Good day and welcome to the Griffon Corporation Fourth Quarter and Fiscal Year 2015 Earnings Conference Call. Today’s conference is being recorded. At this time, I would like to turn the conference over to Mr. Brian Harris, Chief Financial Officer. Please go ahead, sir.

Thank you, Vicky. Good afternoon everyone. With me on the call is Ron Kramer, our Chief Executive Officer. Before we get into the details, there are certain matters I want to bring to your attention. First, our call is being recorded and will be available for playback the details of which are in our press release issued earlier today and are on our website as well. Second, 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 risk 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 discussed in other 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 included in our press release. Now I will turn the call over to Ron.

Good afternoon everyone. I am very pleased with our performance. We had a strong finish to the year with fourth quarter adjusted earnings per share of $0.23 which was up 76% from last year; the quarter profit growth came from strength in our Home & Building product segment and reflected a combination of margin expansion from efficiency initiatives, improved mix and a continuation of the housing recovery. 2015 was an exciting year for Griffon, as we began to see the company’s earnings potential realized with full year EPS of $0.73, which was up 43% versus prior year adjusted EPS of $0.51. In addition, we had revenue of over $2 billion and 2015 segmented adjusted EBITDA was a record $204.4 million, up 7% over the prior year and exceeded our $200 million guidance to shareholders. Importantly, we were able to deliver these results despite significant macro headwinds throughout the year, the most significant being foreign currency volatility which adversely impacted our Plastics and Home & Building Products businesses. We also remained focus on returning cash to shareholders through dividend and share repurchases from August 2011 through September 2015. We have repurchased 16.8 million shares of common stock for a total of $203.1 million representing an average price of $12.13 per share. This quarter, we repurchased 1.5 million shares of common stock under our plan for 23.8 million and for 2015; we repurchased 5.3 million shares for a total of $80.9 million. At September 30, we had 57.9 million in repurchase authority remaining under our current plan. We will continue to opportunistically buyback our stock based upon our assessment of the intrinsic value of our business compared to stock market value. In addition, earlier today, we announced the 25% increase to Griffon’s quarterly dividend to $0.05 per share. I’d like to provide…

Hi, John. In the fourth quarter, revenue of $502 million decreased 4% against the prior year which included a $27 million or 5% unfavorable foreign exchange impact. The current quarter’s segment-adjusted EBITDA improved 8% to $55.4 million. The quarter included approximately $2.5 million of unfavorable foreign currency impacts. Full year revenue of $2 billion was up 1% over the prior year. Full year revenue excluding a $72 million unfavorable currency impacts was up 5% with 2% organic growth and approximately 3% contribution from the Cyclone and NorthCote acquisitions completed during 2014. Full year segment-adjusted EBITDA was $204.4 million, up 7% over the prior year. Segment adjusted EBITDA included approximately $7.5 million of unfavorable foreign currency impacts. Home & Building Products current quarter revenue of $245 million, trailed to prior year of $255 million, primarily due to a 5% foreign currency impact. For the full year, revenue increased 7% to $1.1 billion. Excluding the impact of foreign currency, revenue increased 10% which includes an approximately 5% contribution from 2014 acquisitions. AMES revenue declined 10% in the fourth quarter and grew 6% for the full year both in comparison to prior year period. Excluding the impact of foreign currency, revenue decreased 1% for the quarter and increased 11% for the year. The full year increase reflects an approximately 10% contribution from the 2014 acquisition. In our doors business, revenue was in line with the prior year fourth quarter and increased 9% for the full year. The full year increase was due to improved volume and mix. Both the quarter and year included a 1% unfavorable foreign currency impact. Home & Building Products adjusted EBITDA increased 26% to $27 million and 22% and $94 million for the fourth quarter and the full year respectively reflecting operational efficiency improvements at AMES and a favorable…

Thanks. Record 2015 top-line and segment EBITDA results for Griffon demonstrates our ability to execute even with broad volatility impacting certain parts of our business. The hard work we’ve done over the past few years to drive efficiency has really begun to materialize and enhance our ability to drive shareholder returns. Looking forward, we have ample resources to invest in each of our segments to support their growth while maintaining balance sheet strength for future acquisitions. We expect the additional CapEx we are spending this year to meaningfully accelerate future profitability. I am very pleased with the progress we’ve made. There is a vibrancy and a sense of optimism in each of our businesses. We are pleased with our performance this year, but far from satisfied. We can and we will do better in the years to come. Most importantly, I’d like to thank our 6000 employees in North America and around the world for their extraordinary efforts this year and we’ll all be working hard to continue to build shareholder value in the future. With that operator, we’d like to take any questions.

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

Good afternoon and congratulations on a nice quarter and fiscal year.

Thanks, Bob.

Thank you, Bob.

Sure, I wanted to start with doors. I mean, I guess it was mid-October is when you announced it, but you just discussed the expansion of the Troy facility in Ohio and obviously it’s due to the trends that you are seeing, maybe you could expand a little bit about what you are seeing and then tell us, should we expect any margin impacts from this expansion maybe because of – starts lower utilization and to set our expectations of how we should be looking at the impacts of this expansion next year?

We’ve looked at the housing recovery as being an ongoing slow but steady, and its impact on us has been reflected in both the doors business and somewhat in the AMES business. We’ve been able to both gain market share in the downturn by consolidating our plans and doing some smart things in terms of introducing new products, most importantly the intelicore line foam in place doors which has sold extraordinarily well through both Big Box and through our dealer network and we see the demand continuing including through the month of October into this new fiscal year. So, this is not been about a sudden surge in housing. This has been a slow steady execution of a strategy and our planning long-term for this business sees us being able to grow the product sales and to continue to grow market share and as we continue to look out, we believe that adding capacity over the next few years is going to be money well spent. Now, in terms of the impact, we see this is something that is going to be executed from a capital standpoint in 2016 and the benefits of which will start coming into our profitability in 2017 and beyond. So, there is no short-term impact on our margins, but, like any construction we are going to be watching very carefully to make sure that we don’t have disruption of our facilities and that we can maintain the levels of profitability that we’ve enjoyed. Home & Building products is a segment we’ve said for sometime, we expect between both doors and AMES to be able to get to over $1 billion in revenues. We are already at that level and we expect that to continue to grow, but as Brian outlined, it’s a slow growth story in terms of the top-line and we’ve always said that we believe this is a better than 10% EBITDA margin business going forward and we continue to believe that that’s the case and how high above 10%? Only time will tell. But we think the door business has been executing extraordinarily well. It has the best brand names in Clopay and Ideal, sold through the best retailers and a dealer network to support it on a national basis. So, we think the future for the door business is quite bright and we see ourselves being the market leader and investing in building around a very successful management team.

Okay, great. Yes, it does sound exciting and like you have plenty of room to go there. Sticking in HBP, just on AMES, we talked about this a little I think on the last call, so, maybe if you could remind us and update us on the ongoing initiatives at AMES for the brand awareness and line reviews and your progress that you are making there?

We continue to make good strides in positioning both brands and products in North America, US and Canada, as well as the Australian acquisitions that we are very excited about and having integrated successfully this year. The AMES story for us, is about execution. We’ve done the restructuring and taken the charges over the last several years in repositioning the business and we are quite optimistic about the future prospects. There will be variability in that business. There will be good winters and bad springs and the weather is something that’s out of our control. What’s in our control is that, we have made this very much a consumer branded business. We’ve broken out of, what I would view is a contract manufacturing role. So, we have leading brands delivered at competitive prices and we believe that the logistical support that we supply to big box retailers around the country and to some extent around the world and our hope is that that becomes more of a story in the future that the AMES business is poised for some significant growth and profitability over the next several years.

Okay, terrific, great. Jumping over to Telephonics, you have a nice backlog going into next year, I think there is also some programs beyond that, maybe you could talk a little bit about the opportunities in 2017 and beyond, some of the growth you are investing in the fire scout, mobile surveillance and recently expanded Mahindra, the ownership in your JV that was recently expanded?

Telephonics has been a wonderful business that we’ve been in for a long time and the defense cycle has always been a boom box. We believe that we are at more of a bottom in the cycle and that defense spending over the next five years is more likely than not going to look better than what it’s look like over the last five years. So, programs have moved to the right and in spite of that, because we’ve stuck to our intelligence surveillance, reconnaissance mission that we have been able to maintain our backlog in spite of a very sluggish defense budgetary environment and the programs that you referenced fire scout, JLTV are all things that we view as long-term opportunities and things that we are working very hard on trying to be successful on. The measure of the defense business for us in Telephonics is over every five year cycle that we’ve looked at this business. We’ve been pleased with the performance. This has been managing through a down cycle, and we’ve done that quite well, maintained our margins and it maintained a very visible $442 million backlog going into 2016 and the international opportunities are all ahead of us. We think that will become meaningful over the next several years. So, we think Telephonics is in a very strong position with mission-critical battle-proven, cost-effective and incumbent positions on a variety of platforms. We think it’s got a great future ahead of it.

Terrific, appreciate that. And then, last, and I’ll get back in queue, but, on films, you talked about some product rationalization impacting, I guess, volumes a little bit next year. Does that have a material impact on the margins, obviously, very successfully raised the margins over the last several years to your targeted level. Should they still be similar to this year or how will the rationalization impact margins next year?

Yes, we are expecting margins to be in the same level and obviously, this business has been most impacted for us by foreign exchange, Germany and Brazil in particular. So, the year-over-year decline in revenue and the year-over-year increase in margins. Looking forward, I’d rather see, the margins stay stable and the revenues increasing which means, we are doing more volume, but this currency translation will continue in our view to be a headwind. In spite of that, we’ve managed through the cycle by setting expectations properly where we are able to absorb the hits that has come through. So, we’ve always said, that the margins in this business should normalize towards 10%. We are obviously running it better than that today. We are proud of that, but I wouldn’t expect margin expansion beyond where we are.

Okay, great. I will get back in queue. Thank you very much.

[Operator Instructions] And we will go next to Justin Bergner with Gabelli & Company.

Good afternoon.

Hi Justin.

Hi Justin.

How are you guys?

We are very well. Thank you.

Good. My first question relates to, I guess the – revenue trends in Home & Building products this quarter. I guess, sort of launch and acquire what might be behind those trends. I guess, some other competitors – not competitors, but some other companies serving the lawn and garden space had better things to say about revenue trends in the September quarter. So, I guess, I was just curious what you guys are seeing?

So, this, we are obviously subject to timing and particularly load-ins for snow and also timing of weak sales to perform even. So, overall, our operations are doing well. We are seeing good results and it’s really just a matter of hopefully timing and point-of-sale due to weather for the fall season and the load in for snow which sums which will occur in this quarter opposed to last quarter.

Great, that’s very helpful. My second question relates to the EBITDA guidance for the September 2016 fiscal year, should we think of most of that increase in EBITDA, a little over $10 million year-on-year as being sort of concentrated in the Home & Building Product segment or will the other segments also contributing?

We will see contributions from all the segments. Certainly, Home & Building products has probably outside benefit but we expect from all of them.

Okay, thank you. And finally, if I may, on the Plastics business, are you undertaking further rationalizations or is your revenue guidance just more of the annualization of rationalization actions you took in the prior quarters?

Primarily from the rationalizations we took in the prior quarters. We have no planned rationalization coming up, but we of course always look at our products and make decisions based on what we see at those times.

Okay, thank you so much for taking my questions.

You are welcome.

We will take follow-up questions from Bob Labick with CJS Securities.

Hi, thanks. Just, could you talk a little bit more about capital allocation, your decisions between buying back and acquisitions and then, in terms of M&A, there is obviously been a lot of volatility in the markets over the last few months. Has this impacted any potential targets for you and if you have the opportunity if prices are right, where would you be looking first in terms of M&A?

There are couple of questions in there. So let me start with capital allocation for us, it’s been an ongoing, we thought that over the last several years and obviously, in 2015, that the cheapest thing for us to buy was ourselves and we spent a significant amount of capital, $80 million last year and a total of over $200 million over the last several years. So that’s a significant amount of our outstanding and the market will always go through its ups and downs. What we’ve tried to do and we will continue to do is focus on improving the businesses that we have and we think that there is a strategy today for us of being a conglomerate, of being a group of unrelated businesses tied together through a capital structure that we are able to effectuate the strategies of each of our businesses, choose the leaderships and then help them execute their strategy and that’s working quite well for us and the results are what we’ve been able to do in a unremarkable top-line growth and that’s a reflection of the economy to be able to grow both our EBITDA significantly, grow our EPS. We think that in the outlook that we are in a sluggish macro economy and that the top-line is unlikely to grow by all that much in 2016, but we still believe we can significantly grow both EBITDA and EPS. And that’s the backdrop to looking at the M&A and the capital allocation. So the places where we find value or I was looking what we’ve done over the last several years. In our Home & Building Products segment and particularly in the AMES business, we’ve been able to make acquisitions of either privately-held or divisions of larger companies that have been very…

Okay, terrific. I appreciate that. Thanks very much.

It appears there are no further questions at this time. So I turn the call back over to our speakers for any additional or closing remarks.

Okay, thank you. We are going to hard at work to make 2016 as successful as we can and appreciate all your support. Thank you very much.