What changed in this filing

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Item 1. Business

2021-11-17 compared with 2020-11-13 · 184 added, 155 removed, 404 unchanged (46% 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.

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

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

We divested our specialty plastics business in 2018 to focus on our core markets and improve our free cash flow conversion.

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AMES is now positioned to fulfill its mission of Bringing Brands Together™ with the leading brands in home and garage organization, outdoor décor, and lawn, garden and cleaning tools.

As a result of the expanded scope of the AMES and Clopay businesses, in 2019 we began reporting each as a separate segment.

Griffon now reports its operations through three segments.

Clopay remains in the Home and Building Products ("HBP") segment, AMES now constitutes our new Consumer and Professional Products ("CPP") segment and our Defense Electronics segment which continues to consist of Telephonics Corporation.

Impact of COVID-19 on Our Business

On September 27, 2021, we announced we are exploring strategic alternatives, including a sale, for our Defense Electronics ("DE") segment, which consists of our Telephonics Corporation subsidiary.

As a result, Griffon classified the results of operations of the Telephonics business as a discontinued operation in the Consolidated Statements of Operations for all periods presented and classified the related assets and liabilities associated with the discontinued operation as held for sale in the consolidated balance sheets.

Accordingly, all references made to results and information in this Annual Report on Form 10-K are to Griffon's continuing operations, unless noted otherwise.

Update of COVID-19 on Our Business

The health and safety of our employees, our customers and their families is a high priority for Griffon.

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We 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.

We manufacture a substantial majority of the products that we sell, with the majority of our manufacturing activities conducted in the United States.

As a result, we have been able to mitigate the adverse impact of the COVID-19 pandemic on the global supply chain.

During fiscal 2020 and through the date of this filing, all of our businesses have experienced normal or better order patterns compared with the same time period last year, with the exception of HBP's sectional door business, which experienced an 18% decline in orders in April but subsequently rebounded.

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

Although many U.S.

states lifted initial executive orders issued earlier in the year requiring all workers to remain at home unless their work is critical, essential, or life-sustaining, some states and localities have recently put in place new restrictions regarding the operation of many types of businesses, or have tightened up restrictions already in place, in response to the recent worsening of the COVID-19 outbreak.

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) Our Defense Electronics segment ("DE") is a defense and national security-related operation supporting the U.S.

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

In the United States, we manufacture a substantial majority of the products that we sell.

While this helps mitigate the effects of global supplier and transportation disruptions, we are still impacted by these disruptions.

Our supply chain has experienced certain disruptions which, together with other factors such as a shortage of labor, has resulted in longer delivery lead times and restricted manufacturing capacity for certain of our products.

Commodity prices have increased during COVID-19 and may continue to increase, and we may not be able to pass off all or any of such price increases to our customers on a timely basis, or at all.

It is difficult to predict whether the supply chain disruptions that impact us will improve, worsen or remain the same in the near term.

Our suppliers could be required by government authorities to temporarily cease operations in accordance with the various restrictions discussed above;

might be limited in their production capacity due to complying with restrictions relating to the operation of businesses during the

COVID-19 pandemic;

or could suffer their own supply chain disruptions, impacting their ability to continue to supply us with the quantity of materials required by us.

During fiscal 2021 and through the date of this filing, all of our businesses have experienced normal or better order patterns compared with pre-pandemic levels.

executive orders issued in 2020 which required all workers to remain at home unless their work is critical, essential, or life-sustaining, have been lifted.

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) 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;

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

On September 9, 2021, President Biden announced a proposed new rule requiring that all employers with at least 100 employees require that their employees be fully vaccinated or tested weekly.

Department of Labor’s Occupational Safety and Health Administration (“OSHA”) issued an emergency temporary standard regulation to carry out this mandate.

On November 6, 2021, the Unites States Court of Appeals for the Fifth Circuit granted a stay of the emergency temporary standard, and on November 12, 2021 the Court upheld its stay and barred OSHA from enforcing the mandate “pending adequate judicial review” of a motion for permanent injunction.

At this time, it is unclear, among other things, when the vaccine mandate will go into effect (or if it will go into effect at all);

whether it will apply to all employees or only to employees who work in the office;

and how compliance will be documented.

As a company with more than 100 employees, it is anticipated that, should the vaccine mandate go into effect, we would be subject to the OSHA regulation concerning COVID-19 vaccination and the vaccine mandate.

Should the mandate apply to us, we may be required to implement a requirement that all of our employees get vaccinated, subject to limited exceptions.

At this time, it is not possible to predict the impact that a vaccine mandate, or a vaccine requirement should we adopt one, will have on us or on our workforce.

Any vaccine requirement or vaccine mandate, if implemented, may result in employee attrition, which could materially and adversely affect our business and results of operations.

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.

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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 5.75% 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.

During 2020, Griffon refinanced its $1,000,000 of senior notes due 2022 with new 5.75% senior notes with a maturity of 2028.

In August 2020, we completed a public offering of 8,700,000 shares of our common stock for total net proceeds of $178,165 (the "Public Offering");

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Business Highlights

As noted above, Griffon is exploring strategic alternatives, including a sale, for its Defense Electronics business.

Griffon believes these alternatives will increase long-term value for Griffon shareholders, while creating enhanced growth opportunities for Telephonics.

Telephonics is recognized globally as a leading provider of highly sophisticated intelligence, surveillance and communications solutions that are deployed across a wide range of land, sea and air applications.

Telephonics designs, develops, manufactures and provides logistical support and lifecycle sustainment services to defense, aerospace and commercial customers worldwide.

In August 2020 Griffon completed the Public Offering of 8,700,000 shares of our common stock for total net proceeds of $178,165.

The Company used a portion of the net proceeds to repay outstanding borrowings under its Credit Agreement.

The Company intends to use the remainder of the proceeds for general corporate purposes, including to expand its current business through acquisitions of, or investments in, other businesses or products.

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 of 2028 Senior Notes at 100.25% of par under the same indenture.

Company intends to use the remainder of the proceeds for general corporate purposes, including to expand its current business through acquisitions of, or investments in, other businesses or products.

During 2020, Griffon issued, at par, $1,000,000 of 5.75% Senior Notes due in 2028 (the “2028 Senior Notes”).

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

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In November 2019, Griffon announced the development of a next-generation business platform for CPP to enhance the growth, efficiency, and competitiveness of its U.S.

operations, and on November 12, 2020, Griffon announced that CPP is broadening this strategic initiative to include additional North American facilities, the AMES UK and Australia businesses, and a manufacturing facility in China.

operations, and on November 12, 2020, Griffon announced that CPP is broadening this strategic initiative to include additional North American facilities, the AMES United Kingdom (U.K.) and Australia businesses, and a manufacturing facility in China.

The expanded focus of this initiative leverages the same three key development areas being executed within our U.S.

First, multiple independent information systems will be unified into a single data and analytics platform, which will serve the whole AMES global enterprise.

Second, certain AMES global operations will be consolidated to optimize facilities footprint and talent.

Third, strategic investments in automation and facilities expansion will be made to increase the efficiency of our manufacturing and fulfillment operations, and support e-commerce growth.

First, certain AMES global operations will be consolidated to optimize facilities footprint and talent.

Second, strategic investments in automation and facilities expansion will be made to increase the efficiency of our manufacturing and fulfillment operations, and support e-commerce growth.

Third, multiple independent information systems will be unified into a single data and analytics platform, which will serve the whole AMES global enterprise.

Expanding the roll-out of the new business platform from our AMES U.S.

operations to include AMES’ global operations will extend the duration of the project by one year, with completion now expected by the end of calendar year 2023.

When fully implemented, these actions will result in annual cash savings of $30,000 to $35,000 (increased from $15,000 to $20,000 ) and a reduction in inventory of $30,000 to $35,000 (increased from $20,000 to $25,000 ), both based on fiscal 2020 operating levels.

The cost to implement this new business platform, over the duration of the project, will include one-time charges of approximately $65,000 (increased from $35,000 ) and capital investments of approximately $65,000 (increased from $40,000 ).

When fully implemented, these actions will result in annual cash savings of $30,000 to $35,000 and a reduction in inventory of $30,000 to $35,000, both based on fiscal 2020 operating levels.

The cost to implement this new business platform, over the duration of the project, will include one-time charges of approximately $65,000 and capital investments of approximately $65,000.

The one-time charges are comprised of $46,000 of cash charges, which includes $26,000 of personnel-related costs such as training, severance, and duplicate personnel costs as well as $20,000 of facility and lease exit costs.

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

On November 29, 2019, AMES acquired Vatre Group Limited ("Apta"), a leading United Kingdom supplier of innovative garden pottery and associated products sold to leading UK and Ireland garden centers for approximately $10,500 (GBP 8,750 ), inclusive of a post-closing working capital adjustment, net of cash acquired.

This acquisition broadens AMES' product offerings in the UK market and increases its in-country operational footprint.

Apta is expected to contribute $15,000 in revenue in the first 12 months after the acquisition.

In June 2018, Clopay acquired CornellCookson, a leading provider of rolling steel service doors, fire doors, and grilles, for an effective purchase price of approximately $170,000.

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In March 2018, we announced the combination of the ClosetMaid operations with those of AMES.

ClosetMaid generated over $300,000 in revenue in the first twelve months after the acquisition, and we anticipate the integration with AMES will unlock additional value given the complementary products, customers, warehousing and distribution, manufacturing, and sourcing capabilities of the two businesses.

On September 5, 2017, Griffon announced the acquisition of ClosetMaid and the commencement of the strategic alternatives process for Clopay Plastic Products, beginning the transformation of Griffon.

ClosetMaid generated over $300,000 in revenue in the first twelve months after the acquisition, and the integration with AMES improved operational efficiencies by leveraging the complementary products, customers, warehousing and distribution, manufacturing, and sourcing capabilities of the two businesses.

In February 2018, we closed on the sale of our Clopay Plastics Products ("Plastics") business to Berry Global, Inc.

("Berry") for approximately $465,000, net of certain post-closing adjustments, thus exiting the specialty plastics industry that the Company had entered when it acquired Clopay Corporation in 1986.

This transaction provided immediate liquidity and improved Griffon's cash flow given the historically higher capital needs of the Plastics operations as compared to Griffon’s remaining businesses.

In October 2017, we acquired ClosetMaid from Emerson Electric Co.

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

In February 2018, we closed on the sale of our Clopay Plastics Products ("Plastics") business to Berry Global, Inc.

("Berry") for approximately $465,000, net of certain post-closing adjustments, thus exiting the specialty plastics industry that the Company had entered when it acquired Clopay Corporation in 1986.

This transaction provided immediate liquidity and positions the Company to improve its cash flow conversion given the historically higher capital needs of the Plastics operations as compared to Griffon’s remaining businesses.

On February 13, 2018, AMES acquired Kelkay, a leading United Kingdom manufacturer and distributor of decorative outdoor landscaping products sold to garden centers, retailers and grocers in the UK and Ireland for approximately $56,118 (GBP 40,452) and contingent consideration of approximately GBP 7,000 , of which approximately GBP 2,200 was earned.

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

Other Acquisitions and Dispositions

On December 22, 2020, AMES acquired Quatro Design Pty Ltd (“Quatro”), a leading Australian manufacturer and supplier of glass fiber reinforced concrete landscaping products for residential, commercial, and public sector projects for a purchase price of AUD $3,500 (approximately $2,700).

The purchase price is subject to additional contingent consideration of approximately AUD $1,000 (approximately $760) based on Quatro exceeding certain EBITDA performance targets in the first year.

Quatro is expected to contribute approximately $5,000 in annualized revenue in the first twelve months after the acquisition.

On December 18, 2020, Defense Electronics completed the sale of its Systems Engineering Group, Inc.

(“SEG”) business for $15,000.

SEG provides sophisticated, highly technical engineering and analytical support to the U.S.

Missile Defense Agency and various U.S.

military commands.

SEG had sales of approximately $7,000 for the first fiscal quarter ended December 31, 2020 and $31,000 for the fiscal year ended September 30, 2020.

On November 29, 2019, AMES acquired Vatre Group Limited ("Apta"), a leading U.K.

supplier of innovative garden pottery and associated products sold to leading U.K.

and Ireland garden centers for approximately $10,500 (GBP 8,750), inclusive of a post-closing working capital adjustment, net of cash acquired.

This acquisition broadens AMES' product offerings in the U.K.

market and increases its in-country operational footprint.

Apta contributed approximately $20,000 in revenue in the first twelve months after the acquisition.

On February 13, 2018, AMES acquired Kelkay, a leading U.K.

manufacturer and distributor of decorative outdoor landscaping products sold to garden centers, retailers and grocers in the U.K.

This acquisition broadened AMES' product offerings in the market and increased its in-country operational footprint.

Kelkay contributed approximately $35,000 in revenue in the first twelve months after the acquisition.

In November 2017, Griffon acquired Harper Brush Works, a leading U.S.

manufacturer of cleaning products for professional, home, and industrial use, from Horizon Global (NYSE:HZN) for approximately $5,000.

manufacturer of cleaning products for professional, home, and industrial use, from Horizon Global (NYSE:HZN).

This acquisition expanded the AMES line of long-handle tools in North America to include brooms, brushes, and other cleaning products.

Harper, as expected, generated approximately $10,000 in revenue in the first twelve months after the acquisition.

During fiscal 2017, Griffon also completed a number of other acquisitions to expand and enhance AMES' global footprint.

In the United Kingdom, Griffon acquired La Hacienda, an outdoor living brand of unique heating and garden décor products, in July 2017.

The acquisition of La Hacienda, together with the February 2018 acquisition of Kelkay and November 2020 acquisition of Apta, provides AMES with additional brands and a platform for growth in the UK market and access to leading garden centers, retailers, and grocers in the UK and Ireland.

The acquisition of La Hacienda, together with the February 2018 acquisition of Kelkay and November 2020 acquisition of Apta, provides AMES with additional brands and a platform for growth in the U.K.

market and access to leading garden centers, retailers, and grocers in the UK and Ireland.

In Australia, Griffon acquired Hills Home Living, the iconic brand of clotheslines and home products, from Hills Limited (ASX:HIL) in December 2016, and in September 2017 Griffon acquired Tuscan Path, an Australian provider of pots, planters, pavers, decorative stone, and garden décor products.

The Hills and Tuscan Path acquisitions broadened AMES' outdoor living and lawn and garden business, strengthening AMES’ portfolio of brands and its market position in Australia and New Zealand.

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

The Hills, Tuscan Path and December, 2020 Quatro acquisitions broadened AMES' outdoor living and lawn and garden business, strengthening AMES’ portfolio of brands and its market position in Australia and New Zealand.

Further Information

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Reportable Segments:

Griffon conducts its operations through three reportable segments:

Griffon now conducts its operations through two reportable segments:

• Consumer and Professional Products ("CPP") conducts its operations through AMES.

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

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

Defense Electronics, classified as a discontinued operation, conducts its operations through Telephonics Corporation ("Telephonics"), founded in 1933, a globally recognized leading provider of highly sophisticated intelligence, surveillance and communications solutions for defense, aerospace and commercial customers.

Reportable Segments:

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Over its long life, AMES has grown organically and through the acquisition of other leading and historic tool businesses such as True Temper, Union Tools, and Garant.

Today, AMES is the leading manufacturer of long-handled tools and landscaping products for homeowners and professionals in North America, and also provides these products in key global markets including Canada, Australia, New Zealand, the United Kingdom, and Ireland.

With the addition of ClosetMaid, AMES is also the leading provider of wood and wire closet organization, general living storage, and wire garage storage products in the United States.

AMES is also the leading provider of wood and wire closet organization, general living storage, and wire garage storage products in the United States through its ClosetMaid product line.

Since being acquired by Griffon in 2010, AMES has benefited from strategic acquisitions that have expanded its product portfolio and geographic presence.

The ClosetMaid, Southern Patio, and Harper Brush Works acquisitions added to AMES' product categories in North America to include storage and organization, decorative landscaping, and cleaning products.

The acquisitions of Northcote, Cyclone, Hills, and Tuscan Path in Australia established AMES as a leading supplier of tools and landscaping categories in the Australian market.

As a result of the acquisitions of Kelkay, La Hacienda and Apta, the United Kingdom and Ireland have become new key markets for AMES products.

The acquisitions of Northcote, Cyclone, Hills, Nylex Tuscan Path and Quatro in Australia established AMES as a leading supplier of tools and landscaping categories in the Australian market.

As a result of the acquisitions of Kelkay, La Hacienda and Apta, the U.K.

and Ireland have become key markets for AMES products.

AMES has approximately 3,800 employees worldwide.

AMES' brands are among the most recognized across its primary product categories in North America, Australia and the United Kingdom.

Its brand portfolio for long-handled tools , outdoor décor, and landscaping product includes AMES®, True Temper®, Garant®, Harper®, UnionTools®, Westmix™, Cyclone®, Southern Patio®, Northcote Pottery™, Nylex®, Hills®, Kelkay®, Tuscan Path®, La Hacienda®, Kelso™, Dynamic Design®™ and Apta®.

Its brand portfolio for long-handled tools, outdoor décor, and landscaping product includes AMES®, True Temper®, Garant®, Harper®, UnionTools®, Westmix™, Cyclone®, Southern Patio®, Northcote Pottery™, Nylex®, Hills®, Kelkay®, Tuscan Path®, La Hacienda®, Kelso™, Dynamic Design®™, Apta® and Quatro Design®.

Contractor-oriented tool brands include Razor-Back® Professional Tools and Jackson® Professional Tools.

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In addition, given the breadth of its brand portfolio and product category depth, AMES is able to offer specific, differentiated branding strategies for key retail customers.

These strategies have focused on enhancement of brand value, with the goal of de-commoditizing AMES products through the introduction of identity and functionality elements that will make each top brand unique, attractive and visually recognizable by the consumer.

The visual brand transformation of the AMES® and Razor-Back® brands was completed in 2015, and the True Temper® line roll-out was completed in 2016.

These strategies focus on enhancement of brand value, with the goal of de-commoditizing AMES products through identity and functionality elements that makes each top brand unique, attractive and visually recognizable by the consumer.

In addition to the brands listed, AMES also sells private label branded products, further differentiating AMES in its customer offerings.

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seasonal outdoor tools, project tools, outdoor décor and watering, home organization, and cleaning products.

As a result of brand portfolio recognition, high product quality, industry leading service and strong customer relationships, AMES has earned market-leading positions in its five core product categories.

As a result of brand portfolio recognition, outstanding product quality, industry leading service and strong customer relationships, AMES has earned market-leading positions in its five core product categories.

The following is a brief description of AMES' primary product lines:

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The products range in size, material (poly and steel), tray form, tire type, handle length and color based on the needs of homeowners, landscapers and contractors.

• Snow Tools:

A complete line of snow tools is marketed under the True Temper®, Garant® and Union Tools® brand names.

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These products are marketed under the True Temper®, Cyclone®, Garant®, Jackson® Professional Tools and Razor-Back® Professional Tools brand names.

• Hand Tools:

Hammers, screwdrivers, pliers, adjustable wrenches, handsaws, tape measures, levels, clamps, and other traditional hand tools make up this product line.

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• Planters and Lawn Accessories:

AMES is a designer, manufacturer and distributor of indoor and outdoor planters and accessories, sold under the Southern Patio®, Northcote Pottery™, Tuscan Path, La Hacienda®, Hills®, Kelkay® and Dynamic Design®™ brand names, as well as various private label brands.

AMES is a designer, manufacturer and distributor of indoor and outdoor planters and accessories, sold under the Southern Patio®, Northcote Pottery™, Tuscan Path, La Hacienda®, Hills®, Kelkay®, Quatro Design® and Dynamic Design®™ brand names, as well as various private label brands.

The range of planter sizes (from 6 to 32 inches) is available in various designs, colors and materials.

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• Cleaning Products :

AMES offers a full line of cleaning products for professional, home, and industrial use, including brooms, brushes, squeegees and other cleaning products, primarily under the Harper® brand.

AMES offers a complete line of cleaning products for professional, home, and industrial use, including brooms, brushes, squeegees and other cleaning products, primarily under the Harper® brand.

AMES sells products throughout North America, Australia, New Zealand and Europe through (1) home centers, such as The Home Depot, Inc.

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In Australia, a dedicated team of sales professionals is provided for the largest retail customer.

AMES also is making investments in automation, facilities expansion and fulfillment operations to support e-commerce growth.

Raw Materials and Suppliers

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in the long-handled and garden tool space, compete in various tool categories.

Suncast Corporation competes in the hose reel and accessory market, and more recently in the long-handled plastic snow shovel category and Swan Hose competes in the garden hose market.

Suncast Corporation competes in the hose reel and accessory market, and more recently in the long-handled plastic snow shovel category.

In addition, there is competition from imported or sourced products from China, India and other low-cost producing countries, particularly in long-handled tools, wheelbarrows, planters, striking tools and pruning tools.

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AMES' size, depth and breadth of product offering, category knowledge, research and development (“R&D”) investment, service and its ability to react to sudden changes in demand from seasonal weather patterns, especially during harsh winter months, are competitive advantages.

Offshore manufacturers lack sufficient product innovation, capacity, proximity to market and distribution capabilities to service large retailers or to compete in highly seasonal, weather related product categories.

Offshore manufacturers lack sufficient product innovation, capacity, proximity to market and distribution capabilities to service large retailers or to efficiently and effectively compete in highly seasonal, weather related product categories.

Manufacturing and Distribution

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Smaller distribution centers are also strategically located in the U.S.

in Ocala, Florida, Chino, California, Belle Vernon, Pennsylvania and Pharr, Texas, and internationally in Canada, Australia, the United Kingdom and Ireland.

in Ocala, Florida and Pharr, Texas, and internationally in Canada, Australia, the United Kingdom and Ireland.

HOME AND BUILDING PRODUCTS

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Sales into the home remodeling market are driven by the aging of the housing stock, existing home sales activity, and the trends of improving both home appearance and energy efficiency.

On June 4, 2018, Clopay acquired CornellCookson, a leading U.S.

manufacturer and marketer of rolling steel door and grille products designed for commercial, industrial, institutional and retail use, for $180,000, excluding certain post-closing adjustments.

After taking into account estimated tax benefits resulting from the transaction, the effective purchase price was $170,000, subject to certain adjustments.

CornellCookson was founded in 1828 as Cornell Iron Works and, in 2008, purchased the Cookson Company, which was founded in 1938, to form CornellCookson.

The acquisition of CornellCookson expands Clopay’s existing footprint in the commercial door market and strengthens relationships with professional dealers and installers.

Clopay had previously partnered with CornellCookson on customer solutions for over eight years.

Consolidating the companies allows Clopay to broaden its existing portfolio of brands, products and customers to serve the commercial market more efficiently with multiple types of doors, and creates additional opportunity to expand our position in adjacent markets.

Similar distribution and product composition between the businesses also allows for potential cost savings opportunities across distribution networks and through commodity purchasing.

Sales into the commercial market are driven by the aging of nonresidential buildings, including warehouses, institutional and industrial facilities, increased business activity, changes to building codes , security of facilities and trends of improving function and performance.

Clopay has approximately 2,900 employees.

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Clopay customers utilize a proprietary residential door web application, the MyDoor ® mobile enabled app, that guides consumers through an easy to use visualization and pricing program, allowing them to select the optimal door for their home.

For Clopay's commercial products, Clopay's Commercial Door Quoter (CDQ ®™ ) and CornellCookson's WebGen ™ systems are available to assist our professional dealers streamline their quoting and submittal process for greater productivity and backroom efficiency improvement.

Raw Materials and Suppliers

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On January 31, 2019, Clopay announced a $14,000 investment in facilities infrastructure and equipment at its rolling steel manufacturing location in Mountain Top, Pennsylvania.

This project includes a 95,000 square foot expansion to the already existing 184,000 square foot facility, along with the addition of state-of-the-art manufacturing equipment.

This project included a 95,000 square foot expansion to the already existing 184,000 square foot facility, along with the addition of state-of-the-art manufacturing equipment.

Through this expansion, the Mountain Top location improved its manufacturing efficiency and shipping operations, as well as increased manufacturing capacity to support full-rate production of new and core products.

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Clopay is currently the exclusive supplier of residential garage doors throughout North America to Home Depot and Menards.

Discontinued Operation:

DEFENSE ELECTRONICS

Defense Electronics consists of Telephonics Corporation ("Telephonics").

Founded in 1933, Telephonics is recognized globally as a leading provider of highly sophisticated intelligence, surveillance and communications solutions that are deployed across a wide range of land, sea and air applications.

On September 27, 2021, Griffon announced it is exploring strategic alternatives for its Defense Electronics segment, which consists of Telephonics Corporation ("Telephonics").

Accordingly, all references made to results and information in this Annual Report on Form 10-K are to Griffon's continuing operations unless noted otherwise.

Telephonics, founded in 1933, is recognized globally as a leading provider of highly sophisticated intelligence, surveillance and communications solutions that are deployed across a wide range of land, sea and air applications.

Telephonics designs, develops, manufactures and provides logistical support and lifecycle sustainment services to defense, aerospace and commercial customers worldwide.

In 2020, approximately 69% of the segment’s sales were to the U.S.

In 2021, approximately 69% of the DE sales were to the U.S.

Government and agencies thereof, as a prime or subcontractor, 26% to international customers and 5% to U.S.

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Telephonics is headquartered in Farmingdale, New York and currently has approximately 700 employees.

Defense budget for fiscal year (GFY) 2020 was enacted at $722 billion, a 1.3% increase over the prior year.

The Department of Defense ("DoD") budget request for fiscal year 2021 is in line with the prior year when excluding natural disaster relief emergency

funding enacted in 2020.

The 2021 budget request plans for the DoD budget to grow at a compound annual growth rate (“CAGR”) of 1.5% from 2020 through 2025 with continued investments expected in military readiness, modernization, and innovation.

Internationally, demand is growing due to major system capability upgrades in existing systems and re-capitalization of aging assets.

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Domestic and international defense market trends bode well for business opportunities for Telephonics products supporting Imaging and Surveillance Radar Systems, Communications, Surveillance and Border Surveillance.

Telephonics is organized into six primary business lines:

Radar, Naval & Cyber Systems, Surveillance, Communications, Systems Engineering and Analysis (SEG), and Telephonics Large Scale Integration (TLSI).

In July 2020, we announced that we are exploring strategic options for Telephonics’ SEG business line, which is approximately $30,000 in sales.

On December 18, 2020, Defense Electronics completed the sale of its SEG business for $15,000.

SEG provides sophisticated, highly technical engineering and analytical support to the Missile Defense Agency and various U.S.

military commands.

SEG had sales of approximately $7,000 for the first fiscal quarter ended December 31, 2020 and $31,000 for the fiscal year ended September 30, 2020.

DE recorded a pre-tax gain of $5,291 ($5,443, including a net tax benefit of $152) related to the divestiture of SEG.

Telephonics is organized into four primary business lines:

Radar Systems, Surveillance, Communications and Telephonics Large Scale Integration (TLSI).

Telephonics provides a wide range of high-performing, lightweight and cost-effective maritime surveillance and weather avoidance radar systems for fixed- and rotary-wing aircraft, Unmanned Aerial Vehicles (UAVs) and shipboard platforms to the U.S.

Government and numerous international defense agencies.

Telephonics maritime surveillance radars offer advanced features such as Ground Moving Target Indicator (GMTI), Synthetic Aperture Radar (SAR), Inverse Synthetic Aperture Radar (ISAR), Automatic Identification System (AIS) and weather avoidance.

Naval & Cyber Systems:

As a global leader for maritime surveillance radars, Telephonics is the sole provider of the US Navy’s AN/APS-153 multi-mode radar and the communications suite within the MH-60R/S multi-mission helicopters.

Telephonics is developing the next generation multi-mode maritime and over-land surveillance AESA radar known as MOSAIC ® .

Cyber Systems focuses on ISR aircraft integration design and services with a facility that includes a 7,000 square foot hanger and a Sensitive Compartmented Information Facility (SCIF) capable of supporting various customer and Government agencies programs.

Telephonics is also the sole provider of the US Navy’s AN/APS-153 multi-mode radar and the communications suite within the MH-60R/S multi-mission helicopters.

Our maritime surveillance radars offer advanced features such as Ground Moving Target Indicator (GMTI), Synthetic Aperture Radar (SAR), Inverse Synthetic Aperture Radar (ISAR), Automatic Identification System (AIS) and weather avoidance.

Telephonics is developing the next generation multi-mode maritime and over-land surveillance Active Electronically Scanned Array (AESA) radar known as MOSAIC.

• Surveillance:

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These systems are also sold to aerospace manufacturers, commercial airlines and audiometric original equipment manufacturers.

Systems Engineering and Analysis (SEG):

SEG provides sophisticated, highly technical engineering and analytic support to customers including the Missile Defense Agency, AEGIS Ballistic Missile Defense Program, Program Executive Offices for Integrated Warfare Systems and Ships, U.S.

Naval Surface Warfare Centers, Marine Corps System Command and the U.S.

Army Aviation and Missile Command, among others.

As a leading provider of combat, radar and missile systems engineering and analysis, SEG is a key source of systems engineering expertise for the U.S.

integrated air and missile defense initiatives.

In addition to government program offices, SEG works extensively with national laboratories, the Intelligence Community and prime contractors.

• Telephonics Large Scale Integration (TLSI):

TLSI has designed nearly 400 mixed-signal custom Application Specific Integrated Circuits (ASICs) for customers in the automotive, industrial, defense/avionics and smart energy markets.

TLSI works with its customers' technical teams, taking complete responsibility for the ASIC development process, from the

initial ASIC specification definition through qualification and volume production, to meet the most stringent customer program requirements.

TLSI works with its customers' technical teams, taking complete responsibility for the ASIC development process, from the initial ASIC specification definition through qualification and volume production, to meet the most stringent customer program requirements.

Over 10 million ASICs are shipped every year.

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government and its agencies, to meet the needs of international customers in both defense and commercial markets.

Telephonics' two largest product lines include maritime surveillance radar and aircraft intercommunication management systems and as Telephonics continues to concentrate on adjacent markets to grow these product lines both domestically and internationally, the company remains focused on delivering high-quality products and services that protect military personnel and civilian interests world-wide.

product lines both domestically and internationally, the company remains focused on delivering high-quality products and services that protect military personnel and civilian interests world-wide.

Telephonics’ leading-edge products and services are well-positioned to address the needs of a fully integrated and modernized battlefield with an emphasis on providing complete situational awareness to the warfighter whether on the ground, in the air or at sea, providing timely, secure and accurate intelligence.

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Programs and Products

Based on long-established relationships supported by existing contractual arrangements, Telephonics is a first-tier supplier to prime contractors in the defense industry such as Lockheed Martin Corporation ("Lockheed Martin", which includes Sikorsky Aircraft), The Boeing Company ("Boeing"), Northrop Grumman Corporation ("Northrop Grumman"), Oshkosh Corporation ("Oshkosh"), Airbus Military, Airbus Helicopters, Leonardo (AgustaWestland) Helicopters, and SAAB (with the average length of the relationship with these customers being greater than 20 years), and is a prime contractor to the U.S.

Based on long-established relationships supported by existing contractual arrangements, Telephonics is a first-tier supplier to prime contractors in the defense industry such as Lockheed Martin Corporation ("Lockheed Martin", which includes Sikorsky Aircraft), The Boeing Company ("Boeing"), Northrop Grumman Corporation ("Northrop Grumman"), Airbus Military, Airbus Helicopters, Leonardo (AgustaWestland) Helicopters, and SAAB (with the average length of the relationship with these customers being greater than 20 years), and is a prime contractor to the U.S.

Department of Defense and FAA.

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Telephonics believes that the technological capabilities these systems encompass will also be able to serve and protect the most complex borders.

The funded backlog for Telephonics approximated $380,000 at September 30, 2020 , compared to $389,300 at September 30, 2019 .

Approximately 67% of the current backlog is expected to be filled in the next 12 months.

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

The funded contract backlog for Telephonics was approximately $352,200 at September 30, 2021 with 62% expected to be fulfilled in the next 12 months;

backlog was $370,000 at September 30, 2020 (excludes approximately $10,000 of SEG related backlog).

Backlog is defined as unfilled firm orders for products and services for which funding has been both authorized and appropriated by the customer or U.S.

Congress, in the case of U.S.

Government agencies.

Backlog generally increases with bookings and converts into revenue as we incur costs related to contractual commitments or the shipment of product.

The decrease in backlog was primarily attributed to the timing of various international contract awards associated with radar and surveillance opportunities that were not received by the end of the reporting period.

and amounts of such awards, which are subject to numerous factors, including fiscal constraints placed on customer budgets;

The decrease in backlog was primarily attributed to the timing of various international and domestic contract awards with radar, surveillance and communications that were not received by the end of the reporting period.

Timing of Domestic awards were impacted by COVID driving significant remote work and inefficiency.

Given the nature of our business and a larger dependency on international customers, our bookings, and therefore our backlog, is impacted by the longer maturation cycles resulting in delays in the timing and amounts of such awards, which are subject to numerous factors, including fiscal constraints placed on customer budgets;

political uncertainty;

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and the timing of governmental approvals.

Government, through prime contractors like Lockheed Martin, Northrop Grumman, Boeing and Oshkosh, is a significant customer of Telephonics.

Government, through prime contractors like Lockheed Martin, Northrop Grumman, and Boeing, is a significant customer of Telephonics.

The loss of the U.S.

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Telephonics’ manufacturing facilities are located in the U.S., with significant facilities located in New York and North Carolina.

Clopay Plastic Products - Discontinued Operations

On February 6, 2018, we completed the sale of our Plastics business to Berry Global Group, Inc.

for approximately $465,000, net of certain post-closing adjustments.

As a result, Griffon classified the results of operations of the Plastics business as discontinued operations in the Consolidated Statements of Operations for all periods presented and classified the related assets and liabilities associated with the discontinued operations in the consolidated balance sheets.

All results and information presented exclude Plastics unless otherwise noted.

Plastics is a global leader in the development and production of embossed, laminated and printed specialty plastic films for hygienic, health-care and industrial products and sells to some of the world's largest consumer products companies.

See Note 7, Discontinued Operations.

Intellectual Property

In the government and defense business, formal intellectual property rights are of limited value.

Therefore, the Telephonics business tends to hold most of its important intellectual property as trade secrets, which it protects through the use of contract terms and carefully restricting access to its technology.

Telephonics, which sells directly and indirectly to the U.S.

Government, is subject to certain regulations, laws and standards set by the U.S.

Additionally, Telephonics is subject to routine audits and investigations by U.S.

Government Agencies such as the Defense Contract Audit Agency, the Defense Counterintelligence and Security Agency, with respect to its classified contracts, and other Inspectors General.

These agencies review a contractor’s performance under its contracts, cost structure and compliance with applicable laws, regulations and standards, including those relating to facility and personnel security clearances.

These agencies also review the adequacy of, and a contractor’s compliance with, its internal control systems and policies, including the contractor’s management, purchasing, property, estimating, compensation, and accounting and information systems.

Telephonics revenue is generally driven by the delivery requirements of its customers;

accordingly, Telephonics will often have increased revenue in the latter half of the year due to the U.S.

government's annual budget cycle.

Griffon Corporation

As of September 30, 2020, Griffon and its subsidiaries employ approximately 7,400 people located primarily throughout the U.S., Canada, the United Kingdom, Australia, Mexico and China.

As of September 30, 2021, Griffon and its subsidiaries employ approximately 6,700 employees, excluding approximately 700 employees related to Telephonics discontinued operation, located primarily throughout the U.S., Canada, the United Kingdom, Australia, Mexico and China.

Generally, the total number of employees of Griffon and its subsidiaries does not significantly fluctuate throughout the year.

However, acquisition activity or the opening of new branches or lines of business may increase the number of employees or fluctuations in the level of Griffon's business activity, which could in turn require staffing level adjustments in response to actual or anticipated customer demand.

Approximately 200 of these employees are covered by collective bargaining agreements in the U.S., with the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union (an affiliate of the American Federation of Labor and Congress of Industrial Organizations), and the United Food & Commercial Workers International Union.

Approximately 300 of these employees, excluding approximately 60 employees employed by Telephonics, are covered by collective bargaining agreements in the U.S., with the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union (an affiliate of the American Federation of Labor and Congress of Industrial Organizations), and the United Food & Commercial Workers International Union.

Additionally, approximately 200 employees in Canada are represented by the Trade Union Advisory Committee.

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staggered shifts and start, stop and break times;

and at many facilities we began monitoring temperatures of all employees entering the facility.

and at many facilities we began monitoring

temperatures of all employees entering the facility.

We also restricted visitors and pre-screened all contractors who required access to our facilities.

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employees who continued to work onsite during the pandemic.

Throughout the pandemic, we have consistently been able to meet our customers’ demands for our products, while at the same time making the necessary investments to ensure that we prioritize the health, safety and welfare of our employees.

We have continuously reviewed, upgraded and improved these procedures and policies as circumstances have required.

Throughout the pandemic nearly all our facilities around the globe have remained open and we have made every effort to meet our customers’ demands for our products, while at the same time making the necessary investments to ensure that we prioritize the health, safety and welfare of our employees.

Griffon’s operations are subject to various environmental, health, and employee safety laws and regulations.

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Nevertheless, Griffon cannot guarantee that, in the future, it will not incur additional costs for compliance or that such costs will not be material.

Telephonics, which sells directly and indirectly to the U.S.

government, is subject to certain regulations, laws and standards set by the U.S.

Additionally, Telephonics is subject to routine audits and investigations by U.S.

Government Agencies such as the Defense Contract Audit Agency, the Defense Security Service, with respect to its classified contracts, and other Inspectors General.

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

Government and its agencies, through prime and subcontractor relationships, represented 10% of Griffon’s consolidated revenue and 69% of DE revenue.

Home Depot represented 17% of Griffon’s consolidated revenue, 27% of CPP's revenue and 12% of HBP's revenue.

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

In 2021, Home Depot represented 19% of Griffon’s consolidated revenue, 26% of CPP's revenue and 10% of HBP's revenue.

No other customer accounted for 10% or more of consolidated revenue.

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In 2021, 53% of AMES' sales occurred during the second and third quarters compared to 53% and 56% in 2020 and 2019, respectively.

In 2020, as a result of the COVID-19 pandemic, sales orders shifted somewhat into the third and fourth quarters resulting in revenue increasing in these two quarters to 55% of 2020 sales.

In 2021 and 2020, as a result of the COVID-19 pandemic, sales orders shifted somewhat into the third and fourth quarters resulting in revenue increasing in these two quarters to 55% in each of 2021 and 2020 sales.

Clopay’s business is driven by renovation and construction during warm weather, which is generally at reduced levels during the winter months, generally in our second quarter.

Telephonics revenue is generally driven by the delivery requirements of its customers;

accordingly, Telephonics will often have increased revenue in the latter half of the year due to the U.S.

government's annual budget cycle.

Demand for lawn and garden products is influenced by weather, particularly weekend weather during peak gardening season.

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Griffon’s non-U.S.

businesses are primarily in Canada, Australia, the United Kingdom, Mexico and China.

businesses are primarily in Canada, Australia, the U.K., Mexico and China.

Research and Development

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and the Cornell®, Cookson®, and CornellCookson® commercial door brands.

Principal global and regional trademarks used by AMES for its tool and landscape products include AMES®, True Temper®, Garant®, Harper®, UnionTools®, Westmix™, Cyclone®, Southern Patio®, Northcote Pottery™, Nylex®, Hills®, Kelkay®, Tuscan Path®, La Hacienda®, Kelso™, and Dynamic Design®, as well as contractor-oriented brands including Razor-Back® Professional Tools and Jackson® Professional Tools.

Principal global and regional trademarks used by AMES for its tool and landscape products include AMES®, True Temper®, Garant®, Harper®, UnionTools®, Westmix™, Cyclone®, Southern Patio®, Northcote Pottery™, Nylex®, Hills®, Kelkay®, Tuscan Path®, La Hacienda®, Kelso™, Apta®, and Dynamic Design®, as well as contractor-oriented brands including Razor-Back® Professional Tools and Jackson® Professional Tools.

Storage and home organization brands within AMES include ClosetMaid®, MasterSuite®, Suite Symphony®, Cubeicals®, ExpressShelf®, SpaceCreations®, Maximum Load®, SuperSlide® and ShelfTrack®.

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Griffon's patents are in various stages of their terms of validity.

In the government and defense business, formal intellectual property rights are of limited value.

Environmental, Social and Governance

Griffon and its operating companies have taken into account environmental, social and governance (ESG) considerations in the management of our businesses for years.

This year, Griffon formalized its ESG commitment with a written policy, committing the Company to protecting the environment and our workers, and to ethical and transparent behavior in our business relationships.

This policy can be found on the Griffon website at www.griffon.com .

The new ESG section of our website also provides details on some of the Company’s efforts and commitments in the environmental, social and governance areas as well as a statement from Ronald J.

This year, Griffon formalized its ESG commitment by subscribing to the United Nations Global Compact (UNGC) and reinforcing its commitment to protecting the environment and our workers, and to ethical and transparent behavior in our business relationships.

The Griffon ESG policy can be found on the Griffon website at www.griffon.com.

The ESG section of our website also provides details on some of the Company’s efforts and commitments in the environmental, social and governance areas as well as a statement from Ronald J.

Kramer, our Chief Executive Officer, reinforcing management’s strong support for our ESG efforts.

As part of its commitment to the Sustainable Development Goals contained in the UNGC, Griffon will periodically communicate the status of its ESG goals, starting with the publication of its inaugural FY21 ESG Report.

The fiscal 2021 ESG Report will discuss community involvement, charitable giving, employee safety, employee education and welfare, energy consumption, water consumption, waste generated, recycled raw materials, and packaging initiatives.

During fiscal 2021, Griffon began gathering ESG metrics in each of these areas.

The fiscal 2021 ESG Report will be benchmarked against the UNGC Sustainable Development Goals and the Sustainability Accounting Standards Board Standards applicable to Griffon’s businesses.

We are preparing to set ESG goals based on the metrics gathered in fiscal 2021 and will begin announcing these goals in fiscal 2022.

Griffon has assessed the environmental risk from its operations and has focused its efforts to date on areas with the potential to have the greatest environmental impact.

The company sources sustainable hardwoods for its various wood products.

Where available, we use recycled materials to construct our products, and we continuously improve our packaging to reduce both volume and environmental impact.

For example, bags used for AMES’ Kelkay aggregate products in the UK are made from plant-based materials, and not from petroleum.

Seventy percent of the steel used in Clopay garage doors is recycled steel.

AMES is a member of the Appalachian Hardwood Manufacturers Association, which provides sustainable hardwoods for AMES tools, and is committed to purchasing hardwoods through the Sustainable Forestry Initiative.

Griffon has made a focused effort to reduce carbon emissions by reducing electricity and natural gas usage at its operating facilities.

Further efforts to reduce our carbon footprint are underway by considering fuel consumption in the planning of our deliveries and the selection of delivery contractors and vehicles.

Our Clopay business helps its customers reduce their own carbon footprints by providing garage doors that meet LEED (Leadership in Energy and Environmental Design) building construction standards.

Our Clopay business also helps its customers reduce their own carbon footprints by providing garage doors that meet LEED (Leadership in Energy and Environmental Design) building construction standards.

While Griffon’s facilities are not large consumers of water, we routinely examine options to reduce water usage or reuse water at our facilities.

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Over the years, Griffon operating companies have reduced the use of solvents and other chemicals and now rarely generate hazardous waste of any kind.

Our operating companies are involved in the local communities in which they operate, where we have chosen to expand production facilities rather than outsource production.

We are involved in more than 100 charitable and community organizations, including well known national concerns such as Habitat for Humanity, Boys and Girls Clubs and the American Cancer Society, as well as local groups such as garden clubs.

Our operating companies are involved in the local communities in which they operate, where we have chosen to expand United States based production facilities rather than outsource production.

We are involved in more than 100 charitable and community organizations, including well known national concerns such as Habitat for Humanity, Boys and Girls Clubs, the Home Depot Foundation (Diamond Sponsor) and the American Cancer Society, as well as local groups such as garden clubs.

For example, employees at our Telephonics subsidiary established and maintained a produce garden, donating all of the food grown to local food pantries.

Employees at our Clopay subsidiary built a new home for Habitat for Humanity, and our AMES subsidiary contributed tools and products to that effort.

Our communities know that they can count on us in a crisis.

For example, we routinely provide products and labor, as well as donations, to crisis relief organizations to help with relief efforts such as the camp fire effort in California;

tornado relief in Dayton Ohio;

and Hurricane Sandy relief in the New York metropolitan area;

and we have participated in tool bank disaster services and donated regularly to the American Red Cross.

We manufacture products that save lives, including

our radars supporting U.S.

Coast Guard search and rescue efforts, elevator fire prevention products from Clopay, and dock door barriers that prevent injuries relating to loading dock operation.

With respect to the COVID-19 pandemic, we are proud of our efforts to keep our facilities safe, which started very early in the crisis and have been continuously reviewed, upgraded and improved, and have allowed nearly all of our facilities around the globe to stay open and continue to serve our customers, uninterrupted.

Over the last three years, we have invested nearly four million dollars in capital improvements relating to employee safety and health.

These improvements include major upgrades to our loading and unloading operations (which had been the source of a significant portion of our worker injuries), ergonomic improvements, machine guarding and elimination of certain high-risk repetitive jobs.

The COVID-19 pandemic presented unprecedented challenges in many parts of our businesses and operations, including with respect to our most valuable asset - our people.

In response, we developed and implemented new procedures and protocols to minimize the risk to the health and safety of our employees while allowing us to continue to operate our facilities and provide high quality products to our customers on a timely basis.

Employees that could work from home were strongly encouraged (and in some cases, required) to do so in order to minimize the number of employees in our facilities.

For onsite employees, we implemented protocols for social distancing, sanitation and mask-wearing.

We developed systems and purchased new equipment to facilitate the efficient sanitation and disinfection of all work areas.

We reconfigured work processes to allow additional spacing between associates whenever possible;

eliminated seating in common areas of many buildings to allow for appropriate distancing;

staggered shifts and start, stop and break times;

and at many facilities we began monitoring temperatures of all employees entering the facility.

We also restricted visitors and pre-screened all contractors who required access to our facilities.

We implemented appreciation award programs for many of our U.S.

employees who continued to work onsite during the pandemic.

We have continuously reviewed, upgraded and improved these procedures and policies as circumstances have required.

Over the last three years, we have invested millions of dollars in capital improvements relating to energy consumption and to employee safety and health.

These improvements include lighting energy efficiency projects saving in excess of 1.5 million kilowatt-hours, major upgrades to our loading and unloading operations (which had been the source of a significant portion of our worker injuries), ergonomic improvements, machine guarding and elimination of certain high-risk repetitive jobs through use of robotics.

Griffon has also invested significant time and capital reducing ergonomic injuries through better work positioning and lifting improvements.

We have seen significant reductions in both the number and severity of employee injuries in recent years.

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Through our Employee Stock Ownership Plan, our U.S.

employees own approximately eleven percent of Griffon stock.

employees own approximately nine percent of Griffon stock.

Our businesses engage in a variety of outreach programs in the various communities in which we operate to recruit new employees at all levels.

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We also have a variety of onboarding programs, onsite job training programs, leadership development programs, and tuition reimbursement and education assistance policies to further the development and advancement of our employees.

Our operating companies use on-site inspections and specific contractual terms to manage our supply chain operations to require compliance with environmental and social laws and regulations, as well as our policies in these areas, including with respect to human rights, child labor, slave labor and unsafe working conditions.

In all of our geographies, we use on-site inspections and specific contractual terms to manage our supply chains to ensure compliance with environmental and social laws and regulations, as well as our policies in these areas, including with respect to human rights, child labor, slave labor and unsafe working conditions.

Telephonics requires that its subcontractors and suppliers periodically certify adherence to various Telephonics’ policies, such as those relating to human trafficking, corporate ethics and the prohibition of gratuities.

All significant Ames suppliers must periodically submit to a Factory Compliance and Capacity Assessment, which evaluates not only quality control and vendor capabilities, but assesses to what extent each supplier places an emphasis on environmental, labor and social considerations in the operation of its business.

All significant AMES suppliers worldwide must periodically submit to a Factory Compliance and Capacity Assessment, which evaluates not only quality control and vendor capabilities, but assesses to what extent each supplier emphasizes environmental, labor and social considerations in the operation of its business.

These activities have continued despite the travel difficulties caused by COVID.

In China, where AMES both operates a manufacturing facility and sources materials and products from third parties, AMES has dedicated compliance personnel who report directly into AMES’ Vice President and General Counsel.

Honesty, transparency, and ethical practices have been ordinary course at Griffon for years, and we continue to review and upgrade our programs in these areas.

Our Code of Business Ethics and Conduct, to which every employee certifies annually, requires that each and every employee conduct business to the highest ethical standards.

Honesty, transparency, and ethical practices have been ordinary course at Griffon for decades, and we continue to review and upgrade our programs in these areas.

Our Code of Business Ethics and Conduct ("Code"), to which every employee certifies annually, requires that each and every employee conduct business to the highest ethical standards.

Any acts of bribery are strictly prohibited, as is human trafficking and activities supporting human trafficking, such as the use of conflicts minerals.

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Our Corporate Governance Guidelines are published on our website.

While the guidelines require that a majority of directors be independent, currently all of our directors our independent except our CEO and our President (constituting over 85% of our directors).

While the guidelines require that a majority of directors be independent, currently all of our directors are independent except our CEO and our President (constituting over 85% of our directors).

Griffon has appointed a lead independent director and has four principal board committees - Audit, Compensation, Nominating and Corporate Governance, and Finance - each of which has its responsibilities set forth in a charter available on the Griffon website.

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The following is a current list of Griffon’s executive officers:

Positions Held and Prior Business Experience

Chief Executive Officer since April 2008, Chairman of the Board since January 2018, Director since 1993, Vice Chairman of the Board from November 2003 to January 2018.

Name Age Positions Held and Prior Business Experience

Kramer 63 Chief Executive Officer since April 2008, Chairman of the Board since January 2018, Director since 1993, Vice Chairman of the Board from November 2003 to January 2018.

From 2002 through March 2008, President and a Director of Wynn Resorts, Ltd.

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From 1999 to 2001, Managing Director at Dresdner Kleinwort Wasserstein, an investment banking firm, and its predecessor Wasserstein Perella & Co.

Member of the board of directors of Business Development Corporation of America.

Director since May 2018, President and Chief Operating Officer since December 2012.

Member of the board of directors of Business Development Corporation of America and Franklin BSP Capital Corporation.

Mehmel 59 Director since May 2018, President and Chief Operating Officer since December 2012.

From August 2008 to October 2012, President and Chief Operating Officer of DRS Technologies (Formerly NYSE:DRS) ("DRS"), a supplier of integrated products, services and support to military forces, intelligence agencies and prime contractors worldwide.

From May 2006 to August 2008, Executive Vice President and Chief Operating Officer of DRS and from January 2001 to May 2006, Executive Vice President, Business Operations and Strategy, of DRS.

Senior Vice President and Chief Financial Officer since August 2015.

Harris 52 Senior Vice President and Chief Financial Officer since August 2015.

From November 2012 to July 2015, Vice President and Controller of Griffon.

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(NYSE:JW.A) and Arthur Andersen, LLP.

Senior Vice President, General Counsel and Secretary since May 2010.

Kaplan 52 Senior Vice President, General Counsel and Secretary since May 2010.

From July 2008 to May 2010, Assistant General Counsel and Assistant Secretary at Hexcel Corporation (NYSE:HXL), a manufacturer of advanced composite materials for space and defense, commercial aerospace and wind energy applications.

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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-K

Item 1. Business