Good day and welcome to the Griffon Corporation Second Quarter Fiscal 2016 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, Melissa. Good afternoon, everyone. With me on the call is Ron Kramer, our Chief Executive Officer. Our call is being recorded and will be available for playback, the details of which are in our press release issued earlier today and on our website. As in the past, our comments will include forward-looking statements about the Company’s performance based on our views of Griffon's businesses and the environments in which they operate. Such statements are subject to inherent risks and uncertainties that can change as the world changes. Please see the cautionary statements in today's press release and in various Securities and Exchange Commission filings. Finally, some of today’s remarks will adjust for those items that affect comparability between reporting periods. These items are explained in our non-GAAP reconciliations included in our press release. Now I will turn the call over to Ron.

Good afternoon. Thanks for joining us today. We performed well this quarter despite the challenging macro conditions. We reported second quarter 2016 earnings per share of $0.14, which is a 29% increase over the prior year of $0.11. The increase was driven by strong sales in our Home and Building Products segment, partially offset by lower volume in Plastics. We delivered segment adjusted EBITDA of $48.6 million, up 8.6% from the prior year, revenue of $500.1 million, was consistent with the prior year quarter; and above our own expectations. Notably revenue was up 2% excluding the unfavorable impact of foreign currency. Before turning to our segment level details, I would like to provide an update on our capital allocation activities and return of cash to shareholders. In the second quarter, we took advantage of market volatility. We repurchased just over 1.5 million shares for a total of $22.7 million or $14.97 per share. Since August 2011, we've repurchased 18.7 million shares for a total of $233.1 million or $12.46 per share. I want to point out that our buybacks and dividends have been accomplished while maintaining balance sheet strength through cash generation from our businesses. We continue to believe our stock has a compelling value. In addition, earlier today, we announced a quarterly dividend of $0.05, which is payable on June 23 for holders of record on May 27. Now I’ll go through the details -- business highlights by segment and then I will turn it back to Brian for a little more detailed discussion of the financials. Home & Building Products, we generated second quarter revenue of $279.2 million, which was a 6% increase over the prior year of $263.6 million. The sales increase was led by continued growth in our Clopay Plastic door business, coupled with increased sales…

Thank you. Consolidated second quarter revenue was $500 million, which was consistent with the prior year. Excluding the impact of foreign currency, revenue increased 2%. Segment adjustment EBITDA increased 9% to $48.6 million. Home & Building Products second quarter revenue of $279 million increased 6% compared to the prior year $264 million. Home & Building products revenue included a 2% unfavorable foreign currency impact. AMES revenue increased 4% to $166 million as a result of increased garden tool and pot and planter sales and improved U.S. snow tool sales. This was partially offset by unfavorable weather conditions in Canada, which impacted sales and both snow and garden tools. Currency was 3% unfavorable in the quarter. Doors revenue increased 8% to $113 million as a result of favorable product mix and increased volume. Yet, the currency impact was immaterial. Home and Building Products segment adjusted EBITDA increased 52% to $26.3 million, resulting in 9.4% margin for a 280 basis point margin improvement over the prior year quarter. The improved margin reflects operational efficiency improvements and cost control measures implemented at AMES and the continuation of the favorable mix shift to higher end doors along with decreased material cost. The quarter results included a 3% unfavorable foreign currency impact. Turning to Telephonics, segment revenue increased 7% to $106 million compared to the prior year, primarily the result of increased revenue from mobile ground surveillance systems, secured digital intercommunication systems and contract manufacturing of dismounted Electronic Countermeasure systems, partially offset by decreased revenue from certain maritime surveillance radar systems. Segment adjusted EBITDA decreased 10% to $10.4 million or 9.9% margin, primarily the result of timing of work performed on maritime systems. Payment backlog remains healthy and ended the quarter at $446 million, 76% of which is expected to be realized in the next…

Thanks. We’re pleased with the quarter's results. Our past and our ongoing operational initiatives will continue to support our growth and earnings for years to come. I want to thank to 6,000 people in our company for their extraordinary efforts. We'll all be working hard to continue building shareholder value in the second half of 2016 and we’re very optimistic about our future. Thank you. And with operator, we’ll open it up for questions.

Thank you. [Operator Instructions] We’ll take our first question from Bob Labick with CJS Securities.

Hi, congrats on another good quarter.

Thanks Bob.

Sure, couple things. Just wanted to start with the Sof-flex, this product, has this been part of the ongoing R&D you've been discussing that you haven't told us too many details about in those films or is that -- is it unrelated to that?

It is, its been in the works and its names if Sof-flex and it's what we think is next generation thin film, higher performance and we're very excited about it, but it is absolutely part of our existing CapEx guidance.

Got it. Great. And then can you talk a little bit about I guess the market opportunity here? Is it -- are you expanding your market or are you just improving your products and it's an upgrade from the existing and how should we think about the return on the investment that you're making in it?

We think that it provides a better performance and a thinner film as advantages to our customers. We have tests that are in process. We believe that customer demand will ramp up as we put this into place, but we think that it's an innovation that is going to bring a very cost effective solution and be the next generation for films and we’re hopeful that that will be a continuous improvement to our margins in 2017 and beyond when it really will have an impact on the plastics business.

Great, very exciting. And then shifting over to Home & Building products, obviously off to a good start there, AMES was strong as well, can you just talk a little bit about the Australian business and its hard to say I know have strong business down there, but it's hard to see the underlying movements there given that it's in AMES and how is that going and is that responsible for the margin uplift or very strong margin obviously in that business as well. Just expand on that please.

Sure the Australian part of our business is part of our ongoing strategy. As you heard us describe, we want to have booked geographic expansion and we want to have product expansion within the AMES segment. And while the results are looking positive, part of the story here is that we had a terrible winter from a snow standpoint. So our revenues really reflect our diversification of our revenue stream and the hard work that we've done from a manufacturing efficiency standpoint to convert that into profitability. So from where we're sitting we actually think we observed a terrible U.S. and Canada snow season and still delivered the topline and the bottom line results that we’re very happy about it. The offset of having businesses that are counter-cyclical seasonal, which Australia when we’re in winter, they are in their summer and vice versa is part of the long term strategy. So the Australian acquisitions that we’ve made have gone quite well. We continue to look to expand our business there through more products and we’ll continue to look at expanding with our customers particularly Bunnings who are in the process of expanding to the U.K. So we look to follow them and their successful rollout with Homebase and we're looking to expand all of the AMES products and businesses to both the U.K. and over time to other opportunistic jurisdictions. So this is actually for us a quite good example of even with weather volatility, our ability to manage the manufacturing side of both AMES and the door business into what we hope is a continued recovery.

Okay. Great and then on doors you obviously highlighted the Troy facility has expansion opportunity there. Can you just I guess two things, talk about the progress with Troy and how that has worked out? And then also I think in the past you've talked a little about potentially looking to expand commercial doors as well that opportunity. What’s the latest thoughts on that potential adjacent growth opportunity?

Yeah , the capacity expansion is ongoing in Troy, which we expect to be finished this fiscal year. So it hasn’t had an impact, but most importantly it hasn’t had a disruption and we continue to operate very well in spite of the fact that 20% of our future capacity is ripping up the building that we're currently in. So, I’m very pleased about how we've been able to both deal with our existing business while planning for the future business and we believe that, over the next five years that capacity is going to become a limitation and we have invested in this business for the long run. We’ve recovered from where we were at the depths of the financial crisis when this business had lost more than a third of its topline and almost all of its profitability we consolidated, we invested in those facilities, we're now expanding it six years later, which is a reflection of our view of the outlook for both the garage door business, residential garage door business and over time we want to increase our ability to be a provider to the commercial door business. That capacity expansion is a step towards being able to do that.

Great. And then just quickly over to the Telephonics side. Obviously on films, we’re seeing some of the fruits of the R&D with Sof-flex if I said it right this time, can you give us an update on when we'll see some I guess new innovation and the fruits of the R&D which you've been spending on the Telephonics side and how that three to five year outlook is coming out for Telephonics right now?

We continue to believe that this is going to be measured over the long term. Short term we have things like JLTV which we're on the near term horizon, but the core of Telephonics business remains solid in spite of what is still a muddle the defense budgetary backdrop. So, we’re optimistic that the budgetary constraints are going to change in 2017 and beyond, but the R&D that we've been spending is meant to be for long lived future products that will go into production. The core of the business remains solid. The performance of the business in spite of what’s going in the overall defense industry is actually quite good and which speaks to how well our products are received. How necessary they are. So intelligent, surveillance, reconnaissance products, which is the core of the Telephonics offering continue to be business for the foreseeable future. New innovations is a result of R&D or things that we hold happen, but we look at this as investing in our technology in order to keep our advantage in that business.

Great. Thanks very much.

[Operator Instructions] We'll take our next question from Justin Bergner with Gabelli & Company.

Good afternoon.

Hi Justin.

Hi Justin.

How are you guys.

Great. Thank you.

First question, I just wanted to make sure I heard the plastics EBIT bridge correctly. Were you suggesting there is a $1.7 million headwind from the raw material lag in the EBIT bridge year-on-year in Clopay Plastic plastics?

That's correct.

Okay. So if I add back that $1.7 million, I am looking at EBIT only down about 15% on sales down 17%. So essentially no margin degradation.

That's correct.

That's correct. We have maintained good margin in that business despite the lower sales in North America.

Okay. Is that because you're triaging less attractive sales still within your portfolio or is that because productivity gains are still coming through or little bit of both.

Customer orders went down in North America.

Okay.

We continue to have efficiency gains. If you recall, we had inefficiency, yet we brought down and brought back an equipment in Europe last quarter. As that has improved, we have seen benefits from that, which helps offset the lower sales impact on EBITDA, which we're quite encouraged about the performance of our plastics business that it was able to navigate even with declines in customer orders to be able to maintain its margins, particularly around our North American business. So we think we've become a much more efficient manufacturer in that with increases in revenue that we can continue to grow this business significantly plus the Sof-flex investments and what that might do to be able to grow both the topline and what we hope is an expansion of margins.

Got it. That's helpful. My second question just relates to the Telephonics orders that you announced during the quarter and said today with respect to the border patrol here at Nevada. Are those orders are all part of the backlog as of March 31, 2016, or only part of those orders?

Those orders are part of the backlog that are funded.

Okay. So those two orders are sort of a $30 million plus delta, positive delta in your backlog March 31 versus December 31?

Correct. Those were booked during the quarter.

Okay. Great. Are there more opportunities like those that you're working through in your front log and what sort of time horizon should we think about those orders as delivering across?

Both of those orders will mostly be in this year with some in the beginning of next year.

And other opportunities of this sort that are in the $10 million to $20 million range and represent extensions of your core technologies?

We're regularly working on opportunities. We didn't say that looking forward it's any different than in the past. We have these coming, but conservatively I wouldn't say that they will continue at that pace.

Okay. Great. Are then finally should we expect potentially more M&A activity in the second half of the year. How do you see the potential prospects in the environment to go around do good deals at relatively attractive valuations?

We're very busy. That doesn’t mean we're going to increase our probability of getting things done, but I can tell you that we see a lot of things that are attractive, but there is a lot of capital still chasing assets. So nothing comes cheaply, but our story is really about management and execution. So while there is an unlimited amount of capital, I think the scare resources management, I think we've done a very good job of managing the business that we have and we like our strategy of putting up increasingly better performance over the years with the businesses that we own and we love the opportunity to buy more businesses. But the reality is while we're very busy in the M&A standpoint, it's hard to predict whether anything in fact will come to fruition and the likely scenario is that nothing will come to fruition and will continue to be very satisfied just to deal with the businesses that we currently have and try to make them increasingly more valuable.

Great. Thanks Ron. Thanks Brian.

Thank you.

Thank you. That does conclude today's question-and-answer session. Mr. Ron Kramer, at this time I'll turn the conference back to you for any additional or closing remarks.

Thank you. And we'll be working hard the balance of the year. We'll look forward to talking to you in August.

That concludes today's conference and thank you for your participation.