REPORTABLE SEGMENTS |
REPORTABLE SEGMENTS
Griffon’s reportable segments are as follows:
| | • | HBP is a leading manufacturer and marketer of residential, commercial and industrial garage doors to professional installing dealers and major home center retail chains, as well as a global provider of non-powered landscaping products that make work easier for homeowners and professionals. |
| | • | Telephonics develops, designs and manufactures high-technology integrated information, communication and sensor system solutions to military and commercial markets worldwide. |
| | • | Plastics is an international leader in the development and production of embossed, laminated and printed specialty plastic films used in a variety of hygienic, health-care and industrial applications. |
Griffon evaluates performance and allocates resources based on operating results before interest income or expense, income taxes and certain nonrecurring items of income or expense.
Information on Griffon’s reportable segments is as follows: | | | | | | | | | | | | | | For the Years Ended September 30, | REVENUE | 2014 | | 2013 | | 2012 | Home & Building Products: | |
| | |
| | |
| AMES | $ | 503,687 |
| | $ | 419,549 |
| | $ | 433,866 |
| CBP | 475,756 |
| | 435,416 |
| | 422,674 |
| Home & Building Products | 979,443 |
| | 854,965 |
| | 856,540 |
| Telephonics | 419,005 |
| | 453,351 |
| | 441,503 |
| Plastics | 593,363 |
| | 563,011 |
| | 563,102 |
| Total consolidated net sales | $ | 1,991,811 |
| | $ | 1,871,327 |
| | $ | 1,861,145 |
|
| | | | | | | | | | | | | | For the Years Ended September 30, | INCOME (LOSS) BEFORE TAXES | 2014 | | 2013 | | 2012 | Segment operating profit: | | | | | | Home & Building Products | $ | 40,538 |
| | $ | 26,130 |
| | $ | 37,082 |
| Telephonics | 45,293 |
| | 55,076 |
| | 49,232 |
| Plastics | 28,881 |
| | 16,589 |
| | 13,688 |
| Total segment operating profit | 114,712 |
| | 97,795 |
| | 100,002 |
| Net interest expense | (48,144 | ) | | (52,167 | ) | | (51,715 | ) | Unallocated amounts | (33,394 | ) | | (29,153 | ) | | (26,346 | ) | Loss from debt extinguishment | (38,890 | ) | | — |
| | — |
| Loss on pension settlement | — |
| | (2,142 | ) | | — |
| Income (loss) before taxes from continuing operations | $ | (5,716 | ) | | $ | 14,333 |
| | $ | 21,941 |
|
Griffon evaluates performance and allocates resources based on each segments’ operating results before interest income and expense, income taxes, depreciation and amortization, unallocated amounts (mainly corporate overhead), restructuring charges, acquisition-related expenses including the impact of the fair value of inventory acquired as part of a business combination, and gains (losses) from pension settlement and debt extinguishment, as applicable (“Segment adjusted EBITDA”, a non-GAAP measure). Griffon believes this information is useful to investors for the same reason.
The following table provides a reconciliation of Segment adjusted EBITDA to Income (loss) before taxes and discontinued operations: | | | | | | | | | | | | | | | | 2014 | | 2013 | | 2012 | Segment adjusted EBITDA: | |
| | |
| | |
| Home & Building Products | $ | 77,171 |
| | $ | 70,064 |
| | $ | 70,467 |
| Telephonics | 57,525 |
| | 63,199 |
| | 60,565 |
| Plastics | 56,291 |
| | 48,100 |
| | 40,000 |
| Total Segment adjusted EBITDA | 190,987 |
| | 181,363 |
| | 171,032 |
| Net interest expense | (48,144 | ) | | (52,167 | ) | | (51,715 | ) | Segment depreciation and amortization | (66,978 | ) | | (70,306 | ) | | (65,864 | ) | Unallocated amounts | (33,394 | ) | | (29,153 | ) | | (26,346 | ) | Loss from debt extinguishment | (38,890 | ) | | — |
| | — |
| Restructuring charges | (6,136 | ) | | (13,262 | ) | | (4,689 | ) | Acquisition costs | (3,161 | ) | | — |
| | (477 | ) | Loss on pension settlement | — |
| | (2,142 | ) | | — |
| Income (loss) before taxes from continuing operations | $ | (5,716 | ) | | $ | 14,333 |
| | $ | 21,941 |
|
| | | | | | | | | | | | | | For the Years Ended September 30, | DEPRECIATION and AMORTIZATION | 2014 | | 2013 | | 2012 | Segment: | | | | | | Home & Building Products | 31,580 |
| | $ | 36,195 |
| | $ | 32,034 |
| Telephonics | 7,988 |
| | 7,373 |
| | 7,518 |
| Plastics | 27,410 |
| | 26,738 |
| | 26,312 |
| Total segment depreciation and amortization | 66,978 |
| | 70,306 |
| | 65,864 |
| Corporate | 418 |
| | 442 |
| | 400 |
| Total consolidated depreciation and amortization | 67,396 |
| | $ | 70,748 |
| | $ | 66,264 |
| | | | | | | CAPITAL EXPENDITURES | |
| | |
| | |
| Segment: | |
| | |
| | |
| Home & Building Products | $ | 33,779 |
| | $ | 30,695 |
| | $ | 24,648 |
| Telephonics | 20,963 |
| | 11,112 |
| | 11,979 |
| Plastics | 21,032 |
| | 22,509 |
| | 32,069 |
| Total segment | 75,774 |
| | 64,316 |
| | 68,696 |
| Corporate | 1,320 |
| | 125 |
| | 155 |
| Total consolidated capital expenditures | $ | 77,094 |
| | $ | 64,441 |
| | $ | 68,851 |
|
| | | | | | | | | | | | | ASSETS | | | | | | Segment assets: | |
| | |
| | |
| Home & Building Products | $ | 1,030,005 |
| | $ | 897,215 |
| | $ | 940,495 |
| Telephonics | 319,327 |
| | 296,919 |
| | 255,420 |
| Plastics | 389,464 |
| | 422,730 |
| | 430,395 |
| Total segment assets | 1,738,796 |
| | 1,616,864 |
| | 1,626,310 |
| Corporate | 77,814 |
| | 156,455 |
| | 173,088 |
| Total continuing assets | 1,816,610 |
| | 1,773,319 |
| | 1,799,398 |
| Assets of discontinued operations | 3,751 |
| | 4,289 |
| | 3,523 |
| Consolidated total | $ | 1,820,361 |
| | $ | 1,777,608 |
| | $ | 1,802,921 |
|
Segment information by geographic region was as follows: | | | | | | | | | | | | | | For the Years Ended September 30, | REVENUE BY GEOGRAPHIC AREA - DESTINATION | 2014 | | 2013 | | 2012 | United States | $ | 1,386,575 |
| | $ | 1,319,740 |
| | $ | 1,317,911 |
| Europe | 254,460 |
| | 255,733 |
| | 255,323 |
| Canada | 134,637 |
| | 114,984 |
| | 120,457 |
| South America | 105,691 |
| | 103,840 |
| | 93,243 |
| All other countries | 110,448 |
| | 77,030 |
| | 74,211 |
| Consolidated revenue | $ | 1,991,811 |
| | $ | 1,871,327 |
| | $ | 1,861,145 |
| | | | | | | | For the Years Ended September 30, | LONG-LIVED ASSETS BY GEOGRAPHIC AREA | 2014 | | 2013 | | 2012 | United States | $ | 439,737 |
| | $ | 421,604 |
| | $ | 422,647 |
| Germany | 74,457 |
| | 82,314 |
| | 84,480 |
| Canada | 42,374 |
| | 46,792 |
| | 50,894 |
| All other countries | 47,620 |
| | 24,274 |
| | 29,331 |
| Consolidated property, plant and equipment, net | $ | 604,188 |
| | $ | 574,984 |
| | $ | 587,352 |
|
As a percentage of consolidated revenue, HBP sales to Home Depot approximated 12% in 2014, 11% in 2013 and 12% in 2012; Plastics sales to P&G approximated 14% in both 2014 and 2013, and 13% in 2012; and Telephonics’ aggregate sales to the United States Government and its agencies approximated 15% in 2014 and 19% in both 2013 and 2012. |