DISCONTINUED OPERATIONS

12 Months Ended

Sep. 30, 2021

Discontinued Operations and Disposal Groups [Abstract]

In accordance with ASC 205-20 Presentation of Financial Statements: Discontinued Operations, a disposal of a component of an entity or a group of components of an entity is required to be reported as discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results when the component of an entity meets the criteria in paragraph 205-20-45-10. In the period in which the component meets held-for-sale or discontinued operations criteria the major current assets, other assets, current liabilities, and noncurrent liabilities shall be reported as components of total assets and liabilities separate from those balances of the continuing operations. At the same time, the results of all discontinued operations, less applicable income taxes (benefit), shall be reported as components of net income (loss) separate from the net income (loss) of continuing operations.

Defense Electronics (DE or Telephonics)

The following amounts related to Telephonics have been segregated from Griffon's continuing operations and are reported as discontinued operations:


	For the Year Ended September 30,
	2021		2020		2019
Revenue	$	271,060	$	340,976	$	335,041
Cost of goods and services	232,075		285,022		269,890
Gross profit	38,985		55,954		65,151
Selling, general and administrative expenses	35,532		42,314		39,194


Income from discontinued operations	3,453		13,640		25,957
Other income (expense)
Gain on sale of business	5,291		—		—
Interest income, net	117		4		253
Other, net	36		408		(255)
Total other income (expense)	5,444		412		(2)
Income from discontinued operations before tax	$	8,897	$	14,052	$	25,955

The gain on sale of business relates to the divestiture of the SEG business on December 18, 2020, SEG had sales of approximately $6,713, $31,758, and $27,450 for the years ended 2021, 2020 and 2019.

Income from discontinued operations includes severance charges of approximately $4,300, with $2,100 recognized in fiscal 2020, and the remaining $2,200 recognized in fiscal 2021. In September 2020, the DE Voluntary Employee Retirement Plan was initiated, which was subsequently followed by a reduction in force in November 2020, to improve efficiencies by combining functions and responsibilities. These actions reduced headcount by approximately 90 people.

Income from discontinued operations includes charges of $5,601 recorded in fiscal 2021 primarily related to exiting our older weather radar product lines.

The following amounts related to Telephonics have been segregated from Griffon's continuing operations and are reported as assets and liabilities of discontinued operations held for sale in the consolidated balance sheets:


	At September 30,		At September 30,
	2021		2020
CURRENT ASSETS

Accounts receivable, net	42,020		62,127
Contract assets, net of progress payments	72,983		84,426
Inventories	83,970		93,637
Prepaid and other current assets	4,409		5,536
PROPERTY, PLANT AND EQUIPMENT, net	45,371		46,880
OPERATING LEASE RIGHT-OF-USE ASSETS	1,167		7,278
GOODWILL	17,734		18,545
INTANGIBLE ASSETS, net	131		826
OTHER ASSETS	5,629		6,423
Total Assets Held for Sale	$	273,414	$	325,678
CURRENT LIABILITIES

Accounts payable	60,486		59,724
Accrued liabilities	15,153		20,023
Current portion of operating lease liabilities	287		2,176

LONG-TERM OPERATING LEASE LIABILITIES	867		5,466
OTHER LIABILITIES	3,955		4,972
Total Liabilities Held for Sale	$	80,748	$	92,361

Installation Services and Other Discontinued Activities

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 Plastics divestiture and included an additional reserve for a legacy environmental matter. The following amounts summarize the total assets and liabilities of 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, 2021		At September 30, 2020
Assets of discontinued operations:
Prepaid and other current assets	$	605	$	2,091
Other long-term assets	3,424		6,406
Total assets of discontinued operations	$	4,029	$	8,497

Liabilities of discontinued operations:
Accrued liabilities, current	$	3,280	$	3,797
Other long-term liabilities	3,794		7,014
Total liabilities of discontinued operations	$	7,074	$	10,811

At September 30, 2021, Griffon’s liabilities for Installations Services and other discontinued operations primarily related to insurance claims, income taxes and product liability, warranty and environmental reserves totaling liabilities of approximately $7,074. The decrease in assets and liabilities were primarily associated with insurance claims receivable and payable.

There was no reported revenue in 2021, 2020 and 2019.