CONSOLIDATING GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION

9 Months Ended

Jun. 30, 2012

Consolidating Guarantor And Non Guarantor Financial Information [Text Block]

NOTE 20 — CONSOLIDATING GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION

Griffon’s Senior Notes are fully and unconditionally guaranteed, jointly and severally, on a senior secured basis by the domestic assets of Clopay Building Products Company, Inc., Clopay Plastic Products Company, Inc., Telephonics Corporation, Ames True Temper, Inc. and ATT Southern, Inc. 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 June 30, 2012 and September 30, 2011 and for the three and nine months ended June 30, 2012 and 2011. 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. On June 29, 2012, ATT Southern, Inc. was added as a guarantor. On June 30, 2012, to allocate debt related to operations, three guarantors entered into intercompany debt agreements with a non-guarantor to borrow a total of $491,372.

CONDENSED CONSOLIDATING BALANCE SHEETS
At June 30, 2012

($ in thousands)	Parent Company		Guarantor Companies		Non- Guarantor Companies		Elimination			Consolidation
CURRENT ASSETS
Cash and equivalents	$	103,616	$	26,554	$	41,742	$	—		$	171,912
Accounts receivable, net of allowances		—		206,645		79,198		(23,989	)		261,854
Contract costs and recognized income not yet billed, net of progress payments		—		62,831		2,706		—			65,537
Inventories, net		—		200,239		69,639		—			269,878
Prepaid and other current assets		3,705		25,861		17,934		2,397			49,897
Assets of discontinued operations		—		—		1,303		—			1,303
Total Current Assets		107,321		522,130		212,522		(21,592	)		820,381
PROPERTY, PLANT AND EQUIPMENT, net		1,248		243,476		112,903		—			357,627
GOODWILL		—		288,147		69,769		—			357,916
INTANGIBLE ASSETS, net		—		165,704		64,472		—			230,176
INTERCOMPANY RECEIVABLE		529,568		644,257		578,408		(1,752,233	)		—
EQUITY INVESTMENTS IN SUBSIDIARIES		2,183,293		564,451		2,653,970		(5,401,714	)		—
OTHER ASSETS		49,644		57,219		8,147		(87,198	)		27,812
ASSETS OF DISCONTINUED OPERATIONS		—		—		2,974		—			2,974
Total Assets	$	2,871,074	$	2,485,384	$	3,703,165	$	(7,262,737	)	$	1,796,886
CURRENT LIABILITIES
Notes payable and current portion of long-term debt	$	1,624	$	1,022	$	14,935	$	—		$	17,581
Accounts payable and accrued liabilities		38,737		160,731		62,403		(21,592	)		240,279
Liabilities of discontinued operations		—		—		3,077		—			3,077
Total Current Liabilities		40,361		161,753		80,415		(21,592	)		260,937
LONG-TERM DEBT, net of debt discounts		654,630		10,042		20,683		—			685,355
INTERCOMPANY PAYABLES		—		605,308		1,146,925		(1,752,233	)		—
OTHER LIABILITIES		74,335		181,013		25,373		(87,198	)		193,523
LIABILITIES OF DISCONTINUED OPERATIONS		—		—		4,033		—			4,033
Total Liabilities		769,326		958,116		1,277,429		(1,861,023	)		1,143,848
SHAREHOLDERS’ EQUITY		2,101,748		1,527,268		2,425,736		(5,401,714	)		653,038
Total Liabilities and Shareholders’ Equity	$	2,871,074	$	2,485,384	$	3,703,165	$	(7,262,737	)	$	1,796,886

CONDENSED CONSOLIDATING BALANCE SHEETS
At September 30, 2011

($ in thousands)	Parent Company		Guarantor Companies		Non- Guarantor Companies		Elimination			Consolidation
CURRENT ASSETS
Cash and equivalents	$	178,448	$	15,164	$	49,417	$	—		$	243,029
Accounts receivable, net of allowances		—		190,986		76,485		—			267,471
Contract costs and recognized income not yet billed, net of progress payments		—		73,755		982		—			74,737
Inventories, net		—		194,355		69,454		—			263,809
Prepaid and other current assets		1,839		40,436		1,913		4,640			48,828
Assets of discontinued operations		—		—		1,381		—			1,381
Total Current Assets		180,287		514,696		199,632		4,640			899,255
PROPERTY, PLANT AND EQUIPMENT, net		1,402		224,193		124,455		—			350,050
GOODWILL		—		283,491		74,397		—			357,888
INTANGIBLE ASSETS, net		—		155,242		67,947		—			223,189
INTERCOMPANY RECEIVABLE		449,112		278,344		98,953		(826,409	)		—
EQUITY INVESTMENTS IN SUBSIDIARIES		2,844,527		746,686		2,397,258		(5,988,471	)		—
OTHER ASSETS		54,354		49,771		14,270		(87,198	)		31,197
ASSETS OF DISCONTINUED OPERATIONS		—		—		3,675		—			3,675
Total Assets	$	3,529,682	$	2,252,423	$	2,980,587	$	(6,897,438	)	$	1,865,254
CURRENT LIABILITIES
Notes payable and current portion of long-term debt	$	5,375	$	4,350	$	15,439	$	—		$	25,164
Accounts payable and accrued liabilities		36,765		199,742		44,774		4,640			285,921
Liabilities of discontinued operations		—		—		3,794		—			3,794
Total Current Liabilities		42,140		204,092		64,007		4,640			314,879
LONG-TERM DEBT, net of debt discounts		649,812		10,794		27,641		—			688,247
INTERCOMPANY PAYABLES		—		89,198		737,211		(826,409	)		—
OTHER LIABILITIES		79,655		172,203		39,774		(87,198	)		204,434
LIABILITIES OF DISCONTINUED OPERATIONS		—		—		5,786		—			5,786
Total Liabilities		771,607		476,287		874,419		(908,967	)		1,213,346
SHAREHOLDERS’ EQUITY		2,758,075		1,776,136		2,106,168		(5,988,471	)		651,908
Total Liabilities and Shareholders’ Equity	$	3,529,682	$	2,252,423	$	2,980,587	$	(6,897,438	)	$	1,865,254

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
Three Months Ended June 30, 2012

($ in thousands)	Parent Company			Guarantor Companies			Non- Guarantor Companies			Elimination			Consolidation
Revenue	$	—		$	375,836		$	120,457		$	(16,047	)	$	480,246
Cost of goods and services		—			270,653			104,030			(10,082	)		364,601
Gross profit		—			105,183			16,427			(5,965	)		115,645
Selling, general and administrative expenses		5,420			72,300			15,405			(5,682	)		87,443
Total operating expenses		5,420			72,300			15,405			(5,682	)		87,443
Income (loss) from operations		(5,420	)		32,883			1,022			(283	)		28,202
Other income (expense)
Interest income (expense), net		(3,801	)		(6,094	)		(2,960	)		—			(12,855	)
Other, net		(40	)		2,761			(2,613	)		(462	)		(354	)
Total other income (expense)		(3,841	)		(3,333	)		(5,573	)		(462	)		(13,209	)
Income (loss) before taxes		(9,261	)		29,550			(4,551	)		(745	)		14,993
Provision (benefit) for income taxes		(4,824	)		10,604			165			—			5,945
Income (loss) before equity in net income of subsidiaries		(4,437	)		18,946			(4,716	)		(745	)		9,048
Equity in net income (loss) of subsidiaries		14,231			(4,694	)		18,947			(28,484	)		—
Net income (loss)	$	9,794		$	14,252		$	14,231		$	(29,229	)	$	9,048

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
For the Three Months Ended June 30, 2011

($ in thousands)	Parent Company			Guarantor Companies			Non- Guarantor Companies			Elimination			Consolidation
Revenue	$	—		$	344,229		$	121,993		$	(10,940	)	$	455,282
Cost of goods and services		—			255,237			112,185			(11,309	)		356,113
Gross profit		—			88,992			9,808			369			99,169
Selling, general and administrative expenses		6,285			62,190			13,663			(93	)		82,045
Restructuring and other related charges		—			2,016			102			—			2,118
Total operating expenses		6,285			64,206			13,765			(93	)		84,163
Income (loss) from operations		(6,285	)		24,786			(3,957	)		462			15,006
Other income (expense)
Interest income (expense), net		(3,600	)		2,667			(11,530	)		—			(12,463	)
Other, net		(1,349	)		7,139			(5,706	)		61			145
Total other income (expense)		(4,949	)		9,806			(17,236	)		61			(12,318	)
Income (loss) before taxes		(11,234	)		34,592			(21,193	)		523			2,688
Provision (benefit) for income taxes		(8,708	)		10,254			(3,730	)		—			(2,184	)
Income (loss) before equity in net income of subsidiaries		(2,526	)		24,338			(17,463	)		523			4,872
Equity in net income of subsidiaries		6,875			(12,237	)		24,338			(18,976	)		—
Net income (loss)	$	4,349		$	12,101		$	6,875		$	(18,453	)	$	4,872

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
Nine Months Ended June 30, 2012

($ in thousands)	Parent Company			Guarantor Companies			Non- Guarantor Companies			Elimination			Consolidation
Revenue	$	—		$	1,077,454		$	379,617		$	(43,362	)	$	1,413,709
Cost of goods and services		—			804,521			325,917			(37,883	)		1,092,555
Gross profit		—			272,933			53,700			(5,479	)		321,154
Selling, general and administrative expenses		14,665			200,474			47,389			(5,867	)		256,661
Restructuring and other related charges		—			1,779			16			—			1,795
Total operating expenses		14,665			202,253			47,405			(5,867	)		258,456
Income (loss) from operations		(14,665	)		70,680			6,295			388			62,698
Other income (expense)
Interest income (expense), net		(10,545	)		(18,156	)		(10,074	)		—			(38,775	)
Other, net		135			8,350			(6,376	)		(1,386	)		723
Total other income (expense)		(10,410	)		(9,806	)		(16,450	)		(1,386	)		(38,052	)
Income (loss) before taxes		(25,075	)		60,874			(10,155	)		(998	)		24,646
Provision (benefit) for income taxes		(12,583	)		23,401			265			—			11,083
Income (loss) before equity in net income of subsidiaries		(12,492	)		37,473			(10,420	)		(998	)		13,563
Equity in net income (loss) of subsidiaries		27,053			(10,296	)		37,473			(54,230	)		—
Net income (loss)	$	14,561		$	27,177		$	27,053		$	(55,228	)	$	13,563

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
For the Nine Months Ended June 30, 2011

($ in thousands)	Parent Company			Guarantor Companies			Non- Guarantor Companies			Elimination			Consolidation
Revenue	$	—		$	1,013,130		$	361,365		$	(28,682	)	$	1,345,813
Cost of goods and services		—			778,650			308,669			(29,677	)		1,057,642
Gross profit		—			234,480			52,696			995			288,171
Selling, general and administrative expenses		16,848			187,151			43,103			(249	)		246,853
Restructuring and other related charges		—			4,498			225			—			4,723
Total operating expenses		16,848			191,649			43,328			(249	)		251,576
Income (loss) from operations		(16,848	)		42,831			9,368			1,244			36,595
Other income (expense)
Interest income (expense), net		(8,997	)		4,366			(30,208	)		—			(34,839	)
Loss from debt extinguishment, net		—			(397	)		(25,767	)		—			(26,164	)
Other, net		(42	)		4,908			(738	)		(721	)		3,407
Total other income (expense)		(9,039	)		8,877			(56,713	)		(721	)		(57,596	)
Income (loss) before taxes		(25,887	)		51,708			(47,345	)		523			(21,001	)
Provision (benefit) for income taxes		(14,594	)		21,471			(17,069	)		—			(10,192	)
Income (loss) before equity in net income of subsidiaries		(11,293	)		30,237			(30,276	)		523			(10,809	)
Equity in net income (loss) of subsidiaries		(39	)		2,122			30,237			(32,320	)		—
Net income (loss)	$	(11,332	)	$	32,359		$	(39	)	$	(31,797	)	$	(10,809	)

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
Nine Months Ended June 30, 2012

($ in thousands)	Parent Company			Guarantor Companies			Non- Guarantor Companies			Elimination			Consolidation
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	14,561		$	27,177		$	27,053		$	(55,228	)	$	13,563
Net cash provided by (used in) operating activities		(52,122	)		48,597			33,874			(2	)		30,347
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property, plant and equipment		(91	)		(51,582	)		(6,022	)		—			(57,695	)
Acquired business, net of cash acquired		—			(22,432	)		—			—			(22,432	)
Intercompany distributions		10,000			(10,000	)		—			—			—
Proceeds from sale of investment		—			183			98			—			281
Net cash provided by (used in) investing activities		9,909			(83,831	)		(5,924	)		—			(79,846	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Purchase of shares for treasury		(5,670	)		—			—			—			(5,670	)
Proceeds from issuance of long-term debt		—			491,372			4,000			(491,372	)		4,000
Payments of long-term debt		(1,219	)		(4,101	)		(9,243	)		—			(14,563	)
Decrease in short-term borrowings		—			—			(1,262	)		—			(1,262	)
Intercompany debt		(23,000	)		—			(468,372	)		491,372			—
Financing costs		(65	)		—			(32	)		—			(97	)
Tax effect from exercise/vesting of equity awards, net		834			—			—			—			834
Dividend		(3,564	)		(219,516	)		219,516			—			(3,564	)
Other, net		67			(221,132	)		221,132			—			67
Net cash provided by (used in) financing activities		(32,617	)		46,623			(34,261	)		—			(20,255	)
CASH FLOWS FROM DISCONTINUED OPERATIONS:
Net cash used in operating activities		—			—			(1,690	)		—			(1,690	)
Net cash used in discontinued operations		—			—			(1,690	)		—			(1,690	)
Effect of exchange rate changes on cash and equivalents		—			—			325			2			327
NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS		(74,830	)		11,389			(7,676	)		—			(71,117	)
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD		178,448			15,164			49,417			—			243,029
CASH AND EQUIVALENTS AT END OF PERIOD	$	103,618		$	26,553		$	41,741		$	—		$	171,912

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
For the Nine Months Ended June 30, 2011

($ in thousands)	Parent Company			Guarantor Companies			Non- Guarantor Companies			Elimination			Consolidation
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	(11,332	)	$	32,359		$	(39	)	$	(31,797	)	$	(10,809	)
Net cash provided by (used in) operating activities		21,279			35,824			(44,048	)		—			13,055
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property, plant and equipment		(321	)		(36,400	)		(28,253	)		—			(64,974	)
Acquired business, net of cash acquired		—			(1,066	)		211			—			(855	)
Intercompany distributions		10,000			(10,000	)		—			—			—
Funds restricted for capital projects		—			3,875			—			—			3,875
Proceeds from sale of investment		—			—			1,333			—			1,333
Increase in equipment lease deposits		—			—			—			—			—
Net cash provided by (used in) investing activities		9,679			(43,591	)		(26,709	)		—			(60,621	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of long-term debt		565,673			—			75,290			—			640,963
Payments of long-term debt		(469	)		(30,850	)		(463,890	)		—			(495,209	)
Decrease in short-term borrowings		—			—			12,730			—			12,730
Intercompany debt		(468,372	)		—			468,372			—			—
Financing costs		(14,354	)		—			(6,989	)		—			(21,343	)
Purchase of ESOP shares		(15,673	)		—			(1	)		—			(15,674	)
Exercise of stock options		20			—			—			—			20
Tax benefit from vesting of restricted stock		2,334			—			—			—			2,334
Other, net		22			11,415			(11,415	)		—			22
Net cash provided by (used in) financing activities		69,181			(19,435	)		74,097			—			123,843
Net cash used in discontinued operations		—			—			(829	)		—			(829	)
Effect of exchange rate changes on cash and equivalents		—			—			1,304			—			1,304
NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS		100,139			(27,202	)		3,815			—			76,752
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD		74,600			57,113			38,089			—			169,802
CASH AND EQUIVALENTS AT END OF PERIOD	$	174,739		$	29,911		$	41,904		$	—		$	246,554