Griffon Corporation (NYSE: GFF) reported a 7% organic revenue increase to $481 million for the third quarter of fiscal 2026. Adjusted EBITDA rose 2% year-on-year to $125 million, driven by favorable price and mix gains that partially offset higher material costs.

The building products manufacturer maintained its full-year guidance of $1.8 billion in revenue and $458 million in adjusted EBITDA. Management highlighted strong operational execution despite soft U.S. housing markets, with year-to-date free cash flow reaching $194 million.

Financial Performance

Revenue growth was primarily fueled by a 6% improvement in price and mix, supported by a 1% volume increase. Gross profit totaled $226 million, reflecting a 47% gross margin, down from 48.7% in the prior-year quarter due to rising input costs.

Adjusted selling, general, and administrative (SG&A) expenses were $111 million, or 23% of revenue, compared to 23.7% in the previous year. GAAP income from continuing operations stood at $66 million ($1.47 per share), a significant turnaround from a $109 million loss in the same quarter last year, which included goodwill and intangible impairment charges.

*Prior-year figures derived from disclosed changes and margins.

Strategic Transactions and Capital Allocation

Griffon closed its Australasia joint venture, receiving $181 million in cash, a $49 million note receivable, and a 49% equity interest. This transaction marks the company’s transformation into a pure-play building products business. Total proceeds from recent strategic actions included $281 million in cash and $210 million in 10% PIK notes.

The company utilized these proceeds to repay the remaining $285 million Term Loan B balance. During the quarter, Griffon also repurchased $53 million of stock (626,000 shares) at an average price of $85 per share. Since April 2023, the company has repurchased $664 million worth of shares, reducing outstanding shares by 21%.

What the Numbers Show

The divergence between top-line growth and bottom-line expansion highlights margin pressure. While revenue grew 7% organically, adjusted EBITDA expanded only 2%. This indicates that the 6% gain from price and mix was largely consumed by increased material and SG&A costs, preventing proportional profit growth despite higher sales volumes.

Balance Sheet and Outlook

As of June 30, 2026, net debt stood at $1.2 billion, with net debt-to-EBITDA leverage at 2.2 times, down from 2.5 times at the end of last year’s third quarter. Pro forma for the Australasia transaction, leverage is approximately 2.0 times. The company targets a new leverage range of 1.5 to 2.5 times.

Management expects full-year fiscal 2026 interest expense to be $80 million, a $13 million reduction from prior guidance due to debt paydown and interest income from the PIK note. The normalized tax rate is expected to be 28%. The Board authorized a quarterly dividend of $0.22 per share, marking the 60th consecutive dividend payment.

Griffon Corporation (NYSE: GFF) has completed a $800 million senior notes offering and amended its existing credit agreement to extend debt maturity by three years. The capital raise supports the company’s balance sheet restructuring as it retires older, higher-coupon debt.

The building products manufacturer issued $800 million aggregate principal amount of 6.25% senior notes due 2034 through an unregistered private placement. The offering was conducted solely with qualified institutional buyers under Rule 144A or outside the United States under Regulation S. These notes are senior unsecured obligations guaranteed by certain domestic subsidiaries.

Debt Restructuring Details

The proceeds from the 2034 Notes issuance facilitated the redemption of Griffon’s outstanding 5.75% senior notes due 2028. Following this transaction, no 2028 Notes remain outstanding. This swap replaces higher-coupon short-term debt with lower-coupon long-term obligations, potentially reducing annual interest expenses while extending the repayment horizon.

Amended Credit Facility Terms

Griffon also amended and restated its credit agreement, pushing the maturity date from August 1, 2028, to August 18, 2031. The facility maintains a total revolver capacity of up to $500 million, comprising a $125 million letter of credit sub-facility and a $200 million foreign currency sub-facility.

Interest on the credit facility is calculated based on either the Secured Overnight Financing Rate (SOFR) or a base rate plus an applicable margin tied to Griffon’s leverage ratio. Initial pricing is set at SOFR plus 1.75% or base rate plus 0.75%. The facility allows for incremental revolving commitments and term loans up to the greater of $500 million or an amount determined by a maximum consolidated senior secured leverage ratio of 3.50 to 1.00.

The amended facility is secured by substantially all assets of Griffon and its subsidiary guarantors. It includes customary affirmative and negative covenants as well as events of default.