Griffon Corporation and Subsidiaries

Contents


			Page
PART I - FINANCIAL INFORMATION

			~~Page~~
~~PART I - FINANCIAL INFORMATION~~

Item 1 – Financial Statements

Condensed Consolidated Balance Sheets at March 31, ~~2020~~202 1 (unaudited) and September 30, ~~2019~~2020			1

Condensed Consolidated Statement of Shareholders’ Equity for the Three and Six Months Ended March 31, ~~2020~~202 1 and ~~2019~~20 20 (unaudited)			2

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for the Three and Six Months Ended March 31, ~~2020~~202 1 and ~~2019~~20 20 (unaudited)			4

Condensed Consolidated Statements of Cash Flows for the Six Months Ended March 31, ~~2020~~202 1 and ~~2019~~20 20 (unaudited)			5

Notes to Condensed Consolidated Financial Statements (unaudited)			7

Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations			4235

Item 3 - Quantitative and Qualitative Disclosures about Market Risk			5751

Item 4 - Controls & Procedures			5751

PART II – OTHER INFORMATION

Item 1 – Legal Proceedings			5852

Item 1A – Risk Factors			5852

Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds			5852

Item 3 – Defaults Upon Senior Securities			5952

Item 4 – Mine Safety Disclosures			5952

Item 5 – Other Information			5952

Item 6 – Exhibits			6053

Signatures			6154

Part I – Financial Information

Item 1 – Financial Statements

GRIFFON CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)


	(Unaudited)
	March 31, 2021		September 30, 2020
CURRENT ASSETS
Cash and equivalents	$	175,564	$	218,089
Accounts receivable, net of allowances of $9,594 and $8,505	399,193		340,546
Contract assets, net of progress payments of $20,449 and $24,175	75,000		84,426
Inventories	484,753		413,825
Prepaid and other current assets	55,705		46,897

Assets of discontinued operations	1,525		2,091
Total Current Assets	1,191,740		1,105,874
PROPERTY, PLANT AND EQUIPMENT, net	341,005		343,964
OPERATING LEASE RIGHT-OF-USE ASSETS	154,929		161,627
GOODWILL	446,365		442,643
INTANGIBLE ASSETS, net	357,506		355,028
OTHER ASSETS	27,440		32,897
ASSETS OF DISCONTINUED OPERATIONS	5,295		6,406
Total Assets	$	2,524,280	$	2,448,439

CURRENT LIABILITIES
Notes payable and current portion of long-term debt	$	14,913	$	9,922
Accounts payable	257,286		232,107
Accrued liabilities	151,091		163,994
Current portion of operating lease liabilities	30,685		31,848
Liabilities of discontinued operations	4,600		3,797
Total Current Liabilities	458,575		441,668
LONG-TERM DEBT, net	1,043,859		1,037,042
LONG-TERM OPERATING LEASE LIABILITIES	128,714		136,054
OTHER LIABILITIES	122,286		126,510
LIABILITIES OF DISCONTINUED OPERATIONS	6,415		7,014
Total Liabilities	1,759,849		1,748,288
COMMITMENTS AND CONTINGENCIES - See Note 22	0		0
SHAREHOLDERS’ EQUITY
Total Shareholders’ Equity	764,431		700,151
Total Liabilities and Shareholders’ Equity	$	2,524,280	$	2,448,439

(Unaudited)

March 31,
2020
September 30,
2019
CURRENT ASSETS

Cash and equivalents $ 69,024

$ 72,377
Accounts receivable, net of allowances of $12,681 and $7,881 335,033

264,450
Contract costs and recognized income not yet billed, net of progress payments of $22,294 and $13,861 94,495

105,111
Inventories 462,119

442,121
Prepaid and other current assets 42,723

40,799
Assets of discontinued operations 321

321
Total Current Assets 1,003,715

925,179
PROPERTY, PLANT AND EQUIPMENT, net 335,820

337,326
OPERATING LEASE RIGHT-OF-USE ASSETS 156,258
—
GOODWILL 436,782

437,067
INTANGIBLE ASSETS, net 353,743

356,639
OTHER ASSETS 29,556

15,840
ASSETS OF DISCONTINUED OPERATIONS 2,873

2,888
Total Assets $ 2,318,747

$ 2,074,939

CURRENT LIABILITIES

Notes payable and current portion of long-term debt $ 9,470

$ 10,525
Accounts payable 228,674

250,576
Accrued liabilities 118,479

124,665
Current portion of operating lease liabilities 28,047

—
Liabilities of discontinued operations 2,450

4,333
Total Current Liabilities 387,120

390,099
LONG-TERM DEBT, net 1,216,226

1,093,749
LONG-TERM OPERATING LEASE LIABILITIES 133,498
—
OTHER LIABILITIES 102,295

109,997
LIABILITIES OF DISCONTINUED OPERATIONS 3,154

3,331
Total Liabilities 1,842,293

1,597,176
COMMITMENTS AND CONTINGENCIES - See Note 21

SHAREHOLDERS’ EQUITY

Total Shareholders’ Equity 476,454

477,763
Total Liabilities and Shareholders’ Equity $ 2,318,747

$ 2,074,939

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

Table of Contents

GRIFFON CORPORATION

CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY

For the Three and Six Months Ended March 31, 2021

(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, 2020	83,739	$	20,935	$	583,008	$	607,518	27,610	$	(413,493)	$	(72,092)	$	(25,725)	$	700,151
Net income	—	—		—		29,500		—	—		—		—		29,500

Dividend	—	—		—		(4,469)		—	—		—		—		(4,469)
Shares withheld on employee taxes on vested equity awards	—	—		—		—		133	(2,909)		—		—		(2,909)
Amortization of deferred compensation	—	—		—		—		—	—		—		609		609


Equity awards granted, net	494	123		(123)		—		—	—		—		—		0



ESOP allocation of common stock	—	—		596		—		—	—		—		—		596
Stock-based compensation	—	—		3,428		—		—	—		—		—		3,428

Other comprehensive income, net of tax	—	—		—		—		—	—		13,141		—		13,141
Balance at December 31, 2020	84,233	$	21,058	$	586,909	$	632,549	27,743	$	(416,402)	$	(58,951)	$	(25,116)	740,047
Net income	—	—		—		17,112		—	—		—		—		17,112

Dividend	—	—		—		(3,217)		—	—		—		—		(3,217)

Amortization of deferred compensation	—	—		—		—		—	—		—		609		609


Equity awards granted, net	194	48		(48)		—		—	—		—		—		0



ESOP allocation of common stock	—	—		756		—		—	—		—		—		756
Stock-based compensation	—	—		4,349		—		—	—		—		—		4,349

Other comprehensive income, net of tax	—	—		—		—		—	—		4,775		—		4,775
Balance at March 31, 2021	84,427	$	21,106	$	591,966	$	646,444	27,743	$	(416,402)	$	(54,176)	$	(24,507)	$	764,431

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

Table of Contents

GRIFFON CORPORATION

CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY

For the Three and Six Months Ended March 31, 2020 ~~and 2019~~

(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, 2019 82,775
$ 20,694
$ 519,017
$ 568,516
35,969
$ (536,308 ) $ (65,916 ) $ (28,240 ) $ 477,763
Net income —
—
—
10,612
—
—
—
—
10,612
Dividend —
—
—
(3,392 ) —
—
—
—
(3,392 )
Shares withheld on employee taxes on vested equity awards —
—
—
—
80
(1,758 ) —
—
(1,758 )
Amortization of deferred compensation —
—
—
—
—
—
—
629
629
Equity awards granted, net 182
45
(45 ) —
—
—
—
—
—
ESOP allocation of common stock —
—
609
—
—
—
—
—
609
Stock-based compensation —
—
3,150
—
—
—
—
—
3,150
Stock-based consideration —
—
239
—
—
—
—
—
239
Other comprehensive income, net of tax —
—
—
—
—
—
6,841
—
6,841
Balance at December 31, 2019 82,957
$ 20,739
$ 522,970
$ 575,736
36,049
$ (538,066 ) $ (59,075 ) $ (27,611 ) $ 494,693
Net income —
—
—
895
—
—
—
—
895
Dividend —
—
—
(3,422 ) —
—
—
—
(3,422 )
Shares withheld on employee taxes on vested equity awards —
—
—
—
261
(5,721 ) —
—
(5,721 )
Amortization of deferred compensation —
—
—
—
—
—
—
629
629
Equity awards granted, net 784
196
(196 ) —

—

—

—

—
—
ESOP allocation of common stock —
—
435
—
—
—
—
—
435
Stock-based compensation —
—
3,662
—
—
—
—
—
3,662
Stock-based consideration —
—
117
—
—
—
—
—
117
Other comprehensive income, net of tax —
—
—
—
—
—
(14,834 ) —
(14,834 )
Balance at March 31, 2020 83,741
$ 20,935
$ 526,988
$ 573,209
36,310
$ (543,787 ) $ (73,909 ) $ (26,982 ) $ 476,454


																													COMMON STOCK						CAPITAL IN EXCESS OF PAR VALUE				RETAINED EARNINGS				TREASURY SHARES						ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)			DEFERRED COMPENSATION
(in thousands)																											(in thousands)		SHARES				PAR VALUE								SHARES			COST							TOTAL
Balance at September 30, 2019																											Balance at September 30, 2019		82,775				$	20,694			$	519,017			$	568,516		35,969			$	(536,308)				$	(65,916)	$	(28,240)	$	477,763
Net income																											Net income		—				—		—				10,612				—		—				—			—		10,612

Dividend																											Dividend		—				—		—				(3,392)				—		—				—			—		(3,392)
Shares withheld on employee taxes on vested equity awards																											Shares withheld on employee taxes on vested equity awards		—				—		—				—				80		(1,758)				—			—		(1,758)
Amortization of deferred compensation																											Amortization of deferred compensation		—				—		—				—				—		—				—			629		629

Equity awards granted, net																											Equity awards granted, net		182				45		(45)				—				—		—				—			—		0

	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, 2018	81,520	$	20,380			$	503,396				$	550,523	35,846			$			(534,830	)				$	(34,112	)		$	(30,966	)	$	474,391
Net income	—	—		—				8,753				—	—				—				—			8,753
Cumulative catch-up adjustment related to adoption of ASC 606(1)	—	—		—				(5,673		)		—	—				—				—			(5,673		)
Dividend	—	—		—				(3,143		)		—	—				—				—			(3,143		)
Shares withheld on employee taxes on vested equity awards	—	—		—				—				83	(1,058		)		—				—			(1,058		)
Amortization of deferred compensation	—	—		—				—				—	—				—				856			856
Common stock acquired	—	—		—				—				29	(290		)		—				—			(290		)
Equity awards granted, net	1,201	300		(300		)		—				—	—				—				—			—
ESOP allocation of common stock	—	—		(8		)		—				—	—				—				—			(8		)	ESOP allocation of common stock		—				—		609				—				—		—				—			—		609
Stock-based compensation	—	—		2,933				—				—	—				—				—			2,933			Stock-based compensation		—				—		3,150				—				—		—				—			—		3,150
Stock-based consideration	—	—		250				—				—	—				—				—			250			Stock-based consideration		—				—		239				—				—		—				—			—		239
Other comprehensive income, net of tax	—	—		—				—				—	—				(5,450		)		—			(5,450		)	Other comprehensive income, net of tax		—				—		—				—				—		—				6,841			—		6,841
Balance at December 31, 2018	82,721	$	20,680	$	506,271			$	550,460			35,958	$	(536,178	)		$	(39,562	)		$	(30,110	)	$	471,561
Net loss	—	—		—				(1,156		)		—	—				—				—			(1,156		)
Balance at December 31, 2019																											Balance at December 31, 2019		82,957				$	20,739	$	522,970			$	575,736			36,049		$	(538,066)			$	(59,075)		$	(27,611)	$	494,693
Net income																											Net income		—				—		—				895				—		—				—			—		895

Dividend	—	—		—				(3,704		)		—	—				—				—			(3,704		)	Dividend		—				—		—				(3,422)				—		—				—			—		(3,422)
Shares withheld on employee taxes on vested equity awards	—	—		—				—				3	(48		)		—				—			(48		)	Shares withheld on employee taxes on vested equity awards		—				—		—				—				261		(5,721)				—			—		(5,721)
Amortization of deferred compensation	—	—		—				—				—	—				—				507			507			Amortization of deferred compensation		—				—		—				—				—		—				—			629		629
Common stock acquired	—	—		—				—				8	(82		)		—				—			(82		)

Equity awards granted, net	48	12		(12		)		—				—	—				—				—			—			Equity awards granted, net		784				196		(196)				—				—		—				—			—		0

ESOP allocation of common stock	—	—		601				—				—	—				—				—			601			ESOP allocation of common stock		—				—		435				—				—		—				—			—		435
Stock-based compensation	—	—		3,422				—				—	—				—				—			3,422			Stock-based compensation		—				—		3,662				—				—		—				—			—		3,662
Stock-based consideration	—	—		303				—				—	—				—				—			303			Stock-based consideration		—				—		117				—				—		—				—			—		117
Other comprehensive income, net of tax	—	—		—				—				—	—				2,880				—			2,880			Other comprehensive income, net of tax		—				—		—				—				—		—				(14,834)			—		(14,834)
Balance at March 31, 2019	82,769	$	20,692	$	510,585			$	545,600			35,969	$	(536,308	)		$	(36,682	)		$	(29,603	)	$	474,284
Balance at March 31, 2020																											Balance at March 31, 2020		83,741				$	20,935	$	526,988			$	573,209			36,310		$	(543,787)			$	(73,909)		$	(26,982)	$	476,454

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

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 currently conducts its operations through 3 reportable segments:

•Consumer and Professional Products ("CPP") conducts its operations through The AMES Companies, Inc. ("AMES"). Founded in 1774, AMES is the leading North American manufacturer and a global provider of branded consumer and professional tools and products for home storage and organization, landscaping, and enhancing outdoor lifestyles. CPP sells products globally through a portfolio of leading brands including True Temper, AMES, and ClosetMaid.

•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 CornellCookson brand.

•Defense Electronics ("DE") conducts its operations through Telephonics Corporation ("Telephonics"), founded in 1933, a globally recognized leading provider of highly sophisticated intelligence, surveillance and communications solutions for defense, aerospace and commercial customers.

In March 2020, the World Health Organization declared the outbreak of COVID-19 a pandemic, which continues to spread throughout the U.S. and the world. The impact from the rapidly changing U.S. and global market and economic conditions due to the COVID-19 outbreak is uncertain, with disruptions to the business of our customers and suppliers, which ~~in turn is likely to~~could impact our business and consolidated results of operations and financial condition in the future. While we have not incurred significant disruptions to our manufacturing or to our supply chain thus far from the COVID-19 outbreak, we are unable to accurately predict the impact COVID-19 will have due to numerous uncertainties, including the severity of the disease, the duration of the outbreak, actions that may be taken by governmental authorities, the impact to our customers’ and suppliers’ businesses and other factors identified in Part II, Item 1A “Risk Factors” in this Form 10-Q. We will continue to evaluate the nature and extent of the impact to our business, consolidated results of operations, and financial condition.

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)

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 year ended September 30, ~~2019,~~2020, 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 CPP operations 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, ~~2019~~2020 was derived from the audited financial statements included in Griffon’s Annual Report on Form 10-K for the year ended September 30, ~~2019.~~2020.

The condensed consolidated financial statements include the accounts of Griffon and all subsidiaries. Intercompany accounts and transactions have been eliminated in consolidation.

The preparation of financial statements in conformity with ~~US GAAP~~accounting principles generally accepted in the United States 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 allowances for doubtful accounts receivable and returns, net realizable value of inventories, restructuring reserves, valuation of goodwill and intangible assets, ~~percentage of completion method of accounting,~~sales, profits and loss recognition for performance obligations satisfied over time, assumptions associated with pension ~~assumptions,~~benefit obligations and income or expenses, useful lives associated with depreciation and amortization of ~~fixed~~intangible and ~~intangible~~fixed assets, warranty reserves, sales incentive accruals, assumption associated with stock based compensation ~~assumptions,~~valuation, income taxes and tax valuation reserves, environmental reserves, legal reserves, insurance reserves, ~~and~~ the valuation of assets and liabilities of discontinued operations, ~~acquisition~~ assumptions ~~used~~associated with valuation of acquired assets and assumed liabilities of acquired companies 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.

Certain amounts in the prior year have been reclassified to conform to current year presentation.

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.

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)

•Level 3 inputs are unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.

The fair values of Griffon’s ~~2022 and~~ 2028 senior notes approximated ~~$139,500 and $799,000, respectively,~~$1,060,000 on March 31, ~~2020.~~2021. Fair values were based upon quoted market prices (level 1 inputs).

Insurance contracts with values of ~~$3,382~~$3,821 at March 31, ~~2020~~2021 are measured and recorded at fair value based upon quoted prices in active markets for similar assets (level 2 inputs) and are included in Prepaid and other current assets on the Consolidated Balance Sheets.

Items Measured at Fair Value on a Recurring Basis

At March 31, ~~2020,~~2021, trading securities, measured at fair value based on quoted prices in active markets for similar assets (level 2 inputs), with a fair value of ~~$2,605~~$2,088 ($~~2,236~~1,000 cost basis), were included in Prepaid and other current assets on the Consolidated Balance Sheets. Realized and unrealized gains and losses on trading securities are included in Other income in the Consolidated Statements of Operations and Comprehensive Income (Loss).

In the normal course of business, Griffon’s operations are exposed to the effects of changes in foreign currency exchange rates. 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, ~~2020,~~2021, Griffon entered into several such contracts in order to lock into a foreign currency rate for planned settlements of trade and inter-company liabilities payable in US dollars.

At March 31, ~~2020,~~2021, Griffon had ~~$8,000~~$61,000 of Australian dollar contracts at a weighted average rate of ~~$1.63~~$1.29 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~~losses of ~~$849~~$831 ($~~552,~~582, net of tax) at March 31, ~~2020~~2021. Upon settlement, losses of $1,741 and ~~gains of $1,050 and $994~~$2,399 were recorded in COGS during the three and six months ended March 31, ~~2020,~~2021, respectively. All contracts expire in 30 to 180 days.

At March 31, 2021, Griffon had $7,935 of Canadian dollar contracts at a weighted average rate of $1.30. The contracts, which protect Canadian operations from currency fluctuations for US dollar based purchases, do not qualify for hedge accounting. For the three and six months ended March 31, 2021, fair value gains of $520 and $244, respectively, were recorded to Other liabilities and to Other income for the outstanding contracts, based on similar contract values (level 2 inputs). Realized losses of $102 and $161 were recorded in Other income during the three and six months ended March 31, 2021, respectively, for all settled contracts. All contracts expire in 3029 to 90450 days.

At March 31, ~~2020,~~2021, Griffon had ~~$3,300 and $4,350~~$5,200 of ~~Canadian and~~ British Pound dollar contracts ~~respectively,~~ at a weighted average rate of ~~$1.41 and $0.81 respectively.~~$0.75. The contracts, which protect ~~Canadian and~~ United Kingdom operations from currency fluctuations for US dollar based purchases, do not qualify for hedge accounting. For the three and six months ended March 31, ~~2020,~~2021, fair value gains of ~~$ $271~~$386 and ~~$199~~$141, respectively, were recorded to Other assets and to Other income for the outstanding contracts, based on similar contract values (level 2 inputs). Realized ~~gains~~losses of ~~$84~~$211 and ~~$87~~$281 were recorded in Other income during the three and six months ended March 31, ~~2020, respectively, for all settled contracts.~~2021, respectively. All contracts expire in 306 to ~~180~~104 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.~~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

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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)

the consideration the Company expects to be entitled to in exchange for those products or services (the transaction price).

A contract's transaction price is allocated to each distinct performance obligation and recognized as revenue when each performance obligation is satisfied. A majority of the Company’s contracts have a single performance obligation which represents, in most cases, the product being sold to the customer. To a lesser extent, some contracts include multiple performance obligations such as a product, the related installation, and extended warranty services. These contracts require judgment in determining the number of performance obligations.

~~Over 80%~~Approximately 86% of the Company’s performance obligations are recognized at a point in time ~~that relates~~related to the manufacture and sale of a broad range of products and components primarily within the CPP and HBP ~~segments,~~Segments, and revenue is recognized when title, and risk and rewards of ownership, have transferred to the ~~customer. A majority of CPP and HBP segment revenue~~customer, which is ~~short cycle in nature with shipments occurring within one year from order and does not include a material long-term financing component, implicitly or explicitly. Less than 20%~~generally upon shipment.

Approximately 14% of the Company’s performance obligations are recognized over time ~~or under the percentage-of-completion method; these~~and relate to prime or subcontractors from contract awards with the U.S. Government, as well as foreign governments and other commercial customers within our DE ~~segment. These contracts are typically long-term in nature, usually greater than one year and do not include a material long-term financing component, either implicitly or explicitly.~~Segment. Revenue and profits from such contracts are recognized under the percentage-of-completion (over time) method of accounting. Revenue and profits on fixed-price contracts that contain engineering as well as production requirements are recorded based on the ratio of total actual incurred costs to date to the total estimated costs for each contract (cost-to-cost method).

~~Sales~~ recognized over time are generally accounted for using an input measure to determine progress completed at the end of the period. We believe that cumulative costs incurred to date as a percentage of estimated total contract costs at completion (cost-to-cost method) is an appropriate measure of progress towards satisfaction of performance obligations recognized over time, as it most accurately depicts the progress of our work and transfer of control to our customers.

Accounting for the sales and profits on performance obligations for which progress is measured using the cost-to-costmethod relies on the substantial use of estimates; these projections may be revised throughout the life of a contract.Adjustments to estimates for a contract's estimated costs at completion and estimated profit or loss are often required as experience is gained, more information is obtained (even though the scope of work required under the contract may or may not change) and contract modifications occur. The impact of such adjustments to estimates is made on a cumulative basis in the period when such information has become known. For the three and six months ended March 31, 2021, income from operations included net unfavorable catch up adjustments approximating $1,423 and $3,220, respectively. For the three and six months ended March 31, 2020, income from operations included net unfavorable catch up adjustments ~~approximating $2,224~~of $2,188 and ~~$5,243,~~$422, respectively. Gross profit is impacted by a variety of factors, including the mix of products, systems and services, production efficiencies, price competition and general economic conditions.

We believe that cumulative costs incurred to date as a percentage of estimated total contract costs at completion is an appropriate measure of progress towards satisfaction of performance obligations, as it most accurately depicts the progress of our work and transfer of control to our customers.

For contracts in which anticipated total costs exceed the total expected revenue, an estimated loss is recognized in the period when identifiable. A provision for the entire amount of the estimated loss is recorded on a cumulative basis, and is recorded as a reduction to gross margin on the Consolidated Statements of Operations and Comprehensive Income (Loss). ~~The provision~~These provisions had an immaterial impact on Griffon's Consolidated Financial Statements. The estimated remaining costs to complete loss contracts as of March 31, ~~2020~~2021 and September 30, ~~2019~~2020 were approximately ~~$8,560~~$8,500 and ~~$9,790,~~$10,800, respectively.

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, ~~2019.~~2020. See Note 1213 - Business Segments for revenue from contracts with customers disaggregated by end markets, segments and geographic location.

Transaction Price Allocated to the Remaining Performance Obligations

On March 31, ~~2020,~~2021, we had ~~$331,740~~$353,870 of remaining performance obligations, which we also refer to as total backlog. We expect to recognize approximately ~~73%~~65% of our remaining performance obligations as revenue within one year, with the balance to be completed thereafter.

Backlog represents the dollar value of funded orders for which work has not been performed. Backlog generally increases with bookings, and converts into revenue as we incur costs related to contractual commitments or the shipment of product. Given the nature of our business and a larger dependency on international customers, our bookings, and therefore our backlog, is impacted by the longer maturation cycles resulting in delays in the timing and amounts of such awards, which are subject to numerous factors, including fiscal constraints placed on customer budgets; political uncertainty; the timing of customer negotiations; and the timing of governmental approvals.

Contract Balances

Contract assets were ~~$94,495~~$75,000 as of March 31, ~~2020~~2021 compared to ~~$105,111~~$84,426 as of September 30, ~~2019.~~2020. The ~~$10,616~~$9,426 net decrease in our contract assets balance was primarily due to the timing of billings and work performed ~~on various radar~~in Surveillance programs and ~~surveillance programs.~~decrease associated with the sale of Systems Engineering Group, Inc. ("SEG"). Contract assets primarily relate to the Company's right to consideration for work completed but not billed at the reporting date and are recorded in Contract costs and recognized income not yet billed, net of progress payments in the Consolidated Balance Sheets. Contract assets are transferred to receivables when the right to consideration becomes unconditional. Contract costs and recognized income not yet billed

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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)

consists of amounts accounted for under the percentage of completion method of accounting, and represent recoverable costs and accrued profit that cannot yet be invoiced under the terms of certain long-term contracts. Amounts will be invoiced when applicable contract terms, such as the achievement of specified milestones or product delivery, are met. At March 31, ~~2020~~2021 and September 30, ~~2019,~~2020, approximately ~~$12,612~~$7,700 and ~~$13,100,~~$7,500, respectively, of contract costs and recognized income not yet billed were expected to be collected after one year. As of March 31, 2020, Contract costs and recognized income not yet billed included approximately $1,570 of reserves for contract risk. As of September 30, 2019, Contract costs and recognized income not yet billed included no reserves for contract risk.

Contract liabilities were ~~$21,292~~$22,964 as of March 31, ~~2020~~2021 compared to ~~$26,259~~$24,386 as of September 30, ~~2019.~~2020. The ~~$4,967~~$1,422 decrease in the contract liabilities balance was primarily due to ~~the~~ recognition of revenue ~~primarily from surveillance~~in Naval & Cyber systems, partially offset by billings in Surveillance and ~~airborne maritime surveillance radar~~Communications programs. Contract liabilities relate to advance consideration received from customers for which revenue has not been recognized. The Company often receives cash payments from customers in advance of the Company’s performance resulting in contract liabilities. These contract liabilities are classified as current on the Consolidated Balance Sheets based on the timing of when the Company expects to recognize revenue. Current contract liabilities are recorded in Accounts payable on the Consolidated Balance Sheets. Contract liabilities are reduced when the associated revenue from the contract is recognized.

NOTE 4 – ACQUISITIONS AND DISPOSITIONS

Acquisitions

Griffon accounts for acquisitions under the acquisition method, in which assets acquired and liabilities assumed are recorded at fair value as of the date of acquisition using a method substantially similar to the goodwill impairment test methodology (level 3 inputs). The operating results of the acquired companies are included in Griffon’s consolidated financial statements from the date of acquisition; in each instance, Griffon is in the process of finalizing the initial purchase price allocation unless otherwise noted.

On December 22, 2020, AMES acquired Quatro Design Pty Ltd (“Quatro”), a leading Australian manufacturer and supplier of glass fiber reinforced concrete landscaping products for residential, commercial, and public sector projects for a purchase price of AUD $3,500 (approximately $2,700) in cash. The purchase price is subject to additional contingent consideration of approximately AUD $1,000 (approximately $760) based on Quatro exceeding certain EBITDA performance targets in the first year. The preliminary acquired intangibles and goodwill allocated to this acquisition was AUD $2,755 (approximately $2,082) and AUD $1,648 (approximately $1,246), respectively, which was assigned to the CPP segment, and is not deductible for income tax purposes.

On November 29, 2019, AMES acquired 100% of the outstanding stock of Vatre Group Limited ("Apta"), a leading United Kingdom supplier of innovative garden pottery and associated products sold to leading UK and Ireland garden centers for approximately $10,500 (GBP 8,750), inclusive of a post-closing working capital adjustment, net of cash acquired. This acquisition broadens AMES' product offerings in the UK market and increases its in-country operational footprint. The excess of the purchase price over the fair value of the net tangible and intangible assets was ~~primarily~~recorded as goodwill and is deductible for tax purposes. The purchase price allocation was finalized and allocated to goodwill of GBP ~~2,418,~~3,449, acquired intangible assets of GBP 3,454, inventory of GBP 2,914, accounts receivable and other assets of GBP 2,492 and accounts payable and other accrued liabilities of GBP ~~2,734.~~3,765, which was assigned to the CPP segment.

During the three and six months ended March 31, 2021, acquisition costs were de minimis. During both the three and six months ended March 31, 2020, the Company incurred acquisition costs of $2,960.

Dispositions

On December 18, 2020, Defense Electronics completed the sale of its SEG business for $15,000. SEG provides sophisticated, highly technical engineering and analytical support to the Missile Defense Agency and various U.S. military commands. SEG had sales of approximately $7,000 for the first fiscal quarter ended December 31, 2020 and $31,000 for the fiscal year ended September 30, 2020. DE recorded a pre-tax gain of $5,291 ($5,251, net of tax, or $0.10 per share) related to the divestiture of SEG. The ~~Company did 0t incur acquisition costs~~sale does not represent a strategic shift that will have a major effect on operations and financial results.

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GRIFFON CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(US dollars and non US currencies in ~~the three and six months ended March 31, 2019.~~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 5 – INVENTORIES

Inventories are stated at the lower of cost (first-in, first-out or ~~average)~~average cost) or market.

The following table details the components of inventory:

At March 31, 2020 At September 30, 2019
Raw materials and supplies $ 122,576
$ 121,791
Work in process 99,730
93,830
Finished goods 239,813
226,500
Total $ 462,119
$ 442,121


	At March 31, 2021		At September 30, 2020
Raw materials and supplies	$	155,720	$	146,351
Work in process	86,299		83,697
Finished goods	242,734		183,777
Total	$	484,753	$	413,825

NOTE 6 – PROPERTY, PLANT AND EQUIPMENT

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


	At March 31, 2021		At September 30, 2020
Land, building and building improvements	$	169,081	$	167,005
Machinery and equipment	611,187		595,126
Leasehold improvements	53,952		53,386
	834,220		815,517
Accumulated depreciation and amortization	(493,215)		(471,553)
Total	$	341,005	$	343,964

At March 31, 2020 At September 30, 2019
Land, building and building improvements $ 156,393
$ 133,036
Machinery and equipment 577,573
580,698
Leasehold improvements 51,012
49,808

784,978
763,542
Accumulated depreciation and amortization (449,158 ) (426,216 )
Total $ 335,820
$ 337,326


	For the Three Months Ended March 31,				For the Six Months Ended March 31,
	2021		2020		2021		2020
Restricted stock	$	4,349	$	3,662	$	7,777	$	6,812
ESOP	944		658		1,724		1,490
Total stock based compensation	$	5,293	$	4,320	$	9,501	$	8,302



	For the Three Months Ended March 31,
	2021								2020
	CPP		HBP		DE		Total		CPP		HBP		DE		Total
United States	$	205,368	$	230,955	$	34,166	$	470,489	$	191,412	$	199,060	$	55,071	$	445,543
Europe	38,965		41		5,791		44,797		24,737		5		9,880		34,622
Canada	21,778		9,797		1,925		33,500		17,515		7,867		4,209		29,591
Australia	63,691		0		122		63,813		39,032		0		189		39,221
All other countries	2,069		2,018		18,146		22,233		2,216		2,897		12,260		17,373
Consolidated revenue	$	331,871	$	242,811	$	60,150	$	634,832	$	274,912	$	209,829	$	81,609	$	566,350


	At March 31, 2021		At September 30, 2020
Assets of discontinued operations:
Prepaid and other current assets	$	1,525	$	2,091
Other long-term assets	5,295		6,406
Total assets of discontinued operations	$	6,820	$	8,497

Liabilities of discontinued operations:
Accrued liabilities, current	$	4,600	$	3,797
Other long-term liabilities	6,415		7,014
Total liabilities of discontinued operations	$	11,015	$	10,811


	For the Three Months Ended March 31,				For the Six Months Ended March 31,
	2021		2020		2021		2020
Cost of goods and services	$	3,337	$	1,353	$	9,762	$	4,076
Selling, general and administrative expenses	4,225		1,751		8,600		5,462
Total restructuring charges	$	7,562	$	3,104	$	18,362	$	9,538

For the Three Months Ended March 31, 2020 For the Six Months Ended March 31, 2020
Cost of goods and services $ 1,353
$ 4,076
Selling, general and administrative expenses 1,751
5,462
Total restructuring charges $ 3,104
$ 9,538


	For the Three Months Ended March 31,				For the Six Months Ended March 31,
	2021		2020		2021		2020
Personnel related costs	$	782	$	1,658	$	3,264	$	3,792
Facilities, exit costs and other	4,283		914		6,807		1,054

Non-cash facility and other	2,497		532		8,291		4,692
Total	$	7,562	$	3,104	$	18,362	$	9,538


	Cash Charges				Non-Cash
	Personnel related costs		Facilities & Exit Costs		Facility and Other Costs		Total
Accrued liability at September 30, 2020	$	2,701	$	264	$	0	$	2,965
Q1 Restructuring charges	2,482		2,524		5,794		10,800
Q1 Cash payments	(1,598)		(2,534)		0		(4,132)
Q1 Non-cash charges	0		0		(5,794)		(5,794)
Accrued liability at December 31, 2020	$	3,585	$	254	$	0	$	3,839
Q2 Restructuring charges	782		4,283		2,497		7,562
Q2 Cash payments	(3,840)		(4,273)		0		(8,113)
Q2 Non-cash charges	0		0		(2,497)		(2,497)
Accrued liability at March 31, 2021	$	527	$	264	$	0	$	791


	At March 31, 2021		At September 30, 2020
Foreign currency translation adjustments	$	(11,821)	$	(25,683)
Pension and other defined benefit plans	(43,647)		(46,598)
Change in Cash flow hedges	1,292		189

	$	(54,176)	$	(72,092)


	For the Six Months Ended March 31,
	2021		2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	22,099	$	21,582
Financing cash flows from finance leases	1,865		1,940
Total	$	23,964	$	23,522



	~~At March 31, 2020~~
Weighted-average remaining lease term (years)
Operating leases		~~8.8~~8.1
Finance Leases		~~2.1~~8.2

Weighted-average discount rate
Operating Leases		~~4.10~~4.45	%
Finance Leases		5.50	%

NOTE 2122 — COMMITMENTS AND CONTINGENCIES

Legal and environmental

Peekskill Site. Lightron Corporation (“Lightron”), a wholly-owned subsidiary of Griffon, once conducted operations at a location in ~~Peekskill in~~ the Town of Cortlandt, New York, just outside the city of Peekskill, New York (the “Peekskill Site”) owned by ISC Properties, Inc. (“ISCP”), a wholly-owned subsidiary of Griffon. ISCP sold the Peekskill Site in November 1982.

Subsequently, ISCP was advised by the Department of Environmental Conservation of New York State ~~("DEC"~~(the "DEC")that ~~random~~ sampling at the Peekskill Site and in a creek near the Peekskill Site indicated concentrations of solvents and other chemicals common to ~~Lightron’s~~ prior plating ~~operations.~~ operations by a Lightron subsidiary.In 1996, ISCP entered into a consent order with the DEC (the “Consent Order”), pursuant to which ISCP was required to perform a remedial investigation and prepare a feasibility study (the “Feasibility Study”).After completing the initial remedial investigation, ISCP conducted supplemental remedial investigations over the next several years, ~~supplemental remedial investigations,~~ including soil vapor investigations, as required by the Consent Order.

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)

In April 2009, the DEC advised ISCP that both the DEC and the New York State Department of Health had reviewed and accepted an August 2007 Remedial Investigation Report and an Additional Data Collection Summary Report dated January 30, 2009. ISCP submitted to the DEC a draft Feasibility Study which was accepted and approved by the DEC in February 2011.ISCP satisfied its obligations under the Consent Order when DEC approved the Remedial Investigation and Feasibility Study for the Peekskill Site.In June 2011 the DEC issued a Record of Decision that set forth a Remedial Action Plan for the Peekskill Site that ~~set forth~~identified the specific remedies selected and responded to public comments. The ~~approximate~~ cost of the remedy proposed by DEC in its Remedial Action Plan was approximately $10,000.

Following issuance of the Remedial Action Plan, the DEC implemented a portion of its plan, and also performed additional investigation for the presence of metals in soils and sediments downstream from the Peekskill Site. During this investigation ~~chromium was~~metals were found to be present in sediments further downstream offrom the Peekskill site than previously detected.

In August 2018, the DEC sent a letter to the United States Environmental Protection Agency (the “EPA”), in which the DEC requested that the Peekskill Site be nominated by the EPA for inclusion on the National Priorities List under CERCLA (the “NPL”). Based on the DEC’s request and on an analysis by a consultant retained by the EPA, on May 15, 2019 the EPA added the Peekskill Site to the NPL ~~under the Comprehensive Environmental Response, Compensation,~~ and ~~Liability Act of 1980 (CERCLA) and~~has since announced that it is ~~now~~ performing a Remedial Investigation/Feasibility Study. On August 25, 2020, the EPA sent a letter to several parties, including Lightron and ISCP, requesting that each such party inform the EPA as to whether it would be willing to enter into discussions regarding implementation of a Remedial Investigation/Feasibility Study (“RI/FS”). The EPA ~~estimates~~also sent a request for information to each party under Section 104(e) of CERCLA. Lightron and ISCP have informed the EPA that ~~it will select a remedy~~they are willing to participate in ~~2022.~~

discussions regarding implementation of the RI/FS. Lightron and ISCP have also submitted responses to certain items contained in the Section 104(e) information request, with additional responses to follow. The ~~EPA~~current owner of the property, which acquired the Peekskill Site from ISCP in 1982 and has ~~announced~~no relationship with Lightron or ISCP, has also informed the EPA that it is ~~performing its own remedial investigation/feasibility study~~willing to discuss implementation of the ~~site. It is uncertain what subsequent action the EPA will take.~~RI/FS, and has also received, and submitted certain information in response to, a Section 104(e) information request. The EPA may decide to implement the RI/FS, on its own or through the use of consultants, may reach agreement with one or more parties to perform the RI/FS, or may offer to negotiate with one or more parties to accept a settlement addressing the potential liability of such parties for investigation and/or remediation at the Peekskill Site. Should the EPA implement the RI/FS, or perform further studies ~~of the site~~ and/or subsequently remediate the site, ~~and in such event,~~without first reaching agreement with one or more relevant parties, the EPA would likely seek reimbursement for the costs incurred from ~~potentially responsible parties (“PRPs”). Alternatively, the EPA could enter into negotiations with the PRPs to request that the PRPs perform further studies and/or remediate the site.~~such parties.

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.

~~Improper Advertisement Claim involving Union Tools~~® ~~Products.~~ Beginning in December 2004, a customer of AMES had been named in various litigation matters relating to certain Union Tools products. The plaintiffs in those litigation matters asserted causes of action against the customer of AMES for improper advertisement to end consumers. The allegations suggested that advertisements led the consumers to believe that Union Tools’ hand tools were wholly manufactured within boundaries of the United States. The complaints asserted various causes of action against the customer of AMES under federal and state law, including common law fraud. At some point, the customer may seek indemnity (including recovery of its legal fees and costs) against AMES for an unspecified amount. Presently, AMES cannot estimate the amount of loss, if any, if the customer were to seek legal recourse against AMES.

Union Fork and Hoe, Frankfort, NY site.The former Union Fork and Hoe property in Frankfort, NYNew York was acquired by AMES in 2006 as part of a larger acquisition, and has historic site contamination involving chlorinated solvents, petroleum hydrocarbons and metals. AMES ~~has~~ entered into an Order on Consent with the New York State Department of Environmental ~~Conservation.~~Conservation (“DEC”). While the Order is without admission or finding of liability or acknowledgment that there has been a release of hazardous substances at the site, ~~AMES is~~the Order required Ames to perform a remedial investigation of certain portions of the property and to recommend a remediation option. AtIn 2011, remediation of chlorinated solvents in the ~~conclusion of the remediation phase~~groundwater was completed to the satisfaction of DEC. In 2018, Ames submitted a Feasibility Study recommending that the remaining soil contamination involving metals and petroleum be covered, excavated and removed to a licensed off-site location or placed under a cover on-site. DEC approved the ~~DEC will issue~~selection of this remedy in 2019 by issuing a ~~Certificate~~Record of ~~Completion. AMES has performed significant investigative and remedial activities over~~Decision (“ROD”). In June 2020, Ames completed the ~~last few years under work plans approved~~remediation required by the ROD and filed a Construction Completion Report, a Site Management Plan and an environmental easement with DEC. While Ames was implementing the remediation required by the ROD, DEC ~~and is currently implementing~~requested additional investigation of a ~~Remedial Action Work Plan for~~small area on the site property that was approved by the DEC; the work required by such Remedial Action Work Plan is expected to be completed by summer 2020. The DEC has also requested that AMES develop a work plan to investigate certain areas immediatelyand of an area adjacent to the ~~former Union Fork~~site perimeter. Ames investigated the on-site area and ~~Hoe site.~~has completed remediation of that small area under a workplan approved by DEC. At the request of DEC, Ames has also submitted a workplan to investigate the areas adjacent to the site perimeter. AMES has a number of defenses to liability in this matter, including its rights under a previous Consent Judgment entered into between ~~the~~ DEC and a predecessor of AMES relating to the site. Ames’ insurer has accepted Ames’ claim for a substantial portion of the costs incurred and to be incurred for both the on-site and off-site activities.

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)

U.S. Government investigations and claims

Defense contracts and subcontracts, including Griffon’s contracts and subcontracts, are subject to audit and review by various agencies and instrumentalities of the United States government, including among others, the Defense Contract Audit Agency, the Defense Criminal Investigative Service, and the Department of Justice which has responsibility for asserting claims on behalf of the U.S. Government.

In general, departments and agencies of the U.S. Government have the authority to investigate various transactions and operations of Griffon, and the results of such investigations may lead to administrative, civil or criminal proceedings, the ultimate outcome of which could be fines, penalties, repayments or compensatory or treble damages. U.S. Government regulations provide that certain findings against a contractor may lead to suspension or debarment from future U.S. Government contracts or the loss of export privileges for a company or an operating division or subdivision. Suspension or debarment could have a material adverse effect on Telephonics because of its reliance on government contracts.

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.

~~NOTE 22 — CONSOLIDATING GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION~~

Griffon’s Senior Notes are fully and unconditionally guaranteed, jointly and severally by Clopay Corporation, Telephonics Corporation, The AMES Companies, Inc., ATT Southern LLC, Clopay Ames Holding Corp., ClosetMaid LLC, CornellCookson, LLC and Cornell Real Estate Holdings, LLC, all of which are indirectly 100% owned by Griffon. In accordance with Rule 3-10 of Regulation S-X promulgated under the Securities Act, presented below are condensed consolidating financial information as of March 31, 2020 and September 30, 2019 and for the three months ended March 31, 2020 and 2019. The financial information may not necessarily be indicative of the results of operations or financial position of the guarantor companies or non-guarantor companies had they operated as independent entities. The guarantor companies and the non-guarantor companies include the consolidated financial results of their wholly-owned subsidiaries accounted for under the equity method.

The indentures relating to the Senior Notes (the “Indentures”) contain terms providing that, under certain limited circumstances, a guarantor will be released from its obligations to guarantee the Senior Notes. These circumstances include (i) a sale of at least a majority of the stock, or all or substantially all the assets, of the subsidiary guarantor as permitted by the Indentures; (ii) a public equity offering of a subsidiary guarantor that qualifies as a “Minority Business” as defined in the Indentures (generally, a business the EBITDA of which constitutes less than 50% of the segment adjusted EBITDA of the Company for the most recently ended four fiscal quarters), and that meets certain other specified conditions as set forth in the Indentures; (iii) the designation of a guarantor as an “unrestricted subsidiary” as defined in the Indentures, in compliance with the terms of the Indentures; (iv) Griffon exercising its right to defease the Senior Notes, or to otherwise discharge its obligations under the Indentures, in each case in accordance with the terms of the Indentures; and (v) upon obtaining the requisite consent of the holders of the Senior Notes.

~~CONDENSED CONSOLIDATING BALANCE SHEETS~~

~~At March 31, 2020~~

($ in thousands) Parent Company Guarantor Companies Non-Guarantor Companies Elimination Consolidation
CURRENT ASSETS

Cash and equivalents $ 9,252
$ 18,977
$ 40,795
$ —
$ 69,024
Accounts receivable, net of allowances —
283,929
206,456
(155,352 ) 335,033
Contract costs and recognized income not yet billed, net of progress payments —
91,998
2,497
—
94,495
Inventories, net —
391,934
70,756
(571 ) 462,119
Prepaid and other current assets 11,482
23,468
5,149
2,624
42,723
Assets of discontinued operations —
—
321
—
321
Total Current Assets 20,734
810,306
325,974
(153,299 ) 1,003,715
PROPERTY, PLANT AND EQUIPMENT, net 1,295
290,685
43,840
—
335,820
OPERATING LEASE RIGHT-OF-USE ASSETS 10,060
127,133
19,065
—
156,258
GOODWILL —
375,734
61,048
—
436,782
INTANGIBLE ASSETS, net 93
220,796
132,854
—
353,743
INTERCOMPANY RECEIVABLE 67,266
928,899
148,568
(1,144,733 ) —
EQUITY INVESTMENTS IN SUBSIDIARIES 1,658,792
745,746
3,109,559
(5,514,097 ) —
OTHER ASSETS 8,695
37,669
(2,446 ) (14,362 ) 29,556
ASSETS OF DISCONTINUED OPERATIONS —
—
2,873
—
2,873
Total Assets $ 1,766,935
$ 3,536,968
$ 3,841,335
$ (6,826,491 ) $ 2,318,747
CURRENT LIABILITIES

Notes payable and current portion of long-term debt $ —
$ 3,474
$ 5,996
$ —
$ 9,470
Accounts payable and accrued liabilities 28,873
412,118
58,903
(152,741 ) 347,153
Current portion of operating lease liabilities 1,830
22,068
4,149
—
28,047
Liabilities of discontinued operations —
—
2,450
—
2,450
Total Current Liabilities 30,703
437,660
71,498
(152,741 ) 387,120

LONG-TERM DEBT, net 1,167,023
10,642
38,561
—
1,216,226
LONG-TERM OPERATING LEASE LIABILITIES 9,353
108,872
15,273
—
133,498
INTERCOMPANY PAYABLES 63,230
563,964
536,815
(1,164,009 ) —
OTHER LIABILITIES 20,172
77,292
12,650
(7,819 ) 102,295
LIABILITIES OF DISCONTINUED OPERATIONS —
—
3,154
—
3,154
Total Liabilities 1,290,481
1,198,430
677,951
(1,324,569 ) 1,842,293
SHAREHOLDERS’ EQUITY 476,454
2,338,538
3,163,384
(5,501,922 ) 476,454
Total Liabilities and Shareholders’ Equity $ 1,766,935
$ 3,536,968
$ 3,841,335
$ (6,826,491 ) $ 2,318,747

~~CONDENSED CONSOLIDATING BALANCE SHEETS~~

~~At September 30, 2019~~

($ in thousands) Parent
Company Guarantor
Companies Non-Guarantor
Companies Elimination Consolidation
CURRENT ASSETS

Cash and equivalents $ 1,649
$ 25,217
$ 45,511
$ —
$ 72,377
Accounts receivable, net of allowances —
227,069
38,580
(1,199 ) 264,450
Contract costs and recognized income not yet billed, net of progress payments —
104,109
1,002
—
105,111
Inventories, net —
372,839
69,540
(258 ) 442,121
Prepaid and other current assets 8,238
25,754
6,951
(144 ) 40,799
Assets of discontinued operations —
—
321
—
321
Total Current Assets 9,887
754,988
161,905
(1,601 ) 925,179

PROPERTY, PLANT AND EQUIPMENT, net 1,184
289,282
46,860
—
337,326
GOODWILL —
375,734
61,333
—
437,067
INTANGIBLE ASSETS, net 93
224,275
132,271
—
356,639
INTERCOMPANY RECEIVABLE 5,834
864,884
75,684
(946,402 ) —
EQUITY INVESTMENTS IN SUBSIDIARIES 1,628,031
581,438
3,233,038
(5,442,507 ) —
OTHER ASSETS 8,182
24,635
(2,352 ) (14,625 ) 15,840
ASSETS OF DISCONTINUED OPERATIONS —
—
2,888
—
2,888
Total Assets $ 1,653,211
$ 3,115,236
$ 3,711,627
$ (6,405,135 ) $ 2,074,939
CURRENT LIABILITIES

Notes payable and current portion of long-term debt $ —
$ 3,075
$ 7,450
$ —
$ 10,525
Accounts payable and accrued liabilities 41,796
266,411
68,390
(1,356 ) 375,241
Liabilities of discontinued operations —
—
4,333
—
4,333
Total Current Liabilities 41,796
269,486
80,173
(1,356 ) 390,099
LONG-TERM DEBT, net 1,040,449
3,119
50,181
—
1,093,749
INTERCOMPANY PAYABLES 71,634
457,265
444,557
(973,456 ) —
OTHER LIABILITIES 21,569
81,582
15,017
(8,171 ) 109,997
LIABILITIES OF DISCONTINUED OPERATIONS —
—
3,331
—
3,331
Total Liabilities 1,175,448
811,452
593,259
(982,983 ) 1,597,176
SHAREHOLDERS’ EQUITY 477,763
2,303,784
3,118,368
(5,422,152 ) 477,763
Total Liabilities and Shareholders’ Equity $ 1,653,211
$ 3,115,236
$ 3,711,627
$ (6,405,135 ) $ 2,074,939

~~CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)~~

~~For the Three Months Ended March 31, 2020~~

($ in thousands) Parent Company Guarantor Companies Non-Guarantor Companies Elimination Consolidation
Revenue $ —
$ 462,500
$ 113,926
$ (10,076 ) $ 566,350
Cost of goods and services —
345,626
79,112
(10,420 ) 414,318
Gross profit —
116,874
34,814
344
152,032
Selling, general and administrative expenses 7,922
91,338
27,300
(93 ) 126,467

Income (loss) from operations (7,922 ) 25,536
7,514
437
25,565
Other income (expense)

Interest income (expense), net (6,880 ) (9,706 ) 25
—
(16,561 )
Loss from debt extinguishment, net (6,690 ) —
—
—
(6,690 )
Other, net (418 ) (2,667 ) 4,141
(441 ) 615
Total other income (expense) (13,988 ) (12,373 ) 4,166
(441 ) (22,636 )
Income (loss) before taxes (21,910 ) 13,163
11,680
(4 ) 2,929
Provision (benefit) for income taxes (9,427 ) 6,078
5,387
(4 ) 2,034
Income (loss) before equity in net income of subsidiaries (12,483 ) 7,085
6,293
—
895
Equity in net income (loss) of subsidiaries 13,378
6,341
7,085
(26,804 ) —

Net Income (loss) $ 895
$ 13,426
$ 13,378
$ (26,804 ) $ 895
Comprehensive income (loss) $ (13,939 ) $ 8,028
$ 18,776
$ (26,804 ) $ (13,939 )

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~~CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)~~

~~For the Three Months Ended March 31, 2019~~

($ in thousands) Parent Company Guarantor Companies Non-Guarantor Companies Elimination Consolidation
Revenue $ —
$ 462,739
$ 94,285
$ (7,391 ) $ 549,633
Cost of goods and services —
354,382
65,516
(7,769 ) 412,129
Gross profit —
108,357
28,769
378
137,504
Selling, general and administrative expenses 5,249
84,813
21,409
312
111,783
Income (loss) from operations (5,249 ) 23,544
7,360
66
25,721
Other income (expense)

Interest income (expense), net (7,328 ) (9,128 ) (849 ) —
(17,305 )
Other, net (473 ) 1,129
676
(64 ) 1,268
Total other income (expense) (7,801 ) (7,999 ) (173 ) (64 ) (16,037 )
Income (loss) before taxes (13,050 ) 15,545
7,187
2
9,684
Provision (benefit) for income taxes (4,242 ) 5,292
2,142
2
3,194
Income (loss) before equity in net income of subsidiaries (8,808 ) 10,253
5,045
—
6,490
Equity in net income (loss) of subsidiaries 7,652
11,646
10,253
(29,551 ) —
Income (loss) from continuing operations (1,156 ) 21,899
15,298
(29,551 ) 6,490
Income (loss) from operation of discontinued businesses —
—
(11,000 ) —
(11,000 )
Provision (benefit) from income taxes —
—
(3,354 ) —
(3,354 )
Income (loss) from discontinued operations —
—
(7,646 ) —
(7,646 )
Net Income (loss) $ (1,156 ) $ 21,899
$ 7,652
$ (29,551 ) $ (1,156 )

Comprehensive income (loss) $ 1,724
$ 5,448
$ 8,736
$ (14,184 ) $ 1,724

~~CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)~~

~~For the Six Months Ended March 31, 2020~~

($ in thousands) Parent Company Guarantor Companies Non-Guarantor Companies Elimination Consolidation
Revenue $ —
$ 903,892
$ 230,965
$ (20,069 ) $ 1,114,788
Cost of goods and services —
672,839
160,790
(20,794 ) 812,835
Gross profit —
231,053
70,175
725
301,953

Selling, general and administrative expenses 13,940
179,186
51,324
(185 ) 244,265
Income (loss) from operations (13,940 ) 51,867
18,851
910
57,688
Other income (expense)

Interest income (expense), net (13,204 ) (19,379 ) 72
—
(32,511 )
Loss from debt extinguishment, net (6,690 ) —
—
—
(6,690 )
Other, net (515 ) (4,018 ) 6,840
(914 ) 1,393
Total other income (expense) (20,409 ) (23,397 ) 6,912
(914 ) (37,808 )
Income (loss) before taxes (34,349 ) 28,470
25,763
(4 ) 19,880
Provision (benefit) for income taxes (13,822 ) 11,805
10,394
(4 ) 8,373
Income (loss) before equity in net income of subsidiaries (20,527 ) 16,665
15,369
—
11,507
Equity in net income (loss) of subsidiaries 32,034
15,537
16,665
(64,236 ) —

Net income (loss) $ 11,507
$ 32,202
$ 32,034
$ (64,236 ) $ 11,507

Comprehensive income (loss) $ 3,514
$ 26,804
$ 37,432
$ (64,236 ) $ 3,514

~~CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)~~

~~For the Six Months Ended March 31, 2019~~

($ in thousands) Parent Company Guarantor Companies Non-Guarantor Companies Elimination Consolidation
Revenue $ —
$ 881,983
$ 192,525
$ (14,353 ) $ 1,060,155
Cost of goods and services —
663,479
131,218
(15,092 ) 779,605
Gross profit —
218,504
61,307
739
280,550

Selling, general and administrative expenses 10,309
169,789
45,226
213
225,537
Income (loss) from operations (10,309 ) 48,715
16,081
526
55,013

Other income (expense)

Interest income (expense), net (13,635 ) (18,258 ) (1,743 ) —
(33,636 )
Other, net (735 ) 1,816
1,717
(526 ) 2,272
Total other income (expense) (14,370 ) (16,442 ) (26 ) (526 ) (31,364 )
Income (loss) before taxes (24,679 ) 32,273
16,055
—
23,649
Provision (benefit) for income taxes (7,777 ) 11,266
4,917
—
8,406
Income (loss) before equity in net income of subsidiaries (16,902 ) 21,007
11,138
—
15,243
Equity in net income (loss) of subsidiaries 24,499
17,696
21,007
(63,202 ) —
Income (loss) from continuing operations $ 7,597
$ 38,703
$ 32,145
$ (63,202 ) $ 15,243
Income (loss) from operations of discontinued businesses —
—
(11,000 ) —
(11,000 )
Provision (benefit) from income taxes —
—
(3,354 ) —
(3,354 )
Income (loss) from discontinued operations —
—
(7,646 ) —
(7,646 )
Net income (loss) $ 7,597
$ 38,703
$ 24,499
$ (63,202 ) $ 7,597

Comprehensive income (loss) $ 5,027
$ 59,017
$ 4,185
$ (63,202 ) $ 5,027

~~CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS~~

~~For the Six Months Ended March 31, 2020~~

($ in thousands) Parent Company Guarantor Companies Non-Guarantor Companies Elimination Consolidation
CASH FLOWS FROM OPERATING ACTIVITIES:

Net income (loss) $ 11,507
$ 32,202
$ 32,034
$ (64,236 ) $ 11,507
Net cash provided by (used in) operating activities: (92,042 ) 26,593
4,606
—
(60,843 )
CASH FLOWS FROM INVESTING ACTIVITIES:

Acquisition of property, plant and equipment (282 ) (19,982 ) (2,255 ) —
(22,519 )
Acquired businesses, net of cash acquired —
—
(10,531 ) —
(10,531 )
Proceeds from sale of assets —
292
(2 ) —
290
Net cash provided by (used in) investing activities (282 ) (19,690 ) (12,788 ) —
(32,760 )
CASH FLOWS FROM FINANCING ACTIVITIES:

Purchase of shares for treasury (7,479 ) —
—
—
(7,479 )
Proceeds from long-term debt 1,054,636
—
6,707
—
1,061,343
Payments of long-term debt (921,904 ) (1,752 ) (15,415 ) —
(939,071 )
Financing costs (13,176 ) —
—
—
(13,176 )
Dividends paid (7,349 ) —
—
—
(7,349 )
Other, net (4,801 ) (10,839 ) 15,723
—
83
Net cash provided by (used in) financing activities 99,927
(12,591 ) 7,015
—
94,351
CASH FLOWS FROM DISCONTINUED OPERATIONS:

Net cash provided by (used) in discontinued operations —
—
(1,994 ) —
(1,994 )
Effect of exchange rate changes on cash and equivalents —
(552 ) (1,555 ) —
(2,107 )
NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS 7,603
(6,240 ) (4,716 ) —
(3,353 )
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD 1,649
25,217
45,511
—
72,377
CASH AND EQUIVALENTS AT END OF PERIOD $ 9,252
$ 18,977
$ 40,795
$ —
$ 69,024

~~CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS~~

~~For the Six Months Ended March 31, 2019~~

($ in thousands) Parent Company Guarantor Companies Non-Guarantor Companies Elimination Consolidation
CASH FLOWS FROM OPERATING ACTIVITIES:

Net income (loss) $ 7,597
$ 38,703
$ 24,499
$ (63,202 ) $ 7,597
Net (income) loss from discontinued operations —
—
7,646
—
7,646
Net cash provided by (used in) operating activities: (77,881 ) 24,130
(1,255 ) —
(55,006 )
CASH FLOWS FROM INVESTING ACTIVITIES:

Acquisition of property, plant and equipment (210 ) (14,071 ) (3,137 ) —
(17,418 )
Acquired businesses, net of cash acquired (9,219 ) —
—
—
(9,219 )
Investment purchases (149 ) —
—
—
(149 )
Insurance payments (10,604 ) —
—
—
(10,604 )
Proceeds from sale of assets —
36
26
—
62
Net cash provided by (used in) investing activities (20,182 ) (14,035 ) (3,111 ) —
(37,328 )
CASH FLOWS FROM FINANCING ACTIVITIES:

Purchase of shares for treasury (1,478 ) —
—
—
(1,478 )
Proceeds from long-term debt 130,484
76
12,541
—
143,101
Payments of long-term debt (32,419 ) (1,724 ) (14,026 ) —
(48,169 )
Contingent consideration for acquired businesses —
—
(1,686 ) —
(1,686 )
Financing costs (945 ) —
—
—
(945 )
Dividends paid (6,847 ) —
—
—
(6,847 )
Other, net (1,641 ) 7,150
(5,426 ) —
83
Net cash provided by (used in) financing activities 87,154
5,502
(8,597 ) —
84,059
CASH FLOWS FROM DISCONTINUED OPERATIONS:

Net cash provided by (used in) discontinued operations —
—
(3,438 ) —
(3,438 )
Effect of exchange rate changes on cash and equivalents —
(92 ) 26
—
(66 )
NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS (10,909 ) 15,505
(16,375 ) —
(11,779 )
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD 15,976
16,353
37,429
—
69,758
CASH AND EQUIVALENTS AT END OF PERIOD $ 5,067
$ 31,858
$ 21,054
$ —
$ 57,979

(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

We own and operate, and seek to acquire, businesses in multiple industries and geographic markets. Our 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 in connection with divestitures. As long-term investors, having substantial experience in a variety of industries, our intent is to continue the growth and strengthening of our existing businesses, and to diversify further through investments in our businesses and through acquisitions.

~~As described in greater detail below, over~~Over the past three years, we have undertaken a series of transformative transactions. ~~This year~~We divested our specialty plastics business in 2018 to focus on our core markets and improve our free cash flow conversion. Also in 2018, we ~~integrated our most significant acquisitions into our wholly owned subsidiaries,~~expanded the scope of The AMES Companies, Inc. ("AMES") and Clopay Corporation ("Clopay") through the acquisitions of ClosetMaid, LLC ("ClosetMaid") and CornellCookson, Inc. ("CornellCookson"), ~~expanding the scope of both AMES and Clopay. In particular,~~respectively. CornellCookson has been integrated into Clopay, so that our leading company in residential garage doors and sectional commercial doors now includes a leading manufacturer of rolling steel doors and grille products. ClosetMaid was combined with AMES, and we established an integrated headquarters for AMES in Orlando, Florida. AMES is now positioned to fulfill its mission of Bringing Brands Together™ with the leading brands in home and garage organization, outdoor décor, and lawn, garden and cleaning tools. As a result of the expanded scope of the AMES and Clopay businesses, ~~effective with our 2019 10-K filing on November 22,~~in 2019 we ~~now report~~began reporting each as a separate segment. Griffon now reports its operations through three segments. Clopay remains in the Home and Building Products ("HBP") segment, ~~and~~ AMES now constitutes our new Consumer and Professional Products ("CPP") ~~segment.~~segment and our Defense Electronics segment which continues to consist of Telephonics Corporation.

~~Impact~~Update of COVID-19 on Our Business

~~Our first priority is the~~The health and safety of our employees, our customers and their ~~families.~~families is a high priority for Griffon. As of the date of this filing, all ~~North American and Australian operating locations have been deemed essential and~~of Griffon's facilities are fully operational, except AMES' plant in Reynosa, Mexico, which will reopen in early May. In March, the AMES UK, Ireland and New Zealand facilities entered into a furlough with the UK expected to resume operations in July. All of Griffon’s facilitiesoperational. We have implemented a variety of new policies and procedures, including additional cleaning, social distancing, staggered shifts and prohibiting or significantly restricting on-site visitors, to minimize the risk to our employees of contracting COVID-19.

~~Since the end~~We manufacture a substantial majority of the ~~second quarter~~products that we sell, with the majority of ~~fiscal 2020~~our manufacturing activities conducted in the United States. As a result, we have been able to mitigate the adverse impact of the COVID-19 pandemic on the global supply chain.

During the six months ended March 31, 2021 and through the date of this filing, all of our ~~CPP North American and Australian sales continue to be at~~businesses have experienced normal levels; HBP commercial sectional and rolling steel sales have continued at normal levels; HBP residential sectional garage door sales have been negatively impacted by approximately 15-20%; and sales in our DE segment have not been significantly impacted. or better order patterns compared with the same time period last year.Our supply chains have ~~generally~~ not experienced significant disruption, and at this time we do not anticipate any such ~~material~~significant disruption in the near term. ~~Many~~Most U.S. states ~~have~~lifted initial executive orders issued ~~executive orders~~during the 2020 calendar year requiring all workers to remain at home unless their work is critical, essential, or life-sustaining. WeRegardless, we believe that, based on the various standards published to date, the work our employees are performing are either critical, essential and/or life-sustaining for the following reasons: 1) DEOur Defense Electronics segment ("DE") is a defense and national security-related operation supporting the U.S. Government, with a portion of its business being directly with

the U.S. Government; 2) HBP residential and commercial garage doors, rolling steel doors and related products that (a) provide protection and support for the efficient and safe movement of people, goods, and

Table of Contents

equipment in and out of residential and commercial facilities, (b) help prevent fires from spreading from one location to another, and (c) protect warehouses and homes, and their contents, from damage caused by strong weather events such as hurricanes and tornadoes; and 3) CPP tools and storage products provide critical support for the national infrastructure including construction, maintenance, manufacturing and ~~manufacturing~~natural disaster recovery, and is part of the essential supply base to many of its largest customers including Home Depot, Lowe's and Menards. Our AMES ~~Canadian and Australia~~international facilities are currently fully operational, as they meet the applicable standards in their respective ~~countries; and our AMES China facility is operating as well.~~countries.

Griffon believes it has adequate liquidity to invest in its existing businesses and execute its business plan, while managing its capital structure on both a short-term and long-term basis. In January 2020, Griffon increased total borrowing capacity under its revolving credit facility ("Credit Agreement") by $50,000, to $400,000 (of which ~~$195,100~~$363,068 was available at March 31, ~~2020)~~2021), and extended maturity of the facility to 2025. In addition, the Credit Agreement has a $100,000 accordion feature (subject to lender consent). In February 2020, Griffon refinanced $850,000 of its $1,000,000 of senior notes due 2022 with new 5.75% senior notes with a maturity of 2028, and in June 2020 refinanced the remaining $150,000 under the same terms and indenture as the $850,000 senior notes due 2028. ~~While the first half~~In August 2020, we completed a public offering of ~~Griffon’s fiscal year is typically~~8,700,000 shares of our common stock for total net proceeds of $178,165 (the "Public Offering"); a portion of these net proceeds were used to repay outstanding borrowing under our Credit Agreement.At March 31, 2021 Griffon had cash ~~usage period, April typically begins Griffon’s period~~and equivalents of ~~strong cash generation, which usually continues through the end of the fiscal year.~~ $175,564.

We will continue to actively monitor the situation and may take further actions that impact our ~~business~~ operations as may be required by federal, state or local authorities or that we determine are in the best interests of our employees, customers, suppliers and shareholders. While we are unable to determine or predict the nature, duration or scope of the overall impact the COVID-19 pandemic will have on our ~~business,~~businesses, results of operations, liquidity or capital resources, we believe it is important to discuss where our company stands today, how our response to COVID-19 is progressing and how our operations and financial condition may change as the fight against COVID-19 progresses. ~~Please see Part II, item 1A "Risk Factors" in this Form 10-Q.~~

Business Highlights

In August 2020, we completed a public offering of 8,700,000 shares of our common stock for total net proceeds of $178,165; a portion of these proceeds were used to repay outstanding borrowing under our Credit Agreement. The Company intends to use the remainder of the proceeds for general corporate purposes, including to expand its current business through acquisitions of, or investments in, other businesses or products.

On February 19, 2020, Griffon issued, at par, $850,000 of 5.75% Senior Notes due in 2028 (the “2028 Senior Notes”) and on June 8, 2020 Griffon issued an additional $150,000 of 2028 Senior Notes at 100.25% of par under the ~~proceeds of which~~same indenture. Proceeds from the 2028 Senior Notes were used to redeem ~~$850,000~~the $1,000,000 of 5.25% Senior Notes due 2022.

In January 2020, Griffon amended its Credit Agreement to increase the total amount available for borrowing from $350,000 to $400,000, extend its maturity date from March 22, 2021 to March 22, 2025 and modify certain other provisions of the facility.

In November 2019, Griffon announced the development of a next-generation business platform for CPP to enhance the growth, efficiency, and competitiveness of its U.S. ~~operations.~~operations, and on November 12, 2020, Griffon announced that CPP is broadening this strategic initiative to include additional North American facilities, the AMES UK and Australia businesses, and a manufacturing facility in China.

~~This~~The expanded focus of this initiative ~~includes~~leverages the same three key development ~~areas.~~ areas being executed within our U.S. operations. First, ~~multiple independent information systems will be unified into a single data and analytics platform which will serve the whole CPP U.S. enterprise. Second,~~ certain ~~CPP U.S.~~AMES global operations will be consolidated to optimize facilities footprint and talent. ~~Third,~~Second, strategic investments in automation and facilities expansion will be made to increase the efficiency of our manufacturing and fulfillment operations, and support e-commerce growth.Third, multiple independent information systems will be unified into a single data and analytics platform, which will serve the whole AMES global enterprise.

~~The~~Expanding the roll-out of the new business platform from our AMES U.S. operations to include AMES’ global operations will ~~occur over approximately a three-year period,~~extend the duration of the project by one year, with completion now expected by the end of calendar ~~2022.~~ year 2023.When fully implemented, these actions will result in an annual cash savings of ~~$15,000~~$30,000 to ~~$20,000,~~$35,000 and a ~~$20,000 to $25,000~~ reduction in inventory of $30,000 to $35,000, both based on fiscal 2020 operating ~~levels at the beginning of the initiative.~~levels.

The cost to implement this new business platform, over the ~~three-year~~ duration of the project, will include ~~approximately $35,000 of~~ one-time charges of approximately $65,000 and capital investments of approximately ~~$40,000 in capital investments.~~$65,000. The one-time charges are comprised of ~~$16,000~~$46,000 of cash charges, which includes ~~$12,000~~$26,000 of personnel-related costs such as training, severance, and duplicate personnel costs ~~and $4,000~~as well as $20,000 of facility and lease exit costs. The remaining $19,000 of charges are non-cash and are primarily related to asset write-downs.

~~On November 29, 2019, AMES~~In June 2018, Clopay acquired ~~Vatre Group Limited ("Apta"),~~CornellCookson, a leading ~~United Kingdom supplier~~provider of ~~innovative garden pottery~~rolling steel service doors, fire doors, and associated products sold to leading UK and Ireland garden centers for approximately $10,500 (GBP 8,750), inclusive of a post-closing working capital adjustment, net of cash acquired. This acquisition broadens AMES' product offerings in the UK market and increases its in-country operational footprint.

On September 5, 2017, Griffon announced the acquisition of ClosetMaid LLC ("ClosetMaid") and the commencement of the strategic alternatives process for Clopay Plastic Products ("Plastics"), beginning the transformation of Griffon.

~~In October 2017, we acquired ClosetMaid from Emerson Electric Co. (NYSE:EMR)~~grilles, for an effective purchase price of approximately ~~$165,000. ClosetMaid, founded~~$170,000. This transaction strengthened Clopay's strategic portfolio with a line of

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commercial rolling steel door products to complement Clopay's sectional door offerings in ~~1965, is a leading North American manufacturer~~the commercial sector, and ~~marketer~~expands the Clopay network of ~~wood and wire closet organization, general living storage and wire garage storage products, and sells to some of~~professional dealers focused on the ~~largest home center~~

~~retail chains, mass merchandisers, and direct-to-builder professional installers~~commercial market. CornellCookson generated over $200,000 in ~~North America. We believe that ClosetMaid is the leading brand~~revenue in its ~~category, with excellent consumer recognition.~~first full year of operations.

In February 2018, we closed on the sale of our Plastics business to Berry Global, Inc. ("Berry") for approximately $465,000, net of certain post-closing adjustments, thus exiting the specialty plastics industry that the Company had entered when it acquired Clopay in 1986. This transaction provided immediate liquidity and positions the Company to improve its cash flow conversion given the historically higher capital needs of Plastics' operations as compared to Griffon’s remaining businesses.

In March 2018, we announced the combination of the ClosetMaid operations with those of AMES. ClosetMaid generated over $300,000 in revenue in the first twelve months after the acquisition, and we anticipate the integration with AMES will unlock additional value given the complementary products, customers, warehousing and distribution, manufacturing, and sourcing capabilities of the two businesses.

In ~~June~~February 2018, we closed on the sale of our Clopay ~~acquired CornellCookson,~~Plastics Products ("Plastics") business to Berry Global, Inc. ("~~CornellCookson"~~Berry")~~, a leading provider~~ for approximately $465,000, net of ~~rolling steel service doors, fire doors,~~certain post-closing adjustments, thus exiting the specialty plastics industry that the Company had entered when it acquired Clopay Corporation in 1986. This transaction provided immediate liquidity and ~~grilles,~~positions the Company to improve its cash flow conversion given the historically higher capital needs of the Plastics operations as compared to Griffon’s remaining businesses.

In October 2017, we acquired ClosetMaid from Emerson Electric Co. (NYSE:EMR) for an effective purchase price of approximately ~~$170,000.~~ $165,000.ClosetMaid, founded in 1965, is a leading North American manufacturer and marketer of wood and wire closet organization, general living storage and wire garage storage products, and sells to some of the largest home center retail chains, mass merchandisers, and direct-to-builder professional installers in North America.We believe that ClosetMaid is the leading brand in its category, with excellent consumer recognition.

We believe these actions have established a solid foundation for continuing organic growth in sales, profit, and cash generation and bolsters Griffon’s platforms for opportunistic strategic acquisitions.

Other Acquisitions and Dispositions

On December 22, 2020, AMES acquired Quatro Design Pty Ltd (“Quatro”), a leading Australian manufacturer and supplier of glass fiber reinforced concrete landscaping products for residential, commercial, and public sector projects for a purchase price of AUD $3,500 (approximately $2,700). The purchase price is subject to additional contingent consideration of approximately AUD $1,000 (approximately $760) based on Quatro exceeding certain EBITDA performance targets in the first year. Quatro is expected to contribute approximately $5,000 in annualized revenue in the first twelve months after the acquisition.

On December 18, 2020, Defense Electronics completed the sale of its Systems Engineering Group, Inc. (“SEG”) business for $15,000. SEG provides sophisticated, highly technical engineering and analytical support to the Missile Defense Agency and various U.S. military commands. SEG had sales of approximately $7,000 for the first fiscal quarter ended December 31, 2020 and $31,000 for the fiscal year ended September 30, 2020.

On November 29, 2019, AMES acquired Vatre Group Limited ("Apta"), a leading United Kingdom supplier of innovative garden pottery and associated products sold to leading UK and Ireland garden centers for approximately $10,500 (GBP 8,750), inclusive of a post-closing working capital adjustment, net of cash acquired.This ~~transaction strengthened Clopay's strategic portfolio with a line of commercial rolling steel door products to complement Clopay's sectional door~~acquisition broadens AMES' product offerings in the ~~commercial industry,~~UK market and ~~expands the Clopay network of professional dealers focused on the commercial market. CornellCookson generated over $200,000~~increases its in-country operational footprint. Apta contributed approximately $20,000 in revenue in ~~its~~the first ~~full year of operations following~~twelve months after the acquisition.

~~During fiscal 2017 and~~On February 13, 2018, ~~Griffon also completed~~AMES acquired Kelkay, a ~~number of other acquisitions to expand and enhance AMES' global footprint. In the~~leading United Kingdom ~~Griffon acquired La Hacienda, an outdoor living brand of unique heating and garden décor products, in July 2017, and Kelkay, a~~ manufacturer and distributor of decorative outdoor landscaping ~~in February 2018. These two businesses provided AMES with additional brands and a platform for growth in the UK market and access~~products sold to ~~leading~~ garden centers, retailers and grocers in the UK and Ireland.

In Australia, Griffon acquired Hills Home Living, the iconic brand of clotheslines and home products, from Hills Limited (ASX:HIL) in December 2016. In September 2017, Griffon acquired Tuscan Path, an Australian provider of pots, planters, pavers, decorative stone, and garden décor products. These acquisitions This acquisition broadened AMES' ~~outdoor living~~product offerings in the market and ~~lawn and garden business, strengthening AMES’ portfolio of brands and~~increased its ~~market position in Australia and New Zealand.~~in-country operational footprint.

In November 2017, Griffon acquired Harper Brush Works, a leading U.S. manufacturer of cleaning products for professional, home, and industrial use, from Horizon Global (NYSE:HZN). This acquisition expanded the AMES line of long-handle tools in North America to include brooms, brushes, and other cleaning products.

~~We believe these actions have established~~During fiscal 2017, Griffon also completed a ~~solid foundation~~number of other acquisitions to expand and enhance AMES' global footprint. In the United Kingdom, Griffon acquired La Hacienda, an outdoor living brand of unique heating and garden décor products, in July 2017. The acquisition of La Hacienda, together with the February 2018 acquisition of Kelkay and November 2020 acquisition of Apta, provides AMES with additional brands and a platform for ~~continuing organic~~ growth in ~~sales, profit,~~the UK market and ~~cash generation~~access to leading garden centers, retailers, and ~~bolsters Griffon’s platforms for opportunistic strategic acquisitions.~~grocers in the UK and Ireland.In Australia, Griffon acquired Hills Home Living, the iconic brand of clotheslines and home products, from Hills Limited (ASX:HIL) in December 2016 and in September 2017, Griffon acquired Tuscan Path, an Australian provider of pots, planters, pavers, decorative stone, and garden décor products. The Hills and

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~~In 2019, Griffon modified its reportable segment structure to provide investors with improved visibility after a series~~Tuscan Path acquisitions broadened AMES' outdoor living and lawn and garden business, strengthening AMES’ portfolio of ~~portfolio repositioning actions which included the divestiture of the Plastics business, the acquisition of ClosetMaid~~brands and its ~~subsequent integration into AMES,~~market position in Australia and the acquisition of CornellCookson by Clopay. Griffon now reports its operations through three reportable segments: the newly formed Consumer and Professional Productions segment, which consists of AMES; Home and Building Products , which consists of Clopay; and Defense Electronics, which consists of Telephonics Corporation.New Zealand.

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.

Reportable Segments:

Griffon currently conducts its operations through three reportable segments:

•CPP conducts its operations through AMES. Founded in 1774, AMES is the leading North American manufacturer and a global provider of branded consumer and professional tools and products for home storage and organization, landscaping, and enhancing outdoor lifestyles. CPP sells products globally through a portfolio of leading brands including True Temper, AMES, and ClosetMaid.

•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 CornellCookson brand.

•DE conducts its operations through Telephonics Corporation, founded in 1933, a globally recognized leading provider of highly sophisticated intelligence, surveillance and communications solutions for defense, aerospace and commercial customers.

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OVERVIEW

Revenue for the quarter ended March 31, ~~2020~~2021 was ~~$566,350~~$634,832 compared to ~~$549,633~~$566,350 in the prior year comparable quarter, an increase of ~~approximately 3%,~~12%; primarily driven by increased revenue at CPP and HBP of 21% and ~~DE,~~16%, respectively, partially offset by ~~decreased~~reduced revenue at ~~CPP. Organic growth~~DE of 26%. Net income was ~~2%. Income from continuing operations was $895~~$17,112 or ~~$0.02~~$0.32 per share, compared to ~~$6,490,~~$895, or ~~$0.15~~$0.02 per share, in the prior year quarter.

The current year quarter results from ~~continuing~~ operations included the following:

– Restructuring charges of $7,562 ($5,651, net of tax, or $0.11 per share);

– Reduction to gain on sale of Systems Engineering Group ("SEG") business $949 ($766, net of tax, or $0.01 per share);

– Discrete and certain other tax provisions, net, of $1,913 or $0.04 per share.

The prior year quarter results from operations included the following:

– Restructuring charges of $3,104 ($3,005, net of tax, or $0.07 per share);

–Loss from debt extinguishment $6,690 ($5,245, net of tax, or $0.12 per share);

–Acquisition costs of $2,960 ($2,321, net of tax, or $0.05 per share); and

–Discrete and certain other tax benefits, net, of $1,413 or $0.03 per share.

~~The prior year quarter results from continuing operations included discrete and certain other tax benefits, net, of $97 or $0.00 per share.~~

Excluding these items from the respective quarterly results, ~~Income from continuing operations~~Net income would have been ~~$10,053,~~$25,442, or ~~$0.23~~$0.48 per share, in the current year quarter compared to ~~$6,393,~~$10,053, or ~~$0.15~~$0.23 per share in the prior year quarter.

Revenue for the six months ended March 31, ~~2020~~2021 was ~~$1,114,788~~$1,244,123 compared to ~~$1,060,155~~$1,114,788 in the prior year period, an increase of ~~5%,~~12%; primarily driven by increased revenue ~~from all segments, primarily~~at CPP and HBP ~~from organic growth. Organic growth~~of 21% and 9%, respectively, partially offset by reduced revenue at DE of 13%. Net income was ~~5%. Income from continuing operations was $11,507~~$46,612 or ~~$0.26~~$0.88 per share, compared to ~~$15,243,~~$11,507, or ~~$0.36~~$0.26 per share, in the prior year period.

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

– Restructuring charges of $18,362 ($13,951, net of tax, or $0.26 per share);

– Gain on sale of Systems Engineering Group ("SEG") business $5,291 ($5,251, net of tax, or $0.10 per share);

– Discrete and certain other tax benefits, net, of $115 or $0.00 per share.

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

–Restructuring charges of $9,538 ($7,153, net of tax, or $0.16 per share);

–Loss from debt extinguishment $6,690 ($5,245, net of tax, or $0.12 per share);

–Acquisition costs of $2,960 ($2,321, net of tax, or $0.05 per share); and

–Discrete and certain other tax benefits, net, of $580 or $0.01 per share.

~~The prior year-to-date results from continuing operations included discrete and certain other tax provisions, net, of $370 or $0.01 per share.~~

Excluding these items from the respective periods, ~~Income from continuing operations~~Net income would have been ~~$25,646,~~$55,197, or ~~$0.59~~$1.04 per share in the current year period ended March 31, ~~2020~~2021 compared to ~~$15,613,~~$25,646, or ~~$0.37~~$0.59 per share, in the comparable prior year period.

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Griffon evaluates performance based on Net income and the related Earnings per share excluding restructuring 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 ~~Income from continuing operations~~Net income to Adjusted net income ~~from continuing operations~~ and Earnings per share ~~from continuing operations~~ to Adjusted earnings per ~~share from continuing operations:~~

~~GRIFFON CORPORATION AND SUBSIDIARIES~~

~~RECONCILIATION OF INCOME FROM CONTINUING OPERATIONS~~

~~TO ADJUSTED INCOME FROM CONTINUING OPERATIONS~~share:

~~(Unaudited)~~


													For the Three Months Ended March 31,				For the Six Months Ended March 31,
	For the Three Months Ended March 31,						For the Six Months Ended March 31,						2021		2020		2021		2020
	2020			2019			2020			2019			(Unaudited)
Income from continuing operations	$	895		$	6,490		$	11,507		$	15,243

Net income												Net income	$	17,112	$	895	$	46,612	$	11,507

Adjusting items:												Adjusting items:
Restructuring charges	3,104			—			9,538			—		Restructuring charges	7,562		3,104		18,362		9,538
(Gain) adjustment on sale of SEG business												(Gain) adjustment on sale of SEG business	949		—		(5,291)		—
Loss from debt extinguishment	6,690			—			6,690			—		Loss from debt extinguishment	—		6,690		—		6,690
Acquisition costs	2,960			—			2,960			—		Acquisition costs	—		2,960		—		2,960
Tax impact of above item	(2,183		)	—			(4,469		)	—

Tax impact of above items												Tax impact of above items	(2,094)		(2,183)		(4,371)		(4,469)
Discrete and certain other tax provisions (benefits), net	(1,413		)	(97		)	(580		)	370		Discrete and certain other tax provisions (benefits), net	1,913		(1,413)		(115)		(580)

Adjusted income from continuing operations	$	10,053		$	6,393		$	25,646		$	15,613
Adjusted net income												Adjusted net income	$	25,442	$	10,053	$	55,197	$	25,646

Diluted earnings per common share	$	0.02		$	0.15		$	0.26		$	0.36	Diluted earnings per common share	$	0.32	$	0.02	$	0.88	$	0.26

Adjusting items, net of tax:												Adjusting items, net of tax:
Restructuring charges	0.07			—			0.16			—		Restructuring charges	0.11		0.07		0.26		0.16
(Gain) adjustment on sale of SEG business												(Gain) adjustment on sale of SEG business	0.01		—		(0.10)		—
Loss from debt extinguishment	0.12			—			0.12			—		Loss from debt extinguishment	—		0.12		—		0.12
Acquisition costs	0.05			—			0.05			—		Acquisition costs	—		0.05		—		0.05

Discrete and certain other tax provisions (benefits), net	(0.03		)	—			(0.01		)	0.01		Discrete and certain other tax provisions (benefits), net	0.04		(0.03)		—		(0.01)

Adjusted earnings per common share	$	0.23		$	0.15		$	0.59		$	0.37	Adjusted earnings per common share	$	0.48	$	0.23	$	1.04	$	0.59

Weighted-average shares outstanding (in thousands)	43,734			42,832			43,826			42,376		Weighted-average shares outstanding (in thousands)	53,264		43,734		53,211		43,826



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)


	Six Months Ended March 31,
	2021		2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	46,612	$	11,507

Adjustments to reconcile net income to net cash used in operating activities:

Depreciation and amortization	31,149		31,544
Stock-based compensation	9,501		8,302
Asset impairment charges - restructuring	8,291		4,692
Provision for losses on accounts receivable	194		596
Amortization of debt discounts and issuance costs	1,349		2,267
Loss from debt extinguishment, net	0		6,690

Deferred income taxes	2,334		408
Loss (gain) on sale of assets and investments	151		(274)
Gain on sale of business	(5,291)		0
Change in assets and liabilities, net of assets and liabilities acquired:
Increase in accounts receivable and contract assets, net	(47,146)		(61,815)
Increase in inventories	(74,186)		(21,262)
(Increase) decrease in prepaid and other assets	271		(6,005)
Increase (decrease) in accounts payable, accrued liabilities, income taxes payable and operating lease liabilities	(1,470)		(38,053)
Other changes, net	2,400		560
Net cash used in operating activities	(25,841)		(60,843)

CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property, plant and equipment	(23,986)		(22,519)
Acquired businesses, net of cash acquired	(2,242)		(10,531)

Proceeds from sale of business, net	14,725		0

Investment purchases	(2,138)		0
Proceeds from the sale of property, plant and equipment	82		290
Other, net	27		0
Net cash used in investing activities	(13,532)		(32,760)

CASH FLOWS FROM FINANCING ACTIVITIES:

Dividends paid	(8,678)		(7,349)
Purchase of shares for treasury	(2,909)		(7,479)
Proceeds from long-term debt	14,029		1,061,343
Payments of long-term debt	(7,573)		(939,071)


Financing costs	(571)		(13,176)


Other, net	(214)		83
Net cash provided by (used in) financing activities	(5,916)		94,351


Beginning Balance, October 1, 2020	$	8,505
Provision for expected credit losses	1,228
Amounts written off charged against the allowance	(161)
Other, primarily foreign currency translation	22
Ending Balance, March 31, 2021	$	9,594


	At September 30, 2020		Business Acquisitions (a)		Business Divestitures (b)		Foreign currency translations adjustments		At March 31, 2021
Consumer and Professional Products	$	232,845	$	1,246	$	0	$	3,287	$	237,378
Home and Building Products	191,253		0		0		0		191,253
Defense Electronics	18,545		0		(811)		0		17,734

Total	$	442,643	$	1,246	$	(811)	$	3,287	$	446,365


	At March 31, 2021					At September 30, 2020
	Gross Carrying Amount		Accumulated Amortization		Average Life (Years)	Gross Carrying Amount		Accumulated Amortization
Customer relationships & other	$	189,189	$	71,840	23	$	185,940	$	66,656
Technology and patents	19,529		8,030		13	19,464		8,360
Total amortizable intangible assets	208,718		79,870			205,404		75,016
Trademarks	228,658		—			224,640		—
Total intangible assets	$	437,376	$	79,870		$	430,044	$	75,016



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



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



	(Unaudited)
	March 31, 2020		September 30, 2019
CURRENT ASSETS
Cash and equivalents	$	69,024	$	72,377
Accounts receivable, net of allowances of $12,681 and $7,881	335,033		264,450
Contract costs and recognized income not yet billed, net of progress payments of $22,294 and $13,861	94,495		105,111
Inventories	462,119		442,121
Prepaid and other current assets	42,723		40,799
Assets of discontinued operations	321		321
Total Current Assets	1,003,715		925,179
PROPERTY, PLANT AND EQUIPMENT, net	335,820		337,326
OPERATING LEASE RIGHT-OF-USE ASSETS	156,258		—
GOODWILL	436,782		437,067
INTANGIBLE ASSETS, net	353,743		356,639
OTHER ASSETS	29,556		15,840
ASSETS OF DISCONTINUED OPERATIONS	2,873		2,888
Total Assets	$	2,318,747	$	2,074,939

CURRENT LIABILITIES
Notes payable and current portion of long-term debt	$	9,470	$	10,525
Accounts payable	228,674		250,576
Accrued liabilities	118,479		124,665
Current portion of operating lease liabilities	28,047		—
Liabilities of discontinued operations	2,450		4,333
Total Current Liabilities	387,120		390,099
LONG-TERM DEBT, net	1,216,226		1,093,749
LONG-TERM OPERATING LEASE LIABILITIES	133,498		—
OTHER LIABILITIES	102,295		109,997
LIABILITIES OF DISCONTINUED OPERATIONS	3,154		3,331
Total Liabilities	1,842,293		1,597,176
COMMITMENTS AND CONTINGENCIES - See Note 21
SHAREHOLDERS’ EQUITY
Total Shareholders’ Equity	476,454		477,763
Total Liabilities and Shareholders’ Equity	$	2,318,747	$	2,074,939


	Three Months Ended March 31,						Six Months Ended March 31,							Three Months Ended March 31,				Six Months Ended March 31,
	2020			2019			2020			2019				2021		2020		2021		2020
Revenue	$	566,350		$	549,633		$	1,114,788		$	1,060,155		Revenue	$	634,832	$	566,350	$	1,244,123	$	1,114,788
Cost of goods and services	414,318			412,129			812,835			779,605			Cost of goods and services	464,516		414,318		903,635		812,835
Gross profit	152,032			137,504			301,953			280,550			Gross profit	170,316		152,032		340,488		301,953

Selling, general and administrative expenses	126,467			111,783			244,265			225,537			Selling, general and administrative expenses	126,827		126,467		248,384		244,265


Income from operations	25,565			25,721			57,688			55,013			Income from operations	43,489		25,565		92,104		57,688

Other income (expense)													Other income (expense)
Interest expense	(16,871		)	(17,517		)	(33,082		)	(34,046		)	Interest expense	(15,831)		(16,871)		(31,521)		(33,082)
Interest income	310			212			571			410			Interest income	304		310		349		571
Gain (adjustment) on sale of business													Gain (adjustment) on sale of business	(949)		0		5,291		0
Loss from debt extinguishment, net	(6,690		)	—			(6,690		)	—			Loss from debt extinguishment, net	0		(6,690)		0		(6,690)
Other, net	615			1,268			1,393			2,272			Other, net	847		615		806		1,393
Total other expense, net	(22,636		)	(16,037		)	(37,808		)	(31,364		)	Total other expense, net	(15,629)		(22,636)		(25,075)		(37,808)

Income before taxes from continuing operations	2,929			9,684			19,880			23,649
Provision from income taxes	2,034			3,194			8,373			8,406
Income from continuing operations	$	895		$	6,490		$	11,507		$	15,243
Income before taxes													Income before taxes	27,860		2,929		67,029		19,880
Provision for income taxes													Provision for income taxes	10,748		2,034		20,417		8,373

Discontinued operations:
Loss from operations of discontinued operations	—			(11,000		)	—			(11,000		)
Benefit for income taxes	—			(3,354		)	—			(3,354		)
Loss from discontinued operations	—			(7,646		)	—			(7,646		)
Net income (loss)	$	895		$	(1,156	)	$	11,507		$	7,597

Income (loss) from continuing operations	$	0.02		$	0.16		$	0.28		$	0.37
Income (loss) from discontinued operations	—			(0.19		)	—			(0.19		)

Net income													Net income	$	17,112	$	895	$	46,612	$	11,507

Basic earnings per common share	$	0.02		$	(0.03	)	$	0.28		$	0.19		Basic earnings per common share	$	0.34	$	0.02	$	0.92	$	0.28

Basic weighted-average shares outstanding	41,565			40,949			41,369			40,849			Basic weighted-average shares outstanding	50,838		41,565		50,717		41,369

Income from continuing operations	$	0.02		$	0.15		$	0.26		$	0.36
Income (loss) from discontinued operations	—			(0.18		)	—			(0.18		)

Diluted earnings per common share	$	0.02		$	(0.03	)	$	0.26		$	0.18		Diluted earnings per common share	$	0.32	$	0.02	$	0.88	$	0.26

Diluted weighted-average shares outstanding	43,734			42,832			43,826			42,376			Diluted weighted-average shares outstanding	53,264		43,734		53,211		43,826

Dividends paid per common share	$	0.0750		$	0.0725		$	0.1500		$	0.1450		Dividends paid per common share	$	0.08	$	0.075	$	0.16	$	0.15

Net income (loss)	$	895		$	(1,156	)	$	11,507		$	7,597
Net income													Net income	$	17,112	$	895	$	46,612	$	11,507
Other comprehensive income (loss), net of taxes:													Other comprehensive income (loss), net of taxes:
Foreign currency translation adjustments	(16,471		)	2,885			(10,001		)	(2,851		)	Foreign currency translation adjustments	1,739		(16,471)		13,862		(10,001)
Pension and other post retirement plans	669			184			1,341			368			Pension and other post retirement plans	1,245		669		2,951		1,341
Change in cash flow hedges	968			(189		)	667			(87		)	Change in cash flow hedges	1,791		968		1,103		667

Total other comprehensive income (loss), net of taxes	(14,834		)	2,880			(7,993		)	(2,570		)	Total other comprehensive income (loss), net of taxes	4,775		(14,834)		17,916		(7,993)
Comprehensive income (loss), net	$	(13,939	)	$	1,724		$	3,514		$	5,027
Comprehensive income, net													Comprehensive income, net	$	21,887	$	(13,939)	$	64,528	$	3,514



	At March 31, 2020		At September 30, 2019
Raw materials and supplies	$	122,576	$	121,791
Work in process	99,730		93,830
Finished goods	239,813		226,500
Total	$	462,119	$	442,121



	At September 30, 2019		Goodwill from acquisitions		Other adjustments including currency translations			At March 31, 2020
Consumer and Professional Products	$	227,269	$	3,125	$	(3,410	)	$	226,984
Home and Building Products	191,253		—		—			191,253
Defense Electronics	18,545		—		—			18,545
Total	$	437,067	$	3,125	$	(3,410	)	$	436,782


		Three Months Ended March 31, 2020												Three Months Ended March 31, 2019												Three Months Ended March 31, 2021								Three Months Ended March 31, 2020
		Effective Interest Rate ⁽¹⁾		Cash Interest			Amort. Debt Discount		Amort. Debt Issuance Costs & Other Fees		Total Interest Expense			Effective Interest Rate⁽¹⁾		Cash Interest		Amort. Debt Premium		Amort. Debt Issuance Costs & Other Fees		Total Interest Expense				Effective Interest Rate		Cash Interest		Amort. Debt Premium		Amort. Debt Issuance Costs & Other Fees			Total Interest Expense		Effective Interest Rate		Cash Interest		Amort. Debt Premium		Amort. Debt Issuance Costs & Other Fees		Total Interest Expense
Senior notes due 2028	(a)	6.0	%	$	5,566		$	—	$	135	$	5,701		n/a		$	—	$	—	$	—	$	—	Senior notes due 2028	(a)	6.0	%	$	14,375	$	12	$	505		$	14,892	6.0	%	$	5,566	$	0	$	135	$	5,701
Senior notes due 2022	(a)	5.7	%	8,040			45		628		8,713			5.7	%	13,125		66		951		14,142		Senior notes due 2022	(a)	—		0		0		0			0		5.7	%	8,040		45		628		8,713
Revolver due 2025	(b)	Variable		1,819			—		165		1,984			Variable		1,631		—		400		2,031		Revolver due 2025	(b)	Variable		287		0		122			409		Variable		1,819		0		165		1,984
ESOP Loans	(c)	n/a		—			—		—		—			7.2	%	449		—		155		604
Capital lease - real estate	(d)	6.1	%	52			—		7		59			5.6	%	101		—		6		107

Finance lease - real estate																								Finance lease - real estate	(c)	5.9	%	224		0		7			231		6.1	%	52		0		7		59
Non US lines of credit	(e)	Variable		3			—		8		11			Variable		4		—		4		8		Non US lines of credit	(d)	Variable		4		0		4			8		Variable		3		0		8		11
Non US term loans	(e)	Variable		292			—		7		299			Variable		449		—		26		475		Non US term loans	(d)	Variable		163		0		18			181		Variable		292		0		7		299
Other long term debt	(f)	Variable		132			—		—		132			Variable		147		—		3		150		Other long term debt	(e)	Variable		115		0		1			116		Variable		132		0		0		132
Capitalized interest				(28		)	—		—		(28		)			—		—		—		—		Capitalized interest				(6)		—		—			(6)				(28)		—		—		(28)
Totals				$	15,876		$	45	$	950	$	16,871				$	15,906	$	66	$	1,545	$	17,517	Totals				$	15,162	$	12	$	657		$	15,831			$	15,876	$	45	$	950	$	16,871


		Six Months Ended March 31, 2021								Six Months Ended March 31, 2020
		Effective Interest Rate		Cash Interest		Amort. Debt Premium		Amort. Debt Issuance Costs & Other Fees			Total Interest Expense		Effective Interest Rate		Cash Interest		Amort. Debt Premium		Amort. Debt Issuance Costs & Other Fees		Total Interest Expense
Senior notes due 2028	(a)	6.0	%	$	28,750	$	24	$	1,023		$	29,797	6.0	%	$	5,566	$	0	$	135	$	5,701
Senior notes due 2022	(a)	—		0		0		0			0		5.7	%	21,165		112		1,579		22,856
Revolver due 2025	(b)	Variable		416		0		245			661		Variable		3,201		0		397		3,598



Finance lease - real estate	(c)	5.6	%	456		0		13			469		6.0	%	113		0		13		126
Non US lines of credit	(d)	Variable		7		0		8			15		Variable		7		0		12		19
Non US term loans	(d)	Variable		334		0		35			369		Variable		564		0		19		583
Other long term debt	(e)	Variable		222		0		1			223		Variable		292		0		0		292
Capitalized interest				(13)		—		—			(13)				(93)		—		—		(93)
Totals				$	30,172	$	24	$	1,325		$	31,521			$	30,815	$	112	$	2,155	$	33,082



		Six Months Ended March 31, 2020												Six Months Ended March 31, 2019
		Effective Interest Rate (1)		Cash Interest			Amort. Debt Discount		Amort. Debt Issuance Costs & Other Fees		Total Interest Expense			Effective Interest Rate ⁽¹⁾		Cash Interest		Amort. Debt Premium		Amort. Debt Issuance Costs & Other Fees		Total Interest Expense
Senior notes due 2028	(a)	6.0	%	$	5,566		$	—	$	135	$	5,701		—	%	$	—	$	—	$	—	$	—
Senior notes due 2022	(a)	5.6	%	21,165			112		1,579		22,856			5.7	%	26,250		134		1,902		28,286
Revolver due 2021	(b)	Variable		3,201			—		397		3,598			Variable		2,564		—		541		3,105
ESOP Loans	(c)	n/a		—			—		—		—			6.6	%	937		—		186		1,123
Capital lease - real estate	(d)	6.0	%	113			—		13		126			5.5	%	216		—		12		228
Non US lines of credit	(e)	Variable		7			—		12		19			Variable		11		—		8		19
Non US term loans	(e)	Variable		564			—		19		583			Variable		897		—		53		950
Other long term debt	(f)	Variable		292			—		—		292			Variable		329		—		6		335
Capitalized interest				(93		)	—		—		(93		)			—		—		—		—
Totals				$	30,815		$	112	$	2,155	$	33,082				$	31,204	$	134	$	2,708	$	34,046


~~(f)~~	~~Other long-term debt primarily consists of a loan with the Pennsylvania Industrial Development Authority, with the balance consisting of capital leases.~~



	For the Three Months Ended March 31, 2020								For the Six Months Ended March 31, 2020
REVENUE BY GEOGRAPHIC AREA - DESTINATION	CPP		HBP		Defense Electronics		Total		CPP		HBP		Defense Electronics		Total
United States	$	191,412	$	199,060	$	55,071	$	445,543	$	351,570	$	426,010	$	101,214	$	878,794
Europe	24,737		5		9,880		34,622		31,342		28		15,865		47,235
Canada	17,515		7,867		4,209		29,591		35,296		19,120		6,783		61,199
Australia	39,032		—		189		39,221		93,260		—		795		94,055
All other countries	2,216		2,897		12,260		17,373		4,520		6,052		22,933		33,505
Consolidated revenue	$	274,912	$	209,829	$	81,609	$	566,350	$	515,988	$	451,210	$	147,590	$	1,114,788



	For the Three Months Ended March 31, 2019								For the Six Months Ended March 31, 2019
REVENUE BY GEOGRAPHIC AREA - DESTINATION	CPP		HBP		Defense Electronics		Total		CPP		HBP		Defense Electronics		Total
United States	$	204,445	$	175,945	$	51,179	$	431,569	$	347,361	$	385,772	$	99,474	$	832,607
Europe	20,343		29		8,490		28,862		28,208		46		18,801		47,055
Canada	18,845		6,984		3,058		28,887		38,210		17,965		5,687		61,862
Australia	41,749		266		979		42,994		85,788		450		1,588		87,826
All other countries	2,350		3,575		11,396		17,321		4,639		5,861		20,305		30,805
Consolidated revenue	$	287,732	$	186,799	$	75,102	$	549,633	$	504,206	$	410,094	$	145,855	$	1,060,155


ASSETS	At March 31, 2021		At September 30, 2020
Segment assets:
Consumer and Professional Products	$	1,408,545	$	1,255,127
Home and Building Products	604,325		606,785
Defense Electronics	288,019		329,128
Total segment assets	2,300,889		2,191,040
Corporate	216,571		248,902
Total continuing assets	2,517,460		2,439,942
Assets of discontinued operations	6,820		8,497
Consolidated total	$	2,524,280	$	2,448,439


��	Three Months Ended March 31,				Six Months Ended March 31,
	2021		2020		2021		2020
Balance, beginning of period	$	10,834	$	7,344	$	10,843	$	7,894
Warranties issued and changes in estimated pre-existing warranties	6,477		4,862		11,216		8,227
Actual warranty costs incurred	(4,633)		(4,417)		(9,381)		(8,332)

Balance, end of period	$	12,678	$	7,789	$	12,678	$	7,789



	Three Months Ended March 31, 2020									Three Months Ended March 31, 2019
	Pre-tax			Tax			Net of tax			Pre-tax			Tax			Net of tax
Foreign currency translation adjustments	$	(16,471	)	$	—		$	(16,471	)	$	2,885		$	—		$	2,885
Pension and other defined benefit plans	847			(178		)	669			201			(17		)	184
Cash flow hedges	1,383			(415		)	968			(264		)	75			(189		)
Total other comprehensive income (loss)	$	(14,241	)	$	(593	)	$	(14,834	)	$	2,822		$	58		$	2,880


	For the Three Months Ended March 31,				For the Six Months Ended March 31,
Gain (Loss)	2021		2020		2021		2020


Pension amortization	$	(1,573)	$	(1,046)	$	(3,146)	$	(2,092)
Cash flow hedges	(1,741)		1,050		(2,399)		994

Total gain (loss)	$	(3,314)	$	4	(5,545)		(1,098)
Tax benefit (expense)	696		(1)		1,165		231
Total	$	(2,618)	$	3	$	(4,380)	$	(867)


	At March 31, 2020			March 31, 2021		September 30, 2020
Operating Leases:			Operating Leases:
Right of use assets:			Right of use assets:
Operating right-of-use assets	$	156,258	Operating right-of-use assets	$	154,929	$	161,627

Lease Liabilities:			Lease Liabilities:
Current portion of operating lease liabilities	$	28,047	Current portion of operating lease liabilities	$	30,685	$	31,848
Long-term operating lease liabilities	133,498		Long-term operating lease liabilities	128,714		136,054
Total operating lease liabilities	$	161,545	Total operating lease liabilities	$	159,399	$	167,902

Finance Leases:			Finance Leases:
Property, plant and equipment, net⁽¹⁾	$	14,059	Property, plant and equipment, net(1)	$	18,068	$	18,774

Lease Liabilities:			Lease Liabilities:
Notes payable and current portion of long-term debt	$	4,014	Notes payable and current portion of long-term debt	$	3,110	$	3,352
Long-term debt, net	10,074		Long-term debt, net	14,950		15,339
Total financing lease liabilities	$	14,088	Total financing lease liabilities	$	18,060	$	18,691



	At September 30, 2019
2020	$	35,176
2021	30,730
2022	26,119
2023	20,008
2024	14,198
Thereafter	78,105
Total	$	204,336



($ in thousands)	Parent Company		Guarantor Companies		Non-Guarantor Companies			Elimination			Consolidation
CURRENT ASSETS
Cash and equivalents	$	9,252	$	18,977	$	40,795		$	—		$	69,024
Accounts receivable, net of allowances	—		283,929		206,456			(155,352		)	335,033
Contract costs and recognized income not yet billed, net of progress payments	—		91,998		2,497			—			94,495
Inventories, net	—		391,934		70,756			(571		)	462,119
Prepaid and other current assets	11,482		23,468		5,149			2,624			42,723
Assets of discontinued operations	—		—		321			—			321
Total Current Assets	20,734		810,306		325,974			(153,299		)	1,003,715
PROPERTY, PLANT AND EQUIPMENT, net	1,295		290,685		43,840			—			335,820
OPERATING LEASE RIGHT-OF-USE ASSETS	10,060		127,133		19,065			—			156,258
GOODWILL	—		375,734		61,048			—			436,782
INTANGIBLE ASSETS, net	93		220,796		132,854			—			353,743
INTERCOMPANY RECEIVABLE	67,266		928,899		148,568			(1,144,733		)	—
EQUITY INVESTMENTS IN SUBSIDIARIES	1,658,792		745,746		3,109,559			(5,514,097		)	—
OTHER ASSETS	8,695		37,669		(2,446		)	(14,362		)	29,556
ASSETS OF DISCONTINUED OPERATIONS	—		—		2,873			—			2,873
Total Assets	$	1,766,935	$	3,536,968	$	3,841,335		$	(6,826,491	)	$	2,318,747
CURRENT LIABILITIES
Notes payable and current portion of long-term debt	$	—	$	3,474	$	5,996		$	—		$	9,470
Accounts payable and accrued liabilities	28,873		412,118		58,903			(152,741		)	347,153
Current portion of operating lease liabilities	1,830		22,068		4,149			—			28,047
Liabilities of discontinued operations	—		—		2,450			—			2,450
Total Current Liabilities	30,703		437,660		71,498			(152,741		)	387,120

LONG-TERM DEBT, net	1,167,023		10,642		38,561			—			1,216,226
LONG-TERM OPERATING LEASE LIABILITIES	9,353		108,872		15,273			—			133,498
INTERCOMPANY PAYABLES	63,230		563,964		536,815			(1,164,009		)	—
OTHER LIABILITIES	20,172		77,292		12,650			(7,819		)	102,295
LIABILITIES OF DISCONTINUED OPERATIONS	—		—		3,154			—			3,154
Total Liabilities	1,290,481		1,198,430		677,951			(1,324,569		)	1,842,293
SHAREHOLDERS’ EQUITY	476,454		2,338,538		3,163,384			(5,501,922		)	476,454
Total Liabilities and Shareholders’ Equity	$	1,766,935	$	3,536,968	$	3,841,335		$	(6,826,491	)	$	2,318,747



($ in thousands)	Parent Company		Guarantor Companies		Non-Guarantor Companies			Elimination			Consolidation
CURRENT ASSETS
Cash and equivalents	$	1,649	$	25,217	$	45,511		$	—		$	72,377
Accounts receivable, net of allowances	—		227,069		38,580			(1,199		)	264,450
Contract costs and recognized income not yet billed, net of progress payments	—		104,109		1,002			—			105,111
Inventories, net	—		372,839		69,540			(258		)	442,121
Prepaid and other current assets	8,238		25,754		6,951			(144		)	40,799
Assets of discontinued operations	—		—		321			—			321
Total Current Assets	9,887		754,988		161,905			(1,601		)	925,179

PROPERTY, PLANT AND EQUIPMENT, net	1,184		289,282		46,860			—			337,326
GOODWILL	—		375,734		61,333			—			437,067
INTANGIBLE ASSETS, net	93		224,275		132,271			—			356,639
INTERCOMPANY RECEIVABLE	5,834		864,884		75,684			(946,402		)	—
EQUITY INVESTMENTS IN SUBSIDIARIES	1,628,031		581,438		3,233,038			(5,442,507		)	—
OTHER ASSETS	8,182		24,635		(2,352		)	(14,625		)	15,840
ASSETS OF DISCONTINUED OPERATIONS	—		—		2,888			—			2,888
Total Assets	$	1,653,211	$	3,115,236	$	3,711,627		$	(6,405,135	)	$	2,074,939
CURRENT LIABILITIES
Notes payable and current portion of long-term debt	$	—	$	3,075	$	7,450		$	—		$	10,525
Accounts payable and accrued liabilities	41,796		266,411		68,390			(1,356		)	375,241
Liabilities of discontinued operations	—		—		4,333			—			4,333
Total Current Liabilities	41,796		269,486		80,173			(1,356		)	390,099
LONG-TERM DEBT, net	1,040,449		3,119		50,181			—			1,093,749
INTERCOMPANY PAYABLES	71,634		457,265		444,557			(973,456		)	—
OTHER LIABILITIES	21,569		81,582		15,017			(8,171		)	109,997
LIABILITIES OF DISCONTINUED OPERATIONS	—		—		3,331			—			3,331
Total Liabilities	1,175,448		811,452		593,259			(982,983		)	1,597,176
SHAREHOLDERS’ EQUITY	477,763		2,303,784		3,118,368			(5,422,152		)	477,763
Total Liabilities and Shareholders’ Equity	$	1,653,211	$	3,115,236	$	3,711,627		$	(6,405,135	)	$	2,074,939


	Cash Charges				Non-Cash Charges
	Personnel related costs		Facilities, exit costs and other		Facility and other		Total		Capital Investments
Phase I	$	12,000	$	4,000	$	19,000	$	35,000	$	40,000
Phase II	14,000		16,000		—		30,000		25,000
Total Anticipated Charges	26,000		20,000		19,000		65,000		65,000




Total 2020 restructuring charges	(5,620)		(3,357)		(4,692)		(13,669)		(6,733)
Q1 FY2021 Activity	(362)		(2,524)		(193)		(3,079)		(2,236)
Q2 FY2021 Activity	(722)		(4,283)		(2,497)		(7,502)		$	(3,209)
Total 2021 restructuring charges	(1,084)		(6,807)		(2,690)		(10,581)		(5,445)
Total cumulative charges	(6,704)		(10,164)		(7,382)		(24,250)		(12,178)
Estimate to Complete	$	19,296	$	9,836	$	11,618	$	40,750	$	52,822


Cash Flows from Operations	For the Six Months Ended March 31,
	2021		2020
Net Cash Flows Provided by (Used In):
Operating activities	$	(25,841)	$	(60,843)
Investing activities	(13,532)		(32,760)
Financing activities	(5,916)		94,351



Cash Flows from Continuing Operations	For the Six Months Ended March 31,
(in thousands)	2020			2019
Net Cash Flows Provided by (Used In):
Operating activities	$	(60,843	)	$	(55,006	)
Investing activities	(32,760		)	(37,328		)
Financing activities	94,351			84,059


Cash and Equivalents and Debt	March 31,		September 30,		Cash and Equivalents and Debt	March 31,		September 30,
(in thousands)	2020		2019
						2021		2020
Cash and equivalents	$	69,024	$	72,377	Cash and equivalents	$	175,564	$	218,089
Notes payables and current portion of long-term debt	9,470		10,525		Notes payables and current portion of long-term debt	14,913		9,922
Long-term debt, net of current maturities	1,216,226		1,093,749		Long-term debt, net of current maturities	1,043,859		1,037,042
Debt discount/premium and issuance costs	16,804		9,857		Debt discount/premium and issuance costs	16,143		17,458
Total debt	1,242,500		1,114,131		Total debt	1,074,915		1,064,422
Debt, net of cash and equivalents	$	1,173,476	$	1,041,754	Debt, net of cash and equivalents	$	899,351	$	846,333


	For the Six Months Ended				For the Year Ended
	March 31, 2021				September 30, 2020
	Parent Company		Guarantor Companies		Parent Company		Guarantor Companies
Net sales	$	—	$	963,060	$	—	$	1,938,972
Gross profit	$	—	$	244,410	$	—	$	488,048
Income (loss) from operations	$	(11,830)	$	65,333	$	(24,876)	$	130,147
Equity in earnings of Guarantor subsidiaries	$	38,021	$	—	$	58,455	$	—
Net income (loss)	$	(17,849)	$	38,021	$	(48,546)	$	58,455



Period	(a) Total Number of Shares (or Units) Purchased		(b) Average Price Paid Per Share (or Unit)		(c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs (2)	(d) Maximum Number (or Approximate Dollar Value) of Shares (or Units) That May Yet Be Purchased Under the Plans or Programs (2)
January 1 - 31, 2020	261,223	(1)	$	21.90	—
February 1 - 29, 2020					—
March 1 - 31, 2020	—		—		—
Total	261,223		$	21.90	—	$	57,955


Item 6		Exhibits


~~Item 6~~		~~Exhibits~~
~~4.1~~31.1	~~Indenture, dated as of February 19, 2020, among Griffon Corporation, the Guarantors named on the signature pages thereto and Wells Fargo Bank, National Association, as Trustee~~ ~~(Exhibit 4.1 to the Current Report on Form 8-K filed February 4, 2020 (Commission File No. 1-06620)).~~

~~4.2~~	Registration Rights Agreement, dated as of February 19, 2020, by and among Griffon Corporation, the Guarantors party thereto and BofA Securities, Inc., as the Representative of the several Initial Purchasers ~~(Exhibit 4.2 to the Current Report on Form 8-K filed February 4, 2020 (Commission File No. 1-06620)).~~

~~31.1~~	Certification pursuant to Rule 13a-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2		Certification pursuant to Rule 13a-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32		Certifications pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

~~99.1~~		Purchase Agreement, dated as of February 4, 2020, by and among Griffon Corporation, the Guarantors named therein and BofA Securities, Inc., as Representative of the several Initial Purchasers named therein (Exhibit 99.1 to the Current Report on Form 8-K filed February 4, 2020 (Commission File No. 1-06620)).
101.INS
~~101.INS~~	XBRL Instance Document

101.SCH		XBRL Taxonomy Extension Schema Document

101.CAL		XBRL Taxonomy Extension Calculation Document

101.DEF		XBRL Taxonomy Extension Definitions Document

101.LAB		XBRL Taxonomy Extension Labels Document

101.PRE		XBRL Taxonomy Extension Presentations Document



			GRIFFON CORPORATION

			/s/ Brian G. Harris
			Brian G. Harris
			Senior Vice President and Chief Financial Officer
			(Principal Financial Officer)

			/s/ W. Christopher Durborow
			W. Christopher Durborow
			Vice President ~~Controller~~ and Chief Accounting Officer
			(Principal Accounting Officer)