What changed in this filing

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Item 1. Financial Statements

2020-07-31 compared with 2020-04-29 · 205 added, 203 removed, 976 unchanged (29% of the section changed)

34 unchanged sentences

CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY

For the Three and Six Months Ended March 31, 2020 and 2019

For the Three and Nine Months Ended June 30, 2020 and 2019

TREASURY SHARES

19 unchanged sentences

Balance at March 31, 2020

Amortization of deferred compensation

Equity awards granted, net

ESOP allocation of common stock

Stock-based compensation

Stock-based consideration

Other comprehensive income, net of tax

Balance at June 30, 2020

TREASURY SHARES

22 unchanged sentences

Balance at March 31, 2019

Amortization of deferred compensation

ESOP allocation of common stock

Stock-based compensation

Stock-based consideration

Other comprehensive income, net of tax

Balance at June 30, 2019

(1) See Note 14 - Recent Accounting Pronouncements and Note 3 - Revenue for additional information.

3 unchanged sentences

(in thousands, except per share data)

Three Months Ended March 31,

Six Months Ended March 31,

Three Months Ended June 30,

Nine Months Ended June 30,

Cost of goods and services

7 unchanged sentences

Income before taxes from continuing operations

Provision from income taxes

Provision for income taxes

Income from continuing operations

1 unchanged sentence

Loss from operations of discontinued operations

Benefit for income taxes

Provision (benefit) for income taxes

Loss from discontinued operations

Net income (loss)

Income (loss) from continuing operations

Income (loss) from discontinued operations

Income from continuing operations

Loss from discontinued operations

Basic earnings per common share

5 unchanged sentences

Dividends paid per common share

Net income (loss)

Other comprehensive income (loss), net of taxes:

3 unchanged sentences

Total other comprehensive income (loss), net of taxes

Comprehensive income (loss), net

Comprehensive income, net

The accompanying notes to condensed consolidated financial statements are an integral part of these statements.

2 unchanged sentences

(in thousands)

Six Months Ended March 31,

Nine Months Ended June 30,

CASH FLOWS FROM OPERATING ACTIVITIES:

Net loss from discontinued operations

Adjustments to reconcile net income to net cash used in operating activities:

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

9 unchanged sentences

Increase in accounts receivable and contract costs and recognized income not yet billed

Increase in inventories

(Increase) decrease in prepaid and other assets

(Increase) decrease in inventories

Increase in prepaid and other assets

Decrease in accounts payable, accrued liabilities, income taxes payable and operating lease liabilities

Other changes, net

Net cash used in operating activities

Net cash provided by operating activities

CASH FLOWS FROM INVESTING ACTIVITIES:

1 unchanged sentence

Acquired businesses, net of cash acquired

Payments related to sale of business

Insurance payments

9 unchanged sentences

Contingent consideration for acquired businesses

Net cash provided by financing activities

Net cash provided by (used in) financing activities

The accompanying notes to condensed consolidated financial statements are an integral part of these statements.

2 unchanged sentences

(in thousands)

Six Months Ended March 31,

Nine Months Ended June 30,

CASH FLOWS FROM DISCONTINUED OPERATIONS:

Net cash used in operating activities

Net cash used in investing activities

Net cash provided by investing activities

Net cash used in financing activities

29 unchanged sentences

The impact from the rapidly changing U.S.

and global market and economic conditions due to the COVID-19 outbreak is uncertain, with disruptions to the business of our customers and suppliers, which in turn is likely to impact our business and consolidated results of operations and financial condition in the future.

and global market and economic conditions due to the COVID-19 outbreak is uncertain, with disruptions to the business of our customers and suppliers, which could impact our business and consolidated results of operations and financial condition in the future.

While we have not incurred significant disruptions to our manufacturing or to our supply chain thus far from the COVID-19 outbreak, we are unable to accurately predict the impact COVID-19 will have due to numerous uncertainties, including the severity of the disease, the duration of the outbreak, actions that may be taken by governmental authorities, the impact to our customers’ and suppliers’ businesses and other factors identified in Part II, Item 1A “Risk Factors” in this Form 10-Q.

24 unchanged sentences

Level 3 inputs are unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.

The fair values of Griffon’s 2022 and 2028 senior notes approximated $ 139,500 and $ 799,000 , respectively, on March 31, 2020 .

The fair values of Griffon’s 2028 senior notes approximated $ 980,000 on June 30, 2020 .

Fair values were based upon quoted market prices (level 1 inputs).

Insurance contracts with values of $ 3,382 at March 31, 2020 are measured and recorded at fair value based upon quoted prices in active markets for similar assets (level 2 inputs) and are included in Prepaid and other current assets on the Consolidated Balance Sheets.

Insurance contracts with values of $ 3,324 at June 30, 2020 are measured and recorded at fair value based upon quoted prices in active markets for similar assets (level 2 inputs) and are included in Prepaid and other current assets on the Consolidated Balance Sheets.

Items Measured at Fair Value on a Recurring Basis

At March 31, 2020 , trading securities, measured at fair value based on quoted prices in active markets for similar assets (level 2 inputs), with a fair value of $ 2,605 ( $ 2,236 cost basis), were included in Prepaid and other current assets on the Consolidated Balance Sheets.

At June 30, 2020 , trading securities, measured at fair value based on quoted prices in active markets for similar assets (level 2 inputs), with a fair value of $ 3,028 ( $ 2,365 cost basis), were included in Prepaid and other current assets on the Consolidated Balance Sheets.

Realized and unrealized gains and losses on trading securities are included in Other income in the Consolidated Statements of Operations and Comprehensive Income (Loss).

1 unchanged sentence

To manage these risks, Griffon may enter into various derivative contracts such as foreign currency exchange contracts, including forwards and options.

As of March 31, 2020 , Griffon entered into several such contracts in order to lock into a foreign currency rate for planned settlements of trade and inter-company liabilities payable in US dollars.

At March 31, 2020 , Griffon had $ 8,000 of Australian dollar contracts at a weighted average rate of $ 1.63 which qualified for hedge accounting (level 2 inputs).

As of June 30, 2020 , Griffon entered into several such contracts in order to lock into a foreign currency rate for planned settlements of trade and inter-company liabilities payable in US dollars.

At June 30, 2020 , Griffon had $ 43,500 of Australian dollar contracts at a weighted average rate of $ 1.46 which qualified for hedge accounting (level 2 inputs).

These hedges were all deemed effective as cash flow hedges with gains and losses related to changes in fair value deferred and recorded in Accumulated other comprehensive income (loss) ("AOCI") and Prepaid and other current assets, or Accrued liabilities, until settlement.

Upon settlement, gains and losses are recognized in the Consolidated Statements of Operations and Comprehensive Income (Loss) in Cost of goods and services ("COGS").

AOCI included deferred gains of $ 849 ( $ 552 , net of tax) at March 31, 2020 and gains of $ 1,050 and $ 994 were recorded in COGS during the three and six months ended March 31, 2020 , respectively, for all settled contracts.

AOCI included deferred losses of $ 1,095 ( $ 712 , net of tax) at June 30, 2020 and gains of $ 556 and $ 1,550 were recorded in COGS during the three and nine months ended June 30, 2020 , respectively, for all settled contracts.

All contracts expire in 15 to 209 days.

At March 31, 2020 , Griffon had $ 3,300 and $ 4,350 of Canadian and British Pound dollar contracts, respectively, at a weighted average rate of $ 1.41 and $ 0.81 respectively.

At June 30, 2020 , Griffon had $ 3,125 and $ 3,000 of Canadian and British Pound dollar contracts, respectively, at a weighted average rate of $ 1.36 and $ 0.81 , respectively.

The contracts, which protect Canadian and United Kingdom operations from currency fluctuations for US dollar based purchases, do not qualify for hedge accounting.

For the three and six months ended March 31, 2020 , fair value gains of $ $ 271 and $ 199 were recorded to Other assets and to Other income for the outstanding contracts, based on similar contract values (level 2 inputs).

Realized gains of $ 84 and $ 87 were recorded in Other income during the three and six months ended March 31, 2020 , respectively, for all settled contracts.

For the three and nine months ended June 30, 2020 , fair value losses of $ 222 and $ 23 were recorded to Other assets and to Other income for the outstanding contracts, based on similar contract values (level 2 inputs).

Realized gains of $ 115 and $ 202 were recorded in Other income during the three and nine months ended June 30, 2020 , respectively, for all settled contracts.

All contracts expire in 2 to 328 days.

20 unchanged sentences

The impact of such adjustments to estimates is made on a cumulative basis in the period when such information has become known.

For the three and six months ended March 31, 2020 , income from operations included net unfavorable catch up adjustments approximating $ 2,224 and $ 5,243 , respectively.

For the three and nine months ended June 30, 2020 , income from operations included net unfavorable catch up adjustments approximating $ 4,100 and $ 9,344 , respectively.

Gross profit is impacted by a variety of factors, including the mix of products, systems and services, production efficiencies, price competition and general economic conditions.

2 unchanged sentences

A provision for the entire amount of the estimated loss is recorded on a cumulative basis, and is recorded as a reduction to gross margin on the Consolidated Statements of Operations and Comprehensive Income (Loss).

The provision had an immaterial impact on Griffon's Consolidated Financial Statements.

The estimated remaining costs to complete loss contracts as of March 31, 2020 and September 30, 2019 were approximately $ 8,560 and $ 9,790 , respectively.

These provisions had an immaterial impact on Griffon's Consolidated Financial Statements.

The estimated remaining costs to complete loss contracts as of June 30, 2020 and September 30, 2019 were approximately $ 8,264 and $ 9,790 , respectively.

For a complete explanation of Griffon’s revenue accounting policies, this note should be read in conjunction with Griffon’s Annual Report on Form 10-K for the year ended September 30, 2019 .

1 unchanged sentence

Transaction Price Allocated to the Remaining Performance Obligations

On March 31, 2020 , we had $ 331,740 of remaining performance obligations, which we also refer to as total backlog.

On June 30, 2020 , we had $ 350,443 of remaining performance obligations, which we also refer to as total backlog.

We expect to recognize approximately 72 % of our remaining performance obligations as revenue within one year, with the balance to be completed thereafter.

6 unchanged sentences

Contract Balances

Contract assets were $ 94,495 as of March 31, 2020 compared to $ 105,111 as of September 30, 2019.

Contract assets were $ 92,143 as of June 30, 2020 compared to $ 105,111 as of September 30, 2019.

The $ 12,968 decrease in our contract assets balance was primarily due to the timing of billings and work performed on various radar and surveillance programs.

1 unchanged sentence

Contract assets are transferred to receivables when the right to consideration becomes unconditional.

Contract costs and recognized income not yet billed consists of amounts accounted for under the percentage of completion method of accounting, recoverable costs and accrued profit that cannot yet be invoiced under the terms of certain long-term contracts.

Contract costs and recognized income not yet billed consists of amounts accounted for under the percentage of completion method of accounting, and represent recoverable costs and accrued profit that cannot yet be invoiced under the terms of certain long-term contracts.

Amounts will be invoiced when applicable contract terms, such as the achievement of specified milestones or product delivery, are met.

At March 31, 2020 and September 30, 2019, approximately $ 12,612 and $ 13,100 , respectively, of contract costs and recognized income not yet billed were expected to be collected after one year.

As of March 31, 2020 , Contract costs and recognized income not yet billed included approximately $ 1,570 of reserves for contract risk.

At June 30, 2020 and September 30, 2019, approximately $ 7,058 and $ 13,100 , respectively, of contract costs and recognized income not yet billed were expected to be collected after one year.

As of June 30, 2020 , Contract costs and recognized income not yet billed included approximately $ 1,874 of reserves for contract risk.

As of September 30, 2019, Contract costs and recognized income not yet billed included no reserves for contract risk.

Contract liabilities were $ 21,292 as of March 31, 2020 compared to $ 26,259 as of September 30, 2019.

Contract liabilities were $ 20,719 as of June 30, 2020 compared to $ 26,259 as of September 30, 2019.

The $ 5,540 decrease in the contract liabilities balance was due to the recognition of revenue primarily from surveillance and airborne maritime surveillance radar programs.

11 unchanged sentences

The purchase price was primarily allocated to goodwill of GBP 2,418 , acquired intangible assets of GBP 3,454 , inventory of GBP 2,914 , accounts receivable and other assets of GBP 2,492 and accounts payable and other accrued liabilities of GBP 2,734 .

During both the three and six months ended March 31, 2020 , the Company incurred acquisition costs of $ 2,960 .

The Company did no t incur acquisition costs in the three and six months ended March 31, 2019.

During the nine months ended June 30, 2020 , the Company incurred acquisition costs of $ 2,960 .

The Company did no t incur acquisition costs in the three months ended June 30, 2020.

The Company did no t incur acquisition costs in the three and nine months ended June 30, 2019.

NOTE 5 – INVENTORIES

1 unchanged sentence

The following table details the components of inventory:

At March 31, 2020

At June 30, 2020

At September 30, 2019

4 unchanged sentences

The following table details the components of property, plant and equipment, net:

At March 31, 2020

At June 30, 2020

At September 30, 2019

3 unchanged sentences

Accumulated depreciation and amortization

Depreciation and amortization expense for property, plant and equipment was $ 13,316 and $ 12,980 for the quarters ended March 31, 2020 and 2019 , respectively, and $ 26,748 and $ 25,647 for the six months ended March 31, 2020 and 2019, respectively.

Depreciation included in SG&A expenses was $ 4,910 and $ 4,761 for the quarters ended March 31, 2020 and 2019, respectively, and $ 9,861 and $ 9,442 for the six months ended March 31, 2020 and 2019, respectively.

Depreciation and amortization expense for property, plant and equipment was $ 13,142 and $ 13,089 for the quarters ended June 30, 2020 and 2019 , respectively, and $ 39,890 and $ 38,736 for the nine months ended June 30, 2020 and 2019, respectively.

Depreciation included in SG&A expenses was $ 4,852 and $ 4,822 for the quarters ended June 30, 2020 and 2019, respectively, and $ 14,713 and $ 14,264 for the nine months ended June 30, 2020 and 2019, respectively.

Remaining components of depreciation, attributable to manufacturing operations, are included in Cost of goods and services.

Except as described in Note 16, Restructuring Charges, no event or indicator of impairment occurred during the six months ended March 31, 2020 which would require additional impairment testing of property, plant and equipment.

Except as described in Note 16, Restructuring Charges, no event or indicator of impairment occurred during the nine months ended June 30, 2020 which would require additional impairment testing of property, plant and equipment.

NOTE 7 – GOODWILL AND OTHER INTANGIBLES

The following table provides changes in the carrying value of goodwill by segment during the six months ended March 31, 2020 :

The following table provides changes in the carrying value of goodwill by segment during the nine months ended June 30, 2020 :

At September 30, 2019

1 unchanged sentence

including currency

At March 31, 2020

At June 30, 2020

Consumer and Professional Products

2 unchanged sentences

The following table provides the gross carrying value and accumulated amortization for each major class of intangible assets:

At March 31, 2020

At June 30, 2020

At September 30, 2019

5 unchanged sentences

Total intangible assets

Amortization expense for intangible assets was $ 2,403 and $ 2,512 for the quarters ended March 31, 2020 and 2019, respectively, and $ 4,796 and $ 4,930 for the six months ended March 31, 2020 and 2019.

Amortization expense for intangible assets was $ 2,381 and $ 2,506 for the quarters ended June 30, 2020 and 2019, respectively, and $ 7,177 and $ 7,436 for the nine months ended June 30, 2020 and 2019.

Amortization expense for the remainder of 2020 and the next five fiscal years and thereafter, based on current intangible balances and classifications, is estimated as follows:

9 unchanged sentences

In addition to the annual impairment test, the Company is required to regularly assess whether a triggering event has occurred which would require interim impairment testing.

Given the general deterioration in economic and market conditions surrounding the COVID-19 pandemic, the Company considered the impact that the COVID-19 pandemic may have on its near and long-term forecasts and completed an interim impairment test.

The company determined that there is no impairment to either its goodwill or indefinite-lived intangible assets at March 31, 2020.

During the quarter ended June 30, 2020, the Company determined there were no triggering events.

NOTE 8 – INCOME TAXES

During the quarter ended March 31, 2020 , the Company recognized a tax provision of $ 2,034 on income before taxes from continuing operations of $ 2,929 , compared to a tax provision of $ 3,194 on income before taxes from continuing operations of $ 9,684 in the comparable prior year quarter.

The current year quarter included restructuring charges of $ 3,104 ( $ 3,005 , net of tax), acquisition costs of $ 2,960 ( $ 2,321 , net of tax), loss from debt extinguishment of $ 6,690 ( $ 5,245 , net of tax) and net discrete tax and certain other tax benefits, net of $ 1,413 , that affect comparability.

During the quarter ended June 30, 2020 , the Company recognized a tax provision of $ 12,649 on income before taxes from continuing operations of $ 34,480 , compared to a tax provision of $ 6,258 on income before taxes from continuing operations of $ 20,386 in the comparable prior year quarter.

The current year quarter included restructuring charges of $ 1,633 ( $ 1,224 , net of tax), loss from debt extinguishment of $ 1,235 ( $ 969 , net of tax) and net discrete tax and certain other tax provisions, net of $ 1,828 , that affect comparability.

The prior year quarter included net discrete tax and certain other tax benefits of $ 669 that affect comparability.

Excluding these items, the effective tax rates for the quarters ended March 31, 2020 and 2019 were 35.9 % and 34.0 % , respectively.

During the six months ended March 31, 2020 , the Company recognized a tax provision of $ 8,373 on Income before taxes from continuing operations of $ 19,880 , compared to a tax provision of $ 8,406 on Income before taxes from continuing operations of $ 23,649 in the comparable prior year period.

The six month period ended March 31, 2020 included restructuring charges of $ 9,538 ( $ 7,153 , net of tax), acquisition costs of $ 2,960 ( $ 2,321 , net of tax), loss from debt extinguishment of $ 6,690 ( $ 5,245 , net of tax) and net discrete tax benefits of $ 580 .

The six month period ended March 31, 2019 included net discrete tax provisions of $ 370 .

Excluding these items, the effective tax rates for the six months ended March 31, 2020 and 2019 were 34.4 % and 34.0 % , respectively.

In response to the COVID-19 outbreak, legislation concerning taxes was passed in March 2020.

Excluding these items, the effective tax rates for the quarters ended June 30, 2020 and 2019 were 30.8 % and 34.0 % , respectively.

During the nine months ended June 30, 2020 , the Company recognized a tax provision of $ 21,022 on Income before taxes from continuing operations of $ 54,360 , compared to a tax provision of $ 14,664 on Income before taxes from continuing operations of $ 44,035 in the comparable prior year period.

The nine month period ended June 30, 2020 included restructuring charges of $ 11,171 ( $ 8,377 , net of tax), acquisition costs of $ 2,960 ( $ 2,321 , net of tax), loss from debt extinguishment of $ 7,925 ( $ 6,214 , net of tax) and net discrete tax provisions of $ 1,248 .

The nine month period ended June 30, 2019 included net discrete tax benefits of $ 299 .

Excluding these items, the effective tax rates for the nine months ended June 30, 2020 and 2019 were 32.6 % and 34.0 % , respectively.

In response to the COVID-19 outbreak, the U.S.

Congress approved certain changes to the federal tax laws in March 2020.

While we are still assessing the impact of the legislation, we do not expect there to be a material impact to our consolidated financial statements at this time.

NOTE 9 – LONG-TERM DEBT

At March 31, 2020

At June 30, 2020

At September 30, 2019

18 unchanged sentences

Long-term debt

Three Months Ended March 31, 2020

Three Months Ended March 31, 2019

Three Months Ended June 30, 2020

Three Months Ended June 30, 2019

Effective Interest Rate (1)

15 unchanged sentences

(1) n/a = not applicable

Six Months Ended March 31, 2020

Six Months Ended March 31, 2019

Nine Months Ended June 30, 2020

Nine Months Ended June 30, 2019

Effective Interest Rate (1)

14 unchanged sentences

Capitalized interest

On February 19, 2020, in an unregistered offering through a private placement under Rule 144A and Regulation S, Griffon issued, at par, $ 850,000 of 5.75 % Senior Notes due 2028 (the “2028 Senior Notes”).

Proceeds from the 2028 Senior Notes were used to redeem 85 % of the $ 1,000,000 of 5.25 % Senior Notes due 2022 (the “2022 Senior Notes" and, collectively with the 2028 Senior Notes, the "Senior Notes").

Following the sale and issuance of the 2028 Notes transaction, $ 150,000 aggregate principal amount of the 2022 Notes remained outstanding.

As of March 31, 2020 , outstanding Senior Notes due totaled $ 1,000,000 ;

On June 22, 2020, Griffon completed the add-on offering through a private placement $ 150,000 principal amount of its 5.75 % senior notes due 2028, at 100.25 % of par, to Griffon's previously issued $ 850,000 principal amount of its 5.75 % senior notes due in 2028, at par, completed on February 19, 2020 (collectively, the “Senior Notes”).

Proceeds from the Senior Notes were used to redeem the $ 1,000,000 of 5.25 % senior notes due 2022 (the “2022 Senior Notes").

As of June 30, 2020 , outstanding Senior Notes due totaled $ 1,000,000 ;

interest is payable semi-annually on March 1 and September 1.

The Senior Notes are senior unsecured obligations of Griffon guaranteed by certain domestic subsidiaries, and subject to certain covenants, limitations and restrictions.

On April 22, 2020, Griffon exchanged substantially all of the 2028 Senior Notes for substantially identical 2028 Senior Notes registered under the Securities Act of 1933 (the "Securities Act") via an exchange offer.

The remaining 2022 Senior Notes outstanding are registered under the Securities Act, having been issued pursuant to similar prior exchange offers.

The fair value of the 2022 and 2028 Senior Notes approximated $ 139,500 and $ 799,000 , respectively, on March 31, 2020 based upon quoted market prices (level 1 inputs).

In connection with these transactions, Griffon capitalized $ 12,989 of underwriting fees and other expenses incurred related to the issuance and exchange of the 2028 Senior Notes.

Furthermore, 85 % of the obligations associated with the 2022 Senior Notes were discharged leaving remaining fees of $ 1,145 .

At March 31, 2020 , a combined total amount of $ 13,952 remained to be amortized.

Remaining capitalized fees for the 2022 Senior Notes and all capitalized fees for the 2028 Senior Notes will amortize over the term of each respective note.

Additionally, Griffon recognized a $ 6,690 loss on the early extinguishment of debt on 85 % of the 5.25 % $ 1,000,000 senior notes due 2022, comprised primarily of the write-off of $ 5,873 of remaining deferred financing fees, $ 607 of tender offer net premium expense and $ 210 of redemption interest expense.

On January 30, 2020, Griffon amended its revolving credit facility (as amended, the "Credit Agreement") to increase the maximum borrowing availability from $ 350,000 to $ 400,000 and extend its maturity date from March 22, 2021 to March 22, 2025, except that if the 2022 Senior Notes are not repaid, refinanced or replaced prior to December 1, 2021, then the Credit Agreement will mature on December 1, 2021.

On April 22, 2020, Griffon exchanged substantially all of the $ 850,000 Senior Notes for substantially identical Senior Notes registered under the Securities Act of 1933, as amended (the "Securities Act"), via an exchange offer.

Griffon intends to complete an offer to exchange the remaining $ 150,000 Senior Notes for substantially identical Senior Notes registered under the Securities Act during the fourth quarter of fiscal 2020.

The fair value of the 2028 Senior Notes approximated $ 980,000 on June 30, 2020 based upon quoted market prices (level 1 inputs).

In connection with these transactions, Griffon capitalized $ 15,289 of underwriting fees and other expenses incurred related to the issuance and exchange of the Senior Notes, which will amortize over the term of such terms.

Furthermore, all of the obligations associated with the 2022 Senior Notes were discharged.

Additionally, Griffon recognized a $ 7,925 loss on the early extinguishment of debt of the 5.25 % $ 1,000,000 2022 Senior Notes, comprised primarily of the write-off of $ 6,725 of remaining deferred financing fees, $ 607 of tender offer net premium expense and $ 593 of redemption interest expense.

The amended agreement also modified certain other provisions of the facility.

8 unchanged sentences

Borrowings under the Credit Agreement are guaranteed by Griffon’s material domestic subsidiaries and are secured, on a first priority basis, by substantially all domestic assets of the Company and the guarantors, and a pledge of not greater than 65 % of the equity interest in Griffon’s material, first-tier foreign subsidiaries.

At March 31, 2020 , there were $ 183,548 of outstanding borrowings under the Credit Agreement;

At June 30, 2020 , there were $ 104,181 of outstanding borrowings under the Credit Agreement;

outstanding standby letters of credit were $ 21,617 ;

7 unchanged sentences

The internal loan is secured by shares purchased with the proceeds of the loan.

The amount outstanding on the internal loan at March 31, 2020 was $ 31,148 .

The amount outstanding on the internal loan at June 30, 2020 was $ 30,513 .

Two Griffon subsidiaries have finance leases outstanding for real estate located in Troy, Ohio and Ocala, Florida.

2 unchanged sentences

The Ocala, Florida lease contains one five -year renewal option.

At March 31, 2020 , $ 12,364 was outstanding, net of issuance costs.

At June 30, 2020 , $ 11,528 was outstanding, net of issuance costs.

In November 2012, Garant G.P.

(“Garant”) entered into a CAD 15,000 ( $ 10,628 as of March 31, 2020 ) revolving credit facility.

The facility accrues interest at LIBOR (USD) or the Bankers Acceptance Rate (CDN) plus 1.3 % per annum ( 2.29 % LIBOR USD and 2.30 % Bankers Acceptance Rate CDN as of March 31, 2020 ).

(“Garant”) entered into a CAD 15,000 ( $ 10,974 as of June 30, 2020 ) revolving credit facility.

The facility accrues interest at LIBOR (USD) or the Bankers Acceptance Rate (CDN) plus 1.3 % per annum ( 1.46 % LIBOR USD and 1.56 % Bankers Acceptance Rate CDN as of June 30, 2020 ).

The revolving facility matures in October 2022.

Garant is required to maintain a certain minimum equity.

At March 31, 2020 , there were no borrowings under the revolving credit facility with CAD 15,000 ( $ 10,628 as of March 31, 2020 ) available for borrowing.

At June 30, 2020 , there were no borrowings under the revolving credit facility with CAD 15,000 ( $ 10,974 as of June 30, 2020 ) available for borrowing.

In July 2016 and as amended in March 2019, Griffon Australia Holdings Pty Ltd and its Australian subsidiaries (collectively, "Griffon Australia") entered into an AUD 29,625 term loan, AUD 20,000 revolver and AUD 10,000 receivable purchase facility agreement.

The term loan requires quarterly principal payments of AUD 1,250 plus interest with a balloon payment of AUD 13,375 due upon maturity in March 2022, and accrues interest at Bank Bill Swap Bid Rate “BBSY” plus 1.90 % per annum ( 2.39 % at March 31, 2020 ).

As of March 31, 2020 , the term loan had an outstanding balance of AUD 23,375 ( $ 14,378 as of March 31, 2020 ).

The term loan requires quarterly principal payments of AUD 1,250 plus interest with a balloon payment of AUD 9,625 due upon maturity in March 2022, and accrues interest at Bank Bill Swap Bid Rate “BBSY” plus 1.95 % per annum ( 2.09 % at June 30, 2020 ).

During the quarter ended June 30, 2020 , the term loan balance was reduced by AUD 5,000 , from AUD 23,375 to AUD 18,375 with proceeds from an AUD 5,000 increase in the commitment of the receivables purchase line from AUD 10,000 to AUD 15,000 .

The term loan had an outstanding balance of AUD 17,125 ( $ 11,761 as of June 30, 2020 ).

The revolving facility and receivable purchase facility mature in March 2022, but are renewable upon mutual agreement with the lender.

The revolving facility and receivable purchase facility accrue interest at BBSY plus 1.8 % and 1.25 % , respectively, per annum ( 2.20 % and 1.65 % , respectively, at March 31, 2020 ).

At March 31, 2020 , there were no borrowings under the revolver and the receivable purchase facilities had an outstanding balance of AUD 10,000 ( $ 6,151 as of March 31, 2020 ).

The revolving facility and receivable purchase facility accrue interest at BBSY plus 1.9 % and 1.35 % , respectively, per annum ( 2.05 % and 1.49 % , respectively, at June 30, 2020 ).

At June 30, 2020 , there were no borrowings under the revolver and the receivable purchase facility.

The revolver, receivable purchase facility and the term loan are all secured by substantially all of the assets of Griffon Australia and its subsidiaries.

2 unchanged sentences

The term loan and mortgage loan require quarterly principal payments of GBP 350 and GBP 83 plus interest, respectively, and have balloon payments due upon maturity, July 2023, of GBP 7,700 and GBP 2,500 , respectively.

The Term Loan and Mortgage Loans accrue interest at the GBP LIBOR Rate plus 2.25 % and 1.8 % , respectively ( 2.49 % and 2.04 % at March 31, 2020 , respectively).

The revolving facility matures in June 2020, but is renewable upon mutual agreement with the lender, and accrues interest at the Bank of England Base Rate plus 1.5 % ( 1.60 % as of March 31, 2020 ).

As of March 31, 2020 , the revolver had an outstanding balance of GBP 2,728 ( $ 3,381 as of March 31, 2020 ) while the term and mortgage loan balances amounted to GBP 15,398 ( $ 19,084 as of March 31, 2020).

The Term Loan and Mortgage Loans accrue interest at the GBP LIBOR Rate plus 2.25 % and 1.8 % , respectively ( 2.33 % and 1.88 % at June 30, 2020 , respectively).

The revolving facility matures in June 2021, but is renewable upon mutual agreement with the lender, and accrues interest at the Bank of England Base Rate plus 1.75 % ( 1.85 % as of June 30, 2020 ).

As of June 30, 2020 , the revolver had no outstanding balance while the term and mortgage loan balances amounted to GBP 15,398 ( $ 18,975 as of June 30, 2020).

The revolver and the term loan are both secured by substantially all of the assets of AMES UK and its subsidiaries.

2 unchanged sentences

Other long-term debt primarily consists of a loan with the Pennsylvania Industrial Development Authority, with the balance consisting of capital leases.

At March 31, 2020 , Griffon and its subsidiaries were in compliance with the terms and covenants of all credit and loan agreements.

At June 30, 2020 , Griffon and its subsidiaries were in compliance with the terms and covenants of all credit and loan agreements.

NOTE 10 — SHAREHOLDERS’ EQUITY

During the second quarter of 2020, the Company paid a quarterly cash dividend of $ 0.075 per share in each quarter, totaling $ 0.15 per share for the six months ended March 31, 2020.

During 2020, the Company paid a quarterly cash dividend of $ 0.075 per share in each quarter, totaling $ 0.225 per share for the nine months ended June 30, 2020.

During 2019, the Company paid a quarterly cash dividend of $ 0.0725 per share, totaling $ 0.29 per share for the year.

3 unchanged sentences

dividends paid on allocated shares in the ESOP are allocated to participant accounts in the form of additional shares.

On April 27, 2020, the Board of Directors declared a quarterly cash dividend of $ 0.075 per share, payable on June 18, 2020 to shareholders of record as of the close of business on May 21, 2020.

On July 29, 2020, the Board of Directors declared a quarterly cash dividend of $ 0.075 per share, payable on September 17, 2020 to shareholders of record as of the close of business on August 20, 2020.

Compensation expense for restricted stock and restricted stock units is recognized ratably over the required service period based on the fair value of the grant, calculated as the number of shares granted multiplied by the stock price on the date of grant and, for performance shares, the likelihood of achieving the performance criteria.

5 unchanged sentences

and on January 30, 2020, shareholders approved Amendment No.

2 to the Incentive Plan, pursuant to which 1,700,000 shares were added to the Incentive Plan.

2 to the Incentive Plan, pursuant to which 1,700,000 shares were added to the

Incentive Plan.

Options granted under the Incentive Plan may be either “incentive stock options” or nonqualified stock options, generally expire ten years after the date of grant and are granted at an exercise price of not less than 100% of the fair market value at the date of grant.

The maximum number of shares of common stock available for award under the Incentive Plan is 5,050,000 ( 600,000 of which may be issued as incentive stock options), plus (i) any shares reserved for issuance under the 2011 Equity Incentive Plan as of the effective date of the Incentive Plan, and (ii) any shares underlying awards outstanding on such effective date under the 2011 Incentive Plan that are canceled or forfeited.

As of March 31, 2020 , there were 1,057,505 shares available for grant.

As of June 30, 2020 , there were 1,063,148 shares available for grant.

All grants outstanding under former equity plans will continue under their terms;

7 unchanged sentences

The total fair value of these restricted shares using the Monte Carlo Simulation model is approximately $ 9,534 , or a weighted average fair value of $ 14.45 per share.

During the third quarter of 2020, Griffon granted 7,599 shares of restricted stock, subject to certain performance conditions, with vesting periods of three years , with a total fair value of $ 125 , or a weighted average fair value of $ 16.45 per share.

The following table summarizes the Company’s compensation expense relating to all stock-based incentive plans:

For the Three Months Ended March 31,

For the Six Months Ended March 31,

For the Three Months Ended June 30,

For the Nine Months Ended June 30,

Restricted stock

2 unchanged sentences

Under this share repurchase program, the Company may purchase shares in the open market, including pursuant to a 10b5-1 plan, or in privately negotiated transactions.

During the quarter and six months ended March 31, 2020 , Griffon did not purchase any shares of common stock under these repurchase programs.

As of March 31, 2020 , an aggregate of $ 57,955 remains under Griffon's Board authorized repurchase programs.

During the quarter and six months ended March 31, 2020 , 261,223 shares, with a market value of $ 5,721 , or $ 21.90 per share, and 340,775 shares, with a market value of $ 7,409 , or $ 21.74 per share, respectively, were withheld to settle employee taxes due upon the vesting of restricted stock, and were added to treasury stock.

Furthermore, during the six months ended March 31, 2020 , an additional 3,307 shares, with a market value of $ 70 , or $ 21.22 per share, were withheld from common stock issued upon the vesting of restricted stock units to settle employee taxes due upon vesting.

During the quarter and nine months ended June 30, 2020 , Griffon did not purchase any shares of common stock under these repurchase programs.

As of June 30, 2020 , an aggregate of $ 57,955 remains under Griffon's Board authorized repurchase programs.

During the quarter ended June 30, 2020, there were no shares withheld to settle employee taxes due upon the vesting of restricted stock.

During the nine months ended June 30, 2020 , 340,775 shares, with a market value of $ 7,409 , or $ 21.74 per share, respectively, were withheld to settle employee taxes due upon the vesting of restricted stock, and were added to treasury stock.

Furthermore, during the nine months ended June 30, 2020 , an additional 3,307 shares, with a market value of $ 70 , or $ 21.22 per share, were withheld from common stock issued upon the vesting of restricted stock units to settle employee taxes due upon vesting.

NOTE 11 – EARNINGS PER SHARE (EPS)

2 unchanged sentences

The following table is a reconciliation of the share amounts (in thousands) used in computing earnings per share:

Three Months Ended March 31,

Six Months Ended March 31,

Three Months Ended June 30,

Nine Months Ended June 30,

Common shares outstanding

1 unchanged sentence

Non-vested restricted stock

Impact on weighted average shares

Impact of weighted average shares

Weighted average shares outstanding - basic

14 unchanged sentences

Information on Griffon’s reportable segments from continuing operations is as follows:

For the Three Months Ended March 31,

For the Six Months Ended March 31,

For the Three Months Ended June 30,

For the Nine Months Ended June 30,

Consumer and Professional Products

5 unchanged sentences

The following table presents revenue disaggregated by end market and segment:

For the Three Months Ended March 31,

For the Six Months Ended March 31,

For the Three Months Ended June 30,

For the Nine Months Ended June 30,

Residential repair and remodel

10 unchanged sentences

The following table presents revenue disaggregated by geography based on the location of the Company's customer:

For the Three Months Ended March 31, 2020

For the Six Months Ended March 31, 2020

REVENUE BY GEOGRAPHIC AREA - DESTINATION

For the Three Months Ended June 30, 2020

For the Nine Months Ended June 30, 2020

Defense Electronics

3 unchanged sentences

Consolidated revenue

For the Three Months Ended March 31, 2019

For the Six Months Ended March 31, 2019

REVENUE BY GEOGRAPHIC AREA - DESTINATION

For the Three Months Ended June 30, 2019

For the Nine Months Ended June 30, 2019

Defense Electronics

6 unchanged sentences

The following table provides a reconciliation of Segment adjusted EBITDA to Income before taxes from continuing operations:

For the Three Months Ended March 31,

For the Six Months Ended March 31,

For the Three Months Ended June 30,

For the Nine Months Ended June 30,

Segment adjusted EBITDA:

12 unchanged sentences

Unallocated amounts typically include general corporate expenses not attributable to a reportable segment.

For the Three Months Ended March 31,

For the Six Months Ended March 31,

For the Three Months Ended June 30,

For the Nine Months Ended June 30,

DEPRECIATION and AMORTIZATION

10 unchanged sentences

Total consolidated capital expenditures

At March 31, 2020

At June 30, 2020

At September 30, 2019

9 unchanged sentences

Defined benefit pension expense (income) included in Other Income (Expense), net was as follows:

Three Months Ended March 31,

Six Months Ended March 31,

Three Months Ended June 30,

Nine Months Ended June 30,

Interest cost

5 unchanged sentences

NOTE 14 – RECENT ACCOUNTING PRONOUNCEMENTS

In February 2016, the FASB issued guidance on lease accounting requiring lessees to recognize a right-of-use asset and a lease liability for long-term leases and to disclose additional quantitative and qualitative information about leasing arrangements.

New Accounting Standards Implemented

In March 2020, the Financial Accounting Standards Board ("FASB") issued optional guidance for a limited time relating to accounting for the discontinuation of the LIBOR rate also known as reference rate reform.

The amendments in this update provide optional practical expedients and exceptions for applying U.S.

GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met.

The amendments in this update are applicable to contract modifications that replace a reference LIBOR rate beginning on March 12, 2020 through December 31, 2022.

The optional expedients primarily apply to the Griffon’s Credit Agreement and Non-U.S.

The optional expedients allow the Company to account for modifications due to reference rate reform by prospectively adjusting the effective interest rate on these agreements.

The Company expects to apply the optional practical expedients and exceptions to modifications of its agreements affected by reference rate reform.

As of June 30, 2020, the Company has not modified its agreements subject to reference rate reform.

In February 2016, FASB issued guidance on lease accounting requiring lessees to recognize a right-of-use asset and a lease liability for long-term leases and to disclose additional quantitative and qualitative information about leasing arrangements.

During 2019, the Company developed a project plan to guide the implementation of this guidance.

6 unchanged sentences

The standard had no material impact to retained earnings or on our Condensed Consolidated Statements of Income or Condensed Consolidated Statements of Cash Flows.

In May 2017, the FASB issued guidance to address the situation when a company modifies the terms of a stock compensation award previously granted to an employee.

This guidance is effective, and should be applied prospectively, for fiscal years beginning after December 15, 2017.

Early adoption is permitted as of the beginning of an annual period.

The new guidance was effective for the Company beginning in fiscal 2019;

however, the Company adopted this guidance as of October 1, 2018 and it did not have a material impact on the Company's financial condition, results of operations and related disclosures.

In March 2017, the FASB issued amendments to the Compensation - Retirement Benefits guidance which requires companies to retrospectively present the service cost component of net periodic benefit cost for pension and retiree medical plans along with other compensation costs in operating income and present the other components of net periodic benefit cost below operating income in the income statement.

The guidance also allows only the service cost component of net periodic benefit cost to be eligible for capitalization within inventory or fixed assets on a prospective basis.

This guidance was effective for fiscal years beginning after December 15, 2017.

The Company adopted the requirements of the standard as of October 1, 2018 on a retrospective basis reclassifying the other components of the net periodic benefit costs from Selling, general and administrative expenses to a non-service expense within Other (income) expense, net.

This guidance did not have a material impact on the Company's results of operations.

See Note 11 - Employee Benefit Plans for further information on the implementation of this guidance.

In January 2017, the FASB issued guidance that simplifies how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test.

Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit's goodwill with the carrying amount of that goodwill.

This guidance is effective for annual periods beginning after December 15, 2019, including interim periods within those periods and is effective for the Company beginning October 1, 2020.

The Company does not expect this guidance to have a material impact on the Company's financial condition, results of operations or related disclosures.

In August 2016, the FASB issued guidance on the Statement of Cash Flows Classification of certain cash receipts and cash payments (a consensus of the FASB Emerging Issues Task Force).

This guidance addresses the following eight specific cash flow issues:

Debt prepayment or debt extinguishment costs;

settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing;

contingent consideration payments made after a business combination;

proceeds from the settlement of insurance claims;

proceeds from the settlement of corporate-owned life insurance policies (including bank-owned life insurance policies);

distributions received from equity method investees;

beneficial interests in securitization transactions;

and separately identifiable cash flows and application of the predominance principle.

This guidance was effective for the Company beginning in fiscal 2019.

The Company adopted the requirements of the standard in the first quarter of 2019 and it did not have a material impact on the Company's financial condition, results of operations and cash flows.

In May 2014, the FASB issued ASU No.

5 unchanged sentences

Results for reporting periods beginning October 1, 2018 are presented under ASC 606, while prior period amounts were not adjusted and continue to be reported in accordance with the Company’s historic accounting under Topic 605, Revenue Recognition.

Under the modified retrospective method, the Company recognized the cumulative effect of initially applying this accounting standard as an adjustment to the opening balance in retained

earnings of approximately $ 5,673 as of October 1, 2018.

Under the modified retrospective method, the Company recognized the cumulative effect of initially applying this accounting standard as an adjustment to the opening balance in retained earnings of approximately $ 5,673 as of October 1, 2018.

The impact to beginning retained earnings primarily related to certain contracts in the Defense Electronics Segment containing provisions for radar and communication products that have an alternative use and/or no right to payment.

4 unchanged sentences

Upon adoption of this guidance as of October 1, 2019, based on our evaluation, we elected not to reclassify the income tax effects of the Tax Cuts and Jobs Act from accumulated other comprehensive income to retained earnings.

The adoption of this standard did not have an impact on the Company's financial condition, results of operations, or cash flow.

Issued but not yet effective accounting pronouncements

In March 2020, the FASB issued guidance relating to accounting for the discontinuation of the LIBOR rate.

This guidance provides practical expedients and exceptions for applying U.S.

GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met.

This guidance is applicable to contract modifications that replace a reference LIBOR rate affected by reference rate reform.

The amendments may be applied through December 31, 2022.

The Company will apply this guidance to transactions and modifications of these arrangements.

In December 2019, the FASB issued guidance on simplifying the accounting for income taxes by clarifying and amending existing guidance related to the recognition of franchise tax, the evaluation of a step up in the tax basis of goodwill, and the effects of enacted changes in tax laws or rates in the effective tax rate computation, among other clarifications.

2 unchanged sentences

In April 2019, the FASB issued guidance relating to accounting for credit losses on financial instruments, including trade receivables and derivatives and hedging.

This guidance is effective for all entities for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years, with early adoption permitted, and will be effective for the Company beginning in 2020.

We are currently evaluating the effects that the adoption of this guidance will have on our consolidated financial statements and the related disclosures.

We do not expect the adoption of this guidance to have a material effect on our consolidated financial statements and the related disclosures.

In August 2018, the FASB issued guidance which modifies the disclosures on fair value measurements by removing the requirement to disclose the amount and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy and the policy for timing of such transfers.

This guidance expands the disclosure requirements for Level 3 fair value measurements, primarily focused on changes in unrealized gains and losses included in other comprehensive income (loss).

This guidance is effective for fiscal years beginning after December 15, 2019, with early adoption permitted, and will be effective for the Company beginning in 2021.

This guidance is effective for fiscal years beginning after December 15, 2019, with early adoption permitted, and will be effective for the Company beginning in fiscal year 2021.

We are currently evaluating the effects that the adoption of this guidance will have on our consolidated financial statements and the related disclosures.

2 unchanged sentences

We are currently evaluating the effects that the adoption of this guidance will have on our consolidated financial statements and the related disclosures.

In January 2017, the FASB issued guidance that simplifies how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test.

Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit's goodwill with the carrying amount of that goodwill.

This guidance is effective for annual periods beginning after December 15, 2019, including interim periods within those periods and is effective for the Company beginning October 1, 2020.

The Company does not expect this guidance to have a material impact on the Company's financial condition, results of operations or related disclosures.

The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements, and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

9 unchanged sentences

Installation Services is excluded from segment reporting.

There was no Installation Services revenue or income for the three and six months ended March 31, 2020 and 2019.

There was no Installation Services revenue or income for the three and nine months ended June 30, 2020 and 2019.

In 2017, Griffon recorded $ 5,700 of reserves in discontinued operations related to historical environmental remediation efforts and to increase the reserve for homeowner association (HOA) claims related to the Clopay Services Corporation discontinued operations in 2008.

The following amounts summarize the total assets and liabilities of Plastics and Installation Services and other discontinued activities which have been segregated from Griffon’s continuing operations, and are reported as assets and liabilities of discontinued operations in the Condensed Consolidated Balance Sheets:

At March 31, 2020

The following amounts summarize the total assets and liabilities are primarily for the Installation Services and other discontinued activities which have been segregated from Griffon’s continuing operations, and are reported as assets and liabilities of discontinued operations in the Condensed Consolidated Balance Sheets:

At June 30, 2020

At September 30, 2019

7 unchanged sentences

Total liabilities of discontinued operations

At March 31, 2020 , Griffon's assets and liabilities for Plastics and Installations Services and other discontinued operations primarily related to insurance claims, income tax, and product liability, and warranty and environmental reserves.

At June 30, 2020 , Griffon's assets and liabilities for Installations Services and other discontinued operations primarily related to insurance claims, income tax, and product liability, and warranty and environmental reserves.

NOTE 16 – RESTRUCTURING CHARGES

8 unchanged sentences

The remaining $ 19,000 of charges are non-cash and are primarily related to asset write-downs.

In the quarter and six months ended March 31, 2020, CPP incurred pre-tax restructuring and related exit costs approximating $ 3,104 and $ 9,538 , respectively.

For the six month period ended March 31, 2020, the cash charges are comprised of $ 4,846 and non-cash, asset-related charges of $ 4,692 ;

In the quarter and nine months ended June 30, 2020, CPP incurred pre-tax restructuring and related exit costs approximating $ 1,633 and $ 11,171 , respectively.

For the nine month period ended June 30, 2020, cash charges totaled $ 6,479 and non-cash, asset-related charges totaled $ 4,692 ;

the cash charges included $ 4,842 for one-time termination benefits and other personnel-related costs and $ 1,637 for facility exit costs.

2 unchanged sentences

A summary of the restructuring and other related charges included in Cost of goods and services and Selling, general and administrative expenses in the Company's Condensed Consolidated Statements of Operations were as follows:

For the Three Months Ended March 31, 2020

For the Six Months Ended March 31, 2020

For the Three Months Ended June 30, 2020

For the Nine Months Ended June 30, 2020

Cost of goods and services

1 unchanged sentence

Total restructuring charges

For the Three Months Ended March 31, 2020

For the Six Months Ended March 31, 2020

For the Three Months Ended June 30, 2020

For the Nine Months Ended June 30, 2020

Personnel related costs

13 unchanged sentences

Accrued liability at March 31, 2020

Q3 restructuring charges

Cash payments

Accrued liability at June 30, 2020

(1) Non-cash charges in Facility and Other Costs primarily represent the non-cash write-off of certain long-lived assets in connection with certain facility closures.

NOTE 17 – OTHER INCOME (EXPENSE)

For the quarters ended March 31, 2020 and 2019 , Other income (expense) includes $ 745 and ($ 118 ) , respectively, of net currency exchange gains (losses) in connection with the translation of receivables and payables denominated in currencies other than the functional currencies of Griffon and its subsidiaries, net periodic benefit plan income of $ 389 and $ 787 , respectively, as well as $( 230 ) and $ 108 , respectively, of net investment (loss) income.

For the six months ended March 31, 2020 and 2019, Other income (expense) includes $ 369 and $ 384 , respectively, of net currency exchange gains (losses) in connection with the translation of receivables and payables denominated in currencies other than the functional currencies of Griffon and its subsidiaries, net periodic benefit plan income of $ 778 and 1,574 , respectively, as well as $( 149 ) and $ 31 , respectively, of net investment (loss) income.

During the six months ended March 31, 2020, Other income (expense) also includes a one-time contract award of $ 700 .

For the quarters ended June 30, 2020 and 2019 , Other income (expense) includes $ 72 and $ 150 , respectively, of net currency exchange gains (losses) in connection with the translation of receivables and payables denominated in currencies other than the functional currencies of Griffon and its subsidiaries, net periodic benefit plan income of $ 392 and $ 787 , respectively, as well as $ 294 and $( 14 ) , respectively, of net investment (loss) income.

For the nine months ended June 30, 2020 and 2019, Other income (expense) includes $ 441 and $ 535 , respectively, of net currency exchange gains (losses) in connection with the translation of receivables and payables denominated in currencies other than the functional currencies of Griffon and its subsidiaries, net periodic benefit plan income of $ 1,170 and $ 2,361 , respectively, as well as $ 145 and $ 18 , respectively, of net investment (loss) income.

During the nine months ended June 30, 2020, Other income (expense) also includes a one-time contract award of $ 700 .

NOTE 18 – WARRANTY LIABILITY

5 unchanged sentences

Changes in Griffon’s warranty liability, included in Accrued liabilities, were as follows:

Three Months Ended March 31,

Six Months Ended March 31,

Three Months Ended June 30,

Nine Months Ended June 30,

Balance, beginning of period

4 unchanged sentences

The amounts recognized in other comprehensive income (loss) were as follows:

Three Months Ended March 31, 2020

Three Months Ended March 31, 2019

Three Months Ended June 30, 2020

Three Months Ended June 30, 2019

Foreign currency translation adjustments

2 unchanged sentences

Total other comprehensive income (loss)

Six Months Ended March 31, 2020

Six Months Ended March 31, 2019

Nine Months Ended June 30, 2020

Nine Months Ended June 31, 2019

Foreign currency translation adjustments

3 unchanged sentences

The components of Accumulated other comprehensive income (loss) are as follows:

At March 31, 2020

At June 30, 2020

At September 30, 2019

3 unchanged sentences

Amounts reclassified from accumulated other comprehensive income (loss) to income were as follows:

For the Three Months Ended March 31,

For the Six Months Ended March 31,

For the Three Months Ended June 30,

For the Nine Months Ended June 30,

Pension amortization

11 unchanged sentences

Finance leases are included in property, plant, and equipment, net, other accrued liabilities, and other non-current liabilities.

The Company's finance

leases are immaterial.

The Company's finance leases are immaterial.

ROU assets, along with any other related long-lived assets, are periodically evaluated for impairment.

In connection with the Company's restructuring activities, during the six months ended March 31, 2020, a $ 1,968 impairment charge was recorded related to a facility’s operating lease as well as $ 671 and of leasehold improvements made to the leased facility that have no recoverable value.

In connection with the Company's restructuring activities, during the nine months ended June 30, 2020, a $ 1,968 impairment charge was recorded related to a facility’s operating lease as well as $ 671 and of leasehold improvements made to the leased facility that have no recoverable value.

See Note 16, Restructuring Charges.

14 unchanged sentences

Components of operating lease costs are as follows:

For the Three Months Ended March 31, 2020

For the Six Months Ended March 31, 2020

For the Three Months Ended June 30, 2020

For the Nine Months Ended June 30, 2020

Variable (a), (b)

3 unchanged sentences

Supplemental cash flow information were as follows:

For the Six Months ended March 31, 2020

For the Nine Months ended June 30, 2020

Cash paid for amounts included in the measurement of lease liabilities:

2 unchanged sentences

Supplemental Condensed Consolidated Balance Sheet information related to leases were as follows:

At March 31, 2020

At June 30, 2020

Operating Leases:

12 unchanged sentences

(1) Finance lease assets are recorded net of accumulated depreciation of $ 1,464 .

The aggregate future maturities of lease payments for operating leases and finance leases as of March 31, 2020 are as follows (in thousands):

The aggregate future maturities of lease payments for operating leases and finance leases as of June 30, 2020 are as follows (in thousands):

Operating Leases

3 unchanged sentences

Present value of lease liabilities

(a) Excluding the six months ended March 31, 2020

(a) Excluding the nine months ended June 30, 2020

The aggregate minimum lease payments for operating leases, as calculated prior to the adoption of ASU 2016-02, were as follows:

1 unchanged sentence

Average lease terms and discount rates were as follows:

At March 31, 2020

At June 30, 2020

Weighted-average remaining lease term (years)

21 unchanged sentences

In August 2018, the DEC sent a letter to the United States Environmental Protection Agency (the “EPA”), in which the DEC requested that the Peekskill Site be nominated by the EPA for inclusion on the National Priorities List (the “NPL”).

Based on DEC’s request and on an analysis by a consultant retained by the EPA, on May 15, 2019 the EPA added the Peekskill Site to the NPL under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA) and is now performing a Remedial Investigation/Feasibility Study.

Based on DEC’s request and on an analysis by a consultant retained by the EPA, on May 15, 2019 the EPA added the Peekskill Site to the

NPL under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA) and is now performing a Remedial Investigation/Feasibility Study.

The EPA estimates that it will select a remedy in 2022.

The EPA has announced that it is performing its own remedial investigation/feasibility study of the site.

It is uncertain what subsequent action the EPA will take.

12 unchanged sentences

AMES has entered into an Order on Consent with the New York State Department of Environmental Conservation.

While the Order is without admission or finding of liability or acknowledgment that there has been a release of hazardous substances at the site, AMES is required to perform a remedial investigation and to recommend a remediation option.

At the conclusion of the remediation phase to the satisfaction of the DEC, the DEC will issue a Certificate of Completion.

AMES has performed significant investigative and remedial activities over the last few years under work plans approved by the DEC and is currently implementing a Remedial Action Work Plan for the site property that was approved by the DEC;

the work required by such Remedial Action Work Plan is expected to be completed by summer 2020.

The DEC has also requested that AMES develop a work plan to investigate certain areas immediately adjacent to the former Union Fork and Hoe site.

In 2018, Ames submitted a Feasibility Study recommending excavation of shallow soils for lead, arsenic and hydrocarbons in addition to deeper excavation for lead.

DEC approved the selection of this remedy in 2019 by issuing a Record of Decision.

Remediation activities to satisfy the Record of Decision were completed in June 2020.

The DEC has requested investigation of one additional on-site area and Ames has submitted a workplan to satisfy this request.

The DEC has also requested that Ames develop and implement a workplan to assess certain off-site areas adjoining the boundaries of the site, which Ames expects to submit in August 2020.

AMES has a number of defenses to liability in this matter, including its rights under a previous Consent Judgment entered into between the DEC and a predecessor of AMES relating to the site.

Ames’ insurer has accepted Ames’ claim for a substantial portion of the costs incurred and to be incurred with respect to both the on-site and off-site activities.

Government investigations and claims

10 unchanged sentences

Griffon’s Senior Notes are fully and unconditionally guaranteed, jointly and severally by Clopay Corporation, Telephonics Corporation, The AMES Companies, Inc., ATT Southern LLC, Clopay Ames Holding Corp., ClosetMaid LLC, CornellCookson, LLC and Cornell Real Estate Holdings, LLC, all of which are indirectly 100 % owned by Griffon.

In accordance with Rule 3-10 of Regulation S-X promulgated under the Securities Act, presented below are condensed consolidating financial information as of March 31, 2020 and September 30, 2019 and for the three months ended March 31, 2020 and 2019 .

In accordance with Rule 3-10 of Regulation S-X promulgated under the Securities Act, presented below are condensed consolidating financial information as of June 30, 2020 and September 30, 2019 and for the three and nine months ended June 30, 2020 and 2019 .

The financial information may not necessarily be indicative of the results of operations or financial position of the guarantor companies or non-guarantor companies had they operated as independent entities.

7 unchanged sentences

CONDENSED CONSOLIDATING BALANCE SHEETS

At March 31, 2020

At June 30, 2020

($ in thousands)

62 unchanged sentences

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

For the Three Months Ended March 31, 2020

For the Three Months Ended June 30, 2020

($ in thousands)

17 unchanged sentences

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

For the Three Months Ended March 31, 2019

For the Three Months Ended June 30, 2019

($ in thousands)

20 unchanged sentences

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

For the Six Months Ended March 31, 2020

For the Nine Months Ended June 30, 2020

($ in thousands)

17 unchanged sentences

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

For the Six Months Ended March 31, 2019

For the Nine Months Ended June 30, 2019

($ in thousands)

20 unchanged sentences

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

For the Six Months Ended March 31, 2020

For the Nine Months Ended June 30, 2020

($ in thousands)

9 unchanged sentences

Acquired businesses, net of cash acquired

Investment purchases

Proceeds from sale of assets

14 unchanged sentences

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

For the Six Months Ended March 31, 2019

For the Nine Months Ended June 30, 2019

($ in thousands)

11 unchanged sentences

Investment purchases

Proceeds from sale of business

Insurance payments

17 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements