Greetings and welcome to Griffon Corporation’s Second Quarter 2020 Earnings Conference Call. At this time all participants are in a listen-only mode. [Operator Instructions] As a reminder, this conference is being recorded. It is now pleasure to introduce your host, Mr. Brian Harris, Chief Financial Officer. Please go ahead.

Thank you. Good afternoon, everyone. With me on the call is Ron Kramer, our Chairman and Chief Executive Officer. Our call is being recorded and will be available for playback, the details of which are in our press release issued earlier today. As in the past, our comments will include forward-looking statements about the company’s performance based on our views of Griffon’s businesses and the environments in which they operate. Such statements are subject to inherent risks and uncertainties that can change as the world changes. Please see the cautionary statements in today’s press release and in our various Securities and Exchange Commission filings. Finally, some of today’s remarks will adjust for those items that affect comparability between reporting periods. These items are explained in our non-GAAP reconciliations included in our press release. Now, I’ll turn the call over to Ron.

Thanks and good afternoon everyone. Let me start by saying, I hope that all of you and your families are safe and healthy. Griffon entered this unprecedented COVID-19 pandemic from a position of strength on an operational and a competitive basis. Our positive momentum, along with enhanced liquidity and a strengthened balance sheet, enable us to manage the near-term effects of the current environment, while continuing to make the necessary investments in our business to execute our strategic growth plan and drive long-term shareholder value. Our top priority has been and will continue to be ensuring the health and safety of our employees and our customers. Since early March, we've been proactively implementing health and safety measures across our global workforce. As local and national authorities have circulated additional guidelines for employee health and safety, we've incorporated those as well. As almost all of our facilities have been open and remain operational, our additional safety measures include: increasing the cleaning frequency and enhancing the sanitation of all of our facilities, restricting external visitor access to our facilities, adjusting production schedules and hours of operation to promote distancing between employees and the workplace, implementing work from home programs wherever possible, and canceling all air travel and unnecessary work travel. These are samplings of the broad actions we've taken across all of our businesses to protect our workers, while maintaining critical operations. In mid-March, we also began an appreciation award program to hourly U.S. employees on the front lines working at our manufacturing and distribution sites, as recognition of the difficulties they've been facing. This situation has put a tremendous strain on our entire workforce, but they've done an exceptional job keeping our operations running, while simultaneously keeping everyone safe. We owe them our gratitude, not just for doing an outstanding job,…

Thank you, Ron. I'll start by highlighting our second quarter consolidated performance compared to our prior quarter results. Revenue increased 3% to $566 million and adjusted EBITDA increased 13% to $48 million. Gross profit for the quarter was $152 million, which includes $1.4 million of charges related to the AMES strategic initiative. Excluding this charge, gross profit was $153 million, increasing 12% with gross margin increasing 210 basis points. Second quarter selling, general and administrative expenses of $126 million, including $4.7 million of charges related to the AMES strategic initiative and acquisition costs related to Apta and M&A activity postponed at the end of Q2. Excluding these charges, SG&A expenses were $122 million, increasing 9%. As a percentage of sales, SG&A adjusting for the charges increased 120 basis points to 21.5% due to consulting, and COVID related expenses and compensation. Second quarter GAAP 2020 net income was $900,000 or $0.02 per share compared to the prior year period of $6.5 million or $0.15 per share. Excluding items that affect comparability from both periods, current quarter adjusted net income was $10 million or $0.23 per share compared to the prior year of $6.4 million or $0.15 per share, an increase of 53% on a per share basis. Our effective tax rate, excluding items that affect comparability for the quarter, was 35.9% and for the year to date period it was 34.4%. Capital spending was $9 million in the second quarter, in line with prior year. Depreciation and amortization for the quarter was $16 million. Regarding our segments, Consumer and Professional Products second quarter revenue decreased 4% to $275 million, driven by decreased volume due to prior year new product load-ins and the current quarter impact of COVID-19 on the UK, as well as an unfavorable foreign exchange impact of 1%. This…

Thanks, Brian. We had a solid second quarter and our year-to-date performance was well ahead of last year. While we adjust to the current circumstances, our long-term strategy remains intact and we have the conviction to follow through on the key elements of our long-term strategic growth plans. Our capital investments will continue for our original guidance to $60 million. Recall that roughly half of our capital expenditures are related to maintenance operations, with the other half promoting our growth and competitiveness. We will continue to make all of these investments, including our AMES strategic initiative. As I mentioned earlier, we will continue our dividend program. And while we have $58 million remaining under our Board approved share buyback program, we currently do not intend to repurchase shares. Second half of our fiscal year generate significant free cash flow due to the seasonality of our businesses. We'll continue to focus on deleveraging our balance sheet and reaching our goal with 3.5 times net debt to EBITDA on the next few years. Our workforce has shown an exceptional dedication throughout this crisis. We all appreciate the importance of their work, supporting the critical infrastructure of our global home markets. We’ll continue to be proactive. We're taking measures to maintain their health and safety, as we work our way through this pandemic, I'd just like to say that our management team is up to this challenge, we’ll persevere through it and I'm confident that we will build to a bigger and better tomorrow. Operator, let's take whatever questions.

Thank you. We'll now be conducting a question-and-answer session. [Operator Instructions] Your first question is from Bob Labick of CJS Securities. Please go ahead.

The next question is from Julio Romero of Sidoti & Company. Please go ahead.

The next question is from Justin Bergner of G Research. Please go ahead.

[Operator Instructions] The next question is from Tim Wojs of Baird. Please go ahead.

Next is a follow-up question from Justin Bergner of G Research. Please go ahead.

This concludes the question-and-answer session. I would like to turn the floor back over to Ron Kramer, Chief Executive Officer for closing comments.

Well, we've been able to make it through these incredibly turbulent times. We believe we continue to be well positioned. I'm very confident and optimistic about what's going on within the company and very excited about our future. To everybody on the call I hope you're all safe, healthy, and we look forward to speaking to you again after the end of this quarter. Thank you and goodbye.

This concludes today’s teleconference. You may disconnect your lines at this time. Thank you for your participation.