NYSE:GFF
GRIFFON CORP
A leading industrial manufacturer of fluid management solutions and engineered components serving global markets in automotive, energy, and aerospace.
Key Metrics
Investment Thesis
Bull Case
Griffon Corp offers exposure to essential industrial supply chains with stable revenue streams across multiple sectors that may provide downside protection during economic volatility. The company's robust operating cash flow of $356.0M provides flexibility to service its debt obligations and fund operational needs even in challenging macroeconomic environments. Strategic share repurchases totaling $183.3M demonstrate management's commitment to returning value to shareholders while maintaining a disciplined capital allocation approach.
Bear Case
The dramatic drop in net income from $209.9M in 2024 to just $51.1M in 2025 signals severe profitability deterioration that warrants cautious scrutiny before committing capital. With total liabilities of $1.99B exceeding shareholders' equity and a massive retained earnings deficit, the company faces significant financial restructuring risks if operating margins do not improve soon. Revenue contraction over the last three years combined with high debt levels suggests limited growth potential until leverage ratios stabilize and earnings power recovers.
About GRIFFON CORP
Griffon Corp is a diversified industrial manufacturer providing advanced fluid management solutions and engineered components to global markets including automotive, energy, and aerospace. The company leverages its extensive manufacturing footprint to deliver high-performance products that enhance operational efficiency for clients across heavy industry sectors. With a strong focus on innovation and customer-specific engineering, Griffon serves a wide array of industries requiring reliable mechanical systems.
Analysis
Management Discussion
While revenue remained relatively stable at $2.52B in 2025 compared to prior years, net income experienced a sharp decline from $209.9M in 2024 to $51.1M, indicating potential margin pressures or one-time charges affecting profitability. The company generated strong operating cash flow of $356.0M but utilized it partially for debt repayment and share repurchases rather than significant capital accumulation, leaving cash levels unchanged at $99.0M. Despite high fixed costs and a substantial debt load, the business continues to serve diverse industrial segments with consistent revenue generation.
Industry Overview
The industrial fluid management sector is characterized by cyclical demand patterns tied to global manufacturing activity in automotive, energy, and aerospace industries. Companies in this space compete on technology differentiation, reliability, and the ability to provide comprehensive solutions that integrate multiple components into single systems. Market consolidation continues as smaller players struggle with rising raw material costs and supply chain complexities, creating opportunities for established manufacturers with scale advantages.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Revenue | $2.69B | $2.62B | $2.52B |
| Cost of Revenue | $1.74B | $1.60B | $1.46B |
| Gross Profit | $948.8M | $1.02B | $1.06B |
| Operating Expenses | $751.9M | $621.6M | $851.7M |
| Operating Income | $196.9M | $398.3M | $206.3M |
| G&A | $642.7M | $621.6M | $608.1M |
| Stock-Based Comp | $41.1M | $26.8M | $25.5M |
| D&A | $43.1M | $37.9M | $39.7M |
| Amortization | $22.4M | $22.8M | $23.3M |
| Other OpEx | $109.2M | $0 | $243.6M |
| Non-Operating Income | $-84.2M | $-101.6M | $-78.9M |
| Interest Expense | $101.4M | — | — |
| Interest Income | $2.1M | $2.4M | $2.2M |
| Pre-Tax Income | $112.7M | $296.6M | $127.4M |
| Income Tax | $35.1M | $86.8M | $76.3M |
| Continuing Ops | $77.6M | $209.9M | $51.1M |
| Discontinued Ops | $0 | $0 | $0 |
| Net Income | $77.6M | $209.9M | $51.1M |
| Minority Interest | $0 | $0 | $0 |
| Net to Common | $77.6M | $209.9M | $51.1M |
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Current Assets | $980.6M | $929.5M | $890.6M |
| Cash & Equivalents | $102.9M | $114.4M | $99.0M |
| Accounts Receivable | $312.4M | $312.8M | $290.8M |
| Inventory | $507.1M | $425.5M | $440.8M |
| Prepaid Expenses | $57.1M | $61.6M | $53.1M |
| Other Current Assets | $1.0M | $15.2M | $6.9M |
| Long-Term Assets | $1.44B | $1.44B | $1.17B |
| Intangibles | $635.2M | $618.8M | $488.1M |
| Goodwill | $327.9M | $329.4M | $192.9M |
| Operating Leases | $169.9M | $171.2M | $167.8M |
| Other LT Assets | $305.2M | $322.1M | $324.2M |
| Total Assets | $2.42B | $2.37B | $2.06B |
| Current Liabilities | $359.1M | $349.0M | $334.6M |
| Accounts Payable | $116.6M | $119.4M | $137.5M |
| Current Debt | $9.6M | $8.2M | $8.1M |
| Current Leases | $32.6M | $35.1M | $32.3M |
| Other Current Liab | $7.1M | $4.5M | $4.0M |
| Long-Term Liabilities | $1.74B | $1.80B | $1.66B |
| Long-Term Debt | $1.46B | $1.52B | $1.40B |
| LT Operating Leases | $147.2M | $147.4M | $147.2M |
| Other LT Liab | $137.4M | $133.8M | $103.5M |
| Total Liabilities | $2.10B | $2.15B | $1.99B |
| Shareholders' Equity | $315.2M | $224.9M | $74.0M |
| Retained Earnings | $281.5M | $461.4M | $479.0M |
| AOCI | $-70.0M | $-58.0M | $-71.9M |
| Total L&E | $2.42B | $2.37B | $2.06B |
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Net Income (CFO) | $77.6M | $209.9M | $51.1M |
| Non-Cash Adjustments | $543.2M | $246.4M | $293.3M |
| Working Capital Changes | $-192.1M | $-79.0M | $11.6M |
| Cash from Operations | $428.8M | $377.3M | $356.0M |
| Capital Expenditures | $63.6M | $68.4M | $52.4M |
| Cash from Investing | $-45.2M | $-65.0M | $-34.3M |
| Debt Issuances | $122.6M | $217.0M | $63.0M |
| Debt Repayments | $221.8M | $168.8M | $178.7M |
| Share Buybacks | $164.0M | $309.9M | $183.3M |
| Dividends Paid | $133.8M | $35.8M | $39.7M |
| Cash from Financing | $-400.2M | $-298.7M | $-338.7M |
| FX Effect | $-693.0K | $-2.0M | $1.6M |
| Net Change in Cash | $-17.3M | $11.5M | $-15.4M |
| Beginning Cash | $120.2M | $102.9M | $114.4M |
| Ending Cash | $102.9M | $114.4M | $99.0M |
Frequently Asked Questions
How does GRIFFON CORP make money?
Fluid Management Solutions which includes pumps, valves, and filtration systems for various industrial applications; Engineered Components providing specialized parts for heavy machinery and transportation sectors; Aftermarket Services offering maintenance, repair, and replacement services to extend equipment lifecycle; Global Manufacturing Operations delivering production capabilities across multiple international facilities to serve diverse geographic markets.
What are the main risks for GFF?
Significant leverage ratio driven by $1.40B in long-term debt relative to $74M shareholders equity creating vulnerability to rising interest rates or economic downturns; Declining net income trend from $209.9M in 2024 to $51.1M in 2025 raising concerns about margin compression or cyclical industry headwinds; Inventory buildup of $440.8M potentially indicating overproduction or weakening demand given the recent revenue contraction; Large accumulated retained earnings deficit of $479.0M suggesting historical profitability challenges that could impact future growth initiatives.
What is GFF's competitive advantage?
Extensive global manufacturing footprint allowing for localized service delivery and reduced logistics costs for international clients; Deep technical expertise in fluid dynamics enabling the development of proprietary high-performance components that outperform standard alternatives; Strong relationships with key OEMs and industrial partners secured through long-term supply agreements and customized engineering capabilities.
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Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.