Griffon(GFF) - 2025 Q3 - Quarterly Report

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 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 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] * Total Shareholders' Equity significantly decreased by $160,988 thousand (71.59%) from September 30, 2024, to June 30, 2025[9] Condensed Consolidated Statement of Shareholders' Equity 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] * Common stock acquired (repurchases) totaled $114,442 thousand for the nine months ended June 30, 2025, further reducing equity[12][83][197] Condensed Consolidated Statements of Operations and Comprehensive Income (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] * 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] Condensed Consolidated Statements of Cash Flows 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][191] * 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][193] Notes to Condensed Consolidated Financial Statements These notes provide detailed explanations and additional information supporting the condensed consolidated financial statements NOTE 1 – DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION 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][24][27] * HBP is the largest manufacturer and marketer of garage doors and rolling steel doors in North America (Clopay, Ideal, Holmes, Cornell, Cookson brands)[27] * 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] NOTE 2 – FAIR VALUE MEASUREMENTS 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] * 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][35][38] * 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] NOTE 3 – REVENUE 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] NOTE 4 – ACQUISITIONS 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] * 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][146][172] NOTE 5 – INVENTORIES 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] NOTE 6 – PROPERTY, PLANT AND EQUIPMENT 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] * 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] NOTE 7 – CREDIT LOSSES 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] NOTE 8 – GOODWILL AND OTHER INTANGIBLES 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] * An additional pre-tax, non-cash impairment charge of $107,000 thousand was recorded for Hunter Fan's indefinite-lived intangible asset (trademark)[57] 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 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] * Excluding special items, the effective tax rates were 27.4% for Q3 2025 and 27.9% for Q3 2024[59] * 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] NOTE 10 – LONG-TERM DEBT 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] * The Term Loan B facility was favorably repriced in June 2024, reducing the SOFR margin by 0.25% and eliminating the SOFR floor[68][202] NOTE 11 – SHAREHOLDERS' EQUITY AND EQUITY COMPENSATION 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][74][195] * 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][182] * 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][197] NOTE 12 – EARNINGS PER SHARE (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] NOTE 13 – REPORTABLE SEGMENTS 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][167] NOTE 14 – EMPLOYEE BENEFIT PLANS 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] * 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] NOTE 15 – RECENT ACCOUNTING PRONOUNCEMENTS 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] * 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] * 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] NOTE 16 – DISCONTINUED OPERATIONS 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] * No reported revenues or costs for discontinued operations in the nine months ended June 30, 2025 and 2024[106] NOTE 17 – RESTRUCTURING CHARGES 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] * The initiative resulted in a facility footprint reduction of approximately 1.2 million square feet and a headcount reduction of approximately 600[108] * 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] NOTE 18 – OTHER INCOME (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 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] * The long-term warranty liability remained stable at $1,239 thousand at both June 30, 2025, and September 30, 2024[119] 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) 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][183] NOTE 21 — LEASES 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] * 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] 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 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][133][134] * The Memphis, TN site has potential PCB contamination, and the TDEC recommended EPA inclusion on the National Priorities List, with liability deemed probable[135][136][137] * 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] Item 2 – Management's Discussion and Analysis of Financial Condition and Results of Operations 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 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][142][144] * The company operates through two segments: Home and Building Products (HBP) and Consumer and Professional Products (CPP)[149][150] * 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][146] 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][155] * 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][157] RESULTS OF OPERATIONS 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][163] * 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] * 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] * Goodwill and intangible asset impairments of $243,612 thousand were recorded for the Hunter Fan reporting unit in Q3 2025[174] LIQUIDITY AND CAPITAL RESOURCES 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][199][207] * 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] * 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][213] * The Board approved an additional $400,000 thousand increase to its share repurchase authorization in November 2024, with $319,568 thousand remaining available[197] CRITICAL ACCOUNTING POLICIES 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][26][29] * There have been no changes in Griffon's critical accounting policies from September 30, 2024[221] RECENT ACCOUNTING PRONOUNCEMENTS 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] FORWARD-LOOKING STATEMENTS 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][225] * 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] * Readers are cautioned not to place undue reliance on these statements, and Griffon undertakes no obligation to update them[225] Item 3 - Quantitative and Qualitative Disclosures about Market Risk 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][227][229] * 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] * 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] Item 4 - Controls & Procedures 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] * No material changes in internal control over financial reporting occurred during the three months ended June 30, 2025[231] * The company acknowledges that a control system, no matter how well designed, cannot provide absolute assurance[232] 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 The company reported no legal proceedings under this item * No legal proceedings were reported[234] Item 1A – Risk Factors 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] * 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] * The company acknowledges that additional risks not currently known or deemed immaterial may also adversely affect its business[235] Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds 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] * The average price paid per share for repurchases during the quarter was $69.28[237] * As of June 30, 2025, $319,568 thousand remained available for common stock purchases under the Board-authorized repurchase program[237] Item 3 – Defaults Upon Senior Securities The company reported no defaults upon senior securities * No defaults upon senior securities were reported[238] Item 4 – Mine Safety Disclosures No mine safety disclosures were reported * No mine safety disclosures were reported[238] Item 5 – Other Information 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] * 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][242] * Vesting for the RMA is contingent on age, years of service, and continued employment, with executives meeting requirements in August 2026[241] Item 6 – Exhibits 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] * XBRL Instance Document and Taxonomy Extension Documents (Schema, Calculation, Definitions, Labels, Presentations) are also filed as exhibits[244] 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] * The signing date for the report was August 6, 2025[248]