PART I - FINANCIAL INFORMATION This section presents Griffon Corporation's unaudited condensed consolidated financial statements and management's discussion and analysis of financial condition and results of operations [Item 1 – Financial Statements](index=3&type=section&id=Item%201%20%E2%80%93%20Financial%20Statements) This section presents Griffon Corporation's unaudited condensed consolidated financial statements and related notes, highlighting a net loss due to impairment charges and a decrease in shareholders' equity [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section provides a snapshot of Griffon Corporation's financial position at specific dates, detailing assets, liabilities, and shareholders' equity Condensed Consolidated Balance Sheet Highlights (in thousands) | Metric | June 30, 2025 | September 30, 2024 | | :-------------------------- | :-------------- | :----------------- | | Total Current Assets | $912,292 | $929,476 | | Property, Plant and Equipment, net | $292,385 | $288,297 | | Goodwill | $192,917 | $329,393 | | Intangible Assets, net | $493,843 | $618,782 | | Total Assets | $2,087,320 | $2,370,954 | | Total Current Liabilities | $337,961 | $348,990 | | Long-Term Debt, net | $1,442,855 | $1,515,897 | | Total Liabilities | $2,023,420 | $2,146,066 | | Total Shareholders' Equity | $63,900 | $224,888 | * Total Assets **decreased by $283,634 thousand (11.96%)** from September 30, 2024, to June 30, 2025, primarily due to reductions in goodwill and intangible assets[9](index=9&type=chunk) * Total Shareholders' Equity **significantly decreased by $160,988 thousand (71.59%)** from September 30, 2024, to June 30, 2025[9](index=9&type=chunk) [Condensed Consolidated Statement of Shareholders' Equity](index=4&type=section&id=Condensed%20Consolidated%20Statement%20of%20Shareholders'%20Equity) This statement details changes in Griffon Corporation's equity over time, reflecting net income, dividends, and share repurchases Shareholders' Equity Changes (in thousands) | Item | Nine Months Ended June 30, 2025 | | :-------------------------------- | :------------------------------ | | Balance at September 30, 2024 | $224,888 | | Net income (loss) | $70,851 (Q1), $56,762 (Q2), $(120,139) (Q3) | | Dividend | $(8,196) (Q1), $(8,494) (Q2), $(8,465) (Q3) | | Common stock acquired | $(42,963) (Q1), $(30,827) (Q2), $(40,652) (Q3) | | Other comprehensive income (loss) | $(17,699) (Q1), $2,417 (Q2), $12,446 (Q3) | | Balance at June 30, 2025 | $63,900 | * The net loss of **$120,139 thousand** for the quarter ended June 30, 2025, significantly contributed to the decrease in shareholders' equity[12](index=12&type=chunk) * Common stock acquired (repurchases) totaled **$114,442 thousand** for the nine months ended June 30, 2025, further reducing equity[12](index=12&type=chunk)[83](index=83&type=chunk)[197](index=197&type=chunk) [Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income%20(Loss)) This statement presents Griffon Corporation's financial performance, including revenues, expenses, net income or loss, and other comprehensive income Consolidated Statements of Operations Highlights (in thousands, except per share data) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Nine Months Ended June 30, 2025 | Nine Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :------------------------------ | :------------------------------ | | Revenue | $613,627 | $647,814 | $1,857,744 | $1,963,847 | | Gross profit | $265,248 | $249,149 | $781,735 | $756,455 | | Goodwill and intangible asset impairments | $243,612 | — | $243,612 | — | | Income (loss) from operations | $(126,001) | $89,339 | $87,258 | $286,625 | | Net income (loss) | $(120,139) | $41,086 | $7,474 | $147,406 | | Basic earnings (loss) per common share | $(2.65) | $0.87 | $0.16 | $3.08 | | Diluted earnings (loss) per common share | $(2.65) | $0.84 | $0.16 | $2.94 | | Dividends paid per common share | $0.18 | $0.15 | $0.54 | $0.45 | * Revenue **decreased by 5.28%** for the three months and **5.40%** for the nine months ended June 30, 2025, compared to the prior year periods[18](index=18&type=chunk) * The company reported a net loss of **$120,139 thousand** for the three months ended June 30, 2025, primarily due to **$243,612 thousand** in goodwill and intangible asset impairments[18](index=18&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This statement summarizes Griffon Corporation's cash inflows and outflows from operating, investing, and financing activities Consolidated Statements of Cash Flows Highlights (in thousands) | Cash Flow Activity | Nine Months Ended June 30, 2025 | Nine Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------ | :------------------------------ | | Net cash provided by operating activities | $282,481 | $307,938 | | Net cash used in investing activities | $(21,972) | $(34,277) | | Net cash used in financing activities | $(269,538) | $(238,712) | | Net increase (decrease) in cash and equivalents | $(7,159) | $30,563 | | Cash and equivalents at end of period | $107,279 | $133,452 | * Net cash provided by operating activities **decreased by $25,457 thousand (8.26%)** for the nine months ended June 30, 2025, primarily due to an increase in net working capital[21](index=21&type=chunk)[191](index=191&type=chunk) * Cash used in financing activities **increased by $30,826 thousand (12.91%)** for the nine months ended June 30, 2025, driven by share repurchases and net repayments of long-term debt[21](index=21&type=chunk)[193](index=193&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) These notes provide detailed explanations and additional information supporting the condensed consolidated financial statements [NOTE 1 – DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION](index=8&type=section&id=NOTE%201%20%E2%80%93%20DESCRIPTION%20OF%20BUSINESS%20AND%20BASIS%20OF%20PRESENTATION) This note describes Griffon Corporation's diversified business segments and the basis for preparing its financial statements * Griffon Corporation is a diversified management and holding company operating through two reportable segments: Home and Building Products (HBP) and Consumer and Professional Products (CPP)[22](index=22&type=chunk)[24](index=24&type=chunk)[27](index=27&type=chunk) * HBP is the largest manufacturer and marketer of garage doors and rolling steel doors in North America (Clopay, Ideal, Holmes, Cornell, Cookson brands)[27](index=27&type=chunk) * CPP is a global provider of branded consumer and professional tools, fans, home storage, and outdoor lifestyle products (AMES, Hunter, True Temper, ClosetMaid brands)[27](index=27&type=chunk) [NOTE 2 – FAIR VALUE MEASUREMENTS](index=9&type=section&id=NOTE%202%20%E2%80%93%20FAIR%20VALUE%20MEASUREMENTS) This note details the fair value measurements of financial instruments, including debt and derivative contracts, using a three-level hierarchy * Fair values of 2028 Senior Notes (**$971,120 thousand**) and Term Loan B facility (**$451,564 thousand**) at June 30, 2025, were based on Level 1 inputs (quoted market prices)[31](index=31&type=chunk) * Foreign currency exchange contracts for Australian Dollar (**$38,000 thousand**) and Chinese Yuan (**$19,000 thousand**) qualified for hedge accounting (Level 2 inputs), with deferred gains in AOCI[34](index=34&type=chunk)[35](index=35&type=chunk)[38](index=38&type=chunk) * Canadian Dollar contracts (**$8,565 thousand**) did not qualify for hedge accounting, resulting in fair value losses recorded to Other liabilities and Other income[39](index=39&type=chunk) [NOTE 3 – REVENUE](index=10&type=section&id=NOTE%203%20%E2%80%93%20REVENUE) This note outlines Griffon Corporation's revenue recognition policies, primarily recognizing revenue upon product shipment * Revenue is recognized at a point in time when control of promised products is transferred to the customer, generally upon shipment[41](index=41&type=chunk) [NOTE 4 – ACQUISITIONS](index=10&type=section&id=NOTE%204%20%E2%80%93%20ACQUISITIONS) This note details recent acquisitions, including AMES's purchase of Pope, expanding product portfolios and market presence * On July 1, 2024, AMES (CPP subsidiary) acquired Pope, an Australian residential watering products provider, for approximately **$14,500 thousand** in cash[44](index=44&type=chunk) * The Pope acquisition expanded AMES's product portfolio in the Australian market and generated over **$25,000 thousand** in revenue in its first full year[44](index=44&type=chunk)[146](index=146&type=chunk)[172](index=172&type=chunk) [NOTE 5 – INVENTORIES](index=11&type=section&id=NOTE%205%20%E2%80%93%20INVENTORIES) This note provides a breakdown of Griffon Corporation's inventory components and any related impairment charges Inventory Components (in thousands) | Component | June 30, 2025 | September 30, 2024 | | :-------------------- | :-------------- | :----------------- | | Raw materials and supplies | $91,659 | $92,366 | | Work in process | $13,581 | $13,923 | | Finished goods | $340,673 | $319,200 | | Total | $445,913 | $425,489 | * No inventory impairment charges were recorded during the nine months ended June 30, 2025, compared to **$22,979 thousand** in the prior year period due to restructuring[46](index=46&type=chunk) [NOTE 6 – PROPERTY, PLANT AND EQUIPMENT](index=11&type=section&id=NOTE%206%20%E2%80%93%20PROPERTY,%20PLANT%20AND%20EQUIPMENT) This note details Griffon Corporation's property, plant, and equipment, including depreciation policies and assets held for sale Property, Plant and Equipment, Net (in thousands) | Component | June 30, 2025 | September 30, 2024 | | :-------------------------- | :-------------- | :----------------- | | Land, building and building improvements | $156,690 | $153,076 | | Machinery and equipment | $496,265 | $472,030 | | Leasehold improvements | $37,813 | $37,833 | | Accumulated depreciation | $(398,383) | $(374,642) | | Total | $292,385 | $288,297 | * Depreciation and amortization expense for property, plant and equipment increased to **$9,974 thousand** (Q3 2025) from **$9,389 thousand** (Q3 2024) and to **$29,682 thousand** (9M 2025) from **$28,155 thousand** (9M 2024)[48](index=48&type=chunk) * Net book value of properties classified as held for sale (due to CPP's global sourcing strategy) was **$5,289 thousand** at June 30, 2025[49](index=49&type=chunk) [NOTE 7 – CREDIT LOSSES](index=12&type=section&id=NOTE%207%20%E2%80%93%20CREDIT%20LOSSES) This note outlines the allowance for doubtful accounts and the provision for expected credit losses Allowance for Doubtful Accounts Roll-Forward (in thousands) | Item | Nine Months Ended June 30, 2025 | Nine Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------ | :------------------------------ | | Beginning Balance, October 1 | $10,986 | $11,264 | | Provision for expected credit losses | $731 | $874 | | Amounts written off | $(569) | $(1,155) | | Other, primarily foreign currency translation | $337 | $26 | | Ending Balance, June 30 | $11,485 | $11,009 | * The allowance for doubtful accounts increased to **$11,485 thousand** at June 30, 2025, from **$10,986 thousand** at October 1, 2024[54](index=54&type=chunk) [NOTE 8 – GOODWILL AND OTHER INTANGIBLES](index=13&type=section&id=NOTE%208%20%E2%80%93%20GOODWILL%20AND%20OTHER%20INTANGIBLES) This note details goodwill and intangible asset balances, including significant impairment charges recorded for the Hunter Fan reporting unit * A pre-tax, non-cash goodwill impairment charge of **$136,612 thousand** was recorded for the Hunter Fan reporting unit (CPP segment) for the quarter ended June 30, 2025[55](index=55&type=chunk) * An additional pre-tax, non-cash impairment charge of **$107,000 thousand** was recorded for Hunter Fan's indefinite-lived intangible asset (trademark)[57](index=57&type=chunk) Goodwill by Segment (in thousands) | Segment | At September 30, 2024 | Impairment Charges | At June 30, 2025 | | :-------------------------- | :-------------------- | :----------------- | :--------------- | | Home and Building Products | $191,253 | — | $191,253 | | Consumer and Professional Products | $138,140 | $(136,612) | $1,664 | | Total | $329,393 | $(136,612) | $192,917 | [NOTE 9 – INCOME TAXES](index=14&type=section&id=NOTE%209%20%E2%80%93%20INCOME%20TAXES) This note provides information on Griffon Corporation's income tax provisions, effective tax rates, and the impact of recent tax legislation * The Company recognized a tax benefit of **$29,061 thousand** on a loss before taxes of **$149,200 thousand** for the quarter ended June 30, 2025[59](index=59&type=chunk) * Excluding special items, the effective tax rates were **27.4%** for Q3 2025 and **27.9%** for Q3 2024[59](index=59&type=chunk) * The recently enacted One Big Beautiful Bill Act (OBBBA) is not expected to have a material impact on the Company's financial position or results of operations[61](index=61&type=chunk) [NOTE 10 – LONG-TERM DEBT](index=15&type=section&id=NOTE%2010%20%E2%80%93%20LONG-TERM%20DEBT) This note details Griffon Corporation's long-term debt obligations, including senior notes, term loans, and revolving credit facilities Long-Term Debt (in thousands) | Debt Type | June 30, 2025 Outstanding Balance | September 30, 2024 Outstanding Balance | | :-------------------- | :-------------------------------- | :----------------------------------- | | Senior notes due 2028 | $974,775 | $974,775 | | Term Loan B due 2029 | $451,000 | $457,000 | | Revolver due 2028 | $37,500 | $107,500 | | Total Gross Debt | $1,463,569 | $1,539,685 | * Interest expense for the nine months ended June 30, 2025, was **$72,954 thousand**, down from **$78,472 thousand** in the prior year period[65](index=65&type=chunk) * The Term Loan B facility was favorably repriced in June 2024, reducing the SOFR margin by **0.25%** and eliminating the SOFR floor[68](index=68&type=chunk)[202](index=202&type=chunk) [NOTE 11 – SHAREHOLDERS' EQUITY AND EQUITY COMPENSATION](index=18&type=section&id=NOTE%2011%20%E2%80%93%20SHAREHOLDERS'%20EQUITY%20AND%20EQUITY%20COMPENSATION) This note describes changes in shareholders' equity, dividend payments, share repurchases, and equity compensation plans * The Company paid quarterly cash dividends of **$0.18 per share** for the nine months ended June 30, 2025, an increase from **$0.15 per share** in fiscal 2024[18](index=18&type=chunk)[74](index=74&type=chunk)[195](index=195&type=chunk) * The ESOP was frozen as of September 30, 2024, with the final loan payment made in Q1 2025, leading to a decrease in ESOP expense[76](index=76&type=chunk)[182](index=182&type=chunk) * Share repurchases for the nine months ended June 30, 2025, totaled **1,611,454 shares** for **$113,125 thousand**, with **$319,568 thousand** remaining under the authorized program[83](index=83&type=chunk)[197](index=197&type=chunk) [NOTE 12 – EARNINGS PER SHARE (EPS)](index=20&type=section&id=NOTE%2012%20%E2%80%93%20EARNINGS%20PER%20SHARE%20(EPS)) This note presents the calculation of basic and diluted earnings per share, reflecting the company's profitability per share Earnings Per Share (EPS) (in thousands, except per share data) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Nine Months Ended June 30, 2025 | Nine Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :------------------------------ | :------------------------------ | | Basic earnings (loss) per common share | $(2.65) | $0.87 | $0.16 | $3.08 | | Diluted earnings (loss) per common share | $(2.65) | $0.84 | $0.16 | $2.94 | | Weighted average shares outstanding - basic | 45,320 | 47,034 | 45,505 | 47,921 | | Weighted average shares outstanding - diluted | 45,320 | 48,851 | 46,911 | 50,085 | * Basic and diluted EPS for the three months ended June 30, 2025, were **$(2.65)**, reflecting the net loss for the period[18](index=18&type=chunk) [NOTE 13 – REPORTABLE SEGMENTS](index=21&type=section&id=NOTE%2013%20%E2%80%93%20REPORTABLE%20SEGMENTS) This note provides financial information by Griffon Corporation's reportable segments, Home and Building Products and Consumer and Professional Products Revenue by Reportable Segment (in thousands) | Segment | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Nine Months Ended June 30, 2025 | Nine Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :------------------------------ | :------------------------------ | | Home and Building Products | $400,244 | $394,214 | $1,163,893 | $1,182,067 | | Consumer and Professional Products | $213,383 | $253,600 | $693,851 | $781,780 | | Total revenue | $613,627 | $647,814 | $1,857,744 | $1,963,847 | Segment Adjusted EBITDA (in thousands) | Segment | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Nine Months Ended June 30, 2025 | Nine Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :------------------------------ | :------------------------------ | | Home and Building Products | $128,755 | $118,516 | $365,231 | $372,159 | | Consumer and Professional Products | $19,222 | $22,263 | $61,140 | $47,923 | | Total Segment Adjusted EBITDA | $147,977 | $140,779 | $426,371 | $420,082 | * HBP revenue increased **2%** for the quarter due to favorable price and mix, while CPP revenue decreased **16%** due to reduced consumer demand and tariffs[162](index=162&type=chunk)[167](index=167&type=chunk) [NOTE 14 – EMPLOYEE BENEFIT PLANS](index=24&type=section&id=NOTE%2014%20%E2%80%93%20EMPLOYEE%20BENEFIT%20PLANS) This note details information regarding Griffon Corporation's employee benefit plans, including pension plan terminations * The Hunter Fan Pension Plan was terminated effective April 30, 2024, and was fully funded at the time of termination[101](index=101&type=chunk) * Griffon expects to recognize a gain of approximately **$2,300 thousand**, net of excise taxes, on the termination of the Plan in the fourth quarter of 2025[101](index=101&type=chunk) [NOTE 15 – RECENT ACCOUNTING PRONOUNCEMENTS](index=25&type=section&id=NOTE%2015%20%E2%80%93%20RECENT%20ACCOUNTING%20PRONOUNCEMENTS) This note discusses the impact of recently issued accounting pronouncements on Griffon Corporation's financial reporting * ASU No 2023-07 (Segment Reporting) is effective for fiscal year 2025, expanding disclosures for reportable segments[103](index=103&type=chunk) * ASU No 2023-09 (Income Taxes) is effective for fiscal year 2026, requiring additional disaggregated income tax disclosures, but is not expected to have a material impact[104](index=104&type=chunk) * ASU 2024-03 (Income Statement—Expense Disaggregation) is effective for fiscal year 2027, requiring disclosures on specific costs, and is not expected to have a material impact[105](index=105&type=chunk) [NOTE 16 – DISCONTINUED OPERATIONS](index=25&type=section&id=NOTE%2016%20%E2%80%93%20DISCONTINUED%20OPERATIONS) This note provides information on assets and liabilities related to Griffon Corporation's discontinued operations Discontinued Operations Assets and Liabilities (in thousands) | Item | June 30, 2025 | September 30, 2024 | | :-------------------------------- | :-------------- | :----------------- | | Total assets of discontinued operations | $6,015 | $4,065 | | Total liabilities of discontinued operations | $9,035 | $7,768 | * Liabilities for discontinued operations primarily relate to insurance claims, income taxes, product liability, warranty, and environmental reserves[106](index=106&type=chunk) * No reported revenues or costs for discontinued operations in the nine months ended June 30, 2025 and 2024[106](index=106&type=chunk) [NOTE 17 – RESTRUCTURING CHARGES](index=26&type=section&id=NOTE%2017%20%E2%80%93%20RESTRUCTURING%20CHARGES) This note details restructuring charges incurred by Griffon Corporation, primarily related to the CPP global sourcing expansion initiative * CPP successfully completed its global sourcing expansion initiative by September 30, 2024, ahead of schedule[107](index=107&type=chunk) * The initiative resulted in a facility footprint reduction of approximately **1.2 million square feet** and a headcount reduction of approximately **600**[108](index=108&type=chunk) * Total charges for the initiative were **$133,777 thousand**, including **$51,082 thousand** in cash charges and **$82,695 thousand** in non-cash charges[110](index=110&type=chunk) [NOTE 18 – OTHER INCOME (EXPENSE)](index=27&type=section&id=NOTE%2018%20%E2%80%93%20OTHER%20INCOME%20(EXPENSE)) This note provides a breakdown of other income and expenses, including currency exchange, benefit plan income, and royalty income Other Income (Expense) (in thousands) | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Nine Months Ended June 30, 2025 | Nine Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :------------------------------ | :------------------------------ | | Net currency exchange transaction losses (gains) | $163 (losses) | $120 (losses) | $54 (gains) | $72 (gains) | | Net periodic benefit plan income (expense) | $302 (income) | $(34) (expense) | $902 (income) | $(103) (expense) | | Net investment income (loss) | $(424) (loss) | $10 (income) | $(370) (loss) | $95 (income) | | Royalty income | $501 | $549 | $1,647 | $1,649 | | Total Other, net | $247 | $350 | $2,591 | $1,608 | [NOTE 19 – WARRANTY LIABILITY](index=28&type=section&id=NOTE%2019%20%E2%80%93%20WARRANTY%20LIABILITY) This note details Griffon Corporation's warranty liabilities, including changes in estimates and actual costs incurred * The short-term warranty liability decreased to **$10,706 thousand** at June 30, 2025, from **$13,050 thousand** at September 30, 2024[119](index=119&type=chunk) * The long-term warranty liability remained stable at **$1,239 thousand** at both June 30, 2025, and September 30, 2024[119](index=119&type=chunk) Warranty Liability Changes (in thousands) | Item | Nine Months Ended June 30, 2025 | Nine Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------ | :------------------------------ | | Balance, beginning of period | $13,050 | $20,781 | | Warranties issued and changes in estimated pre-existing warranties | $14,328 | $17,760 | | Actual warranty costs incurred | $(16,672) | $(22,888) | | Balance, end of period | $10,706 | $15,653 | [NOTE 20 – OTHER COMPREHENSIVE INCOME (LOSS)](index=29&type=section&id=NOTE%2020%20%E2%80%93%20OTHER%20COMPREHENSIVE%20INCOME%20(LOSS)) This note presents components of other comprehensive income or loss, such as foreign currency translation adjustments and cash flow hedges Total Other Comprehensive Income (Loss), Net of Taxes (in thousands) | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Nine Months Ended June 30, 2025 | Nine Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :------------------------------ | :------------------------------ | | Foreign currency translation adjustments | $12,244 | $(827) | $(4,804) | $2,212 | | Pension and other defined benefit plans | $897 | $532 | $1,493 | $1,595 | | Cash flow hedges | $(695) | $(927) | $475 | $550 | | Total | $12,446 | $(1,222) | $(2,836) | $4,357 | * For Q3 2025, total other comprehensive income was **$12,446 thousand**, primarily driven by foreign currency translation gains due to the strengthening of the Euro, British Pound, Australian Dollar, and Canadian Dollar[121](index=121&type=chunk)[183](index=183&type=chunk) [NOTE 21 — LEASES](index=30&type=section&id=NOTE%2021%20%E2%80%94%20LEASES) This note provides details on Griffon Corporation's operating leases, including right-of-use assets, lease liabilities, and lease costs * Operating right-of-use assets were **$162,819 thousand** and total operating lease liabilities were **$174,210 thousand** at June 30, 2025[128](index=128&type=chunk) * The weighted-average remaining lease term for operating leases is **6.7 years**, with a weighted-average discount rate of **6.37%** at June 30, 2025[131](index=131&type=chunk) Operating Lease Costs (in thousands) | Component | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Nine Months Ended June 30, 2025 | Nine Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :------------------------------ | :------------------------------ | | Fixed | $11,878 | $11,555 | $35,463 | $34,992 | | Variable | $2,586 | $2,472 | $7,922 | $7,382 | | Short-term | $1,032 | $808 | $3,467 | $3,470 | | Total | $15,496 | $14,835 | $46,852 | $45,844 | [NOTE 22 — COMMITMENTS AND CONTINGENCIES](index=32&type=section&id=NOTE%2022%20%E2%80%94%20COMMITMENTS%20AND%20CONTINGENCIES) This note outlines Griffon Corporation's commitments and contingencies, including environmental liabilities and legal matters * The Peekskill Site is undergoing a Remedial Investigation/Feasibility Study (RI/FS) due to chlorinated solvents and metals contamination, with costs paid by an insurer[132](index=132&type=chunk)[133](index=133&type=chunk)[134](index=134&type=chunk) * The Memphis, TN site has potential PCB contamination, and the TDEC recommended EPA inclusion on the National Priorities List, with liability deemed probable[135](index=135&type=chunk)[136](index=136&type=chunk)[137](index=137&type=chunk) * Management believes the resolution of these legal and environmental matters will not have a material adverse effect on Griffon's consolidated financial position, results of operations, or cash flows[140](index=140&type=chunk) [Item 2 – Management's Discussion and Analysis of Financial Condition and Results of Operations](index=34&type=section&id=Item%202%20%E2%80%93%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's analysis of Griffon's financial performance, condition, and outlook, covering business strategy, segment results, liquidity, and critical accounting policies [BUSINESS](index=34&type=section&id=BUSINESS) This section describes Griffon Corporation's diversified business model, strategic focus, and operational segments * Griffon Corporation is a diversified management and holding company focused on maintaining leading market positions through innovative, branded products and strategic acquisitions[141](index=141&type=chunk)[142](index=142&type=chunk)[144](index=144&type=chunk) * The company operates through two segments: Home and Building Products (HBP) and Consumer and Professional Products (CPP)[149](index=149&type=chunk)[150](index=150&type=chunk) * Recent strategic transformations include divesting non-core businesses (specialty plastics, defense electronics) and expanding core segments through acquisitions like CornellCookson, Hunter Fan, ClosetMaid, and Pope[145](index=145&type=chunk)[146](index=146&type=chunk) [OVERVIEW](index=36&type=section&id=OVERVIEW) This section provides a high-level financial overview, highlighting key consolidated metrics and the impact of impairment charges Consolidated Financial Overview (in thousands, except per share data) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Nine Months Ended June 30, 2025 | Nine Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :------------------------------ | :------------------------------ | | Revenue | $613,627 | $647,814 | $1,857,744 | $1,963,847 | | Net income (loss) | $(120,139) | $41,086 | $7,474 | $147,406 | | Basic EPS | $(2.65) | $0.87 | $0.16 | $3.08 | | Adjusted net income | $69,247 | $60,526 | $192,719 | $183,303 | | Adjusted EPS | $1.50 | $1.24 | $4.11 | $3.66 | * The net loss for Q3 2025 was primarily driven by **$243,612 thousand** in goodwill and intangible asset impairments[151](index=151&type=chunk)[155](index=155&type=chunk) * Adjusted net income for Q3 2025 increased to **$69,247 thousand** from **$60,526 thousand** in the prior year quarter, and adjusted EPS increased to **$1.50** from **$1.24**[152](index=152&type=chunk)[157](index=157&type=chunk) [RESULTS OF OPERATIONS](index=38&type=section&id=RESULTS%20OF%20OPERATIONS) This section analyzes the financial performance of Griffon Corporation's Home and Building Products and Consumer and Professional Products segments * Home and Building Products (HBP) revenue increased **2%** for the quarter ended June 30, 2025, due to favorable price and mix, while adjusted EBITDA increased **9%**[162](index=162&type=chunk)[163](index=163&type=chunk) * Consumer and Professional Products (CPP) revenue decreased **16%** for the quarter, primarily due to reduced consumer demand and disrupted customer ordering patterns from increased tariffs[167](index=167&type=chunk) * CPP adjusted EBITDA for the nine months ended June 30, 2025, increased **27.6%** to **$61,140 thousand**, benefiting from the U.S. global sourcing expansion initiative and increased volume in Australia[170](index=170&type=chunk) * Goodwill and intangible asset impairments of **$243,612 thousand** were recorded for the Hunter Fan reporting unit in Q3 2025[174](index=174&type=chunk) [LIQUIDITY AND CAPITAL RESOURCES](index=42&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) This section discusses Griffon Corporation's cash position, debt levels, and capital management strategies * Griffon had **$107,279 thousand** in cash and equivalents and **$449,510 thousand** available under its **$500,000 thousand** revolving credit facility at June 30, 2025[190](index=190&type=chunk)[199](index=199&type=chunk)[207](index=207&type=chunk) * Net cash provided by operating activities for the nine months ended June 30, 2025, was **$282,481 thousand**, a decrease from **$307,938 thousand** in the prior year[191](index=191&type=chunk) * Total gross debt decreased to **$1,463,569 thousand** at June 30, 2025, from **$1,539,685 thousand** at September 30, 2024, with a Net Debt to EBITDA leverage ratio of **2.5x**[199](index=199&type=chunk)[213](index=213&type=chunk) * The Board approved an additional **$400,000 thousand** increase to its share repurchase authorization in November 2024, with **$319,568 thousand** remaining available[197](index=197&type=chunk) [CRITICAL ACCOUNTING POLICIES](index=46&type=section&id=CRITICAL%20ACCOUNTING%20POLICIES) This section outlines the significant estimates and judgments used in preparing Griffon Corporation's financial statements * The preparation of financial statements requires significant estimates and judgments, including allowances for credit losses, inventory valuation, goodwill and intangible asset valuations, and various reserves[221](index=221&type=chunk)[26](index=26&type=chunk)[29](index=29&type=chunk) * There have been no changes in Griffon's critical accounting policies from September 30, 2024[221](index=221&type=chunk) [RECENT ACCOUNTING PRONOUNCEMENTS](index=46&type=section&id=RECENT%20ACCOUNTING%20PRONOUNCEMENTS) This section references the discussion of new accounting standards and their potential impact on Griffon Corporation * This section refers to the discussion of recent accounting pronouncements in the Notes to Condensed Consolidated Financial Statements (Note 15)[223](index=223&type=chunk) [FORWARD-LOOKING STATEMENTS](index=46&type=section&id=FORWARD-LOOKING%20STATEMENTS) This section provides cautionary statements regarding forward-looking information, highlighting inherent risks and uncertainties * The report contains forward-looking statements regarding future financial performance, operations, and economic conditions, which are subject to inherent risks and uncertainties[224](index=224&type=chunk)[225](index=225&type=chunk) * Key risks include economic conditions, ability to achieve savings, competition, raw material costs, customer demand, political events, credit ratings, foreign exchange fluctuations, and regulatory changes[225](index=225&type=chunk) * Readers are cautioned not to place undue reliance on these statements, and Griffon undertakes no obligation to update them[225](index=225&type=chunk) [Item 3 - Quantitative and Qualitative Disclosures about Market Risk](index=47&type=section&id=Item%203%20-%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) Griffon manages market risks related to changes in interest rates, foreign currency rates, and commodity prices, concluding that a 100 basis point change or 10% currency fluctuation would not materially impact financials * Griffon's exposure to market risk primarily relates to variable interest rate debt and foreign currency exchange rates[226](index=226&type=chunk)[227](index=227&type=chunk)[229](index=229&type=chunk) * A **100 basis point change** in SONIA, SOFR, BBSY, or CORRA (variable interest rates) would not have a material impact on Griffon's results of operations or liquidity[228](index=228&type=chunk) * A change of **10% or less** in the value of all applicable foreign currencies would not have a material effect on Griffon's financial position and cash flows[229](index=229&type=chunk) [Item 4 - Controls & Procedures](index=48&type=section&id=Item%204%20-%20Controls%20%26%20Procedures) Griffon's disclosure controls and procedures were evaluated and deemed effective at a reasonable assurance level as of June 30, 2025, with no material changes in internal control over financial reporting * Griffon's disclosure controls and procedures were evaluated and deemed effective at a reasonable assurance level as of June 30, 2025[230](index=230&type=chunk) * No material changes in internal control over financial reporting occurred during the three months ended June 30, 2025[231](index=231&type=chunk) * The company acknowledges that a control system, no matter how well designed, cannot provide absolute assurance[232](index=232&type=chunk) PART II – OTHER INFORMATION This section provides additional information not covered in the financial statements, including legal proceedings, risk factors, and equity matters [Item 1 – Legal Proceedings](index=48&type=section&id=Item%201%20%E2%80%93%20Legal%20Proceedings) The company reported no legal proceedings under this item * No legal proceedings were reported[234](index=234&type=chunk) [Item 1A – Risk Factors](index=48&type=section&id=Item%201A%20%E2%80%93%20Risk%20Factors) This section directs readers to comprehensive risk factors in the Annual Report and highlights an updated risk concerning international sourcing from China * Readers are directed to Item 1A in the Annual Report on Form 10-K for September 30, 2024, for a comprehensive list of risk factors[235](index=235&type=chunk) * An updated risk factor, 'CPP is subject to risks from sourcing from international locations, especially China,' is highlighted from the Quarterly Report on Form 10-Q for March 31, 2025[235](index=235&type=chunk) * The company acknowledges that additional risks not currently known or deemed immaterial may also adversely affect its business[235](index=235&type=chunk) [Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds](index=49&type=section&id=Item%202%20%E2%80%93%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Griffon repurchased 581,082 shares of common stock during the quarter, with $319,568 thousand remaining under the repurchase program * The company repurchased **581,082 shares** of common stock during the quarter ended June 30, 2025[237](index=237&type=chunk) * The average price paid per share for repurchases during the quarter was **$69.28**[237](index=237&type=chunk) * As of June 30, 2025, **$319,568 thousand** remained available for common stock purchases under the Board-authorized repurchase program[237](index=237&type=chunk) [Item 3 – Defaults Upon Senior Securities](index=49&type=section&id=Item%203%20%E2%80%93%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities * No defaults upon senior securities were reported[238](index=238&type=chunk) [Item 4 – Mine Safety Disclosures](index=49&type=section&id=Item%204%20%E2%80%93%20Mine%20Safety%20Disclosures) No mine safety disclosures were reported * No mine safety disclosures were reported[238](index=238&type=chunk) [Item 5 – Other Information](index=50&type=section&id=Item%205%20%E2%80%93%20Other%20Information) No Rule 10b5-1 trading plans were adopted or terminated, and a retiree medical arrangement was approved for four senior executives * No Rule 10b5-1 trading plans were adopted or terminated by directors or executive officers during the quarter ended June 30, 2025[240](index=240&type=chunk) * A retiree medical arrangement (RMA) was approved for four senior executives, providing post-retirement medical coverage and up to **$35,000 annually** for qualified medical expenses (indexed **3% annually**)[241](index=241&type=chunk)[242](index=242&type=chunk) * Vesting for the RMA is contingent on age, years of service, and continued employment, with executives meeting requirements in August 2026[241](index=241&type=chunk) [Item 6 – Exhibits](index=51&type=section&id=Item%206%20%E2%80%93%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including various certifications and XBRL-related documents * The exhibits include certifications pursuant to Rule 13a-14(a) (Exhibits 31.1, 31.2) and 18 U.S.C Section 1350 (Exhibit 32)[244](index=244&type=chunk) * XBRL Instance Document and Taxonomy Extension Documents (Schema, Calculation, Definitions, Labels, Presentations) are also filed as exhibits[244](index=244&type=chunk) [Signatures](index=52&type=section&id=Signatures) The report is signed on behalf of Griffon Corporation by its Executive Vice President and Chief Financial Officer and Vice President and Chief Accounting Officer * The report was signed by Brian G Harris, Executive Vice President and Chief Financial Officer, and W Christopher Durborow, Vice President and Chief Accounting Officer[248](index=248&type=chunk) * The signing date for the report was August 6, 2025[248](index=248&type=chunk)

Financial Performance - Griffon reported quarterly earnings of $1.5 per share, matching the Zacks Consensus Estimate, and an increase from $1.24 per share a year ago [1] - The company posted revenues of $613.63 million for the quarter ended June 2025, missing the Zacks Consensus Estimate by 5.61%, and down from $647.81 million year-over-year [2] - Over the last four quarters, Griffon has surpassed consensus EPS estimates three times but has topped consensus revenue estimates only once [2] Stock Performance and Outlook - Griffon shares have increased approximately 15.5% since the beginning of the year, outperforming the S&P 500's gain of 7.1% [3] - The company's future stock performance will largely depend on management's commentary during the earnings call and the earnings outlook [4][6] - The current consensus EPS estimate for the upcoming quarter is $1.66 on revenues of $662.28 million, and for the current fiscal year, it is $5.70 on revenues of $2.56 billion [7] Industry Context - The Diversified Operations industry, to which Griffon belongs, is currently ranked in the top 20% of over 250 Zacks industries, indicating a favorable outlook [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact Griffon's stock performance [5]

Financial Data and Key Metrics Changes - Third quarter revenue decreased by 5% to $614 million, while adjusted EBITDA before unallocated amounts increased by 5% to $148 million, resulting in an EBITDA margin of 24.1%, an increase of 240 basis points [10][12] - Gross profit on a GAAP basis for the quarter was $265 million, compared to $249 million in the prior year quarter, with normalized gross margin increasing by 230 basis points to 43.2% [10][11] - The company recorded a pretax charge of $244 million for impairment on goodwill and investment lives related to the acquisition of Hunter Fan due to weak consumer demand and increased tariffs [11] Business Line Data and Key Metrics Changes - Home and Building Products (HBP) revenue increased by 2% to $400 million, with an adjusted EBITDA of $129 million, up 9% year-over-year, driven by favorable price and mix [13] - Consumer and Professional Products (CPP) revenue decreased by 16% to $213 million, primarily due to a 19% decrease in volume from weak consumer demand, although EBITDA decreased by 14% to $19 million [13][14] Market Data and Key Metrics Changes - The company reaffirmed full-year EBITDA guidance of $575 million to $600 million while reducing revenue expectations by $100 million to $2.5 billion due to ongoing consumer weakness in the CPP segment [6][15] - The company noted a 1% unfavorable impact from foreign currency [14] Company Strategy and Development Direction - The company is committed to a capital allocation strategy that includes investing in businesses, opportunistically repurchasing shares, and reducing debt, having returned $145 million to shareholders through dividends and stock buybacks [18] - The company aims for long-term margin targets of 15% in the CPP segment and over 30% in the HBP segment, with current expectations for HBP margins exceeding 31% [16][39] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the recovery of the CPP segment, indicating that consumer confidence may return once tariffs stabilize [33][35] - The company expects to generate over $1 billion in free cash flow during the fiscal year and the next two years, despite current challenges [18] Other Important Information - The company repurchased $40 million of stock during the third quarter, reducing outstanding shares by 18.4% since April 2023 [6][7] - A quarterly dividend of $0.18 per share was authorized, marking the 56th consecutive quarterly dividend [8] Q&A Session Summary Question: Can you discuss the pricing strategy in the CPP segment and retailer reactions to tariffs? - Management indicated that they have implemented price increases in certain instances but could not provide detailed insights due to sensitive customer discussions [23] Question: What are the sell-through trends at retail? - Management noted reduced point-of-sale activity, particularly in the Northeast, influenced by weak consumer demand and concerns about tariffs and inflation [24] Question: How is pricing realization tracking in the HBP segment? - Pricing realization is generally tracking in line with expectations, and price increases are being accepted by the market [29] Question: What is the outlook for demand recovery in the CPP segment? - Management stated it is difficult to project when consumer demand will rebound, but they expect recovery once tariffs stabilize [33] Question: What are the long-term margin targets for the CPP segment? - The long-term target for CPP margins is 15%, but achieving this will require a return of consumer demand [44] Question: How is the global sourcing initiative progressing? - Management confirmed that all actions related to global sourcing are complete, and they have flexibility in sourcing locations [36]

Financial Data and Key Metrics Changes - Third quarter revenue decreased by 5% to $614 million, while adjusted EBITDA before unallocated amounts increased by 5% to $148 million, resulting in an EBITDA margin of 24.1%, an increase of 240 basis points [8][11] - GAAP net loss for the third quarter was $120 million or $2.65 per share, compared to net income of $41 million or $0.84 per share in the prior year quarter [11] - Free cash flow during the quarter was $115 million, slightly down from $120 million in the prior year quarter [11] Business Line Data and Key Metrics Changes - Home and Building Products (HBP) revenue increased by 2% to $400 million, with an adjusted EBITDA of $129 million, up 9% year-over-year [12] - Consumer and Professional Products (CPP) revenue decreased by 16% to $213 million, with adjusted EBITDA down 14% to $19 million, primarily due to decreased volume and weak consumer demand [12][13] Market Data and Key Metrics Changes - The overall consumer demand remains weak, particularly affecting the CPP segment, with ongoing tariff impacts disrupting historical customer ordering patterns [5][14] - The Australian market showed solid performance, contributing positively to the overall results [6] Company Strategy and Development Direction - The company is committed to a capital allocation strategy that includes investing in businesses, opportunistically repurchasing shares, and reducing debt [16] - The company reaffirmed its full-year EBITDA guidance of $575 million to $600 million while reducing revenue expectations by $100 million to $2.5 billion due to ongoing consumer weakness in the CPP segment [6][14] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the long-term recovery of the CPP segment, contingent on stabilization of tariffs and consumer confidence returning [27][28] - The company expects to generate over $1 billion in free cash flow during the fiscal year and the next two years [16] Other Important Information - The company repurchased $40 million of its stock during the third quarter, with a total of $538 million repurchased since April 2023, reducing outstanding shares by 18.4% [6][7] - A quarterly dividend of $0.18 per share was authorized, marking the 56th consecutive quarterly dividend [7] Q&A Session Summary Question: Can you discuss the pricing strategy for CPP and the impact of tariffs? - Management indicated that price increases have been implemented in certain instances, but detailed information is limited due to sensitive customer discussions [19] Question: What are the sell-through trends at retail? - Retail continues to see reduced point-of-sale activity, influenced by weak consumer demand and weather conditions [20] Question: How is pricing realization tracking in HBP? - Pricing realization is generally tracking in line with expectations, with positive price mix contributing to performance [22] Question: What is the outlook for CPP demand recovery? - Management noted that it is difficult to project the timing of a demand rebound, but stabilization of tariffs may help restore consumer confidence [27][28] Question: What are the long-term margin targets for CPP? - The long-term target for CPP margins is 15%, but achieving this will require a return of consumer demand [30][35] Question: Are there any new cost optimization initiatives underway? - Ongoing investments in automation and efficiency projects are in place, particularly in the home building product segment [43]

[Third Quarter 2025 Financial Highlights](index=1&type=section&id=Third%20Quarter%202025%20Financial%20Highlights) [Consolidated Performance](index=1&type=section&id=Consolidated%20Performance) Griffon's Q3 2025 revenue decreased 5% to $613.6 million, reporting a $120.1 million net loss due to impairment, yet adjusted net income grew 14.4% and adjusted EBITDA increased 7.3% Q3 2025 Consolidated Financial Results | Metric | Q3 2025 (USD) | Q3 2024 (USD) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | $613.6 million | $647.8 million | -5% | | Net Income (Loss) | ($120.1 million) | $41.1 million | N/A | | EPS (Loss) | ($2.65) | $0.84 | N/A | | Adjusted Net Income | $69.2 million | $60.5 million | +14.4% | | Adjusted EPS | $1.50 | $1.24 | +21.0% | | Adjusted EBITDA | $134.7 million | $125.5 million | +7.3% | - The net loss was driven by a pre-tax impairment charge of **$243.6 million** (**$217.2 million** after tax) related to the Hunter Fan acquisition goodwill and intangible assets within the Consumer and Professional Products (CPP) segment[3](index=3&type=chunk)[24](index=24&type=chunk) [Management Commentary](index=1&type=section&id=Management%20Commentary) Management noted strong HBP performance and improved CPP margins, reaffirming full-year EBITDA guidance, supported by free cash flow for capital allocation - The Home and Building Products (HBP) segment's performance exceeded expectations, driven by a **31.4% EBITDA margin** in the first nine months due to favorable price and mix[6](index=6&type=chunk) - The Consumer and Professional Products (CPP) segment's EBITDA margin improved by **270 basis points** year-over-year for the first nine months, despite weak demand, thanks to a shift to an asset-light model in the U.S[6](index=6&type=chunk) - In the first nine months of fiscal 2025, the company utilized its **$261 million** of free cash flow for significant capital return and deleveraging activities[6](index=6&type=chunk) Capital Allocation (First Nine Months of FY2025) | Activity | Amount (USD) | | :--- | :--- | | Share Repurchases | $113 million | | Debt Reduction | $76 million | | Dividends Paid | $32 million | [Segment Operating Results](index=2&type=section&id=Segment%20Operating%20Results) [Home and Building Products (HBP)](index=2&type=section&id=Home%20and%20Building%20Products%20(HBP)) HBP segment revenue increased 2% to $400.2 million in Q3, driven by favorable price and mix, with adjusted EBITDA growing 9% to $128.8 million HBP Q3 Performance | Metric | Q3 2025 (USD) | Q3 2024 (USD) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | $400.2 million | $394.2 million | +2% | | Adjusted EBITDA | $128.8 million | $118.5 million | +9% | - Revenue growth was attributed to a **3% positive impact** from price and mix, partially offset by a **1% decline** in volume[7](index=7&type=chunk) [Consumer and Professional Products (CPP)](index=2&type=section&id=Consumer%20and%20Professional%20Products%20(CPP)) CPP segment revenue declined 16% to $213.4 million in Q3 due to weak demand and tariffs, resulting in a 14% adjusted EBITDA decrease to $19.2 million, partially mitigated by sourcing CPP Q3 Performance | Metric | Q3 2025 (USD) | Q3 2024 (USD) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | $213.4 million | $253.6 million | -16% | | Adjusted EBITDA | $19.2 million | $22.3 million | -14% | - The revenue decrease was primarily driven by a **19% volume decline** resulting from reduced consumer demand and disrupted customer ordering patterns in the U.S. due to increased tariffs[8](index=8&type=chunk) - The negative impact of lower revenue on Adjusted EBITDA was partially offset by benefits from the U.S. global sourcing expansion, improved margins, and reduced administrative expenses[9](index=9&type=chunk) [Financial Position and Capital Allocation](index=2&type=section&id=Financial%20Position%20and%20Capital%20Allocation) [Balance Sheet and Liquidity](index=2&type=section&id=Balance%20Sheet%20and%20Liquidity) As of June 30, 2025, Griffon maintained strong liquidity with $107.3 million cash and $449.5 million revolver availability, reducing net debt to $1.34 billion and improving its leverage ratio to 2.5x Balance Sheet Summary (as of June 30, 2025) | Metric | Value (USD) | | :--- | :--- | | Cash and Equivalents | $107.3 million | | Total Debt Outstanding | $1.45 billion | | Net Debt | $1.34 billion | | Revolver Availability | $449.5 million | - The net debt to EBITDA leverage ratio improved to **2.5x**, compared to **2.6x** at September 30, 2024, and **2.7x** at June 30, 2024[11](index=11&type=chunk)[26](index=26&type=chunk) [Cash Flow](index=2&type=section&id=Cash%20Flow) The company generated strong cash flow, with free cash flow reaching $261 million for the first nine months of fiscal 2025, and Q3 capital expenditures totaling $8.4 million - Free cash flow for the first nine months of fiscal 2025 was **$261 million**, reflecting strong operating results[12](index=12&type=chunk)[26](index=26&type=chunk) - Net capital expenditures for the third quarter ended June 30, 2025, were **$8.4 million**[12](index=12&type=chunk) [Share Repurchases](index=2&type=section&id=Share%20Repurchases) Griffon repurchased 0.6 million shares for $40.3 million in Q3, totaling 18.4% of outstanding shares since April 2023, with $319.6 million remaining in the authorization - In Q3 2025, the company repurchased **0.6 million shares** for **$40.3 million**, at an average price of **$69.28 per share**[13](index=13&type=chunk) - From April 2023 through June 30, 2025, Griffon has purchased **10.5 million shares** (**18.4%** of outstanding shares) for a total of **$538.4 million**[13](index=13&type=chunk) - As of June 30, 2025, **$319.6 million** remained available under the share repurchase authorization[13](index=13&type=chunk) [Updated 2025 Outlook](index=3&type=section&id=Updated%202025%20Outlook) [Full-Year Guidance](index=3&type=section&id=Full-Year%20Guidance) Griffon updated its FY2025 outlook, lowering revenue guidance to $2.5 billion due to weak CPP demand, but maintained adjusted EBITDA guidance of $575 million to $600 million, supported by improved HBP margins Fiscal 2025 Guidance Update | Metric | New Guidance | Prior Guidance | | :--- | :--- | :--- | | Revenue | $2.5 billion | $2.6 billion | | Adjusted EBITDA | $575 million - $600 million | Maintained | | HBP EBITDA Margin | > 31% | > 30% | | CPP EBITDA Margin | ~ 8% | > 9% | | Interest Expense | $95 million | $102 million | | Capital Expenditures | $60 million | $65 million | - The **$100 million** revenue guidance reduction is attributed to the CPP segment, reflecting ongoing weak consumer demand and the impact of increased tariffs[14](index=14&type=chunk) - The company continues to expect free cash flow to exceed net income for the full fiscal year[16](index=16&type=chunk) [Appendix: Financial Statements and Reconciliations](index=6&type=section&id=Appendix%3A%20Financial%20Statements%20and%20Reconciliations) [Non-GAAP Reconciliations](index=6&type=section&id=Non-GAAP%20Reconciliations) This section provides detailed reconciliations of non-GAAP financial measures, such as Adjusted EBITDA and free cash flow, to their most directly comparable GAAP counterparts - Reconciliation of segment adjusted EBITDA and adjusted EBITDA to income (loss) before taxes is provided, detailing adjustments for interest, depreciation, amortization, impairments, and other items[23](index=23&type=chunk)[24](index=24&type=chunk) - A reconciliation of net cash provided by operating activities to Free Cash Flow (FCF) is included[25](index=25&type=chunk)[26](index=26&type=chunk) - A reconciliation of net income (loss) to adjusted net income and the corresponding earnings per share figures is presented, excluding items like restructuring charges and goodwill impairments[35](index=35&type=chunk) [Condensed Consolidated Financial Statements](index=9&type=section&id=Condensed%20Consolidated%20Financial%20Statements) This appendix presents the unaudited condensed consolidated financial statements, including Statements of Operations, Balance Sheets, and Statements of Cash Flows, for periods ended June 30, 2025, and 2024 - The Condensed Consolidated Statements of Operations details revenue, costs, operating expenses, and net income (loss) for the three and nine months ended June 30, 2025 and 2024[31](index=31&type=chunk) - The Condensed Consolidated Balance Sheets present the company's assets, liabilities, and shareholders' equity as of June 30, 2025, compared to September 30, 2024[32](index=32&type=chunk)[33](index=33&type=chunk) - The Condensed Consolidated Statements of Cash Flows outline the cash inflows and outflows from operating, investing, and financing activities for the nine months ended June 30, 2025 and 2024[34](index=34&type=chunk)

Company Performance - Griffon (GFF) ended the recent trading session at $82.65, demonstrating a +1.37% change from the preceding day's closing price, outperforming the S&P 500 which registered a daily gain of 0.4% [1] - Shares of Griffon had gained 13.36% over the past month, significantly outpacing the Conglomerates sector's gain of 0.51% and the S&P 500's gain of 4.61% [1] Earnings Projections - The company's earnings per share (EPS) are projected to be $1.5, reflecting a 20.97% increase from the same quarter last year, with quarterly revenue expected to be $660.03 million, up 1.89% from the year-ago period [2] - For the full year, the Zacks Consensus Estimates project earnings of $5.7 per share and revenue of $2.57 billion, representing changes of +11.33% and -1.88%, respectively, from the prior year [3] Analyst Estimates and Valuation - Recent changes to analyst estimates for Griffon are important as they signify the changing landscape of near-term business trends, with positive estimate revisions indicating optimism about the business outlook [3] - Griffon currently features a Zacks Rank of 4 (Sell), with a Forward P/E ratio of 14.3, which is a discount compared to the average Forward P/E of 18.99 of its industry [5] - The PEG ratio for Griffon is currently 0.89, compared to the average PEG ratio of 2.01 for the Diversified Operations industry [6] Industry Context - The Diversified Operations industry, part of the Conglomerates sector, currently has a Zacks Industry Rank of 74, placing it in the top 30% of all 250+ industries [6] - The strength of individual industry groups is measured by the Zacks Industry Rank, with top 50% rated industries outperforming the bottom half by a factor of 2 to 1 [7]

Core Insights - Griffon Corp (NYSE: GFF) is positioned at a cyclical and strategic inflection point in its core business segments, which include essential home products such as garage doors and garden tools [1] Company Overview - Griffon Corp is a US manufacturer specializing in everyday home products, indicating a focus on consumer needs and market demand [1] Investment Potential - The company presents a potential investment opportunity due to its current strategic positioning and the quality of its product offerings [1]

Core Viewpoint - Griffon Corporation (GFF) has experienced a significant decline in share price, dropping 19.5% over the past six months, which is worse than the industry and S&P 500 declines of 6.1% and 3.2%, respectively [1] Group 1: Performance Overview - GFF's stock closed at $67.20, significantly below its 52-week high of $86.73 and above its 52-week low of $55.01 [3] - The company's total revenues for the fiscal second quarter were $611.7 million, missing consensus estimates and reflecting a 9% year-over-year decline [5] Group 2: Segment Performance - The Consumer and Professional Products (CPP) segment saw a revenue decline of 12.9% year-over-year in the second quarter of fiscal 2025, primarily due to reduced consumer demand in North America and the UK [4] - The Home and Building Products (HBP) segment also faced challenges, with revenues declining 6% in the fiscal second quarter due to typical seasonal drops in residential volumes [5] Group 3: Debt and Financial Health - GFF's long-term debt increased by 7.9% CAGR over the last five years, reaching $1.53 billion, with current liabilities at $330.8 million, exceeding cash equivalents of $127.8 million [6] - The company's long-term debt/capital ratio stands at 87.68%, significantly higher than the industry average of 54.02% [6] Group 4: Market Trends and Outlook - Despite recent challenges, the U.S. residential construction market is expected to recover, which may benefit the HBP segment [10] - The company anticipates flat revenues for the HBP segment in fiscal 2025, supported by a recovery in the commercial construction market [11] Group 5: Strategic Initiatives - GFF has been active in acquisitions, including the purchase of Pope, which is expected to generate annual revenues of around $25 million and contributed 2% to the CPP segment's revenues in the fiscal second quarter [12] - The company remains committed to shareholder returns, paying $23.4 million in dividends and repurchasing shares worth $72.9 million in the fiscal second quarter [13] Group 6: Financial Metrics - GFF's trailing 12-month return on equity (ROE) is 114.46%, significantly higher than the industry average of 36.57%, indicating efficient use of shareholder funds [14] - The stock's forward 12-month price-to-earnings ratio is 10.41X, below the industry average of 16.28X, suggesting an attractive valuation for investors [15] Group 7: Earnings Estimates - Earnings estimates for fiscal 2025 have increased by 0.5% to $5.71 per share, while estimates for fiscal 2026 remain stable at $6.85 [18] - The Zacks Consensus Estimate for GFF's sales in fiscal 2025 implies a decline of 1.9% year-over-year, while EPS estimates indicate an 11.5% growth [19]

Core Viewpoint - Griffon Corporation (GFF) and Carlisle Companies Incorporated (CSL) are both key players in the Zacks Diversified Operations industry, focusing on innovative home and building envelope products and solutions. The article evaluates their growth prospects and challenges to determine which company presents a better investment opportunity today [1][2]. Griffon Corporation (GFF) - GFF is experiencing strong fundamentals in the Home and Building Products segment, with stable demand driven by repair and remodeling activities. The U.S. residential construction market is expected to recover, supported by builder incentives and anticipated interest rate cuts [3]. - The Consumer and Professional Products (CPP) segment faces challenges due to reduced consumer demand in North America and the UK, particularly for outdoor tools and decor [4]. - GFF has expanded its business through acquisitions, notably acquiring Pope, an Australia-based company, which is expected to generate annual revenues of approximately $25 million and positively impact earnings in its first full year [5]. - GFF is committed to shareholder returns, paying dividends of $23.4 million and repurchasing shares worth $72.9 million in the fiscal second quarter. The company also approved a new $400 million share repurchase authorization and increased its quarterly dividend by 20% [6]. Carlisle Companies Incorporated (CSL) - CSL is experiencing strong momentum in the Construction Materials segment, driven by high demand for reroofing products and increased sales in the non-residential construction market due to the acquisition of MTL [7]. - The Weatherproofing Technologies segment is negatively impacted by lower volumes in the residential construction market and project delays, attributed to high interest rates and unfavorable weather conditions [8]. - CSL rewarded shareholders with a dividend payment of $45.2 million and share buybacks worth $400 million in the first three months of 2025, along with an 18% dividend hike in August 2024 [9]. - The company is facing rising raw material and labor costs, which are increasing direct expenses and selling, general, and administrative expenses. In the first quarter, the cost of sales rose by 1.8% year over year, while selling and administrative expenses increased by 16.3% [10][11]. Financial Performance and Valuation - The Zacks Consensus Estimate for GFF's fiscal 2025 sales indicates a year-over-year decline of 1.2%, while EPS is expected to grow by 11.5%. GFF's EPS estimates have been trending upward over the past 60 days [12]. - In contrast, CSL's 2025 sales and EPS estimates imply year-over-year growth of 4.9% and 10.3%, respectively, but its EPS estimates have declined over the past 60 days [12]. - Over the past year, CSL's shares have decreased by 4.9%, while GFF's stock has increased by 5.4% [15]. - CSL is trading at a forward price-to-earnings ratio of 17.15X, above its three-year median of 14.84X, while GFF's forward earnings multiple is at 11.41X, close to its median of 10.66X [17]. Conclusion - Both companies hold a Zacks Rank 3 (Hold), making investment decisions challenging. CSL's strength in Construction Materials is offset by weaknesses in its Weatherproofing Technologies unit and rising costs, suggesting caution for investors [18]. - Conversely, GFF's strengths in the Home and Building Products segment, growth investments, and shareholder-friendly policies indicate a more favorable outlook, making it a more attractive investment option compared to CSL [19].

Core Insights - Griffon Corporation (GFF) reported adjusted earnings of $1.23 per share for Q2 fiscal 2025, exceeding the Zacks Consensus Estimate of $1.13, but reflecting an 8.9% year-over-year decline [1] - Total revenues were $611.7 million, missing the consensus estimate of $616 million and decreasing by 9% year over year [1] Segmental Performance - Home and Building Products segment generated revenues of $368.2 million, accounting for 60.2% of net revenues, down 6% year over year due to lower residential volume, although a favorable product mix helped mitigate the decline [1] - Consumer and Professional Products segment revenues totaled $243.5 million, representing 39.8% of total revenues, down 13% year over year, impacted by a 13% volume reduction in North America and the UK, partially offset by strength in Australia [3] Financial Metrics - Adjusted EBITDA was $109.4 million, a decrease of 15% year over year, influenced by lower revenues and increased labor and distribution costs, though partially offset by lower material costs [2] - The adjusted gross margin improved to 41.2% from 40.4% in the prior year, while net income decreased by 11% year over year to $56.8 million [5] Balance Sheet and Cash Flow - At the end of Q2 fiscal 2025, cash and cash equivalents stood at $127.8 million, up from $114.4 million at the end of fiscal 2024, while long-term debt was $1.53 billion [6] - The company generated net cash of $159.4 million from operating activities in the first half of fiscal 2025, down from $185.9 million in the same period last year [7] - Free cash flow for the first six months of fiscal 2025 was $145.8 million, compared to $153.8 million in the prior-year period [8]