CONSOLIDATING GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION

Griffon’s Senior Notes are fully and unconditionally guaranteed, jointly and severally, on a senior secured basis by the domestic assets of Clopay Building Products Company, Inc., Clopay Plastic Products Company, Inc., Telephonics Corporation, The AMES Companies, Inc., AMES Southern, Inc. and Clopay Ames True Temper Holding, Corp., all of which are indirectly 100% owned by Griffon. In accordance with Rule 3-10 of Regulation S-X promulgated under the Securities Act of 1933, presented below are condensed consolidating financial information as of December 31, 2014 and September 30, 2014 and for the three months ended December 31, 2014 and 2013. The financial information may not necessarily be indicative of results of operations or financial position had the guarantor companies or non-guarantor companies 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 indenture relating to the Senior Notes (the “Indenture”) contains terms providing that, under certain limited circumstances, a guarantor will be released from its obligations to guarantee the Senior Notes. These circumstances include (i) a sale of at least a majority of the stock, or all or substantially all the assets, of the subsidiary guarantor as permitted by the Indenture; (ii) a public equity offering of a subsidiary guarantor that qualifies as a “Minority Business” as defined in the Indenture (generally, a business the EBITDA of which constitutes less than 50% of the segment adjusted EBITDA of the Company for the most recently ended four fiscal quarters), and that meets certain other specified conditions as set forth in the Indenture; (iii) the designation of a guarantor as an “unrestricted subsidiary” as defined in the Indenture, in compliance with the terms of the Indenture; (iv) Griffon exercising its right to defease the Senior Notes, or to otherwise discharge its obligations under the Indenture, in each case in accordance with the terms of the Indenture; and (v) upon obtaining the requisite consent of the holders of the Senior Notes.

CONDENSED CONSOLIDATING BALANCE SHEETS

At December 31, 2014



	Parent Company		Guarantor Companies		Non-Guarantor Companies		Elimination			Consolidation
CURRENT ASSETS
Cash and equivalents	$	3,288	$	6,519	$	36,759	$	—		$	46,566
Accounts receivable, net of allowances	—		206,253		65,467		(34,543		)	237,177
Contract costs and recognized income not yet billed, net of progress payments	—		101,956		509		—			102,465
Inventories, net	—		255,361		64,060		—			319,421
Prepaid and other current assets	2,673		26,616		18,151		10,907			58,347
Assets of discontinued operations	—		—		1,622		—			1,622
Total Current Assets	5,961		596,705		186,568		(23,636		)	765,598
PROPERTY, PLANT AND EQUIPMENT, net	1,243		270,853		95,086		—			367,182
GOODWILL	—		284,875		82,216		—			367,091
INTANGIBLE ASSETS, net	—		155,659		72,175		—			227,834
INTERCOMPANY RECEIVABLE	543,487		953,581		185,836		(1,682,904		)	—
EQUITY INVESTMENTS IN SUBSIDIARIES	767,088		660,465		1,771,532		(3,199,085		)	—
OTHER ASSETS	40,910		53,921		6,231		(75,213		)	25,849
ASSETS OF DISCONTINUED OPERATIONS	—		—		2,109		—			2,109
Total Assets	$	1,358,689	$	2,976,059	$	2,401,753	$	(4,980,838	)	$	1,755,663
CURRENT LIABILITIES
Notes payable and current portion of long-term debt	$	2,202	$	1,145	$	3,268	$	—		$	6,615
Accounts payable and accrued liabilities	31,281		204,058		77,422		(28,510		)	284,251
Liabilities of discontinued operations	—		—		3,170		—			3,170
Total Current Liabilities	33,483		205,203		83,860		(28,510		)	294,036

LONG-TERM DEBT, net of debt discounts	752,572		7,372		42,911		—			802,855
INTERCOMPANY PAYABLES	21,700		905,636		707,633		(1,634,969		)	—
OTHER LIABILITIES	39,069		150,096		25,745		(71,545		)	143,365
LIABILITIES OF DISCONTINUED OPERATIONS	—		—		3,542		—			3,542
Total Liabilities	846,824		1,268,307		863,691		(1,735,024		)	1,243,798
SHAREHOLDERS’ EQUITY	511,865		1,707,752		1,538,062		(3,245,814		)	511,865
Total Liabilities and Shareholders’ Equity	$	1,358,689	$	2,976,059	$	2,401,753	$	(4,980,838	)	$	1,755,663

CONDENSED CONSOLIDATING BALANCE SHEETS

At September 30, 2014



	Parent Company		Guarantor Companies		Non-Guarantor Companies		Elimination			Consolidation
CURRENT ASSETS
Cash and equivalents	$	6,813	$	31,522	$	54,070	$	—		$	92,405
Accounts receivable, net of allowances	—		213,922		77,218		(32,704		)	258,436
Contract costs and recognized income not yet billed, net of progress payments	—		109,804		126		—			109,930
Inventories, net	—		219,326		70,537		272			290,135
Prepaid and other current assets	4,366		26,319		17,101		14,783			62,569
Assets of discontinued operations	—		—		1,624		—			1,624
Total Current Assets	11,179		600,893		220,676		(17,649		)	815,099

PROPERTY, PLANT AND EQUIPMENT, net	1,327		270,519		98,643		76			370,565
GOODWILL	—		284,875		86,971		—			371,846
INTANGIBLE ASSETS, net	—		156,772		76,851		—			233,623
INTERCOMPANY RECEIVABLE	540,080		892,433		213,733		(1,646,246		)	—
EQUITY INVESTMENTS IN SUBSIDIARIES	780,600		662,403		1,782,406		(3,225,409		)	—
OTHER ASSETS	41,680		53,896		6,739		(75,213		)	27,102
ASSETS OF DISCONTINUED OPERATIONS	—		—		2,126		—			2,126
Total Assets	$	1,374,866	$	2,921,791	$	2,488,145	$	(4,964,441	)	$	1,820,361
CURRENT LIABILITIES
Notes payable and current portion of long-term debt	$	2,202	$	1,144	$	4,540	$	—		$	7,886
Accounts payable and accrued liabilities	25,703		227,419		87,684		(20,811		)	319,995
Liabilities of discontinued operations	—		—		3,282		—			3,282
Total Current Liabilities	27,905		228,563		95,506		(20,811		)	331,163
LONG-TERM DEBT, net of debt discounts	752,160		7,806		45,135		—			805,101
INTERCOMPANY PAYABLES	21,573		815,094		762,192		(1,598,859		)	—
OTHER LIABILITIES	41,201		151,674		26,949		(71,584		)	148,240
LIABILITIES OF DISCONTINUED OPERATIONS	—		—		3,830		—			3,830
Total Liabilities	842,839		1,203,137		933,612		(1,691,254		)	1,288,334
SHAREHOLDERS’ EQUITY	532,027		1,718,654		1,554,533		(3,273,187		)	532,027
Total Liabilities and Shareholders’ Equity	$	1,374,866	$	2,921,791	$	2,488,145	$	(4,964,441	)	$	1,820,361

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

For the Three Months Ended December 31, 2014



($ in thousands)	Parent Company			Guarantor Companies			Non-Guarantor Companies			Elimination			Consolidation
Revenue	$	—		$	378,114		$	138,881		$	(14,835	)	$	502,160
Cost of goods and services	—			289,370			108,274			(13,473		)	384,171
Gross profit	—			88,744			30,607			(1,362		)	117,989
Selling, general and administrative expenses	5,520			69,557			20,099			(1,280		)	93,896
Total operating expenses	5,520			69,557			20,099			(1,280		)	93,896

Income (loss) from operations	(5,520		)	19,187			10,508			(82		)	24,093

Other income (expense)
Interest income (expense), net	(1,904		)	(7,427		)	(2,306		)	—			(11,637		)
Other, net	46			1,295			(1,874		)	82			(451		)
Total other income (expense)	(1,858		)	(6,132		)	(4,180		)	82			(12,088		)
Income (loss) before taxes	(7,378		)	13,055			6,328			—			12,005
Provision (benefit) for income taxes	(3,481		)	7,737			278			—			4,534
Income (loss) before equity in net income of subsidiaries	(3,897		)	5,318			6,050			—			7,471
Equity in net income (loss) of subsidiaries	11,368			6,036			5,318			(22,722		)	—
Net income (loss)	$	7,471		$	11,354		$	11,368		$	(22,722	)	$	7,471

Net Income (loss)	$	7,471		$	11,354		$	11,368		$	(22,722	)	$	7,471
Other comprehensive income (loss), net of taxes	(16,183		)	(4,580		)	(10,831		)	15,411			(16,183		)
Comprehensive income (loss)	$	(8,712	)	$	6,774		$	537		$	(7,311	)	$	(8,712	)

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

For the Three Months Ended December 31, 2013



($ in thousands)	Parent Company			Guarantor Companies			Non-Guarantor Companies			Elimination			Consolidation
Revenue	$	—		$	344,644		$	121,752		$	(12,938	)	$	453,458
Cost of goods and services	—			259,983			99,394			(11,422		)	347,955
Gross profit	—			84,661			22,358			(1,516		)	105,503
Selling, general and administrative expenses	6,331			68,381			14,574			(1,606		)	87,680
Restructuring and other related charges	—			764			78			—			842
Total operating expenses	6,331			69,145			14,652			(1,606		)	88,522
Income (loss) from operations	(6,331		)	15,516			7,706			90			16,981
Other income (expense)
Interest income (expense), net	(3,604		)	(7,250		)	(2,247		)	—			(13,101		)
Other, net	112			2,057			(1,173		)	(90		)	906
Total other income (expense)	(3,492		)	(5,193		)	(3,420		)	(90		)	(12,195		)
Income (loss) before taxes	(9,823		)	10,323			4,286			—			4,786
Provision (benefit) for income taxes	(4,534		)	5,639			445			—			1,550
Income (loss) before equity in net income of subsidiaries	(5,289		)	4,684			3,841			—			3,236
Equity in net income (loss) of subsidiaries	8,525			3,766			4,685			(16,976		)	—
Net income (loss)	$	3,236		$	8,450		$	8,526		$	(16,976	)	$	3,236
Net Income (loss)	$	3,236		$	8,450		$	8,526		$	(16,976	)	$	3,236
Other comprehensive income (loss), net of taxes	(2,821		)	1,789			(4,780		)	2,991			(2,821		)
Comprehensive income (loss)	$	415		$	10,239		$	3,746		$	(13,985	)	$	415

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

For the Three Months Ended December 31, 2014



	Parent Company			Guarantor Companies			Non-Guarantor Companies			Elimination			Consolidation
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	7,471		$	11,354		$	11,368		$	(22,722	)	$	7,471
Net cash provided by (used in) operating activities	1,703			(19,874		)	10,121			—			(8,050		)
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property, plant and equipment	(12		)	(16,534		)	(2,375		)	—			(18,921		)
Intercompany distributions	10,000			(10,000		)	—			—			—
Proceeds from sale of assets	—			5			102			—			107
Net cash provided by (used in) investing activities	9,988			(26,529		)	(2,273		)	—			(18,814		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Purchase of shares for treasury	(13,170		)	—			—			—			(13,170		)
Proceeds from long-term debt	10,000			—			279			—			10,279
Payments of long-term debt	(10,551		)	(432		)	(312		)	—			(11,295		)
Change in short-term borrowings	—			—			(1,201		)	—			(1,201		)
Financing costs	(29		)	—			—			—			(29		)
Tax effect from exercise/vesting of equity awards, net	342			—			—			—			342
Dividend	(1,910		)	—			—			—			(1,910		)
Other, net	102			21,832			(21,832		)	—			102
Net cash provided by (used in) financing activities	(15,216		)	21,400			(23,066		)	—			(16,882		)
CASH FLOWS FROM DISCONTINUED OPERATIONS:
Net cash used in discontinued operations	—			—			(380		)	—			(380		)
Effect of exchange rate changes on cash and equivalents	—			—			(1,713		)	—			(1,713		)
NET DECREASE IN CASH AND EQUIVALENTS	(3,525		)	(25,003		)	(17,311		)	—			(45,839		)
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD	6,813			31,522			54,070			—			92,405
CASH AND EQUIVALENTS AT END OF PERIOD	$	3,288		$	6,519		$	36,759		$	—		$	46,566

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

For the Three Months Ended December 31, 2013



	Parent Company			Guarantor Companies			Non-Guarantor Companies			Elimination			Consolidation
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	3,236		$	8,450		$	8,526		$	(16,976	)	$	3,236
Net cash provided by (used in) operating activities	(4,422		)	(43,260		)	21,403			—			(26,279		)
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property, plant and equipment	(320		)	(16,334		)	(1,262		)	—			(17,916		)
Acquired businesses, net of cash acquired	—			—			(21,781		)	—			(21,781		)
Intercompany distributions	10,000			(10,000		)	—			—			—
Proceeds from sale of assets	—			202			22			—			224
Net cash provided by (used in) investing activities	9,680			(26,132		)	(23,021		)	—			(39,473		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Purchase of shares for treasury	(55,189		)	—			—			—			(55,189		)
Proceeds from long-term debt	42,689			(152		)	15,098			—			57,635
Payments of long-term debt	(21,603		)	(266		)	(3,377		)	—			(25,246		)
Change in short-term borrowings	—			—			9,940			—			9,940
Financing costs	(91		)	—			(590		)	—			(681		)
Purchase of ESOP shares	(1,591		)	—			—			—			(1,591		)
Tax effect from exercise/vesting of equity awards, net	273			—			—			—			273
Dividend	(6,719		)	5,000			—			—			(1,719		)
Other, net	32			61,139			(61,140		)	—			31
Net cash provided by (used in) financing activities	(42,199		)	65,721			(40,069		)	—			(16,547		)
CASH FLOWS FROM DISCONTINUED OPERATIONS:
Net cash used in discontinued operations	—			—			(299		)	—			(299		)
Effect of exchange rate changes on cash and equivalents	—			—			(158		)	—			(158		)
NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS	(36,941		)	(3,671		)	(42,144		)	—			(82,756		)
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD	68,994			25,343			83,793			—			178,130
CASH AND EQUIVALENTS AT END OF PERIOD	$	32,053		$	21,672		$	41,649		$	—		$	95,374