QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of | (I.R.S. Employer | ||||||||||
incorporation or organization) | Identification No.) | ||||||||||
(Address of principal executive offices) | (Zip Code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
☒ | Accelerated filer | ☐ | ||||||||||||
Non-accelerated filer | ☐ | Smaller reporting company | ||||||||||||
Emerging growth company | ||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ |
Page | |||||
(Unaudited) | |||||||||||
June 30, 2022 | September 30, 2021 | ||||||||||
CURRENT ASSETS | |||||||||||
Cash and equivalents | $ | $ | |||||||||
Accounts receivable, net of allowances of $ | |||||||||||
Inventories | |||||||||||
Prepaid and other current assets | |||||||||||
Assets of discontinued operations held for sale | |||||||||||
Assets of discontinued operations | |||||||||||
Total Current Assets | |||||||||||
PROPERTY, PLANT AND EQUIPMENT, net | |||||||||||
OPERATING LEASE RIGHT-OF-USE ASSETS | |||||||||||
GOODWILL | |||||||||||
INTANGIBLE ASSETS, net | |||||||||||
OTHER ASSETS | |||||||||||
ASSETS OF DISCONTINUED OPERATIONS | |||||||||||
Total Assets | $ | $ | |||||||||
CURRENT LIABILITIES | |||||||||||
Notes payable and current portion of long-term debt | $ | $ | |||||||||
Accounts payable | |||||||||||
Accrued liabilities | |||||||||||
Current portion of operating lease liabilities | |||||||||||
Liabilities of discontinued operations held for sale | |||||||||||
Liabilities of discontinued operations | |||||||||||
Total Current Liabilities | |||||||||||
LONG-TERM DEBT, net | |||||||||||
LONG-TERM OPERATING LEASE LIABILITIES | |||||||||||
OTHER LIABILITIES | |||||||||||
LIABILITIES OF DISCONTINUED OPERATIONS | |||||||||||
Total Liabilities | |||||||||||
COMMITMENTS AND CONTINGENCIES - See Note 22 | |||||||||||
SHAREHOLDERS’ EQUITY | |||||||||||
Total Shareholders’ Equity | |||||||||||
Total Liabilities and Shareholders’ Equity | $ | $ |
COMMON STOCK | CAPITAL IN EXCESS OF PAR VALUE | RETAINED EARNINGS | TREASURY SHARES | ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | DEFERRED COMPENSATION | ||||||||||||||||||||||||||||||||||||||||||||||||
(in thousands) | SHARES | PAR VALUE | SHARES | COST | TOTAL | ||||||||||||||||||||||||||||||||||||||||||||||||
Balance at September 30, 2021 | $ | $ | $ | $ | ( | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Dividend | — | — | — | ( | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
Shares withheld on employee taxes on vested equity awards | — | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||
Amortization of deferred compensation | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Equity awards granted, net | ( | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
ESOP allocation of common stock | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income, net of tax | — | — | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2021 | $ | $ | $ | $ | ( | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Dividend | — | — | — | ( | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
Amortization of deferred compensation | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Equity awards granted, net | ( | — | ( | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
ESOP allocation of common stock | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income, net of tax | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Balance at March 31, 2022 | $ | $ | $ | $ | ( | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Dividend | — | — | — | ( | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
Amortization of deferred compensation | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Equity awards granted, net | ( | — | ( | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
ESOP allocation of common stock | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income, net of tax | — | — | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
Balance at June 30, 2022 | $ | $ | $ | $ | ( | $ | ( | $ | ( | $ |
COMMON STOCK | CAPITAL IN EXCESS OF PAR VALUE | RETAINED EARNINGS | TREASURY SHARES | ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | DEFERRED COMPENSATION | ||||||||||||||||||||||||||||||||||||||||||||||||
(in thousands) | SHARES | PAR VALUE | SHARES | COST | TOTAL | ||||||||||||||||||||||||||||||||||||||||||||||||
Balance at September 30, 2020 | $ | $ | $ | $ | ( | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Dividend | — | — | — | ( | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
Shares withheld on employee taxes on vested equity awards | — | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||
Amortization of deferred compensation | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Equity awards granted, net | ( | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
ESOP allocation of common stock | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income, net of tax | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2020 | $ | $ | $ | $ | ( | $ | ( | $ | ( | ||||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Dividend | — | — | — | ( | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
Amortization of deferred compensation | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Equity awards granted, net | ( | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
ESOP allocation of common stock | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income, net of tax | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Balance at March 31, 2021 | $ | $ | $ | $ | ( | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Dividend | — | — | ( | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||
Amortization of deferred compensation | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Equity awards granted, net | ( | ( | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
ESOP allocation of common stock | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income, net of tax | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Balance at June 30, 2021 | $ | $ | $ | $ | ( | $ | ( | $ | ( | $ |
Three Months Ended June 30, | Nine Months Ended June 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Revenue | $ | $ | $ | $ | |||||||||||||||||||
Cost of goods and services | |||||||||||||||||||||||
Gross profit | |||||||||||||||||||||||
Selling, general and administrative expenses | |||||||||||||||||||||||
Income from operations | |||||||||||||||||||||||
Other income (expense) | |||||||||||||||||||||||
Interest expense | ( | ( | ( | ( | |||||||||||||||||||
Interest income | |||||||||||||||||||||||
Debt extinguishment, net | ( | ( | |||||||||||||||||||||
Other, net | |||||||||||||||||||||||
Total other expense, net | ( | ( | ( | ( | |||||||||||||||||||
Income before taxes from continuing operations | |||||||||||||||||||||||
Provision for income taxes | |||||||||||||||||||||||
Income from continuing operations | $ | $ | $ | $ | |||||||||||||||||||
Discontinued operations: | |||||||||||||||||||||||
Income from operations of discontinued operations | |||||||||||||||||||||||
Provision (benefit) for income taxes | ( | ||||||||||||||||||||||
Income from discontinued operations | |||||||||||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||||||||||
Basic earnings per common share: | |||||||||||||||||||||||
Income from continuing operations | $ | $ | $ | $ | |||||||||||||||||||
Income from discontinued operations | |||||||||||||||||||||||
Basic earnings per common share | $ | $ | $ | $ | |||||||||||||||||||
Basic weighted-average shares outstanding | |||||||||||||||||||||||
Diluted earnings per common share: | |||||||||||||||||||||||
Income from continuing operations | $ | $ | $ | $ | |||||||||||||||||||
Income from discontinued operations | |||||||||||||||||||||||
Diluted earnings per common share | $ | $ | $ | $ | |||||||||||||||||||
Diluted weighted-average shares outstanding | |||||||||||||||||||||||
Dividends paid per common share | $ | $ | $ | $ | |||||||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||||||||||
Other comprehensive income (loss), net of taxes: | |||||||||||||||||||||||
Foreign currency translation adjustments | ( | ( | |||||||||||||||||||||
Pension and other post retirement plans | |||||||||||||||||||||||
Change in cash flow hedges | |||||||||||||||||||||||
Total other comprehensive income (loss), net of taxes | ( | ( | |||||||||||||||||||||
Comprehensive income, net | $ | $ | $ | $ |
Nine Months Ended June 30, | |||||||||||
2022 | 2021 | ||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||
Net income | $ | $ | |||||||||
Net income from discontinued operations | ( | ( | |||||||||
Adjustments to reconcile net income to net cash (used in) provided by operating activities of continuing operations: | |||||||||||
Depreciation and amortization | |||||||||||
Stock-based compensation | |||||||||||
Asset impairment charges - restructuring | |||||||||||
Provision for losses on accounts receivable | |||||||||||
Amortization of debt discounts and issuance costs | |||||||||||
Debt extinguishment, net | |||||||||||
Fair value step-up of acquired inventory sold | |||||||||||
Deferred income taxes | |||||||||||
(Gain) loss on sale of assets and investments | ( | ||||||||||
Change in assets and liabilities, net of assets and liabilities acquired: | |||||||||||
Increase in accounts receivable | ( | ( | |||||||||
Increase in inventories | ( | ( | |||||||||
Increase in prepaid and other assets | ( | ( | |||||||||
Increase (decrease) in accounts payable, accrued liabilities, income taxes payable and operating lease liabilities | ( | ||||||||||
Other changes, net | |||||||||||
Net cash (used in) provided by operating activities - continuing operations | ( | ||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||||
Acquisition of property, plant and equipment | ( | ( | |||||||||
Acquired businesses, net of cash acquired | ( | ( | |||||||||
Proceeds from sale of business, net | |||||||||||
Proceeds (payments) from investments | ( | ||||||||||
Proceeds from the sale of property, plant and equipment | |||||||||||
Other, net | |||||||||||
Net cash used in investing activities - continuing operations | ( | ( | |||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||
Dividends paid | ( | ( | |||||||||
Purchase of shares for treasury | ( | ( | |||||||||
Proceeds from long-term debt | |||||||||||
Payments of long-term debt | ( | ( | |||||||||
Financing costs | ( | ( | |||||||||
Other, net | ( | ||||||||||
Net cash provided by (used in) financing activities - continuing operations | ( | ||||||||||
Nine Months Ended June 30, | |||||||||||
2022 | 2021 | ||||||||||
CASH FLOWS FROM DISCONTINUED OPERATIONS: | |||||||||||
Net cash provided by operating activities | |||||||||||
Net cash provided by (used in) investing activities | ( | ||||||||||
Net cash provided by discontinued operations | |||||||||||
Effect of exchange rate changes on cash and equivalents | ( | ||||||||||
NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS | ( | ||||||||||
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD | |||||||||||
CASH AND EQUIVALENTS AT END OF PERIOD | $ | $ |
Proforma For the Three Months Ended June 30, (unaudited) | Proforma For the Nine Months Ended June 30, (unaudited) | ||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||
Revenue | $ | $ | $ | $ | |||||||||||||
Income from continuing operations |
Accounts receivable (1) | $ | ||||
Inventories(2) | |||||
Other current assets | |||||
Property, plant and equipment | |||||
Operating lease right-of-use assets | |||||
Goodwill | |||||
Intangible assets | |||||
Total assets acquired | $ | ||||
Accounts payable and accrued liabilities | $ | ||||
Current portion of operating lease liabilities | |||||
Deferred tax liability(3) | |||||
Long-term operating lease liabilities | |||||
Other long-term liabilities | |||||
Total liabilities assumed | $ | ||||
Total net assets acquired | $ |
Average Life (Years) | ||||||||
Goodwill | $ | N/A | ||||||
Indefinite-lived intangibles (Hunter and Casablanca brands) | N/A | |||||||
Definite-lived intangibles (Customer relationships) | ||||||||
Total goodwill and intangible assets | $ |
At June 30, 2022 | At September 30, 2021 | ||||||||||
Raw materials and supplies | $ | $ | |||||||||
Work in process | |||||||||||
Finished goods | |||||||||||
Total | $ | $ |
At June 30, 2022 | At September 30, 2021 | ||||||||||
Land, building and building improvements | $ | $ | |||||||||
Machinery and equipment | |||||||||||
Leasehold improvements | |||||||||||
Accumulated depreciation and amortization | ( | ( | |||||||||
Total | $ | $ |
Nine months ended June 30, | ||||||||
2022 | 2021 | |||||||
Beginning Balance, October 1 | $ | $ | ||||||
Allowance for credit losses acquired | ||||||||
Provision for expected credit losses | ||||||||
Amounts written off charged against the allowance | ( | ( | ||||||
Other, primarily foreign currency translation | ( | |||||||
Ending Balance, June 30 | $ | $ |
At September 30, 2021 | Hunter Acquisition | Foreign currency translations adjustments | At June 30, 2022 | |||||||||||||||||||||||
Consumer and Professional Products | $ | $ | $ | ( | $ | |||||||||||||||||||||
Home and Building Products | ||||||||||||||||||||||||||
Total | $ | $ | $ | ( | $ |
At June 30, 2022 | At September 30, 2021 | ||||||||||||||||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Average Life (Years) | Gross Carrying Amount | Accumulated Amortization | |||||||||||||||||||||||||
Customer relationships & other | $ | $ | $ | $ | |||||||||||||||||||||||||
Technology and patents | |||||||||||||||||||||||||||||
Total amortizable intangible assets | |||||||||||||||||||||||||||||
Trademarks | — | — | |||||||||||||||||||||||||||
Total intangible assets | $ | $ | $ | $ |
At June 30, 2022 | At September 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Outstanding Balance | Original Issuer Premium/(Discount) | Capitalized Fees & Expenses | Balance Sheet | Coupon Interest Rate | Outstanding Balance | Original Issuer Premium/(Discount) | Capitalized Fees & Expenses | Balance Sheet | Coupon Interest Rate | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Senior notes due 2028 | (a) | $ | $ | ( | $ | % | $ | $ | $ | ( | $ | % | ||||||||||||||||||||||||||||||||||||||||||||||||||
Term Loan B due 2029 | (b) | ( | ( | Variable | — | n/a | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revolver due 2025 | (b) | ( | Variable | ( | Variable | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Finance lease - real estate | (c) | Variable | ( | Variable | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Non US lines of credit | (d) | ( | ( | Variable | ( | Variable | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Non US term loans | (d) | ( | Variable | ( | Variable | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other long term debt | (e) | ( | Variable | ( | Variable | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Totals | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
less: Current portion | ( | — | — | ( | ( | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-term debt | $ | $ | ( | $ | ( | $ | $ | $ | $ | ( | $ |
Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Effective Interest Rate | Cash Interest | Amort. Debt (Premium)/Discount | Amort. Debt Issuance Costs & Other Fees | Total Interest Expense | Effective Interest Rate | Cash Interest | Amort. Debt Premium | Amort. Debt Issuance Costs & Other Fees | Total Interest Expense | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Senior notes due 2028 | (a) | % | $ | $ | ( | $ | $ | % | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||
Term Loan B due 2029 | (b) | % | n/a | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revolver due 2025 | (b) | Variable | Variable | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Finance lease - real estate | (c) | % | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Non US lines of credit | (d) | Variable | Variable | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Non US term loans | (d) | Variable | Variable | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other long term debt | (e) | Variable | Variable | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Capitalized interest | ( | — | — | ( | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Totals | $ | $ | $ | $ | $ | $ | ( | $ | $ |
Nine Months Ended June 30, 2022 | Nine Months Ended June 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Effective Interest Rate | Cash Interest | Amort. Debt (Premium)/Discount | Amort. Debt Issuance Costs & Other Fees | Total Interest Expense | Effective Interest Rate | Cash Interest | Amort. Debt Premium | Amort. Debt Issuance Costs & Other Fees | Total Interest Expense | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Senior notes due 2028 | (a) | % | $ | $ | ( | $ | $ | % | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||
Term Loan B due 2029 | (b) | % | n/a | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revolver due 2025 | (b) | Variable | Variable | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Finance lease - real estate | (c) | % | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Non US lines of credit | (d) | Variable | Variable | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Non US term loans | (d) | Variable | Variable | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other long term debt | (e) | Variable | Variable | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Capitalized interest | ( | — | — | ( | ( | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Totals | $ | $ | $ | $ | $ | $ | ( | $ | $ |
For the Three Months Ended June 30, | For the Nine Months Ended June 30, | ||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||
Restricted stock | $ | $ | $ | $ | |||||||||||||
ESOP | |||||||||||||||||
Total stock based compensation | $ | $ | $ | $ |
Three Months Ended June 30, | Nine Months Ended June 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Common shares outstanding | |||||||||||||||||||||||
Unallocated ESOP shares | ( | ( | ( | ( | |||||||||||||||||||
Non-vested restricted stock | ( | ( | ( | ( | |||||||||||||||||||
Impact of weighted average shares | ( | ( | ( | ( | |||||||||||||||||||
Weighted average shares outstanding - basic | |||||||||||||||||||||||
Incremental shares from stock based compensation | |||||||||||||||||||||||
Weighted average shares outstanding - diluted | |||||||||||||||||||||||
For the Three Months Ended June 30, | For the Nine Months Ended June 30, | ||||||||||||||||||||||
REVENUE | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
Consumer and Professional Products | $ | $ | $ | $ | |||||||||||||||||||
Home and Building Products | |||||||||||||||||||||||
Total revenue | $ | $ | $ | $ |
For the Three Months Ended June 30, | For the Nine Months Ended June 30, | |||||||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||||||
Residential repair and remodel | $ | $ | $ | $ | ||||||||||||||||
Retail | ||||||||||||||||||||
Residential new construction | ||||||||||||||||||||
Industrial | ||||||||||||||||||||
International excluding North America | ||||||||||||||||||||
Total Consumer and Professional Products | ||||||||||||||||||||
Residential repair and remodel | ||||||||||||||||||||
Commercial construction | ||||||||||||||||||||
Residential new construction | ||||||||||||||||||||
Total Home and Building Products | ||||||||||||||||||||
Total Consolidated Revenue | $ | $ | $ | $ |
For the Three Months Ended June 30, | |||||||||||||||||||||||
2022 | 2021 | ||||||||||||||||||||||
CPP | HBP | Total | CPP | HBP | Total | ||||||||||||||||||
United States | $ | $ | $ | $ | $ | $ | |||||||||||||||||
Europe | |||||||||||||||||||||||
Canada | |||||||||||||||||||||||
Australia | |||||||||||||||||||||||
All other countries | |||||||||||||||||||||||
Consolidated revenue | $ | $ | $ | $ | $ | $ | |||||||||||||||||
For the Nine Months Ended June 30, 2022 | |||||||||||||||||||||||
2022 | 2021 | ||||||||||||||||||||||
CPP | HBP | Total | CPP | HBP | Total | ||||||||||||||||||
United States | $ | $ | $ | $ | $ | $ | |||||||||||||||||
Europe | |||||||||||||||||||||||
Canada | |||||||||||||||||||||||
Australia | |||||||||||||||||||||||
All other countries | |||||||||||||||||||||||
Consolidated revenue | $ | $ | $ | $ | $ | $ |
For the Three Months Ended June 30, | For the Nine Months Ended June 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Segment adjusted EBITDA: | |||||||||||||||||||||||
Consumer and Professional Products | $ | $ | $ | $ | |||||||||||||||||||
Home and Building Products | |||||||||||||||||||||||
Segment adjusted EBITDA | |||||||||||||||||||||||
Unallocated amounts, excluding depreciation * | ( | ( | ( | ( | |||||||||||||||||||
Adjusted EBITDA | |||||||||||||||||||||||
Net interest expense | ( | ( | ( | ( | |||||||||||||||||||
Depreciation and amortization | ( | ( | ( | ( | |||||||||||||||||||
Debt extinguishment, net | ( | ( | |||||||||||||||||||||
Restructuring charges | ( | ( | ( | ( | |||||||||||||||||||
Acquisition costs | ( | ||||||||||||||||||||||
Strategic review - retention and other | ( | ( | |||||||||||||||||||||
Proxy expenses | ( | ||||||||||||||||||||||
Fair value step-up of acquired inventory sold | ( | ( | |||||||||||||||||||||
Income before taxes from continuing operations | $ | $ | $ | $ |
For the Three Months Ended June 30, | For the Nine Months Ended June 30, | ||||||||||||||||||||||
DEPRECIATION and AMORTIZATION | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
Segment: | |||||||||||||||||||||||
Consumer and Professional Products | $ | $ | $ | $ | |||||||||||||||||||
Home and Building Products | |||||||||||||||||||||||
Total segment depreciation and amortization | |||||||||||||||||||||||
Corporate | |||||||||||||||||||||||
Total consolidated depreciation and amortization | $ | $ | $ | $ | |||||||||||||||||||
CAPITAL EXPENDITURES | |||||||||||||||||||||||
Segment: | |||||||||||||||||||||||
Consumer and Professional Products | $ | $ | $ | $ | |||||||||||||||||||
Home and Building Products | |||||||||||||||||||||||
Total segment | |||||||||||||||||||||||
Corporate | |||||||||||||||||||||||
Total consolidated capital expenditures | $ | $ | $ | $ |
ASSETS | At June 30, 2022 | At September 30, 2021 | |||||||||
Segment assets: | |||||||||||
Consumer and Professional Products | $ | $ | |||||||||
Home and Building Products | |||||||||||
Total segment assets | |||||||||||
Corporate | |||||||||||
Total continuing assets | |||||||||||
Discontinued operations - held for sale | |||||||||||
Other discontinued operations | |||||||||||
Consolidated total | $ | $ |
Three Months Ended June 30, | Nine Months Ended June 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Interest cost | $ | $ | $ | $ | |||||||||||||||||||
Expected return on plan assets | ( | ( | ( | ( | |||||||||||||||||||
Amortization: | |||||||||||||||||||||||
Recognized actuarial loss | |||||||||||||||||||||||
Net periodic expense (income) | $ | ( | $ | ( | $ | ( | $ | ( |
For the Three Months Ended June 30, | For the Nine Months Ended June 30, | |||||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||
Revenue | $ | $ | $ | $ | ||||||||||||||||||||||
Cost of goods and services | ||||||||||||||||||||||||||
Gross profit | ||||||||||||||||||||||||||
Selling, general and administrative expenses | ||||||||||||||||||||||||||
Income (loss) from discontinued operations | ( | |||||||||||||||||||||||||
Other income (expense) | ||||||||||||||||||||||||||
Interest income, net | ||||||||||||||||||||||||||
Gain on sale of business | ||||||||||||||||||||||||||
Other, net | ( | ( | ||||||||||||||||||||||||
Total other income (expense) | ||||||||||||||||||||||||||
Income from discontinued operations before taxes | $ | $ | $ | $ | ||||||||||||||||||||||
Provision (benefit) for income taxes | ( | |||||||||||||||||||||||||
Income from discontinued operations | $ | $ | $ | $ |
At September 30, | |||||||||||
2021 | |||||||||||
CURRENT ASSETS | |||||||||||
Accounts receivable, net | $ | ||||||||||
Contract assets, net of progress payments | |||||||||||
Inventories | |||||||||||
Prepaid and other current assets | |||||||||||
PROPERTY, PLANT AND EQUIPMENT, net | |||||||||||
OPERATING LEASE RIGHT-OF-USE ASSETS | |||||||||||
GOODWILL | |||||||||||
INTANGIBLE ASSETS, net | |||||||||||
OTHER ASSETS | |||||||||||
Total Assets | $ | ||||||||||
CURRENT LIABILITIES | |||||||||||
Accounts payable | |||||||||||
Accrued liabilities | |||||||||||
Current portion of operating lease liabilities | |||||||||||
LONG-TERM OPERATING LEASE LIABILITIES | |||||||||||
OTHER LIABILITIES | |||||||||||
Total Liabilities | $ |
At June 30, 2022 | At September 30, 2021 | ||||||||||
Assets of discontinued operations: | |||||||||||
Prepaid and other current assets | $ | $ | |||||||||
Other long-term assets | |||||||||||
Total assets of discontinued operations | $ | $ | |||||||||
Liabilities of discontinued operations: | |||||||||||
Accrued liabilities, current | $ | $ | |||||||||
Other long-term liabilities | |||||||||||
Total liabilities of discontinued operations | $ | $ |
For the Three Months Ended June 30, | For the Nine Months Ended June 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Cost of goods and services | $ | $ | $ | $ | |||||||||||||||||||
Selling, general and administrative expenses | |||||||||||||||||||||||
Total restructuring charges | $ | $ | $ | $ |
For the Three Months Ended June 30, | For the Nine Months Ended June 30, | |||||||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||||||
Personnel related costs | $ | $ | $ | $ | ||||||||||||||||
Facilities, exit costs and other | ||||||||||||||||||||
Non-cash facility and other | ||||||||||||||||||||
Total | $ | $ | $ | $ |
Cash Charges | Non-Cash | ||||||||||||||||||||||
Personnel related costs | Facilities & Exit Costs | Facility and Other Costs | Total | ||||||||||||||||||||
Accrued liability at September 30, 2021 | $ | $ | $ | $ | |||||||||||||||||||
Q1 Restructuring charges | |||||||||||||||||||||||
Q1 Cash payments | ( | ( | ( | ||||||||||||||||||||
Q1 Non-cash charges | ( | ( | |||||||||||||||||||||
Accrued liability at December 31, 2021 | $ | $ | $ | $ | |||||||||||||||||||
Q2 Restructuring charges | |||||||||||||||||||||||
Q2 Cash payments | ( | ( | ( | ||||||||||||||||||||
Q2 Non-cash charges | ( | ( | |||||||||||||||||||||
Accrued liability at March 31, 2022 | $ | $ | $ | $ | |||||||||||||||||||
Q3 Restructuring charges | |||||||||||||||||||||||
Q3 Cash payments | ( | ( | ( | ||||||||||||||||||||
Q3 Non-cash charges | ( | ( | |||||||||||||||||||||
Accrued liability at June 30, 2022 | $ | $ | $ | $ | |||||||||||||||||||
Three Months Ended June 30, | Nine Months Ended June 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Balance, beginning of period | $ | $ | $ | $ | |||||||||||||||||||
Warranties issued and changes in estimated pre-existing warranties | |||||||||||||||||||||||
Actual warranty costs incurred | ( | ( | ( | ( | |||||||||||||||||||
Other warranty liabilities assumed from acquisitions | |||||||||||||||||||||||
Balance, end of period | $ | $ | $ | $ |
For the Three Months Ended June 30, | |||||||||||||||||||||||||||||||||||
2022 | 2021 | ||||||||||||||||||||||||||||||||||
Pre-tax | Tax | Net of tax | Pre-tax | Tax | Net of tax | ||||||||||||||||||||||||||||||
Foreign currency translation adjustments | $ | ( | $ | $ | ( | $ | $ | $ | |||||||||||||||||||||||||||
Pension and other defined benefit plans | ( | ( | |||||||||||||||||||||||||||||||||
Cash flow hedges | ( | ( | |||||||||||||||||||||||||||||||||
Total other comprehensive income (loss) | $ | ( | $ | ( | $ | ( | $ | $ | ( | $ |
For the Nine Months Ended June 30, | |||||||||||||||||||||||||||||||||||
2022 | 2021 | ||||||||||||||||||||||||||||||||||
Pre-tax | Tax | Net of tax | Pre-tax | Tax | Net of tax | ||||||||||||||||||||||||||||||
Foreign currency translation adjustments | $ | ( | $ | $ | ( | $ | 15,022 | $ | — | $ | 15,022 | ||||||||||||||||||||||||
Pension and other defined benefit plans | ( | 5,311 | (1,115) | 4,196 | |||||||||||||||||||||||||||||||
Cash flow hedges | ( | 2,054 | (617) | 1,437 | |||||||||||||||||||||||||||||||
Total other comprehensive income (loss) | $ | ( | $ | ( | $ | ( | $ | 22,387 | $ | (1,732) | $ | 20,655 |
At June 30, 2022 | At September 30, 2021 | ||||||||||
Foreign currency translation adjustments | $ | ( | $ | ( | |||||||
Pension and other defined benefit plans | ( | ( | |||||||||
Change in Cash flow hedges | |||||||||||
$ | ( | $ | ( |
For the Three Months Ended June 30, | For the Nine Months Ended June 30, | ||||||||||||||||||||||
Gain (Loss) | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
Pension amortization | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Cash flow hedges | ( | ( | |||||||||||||||||||||
Total gain (loss) | $ | ( | $ | ( | $ | $ | ( | ||||||||||||||||
Tax benefit (expense) | ( | ||||||||||||||||||||||
Total | $ | ( | $ | ( | $ | $ | ( |
For the Three Months Ended June 30, | For the Nine Months Ended June 30, | |||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||
Fixed | $ | $ | $ | $ | ||||||||||
Variable (a), (b) | ||||||||||||||
Short-term (b) | ||||||||||||||
Total | $ | $ | $ | $ |
For the Nine Months Ended June 30, | ||||||||
2022 | 2021 | |||||||
Cash paid for amounts included in the measurement of lease liabilities: | ||||||||
Operating cash flows from operating leases | $ | $ | ||||||
Financing cash flows from finance leases | ||||||||
Total | $ | $ | ||||||
June 30, 2022 | September 30, 2021 | |||||||
Operating Leases: | ||||||||
Right of use assets: | ||||||||
Operating right-of-use assets | $ | $ | ||||||
Lease Liabilities: | ||||||||
Current portion of operating lease liabilities | $ | $ | ||||||
Long-term operating lease liabilities | ||||||||
Total operating lease liabilities | $ | $ | ||||||
Finance Leases: | ||||||||
$ | $ | |||||||
Lease Liabilities: | ||||||||
$ | $ | |||||||
Total financing lease liabilities | $ | $ | ||||||
Operating Leases | Finance Leases | |||||||
2022(a) | $ | $ | ||||||
2023 | ||||||||
2024 | ||||||||
2025 | ||||||||
2026 | ||||||||
2027 | ||||||||
Thereafter | ||||||||
Total lease payments | $ | $ | ||||||
Less: Imputed Interest | ( | ( | ||||||
Present value of lease liabilities | $ | $ |
Weighted-average remaining lease term (years): | ||||||||
Operating leases | ||||||||
Finance Leases | ||||||||
Weighted-average discount rate: | ||||||||
Operating Leases | % | |||||||
Finance Leases | % | |||||||
For the Three Months Ended June 30, | For the Nine Months Ended June 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||
Income from continuing operations | $ | 52,782 | $ | 14,815 | $ | 127,646 | $ | 57,678 | |||||||||||||||
Adjusting items: | |||||||||||||||||||||||
Restructuring charges | 5,909 | 4,081 | 12,391 | 14,662 | |||||||||||||||||||
Debt extinguishment, net | 5,287 | — | 5,287 | — | |||||||||||||||||||
Acquisition costs | — | — | 9,303 | — | |||||||||||||||||||
Strategic review - retention and other | 3,220 | — | 3,220 | — | |||||||||||||||||||
Proxy expenses | — | — | 6,952 | — | |||||||||||||||||||
Fair value step-up of acquired inventory sold | 2,700 | — | 5,401 | — | |||||||||||||||||||
Tax impact of above items | (4,314) | (953) | (9,411) | (3,628) | |||||||||||||||||||
Discrete and certain other tax provisions (benefits), net | 913 | 2,850 | (661) | 3,219 | |||||||||||||||||||
Adjusted income from continuing operations | $ | 66,497 | $ | 20,793 | $ | 160,128 | $ | 71,931 | |||||||||||||||
Earnings per common share from continuing operations | $ | 0.98 | $ | 0.28 | $ | 2.38 | $ | 1.08 | |||||||||||||||
Adjusting items, net of tax: | |||||||||||||||||||||||
Restructuring charges | 0.08 | 0.06 | 0.17 | 0.21 | |||||||||||||||||||
Debt extinguishment, net | 0.07 | — | 0.07 | — | |||||||||||||||||||
Acquisition costs | — | — | 0.15 | — | |||||||||||||||||||
Strategic review - retention and other | 0.04 | — | 0.04 | — | |||||||||||||||||||
Proxy expenses | — | — | 0.10 | — | |||||||||||||||||||
Fair value step-up of acquired inventory sold | 0.04 | — | 0.07 | — | |||||||||||||||||||
Discrete and certain other tax provisions (benefits), net | 0.02 | 0.05 | (0.01) | 0.06 | |||||||||||||||||||
Adjusted earnings per common share from continuing operations | $ | 1.23 | $ | 0.39 | $ | 2.98 | $ | 1.35 | |||||||||||||||
Weighted-average shares outstanding (in thousands) | 53,914 | 53,504 | 53,704 | 53,306 |
For the Three Months Ended June 30, | For the Nine Months Ended June 30, | ||||||||||||||||||||||||||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||||||||||||||||||||||||||
United States | $ | 248,068 | $ | 206,809 | $ | 677,714 | $ | 595,619 | |||||||||||||||||||||||||||||||||||||||
Europe | 31,113 | 43,767 | 96,226 | 95,888 | |||||||||||||||||||||||||||||||||||||||||||
Canada | 19,592 | 20,547 | 73,249 | 64,440 | |||||||||||||||||||||||||||||||||||||||||||
Australia | 55,142 | 51,437 | 191,679 | 184,668 | |||||||||||||||||||||||||||||||||||||||||||
All other countries | 8,719 | 2,266 | 17,951 | 7,124 | |||||||||||||||||||||||||||||||||||||||||||
Total Revenue | $ | 362,634 | $ | 324,826 | $ | 1,056,819 | $ | 947,739 | |||||||||||||||||||||||||||||||||||||||
Adjusted EBITDA | 28,373 | 7.8 | % | 29,388 | 9.0 | % | $ | 92,431 | 8.7 | % | $ | 99,524 | 10.5 | % | |||||||||||||||||||||||||||||||||
Depreciation and amortization | 13,434 | 8,781 | $ | 33,831 | $ | 25,600 |
Cash Charges | Non-Cash Charges | ||||||||||||||||||||||||||||||||||
Personnel related costs | Facilities, exit costs and other | Facility and other | Total | Capital Investments | |||||||||||||||||||||||||||||||
Phase I | $ | 12,000 | $ | 4,000 | $ | 19,000 | $ | 35,000 | $ | 40,000 | |||||||||||||||||||||||||
Phase II | 14,000 | 16,000 | — | 30,000 | 25,000 | ||||||||||||||||||||||||||||||
Increase (Reduction) in Scope | (12,400) | 2,100 | (4,700) | (15,000) | (50,000) | ||||||||||||||||||||||||||||||
Total Anticipated Charges | 13,600 | 22,100 | 14,300 | 50,000 | 15,000 | ||||||||||||||||||||||||||||||
Total 2020 restructuring charges | (5,620) | (3,357) | (4,692) | (13,669) | (6,733) | ||||||||||||||||||||||||||||||
Total 2021 restructuring charges | (3,190) | (11,573) | (6,655) | (21,418) | (8,774) | ||||||||||||||||||||||||||||||
Q1 FY2022 Activity | (260) | (1,167) | (289) | (1,716) | (1,690) | ||||||||||||||||||||||||||||||
Q2 FY2022 Activity | (1,878) | (1,122) | (1,766) | (4,766) | (861) | ||||||||||||||||||||||||||||||
Q3 FY2022 Activity | $ | (1,613) | $ | (3,857) | $ | (439) | (5,909) | $ | (3,786) | ||||||||||||||||||||||||||
Total 2022 restructuring charges | (3,751) | (6,146) | (2,494) | (12,391) | (6,337) | ||||||||||||||||||||||||||||||
Total cumulative charges | (12,561) | (21,076) | (13,841) | (47,478) | $ | (21,844) | |||||||||||||||||||||||||||||
Estimate to Complete | $ | 1,039 | $ | 1,024 | $ | 459 | $ | 2,522 | $ | (6,844) | (a) |
For the Three Months Ended June 30, | For the Nine Months Ended June 30, | ||||||||||||||||||||||||||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||||||||||||||||||||||||||
Residential | $ | 238,372 | $ | 156,638 | $ | 627,388 | $ | 459,240 | |||||||||||||||||||||||||||||||||||||||
Commercial | 167,173 | 102,754 | 455,338 | 293,444 | |||||||||||||||||||||||||||||||||||||||||||
Total Revenue | $ | 405,545 | $ | 259,392 | $ | 1,082,726 | $ | 752,684 | |||||||||||||||||||||||||||||||||||||||
Adjusted EBITDA | 119,847 | 29.6 | % | 42,156 | 16.3 | % | $ | 280,618 | 25.9 | % | $ | 130,585 | 17.3 | % | |||||||||||||||||||||||||||||||||
Depreciation and amortization | 4,116 | 4,375 | $ | 12,778 | $ | 13,095 |
Cash Flows from Operations | For the Nine months ended June 30, | ||||||||||
2022 | 2021 | ||||||||||
Net Cash Flows Provided by (Used In): | |||||||||||
Operating activities | $ | (65,001) | $ | 13,314 | |||||||
Investing activities | (574,256) | (31,705) | |||||||||
Financing activities | 513,762 | (14,327) |
Cash and Equivalents and Debt | June 30, | September 30, | |||||||||
2022 | 2021 | ||||||||||
Cash and equivalents | $ | 144,687 | $ | 248,653 | |||||||
Notes payables and current portion of long-term debt | 13,085 | 12,486 | |||||||||
Long-term debt, net of current maturities | 1,574,697 | 1,033,197 | |||||||||
Debt discount/premium and issuance costs | 23,053 | 14,823 | |||||||||
Total debt | 1,610,835 | 1,060,506 | |||||||||
Debt, net of cash and equivalents | $ | 1,466,148 | $ | 811,853 |
For the Nine Months Ended | For the Year Ended | ||||||||||||||||
June 30, 2022 | September 30, 2021 | ||||||||||||||||
Parent Company | Guarantor Companies | Parent Company | Guarantor Companies | ||||||||||||||
Net sales | $ | — | $ | 1,717,178 | $ | — | $ | 1,991,434 | |||||||||
Gross profit | $ | — | $ | 541,082 | $ | — | $ | 497,829 | |||||||||
Income (loss) from operations | $ | (32,474) | $ | 232,275 | $ | (22,321) | $ | 123,870 | |||||||||
Equity in earnings of Guarantor subsidiaries | $ | 144,389 | $ | — | $ | 79,055 | $ | — | |||||||||
Net income (loss) | $ | (47,947) | $ | 144,389 | $ | (40,035) | $ | 79,055 |
For the Nine Months Ended | For the Year Ended | ||||||||||||||||
June 30, 2022 | September 30, 2021 | ||||||||||||||||
Parent Company | Guarantor Companies | Parent Company | Guarantor Companies | ||||||||||||||
Current assets | $ | 57,281 | $ | 1,026,662 | $ | 114,377 | $ | 951,609 | |||||||||
Non-current assets | 14,086 | 1,950,570 | 17,665 | 1,069,540 | |||||||||||||
Total assets | $ | 71,367 | $ | 2,977,232 | $ | 132,042 | $ | 2,021,149 | |||||||||
Current liabilities | $ | 200,229 | $ | 331,146 | $ | 41,334 | $ | 397,121 | |||||||||
Long-term debt | 1,549,596 | 13,294 | 998,787 | 14,482 | |||||||||||||
Other liabilities | 31,923 | 366,433 | 43,337 | 164,122 | |||||||||||||
Total liabilities | $ | 1,781,748 | $ | 710,873 | $ | 1,083,458 | $ | 575,725 |
Period | (a) Total Number of Shares (or Units) Purchased | (b) Average Price Paid Per Share (or Unit) | (c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs (1) | (d) Maximum Number (or Approximate Dollar Value) of Shares (or Units) That May Yet Be Purchased Under the Plans or Programs (1) | ||||||||||||||||||||||
April 1 - 30, 2022 | — | $ | — | — | ||||||||||||||||||||||
May 1 - 31, 2022 | — | — | — | |||||||||||||||||||||||
June 1 - 30, 2022 | — | — | — | |||||||||||||||||||||||
Total | — | $ | — | — | $ | 57,955 |
Item 6 | Exhibits | ||||
2.1* | Share Purchase Agreement by and among TTM Technologies, Inc., Exphonics, Inc. and Griffon Corporation, dated as of April 18, 2022 (incorporated by reference to Exhibit 2.1 of Current Report on Form 8-K filed April 21, 2022 (Commission File No. 1-06620)). | ||||
2.2 | |||||
2.3* | |||||
10.1** | Amendment No. 3 to Employment Agreement, dated March 16, 2008, by and between Griffon Corporation and Ronald J. Kramer, made as of April 28, 2022 (incorporated by reference to Exhibit 10.4 of Quarterly Report on Form 10-Q for the quarter ended March 31, 2022). | ||||
10.2** | Amendment No. 1 to Severance Agreement, dated July 30, 2015, by and between Griffon Corporation and Brian G. Harris, made as of April 28, 2022 (incorporated by reference to Exhibit 10.5 of Quarterly Report on Form 10-Q for the quarter ended March 31, 2022). | ||||
10.3** | Amendment No. 1 to Severance Agreement, dated April 27, 2010, by and between Griffon Corporation and Seth L. Kaplan, made as of April 28, 2022 (incorporated by reference to Exhibit 10.6 of Quarterly Report on Form 10-Q for the quarter ended March 31, 2022). | ||||
31.1 | |||||
31.2 | |||||
32 | |||||
101.INS | XBRL Instance Document | ||||
101.SCH | XBRL Taxonomy Extension Schema Document | ||||
101.CAL | XBRL Taxonomy Extension Calculation Document | ||||
101.DEF | XBRL Taxonomy Extension Definitions Document | ||||
101.LAB | XBRL Taxonomy Extension Labels Document | ||||
101.PRE | XBRL Taxonomy Extension Presentations Document | ||||
*The registrant has omitted schedules and similar attachments to the subject agreement pursuant to Item 601(b)(2) of Regulation S-K. The registrant will furnish a copy of any omitted schedule or similar attachment to the Securities and Exchange Commission upon request. | |||||
** Indicates a management contract or compensatory plan or arrangement. |
GRIFFON CORPORATION | ||||||||
/s/ Brian G. Harris | ||||||||
Brian G. Harris | ||||||||
Senior Vice President and Chief Financial Officer | ||||||||
(Principal Financial Officer) | ||||||||
/s/ W. Christopher Durborow | ||||||||
W. Christopher Durborow | ||||||||
Vice President and Chief Accounting Officer | ||||||||
(Principal Accounting Officer) |
BUSINESS.29313714.2 |
BUSINESS.29313714.2 |
BUSINESS.29313714.2 |
BUSINESS.29313716.2 |
BUSINESS.29313716.2 |
BUSINESS.29313716.2 |
BUSINESS.29313716.2 |
BUSINESS.29313716.2 |
BUSINESS.29313716.2 |
/s/ Ronald J. Kramer | ||||||||
Ronald J. Kramer | ||||||||
Chief Executive Officer | ||||||||
(Principal Executive Officer) |
/s/ Brian G. Harris | ||||||||
Brian G. Harris | ||||||||
Senior Vice President and Chief Financial Officer | ||||||||
(Principal Financial Officer) |
/s/ Ronald J. Kramer | ||||||||
Name: Ronald J. Kramer | ||||||||
Date: August 3, 2022 |
/s/ Brian G. Harris | ||||||||
Name: Brian G. Harris | ||||||||
Date: August 3, 2022 |
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands |
Jun. 30, 2022 |
Sep. 30, 2021 |
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Statement of Financial Position [Abstract] | ||
Accounts receivable, net allowances | $ 13,541 | $ 8,787 |
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION |
9 Months Ended |
---|---|
Jun. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION | DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION About Griffon Corporation Griffon Corporation (the “Company”, “Griffon”, "we" or "us") is a diversified management and holding company that conducts business through wholly-owned subsidiaries. Griffon oversees the operations of its subsidiaries, allocates resources among them and manages their capital structures. Griffon provides direction and assistance to its subsidiaries in connection with acquisition and growth opportunities as well as in connection with divestitures. In order to further diversify, Griffon also seeks out, evaluates and, when appropriate, will acquire additional businesses that offer potentially attractive returns on capital. The Company was founded in 1959, is a Delaware corporation headquartered in New York, N.Y. and is listed on the New York Stock Exchange (NYSE:GFF). On May 16, 2022, we announced that our Board of Directors initiated a process to review a comprehensive range of strategic alternatives to maximize shareholder value including a sale, merger, divestiture, recapitalization or other strategic transaction. There is no timeline for this review and there is no assurance that the Board of Director's review will result in any transaction being entered into or consummated. As previously announced, we do not intend to disclose further developments until our Board of Directors approves a specific transaction or otherwise concludes its review of strategic alternatives. On September 27, 2021, Griffon announced it was exploring strategic alternatives for its Defense Electronics ("DE") segment, which consists of its Telephonics subsidiary. On June 27, 2022, we completed the sale of Telephonics to TTM Technologies, Inc. ("TTM") for $330,000 in cash, subject to customary post-closing adjustments. As a result, we have classified the results of operations of our Telephonics business as a discontinued operation in the Consolidated Statements of Operations for all periods presented and classified the related assets and liabilities associated with the discontinued operation as held for sale in the consolidated balance sheets. Accordingly, all references made to results and information in this Quarterly Report on Form 10-Q are to Griffon's continuing operations, unless noted otherwise. Telephonics is recognized globally as a leading provider of highly sophisticated intelligence, surveillance and communications solutions that are deployed across a wide range of land, sea and air applications. Telephonics designs, develops, manufactures and provides logistical support and lifecycle sustainment services to defense, aerospace and commercial customers worldwide. On January 24, 2022, Griffon acquired Hunter Fan Company (“Hunter”), a market leader in residential ceiling, commercial, and industrial fans, from MidOcean Partners (“MidOcean”) for a contractual purchase price of approximately $845,000, subject to customary post-closing adjustments. Hunter, which is part of Griffon's Consumer and Professional Products segment, complements and diversifies our portfolio of leading consumer brands and products. We financed the acquisition of Hunter with a new $800,000 year Term Loan B facility; we used a combination of cash on hand and revolving credit facility borrowings to fund the balance of the purchase price and related acquisition and debt expenditures. Griffon conducts its operations through two reportable segments: •Consumer and Professional Products (“CPP”) is a leading North American manufacturer and a global provider of branded consumer and professional tools; residential, industrial and commercial fans; home storage and organization products; and products that enhance indoor and outdoor lifestyles. CPP sells products globally through a portfolio of leading brands including AMES, since 1774, Hunter, since 1886, True Temper, and ClosetMaid. •Home and Building Products ("HBP") conducts its operations through Clopay Corporation ("Clopay"). Founded in 1964, Clopay is the largest manufacturer and marketer of garage doors and rolling steel doors in North America. Residential and commercial sectional garage doors are sold through professional dealers and leading home center retail chains throughout North America under the brands Clopay, Ideal, and Holmes. Rolling steel door and grille products designed for commercial, industrial, institutional, and retail use are sold under the CornellCookson brand. In March 2020, the World Health Organization declared the outbreak of COVID-19 a pandemic, which continues to spread throughout the U.S. and the world. The impact from the rapidly changing U.S. and global market and economic conditions due to the COVID-19 outbreak is uncertain, with disruptions to the business of our customers and suppliers, which has impacted, and could continue to impact, our business and consolidated results of operations and financial condition. As of the date of this filing, all of Griffon's facilities are fully operational. We have implemented a variety of new policies and procedures, including additional cleaning, social distancing and restricting on-site visitors, to minimize the risk to our employees of contracting COVID-19. In the United States, we manufacture a substantial majority of the products that we sell. While this helps mitigate the effects of global supplier and transportation disruptions, we are still impacted and are unable to accurately predict the impact COVID-19 will have due to numerous uncertainties, including the severity of the disease, the duration of the outbreak, actions that may be taken by governmental authorities, the impact to our customers’ and suppliers’ businesses and other factors identified in Part II, Item 1A “Risk Factors” in this Form 10-Q. We will continue to evaluate the nature and extent of the impact to our business, consolidated results of operations, and financial condition. Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) for interim financial information, and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, these financial statements do not include all the information and footnotes required by US GAAP for complete financial statements. As such, they should be read together with Griffon’s Annual Report on Form 10-K for the year ended September 30, 2021, which provides a more complete explanation of Griffon’s accounting policies, financial position, operating results, business, properties and other matters. In the opinion of management, these financial statements reflect all adjustments considered necessary for a fair statement of interim results. Griffon’s CPP operations are seasonal; for this and other reasons, the financial results of the Company for any interim period are not necessarily indicative of the results for the full year. The condensed consolidated balance sheet information at September 30, 2021 was derived from the audited financial statements included in Griffon’s Annual Report on Form 10-K for the year ended September 30, 2021. The condensed consolidated financial statements include the accounts of Griffon and all subsidiaries. Intercompany accounts and transactions have been eliminated in consolidation. The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting periods. These estimates may be adjusted due to changes in economic, industry or customer financial conditions, as well as changes in technology or demand. Significant estimates include expected loss allowances for doubtful accounts receivable and returns, net realizable value of inventories, restructuring reserves, valuation of goodwill and intangible assets, sales, assumptions associated with pension benefit obligations and income or expenses, useful lives associated with depreciation and amortization of intangible and fixed assets, warranty reserves, sales incentive accruals, assumption associated with stock based compensation valuation, income taxes and tax valuation reserves, environmental reserves, legal reserves, insurance reserves, the valuation of assets and liabilities of discontinued operations, assumptions associated with valuation of acquired assets and assumed liabilities of acquired companies and the accompanying disclosures. These estimates are based on management’s best knowledge of current events and actions Griffon may undertake in the future. Actual results may ultimately differ from these estimates. Certain amounts in the prior year have been reclassified to conform to current year presentation.
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FAIR VALUE MEASUREMENTS |
9 Months Ended |
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Jun. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS The carrying values of cash and equivalents, accounts receivable, accounts and notes payable, and revolving credit and variable interest rate debt approximate fair value due to either the short-term nature of such instruments or the fact that the interest rate of the revolving credit and variable rate debt is based upon current market rates. Applicable accounting guidance establishes a fair value hierarchy requiring the Company to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the hierarchy is based on the lowest level of input that is significant to the fair value measurement. The accounting guidance establishes three levels of inputs that may be used to measure fair value, as follows: •Level 1 inputs are measured and recorded at fair value based upon quoted prices in active markets for identical assets. •Level 2 inputs include inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices in active markets for similar assets and liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of assets or liabilities. •Level 3 inputs are unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. On June 30, 2022, the fair values of Griffon’s 2028 senior notes and Term Loan B facility approximated $888,759 and $473,100, respectively. Fair values were based upon quoted market prices (level 1 inputs). Insurance contracts with values of $3,742 at June 30, 2022 are measured and recorded at fair value based upon quoted prices in active markets for similar assets (level 2 inputs) and are included in Prepaid and other current assets on the Consolidated Balance Sheets. Items Measured at Fair Value on a Recurring Basis At June 30, 2022, marketable debt and equity securities, measured at fair value based on quoted prices in active markets for similar assets (level 2 inputs), with a fair value of $525 ($333 cost basis) were included in Prepaid and other current assets on the Consolidated Balance Sheets. Realized and unrealized gains and losses on marketable debt and equity securities are included in Other income in the Consolidated Statements of Operations and Comprehensive Income (Loss). In the normal course of business, Griffon’s operations are exposed to the effects of changes in foreign currency exchange rates. To manage these risks, Griffon may enter into various derivative contracts such as foreign currency exchange contracts, including forwards and options. As of June 30, 2022, Griffon entered into several such contracts in order to lock into a foreign currency rate for planned settlements of trade and inter-company liabilities payable in U.S. dollars. At June 30, 2022, Griffon had $27,000 of Australian dollar contracts at a weighted average rate of $1.33 which qualified for hedge accounting (level 2 inputs). These hedges were all deemed effective as cash flow hedges with gains and losses related to changes in fair value deferred and recorded in Accumulated other comprehensive income (loss) ("AOCI") and Prepaid and other current assets, or Accrued liabilities, until settlement. Upon settlement, gains and losses are recognized in the Consolidated Statements of Operations and Comprehensive Income (Loss) in Cost of goods and services ("COGS"). AOCI included deferred gains of $2,116 ($1,482, net of tax) at June 30, 2022. Upon settlement, gains of $936 and $3,199 were recorded in COGS during the three and nine months ended June 30, 2022, respectively. All contracts expire in 29 to 90 days. At June 30, 2022, Griffon had 61,000 of Chinese Yuan contracts at a weighted average rate of $6.57 which qualified for hedge accounting (level 2 inputs). These hedges were all deemed effective as cash flow hedges with gains and losses related to changes in fair value deferred and recorded in Accumulated other comprehensive income (loss) ("AOCI") and Prepaid and other current assets, or Accrued liabilities, until settlement. Upon settlement, gains and losses are recognized in the Consolidated Statements of Operations and Comprehensive Income (Loss) in Cost of goods and services ("COGS"). AOCI included deferred losses of $1,216 ($887, net of tax) at June 30, 2022. Upon settlement, (losses)/gains of $(220) and $434 were recorded in COGS during the three and nine months ended June 30, 2022, respectively. All contracts expire in 1 to 243 days. At June 30, 2022, Griffon had $10,450 of Canadian dollar contracts at a weighted average rate of $1.26. The contracts, which protect Canadian operations from currency fluctuations for U.S. dollar based purchases, do not qualify for hedge accounting. For the three and nine months ended June 30, 2022, fair value gains of $223 and $225, respectively, were recorded to Other liabilities and to Other income for the outstanding contracts, based on similar contract values (level 2 inputs). Realized gains of $76 and $74 were recorded in Other income during the three and nine months ended June 30, 2022, respectively for all settled contracts. All contracts expire in 5 to 480 days.
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REVENUE |
9 Months Ended |
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Jun. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE | REVENUE The Company recognizes revenue when performance obligations identified under the terms of contracts with its customers are satisfied. A performance obligation is a promise in a contract to transfer a distinct good or service, or a bundle of goods or services, to the customer, and is the unit of accounting. A contract with a customer is an agreement which both parties have approved, that creates enforceable rights and obligations, has commercial substance and with respect to which payment terms are identified and collectability is probable. Once the Company has entered into a contract or purchase order, it is evaluated to identify performance obligations. For each performance obligation, revenue is recognized when control of the promised products is transferred to the customer, or services are satisfied under the contract or purchase order, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those products or services (the transaction price). The Company’s performance obligations are recognized at a point in time related to the manufacture and sale of a broad range of products and components, and revenue is recognized when title, and risk and rewards of ownership, have transferred to the customer, which is generally upon shipment. For a complete explanation of Griffon’s revenue accounting policies, this note should be read in conjunction with Griffon’s Annual Report on Form 10-K for the year ended September 30, 2021. See Note 13 - Business Segments for revenue from contracts with customers disaggregated by end markets, segments and geographic location.
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ACQUISITIONS |
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Business Combination and Asset Acquisition [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ACQUISITIONS | ACQUISITIONS Griffon continually evaluates potential acquisitions that strategically fit within its portfolio or expand its portfolio into new product lines or adjacent markets. Griffon has completed a number of acquisitions that have been accounted for as business combinations, in which assets acquired and liabilities assumed are recorded at fair value as of the date of acquisition and have resulted in the recognition of goodwill. The operating results of the business acquisitions are included in Griffon’s consolidated financial statements from the date of acquisition; in each instance, Griffon is in the process of finalizing the initial purchase price allocation unless otherwise noted. On January 24, 2022, Griffon completed the acquisition of Hunter, a market leader in residential ceiling, commercial, and industrial fans, for a contractual purchase price of $845,000, subject to customary post-closing adjustments. The acquisition was primarily financed with a new $800,000 year Term Loan B facility; we used a combination of cash on hand and revolver borrowings to fund the balance of the purchase price and related acquisition and debt expenditures. Hunter complements and diversifies Griffon's portfolio of leading consumer brands and products. Since the date of acquisition through June 30, 2022, Hunter's revenue was $176,623. The goodwill recognized was $281,668, which was assigned to the CPP segment, and is not expected to be deductible for income tax purposes. The final purchase price allocation, which is expected to be completed in the first quarter of fiscal 2023, will be based on final appraisals and other analysis of fair values of acquired assets and liabilities. The following unaudited proforma summary from continuing operations presents consolidated information as if the Company acquired Hunter on October 1, 2020:
Griffon did not include any material, nonrecurring proforma adjustments directly attributable to the business combination in the proforma revenue and earnings. These proforma amounts have been compiled by adding the historical results from continuing operations of Griffon, restated for classifying the results of operations of the Telephonics business as a discontinued operation, to the historical results of Hunter after applying Griffon’s accounting policies and the following proforma adjustments: •Depreciation and amortization that would have been charged assuming the preliminary fair value adjustments to property, plant, and equipment, and intangible assets had been applied from October 1, 2021. •Additional interest and related expenses from the new $800,000 year Term Loan B facility that Griffon used to acquire Hunter Fan reduced by historical Hunter interest expense. •The tax effects on the above adjustments using the statutory tax rate of 25.7% for Griffon and 27.1% for Hunter. The calculation of the preliminary purchase price allocation is as follows:
(1) Includes $67,201 of gross accounts receivable of which $2,599 was not expected to be collected. The fair value of accounts receivable approximated book value acquired. (2) Includes $113,287 of gross inventory of which $2,988 was reserved for obsolete items. (3) Deferred tax liability recorded on intangibles assets. The amounts assigned to goodwill and major intangible asset classifications for the Hunter acquisition are as follows:
On December 22, 2020, AMES acquired Quatro Design Pty Ltd (“Quatro”), a leading Australian manufacturer and supplier of glass fiber reinforced concrete landscaping products for residential, commercial, and public sector projects for a net purchase price of AUD $3,500 (approximately $2,700) in cash. The final purchase price allocated to goodwill and acquired intangibles was AUD $1,038 (approximately $784) and AUD $2,755 (approximately $2,082), respectively, which was assigned to the CPP segment, and is not deductible for income tax purposes. During the nine months ended June 30, 2022, the Company incurred acquisition costs of $9,303. During the three months ended June 30, 2022, there were no acquisition costs. During the three and nine months ended June 30, 2021, acquisition costs were de minimis.
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INVENTORIES |
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INVENTORIES | INVENTORIES Inventories are stated at the lower of cost (first-in, first-out or average cost) or market. The following table details the components of inventory:
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PROPERTY, PLANT AND EQUIPMENT |
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PROPERTY, PLANT AND EQUIPMENT | PROPERTY, PLANT AND EQUIPMENT The following table details the components of property, plant and equipment, net:
Depreciation and amortization expense for property, plant and equipment was $12,173 and $10,896 for the quarters ended June 30, 2022 and 2021, respectively, and $34,650 and $31,950 for the nine months ended June 30, 2022 and 2021, respectively. Depreciation included in Selling, general and administrative ("SG&A") expenses was $4,578 and $3,724 for the quarters ended June 30, 2022 and 2021, respectively, and $12,234 and $10,672 for the nine months ended June 30, 2022 and 2021, respectively. Remaining components of depreciation, attributable to manufacturing operations, are included in Cost of goods and services.
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CREDIT LOSSES |
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Credit Loss [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
CREDIT LOSSES | CREDIT LOSSES The Company is exposed to credit losses primarily through sales of products and services. Trade receivables are recorded at their stated amount, less allowances for discounts, doubtful accounts and returns. The Company’s expected loss allowance methodology for trade receivables is primarily based on the aging method of the accounts receivables balances and the financial condition of its customers. The allowances represent estimated uncollectible receivables associated with potential customer defaults on contractual obligations (usually due to customers’ potential insolvency), discounts related to early payment of accounts receivables by customers and estimates for returns. The allowance for doubtful accounts includes amounts for certain customers in which a risk of default has been specifically identified, as well as an amount for customer defaults, based on a formula, when it is determined the risk of some default is probable and estimable, but cannot yet be associated with specific customers. Allowance for discounts and returns are recorded as a reduction of revenue and the provision related to the allowance for doubtful accounts is recorded in SG&A expenses. The Company also considers current and expected future economic and market conditions, such as the COVID-19 pandemic, when determining any estimate of credit losses. Generally, estimates used to determine the allowance are based on assessment of anticipated payment and all other historical, current and future information that is reasonably available. All accounts receivable amounts are expected to be collected in less than one year. Based on a review of the Company's policies and procedures across all segments, including the aging of its trade receivables, recent write-off history and other factors related to future macroeconomic conditions, Griffon determined that its method to determine credit losses and the amount of its allowances for bad debts is in accordance with the accounting guidance for credit losses on financial instruments, including trade receivables, in all material respects. The following table provides a roll-forward of the allowance for credit losses that is deducted from the amortized cost basis of accounts receivable to present the net amount expected to be collected:
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GOODWILL AND OTHER INTANGIBLES |
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Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GOODWILL AND OTHER INTANGIBLES | GOODWILL AND OTHER INTANGIBLES The following table provides changes in the carrying value of goodwill by segment during the nine months ended June 30, 2022:
The following table provides the gross carrying value and accumulated amortization for each major class of intangible assets:
The gross carrying amount of intangible assets was impacted by $4,630 related to foreign currency translation. Amortization expense for intangible assets was $5,514 and $2,409 for the quarters ended June 30, 2022 and 2021, respectively, and $12,371 and $7,168 for the nine months ended June 30, 2022 and 2021, respectively. The increase in intangible assets and amortization is related to the Hunter acquisition. Amortization expense for the remainder of 2022 and the next five fiscal years and thereafter, based on current intangible balances and classifications, is estimated as follows: 2022 - $5,462; 2023 - $22,000; 2024 - $22,000; 2025 - $22,000; 2026 - $22,000; 2027 - $22,000; thereafter $244,261. |
INCOME TAXES |
9 Months Ended |
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Jun. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXESDuring the quarter ended June 30, 2022, the Company recognized a tax provision of $23,268 on income before taxes from continuing operations of $76,050, compared to a tax provision of $12,078 on income before taxes from continuing operations of $26,893 in the comparable prior year quarter. The current year quarter results included restructuring charges of $5,909 ($4,359, net of tax), fair value step-up of acquired inventory sold of $2,700 ($2,005, net of tax), strategic review (retention and other) of $3,220 ($2,416, net of tax), debt extinguishment, net of $5,287 ($4,022, net of tax), and discrete and certain other tax provisions, net, that affect comparability of $913. The prior year quarter results included restructuring charges of $4,081 ($3,128, net of tax), and discrete tax and certain other tax provisions, net, that affect comparability of $2,850. Excluding these items, the effective tax rates for the quarters ended June 30, 2022 and 2021 were 28.6% and 32.9%, respectively.During the nine months ended June 30, 2022, the Company recognized a tax provision of $55,119 on income before taxes of $182,765, compared to a tax provision of $34,868 on income before taxes of $92,546 in the comparable prior year period. The nine month period ended June 30, 2022 included restructuring charges of $12,391 ($9,185, net of tax), acquisition costs of $9,303 ($8,149, net of tax), proxy expenses of $6,952 ($5,359, net of tax), fair value step-up of acquired inventory sold of $5,401 ($4,012, net of tax), strategic review (retention and other) of $3,220 ($2,416, net of tax), debt extinguishment, net $5,287 ($4,022, net of tax), and discrete and certain other tax benefits, net, that affect comparability of $661. The nine month period ended June 30, 2021 included restructuring charges of $14,662 ($11,034, net of tax), and discrete tax and certain other tax provisions, net, that affect comparability of $3,219. Excluding these items, the effective tax rates for the nine months ended June 30, 2022 and 2021 were 28.9% and 32.9%, respectively. |
LONG-TERM DEBT |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LONG-TERM DEBT | LONG-TERM DEBT
(a) During 2020, Griffon issued, at par, $1,000,000 of 5.75% Senior Notes due in 2028 (the “2028 Senior Notes”). Proceeds from the 2028 Senior Notes were used to redeem $1,000,000 of 5.25% Senior Notes due 2022. During the period ended June 30, 2022, Griffon purchased $15,225 of 2028 Senior Notes in the open market at a weighted average discount of 92.19% of par, or $14,036. In connection with these purchases, Griffon recognized a $1,009 net gain on the early extinguishment of debt comprised of $1,189 of face value in excess of purchase price, offset by $180 related to the write-off of underwriting fees and other expenses. As of June 30, 2022, outstanding 2028 Senior Notes due totaled $984,775; interest is payable semi-annually on March 1 and September 1. Subsequent to June 30, 2022, Griffon purchased $10,000 of 2028 Senior Notes in the open market at a weighted average discount of 91.25% of par, or $9,125. The 2028 Senior Notes are senior unsecured obligations of Griffon guaranteed by certain domestic subsidiaries, and subject to certain covenants, limitations and restrictions. The 2028 Senior Notes were registered under the Securities Act of 1933, as amended (the "Securities Act") via an exchange offer. The fair value of the 2028 Senior Notes approximated $888,759 on June 30, 2022 based upon quoted market prices (level 1 inputs). In connection with the issuance and exchange of the 2028 Senior Notes, Griffon capitalized $16,448 of underwriting fees and other expenses incurred, which is being amortized over the term of such notes, and at June 30, 2022, $11,562 remained to be amortized. (b) On January 24, 2022, Griffon amended and restated its Revolving Credit Facility (as amended, "Credit Agreement") to provide for a new $800,000 Term Loan B facility, due January 24, 2029, in addition to its current $400,000 revolving credit facility ("Revolver"), and replaced LIBOR with SOFR (Secured Overnight Financing Rate). The Term Loan B contains a SOFR floor of 0.50% and a current spread of 2.75%. Additionally, there are two interest rate step-downs tied to achieving decreased secured leverage ratio thresholds. The Original Issue Discount for the Term Loan B was 99.75%. In connection with this amendment, Griffon capitalized $15,466 of underwriting fees and other expenses incurred, which are being amortized over the term of the loan. The Term Loan B facility requires nominal quarterly principal payments of $2,000, beginning with the quarter ended June 30, 2022; potential additional annual principal payments based on a percentage of excess cash flow and certain secured leverage thresholds starting with the fiscal year ending September 30, 2023; and a final balloon payment due at maturity. Term Loan B borrowings may generally be repaid without penalty but may not be re-borrowed. During the period ended June 30, 2022, Griffon prepaid $300,000 aggregate principal amount of the Term Loan B, which permanently reduced the outstanding balance. In connection with the prepayment of the Term Loan B Griffon recognized a $6,296 charge on the prepayment of debt, $5,575 related to the write-off of underwriting fees and other expenses and $721 of the original issuer discount. The Term Loan B facility is subject to the same affirmative and negative covenants that apply to the Revolver, but is not subject to any financial maintenance covenants. Term Loan B borrowings are secured by the same collateral as the Revolver. The fair value of the Term Loan B facility approximated $473,100 on June 30, 2022 based upon quoted market prices (level 1 inputs). At June 30, 2022, $9,174 of underwriting fees and other expenses incurred, remained to be amortized. The Revolver's maximum borrowing availability is $400,000 and it matures on March 22, 2025. The Revolver includes a letter of credit sub-facility with a limit of $100,000; a multi-currency sub-facility of $200,000; and contains a customary accordion feature that permits us to request, subject to each lender's consent, an increase in the maximum aggregate amount that can be borrowed by up to an additional $100,000. In addition, on December 9, 2021, Griffon replaced the Revolver GBP LIBOR benchmark rate with a Sterling Overnight Index Average ("SONIA"). Borrowings under the Revolver may be repaid and re-borrowed at any time. Interest is payable on borrowings at either a SOFR, SONIA or base rate benchmark rate, plus an applicable margin, which adjusts based on financial performance. Current margins are 0.75% for base rate loans, 1.75% for SOFR loans and 1.75% for SONIA loans. The Revolver has certain financial maintenance tests including a maximum total leverage ratio, a maximum senior secured leverage ratio and a minimum interest coverage ratio, as well as customary affirmative and negative covenants and events of default. The negative covenants place limits on Griffon's ability to, among other things, incur indebtedness, incur liens, and make restricted payments and investments. Both the Revolver and Term Loan B borrowings under the Credit Agreement are guaranteed by Griffon’s material domestic subsidiaries and are secured, on a first priority basis, by substantially all domestic assets of the Company and the guarantors, and a pledge of not greater than 65% of the equity interest in Griffon’s material, first-tier foreign subsidiaries. At June 30, 2022, there were $97,816 of outstanding borrowings under the Revolver; outstanding standby letters of credit were $12,287; and $289,897 was available, subject to certain loan covenants, for borrowing at that date. (c) Griffon has one finance lease outstanding for real estate located in Ocala, Florida. The lease matures in 2025 and bears interest at a fixed rate of approximately 5.6%. The Ocala, Florida lease contains two -year renewal options. At June 30, 2022, $13,426 was outstanding. During the year-to-date period ended June 30, 2022, the financing lease on the Troy, Ohio location expired. The lease bore interest at a rate of approximately 5.0%, was secured by a mortgage on the real estate, which was guaranteed by Griffon, and had a one dollar buyout at the end of the lease. Griffon exercised the one dollar buyout option in November 2021. Refer to Note 21- Leases for further details. (d) In November 2012, Garant G.P. (“Garant”), a Griffon wholly owned subsidiary, entered into a CAD 15,000 ($11,666 as of June 30, 2022) revolving credit facility. The facility accrues interest at LIBOR (USD) or the Bankers Acceptance Rate (CDN) plus 1.3% per annum (3.09% LIBOR USD and 3.86% Bankers Acceptance Rate CDN as of June 30, 2022). The revolving facility matures in October 2022, but is renewable upon mutual agreement with the lender. Garant is required to maintain a certain minimum equity. At June 30, 2022, there were no outstanding borrowings under the revolving credit facility with CAD 15,000 ($11,666 as of June 30, 2022) available. During the period ended March 31,2022, Griffon Australia Holdings Pty Ltd and its Australian subsidiaries (collectively, "Griffon Australia") amended its AUD 18,375 term loan, AUD 20,000 revolver and AUD 15,000 receivable purchase facility agreement that was entered into in July 2016 and further amended in fiscal 2020. Griffon Australia paid off the term loan in the amount of AUD 9,625 and canceled the AUD 20,000 revolver. The amendment refinanced the existing AUD 15,000 receivable purchase facility. The receivable purchase facility matures in March 2023, but is renewable upon mutual agreement with the lender. The receivable purchase facility accrues interest at BBSY (Bank Bill Swap Rate) plus 1.25%, respectively, per annum (2.39% at June 30, 2022). At June 30, 2022, there was no balance outstanding under the receivable purchase facility with AUD 15,000 ($10,392 as of June 30, 2022) available. The receivable purchase facility is secured by substantially all of the assets of Griffon Australia and its subsidiaries. Griffon Australia is required to maintain a certain minimum equity level. In July 2018, The AMES Companies UK Ltd and its subsidiaries (collectively, "AMES UK") entered into a GBP 14,000 term loan, GBP 4,000 mortgage loan and GBP 5,000 revolver. The term loan and mortgage loan require quarterly principal payments of GBP 438 and GBP 105 plus interest, respectively, and have balloon payments due upon maturity, July 2023, of GBP 7,088 and GBP 2,349, respectively. Effective in January 2022, the Term Loan and Mortgage Loan were amended to replace GBP LIBOR with SONIA. The Term Loan and Mortgage Loans each accrue interest at the SONIA Rate plus 1.92% (3.11% at June 30, 2022). The revolving facility accrues interest at the Bank of England Base Rate plus 3.25% (4.50% as of June 30, 2022). The revolving credit facility matures in September 2022, but is renewable upon mutual agreement with the lender. As of June 30, 2022, the revolver had no outstanding balance while the term and mortgage loan balances amounted to GBP 11,603 ($14,193 as of June 30, 2022). The revolver and the term loan are both secured by substantially all the assets of AMES UK and its subsidiaries. AMES UK is subject to a maximum leverage ratio and a minimum fixed charges cover ratio. During the period ended March 31, 2022, AMES UK entered into a $8,500 trade loan facility agreement. The trade loan facility has a maximum loan period of 135 days and expired on June 30, 2022. The trade facility accrues interest at the Mid-point of the FED Target Range plus 2.50% (4.13% as of June 30, 2022). (e) Other long-term debt primarily consists of a loan with the Pennsylvania Industrial Development Authority, with the balance consisting of finance leases. At June 30, 2022, Griffon and its subsidiaries were in compliance with the terms and covenants of all credit and loan agreements.
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SHAREHOLDERS' EQUITY |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SHAREHOLDERS' EQUITY | SHAREHOLDERS’ EQUITY During the nine months ended June 30, 2022, the Company paid three quarterly cash dividends of $0.09 per share each. During 2021, the Company paid a quarterly cash dividend of $0.08 per share, totaling $0.32 per share for the year. On June 27, 2022, the Board of Directors declared a special cash dividend of $2.00 per share, payable on July 20, 2022 to shareholders of record as of the close of business on July 8, 2022. On July 27, 2022, the Board of Directors declared a quarterly cash dividend of $0.09 per share, payable on September 15, 2022 to shareholders of record as of the close of business on August 18, 2022. As of June 30, 2022, the Company accrued $104,053 in connection with the declaration of the special dividend. For all dividends, a dividend payable is established for the holders of restricted shares; such dividends will be released upon vesting of the underlying restricted shares. On January 29, 2016, shareholders approved the Griffon Corporation 2016 Equity Incentive Plan (the "Original Incentive Plan") pursuant to which, among other things, awards of performance shares, performance units, stock options, stock appreciation rights, restricted shares, restricted stock units, deferred shares and other stock-based awards may be granted. On January 31, 2018, shareholders approved Amendment No. 1 to the Original Incentive Plan pursuant to which, among other things, 1,000,000 shares were added to the Original Incentive Plan; and on January 30, 2020, shareholders approved Amendment No. 2 to the Original Incentive Plan, pursuant to which 1,700,000 shares were added to the Original Incentive Plan. On February 17, 2022, shareholders approved the Amended and Restated 2016 Equity Incentive Plan (the “Amended Incentive Plan”), which amended and restated the Original Incentive Plan and pursuant to which, among other things, 1,200,000 shares were added to the Original Incentive Plan. Options granted under the Amended Incentive Plan may be either “incentive stock options” or nonqualified stock options, generally expire ten years after the date of grant and are granted at an exercise price of not less than 100% of the fair market value at the date of grant. The maximum number of shares of common stock available for award under the Amended Incentive Plan is 6,250,000 (600,000 of which may be issued as incentive stock options), plus (i) any shares that were reserved for issuance under the Original Incentive Plan as of the effective date of the Original Incentive Plan, and (ii) any shares underlying awards outstanding on such date under the 2011 Incentive Plan that were subsequently canceled or forfeited. As of June 30, 2022, there were 835,517 shares available for grant. Compensation expense for restricted stock and restricted stock units is recognized ratably over the required service period based on the fair value of the grant, calculated as the number of shares granted multiplied by the stock price on the date of grant and, for performance shares, the likelihood of achieving the performance criteria. Compensation expense for restricted stock granted to two senior executives is calculated as the maximum number of shares granted, upon achieving certain performance criteria, multiplied by the stock price as valued by a Monte Carlo Simulation Model. Compensation cost related to stock-based awards with graded vesting, generally over a period of to four years, is recognized using the straight-line attribution method and recorded within SG&A expenses. During the first quarter of 2022, Griffon granted 236,973 shares of restricted stock and restricted stock units. This included 218,162 shares of restricted stock and restricted stock units, subject to certain performance conditions, with vesting periods of thirty-four months, with a total fair value of $6,285, or a weighted average fair value of $28.81 per share. Furthermore, this included an 18,811 shares of restricted stock award granted to one executive, with a vesting period of three years and a total fair value of $507 or a weighted average fair value of $26.97 per share. During the second quarter of 2022, Griffon granted 711,725 shares of restricted stock. This included 199,195 shares of restricted stock to nine executives with a vesting period of three years, with a total fair value of $1,494, or a weighted average fair value of $22.50 per share. This also included 454,146 shares of restricted stock granted to two senior executives with a vesting period of thirty-four months and a -year post-vesting holding period, subject to the achievement of certain performance conditions relating to required levels of return on invested capital and the relative total shareholder return of Griffon's common stock as compared to a market index. So long as the minimum performance condition is attained, the amount of shares that can vest will range from 113,538 to 454,146. The total fair value of these restricted shares, assuming achievement of the performance conditions at target, is approximately $5,456, or a weighted average fair value of $24.03 per share. Additionally, Griffon granted 58,384 restricted shares to the non-employee directors of Griffon with a vesting period of one year and a fair value of $1,375, or a weighted average fair value of $23.55 per share. During the nine months ended June 30, 2022, 501,718 shares granted were issued out of treasury stock. During the third quarter of 2022, Griffon granted 31,663 shares of restricted stock. This included 31,208 shares of restricted stock, subject to certain performance conditions, with vesting periods of thirty-two months, with a total fair value of $700, or a weighted average fair value of $22.43 per share. Furthermore, this included 455 shares of a restricted stock award granted to one executive, with a vesting period of 3 years and a total fair value of $9 or a weighted average fair value of $18.89 per share. The following table summarizes the Company’s compensation expense relating to all stock-based incentive plans:
On each of August 3, 2016 and August 1, 2018, Griffon’s Board of Directors authorized the repurchase of up to $50,000 of Griffon’s outstanding common stock. Under this share repurchase program, the Company may purchase shares in the open market, including pursuant to a 10b5-1 plan, or in privately negotiated transactions. During the nine months ended June 30, 2022, Griffon did not purchase any shares of common stock under these repurchase programs. As of June 30, 2022, an aggregate of $57,955 remains under Griffon's Board authorized repurchase programs. During the nine months ended June 30, 2022, 421,860 shares, with a market value of $10,742, or $25.46 per share were withheld to settle employee taxes due upon the vesting of restricted stock, and were added to treasury stock. Furthermore, during the nine months ended June 30, 2022, an additional 5,480 shares, with a market value of $144, or $26.31 per share, were withheld from common stock issued upon the vesting of restricted stock units to settle employee taxes due upon vesting.
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EARNINGS PER SHARE (EPS) |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EARNINGS PER SHARE (EPS) | EARNINGS PER SHARE (EPS) Basic EPS was calculated by dividing income available to common shareholders by the weighted average number of shares of common stock outstanding during the period. Diluted EPS was calculated by dividing income available to common shareholders by the weighted average number of shares of common stock outstanding plus additional common shares that could be issued in connection with stock based compensation. The following table is a reconciliation of the share amounts (in thousands) used in computing earnings per share:
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BUSINESS SEGMENTS |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
BUSINESS SEGMENTS | BUSINESS SEGMENTS Griffon reports its operations through two reportable segments, as follows: •Consumer and Professional Products (“CPP”) is a leading North American manufacturer and a global provider of branded consumer and professional tools; residential, industrial and commercial fans; home storage and organization products; and products that enhance indoor and outdoor lifestyles. CPP sells products globally through a portfolio of leading brands including AMES, since 1774, Hunter, since 1886, True Temper, and ClosetMaid. •Home and Building Products ("HBP") conducts its operations through Clopay. Founded in 1964, Clopay is the largest manufacturer and marketer of garage doors and rolling steel doors in North America. Residential and commercial sectional garage doors are sold through professional dealers and leading home center retail chains throughout North America under the brands Clopay, Ideal, and Holmes. Rolling steel door and grille products designed for commercial, industrial, institutional, and retail use are sold under the CornellCookson brand. Information on Griffon’s reportable segments from continuing operations is as follows:
Disaggregation of Revenue Revenue from contracts with customers is disaggregated by end markets, segments and geographic location, as it more accurately depicts the nature and amount of the Company’s revenue. The following table presents revenue disaggregated by end market and segment:
The following table presents revenue disaggregated by geography based on the location of the Company's customer:
Griffon evaluates performance and allocates resources based on each segment's operating results before interest income and expense, income taxes, depreciation and amortization, unallocated amounts (mainly corporate overhead), restructuring charges, loss from debt extinguishment and acquisition related expenses, as well as other items that may affect comparability, as applicable (“Segment adjusted EBITDA”). Griffon believes this information is useful to investors for the same reason. The following table provides a reconciliation of Segment adjusted EBITDA to Income before taxes from continuing operations:
* Unallocated amounts typically include general corporate expenses not attributable to a reportable segment.
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EMPLOYEE BENEFIT PLANS |
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Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EMPLOYEE BENEFIT PLANS | EMPLOYEE BENEFIT PLANS Defined benefit pension expense (income) included in Other Income (Expense), net was as follows:
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RECENT ACCOUNTING PRONOUNCEMENTS |
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Accounting Changes and Error Corrections [Abstract] | |
RECENT ACCOUNTING PRONOUNCEMENTS | RECENT ACCOUNTING PRONOUNCEMENTS Issued but not yet effective accounting pronouncements In October 2021, the Financial Accounting Standards Board ("FASB") issued ASU No. 2021-08, Business Combinations (Topic 805); Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. This new guidance affects all entities that enter into a business combination within the scope of ASC 805-10. Under this new guidance, the acquirer should determine what contract assets and/or liabilities it would have recorded under ASC 606 (Revenue Guidance) as of the acquisition date, as if the acquirer had entered into the original contract at the same date and on the same terms as the acquirer. Under current U.S. GAAP, contract assets and contract liabilities acquired in a business combination are recorded by the acquirer at fair value. This update is effective for the Company beginning in fiscal 2023. Early adoption is permitted. The Company is currently evaluating the effects that the adoption of this guidance will have on our consolidated financial statements and related disclosures. New Accounting Standards Implemented In December 2019, the FASB issued guidance on simplifying the accounting for income taxes by clarifying and amending existing guidance related to the recognition of franchise tax, the evaluation of a step up in the tax basis of goodwill, and the effects of enacted changes in tax laws or rates in the effective tax rate computation, among other clarifications. This guidance became effective for the Company beginning in fiscal 2022. We adopted the recognition of non-income taxes on the modified retrospective basis. Adoption of this standard did not have a material impact on our consolidated financial statements and the related disclosures. In August 2018, the FASB issued guidance to clarify disclosure requirements related to defined benefit pension and other post-retirement plans. The guidance is effective for fiscal years beginning after December 15, 2020, with early adoption permitted, and was effective for the Company in our fiscal year beginning in October 1, 2021. Adoption of this standard did not have a material impact on our consolidated financial statements and the related disclosures. The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements, and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.
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Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DISCONTINUED OPERATIONS | DISCONTINUED OPERATIONS On September 27, 2021, Griffon announced it was exploring strategic alternatives for its DE segment, which consists of its Telephonics subsidiary. On June 27, 2022, Griffon completed the sale of Telephonics to TTM for $330,000 in cash, subject to customary post-closing adjustments. In connection with the sale of Telephonics, the Company recorded a gain of $108,949 ($88,977, net of tax) during the quarter ended June 30, 2022. The gain and related tax for the sale of Telephonics is preliminary and is subject to finalization. In accordance with ASC 205-20 Presentation of Financial Statements: Discontinued Operations, a disposal of a component of an entity or a group of components of an entity is required to be reported as discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results when the component of an entity meets the criteria in paragraph 205-20-45-10. In the period in which the component meets held-for-sale or discontinued operations criteria, the major current assets, other assets, current liabilities, and noncurrent liabilities shall be reported as components of total assets and liabilities separate from those balances of the continuing operations. At the same time, the results of all discontinued operations, less applicable income taxes (benefit), shall be reported as components of net income (loss) separate from the net income (loss) of continuing operations. Defense Electronics (DE or Telephonics) The following amounts related to Telephonics have been segregated from Griffon's continuing operations and are reported as a discontinued operation:
Depreciation and amortization was excluded from the current year results since DE is classified as a discontinued operation and, accordingly, the Company ceased depreciation and amortization in accordance with discontinued operations accounting guidelines. Depreciation and amortization would have been approximately $2,342 and $7,442 in the three and nine months ended June 30, 2022, respectively. The Company completed the sale of Telephonics on June 27, 2022. The following amounts related to Telephonics that were classified as assets and liabilities of discontinued operations held for sale in the consolidated balance sheet as of September 30, 2021:
The following amounts summarize the total assets and liabilities related to Telephonics, Installation Services and other discontinued activities which have been segregated from Griffon’s continuing operations, and are reported as assets and liabilities of discontinued operations in the Condensed Consolidated Balance Sheets:
Accrued liabilities as of June 30, 2022 includes the Company's obligation of $27,703 in connection with the sale of Telephonics primarily related to income taxes payable. At June 30, 2022 and September 30, 2021, Griffon’s liabilities for Installations Services and other discontinued operations primarily relate to insurance claims, warranty and environmental reserves total $6,928 and $7,074, respectively. There was no reported revenue in the quarter and nine month period ended June 30, 2022 and 2021 for Installations Services and other discontinued operations.
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RESTRUCTURING CHARGES |
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Restructuring and Related Activities [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RESTRUCTURING CHARGES | RESTRUCTURING CHARGES In November 2019, Griffon announced the development of a next-generation business platform for CPP to enhance the growth, efficiency, and competitiveness of its U.S. operations, and on November 12, 2020, Griffon announced that CPP is broadening this strategic initiative to include additional North American facilities, the AMES United Kingdom (U.K.) and Australia businesses, and a manufacturing facility in China. On April 28, 2022, Griffon announced an accelerated timeline and reduced scope for the initiative, which will now be completed by the end of fiscal 2022. These changes reflect the rapid progress made with the initiative, and reduced investment in facilities expansion and equipment given recent significant increases in construction and equipment costs. Any remaining expenditures, after the end of fiscal 2022, including those related to the deployment of AMES' global information systems, will be included in the continuing operations of the business. Future investments in equipment, particularly for automation, will be part of normal-course annual capital expenditures. This initiative includes three key development areas. First, certain AMES U.S. and global operations will be consolidated to optimize facilities footprint and talent. Second, strategic investments in automation and facilities expansion will be made to increase the efficiency of our manufacturing and fulfillment operations, and support e-commerce growth. Third, multiple independent information systems will be unified into a single data and analytics platform, which will serve the whole AMES global enterprise. When fully implemented and the efficiencies are fully realized, we expect annual cash savings of $25,000 (previously $30,000 to $35,000). The cost to implement this new business platform, over the duration of the project, will now include one-time charges of approximately $50,000 (previously $65,000) and capital investments of approximately $15,000 (previously $65,000), net of future proceeds from the sale of exited facilities. In the quarter and nine months ended June 30, 2022, CPP incurred pre-tax restructuring and related exit costs approximating $5,909 and $12,391, respectively. During the nine months ended June 30, 2022, cash charges totaled $9,897 and non-cash, asset-related charges totaled $2,494; the cash charges included $3,751 for one-time termination benefits and other personnel-related costs and $6,146 for facility exit costs. Non-cash charges included a $1,766 impairment charge related to certain fixed assets at several manufacturing locations and $728 of inventory that have no recoverable value. During the nine months ended June 30, 2022, headcount was reduced by 20. In the quarter and nine months ended June 30, 2021, CPP incurred pre-tax restructuring and related exit costs approximating $4,081 and $14,662, respectively. During the nine months ended June 30, 2021, cash charges totaled $10,780 and non-cash, asset-related charges totaled $3,882; the cash charges included $1,783 for one-time termination benefits and other personnel related costs and $8,997 for facility and lease exit costs primarily driven by the consolidation of distribution facilities. Non-cash charges of $3,882 predominantly related to inventory that have no recoverable value. A summary of the restructuring and other related charges included in Cost of goods and services and SG&A expenses in the Company's Condensed Consolidated Statements of Operations were as follows:
The following table summarizes the accrued liabilities of the Company's restructuring actions:
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OTHER INCOME (EXPENSE) |
9 Months Ended |
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Jun. 30, 2022 | |
Other Income and Expenses [Abstract] | |
OTHER INCOME (EXPENSE) | OTHER INCOME (EXPENSE) For the quarters ended June 30, 2022 and 2021, Other income (expense) of $2,084 and $587, respectively, includes $265 and $77, respectively, of net currency exchange losses in connection with the translation of receivables and payables denominated in currencies other than the functional currencies of Griffon and its subsidiaries, net periodic benefit plan income of $1,118 and $226, respectively, as well as $(91) and $111, respectively, of net investment income (loss). Other income (expense) also includes rental income of $156 in both of the three months ended June 30, 2022 and 2021. Additionally, it includes royalty income of $828 for the three months ended June 30, 2022. For the nine months ended June 30, 2022 and 2021, Other income (expense) of $4,528 and $1,413, respectively, includes $297 and $302, respectively, of net currency exchange losses in connection with the translation of receivables and payables denominated in currencies other than the functional currencies of Griffon and its subsidiaries, net periodic benefit plan income of $3,145 and $680, respectively, as well as $(328) and $496, respectively, of net investment income (loss). Other income (expense) also includes rental income of $468 in both of the nine months ended June 30, 2022 and 2021. Additionally, it includes royalty income of $1,444 for the nine months ended June 30, 2022.
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WARRANTY LIABILITY |
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Product Warranties Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
WARRANTY LIABILITY | WARRANTY LIABILITY CPP and HBP offer warranties against product defects for periods generally ranging from to ten years, with limited lifetime warranties on certain door and fan models. Typical warranties require CPP and HBP to repair or replace the defective products during the warranty period at no cost to the customer. At the time revenue is recognized, Griffon records a liability for warranty costs, estimated based on historical experience, and periodically assesses its warranty obligations and adjusts the liability as necessary. CPP offers an express limited warranty for a period of ninety days on all products from the date of original purchase unless otherwise stated on the product or packaging from the date of original purchase. Changes in Griffon’s warranty liability, included in Accrued liabilities, were as follows:
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OTHER COMPREHENSIVE INCOME (LOSS) |
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Other Comprehensive Income (Loss), Net of Tax, Alternative [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
OTHER COMPREHENSIVE INCOME (LOSS) | OTHER COMPREHENSIVE INCOME (LOSS) The amounts recognized in other comprehensive income (loss) were as follows:
The components of Accumulated other comprehensive income (loss) are as follows:
Amounts reclassified from accumulated other comprehensive income (loss) to income were as follows:
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LEASES |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LEASES | LEASESThe Company recognizes right-of-use ("ROU") assets and lease liabilities on the balance sheet, with the exception of leases with a term of twelve months or less. The Company determines if an arrangement is a lease at inception. The ROU assets and short and long-term liabilities associated with our Operating leases are shown as separate line items on our Condensed Consolidated Balance Sheets. Finance leases are included in property, plant, and equipment, net, other accrued liabilities, and other non-current liabilities. The Company's finance leases are immaterial. ROU assets, along with any other related long-lived assets, are periodically evaluated for impairment. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. ROU assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. Lease payments primarily include rent and insurance costs (lease components). The Company's leases also include non-lease components such as real estate taxes and common-area maintenance costs. The Company elected the practical expedient to account for lease and non-lease components as a single component. In certain of the Company's leases, the non-lease components are variable and in accordance with the standard are therefore excluded from lease payments to determine the ROU asset. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. We use the implicit rate when readily determinable. Our determination of the lease term may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. For operating leases, fixed lease payments are recognized as operating lease cost on a straight-line basis over the lease term. For finance leases and impaired operating leases, the ROU asset is depreciated on a straight-line basis over the remaining lease term, along with recognition of interest expense associated with accretion of the lease liability. For leases with a lease term of 12 months or less (a "Short-term" lease), any fixed lease payments are recognized on a straight-line basis over such term, and are not recognized on the Condensed Consolidated Balance Sheets. Variable lease cost for both operating and finance leases, if any, is recognized as incurred. Components of operating lease costs are as follows:
(a) Primarily relates to common-area maintenance and property taxes. (b) Not recorded on the balance sheet. Supplemental cash flow information were as follows:
Supplemental Condensed Consolidated Balance Sheet information related to leases were as follows:
(1) Finance lease assets are recorded net of accumulated depreciation of $4,689 and $6,136 as of June 30, 2022 and September 30, 2021, respectively. Griffon has one finance lease outstanding for real estate located in Ocala, Florida. The lease matures in 2025 and bears interest at a fixed rate of approximately 5.6%. The Ocala, Florida lease contains two -year renewal options. At June 30, 2022, $13,426 was outstanding. During the nine months ended June 30, 2022, the financing lease on the Troy, Ohio location expired. The lease bore interest at a rate of approximately 5.0%, was secured by a mortgage on the real estate, which was guaranteed by Griffon, and had a one dollar buyout at the end of the lease. Griffon exercised the one dollar buyout option in November 2021. The aggregate future maturities of lease payments for operating leases and finance leases as of June 30, 2022 are as follows (in thousands):
(a) Excluding the nine months ended June 30, 2022. Average lease terms and discount rates at June 30, 2022 were as follows:
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LEASES | LEASESThe Company recognizes right-of-use ("ROU") assets and lease liabilities on the balance sheet, with the exception of leases with a term of twelve months or less. The Company determines if an arrangement is a lease at inception. The ROU assets and short and long-term liabilities associated with our Operating leases are shown as separate line items on our Condensed Consolidated Balance Sheets. Finance leases are included in property, plant, and equipment, net, other accrued liabilities, and other non-current liabilities. The Company's finance leases are immaterial. ROU assets, along with any other related long-lived assets, are periodically evaluated for impairment. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. ROU assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. Lease payments primarily include rent and insurance costs (lease components). The Company's leases also include non-lease components such as real estate taxes and common-area maintenance costs. The Company elected the practical expedient to account for lease and non-lease components as a single component. In certain of the Company's leases, the non-lease components are variable and in accordance with the standard are therefore excluded from lease payments to determine the ROU asset. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. We use the implicit rate when readily determinable. Our determination of the lease term may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. For operating leases, fixed lease payments are recognized as operating lease cost on a straight-line basis over the lease term. For finance leases and impaired operating leases, the ROU asset is depreciated on a straight-line basis over the remaining lease term, along with recognition of interest expense associated with accretion of the lease liability. For leases with a lease term of 12 months or less (a "Short-term" lease), any fixed lease payments are recognized on a straight-line basis over such term, and are not recognized on the Condensed Consolidated Balance Sheets. Variable lease cost for both operating and finance leases, if any, is recognized as incurred. Components of operating lease costs are as follows:
(a) Primarily relates to common-area maintenance and property taxes. (b) Not recorded on the balance sheet. Supplemental cash flow information were as follows:
Supplemental Condensed Consolidated Balance Sheet information related to leases were as follows:
(1) Finance lease assets are recorded net of accumulated depreciation of $4,689 and $6,136 as of June 30, 2022 and September 30, 2021, respectively. Griffon has one finance lease outstanding for real estate located in Ocala, Florida. The lease matures in 2025 and bears interest at a fixed rate of approximately 5.6%. The Ocala, Florida lease contains two -year renewal options. At June 30, 2022, $13,426 was outstanding. During the nine months ended June 30, 2022, the financing lease on the Troy, Ohio location expired. The lease bore interest at a rate of approximately 5.0%, was secured by a mortgage on the real estate, which was guaranteed by Griffon, and had a one dollar buyout at the end of the lease. Griffon exercised the one dollar buyout option in November 2021. The aggregate future maturities of lease payments for operating leases and finance leases as of June 30, 2022 are as follows (in thousands):
(a) Excluding the nine months ended June 30, 2022. Average lease terms and discount rates at June 30, 2022 were as follows:
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COMMITMENTS AND CONTINGENCIES |
9 Months Ended |
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Jun. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Legal and environmental Peekskill Site. Lightron Corporation (“Lightron”), a wholly-owned subsidiary of Griffon, once conducted operations at a location in the Town of Cortlandt, New York, just outside the city of Peekskill, New York (the “Peekskill Site”) which was owned by ISC Properties, Inc. (“ISCP”), a wholly-owned subsidiary of Griffon, for approximately three years. The operations, which included plating, may have involved the use of certain chemicals and solvents. ISCP sold the Peekskill Site in November 1982. On May 15, 2019 the United States Environmental Protection Agency ("EPA") added the Peekskill Site to the National Priorities List and on August 25, 2020, the EPA sent a letter to several parties, including Lightron and ISCP, requesting that each such party inform the EPA as to whether it would be willing to enter into discussions to perform certain studies to determine the nature and extent of any possible contamination. The EPA also sent a request for information under Section 104(e) of CERCLA to each party. Lightron and ISCP have informed the EPA that they are willing to participate in discussions regarding performing these studies. Lightron and ISCP have also submitted responses to certain items contained in the Section 104(e) information request, with additional responses to follow. Lightron and ISCP are currently in negotiations with the EPA regarding the scope of the aforementioned studies, which will address the Peekskill site and certain areas downstream from the Peekskill Site. Lightron has not engaged in any operations in over three decades. ISCP functioned solely as a real estate holding company, and has not held any real property in over three decades. Griffon does not acknowledge any responsibility to perform any investigation or remediation at the Peekskill Site. One of Griffon’s insurers is defending Lightron, ISCP and Griffon subject to a reservation of rights. Union Fork and Hoe, Frankfort, NY site. The former Union Fork and Hoe property in Frankfort, New York was acquired by AMES in 2006 as part of a larger acquisition, and has historic site contamination involving chlorinated solvents, petroleum hydrocarbons and metals. AMES entered into an Order on Consent with the New York State Department of Environmental Conservation (“DEC”). While the Order is without admission or finding of liability or acknowledgment that there has been a release of hazardous substances at the site, the Order required AMES to perform a remedial investigation of certain portions of the property and to recommend a remediation option. In 2011, remediation of chlorinated solvents in the groundwater was completed to the satisfaction of DEC. In June 2020, AMES completed the remediation required by the Record of Decision issued by DEC in 2019 ("ROD") and filed a Construction Completion Report, a Site Management Plan and an environmental easement with DEC. While AMES was implementing the remediation required by the ROD, DEC requested additional investigation of a small area on the site and of an area adjacent to the site perimeter. AMES investigated the on-site area and has completed remediation of that small area under a workplan approved by DEC. AMES also completed a workplan approved by DEC to investigate the areas adjacent to the site perimeter, and is now performing a statistical analysis to determine the area, if any, required to be remediated. AMES has a number of defenses to liability in this matter, including its rights under a previous Consent Judgment entered into between DEC and a predecessor of AMES relating to the site. AMES’ insurer has accepted AMES’ claim for a substantial portion of the costs incurred and to be incurred for both the on-site and off-site activities. Memphis, TN site. Hunter Fan Company (“Hunter”) operated its headquarters and a production plant in Memphis, Tennessee for over 50 years (the “Memphis Site”). While Hunter completed certain on-site remediation of PCB-contaminated soils, Hunter did not investigate the extent to which PCBs existed beneath the building itself nor determine whether off-site areas had been impacted. Hunter vacated the Memphis Site approximately twenty years ago, and the on-site buildings have now been demolished. The State of Tennessee Department of Environment and Conservation (“TDEC”) identified the Memphis Site as being potentially contaminated, raising the possibility that site operations could have resulted in soil and groundwater contamination involving volatile organic compounds and metals. The TDEC performed a preliminary assessment of the site and recommended to the United States Environmental Protection Agency (“EPA”) that the site be listed on the National Priorities List established under CERCLA. The TDEC further recommended that the EPA fund an investigation of potential soil gas contamination in receptors near the site. The TDEC has also indicated that it will proceed with this investigation if the EPA does not act. It is unknown whether the EPA will add the Memphis Site to the National Priorities List, whether a site investigation will reveal contamination and, if there is contamination, the extent of such contamination. However, given that certain PCB work was not completed in the past and the TDEC’s stated intent for the EPA to perform an investigation (and the statement by the TDEC that it will perform the investigation if the EPA will not), liability is probable in this matter. There are other potentially responsible parties for this site, including a former owner of Hunter; Hunter has notified such former owner of this matter, which may have certain liability for any required remediation. If the EPA decides to add this site to the National Priorities List, a Remedial Investigation/Feasibility Study (“RI/FS”) will be required. Hunter expects that EPA will ask it to perform this work. If Hunter does not reach an agreement with the EPA to perform this work, the EPA will implement the RI/FS on its own. Should the EPA implement the RI/FS or perform further studies and/or subsequently remediate the site without first reaching an agreement with one or more relevant parties, the EPA would likely seek from such parties, including Hunter, reimbursement for the costs incurred. General legal Griffon is subject to various laws and regulations relating to the protection of the environment and is a party to legal proceedings arising in the ordinary course of business. Management believes, based on facts presently known to it, that the resolution of the matters above and such other matters will not have a material adverse effect on Griffon’s consolidated financial position, results of operations or cash flows.
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DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION (Policies) |
9 Months Ended |
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Jun. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) for interim financial information, and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, these financial statements do not include all the information and footnotes required by US GAAP for complete financial statements. As such, they should be read together with Griffon’s Annual Report on Form 10-K for the year ended September 30, 2021, which provides a more complete explanation of Griffon’s accounting policies, financial position, operating results, business, properties and other matters. In the opinion of management, these financial statements reflect all adjustments considered necessary for a fair statement of interim results. Griffon’s CPP operations are seasonal; for this and other reasons, the financial results of the Company for any interim period are not necessarily indicative of the results for the full year. The condensed consolidated balance sheet information at September 30, 2021 was derived from the audited financial statements included in Griffon’s Annual Report on Form 10-K for the year ended September 30, 2021. The condensed consolidated financial statements include the accounts of Griffon and all subsidiaries. Intercompany accounts and transactions have been eliminated in consolidation. The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting periods. These estimates may be adjusted due to changes in economic, industry or customer financial conditions, as well as changes in technology or demand. Significant estimates include expected loss allowances for doubtful accounts receivable and returns, net realizable value of inventories, restructuring reserves, valuation of goodwill and intangible assets, sales, assumptions associated with pension benefit obligations and income or expenses, useful lives associated with depreciation and amortization of intangible and fixed assets, warranty reserves, sales incentive accruals, assumption associated with stock based compensation valuation, income taxes and tax valuation reserves, environmental reserves, legal reserves, insurance reserves, the valuation of assets and liabilities of discontinued operations, assumptions associated with valuation of acquired assets and assumed liabilities of acquired companies and the accompanying disclosures. These estimates are based on management’s best knowledge of current events and actions Griffon may undertake in the future. Actual results may ultimately differ from these estimates. Certain amounts in the prior year have been reclassified to conform to current year presentation.
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Fair Value Measurements | The carrying values of cash and equivalents, accounts receivable, accounts and notes payable, and revolving credit and variable interest rate debt approximate fair value due to either the short-term nature of such instruments or the fact that the interest rate of the revolving credit and variable rate debt is based upon current market rates. Applicable accounting guidance establishes a fair value hierarchy requiring the Company to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the hierarchy is based on the lowest level of input that is significant to the fair value measurement. The accounting guidance establishes three levels of inputs that may be used to measure fair value, as follows: •Level 1 inputs are measured and recorded at fair value based upon quoted prices in active markets for identical assets. •Level 2 inputs include inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices in active markets for similar assets and liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of assets or liabilities. •Level 3 inputs are unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.
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Inventories | Inventories are stated at the lower of cost (first-in, first-out or average cost) or market. |
Issued but not yet effective accounting pronouncements and New Accounting Standards Implemented | Issued but not yet effective accounting pronouncements In October 2021, the Financial Accounting Standards Board ("FASB") issued ASU No. 2021-08, Business Combinations (Topic 805); Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. This new guidance affects all entities that enter into a business combination within the scope of ASC 805-10. Under this new guidance, the acquirer should determine what contract assets and/or liabilities it would have recorded under ASC 606 (Revenue Guidance) as of the acquisition date, as if the acquirer had entered into the original contract at the same date and on the same terms as the acquirer. Under current U.S. GAAP, contract assets and contract liabilities acquired in a business combination are recorded by the acquirer at fair value. This update is effective for the Company beginning in fiscal 2023. Early adoption is permitted. The Company is currently evaluating the effects that the adoption of this guidance will have on our consolidated financial statements and related disclosures. New Accounting Standards Implemented In December 2019, the FASB issued guidance on simplifying the accounting for income taxes by clarifying and amending existing guidance related to the recognition of franchise tax, the evaluation of a step up in the tax basis of goodwill, and the effects of enacted changes in tax laws or rates in the effective tax rate computation, among other clarifications. This guidance became effective for the Company beginning in fiscal 2022. We adopted the recognition of non-income taxes on the modified retrospective basis. Adoption of this standard did not have a material impact on our consolidated financial statements and the related disclosures. In August 2018, the FASB issued guidance to clarify disclosure requirements related to defined benefit pension and other post-retirement plans. The guidance is effective for fiscal years beginning after December 15, 2020, with early adoption permitted, and was effective for the Company in our fiscal year beginning in October 1, 2021. Adoption of this standard did not have a material impact on our consolidated financial statements and the related disclosures. The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements, and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.
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ACQUISITIONS (Tables) |
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Business Combination and Asset Acquisition [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Pro Forma Information | The following unaudited proforma summary from continuing operations presents consolidated information as if the Company acquired Hunter on October 1, 2020:
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Schedule of Assets Acquired and Liabilities Assumed | The calculation of the preliminary purchase price allocation is as follows:
(1) Includes $67,201 of gross accounts receivable of which $2,599 was not expected to be collected. The fair value of accounts receivable approximated book value acquired. (2) Includes $113,287 of gross inventory of which $2,988 was reserved for obsolete items. (3) Deferred tax liability recorded on intangibles assets.
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Schedule of Intangible Assets and Goodwill | The amounts assigned to goodwill and major intangible asset classifications for the Hunter acquisition are as follows:
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INVENTORIES (Tables) |
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Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Inventory | The following table details the components of inventory:
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PROPERTY, PLANT AND EQUIPMENT (Tables) |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Property, Plant and Equipment | The following table details the components of property, plant and equipment, net:
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CREDIT LOSSES (Tables) |
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Credit Loss [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accounts Receivable, Allowance for Credit Losses | The following table provides a roll-forward of the allowance for credit losses that is deducted from the amortized cost basis of accounts receivable to present the net amount expected to be collected:
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GOODWILL AND OTHER INTANGIBLES (Tables) |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Changes in Carrying Value of Goodwill | The following table provides changes in the carrying value of goodwill by segment during the nine months ended June 30, 2022:
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Summary of Gross Carrying Value and Accumulated Amortization of Intangible Assets | The following table provides the gross carrying value and accumulated amortization for each major class of intangible assets:
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LONG-TERM DEBT (Tables) |
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Long-Term Debt |
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Summary of Interest Expense Incurred |
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SHAREHOLDERS' EQUITY (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Compensation Expense Relating to Stock-based Incentive Plans | The following table summarizes the Company’s compensation expense relating to all stock-based incentive plans:
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EARNINGS PER SHARE (EPS) (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Reconciliation of Share Amounts Used in Earnings Per Share | The following table is a reconciliation of the share amounts (in thousands) used in computing earnings per share:
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BUSINESS SEGMENTS (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Reportable Segments from Continuing Operations | Information on Griffon’s reportable segments from continuing operations is as follows:
* Unallocated amounts typically include general corporate expenses not attributable to a reportable segment.
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Summary of Disaggregation of Revenue by End Market and Segment | The following table presents revenue disaggregated by end market and segment:
The following table presents revenue disaggregated by geography based on the location of the Company's customer:
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EMPLOYEE BENEFIT PLANS (Tables) |
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Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Defined Benefit Plans Included in Other Income | Defined benefit pension expense (income) included in Other Income (Expense), net was as follows:
|
DISCONTINUED OPERATIONS (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Disposal Groups, Including Discontinued Operations, Income Statement, Balance Sheet and Additional Disclosures | The following amounts related to Telephonics have been segregated from Griffon's continuing operations and are reported as a discontinued operation:
The following amounts summarize the total assets and liabilities related to Telephonics, Installation Services and other discontinued activities which have been segregated from Griffon’s continuing operations, and are reported as assets and liabilities of discontinued operations in the Condensed Consolidated Balance Sheets:
|
RESTRUCTURING CHARGES (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of the Restructuring and Other Related Charges | A summary of the restructuring and other related charges included in Cost of goods and services and SG&A expenses in the Company's Condensed Consolidated Statements of Operations were as follows:
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Summary of Accrued Liability for the Restructuring and Related Charges | The following table summarizes the accrued liabilities of the Company's restructuring actions:
|
WARRANTY LIABILITY (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Product Warranties Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Changes in Warranty Liability, Included in Accrued Liabilities | Changes in Griffon’s warranty liability, included in Accrued liabilities, were as follows:
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OTHER COMPREHENSIVE INCOME (LOSS) (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Comprehensive Income (Loss), Net of Tax, Alternative [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Comprehensive Income (Loss) | The amounts recognized in other comprehensive income (loss) were as follows:
The components of Accumulated other comprehensive income (loss) are as follows:
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Reclassification from Accumulated Other Comprehensive Income (Loss) | Amounts reclassified from accumulated other comprehensive income (loss) to income were as follows:
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LEASES (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Operating Lease Cost, Cash Flow Information, and Average Lease Terms and Discount Rates | Components of operating lease costs are as follows:
(a) Primarily relates to common-area maintenance and property taxes. (b) Not recorded on the balance sheet. Supplemental cash flow information were as follows:
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Supplemental Condensed Consolidated Balance Sheet Information | Supplemental Condensed Consolidated Balance Sheet information related to leases were as follows:
(1) Finance lease assets are recorded net of accumulated depreciation of $4,689 and $6,136 as of June 30, 2022 and September 30, 2021, respectively.
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Aggregate Future Maturities of Lease Payments for Operating Leases | The aggregate future maturities of lease payments for operating leases and finance leases as of June 30, 2022 are as follows (in thousands):
(a) Excluding the nine months ended June 30, 2022.
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Aggregate Future Maturities of Lease Payments for Finance Leases | The aggregate future maturities of lease payments for operating leases and finance leases as of June 30, 2022 are as follows (in thousands):
(a) Excluding the nine months ended June 30, 2022.
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DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION (Details) $ in Thousands |
9 Months Ended | |
---|---|---|
Jan. 24, 2022
USD ($)
|
Jun. 30, 2022
segment
|
|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Number of reportable segments | segment | 2 | |
Business Acquisition [Line Items] | ||
Number of reportable segments | segment | 2 | |
Term Loan B due 2029 | Term Loan | ||
Business Acquisition [Line Items] | ||
Face amount | $ | $ 800,000 | |
Debt instrument, term | 7 years | |
Hunter Fan Company | ||
Business Acquisition [Line Items] | ||
Business combination, consideration transferred | $ | $ 845,000 |
ACQUISITIONS - Schedule of Pro Forma Information (Details) - Hunter Fan Company - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Business Acquisition [Line Items] | ||||
Revenue | $ 768,179 | $ 669,199 | $ 2,230,056 | $ 1,984,377 |
Income from continuing operations | $ 52,782 | $ 11,149 | $ 127,299 | $ 65,811 |
ACQUISITIONS - Schedule of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands |
Jun. 30, 2022 |
Jan. 24, 2022 |
Sep. 30, 2021 |
---|---|---|---|
Business Acquisition [Line Items] | |||
Goodwill | $ 705,356 | $ 426,148 | |
Hunter Fan Company | |||
Business Acquisition [Line Items] | |||
Accounts receivable | $ 64,602 | ||
Inventories | 110,299 | ||
Other current assets | 7,940 | ||
Property, plant and equipment | 15,007 | ||
Operating lease right-of-use assets | 12,447 | ||
Goodwill | 281,668 | ||
Intangible assets | 606,000 | ||
Total assets acquired | 1,097,963 | ||
Accounts payable and accrued liabilities | 71,205 | ||
Current portion of operating lease liabilities | 3,323 | ||
Deferred tax liability | 161,381 | ||
Long-term operating lease liabilities | 9,123 | ||
Other long-term liabilities | 1,467 | ||
Total liabilities assumed | 246,499 | ||
Total net assets acquired | 851,464 | ||
Gross accounts receivable | 67,201 | ||
Allowance for accounts receivable | 2,599 | ||
Gross inventory | 113,287 | ||
Inventory reserves | $ 2,988 |
ACQUISITIONS - Summary of Goodwill and Intangible Asset Classifications (Details) - USD ($) $ in Thousands |
Jan. 24, 2022 |
Jun. 30, 2022 |
Sep. 30, 2021 |
---|---|---|---|
Business Acquisition [Line Items] | |||
Goodwill | $ 705,356 | $ 426,148 | |
Hunter Fan Company | |||
Business Acquisition [Line Items] | |||
Goodwill | $ 281,668 | ||
Indefinite-lived intangibles (Hunter and Casablanca brands) | 356,000 | ||
Definite-lived intangibles (Customer relationships) | 250,000 | ||
Total goodwill and intangible assets | $ 887,668 | ||
Definite-lived intangibles, average life | 20 years |
INVENTORIES - Summary of Inventories Stated at Lower Cost (Details) - USD ($) $ in Thousands |
Jun. 30, 2022 |
Sep. 30, 2021 |
---|---|---|
Inventory Disclosure [Abstract] | ||
Raw materials and supplies | $ 169,606 | $ 133,684 |
Work in process | 51,673 | 48,531 |
Finished goods | 486,899 | 290,579 |
Total | $ 708,178 | $ 472,794 |
PROPERTY, PLANT AND EQUIPMENT - Summary of Property Plant and Equipment (Details) - USD ($) $ in Thousands |
Jun. 30, 2022 |
Sep. 30, 2021 |
---|---|---|
Property, Plant and Equipment [Line Items] | ||
Property plant and equipment gross | $ 749,521 | $ 715,597 |
Accumulated depreciation and amortization | (449,677) | (425,375) |
Total | 299,844 | 290,222 |
Land, building and building improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property plant and equipment gross | 154,187 | 155,574 |
Machinery and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property plant and equipment gross | 550,899 | 520,110 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property plant and equipment gross | $ 44,435 | $ 39,913 |
PROPERTY, PLANT AND EQUIPMENT - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Property, Plant and Equipment [Line Items] | ||||
Depreciation and amortization expense | $ 12,173 | $ 10,896 | $ 34,650 | $ 31,950 |
Selling, general and administrative expenses | ||||
Property, Plant and Equipment [Line Items] | ||||
Depreciation and amortization expense | $ 4,578 | $ 3,724 | $ 12,234 | $ 10,672 |
CREDIT LOSSES (Details) - USD ($) $ in Thousands |
9 Months Ended | |
---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning Balance, October 1 | $ 8,787 | $ 8,178 |
Allowance for credit losses acquired | 2,599 | 0 |
Provision for expected credit losses | 2,430 | 1,287 |
Amounts written off charged against the allowance | (159) | (238) |
Other, primarily foreign currency translation | (116) | 20 |
Ending Balance, June 30 | $ 13,541 | $ 9,247 |
GOODWILL AND OTHER INTANGIBLES - Summary of Changes in Carrying Value of Goodwill (Details) $ in Thousands |
9 Months Ended |
---|---|
Jun. 30, 2022
USD ($)
| |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | $ 426,148 |
Hunter Acquisition | 281,668 |
Foreign currency translations adjustments | (2,460) |
Goodwill, ending balance | 705,356 |
Consumer and Professional Products | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | 234,895 |
Hunter Acquisition | 281,668 |
Foreign currency translations adjustments | (2,460) |
Goodwill, ending balance | 514,103 |
Home and Building Products | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | 191,253 |
Hunter Acquisition | 0 |
Foreign currency translations adjustments | 0 |
Goodwill, ending balance | $ 191,253 |
GOODWILL AND OTHER INTANGIBLES - Summary of Gross Carrying Value and Accumulated Amortization of Intangible Assets (Details) - USD ($) $ in Thousands |
9 Months Ended | |
---|---|---|
Jun. 30, 2022 |
Sep. 30, 2021 |
|
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 449,583 | $ 201,161 |
Accumulated Amortization | 89,860 | 78,233 |
Trademarks | 579,301 | 227,097 |
Total intangible assets | 1,028,884 | 428,258 |
Customer relationships & other | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 435,724 | 187,732 |
Accumulated Amortization | $ 87,009 | 75,794 |
Average Life (Years) | 23 years | |
Technology and patents | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 13,859 | 13,429 |
Accumulated Amortization | $ 2,851 | $ 2,439 |
Average Life (Years) | 13 years |
GOODWILL AND OTHER INTANGIBLES - Narrative (Details) - USD ($) |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Carry amount of intangible assets related to foreign currency translation | $ 4,630,000 | |||
Amortization expense | 5,514,000 | $ 2,409,000 | $ 12,371,000 | $ 7,168,000 |
Estimated amortization expense, remainder of fiscal year | 5,462,000 | 5,462,000 | ||
Estimated amortization expense, year one | 22,000,000 | 22,000,000 | ||
Estimated amortization expense, year two | 22,000,000 | 22,000,000 | ||
Estimated amortization expense, year three | 22,000,000 | 22,000,000 | ||
Estimated amortization expense, year four | 22,000,000 | 22,000,000 | ||
Estimated amortization expense, year five | 22,000,000 | 22,000,000 | ||
Estimated amortization expense, thereafter | $ 244,261,000 | 244,261,000 | ||
Goodwill impairment | 0 | |||
Indefinite-lived intangible asset (excluding goodwill) impairment | $ 0 |
SHAREHOLDERS' EQUITY - Compensation Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Stockholders' Equity Note [Abstract] | ||||
Restricted stock | $ 5,130 | $ 4,544 | $ 13,334 | $ 12,321 |
ESOP | 889 | 1,046 | 2,644 | 2,770 |
Total stock based compensation | $ 6,019 | $ 5,590 | $ 15,978 | $ 15,091 |
EARNINGS PER SHARE (EPS) (Details) - shares shares in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Earnings Per Share [Abstract] | ||||
Common shares outstanding (in shares) | 57,064 | 56,677 | 57,064 | 56,677 |
Unallocated ESOP shares (in shares) | (1,396) | (1,912) | (1,396) | (1,912) |
Non-vested restricted stock (in shares) | (3,565) | (3,814) | (3,565) | (3,814) |
Impact of weighted average shares (in shares) | (369) | (48) | (576) | (172) |
Weighted average shares outstanding - basic (in shares) | 51,734 | 50,903 | 51,527 | 50,779 |
Incremental shares from stock based compensation (in shares) | 2,180 | 2,601 | 2,177 | 2,527 |
Weighted average shares outstanding - diluted (in shares) | 53,914 | 53,504 | 53,704 | 53,306 |
BUSINESS SEGMENTS - Narrative (Details) |
9 Months Ended |
---|---|
Jun. 30, 2022
segment
| |
Segment Reporting [Abstract] | |
Number of reportable segments | 2 |
BUSINESS SEGMENTS - Summary of Reportable Segments from Continuing Operations (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Segment Reporting Information [Line Items] | ||||
Revenue | $ 768,179 | $ 584,218 | $ 2,139,545 | $ 1,700,423 |
Consumer and Professional Products | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 362,634 | 324,826 | 1,056,819 | 947,739 |
Home and Building Products | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | $ 405,545 | $ 259,392 | $ 1,082,726 | $ 752,684 |
BUSINESS SEGMENTS - Summary of Segment Assets (Details) - USD ($) $ in Thousands |
Jun. 30, 2022 |
Sep. 30, 2021 |
---|---|---|
Segment Reporting Information [Line Items] | ||
Continuing assets | $ 3,501,122 | $ 2,324,842 |
Discontinued operations | 3,110 | 4,029 |
Total Assets | 3,504,232 | 2,604,685 |
Discontinued Operations, Not Held-for-sale | ||
Segment Reporting Information [Line Items] | ||
Discontinued operations | 3,110 | 4,029 |
Discontinued Operations, Held-for-sale | ||
Segment Reporting Information [Line Items] | ||
Discontinued operations | 0 | 275,814 |
Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Continuing assets | 3,317,222 | 2,044,040 |
Operating Segments | Consumer and Professional Products | ||
Segment Reporting Information [Line Items] | ||
Continuing assets | 2,575,836 | 1,377,618 |
Operating Segments | Home and Building Products | ||
Segment Reporting Information [Line Items] | ||
Continuing assets | 741,386 | 666,422 |
Corporate | ||
Segment Reporting Information [Line Items] | ||
Continuing assets | $ 183,900 | $ 280,802 |
EMPLOYEE BENEFIT PLANS (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Retirement Benefits [Abstract] | ||||
Interest cost | $ 943 | $ 745 | $ 2,650 | $ 2,234 |
Expected return on plan assets | (2,905) | (2,544) | (8,329) | (7,633) |
Amortization: | ||||
Recognized actuarial loss | 844 | 1,573 | 2,534 | 4,719 |
Net periodic expense (income) | $ (1,118) | $ (226) | $ (3,145) | $ (680) |
DISCONTINUED OPERATIONS - Balance Sheets Information of Installation Services and Other Discontinued Activities (Details) - USD ($) $ in Thousands |
Jun. 30, 2022 |
Sep. 30, 2021 |
---|---|---|
Assets of discontinued operations: | ||
Prepaid and other current assets | $ 487 | $ 605 |
Other long-term assets | 2,623 | 3,424 |
Total assets of discontinued operations | 3,110 | 4,029 |
Liabilities of discontinued operations: | ||
Accrued liabilities, current | 30,806 | 3,280 |
Other long-term liabilities | 3,825 | 3,794 |
Total liabilities of discontinued operations | $ 34,631 | $ 7,074 |
OTHER INCOME (EXPENSE) (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Other Income and Expenses [Abstract] | ||||
Other income (expense) | $ 2,084 | $ 587 | $ 4,528 | $ 1,413 |
Foreign currency transaction gain (loss), before tax | 265 | 77 | (297) | (302) |
Net periodic benefit income | 1,118 | 226 | 3,145 | 680 |
Investment income, net | (91) | 111 | (328) | 496 |
Rental income | 156 | $ 156 | 468 | $ 468 |
Royalty income | $ 828 | $ 1,444 |
WARRANTY LIABILITY - Narrative (Details) |
9 Months Ended |
---|---|
Jun. 30, 2022 | |
Home and Building Products | Minimum | |
Product Warranty Liability [Line Items] | |
Product warranty period | 1 year |
Home and Building Products | Maximum | |
Product Warranty Liability [Line Items] | |
Product warranty period | 10 years |
CPP | |
Product Warranty Liability [Line Items] | |
Product warranty period | 90 days |
WARRANTY LIABILITY - Changes in Warrant Liability (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Movement in Standard and Extended Product Warranty Accrual, Increase (Decrease) [Roll Forward] | ||||
Balance, beginning of period | $ 17,958 | $ 7,920 | $ 7,818 | $ 6,268 |
Warranties issued and changes in estimated pre-existing warranties | 5,119 | 3,579 | 14,368 | 12,088 |
Actual warranty costs incurred | (4,937) | (2,952) | (10,399) | (9,809) |
Other warranty liabilities assumed from acquisitions | 0 | 0 | 6,353 | 0 |
Balance, end of period | $ 18,140 | $ 8,547 | $ 18,140 | $ 8,547 |
OTHER COMPREHENSIVE INCOME (LOSS) - AOCI (Details) - USD ($) $ in Thousands |
Jun. 30, 2022 |
Mar. 31, 2022 |
Dec. 31, 2021 |
Sep. 30, 2021 |
Jun. 30, 2021 |
Mar. 31, 2021 |
Dec. 31, 2020 |
Sep. 30, 2020 |
---|---|---|---|---|---|---|---|---|
Class of Stock [Line Items] | ||||||||
Accumulated other comprehensive income (loss) | $ 906,315 | $ 883,214 | $ 812,385 | $ 807,158 | $ 785,341 | $ 764,431 | $ 740,047 | $ 700,151 |
Foreign currency translation adjustments | ||||||||
Class of Stock [Line Items] | ||||||||
Accumulated other comprehensive income (loss) | (33,343) | (19,250) | ||||||
Pension and other defined benefit plans | ||||||||
Class of Stock [Line Items] | ||||||||
Accumulated other comprehensive income (loss) | (26,798) | (28,802) | ||||||
Cash flow hedges | ||||||||
Class of Stock [Line Items] | ||||||||
Accumulated other comprehensive income (loss) | 2,185 | 2,075 | ||||||
Accumulated other comprehensive income (loss), attributable to parent | ||||||||
Class of Stock [Line Items] | ||||||||
Accumulated other comprehensive income (loss) | $ (57,956) | $ (43,779) | $ (48,728) | $ (45,977) | $ (51,437) | $ (54,176) | $ (58,951) | $ (72,092) |
LEASES - Schedule of Lease Cost (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Lease Cost | ||||
Fixed | $ 13,021 | $ 9,664 | $ 32,674 | $ 28,841 |
Variable | 2,742 | 1,877 | 6,278 | 5,690 |
Short-term | 1,741 | 897 | 4,576 | 2,952 |
Total | $ 17,504 | $ 12,438 | $ 43,528 | $ 37,483 |
LEASES - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands |
9 Months Ended | |
---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flows from operating leases | $ 34,759 | $ 32,336 |
Financing cash flows from finance leases | 1,936 | 2,824 |
Total | $ 36,695 | $ 35,160 |
LEASES - Narrative (Details) |
9 Months Ended | |
---|---|---|
Jun. 30, 2022
USD ($)
option
|
Sep. 30, 2021
USD ($)
|
|
Lessee, Lease, Description [Line Items] | ||
Long-term debt | $ 1,587,782,000 | $ 1,045,683,000 |
Finance Lease Obligation | ||
Lessee, Lease, Description [Line Items] | ||
Long-term debt | 13,426,000 | $ 14,590,000 |
Troy, Ohio | ||
Lessee, Lease, Description [Line Items] | ||
Lessee, finance lease buyout amount | $ 1 | |
Ocala, Florida | ||
Lessee, Lease, Description [Line Items] | ||
Number of option to extend | option | 2 | |
Lease renewal term | 5 years |
LEASES - Summary of Future Maturities of Lease Payments for Operating Leases (Details) - USD ($) $ in Thousands |
Jun. 30, 2022 |
Sep. 30, 2021 |
---|---|---|
Operating Leases | ||
2022 | $ 10,292 | |
2023 | 41,315 | |
2024 | 33,727 | |
2025 | 30,938 | |
2026 | 22,586 | |
2027 | 18,474 | |
Thereafter | 96,648 | |
Total lease payments | 253,980 | |
Less: Imputed Interest | (54,005) | |
Present value of lease liabilities | 199,975 | $ 149,196 |
Finance Leases | ||
2022 | 754 | |
2023 | 2,837 | |
2024 | 2,308 | |
2025 | 2,130 | |
2026 | 2,106 | |
2027 | 2,074 | |
Thereafter | 5,702 | |
Total lease payments | 17,911 | |
Less: Imputed Interest | (3,213) | |
Present value of lease liabilities | $ 14,698 | $ 16,467 |
LEASES - Weighted Average Lease Terms and Discount Rates (Details) |
Jun. 30, 2022 |
---|---|
Weighted-average remaining lease term (years): | |
Operating leases | 8 years 6 months |
Finance Leases | 7 years 7 months 6 days |
Weighted-average discount rate: | |
Operating Leases | 5.07% |
Finance Leases | 5.50% |
COMMITMENTS AND CONTINGENCIES (Details) |
9 Months Ended |
---|---|
Jun. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Site contingency, ownership period | 3 years |
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