Griffon Corporation (NYSE:GFF) Q4 2023 Earnings Call Transcript

Brian Harris: Sure. A few things there. The cash flow does not assume the sale of any real estate. It does assume the full $70 million of CapEx. The outsized CapEx we saw in the fourth quarter related to us purchasing real estate. Opportunistically we bought two facilities. So that will not continue. The $70 million in ’24 includes the cost for Troy expansion that we described and for that matter, any CapEx relating to the global expansion for CPP. We do not expect that trend to necessarily continue, and it will come down as we get into future years on the HBP side, roughly 2%. And over time, on the CPP side less than 2%.

Operator: Our next question comes from Justin Bergner from Gabelli Funds. Please proceed.

Justin Bergner: Good morning, Ron. Good morning, Brian.

Brian Harris: Good morning.

Ron Kramer: Good morning, Justin. We are well. How’re you?

Justin Bergner: Good. Thanks for taking my questions. Just some cleanup questions. On the free cash flow, does that include the cost of the supplier initiative, the cash costs, the free cash flow being greater than net income?

Brian Harris: Yes.

Ron Kramer: Yes.

Justin Bergner: Okay. And then secondly, just help me understand, I think you made some earlier prepared comments on the volume trajectory in HBP over the course of fiscal year ’24. And just any comments on the margin trajectory as well would be helpful.

Brian Harris: Sure. So in the first half of the year, we have a difficult comparative to the first half of last year because it was elevated by backlog. Volume was elevated by backlog. We also expect this year to be back to seasonal norms, where Q2 is a low point for the business. And then going into Q3 and Q4, it gets back to higher volume in the second half of the year. And we expect the second half of the year to be a better comparative and be better results than the second half of this year – this past year.

Operator: This concludes our question-and-answer session. I would like to turn the floor back over to Ron Kramer for closing comments.

Ron Kramer: It’s been an excellent year, and we’re very excited about our future. Thank you.

Operator: This concludes today’s teleconference. You may disconnect your lines at this time. Thank you for your participation.