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Item 1. Financial Statements

2024-08-07 compared with 2024-05-08 · 243 added, 188 removed, 771 unchanged (36% of the section changed)

39 unchanged sentences

CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY

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

For the Three and Nine Months Ended June 30, 2024 and 2023

COMMON STOCK CAPITAL IN

9 unchanged sentences

Amortization of deferred compensation — — — — — — — 520 520

Common stock acquired — — — — 1,634 ( 70,543 ) — — ( 70,543 )

Common stock acquired including excise taxes — — — — 1,634 ( 70,543 ) — — ( 70,543 )

Equity awards granted, net — — ( 3,383 ) — ( 180 ) 3,383 — — —

7 unchanged sentences

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

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

Common stock acquired including excise taxes — — — — 1,803 ( 118,964 ) — — ( 118,964 )

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

4 unchanged sentences

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

Net income — — — 41,086 — — — — 41,086

Dividend — — — ( 7,458 ) — — — — ( 7,458 )

Amortization of deferred compensation — — — — — — — 553 553

Common stock acquired including excise taxes — — — — 284 ( 19,294 ) — — ( 19,294 )

ESOP allocation of common stock including excise taxes — — 2,451 — — 509 — — 2,960

Stock-based compensation — — 4,699 — — — — — 4,699

Other comprehensive income, net of tax — — — — — — ( 1,222 ) — ( 1,222 )

Balance at June 30, 2024 84,746 $ 21,187 $ 669,839 $ 406,350 35,393 $ ( 807,429 ) $ ( 65,653 ) $ ( 784 ) $ 223,510

GRIFFON CORPORATION

CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY

For the Three and Nine Months Ended June 30, 2024 and 2023

COMMON STOCK CAPITAL IN

23 unchanged sentences

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

Net income — — — 49,205 — — — — 49,205

Dividend — — — ( 121,461 ) — — — — ( 121,461 )

Amortization of deferred compensation — — — — — — — 6,630 6,630

Common stock acquired — — — — 2,542 ( 86,009 ) — — ( 86,009 )

ESOP allocation of common stock — — 13,609 — — — — — 13,609

Stock-based compensation — — 5,106 — — — — — 5,106

Other comprehensive income, net of tax — — — — — — 315 — 315

Balance at June 30, 2023 84,746 $ 21,187 $ 652,166 $ 246,392 30,083 $ ( 511,414 ) $ ( 67,591 ) $ ( 5,034 ) $ 335,706

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 March 31, Six Months Ended March 31,

Three Months Ended June 30, Nine Months Ended June 30,

2024 2023 2024 2023

5 unchanged sentences

Total operating expenses 159,810 172,439 469,830 585,460

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

Income from operations 89,339 102,185 286,625 117,481

Other income (expense)

1 unchanged sentence

Interest income 769 434 1,830 774

Gain on sale of building 11 — 558 10,852

Gain (loss) on sale of buildings ( 725 ) — ( 167 ) 10,852

Loss from debt extinguishment ( 1,700 ) — ( 1,700 ) —

Other, net 350 1,475 1,608 2,375

Total other expense, net ( 28,330 ) ( 23,732 ) ( 76,901 ) ( 61,167 )

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 )

Income before taxes 61,009 78,453 209,724 56,314

Provision for income taxes 19,923 29,248 62,318 20,662

Net income $ 41,086 $ 49,205 $ 147,406 $ 35,652

Basic earnings per common share $ 0.87 $ 0.94 $ 3.08 $ 0.68

Basic weighted-average shares outstanding 47,034 52,304 47,921 52,640

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

Diluted earnings per common share $ 0.84 $ 0.90 $ 2.94 $ 0.65

Diluted weighted-average shares outstanding 48,851 54,602 50,085 55,087

Dividends paid per common share $ 0.15 $ 2.125 $ 0.45 $ 2.325

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

Net income $ 41,086 $ 49,205 $ 147,406 $ 35,652

Other comprehensive income (loss), net of taxes:

3 unchanged sentences

Total other comprehensive income (loss), net of taxes ( 1,222 ) 315 4,357 15,147

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

Comprehensive income, net $ 39,864 $ 49,520 $ 151,763 $ 50,799

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

2 unchanged sentences

(in thousands)

Six Months Ended March 31,

Nine Months Ended June 30,

CASH FLOWS FROM OPERATING ACTIVITIES:

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

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

Net income $ 147,406 $ 35,652

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

Depreciation and amortization 45,150 50,036

4 unchanged sentences

Amortization of debt discounts and issuance costs 3,169 3,068

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

Loss from debt extinguishment 1,700 —

Deferred income tax benefit — ( 25,744 )

Gain on sale of assets and investments ( 1,448 ) ( 10,852 )

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

Change in assets and liabilities:

(Increase) decrease in accounts receivable ( 6,051 ) 6,236

Decrease in inventories 55,939 84,190

13 unchanged sentences

Payments of long-term debt ( 146,727 ) ( 139,244 )

Financing costs ( 907 ) —

Other, net ( 307 ) ( 152 )

4 unchanged sentences

(in thousands)

Six Months Ended March 31,

Nine Months Ended June 30,

CASH FLOWS FROM DISCONTINUED OPERATIONS:

45 unchanged sentences

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

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.

expenses, useful lives associated with depreciation and amortization of intangible and fixed assets, warranty reserves, sales incentive accruals, assumptions 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 March 31, 2024, the fair values of Griffon’s 2028 Senior Notes and Term Loan B facility approximated $ 950,406 and $ 459,574 , respectively.

On June 30, 2024, the fair values of Griffon’s 2028 Senior Notes and Term Loan B facility approximated $ 940,658 and $ 459,000 , respectively.

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

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.

Insurance contracts with values of $ 4,794 at June 30, 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 Condensed 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 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).

As of June 30, 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 June 30, 2024, Griffon had $ 18,500 of Australian Dollar contracts at a weighted average rate of $ 1.47 which qualified for hedge accounting (Level 2 inputs).

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

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

AOCI included deferred gains of $ 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.

AOCI included deferred gains of $ 424 ($ 297 , net of tax) at June 30, 2024.

Upon settlement, gains of $ 501 and $ 811 were recorded in COGS during the three months and nine months ended June 30, 2024.

All contracts expire in 30 to 90 days.

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).

At June 30, 2024, Griffon had $ 30,000 of Chinese Yuan contracts at a weighted average rate of $ 7.10 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

3 unchanged sentences

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

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.

AOCI included deferred losses of $ 625 ($ 457 , net of tax) at June 30, 2024.

Upon settlement, losses of $ 571 and $ 1,771 were recorded in COGS during the three months and nine months ended June 30, 2024.

All contracts expire in 3 to 274 days.

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

At June 30, 2024, Griffon had $ 9,595 of Canadian Dollar contracts at a weighted average rate of $ 1.36 .

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

Dollar based purchases, do not qualify for hedge accounting.

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.

For the three and nine months ended June 30, 2024, fair value gains (losses) of $ 31 and $( 34 ), 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 $ 53 and $ 79 were recorded in Other income during the three months and nine months ended June 30, 2024 for all settled contracts.

All contracts expire in 30 to 449 days.

8 unchanged sentences

See Note 13 - Business Segments for revenue from contracts with customers disaggregated by end markets, segments and geographic location.

NOTE 4 – ACQUISITIONS

Griffon continually evaluates potential acquisitions that strategically fit within its portfolio or expand its portfolio into new product lines or adjacent markets.

Operating results of business acquisitions are included in Griffon’s consolidated financial statements from the date of acquisition.

On July 1, 2024, Griffon announced that its subsidiary, The AMES Companies, Inc., ("AMES") acquired substantially all of the assets of Pope, a leading Australian provider of residential watering products for approximately AUD 22,000 (approximately $ 14,600 USD).

This is CPP's seventh acquisition in Australia since 2013, and further expands AMES’s product portfolio in the Australian market.

Due to the limited time since the date of the acquisition, the purchase price allocation remains preliminary.

GRIFFON CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

NOTE 5 – INVENTORIES

1 unchanged sentence

The following table details the components of inventory:

At March 31, 2024 At September 30, 2023

At June 30, 2024 At September 30, 2023

Raw materials and supplies $ 91,620 $ 127,342

2 unchanged sentences

Total $ 430,708 $ 507,130

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

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

In connection with the Company's restructuring activities described in Note 17, Restructuring Charges, during the nine months ended June 30, 2024, CPP recorded an impairment charge of $ 22,979 to adjust inventory to its net realizable value.

NOTE 6 – PROPERTY, PLANT AND EQUIPMENT

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

At March 31, 2024 At September 30, 2023

At June 30, 2024 At September 30, 2023

Land, building and building improvements $ 144,934 $ 169,923

4 unchanged sentences

Total $ 274,980 $ 279,218

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.

Depreciation and amortization expense for property, plant and equipment was $ 9,389 and $ 10,000 for the quarters ended June 30, 2024 and 2023, respectively, and $ 28,155 and $ 33,090 for the nine months ended June 30, 2024 and 2023, respectively.

Depreciation included in Selling, general and administrative ("SG&A") expenses was $ 4,124 and $ 4,404 for the quarters ended June 30, 2024 and 2023, respectively, and $ 12,218 and $ 13,289 for the nine months ended June 30, 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 March 31, 2024.

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.

The net book value of these properties as of June 30, 2024 totaled $ 14,747 .

Except as described in Note 17, Restructuring charges, no event or indicator of impairment occurred during the nine months ended June 30, 2024 which would require additional impairment testing of property, plant and equipment.

GRIFFON CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

NOTE 7 – CREDIT LOSSES

10 unchanged sentences

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

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

Six months ended March 31,

Nine months ended June 30,

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

2 unchanged sentences

Other, primarily foreign currency translation 26 ( 437 )

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

Ending Balance, June 30 $ 11,009 $ 12,516

GRIFFON CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

NOTE 8 – GOODWILL AND OTHER INTANGIBLES

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:

Indicators of impairment were not present for any of Griffon's reporting units during the nine months ended June 30, 2024.

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

Home and Building Products $ 191,253

2 unchanged sentences

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

At March 31, 2024 At September 30, 2023

At June 30, 2024 At September 30, 2023

Gross Carrying Amount Accumulated

7 unchanged sentences

The gross carrying amount of intangible assets was impacted by $ 624 related to favorable foreign currency translation.

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 intangible assets was $ 5,858 and $ 5,669 for the quarters ended June 30, 2024 and 2023, respectively, and $ 16,995 and $ 16,946 for the nine months ended June 30, 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 9 – INCOME TAXES

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);

During the quarter ended June 30, 2024, the Company recognized a tax provision of $ 19,923 on income before taxes of $ 61,009 , compared to a tax provision of $ 29,248 on income before taxes of $ 78,453 in the prior year quarter.

The current year quarter results included restructuring charges of $ 18,688 ($ 13,991 , net of tax);

strategic review costs - retention and other of $ 1,870 ($ 1,390 , net of tax);

loss on debt extinguishment of $ 1,700 ($ 1,292 , net of tax);

loss on sale of buildings of $ 725 ($ 520 , net of tax);

and discrete and certain other tax provisions, net, that affect comparability of $ 2,247 .

The prior year quarter results included strategic review costs - retention and other of $ 5,812 ($ 4,378 , net of tax);

restructuring charges of $ 3,862 ($ 2,831 , net of tax);

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

special dividend Employee Stock Ownership Plan ("ESOP") charges of $ 9,042 ($ 6,936 , net of tax);

proxy expenses of $ 568 ($ 435 , 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 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 $ 6,519 .

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

Excluding these items, the effective tax rates for the quarters ended June 30, 2024 and 2023 were 27.9 % and 28.1 %, respectively.

During the nine months ended June 30, 2024, the Company recognized a tax provision of $ 62,318 on income before taxes of $ 209,724 , compared to a tax provision of $ 20,662 on income before taxes of $ 56,314 in the comparable prior year period.

The nine month period ended June 30, 2024 included restructuring charges of $ 33,489 ($ 24,973 , net of tax);

strategic review - retention and other of $ 9,204 ($ 6,887 , 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);

loss on debt extinguishment of $ 1,700 ($ 1,292 , net of tax);

loss on sale of buildings of $ 167 ($ 105 , net of tax);

and discrete and certain other tax provisions, net, that affect comparability of $ 2,640 .

The nine month period ended June 30, 2023 included a gain on the sale of a building of $ 10,852 ($ 8,323 , net of tax);

strategic review costs - retention and other of $ 20,234 ($ 15,258 , net of tax);

restructuring charges of $ 82,196 ($ 61,360 , net of tax);

special dividend ESOP charges of $ 9,042 ($ 6,936 , net of tax), intangible asset impairment charges of $ 100,000 ($ 74,256 , net of tax);

proxy expenses of $ 2,685 ($ 2,059 , net of tax);

and discrete tax and certain other tax benefits, net, that affect comparability of $ 2,537 .

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

Excluding these items, the effective tax rates for the nine months ended June 30, 2024 and 2023 were 27.9 % and 28.9 %, respectively.

GRIFFON CORPORATION AND SUBSIDIARIES

2 unchanged sentences

NOTE 10 – LONG-TERM DEBT

At March 31, 2024 At September 30, 2023

At June 30, 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 $ 1,515,874 $ ( 452 ) $ ( 16,211 ) $ 1,499,211 $ 1,480,187 $ ( 704 ) $ ( 19,579 ) $ 1,459,904

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

Three Months Ended June 30, 2024 Three Months Ended June 30, 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

Nine Months Ended June 30, 2024 Nine Months Ended June 30, 2023

Effective Interest Rate Cash Interest Amort.

8 unchanged sentences

Non US lines of credit (d) Variable 33 — 11 44 Variable 619 — 37 656

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

Other long term debt (e) Variable 478 — 1 479 Variable 298 — 1 299

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

As of June 30, 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 $ 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").

The amendment increased the maximum borrowing availability on its revolving credit facility from $ 400,000 to $ 500,000 (the "Revolver") and extended the maturity date of the Revolver from March 22, 2025 to August 1, 2028.

In the event the 2028 Senior Notes are not repaid, refinanced, or replaced prior to December 1, 2027, the Revolver will mature on December 1, 2027.

The amendment also modified certain other provisions of the Credit Agreement, including increasing the letter of credit sub-facility under the Revolver from $ 100,000 to $ 125,000 and increasing the customary accordion feature from a minimum of $ 375,000 to a minimum of $ 500,000 .

The Revolver also includes a multi-currency sub-facility of $ 200,000 .

Borrowings under the Revolver may be repaid and re-borrowed at any time.

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 % ( 7.43 % 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 ;

and $ 317,538 was available, subject to certain loan covenants, for borrowing at that date.

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 % ( 7.70 % as of March 31, 2024).

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

In connection with this amendment, Griffon capitalized $ 15,466 of underwriting fees and other expenses incurred, which are being amortized over the term of the loan.

The Term Loan B facility requires nominal quarterly principal payments of $ 2,000 , potential additional annual principal payments based on a percentage of excess cash flow and certain secured leverage thresholds starting with the fiscal year ending September 30, 2023;

The fair value of the 2028 Senior Notes approximated $ 940,658 on June 30, 2024 based upon quoted market prices (Level 1 inputs).

At June 30, 2024, $ 7,405 of underwriting fees and other expenses incurred remained to be amortized.

(b) On January 24, 2022, Griffon amended and restated its Credit Agreement (the "Credit Agreement") to provide for a new $ 800,000 Term Loan B facility, due January 24, 2029, in addition to the revolving credit facility (the "Revolver") provided for under the Credit Agreement.

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

Since that time, during 2023 and 2022, Griffon prepaid $ 25,000 and $ 300,000 , respectively, aggregate principal amount of the Term Loan B, which permanently reduced the outstanding balance.

In connection with the prepayment of the Term Loan B, Griffon recognized charges of $ 437 and $ 6,296 on the prepayment of debt in 2023 and 2022, respectively.

The charges were comprised of write-offs of unamortized debt issuance costs of $ 386 and $ 5,575 for 2023 and 2022, respectively, and the original issue discount of $ 51 and $ 721 for 2023 and 2022, respectively.

As of June 30, 2024, the Term Loan B outstanding balance was $ 459,000 .

On June 26, 2024, Griffon further amended its Credit Agreement to favorably reprice the Term Loan B facility.

The amendment reduced the margin above SOFR by 0.25 %, eliminated the credit spread adjustment and reduced the SOFR floor from 0.50 % to 0 %.

Furthermore, the amendment stipulates that if Griffon prepays all or a portion of the Term Loan B within six months of the amendment date, Griffon will be required to pay a premium equal to 1 % of the amount prepaid.

In connection with the amendment, Griffon recognized a $ 1,700 loss on debt extinguishment in the Company's Condensed Consolidated Statements of Operations, primarily consisting of the write-off of unamortized debt issuance costs and original issue discount related to portions of the Term Loan B facility that were repaid and then reborrowed from new lenders.

At June 30, 2024, unamortized costs of $ 5,733 related to existing and new Term Loan B facility lenders will continue to be amortized over the term of the loan.

Prior to the amendment, the Term Loan B bore interest at the Term SOFR rate plus a credit spread adjustment with a floor of 0.50 % and a spread of 2.50 %.

Effective June 26, 2024 the Term Loan B bears interest at the Term SOFR rate plus a spread of 2.25 % ( 7.59 % as of June 30, 2024).

The Term Loan B facility continues to require nominal quarterly principal payments of $ 2,000 , potential additional annual principal payments based on a percentage of excess cash flow and certain secured leverage thresholds starting with the fiscal year ended September 30, 2023;

and a final balloon payment due at maturity.

At September 30, 2023, Griffon's secured leverage remained below the threshold set forth in the Credit Agreement that would, if exceeded, require Griffon to make an additional payment, and therefore no additional annual principal payment was required.

Term Loan B borrowings may generally be repaid without penalty but may not be re-borrowed.

During 2023 and 2022, Griffon prepaid $ 25,000 and $ 300,000 , respectively, aggregate principal amount of the Term Loan B, which permanently reduced the outstanding balance.

In connection with the prepayment of the Term Loan B, Griffon recognized a charge of $ 437 and $ 6,296 on the prepayment of debt in 2023 and 2022, respectively.

The charges were comprised of write-offs of underwriting fees and other expenses of $ 386 and $ 5,575 for 2023 and 2022, respectively, and the original issue discount of $ 51 and $ 721 for 2023 and 2022, respectively.

Term Loan B borrowings may generally be repaid without penalty but may not be re-borrowed, subject to a prepayment premium of 1.0 % in connection with the above repricing transaction within the six months following the closing date of June 26, 2024.

The Term Loan B facility is subject to the same affirmative and negative covenants that apply to the Revolver (as described below), but is not subject to any financial maintenance covenants.

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 $ 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.

Term Loan B borrowings are secured by the same collateral that secures borrowings under the Revolver, on an equal and ratable basis.

The fair value of the Term Loan B facility approximated $ 459,000 on June 30, 2024 based upon quoted market prices (Level 1 inputs).

On August 1, 2023, Griffon amended and restated the Credit Agreement to increase the maximum borrowing availability under the Revolver from $ 400,000 to $ 500,000 and extend the maturity date of the Revolver from March 22, 2025 to August 1, 2028.

In the event the 2028 Senior Notes are not repaid, refinanced, or replaced prior to December 1, 2027, the Revolver will mature on December 1, 2027.

The amendment also modified certain other provisions of the Credit Agreement, including increasing the letter of credit sub-facility under the Revolver from $ 100,000 to $ 125,000 and

GRIFFON CORPORATION AND SUBSIDIARIES

1 unchanged sentence

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

increasing the customary accordion feature from a minimum of $ 375,000 to a minimum of $ 500,000 .

The Revolver also includes a multi-currency sub-facility of $ 200,000 .

Borrowings under the Revolver may be repaid and re-borrowed at any time.

Griffon's SOFR loans accrue interest at Term SOFR plus a credit adjustment spread and a margin of 2.00 % ( 7.44 % at June 30, 2024);

SONIA loans accrue interest at SONIA Base Rate plus a credit adjustment spread and a margin of 2.00 % ( 7.23 % at June 30, 2024);

and base rate loans accrue interest at prime rate plus a margin of 1.00 % ( 9.50 % at June 30, 2024).

At June 30, 2024 there were $ 90,000 in outstanding borrowings under the Revolver;

outstanding standby letters of credit were $ 12,935 ;

and $ 397,065 was available, subject to certain loan covenants, for borrowing at that date.

The Revolver has certain financial maintenance tests including a maximum total leverage ratio, a maximum senior secured leverage ratio and a minimum interest coverage ratio, as well as customary affirmative and negative covenants and events of default.

The negative covenants place limits on Griffon's ability to, among other things, incur indebtedness, incur liens, and make restricted payments and investments.

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

(c) 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 .

6 unchanged sentences

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 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 facility accrues interest at CORRA or the Canadian Bankers Acceptance Rate plus 1.3 % per annum ( 6.04 % using CORRA and 6.02 % using the Canadian Bankers Acceptance Rate as of June 30, 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 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.

At June 30, 2024, there were no outstanding borrowings under the revolving credit facility with CAD 15,000 ($ 10,955 as of June 30, 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 accrues interest at BBSY (Bank Bill Swap Rate) plus 1.25 % per annum ( 5.56 % at June 30, 2024).

At June 30, 2024, there was no balance outstanding under the receivable purchase facility with AUD 30,000 ($ 19,965 as of June 30, 2024) available.

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

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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.

At June 30, 2024, 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)

NOTE 11 — SHAREHOLDERS’ EQUITY AND EQUITY COMPENSATION

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 .

During the nine months ended June 30, 2024, the Company paid three quarterly cash dividends of $ 0.15 per share each.

During the nine months ended June 30, 2023, the Company paid three quarterly cash dividends consisting of two cash dividends of $ 0.10 per share and one cash dividend of $ 0.125 per share.

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.

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

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 August 6, 2024 the Board of Directors declared a quarterly cash dividend of $ 0.15 per share, payable on September 19, 2024 to shareholders of record as of the close of business on August 28, 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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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.

As of June 30, 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.

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

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

For the Three Months Ended June 30, For the Nine Months Ended June 30,

2024 2023 2024 2023

Restricted stock $ 4,699 $ 5,106 $ 13,576 $ 15,940

ESOP 2,408 1,297 3,797 2,501

2,353 10,146 6,150 12,647

Total stock-based compensation $ 7,052 $ 15,252 $ 19,726 $ 28,587

________________________

(1) During both the quarter and nine months ended June 30, 2023, special dividend ESOP charges included in compensation expense were $ 9,042 .

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 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.

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

GRIFFON CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

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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

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

During the third quarter of 2024, there were no shares of restricted stock or RSUs granted.

During the nine months ended June 30, 2024, 570,269 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 .

1 unchanged sentence

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 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.

Share repurchases during the quarter and nine months ended June 30, 2024 totaled 283,479 shares and 3,721,357 shares of common stock, respectively, for a total of $ 19,080 and $ 206,104 , respectively, or an average of $ 67.31 per share and $ 55.38 per share, respectively.

The share repurchases during the nine months ended June 30, 2024 include 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.

As of June 30, 2024, $ 101,078 remains under these Board authorized repurchase programs.

During the three months ended June 30, 2024, there were no shares withheld to settle employee taxes due upon the vesting of restricted stock.

During the nine months ended June 30, 2024, 595,929 shares of common stock with a market value of $ 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 ended June 30, 2024, accrued excise taxes of $ 486 were reversed to adjust for a benefit on ESOP contributions, partially offset by $ 191 accrued for share repurchases, resulting in a net benefit of $ 295 in the quarter.

During the nine months ended June 30, 2024, $ 1,116 , was accrued for excise taxes for share repurchases.

As of June 30, 2024, $ 2,417 was accrued for excise taxes for share repurchases.

GRIFFON CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

NOTE 12 – EARNINGS PER SHARE (EPS)

2 unchanged sentences

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

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

Three Months Ended June 30, Nine Months Ended June 30,

2024 2023 2024 2023

6 unchanged sentences

Weighted average shares outstanding - diluted 48,851 54,602 50,085 55,087

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.

GRIFFON CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

NOTE 13 – BUSINESS SEGMENTS

10 unchanged sentences

Information on Griffon’s reportable segments is as follows:

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

For the Three Months Ended June 30, For the Nine Months Ended June 30,

REVENUE 2024 2023 2024 2023

2 unchanged sentences

Total revenue $ 647,814 $ 683,430 $ 1,963,847 $ 2,043,798

GRIFFON CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

Disaggregation of Revenue

1 unchanged sentence

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

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

Three Months Ended June 30, Nine Months Ended June 30,

2024 2023 2024 2023

14 unchanged sentences

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

For the Three Months Ended March 31,

For the Three Months Ended June 30,

HBP CPP Total HBP CPP Total

5 unchanged sentences

Consolidated revenue $ 394,214 $ 253,600 $ 647,814 $ 401,142 $ 282,288 $ 683,430

For the Six Months Ended March 31,

For the Nine Months Ended June 30,

HBP CPP Total HBP CPP Total

5 unchanged sentences

Consolidated revenue $ 1,182,067 $ 781,780 $ 1,963,847 $ 1,194,374 $ 849,424 $ 2,043,798

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.

Griffon evaluates performance and allocates resources based on segment adjusted EBITDA and adjusted EBITDA, non-GAAP measures, which are 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.

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 (loss) before taxes:

The following table provides a reconciliation of segment and adjusted EBITDA to income 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 March 31, For the Six Months Ended March 31,

For the Three Months Ended June 30, For the Nine Months Ended June 30,

2024 2023 2024 2023

7 unchanged sentences

Depreciation and amortization ( 15,247 ) ( 15,669 ) ( 45,150 ) ( 50,036 )

Loss from debt extinguishment ( 1,700 ) — ( 1,700 ) —

Restructuring charges ( 18,688 ) ( 3,862 ) ( 33,489 ) ( 82,196 )

Gain on sale of building 11 — 558 10,852

Gain (loss) on sale of buildings ( 725 ) — ( 167 ) 10,852

Strategic review - retention and other ( 1,870 ) ( 5,812 ) ( 9,204 ) ( 20,234 )

1 unchanged sentence

Intangible asset impairment — — — ( 100,000 )

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

Special dividend ESOP charges — ( 9,042 ) — ( 9,042 )

Income before taxes $ 61,009 $ 78,453 $ 209,724 $ 56,314

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

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

For the Three Months Ended June 30, For the Nine Months Ended June 30,

DEPRECIATION and AMORTIZATION 2024 2023 2024 2023

4 unchanged sentences

Total consolidated depreciation and amortization $ 15,247 $ 15,669 $ 45,150 $ 50,036

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

For the Three Months Ended June 30, For the For the Nine Months Ended June 30,

2024 2023 2024 2023

8 unchanged sentences

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

ASSETS At March 31, 2024 At September 30, 2023

ASSETS At June 30, 2024 At September 30, 2023

Segment assets:

8 unchanged sentences

___________________

(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 March 31, 2024.

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

The net book value of these properties as of June 30, 2024 totaled $ 14,747 .

NOTE 14 – EMPLOYEE BENEFIT PLANS

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

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

Three Months Ended June 30, Nine Months Ended June 30,

2024 2023 2024 2023

31 unchanged sentences

NOTE 16 – DISCONTINUED OPERATIONS

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.

At June 30, 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 $ 10,017 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 March 31, 2024 At September 30, 2023

At June 30, 2024 At September 30, 2023

Assets of discontinued operations:

6 unchanged sentences

Total liabilities of discontinued operations $ 10,017 $ 11,798

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

There was no reported revenues or costs in the nine months ended June 30, 2024 and 2023 for discontinued operations.

NOTE 17 – RESTRUCTURING CHARGES

In response to changing market conditions, Griffon announced in May 2023 that CPP is expanding its global sourcing strategy to include long handled tools, material handling, and wood storage and organization product lines.

By transitioning these product lines to an asset-light structure, CPP’s operations will be better positioned to serve customers with a more flexible and cost-effective sourcing model that leverages supplier relationships around the world, while improving its competitive positioning in a post-pandemic marketplace.

6 unchanged sentences

and four wood mills.

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.

Capital investment in the range of $ 3,000 to $ 5,000 will also be required.

The closed locations, which have a total net book value of $ 14,747 , have met the held for sale criteria and have been classified as such on our Condensed Consolidated Balance Sheet as of June 30, 2024.

Implementation of this strategy over the duration of the project will result in charges approximating $ 130,000 , which now includes approximately $ 46,000 of cash charges for employee retention and severance, operational transition, and facility and lease exit costs, and approximately $ 84,000 of non-cash charges primarily related to asset write-downs.

Capital investment of approximately $ 5,000 will also be required.

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.

2 unchanged sentences

(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 .

In the quarter ended June 30, 2024, CPP incurred pre-tax restructuring and related exit costs approximating $ 18,688 , comprised of cash charges totaling $ 4,191 and non-cash, asset-related charges of $ 14,497 .

The cash charges included $ 709 for one-time termination benefits and other personnel-related costs and $ 3,482 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 .

Non-cash charges related to $ 14,497 recorded to adjust inventory to net realizable value.

In the nine months ended June 30, 2024, CPP incurred pre-tax restructuring and related exit costs approximating $ 33,489 , comprised of cash charges totaling $ 10,510 and non-cash, asset-related charges totaling $ 22,979 .

The cash charges included $ 3,038 for one-time termination benefits and other personnel-related costs and $ 7,472 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 ;

Non-cash charges related to $ 22,979 recorded to adjust inventory to net realizable value.

In the quarter and nine months ended June 30, 2023, CPP incurred pre-tax restructuring and related exit costs approximating $ 3,862 and $ 82,196 , respectively.

During the quarter ended June 30, 2023, cash charges totaled $ 3,862 which included $ 2,234 for one-time termination benefits and other personnel-related costs and $ 1,628 for facility exit costs.

During the nine months ended June 30, 2023, cash charges totaled $ 23,078 and non-cash, asset-related charges totaled $ 59,118 ;

the cash charges included $ 10,284 for one-time termination benefits and other personnel-related costs and $ 12,794 for facility exit costs.

1 unchanged sentence

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 March 31, For the Six Months Ended March 31,

For the Three Months Ended June 30, For the Nine Months Ended June 30,

2024 2023 2024 2023

2 unchanged sentences

Total restructuring charges $ 18,688 $ 3,862 $ 33,489 $ 82,196

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

For the Three Months Ended June 30, For the Nine Months Ended June 30,

2024 2023 2024 2023

6 unchanged sentences

(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:

The following tables summarizes the accrued liabilities of the Company's restructuring actions for the nine months ended June 30, 2024 and 2023:

Cash Charges Non-Cash

9 unchanged sentences

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

Q3 Restructuring charges 709 3,482 14,497 18,688

Q3 Cash payments ( 2,671 ) ( 4,345 ) — ( 7,016 )

Q3 Non-cash charges — — ( 14,497 ) ( 14,497 )

Accrued liability at June 30, 2024 $ 6,651 $ 3,397 $ — $ 10,048

___________________

10 unchanged sentences

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

Q3 Restructuring charges 2,234 1,628 — 3,862

Q3 Cash payments ( 579 ) ( 4,245 ) — ( 4,824 )

Accrued liability at June 30, 2023 $ 9,773 $ 6,837 $ — $ 16,610

______________________

(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 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

1 unchanged sentence

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

NOTE 18 – OTHER INCOME (EXPENSE)

For the quarters ended June 30, 2024 and 2023, Other income (expense) of $ 350 and $ 1,475 , respectively, includes ($ 120 ) and $ 590 , 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 $ 34 and $ 217 , respectively, and net investment income of $ 10 and $ 336 , respectively.

Other income (expense) also includes royalty income of $ 549 and $ 438 for the three months ended June 30, 2024 and 2023, respectively.

For the nine months ended June 30, 2024 and 2023, Other income (expense) of $ 1,608 and $ 2,375 , respectively, includes $ 72 and $ 492 , 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 $ 103 and $ 650 , respectively, as well as $ 95 and $ 444 , respectively, of net investment income.

Other income (expense) also includes royalty income of $ 1,649 and $ 1,463 for the nine months ended June 30, 2024 and 2023, respectively.

NOTE 19 – WARRANTY LIABILITY

5 unchanged sentences

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

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,

The short-term warranty liability was $ 14,414 as of June 30, 2024 and $ 20,781 as of September 30, 2023.

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

Changes in Griffon’s warranty liability for the three and nine months ended June 30, 2024 and 2023 were as follows:

Three Months Ended June 30, Nine Months Ended June 30,

2024 2023 2024 2023

8 unchanged sentences

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

For the Three Months Ended March 31,

For the Three Months Ended June 30,

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

3 unchanged sentences

Total other comprehensive income (loss) $ ( 1,478 ) $ 256 $ ( 1,222 ) $ ( 664 ) $ 979 $ 315

For the Six Months Ended March 31,

For the Nine Months Ended June 30,

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

4 unchanged sentences

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

At March 31, 2024 At September 30, 2023

At June 30, 2024 At September 30, 2023

Foreign currency translation adjustments $ ( 46,511 ) $ ( 48,723 )

3 unchanged sentences

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

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

For the Three Months Ended June 30, For the Nine Months Ended June 30,

Gain (Loss) 2024 2023 2024 2023

2 unchanged sentences

Total gain (loss) before tax $ ( 757 ) $ ( 303 ) $ ( 3,026 ) $ ( 1,179 )

Tax expense 308 197 476 184

Tax benefit 159 64 635 248

Net of tax $ ( 598 ) $ ( 239 ) $ ( 2,391 ) $ ( 931 )

23 unchanged sentences

Components of operating lease costs are as follows:

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

For the Three Months Ended June 30, For the Nine Months Ended June 30,

2024 2023 2024 2023

9 unchanged sentences

Supplemental cash flow information were as follows:

For the Six Months Ended March 31,

For the Nine Months Ended June 30,

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

6 unchanged sentences

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

March 31, 2024 September 30, 2023

June 30, 2024 September 30, 2023

Operating Leases:

11 unchanged sentences

Total financing lease liabilities $ 234 $ 464

(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.

(1) Finance lease assets are recorded net of accumulated depreciation of $ 1,466 and $ 6,769 as of June 30, 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.

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

The aggregate future maturities of lease payments for operating leases and finance leases as of June 30, 2024 are as follows (in thousands):

Operating Leases Finance Leases

9 unchanged sentences

Present value of lease liabilities $ 171,237 $ 234

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

(a) Excluding the nine months ended June 30, 2024.

GRIFFON CORPORATION AND SUBSIDIARIES

1 unchanged sentence

(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:

Average lease terms and discount rates at June 30, 2024 were as follows:

Weighted-average remaining lease term (years):

14 unchanged sentences

On May 15, 2019 the United States Environmental Protection Agency ("EPA") added the Peekskill Site to the National Priorities List under CERCLA and has since reached agreement with Lightron and ISCP pursuant to which Lightron and ISCP will perform a Remedial Investigation/Feasibility Study (“RI/FS”).

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

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

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

1 unchanged sentence

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

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.

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.

Memphis, TN site.

9 unchanged sentences

There are other potentially responsible parties for this site, including a former owner of Hunter;

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

Hunter has notified such former owner of this matter.

GRIFFON CORPORATION AND SUBSIDIARIES

10 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