UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
---------
( X ) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2001
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
------- -------
Commission File Number: 1-6620
GRIFFON CORPORATION
----------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 11-1893410
- ------------------------------- ----------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
100 JERICHO QUADRANGLE, JERICHO, NEW YORK 11753
- ----------------------------------------- --------
(Address of principal executive offices) (Zip Code)
(516) 938-5544
--------------------------------------------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months, and (2) has been subject to such filing requirements
for the past 90 days.
X Yes No
--- ---
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date. 29,741,157 shares of Common
Stock as of July 31, 2001.
FORM 10-Q
---------
CONTENTS
--------
PAGE
----
PART I - FINANCIAL INFORMATION (Unaudited)
---------------------
Condensed Consolidated Balance Sheets at June 30, 2001
and September 30, 2000........................................ 1
Condensed Consolidated Statements of Income for the Three
Months and Nine Months Ended June 30, 2001 and 2000 .......... 3
Condensed Consolidated Statements of Cash Flows for the
Nine Months Ended June 30, 2001 and 2000 ..................... 5
Notes to Condensed Consolidated Financial Statements.......... 6
Management's Discussion and Analysis of Financial
Condition and Results of Operations........................... 10
Quantitative and Qualitative Disclosure about Market Risk..... 12
PART II - OTHER INFORMATION
-----------------
Item 1: Legal Proceedings .................................... 13
Item 2: Changes in Securities ................................ 13
Item 3: Defaults upon Senior Securities ...................... 13
Item 4: Submission of Matters to a Vote of Security Holders... 13
Item 5: Other Information .................................... 13
Item 6: Exhibits and Reports on Form 8-K ..................... 13
Signature .................................................... 14
GRIFFON CORPORATION AND SUBSIDIARIES
------------------------------------
CONDENSED CONSOLIDATED BALANCE SHEETS
-------------------------------------
June 30, September 30,
2001 2000
--------- ------------
(Unaudited) (Note 1)
ASSETS
- ------
CURRENT ASSETS:
Cash and cash equivalents $ 43,509,000 $ 26,616,000
Accounts receivable, less allowance for
doubtful accounts 128,507,000 144,259,000
Contract costs and recognized income not
yet billed 61,397,000 77,513,000
Inventories (Note 2) 96,662,000 98,440,000
Prepaid expenses and other current assets 19,754,000 18,891,000
------------ ------------
Total current assets 349,829,000 365,719,000
PROPERTY, PLANT AND EQUIPMENT
at cost, less accumulated depreciation
and amortization of $100,925,000 at
June 30, 2001 and $87,533,000 at
September 30, 2000 143,109,000 142,944,000
OTHER ASSETS 74,197,000 73,363,000
------------ ------------
$567,135,000 $582,026,000
============ ============
<FN>
See notes to condensed consolidated financial statements.
</FN>
1
GRIFFON CORPORATION AND SUBSIDIARIES
------------------------------------
CONDENSED CONSOLIDATED BALANCE SHEETS
-------------------------------------
June 30, September 30,
2001 2000
--------- ------------
(Unaudited) (Note 1)
LIABILITIES AND SHAREHOLDERS' EQUITY
- ------------------------------------
CURRENT LIABILITIES:
Accounts and notes payable $ 75,662,000 $ 90,435,000
Other current liabilities 82,673,000 83,621,000
------------ ------------
Total current liabilities 158,335,000 174,056,000
------------ ------------
LONG-TERM DEBT 109,213,000 125,916,000
------------ ------------
MINORITY INTEREST AND OTHER 17,893,000 18,093,000
------------ ------------
SHAREHOLDERS' EQUITY (Note 3):
Preferred stock, par value $.25 per --- ---
share, authorized 3,000,000 shares,
no shares issued
Common stock, par value $.25 per
share, authorized 85,000,000
shares, issued 31,782,409 shares
at June 30, 2001 and 31,749,199 shares at
September 30, 2000; 2,068,002 shares in
treasury at June 30, 2001 and September
30, 2000 7,946,000 7,937,000
Other shareholders' equity 273,748,000 256,024,000
------------ ------------
Total shareholders' equity 281,694,000 263,961,000
------------ ------------
$567,135,000 $582,026,000
============ ============
<FN>
See notes to condensed consolidated financial statements.
</FN>
2
GRIFFON CORPORATION AND SUBSIDIARIES
------------------------------------
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
-------------------------------------------
(Unaudited)
THREE MONTHS ENDED JUNE 30,
---------------------------
2001 2000
---- ----
Net sales $289,384,000 $278,719,000
Cost of sales 213,468,000 207,339,000
------------ ------------
Gross profit 75,916,000 71,380,000
Selling, general and administrative expenses 58,153,000 56,981,000
------------ ------------
Income from operations 17,763,000 14,399,000
------------ ------------
Other income (expense):
Interest expense (2,494,000) (3,224,000)
Interest income 434,000 270,000
Other, net (256,000) 79,000
------------ ------------
(2,316,000) (2,875,000)
------------ ------------
Income before income taxes 15,447,000 11,524,000
Provision for income taxes 6,333,000 4,609,000
------------ ------------
Income before minority interest 9,114,000 6,915,000
Minority interest (1,383,000) (667,000)
------------ ------------
Net income $ 7,731,000 $ 6,248,000
============ ============
Earnings per share of common stock (Note 3):
Basic $ .26 $ .21
============ ============
Diluted $ .25 $ .21
============ ============
<FN>
See notes to condensed consolidated financial statements.
</FN>
3
GRIFFON CORPORATION AND SUBSIDIARIES
------------------------------------
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
-------------------------------------------
(Unaudited)
NINE MONTHS ENDED JUNE 30,
--------------------------
2001 2000
---- ----
Net sales $841,768,000 $818,369,000
Cost of sales 623,332,000 611,688,000
------------ ------------
Gross profit 218,436,000 206,681,000
Selling, general and administrative expenses 172,011,000 169,763,000
------------ ------------
Income from operations (Note 5) 46,425,000 36,918,000
------------ ------------
Other income (expense):
Interest expense (9,217,000) (8,323,000)
Interest income 1,602,000 784,000
Other, net (625,000) 69,000
------------ ------------
(8,240,000) (7,470,000)
------------ ------------
Income before income taxes 38,185,000 29,448,000
Provision for income taxes 15,656,000 11,779,000
------------ ------------
Income before minority interest and cumulative
effect of a change in accounting principle 22,529,000 17,669,000
Minority interest (Note 4) (4,318,000) (386,000)
------------ ------------
Income before cumulative effect of a change in
accounting principle 18,211,000 17,283,000
Cumulative effect of a change in accounting
principle, net of income taxes (Note 4) --- (5,290,000)
------------ ------------
Net income $ 18,211,000 $ 11,993,000
============ ============
Basic earnings per share of common stock (Note 3):
Income before cumulative effect of a change in
accounting principle $ .61 $ .57
Cumulative effect of a change in accounting
principle --- (.17)
------------ ------------
$ .61 $ .40
============ ============
Diluted earnings per share of common stock (Note 3):
Income before cumulative effect of a change in
accounting principle $ .60 $ .57
Cumulative effect of a change in accounting
principle --- (.17)
------------ ------------
$ .60 $ .40
============ ============
<FN>
See notes to condensed consolidated financial statements.
</FN>
4
GRIFFON CORPORATION AND SUBSIDIARIES
------------------------------------
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
-----------------------------------------------
(Unaudited)
NINE MONTHS ENDED JUNE 30,
--------------------------
2001 2000
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 18,211,000 $ 11,993,000
------------ ------------
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 18,270,000 17,499,000
Minority interest 4,318,000 386,000
Pension curtailment gain (3,156,000) ---
Cumulative effect of a change in accounting
principle --- 5,290,000
Provision for losses on accounts receivable 2,469,000 1,959,000
Change in assets and liabilities:
(Increase) decrease in accounts receivable
and contract costs and recognized income
not yet billed 29,192,000 (19,486,000)
(Increase) decrease in inventories 1,581,000 (8,960,000)
Increase in prepaid expenses and other assets (2,274,000) (4,575,000)
Increase (decrease) in accounts payable and
accrued liabilities (1,131,000) 5,515,000
Other changes, net 5,016,000 2,554,000
------------ ------------
Total adjustments 54,285,000 182,000
------------ ------------
Net cash provided by operating activities 72,496,000 12,175,000
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property, plant and equipment (19,560,000) (32,908,000)
Acquired businesses --- (14,589,000)
Decrease in equipment lease deposits 475,000 1,851,000
Other, net (244,000) 4,095,000
------------ ------------
Net cash used in investing activities (19,329,000) (41,551,000)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Purchase of treasury shares --- (4,385,000)
Proceeds from issuance of long-term debt 1,406,000 44,625,000
Payments of long-term debt (28,665,000) (8,659,000)
Increase (decrease) in short-term borrowings (4,260,000) 2,500,000
Other, net (4,755,000) (1,436,000)
------------ ------------
Net cash provided by (used in) financing
activities (36,274,000) 32,645,000
------------ ------------
NET INCREASE IN CASH AND CASH EQUIVALENTS 16,893,000 3,269,000
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 26,616,000 21,242,000
------------ ------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 43,509,000 $ 24,511,000
============ ============
<FN>
See notes to condensed consolidated financial statements.
</FN>
5
GRIFFON CORPORATION AND SUBSIDIARIES
------------------------------------
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
----------------------------------------------------
(Unaudited)
(1) Basis of presentation -
---------------------
The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and Article
10 of Regulation S-X. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring adjustments) considered necessary for a fair presentation
have been included. Operating results for the three-month and nine-month periods
ended June 30, 2001 are not necessarily indicative of the results that may be
expected for the year ending September 30, 2001. The balance sheet at September
30, 2000 has been derived from the audited financial statements at that date.
For further information, refer to the consolidated financial statements and
footnotes thereto included in the company's annual report to shareholders for
the year ended September 30, 2000.
(2) Inventories -
-----------
Inventories, stated at the lower of cost (first-in, first-out or average)
or market, are comprised of the following:
June 30, September 30,
2001 2000
-------- -------------
Finished goods......................... $49,068,000 $58,390,000
Work in process........................ 26,241,000 20,842,000
Raw materials and supplies............. 21,353,000 19,208,000
------------ ------------
$96,662,000 $98,440,000
=========== ===========
(3) Earnings per share (EPS) and 10 percent stock dividend -
------------------------------------------------------
Basic EPS is calculated by dividing income by the weighted average number
of shares of common stock outstanding during the period. The weighted average
number of shares of common stock used in determining basic EPS was 30,006,000
and 29,977,000 for the three months ended June 30, 2001 and 2000, respectively
and 29,989,000 and 30,151,000 for the nine months ended June 30, 2001 and 2000,
respectively.
Diluted EPS is calculated by dividing income by the weighted average number
of shares of common stock outstanding plus additional common shares that could
be issued in connection with potentially dilutive securities. The weighted
average number of shares of common stock used in determining diluted EPS was
30,459,000 and 30,173,000 for the three months ended June 30, 2001 and 2000,
respectively and 30,251,000 and 30,330,000 for the nine months ended June 30,
2001 and 2000, respectively, and reflects additional shares in connection with
stock option and other stock-based compensation plans.
6
Options to purchase approximately 2,996,000 and 5,597,000 shares of common
stock were not included in the computations of diluted earnings per share for
the three months ended June 30, 2001 and 2000, respectively, and options to
purchase approximately 3,460,000 and 4,180,000 shares of common stock were not
included in the computation of diluted earnings per share for the nine months
ended June 30, 2001 and 2000, respectively, because the effects would have been
antidilutive.
On August 6, 2001 the company's Board of Directors authorized a 10 percent
common stock dividend payable on September 4, 2001 to holders of record on
August 20, 2001. After giving retroactive effect to the stock dividend, proforma
basic and diluted earnings per share would be as follows:
Three Months Ended June 30, Nine Months Ended June 30,
-------------------------- -------------------------
2001 2000 2001 2000
---- ---- ---- ----
Income before cumulative effect of
a change in accounting principle $ .23 $ .19 $ .55 $ .52
Cumulative effect of a change in
accounting principle - - - (.16)
----- ----- ----- -----
Net income $ .23 $ .19 $ .55 $ .36
===== ===== ===== =====
(4) Start-up costs -
--------------
Effective October 1, 1999 the company adopted the provisions of the
American Institute of Certified Public Accountants' Statement of Position No.
98-5 (SOP 98-5), "Reporting on the Costs of Start-Up Activities". SOP 98-5
requires that, at the date of adoption, costs of start-up activities previously
capitalized be written-off as a cumulative effect of a change in accounting
principle, and that after adoption, such costs are to be expensed as incurred.
Consequently, in the first quarter of fiscal 2000, the company's 60%-owned
joint venture wrote off costs that were previously capitalized in connection
with the start-up of the venture and the implementation of additional production
capacity. The cumulative effect of this change in accounting principle is
$5,290,000 (net of $3,784,000 income tax effect). The minority interest's share
of the net charge is $2,116,000 and is included as an offsetting credit in
"Minority interest" in the accompanying Condensed Consolidated Statement of
Income for the nine months ended June 30, 2000.
(5) Pension curtailment gain -
------------------------
Pursuant to the provisions of Statement of Financial Accounting Standards
No. 88, "Accounting for Settlements and Curtailments of Defined Benefit Pension
Plans and for Termination Benefits," modifications to certain employee benefits
and related benefit freezes resulted in the recognition of a pretax curtailment
gain of approximately $3.1 million in the nine months ended June 30, 2001.
7
(6) Business segments -
-----------------
The company's reportable business segments are as follows - Garage Doors
(manufacture and sale of residential and commercial/industrial garage doors, and
related products); Installation Services (sale and installation of building
products primarily for new construction, such as garage doors, garage door
openers, manufactured fireplaces and surrounds, and cabinets); Electronic
Information and Communication Systems (communication and information systems for
government and commercial markets); and Specialty Plastic Films (manufacture and
sale of plastic films and film laminates for baby diapers, adult incontinence
care products, disposable surgical and patient care products and plastic
packaging).
Information on the company's business segments is as follows:
Electronic
Information
Specialty and
Garage Installation Plastic Communication
Doors Services Films Systems Totals
------ ------------ --------- ------------- ------
REVENUES FROM EXTERNAL
CUSTOMERS -
Three months ended
June 30, 2001 $102,758,000 $ 68,213,000 $ 75,709,000 $ 42,704,000 $289,384,000
June 30, 2000 100,027,000 67,046,000 63,880,000 47,766,000 278,719,000
Nine months ended
June 30, 2001 287,735,000 198,419,000 225,463,000 130,151,000 841,768,000
June 30, 2000 296,058,000 200,829,000 190,091,000 131,391,000 818,369,000
INTERSEGMENT REVENUES -
Three months ended
June 30, 2001 $ 6,469,000 $ 78,000 $ --- $ --- $ 6,547,000
June 30, 2000 6,784,000 65,000 --- --- 6,849,000
Nine months ended
June 30, 2001 18,717,000 212,000 --- --- 18,929,000
June 30, 2000 22,428,000 319,000 --- --- 22,747,000
SEGMENT PROFIT -
Three months ended
June 30, 2001 $ 5,766,000 $ 2,030,000 $ 9,076,000 $ 2,931,000 $19,803,000
June 30, 2000 4,923,000 2,016,000 4,396,000 5,536,000 16,871,000
Nine months ended
June 30, 2001 9,266,000 3,945,000 30,702,000 9,059,000 52,972,000
June 30, 2000 12,825,000 5,334,000 12,671,000 13,226,000 44,056,000
Following is a reconciliation of segment profit to amounts reported in the
consolidated financial statements:
Three Months Ended June 30, Nine Months Ended June 30,
--------------------------- --------------------------
2001 2000 2001 2000
---- ---- ---- ----
Profit for all segments $19,803,000 $16,871,000 $52,972,000 $44,056,000
Unallocated amounts (2,296,000) (2,393,000) (7,172,000) (7,069,000)
Interest expense, net (2,060,000) (2,954,000) (7,615,000) (7,539,000)
----------- ----------- ----------- -----------
Income before
income taxes $15,447,000 $11,524,000 $38,185,000 $29,448,000
=========== =========== =========== ===========
8
(7) Recently issued accounting standards -
------------------------------------
In June 2001 the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards Nos. 141 and 142 (SFAS 141 and SFAS 142),
"Business Combinations" and "Goodwill and Other Intangible Assets",
respectively. SFAS 141 addresses financial accounting and reporting for business
combinations, requiring the use of the purchase method of accounting. SFAS 142
addresses accounting and reporting for acquired goodwill and other intangible
assets. It eliminates the previous requirement to amortize goodwill and other
intangible assets with indefinite lives and establishes new requirements with
respect to the recognition and valuation of goodwill and other intangible
assets. The company anticipates adopting these standards for the fiscal year
beginning October 1, 2001. Amortization of goodwill approximates $2 million per
year. The company is presently determining what impact, if any, that adoption
will have on the carrying value of existing goodwill.
9
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
-----------------------------------------------------------
AND RESULTS OF OPERATIONS
-------------------------
RESULTS OF OPERATIONS
Three months ended June 30, 2001
- --------------------------------
Net sales were $289.4 million for the three-month period ended June 30,
2001, an increase of $10.7 million or 3.8%.
Net sales of the garage doors segment were $109.2 million, an increase of
$2.4 million or 2.3% compared to last year due primarily to higher unit sales of
residential garage doors. The increase in sales was principally due to stronger
demand in the retail distribution channel.
Net sales of the installation services segment were $68.3 million, an
increase of $1.2 million or 1.8% compared to last year. The increase was
primarily a result of sales growth due to expanded product offerings.
Net sales of the specialty plastic films segment were $75.7 million, an
increase of $11.8 million or 18.5% compared to last year. Higher unit sales in
both the segment's domestic and foreign operations, partly offset by the effect
of a stronger U.S. dollar on foreign operations and by the effect of selling
price adjustments to pass through raw material cost decreases to customers, were
the principal reasons for the increase.
Net sales of the electronic information and communication systems segment
were $42.7 million, a decrease of $5.1 million or 10.6% compared to last year.
The decrease in sales was principally due to delays in anticipated orders in
connection with certain on-going programs.
Operating income for all business segments for the three months ended June
30, 2001 was $19.8 million, an increase of $2.9 million or 17.4% compared to
last year.
Operating income of the garage doors segment was $5.8 million, an increase
of $.8 million or 17.1% compared to last year. The effect of increased sales and
cost reduction programs were the principal reasons for the increase. The company
anticipates that garage doors' near-term operating results will continue to
improve.
Operating income for the installation services segment was $2.0 million,
approximately the same as last year.
Operating income of the specialty plastic films segment was $9.1 million,
an increase of $4.7 million or 106.5% compared to last year. Increased volume
and manufacturing efficiencies, both domestically and in Europe, were the
primary reasons for the improvement in the segment's operating results, and
further strong performance is anticipated.
Operating income of the electronic information and communication systems
segment was $2.9 million, a decrease of $2.6 million or 47.1% compared to last
year. The effect of lower sales and increased research and development
expenditures, including costs associated with its previously announced
technology initiatives which are expected to total approximately $5 million for
the year, were the principal reasons for the decrease. Although it is expected
that this segment will continue to be impacted by the increased research and
development activities and by reduced orders in its integrated circuit business,
the company anticipates near-term improvement in the segment's core operations.
Net interest expense decreased by $.9 million compared to last year
principally due to the effect of debt repayments and lower interest rates.
10
Nine months ended June 30, 2001
- -------------------------------
Net sales were $841.8 million for the nine-month period ended June 30,
2001, an increase of $23.4 million or 2.9%.
Net sales of the garage doors segment were $306.5 million, a decrease of
$12.0 million or 3.8% compared to last year. Lower unit sales due to the
continued effects of a slowing economy, competitive markets and winter weather
conditions in the first half of the year, partly offset by higher unit sales
from improved operations in the third quarter, were the principal reasons for
the decrease.
Net sales of the installation services segment were $198.6 million, a
decrease of $2.5 million or 1.3% compared to last year. The adverse impact of
softer housing markets was mitigated somewhat by growth from expanded product
offerings.
Net sales of the specialty plastic films segment were $225.5 million, an
increase of $35.4 million or 18.6% compared to last year. Higher unit sales
volume both domestically and at Finotech, the segment's European joint venture,
partly offset by the effect of a stronger U.S. dollar on foreign operations and
selling price adjustments to pass through raw material cost decreases to
customers, were the principal reasons for the increase.
Net sales of the electronic information and communication systems segment
were $130.2 million, a decrease of $1.2 million or .9% compared to last year.
Higher funding levels on existing programs and a full nine months of operating
results from the search and weather radar business acquired last year were
offset by the effect of delays in anticipated orders in connection with certain
on-going programs.
Operating income for all business segments for the nine months ended June
30, 2001 was $53.0 million, an increase of $8.9 million or 20.2% compared to
last year. Operating results for the nine months ended June 30, 2001 included a
pretax pension curtailment gain of approximately $3.1 million, which was evenly
divided between the specialty plastic films and garage doors segments.
Operating income of the garage doors segment was $9.3 million, a decrease
of $3.6 million or 27.8% compared to last year. Garage doors' lower sales and
lower margins through the first half of the year were partly offset by the
effect of cost reduction programs and by higher sales in the third quarter.
Unprofitable operations in a commercial door product line and competitive
pricing also contributed to the segment's reduced operating results for the nine
months.
Operating income of the installation services segment was $3.9 million, a
decrease of $1.4 million or 26.0% compared to last year. Higher margins from
improved product mix and expanded product offerings were offset by higher
distribution and selling costs.
Operating income of the specialty plastic films segment was $30.7 million,
an increase of $18.0 million or 142.3% compared to last year. The increase was
primarily due to higher unit sales in both the segment's domestic and European
operations and related manufacturing efficiencies.
Operating income of the electronic information and communication systems
segment was $9.1 million, a decrease of $4.2 million or 31.5% compared to last
year, primarily due to costs associated with its previously announced technology
initiatives and lower sales.
11
LIQUIDITY AND CAPITAL RESOURCES
Cash flow provided by operations for the nine months ended June 30, 2001
was $72.5 million compared to $12.2 million last year principally due to
increased earnings and improved working capital management. Working capital was
$191.5 million at June 30, 2001.
Net cash used in investing activities during the nine months aggregated
$19.3 million, and principally consisted of capital expenditures made in
connection with increasing production capacity.
Net cash used in financing activities during the nine months was
approximately $36.3 million. Substantially all of these cash flows were in
connection with the repayment of bank borrowings. During the quarter ended June
30, 2001 the company's European operations entered into new bank loan
agreements, replacing then existing financing arrangements. The new agreements,
which bear interest at variable rates based upon Euribor, include a term loan of
approximately $13 million with maturities through 2004 and revolving credits for
up to approximately $20 million. Subsequent to June 30, 2001, outstanding
borrowings under the revolving credits were reduced by approximately $9 million.
Anticipated cash flows from operations, together with existing cash, bank
lines of credit and lease line availability, should be adequate to finance
presently anticipated working capital and capital expenditure requirements and
to repay long-term debt as it matures.
RECENTLY ISSUED ACCOUNTING STANDARDS
In June 2001 the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards Nos. 141 and 142 (SFAS 141 and SFAS 142),
"Business Combinations" and "Goodwill and Other Intangible Assets",
respectively. Refer to Note 7 of "Notes to Condensed Consolidated Financial
Statements" for more information about these new standards.
FORWARD-LOOKING STATEMENTS
All statements other than statements of historical fact included in this
report, including without limitation statements regarding the company's
financial position, business strategy, and the plans and objectives of the
company's management for future operations, are forward-looking statements. When
used in this report, words such as "anticipate", "believe", "estimate",
"expect", "intend" and similar expressions, as they relate to the company or its
management, identify forward-looking statements. Such forward-looking statements
are based on the beliefs of the company's management, as well as assumptions
made by and information currently available to the company's management. Actual
results could differ materially from those contemplated by the forward-looking
statements as a result of certain factors, including but not limited to,
business and economic conditions, competitive factors and pricing pressures,
capacity and supply constraints. Such statements reflect the views of the
company with respect to future events and are subject to these and other risks,
uncertainties and assumptions relating to the operations, results of operations,
growth strategy and liquidity of the company. Readers are cautioned not to place
undue reliance on these forward-looking statements. The company does not
undertake any obligation to release publicly any revisions to these
forward-looking statements to reflect future events or circumstances or to
reflect the occurrence of unanticipated events.
QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
- ---------------------------------------------------------
Management does not believe that there are any material market risk
exposures with respect to derivative or other financial instruments that are
required to be disclosed.
12
PART II - OTHER INFORMATION
Item 1 Legal Proceedings
-----------------
None
Item 2 Changes in Securities
---------------------
None
Item 3 Defaults upon Senior Securities
-------------------------------
None
Item 4 Submission of Matters to a Vote of Security Holders
---------------------------------------------------
None
Item 5 Other Information
-----------------
None
Item 6 Exhibits and Reports on Form 8-K
--------------------------------
None
13
SIGNATURE
---------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
GRIFFON CORPORATION
By/s/ Robert Balemian
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Robert Balemian
President and Chief Financial Officer
(Principal Financial Officer)
Date: August 7, 2001
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