ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction | (I.R.S. Employer | ||
of incorporation or organization) | Identification No.) | ||
(Address of Principal Executive Offices) | (Zip Code) | ||
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
☒ | Accelerated filer | o | |
Non-accelerated filer | o | Smaller reporting company | |
Emerging growth company |
• | Consumer and Professional Products ("CPP") conducts its operations through AMES. Founded in 1774, AMES is the leading North American manufacturer and a global provider of branded consumer and professional tools and products for home storage and organization, landscaping, and enhancing outdoor lifestyles. CPP sells products globally through a portfolio of leading brands including True Temper, AMES, and ClosetMaid. |
• | Home and Building Products ("HBP") conducts its operations through Clopay. 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. Rolling steel door and grille products designed for commercial, industrial, institutional, and retail use are sold under the CornellCookson brand. |
• | Defense Electronics conducts its operations through Telephonics Corporation ("Telephonics"), founded in 1933, a globally recognized leading provider of highly sophisticated intelligence, surveillance and communications solutions for defense, aerospace and commercial customers. |
• | 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 products range in size, material (poly and steel), tray form, tire type, handle length and color based on the needs of homeowners, landscapers and contractors. |
• | Snow Tools: A complete line of snow tools is marketed under the True Temper®, Garant® and Union Tools® 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. These products are marketed under the True Temper®, Cyclone®, Garant®, Jackson® Professional Tools and Razor-Back® Professional Tools brand names. |
• | Hand Tools: Hammers, screwdrivers, pliers, adjustable wrenches, handsaws, tape measures, levels, clamps, and other traditional hand tools make up this product line. These products are marketed under the Trojan®, Cyclone® and Supercraft® brand names. In addition, gardening hand tools, such as trowels, cultivators, weeders and other specialty garden hand tools, are marketed under the AMES® brand name. |
• | 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® and Dynamic Design®™ brand names, as well as various private label brands. 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®, Nylex®, and Hills® 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 and other private label brands. Wire products include wire shelving and hardware, wire accessories and kitchen storage products. Wire product brands include Maximum Load®, SuperSlide® and ShelfTrack®. Wood solutions include closet systems, cube storage, storage furniture and cabinets. Selected wood product brands include MasterSuite®, Suite Symphony®™, ExpressShelf®, Style+®, and SpaceCreations®. |
• | Cleaning Products: AMES offers a full line of cleaning products for professional, home, and industrial use, including brooms, brushes, squeegees and other cleaning products, primarily under the Harper® brand. |
• | Radar: Telephonics provides a wide range of high-performing, lightweight and cost-effective maritime surveillance and weather avoidance radar systems for fixed- and rotary-wing aircraft, Unmanned Aerial Vehicles (UAVs) and shipboard platforms to the U.S. Government and numerous international defense agencies. Telephonics maritime surveillance radars offer advanced features such as Ground Moving Target Indicator (GMTI), Synthetic Aperture Radar (SAR), Inverse Synthetic Aperture Radar (ISAR), Automatic Identification System (AIS) and weather avoidance. |
• | Naval & Cyber Systems: As today’s global leader for maritime surveillance radars, Telephonics is the sole provider of the US Navy’s AN/APS-153 multi-mode radar and the communications suite within the MH-60R/S multi-mission helicopters. With a laser focus on tomorrow, Telephonics is developing the next generation multi-mode maritime and over-land surveillance AESA radar known as Telephonics MOSAIC®. Cyber Systems focuses on ISR aircraft integration design and services with a facility that includes a 7,000 square foot hanger and a Sensitive Compartmented Information Facility (SCIF) capable of supporting various customer and Government agencies “black” programs. |
• | Surveillance: Telephonics is a global leader in Identification Friend or Foe (IFF), Monopulse Secondary Surveillance Radars (MSSR) and Air Traffic Control (ATC) systems enabling military and civilian air traffic controllers to effectively identify aircraft and vehicles as friendly. Telephonics provides both equipment and supporting services required to safely and reliably control flight operations. These systems are used by the U.S. Army, U.S. Navy, U.S. Air Force, U.S. Marines, Federal Aviation Administration ("FAA"), NATO and numerous international defense agencies including those of Japan and South Korea. They have been fielded globally in a wide range of ground, air and sea-based applications. |
• | Communications: Telephonics' advanced wired and wireless communication systems provide the digital backbone for defense and civil platforms worldwide, including fixed- and rotary-wing aircraft, lighter-than-air aircraft and ground control shelters. These systems are designed to meet stringent customer requirements to support adaptability to special missions and communications protocol requirements. Telephonics' vehicle-based intercommunications systems deliver traditional intercom system capabilities while incorporating software-defined features, including an open architecture for integration into vehicle C4 (command, control, communications and computing) systems, networked communications gateways and combat vehicles. Commercial audio products and headsets are utilized worldwide in a wide range of military and civilian applications, including audiometric testing and onboard flight entertainment. Advanced transit communications systems deliver high-quality audio communications and critical travel information, enhancing passenger safety, as well as train crew intelligibility and operational efficiency. Telephonics communications systems are fielded within the U.S. Army, U.S. Navy, U.S. Air Force, U.S. Marines and numerous international defense agencies. These systems are also sold to aerospace manufacturers, commercial airlines and audiometric original equipment manufacturers. |
• | Systems Engineering and Analysis (SEG): SEG provides sophisticated, highly technical engineering and analytic support to customers including the Missile Defense Agency, AEGIS Ballistic Missile Defense Program, Program Executive Offices for Integrated Warfare Systems and Ships, U.S. Naval Surface Warfare Centers, Marine Corps System Command and the U.S. Army Aviation and Missile Command, among others. As a leading provider of combat, radar and missile systems engineering and analysis, SEG is a key source of systems engineering expertise for the U.S. integrated air and missile defense initiatives. In addition to government program offices, SEG works extensively with national laboratories, the Intelligence Community and prime contractors. |
• | Telephonics Large Scale Integration (TLSI): TLSI has designed nearly 400 mixed-signal custom Application Specific Integrated Circuits (ASICs) for customers in the automotive, industrial, defense/avionics and smart energy markets. TLSI works with its customers' technical teams, taking complete responsibility for the ASIC development process, from the |
a. | The U.S. Government and its agencies, through prime and subcontractor relationships, represented 10% of Griffon’s consolidated revenue and 63% of Defense Electronics' revenue. |
b. | Home Depot represented 18% of Griffon’s consolidated revenue, 28% of CPP's revenue and 13% of HBP's revenue. |
Name | Age | Positions Held and Prior Business Experience | ||
Ronald J. Kramer | 61 | 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. 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 Business Development Corporation of America. | ||
Robert F. Mehmel | 57 | Director since May 2018, President and Chief Operating Officer since December 2012. 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. 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 | 50 | Senior Vice President and Chief Financial Officer since August 2015. 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. (NYSE:JW.A) and Arthur Andersen, LLP. | ||
Seth L. Kaplan | 50 | 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. From 1994 to 2000, associate at the law firm Winthrop, Stimson, Putnam & Roberts (now Pillsbury Winthrop Shaw Pittman LLP). |
• | Termination for default or for convenience by the government; |
• | Reduction or modification in the event of changes in the government’s requirements or budgetary constraints; |
• | Increased or unexpected costs, causing losses or reduced profits under contracts where Telephonics’ prices are fixed, or determinations that certain costs are not allowable under particular government contracts; |
• | The failure or inability of the prime contractor to perform its contract under circumstances in which Telephonics is a subcontractor; |
• | Failure to observe and comply with government business practice and procurement regulations such that Telephonics could be suspended or barred from bidding on or receiving awards of new government contracts; |
• | The failure of the government to exercise options for additional work provided for in contracts; |
• | The inherent discretion of government agencies in determining whether Telephonics has complied with all specifications set forth in a government contract; and |
• | The government’s right, in certain circumstances, to freely use technology developed under these contracts. |
• | 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. |
• | Costs associated with incomplete or poorly implemented acquisitions; |
• | Expenses, delays and difficulties of integrating acquired companies into Griffon’s existing organization; |
• | Dilution of the interest of existing stockholders; |
• | Diversion of management’s attention; or |
• | Difficulty in obtaining financing on acceptable terms, or at all. |
• | 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 accomplish on favorable terms, if at all; and |
• | Its level of indebtedness may make Griffon more vulnerable to economic or industry downturns. |
Location | Business Segment | Primary Use | Approx. Square Footage | Owned/ Leased | Lease End Year | ||||||
New York, NY | Corporate | Headquarters | 13,000 | Leased | 2025 | ||||||
Farmingdale, NY | Defense Electronics | Manufacturing/R&D | 180,000 | Owned | |||||||
Huntington, NY | Defense Electronics | Manufacturing | 90,000 | Owned | |||||||
Huntington, NY | Defense Electronics | Manufacturing | 100,000 | Leased | 2021 | ||||||
Columbia, MD | Defense Electronics | Engineering | 46,000 | Leased | 2025 | ||||||
Elizabeth City, NC | Defense Electronics | Manufacturing (Owned), Repair and Service (Leased) | 46,500 | Owned / Leased | 2039 | ||||||
Troy, OH | Home and Building Products | Manufacturing | 1,230,000 | Leased | 2021 | ||||||
Russia, OH | Home and Building Products | Manufacturing | 250,000 | Owned | |||||||
Mountain Top, PA | Home and Building Products | Manufacturing | 229,000 | Owned /Leased | 2020 | ||||||
Goodyear, AZ | Home and Building Products | Manufacturing | 163,000 | Owned | |||||||
Carlisle, PA | Consumer and Professional Products | Manufacturing, Distribution | 1,227,000 | Leased | 2035 | ||||||
Reno, NV | Consumer and Professional Products | Manufacturing, Distribution | 400,000 | Leased | 2022 | ||||||
Camp Hill, PA | Consumer and Professional Products | Manufacturing | 380,000 | Owned | |||||||
Harrisburg, PA | Consumer and Professional Products | Manufacturing | 264,000 | Owned | |||||||
St. Francois, Quebec | Consumer and Professional Products | Manufacturing, Distribution | 353,000 | Owned | |||||||
Falls City, NE | Consumer and Professional Products | Manufacturing | 82,000 | Owned | |||||||
Champion, PA | Consumer and Professional Products | Wood Mill | 225,000 | Owned | |||||||
Cork, Ireland | Consumer and Professional Products | Manufacturing, Distribution | 74,000 | Owned | |||||||
Pollington Site, UK | Consumer and Professional Products | Manufacturing, Distribution | 115,000 | Owned | |||||||
Gloucestershire, UK | Consumer and Professional Products | Distribution | 46,000 | Leased | 2022 | ||||||
South Yorkshire, UK | Consumer and Professional Products | Manufacturing | 59,000 | Leased | 2025 | ||||||
Australia (various) | Consumer and Professional Products | 7 Distribution | 562,000 | Leased | 2020 - 2027 | ||||||
Ocala, FL | Consumer and Professional Products | Manufacturing | 676,000 | Leased | 2020 | ||||||
Grantsville, MD | Consumer and Professional Products | Manufacturing | 155,000 | Owned | |||||||
Reynosa, MX | Consumer and Professional Products | Manufacturing (owned), Distribution (leased) | 133,000 | Owned /Leased | 2020 | ||||||
Chino, CA | Consumer and Professional Products | Distribution | 202,000 | Leased | 2021 | ||||||
Pharr, TX | Consumer and Professional Products | Distribution | 80,000 | Leased | 2022 | ||||||
Belle Vernon, PA | Consumer and Professional Products | Distribution | 300,000 | Leased | 2022 | ||||||
Fairfield, IA | Consumer and Professional Products | Manufacturing | 54,000 | Leased | 2021 | ||||||
Guangdong, China | Consumer and Professional Products | Manufacturing | 88,000 | Leased | 2021 |
(a) | (b) | (c) | |||||||
Plan Category | Number of securities to be issued upon exercise of outstanding options, warrants and rights (2) | Weighted- average exercise price of outstanding options, warrants and rights (2) | 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) | — | $ | — | 270,937 | |||||
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. The total reflected in column (c) includes shares available for grant as any type of equity award under the Incentive Plan. |
(2) | A stock option to purchase 350,000 shares at an exercise price of $20.00 expired on October 1, 2018. |
Period | (a) Total Number of Shares (or Units) Purchased | (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, 2019 | — | $ | — | — | |||||||||||
August 1 - 31, 2019 | — | — | — | ||||||||||||
September 1 - 30, 2019 | — | — | — | ||||||||||||
Total | — | $ | — | — | $ | 57,955 | (1) |
1. | Shares, if any, purchased by the Company in open market purchases are pursuant to share repurchases authorized by the Company’s Board of Directors. On each of August 3, 2016 and August 1, 2018, the Company’s Board of Directors authorized the repurchase of up to $50,000 of Griffon common stock; as of September 30, 2019, $57,955 remained available for purchase under these Board authorized repurchase programs. |
For the Years Ended September 30, | |||||||||||||||||||
(in thousands, except per share amounts) | 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||
Revenue | $ | 2,209,289 | $ | 1,977,918 | $ | 1,524,997 | $ | 1,477,035 | $ | 1,483,291 | |||||||||
Income (loss) before taxes and discontinued operations | $ | 72,178 | $ | 33,810 | $ | 16,698 | $ | 32,213 | $ | 19,066 | |||||||||
Provision (benefit) for income taxes | 26,556 | 555 | (1,085 | ) | 12,432 | 6,772 | |||||||||||||
Income (loss) from continuing operations | 45,622 | 33,255 | 17,783 | 19,781 | 12,294 | ||||||||||||||
Income (loss) from discontinued operations | (8,335 | ) | 92,423 | (2,871 | ) | 10,229 | 21,995 | ||||||||||||
Net Income (loss) | $ | 37,287 | $ | 125,678 | $ | 14,912 | $ | 30,010 | $ | 34,289 | |||||||||
Basic earnings (loss) per share: | |||||||||||||||||||
Continuing operations | $ | 1.11 | $ | 0.81 | $ | 0.43 | $ | 0.48 | $ | 0.28 | |||||||||
Discontinued operations | (0.20 | ) | 2.25 | (0.07 | ) | 0.25 | 0.49 | ||||||||||||
Net income (loss) | $ | 0.91 | $ | 3.06 | $ | 0.36 | $ | 0.73 | $ | 0.77 | |||||||||
Weighted average shares outstanding | 40,934 | 41,005 | 41,005 | 41,074 | 44,608 | ||||||||||||||
Diluted earnings (loss) per share: | |||||||||||||||||||
Continuing operations | $ | 1.06 | $ | 0.78 | $ | 0.41 | $ | 0.45 | $ | 0.26 | |||||||||
Discontinued operations | (0.20 | ) | 2.18 | (0.07 | ) | 0.23 | 0.47 | ||||||||||||
Net income (loss) | $ | 0.87 | $ | 2.96 | $ | 0.35 | $ | 0.68 | $ | 0.73 | |||||||||
Weighted average shares outstanding | 42,888 | 42,422 | 43,011 | 44,109 | 46,939 | ||||||||||||||
Cash dividends declared per common share | $ | 0.29 | $ | 1.28 | $ | 0.24 | $ | 0.20 | $ | 0.16 | |||||||||
Capital expenditures | $ | 45,361 | $ | 50,138 | $ | 34,937 | $ | 59,276 | $ | 46,308 | |||||||||
Depreciation and amortization | $ | 61,848 | $ | 55,803 | $ | 47,878 | $ | 46,342 | $ | 45,834 | |||||||||
Total assets | $ | 2,074,939 | $ | 2,084,890 | $ | 1,873,541 | $ | 1,782,096 | $ | 1,712,813 | |||||||||
Current portion of debt | $ | 10,525 | $ | 13,011 | $ | 11,078 | $ | 13,932 | $ | 8,170 | |||||||||
Long term portion of debt, net | 1,093,749 | 1,108,071 | 968,080 | 896,946 | 803,617 | ||||||||||||||
Total debt, net | $ | 1,104,274 | $ | 1,121,082 | $ | 979,158 | $ | 910,878 | $ | 811,787 |
Notes: | Results of operations from acquired businesses are included from the date of acquisition. The fair value of assets and liabilities, inclusive of changes resulting from operating the businesses, are included in the first period ended after the date of each acquisition, and all periods thereafter. |
• | Consumer and Professional Products ("CPP") conducts its operations through AMES. Founded in 1774, AMES is the leading North American manufacturer and a global provider of branded consumer and professional tools and products for home storage and organization, landscaping, and enhancing outdoor lifestyles. CPP sells products globally through a portfolio of leading brands including True Temper, AMES, and ClosetMaid. CPP revenue was 45%, 48%, and 36% of Griffon’s consolidated revenue in 2019, 2018 and 2017, respectively. |
• | Home and Building Products ("HBP") conducts its operations through Clopay. 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. Rolling steel door and grille products designed for commercial, industrial, institutional, and retail use are sold under the CornellCookson brand. HBP revenue was 40%, 35% and 37% of Griffon’s consolidated revenue in 2019, 2018 and 2017, respectively. |
• | Defense Electronics conducts its operations through Telephonics Corporation ("Telephonics"), founded in 1933, a globally recognized leading provider of highly sophisticated intelligence, surveillance and communications solutions for defense, aerospace and commercial customers. Telephonics’ revenue was 15%, 17% and 27% of Griffon’s consolidated revenue in 2019, 2018 and 2017, respectively. |
– | Acquisition costs of $9,617 ($6,145, net of tax, or $0.14 per share); |
For the Years Ended September 30, | |||||||||||
2019 | 2018 | 2017 | |||||||||
Income from continuing operations | $ | 45,622 | $ | 33,255 | $ | 17,783 | |||||
Adjusting items: | |||||||||||
Acquisition costs | — | 7,597 | 9,617 | ||||||||
Contract settlement charges | — | — | 5,137 | ||||||||
Acquisition contingent consideration | (1,646 | ) | — | — | |||||||
Special dividend ESOP charges | — | 3,220 | — | ||||||||
Secondary equity offering costs | — | 1,205 | — | ||||||||
Cost of life insurance benefit | — | 2,614 | — | ||||||||
Tax impact of above items | 313 | (6,421 | ) | (5,309 | ) | ||||||
Discrete and other certain tax provisions (benefits) | 2,035 | (9,384 | ) | (8,274 | ) | ||||||
Adjusted income from continuing operations | $ | 46,324 | $ | 32,086 | $ | 18,954 | |||||
Earnings per common share from continuing operations | $ | 1.06 | 0.78 | $ | 0.41 | ||||||
Adjusting items, net of tax: | |||||||||||
Acquisition costs | — | 0.12 | 0.14 | ||||||||
Contract settlement charges | — | — | 0.08 | ||||||||
Acquisition contingent consideration | (0.03 | ) | — | — | |||||||
Special dividend ESOP charges | — | 0.05 | — | ||||||||
Secondary equity offering costs | — | 0.02 | — | ||||||||
Cost of life insurance benefit | — | 0.01 | — | ||||||||
Discrete and other certain tax provisions (benefits) | 0.05 | (0.22 | ) | (0.19 | ) | ||||||
Adjusted earnings per share from continuing operations | $ | 1.08 | 0.76 | $ | 0.44 | ||||||
Weighted-average shares outstanding (in thousands) | 42,888 | 42,422 | 43,011 |
For the Years Ended September 30, | ||||||||||||||||||||
2019 | 2018 | 2017 | ||||||||||||||||||
Revenue | $ | 1,000,608 | $ | 953,612 | $ | 545,269 | ||||||||||||||
Adjusted EBITDA | $ | 90,677 | 9.1 | % | $ | 77,061 | 8.1 | % | $ | 45,002 | 8.3 | % | ||||||||
Depreciation and amortization | 32,289 | 30,816 | 25,207 |
For the Years Ended September 30, | ||||||||||||||||||||
2019 | 2018 | 2017 | ||||||||||||||||||
Revenue | $ | 873,640 | $ | 697,969 | $ | 568,001 | ||||||||||||||
Adjusted EBITDA | $ | 120,161 | 13.8 | % | $ | 100,339 | 14.4 | % | $ | 81,764 | 14.4 | % | ||||||||
Depreciation and amortization | 18,334 | 13,717 | 11,340 |
For the Years Ended September 30, | ||||||||||||||||||||
2019 | 2018 | 2017 | ||||||||||||||||||
Revenue | $ | 335,041 | $ | 326,337 | $ | 411,727 | ||||||||||||||
Adjusted EBITDA | $ | 35,104 | 10.5 | % | $ | 36,063 | 11.1 | % | $ | 45,931 | 11.2 | % | ||||||||
Depreciation and amortization | 10,667 | 10,801 | 10,851 |
Cash Flows from Continuing Operations | Years Ended September 30, | ||||||
(in thousands) | 2019 | 2018 | |||||
Net Cash Flows Provided By (Used In): | |||||||
Operating activities | $ | 113,958 | $ | 58,192 | |||
Investing activities | (74,553 | ) | 2,574 | ||||
Financing activities | (34,976 | ) | 39,065 |
a. | The U.S. Government and its agencies, through prime and subcontractor relationships, represented 10% of Griffon’s consolidated revenue and 63% of Defense Electronics revenue. |
b. | Home Depot represented 18% of Griffon’s consolidated revenue, 28% of CPP's revenue and 13% of HBP's revenue. |
Cash and Equivalents and Debt | At September 30, | At September 30, | |||||
(in thousands) | 2019 | 2018 | |||||
Cash and equivalents | $ | 72,377 | $ | 69,758 | |||
Notes payables and current portion of long-term debt | 10,525 | 13,011 | |||||
Long-term debt, net of current maturities | 1,093,749 | 1,108,071 | |||||
Debt discount and issuance costs | 9,857 | 13,610 | |||||
Total debt | 1,114,131 | 1,134,692 | |||||
Debt, net of cash and equivalents | $ | 1,041,754 | $ | 1,064,934 |
Payments Due by Period | |||||||||||||||||||||||
(in thousands) | Total | Less Than 1 Year | 1-3 Years | 3-5 Years | More than 5 Years | Other | |||||||||||||||||
Long-term debt (a) | $ | 1,114,131 | $ | 10,525 | $ | 1,102,217 | $ | 658 | $ | 731 | $ | — | |||||||||||
Interest expense | 172,916 | 57,771 | 115,142 | 3 | — | — | |||||||||||||||||
Rental commitments | 204,336 | 35,176 | 56,849 | 34,206 | 78,105 | — | |||||||||||||||||
Purchase obligations (b) | 241,467 | 239,365 | 2,087 | 15 | — | — | |||||||||||||||||
Capital expenditures | 9,063 | 9,063 | — | — | — | — | |||||||||||||||||
Supplemental & post-retirement benefits (c) | 14,255 | 1,900 | 3,516 | 3,098 | 5,741 | — | |||||||||||||||||
Uncertain tax positions (d) | 766 | — | — | — | — | 766 | |||||||||||||||||
Total obligations | $ | 1,756,934 | $ | 353,800 | $ | 1,279,811 | $ | 37,980 | $ | 84,577 | $ | 766 |
(a) | Included in long-term debt are capital leases of: $3,950 (less than 1 year), $2,821 (1-3 years), $157 (3-5 years) and $0 (more than 5 years). |
(b) | Purchase obligations are generally for the purchase of goods and services in the ordinary course of business. 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. Purchase obligations that extend beyond 2019 are principally related to long-term contracts received from customers of Telephonics. |
(c) | Griffon funds required payouts under its non-qualified supplemental defined benefit plan from its general assets and the expected payments are included in each period, as applicable. |
(d) | Due to the uncertainty of the potential settlement of future uncertain tax positions, management is unable to estimate the timing of related payments, if any, that will be made subsequent to 2019. These amounts do not include any potential indirect benefits resulting from deductions or credits for payments made to other jurisdictions. |
▪ | Report of Independent Registered Public Accounting Firm. |
▪ | Consolidated Balance Sheets at September 30, 2019 and 2018. |
▪ | Consolidated Statements of Operations and Comprehensive Income (Loss) for the years ended September 30, 2019, 2018 and 2017. |
▪ | Consolidated Statements of Cash Flows for the years ended September 30, 2019, 2018 and 2017. |
▪ | Consolidated Statements of Shareholders’ Equity for the years ended September 30, 2019, 2018 and 2017. |
▪ | Notes to Consolidated Financial Statements. |
▪ | Schedule II – Valuation and Qualifying Account. |
At September 30, 2019 | At September 30, 2018 | ||||||
CURRENT ASSETS | |||||||
Cash and equivalents | $ | $ | |||||
Accounts receivable, net of allowances of $7,881 and $6,408 | |||||||
Contract costs and recognized income not yet billed, net of progress payments of $13,861 and $3,172 | |||||||
Inventories | |||||||
Prepaid and other current assets | |||||||
Assets of discontinued operations | |||||||
Total Current Assets | |||||||
PROPERTY, PLANT AND EQUIPMENT, net | |||||||
GOODWILL | |||||||
INTANGIBLE ASSETS, net | |||||||
OTHER ASSETS | |||||||
ASSETS OF DISCONTINUED OPERATIONS | |||||||
Total Assets | $ | $ | |||||
CURRENT LIABILITIES | |||||||
Notes payable and current portion of long-term debt | $ | $ | |||||
Accounts payable | |||||||
Accrued liabilities | |||||||
Liabilities of discontinued operations | |||||||
Total Current Liabilities | |||||||
LONG-TERM DEBT, net | |||||||
OTHER LIABILITIES | |||||||
LIABILITIES OF DISCONTINUED OPERATIONS | |||||||
Total Liabilities | |||||||
COMMITMENTS AND CONTINGENCIES - See Note 14 | |||||||
SHAREHOLDERS’ EQUITY | |||||||
Preferred stock, par value $0.25 per share, authorized 3,000 shares, no shares issued | |||||||
Common stock, par value $0.25 per share, authorized 85,000 shares, issued shares of 82,775 and 81,520, respectively. | |||||||
Capital in excess of par value | |||||||
Retained earnings | |||||||
Treasury shares, at cost, 35,969 common shares and 35,846 common shares | ( | ) | ( | ) | |||
Accumulated other comprehensive loss | ( | ) | ( | ) | |||
Deferred compensation | ( | ) | ( | ) | |||
Total Shareholders’ Equity | |||||||
Total Liabilities and Shareholders’ Equity | $ | $ |
Years Ended September 30, | |||||||||||
2019 | 2018 | 2017 | |||||||||
Revenue | $ | $ | $ | ||||||||
Cost of goods and services | |||||||||||
Gross profit | |||||||||||
Selling, general and administrative expenses | |||||||||||
Income from continuing operations | |||||||||||
Other income (expense) | |||||||||||
Interest expense | ( | ) | ( | ) | ( | ) | |||||
Interest income | |||||||||||
Other, net | |||||||||||
Total other income (expense) | ( | ) | ( | ) | ( | ) | |||||
Income before taxes from continuing operations | |||||||||||
Provision (benefit) for income taxes | ( | ) | |||||||||
Income from continuing operations | $ | $ | $ | ||||||||
Discontinued operations: | |||||||||||
Income (loss) from operations of discontinued businesses | ( | ) | |||||||||
Provision for income taxes | ( | ) | |||||||||
Income (loss) from discontinued operations | ( | ) | ( | ) | |||||||
Net income | $ | $ | $ | ||||||||
Income from continuing operations | $ | $ | $ | ||||||||
Income (loss) from discontinued operations | ( | ) | ( | ) | |||||||
Basic earnings per common share | $ | $ | $ | ||||||||
Weighted-average shares outstanding | |||||||||||
Income from continuing operations | $ | $ | $ | ||||||||
Income (loss) from discontinued operations | ( | ) | ( | ) | |||||||
Diluted earnings per common share | $ | $ | $ | ||||||||
Weighted-average shares outstanding | |||||||||||
Net income | $ | $ | $ | ||||||||
Other comprehensive income (loss), net of taxes: | |||||||||||
Foreign currency translation adjustments | ( | ) | |||||||||
Pension and other post retirement plans | ( | ) | |||||||||
Gain (loss) on cash flow hedge | ( | ) | |||||||||
Total other comprehensive income (loss), net of taxes | ( | ) | |||||||||
Comprehensive income | $ | $ | $ |
Years Ended September 30, | |||||||||||
2019 | 2018 | 2017 | |||||||||
CASH FLOWS FROM OPERATING ACTIVITIES - CONTINUING OPERATIONS: | |||||||||||
Net income | $ | $ | $ | ||||||||
Net (income) loss from discontinued operations | ( | ) | |||||||||
Adjustments to reconcile net income to net cash provided by operating activities of continuing operations: | |||||||||||
Depreciation and amortization | |||||||||||
Stock-based compensation | |||||||||||
Provision for losses on accounts receivable | |||||||||||
Amortization of deferred financing costs and debt discounts | |||||||||||
Deferred income tax | ( | ) | ( | ) | |||||||
Gain (loss) on sale/disposal of assets and investments | ( | ) | ( | ) | |||||||
Change in assets and liabilities, net of assets and liabilities acquired: | |||||||||||
(Increase) decrease in accounts receivable and contract costs and recognized income not yet billed | ( | ) | |||||||||
Increase in inventories | ( | ) | ( | ) | ( | ) | |||||
Increase in prepaid and other assets | ( | ) | ( | ) | ( | ) | |||||
Increase in accounts payable, accrued liabilities and income taxes payable | |||||||||||
Other changes, net | |||||||||||
Net cash provided by operating activities - continuing operations | |||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES - CONTINUING OPERATIONS: | |||||||||||
Acquisition of property, plant and equipment | ( | ) | ( | ) | ( | ) | |||||
Acquired business, net of cash acquired | ( | ) | ( | ) | ( | ) | |||||
Investment sales (purchases) | ( | ) | ( | ) | |||||||
Proceeds (payments) from sale of business | ( | ) | |||||||||
Insurance proceeds (payments) | ( | ) | |||||||||
Proceeds from sale of property, plant and equipment | |||||||||||
Net cash provided by (used in) investing activities - continuing operations | ( | ) | ( | ) | |||||||
CASH FLOWS FROM FINANCING ACTIVITIES - CONTINUING OPERATIONS: | |||||||||||
Dividends paid | ( | ) | ( | ) | ( | ) | |||||
Purchase of shares for treasury | ( | ) | ( | ) | ( | ) | |||||
Proceeds from long-term debt | |||||||||||
Payments of long-term debt | ( | ) | ( | ) | ( | ) | |||||
Change in short-term borrowings | ( | ) | |||||||||
Share premium payment on settled debt | ( | ) | |||||||||
Financing costs | ( | ) | ( | ) | ( | ) | |||||
Purchase of ESOP shares | ( | ) | |||||||||
Contingent consideration for acquired businesses | ( | ) | |||||||||
Other, net | ( | ) | ( | ) | |||||||
Net cash provided by (used) in financing activities - continuing operations | ( | ) | ( | ) |
CASH FLOWS FROM DISCONTINUED OPERATIONS: | |||||||||||
Net cash provided by (used in) operating activities | ( | ) | ( | ) | |||||||
Net cash used in investing activities | ( | ) | ( | ) | |||||||
Net cash used in financing activities | ( | ) | ( | ) | |||||||
Net cash used in discontinued operations | ( | ) | ( | ) | ( | ) | |||||
Effect of exchange rate changes on cash and equivalents | |||||||||||
NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS | ( | ) | |||||||||
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD | |||||||||||
CASH AND EQUIVALENTS AT END OF PERIOD | $ | $ | $ | ||||||||
Supplemental Disclosure of Cash Flow Information: | |||||||||||
Cash paid for interest | $ | $ | $ | ||||||||
Cash paid for taxes |
COMMON STOCK | CAPITAL IN EXCESS OF PAR VALUE | RETAINED EARNINGS | TREASURY SHARES | ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | DEFERRED COMPENSATION | Total | |||||||||||||||||||||||||||
(in thousands) | SHARES | PAR VALUE | SHARES | COST | |||||||||||||||||||||||||||||
Balance at 9/30/2016 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||||||
Net income | — | — | — | — | — | — | — | ||||||||||||||||||||||||||
Dividends | — | — | — | ( | ) | — | — | — | — | ( | ) | ||||||||||||||||||||||
Tax effect from exercise/vesting of equity awards, net | — | — | ( | ) | — | ( | ) | — | — | ( | ) | ||||||||||||||||||||||
Amortization of deferred compensation | — | — | — | — | — | — | — | ||||||||||||||||||||||||||
Common stock issued | — | — | — | — | — | — | |||||||||||||||||||||||||||
Common stock acquired | — | — | — | — | ( | ) | — | — | ( | ) | |||||||||||||||||||||||
Equity awards granted, net | ( | ) | — | — | — | — | — | — | |||||||||||||||||||||||||
Premium on settlement of convertible debt | — | — | ( | ) | — | — | — | — | — | ( | ) | ||||||||||||||||||||||
Issuance of treasury stock in settlement of convertible debt | — | — | — | ( | ) | — | — | ||||||||||||||||||||||||||
ESOP purchase of common stock | — | — | — | — | — | — | — | ( | ) | ( | ) | ||||||||||||||||||||||
ESOP allocation of common stock | — | — | — | — | — | — | — | ||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | — | ||||||||||||||||||||||||||
Other comprehensive income, net of tax | — | — | — | — | — | — | — | ||||||||||||||||||||||||||
Balance at 9/30/2017 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||||||
Net income (loss) | — | — | — | — | — | — | — | ||||||||||||||||||||||||||
Dividends | — | — | — | ( | ) | — | — | — | — | ( | ) | ||||||||||||||||||||||
Shares withheld on employee taxes on vested equity awards | — | — | — | — | ( | ) | — | — | ( | ) | |||||||||||||||||||||||
Amortization of deferred compensation | — | — | — | — | — | — | — | ||||||||||||||||||||||||||
Common stock acquired | — | — | — | — | ( | ) | — | — | ( | ) | |||||||||||||||||||||||
Equity awards granted, net | ( | ) | — | — | — | — | — | — | |||||||||||||||||||||||||
ESOP allocation of common stock | — | — | — | — | — | — | — | ||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | — | ||||||||||||||||||||||||||
Stock-based consideration | — | — | — | — | — | — | — | ||||||||||||||||||||||||||
Other comprehensive loss, net of tax | — | — | — | — | — | — | — | ||||||||||||||||||||||||||
Balance at 9/30/2018 | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||
Net income (loss) | — | — | — | — | — | — | — | ||||||||||||||||||||||||||
Cumulative catch-up adjustment related to adoption of ASC 606(1) | — | — | — | ( | ) | — | — | — | — | ( | ) | ||||||||||||||||||||||
Dividends | — | — | — | ( | ) | — | — | — | — | ( | ) | ||||||||||||||||||||||
Shares withheld on employee taxes on vested equity awards | — | — | — | — | ( | ) | — | — | ( | ) |
Amortization of deferred compensation | — | — | — | — | — | — | — | ||||||||||||||||||||||||||
Common stock acquired | — | — | — | — | ( | ) | — | — | ( | ) | |||||||||||||||||||||||
Equity awards granted, net | ( | ) | — | — | — | — | — | — | |||||||||||||||||||||||||
ESOP allocation of common stock | — | — | — | — | — | — | — | ||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | — | ||||||||||||||||||||||||||
Stock-based consideration | — | — | — | — | — | — | — | ||||||||||||||||||||||||||
Other comprehensive loss, net of tax | — | — | — | — | — | — | ( | ) | — | ( | ) | ||||||||||||||||||||||
Balance at 9/30/2019 | ( | ) | ( | ) | ( | ) |
• | Consumer and Professional Products ("CPP") conducts its operations through The AMES Companies, Inc. (“AMES”). Founded in 1774, AMES is the leading North American manufacturer and a global provider of branded consumer and professional tools and products for home storage and organization, landscaping, and enhancing outdoor lifestyles. CPP sells products globally through a portfolio of leading brands including True Temper, AMES, and ClosetMaid. |
• | Home and Building Products ("HBP") conducts its operations through Clopay. 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. Rolling steel door and grille products designed for commercial, industrial, institutional, and retail use are sold under the CornellCookson brand. |
• | Defense Electronics conducts its operations through Telephonics Corporation ("Telephonics"), founded in 1933, a globally recognized leading provider of highly sophisticated intelligence, surveillance and communications solutions for defense, aerospace and commercial customers. |
• | Level 1 inputs are measured and recorded at fair value based upon quoted prices in active markets for identical assets. |
• | Level 2 inputs include inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices in active markets for similar assets and liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of assets or liabilities. |
• | Level 3 inputs are unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. |
Balance Sheet | As Reported at September 30, 2018 | Adjustments | Balance as of October 1, 2018 | ||||||||||||
CURRENT ASSETS | |||||||||||||||
Contract costs and recognized income not yet billed, net of progress payments | $ | $ | ( | ) | $ | ||||||||||
Inventories | |||||||||||||||
Total Current Assets | |||||||||||||||
Total Assets | |||||||||||||||
CURRENT LIABILITIES | |||||||||||||||
Accounts payable | |||||||||||||||
Billings in excess of costs (1) | |||||||||||||||
Total Current Liabilities | |||||||||||||||
OTHER LIABILITIES | ( | ) | |||||||||||||
Total Liabilities | |||||||||||||||
SHAREHOLDERS' EQUITY | |||||||||||||||
Retained Earnings | ( | ) | |||||||||||||
Total Shareholders' Equity | ( | ) | |||||||||||||
Total Liabilities and Shareholders’ Equity | $ | $ | $ |
For the Year Ended September 30, 2019 | |||||||||||||||
Income Statement | As Reported | Balances Without Adoption of ASC 606 | Effect of Adoption Higher/(Lower) | ||||||||||||
Net sales | $ | $ | $ | ||||||||||||
Cost of goods and services | |||||||||||||||
Income before taxes from continuing operations | |||||||||||||||
Provision (benefit) from income taxes | |||||||||||||||
Income from continuing operations |
As of September 30, 2019 | |||||||||||||||
Balance Sheet | As Reported | Balances Without Adoption of ASC 606 | Effect of Adoption Higher/(Lower) | ||||||||||||
CURRENT ASSETS | |||||||||||||||
Contract costs and recognized income not yet billed, net of progress payments | $ | $ | $ | ( | ) | ||||||||||
Inventories | |||||||||||||||
Total Current Assets | |||||||||||||||
Total Assets | |||||||||||||||
CURRENT LIABILITIES | |||||||||||||||
Accounts payable | |||||||||||||||
Billings in excess of costs | |||||||||||||||
Total Current Liabilities | |||||||||||||||
OTHER LIABILITIES | ( | ) | |||||||||||||
Total Liabilities | |||||||||||||||
SHAREHOLDERS' EQUITY | |||||||||||||||
Retained Earnings | ( | ) | |||||||||||||
Total Shareholders' Equity | ( | ) | |||||||||||||
Total Liabilities and Shareholders’ Equity | $ | $ | $ |
Accounts receivable (1) | $ | ||
Inventories(2) | |||
Property, plant and equipment | |||
Goodwill | |||
Intangible assets | |||
Other current and non-current assets | |||
Total assets acquired | |||
Accounts payable and accrued liabilities | |||
Long-term liabilities | |||
Total liabilities assumed | |||
Total | $ |
Average Life (Years) | ||||||
Goodwill | $ | N/A | ||||
Indefinite-lived intangibles | N/A | |||||
Definite-lived intangibles | ||||||
Total goodwill and intangible assets | $ |
Proforma For the year ended September 30, 2017 (unaudited) | |||
Revenue | $ | ||
Income from continuing operations |
• | Additional depreciation and amortization that would have been charged assuming the preliminary fair value adjustments to property, plant, and equipment, and intangible assets had been applied from October 1, 2016. |
• | Elimination of intercompany interest income recorded on ClosetMaid’s financial statements earned on an intercompany receivable due from ClosetMaid’s former parent. |
• | Additional interest and related expenses from the add-on offering of $ |
• | Removal of $ |
• | The consequential tax effects of the above adjustments using a |
Accounts receivable (1) | $ | ||
Inventories (2) | |||
Property, plant and equipment | |||
Goodwill | |||
Intangible assets | |||
Other current and non-current assets | |||
Total assets acquired | |||
Accounts payable and accrued liabilities | |||
Long-term liabilities | |||
Total liabilities assumed | |||
Total | $ |
Average Life (Years) | ||||||
Goodwill | $ | N/A | ||||
Indefinite-lived intangibles | N/A | |||||
Definite-lived intangibles | ||||||
Total goodwill and intangible assets | $ |
At September 30, 2019 | At September 30, 2018 | ||||||
Raw materials and supplies | $ | $ | |||||
Work in process | |||||||
Finished goods | |||||||
Total | $ | $ |
At September 30, 2019 | At September 30, 2018 | ||||||
Land, building and building improvements | $ | $ | |||||
Machinery and equipment | |||||||
Leasehold improvements | |||||||
Accumulated depreciation and amortization | ( | ) | ( | ) | |||
Total | $ | $ |
At September 30, 2017 | Goodwill from acquisitions | Foreign currency translation adjustments | At September 30, 2018 | Goodwill from acquisitions | Reallocation of Goodwill | Foreign currency translation adjustments | At September 30, 2019 | ||||||||||||||||||||||||
Consumer and Professional Products | $ | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||||||
Home and Building Products | ( | ) | |||||||||||||||||||||||||||||
Defense Electronics | |||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ |
At September 30, 2019 | At September 30, 2018 | ||||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Average Life (Years) | Gross Carrying Amount | Accumulated Amortization | |||||||||||||
Customer relationships & other | $ | $ | $ | $ | |||||||||||||
Unpatented technology | |||||||||||||||||
Total amortizable intangible assets | |||||||||||||||||
Trademarks | — | — | |||||||||||||||
Total intangible assets | $ | $ | $ | $ |
At September 30, 2019 | At September 30, 2018 | ||||||
Assets of discontinued operations: | |||||||
Prepaid and other current assets | $ | $ | |||||
Other long-term assets | |||||||
Total assets of discontinued operations | $ | $ | |||||
Liabilities of discontinued operations: | |||||||
Accrued liabilities, current | $ | $ | |||||
Other long-term liabilities | |||||||
Total liabilities of discontinued operations | $ | $ |
For the Year Ended September 30, | |||||||||||||
2019 | 2018 | 2017 | |||||||||||
Revenue | $ | $ | $ | ||||||||||
Cost of goods and services | |||||||||||||
Gross profit | |||||||||||||
Selling, general and administrative expenses | |||||||||||||
Restructuring charges | |||||||||||||
Total operating expenses | |||||||||||||
Income from discontinued operations | ( | ) | |||||||||||
Other income (expense) | |||||||||||||
Gain on sale of business | |||||||||||||
Interest expense, net | ( | ) | ( | ) | |||||||||
Other, net | ( | ) | |||||||||||
Total other income (expense) | ( | ) | |||||||||||
Income from operations of discontinued operations | ( | ) |
At September 30, 2019 | At September 30, 2018 | ||||||
Compensation | $ | $ | |||||
Interest | |||||||
Warranties and rebates | |||||||
Insurance | |||||||
Rent, utilities and freight | |||||||
Income and other taxes | |||||||
Marketing and advertising | |||||||
Acquisition related accruals | |||||||
Other | |||||||
Total | $ | $ |
Years Ended September 30, | |||||||
2019 | 2018 | ||||||
Balance, beginning of period | $ | $ | |||||
Warranties issued and changes in estimated pre-existing warranties | |||||||
Actual warranty costs incurred | ( | ) | ( | ) | |||
Other warranty liabilities assumed from acquisitions | $ | $ | |||||
Balance, end of period | $ | $ |
At September 30, 2019 | |||
Total minimum lease payments | $ | ||
Less amount representing interest payments | ( | ) | |
Present value of net minimum lease payments | |||
Current portion | ( | ) | |
Capitalized lease obligation, less current portion | $ |
At September 30, 2019 | ||||||||||||||||||||
Outstanding Balance | Original Issuer Discount | Capitalized Fees & Expenses | Balance Sheet | Coupon Interest Rate | ||||||||||||||||
Senior note due 2022 | (a) | $ | $ | $ | ( | ) | $ | % | ||||||||||||
Revolver due 2021 | (b) | ( | ) | Variable | ||||||||||||||||
Capital lease - real estate | (f) | ( | ) | % | ||||||||||||||||
Non U.S. lines of credit | (g) | ( | ) | Variable | ||||||||||||||||
Non U.S. term loans | (g) | ( | ) | Variable | ||||||||||||||||
Other long term debt | (h) | ( | ) | Variable | ||||||||||||||||
Totals | ( | ) | ||||||||||||||||||
less: Current portion | ( | ) | ( | ) | ||||||||||||||||
Long-term debt | $ | $ | $ | ( | ) | $ |
At September 30, 2018 | ||||||||||||||||||||
Outstanding Balance | Original Issuer Discount | Capitalized Fees & Expenses | Balance Sheet | Coupon Interest Rate | ||||||||||||||||
Senior notes due 2022 | (a) | $ | $ | $ | ( | ) | $ | % | ||||||||||||
Revolver due 2021 | (b) | ( | ) | Variable | ||||||||||||||||
ESOP Loans | (e) | ( | ) | Variable | ||||||||||||||||
Capital lease - real estate | (f) | ( | ) | % | ||||||||||||||||
Non U.S. lines of credit | (g) | ( | ) | Variable | ||||||||||||||||
Non U.S. term loans | (g) | ( | ) | Variable | ||||||||||||||||
Other long term debt | (h) | ( | ) | Variable | ||||||||||||||||
Totals | ( | ) | ||||||||||||||||||
less: Current portion | ( | ) | ( | ) | ||||||||||||||||
Long-term debt | $ | $ | $ | ( | ) | $ |
Year Ended September 30, 2019 | ||||||||||||||||||||
Effective Interest Rate | Cash Interest | Amort. Debt Discount | Amort. Deferred Cost & Other Fees | Total Interest Expense | ||||||||||||||||
Senior notes due 2022 | (a) | % | $ | $ | $ | $ | ||||||||||||||
Revolver due 2021 | (b) | Variable | ||||||||||||||||||
ESOP Loans | (e) | % | ||||||||||||||||||
Capital lease - real estate | (f) | Variable | ||||||||||||||||||
Non U.S. lines of credit | (g) | Variable | ||||||||||||||||||
Non U.S. term loans | (g) | Variable | ||||||||||||||||||
Other long term debt | (h) | Variable | — | |||||||||||||||||
Capitalized interest | ( | ) | — | — | ( | ) | ||||||||||||||
Totals | $ | $ | $ | $ |
Year Ended September 30, 2018 | ||||||||||||||||||||
Effective Interest Rate | Cash Interest | Amort. Debt Discount | Amort. Deferred Cost & Other Fees | Total Interest Expense | ||||||||||||||||
Senior notes due 2022 | (a) | % | $ | $ | $ | $ | ||||||||||||||
Revolver due 2021 | (b) | Variable | ||||||||||||||||||
Real estate mortgages | (d) | % | ||||||||||||||||||
ESOP Loans | (e) | % | ||||||||||||||||||
Capital lease - real estate | (f) | Variable | ||||||||||||||||||
Non U.S. lines of credit | (g) | Variable | ||||||||||||||||||
Non U.S. term loan | (g) | Variable | ||||||||||||||||||
Other long term debt | (h) | Variable | ||||||||||||||||||
Capitalized interest | ( | ) | — | — | ( | ) | ||||||||||||||
Totals | $ | $ | $ | $ |
Year Ended September 30, 2017 | ||||||||||||||||||||
Effective Interest Rate | Cash Interest | Amort. Debt Discount | Amort. Deferred Cost & Other Fees | Total Interest Expense | ||||||||||||||||
Senior notes due 2022 | (a) | % | $ | $ | $ | $ | ||||||||||||||
Revolver due 2021 | (b) | Variable | ||||||||||||||||||
Convert. debt due 2017 | (c) | % | ||||||||||||||||||
Real estate mortgages | (d) | % | ||||||||||||||||||
ESOP Loans | (e) | % | ||||||||||||||||||
Capital lease - real estate | (f) | % | ||||||||||||||||||
Non U.S. lines of credit | (g) | Variable | ||||||||||||||||||
Non U.S. term loan | (g) | Variable | ||||||||||||||||||
Other long term debt | (h) | Variable | ||||||||||||||||||
Capitalized interest | ( | ) | — | — | ( | ) | ||||||||||||||
Totals | $ | $ | $ | $ |
(a) | On October 2, 2017, in an unregistered offering through a private placement under Rule 144A, Griffon completed the add-on offering of $ |
(b) | On March 22, 2016, Griffon amended its Credit Agreement to increase the credit facility from $ |
(c) | On December 21, 2009, Griffon issued $ |
(d) | In September 2015 and March 2016, Griffon entered into mortgage loans in the amount of $ |
(e) | In August 2016, Griffon’s ESOP entered into an agreement that refinanced the existing ESOP loan into a new Term Loan in the amount of $ |
(f) | Two Griffon subsidiaries have capital leases outstanding for real estate located in Troy, Ohio and Ocala, Florida. The leases mature in 2021 and 2020, respectively, and bear interest at fixed rates of approximately |
(g) | In November 2012, Garant G.P. (“Garant”) entered into a CAD |
Defined Benefits for the Years Ended September 30, | Supplemental Benefits for the Years Ended September 30, | ||||||||||||||||||||||
2019 | 2018 | 2017 | 2019 | 2018 | 2017 | ||||||||||||||||||
Net periodic (benefits) costs: | |||||||||||||||||||||||
Interest cost | $ | $ | $ | $ | $ | $ | |||||||||||||||||
Expected return on plan assets | ( | ) | ( | ) | ( | ) | |||||||||||||||||
Amortization of: | |||||||||||||||||||||||
Prior service costs | |||||||||||||||||||||||
Actuarial loss | |||||||||||||||||||||||
Total net periodic (benefits) costs | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | $ | $ |
Defined Benefits for the Years Ended September 30, | Supplemental Benefits for the Years Ended September 30, | ||||||||||||||||
2019 | 2018 | 2017 | 2019 | 2018 | 2017 | ||||||||||||
Discount rate | % | % | % | % | % | % | |||||||||||
Expected return on assets | % | % | % | % | % | % |
Defined Benefits at September 30, | Supplemental Benefits at September 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Change in benefit obligation: | |||||||||||||||
Benefit obligation at beginning of fiscal year | $ | $ | $ | $ | |||||||||||
Interest cost | |||||||||||||||
Benefits paid | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Actuarial (gain) loss | ( | ) | ( | ) | |||||||||||
Benefit obligation at end of fiscal year | |||||||||||||||
Change in plan assets: | |||||||||||||||
Fair value of plan assets at beginning of fiscal year | |||||||||||||||
Actual return on plan assets | |||||||||||||||
Company contributions | |||||||||||||||
Benefits paid | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Fair value of plan assets at end of fiscal year | |||||||||||||||
Projected benefit obligation in excess of plan assets | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
Amounts recognized in the statement of financial position consist of: | |||||||||||||||
Accrued liabilities | $ | $ | $ | ( | ) | $ | ( | ) | |||||||
Other liabilities (long-term) | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Total Liabilities | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Net actuarial losses | |||||||||||||||
Prior service cost | |||||||||||||||
Deferred taxes | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Total Accumulated other comprehensive loss, net of tax | |||||||||||||||
Net amount recognized at September 30, | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | |||||
Accumulated benefit obligations | $ | $ | $ | $ | |||||||||||
Information for plans with accumulated benefit obligations in excess of plan assets: | |||||||||||||||
ABO | $ | $ | $ | $ | |||||||||||
PBO | |||||||||||||||
Fair value of plan assets |
Defined Benefits at September 30, | Supplemental Benefits at September 30, | ||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||
Weighted average discount rate | % | % | % | % |
At September 30, | ||||||||
2019 | 2018 | Target | ||||||
Cash and equivalents | % | % | % | |||||
Equity securities | % | % | % | |||||
Fixed income | % | % | % | |||||
Other | % | % | % | |||||
Total | % | % | % |
For the years ending September 30, | Defined Benefits | Supplemental Benefits | |||||
2020 | $ | $ | |||||
2021 | |||||||
2022 | |||||||
2023 | |||||||
2024 | |||||||
2025 through 2029 |
At September 30, 2019 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total | |||||||||||
Cash and equivalents | $ | $ | $ | $ | |||||||||||
Government agency securities | |||||||||||||||
Debt instruments | |||||||||||||||
Equity securities | |||||||||||||||
Commingled funds | |||||||||||||||
Limited partnerships and hedge fund investments | |||||||||||||||
Other Securities | |||||||||||||||
Total | $ | $ | $ | $ |
Significant Unobservable Inputs (Level 3) | |||
As of October 1, 2018 | $ | ||
Purchases, issuances and settlements | |||
Gains and losses | |||
As of September 30, 2019 | $ |
At September 30, 2018 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total | |||||||||||
Cash and equivalents | $ | $ | $ | $ | |||||||||||
Debt instruments | |||||||||||||||
Equity securities | |||||||||||||||
Commingled funds | |||||||||||||||
Limited partnerships and hedge fund investments | |||||||||||||||
Total | $ | $ | $ | $ |
At September 30, | |||||
2019 | 2018 | ||||
Allocated shares | |||||
Unallocated shares | |||||
Total |
For the Years Ended September 30, | |||||||||||
2019 | 2018 | 2017 | |||||||||
Domestic | $ | $ | $ | ( | ) | ||||||
Non-U.S. | |||||||||||
$ | $ | $ |
For the Years Ended September 30, | |||||||||||
2019 | 2018 | 2017 | |||||||||
Current | $ | $ | $ | ( | ) | ||||||
Deferred | ( | ) | ( | ) | |||||||
Total | $ | $ | $ | ( | ) | ||||||
U.S. Federal | $ | $ | ( | ) | $ | ( | ) | ||||
State and local | |||||||||||
Non-U.S. | |||||||||||
Total provision | $ | $ | $ | ( | ) |
For the Years Ended September 30, | ||||||||
2019 | 2018 | 2017 | ||||||
U.S. Federal income tax provision (benefit) rate | % | % | % | |||||
State and local taxes, net of Federal benefit | % | % | % | |||||
Non-U.S. taxes - foreign permanent items and taxes | % | % | ( | )% | ||||
Non-U.S. tax true-up | % | % | ( | )% | ||||
Change in domestic manufacturing deduction | % | % | ( | )% | ||||
Change in tax contingency reserves | ( | )% | ( | )% | % | |||
Impact of federal rate change on deferred tax balances | % | ( | )% | % | ||||
Tax Reform-Repatriation of Foreign Earnings and GILTI | % | % | % | |||||
Change in valuation allowance | % | % | ( | )% | ||||
Other non-deductible/non-taxable items, net | % | ( | )% | % | ||||
Non-deductible officer's compensation | % | % | % | |||||
Research and U.S. foreign tax credits | ( | )% | ( | )% | ( | )% | ||
Share based compensation | % | ( | )% | ( | )% | |||
Other | ( | )% | ( | )% | ( | )% | ||
Effective tax provision (benefit) rate | % | % | ( | )% |
At September 30, | |||||||
2019 | 2018 | ||||||
Deferred tax assets: | |||||||
Bad debt reserves | $ | $ | |||||
Inventory reserves | |||||||
Deferred compensation (equity compensation and defined benefit plans) | |||||||
Compensation benefits | |||||||
Insurance reserve | |||||||
Warranty reserve | |||||||
Net operating loss | |||||||
Tax credits | |||||||
Capital loss carryback | |||||||
Interest | |||||||
Other reserves and accruals | |||||||
Valuation allowance | ( | ) | ( | ) | |||
Total deferred tax assets | |||||||
Deferred tax liabilities: | |||||||
Goodwill and intangibles | ( | ) | ( | ) | |||
Property, plant and equipment | ( | ) | ( | ) | |||
Other | ( | ) | ( | ) | |||
Total deferred tax liabilities | ( | ) | ( | ) | |||
Net deferred tax liabilities | $ | ( | ) | $ | ( | ) |
At September 30, | |||||||
2019 | 2018 | ||||||
Other assets | $ | $ | |||||
Other liabilities | ( | ) | ( | ) | |||
Liabilities of discontinued operations | |||||||
Net deferred liability | $ | ( | ) | $ | ( | ) |
Balance at September 30, 2017 | $ | ||
Additions based on tax positions related to the current year | |||
Additions based on tax positions related to prior years | ( | ) | |
Reductions based on tax positions related to prior years | |||
Lapse of Statutes | ( | ) | |
Settlements | ( | ) | |
Balance at September 30, 2018 | |||
Additions based on tax positions related to the current year | |||
Additions based on tax positions related to prior years | ( | ) | |
Lapse of Statutes | ( | ) | |
Balance at September 30, 2019 | $ |
For the Years Ended September 30, | |||||||||||
2019 | 2018 | 2017 | |||||||||
Pre-tax compensation expense | $ | $ | $ | ||||||||
Tax benefit | ( | ) | ( | ) | ( | ) | |||||
Total stock-based compensation expense, net of tax | $ | $ | $ |
Shares | Weighted Average Grant- Date Fair Value | |||||
Unvested at September 30, 2018 | $ | |||||
Granted | ||||||
Vested | ( | ) | ||||
Forfeited | ( | ) | ||||
Unvested at September 30, 2019 |
2019 | 2018 | 2017 | ||||||
Weighted average shares outstanding - basic | ||||||||
Incremental shares from stock based compensation | ||||||||
Convertible debt due 2017 | ||||||||
Weighted average shares outstanding - diluted | ||||||||
Anti-dilutive options excluded from diluted EPS computation |
Quarter ended | Revenue | Gross Profit | Income from continuing operations | Per Share - Basic | Per Share - Diluted | ||||||||||||||
2019 | |||||||||||||||||||
December 31, 2018 | $ | $ | $ | $ | $ | ||||||||||||||
March 31, 2019 | |||||||||||||||||||
June 30, 2019 | |||||||||||||||||||
September 30, 2019 | |||||||||||||||||||
$ | $ | $ | $ | $ | |||||||||||||||
2018 | |||||||||||||||||||
December 31, 2017 | $ | $ | $ | $ | $ | ||||||||||||||
March 31, 2018 | |||||||||||||||||||
June 30, 2018 | |||||||||||||||||||
September 30, 2018 | |||||||||||||||||||
$ | $ | $ | $ | $ |
• | Earnings (loss) per share are computed independently for each quarter and year presented; as such the sum of the quarters may not be equal to the full year amounts. |
• | 2019 Net income, and the related per share earnings, included, net of tax, a benefit from the reversal of contingent consideration related to the Kelkay acquisition of $ |
• | 2018 Net income, and the related per share earnings, included, net of tax, acquisition related costs of $ |
• | Consumer and Professional Products ("CPP") conducts its operations through AMES. Founded in 1774, AMES is the leading North American manufacturer and a global provider of branded consumer and professional tools and products for home storage and organization, landscaping, and enhancing outdoor lifestyles. CPP sells products globally through a portfolio of leading brands including True Temper, AMES, and ClosetMaid. |
• | Home and Building Products ("HBP") conducts its operations through Clopay. 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. Rolling steel door and grille products designed for commercial, industrial, institutional, and retail use are sold under the CornellCookson brand. |
• | Defense Electronics conducts its operations through Telephonics Corporation ("Telephonics"), founded in 1933, a globally recognized leading provider of highly sophisticated intelligence, surveillance and communications solutions for defense, aerospace and commercial customers. |
For the Years Ended September 30, | |||||||||||
REVENUE | 2019 | 2018 | 2017 | ||||||||
Consumer and Professional Products | $ | $ | $ | ||||||||
Home and Building Products | |||||||||||
Defense Electronics | |||||||||||
Total consolidated net sales | $ | $ | $ |
For the Years Ended September 30, | |||||||||||
2019 | 2018 | 2017 | |||||||||
Segment Adjusted EBITDA: | |||||||||||
Consumer and Professional Products | $ | $ | $ | ||||||||
Home and Building Products | |||||||||||
Defense Electronics | |||||||||||
Segment Adjusted EBITDA | |||||||||||
Unallocated amounts, excluding depreciation | ( | ) | ( | ) | ( | ) | |||||
Net interest expense | ( | ) | ( | ) | ( | ) | |||||
Depreciation and amortization | ( | ) | ( | ) | ( | ) | |||||
Acquisition contingent consideration | |||||||||||
Acquisition costs | ( | ) | ( | ) | |||||||
Special dividend charges | ( | ) | |||||||||
Cost of life insurance benefit | ( | ) | |||||||||
Secondary equity offering costs | ( | ) | |||||||||
Contract settlement charges | ( | ) | |||||||||
Income before taxes from continuing operations | $ | $ | $ |
For the Years Ended September 30, | |||||||||||
DEPRECIATION and AMORTIZATION | 2019 | 2018 | 2017 | ||||||||
Segment: | |||||||||||
Consumer and Professional Products | $ | $ | $ | ||||||||
Home and Building Products | |||||||||||
Defense Electronics | |||||||||||
Total segment depreciation and amortization | |||||||||||
Corporate | |||||||||||
Total consolidated depreciation and amortization | $ | $ | $ | ||||||||
CAPITAL EXPENDITURES | |||||||||||
Segment: | |||||||||||
Consumer and Professional Products | $ | $ | $ | ||||||||
Home and Building Products | |||||||||||
Defense Electronics | |||||||||||
Total segment | |||||||||||
Corporate | |||||||||||
Total consolidated capital expenditures | $ | $ | $ |
ASSETS | At September 30, 2019 | At September 30, 2018 | At September 30, 2017 | ||||||||
Segment assets: | |||||||||||
Consumer and Professional Products | $ | $ | $ | ||||||||
Home and Building Products | |||||||||||
Defense Electronics | |||||||||||
Total segment assets | |||||||||||
Corporate | |||||||||||
Total continuing assets | |||||||||||
Assets of discontinued operations | |||||||||||
Consolidated total | $ | $ | $ |
For the Year Ended September 30, 2019 | |||
Residential repair and remodel | $ | ||
Retail | |||
Residential new construction | |||
Industrial | |||
International excluding North America | |||
Total Consumer and Professional Products | |||
Residential repair and remodel | |||
Commercial construction | |||
Residential new construction | |||
Total Home and Building Products | |||
U.S. Government | |||
International | |||
Commercial | |||
Total Defense Electronics | |||
Total Consolidated Revenue | $ |
For the Year Ended September 30, 2019 | ||||||||||||
Revenue by Geographic Area - Destination | Consumer and Professional Products | Home and Building Products | Defense Electronics | Total | ||||||||
United States | $ | $ | $ | $ | ||||||||
Europe | ||||||||||||
Canada | $ | |||||||||||
Australia | ||||||||||||
All other countries | $ | |||||||||||
Consolidated revenue | $ | $ | $ | $ |
For the Years Ended September 30, | |||||||
REVENUE BY GEOGRAPHIC AREA - DESTINATION | 2018 | 2017 | |||||
United States | $ | $ | |||||
Europe | |||||||
Canada | |||||||
Australia | |||||||
All other countries | |||||||
Consolidated revenue | $ | $ | |||||
For the Years Ended September 30, | |||||||||||
LONG-LIVED ASSETS BY GEOGRAPHIC AREA | 2019 | 2018 | 2017 | ||||||||
United States | $ | $ | $ | ||||||||
Canada | |||||||||||
Australia | |||||||||||
United Kingdom | |||||||||||
Mexico | |||||||||||
All other countries | |||||||||||
Consolidated long-lived assets, net | $ | $ | $ |
Years Ended September 30, | |||||||||||||||||||||||||||||
2019 | 2018 | 2017 | |||||||||||||||||||||||||||
Pre-tax | Tax | Net of tax | Pre-tax | Tax | Net of tax | Pre-tax | Tax | Net of tax | |||||||||||||||||||||
Foreign currency translation adjustments | $ | ( | ) | $ | $ | ( | ) | $ | $ | $ | $ | $ | $ | ||||||||||||||||
Pension and other defined benefit plans | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||
Cash flow hedge | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||
Total other comprehensive income (loss) | $ | ( | ) | $ | $ | ( | ) | $ | $ | ( | ) | $ | $ | $ | ( | ) | $ |
At September 30, | |||||||
2019 | 2018 | ||||||
Foreign currency translation | $ | ( | ) | $ | ( | ) | |
Pension and other defined benefit plans | ( | ) | ( | ) | |||
Cash flow hedge | |||||||
Total | $ | ( | ) | $ | ( | ) |
For the Years Ended September 30, | |||||||||||
2019 | 2018 | 2017 | |||||||||
Net income (loss) | $ | $ | $ | ||||||||
Other comprehensive income (loss), net of taxes | ( | ) | |||||||||
Comprehensive income (loss) | $ | $ | $ |
For the Years Ended September 30, | |||||||||||
Gain (Loss) | 2019 | 2018 | 2017 | ||||||||
Pension amortization | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||
Cash flow hedges | ( | ) | |||||||||
Total before tax | ( | ) | ( | ) | |||||||
Tax | ( | ) | |||||||||
Net of tax | $ | $ | ( | ) | $ | ( | ) |
Parent Company | Guarantor Companies | Non-Guarantor Companies | Elimination | Consolidation | |||||||||||||||
CURRENT ASSETS | |||||||||||||||||||
Cash and equivalents | $ | $ | $ | $ | $ | ||||||||||||||
Accounts receivable, net of allowances | ( | ) | |||||||||||||||||
Contract costs and recognized income not yet billed, net of progress payments | |||||||||||||||||||
Inventories | ( | ) | |||||||||||||||||
Prepaid and other current assets | ( | ) | |||||||||||||||||
Assets of discontinued operations | |||||||||||||||||||
Total Current Assets | ( | ) | |||||||||||||||||
PROPERTY, PLANT AND EQUIPMENT, net | |||||||||||||||||||
GOODWILL | |||||||||||||||||||
INTANGIBLE ASSETS, net | |||||||||||||||||||
INTERCOMPANY RECEIVABLE | ( | ) | |||||||||||||||||
EQUITY INVESTMENTS IN SUBSIDIARIES | ( | ) | |||||||||||||||||
OTHER ASSETS | ( | ) | ( | ) | |||||||||||||||
ASSETS OF DISCONTINUED OPERATIONS | |||||||||||||||||||
Total Assets | $ | $ | $ | $ | ( | ) | $ | ||||||||||||
CURRENT LIABILITIES | |||||||||||||||||||
Notes payable and current portion of long-term debt | $ | $ | $ | $ | $ | ||||||||||||||
Accounts payable and accrued liabilities | ( | ) | |||||||||||||||||
Liabilities of discontinued operations | |||||||||||||||||||
Total Current Liabilities | ( | ) | |||||||||||||||||
LONG-TERM DEBT, net | |||||||||||||||||||
INTERCOMPANY PAYABLES | ( | ) | |||||||||||||||||
OTHER LIABILITIES | ( | ) | |||||||||||||||||
LIABILITIES OF DISCONTINUED OPERATIONS | |||||||||||||||||||
Total Liabilities | ( | ) | |||||||||||||||||
SHAREHOLDERS’ EQUITY | ( | ) | |||||||||||||||||
Total Liabilities and Shareholders’ Equity | $ | $ | $ | $ | ( | ) | $ |
Parent Company | Guarantor Companies | Non-Guarantor Companies | Elimination | Consolidation | ||||||||||
CURRENT ASSETS | ||||||||||||||
Cash and equivalents | ||||||||||||||
Accounts receivable, net of allowances | ( | ) | ||||||||||||
Contract costs and recognized income not yet billed, net of progress payments | ||||||||||||||
Inventories, net | ( | ) | ||||||||||||
Prepaid and other current assets | ||||||||||||||
Assets of discontinued operations | ||||||||||||||
Total Current Assets | ( | ) | ||||||||||||
PROPERTY, PLANT AND EQUIPMENT, net | ||||||||||||||
GOODWILL | ||||||||||||||
INTANGIBLE ASSETS, net | ||||||||||||||
INTERCOMPANY RECEIVABLE | ( | ) | ( | ) | ||||||||||
EQUITY INVESTMENTS IN SUBSIDIARIES | ( | ) | ||||||||||||
OTHER ASSETS | ( | ) | ||||||||||||
ASSETS OF DISCONTINUED OPERATIONS | ||||||||||||||
Total Assets | ( | ) | ||||||||||||
CURRENT LIABILITIES | ||||||||||||||
Notes payable and current portion of long-term debt | ||||||||||||||
Accounts payable and accrued liabilities | ( | ) | ||||||||||||
Liabilities of discontinued operations | ( | ) | ||||||||||||
Total Current Liabilities | ( | ) | ||||||||||||
LONG-TERM DEBT, net | ||||||||||||||
INTERCOMPANY PAYABLES | ( | ) | ( | ) | ||||||||||
OTHER LIABILITIES | ( | ) | ||||||||||||
LIABILITIES OF DISCONTINUED OPERATIONS | ||||||||||||||
Total Liabilities | ( | ) | ||||||||||||
SHAREHOLDERS’ EQUITY | ( | ) | ||||||||||||
Total Liabilities and Shareholders’ Equity | ( | ) |
Parent Company | Guarantor Companies | Non-Guarantor Companies | Elimination | Consolidation | |||||||||||||||
Revenue | $ | $ | $ | $ | ( | ) | $ | ||||||||||||
Cost of goods and services | ( | ) | |||||||||||||||||
Gross profit | |||||||||||||||||||
Selling, general and administrative expenses | ( | ) | |||||||||||||||||
Income (loss) from operations | ( | ) | |||||||||||||||||
Other income (expense) | |||||||||||||||||||
Interest income (expense), net | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||
Other, net | ( | ) | ( | ) | ( | ) | |||||||||||||
Total other income (expense) | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||
Income (loss) before taxes | ( | ) | |||||||||||||||||
Provision (benefit) for income taxes | ( | ) | |||||||||||||||||
Income (loss) before equity in net income of subsidiaries | ( | ) | |||||||||||||||||
Equity in net income (loss) of subsidiaries | ( | ) | |||||||||||||||||
Income (loss) from continuing operations | $ | $ | $ | $ | ( | ) | $ | ||||||||||||
Income from operations of discontinued businesses | ( | ) | ( | ) | |||||||||||||||
Provision (benefit) from income taxes | ( | ) | ( | ) | |||||||||||||||
Income (loss) from discontinued operations | ( | ) | ( | ) | |||||||||||||||
Net income (loss) | $ | $ | $ | $ | ( | ) | $ | ||||||||||||
Comprehensive income (loss) | $ | $ | $ | $ | ( | ) | $ |
Parent Company | Guarantor Companies | Non-Guarantor Companies | Elimination | Consolidation | |||||||||||||||
Revenue | $ | $ | $ | $ | ( | ) | $ | ||||||||||||
Cost of goods and services | ( | ) | |||||||||||||||||
Gross profit | |||||||||||||||||||
Selling, general and administrative expenses | ( | ) | |||||||||||||||||
Income (loss) from operations | ( | ) | |||||||||||||||||
Other income (expense) | |||||||||||||||||||
Interest income (expense), net | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||
Other, net | ( | ) | ( | ) | ( | ) | |||||||||||||
Total other income (expense) | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||
Income (loss) before taxes | ( | ) | ( | ) | ( | ) | |||||||||||||
Provision (benefit) for income taxes | ( | ) | ( | ) | |||||||||||||||
Income (loss) before equity in net income of subsidiaries | ( | ) | ( | ) | |||||||||||||||
Equity in net income (loss) of subsidiaries | ( | ) | ( | ) | |||||||||||||||
Income (loss) from continuing operations | ( | ) | |||||||||||||||||
Income (loss) from operations of discontinued businesses | |||||||||||||||||||
Provision (benefit) from income taxes | |||||||||||||||||||
Income (loss) from discontinued operations | |||||||||||||||||||
Net Income (loss) | $ | $ | $ | $ | ( | ) | $ | ||||||||||||
Comprehensive income (loss) | $ | $ | $ | $ | ( | ) | $ |
Parent Company | Guarantor Companies | Non-Guarantor Companies | Elimination | Consolidation | |||||||||||||||
Revenue | $ | $ | $ | $ | ( | ) | $ | ||||||||||||
Cost of goods and services | ( | ) | |||||||||||||||||
Gross profit | |||||||||||||||||||
Selling, general and administrative expenses | ( | ) | |||||||||||||||||
Income (loss) from operations | ( | ) | |||||||||||||||||
Other income (expense) | |||||||||||||||||||
Interest income (expense), net | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||
Other, net | ( | ) | ( | ) | ( | ) | |||||||||||||
Total other income (expense) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||
Income (loss) before taxes from continuing operations | ( | ) | |||||||||||||||||
Provision (benefit) for income taxes | ( | ) | ( | ) | ( | ) | |||||||||||||
Income (loss) before equity in net income of subsidiaries | ( | ) | |||||||||||||||||
Equity in net income (loss) of subsidiaries | ( | ) | ( | ) | |||||||||||||||
Income (loss) from continuing operations | ( | ) | |||||||||||||||||
Income from operations of discontinued businesses | |||||||||||||||||||
Provision (benefit) from income taxes | |||||||||||||||||||
Loss from discontinued operations | ( | ) | ( | ) | |||||||||||||||
Net income (loss) | $ | $ | $ | $ | ( | ) | $ | ||||||||||||
Comprehensive income (loss) | $ | $ | $ | $ | ( | ) | $ |
Parent Company | Guarantor Companies | Non-Guarantor Companies | Elimination | Consolidation | |||||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||||||||||
Net income (loss) | $ | $ | $ | $ | ( | ) | $ | ||||||||||||
Net (income) loss from discontinued operations | |||||||||||||||||||
Net cash provided by operating activities | |||||||||||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||||||||||||
Acquisition of property, plant and equipment | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||
Acquired business, net of cash acquired | ( | ) | ( | ) | |||||||||||||||
Proceeds from sale of business | ( | ) | ( | ) | |||||||||||||||
Insurance proceeds | ( | ) | ( | ) | |||||||||||||||
Proceeds from sale of assets | |||||||||||||||||||
Investment purchases | ( | ) | ( | ) | |||||||||||||||
Net cash used in investing activities | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||||||||||
Purchase of shares for treasury | ( | ) | ( | ) | |||||||||||||||
Proceeds from long-term debt | |||||||||||||||||||
Payments of long-term debt | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||
Change in short-term borrowings | ( | ) | ( | ) | |||||||||||||||
Financing costs | ( | ) | ( | ) | |||||||||||||||
Acquisition costs | ( | ) | ( | ) | |||||||||||||||
Dividends paid | ( | ) | ( | ) | |||||||||||||||
Other, net | ( | ) | ( | ) | ( | ) | |||||||||||||
Net cash provided by (used in) financing activities | ( | ) | ( | ) | ( | ) | |||||||||||||
CASH FLOWS FROM DISCONTINUED OPERATIONS: | |||||||||||||||||||
Net cash used in discontinued operations | ( | ) | ( | ) | |||||||||||||||
Effect of exchange rate changes on cash and equivalents | ( | ) | |||||||||||||||||
NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS | ( | ) | |||||||||||||||||
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD | |||||||||||||||||||
CASH AND EQUIVALENTS AT END OF PERIOD | $ | $ | $ | $ | $ |
Parent Company | Guarantor Companies | Non-Guarantor Companies | Elimination | Consolidation | |||||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||||||||||
Net income (loss) | $ | $ | $ | $ | ( | ) | $ | ||||||||||||
Net (income) loss from discontinued operations | ( | ) | ( | ) | |||||||||||||||
Net cash provided by (used in) operating activities | ( | ) | ( | ) | |||||||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||||||||||||
Acquisition of property, plant and equipment | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||
Acquired business, net of cash acquired | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||
Proceeds from sale of business | |||||||||||||||||||
Insurance proceeds (payments) | |||||||||||||||||||
Proceeds from sale of assets | |||||||||||||||||||
Net cash provided by (used in) investing activities | ( | ) | ( | ) | |||||||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||||||||||
Purchase of shares for treasury | ( | ) | ( | ) | |||||||||||||||
Proceeds from long-term debt | |||||||||||||||||||
Payments of long-term debt | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||
Change in short-term borrowings | |||||||||||||||||||
Financing costs | ( | ) | ( | ) | |||||||||||||||
Dividends paid | ( | ) | ( | ) | |||||||||||||||
Other, net | ( | ) | |||||||||||||||||
Net cash provided by (used in) financing activities | ( | ) | |||||||||||||||||
CASH FLOWS FROM DISCONTINUED OPERATIONS: | |||||||||||||||||||
Net cash used in discontinued operations | ( | ) | ( | ) | ( | ) | |||||||||||||
Effect of exchange rate changes on cash and equivalents | ( | ) | |||||||||||||||||
NET INCREASE IN CASH AND EQUIVALENTS | |||||||||||||||||||
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD | |||||||||||||||||||
CASH AND EQUIVALENTS AT END OF PERIOD | $ | $ | $ | $ | $ |
Parent Company | Guarantor Companies | Non-Guarantor Companies | Elimination | Consolidation | |||||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||||||||||
Net income (loss) | $ | $ | $ | $ | ( | ) | $ | ||||||||||||
Net income (loss) from discontinued operations | ( | ) | |||||||||||||||||
Net cash provided by (used in) operating activities | ( | ) | |||||||||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||||||||||||
Acquisition of property, plant and equipment | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||
Acquired business, net of cash acquired | ( | ) | ( | ) | |||||||||||||||
Investment purchases | ( | ) | ( | ) | |||||||||||||||
Proceeds from sale of property, plant and equipment | ( | ) | |||||||||||||||||
Net cash used in investing activities | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||||||||||
Purchase of shares for treasury | ( | ) | ( | ) | |||||||||||||||
Proceeds from long-term debt | |||||||||||||||||||
Payments of long-term debt | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||
Share premium payment on settled debt | ( | ) | ( | ) | |||||||||||||||
Financing costs | ( | ) | ( | ) | |||||||||||||||
Purchase of ESOP shares | ( | ) | ( | ) | |||||||||||||||
Dividends paid | ( | ) | ( | ) | |||||||||||||||
Other, net | ( | ) | ( | ) | |||||||||||||||
Net cash provided by (used in) financing activities | ( | ) | ( | ) | |||||||||||||||
CASH FLOWS FROM DISCONTINUED OPERATIONS: | |||||||||||||||||||
Net cash provided by (used in) discontinued operations | ( | ) | ( | ) | |||||||||||||||
Effect of exchange rate changes on cash and equivalents | |||||||||||||||||||
NET DECREASE IN CASH AND EQUIVALENTS | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD | |||||||||||||||||||
CASH AND EQUIVALENTS AT END OF PERIOD | $ | $ | $ | $ | $ |
Description | Balance at Beginning of Year | Recorded to Cost and Expense | Accounts Written Off, net | Other (1) | Balance at End of Year | ||||||||||||||
FOR THE YEAR ENDED SEPTEMBER 30, 2019 | |||||||||||||||||||
Allowance for Doubtful Accounts | |||||||||||||||||||
Bad debts | $ | $ | ( | ) | $ | $ | |||||||||||||
Sales returns and allowances | ( | ) | |||||||||||||||||
$ | $ | ( | ) | $ | $ | $ | |||||||||||||
Inventory valuation | $ | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||
Deferred tax valuation allowance | $ | $ | $ | $ | $ | ||||||||||||||
FOR THE YEAR ENDED SEPTEMBER 30, 2018 | |||||||||||||||||||
Allowance for Doubtful Accounts | |||||||||||||||||||
Bad debts | $ | $ | ( | ) | $ | $ | $ | ||||||||||||
Sales returns and allowances | ( | ) | |||||||||||||||||
$ | $ | ( | ) | $ | $ | $ | |||||||||||||
Inventory valuation | $ | $ | $ | ( | ) | $ | $ | ||||||||||||
Deferred tax valuation allowance | $ | $ | ( | ) | $ | $ | $ | ||||||||||||
FOR THE YEAR ENDED SEPTEMBER 30, 2017 | |||||||||||||||||||
Allowance for Doubtful Accounts | |||||||||||||||||||
Bad debts | $ | $ | $ | ( | ) | $ | $ | ||||||||||||
Sales returns and allowances | ( | ) | |||||||||||||||||
$ | $ | $ | ( | ) | $ | $ | |||||||||||||
Inventory valuation | $ | $ | $ | $ | $ | ||||||||||||||
Deferred tax valuation allowance | $ | $ | $ | $ | $ | ||||||||||||||
Note (1): For the year ended September 30, 2018, Other primarily consists of opening balances of reserves assumed from acquisitions. |
(i) | pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of Griffon’s assets; |
(ii) | provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that Griffon’s receipts and expenditures are being made only in accordance with authorizations of Griffon’s management and directors; and |
(iii) | provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of Griffon’s assets that could have a material effect on the financial statements. |
(a) | (1) | Financial Statements – Covered by Report of Independent Registered Public Accounting Firm | ||
(A) | Consolidated Balance Sheets at September 30, 2019 and 2018 | |||
(B) | Consolidated Statements of Operations and Comprehensive Income (Loss) for the Fiscal Years Ended September 30, 2019, 2018 and 2017 | |||
(C) | Consolidated Statements of Cash Flows for the Fiscal Years Ended September 30, 2019, 2018 and 2017 | |||
(D) | Consolidated Statements of Shareholders’ Equity for the Fiscal Years Ended September 30, 2019, 2018 and 2017 | |||
(E) | Notes to the Consolidated Financial Statements | |||
(2) | Financial Statement Schedule – Covered by Report of Independent Registered Public Accounting Firm | |||
Schedule II – Valuation and Qualifying Accounts | ||||
All other schedules are not required and have been omitted. | ||||
(3) | The information required by this Section (a)(3) of Item 15 is set forth on the exhibit index that follows the signatures page of this Form 10-K. | |||
(b) | Reference is made to the exhibit index that follows the signatures page of this Form 10-K. |
Exhibit No. | ||
2.1 | Asset and Stock Purchase Agreement, dated as of September 1, 2017, by and between Emerson Electric Co. and ClosetMaid Acquisition Corp. (Exhibit 2.1 to the Current Report on Form 8-K filed September 8, 2017 (Commission File No. 1-06620)). | |
2.2 | Amendment No. 1 to Asset and Stock Purchase Agreement dated as of September 1, 2017, entered into September 25, 2017, by and among Emerson Electric Co. and ClosetMaid LLC (Exhibit 2.1 to Current Report on Form 8-K dated September 27, 2017 (Commission File No. 1-06620)). | |
2.3 | Transaction Agreement, dated as of November 15, 2017, by and among Clopay Ames True Temper Holding Corp., Clopay Plastic Products Company, Inc. and Berry Global, Inc. (Exhibit 2.1 to the Registrant's Current Report on Form 8-K filed November 21, 2017 (Commission File No. 1-06620)). | |
3.1 | ||
3.2 | ||
4.1 | ||
4.2 | ||
4.3 | ||
10.1** | ||
10.2 | ||
10.3** | ||
10.4** | ||
10.5** |
10.6** | ||
10.7** | ||
10.8** | ||
10.9** | ||
10.10** | ||
10.11** | ||
10.12 | ||
10.13 | ||
10.14** |
Exhibit No. | ||
10.15** | ||
10.16** | ||
10.17** | Griffon Corporation Director Compensation Program, amended and restated as of January 31, 2018 (Exhibit 10.3 to the Quarterly Report on Form 10-Q for the quarter ended December 31, 2017 (Commission File No. 1-06620)). | |
10.18** | ||
10.19** | ||
10.20** | ||
10.21** | ||
10.22** | ||
10.23** | ||
10.24 | ||
10.25 | ||
10.26 | ||
10.27 | Second Amendment, dated as of October 2, 2017, to Third Amended and Restated Credit Agreement, dated as of March 22, 2016, among Griffon Corporation, the several banks and other financial institutions or entities from time to time party thereto, JPMorgan Chase Bank, N.A., as administrative agent, and the other agents party thereto (Exhibit 99.3 to Current Report on Form 8-K dated October 2, 2017 (Commission File No. 1-06620)). | |
10.28* | Third Amendment, dated as of February 9, 2018, to Third Amended and Restated Credit Agreement, dated as of March 22, 2016, among Griffon Corporation, the several banks and other financial institutions or entities from time to time party thereto, JPMorgan Chase Bank, N.A., as administrative agent, and the other agents party thereto. | |
10.29 | Fourth Amendment, dated as of May 31, 2018, to Third Amended and Restated Credit Agreement, dated as of March 22, 2016, among Griffon Corporation, the several banks and other financial institutions or entities from time to time party thereto, JPMorgan Chase Bank, N.A., as administrative agent, and the other agents party thereto (Exhibit 99.1 to the Registrant's Current Report on Form 8-K filed June 1, 2018 (Commission File No. 1-06620)). |
Exhibit No. | ||
10.30 | Fifth Amendment, dated as of February 22, 2019, to Third Amended and Restated Credit Agreement, dated as of March 22, 2016, among Griffon Corporation, the several banks and other financial institutions or entities from time to time parties thereto, Bank of America, N.A., as administrative agent, and the other agents party thereto (Exhibit 10.1 to Quarterly Report on Form 10-Q for the quarter ended March 31, 2019). | |
10.31 | Underwriting Agreement, dated June 14, 2018, by and among Griffon Corporation, GS Direct LLC, JPMorgan Securities LLC and Goldman Sachs & Co. LLC. (Exhibit 1.1 to Current Report on Form 8-K dated June 19, 2018 (Commission File No. 1-06620)). | |
14.1 | ||
21* | ||
23* | ||
31.1* | ||
31.2* | ||
32* |
101.INS | XBRL Instance Document*** | |
101.SCH | XBRL Taxonomy Extension Schema Document*** | |
101.CAL | XBRL Taxonomy Extension Calculation Document*** | |
101.DEF | XBRL Taxonomy Extension Definitions Document*** | |
101.LAB | XBRL Taxonomy Extension Labels Document*** | |
101.PRE | XBRL Taxonomy Extension Presentation Document*** |
_______________________ | |
* | Filed herewith. All other exhibits are incorporated herein by reference to the exhibit indicated in the parenthetical references. |
** | Indicates a management contract or compensatory plan or arrangement. |
*** | In accordance with Regulation S-T, the XBRL-related information in Exhibit 101 to this Annual Report on Form 10-K shall be deemed to be “furnished” and not “filed.” |
Griffon Corporation | ||
By: | /s/ Ronald J. Kramer | |
Ronald J. Kramer, | ||
Chief Executive Officer |
/s/ Ronald J. Kramer | Chairman of the Board and Chief Executive Officer | |
Ronald J. Kramer | (Principal Executive Officer) | |
/s/ Robert F. Mehmel | President, Chief Operating Officer and | |
Robert F. Mehmel | Director | |
/s/ Brian G. Harris | Senior Vice President and Chief Financial Officer | |
Brian G. Harris | (Principal Financial Officer) | |
/s/ W. Christopher Durborow | Vice President, Controller and Chief Accounting Officer | |
W. Christopher Durborow | (Principal Accounting Officer) | |
/s/ Henry A. Alpert | Director | |
Henry A. Alpert | ||
/s/ Thomas Brosig | Director | |
Thomas Brosig | ||
/s/ Louis J. Grabowsky | Director | |
Louis J. Grabowsky | ||
/s/ Robert G. Harrison | Director | |
Robert G. Harrison | ||
/s/ Lacy M. Johnson | Director | |
Lacy M. Johnson | ||
/s/ Victor Eugene Renuart | Director | |
Victor Eugene Renuart | ||
/s/ James W. Sight | Director | |
James W. Sight | ||
/s/ Kevin F. Sullivan | Director | |
Kevin F. Sullivan | ||
/s/ Samanta Hegedus Stewart | Director | |
Samanta Hegedus Stewart | ||
/s/ Cheryl L. Turnbull | Director | |
Cheryl L. Turnbull | ||
/s/ William H. Waldorf | Director | |
William H. Waldorf |
Name of Subsidiary | Jurisdiction of Incorporation | |
Clopay Ames Inc. | Delaware | |
Clopay Ames LLC | Delaware | |
Clopay Ames Holding Corp. | Delaware | |
Clopay Corporation | Delaware | |
CornellCookson, LLC | Delaware | |
Cornell Real Estate Holdings, LLC | Arizona | |
Cornell Storefront Systems, Inc. | Delaware | |
CC Installation Company, Inc. | Delaware | |
The Ames Companies, Inc. | Delaware | |
ATT Southern, Inc. | Delaware | |
1346039 Alberta ULC | Canada | |
Garant GP | Canada | |
Griffon Australia Holdings PTY Ltd | Australia | |
AMES Australasia Pty Ltd. | Australia | |
Northcote Pots Australia Pty Ltd. | Australia | |
Northcote Imports Pty Ltd. | Australia | |
Ames New Zealand Ltd. | New Zealand | |
Ames True Temper Australia Pty Ltd. | Australia | |
The Ames Companies UK Ltd. | United Kingdom | |
Altia Holdings Limited | United Kingdom | |
Kelkay Limited | United Kingdom | |
La Hacienda Limited | United Kingdom | |
ClosetMaid LLC | Delaware | |
Comercializadora ClosetMaid S. de R.L. de C.V. | Mexico | |
ClosetMaid Reynosa S. de R.L. de C.V. | Mexico | |
ClosetMaid (Jiangmen) Storage Limited | China | |
Gritel Holding Company, Inc. | Delaware | |
Telephonics Corporation | Delaware | |
Systems Engineering Group, Inc. | Maryland |
1. | I have reviewed this annual report on Form 10-K of Griffon Corporation; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Ronald J. Kramer | |
Ronald J. Kramer | |
Chief Executive Officer | |
(Principal Executive Officer) |
1. | I have reviewed this annual report on Form 10-K of Griffon Corporation; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Brian G. Harris | |
Brian G. Harris | |
Chief Financial Officer | |
(Principal Financial Officer) |
1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Griffon. |
/s/ Ronald J. Kramer | |
Name: | Ronald J. Kramer |
Title: | Chief Executive Officer |
(Principal Executive Officer) | |
Date: | November 21, 2019 |
/s/ Brian G. Harris | |
Name: | Brian G. Harris |
Title: | Chief Financial Officer |
(Principal Financial Officer) | |
Date: | November 21, 2019 |
STOCKHOLDERS' EQUITY AND EQUITY COMPENSATION (Details) - Summary of stock option activity |
Sep. 30, 2018
$ / shares
shares
|
---|---|
Shares | |
Outstanding (in Shares) | shares | 350,000 |
Outstanding (in Shares) | shares | 350,000 |
Weighted Average Exercise Price | |
Outstanding (in Dollars per share) | $ / shares | $ 20.00 |
Outstanding (in Dollars per share) | $ / shares | $ 20.00 |
ACCRUED LIABILITIES (Details) - Schedule of accrued liabilities - USD ($) $ in Thousands |
Sep. 30, 2019 |
Sep. 30, 2018 |
---|---|---|
Payables and Accruals [Abstract] | ||
Compensation | $ 61,639 | $ 50,251 |
Interest | 4,501 | 4,776 |
Warranties and rebates | 13,171 | 11,227 |
Insurance | 11,996 | 25,329 |
Rent, utilities and freight | 5,326 | 4,830 |
Income and other taxes | 7,814 | 8,016 |
Marketing and advertising | 4,417 | 3,685 |
Acquisition related accruals | 0 | 17,448 |
Other | 15,801 | 13,630 |
Total | $ 124,665 | $ 139,192 |
RELATED PARTIES (Details) - USD ($) $ in Thousands |
Oct. 02, 2017 |
Jun. 19, 2018 |
Nov. 16, 2017 |
Nov. 15, 2017 |
May 18, 2016 |
Feb. 27, 2014 |
Dec. 31, 2008 |
---|---|---|---|---|---|---|---|
RELATED PARTIES (Details) [Line Items] | |||||||
Common Stock, Number of Shares Held by Shareholder | 5,583,375 | ||||||
GS Direct [Member] | |||||||
RELATED PARTIES (Details) [Line Items] | |||||||
Investment Owned, Balance, Shares | 10,000,000 | ||||||
Discontinued Operations, Held-for-sale [Member] | Plastics [Member] | |||||||
RELATED PARTIES (Details) [Line Items] | |||||||
Disposal group, including discontinued operation, consideration | $ 465,000 | $ 465,000 | |||||
Senior Notes Two Thousand Twenty Two [Member] | |||||||
RELATED PARTIES (Details) [Line Items] | |||||||
Stated percentage | 5.25% | 5.25% | 5.25% | ||||
Senior note due 2022 [Member] | Senior notes [Member] | |||||||
RELATED PARTIES (Details) [Line Items] | |||||||
Proceeds from issuance of debt | $ 275,000 | ||||||
Stated percentage | 5.25% |
QUARTERLY FINANCIAL INFORMATION (UNAUDITED) (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Quarterly Financial Information | Quarterly results of continuing operations for 2019 and 2018 were as follows:
|
EMPLOYEE BENEFIT PLANS (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Net Benefit Costs | Net periodic costs (benefits) were as follows:
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Schedule of Assumptions Used | The weighted-average assumptions used in determining the net periodic (benefits) costs were as follows:
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Schedule Of Plan Assets And Benefit Obligation Of Defined Benefit Plan | Plan assets and benefit obligation of the defined and supplemental benefit plans were as follows:
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Schedule Of Weighted Average Assumptions Used in Defined And Supplemental Benefit Obligations | The weighted-average assumptions used in determining the benefit obligations were as follows:
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Schedule Of Actual And Weighted Average Assets Allocation for Qualified Benefit plans | The actual and weighted-average asset allocation for qualified benefit plans were as follows:
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Schedule of Expected Benefit Payments | Estimated future benefit payments to retirees, which reflect expected future service, are as follows:
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Schedule Of Fair Value Of Pension And Post Retirement Plan Assets By Asset Category | The following table presents the fair values of Griffon’s pension and post-retirement plan assets by asset category:
The following table represents level 3 significant unobservable inputs for the year ended September 30, 2019:
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Employee Stock Ownership Plan (ESOP) Disclosures | The ESOP shares were as follows:
|
EARNINGS PER SHARE |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EARNINGS PER SHARE | EARNINGS PER SHARE Basic and diluted EPS for 2019, 2018 and 2017 were determined using the following information (in thousands):
Shares of the ESOP that have been allocated to employee accounts are treated as outstanding in determining earnings per share.
|
OTHER INCOME (EXPENSE) |
12 Months Ended |
---|---|
Sep. 30, 2019 | |
Other Income and Expenses [Abstract] | |
OTHER INCOME (EXPENSE) | OTHER INCOME (EXPENSE) Other income (expense) included $608, ($200) and $(723) for 2019, 2018 and 2017, respectively, of currency exchange gains (losses) in connection with the translation of receivables and payables denominated in currencies other than the functional currencies of Griffon and its subsidiaries, as well as $(40), $1,184 and $53, respectively, of investment income.
|
SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS | SCHEDULE II GRIFFON CORPORATION VALUATION AND QUALIFYING ACCOUNTS For the Years Ended September 30, 2019, 2018 and 2017 (in thousands)
|
OTHER INCOME (EXPENSE) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Sep. 30, 2019 |
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Other Income and Expenses [Abstract] | |||
Currency exchange gains (losses) | $ 608 | $ (200) | $ (723) |
Investment income (loss) | $ (40) | $ 1,184 | $ 53 |
REPORTABLE SEGMENTS REPORTABLE SEGMENTS (Details) - Schedule of Disaggregated Revenue by Geographic Region $ in Thousands, $ in Thousands |
12 Months Ended | ||||
---|---|---|---|---|---|
Sep. 30, 2019
USD ($)
|
Sep. 30, 2019
CAD ($)
|
Sep. 30, 2018
USD ($)
|
Sep. 30, 2018
CAD ($)
|
Sep. 30, 2017
USD ($)
|
|
Segment Reporting Information [Line Items] | |||||
Revenue | $ 2,209,289 | $ 3,500 | $ 1,977,918 | $ 700 | $ 1,524,997 |
Consumer And Professional Products Segment [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 1,000,608 | ||||
Home and Building Products (HBP) [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 873,640 | ||||
Defense Electronics Segment [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 335,041 | ||||
UNITED STATES | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 1,737,263 | ||||
UNITED STATES | Consumer And Professional Products Segment [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 690,772 | ||||
UNITED STATES | Home and Building Products (HBP) [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 820,396 | ||||
UNITED STATES | Defense Electronics Segment [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 226,095 | ||||
Europe [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 100,308 | ||||
Europe [Member] | Consumer And Professional Products Segment [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 63,284 | ||||
Europe [Member] | Home and Building Products (HBP) [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 109 | ||||
Europe [Member] | Defense Electronics Segment [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 36,915 | ||||
CANADA | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 122,367 | ||||
CANADA | Consumer And Professional Products Segment [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 72,327 | ||||
CANADA | Home and Building Products (HBP) [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 39,472 | ||||
CANADA | Defense Electronics Segment [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 10,568 | ||||
AUSTRALIA | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 169,019 | ||||
AUSTRALIA | Consumer And Professional Products Segment [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 165,291 | ||||
AUSTRALIA | Home and Building Products (HBP) [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 16 | ||||
AUSTRALIA | Defense Electronics Segment [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 3,712 | ||||
All Other Countries [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 80,332 | ||||
All Other Countries [Member] | Consumer And Professional Products Segment [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 8,934 | ||||
All Other Countries [Member] | Home and Building Products (HBP) [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 13,647 | ||||
All Other Countries [Member] | Defense Electronics Segment [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | $ 57,751 |
WARRANTY LIABILITY (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Product Warranties Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Product Warranty Liability | Changes in Griffon’s warranty liability, included in Accrued liabilities, were as follows:
|
PROPERTY, PLANT AND EQUIPMENT (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment | The following table details the components of property, plant and equipment, net:
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DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) |
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Accounting Policies [Abstract] | |||||||||||||
Consolidation | Consolidation The consolidated financial statements include the accounts of Griffon and all subsidiaries. Intercompany accounts and transactions have been eliminated in consolidation. The results of operations of acquired businesses are included from the dates of acquisitions. |
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Earnings per share | Earnings per share Due to rounding, the sum of earnings per share may not equal earnings per share of Net income.
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Discontinued operations – Installation Services | Discontinued operations Installation Services In 2008, as a result of the downturn in the residential housing market, Griffon exited substantially all operating activities of its Installation Services segment which sold, installed and serviced garage doors and openers, fireplaces, floor coverings, cabinetry and a range of related building products, primarily for the new residential housing market. Operating results of substantially all of this segment have been reported as discontinued operations in the Consolidated Statements of Operations and Comprehensive Income (Loss) for all periods presented; Installation Services is excluded from segment reporting. During 2017, Griffon recorded $5,700 of reserves in discontinued operations related to historical environmental remediation efforts and to increase the reserve for homeowner association claims related to the Clopay Services Corporation discontinued operations in 2008. |
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Reclassifications | Reclassifications Certain amounts in prior years have been reclassified to conform to the current year presentation.
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Use of estimates | Use of estimates |
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Cash and equivalents | Cash and equivalents Griffon considers all highly liquid investments purchased with an initial maturity of three months or less to be cash equivalents. Cash equivalents primarily consist of overnight commercial paper, highly-rated liquid money market funds backed by U.S. Treasury securities and U.S. Agency securities, as well as insured bank deposits. Griffon had cash in non-U.S. bank accounts of approximately $34,200 and $24,900 at September 30, 2019 and 2018, respectively. Substantially all U.S. cash and equivalents are in excess of FDIC insured limits. Griffon regularly evaluates the financial stability of all institutions and funds that hold its cash and equivalents.
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Fair value of financial instruments | Fair value of financial instruments The carrying values of cash and cash equivalents, accounts receivable, accounts and notes payable and revolving credit debt approximate fair value due to either the short-term nature of such instruments or the fact that the interest rate of the revolving credit debt is based upon current market rates. The fair value hierarchy, as outlined in the applicable accounting guidance, establishes a fair value hierarchy that requires the Company to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the hierarchy is based on the lowest level of input that is significant to the fair value measurement. The accounting guidance establishes three levels of inputs that may be used to measure fair value, as follows:
The fair value of Griffon’s 2022 senior notes approximated $1,010,000, on September 30, 2019. Fair values were based upon quoted market prices (level 1 inputs). Insurance contracts with a value of $3,408 at September 30, 2019 are measured and recorded at fair value based upon quoted prices in active markets for similar assets (level 2 inputs) and are included in Other current assets on the consolidated balance sheet. Items Measured at Fair Value on a Recurring Basis At September 30, 2019 and 2018, trading securities, measured at fair value based on quoted prices in active markets for similar assets (level 2 inputs), with a fair value of $2,754 ($2,233 cost basis) and $2,644 ($2,086 cost basis), respectively, were included in Prepaid and other current assets on the Consolidated Balance Sheets. During 2018, the Company settled trading securities with proceeds totaling $4,126 and recognized a loss of $1,251 in Other income (expense). Realized and unrealized gains and losses on trading securities and realized gains and losses on available-for-sale securities are included in Other income in the Consolidated Statements of Operations and Comprehensive Income (Loss). In the normal course of business, Griffon’s operations are exposed to the effect of changes in foreign currency exchange rates. To manage these risks, Griffon may enter into various derivative contracts such as foreign currency exchange contracts, including forwards and options. During 2019 and 2018, Griffon entered into several such contracts in order to lock into a foreign currency rate for planned settlements of trade and inter-company liabilities payable in USD. At September 30, 2019 and 2018, Griffon had $14,000 and $12,000 of Australian dollar contracts at a weighted average rate of $1.48 and $1.38, respectively, which qualified for hedge accounting. These hedges were all deemed effective as cash flow hedges with gains and losses related to changes in fair value deferred and recorded in Other comprehensive income (loss) and Prepaid and other current assets, or Accrued liabilities, until settlement. Upon settlement, gains and losses were recognized in the Consolidated Statements of Operations and Comprehensive Income (Loss) in Cost of goods and services. AOCI included deferred gains of $327 ($213, net of tax) and deferred gains of $443 ($288, net of tax) at September 30, 2019 and 2018, respectively. Upon settlement, gains of $1,932 and $657 were recognized in the Consolidated Statements of Operations and Comprehensive Income (Loss) in Cost of goods and services ("COGS") during 2019 and 2018, respectively. All contracts expire in 1 to 90 days. At September 30, 2019 and 2018, Griffon had $3,500 and $700, respectively, of Canadian dollar contracts at a weighted average rate of $1.32 and $1.29. These contracts, which protect Canadian operations from currency fluctuations for U.S. dollar based purchases, do not qualify for hedge accounting and fair value gains (losses) of $14 and $(7) were recorded in Other assets and to Other income for the outstanding contracts, based on similar contract values (level 2 inputs), for the years ended September 30, 2019 and 2018, respectively. Realized gains and (losses) of $68 and $(161), were recorded in Other income during 2019 and 2018, respectively. All contracts expire in 30 to 360 days. Pension plan assets with a fair value of $145,319 at September 30, 2019, are measured and recorded at fair value based upon quoted prices in active markets for identical assets (level 1 inputs), quoted market prices for similar assets (level 2 inputs) and fair value assumptions for unobservable inputs in which little or no market data exists (level 3).
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Non-U.S. currency translation | Non-U.S. currency translation Assets and liabilities of non-U.S. subsidiaries, where the functional currency is not the U.S. dollar, have been translated at year-end exchange rates and profit and loss accounts have been translated using weighted average exchange rates. Adjustments resulting from currency translation have been recorded in the equity section of the balance sheet in AOCI as cumulative translation adjustments. Cumulative translation adjustments were gains (losses) of ($8,460) and $9,403 for 2019 and 2018, respectively. As of September 30, 2019 and 2018, the foreign currency translation components of Accumulated other comprehensive loss were $31,284 and $22,824, respectively. Assets and liabilities of an entity that are denominated in currencies other than that entity’s functional currency are re-measured into the functional currency using period end exchange rates, or historical rates where applicable to certain balances. Gains and losses arising on remeasurements are recorded within the Consolidated Statement of Operations and Comprehensive Income (Loss) as a component of Other income (expense). |
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Revenue recognition | Revenue recognition On October 1, 2018, the Company adopted the requirements of Accounting Standard Codification (“ASC”) Topic 606, “Revenue from Contracts with Customers”, using the modified retrospective method applied to those contracts that were not completed as of October 1, 2018. The Company’s comparative consolidated results over the prior period have not been adjusted and continue to be reported under previously issued guidance, ASC 605 - Revenue Recognition, which required that revenue was accounted for when the earnings process was complete. This accounting standard did not materially impact the Company’s revenue recognition practices in our CPP and HBP Segments, however, it impacted revenue recognition practices in our Defense Electronics Segment. The impact of adopting this accounting standard was not material to the Company’s consolidated financial statements as of and for the year ended September 30, 2019. Under the modified retrospective method, the Company recognized the cumulative effect of initially applying this accounting standard as an adjustment to the opening balance in retained earnings of approximately $5,618 as of October 1, 2018, primarily relating to certain contracts in the Defense Electronics Segment containing provisions for radar and communication products that have an alternative use and / or no right to payment. For these contracts, the Company now recognizes revenue at a point in time, rather than over time as this measure more accurately depicts the transfer of control to the customer relative to the goods or services promised under the contract. The Company’s accounting policy has been updated to align with the new standard to recognize revenue when the following criteria are met: 1) Contract with the customer has been identified; 2) Performance obligations in the contract have been identified; 3) Transaction price has been determined; 4) Transaction price has been allocated to the performance obligations; and 5) Revenue is recognized when (or as) performance obligations are satisfied. Refer to Note 2, Revenue for a discussion of our revenue recognition practices for each business segment. Performance Obligations A performance obligation is a promise in a contract to transfer a distinct good or service, or a bundle of goods or services, to the customer, and is the unit of accounting under ASC Topic 606. A contract with a customer is an agreement which both parties have approved, that creates enforceable rights and obligations, has commercial substance and with respect to which payment terms are identified and collectability is probable. Once the Company has entered a contract or purchase order, it is evaluated to identify performance obligations. For each performance obligation, revenue is recognized when control of the promised products is transferred to the customer, or services are satisfied under the contract or purchase order, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those products or services (the transaction price). A contract's transaction price is allocated to each distinct performance obligation and recognized as revenue when each performance obligation is satisfied. A majority of the Company’s contracts have a single performance obligation which represents, in most cases, the product being sold to the customer. To a lesser extent, some contracts include multiple performance obligations such as a product, the related installation, and extended warranty services. These contracts require judgment in determining the number of performance obligations. Over 80% of the Company’s performance obligations are recognized at a point in time that relates to the manufacture and sale of a broad range of products and components within the CPP and HBP Segments, and revenue is recognized when title, and risk and rewards of ownership, have transferred to the customer. Less than 20% of the Company’s performance obligations are recognized over time or under the percentage-of-completion method that relate to prime or subcontractors from contract awards with the U.S. Government, as well as foreign governments and other commercial customers within our Defense Electronics Segment. Sales recognized over time are generally accounted for using an input measure to determine progress completed at the end of the period. We believe that cumulative costs incurred to date as a percentage of estimated total contract costs at completion is an appropriate measure of progress towards satisfaction of performance obligations, as it most accurately depicts the progress of our work and transfer of control to our customers. Refer to Note 2, Revenue for a discussion of our revenue recognition practices for each of our reportable segments.
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Accounts receivable, allowance for doubtful accounts and concentrations of credit risk | Accounts receivable, allowance for doubtful accounts and concentrations of credit risk Accounts receivable is composed principally of trade accounts receivable, that arise from the sale of goods or services on account, and is stated at historical cost. A substantial portion of Griffon’s trade receivables are from customers within the CPP and HBP businesses, of which the largest customer is Home Depot, whose financial condition is dependent on the construction and related retail sectors of the economy. As a percentage of consolidated accounts receivable, U.S. Government related programs were 8% and Home Depot was 12%. Griffon performs continuing evaluations of the financial condition of its customers, and although Griffon generally does not require collateral, letters of credit may be required from customers in certain circumstances. Trade receivables are recorded at the stated amount, less allowance for doubtful accounts and, when appropriate, for customer program reserves and cash discounts. The allowance represents estimated uncollectible receivables associated with potential customer defaults on contractual obligations (usually due to customers’ potential insolvency). The allowance for doubtful accounts includes amounts for certain customers where a risk of default has been specifically identified, as well as an amount for customer defaults based on a formula when it is determined the risk of some default is probable and estimable, but cannot yet be associated with specific customers. The provision related to the allowance for doubtful accounts is recorded in Selling, general and administrative ("SG&A") expenses. The Company writes-off accounts receivable when they are deemed to be uncollectible.
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Contract costs and recognized income not yet billed | Contract costs and recognized income not yet billed |
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Inventories | Inventories Inventories, stated at the lower of cost (first-in, first-out or average) or market, include material, labor and manufacturing overhead costs. Griffon’s businesses typically do not require inventory that is susceptible to becoming obsolete or dated. In general, Telephonics sells products in connection with programs authorized and approved under contracts awarded by the U.S. Government or agencies thereof and in accordance with customer specifications. HBP produces residential and commercial sectional garage doors, commercial rolling steel door and grille products, and CPP produces long-handled tools and landscaping products, and storage and organizational products, both in response to orders from customers of retailers and dealers or based on expected orders, as applicable. |
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Property, plant and equipment | Property, plant and equipment Property, plant and equipment includes the historical cost of land, buildings, equipment and significant improvements to existing plant and equipment or, in the case of acquisitions, a fair market value appraisal of such assets completed at the time of acquisition. Expenditures for maintenance, repairs and minor renewals are expensed as incurred. When property or equipment is sold or otherwise disposed of, the related cost and accumulated depreciation is removed from the respective accounts and the gain or loss is recognized. No event or indicator of impairment occurred during the three years ended September 30, 2019, which would require additional impairment testing of property, plant and equipment. Depreciation expense, which includes amortization of assets under capital leases, was $51,926, $46,733 and $41,220 in 2019, 2018 and 2017, respectively, and was calculated on a straight-line basis over the estimated useful lives of the assets. Depreciation included in SG&A expenses was $19,026, $16,306 and $12,995 in 2019, 2018 and 2017. The remaining components of depreciation, attributable to manufacturing operations, are included in Cost of goods and services. Estimated useful lives for property, plant and equipment are as follows: buildings and building improvements, 25 to 40 years; machinery and equipment, 2 to 15 years; and leasehold improvements, over the term of the lease or life of the improvement, whichever is shorter.
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Goodwill and indefinite-lived intangibles | Goodwill and indefinite-lived intangibles Goodwill is the excess of the acquisition cost of a business over the fair value of the identifiable net assets acquired. Goodwill is not amortized, but is subject to an annual impairment test unless during an interim period, impairment indicators such as a significant change in the business climate exist. In the fourth quarter of fiscal 2019, Griffon modified its reportable segment structure to provide investors with improved visibility after a series of portfolio repositioning actions which included the divestiture of the Plastics business, the acquisition of ClosetMaid and its subsequent integration into AMES, and the acquisition of CornellCookson by Clopay. Griffon now defines its reporting units as three reportable segments: the newly formed Consumer and Professional Products segment, which consists of AMES, Home and Building Products segment, which consists of Clopay, and Defense Electronics segment, which consists of Telephonics Corporation. Before changing its reportable segment structure, the Company completed its annual impairment review of its legacy HBP reporting unit, which also was its legacy reportable segment, and determined that the fair value of the legacy HBP reporting unit substantially exceeded the carrying value of the assets, as performed under step one, and no impairment existed. Griffon also performed an impairment test of goodwill at Griffon's new reporting unit level as of September 30, 2019. The performance of the test involves a two-step process. The first step involves comparing the fair value of Griffon’s reporting units with the reporting unit’s carrying amount, including goodwill. Griffon generally determines the fair value of its reporting units using the income approach methodology of valuation that includes the present value of expected future cash flows. This method uses market assumptions specific to Griffon’s reporting units. If the carrying amount of a reporting unit exceeds the reporting unit’s fair value, Griffon performs the second step of the goodwill impairment test to determine the amount of impairment loss. The second step compares the implied fair value of the reporting unit’s goodwill with the carrying amount of that goodwill. Griffon used 5 year projections and a 3.0% terminal value to which discount rates between 7% and 9.5% were applied to calculate each unit’s fair value. To substantiate fair values derived from the income approach methodology of valuation, the implied fair value was compared to the marketplace fair value of a comparable industry grouping for reasonableness. Further, the fair values were reconciled to Griffon’s market capitalization. Both market comparisons supported the implied fair values. 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 Griffon’s control, or significant underperformance relative to historical or project future operating results, could result in a significantly different estimate of the fair value of the reporting units, which could result in a future impairment charge (level 3 inputs). Based upon the results of the annual impairment review, it was determined that the fair value of each reporting unit substantially exceeded the carrying value of the assets, as performed under step one, and no impairment existed. Similar to goodwill, Griffon tests indefinite-lived intangible assets at least annually and when indicators of impairment exist. Griffon uses a relief from royalty method to calculate and compare the fair value of the intangible to its book value. This method uses market assumptions specific to Griffon’s reporting units, which are reasonable and supportable. If the fair value is less than the book value of the indefinite-lived intangibles, an impairment charge would be recognized.
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Definite-lived long-lived assets | Definite-lived long-lived assets Amortizable intangible assets are carried at cost less accumulated amortization. For financial reporting purposes, definite-lived intangible assets are amortized on a straight-line basis over their useful lives, generally eight to twenty-five years. Long-lived assets and certain identifiable intangible assets to be held and used are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Determination of recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the asset and its eventual disposition. |
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Income taxes | Income taxes Income taxes are accounted for under the liability method. Deferred taxes reflect the tax consequences on future years of differences between the tax basis of assets and liabilities and their financial reporting amounts. The carrying value of Griffon’s deferred tax assets is dependent upon Griffon’s ability to generate sufficient future taxable income in certain tax jurisdictions. Should Griffon determine that it is more likely than not that some portion of the deferred tax assets will not be realized, a valuation allowance against the deferred tax assets would be established in the period such determination was made. Griffon provides for uncertain tax positions and any related interest and penalties based upon Management’s assessment of whether a tax benefit is more likely than not of being sustained upon examination by tax authorities. At September 30, 2019 Griffon believes that it has appropriately accounted for all unrecognized tax benefits. As of September 30, 2019, 2018 and 2017, Griffon has recorded unrecognized tax benefits in the amount of $4,061, $4,519 and $4,825, respectively. Accrued interest and penalties related to income tax matters are recorded in the provision for income taxes. |
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Research and development costs, shipping and handling costs and advertising costs | Research and development costs, shipping and handling costs and advertising costs Research and development costs not recoverable under contractual arrangements are charged to SG&A expense as incurred and amounted to approximately $15,400 in both 2019 and 2018, and $17,700 in 2017. SG&A expenses include shipping and handling costs of $66,400 in 2019, $59,600 in 2018 and $32,500 in 2017 and advertising costs, which are expensed as incurred, of $20,000 in 2019, $21,000 in 2018 and $22,000 in 2017.
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Risk, retention and insurance | Risk, retention and insurance Griffon’s property and casualty insurance programs contain various deductibles that, based on Griffon’s experience, are reasonable and customary for a company of its size and risk profile. Griffon generally maintains deductibles for claims and liabilities related primarily to workers’ compensation, general, product and automobile liability as well as property damage and business interruption losses resulting from certain events. Griffon does not consider any of the deductibles to represent a material risk to Griffon. Griffon accrues for claim exposures that are probable of occurrence and can be reasonably estimated. Insurance is maintained to transfer risk beyond the level of self-retention and provides protection on both an individual claim and annual aggregate basis. |
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Pension benefits | Pension benefits Griffon sponsors defined and supplemental benefit pension plans for certain retired employees. Annual amounts relating to these plans are recorded based on actuarial projections, which include various actuarial assumptions, including discount rates, assumed rates of return, compensation increases and turnover rates. Actuarial assumptions used to determine pension liabilities, assets and expense are reviewed annually and modified based on current economic conditions and trends. The expected return on plan assets is determined based on the nature of the plan's investments and expectations for long-term rates of return. The discount rate used to measure obligations is based on a corporate bond spot-rate yield curve that matches projected future benefit payments, with the appropriate spot rate applicable to the timing of the projected future benefit payments. 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 assumptions may materially impact Griffon’s financial position or results of operations. All of the defined benefit plans are frozen and have ceased accruing benefits.
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Recently issued effective accounting pronouncements | Newly issued but not yet effective accounting pronouncements In April 2019, the FASB issued guidance relating to accounting for credit losses on financial instruments, including trade receivables, and derivatives and hedging. This guidance is effective for all entities for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years, with early adoption permitted, and will be effective for the Company beginning in 2020. We are currently evaluating the effects that the adoption of this guidance will have on our consolidated financial statements and the related disclosures. In February 2018, the FASB issued guidance that allows companies to reclassify stranded tax effects resulting from the 2017 Tax Cuts and Jobs Act ("TCJA"), from accumulated other comprehensive income to retained earnings. This guidance is effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years, with early adoption permitted, and will be effective for the Company beginning in 2020. We are currently evaluating the effects that the adoption of this guidance will have on our consolidated financial statements and the related disclosures. In August 2018, the FASB issued guidance which modifies the disclosures on fair value measurements by removing the requirement to disclose the amount and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy and the policy for timing of such transfers. This guidance expands the disclosure requirements for Level 3 fair value measurements, primarily focused on changes in unrealized gains and losses included in other comprehensive income (loss). This guidance is effective for fiscal years beginning after December 15, 2019, with early adoption permitted, and will be effective for the Company beginning in 2021. We are currently evaluating the effects that the adoption of this guidance will have on our consolidated financial statements and the related disclosures. In August 2018, the FASB issued guidance to clarify disclosure requirements related to defined benefit pension and other post-retirement plans. The guidance is effective for fiscal years beginning after December 15, 2020, with early adoption permitted, and will be effective for the Company beginning in 2022. We are currently evaluating the effects that the adoption of this guidance will have on our consolidated financial statements and the related disclosures. In January 2017, the FASB issued guidance that simplifies how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit's goodwill with the carrying amount of that goodwill. This guidance is effective for annual periods beginning after December 15, 2019, including interim periods within those periods and will be effective for the Company beginning October 1, 2020. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. We do not expect this guidance to have a material impact on the Company's financial condition, results of operations and related disclosures. In February 2016, the FASB issued Accounting Standard Codification 842 ("ASC 842") on lease accounting requiring lessees to recognize a right-of-use asset and a lease liability for long-term leases. The liability will be equal to the present value of lease payments. The Company adopted this new guidance on October 1, 2019, using the optional modified retrospective transition method and will not recast comparative periods in transition to the new standard. During the year the Company developed a project plan to guide the implementation of ASC 842. The Company completed this plan including surveying the Company’s businesses, assessing the Company’s portfolio of leases and compiling a central repository of active leases. The Company also implemented a lease accounting software solution to support the new reporting requirements and established a future lease process to keep the lease accounting portfolio up to date. The Company evaluated key policy elections and considerations under the standard and completed an internal policy as well as training to address the new standard requirements. The Company plans to elect the package of practical expedients and will not apply the recognition requirements to short-term leases. Although management continues to evaluate the effect to the Company's Consolidated Balance Sheets and disclosures, management currently estimates total assets and liabilities will increase approximately $160,000 to $170,000 upon adoption, before considering deferred taxes. Management does not expect a material impact to the Company’s Consolidated Statements of Earnings or Cash Flows. Recently adopted accounting pronouncements In May 2017, the FASB issued guidance to address the situation when a company modifies the terms of a stock compensation award previously granted to an employee. This guidance is effective, and should be applied prospectively, for fiscal years beginning after December 15, 2017. Early adoption is permitted as of the beginning of an annual period. The new guidance was effective for the Company beginning in fiscal 2019. The Company adopted this guidance as of October 1, 2018 and it did not have a material impact on the Company's financial condition, results of operations and related disclosures. In March 2017, the FASB issued amendments to the Compensation - Retirement Benefits guidance which requires companies to retrospectively present the service cost component of net periodic benefit cost for pension and retiree medical plans along with other compensation costs in operating income and present the other components of net periodic benefit cost below operating income in the income statement. The guidance also allows only the service cost component of net periodic benefit cost to be eligible for capitalization within inventory or fixed assets on a prospective basis. This guidance was effective for fiscal years beginning after December 15, 2017. The Company adopted the requirements of the standard in the first quarter of 2019 on a retrospective basis reclassifying the other components of the net periodic benefit costs from Selling, general and administrative expenses to a non-service expense within Other (income) expense, net. This guidance did not have a material impact on the Company's results of operations. See Note 11 - Employee Benefit Plans for further information on the implementation of this guidance. In January 2017, the FASB issued guidance that clarifies the definition of a business, which will impact many areas of accounting including acquisitions, disposals, goodwill, and consolidation. The new standard is intended to help companies and other organizations evaluate whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. This guidance was effective for annual periods beginning after December 15, 2017, including interim periods within those periods and was effective for the Company beginning in fiscal 2019. The Company adopted the requirements of the standard in the first quarter of 2019 and it did not have a material impact on the Company's financial condition, results of operations and related disclosures. In August 2016, the FASB issued guidance on the Statement of Cash Flows Classification of certain cash receipts and cash payments (a consensus of the FASB Emerging Issues Task Force). This guidance addresses the following eight specific cash flow issues: Debt prepayment or debt extinguishment costs; settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing; contingent consideration payments made after a business combination; proceeds from the settlement of insurance claims; proceeds from the settlement of corporate-owned life insurance policies (including bank-owned life insurance policies); distributions received from equity method investees; beneficial interests in securitization transactions; and separately identifiable cash flows and application of the predominance principle. This guidance was effective for the Company beginning in fiscal 2019. The Company adopted the requirements of the standard in the first quarter of 2019 and it did not have a material impact on the Company's financial condition, results of operations and cash flows. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) which supersedes nearly all existing revenue recognition guidance. Subsequent to the issuance of Topic 606, the FASB clarified the guidance through several ASUs; hereinafter the collection of revenue guidance is referred to as “ASC 606”. The core principle of ASC 606 is that revenue should be recognized to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. On October 1, 2018, the Company adopted ASC 606 using the modified retrospective method for all contracts. Results for reporting periods beginning October 1, 2018 are presented under ASC 606, while prior period amounts were not adjusted and continue to be reported in accordance with the Company’s historic accounting under Topic 605, Revenue Recognition. The Company recorded a net increase to beginning retained earnings of approximately $5,618 as of October 1, 2018 due to the cumulative impact of adopting ASC 606. The impact to beginning retained earnings primarily related to certain contracts in the Defense Electronics Segment containing provisions for radar and communication products that have an alternative use and/or no right to payment. The adoption of ASC 606 did not have a material impact on the Company’s Consolidated Condensed Financial Statements as of and for the year ended September 30, 2019. See Note 2 - Revenue for additional disclosures required by ASC 606. The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements.
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DISCONTINUED OPERATIONS |
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Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DISCONTINUED OPERATIONS | DISCONTINUED OPERATIONS During 2019, Griffon recorded an $11,050 charge ($8,335, net of tax) to discontinued operations. The charge consisted primarily of a purchase price adjustment to resolve a claim related to the $465,000 Plastics divestiture and included an additional reserve for a legacy environmental matter. During 2019, $9,500 of this charge was paid. The following amounts summarize the total assets and liabilities of Plastics and Installation Services and other discontinued activities which have been segregated from Griffon’s continuing operations and are reported as assets and liabilities of discontinued operations in the consolidated balance sheets:
At September 30, 2019, Griffon’s liabilities for Plastics, Installations Services and other discontinued operations primarily related to insurance claims, income taxes and product liability, warranty and environmental reserves totaling liabilities of approximately $7,664. Plastics On November 16, 2017, Griffon announced it entered into a definitive agreement to sell Plastics and on February 6, 2018, completed the sale to Berry for approximately $465,000, net of certain post-closing adjustments. As a result, Griffon classified the results of operations of the Plastics business as discontinued operations in the Consolidated Statements of Operations for all periods presented and classified the related assets and liabilities associated with the discontinued operations in the consolidated balance sheets. Plastics is a global leader in the development and production of embossed, laminated and printed specialty plastic films for hygienic, health-care and industrial products and sells to some of the world's largest consumer products companies. In connection with the sale of Plastics, the Company recorded a $9,500 post-closing adjustment ($7,085, net of tax) during 2019 and recorded a gain on sale of $112,964 ($81,041, net of tax) during 2018. The following amounts related to the Plastics segment have been segregated from Griffon's continuing operations and are reported as discontinued operations:
Installation Services and Other Discontinued Activities In 2008, as a result of the downturn in the residential housing market, Griffon exited substantially all operating activities of its Installation Services segment which sold, installed and serviced garage doors and openers, fireplaces, floor coverings, cabinetry and a range of related building products, primarily for the new residential housing market. In 2008, Griffon sold eleven units, closed one unit and merged two units into HBP. Griffon substantially concluded its remaining disposal activities in 2009. Installation Services operating results have been reported as discontinued operations in the Consolidated Statements of Operations and Comprehensive Income (Loss) for all periods presented; Installation Services is excluded from segment reporting. There was no reported revenue in 2019, 2018 and 2017. |
CONSOLIDATING GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION (Details) |
12 Months Ended |
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Sep. 30, 2019 | |
Clopay Ames True Temper Holding, Corp. [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Subsidiary percentage ownership | 100.00% |
AMES Southern, Inc. [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Subsidiary percentage ownership | 100.00% |
The AMES Companies, Inc. [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Subsidiary percentage ownership | 100.00% |
Telephonics Corporation [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Subsidiary percentage ownership | 100.00% |
Clopay Building Products [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Subsidiary percentage ownership | 100.00% |
SUBSEQUENT EVENTS (Details) |
Nov. 13, 2019
$ / shares
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Subsequent Event [Member] | |
SUBSEQUENT EVENTS (Details) [Line Items] | |
Dividends payable, amount per share (in Dollars per share) | $ 0.0750 |
EMPLOYEE BENEFIT PLANS |
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Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EMPLOYEE BENEFIT PLANS | EMPLOYEE BENEFIT PLANS Griffon offers defined contribution plans to most of its U.S. employees. In addition to employee contributions to the plans, Griffon makes contributions based upon various percentages of compensation and/or employee contributions, which were $11,788 in 2019, $11,053 in 2018 and $10,079 in 2017. The Company also provides healthcare and life insurance benefits for certain groups of retirees through several plans. For certain employees, the benefits are at fixed amounts per retiree and are partially contributory by the retiree. The post-retirement benefit obligation was $1,852 and $1,699 as of September 30, 2019 and 2018. The accumulated other comprehensive income (loss) for these plans was $(146) and ($60) as of September 30, 2019 and 2018, respectively, and the 2019 and 2018 benefit expense was $50 and $45, respectively. It is the Company’s practice to fund these benefits as incurred. Griffon also has qualified and non-qualified defined benefit plans covering certain employees with benefits based on years of service and employee compensation. Over time, these amounts will be recognized as part of net periodic pension costs in the Consolidated Statements of Operations and Comprehensive Income (Loss). Griffon is responsible for overseeing the management of the investments of the qualified defined benefit plan and uses the services of an investment manager to manage these assets based on agreed upon risk profiles. The primary objective of the qualified defined benefit plan is to secure participant retirement benefits. As such, the key objective in this plan’s financial management is to promote stability and, to the extent appropriate, growth in the funded status. Financial objectives are established in conjunction with a review of current and projected plan financial requirements. The fair values of a majority of the plan assets were determined by the plans’ trustee using quoted market prices for identical instruments (level 1 inputs) as of September 30, 2019 and 2018. The fair value of various other investments was determined by the plan’s trustee using direct observable market corroborated inputs, including quoted market prices for similar assets (level 2 inputs). A small amount of plan assets are invested in private equity which consist primarily of investments in private companies which are valued using the net asset values provided by the underlying private investment companies as a practical expedient (level 3 inputs). Effective January 1, 2012, the Clopay Pension Plan merged with the Ames True Temper Inc. Pension Plan. The merged qualified defined benefit plan was named the Clopay Ames Pension Plan (the “Clopay AMES Plan”). The Clopay portion of the Clopay AMES Plan has been frozen to new entrants since December 2000. Certain employees who were part of the plan prior to December 2000 continued to accrue a service benefit through December 2010, at which time all plan participants stopped accruing service benefits. The AMES portion of the Clopay AMES Plan has been frozen to all new entrants since November 2009 and stopped accruing benefits in December 2009. The AMES supplemental executive retirement plan was frozen to new entrants and participants in the plan stopped accruing benefits in 2008. In March 2017, the FASB issued Accounting Standards Update 2017-07, Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, which changed certain presentation and disclosure requirements for employers that sponsor defined benefit and post-retirement pension plans. The new standard requires the service cost component of the net benefit cost to be in the same line item as other compensation in operating income and the other components of net benefit plan cost, including interest costs, amortization of prior service costs and recognized actuarial costs to be presented outside of operating income on a retrospective basis. The standard was effective for fiscal years beginning after December 15, 2017. The Company adopted the requirements of the standard in the first quarter of 2019 on a retrospective basis reclassifying the other components of the net periodic benefit plan costs from Selling, general and administrative expenses to a non-service expense within Other income (expense). The defined benefit and post-retirement pension plans did not have a service cost component. The Company utilized a practical expedient included in the accounting guidance which allowed the Company to use amounts previously disclosed in its pension and other post-retirement benefits note for the prior period as the estimation basis for applying the required retrospective presentation requirements. The Company’s non-service cost components of net periodic benefit plan cost was a benefit of $3,148, $3,649 and $1,993 during 2019, 2018, and 2017 respectively. The impact of this adoption resulted in a reclassification to the Company’s Consolidated Statements of Operations and Comprehensive Income (Loss) for 2018 and 2017, in which previously reported Cost of goods and services and Selling, general and administrative expenses were increased by $3,649 and $1,993, respectively with a corresponding offset to Other income (expense). The remaining provisions of the standard did not have a material impact on our financial position, results of operations or liquidity. Griffon uses judgment to establish the assumptions used in determining the future liability of the plan, as well as the investment returns on the plan assets. The expected return on assets assumption used for pension expense was developed through analysis of historical market returns, current market conditions and past experience of plan investments. The long-term rate of return assumption represents the expected average rate of earnings on the funds invested, or to be invested, to provide for the benefits included in the benefit obligations. The assumption is based on several factors including historical market index returns, the anticipated long-term asset allocation of plan assets and the historical return. The discount rate assumption is determined by developing a yield curve based on high quality bonds with maturities matching the plans’ expected benefit payment stream. The plans’ expected cash flows are then discounted by the resulting year-by-year spot rates. A 10% change in the discount rate or return on assets would not have a material effect on the financial statements of Griffon. Net periodic costs (benefits) were as follows:
The tax benefits in 2019, 2018 and 2017 for the amortization of pension costs in Other comprehensive income (loss) were $221, $342 and $1,170, respectively. The estimated net actuarial loss and prior service cost that will be amortized from AOCI into Net periodic pension cost during 2020 is $4,167 and $14, respectively. The weighted-average assumptions used in determining the net periodic (benefits) costs were as follows:
Plan assets and benefit obligation of the defined and supplemental benefit plans were as follows:
The weighted-average assumptions used in determining the benefit obligations were as follows:
The actual and weighted-average asset allocation for qualified benefit plans were as follows:
Estimated future benefit payments to retirees, which reflect expected future service, are as follows:
During 2020, Griffon expects to contribute $1,900 in payments related to Supplemental Benefits that will be funded from the general assets of Griffon. Griffon expects to contribute $6,758 to the Defined Benefit plan in 2020. The Clopay AMES Plan is covered by the Pension Protection Act of 2006. The Adjusted Funding Target Attainment Percent for the plan as of January 1, 2019 was 91.3%. Since the plan was in excess of the 80% funding threshold there were no plan restrictions. The expected level of 2020 catch up contributions is $2,440. The following is a description of the valuation methodologies used for plan assets measured at fair value: Short-term investment funds – The fair value is determined using the Net Asset Value (“NAV”) provided by the administrator of the fund. The NAV is based on the value of the underlying assets owned by the fund, minus its liabilities, and then divided by the number of shares outstanding. The NAV is a quoted price in a market that is not active and is primarily classified as Level 2. These investments can be liquidated on demand. Government and agency securities – When quoted market prices are available in an active market, the investments are classified as Level 1. When quoted market prices are not available in an active market, the investments are classified as Level 1. Equity securities – The fair values reflect the closing price reported on a major market where the individual mutual fund securities are traded in equity securities. These investments are classified within Level 1 of the valuation hierarchy. Debt securities – The fair values are based on a compilation of primarily observable market information or a broker quote in a non-active market where the individual mutual fund securities are invested in debt securities. These investments are primarily classified within Level 1 of the valuation hierarchy. Commingled funds – The fair values are determined using NAV provided by the administrator of the fund. The NAV is based on the value of the underlying assets owned by the trust/entity, minus its liabilities, and then divided by the number of shares outstanding. These investments are generally classified within Level 2 or 3, as appropriate, of the valuation hierarchy and can be liquidated on demand. Interest in limited partnerships and hedge funds - One limited partnership investment is a private equity fund and the fair value is determined by the fund managers based on the net asset values provided by the underlying private investment companies as a practical expedient. These investments are classified within Level 2 of the valuation hierarchy. The following table presents the fair values of Griffon’s pension and post-retirement plan assets by asset category:
The following table represents level 3 significant unobservable inputs for the year ended September 30, 2019:
Griffon has an ESOP that covers substantially all domestic employees. All U.S. employees of Griffon, who are not members of a collective bargaining unit, automatically become eligible to participate in the plan on the October 1st following completion of one qualifying year of service (as defined in the plan). Securities are allocated to participants’ individual accounts based on the proportion of each participant’s aggregate compensation (not to exceed $280 for the plan year ended September 30, 2019), to the total of all participants’ compensation. Shares of the ESOP which have been allocated to employee accounts are charged to expense based on the fair value of the shares transferred and are treated as outstanding in determining earnings per share. Dividends paid on shares held by the ESOP are used to offset debt service on ESOP Loans. Dividends paid on shares held in participant accounts are utilized to allocate shares from the aggregate number of shares to be released, equal in value to those dividends, based on the closing price of Griffon common stock on the dividend payment date. Compensation expense under the ESOP was $2,630 in 2019, $9,532 in 2018, including an impact of $2,588 from the April 2018 special dividend, and $5,643 in 2017. The cost of the shares held by the ESOP and not yet allocated to employees is reported as a reduction of Shareholders’ Equity. The fair value of the unallocated ESOP shares as of September 30, 2019 and 2018 based on the closing stock price of Griffon’s stock was $47,378 and $40,010, respectively. The ESOP shares were as follows:
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INCOME TAXES (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Sep. 30, 2019 |
Sep. 30, 2018 |
Sep. 30, 2017 |
|
INCOME TAXES (Details) [Line Items] | |||
U.S. Federal income tax provision (benefit) rate | 21.00% | 24.50% | 35.00% |
Provisional income tax (expense) benefit | $ (13,100) | $ 20,587 | |
Income Tax Benefits Reflected Reversal Of Previously Recorded Tax Liabilities | (576) | (421) | $ (122) |
Valuation allowance increase (decrease) | 2,302 | ||
Undistributed Earnings of Foreign Subsidiaries | 83,002 | ||
Potential Tax Benefits Impact On Effective Tax Rate | 790 | ||
Liability for Uncertainty in Income Taxes, Current | 66 | 122 | |
Deferred Tax Assets, Valuation Allowance | 10,823 | 8,520 | |
Tax Cuts and Jobs Act, Transition Tax for Accumulated Foreign Earnings, Income Tax Expense | 12,699 | ||
Domestic Tax Authority [Member] | |||
INCOME TAXES (Details) [Line Items] | |||
Operating Loss Carryforwards | 5,419 | 6,089 | |
Interest Loss Carryforwards | 25,000 | ||
Non U S Tax Purposes [Member] | |||
INCOME TAXES (Details) [Line Items] | |||
Operating Loss Carryforwards | 7,413 | 7,319 | |
State and Local Jurisdiction [Member] | |||
INCOME TAXES (Details) [Line Items] | |||
Operating Loss Carryforwards | 127,354 | 124,442 | |
Foreign Tax Authority [Member] | |||
INCOME TAXES (Details) [Line Items] | |||
Operating Loss Carryforwards | 8,948 | 5,740 | |
New Accounting Pronouncement, Early Adoption, Effect [Member] | |||
INCOME TAXES (Details) [Line Items] | |||
Share-based compensation, excess tax benefit, amount | 304 | $ 1,299 | $ 4,440 |
Capital Loss Carryforward [Member] | Domestic Tax Authority [Member] | |||
INCOME TAXES (Details) [Line Items] | |||
Tax Credit Carryforward, Amount | $ 9,524 |
EMPLOYEE BENEFIT PLANS (Details) - Weighted-average assumptions used in determining the net periodic benefit costs |
12 Months Ended | ||
---|---|---|---|
Sep. 30, 2019 |
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Pension Plan [Member] | |||
EMPLOYEE BENEFIT PLANS (Details) - Weighted-average assumptions used in determining the net periodic benefit costs [Line Items] | |||
Discount rate | 2.92% | 4.10% | 3.64% |
Expected return on assets | 7.00% | 7.00% | 7.25% |
Supplemental Employee Retirement Plan [Member] | |||
EMPLOYEE BENEFIT PLANS (Details) - Weighted-average assumptions used in determining the net periodic benefit costs [Line Items] | |||
Discount rate | 2.64% | 3.99% | 3.18% |
Expected return on assets | 0.00% | 0.00% | 0.00% |
Document And Entity Information - USD ($) |
12 Months Ended | ||
---|---|---|---|
Sep. 30, 2019 |
Oct. 31, 2019 |
Mar. 31, 2019 |
|
Cover page. | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Sep. 30, 2019 | ||
Document Transition Report | false | ||
Entity File Number | 1-06620 | ||
Entity Registrant Name | GRIFFON CORP | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 11-1893410 | ||
Entity Address, Address Line One | 712 Fifth Ave, 18th Floor | ||
Entity Address, City or Town | New York | ||
Entity Address, State or Province | NY | ||
Entity Address, Postal Zip Code | 10019 | ||
City Area Code | 212 | ||
Local Phone Number | 957-5000 | ||
Current Fiscal Year End Date | --09-30 | ||
Entity Public Float | $ 764,000,000 | ||
Entity Common Stock, Shares Outstanding | 46,806,076 | ||
Amendment Flag | false | ||
Entity Central Index Key | 0000050725 | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Well-known Seasoned Issuer | Yes | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Title of 12(b) Security | Common Stock, $0.25 par value | ||
Trading Symbol | GFF | ||
Security Exchange Name | NYSE | ||
Documents Incorporated by Reference | Part III — (Items 10, 11, 12, 13 and 14). Registrant’s definitive proxy statement to be filed pursuant to Regulation 14A of the Securities Exchange Act of 1934.
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NOTES PAYABLE, CAPITALIZED LEASES AND LONG-TERM DEBT (Details) - Summary of Long-Term Debt - USD ($) $ in Thousands |
12 Months Ended | |||
---|---|---|---|---|
Sep. 30, 2019 |
Sep. 30, 2018 |
Sep. 30, 2017 |
Dec. 18, 2017 |
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NOTES PAYABLE, CAPITALIZED LEASES AND LONG-TERM DEBT (Details) - Summary of Long-Term Debt [Line Items] | ||||
Interest Paid, Including Capitalized Interest, Operating and Investing Activities | $ 62,673 | $ 60,349 | $ 47,002 | |
Amortization of Debt Discount (Premium) | 270 | 270 | 1,518 | |
Amortization of Debt Issuance Costs | 5,123 | 4,949 | 2,993 | |
Interest Expense, Debt | 68,066 | 65,568 | 51,513 | |
Capitalized interest | (385) | $ (549) | (795) | |
Effective Interest Rate | 5.66% | |||
Outstanding Balance | 1,114,131 | $ 1,134,692 | ||
less: Current portion | (10,525) | (13,011) | ||
Long-term debt | 1,103,606 | 1,121,681 | ||
Original Issuer Discount | 867 | 1,220 | ||
less: Current portion | 0 | 0 | ||
Capitalized Fees & Expenses, Current | 0 | 0 | ||
Long-term debt | (867) | (1,220) | ||
Capitalized Fees & Expenses, Noncurrent | (10,724) | (14,830) | ||
Balance Sheet | 1,104,274 | 1,121,082 | ||
less: Current portion | (10,525) | (13,011) | ||
Long-term debt | 1,093,749 | 1,108,071 | ||
Capitalized fees & expenses | (10,724) | (14,830) | ||
Senior note due 2022 [Member] | ||||
NOTES PAYABLE, CAPITALIZED LEASES AND LONG-TERM DEBT (Details) - Summary of Long-Term Debt [Line Items] | ||||
Interest Paid, Including Capitalized Interest, Operating and Investing Activities | 52,500 | 52,500 | 38,063 | |
Amortization of Debt Discount (Premium) | 270 | 270 | 270 | |
Amortization of Debt Issuance Costs | 3,803 | 3,803 | 1,857 | |
Interest Expense, Debt | $ 56,573 | 56,573 | $ 40,190 | |
Effective Interest Rate | 5.66% | 5.55% | ||
Outstanding Balance | $ 1,000,000 | |||
Original Issuer Discount | 867 | |||
Balance Sheet | 991,692 | |||
Capitalized fees & expenses | $ (9,175) | $ (8,472) | ||
Coupon Interest Rate | 5.25% | |||
Revolving Credit Facility [Member] | ||||
NOTES PAYABLE, CAPITALIZED LEASES AND LONG-TERM DEBT (Details) - Summary of Long-Term Debt [Line Items] | ||||
Interest Paid, Including Capitalized Interest, Operating and Investing Activities | 3,718 | |||
Amortization of Debt Discount (Premium) | 0 | |||
Amortization of Debt Issuance Costs | 565 | |||
Interest Expense, Debt | 4,283 | |||
Senior notes due 2018 [Member] | ||||
NOTES PAYABLE, CAPITALIZED LEASES AND LONG-TERM DEBT (Details) - Summary of Long-Term Debt [Line Items] | ||||
Outstanding Balance | 1,000,000 | |||
Original Issuer Discount | 1,220 | |||
Balance Sheet | 988,252 | |||
Capitalized fees & expenses | $ (12,968) | |||
Coupon Interest Rate | 5.25% | |||
Revolver due 2019 [Member] | ||||
NOTES PAYABLE, CAPITALIZED LEASES AND LONG-TERM DEBT (Details) - Summary of Long-Term Debt [Line Items] | ||||
Outstanding Balance | $ 50,000 | $ 25,000 | ||
Original Issuer Discount | 0 | 0 | ||
Balance Sheet | 48,757 | 23,587 | ||
Capitalized fees & expenses | (1,243) | (1,413) | ||
Convert. debt due 2017 [Member] | ||||
NOTES PAYABLE, CAPITALIZED LEASES AND LONG-TERM DEBT (Details) - Summary of Long-Term Debt [Line Items] | ||||
Interest Paid, Including Capitalized Interest, Operating and Investing Activities | $ 1,167 | |||
Amortization of Debt Discount (Premium) | 1,248 | |||
Amortization of Debt Issuance Costs | 148 | |||
Interest Expense, Debt | $ 2,563 | |||
Effective Interest Rate | 8.90% | |||
Real estate mortgages [Member] | ||||
NOTES PAYABLE, CAPITALIZED LEASES AND LONG-TERM DEBT (Details) - Summary of Long-Term Debt [Line Items] | ||||
Interest Paid, Including Capitalized Interest, Operating and Investing Activities | 349 | $ 582 | ||
Amortization of Debt Discount (Premium) | 0 | 0 | ||
Amortization of Debt Issuance Costs | 320 | 58 | ||
Interest Expense, Debt | $ 669 | $ 640 | ||
Effective Interest Rate | 3.30% | 2.60% | ||
ESOP Loans [Member] | ||||
NOTES PAYABLE, CAPITALIZED LEASES AND LONG-TERM DEBT (Details) - Summary of Long-Term Debt [Line Items] | ||||
Interest Paid, Including Capitalized Interest, Operating and Investing Activities | 937 | $ 1,802 | $ 1,557 | |
Amortization of Debt Discount (Premium) | 0 | 0 | 0 | |
Amortization of Debt Issuance Costs | 186 | 124 | 133 | |
Interest Expense, Debt | $ 1,123 | $ 1,926 | $ 1,690 | |
Effective Interest Rate | 6.30% | 6.30% | 4.20% | |
Outstanding Balance | $ 34,694 | |||
Original Issuer Discount | 0 | |||
Balance Sheet | 34,508 | |||
Capitalized fees & expenses | (186) | |||
Capital lease - real estate [Member] | ||||
NOTES PAYABLE, CAPITALIZED LEASES AND LONG-TERM DEBT (Details) - Summary of Long-Term Debt [Line Items] | ||||
Interest Paid, Including Capitalized Interest, Operating and Investing Activities | $ 372 | 581 | $ 296 | |
Amortization of Debt Discount (Premium) | 0 | 0 | 0 | |
Amortization of Debt Issuance Costs | 25 | 25 | 25 | |
Interest Expense, Debt | 397 | 606 | $ 321 | |
Effective Interest Rate | 5.50% | |||
Outstanding Balance | 4,388 | 7,503 | ||
Original Issuer Discount | 0 | 0 | ||
Balance Sheet | 4,333 | 7,423 | ||
Capitalized fees & expenses | $ (55) | $ (80) | ||
Coupon Interest Rate | 5.00% | 5.00% | ||
Non U.S. lines of credit [Member] | ||||
NOTES PAYABLE, CAPITALIZED LEASES AND LONG-TERM DEBT (Details) - Summary of Long-Term Debt [Line Items] | ||||
Interest Paid, Including Capitalized Interest, Operating and Investing Activities | $ 19 | $ 34 | $ 76 | |
Amortization of Debt Discount (Premium) | 0 | 0 | 0 | |
Amortization of Debt Issuance Costs | 15 | 15 | 128 | |
Interest Expense, Debt | 34 | 49 | 204 | |
Outstanding Balance | 17,576 | 7,951 | ||
Original Issuer Discount | 0 | 0 | ||
Balance Sheet | 17,531 | 7,935 | ||
Capitalized fees & expenses | (45) | (16) | ||
Non U.S. term loans [Member] | ||||
NOTES PAYABLE, CAPITALIZED LEASES AND LONG-TERM DEBT (Details) - Summary of Long-Term Debt [Line Items] | ||||
Interest Paid, Including Capitalized Interest, Operating and Investing Activities | 1,592 | 1,420 | 860 | |
Amortization of Debt Discount (Premium) | 0 | 0 | 0 | |
Amortization of Debt Issuance Costs | 109 | 90 | 67 | |
Interest Expense, Debt | 1,701 | 1,510 | 927 | |
Outstanding Balance | 36,977 | 53,533 | ||
Original Issuer Discount | 0 | 0 | ||
Balance Sheet | 36,789 | 53,385 | ||
Capitalized fees & expenses | (188) | (148) | ||
Other long term debt [Member] | ||||
NOTES PAYABLE, CAPITALIZED LEASES AND LONG-TERM DEBT (Details) - Summary of Long-Term Debt [Line Items] | ||||
Interest Paid, Including Capitalized Interest, Operating and Investing Activities | 640 | 494 | 245 | |
Amortization of Debt Discount (Premium) | 0 | 0 | ||
Amortization of Debt Issuance Costs | 5 | 7 | 10 | |
Interest Expense, Debt | 645 | 501 | $ 255 | |
Outstanding Balance | 5,190 | 6,011 | ||
Original Issuer Discount | 0 | 0 | ||
Balance Sheet | 5,172 | 5,992 | ||
Capitalized fees & expenses | $ (18) | $ (19) |
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Sep. 30, 2019 |
Sep. 30, 2018 |
Sep. 30, 2017 |
|
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net income | $ 37,287 | $ 125,678 | $ 14,912 |
Net (income) loss from discontinued operations | 8,335 | (92,423) | 2,871 |
Adjustments to reconcile net income to net cash provided by operating activities of continuing operations: | |||
Depreciation and amortization | 61,848 | 55,803 | 47,878 |
Stock-based compensation | 13,285 | 10,078 | 8,090 |
Provision for losses on accounts receivable | 535 | 96 | 271 |
Amortization of deferred financing costs and debt discounts | 5,393 | 5,219 | 4,511 |
Deferred income tax | (2,222) | (17,633) | 2,341 |
Gain (loss) on sale/disposal of assets and investments | (179) | 290 | (126) |
Change in assets and liabilities, net of assets and liabilities acquired: | |||
(Increase) decrease in accounts receivable and contract costs and recognized income not yet billed | 8,279 | 2,681 | (19,131) |
Increase in inventories | (24,938) | (52,122) | (29,299) |
Increase in prepaid and other assets | (4,285) | (2,285) | (4,781) |
Increase in accounts payable, accrued liabilities and income taxes payable | 7,638 | 11,078 | 17,541 |
Other changes, net | 2,982 | 11,732 | 4,073 |
Net cash provided by operating activities - continuing operations | 113,958 | 58,192 | 49,151 |
CASH FLOWS FROM INVESTING ACTIVITIES - CONTINUING OPERATIONS: | |||
Acquisition of property, plant and equipment | (45,361) | (50,138) | (34,937) |
Acquired business, net of cash acquired | (9,219) | (430,932) | (34,719) |
Investment sales (purchases) | (149) | 0 | (1,824) |
Proceeds (payments) from sale of business | (9,500) | 474,727 | 0 |
Insurance proceeds (payments) | (10,604) | 8,254 | 0 |
Proceeds from sale of property, plant and equipment | 280 | 663 | 143 |
Net cash provided by (used in) investing activities - continuing operations | (74,553) | 2,574 | (71,337) |
CASH FLOWS FROM FINANCING ACTIVITIES - CONTINUING OPERATIONS: | |||
Dividends paid | (13,676) | (49,797) | (10,325) |
Purchase of shares for treasury | (1,478) | (45,605) | (15,841) |
Proceeds from long-term debt | 201,748 | 443,058 | 233,443 |
Payments of long-term debt | (218,248) | (300,993) | (170,454) |
Change in short-term borrowings | (366) | 144 | 0 |
Share premium payment on settled debt | 0 | 0 | (24,997) |
Financing costs | (1,090) | (7,793) | (1,548) |
Purchase of ESOP shares | 0 | 0 | (10,908) |
Contingent consideration for acquired businesses | (1,686) | 0 | 0 |
Other, net | (180) | 51 | (70) |
Net cash provided by (used) in financing activities - continuing operations | (34,976) | 39,065 | (700) |
CASH FLOWS FROM DISCONTINUED OPERATIONS: | |||
Net cash provided by (used in) operating activities | (2,123) | (45,624) | 47,193 |
Net cash used in investing activities | 0 | (10,762) | (45,075) |
Net cash used in financing activities | 0 | (22,541) | (4,268) |
Net cash used in discontinued operations | (2,123) | (78,927) | (2,150) |
Effect of exchange rate changes on cash and equivalents | 313 | 1,173 | 164 |
NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS | 2,619 | 22,077 | (24,872) |
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD | 69,758 | 47,681 | 72,553 |
CASH AND EQUIVALENTS AT END OF PERIOD | 72,377 | 69,758 | 47,681 |
Supplemental Disclosure of Cash Flow Information: | |||
Cash paid for interest | 63,334 | 59,793 | 48,137 |
Cash paid for taxes | $ 25,339 | $ 32,140 | $ 20,998 |
EMPLOYEE BENEFIT PLANS (Details) - ESOP Shares - shares |
Sep. 30, 2019 |
Sep. 30, 2018 |
---|---|---|
Retirement Benefits [Abstract] | ||
Allocated shares | 3,209,069 | 3,157,530 |
Unallocated shares | 2,259,308 | 2,477,385 |
Employee Stock Ownership Plan (ESOP), Shares in ESOP | 5,468,377 | 5,634,915 |
ACQUISITIONS |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ACQUISITIONS | ACQUISITIONS Griffon accounts for acquisitions under the acquisition method, in which assets acquired and liabilities assumed are recorded at fair value as of the date of acquisition using a method substantially similar to the goodwill impairment test methodology (level 3 inputs). The operating results of the acquired companies are included in Griffon’s consolidated financial statements from the date of acquisition in each instance. On June 4, 2018, Clopay completed the acquisition of 100% of the outstanding stock of CornellCookson, a leading US manufacturer and marketer of rolling steel door and grille products designed for commercial, industrial, institutional and retail use, for approximately $180,000, excluding the estimated present value of tax benefits, and $12,426 of post-closing adjustments, primarily consisting of a working capital adjustment, of which $9,219 was paid in October 2018. CornellCookson revenue in 2018 was $66,654. The acquisition of CornellCookson substantially expanded Clopay’s non-residential product offerings, and added an established professional dealer network focused on rolling steel door and grille products for commercial, industrial, institutional and retail use. There is no other contingent consideration arrangement relative to the acquisition of CornellCookson. CornellCookson’s accounts, affected for adjustments to reflect fair market values assigned to assets purchased and liabilities assumed, and results of operations are included in the Company’s consolidated financial statements from the date of acquisition. The Company has recorded an allocation of the purchase price to the Company’s tangible and identifiable intangible assets acquired and liabilities assumed based on their fair market values (level 3 inputs) at the acquisition date. The excess of the purchase price over the fair value of the net tangible and intangible assets was recorded as goodwill and is deductible for tax purposes. Goodwill recognized at the acquisition date represents the other intangible benefits that the Company will derive from the ownership of CornellCookson, however, such intangible benefits do not meet the criteria for recognition of separately identifiable intangible assets. The calculation of the purchase price allocation is as follows:
(1) Includes $30,818 of gross accounts receivable of which $418 was not expected to be collected. The fair value of accounts receivable approximated book value acquired. (2) Includes $13,434 of gross inventory of which $1,098 was reserved for obsolete items. The amounts assigned to goodwill and major intangible asset classifications, all of which are tax deductible, for the CornellCookson acquisition are as follows:
On February 13, 2018, AMES acquired 100% of the outstanding stock of Kelkay Limited ("Kelkay"), a leading United Kingdom manufacturer and distributor of decorative outdoor landscaping products sold to garden centers, retailers and grocers in the UK and Ireland for $56,118 (GBP 40,452), subject to contingent consideration of up to GBP 7,000. In 2019, GBP 1,300 thousand was reversed into income as it was highly probable a portion of the contingent consideration would not be earned. This acquisition broadened AMES' product offerings in the market and increased its in-country operational footprint. The purchase price was primarily allocated to tradenames of GBP 19,000, customer related intangibles of GBP 6,640, accounts receivable and inventory of GBP 8,894 and fixed assets and land of GBP 8,241. On November 6, 2017, AMES acquired substantially all of the assets of Harper Brush Works ("Harper"), a division of Horizon Global, for $4,383, inclusive of post-closing adjustments. Harper is a leading U.S. manufacturer of cleaning products for professional, home, and industrial use. The acquisition expanded AMES’ long-handled tool offering in North America to include brooms, brushes, and other cleaning tools and accessories. The purchase price was primarily allocated to intangible assets of $2,300, inventory and accounts receivable of $3,900 and fixed assets of $900. On October 2, 2017, Griffon Corporation completed the acquisition of 100% of the outstanding equity interests of ClosetMaid, a market leader of home storage and organization products, for approximately $185,700, inclusive of certain post-closing adjustments and excluding the present value of net tax benefits resulting from the transaction. The acquisition of ClosetMaid expanded Griffon’s Home and Building Products segment into the highly complementary home storage and organization category with a leading brand and product portfolio. ClosetMaid's accounts, affected for adjustments to reflect fair market values assigned to assets purchased and liabilities assumed, and results of operations, are included in the Company’s consolidated financial statements from the date of acquisition. The Company has recorded an allocation of the purchase price to the Company’s tangible and identifiable intangible assets acquired and liabilities assumed based on their fair market values (level 3 inputs) at the acquisition date. The excess of the purchase price over the fair value of the net tangible and intangible assets was recorded as goodwill and is deductible for tax purposes. Goodwill recognized at the acquisition date represents the other intangible benefits that the Company will derive from the ownership of ClosetMaid, however, such intangible benefits do not meet the criteria for recognition of separately identifiable intangible assets. The following unaudited proforma summary from continuing operations presents consolidated information as if the Company acquired ClosetMaid on October 1, 2016:
Griffon did not include any material, nonrecurring proforma adjustments directly attributable to the business combination in the proforma revenue and earnings. These proforma amounts have been compiled by adding the historical results from continuing operations of Griffon, restated for classifying the results of operations of the Plastics business as a discontinued operation, to the historical results of ClosetMaid after applying Griffon’s accounting policies and the following proforma adjustments:
The calculation of the purchase price allocation is as follows:
(1) Includes $32,956 of gross accounts receivable of which $722 was not expected to be collected. The fair value of accounts receivable approximated book value acquired. (2) Includes $1,500 in inventory basis step-up, which was charged to cost of goods sold over the inventory turns of the acquired entity. The amounts assigned to goodwill and major intangible asset classifications, all of which are tax deductible, for the ClosetMaid acquisition are as follows:
On September 29, 2017, AMES Australia completed the acquisition of Tuscan Landscape Group Pty, Ltd. ("Tuscan Path") for approximately $18,000 (AUD 22,250). Tuscan Path is a leading Australian provider of pots, planters, pavers, decorative stone, and garden decor products. The acquisition of Tuscan Path broadens AMES' outdoor living and lawn and garden business, and will strengthen AMES' industry leading position in Australia. The purchase price was primarily allocated to intangible assets of AUD 3,900 and inventory and accounts receivable of AUD 7,900. On July 31, 2017, The AMES Companies, Inc. acquired La Hacienda Limited, a leading United Kingdom outdoor living brand of unique heating and garden decor products, for approximately $11,400 (GBP 9,175), including an approximate contingent earn out payment of $790 (GBP 600). The acquisition of La Hacienda broadens AMES' global outdoor living and lawn and garden business and supports AMES' UK expansion strategy. The purchase price allocation was primarily allocated to intangible assets of approximately GBP 3,100 and inventory and accounts receivable of GBP 4,200. On December 30, 2016, AMES Australia acquired Home Living ("Hills") for approximately $6,051 (AUD 8,400). The purchase price has been allocated to acquired assets and assumed liabilities and primarily consists of inventory, tooling and identifiable intangible assets, including trademarks, intellectual property and customer relationships. Hills, founded in 1946, is a market leader in the supply of clothesline, laundry and garden products. The Hills acquisition adds to AMES' existing broad category of products and enhances its lawn and garden product offerings in Australia. The purchase price was primarily allocated to intangible assets of approximately AUD 6,400 with the remainder primarily inventory. SG&A and Cost of goods and services included $6,097 and $1,500 of acquisition-related costs, respectively, in 2018. SG&A included $9,617 acquisition-related costs in 2017. There were no acquisition-related costs in 2019.
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REVENUE - Transaction Price Allocated to the Remaining Performance Obligations (Details) $ in Thousands |
Sep. 30, 2019
USD ($)
|
---|---|
Revenue from Contract with Customer [Abstract] | |
Remaining performance obligations (backlog) | $ 389,300 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-10-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligations (backlog), percentage to to be satisfied by the end of the year | 72.00% |
Remaining performance obligations (backlog), expected timing of satisfaction, period |
ACQUISITIONS (Details) - Pro Forma $ in Thousands |
12 Months Ended |
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Sep. 30, 2017
USD ($)
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Business Combinations [Abstract] | |
Revenue | $ 1,823,497 |
Income from continuing operations | $ 15,070 |
PROPERTY, PLANT AND EQUIPMENT (Details) - Summary of property plant and equipment - USD ($) $ in Thousands |
Sep. 30, 2019 |
Sep. 30, 2018 |
---|---|---|
Property, Plant and Equipment [Line Items] | ||
Property Plant And Equipment Gross | $ 763,542 | $ 725,282 |
Accumulated depreciation and amortization | (426,216) | (382,790) |
Total | 337,326 | 342,492 |
Land, building and building improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property Plant And Equipment Gross | 133,036 | 130,296 |
Machinery and equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property Plant And Equipment Gross | 580,698 | 544,875 |
Leasehold improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property Plant And Equipment Gross | $ 49,808 | $ 50,111 |
GOODWILL AND OTHER INTANGIBLES (Tables) |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Goodwill | The following table provides changes in carrying value of goodwill by segment through the year ended September 30, 2019:
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Schedule Of Identifiable Intangible Assets | The following table provides the gross carrying value and accumulated amortization for each major class of intangible asset:
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REVENUE (Tables) |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cumulative Effect For Adoption of New Accounting Pronouncement | The cumulative effect of the changes made to the Company's Consolidated October 1, 2018 Balance Sheet for the adoption of ASC 606 is as follows:
(1) Billings in excess of costs is reported in Accounts payable on the Company's Consolidated Balance Sheets. The impact to the Company's Consolidated Statement of Operations for the year ended September 30, 2019 and to the Company's Balance Sheet as of September 30, 2019 was as follows:
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NOTES PAYABLE, CAPITALIZED LEASES AND LONG-TERM DEBT (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Future Minimum Lease Payments for Capital Leases | The present value of the net minimum payments on capitalized leases as of September 30, 2019 was follows:
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Schedule of Debt | Debt at September 30, 2019 and 2018 consisted of the following:
Interest expense consists of the following for 2019, 2018 and 2017.
Minimum payments under debt agreements for the next five years are as follows: $10,525 in 2020, $86,108 in 2021, $1,016,109 in 2022, $441 in 2023, $217 in 2024 and $731 thereafter.
Proceeds from the $600,000 5.25% senior notes due in 2022 were used to redeem $550,000 of 7.125% senior notes due 2018, to pay a call and tender offer premium of $31,530 and to make interest payments of $16,716, with the balance used to pay a portion of the related transaction fees and expenses. In connection with the issuance of the Senior Notes, all obligations under the $550,000 of 7.125% senior notes due in 2018 were discharged. The Senior Notes are senior unsecured obligations of Griffon guaranteed by certain domestic subsidiaries, and subject to certain covenants, limitations and restrictions. On February 5, 2018, July 20, 2016 and June 18, 2014, Griffon exchanged all of the $275,000, $125,000 and $600,000 Senior Notes, respectively, for substantially identical Senior Notes registered under the Securities Act of 1933 via an exchange offer. The fair value of the Senior Notes approximated $1,010,000 on September 30, 2019 based upon quoted market prices (level 1 inputs). In connection with the issuance and exchange of the $275,000 senior notes, Griffon capitalized $8,472 of underwriting fees and other expenses; in addition to $13,329 capitalized under the previously issued $725,000 Senior Notes. All capitalized fees for the Senior Notes will amortize over the term of the notes and, at September 30, 2019, $9,175 remained to be amortized.
by Griffon. On March 13, 2019, the ESOP Term Loan was refinanced with an internal loan from Griffon which was funded with cash and a draw on its $350,000 credit facility. The internal loan interest rate is fixed at 2.91%, matures in June 2033 and requires quarterly payments of principal, currently $569, and interest. The internal loan is secured by shares purchased with the proceeds of the loan. The amount outstanding on the internal loan at September 30, 2019 was $32,418.
In July 2016, Griffon Australia Holdings Pty Ltd and its Australian subsidiaries ("Griffon Australia") entered into an AUD 30,000 term loan and an AUD 10,000 revolver. The term loan refinanced two existing term loans and the revolver replaced two existing lines. In December 2016, the amount available under the revolver was increased from AUD 10,000 to AUD 20,000 and, in March 2017 and September 2017, the term loan commitment was increased by AUD 5,000 and AUD 15,000, respectively. In March 2019, the term commitment was reduced by AUD 10,000 with proceeds from a receivable purchase agreement in the amount of AUD 10,000. The term loan requires quarterly principal payments of AUD 1,250 plus interest with a balloon payment of AUD 13,375 due upon maturity in March 2022, and accrues interest at Bank Bill Swap Bid Rate “BBSY” plus 1.90% per annum (2.85% at September 30, 2019). As of September 30, 2019, the term had an outstanding balance of AUD 25,875 ($17,492 as of September 30, 2019). The revolving facility and receivable purchase facility mature in March 2020, but are renewable upon mutual agreement with the lender. The revolving facility and receivable purchase facility accrue interest at BBSY plus 1.8% and 1.0%, respectively, per annum (2.81% and 2.01%, respectively, at September 30, 2019). At September 30, 2019, there were AUD 16,000 ($10,816 at September 30, 2019) under the revolver and the receivable purchase facility had an outstanding balance of AUD 10,000 ($6,760 at September 30, 2019). The revolver, receivable purchase facility and the term loan are all secured by substantially all of the assets of Griffon Australia and its subsidiaries. Griffon Australia is required to maintain a certain minimum equity level and is subject to a maximum leverage ratio and a minimum fixed charges cover ratio. In July 2018, the AMES Companies UK Ltd and its subsidiaries ("Ames UK") entered into a GBP 14,000 term loan, GBP 4,000 mortgage loan and GBP 5,000 revolver. The term loan and mortgage loan require quarterly principal payments of GBP 350 and GBP 83 plus interest, respectively, and have balloon payments due upon maturity, July 2023, of GBP 7,000 and GBP 2,333, respectively. The Term Loan and Mortgage Loans accrue interest at the GBP LIBOR Rate plus 2.25% and 1.8%, respectively (3.01% and 2.56% at September 30, 2019, respectively). The revolving facility matures in June 2020, but is renewable upon mutual agreement with the lender, and accrues interest at the Bank of England Base Rate plus 1.5% (2.25% as of September 30, 2019). As of September 30, 2019, the revolver had no outstanding balance while the term and mortgage loan balances amounted to GBP 15,831 ($19,485 as of September 30, 2019). The revolver and the term loan are both secured by substantially all of the assets of AMES UK and its subsidiaries. AMES UK is subject to a maximum leverage ratio and a minimum fixed charges cover ratio. An invoice discounting arrangement was canceled and replaced by the above loan facilities. (h) Other long-term debt primarily consists of a loan with the Pennsylvania Industrial Development Authority, with the balance consisting of capital leases.
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CONSOLIDATING GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION (Details) - Summary of consolidated balance sheets - USD ($) $ in Thousands |
Sep. 30, 2019 |
Oct. 01, 2018 |
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2016 |
---|---|---|---|---|---|
CURRENT ASSETS | |||||
Cash and equivalents | $ 72,377 | $ 69,758 | $ 47,681 | $ 72,553 | |
Accounts receivable, net of allowances | 264,450 | 280,509 | |||
Contract costs and recognized income not yet billed, net of progress payments | 105,111 | 121,803 | |||
Inventories | 442,121 | $ 420,384 | 398,359 | ||
Prepaid and other current assets | 40,799 | 42,121 | |||
Assets of discontinued operations | 321 | 324 | |||
Total Current Assets | 925,179 | 913,917 | 912,874 | ||
PROPERTY, PLANT AND EQUIPMENT, net | 337,326 | 342,492 | |||
GOODWILL | 437,067 | 439,395 | 319,139 | ||
INTANGIBLE ASSETS, net | 356,639 | 370,858 | |||
INTERCOMPANY RECEIVABLE | 0 | 0 | |||
EQUITY INVESTMENTS IN SUBSIDIARIES | 0 | 0 | |||
OTHER ASSETS | 15,840 | 16,355 | |||
ASSETS OF DISCONTINUED OPERATIONS | 2,888 | 2,916 | |||
Total Assets | 2,074,939 | 2,085,933 | 2,084,890 | 1,873,541 | |
CURRENT LIABILITIES | |||||
Notes payable and current portion of long-term debt | 10,525 | 13,011 | |||
Accounts payable and accrued liabilities | 375,241 | 372,850 | |||
Liabilities of discontinued operations | 4,333 | 7,210 | |||
Total Current Liabilities | 390,099 | 401,353 | 393,071 | ||
LONG-TERM DEBT, net of debt discounts | 1,093,749 | 1,108,071 | |||
INTERCOMPANY PAYABLES | 0 | 0 | |||
OTHER LIABILITIES | 109,997 | 105,089 | 106,710 | ||
LIABILITIES OF DISCONTINUED OPERATIONS | 3,331 | 2,647 | |||
Total Liabilities | 1,597,176 | 1,617,160 | 1,610,499 | ||
SHAREHOLDERS’ EQUITY | 477,763 | 468,773 | 474,391 | 398,808 | 410,947 |
Total Liabilities and Shareholders’ Equity | 2,074,939 | $ 2,085,933 | 2,084,890 | ||
Parent Company [Member] | |||||
CURRENT ASSETS | |||||
Cash and equivalents | 1,649 | 15,976 | 3,240 | 6,517 | |
Accounts receivable, net of allowances | 0 | 0 | |||
Contract costs and recognized income not yet billed, net of progress payments | 0 | 0 | |||
Inventories | 0 | 0 | |||
Prepaid and other current assets | 8,238 | 12,179 | |||
Assets of discontinued operations | 0 | 0 | |||
Total Current Assets | 9,887 | 28,155 | |||
PROPERTY, PLANT AND EQUIPMENT, net | 1,184 | 936 | |||
GOODWILL | 0 | 6,646 | |||
INTANGIBLE ASSETS, net | 93 | 93 | |||
INTERCOMPANY RECEIVABLE | 5,834 | 56,396 | |||
EQUITY INVESTMENTS IN SUBSIDIARIES | 1,628,031 | 1,528,932 | |||
OTHER ASSETS | 8,182 | 8,651 | |||
ASSETS OF DISCONTINUED OPERATIONS | 0 | 0 | |||
Total Assets | 1,653,211 | 1,629,809 | |||
CURRENT LIABILITIES | |||||
Notes payable and current portion of long-term debt | 0 | 2,276 | |||
Accounts payable and accrued liabilities | 41,796 | 26,639 | |||
Liabilities of discontinued operations | 0 | 0 | |||
Total Current Liabilities | 41,796 | 28,915 | |||
LONG-TERM DEBT, net of debt discounts | 1,040,449 | 1,044,071 | |||
INTERCOMPANY PAYABLES | 71,634 | 66,058 | |||
OTHER LIABILITIES | 21,569 | 16,374 | |||
LIABILITIES OF DISCONTINUED OPERATIONS | 0 | 0 | |||
Total Liabilities | 1,175,448 | 1,155,418 | |||
SHAREHOLDERS’ EQUITY | 477,763 | 474,391 | |||
Total Liabilities and Shareholders’ Equity | 1,653,211 | 1,629,809 | |||
Guarantor Subsidiaries [Member] | |||||
CURRENT ASSETS | |||||
Cash and equivalents | 25,217 | 16,353 | 8,066 | 27,692 | |
Accounts receivable, net of allowances | 227,069 | 234,885 | |||
Contract costs and recognized income not yet billed, net of progress payments | 104,109 | 121,393 | |||
Inventories | 372,839 | 332,067 | |||
Prepaid and other current assets | 25,754 | 21,313 | |||
Assets of discontinued operations | 0 | 0 | |||
Total Current Assets | 754,988 | 726,011 | |||
PROPERTY, PLANT AND EQUIPMENT, net | 289,282 | 299,920 | |||
GOODWILL | 375,734 | 361,507 | |||
INTANGIBLE ASSETS, net | 224,275 | 293,093 | |||
INTERCOMPANY RECEIVABLE | 864,884 | 314,394 | |||
EQUITY INVESTMENTS IN SUBSIDIARIES | 581,438 | 968,330 | |||
OTHER ASSETS | 24,635 | 15,942 | |||
ASSETS OF DISCONTINUED OPERATIONS | 0 | 0 | |||
Total Assets | 3,115,236 | 2,979,197 | |||
CURRENT LIABILITIES | |||||
Notes payable and current portion of long-term debt | 3,075 | 3,398 | |||
Accounts payable and accrued liabilities | 266,411 | 303,154 | |||
Liabilities of discontinued operations | 0 | (22,327) | |||
Total Current Liabilities | 269,486 | 284,225 | |||
LONG-TERM DEBT, net of debt discounts | 3,119 | 6,110 | |||
INTERCOMPANY PAYABLES | 457,265 | (77,760) | |||
OTHER LIABILITIES | 81,582 | 73,391 | |||
LIABILITIES OF DISCONTINUED OPERATIONS | 0 | 0 | |||
Total Liabilities | 811,452 | 285,966 | |||
SHAREHOLDERS’ EQUITY | 2,303,784 | 2,693,231 | |||
Total Liabilities and Shareholders’ Equity | 3,115,236 | 2,979,197 | |||
Non-Guarantor Subsidiaries [Member] | |||||
CURRENT ASSETS | |||||
Cash and equivalents | 45,511 | 37,429 | 36,375 | 38,344 | |
Accounts receivable, net of allowances | 38,580 | 69,729 | |||
Contract costs and recognized income not yet billed, net of progress payments | 1,002 | 410 | |||
Inventories | 69,540 | 66,373 | |||
Prepaid and other current assets | 6,951 | 6,168 | |||
Assets of discontinued operations | 321 | 324 | |||
Total Current Assets | 161,905 | 180,433 | |||
PROPERTY, PLANT AND EQUIPMENT, net | 46,860 | 41,636 | |||
GOODWILL | 61,333 | 71,242 | |||
INTANGIBLE ASSETS, net | 132,271 | 77,672 | |||
INTERCOMPANY RECEIVABLE | 75,684 | (121,445) | |||
EQUITY INVESTMENTS IN SUBSIDIARIES | 3,233,038 | 3,347,894 | |||
OTHER ASSETS | (2,352) | 374 | |||
ASSETS OF DISCONTINUED OPERATIONS | 2,888 | 2,916 | |||
Total Assets | 3,711,627 | 3,600,722 | |||
CURRENT LIABILITIES | |||||
Notes payable and current portion of long-term debt | 7,450 | 7,337 | |||
Accounts payable and accrued liabilities | 68,390 | 59,531 | |||
Liabilities of discontinued operations | 4,333 | 29,537 | |||
Total Current Liabilities | 80,173 | 96,405 | |||
LONG-TERM DEBT, net of debt discounts | 50,181 | 57,890 | |||
INTERCOMPANY PAYABLES | 444,557 | 263,227 | |||
OTHER LIABILITIES | 15,017 | 20,592 | |||
LIABILITIES OF DISCONTINUED OPERATIONS | 3,331 | 2,647 | |||
Total Liabilities | 593,259 | 440,761 | |||
SHAREHOLDERS’ EQUITY | 3,118,368 | 3,159,961 | |||
Total Liabilities and Shareholders’ Equity | 3,711,627 | 3,600,722 | |||
Consolidation, Eliminations [Member] | |||||
CURRENT ASSETS | |||||
Cash and equivalents | 0 | 0 | $ 0 | $ 0 | |
Accounts receivable, net of allowances | (1,199) | (24,105) | |||
Contract costs and recognized income not yet billed, net of progress payments | 0 | 0 | |||
Inventories | (258) | (81) | |||
Prepaid and other current assets | (144) | 2,461 | |||
Assets of discontinued operations | 0 | 0 | |||
Total Current Assets | (1,601) | (21,725) | |||
PROPERTY, PLANT AND EQUIPMENT, net | 0 | 0 | |||
GOODWILL | 0 | 0 | |||
INTANGIBLE ASSETS, net | 0 | 0 | |||
INTERCOMPANY RECEIVABLE | (946,402) | (249,345) | |||
EQUITY INVESTMENTS IN SUBSIDIARIES | (5,442,507) | (5,845,156) | |||
OTHER ASSETS | (14,625) | (8,612) | |||
ASSETS OF DISCONTINUED OPERATIONS | 0 | 0 | |||
Total Assets | (6,405,135) | (6,124,838) | |||
CURRENT LIABILITIES | |||||
Notes payable and current portion of long-term debt | 0 | 0 | |||
Accounts payable and accrued liabilities | (1,356) | (16,474) | |||
Liabilities of discontinued operations | 0 | 0 | |||
Total Current Liabilities | (1,356) | (16,474) | |||
LONG-TERM DEBT, net of debt discounts | 0 | 0 | |||
INTERCOMPANY PAYABLES | (973,456) | (251,525) | |||
OTHER LIABILITIES | (8,171) | (3,647) | |||
LIABILITIES OF DISCONTINUED OPERATIONS | 0 | 0 | |||
Total Liabilities | (982,983) | (271,646) | |||
SHAREHOLDERS’ EQUITY | (5,422,152) | (5,853,192) | |||
Total Liabilities and Shareholders’ Equity | $ (6,405,135) | $ (6,124,838) |
GOODWILL AND OTHER INTANGIBLES |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GOODWILL AND OTHER INTANGIBLES | GOODWILL AND OTHER INTANGIBLES In the fourth quarter of fiscal 2019, Griffon modified its reportable segment structure to provide investors with improved visibility after a series of portfolio repositioning actions which included the divestiture of the Plastics business, the acquisition of ClosetMaid and its subsequent integration into AMES, and the acquisition of CornellCookson by Clopay. Griffon now reports its operations through three reportable segments: the newly formed Consumer and Professional Products segment, which consists of AMES; Home and Building Products, which consists of Clopay; and Defense Electronics, which consists of Telephonics Corporation. Before changing its reportable segment structure, the Company completed its annual impairment review of its legacy HBP reporting unit, which also was its legacy reportable segment, and determined that the fair value of the legacy HBP reporting unit substantially exceeded the carrying value of the assets, as performed under step one, and no impairment existed. In connection with the Company's change in its reportable segments, the Company performed its annual impairment testing of goodwill at Griffon's new reporting unit level as of September 30, 2019. See in Note 1, Description of Business and Summary of Significant Accounting Policies, for a description of the Company's goodwill and indefinite-lived intangible impairment testing methodology. The Company performed an impairment test before and after the change in our reportable segment structure, and as a result of this analysis, no impairment was identified. ASC 350 “Intangibles - Goodwill and Other Intangibles” provides guidance on a company's subsequent measurement and recognition of goodwill and other intangibles, including subsequent changes to carrying amounts, including impairment and fair value adjustments. In accordance with the guidance set forth in ASC 350, and in connection with the modification of its reportable segment structure, using a relative fair value approach, the Company reallocated $148,076 of goodwill between the CPP and HBP segments. See Note 18, Segment Information for further information on the Company's three reportable segments. The following table provides changes in carrying value of goodwill by segment through the year ended September 30, 2019:
The following table provides the gross carrying value and accumulated amortization for each major class of intangible asset:
Amortization expense for intangible assets subject to amortization was $9,922, $9,070 and $6,658 in 2019, 2018 and 2017, respectively. Amortization expense for each of the next five years and thereafter, based on current intangible balances and classifications, is estimated as follows: 2020 - $9,593; 2021 - $9,387; 2022 - $9,387; 2023 - $9,234 and 2024 - $9,208; thereafter - $90,761. No event or indicator or impairment occurred during 2019, which would require impairment testing of long-lived intangible assets including goodwill.
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NOTES PAYABLE, CAPITALIZED LEASES AND LONG-TERM DEBT |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NOTES PAYABLE, CAPITALIZED LEASES AND LONG-TERM DEBT | NOTES PAYABLE, CAPITALIZED LEASES AND LONG-TERM DEBT The present value of the net minimum payments on capitalized leases as of September 30, 2019 was follows:
Minimum payments under capital leases for the next five years are as follows: $3,950 in 2020, $2,153 in 2021, $668 in 2022, $157 in 2023, $0 in 2024 and $0 thereafter. Included in the consolidated balance sheet at September 30, 2019 under Property, plant and equipment, are costs and accumulated depreciation subject to capitalized leases of $41,742 and $35,196, respectively, and included in Other assets are deferred interest charges of $55. Included in the consolidated balance sheet at September 30, 2018, under Property, plant and equipment are costs and accumulated depreciation subject to capitalized leases of $41,742 and $31,969, respectively, and included in Other assets are deferred interest charges of $80. Amortization expense was $3,967, $3,514, and $1,683 in 2019, 2018 and 2017 respectively. In October 2006, a subsidiary of Griffon entered into a capital lease totaling $14,290 for real estate it occupies in Troy, Ohio. Approximately $10,000 was used to acquire the building and the remaining amount was used for improvements. The lease matures in 2021, bears interest at a fixed rate of 5.0%, is secured by a mortgage on the real estate and is guaranteed by Griffon. Debt at September 30, 2019 and 2018 consisted of the following:
Interest expense consists of the following for 2019, 2018 and 2017.
Minimum payments under debt agreements for the next five years are as follows: $10,525 in 2020, $86,108 in 2021, $1,016,109 in 2022, $441 in 2023, $217 in 2024 and $731 thereafter.
Proceeds from the $600,000 5.25% senior notes due in 2022 were used to redeem $550,000 of 7.125% senior notes due 2018, to pay a call and tender offer premium of $31,530 and to make interest payments of $16,716, with the balance used to pay a portion of the related transaction fees and expenses. In connection with the issuance of the Senior Notes, all obligations under the $550,000 of 7.125% senior notes due in 2018 were discharged. The Senior Notes are senior unsecured obligations of Griffon guaranteed by certain domestic subsidiaries, and subject to certain covenants, limitations and restrictions. On February 5, 2018, July 20, 2016 and June 18, 2014, Griffon exchanged all of the $275,000, $125,000 and $600,000 Senior Notes, respectively, for substantially identical Senior Notes registered under the Securities Act of 1933 via an exchange offer. The fair value of the Senior Notes approximated $1,010,000 on September 30, 2019 based upon quoted market prices (level 1 inputs). In connection with the issuance and exchange of the $275,000 senior notes, Griffon capitalized $8,472 of underwriting fees and other expenses; in addition to $13,329 capitalized under the previously issued $725,000 Senior Notes. All capitalized fees for the Senior Notes will amortize over the term of the notes and, at September 30, 2019, $9,175 remained to be amortized.
by Griffon. On March 13, 2019, the ESOP Term Loan was refinanced with an internal loan from Griffon which was funded with cash and a draw on its $350,000 credit facility. The internal loan interest rate is fixed at 2.91%, matures in June 2033 and requires quarterly payments of principal, currently $569, and interest. The internal loan is secured by shares purchased with the proceeds of the loan. The amount outstanding on the internal loan at September 30, 2019 was $32,418.
In July 2016, Griffon Australia Holdings Pty Ltd and its Australian subsidiaries ("Griffon Australia") entered into an AUD 30,000 term loan and an AUD 10,000 revolver. The term loan refinanced two existing term loans and the revolver replaced two existing lines. In December 2016, the amount available under the revolver was increased from AUD 10,000 to AUD 20,000 and, in March 2017 and September 2017, the term loan commitment was increased by AUD 5,000 and AUD 15,000, respectively. In March 2019, the term commitment was reduced by AUD 10,000 with proceeds from a receivable purchase agreement in the amount of AUD 10,000. The term loan requires quarterly principal payments of AUD 1,250 plus interest with a balloon payment of AUD 13,375 due upon maturity in March 2022, and accrues interest at Bank Bill Swap Bid Rate “BBSY” plus 1.90% per annum (2.85% at September 30, 2019). As of September 30, 2019, the term had an outstanding balance of AUD 25,875 ($17,492 as of September 30, 2019). The revolving facility and receivable purchase facility mature in March 2020, but are renewable upon mutual agreement with the lender. The revolving facility and receivable purchase facility accrue interest at BBSY plus 1.8% and 1.0%, respectively, per annum (2.81% and 2.01%, respectively, at September 30, 2019). At September 30, 2019, there were AUD 16,000 ($10,816 at September 30, 2019) under the revolver and the receivable purchase facility had an outstanding balance of AUD 10,000 ($6,760 at September 30, 2019). The revolver, receivable purchase facility and the term loan are all secured by substantially all of the assets of Griffon Australia and its subsidiaries. Griffon Australia is required to maintain a certain minimum equity level and is subject to a maximum leverage ratio and a minimum fixed charges cover ratio. In July 2018, the AMES Companies UK Ltd and its subsidiaries ("Ames UK") entered into a GBP 14,000 term loan, GBP 4,000 mortgage loan and GBP 5,000 revolver. The term loan and mortgage loan require quarterly principal payments of GBP 350 and GBP 83 plus interest, respectively, and have balloon payments due upon maturity, July 2023, of GBP 7,000 and GBP 2,333, respectively. The Term Loan and Mortgage Loans accrue interest at the GBP LIBOR Rate plus 2.25% and 1.8%, respectively (3.01% and 2.56% at September 30, 2019, respectively). The revolving facility matures in June 2020, but is renewable upon mutual agreement with the lender, and accrues interest at the Bank of England Base Rate plus 1.5% (2.25% as of September 30, 2019). As of September 30, 2019, the revolver had no outstanding balance while the term and mortgage loan balances amounted to GBP 15,831 ($19,485 as of September 30, 2019). The revolver and the term loan are both secured by substantially all of the assets of AMES UK and its subsidiaries. AMES UK is subject to a maximum leverage ratio and a minimum fixed charges cover ratio. An invoice discounting arrangement was canceled and replaced by the above loan facilities. (h) Other long-term debt primarily consists of a loan with the Pennsylvania Industrial Development Authority, with the balance consisting of capital leases. At September 30, 2019, Griffon and its subsidiaries were in compliance with the terms and covenants of its credit and loan agreements.
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SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS (Details) - Schedule of Valuation and Qualifying Accounts - USD ($) $ in Thousands |
12 Months Ended | ||
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Sep. 30, 2019 |
Sep. 30, 2018 |
Sep. 30, 2017 |
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SEC Schedule, 12-09, Allowance, Credit Loss [Member] | |||
Segment Reporting Information [Line Items] | |||
Balance at Beginning of Year | $ 6,408 | $ 5,966 | $ 4,692 |
Recorded to Cost and Expense | (1,867) | (5,920) | 1,680 |
Accounts Written Off, net | 3,323 | 5,219 | (406) |
Other | 18 | 1,143 | 0 |
Balance at End of Year | 7,881 | 6,408 | 5,966 |
Inventory valuation [Member] | |||
Segment Reporting Information [Line Items] | |||
Balance at Beginning of Year | 26,065 | 16,419 | 15,338 |
Recorded to Cost and Expense | 2,774 | 1,924 | 851 |
Accounts Written Off, net | (2,614) | (306) | 203 |
Other | (56) | 8,028 | 27 |
Balance at End of Year | 26,169 | 26,065 | 16,419 |
Deferred tax valuation allowance [Member] | |||
Segment Reporting Information [Line Items] | |||
Balance at Beginning of Year | 8,520 | 17,466 | 12,832 |
Recorded to Cost and Expense | 2,302 | (8,946) | 4,634 |
Accounts Written Off, net | 0 | 0 | 0 |
Other | 0 | 0 | 0 |
Balance at End of Year | 10,823 | 8,520 | 17,466 |
Bad debts [Member] | SEC Schedule, 12-09, Allowance, Credit Loss [Member] | |||
Segment Reporting Information [Line Items] | |||
Balance at Beginning of Year | 1,824 | 1,109 | 1,217 |
Recorded to Cost and Expense | 464 | (40) | 279 |
Accounts Written Off, net | (425) | 11 | (387) |
Other | 18 | 744 | 0 |
Balance at End of Year | 1,881 | 1,824 | 1,109 |
Sales returns and allowances [Member] | SEC Schedule, 12-09, Allowance, Credit Loss [Member] | |||
Segment Reporting Information [Line Items] | |||
Balance at Beginning of Year | 4,584 | 4,857 | 3,475 |
Recorded to Cost and Expense | (2,331) | (5,880) | 1,401 |
Accounts Written Off, net | 3,748 | 5,208 | (19) |
Other | 0 | 399 | 0 |
Balance at End of Year | $ 6,000 | $ 4,584 | $ 4,857 |
REVENUE |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
REVENUE | REVENUE On October 1, 2018, the Company adopted the requirements of Accounting Standard Codification (“ASC”) Topic 606, “Revenue from Contracts with Customers”, using the modified retrospective method applied to those contracts that were not completed as of October 1, 2018. The Company’s comparative consolidated results over the prior period have not been adjusted and continue to be reported under previously issued guidance, ASC 605 - Revenue Recognition, which required that revenue was accounted for when the earnings process was complete. This accounting standard did not materially impact the Company’s revenue recognition practices in our CPP and HBP Segments, however, it impacted revenue recognition practices in our Defense Electronics Segment. The impact of adopting this accounting standard was not material to the Company’s consolidated financial statements as of and for the year ended September 30, 2019. Under the modified retrospective method, the Company recognized the cumulative effect of initially applying this accounting standard as an adjustment to the opening balance in retained earnings of approximately $5,618 as of October 1, 2018, primarily relating to certain contracts in the Defense Electronics Segment containing provisions for radar and communication products that have an alternative use and / or no right to payment. For these contracts, the Company now recognizes revenue at a point in time, rather than over time as this measure more accurately depicts the transfer of control to the customer relative to the goods or services promised under the contract. The cumulative effect of the changes made to the Company's Consolidated October 1, 2018 Balance Sheet for the adoption of ASC 606 is as follows:
(1) Billings in excess of costs is reported in Accounts payable on the Company's Consolidated Balance Sheets. The impact to the Company's Consolidated Statement of Operations for the year ended September 30, 2019 and to the Company's Balance Sheet as of September 30, 2019 was as follows:
The Company’s accounting policy has been updated to align with the new standard to recognize revenue when the following criteria are met: 1) Contract with the customer has been identified; 2) Performance obligations in the contract have been identified; 3) Transaction price has been determined; 4) Transaction price has been allocated to the performance obligations; and 5) Revenue is recognized when (or as) performance obligations are satisfied. See Note 18 - Business Segments for revenue from contracts with customers disaggregated by end markets, segments and geographic location. Performance Obligations A performance obligation is a promise in a contract to transfer a distinct good or service, or a bundle of goods or services, to the customer, and is the unit of accounting under ASC Topic 606. A contract with a customer is an agreement which both parties have approved, that creates enforceable rights and obligations, has commercial substance and with respect to which payment terms are identified and collectability is probable. Once the Company has entered into a contract or purchase order, it is evaluated to identify performance obligations. For each performance obligation, revenue is recognized when control of the promised products is transferred to the customer, or services are satisfied under the contract or purchase order, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those products or services (the transaction price). A contract's transaction price is allocated to each distinct performance obligation and recognized as revenue when each performance obligation is satisfied. A majority of the Company’s contracts have a single performance obligation which represents, in most cases, the product being sold to the customer. To a lesser extent, some contracts include multiple performance obligations such as a product, the related installation, and extended warranty services. These contracts require judgment in determining the number of performance obligations. Over 80% of the Company’s performance obligations are recognized at a point in time that relates to the manufacture and sale of a broad range of products and components within the CPP and HBP Segments, and revenue is recognized when title, and risk and rewards of ownership, have transferred to the customer. Less than 20% of the Company’s performance obligations are recognized over time or under the percentage-of-completion method that relate to prime or subcontractors from contract awards with the U.S. Government, as well as foreign governments and other commercial customers within our Defense Electronics Segment. Sales recognized over time are generally accounted for using an input measure to determine progress completed at the end of the period. We believe that cumulative costs incurred to date as a percentage of estimated total contract costs at completion is an appropriate measure of progress towards satisfaction of performance obligations, as it most accurately depicts the progress of our work and transfer of control to our customers. Revenue from CPP and HBP Segments A majority of CPP and HBP Segment revenue is short cycle in nature with shipments occurring within one year from order and does not include a material long-term financing component, implicitly or explicitly. Payment terms generally range between 15 to 90 days and vary by the location of the business, the type of products manufactured to be sold and the volume of products sold, among other factors. The Company’s CPP and HBP Segments recognize revenue from product sales when all factors are met, including when control of a product transfers to the customer upon its shipment, completion of installation, testing, certification or other substantive acceptance required under the contract. Other than standard product warranty provisions, sales arrangements provide for no other significant post-shipment obligations on the Company. From time-to-time and for certain customers, rebates and other sales incentives, promotional allowances or discounts are offered, typically related to customer purchase volumes, all of which are fixed or determinable and are classified as a reduction of revenue and recorded at the time of sale. Griffon provides for sales returns and allowances based upon historical returns experience. The majority of the Company’s contracts in CPP and HBP offer assurance-type warranties in connection with the sale of a product to a customer. Assurance-type warranties provide a customer with assurance that the related product will function as the parties intended because it complies with agreed-upon specifications. Such warranties do not represent a separate performance obligation. Payment terms in CPP and HBP vary depending on the type and location of the customer and the products or services offered. Generally, the period between the time revenue is recognized and the time payment is due is not significant. Shipping and handling charges are not considered a separate performance obligation. If revenue is recognized for a good before it is shipped and handled, the related shipping and handling costs must be accrued. Additionally, all taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction and collected from a customer (e.g., sales, use, value added, and some excise taxes) are excluded from revenue. The Company's policies related to shipping, handling and taxes have not changed with the adoption of ASC 606. Revenue from Defense Electronics Segment The Company’s Defense Electronics segment earns a substantial portion of its revenue as either a prime contractor or subcontractor from contract awards with the U.S. Government, as well as foreign governments and other, commercial, customers. These contracts are typically long-term in nature, usually greater than one year and do not include a material long-term financing component, either implicitly or explicitly. Revenue and profits from such contracts are recognized under the percentage-of-completion (over time) method of accounting. Revenue and profits on fixed-price contracts that contain engineering as well as production requirements are recorded based on the ratio of total actual incurred costs to date to the total estimated costs for each contract (cost-to-cost method). Using the cost-to-cost method, revenue is recorded at amounts equal to the ratio of actual cumulative costs incurred divided by total estimated costs at completion, multiplied by the total estimated contract revenue, less the cumulative revenue recognized in prior periods. The profit recorded on a contract using this method is equal to the current estimated total profit margin multiplied by the cumulative revenue recognized, less the amount of cumulative profit previously recorded for the contract in prior periods. As this method relies on the substantial use of estimates, these projections may be revised throughout the life of a contract. Components of this formula and ratio that may be estimated include gross profit margin and total costs at completion. The cost performance and estimates to complete long-term contracts are reviewed, at a minimum, on a quarterly basis, as well as when information becomes available that would necessitate a review of the current estimate. Adjustments to estimates for a contract's estimated costs at completion and estimated profit or loss are often required as experience is gained, more information is obtained (even though the scope of work required under the contract may or may not change) and contract modifications occur. The impact of such adjustments to estimates is made on a cumulative basis in the period when such information has become known. The 2019, 2018, and 2017 income from operations included net favorable/(unfavorable) catch-up adjustments approximating $(4,500), $1,400 and $600, respectively. Gross profit is impacted by a variety of factors, including the mix of products, systems and services, production efficiencies, price competition and general economic conditions. Revenue and profits on cost-reimbursable type contracts are recognized as allowable costs and are incurred on the contract at an amount equal to the allowable costs plus the estimated profit on those costs. The estimated profit on a cost-reimbursable contract may be fixed or variable based on the contractual fee arrangement. Incentive and award fees on these contracts are recorded as revenue when the criteria under which they are earned are reasonably assured of being met and can be estimated. For contracts with multiple performance obligations, judgment is required to determine whether performance obligations specified in these contacts are distinct and should be accounted for as separate revenue transactions for recognition purposes. In these types of contracts, the Company allocates the total transaction price to each performance obligation in an amount based on the estimated relative standalone selling prices of the promised goods or services underlying each performance obligation. The Company uses an observable price to determine the stand-alone selling price for separate performance obligations or a cost plus margin approach when one is not available. For contracts in which anticipated total costs exceed the total expected revenue, an estimated loss is recognized in the period when identifiable. A provision for the entire amount of the estimated loss is recorded on a cumulative basis. The estimated remaining costs to complete loss contracts as of September 30, 2019 was $9,800 and is recorded as a reduction to gross margin on the Consolidated Statements of Operations and Comprehensive Income (Loss). This loss had an immaterial impact on Griffon's Consolidated Financial Statements. Amounts representing contract change orders or claims are included in revenue only when they can be reliably estimated and their realization is probable, and are determined on a percentage-of-completion basis measured by the cost-to-cost method. Substantially all of Telephonics’ U.S. Government end-user contracts contain a termination for convenience clause, regardless whether Telephonics is the prime contractor or the subcontractor. This clause generally entitles Telephonics, upon a termination for convenience, to receive the purchase price for delivered items, reimbursement of allowable work-in-process costs, and an allowance for profit. Allowable costs would include the costs to terminate existing agreements with suppliers. From time to time, Telephonics may combine contracts if they are negotiated together, have specific requirements to combine, or are otherwise closely related. Transaction Price Allocated to the Remaining Performance Obligations On September 30, 2019, we had $389,300 of remaining performance obligations, which we also refer to as total backlog. We expect to recognize approximately 72% of our remaining performance obligations as revenue within one year, with the balance to be completed thereafter. Backlog represents the dollar value of funded orders for which work has not been performed. Backlog generally increases with bookings, and converts into revenue as we incur costs related to contractual commitments or the shipment of product. Given the nature of our business and a larger dependency on international customers, our bookings, and therefore our backlog, is impacted by the longer maturation cycles resulting in delays in the timing and amounts of such awards, which are subject to numerous factors, including fiscal constraints placed on customer budgets; political uncertainty; the timing of customer negotiations; and the timing of governmental approvals. Contract Balances Contract assets were $105,111 as of September 30, 2019 compared to $121,803 as of September 30, 2018. The $16,692 decrease in our contract assets balance was primarily due to the implementation of ASC 606. Excluding the impact of ASC 606, the increase was primarily due to the timing of billings and work performed on various radar and surveillance programs. Contract assets primarily relate to the Company's right to consideration for work completed but not billed at the reporting date and are recorded in Contract costs and recognized income not yet billed, net of progress payments in the Consolidated Balance Sheets. Contract assets are transferred to receivables when the right to consideration becomes unconditional. Contract costs and recognized income not yet billed consists of amounts accounted for under the percentage of completion method of accounting, recoverable costs and accrued profit that cannot yet be invoiced under the terms of certain long-term contracts. Amounts will be invoiced when applicable contract terms, such as the achievement of specified milestones or product delivery, are met. At September 30, 2019 and 2018, approximately $13,100 and $29,500, respectively, of contract costs and recognized income not yet billed were expected to be collected after one year. As of September 30, 2019, Contract costs and recognized income not yet billed included no reserves for contract risk and as of September 30, 2018, included $400 of reserves for contract risk. |
INCOME TAXES (Details) - Schedule of effective income tax rate reconciliation |
12 Months Ended | ||
---|---|---|---|
Sep. 30, 2019 |
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Income Tax Disclosure [Abstract] | |||
U.S. Federal income tax provision (benefit) rate | 21.00% | 24.50% | 35.00% |
State and local taxes, net of Federal benefit | 6.60% | 10.20% | 12.40% |
Non-U.S. taxes | 2.00% | 3.60% | (12.40%) |
Non-U.S. taxes - foreign permanent items and taxes | 0.00% | 0.00% | (11.40%) |
Change in domestic manufacturing deduction | 0.70% | 0.00% | (5.80%) |
Change in tax contingency reserves | (0.70%) | (0.60%) | 0.70% |
Impact of federal rate change on deferred tax balances | 0.00% | (60.00%) | 0.00% |
Repatriation of foreign earnings | 1.00% | 61.60% | 0.00% |
Change in valuation allowance | 3.30% | 13.40% | (0.60%) |
Other non-deductible/non-taxable items, net | 3.10% | (5.20%) | 7.60% |
Effective Income Tax Rate Reconciliation, Nondeductible Expense, Officer Compensation, Percent | 5.20% | 6.40% | 0.70% |
Research credits | (4.70%) | (39.40%) | (3.60%) |
Share based compensation | 0.40% | (3.80%) | (26.60%) |
Other | (1.10%) | (9.10%) | (2.50%) |
Effective tax provision (benefit) rate | 36.80% | 1.60% | (6.50%) |
EMPLOYEE BENEFIT PLANS (Details) - Plan assets and benefit obligation of the defined benefit plans - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Sep. 30, 2019 |
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Change in benefit obligation: | |||
Actuarial (gain) loss | $ (4,167) | ||
Change in plan assets: | |||
Fair value of plan assets at beginning of fiscal year | 150,634 | ||
Fair value of plan assets at end of fiscal year | 145,319 | $ 150,634 | |
Pension Plan [Member] | |||
Change in benefit obligation: | |||
Benefit obligation at beginning of fiscal year | 161,328 | 174,337 | |
Interest cost | 5,778 | 5,084 | $ 4,892 |
Benefits paid | (10,790) | (10,531) | |
Actuarial (gain) loss | 21,481 | (7,562) | |
Benefit obligation at end of fiscal year | 177,797 | 161,328 | 174,337 |
Change in plan assets: | |||
Fair value of plan assets at beginning of fiscal year | 150,680 | 150,822 | |
Actual return on plan assets | 2,606 | 7,940 | |
Company contributions | 3,114 | 2,449 | |
Benefits paid | (10,790) | (10,531) | |
Fair value of plan assets at end of fiscal year | 145,610 | 150,680 | 150,822 |
Projected benefit obligation in excess of plan assets | 32,187 | 10,648 | |
Amounts recognized in the statement of financial position consist of: | |||
Accrued liabilities | 0 | 0 | |
Other liabilities (long-term) | (32,187) | (10,648) | |
Total Liabilities | (32,187) | (10,648) | |
Net actuarial losses | 47,663 | 19,088 | |
Prior service cost | 0 | 0 | |
Deferred taxes | (17,098) | (6,103) | |
Total Accumulated other comprehensive loss, net of tax | 30,565 | 12,985 | |
Net amount recognized at September 30, | (1,622) | 2,337 | |
Accumulated benefit obligations | 177,797 | 161,328 | |
Information for plans with accumulated benefit obligations in excess of plan assets: | |||
ABO | 177,797 | 161,328 | |
PBO | (32,187) | (10,648) | |
Fair value of plan assets | 145,610 | 150,680 | |
Supplemental Employee Retirement Plan [Member] | |||
Change in benefit obligation: | |||
Benefit obligation at beginning of fiscal year | 15,718 | 32,627 | |
Interest cost | 503 | 544 | 715 |
Benefits paid | (1,942) | (3,001) | |
Actuarial (gain) loss | 1,901 | (14,452) | |
Benefit obligation at end of fiscal year | 16,180 | 15,718 | 32,627 |
Change in plan assets: | |||
Fair value of plan assets at beginning of fiscal year | 0 | 0 | |
Actual return on plan assets | 0 | 0 | |
Company contributions | 1,942 | 3,001 | |
Benefits paid | (1,942) | (3,001) | |
Fair value of plan assets at end of fiscal year | 0 | 0 | $ 0 |
Projected benefit obligation in excess of plan assets | 16,180 | 15,718 | |
Amounts recognized in the statement of financial position consist of: | |||
Accrued liabilities | (1,906) | (1,906) | |
Other liabilities (long-term) | (14,279) | (13,812) | |
Total Liabilities | (16,185) | (15,718) | |
Net actuarial losses | 6,609 | 4,965 | |
Prior service cost | 14 | 28 | |
Deferred taxes | (2,374) | (1,597) | |
Total Accumulated other comprehensive loss, net of tax | 4,249 | 3,396 | |
Net amount recognized at September 30, | (11,936) | (12,322) | |
Accumulated benefit obligations | 16,180 | 15,718 | |
Information for plans with accumulated benefit obligations in excess of plan assets: | |||
ABO | 16,180 | 15,718 | |
PBO | (16,180) | (15,718) | |
Fair value of plan assets | $ 0 | $ 0 |
NOTES PAYABLE, CAPITALIZED LEASES AND LONG-TERM DEBT (Details) - Summary of Interest Expense Incurred - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Sep. 30, 2019 |
Sep. 30, 2018 |
Sep. 30, 2017 |
|
NOTES PAYABLE, CAPITALIZED LEASES AND LONG-TERM DEBT (Details) - Summary of Interest Expense Incurred [Line Items] | |||
Effective Interest Rate | 5.66% | ||
Cash Interest | $ 62,673 | $ 60,349 | $ 47,002 |
Amort. Debt Discount | 270 | 270 | 1,518 |
Amort. Deferred Cost & Other Fees | 5,123 | 4,949 | 2,993 |
Total Interest Expense | $ 68,066 | 65,568 | $ 51,513 |
Senior note due 2022 [Member] | |||
NOTES PAYABLE, CAPITALIZED LEASES AND LONG-TERM DEBT (Details) - Summary of Interest Expense Incurred [Line Items] | |||
Effective Interest Rate | 5.66% | 5.55% | |
Cash Interest | $ 52,500 | 52,500 | $ 38,063 |
Amort. Debt Discount | 270 | 270 | 270 |
Amort. Deferred Cost & Other Fees | 3,803 | 3,803 | 1,857 |
Total Interest Expense | 56,573 | $ 56,573 | 40,190 |
Revolver due 2018 [Member] | |||
NOTES PAYABLE, CAPITALIZED LEASES AND LONG-TERM DEBT (Details) - Summary of Interest Expense Incurred [Line Items] | |||
Cash Interest | 6,998 | 4,951 | |
Amort. Debt Discount | 0 | 0 | |
Amort. Deferred Cost & Other Fees | 980 | 567 | |
Total Interest Expense | $ 7,978 | $ 5,518 | |
Convert. debt due 2017 [Member] | |||
NOTES PAYABLE, CAPITALIZED LEASES AND LONG-TERM DEBT (Details) - Summary of Interest Expense Incurred [Line Items] | |||
Effective Interest Rate | 8.90% | ||
Cash Interest | $ 1,167 | ||
Amort. Debt Discount | 1,248 | ||
Amort. Deferred Cost & Other Fees | 148 | ||
Total Interest Expense | $ 2,563 | ||
Real estate mortgages [Member] | |||
NOTES PAYABLE, CAPITALIZED LEASES AND LONG-TERM DEBT (Details) - Summary of Interest Expense Incurred [Line Items] | |||
Effective Interest Rate | 3.30% | 2.60% | |
Cash Interest | $ 349 | $ 582 | |
Amort. Debt Discount | 0 | 0 | |
Amort. Deferred Cost & Other Fees | 320 | 58 | |
Total Interest Expense | $ 669 | $ 640 | |
ESOP Loans [Member] | |||
NOTES PAYABLE, CAPITALIZED LEASES AND LONG-TERM DEBT (Details) - Summary of Interest Expense Incurred [Line Items] | |||
Effective Interest Rate | 6.30% | 6.30% | 4.20% |
Cash Interest | $ 937 | $ 1,802 | $ 1,557 |
Amort. Debt Discount | 0 | 0 | 0 |
Amort. Deferred Cost & Other Fees | 186 | 124 | 133 |
Total Interest Expense | 1,123 | 1,926 | $ 1,690 |
Capital lease - real estate [Member] | |||
NOTES PAYABLE, CAPITALIZED LEASES AND LONG-TERM DEBT (Details) - Summary of Interest Expense Incurred [Line Items] | |||
Effective Interest Rate | 5.50% | ||
Cash Interest | 372 | 581 | $ 296 |
Amort. Debt Discount | 0 | 0 | 0 |
Amort. Deferred Cost & Other Fees | 25 | 25 | 25 |
Total Interest Expense | 397 | 606 | 321 |
Non U.S. lines of credit [Member] | |||
NOTES PAYABLE, CAPITALIZED LEASES AND LONG-TERM DEBT (Details) - Summary of Interest Expense Incurred [Line Items] | |||
Cash Interest | 19 | 34 | 76 |
Amort. Debt Discount | 0 | 0 | 0 |
Amort. Deferred Cost & Other Fees | 15 | 15 | 128 |
Total Interest Expense | 34 | 49 | 204 |
Non U.S. term loans [Member] | |||
NOTES PAYABLE, CAPITALIZED LEASES AND LONG-TERM DEBT (Details) - Summary of Interest Expense Incurred [Line Items] | |||
Cash Interest | 1,592 | 1,420 | 860 |
Amort. Debt Discount | 0 | 0 | 0 |
Amort. Deferred Cost & Other Fees | 109 | 90 | 67 |
Total Interest Expense | 1,701 | 1,510 | 927 |
Other long term debt [Member] | |||
NOTES PAYABLE, CAPITALIZED LEASES AND LONG-TERM DEBT (Details) - Summary of Interest Expense Incurred [Line Items] | |||
Cash Interest | 640 | 494 | 245 |
Amort. Debt Discount | 0 | 0 | |
Amort. Deferred Cost & Other Fees | 5 | 7 | 10 |
Total Interest Expense | $ 645 | $ 501 | $ 255 |
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) shares in Thousands, $ in Thousands, $ in Thousands |
12 Months Ended | ||
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Sep. 30, 2019
USD ($)
$ / shares
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Sep. 30, 2018
USD ($)
$ / shares
shares
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Sep. 30, 2017
USD ($)
$ / shares
shares
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|
Income Statement [Abstract] | |||
Revenue | $ 2,209,289 | $ 1,977,918 | $ 1,524,997 |
Cost of goods and services | 1,614,020 | 1,448,737 | 1,116,871 |
Gross profit | 595,269 | 529,181 | 408,126 |
Selling, general and administrative expenses | 460,004 | 436,380 | 341,092 |
Income from continuing operations | 135,265 | 92,801 | 67,034 |
Other income (expense) | |||
Interest expense | (68,066) | (65,568) | (51,513) |
Interest income | 806 | 1,697 | 64 |
Other, net | 4,173 | 4,880 | 1,113 |
Total other income (expense) | (63,087) | (58,991) | (50,336) |
Income before taxes from continuing operations | 72,178 | 33,810 | 16,698 |
Provision (benefit) for income taxes | 26,556 | 555 | (1,085) |
Income (loss) from continuing operations | 45,622 | 33,255 | 17,783 |
Discontinued operations: | |||
Income (loss) from operations of discontinued businesses | (11,050) | 119,981 | 22,276 |
Provision for income taxes | (2,715) | 27,558 | 25,147 |
Income (loss) from discontinued operations | (8,335) | 92,423 | (2,871) |
Net income | $ 37,287 | $ 125,678 | $ 14,912 |
Income from continuing operations (in usd per share) | $ / shares | $ 1.11 | $ 0.81 | $ 0.43 |
Income from discontinued operations (in usd per share) | $ / shares | (0.20) | 2.25 | (0.07) |
Basic earnings per common share (in Dollars per share) | $ / shares | $ 0.91 | $ 3.06 | $ 0.36 |
Weighted-average shares outstanding (in Shares) | shares | 40,934 | 41,005 | 41,005 |
Income from continuing operations (in usd per share) | $ / shares | $ 1.06 | $ 0.78 | $ 0.41 |
Income from discontinued operations (in usd per share) | $ / shares | (0.20) | 2.18 | (0.07) |
Diluted earnings per common share (in usd per share) | $ / shares | $ 0.87 | $ 2.96 | $ 0.35 |
Weighted-average shares outstanding (in Shares) | shares | 42,888 | 42,422 | 43,011 |
Other comprehensive income (loss), net of taxes: | |||
Foreign currency translation adjustments | $ (8,460) | $ 9,403 | $ 10,667 |
Pension and other post retirement plans | (23,055) | 16,381 | 9,203 |
Gain (loss) on cash flow hedge | (289) | 585 | 890 |
Total other comprehensive income (loss), net of taxes | (31,804) | 26,369 | 20,760 |
Comprehensive income | $ 5,483 | $ 152,047 | $ 35,672 |
EMPLOYEE BENEFIT PLANS - Significant Unobservable Inputs (Details) $ in Thousands |
12 Months Ended |
---|---|
Sep. 30, 2019
USD ($)
| |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |
Fair value of plan assets at beginning of fiscal year | $ 150,634 |
Fair value of plan assets at end of fiscal year | 145,319 |
Significant Unobservable Inputs (Level 3) [Member] | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |
Fair value of plan assets at beginning of fiscal year | 0 |
Defined Benefit Plan, Plan Assets Level 3 Reconciliation, Increase (Decrease) for Purchase, Sale, and Settlement | 7,695 |
Defined Benefit Plan, Plan Assets Level 3 Reconciliation, Increase (Decrease) for Actual Return (Loss) on Plan Assets Still Held | 1,081 |
Fair value of plan assets at end of fiscal year | $ 8,776 |
INVENTORIES (Details) - Summary of Inventories stated at lower cost - USD ($) $ in Thousands |
Sep. 30, 2019 |
Oct. 01, 2018 |
Sep. 30, 2018 |
---|---|---|---|
Inventory Disclosure [Abstract] | |||
Raw materials and supplies | $ 121,791 | $ 97,645 | |
Work in process | 93,830 | 83,578 | |
Finished goods | 226,500 | 217,136 | |
Total | $ 442,121 | $ 420,384 | $ 398,359 |
REVENUE - Narrative (Details) - USD ($) $ in Thousands |
12 Months Ended | ||||||
---|---|---|---|---|---|---|---|
Sep. 30, 2019 |
Sep. 30, 2018 |
Sep. 30, 2017 |
Oct. 01, 2018 |
||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||
Percentage of performance obligations recognized at a point in time (more than) | 80.00% | ||||||
Percentage of performance obligations recognized over time (less than) | 20.00% | ||||||
Favorable (unfavorable) catch-up adjustments to income from operations | $ (4,500) | $ 1,400 | $ 600 | ||||
Accumulated estimated costs to complete loss contracts | 9,800 | ||||||
Contract costs and recognized income not yet billed, net of progress payments, current | 105,111 | 121,803 | $ 100,821 | ||||
Decrease in contract assets balance | 16,692 | ||||||
Contract costs and recognized income not yet billed, net of progress payments, noncurrent | 13,100 | 29,500 | |||||
Unbilled receivable reserve | 0 | 400 | |||||
Billings in excess of costs | 26,259 | 25,841 | |||||
Increase in billings in excess of costs | 8,700 | ||||||
Accounting Standards Update 2014-09 [Member] | |||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||
Cumulative effect adjustment for new accounting pronouncement | [1] | 5,618 | |||||
Calculated under Revenue Guidance in Effect before Topic 606 [Member] | |||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||
Contract costs and recognized income not yet billed, net of progress payments, current | 119,348 | 121,803 | |||||
Billings in excess of costs | $ 17,977 | $ 17,559 | |||||
Retained Earnings [Member] | Accounting Standards Update 2014-09 [Member] | |||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||
Cumulative effect adjustment for new accounting pronouncement | [1] | $ 5,618 | |||||
Minimum [Member] | Construction and Professional Products and Home and Building Products Segments [Member] | |||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||
Payment term | 15 days | ||||||
Maximum [Member] | Construction and Professional Products and Home and Building Products Segments [Member] | |||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||
Payment term | 90 days | ||||||
|
ACQUISITIONS (Details) - Schedule of Intangible Assets Acquired in Cornell Cookson Acquisition (Details) - USD ($) $ in Thousands |
Jun. 04, 2018 |
Sep. 30, 2019 |
Sep. 30, 2018 |
Sep. 30, 2017 |
---|---|---|---|---|
Business Acquisition [Line Items] | ||||
Goodwill | $ 437,067 | $ 439,395 | $ 319,139 | |
Cornell Cookson [Member] | ||||
Business Acquisition [Line Items] | ||||
Goodwill | $ 43,183 | |||
Indefinite-lived intangibles | 53,500 | |||
Definite-lived intangibles | $ 14,100 | |||
Amortization Period (Years) | 12 years | |||
Total goodwill and intangible assets | $ 110,783 |
STOCKHOLDERS' EQUITY AND EQUITY COMPENSATION (Details) - Summary of stock-based compensation expense (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Sep. 30, 2019 |
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Stockholders' Equity Note [Abstract] | |||
Pre-tax compensation expense | $ 13,285 | $ 10,078 | $ 8,090 |
Tax benefit | (2,115) | (2,036) | (2,836) |
Total stock-based compensation expense, net of tax | $ 11,170 | $ 8,042 | $ 5,254 |
GOODWILL AND OTHER INTANGIBLES (Details) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Sep. 30, 2019
USD ($)
segment
|
Sep. 30, 2018
USD ($)
|
Sep. 30, 2017
USD ($)
|
|
Goodwill [Line Items] | |||
Number of Reportable Segments | segment | 3 | ||
Reallocation of Goodwill | $ 0 | ||
Amortization expense | 9,922 | $ 9,070 | $ 6,658 |
Amortization expense estimated for 2018 | 9,593 | ||
Amortization expense estimated for 2019 | 9,387 | ||
Amortization expense estimated for 2020 | 9,387 | ||
Amortization expense estimated for 2021 | 9,234 | ||
Amortization expense estimated for 2022 | 9,208 | ||
Amortization expense estimated thereafter | 90,761 | ||
Home and Building Products (HBP) [Member] | |||
Goodwill [Line Items] | |||
Reallocation of Goodwill | 148,076 | ||
Consumer And Professional Products Segment [Member] | |||
Goodwill [Line Items] | |||
Reallocation of Goodwill | $ (148,076) |
DISCONTINUED OPERATIONS (Details) - Summary of discontinued operations - USD ($) $ in Thousands |
Sep. 30, 2019 |
Sep. 30, 2018 |
Sep. 30, 2017 |
---|---|---|---|
Assets of discontinued operations: | |||
Assets of discontinued operations | $ 321 | $ 324 | |
ASSETS OF DISCONTINUED OPERATIONS | 2,888 | 2,916 | |
Disposal Group, Including Discontinued Operation, Assets | 3,209 | 3,240 | $ 374,013 |
Liabilities of discontinued operations: | |||
Liabilities of discontinued operations | 4,333 | 7,210 | |
LIABILITIES OF DISCONTINUED OPERATIONS | $ 3,331 | $ 2,647 |
EARNINGS PER SHARE EARNINGS PER SHARE (Details) - Basic and diluted EPS from continuing operations - shares shares in Thousands |
12 Months Ended | ||
---|---|---|---|
Sep. 30, 2019 |
Sep. 30, 2018 |
Sep. 30, 2017 |
|
EARNINGS (LOSS) PER SHARE (Details) - Basic and diluted EPS from continuing operations [Line Items] | |||
Weighted average shares outstanding - basic | 40,934 | 41,005 | 41,005 |
Incremental shares from stock based compensation | 1,954 | 1,417 | 1,642 |
Convertible debt due 2017 | 0 | 0 | 364 |
Weighted average shares outstanding - diluted | 42,888 | 42,422 | 43,011 |
Share-based Payment Arrangement, Option [Member] | |||
EARNINGS (LOSS) PER SHARE (Details) - Basic and diluted EPS from continuing operations [Line Items] | |||
Anti-dilutive awards excluded from diluted EPS computation | 0 | 0 | 0 |
REPORTABLE SEGMENTS (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Segment Reporting Information, by Segment | The following table provides a reconciliation of Segment Adjusted EBITDA to Income before taxes and discontinued operations:
Information on Griffon’s reportable segments from continuing operations is as follows:
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Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis |
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Disaggregation of Revenue |
The following table presents revenue disaggregated by geography based on the location of the Company's customer:
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Schedule Of Segment Information By Geographic Region | Segment information by geographic region for 2018 and 2017 was as follows:
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Long-lived Assets by Geographic Areas |
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INCOME TAXES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Income Loss From Continuing Operations Before Taxes | Income taxes have been based on the following components of Income before taxes from continuing operations:
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Schedule of Components of Income Tax Expense (Benefit) | Provision (benefit) for income taxes on income was comprised of the following from continuing operations:
|
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Schedule of Effective Income Tax Rate Reconciliation | Differences between the effective income tax rate applied to Income and the U.S. Federal income statutory rate from continuing operations were as follows:
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Schedule of Deferred Tax Assets and Liabilities | The tax effect of temporary differences that give rise to future deferred tax assets and liabilities are as follows:
|
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Schedule Of Components of Net Deferred Tax Asset Liability By Balance Sheet Account | The components of the net deferred tax liability, by balance sheet account, were as follows:
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Schedule of Unrecognized Tax Benefits Roll Forward | The following is a roll forward of unrecognized tax benefits:
|
REVENUE - Cumulative Effective of Adoption of ASC 606 (Details) $ in Thousands, $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2019
USD ($)
|
Jun. 30, 2019
USD ($)
|
Mar. 31, 2019
USD ($)
|
Dec. 31, 2018
USD ($)
|
Sep. 30, 2018
USD ($)
|
Jun. 30, 2018
USD ($)
|
Mar. 31, 2018
USD ($)
|
Dec. 31, 2017
USD ($)
|
Sep. 30, 2019
USD ($)
|
Sep. 30, 2019
CAD ($)
|
Sep. 30, 2018
USD ($)
|
Sep. 30, 2018
CAD ($)
|
Sep. 30, 2017
USD ($)
|
Oct. 01, 2018
USD ($)
|
Sep. 30, 2016
USD ($)
|
|
CURRENT ASSETS | |||||||||||||||
Contract costs and recognized income not yet billed, net of progress payments | $ 105,111 | $ 121,803 | $ 105,111 | $ 121,803 | $ 100,821 | ||||||||||
Inventories | 442,121 | 398,359 | 442,121 | 398,359 | 420,384 | ||||||||||
Total Current Assets | 925,179 | 912,874 | 925,179 | 912,874 | 913,917 | ||||||||||
Assets | 2,074,939 | 2,084,890 | 2,074,939 | 2,084,890 | $ 1,873,541 | 2,085,933 | |||||||||
CURRENT LIABILITIES | |||||||||||||||
Accounts payable | 250,576 | 233,658 | 250,576 | 233,658 | 241,940 | ||||||||||
Billings in excess of costs | 26,259 | 26,259 | 25,841 | ||||||||||||
Total Current Liabilities | 390,099 | 393,071 | 390,099 | 393,071 | 401,353 | ||||||||||
OTHER LIABILITIES | 109,997 | 106,710 | 109,997 | 106,710 | 105,089 | ||||||||||
Liabilities | 1,597,176 | 1,610,499 | 1,597,176 | 1,610,499 | 1,617,160 | ||||||||||
SHAREHOLDERS’ EQUITY | |||||||||||||||
Retained earnings | 568,516 | 550,523 | 568,516 | 550,523 | 544,905 | ||||||||||
Total Shareholders' Equity | 477,763 | 474,391 | 477,763 | 474,391 | 398,808 | 468,773 | $ 410,947 | ||||||||
Total Liabilities and Shareholders’ Equity | 2,074,939 | 2,084,890 | 2,074,939 | 2,084,890 | 2,085,933 | ||||||||||
Income Statement | |||||||||||||||
Net sales | 2,209,289 | $ 3,500 | 1,977,918 | $ 700 | 1,524,997 | ||||||||||
Cost of goods and services | 1,614,020 | 1,448,737 | 1,116,871 | ||||||||||||
Income (loss) before taxes from continuing operations | 72,178 | 33,810 | 16,698 | ||||||||||||
Provision (benefit) from income taxes | 26,556 | 555 | (1,085) | ||||||||||||
Income (loss) from continuing operations | 16,251 | $ 14,128 | $ 6,490 | $ 8,753 | 1,031 | $ 7,442 | $ 1,951 | $ 22,831 | 45,622 | 33,255 | $ 17,783 | ||||
Calculated under Revenue Guidance in Effect before Topic 606 [Member] | |||||||||||||||
CURRENT ASSETS | |||||||||||||||
Contract costs and recognized income not yet billed, net of progress payments | 119,348 | 121,803 | 119,348 | 121,803 | |||||||||||
Inventories | 424,309 | 398,359 | 424,309 | 398,359 | |||||||||||
Total Current Assets | 921,604 | 912,874 | 921,604 | 912,874 | |||||||||||
Assets | 2,071,364 | 2,084,890 | 2,071,364 | 2,084,890 | |||||||||||
CURRENT LIABILITIES | |||||||||||||||
Accounts payable | 242,294 | 233,658 | 242,294 | 233,658 | |||||||||||
Billings in excess of costs | 17,977 | 17,559 | 17,977 | 17,559 | |||||||||||
Total Current Liabilities | 381,817 | 393,071 | 381,817 | 393,071 | |||||||||||
OTHER LIABILITIES | 111,066 | 106,710 | 111,066 | 106,710 | |||||||||||
Liabilities | 1,589,963 | 1,610,499 | 1,589,963 | 1,610,499 | |||||||||||
SHAREHOLDERS’ EQUITY | |||||||||||||||
Retained earnings | 572,154 | 550,523 | 572,154 | 550,523 | |||||||||||
Total Shareholders' Equity | 481,401 | 474,391 | 481,401 | 474,391 | |||||||||||
Total Liabilities and Shareholders’ Equity | 2,071,364 | $ 2,084,890 | 2,071,364 | $ 2,084,890 | |||||||||||
Income Statement | |||||||||||||||
Net sales | 2,202,544 | ||||||||||||||
Cost of goods and services | 1,609,807 | ||||||||||||||
Income (loss) before taxes from continuing operations | 69,646 | ||||||||||||||
Provision (benefit) from income taxes | 26,004 | ||||||||||||||
Income (loss) from continuing operations | 43,642 | ||||||||||||||
Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | Accounting Standards Update 2014-09 [Member] | |||||||||||||||
CURRENT ASSETS | |||||||||||||||
Contract costs and recognized income not yet billed, net of progress payments | (14,237) | (14,237) | (20,982) | ||||||||||||
Inventories | 17,812 | 17,812 | 22,025 | ||||||||||||
Total Current Assets | 3,575 | 3,575 | 1,043 | ||||||||||||
Assets | 3,575 | 3,575 | 1,043 | ||||||||||||
CURRENT LIABILITIES | |||||||||||||||
Accounts payable | 8,282 | 8,282 | 8,282 | ||||||||||||
Billings in excess of costs | 8,282 | 8,282 | 8,282 | ||||||||||||
Total Current Liabilities | 8,282 | 8,282 | 8,282 | ||||||||||||
OTHER LIABILITIES | (1,069) | (1,069) | (1,621) | ||||||||||||
Liabilities | 7,213 | 7,213 | 6,661 | ||||||||||||
SHAREHOLDERS’ EQUITY | |||||||||||||||
Retained earnings | (3,638) | (3,638) | (5,618) | ||||||||||||
Total Shareholders' Equity | (3,638) | (3,638) | (5,618) | ||||||||||||
Total Liabilities and Shareholders’ Equity | $ 3,575 | 3,575 | $ 1,043 | ||||||||||||
Income Statement | |||||||||||||||
Net sales | 6,745 | ||||||||||||||
Cost of goods and services | 4,213 | ||||||||||||||
Income (loss) before taxes from continuing operations | 2,532 | ||||||||||||||
Provision (benefit) from income taxes | 552 | ||||||||||||||
Income (loss) from continuing operations | $ 1,980 |
SUBSEQUENT EVENTS |
12 Months Ended |
---|---|
Sep. 30, 2019 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS On November 13, 2019, the Board of Directors declared a cash dividend of $0.0750 per share, payable on December 19, 2019 to shareholders of record as of the close of business on November 27, 2019. Griffon currently intends to pay dividends each quarter; however, payment of dividends is determined by the Board of Directors, at its discretion, based on various factors, and no assurance can be provided as to the payment of future dividends. *****
|
COMMITMENTS AND CONTINGENT LIABILITIES |
12 Months Ended |
---|---|
Sep. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENT LIABILITIES | COMMITMENTS AND CONTINGENT LIABILITIES Operating leases Griffon rents real property and equipment under operating leases expiring at various dates. Most of the real property leases have escalation clauses related to increases in real property taxes. Rent expense for all operating leases totaled approximately $37,068, $35,726 and $26,297 in 2019, 2018 and 2017, respectively. Aggregate future minimum lease payments for operating leases at September 30, 2019 are $35,176 in 2020, $30,730 in 2021, $26,119 in 2022, $20,008 in 2023, $14,198 in 2024 and $78,105 thereafter. Purchase Commitments Purchase obligations are generally for the purchase of goods and services in the ordinary course of business. Griffon uses blanket purchase orders to communicate expected requirements to certain vendors. Purchase obligations reflect those purchase orders where the commitment is considered to be firm. Amounts purchased under such commitments were $226,026, $209,924 and $213,674 for the years ended September 30, 2019, 2018 and 2017, respectively. Purchase obligations that extend beyond 2019 are principally related to long-term contracts received from customers of Telephonics. Aggregate future minimum purchase obligations at September 30, 2019 are $239,365 in 2020, $2,045 in 2021, $42 in 2022, $15 in 2023 and $0 in 2024. Legal and environmental Department of Environmental Conservation of New York State (“DEC”), with ISC Properties, Inc. Lightron Corporation (“Lightron”), a wholly-owned subsidiary of Griffon, once conducted operations at a location in Peekskill in the Town of Cortlandt, New York (the “Peekskill Site”) owned by ISC Properties, Inc. (“ISCP”), a wholly-owned subsidiary of Griffon. ISCP sold the Peekskill Site in November 1982. Subsequently, ISCP was advised by the DEC that random sampling at the Peekskill Site and in a creek near the Peekskill Site indicated concentrations of solvents and other chemicals common to Lightron’s prior plating operations. In 1996, ISCP entered into a consent order with the DEC (the “Consent Order”), pursuant to which ISCP was required to perform a remedial investigation and prepare a feasibility study (the “Feasibility Study”). After completing the initial remedial investigation, ISCP conducted, over the next several years, supplemental remedial investigations, including soil vapor investigations, as required by the Consent Order. In April 2009, the DEC advised ISCP that both the DEC and the New York State Department of Health had reviewed and accepted an August 2007 Remedial Investigation Report and an Additional Data Collection Summary Report dated January 30, 2009. ISCP submitted to the DEC a draft Feasibility Study which was accepted and approved by the DEC in February 2011. ISCP satisfied its obligations under the Consent Order when DEC approved the Remedial Investigation and Feasibility Study for the Peekskill Site. In June, 2011 the DEC issued a Remedial Action Plan for the Peekskill Site that set forth the specific remedies selected and responded to public comments. The approximate cost of the remedy proposed by DEC in its Remedial Action Plan was approximately $10,000. Following issuance of the Remedial Action Plan, the DEC implemented a portion of its plan, and also performed additional investigation for the presence of metals in soils and sediments downstream from the Peekskill Site. During this investigation chromium was found to be present in sediments further downstream of the Peekskill site than previously detected. In August 2018, the DEC sent a letter to the United States Environmental Protection Agency (the “EPA”), in which the DEC requested that the Peekskill Site be nominated by the EPA for inclusion on the National Priorities List (the “NPL”). Based on DEC’s request and on an analysis by a consultant retained by the EPA, on May 15, 2019 the EPA added the Peekskill Site to the NPL under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended ("CERCLA"). It is uncertain what subsequent action the EPA will take. The EPA may, on its own or through the use of consultants, perform further studies of the site and/or subsequently remediate the site, and in such event, would likely seek reimbursement for the costs incurred from potentially responsible parties (“PRPs”). Alternatively, the EPA could enter into negotiations with the PRPs to request that the PRPs perform further studies and/or remediate the site. Griffon does not acknowledge any responsibility to perform any remediation at the Peekskill Site. Improper Advertisement Claim involving Union Tools® Products. Beginning in December 2004, a customer of AMES had been named in various litigation matters relating to certain Union Tools products. The plaintiffs in those litigation matters asserted causes of action against the customer of AMES for improper advertisement to end consumers. The allegations suggested that advertisements led the consumers to believe that Union Tools’ hand tools were wholly manufactured within boundaries of the United States. The complaints asserted various causes of action against the customer of AMES under federal and state law, including common law fraud. At some point, the customer may seek indemnity (including recovery of its legal fees and costs) against AMES for an unspecified amount. Presently, AMES cannot estimate the amount of loss, if any, if the customer were to seek legal recourse against AMES. Union Fork and Hoe, Frankfort, NY site. The former Union Fork and Hoe property in Frankfort, NY was acquired by AMES in 2006 as part of a larger acquisition, and has historic site contamination involving chlorinated solvents, petroleum hydrocarbons and metals. AMES has entered into an Order on Consent with the New York State Department of Environmental Conservation. While the Order is without admission or finding of liability or acknowledgment that there has been a release of hazardous substances at the site, AMES is required to perform a remedial investigation of certain portions of the property and to recommend a remediation option. At the conclusion of the remediation phase to the satisfaction of the DEC, the DEC will issue a Certificate of Completion. AMES has performed significant investigative and remedial activities over the last few years under work plans approved by the DEC, and is currently implementing a Remedial Action Work Plan that was approved by the DEC; such activity is expected to be completed by early 2020. AMES has a number of defenses to liability in this matter, including its rights under a previous Consent Judgment entered into between the DEC and a predecessor of AMES relating to the site. U.S. Government investigations and claims Defense contracts and subcontracts, including Griffon’s contracts and subcontracts, are subject to audit and review by various agencies and instrumentalities of the United States government, including among others, the Defense Contract Audit Agency, the Defense Criminal Investigative Service, and the Department of Justice which has responsibility for asserting claims on behalf of the U.S. Government. In general, departments and agencies of the U.S. Government have the authority to investigate various transactions and operations of Griffon, and the results of such investigations may lead to administrative, civil or criminal proceedings, the ultimate outcome of which could be fines, penalties, repayments or compensatory or treble damages. U.S. Government regulations provide that certain findings against a contractor may lead to suspension or debarment from future U.S. Government contracts or the loss of export privileges for a company or an operating division or subdivision. Suspension or debarment could have a material adverse effect on Telephonics because of its reliance on government contracts. General legal Griffon is subject to various laws and regulations relating to the protection of the environment and is a party to legal proceedings arising in the ordinary course of business. Management believes, based on facts presently known to it, that the resolution of the matters above and such other matters will not have a material adverse effect on Griffon’s consolidated financial position, results of operations or cash flows.
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REPORTABLE SEGMENTS |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
REPORTABLE SEGMENTS | REPORTABLE SEGMENTS In the fourth quarter of fiscal 2019, Griffon modified its reportable segment structure to provide investors with improved visibility after a series of portfolio repositioning actions which included the divestiture of the Plastics business, the acquisition of ClosetMaid and its subsequent integration into AMES, and the acquisition of CornellCookson by Clopay. The prior year amounts have been recast to reflect the change in the reporting segments in the current year. Griffon now reports it operations through three reportable segments from continuing operations, as follows:
On November 16, 2017, Griffon announced it entered into a definitive agreement to sell Plastics and on February 6, 2018, completed the sale to Berry for $465,000, net of certain post-closing adjustments. As a result, Griffon classified the results of operations of the Plastics business as discontinued operations in the Consolidated Statements of Operations for all periods presented and classified the related assets and liabilities associated with the discontinued operations in the consolidated balance sheets. All results and information presented exclude Plastics unless otherwise noted. See Note 7, Discontinued Operations to the Notes of the Financial Statements. On October 2, 2017, Griffon acquired ClosetMaid. ClosetMaid, founded in 1965, is a leading North American manufacturer and marketer of wood and wire closet organization, general living storage and wire garage storage products and sells to some of the largest home center retail chains, mass merchandisers, and direct-to-builder professional installers in North America. The accounts of ClosetMaid, affected for preliminary adjustments to reflect fair market values assigned to assets purchased and liabilities assumed, are included in the Company’s consolidated financial statements from the date of acquisition. On June 4, 2018, Clopay acquired CornellCookson, a leading US manufacturer and marketer of rolling steel door and grille products designed for commercial, industrial, institutional and retail use. The accounts, affected for preliminary adjustments to reflect fair market values assigned to assets purchased and liabilities assumed, and results of operations of CornellCookson, are included in the Company’s consolidated financial statements from the date of acquisition. Information on Griffon’s reportable segments from continuing operations is as follows:
Griffon evaluates performance and allocates resources based on each segment's operating results from continuing operations before interest income and expense, income taxes, depreciation and amortization, unallocated amounts (primarily corporate overhead), restructuring charges, loss on debt extinguishment and acquisition related expenses, as well as other items that may affect comparability, as applicable (“Segment Adjusted EBITDA”). The following table provides a reconciliation of Segment Adjusted EBITDA to Income before taxes and discontinued operations:
Disaggregation of Revenue Revenue from contracts with customers is disaggregated by end markets, segments and geographic location, as it more accurately depicts the nature and amount of the Company’s revenue.
The following table presents revenue disaggregated by geography based on the location of the Company's customer:
Segment information by geographic region for 2018 and 2017 was as follows:
As a percentage of consolidated revenue from continuing operations, CPP sales to The Home Depot approximated 28% in 2019, 29% in 2018 and 28% in 2017; HBP sales to The Home Depot approximated 13% in 2019, 16% in 2018, and 18% in 2017; and Defense Electronics aggregate sales to the United States Government and its agencies approximated 10% in both 2019 and 2018, and 18% in 2017.
|
REPORTABLE SEGMENTS (Details) $ in Thousands |
12 Months Ended | ||||
---|---|---|---|---|---|
Sep. 30, 2019
segment
|
Sep. 30, 2018 |
Sep. 30, 2017 |
Nov. 16, 2017
USD ($)
|
Nov. 15, 2017
USD ($)
|
|
REPORTABLE SEGMENTS (Details) [Line Items] | |||||
Number of Reportable Segments | segment | 3 | ||||
Discontinued Operations, Held-for-sale [Member] | Plastics [Member] | |||||
REPORTABLE SEGMENTS (Details) [Line Items] | |||||
Disposal group, including discontinued operation, consideration | $ | $ 465,000 | $ 465,000 | |||
Home Depot [Member] | Consumer And Professional Products Segment [Member] | |||||
REPORTABLE SEGMENTS (Details) [Line Items] | |||||
Concentration risk, percentage | 28.00% | 29.00% | 28.00% | ||
Home Depot [Member] | Home and Building Products (HBP) [Member] | |||||
REPORTABLE SEGMENTS (Details) [Line Items] | |||||
Concentration risk, percentage | 13.00% | 16.00% | 18.00% | ||
United States Government [Member] | Defense Electronics Segment [Member] | |||||
REPORTABLE SEGMENTS (Details) [Line Items] | |||||
Concentration risk, percentage | 10.00% | 10.00% | 18.00% |
REPORTABLE SEGMENTS REPORTABLE SEGMENTS (Details) - Schedule of Disaggregated Revenue by Segment $ in Thousands, $ in Thousands |
12 Months Ended | ||||
---|---|---|---|---|---|
Sep. 30, 2019
USD ($)
|
Sep. 30, 2019
CAD ($)
|
Sep. 30, 2018
USD ($)
|
Sep. 30, 2018
CAD ($)
|
Sep. 30, 2017
USD ($)
|
|
Segment Reporting Information [Line Items] | |||||
Revenue | $ 2,209,289 | $ 3,500 | $ 1,977,918 | $ 700 | $ 1,524,997 |
Consumer And Professional Products Segment [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 1,000,608 | ||||
Home and Building Products (HBP) [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 873,640 | ||||
Defense Electronics Segment [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 335,041 | ||||
Residential Repair and Remodel [Member] | Consumer And Professional Products Segment [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 140,369 | ||||
Residential Repair and Remodel [Member] | Home and Building Products (HBP) [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 439,287 | ||||
Retail [Member] | Consumer And Professional Products Segment [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 528,279 | ||||
Commercial Construction [Member] | Home and Building Products (HBP) [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 335,339 | ||||
Residential New Construction [Member] | Consumer And Professional Products Segment [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 58,709 | ||||
Residential New Construction [Member] | Home and Building Products (HBP) [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 99,014 | ||||
Industrial [Member] | Consumer And Professional Products Segment [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 45,129 | ||||
International Excluding North America [Member] | Consumer And Professional Products Segment [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 228,122 | ||||
United States Government [Member] | Defense Electronics Segment [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 211,405 | ||||
International [Member] | Defense Electronics Segment [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 105,705 | ||||
Commercial [Member] | Defense Electronics Segment [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | $ 17,931 |
INVENTORIES |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INVENTORIES | INVENTORIES The following table details the components of inventory:
|
OTHER COMPREHENSIVE INCOME (LOSS) (Details) - Summary of Amounts Reclassified from Accumulated Other Comprehensive Income - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Sep. 30, 2019 |
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Other Comprehensive Income (Loss), Net of Tax [Abstract] | |||
Pension amortization | $ (902) | $ (1,397) | $ (3,343) |
Cash flow hedges | 1,932 | 657 | (1,458) |
Total before tax | 1,030 | (740) | (4,801) |
Tax | (216) | 155 | 1,680 |
Net of tax | $ 814 | $ (585) | $ (3,121) |
CONSOLIDATING GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION (Details) - Summary of consolidated cash flows - USD ($) |
12 Months Ended | ||
---|---|---|---|
Sep. 30, 2019 |
Sep. 30, 2018 |
Sep. 30, 2017 |
|
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net income | $ 37,287,000 | $ 125,678,000 | $ 14,912,000 |
Net (income) loss from discontinued operations | 8,335,000 | (92,423,000) | 2,871,000 |
Net cash provided by (used in) operating activities | 113,958,000 | 58,192,000 | 49,151,000 |
CASH FLOWS FROM INVESTING ACTIVITIES - CONTINUING OPERATIONS: | |||
Acquisition of property, plant and equipment | (45,361,000) | (50,138,000) | (34,937,000) |
Acquired business, net of cash acquired | (9,219,000) | (430,932,000) | (34,719,000) |
Proceeds (payments) from sale of business | (9,500,000) | 474,727,000 | 0 |
Insurance proceeds | (10,604,000) | 8,254,000 | 0 |
Proceeds from sale of property, plant and equipment | 280,000 | 663,000 | 143,000 |
Proceeds from sale of property, plant and equipment | (149,000) | 0 | (1,824,000) |
Net cash provided by (used in) investing activities - continuing operations | (74,553,000) | 2,574,000 | (71,337,000) |
CASH FLOWS FROM FINANCING ACTIVITIES - CONTINUING OPERATIONS: | |||
Purchase of shares for treasury | (1,478,000) | (45,605,000) | (15,841,000) |
Proceeds from long-term debt | 201,748,000 | 443,058,000 | 233,443,000 |
Payments of long-term debt | (218,248,000) | (300,993,000) | (170,454,000) |
Share premium payment on settled debt | 0 | 0 | (24,997,000) |
Change in short-term borrowings | (366,000) | 144,000 | 0 |
Financing costs | (1,090,000) | (7,793,000) | (1,548,000) |
Purchase of ESOP shares | 0 | 0 | (10,908,000) |
Tax effect from exercise/vesting of equity awards, net | (1,686,000) | 10,908,000 | |
Dividends | (13,676,000) | (49,797,000) | (10,325,000) |
Other, net | (180,000) | 51,000 | (70,000) |
Net cash provided by (used) in financing activities - continuing operations | (34,976,000) | 39,065,000 | (700,000) |
CASH FLOWS FROM DISCONTINUED OPERATIONS: | |||
Net cash used in discontinued operations | (2,123,000) | (78,927,000) | (2,150,000) |
Effect of exchange rate changes on cash and equivalents | 313,000 | 1,173,000 | 164,000 |
NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS | 2,619,000 | 22,077,000 | (24,872,000) |
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD | 69,758,000 | 47,681,000 | 72,553,000 |
CASH AND EQUIVALENTS AT END OF PERIOD | 72,377,000 | 69,758,000 | 47,681,000 |
Parent Company [Member] | |||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net income | 37,287,000 | 125,678,000 | 14,912,000 |
Net (income) loss from discontinued operations | 0 | 0 | 0 |
Net cash provided by (used in) operating activities | 42,159,000 | 381,417,000 | (10,771,000) |
CASH FLOWS FROM INVESTING ACTIVITIES - CONTINUING OPERATIONS: | |||
Acquisition of property, plant and equipment | (542,000) | (544,000) | (15,000) |
Acquired business, net of cash acquired | (9,219,000) | (368,936,000) | 0 |
Proceeds (payments) from sale of business | (9,500,000) | 0 | |
Insurance proceeds | (10,604,000) | 8,254,000 | |
Proceeds from sale of property, plant and equipment | 0 | 0 | 0 |
Proceeds from sale of property, plant and equipment | (149,000) | (1,824,000) | |
Net cash provided by (used in) investing activities - continuing operations | (30,014,000) | (361,226,000) | (1,839,000) |
CASH FLOWS FROM FINANCING ACTIVITIES - CONTINUING OPERATIONS: | |||
Purchase of shares for treasury | (1,478,000) | (45,605,000) | (15,841,000) |
Proceeds from long-term debt | 163,297,000 | 411,623,000 | 201,124,000 |
Payments of long-term debt | (173,345,000) | (269,478,000) | (149,109,000) |
Share premium payment on settled debt | (24,997,000) | ||
Change in short-term borrowings | 0 | 0 | |
Financing costs | (1,090,000) | (7,793,000) | (1,548,000) |
Tax effect from exercise/vesting of equity awards, net | 0 | 10,908,000 | |
Dividends | (13,676,000) | (49,797,000) | (10,325,000) |
Other, net | (180,000) | (46,405,000) | 20,937,000 |
Net cash provided by (used) in financing activities - continuing operations | (26,472,000) | (7,455,000) | 9,333,000 |
CASH FLOWS FROM DISCONTINUED OPERATIONS: | |||
Net cash used in discontinued operations | 0 | 0 | 0 |
Effect of exchange rate changes on cash and equivalents | 0 | 0 | 0 |
NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS | (14,327,000) | 12,736,000 | (3,277,000) |
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD | 15,976,000 | 3,240,000 | 6,517,000 |
CASH AND EQUIVALENTS AT END OF PERIOD | 1,649,000 | 15,976,000 | 3,240,000 |
Guarantor Subsidiaries [Member] | |||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net income | 94,637,000 | 122,687,000 | 24,889,000 |
Net (income) loss from discontinued operations | 0 | (92,423,000) | (12,351,000) |
Net cash provided by (used in) operating activities | 41,992,000 | (405,174,000) | 56,320,000 |
CASH FLOWS FROM INVESTING ACTIVITIES - CONTINUING OPERATIONS: | |||
Acquisition of property, plant and equipment | (38,872,000) | (41,531,000) | (27,902,000) |
Acquired business, net of cash acquired | 0 | (4,843,000) | 0 |
Proceeds (payments) from sale of business | 0 | 474,727,000 | |
Insurance proceeds | 0 | 0 | |
Proceeds from sale of property, plant and equipment | 254,000 | 62,000 | 144,000 |
Proceeds from sale of property, plant and equipment | 0 | 0 | |
Net cash provided by (used in) investing activities - continuing operations | (38,618,000) | 428,415,000 | (27,758,000) |
CASH FLOWS FROM FINANCING ACTIVITIES - CONTINUING OPERATIONS: | |||
Purchase of shares for treasury | 0 | 0 | 0 |
Proceeds from long-term debt | 0 | 2,125,000 | 0 |
Payments of long-term debt | (2,973,000) | (5,403,000) | (1,282,000) |
Share premium payment on settled debt | 0 | ||
Change in short-term borrowings | (366,000) | 144,000 | |
Financing costs | 0 | 0 | 0 |
Tax effect from exercise/vesting of equity awards, net | 0 | 0 | |
Dividends | 0 | 0 | 0 |
Other, net | 8,830,000 | 4,733,000 | (34,806,000) |
Net cash provided by (used) in financing activities - continuing operations | 5,491,000 | 1,599,000 | (36,088,000) |
CASH FLOWS FROM DISCONTINUED OPERATIONS: | |||
Net cash used in discontinued operations | 0 | (16,394,000) | (12,100,000) |
Effect of exchange rate changes on cash and equivalents | (1,000) | (159,000) | 0 |
NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS | 8,864,000 | 8,287,000 | (19,626,000) |
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD | 16,353,000 | 8,066,000 | 27,692,000 |
CASH AND EQUIVALENTS AT END OF PERIOD | 25,217,000 | 16,353,000 | 8,066,000 |
Non-Guarantor Subsidiaries [Member] | |||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net income | 81,089,000 | 84,680,000 | 47,242,000 |
Net (income) loss from discontinued operations | 8,335,000 | 0 | 15,222,000 |
Net cash provided by (used in) operating activities | 29,807,000 | 108,981,000 | 3,602,000 |
CASH FLOWS FROM INVESTING ACTIVITIES - CONTINUING OPERATIONS: | |||
Acquisition of property, plant and equipment | (5,947,000) | (8,063,000) | (7,020,000) |
Acquired business, net of cash acquired | 0 | (57,153,000) | (34,719,000) |
Proceeds (payments) from sale of business | 0 | 0 | |
Insurance proceeds | 0 | 0 | |
Proceeds from sale of property, plant and equipment | 26,000 | 601,000 | (1,000) |
Proceeds from sale of property, plant and equipment | 0 | 0 | |
Net cash provided by (used in) investing activities - continuing operations | (5,921,000) | (64,615,000) | (41,740,000) |
CASH FLOWS FROM FINANCING ACTIVITIES - CONTINUING OPERATIONS: | |||
Purchase of shares for treasury | 0 | 0 | 0 |
Proceeds from long-term debt | 38,451,000 | 29,310,000 | 32,319,000 |
Payments of long-term debt | (41,930,000) | (26,112,000) | (20,063,000) |
Share premium payment on settled debt | 0 | ||
Change in short-term borrowings | 0 | 0 | |
Financing costs | 0 | 0 | 0 |
Tax effect from exercise/vesting of equity awards, net | (1,686,000) | 0 | |
Dividends | 0 | 0 | 0 |
Other, net | (8,830,000) | 14,691,000 | 13,799,000 |
Net cash provided by (used) in financing activities - continuing operations | (13,995,000) | 17,889,000 | 26,055,000 |
CASH FLOWS FROM DISCONTINUED OPERATIONS: | |||
Net cash used in discontinued operations | (2,123,000) | (62,533,000) | 9,950,000 |
Effect of exchange rate changes on cash and equivalents | 314,000 | 1,332,000 | 164,000 |
NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS | 8,082,000 | 1,054,000 | (1,969,000) |
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD | 37,429,000 | 36,375,000 | 38,344,000 |
CASH AND EQUIVALENTS AT END OF PERIOD | 45,511,000 | 37,429,000 | 36,375,000 |
Consolidation, Eliminations [Member] | |||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net income | (175,726,000) | (207,367,000) | (72,131,000) |
Net (income) loss from discontinued operations | 0 | 0 | 0 |
Net cash provided by (used in) operating activities | 0 | (27,032,000) | 0 |
CASH FLOWS FROM INVESTING ACTIVITIES - CONTINUING OPERATIONS: | |||
Acquisition of property, plant and equipment | 0 | 0 | 0 |
Acquired business, net of cash acquired | 0 | 0 | 0 |
Proceeds (payments) from sale of business | 0 | 0 | |
Insurance proceeds | 0 | 0 | |
Proceeds from sale of property, plant and equipment | 0 | 0 | 0 |
Proceeds from sale of property, plant and equipment | 0 | 0 | |
Net cash provided by (used in) investing activities - continuing operations | 0 | 0 | 0 |
CASH FLOWS FROM FINANCING ACTIVITIES - CONTINUING OPERATIONS: | |||
Purchase of shares for treasury | 0 | 0 | 0 |
Proceeds from long-term debt | 0 | 0 | 0 |
Payments of long-term debt | 0 | 0 | 0 |
Share premium payment on settled debt | 0 | ||
Change in short-term borrowings | 0 | 0 | |
Financing costs | 0 | 0 | 0 |
Tax effect from exercise/vesting of equity awards, net | 0 | 0 | |
Dividends | 0 | 0 | 0 |
Other, net | 0 | 27,032,000 | 0 |
Net cash provided by (used) in financing activities - continuing operations | 0 | 27,032,000 | 0 |
CASH FLOWS FROM DISCONTINUED OPERATIONS: | |||
Net cash used in discontinued operations | 0 | 0 | 0 |
Effect of exchange rate changes on cash and equivalents | 0 | 0 | 0 |
NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS | 0 | 0 | 0 |
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD | 0 | 0 | 0 |
CASH AND EQUIVALENTS AT END OF PERIOD | $ 0 | $ 0 | $ 0 |
ACCRUED LIABILITIES |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ACCRUED LIABILITIES | ACCRUED LIABILITIES The following table details the components of accrued liabilities:
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INCOME TAXES |
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Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INCOME TAXES | INCOME TAXES On December 22, 2017, the "Tax Cuts and Jobs Act" ("TCJA") was signed into law, significantly impacting several sections of the Internal Revenue Code. ASC 740, Accounting for Income Taxes, requires companies to recognize the effect of tax law changes in the period of enactment even though the effective date for most provisions is for tax years beginning after December 31, 2017, or in the case of certain other provisions, January 1, 2018. Though certain key aspects of the TCJA were effective January 1, 2018 and had an immediate accounting effect, other significant provisions were not effective or did not result in accounting effects for September 30 fiscal year companies until October 1, 2018. Among the significant changes to the U.S. Internal Revenue Code, the TCJA reduced the U.S. federal corporate income tax rate (“Federal Tax Rate”) from 35% to 21% effective January 1, 2018. The Company computed its income tax expense for the September 30, 2018 fiscal year using a blended Federal Tax Rate of 24.5%. The 21% Federal Tax Rate applies to the fiscal year ended September 30, 2019 and each year thereafter. In accordance with U.S. GAAP for income taxes, as well as SAB 118, the Company made a reasonable estimate of the impacts of the TCJA for the year ended September 30, 2018 and recorded a $20,587 benefit on the revaluation of deferred tax liabilities as a provisional amount for the re-measurement of deferred tax assets and liabilities, as well as an amount for deductible executive compensation expense, both of which have been reflected in the tax provision for 2018. SAB 118 allows for a measurement period of up to one year from the date of enactment to complete the Company’s accounting for the impacts of the TCJA. Our analysis under SAB 118 was completed in December 2018 and resulted in no material adjustments to the provision amounts recorded as of September 30, 2018. The TCJA requires companies to pay a one-time transition tax on mandatory deemed repatriation of post-1986 undistributed foreign earnings and profits (“E&P”). The Company has recorded a provisional transition tax charge of $13,100 net of foreign tax credits for fiscal year 2018. The Company ultimately incurred a transition tax charge of $12,699. Under the TCJA, the Company elected to pay the transition tax interest-free over eight years. The TCJA makes broad and complex changes to the U.S. tax code that affect our fiscal year ended September 30, 2019, including but not limited to: (1) creating the base erosion anti-abuse tax measure that taxes certain payments between a U.S. corporation and its foreign subsidiaries; (2) creating a new provision designed to tax global intangible low-tax income (“GILTI”) of foreign subsidiaries; and (3) a foreign derived intangible income. We have estimated the impact of these changes in our income tax provision for 2019. The GILTI provision of the TCJA requires the Company to include in its U.S. Income tax return foreign subsidiary earnings in excess of an allowable return on the foreign subsidiary's tangible assets. An accounting policy election is available to account for the tax effects of GILTI either as a current period expense when incurred, or to recognize deferred taxes for book and tax basis differences expected to reverse as GILTI in future years. We have elected to account for the tax effects of GILTI as a current period expense when incurred. Income taxes have been based on the following components of Income before taxes from continuing operations:
Provision (benefit) for income taxes on income was comprised of the following from continuing operations:
Griffon's income tax provision from the excess tax benefits from vesting of equity awards to be recognized within income tax expense in 2019 totaled $304, compared to income tax benefits in 2018 and 2017 of $1,299 and $4,440, respectively. Griffon’s income tax provision included benefits of $576, $421 and $122 in 2019, 2018 and 2017, respectively, reflecting the reversal of previously recorded tax liabilities including the resolution of various tax audits and the closing of certain statutes for prior years’ tax returns. Differences between the effective income tax rate applied to Income and the U.S. Federal income statutory rate from continuing operations were as follows:
The tax effect of temporary differences that give rise to future deferred tax assets and liabilities are as follows:
In 2019, the increase in the valuation allowance of $2,302 is primarily the result of the generation and usage or non-usage of Foreign Tax Credit generated during the year. The components of the net deferred tax liability, by balance sheet account, were as follows:
At both September 30, 2019 and 2018, Griffon has a policy election to indefinitely reinvest the undistributed earnings of foreign subsidiaries with operations outside the U.S. As of September 30, 2019, we have approximately $83,002 of unremitted earnings of non-U.S. subsidiaries. The Company generates substantial cash flow in the U.S. and does not have a current need for the cash to be returned to the U.S. from the foreign entities. In the event these earnings are later remitted to the U.S., any estimated withholding tax on remittance of those earnings is expected to be immaterial to the income tax provision. At September 30, 2019 and 2018, Griffon had loss carryforwards for U.S. tax purposes of $5,419 and $6,089, respectively, and non-U.S. tax purposes of $7,413 and $7,319, respectively. The U.S. losses expire beginning in 2033. The non-U.S. loss carryforwards are available for carryforward indefinitely. At September 30, 2019, Griffon had interest expense carryforwards for U.S. tax purposes of $25,000. This carryforward is available for carryforward indefinitely. At September 30, 2019 and 2018, Griffon had state and local loss carryforwards of $127,354 and $124,442, respectively, which expire in varying amounts through 2039. At September 30, 2019 and 2018, Griffon had federal tax credit carryforwards of $8,948 and $5,740, respectively, which expire in varying amounts through 2035. At September 30, 2019, Griffon had capital loss carryover for U.S. tax purposes of $9,524. The carryover is available for three-year carryback or five-year carryforward. We believe it is more likely than not that the benefit from certain federal tax credits, state net operating losses and credits, and foreign net operating losses will not be realized. In recognition of this risk, we have provided a valuation allowance as of September 30, 2019 and 2018 of $10,823 and $8,520, respectively, on the deferred tax assets relating to these federal credits, state net operating loss carryforwards and credits, and foreign net operating losses. If our assumptions change and we determine we will be able to realize these federal credits, state net operating loss carryforwards or credits, or foreign net operating losses, the benefits relating to the reversal of the valuation allowance will be recognized as a reduction of income tax expense. If certain substantial changes in Griffon's ownership occur, there would be an annual limitation on the amount of carryforward(s) that can be utilized. Griffon files U.S. Federal, state and local tax returns, as well as applicable returns in Canada, Australia, U.K. and other non-U.S. jurisdictions. Griffon’s U.S. Federal income tax returns are no longer subject to income tax examination for years before 2014. Griffon's major U.S. state and other non-U.S. jurisdictions are no longer subject to income tax examinations for years before 2012. Various U.S. state and non-U.S. statutory tax audits are currently underway. The following is a roll forward of unrecognized tax benefits:
If recognized, the amount of potential tax benefits that would impact Griffon’s effective tax rate is $790. Griffon recognizes potential accrued interest and penalties related to unrecognized tax benefits in income tax expense. At September 30, 2019 and 2018, the combined amount of accrued interest and penalties related to tax positions taken or to be taken on Griffon’s tax returns and recorded as part of the reserves for uncertain tax positions was $66 and $122, respectively. Griffon cannot reasonably estimate the extent to which existing liabilities for uncertain tax positions may increase or decrease within the next twelve months as a result of the progression of ongoing tax audits or other events. Griffon believes that it has adequately provided for all open tax years by tax jurisdiction.
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ACCRUED LIABILITIES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accrued Liabilities | The following table details the components of accrued liabilities:
|
INVENTORIES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Inventory, Current | The following table details the components of inventory:
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