Exhibit 99.2
PRO FORMA FINANCIAL INFORMATION
On June 30, 2005, the Registrant entered into a Stock Purchase Agreement
with BBA Holding Deutschland GmbH ("BBA") pursuant to which the Registrant,
through its indirect, wholly-owned subsidiary, Clopay Folien GmbH, ("Clopay"),
purchased from BBA all of the share capital of BBA Joint Venture Holding GmbH
("JV Holding") for $82 million in cash (the "Transaction"). JV Holding was the
owner of the forty (40%) percent of Finotech Verbundstoffe GmbH & Co KG
("Finotech") that Clopay did not already own. The transaction was funded with
$22 million of existing cash and borrowings of $60 million bearing interest at
approximately 5.1% pursuant to the Registrant's existing credit facility. The
following unaudited pro forma financial statements give effect to the
acquisition by the Registrant of the 40% minority interest in Finotech. The pro
forma adjustments reflect preliminary purchase accounting for the transaction
because the valuation of underlying assets has not been completed and the tax
attributes of the transaction have not been finalized. The purchase price
allocation is expected to be completed in connection with the preparation of the
consolidated financial statements for the fiscal year ended September 30, 2005.
The unaudited pro forma balance sheet is based upon the consolidated balance
sheet of Griffon Corporation and has been prepared to reflect the acquisition of
the Finotech minority interest as of June 30, 2005. The unaudited pro forma
statements of income for the year ended September 30, 2004 and for the
nine-month period ended June 30, 2005 are based upon the historical financial
statements for such periods and reflect results of operations as if the
acquisition of the Finotech minority interest had occurred on October 1, 2003
for both pro forma statements of income.
Pro Forma Consolidated Balance Sheet
June 30, 2005
Griffon Griffon
Corporation Pro Forma Corporation
& subsidiaries Adjustments Pro Forma
-------------- ----------- ---------
ASSETS
- ------
CURRENT ASSETS:
Cash and cash equivalents $ 88,481,000 $ (22,000,000) A $ 66,481,000
Accounts receivable, less allowance for
doubtful accounts 173,729,000 173,729,000
Contract costs and recognized income not
yet billed 36,732,000 36,732,000
Inventories 143,659,000 366,400 B 144,025,400
Prepaid expenses and other current assets 39,421,000 39,421,000
------------ ----------- ------------
Total current assets 482,022,000 (21,633,600) 460,388,400
------------ ----------- ------------
PROPERTY, PLANT AND EQUIPMENT
at cost, less accumulated depreciation
and amortization 206,991,000 12,476,800 B 219,467,800
------------ ----------- ------------
OTHER ASSETS:
Costs in excess of fair value of net
assets of businesses acquired 62,067,000 32,487,800 C 94,554,800
Intangible and other assets 30,002,000 29,004,000 D 59,006,000
------------ ----------- ------------
92,069,000 61,491,800 153,560,800
------------ ----------- ------------
$781,082,000 $52,335,000 $833,417,000
============ =========== ============
Griffon Griffon
Corporation Pro Forma Corporation
& subsidiaries Adjustments Pro Forma
-------------- ----------- -----------
LIABILITIES AND
SHAREHOLDERS' EQUITY
- ----------------------
CURRENT LIABILITIES:
Accounts and notes payable $ 93,832,000 $ 93,832,000
Other current liabilities 104,982,000 $ 157,000 E 105,139,000
------------ ------------ -------------
Total current liabilities 198,814,000 157,000 198,971,000
LONG-TERM DEBT 144,815,000 60,000,000 A 204,815,000
OTHER LIABILITIES AND
DEFERRED CREDITS 50,282,000 18,289,000 E 68,571,000
------------ ------------ --------------
Total liabilities and deferred credits 393,911,000 78,446,000 472,357,000
MINORITY INTEREST 26,111,000 (26,111,000) F
SHAREHOLDERS' EQUITY 361,060,000 361,060,000
------------ ------------ --------------
$781,082,000 $52,335,000 $ 833,417,000
============ ============ ==============
Notes to Pro Forma Balance Sheet
A) Purchase price of $82 million, consisting of $22 million of existing cash
and proceeds from borrowings of $60 million.
B) Increase to asset values based upon preliminary appraisals.
C) Additional goodwill based on the excess of the purchase price over the
minority shareholder's interest in the estimated fair values of the net
assets acquired.
D) Reflects the estimated fair value of the customer relationship with the
specialty plastic film segment's major customer. This asset is estimated to
have an indefinite life.
E) Reflects deferred tax liabilities.
F) Elimination of Finotech minority interest.
Pro Forma Consolidated Income Statement
Nine Months ended June 30, 2005
Griffon Griffon
Corporation Pro Forma Corporation
& subsidiaries Adjustments Pro Forma
---------------- ----------- ---------
Net sales $1,013,551,000 $1,013,551,000
Cost of sales 756,347,000 $ 567,000 A 756,914,000
-------------- ------------ --------------
Gross profit 257,204,000 (567,000) 256,637,000
Selling, general and administrative expenses 213,761,000 213,761,000
-------------- ------------ -------------
Income from operations 43,443,000 (567,000) 42,876,000
-------------- ------------ --------------
Other income (expense):
Interest expense (5,768,000) (2,295,000) B (8,063,000)
Interest income 1,527,000 1,527,000
Other, net 4,385,000 (12,000) 4,373,000
-------------- ------------ --------------
144,000 (2,307,000) (2,163,000)
-------------- ------------ --------------
Income before income taxes 43,587,000 (2,874,000) 40,713,000
Provision for income taxes 12,982,000 (987,000) C 11,995,000
-------------- ------------ --------------
Income before minority interest 30,605,000 (1,887,000) 28,718,000
Minority interest (4,415,000) 4,415,000 D
-------------- ------------ --------------
Net income $ 26,190,000 $2,528,000 $ 28,718,000
============== ============ ==============
Basic earnings per share of common stock $ .88 $ .97
============== ==============
Diluted earnings per share of common stock $ .84 $ .92
============== ==============
Weighted average number of shares included
in the computation:
Basic 29,625,000 29,625,000
========== ==========
Diluted 31,251,000 31,251,000
========== ==========
Notes to Pro Forma Income Statement for the Nine Months ended June 30, 2005
A) Additional depreciation expense attributable to purchase price
allocation to property, plant and equipment, assuming approximately
16.5 years as the remaining weighted average useful life of the
depreciable assets.
B) Interest expense on additional $60 million of debt.
C) Tax effect of pro forma adjustments.
D) Elimination of Finotech minority interest.
Pro Forma Consolidated Income Statement
Fiscal Year ended September 30, 2004
Griffon Griffon
Corporation Pro Forma Corporation
& subsidiaries Adjustments Pro Forma
-------------- ----------- ---------
Net sales $1,393,809,000 $1,393,809,000
Cost of sales 992,648,000 $ 1,127,000 A 993,775,000
--------------- ------------ --------------
Gross profit 401,161,000 (1,127,000) 400,034,000
Selling, general and administrative expenses 289,979,000 289,979,000
--------------- ------------ --------------
Income from operations 111,182,000 (1,127,000) 110,055,000
--------------- ------------ --------------
Other income (expense):
Interest expense (8,066,000) (3,060,000) B (11,126,000)
Interest income 1,070,000 1,070,000
Other, net 563,000 (367,000) 196,000
--------------- ------------ --------------
(6,433,000) (3,427,000) (9,860,000)
--------------- ------------ --------------
Income before income taxes 104,749,000 (4,554,000) 100,195,000
Provision for income taxes 38,757,000 (1,549,000) C 37,208,000
--------------- ------------ --------------
Income before minority interest 65,992,000 (3,005,000) 62,987,000
Minority interest (12,133,000) 12,133,000 D
-------------- ------------ --------------
Net income $ 53,859,000 $ 9,128,000 $ 62,987,000
============== ============ ==============
Basic earnings per share of common stock $ 1.81 $ 2.12
============= ==============
Diluted earnings per share of common stock $ 1.71 $ 1.99
============= ==============
Weighted average number of shares included
in the computation:
Basic 29,762,000 29,762,000
========== ==========
Diluted 31,586,000 31,586,000
========== ==========
Notes to Pro Forma Income Statement for the Fiscal Year ended September 30, 2004
A) Charges inventory related purchase accounting adjustment to cost of
sales. Also reflects additional depreciation expense attributable to
purchase price allocation to property, plant and equipment, assuming
16.5 years as the remaining weighted average useful life of the
depreciable assets.
B) Interest expense on additional $60 million of debt.
C) Tax effect of pro forma adjustments.
D) Elimination of Finotech minority interest.