Good day, ladies and gentlemen, and welcome to this Griffon Corporation First Quarter Fiscal 2012 Financial Results Conference. As a reminder, that today's program is being recorded. At this time, I would like to hand the call over to Mr. Doug Wetmore. Please go ahead, sir.

Thank you, Lisa. Good afternoon, everyone. With me on the call is Ron Kramer, our Chief Executive Officer. Before we get into the details of the call, there's a couple of matters that I want to bring to your attention. First, I'll mention again that our call today is being recorded and will be available for playback. Details regarding the playback are provided in our press release issued earlier today and are also available on our website. Second, during our call, we will make certain forward-looking statements about the company's performance. Such forward-looking statements are subject to inherent risks and uncertainties that could cause actual results to differ materially from those expressed. For additional information concerning factors that could cause actual results to differ from those discussed in our forward-looking statements, you should refer to the cautionary language contained in today's press release, as well as the risk factors that we discuss in our various filings with the Securities and Exchange Commission. Finally, some of today's prepared remarks will adjust for those items that affect comparability between reporting periods. These items are laid out in our non-GAAP reconciliations, which are included in our press release. Thank you. And I'll now turn the call over to Ron.

Good afternoon. It's a good start to the year. Each of our operating segments achieved strong revenue growth this quarter with our consolidated revenue increasing 9%. This revenue growth drove our 5% improvement in segment adjusted EBITDA. Given the continued challenging macroeconomic backdrop, we are pleased by this growth both at the top line and at the EBITDA line. We see it as a validation of effective competitive positioning for each of our businesses and of the hard work that's been done to implement our overall strategy. Here are the consolidated financial highlights of this quarter. Our revenues grew to $451 million, an increase of 9% or nearly $37 million over the prior-year quarter. We had significant organic growth in both Plastics and Telephonics, where revenue increased 16% and 6%, respectively, over the prior-year quarter. Home and Building Products revenue also increased 6% with our doors business increasing 7%, driven by a combination of volume and favorable product mix. Ames True Temper revenue increased 5%, benefiting from the addition of the Southern Patio business that we acquired in October. Our consolidated segment adjusted EBITDA was nearly $42 million, increasing 5% over the prior-year quarterly EBITDA of $39.8 million. Our EBITDA growth was driven by a nearly 27% EBITDA increase at Telephonics, which continues to perform superbly. EBITDA generated by Home and Building Products improved modestly, increasing 1% over the 2011 quarter. As had been expected and as I have -- as we've discussed on the last 2 quarterly calls, Plastics' EBITDA declined in comparison to the prior-year quarter mostly as a result of the impact of scaling up production of newly installed assets in both Germany and Brazil. We've made substantial progress in returning Plastics to normalized operating levels and as discussed in past calls, we expect to have addressed…

Thanks, Ron. Consolidated revenues in the quarter increased 9% to $451 million. Note that we've now anniversaried the Ames acquisition, and so with the exception of a small amount of revenue in Southern Patio, which had annual revenue of about $40 million last year, third quarter performance was driven by organic growth in each of the business segments. Each of our operating segments contributed to the revenue growth versus last year. Telephonics' strength derives from its technology leadership position in a variety of categories and from the continuing demand for intelligence, surveillance and reconnaissance equipment. Telephonics revenue grew 6% to $104.5 million. With broad-based strength in the business, revenue growth related to Ground Surveillance Radars systems was notably strong in the quarter. As has been the case for the last several quarters, revenue associated with the CREW 3.1 production impacts the reporting of growth of what we consider our core business. Remember, we're a contract manufacturer for the CREW product. Excluding sales associated with CREW 3.1 for both the current and the prior-year quarter, revenue growth in Telephonics core business grew 9% this quarter in comparison to the prior year. Segment adjusted EBITDA in the quarter was $15.7 million, a margin of 15% compared to the prior-year result of $12.4 million, and a margin of 12.6%. Margin at Telephonics improved as a function of product mix, with lower SG&A expenses in the quarter related to the timing of certain R&D initiatives. SG&A also reflected the benefit of the voluntary early retirement plan and other restructuring initiatives undertaken in the latter stages of last fiscal year by Telephonics. In that regard, Telephonics recognized an additional $1.5 million of restructuring and other related charges, primarily for onetime termination benefits and other personnel costs in the current quarter in conjunction to changes to…

Before we go to the questions, I'd just like to say that I think we're very well positioned for an uncertain economy. We've factored this into our planning and still see good growth opportunities even in a sluggish recovery. As the global economy expands, we expect to see profitability expand meaningfully. All of our businesses are growing and we believe they will outperform their competition. We have ample resources to invest in these businesses, to support their growth and are excited about their prospects. We've not only built a strong business here, but we have some talented new management in each of our businesses to take us forward and to continue to create value for our shareholders. Thank you. And with that, why don't we open it up for questions?

[Operator Instructions] We'll go first to Stuart Gillespie, Stephens, Inc.

I think, Ron, you said earlier that it continues to be a difficult housing market. Are you all seeing any signs of recovery?

The answer is things are not getting worse so therefore, they feel like they're getting better. And I think we have a very good view of what's happening, and we've been saying consistently, when the talk of a double dip last August was talked, and that there had been sequential improvement in both volume and activity, but it's not because there's a broader tailwind of new housing starts and development. There's been absorption and part of it is we think that our Clopay business has managed itself extraordinarily well through the downturn and has been able to not just maintain market share, but to take market share in a slow, painful recovery that is going to continue. And we think our business is positioned for the housing market to slowly recover if things get better faster. We have plenty of capacity and we'll be a big beneficiary of it, but we've been seeing steady improvement in our business really going back and starting last August.

Okay. And so in terms of the mix, is it still around 70% renovations to 30% new homes?

Yes.

And do you all have any sort of plan on where you'd like that to be long term?

We'd love to see the new home market come back to anything approaching its historical 1 million annual unit. We're so far from that today that -- let's get sequential improvement year-over-year, and the repair and remodel market will continue to improve as the absorption of the oversupply and as the foreclosed markets find their way into ownership hands. People are going to be putting money into improvements. Garage Door is an important part of that value equation. We think we deliver a superior product at better-than-competitive price. So I'd like to see both the home -- new home market, as a percentage, increase and I'd also like to see just the sheer volume. But from a $400 million top line, while we're profitable here, we think there's a tremendous amount of operating leverage in this business for an increase in top line whether that's repair and remodel or new home. And in a recovering housing market, we should see both improve.

Okay. And then moving on to ATT, I know that you all said that there hadn't been a lot of snow and that's likely to impact the business, but are there any potential benefits of an early spring?

Yes, there is certainly. Because of people working in their yards, sooner and so forth, we get the benefit. I think that one thing you've got to kind of keep our fingers crossed on is that you don't get a late season downfall of snow that impacts the early lawn and garden season. But as Ron mentioned in his comments, we worry about the things that we can worry about and control, and you manage through the weather as best you can.

Yes. And I'd just add to that, that spring is by comparison, a much more important quarter for us in Ames than the winter. And these are the things that are always going to be unpredictable. If you remember, October started out great. There was snow in the Northeast and we benefited from it. Over the period, by December, there was no snow. And in spite of the variations in weather, we've had a quarter that tracked the prior year's quarter, which had a tremendous amount of snow. So this business, we're in it for the long term. We think that it's got brands and it's got a platform of opportunities, and there's going to be years where we get the benefit of the weather and there are going to be years where it's going to go against us. What we like is our positioning of market share, our relationship with our customers and our ability to continue to grow the business into an economic recovery.

Okay, that makes sense. And then one final question for you. I'm not sure if you guys do this, but can you break down the revenues from Southern Patio for the last quarter?

They were roughly $8 million in the quarter. Overall, they have much of the same seasonality that the Ames True Temper business has. And as I mentioned in my comments, for the last year -- and they were on the same September 30 fiscal year as we are. They had just about $40 million of revenue for the full year.

[Operator Instructions] Our next question will come from Philip Volpicelli, Deutsche Bank.

My question is with regard to the Plastics business. Clearly, you guys are hopefully making some headway there with the Brazilian and German operations. Are there any metrics that you can point out to us or is there any qualitative information you can give us to give us more confidence that this will be behind you by the end of the second quarter?

As we've said, we're very closely monitoring it and it's -- they are really right on plan in terms of achieving the efficiencies that they anticipated in getting to that full operating profit level by the end of the second quarter. I'd probably say that Germany, Europe is probably a little bit further along than Latin America, and I think some of that has to do with, we mentioned this on the last call, that with the fact that the Brazilian market slowed down a little bit in the last 6 months of last year, that was pretty well-documented in the financial press and so forth. So in terms of our evaluating how far they've progressed in achieving the operational efficiencies, I think it's safe to say that they haven't really been stressed as much as we expect they might need to be when the Brazilian market rebounds a little bit. So that's the only caveat that I have, Phil. And other than the one that Plastics is our most international business and obviously, foreign currency and resin pricing can significantly impact the Plastics reported results.

And then with regard to Telephonics, Leon Panetta put out his budget and it calls for a 30% increase in the fleet of U.S. unmanned aerial aircraft. If that were to come true, how soon do you think that, that would benefit you guys and would it benefit you guys if they are building more of the unmanned aerial aircraft?

Well, there's no surprise that we are absolutely a beneficiary of that direction. And Fire Scout is the first of what we hope to be many programs that our communications, surveillance, radar systems become a part of. The direct answer to your question is that we've said that Fire Scout won't impact us until the end of this fiscal year and won't ramp up until 2013 and beyond. But that in and of itself is part of our confidence in the organic growth story within Telephonics. Additional programs, international sales of those programs and the ability to be part of new programs are all opportunities for us. So while we're completely realistic about how difficult the funding environment for defense is going to be, the piece of the business that we're in is a more likely growth part in terms of its requirements, that the big cuts are coming out of procurement and coming out of personnel. We continue to think that the ISR part of the market that we compete in, that we're very well positioned.

And as we've said in the past, that our technological capabilities for small-sized weight and power consumption, as well as the performance of the radar unit itself is ideally suited for UAV application.

Okay. Are you guys on the Predator or is that another program that somebody else is on?

The radar unit is not under Predator. There are some communication, ground to air, on some of the UAVs. I couldn't tell you if it was the Predator, but we are on other UAV platforms.

But our expertise is helicopter-based programs.

Got you, okay. And then just last for me. Clearly, you guys have cash on the balance sheet and liquidity available to you. Have you been looking at any acquisitions or is there anything out there that is imminent, anything you'd want to give us guidance towards?

Look, we're always look [indiscernible]. We think that managing in this uncertain [indiscernible] that we get our Plastics [indiscernible] quarters. The Home and Building Products, while improving, it's a long way from reaching the levels of profitability that we'd like to see it at. Of course, if we can continue to do tuck-ins, like Southern Patio, which are very attractive in terms of it being accretive and strategic, we're going to do that, but there's no big transformational acquisition that's on our horizon. And not that we're not looking for it, but it's just not the environment that we see lots of very attractive, well-priced high-growth assets.

We'll take our next question today from Zahid Siddique, Gabelli & Company.

A couple of questions. Any updates on the Mahindra joint venture?

Yes. We continue to work through our memorandum of understanding and we expect to be able to formalize it over the coming months. But it's still moving ahead and we're quite excited about the opportunity that it presents to us and being able to do business in the Indian market and to be able to do business with one of the finest companies in that market. So we're very excited about those prospects. And those would all be additive to the Telephonics growth plan.

Okay. And would you be able to quantify the operating income for the Garage Door business?

Zahid, when we made the acquisition with Ames True Temper, we said that we would no longer comment on the individual operating profit of the businesses that comprise Home and Building Products. I'd like to hold to that.

Okay. But I assume it was profitable. At least you can confirm that.

Oh yes, it was profitable.

Yes.

It is, just to confirm, it has been profitable through this entire down cycle and its profitability has been improving. We expect it to continue to improve as volumes increase.

Yes. Remember, the first and second quarters of this fiscal year, we'll continue to be anniversaring the plant consolidation savings, which we began to realize in the third and fourth quarters of last year. So hence, more profitability improvement.

Okay. And then you are guiding to the adjusted EBITDA of $180 million to $190 million?

Yes.

And I believe in Q1, right in Q1, you did about $41 million, $42 million. So you are comfortable or are you comfortable with the ramping up in the next 3 quarters?

Well, just to be -- quite frankly, we wouldn't have affirmed the guidance if we weren't comfortable with it. And remember, our first fiscal quarter is our smallest quarter of the year.

Yes. This is our seasonally weakest quarter and we're ahead of where we were last year. And the short answer to your question is yes.

Okay. And last question I have is on the resin prices. Could you throw some light on what's going on in terms of prices?

Well, it's -- they're down a little bit particularly in the United States from the peak of the last, let's say 18 months. And I think that's probably driven by the overall decline in natural gas, which is the feedstock, but they're still pretty far above the bottom, which was in December of 2008. And I don't think you've seen as sharp of a decline in Europe because a lot of their resin there is manufactured from NAFA [ph] and that's not quite seen the decline that you've seen in natural gas. So kind of a mixed bag, probably downward pressure, but I don't anticipate seeing a precipitous decline in the overall cost of resin.

And gentlemen, at this time, there are no further questions. I'd like to turn the conference back over to you for any additional or closing remarks.

Thank you very much. We'll speak to you after our next quarter.

And ladies and gentlemen, that does conclude today's conference. We would like to thank you all for your participation.