its product portfolio, market share, and technological capabilities.

Future revenue growth projections and earnings estimates vary depending on market conditions and the company's execution of its strategic plans. Factors influencing these projections include:

• Economic Growth: Overall economic conditions and their impact on demand for Griffon's products and services.
• Industry Trends: Developments in the industries in which Griffon operates, such as home and building products and consumer and professional products.
• Operational Efficiency: The company's ability to improve efficiency, reduce costs, and enhance profitability.

Strategic initiatives and partnerships that may drive future growth include:

• Strategic Alliances: Collaborations with other companies to leverage complementary strengths and expand market reach.
• New Product Development: Investing in research and development to create innovative products that meet evolving customer needs.
• Operational Excellence Programs: Initiatives to improve efficiency, reduce costs, and enhance customer satisfaction.

Griffon Corporation's competitive advantages that position the company for growth are:

• Strong Market Position: Leading positions in key markets, providing a solid foundation for growth.
• Diversified Product Portfolio: A broad range of products and services that cater to diverse customer needs.
• Experienced Management Team: A skilled and experienced management team with a track record of success.

For further insights into Griffon Corporation's values and direction, explore: Mission Statement, Vision, & Core Values of Griffon Corporation (GFF).