What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-05-08 compared with 2025-02-05 · 142 added, 98 removed, 247 unchanged (49% of the section changed)

34 unchanged sentences

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

Revenue for the quarter ended December 31, 2024 was $632,371 compared to $643,153 in the prior year quarter, a decrease of $10,782 or 2%.

The decrease was primarily due to a 4 % decline in revenue at CPP, while HBP's revenue remained consistent with the prior year.

Revenue for the quarter ended March 31, 2025 was $611,746 compared to $672,880 in the prior year quarter, a decrease of $61,134 or 9%, due to the decreased revenue at HBP and CPP of 6% and 13%, respectively.

Net income was $56,762 or $1.21 per share, compared to $64,143, or $1.28 per share, in the prior year quarter.

The current year quarter results from operations included the following:

– Strategic review - retention and other of $1,199 ($898, net of tax, or $0.02 per share);

– Gain on sale of real estate of $183 ($136, net of tax, or $0.00 per share);

– Discrete and certain other tax provisions, net, of $75 or $0.00 per share.

The prior year quarter results from operations included the following:

– Restructuring charges of $2,401 ($1,769, net of tax, or $0.04 per share);

– Strategic review - retention and other of $2,676 ($1,997, net of tax, or $0.04 per share);

– Gain on sale of real estate of $11 ($9, net of tax, or $0.00 per share);

– Discrete and certain other tax benefits, net, of $390 or $0.01 per share.

The prior year quarter results from operations included the following:

Excluding these items from the respective quarterly results, net income would have been $57,599, or $1.23 per share in the three months ended March 31, 2025 compared to $67,510, or $1.35 per share, in the prior year quarter.

Revenue for the six months ended March 31, 2025 was $1,244,117 compared to $1,316,033 in the prior year period, a decrease of 5%, due to the decreased revenue at HBP and CPP of 3% and 9%, respectively.

Net income was $127,613 or $2.70 per share, compared to net income of $106,320, or $2.10 per share, in the prior year period.

The current year-to-date results from operations included the following:

– Strategic review - retention and other of $2,850 ($2,113, net of tax, or $0.04 per share);

– Gain on sale of real estate of $8,157 ($6,079, net of tax, or $0.13 per share);

– Discrete and certain other tax benefits, net, of $175 or $0.00 per share.

The prior year-to-date results from operations included the following:

– Restructuring charges of $14,801 ($10,982, net of tax, or $0.22 per share);

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– Discrete and certain other tax provisions, net, of $393 or $0.01 per share.

Excluding these items from the respective quarterly results, net income would have been $65,873, or $1.39 per share in the three months ended December 31, 2024 compared to $55,267, or $1.07 per share, in the prior year quarter.

Excluding these items from the respective periods, net income would have been $123,472, or $2.61 per share in the six months ended March 31, 2025, compared to $122,777, or $2.42 per share, in the prior year period.

Griffon evaluates performance based on adjusted net income and the related adjusted earnings per share, which are non-GAAP measures that exclude restructuring charges, non-cash impairment charges, loss from debt extinguishment, acquisition related expenses and discrete and certain other tax items, as well as other items that may affect comparability, as applicable.

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The following table provides a reconciliation of net income from operations to adjusted net income and earnings per share to adjusted earnings per share:

For the Three Months Ended December 31,

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

2025 2024 2025 2024

Net income $ 56,762 $ 64,143 $ 127,613 $ 106,320

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Restructuring charges (1)

— 2,401 — 14,801

Gain on sale of real estate (183) (11) (8,157) (558)

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Discrete and certain other tax (benefits) provisions, net (3)

75 (390) (175) 393

Adjusted net income $ 57,599 $ 67,510 $ 123,472 $ 122,777

2 unchanged sentences

Restructuring charges (1)

— 0.04 — 0.22

Gain on sale of real estate — — (0.13) (0.01)

1 unchanged sentence

Discrete and certain other tax (benefits) provisions, net (3)

— (0.01) — 0.01

Adjusted earnings per common share $ 1.23 $ 1.35 $ 2.61 $ 2.42

1 unchanged sentence

Due to rounding, the sum of earnings per common share and adjusting items, net of tax, may not equal adjusted earnings per common share.

(1) For the three months ended December 31, 2023, restructuring charges relate to the CPP global sourcing expansion, of which $11,646, is included in Cost of goods and services and $754 is included in SG&A in the Company's Condensed Consolidated Statement of Operations.

(1) For the three and six months ended March 31 2024, restructuring charges relate to the CPP global sourcing expansion, of which $1,334 and $12,980, are included in Cost of goods and services and $1,067 and $1,821 are included in SG&A in the Company's Condensed Consolidated Statement of Operations.

(2) The tax impact for the above reconciling adjustments from GAAP to non-GAAP Net income and EPS is determined by comparing the Company's tax provision, including the reconciling adjustments, to the tax provision excluding such adjustments.

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RESULTS OF OPERATIONS

Three Months ended December 31, 2024 and 2023

Three and Six Months ended March 31, 2025 and 2024

Griffon evaluates performance and allocates resources based on each segment adjusted EBITDA, a non-GAAP measure, which is defined as income before taxes, excluding interest income and expense, depreciation and amortization, unallocated amounts (mainly corporate overhead), strategic review charges, non-cash impairment charges, restructuring charges, and acquisition related expenses, as well as other items that may affect comparability, as applicable.

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Home and Building Products

For the Three Months Ended December 31,

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

2025 2024 2025 2024

Residential $ 205,893 $ 221,322 $ 434,427 $ 440,120

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Depreciation and amortization $ 4,334 $ 3,772 $ 8,609 $ 7,405

For the quarter ended December 31, 2024, HBP revenue remained consistent with the prior year quarter reflecting increased residential volume, offset by reduced commercial volume.

For the quarter ended December 31, 2024, adjusted EBITDA of $127,042 increased $2,323 or 2%, compared to $124,719 in the prior year quarter, resulting from reduced material costs, partially offset by increased labor and distribution costs.

For the quarter ended December 31, 2024, segment depreciation and amortization increased $642 compared with the prior year quarter due to new assets placed in service.

For the quarter ended March 31, 2025, HBP revenue decreased $23,814 or 6% compared to the prior year quarter, due to decreased volume of 7% primarily reflecting residential sales activity returning to normal seasonality, partially offset by favorable product mix of 1%.

For the quarter ended March 31, 2025, adjusted EBITDA of $109,434 decreased $19,490 or 15%, compared to $128,924 in the prior year quarter, resulting from decreased revenue noted above and the related volume impact on overhead absorption, and increased labor and distribution costs, partially offset by reduced material costs.

For the six months ended March 31, 2025, revenue decreased $24,204 or 3%, compared to the prior year period, due to decreased volume of 4%, partially offset by favorable product mix of 1%.

For the six months ended March 31, 2025, adjusted EBITDA of $236,476 decreased $17,167 or 7%, compared to $253,643 in the prior year period, resulting from decreased revenue noted above and the related volume impact on overhead absorption, and increased labor and distribution costs, partially offset by reduced material costs.

For the quarter and six months ended March 31, 2025, segment depreciation and amortization increased $562 and $1,204, respectively, compared to the prior year periods, due to new assets placed in service.

Consumer and Professional Products

For the Three Months Ended December 31,

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

2025 2024 2025 2024

United States $ 144,118 $ 183,142 $ 272,941 $ 334,314

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Depreciation and amortization $ 11,178 $ 11,171 $ 22,396 $ 22,228

For the quarter ended December 31, 2024, revenue decreased $10,392, or 4%, compared to the prior year quarter, primarily driven by decreased volume of 8% due to reduced consumer demand in North America and the United Kingdom, partially offset by organic growth in Australia.

For the quarter ended March 31, 2025, revenue decreased $37,320, or 13%, compared to the prior year quarter, primarily driven by decreased volume of 13% due to reduced consumer demand in North America and the United Kingdom ("UK"), partially offset by increased organic volume in Australia.

The Pope acquisition contributed 2%.

For the quarter ended December 31, 2024, adjusted EBITDA of $18,192 increased $12,653 compared to $5,539 in the prior year quarter, primarily due to the benefits from the global sourcing expansion initiative and increased revenue in Australia as noted above.

For the quarter ended December 31, 2024, segment depreciation and amortization increased $161 compared to the prior year period due to new assets placed in service.

Foreign currency had a 2% unfavorable impact on the current quarter revenue.

For the quarter ended March 31, 2025, adjusted EBITDA of $23,726 increased $3,605 compared to $20,121 in the prior year quarter, primarily due to the benefits from the global sourcing expansion initiative and increased volume and improved margin in Australia, partially offset by the unfavorable impact of the reduced North American and UK volume.

Foreign currency had a 1% unfavorable impact on the current quarter adjusted EBITDA.

For the six months ended March 31, 2025, revenue decreased $47,712 or 9% compared to the prior year period, driven by decreased volume of 11% due to reduced consumer demand in all geographic regions, except Australia, which benefited from increased organic volume.

The Pope acquisition contributed 3%.

Foreign currency had a 1% unfavorable impact on the current six month period revenue.

For the six months ended March 31, 2025, adjusted EBITDA of $41,918 increased $16,258 compared to $25,660 in the prior year period, primarily due to the benefits from the global sourcing expansion initiative, and increased volume and improved margin in Australia, partially offset by the unfavorable impact of the reduced North American and UK volume noted above.

Foreign currency had a 1% unfavorable impact on the current six month period adjusted EBITDA.

For the quarter and six months ended March 31, 2025, segment depreciation and amortization remained consistent with prior year periods.

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.

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Pope is expected to contribute approximately $25,000 in revenue in the first twelve months after the acquisition.

For the quarter ended December 31, 2024, unallocated amounts, excluding depreciation, consisted primarily of corporate overhead costs totaling $14,042, remained consistent with the prior year quarter of $13,907.

For the quarter ended March 31, 2025, unallocated amounts, excluding depreciation, consisted primarily of corporate overhead costs totaling $14,635 compared to $14,814 in the prior year quarter;

for the six months ended March 31, 2025, unallocated amounts totaled $28,677 compared to $28,721 in the prior year period.

The decrease in the current quarter compared to the prior year quarter was primarily due to a decrease in consulting costs.

The six month period ended March 31, 2025 remained consistent with the prior year period.

Strategic review

During the three months ended December 31, 2024 and 2023, we incurred strategic review expenses of $1,651 ($1,215, net of tax) and $4,658 ($3,500, net of tax), respectively, primarily for retention payments and other costs related to the strategic review process that concluded in April 2023.

During the three months ended March 31, 2025 and 2024, we incurred strategic review expenses of $1,199 ($898, net of tax) and $2,676 ($1,997, net of tax), respectively, and during the six months ended March 31, 2025 and 2024, we incurred strategic review expenses of $2,850 ($2,113, net of tax) and $7,334 ($5,497, net of tax), respectively, primarily for retention payments and other costs related to the strategic review process that concluded in April 2023.

Segment Depreciation and Amortization

For the three months ended December 31, 2024, segment depreciation and amortization of $15,493 increased $803 compared to $14,690 in the prior year quarter;

the increase primarily relates to new assets placed in service.

For the three months ended March 31, 2025, segment depreciation and amortization of $15,512 increased $569 compared to $14,943 in the prior year quarter, and for the six months ended March 31, 2025, segment depreciation and amortization of $31,005 increased $1,372 compared to $29,633 in the prior year period.

The increase in both the three and six months ended March 31, 2025, is primarily due to depreciation for new assets placed in service.

Other Income (Expense)

For the quarters ended December 31, 2024 and 2023, Other income (expense) of $1,832 and $632, respectively, includes $440 and $13, respectively, of net currency exchange gains in connection with the translation of receivables and payables denominated in currencies other than the functional currencies of Griffon and its subsidiaries, net periodic benefit plan income (expense) of $301 and $(34), respectively, and net investment income of $70 and $56, respectively.

Other income (expense) also includes royalty income of $590 and $592 for the three months ended December 31, 2024 and 2023, respectively.

For the quarters ended March 31, 2025 and 2024, Other income (expense) of $512 and $626, respectively, includes ($222) and $179, respectively, of net currency exchange transaction gains (losses) from receivables and payables held in non-functional currencies, net periodic benefit plan income (expense) of $299 and ($35), respectively, and net investment income (loss) of ($16) and $29, respectively.

Other income (expense) also includes royalty income of $556 and $509 for the three months ended March 31, 2025 and 2024, respectively.

For the six months ended March 31, 2025 and 2024, Other income (expense) of $2,344 and $1,258, respectively, includes $218 and $191, respectively, of net currency exchange transaction gains from receivables and payables held in non-functional currencies, net periodic benefit plan income (expense) of $600 and ($69), respectively, as well as $54 and $85, respectively of net investment income.

Other income (expense) also includes royalty income of $1,146 and $1,100, for the six months ended March 31, 2025 and 2024, respectively.

Provision for income taxes

During the quarter ended December 31, 2024, the Company recognized a tax provision of $26,569 on income before taxes of $97,420, compared to a tax provision of $17,965 on income before taxes of $60,142 in the prior year quarter.

During the quarter ended March 31, 2025, the Company recognized a tax provision of $21,875 on income before taxes of $78,637, compared to a tax provision of $24,430 on income before taxes of $88,573 in the prior year quarter.

The current year quarter results included strategic review costs - retention and other of $1,199 ($898, net of tax);

gain on sale of real estate of $183 ($136, net of tax);

and discrete and certain other tax benefits, net, that affect comparability of $250.

and discrete and certain other tax provisions, net, that affect comparability of $75.

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

1 unchanged sentence

gain on sale of real estate of $11 ($9 net of tax);

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

Excluding these items, the effective tax rates for the quarters ended December 31, 2024 and 2023 were 27.7% and 27.9%, respectively.

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

Excluding these items, the effective tax rates for the quarters ended March 31, 2025 and 2024 were 27.7% and 27.9%, respectively.

During the six months ended March 31, 2025, the Company recognized a tax provision of $48,444 on income before taxes of $176,057, compared to a tax provision of $42,395 on income before taxes of $148,715 in the comparable prior year period.

The six month period ended March 31, 2025 included gain on sale of real estate of $8,157 ($6,079, net of tax);

strategic review - retention and other of $2,850 ($2,113, net of tax);

and discrete and other tax benefits, net, that affect comparability of $175.

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

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

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

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

Excluding these items, the effective tax rates for the six months ended March 31, 2025 and 2024 were 27.7% and 27.9%, respectively.

Stock-based compensation

For the quarters ended December 31, 2024 and 2023, stock based compensation expense, which includes expense for both restricted stock grants and the ESOP, totaled $5,378 and $6,417, respectively.

The decrease in stock compensation expense is primarily due to the ESOP being frozen as of September 30, 2024 (meaning that, for plan years after this date, no additional employees will become participants under the ESOP and no new voluntary contributions will be made to the ESOP).

Additionally, during the three months ended December 31, 2024 the final loan payment was made by the ESOP to the Company and compensation expense for the period was fully offset by dividends paid.

For the quarters ended March 31, 2025 and 2024, stock based compensation expense, which includes expense for both restricted stock grants and the ESOP, totaled $6,515 and $6,257, respectively.

For the six months ended March 31, 2025 and 2024, stock based compensation expense totaled $11,893 and $12,674, respectively.

The increase in the current quarter expense compared to the prior year quarter was primarily due to an increase in stock compensation expense driven by the timing of equity awards granted, partially offset by a decrease in Employee Stock Ownership Plan (ESOP) expense.

The decrease in expense for the six month period ended March 31, 2025 was primarily attributable to a decrease in ESOP expense, partially offset by the increase in stock compensation expense driven by the timing of equity awards granted in the current period compared to the prior year period.

The decrease in the ESOP expense was due to the plan being frozen as of September 30, 2024 (meaning that, for plan years after this date, no additional employees will become participants under the ESOP and no new voluntary contributions will be made to the ESOP).

Additionally, during the first quarter ended December 31, 2024 the final loan payment was made by the ESOP to the Company and compensation expense was fully offset by dividends paid.

As of December 31, 2024 there were 4,166,038 shares of common stock in the ESOP, all of which were allocated to participant accounts.

Comprehensive income (loss)

For the quarter ended December 31, 2024, total other comprehensive loss, net of taxes, of $17,699 included a loss of $20,018 from foreign currency translation adjustments primarily due to the weakening of the Euro, British Pound and Australian and Canadian Dollar, all in comparison to the U.S.

a $2,264 gain on cash flow hedges;

and a $55 benefit from pension amortization.

For the quarter ended December 31, 2023, total other comprehensive income, net of taxes, of $10,475 included a gain of $10,238 from foreign currency translation adjustments primarily due to the strengthening of the Euro, British Pound and Australian and Canadian Dollar, all in comparison to the U.S.

a $295 loss on cash flow hedges;

and a $532 benefit from pension amortization.

For the quarter ended March 31, 2025, total other comprehensive income, net of taxes, of $2,417 included a gain of $2,970 from foreign currency translation adjustments primarily due to the strengthening of the Euro and British Pound in comparison to the U.S.

and a $541 benefit from pension amortization, partially offset by a $1,094 loss on cash flow hedges.

For the quarter ended March 31, 2024, total other comprehensive loss, net of taxes, of $4,896 included a loss of $7,199 from foreign currency translation adjustments primarily due to the weakening of the Euro, British Pound and Australian and Canadian Dollar, all in comparison to the U.S.

partially offset by a $531 benefit from pension amortization and a $1,772 gain on cash flow hedges.

For the six months ended March 31, 2025, total other comprehensive loss, net of taxes, of $15,282 included a loss of $17,048 from foreign currency translation adjustments primarily due to the weakening of the Euro, British Pound and Australian and Canadian Dollar, all in comparison to the U.S.

partially offset by a $596 benefit from pension amortization;

and a $1,170 gain on cash flow hedges.

For the six months ended March 31, 2024, total other comprehensive income, net of taxes, of $5,579 included a gain of $3,039 from foreign currency translation adjustments primarily due to the strengthening of the Euro, British Pound and Australian Dollar, partially offset by the weakening of the Canadian Dollar, all in comparison to the U.S.

a $1,063 benefit from pension amortization;

and a $1,477 gain on cash flow hedges.

DISCONTINUED OPERATIONS

At December 31, 2024 and September 30, 2024, Griffon’s liabilities for discontinued operations primarily relate to insurance claims, income taxes, product liability, warranty and environmental reserves totaling $7,604 and $7,768, respectively.

At March 31, 2025 and September 30, 2024, Griffon’s liabilities for discontinued operations primarily relate to insurance claims, income taxes, product liability, warranty and environmental reserves totaling $9,137 and $7,768, respectively.

Griffon's assets for discontinued operations primarily relate to insurance claims.

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

There were no reported revenues or costs in the three and six months ended March 31, 2025 and 2024 for discontinued operations.

LIQUIDITY AND CAPITAL RESOURCES

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Griffon believes it has sufficient liquidity available to invest in existing businesses and strategic acquisitions while managing its capital structure on both a short-term and long-term basis.

As of December 31, 2024, the amount of cash, cash equivalents and marketable securities held by foreign subsidiaries was $65,700.

As of March 31, 2025, the amount of cash, cash equivalents and marketable securities held by foreign subsidiaries was $78,800.

Our intent is to permanently reinvest these funds, except in limited circumstances, outside the U.S., and we do not currently anticipate that we will need funds generated from foreign operations to fund our domestic operations.

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Griffon's primary sources of liquidity are cash flows generated from operations, cash on hand and our secured $500,000 revolving credit facility ("Revolver"), which matures in August 2028.

During the three months ended December 31, 2024, the Company generated $142,922 of net cash from operating activities and, as of December 31, 2024, the Company had $427,510 available, subject to certain loan covenants, for borrowing under the Revolver.

The Company had cash and cash equivalents of $151,952 at December 31, 2024.

During the six months ended March 31, 2025, the Company generated $159,425 of net cash from operating activities and, as of March 31, 2025, the Company had $364,510 available, subject to certain loan covenants, for borrowing under the Revolver.

The Company had cash and cash equivalents of $127,821 at March 31, 2025.

The following table is derived from the Condensed Consolidated Statements of Cash Flows:

Cash Flows from Operations For the Three Months Ended December 31,

Cash Flows from Operations For the Six Months Ended March 31,

Net Cash Flows Provided by (Used In):

2 unchanged sentences

Financing activities (134,000) (132,043)

Cash flows provided by operating activities for the three months ended December 31, 2024 was $142,922, compared to $146,058 in the prior year period.

In both the three months ended December 31, 2024 and 2023, cash provided by operating activities reflected increased cash generated primarily from operations at HBP and a decrease in net working capital, primarily driven by a decrease in accounts receivable, and an increase in accounts payable and accrued liabilities.

Cash flows used in investing activities is primarily comprised of capital expenditures and proceeds from the sale of businesses, investments and property, plant and equipment.

During the three months ended December 31, 2024, cash flows used in investing activities was $236 compared to $13,543 in the prior year period.

Cash flows used in investing activities in the current period primarily consisted of capital expenditures of $17,456, partially offset by proceeds totaling $17,220 primarily from the sale of real estate.

In the prior year period, cash flows used in investing activities consisted primarily of capital expenditures of $14,330, partially offset by proceeds totaling $787 from the sale of real estate.

During the three months ended December 31, 2024, cash used in financing activities totaled $108,121 compared to $123,947 in the prior year period.

Cash flows used in financing activities in the current period consisted of the purchase of shares of common stock in connection with the board authorized share repurchase program and the purchase of common stock withheld to satisfy tax obligations in connection with the vesting of restricted stock totaling $49,083, the payment of dividends of $9,037 and payments of long-term debt of $50,000, primarily related to the Revolver.

Cash flows used in financing activities in the prior year period consisted primarily of net repayments of long-term debt of $32,360, primarily related to the Revolver, the purchase of shares of common stock in connection with the Board authorized share repurchase program and the purchase of common stock withheld to satisfy tax obligations in connection with the vesting of restricted stock of $81,449, and the payment of dividends of $9,965.

During the three months ended December 31, 2024, 64,249 shares, with a market value of $5,417, or $84.31 per share, were withheld to settle employee taxes due upon the vesting of restricted stock, and were added to treasury stock.

During the three months ended December 31, 2024, the Board of Directors approved and paid a quarterly cash dividend of $0.18 per share.

During fiscal 2024, the Board of Directors approved four quarterly cash dividends each for $0.15 per share, totaling $0.60 per share for the year.

Cash flows provided by operating activities for the six months ended March 31, 2025 was $159,425, compared to $185,860 in the prior year period.

The decrease was primarily due to an increase in net working capital, mainly driven by increased inventory in the current year period versus inventory reductions in the prior year period, partially offset by decreases in accounts receivable and prepaid and other current assets.

Cash flows used in investing activities is primarily comprised of capital expenditures and proceeds from the sale of property, plant and equipment.

During the six months ended March 31, 2025, cash flows used in investing activities was $13,599 compared to $32,017 in the prior year period.

Cash flows used in investing activities in the current period consisted of capital expenditures totaling $31,174, partially offset by proceeds of $17,575 primarily from the sale of real estate.

In the prior year period, cash flows used in investing activities consisted of capital expenditures totaling $33,289, partially offset by proceeds of $1,272 from the sale of real estate.

During the six months ended March 31, 2025, cash used in financing activities totaled $134,000 compared to $132,043 in the prior year period.

Cash flows used in financing activities in the current period consisted of the purchase of shares of common stock in connection with the board authorized share repurchase program, including excise taxes, and from common stock withheld to satisfy tax obligations in connection with the vesting of restricted stock, totaling $121,453, and the payment of dividends of $23,441, partially offset by net proceeds from long-term debt of $10,921, primarily related to the Revolver.

Cash flows used in financing activities in the prior year period consisted primarily of the purchase of shares of common stock in connection with the Board authorized share repurchase program and from common stock withheld to satisfy tax obligations in connection with the vesting of restricted stock totaling $222,421 and the payment of dividends of $21,676, partially offset by net proceeds from long-term debt of $112,316, primarily related to the Revolver.

During the six months ended March 31, 2025, 583,893 shares, with a market value of $45,277, or $77.54 per share, were withheld to settle employee taxes due upon the vesting of restricted stock, and were added to treasury stock.

This amount excludes excise tax benefits of $528 for the six months ended March 31, 2025.

During the six months ended March 31, 2025, the Board of Directors approved and paid two quarterly cash dividends each for $0.18 per share.

During fiscal 2024, the Board of Directors approved and paid four quarterly cash dividends each for $0.15 per share, totaling $0.60 per share.

The Company currently intends to pay dividends each quarter;

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

On February 4, 2025, the Board of Directors declared a quarterly cash dividend of $0.18 per share, payable on March 18, 2025 to shareholders of record as of the close of business on February 25, 2025.

On May 7, 2025, the Board of Directors declared a quarterly cash dividend of $0.18 per share, payable on June 18, 2025 to shareholders of record as of the close of business on May 30, 2025.

On November 13, 2024, Griffon announced that the Board of Directors approved an additional increase of $400,000 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.

Share repurchases during the three months ended December 31, 2024 totaled 610,172 shares of common stock, for a total of $42,344, or an average of $69.40 per share.

As of December 31, 2024, $390,348 remained under the Board authorized repurchase program.

During the three months ended and as of December 31, 2024, $413 and $2,220, respectively, were accrued for excise taxes for share repurchases.

During the three months ended December 31, 2024 and 2023, cash used in discontinued operations from operating activities was $180 and $2,926, respectively, primarily related to the settling of certain liabilities and environmental costs.

Cash and Equivalents and Debt December 31, September 30,

Share repurchases during the six months ended March 31, 2025 totaled 1,030,372 shares of common stock, for a total of $72,868, or an average of $70.72 per share.

This amount excludes excise taxes incurred for share repurchases of $716 for the six months ended March 31, 2025.

As of March 31, 2025, $359,825 remained under the Board authorized repurchase program.

During the six months ended March 31, 2025 and 2024, cash used in discontinued operations from operating activities was $289 and $3,273, respectively, primarily related to the settling of certain liabilities and environmental costs.

During the six months ended March 31, 2025, cash provided by discontinued operations for investing activities of $137 related to proceeds from an insurance recovery.

Cash and Equivalents and Debt March 31, September 30,

Cash and equivalents $ 127,821 $ 114,438

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

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

As of March 31, 2025, outstanding 2028 Senior Notes due totaled $974,775;

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

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

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

At December 31, 2024, $6,395 of underwriting fees and other expenses incurred remained to be amortized.

The fair value of the 2028 Senior Notes approximated $950,406 on March 31, 2025 based upon quoted market prices (Level 1 inputs).

At March 31, 2025, $5,890 of underwriting fees and other expenses incurred remained to be amortized.

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.

As of December 31, 2024, the Term Loan B outstanding balance was $455,000.

Since that time, Griffon prepaid $325,000 aggregate principal amount of the Term Loan B, which permanently reduced the outstanding balance.

As of March 31, 2025, the Term Loan B outstanding balance was $453,000.

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

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In connection with the amendment, Griffon recognized a $1,700 loss on debt extinguishment 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 December 31, 2024, unamortized costs of $5,107 related to 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 2.25% (6.58% as of December 31, 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.

At March 31, 2025, $4,795 of costs incurred remained to be amortized.

The Term Loan B bears interest at the Term SOFR rate plus a spread of 2.00% (6.32% as of March 31, 2025).

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.

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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 $457,275 on December 31, 2024 based upon quoted market prices (Level 1 inputs).

The fair value of the Term Loan B facility approximated $453,000 on March 31, 2025 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.

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Interest is payable on borrowings at either a 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% (6.43% at December 31, 2024);

SONIA loans accrue interest at SONIA Base Rate plus a credit adjustment spread and a margin of 2.00% (6.73% at December 31, 2024);

and base rate loans accrue interest at prime rate plus a margin of 1.00% (8.50% at December 31, 2024).

At December 31, 2024, under the Credit Agreement, there were $59,500 in outstanding borrowings on the Revolver;

Griffon's SOFR loans accrue interest at Term SOFR plus a credit adjustment spread and a margin of 1.75% (6.17% at March 31, 2025) and base rate loans accrue interest at prime rate plus a margin of 0.75% (8.25% at March 31, 2025).

At March 31, 2025, under the Credit Agreement, there was $122,500 in outstanding borrowings on the Revolver;

outstanding standby letters of credit were $12,990;

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In November 2012, Garant G.P.

(“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 (4.60% as of December 31, 2024).

The revolving facility matured in December 2024.

In January 2025, Garant entered into a new CAD 20,000 revolving credit facility.

The facility accrues interest at CORRA plus a credit adjustment spread and margin of 1.2%.

Garant is required to maintain a certain minimum equity.

(“Garant”), a Griffon wholly owned subsidiary, entered into a CAD 15,000 revolving credit facility, which expired in December 2024.

In January 2025, Garant entered into a new CAD 20,000 revolving credit facility that matures in January 2026 but is renewable upon mutual agreement with the lender.

The new facility accrues interest at Canadian Overnight Repo Rate Average ("CORRA") plus a credit adjustment spread and a margin of 1.2% (4.27% as of March 31, 2025).

At March 31, 2025 there was no balance outstanding under the facility with CAD 20,000 ($13,992 as of March 31, 2025) available for borrowing.

The facility is secured by substantially all of the assets of Garant.

Garant is required to maintain a certain minimum equity and a minimum interest coverage ratio.

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

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

The receivable purchase facility accrues interest at Bank Bill Swap Rate plus 1.25% per annum (5.57% at December 31, 2024).

At December 31, 2024, there was no balance outstanding under the receivable purchase facility with AUD 30,000 ($18,645 as of December 31, 2024) available.

The receivable purchase facility was renewed as of March 2025 and now matures in March 2026, but is renewable upon mutual agreement with the lender.

The receivable purchase facility accrues interest at Bank Bill Swap Rate plus 1.25% (5.35% at March 31, 2025).

At March 31, 2025, there was no balance outstanding under the receivable purchase facility with AUD 30,000 ($18,918 as of March 31, 2025) available for borrowing.

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

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

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

At March 31, 2025, Griffon and its subsidiaries were in compliance with the terms and covenants of all its credit and loan agreements.

N et debt to EBITDA (Leverage ratio), a non-GAAP measure, is a key financial measure that is used by management to assess the borrowing capacity of the Company.

The Company has defined its net debt to EBITDA leverage ratio as net debt (total principal debt outstanding net of cash and equivalents) divided by the sum of trailing twelve-month (“TTM”) adjusted EBITDA (as defined above) and TTM stock-based compensation expense.

Net Debt to EBITDA, as calculated in accordance with the definition in the Credit Agreement, was 2.4x at December 31, 2024.

Net Debt to EBITDA, as calculated in accordance with the definition in the Credit Agreement, was 2.6x at March 31, 2025.

Capital Resource Requirements

Griffon's debt requirements include principal on our outstanding debt, most notably our Senior Notes totaling $974,775 payable in 2028 and related annual interest payments of approximately $56,050, a Term Loan B facility maturing in 2029 with an outstanding balance of $455,000 on December 31, 2024 and Revolver maturing in 2028 with an outstanding balance of $59,500.

The Term Loan B accrues interest at the Term SOFR plus a spread of 2.25% (6.58% as of December 31, 2024).

Griffon's debt requirements include principal on our outstanding debt, most notably our Senior Notes totaling $974,775 payable in 2028 and related annual interest payments of approximately $56,058, a Term Loan B facility maturing in 2029 with an outstanding balance of $453,000 on March 31, 2025 and Revolver maturing in 2028 with an outstanding balance of $122,500.

The Term Loan B accrues interest at the Term SOFR plus a spread of 2.00% (6.32% as of March 31, 2025).

For the Revolver, interest is payable on borrowings at either a SOFR, 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 spread adjustment and a margin of 2.00% (6.43% at December 31, 2024);

SONIA loans accrue interest at SONIA Base Rate plus a credit spread adjustment and a margin of 2.00% (6.73% at December 31, 2024);

and base rate loans accrue interest at prime rate plus a margin of 1.00% (8.50% at December 31, 2024).

The Revolver accrues interest on borrowings at either a SOFR, 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 spread adjustment and a margin of 1.75% (6.17% at March 31, 2025) and base rate loans accrue interest at prime rate plus a margin of 0.75% (8.25% at March 31, 2025).

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

For the three months ended December 31, 2024, our largest customer, The Home Depot, represented 10% of Griffon’s consolidated revenue, 9% of HBP’s revenue and 12% of CPP's revenue.

No other customer are expected to exceed 10% of consolidated revenue.

For the six months ended March 31, 2025, our largest customer, The Home Depot, represented 10% of Griffon’s consolidated revenue, 9% of HBP’s revenue and 12% of CPP's revenue.

No other customer is expected to exceed 10% of consolidated revenue.

Future operating results will continue to depend substantially on the success of Griffon’s largest customers and our ongoing relationships with them.

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Griffon’s Senior Notes are fully and unconditionally guaranteed, jointly and severally by Clopay Corporation, The AMES Companies, Inc., Clopay AMES Holding Corp., ClosetMaid LLC, AMES Hunter Holdings Corporation, Hunter Fan Company, CornellCookson, LLC and Cornell Real Estate Holdings, LLC, all of which are indirectly 100% owned by Griffon.

In accordance with Rule 3-10 of Regulation S-X promulgated under the Securities Act, presented below are summarized financial information of the Parent (Griffon) subsidiaries and the Guarantor subsidiaries as of December 31, 2024 and September 30, 2024 and for the three months ended December 31, 2024 and for the year ended September 30, 2024.

In accordance with Rule 3-10 of Regulation S-X promulgated under the Securities Act, presented below are summarized financial information of the Parent (Griffon) subsidiaries and the Guarantor subsidiaries as of March 31, 2025 and September 30, 2024 and for the six months ended March 31, 2025 and for the year ended September 30, 2024.

All intercompany balances and transactions between subsidiaries under Parent and subsidiaries under the Guarantor have been eliminated.

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Summarized Statements of Operations and Comprehensive Income (Loss)

For the Three Months Ended For the Year Ended

December 31, 2024 September 30, 2024

For the Six Months Ended For the Year Ended

March 31, 2025 September 30, 2024

Parent Company Guarantor Companies Parent Company Guarantor Companies

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Summarized Balance Sheet Information

As of December 31, 2024 As of September 30, 2024

As of March 31, 2025 As of September 30, 2024

Parent Company Guarantor Companies Parent Company Guarantor Companies

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Such statements relate to, among other things, income (loss), earnings, cash flows, revenue, changes in operations, operating improvements, the industries in which Griffon Corporation (the “Company” or “Griffon”) operates and the United States and global economies.

Statements in this Form 10-Q that are not historical are hereby identified as “forward-looking statements” and may be indicated by words or phrases such as “anticipates,” “supports,” “plans,”

“projects,” “expects,” “believes,” "achieves", “should,” “would,” “could,” “hope,” “forecast,” “management is of the opinion,” “may,” “will,” “estimates,” “intends,” “explores,” “opportunities,” the negative of these expressions, use of the future tense and similar words or phrases.

Statements in this Form 10-Q that are not historical are hereby

identified as “forward-looking statements” and may be indicated by words or phrases such as “anticipates,” “supports,” “plans,” “projects,” “expects,” “believes,” "achieves", “should,” “would,” “could,” “hope,” “forecast,” “management is of the opinion,” “may,” “will,” “estimates,” “intends,” “explores,” “opportunities,” the negative of these expressions, use of the future tense and similar words or phrases.

Such forward-looking statements are subject to inherent risks and uncertainties that could cause actual results to differ materially from those expressed in any forward-looking statements.

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis