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., ATT 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, 2015 and September 30, 2015 and for the three months ended December 31, 2015 and 2014. 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 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, 2015



	Parent Company		Guarantor Companies		Non-Guarantor Companies		Elimination			Consolidation
CURRENT ASSETS
Cash and equivalents	$	3,589	$	12,108	$	34,271	$	—		$	49,968
Accounts receivable, net of allowances	—		173,229		56,542		(23,889		)	205,882
Contract costs and recognized income not yet billed, net of progress payments	—		122,655		268		—			122,923
Inventories, net	—		262,064		72,398		—			334,462
Prepaid and other current assets	20,530		28,850		11,782		(4,336		)	56,826
Assets of discontinued operations	—		—		1,360		—			1,360
Total Current Assets	24,119		598,906		176,621		(28,225		)	771,421
PROPERTY, PLANT AND EQUIPMENT, net	1,064		283,657		91,389		—			376,110
GOODWILL	—		284,875		71,537		—			356,412
INTANGIBLE ASSETS, net	—		151,299		60,173		—			211,472
INTERCOMPANY RECEIVABLE	575,596		974,449		273,821		(1,823,866		)	—
EQUITY INVESTMENTS IN SUBSIDIARIES	752,342		642,949		1,746,165		(3,141,456		)	—
OTHER ASSETS	42,072		33,002		9,444		(59,320		)	25,198
ASSETS OF DISCONTINUED OPERATIONS	—		—		2,576		—			2,576
Total Assets	$	1,395,193	$	2,969,137	$	2,431,726	$	(5,052,867	)	$	1,743,189
CURRENT LIABILITIES
Notes payable and current portion of long-term debt	$	2,202	$	2,287	$	10,700	$	—		$	15,189
Accounts payable and accrued liabilities	33,681		185,267		68,020		(23,609		)	263,359
Liabilities of discontinued operations	—				2,033		—			2,033
Total Current Liabilities	35,883		187,554		80,753		(23,609		)	280,581

LONG-TERM DEBT, net	813,902		20,373		51,753		—			886,028
INTERCOMPANY PAYABLES	58,957		949,455		787,779		(1,796,191		)	—
OTHER LIABILITIES	58,072		125,825		26,840		(66,170		)	144,567
LIABILITIES OF DISCONTINUED OPERATIONS	—		—		3,634		—			3,634
Total Liabilities	966,814		1,283,207		950,759		(1,885,970		)	1,314,810
SHAREHOLDERS’ EQUITY	428,379		1,685,930		1,480,967		(3,166,897		)	428,379
Total Liabilities and Shareholders’ Equity	$	1,395,193	$	2,969,137	$	2,431,726	$	(5,052,867	)	$	1,743,189

CONDENSED CONSOLIDATING BALANCE SHEETS

At September 30, 2015



	Parent Company		Guarantor Companies		Non-Guarantor Companies		Elimination			Consolidation
CURRENT ASSETS
Cash and equivalents	$	2,440	$	10,671	$	38,890	$	—		$	52,001
Accounts receivable, net of allowances	—		178,830		61,772		(21,847		)	218,755
Contract costs and recognized income not yet billed, net of progress payments	—		103,879		16		—			103,895
Inventories, net	—		257,929		67,880		—			325,809
Prepaid and other current assets	23,493		27,584		12,488		(8,479		)	55,086
Assets of discontinued operations	—		—		1,316		—			1,316
Total Current Assets	25,933		578,893		182,362		(30,326		)	756,862

PROPERTY, PLANT AND EQUIPMENT, net	1,108		286,854		92,010		—			379,972
GOODWILL	—		284,875		71,366		—			356,241
INTANGIBLE ASSETS, net	—		152,412		61,425		—			213,837
INTERCOMPANY RECEIVABLE	542,297		904,840		263,480		(1,710,617		)	—
EQUITY INVESTMENTS IN SUBSIDIARIES	745,262		644,577		1,740,889		(3,130,728		)	—
OTHER ASSETS	41,774		30,203		9,959		(59,590		)	22,346
ASSETS OF DISCONTINUED OPERATIONS	—		—		2,175		—			2,175
Total Assets	$	1,356,374	$	2,882,654	$	2,423,666	$	(4,931,261	)	$	1,731,433
CURRENT LIABILITIES
Notes payable and current portion of long-term debt	$	2,202	$	3,842	$	10,549	$	—		$	16,593
Accounts payable and accrued liabilities	30,158		222,758		72,843		(20,951		)	304,808
Liabilities of discontinued operations	—		—		2,229		—			2,229
Total Current Liabilities	32,360		226,600		85,621		(20,951		)	323,630
LONG-TERM DEBT, net	752,839		17,116		57,021		—			826,976
INTERCOMPANY PAYABLES	76,477		831,345		775,120		(1,682,942		)	—
OTHER LIABILITIES	64,173		126,956		28,428		(72,634		)	146,923
LIABILITIES OF DISCONTINUED OPERATIONS	—		—		3,379		—			3,379
Total Liabilities	925,849		1,202,017		949,569		(1,776,527		)	1,300,908
SHAREHOLDERS’ EQUITY	430,525		1,680,637		1,474,097		(3,154,734		)	430,525
Total Liabilities and Shareholders’ Equity	$	1,356,374	$	2,882,654	$	2,423,666	$	(4,931,261	)	$	1,731,433

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

For the Three Months Ended December 31, 2015



($ in thousands)	Parent Company			Guarantor Companies			Non-Guarantor Companies			Elimination			Consolidation
Revenue	$	—		$	389,260		$	112,732		$	(7,843	)	$	494,149
Cost of goods and services	—			298,384			87,896			(8,236		)	378,044
Gross profit	—			90,876			24,836			393			116,105
Selling, general and administrative expenses	6,397			65,948			19,046			(92		)	91,299
Total operating expenses	6,397			65,948			19,046			(92		)	91,299

Income (loss) from operations	(6,397		)	24,928			5,790			485			24,806

Other income (expense)
Interest income (expense), net	(2,256		)	(7,789		)	(1,967		)	—			(12,012		)
Other, net	193			1,016			(169		)	(485		)	555
Total other income (expense)	(2,063		)	(6,773		)	(2,136		)	(485		)	(11,457		)
Income (loss) before taxes	(8,460		)	18,155			3,654			—			13,349
Provision (benefit) for income taxes	(5,797		)	8,817			1,733			—			4,753
Income (loss) before equity in net income of subsidiaries	(2,663		)	9,338			1,921			—			8,596
Equity in net income (loss) of subsidiaries	11,259			1,929			9,338			(22,526		)	—
Net income (loss)	$	8,596		$	11,267		$	11,259		$	(22,526	)	$	8,596

Net Income (loss)	$	8,596		$	11,267		$	11,259		$	(22,526	)	$	8,596
Other comprehensive income (loss), net of taxes	(3,978		)	139			(4,117		)	3,978			(3,978		)
Comprehensive income (loss)	$	4,618		$	11,406		$	7,142		$	(18,548	)	$	4,618

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
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 CASH FLOWS

For the Three Months Ended December 31, 2015



	Parent Company			Guarantor Companies			Non-Guarantor Companies			Elimination			Consolidation
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	8,596		$	11,267		$	11,259		$	(22,526	)	$	8,596
Net cash provided by (used in) operating activities:	(48,165		)	29,701			(1,132		)	—			(19,596		)
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property, plant and equipment	(54		)	(22,017		)	(2,947		)	—			(25,018		)
Investment in unconsolidated joint venture	—			(2,726		)	—			—			(2,726		)
Proceeds from sale of investments	715			—						—			715
Proceeds from sale of assets	—			472			12			—			484
Net cash provided by (used in) investing activities	661			(24,271		)	(2,935		)	—			(26,545		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Purchase of shares for treasury	(10,910		)	—			—			—			(10,910		)
Proceeds from long-term debt	62,000			2,215			15,659			—			79,874
Payments of long-term debt	(2,551		)	(524		)	(21,051		)	—			(24,126		)
Change in short-term borrowings	—			—			(147		)	—			(147		)
Tax benefit from exercise/vesting of equity awards, net	2,291			—			—			—			2,291
Dividends paid	(2,281		)	—			—			—			(2,281		)
Other, net	104			(5,684		)	5,684			—			104
Net cash provided by (used in) financing activities	48,653			(3,993		)	145			—			44,805
CASH FLOWS FROM DISCONTINUED OPERATIONS:
Net cash used in discontinued operations	—			—			(387		)	—			(387		)
Effect of exchange rate changes on cash and equivalents	—			—			(310		)	—			(310		)
NET DECREASE IN CASH AND EQUIVALENTS	1,149			1,437			(4,619		)	—			(2,033		)
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD	2,440			10,671			38,890			—			52,001
CASH AND EQUIVALENTS AT END OF PERIOD	$	3,589		$	12,108		$	34,271		$	—		$	49,968

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 benefit from exercise/vesting of equity awards, net	342			—			—			—			342
Dividends paid	(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