GRIFFON CORP

Previous wording

Since 2017, we have undertaken a series of transformative transactions. We divested our specialty plastics business in 2018 and our defense electronics (Telephonics) business in 2022 to focus on our core markets and improve our free cash flow conversion. In our Home and Building Products ("HBP") segment, we acquired CornellCookson, Inc. ("CornellCookson") in 2018, which has been integrated into Clopay Corporation ("Clopay"), creating a leading North American manufacturer and marketer of residential garage doors and sectional commercial doors, and rolling steel doors and grille products, under brands that include Clopay, Ideal, Cornell and Cookson. In our Consumer and Professional Products ("CPP") segment, we expanded the scope of our brands through the acquisition of Hunter Fan Company ("Hunter") in January 2022 and ClosetMaid, LLC ("ClosetMaid") in 2018. We established an integrated headquarters for CPP in Orlando, Florida for our portfolio of leading brands that includes AMES, Hunter, True Temper and ClosetMaid.

Current wording

Since 2017, we have undertaken a series of transformative transactions. We divested our specialty plastics business in 2018 and our defense electronics (Telephonics) business in 2022 to focus on our core markets and improve our free cash flow conversion. In our Home and Building Products ("HBP") segment, we acquired CornellCookson, Inc. ("CornellCookson") in 2018, which has been integrated into Clopay Corporation ("Clopay"), creating a leading North American manufacturer and marketer of residential garage doors and sectional commercial doors, and rolling steel doors and grille products, under brands that include Clopay, Ideal, Cornell and Cookson. In our Consumer and Professional Products ("CPP") segment, we expanded the scope of our brands through the acquisition of Hunter Fan Company ("Hunter") in January 2022 and ClosetMaid, LLC ("ClosetMaid") in 2018.

Previous wording

In response to changing market conditions, Griffon announced in May 2023 that CPP is expanding its global sourcing strategy to include long handled tools, material handling, and wood storage and organization product lines.

Current wording

In response to changing market conditions, Griffon announced in May 2023 that CPP is expanding its global sourcing strategy to include long handled tools, material handling, and wood storage and organization product lines for the U.S. market.

Previous wording

Implementation of this strategy over the duration of the project will result in charges of $120,000 to $130,000, including $50,000 to $55,000 of cash charges for employee retention and severance, operational transition, and facility and lease exit costs, and $70,000 to $75,000 of non-cash charges primarily related to asset write-downs. Capital investment in the range of $3,000 to $5,000 will also be required. These costs exclude cash proceeds from the sale of real estate and equipment, which are expected to largely offset the cash charges, and also exclude inefficiencies due to duplicative labor costs and absorption impacts during transition.

Current wording

Implementation of this strategy over the duration of the project will result in charges approximating $130,000, which now includes approximately $46,000 of cash charges for employee retention and severance, operational transition, and facility and lease exit costs, and approximately $84,000 of non-cash charges primarily related to asset write-downs. Capital investment of approximately $5,000 will also be required. These costs exclude cash proceeds from the sale of real estate and equipment, which are expected to largely offset the cash charges, and also exclude inefficiencies due to duplicative labor costs and absorption impacts during transition.

Previous wording

Revenue for the quarter ended March 31, 2024 was $672,880 compared to $710,984 in the prior year quarter, a decrease of 5%, driven by decreased revenue of 1% and 11% at HBP and CPP, respectively. Net income was $64,143 or $1.28 per share, compared to a net loss of $62,255, or $1.17 per share, in the prior year quarter.

Current wording

Revenue for the quarter ended June 30, 2024 was $647,814 compared to $683,430 in the prior year quarter, a decrease of $35,616 or 5%, driven by decreased revenue of 2% and 10% at HBP and CPP, respectively. Net income was $41,086 or $0.84 per share, compared to $49,205, or $0.90 per share, in the prior year quarter.

Previous wording

– Strategic review - retention and other of $6,190 ($4,658, net of tax, or $0.08 per share);

Current wording

– Strategic review - retention and other of $5,812 ($4,378, net of tax, or $0.08 per share);

Previous wording

Excluding these items from the respective quarterly results, net income would have been $67,510, or $1.35 per share in the current year quarter ended March 31, 2024 compared to $66,936, or $1.21 per share, in the prior year quarter.

Current wording

Excluding these items from the respective quarterly results, net income would have been $60,526, or $1.24 per share in the three months ended June 30, 2024 compared to $70,304, or $1.29 per share, in the prior year quarter.

Previous wording

Revenue for the six months ended March 31, 2024 was $1,316,033 compared to $1,360,368 in the prior year period, a decrease of 3% driven by decreased revenue of 1% and 7% at HBP and CPP, respectively. Net income was $106,320 or $2.10 per share, compared to a net loss of $13,553, or $0.26 per share, in the prior year period.

Current wording

Revenue for the nine months ended June 30, 2024 was $1,963,847 compared to $2,043,798 in the prior year period, a decrease of $79,951 or 4% driven by decreased revenue of 1% and 8% at HBP and CPP, respectively. Net income was $147,406 or $2.94 per share, compared to net income of $35,652, or $0.65 per share, in the prior year period.

Previous wording

– Gain on sale of building of $11 ($9, net of tax, or $0.00 per share);

Current wording

– Loss on sale of buildings of $167 ($105, net of tax, or $0.00 per share);

Previous wording

– Restructuring charges of $2,401 ($1,769, net of tax, or $0.04 per share);

Current wording

– Proxy expenses of $2,685 ($2,059, net of tax, or $0.04 per share);

Previous wording

Excluding these items from the respective periods, net income would have been $122,777, or $2.42 per share in the current year period ended March 31, 2024 compared to $114,357, or $2.07 per share, in the prior year period.

Current wording

Excluding these items from the respective periods, net income would have been $183,303, or $3.66 per share in the nine months ended June 30, 2024 compared to $184,661, or $3.35 per share, in the prior year period.

Previous wording

Griffon evaluates performance based on adjusted net income (loss) and the related adjusted earnings (loss) per share, which excludes restructuring charges, non-cash impairment charges, loss from debt extinguishment, acquisition related expenses and discrete and certain other tax items, as well as other items that may affect comparability, as applicable, non-GAAP measures. Griffon believes this information is useful to investors for the same reason. The following table provides a reconciliation of net income (loss) from operations to adjusted net income and earnings (loss) per share to adjusted earnings per share:

Current wording

Griffon evaluates performance based on adjusted net income and the related adjusted earnings per share, which are non-GAAP measures that exclude restructuring charges, non-cash impairment charges, loss from debt extinguishment, acquisition related expenses and discrete and certain other tax items, as well as other items that may affect comparability, as applicable. Griffon believes this information is useful to investors for the same reason. The following table provides a reconciliation of net income from operations to adjusted net income and earnings per share to adjusted earnings per share:

Previous wording

(1) For the three months ended March 31, 2024 and 2023, restructuring charges relate to the CPP global sourcing expansion, of which $1,334 and $74,645, respectively, is included in Cost of goods and services and $1,067 and $3,689, respectively, is included in SG&A. For the six months ended March 31, 2024 and 2023, restructuring charges relate to the CPP global sourcing expansion, of which $12,980 and $74,645, respectively, are included in Cost of goods and services and $1,821 and $3,689, respectively, are included in SG&A.

Current wording

(1) For the three months ended June 30, 2024 and 2023, restructuring charges relate to the CPP global sourcing expansion, of which $15,744 and $1,777, respectively, is included in Cost of goods and services and $2,944 and $2,085, respectively, is included in SG&A in the Company's Condensed Consolidated Statement of Operations. For the nine months ended June 30, 2024 and 2023, restructuring charges relate to the CPP global sourcing expansion, of which $28,724 and $76,422, respectively, are included in Cost of goods and services and $4,765 and $5,774, respectively, are included in SG&A in the Company's Condensed Consolidated Statement of Operations.

Previous wording

Griffon evaluates performance and allocates resources based on each segment adjusted EBITDA, a non-GAAP measure, which is defined as income (loss) before taxes, excluding interest income and expense, depreciation and amortization, unallocated amounts (mainly corporate overhead), strategic review charges, non-cash impairment charges, restructuring charges, and acquisition related expenses, as well as other items that may affect comparability, as applicable. Griffon believes this information is useful to investors for the same reason. See table provided in Note 12 - Business Segments for a reconciliation of adjusted EBITDA to income (loss) before taxes.

Current wording

Griffon evaluates performance and allocates resources based on each segment adjusted EBITDA, a non-GAAP measure, which is defined as income before taxes, excluding interest income and expense, depreciation and amortization, unallocated amounts (mainly corporate overhead), strategic review charges, non-cash impairment charges, restructuring charges, and acquisition related expenses, as well as other items that may affect comparability, as applicable. Griffon believes this information is useful to investors for the same reason. See table provided in Note 13 - Business Segments for a reconciliation of adjusted EBITDA to income before taxes.

Previous wording

For the quarter ended March 31, 2024, HBP revenue decreased $4,597 or 1% from the prior year quarter due to unfavorable product mix of 2%, partially offset by a 1% increase in volume. Increased residential volume in the quarter was partially offset by decreased commercial volume.

Current wording

For the quarter ended June 30, 2024, HBP revenue decreased $6,928 or 2% from the prior year quarter due to unfavorable product mix with increased residential volume being offset by decreased commercial volume.

Previous wording

For the quarter ended March 31, 2024, adjusted EBITDA of $128,924 decreased $2,947 or 2%, compared to $131,871 in the prior year quarter. The unfavorable variance to the prior year resulted from the decreased revenue noted above, and increased labor and distribution costs, partially offset by reduced material costs.

Current wording

For the quarter ended June 30, 2024, adjusted EBITDA of $118,516 decreased $15,814 or 12%, compared to $134,330 in the prior year quarter resulting from the decreased revenue noted above and increased material, labor and distribution costs.

Previous wording

For the six months ended March 31, 2024, revenue decreased $5,379 or 1%, compared to the prior year period, driven by decreased volume of 3% reflecting decreased commercial volume, partially offset by increased residential volume and favorable product mix of 2%.

Current wording

For the nine months ended June 30, 2024, revenue decreased $12,307 or 1%, compared to the prior year period, driven by decreased volume of 1% reflecting decreased commercial volume, partially offset by increased residential volume.

Previous wording

For the six months ended March 31, 2024, adjusted EBITDA of $253,643 decreased $2,373, or 1%, compared to $256,016 in the prior year period. The unfavorable variance resulted from the decreased revenue noted above, and increased labor and distribution costs, partially offset by reduced material costs.

Current wording

For the nine months ended June 30, 2024, adjusted EBITDA of $372,159 decreased $18,187, or 5%, compared to $390,346 in the prior year period resulted from the decreased revenue noted above, as well as increased labor and distribution costs.

Previous wording

For the quarter ended March 31, 2024, segment depreciation and amortization remained consistent with the prior year quarter. For the six months ended March 31, 2024, segment depreciation and amortization decreased $252 compared to the prior year period due to fully depreciated assets.

Current wording

For the quarter ended June 30, 2024, segment depreciation and amortization remained consistent with the prior year quarter. For the nine months ended June 30, 2024, segment depreciation and amortization decreased $237 compared to the prior year period due to fully depreciated assets.

Previous wording

For the quarter ended March 31, 2024, revenue decreased $33,507, or 11%, compared to the prior year quarter primarily due to decreased volume driven by reduced consumer demand in North America and the U.K., partially offset by increased volume in Australia.

Current wording

For the quarter ended June 30, 2024, revenue decreased $28,688, or 10%, compared to the prior year quarter primarily due to decreased volume driven by reduced consumer demand in North America, partially offset by increased volume in Australia.

Previous wording

For the quarter ended March 31, 2024, adjusted EBITDA of $20,121 increased $486 or 2% compared to $19,635 in the prior year quarter. The variance to the prior year was primarily due to improved North American production costs and decreased discretionary spending, partially offset by the unfavorable impact of the reduced volume noted above.

Current wording

For the quarter ended June 30, 2024, adjusted EBITDA of $22,263 increased $3,998 or 22% compared to $18,265 in the prior year quarter. The variance to the prior year quarter was primarily due to improved North American production costs and decreased discretionary spending, partially offset by the unfavorable impact of the reduced volume noted above.

Previous wording

For the six months ended March 31, 2024, revenue decreased $38,956, or 7%, compared to the prior year period primarily due to decreased volume driven by reduced consumer demand in North America and the U.K., partially offset by increased volume in Australia and elevated customer inventory levels.

Current wording

For the nine months ended June 30, 2024, revenue decreased $67,644, or 8%, compared to the prior year period primarily due to decreased volume driven by reduced consumer demand in North America and the U.K., partially offset by increased volume in Australia.

Previous wording

For the six months ended March 31, 2024, adjusted EBITDA of $25,660 increased $7,834 or 44% compared to $17,826 in the prior year period. The variance to the prior year was primarily due to improved margins in Australia and reduced North American production costs, as well as decreased discretionary spending, partially offset by the unfavorable impact of the reduced volume noted above.

Current wording

For the nine months ended June 30, 2024, adjusted EBITDA of $47,923 increased $11,832 or 33% compared to $36,091 in the prior year period primarily due to improved margins in Australia and reduced U.S. production costs, as well as decreased discretionary spending, partially offset by the unfavorable impact of the reduced volume noted above.

Previous wording

For the quarter and six months ended March 31, 2024, segment depreciation and amortization decreased $2,132 and $4,202, respectively, compared to the prior year period, primarily related to fully depreciated assets and the write-down of certain fixed assets at several manufacturing facilities in connection with restructuring activities.

Current wording

For the quarter and nine months ended June 30, 2024, segment depreciation and amortization decreased $436 and $4,638, respectively, compared to the prior year period, primarily related to fully depreciated assets and the write-down of certain fixed assets at several manufacturing facilities in connection with restructuring activities.

Previous wording

In response to changing market conditions, Griffon announced in May 2023 that CPP is expanding its global sourcing strategy to include long handled tools, material handling, and wood storage and organization product lines.

Current wording

In response to changing market conditions, Griffon announced in May 2023 that CPP is expanding its global sourcing strategy to include long handled tools, material handling, and wood storage and organization product lines for the U.S market.

Previous wording

Implementation of this strategy over the duration of the project will result in charges of $120,000 to $130,000, including $50,000 to $55,000 of cash charges for employee retention and severance, operational transition, and facility and lease exit costs, and $70,000 to $75,000 of non-cash charges primarily related to asset write-downs. Capital investment in the range of $3,000 to $5,000 will also be required. These costs exclude cash proceeds from the sale of real estate and equipment, which are expected to largely offset the cash charges, and also exclude inefficiencies due to duplicative labor costs and absorption impacts during transition.

Current wording

Implementation of this strategy over the duration of the project will result in charges approximating $130,000, which now includes approximately $46,000 of cash charges for employee retention and severance, operational transition, and facility and lease exit costs, and approximately $84,000 of non-cash charges primarily related to asset write-downs. Capital investment of approximately $5,000 will also be required. These costs exclude cash proceeds from the sale of real estate and equipment, which are expected to largely offset the cash charges, and also exclude inefficiencies due to duplicative labor costs and absorption impacts during transition.

Previous wording

In the six months ended March 31, 2024, CPP incurred pre-tax restructuring charges of $14,801 consisting of cash charges of $6,319 and non-cash, asset related charges of $8,482 to adjust inventory to net realizable value. The cash charges included $2,329 for one-time termination benefits and other personnel-related costs and $3,990 for facility exit and other related costs. Since inception, cash charges totaled $39,855 and non-cash, asset-related charges totaled $67,414; the cash charges included $19,101 for one-time termination benefits and other personnel-related costs and $20,754 for facility exit and other related costs. Non-cash charges included a $22,018 impairment charge related to certain fixed assets at several manufacturing locations and $45,396 to adjust inventory to net realizable value.

Current wording

In the nine months ended June 30, 2024, CPP incurred pre-tax restructuring charges of $33,489 consisting of cash charges of $10,510 and non-cash, asset related charges of $22,979 to adjust inventory to net realizable value. The cash charges included $3,038 for one-time termination benefits and other personnel-related costs and $7,472 for facility exit and other related costs. Since inception, cash charges totaled $44,046 and non-cash, asset-related charges totaled $81,911; the cash charges included $19,810 for one-time termination benefits and other personnel-related costs and $24,236 for facility exit and other related costs. Non-cash charges of $81,911 included $22,018 of impairment charges related to certain fixed assets at several manufacturing locations and $59,893 to adjust inventory to net realizable value. Capital investments of $2,400 mainly consists of expansion of the manufacturing capacity in Ocala, Florida and tooling and molds at offshore vendors required to support the global sourcing strategy.

Previous wording

For the quarter ended March 31, 2024, unallocated amounts, excluding depreciation, consisted primarily of corporate overhead costs totaling $14,814 compared to $14,630 in the prior year quarter; for the six months ended March 31, 2024, unallocated amounts totaled $28,721 compared to $28,406 in the prior year period. The increase in both the current quarter and six month periods, compared to their respective comparable prior year periods, primarily relates to increases in Employee Stock Ownership Plan (ESOP) expenses driven by the increase in Griffon's share price, partially offset by a decrease in other compensation related expenses.

Current wording

For the quarter ended June 30, 2024, unallocated amounts, excluding depreciation, consisted primarily of corporate overhead costs totaling $15,285 compared to $13,982 in the prior year quarter; for the nine months ended June 30, 2024, unallocated amounts totaled $44,006 compared to $42,388 in the prior year period. The increase in both the current quarter and nine month periods, compared to their respective comparable prior year periods, primarily relates to increases in Employee Stock Ownership Plan (ESOP) expenses driven by the increase in Griffon's share price, partially offset by a decrease in other compensation related expenses.

Previous wording

During the three months ended March 31, 2024 and 2023, we incurred strategic review expenses of $2,676 ($1,997, net of tax) and $6,190 ($4,658, net of tax), respectively, and during the six months ended March 31, 2024 and 2023, we incurred strategic review expenses of $7,334 ($5,497, net of tax) and $14,422 ($10,880, net of tax), respectively, primarily for retention payments and other associated costs related to the strategic review process that concluded in April 2023.

Current wording

During the three months ended June 30, 2024 and 2023, we incurred strategic review expenses of $1,870 ($1,390, net of tax) and $5,812 ($4,378, net of tax), respectively, and during the nine months ended June 30, 2024 and 2023, we incurred strategic review expenses of $9,204 ($6,887, net of tax) and $20,234 ($15,258, net of tax), respectively, primarily for retention payments and other associated costs related to the strategic review process that concluded in April 2023.

Previous wording

During the three and six months ended March 31, 2024, we did not incur any non-recurring proxy expenses. During the three and six months ended March 31, 2023, non-recurring proxy expenses of $614 ($471, net of tax) and $2,117 ($1,624, net of tax), respectively, were recorded in SG&A, and related to a settlement entered into with a shareholder that had submitted a slate of director nominees.

Current wording

During the three and nine months ended June 30, 2024, we did not incur any non-recurring proxy expenses. During the three and nine months ended June 30, 2023, non-recurring proxy expenses of $568 ($435, net of tax) and $2,685 ($2,059, net of tax), respectively, were recorded in SG&A in our Condensed Consolidated Statements of Operations, and related to a settlement entered into with a shareholder that had submitted a slate of director nominees.

Previous wording

For the three months ended March 31, 2024, segment depreciation and amortization of $14,943 decreased $2,171 compared to $17,114 in the prior year quarter, and for the six months ended March 31, 2024, segment depreciation and amortization of $29,633 decreased $4,454 compared to $34,087 in the prior year period. The decrease in both the three and six months ended March 31, 2024, primarily relates to fully depreciated assets and the write-down of certain fixed assets at several manufacturing facilities in connection with CPP's restructuring activities.

Current wording

For the three months ended June 30, 2024, segment depreciation and amortization of $15,108 decreased $421 compared to $15,529 in the prior year quarter, and for the nine months ended June 30, 2024, segment depreciation and amortization of $44,741 decreased $4,875 compared to $49,616 in the prior year period. The decrease in both the three and nine months ended June 30, 2024 primarily relates to fully depreciated assets and the write-down of certain fixed assets at several manufacturing facilities in connection with CPP's restructuring activities.

Previous wording

For the quarters ended March 31, 2024 and 2023, Other income (expense) of $626 and $293, respectively, includes $179 and ($164), respectively, of net currency exchange gains (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 expense of $35 and $217, respectively, and net investment income of $29 and $74, respectively. Other income (expense) also includes royalty income of $509 and $476 for the three months ended March 31, 2024 and 2023, respectively.

Current wording

For the quarters ended June 30, 2024 and 2023, Other income (expense) of $350 and $1,475, respectively, includes $(120) and $590, respectively, of net currency exchange gains (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 expense of $34 and $217, respectively, and net investment income of $10 and $336, respectively. Other income (expense) also includes royalty income of $549 and $438 for the three months ended June 30, 2024 and 2023, respectively.

Previous wording

For the six months ended March 31, 2024 and 2023, Other income (expense) of $1,258 and $900, respectively, includes $191 and $(98), respectively, of net currency exchange gains (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 expense of $69 and $433, respectively, as well as $85 and $107, respectively, of net investment income (loss). Other income (expense) also includes rental income of $0 and $212 in the six months ended March 31, 2024 and 2023, as well as royalty income of $1,100 and $1,025 for the six months ended March 31, 2024 and 2023, respectively.

Current wording

For the nine months ended June 30, 2024 and 2023, Other income (expense) of $1,608 and $2,375, respectively, includes $72 and $492, respectively, of net currency exchange gains 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 expense of $103 and $650, respectively, as well as $95 and $444, respectively, of net investment income. Other income (expense) also includes royalty income of $1,649 and $1,463 for the nine months ended June 30, 2024 and 2023, respectively.

Previous wording

During the quarter ended March 31, 2024, the Company recognized a tax provision of $24,430 on income before taxes of $88,573, compared to a tax benefit of $27,904 on a loss before taxes of $90,159 in the prior year quarter. The current year quarter results included strategic review costs - retention and other of $2,676 ($1,997, net of tax), restructuring charges of $2,401 ($1,769, net of tax), gain on sale of building of $11 ($9, net of tax); and discrete and certain other tax benefits, net, that affect comparability of $390. The prior year quarter results included strategic review - retention and other of $6,190 ($4,658, net of tax); restructuring charges of $78,334 ($58,529, net of tax); intangible asset impairment charges of $100,000 ($74,256, net of tax); proxy expenses of $614 ($471, net of tax); and discrete and certain other tax benefits, net, that affect comparability of $8,723. Excluding these items, the effective tax rates for the quarters ended March 31, 2024 and 2023 were 27.9% and 29.5%, respectively.

Current wording

During the quarter ended June 30, 2024, the Company recognized a tax provision of $19,923 on income before taxes of $61,009, compared to a tax provision of $29,248 on income before taxes of $78,453 in the prior year quarter. The current year quarter results included restructuring charges of $18,688 ($13,991, net of tax); strategic review costs - retention and other of $1,870 ($1,390, net of tax); loss on debt extinguishment of $1,700 ($1,292, net of tax); loss on sale of buildings of $725 ($520, net of tax); and discrete and certain other tax provisions, net, that affect comparability of $2,247. The prior year quarter results included strategic review - retention and other of $5,812 ($4,378, net of tax); restructuring charges of $3,862 ($2,831, net of tax); special dividend ESOP charges of $9,042 ($6,936, net of tax); proxy expenses of $568 ($435, net of tax); and discrete and certain other tax provisions, net, that affect comparability of $6,519. Excluding these items, the effective tax rates for the quarters ended June 30, 2024 and 2023 were 27.9% and 28.1%, respectively.

Previous wording

During the six months ended March 31, 2024, the Company recognized a tax provision of $42,395 on income before taxes of $148,715, compared to a tax benefit of $8,586 on a loss before taxes of $22,139 in the comparable prior year period. The six month period ended March 31, 2024 included restructuring charges of $14,801 ($10,982, net of tax); strategic review - retention and other of $7,334 ($5,497, net of tax); gain on sale of building of $558 ($415, net of tax); and discrete and certain other tax provisions, net, that affect comparability of $393. The six month period ended March 31, 2023 included restructuring charges of $78,334 ($58,529, net of tax); Strategic review - retention and other of $14,422 ($10,880, net of tax); gain on the sale of building $10,852 ($8,323, net of tax); intangible asset impairment charges of $100,000 ($74,256, net of tax); proxy expenses of $2,117 ($1,624, net of tax); and discrete tax and certain other tax benefits, net, that affect comparability of $9,056. Excluding these items, the effective tax rates for the six months ended March 31, 2024 and 2023 were 27.9% and 29.4%, respectively.

Current wording

During the nine months ended June 30, 2024, the Company recognized a tax provision of $62,318 on income before taxes of $209,724, compared to a tax provision of $20,662 on income before taxes of $56,314 in the comparable prior year period. The nine month period ended June 30, 2024 included restructuring charges of $33,489 ($24,973, net of tax); strategic review - retention and other of $9,204 ($6,887, net of tax); loss on debt extinguishment of $1,700 ($1,292, net of tax); loss on sale of buildings of $167 ($105, net of tax); and discrete and certain other tax provisions, net, that affect comparability of $2,640. The nine month period ended June 30, 2023 included restructuring charges of $82,196 ($61,360, net of tax); special dividend ESOP charges of $9,042 ($6,936, net of tax); strategic review - retention and other of $20,234 ($15,258, net of tax); gain on the sale of a building of $10,852 ($8,323, net of tax); intangible asset impairment charges of $100,000 ($74,256, net of tax); proxy expenses of $2,685 ($2,059, net of tax); and discrete tax and certain other tax benefits, net, that affect comparability of $2,537. Excluding these items, the effective tax rates for the nine months ended June 30, 2024 and 2023 were 27.9% and 28.9%, respectively.

Previous wording

For the quarters ended March 31, 2024 and 2023, stock based compensation expense, which includes expense for both restricted stock grants and the ESOP, totaled $6,257 and $6,593, respectively. For the six months ended March 31, 2024 and 2023, stock based compensation expense totaled $12,674 and $13,335, respectively.

Current wording

For the quarters ended June 30, 2024 and 2023, stock based compensation expense, which includes expense for both restricted stock grants and the ESOP, totaled $7,052 and $15,252, respectively. For the nine months ended June 30, 2024 and 2023, stock based compensation expense totaled $19,726 and $28,587, respectively. The prior year three and nine months included incremental ESOP expense due to the effects of a special dividend of $9,042. Excluding the impact of the prior year special dividend, the increase in stock compensation expense is primarily due to the increase in Griffon's share price and the related impact on ESOP expense.

Previous wording

For the quarter ended March 31, 2024, total other comprehensive loss, net of taxes, of $4,896 included a loss of $7,199 from foreign currency translation adjustments primarily due to the weakening of the Euro, British Pound and Australian and Canadian Dollars, all in comparison to the U.S. Dollar; partially offset by a $531 benefit from pension amortization and a $1,772 gain on cash flow hedges.

Current wording

For the quarter ended June 30, 2024, total other comprehensive loss, net of taxes, of $1,222 included a $927 loss on cash flow hedges and a loss of $827 from foreign currency translation adjustments primarily due to the weakening of the Euro and Canadian Dollar, all in comparison to the U.S. Dollar; partially offset by a $532 benefit from pension amortization.

Previous wording

For the six months ended March 31, 2024, total other comprehensive income, net of taxes, of $5,579 included a gain of $3,039 from foreign currency translation adjustments primarily due to the strengthening of the Euro, British Pound and Australian Dollars partially offset by the weakening of Canadian Dollars, all in comparison to the US Dollar; a $1,063 benefit from pension amortization ; and a $1,477 gain on cash flow hedges.

Current wording

For the nine months ended June 30, 2024, total other comprehensive income, net of taxes, of $4,357 included a gain of $2,212 from foreign currency translation adjustments primarily due to the strengthening of the Euro, British Pound and Australian Dollar partially offset by the weakening of the Canadian Dollar, all in comparison to the US Dollar; a $1,595 benefit from pension amortization; and a $550 gain on cash flow hedges.

Previous wording

For the six months ended March 31, 2023, total other comprehensive income, net of taxes, of $14,832 included a gain of $12,271 from foreign currency translation adjustments primarily due to the strengthening of the Euro, Canadian and Australian Dollars and British Pound, all in comparison to the US Dollar; a $1,608 benefit from pension amortization of actuarial losses; and a $953 gain on cash flow hedges.

Current wording

For the nine months ended June 30, 2023, total other comprehensive income, net of taxes, of $15,147 included a gain of $14,580 from foreign currency translation adjustments primarily due to the strengthening of the Euro, Canadian and Australian Dollars and British Pound, all in comparison to the US Dollar; a $2,355 benefit from pension amortization of actuarial losses; and a $1,788 loss on cash flow hedges.

Previous wording

At March 31, 2024 and September 30, 2023, Griffon’s liabilities for discontinued operations primarily relate to insurance claims, income taxes, product liability, warranty and environmental reserves totaling $7,994 and $11,798, respectively. Griffon's assets for discontinued operations primarily relate to insurance claims. There was no reported revenues or costs in the three and six months ended March 31, 2024 and 2023 for discontinued operations.

Current wording

At June 30, 2024 and September 30, 2023, Griffon’s liabilities for discontinued operations primarily relate to insurance claims, income taxes, product liability, warranty and environmental reserves totaling $10,017 and $11,798, respectively. Griffon's assets for discontinued operations primarily relate to insurance claims. There was no reported revenues or costs in the three and nine months ended June 30, 2024 and 2023 for discontinued operations.

Previous wording

As of March 31, 2024, the amount of cash, cash equivalents and marketable securities held by foreign subsidiaries was $69,900. Funds held outside the U.S. may be subject to foreign withholding taxes if repatriated to the U.S. Funds held outside the U.S. are typically used for foreign operating needs or reinvested to fund expansion of existing non-U.S. businesses. The Company has accrued a deferred tax liability for withholding taxes on previously taxed earnings and profit (PTEP) which are not considered permanently reinvested.

Current wording

As of June 30, 2024, the amount of cash, cash equivalents and marketable securities held by foreign subsidiaries was $84,900. Funds held outside the U.S. may be subject to foreign withholding taxes if repatriated to the U.S. Funds held outside the U.S. are typically used for foreign operating needs or reinvested to fund expansion of existing non-U.S. businesses. The Company has accrued a deferred tax liability for withholding taxes on previously taxed earnings and profit (PTEP) which are not considered permanently reinvested.