What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2024-11-13 compared with 2023-11-16 · 339 added, 360 removed, 1439 unchanged (33% of the section changed)

41 unchanged sentences

CPP Goodwill and Indefinite-Lived Intangible Assets Impairment Testing

As described further in notes 1 and 7 to the consolidated financial statements, the Company tests goodwill at the reporting unit level and indefinite-lived intangible assets at least annually for impairment.

The Company performed its annual impairment testing of goodwill as of September 30, 2023 for the CPP reporting units and associated indefinite-lived intangible assets.

Additionally, due to a decrease in forecasted sales and operating results due to elevated customer inventory levels and reduced customer demand, the Company completed an interim impairment test as of March 31, 2023 for the CPP reporting units and certain associated indefinite-lived intangible assets.

The Company performed the interim and annual impairment testing of goodwill by comparing the fair value of the Company’s reporting units to their respective carrying values.

The fair value of the CPP reporting units was determined using a combination of the income and market-based valuation approach methodologies, which include the present value of expected future cash flows and the use of market assumptions specific to the reporting unit.

The Company used prospective financial information to which discount rates were applied to calculate the fair value.

Similarly to goodwill, the Company tested indefinite-lived intangibles for impairment as of March 31, 2023 and September 30, 2023.

The Company utilized a relief from royalty method to calculate and compare the fair value of the indefinite-lived intangible assets to their carrying value.

As a result of the impairment tests, the Company recorded indefinite-lived intangible asset impairment as of March 31, 2023, and September 30, 2023.

We identified the Company’s interim and annual impairment testing of the CPP reporting units’ goodwill and certain indefinite-lived intangible assets as a critical audit matter.

The principal considerations for our determination that the interim and annual impairment testing is a critical audit matter are as follows:

The determination of the fair value of reporting units and indefinite-lived intangibles require management to make significant estimates and assumptions related to forecasts of future cash flows and discount rates, and specifically for indefinite-lived intangibles, royalty rates.

As described further in notes 1 and 7 to the consolidated financial statements, the Company tests goodwill and indefinite-lived intangible assets for impairment at least annually in the fourth quarter, and more frequently whenever events or circumstances change that would more likely than not reduce the fair value below the carrying amount.

The Company performed its annual impairment testing of goodwill and indefinite-lived intangible assets as of September 30, 2024.

A quantitative assessment of the goodwill and indefinite-lived intangible assets was performed for the Consumer and Professional Products ("CPP") reporting units.

The CPP reporting units' goodwill was tested for impairment by comparing the estimated fair value of the reporting units to their respective carrying values.

The estimated fair value of the CPP reporting units was determined using a combination of the income-based and market-based valuation methodologies, which include the present value of expected future cash flows and the use of market assumptions specific to the reporting units.

The Company used prospective financial information to which discount rates were applied to calculate the estimated fair value.

Similarly to goodwill, CPP's indefinite-lived intangible assets were tested for impairment by comparing the estimated fair value of the indefinite-lived intangible assets to their carrying value using a relief from royalty valuation method, which estimates the value of a trademark by discounting to present value the hypothetical royalty payments that are saved by owning the asset rather than licensing it.

We identified the Company's annual impairment testing of the CPP reporting units’ goodwill and certain indefinite-lived intangible assets as a critical audit matter.

The principal considerations for our determination that the CPP annual impairment testing is a critical audit matter are as follows:

The determination of the fair value of reporting units and indefinite-lived intangible assets require management to make significant estimates and assumptions related to forecasts of future cash flows, such as revenue growth rates, discount rates, weighted average cost of capital, and specifically for indefinite-lived intangibles, royalty rates.

This requires management to evaluate historical results and expectations of future operating performance based on relevant information available to them regarding expectations of industry performance, as well as expectations for entity-specific performance.

In addition, determining the discount rate requires management to evaluate the appropriate risk premium based on their judgment of industry and entity-specific risks.

Management also used a selection of comparable companies that correspond to each reporting unit to derive a market-based multiple for the CPP reporting units.

As disclosed by management, changes in these assumptions could have a significant impact on the fair value of the reporting units and indefinite-lived assets.

In addition, determining the discount rates requires management to evaluate the appropriate risk premium based on their judgment of industry and entity-specific risks.

Similarly, determining the royalty rates requires management to evaluate hypothetical royalty payments that are saved by owning the asset rather than licensing it.

As disclosed by management, changes in these assumptions could have a significant impact on the fair value of the reporting units and indefinite-lived intangible assets.

In turn, auditing these judgments and assumptions requires a high degree of auditor judgment.

Our audit procedures related to the quantitative impairment testing included the following:

Our audit procedures related to the CPP quantitative impairment testing included the following:

We tested the design and operating effectiveness of controls relating to the impairment testing, including the Company’s ability to develop the estimates utilized in calculating the fair value of the CPP reporting units and certain indefinite-lived intangible assets.

Such estimates included prospective financial information, long-term growth rates, discount rates, weighted average cost of capital and specifically for indefinite-lived intangibles, royalty rates.

With the assistance of valuation specialists, we evaluated the appropriateness of the valuation methodology utilized and assessed the appropriateness of inputs utilized.

We evaluated the qualifications of those responsible for preparing the calculations of fair values.

We tested the inputs, significant judgments and estimates utilized in performing the annual and interim impairment tests, which included comparing management’s judgments and estimates to industry and market data.

We tested the inputs, significant judgments and estimates, as follows:

a) tested prospective financial information and long-term growth rates by comparing to historical trends and industry expectations, performed a sensitivity analysis over growth rates and assessed management’s historical ability to accurately forecast;

b) tested discount rates by comparing to historical rates and industry expectations, compared rates to market comparable companies and independently calculated discount rates for comparison to those used by management;

c) for indefinite-lived intangibles, tested royalty rates by comparing to comparable licensing agreements;

and d) tested weighted average cost of capital by analyzing the implied discount rate and independently calculated a weighted-average discount rate using individual discount rates and compared to the rate utilized by management.

Such estimates included revenue growth rates, discount rates, weighted average cost of capital and specifically for indefinite-lived intangible assets, royalty rates.

With the assistance of valuation specialists, we evaluated the appropriateness of the valuation methodologies utilized and assessed the appropriateness of inputs utilized.

We also evaluated the qualifications of those responsible for preparing the calculations of fair values.

We tested key inputs, significant judgments and estimates utilized in performing the annual impairment test, as follows:

a) tested revenue growth rates by comparing to historical trends and industry expectations, performed a sensitivity analysis over revenue growth rates and assessed management’s historical ability to accurately forecast;

b) tested discount rates by comparing to historical rates and industry expectations, compared rates to market comparable companies, independently calculated discount rates for comparison to those used by management, performed a sensitivity analysis over discount rates, and tested weighted average cost of capital by analyzing the implied discount rate and independently calculated a weighted-average discount rate compared to the rate utilized by management;

and c) for indefinite-lived intangible assets, tested royalty rates by comparing to comparable licensing agreements, and performed a sensitivity analysis over royalty rates.

/s/ GRANT THORNTON LLP

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Prepaid and other current assets 61,604 57,139

Assets held for sale 14,532 —

Assets of discontinued operations 648 1,001

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Interest income 2,434 2,094 215

Gain on sale of buildings 12,655 — —

Gain (loss) on sale of buildings ( 61 ) 12,655 —

Debt extinguishment, net ( 1,700 ) ( 437 ) ( 4,529 )

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Deferred income tax provision (benefit) 3,574 ( 37,795 ) ( 56,706 )

(Gain)/ loss on sale/disposal of assets and investments ( 12,960 ) ( 469 ) 231

Gain on sale of assets and investments ( 61 ) ( 12,960 ) ( 469 )

Change in assets and liabilities, net of assets and liabilities acquired:

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(Increase) decrease in prepaid and other assets ( 925 ) 621 ( 20,005 )

Increase (decrease) in accounts payable, accrued liabilities and income taxes payable ( 67,843 ) ( 96,372 ) 72,773

Decrease in accounts payable, accrued liabilities and income taxes payable ( 30,732 ) ( 67,843 ) ( 96,372 )

Other changes, net 2,130 11,468 13,150

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Net cash provided by (used in) operating activities ( 2,776 ) ( 2,994 ) 10,198

Net cash provided by (used in) investing activities — ( 2,627 ) 6,751

Net cash used in investing activities — — ( 2,627 )

Net cash provided by (used in) discontinued operations ( 2,776 ) ( 2,994 ) 7,571

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Balance at 9/30/2021 84,375 $ 21,094 $ 602,181 $ 669,998 27,762 $ ( 416,850 ) $ ( 45,977 ) $ ( 23,288 ) $ 807,158

Net income — — — 79,211 — — — — 79,211

Net loss — — — ( 191,558 ) — — — — ( 191,558 )

Dividends — — — ( 134,380 ) — — — — ( 134,380 )

6 unchanged sentences

Balance at 9/30/2022 84,746 $ 21,187 $ 627,982 $ 344,060 27,682 $ ( 420,116 ) $ ( 82,738 ) $ ( 12,805 ) $ 477,570

GRIFFON CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

(in thousands)

COMMON STOCK CAPITAL IN

PAR VALUE RETAINED

EARNINGS TREASURY SHARES ACCUMULATED OTHER

COMPREHENSIVE

INCOME (LOSS) DEFERRED

COMPENSATION Total

(in thousands) SHARES PAR VALUE SHARES COST

Balance at 9/30/2021 84,375 $ 21,094 $ 602,181 $ 669,998 27,762 $ ( 416,850 ) $ ( 45,977 ) $ ( 23,288 ) $ 807,158

Net income (loss) — — — ( 191,558 ) — — — — ( 191,558 )

Net income — — — 77,617 — — — — 77,617

Dividends — — — ( 140,161 ) — — — — ( 140,161 )

1 unchanged sentence

Amortization of deferred compensation — — — — — — — 10,362 10,362

Common stock acquired — — — — 4,143 ( 152,279 ) — — ( 152,279 )

Equity awards granted, net — — ( 7,699 ) — ( 507 ) 7,699 — — —

3 unchanged sentences

Balance at 9/30/2023 84,746 $ 21,187 $ 662,680 $ 281,516 31,684 $ ( 577,686 ) $ ( 70,010 ) $ ( 2,443 ) $ 315,244

Net income (loss) — — — 77,617 — — — — 77,617

Net income — — — 209,897 — — — — 209,897

Dividends — — — ( 29,971 ) — — — — ( 29,971 )

1 unchanged sentence

Amortization of deferred compensation — — — — — — — 2,225 2,225

Common stock acquired — — — — 4,143 ( 152,279 ) — — ( 152,279 )

Common stock acquired including excise taxes — — — — 4,772 ( 277,896 ) — — ( 277,896 )

Equity awards granted, net — — ( 12,875 ) — ( 608 ) 12,875 — — —

ESOP allocation of common stock — — 21,868 — — — — — 21,868

ESOP allocation of common stock including excise taxes — — 8,918 — — 510 — — 9,428

Stock-based compensation — — 18,305 — — — — — 18,305

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Griffon oversees the operations of its subsidiaries, allocates resources among them and manages their capital structures.

Griffon provides direction and assistance to its subsidiaries in connection with acquisition and growth opportunities as well as in connection with divestitures.

In order to further diversify, Griffon also seeks out, evaluates and, when appropriate, will acquire additional businesses that offer potentially attractive returns on capital.

Griffon provides direction and assistance to its subsidiaries with acquisition and growth opportunities as well as divestitures.

As long-term investors, we intend to continue to grow and strengthen our existing businesses, and to diversify further through investments in our businesses and acquisitions.

The Company was founded in 1959, is a Delaware corporation headquartered in New York, N.Y.

and is listed on the New York Stock Exchange (NYSE:GFF).

On May 3, 2023, in response to changing market conditions, Griffon announced that its CPP segment will expand 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.

These actions will be essential to CPP achieving 15 % EBITDA margins, while enhancing free cash flow through improved working capital and significantly lower capital expenditures.

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 %, and its headcount by approximately 600 .

The affected U.S.

locations will include Camp Hill and Harrisburg, Pennsylvania;

Grantsville, Maryland;

Fairfield, Iowa;

and four wood mills.

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.

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.

On May 16, 2022, Griffon announced that its Board of Directors initiated a process to review a comprehensive range of strategic alternatives to maximize shareholder value including a sale, merger, divestiture, recapitalization or other strategic transaction.

On April 20, 2023, Griffon announced that its Board of Directors, after extensive evaluation and deliberation, determined that the ongoing execution of the Company’s strategic plan was the best way to maximize value for shareholders and unanimously decided to conclude its review.

On December 17, 2021, Griffon entered into a definitive agreement to acquire Hunter Fan Company (“Hunter”), a market leader in residential ceiling, commercial, and industrial fans, from MidOcean Partners (“MidOcean”) for a contractual purchase price of $ 845,000 and completed the acquisition on January 24, 2022.

On September 27, 2021, Griffon announced it was exploring strategic alternatives for its Defense Electronics segment, which consisted of Telephonics Corporation ("Telephonics"), and on June 27, 2022, Griffon completed the sale of Telephonics for $ 330,000 , excluding customary post-closing adjustments, primarily related to working capital.

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

GRIFFON CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

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

sale in the consolidated balance sheets.

All references made to results and information in the Consolidated Financial Statements on Form 10-K are to Griffon's continuing operations unless noted otherwise.

On December 22, 2020, AMES acquired Quatro Design Pty Ltd (“Quatro”), a leading Australian manufacturer and supplier of

glass fiber reinforced concrete landscaping products for residential, commercial, and public sector projects.

Griffon announced in May 2023 that CPP was expanding its global sourcing strategy to include long handled tools, material handling, and wood storage and organization product lines for the U.S.

This initiative was successfully completed as of September 30, 2024, ahead of the previously announced date of December 31, 2024.

Refer to Note 10 - Restructuring Charges for further details.

On July 1, 2024, Griffon announced that its subsidiary, The AMES Companies, Inc., ("AMES") expanded the scope of its Australian operations by acquiring substantially all the assets of Pope, a leading Australian provider of residential watering products, from The Toro Company (NYSE:TTC) for a purchase price of approximately AUD 21,800 (approximately $ 14,500 ) in cash.

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

On June 27, 2022, we completed the sale of our Defense Electronics ("DE") segment, which consisted of our Telephonics Corporation ("Telephonics") subsidiary, for $ 330,000 in cash, excluding customary post-closing adjustments.

As such, the results of operations of our Telephonics business is classified as a discontinued operation in the Consolidated Statements of Operations for all periods presented and the related assets and liabilities have been classified as assets and liabilities of the discontinued operation in the Consolidated Balance Sheets.

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

On January 24, 2022, Griffon acquired Hunter Fan Company (“Hunter”), a market leader in residential ceiling, commercial, and industrial fans, from MidOcean Partners (“MidOcean”) for a contractual purchase price of $ 845,000 .

Hunter, part of our CPP segment, complements and diversifies our portfolio of leading consumer brands and products.

Griffon currently conducts its operations through two reportable segments:

8 unchanged sentences

CPP sells products globally through a portfolio of leading brands including AMES, since 1774, Hunter, since 1886, True Temper, and ClosetMaid.

GRIFFON CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

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

Consolidation

5 unchanged sentences

Discontinued operations

For the years ended September 30, 2023, 2022 and 2021, discontinued operations includes the Telephonics business, and the assets and liabilities of discontinued installations business and other discontinued activities which have been segregated from Griffon's continuing operations primarily related to insurance claims, product liability, warranty and environmental reserves.

As of September 30, 2024 and 2023, assets and liabilities of discontinued operations was associated with Installations Services and other discontinued activities, which primarily consisted of insurance claims, product liability, warranty and environmental reserves.

For the year ended September 30, 2022, discontinued operations included the Telephonics business in our Consolidated Statements of Operations and Comprehensive Income (Loss), which has been segregated from Griffon's continuing operations.

There was no reported revenue for the years ended September 30, 2024, 2023 and 2022 for Installations Services and other discontinued operations.

See Note 8, Discontinued Operations.

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Actual results may ultimately differ from these estimates.

GRIFFON CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

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

Cash and equivalents

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The fair value hierarchy, as outlined in the applicable accounting guidance, establishes a fair value hierarchy that requires the Company to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

A financial instrument’s categorization within the hierarchy is based on the lowest level of input that is significant to the fair value measurement.

GRIFFON CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

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

financial instrument’s categorization within the hierarchy is based on the lowest level of input that is significant to the fair value measurement.

The accounting guidance establishes three levels of inputs that may be used to measure fair value, as follows:

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

Insurance contracts with a value of $ 3,671 at September 30, 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 Other current assets on the consolidated balance sheet.

Insurance contracts with a value of $ 4,819 at September 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 are included in Other current assets on the Consolidated Balance Sheets.

Items Measured at Fair Value on a Recurring Basis

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These hedges were all deemed effective as cash flow hedges with gains and losses related to changes in fair value deferred and recorded in Other comprehensive income (loss) and Prepaid and other current assets, or Accrued liabilities, until settlement (level 2 inputs).

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

Accumulated Other Comprehensive Income (AOCI) included deferred gains of $ 765 ($ 536 , net of tax) and $ 2,017 ($ 1,412 , net of tax) at September 30, 2023 and 2022, respectively.

Upon settlement gains (losses) of $ 3,991 , $ 5,477 and $( 2,204 ) were recognized in the Consolidated Statements of Operations and Comprehensive Income (Loss) in Cost of goods and services ("COGS") during 2023, 2022 and 2021, respectively.

All contracts expire in 30 days .

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

Accumulated Other Comprehensive Income (AOCI) included deferred losses of $ 660 ($ 462 , net of tax) at September 30, 2024 and deferred gains of $ 765 ($ 536 , net of tax) at September 30, 2023.

Upon settlement, gains of $ 1,120 , $ 3,991 and $ 5,477 were recognized in the Consolidated Statements of Operations and Comprehensive Income (Loss) in COGS during 2024, 2023 and 2022, respectively.

All contracts expire in 30 days to 240 days .

At September 30, 2024 and 2023, Griffon had $ 20,500 and $ 52,000 of Chinese Yuan contracts at a weighted average rate of $ 7.11 and $ 7.00 , respectively, which qualified for hedge accounting.

These hedges were all deemed effective as cash flow

GRIFFON CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

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

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 settlement (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 settlement (level 2 inputs).

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

AOCI included deferred losses of $ 1,721 ($ 1,257 , net of tax) and $ 3,179 ($ 2,320 , net of tax) at September 30, 2023 and 2022, respectively.

AOCI included deferred gains of $ 410 ($ 300 , net of tax) and deferred losses of $ 1,721 ($ 1,257 , net of tax) at September 30, 2024 and 2023, respectively.

Upon settlement, losses of $ 1,936 , $ 2,313 and $ 736 were recorded in COGS during 2024, 2023 and 2022, respectively.

2 unchanged sentences

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

dollar based purchases, do not qualify for hedge accounting and fair value gains of $ 60 and $ 427 were recorded in Other assets and to Other income for the outstanding contracts, based on similar contract values (level 2 inputs), for the years ended September 30, 2023 and 2022, respectively.

dollar based purchases, do not qualify for hedge accounting and fair value losses of $ 67 and fair value gains of $ 60 were recorded in Other assets and to Other income for the outstanding contracts, based on similar contract values (level 2 inputs), for the years ended September 30, 2024 and 2023, respectively.

Realized gains (losses) of $ 98 , $ 336 and $ 247 were recorded in Other income during 2024, 2023 and 2022, respectively.

All contracts expire in 1 to 359 days .

GRIFFON CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

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

Pension plan assets with a fair value of $ 158,705 at September 30, 2024, are measured and recorded at fair value based upon quoted prices in active markets for identical assets (level 1 inputs), quoted market prices for similar assets (level 2 inputs) and fair value assumptions for unobservable inputs in which little or no market data exists (level 3).

6 unchanged sentences

Adjustments resulting from currency translation are recorded in AOCI as cumulative translation adjustments.

The Company recognized cumulative translation gains of $ 8,447 during 2023 and losses of $ 37,920 during 2022.

The Company recognized cumulative translation gains during 2024 and 2023 of $ 10,137 and $ 8,447 , respectively.

As of September 30, 2024 and 2023, the cumulative foreign currency translation recorded in AOCI was a loss of $ 38,586 and $ 48,723 , respectively.

9 unchanged sentences

Refer to Note 2 - Revenue for more detail.

GRIFFON CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

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

Accounts receivable, expected loss allowance for doubtful accounts and concentrations of credit risk

8 unchanged sentences

The Company writes-off accounts receivable when they are deemed to be uncollectible.

GRIFFON CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

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

Customer program reserves and cash discounts are netted against accounts receivable when it is customer practice to reduce invoices for these amounts.

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In general, HBP produces residential and commercial sectional garage doors, commercial rolling steel door and grille products, and CPP produces long-handled tools and landscaping products, and storage and organizational products, both in response to orders from customers of retailers and dealers or based on expected orders, as applicable.

Long-Lived Assets, Including Intangible Assets

Long-lived assets, including definite intangible assets

Property, plant and equipment includes the historical cost of land, buildings, equipment and significant improvements to existing plant and equipment or, in the case of acquisitions, a fair market value appraisal of such assets completed at the time of acquisition.

10 unchanged sentences

The original cost of fully-depreciated property, plant and equipment remaining in use at September 30, 2024 was approximately $ 232,857 .

GRIFFON CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

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

Long-lived assets, including customer relationships and software, and tangible assets, primarily property, plant and equipment, are amortized over their expected useful lives, generally eight to 25 years, and involves significant assumptions and estimates.

Long-lived assets, including customer relationships and software, and tangible assets, primarily property, plant and equipment, are amortized over their expected useful lives, generally eight to twenty-five years , and involves significant assumptions and estimates.

We assess the recoverability of the carrying amount of our long-lived assets, including amortizable intangible assets, whenever events or changes in circumstances indicate the carrying amount of the assets may not be recoverable.

1 unchanged sentence

If the sum of the expected future undiscounted cash flows are less than the carrying amount of the asset group, a loss would be recognized for the difference between the fair value and the carrying amount.

For the fiscal years ended September 30, 2023 and 2022, we tested long-lived intangible and tangible assets for impairment by comparing estimated future undiscounted cash flows of each CPP asset group to the carrying amount of the asset group and determined that an impairment did not exist.

For the fiscal years ended September 30, 2024 and 2023, we tested long-lived definite intangible and tangible assets for impairment by comparing estimated future undiscounted cash flows of each CPP asset group to the carrying amount of the asset group and determined that an impairment did not exist.

No event or indicator of impairment existed for the HBP assets groups.

1 unchanged sentence

Goodwill represents the excess of the cost of net assets acquired in business combinations over the fair value of the identifiable tangible and intangible assets acquired and liabilities assumed in a business combination.

GRIFFON CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

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

We test goodwill and indefinite-lived intangibles for impairment at least annually in the fourth quarter, and more frequently whenever events or circumstances change that would more likely than not reduce the fair value below the carrying amount.

7 unchanged sentences

Any changes in key assumptions or management judgment with respect to a reporting unit or its prospects, which may result from a decline in Griffon’s stock price, a change in market conditions, market trends, interest rates or other factors outside of Griffon’s control, or significant underperformance relative to historical or projected future operating results, could result in a significantly different estimate of the fair value of Griffon’s reporting units, which could result in an impairment charge in the future.

During the fiscal year ended September 30, 2023, the Company performed a qualitative assessment of the HBP reporting unit goodwill and determined that indicators that the fair value was less than the carrying amount were not present.

With respect to CPP's reporting units goodwill, the Company performed a quantitative assessment using both an income based and market based approach, which did not result in an impairment.

Additionally, the Company compared the estimated fair values of the CPP indefinite-lived intangibles, using the relief from royalty method, to their carrying amounts.

The impairment tests resulted in pre-tax noncash impairment charges of $ 109,200 to the gross carrying amount of our trademarks, of which $ 9,200 was recognized in the fourth quarter and $ 100,000 was recognized in the second quarter.

Indicators of impairment were not present for the HBP indefinite-lived intangibles during 2023.

For fiscal year ended September 30, 2022, we performed a qualitative assessment of the HBP reporting unit and determined that indicators that the fair value was less than the carrying amount were not present.

However, indicators of impairment were present for our CPP reporting units driven by a decrease in comparable company market multiples and an increase in interest rates and the related impact on weighted average cost of capital rates.

As such, in connection with the preparation of our financial statements for the fiscal year ended September 30, 2022, we performed a quantitative assessment of the CPP reporting units using both an income-based and market-based approach.

The impairment tests resulted in a pre-tax, non-cash goodwill impairment charge of $ 342,027 .

Further, we compared the estimated fair values of the CPP indefinite lived intangibles, using the relief from royalty method, to their carrying values which resulted in a pre-tax, non-cash impairment charge of $ 175,000 .

GRIFFON CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

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

In connection with the preparation of our financial statements for the fiscal years ended September 30, 2024, 2023 and 2022, Griffon performed its annual impairment testing of its goodwill and indefinite-lived intangibles.

Griffon performed a quantitative assessment of the CPP reporting units and indefinite-lived intangible assets.

The assessments in both fiscal 2024 and 2023 did not result in an impairment to goodwill, however, for the fiscal 2022, the impairment tests resulted in a pre-tax, non-cash goodwill impairment charge of $ 342,027 to the CPP reporting units.

For the HBP reporting unit, we performed a qualitative assessment and determined that indicators that fair value was less than the carrying amount were not present in fiscal years 2024, 2023 and 2022.

During the years ended September 30, 2024, 2023 and 2022, the Company compared the estimated fair values of its CPP indefinite-lived intangibles to their carrying amounts using a relief from royalty method, which estimates the value of a trademark by discounting to present value the hypothetical royalty payments that are saved by owning the asset rather than licensing it.

The Company then compared the estimated fair values of each trademark to their carrying amounts.

For the year ended September 30, 2024, the impairment test did not result in impairment charges to CPP's gross carrying amount of intangible assets;

however, for the years ended September 30, 2023 and 2022, the impairment tests resulted in pre-tax non-cash impairment charges of $ 109,200 and $ 175,000 , respectively, to the gross carrying amount of trademarks in the CPP segment.

Griffon performed qualitative assessments for the HBP indefinite-lived intangibles and determined that indicators that fair value was less than the carrying amount were not present in fiscal 2024, 2023 and 2022.

ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease.

12 unchanged sentences

For real estate leases, we account for lease components together with non-lease components (e.g., common-area maintenance).

GRIFFON CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

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

We are subject to Federal, state and local income taxes in the U.S.

13 unchanged sentences

Advertising costs, which are expensed as incurred in SG&A, was $ 25,600 in 2024, $ 28,400 in 2023 and $ 26,700 in 2022.

GRIFFON CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

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

Risk, retention and insurance

13 unchanged sentences

All of the defined benefit plans are frozen and have ceased accruing benefits.

GRIFFON CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

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

The Company’s non-service cost components of net periodic benefit plan cost was an expense (benefit) of $ 137 , $ 866 and $( 4,256 ) during 2024, 2023, and 2022 respectively.

6 unchanged sentences

The company does not expect the provisions of the standard to have a material impact on the Company's financial statements and related disclosures.

New Accounting Standards Implemented

In October 2021, the FASB issued ASU No.

2021-08, Business Combinations (Topic 805);

Accounting for Contract Assets and Contract Liabilities from Contracts with Customers.

This new guidance affects all entities that enter into a business combination within the scope of ASC 805-10.

Under this new guidance, the acquirer should determine what contract assets and/or liabilities it would have recorded under ASC 606 (Revenue Guidance) as of the acquisition date, as if the acquirer had entered into the original contract at the same date and on the same terms as the acquirer.

Under current U.S.

GAAP, contract assets and contract liabilities acquired in a business combination are recorded by the acquirer at fair value.

This update was effective for the Company beginning in fiscal 2023.

Adoption of this standard did not have an impact on our consolidated financial statements and the related disclosures.

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

GRIFFON CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

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

In November 2023, the Financial Accounting Standards Board ("FASB") issued ASU No.

2023-07, Segment Reporting (Topic 280), Improvements to Reportable Segment Disclosures.

This standard expands disclosures regarding a public entity’s reportable segments and requires additional information about a reportable segment’s expenses, interim segment profit or loss, and how a public entity’s chief operating decision maker uses reported segment profit or loss information in assessing segment performance and allocating resources.

The standard does not change the definition of operating segments.

This standard is effective for the Company beginning with our fiscal year 2025, with early adoption permitted.

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

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

In December 2023, the FASB issued ASU No.

2023-09, Income Taxes (Topic 740), Improvements to Income Tax Disclosure.

The standard requires significant additional disclosures focused on income taxes paid and the rate reconciliation table.

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

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

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 a material impact on its financial position, results of operations, or cash flows.

NOTE 2 – REVENUE

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The Company uses an observable price to determine the stand-alone selling price for separate performance obligations or a cost plus margin approach when one is not available.

The transaction price includes variable consideration, such as discounts and volume rebates, when it is probable that a significant reversal of revenue recognized will not occur.

The transaction price includes variable consideration, such as discounts and volume rebates, when it is probable that a

GRIFFON CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

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

significant reversal of revenue recognized will not occur.

Variable consideration is determined using either the expected value or the most likely amount of consideration to be received based on historical experience and the specific facts and circumstances at the time of evaluation.

See Note 19 - Business Segments for revenue from contracts with customers disaggregated by end markets, segments and geographic location.

See Note 19 - Reportable Segments for revenue from contracts with customers disaggregated by end markets, segments and geographic location.

The Company’s performance obligations are recognized at a point in time related to the manufacture and sale of a broad range of products and components and revenue is recognized when title, and risk and rewards of ownership, have transferred to the customer, which is generally upon shipment.

13 unchanged sentences

Additionally, all taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction and collected from a customer (e.g., sales, use, value added, and some excise taxes) are excluded from revenue.

GRIFFON CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

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

NOTE 3 — ACQUISITIONS

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

On July 1, 2024, Griffon announced that its subsidiary, AMES expanded the scope of its Australian operations by acquiring substantially all the assets of Pope, a leading Australian provider of residential watering products, from The Toro Company (NYSE:TTC) for a purchase price of approximately AUD 21,800 (approximately $ 14,500 ) in cash.

The purchase price was preliminarily allocated to inventory of AUD 16,581 (approximately $ 11,051 ), goodwill of AUD 2,225 (approximately $ 1,483 ) and acquired intangibles, net of deferred taxes, of AUD 2,940 (approximately $ 1,960 ), which was assigned to the CPP segment, and is not deductible for income tax purposes.

On January 24, 2022, Griffon acquired Hunter, a market leader in residential ceiling, commercial, and industrial fans, from MidOcean for a contractual purchase price of $ 845,000 .

3 unchanged sentences

The following unaudited proforma summary from continuing operations presents consolidated information as if the Company acquired Hunter on October 1, 2020:

GRIFFON CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

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

Proforma For the Year Ended September 30, (unaudited)

6 unchanged sentences

• The tax effects on the above adjustments using the statutory tax rate of 25.7 % for Griffon and 27.1 % for Hunter.

GRIFFON CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

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

The calculation of the final purchase price allocation is as follows:

19 unchanged sentences

(3) Deferred tax liability recorded on primarily intangibles assets.

GRIFFON CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

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

The amounts assigned to goodwill and major intangible asset classifications for the Hunter acquisition are as follows:

4 unchanged sentences

Total goodwill and intangible assets $ 866,711

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

The final purchase price allocated to goodwill and acquired intangibles was AUD $ 1,038 (approximately $ 784 ) and AUD $ 2,755 (approximately $ 2,082 ), respectively, which was assigned to the CPP segment, and is not deductible for income tax purposes.

During the years ended September 30, 2023 and 2021, acquisition related costs were de minimis.

During the year ended September 30, 2022, SG&A included acquisition costs of $ 9,303 .

GRIFFON CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

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

During the years ended September 30, 2024 and 2022, SG&A included acquisition costs of $ 441 and $ 9,303 , respectively.

During the year ended September 30, 2023, acquisition related costs were de minimis.

NOTE 4 — INVENTORIES

6 unchanged sentences

Total $ 425,489 $ 507,130

In connection with the Company's restructuring activities described in Note 10, Restructuring Charges, during the year ended September 30, 2023, CPP recorded an inventory impairment charge of $ 37,100 to adjust to net realizable value.

In connection with the Company's restructuring activities described in Note 10, Restructuring Charges, during the years ended September 30, 2024, and September 30, 2023, CPP recorded inventory impairment charges of $ 23,763 and $ 37,100 , respectively, to adjust inventory to its net realizable value.

NOTE 5 — PROPERTY, PLANT AND EQUIPMENT

8 unchanged sentences

Total $ 288,297 $ 279,218

Except as described in Note 10, Restructuring Charges, no impairment occurred during the year ended September 30, 2023.

In connection with the expansion of CPP's global sourcing strategy which has been completed as of September 30, 2024, certain owned manufacturing locations which concluded operations have met the criteria to be classified as held for sale, and the net book value of these properties as of September 30, 2024 totaled $ 14,532 .

Except as described in Note 10, Restructuring Charges, no event or indicator of impairment occurred during the years ended September 30, 2024 and September 30, 2023, which would require additional impairment testing of property, plant and equipment.

GRIFFON CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

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

NOTE 6 – CREDIT LOSSES

5 unchanged sentences

Credit losses are recorded as a reduction of revenue and the provision related to the allowance for doubtful accounts is recorded in SG&A expenses.

The Company also considers current and expected future economic and market conditions, such as the COVID-19 pandemic, when determining any estimate of credit losses.

The Company also considers current and expected future economic and market conditions when determining any estimate of credit losses.

Generally, estimates used to determine the allowance are based on assessment of anticipated payment and all other historical, current and future information that is reasonably available.

1 unchanged sentence

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 this guidance in all material respects.

GRIFFON CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

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

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:

Beginning Balance, October 1, 2022 $ 12,137

Allowance for credit losses acquired 2,598

Provision for expected credit losses 971

6 unchanged sentences

Ending Balance, September 30, 2024 $ 10,986

GRIFFON CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

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

NOTE 7 — GOODWILL AND INTANGIBLES

Goodwill at September 30, 2024 and 2023 was $ 329,393 and $ 327,864 , respectively.

For the fiscal year ended September 30, 2023, the Company performed a quantitative assessment of the CPP reporting units using both an income-based and market-based approach, which did not result in a goodwill impairment.

For the HBP reporting unit, we performed a qualitative assessment and determined that indicators that fair value was less than the carrying amount were not present.

For the fiscal year ended September 30, 2022, we performed a qualitative assessment of the HBP reporting unit and determined that indicators that the fair value was less than the carrying amount were not present.

The impairment tests resulted in a pre-tax, non-cash goodwill impairment charge of $ 342,027 to the CPP reporting units.

For the fiscal years ended September 30, 2024, 2023 and 2022, the Company performed a quantitative assessment of the CPP reporting units using both an income-based and market-based approach, which did not result in a goodwill impairment in fiscal 2024 and 2023, however, for the fiscal year ended September 30, 2022, the impairment tests resulted in a pre-tax, non-cash goodwill impairment charge of $ 342,027 to the CPP reporting units.

The following table provides a summary of the carrying value of goodwill by segment as of September 30, 2024, 2023 and 2022.

At September 30,

2021 Goodwill from acquisitions (a) Accumulated Impairment Charges Foreign currency translation adjustments At September 30,

2022 Goodwill from acquisitions (a) Foreign currency translation adjustments At September 30,

2022 Goodwill from acquisitions (a) At September 30,

2023 Goodwill from acquisitions (b) Foreign currency translation adjustments At September 30,

Consumer and Professional Products $ 144,537 $ ( 7,926 ) $ 136,611 $ 1,483 $ 46 $ 138,140

1 unchanged sentence

Total $ 335,790 $ ( 7,926 ) $ 327,864 $ 1,483 $ 46 $ 329,393

(a) The change in the CPP segment was due to the acquisitions of Hunter in 2022.

During the fiscal year ended September 30, 2023, the Company compared the estimated fair values of its CPP indefinite-lived intangibles to their carrying amounts using a relief from royalty method, which estimates the value of a trademark by discounting to present value the hypothetical royalty payments that are saved by owning the asset rather than licensing it.

(a) The adjustment to goodwill is in connection with the acquisition of Hunter in 2022.

(b) The change in goodwill for the CPP segment relates to the acquisition of Pope in 2024.

The Company then compared the estimated fair values of each trademark to their carrying amounts.

Indicators of impairment were not present for the HBP indefinite-lived intangibles during 2023.

GRIFFON CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

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

For the fiscal year ended September 30, 2022, we determined the fair values of CPP's indefinite-lived intangible assets by using the relief from royalty method, as described above.

We then compared the estimated fair values to their carrying amounts.

The impairment tests resulted in a pre-tax, non-cash impairment charge of $ 175,000 to the gross carrying amount of our CPP trademarks.

Indicators of impairment were not present for the HBP indefinite-lived intangibles during 2022.

For the year ended September 30, 2024, the impairment test did not result in impairment charges to CPP's gross carrying amount of intangible assets;

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

4 unchanged sentences

Customer relationships & other (1)

$ 450,784 $ 134,296 17 $ 443,164 $ 113,057

Unpatented technology 17,350 6,859 10 15,504 3,815

1 unchanged sentence

Trademarks (1)

291,803 — 293,447 —

Total intangible assets $ 759,937 $ 141,155 $ 752,115 $ 116,872

In 2023, the gross carrying amount of intangible assets was impacted by $ 5,236 related to foreign currency translation.

____________________________

(1) On October 1, 2023, the Company reclassified certain indefinite-lived trademark intangible assets, with a combined carrying value of $ 4,100 , to definite-lived intangible assets.

The change resulted from the anticipated future life of these trademarks.

We commenced amortizing these assets on a straight-line basis over a five -year useful life .

In 2024, the gross carrying amount of intangible assets was impacted by acquired intangibles from the Pope acquisition and $ 5,022 related to foreign currency translation.

Amortization expense for intangible assets subject to amortization was $ 22,803 , $ 22,389 and $ 18,215 in 2024, 2023, and 2022, respectively.

5 unchanged sentences

thereafter - $ 215,843 .

GRIFFON CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

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

NOTE 8 — DISCONTINUED OPERATIONS

6 unchanged sentences

At the same time, the results of all discontinued operations , less applicable income taxes (benefit), shall be reported as components of net income (loss) separate from the net income (loss) of continuing operations.

GRIFFON CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

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

Defense Electronics (DE or Telephonics)

The following amounts related to Telephonics have been segregated from Griffon's continuing operations and are reported as discontinued operations:

For the year ended September 30, 2022, t he following amounts related to Telephonics have been segregated from Griffon's continuing operations and are reported as discontinued operations:

For the Year Ended September 30,

12 unchanged sentences

Income from discontinued operations $ 96,157

Depreciation and amortization was excluded from the current year results since DE was classified as a discontinued operation and, accordingly, the Company ceased depreciation and amortization in accordance with discontinued operations accounting guidelines.

For the year ended September 30, 2022, depreciation and amortization was excluded from the results since DE was classified as a discontinued operation and, accordingly, the Company ceased depreciation and amortization in accordance with discontinued operations accounting guidelines.

Depreciation and amortization for fiscal 2022 would have been approximately $ 7,442 through the date of disposition on June 27, 2022.

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

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

GRIFFON CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

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

At September 30,

8 unchanged sentences

Total liabilities of discontinued operations $ 7,768 $ 11,798

Accrued liabilities as of September 30, 2023 and 2022 includes the Company's obligation of $ 4,596 and $ 8,846 in connection with the sale of Telephonics primarily related to certain customary post-closing adjustments, primarily working capital and stay bonuses.

At September 30, 2023 and 2022, Griffon’s liabilities for Installations Services and other discontinued operations primarily related to insurance claims, income taxes, product liability, warranty and environmental reserves totaling $ 7,202 and $ 8,072 , respectively.

The increase in assets and liabilities for Installations Services and other discontinued operations was primarily associated with insurance claims receivable and payable.

GRIFFON CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

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

Except for revenue from the Telephonics business, as noted above, there was no reported revenue in 2023, 2022 and 2021 for Installations Services and other discontinued operations.

At September 30, 2024 and 2023, Griffon’s liabilities for discontinued operations primarily related to insurance claims, income taxes, product liability, warranty claims and environmental reserves totaling $ 7,768 and $ 11,798 , respectively.

The decrease in assets and liabilities was primarily associated with insurance claims receivable and payable.

Except for revenue from the Telephonics business for the year ended September 30, 2022, as noted above, there was no reported revenue in 2024, 2023 and 2022 for Installations Services and other discontinued operations.

NOTE 9 — ACCRUED LIABILITIES

13 unchanged sentences

NOTE 10 – RESTRUCTURING CHARGES

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 %, and its headcount by approximately 600 .

The affected U.S.

locations will include Camp Hill and Harrisburg, PA;

Grantsville, MD;

Fairfield, IA;

and four wood mills.

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

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

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

On April 28, 2022, Griffon announced a reduced scope and accelerated timeline for the initiative, which was completed in fiscal 2022.

The cost to implement this new business platform included one-time charges of approximately $ 51,869 and capital investments of approximately $ 13,000 , net of future proceeds from the sale of exited facilities.

Total cumulative charges of $ 51,869 consisted of cash charges totaling $ 35,691 and non-cash, asset-related charges totaling $ 16,178 ;

the cash charges included $ 12,934 for one-time termination benefits and other personnel-related costs and $ 22,757 for facility exit costs.

As a result of these transactions, headcount was reduced by approximately 420 .

In the year ended September 30, 2023, CPP incurred pre-tax restructuring and related exit costs approximating $ 92,468 .

Cash charges totaled $ 33,536 and non-cash, asset-related charges totaled $ 58,932 ;

the cash charges included $ 16,772 for one-time termination benefits and other personnel related costs and $ 16,764 for facility exit costs.

Non-cash charges included a $ 21,832

Griffon announced in May 2023 that CPP was expanding its global sourcing strategy to include long handled tools, material handling, and wood storage and organization product lines for the U.S.

This initiative was successfully completed as of September 30, 2024, ahead of the previously announced date of December 31, 2024.

As a result of this global sourcing expansion initiative, manufacturing operations have concluded at four manufacturing sites and four wood mills, resulting in a total facility footprint reduction of approximately 1.2 million square feet, or approximately 15 % of CPP's square footage, and a headcount reduction of approximately 600 .

The closed locations, which have a total book value of $ 14,532 , have met the held for sale criteria and have been classified as such on our Consolidated Balance Sheets as of September 30, 2024.

The adoption of an asset-light business model for these U.S.

products has positioned CPP to better serve customers with a more flexible and cost-effective sourcing model that leverages supplier relationships around the world, and improved its competitive positioning.

GRIFFON CORPORATION

1 unchanged sentence

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

impairment charge related to certain fixed assets at several manufacturing locations and $ 37,100 to adjust inventory to net realizable value.

Implementation of this strategy over the duration of the project resulted in charges of $ 133,777 , which included $ 51,082 of cash charges for employee retention and severance, operational transition, and facility and lease exit costs, and $ 82,695 of non-cash charges primarily related to asset write-downs.

In addition, there were $ 2,678 of capital investments to effectuate the project.

This excludes cash proceeds from the sale of real estate and equipment, which through September 30, 2024 were $ 13,271 , and excludes future proceeds from the sale of remaining real estate and equipment.

In the year ended September 30, 2024, CPP incurred pre-tax restructuring and related exit costs approximating $ 41,309 .

1 unchanged sentence

the cash charges included $ 5,856 for one-time termination benefits and other personnel related costs and $ 11,690 for facility exit costs.

Non-cash charges included a $ 3,805 of inventory that have no recoverable value and $ 1,026 primarily related to disposal of fixed assets at several manufacturing locations.

Non-cash charges related to $ 23,763 recorded to adjust inventory to net realizable value.

In the year ended September 30, 2023, CPP incurred pre-tax restructuring and related exit costs approximating $ 92,468 .

Cash charges totaled $ 33,536 and non-cash, asset-related charges totaled $ 58,932 ;

the cash charges included $ 3,190 for one-time termination benefits and other personnel-related costs and $ 11,573 for facility and lease exit costs primarily driven by the consolidation of distribution facilities and system optimization.

Non-cash charges of $ 6,655 predominantly related to inventory of $ 4,158 that have no recoverable value, and a $ 1,882 impairment charge related to machinery and equipment that have no recoverable value at one of the Company's owned manufacturing locations.

the cash charges included $ 16,772 for one-time termination benefits and other personnel related costs and $ 16,764 for facility exit costs.

Non-cash charges included a $ 21,832 impairment charge related to certain fixed assets at several manufacturing locations and $ 37,100 to adjust inventory to net realizable value.

In the year ended September 30, 2022, CPP incurred pre-tax restructuring and related exit costs approximating $ 16,782 .

Cash charges totaled $ 11,951 and non-cash, asset-related charges totaled $ 4,831 ;

the cash charges included $ 4,124 for one-time termination benefits and other personnel-related costs and $ 7,827 for facility exit costs.

Non-cash charges included a $ 3,805 of inventory that have no recoverable value and $ 1,026 primarily related to disposal of fixed assets at several manufacturing locations.

These restructuring charges related to the development of CPP's next-generation business platform, which was completed in fiscal 2022.

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

For the Year Ended September 30,

2024 2023 2022

Cost of goods and services $ 35,806 $ 82,028 $ 7,964

2 unchanged sentences

For the Year Ended September 30,

2024 2023 2022

Personnel related costs $ 5,856 $ 16,772 $ 4,124

40 unchanged sentences

Actual warranty costs incurred ( 30,984 ) ( 17,306 )

Other warranty liabilities assumed from acquisitions — 6,353

Balance, end of period $ 13,050 $ 20,781

23 unchanged sentences

Revolver due 2028 (b) 50,445 — ( 3,606 ) 46,839 Variable

Finance lease - real estate (c) 13,091 — — 13,091 Variable

lines of credit (d) — — ( 3 ) ( 3 ) Variable

term and mortgage loans (d) 12,090 — ( 27 ) 12,063 Variable

Other debt (e) 1,592 — ( 11 ) 1,581 Variable

2 unchanged sentences

Long-term debt $ 1,480,187 $ ( 704 ) $ ( 19,579 ) $ 1,459,904

GRIFFON CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

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

Interest expense consists of the following for 2024, 2023 and 2022.

7 unchanged sentences

Revolver due 2028 (b) Variable 8,018 — 746 8,764

Finance lease - real estate (c) 5.60 % 680 — — 680

lines of credit (d) Variable 43 — 15 58

2 unchanged sentences

Totals $ 99,884 $ 116 $ 4,086 $ 104,086

GRIFFON CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

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

Year Ended September 30, 2023

8 unchanged sentences

lines of credit (d) Variable 630 — 42 672

term and mortgage loans (d) Variable 610 — 53 663

Other debt (e) Variable 392 — 2 394

7 unchanged sentences

Senior notes due 2028 (a) 5.95 % $ 57,105 $ ( 48 ) $ 2,056 $ 59,113

Term Loan B due 2029 (b) 4.14 % $ 18,116 $ 135 $ 1,068 $ 19,319

Revolver due 2028 (b) Variable 3,762 — 491 4,253

5 unchanged sentences

Totals $ 80,604 $ 87 $ 3,688 $ 84,379

GRIFFON CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

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

Minimum payments under debt agreements for the next five years are as follows:

1 unchanged sentence

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

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

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

In connection with the issuance and exchange of the 2028 Senior Notes, Griffon capitalized $ 16,448 of underwriting fees and other expenses incurred, which is being amortized over the term of such notes.

7 unchanged sentences

At September 30, 2024, $ 6,900 of underwriting fees and other expenses incurred remained to be amortized.

(b) On August 1, 2023, Griffon amended and restated its revolving 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.

GRIFFON CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

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

(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 September 30, 2024, the Term Loan B outstanding balance was $ 457,000 .

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 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 September 30, 2024, unamortized costs of $ 5,420 related to the existing and new Term Loan B facility lenders will continue to be amortized over the term of the loan.

The Term Loan B bears interest at the Term SOFR rate plus a spread of 2.00 % ( 6.85 % as of September 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, and a final balloon payment due at maturity.

Term Loan B borrowings may generally be repaid without penalty, subject to a prepayment premium of 1 % in connection with the above repricing transaction with respect to any prepayments within the six months following the closing date of June 26, 2024.

Once repaid, Term Loan B borrowings may not be reborrowed.

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 that secures borrowings under the Revolver, on an equal and ratable basis.

The fair value of the Term Loan B facility approximated $ 457,571 on September 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 from $ 100,000 to $ 125,000 and increasing the customary accordion feature from a minimum of $ 375,000 to a minimum of $ 500,000 .

Additionally, the Revolver includes a multi-currency sub-facility of $ 200,000 .

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 % ( 7.42 % at September 30, 2023), SONIA loans accrue interest at SONIA Base Rate plus a credit adjustment spread and a margin of 2.00 % ( 7.22 % at September 30, 2023) and base rate loans accrue interest at prime rate plus a margin of 1.00 % ( 9.50 % at September 30, 2023).

At September 30, 2023, under the Credit Agreement, there were $ 50,445 in outstanding borrowings;

Griffon's SOFR loans accrue interest at Term SOFR plus a credit adjustment spread and a margin of 2.00 % ( 6.95 % at September 30, 2024);

SONIA loans accrue interest at SONIA Base Rate plus a credit adjustment spread and a margin of 2.00 % ( 6.98 % at September 30, 2024);

and base rate loans accrue interest at prime rate plus a margin of 1.00 % ( 9.00 % at September 30, 2024).

At September 30, 2024, under the Credit Agreement, there were $ 107,500 in outstanding borrowings on the Revolver;

outstanding standby letters of credit were $ 13,190 ;

and $ 379,310 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, and replaced the London Interbank Offer Rate (LIBOR) with SOFR.

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 % ( 7.79 % as of September 30, 2023).

The Original Issue Discount for the Term Loan B was 99.75 %.

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 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, of the aggregate principal amount of the Term Loan B, which permanently reduced the outstanding balance, and recognized a $ 437 and $ 6,296 charge 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.

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

Term Loan B borrowings are secured by the same collateral as the Revolver.

The fair value of the Term Loan B facility approximated $ 461,843 on September 30, 2023 based upon quoted market prices (level 1 inputs).

GRIFFON CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

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

September 30, 2023, $ 7,039 of underwriting fees and other expenses incurred, remained to be amortized.

At September 30, 2023, $ 463,000 of the Term Loan B was outstanding.

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

GRIFFON CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

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

The Ocala lease had a maturity date in 2025 and bore interest at a fixed rate of approximately 5.6 %.

5 unchanged sentences

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

(“Garant”), a Griffon wholly owned subsidiary, entered into a CAD 15,000 ($ 11,117 as of September 30, 2023) revolving credit facility.

Effective in December 2022, the facility was amended to replace LIBOR (USD) with the Canadian Dollar Offer Rate ("CDOR").

The facility accrues interest at CDOR or the Bankers Acceptance Rate (CDN) plus 1.3 % per annum ( 6.69 % using CDOR and 6.43 % using Bankers Acceptance Rate CDN as of September 30, 2023).

(“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 ("CDOR") with the Canadian Overnight Repo Rate Average ("CORRA").

The facility accrues interest at CORRA plus 1.3 % per annum ( 5.46 % as of September 30, 2024).

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

1 unchanged sentence

At September 30, 2024, there were no outstanding borrowings under the revolving credit facility with CAD 15,000 ($ 11,135 as of September 30, 2024) 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 ($ 19,188 as of September 30, 2023).

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 ( 5.33 % at September 30, 2023).

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 2024, but is renewable upon mutual agreement with the lender.

The receivable purchase facility accrues interest at Bank Bill Swap Rate plus 1.25 % per annum ( 5.55 % at September 30, 2024).

At September 30, 2024, there was no balance outstanding under the receivable purchase facility with AUD $ 30,000 ($ 20,619 as of September 30, 2024) available.

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

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

(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 September 30, 2024, Griffon and its subsidiaries were in compliance with the terms and covenants of its credit and loan agreements.

GRIFFON CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

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

NOTE 13 – EMPLOYEE BENEFIT PLANS

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The post-retirement benefit obligation was $ 1,670 and $ 1,679 as of September 30, 2024 and 2023.

The accumulated other comprehensive income (loss) for these plans was $ 420 and $ 399 as of September 30, 2023 and 2022, respectively, and the 2023, 2022 and 2021 benefit expense was $ 67 , $ 47 and $ 35 respectively.

The accumulated other comprehensive income for these plans was $ 306 and $ 420 as of September 30, 2024 and 2023, respectively, and the 2024, 2023 and 2022 expense was $ 56 , $ 67 and $ 47 respectively.

It is the Company’s practice to fund these benefits as incurred.

5 unchanged sentences

Financial objectives are established in conjunction with a review of current and projected plan financial requirements.

The fair values of a majority of the plan assets were determined by the plans’ trustee using quoted market prices for identical instruments (level 1 inputs) as of September 30, 2023 and 2022.

The fair values of a majority of the plan assets were determined by the plans’ trustee using quoted market prices for identical instruments (level 1 inputs) as of

GRIFFON CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

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

September 30, 2024 and 2023.

The fair value of various other investments was determined by the plans' trustees using direct observable market corroborated inputs, including quoted market prices for similar assets (level 2 inputs).

1 unchanged sentence

The Clopay AMES Pension Plan, the Hunter Fan Pension Plan and the AMES supplemental executive retirement plan are frozen to new entrants and participants in the plans no longer accrue benefits.

The Hunter Fan Pension 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.

The Company’s non-service cost components of net periodic benefit plan cost was an expense (benefit) of $ 137 , $ 866 and $( 4,256 ) during 2024, 2023, and 2022 respectively.

6 unchanged sentences

A 10 % change in the discount rate or return on assets would not have a material effect on the financial statements of Griffon.

GRIFFON CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

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

Net periodic costs (benefits) were as follows:

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Amortization of:

Prior service costs — — — — — —

Actuarial loss 2,250 3,314 2,818 505 463 561

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Benefit obligation at beginning of fiscal year $ 139,224 $ 149,021 $ 10,882 $ 11,922

Business acquisition — 21,839 — —

Interest cost 7,050 6,814 504 488

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Fair value of plan assets at beginning of fiscal year 146,997 144,091 — —

Business acquisition — 22,288 — —

Actual return on plan assets 21,933 12,232 — —

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Net actuarial losses 25,314 28,279 6,700 5,919

Prior service cost — — — —

Deferred taxes ( 5,316 ) ( 5,939 ) ( 3,037 ) ( 2,873 )

6 unchanged sentences

Fair value of plan assets 158,705 146,997 — —

Actuarial gains as of September 30, 2023 and 2022 were primarily the result of the increase in the discount rate.

Actuarial losses as of September 30, 2024 were primarily due to the decrease in the discount rate.

Actuarial gains as of September 30, 2023 were primarily the result of the increase in the discount rate.

The weighted-average assumptions used in determining the benefit obligations were as follows:

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2029 11,813 1,184

2028 through 2031 56,659 4,231

2030-2034 55,522 3,801

During 2025, Griffon is not required to and does not expect to contribute to the Defined Benefit plans and expects to contribute $ 1,823 to Supplemental Benefits that will be funded from the general assets of Griffon.

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Accrued income and plan receivables 523

Fully benefit-responsive investment contract 2,699

Total $ 158,705

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Change in tax contingency reserves ( 0.5 ) % ( 0.4 ) % ( 0.1 ) %

Impact of foreign rate change on deferred tax balances — % — % 2.8 %

Tax Reform-Repatriation of Foreign Earnings and GILTI ( 0.5 ) % 0.5 % 0.2 %

40 unchanged sentences

Other assets $ 495 $ 617

Assets held for sale 947 —

Other liabilities ( 103,194 ) ( 97,440 )

1 unchanged sentence

Net deferred liability $ ( 100,591 ) $ ( 95,691 )

In 2023, the net increase in the valuation allowance of $ 4,502 is the result of a determination that certain state and foreign net operating losses will not be realized.

In 2022, the increase in the valuation allowance of $ 3,065 is the result of a determination that certain state and foreign net operating losses will not be realized, partially offset by tax rate changes impacting the value of the deferred tax assets and the reversal of a valuation allowance related to certain state credits for the Telephonics business, which was sold on June 27, 2022.

In 2024 and 2023, the net increases in the valuation allowance of $ 8,997 and $ 4,502 , respectively are the result of a determination that certain state and foreign net operating losses will not be realized.

Prior to fiscal year 2023, Griffon did not provide deferred U.S.

1 unchanged sentence

subsidiaries as such earnings were intended to be reinvested indefinitely.

At September 30, 2023 , Griffon has a policy election to indefinitely reinvest the undistributed earnings of certain non-U.S.

At September 30, 2023, Griffon made a policy election to indefinitely reinvest the undistributed earnings of certain non-U.S.

subsidiaries.

6 unchanged sentences

earnings that are not indefinitely reinvested.

The Company has not

The Company has not provided deferred taxes on any other outside basis differences in its investments in the non-U.S.

subsidiaries as these other outside basis differences are currently considered indefinitely reinvested.

The Company generates substantial cash flow in the

GRIFFON CORPORATION

1 unchanged sentence

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

provided deferred taxes on any other outside basis differences in its investments in the non-U.S.

subsidiaries as these other outside basis differences are currently considered indefinitely reinvested.

The Company generates substantial cash flow in the U.S.

and does not have a current need for the cash to be returned to the U.S.

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tax purposes.

At September 30, 2022, Griffon had $ 44,521 loss carryforwards for U.S.

At September 30, 2023, Griffon had no loss carryforwards for U.S.

tax purposes and $ 27,585 for non-U.S.

tax purposes.

The U.S loss carryforwards can be carried forward indefinitely but are subject to certain limitations on annual usage.

loss carryforwards expire in varying amounts beginning in 2027 to indefinite carryforward.

At September 30, 2024 and 2023, Griffon had state and local loss carryforwards of $ 228,485 and $ 176,343 , respectively, which expire in varying amounts through 2043.

At September 30, 2023 and 2022, Griffon had federal tax credit carryforwards of $ 5,933 and $ 5,933 , respectively, which expire in varying amounts through 2035.

At September 30, 2023 and 2022, Griffon had no capital loss carryovers for U.S.

tax purposes.

Capital loss carryovers are available for three-year carryback or five-year carryforward periods.

At September 30, 2024 and 2023, Griffon had federal tax credit carryforwards of $ 5,933 in both years, which expire in varying amounts through 2035.

We believe it is more likely than not that the benefit from certain federal, state, and non-U.S.

17 unchanged sentences

Additions based on tax positions related to prior years

Reductions based on tax positions related to prior years ( 16 )

Lapse of Statutes ( 740 )

4 unchanged sentences

Lapse of Statutes ( 140 )

Settlements —

Balance at September 30, 2024 $ 3,606

(1) Relates to unrecognized tax benefits assumed with the acquisition of Hunter.

GRIFFON CORPORATION

4 unchanged sentences

At September 30, 2024 and 2023, the combined amount of accrued interest and penalties related to tax positions taken or to be taken on Griffon’s tax returns and recorded as part of the reserves for uncertain tax positions was $ 310 and $ 651 , respectively.

The Company may experience a decrease of $ 1,679 in unrecognized tax benefits over the next twelve months due to the potential resolution of unrecognized tax benefits involving several taxing jurisdictions accepting previously filed amended returns or lapse of the applicable statute.

During the year ended September 30, 2024, the Company incurred a reduction in unrecognized tax benefits primarily due to the acceptance of previously filed amended returns by various jurisdictions, along with a reduction in state tax rates.

Griffon cannot reasonably estimate the extent to which other existing liabilities for uncertain tax positions may increase or decrease within the next twelve months as a result of the progression of ongoing tax audits or other events.

Griffon believes that it has adequately provided for all open tax years by tax jurisdiction.

On August 16, 2022, the U.S.

Government enacted the Inflation Reduction Act ("IRA") into law.

Included in the IRA was a provision to implement a 15% corporate alternative minimum tax ("CAMT") on “adjusted financial statement income” for applicable corporations and a 1% excise tax on repurchases of stock.

The stock buyback excise tax went into effect January 1, 2023 and Griffon records the excise tax on its stock repurchases, net of reissuances, against treasury stock.

The CAMT is effective for tax years beginning after December 31, 2022.

Based on current levels of income we do not expect to be subject to the CAMT.

In August 2022, the U.S.

Government enacted the Inflation Reduction Act of 2022 ("IRA").

Included in the IRA was a provision to implement a 15% corporate alternative minimum tax ("CAMT") on large corporations effective beginning with Griffon’s 2024 fiscal year.

Griffon is currently not subject to the CAMT.

The Organization for Economic Co-operation and Development (“OECD”) released the Global Anti-base Erosion Model Rules for Pillar Two (“Pillar Two”) in December 2021, which defined a 15% global minimum tax.

Australia, Canada, U.K.

and other countries have enacted or are considering changes in their tax laws and regulations based on Pillar Two, some of which become effective for the Company in 2025.

The Company will continue to evaluate the impact of these proposed and enacted legislative changes as guidance becomes available.

The Company does not expect Pillar Two to have a material impact on the financial statements.

NOTE 15 – STOCKHOLDERS’ EQUITY AND EQUITY COMPENSATION

During 2023, 2022 and 2021, the Company declared and paid, in quarterly increments, cash dividends totaling $ 0.45 per share (two quarterly dividends of $ 0.10 and two quarterly dividends of $ 0.125 ), $ 0.36 per share and $ 0.32 per share, respectively.

Furthermore, 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.

During 2024, 2023 and 2022, the Company declared and paid, in quarterly increments, cash dividends totaling $ 0.60 per share, $ 0.45 per share and $ 0.36 per share, respectively.

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.

On June 27, 2022, the Board of Directors declared a special cash dividend of $ 2.00 per share, paid on July 20, 2022.

9 unchanged sentences

1 to the Original Incentive Plan pursuant to which, among other things, 1,000,000 shares were added to the Original Incentive Plan;

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

on January 30, 2020, shareholders approved Amendment No.

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

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, which 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.

1 unchanged sentence

As of September 30, 2024, 2,377,532 shares were 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 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 cost related to stock-based awards with graded vesting, generally over a

GRIFFON CORPORATION

1 unchanged sentence

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

period of three to four years , is recognized using the straight-line attribution method and recorded within Selling, general and administrative expenses.

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

The Company recognizes forfeitures as they occur.

Compensation expense for restricted stock granted to four senior executives is calculated as the target 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.

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

For the Years Ended September 30,

4 unchanged sentences

________________________

(1) During the year ended September 30, 2023 and 2022, special dividend ESOP charges included in compensation expense were $ 15,494 and $ 10,538 , respectively.

(1) During the years ended September 30, 2023 and 2022, special dividend ESOP charges included in compensation expense were $ 15,494 and $ 10,538 , respectively.

A summary of restricted stock activity, inclusive of restricted stock units, for 2024 is as follows:

10 unchanged sentences

During 2024, Griffon granted 561,326 shares of restricted stock and restricted stock units to its employees.

This included 249,480 shares of restricted stock and 11,901 restricted stock units granted to forty-four executives and key employees, subject to certain performance conditions, with a vesting period of 36 months with a total fair value of $ 8,385 , or a weighted average fair value of $ 33.61 per share.

This also included 205,296 shares of restricted stock granted to two senior executives with a vesting period of thirty-six 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.

This included 166,272 shares of restricted stock and 7,832 restricted stock units granted to forty-three executives and key employees, subject to certain performance conditions, with a vesting period of 36 months with a total fair value of $ 8,225 , or a weighted average fair value of $ 47.24 per share.

This also included 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 64,539 to 387,222 , with the target number of shares being 129,074 .

2 unchanged sentences

During the year ended September 30, 2024, 570,269 shares granted were issued out of treasury stock.

On November 14, 2023, Griffon granted 174,104 shares of restricted stock and restricted stock units to 43 executives and key employees, subject to certain performance conditions, with a vesting period of thirty-six months , with a total fair value of $ 8,225 , or a weighted average fair value of $ 47.24 per share.

GRIFFON CORPORATION

1 unchanged sentence

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

On November 12, 2024, Griffon granted 142,911 shares of restricted stock and restricted stock units to 43 executives and key employees, subject to certain performance conditions, with a vesting period of thirty-six months , with a total fair value of $ 9,735 , or a weighted average fair value of $ 68.12 per share.

In addition, Griffon also granted 436,947 shares of restricted stock to four senior executives with a vesting period of thirty-six 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 72,827 to a maximum of 436,947 , with the target number of shares being 145,649 .

The total estimated fair value of these restricted shares, assuming achievement of the performance conditions at target, is $ 12,372 , or a weighted average fair value of $ 84.95 per share.

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 authorization of $ 57,955 .

Also, on November 15, 2023, Griffon announced that the Board of Directors approved an additional increase of $ 200,000 to its share repurchase authorization.

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.

During the year ended September 30, 2024, Griffon purchased 4,771,959 shares of common stock under these repurchase programs, for a total of $ 274,490 , or $ 57.52 per share, excluding excise taxes.

As of September 30, 2023, $ 107,183 remains under these Board authorized repurchase programs.

In connection with the share repurchases, excise taxes totaling $ 1,301 were accrued as of September 30, 2023.

The share repurchases during the year ended September 30, 2024 include the repurchase of 1,500,000 shares of common stock 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 September 30, 2024, $ 32,693 remained available for the purchase of common stock under these Board authorized repurchase programs.

Subsequent to September 30, 2024 and through November 12, 2024, Griffon purchased 481,379 shares of common stock for a total of $ 32,693 , or $ 67.91 per share under these Board authorized repurchase programs.

On November 13, 2024, Griffon announced that the Board of Directors approved an additional increase of $ 400,000 to its share repurchase program which, prior to such increase, had exhausted its availability.

On September 5, 2023, Griffon repurchased 400,000 shares of its common stock, par value $ 0.25 per share, beneficially owned by two separately managed accounts of which Voss Capital, LLC is the investment manager (the “Selling Shareholders”), in a private transaction to facilitate redemptions by investors in the Selling Shareholders.

1 unchanged sentence

The Selling Shareholders are affiliates of Voss Capital, LLC.

Cocke, the Founder, Chief Investment Officer and Managing Member of Voss Capital, LLC, is a member of the Board of Directors of the Company.

Cocke, the Founder, Chief Investment Officer and Managing Member of Voss Capital, LLC, was formerly a member of the Board of Directors of the Company.

These shares are included in the total shares purchased in the previous paragraph.

Subsequent to September 30, 2023 and through November 14, 2023, Griffon purchased 1,127,062 shares of common stock for a total of $ 44,980 , or $ 39.91 per share under these Board authorized repurchase programs.

On November 15, 2023, Griffon announced a $ 200,000 increase to its share repurchase program which on November 15, 2023 had $ 262,203 available given effect to all repurchases through November 14, 2023.

During the year ended September 30, 2024, 595,464 shares, with a market value of $ 34,330 , or $ 57.65 per share, were withheld to settle employee taxes due upon the vesting of restricted stock, and were added to treasury stock.

Furthermore, during 2023, an additional 3,066 shares, with a market value of $ 108 , or $ 35.31 per share, were withheld from common stock issued upon the vesting of restricted stock units to settle employee taxes due upon vesting.

During the year ended September 30, 2024, we accrued $ 2,772 in connection with the share repurchases described above, which was partially offset by the reversal of $ 462 of excise taxes to adjust for a benefit related to employee vesting and a $ 510 net benefit on ESOP contributions.

As of September 30, 2024, $ 3,101 was accrued for excise taxes related to employee share repurchases.

NOTE 16 – COMMITMENTS AND CONTINGENT LIABILITIES

4 unchanged sentences

Amounts purchased under such commitments were $ 159,362 , $ 184,422 and $ 255,661 for the years ended September 30, 2024, 2023 and 2022, respectively.

Aggregate future minimum purchase obligations at September 30, 2023 are $ 160,539 in 2024 and $ 3,622 in 2025.

There were no purchase obligations after 2025.

Aggregate future minimum purchase obligations at September 30, 2024 are $ 195,227 in 2025, $ 2,309 in 2026, $ 304 in 2027, $ 165 in 2028, $ 164 in 2029 and $ 468 thereafter.

GRIFFON CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

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

Legal and environmental

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 cit 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.

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”).

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.

2 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 2024.

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

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

1 unchanged sentence

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(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.

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.

3 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.

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

23 unchanged sentences

NOTE 18 – RELATED PARTIES

On February 20, 2024, Griffon entered into a stock purchase and cooperation agreement to repurchase, and repurchased, 1,500,000 shares of its common stock, par value $ 0.25 per share, beneficially owned by four separately managed accounts of which Voss Capital, LLC is the investment manager (the "Selling Shareholders"), in a private transaction.

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

The Selling Shareholders are affiliates of Voss Capital, LLC.

Cocke, the Founder, Chief Investment Officer and Managing Member of Voss Capital, LLC, was formerly a member of the Board of Directors of the Company.

Pursuant to the stock purchase and cooperation agreement, Mr.

Cocke resigned as a member of the Board on February 20, 2024.

On September 5, 2023 Griffon entered into a stock purchase agreement to repurchase 400,000 shares of its common stock, par value $ 0.25 per share, beneficially owned by two separately managed accounts of which Voss Capital, LLC is the investment manager (the “Selling Shareholders”), in a private transaction to facilitate redemptions by investors in the Selling Shareholders.

1 unchanged sentence

The Selling Shareholders are affiliates of Voss Capital, LLC.

Cocke, the Founder, Chief Investment Officer and Managing Member of Voss Capital, LLC, is a member of the Board of Directors of the Company.

Cocke, the Founder, Chief Investment Officer and Managing Member of Voss Capital, LLC, was formerly a member of the Board of Directors of the Company.

GRIFFON CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

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

NOTE 19 — REPORTABLE SEGMENTS

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CPP sells products globally through a portfolio of leading brands including AMES, since 1774, Hunter, since 1886, True Temper, and ClosetMaid.

GRIFFON CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

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

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

8 unchanged sentences

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

GRIFFON CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

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

For the Years Ended September 30,

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Special dividend ESOP charges — ( 15,494 ) ( 10,538 )

Gain on sale of buildings 12,655 — —

Gain (loss) on sale of buildings ( 61 ) 12,655 —

Proxy expenses — ( 2,685 ) ( 6,952 )

1 unchanged sentence

Income (loss) before taxes from continuing operations $ 296,650 $ 112,682 $ ( 270,879 )

GRIFFON CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

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

For the Years Ended September 30,

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(2) During the year ended September 30, 2023, CPP's capital expenditures included approximately $ 23,207 in connection with the purchase of CPP's Ocala, Florida manufacturing facility.

This above table excludes proceeds from the sale of real estate of approximately $ 8,900 .

(3) During the years ended September, 30, 2024 and 2023, CPP capital expenditures excludes proceeds from the sale of real estate and equipment of approximately $ 13,271 and $ 8,900 , respectively.

(4) During the year ended September 30, 2023, Corporate's capital expenditures exclude proceeds from the sale of real estate of approximately $ 11,800 .

GRIFFON CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

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

At September 30, 2024 At September 30, 2023

2 unchanged sentences

Consumer and Professional Products (1)

1,495,489 1,579,588

Total segment assets 2,233,481 2,283,249

3 unchanged sentences

Consolidated total $ 2,370,954 $ 2,418,879

GRIFFON CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

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

__________________________

(1) In connection with the expansion of CPP's global sourcing strategy, certain owned manufacturing locations which concluded operations have met the criteria to be classified as held for sale as of September 30, 2024.

The aggregate net book value of these properties as of September 30, 2024 totaled $ 14,532 .

Disaggregation of Revenue

1 unchanged sentence

For the Years Ended September 30,

2024 2023 2022

Residential repair and remodel $ 769,691 $ 757,088 $ 736,525

18 unchanged sentences

Total Revenue $ 1,588,625 $ 1,034,895 $ 2,623,520

GRIFFON CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

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

For the Year Ended September 30, 2023

6 unchanged sentences

Total Revenue $ 1,588,505 $ 1,096,678 $ 2,685,183

GRIFFON CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

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

For the Year Ended September 30, 2022

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NOTE 20 – OTHER INCOME (EXPENSE)

For the year ended September 30, 2023, 2022 and 2021, Other income (expense) from continuing operations of $ 2,928 , $ 6,881 and $ 2,107 , respectively, includes $ 302 , $ 305 and $( 81 ), respectively, of net currency exchange transaction gains (losses) from receivables and payables held in non-functional currencies, $ 469 , $( 225 ) and $ 283 , respectively, of net gains or (losses) on investments, and $( 866 ), $ 4,256 and $ 907 , respectively, of net periodic benefit plan income (expense).

Other income (expense) also includes rental income of $ 212 , $ 689 and $ 624 in 2023, 2022 and 2021, respectively.

Additionally, it includes royalty income of 2,104 and $ 2,250 for the years ended September 30, 2023 and 2022, respectively.

For the years ended September 30, 2024, 2023 and 2022, Other income (expense) from continuing operations of $ 1,766 , $ 2,928 and $ 6,881 , respectively, includes ($ 333 ), $ 302 and $ 305 , respectively, of net currency exchange transaction gains (losses) from receivables and payables held in non-functional currencies, $ 148 , $ 469 and $( 225 ), respectively, of net gains or (losses) on investments, and $( 137 ), $( 866 ) and $ 4,256 , respectively, of net periodic benefit plan income (expense).

Other income (expense) also includes rental income of $ 0 , $ 212 and $ 689 and royalty income of $ 2,198 , $ 2,104 and $ 2,250 for the years ended September 30, 2024, 2023 and 2022, respectively.

NOTE 21 - OTHER COMPREHENSIVE INCOME (LOSS)

1 unchanged sentence

Years Ended September 30,

2024 2023 2022

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

3 unchanged sentences

Total other comprehensive income (loss) $ 12,528 $ ( 542 ) $ 11,986 $ 13,502 $ ( 774 ) $ 12,728 $ ( 36,504 ) $ ( 257 ) $ ( 36,761 )

GRIFFON CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

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

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

4 unchanged sentences

Total $ ( 58,024 ) $ ( 70,010 )

GRIFFON CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

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

Total comprehensive income (loss) were as follows:

16 unchanged sentences

The ROU assets and short and long-term liabilities associated with our Operating leases are shown as separate line items on our Consolidated Balance Sheets.

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

Finance leases are included in property, plant, and equipment, net, accrued liabilities, and other liabilities on our Consolidated Balance Sheets.

The Company's finance leases are immaterial.

11 unchanged sentences

For finance leases and impaired operating leases, the ROU asset is depreciated on a straight-line basis over the remaining lease term, along with recognition of interest expense associated with accretion of the lease liability.

For leases with a lease term of 12 months or less (a "Short-term" lease), any fixed lease payments are recognized on a straight-line basis over such term, and are not recognized on the Consolidated Balance Sheets.

Variable lease cost for both operating and finance leases, if any, is recognized as incurred.

Components of operating lease costs are as follows:

For leases with a lease term of

GRIFFON CORPORATION

1 unchanged sentence

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

12 months or less (a "Short-term" lease), any fixed lease payments are recognized on a straight-line basis over such term, and are not recognized on the Consolidated Balance Sheets.

Variable lease cost for both operating and finance leases, if any, is recognized as incurred.

Components of operating lease costs are as follows:

For the Year Ended September 30,

27 unchanged sentences

Property, plant and equipment, net (1)

$ 994 $ 13,696

Lease Liabilities:

6 unchanged sentences

As a result of exercising the purchase option, the Company no longer has any future lease obligations related to this real estate.

During the year ended September 30, 2022, the financing lease on the Troy, Ohio location expired.

The Troy lease bore interest at a rate of approximately 5.0 %, was secured by a mortgage on the real estate, which was guaranteed by Griffon, and had a one dollar buyout at the end of the lease.

Griffon exercised the one dollar buyout option in November 2021.

The remaining lease liability balance relates to finance equipment leases.

26 unchanged sentences

Subsequent to September 30, 2024 and through November 12, 2024, Griffon purchased 481,379 shares of its common stock for a total of $ 32,693 , or $ 67.91 per share under Board authorized share repurchase programs.

On November 13, 2024, Griffon announced a $ 400,000 increase to its share repurchase program which, prior to such increase, had exhausted its availability.

The total estimated fair value of these restricted shares, assuming achievement of the performance conditions at target, is $ 12,372 , or a weighted average fair value of $ 84.95 per share.

GRIFFON CORPORATION

5 unchanged sentences

FOR THE YEAR ENDED SEPTEMBER 30, 2024

Allowance for doubtful accounts

Allowance for credit losses

$ 11,264 $ 636 $ ( 1,325 ) $ 411 $ 10,986

3 unchanged sentences

FOR THE YEAR ENDED SEPTEMBER 30, 2023

Allowance for doubtful accounts

Allowance for credit losses

$ 12,137 $ 971 $ ( 1,186 ) $ ( 658 ) $ 11,264

Inventory valuation (2)

$ 22,875 $ 44,570 $ ( 11,692 ) $ ( 16 ) $ 55,737

Deferred tax valuation allowance $ 13,490 $ 4,502 $ — $ — $ 17,992

FOR THE YEAR ENDED SEPTEMBER 30, 2022

Allowance for doubtful accounts

Allowance for credit losses

$ 8,787 $ 1,172 $ ( 251 ) $ 2,429 $ 12,137

3 unchanged sentences

(1) For the year ended September 30, 2022, Other primarily consists of foreign currency and opening balances of reserves assumed from the Hunter acquisition.

See Note 6 for the detail on the Allowance for Doubtful Accounts.

(2) In connection with the Company's restructuring activities described in Note 10, Restructuring Charges, during the year ended September 30, 2023, CPP recorded an inventory impairment charge of $ 37,100 to adjust to net realizable value.

(2) In connection with the Company's restructuring activities described in Note 10, Restructuring Charges, during the years ended September 30, 2024 and 2023, CPP recorded inventory impairment charges of $ 23,763 and $ 37,100 , respectively, to adjust inventory to its net realizable value.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

1 unchanged sentence

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

What changed 10-K

Item 8. Financial Statements and Supplementary Data