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Item 2. Management’s Discussion and Analysis

2025-08-06 compared with 2025-05-08 · 143 added, 118 removed, 271 unchanged (49% of the section changed)

18 unchanged sentences

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

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

Pope generated over $25,000 in revenue in its first full year of operations.

Further Information

13 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 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.

Revenue for the quarter ended June 30, 2025 was $613,627 compared to $647,814 in the prior year quarter, a decrease of $34,187 or 5%, due to the decreased revenue at CPP of 16%, partially offset by increased revenue at HBP of 2%.

Net loss for the third quarter ended June 30, 2025 was $120,139 or $2.65 per share, compared to net income of $41,086, or $0.84 per share, in the prior year quarter.

The current year quarter results from operations included the following:

– Goodwill and intangible asset impairments of $243,612 ($217,154, net of tax, or $4.69 per share);

– Strategic review - retention and other of $1,033 ($773, net of tax, or $0.02 per share);

– Gain on sale of real estate of $122 ($90, net of tax, or $0.00 per share);

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

– Discrete and certain other tax benefits, net, of $28,451 or $0.61 per share.

The prior year quarter results from operations included the following:

1 unchanged sentence

– Strategic review - retention and other of $1,870 ($1,390, net of tax, or $0.03 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.

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.

– Loss on debt extinguishment of $1,700 ($1,292, net of tax, or $0.03 per share);

– Loss on sale of real estate of $725 ($520, net of tax, or $0.01 per share);

– Discrete and certain other tax provisions, net, of $2,247 or $0.05 per share.

Excluding these items from the respective quarterly results, net income would have been $69,247, or $1.50 per share in the three months ended June 30, 2025 compared to $60,526, or $1.24 per share, in the prior year quarter.

Revenue for the nine months ended June 30, 2025 was $1,857,744 compared to $1,963,847 in the prior year period, a decrease of $106,103, or 5%, due to the decreased revenue at HBP and CPP of 2% and 11%, respectively.

Net income for the nine months ended June 30, 2025 was $7,474 or $0.16 per share, compared to $147,406, or $2.94 per share, in the prior year period.

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

– Goodwill and intangible asset impairments of $243,612 ($217,154, net of tax, or $4.63 per share);

– Strategic review - retention and other of $3,883 ($2,886, net of tax, or $0.06 per share);

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– Strategic review - retention and other of $9,204 ($6,887, net of tax, or $0.14 per share);

– Gain on sale of real estate of $558 ($415, net of tax, or $0.01 per share);

– Loss on debt extinguishment of $1,700 ($1,292, net of tax, or $0.03 per share);

– Loss on sale of real estate of $167 ($105, net of tax, or $0.00 per share);

– Discrete and certain other tax provisions, net, of $2,640 or $0.05 per share.

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.

Excluding these items from the respective periods, net income would have been $192,719, or $4.11 per share in the nine months ended June 30, 2025, compared to $183,303, or $3.66 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.

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

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 March 31, For the Six Months Ended March 31,

The following table provides a reconciliation of net income (loss) to adjusted net income and earnings (loss) per share to adjusted earnings per share:

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

2025 2024 2025 2024

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

Net income (loss) $ (120,139) $ 41,086 $ 7,474 $ 147,406

Adjusting items:

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— 18,688 — 33,489

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

Goodwill and intangible asset impairments 243,612 — 243,612 —

(Gain) loss on sale of real estate (122) 725 (8,279) 167

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

Strategic review - retention and other 1,033 1,870 3,883 9,204

1 unchanged sentence

(26,686) (5,790) (25,345) (11,303)

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

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

(28,451) 2,247 (28,626) 2,640

Adjusted net income $ 69,247 $ 60,526 $ 192,719 $ 183,303

Earnings per common share $ 1.21 $ 1.28 $ 2.70 $ 2.10

Earnings (loss) per common share $ (2.65) $ 0.84 $ 0.16 $ 2.94

Adjusting items, net of tax:

Anti-dilutive share impact (4)

Restructuring charges (1)

— 0.29 — 0.50

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

Goodwill and intangible asset impairments 4.69 — 4.63 —

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

Loss from debt extinguishment — 0.03 — 0.03

Strategic review - retention and other 0.02 0.03 0.06 0.14

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

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

(0.61) 0.05 (0.61) 0.05

Adjusted earnings per common share $ 1.50 $ 1.24 $ 4.11 $ 3.66

Weighted-average shares outstanding (in thousands) 45,320 47,034 45,505 47,921

Diluted weighted-average shares outstanding (in thousands) 46,270 48,851 46,911 50,085

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 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.

(1) For the three and nine months ended June 30 2024, restructuring charges related to the CPP global sourcing expansion, of which $15,744 and $28,724, are included in Cost of goods and services and $2,944 and $4,765 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.

(3) Discrete and certain other tax provisions (benefits) primarily relate to the impact of a rate differential between the statutory and annual effective tax rates on items impacting the quarter.

(3) Discrete and certain other tax provisions (benefits), net primarily relate to the impact of a rate differential between the statutory and annual effective tax rates on items impacting the quarter.

(4) For the quarter ended June 30, 2025, earnings (loss) per common share was calculated using basic weighted-average shares outstanding, as presented on the face of the Statement of Operations.

The anti-dilutive share impact represents the impact of converting from basic shares used in calculating earnings (loss) per common share to the diluted shares used in calculating earnings (loss) per common share from a net loss.

RESULTS OF OPERATIONS

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.

Three and Nine Months ended June 30, 2025 and 2024

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

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

See table provided in Note 13 - Reportable Segments for a reconciliation of adjusted EBITDA to income before taxes.

See table provided in Note 13 - Reportable Segments for a reconciliation of adjusted EBITDA to income (loss) before taxes.

Home and Building Products

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

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

2025 2024 2025 2024

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Depreciation and amortization $ 4,440 $ 3,883 $ 13,049 $ 11,288

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.

For the quarter ended June 30, 2025, HBP revenue increased $6,030, or 2%, compared to the prior year quarter, due to favorable price and mix of 3%, partially offset by decreased volume of 1%.

For the quarter ended June 30, 2025, adjusted EBITDA of $128,755 increased $10,239, or 9%, compared to $118,516 in the prior year quarter, resulting from increased revenue noted above and reduced material costs, partially offset by increased labor costs.

For the nine months ended June 30, 2025, revenue decreased $18,174, or 2%, compared to the prior year period, due to decreased volume of 3%, partially offset by favorable price and mix of 1%.

For the nine months ended June 30, 2025, adjusted EBITDA of $365,231 decreased $6,928, or 2%, compared to $372,159 in the prior year period, resulting from decreased revenue noted above and the related volume impact on overhead absorption, and increased labor costs, partially offset by reduced material costs.

For the quarter and nine months ended June 30, 2025, segment depreciation and amortization increased $557 and $1,761, respectively, compared to the prior year periods, due to new assets placed in service.

Consumer and Professional Products

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

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

2025 2024 2025 2024

7 unchanged sentences

Depreciation and amortization $ 11,238 $ 11,225 $ 33,634 $ 33,453

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%.

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.

For the quarter ended June 30, 2025, revenue decreased $40,217, or 16%, compared to the prior year quarter, primarily driven by decreased volume of 19% due to reduced consumer demand across all geographic regions, except Australia, and disrupted historical customer ordering patterns in the U.S.

due to increased tariffs.

CPP benefited from price and mix of 2% and incremental revenue from the Pope acquisition contributed 1%.

Foreign currency did not have a material impact on the current quarter revenue.

For the quarter ended June 30, 2025, adjusted EBITDA of $19,222 decreased $3,041 compared to $22,263 in the prior year quarter, primarily due to decreased revenue noted above, partially offset by the benefits from the U.S.

global sourcing expansion initiative, improved margins across all geographic regions, and reduced administrative expenses.

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.

For the nine months ended June 30, 2025, revenue decreased $87,929, or 11%, compared to the prior year period, driven by decreased volume of 13% due to reduced consumer demand across all geographic regions, except Australia, and disrupted historical customer ordering patterns in the U.S.

due to increased tariffs.

CPP benefited in Australia from increased organic volume and incremental revenue from the Pope acquisition contributed 3%.

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

For the nine months ended June 30, 2025, adjusted EBITDA of $61,140 increased $13,217 compared to $47,923 in the prior year period, primarily due to the benefits from the U.S.

global sourcing expansion initiative and increased volume in Australia, partially offset by the decreased revenue noted above.

Foreign currency had a 2% unfavorable impact on the current nine month period adjusted EBITDA.

For the quarter and nine months ended June 30, 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.

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

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

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.

Pope generated over $25,000 in revenue in its first full year of operations.

For the quarter ended June 30, 2025, unallocated amounts, excluding depreciation, consisted primarily of corporate overhead costs totaling $13,264 compared to $15,285 in the prior year quarter;

and for the nine months ended June 30, 2025, unallocated amounts totaled $41,941 compared to $44,006 in the prior year period.

The decrease in the current quarter compared to the prior year quarter was primarily due to a decrease in Employee Stock Ownership Plan (ESOP) costs.

The decrease in the current nine month period ended June 30, 2025 compared to the prior year comparable period was primarily due to a decrease in ESOP costs, partially offset by an increase in stock based compensation expense.

Goodwill and intangible asset impairments

For the quarter ended June 30, 2025, indicators of impairment were present for the Hunter Fan reporting unit within the CPP reportable segment, driven by a decrease in year-to-date and forecasted sales and operating results primarily due to ongoing weak consumer demand coupled with the impact of increased tariffs disrupting historical customer ordering patterns.

Accordingly, a quantitative assessment was performed, which resulted in a non-cash, pre-tax impairment charge for Hunter Fan’s goodwill and indefinite-lived intangible assets of $136,612 and $107,000, respectively, recorded in the third fiscal quarter of 2025.

See Note 8 - Goodwill and Other Intangibles.

Strategic review

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.

During the three months ended June 30, 2025 and 2024, we incurred strategic review expenses of $1,033 ($773, net of tax) and $1,870 ($1,390, net of tax), respectively, and during the nine months ended June 30, 2025 and 2024, we incurred strategic review expenses of $3,883 ($2,886, net of tax) and $9,204 ($6,887, 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 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.

For the three months ended June 30, 2025, segment depreciation and amortization of $15,678 increased $570 compared to $15,108 in the prior year quarter, and for the nine months ended June 30, 2025, segment depreciation and amortization of $46,683 increased $1,942 compared to $44,741 in the prior year period.

The increase in both the three and nine months ended June 30, 2025, is primarily due to depreciation for new assets placed in service.

Other Income (Expense)

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.

For the quarters ended June 30, 2025 and 2024, Other income (expense) of $247 and $350, respectively, includes $163 and $120, respectively, of net currency exchange transaction losses from receivables and payables held in non-functional currencies, net periodic benefit plan income (expense) of $302 and ($34), respectively, and net investment income (loss) of ($424) and $10, respectively.

Other income (expense) also includes royalty income of $501 and $549 for the three months ended June 30, 2025 and 2024, respectively.

For the nine months ended June 30, 2025 and 2024, Other income (expense) of $2,591 and $1,608, respectively, includes $54 and $72, respectively, of net currency exchange transaction gains from receivables and payables held in non-functional currencies, net periodic benefit plan income (expense) of $902 and ($103), respectively, as well as ($370) and $95, respectively of net investment income (loss).

Other income (expense) also includes royalty income of $1,647 and $1,649, for the nine months ended June 30, 2025 and 2024, respectively.

Provision for income taxes

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);

During the quarter ended June 30, 2025, the Company recognized a tax benefit of $29,061 on a loss before taxes of $149,200, compared to a tax provision of $19,923 on income before taxes of $61,009 in the prior year quarter.

The current year quarter results included goodwill and intangible asset impairments of $243,612 ($217,154, net of tax);

strategic review costs - retention and other of $1,033 ($773, net of tax);

gain on sale of real estate of $122 ($90, net of tax);

and discrete and certain other tax benefits, net, that affect comparability of $28,451.

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

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

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

loss on sale of real estate of $725 ($520 net of tax);

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

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

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

Excluding these items, the effective tax rates for the quarters ended June 30, 2025 and 2024 were 27.4% and 27.9%, respectively.

During the nine months ended June 30, 2025, the Company recognized a tax provision of $19,383 on income before taxes of $26,857, compared to a tax provision of $62,318 on income before taxes of $209,724 in the comparable prior year period.

The nine month period ended June 30, 2025 included goodwill and intangible asset impairments of $243,612 ($217,154, net of tax);

gain on sale of real estate of $8,279 ($6,169, net of tax);

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 $3,883 ($2,886, net of tax);

and discrete and other tax benefits, net, that affect comparability of $28,626.

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

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

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

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

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

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

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

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

Excluding these items, the effective tax rates for the nine months ended June 30, 2025 and 2024 were 27.6% and 27.9%, respectively.

Stock-based compensation

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.

For the quarters ended June 30, 2025 and 2024, stock based compensation expense, which includes expense for both restricted stock grants and the ESOP, totaled $5,968 and $7,052, respectively.

For the nine months ended June 30, 2025 and 2024, stock based compensation expense totaled $17,861 and $19,726, respectively.

The decrease in expense for the three and nine month periods ended June 30, 2025 compared to the prior year periods was primarily due to a decrease in ESOP expense, partially offset by an increase in stock compensation expense driven by the timing of equity awards granted.

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).

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Comprehensive income (loss)

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.

For the quarter ended June 30, 2025, total other comprehensive income, net of taxes, of $12,446 included a gain of $12,244 from foreign currency translation adjustments primarily due to the strengthening of the Euro, British Pound and Australian Dollar and Canadian Dollar, in comparison to the U.S.

and a $897 benefit from pension amortization, partially offset by a $695 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.

For the quarter ended June 30, 2024, total other comprehensive loss, net of taxes, of $1,222 included a $927 loss on cash flow hedges and a loss of $827 from foreign currency translation adjustments primarily due to the weakening of the Euro and Canadian Dollar, all in comparison to the U.S.

partially offset by a $532 benefit from pension amortization.

For the nine months ended June 30, 2025, total other comprehensive loss, net of taxes, of $2,836 included a loss of $4,804 from foreign currency translation adjustments primarily due to the weakening of the Australian Dollar and Canadian Dollar, partially offset by the strengthening of the Euro and British Pound, all in comparison to the U.S.

partially offset by a $1,493 benefit from pension amortization;

and a $475 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.

For the nine months ended June 30, 2024, total other comprehensive income, net of taxes, of $4,357 included a gain of $2,212 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 $1,595 benefit from pension amortization;

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DISCONTINUED OPERATIONS

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.

At June 30, 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 $9,035 and $7,768, respectively.

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

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

There were no reported revenue or expenses in the three and nine months ended June 30, 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 March 31, 2025, the amount of cash, cash equivalents and marketable securities held by foreign subsidiaries was $78,800.

As of June 30, 2025, the amount of cash, cash equivalents and marketable securities held by foreign subsidiaries was $58,800.

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 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.

During the nine months ended June 30, 2025, the Company generated $282,481 of net cash from operating activities and, as of June 30, 2025, the Company had $449,510 available, subject to certain loan covenants, for borrowing under the Revolver.

The Company had cash and cash equivalents of $107,279 at June 30, 2025.

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

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

Cash Flows from Operations For the Nine Months Ended June 30,

Net Cash Flows Provided by (Used In):

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Financing activities (269,538) (238,712)

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 provided by operating activities for the nine months ended June 30, 2025 was $282,481, compared to $307,938 in the prior year period.

The variance was primarily driven by an increase in net working capital, mainly due to higher inventory levels and decreases in accounts payable and accrued liabilities.

This was partially offset by a decrease in accounts receivable and an increase in cash generated from operations.

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.

During the nine months ended June 30, 2025, cash flows used in investing activities was $21,972 compared to $34,277 in the prior year period.

Cash flows used in investing activities in the current period consisted of capital expenditures totaling $39,867, partially offset by proceeds of $17,895 primarily from the sale of real estate.

In the prior year period, cash flows used in investing activities consisted of capital expenditures totaling $47,849, partially offset by proceeds of $13,572 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.

During the nine months ended June 30, 2025, cash used in financing activities totaled $269,538 compared to $238,712 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 $161,709, net repayments of long-term debt of $76,117, primarily related to the Revolver, and the payment of dividends of $31,622.

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 $241,501 and the payment of dividends of $28,770, partially offset by net proceeds from long-term debt of $32,773, 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 the nine months ended June 30, 2025, 583,893 shares, with a market value of $45,277, or an average of $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 nine months ended June 30, 2025.

During the nine months ended June 30, 2025, the Board of Directors approved and paid three 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.

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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 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 August 5, 2025, the Board of Directors declared a quarterly cash dividend of $0.18 per share, payable on September 16, 2025 to shareholders of record as of the close of business on August 29, 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 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,

Share repurchases during the nine months ended June 30, 2025 totaled 1,611,454 shares of common stock, for a total of $113,125, or an average of $70.20 per share.

This amount excludes excise taxes incurred for share repurchases of $1,112 for the nine months ended June 30, 2025.

As of June 30, 2025, $319,568 remained under the Board authorized repurchase program.

During the nine months ended June 30, 2025 and 2024, cash used in discontinued operations from operating activities was $820 and $3,707, respectively, primarily related to the settling of certain liabilities and environmental costs.

During the nine months ended June 30, 2025, cash provided by discontinued operations for investing activities of $137 related to proceeds from an insurance recovery.

Cash and Equivalents and Debt June 30, September 30,

Cash and equivalents $ 107,279 $ 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 March 31, 2025, outstanding 2028 Senior Notes due totaled $974,775;

As of June 30, 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 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.

The fair value of the 2028 Senior Notes approximated $971,120 on June 30, 2025 based upon quoted market prices (Level 1 inputs).

At June 30, 2025, $5,386 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.

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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.

As of June 30, 2025, the Term Loan B outstanding balance was $451,000.

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 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).

At June 30, 2025, $4,482 of costs incurred remained to be amortized.

The Term Loan B bears interest at the Term SOFR rate plus a spread of 2.25% (6.58% as of June 30, 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.

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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 $453,000 on March 31, 2025 based upon quoted market prices (Level 1 inputs).

The fair value of the Term Loan B facility approximated $451,564 on June 30, 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 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;

Griffon's SOFR loans accrue interest at Term SOFR plus a credit adjustment spread and a margin of 2.00% (6.43% at June 30, 2025) and base rate loans accrue interest at prime rate plus a margin of 1.00% (8.50% at June 30, 2025).

At June 30, 2025, under the Credit Agreement, there was $37,500 in outstanding borrowings on the Revolver;

outstanding standby letters of credit were $12,990;

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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 new facility accrues interest at Canadian Overnight Repo Rate Average ("CORRA") plus a credit adjustment spread and a margin of 1.2% (4.25% as of June 30, 2025).

At June 30, 2025 there was no balance outstanding under the facility with CAD 20,000 ($14,640 as of June 30, 2025) available for borrowing.

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

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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 accrues interest at Bank Bill Swap Rate plus 1.25% (4.86% at June 30, 2025).

At June 30, 2025, there was no balance outstanding under the receivable purchase facility with AUD 30,000 ($19,617 as of June 30, 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 March 31, 2025, Griffon and its subsidiaries were in compliance with the terms and covenants of all its credit and loan agreements.

At June 30, 2025, Griffon and its subsidiaries were in compliance with the terms and covenants of 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 2.6x at March 31, 2025.

(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 2.5x at June 30, 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 $56,058, 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).

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 $451,000 on June 30, 2025 and Revolver maturing in 2028 with an outstanding balance of $37,500.

The Term Loan B accrues interest at the Term SOFR plus a spread of 2.25% (6.58% as of June 30, 2025).

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).

Griffon's SOFR loans accrue interest at Term SOFR plus a credit spread adjustment and a margin of 2.00% (6.43% at June 30, 2025) and base rate loans accrue interest at prime rate plus a margin of 1.00% (8.50% at June 30, 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 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.

For the nine months ended June 30, 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.

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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 March 31, 2025 and September 30, 2024 and for the six months ended March 31, 2025 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 June 30, 2025 and September 30, 2024 and for the nine months ended June 30, 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 Six Months Ended For the Year Ended

March 31, 2025 September 30, 2024

For the Nine Months Ended For the Year Ended

June 30, 2025 September 30, 2024

Parent Company Guarantor Companies Parent Company Guarantor Companies

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Summarized Balance Sheet Information

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

As of June 30, 2025 As of September 30, 2024

Parent Company Guarantor Companies Parent Company Guarantor Companies

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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