UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
---------
( X ) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1999
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______________ to _______________
Commission File Number: 1-6620
GRIFFON CORPORATION
----------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 11-1893410
------------------------------- -----------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
100 JERICHO QUADRANGLE, JERICHO, NEW YORK 11753
- --------------------------------------------- -----
(Address of principal executive offices) (Zip Code)
(516) 938-5544
--------------------------------------------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months, and (2) has been subject to such filing
requirements for the past 90 days.
X Yes No
----- -----
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date. 30,405,347 shares of Common
Stock as of July 30, 1999.
<PAGE>
FORM 10-Q
---------
CONTENTS
--------
PART I - FINANCIAL INFORMATION (Unaudited) Page
--------------------- ----
Condensed Consolidated Balance Sheets at June 30, 1999 and
September 30, 1998......................................... 1
Condensed Consolidated Statements of Income for the Three
Months and Nine months Ended June 30, 1999 and 1998........ 3
Condensed Consolidated Statements of Cash Flows for the
Nine Months Ended June 30, 1999 and 1998................... 5
Notes to Condensed Consolidated Financial Statements....... 6
Management's Discussion and Analysis of Financial Condition
and Results of Operations.................................. 8
Quantitative and Qualitative Disclosure about Market Risk.. 12
PART II - OTHER INFORMATION
-----------------
Item 1: Legal Proceedings................................. 13
Item 2: Changes in Securities............................. 13
Item 3: Defaults upon Senior Securities................... 13
Item 4: Submission of Matters to a Vote of Security
Holders........................................... 13
Item 5: Other Information................................. 13
Item 6: Exhibits and Reports on Form 8-K.................. 13
Signature.................................................. 14
<PAGE>
GRIFFON CORPORATION AND SUBSIDIARIES
------------------------------------
CONDENSED CONSOLIDATED BALANCE SHEETS
-------------------------------------
<TABLE>
<CAPTION>
June 30, September 30,
1999 1998
--------- -------------
(Unaudited) (Note 1)
ASSETS
- ------
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 16,437,000 $ 19,326,000
Accounts receivable, less allowance for
doubtful accounts 121,965,000 114,784,000
Contract costs and recognized income not
yet billed 64,137,000 47,324,000
Inventories (Note 2) 92,692,000 104,517,000
Prepaid expenses and other current assets 23,342,000 20,675,000
------------ ------------
Total current assets 318,573,000 306,626,000
PROPERTY, PLANT AND EQUIPMENT
at cost, less accumulated depreciation
and amortization of $71,712,000 at
June 30, 1999 and $62,729,000 at
September 30, 1998 131,189,000 132,214,000
OTHER ASSETS 69,800,000 49,098,000
------------ ------------
$519,562,000 $487,938,000
============ ============
<FN>
See Notes to condensed consolidated financial statements.
</FN>
</TABLE>
<PAGE>
GRIFFON CORPORATION AND SUBSIDIARIES
------------------------------------
CONDENSED CONSOLIDATED BALANCE SHEETS
-------------------------------------
<TABLE>
<CAPTION>
June 30, September 30,
1999 1998
-------- -------------
(Unaudited) (Note 1)
LIABILITIES AND SHAREHOLDERS' EQUITY
- ------------------------------------
<S> <C> <C>
CURRENT LIABILITIES:
Accounts and notes payable $ 67,728,000 $ 65,305,000
Other current liabilities 67,726,000 72,839,000
------------ ------------
Total current liabilities 135,454,000 138,144,000
------------ ------------
LONG-TERM DEBT 130,952,000 107,458,000
------------ ------------
MINORITY INTEREST AND OTHER 11,395,000 12,247,000
------------ ------------
SHAREHOLDERS' EQUITY:
Preferred stock, par value $.25 per
share, authorized 3,000,000 shares,
no shares issued --- ---
Common Stock, par value $.25 per
share, authorized 85,000,000
shares, issued 31,730,949 shares
at June 30, 1999 and 31,706,362
shares at September 30, 1998; and
1,330,002 and 1,287,002 shares in
treasury at June 30, 1999 and
September 30, 1998, respectively 7,933,000 7,927,000
Other shareholders' equity 233,828,000 222,162,000
------------ ------------
Total shareholders' equity 241,761,000 230,089,000
------------ ------------
$519,562,000 $487,938,000
============ ============
<FN>
See notes to condensed consolidated financial statements.
</FN>
</TABLE>
<PAGE>
GRIFFON CORPORATION AND SUBSIDIARIES
------------------------------------
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
-------------------------------------------
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED JUNE 30,
---------------------------
1999 1998
---------- ----------
<S> <C> <C>
Net sales $262,413,000 $229,407,000
Cost of sales 197,945,000 172,294,000
------------ ------------
Gross profit 64,468,000 57,113,000
Selling, general and administrative expenses 53,165,000 46,096,000
------------ ------------
Income from operations 11,303,000 11,017,000
------------ ------------
Other income (expense):
Interest expense (2,076,000) (530,000)
Interest income 114,000 36,000
Other, net (107,000) 197,000
------------ ------------
(2,069,000) (297,000)
------------ ------------
Income before income taxes 9,234,000 10,720,000
------------ ------------
Provision for income taxes:
Federal 2,757,000 3,124,000
State and other 660,000 843,000
------------ ------------
3,417,000 3,967,000
------------ ------------
Net income $ 5,817,000 $ 6,753,000
============ ============
Earnings per share of common stock (Note 3):
Basic $ .19 $ .22
============ ============
Diluted $ .19 $ .22
============ ============
<FN>
See notes to condensed consolidated financial statements
</FN>
</TABLE>
<PAGE>
GRIFFON CORPORATION AND SUBSIDIARIES
------------------------------------
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
-------------------------------------------
(Unaudited)
<TABLE>
<CAPTION>
NINE MONTHS ENDED JUNE 30,
--------------------------
1999 1998
-------- --------
<S> <C> <C>
Net sales $757,330,000 $658,297,000
Cost of sales 580,411,000 494,500,000
------------ ------------
Gross profit 176,919,000 163,797,000
Selling, general and administrative expenses 151,603,000 132,400,000
Restructuring charge (Note 4) 3,500,000 ---
------------ ------------
Income from operations 21,816,000 31,397,000
------------ ------------
Other income (expense):
Interest expense (5,627,000) (2,539,000)
Interest income 448,000 359,000
Other, net 43,000 (32,000)
------------ ------------
(5,136,000) (2,212,000)
------------ ------------
Income before income taxes 16,680,000 29,185,000
------------ ------------
Provision for income taxes:
Federal 4,976,000 8,362,000
State and other 1,196,000 2,437,000
------------ ------------
6,172,000 10,799,000
------------ ------------
Net income (Note 4) $ 10,508,000 $ 18,386,000
============ ============
Earnings per share of common stock
(Notes 3 and 4):
Basic $ .35 $ .60
============ ============
Diluted $ .34 $ .59
============ ============
<FN>
See notes to condensed consolidated financial statements.
</FN>
</TABLE>
<PAGE>
GRIFFON CORPORATION AND SUBSIDIARIES
------------------------------------
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
-----------------------------------------------
(Unaudited)
<TABLE>
<CAPTION>
NINE MONTHS ENDED JUNE 30,
--------------------------
1999 1998
-------- --------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 10,508,000 $ 18,386,000
------------ ------------
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 16,061,000 10,704,000
Provision for losses on accounts receivable 1,659,000 1,334,000
Non-cash asset write-downs from restructuring 2,150,000 ---
Change in assets and liabilities:
Increase in accounts receivable and contract
costs and recognized income not yet billed (19,378,000) (12,773,000)
(Increase) decrease in inventories 10,581,000 (4,807,000)
Increase in prepaid expenses and other assets (4,932,000) (2,998,000)
Decrease in accounts payable and accrued
liabilities (14,083,000) (8,605,000)
Other changes, net 20,000 4,114,000
------------ ------------
Total adjustments (7,922,000) (13,031,000)
------------ ------------
Net cash provided by operating activities 2,586,000 5,355,000
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Net decrease in marketable securities --- 996,000
Acquisition of property, plant and equipment (20,672,000) (32,657,000)
Acquired businesses (20,172,000) (733,000)
Proceeds from sale of product line, net 4,300,000 ---
(Increase) decrease in equipment lease
deposits and other, net (1,211,000) 715,000
------------ ------------
Net cash used in investing activities (37,755,000) (31,679,000)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Purchase of treasury shares (319,000) (3,146,000)
Proceeds from issuance of long-term debt 34,835,000 20,685,000
Payment of long-term debt (7,322,000) (792,000)
Increase in short-term borrowings 4,958,000 122,000
Other, net 128,000 1,676,000
------------ ------------
Net cash provided by financing activities 32,280,000 18,545,000
------------ ------------
NET DECREASE IN CASH AND CASH EQUIVALENTS (2,889,000) (7,779,000)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 19,326,000 15,414,000
------------ ------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 16,437,000 $ 7,635,000
============ ============
<FN>
See notes to condensed consolidated financial statements.
</FN>
</TABLE>
<PAGE>
GRIFFON CORPORATION AND SUBSIDIARIES
------------------------------------
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
----------------------------------------------------
(Unaudited)
(1) Basis of Presentation -
---------------------
The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and Article
10 of Regulation S-X. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring adjustments) considered necessary for a fair presentation
have been included. Operating results for the three and nine month periods ended
June 30, 1999 are not necessarily indicative of the results that may be expected
for the year ending September 30, 1999. The balance sheet at September 30, 1998
has been derived from the audited financial statements at that date. For further
information, refer to the consolidated financial statements and footnotes
thereto included in the company's annual report to shareholders for the year
ended September 30, 1998.
(2) Inventories -
-----------
Inventories, stated at the lower of cost (first-in, first-out or average)
or market, are comprised of the following:
<TABLE>
<CAPTION>
June 30, September 30,
1999 1998
------------ -------------
<S> <C> <C>
Finished Goods.............. $ 51,634,000 $ 58,176,000
Work in process............. 20,312,000 27,011,000
Raw materials and supplies.. 20,746,000 19,330,000
------------ ------------
$ 92,692,000 $104,517,000
============ ============
</TABLE>
(3) Earnings per share -
------------------
Basic EPS is calculated by dividing income available to common shareholders
by the weighted average number of shares of common stock outstanding during the
period. The weighted average number of shares of common stock used in
determining basic EPS was 30,372,000 for the three months ended June 30, 1999,
30,625,000 for the three months ended June 30, 1998, 30,381,000 for the nine
months ended June 30, 1999 and 30,533,000 for the nine months ended June 30,
1998.
Diluted EPS is calculated by dividing income available to common
shareholders, adjusted to add back dividends or interest on convertible
securities, by the weighted average number of shares of common stock outstanding
plus additional common shares that could be issued in connection with
potentially dilutive securities. The weighted average number of shares of common
stock used in determining diluted EPS was 30,445,000 and 31,318,000 for the
three months ended June 30, 1999 and 1998, respectively and 30,569,000 and
<PAGE>
31,413,000 for the nine months ended June 30, 1999 and 1998, respectively and
reflects additional shares in connection with stock option and other stock-based
compensation plans (18,000 for the three months ended June 30, 1999, 693,000
shares for the three months ended June 30, 1998, 73,000 shares for the nine
months ended June 30, 1999 and 880,000 shares for the nine months ended June
30,1998).
Options to purchase approximately 4,311,000 and 1,057,000 shares of common
stock were not included in the computation of diluted earnings per share for the
three months ended June 30, 1999 and 1998, respectively, and options to purchase
approximately 3,449,000 and 597,000 shares of common stock were not included in
the computations of diluted earnings per share for the nine months ended June
30, 1999 and 1998, respectively, because the effects would have been
antidilutive.
(4) Restructuring charge and sale of product line -
---------------------------------------------
In March 1999 the company recorded a restructuring charge aggregating
$3,500,000 in connection with the closing of a building products manufacturing
facility in order to streamline operations and improve efficiency. The charge
consists of the following:
<TABLE>
<S> <C>
Non-cash asset write-downs $2,150,000
Employee severance and related benefits 900,000
Lease and related costs 450,000
----------
Total restructuring charge $3,500,000
==========
</TABLE>
Since the last half of 1998 and continuing into 1999 the company has
consolidated or closed several building products manufacturing or distribution
facilities. Also, in March 1999 the company completed the sale, at approximately
book value, of a peripheral product line, which was operating at a loss. As a
result of these actions, facilities employed in the building products operation
were reduced by approximately 400,000 square feet and the workforce was reduced
by 244 employees, including 100,000 square feet and 100 manufacturing employees
in connection with the March 1999 plant closure. The majority of cash
expenditures for restructuring costs are expected to be paid within one year;
through June 30, 1999 approximately $210,000 was paid for employee severance and
related benefits and $110,000 was paid for lease and related costs.
(5) Acquisition -
-----------
During the quarter ended March 31, 1999 the company acquired, in a cash
transaction, an operation with annual sales of approximately $50 million that
sells and installs a range of specialty products to the new residential
construction market in Phoenix and Las Vegas. The purchase price of
approximately $20 million was financed under a subsidiary's bank credit
agreement.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
-----------------------------------------------------------
AND RESULTS OF OPERATIONS
-------------------------
RESULTS OF OPERATIONS
Three Months Ended June 30, 1999
- --------------------------------
Net sales were $262.4 million for the three-month period ended June 30,
1999, an increase of $33.0 million or 14.4% over last year.
Net sales of the building products business were $172.8 million, an
increase of $23.3 million or 15.6% over last year. The increase was principally
due to an acquired company in building products' installation services business
($18.3 million). Internal growth in the installation services business
attributable to continuing market share growth and higher garage door unit sales
due to strong construction and related retail markets and additional production
capacity, partly offset by the effects of competitive pricing and the second
quarter sale of a commercial product line accounted for the remainder of the
increase. Net sales of the specialty plastic films business were $45.1 million,
an increase of $5.6 million or 14.2% over last year. Net sales of a company
acquired in the fourth quarter of 1998 accounted for the sales increase. Higher
unit volume was offset by price competition in the commodity end of the business
and by delays in the anticipated start-up of new programs in the infant diaper
market. Net sales of the electronic information and communication systems
business were $44.5 million, an increase of $4.1 million or 10.2% over last year
due to increased funding levels on existing programs.
Income from operations for the three-month period ended June 30, 1999,
increased slightly to $11.3 million compared to operating income of $11.0
million last year. Operating income of the building products business increased
approximately $2.0 million compared to last year. Building products' operating
results benefited from earnings from an acquired company, lower raw material
costs, additional production capacity and improved manufacturing efficiencies.
Specialty plastic films' operating results decreased approximately $3.0 million
compared to last year, resulting in an operating loss for the quarter. Earnings
of a business acquired in the fourth quarter of 1998 were offset by the effects
of competitive pricing, raw material cost increases and by delays in the
anticipated start-up of new programs in the infant diaper market. Operating
income of the electronic information and communication systems operation
increased by approximately $.7 million due to the increased sales.
Net interest expense increased by $1.5 million compared to last year due to
higher levels of outstanding debt from acquisitions in late 1998 and in the
quarter ended March 31, 1999, from borrowings to finance new production lines
for specialty plastic films' joint venture and from lower investable balances.
<PAGE>
Nine Months Ended June 30, 1999
- -------------------------------
Net sales were $757.3 million for the nine-month period ended June 30,
1999, an increase of $99.0 million or 15.0% over last year.
Net sales of the building products business were $480.3 million, an
increase of $53.7 million or 12.6% over last year, primarily due to an acquired
business ($25.1 million), the installation services business' internal growth,
and higher garage door unit sales. Net sales of the specialty plastic films
business were $140.4 million, an increase of $25.2 million or 21.9% compared to
last year. An acquired company accounted for $22.3 million of the sales
increase. The remainder of the increase was primarily due to higher unit volume,
partly offset by price competition, and delays in the anticipated start-up of
new programs in the infant diaper market. Net sales of the electronic
information and communication systems business were $136.6 million, an increase
of $20.2 million or 17.3% compared to last year, principally due to new programs
and increased funding levels on existing programs.
Income from operations for the nine-month period ended June 30, 1999 was
$21.8 million (including a $3.5 million restructuring charge incurred in the
second quarter for facilities consolidation and rationalization in the building
products business), compared to $31.4 million last year. Operating income of the
building products business before the restructuring charge decreased
approximately $3.0 million compared to last year. The decrease was due to
competitive pricing pressures, expenses associated with new distribution
centers, higher costs to support the sales growth and, through the first six
months, capacity constraints and related manufacturing inefficiencies and the
operating loss related to a divested commercial product line. Operating income
of the specialty plastic films business decreased by approximately $4.5 million
compared to last year, due to the reasons discussed above. Operating income of
the electronic information and communication systems business increased by $1.7
million due to the higher sales.
Net interest expense for the nine months ended June 30, 1999 increased
by $3.0 million compared to last year due to higher levels of outstanding debt
from acquisitions in late 1998 and in the quarter ended March 31, 1999, from
borrowings to finance new production lines for specialty plastic films' joint
venture and from lower investable balances.
LIQUIDITY AND CAPITAL RESOURCES
Cash flow provided by operations for the nine months was $2.6 million
and working capital was $183.1 million at June 30, 1999.
During the nine months, the company had capital expenditures of
approximately $20.7 million, including $6.2 million to upgrade and enhance
strategic business systems and approximately $2.9 million for new production
lines for its specialty plastic films' joint venture in Germany. The balance of
capital expenditures was principally made in connection with increasing
production capacity.
During the quarter ended March 31, 1999 the company acquired, in a cash
transaction, an operation with annual sales of approximately $50 million that
sells and installs a range of specialty products to the new residential
construction market in Phoenix and Las Vegas. The purchase price of
approximately $20 million was financed under a subsidiary's bank credit
agreement. Also, in March 1999 proceeds of approximately $4.3 million were
received from the sale of a peripheral commercial product line.
<PAGE>
Anticipated cash flows from operations, together with existing cash,
bank lines of credit and lease line availability, should be adequate to finance
presently anticipated working capital and capital expenditure requirements and
to repay long-term debt as it matures.
Year 2000
As described in the company's Annual Report for the year ended September
30, 1998, the company is taking actions in each of its businesses to address
Year 2000 issues. These efforts are in connection with the company's application
software, hardware and related operating platforms ("IT Systems"), embedded
technology such as microcontrollers used in production equipment or products,
and third parties, principally suppliers and customers.
Within the electronic information and communication systems segment,
substantially all of the critical IT Systems have been replaced with systems
that are Year 2000 compliant. Remediation and testing efforts for the few
remaining critical IT Systems are continuing, and the replacement process is
expected to be completed by September 1999. Remediation or retirement of
non-critical IT Systems is anticipated to be completed by the end of 1999.
The specialty plastic films segment has replaced all critical IT Systems
with new systems that are Year 2000 compliant. As of March 31, 1999, replacement
of non-critical IT Systems has also been completed.
The building products segment initially estimated that Year 2000 issues
would be addressed within the context of its existing upgrade and enhancement
program. This program however, was running behind schedule, and alternative
plans were developed and are being implemented in order to remediate identified
Year 2000 issues. These plans call for the application of software modifications
to existing systems, though efforts to implement previously planned upgrades and
enhancements are continuing. Validation of software modifications through
testing is planned to be finished by October 1999. Any inability of the company
to timely complete the validation of software modifications through testing and
to implement any necessary corrections that such testing may identify as a
consequence of the complexities and uncertainties inherent in developing,
testing and implementing software, would adversely affect the segment's
profitability due to increased operating costs and related inefficiencies.
With respect to embedded technology, inventories and assessments in each
of the company's business segments have been completed. Based on the results of
this process, the company believes that there are no significant Year 2000
exposures from embedded technology.
The company believes that its "reasonably likely worst case scenarios"
involve any inability on its part to timely complete the validation of its
remediation efforts for known Year 2000 issues in its building products business
and the failure of significant third parties with whom the company does business
to address their Year 2000 issues. Contingency plans being developed include,
but are not limited to, replacement of electronic applications with manual
processes, identification of alternate suppliers and possible increases in
inventory levels.
<PAGE>
In evaluating the impact of Year 2000 on significant third parties, each
business segment identified and contacted the parties involved or otherwise
attained an understanding of such third parties' Year 2000 readiness. Based on
the results of this process, the company does not anticipate a major
interruption of its business activities. However, that will be dependent on the
ability of significant third parties to be Year 2000 compliant, a factor beyond
the ability of the company to control. Consequently, while the company believes
that its actions are responsive to Year 2000 risks regarding significant third
parties, it is not possible to eliminate such risks or to estimate the ultimate
effect that significant third parties' Year 2000 readiness will have on the
company's operating results.
The company estimates that aggregate capital expenditures for systems
upgrade and enhancement programs will be approximately $40 million. Through June
30, 1999 the company had incurred approximately $27.5 million of such costs with
the balance to be incurred through fiscal 2000. In addition, the company
estimates that approximately $2 to $5 million will be expended for Year 2000
consulting costs, of which approximately $1.7 million has been incurred through
June 30, 1999. The company has not separately tracked all costs for Year 2000
efforts since such compliance was expected to be achieved as an ancillary
benefit of budgeted systems upgrade and enhancement programs, or principally
consist of payroll and related costs for information systems personnel.
In 1998, the American Institute of Certified Public Accountants issued
Statement of Position No. 98-5 (SOP 98-5), "Reporting on the Costs of Start- Up
Activities." SOP 98-5, which becomes effective for the company's fiscal year
ended September 30, 2000, sets accounting standards in connection with
accounting and financial reporting related to costs of start-up activities. SOP
98-5 requires that, at the date of adoption, costs of start-up activities
previously capitalized be reported as a cumulative effect of a change in
accounting principle, and further requires that such costs incurred subsequent
to adoption be expensed. Consequently, the company's 60% owned joint venture
will be required to record, in the first quarter of fiscal 2000, as a cumulative
effect of a change in accounting principle costs that were previously
capitalized in connection with the start-up of the venture and the
implementation of additional production capacity. It is anticipated that the
impact on consolidated operating results of the adoption of SOP 98-5, after
taxes and the minority interest's share of the cumulative effect adjustment,
will be approximately $3 million.
Forward-Looking Statements
All statements other than statements of historical fact included in this
report, including without limitation statements regarding the company's
financial position, business strategy, Year 2000 readiness and the plans and
objectives of the company's management for future operations, are forward-
looking statements. When used in this report, words such as "anticipate",
"believe", "estimate", "expect", "intend" and similar expressions, as they
relate to the company or its management, identify forward-looking statements.
Such forward-looking statements are based on the beliefs of the company's
management, as well as assumptions, made by and information currently available
to the company's management. Actual results could differ materially from those
contemplated by the forward-looking statements as a result of certain factors,
including but not limited to, business and economic conditions, competitive
factors and pricing pressures, capacity and supply constraints and the impact of
any disruption or failure in normal business activities at the company and its
customers and suppliers as a consequence of Year 2000 related problems. Such
statements reflect the views of the company with respect to future events and
are subject to these and other risks, uncertainties and assumptions relating to
the operations, results of operations, growth strategy and liquidity of the
company.
QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
- ---------------------------------------------------------
Management does not believe that there are any material market risk
exposures with respect to derivative or other financial instruments that are
required to be disclosed.
<PAGE>
PART II - OTHER INFORMATION
---------------------------
Item 1 Legal Proceedings
-----------------
None
Item 2 Changes in Securities
---------------------
None
Item 3 Defaults upon Senior Securities
-------------------------------
None
Item 4 Submission of Matters to a Vote of Security Holders
---------------------------------------------------
None
Item 5 Other Information
-----------------
None
Item 6 Exhibits and Reports on Form 8-K
--------------------------------
27 - Financial Data Schedule (for electronic submission
only)
<PAGE>
SIGNATURE
---------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
GRIFFON CORPORATION
By /s/Robert Balemian
------------------
Robert Balemian
President
(Principal Financial Officer)
Date: August 10, 1999
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The schedule contains summary financial inforrmation extracted from the
condensed consolidated financial statements for the period ended June 30, 1999
and is qualified in its entirety by reference to such statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1999
<PERIOD-END> JUN-30-1999
<CASH> 16,437,000
<SECURITIES> 0
<RECEIVABLES> 196,638,000
<ALLOWANCES> 10,536,000
<INVENTORY> 92,692,000
<CURRENT-ASSETS> 318,573,000
<PP&E> 202,901,000
<DEPRECIATION> 71,712,000
<TOTAL-ASSETS> 519,562,000
<CURRENT-LIABILITIES> 135,454,000
<BONDS> 130,952,000
0
0
<COMMON> 7,933,000
<OTHER-SE> 233,828,000
<TOTAL-LIABILITY-AND-EQUITY> 519,562,000
<SALES> 757,330,000
<TOTAL-REVENUES> 757,330,000
<CGS> 580,411,000
<TOTAL-COSTS> 580,411,000
<OTHER-EXPENSES> 0
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<INTEREST-EXPENSE> 5,627,000
<INCOME-PRETAX> 16,680,000
<INCOME-TAX> 6,172,000
<INCOME-CONTINUING> 10,508,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 10,508,000
<EPS-BASIC> .35
<EPS-DILUTED> .34
</TABLE>
