GRIFFON CORP 10-Q

Item 1 – Financial Statements GRIFFON CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands) (Unaudited) June 30, 2025 September 30, 2024 CURRENT ASSETS Cash and equivalents $ 107,279 $ 114,438 Accounts receivable, net of allowances of $ 11,485 and $ 10,986 271,632 312,765 Inventories 445,913 425,489 Prepaid and other current assets 80,876 61,604 Assets held for sale 5,289 14,532 Assets of discontinued operations 1,303 648 Total Current Assets 912,292 929,476 PROPERTY, PLANT AND EQUIPMENT, net 292,385 288,297 OPERATING LEASE RIGHT-OF-USE ASSETS 162,819 171,211 GOODWILL 192,917 329,393 INTANGIBLE ASSETS, net 493,843 618,782 OTHER ASSETS 28,352 30,378 ASSETS OF DISCONTINUED OPERATIONS 4,712 3,417 Total Assets $ 2,087,320 $ 2,370,954 CURRENT LIABILITIES Notes payable and current portion of long-term debt $ 8,123 $ 8,155 Accounts payable 130,773 119,354 Accrued liabilities 162,523 181,918 Current portion of operating lease liabilities 31,997 35,065 Liabilities of discontinued operations 4,545 4,498 Total Current Liabilities 337,961 348,990 LONG-TERM DEBT, net 1,442,855 1,515,897 LONG-TERM OPERATING LEASE LIABILITIES 142,213 147,369 OTHER LIABILITIES 95,901 130,540 LIABILITIES OF DISCONTINUED OPERATIONS 4,490 3,270 Total Liabilities 2,023,420 2,146,066 COMMITMENTS AND CONTINGENCIES - See Note 22 SHAREHOLDERS’ EQUITY Total Shareholders’ Equity 63,900 224,888 Total Liabilities and Shareholders’ Equity $ 2,087,320 $ 2,370,954 The accompanying notes to condensed consolidated financial statements are an integral part of these statements. 1 Table of Contents GRIFFON CORPORATION CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY For the Three and Nine Months Ended June 30, 2025 (Unaudited) COMMON STOCK CAPITAL IN EXCESS OF PAR VALUE RETAINED EARNINGS TREASURY SHARES ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) DEFERRED COMPENSATION (in thousands) SHARES PAR VALUE SHARES COST TOTAL Balance at September 30, 2024 84,746 $ 21,187 $ 677,028 $ 461,442 36,443 $ ( 876,527 ) $ ( 58,024 ) $ ( 218 ) $ 224,888 Net income — — — 70,851 — — — — 70,851 Dividend — — — ( 8,196 ) — — — — ( 8,196 ) Shares withheld on employee taxes on vested equity awards including excise taxes — — — — 64 ( 5,342 ) — — ( 5,342 ) Amortization of deferred compensation — — — — — — — 218 218 Common stock acquired including excise taxes — — — — 610 ( 42,963 ) — — ( 42,963 ) Equity awards granted, net — — ( 12,136 ) — ( 493 ) 12,136 — — — ESOP allocation of common stock including excise taxes — — 537 — — 104 — — 641 Stock-based compensation — — 5,378 — — — — — 5,378 Other comprehensive income, net of tax — — — — — — ( 17,699 ) — ( 17,699 ) Balance at December 31, 2024 84,746 $ 21,187 $ 670,807 $ 524,097 36,624 $ ( 912,592 ) $ ( 75,723 ) $ — $ 227,776 Net income — — — 56,762 — — — — 56,762 Dividend — — — ( 8,494 ) — — — — ( 8,494 ) Shares withheld on employee taxes on vested equity awards including excise taxes — — — — 520 ( 39,407 ) — — ( 39,407 ) Common stock acquired including excise taxes — — — — 420 ( 30,827 ) — — ( 30,827 ) Equity awards granted, net — — ( 1,238 ) — ( 49 ) 1,238 — — — Stock-based compensation — — 6,515 — — — — — 6,515 Other comprehensive income, net of tax — — — — — — 2,417 — 2,417 Balance at March 31, 2025 84,746 $ 21,187 $ 676,084 $ 572,365 37,515 $ ( 981,588 ) $ ( 73,306 ) $ — $ 214,742 Net loss — — — ( 120,139 ) — — — — ( 120,139 ) Dividend — — — ( 8,465 ) — — — — ( 8,465 ) Common stock acquired including excise taxes — — — — 581 ( 40,652 ) — — ( 40,652 ) Equity award termination — — 323 — 12 ( 323 ) — — — Stock-based compensation — — 5,968 — — — — — 5,968 Other comprehensive income, net of tax — — — — — — 12,446 — 12,446 Balance at June 30, 2025 84,746 $ 21,187 $ 682,375 $ 443,761 38,108 $ ( 1,022,563 ) $ ( 60,860 ) $ — $ 63,900 The accompanying notes to condensed consolidated financial statements are an integral part of these statements. 2 Table of Contents GRIFFON CORPORATION CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY For the Three and Nine Months Ended June 30, 2024 (Unaudited) COMMON STOCK CAPITAL IN EXCESS OF PAR VALUE RETAINED EARNINGS TREASURY SHARES ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) DEFERRED COMPENSATION (in thousands) SHARES PAR VALUE SHARES COST TOTAL Balance at September 30, 2023 84,746 $ 21,187 $ 662,680 $ 281,516 31,684 $ ( 577,686 ) $ ( 70,010 ) $ ( 2,443 ) $ 315,244 Net income — — — 42,177 — — — — 42,177 Dividend — — — ( 7,825 ) — — — — ( 7,825 ) Shares withheld on employee taxes on vested equity awards including excise taxes — — — — 221 ( 11,604 ) — — ( 11,604 ) Amortization of deferred compensation — — — — — — — 520 520 Common stock acquired including excise taxes — — — — 1,634 ( 70,543 ) — — ( 70,543 ) Equity awards granted, net — — ( 3,383 ) — ( 180 ) 3,383 — — — ESOP allocation of common stock — — 1,550 — — — — — 1,550 Stock-based compensation — — 5,028 — — — — — 5,028 Other comprehensive income, net of tax — — — — — — 10,475 — 10,475 Balance at December 31, 2023 84,746 $ 21,187 $ 665,875 $ 315,868 33,359 $ ( 656,450 ) $ ( 59,535 ) $ ( 1,923 ) $ 285,022 Net income — — — 64,143 — — — — 64,143 Dividend — — — ( 7,289 ) — — — — ( 7,289 ) Shares withheld on employee taxes on vested equity awards including excise taxes — — — — 375 ( 22,722 ) — — ( 22,722 ) Amortization of deferred compensation — — — — — — — 586 586 Common stock acquired including excise taxes — — — — 1,803 ( 118,964 ) — — ( 118,964 ) Equity awards granted, net — — ( 9,492 ) — ( 428 ) 9,492 — — — ESOP allocation of common stock — — 2,457 — — — — — 2,457 Stock-based compensation — — 3,849 — — — — — 3,849 Other comprehensive income, net of tax — — — — — — ( 4,896 ) — ( 4,896 ) Balance at March 31, 2024 84,746 $ 21,187 $ 662,689 $ 372,722 35,109 $ ( 788,644 ) $ ( 64,431 ) $ ( 1,337 ) $ 202,186 Net income — — — 41,086 — — — — 41,086 Dividend — — — ( 7,458 ) — — — — ( 7,458 ) Amortization of deferred compensation — — — — — — — 553 553 Common stock acquired including excise taxes — — — — 284 ( 19,294 ) — — ( 19,294 ) ESOP allocation of common stock including excise taxes — — 2,451 — — 509 — — 2,960 Stock-based compensation — — 4,699 — — — — — 4,699 Other comprehensive income, net of tax — — — — — — ( 1,222 ) — ( 1,222 ) Balance at June 30, 2024 84,746 $ 21,187 $ 669,839 $ 406,350 35,393 $ ( 807,429 ) $ ( 65,653 ) $ ( 784 ) $ 223,510 The accompanying notes to condensed consolidated financial statements are an integral part of these statements. 3 Table of Contents GRIFFON CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (in thousands, except per share data) (Unaudited) Three Months Ended June 30, Nine Months Ended June 30, 2025 2024 2025 2024 Revenue $ 613,627 $ 647,814 $ 1,857,744 $ 1,963,847 Cost of goods and services 348,379 398,665 1,076,009 1,207,392 Gross profit 265,248 249,149 781,735 756,455 Selling, general and administrative expenses 147,637 159,810 450,865 469,830 Goodwill and intangible asset impairments 243,612 — 243,612 — Total operating expenses 391,249 159,810 694,477 469,830 Income (loss) from operations ( 126,001 ) 89,339 87,258 286,625 Other income (expense) Interest expense ( 24,137 ) ( 27,024 ) ( 72,954 ) ( 78,472 ) Interest income 569 769 1,683 1,830 Gain (loss) on sale of real estate 122 ( 725 ) 8,279 ( 167 ) Loss from debt extinguishment — ( 1,700 ) — ( 1,700 ) Other, net 247 350 2,591 1,608 Total other expense, net ( 23,199 ) ( 28,330 ) ( 60,401 ) ( 76,901 ) Income (loss) before taxes ( 149,200 ) 61,009 26,857 209,724 Provision (benefit) for income taxes ( 29,061 ) 19,923 19,383 62,318 Net income (loss) $ ( 120,139 ) $ 41,086 $ 7,474 $ 147,406 Basic earnings (loss) per common share $ ( 2.65 ) $ 0.87 $ 0.16 $ 3.08 Basic weighted-average shares outstanding 45,320 47,034 45,505 47,921 Diluted earnings (loss) per common share $ ( 2.65 ) $ 0.84 $ 0.16 $ 2.94 Diluted weighted-average shares outstanding 45,320 48,851 46,911 50,085 Dividends paid per common share $ 0.18 $ 0.15 $ 0.54 $ 0.45 Net income (loss) $ ( 120,139 ) $ 41,086 $ 7,474 $ 147,406 Other comprehensive income (loss), net of taxes: Foreign currency translation adjustments 12,244 ( 827 ) ( 4,804 ) 2,212 Pension and other post retirement plans 897 532 1,493 1,595 Change in cash flow hedges ( 695 ) ( 927 ) 475 550 Total other comprehensive income (loss), net of taxes 12,446 ( 1,222 ) ( 2,836 ) 4,357 Comprehensive income (loss), net $ ( 107,693 ) $ 39,864 $ 4,638 $ 151,763 The accompanying notes to condensed consolidated financial statements are an integral part of these statements. 4 Table of Contents GRIFFON CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (Unaudited) Nine Months Ended June 30, 2025 2024 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 7,474 $ 147,406 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 47,086 45,150 Stock-based compensation 17,861 19,726 Goodwill and intangible asset impairments 243,612 — Asset impairment charges - restructuring — 22,979 Provision for losses on accounts receivable 731 874 Amortization of debt discounts and issuance costs 3,124 3,169 Loss from debt extinguishment — 1,700 Deferred income tax benefit ( 25,000 ) — Loss (gain) on sale of assets and investments 16 ( 1,448 ) Gain on sale of real estate ( 8,279 ) — Change in assets and liabilities: (Increase) decrease in accounts receivable 38,311 ( 6,051 ) (Increase) decrease in inventories ( 22,606 ) 55,939 (Increase) decrease in prepaid and other assets 2,230 ( 3,351 ) Increase (decrease) in accounts payable, accrued liabilities, income taxes payable and operating lease liabilities ( 23,342 ) 19,454 Other changes, net 1,263 2,391 Net cash provided by operating activities 282,481 307,938 CASH FLOWS FROM INVESTING ACTIVITIES: Acquisition of property, plant and equipment ( 39,867 ) ( 47,849 ) Proceeds from the sale of property, plant and equipment 17,895 13,572 Net cash used in investing activities ( 21,972 ) ( 34,277 ) CASH FLOWS FROM FINANCING ACTIVITIES: Dividends paid ( 31,622 ) ( 28,770 ) Purchase of shares for treasury ( 161,709 ) ( 241,501 ) Proceeds from long-term debt 63,000 179,500 Payments of long-term debt ( 139,117 ) ( 146,727 ) Financing costs — ( 907 ) Other, net ( 90 ) ( 307 ) Net cash used in financing activities ( 269,538 ) ( 238,712 ) CASH FLOWS FROM DISCONTINUED OPERATIONS: Net cash used in operating activities ( 820 ) ( 3,707 ) Net cash provided by investing activities 137 — Net cash used in discontinued operations ( 683 ) ( 3,707 ) Effect of exchange rate changes on cash and equivalents 2,553 ( 679 ) NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS ( 7,159 ) 30,563 CASH AND EQUIVALENTS AT BEGINNING OF PERIOD 114,438 102,889 CASH AND EQUIVALENTS AT END OF PERIOD $ 107,279 $ 133,452 Supplemental Disclosure of Non-Cash Flow Information: Capital expenditures in accounts payable $ 5,329 $ 268 The accompanying notes to condensed consolidated financial statements are an integral part of these statements. 5 Table of Contents GRIFFON CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (US dollars and non US currencies in thousands, except per share data) (Unaudited) (Unless otherwise indicated, references to years or year-end refer to Griffon’s fiscal period ending September 30) NOTE 1 – DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION About Griffon Corporation Griffon Corporation (the “Company”, “Griffon”, "we" or "us") is a diversified management and holding company that conducts business through wholly-owned subsidiaries. Griffon oversees the operations of its subsidiaries, allocates resources among them and manages their capital structures. Griffon provides direction and assistance to its subsidiaries in connection with acquisition and growth opportunities, as well as divestitures. As long-term investors, we intend to continue to grow and strengthen our existing businesses, and to diversify further through investments in our businesses and acquisitions. The Company was founded in 1959, is a Delaware corporation headquartered in New York, N.Y. and is listed on the New York Stock Exchange (NYSE:GFF). Griffon conducts its operations through two reportable segments: • Home and Building Products ("HBP") conducts its operations through Clopay Corporation ("Clopay"). Founded in 1964, Clopay is the largest manufacturer and marketer of garage doors and rolling steel doors in North America. Residential and commercial sectional garage doors are sold through professional dealers and leading home center retail chains throughout North America under the brands Clopay, Ideal, and Holmes. Rolling steel door and grille products designed for commercial, industrial, institutional, and retail use are sold under the Cornell and Cookson brands. • Consumer and Professional Products (“CPP”) is a global provider of branded consumer and professional tools; residential, industrial and commercial fans; home storage and organization products; and products that enhance indoor and outdoor lifestyles. CPP sells products globally through a portfolio of leading brands including AMES, since 1774, Hunter, since 1886, True Temper, and ClosetMaid. Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) for interim financial information, and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, these financial statements do not include all the information and footnotes required by US GAAP for complete financial statements. As such, they should be read together with Griffon’s Annual Report on Form 10-K for the fiscal year ended September 30, 2024, which provides a more complete explanation of Griffon’s accounting policies, financial position, operating results, business, properties and other matters. In the opinion of management, these financial statements reflect all adjustments considered necessary for a fair statement of interim results. Griffon’s businesses are seasonal; for this and other reasons, the financial results of the Company for any interim period are not necessarily indicative of the results for the full year. The Condensed Consolidated Balance Sheet information at September 30, 2024 was derived from the audited financial statements included in Griffon’s Annual Report on Form 10-K for the year ended September 30, 2024. The condensed consolidated financial statements include the accounts of Griffon and all subsidiaries. Intercompany accounts and transactions have been eliminated in consolidation. Certain amounts in prior years may have been reclassified to conform to the current year presentation. The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting periods. These estimates may be adjusted due to changes in economic, industry or customer financial conditions, as well as changes in technology or demand. Significant estimates include expected loss allowances for credit losses and returns, net realizable value of inventories, restructuring reserves, valuation of goodwill and intangible assets, assumptions associated with pension benefit obligations and income or 6 GRIFFON CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (US dollars and non US currencies in thousands, except per share data) (Unaudited) expenses, useful lives associated with depreciation and amortization of intangible and fixed assets, warranty reserves, sales incentive accruals, assumptions associated with stock based compensation valuation, income taxes and tax valuation reserves, environmental reserves, legal reserves, insurance reserves, the valuation of assets and liabilities of discontinued operations and the accompanying disclosures. These estimates are based on management’s best knowledge of current events and actions Griffon may undertake in the future. Actual results may ultimately differ from these estimates. NOTE 2 – FAIR VALUE MEASUREMENTS The carrying values of cash and equivalents, accounts receivable, accounts and notes payable, and revolving credit and variable interest rate debt approximate fair value due to either the short-term nature of such instruments or the fact that the interest rate of the revolving credit and variable rate debt is based upon current market rates. Applicable accounting guidance establishes a fair value hierarchy requiring the Company to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the hierarchy is based on the lowest level of input that is significant to the fair value measurement. The accounting guidance establishes three levels of inputs that may be used to measure fair value, as follows: • Level 1 inputs are measured and recorded at fair value based upon quoted prices in active markets for identical assets. • Level 2 inputs include inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices in active markets for similar assets and liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of assets or liabilities. • Level 3 inputs are unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. On June 30, 2025, the fair values of Griffon’s 2028 Senior Notes and Term Loan B facility approximated $ 971,120 and $ 451,564 , respectively. Fair values were based upon quoted market prices (level 1 inputs). Insurance contracts with values of $ 4,959 at June 30, 2025 are measured and recorded at fair value based upon quoted prices in active markets for similar assets (level 2 inputs) and are included in other assets on the Condensed Consolidated Balance Sheets. Items Measured at Fair Value on a Recurring Basis In the normal course of business, Griffon’s operations are exposed to the effects of changes in foreign currency exchange rates related to inventory purchases. To manage these risks, Griffon may enter into various derivative contracts such as foreign currency exchange contracts, including forwards and options. As of June 30, 2025, Griffon entered into several such contracts in order to lock into a foreign currency rate for planned settlements of trade liabilities payable in U.S. Dollars. At June 30, 2025, Griffon had $ 38,000 of Australian Dollar contracts at a weighted average rate of $ 1.51 which qualified for hedge accounting (Level 2 inputs). These hedges were all deemed effective as cash flow hedges with gains and losses related to changes in fair value deferred and recorded in Accumulated other comprehensive income (loss) ("AOCI") and Prepaid and other current assets, or Accrued liabilities, until settlement. Upon settlement, gains and losses are recognized in the Consolidated Statements of Operations and Comprehensive Income (Loss) in Cost of goods and services ("COGS"). AOCI included deferred gains of $ 446 ($ 312 , net of tax) at June 30, 2025. Upon settlement, gains of $ 758 and $ 3,023 were recorded in COGS during the three and nine months ended June 30, 2025. All contracts expire in 30 to 148 days. At June 30, 2025, Griffon had $ 19,000 of Chinese Yuan contracts at a weighted average rate of $ 7.10 which qualified for hedge accounting (level 2 inputs). These hedges were all deemed effective as cash flow hedges with gains and losses related to changes in fair value deferred and recorded in AOCI and Prepaid and other current assets, or Accrued liabilities, until settlement. Upon settlement, gains and losses are recognized in the Consolidated Statements of Operations and Comprehensive 7 GRIFFON CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (US dollars and non US currencies in thousands, except per share data) (Unaudited) Income (Loss) in COGS. AOCI included deferred gains of $ 16 ($ 12 , net of tax) at June 30, 2025. Upon settlement, losses of $ 295 and $ 903 were recorded in COGS during the three and nine months ended June 30, 2025, respectively. All contracts expire in 3 to 304 days. At June 30, 2025, Griffon had $ 8,565 of Canadian Dollar contracts at a weighted average rate of $ 1.37 . The contracts, which protect Canadian operations from currency fluctuations for U.S. Dollar based purchases, do not qualify for hedge accounting. For the three and nine months ended June 30, 2025, fair value losses of $ 436 and $ 247 were recorded to Other liabilities and to Other income for the outstanding contracts, based on similar contract values (level 2 inputs). Realized gains of $ 14 and $ 148 were recorded in Other income during the three and nine months ended June 30, 2025 for all settled contracts. All contracts expire in 30 to 420 days. NOTE 3 – REVENUE The Company recognizes revenue when performance obligations identified under the terms of contracts with its customers are satisfied. A performance obligation is a promise in a contract to transfer a distinct good or service, or a bundle of goods or services, to the customer, and is the unit of accounting. A contract with a customer is an agreement which both parties have approved, that creates enforceable rights and obligations, has commercial substance and with respect to which payment terms are identified and collectability is probable. Once the Company has entered into a contract or purchase order, it is evaluated to identify performance obligations. For each performance obligation, revenue is recognized when control of the promised products is transferred to the customer, or services are satisfied under the contract or purchase order, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those products or services (the transaction price). The Company’s performance obligations are recognized at a point in time related to the manufacture and sale of a broad range of products and components, and revenue is recognized when title, and risk and rewards of ownership, have transferred to the customer, which is generally upon shipment. For a complete explanation of Griffon’s revenue accounting policies, this note should be read in conjunction with Griffon’s Annual Report on Form 10-K for the year ended September 30, 2024. See Note 13 - Reportable Segments for revenue from contracts with customers disaggregated by end markets, segments and geographic location. NOTE 4 – ACQUISITIONS Griffon continually evaluates potential acquisitions that either strategically fit within its portfolio or expand its portfolio into new product lines or adjacent markets. Griffon has completed a number of acquisitions that have been accounted for as business combinations, in which assets acquired and liabilities assumed are recorded at fair value as of the date of acquisition and have resulted in the recognition of goodwill. The operating results of business acquisitions are included in Griffon’s consolidated financial statements from the date of acquisition. On July 1, 2024, Griffon announced that its subsidiary, The AMES Companies, Inc., ("AMES") expanded the scope of its Australian operations by acquiring substantially all of the assets of Pope, a leading Australian provider of residential watering products, from the Toro Company (NYSE:TTC) for a purchase price of approximately AUD 21,800 (approximately $ 14,500 ) in cash. The purchase price was finalized and allocated to acquired intangibles, net of deferred taxes, of AUD 2,940 (approximately $ 1,960 ) and goodwill of AUD 2,640 (approximately $ 1,758 ), which was assigned to the CPP segment and is not deductible for income tax purposes. The purchase price was also allocated to inventory of AUD 16,132 (approximately $ 10,752 ), property, plant and equipment, net of AUD 1,289 (approximately $ 859 ) and accrued liabilities of AUD 1,194 (approximately $ 795 ). 8 GRIFFON CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (US dollars and non US currencies in thousands, except per share data) (Unaudited) NOTE 5 – INVENTORIES Inventories are stated at the lower of cost (first-in, first-out or average cost) or net realizable value. The following table details the components of inventory: At June 30, 2025 At September 30, 2024 Raw materials and supplies $ 91,659 $ 92,366 Work in process 13,581 13,923 Finished goods 340,673 319,200 Total $ 445,913 $ 425,489 In connection with the Company's restructuring activities described in Note 17 - Restructuring Charges, during the nine months ended June 30, 2024, CPP recorded inventory impairment charges of $ 22,979 to adjust inventory to its net realizable value. There were no impairment charges recorded during the nine months ended June 30, 2025. NOTE 6 – PROPERTY, PLANT AND EQUIPMENT The following table details the components of property, plant and equipment, net: At June 30, 2025 At September 30, 2024 Land, building and building improvements $ 156,690 $ 153,076 Machinery and equipment (1) 496,265 472,030 Leasehold improvements 37,813 37,833 690,768 662,939 Accumulated depreciation ( 398,383 ) ( 374,642 ) Total $ 292,385 $ 288,297 (1) Machinery and Equipment includes approximately $ 35,012 and $ 36,443 of construction in progress assets as of June 30, 2025 and September 30, 2024, respectively. Depreciation and amortization expense for property, plant and equipment was $ 9,974 and $ 9,389 for the quarters ended June 30, 2025 and 2024, respectively, and $ 29,682 and $ 28,155 for the nine months ended June 30, 2025 and 2024, respectively. Depreciation and amortization included in Selling, general and administrative ("SG&A") expenses was $ 4,253 and $ 4,124 for the quarters ended June 30, 2025 and 2024, respectively and $ 12,675 and $ 12,218 for the nine months ended June 30, 2025 and 2024, respectively. Remaining components of depreciation and amortization, attributable to manufacturing operations, are included in Cost of goods and services. In connection with the expansion of CPP's U.S. global sourcing strategy announced on May 3, 2023, certain owned manufacturing locations which ceased operations have met the criteria to be classified as held for sale, and the net book value of these properties as of June 30, 2025 and September 30, 2024 totaled $ 5,289 and $ 14,532 , respectively. During the quarter ended June 30, 2025, in connection with the goodwill and intangible indefinite-lived asset impairment event described in Note 8, the Company also evaluated property, plant and equipment assets for potential impairment. The review did not result in any impairment charges to property, plant and equipment. 9 GRIFFON CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (US dollars and non US currencies in thousands, except per share data) (Unaudited) NOTE 7 – CREDIT LOSSES The Company is exposed to credit losses primarily through sales of products and services. Trade receivables are recorded at their stated amount, less allowances for discounts, credit losses and returns. The Company’s expected loss allowance methodology for trade receivables is primarily based on the aging method of the accounts receivable balances and the financial condition of its customers. The allowances represent estimated uncollectible receivables associated with potential customer defaults on contractual obligations (usually due to customers’ potential insolvency), discounts related to early payment of accounts receivables by customers and estimates for returns. The allowance for credit losses includes amounts for certain customers in which a risk of default has been specifically identified, as well as an amount for customer defaults, based on a formula, when it is determined the risk of some default is probable and estimable, but cannot yet be associated with specific customers. Allowance for discounts and returns are recorded as a reduction of revenue and the provision related to the allowance for credit losses is recorded in SG&A expenses. The Company also considers current and expected future economic and market conditions when determining any estimate of credit losses. Generally, estimates used to determine the allowance are based on assessment of anticipated payment and all other historical, current and future information that is reasonably available. All accounts receivable amounts are expected to be collected in less than one year. Based on a review of the Company's policies and procedures across all segments, including the aging of its trade receivables, recent write-off history and other factors related to future macroeconomic conditions, Griffon determined that its method to determine credit losses and the amount of its allowances for bad debts is in accordance with the accounting guidance for credit losses on financial instruments, including trade receivables, in all material respects. The following table provides a roll-forward of the allowance for doubtful accounts, including provisions for expected credit losses that is deducted from gross accounts receivable to present the net amount expected to be collected: Nine months ended June 30, 2025 2024 Beginning Balance, October 1 $ 10,986 $ 11,264 Provision for expected credit losses 731 874 Amounts written off charged against the allowance ( 569 ) ( 1,155 ) Other, primarily foreign currency translation 337 26 Ending Balance, June 30 $ 11,485 $ 11,009 10 GRIFFON CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (US dollars and non US currencies in thousands, except per share data) (Unaudited) NOTE 8 – GOODWILL AND OTHER INTANGIBLES For the quarter ended June 30, 2025, indicators of goodwill 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. As such, in connection with the preparation of our financial statements for the quarter and nine months ended June 30, 2025, we performed a quantitative assessment of the Hunter Fan reporting unit goodwill using both an income based and market-based valuation approach. This impairment test resulted in a pre-tax, non-cash goodwill impairment charge of $ 136,612 , representing the remaining goodwill of the Hunter Fan reporting unit. Indicators of impairment were not present for the HBP reportable segment or the AMES reporting unit in the CPP reportable segment during the quarter and nine months ended June 30, 2025. The following table provides a summary of the carrying value of goodwill by segment as of June 30, 2025 and September 30, 2024, as follows: At September 30, 2024 Impairment Charges Goodwill from acquisitions (2) Foreign currency translation adjustments At June 30, 2025 Home and Building Products $ 191,253 $ — $ — $ — $ 191,253 AMES 1,528 — 230 ( 94 ) 1,664 Hunter Fan (1) 136,612 ( 136,612 ) — — — Consumer and Professional Products 138,140 ( 136,612 ) 230 ( 94 ) 1,664 Total $ 329,393 $ ( 136,612 ) $ 230 $ ( 94 ) $ 192,917 (1) Accumulated impairment charges at June 30, 2025 and September 30, 2024 were $ 250,612 and $ 114,000 , respectively. (2) The increase is due to final purchase price allocation adjustments recorded during the nine months ended June 30, 2025 related to the 2024 Pope acquisition. In connection with the preparation of our financial statements for the quarter ended June 30, 2025, indicators of impairment were present for our Hunter Fan indefinite-lived intangible asset as discussed above. As such, we determined the fair value of Hunter Fan's indefinite-lived intangible asset by using a relief from royalty method, which estimates the value of a trademark by discounting to present value the hypothetical royalty payments that are saved by owning the asset rather than licensing it. We compared the estimated fair values to their carrying amounts, resulting in a pre-tax, non-cash impairment charge of $ 107,000 to the carrying amount of Hunter Fan's trademark. There were no other indicators of impairment for the Company's remaining indefinite-lived intangible assets. The following table provides the gross carrying value and accumulated amortization for each major class of intangible assets: At June 30, 2025 At September 30, 2024 Gross Carrying Amount Accumulated Amortization Average Life (Years) Gross Carrying Amount Accumulated Amortization Customer relationships & other $ 449,846 $ 147,304 17 $ 450,784 $ 134,296 Technology and patents 18,111 10,829 10 17,350 6,859 Total amortizable intangible assets 467,957 158,133 468,134 141,155 Trademarks 184,019 — 291,803 — Total intangible assets $ 651,976 $ 158,133 $ 759,937 $ 141,155 The gross carrying amount of intangible assets was impacted by $ 962 related to unfavorable foreign currency translation. Amortization expense for intangible assets was $ 5,848 and $ 5,858 for the quarters ended June 30, 2025 and 2024, respectively, and $ 17,404 and $ 16,995 for the nine months ended June 30, 2025 and 2024, respectively. Amortization expense for the remainder of 2025 and the next five fiscal years and thereafter, based on current intangible balances and classifications, is estimated as follows: remaining in 2025 - $ 5,305 ; 2026 - $ 22,708 ; 2027 - $ 22,107 ; 2028 - $ 22,107 ; 2029 - $ 22,107 ; 2030 - $ 22,107 ; thereafter $ 193,383 . 11 GRIFFON CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (US dollars and non US currencies in thousands, except per share data) (Unaudited) NOTE 9 – INCOME TAXES 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 . 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); strategic review costs - retention and other of $ 3,883 ($ 2,886 , net of tax); gain on sale of real estate of $ 8,279 ($ 6,169 , net of tax); and discrete and other tax benefits, net, that affect comparability of $ 28,626 . 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); 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 certain other tax provisions, net, that affect comparability of $ 2,640 . Excluding these items, the effective tax rates for the nine months ended June 30, 2025 and 2024 were 27.6 % and 27.9 %, respectively. On July 4, 2025, the One Big Beautiful Bill Act ("OBBBA") was enacted in the U.S. The OBBBA includes significant tax related provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in the Company's fiscal year 2025 and others implemented through 2027. The Company is currently evaluating the OBBBA and does not expect a material impact on its financial position or results of operations. 12 GRIFFON CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (US dollars and non US currencies in thousands, except per share data) (Unaudited) NOTE 10 – LONG-TERM DEBT Debt at June 30, 2025 and September 30, 2024 consisted of the following: At June 30, 2025 At September 30, 2024 Outstanding Balance Original Issuer Premium/(Discount) Capitalized Fees & Expenses Balance Sheet Coupon Interest Rate Outstanding Balance Original Issuer Premium/(Discount) Capitalized Fees & Expenses Balance Sheet Coupon Interest Rate Senior notes due 2028 (a) $ 974,775 $ 133 ( 5,386 ) $ 969,522 5.75 % $ 974,775 $ 169 $ ( 6,900 ) $ 968,044 5.75 % Term Loan B due 2029 (b) 451,000 ( 495 ) ( 4,482 ) 446,023 Variable 457,000 ( 599 ) ( 5,420 ) 450,981 Variable Revolver due 2028 (b) 37,500 — ( 2,300 ) 35,200 Variable 107,500 — ( 2,859 ) 104,641 Variable Non US lines of credit (c) — — ( 61 ) ( 61 ) Variable — — ( 2 ) ( 2 ) Variable Other long term debt (d) 294 — — 294 Variable 410 — ( 22 ) 388 Variable Totals 1,463,569 ( 362 ) ( 12,229 ) 1,450,978 1,539,685 ( 430 ) ( 15,203 ) 1,524,052 less: Current portion ( 8,123 ) — — ( 8,123 ) ( 8,155 ) — — ( 8,155 ) Long-term debt $ 1,455,446 $ ( 362 ) $ ( 12,229 ) $ 1,442,855 $ 1,531,530 $ ( 430 ) $ ( 15,203 ) $ 1,515,897 Interest expense for the three and nine months ended June 30, 2025 and 2024 consists of the following: Three Months Ended June 30, 2025 Three Months Ended June 30, 2024 Effective Interest Rate Cash Interest Amort. Debt (Premium)/Discount Amort. Debt Issuance Costs & Other Fees Total Interest Expense Effective Interest Rate Cash Interest Amort. Debt (Premium)/Discount Amort. Debt Issuance Costs & Other Fees Total Interest Expense Senior notes due 2028 (a) 6.0 % $ 14,013 $ ( 12 ) $ 505 $ 14,506 6.0 % $ 14,013 $ ( 12 ) $ 505 $ 14,506 Term Loan B due 2029 (b) 6.8 % 7,363 35 313 7,711 8.2 % 9,070 43 331 9,444 Revolver due 2028 (b) Variable 1,808 — 186 1,994 Variable 3,114 — 186 3,300 Non US lines of credit (c) Variable 39 — 27 66 Variable 19 — 3 22 Other long term debt (d) Variable 73 — — 73 Variable 61 — — 61 Capitalized interest ( 213 ) — — ( 213 ) ( 309 ) — — ( 309 ) Totals $ 23,083 $ 23 $ 1,031 $ 24,137 $ 25,968 $ 31 $ 1,025 $ 27,024 13 GRIFFON CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (US dollars and non US currencies in thousands, except per share data) (Unaudited) Nine Months Ended June 30, 2025 Nine Months Ended June 30, 2024 Effective Interest Rate Cash Interest Amort. Debt (Premium)/Discount Amort. Debt Issuance Costs & Other Fees Total Interest Expense Effective Interest Rate Cash Interest Amort. Debt (Premium)/Discount Amort. Debt Issuance Costs & Other Fees Total Interest Expense Senior notes due 2028 (a) 6.0 % $ 42,045 $ ( 36 ) $ 1,515 $ 43,524 6.0 % $ 42,037 $ ( 36 ) $ 1,515 $ 43,516 Term Loan B due 2029 (b) 7.0 % 22,746 104 938 23,788 8.2 % 27,314 128 992 28,434 Revolver due 2028 (b) Variable 5,354 — 559 5,913 Variable 6,253 — 559 6,812 Non US lines of credit (c) Variable 113 — 44 157 Variable 33 — 11 44 Other long term debt (d) Variable 151 — — 151 Variable 478 — 1 479 Capitalized interest ( 579 ) — — ( 579 ) ( 813 ) — — ( 813 ) Totals $ 69,830 $ 68 $ 3,056 $ 72,954 $ 75,302 $ 92 $ 3,078 $ 78,472 14 GRIFFON CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (US dollars and non US currencies in thousands, except per share data) (Unaudited) (a) During 2020, Griffon issued, at par, $ 1,000,000 of 5.75 % Senior Notes due 2028 (the “2028 Senior Notes”). Proceeds from the 2028 Senior Notes were used to redeem $ 1,000,000 of 5.25 % Senior Notes due in 2022. In connection with the issuance and exchange of the 2028 Senior Notes, Griffon capitalized $ 16,448 of underwriting fees and other expenses incurred, which is being amortized over the term of such notes. 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 June 30, 2025, outstanding 2028 Senior Notes due totaled $ 974,775 ; interest is payable semi-annually on March 1 and September 1. The 2028 Senior Notes are senior unsecured obligations of Griffon guaranteed by certain domestic subsidiaries, and subject to certain covenants, limitations and restrictions. 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 $ 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. (b) On January 24, 2022, Griffon amended and restated its Credit Agreement (the "Credit Agreement") to provide for a new $ 800,000 Term Loan B facility, due January 24, 2029, in addition to the revolving credit facility (the "Revolver") provided for under the Credit Agreement. The Term Loan B facility was issued at 99.75 % of par value. Since that time, Griffon prepaid $ 325,000 aggregate principal amount of the Term Loan B, which permanently reduced the outstanding balance. 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. The amendment reduced the margin above Secured Overnight Financing Rate ("SOFR") by 0.25 %, eliminated the credit spread adjustment and reduced the SOFR floor from 0.50 % to 0 %. 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 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. Term Loan B borrowings may generally be repaid without penalty. Once repaid, Term Loan B borrowings may not be reborrowed. The Term Loan B facility is subject to the same affirmative and negative covenants that apply to the Revolver (as described below), but is not subject to any financial maintenance covenants. Term Loan B borrowings are secured by the same collateral that secures borrowings under the Revolver, on an equal and ratable basis. The fair value of the Term Loan B facility approximated $ 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. In the event the 2028 Senior Notes are not repaid, refinanced, or replaced prior to December 1, 2027, the Revolver will mature on December 1, 2027. The amendment also modified certain other provisions of the Credit Agreement, including increasing the letter of credit sub-facility under the Revolver from $ 100,000 to $ 125,000 and increasing the customary accordion feature from a minimum of $ 375,000 to a minimum of $ 500,000 . The Revolver also includes a multi-currency sub-facility of $ 200,000 . Borrowings under the Revolver may be repaid and re-borrowed at any time. Interest is payable on borrowings at either a 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 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 ; and $ 449,510 was available, subject to certain loan covenants, for borrowing at that date. 15 GRIFFON CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (US dollars and non US currencies in thousands, except per share data) (Unaudited) The Revolver has certain financial maintenance tests including a maximum total leverage ratio, a maximum senior secured leverage ratio and a minimum interest coverage ratio, as well as customary affirmative and negative covenants and events of default. The negative covenants place limits on Griffon's ability to, among other things, incur indebtedness, incur liens, and make restricted payments and investments. Both the Revolver and Term Loan B borrowings under the Credit Agreement are guaranteed by Griffon’s material domestic subsidiaries and are secured, on a first priority basis, by substantially all domestic assets of the Company and the guarantors. (c) In November 2012, Garant G.P. (“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 % ( 4.25 % 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. 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 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 % ( 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. Griffon Australia is required to maintain a certain minimum equity level. (d) In February 2024, Griffon repaid in full a loan with the Pennsylvania Industrial Development Authority. The balance in other long-term debt consists primarily of finance leases. At June 30, 2025, Griffon and its subsidiaries were in compliance with the terms and covenants of its credit and loan agreements. NOTE 11 — SHAREHOLDERS’ EQUITY AND EQUITY COMPENSATION During the nine months ended June 30, 2025, the Company paid three quarterly cash dividends each for $ 0.18 per share each. During 2024, the Company 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. Dividends paid on shares in Griffon's Employee Stock Ownership Plan (the “ESOP”) were used to offset ESOP compensation expense. For all dividends, a dividend payable is established for the holders of restricted shares; such dividends will be released upon vesting of the underlying restricted shares. The ESOP was frozen as of September 30, 2024; this means 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. Prior to this date, the Company’s U.S. employees who were not members of a collective bargaining agreement and met certain eligibility requirements became participants in the ESOP. During the first quarter 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. 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. 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. 16 GRIFFON CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (US dollars and non US currencies in thousands, except per share data) (Unaudited) On January 29, 2016, shareholders approved the Griffon Corporation 2016 Equity Incentive Plan (the "Original Incentive Plan") pursuant to which, among other things, awards of performance shares, performance units, stock options, stock appreciation rights, restricted shares, restricted stock units, deferred shares and other stock-based awards may be granted. On January 31, 2018, shareholders approved Amendment No. 1 to the Original Incentive Plan pursuant to which, among other things, 1,000,000 shares were added to the Original Incentive Plan; on January 30, 2020, shareholders approved Amendment No. 2 to the Original Incentive Plan, pursuant to which 1,700,000 shares were added to the Original Incentive Plan; on February 17, 2022, shareholders approved the Amended and Restated 2016 Equity Incentive Plan (the “Amended Incentive Plan”), which amended and restated the Original Incentive Plan and pursuant to which, among other things, 1,200,000 shares were added to the Original Incentive Plan; and on March 20, 2024, shareholders approved an amendment to add 2,600,000 shares to the Amended Incentive Plan. Options granted under the Amended Incentive Plan may be either “incentive stock options” or nonqualified stock options, generally expire ten years after the date of grant and are granted at an exercise price of not less than 100 % of the fair market value at the date of grant. The maximum number of shares of common stock available for award under the Amended Incentive Plan is 8,850,000 ( 600,000 of which may be issued as incentive stock options), plus (i) any shares that were reserved for issuance under the Original Incentive Plan as of the effective date of the Original Incentive Plan, and (ii) any shares underlying awards outstanding on such date under the 2011 Incentive Plan that were subsequently canceled or forfeited. As of June 30, 2025, there were 1,889,293 shares available for grant. Compensation expense for restricted stock and restricted stock units is recognized ratably over the required service period based on the fair value of the grant, calculated as the number of shares or units granted multiplied by the stock price on the date of grant, and for performance shares, including performance units, the likelihood of achieving the performance criteria. The Company recognizes forfeitures as they occur. Compensation expense for restricted stock granted to four senior executives is calculated as the maximum number of shares granted, upon achieving certain performance criteria or market conditions, multiplied by the stock price as valued by a Monte Carlo Simulation Model. Compensation cost related to stock-based awards with graded vesting, generally over a period of 3 years, is recognized using the straight-line attribution method and recorded within SG&A expenses. The following table summarizes the Company’s compensation expense relating to all stock-based incentive plans: Three Months Ended June 30, Nine Months Ended June 30, 2025 2024 2025 2024 Restricted stock $ 5,968 $ 4,699 $ 17,861 $ 13,576 ESOP 1 — 2,353 — 6,150 Total stock-based compensation $ 5,968 $ 7,052 $ 17,861 $ 19,726 ________________________ 1. During the nine months ended June 30, 2025, the final loan payment was made by the ESOP to the Company and compensation expense for the period was fully offset by dividends paid. During the first quarter of 2025, Griffon granted 142,911 shares of restricted stock and restricted stock units ("RSUs") to 43 executives and key employees, subject to certain performance conditions, with a vesting period of thirty-six months and a total fair value of $ 9,735 , or a weighted average fair value of $ 68.12 per share. During the first quarter of 2025, Griffon also granted 436,947 shares of restricted stock to four senior executives with a vesting period of thirty-six months and a two-year post-vesting holding period, subject to the achievement of certain performance criteria or market conditions, relating to required levels of return on invested capital and the relative total shareholder return of Griffon's common stock as compared to a market index. So long as the minimum performance conditions are attained, the amount of shares that can vest will range from a minimum of 72,827 to a maximum of 436,947 , with the target number of shares being 145,649 . The total estimated fair value of these restricted shares, assuming achievement of the performance conditions at target, is $ 12,372 , or a weighted average fair value of $ 84.95 per share. During the second quarter of 2025, Griffon granted 15,940 shares of restricted stock to non-employee directors of Griffon with a vesting period of one year and a fair value of $ 1,100 , or a weighted average fair value of $ 69.03 per share. During the third quarter of 2025, there were no shares of restricted stock or RSUs granted. 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 17 GRIFFON CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (US dollars and non US currencies in thousands, except per share data) (Unaudited) program or issuer tender offer, or in privately negotiated transactions. Share repurchases during the quarter and nine months ended June 30, 2025 totaled 581,082 shares and 1,611,454 shares of common stock, respectively, for a total of $ 40,257 and $ 113,125 , respectively, or an average of $ 69.28 per share and $ 70.20 per share, respectively. This excludes excise taxes incurred for share repurchases of $ 396 and $ 1,112 , for the quarter and nine months ended June 30, 2025, respectively. As of June 30, 2025, $ 319,568 remains available under Griffon's Board authorized repurchase program. Share repurchases during the quarter and nine months ended June 30, 2024 totaled 283,479 shares and 3,721,357 shares of common stock, respectively, for a total of $ 19,080 and $ 206,104 , respectively, or an average of $ 67.31 per share and $ 55.38 per share, respectively. The share repurchases during the nine months ended June 30, 2024 include the repurchase of 1,500,000 shares of common stock, par value $ 0.25 per share, by the Company on February 20, 2024 pursuant to a stock purchase and cooperation agreement executed by the Company and Voss Value Master Fund, L.P., Voss Value-Oriented Special Situations Fund, L.P. and four separately managed accounts of which Voss Capital, LLC is the investment manager, in a private transaction. The purchase price per share was $ 65.50 , for an aggregate purchase price of $ 98,250 . During the nine months ended June 30, 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. There were no shares withheld to settle employee taxes due upon vesting of restricted stock during the three months ended June 30, 2025. This excludes excise tax benefits of $ 528 for the nine months ended June 30, 2025. NOTE 12 – EARNINGS PER SHARE (EPS) Basic EPS (and diluted EPS in periods when a loss exists) was calculated by dividing income (loss) available to common shareholders by the weighted average number of shares of common stock outstanding during the period. Diluted EPS was calculated by dividing income available to common shareholders by the weighted average number of shares of common stock outstanding plus additional common shares that could be issued in connection with stock-based compensation. The following table is a reconciliation of the share amounts (in thousands) used in computing earnings per share: Three Months Ended June 30, Nine Months Ended June 30, 2025 2024 2025 2024 Common shares outstanding 46,638 49,354 46,638 49,354 Unallocated ESOP shares — ( 107 ) — ( 107 ) Non-vested restricted stock ( 1,599 ) ( 2,337 ) ( 1,599 ) ( 2,337 ) Impact of weighted average shares 281 124 466 1,011 Weighted average shares outstanding - basic 45,320 47,034 45,505 47,921 Incremental shares from stock-based compensation — 1,817 1,406 2,164 Weighted average shares outstanding - diluted 45,320 48,851 46,911 50,085 Anti-dilutive restricted stock excluded from diluted EPS computation 950 — — — For the quarter and nine month period ended June 30, 2024, shares of the ESOP that have been allocated to employee accounts are treated as outstanding in determining earnings per share. 18 GRIFFON CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (US dollars and non US currencies in thousands, except per share data) (Unaudited) NOTE 13 – REPORTABLE SEGMENTS Griffon reports its operations through two reportable segments, as follows: • Home and Building Products ("HBP") conducts its operations through Clopay. Founded in 1964, Clopay is the largest manufacturer and marketer of garage doors and rolling steel doors in North America. Residential and commercial sectional garage doors are sold through professional dealers and leading home center retail chains throughout North America under the brands Clopay, Ideal, and Holmes. Rolling steel door and grille products designed for commercial, industrial, institutional, and retail use are sold under the Cornell and Cookson brands. • Consumer and Professional Products (“CPP”) is a global provider of branded consumer and professional tools; residential, industrial and commercial fans; home storage and organization products; and products that enhance indoor and outdoor lifestyles. CPP sells products globally through a portfolio of leading brands including AMES, since 1774, Hunter, since 1886, True Temper, and ClosetMaid. Information on Griffon’s reportable segments is as follows: For the Three Months Ended June 30, For the Nine Months Ended June 30, REVENUE 2025 2024 2025 2024 Home and Building Products $ 400,244 $ 394,214 $ 1,163,893 $ 1,182,067 Consumer and Professional Products 213,383 253,600 693,851 781,780 Total revenue $ 613,627 $ 647,814 $ 1,857,744 $ 1,963,847 Disaggregation of Revenue Revenue from contracts with customers is disaggregated by end markets, segments and geographic location, as it more accurately depicts the nature and amount of the Company’s revenue. The following table presents revenue disaggregated by end market and segment: Three Months Ended June 30, Nine Months Ended June 30, 2025 2024 2025 2024 Residential repair and remodel $ 192,942 $ 190,874 $ 561,936 $ 565,944 Commercial 173,120 170,236 502,342 517,969 Residential new construction 34,182 33,104 99,615 98,154 Total Home and Building Products 400,244 394,214 1,163,893 1,182,067 Residential repair and remodel 66,807 92,312 215,404 265,420 Retail 32,194 49,978 131,975 192,767 Residential new construction 14,216 14,998 41,095 42,679 Industrial 21,210 19,534 52,626 50,683 International excluding North America 78,956 76,778 252,751 230,231 Total Consumer and Professional Products 213,383 253,600 693,851 781,780 Total Consolidated Revenue $ 613,627 $ 647,814 $ 1,857,744 $ 1,963,847 19 GRIFFON CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (US dollars and non US currencies in thousands, except per share data) (Unaudited) The following tables present revenue disaggregated by geography based on the location of the Company's customer: For the Three Months Ended June 30 2025 2024 HBP CPP Total HBP CPP Total United States $ 386,647 $ 122,884 $ 509,531 $ 376,616 $ 162,516 $ 539,132 Europe — 17,270 17,270 3 19,342 19,345 Canada 10,975 11,081 22,056 14,741 12,998 27,739 Australia — 57,212 57,212 — 52,706 52,706 All other countries 2,622 4,936 7,558 2,854 6,038 8,892 Consolidated revenue $ 400,244 $ 213,383 $ 613,627 $ 394,214 $ 253,600 $ 647,814 For the Nine Months Ended June 30, 2025 2024 HBP CPP Total HBP CPP Total United States $ 1,119,349 $ 395,825 $ 1,515,174 $ 1,131,570 $ 496,830 $ 1,628,400 Europe — 34,343 34,343 112 42,940 43,052 Canada 37,128 43,391 80,519 43,922 50,389 94,311 Australia — 205,583 205,583 — 174,607 174,607 All other countries 7,416 14,709 22,125 6,463 17,014 23,477 Consolidated revenue $ 1,163,893 $ 693,851 $ 1,857,744 $ 1,182,067 $ 781,780 $ 1,963,847 Griffon evaluates performance and allocates resources based on segment adjusted EBITDA and adjusted EBITDA, non-GAAP measures, which are defined as income (loss) before taxes, excluding interest income and expense, depreciation and amortization, strategic review charges, non-cash impairment charges, restructuring charges, gain/loss from debt extinguishment and acquisition related expenses, as well as other items that may affect comparability, as applicable. Segment adjusted EBITDA also excludes unallocated amounts, mainly corporate overhead. Griffon believes this information is useful to investors for the same reason. The following table provides a reconciliation of segment adjusted EBITDA and adjusted EBITDA to income (loss) before taxes: 20 GRIFFON CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (US dollars and non US currencies in thousands, except per share data) (Unaudited) For the Three Months Ended June 30, For the Nine Months Ended June 30, 2025 2024 2025 2024 Segment adjusted EBITDA: Home and Building Products $ 128,755 $ 118,516 $ 365,231 $ 372,159 Consumer and Professional Products 19,222 22,263 61,140 47,923 Segment adjusted EBITDA 147,977 140,779 426,371 420,082 Unallocated amounts, excluding depreciation * ( 13,264 ) ( 15,285 ) ( 41,941 ) ( 44,006 ) Adjusted EBITDA 134,713 125,494 384,430 376,076 Net interest expense ( 23,568 ) ( 26,255 ) ( 71,271 ) ( 76,642 ) Depreciation and amortization ( 15,822 ) ( 15,247 ) ( 47,086 ) ( 45,150 ) Loss from debt extinguishment — ( 1,700 ) — ( 1,700 ) Restructuring charges — ( 18,688 ) — ( 33,489 ) Gain (loss) on sale of real estate 122 ( 725 ) 8,279 ( 167 ) Strategic review - retention and other ( 1,033 ) ( 1,870 ) ( 3,883 ) ( 9,204 ) Goodwill and intangible asset impairments ( 243,612 ) — ( 243,612 ) — Income (loss) before taxes $ ( 149,200 ) $ 61,009 $ 26,857 $ 209,724 * Unallocated amounts typically include general corporate expenses not attributable to a reportable segment. For the Three Months Ended June 30, For the Nine Months Ended June 30, DEPRECIATION and AMORTIZATION 2025 2024 2025 2024 Segment: Home and Building Products $ 4,440 $ 3,883 $ 13,049 $ 11,288 Consumer and Professional Products 11,238 11,225 33,634 33,453 Total segment depreciation and amortization 15,678 15,108 46,683 44,741 Corporate 144 139 403 409 Total consolidated depreciation and amortization $ 15,822 $ 15,247 $ 47,086 $ 45,150 For the Three Months Ended June 30, For the Nine Months Ended June 30, 2025 2024 2025 2024 CAPITAL EXPENDITURES Segment: Home and Building Products $ 5,305 $ 8,533 $ 23,495 $ 31,566 Consumer and Professional Products 3,315 5,944 11,777 16,061 Total segment 8,620 14,477 35,272 47,627 Corporate 73 83 4,595 222 Total consolidated capital expenditures $ 8,693 $ 14,560 $ 39,867 $ 47,849 21 GRIFFON CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (US dollars and non US currencies in thousands, except per share data) (Unaudited) ASSETS At June 30, 2025 At September 30, 2024 Segment assets: Home and Building Products $ 764,895 $ 737,992 Consumer and Professional Products (1) 1,154,947 1,495,489 Total segment assets 1,919,842 2,233,481 Corporate 161,463 133,408 Total assets 2,081,305 2,366,889 Discontinued operations 6,015 4,065 Consolidated total $ 2,087,320 $ 2,370,954 ___________________ (1) In connection with the expansion of CPP's global sourcing strategy, certain owned manufacturing locations which ceased operations have met the criteria to be classified as held for sale. The net book value of these properties as of June 30, 2025 and September 30, 2024 totaled $ 5,289 and $ 14,532 , respectively. NOTE 14 – EMPLOYEE BENEFIT PLANS Defined benefit pension expense (income) included in Other Income (Expense), net was as follows: Three Months Ended June 30, Nine Months Ended June 30, 2025 2024 2025 2024 Interest cost $ 1,604 $ 1,889 $ 4,814 $ 5,666 Expected return on plan assets ( 2,542 ) ( 2,543 ) ( 7,625 ) ( 7,629 ) Amortization: Recognized actuarial loss 636 688 1,909 2,066 Net periodic (benefit) expense $ ( 302 ) $ 34 $ ( 902 ) $ 103 The Hunter Fan Pension Plan (the "Plan") was terminated with an effective date of April 30, 2024. This was communicated to Plan participants in February 2024. At the time of termination, the Plan was fully funded and the Company did not anticipate making additional funding contributions as of the benefit distribution dates. During the nine months ended June 30, 2025 the Plan paid lump sum payments in the amount of $ 4,830 to those participants that elected a lump sum distribution. Additionally, the Company selected an insurance company to hold the annuity and provide pension benefits to the plan participants currently receiving benefit payments and those that elected to continue their future benefit with an annuity provider. This decision included a transfer of plan assets valued at $ 10,859 . In July 2025, Griffon completed the termination of the Plan and $ 6,100 of excess cash was transferred to the Company, a portion of which was transferred directly to a qualified replacement plan. Additionally, the Company will recognize a gain on the termination of approximately $ 2,300 , net of excise taxes, in Other Income in the fourth quarter 2025. 22 GRIFFON CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (US dollars and non US currencies in thousands, except per share data) (Unaudited) NOTE 15 – RECENT ACCOUNTING PRONOUNCEMENTS Issued but not yet effective accounting pronouncements In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280), Improvements to Reportable Segment Disclosures. This standard expands disclosures regarding a public entity’s reportable segments and requires additional information about a reportable segment’s expenses, interim segment profit or loss, and how a public entity’s chief operating decision maker uses reported segment profit or loss information in assessing segment performance and allocating resources. The standard does not change the definition of operating segments. This standard is effective with the Company's fiscal year 2025. The standard should be applied retrospectively to all prior periods presented in the financial statements. The Company is currently evaluating this guidance to determine the impact it may have on its consolidated financial statements. In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740), Improvements to Income Tax Disclosure. The standard requires significant additional disclosures focused on income taxes paid and the rate reconciliation table. Specifically, the amendments in the standard require the Company to disclose disaggregated: (1) income taxes paid by federal, state, and foreign, (2) continuing operations pre-tax income between domestic and foreign, and (3) continuing operations income tax expense by federal, state and foreign. The standard also requires the Company to disclose specific categories in the rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. This standard is effective for the Company beginning with our fiscal year 2026, with retrospective application permitted. The Company is currently evaluating the potential changes to its income tax disclosures and related impact on its financial reporting processes and information technology systems. The Company does not expect the adoption of this standard to have a material impact on its financial position, results of operations, or cash flows. In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures: Disaggregation of Income Statement Expenses. This guidance requires disclosures regarding specific information about certain costs and expenses, including but not limited to, inventory purchases, employee compensation, depreciation, amortization and selling expenses. The guidance is effective for the Company beginning with the Company's fiscal year 2027 and interim reporting periods beginning with our 2028 fiscal year. Implementation of this standard may be applied prospectively or retrospectively. The Company does not expect the adoption of this standard to have a material impact on the Company's financial statements and related disclosures. NOTE 16 – DISCONTINUED OPERATIONS 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, and total $ 9,035 and $ 7,768 , respectively. The increase in assets and liabilities was primarily associated with insurance claims receivable and payable. The following amounts summarize the total assets and liabilities which have been segregated from Griffon’s continuing operations, and are reported as assets and liabilities of discontinued operations in the Condensed Consolidated Balance Sheets: At June 30, 2025 At September 30, 2024 Assets of discontinued operations: Prepaid and other current assets $ 1,303 $ 648 Other long-term assets 4,712 3,417 Total assets of discontinued operations $ 6,015 $ 4,065 Liabilities of discontinued operations: Accrued liabilities, current $ 4,545 $ 4,498 Other long-term liabilities 4,490 3,270 Total liabilities of discontinued operations $ 9,035 $ 7,768 There was no reported revenues or costs in the nine months ended June 30, 2025 and 2024 for discontinued operations. 23 GRIFFON CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (US dollars and non US currencies in thousands, except per share data) (Unaudited) NOTE 17 – RESTRUCTURING CHARGES Griffon announced in May 2023 that CPP was expanding its global sourcing strategy to include long handled tools, material handling, and wood storage and organization product lines for the U.S. market. This initiative was successfully completed as of September 30, 2024, ahead of the previously announced date of December 31, 2024. As a result of this global sourcing expansion initiative, manufacturing operations have concluded at four manufacturing sites and four wood mills, resulting in a total facility footprint reduction of approximately 1.2 million square feet, or approximately 15 % of CPP's square footage, and a headcount reduction of approximately 600 . The closed locations have met the held for sale criteria and have been classified as such on our Condensed Consolidated Balance Sheets as of June 30, 2025 and September 30, 2024. The net book value of these properties as of June 30, 2025 and September 30, 2024 totaled $ 5,289 and $ 14,532 , respectively. The adoption of an asset-light business model for these U.S. products has positioned CPP to better serve customers with a more flexible and cost-effective sourcing model that leverages supplier relationships around the world, and improved its competitive positioning. Implementation of this strategy over the duration of the project resulted in charges of $ 133,777 , which included $ 51,082 of cash charges for employee retention and severance, operational transition, and facility and lease exit costs, and $ 82,695 of non-cash charges primarily related to asset write-downs. In addition, there were $ 2,678 of capital investments to effectuate the project. This excludes cash proceeds from the sale of real estate and equipment, which at the conclusion of the project as of September 30, 2024 totaled $ 13,271 , and excludes future proceeds from the sale of remaining real estate and equipment designated as held for sale on the condensed consolidated balance sheets. During the nine months ended June 30, 2025, cash proceeds related to the sale of the remaining real estate and equipment held for sale totaled $ 17,729 . In the quarter ended June 30, 2024, CPP incurred pre-tax restructuring and related exit costs totaling $ 18,688 , which consisted of cash charges totaling $ 4,191 and non-cash, asset-related charges of $ 14,497 . The cash charges included $ 709 for one-time termination benefits and other personnel-related costs and $ 3,482 for facility exit costs. Non-cash charges of $ 14,497 were recorded to adjust inventory to its net realizable value. In the nine months ended June 30, 2024, CPP incurred pre-tax restructuring and related exit costs approximating $ 33,489 , comprised of cash charges totaling $ 10,510 and non-cash, asset-related charges totaling $ 22,979 . The cash charges included $ 3,038 for one-time termination benefits and other personnel-related costs and $ 7,472 for facility exit costs. Non-cash charges of $ 22,979 were recorded to adjust inventory to its net realizable value. A summary of the restructuring and other related charges included in Cost of goods and services and SG&A expenses in the Company's Condensed Consolidated Statements of Operations were as follows: Three Months Ended June 30, Nine Months Ended June 30, 2024 2024 Cost of goods and services $ 15,744 $ 28,724 Selling, general and administrative expenses 2,944 4,765 Total $ 18,688 $ 33,489 Three Months Ended June 30, Nine Months Ended June 30, 2024 2024 Personnel related costs $ 709 $ 3,038 Facilities, exit costs and other 3,482 7,472 Non-cash facility and other 14,497 22,979 Total $ 18,688 $ 33,489 24 GRIFFON CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (US dollars and non US currencies in thousands, except per share data) (Unaudited) The following tables summarizes the accrued liabilities of the Company's restructuring actions for the nine months ended June 30, 2025 and 2024: Cash Charges Non-Cash Personnel related costs Facilities & Exit Costs Facility and Other Costs Total Accrued liability at September 30, 2024 $ 8,182 $ 4,816 $ — $ 12,998 Q1 Cash payments ( 5,009 ) ( 1,064 ) — ( 6,073 ) Accrued liability at December 31, 2024 $ 3,173 $ 3,752 $ — $ 6,925 Q2 Cash payments ( 83 ) ( 1,649 ) — ( 1,732 ) Accrued Liability at March 31, 2025 $ 3,090 $ 2,103 $ — $ 5,193 Q3 Cash payments — ( 630 ) — ( 630 ) Accrued Liability at June 30, 2025 $ 3,090 $ 1,473 $ — $ 4,563 Cash Charges Non-Cash Personnel related costs Facilities & Exit Costs Facility and Other Costs (1) Total Accrued liability at September 30, 2023 $ 14,107 $ 5,551 $ — $ 19,658 Q1 Restructuring charges 1,847 2,071 8,482 12,400 Q1 Cash payments ( 7,215 ) ( 3,362 ) — ( 10,577 ) Q1 Non-cash charges — ( 8,482 ) ( 8,482 ) Accrued liability at December 31, 2023 $ 8,739 $ 4,260 $ — $ 12,999 Q2 Restructuring charges 482 1,919 — 2,401 Q2 Cash payments ( 608 ) ( 1,919 ) — ( 2,527 ) Accrued liability at March 31, 2024 $ 8,613 $ 4,260 $ — $ 12,873 Q3 Restructuring charges 709 3,482 14,497 18,688 Q3 Cash payments ( 2,671 ) ( 4,345 ) — ( 7,016 ) Q3 Non-cash charges — — ( 14,497 ) ( 14,497 ) Accrued liability at June 30, 2024 $ 6,651 $ 3,397 $ — $ 10,048 ______________________ (1) Non-cash charges in Facility and Other Costs represent non-cash impairment charges to adjust inventory to its net realizable value. NOTE 18 – OTHER INCOME (EXPENSE) 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. 25 GRIFFON CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (US dollars and non US currencies in thousands, except per share data) (Unaudited) NOTE 19 – WARRANTY LIABILITY HBP and CPP offer warranties against product defects for periods generally ranging from one to ten years , with limited lifetime warranties on certain door and fan models. Typical warranties require HBP and CPP to repair or replace the defective products during the warranty period at no cost to the customer. At the time revenue is recognized, Griffon records a liability for warranty costs, estimated based on historical experience, and periodically assesses its warranty obligations and adjusts the liability as necessary. CPP offers an express limited warranty for a period of ninety days on all products from the date of original purchase unless otherwise stated on the product or packaging from the date of original purchase. Warranty costs expected to be incurred in the next 12 months are classified in accrued liabilities. Warranty costs expected to be incurred beyond one year are classified in other long-term liabilities. The short-term warranty liability was $ 10,706 as of June 30, 2025 and $ 13,050 as of September 30, 2024. The long-term warranty liability was $ 1,239 at both June 30, 2025 and September 30, 2024. Changes in Griffon’s warranty liability, included in Accrued liabilities, for the three and nine months ended June 30, 2025 and 2024 were as follows: Three Months Ended June 30, Nine Months Ended June 30, 2025 2024 2025 2024 Balance, beginning of period $ 12,253 $ 14,903 $ 13,050 $ 20,781 Warranties issued and changes in estimated pre-existing warranties 4,007 7,716 14,328 17,760 Actual warranty costs incurred ( 5,554 ) ( 6,966 ) ( 16,672 ) ( 22,888 ) Balance, end of period $ 10,706 $ 15,653 $ 10,706 $ 15,653 26 GRIFFON CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (US dollars and non US currencies in thousands, except per share data) (Unaudited) NOTE 20 – OTHER COMPREHENSIVE INCOME (LOSS) The amounts recognized in other comprehensive income (loss) were as follows: Three Months Ended June 30, 2025 2024 Pre-tax Tax Net of tax Pre-tax Tax Net of tax Foreign currency translation adjustments $ 12,244 $ — $ 12,244 $ ( 827 ) $ — $ ( 827 ) Pension and other defined benefit plans 1,136 ( 239 ) 897 673 ( 141 ) 532 Cash flow hedges ( 993 ) 298 ( 695 ) ( 1,324 ) 397 ( 927 ) Total other comprehensive income (loss) $ 12,387 $ 59 $ 12,446 $ ( 1,478 ) $ 256 $ ( 1,222 ) Nine Months Ended June 30, 2025 2024 Pre-tax Tax Net of tax Pre-tax Tax Net of tax Foreign currency translation adjustments $ ( 4,804 ) $ — $ ( 4,804 ) $ 2,212 $ — $ 2,212 Pension and other defined benefit plans 1,890 ( 397 ) 1,493 2,018 ( 423 ) 1,595 Cash flow hedges 678 ( 203 ) 475 786 ( 236 ) 550 Total other comprehensive income (loss) $ ( 2,236 ) $ ( 600 ) $ ( 2,836 ) $ 5,016 $ ( 659 ) $ 4,357 The components of Accumulated other comprehensive income (loss) are as follows: At June 30, 2025 At September 30, 2024 Foreign currency translation adjustments $ ( 43,390 ) $ ( 38,586 ) Pension and other defined benefit plans ( 17,634 ) ( 19,127 ) Cash flow hedges 164 ( 311 ) Total $ ( 60,860 ) $ ( 58,024 ) Amounts reclassified from accumulated other comprehensive income (loss) to income were as follows: For the Three Months Ended June 30, For the Nine Months Ended June 30, Gain (Loss) 2025 2024 2025 2024 Pension amortization $ ( 636 ) $ ( 688 ) $ ( 1,909 ) $ ( 2,066 ) Cash flow hedges 463 ( 69 ) 2,120 ( 960 ) Total gain (loss) before tax $ ( 173 ) $ ( 757 ) $ 211 $ ( 3,026 ) Tax 37 159 ( 44 ) 635 Net of tax $ ( 136 ) $ ( 598 ) $ 167 $ ( 2,391 ) 27 GRIFFON CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (US dollars and non US currencies in thousands, except per share data) (Unaudited) NOTE 21 — LEASES The Company recognizes right-of-use ("ROU") assets and lease liabilities on the balance sheet, with the exception of leases with a term of twelve months or less. The Company determines if an arrangement is a lease at inception. The ROU assets and short and long-term liabilities associated with our Operating leases are shown as separate line items on our Condensed Consolidated Balance Sheets. Finance leases are included in property, plant, and equipment, net, other accrued liabilities, and other non-current liabilities. The Company's finance leases are immaterial. ROU assets, along with any other related long-lived assets, are periodically evaluated for impairment. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. ROU assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. Lease payments primarily include rent and insurance costs (lease components). The Company's leases also include non-lease components such as real estate taxes and common-area maintenance costs. The Company elected the practical expedient to account for lease and non-lease components as a single component. In certain of the Company's leases, the non-lease components are variable and in accordance with the standard are therefore excluded from lease payments to determine the ROU asset. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. We use the implicit rate when readily determinable. Our determination of the lease term may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. For operating leases, fixed lease payments are recognized as operating lease cost on a straight-line basis over the lease term. For finance leases and impaired operating leases, the ROU asset is depreciated on a straight-line basis over the remaining lease term, along with recognition of interest expense associated with accretion of the lease liability. For leases with a lease term of 12 months or less (a "Short-term" lease), any fixed lease payments are recognized on a straight-line basis over such term, and are not recognized on the Condensed Consolidated Balance Sheets. Variable lease cost for both operating and finance leases, if any, is recognized as incurred. Components of operating lease costs are as follows: For the Three Months Ended June 30, For the Nine Months Ended June 30, 2025 2024 2025 2024 Fixed $ 11,878 $ 11,555 $ 35,463 $ 34,992 Variable (a), (b) 2,586 2,472 7,922 7,382 Short-term (b) 1,032 808 3,467 3,470 Total $ 15,496 $ 14,835 $ 46,852 $ 45,844 ________________ (a) Primarily relates to common-area maintenance and property taxes. (b) Not recorded on the balance sheet. Supplemental cash flow information were as follows: For the Nine Months Ended June 30, 2025 2024 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 32,574 $ 34,361 Financing cash flows from finance leases 117 239 Total $ 32,691 $ 34,600 28 GRIFFON CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (US dollars and non US currencies in thousands, except per share data) (Unaudited) Supplemental Condensed Consolidated Balance Sheet information related to leases were as follows: June 30, 2025 September 30, 2024 Operating Leases: Right of use assets: Operating right-of-use assets $ 162,819 $ 171,211 Lease Liabilities: Current portion of operating lease liabilities $ 31,997 $ 35,065 Long-term operating lease liabilities 142,213 147,369 Total operating lease liabilities $ 174,210 $ 182,434 Finance Leases: Property, plant and equipment, net (1) $ 523 $ 808 Lease Liabilities: Notes payable and current portion of long-term debt $ 123 $ 155 Long-term debt, net 171 255 Total financing lease liabilities $ 294 $ 410 (1) Finance lease assets are recorded net of accumulated depreciation of $ 1,391 and $ 1,463 as of June 30, 2025 and September 30, 2024, respectively. The aggregate future maturities of lease payments for operating leases and finance leases as of June 30, 2025 are as follows: Operating Leases Finance Leases 2025(a) $ 11,359 $ 42 2026 40,239 115 2027 35,468 55 2028 29,935 49 2029 24,649 49 2030 17,080 12 Thereafter 55,941 — Total lease payments $ 214,671 $ 322 Less: Imputed Interest ( 40,461 ) ( 28 ) Present value of lease liabilities $ 174,210 $ 294 (a) Excluding the nine months ended June 30, 2025. 29 GRIFFON CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (US dollars and non US currencies in thousands, except per share data) (Unaudited) Average lease terms and discount rates at June 30, 2025 were as follows: Weighted-average remaining lease term (years): Operating leases 6.7 Finance Leases 3.7 Weighted-average discount rate: Operating Leases 6.37 % Finance Leases 6.76 % NOTE 22 — COMMITMENTS AND CONTINGENCIES Legal and environmental Peekskill Site. Lightron Corporation (“Lightron”), a wholly-owned subsidiary of Griffon, once conducted lamp manufacturing and metal finishing operations at a location in the Town of Cortlandt, New York, just outside the city of Peekskill, New York (the “Peekskill Site”). ISC Properties, Inc. (“ISCP”), a wholly-owned subsidiary of Griffon, owned the Peekskill Site for approximately three years . ISCP sold the Peekskill Site in November 1982. Based upon studies conducted by ISCP and the New York Department of Environmental Conservation, soils and groundwater beneath the Peekskill Site contain chlorinated solvents and metals. Stream sediments downgradient from the Peekskill Site also contain metals. On May 15, 2019 the United States Environmental Protection Agency ("EPA") added the Peekskill Site to the National Priorities List under CERCLA and has since reached agreement with Lightron and ISCP pursuant to which Lightron and ISCP will perform a Remedial Investigation/Feasibility Study (“RI/FS”). Performance of the RI/FS is expected to be completed in 2025. Lightron has not engaged in any operations in over three decades. ISCP functioned solely as a real estate holding company and has not held any real property in over three decades. Griffon does not acknowledge any responsibility to perform any investigation or remediation at the Peekskill Site. Lightron and ISCP are being defended by an insurance company, subject to a reservation of rights, and this insurer is paying the costs of the RI. Memphis, TN site. Hunter Fan Company (“Hunter”) operated headquarters and a production plant in Memphis, TN for over 50 years (the “Memphis Site”). While Hunter completed certain on-site remediation of PCB-contaminated soils, Hunter did not investigate the extent to which PCBs existed beneath the building itself nor determine whether off-site areas had been impacted. Hunter vacated the site approximately twenty years ago, and the on-site buildings have now been demolished. The State of Tennessee Department of Environment and Conservation (“TDEC”) identified the Memphis site as being potentially contaminated, raising the possibility that site operations could have resulted in soil and groundwater contamination involving volatile organic compounds and metals. In 2021, the TDEC performed a preliminary assessment of the site and recommended to the EPA that it include the site on the National Priorities List established under CERCLA. The TDEC further recommended that the EPA fund an investigation of potential soil gas contamination in receptors near the site. The TDEC has also indicated that it will proceed with this investigation if the EPA does not act. Since 2021, there has been no further action by the EPA or TDEC relating to the Memphis site. It is unknown whether the EPA will add the Memphis Site to the National Priorities List, whether a site investigation will reveal contamination and, if there is contamination, the extent of any such contamination. However, given that certain PCB work was not completed in the past and the TDEC’s stated intent for the EPA to perform an investigation (and the statement by the TDEC that it will perform the investigation if the EPA will not), liability is probable in this matter. There are other potentially responsible parties for this site, including a former owner of Hunter; Hunter has notified such former owner of this matter. 30 GRIFFON CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (US dollars and non US currencies in thousands, except per share data) (Unaudited) If the EPA decides to add this site to the National Priorities List, a Remedial Investigation/Feasibility Study (“RI/FS”) will be required. Hunter expects that the EPA will ask it to perform this work. If Hunter does not reach an agreement with the EPA to perform this work, the EPA will implement the RI/FS on its own. Should the EPA implement the RI/FS or perform further studies and/or subsequently remediate the site without first reaching an agreement with one or more relevant parties, the EPA would likely seek reimbursement from such parties, including Hunter, for the costs incurred. General legal Griffon is subject to various laws and regulations relating to the protection of the environment and is a party to legal proceedings arising in the ordinary course of business. Management believes, based on facts presently known to it, that the resolution of the matters above and such other matters will not have a material adverse effect on Griffon’s consolidated financial position, results of operations or cash flows. 31 Table of Contents (Unless otherwise indicated, US Dollars and non-US currencies are in thousands, except per share data)