Griffon (NYSE:GFF) executives used the company’s fiscal first-quarter 2026 earnings call to detail a series of portfolio actions that they said will reshape the company, alongside results that management described as a solid start to the year. The company highlighted strong free cash flow, continued profitability in its Home and Building Products segment, and improved results at Consumer and Professional Products, even as U.S. consumer demand remained weak.
First-quarter results and cash flow
For the quarter, Griffon reported revenue of $649 million, up 3% from the prior-year period. Adjusted EBITDA before unallocated amounts was $145 million, in line with the prior year, with an EBITDA margin before unallocated amounts of 22.3%.
Management emphasized cash generation, citing free cash flow of $99 million in the quarter. Capital expenditures were $8 million, compared with $17 million of gross capital expenditures in the prior-year quarter.
Segment performance: HBP steady, CPP profitability improves
Home and Building Products (HBP) revenue rose 3% year over year, with management attributing the gain to strong price and mix—up 7% across residential and commercial products—partly offset by reduced residential volumes. Adjusted EBITDA for HBP declined 3%, and EBITDA margin was 30.1%. CFO Brian Harris said the benefit of higher revenue was “more than offset” by unfavorable material costs, labor costs, operating expenses, and the impact of lower volume on absorption.
Consumer and Professional Products (CPP) revenue increased 2% to $241 million. Management said price and mix and higher volume in Australia and Canada offset weaker volume in the U.S., where consumer demand “remained soft.” CPP adjusted EBITDA increased 19% to $22 million, which executives framed as continued year-over-year progress despite U.S. demand headwinds.
Joint venture with ONCAP and discontinued operations reporting
Chairman and CEO Ron Kramer said the company announced “exciting news” tied to the creation of a joint venture with ONCAP, the middle-market private equity platform of Onex Corporation. The venture will combine Griffon’s AMES businesses in the United States and Canada with ONCAP’s global portfolio of hand tool businesses, including Corona (U.S.), Burgon & Ball (U.K.), and Bellota Hand Tools (operating in Europe and Central and South America).
Kramer said the transaction is intended to create a “leading global provider of hand tools, home organizational solutions, and lawn and garden products” with brands including AMES, Bellota, Burgon & Ball, ClosetMaid, Corona, Garant, Razor-Back, and True Temper. He pointed to opportunities to streamline operations and achieve economies of scale.
Harris outlined the transaction economics and structure:
- ONCAP will own 57% of the joint venture, which will be operated as an ONCAP portfolio company.
- Griffon will receive $100 million of cash proceeds at closing and $160 million of second lien debt from the joint venture.
- Griffon will retain a 43% ownership stake.
In the Q&A, Harris said the second lien debt carries a “10% PIK rate.” He added that Griffon’s minority interest share of net income from the joint venture is not expected to be significant, citing the venture’s debt and amortization and stating that net income “will not be material.”
Management said the joint venture is expected to close by the end of June. When asked about the combined entity’s results, executives said they were not disclosing the combined EBITDA, but noted the other side of the combination is “slightly smaller than we are.”
As part of the strategic shift, Harris said that beginning in Griffon’s second quarter of fiscal 2026, the company will report the U.S., Canada, Australia, and U.K. AMES-related businesses as discontinued operations. He also said the expected fiscal 2026 EBITDA for the discontinued businesses is $60 million, consisting of $25 million for AMES North America and $40 million for Australia, with the U.K. operating at negative EBITDA.
Additional portfolio actions and Hunter Fan move into HBP
Beyond the joint venture, Kramer said Griffon is taking additional steps that “once completed, will transform Griffon into a pure-play building products company.” Those actions include a strategic review of alternatives for AMES Australia and AMES United Kingdom, as well as combining Hunter Fan with the Home and Building Products segment.
On Hunter, Harris said the business generated $211 million of revenue in fiscal 2025. When asked how the combination might affect segment margins, Harris said guidance implies “roughly 29%,” but added that “ultimately this is still a 30%+ business going forward.”
Kramer said Hunter and Clopay have “exceptional positions” and that the company sees opportunities to leverage complementary sales channels across residential and commercial building products. In response to a question about examples of collaboration, Kramer cited commercial projects where large warehouse and industrial facilities may require both rolling steel door products and large commercial fans, and also pointed to a Hunter product designed to enable fan installation in garages.
In explaining why the company pursued a joint venture rather than an outright sale, Kramer said the structure enables Griffon to unlock value now and potentially realize additional value later through its retained ownership. He also said “the current market for consumer companies is not a very good one.” Kramer said Hunter was not included in the joint venture because management sees stronger alignment and upside potential with HBP, and he characterized selling Hunter in a weak consumer environment as “poor timing.”
Balance sheet, capital returns, and updated outlook
Griffon ended the quarter with net debt of $1.26 billion and net debt-to-EBITDA leverage of 2.3 times, compared with 2.4 times at the end of the prior-year first quarter and at the end of fiscal 2025. Harris said the company paid down $60 million of Term Loan B during the quarter, while also returning $29 million to shareholders through repurchases and dividends.
During the quarter, Griffon repurchased $18 million of stock, or 247,000 shares, at an average price of $73.21. Management said $280 million remained under its repurchase authorization as of December 31. Kramer also noted the board declared a quarterly dividend of $0.22 per share, payable March 18 to shareholders of record February 27, marking the 58th consecutive quarterly dividend. He said the dividend has grown at a compounded annualized rate of 19% since initiation in 2012.
Looking ahead, Griffon updated its outlook for continuing operations following the announced strategic actions. Harris said the company now expects full-year fiscal 2026 revenue from continuing operations of $1.8 billion and adjusted EBITDA of $520 million, excluding unallocated costs of $62 million. The company expects free cash flow from continuing operations, including $50 million of capital expenditures, to exceed net income. Harris also projected depreciation of $27 million, amortization of $15 million, interest expense of $93 million, and a normalized tax rate of 28%.
In the Q&A, Kramer reiterated that capital allocation priorities remain focused on buybacks, dividends, and debt reduction, stating that management believes the company’s stock is “the best acquisition we can make.”
About Griffon (NYSE:GFF)
Griffon Corporation (NYSE:GFF) is a diversified management and holding company whose subsidiaries design, manufacture and market products for residential, commercial and defense applications. Operating through three primary platforms—Home & Building Products, Defense Electronics and Specialty Industrial—Griffon’s portfolio spans consumer and industrial brands with a focus on long-lived products and recurring aftermarket opportunities.
In the Home & Building Products segment, Griffon’s Clopay Building Products division is a leading North American manufacturer of residential and commercial garage doors, specializing in steel, fiberglass and composite designs as well as decorative carriage-house styles.
