Good day, and welcome to the Griffon Corporation Second Quarter 2013 Earnings Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Mr. Doug Wetmore, Griffon's Chief Financial Officer. Please go ahead, sir.

Thank you, Amber, and good afternoon, everyone. With me on the call is Ron Kramer, our Chief Executive Officer. And before we get into the details of the call, there are certain matters that I want to bring to your attention. First, as Amber mentioned, the call is being recorded and will be available for playback, the details of which are in our press release issued earlier today and are also available on our website. Second, during our call, we may 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 statements 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 with that, I'll turn the call over to Ron.

Thanks. Good afternoon, everyone. This was a good quarter for us. We are executing well against our internal targets and our results reflect the ongoing improvements we are making with all of our operations. I'm pleased with both the level of our progress and obviously with the results. The recent trends associated with each of our businesses continued throughout our second quarter. Specifically, Telephonics had another strong quarter; Plastics continued to show substantial operating improvement, mainly driven by the initiatives undertaken to address manufacturing and inefficiencies arising from our capacity expansions in Germany and Brazil; and Home and Building Products improved, benefiting from enhanced profitability in our doors business, driven by a combination of favorable product mix and manufacturing efficiencies. Ames True Temper revenue top line grew 2% and operating results benefited from reduced warehouse distribution cost and other cost control initiatives at Ames True Temper. Consolidated revenue, $489 million, increased 1% compared to the prior year quarter and consolidated segment adjusted EBITDA was $45.4 million, increasing 13% compared to $40.4 million in the prior year quarter. Second quarter net loss was $0.02 per share on a GAAP basis compared to net income of $0.04 per share in the prior year quarter, and our adjusted earnings per share were $0.08 compared to $0.04 in the prior year quarter. As usual, I'll now make a few comments about each of the businesses and then Doug will take you through the financial results of the segments in more detail. Start with Telephonics. Second quarter revenue totaled $122 million, increasing 7% compared to the prior year quarter. Excluding contract manufacturing revenue for ICREW and CREW 3.1 programs in both periods, revenue increased 8%, primarily due to the timing of certain work related to several foreign Multi-mode Surveillance Radar System contracts. EBITDA of $15.5…

Thank you, Ron. Consolidated revenue totaled $489 million in the quarter, an increase of 1% in comparison to the prior year quarter. Telephonics revenue totaled $121.6 million, representing an increase of $7.6 million compared to the prior year quarter. Both the current and prior year quarters included about $13 million of revenue related to electronic warfare programs where Telephonics serves as the contract manufacturer. Excluding revenue from these programs from both periods, current quarter revenue increased 8% in comparison to the prior year quarter, again, primarily due to Multi-Mode Surveillance Radar Solutions contracts. Telephonics segment adjusted EBITDA was $15.5 million, an increase of 1% from the year ago. The segment adjusted EBITDA margin decreased to 12.7% from 13.5% in the prior year. The value increase in segment operating profit was obviously benefited from the sales increase. It was also driven by lower expenditures associated with the timing of research and development initiatives and proposal efforts, partially offset by the impact of program mix. In the current quarter, Telephonics was awarded several new contracts and received incremental funding on current contracts. And at March 31, 2013, backlog totaled a record $477 million, up from $451 million in September 30, 2012, our year end, and from the then record backlog of $467 million at December 31, 2012. Turning to Plastics, second quarter revenue reached $141 million, that was a 2% decrease compared to the prior year quarter. As Ron mentioned, there were a number of elements impacting Plastics reported revenue, most notably a 5% decline in volume. A portion of this volume declined directly resulted from the actions we announced in February of this year with our plans to exit certain low-margin business and substantially all that business has in fact, been exited. Translation also unfavorably impacted Plastics top line by 2%.…

Thanks. We're obviously pleased with our overall performance this quarter. We own a very attractive portfolio of companies, and each of our businesses is strategically well positioned for enhanced operating performance as the global economy continues to recover. Telephonics is poised to grow, Plastics will continue its improvement and we expect the Home and Building Products businesses to benefit from a recovery in housing. We believe that over the long term, our businesses have room to grow and will outperform their competition. We have ample resources to invest in these businesses to support their growth and are optimistic about their prospects. We see excellent growth opportunities both in our existing businesses and through strategic acquisition, particularly with smaller tuck-ins that could meaningfully boost profitability. Foundation of our company is solid. As we look out over the next few years, we believe that, conservatively, we can sustain our organic revenue growth, expand our EBITDA margins and significantly increase our earnings per share. We've accomplished a lot over the past few years and believe that our earnings growth will reflect those efforts as the economy continues to gradually improve. With that, I want to thank you, and we're going to ask the operator to open it up for questions.

[Operator Instructions] And we'll go first to Robert Labick with CJS Securities.

I want to start with films. Nice pickup in margins there, as you noted, and I was hoping you could explain just a little bit on the exiting of the low profit or unprofitable business? Has the full impact has been seen, is there a little more uptick there? And then could you maybe just talk us through some of the next steps expected to get you to that 10%-plus EBITDA goal?

Bob, essentially all of the affected employees in Europe with just a few minor stragglers, had left the employ of the company late March, early April. There's still a little bit of business that we're exiting from because we wanted to make sure that we didn't leave any of the customers that were being affected by this in the lurch so we continue to manufacture a little bit in the current quarter -- the third quarter that we're currently in until the transition to new production locations is achieved for those customers. So there'll be a little bit of effect in the third quarter and then it should essentially be done.

Okay, great, and then the next couple of steps you expect in films?

Just continuing to drive the efficiency of the manufacturing process. What we kept behind was a larger volume throughput and better margin product. The larger volume allows us to produce longer production runs with less frequent changeovers because changeovers are one of the areas that -- or the events that trigger scrap and underutilization of equipment. So I think you continue to see the benefit of the actions undertaken, along with a number of the other initiatives that the Plastic management has put in place and has a plan for over the next couple of quarters, so we're going to continue to drive profitability improvement and efficiency improvement.

And I'd add to that, that it starts with a management change that we made in Germany that was in the early stages of having its impact on the business, rightsizing the mix of product is all in process. So we feel like we've weathered the macroeconomic issue in Germany. And that this is all about internal process improvement that has happened and with new management, we expect it to continue to happen.

And then just sticking with films for a second, I know Kimberly-Clark has announced they're exiting Europe. Has there been any impact on any of your customers? Have you seen any uplift there or is that still a potential opportunity for some volumes?

I think we've seen a small amount of uptick and I think it's a potential for further growth go into the balance of this year. Certainly, we're targeting it for next year.

And then over in Home and Building Products, your stocks reported a tough March quarter but a strong pickup in April. Are you seeing similar favorable trends in lawn and garden for Ames in April and June?

Bob, as I mentioned, we saw a very good weather in April in many of the markets that we serve -- or our customers are serving. And the weather on the weekends, most notably, has been beneficial to us. But April, we saw a very good performance in April last year. But then May and June, because of a variety of weather impact, most notably, didn't sustain the improved levels. So that's why we are continuing to be cautious about the balance of this second quarter -- or the third quarter. This is a very big operational quarter for Ames. It's the biggest quarter of any operational year for them, and lawn and garden is the biggest part of our business, so one month does not the quarter make, which is why we continue to be cautious.

And we'll take our next question from Zahid Siddique with Gabelli & Company. Zahid Siddique - Gabelli & Company, Inc.: Just a question a few questions. One on the ATT restructuring, given that you bought the company from private equity, one would assume that they would have done a lot of the restructuring, so why is there a need to do so. And I think if I remember, you had made up quite a bit for that acquisition, so would you say there was a flaw in your thinking or what kind of or what has resulted in this restructuring at this point?

Well, I'd answer it that market conditions change, and part of what you have to do is manage through cycles, both expected and unexpected, no different than any of our other businesses. Remember the phrase "shovel ready"? Well, there was never a recovery in the infrastructure building in America. So I think the housing markets, which at some level are showing the early signs of recovery. But the flow-through to things like lawn and garden and the variability of weather that we've had to deal with in the 2.5 years that we've owned Ames, it's given us reason to take a fresh look at what the future of this business is going to look like and we own it for the long-term, and we're going to plan for the long term. And part of what management is supposed to do is look at the business, not just through the rearview mirror, but what's coming at you. And we see very challenged operating conditions that we need to take actions to be able to remain the market share leader, which we are, in each of the categories that we're in and to be able to continue to deliver outstanding products at value pricing to our customers.

And we are really investing for the long term, Zahid. So the Ames was owned a couple of different entities over a short periods of time. And there wasn't the motivation to invest for the long term for those, so we're looking at maximizing factory absorption, efficiency and utilization of working capital. And these are steps that are going to bode well for the long-term success of Ames True Temper. Zahid Siddique - Gabelli & Company, Inc.: Okay. And next, I wanted to confirm that you have actually reduced the guidance for the Building Product segment from mid-single to low single, is that correct?

That is correct and that basically took into account the weak snow that we had when you look at the 6 months results, snow was down year-over-year and when we provided the guidance in February, we were anticipating that we would still have normalized snow for the balance of our second fiscal quarter. That's the only change.

And what I'd add to that is that our overall level of profitability that we've done an outstanding job of managing the business that has had no top line improvement. And so we're very pleased about what's going on in Home and Building Products in terms of the run rates and being able to take costs out of the business without a big top line expansion. We think that top line expansion is ahead of us. We think that is the housing markets and as the economy improves, for both the door business and for the Ames business, so the fact that our top lines are sluggish and that our profit lines continue to show improvement is part of what gives us an encouragement about the future of those businesses. Zahid Siddique - Gabelli & Company, Inc.: Okay. And then on Garage Doors, I was a little disappointed that the revenue actually declined. You did point out to the fact that there is a lag, but a lot of the data has been improving for several quarters now. Many companies have shown improvement. So why have you not caught up even with the lag effect?

I'd answer it this way. We think we've increased market share over the past sequential and year-over-year quarter. The problem is that the growth of single-family homes is nowhere as robust as the numbers that are swayed by multi-family housing indicate. And so, we view the door business as a caboose on the housing train, but the housing train is moving down the track, and we think that we are very pleased, we're not at all disappointed. We think that we've manage the business and as I said, if I thought we were losing market share, there will be something to talk about. We think that we're in fact, very well positioned within the door category. We're going to continue to grow that top line as the housing markets recover. And I think what you should take away from it is how early the recovery in single-family homes in the United States is.

[Operator Instructions] And we'll go next to Philip Volpicelli with Deutsche Bank.

My question's in regard to the guidance, I believe the last caller asked part of the question, but was it previously $180 million to $185 million of segment-adjusted EBITDA, now it's just simply $180 million, is that correct?

No, it was $180 million and we're confirming our $180 million.

Okay. So there was no -- okay, so I was wrong about that. Okay, thanks. And then when we look at the Plastics business, how fast do you think that the ramp-up there will occur in Germany and Brazil? Is this something that we should start seeing some better numbers in the third quarter here or is it still a little bit away?

We think you're seeing good numbers in the second quarter. We think that year-over-year improvement, quarter-over-quarter improvement has been continuing as you should expect that improvement to continue. We couldn't be happier with what we're doing within the Plastics business, particularly given the headwinds in Germany and the problems operationally that we've solved in Brazil. Business will continue to expand its margins, and we've said consistently, expect it to be more than 10% at the EBITDA line. And that's been going on for 2 years now and we're well on track to achieving that goal.

And we'll go next to Marty Pollack with NWQ Investment Management.

Just 2 questions, if I may. On the Telephonics, certainly, the backlog continue to rise and looked impressive. I'm just wondering what the book-to-bill might've looked like for this previous quarter and as you see the rest of the year unfold. Did you see backlog continue to stay firm?

Book-to-bill is not necessarily the best indicator because the revenue recognition may vary a little bit from the billing just because of meeting certain contractual commitments, Marty. But I think the revenue recognized basically we improved by about $10 million because the backlog improved by about $10 million from the backlog at December 31, 2012. And that can vary from month end to quarter end, but overall, I think Joe and his team feel very good about the orders booked during the course of the current quarter.

Okay. And on the Plastic side, it seems that part of that improvement as you indicated was on the recovery of some of the margin, some of the pass-through. Did you see a catch-up there on the resin cost that would explain part of this recovery in the quarter here, and how does it -- how are you positioned now looking for the rest of the year?

Marty, as Ron mentioned in his comments, there was about $500,000 unfavorable resin impact on EBITDA in the second quarter and year-to-date, so for the first 6 months, right around $5 million. I think it's $5.2 million unfavorable. So I guess, the resin situation, you can characterize it as having been improved from the first quarter. If resin were to stay exactly where it is right now, we would obviously catch up further in the third quarter. But resin is a commodity and does have a tendency to fluctuate, as you're well aware. So hopefully, in the second half of this year, we'll see a stable or perhaps even somewhat declining resin market so that we can catch up a little bit on the negative impact from the first half of the year.

That does conclude our question-and-answer session. I will now turn the call back over to the speakers for any additional or closing remarks.

Thanks for joining us. And we look forward to updating you after our third quarter in early August.