XML 38 R30.htm IDEA: XBRL DOCUMENT v2.4.0.6
LONG-TERM DEBT (Tables)
 3 Months Ended
Dec. 31, 2012
Schedule of Debt [Table Text Block] Long term debt reported are as follows (in thousands, except share and per share data):

 

 

 

 

Three Months Ended December 31, 2012

 

Three Months Ended December 31, 2011

 

 

 

 

 

 

 

 

 

 

 

 

 

Effective
Interest Rate

 

Cash Interest

 

Amort. Debt
Discount

 

Amort.
Deferred Cost
& Other Fees

 

Total Interest
Expense

 

Effective
Interest Rate

 

Cash Interest

 

Amort. Debt
Discount

 

Amort.
Deferred Cost
& Other Fees

 

Total
Interest
Expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Senior notes due 2018

 

(a)

 

 

7.4

%

$

9,797

 

$

—

 

$

406

 

$

10,203

 

 

7.4

%

$

9,797

 

$

—

 

$

412

 

$

10,209

 

Revolver due 2016

 

(a)

 

 

0.0

%

 

218

 

 

—

 

 

156

 

 

374

 

 

n/a

 

 

—

 

 

—

 

 

153

 

 

153

 

Convert. debt due 2017

 

(b)

 

 

9.1

%

 

1,000

 

 

811

 

 

111

 

 

1,922

 

 

9.0

%

 

1,000

 

 

744

 

 

111

 

 

1,855

 

Real estate mortgages

 

(c)

 

 

5.3

%

 

139

 

 

—

 

 

21

 

 

160

 

 

5.6

%

 

150

 

 

—

 

 

22

 

 

172

 

ESOP Loans

 

(d)

 

 

2.9

%

 

167

 

 

—

 

 

2

 

 

169

 

 

2.9

%

 

180

 

 

—

 

 

1

 

 

181

 

Capital lease - real estate

 

(e)

 

 

5.3

%

 

131

 

 

—

 

 

6

 

 

137

 

 

5.6

%

 

142

 

 

—

 

 

6

 

 

148

 

Convert. debt due 2023

 

(f)

 

 

4.0

%

 

5

 

 

—

 

 

—

 

 

5

 

 

4.0

%

 

5

 

 

—

 

 

—

 

 

5

 

Term loan due 2013

 

(g)

 

 

3.7

%

 

98

 

 

—

 

 

21

 

 

119

 

 

9.3

%

 

282

 

 

—

 

 

22

 

 

304

 

Revolver due 2013

 

(g)

 

 

n/a

 

 

17

 

 

—

 

 

—

 

 

17

 

 

n/a

 

 

22

 

 

—

 

 

34

 

 

56

 

Foreign lines of credit

 

(h)

 

 

9.9

%

 

96

 

 

—

 

 

—

 

 

96

 

 

10.9

%

 

103

 

 

—

 

 

—

 

 

103

 

Foreign term loan

 

(h)

 

 

10.5

%

 

75

 

 

—

 

 

5

 

 

80

 

 

n/a

 

 

—

 

 

—

 

 

—

 

 

—

 

Other long term debt

 

(i)

 

 

 

 

 

110

 

 

—

 

 

—

 

 

110

 

 

 

 

 

328

 

 

—

 

 

—

 

 

328

 

Capitalized interest

 

 

 

 

 

 

 

(285

)

 

—

 

 

—

 

 

(285

)

 

 

 

 

(451

)

 

—

 

 

—

 

 

(451

)

 

 

 

 

 

 

 

   

 

   

 

   

 

   

 

 

 

 

   

 

   

 

   

 

   

 

Totals

 

 

 

 

 

 

$

11,568

 

$

811

 

$

728

 

$

13,107

 

 

 

 

$

11,558

 

$

744

 

$

761

 

$

13,063

 

 

 

 

 

 

 

 

   

 

   

 

   

 

   

 

 

 

 

   

 

   

 

   

 

   

 


 

 

(a)

On March 17, 2011, in an unregistered offering through a private placement under Rule 144A, Griffon issued, at par, $550,000 of 7.125% Senior Notes due in 2018 (“Senior Notes”); interest is payable semi-annually. On August 9, 2011, Griffon exchanged all of the Senior Notes for substantially identical Senior Notes registered under the Securities Act of 1933 via an exchange offer.

 

 

 

The Senior Notes can be redeemed prior to April 1, 2014 at a price of 100% of principal plus a make-whole premium and accrued interest; on or after April 1, 2014, the Senior Notes can be redeemed at a certain price (declining from 105.344% of principal on or after April 1, 2014 to 100% of principal on or after April 1, 2017), plus accrued interest. Proceeds from the Senior Notes were used to pay down outstanding borrowings under a senior secured term loan facility and two senior secured revolving credit facilities of certain of the Company’s subsidiaries. The Senior Notes are senior unsecured obligations of Griffon guaranteed by certain domestic subsidiaries, and are subject to certain covenants, limitations and restrictions.

 

 

 

On March 18, 2011, Griffon entered into a five-year $200,000 Revolving Credit Facility (“Credit Agreement”), which included a letter of credit sub-facility with a limit of $50,000, a multi-currency sub-facility of $50,000 and a swingline sub-facility with a limit of $30,000. Borrowings under the Credit Agreement may be repaid and re-borrowed at any time, subject to final maturity of the facility or the occurrence of a default or event of default under the Credit Agreement. Interest is payable on borrowings at either a LIBOR or base rate benchmark rate plus an applicable margin, which adjusts based on financial performance. The margins are 1.50% for base rate loans and 2.50% for LIBOR loans, in each case without a floor. The Credit Agreement has certain financial maintenance tests including a maximum total leverage ratio, a maximum senior secured leverage ratio and a minimum interest coverage ratio as well as customary affirmative and negative covenants and events of default.

 

 

 

The Credit Agreement also includes certain restrictions, such as limitations on the incurrence of indebtedness and liens and the making of restricted payments and investments. Borrowings under the Credit Agreement are guaranteed by certain domestic subsidiaries and are secured, on a first priority basis, by substantially all assets of the Company and the guarantors.

 

 

 

At December 31, 2012, there were $21,307 of standby letters of credit outstanding under the Credit Agreement; $178,693 was available for borrowing at that date.

 

 

(b)

On December 21, 2009, Griffon issued $100,000 principal of 4% convertible subordinated notes due 2017 (the “2017 Notes”). The initial conversion rate of the 2017 Notes was 67.0799 shares of Griffon’s common stock per $1,000 principal amount of notes, corresponding to an initial conversion price of $14.91 per share, a 23% conversion premium over the $12.12 closing price on December 15, 2009. When a cash dividend is declared that would result in an adjustment to the conversion ratio of less than 1%, any adjustment to the conversion ratio is deferred until the first to occur of (i) actual conversion, (ii) the 42nd trading day prior to maturity of the notes, and (iii) such time as the cumulative adjustment equals or exceeds 1%. As of December 31, 2012, aggregate dividends of $0.105 per share resulted in a cumulative change in the conversion rate of 1.1421%. As a result, the new conversion rate of the 2017 Notes was 67.8495 shares of Griffon’s common stock per $1,000 principal amount of notes, corresponding to an initial conversion price of $14.74 per share. Griffon used 8.75% as the nonconvertible debt-borrowing rate to discount the 2017 Notes and will amortize the debt discount through January 2017. At issuance, the debt component of the 2017 Notes was $75,437 and debt discount was $24,563. At December 31, 2012 and September 30, 2012, the 2017 Notes had a capital in excess of par component, net of tax, of $15,720.

 

 

(c)

On December 20, 2010, Griffon entered into two second lien real estate mortgages to secure new loans totaling $11,834. The loans mature in February 2016, are collateralized by the related properties and are guaranteed by Griffon. The loans bear interest at a rate of LIBOR plus 3% with the option to swap to a fixed rate.

 

 

 

Griffon has other real estate mortgages, collateralized by real property, which bear interest at 6.3% and mature in 2016. On October 3, 2011, the mortgage at Russia, Ohio was paid in full, on maturity.

 

 

(d)

Griffon’s Employee Stock Ownership Plan (“ESOP”) entered into a loan agreement in August 2010 to borrow $20,000 over a one-year period. The proceeds were used to purchase 1,874,737 shares of Griffon common stock in the open market for $19,973. The loan bears interest at a) LIBOR plus 2.5% or b) the lender’s prime rate, at Griffon’s option. In November 2011, Griffon exercised an option to convert the outstanding loan to a five-year term loan; principal is payable in quarterly installments of $250, beginning December 2011, with a balloon payment of $15,223 due at maturity (November 2016). The loan is secured by shares purchased with the proceeds of the loan, and repayment is guaranteed by Griffon. At December 31, 2012, $18,723 was outstanding.

 

 

 

In addition, the ESOP is party to a loan agreement which requires quarterly principal payments of $156 and interest through the extended expiration date of December 2013 at which time the $3,125 balance of the loan, and any outstanding interest, will be payable. Griffon has the intent and ability to refinance the December 2013 balance, and has classified the balance in Long-Term Debt. The primary purpose of this loan was to purchase 547,605 shares of Griffon’s common stock in October 2008. The loan is secured by shares purchased with the proceeds of the loan, and repayment is guaranteed by Griffon. The loan bears interest at rates based upon the prime rate or LIBOR. At December 31, 2012, $3,594 was outstanding.

 

 

(e)

In October 2006, CBP entered into a capital lease totaling $14,290 for real estate in Troy, Ohio. The lease matures in 2021, bears interest at a fixed rate of 5.3%, is secured by a mortgage on the real estate and is guaranteed by Griffon.

 

 

(f)

At December 31, 2012 and September 30, 2012, Griffon had $532 of 4% convertible subordinated notes due 2023 (the “2023 Notes”) outstanding. Holders of the 2023 Notes may require Griffon to repurchase all or a portion of their 2023 Notes on July 18, 2013 and 2018, if Griffon’s common stock price is below the conversion price of the 2023 Notes, as well as upon a change in control. An adjustment to the conversion rate will be required as the result of payment of a cash dividend only if such adjustment would be greater than 1% (or at such time as the cumulative impact on the conversion rate reaches 1% in the aggregate). As of December 31, 2012, aggregate dividends of $0.105 per share resulted in a cumulative change in the conversion rate of 1.1427% to $23.8555 per $1,000 principal amount of notes. At December 31, 2012 and September 30, 2012, the 2023 Notes had no capital in excess of par value component as substantially all of these notes were put to Griffon at par and settled in July 2010.

 

 

(g)

In November 2010, Clopay Europe GMBH (“Clopay Europe”) entered into a €10,000 revolving credit facility and a €20,000 term loan. The facility accrues interest at EURIBOR plus 2.45% per annum and the term loan accrues interest at EURIBOR plus 2.20% per annum. The revolving facility matures in November 2013, but is renewable upon mutual agreement with the bank. In July 2011, the full €20,000 was drawn on the Term Loan, with a portion of the proceeds used to repay borrowings under the revolving credit facility. The term loan is payable in ten equal quarterly installments which began in September 2011, with maturity in December 2013. Under the term loan, Clopay Europe is required to maintain a certain minimum equity to assets ratio and keep leverage below a certain level, defined as the ratio of total debt to EBITDA.

 

 

(h)

In February 2012, Clopay do Brazil, a subsidiary of Plastics, borrowed $4,000 at a rate of 104.5% of Brazilian CDI (6.9% at December 31, 2012). The loan was used to refinance existing loans, is collateralized by accounts receivable and a 50% guaranty by Plastics and is to be repaid in four equal, semi-annual installments of principal plus accrued interest beginning in August 2012. Clopay do Brazil also maintains lines of credit of approximately $4,355. Interest on borrowings accrue at a rate of Brazilian CDI plus 6.0% or a fixed rate (12.9% or 10.7%, respectively, at December 31, 2012). At December 31, 2012 there was approximately $3,681 borrowed under the lines.

 

 

 

In November 2012, Garant G.P. (“Garant”) entered into a CDN $15,000 revolving credit facility. The facility accrues interest at LIBOR or the Bankers Acceptance Rate plus 1.3% per annum (1.51% and 1.53% as of December 31, 2012). The revolving facility matures in November 2015. Garant is required to maintain a certain minimum equity. At December 31, 2012, there were no borrowings under the revolving credit facility with CDN $15,000 available for borrowing

 

 

(i)

Includes capital leases.


Schedule Of Interest Expense For Long Term Debt [Table Text Block] Interest Expense incurred are as follows (in thousands, except share and per share data):

 

 

 

 

Three Months Ended December 31, 2012

 

Three Months Ended December 31, 2011

 

 

 

 

 

 

 

 

 

 

 

 

 

Effective
Interest Rate

 

Cash Interest

 

Amort. Debt
Discount

 

Amort.
Deferred Cost
& Other Fees

 

Total Interest
Expense

 

Effective
Interest Rate

 

Cash Interest

 

Amort. Debt
Discount

 

Amort.
Deferred Cost
& Other Fees

 

Total
Interest
Expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Senior notes due 2018

 

(a)

 

 

7.4

%

$

9,797

 

$

—

 

$

406

 

$

10,203

 

 

7.4

%

$

9,797

 

$

—

 

$

412

 

$

10,209

 

Revolver due 2016

 

(a)

 

 

0.0

%

 

218

 

 

—

 

 

156

 

 

374

 

 

n/a

 

 

—

 

 

—

 

 

153

 

 

153

 

Convert. debt due 2017

 

(b)

 

 

9.1

%

 

1,000

 

 

811

 

 

111

 

 

1,922

 

 

9.0

%

 

1,000

 

 

744

 

 

111

 

 

1,855

 

Real estate mortgages

 

(c)

 

 

5.3

%

 

139

 

 

—

 

 

21

 

 

160

 

 

5.6

%

 

150

 

 

—

 

 

22

 

 

172

 

ESOP Loans

 

(d)

 

 

2.9

%

 

167

 

 

—

 

 

2

 

 

169

 

 

2.9

%

 

180

 

 

—

 

 

1

 

 

181

 

Capital lease - real estate

 

(e)

 

 

5.3

%

 

131

 

 

—

 

 

6

 

 

137

 

 

5.6

%

 

142

 

 

—

 

 

6

 

 

148

 

Convert. debt due 2023

 

(f)

 

 

4.0

%

 

5

 

 

—

 

 

—

 

 

5

 

 

4.0

%

 

5

 

 

—

 

 

—

 

 

5

 

Term loan due 2013

 

(g)

 

 

3.7

%

 

98

 

 

—

 

 

21

 

 

119

 

 

9.3

%

 

282

 

 

—

 

 

22

 

 

304

 

Revolver due 2013

 

(g)

 

 

n/a

 

 

17

 

 

—

 

 

—

 

 

17

 

 

n/a

 

 

22

 

 

—

 

 

34

 

 

56

 

Foreign lines of credit

 

(h)

 

 

9.9

%

 

96

 

 

—

 

 

—

 

 

96

 

 

10.9

%

 

103

 

 

—

 

 

—

 

 

103

 

Foreign term loan

 

(h)

 

 

10.5

%

 

75

 

 

—

 

 

5

 

 

80

 

 

n/a

 

 

—

 

 

—

 

 

—

 

 

—

 

Other long term debt

 

(i)

 

 

 

 

 

110

 

 

—

 

 

—

 

 

110

 

 

 

 

 

328

 

 

—

 

 

—

 

 

328

 

Capitalized interest

 

 

 

 

 

 

 

(285

)

 

—

 

 

—

 

 

(285

)

 

 

 

 

(451

)

 

—

 

 

—

 

 

(451

)

 

 

 

 

 

 

 

   

 

   

 

   

 

   

 

 

 

 

   

 

   

 

   

 

   

 

Totals

 

 

 

 

 

 

$

11,568

 

$

811

 

$

728

 

$

13,107

 

 

 

 

$

11,558

 

$

744

 

$

761

 

$

13,063

 

 

 

 

 

 

 

 

   

 

   

 

   

 

   

 

 

 

 

   

 

   

 

   

 

   

 


 

 

(a)

On March 17, 2011, in an unregistered offering through a private placement under Rule 144A, Griffon issued, at par, $550,000 of 7.125% Senior Notes due in 2018 (“Senior Notes”); interest is payable semi-annually. On August 9, 2011, Griffon exchanged all of the Senior Notes for substantially identical Senior Notes registered under the Securities Act of 1933 via an exchange offer.

 

 

 

The Senior Notes can be redeemed prior to April 1, 2014 at a price of 100% of principal plus a make-whole premium and accrued interest; on or after April 1, 2014, the Senior Notes can be redeemed at a certain price (declining from 105.344% of principal on or after April 1, 2014 to 100% of principal on or after April 1, 2017), plus accrued interest. Proceeds from the Senior Notes were used to pay down outstanding borrowings under a senior secured term loan facility and two senior secured revolving credit facilities of certain of the Company’s subsidiaries. The Senior Notes are senior unsecured obligations of Griffon guaranteed by certain domestic subsidiaries, and are subject to certain covenants, limitations and restrictions.

 

 

 

On March 18, 2011, Griffon entered into a five-year $200,000 Revolving Credit Facility (“Credit Agreement”), which included a letter of credit sub-facility with a limit of $50,000, a multi-currency sub-facility of $50,000 and a swingline sub-facility with a limit of $30,000. Borrowings under the Credit Agreement may be repaid and re-borrowed at any time, subject to final maturity of the facility or the occurrence of a default or event of default under the Credit Agreement. Interest is payable on borrowings at either a LIBOR or base rate benchmark rate plus an applicable margin, which adjusts based on financial performance. The margins are 1.50% for base rate loans and 2.50% for LIBOR loans, in each case without a floor. The Credit Agreement has certain financial maintenance tests including a maximum total leverage ratio, a maximum senior secured leverage ratio and a minimum interest coverage ratio as well as customary affirmative and negative covenants and events of default.

 

 

 

The Credit Agreement also includes certain restrictions, such as limitations on the incurrence of indebtedness and liens and the making of restricted payments and investments. Borrowings under the Credit Agreement are guaranteed by certain domestic subsidiaries and are secured, on a first priority basis, by substantially all assets of the Company and the guarantors.

 

 

 

At December 31, 2012, there were $21,307 of standby letters of credit outstanding under the Credit Agreement; $178,693 was available for borrowing at that date.

 

 

(b)

On December 21, 2009, Griffon issued $100,000 principal of 4% convertible subordinated notes due 2017 (the “2017 Notes”). The initial conversion rate of the 2017 Notes was 67.0799 shares of Griffon’s common stock per $1,000 principal amount of notes, corresponding to an initial conversion price of $14.91 per share, a 23% conversion premium over the $12.12 closing price on December 15, 2009. When a cash dividend is declared that would result in an adjustment to the conversion ratio of less than 1%, any adjustment to the conversion ratio is deferred until the first to occur of (i) actual conversion, (ii) the 42nd trading day prior to maturity of the notes, and (iii) such time as the cumulative adjustment equals or exceeds 1%. As of December 31, 2012, aggregate dividends of $0.105 per share resulted in a cumulative change in the conversion rate of 1.1421%. As a result, the new conversion rate of the 2017 Notes was 67.8495 shares of Griffon’s common stock per $1,000 principal amount of notes, corresponding to an initial conversion price of $14.74 per share. Griffon used 8.75% as the nonconvertible debt-borrowing rate to discount the 2017 Notes and will amortize the debt discount through January 2017. At issuance, the debt component of the 2017 Notes was $75,437 and debt discount was $24,563. At December 31, 2012 and September 30, 2012, the 2017 Notes had a capital in excess of par component, net of tax, of $15,720.

 

 

(c)

On December 20, 2010, Griffon entered into two second lien real estate mortgages to secure new loans totaling $11,834. The loans mature in February 2016, are collateralized by the related properties and are guaranteed by Griffon. The loans bear interest at a rate of LIBOR plus 3% with the option to swap to a fixed rate.

 

 

 

Griffon has other real estate mortgages, collateralized by real property, which bear interest at 6.3% and mature in 2016. On October 3, 2011, the mortgage at Russia, Ohio was paid in full, on maturity.

 

 

(d)

Griffon’s Employee Stock Ownership Plan (“ESOP”) entered into a loan agreement in August 2010 to borrow $20,000 over a one-year period. The proceeds were used to purchase 1,874,737 shares of Griffon common stock in the open market for $19,973. The loan bears interest at a) LIBOR plus 2.5% or b) the lender’s prime rate, at Griffon’s option. In November 2011, Griffon exercised an option to convert the outstanding loan to a five-year term loan; principal is payable in quarterly installments of $250, beginning December 2011, with a balloon payment of $15,223 due at maturity (November 2016). The loan is secured by shares purchased with the proceeds of the loan, and repayment is guaranteed by Griffon. At December 31, 2012, $18,723 was outstanding.

 

 

 

In addition, the ESOP is party to a loan agreement which requires quarterly principal payments of $156 and interest through the extended expiration date of December 2013 at which time the $3,125 balance of the loan, and any outstanding interest, will be payable. Griffon has the intent and ability to refinance the December 2013 balance, and has classified the balance in Long-Term Debt. The primary purpose of this loan was to purchase 547,605 shares of Griffon’s common stock in October 2008. The loan is secured by shares purchased with the proceeds of the loan, and repayment is guaranteed by Griffon. The loan bears interest at rates based upon the prime rate or LIBOR. At December 31, 2012, $3,594 was outstanding.

 

 

(e)

In October 2006, CBP entered into a capital lease totaling $14,290 for real estate in Troy, Ohio. The lease matures in 2021, bears interest at a fixed rate of 5.3%, is secured by a mortgage on the real estate and is guaranteed by Griffon.

 

 

(f)

At December 31, 2012 and September 30, 2012, Griffon had $532 of 4% convertible subordinated notes due 2023 (the “2023 Notes”) outstanding. Holders of the 2023 Notes may require Griffon to repurchase all or a portion of their 2023 Notes on July 18, 2013 and 2018, if Griffon’s common stock price is below the conversion price of the 2023 Notes, as well as upon a change in control. An adjustment to the conversion rate will be required as the result of payment of a cash dividend only if such adjustment would be greater than 1% (or at such time as the cumulative impact on the conversion rate reaches 1% in the aggregate). As of December 31, 2012, aggregate dividends of $0.105 per share resulted in a cumulative change in the conversion rate of 1.1427% to $23.8555 per $1,000 principal amount of notes. At December 31, 2012 and September 30, 2012, the 2023 Notes had no capital in excess of par value component as substantially all of these notes were put to Griffon at par and settled in July 2010.

 

 

(g)

In November 2010, Clopay Europe GMBH (“Clopay Europe”) entered into a €10,000 revolving credit facility and a €20,000 term loan. The facility accrues interest at EURIBOR plus 2.45% per annum and the term loan accrues interest at EURIBOR plus 2.20% per annum. The revolving facility matures in November 2013, but is renewable upon mutual agreement with the bank. In July 2011, the full €20,000 was drawn on the Term Loan, with a portion of the proceeds used to repay borrowings under the revolving credit facility. The term loan is payable in ten equal quarterly installments which began in September 2011, with maturity in December 2013. Under the term loan, Clopay Europe is required to maintain a certain minimum equity to assets ratio and keep leverage below a certain level, defined as the ratio of total debt to EBITDA.

 

 

(h)

In February 2012, Clopay do Brazil, a subsidiary of Plastics, borrowed $4,000 at a rate of 104.5% of Brazilian CDI (6.9% at December 31, 2012). The loan was used to refinance existing loans, is collateralized by accounts receivable and a 50% guaranty by Plastics and is to be repaid in four equal, semi-annual installments of principal plus accrued interest beginning in August 2012. Clopay do Brazil also maintains lines of credit of approximately $4,355. Interest on borrowings accrue at a rate of Brazilian CDI plus 6.0% or a fixed rate (12.9% or 10.7%, respectively, at December 31, 2012). At December 31, 2012 there was approximately $3,681 borrowed under the lines.

 

 

 

In November 2012, Garant G.P. (“Garant”) entered into a CDN $15,000 revolving credit facility. The facility accrues interest at LIBOR or the Bankers Acceptance Rate plus 1.3% per annum (1.51% and 1.53% as of December 31, 2012). The revolving facility matures in November 2015. Garant is required to maintain a certain minimum equity. At December 31, 2012, there were no borrowings under the revolving credit facility with CDN $15,000 available for borrowing

 

 

(i)

Includes capital leases.