Operator: Good day, and welcome to the Griffon Corporation Fiscal Third Quarter 2026 Earnings Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Brian Harris, CFO. Please go ahead.

Brian Harris: Thank you. Good morning, and welcome to Griffon Corporation's Third Quarter Fiscal 2026 Earnings Call. Joining me for this morning's call is Ron Kramer, Griffon's Chairman and Chief Executive Officer. Our press release was issued earlier this morning and is available on our website at www.griffon.com. Today's call is being recorded, and the replay instructions are included in our earnings release. Our comments will include forward-looking statements about Griffon's performance. These statements are subject to risks and uncertainties that can change as the world changes. Please see the cautionary statements in today's press release and in our SEC filings. Finally, some of today's remarks will adjust for items that affect comparability between periods. These items are explained in our non-GAAP reconciliations included in our press release. With that, I'll turn the call over to Ron.

Ronald Kramer: Thanks, Brian. Good morning, everyone, and thanks for joining us. Griffon has executed particularly well this quarter, which is reflected in today's solid operational and financial results. In the quarter, revenue increased organically by 7% and EBITDA by 2%, while generating strong year-to-date free cash flow of $194 million. Given our performance for the first 9 months of the fiscal year, we're maintaining our revenue and EBITDA guidance for the year of $1.8 billion and $458 million, respectively. Our team's performance remains outstanding, showing resiliency, managing through dynamic global economic conditions, including soft U.S. housing and commercial construction markets. Regarding our strategic actions, earlier this week, we were very pleased to announce the closing of the joint venture for our Australasia business. At closing, we received $181 million in cash, a $49 million note receivable and a 49% equity interest. The closing of the Australasia transaction concludes a series of strategic actions that have transformed Griffon into a pure-play building products company. From these transactions, we received a total of $281 million in cash, $210 million in 10% PIK notes while retaining minority interest with a book value of $139 million and an opportunity for further value creation. Turning to capital allocation. During the third quarter, we repurchased $53 million of our stock or 626,000 shares at an average price of $85 per share. At June 30, $194 million remained under the repurchase authorization. We continue to believe our stock is a compelling value. Since April 2023 and through June, we've repurchased $664 million of stock or 12.1 million shares at an average price of $54.86. These repurchases have reduced Griffon's outstanding shares by 21% relative to the total shares outstanding at the end of the second quarter of fiscal 2023. Subsequent to the June quarter, we repaid the remaining Term Loan B balance of $285 million using a combination of proceeds from our strategic actions and our revolver. Also yesterday, the Griffon Board authorized a regular quarterly dividend of $0.22 per share payable on September 16 to shareholders of record on August 31, marking the 60th consecutive quarterly dividend to shareholders. Our dividend has grown at an annualized compounded rate of 19% since we initiated dividends in 2012. These actions reflect the strength of our business, the successful execution of our strategic initiatives and our continued confidence in our strategic plan and outlook. I'll turn it over to Brian for more details on the financial results.

Brian Harris: Thank you, Ron. Third quarter revenue of $481 million represents an increase of 7% compared to the prior year quarter, benefiting from favorable price and mix of 6% and increased volume of 1%. Third quarter adjusted EBITDA of $125 million increased 2% compared to the prior year quarter, benefiting from the increased revenue, partially offset by increased material and SG&A costs. EBITDA margin was 25.9%. Gross profit for the quarter was $226 million with a 47% gross margin compared to $219 million in the prior year quarter with gross profit margin of 48.7%. Third quarter adjusted selling, general and administrative expenses were $111 million or 23% of revenue compared to the prior year of $106 million or 23.7% of revenue. Third quarter GAAP income from continuing operations was $66 million or $1.47 per share compared to a loss from continuing operations of $109 million in the prior year quarter or $2.40 per share, primarily due to prior year third quarter goodwill and intangible impairment charges. Excluding items that affect comparability from both periods, current quarter adjusted net income from continuing operations was $68 million or $1.51 per share compared to the prior year of $64 million or $1.39 per share. Year-to-date, free cash flow from continuing operations was $194 million compared to $202 million in the prior year. Year-to-date, net capital expenditures were $24 million compared to $32 million in the prior year. We expect free cash flow continuing operations for the full fiscal year will be in excess of income from continuing operations. Regarding our balance sheet and liquidity, as of June 30, 2026, we had net debt of $1.2 billion and net debt-to-EBITDA leverage of 2.2x as calculated based on our debt covenants compared to 2.5x leverage at the end of last year's third quarter. During the first 9 months of the fiscal year, we returned $135 million to shareholders through dividends and stock buybacks, while reducing leverage from 2.4x in September 2025 to 2.2x at the end of June. All leverage amounts exclude receivable -- notes receivable from the transaction. Pro forma for the closing of the Australia transaction on July 31, our net leverage is approximately 2.0x. With the strategic initiatives substantially complete and the Term Loan B paid off, our new net debt-to-EBITDA leverage target range is 1.5x to 2.5x. Regarding our expectations for the year, we are maintaining our fiscal 2026 revenue and EBITDA guidance based on the results we have seen year-to-date. We continue to expect revenue of $1.8 billion for fiscal 2026 on a continuing operations basis and adjusted EBITDA of $458 million, which excludes certain charges that affect comparability. We continue to expect free cash flow from continuing operations to exceed net income from continuing operations. We also continue to expect capital expenditures to be $50 million, depreciation to be $27 million and amortization to be $15 million. Fiscal year 2026 interest expense is now expected to be $80 million, reflecting a $13 million reduction from prior guidance, resulting from debt paydown and the benefit of interest income from the transaction PIK note receivables. Normalized tax rate is expected to be 28%. Now I'll turn the call back over to Ron.

Ronald Kramer: Thanks, Brian. Our fiscal 2026 remains on track with our guidance. Our teams are executing well as evidenced by our solid operating performance this quarter and year-to-date. We remain confident in our financial outlook. We're optimistic that residential and commercial markets will return to growth and expect to realize substantial operating leverage as activity improves. With respect to capital allocation, we are committed to using our strong operating performance and free cash flow to drive a capital allocation strategy that delivers long-term value for our shareholders. This includes supporting our quarterly dividend, opportunistically repurchasing shares and reducing debt. As always, I'd like to recognize the outstanding efforts of the teams across our business. It's their dedication and performance that drive our success. We're grateful for all of their contributions. Operator, we'll take any questions.

Operator: [Operator Instructions] The first question is from Tim Wojs with Baird.

Timothy Wojs: Maybe just on the first one -- first question I had. I think in the overhead door business, one of your competitors is going through some consolidation efforts, and our understanding is they've had some issues manufacturing and shipping. Is that anything that -- I guess, is that something that you're seeing in the marketplace? And is that an opportunity for you from a share perspective?

Brian Harris: We remain more than capable to fulfill demand that is out there. We continue to perform well in the market and trust our dealers, our customers to -- and sell our products well and continue to benefit from that.

Ronald Kramer: And we're always looking to increase market share.

Timothy Wojs: Okay. And then I guess on the business, I mean, 6% price/mix. It sounds like volume is up a little bit. Just any additional color on just how kind of the individual pieces performed, whether it's kind of replacement in residential or the commercial market, just what performed better versus the overall average?

Brian Harris: Sure. So door volume for the quarter was down slightly, driven by residential, and this was more than offset by the fan volume, leaving our commercial volume flat.

Operator: The next question is from Bob Labick with CJS Securities.

Lee Jagoda: It's Lee Jagoda for Bob this morning. Just starting on the residential side, what are some of the growth drivers within your control to drive potentially some top line while we wait for housing starts and the macro?

Brian Harris: Yes. We continue to execute on innovation coming out with new products that have had good take in the market. Our designs over the last decade have brought our company and the entire door industry up to scale, and we continue to perform on that basis. And we are ready for any turn in volume that comes with a better housing market.

Ronald Kramer: And I'd also add that Clopay is best-in-class both in terms of product, service and national footprint. And part of the dichotomy in the economy is the premium market continues to do well. And we are very focused on the repair and remodel side of the premium, better, best category, and that continues to do well in an otherwise sluggish U.S. housing market. We continue to believe that there's upside in both transaction volume and ultimately, new home construction that we'll be a beneficiary of, but it's a small part of our overall picture today.

Lee Jagoda: And then on the commercial side, can you speak to how the commercial replacement cycle is similar or different to the residential side and where we stand in that cycle today?

Brian Harris: Generally, the replacement cycle on the commercial side is shorter. So we deem it as approximately 7 years depending on the product and location it's installed. New construction is relatively low compared to prior years, but we have a large install base. And when new construction is lower, generally replacement and refurbishment of existing facilities is higher.

Operator: The next question is from Collin Verron with Deutsche Bank.

Collin Verron: I just wanted to dive a little bit further into the price/mix in the quarter. It was very strong at 6% again. I mean, can you just break out the benefit between price versus mix and sort of how you're thinking about those components going forward? I know mix can be a little bit volatile quarter-to-quarter.

Brian Harris: Yes. So for the quarter, price and mix were approximately equal. And looking forward, we had a price increase during the quarter. So that will continue to effectuate as we get through backlog. Mix is hard to predict. But as we continue to bring new products to market, we continue to expect good mix.

Collin Verron: Great. That's helpful. And then just on the cost side, any help in thinking about the magnitude of COGS inflation that you guys are seeing in your expectations as you look out into the September quarter and maybe the beginning parts of fiscal year '27?

Brian Harris: Sure. So obviously, all our expectations are in our guidance. We had the price increase, as I just mentioned, that was to offset increases in raw material, labor, energy, distribution and logistics costs. And we expect that, that price increase and our margin -- the pricing increase will keep our margins at 25% plus.

Operator: The next question is from Trey Grooms with Stephens.

Trey Grooms: Congrats on the nice results. Yes, so I wanted to kind of follow up with the price cost question. And you've got the price increase in place. Raw materials, there has been some fluctuation. I know there's typically a lag there. I think we have a decent idea of how you're thinking about 4Q. But all else equal, now that we have these things in place, as we look into next year, do you expect to see maybe a little more catch-up as we get into the fiscal 1Q or 2Q? Or do you feel like most of that kind of price cost catch-up is going to occur in 4Q?

Brian Harris: So most of that should occur in 4Q, but of course, you're lapping as the year goes into next year. We feel like we've put an appropriate price increase based on the inflationary costs, and we'll provide further guidance in November.

Trey Grooms: Okay. Fair enough. Just trying to get an idea for the trajectory there as maybe we look a little bit further out, but that's fair enough. So maybe thinking about this a little bit longer term. Now as a pure-play building products company, I know there's going to be leverage in the business as we kind of look forward over the longer term. And as we get into a position where demand begins to improve, how are you thinking about these businesses over the longer term, kind of the incremental margin as we are looking at the business as it stands today, pure-play building products. Within those 2, how do you think about the longer-term kind of incremental margin opportunities as demand improves because -- you guys are putting up good results in a market that's operationally demanding -- the demand is relatively challenged.

Ronald Kramer: Look, I think you have to look at where we've come from, the evolution of the business and Clopay is now both residential, commercial and the drivers of both of those engines are going to be better in a better economy and a better housing market. Our results are both excellent given the circumstances and the environment that we've been operating in. And what you should take away is that our balance sheet is positioned for us to continue to grow the business. We have modest leverage on the company today, and we have significant operating leverage in the businesses. So with any incremental growth in volume, you should expect us to have significantly higher free cash flow. And that is exactly the way we've positioned the company for the long run.

Operator: The next question is from Sam Darkatsh with Raymond James.

Sam Darkatsh: Yes, 2 questions. The first one is, how did the quarter progress as we moved from April into June? And then specifically, how does July look versus the trajectory of the rest of the quarter?

Brian Harris: Sure. So generally, as we move out of the winter season through the spring and into the summer, the months progress and continue to get better in our normal seasonality, and that's exactly what we saw. And we expect our fourth quarter to be our high point as it normally is, and Q1 generally is similar to Q4.

Ronald Kramer: And trends in July continue.

Sam Darkatsh: Good to hear. And then my follow-up question, given the smaller operating footprint post AMES, any thoughts in terms of the corporate overhead on a go-forward basis?

Brian Harris: Sure. So we regularly review all our costs, and we'll continue to do so. Our guidance assumes EBITDA margin of 25% plus, and that includes all costs.

Operator: The next question is from Julio Romero with Sidoti & Company.

Julio Romero: Congrats on the execution and being a pure-play building products company. And a lot of good questions this morning. I wanted to dive into more along Trey's line of questioning on the pure-play story going forward and then your product positioning, particularly on the commercial side. You have best-in-class garage doors and part of that is the innovation that you have in your doors. Can you maybe discuss how your doors can play a part in some of the emerging secular growth end markets that are out there, data centers, semiconductor, pharma over the medium to longer term?

Brian Harris: Sure. So our products do play in all those spaces and data centers, it's both entry and fire protection inside the facility. Our doors are used as partitions. In pharmacy and other tight places, our doors are used for security. We have actually very high-end secure doors that can even be used in embassies and places like that, and we continue to innovate and we'll continue to have product launches that meet the needs of both commercial and residential needs.

Ronald Kramer: And to meet that demand, we've been building up an architectural sales force, getting significantly more inquiries. And it's our belief that over time, our commercial business is going to grow in addition to the recovery in the U.S. housing market on the residential side. So the commercial, everything you've identified are avenues of growth for us on the commercial side of the business.

Julio Romero: That's great color, Ron. And do you get specced into those projects? And if so, how far out does your visibility extend?

Ronald Kramer: Longer lead time. And as I said, we're seeing a meaningful increase in the number of inquiries, which will lead to bids. So it's a longer process, but we're very confident about what the future of that business is going to look like.

Operator: The next question is from Jeffrey Stevenson with Loop Capital.

Jeffrey Stevenson: You reported a nice step-up in sequential EBITDA margin during the quarter. And was this driven by the sequential volume improvement you saw? Was that the primary driver? Did you see incremental price realization as well from the spring Clopay price increases?

Brian Harris: Yes, it was definitely more from volume and mix. Price, we look at it as offsetting cost. And generally, our Q3 does see better volume compared to our Q2, as Q2 is our lowest volume quarter in the winter.

Jeffrey Stevenson: Great. And then congrats on the close of the Australian JV. And you have large cash proceeds from both that and the North America joint venture as well. And just wonder, should we expect a balanced mix of share repurchases and debt paydown in line with your kind of historical capital strategy?

Brian Harris: So from a free cash flow standpoint, we have a balanced approach between return of capital to shareholders and debt reduction. The money from the transactions was used to pay off our TLB. So that specifically was used for debt reduction.

Operator: This concludes the question-and-answer session. I would like to turn the conference back over to Ron Kramer, CEO, for any closing remarks.

Ronald Kramer: We're encouraged by the outlook for our business and the momentum we've been building through our transformation. We've accomplished a lot, and we're positioned for continued growth and long-term value for our shareholders. Looking forward to talking to you again in November. Thanks.

Operator: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.