What changed in this filing

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Item 2. Management’s Discussion and Analysis

2020-07-31 compared with 2020-04-29 · 154 added, 149 removed, 301 unchanged (50% of the section changed)

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As long-term investors, having substantial experience in a variety of industries, our intent is to continue the growth and strengthening of our existing businesses, and to diversify further through investments in our businesses and through acquisitions.

As described in greater detail below, over the past three years, we have undertaken a series of transformative transactions.

This year we integrated our most significant acquisitions into our wholly owned subsidiaries, The AMES Companies, Inc.

Over the past three years, we have undertaken a series of transformative transactions.

We integrated our most significant acquisitions into our wholly owned subsidiaries, The AMES Companies, Inc.

("AMES") and Clopay Corporation ("Clopay"), expanding the scope of both AMES and Clopay.

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Our first priority is the health and safety of our employees, our customers and their families.

As of the date of this filing, all North American and Australian operating locations have been deemed essential and are fully operational, except AMES' plant in Reynosa, Mexico, which will reopen in early May.

In March, the AMES UK, Ireland and New Zealand facilities entered into a furlough with the UK expected to resume operations in July.

As of the date of this filing, all of Griffon's facilities are fully operational.

All of Griffon’s facilities have implemented a variety of new policies and procedures, including additional cleaning, social distancing, staggered shifts and prohibiting or significantly restricting on-site visitors, to minimize the risk to our employees of contracting COVID-19.

Since the end of the second quarter of fiscal 2020 and through the date of this filing, our CPP North American and Australian sales continue to be at normal levels;

HBP commercial sectional and rolling steel sales have continued at normal levels;

HBP residential sectional garage door sales have been negatively impacted by approximately 15-20%;

and sales in our DE segment have not been significantly impacted.

Since the end of the second quarter of fiscal 2020 and through the date of this filing, all of our businesses are experiencing normal or better order patterns compared with the same time period last year, with the exception of HBP's residential sectional garage door business, which experienced an 18% decline in orders in April;

however, the quarter ended with volume in line with prior year driven by strong May and June orders.

Our supply chains have generally not experienced significant disruption, and at this time we do not anticipate any such material disruption in the near term.

states have issued executive orders requiring all workers to remain at home unless their work is critical, essential, or life-sustaining.

We believe that, based on the various standards published to date, the work our employees are performing are either critical, essential and/or life-sustaining for the following reasons:

states have lifted executive orders requiring all workers to remain at home unless their work is critical, essential, or life-sustaining.

Regardless, we believe that, based on the various standards published to date, the work our employees are performing are either critical, essential and/or life-sustaining for the following reasons:

1) DE is a defense and national security-related operation supporting the U.S.

Government, with a portion of its business being directly with

2) HBP residential and commercial garage doors, rolling steel doors and related products (a) provide protection and support for the efficient and safe movement of people, goods, and equipment in and out of residential and commercial facilities, (b) help prevent fires from spreading from one location to another, and (c) protect warehouses and homes, and their contents, from damage caused by strong weather events such as hurricanes and tornadoes;

and 3) CPP tools and storage products provide critical support for the national infrastructure including construction, maintenance and manufacturing and is part of the essential supply base to many of its largest customers including Home Depot, Lowe's and Menards.

Our AMES Canadian and Australia facilities are operational, as they meet the applicable standards in their respective countries;

and our AMES China facility is operating as well.

Government, with a portion of its business being directly with the U.S.

2) HBP residential and commercial garage doors, rolling steel doors and related products that (a) provide protection and support for the efficient and safe movement of people, goods, and equipment in and out of residential and commercial facilities, (b) help prevent fires from spreading from one location to another, and (c) protect warehouses and homes, and their contents, from damage caused by strong weather events such as hurricanes and tornadoes;

3) CPP tools and storage products provide critical support for the national infrastructure including construction, maintenance and manufacturing and is part of the essential supply base to many of its largest customers including Home Depot, Lowe's and Menards.

Our AMES international facilities are operational, as they meet the applicable standards in their respective countries.

Griffon believes it has adequate liquidity to invest in its existing businesses and execute its business plan, while managing its capital structure on both a short-term and long-term basis.

In January 2020, Griffon increased total borrowing capacity under its revolving credit facility ("Credit Agreement") by $50,000, to $400,000 (of which $195,100 was available at March 31, 2020), and extended maturity of the facility to 2025.

In January 2020, Griffon increased total borrowing capacity under its revolving credit facility ("Credit Agreement") by $50,000, to $400,000 (of which $274,202 was available at June 30, 2020), and extended maturity of the facility to 2025.

In addition the Credit Agreement has a $100,000 accordion feature (subject to lender consent).

In February 2020, Griffon refinanced $850,000 of its $1,000,000 of senior notes due 2022 with new senior notes with a maturity of 2028.

In February 2020, Griffon refinanced $850,000 of its $1,000,000 of senior notes due 2022 with new senior notes with a maturity of 2028 and in June 2020, refinanced the remaining $150,000 under the same terms and indenture as the $850,000 senior notes due 2028.

While the first half of Griffon’s fiscal year is typically a net cash usage period, April typically begins Griffon’s period of strong cash generation, which usually continues through the end of the fiscal year.

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Business Highlights

In February 2020, Griffon issued $850,000 of 5.75% Senior Notes due 2028, the proceeds of which were used to redeem $850,000 of 5.25% Senior Notes due 2022.

On February 19, 2020, Griffon issued, at par, $850,000 of 5.75% Senior Notes due in 2028 (the “2028 Senior Notes”) and on June 8, 2020 Griffon issued an additional $150,000, at 100.25% of par, of notes under the same indenture.

Proceeds from the 2028 Senior Notes were used to redeem the $1,000,000 of 5.25% Senior Notes due 2022.

In January 2020, Griffon amended its Credit Agreement to increase the total amount available for borrowing from $350,000 to $400,000, extend its maturity date from March 22, 2021 to March 22, 2025 and modify certain other provisions of the facility.

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(NYSE:EMR) for an effective purchase price of approximately $165,000.

retail chains, mass merchandisers, and direct-to-builder professional installers in North America.

ClosetMaid, founded in 1965, is a leading North American manufacturer and marketer of wood and wire closet organization, general living storage and wire garage storage products, and sells to some of the largest home center retail chains, mass merchandisers, and direct-to-builder professional installers in North America.

We believe that ClosetMaid is the leading brand in its category, with excellent consumer recognition.

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We believe these actions have established a solid foundation for continuing organic growth in sales, profit, and cash generation and bolsters Griffon’s platforms for opportunistic strategic acquisitions.

In 2019, Griffon modified its reportable segment structure to provide investors with improved visibility after a series of portfolio repositioning actions which included the divestiture of the Plastics business, the acquisition of ClosetMaid and its subsequent integration into AMES, and the acquisition of CornellCookson by Clopay.

Griffon now reports its operations through three reportable segments:

the newly formed Consumer and Professional Productions segment, which consists of AMES;

Home and Building Products , which consists of Clopay;

and Defense Electronics, which consists of Telephonics Corporation.

Further Information

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Founded in 1964, Clopay is the largest manufacturer and marketer of garage doors and rolling steel doors in North America.

Residential and commercial sectional garage doors are sold through professional dealers and leading home center retail chains throughout North America under the brands Clopay, Ideal, and Holmes.

Residential and commercial sectional garage doors are sold through professional dealers and leading home center retail chains throughout North America under the brands Clopay, Ideal, and

Rolling steel door and grille products designed for commercial, industrial, institutional, and retail use are sold under the CornellCookson brand.

DE conducts its operations through Telephonics Corporation, founded in 1933, a globally recognized leading provider of highly sophisticated intelligence, surveillance and communications solutions for defense, aerospace and commercial customers.

Revenue for the quarter ended March 31, 2020 was $566,350 compared to $549,633 in the prior year comparable quarter, an increase of approximately 3%, primarily driven by increased revenue at HBP and DE, partially offset by decreased revenue at CPP.

Organic growth was 2%.

Revenue for the quarter ended June 30, 2020 was $632,061 compared to $574,970 in the prior year comparable quarter, an increase of approximately 10%, driven by increased revenue at CPP and DE of 20% and 5%, respectively, partially offset by decreased revenue at HBP of 1%.

Organic revenue growth was 9%.

Income from continuing operations was $21,831 or $0.50 per share, compared to $14,128 , or $0.33 per share, in the prior year quarter.

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– Loss from debt extinguishment $1,235 ( $969 , net of tax, or $0.02 per share);

– Acquisition costs of $2,960 ( $2,321 , net of tax, or $0.05 per share);

– Discrete and certain other tax benefits, net, of $1,413 or $0.03 per share.

– Discrete and certain other tax provision, net, of $1,828 or $0.04 per share.

The prior year quarter results from continuing operations included discrete and certain other tax benefits, net, of $669 or $0.02 per share.

Excluding these items from the respective quarterly results, Income from continuing operations would have been $25,852 , or $0.59 per share, in the current year quarter compared to $13,459 , or $0.31 per share in the prior year quarter.

Revenue for the six months ended March 31, 2020 was $1,114,788 compared to $1,060,155 in the prior year period, an increase of 5%, primarily driven by increased revenue from all segments, primarily HBP from organic growth.

Revenue for the nine months ended June 30, 2020 was $1,746,849 compared to $1,635,125 in the prior year period, an increase of 7%, driven by increased revenue at CPP and HBP driven by strong customer demand in the home improvement space.

Organic growth was 6%.

CPP revenue increased by 9%, 7% organically.

HBP revenue increased by 6% and DE revenue increased by 3%.

Income from continuing operations was $33,338 or $0.76 per share, compared to $29,371 , or $0.69 per share, in the prior year period.

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– Acquisition costs of $2,960 ( $2,321 , net of tax, or $0.05 per share);

– Discrete and certain other tax benefits, net, of $580 or $0.01 per share.

The prior year-to-date results from continuing operations included discrete and certain other tax provisions, net, of $370 or $0.01 per share.

Excluding these items from the respective periods, Income from continuing operations would have been $25,646 , or $0.59 per share in the current year period ended March 31, 2020 compared to $15,613 , or $0.37 per share, in the comparable prior year period.

– Discrete and certain other tax provision, net, of $1,248 or $0.03 per share.

The prior year-to-date results from continuing operations included discrete and certain other tax benefits, net, of $299 or $0.01 per share.

Excluding these items from the respective periods, Income from continuing operations would have been $51,498 , or $1.18 per share in the current year period ended June 30, 2020 compared to $29,072 , or $0.68 per share, in the comparable prior year period.

Griffon evaluates performance based on Net income and the related Earnings per share excluding restructuring charges, loss from debt extinguishment, acquisition related expenses and discrete and certain other tax items, as well as other items that may affect comparability, as applicable.

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TO ADJUSTED INCOME 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,

Income from continuing operations

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Acquisition costs

Tax impact of above item

Tax impact of above items

Discrete and certain other tax provisions (benefits), net

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RESULTS OF CONTINUING OPERATIONS

Three and Six months ended March 31, 2020 and 2019

Three and Nine months ended June 30, 2020 and 2019

In the fourth quarter of fiscal 2019, Griffon modified its reportable segment structure to provide investors with improved visibility after a series of portfolio repositioning actions which included the divestiture of the Plastics business, the acquisition of ClosetMaid and its subsequent integration into AMES, and the acquisition of CornellCookson by Clopay.

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Consumer and Professional Products

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,

Adjusted EBITDA

Depreciation and amortization

For the quarter ended March 31, 2020 , revenue decreased $12,820 or 4% , compared to the prior year period, driven by decreased volume of 7%, primarily due to prior year new product load-ins and the unfavorable impact of COVID-19 in the UK, and an unfavorable impact of foreign exchange of 1%, partially offset by favorable price and mix of 2% and incremental revenue from the Apta acquisition of 2%.

For the quarter ended March 31, 2020 , Adjusted EBITDA decreased 13% to $25,027 compared to $28,616 in the prior year period.

The unfavorable variance resulted from the reduced revenue noted above and increased tariffs.

For the quarter ended March 31, 2020, EBITDA reflects an unfavorable foreign exchange impact of 1%.

For the six months ended March 31, 2020 , revenue increased $11,782 or 2% , compared to the prior year period, with 3% due from favorable pricing and mix and incremental revenue from the Apta acquisition of 1%, partially offset by a 1% decrease in volume due to prior year new product load-ins and the unfavorable impact of COVID-19 in the UK, and an 1% unfavorable impact due to foreign exchange.

For the six months ended March 31, 2020 , Adjusted EBITDA decreased 5% to $46,953 compared to $49,181 in the prior year period.

The unfavorable variance resulted from increased tariff costs, partially offset by the increased revenue noted above, including the benefit of the incremental revenue contributed by the Apta acquisition.

For the six months ended March 31, 2020, EBITDA reflects an unfavorable foreign exchange impact of 2%.

For the quarter ended June 30, 2020 , revenue increased $55,219 or 20% , compared to the prior year period, primarily due to increased volume of 19%, driven by increased consumer demand for home improvement initiatives in North America and Australia resulting from COVID-19 stay at home orders, favorable price and mix of 1% and incremental revenue from the Apta acquisition of 2%, partially offset by an unfavorable impact of foreign exchange of 2%.

Organic growth was 18%.

For the quarter ended June 30, 2020 , Adjusted EBITDA increased 55% to $37,115 compared to $23,970 in the prior year period.

The favorable variance resulted primarily from the increased revenue noted above, partially offset by increased tariffs and COVID-19 related inefficiencies and direct costs.

For the quarter ended June 30, 2020, EBITDA reflects an unfavorable foreign exchange impact of 2%.

For the nine months ended June 30, 2020 , revenue increased $67,001 or 9% , compared to the prior year period, driven by increased volume of 6% for reasons noted above, favorable price and mix of 2% and incremental revenue from the Apta acquisition of 2%, partially offset by a 1% unfavorable impact due to foreign exchange.

Organic growth was 7%.

For the nine months ended June 30, 2020 , Adjusted EBITDA increased 15% to $84,068 compared to $73,151 in the prior year period.

The favorable variance primarily resulted increased revenue noted above, partially offset by tariffs and COVID-19 related inefficiencies and direct costs.

For the nine months ended June 30, 2020, EBITDA reflects an unfavorable foreign exchange impact of 2%.

Direct COVID-19 related expenses totaled approximately $2,207 and $2,471 for the quarter and year to date periods, respectively.

Segment depreciation and amortization remained consistent with the prior year comparable quarter and increased $502 from the year-to-date comparable period primarily due to the onset of depreciation for new assets placed in service.

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

In connection with this initiative, during the six months ended March 31, 2020, CPP incurred pre-tax restructuring and related exit costs approximating $9,538 , comprised of cash charges of $4,846 and non-cash, asset-related charges of $4,692 ;

the cash charges included $3,792 for one-time termination benefits and other personnel-related costs and $1,054 for facility exit costs.

In connection with this initiative, during the nine months ended June 30, 2020, CPP incurred pre-tax restructuring and related exit costs approximating $11,171 , comprised of cash charges of $6,479 and non-cash, asset-related charges of $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.

During the quarter and nine month period ended June 30, 2020, capital expenditures of $3,371 and $3,671 , respectively, were driven by investment in CPP business intelligence systems and e-commerce facility.

Non-Cash Charges

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Q2 FY2020 Activity

Q3 FY2020 Activity

Total charges

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Home and Building Products

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,

Adjusted EBITDA

Depreciation and amortization

For the quarter ended March 31, 2020 , revenue increased $23,030 or 12% , compared to the prior year period, due to increased volume of 9% with an additional 3% due to favorable mix and pricing.

For the quarter ended March 31, 2020 , Adjusted EBITDA increased 52% to $30,635 compared to $20,137 in the prior year period.

The favorable variance resulted primarily from the increased revenue noted above including mix, pricing and volume related benefits on absorption, as well as improved operational efficiencies.

For the six months ended March 31, 2020 , revenue increased $41,116 or 10% , compared to the prior year period, with 7% due to increased volume with an additional 3% due to favorable mix and pricing.

For the six months ended March 31, 2020 , Adjusted EBITDA increased 39% to $71,336 compared to $51,432 in the prior year period.

The favorable variance resulted from the increased revenue noted above, including volume related benefits on absorption, and improved operational efficiencies.

Segment depreciation and amortization increased $120 and $411 , respectively, from the prior year quarter and year-to-date period, respectively, primarily due to the onset of depreciation for new assets placed in service.

For the quarter ended June 30, 2020 , revenue decreased $2,357 or 1% , compared to the prior year period, due to decreased volume driven by reduced residential sectional garage door orders in April of approximately18% and a subsequent recovery in May and June.

For the quarter ended June 30, 2020 , Adjusted EBITDA increased 16% to $39,299 compared to $33,851 in the prior year period.

EBITDA benefited from general operational efficiency improvements, partially offset by the decrease in revenue and COVID-19 related inefficiencies and direct costs.

For the nine months ended June 30, 2020 , revenue increased $38,759 or 6% , compared to the prior year period, driven by increased volume of 4%, and favorable mix and pricing of 2%.

For the nine months ended June 30, 2020 , Adjusted EBITDA increased 30% to $110,635 compared to $85,283 in the prior year period.

The favorable variance resulted from the increased revenue noted above and general operational efficiency improvements, partially offset by COVID-19 related inefficiencies and direct costs.

Direct COVID-19 related expenses totaled approximately $1,700 for the quarter and year-to-date periods.

Segment depreciation and amortization decreased $119 from the prior year quarter due to fully depreciated assets, and increased $292 from the prior year-to-date period primarily due to the onset of depreciation for new assets placed in service.

On January 31, 2019, HBP announced a $14,000 investment in facilities infrastructure and equipment at its CornellCookson location in Mountain Top, Pennsylvania.

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Defense Electronics

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,

Adjusted EBITDA

Depreciation and amortization

For the quarter ended March 31, 2020 , revenue increased $6,507 , or 9% , compared to the prior year period, primarily due to increased volume of airborne and maritime surveillance systems.

For the quarter ended March 31, 2020 , Adjusted EBITDA decreased $688 , or 14% , compared to the prior year comparable period, driven by product mix, increased operating expenses associated with the timing of bid and proposal efforts and commissions expense, partially offset by the increased sales volume noted above.

For the six months ended March 31, 2020 , revenue increased $1,735 , or 1% , compared to the prior year period, primarily due to increased airborne surveillance systems revenue, partially offset by reduced multi-mode radar and maritime surveillance radar revenue.

For the six months ended March 31, 2020 , Adjusted EBITDA decreased $998 , or 10% , compared to the prior year comparable period due to product mix and increased operating expenses, partially offset by the increased sales volume noted above.

For the quarter ended June 30, 2020 , revenue increased $4,229 , or 5% , compared to the prior year period, primarily due to increased deliveries and volume of radar and communication systems, partially offset by reduced volume of airborne surveillance systems.

For the quarter ended June 30, 2020 , Adjusted EBITDA decreased $3,158 , or 43% , compared to the prior year comparable period, driven by unfavorable program mix, and program inefficiencies on radar and communications systems.

For the nine months ended June 30, 2020 , revenue increased $5,964 , or 3% , compared to the prior year period, primarily due to increased deliveries and volume of radar and communication systems revenue, partially offset by reduced multi-mode radar and maritime surveillance radar revenue.

For the nine months ended June 30, 2020 , Adjusted EBITDA decreased $4,156 , or 24% , compared to the prior year comparable period due to unfavorable program mix, program inefficiencies and increased operating expenses primarily due to bid and proposal activities.

Direct COVID-19 related expenses totaled approximately $600 and $700 for the quarter and year-to-date periods, respectively.

Segment depreciation and amortization remained consistent with both the prior year comparable quarter and year-to-date period.

During the six months ended March 31, 2020 , DE was awarded several new contracts and received incremental funding on existing contracts approximating $90,000.

Contract backlog was $331,740 at March 31, 2020 , with 73% expected to be fulfilled in the next 12 months.

During the nine months ended June 30, 2020 , DE was awarded several new contracts and received incremental funding on existing contracts approximating $192,700.

Contract backlog was $350,443 at June 30, 2020 , an $18,703 increase from the second quarter, with 72% expected to be fulfilled in the next 12 months.

Backlog was $389,300 at September 30, 2019.

Backlog is defined as unfilled firm orders for products and services for which funding has been both authorized and appropriated by the customer, or by Congress, in the case of US government agencies.

For the quarter ended March 31, 2020 , unallocated amounts, excluding depreciation, consisted primarily of corporate overhead costs totaled $11,947 compared to $11,208 in the prior year quarter.

For the six months ended March 31, 2020 , unallocated amounts, excluding depreciation, consisted primarily of corporate overhead costs totaled $23,889 compared to $22,472 in the prior year quarter.

The increase in the current quarter and six months compared to the respective prior year quarter primarily relates to consulting, compensation and incentive costs.

For the quarter ended June 30, 2020 , unallocated amounts, excluding depreciation, consisted primarily of corporate overhead costs totaling $11,080 compared to $12,033 in the prior year quarter.

For the nine months ended June 30, 2020 , unallocated amounts, excluding depreciation, consisted primarily of corporate overhead costs totaling $34,969 compared to $34,505 in the prior year quarter.

The decrease in the current quarter compared to the respective prior year quarter primarily relates to decreases in consulting fees, travel and administrative office costs;

and the increase for nine months ended June 30, 2020 compared to the respective prior year period primarily relates to compensation and incentive costs.

Segment Depreciation and Amortization

Segment depreciation and amortization increased $213 and $937 for the quarter and six months ended March 31, 2020 , respectively, compared to the comparable prior year period, primarily due to the onset of depreciation for new assets placed in service.

Segment depreciation and amortization remained consistent with the prior year quarter and increased $854 for the nine months ended June 30, 2020 compared to the comparable prior year period, primarily due to the onset of depreciation for new assets placed in service.

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 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 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 .

Provision for 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.

Stock based compensation

For the quarters ended March 31, 2020 and 2019 , stock based compensation expense, which includes expenses for both restricted stock grants and the ESOP, totaled $4,320 and $3,914 , respectively.

For the six months ended March 31, 2020 and 2019 , stock based compensation expense, which includes expenses for both restricted stock grants and the ESOP totaled $8,302 and $7,500 , respectively.

For the quarters ended June 30, 2020 and 2019 , stock based compensation expense, which includes expenses for both restricted stock grants and the ESOP, totaled $4,507 and $4,047 , respectively.

For the nine months ended June 30, 2020 and 2019 , stock based compensation expense, which includes expenses for both restricted stock grants and the ESOP totaled $12,809 and $11,547 , respectively.

Comprehensive income (loss)

For the quarter ended March 31, 2020 , total other comprehensive loss, net of taxes, of $14,834 included a loss of $ 16,471 from foreign currency translation adjustments primarily due to the weakening of the British Pound, and Canadian and Australian Dollars all in comparison to the US Dollar;

For the quarter ended June 30, 2020 , total other comprehensive income, net of taxes, of $8,702 included income of $ 9,508 from foreign currency translation adjustments primarily due to the strengthening of the Euro, British Pound, and Canadian and Australian Dollars all in comparison to the US Dollar;

a $1,139 benefit from pension amortization of actuarial losses;

and a $968 gain on cash flow hedges.

For the six months ended March 31, 2020, total other comprehensive loss, net of taxes, of $7,993 , included a loss of $10,001 from foreign currency translation adjustments primarily due to the weakening of the Canadian and Australian Dollar currencies, all in comparison to the US Dollar, a $1,341 benefit from pension amortization of actuarial losses and a $667 gain on cash flow hedges.

For the quarter ended March 31, 2019, total other comprehensive income, net of taxes, of $2,880, included a gain of $2,885 from foreign currency translation adjustments primarily due to the strengthening of the British Pound and Canadian Dollar, partially offset by the weakening of the Euro, all in comparison to the US Dollar, a $184 benefit from pension amortization of actuarial losses and a $189 loss on cash flow hedges.

For the six months ended March 31, 2019, total other comprehensive loss, net of taxes, of $2,570, included a loss of $2,851 from foreign currency translation adjustments primarily due to the weakening of the Euro and the Canadian and Australian Dollars, all in comparison to the US Dollar, a $368 benefit from pension amortization of actuarial losses and a $87 loss on cash flow hedges.

and a $1,945 loss on cash flow hedges.

For the quarter ended June 30, 2019, total other comprehensive loss, net of taxes, of $1,035 included a loss of $1,092 from foreign currency translation adjustments primarily due to the weakening of the Euro, British Pound and Australian Dollar, partially offset by the strengthening of the Canadian Dollar, all in comparison to the US Dollar;

a $184 benefit from pension amortization of actuarial losses;

and a $127 loss on cash flow hedges.

For the nine months ended June 30, 2020, total other comprehensive income, net of taxes, of $709 , included a loss of $493 from foreign currency translation adjustments primarily due to the weakening of the Canadian Dollar, partially offset by the strengthening of the Euro, British Pound and Australian currencies, all in comparison to the US Dollar, a $2,480 benefit from pension amortization of actuarial losses and a $1,278 loss on cash flow hedges.

For the nine months ended June 30, 2019, total other comprehensive loss, net of taxes, of $3,605 included a loss of $3,943 from foreign currency translation adjustments primarily due to the weakening of the Euro, British Pound, and Canadian and Australian Dollars, all in comparison to the US Dollar;

a $552 benefit from pension amortization of actuarial losses;

and a $214 loss on cash flow hedges.

Discontinued operations

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The charge consisted primarily of a purchase price adjustment to resolve a claim related to the $475,000 PPC divestiture and included an additional reserve for a legacy environmental matter.

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, warranty reserves and environmental reserves, resulting in total liabilities of approximately of $5,604 .

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

See Note 15, Discontinued Operations.

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Cash Flows from Continuing Operations

For the Six Months Ended March 31,

For the Nine months ended June 30,

(in thousands)

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Financing activities

Cash used in operating activities from continuing operations for the six months ended March 31, 2020 was $60,843 compared to $55,006 cash used in the comparable prior year period.

Cash provided by income from continuing operations, adjusted for non-cash expenditures, was more than offset by a net increase in working capital predominately consisting of a net increase in accounts

receivable, an increase in inventory, primarily to meet seasonal demands, and a decrease in accounts payable and current liabilities, due to the timing of payments.

During the six months ended March 31, 2020 , Griffon used $32,760 of cash in investing activities from continuing operations compared to $37,328 used in the prior year comparable period.

Cash provided by operating activities from continuing operations for the nine months ended June 30, 2020 was $55,944 compared to $14,982 in the comparable prior year period.

Cash provided by income from continuing operations, adjusted for non-cash expenditures, was partially offset by a net increase in working capital predominately consisting of net increases in accounts receivable and prepaid and other assets, a decrease in accounts payable due to the timing of payments, partially offset by a decrease in inventory.

The working capital variances in the cash flow in the current year excludes a $28,648 benefit due to the October 1, 2019 prospective adoption of lease accounting guidance, which was in working capital in the prior year.

During the nine months ended June 30, 2020 , Griffon used $45,073 of cash in investing activities from continuing operations compared to $57,162 used in the prior year comparable period.

Payments for acquired businesses totaled $10,531 compared to $9,219 in the prior year comparable period.

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Payments for acquired businesses in the prior year consisted solely of a final purchase price adjustment for CornellCookson.

Payments in the prior year comparable period also included an insurance payment of $10,604 pertaining to the settlement of a certain life insurance benefit.

Capital expenditures, net of proceeds from the sale of assets, for the six months ended March 31, 2020 totaled $22,229 , an increase of $4,873 from the prior year period.

During the six months ended March 31, 2020 , cash provided by financing activities from continuing operations totaled $94,351 as compared to $84,059 provided in the comparable prior year period.

Cash provided by financing activities from continuing operations in the current year period consisted primarily of net borrowings of long term debt.

At March 31, 2020 , there were $183,548 in outstanding borrowings under the Credit Agreement, compared to $157,936 in outstanding borrowings at the same date in the prior year.

Cash provided by financing activities in the current period included financing payments of $13,176 primarily associated with the redemption of 85% of the $1,000,000 of 5.25% Senior Notes due 2022 with the proceeds from the issuance of $850,000 of 5.75% Senior Notes due 2028;

Payments in the prior year comparable period also included $9,500 related to a purchase price adjustment to resolve a claim related to the $475,000 PPC divestiture and an insurance payment of $10,604 pertaining to the settlement of a certain life insurance benefit.

Capital expenditures, net of proceeds from the sale of assets, for the nine months ended June 30, 2020 totaled $34,412 , an increase of $6,722 from the prior year period.

During the nine months ended June 30, 2020 , cash used by financing activities from continuing operations totaled $9,305 as compared to $33,905 provided by in the comparable prior year period.

On June 22, 2020, Griffon completed an add-on offering through a private placement of $150,000 aggregate 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.

Cash provided by financing activities in the current period also included financing payments of $16,543 primarily associated with the redemption of the $1,000,000 of 5.25% Senior Notes due 2022 with the proceeds from the issuance of $850,000 of 5.75% Senior Notes due 2028;

and the amendment and extension of the Company's revolving credit facility increasing the maximum borrowing availability from $350,000 to $400,000 and extending its maturity date from March 22, 2021 to March 22, 2025.

During the six months ended March 31, 2020 , the Board of Directors approved two quarterly cash dividends of $0.075 per share each.

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.

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.

At June 30, 2020 , there were $104,181 in outstanding borrowings under the Credit Agreement, compared to $122,806 in outstanding borrowings at the same date in the prior year.

During the nine months ended June 30, 2020 , the Board of Directors approved three quarterly cash dividends of $0.075 per share each.

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.

During the nine months ended June 30, 2020 , 340,775 shares, with a market value of $7,409 , or $21.74 per share 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.

On August 3, 2016 and August 1, 2018, Griffon’s Board of Directors authorized the repurchase of up to $50,000 of Griffon’s outstanding common stock.

Under these share repurchase programs, the Company may, from time to time, purchase shares of its common stock 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.

Through March 31, 2020, COVID-19 has not had a material impact on our operations, and we anticipate our current cash balances, cash flows from operations and sources of liquidity will be sufficient to meet our cash requirements.

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.

Through June 30, 2020, COVID-19 has not had a material impact on our operations, and we anticipate our current cash balances, cash flows from operations and sources of liquidity will be sufficient to meet our cash requirements.

Payments related to Telephonics revenue are received in accordance with the terms of development and production subcontracts;

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A small number of customers account for, and are expected to continue to account for, a substantial portion of Griffon’s consolidated revenue.

For the six months ended March 31, 2020 :

For the nine months ended June 30, 2020 :

The United States Government and its agencies, through either prime or subcontractor relationships, represented 9% of Griffon’s consolidated revenue and 65% of Telephonics’ revenue.

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Debt, net of cash and equivalents

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, $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 of $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 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 2028 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

outstanding standby letters of credit were $21,617 ;

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On March 13, 2019, the ESOP Term Loan was refinanced with an internal loan from Griffon, which was funded with cash and a draw under its Credit Agreement.

The internal loan interest rate is fixed at 2.91% , matures in June

2033 and requires quarterly payments of principal, currently $635 , and interest.

The internal loan interest rate is fixed at 2.91% , matures in June 2033 and requires quarterly payments of principal, currently $635 , and interest.

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 of Griffon's 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.

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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 its credit and loan agreements.

Net Debt to EBITDA (Leverage), as calculated in accordance with the definition in the Credit Agreement, was 5.1x at March 31, 2020 .

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

Net Debt to EBITDA (Leverage), as calculated in accordance with the definition in the Credit Agreement, was 4.4x at June 30, 2020 .

On each of August 3, 2016 and August 1, 2018, Griffon’s Board of Directors authorized the repurchase of $50,000 of Griffon’s outstanding common stock.

As of March 31, 2020 , an aggregate of $57,955 remains under Griffon's Board authorized 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 2019, the Company declared and paid regular cash dividends totaling $0.29 per share.

During the six months ended March 31, 2020 , the Board of Directors approved and paid two quarterly cash dividends of $0.075 per share each.

currently intends to pay dividends each quarter;

During the nine months ended June 30, 2020 , the Board of Directors approved and paid three quarterly cash dividends of $0.075 per share each.

The Company currently intends to pay dividends each quarter;

however, payment of dividends is determined by the Board of Directors at its discretion based on various factors, and no assurance can be provided as to the payment of future dividends.

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.

During the six months ended March 31, 2020 and 2019, Griffon used cash for discontinued operations from operating activities of $1,994 and $3,438 , respectively, primarily related to the settling of certain liabilities and environmental costs associated with the Plastics business and Installations Services.

During the nine months ended June 30, 2020 and 2019, Griffon used cash for discontinued operations from operating activities of $2,481 and $3,874 , respectively, primarily related to the settling of certain liabilities and environmental costs associated with the Plastics business and Installations Services.

CRITICAL ACCOUNTING POLICIES

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the ability of Griffon’s operating companies to expand into new geographic and product markets and to anticipate and meet customer demands for new products and product enhancements and innovations;

reduced military spending by the government on projects for which Telephonics supplies products, including as a result of defense budget cuts or other government actions;

reduced military spending by the government on projects for which

Telephonics supplies products, including as a result of defense budget cuts or other government actions;

the ability of the federal government to fund and conduct its operations;

8 unchanged sentences

short-term capacity constraints or prolonged excess capacity;

unforeseen developments in contingencies, such as

litigation, regulatory and environmental matters;

unforeseen developments in contingencies, such as litigation, regulatory and environmental matters;

unfavorable results of government agency contract audits of Telephonics;

12 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 2. Management’s Discussion and Analysis