Good day and welcome to the Griffon Second Quarter 2015 Earnings Conference Call. Today’s conference is being recorded. At this time, I would like to turn the call conference over to Mr. Doug Wetmore, Chief Financial Officer. Please go ahead, sir.

Thank you, Jamie and good afternoon everyone. With me on the call is Ron Kramer, our Chief Executive Officer. And before we get into the details, there are certain matters I want to bring to your attention. First, our call is being recorded and the playback will be available. The details of that playback are in our press release issued earlier today and are also available on our website. Secondly, during our call, we may make certain forward-looking statements about the company’s performance. Such 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 those actual results to differ from those discussed in our forward-looking statements, you should refer to the cautionary statements contained in our press release as well as the risk factors discussed in our various filings with the SEC. Finally, some of today’s prepared remarks will adjust for those items that affect comparability between reporting periods. These items are laid out in the non-GAAP reconciliations, which are included in our press release. I will turn the call over to Ron.

Good afternoon. Second quarter continued our strong start to the year. Home & Building Products drove our performance, reflecting continued improvement in the U.S. housing market, the benefit of recent acquisitions in Australia and are beginning to reap the savings from the AMES efficiency initiatives undertaken over the past two years. We expect to build on our momentum through the rest of 2015. Our earnings per share of $0.11 were slightly lower than the prior year of $0.12, with currency translation the main factor accounting for the decline. Had currencies been comparable for both reporting periods, current quarter EPS would have been $0.14 per share. I would like to discuss a few items that impacted our second quarter results. First, we continued to execute on our corporate programs intended to both improve our financial performance and reward our shareholders. These initiatives have included refinancing our debt to reduce interest expense and extend maturities at attractive rates, increasing our dividend, and continuing our share repurchase activities. During the second quarter, we amended our revolving credit facility, increasing the facility to $250 million and extending the maturity by 1 year to 2020. Since August 2011, we have repurchased 14 million shares of common stock for a total of $159 million, representing an average price of $11.30 per share. We will continue to opportunistically buyback our stock based upon our assessment of the intrinsic value of our business compared to stock market value. During this quarter, we have repurchased 1.6 million shares of our common stock for a total of $24 million. So far this fiscal year through March 31, we have repurchased 2.6 million shares for $36 million and in March the Board authorized an additional $50 million for repurchases. Earlier this morning, our Board approved a regular quarterly dividend of $0.04…

Thank you, Ron. Second quarter consolidated revenue totaled $500 million representing a decrease of 2%, or $7.7 million in comparison to the prior year quarter. As Ron mentioned, foreign currency translation impacted both Home & Building Products and the Plastics segments. After the unfavorable impact of currency, which is mainly the real, the euro, the Australian dollar and the Canadian dollar, revenue would have increased 2% in comparison to the 2014 quarter. Home & Building Products revenue reached $264 million, a 5% increase over the prior year quarter. AMES revenue decreased 1% to $159 million as weather related headwinds and a 2% unfavorable foreign exchange impact offset the 6% benefit from the Cyclone acquisition. It bears mentioning that AMES has difficult comparison with the prior year second quarter that benefited from significant sales of snow tools late in the season. This fiscal year we got much of the benefit of snow tools sales in our first quarter. On a year-to-date basis, Q1 and Q2, sales of snow tools increased 6% in comparison to the prior year. In our doors business, favorable trends continued into the second quarter and sales increased 15% over the prior year quarter. That improvement was driven by the 10% volume increase coupled with improved mix partially offset by 1% unfavorable foreign currency impact. For the balance of the year in Home & Building Products, a couple of factors will impact our growth rates. As of the start of the calendar year 2015, we have now owned Northcote for a full 12 months and we will anniversary the acquisition of Cyclone in May of 2015. This will reduce our year-over-year growth rates relative to the first half levels that we achieved. Home & Building Products segment EBITDA was $17.3 million, increasing 1% compared to the prior year…

Thanks. With half of our fiscal year behind us, we are very pleased with our performance and confident in our ability to achieve the targets that we have communicated. 2015 is an exciting year for Griffon and important to our path forward. The majority of the restructuring costs are behind us and we are beginning to see operating leverage in each of our segments delivered to the bottom line. We see our earnings per share growth accelerating in the years to come. Looking forward, we have ample resources to invest in each of our segments to support their growth and are optimistic about their prospects. We are committed to shareholder value creation and are confident that we can make investments for organic growth, pursue additional acquisitions and return value to our shareholders via quarterly dividend and share repurchases. I am very pleased with the progress we have made and I am quite confident about our future. With that, operator we would like to open it up for questions.

[Operator Instructions] And we will take our first question from Bob Labick with CJS Securities.

Good afternoon.

Hi, Bob.

I want to start with films, obviously some very nice performance there, particularly on the margin side, we have seen Kimberly-Clark may be looking to continue to increase its outsourcing for some of its personal care products, I know you guys have done work – do work with them, can you just tell us how you are positioned to benefit if they do increase their outsourcing?

Yes. So we clearly think that we are positioned for additional products across their business, and the timing of that is always up for negotiation. But our company has positioned ourselves for growth with Kimberly, with Procter & Gamble and throughout the balance, it’s both North America, Germany and Brazil. So timing and specifics, but we think there is a significant opportunity for us with Kimberly.

Okay, great. And then you mentioned the margins were very strong there. Are there additional initiatives you are taking, can you keep them at this level, is this – are there still further resin benefits to come through or where do we stand in that cycle?

I wish we were bright enough to be able to predict the future of resin prices, Bob. There has been a fairly sharp decline over the last couple of months, which will then work its way through our selling prices in the next couple of months. As you know, we are pricing on a lag basis. But it seems as resin has bottomed out or flattened out the last month or so. The benefit on the bottom line will diminish a little bit over the next couple of months and – as we phase in the downward pricing adjustments to reflect the decline in resin.

Bob, it’s Ron. Having said that, we still think that we are going to get continued improvement operationally in both Germany and Brazil, which will help continue the path of success that we have been on in that business. While foreign currency translation was obviously an impact, but the broader issue is consumer demand in – outside of the United States is still sluggish. So, in improving global economy and stability in exchange rates both have the potential for further improvement to margins in that business.

Okay, great. Thank you. And then jumping over to Telephonics, obviously, they are performing well in a tough budgetary environment. Are there any updates on the Fire Scout program or any of the other kind of future opportunities we have talked about in the past?

Yes, it’s still in the pipeline, still things that we look as coming into production in fiscal ‘16 and beyond. So, it’s fully funded green light project. Telephonics, as the backlog numbers continue to indicate, sticking to intelligence, surveillance, reconnaissance, the growth of the Fire Scout program all give us visibility in spite of what’s still a very challenged budgetary environment. So, our business has gone through many cycles. We think the defense spending cycle is closer to a bottom here and we think we will be a beneficiary of it over the next several years. One of the programs that we are excited about is Fire Scout and that’s looked at over multi-years from here.

Yes, there is a fairly nominal amount of revenue in the current year associated with it, Bob. It’s still in the right terms, not necessarily development, but evaluation phase. It’s a fairly nominal amount this year.

Okay, great. Thanks. And then on HBP, I believe your restructuring is now complete. Have we – are you starting to see the benefits in the current quarter or is that more for the back half of this year?

As you know, it’s a good question, Bob. We basically completed that program at the end of December and we began to realize the cash savings, but most of the savings are really manufacturing expenses. So, it – the savings that we realized in the first quarter of this calendar year, our second quarter are really in inventory right now more so than flowing through the P&L. So, you will begin to see the P&L benefit of that in the second half of this year.

Great. And then just last one from me, now with this completion of the HBP restructure you have restructured, I think the operations in each of the segments now. And so what are the next broad strategic steps on your plate?

Look, we are constantly working on strategic initiatives within the businesses and performance is a function of operating efficiently. We are in the harvest mode. And we believe that our businesses have the right strategies in place, management teams that were quite confident can execute those strategies. And we are in a luxurious position of running the businesses that we own for increasing financial performance, generating more cash, which is for us to figure out how to either redeploy in the businesses that we own through bolt-on acquisitions or share repurchases or additional dividends. And the ambition for us is to continue to grow by looking for unrelated businesses to add to our mix. So, we like where we are. We like where each of these companies are. There is challenges on a daily basis within our businesses and there is plenty of things to be concerned about on a macro environment. But our companies are doing very well and we are quite excited about being able to continue to improve our operating performance in the years ahead.

And also Bob remember we are investing in capital and the businesses. We have talked about the capital spending $80 million this year and we have also made reference to the long-term R&D initiatives that we have most notably in Plastics and Telephonics. So, we are really investing for the long-term prospects for those businesses as well.

Alright, thank you very much.

Thank you.

[Operator Instructions] And we will take our next question from Justin Bergner with Gabelli & Company.

Good afternoon everyone.

Hi Justin.

Hi Justin.

Hi Ron. Hi Doug. First question relates to the guidance for growth. I mean if you look beyond the FX impacts, if you look beyond sort of the resin impact and you look beyond the weather impact that might have challenged the current quarter, are you changing any element of your organic growth guidance?

No. The only thing I made reference to it in my comments, Justin is we did adjust downward the revenue expectation for Plastics because the currencies against the dollar are weaker than they were when we last provided that guidance and also resin pricing has declined. So we anticipate that revenues in the second half of the year or through the full year 2015 will be impacted by that. But organically, from a volume perspective, no we are not changing guidance at all. And we also, at the risk of repeating myself, we reiterated the $200 million or better EBITDA expectation.

Got it. So the slightly lower Home & Building Product guidance is just a function of some currency in the international markets you serve?

No, the Home & Building Products is identical, that’s – to what we said the last time, mid to high single-digits.

I am sorry, I must have misheard. Thank you.

Okay.

Secondly, in terms of the – I am just trying to sort out some detail, the press release mentioned that Cyclone was a 6% boost to Home & Building Products, but an 8% boost to AMES in particular?

It’s included in our AMES business, remember its lawn and garden tools. So that rolls up under the AMES reporting.

Okay. I was just thinking if it was a 6% boost to Home & Building Products as a whole, it would be a larger boost to AMES within Home & Building Products versus that 8%?

It could be in the rounding, Justin. My one rounding up and the other rounding down, but that’s – it’s all based – it’s just working the math through.

Okay. And on the margin side, are you seeing any impact from the mix shift, I guess towards Clopay from AMES within your margin performance in Home & Building Products?

No, not of a discernible nature, I am not quite sure what you might be thinking of. Is there something specific?

Well, I was just thinking about the fact that Clopay was up 15% year-on-year and AMES was flat. And I was just curious if that had any impact on the margin performance of Home & Building Products?

Again, not of a discernable nature.

Okay. And then finally, I think this question was already asked to some degree, but should we think of the March quarter pace of repurchases as being something you would like to sustain or is it perhaps more likely that we would see a slowdown or pause from here versus that pace?

I think you have to look at it relative to a longer period that I think we have a very clear internal point of view about the underlying values of each of our businesses and what that means. And on an ongoing basis, we judge the value of our own businesses against what we can buyback stock at. And we saw that, over a period of years, we have been able to buy $150 odd million worth of stock at an average price of $11.30. From the last quarter, we saw an opportunity to buy significant amount of stock based on what we understood to be our operating performance. So, there is no set guideline about the timing of repurchases, but we continue to believe that our stock has compelling value. And when we have free cash flow, we are going to be able to put it to work.

Great, thank you very much.

And it appears there are no further questions at this time. So, I will turn the conference over to Mr. Ron Kramer for any additional or closing remarks.

I just like to thank you all for hearing our story and we are going to be hard at work to deliver the balance of 2015 and to continue to build the company. Thank you.

Thank you for your participation. This does conclude today’s call.