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What changed in GRIFFON CORP's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of GRIFFON CORP's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+318 added−368 removedSource: 10-K (2024-11-13) vs 10-K (2023-11-16)

Top changes in GRIFFON CORP's 2024 10-K

318 paragraphs added · 368 removed · 261 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

71 edited+11 added−35 removed57 unchanged
Biggest changeSmaller distribution centers are also strategically located in the U.S. in Ocala, Florida, and internationally in Canada, Australia, the United Kingdom and Ireland. 9 Discontinued Operation: DEFENSE ELECTRONICS On June 27, 2022, Griffon completed the sale of its Defense Electronics segment, which consisted of Griffon's Telephonics subsidiary, for $330,000, excluding certain customary post-closing adjustments.
Biggest changeDiscontinued Operation: DEFENSE ELECTRONICS On June 27, 2022, Griffon completed the sale of its Defense Electronics segment, which consisted of Griffon's Telephonics subsidiary, for $330,000, excluding certain customary post-closing adjustments. As such, the results of operations of our Telephonics business is classified as a discontinued operation in the Consolidated Statements of Operations for the year ended September 30, 2022.
Under the ClosetMaid brand, CPP is the leading provider of wood and wire closet organization, general living storage, and wire garage storage products in the United States. Under the Hunter brand, since 1886, CPP is a leading provider of residential, industrial and commercial fans in the United States.
Under the ClosetMaid brand, CPP is a leading provider of wood and wire closet organization, general living storage, and wire garage storage products in the United States. Under the Hunter brand, since 1886, CPP is a leading provider of residential, industrial and commercial fans in the United States.
The following is a brief description of CPP's primary product lines: • Seasonal Outdoor Tools • Long-Handled Tools: An extensive line of engineered tools including shovels, spades, scoops, rakes, hoes, cultivators, weeders, post hole diggers, scrapers, edgers and forks, marketed under leading brand names including AMES®, True Temper®, UnionTools®, Garant®, Cyclone® and Kelso™, as well as contractor-oriented brands including Razor-Back® Jackson® and Darby™. • Wheelbarrows: AMES designs, develops and manufactures a full line of wheelbarrows and lawn carts, primarily under the AMES®, True Temper®, Jackson® Professional Tools, UnionTools®, Garant® and Westmix™ brand names.
The following is a brief description of CPP's primary product lines: • Seasonal Outdoor Tools • Long-Handled Tools: An extensive line of engineered tools including shovels, spades, scoops, rakes, hoes, cultivators, weeders, post hole diggers, scrapers, edgers and forks, marketed under leading brand names including AMES®, True Temper®, UnionTools®, Garant®, Cyclone® and Kelso™, as well as contractor-oriented brands including Razor-Back® Jackson® and Darby™. • Wheelbarrows: AMES designs, and develops a full line of wheelbarrows and lawn carts, primarily under the AMES®, True Temper®, Jackson® Professional Tools, UnionTools®, Garant® and Westmix™ brand names.
The snow tool line includes shovels, pushers, roof rakes, sled sleigh shovels, scoops and ice scrapers. • Pruning: The pruning line is made up of pruners, loppers, shears, and other tools sold primarily under the True Temper®, Cyclone® and Garant® brand names. • Project Tools • Striking Tools: Axes, picks, mattocks, mauls, wood splitters, sledgehammers, pry bars and repair handles make up the striking tools product line.
The snow tool line includes shovels, pushers, roof rakes, sled sleigh shovels, scoops and ice scrapers. • Pruning: The pruning line is made up of pruners, loppers, shears, and other tools sold primarily under the AMES®, True Temper®, Cyclone® and Garant® brand names. • Project Tools • Striking Tools: Axes, picks, mattocks, mauls, wood splitters, sledgehammers, pry bars and repair handles make up the striking tools product line.
Principal global and regional trademarks used by CPP for its tool and landscape products include AMES®, True Temper®, Garant®, Harper®, UnionTools®, Westmix™, Cyclone®, Southern Patio®, Northcote Pottery™, Nylex®, Hills®, Kelkay®, Tuscan Path®, La Hacienda®, Kelso™, Apta®, and Dynamic Design®, as well as contractor-oriented brands including Razor-Back® Professional Tools and Jackson® Professional Tools.
Principal global and regional trademarks used by CPP for its tool and landscape products include AMES®, True Temper®, Garant®, Harper®, UnionTools®, Westmix™, Cyclone®, Southern Patio®, Northcote Pottery™, Nylex®, Hills®, Kelkay®, Tuscan Path®, Pope®, La Hacienda®, Kelso™, Apta®, and Dynamic Design®, as well as contractor-oriented brands including Razor-Back® Professional Tools and Jackson® Professional Tools.
Its brand portfolio for long-handled tools, outdoor décor, and landscaping product includes AMES®, True Temper®, Garant®, Harper®, UnionTools®, Westmix™, Cyclone®, Southern Patio®, Northcote Pottery™, Nylex®, Hills®, Kelkay®, Tuscan Path®, La Hacienda®, Kelso™, Dynamic Design®™, Apta® and Quatro Design®. Contractor-oriented tool brands include Razor-Back® Professional Tools and Jackson® Professional Tools.
Its brand portfolio for long-handled tools, outdoor décor, and landscaping product includes AMES®, True Temper®, Garant®, Harper®, UnionTools®, Westmix™, Cyclone®, Southern Patio®, Northcote Pottery™, Nylex®, Hills®, Kelkay®, Tuscan Path®, La Hacienda®, Kelso™, Dynamic Design®™, Apta®, Quatro Design® and Pope®. Contractor-oriented tool brands include Razor-Back® Professional Tools and Jackson® Professional Tools.
Principal North American manufacturing and distribution facilities include a 676,000 square foot facility in Ocala, Florida, and a 353,000 square foot manufacturing center in St. Francois, Quebec, Canada. CPP operates smaller manufacturing facilities, including wood mills, at several other locations in the United States, and internationally in Jiangmen, China, and Grafton, New South Wales and Wonthaggi, Victoria, both in Australia.
Principal North American manufacturing facilities include a 676,000 square foot facility in Ocala, Florida, and a 353,000 square foot center in St. Francois, Quebec, Canada. CPP operates smaller manufacturing facilities, including wood mills, at several other locations in the United States, and internationally in Jiangmen, China, and Grafton, New South Wales and Wonthaggi, Victoria, both in Australia.
Clopay commercial rolling steel door brands include Cornell®, Cookson® and Clopay®. Products and Service Clopay manufactures a broad line of residential sectional garage doors with a variety of options, at varying prices. Clopay offers garage doors made primarily from steel, plastic composite and wood, and also sells related products, such as garage door openers manufactured by third parties.
Clopay commercial rolling steel door brands include Cornell®, Cookson® and Clopay®. Products and Service Clopay manufactures a broad line of residential sectional garage doors with a variety of options, at varying prices. Clopay offers garage doors made primarily from steel, aluminum, plastic composite and wood, and also sells related products, such as garage door openers manufactured by third parties.
Products CPP manufactures and markets a broad portfolio of long-handled tools, landscaping products, home organization products and residential, industrial and commercial fans. This portfolio contains many iconic brands and is anchored by six core product categories: seasonal outdoor tools, project tools, outdoor décor and watering, home organization, fans and cleaning products.
Products CPP markets a broad portfolio of long-handled tools, landscaping products, home organization products and residential, industrial and commercial fans. This portfolio contains many iconic brands and is anchored by six core product categories: seasonal outdoor tools, project tools, outdoor décor and watering, home organization, fans and cleaning products.
The range of planter sizes (from 6 to 32 inches) is available in various designs, colors and materials. • Garden Hose and Storage: AMES offers a wide range of manufactured and sourced garden hoses and hose reels under the AMES®, NeverLeak® and Nylex® brand names. • Home Organization : AMES designs, manufactures and sells a comprehensive portfolio of wire and wood shelving, containers, storage cabinets and other closet and home organization accessories primarily under the highly recognized ClosetMaid® brand name.
The range of planter sizes (from 6 to 32 inches) is available in various designs, colors and materials. • Garden Hose and Storage: AMES offers a wide range of garden hoses and hose reels under the AMES®, NeverLeak® and Nylex® brand names. • Home Organization : AMES designs, manufactures and sells a comprehensive portfolio of wire and wood shelving, containers, storage cabinets and other closet and home organization accessories primarily under the highly recognized ClosetMaid® brand name.
("Walmart"), Target Corporation ("Target"), Canadian Tire Corporation, Limited ("Canadian Tire"), Costco Wholesale Corporation ("Costco"), Ace, Do-It-Best and True Value Company; (3) industrial distributors, such as W.W. Grainger, Inc. and ORS Nasco; (4) homebuilders, such as D.R. Horton, KB Home, Lennar and NVR, Inc.; and (5) E-commerce platforms, such as Amazon Inc. (“Amazon”), Wayfair Inc., (“Wayfair), Hayneedle Inc., “(Hayneedle”), Overstock Inc.
("Walmart"), Target Corporation ("Target"), Canadian Tire Corporation, Limited ("Canadian Tire"), Costco Wholesale Corporation ("Costco"), Ace, Do-It-Best and True Value Company; (3) industrial distributors, such as W.W. Grainger, Inc. and ORS Nasco; (4) homebuilders, such as D.R. Horton, KB Home, Lennar and NVR, Inc.; and (5) E-commerce platforms, such as Amazon Inc. (“Amazon”), Wayfair Inc., (“Wayfair), Hayneedle Inc., “(Hayneedle”), Beyond, Inc.
Clopay continually improves its door offerings through these development efforts, focusing on characteristics such as strength, design, operating performance and durability, and energy efficiency.
Clopay continually improves its door offerings through these development efforts, focusing on characteristics such as strength, design, performance, durability, and energy efficiency.
The process engineering teams also work to develop new manufacturing processes and production techniques aimed at improving manufacturing efficiencies and ensuring quality-made products. 5 Sales and Marketing The Clopay sales and marketing organization supports our customers, consults on new product development and aggressively markets door solutions, with a primary focus on the North American market.
The process engineering teams also work to develop new manufacturing processes and production techniques aimed at improving manufacturing efficiencies and ensuring quality-made products. 4 Sales and Marketing The Clopay sales and marketing organization supports our customers, consults on new product development and aggressively markets door solutions, with a primary focus on the North American market.
Clopay is currently the exclusive supplier of residential and commercial garage doors to Home Depot and Menards locations throughout North America, and has relationships with each of more than 25 years. The loss of either of these customers would have a material adverse effect on Clopay and Griffon.
Clopay is currently the exclusive supplier of residential and commercial garage doors to Home Depot and Menards locations throughout North America, and has had relationships with each for more than 25 years. The loss of either of these customers would have a material adverse effect on Clopay and Griffon.
Clopay's market position, brand recognition, and proprietary software applications and systems are key marketing tools for expanding its customer base. Manufacturing and Distribution Clopay's principal manufacturing facilities include 1,487,000 square feet in Troy and Russia, Ohio, 279,000 square feet in Mountain Top, Pennsylvania and 163,000 square feet in Goodyear, Arizona.
Clopay's market position, brand recognition, and proprietary software applications and systems are key marketing tools for expanding its customer base. Manufacturing and Distribution Clopay's principal manufacturing facilities include 1,582,000 square feet in Troy and Russia, Ohio, 279,000 square feet in Mountain Top, Pennsylvania and 163,000 square feet in Goodyear, Arizona.
Clopay distributes its garage doors directly to customers from its manufacturing facilities and through its distribution centers located throughout the U.S. and Canada. These distribution centers allow Clopay to maintain an inventory of garage doors near installing dealers and provide quick-ship service to retail and professional dealer customers.
Clopay distributes its garage doors directly to customers from its manufacturing facilities and through its network of 56 distribution centers located throughout the U.S. and Canada. These distribution centers allow Clopay to maintain an inventory of garage doors near installing dealers and provide quick-ship service to retail and professional dealer customers.
Today, AMES is a leading manufacturer of long-handled tools and landscaping products for homeowners and professionals in North America, and also provides these products in key global markets including Canada, Australia, New Zealand, the U.K., and Ireland.
Today, AMES is a leading provider of long-handled tools and landscaping products for homeowners and professionals in North America, and also provides these products in key global markets including Canada, Australia, New Zealand, the U.K., and Ireland.
CPP sells products globally through a portfolio of leading brands including AMES, since 1774, Hunter, since 1886, True Temper, and ClosetMaid. 4 Reportable Segments: HOME AND BUILDING PRODUCTS The HBP segment consists of Clopay.
CPP sells products globally through a portfolio of leading brands including AMES, since 1774, Hunter, since 1886, True Temper, and ClosetMaid. 3 Reportable Segments: HOME AND BUILDING PRODUCTS The HBP segment consists of Clopay.
In addition, gardening hand tools, such as trowels, cultivators, weeders and other specialty garden hand tools, are marketed under the AMES® brand name. 7 • Outdoor Décor and Watering • Planters and Lawn Accessories: AMES is a designer, manufacturer and distributor of indoor and outdoor planters and accessories, sold under the Southern Patio®, Northcote Pottery™, Tuscan Path, La Hacienda®, Hills®, Kelkay®, Quatro Design® and Dynamic Design®™ brand names, as well as various private label brands.
In addition, gardening hand tools, such as trowels, cultivators, weeders and other specialty garden hand tools, are marketed under the AMES® brand name. 6 • Outdoor Décor and Watering • Planters and Lawn Accessories: AMES is a designer and distributor of indoor and outdoor planters and accessories, sold under the Southern Patio®, Northcote Pottery™, Tuscan Path, La Hacienda®, Hills®, Kelkay®, Quatro Design®, Pope® and Dynamic Design®™ brand names, as well as various private label brands.
Clopay also utilizes certain hardware components, as well as wood and insulated foam. All raw materials are generally available from a number of sources. Competition The sectional garage door and commercial rolling steel door industry includes several large national manufacturers and many smaller, regional and local manufacturers.
Clopay also utilizes certain hardware and plastic components, as well as aluminum and insulated foam. All raw materials are generally available from a number of sources. Competition The sectional garage door and commercial rolling steel door industry includes several large national manufacturers and many smaller, regional and local manufacturers.
(“Overstock”), and Spreetail LLC. (“Spreetail”). Home Depot, Lowe's, Menards and Bunnings are significant customers of CPP. The loss of any of these customers would have a material adverse effect on the CPP business and on Griffon. Product Development CPP product development efforts focus on both new products and product line extensions.
("Beyond"), and Spreetail LLC. (“Spreetail”). Home Depot, Lowe's and Bunnings are significant customers of CPP. The loss of any of these customers would have a material adverse effect on the CPP business and on Griffon. Product Development CPP product development efforts focus on both new products and product line extensions.
Design patents are generally valid for fourteen years, and utility patents are generally valid for twenty years, from the date of filing. Griffon's patents are in various stages of their terms of validity. 11 Environmental, Social and Governance Griffon and its operating companies have always taken into account environmental, social and governance (ESG) considerations in the management of our businesses.
Design patents are generally valid for fourteen years, and utility patents are generally valid for twenty years, from the date of filing. Griffon's patents are in various stages of their terms of validity. Sustainable Business Practices Griffon and its operating companies have always taken into account environmental, social and governance (ESG) considerations in the management of our businesses.
Sales into the commercial market are driven by commercial construction and repair and replacement, including the aging of nonresidential buildings, warehouses and institutional and industrial facilities, as well as increased business activity, changes to building codes , security of facilities, and trends of improving function and performance. Clopay has approximately 2,900 employees.
Sales into the commercial market are driven by commercial construction and repair and replacement, including the aging of nonresidential buildings, warehouses, and institutional and industrial facilities, as well as increased business activity, changes to building codes , security of facilities, and trends of improving function and performance. Clopay has approximately 3,000 employees.
HBP’s business is driven by renovation and construction during warm weather, which is historically at reduced levels during the winter months, generally in our second quarter. In 2023, 54% of CPP's' sales occurred during the second and third quarters compared to 58% in 2022 and 53% in 2021.
HBP’s business is driven by renovation and construction during warm weather, which is historically at reduced levels during the winter months, generally in our second quarter. In 2024, 52% of CPP's' sales occurred during the second and third quarters compared to 54% in 2023 and 58% in 2022.
Griffon believes that it is in material compliance with these laws and regulations. Historically, compliance with environmental, health, and employee safety laws and regulations have not materially affected, and are not expected to materially affect, Griffon’s capital expenditures, earnings or competitive position.
Regulation Griffon’s operations are subject to various environmental, health, and employee safety laws and regulations. Griffon believes that it is in material compliance with these laws and regulations. Historically, compliance with environmental, health, and employee safety laws and regulations have not materially affected, and are not expected to materially affect, Griffon’s capital expenditures, earnings or competitive position.
The HBP and CPP businesses have approximately 1,647 registered trademarks and approximately 139 pending trademark applications around the world. Griffon’s rights in these trademarks endure for as long as they are used and registered. Patents are also important to the HBP and CPP businesses.
The HBP and CPP businesses have approximately 1,596 registered trademarks and approximately 140 pending trademark applications around the world. Griffon’s rights in these trademarks endure for as long as they are used and registered. Patents are also important to the HBP and CPP businesses.
CPP has approximately 2,800 employees worldwide. 6 Brands CPP's brands are among the most recognized across its primary product categories in North America, Australia and the United Kingdom.
CPP has approximately 2,300 employees worldwide. 5 Brands CPP's brands are among the most recognized across its primary product categories in North America, Australia and the United Kingdom.
In 2023, Home Depot represented 12% of Griffon’s consolidated revenue, 9% of HBP's revenue and 15% of CPP's revenue. No other customer accounted for 10% or more of consolidated revenue. Future operating results will continue to substantially depend on the success of Griffon’s largest customers and Griffon's relationships with them.
In 2024, Home Depot represented 11% of Griffon’s consolidated revenue, 8% of HBP's revenue and 15% of CPP's revenue. No other customer accounted for 10% or more of consolidated revenue. Future operating results will continue to substantially depend on the success of Griffon’s largest customers and Griffon's relationships with them.
Clopay distributes its products through a wide range of distribution channels, including a national network of 54 distribution centers with a total of approximately 1,100,000 square feet.
Clopay distributes its products through a wide range of distribution channels, including a national network of 56 distribution centers with a total of approximately 1,200,000 square feet.
HBP holds approximately 45 issued patents and 24 pending patent applications in the U.S., as well as approximately 20 and 98 corresponding foreign patents and patent applications, primarily related to garage door system components and operation.
HBP holds approximately 56 issued patents and 24 pending patent applications in the U.S., as well as approximately 18 and 108 corresponding foreign patents and patent applications, primarily related to garage door system components and operation.
Accordingly, all references made to results and information in this Annual Report on Form 10-K are to Griffon's continuing operations, unless noted otherwise. Griffon Corporation Employees As of September 30, 2023, Griffon and its subsidiaries employ approximately 5,700 employees located primarily throughout the U.S., Canada, the United Kingdom, Australia, and China.
Accordingly, all references made to results and information in this Annual Report on Form 10-K are to Griffon's continuing operations, unless noted otherwise. 8 Griffon Corporation Employees As of September 30, 2024, Griffon and its subsidiaries employ approximately 5,300 employees located primarily throughout North America, the United Kingdom, Australia, and China.
We are involved in more than 100 charitable and community organizations, including well known national concerns such as Habitat for Humanity, Boys and Girls Clubs, the Home Depot Foundation (Diamond Sponsor) and the American Cancer Society, as well as local groups such as garden clubs.
We are involved in more than 100 charitable and community organizations, including well known national concerns such as Habitat for Humanity, Boys and Girls Clubs, the Home Depot Foundation (Diamond Sponsor), the Lowe's Foundation, and the American Cancer Society, as well as local groups such as garden clubs. Our communities know they can count on our support.
("CornellCookson") in 2018, which has been integrated into Clopay Corporation ("Clopay"), creating a leading North American manufacturer and marketer of residential garage doors and sectional commercial doors, and rolling steel doors and grille products, under brands that include Clopay, Ideal, Cornell and Cookson.
("CornellCookson") in 2018, which has established us as a leading North American manufacturer and marketer of residential garage doors and sectional commercial doors, and rolling steel doors and grille products, under brands that include Clopay, Ideal, Cornell and Cookson.
From July 2009 to July 2015, Griffon's Chief Accounting Officer. From May 2005 to June 2009, Assistant Controller of Dover Corporation, a diversified global manufacturer (NYSE:DOV). Prior to this time, held various finance and accounting roles with Hearst Argyle Television (Formerly NYSE:HTV), John Wiley and Sons, Inc. (NYSE:WLY) and Arthur Andersen, LLP. Seth L.
From November 2012 to July 2015, Vice President and Controller of Griffon. From July 2009 to July 2015, Griffon's Chief Accounting Officer. From May 2005 to June 2009, Assistant Controller of Dover Corporation, a diversified global manufacturer (NYSE:DOV). Prior to this time, held various finance and accounting roles with Hearst Argyle Television (Formerly NYSE:HTV), John Wiley and Sons, Inc.
AMES is a member of the Appalachian Hardwood Manufacturers Association, which provides sustainable hardwoods for AMES tools, and is committed to purchasing hardwoods through the Sustainable Forestry Initiative. Our operating companies are involved in the local communities in which they operate.
Approximately seventy percent of the steel used in HBP's garage doors is recycled steel. AMES is a member of the Appalachian Hardwood Manufacturers Association, which provides sustainable hardwoods for AMES tools, and is committed to purchasing hardwoods through the Sustainable Forestry Initiative. Our operating companies are involved in the local communities in which they operate.
Kaplan 54 Senior Vice President, General Counsel and Secretary since May 2010. From July 2008 to May 2010, Assistant General Counsel and Assistant Secretary at Hexcel Corporation (NYSE:HXL), a manufacturer of advanced composite materials for space and defense, commercial aerospace and wind energy applications. From 2000 to July 2008, Senior Corporate Counsel and Assistant Secretary at Hexcel.
(NYSE:WLY) and Arthur Andersen, LLP. Seth L. Kaplan 55 Senior Vice President, General Counsel and Secretary since May 2010. From July 2008 to May 2010, Assistant General Counsel and Assistant Secretary at Hexcel Corporation (NYSE:HXL), a manufacturer of advanced composite materials for space and defense, commercial aerospace and wind energy applications.
CPP protects its designs and product innovation through the use of patents, and currently has approximately 674 issued patents and approximately 247 pending patent applications in the U.S., as well as approximately 275 and 97 corresponding foreign patents and patent applications, respectively.
CPP protects its designs and product innovation through the use of patents, and currently has approximately 782 issued patents and approximately 245 pending patent applications in the U.S., as well as approximately 346 and 82 corresponding foreign patents and patent applications, respectively.
Suncast Corporation competes in the hose reel and accessory market, and in the long-handled plastic snow shovel category. In addition, there is competition from imported or sourced products from China, India and other low-cost producing countries, particularly in long-handled tools, wheelbarrows, planters, striking tools and pruning tools. The home storage and organizational solutions industry is also highly fragmented.
In addition, there is competition from imported or sourced products from China, India and other low-cost producing countries, particularly in long-handled tools, wheelbarrows, planters, striking tools and pruning tools. The home storage and organizational solutions industry is also highly fragmented.
From May 2006 to August 2008, Executive Vice President and Chief Operating Officer of DRS and from January 2001 to May 2006, Executive Vice President, Business Operations and Strategy, of DRS. Brian G. Harris 54 Senior Vice President and Chief Financial Officer since August 2015. From November 2012 to July 2015, Vice President and Controller of Griffon.
From May 2006 to August 2008, Executive Vice President and Chief Operating Officer of DRS and from January 2001 to May 2006, Executive Vice President, Business Operations and Strategy, of DRS. Brian G. Harris 55 Executive Vice President and Chief Financial Officer since November 13, 2024. Senior Vice President and Chief Financial Officer from August 2015 to November 12, 2024.
In addition, lack of snow or lower than average snowfall during the winter season may result in reduced sales of certain AMES' products, such as snow shovels and other snow tools. As a result, AMES' results of operations, financial results and cash flows could be adversely impacted.
In addition, lack of snow or lower than average snowfall during the winter season may result in reduced sales of certain AMES' products, such as snow shovels and other snow tools.
Griffon is a subscriber to the United Nations Global Compact (UNGC) and published its inaugural annual ESG report, in relation to fiscal 2021, benchmarked to both UNGC Sustainable Development Goals and to the Sustainability Accounting Standards Board criteria. The Griffon ESG policy and fiscal 2021 ESG Report can be found on the Griffon website at www.griffon.com.
Griffon is a subscriber to the United Nations Global Compact (UNGC) and published its inaugural annual ESG report in August 2022, in relation to fiscal 2021, benchmarked to both United Nations Global Compact (UNGC) Sustainable Development Goals and to the Sustainability Accounting Standards Board (SASB) criteria.
From August 2008 to October 2012, President and Chief Operating Officer of DRS Technologies (Formerly NYSE:DRS) ("DRS"), a supplier of integrated products, services and support to military forces, intelligence agencies and prime contractors worldwide.
Robert F. Mehmel 62 President and Chief Operating Officer since December 2012, director from May 2018 to March 2022. From August 2008 to October 2012, President and Chief Operating Officer of DRS Technologies (Formerly NYSE:DRS) ("DRS"), a supplier of integrated products, services and support to military forces, intelligence agencies and prime contractors worldwide.
We expect to file our fiscal 2022 ESG report before the end of calendar 2023. The fiscal 2021 ESG Report discusses employee safety, employee education and welfare, energy consumption, water consumption, waste generation, recycled raw materials, and packaging initiatives, as well as community involvement and charitable giving.
We expect to file our calendar year 2023 Sustainability report before the end of calendar 2024. The annual Sustainability reports discuss employee safety, employee education and welfare, carbon emissions, air emissions, energy consumption, water consumption, waste generation, recycled raw materials, and packaging initiatives, as well as community involvement and charitable giving.
Over the past five years, we have undertaken a series of transformative transactions. We divested our specialty plastics business in 2018 to focus on our core markets and improve our free cash flow conversion. In our Home and Building Products ("HBP") segment, we acquired CornellCookson, Inc.
Since 2017, we have undertaken a series of transformative transactions to strengthen our core business and increase shareholder value. We divested our specialty plastics business in 2018 and our defense electronics (Telephonics) business in 2022 to focus on our core markets and improve our free cash flow conversion. In our Home and Building Products ("HBP") segment, we acquired CornellCookson, Inc.
From 1994 to 2000, associate at the law firm Winthrop, Stimson, Putnam & Roberts (now Pillsbury Winthrop Shaw Pittman LLP).
From 2000 to July 2008, Senior Corporate Counsel and Assistant Secretary at Hexcel. From 1994 to 2000, associate at the law firm Winthrop, Stimson, Putnam & Roberts (now Pillsbury Winthrop Shaw Pittman LLP).
In addition, in connection with the announcement of an expansion of CPP's global sourcing strategy, we adopted a Supplier Code of Conduct (SCC) that essentially binds our suppliers to the same ESG goals and criteria to which Griffon adheres.
In addition, in 2023, in connection with the announcement of an expansion of CPP's global sourcing strategy, in 2023 we adopted a Supplier Code of Conduct (SCC) that essentially binds our suppliers to the same ESG goals and criteria to which Griffon adheres. 10 Griffon has assessed the environmental risk from its operations and focused its efforts to date on areas with the potential to have the greatest environmental impact.
R&D costs, not recoverable under contractual arrangements, are charged to expense as incurred. Intellectual Property Griffon follows a practice of actively protecting and enforcing its proprietary rights in the U.S. and throughout the world where Griffon’s products are sold. All intellectual property information presented in this section is as of September 30, 2023.
Intellectual Property Griffon follows a practice of actively protecting and enforcing its proprietary rights in the U.S. and throughout the world where Griffon’s products are sold. All intellectual property information presented in this section is as of September 30, 2024. Trademarks are of significant importance to Griffon’s HBP and CPP businesses.
Griffon has appointed a lead independent director and has four principal board committees - Audit, Compensation, Nominating and Corporate Governance, and Finance - each of which has its responsibilities set forth in a charter available on the Griffon website. 12 We expect each of our employees and suppliers around the world to work hard to deliver outstanding products to our customers and to deliver value to our shareholders.
Griffon has appointed a lead independent director and has four principal board committees - Audit, Compensation, Nominating and Corporate Governance, and Finance - each of which has its responsibilities set forth in a charter available on the Griffon website.
CPP has made significant investments in automation, facilities expansion and fulfillment operations to support e-commerce growth. 8 Raw Materials and Suppliers CPP's primary raw material inputs include resin (primarily polypropylene and high density polyethylene), wood (particleboard and hardwoods including ash, hickory and poplar logs) and steel (hot rolled, cold rolled, and wire rod).
CPP has made significant investments in automation, facilities expansion and fulfillment operations to support e-commerce growth. 7 Raw Materials and Suppliers CPP's primary raw material inputs include resin (primarily polypropylene and high-density polyethylene), hickory wood and steel (wire rod). All raw materials are generally available from a number of sources.
In our Consumer and Professional Products ("CPP") segment, we expanded the scope of our brands through the acquisition of Hunter Fan Company ("Hunter") in January 2022 and ClosetMaid, LLC ("ClosetMaid") in 2018. We established an integrated headquarters for CPP in Orlando, Florida for our portfolio of leading brands that includes AMES, Hunter, True Temper and ClosetMaid.
In our Consumer and Professional Products ("CPP") segment, we expanded the scope of our brands through the acquisition of Hunter Fan Company ("Hunter") in January 2022 and ClosetMaid, LLC ("ClosetMaid") in 2018.
CPP has three principal distribution facilities in the United States, a 1.4 million square foot facility in Carlisle, Pennsylvania a 997,000 square foot facility in Reno, Nevada and a 600,000 square foot facility in Byhalia, MS.
CPP has three principal distribution facilities in the United States: a 1.4 million square foot facility in Carlisle, Pennsylvania; a 997,000 square foot facility in Reno, Nevada; and a 600,000 square foot facility in Byhalia, MS. Finished goods are transported to these facilities by both an internal fleet, as well as over the road trucking and rail.
Griffon’s non-U.S. businesses are primarily in Canada, Australia, the U.K., Ireland and China. Research and Development Griffon’s businesses are encouraged to improve existing products as well as develop new products to satisfy customer needs; expand revenue opportunities; maintain or extend competitive advantages; increase market share and reduce production costs.
Research and Development Griffon’s businesses are encouraged to improve existing products as well as develop new products to satisfy customer needs; expand revenue opportunities; maintain or extend competitive advantages; increase market share and reduce production costs. R&D costs, not recoverable under contractual arrangements, are charged to expense as incurred.
And, while doing so, we expect them to respect and adhere to our environmental, social and governance commitments and policies, and to make our company a place where all employees are proud to come to work every day.
And, while doing so, we expect them to respect and adhere to our environmental, social and governance commitments and policies, and to make our company a place where all employees are proud to come to work every day. 11 Executive Officers of the Registrant The following is a current list of Griffon’s executive officers: Name Age Positions Held and Prior Business Experience Ronald J.
The loss of all or a portion of volume from any one of these customers could have a material adverse impact on Griffon’s financial results, liquidity and operations. 10 Seasonality Griffon's revenue and earnings are generally lowest in our first and fourth quarters ending December 31, and September 30, respectively, and highest in the second and third quarters ending March 31, and June 30, respectively, primarily due to the seasonality within the HBP and CPP businesses.
Seasonality Griffon's revenue and earnings are generally lowest in our first and fourth quarters ending December 31, and September 30, respectively, and highest in the second and third quarters ending March 31, and June 30, respectively, primarily due to the seasonality within the HBP and CPP businesses.
These improvements include lighting energy efficiency projects saving in excess of 1.5 million kilowatt-hours annually, major upgrades to our loading and unloading operations (which had been the source of a significant portion of our worker injuries), ergonomic improvements, machine guarding and elimination of certain high-risk repetitive jobs through the use of robotics.
Over the last five years, we have invested millions of dollars in capital improvements relating to employee safety and health. These improvements include major upgrades to our loading and unloading operations (which had been the source of a significant portion of our worker injuries), ergonomic improvements, machine guarding and elimination of certain high-risk repetitive jobs through the use of robotics.
CPP Global Sourcing Strategy Expansion and Restructuring Charges On May 3, 2023, in response to changing market conditions, Griffon announced that its CPP segment will expand its global sourcing strategy to include long handled tools, material handling, and wood storage and organization product lines for the U.S. market.
Hunter, which is part of Griffon's Consumer and Professional Products segment, complements and diversifies our portfolio of leading consumer brands and products. 2 CPP Global Sourcing Strategy Expansion and Restructuring Charges Griffon announced in May 2023 that CPP was expanding its global sourcing strategy to include long handled tools, material handling, and wood storage and organization product lines for the U.S. market.
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.
Griffon oversees the operations of its subsidiaries, allocates resources among them and manages their capital structures. Griffon provides direction and assistance to its subsidiaries with acquisition and growth opportunities as well as divestitures. As long-term investors, we intend to continue to grow and strengthen our existing businesses, and to diversify further through investments in our businesses and acquisitions.
All applicants and employees are treated with the same high level of respect regardless of their gender, ethnicity, religion, national origin, age, marital status, political affiliation, sexual orientation, gender identity, disability or protected veteran status. Regulation Griffon’s operations are subject to various environmental, health, and employee safety laws and regulations.
This applies to all terms and conditions of employment, including recruiting, hiring, placement, promotion, termination, layoff, recall, transfer, leaves of absence, compensation and training. All applicants and employees are treated with the same high level of respect regardless of their gender, ethnicity, religion, national origin, age, marital status, political affiliation, sexual orientation, gender identity, disability or protected veteran status.
By transitioning these product lines to an asset-light structure, CPP’s operations will be better positioned to serve customers with a more flexible and cost-effective sourcing model that leverages supplier relationships around the world, while improving its competitive positioning in a post-pandemic marketplace.
The adoption of an asset-light business model for these U.S. products has positioned CPP to better serve customers with a more flexible and cost-effective sourcing model that leverages supplier relationships around the world, and improved its competitive positioning.
Implementation of this strategy over the duration of the project will result in charges of $120,000 to $130,000, including $50,000 to $55,000 of cash charges for employee retention and severance, operational transition, and facility and lease exit costs, and $70,000 to $75,000 of non-cash charges primarily related to asset write-downs.
Implementation of this strategy over the duration of the project resulted in charges of $133,777, which included $51,082 of cash charges for employee retention and severance, operational transition, and facility and lease exit costs, and $82,695 of non-cash charges primarily related to asset write-downs. In addition, there were $2,678 of capital investments to effectuate the project.
These actions will be essential to CPP achieving 15% EBITDA margins, while enhancing free cash flow through improved working capital and significantly lower capital expenditures. The global sourcing strategy expansion is expected to be complete by the end of calendar 2024.
These actions will be essential for CPP to achieve its target of 15% EBITDA margin while enhancing free cash flow through improved working capital and significantly reduced capital expenditures.
Competition The long-handled tools and landscaping product industry is highly competitive and fragmented. Most competitors consist of small, privately-held companies focusing on a single product category. Some competitors, such as Fiskars Corporation in the hand tool and pruning tool market and Truper Herramientas S.A. de C.V. in the long-handled and garden tool space, compete in various tool categories.
Some competitors, such as Fiskars Corporation in the hand tool and pruning tool market and Truper Herramientas S.A. de C.V. in the long-handled and garden tool space, compete in various tool categories. Suncast Corporation competes in the hose reel and accessory market, and in the long-handled plastic snow shovel category.
In managing its human capital resources, Griffon aims to attract a qualified workforce through an inclusive and accessible recruiting process that utilizes online recruiting platforms, campus outreach, internships and job fairs. Griffon also seeks to retain employees by offering competitive wages, benefits and training opportunities, as well as promoting a safe and healthy workplace.
As of September 30, 2024, approximately 158 employees in Canada are represented by the Trade Union Advisory Committee. Griffon believes its relationships with its employees are satisfactory. In managing its human capital resources, Griffon aims to attract a qualified workforce through an inclusive and accessible recruiting process that utilizes online recruiting platforms, campus outreach, internships and job fairs.
Financial Information About Geographic Areas Segment and operating results are included in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations. For geographic financial information, see the Reportable Segment footnote in the Notes to Consolidated Financial Statements in Item 8, Financial Statements and Supplementary Data.
As a result, AMES' results of operations, financial results and cash flows could be adversely impacted. 9 Financial Information About Geographic Areas Segment and operating results are included in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations.
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.
Business Strategy Our strategic objective is to maintain leading positions in the markets we serve by providing innovative, branded products with superior quality and industry-leading service. We place emphasis on our iconic and well-respected brands, which helps to differentiate us and our offerings from our competitors and strengthens our relationship with our customers and those who ultimately use our products.
From 2002 through March 2008, President and a Director of Wynn Resorts, Ltd. (Nasdaq:WYNN), a developer, owner and operator of destination casino resorts. From 1999 to 2001, Managing Director at Dresdner Kleinwort Wasserstein, an investment banking firm, and its predecessor Wasserstein Perella & Co. Member of the board of directors of Douglas Elliman Inc.
From 1999 to 2001, Managing Director at Dresdner Kleinwort Wasserstein, an investment banking firm, and its predecessor Wasserstein Perella & Co. Member of the board of directors of Entain plc (LSE:ENT), Franklin BSP Capital Corporation and Franklin BSP Private Credit Fund. Former member of the board of directors of Douglas Elliman Inc. (NYSE: DOUG), from December 2021 to July 2024.
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.
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 and all of its businesses strictly comply with all applicable state, local and international laws governing nondiscrimination in employment in every location in which Griffon and its businesses have facilities. This applies to all terms and conditions of employment, including recruiting, hiring, placement, promotion, termination, layoff, recall, transfer, leaves of absence, compensation and training.
Griffon also seeks to retain employees by offering competitive wages, benefits and training opportunities, as well as promoting a safe and healthy workplace. Griffon and all of its businesses strictly comply with all applicable state, local and international laws governing nondiscrimination in employment in every location in which Griffon and its businesses have facilities.
For example, bags used to pack AMES’ Kelkay aggregate products in the UK are made from plant-based materials, and not from petroleum. Seventy percent of the steel used in HBP's garage doors is recycled steel.
Where available, we use recycled materials to construct our products, and we continuously improve our packaging to reduce both volume and environmental impact. For example, bags used to pack AMES’ Kelkay aggregate products in the UK are made from plant-based materials, and not from petroleum. The AMES Companies use a box-on-demand system that reduces packaging size.
Executive Officers of the Registrant The following is a current list of Griffon’s executive officers: Name Age Positions Held and Prior Business Experience Ronald J. Kramer 65 Chief Executive Officer since April 2008, Chairman of the Board since January 2018, Director since 1993, Vice Chairman of the Board from November 2003 to January 2018.
Kramer 66 Chief Executive Officer since April 2008, Chairman of the Board since January 2018, Director since 1993, Vice Chairman of the Board from November 2003 to January 2018. From 2002 through March 2008, President and a Director of Wynn Resorts, Ltd. (Nasdaq:WYNN), a developer, owner and operator of destination casino resorts.
Orders from these customers are subject to change and may fluctuate materially.
Orders from these customers are subject to change and may fluctuate materially. The loss of all or a portion of volume from any one of these customers could have a material adverse impact on Griffon’s financial results, liquidity and operations.
Removed
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.
Added
On July 1, 2024, Griffon announced that its subsidiary, The AMES Companies, Inc., ("AMES") expanded the scope of its Australian operations by acquiring substantially all the assets of Pope, a leading Australian provider of residential watering products, from The Toro Company (NYSE:TTC) for a purchase price of approximately AUD 21,800 (approximately $14,500) in cash.
Removed
CPP is well positioned to fulfill its ongoing mission of Bringing Brands Together™ with the leading brands in consumer and professional tools; residential, industrial and commercial fans; home storage and organization products; and products that enhance indoor and outdoor lifestyles.
Added
This is CPP's seventh acquisition in Australia since 2013, and further expands AMES's product portfolio in the Australian market. Pope is expected to contribute approximately $25,000 in revenue in the first twelve months after this acquisition.
Removed
Hunter, which is part of Griffon's Consumer and Professional Products segment, complements and diversifies our portfolio of leading consumer brands and products. On May 16, 2022, Griffon announced that its Board of Directors initiated a process to review a comprehensive range of strategic alternatives to maximize shareholder value including a sale, merger, divestiture, recapitalization or other strategic transaction.
Added
This initiative was successfully completed as of September 30, 2024, ahead of the previously announced date of December 31, 2024.
Removed
On April 20, 2023, Griffon announced that its Board of Directors, after extensive evaluation and deliberation, determined that the ongoing execution of the Company’s strategic plan was the best way to maximize value for shareholders and unanimously decided to conclude its review.
Added
As a result of this global sourcing expansion initiative, manufacturing operations have concluded at four manufacturing sites and four wood mills, resulting in a total facility footprint reduction of approximately 1.2 million square feet, or approximately 15% of CPP's square footage, and a headcount reduction of approximately 600.
Removed
On August 1, 2023, Griffon amended its credit agreement to increase the total amount available for borrowing under its revolving credit facility from $400,000 to $500,000, extend the maturity date of the revolving credit facility from March 22, 2 2025 to August 1, 2028 and modify certain other provisions of the facility (the "Credit Agreement").

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIn addition, lack of snow or lower than average snowfall during the winter season may result in reduced sales of certain AMES' products such as snow shovels and other snow tools. As a result, AMES' results of operations, financial results and cash flows could be adversely impacted. Unionized employees could strike or participate in a work stoppage.
Biggest changeAMES' sales volumes could be adversely affected by certain weather patterns such as unseasonably cool or warm 16 temperatures, hurricanes, water shortages or floods. In addition, lack of snow or lower than average snowfall during the winter season may result in reduced sales of certain AMES' products such as snow shovels and other snow tools.
In addition, sales generated by new products could cause a decline in sales of Griffon’s other existing products. If new product development and commercialization efforts are not successful, Griffon’s financial results could be adversely affected. 21 Product and technological developments are accomplished both through internally-funded R&D projects, as well as through strategic partnerships with customers.
In addition, sales generated by new products could cause a decline in sales of Griffon’s other existing products. If new product development and commercialization efforts are not successful, Griffon’s financial results could be adversely affected. Product and technological developments are accomplished both through internally-funded R&D projects, as well as through strategic partnerships with customers.
These conditions 13 could make it more difficult to obtain additional credit on favorable terms for investments in current businesses or for acquisitions, or could render financing unavailable; in addition, while we do not have any near term debt maturities, if these conditions persist, we may have difficulty refinancing our debt when it comes due.
These conditions could make it more difficult to obtain additional credit on favorable terms for investments in current businesses or for acquisitions, or could render financing unavailable; in addition, while we do not have any near term debt maturities, if these conditions persist, we may have difficulty refinancing our debt when it comes due.
Griffon is also exposed to certain fundamental economic risks including a decrease in the demand for the products and services it offers or a higher likelihood of default on its receivables. Adverse trends and general economic conditions, especially those that relate to construction and renovation, will impact Griffon’s business.
Griffon is also exposed to certain fundamental economic risks including a decrease in the demand for the products and services it offers or a higher likelihood of default on its receivables. 12 Adverse trends and general economic conditions, especially those that relate to construction and renovation, will impact Griffon’s business.
Our Board of Directors and management team strive to maintain constructive, ongoing communications with all shareholders who wish to speak with us, including activist shareholders, and welcomes their views and opinions with the goal of working together 23 constructively to enhance value for all shareholders.
Our Board of Directors and management team strive to maintain constructive, ongoing communications with all shareholders who wish to speak with us, including activist shareholders, and welcomes their views and opinions with the goal of working together constructively to enhance value for all shareholders.
In the past, Griffon has consummated a group of acquisitions within a short time period, which could occur again; the risks relating to integration of an acquisition may be exacerbated when numerous acquisitions are consummated in a short time period.
In the past, Griffon has consummated a group of acquisitions within a 17 short time period, which could occur again; the risks relating to integration of an acquisition may be exacerbated when numerous acquisitions are consummated in a short time period.
In addition, there can be no assurance that Griffon will not encounter increased competition in the future, which could have a material adverse effect on Griffon’s financial results. 14 The loss of large customers can harm financial results. A small number of customers account for, and are expected to continue to account for, a substantial portion of Griffon's consolidated revenue.
In addition, there can be no assurance that Griffon will not encounter increased competition in the future, which could have a material adverse effect on Griffon’s financial results. 13 The loss of large customers can harm financial results. A small number of customers account for, and are expected to continue to account for, a substantial portion of Griffon's consolidated revenue.
Should we have to record additional impairment charges in the future, it could similarly have a significant negative impact on our earnings per share for the year in which any such impairment charge is recorded. If Griffon's subcontractors or suppliers fail to perform their obligations, Griffon's performance and ability to win future business could be harmed.
Should we have to record any impairment charges in the future, it could have a significant negative impact on our earnings per share for the year in which any such impairment charge is recorded. If Griffon's subcontractors or suppliers fail to perform their obligations, Griffon's performance and ability to win future business could be harmed.
Risks Related to Our Indebtedness Griffon’s senior notes, which have limited covenants, are not due until 2028; its $800 million Term Loan B (current balance of $463 million), which also has limited covenants, is not due until 2029; and its $500 million revolving line of credit, which has greater covenant requirements, does not mature until 2028.
Risks Related to Our Indebtedness Griffon’s senior notes, which have limited covenants, are not due until 2028; its $800 million Term Loan B (current balance of $457 million), which also has limited covenants, is not due until 2029; and its $500 million revolving line of credit, which has greater covenant requirements, does not mature until 2028.
For example, in the past, a supplier may not be able to develop an alternative design that 22 meets Griffon’s needs at a comparable cost or at all, and the supply of certain products or components to Griffon may be interrupted. Griffon is exposed to product liability and warranty claims.
For example, in the past, a supplier may not be able to develop an alternative design that meets Griffon’s needs at a comparable cost or at all, and the supply of certain products or components to Griffon may be interrupted. 21 Griffon is exposed to product liability and warranty claims.
Any reduction or delay in sales of products to one or more of these customers could significantly reduce Griffon’s revenue. Griffon’s operating results will also depend on successfully developing relationships with additional key customers. Griffon cannot assure that its largest customers will be retained or that additional key customers will be recruited.
Any reduction or delay in sales of products to one or more of these customers could significantly reduce Griffon’s revenue. Griffon’s operating results will also depend on successfully developing relationships with additional key customers. Griffon cannot ensure that its largest customers will be retained or that additional key customers will be recruited.
Although these trade agreements generally have positive effects on trade liberalization, sourcing flexibility and the cost of goods by 16 reducing or eliminating the duties and/or quotas assessed on products manufactured in a particular country, trade agreements can also adversely affect HBP and CPP.
Although these trade agreements generally have positive effects on trade 15 liberalization, sourcing flexibility and the cost of goods by reducing or eliminating the duties and/or quotas assessed on products manufactured in a particular country, trade agreements can also adversely affect HBP and CPP.
The current worldwide economic uncertainty and market volatility could continue to have an adverse effect on Griffon during 2024, within both the HBP and CPP segments, which are linked to the U.S. housing and the commercial property markets, and the U.S. economy in general.
The current worldwide economic uncertainty and market volatility could continue to have an adverse effect on Griffon during 2025, within both the HBP and CPP segments, which are linked to the U.S. housing and the commercial property markets, and the U.S. economy in general.
The loss of certain key officers or employees could adversely affect Griffon’s business. The success of Griffon is materially dependent upon the continued services of certain key officers and employees. The loss of such key personnel could have a material adverse effect on Griffon’s operating results or financial condition.
The success of Griffon is materially dependent upon the continued services of certain key officers and employees. The loss of such key personnel could have a material adverse effect on Griffon’s operating results or financial condition.
As a result, CPP shipments may be targeted for detention in which case they become subject to the rebuttable presumption that they were sourced from the Uyghur region even though they are not imported directly from China or are otherwise demonstrably outside the scope of the UFLPA.
As a result, CPP shipments may be targeted for detention in which case they become subject to the rebuttable presumption that they were sourced from the Uyghur region or another high-risk country, even though they are not imported directly from China or are otherwise demonstrably outside the scope of the UFLPA.
This expansion of CPP’s global sourcing strategy will increase Griffon’s exposure to certain other risks to which it is subject, including those related to the procurement of products from third party suppliers, many of whom are located in China and other non U.S. jurisdictions.
This expansion of CPP’s global sourcing strategy has increased Griffon’s exposure to certain other risks to which it is subject, including those related to the procurement of products from third party suppliers, many of whom are located in China and other non-U.S. jurisdictions.
The percentage of HBP and CPP's worldwide sourced components as a percent of cost of goods sold approximated 20% and 4%, respectively, in 2023. Reliance on third party suppliers and manufacturers may reduce control over the timing of deliveries and quality of both HBP and CPP products.
The percentage of HBP and CPP's worldwide sourced components as a percent of cost of goods sold approximated 18% and 4%, respectively, in 2024. Reliance on third party suppliers and manufacturers may reduce control over the timing of deliveries and quality of both HBP and CPP products.
If similar directives under Pillar Two are adopted by taxing authorities in other countries in which we do business, such changes could materially increase the amount of taxes we pay and therefore materially decrease our results of operations and cash flows. The amount of income taxes paid is subject to audits by U.S.
If the provisions of Pillar Two are adopted by taxing authorities in countries in which we do business, such changes could increase the amount of taxes we pay and therefore decrease our results of operations and cash flows. The amount of income taxes paid is subject to audits by U.S.
General Risk Factors Each of Griffon's businesses faces risks related to the disruption of its primary manufacturing facilities. The manufacturing facilities for each of Griffon's businesses are concentrated in just a few locations, and in the case of CPP, some of these locations are abroad in low-cost locations.
General Risk Factors Each of Griffon's businesses faces risks related to the disruption of its primary manufacturing facilities. The manufacturing facilities for each of Griffon's businesses are concentrated in just a few locations, and in the case of CPP, include third-party manufacturing facilities, some of which are abroad in low-cost locations.
CPP’s expanded global sourcing strategy may also increase its exposure to cybersecurity risks, as discussed in the below risk factor titled “Griffon’s operations and reputation may be adversely impacted if our information technology (IT) systems, or the IT systems of third parties with whom we do business, fail to perform adequately or if we or such third parties are the subject of a data breach or cyber-attack." CPP’s expanded global sourcing strategy is designed to better position CPP to serve customers with a more flexible and cost-effective sourcing model that leverages supplier relationships around the world, which is in turn expected to improve CPP’s competitive positioning and financial performance.
CPP’s expanded global sourcing strategy may also increase its exposure to cybersecurity risks, as discussed in the below risk factor titled “Griffon’s operations and reputation may be adversely impacted if our information technology (IT) systems, or the IT systems of third parties with whom we do business, fail to perform adequately or if we or such third parties are the subject of a data breach or cyber-attack." The adoption of an asset-light business model for these U.S. products has positioned CPP to better serve customers with a more flexible and cost-effective sourcing model that leverages supplier relationships around the world, which is in turn expected to improve CPP’s competitive positioning and financial performance.
If as a result of a resurgence of COVID-19 or the outbreak of a new pandemic, governments take protective actions, it may have a material adverse impact on Griffon’s businesses and operating results for the reasons described above. In such event, the extent and duration of any impact on our businesses would be difficult to predict.
If a future pandemic or similar outbreak, such as something similar to COVID-19, occurs and governments take protective actions, it may have a material adverse impact on Griffon’s businesses and operating results for the reasons described above. In such event, the extent and duration of any impact on our businesses would be difficult to predict.
For the year ended September 30, 2023, approximately 59% and 41% of Griffon’s consolidated revenue was derived from the HBP and CPP segments, respectively, which were dependent on renovation of existing homes, new home construction, and commercial non-residential construction, repair and replacement.
For the year ended September 30, 2024, approximately 61% and 39% of Griffon’s consolidated revenue was derived from the HBP and CPP segments, respectively, which were dependent on renovation of existing homes, new home construction, and commercial non-residential construction, repair and replacement.
HBP and CPP rely on a limited number of companies globally to supply components and manufacture certain of their products. The percentage of HBP and CPP worldwide sourced finished goods as a percent of revenue approximated 5% and 27%, respectively, in 2023.
HBP and CPP rely on a limited number of companies globally to supply components and manufacture certain of their products. The percentage of HBP and CPP worldwide sourced finished goods as a percent of revenue approximated 6% and 33%, respectively, in 2024.
Griffon’s financial condition and results of operations may be materially and adversely affected if: • Product improvements are not completed on a timely basis; • New products are not introduced on a timely basis or do not achieve sufficient market penetration; • There are budget overruns or delays in R&D efforts; or • New products experience reliability or quality problems, or otherwise do not meet customer preferences or requirements.
Griffon’s financial condition and results of operations may be materially and adversely affected if: • Product improvements are not completed on a timely basis; • New products are not introduced on a timely basis or do not achieve sufficient market penetration; • There are budget overruns or delays in R&D efforts; or • New products experience reliability or quality problems, or otherwise do not meet customer preferences or requirements. 20 The loss of certain key officers or employees could adversely affect Griffon’s business.
The continuing political and economic conflicts between U.S. and China have resulted in, and may continue to result in retaliatory actions from, both countries, and it is unknown whether current US-China relations over Taiwan, including the signature of the US-Taiwan Initiative on 21 st Century Trade signed in May 2023, will impact the ongoing trade dispute with China.
The continuing political and economic conflicts between U.S. and China have resulted in, and may continue to result in retaliatory actions from, both countries, and it is unknown whether current US-China relations over Taiwan, including the signature of the US-Taiwan Initiative on 21 st Century Trade signed in May 2023, or the United States' continuing commitment to support Taiwan with equipment and services for its self-defense, will impact the ongoing trade dispute with China.
Griffon’s indebtedness poses potential risks such as: • A substantial portion of cash flows from operations could be used to pay principal and interest on debt, thereby reducing the funds available for working capital, capital expenditures, acquisitions, product development and other general corporate purposes; • Insufficient cash flows from operations may force Griffon to sell assets, or seek additional capital, which Griffon may not be able to secure on favorable terms, if at all; and • Its level of indebtedness may make Griffon more vulnerable to economic or industry downturns.
Griffon’s indebtedness poses potential risks such as: • A substantial portion of cash flows from operations could be used to pay principal and interest on debt, thereby reducing the funds available for working capital, capital expenditures, acquisitions, product development and other general corporate purposes; • Insufficient cash flows from operations may force Griffon to sell assets, or seek additional capital, which Griffon may not be able to secure on favorable terms, if at all; and • Its level of indebtedness may make Griffon more vulnerable to economic or industry downturns. 18 Risk Related to Our Common Stock Griffon has the ability to issue additional equity securities, which would lead to dilution of issued and outstanding common stock.
Home Depot and Menards are significant customers of HBP and Home Depot, Lowe’s and Bunnings are significant customers of CPP. Home Depot accounted for approximately 12% of consolidated revenue, 9% of HBP's revenue and 15% of CPP's revenue for the year ended September 30, 2023.
Home Depot and Menards are significant customers of HBP and Home Depot, Lowe’s and Bunnings are significant customers of CPP. Home Depot accounted for approximately 11% of consolidated revenue, 8% of HBP's revenue and 15% of CPP's revenue for the year ended September 30, 2024.
To the extent such resurgence or new outbreak adversely affects our businesses, operations, financial condition and operating results, it may also have the effect of heightening many of the other risks factors such as those relating to our high level of indebtedness, our need to generate sufficient cash flows to service our indebtedness, and our ability to comply with the covenants contained in the agreements that govern our indebtedness, as described in more detail below. 17 Griffon’s businesses are subject to seasonal variations and the impact of uncertain weather patterns.
To the extent a new outbreak adversely affects our businesses, operations, financial condition and operating results, it may also have the effect of heightening many of the other risks factors such as those relating to our high level of indebtedness, our need to generate sufficient cash flows to service our indebtedness, and our ability to comply with the covenants contained in the agreements that govern our indebtedness, as described in more detail below.
In addition, Griffon is authorized to issue, without stockholder approval, up to 85,000,000 shares of common stock, of which 53,062,352 shares, net of treasury shares, were outstanding as of September 30, 2023. Additionally, Griffon is authorized to issue, without stockholder approval, securities convertible into either shares of common stock or preferred stock.
In addition, Griffon is authorized to issue, without stockholder approval, up to 85,000,000 shares of common stock, of which 48,303,240 shares, net of treasury shares, were outstanding as of September 30, 2024. Additionally, Griffon is authorized to issue, without stockholder approval, securities convertible into either shares of common stock or preferred stock.
There can be no assurance that the precautions which we have taken against certain events that could disrupt the operations of our IT systems will prevent the occurrence of such a disruption.
There can be no assurance that the precautions which we have taken against certain events that could disrupt the operations of our IT systems will prevent the occurrence of such a disruption. Any such disruption could have a material adverse effect on our business and results of operations.
Also, both HBP and CPP extend credit to its customers, which exposes it to credit risk. The largest customer accounted for approximately 7%, 19% and 13% of the net accounts receivable of HBP, CPP and Griffon as of September 30, 2023, respectively.
Also, both HBP and CPP extend credit to its customers, which exposes it to credit risk. Our largest customer accounted for approximately 8%, 16% and 12% of the net accounts receivable of HBP, CPP and Griffon as of September 30, 2024, respectively.
Griffon’s ability to increase its manufacturing capacity depends on many factors, including the availability of capital, steadily increasing consumer demand, equipment delivery, construction lead-times, installation, qualification, and permitting and other regulatory requirements.
Griffon’s current manufacturing resources may be inadequate to meet significantly increased demand for some of its products. Griffon’s ability to increase its manufacturing capacity depends on many factors, including the availability of capital, steadily increasing consumer demand, equipment delivery, construction lead-times, installation, qualification, and permitting and other regulatory requirements.
Sales of products through non-U.S. subsidiaries accounted for approximately 15% of consolidated revenue for the year ended September 30, 2023.
Sales of products by non-U.S. subsidiaries accounted for approximately 16% of consolidated revenue for the year ended September 30, 2024.
While HBP and CPP plan to continue to increase its expenditures for advertising and promotion and other brand-building and marketing initiatives over the long term, the initiatives may not deliver the anticipated results and the results of such initiatives may not cover the costs of the increased investment.
While HBP and CPP plan to continue to increase its expenditures for advertising and promotion and other brand-building and marketing initiatives over the long term, the initiatives may not deliver the anticipated results and the results of such initiatives may not cover the costs of the increased investment. 19 Griffon may be required to record impairment charges for goodwill and indefinite-lived intangible assets.
Enforcement of existing laws or contracts based on existing law may be uncertain and sporadic, and it may be difficult to obtain swift and equitable enforcement or to obtain enforcement of a judgment by a court of another jurisdiction, including other jurisdictions within China itself.
China does not have a well-developed, consolidated body of laws governing agreements with international customers. Enforcement of existing laws or contracts based on existing law may be uncertain and sporadic, and it may be difficult to obtain swift and equitable enforcement or to obtain enforcement of a judgment by a court of another jurisdiction, including other jurisdictions within China itself.
Certain raw materials used by CPP may be sourced from China and therefore may have their prices and availability impacted by tariffs imposed on trade between the United States and China. As it executes its expanded sourcing strategy and 15 closes numerous U.S. facilities, CPP may increase its reliance on suppliers in China, which could further impact pricing and tariffs.
Certain raw materials used by CPP may be sourced from China and therefore may have their prices and availability impacted by tariffs imposed on trade between the United States and China. Through the expanded sourcing strategy and the 14 closure of U.S. facilities, CPP has increased the reliance on suppliers in China, which could further the impact of tariffs.
HBP and CPP operations are also subject to the effects of international trade agreements and regulations such as the United States-Mexico-Canada Agreement (USMCA), and the activities and regulations of the World Trade Organization.
HBP and CPP operations are also subject to the effects of international trade agreements and regulations such as the United States-Mexico-Canada Agreement (USMCA), which will undergo a mandatory six-year review in 2026, and the activities and regulations of the World Trade Organization.
Griffon is authorized to issue, without stockholder vote or approval, 3,000,000 shares of preferred stock in one or more series, and has the ability to fix the rights, preferences, privileges and restrictions of any such series.
The issuance of additional equity securities or securities convertible into equity securities would result in dilution to existing stockholders’ equity interests. Griffon is authorized to issue, without stockholder vote or approval, 3,000,000 shares of preferred stock in one or more series, and has the ability to fix the rights, preferences, privileges and restrictions of any such series.
Additionally, the Forced Labor Enforcement Task Force has determined that certain industry sectors (including apparel, cotton and cotton products, and silica-based products) have an inherently higher risk of forced labor, such that CBP may detain goods suspected of being manufactured with materials originating from Xinjiang, regardless of their declared country of origin.
Additionally, the Forced Labor Enforcement Task Force has determined that certain industry sectors (including apparel, cotton and cotton products, silica-based products, PVC and aluminum products), and countries of origin outside of China (including Vietnam and Thailand) have an inherently higher risk of forced labor, such that CBP may detain goods within these sectors suspected of being manufactured with materials originating from Xinjiang, or coming from a country identified as higher risk.
Actions taken by activist shareholders could be disruptive and costly and may conflict with or disrupt the strategic direction of our business. Similar to the activist shareholder campaign initiated in 2021, activist shareholders may from time to time attempt to effect changes in our strategic direction and seek changes regarding Griffon’s corporate governance or structure.
Similar to the activist shareholder campaign initiated in 2021, activist shareholders may from time to time attempt to effect changes in our strategic direction and seek changes regarding Griffon’s corporate governance or structure.
Any such disruption could have a material adverse effect on our business and results of operations. 18 Griffon may be unable to implement its acquisition growth strategy, which may result in added expenses without a commensurate increase in revenue and income, and divert management’s attention. Making strategic acquisitions is a significant part of Griffon’s growth plans.
Griffon may be unable to implement its acquisition growth strategy, which may result in added expenses without a commensurate increase in revenue and income, and divert management’s attention. Making strategic acquisitions is a part of Griffon’s growth plans.
In addition, the United States Federal Reserve has raised, and may continue to raise, interest rates in response to concerns about inflation. Increases in interest rates, especially if coupled with reduced government spending and volatility in financial markets, may have the effect of further increasing economic uncertainty and heightening these risks, which may result in economic recession.
Increases in interest rates, especially if coupled with reduced government spending and volatility in financial markets, may have the effect of further increasing economic uncertainty and heightening these risks, which may result in economic recession.
From October 1, 2022 through September 30, 2023, more than 4,000 shipments to U.S importers, valued at approximately $1.4 billion, were targeted by CBP for further inspection.
Detention costs accrue during the pendency of CBP's evaluation. From October 1, 2023 through September 30, 2024, more than 4,200 shipments to U.S importers, valued at approximately $1.7 billion, were targeted by CBP for further inspection.
If Griffon raises additional funds by issuing equity securities, current holders of its common stock may experience significant ownership interest dilution and the holders of the new securities may have rights senior to the rights associated with current outstanding common stock. 19 Griffon’s indebtedness and interest expense could limit cash flow and adversely affect operations and Griffon’s ability to make full payment on outstanding debt.
If Griffon raises additional funds by issuing equity securities, current holders of its common stock may experience significant ownership interest dilution and the holders of the new securities may have rights senior to the rights associated with current outstanding common stock.
On May 3, 2023, in response to changing market conditions, Griffon announced that its CPP segment will expand its global sourcing strategy to include long handled tools, material handling, and wood storage and organization product lines.
Griffon announced in May 2023 that CPP was expanding its global sourcing strategy to include long handled tools, material handling, and wood storage and organization product lines for the U.S. market.
Griffon may be required to record impairment charges for goodwill and indefinite-lived intangible assets. Griffon is required to assess goodwill and indefinite-lived intangible assets annually for impairment or on an interim basis if changes in circumstances or the occurrence of events suggest impairment exists.
Griffon is required to assess goodwill and indefinite-lived intangible assets annually for impairment or on an interim basis if changes in circumstances or the occurrence of events suggest impairment exists. If impairment testing indicates that the carrying amount of reporting units or indefinite-lived intangible assets exceeds the respective fair value, an impairment charge would be recognized.
In addition, manufacturing costs may increase significantly and Griffon may not be able to pass along all or any of such increase to its customers; and when such increases are passed off to customers, there will be a time lag, which may be significant. 20 If HBP and CPP do not continue to develop and maintain leading brands or realize the anticipated benefits of advertising and promotion spend, its operating results may suffer.
In addition, manufacturing costs may increase significantly and Griffon may not be able to pass along all or any of such increase to its customers; and when such increases are passed off to customers, there will be a time lag, which may be significant.
Further changes in the tax laws could arise as a result of the base erosion and profit shifting project undertaken by the Organization for Economic Co-operation and Development (“OECD”). In December 2022, the European Union (“EU”) member states reached an agreement to implement the minimum tax component (“Pillar Two”) of the OECD’s tax reform initiative.
Further changes in the tax laws could arise as a result of the base erosion and profit shifting project ("Pillar Two") undertaken by the Organization for Economic Co-operation and Development (“OECD”).
Any of Griffon's manufacturing facilities are subject to disruption for a variety of reasons, such as natural or man-made disasters, pandemics, terrorist activities, disruptions of information technology resources, and utility interruptions. Such disruptions may cause delays in shipping products, which could result in the loss of business or customer trust, adversely affecting Griffon’s businesses and operating results.
Any of Griffon's manufacturing facilities, including those of Griffon's third-party suppliers, are subject to disruption for a variety of reasons, such as natural or man-made disasters, pandemics, terrorist activities, disruptions of information technology resources, and utility interruptions.
HBP’s business is driven by renovation and construction during warm weather, which is historically at reduced levels during the winter months, generally in our second quarter. In 2023, 54% of CPP's' sales occurred during the second and third quarters compared to 58% in 2022 and 53% in 2021.
Griffon’s businesses are subject to seasonal variations and the impact of uncertain weather patterns. HBP’s business is driven by renovation and construction during warm weather, which is historically at reduced levels during the winter months, generally in our second quarter.
Importers whose shipments are detained by CBP under the UFLPA can rebut the presumption with “clear and convincing evidence” that the products were not produced with forced labor.
Importers whose shipments are detained by CBP under the UFLPA can rebut the presumption with “clear and convincing evidence” that the products were not produced with forced labor. This requires that the importer submit detailed information regarding every supplier and sub-supplier, and all components and raw materials, relating to the manufacturing and transportation of goods being detained.
These non-cash impairments resulted in an aggregate decrease of $1.49 and $8.43 in our earnings per share for the fiscal year ended September 30, 2023 and 2022, respectively.
For the fiscal year ended September 30, 2023, we recorded a non-cash, pre-tax indefinite-lived intangible assets impairment of $109,200, which resulted in an aggregate decrease of $1.49 in our earnings per share for the year ended September 30, 2023.
In May 2023, in response to changing market conditions, Griffon announced that CPP will expand its global sourcing strategy. This will increase CPP’s reliance on third-party suppliers and therefore is likely to increase CPP’s exposure to the risks relating to the use of third-party suppliers.
Griffon announced in May 2023 that CPP was expanding its global sourcing strategy to include long handled tools, material handling, and wood storage and organization product lines for the U.S. market. This has increased CPP’s reliance on third-party suppliers and, therefore, CPP’s exposure to the risks relating to the use of third-party suppliers.
At September 30, 2023, Griffon employed approximately 5,700 people on a full-time basis, approximately 4% of whom are covered by collective bargaining or similar labor agreements.
As a result, AMES' results of operations, financial results and cash flows could be adversely impacted. Unionized employees could strike or participate in a work stoppage. At September 30, 2024, Griffon employed approximately 5,300 people on a full-time basis, approximately 3% of whom are covered by collective bargaining or similar labor agreements.
Manufacturing capacity constraints or increased manufacturing costs may have a material adverse effect on Griffon's business, results of operations, financial condition and cash flows. Griffon’s current manufacturing resources may be inadequate to meet significantly increased demand for some of its products.
Such disruptions may cause delays in shipping products, which could result in the loss of business or customer trust, adversely affecting Griffon’s businesses and operating results. Manufacturing capacity constraints or increased manufacturing costs may have a material adverse effect on Griffon's business, results of operations, financial condition and cash flows.
In addition to tariffs, an increased global focus on forced labor in supply chains has the potential to impact our business operations.
These changes are expected to have a limited impact on current CPP products; however, the increases may complicate efforts to expand CPP's product portfolio under its new global sourcing strategy. In addition to tariffs, an increased global focus on forced labor in supply chains has the potential to impact our business operations.
Federal, state and local tax authorities, as well as tax authorities in the taxing jurisdictions outside the U.S. If such audits result in assessments different from recorded income tax liabilities, Griffon’s future financial results may include unfavorable adjustments to its income tax provision.
If such audits result in assessments different from recorded income tax liabilities, Griffon’s future financial results may include unfavorable adjustments to its income tax provision. 22 Actions taken by activist shareholders could be disruptive and costly and may conflict with or disrupt the strategic direction of our business.
Department of Labor, the annual inflation rate for the United States decreased to 3.7% for the twelve months ended September 30, 2023, high inflation or increases in inflation may result in decreased demand for Griffon’s operating company’s products and services and increased operating costs and expenses, including for labor, raw materials and supplies.
Inflation rates, particularly in the United States, increased to historic levels in 2022. According to the U.S. Department of Labor, the annual inflation rate for the United States decreased to 3.7% for the twelve months ended September 30, 2023, and it further decreased to 3.5% for the twelve months ended September 30, 2024.
We cannot be certain that our products will not be targeted or that our shipments will not be detained, which may impact our operating performance. Forced labor enforcement initiatives are also targeting imports from other countries besides China, and we will continue to monitor the products and countries subject to increased scrutiny for potential impacts to our operations.
We cannot be certain that our products will not be targeted or that our shipments will not be detained, which may impact our operating performance.
If impairment testing indicates that the carrying amount of reporting units or indefinite-lived intangible assets exceeds the respective fair value, an impairment charge would be recognized. If goodwill or indefinite-lived intangible assets were to become impaired, the results of operations could be materially and adversely affected.
If goodwill or indefinite-lived intangible assets were to become impaired, the results of operations could be materially and adversely affected. During the fiscal year ended September 30, 2024, Griffon performed annual impairment testing of its goodwill and indefinite-lived intangible assets. The assessments did not result in any impairments to goodwill and indefinite-lived intangible assets.
The sourcing of CPP finished goods, components and raw materials from China are generally subject to supply agreements with Chinese companies. China does not have a well-developed, consolidated body of laws governing agreements with international customers.
CPP is taking steps to develop multiple suppliers outside of China to allow for supply chain sourcing pivot, as needed, in an effort to minimize this risk. The sourcing of CPP finished goods, components and raw materials from China are generally subject to supply agreements with Chinese companies.
Removed
Inflation rates, particularly in the United States, increased to historic levels in 2022. Although, according to the U.S.
Added
Although the past two fiscal years reflected a decrease in inflation rates since 2022, future increases in inflation may result in decreased demand for Griffon’s operating company’s products and services and increased operating costs and expenses, including for labor, raw materials and supplies.
Removed
The tariffs currently apply to approximately 66% of U.S. imports from China, or more than $330 billion of trade. Section 301 of the Trade Act of 1974 requires that the duties must terminate after four years unless one or more domestic beneficiaries of the tariffs requests their continuation.
Added
U.S. imports from China exceeded $425 billion in 2023, the majority of which were subject to the Section 301 tariffs. In May 2024, the United States Trade Representative (USTR) completed a mandatory four-year review of the tariffs under Section 301 of the Trade Act of 1974.
Removed
In September 2022, the United States Trade Representative (USTR) announced that it had received such requests and would therefore continue the tariffs pending a comprehensive review of their necessity. As of September 30, 2023 the four-year review remains ongoing.
Added
In addition to continuing the tariffs rather than allowing them to terminate under the Trade Act, the USTR announced additional tariffs on a number of products, to be implemented over the two-year period 2024-2026.
Removed
In September the USTR announced an extension of certain exclusions from the tariffs through December 31, 2023 to allow the USTR to complete its review. It remains unknown whether the USTR will continue the Section 301 tariffs upon completion of its review.
Added
CPP is also in the process of selling various U.S. facilities at which CPP formerly conducted operations, and may not realize the proceeds it expects from the sale of these facilities.
Removed
This requires that the importer submit detailed information regarding every supplier and sub-supplier, as well as all components and raw materials, relating to the goods being detained, and detention costs accrue during the pendency of CBP’s evaluation.
Added
There is no guarantee that these intended results will be achieved. This initiative was successfully completed as of September 30, 2024, ahead of the previously announced date of December 31, 2024.
Removed
Griffon will also be subject to unique risks associated with the implementation of CPP’s expanded global sourcing strategy, including potential negative effects relating to the closing of domestic manufacturing facilities and the related termination of employees.
Added
As a result of this global sourcing expansion initiative, manufacturing operations have concluded at four manufacturing sites and four wood mills, resulting in a total its facility footprint reduction of approximately 1.2 million square feet, or approximately 15% of CPP's square footage, and a headcount reduction of approximately 600. A future pandemic could adversely impact our results of operations.
Removed
There is a risk that CPP’s ability to provide products to its customers will be disrupted as CPP increases its reliance on third party suppliers and expands its distribution system for products manufactured by third parties. CPP may also not realize the proceeds it expects from the sale of facilities that will no longer be used by CPP.
Added
In 2024, 52% of CPP's' sales occurred during the second and third quarters compared to 54% in 2023 and 58% in 2022. Demand for lawn and garden products is influenced by weather, particularly weekend weather during the peak gardening season.
Removed
There is no guarantee that the restructuring will achieve these intended results. The COVID-19 outbreak, or any other future pandemic, could adversely impact our results of operations. On May 11, 2023, the U.S.
Added
Griffon’s indebtedness and interest expense could limit cash flow and adversely affect operations and Griffon’s ability to make full payment on outstanding debt.
Removed
Department of Health and Human Services declared the end of the Public Health Emergency for COVID-19; however, the effects of COVID-19 continue to linger throughout the global economy and our businesses.
Added
If HBP and CPP do not continue to develop and maintain leading brands or realize the anticipated benefits of advertising and promotion spend, its operating results may suffer.
Removed
Though the severity of COVID-19 has subsided, new variants or any other future pandemic could interrupt business, cause renewed labor and supply chain disruptions, and negatively impact the global and US economy, which could materially and adversely impact our businesses.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeFrancois, Quebec Consumer and Professional Products Manufacturing, Distribution 353,000 Owned Pollington Site, UK Consumer and Professional Products Manufacturing, Distribution 115,000 Owned Carlisle, PA Consumer and Professional Products Manufacturing, Distribution 1,409,000 Leased 2035 United Kingdom (various) Consumer and Professional Products 1 Manufacturing and 2 Distribution 411,000 Leased 2023 - 2027 Reno, NV Consumer and Professional Products Manufacturing, Distribution 997,000 Leased 2034 Australia (various) Consumer and Professional Products 8 Distribution 1 Manufacturing 769,000 Leased 2024 - 2031 Fairfield, IA * Consumer and Professional Products Manufacturing 54,000 Leased 2024 Mt Wellington, New Zealand Consumer and Professional Products Manufacturing 54,000 Leased 2027 Guangdong, China Consumer and Professional Products Manufacturing 211,000 Leased 2023 Byhalia, MS Consumer and Professional Products Distribution 600,000 Leased 2025 Smyrna, TN Consumer and Professional Products Office 100,000 Leased 2025 * Facilities to cease operations during fiscal 2024 as part of CPP's Global Supply Chain expansion.
Biggest changeFrancois, Quebec Consumer and Professional Products Manufacturing, Distribution 353,000 Owned Pollington Site, UK Consumer and Professional Products Manufacturing, Distribution 115,000 Owned Carlisle, PA Consumer and Professional Products Manufacturing, Distribution 1,409,000 Leased 2030 - 2035 United Kingdom (various) Consumer and Professional Products 3 Distribution 138,000 Leased 2024 Reno, NV Consumer and Professional Products Manufacturing, Distribution 997,000 Leased 2034 Australia (various) Consumer and Professional Products 8 Distribution, 2 Manufacturing 918,000 Leased 2025 - 2031 Canada (Various) Consumer and Professional Products 1 Manufacturing, 3 Distribution 96,000 Leased 2025 - 2028 Mt Wellington, New Zealand Consumer and Professional Products Distribution 54,000 Leased 2025 Guangdong, China Consumer and Professional Products Manufacturing 211,000 Leased 2025 Byhalia, MS Consumer and Professional Products Distribution 600,000 Leased 2025 Smyrna, TN Consumer and Professional Products Office 100,000 Leased 2025 In addition to the facilities listed above, HBP leases approximately 1,138,000 square feet of space for distribution centers in numerous facilities throughout the U.S. and in Canada; HBP and CPP lease approximately 185,000 square feet of office space throughout the U.S. and various international locations; and CPP owns approximately 118,000 square feet of additional space for operational wood mills in the U.S.
Item 2. Properties Griffon occupies approximately 10,490,000 square feet of general office, factory and warehouse space primarily throughout the U.S., Canada, Mexico, Australia, U.K., Ireland and China. For a description of the encumbrances on certain of these properties, see the Notes Payable, Capitalized Leases and Long-Term Debt footnote in the Notes to Consolidated Financial Statements.
Item 2. Properties Griffon occupies approximately 10,740,000 square feet of general office, factory and warehouse space primarily throughout the U.S., Canada, Mexico, Australia, U.K., Ireland, New Zealand and China. For a description of the encumbrances on certain of these properties, refer to Note 22 - Leases and Note 12 - Long-Term Debt footnotes in the Notes to Consolidated Financial Statements.
Square Footage Owned/ Leased Lease End Year New York, NY Corporate Headquarters 13,000 Leased 2025 Troy, OH Home and Building Products Manufacturing 1,237,000 Owned Russia, OH Home and Building Products Manufacturing 250,000 Owned Mountain Top, PA Home and Building Products Manufacturing 279,000 Owned Mason, OH Home and Building Products Office 131,000 Owned Goodyear, AZ Home and Building Products Manufacturing 163,000 Owned Greenville, OH Home and Building Products Distribution 148,000 Leased 2025 Camp Hill, PA * Consumer and Professional Products Manufacturing 380,000 Owned Harrisburg, PA * Consumer and Professional Products Manufacturing 264,000 Owned Ocala, FL Consumer and Professional Products Office, Manufacturing 619,500 Owned Ocala, FL Consumer and Professional Products Distribution 56,500 Leased 2024 Grantsville, MD * Consumer and Professional Products Manufacturing 155,000 Owned Champion, PA * Consumer and Professional Products Wood Mill 225,000 Owned Cork, Ireland Consumer and Professional Products Manufacturing, Distribution 74,000 Owned St.
Square Footage Owned/ Leased Lease End Year New York, NY Corporate Headquarters 13,000 Leased 2035 Troy, OH Home and Building Products Manufacturing 1,332,000 Owned Russia, OH Home and Building Products Manufacturing 250,000 Owned Mountain Top, PA Home and Building Products Manufacturing 279,000 Owned Mason, OH Home and Building Products Office 131,000 Owned Goodyear, AZ Home and Building Products Manufacturing 163,000 Owned Greenville, OH Home and Building Products Distribution 148,000 Leased 2025 Ocala, FL Consumer and Professional Products Office, Manufacturing 619,500 Owned Ocala, FL Consumer and Professional Products Distribution 56,500 Leased 2026 Cork, Ireland Consumer and Professional Products Distribution 74,000 Owned St.
Some of the CPP wood mills will cease operations during fiscal 2024 as part of CPP's Global Supply Chain expansion. All facilities are generally well maintained and suitable for the operations conducted. 25
As a part of CPP's global sourcing strategy expansion, several facilities have concluded operations during fiscal 2024 and, as a result, these facilities, which are approximately 1,242,000 square feet in the aggregate, are classified as held for sale. All facilities are generally well maintained and suitable for the operations conducted. 25
Removed
In addition to the facilities listed above, HBP leases approximately 1,105,000 square feet of space for distribution centers in numerous facilities throughout the U.S. and in Canada; HBP and CPP lease approximately 180,000 square feet of office space throughout the U.S. and various international locations; and CPP owns approximately 133,000 square feet of additional space for operational wood mills in the U.S.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeItem 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Griffon’s Common Stock is listed for trading on the New York Stock Exchange under the symbol “GFF”.
Biggest changeItem 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Griffon’s Common Stock is listed for trading on the New York Stock Exchange under the symbol “GFF”. Dividends During 2024, the Company declared and paid four regular quarterly cash dividends of $0.15 per share, totaling $0.60 per share for the year.
Dividends During 2023, the Company declared and paid four regular quarterly cash dividends consisting of two cash dividends of $0.10 per share and two cash dividends of $0.125 per share, totaling $0.45 per share for the year.
During 2023, the Company declared and paid four regular quarterly cash dividends consisting of two cash dividends of $0.10 per share and two cash dividends of $0.125 per share, totaling $0.45 per share for the year.
See " Management's Discussion and Analysis of Financial Condition and Results of Operations - LIQUIDITY AND CAPITAL RESOURCES - Liquidity" - for information regarding share repurchases in the first quarter of fiscal 2024 and the amount remaining available for purchase as of immediately prior to the filing of this Annual Report on Form 10-K. 2.
See " Management's Discussion and Analysis of Financial Condition and Results of Operations - LIQUIDITY AND CAPITAL RESOURCES - Liquidity" - for information regarding share repurchases in the first quarter of fiscal 2025 and the amount remaining available for purchase as of immediately prior to the filing of this Annual Report on Form 10-K. 2.
The following graph sets forth the cumulative total return to Griffon’s stockholders during the five years ended September 30, 2023, as well as an overall stock market (S&P Small Cap 600 Index) and Griffon’s peer group index (Dow Jones U.S. Diversified Industrials Index). Assumes $100 was invested on September 30, 2018, including the reinvestment of dividends, in each category.
The following graph sets forth the cumulative total return to Griffon’s stockholders during the five years ended September 30, 2024, as well as an overall stock market (S&P Small Cap 600 Index) and Griffon’s peer group index (Dow Jones U.S. Diversified Industrials Index). Assumes $100 was invested on September 30, 2019, including the reinvestment of dividends, in each category.
Securities Authorized for Issuance Under Equity Compensation Plans The following sets forth information relating to Griffon’s equity compensation plans as of September 30, 2023: (a) (b) (c) Plan Category Number of securities to be issued upon exercise of outstanding options, warrants and rights Weighted- average exercise price of outstanding options, warrants and rights Number of securities remaining available for future issuance under equity plans (excluding securities reflected in column (a)) Equity compensation plans approved by security holders (1) — $ — 328,473 Equity compensation plans not approved by security holders — $ — — _____________________________________ (1) Excludes restricted shares and restricted stock units issued in connection with Griffon’s equity compensation plans.
Securities Authorized for Issuance Under Equity Compensation Plans The following sets forth information relating to Griffon’s equity compensation plans as of September 30, 2024: (a) (b) (c) Plan Category Number of securities to be issued upon exercise of outstanding options, warrants and rights Weighted- average exercise price of outstanding options, warrants and rights Number of securities remaining available for future issuance under equity plans (excluding securities reflected in column (a)) Equity compensation plans approved by security holders (1) — $ — 2,377,532 Equity compensation plans not approved by security holders — $ — — _____________________________________ (1) Excludes restricted shares and restricted stock units issued in connection with Griffon’s equity compensation plans.
Under the share repurchase program, the Company may, from time to time, purchase shares of its common stock in the open market, including pursuant to a 10b5-1 plan, pursuant to an accelerated share repurchase program or issuer tender offer, or in privately negotiated transactions. As of September 30, 2023, $107,183 remained available for purchase under these Board authorized repurchase programs.
Under the share repurchase program, the Company may, from time to time, purchase shares of its common stock in the open market, including pursuant to a 10b5-1 plan, pursuant to an accelerated share repurchase program or issuer tender offer, or in privately negotiated transactions. As of September 30, 2024, $32,693 remained available for purchase under these Board authorized repurchase programs.
On April 19, 2023, the Company's Board of Directors approved a $200,000 increase to its share repurchase program to $257,955 from the prior unused authorization of $57,955.
On April 19, 2023, the Company's Board of Directors approved a $200,000 increase to its share repurchase program to $257,955 from the prior unused authorization of $57,955. On November 15, 2023, Griffon announced that the Board of Directors approved an additional increase of $200,000 to its share repurchase authorization.
On November 14, 2023, the Board of Directors declared a cash dividend of $0.15 per share, payable on December 14, 2023 to shareholders of record as of the close of business on November 28, 2023. Registered Holders As of October 31, 2023, there were approximately 2,322 registered holders of Griffon’s Common Stock.
On November 12, 2024, the Board of Directors declared a cash dividend of $0.18 per share, payable on December 18, 2024 to shareholders of record as of the close of business on November 25, 2024. Registered Holders As of October 31, 2024, there were approximately 2,179 registered holders of Griffon’s Common Stock.
The total reflected in column (c) includes shares available for grant as any type of equity award under the Incentive Plan. 27 Issuer Purchase of Equity Securities The table below presents shares of Griffon Stock which were acquired by Griffon during the fourth quarter of 2023: ISSUER PURCHASES OF EQUITY SECURITIES Period (a) Total Number of Shares (or Units) Purchased (1) (b) Average Price Paid Per Share (or Unit) (c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs (1) (d) Maximum Number (or Approximate Dollar Value) of Shares (or Units) That May Yet Be Purchased Under the Plans or Programs July 1 - 31, 2023 59,297 (2) $ 39.65 59,297 August 1 - 31, 2023 509,413 (2) 41.39 509,413 September 1 - 30, 2023 1,032,152 40.67 1,032,152 Total 1,600,862 $ 40.86 1,600,862 $ 107,183 (1) _____________________________________________________ 1.
The total reflected in column (c) includes shares available for grant as any type of equity award under the Incentive Plan. 27 Issuer Purchase of Equity Securities The table below presents shares of Griffon Stock which were acquired by Griffon during the fourth quarter of 2024: ISSUER PURCHASES OF EQUITY SECURITIES Period (a) Total Number of Shares (or Units) Purchased (1) (b) Average Price Paid Per Share (or Unit) (c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs (1) (d) Maximum Number (or Approximate Dollar Value) of Shares (or Units) That May Yet Be Purchased Under the Plans or Programs July 1 - 31, 2024 90,602 (2) $ 66.96 90,602 August 1 - 31, 2024 460,000 (2) 63.28 460,000 September 1 - 30, 2024 500,000 (2) 66.42 500,000 Total 1,050,602 $ 65.09 1,050,602 $ 32,693 (1) _____________________________________________________ 1.
For all dividends, a dividend payable is established for the holders of restricted shares; such dividends will be released upon vesting of the underlying restricted shares.
Additionally, on June 27, 2022, the Board of Directors declared a special cash dividend of $2.00 per share, paid on July 20, 2022. For all dividends, a dividend payable is established for the holders of restricted shares; such dividends will be released upon vesting of the underlying restricted shares.
Removed
Additionally, on June 27, 2022, the Board of Directors declared a special cash dividend of $2.00 per share, paid on July 20, 2022. During 2021, the Company declared and paid a regular quarterly cash dividend of $0.08 per share, totaling $0.32 per share for the year.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

114 edited+35 added−52 removed55 unchanged
Biggest changeThe 2022 loss from continuing operations included the following: – Restructuring charges of $16,782 ($12,479, net of tax, or $0.23 per share); – Debt extinguishment, net $4,529 ($3,474, net of tax, or $0.06 per share); – Acquisition costs of $9,303 ($8,149, net of tax, or $0.15 per share); – Strategic review - retention and other of $9,683 ($7,280, net of tax, or $0.13 per share); – Special dividend ESOP charges of $10,538 ($8,083, net of tax, or $0.15 per share); – Proxy expenses of $6,952 ($5,359, net of tax, or $0.10 per share); – Fair value step-up of acquired inventory sold of $5,401 ($4,012, net of tax, or $0.07 per share); – Goodwill and intangible asset impairments of $517,027 ($454,753, net of tax, or $8.43 per share); and – Discrete and certain other tax provision, net, of $3,913 or 0.07 per share.
Biggest changeThe 2024 income from continuing operations included the following: – Restructuring charges of $41,309 ($30,824, net of tax, or $0.62 per share); – Strategic review - retention and other of $10,594 ($7,934, net of tax, or $0.16 per share); – Loss on sale of buildings $61 ($25, net of tax, or $0.00 per share); – Debt extinguishment, net $1,700 ($1,292, net of tax, or $0.03 per share); – Fair value step-up of acquired inventory sold of $491 ($354, net of tax, or $0.01 per share); – Acquisition costs of $441 ($335, net of tax, or $0.01 per share); – Discrete and certain other tax provision, net, of $3,586 or 0.07 per share. 31 The 2023 income from continuing operations included the following: – Restructuring charges of $92,468 ($68,779, net of tax, or $1.26 per share); – Gain on sale of buildings $12,655 ($9,586, net of tax, or $0.18 per share); – Debt extinguishment, net $437 ($332, net of tax, or $0.01 per share); – Strategic review - retention and other of $20,225 ($15,253, net of tax, or $0.28 per share); – Special dividend ESOP charges of $15,494 ($11,779, net of tax, or $0.22 per share); – Proxy expenses of $2,685 ($2,059, net of tax, or $0.04 per share); – Intangible asset impairments of $109,200 ($81,313, net of tax, or $1.49 per share); and – Discrete and certain other tax provisions, net, of $175 or $0.00 per share.
Per share impact of using diluted shares represents the impact of converting from the basic shares used in calculating earnings per share from the loss from continuing operations to the diluted shares used in calculating earnings per share from the adjusted income from continuing operations. 34 REPORTABLE SEGMENTS Griffon evaluates performance and allocates resources based on each segment's adjusted EBITDA, a non-GAAP measure, defined as income before taxes from continuing operations, excluding interest income and expense, depreciation and amortization, unallocated amounts (mainly corporate overhead), strategic review charges, non-cash impairment charges, restructuring charges, and acquisition related expenses, as well as other items that may affect comparability, as applicable.
Per share impact of using diluted shares represents the impact of converting from the basic shares used in calculating earnings per share from the loss from continuing operations to the diluted shares used in calculating earnings per share from the adjusted income from continuing operations. 34 REPORTABLE SEGMENTS Griffon evaluates performance and allocates resources based on each segment's adjusted EBITDA, a non-GAAP measure, defined as income (loss) before taxes from continuing operations, excluding interest income and expense, depreciation and amortization, unallocated amounts (mainly corporate overhead), strategic review charges, non-cash impairment charges, restructuring charges, and acquisition related expenses, as well as other items that may affect comparability, as applicable.
The volume decrease was primarily driven by residential, partially offset by increased commercial. HBP Adjusted EBITDA in 2023 increased 24% to $510,876 compared to $412,738 in 2022. Adjusted EBITDA benefited from the increased revenue noted above and reduced material costs, partially offset by increased labor, transportation, advertising and marketing costs.
The volume decrease was primarily driven by residential, partially offset by commercial. HBP Adjusted EBITDA in 2023 increased 24% to $510,876 compared to $412,738 in 2022. Adjusted EBITDA benefited from the increased revenue noted above and reduced material costs, partially offset by increased labor, transportation, advertising and marketing costs.
Comprehensive Income (Loss) During 2023, total other comprehensive income (loss), net of taxes, of $12,728 included a gain of $8,447 from foreign currency translation adjustments primarily due to the strengthening of the Euro and British Pound, all in comparison to the U.S.
During 2023, total other comprehensive income (loss), net of taxes, of $12,728 included a gain of $8,447 from foreign currency translation adjustments primarily due to the strengthening of the Euro and British Pound, all in comparison to the U.S.
Proceeds from the 2028 Senior Notes were used to redeem $1,000,000 of 5.25% Senior Notes due 2022. In connection with the issuance and exchange of the 2028 Senior Notes, Griffon capitalized $16,448 of underwriting fees and other expenses incurred, which is being amortized over the term of such notes.
Proceeds from the 2028 Senior Notes were used to redeem $1,000,000 of 5.25% Senior Notes due in 2022. In connection with the issuance and exchange of the 2028 Senior Notes, Griffon capitalized $16,448 of underwriting fees and other expenses incurred, which is being amortized over the term of such notes.
Our intent is to permanently reinvest these funds, except in limited circumstances, outside the U.S., and we do not currently anticipate that we will need funds generated from foreign operations to fund our domestic operations. The Company 38 may repatriate cash from its non-U.S. subsidiaries if the Company determines that it is beneficial to the company and tax efficient.
Our intent is to permanently reinvest these funds, except in limited circumstances, outside the U.S., and we do not currently anticipate that we will need funds generated from foreign operations to fund our domestic operations. The Company may repatriate cash from its non-U.S. subsidiaries if the Company determines that it is beneficial to the company and tax efficient.
Assumptions used in determining Griffon’s obligations under the defined benefit pension plans are believed to be reasonable, based on experience and advice from independent actuaries; however, differences in actual experience or changes in the assumptions may materially affect Griffon’s financial position or results of operations. All of the defined benefit plans are frozen and have ceased accruing benefits.
Assumptions used in determining Griffon’s obligations under the defined benefit pension plans are believed to be reasonable, based on experience and advice from independent actuaries; however, differences in actual experience or changes in the assumptions may materially affect Griffon’s financial position or results of operations. All of the defined benefit plans are frozen and have ceased accruing benefits. 45
The 2022 loss from continuing operations included the following: – Restructuring charges of $16,782 ($12,479, net of tax, or $0.23 per share); – Debt extinguishment, net $4,529 ($3,474, net of tax, or $0.06 per share); – Acquisition costs of $9,303 ($8,149, net of tax, or $0.15 per share); – Strategic review - retention and other of $9,683 ($7,280, net of tax, or $0.13 per share); – Special dividend ESOP charges of $10,538 ($8,083, net of tax, or $0.15 per share); – Proxy expenses of $6,952 ($5,359, net of tax, or $0.10 per share); – Fair value step-up of acquired inventory sold of $5,401 ($4,012, net of tax, or $0.07 per share); – Goodwill and intangible asset impairments of $517,027 ($454,753, net of tax, or $8.43 per share); and – Discrete and certain other tax provision, net, of $3,913 or $0.07 per share.
The 2022 loss from continuing operations included the following: – Restructuring charges of $16,782 ($12,479, net of tax, or $0.23 per share); – Debt extinguishment, net of $4,529 ($3,474, net of tax, or $0.06 per share); – Acquisition costs of $9,303 ($8,149, net of tax, or $0.15 per share); – Strategic review - retention and other of $9,683 ($7,280, net of tax, or $0.13 per share); – Special dividend ESOP charges of $10,538 ($8,083, net of tax, or $0.15 per share); – Proxy expenses of $6,952 ($5,359, net of tax, or $0.10 per share); – Fair value step-up of acquired inventory sold of $5,401 ($4,012, net of tax, or $0.07 per share); – Goodwill and intangible asset impairments of $517,027 ($454,753, net of tax, or $8.43 per share); and – Discrete and certain other tax provisions, net, of $3,913 or $0.07 per share.
Other income (expense) of $2,928 and $6,881 in 2023 and 2022, respectively, includes $302 and $305, respectively, of net currency exchange transaction gains from receivables and payables held in non-functional currencies, $469 and $(225), respectively, of net gains (losses) on investments, and $(866) and $4,256, respectively, of net periodic benefit plan income (expense).
Other income (expense) of $2,928 and $6,881 in 2023 and 2022, respectively, includes $302 and $305, respectively, of net currency exchange transaction gains from receivables and payables held in non-functional currencies, $469 and $(225), respectively, of net gains (losses) on investments, and $(866) and $4,256, respectively, of net periodic benefit plan income 32 (expense).
The 2023 income from continuing operations included the following: – Restructuring charges of $92,468 ($68,779, net of tax, or $1.26 per share); – Gain on sale of buildings $12,655 (9,586, net of tax, or $0.18 per share); – Debt extinguishment, net $437 ($332, net of tax, or $0.01 per share); – Strategic review - retention and other of $20,225 ($15,253, net of tax, or $0.28 per share); – Special dividend ESOP charges of $15,494 ($11,779, net of tax, or $0.22 per share); – Proxy expenses of $2,685 ($2,059, net of tax, or $0.04 per share); – Intangible asset impairments of $109,200 ($81,313, net of tax, or $1.49 per share); and – Discrete and certain other tax provision, net, of $175 or 0.00 per share.
The 2023 income from continuing operations included the following: – Restructuring charges of $92,468 ($68,779, net of tax, or $1.26 per share); – Gain on sale of buildings $12,655 ($9,586, net of tax, or $0.18 per share); – Debt extinguishment, net $437 ($332, net of tax, or $0.01 per share); – Strategic review - retention and other of $20,225 ($15,253, net of tax, or $0.28 per share); – Special dividend ESOP charges of $15,494 ($11,779, net of tax, or $0.22 per share); – Proxy expenses of $2,685 ($2,059, net of tax, or $0.04 per share); – Intangible asset impairments of $109,200 ($81,313, net of tax, or $1.49 per share); and – Discrete and certain other tax provisions, net, of $175 or $0.00 per share.
The liability associated with unrecognized tax benefits is adjusted periodically due to changing circumstances, such as the progress of tax audits, case law developments and new or 45 emerging legislation. Such adjustments are recognized in the period in which they are identified.
The liability associated with unrecognized tax benefits is adjusted periodically due to changing circumstances, such as the progress of tax audits, case law developments and new or emerging legislation. Such adjustments are recognized in the period in which they are identified.
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 financial information may not necessarily be indicative of the results of operations or financial position of the guarantor companies or non-guarantor 42 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 income tax provision recognized in 2023 and 2022 translated to an effective 31 income tax rate of 31.1% and 6.2%, respectively. The 2023 and 2022 tax rates included discrete and certain other tax provisions net, and other items that affect comparability, as listed below.
The income tax provision in 2023 and 2022 translated to an effective income tax rate of 31.1% and 6.2%, respectively. The 2023 and 2022 tax rates included discrete and certain other tax provisions, net, and other items that affect comparability, as listed below.
Income from continuing operations for 2023 was $77,617, or $1.42 per share, compared to loss from continuing operations of $287,715, or $5.57 per share in 2022.
Income from continuing operations for 2023 was $77,617, or $1.42 per share, compared to a loss from continuing operations of $287,715, or $5.57 per share in 2022.
In the event the 2028 40 Senior Notes are not repaid, refinanced, or replaced prior to December 1, 2027, the Revolver will mature on December 1, 2027.
In the event the 2028 Senior Notes are not repaid, refinanced, or replaced prior to December 1, 2027, the Revolver will mature on December 1, 2027.
No event or indicator of impairment existed for the HBP assets groups as of September 30, 2023. Fair value estimates are based on assumptions believed to be reasonable at the time, but such assumptions are subject to inherent uncertainty. Actual results may differ materially from those estimates.
No event or indicator of impairment existed for the HBP assets groups as of September 30, 2024 and 2023. Fair value estimates are based on assumptions believed to be reasonable at the time, but such assumptions are subject to inherent uncertainty. Actual results may differ materially from those estimates.
As of September 30, 2023, outstanding Senior Notes due totaled $974,775; interest is payable semi-annually on March 1 and September 1. The 2028 Senior Notes are senior unsecured obligations of Griffon guaranteed by certain domestic subsidiaries, and subject to certain covenants, limitations and restrictions.
As of September 30, 2024, outstanding Senior Notes due totaled $974,775; interest is payable semi-annually on March 1 and September 1. The 2028 Senior Notes are senior unsecured obligations of Griffon guaranteed by certain domestic subsidiaries, and subject to certain covenants, limitations and restrictions.
As of September 30, 2023 and 2022, we tested long-lived intangible and tangible assets for impairment by comparing estimated future undiscounted cash flows of each CPP asset group to the carrying amount of the asset group and determined that an impairment did not exist.
As of September 30, 2024 and 2023, we tested long-lived intangible and tangible assets for impairment by comparing estimated future undiscounted cash flows of each CPP asset group to the carrying amount of the asset group and determined that an impairment did not exist.
In accordance with Rule 3-10 of Regulation S-X promulgated under the Securities Act, presented below are summarized financial information of the Parent (Griffon) subsidiaries and the Guarantor subsidiaries as of September 30, 2023 and September 30, 2022 and for the years ended September 30, 2023 and 2022.
In accordance with Rule 3-10 of Regulation S-X promulgated under the Securities Act, presented below are summarized financial information of the Parent (Griffon) subsidiaries and the Guarantor subsidiaries as of September 30, 2024 and September 30, 2023 and for the years ended September 30, 2024 and 2023.
In July 2018, the AMES Companies UK Ltd and its subsidiaries (collectively, "Ames UK") entered into a GBP 14,000 term loan, GBP 4,000 mortgage loan and GBP 5,000 revolver, which matured in July 2023. Prior to maturity, on June 30, 2023, AMES UK repaid and cancelled the GBP 14,000 term loan and GBP 4,000 mortgage loan.
In July 2018, the AMES Companies UK Ltd and its subsidiaries (collectively, "Ames UK") entered into a GBP 14,000 term loan, GBP 4,000 mortgage loan and GBP 5,000 revolver, which matured in July 2023. Prior to maturity, on June 30, 2023, AMES UK paid off and cancelled the GBP 14,000 term loan and GBP 4,000 mortgage loan.
Griffon rents real property and equipment under operating leases expiring at various dates. Operating lease obligations over the next twelve months is approximately $41,955. Refer to Note 22 - Leases. Customers A small number of customers account for, and are expected to continue to account for, a substantial portion of Griffon’s consolidated revenue.
Griffon rents real property and equipment under operating leases expiring at various dates. Operating lease obligations over the next twelve months is approximately $45,291. Refer to Note 22 - Leases. Customers A small number of customers account for, and are expected to continue to account for, a substantial portion of Griffon’s consolidated revenue.
Griffon believes this information is useful to investors for the same reason. See the table provided in Note 19 - Business Segments for a reconciliation of adjusted EBITDA to income before taxes from continuing operations.
Griffon believes this information is useful to investors for the same reason. See the table provided in Note 19 - Reportable Segments for a reconciliation of adjusted EBITDA to income (loss) before taxes from continuing operations.
Selling, general and administrative (“SG&A”) expenses in 2023 of $642,734 or 23.9% of revenue, increased 6% from $608,926, or 21.4% of revenue, in 2022. 2023 SG&A expenses included restructuring charges of $10,440, strategic review (retention and other) of $20,225, special dividend ESOP charges of $15,494 and proxy expenses of $2,685. 2022 SG&A expenses included restructuring charges of $8,818, acquisition costs of $9,303, strategic review (retention and other) of $9,683, special dividend ESOP charges of $10,538 and proxy expenses of $6,952.
SG&A expenses in 2023 of $642,734 or 23.9% of revenue, increased 6% from $608,926, or 21.4% of revenue, in 2022. 2023 SG&A expenses included restructuring charges of $10,440, strategic review (retention and other) of $20,225, special dividend ESOP charges of $15,494 and proxy expenses of $2,685. 2022 SG&A expenses included restructuring charges of $8,818, acquisition costs of $9,303, strategic review (retention and other) of $9,683, special dividend ESOP charges of $10,538 and proxy expenses of $6,952.
Griffon's purchase obligations, which are generally for the purchase of goods and services in the ordinary course of business over the next twelve months is approximately $160,539. Griffon uses blanket purchase orders to communicate expected requirements to certain vendors. Purchase obligations reflect those purchase orders in which the commitment is considered to be firm.
Griffon's purchase obligations, which are generally for the purchase of goods and services in the ordinary course of business over the next twelve months is approximately $195,227. Griffon uses blanket purchase orders to communicate expected requirements to certain vendors. Purchase obligations reflect those purchase orders in which the commitment is considered to be firm.
HBP revenue was 59%, 53% and 46% of Griffon’s consolidated revenue in 2023, 2022 and 2021, respectively. • Consumer and Professional Products (“CPP”) is a leading global provider of branded consumer and professional tools; residential, industrial and commercial fans; home storage and organization products; and products that enhance indoor and outdoor lifestyles.
HBP revenue was 61%, 59% and 53% of Griffon’s consolidated revenue in 2024, 2023 and 2022, respectively. • Consumer and Professional Products (“CPP”) is a leading global provider of branded consumer and professional tools; residential, industrial and commercial fans; home storage and organization products; and products that enhance indoor and outdoor lifestyles.
CPP sells products globally through a portfolio of leading brands including AMES, since 1774, Hunter, since 1886, True Temper, and ClosetMaid. CPP revenue was 41%, 47%, and 54% of Griffon’s consolidated revenue in 2023, 2022 and 2021, respectively.
CPP sells products globally through a portfolio of leading brands including AMES, since 1774, Hunter, since 1886, True Temper, and ClosetMaid. CPP revenue was 39%, 41% and 47% of Griffon’s consolidated revenue in 2024, 2023 and 2022, respectively.
Interest expense in 2023 of $101,445 increased 20% compared to 2022 interest expense of $84,379, primarily as a result of an increased effective interest rate related to the $800,000 seven year Term Loan B facility entered into in the prior year in connection with the Hunter acquisition, of which Griffon prepaid $25,000 and $300,000 aggregate principal amount in 2023 and 2022, respectively.
Interest expense in 2023 of $101,445 increased 20% compared to 2022 interest expense of $84,379, primarily as a result of an increased effective interest rate related to the $800,000 Term Loan B facility entered into in fiscal 2022 in connection with the Hunter acquisition, of which Griffon repaid $25,000 and $300,000 aggregate principal amount in 2023 and 2022, respectively.
Griffon believes it has sufficient liquidity available to invest in existing businesses and strategic acquisitions while managing its capital structure on both a short-term and long-term basis. As of September 30, 2023, the amount of cash, cash equivalents and marketable securities held by non-U.S. subsidiaries was $45,500.
Griffon believes it has sufficient liquidity available to invest in existing businesses and strategic acquisitions while managing its capital structure on both a short-term and long-term basis. As of September 30, 2024, the amount of cash, cash equivalents and marketable securities held by non-U.S. subsidiaries was $46,100.
Adjusting for the period Griffon did not own Hunter in the prior year, organic revenue decreased 8% to $2,609,417. Hunter contributed $75,766 of incremental revenue during the year-to-date period. Gross profit for 2023 was $948,821 compared to $936,886 in 2022. Gross profit as a percent of sales (“gross margin”) for 2023 and 2022 was 35.3% and 32.9%, respectively.
Adjusting for the period Griffon did not own Hunter in the prior year, organic revenue decreased 8% to $2,609,417. Hunter contributed $75,766 of incremental revenue during 2023. Gross profit for 2023 was $948,821 compared to $936,886 in 2022. The gross margin for 2023 and 2022 was 35.3% and 32.9%, respectively.
In 2023, Home Depot represented 12% of Griffon’s consolidated revenue, 9% of HBP's revenue and 15% of CPP's revenue. 42 No other customer exceeded 10% or more of consolidated revenue. Future operating results will continue to substantially depend on the success of Griffon’s largest customers and our relationships with them.
In 2024, Home Depot represented 11% of Griffon’s consolidated revenue, 8% of HBP's revenue and 15% of CPP's revenue. No other customer exceeded 10% or more of consolidated revenue. Future operating results will continue to substantially depend on the success of Griffon’s largest customers and our relationships with them.
Other income (expense) also includes rental income of $212 and $689 in 2023 and 2022, respectively. Additionally, it includes royalty income of $2,104 and $2,250 in 2023 and 2022, respectively. Griffon reported income before tax from continuing operations for 2023 of $112,682 compared to a loss before tax from continuing operations for 2022 of $270,879.
Other income (expense) also includes rental income of $212 and $689 and royalty income of $2,104 and $2,250 for the years ended September 30, 2023 and 2022, respectively. Griffon reported income before tax from continuing operations for 2023 of $112,682 compared to a loss before tax from continuing operations of $270,879 in 2022.
Indicators of impairment were present due to decreases in comparable company market multiples for the CPP reporting units and increased interest rates, and the related impact on weighted average cost of capital rates.
For the fiscal year ended September 30, 2022, indicators of impairment were present due to decreases in comparable company market multiples for the CPP reporting units and increased interest rates, and the related impact on weighted average cost of capital rates.
Griffon's primary sources of liquidity are cash flows generated from operations, cash on hand and our August 2028 five-year secured $500,000 revolving credit facility ("Revolver").
Griffon's primary sources of liquidity are cash flows generated from operations, cash on hand and our secured $500,000 revolving credit facility ("Revolver"), which matures in August 2028.
The following table provides a reconciliation of income (loss) from continuing operations to adjusted income from continuing operations and earnings (loss) per share from continuing operations to adjusted earnings per share from continuing operations: 33 GRIFFON CORPORATION AND SUBSIDIARIES RECONCILIATION OF INCOME (LOSS) FROM CONTINUING OPERATIONS TO ADJUSTED INCOME FROM CONTINUING OPERATIONS (Unaudited) For the Years Ended September 30, 2023 2022 2021 Income (loss) from continuing operations $ 77,617 $ (287,715) $ 70,302 Adjusting items: Restructuring charges (1) 92,468 16,782 21,418 Gain on sale of buildings (12,655) — — Debt extinguishment, net 437 4,529 — Acquisition costs — 9,303 — Strategic review - retention and other 20,225 9,683 — Special dividend ESOP charges 15,494 10,538 — Proxy expenses 2,685 6,952 — Fair value step-up of acquired inventory sold — 5,401 — Goodwill and intangible asset impairments 109,200 517,027 — Tax impact of above items (2) (57,925) (76,627) (5,287) Discrete and other certain tax provision 175 3,913 3,245 Adjusted income from continuing operations $ 247,721 $ 219,786 $ 89,678 Earnings (loss) per common share from continuing operations $ 1.42 $ (5.57) $ 1.32 Adjusting items, net of tax: Anti-dilutive share impact (3) — 0.24 — Restructuring charges (1) 1.26 0.23 0.30 Gain on sale of buildings (0.18) — — Debt extinguishment, net 0.01 0.06 — Acquisition costs — 0.15 — Strategic review - retention and other 0.28 0.13 — Special dividend ESOP charges 0.22 0.15 — Proxy expenses 0.04 0.10 — Fair value step-up of acquired inventory sold — 0.07 — Goodwill and intangible asset impairments 1.49 8.43 — Discrete and other certain tax (benefit) provision — 0.07 0.06 Adjusted earnings per share from continuing operations $ 4.54 4.07 $ 1.68 Weighted-average shares outstanding (in thousands) 52,111 51,672 53,369 Diluted weighted average shares outstanding (in thousands) (3) 54,612 53,966 53,369 Note: Due to rounding, the sum of earnings per common share and adjusting items, net of tax, may not equal adjusted earnings per common share.
The following table provides a reconciliation of income (loss) from continuing operations to adjusted income from continuing operations and earnings (loss) per share from continuing operations to adjusted earnings per share from continuing operations: 33 GRIFFON CORPORATION AND SUBSIDIARIES RECONCILIATION OF INCOME (LOSS) FROM CONTINUING OPERATIONS TO ADJUSTED INCOME FROM CONTINUING OPERATIONS (Unaudited) For the Years Ended September 30, 2024 2023 2022 Income (loss) from continuing operations $ 209,897 $ 77,617 $ (287,715) Adjusting items: Restructuring charges (1) 41,309 92,468 16,782 (Gain) loss on sale of buildings 61 (12,655) — Debt extinguishment, net 1,700 437 4,529 Acquisition costs 441 — 9,303 Strategic review - retention and other 10,594 20,225 9,683 Special dividend ESOP charges — 15,494 10,538 Proxy expenses — 2,685 6,952 Fair value step-up of acquired inventory sold 491 — 5,401 Goodwill and intangible asset impairments — 109,200 517,027 Tax impact of above items (2) (13,832) (57,925) (76,627) Discrete and other certain tax provisions 3,586 175 3,913 Adjusted income from continuing operations $ 254,247 $ 247,721 $ 219,786 Earnings (loss) per common share from continuing operations $ 4.23 $ 1.42 $ (5.57) Adjusting items, net of tax: Anti-dilutive share impact (3) — — 0.24 Restructuring charges (1) 0.62 1.26 0.23 (Gain) loss on sale of buildings — (0.18) — Debt extinguishment, net 0.03 0.01 0.06 Acquisition costs 0.01 — 0.15 Strategic review - retention and other 0.16 0.28 0.13 Special dividend ESOP charges — 0.22 0.15 Proxy expenses — 0.04 0.10 Fair value step-up of acquired inventory sold 0.01 — 0.07 Goodwill and intangible asset impairments — 1.49 8.43 Discrete and other certain tax provisions 0.07 — 0.07 Adjusted earnings per share from continuing operations $ 5.12 $ 4.54 $ 4.07 Weighted-average shares outstanding (in thousands) 47,573 52,111 51,672 Diluted weighted average shares outstanding (in thousands) (3) 49,668 54,612 53,966 Note: Due to rounding, the sum of earnings per common share and adjusting items, net of tax, may not equal adjusted earnings per common share.
The payoff amounts were GBP 7,525 ($9,543) and GBP 2,451 ($3,108), respectively. Upon maturity in July 2023, the GBP 5,000 revolver had no balance and was not renewed. Other debt primarily consists of a loan with the Pennsylvania Industrial Development Authority, with the balance consisting of finance leases.
The payoff amounts were GBP 41 7,525 ($9,543) and GBP 2,451 ($3,108), respectively. Upon maturity in July 2023, the GBP 5,000 revolver had no balance and was not renewed. In February 2024, Griffon repaid in full a loan with the Pennsylvania Industrial Development Authority. The balance in other long-term debt consists primarily of finance leases.
Griffon's debt requirements include principal on our outstanding debt, most notably our Senior Notes totaling $974,775 payable in 2028 and related annual interest payments of approximately $56,050, a Term Loan B facility maturing in 2029 with an outstanding balance of $463,000 on September 30, 2023, and the Revolver, which matures in 2028 and has an outstanding balance of $50,445.
Capital Resource Requirements Griffon's debt requirements include principal on our outstanding debt, most notably our Senior Notes totaling $974,775 payable in 2028 and related annual interest payments of approximately $56,050, a Term Loan B facility maturing in 2029 with an outstanding balance of $457,000 on September 30, 2024, and the Revolver, which matures in 2028 and has an outstanding balance of $107,500.
The 2028 Senior Notes were registered under the Securities Act of 1933, as amended (the "Securities Act") via an exchange offer. The fair value of the 2028 Senior Notes approximated $882,171 on September 30, 2023 based upon quoted market prices (level 1 inputs). At September 30, 2023, $8,920 of underwriting fees and other expenses incurred remained to be amortized.
The 2028 Senior Notes were registered under the Securities Act of 1933, as amended (the "Securities Act") via an exchange offer. The fair value of the 2028 Senior Notes approximated $957,716 on September 30, 2024 based upon quoted market prices (level 1 inputs). At September 30, 2024, $6,900 of underwriting fees and other expenses incurred remained to be amortized.
During 2023 and 2022, Griffon prepaid $25,000 and $300,000, respectively, of the aggregate principal amount of the Term Loan B, which permanently reduced the outstanding balance, and recognized a $437 and $6,296 charge on the prepayment of debt in 2023 and 2022, respectively.
Since that time, during 2023 and 2022, Griffon prepaid $25,000 and $300,000, respectively, aggregate principal amount of the Term Loan B, which permanently reduced the outstanding balance. In connection with the prepayment of the Term Loan B, Griffon recognized charges of $437 and $6,296 on the prepayment of debt in 2023 and 2022, respectively.
(1) For the year ended September 30, 2023, restructuring charges relate to the CPP global sourcing expansion of which $82,028 is included in Cost of goods and services and $10,440 is included in SG&A.
(1) For the years ended September 30, 2024 and 2023, restructuring charges relate to the CPP global sourcing expansion of which $35,806 and $82,028, respectively, is included in Cost of goods and services and $5,503 and 10,440, respectively, is included in SG&A.
See Note 12, Long-Term Debt for further details. On June 27, 2022, we completed the sale of our Defense Electronics ("DE") segment, which consisted of our Telephonics Corporation ("Telephonics") subsidiary, for $330,000 in cash, excluding customary post-closing adjustments.
On June 27, 2022, we completed the sale of our Defense Electronics ("DE") segment, which consisted of our Telephonics Corporation ("Telephonics") subsidiary, for $330,000 in cash, excluding customary post-closing adjustments.
Under the authorized share repurchase program, the Company may, from time to time, purchase shares of its common stock in the open market, including pursuant to a 10b5-1 plan, pursuant to an accelerated share repurchase program or issuer tender offer, or in privately negotiated transactions.
As of September 30, 2024, $32,693 remained under these Board authorized repurchase programs. Under the authorized share repurchase program, the Company may, from time to time, purchase shares of its common stock in the open market, including pursuant to a 10b5-1 plan, pursuant to an accelerated share repurchase program or issuer tender offer, or in privately negotiated transactions.
The receivable purchase facility accrues interest at BBSY (Bank Bill Swap Rate) plus 1.25% per annum (5.33% at September 30, 2023). At September 30, 2023, there was no balance outstanding under the receivable purchase facility with AUD 30,000 ($19,188 as of September 30, 2023) available.
The receivable purchase facility accrues interest at Bank Bill Swap Rate plus 1.25% per annum (5.55% at September 30, 2024). At September 30, 2024, there was no balance outstanding under the receivable purchase facility with AUD $30,000 ($20,619 as of September 30, 2024) available.
The amendment also modified certain other provisions of the Credit Agreement, including increasing the letter of credit sub-facility from $100,000 to $125,000 and increasing the customary accordion feature from a minimum of $375,000 to a minimum of $500,000. Additionally, the Revolver includes a multi-currency sub-facility of $200,000. Borrowings under the Revolver may be repaid and re-borrowed at any time.
The amendment also modified certain other provisions of the Credit Agreement, including increasing the letter of credit sub-facility under the Revolver from $100,000 to $125,000 and increasing the customary accordion feature from a minimum of $375,000 to a minimum of $500,000. The Revolver also includes a multi-currency sub-facility of $200,000.
An estimate is considered to be critical if it is subjective and if changes in the estimate using different assumptions would result in a material impact on Griffon’s financial position or results of operations. The most significant areas involving management estimates are described below.
An estimate is considered to be critical if it is subjective and if changes in the estimate using different assumptions would result in a material impact on Griffon’s financial position or results of operations.
This initiative resulted in cash savings of approximately $25,000. 37 Unallocated Amounts For 2023, unallocated amounts, excluding depreciation, consisted primarily of corporate overhead costs, totaled $55,887 compared to $53,888 in 2022, with the increase primarily due to stock compensation expense.
For 2023, unallocated amounts, excluding depreciation, consisted primarily of corporate overhead costs, totaled $55,887 compared to $53,888 in 2022, with the increase primarily due to stock compensation expense.
The Term Loan B facility is subject to the same affirmative and negative covenants that apply to the Revolver, but is not subject to any financial maintenance covenants. Term Loan B borrowings are secured by the same collateral as the Revolver.
The Term Loan B facility is subject to the same affirmative and negative covenants that apply to the Revolver (as described below), but is not subject to any financial maintenance covenants. Term Loan B borrowings are secured by the same collateral that secures borrowings under the Revolver, on an equal and ratable basis.
Both the Revolver and Term Loan B borrowings under the Credit Agreement are guaranteed by Griffon’s material domestic subsidiaries and are secured, on a first priority basis, by substantially all domestic assets of the Company and the guarantors, and a pledge of not greater than 65% of the equity interest in Griffon’s material, first-tier foreign subsidiaries.
Both the Revolver and Term Loan B borrowings under the Credit Agreement are guaranteed by Griffon’s material domestic subsidiaries and are secured, on a first priority basis, by substantially all domestic assets of the Company and the guarantors.
Any changes in key assumptions or management judgment with respect to a reporting unit or its prospects, which may result from a decline in Griffon’s stock price, a change in market conditions, market trends, interest rates or other factors outside of Griffon’s control, or significant underperformance relative to historical or projected future operating results, could result in a significantly different estimate of the fair value of Griffon’s reporting units, which could result in an impairment charge in the future.
Any changes in key assumptions or management judgment with respect to a reporting unit or its prospects, which may result from a decline in Griffon’s stock price, a change in market conditions, market trends, interest rates or other factors outside of Griffon’s control, or significant underperformance relative to historical or projected future operating results, could result in a significantly different estimate of the fair value of Griffon’s reporting units, which could result in an impairment charge in the future. 44 Income Taxes Griffon’s effective tax rate is based on income, statutory tax rates and tax planning opportunities available in the various jurisdictions in which Griffon operates.
For the fiscal year ended September 30, 2022, we performed a qualitative assessment of the HBP reporting unit and determined that indicators that the fair value was less than the carrying amount were not present.
For the HBP reporting unit, we performed a qualitative assessment and determined that indicators that fair value was less than the carrying amount were not present in fiscal years 2024, 2023 and 2022.
Griffon's SOFR loans accrue interest at Term SOFR plus a credit adjustment spread and a margin of 2.00% (7.42% at September 30, 2023), SONIA loans accrue interest at SONIA Base Rate plus a credit adjustment spread and a margin of 2.00% (7.22% at September 30, 2023) and base rate loans accrue interest at prime rate plus a margin of 1.00% (9.50% at September 30, 2023).
Griffon's SOFR loans accrue interest at Term SOFR plus a credit adjustment spread and a margin of 2.00% (6.95% at September 30, 2024); SONIA loans accrue interest at SONIA Base Rate plus a credit adjustment spread and a margin of 2.00% (6.98% at September 30, 2024); and base rate loans accrue interest at prime rate plus a margin of 1.00% (9.00% at September 30, 2024).
Griffon's SOFR loans accrue interest at Term SOFR plus a credit adjustment spread and a margin of 2.00% (7.42% at September 30, 2023), SONIA loans accrue interest at SONIA Base Rate plus a credit adjustment spread and a margin of 2.00% (7.22% at September 30, 2023), and base rate loans accrue interest at prime rate plus a margin of 1.00% (9.50% at September 30, 2023).
Griffon's SOFR loans accrue interest at Term SOFR plus a credit adjustment spread and a margin of 2.00% (6.95% at September 30, 2024); SONIA loans accrue interest at SONIA Base Rate plus a credit adjustment spread and a margin of 2.00% (6.98% at September 30, 2024); and base rate loans accrue interest at prime rate plus a margin of 1.00% (9.00% at September 30, 2024).
In connection with the preparation of our financial statements for the fiscal year ended September 30, 2022, Griffon performed its annual impairment testing of its goodwill and indefinite lived intangibles.
In connection with the preparation of our financial statements for the fiscal years ended September 30, 2023 and 2022, Griffon performed its annual impairment testing of its goodwill and indefinite-lived intangibles. For the fiscal year ended September 30, 2023, Griffon performed a quantitative assessment of the CPP reporting units and indefinite-lived intangible assets.
On August 1, 2023, Griffon amended and restated its revolving credit agreement (as amended, "Credit Agreement"). The amendment increased the maximum borrowing availability on its revolving credit facility from $400,000 to $500,000 (the "Revolver") and extended the maturity date of the Revolver from March 22, 2025 to August 1, 2028.
On August 1, 2023, Griffon amended and restated the Credit Agreement to increase the maximum borrowing availability under the Revolver from $400,000 to $500,000 and extend the maturity date of the Revolver from March 22, 2025 to August 1, 2028.
Excluding these items from both reporting periods, 2022 income from continuing operations would have been $219,786, or $4.07 per share compared to $89,678, or $1.68 per share, in 2021.
Excluding these items from both reporting periods, 2023 income from continuing operations would have been $247,721, or $4.54 per share compared to $219,786, or $4.07 per share, in 2022.
Interest is payable on borrowings at either a Secured Overnight Financing Rate ("SOFR"), Sterling Overnight Index Average ("SONIA") or base rate benchmark rate, plus an applicable margin, which adjusts based on financial performance.
Borrowings under the Revolver may be repaid and re-borrowed at any time. Interest is payable on borrowings at either a Secured Overnight Financing Rate ("SOFR"), Sterling Overnight Index Average ("SONIA") or base rate benchmark rate, plus an applicable margin, which adjusts based on financial performance.
On November 14, 2023, the Board of Directors declared a cash dividend of $0.15 per share, payable on December 14, 2023, to shareholders of record as of the close of business on November 28, 2023.
On November 12, 2024, the Board of Directors declared a cash dividend of $0.18 per share, payable on December 18, 2024 to shareholders of record as of the close of business on November 25, 2024.
Griffon evaluates performance based on adjusted income from continuing operations and the related adjusted earnings per common share, which excludes non-cash impairment charges, restructuring charges, debt extinguishment, acquisition related expenses and discrete and certain other tax items, as well other items that may affect comparability, as applicable. Griffon believes this information is useful to investors for the same reason.
Griffon evaluates performance based on adjusted income from continuing operations and the related adjusted earnings per common share, which are non-GAAP measures that exclude non-cash impairment charges, restructuring charges, debt extinguishment, acquisition related expenses and discrete and certain other tax items, as well other items that may affect comparability, as applicable.
The Term Loan B facility requires nominal quarterly principal payments of $2,000, potential additional annual principal payments based on a percentage of excess cash flow and secured leverage thresholds starting with the fiscal year ended September 30, 2023; and a final balloon payment due at maturity.
The Term Loan B facility continues to require nominal quarterly principal payments of $2,000, potential additional annual principal payments based on a percentage of excess cash flow and certain secured leverage thresholds; and a final balloon payment due at maturity.
During the fiscal year ended September 30, 2023, Griffon performed annual and interim impairment testing of its goodwill and indefinite-lived intangible assets. Griffon performed a quantitative assessment of the CPP reporting units and indefinite-lived intangible assets. The assessments did not result in an impairment to goodwill.
In connection with the preparation of our financial statements for the fiscal years ended September 30, 2024 and 2023, Griffon performed its annual impairment testing of its goodwill and indefinite lived intangibles. Griffon performed a quantitative assessment of the CPP reporting units and indefinite-lived intangible assets. The assessments in both fiscal years did not result in an impairment to goodwill.
During the fiscal year ended September 30, 2023, the Company generated $431,765 of net cash from continuing operating activities and, as of September 30, 2023, the Company had $436,593 available, subject to certain loan covenants, for borrowing under the Revolver. The Company had cash and cash equivalents of $102,889 at September 30, 2023.
During the fiscal year ended September 30, 2024, the Company generated $380,042 of net cash from continuing operating activities and, as of September 30, 2024, the Company had $379,310 available, subject to certain loan covenants, for borrowing under the Revolver.
Debt At September 30, 2023 and 2022, Griffon had debt, net of cash and equivalents, as follows: Cash and Equivalents and Debt At September 30, At September 30, (in thousands) 2023 2022 Cash and equivalents $ 102,889 $ 120,184 Notes payables and current portion of long-term debt $ 9,625 $ 12,653 Long-term debt, net of current maturities 1,459,904 1,560,998 Debt discount and issuance costs 20,283 21,909 Total debt 1,489,812 1,595,560 Debt, net of cash and equivalents $ 1,386,923 $ 1,475,376 During 2020, Griffon issued, at par $1,000,000 of 5.75% Senior Notes due 2028 (the "2028 Senior Notes").
Debt At September 30, 2024 and 2023, Griffon had debt, net of cash and equivalents, as follows: Cash and Equivalents and Debt At September 30, At September 30, (in thousands) 2024 2023 Cash and equivalents $ 114,438 $ 102,889 Notes payables and current portion of long-term debt $ 8,155 $ 9,625 Long-term debt, net of current maturities 1,515,897 1,459,904 Debt discount and issuance costs 15,633 20,283 Total debt 1,539,685 1,489,812 Debt, net of cash and equivalents $ 1,425,247 $ 1,386,923 During 2020, Griffon issued, at par, $1,000,000 of 5.75% Senior Notes due 2028 (the "2028 Senior Notes").
Deferred tax assets and liabilities are recognized based on the differences between the financial statement carrying amounts and the tax basis of assets and liabilities. Deferred tax assets represent items to be used as a tax deduction or credit in future tax returns for which a tax benefit has been recorded in the income statement.
Deferred tax assets represent items to be used as a tax deduction or credit in future tax returns for which a tax benefit has been recorded in the income statement.
On January 24, 2022, Griffon amended and restated its Credit Agreement to provide for a new $800,000 Term Loan B facility, due January 24, 2029, in addition to the Revolver, and replaced LIBOR with SOFR.
On January 24, 2022, Griffon amended and restated its Credit Agreement (the "Credit Agreement") to provide for a new $800,000 Term Loan B facility, due January 24, 2029, in addition to the revolving credit facility (the "Revolver") provided for under the Credit Agreement. The Term Loan B facility was issued at 99.75% of par value.
Excluding these items from both reporting periods, 2023 income from continuing operations would have been $247,721, or $4.54 per share compared to $219,786, or $4.07 per share, in 2022. 2022 Compared to 2021 Revenue for the year ended September 30, 2022 of $2,848,488 compared to $2,270,626 for the year ended September 30, 2021 increased 25% resulting from increased revenue at HBP and CPP of 45% and 9%, respectively.
Excluding these items from both reporting periods, 2024 income from continuing operations would have been $254,247, or $5.12 per share compared to $247,721, or $4.54 per share, in 2023. 2023 Compared to 2022 Revenue for the year ended September 30, 2023 of $2,685,183 decreased 6% compared to $2,848,488 for the year ended September 30, 2022, resulting from decreased revenue of 18% at CPP, partially offset by increased revenue of 5% at HBP.
Summarized Statements of Operations and Comprehensive Income (Loss) For the Year Ended For the Year Ended September 30, 2023 September 30, 2022 Parent Company Guarantor Companies Parent Company Guarantor Companies Net sales $ — $ 2,190,636 $ — $ 2,301,215 Gross profit $ — $ 800,477 $ — $ 752,982 Income (loss) from operations $ (42,948) $ 228,346 $ (43,492) $ (127,982) Equity in earnings of Guarantor subsidiaries $ 149,981 $ — $ (184,618) $ — Net income (loss) $ (85,770) $ 149,981 $ (74,423) $ (184,618) 43 Summarized Balance Sheet Information For the Year Ended For the Year Ended September 30, 2023 September 30, 2022 Parent Company Guarantor Companies Parent Company Guarantor Companies Current assets $ 51,701 $ 707,929 $ 49,238 $ 915,329 Non-current assets 13,954 1,317,575 15,571 1,393,864 Total assets $ 65,655 $ 2,025,504 $ 64,809 $ 2,309,193 Current liabilities $ 76,460 $ 226,532 $ 78,635 $ 275,165 Long-term debt 1,459,952 — 1,538,235 12,886 Other liabilities (9,994) 271,985 4,331 322,224 Total liabilities $ 1,526,418 $ 498,517 $ 1,621,201 $ 610,275 CRITICAL ACCOUNTING POLICIES AND ESTIMATES The preparation of Griffon’s consolidated financial statements in conformity with accounting principles generally accepted in the U.S. of America (“GAAP”) requires the use of estimates, assumptions, judgments and subjective interpretations of accounting principles that have an impact on assets, liabilities, revenue and expenses.
Summarized Statements of Operations and Comprehensive Income (Loss) For the Year Ended For the Year Ended September 30, 2024 September 30, 2023 Parent Company Guarantor Companies Parent Company Guarantor Companies Net sales $ — $ 2,147,788 $ — $ 2,190,636 Gross profit $ — $ 871,822 $ — $ 800,477 Income (loss) from operations $ (25,982) $ 408,181 $ (42,948) $ 228,346 Equity in earnings of Guarantor subsidiaries $ 283,959 $ — $ 149,981 $ — Net income (loss) $ (74,331) $ 283,959 $ (85,770) $ 149,981 Summarized Balance Sheet Information For the Year Ended For the Year Ended September 30, 2024 September 30, 2023 Parent Company Guarantor Companies Parent Company Guarantor Companies Current assets $ 58,194 $ 635,767 $ 51,701 $ 707,929 Non-current assets 12,558 1,307,839 13,954 1,317,575 Total assets $ 70,752 $ 1,943,606 $ 65,655 $ 2,025,504 Current liabilities $ 69,556 $ 213,234 $ 76,460 $ 226,532 Long-term debt 1,515,669 222 1,459,952 — Other liabilities 23,033 237,432 (9,994) 271,985 Total liabilities $ 1,608,258 $ 450,888 $ 1,526,418 $ 498,517 CRITICAL ACCOUNTING POLICIES AND ESTIMATES The preparation of Griffon’s consolidated financial statements in conformity with accounting principles generally accepted in the U.S. of America (“GAAP”) requires the use of estimates, assumptions, judgments and subjective interpretations of accounting principles that have an impact on assets, liabilities, revenue and expenses.
Segment depreciation and amortization increased $2,249 compared to the prior year period, primarily due to depreciation and amortization on assets placed in service, including a full period of Hunter assets, partially offset by fully depreciated assets and the write-down of certain fixed assets at several manufacturing facilities in connection with CPP's restructuring activities.
Segment depreciation and amortization decreased $5,014 compared to the prior year period, primarily due to fully depreciated assets and the write-down of certain fixed assets at several manufacturing facilities in connection with restructuring activities.
At September 30, 2023, under the Credit Agreement, there were $50,445 in outstanding borrowings; outstanding standby letters of credit were $12,962; and $436,593 was available, subject to certain loan covenants, for borrowing at that date.
At September 30, 2024, under the Credit Agreement, there were $107,500 in outstanding borrowings on the Revolver; outstanding standby letters of credit were $13,190; and $379,310 was available, subject to certain loan covenants, for borrowing at that date.
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.
Griffon oversees the operations of its subsidiaries, allocates resources among them and manages their capital structures. Griffon provides direction and assistance to its subsidiaries with acquisition and growth opportunities as well as divestitures. As long-term investors, we intend to continue to grow and strengthen our existing businesses, and to diversify further through investments in our businesses and acquisitions.
Cash used in financing activities from continuing operations was $400,162 in 2023 compared to cash provided by financing activities of $393,345 in 2022.
Cash used in financing activities from continuing operations was $298,748 in 2024 compared to $400,162 in 2023.
On January 24, 2022, Griffon acquired Hunter Fan Company (“Hunter”), a market leader in residential ceiling, commercial, and industrial fans, from MidOcean Partners (“MidOcean”) for a contractual purchase price of $845,000.
Accordingly, all references made to results and information in this Annual Report on Form 10-K are to Griffon's continuing operations, unless noted otherwise. On January 24, 2022, Griffon acquired Hunter Fan Company (“Hunter”), a market leader in residential ceiling, commercial, and industrial fans, from MidOcean Partners (“MidOcean”) for a contractual purchase price of $845,000.
Accordingly, all references made to results and information in this Annual Report on Form 10-K are to Griffon's continuing operations, unless noted otherwise.
As a result, Griffon classified the results of operations of the Telephonics business as a discontinued operation in the Consolidated Statements of Operations in fiscal 2022. Accordingly, all references made to results and information in this Annual Report on Form 10-K are to Griffon's continuing operations unless noted otherwise.
Implementation of this strategy over the duration of the project will result in charges of $120,000 to $130,000, including $50,000 to $55,000 of cash charges for employee retention and severance, operational transition, and facility and lease exit costs, and $70,000 to $75,000 of non-cash charges primarily related to asset write-downs.
Implementation of this strategy over the duration of the project resulted in charges of $133,777, which included $51,082 of cash charges for employee retention and severance, operational transition, and facility and lease exit costs, and $82,695 of non-cash charges primarily related to asset write-downs.
Residential and commercial sectional garage doors are sold through professional dealers and leading home center retail chains throughout North America under the brands Clopay, Ideal, and Holmes. Rolling steel door and grille products designed for commercial, industrial, institutional, and retail use are sold under the Cornell and Cookson brands.
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.
At September 30, 2023 and 2022, Griffon’s liabilities for Installations Services and other discontinued operations primarily related to insurance claims, income taxes, product liability, warranty and environmental reserves, and totaled $7,202 and $8,072, respectively. See Note 8, Discontinued Operations.
At September 30, 2024 and 2023, Griffon's discontinued assets and liabilities included the Company's obligation of $7,768 and $11,798, respectively, primarily related to insurance claims, income taxes, product liability, warranty claims and environmental reserves. Griffon's assets for discontinued operations primarily relate to insurance claims. See Note 8, Discontinued Operations.
These actions will be essential to CPP achieving 15% EBITDA margins, while enhancing free cash flow through improved working capital and significantly lower capital expenditures. For additional information, see the CPP segment discussion.
These actions will be essential for CPP to achieve its target of 15% EBITDA margin while enhancing free cash flow through improved working capital and significantly reduced capital expenditures.
(“Garant”), a Griffon wholly owned subsidiary, entered into a CAD 15,000 ($11,117 as of September 30, 2023) revolving credit facility. Effective in December 2022, the facility was amended to replace LIBOR (USD) with the Canadian Dollar Offer Rate ("CDOR").
("Garant"), a Griffon wholly owned subsidiary, entered into a CAD 15,000 revolving credit facility. Effective in December 2023, the facility was amended to replace the Canadian Dollar Offer Rate ("CDOR") with the Canadian Overnight Repo Rate Average ("CORRA"). The facility accrues interest at CORRA plus 1.3% per annum (5.46% as of September 30, 2024).
Cash Flows from Continuing Operations Years Ended September 30, (in thousands) 2023 2022 Net Cash Flows Provided By (Used In): Operating activities $ 431,765 $ 59,240 Investing activities (45,211) (583,227) Financing activities (400,162) 393,345 Cash provided by operating activities from continuing operations for 2023 was $431,765 compared to $59,240 in 2022, an increase of $372,525.
Cash Flows from Continuing Operations Years Ended September 30, (in thousands) 2024 2023 Net Cash Flows Provided By (Used In): Operating activities $ 380,042 $ 431,765 Investing activities (64,999) (45,211) Financing activities (298,748) (400,162) Cash provided by operating activities from continuing operations for 2024 was $380,042 compared to $431,765 in 2023, a decrease of $51,723.
We determine the fair value of indefinite-lived intangible assets by using the relief from royalty method, which estimates the value of a trademark by discounting to present value the hypothetical royalty payments that are saved by owning the asset rather than licensing it. 44 During the fiscal year ended September 30, 2023, the Company performed a qualitative assessment of the HBP reporting unit goodwill and determined that indicators that the fair value was less than the carrying amount were not present.
We determine the fair value of indefinite-lived intangible assets by using the relief from royalty method, which estimates the value of a trademark by discounting to present value the hypothetical royalty payments that are saved by owning the asset rather than licensing it.
Home and Building Products For the Years Ended September 30, 2023 2022 2021 Residential repair and remodel $ 757,088 $ 736,525 $ 516,995 Residential new construction 131,305 140,291 116,528 Residential 888,393 876,816 633,523 Commercial 700,112 630,066 407,585 Total Revenue $ 1,588,505 $ 1,506,882 $ 1,041,108 Adjusted EBITDA $ 510,876 32.2 % $ 412,738 27.4 % $ 181,015 17.4 % Depreciation and amortization $ 15,066 $ 16,539 $ 17,370 2023 Compared to 2022 HBP revenue in 2023 increased $81,623, or 5%, compared to 2022, due to favorable commercial and residential pricing and mix of 8%, partially offset by a decline in volume of 3%.
Home and Building Products For the Years Ended September 30, 2024 2023 2022 Residential repair and remodel $ 769,691 $ 757,088 $ 736,525 Residential new construction 134,546 131,305 140,291 Residential 904,237 888,393 876,816 Commercial 684,388 700,112 630,066 Total Revenue $ 1,588,625 $ 1,588,505 $ 1,506,882 Adjusted EBITDA $ 501,001 31.5 % $ 510,876 32.2 % $ 412,738 27.4 % Depreciation and amortization $ 15,349 $ 15,066 $ 16,539 2024 Compared to 2023 HBP revenue in 2024 was consistent with the prior year reflecting increased residential volume offset by reduced commercial volume.
Indicators of impairment were not present for the HBP indefinite-lived intangibles during 2023. A 100-basis point increase in the discount rate would have resulted in an additional impairment charge to our indefinite-lived intangible assets of $4,600 and a goodwill impairment of $19,400.
A 100-basis point increase in the discount rate would have resulted in an additional impairment charge to our indefinite-lived intangible assets of $16,200 and no additional impairment to goodwill for the year ended September 30, 2024.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

1 edited+1 added−0 removed3 unchanged
Biggest changeIn addition, certain other of Griffon’s credit facilities have a LIBOR and BBSY (Bank Bill Swap Rate) based variable interest rate. Due to the current and expected level of borrowings under these facilities, a 100 basis point change in SONIA, SOFR, BBSY, or LIBOR would not have a material impact on Griffon’s results of operations or liquidity.
Biggest changeDue to the current and expected level of borrowings under these facilities, a 100 basis point change in SONIA, SOFR, CORRA or BBSY would not have a material impact on Griffon’s results of operations or liquidity.
Added
In addition, certain other of Griffon’s credit facilities have a Canadian Overnight Repo Rate Average rate (CORRA) and Bank Bill Swap rate (BBSY) based variable interest rate.

Other GFF 10-K year-over-year comparisons