CONSOLIDATING GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION

6 Months Ended

Mar. 31, 2012

Consolidating Guarantor And Non Guarantor Financial Information [Text Block]

NOTE 20 — CONSOLIDATING GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION

Griffon’s Senior Notes are fully and unconditionally guaranteed, jointly and severally, on a senior secured basis by the domestic assets of Clopay Building Products Company, Inc., Clopay Plastic Products Company, Inc., Telephonics Corporation and Ames True Temper Inc. In accordance with Rule 3-10 of Regulation S-X promulgated under the Securities Act of 1933, presented below are condensed consolidating financial information as of March 31, 2012 and September 30, 2011 and for the three and six months ended March 31, 2012 and 2011. The financial information may not necessarily be indicative of results of operations or financial position had the guarantor companies or non-guarantor companies operated as independent entities. The guarantor companies and the non-guarantor companies include the consolidated financial results of their wholly-owned subsidiaries accounted for under the equity method.

CONDENSED CONSOLIDATING BALANCE SHEETS
At March 31, 2012

($ in thousands)	Parent Company		Guarantor Companies		Non-Guarantor Companies			Elimination			Consolidation
CURRENT ASSETS
Cash and equivalents	$	101,314	$	22,315	$	41,250		$	—		$	164,879
Accounts receivable, net of allowances		—		190,672		99,162			—			289,834
Contract costs and recognized income not yet billed, net of progress payments		—		64,772		2,194			—			66,966
Inventories, net		—		214,884		70,658			—			285,542
Prepaid and other current assets		3,435		46,930		(242	)		(3,665	)		46,458
Assets of discontinued operations		—		—		1,312			—			1,312
Total Current Assets		104,749		539,573		214,334			(3,665	)		854,991
PROPERTY, PLANT AND EQUIPMENT, net		1,313		237,538		122,605			—			361,456
GOODWILL		—		283,491		79,440			—			362,931
INTANGIBLE ASSETS, net		—		153,305		81,286			—			234,591
INTERCOMPANY RECEIVABLE		539,962		291,998		189,237			(1,021,197	)		—
EQUITY INVESTMENTS IN SUBSIDIARIES		2,850,415		750,616		2,397,506			(5,998,537	)		—
OTHER ASSETS		53,195		57,425		2,782			(81,141	)		32,261
ASSETS OF DISCONTINUED OPERATIONS		—		—		3,050			—			3,050
Total Assets	$	3,549,634	$	2,313,946	$	3,090,240		$	(7,104,540	)	$	1,849,280
CURRENT LIABILITIES
Notes payable and current portion of long-term debt	$	1,000	$	1,012	$	14,243		$	—		$	16,255
Accounts payable and accrued liabilities		40,367		181,518		52,814			(3,665	)		271,034
Liabilities of discontinued operations		—		—		3,334			—			3,334
Total Current Liabilities		41,367		182,530		70,391			(3,665	)		290,623
LONG-TERM DEBT, net of debt discounts		654,884		10,300		23,827			—			689,011
INTERCOMPANY PAYABLES		—		161,162		860,035			(1,021,197	)		—
OTHER LIABILITIES		78,941		183,570		20,123			(81,141	)		201,493
LIABILITIES OF DISCONTINUED OPERATIONS		—		—		4,788			—			4,788
Total Liabilities		775,192		537,562		979,164			(1,106,003	)		1,185,915
SHAREHOLDERS’ EQUITY		2,774,442		1,776,384		2,111,076			(5,998,537	)		663,365
Total Liabilities and Shareholders’ Equity	$	3,549,634	$	2,313,946	$	3,090,240		$	(7,104,540	)	$	1,849,280

CONDENSED CONSOLIDATING BALANCE SHEETS
At September 30, 2011

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

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
For the Three Months Ended March 31, 2012

($ in thousands)	Parent Company			Guarantor Companies			Non-Guarantor Companies			Elimination			Consolidation
Revenue	$	—		$	344,442		$	151,309		$	(13,320	)	$	482,431
Cost of goods and services		—			264,078			129,241			(13,689	)		379,630
Gross profit		—			80,364			22,068			369			102,801
Selling, general and administrative expenses		4,627			65,072			16,546			(93	)		86,152
Restructuring and other related charges		—			—			—			—			—
Total operating expenses		4,627			65,072			16,546			(93	)		86,152
Income (loss) from operations		(4,627	)		15,292			5,522			462			16,649
Other income (expense)
Interest income (expense), net		(3,345	)		(5,327	)		(4,247	)		—			(12,919	)
Loss from debt extinguishment, net		—			—			—			—			—
Other intercompany		—			—			—			—			—
Other, net		109			2,746			(1,364	)		(462	)		1,029
Total other income (expense)		(3,236	)		(2,581	)		(5,611	)		(462	)		(11,890	)
Income (loss) before taxes		(7,863	)		12,711			(89	)		—			4,759
Provision (benefit) for income taxes		(3,316	)		6,061			(13	)		—			2,732
Income (loss) before equity in net income (loss) of subsidiaries		(4,547	)		6,650			(76	)		—			2,027
Equity in net income (loss) of subsidiaries		6,574			(38	)		6,650			(13,186	)		—
Net income (loss)	$	2,027		$	6,612		$	6,574		$	(13,186	)	$	2,027

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
For the Three Months Ended March 31, 2011

($ in thousands)	Parent Company			Guarantor Companies			Non- Guarantor Companies			Elimination			Consolidation
Revenue	$	—		$	363,254		$	123,554		$	(10,679	)	$	476,129
Cost of goods and services		—			282,809			103,226			(11,049	)		374,986
Gross profit		—			80,445			20,328			370			101,143
Selling, general and administrative expenses		5,481			64,308			14,666			(92	)		84,363
Restructuring and other related charges		—			1,153			59			—			1,212
Total operating expenses		5,481			65,461			14,725			(92	)		85,575
Income (loss) from operations		(5,481	)		14,984			5,603			462			15,568
Other income (expense)
Interest income (expense), net		(3,572	)		2,472			(10,122	)		—			(11,222	)
Loss from debt extinguishment, net		—			(397	)		(25,767	)		—			(26,164	)
Other, net		168			(89	)		1,560			(462	)		1,177
Total other income (expense)		(3,404	)		1,986			(34,329	)		(462	)		(36,209	)
Income (loss) before taxes and discontinued operations		(8,885	)		16,970			(28,726	)		—			(20,641	)
Provision (benefit) for income taxes		(3,651	)		8,071			(11,060	)		—			(6,640	)
Income (loss) before equity in net income (loss) of subsidiaries		(5,234	)		8,899			(17,666	)		—			(14,001	)
Equity in net income of subsidiaries		(8,767	)		3,734			8,899			(3,866	)		—
Net income (loss)	$	(14,001	)	$	12,633		$	(8,767	)	$	(3,866	)	$	(14,001	)

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
For the Six Months Ended March 31, 2012

($ in thousands)	Parent Company			Guarantor Companies			Non-Guarantor Companies			Elimination			Consolidation
Revenue	$	—		$	682,504		$	278,272		$	(27,314	)	$	933,462
Cost of goods and services		—			517,605			238,401			(28,053	)		727,953
Gross profit		—			164,899			39,871			739			205,509
Selling, general and administrative expenses		9,244			129,063			31,097			(185	)		169,219
Restructuring and other related charges		—			1,779			16			—			1,795
Total operating expenses		9,244			130,842			31,113			(185	)		171,014
Income (loss) from operations		(9,244	)		34,057			8,758			924			34,495
Other income (expense)
Interest income (expense), net		(6,743	)		(11,309	)		(7,867	)		—			(25,919	)
Loss from debt extinguishment, net		—			—			—			—			—
Other intercompany		—			—			—			—			—
Other, net		174			5,588			(3,762	)		(924	)		1,076
Total other income (expense)		(6,569	)		(5,721	)		(11,629	)		(924	)		(24,843	)
Income (loss) before taxes		(15,813	)		28,336			(2,871	)		—			9,652
Provision (benefit) for income taxes		(7,757	)		12,787			109			—			5,139
Income (loss) before equity in net income (loss) of subsidiaries		(8,056	)		15,549			(2,980	)		—			4,513
Equity in net income (loss) of subsidiaries		12,569			(2,878	)		15,549			(25,240	)		—
Net income (loss)	$	4,513		$	12,671		$	12,569		$	(25,240	)	$	4,513

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
For the Six Months Ended March 31, 2011

($ in thousands)	Parent Company			Guarantor Companies			Non- Guarantor Companies			Elimination			Consolidation
Revenue	$	—		$	668,901		$	239,372		$	(17,742	)	$	890,531
Cost of goods and services		—			523,413			196,484			(18,368	)		701,529
Gross profit		—			145,488			42,888			626			189,002
Selling, general and administrative expenses		10,563			124,961			29,440			(156	)		164,808
Restructuring and other related charges		—			2,482			123			—			2,605
Total operating expenses		10,563			127,443			29,563			(156	)		167,413
Income (loss) from operations		(10,563	)		18,045			13,325			782			21,589
Other income (expense)
Interest income (expense), net		(5,397	)		1,699			(18,678	)		—			(22,376	)
Loss from debt extinguishment, net		—			(397	)		(25,767	)		—			(26,164	)
Other, net		1,307			(2,231	)		4,968			(782	)		3,262
Total other income (expense)		(4,090	)		(929	)		(39,477	)		(782	)		(45,278	)
Income (loss) before taxes and discontinued operations		(14,653	)		17,116			(26,152	)		—			(23,689	)
Provision (benefit) for income taxes		(5,886	)		11,217			(13,339	)		—			(8,008	)
Income (loss) before equity in net income of subsidiaries		(8,767	)		5,899			(12,813	)		—			(15,681	)
Equity in net income (loss) of subsidiaries		(6,914	)		14,359			5,899			(13,344	)		—
Net income (loss)	$	(15,681	)	$	20,258		$	(6,914	)	$	(13,344	)	$	(15,681	)

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
For the Six Months Ended March 31, 2012

($ in thousands)	Parent Company			Guarantor Companies			Non-Guarantor Companies			Elimination			Consolidation
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	4,513		$	12,671		$	12,569		$	(25,240	)	$	4,513
Net cash provided by (used in) operating activities		(59,324	)		8,258			48,858			—			(2,208	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property, plant and equipment		(74	)		(35,119	)		(5,012	)		—			(40,205	)
Acquired business, net of cash acquired		—			—			(22,432	)		—			(22,432	)
Intercompany distributions		10,000			(10,000	)		—			—			—
Proceeds from sale of assets		—			140			55			—			195
Net cash provided by (used in) investing activities		9,926			(44,979	)		(27,389	)		—			(62,442	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Purchase of shares for treasury		(2,350	)		—			—			—			(2,350	)
Proceeds from issuance of long-term debt		—			—			4,000			—			4,000
Payments of long-term debt		(813	)		(3,852	)		(5,733	)		—			(10,398	)
Decrease in short-term borrowings		—			1			(3,332	)		—			(3,331	)
Intercompany debt		(23,000	)		—			23,000			—			—
Financing costs		(4	)		—			—			—			(4	)
Tax effect from exercise/vesting of equity awards, net		834			—			—			—			834
Dividend		(2,374	)		—			—			—			(2,374	)
Other, net		(29	)		47,723			(47,723	)		—			(29	)
Net cash provided by (used in) financing activities		(27,736	)		43,872			(29,788	)		—			(13,652	)
Net cash used in discontinued operations		—			—			(764	)		—			(764	)
Effect of exchange rate changes on cash and equivalents		—			—			916			—			916
NET INCREASE (DECREASE) IN CASH AND EQUIVALENT		(77,134	)		7,151			(8,167	)		—			(78,150	)
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD		178,448			15,164			49,417			—			243,029
CASH AND EQUIVALENTS AT END OF PERIOD	$	101,314		$	22,315		$	41,250		$	—		$	164,879

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
For the Six Months Ended March 31, 2011

($ in thousands)	Parent Company			Guarantor Companies			Non- Guarantor Companies			Elimination			Consolidation
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	(15,681	)	$	20,258		$	(6,914	)	$	(13,344	)	$	(15,681	)
Net cash used in operating activities		(3,611	)		(14,241	)		(17,847	)		—			(35,699	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property, plant and equipment		(208	)		(19,449	)		(22,080	)		—			(41,737	)
Acquired business, net of cash acquired		—			(1,066	)		211			—			(855	)
Intercompany distributions		10,000			(10,000	)		—			—			—
Funds restricted for capital projects		—			3,875			—			—			3,875
Proceeds from sale of investment		—			—			1,333			—			1,333
Increase in equipment lease deposits		—			(351	)		—			—			(351	)
Net cash provided by (used in) investing activities		9,792			(26,991	)		(20,536	)		—			(37,735	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of long-term debt		558,310			—			79,427			—			637,737
Payments of long-term debt		(312	)		(30,567	)		(467,892	)		—			(498,771	)
Decrease in short-term borrowings		—			—			2,022			—			2,022
Intercompany debt		(468,372	)		—			468,372			—			—
Financing costs		(14,272	)		—			(6,967	)		—			(21,239	)
Purchase of ESOP shares		(8,310	)		—			—			—			(8,310	)
Exercise of stock options		20			—			—			—			20
Tax benefit from vesting of restricted stock		23			—			—			—			23
Other, net		(94	)		39,795			(39,795	)		—			(94	)
Net cash provided by financing activities		66,993			9,228			35,167			—			111,388
Net cash used in discontinued operations		—			—			(561	)		—			(561	)
Effect of exchange rate changes on cash and equivalents		—			—			1,142			—			1,142
NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS		73,174			(32,004	)		(2,635	)		—			38,535
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD		74,600			57,113			38,089			—			169,802
CASH AND EQUIVALENTS AT END OF PERIOD	$	147,774		$	25,109		$	35,454		$	—		$	208,337