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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2025


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 1-06620

GRIFFON CORPORATION

(Exact name of registrant as specified in its charter)


Delaware			11-1893410
(State or other jurisdiction of			(I.R.S. Employer
incorporation or organization)			Identification No.)

712 Fifth Ave, 18th Floor	New York	New York	10019
(Address of principal executive offices)			(Zip Code)

(212) 957-5000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, $0.25 par value

GFF

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act:

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

The number of shares of common stock outstanding at April 30, 2025 was 47,025,919.

Griffon Corporation and Subsidiaries

Contents


			Page
PART I - FINANCIAL INFORMATION

Item 1 – Financial Statements

Condensed Consolidated Balance Sheets at March 31, 2025 (unaudited) and September 30, 2024			1

Condensed Consolidated Statement of Shareholders’ Equity for the Three and S ix Months Ended March 31 , 202 5 and 202 4 (unaudited)			2

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for the Three and Six Months Ended March 31, 2025 and 202 4 (unaudited)			4

Condensed Consolidated Statements of Cash Flows for the Six Months Ended March 31, 202 5 and 202 4 (unaudited)			5

Notes to Condensed Consolidated Financial Statements (unaudited)			6

Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations			32

Item 3 - Quantitative and Qualitative Disclosures about Market Risk			45

Item 4 - Controls & Procedures			46

PART II – OTHER INFORMATION

Item 1 – Legal Proceedings			46

Item 1A – Risk Factors			46

Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds			48

Item 3 – Defaults Upon Senior Securities			48

Item 4 – Mine Safety Disclosures			48

Item 5 – Other Information			49

Item 6 – Exhibits			49

Signatures			50

Table of Contents

Part I – Financial Information

Item 1 – Financial Statements

GRIFFON CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)


	(Unaudited)
	March 31, 2025		September 30, 2024
CURRENT ASSETS
Cash and equivalents	$	127,821	$	114,438
Accounts receivable, net of allowances of $11,155 and $10,986	301,481		312,765

Inventories	431,335		425,489
Prepaid and other current assets	53,263		61,604
Assets held for sale	5,450		14,532
Assets of discontinued operations	1,145		648
Total Current Assets	920,495		929,476
PROPERTY, PLANT AND EQUIPMENT, net	291,753		288,297
OPERATING LEASE RIGHT-OF-USE ASSETS	163,572		171,211
GOODWILL	329,529		329,393
INTANGIBLE ASSETS, net	604,440		618,782
OTHER ASSETS	29,712		30,378
ASSETS OF DISCONTINUED OPERATIONS	4,440		3,417
Total Assets	$	2,343,941	$	2,370,954

CURRENT LIABILITIES
Notes payable and current portion of long-term debt	$	8,133	$	8,155
Accounts payable	140,566		119,354
Accrued liabilities	144,784		181,918
Current portion of operating lease liabilities	32,445		35,065

Liabilities of discontinued operations	4,905		4,498
Total Current Liabilities	330,833		348,990
LONG-TERM DEBT, net	1,528,838		1,515,897
LONG-TERM OPERATING LEASE LIABILITIES	142,570		147,369
OTHER LIABILITIES	122,726		130,540
LIABILITIES OF DISCONTINUED OPERATIONS	4,232		3,270
Total Liabilities	2,129,199		2,146,066
COMMITMENTS AND CONTINGENCIES - See Note 22
SHAREHOLDERS’ EQUITY
Total Shareholders’ Equity	214,742		224,888
Total Liabilities and Shareholders’ Equity	$	2,343,941	$	2,370,954

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

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GRIFFON CORPORATION

CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY

For the Three and Six Months Ended March 31, 2025 and 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, 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

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

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	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

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

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GRIFFON CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(in thousands, except per share data)

(Unaudited)


	Three Months Ended March 31,				Six Months Ended March 31,
	2025		2024		2025		2024
Revenue	$	611,746	$	672,880	$	1,244,117	$	1,316,033
Cost of goods and services	359,535		402,215		727,630		808,727
Gross profit	252,211		270,665		516,487		507,306

Selling, general and administrative expenses	151,047		157,217		303,228		310,020



Income from operations	101,164		113,448		213,259		197,286

Other income (expense)
Interest expense	(23,930)		(26,149)		(48,817)		(51,448)
Interest income	708		637		1,114		1,061
Gain on sale of real estate	183		11		8,157		558

Other, net	512		626		2,344		1,258
Total other expense, net	(22,527)		(24,875)		(37,202)		(48,571)

Income before taxes	78,637		88,573		176,057		148,715
Provision for income taxes	21,875		24,430		48,444		42,395






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




Basic earnings per common share	$	1.24	$	1.34	$	2.80	$	2.20

Basic weighted-average shares outstanding	45,658		47,946		45,598		48,365




Diluted earnings per common share	$	1.21	$	1.28	$	2.70	$	2.10

Diluted weighted-average shares outstanding	46,900		49,931		47,226		50,714

Dividends paid per common share	$	0.18	$	0.15	$	0.36	$	0.30

Net income	$	56,762	$	64,143	$	127,613	$	106,320
Other comprehensive income (loss), net of taxes:
Foreign currency translation adjustments	2,970		(7,199)		(17,048)		3,039
Pension and other post retirement plans	541		531		596		1,063
Change in cash flow hedges	(1,094)		1,772		1,170		1,477

Total other comprehensive income (loss), net of taxes	2,417		(4,896)		(15,282)		5,579
Comprehensive income, net	$	59,179	$	59,247	$	112,331	$	111,899

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

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GRIFFON CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(Unaudited)


	Six Months Ended March 31,
	2025		2024
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	127,613	$	106,320

Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	31,264		29,903
Stock-based compensation	11,893		12,674

Asset impairment charges - restructuring	—		8,482
Provision for losses on accounts receivable	499		904
Amortization of debt discounts and issuance costs	2,070		2,113



Gain on sale of assets and investments	(27)		(517)
Gain on sale of real estate	(8,157)		(558)
Change in assets and liabilities:
(Increase) decrease in accounts receivable	5,225		(33,503)
(Increase) decrease in inventories	(11,928)		56,250
(Increase) decrease in prepaid and other assets	3,136		(5,766)
Increase (decrease) in accounts payable, accrued liabilities, income taxes payable and operating lease liabilities	(1,592)		7,979
Other changes, net	(571)		1,579
Net cash provided by operating activities	159,425		185,860
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property, plant and equipment	(31,174)		(33,289)




Proceeds from the sale of property, plant and equipment	17,575		1,272

Net cash used in investing activities	(13,599)		(32,017)
CASH FLOWS FROM FINANCING ACTIVITIES:

Dividends paid	(23,441)		(21,676)
Purchase of shares for treasury	(121,453)		(222,421)
Proceeds from long-term debt	63,000		179,500
Payments of long-term debt	(52,079)		(67,184)





Other, net	(27)		(262)
Net cash used in financing activities	(134,000)		(132,043)
CASH FLOWS FROM DISCONTINUED OPERATIONS:
Net cash used in operating activities	(289)		(3,273)
Net cash provided by investing activities	137		—

Net cash used in discontinued operations	(152)		(3,273)
Effect of exchange rate changes on cash and equivalents	1,709		1,614
NET INCREASE IN CASH AND EQUIVALENTS	13,383		20,141
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD	114,438		102,889
CASH AND EQUIVALENTS AT END OF PERIOD	$	127,821	$	123,030
Supplemental Disclosure of Non-Cash Flow Information:
Capital expenditures in accounts payable	$	1,934	$	2,931

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

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

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 March 31, 2025, the fair values of Griffon’s 2028 Senior Notes and Term Loan B facility approximated $950,406 and $453,000, respectively. Fair values were based upon quoted market prices (level 1 inputs).

Insurance contracts with values of $4,928 at March 31, 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 March 31, 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 March 31, 2025, Griffon had $31,000 of Australian Dollar contracts at a weighted average rate of $1.48 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 $2,124 ($1,487, net of tax) at March 31, 2025. Upon settlement, gains of $1,310 and $2,265 were recorded in COGS during the three and six months ended March 31, 2025. All contracts expire in 30 to 180 days.

At March 31, 2025, Griffon had $19,500 of Chinese Yuan contracts at a weighted average rate of $7.06 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

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 losses of $458 ($334, net of tax) at March 31, 2025. Upon settlement, losses of $388 and $608 were recorded in COGS during the three and six months ended March 31, 2025. All contracts expire in 2 to 214 days.

At March 31, 2025, Griffon had $10,197 of Canadian Dollar contracts at a weighted average rate of $1.38. The contracts, which protect Canadian operations from currency fluctuations for U.S. Dollar based purchases, do not qualify for hedge accounting. For the three and six months ended March 31, 2025, fair value losses of $53 and gains of $189 were recorded to Other liabilities and to Other income for the outstanding contracts, based on similar contract values (level 2 inputs). Realized gains of $89 and $135 were recorded in Other income during the three and six months ended March 31, 2025 for all settled contracts. All contracts expire in 1 to 419 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 preliminarily allocated to inventory of AUD 16,132 (approximately $10,752), property, plant and equipment, net of AUD 1,289 (approximately $859), accrued liabilities of AUD 1,194 (approximately $795), acquired intangibles, net of deferred taxes, of AUD 2,940 (approximately $1,960), and goodwill of AUD 2,640 (approximately $1,759), which was assigned to the CPP segment, and is not deductible for income tax purposes.

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 March 31, 2025		At September 30, 2024
Raw materials and supplies	$	94,511	$	92,366
Work in process	12,520		13,923
Finished goods	324,304		319,200
Total	$	431,335	$	425,489

In connection with the Company's restructuring activities described in Note 17, Restructuring Charges, during the six months ended March 31, 2024, CPP recorded inventory impairment charges of $8,482 to adjust inventory to its net realizable value. There were no impairment charges recorded during the six months ended March 31, 2025.

NOTE 6 – PROPERTY, PLANT AND EQUIPMENT

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


	At March 31, 2025		At September 30, 2024
Land, building and building improvements	$	155,079	$	153,076
Machinery and equipment(1)	486,250		472,030
Leasehold improvements	37,602		37,833
	678,931		662,939
Accumulated depreciation	(387,178)		(374,642)
Total	$	291,753	$	288,297

(1) Machinery and Equipment includes approximately $39,002 and $36,443 of construction in progress assets as of March 31, 2025 and September 30, 2024, respectively.

Depreciation and amortization expense for property, plant and equipment was $9,858 and $9,499 for the quarters ended March 31, 2025 and 2024, respectively, and $19,708 and $18,766 for the six months ended March 31, 2025 and 2024, respectively. Depreciation and amortization included in Selling, general and administrative ("SG&A") expenses was $4,088 and $4,095 for the quarters ended March 31, 2025 and 2024, respectively and $8,422 and $8,094 for the six months ended March 31, 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 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 March 31, 2025 and September 30, 2024 totaled $5,450 and $14,532, respectively.

During the six months ended March 31, 2025, no event or indicator of impairment occurred which would require additional impairment testing of property, plant and equipment.

GRIFFON CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

(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:


	Six months ended March 31,
	2025		2024
Beginning Balance, October 1	$	10,986	$	11,264

Provision for expected credit losses	499		904
Amounts written off charged against the allowance	(315)		(636)
Other, primarily foreign currency translation	(15)		35
Ending Balance, March 31	$	11,155	$	11,567

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

Indicators of impairment were not present for any of Griffon's reporting units during the six months ended March 31, 2025. The following table provides a summary of the carrying value of goodwill by segment as of March 31, 2025 and September 30, 2024, as follows:


	At September 30, 2024		Goodwill from acquisitions (1)		Foreign currency translation adjustments		At March 31, 2025
Home and Building Products	$	191,253	$	—	$	—	$	191,253
Consumer and Professional Products	138,140		230		(94)		138,276


Total	$	329,393	$	230	$	(94)	$	329,529

(1) The increase is due to preliminary purchase price allocation adjustments recorded during the three and six months ended March 31, 2025 related to the 2024 Pope acquisition.

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


	At March 31, 2025					At September 30, 2024
	Gross Carrying Amount		Accumulated Amortization		Average Life (Years)	Gross Carrying Amount		Accumulated Amortization
Customer relationships & other	$	447,401	$	140,537	17	$	450,784	$	134,296
Technology and patents	17,758		10,446		10	17,350		6,859
Total amortizable intangible assets	465,159		150,983			468,134		141,155
Trademarks	290,264		—			291,803		—
Total intangible assets	$	755,423	$	150,983		$	759,937	$	141,155

The gross carrying amount of intangible assets was impacted by $4,514 related to unfavorable foreign currency translation.

Amortization expense for intangible assets was $5,792 and $5,581 for the quarters ended March 31, 2025 and 2024, respectively, and $11,556 and $11,137 for the six months ended March 31, 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 - $11,152; 2026 - $22,708; 2027 - $22,107; 2028 - $22,107; 2029 - $22,107; 2030 - $22,107; thereafter $191,888.

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 March 31, 2025, the Company recognized a tax provision of $21,875 on income before taxes of $78,637, compared to a tax provision of $24,430 on income before taxes of $88,573 in the prior year quarter. The current year quarter results included strategic review costs - retention and other of $1,199 ($898, net of tax); gain on sale of real estate of $183 ($136, net of tax); and discrete and certain other tax provisions, net, that affect comparability of $75. The prior year quarter results included strategic review costs - retention and other of $2,676 ($1,997, net of tax); restructuring charges of $2,401 ($1,769, net of tax); gain on sale of real estate of $11 ($9, net of tax); and discrete and certain other tax benefits, net, that affect comparability of $390. Excluding these items, the effective tax rates for the quarters ended March 31, 2025 and 2024 were 27.7% and 27.9%, respectively.

During the six months ended March 31, 2025, the Company recognized a tax provision of $48,444 on income before taxes of $176,057, compared to a tax provision of $42,395 on income before taxes of $148,715 in the comparable prior year period. The six month period ended March 31, 2025 included strategic review costs - retention and other of $2,850 ($2,113, net of tax); gain on sale of real estate of $8,157 ($6,079, net of tax); and discrete and other tax benefits, net, that affect comparability of $175. The six month period ended March 31, 2024 included restructuring charges of $14,801 ($10,982, net of tax); strategic review - retention and other of $7,334 ($5,497, net of tax); gain on sale of real estate of $558 ($415, net of tax); and discrete and certain other tax provisions, net, that affect comparability of $393. Excluding these items, the effective tax rates for the six months ended March 31, 2025 and 2024 were 27.7% and 27.9%, respectively.

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 March 31, 2025 and September 30, 2024 consisted of the following:


		At March 31, 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	$	145	(5,890)		$	969,030	5.75	%		$	974,775	$	169	$	(6,900)	$	968,044	5.75	%
Term Loan B due 2029	(b)	453,000		(530)		(4,795)		447,675		Variable			457,000		(599)		(5,420)		450,981		Variable
Revolver due 2028	(b)	122,500		—		(2,486)		120,014		Variable			107,500		—		(2,859)		104,641		Variable

Non US lines of credit	(c)	—		—		(72)		(72)		Variable			—		—		(2)		(2)		Variable

Other long term debt	(d)	324		—		—		324		Variable			410		—		(22)		388		Variable
Totals		1,550,599		(385)		(13,243)		1,536,971					1,539,685		(430)		(15,203)		1,524,052
less: Current portion		(8,133)		—		—		(8,133)					(8,155)		—		—		(8,155)
Long-term debt		$	1,542,466	$	(385)	$	(13,243)	$	1,528,838				$	1,531,530	$	(430)	$	(15,203)	$	1,515,897

Interest expense for the three and six months ended March 31, 2025 and 2024 consists of the following:


		Three Months Ended March 31, 2025										Three Months Ended March 31, 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	%	$	14,020	$	(12)	$	505	$	14,513	6.0	%	$	14,012	$	(12)	$	505	$	14,505
Term Loan B due 2029	(b)	6.8	%	7,328		34		312		7,674		8.2	%	9,027		42		331		9,400
Revolver due 2028	(b)	Variable		1,669		—		187		1,856		Variable		2,231		—		187		2,418
Non US lines of credit	(c)	Variable		72		—		15		87		Variable		14		—		4		18

Other long term debt	(d)	Variable		19		—		—		19		Variable		115		—		1		116
Capitalized interest				(219)		—		—		(219)				(308)		—		—		(308)
Totals				$	22,889	$	22	$	1,019	$	23,930			$	25,091	$	30	$	1,028	$	26,149

GRIFFON CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

(Unaudited)


		Six Months Ended March 31, 2025										Six Months Ended March 31, 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	%	$	28,032	$	(24)	$	1,010	$	29,018	6.0	%	$	28,024	$	(24)	$	1,010	$	29,010
Term Loan B due 2029	(b)	7.0	%	15,383		69		625		16,077		8.2	%	18,244		85		661		18,990
Revolver due 2028	(b)	Variable		3,546		—		373		3,919		Variable		3,139		—		373		3,512
Non US lines of credit	(c)	Variable		74		—		17		91		Variable		14		—		8		22
Other long term debt	(d)	Variable		78		—		—		78		Variable		417		—		1		418
Capitalized interest				(366)		—		—		(366)				(504)		—		—		(504)
Totals				$	46,747	$	45	$	2,025	$	48,817			$	49,334	$	61	$	2,053	$	51,448

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 March 31, 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 $950,406 on March 31, 2025 based upon quoted market prices (Level 1 inputs). At March 31, 2025, $5,890 of underwriting fees and other expenses incurred remained to be amortized.

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

On June 26, 2024, Griffon further amended its Credit Agreement to favorably reprice the Term Loan B facility. 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 March 31, 2025, $4,795 of costs incurred remained to be amortized.

The Term Loan B bears interest at the Term SOFR rate plus a spread of 2.00% (6.32% as of March 31, 2025). The Term Loan B facility continues to require nominal quarterly principal payments of $2,000, potential additional annual principal payments based on a percentage of excess cash flow and certain secured leverage thresholds and a final balloon payment due at maturity. Term Loan B borrowings may generally be repaid without penalty. 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 $453,000 on March 31, 2025 based upon quoted market prices (Level 1 inputs).

On August 1, 2023, Griffon amended and restated the Credit Agreement to increase the maximum borrowing availability under the Revolver from $400,000 to $500,000 and extend the maturity date of the Revolver from March 22, 2025 to August 1, 2028. 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 1.75% (6.17% at March 31, 2025) and base rate loans accrue interest at prime rate plus a margin of 0.75% (8.25% at March 31, 2025).

At March 31, 2025, under the Credit Agreement, there was $122,500 in outstanding borrowings on the Revolver; outstanding standby letters of credit were $12,990; and $364,510 was available, subject to certain loan covenants, for borrowing at that date.

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% (4.27% as of March 31, 2025). At March 31, 2025 there was no balance outstanding under the facility with CAD 20,000 ($13,992 as of March 31, 2025) available for borrowing. The facility is secured by substantially all of the assets of Garant. Garant is required to maintain a certain minimum equity and a minimum interest coverage ratio.

During 2023, Griffon Australia Holdings Pty Ltd and its Australian subsidiaries (collectively, "Griffon Australia") amended its AUD 15,000 receivable purchase facility to AUD 30,000. The receivable purchase facility was renewed as of March 2025 and now matures in March 2026, but is renewable upon mutual agreement with the lender. The receivable purchase facility accrues interest at Bank Bill Swap Rate plus 1.25% (5.35% at March 31, 2025). At March 31, 2025, there was no balance outstanding under the receivable purchase facility with AUD 30,000 ($18,918 as of March 31, 2025) available for borrowing. The receivable purchase facility is secured by substantially all of the assets of Griffon Australia and its subsidiaries. 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 March 31, 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 six months ended March 31, 2025, the Company paid two 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 May 7, 2025, the Board of Directors declared a quarterly cash dividend of $0.18 per share, payable on June 18, 2025 to shareholders of record as of the close of business on May 30, 2025.

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 March 31, 2025, there were 1,877,159 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 March 31,				Six Months Ended March 31,
	2025		2024		2025		2024
Restricted stock	$	6,515	$	3,849	$	11,893	$	8,877
ESOP1	—		2,408		—		3,797
Total stock-based compensation	$	6,515	$	6,257	$	11,893	$	12,674

________________________

1.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.

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.

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

GRIFFON CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

(Unaudited)

shares of its common stock in the open market, including pursuant to a 10b5-1 plan, pursuant to an accelerated share repurchase program or issuer tender offer, or in privately negotiated transactions. Share repurchases during the quarter and six months ended March 31, 2025 totaled 420,200 and 1,030,372 shares of common stock, respectively, for a total of $30,524 and $72,868, respectively, or an average of $72.64 and $70.72 per share, respectively. This excludes excise taxes incurred for share repurchases of $303 and $716, for the quarter and six months ended March 31, 2025, respectively. As of March 31, 2025, $359,825 remains available under Griffon's Board authorized repurchase program.

On February 20, 2024, Griffon repurchased 1,500,000 shares of its common stock, par value $0.25 per share, 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 quarter and six months ended March 31, 2025, 519,644 and 583,893 shares, respectively, with a market value of $39,860, or $76.71 per share and $45,277, or $77.54 per share, respectively, were withheld to settle employee taxes due upon the vesting of restricted stock, and were added to treasury stock. This excludes excise tax benefits of $453 and $528 for the quarter and six months ended March 31, 2025, respectively.

NOTE 12 – EARNINGS PER SHARE (EPS)

Basic EPS was calculated by dividing income 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 March 31,		Six Months Ended March 31,
	2025	2024	2025	2024
Common shares outstanding	47,231	49,637	47,231	49,637
Unallocated ESOP shares	—	(131)	—	(131)
Non-vested restricted stock	(1,611)	(2,337)	(1,611)	(2,337)
Impact of weighted average shares	38	777	(22)	1,196
Weighted average shares outstanding - basic	45,658	47,946	45,598	48,365
Incremental shares from stock-based compensation	1,242	1,985	1,628	2,349
Weighted average shares outstanding - diluted	46,900	49,931	47,226	50,714

Shares of the ESOP that have been allocated to employee accounts are treated as outstanding in determining earnings per share.

GRIFFON CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

(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.

Information on Griffon’s reportable segments is as follows:


	For the Three Months Ended March 31,				For the Six Months Ended March 31,
REVENUE	2025		2024		2025		2024
Home and Building Products	$	368,248	$	392,062	$	763,649	$	787,853
Consumer and Professional Products	243,498		280,818		480,468		528,180
Total revenue	$	611,746	$	672,880	$	1,244,117	$	1,316,033

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 March 31,				Six Months Ended March 31,
	2025		2024		2025		2024
Residential repair and remodel	$	174,312	$	188,529	$	368,994	$	375,070
Commercial	162,355		170,740		329,222		347,733
Residential new construction	31,581		32,793		65,433		65,050
Total Home and Building Products	368,248		392,062		763,649		787,853
Residential repair and remodel	78,338		97,044		148,597		173,108
Retail	52,518		73,511		99,781		142,789
Residential new construction	12,498		13,676		26,879		27,681
Industrial	17,562		16,372		31,416		31,149
International excluding North America	82,582		80,215		173,795		153,453
Total Consumer and Professional Products	243,498		280,818		480,468		528,180








Total Consolidated Revenue	$	611,746	$	672,880	$	1,244,117	$	1,316,033

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 March 31,
	2025						2024
	HBP		CPP		Total			HBP		CPP		Total
United States	$	354,444	$	144,118	$	498,562		$	375,326	$	183,142	$	558,468
Europe	—		12,533		12,533			1		18,353		18,354
Canada	12,037		16,306		28,343			14,413		16,363		30,776
Australia	—		65,240		65,240			—		57,030		57,030
All other countries	1,767		5,301		7,068			2,322		5,930		8,252
Consolidated revenue	$	368,248	$	243,498	$	611,746		$	392,062	$	280,818	$	672,880


	For the Six Months Ended March 31,
	2025						2024
	HBP		CPP		Total		HBP		CPP		Total
United States	$	732,702	$	272,941	$	1,005,643	$	754,954	$	334,314	$	1,089,268
Europe	—		17,073		17,073		109		23,598		23,707
Canada	26,153		32,310		58,463		29,181		37,391		66,572
Australia	—		148,371		148,371		—		121,901		121,901
All other countries	4,794		9,773		14,567		3,609		10,976		14,585
Consolidated revenue	$	763,649	$	480,468	$	1,244,117	$	787,853	$	528,180	$	1,316,033

Griffon evaluates performance and allocates resources based on segment adjusted EBITDA and adjusted EBITDA, non-GAAP measures, which are defined as income before taxes, excluding interest income and expense, depreciation and amortization, strategic review charges, non-cash impairment charges, restructuring charges, gain/loss from debt extinguishment and acquisition related expenses, as well as other items that may affect comparability, as applicable. Segment adjusted EBITDA also excludes unallocated amounts, mainly corporate overhead. Griffon believes this information is useful to investors for the same reason. The following table provides a reconciliation of segment adjusted EBITDA and adjusted EBITDA to income before taxes:

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 March 31,				For the Six Months Ended March 31,
	2025		2024		2025		2024
Segment adjusted EBITDA:
Home and Building Products	$	109,434	$	128,924	$	236,476	$	253,643
Consumer and Professional Products	23,726		20,121		41,918		25,660



Segment adjusted EBITDA	133,160		149,045		278,394		279,303
Unallocated amounts, excluding depreciation *	(14,635)		(14,814)		(28,677)		(28,721)
Adjusted EBITDA	118,525		134,231		249,717		250,582
Net interest expense	(23,222)		(25,512)		(47,703)		(50,387)
Depreciation and amortization	(15,650)		(15,080)		(31,264)		(29,903)


Restructuring charges	—		(2,401)		—		(14,801)
Gain on sale of real estate	183		11		8,157		558
Strategic review - retention and other	(1,199)		(2,676)		(2,850)		(7,334)





Income before taxes	$	78,637	$	88,573	$	176,057	$	148,715

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


	For the Three Months Ended March 31,				For the Six Months Ended March 31,
DEPRECIATION and AMORTIZATION	2025		2024		2025		2024
Segment:
Home and Building Products	$	4,334	$	3,772	$	8,609	$	7,405
Consumer and Professional Products	11,178		11,171		22,396		22,228



Total segment depreciation and amortization	15,512		14,943		31,005		29,633
Corporate	138		137		259		270
Total consolidated depreciation and amortization	$	15,650	$	15,080	$	31,264	$	29,903

	For the Three Months Ended March 31,				For the Six Months Ended March 31,
	2025		2024		2025		2024

CAPITAL EXPENDITURES
Segment:
Home and Building Products	$	9,359	$	12,525	$	18,190	$	23,033
Consumer and Professional Products	4,101		6,368		8,462		10,117



Total segment	13,460		18,893		26,652		33,150
Corporate	258		66		4,522		139
Total consolidated capital expenditures	$	13,718	$	18,959	$	31,174	$	33,289

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 March 31, 2025		At September 30, 2024
Segment assets:
Home and Building Products	$	744,673	$	737,992
Consumer and Professional Products(1)	1,438,250		1,495,489

Total segment assets	2,182,923		2,233,481
Corporate	155,433		133,408
Total assets	2,338,356		2,366,889

Discontinued operations	5,585		4,065
Consolidated total	$	2,343,941	$	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 March 31, 2025 and September 30, 2024 totaled $5,450 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 March 31,				Six Months Ended March 31,
	2025		2024		2025		2024

Interest cost	$	1,605	$	1,889	$	3,210	$	3,777
Expected return on plan assets	(2,541)		(2,543)		(5,083)		(5,086)
Amortization:

Recognized actuarial loss	637		689		1,273		1,378

Net periodic (benefit) expense	$	(299)	$	35	$	(600)	$	69

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 six months ended March 31, 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 $10,895. The termination process is expected to be complete in 2025.

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 March 31, 2025 and September 30, 2024, Griffon’s liabilities for discontinued operations primarily relate to insurance claims, income taxes, product liability, warranty and environmental reserves, and total $9,137 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 March 31, 2025		At September 30, 2024
Assets of discontinued operations:
Prepaid and other current assets	$	1,145	$	648
Other long-term assets	4,440		3,417
Total assets of discontinued operations	$	5,585	$	4,065

Liabilities of discontinued operations:
Accrued liabilities, current	$	4,905	$	4,498
Other long-term liabilities	4,232		3,270
Total liabilities of discontinued operations	$	9,137	$	7,768

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

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 March 31, 2025 and September 30, 2024. The net book value of these properties as of March 31, 2025 and September 30, 2024 totaled $5,450 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 six months ended March 31, 2025, cash proceeds related to the sale of the remaining real estate and equipment held for sale totaled $17,445.

In the quarter ended March 31, 2024, CPP incurred pre-tax restructuring and related exit costs comprised of cash charges totaling $2,401. The cash charges included $482 for one-time termination benefits and other personnel-related costs and $1,919 for facility exit costs. In the six months ended March 31, 2024, CPP incurred pre-tax restructuring and related exit costs approximating $14,801, comprised of cash charges totaling $6,319 and non-cash, asset-related charges totaling $8,482. The cash charges included $2,329 for one-time termination benefits and other personnel-related costs and $3,990 for facility exit costs. Non-cash charges of $8,482 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 March 31,		Six Months Ended March 31,
	2024		2024
Cost of goods and services	$	1,334	$	12,980
Selling, general and administrative expenses	1,067		1,821
Total	$	2,401	$	14,801


	For the Three Months Ended March 31,		For the Six Months Ended March 31,
	2024		2024
Personnel related costs	$	482	$	2,329
Facilities, exit costs and other	1,919		3,990

Non-cash facility and other	—		8,482
Total	$	2,401	$	14,801

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 six months ended March 31, 2025 and 2024:


	Cash Charges				Non-Cash
	Personnel related costs		Facilities & Exit Costs		Facility and Other Costs(1)		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


	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

______________________

(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 March 31, 2025 and 2024, Other income (expense) of $512 and $626, respectively, includes ($222) and $179, respectively, of net currency exchange transaction gains (losses) from receivables and payables held in non-functional currencies, net periodic benefit plan income (expense) of $299 and ($35), respectively, and net investment income (loss) of ($16) and $29, respectively. Other income (expense) also includes royalty income of $556 and $509 for the three months ended March 31, 2025 and 2024, respectively.

For the six months ended March 31, 2025 and 2024, Other income (expense) of $2,344 and $1,258, respectively, includes $218 and $191, respectively, of net currency exchange transaction gains from receivables and payables held in non-functional currencies, net periodic benefit plan income (expense) of $600 and ($69), respectively, as well as $54 and $85, respectively, of net investment income. Other income (expense) also included royalty income of $1,146 and $1,100 for the six months ended March 31, 2025 and 2024, respectively.

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 $12,253 as of March 31, 2025 and $13,050 as of September 30, 2024. The long-term warranty liability was $1,239 at both March 31, 2025 and September 30, 2024.

Changes in Griffon’s warranty liability, included in Accrued liabilities, for the three and six months ended March 31, 2025 and 2024 were as follows:


	Three Months Ended March 31,				Six Months Ended March 31,
	2025		2024		2025		2024
Balance, beginning of period	$	13,123	$	15,461	$	13,050	$	20,781
Warranties issued and changes in estimated pre-existing warranties	5,119		9,104		10,321		10,044
Actual warranty costs incurred	(5,989)		(9,662)		(11,118)		(15,922)

Balance, end of period	$	12,253	$	14,903	$	12,253	$	14,903

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 March 31,
	2025						2024

	Pre-tax		Tax		Net of tax		Pre-tax		Tax		Net of tax
Foreign currency translation adjustments	$	2,970	$	—	$	2,970	$	(7,199)	$	—	$	(7,199)
Pension and other defined benefit plans	685		(144)		541		672		(141)		531
Cash flow hedges	(1,563)		469		(1,094)		2,531		(759)		1,772

Total other comprehensive income (loss)	$	2,092	$	325	$	2,417	$	(3,996)	$	(900)	$	(4,896)


	Six Months Ended March 31,
	2025						2024
	Pre-tax		Tax		Net of tax		Pre-tax		Tax		Net of tax
Foreign currency translation adjustments	$	(17,048)	$	—	$	(17,048)	$	3,039	$	—	$	3,039
Pension and other defined benefit plans	754		(158)		596		1,345		(282)		1,063
Cash flow hedges	1,671		(501)		1,170		2,110		(633)		1,477
Total other comprehensive income (loss)	$	(14,623)	$	(659)	$	(15,282)	$	6,494	$	(915)	$	5,579

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


	At March 31, 2025		At September 30, 2024
Foreign currency translation adjustments	$	(55,634)	$	(38,586)
Pension and other defined benefit plans	(18,531)		(19,127)
Cash flow hedges	859		(311)

Total	$	(73,306)	$	(58,024)

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


	For the Three Months Ended March 31,				For the Six Months Ended March 31,
Gain (Loss)	2025		2024		2025		2024


Pension amortization	$	(637)	$	(689)	$	(1,273)	$	(1,378)
Cash flow hedges	922		(780)		1,657		(891)

Total gain (loss) before tax	$	285	$	(1,469)	$	384	$	(2,269)
Tax	(60)		308		(81)		476
Net of tax	$	225	$	(1,161)	$	303	$	(1,793)

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 March 31,				For the Six Months Ended March 31,
	2025		2024		2025		2024
Fixed	$	11,951	$	11,863	$	23,585	$	23,437
Variable (a), (b)	2,669		2,436		5,336		4,910
Short-term (b)	1,192		1,081		2,435		2,662
Total	$	15,812	$	15,380	$	31,356	$	31,009

________________

(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 Six Months Ended March 31,
	2025		2024
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	21,324	$	22,707
Financing cash flows from finance leases	79		196
Total	$	21,403	$	22,903

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:


	March 31, 2025		September 30, 2024
Operating Leases:
Right of use assets:
Operating right-of-use assets	$	163,572	$	171,211

Lease Liabilities:
Current portion of operating lease liabilities	$	32,445	$	35,065
Long-term operating lease liabilities	142,570		147,369
Total operating lease liabilities	$	175,015	$	182,434

Finance Leases:
Property, plant and equipment, net(1)	$	598	$	808

Lease Liabilities:
Notes payable and current portion of long-term debt	$	133	$	155
Long-term debt, net	191		255
Total financing lease liabilities	$	324	$	410

(1) Finance lease assets are recorded net of accumulated depreciation of $1,312 and $1,463 as of March 31, 2025 and September 30, 2024, respectively.

The aggregate future maturities of lease payments for operating leases and finance leases as of March 31, 2025 are as follows:


	Operating Leases		Finance Leases
2025(a)	$	22,686	$	83
2026	38,421		115
2027	33,490		54
2028	27,849		50
2029	22,775		50
2030	15,517		12
Thereafter	55,836		—
Total lease payments	$	216,574	$	364
Less: Imputed Interest	(41,559)		(40)
Present value of lease liabilities	$	175,015	$	324

(a) Excluding the six months ended March 31, 2025.

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 March 31, 2025 were as follows:


Weighted-average remaining lease term (years):
Operating leases						6.84
Finance Leases						3.87

Weighted-average discount rate:
Operating Leases						6.35%
Finance Leases						6.74%

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.

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.

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(Unless otherwise indicated, US Dollars and non-US currencies are in thousands, except per share data)

Item 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations

BUSINESS

Overview

Griffon Corporation (the “Company”, “Griffon”, "we" or "us") is a diversified management and holding company that conducts business through wholly-owned subsidiaries. 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).

Business Strategy

Our strategic objective is to maintain leading positions in the markets we serve by providing innovative, branded products with superior quality and industry-leading service. We place emphasis on our iconic and well-respected brands, which helps to differentiate us and our offerings from our competitors and strengthens our relationship with our customers and those who ultimately use our products.

Through operating a diverse portfolio of businesses, we expect to reduce variability caused by external factors such as market cyclicality, seasonality, and weather. We achieve diversity by providing various product offerings and brands through multiple sales and distribution channels and conducting business across multiple countries which we consider our home markets.

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.

Since 2017, we have undertaken a series of transformative transactions to strengthen our core businesses and increase shareholder value. We divested our specialty plastics business in 2018 and our defense electronics (Telephonics) business in 2022 to focus on our core markets and improve our free cash flow conversion. In our Home and Building Products ("HBP") segment, we acquired CornellCookson, Inc. ("CornellCookson") in 2018, which has helped establish us as a leading North American manufacturer and marketer of residential garage doors and sectional commercial doors, and rolling steel doors and grille products, under brands that include Clopay, Ideal, Cornell and Cookson. In our Consumer and Professional Products ("CPP") segment, we expanded the scope of our brands through the acquisition of Hunter Fan Company ("Hunter") in January 2022 and ClosetMaid, LLC ("ClosetMaid") in 2018.

On July 1, 2024, Griffon announced that its subsidiary, The AMES Companies, Inc., ("AMES") expanded the scope of its Australian operations by acquiring substantially all the assets of Pope, a leading Australian provider of residential watering products, from The Toro Company (NYSE:TTC) for a purchase price of approximately AUD 21,800 (approximately $14,500) in cash. This is CPP's seventh acquisition in Australia since 2013, and further expands AMES's product portfolio in the Australian market. Pope is expected to contribute approximately $25,000 in revenue in the first twelve months after this acquisition.

Further Information

Griffon posts and makes available, free of charge through its website at www.griffon.com, its Annual Report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) of the Securities Exchange Act of 1934, as well as press releases, as soon as reasonably practicable after such materials are published or filed with or furnished to the Securities and Exchange Commission (the “SEC”). The information found on Griffon's website is not part of this or any other report it files with or furnishes to the SEC.

For information regarding revenue, profit and total assets of each segment, see the Reportable Segments footnote in the Notes to Consolidated Financial Statements.

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Reportable Segments:

Griffon conducts its operations through two reportable segments:

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OVERVIEW

Revenue for the quarter ended March 31, 2025 was $611,746 compared to $672,880 in the prior year quarter, a decrease of $61,134 or 9%, due to the decreased revenue at HBP and CPP of 6% and 13%, respectively. Net income was $56,762 or $1.21 per share, compared to $64,143, or $1.28 per share, in the prior year quarter.

The current year quarter results from operations included the following:

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

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

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

The prior year quarter results from operations included the following:

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

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

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

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

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

Revenue for the six months ended March 31, 2025 was $1,244,117 compared to $1,316,033 in the prior year period, a decrease of 5%, due to the decreased revenue at HBP and CPP of 3% and 9%, respectively. Net income was $127,613 or $2.70 per share, compared to net income of $106,320, or $2.10 per share, in the prior year period.

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

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

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

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

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

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

– Strategic review - retention and other of $7,334 ($5,497, net of tax, or $0.11 per share);

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

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

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

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Griffon evaluates performance based on adjusted net income and the related adjusted earnings per share, which are non-GAAP measures that exclude restructuring charges, non-cash impairment charges, loss from debt extinguishment, acquisition related expenses and discrete and certain other tax items, as well as other items that may affect comparability, as applicable. Griffon believes this information is useful to investors for the same reason. The following table provides a reconciliation of net income from operations to adjusted net income and earnings per share to adjusted earnings per share:


	For the Three Months Ended March 31,				For the Six Months Ended March 31,
	2025		2024		2025		2024
	(Unaudited)

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

Adjusting items:
Restructuring charges(1)	—		2,401		—		14,801

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




Strategic review - retention and other	1,199		2,676		2,850		7,334


Tax impact of above items(2)	(254)		(1,309)		1,341		(5,513)
Discrete and cer

GRIFFON CORP 10-Q