CONSOLIDATING GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION

12 Months Ended

Sep. 30, 2019

Consolidating Guarantor And Non Guarantor Financial Information [Abstract]

CONSOLIDATING GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION

CONSOLIDATING GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION

Griffon’s Senior Notes are fully and unconditionally guaranteed, jointly and severally, on a senior secured basis by the domestic assets of Clopay Corporation, Telephonics Corporation, The AMES Companies, Inc., ATT Southern LLC, Clopay Ames Holding Corp., ClosetMaid, LLC, CornellCookson, LLC and Cornell Real Estate Holdings, LLC. all of which are indirectly 100% owned by Griffon. In accordance with Rule 3-10 of Regulation S-X promulgated under the Securities Act of 1933, presented below are condensed consolidating financial information as of September 30, 2019 and 2018, and for the years ended September 30, 2019, 2018 and 2017. The financial information may not necessarily be indicative of results of operations or financial position had the guarantor companies or non-guarantor companies operated as independent entities. The guarantor companies and the non-guarantor companies include the consolidated financial results of their wholly owned subsidiaries accounted for under the equity method.

The indenture relating to the Senior Notes (the “Indenture”) contains terms providing that, under certain limited circumstances, a guarantor will be released from its obligations to guarantee the Senior Notes.  These circumstances include (i) a sale of at least a majority of the stock, or all or substantially all the assets, of the subsidiary guarantor as permitted by the Indenture; (ii) a public equity offering of a subsidiary guarantor that qualifies as a “Minority Business” as defined in the Indenture (generally, a business the EBITDA of which constitutes less than 50% of the segment adjusted EBITDA of the Company for the most recently ended four fiscal quarters), and that meets certain other specified conditions as set forth in the Indenture; (iii) the designation of a guarantor as an “unrestricted subsidiary” as defined in the Indenture, in compliance with the terms of the Indenture; (iv) Griffon exercising its right to defease the Senior Notes, or to otherwise discharge its obligations under the Indenture, in each case in accordance with the terms of the Indenture; and (v) upon obtaining the requisite consent of the holders of the Senior Notes.

CONDENSED CONSOLIDATING BALANCE SHEETS

At September 30, 2019

	Parent Company		Guarantor Companies		Non-Guarantor Companies			Elimination			Consolidation
CURRENT ASSETS
Cash and equivalents	$	1,649	$	25,217	$	45,511		$	—		$	72,377
Accounts receivable, net of allowances	—		227,069		38,580			(1,199		)	264,450
Contract costs and recognized income not yet billed, net of progress payments	—		104,109		1,002			—			105,111
Inventories	—		372,839		69,540			(258		)	442,121
Prepaid and other current assets	8,238		25,754		6,951			(144		)	40,799
Assets of discontinued operations	—		—		321			—			321
Total Current Assets	9,887		754,988		161,905			(1,601		)	925,179
PROPERTY, PLANT AND EQUIPMENT, net	1,184		289,282		46,860			—			337,326
GOODWILL	—		375,734		61,333			—			437,067
INTANGIBLE ASSETS, net	93		224,275		132,271			—			356,639
INTERCOMPANY RECEIVABLE	5,834		864,884		75,684			(946,402		)	—
EQUITY INVESTMENTS IN SUBSIDIARIES	1,628,031		581,438		3,233,038			(5,442,507		)	—
OTHER ASSETS	8,182		24,635		(2,352		)	(14,625		)	15,840
ASSETS OF DISCONTINUED OPERATIONS	—		—		2,888			—			2,888
Total Assets	$	1,653,211	$	3,115,236	$	3,711,627		$	(6,405,135	)	$	2,074,939
CURRENT LIABILITIES
Notes payable and current portion of long-term debt	$	—	$	3,075	$	7,450		$	—		$	10,525
Accounts payable and accrued liabilities	41,796		266,411		68,390			(1,356		)	375,241
Liabilities of discontinued operations	—		—		4,333			—			4,333
Total Current Liabilities	41,796		269,486		80,173			(1,356		)	390,099
LONG-TERM DEBT, net	1,040,449		3,119		50,181			—			1,093,749
INTERCOMPANY PAYABLES	71,634		457,265		444,557			(973,456		)	—
OTHER LIABILITIES	21,569		81,582		15,017			(8,171		)	109,997
LIABILITIES OF DISCONTINUED OPERATIONS	—		—		3,331			—			3,331
Total Liabilities	1,175,448		811,452		593,259			(982,983		)	1,597,176
SHAREHOLDERS’ EQUITY	477,763		2,303,784		3,118,368			(5,422,152		)	477,763
Total Liabilities and Shareholders’ Equity	$	1,653,211	$	3,115,236	$	3,711,627		$	(6,405,135	)	$	2,074,939

CONDENSED CONSOLIDATING BALANCE SHEETS

At September 30, 2018

	Parent Company	Guarantor Companies		Non-Guarantor Companies		Elimination		Consolidation
CURRENT ASSETS
Cash and equivalents	15,976	16,353		37,429		—		69,758
Accounts receivable, net of allowances	—	234,885		69,729		(24,105	)	280,509
Contract costs and recognized income not yet billed, net of progress payments	—	121,393		410		—		121,803
Inventories, net	—	332,067		66,373		(81	)	398,359
Prepaid and other current assets	12,179	21,313		6,168		2,461		42,121
Assets of discontinued operations	—	—		324		—		324
Total Current Assets	28,155	726,011		180,433		(21,725	)	912,874
PROPERTY, PLANT AND EQUIPMENT, net	936	299,920		41,636		—		342,492
GOODWILL	6,646	361,507		71,242		—		439,395
INTANGIBLE ASSETS, net	93	293,093		77,672		—		370,858
INTERCOMPANY RECEIVABLE	56,396	314,394		(121,445	)	(249,345	)	—
EQUITY INVESTMENTS IN SUBSIDIARIES	1,528,932	968,330		3,347,894		(5,845,156	)	—
OTHER ASSETS	8,651	15,942		374		(8,612	)	16,355
ASSETS OF DISCONTINUED OPERATIONS	—	—		2,916		—		2,916
Total Assets	1,629,809	2,979,197		3,600,722		(6,124,838	)	2,084,890
CURRENT LIABILITIES
Notes payable and current portion of long-term debt	2,276	3,398		7,337		—		13,011
Accounts payable and accrued liabilities	26,639	303,154		59,531		(16,474	)	372,850
Liabilities of discontinued operations	—	(22,327	)	29,537		—		7,210
Total Current Liabilities	28,915	284,225		96,405		(16,474	)	393,071
LONG-TERM DEBT, net	1,044,071	6,110		57,890		—		1,108,071
INTERCOMPANY PAYABLES	66,058	(77,760	)	263,227		(251,525	)	—
OTHER LIABILITIES	16,374	73,391		20,592		(3,647	)	106,710
LIABILITIES OF DISCONTINUED OPERATIONS	—	—		2,647		—		2,647
Total Liabilities	1,155,418	285,966		440,761		(271,646	)	1,610,499
SHAREHOLDERS’ EQUITY	474,391	2,693,231		3,159,961		(5,853,192	)	474,391
Total Liabilities and Shareholders’ Equity	1,629,809	2,979,197		3,600,722		(6,124,838	)	2,084,890

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

For the Year Ended September 30, 2019

	Parent Company			Guarantor Companies			Non-Guarantor Companies			Elimination			Consolidation
Revenue	$	—		$	1,808,824		$	437,542		$	(37,077	)	$	2,209,289
Cost of goods and services	—			1,341,868			310,707			(38,555		)	1,614,020
Gross profit	—			466,956			126,835			1,478			595,269
Selling, general and administrative expenses	22,566			340,147			97,661			(370		)	460,004
Income (loss) from operations	(22,566		)	126,809			29,174			1,848			135,265
Other income (expense)
Interest income (expense), net	(27,883		)	(39,288		)	(89		)	—			(67,260		)
Other, net	(778		)	(16,653		)	23,452			(1,848		)	4,173
Total other income (expense)	(28,661		)	(55,941		)	23,363			(1,848		)	(63,087		)
Income (loss) before taxes	(51,227		)	70,868			52,537			—			72,178
Provision (benefit) for income taxes	(7,425		)	20,534			13,447			—			26,556
Income (loss) before equity in net income of subsidiaries	(43,802		)	50,334			39,090			—			45,622
Equity in net income (loss) of subsidiaries	81,089			44,303			50,334			(175,726		)	—
Income (loss) from continuing operations	$	37,287		$	94,637		$	89,424		$	(175,726	)	$	45,622
Income from operations of discontinued businesses	—			—			(11,050		)	—			(11,050		)
Provision (benefit) from income taxes	—			—			(2,715		)	—			(2,715		)
Income (loss) from discontinued operations	—			—			(8,335		)	—			(8,335		)
Net income (loss)	$	37,287		$	94,637		$	81,089		$	(175,726	)	$	37,287
Comprehensive income (loss)	$	5,483		$	87,851		$	87,875		$	(175,726	)	$	5,483

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

For the Year Ended September 30, 2018

	Parent Company			Guarantor Companies			Non-Guarantor Companies			Elimination			Consolidation
Revenue	$	—		$	1,638,792		$	367,149		$	(28,023	)	$	1,977,918
Cost of goods and services	—			1,232,398			245,687			(29,348		)	1,448,737
Gross profit	—			406,394			121,462			1,325			529,181
Selling, general and administrative expenses	37,540			308,338			90,872			(370		)	436,380
Income (loss) from operations	(37,540		)	98,056			30,590			1,695			92,801
Other income (expense)
Interest income (expense), net	(23,911		)	(31,913		)	(8,047		)	—			(63,871		)
Other, net	(7,666		)	125,531			(111,248		)	(1,737		)	4,880
Total other income (expense)	(31,577		)	93,618			(119,295		)	(1,737		)	(58,991		)
Income (loss) before taxes	(69,117		)	191,674			(88,705		)	(42		)	33,810
Provision (benefit) for income taxes	(17,692		)	9,546			8,743			(42		)	555
Income (loss) before equity in net income of subsidiaries	(51,425		)	182,128			(97,448		)	—			33,255
Equity in net income (loss) of subsidiaries	177,103			(151,864		)	182,128			(207,367		)	—
Income (loss) from continuing operations	125,678			30,264			84,680			(207,367		)	33,255
Income (loss) from operations of discontinued businesses	—			119,981			—			—			119,981
Provision (benefit) from income taxes	—			27,558			—			—			27,558
Income (loss) from discontinued operations	—			92,423			—			—			92,423
Net Income (loss)	$	125,678		$	122,687		$	84,680		$	(207,367	)	$	125,678
Comprehensive income (loss)	$	152,047		$	143,936		$	81,389		$	(225,325	)	$	152,047

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

For the Year Ended September 30, 2017

	Parent Company			Guarantor Companies			Non-Guarantor Companies			Elimination			Consolidation
Revenue	$	—		$	1,284,189		$	270,520		$	(29,712	)	$	1,524,997
Cost of goods and services	—			966,283			181,634			(31,046		)	1,116,871
Gross profit	—			317,906			88,886			1,334			408,126
Selling, general and administrative expenses	40,231			236,766			64,465			(370		)	341,092
Income (loss) from operations	(40,231		)	81,140			24,421			1,704			67,034
Other income (expense)
Interest income (expense), net	(13,804		)	(24,242		)	(13,403		)	—			(51,449		)
Other, net	(1,983		)	5,431			(631		)	(1,704		)	1,113
Total other income (expense)	(15,787		)	(18,811		)	(14,034		)	(1,704		)	(50,336		)
Income (loss) before taxes from continuing operations	(56,018		)	62,329			10,387			—			16,698
Provision (benefit) for income taxes	(11,338		)	24,560			(14,307		)	—			(1,085		)
Income (loss) before equity in net income of subsidiaries	(44,680		)	37,769			24,694			—			17,783
Equity in net income (loss) of subsidiaries	59,592			(25,231		)	37,770			(72,131		)	—
Income (loss) from continuing operations	14,912			12,538			62,464			(72,131		)	17,783
Income from operations of discontinued businesses	—			16,827			5,449			—			22,276
Provision (benefit) from income taxes	—			4,476			20,671			—			25,147
Loss from discontinued operations	—			12,351			(15,222		)	—			(2,871		)
Net income (loss)	$	14,912		$	24,889		$	47,242		$	(72,131	)	$	14,912
Comprehensive income (loss)	$	35,672		$	35,575		$	38,337		$	(73,912	)	$	35,672

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

For the Year Ended September 30, 2019

	Parent Company			Guarantor Companies			Non-Guarantor Companies			Elimination			Consolidation
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	37,287		$	94,637		$	81,089		$	(175,726	)	$	37,287
Net (income) loss from discontinued operations	—			—			8,335			—			8,335
Net cash provided by operating activities	42,159			41,992			29,807			—			113,958
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property, plant and equipment	(542		)	(38,872		)	(5,947		)	—			(45,361		)
Acquired business, net of cash acquired	(9,219		)	—			—			—			(9,219		)
Proceeds from sale of business	(9,500		)	—			—			—			(9,500		)
Insurance proceeds	(10,604		)	—			—			—			(10,604		)
Proceeds from sale of assets	—			254			26			—			280
Investment purchases	(149		)	—			—			—			(149		)
Net cash used in investing activities	(30,014		)	(38,618		)	(5,921		)	—			(74,553		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Purchase of shares for treasury	(1,478		)	—			—			—			(1,478		)
Proceeds from long-term debt	163,297			—			38,451			—			201,748
Payments of long-term debt	(173,345		)	(2,973		)	(41,930		)	—			(218,248		)
Change in short-term borrowings	—			(366		)	—			—			(366		)
Financing costs	(1,090		)	—			—			—			(1,090		)
Acquisition costs	—			—			(1,686		)	—			(1,686		)
Dividends paid	(13,676		)	—			—			—			(13,676		)
Other, net	(180		)	8,830			(8,830		)	—			(180		)
Net cash provided by (used in) financing activities	(26,472		)	5,491			(13,995		)	—			(34,976		)
CASH FLOWS FROM DISCONTINUED OPERATIONS:
Net cash used in discontinued operations	—			—			(2,123		)	—			(2,123		)
Effect of exchange rate changes on cash and equivalents	—			(1		)	314			—			313
NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS	(14,327		)	8,864			8,082			—			2,619
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD	15,976			16,353			37,429			—			69,758
CASH AND EQUIVALENTS AT END OF PERIOD	$	1,649		$	25,217		$	45,511		$	—		$	72,377

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

For the Year Ended September 30, 2018

	Parent Company			Guarantor Companies			Non-Guarantor Companies			Elimination			Consolidation
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	125,678		$	122,687		$	84,680		$	(207,367	)	$	125,678
Net (income) loss from discontinued operations	—			(92,423		)	—			—			(92,423		)
Net cash provided by (used in) operating activities	381,417			(405,174		)	108,981			(27,032		)	58,192
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property, plant and equipment	(544		)	(41,531		)	(8,063		)	—			(50,138		)
Acquired business, net of cash acquired	(368,936		)	(4,843		)	(57,153		)	—			(430,932		)
Proceeds from sale of business	—			474,727			—			—			474,727
Insurance proceeds (payments)	8,254			—			—			—			8,254
Proceeds from sale of assets	—			62			601			—			663
Net cash provided by (used in) investing activities	(361,226		)	428,415			(64,615		)	—			2,574
CASH FLOWS FROM FINANCING ACTIVITIES:
Purchase of shares for treasury	(45,605		)	—			—			—			(45,605		)
Proceeds from long-term debt	411,623			2,125			29,310			—			443,058
Payments of long-term debt	(269,478		)	(5,403		)	(26,112		)	—			(300,993		)
Change in short-term borrowings	—			144			—			—			144
Financing costs	(7,793		)	—			—			—			(7,793		)
Dividends paid	(49,797		)	—			—			—			(49,797		)
Other, net	(46,405		)	4,733			14,691			27,032			51
Net cash provided by (used in) financing activities	(7,455		)	1,599			17,889			27,032			39,065
CASH FLOWS FROM DISCONTINUED OPERATIONS:
Net cash used in discontinued operations	—			(16,394		)	(62,533		)	—			(78,927		)
Effect of exchange rate changes on cash and equivalents	—			(159		)	1,332			—			1,173
NET INCREASE IN CASH AND EQUIVALENTS	12,736			8,287			1,054			—			22,077
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD	3,240			8,066			36,375			—			47,681
CASH AND EQUIVALENTS AT END OF PERIOD	$	15,976		$	16,353		$	37,429		$	—		$	69,758

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

For the Year Ended September 30, 2017

	Parent Company			Guarantor Companies			Non-Guarantor Companies			Elimination			Consolidation
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	14,912		$	24,889		$	47,242		$	(72,131	)	$	14,912
Net income (loss) from discontinued operations	—			(12,351		)	15,222			—			2,871
Net cash provided by (used in) operating activities	(10,771		)	56,320			3,602			—			49,151
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property, plant and equipment	(15		)	(27,902		)	(7,020		)	—			(34,937		)
Acquired business, net of cash acquired	—			—			(34,719		)	—			(34,719		)
Investment purchases	(1,824		)	—			—			—			(1,824		)
Proceeds from sale of property, plant and equipment	—			144			(1		)	—			143
Net cash used in investing activities	(1,839		)	(27,758		)	(41,740		)	—			(71,337		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Purchase of shares for treasury	(15,841		)	—			—			—			(15,841		)
Proceeds from long-term debt	201,124			—			32,319			—			233,443
Payments of long-term debt	(149,109		)	(1,282		)	(20,063		)	—			(170,454		)
Share premium payment on settled debt	(24,997		)	—			—			—			(24,997		)
Financing costs	(1,548		)	—			—			—			(1,548		)
Purchase of ESOP shares	(10,908		)	—			—			—			(10,908		)
Dividends paid	(10,325		)	—			—			—			(10,325		)
Other, net	20,937			(34,806		)	13,799			—			(70		)
Net cash provided by (used in) financing activities	9,333			(36,088		)	26,055			—			(700		)
CASH FLOWS FROM DISCONTINUED OPERATIONS:
Net cash provided by (used in) discontinued operations	—			(12,100		)	9,950			—			(2,150		)
Effect of exchange rate changes on cash and equivalents	—			—			164			—			164
NET DECREASE IN CASH AND EQUIVALENTS	(3,277		)	(19,626		)	(1,969		)	—			(24,872		)
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD	6,517			27,692			38,344			—			72,553
CASH AND EQUIVALENTS AT END OF PERIOD	$	3,240		$	8,066		$	36,375		$	—		$	47,681