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Item 1. Financial Statements

2024-05-08 compared with 2024-02-07 · 297 added, 172 removed, 662 unchanged (41% of the section changed)

39 unchanged sentences

CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY

For the Three Months Ended December 31, 2023 and 2022

For the Three and Six Months Ended March 31, 2024 and 2023

COMMON STOCK CAPITAL IN

15 unchanged sentences

Balance at December 31, 2023 84,746 $ 21,187 $ 665,875 $ 315,868 33,359 $ ( 656,450 ) $ ( 59,535 ) $ ( 1,923 ) $ 285,022

Net income — — — 64,143 — — — — 64,143

Dividend — — — ( 7,289 ) — — — — ( 7,289 )

Shares withheld on employee taxes on vested equity awards — — — — 375 ( 22,722 ) — — ( 22,722 )

Amortization of deferred compensation — — — — — — — 586 586

Common stock acquired — — — — 1,803 ( 118,964 ) — — ( 118,964 )

Equity awards granted, net — — ( 9,492 ) — ( 428 ) 9,492 — — —

ESOP allocation of common stock — — 2,484 — — — — — 2,484

Stock-based compensation — — 3,849 — — — — — 3,849

SEC filing fees — — ( 27 ) — — — — — ( 27 )

Other comprehensive loss, net of tax — — — — — — ( 4,896 ) — ( 4,896 )

Balance at March 31, 2024 84,746 $ 21,187 $ 662,689 $ 372,722 35,109 $ ( 788,644 ) $ ( 64,431 ) $ ( 1,337 ) $ 202,186

COMMON STOCK CAPITAL IN

14 unchanged sentences

Balance at December 31, 2022 84,746 $ 21,187 $ 627,565 $ 386,617 27,560 $ ( 425,768 ) $ ( 70,519 ) $ ( 12,234 ) $ 526,848

Net loss — — — ( 62,255 ) — — — — ( 62,255 )

Dividend — — — ( 5,714 ) — — — — ( 5,714 )

Shares withheld on employee taxes on vested equity awards — — — — 21 ( 254 ) — — ( 254 )

Amortization of deferred compensation — — — — — — — 570 570

Equity awards granted, net — — ( 617 ) — ( 40 ) 617 — — —

ESOP allocation of common stock — — 1,207 — — — — — 1,207

Stock-based compensation — — 5,296 — — — — — 5,296

Other comprehensive income, net of tax — — — — — — 2,613 — 2,613

Balance at March 31, 2023 84,746 $ 21,187 $ 633,451 $ 318,648 27,541 $ ( 425,405 ) $ ( 67,906 ) $ ( 11,664 ) $ 468,311

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

2 unchanged sentences

(in thousands, except per share data)

Three Months Ended December 31,

Three Months Ended March 31, Six Months Ended March 31,

2024 2023 2024 2023

Revenue $ 672,880 $ 710,984 $ 1,316,033 $ 1,360,368

2 unchanged sentences

Selling, general and administrative expenses 157,217 160,301 310,020 313,021

Income from operations 83,838 81,105

Intangible asset impairment — 100,000 — 100,000

Total operating expenses 157,217 260,301 310,020 413,021

Income (loss) from operations 113,448 ( 65,809 ) 197,286 15,296

Other income (expense)

4 unchanged sentences

Total other expense, net ( 24,875 ) ( 24,350 ) ( 48,571 ) ( 37,435 )

Income before taxes 60,142 68,020

Provision for income taxes 17,965 19,318

Net income $ 42,177 $ 48,702

Basic earnings per common share $ 0.86 $ 0.93

Income (loss) before taxes 88,573 ( 90,159 ) 148,715 ( 22,139 )

Provision (benefit) for income taxes 24,430 ( 27,904 ) 42,395 ( 8,586 )

Net income (loss) $ 64,143 $ ( 62,255 ) $ 106,320 $ ( 13,553 )

Basic earnings (loss) per common share $ 1.34 $ ( 1.17 ) $ 2.20 $ ( 0.26 )

Basic weighted-average shares outstanding 47,946 53,038 48,365 52,809

Diluted earnings per common share $ 0.82 $ 0.88

Diluted earnings (loss) per common share $ 1.28 $ ( 1.17 ) $ 2.10 $ ( 0.26 )

Diluted weighted-average shares outstanding 49,931 53,038 50,714 52,809

Dividends paid per common share $ 0.15 $ 0.10 $ 0.30 $ 0.20

Net income $ 42,177 $ 48,702

Net income (loss) $ 64,143 $ ( 62,255 ) $ 106,320 $ ( 13,553 )

Other comprehensive income (loss), net of taxes:

2 unchanged sentences

Change in cash flow hedges 1,772 1,533 1,477 953

Total other comprehensive income, net of taxes 10,475 12,219

Comprehensive income, net $ 52,652 $ 60,921

Total other comprehensive income (loss), net of taxes ( 4,896 ) 2,613 5,579 14,832

Comprehensive income (loss), net $ 59,247 $ ( 59,642 ) $ 111,899 $ 1,279

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

2 unchanged sentences

(in thousands)

Three Months Ended December 31,

Six Months Ended March 31,

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income $ 42,177 $ 48,702

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

Net income (loss) $ 106,320 $ ( 13,553 )

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Depreciation and amortization 29,903 34,367

Stock-based compensation 12,674 13,335

Intangible asset impairments — 100,000

Asset impairment charges - restructuring 8,482 59,118

1 unchanged sentence

Amortization of debt discounts and issuance costs 2,113 2,045

Deferred income tax provision (benefit) — ( 25,744 )

Gain on sale of assets and investments ( 1,075 ) ( 10,852 )

Change in assets and liabilities:

Decrease in accounts receivable 14,491 13,689

Increase in accounts receivable ( 33,503 ) ( 19,431 )

Decrease in inventories 56,250 64,582

7 unchanged sentences

Proceeds from the sale of property, plant and equipment 1,272 11,834

Net cash provided by (used in) investing activities ( 13,543 ) 4,521

Net cash used in investing activities ( 32,017 ) ( 2,571 )

CASH FLOWS FROM FINANCING ACTIVITIES:

3 unchanged sentences

Payments of long-term debt ( 67,184 ) ( 119,110 )

Financing costs ( 114 ) ( 744 )

Other, net ( 262 ) ( 127 )

4 unchanged sentences

(in thousands)

Three Months Ended December 31,

Six Months Ended March 31,

CASH FLOWS FROM DISCONTINUED OPERATIONS:

38 unchanged sentences

Intercompany accounts and transactions have been eliminated in consolidation.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting periods.

Certain amounts in prior years may have been reclassified to conform to the current year presentation.

The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting periods.

These estimates may be adjusted due to changes in economic, industry or customer financial conditions, as well as changes in technology or demand.

Significant estimates include expected loss allowances for credit losses and returns, net realizable value of inventories, restructuring reserves, valuation of goodwill and intangible assets, assumptions associated with pension benefit obligations and income or expenses, useful lives associated with depreciation and amortization

GRIFFON CORPORATION AND SUBSIDIARIES

1 unchanged sentence

(US dollars and non US currencies in thousands, except per share data)

of intangible and fixed assets, warranty reserves, sales incentive accruals, assumption associated with stock based compensation valuation, income taxes and tax valuation reserves, environmental reserves, legal reserves, insurance reserves, the valuation of assets and liabilities of discontinued operations, assumptions associated with valuation of acquired assets and assumed liabilities of acquired companies and the accompanying disclosures.

expenses, useful lives associated with depreciation and amortization of intangible and fixed assets, warranty reserves, sales incentive accruals, assumption associated with stock based compensation valuation, income taxes and tax valuation reserves, environmental reserves, legal reserves, insurance reserves, the valuation of assets and liabilities of discontinued operations and the accompanying disclosures.

These estimates are based on management’s best knowledge of current events and actions Griffon may undertake in the future.

8 unchanged sentences

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

On December 31, 2023, the fair values of Griffon’s 2028 senior notes and Term Loan B facility approximated $ 945,532 and $ 462,153 , respectively.

On March 31, 2024, the fair values of Griffon’s 2028 Senior Notes and Term Loan B facility approximated $ 950,406 and $ 459,574 , respectively.

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

Insurance contracts with values of $ 3,711 at December 31, 2023 are measured and recorded at fair value based upon quoted prices in active markets for similar assets (level 2 inputs) and are included in Prepaid and other current assets and $ 634 is included in other assets on the Consolidated Balance Sheets.

Insurance contracts with values of $ 4,671 at March 31, 2024 are measured and recorded at fair value based upon quoted prices in active markets for similar assets (level 2 inputs) and are included in Prepaid and other current assets and $ 634 is included in other assets on the Consolidated Balance Sheets.

Items Measured at Fair Value on a Recurring Basis

1 unchanged sentence

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

As of December 31, 2023, Griffon entered into several such contracts in order to lock into a foreign currency rate for planned settlements of trade liabilities payable in U.S.

At December 31, 2023, Griffon had $ 61,000 of Australian dollar contracts at a weighted average rate of $ 1.50 which qualified for hedge accounting (level 2 inputs).

As of March 31, 2024, Griffon entered into several such contracts in order to lock into a foreign currency rate for planned settlements of trade liabilities payable in U.S.

At March 31, 2024, Griffon had $ 38,500 of Australian dollar contracts at a weighted average rate of $ 1.48 which qualified for hedge accounting (level 2 inputs).

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

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

AOCI included deferred losses of $ 1,425 ($ 997 , net of tax) at December 31, 2023.

Upon settlement, gains of $ 525 were recorded in COGS during the three months ended December 31, 2023.

AOCI included deferred gains of $ 1,388 ($ 972 , net of tax) at March 31, 2024.

Upon settlement, losses of $ 215 and gains of $ 310 were recorded in COGS during the three months and six months ended March 31, 2024.

All contracts expire in 30 to 150 days.

At December 31, 2023, Griffon had $ 44,000 of Chinese Yuan contracts at a weighted average rate of $ 7.02 which qualified for hedge accounting (level 2 inputs).

These hedges were all deemed effective as cash flow hedges with gains and losses related to

At March 31, 2024, Griffon had $ 49,500 of Chinese Yuan contracts at a weighted average rate of $ 6.93 which qualified for hedge accounting (level 2 inputs).

These hedges were all deemed effective as cash flow hedges with gains and losses related to changes in fair value deferred and recorded in AOCI and Prepaid and other current assets, or Accrued liabilities, until

GRIFFON CORPORATION AND SUBSIDIARIES

1 unchanged sentence

(US dollars and non US currencies in thousands, except per share data)

changes in fair value deferred and recorded in AOCI and Prepaid and other current assets, or Accrued liabilities, until settlement.

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

AOCI included deferred losses of $ 307 ($ 224 , net of tax) at December 31, 2023.

Upon settlement, losses of $ 636 were recorded in COGS during the three months ended December 31, 2023.

AOCI included deferred losses of $ 925 ($ 675 , net of tax) at March 31, 2024.

Upon settlement, losses of $ 564 and $ 1,200 were recorded in COGS during the three months and six months ended March 31, 2024.

All contracts expire in 3 to 365 days.

At December 31, 2023, Griffon had $ 6,580 of Canadian dollar contracts at a weighted average rate of $ 1.35 .

At March 31, 2024, Griffon had $ 8,130 of Canadian dollar contracts at a weighted average rate of $ 1.35 .

The contracts, which protect Canadian operations from currency fluctuations for U.S.

dollar based purchases, do not qualify for hedge accounting.

For the three months ended December 31, 2023, fair value losses of $ 103 were recorded to Other liabilities and to Other income for the outstanding contracts, based on similar contract values (level 2 inputs).

Realized gains of $ 24 were recorded in Other income during the three months ended December 31, 2023 for all settled contracts.

For the three and six months ended March 31, 2024, fair value gains (losses) of $ 38 and $( 65 ), respectively, were recorded to Other liabilities and to Other income for the outstanding contracts, based on similar contract values (level 2 inputs).

Realized gains of $ 2 and $ 26 were recorded in Other income during the three months and six months ended March 31, 2024 for all settled contracts.

All contracts expire in 30 to 509 days.

11 unchanged sentences

The following table details the components of inventory:

At December 31, 2023 At September 30, 2023

At March 31, 2024 At September 30, 2023

Raw materials and supplies $ 92,740 $ 127,342

2 unchanged sentences

Total $ 443,970 $ 507,130

In connection with the Company's restructuring activities described in Note 16, Restructuring Charges, during the quarter ended December 31, 2023, CPP recorded an inventory impairment charge of $ 8,482 to adjust to net realizable value.

In connection with the Company's restructuring activities described in Note 16, Restructuring Charges, during the six months ended March 31, 2024, CPP recorded an impairment charge of $ 8,482 to adjust inventory to its net realizable value.

GRIFFON CORPORATION AND SUBSIDIARIES

3 unchanged sentences

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

At December 31, 2023 At September 30, 2023

At March 31, 2024 At September 30, 2023

Land, building and building improvements $ 140,457 $ 169,923

4 unchanged sentences

Total $ 267,337 $ 279,218

Depreciation expense for property, plant and equipment was $ 9,267 and $ 11,489 for the quarters ended December 31, 2023 and 2022, respectively.

Depreciation included in Selling, general and administrative ("SG&A") expenses was $ 3,999 and $ 4,239 for the quarters ended December 31, 2023 and 2022, respectively.

Depreciation and amortization expense for property, plant and equipment was $ 9,499 and $ 11,601 for the quarters ended March 31, 2024 and 2023, respectively, and $ 18,766 and $ 23,090 for the six months ended March 31, 2024 and 2023, respectively.

Depreciation included in Selling, general and administrative ("SG&A") expenses was $ 4,095 and $ 4,646 for the quarters ended March 31, 2024 and 2023, respectively, and $ 8,094 and $ 8,885 for the six months ended March 31, 2024 and 2023, respectively.

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

In connection with the expansion of CPP's global sourcing strategy announced on May 3, 2023, certain owned manufacturing locations which ceased operations have met the criteria to be classified as held for sale as of December 31, 2023.

The net book value of these properties as of December 31, 2023 totaled $ 15,010 .

Except as described in Note 16, Restructuring Charges, no event or indicator of impairment occurred during the three months ended December 31, 2023 which would require additional impairment testing of property, plant and equipment.

The net book value of these properties as of March 31, 2024 totaled $ 24,172 .

Except as described in Note 16, Restructuring charges, no event or indicator of impairment occurred during the six months ended March 31, 2024 which would require additional impairment testing of property, plant and equipment.

NOTE 6 – CREDIT LOSSES

9 unchanged sentences

Based on a review of the Company's policies and procedures across all segments, including the aging of its trade receivables, recent write-off history and other factors related to future macroeconomic conditions, Griffon determined that its method to determine credit losses and the amount of its allowances for bad debts is in accordance with the accounting guidance for credit losses on financial instruments, including trade receivables, in all material respects.

The following table provides a roll-forward of the allowance for credit losses that is deducted from the amortized cost basis of accounts receivable to present the net amount expected to be collected:

The following table provides a roll-forward of the allowance for doubtful accounts, including provisions for expected credit losses that is deducted from gross accounts receivable to present the net amount expected to be collected:

GRIFFON CORPORATION AND SUBSIDIARIES

1 unchanged sentence

(US dollars and non US currencies in thousands, except per share data)

Three months ended December 31,

Six months ended March 31,

Beginning Balance, October 1 $ 11,264 $ 12,137

2 unchanged sentences

Other, primarily foreign currency translation 35 ( 554 )

Ending Balance, December 31 $ 11,985 $ 13,636

Ending Balance, March 31 $ 11,567 $ 13,255

NOTE 7 – GOODWILL AND OTHER INTANGIBLES

Indicators of impairment were not present for any of Griffon's reporting units during the three months ended December 31, 2023.

The following table provides a summary of the carrying value of goodwill by segment as of September 30, 2023 and December 31, 2023, as follows:

Consumer and Professional Products $ 136,611

Indicators of impairment were not present for any of Griffon's reporting units during the six months ended March 31, 2024.

The following table provides a summary of the carrying value of goodwill by segment as of September 30, 2023 and March 31, 2024, as follows:

Home and Building Products $ 191,253

Consumer and Professional Products 136,611

Total $ 327,864

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

At December 31, 2023 At September 30, 2023

At March 31, 2024 At September 30, 2023

Gross Carrying Amount Accumulated

7 unchanged sentences

The gross carrying amount of intangible assets was impacted by $ 1,589 related to favorable foreign currency translation.

Amortization expense for intangible assets was $ 5,556 and $ 5,624 for the quarters ended December 31, 2023 and 2022, respectively.

Amortization expense for intangible assets was $ 5,581 and $ 5,653 for the quarters ended March 31, 2024 and 2023, respectively, and $ 11,137 and $ 11,277 for the six months ended March 31, 2024 and 2023, respectively.

Amortization expense for the remainder of 2024 and the next five fiscal years and thereafter, based on current intangible balances and classifications, is estimated as follows:

10 unchanged sentences

NOTE 8 – INCOME TAXES

During the quarter ended December 31, 2023, the Company recognized a tax provision of $ 17,965 on income before taxes of $ 60,142 , compared to $ 19,318 on income before taxes of $ 68,020 in the prior year quarter.

The current year quarter results included strategic review costs - retention and other of $ 4,658 ($ 3,500 , net of tax), restructuring charges of $ 12,400 ($ 9,213 , net of tax), gain on sale of building of $ 547 ($ 406 , net of tax);

and discrete and certain other tax provisions, net, that affect comparability of $ 783 .

During the quarter ended March 31, 2024, the Company recognized a tax provision of $ 24,430 on income before taxes of $ 88,573 , compared to a tax benefit of $ 27,904 on a loss before taxes of $ 90,159 in the prior year quarter.

The current year quarter results included strategic review costs - retention and other of $ 2,676 ($ 1,997 , net of tax);

restructuring charges of $ 2,401 ($ 1,769 , net of tax);

gain on sale of building of $ 11 ($ 9 , net of tax);

and discrete and certain other tax benefits, net, that affect comparability of $ 390 .

The prior year quarter results included strategic review - retention and other of $ 6,190 ($ 4,658 , net of tax);

proxy costs of $ 1,503 ($ 1,153 , net of tax);

gain on the sale of building $ 10,852 ($ 8,323 , net of tax);

restructuring charges of $ 78,334 ($ 58,529 , net of tax);

intangible asset impairment charges of $ 100,000 ($ 74,256 , net of tax);

proxy expenses of $ 614 ($ 471 , net of tax);

and discrete and certain other tax benefits, net, that affect comparability of $ 8,723 .

Excluding these items, the effective tax rates for the quarters ended December 31, 2023 and 2022 were 27.9 % and 29.1 %, respectively.

Excluding these items, the effective tax rates for the quarters ended March 31, 2024 and 2023 were 27.9 % and 29.5 %, respectively.

During the six months ended March 31, 2024, the Company recognized a tax provision of $ 42,395 on income before taxes of $ 148,715 , compared to a tax benefit of $ 8,586 on a loss before taxes of $ 22,139 in the comparable prior year period.

The six month period ended March 31, 2024 included restructuring charges of $ 14,801 ($ 10,982 , net of tax);

strategic review - retention and other of $ 7,334 ($ 5,497 , net of tax);

gain on sale of building of $ 558 ($ 415 , net of tax);

and discrete and certain other tax provisions, net, that affect comparability of $ 393 .

The six month period ended March 31, 2023 included restructuring charges of $ 78,334 ($ 58,529 , net of tax);

Strategic review - retention and other of $ 14,422 ($ 10,880 , net of tax);

gain on the sale of building $ 10,852 ($ 8,323 , net of tax);

intangible asset impairment charges of $ 100,000 ($ 74,256 , net of tax);

proxy expenses of $ 2,117 ($ 1,624 , net of tax);

and discrete tax and certain other tax benefits, net, that affect comparability of $ 9,056 .

Excluding these items, the effective tax rates for the six months ended March 31, 2024 and 2023 were 27.9 % and 29.4 %, respectively.

GRIFFON CORPORATION AND SUBSIDIARIES

2 unchanged sentences

NOTE 9 – LONG-TERM DEBT

At December 31, 2023 At September 30, 2023

At March 31, 2024 At September 30, 2023

Outstanding Balance Original Issuer Premium/(Discount) Capitalized Fees & Expenses Balance Sheet Coupon Interest Rate Outstanding Balance Original Issuer Premium/(Discount) Capitalized Fees & Expenses Balance Sheet Coupon Interest Rate

7 unchanged sentences

Long-term debt $ 1,595,402 $ ( 643 ) $ ( 17,551 ) $ 1,577,208 $ 1,480,187 $ ( 704 ) $ ( 19,579 ) $ 1,459,904

Three Months Ended December 31, 2023 Three Months Ended December 31, 2022

Three Months Ended March 31, 2024 Three Months Ended March 31, 2023

Effective Interest Rate Cash Interest Amort.

15 unchanged sentences

(US dollars and non US currencies in thousands, except per share data)

Six Months Ended March 31, 2024

Six Months Ended March 31, 2023

Effective Interest Rate Cash Interest Amort.

Debt (Premium)/Discount Amort.

Debt Issuance Costs & Other Fees Total Interest Expense Effective Interest Rate Cash Interest Amort.

Debt (Premium)/Discount Amort.

Debt Issuance Costs & Other Fees Total Interest Expense

Senior notes due 2028 (a) 6.0 % $ 28,024 $ ( 24 ) $ 1,010 $ 29,010 6.0 % $ 28,024 $ ( 24 ) $ 1,010 $ 29,010

Term Loan B due 2029 (b) 8.2 % 18,244 85 661 18,990 7.0 % 16,545 86 703 17,334

Revolver due 2028 (b) Variable 3,139 — 373 3,512 Variable 2,017 — 245 2,262

Finance lease - real estate (c) n/a — — — — 5.6 % 352 — — 352

Non US lines of credit (d) Variable 14 — 8 22 Variable 360 — 25 385

Non US term loans (d) Variable — — — — Variable — — — —

Other long term debt (e) Variable 417 — 1 418 Variable 194 — 1 195

Capitalized interest ( 504 ) — — ( 504 ) ( 11 ) — — ( 11 )

Totals $ 49,334 $ 61 $ 2,053 $ 51,448 $ 47,481 $ 62 $ 1,984 $ 49,527

GRIFFON CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(US dollars and non US currencies in thousands, except per share data)

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

2 unchanged sentences

During 2022, Griffon purchased $ 25,225 of 2028 Senior Notes in the open market at a weighted average discount of 91.82 % of par, or $ 23,161 .

As of December 31, 2023, outstanding 2028 Senior Notes due totaled $ 974,775 ;

As of March 31, 2024, outstanding 2028 Senior Notes due totaled $ 974,775 ;

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

1 unchanged sentence

The 2028 Senior Notes were registered under the Securities Act of 1933, as amended (the "Securities Act") via exchange offer.

The fair value of the 2028 Senior Notes approximated $ 945,532 on December 31, 2023 based upon quoted market prices (level 1 inputs).

At December 31, 2023, $ 8,415 of underwriting fees and other expenses incurred remained to be amortized.

The fair value of the 2028 Senior Notes approximated $ 950,406 on March 31, 2024 based upon quoted market prices (level 1 inputs).

At March 31, 2024, $ 7,910 of underwriting fees and other expenses incurred remained to be amortized.

(b) On August 1, 2023, Griffon amended and restated its Credit Agreement (as amended, "Credit Agreement").

5 unchanged sentences

Interest is payable on borrowings at either a Secured Overnight Financing Rate ("SOFR"), Sterling Overnight Index Average ("SONIA") or base rate benchmark rate, plus an applicable margin, which adjusts based on financial performance.

Griffon's SOFR loans accrue interest at TERM SOFR plus a credit adjustment spread and a margin of 2.00 % ( 7.46 % at December 31, 2023);

SONIA loans accrue interest at SONIA Base Rate plus a credit adjustment spread and a margin of 2.00 % ( 7.22 % at December 31, 2023);

and base rate loans accrue interest at prime rate plus a margin of 1.00 % ( 9.50 % at December 31, 2023).

At December 31, 2023, under the Revolver, there were $ 21,500 in outstanding borrowings;

Griffon's SOFR loans accrue interest at Term SOFR plus a credit adjustment spread and a margin of 2.00 % ( 7.43 % at March 31, 2024);

SONIA loans accrue interest at SONIA Base Rate plus a credit adjustment spread and a margin of 2.00 % ( 7.22 % at March 31, 2024);

and base rate loans accrue interest at prime rate plus a margin of 1.00 % ( 9.50 % at March 31, 2024).

At March 31, 2024, under the Revolver, there were $ 169,500 in outstanding borrowings;

outstanding standby letters of credit were $ 12,962 ;

1 unchanged sentence

On January 24, 2022, Griffon amended and restated its Credit Agreement to provide for a new $ 800,000 Term Loan B facility, due January 24, 2029, in addition to the Revolver.

The Term Loan B accrues interest at the Term SOFR rate plus a credit adjustment spread with a floor of 0.50 %, and a spread of 2.25 % ( 7.75 % as of December 31, 2023).

The Term Loan B accrues interest at the Term SOFR rate plus a credit adjustment spread with a floor of 0.50 %, and a spread of 2.25 % ( 7.70 % as of March 31, 2024).

The Term Loan B was issued at 99.75 % of par value.

9 unchanged sentences

Term Loan B borrowings are secured by the same collateral as the Revolver on an equal and ratable basis.

The fair value of the Term Loan B facility approximated $ 462,153 on December 31, 2023 based upon quoted market prices (level 1 inputs).

At December 31, 2023, $ 6,708 of underwriting fees and other expenses incurred, remained to be amortized.

At December 31, 2023, $ 461,000 of the Term Loan B was outstanding.

The fair value of the Term Loan B facility approximated $ 459,574 on March 31, 2024 based upon quoted market prices (level 1 inputs).

At March 31, 2024, $ 6,378 of underwriting fees and other expenses incurred, remained to be amortized.

At March 31, 2024, $ 459,000 of the Term Loan B was outstanding.

GRIFFON CORPORATION AND SUBSIDIARIES

10 unchanged sentences

(d) In November 2012, Garant G.P.

(“Garant”), a Griffon wholly owned subsidiary, entered into a CAD 15,000 ($ 11,363 as of December 31, 2023) revolving credit facility.

(“Garant”), a Griffon wholly owned subsidiary, entered into a CAD 15,000 revolving credit facility.

Effective in December 2023, the facility was amended to replace the Canadian Dollar Offer Rate with the Canadian Overnight Repo Rate Average ("CORRA").

The facility accrues interest at CORRA or the Bankers Acceptance Rate (CDN) plus 1.3 % per annum ( 6.36 % using CORRA and 6.53 % using Bankers Acceptance Rate CDN as of December 31, 2023).

The facility accrues interest at CORRA or the Canadian Bankers Acceptance Rate plus 1.3 % per annum ( 6.30 % using CORRA and 6.35 % using the Canadian Bankers Acceptance Rate as of March 31, 2024).

The revolving facility matures in December 2024, but is renewable upon mutual agreement with the lender.

Garant is required to maintain a certain minimum equity.

At December 31, 2023, there were no outstanding borrowings under the revolving credit facility with CAD 15,000 ($ 11,363 as of December 31, 2023) available.

During 2022, Griffon Australia Holdings Pty Ltd and its Australian subsidiaries (collectively, "Griffon Australia") amended its AUD 18,375 term loan, AUD 20,000 revolver and AUD 15,000 receivable purchase facility agreement that was entered into in July 2016 and further amended in fiscal 2020.

Griffon Australia paid off the term loan in the amount of AUD 9,625 and canceled the AUD 20,000 revolver.

In March 2023 the existing receivable purchase facility was renewed and increased from AUD 15,000 to AUD 30,000 .

The receivable purchase facility matures in March 2024, but is renewable upon mutual agreement with the lender.

The receivable purchase facility accrues interest at BBSY (Bank Bill Swap Rate) plus 1.25 % per annum ( 5.56 % at December 31, 2023).

At December 31, 2023, there was no balance outstanding under the receivable purchase facility with AUD 30,000 ($ 20,511 as of December 31, 2023) available.

At March 31, 2024, there were no outstanding borrowings under the revolving credit facility with CAD 15,000 ($ 11,039 as of March 31, 2024) available.

During 2023, Griffon Australia Holdings Pty Ltd and its Australian subsidiaries (collectively, "Griffon Australia") amended its AUD 15,000 receivable purchase facility to AUD 30,000 .

The receivable purchase facility was renewed in 2024 and now matures in March 2025, but is renewable upon mutual agreement with the lender.

The receivable purchase facility accrues interest at BBSY (Bank Bill Swap Rate) plus 1.25 % per annum ( 5.55 % at March 31, 2024).

At March 31, 2024, there was no balance outstanding under the receivable purchase facility with AUD 30,000 ($ 19,575 as of March 31, 2024) available.

The receivable purchase facility is secured by substantially all of the assets of Griffon Australia and its subsidiaries.

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Upon maturity in July 2023, the GBP 5,000 revolver had no balance and was not renewed.

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

At December 31, 2023, Griffon and its subsidiaries were in compliance with the terms and covenants of all credit and loan agreements.

GRIFFON CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(US dollars and non US currencies in thousands, except per share data)

(e) In February 2024, Griffon repaid in full a loan with the Pennsylvania Industrial Development Authority.

The balance in other long-term debt consists primarily of finance leases.

At March 31, 2024, Griffon and its subsidiaries were in compliance with the terms and covenants of all credit and loan agreements.

NOTE 10 — SHAREHOLDERS’ EQUITY AND EQUITY COMPENSATION

During the three months ended December 31, 2023, the Company paid a quarterly cash dividend of $ 0.15 per share.

During 2023, the Board of Directors approved two quarterly cash dividends each for $ 0.10 per share, and two quarterly cash dividends of $ 0.125 per share, totaling $ 0.45 .

During the six months ended March 31, 2024, the Company paid two quarterly cash dividends of $ 0.15 per share each.

During 2023, the Board of Directors approved two quarterly cash dividends of $ 0.10 per share and two quarterly cash dividends of $ 0.125 per share, totaling $ 0.45 .

Additionally, on April 19, 2023, the Board of Directors declared a special cash dividend of $ 2.00 per share, paid on May 19, 2023, to shareholders of record as of the close of business on May 9, 2023.

4 unchanged sentences

such dividends will be released upon vesting of the underlying restricted shares.

On February 6, 2024, the Board of Directors declared a quarterly cash dividend of $ 0.15 per share, payable on March 21, 2024 to shareholders of record as of the close of business on February 29, 2024.

GRIFFON CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(US dollars and non US currencies in thousands, except per share data)

On May 7, 2024, the Board of Directors declared a quarterly cash dividend of $ 0.15 per share, payable on June 20, 2024 to shareholders of record as of the close of business on May 29, 2024.

On January 29, 2016, shareholders approved the Griffon Corporation 2016 Equity Incentive Plan (the "Original Incentive Plan") pursuant to which, among other things, awards of performance shares, performance units, stock options, stock appreciation rights, restricted shares, restricted stock units, deferred shares and other stock-based awards may be granted.

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

and on February 17, 2022, shareholders approved the Amended and Restated 2016 Equity Incentive Plan (the “Amended Incentive Plan”), which amended and restated the Original Incentive Plan and pursuant to which, among other things, 1,200,000 shares were added to the Original Incentive Plan.

A proposal to approve an amendment to add 2,600,000 shares to the Amended Incentive Plan (the “Amendment”) is included in Griffon’s Proxy Statement dated January 29, 2024 related to the 2024 Annual Meeting of Shareholders, scheduled to be held on March 20, 2024.

If shareholders approve this proposal, 2,600,000 shares will be added to the Amended Incentive Plan as of the date of the 2024 Annual Meeting of Shareholders.

on February 17, 2022, shareholders approved the Amended and Restated 2016 Equity Incentive Plan (the “Amended Incentive Plan”), which amended and restated the Original Incentive Plan and pursuant to which, among other things, 1,200,000 shares were added to the Original Incentive Plan;

and on March 20, 2024, shareholders approved an amendment to add 2,600,000 shares to the Amended Incentive Plan.

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

The maximum number of shares of common stock available for award under the Amended Incentive Plan, before giving effect to the Amendment, is 6,250,000 ( 600,000 of which may be issued as incentive stock options), plus (i) any shares that were reserved for issuance under the Original Incentive Plan as of the effective date of the Original Incentive Plan, and (ii) any shares underlying awards outstanding on such date under the 2011 Incentive Plan that were subsequently canceled or forfeited.

As of December 31, 2023, there were 154,369 shares available for grant.

The maximum number of shares of common stock available for award under the Amended Incentive Plan is 8,850,000 ( 600,000 of which may be issued as incentive stock options), plus (i) any shares that were reserved for issuance under the Original Incentive Plan as of the effective date of the Original Incentive Plan, and (ii) any shares underlying awards outstanding on such date under the 2011 Incentive Plan that were subsequently canceled or forfeited.

As of March 31, 2024, there were 2,377,532 shares available for grant.

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

The Company recognizes forfeitures as they occur.

Compensation expense for restricted stock granted to two senior executives is calculated as the maximum number of shares granted, upon achieving certain performance criteria, multiplied by the stock price as valued by a Monte Carlo Simulation Model.

Compensation expense for restricted stock granted to four senior executives is calculated as the maximum number of shares granted, upon achieving certain performance criteria, multiplied by the stock price as valued by a Monte Carlo Simulation Model.

Compensation cost related to stock-based awards with graded vesting, generally over a period of three to four years , is recognized using the straight-line attribution method and recorded within SG&A expenses.

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

For the Three Months Ended December 31,

For the Three Months Ended March 31, For the Six Months Ended March 31,

2024 2023 2024 2023

Restricted stock $ 3,849 $ 5,296 $ 8,877 $ 10,834

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During the first quarter of 2024, Griffon granted 174,104 shares of restricted stock and restricted stock units ("RSUs").

This includes 166,272 shares of restricted stock and 7,832 RSUs granted to 43 executives and key employees, subject to certain

This includes 166,272 shares of restricted stock and 7,832 RSUs granted to 43 executives and key employees, subject to certain performance conditions, with a vesting period of thirty-six months and a total fair value of $ 8,225 , or a weighted average fair value of $ 47.24 per share.

During the second quarter of 2024, Griffon granted 403,997 shares of restricted stock and RSUs.

This includes 387,222 shares of restricted stock granted to four senior executives with a vesting period of thirty-three months and a two-year post-vesting holding period, subject to the achievement of certain performance conditions relating to required levels of return on invested capital and the relative total shareholder return of Griffon's common stock as compared to a market index.

So long as the minimum performance conditions are attained, the amount of shares that can vest will range from a minimum of 64,539 to a maximum of 387,222 , with the target number of shares being 129,074 .

The total fair value of these restricted shares, assuming achievement of the performance conditions at target, is $ 12,181 , or a weighted average fair value of $ 94.37 per share.

This also includes 16,775 shares of restricted stock granted to non-employee directors of Griffon with a vesting period of one-year and a fair value of $ 1,210 , or a weighted average fair value of $ 72.13 per share.

During the six months ended March 31, 2024, 570,269 shares granted were issued out of treasury stock.

GRIFFON CORPORATION AND SUBSIDIARIES

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(US dollars and non US currencies in thousands, except per share data)

performance conditions, with a vesting period of thirty-six months and a total fair value of $ 8,225 , or a weighted average fair value of $ 47.24 per share.

During the quarter ended December 31, 2023, 166,272 shares granted were issued out of treasury stock.

On April 19, 2023, the Company's Board of Directors approved a $ 200,000 increase to Griffon's share repurchase program to $ 257,955 from the prior unused board authorizations of $ 57,955 .

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Under the authorized share repurchase program, the Company may, from time to time, purchase shares of its common stock in the open market, including pursuant to a 10b5-1 plan, pursuant to an accelerated share repurchase program or issuer tender offer, or in privately negotiated transactions.

Share repurchases during the quarter ended December 31, 2023 totaled 1,634,454 shares of common stock, for a total of $ 69,640 , or an average of $ 42.61 per share.

As of December 31, 2023, $ 237,543 remains under these Board authorized repurchase programs.

During the quarter ended and as of December 31, 2023, $ 696 and $ 1,997 , respectively, were accrued for excise taxes for share repurchases.

During the quarter ended December 31, 2023, 221,229 shares, with a market value of $ 11,604 , or $ 52.45 per share were withheld to settle employee taxes due upon the vesting of restricted stock, and were added to treasury stock.

Share repurchases during the quarter and six months ended March 31, 2024 totaled 1,803,424 shares and 3,437,878 shares of common stock, respectively, for a total of $ 117,384 and $ 187,024 , respectively, or an average of $ 65.09 per share and $ 54.40 per share, respectively.

This includes the repurchase of 1,500,000 shares of common shares by the Company on February 20, 2024 pursuant to a stock purchase and cooperation agreement executed by the Company and Voss Value Master Fund, L.P., Voss Value-Oriented Special Situations Fund, L.P and four separately managed accounts of which Voss Capital, LLC is the investment manager, in a private transaction.

The purchase price per share was $ 65.50 , for an aggregate purchase price of $ 98,250 .

As of March 31, 2024, $ 120,158 remains under these Board authorized repurchase programs.

During the quarter and six months ended March 31, 2024, 374,700 and 595,929 shares, respectively, with a market value of $ 22,722 , or $ 60.64 per share and $ 34,326 , or $ 57.60 per share, respectively, were withheld to settle employee taxes due upon the vesting of restricted stock, and were added to treasury stock.

During the quarter and six months ended March 31, 2024, $ 715 and $ 1,411 , respectively, were accrued for excise taxes for share repurchases and vesting of restricted stock.

As of March 31, 2024, $ 2,712 was accrued for excise taxes for share repurchases.

NOTE 11 – EARNINGS PER SHARE (EPS)

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

Three Months Ended December 31,

Three Months Ended March 31, Six Months Ended March 31,

2024 2023 2024 2023

Common shares outstanding 49,637 57,205 49,637 57,205

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Weighted average shares outstanding - diluted 49,931 53,038 50,714 52,809

Anti-dilutive restricted stock excluded from diluted EPS computation — 2,326 — 2,525

Shares of the ESOP that have been allocated to employee accounts are treated as outstanding in determining earnings per share.

14 unchanged sentences

Information on Griffon’s reportable segments is as follows:

For the Three Months Ended December 31,

For the Three Months Ended March 31, For the Six Months Ended March 31,

REVENUE 2024 2023 2024 2023

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

Three Months Ended December 31,

Three Months Ended March 31, Six Months Ended March 31,

2024 2023 2024 2023

Residential repair and remodel $ 188,529 $ 185,149 $ 375,070 $ 375,879

13 unchanged sentences

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

For the Three Months Ended December 31,

For the Three Months Ended March 31,

HBP CPP Total HBP CPP Total

5 unchanged sentences

Consolidated revenue $ 392,062 $ 280,818 $ 672,880 $ 396,659 $ 314,325 $ 710,984

Griffon evaluates performance and allocates resources based on segment adjusted EBITDA and adjusted EBITDA, non-GAAP measures, which is defined as income before taxes, excluding interest income and expense, depreciation and amortization, strategic review charges, non-cash impairment charges, restructuring charges, gain/loss from debt extinguishment and acquisition related expenses, as well as other items that may affect comparability, as applicable.

For the Six Months Ended March 31,

HBP CPP Total HBP CPP Total

United States $ 754,954 $ 334,314 $ 1,089,268 $ 757,641 $ 366,052 $ 1,123,693

Europe 109 23,598 23,707 16 23,766 23,782

Canada 29,181 37,391 66,572 30,761 44,686 75,447

Australia — 121,901 121,901 — 122,802 122,802

All other countries 3,609 10,976 14,585 4,814 9,830 14,644

Consolidated revenue $ 787,853 $ 528,180 $ 1,316,033 $ 793,232 $ 567,136 $ 1,360,368

Griffon evaluates performance and allocates resources based on segment adjusted EBITDA and adjusted EBITDA, non-GAAP measures, which is defined as income (loss) before taxes, excluding interest income and expense, depreciation and amortization, strategic review charges, non-cash impairment charges, restructuring charges, gain/loss from debt extinguishment and acquisition related expenses, as well as other items that may affect comparability, as applicable.

Segment adjusted EBITDA also excludes unallocated amounts, mainly corporate overhead.

Griffon believes this information is useful to investors for the same reason.

The following table provides a reconciliation of segment and adjusted EBITDA to income before taxes:

The following table provides a reconciliation of segment and adjusted EBITDA to income (loss) before taxes:

GRIFFON CORPORATION AND SUBSIDIARIES

1 unchanged sentence

(US dollars and non US currencies in thousands, except per share data)

For the Three Months Ended December 31,

For the Three Months Ended March 31, For the Six Months Ended March 31,

2024 2023 2024 2023

Segment adjusted EBITDA:

10 unchanged sentences

Proxy expenses — ( 614 ) — ( 2,117 )

Income before taxes $ 60,142 $ 68,020

Intangible asset impairment — ( 100,000 ) — ( 100,000 )

Income (loss) before taxes $ 88,573 $ ( 90,159 ) $ 148,715 $ ( 22,139 )

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

For the Three Months Ended December 31,

For the Three Months Ended March 31, For the Six Months Ended March 31,

DEPRECIATION and AMORTIZATION 2024 2023 2024 2023

4 unchanged sentences

Total consolidated depreciation and amortization $ 15,080 $ 17,254 $ 29,903 $ 34,367

For the Three Months Ended March 31, For the Six Months Ended March 31,

2024 2023 2024 2023

CAPITAL EXPENDITURES

7 unchanged sentences

(US dollars and non US currencies in thousands, except per share data)

ASSETS At December 31, 2023 At September 30, 2023

ASSETS At March 31, 2024 At September 30, 2023

Segment assets:

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___________________

(1) In connection with the expansion of CPP's global sourcing strategy, certain owned manufacturing locations which ceased operations have met the criteria to be classified as held for sale as of December 31, 2023.

The net book value of these properties as of December 31, 2023 totaled $ 15,010 .

The net book value of these properties as of March 31, 2024 totaled $ 24,172 .

NOTE 13 – EMPLOYEE BENEFIT PLANS

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

Three Months Ended December 31,

Three Months Ended March 31, Six Months Ended March 31,

2024 2023 2024 2023

Interest cost $ 1,889 $ 1,826 $ 3,777 $ 3,651

3 unchanged sentences

Net periodic expense $ 35 $ 217 $ 69 $ 433

The Hunter Fan Pension Plan (the "Plan") was terminated with an effective date of April 30, 2024.

This was communicated to Plan participants in February 2024.

The Plan is fully funded and the Company does not anticipate making an additional funding contribution as of the benefit distribution date.

The benefit distribution date will be determined once the Company receives approval from certain regulatory agencies.

NOTE 14 – RECENT ACCOUNTING PRONOUNCEMENTS

10 unchanged sentences

Specifically, the amendments in the standard require the Company to disclose disaggregated:

(1) income taxes paid by federal, state, and foreign taxes on both an interim and annual basis, (2) pre-tax income between domestic and foreign, and (3) income tax expense by federal, state and foreign tax expense.

The standard also requires the Company to disclose specific categories in the rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold.

This standard is effective for the Company beginning with our fiscal year 2026, with retrospective application permitted.

The Company is currently evaluating the potential changes to its income tax disclosures and related impact on its financial reporting processes

(1) income taxes paid by federal, state, and foreign taxes, (2) pre-tax income between domestic and foreign, and (3) income tax expense by federal, state and

GRIFFON CORPORATION AND SUBSIDIARIES

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(US dollars and non US currencies in thousands, except per share data)

and information technology systems.

foreign tax expense.

The standard also requires the Company to disclose specific categories in the rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold.

This standard is effective for the Company beginning with our fiscal year 2026, with retrospective application permitted.

The Company is currently evaluating the potential changes to its income tax disclosures and related impact on its financial reporting processes and information technology systems.

The Company does not expect the adoption of this standard to have an impact on its financial position, results of operations, or cash flows.

1 unchanged sentence

NOTE 15 – DISCONTINUED OPERATIONS

At December 31, 2023 and September 30, 2023, Griffon’s liabilities for discontinued operations primarily relate to insurance claims, income taxes, product liability, warranty and environmental reserves total $ 8,703 and $ 11,798 , respectively.

At March 31, 2024 and September 30, 2023, Griffon’s liabilities for discontinued operations primarily relate to insurance claims, income taxes, product liability, warranty and environmental reserves, and total $ 7,994 and $ 11,798 , respectively.

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

At December 31, 2023 At September 30, 2023

At March 31, 2024 At September 30, 2023

Assets of discontinued operations:

6 unchanged sentences

Total liabilities of discontinued operations $ 7,994 $ 11,798

There was no reported revenues or costs in the three months ended December 31, 2023 and 2022 for discontinued operations.

There was no reported revenues or costs in the six months ended March 31, 2024 and 2023 for discontinued operations.

NOTE 16 – RESTRUCTURING CHARGES

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The global sourcing strategy expansion is expected to be complete by the end of calendar 2024.

Over that period, CPP expects to reduce its facility footprint by approximately 1.2 million square feet, or approximately 15 % of CPP's square footage, and its headcount by approximately 600 .

Operations have ceased at Camp Hill and Harrisburg, PA;

By that time, CPP expects to have reduced its facility footprint by approximately 1.2 million square feet, or approximately 15 % of CPP's square footage, and its headcount by approximately 600 .

Manufacturing Operations have ceased at all affected sites:

Camp Hill and Harrisburg, PA;

Fairfield, IA;

Grantsville, MD;

and four wood mills.

The final facility, in Grantsville, MD, is expected to close by March 2024.

The closed locations, totaling a net book value of $ 15,010 , have met the held for sale criteria and have been classified as such on our Balance Sheet as of December 31, 2023.

The closed locations, which have a total net book value of $ 24,172 , have met the held for sale criteria and have been classified as such on our Balance Sheet as of March 31, 2024.

Implementation of this strategy over the duration of the project will result in charges of $ 120,000 to $ 130,000 , including $ 50,000 to $ 55,000 of cash charges for employee retention and severance, operational transition, and facility and lease exit costs, and $ 70,000 to $ 75,000 of non-cash charges primarily related to asset write-downs.

1 unchanged sentence

These costs exclude cash proceeds from the sale of real estate and equipment, which are expected to largely offset the cash charges, and also exclude inefficiencies due to duplicative labor costs and absorption impacts during transition.

In the quarter ended December 31, 2023, CPP incurred pre-tax restructuring and related exit costs approximating $ 12,400 .

During the quarter ended December 31, 2023, cash charges totaled $ 3,918 and non-cash, asset-related charges totaled $ 8,482 .

The cash charges included $ 1,847 for one-time termination benefits and other personnel-related costs and $ 2,071 for facility exit costs.

Non-cash charges of $ 8,482 were recorded to adjust inventory to net realizable value.

GRIFFON CORPORATION AND SUBSIDIARIES

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(US dollars and non US currencies in thousands, except per share data)

In the quarter ended March 31, 2024, CPP incurred pre-tax restructuring and related exit costs comprised of cash charges totaling $ 2,401 .

The cash charges included $ 482 for one-time termination benefits and other personnel-related costs and $ 1,919 for facility exit costs.

In the six months ended March 31, 2024, CPP incurred pre-tax restructuring and related exit costs approximating $ 14,801 , comprised of cash charges totaling $ 6,319 and non-cash, asset-related charges totaling $ 8,482 .

The cash charges included $ 2,329 for one-time termination benefits and other personnel-related costs and $ 3,990 for facility exit costs.

Non-cash charges of $ 8,482 were recorded to adjust inventory to net realizable value.

In both the quarter and six months ended March 31, 2023, CPP incurred pre-tax restructuring and related exit costs approximating $ 78,334 .

During both the quarter and six months ended March 31, 2023, cash charges totaled $ 19,216 and non-cash, asset-related charges totaled $ 59,118 ;

the cash charges included $ 8,050 for one-time termination benefits and other personnel-related costs and $ 11,166 for facility exit costs.

Non-cash charges included a $ 22,018 impairment charge related to certain fixed assets at several manufacturing locations and $ 37,100 to adjust inventory to net realizable value.

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

For the Three Months Ended December 31,

For the Three Months Ended March 31, For the Six Months Ended March 31,

2024 2023 2024 2023

Cost of goods and services $ 1,334 $ 74,645 $ 12,980 $ 74,645

1 unchanged sentence

Total restructuring charges $ 2,401 $ 78,334 $ 14,801 $ 78,334

For the Three Months Ended December 31,

For the Three Months Ended March 31, For the Six Months Ended March 31,

2024 2023 2024 2023

Personnel related costs $ 482 $ 8,050 $ 2,329 $ 8,050

2 unchanged sentences

Total $ 2,401 $ 78,334 $ 14,801 $ 78,334

The following tables summarizes the accrued liabilities of the Company's restructuring actions for the three months ended December 31, 2023:

GRIFFON CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(US dollars and non US currencies in thousands, except per share data)

The following tables summarizes the accrued liabilities of the Company's restructuring actions for the six months ended March 31, 2024 and 2023:

Cash Charges Non-Cash

2 unchanged sentences

Accrued liability at September 30, 2023 $ 14,107 $ 5,551 $ — $ 19,658

Restructuring charges 1,847 2,071 8,482 12,400

Cash payments ( 7,215 ) ( 3,362 ) — ( 10,577 )

Non-cash charges — — ( 8,482 ) ( 8,482 )

Q1 Restructuring charges 1,847 2,071 8,482 12,400

Q1 Cash payments ( 7,215 ) ( 3,362 ) — ( 10,577 )

Q1 Non-cash charges — — ( 8,482 ) ( 8,482 )

Accrued liability at December 31, 2023 $ 8,739 $ 4,260 $ — $ 12,999

Q2 Restructuring charges 482 1,919 — 2,401

Q2 Cash payments ( 608 ) ( 1,919 ) — ( 2,527 )

Accrued liability at March 31, 2024 $ 8,613 $ 4,260 $ — $ 12,873

___________________

(1) Non-cash charges in Facility and Other Costs represent non-cash impairment charges to adjust inventory to net realizable value.

Cash Charges Non-Cash

Personnel related costs Facilities &

Exit Costs Facility and Other Costs (2)

Accrued liability at September 30, 2022 $ 386 $ 264 $ — $ 650

Q1 Cash payments ( 74 ) ( 93 ) — ( 167 )

Accrued liability at December 31, 2022 $ 312 $ 171 $ — $ 483

Q2 Restructuring charges 8,050 11,166 59,118 78,334

Q2 Cash payments ( 244 ) ( 1,883 ) — ( 2,127 )

Q2 Non-cash charges — — ( 59,118 ) ( 59,118 )

Accrued liability at March 31, 2023 $ 8,118 $ 9,454 $ — $ 17,572

___________________

(2) Non-cash charges in Facility and Other Costs represent the non-cash impairment charges related to certain fixed assets at several manufacturing sites and to adjust inventory to net realizable value.

NOTE 17 – OTHER INCOME (EXPENSE)

For the quarters ended December 31, 2023 and 2022, Other income (expense) of $ 632 and $ 607 , respectively, includes $ 13 and $ 67 , 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 expense of $ 34 and $ 216 , respectively, and net investment income of $ 56 and $ 33 , respectively.

Other income (expense) also includes rental income of $ 0 and $ 212 and royalty income of $ 592 and $ 549 for the three months ended December 31, 2023 and 2022, respectively.

For the quarters ended March 31, 2024 and 2023, Other income (expense) of $ 626 and $ 293 , respectively, includes $ 179 and ($ 164 ), 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 expense of $ 35 and $ 217 , respectively, and net investment income of $ 29 and $ 74 , respectively.

Other income (expense) also includes royalty income of $ 509 and $ 476 for the three months ended March 31, 2024 and 2023, respectively.

For the six months ended March 31, 2024 and 2023, Other income (expense) of $ 1,258 and $ 900 , respectively, includes $ 191 and $( 98 ), 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 expense of $ 69 and $ 433 , respectively, as well as $ 85 and $ 107 , respectively, of net investment income (loss).

Other income (expense) also includes rental income of $ 0 and $ 212 in the six months ended March 31, 2024 and 2023, as well as royalty income of $ 1,100 and $ 1,025 for the six months ended March 31, 2024 and 2023, respectively.

GRIFFON CORPORATION AND SUBSIDIARIES

8 unchanged sentences

Warranty costs expected to be incurred beyond one year are classified in other long-term liabilities.

The current portion of warranty was $ 15,461 as of December 31, 2023 and $ 20,781 as of September 30, 2023.

The long-term warranty liability was $ 1,239 at both December 31, 2023 and September 30, 2023.

Changes in Griffon’s warranty liability in accrued liabilities for the three months ended December 31, 2023 and 2022 were as follows:

Three Months Ended December 31,

The short-term warranty liability was $ 14,903 as of March 31, 2024 and $ 20,781 as of September 30, 2023.

The long-term warranty liability was $ 1,239 at both March 31, 2024 and September 30, 2023.

Changes in Griffon’s warranty liability in accrued liabilities for the three and six months ended March 31, 2024 and 2023 were as follows:

Three Months Ended March 31, Six Months Ended March 31,

2024 2023 2024 2023

Balance, beginning of period $ 15,461 $ 17,699 $ 20,781 $ 16,786

2 unchanged sentences

Balance, end of period $ 14,903 $ 20,101 $ 14,903 $ 20,101

GRIFFON CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(US dollars and non US currencies in thousands, except per share data)

NOTE 19 – OTHER COMPREHENSIVE INCOME (LOSS)

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

For the Three Months Ended December 31,

For the Three Months Ended March 31,

Pre-tax Tax Net of tax Pre-tax Tax Net of tax

3 unchanged sentences

Total other comprehensive income (loss) $ ( 3,996 ) $ ( 900 ) $ ( 4,896 ) $ 3,465 $ ( 852 ) $ 2,613

For the Six Months Ended March 31,

Pre-tax Tax Net of tax Pre-tax Tax Net of tax

Foreign currency translation adjustments $ 3,039 $ — $ 3,039 $ 12,271 $ — $ 12,271

Pension and other defined benefit plans 1,345 ( 282 ) 1,063 2,029 ( 421 ) 1,608

Cash flow hedges 2,110 ( 633 ) 1,477 1,361 ( 408 ) 953

Total other comprehensive income (loss) $ 6,494 $ ( 915 ) $ 5,579 $ 15,661 $ ( 829 ) $ 14,832

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

At December 31, 2023 At September 30, 2023

At March 31, 2024 At September 30, 2023

Foreign currency translation adjustments $ ( 45,684 ) $ ( 48,723 )

2 unchanged sentences

$ ( 64,431 ) $ ( 70,010 )

GRIFFON CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(US dollars and non US currencies in thousands, except per share data)

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

For the Three Months Ended December 31,

For the Three Months Ended March 31, For the Six Months Ended March 31,

Gain (Loss) 2024 2023 2024 2023

2 unchanged sentences

Total gain (loss) before tax $ ( 1,469 ) $ ( 936 ) $ ( 2,269 ) $ ( 876 )

Tax benefit (expense) 168 ( 13 )

Tax expense 308 197 476 184

Net of tax $ ( 1,161 ) $ ( 739 ) $ ( 1,793 ) $ ( 692 )

GRIFFON CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(US dollars and non US currencies in thousands, except per share data)

NOTE 20 — LEASES

19 unchanged sentences

Components of operating lease costs are as follows:

For the Three Months Ended December 31,

For the Three Months Ended March 31, For the Six Months Ended March 31,

2024 2023 2024 2023

Fixed $ 11,863 $ 11,373 $ 23,437 $ 22,667

Variable (a), (b)

2,436 3,246 4,910 6,018

Short-term (b)

1,081 1,844 2,662 4,048

Total $ 15,380 $ 16,463 $ 31,009 $ 32,733

2 unchanged sentences

(b) Not recorded on the balance sheet.

GRIFFON CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(US dollars and non US currencies in thousands, except per share data)

Supplemental cash flow information were as follows:

For the Three Months Ended December 31,

For the Six Months Ended March 31,

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

2 unchanged sentences

Total $ 22,903 $ 21,010

GRIFFON CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(US dollars and non US currencies in thousands, except per share data)

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

December 31, 2023 September 30, 2023

March 31, 2024 September 30, 2023

Operating Leases:

11 unchanged sentences

Total financing lease liabilities $ 279 $ 464

(1) Finance lease assets are recorded net of accumulated depreciation of $ 1,645 and $ 6,769 as of December 31, 2023 and September 30, 2023, respectively.

(1) Finance lease assets are recorded net of accumulated depreciation of $ 1,547 and $ 6,769 as of March 31, 2024 and September 30, 2023, respectively.

On September 28, 2023, the Company closed on the exercise of its lease purchase option, as permitted under the lease agreement, to acquire ownership of the manufacturing facility located in Ocala, Florida for a cash purchase price of $ 23,207 .

2 unchanged sentences

The remaining lease liability balance relates to finance equipment leases.

GRIFFON CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(US dollars and non US currencies in thousands, except per share data)

The aggregate future maturities of lease payments for operating leases and finance leases as of December 31, 2023 are as follows (in thousands):

The aggregate future maturities of lease payments for operating leases and finance leases as of March 31, 2024 are as follows (in thousands):

Operating Leases Finance Leases

9 unchanged sentences

Present value of lease liabilities $ 178,728 $ 279

(a) Excluding the quarter ended December 31, 2023.

Average lease terms and discount rates at December 31, 2023 were as follows:

(a) Excluding the six months ended March 31, 2024.

GRIFFON CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(US dollars and non US currencies in thousands, except per share data)

Average lease terms and discount rates at March 31, 2024 were as follows:

Weighted-average remaining lease term (years):

7 unchanged sentences

Peekskill Site.

Lightron Corporation (“Lightron”), a wholly-owned subsidiary of Griffon, once conducted lamp manufacturing and metal finishing operations at a location in the Town of Cortlandt, New York, just outside the city of Peekskill, New York (the “Peekskill Site”) which was owned by ISC Properties, Inc.

(“ISCP”), a wholly-owned subsidiary of Griffon, for approximately three years .

ISC Properties, Inc.

(“ISCP”), a wholly-owned subsidiary of Griffon, owned the Peekskill Site for approximately three years .

ISCP sold the Peekskill Site in November 1982.

3 unchanged sentences

Performance of the RI/FS is expected to be completed in calendar 2025.

Lightron has not engaged in any operations in over three decades.

ISCP functioned solely as a real estate holding company and has not held any real property in over three decades.

Lightron has not engaged in any operations for over three decades.

ISCP functioned solely as a real estate holding company and has not held any real property for over three decades.

Griffon does not acknowledge any responsibility to perform any investigation or remediation at the Peekskill Site.

One of Griffon’s insurers is defending Lightron, ISCP and Griffon subject to a reservation of rights and is paying the costs of the RI/FS.

GRIFFON CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(US dollars and non US currencies in thousands, except per share data)

Lightron and ISCP are being defended by an insurance company, subject to a reservation of rights, and this insurer is paying the costs of the RI/FS.

Memphis, TN site.

3 unchanged sentences

The State of Tennessee Department of Environment and Conservation (“TDEC”) identified the Memphis site as being potentially contaminated, raising the possibility that site operations could have resulted in soil and groundwater contamination involving volatile organic compounds and metals.

In 2021, the TDEC performed a preliminary assessment of the site and recommended to the United States Environmental Protection Agency (“EPA”) that it include the site on the National Priorities List established under CERCLA.

In 2021, the TDEC performed a preliminary assessment of the site and recommended to the EPA that it include the site on the National Priorities List established under CERCLA.

The TDEC further recommended that the EPA fund an investigation of potential soil gas contamination in receptors near the site.

4 unchanged sentences

Hunter has notified such former owner of this matter, which may have certain liability for any required remediation.

GRIFFON CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(US dollars and non US currencies in thousands, except per share data)

If the EPA decides to add this site to the National Priorities List, a Remedial Investigation/Feasibility Study (“RI/FS”) will be required.

7 unchanged sentences

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

What changed 10-Q

Item 1. Financial Statements