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 March 31, 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. 30,400,947 shares of Common
Stock as of April 30, 1999.
<PAGE>
FORM 10-Q
--------
CONTENTS
--------
PAGE
PART I - FINANCIAL INFORMATION (Unaudited) ----
---------------------
Condensed Consolidated Balance Sheets at March 31, 1999
and September 30, 1998 ........................................... 1
Condensed Consolidated Statements of Operations for the Three
Months and Six Months Ended March 31, 1999 and 1998.............. 3
Condensed Consolidated Statements of Cash Flows for the Six
Months Ended March 31, 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........ 11
PART II - OTHER INFORMATION
-----------------
Item 1: Legal Proceedings ...................................... 12
Item 2: Changes in Securities .................................. 12
Item 3: Defaults upon Senior Securities ........................ 12
Item 4: Submission of Matters to a Vote of Security Holders .... 12
Item 5: Other Information ...................................... 12
Item 6: Exhibits and Reports on Form 8-K ....................... 12
Signature ....................................................... 13
<PAGE>
GRIFFON CORPORATION AND SUBSIDIARIES
------------------------------------
CONDENSED CONSOLIDATED BALANCE SHEETS
-------------------------------------
<TABLE>
<CAPTION>
March 31, September 30,
1999 1998
----------- -------------
(Unaudited) (Note 1)
ASSETS
- ------
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 18,502,000 $ 19,326,000
Accounts receivable, less allowance
for doubtful accounts 113,236,000 114,784,000
Contract costs and recognized
income not yet billed 59,478,000 47,324,000
Inventories (Note 2) 96,838,000 104,517,000
Prepaid expenses and other current
assets 22,517,000 20,675,000
------------ ------------
Total current assets 310,571,000 306,626,000
PROPERTY, PLANT AND EQUIPMENT
at cost, less accumulated depreciation
and amortization of $71,234,000 at
March 31, 1999 and $62,729,000 at
September 30, 1998 131,885,000 132,214,000
OTHER ASSETS 68,159,000 49,098,000
------------ ------------
$510,615,000 $487,938,000
============ ============
<FN>
See notes to condensed consolidated financial statements.
</FN>
</TABLE>
<PAGE>
GRIFFON CORPORATION AND SUBSIDIARIES
------------------------------------
CONDENSED CONSOLIDATED BALANCE SHEETS
-------------------------------------
<TABLE>
<CAPTION>
March 31, September 30,
1999 1998
----------- -------------
(Unaudited) (Note 1)
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
- ------------------------------------
CURRENT LIABILITIES:
Accounts and notes payable $ 63,376,000 $ 65,305,000
Other current liabilities 64,654,000 72,839,000
------------ ------------
Total current liabilities 128,030,000 138,144,000
------------ ------------
LONG-TERM DEBT 135,364,000 107,458,000
------------ ------------
MINORITY INTEREST AND OTHER 11,737,000 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 March 31, 1999
and 31,706,362 shares at September 30,
1998; 1,327,002 and 1,287,002 shares in
treasury at March 31, 1999 and September
30, 1998, respectively 7,933,000 7,927,000
Other shareholders' equity 227,551,000 222,162,000
------------ ------------
Total shareholders' equity 235,484,000 230,089,000
------------ ------------
$510,615,000 $487,938,000
============ ============
<FN>
See notes to condensed consolidated financial statements.
</FN>
</TABLE>
<PAGE>
GRIFFON CORPORATION AND SUBSIDIARIES
------------------------------------
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
-----------------------------------------------
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
------------------------------
1999 1998
---- ----
<S> <C> <C>
Net sales $236,360,000 $199,859,000
Cost of sales 186,035,000 151,098,000
------------ ------------
Gross profit 50,325,000 48,761,000
Selling, general and administrative expenses 49,104,000 42,686,000
Restructuring charge (Note 4) 3,500,000 ---
------------ ------------
Income (loss) from operations (2,279,000) 6,075,000
------------ ------------
Other income (expense):
Interest expense (2,053,000) (1,044,000)
Interest income 273,000 116,000
Other, net 153,000 (198,000)
------------ ------------
(1,627,000) (1,126,000)
------------ ------------
Income (loss) before income taxes (3,906,000) 4,949,000
------------ ------------
Provision (benefit) for income taxes:
Federal (1,155,000) 1,303,000
State and other (290,000) 528,000
------------ ------------
(1,445,000) 1,831,000
------------ ------------
Net income (loss) (Note 4) $ (2,461,000) $ 3,118,000
============ ============
Earnings (loss) per share of common stock
(Notes 3 and 4):
Basic $ (.08) $ .10
============ ============
Diluted $ (.08) $ .10
============ ============
<FN>
See notes to condensed consolidated financial statements.
</FN>
</TABLE>
<PAGE>
GRIFFON CORPORATION AND SUBSIDIARIES
------------------------------------
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
-----------------------------------------------
(Unaudited)
<TABLE>
<CAPTION>
SIX MONTHS ENDED MARCH 31,
------------------------------
1999 1998
---- ----
<S> <C> <C>
Net sales $494,917,000 $428,890,000
Cost of sales 382,466,000 322,206,000
------------ ------------
Gross profit 112,451,000 106,684,000
Selling, general and administrative expenses 98,438,000 86,304,000
Restructuring charge (Note 4) 3,500,000 ---
------------ ------------
Income from operations 10,513,000 20,380,000
------------ ------------
Other income (expense):
Interest expense (3,551,000) (2,009,000)
Interest income 334,000 323,000
Other, net 150,000 (229,000)
------------ ------------
(3,067,000) (1,915,000)
------------ ------------
Income before income taxes 7,446,000 18,465,000
------------ ------------
Provision for income taxes:
Federal 2,219,000 5,238,000
State and other 536,000 1,594,000
------------ ------------
2,755,000 6,832,000
------------ ------------
Net income (Note 4) $ 4,691,000 $ 11,633,000
============ ============
Earnings per share of common stock
(Notes 3 and 4):
Basic $ .15 $ .38
============ ============
Diluted $ .15 $ .37
============ ============
<FN>
See notes to condensed consolidated financial statements.
</FN>
</TABLE>
<PAGE>
GRIFFON CORPORATION AND SUBSIDIARIES
------------------------------------
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
-----------------------------------------------
(Unaudited)
<TABLE>
<CAPTION>
SIX MONTHS ENDED MARCH 31,
----------------------------
1999 1998
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 4,691,000 $11,633,000
------------ -----------
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and amortization 10,506,000 6,734,000
Provision for losses on accounts receivable 1,223,000 927,000
Non-cash asset write-downs from restructuring 2,150,000 ---
Change in assets and liabilities:
(Increase) decrease in accounts receivable and
contract costs and recognized income
not yet billed (4,991,000) 1,840,000
(Increase) decrease in inventories 6,854,000 (1,219,000)
Increase in prepaid expenses and other assets (4,381,000) (3,826,000)
Decrease in accounts payable and accrued
liabilities (20,903,000) (10,905,000)
Other changes, net 165,000 1,229,000
------------ ------------
Total adjustments (9,377,000) (5,220,000)
------------ ------------
Net cash provided by (used in)
operating activities (4,686,000) 6,413,000
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Net decrease in marketable securities --- 996,000
Acquisition of property, plant and equipment (14,614,000) (19,031,000)
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 420,000 (3,801,000)
------------ ------------
Net cash used in investing activities (30,066,000) (22,569,000)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Purchase of treasury shares (298,000) (1,181,000)
Proceeds from issuance of long-term debt 34,835,000 7,000,000
Payment of long-term debt (5,053,000) (814,000)
Increase (decrease) in short-term borrowings 4,314,000 (249,000)
Other, net 130,000 1,067,000
------------ ------------
Net cash provided by financing
activities 33,928,000 5,823,000
------------ ------------
NET DECREASE IN CASH AND CASH EQUIVALENTS (824,000) (10,333,000)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 19,326,000 15,414,000
------------ ------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 18,502,000 $ 5,081,000
============ ===========
<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 six month
periods ended March 31, 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>
March 31, September 30,
1999 1998
------------ ------------
<S> <C> <C>
Finished goods . . . . . . . . . . $ 51,685,000 $ 58,176,000
Work in process . . . . . . . . . 23,890,000 27,011,000
Raw materials and supplies . . . . 21,263,000 19,330,000
------------ ------------
$ 96,838,000 $104,517,000
============ ============
</TABLE>
(3) Earnings per share -
------------------
Basic EPS is calculated by dividing income (loss) 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 30,395,000 for the three months ended
March 31, 1999, 30,498,000 for the three months ended March 31, 1998, 30,386,000
for the six months ended March 31, 1999 and 30,488,000 for the six months ended
March 31, 1998.
Diluted EPS is calculated by dividing income (loss) 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 30,395,000 and 31,512,000 for the
three months ended March 31, 1999 and 1998, respectively and 30,631,000 and
31,460,000 for the six months ended March 31, 1999 and 1998, respectively and
reflects additional shares in connection with stock option and other stock-based
compensation plans (1,014,000 shares for the three months ended March 31, 1998,
245,000 shares for the six months ended March 31, 1999 and 972,000 shares for
the six months ended March 31, 1998).
<PAGE>
Options to purchase approximately 5,297,000 shares of common stock were not
included in the computation of diluted earnings per share for the three months
ended March 31, 1999, and options to purchase approximately 3,018,000 and
368,000 shares of common stock were not included in the computations of diluted
earnings per share for the six months ended March 31, 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.
(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 March 31, 1999
- ---------------------------------
Net sales were $236.4 million for the three-month period ended March 31,
1999, an increase of $36.5 million or 18.3% over last year.
Net sales of the building products business were $141.3 million, an
increase of $17.8 million or 14.4% over last year. The increase was principally
due to an acquired company in the installation services business ($6.8 million),
internal growth in the installation services business attributable to market
share growth and mild weather and higher garage door unit sales due to strong
construction and related retail markets, partly offset by the effect of
competitive pricing. Net sales of the specialty plastic films business were
$45.0 million, an increase of $8.8 million or 24.3% over last year. Net sales of
an acquired company accounted for $7.5 million of the sales increase. The
remainder of the increase was due to higher unit volume, the effects of which
were partly offset by price competition in the commodity end of the business, a
pass-through to customers of lower resin prices 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 $50.1 million, an
increase of $9.9 million or 24.7% over last year due to increased funding levels
on existing programs.
Since the last half of 1998 and continuing into 1999 the building products
operation has consolidated or closed several facilities, including certain
manufacturing and distribution operations of recently acquired businesses.
Operating results for the three months ended March 31, 1999 reflect a $3.5
million restructuring charge resulting from the company's plan to close a
building products manufacturing facility. The charge consists of non-cash asset
write-downs ($2.2 million), employee severance and related benefits ($.9
million) and lease and related costs ($.4 million). Also, in March 1999 building
products completed the sale, at approximately book value, of a peripheral
commercial product line, which was operating at a loss. These actions eliminated
approximately 400,000 square feet of space and an unprofitable business line,
and resulted in a 10% workforce reduction. The company anticipates the
reorganization will generate annual cost savings of approximately $2,000,000.
For the three month period ended March 31, 1999, the company reported a
loss from operations, including the $3.5 million restructuring charge, of $2.3
million compared to operating income of $6.1 million last year. Operating income
of the building products business before the restructuring charge decreased
approximately $3.5 million compared to last year. The effect of the sales growth
was offset by continued competitive pricing pressures and capacity constraints
and related manufacturing inefficiencies due to delay in implementing an
additional production line. Increased operating expenses associated with new
distribution centers, higher costs to support the sales growth and the operating
loss related to the divested commercial product line also impacted
profitability. Additional capacity is currently being implemented. Operating
results of the specialty plastic films segment decreased $2.0 million compared
to last year, resulting in an operating loss for the quarter. Earnings of an
<PAGE>
acquired business were offset by the effects of competitive pricing 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 $.5 million due to the increased sales.
Net interest expense increased by $.8 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.
Six Months Ended March 31, 1999
- -------------------------------
Net sales were $494.9 million for the six-month period ended March 31,
1999, an increase of $66.0 million or 15.4% over last year.
Net sales of the building products business were $307.4 million, an
increase of $30.4 million or 11.0% over last year, primarily due to the
installation services business' internal growth, an acquired business, and
higher garage door unit sales. Net sales of the specialty plastic films business
were $95.4 million, an increase of $19.6 million or 25.9% compared to last year.
An acquired company accounted for $15.7 million of the sales increase. The
remainder of the increase was primarily due to higher unit volume, partly offset
by price competition, a pass-through to customers of lower resin prices 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
$92.1 million, an increase of $16.0 million or 21.1% compared to last year,
principally due to new programs and increased funding levels on existing
programs.
Income from operations for the six-month period ended March 31, 1999 was
$10.5 million (including a $3.5 million restructuring charge), compared to $20.4
million last year. Operating income of the building products business before the
restructuring charge decreased approximately $5.5 million compared to last year,
for the reasons discussed above. Operating income of the specialty plastic films
business decreased by approximately $2.0 million compared to last year, with
such reduction occurring in the second quarter, due to the reasons discussed
above. Operating income of the electronic information and communication systems
business increased by $1.0 million due to the higher sales.
Net interest expense for the six months ended March 31, 1999, 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.
LIQUIDITY AND CAPITAL RESOURCES
Cash flow used by operations for the six months was $4.7 million and
working capital was $182.5 million at March 31, 1999.
During the six months, the company had capital expenditures of
approximately $14.6 million, including $4.7 million to upgrade and enhance
strategic business systems and approximately $2.7 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
<PAGE>
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.
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 companys 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 August 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 noncritical 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. Remediation efforts are proceeding on schedule, are
estimated to be approximately 50% complete and are expected to be finished by
June 1999. Validation of software modifications through testing is planned for
the summer of 1999. Any inability of the company to timely implement the
modifications due to 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 companys 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 remediate 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
March 31, 1999 the company had incurred approximately $26 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 million has been incurred through
March 31, 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.
All statements other than statements of historical fact included in this
report, including without limitation statements regarding the companys financial
position, business strategy, Year 2000 readiness and the plans and objectives of
the companys 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 companys 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: May 10, 1999
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The schedule contains summary financial information extracted from the condensed
consolidated financial statements for the period ended March 31, 1999 and is
qualified in its entirety by reference to such statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1999
<PERIOD-END> MAR-31-1999
<CASH> 18,502,000
<SECURITIES> 0
<RECEIVABLES> 182,306,000
<ALLOWANCES> 9,592,000
<INVENTORY> 96,838,000
<CURRENT-ASSETS> 310,571,000
<PP&E> 203,119,000
<DEPRECIATION> 71,234,000
<TOTAL-ASSETS> 510,615,000
<CURRENT-LIABILITIES> 128,030,000
<BONDS> 135,364,000
0
0
<COMMON> 7,933,000
<OTHER-SE> 227,551,000
<TOTAL-LIABILITY-AND-EQUITY> 510,615,000
<SALES> 494,917,000
<TOTAL-REVENUES> 494,917,000
<CGS> 382,466,000
<TOTAL-COSTS> 382,466,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 1,223,000
<INTEREST-EXPENSE> 3,551,000
<INCOME-PRETAX> 7,446,000
<INCOME-TAX> 2,755,000
<INCOME-CONTINUING> 4,691,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,691,000
<EPS-PRIMARY> .15
<EPS-DILUTED> .15
</TABLE>
