Company Quick10K Filing
Quick10K
Griffon
Closing Price ($) Shares Out (MM) Market Cap ($MM)
$19.65 47 $919
10-Q 2018-12-31 Quarter: 2018-12-31
10-K 2018-09-30 Annual: 2018-09-30
10-Q 2018-06-30 Quarter: 2018-06-30
10-Q 2018-03-31 Quarter: 2018-03-31
10-Q 2017-12-31 Quarter: 2017-12-31
10-K 2017-09-30 Annual: 2017-09-30
10-Q 2017-06-30 Quarter: 2017-06-30
10-Q 2017-03-31 Quarter: 2017-03-31
10-Q 2016-12-31 Quarter: 2016-12-31
10-K 2016-09-30 Annual: 2016-09-30
10-Q 2016-06-30 Quarter: 2016-06-30
10-Q 2016-03-31 Quarter: 2016-03-31
10-Q 2015-12-31 Quarter: 2015-12-31
10-K 2015-09-30 Annual: 2015-09-30
10-Q 2015-06-30 Quarter: 2015-06-30
10-Q 2015-03-31 Quarter: 2015-03-31
10-Q 2014-12-31 Quarter: 2014-12-31
10-K 2014-09-30 Annual: 2014-09-30
10-Q 2014-06-30 Quarter: 2014-06-30
10-Q 2014-03-31 Quarter: 2014-03-31
10-Q 2013-12-31 Quarter: 2013-12-31
8-K 2019-01-31 Earnings, Exhibits
8-K 2018-11-14 Earnings, Exhibits
8-K 2018-09-04 Officers
8-K 2018-08-01 Earnings, Exhibits
8-K 2018-06-14 Enter Agreement, Officers, Other Events, Exhibits
8-K 2018-05-31 Enter Agreement, Exhibits
8-K 2018-05-03 Earnings, Exhibits
8-K 2018-02-06 M&A, Other Events, Exhibits
8-K 2018-01-31 Earnings, Exhibits
8-K 2018-01-24 Other Events, Exhibits
ADBE Adobe Systems 132,440
HES Hess 20,090
LECO Lincoln Electric Holdings 5,670
CASY Caseys General Stores 4,890
MDC MDC Holdings 1,900
THRM Gentherm 1,410
MRTN Marten Transport 997
LIQT Liqtech International 141
GSPH Geospatial 0
WHEN World Health Energy Holdings 0
GFF 2018-12-31
Part I - Financial Information
Item 1 - Financial Statements
Note 1 - Description of Business and Basis of Presentation
Note 2 - Fair Value Measurements
Note 3 - Revenue
Note 4 - Acquisitions
Note 5 - Inventories
Note 6 - Property, Plant and Equipment
Note 7 - Goodwill and Other Intangibles
Note 8 - Income Taxes
Note 9 - Long-Term Debt
Note 10 - Shareholders' Equity
Note 11 - Earnings per Share (Eps)
Note 12 - Business Segments
Note 13 - Employee Benefit Plans
Note 14 - Recent Accounting Pronouncements
Note 16 - Other Income (Expense)
Note 17 - Warranty Liability
Note 18 - Other Comprehensive Income (Loss)
Note 19 - Commitments and Contingencies
Note 20 - Consolidating Guarantor and Non-Guarantor Financial Information
Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3 - Quantitative and Qualitative Disclosure About Market Risk
Item 4 - Controls and Procedures
Part II - Other Information
Item 1 Legal Proceedings
Item 1A Risk Factors
Item 2 Unregistered Sales of Equity Securities and Use of Proceeds
Item 3 Defaults Upon Senior Securities
Item 4 Mine Safety Disclosures
Item 5 Other Information
EX-31.1 gff12-31x201810q1311.htm
EX-31.2 gff12-31x201810q1312.htm
EX-32 gff12-31x201810q132.htm

Griffon Earnings 2018-12-31

GFF 10Q Quarterly Report

Balance SheetIncome StatementCash Flow

Document
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2017-12-31 0000050725 srt:ConsolidationEliminationsMember 2017-10-01 2017-12-31 0000050725 srt:ParentCompanyMember 2017-12-31 0000050725 srt:ConsolidationEliminationsMember 2017-09-30 0000050725 srt:ParentCompanyMember 2017-09-30 0000050725 srt:GuarantorSubsidiariesMember 2017-09-30 0000050725 srt:NonGuarantorSubsidiariesMember 2017-12-31 0000050725 srt:GuarantorSubsidiariesMember 2017-12-31 0000050725 srt:ConsolidationEliminationsMember 2017-12-31 0000050725 srt:NonGuarantorSubsidiariesMember 2017-09-30 gff:option gff:loan iso4217:GBP xbrli:shares iso4217:AUD xbrli:pure iso4217:USD gff:segment iso4217:CAD gff:property iso4217:USD xbrli:shares gff:company gff:unit gff:senior_executive
UNITED STATES

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q 
ý
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended December 31, 2018

o

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: 1-06620
 
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.)
 
 
 
712 Fifth Ave, 18th Floor, New York, New York
 
10019
(Address of principal executive offices)
 
(Zip Code)
 
(212) 957-5000
(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 (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ý Yes o No
 
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ý Yes o No
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer ý

 
Accelerated filer
 o
Non-accelerated filer  o
 
 
Smaller reporting company
o
 
 
Emerging growth company
o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). o Yes ý No

The number of shares of common stock outstanding at December 31, 2018 was 46,763,601.




Griffon Corporation and Subsidiaries
 
Contents
 
 
Page
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


Table of Contents

Part I – Financial Information
Item 1 – Financial Statements
 
GRIFFON CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)


(Unaudited)


 
December 31,
2018

September 30,
2018
CURRENT ASSETS
 

 
Cash and equivalents
$
81,752


$
69,758

Accounts receivable, net of allowances of $7,892 and $6,408
253,351


280,509

Contract costs and recognized income not yet billed, net of progress payments of $4,037 and $3,172
89,232


121,803

Inventories
452,362


398,359

Prepaid and other current assets
39,615


42,121

Assets of discontinued operations
325


324

Total Current Assets
916,637


912,874

PROPERTY, PLANT AND EQUIPMENT, net
336,490


342,492

GOODWILL
438,428


439,395

INTANGIBLE ASSETS, net
365,381


370,858

OTHER ASSETS
14,944


16,355

ASSETS OF DISCONTINUED OPERATIONS
2,909


2,916

Total Assets
$
2,074,789


$
2,084,890







CURRENT LIABILITIES
 


 

Notes payable and current portion of long-term debt
$
12,872


$
13,011

Accounts payable
209,202


233,658

Accrued liabilities
138,368


139,192

Liabilities of discontinued operations
6,882


7,210

Total Current Liabilities
367,324


393,071

LONG-TERM DEBT, net
1,142,079


1,108,071

OTHER LIABILITIES
91,315


106,710

LIABILITIES OF DISCONTINUED OPERATIONS
2,510


2,647

Total Liabilities
1,603,228


1,610,499

COMMITMENTS AND CONTINGENCIES - See Note 19





SHAREHOLDERS’ EQUITY
 


 

Total Shareholders’ Equity
471,561


474,391

Total Liabilities and Shareholders’ Equity
$
2,074,789


$
2,084,890


The accompanying notes to condensed consolidated financial statements are an integral part of these statements.


1

Table of Contents

GRIFFON CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY
(Unaudited)
 
 
COMMON STOCK
 
CAPITAL IN
EXCESS OF
PAR VALUE
 
RETAINED
EARNINGS
 
TREASURY SHARES
 
ACCUMULATED
OTHER
COMPREHENSIVE
INCOME (LOSS)
 
DEFERRED
COMPENSATION
 
 
(in thousands)
SHARES
 
PAR VALUE
 
 
 
SHARES
 
COST
 
 
 
TOTAL
Balance at September 30, 2018
81,520

 
$
20,380

 
$
503,396

 
$
550,523

 
35,846

 
$
(534,830
)
 
$
(34,112
)
 
$
(30,966
)
 
$
474,391

Net income

 

 

 
8,753

 

 

 

 

 
8,753

Cumulative catch-up adjustment related to adoption of ASC 606(1)

 

 

 
(5,673
)
 

 

 

 

 
(5,673
)
Dividend

 

 

 
(3,143
)
 

 

 

 

 
(3,143
)
Shares withheld on employee taxes on vested equity awards

 

 

 

 
83

 
(1,058
)
 

 

 
(1,058
)
Amortization of deferred compensation

 

 

 

 

 

 

 
856

 
856

Common stock acquired

 

 

 

 
29

 
(290
)
 

 

 
(290
)
Equity awards granted, net
1,201

 
300

 
(300
)
 









 

ESOP allocation of common stock

 

 
(8
)
 

 

 

 

 

 
(8
)
Stock-based compensation

 

 
2,933

 

 

 

 

 

 
2,933

Stock-based consideration

 

 
250

 

 

 

 

 

 
250

Other comprehensive income, net of tax

 

 

 

 

 

 
(5,450
)
 

 
(5,450
)
Balance at December 31, 2018
82,721

 
$
20,680

 
$
506,271

 
$
550,460

 
35,958

 
$
(536,178
)
 
$
(39,562
)
 
$
(30,110
)
 
$
471,561

(1) See Note 14 - Recent Accounting Pronouncements and Note 3 - Revenue for additional information. 
 
The accompanying notes to condensed consolidated financial statements are an integral part of these statements.


2

Table of Contents

GRIFFON CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(in thousands, except per share data)
(Unaudited) 
 

Three Months Ended December 31,
 

2018

2017
Revenue

$
510,522


$
437,303

Cost of goods and services

367,476


316,524

Gross profit

143,046


120,779








Selling, general and administrative expenses

113,754


106,624








Income from operations

29,292


14,155








Other income (expense)

 


 

Interest expense

(16,529
)

(16,839
)
Interest income

198


197

Other, net

1,004


414

Total other expense, net

(15,327
)

(16,228
)







Income (loss) before taxes from continuing operations

13,965


(2,073
)
Provision (benefit) from income taxes

5,212


(24,904
)
Income from continuing operations

$
8,753


$
22,831








Discontinued operations:






Income from operations of discontinued operations



11,466

Provision for income taxes



3,308

Income from discontinued operations



8,158

Net income

$
8,753


$
30,989








Income from continuing operations

$
0.21


$
0.54

Income from discontinued operations



0.19

Basic earnings per common share

$
0.21


$
0.74








Weighted-average shares outstanding

40,750


41,923








Income from continuing operations

$
0.21


$
0.53

Income from discontinued operations



0.19

Diluted earnings per common share

$
0.21


$
0.72








Weighted-average shares outstanding

41,888


43,336








Dividends paid per common share

$
0.0725


$
0.07








Net income

$
8,753


$
30,989

Other comprehensive income (loss), net of taxes:

 


 

Foreign currency translation adjustments

(5,736
)

(1,289
)
Pension and other post retirement plans

184


9,559

Change in cash flow hedges

102


88

Total other comprehensive income (loss), net of taxes

(5,450
)

8,358

Comprehensive income, net

$
3,303


$
39,347

 
The accompanying notes to condensed consolidated financial statements are an integral part of these statements.

3

Table of Contents

GRIFFON CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
 
Three Months Ended December 31,
 
2018

2017
CASH FLOWS FROM OPERATING ACTIVITIES - CONTINUING OPERATIONS:
 


 

Net income
$
8,753


$
30,989

Net (income) from discontinued operations


(8,158
)
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
 


 

Depreciation and amortization
15,085


12,958

Stock-based compensation
2,933


2,555

Provision (recovery) for losses on accounts receivable
158


(220
)
Amortization of debt discounts and issuance costs
1,229


1,243

Deferred income taxes
(1,380
)

(23,186
)
(Gain) loss on sale of assets and investments
(91
)

209

Change in assets and liabilities, net of assets and liabilities acquired:
 


 

Decrease in accounts receivable and contract costs and recognized income not yet billed
37,181


38,909

Increase in inventories
(33,958
)

(28,073
)
Increase in prepaid and other assets
(444
)

(8,459
)
Decrease in accounts payable, accrued liabilities and income taxes payable
(29,622
)

(24,973
)
Other changes, net
1,197


552

Net cash provided by (used in) operating activities - continuing operations
1,041


(5,654
)
CASH FLOWS FROM INVESTING ACTIVITIES - CONTINUING OPERATIONS:
 


 

Acquisition of property, plant and equipment
(8,397
)

(10,785
)
Acquired businesses, net of cash acquired
(9,219
)

(198,683
)
Proceeds from sale of assets
51


439

Net cash used in investing activities - continuing operations
(17,565
)

(209,029
)
CASH FLOWS FROM FINANCING ACTIVITIES - CONTINUING OPERATIONS:
 


 

Dividends paid
(3,143
)

(2,990
)
Purchase of shares for treasury
(1,348
)

(4,332
)
Proceeds from long-term debt
38,965


326,094

Payments of long-term debt
(4,322
)

(52,973
)
Change in short-term borrowings
38


35

Financing costs
(67
)

(7,392
)
Contingent consideration for acquired businesses
(1,686
)


Other, net
137


84

Net cash provided by financing activities - continuing operations
28,574


258,526

CASH FLOWS FROM DISCONTINUED OPERATIONS:
 


 

Net cash provided by (used in) operating activities
(458
)

1,261

Net cash used in investing activities


(8,076
)
Net cash provided by financing activities


396







Net cash used in discontinued operations
(458
)

(6,419
)
Effect of exchange rate changes on cash and equivalents
402


(685
)
NET INCREASE IN CASH AND EQUIVALENTS
11,994


36,739

CASH AND EQUIVALENTS AT BEGINNING OF PERIOD
69,758


47,681

CASH AND EQUIVALENTS AT END OF PERIOD
$
81,752


$
84,420

The accompanying notes to condensed consolidated financial statements are an integral part of these statements.

4

Table of Contents
GRIFFON CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(US dollars and non US currencies in thousands, except per share data)
(Unaudited)
(Unless otherwise indicated, references to years or year-end refer to Griffon’s fiscal period ending September 30)



NOTE 1 – DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION
 
About Griffon Corporation
 
Griffon Corporation (the “Company” or “Griffon”) is a diversified management and holding company that conducts business through wholly-owned subsidiaries. Griffon oversees the operations of its subsidiaries, allocates resources among them and manages their capital structures. Griffon provides direction and assistance to its subsidiaries in connection with acquisition and growth opportunities as well as in connection with divestitures. In order to further diversify, Griffon also seeks out, evaluates and, when appropriate, will acquire additional businesses that offer potentially attractive returns on capital.

The Company was founded in 1959, is a Delaware corporation headquartered in New York, N.Y. and is listed on the New York Stock Exchange (NYSE:GFF).

Griffon currently conducts its operations through two reportable segments:
 
Home & Building Products (“HBP”) segment consists of two companies, The AMES Companies, Inc. (“AMES”) and Clopay Building Products Company, Inc, (“CBP”):

AMES, founded in 1774, is the leading North American manufacturer and a global provider of branded consumer and professional tools, landscaping products, and outdoor lifestyle solutions. In 2018, we acquired ClosetMaid LLC ("ClosetMaid"), a leader in wood and wire closet organization, general living storage and wire garage storage products for homeowners and professionals.

CBP, since 1964, is a leading manufacturer and marketer of residential and commercial garage doors and sells to professional dealers and some of the largest home center retail chains in North America. In 2018, we acquired CornellCookson, a leading U.S. manufacturer and marketer of rolling steel door and grille products designed for commercial, industrial, institutional, and retail use.

Defense Electronics segment consists of Telephonics Corporation ("Telephonics"), founded in 1933, a globally recognized leading provider of highly sophisticated intelligence, surveillance and communications solutions for defense, aerospace and commercial customers.

Basis of Presentation
 
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) for interim financial information, and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, these financial statements do not include all the information and footnotes required by US GAAP for complete financial statements. As such, they should be read together with Griffon’s Annual Report on Form 10-K for the year ended September 30, 2018, which provides a more complete explanation of Griffon’s accounting policies, financial position, operating results, business properties and other matters. In the opinion of management, these financial statements reflect all adjustments considered necessary for a fair statement of interim results. Griffon’s HBP operations are seasonal; for this and other reasons, the financial results of the Company for any interim period are not necessarily indicative of the results for the full year.
 
The condensed consolidated balance sheet information at September 30, 2018 was derived from the audited financial statements included in Griffon’s Annual Report on Form 10-K for the year ended September 30, 2018.
 
The condensed consolidated financial statements include the accounts of Griffon and all subsidiaries. Intercompany accounts and transactions have been eliminated in consolidation.


5


The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting periods. These estimates may be adjusted due to changes in economic, industry or customer financial conditions, as well as changes in technology or demand. Significant estimates include allowances for doubtful accounts receivable and returns, net realizable value of inventories, restructuring reserves, valuation of goodwill and intangible assets, percentage of completion method of accounting, pension assumptions, useful lives associated with depreciation and amortization of fixed and intangible assets, warranty reserves, sales incentive accruals, stock based compensation assumptions, income taxes and tax valuation reserves, environmental reserves, legal reserves, insurance reserves and the valuation of assets and liabilities of discontinued operations, acquisition assumptions used and the accompanying disclosures. These estimates are based on management’s best knowledge of current events and actions Griffon may undertake in the future. Actual results may ultimately differ from these estimates.
 
Certain amounts in the prior year have been reclassified to conform to current year presentation.

NOTE 2 – FAIR VALUE MEASUREMENTS
 
The carrying values of cash and equivalents, accounts receivable, accounts and notes payable, and revolving credit and variable interest rate debt approximate fair value due to either the short-term nature of such instruments or the fact that the interest rate of the revolving credit and variable rate debt is based upon current market rates.

Applicable accounting guidance establishes a fair value hierarchy requiring the Company to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the hierarchy is based on the lowest level of input that is significant to the fair value measurement. The accounting guidance establishes three levels of inputs that may be used to measure fair value, as follows:

Level 1 inputs are measured and recorded at fair value based upon quoted prices in active markets for identical assets.

Level 2 inputs include inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices in active markets for similar assets and liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of assets or liabilities.

Level 3 inputs are unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.
 
The fair values of Griffon’s 2022 senior notes approximated $910,000 on December 31, 2018. Fair values were based upon quoted market prices (level 1 inputs).
 
Insurance contracts with values of $1,975 at December 31, 2018 are measured and recorded at fair value based upon quoted prices in active markets for similar assets (level 2 inputs) and are included in Prepaid and other current assets on the Consolidated Balance Sheets.
 
Items Measured at Fair Value on a Recurring Basis

At December 31, 2018, trading securities, measured at fair value based on quoted prices in active markets for similar assets (level 2 inputs), with a fair value of $2,567 ($2,086 cost basis), were included in Prepaid and other current assets on the Consolidated Balance Sheets. Realized and unrealized gains and losses on trading securities are included in Other income in the Consolidated Statements of Operations and Comprehensive Income (Loss).

In the normal course of business, Griffon’s operations are exposed to the effects of changes in foreign currency exchange rates. To manage these risks, Griffon may enter into various derivative contracts such as foreign currency exchange contracts, including forwards and options. As of December 31, 2018, Griffon entered into several such contracts in order to lock into a foreign currency rate for planned settlements of trade and inter-company liabilities payable in US dollars.

At December 31, 2018, Griffon had $16,000 of Australian dollar contracts at a weighted average rate of $1.42 which qualified for hedge accounting (level 2 inputs). These hedges were all deemed effective as cash flow hedges with gains and losses related to changes in fair value deferred and recorded in Accumulated other comprehensive income (loss) ("AOCI") and Prepaid and other

6



current assets, or Accrued liabilities, until settlement. Upon settlement, gains and losses are recognized in the Consolidated Statements of Operations and Comprehensive Income (Loss) in Cost of goods and services ("COGS"). AOCI included deferred gains of $881 ($574, net of tax) at December 31, 2018 and a gain of $692 was recorded in COGS during the three months ended December 31, 2018, respectively, for all settled contracts. All contracts expire in 30 to 150 days.

At December 31, 2018, Griffon had $940 of Canadian dollar contracts at a weighted average rate of $1.36. The contracts, which protect Canadian operations from currency fluctuations for US dollar based purchases, do not qualify for hedge accounting. For the three months ended December 31, 2018, fair value losses of $41 was recorded to Other liabilities and to Other income for the outstanding contracts, based on similar contract values (level 2 inputs). Realized losses of $10 were recorded in Other income during the three months ended December 31, 2018, respectively, for all settled contracts. All contracts expire in 30 to 210 days.

NOTE 3 – REVENUE

On October 1, 2018, the Company adopted the requirements of Accounting Standard Codification (“ASC”) Topic 606, “Revenue from Contracts with Customers”, using the modified retrospective method applied to those contracts that were not completed as of October 1, 2018. The Company’s comparative consolidated results over the prior period have not been adjusted and continue to be reported under previously issued guidance, ASC 605 - Revenue Recognition, which required that revenue was accounted for when the earnings process was complete.

This accounting standard did not materially impact the Company’s revenue recognition practices in our Home and Building Products (“HBP”) Segment, however, it impacted revenue recognition practices in our Defense Electronics Segment. The impact of adopting this accounting standard was not material to the Company’s consolidated financial statements as of and for the three months ended December 31, 2018. Under the modified retrospective method, the Company recognized the cumulative effect of initially applying this accounting standard as an adjustment to the opening balance in retained earnings of approximately $5,673, primarily relating to certain contracts in the Defense Electronics Segment containing provisions for radar and communication products that have an alternative use and / or no right to payment. For these contracts, the Company now recognizes revenue at a point in time, rather than over time as this measure more accurately depicts the transfer of control to the customer relative to the goods or services promised under the contract.

The cumulative effect of the changes made to the Company's Consolidated October 1, 2018 Balance Sheet for the adoption of ASC 606 is as follows:

Balance Sheet
As Reported at September 30, 2018
Adjustments
Balance as of October 1, 2018
CURRENT ASSETS
 
 
 
 
Contract costs and recognized income not yet billed, net of progress payments
$
121,803
 
$
(20,982
)
$
100,821
 
Inventories
398,359
 
22,025
 
420,384
 
Total Current Assets
912,874
 
1,043
 
913,917
 
Total Assets
2,084,890
 
1,043
 
2,085,933
 
 
 
 
 
CURRENT LIABILITIES
 
 
 
 
Accounts payable
233,658
 
8,282
 
241,940
 
Billings in excess of costs (1)
17,559
 
8,282
 
25,841
 
Total Current Liabilities
393,071
 
8,282
 
401,353
 
OTHER LIABILITIES
106,710
 
(1,566
)
105,144
 
Total Liabilities
1,610,499
 
6,716
 
1,617,215
 
 
 
 
 
SHAREHOLDERS' EQUITY
 
 
 
Retained Earnings
550,523
 
(5,673
)
544,850
 
Total Shareholders' Equity
474,391
 
(5,673
)
468,718
 
Total Liabilities and Shareholders’ Equity
$
2,084,890
 
$
1,043
 
$
2,085,933
 
(1) Billings in excess of costs is reported in Accounts payable on the Company's Consolidated Balance Sheets.





7



The impact to the Company's Consolidated Statement of Operations and Balance Sheet as of and for the quarter ended December 31, 2018 was as follows:
 
For the Period Ended December 31, 2018
Income Statement
As Reported
Balances Without Adoption of ASC 606
Effect of Adoption Higher/(Lower)
Net sales
$
510,522
 
$
505,916
 
$
4,606
 
Cost of goods and services
367,476
 
364,210
 
3,266
 
Income (loss) before taxes from continuing operations
13,965
 
12,625
 
1,340
 
Provision (benefit) from income taxes
5,212
 
4,920
 
292
 
Income from continuing operations
8,753
 
7,705
 
1,048
 
 
As of December 31, 2018
Balance Sheet
As Reported
Balances Without Adoption of ASC 606
Effect of Adoption Higher/(Lower)
CURRENT ASSETS
 
 
 
 
Contract costs and recognized income not yet billed, net of progress payments
$
89,232
 
$
105,608
 
$
(16,376
)
Inventories
452,362
 
433,603
 
18,759
 
Total Current Assets
916,637
 
914,254
 
2,383
 
Total Assets
2,074,789
 
2,072,406
 
2,383
 
 
 
 
 
CURRENT LIABILITIES
 
 
 
 
Accounts payable
209,202
 
200,920
 
8,282
 
Billings in excess of costs
29,113
 
20,831
 
8,282
 
Total Current Liabilities
367,324
 
359,042
 
8,282
 
OTHER LIABILITIES
91,315
 
92,589
 
(1,274
)
Total Liabilities
1,603,228
 
1,596,220
 
7,008
 
 
 
 
 
SHAREHOLDERS' EQUITY
 
 
 
Retained Earnings
550,460
 
555,085
 
(4,625
)
Total Shareholders' Equity
471,561
 
476,186
 
(4,625
)
Total Liabilities and Shareholders’ Equity
$
2,074,789
 
$
2,072,406
 
$
2,383
 


The Company’s accounting policy has been updated to align with the new standard to recognize revenue when the following criteria are met: 1) Contract with the customer has been identified; 2) Performance obligations in the contract have been identified; 3) Transaction price has been determined; 4) Transaction price has been allocated to the performance obligations; and 5) Revenue is recognized when (or as) performance obligations are satisfied.

See Note 12 - Business Segments for revenue from contracts with customers disaggregated by end markets, segments and geographic location.
Performance Obligations

A performance obligation is a promise in a contract to transfer a distinct good or service, or a bundle of goods or services, to the customer, and is the unit of accounting under ASC Topic 606. A contract with a customer is an agreement which both parties have approved, that creates enforceable rights and obligations, has commercial substance and where payment terms are identified and collectability is probable. Once the Company has entered a contract or purchase order, it is evaluated to identify performance obligations. For each performance obligation, revenue is recognized when control of the promised products is transferred to the customer, or services are satisfied under the contract or purchase order, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those products or services (the transaction price).

A contracts transaction price is allocated to each distinct performance obligation and recognized as revenue when each performance obligation is satisfied. A majority of the Company’s contracts have a single performance obligation which represents, in most cases, the product being sold to the customer. To a lesser extent, some contracts include multiple performance obligations such as a product, the related installation and, extended warranty services. These contracts require judgment in determining the number

8



of performance obligations.

Over 80% of the Company’s performance obligations are recognized at a point in time that relate to the manufacture and sale of a broad range of products and components within the HBP Segment, and revenue is recognized when title, and risk and rewards of ownership have transferred to the customer. Less than 20% of the Company’s performance obligations are recognized over time or under the percentage-of-completion method relating to prime or subcontractors from contract awards with the U.S. Government, as well as foreign governments and other commercial customers within our Defense Electronics Segment. Sales recognized over time are generally accounted for using an input measure to determine progress completed at the end of the period. We believe that cumulative costs incurred to date as a percentage of estimated total contract costs at completion is an appropriate measure of progress towards satisfaction of performance obligations, as it most accurately depicts the progress of our work and transfer of control to our customers.

Revenue from HBP Segment

A majority of the HBP Segment revenue is short cycle in nature with shipments occurring within one year from order and does not include a material long-term financing component, implicitly or explicitly. Payment terms generally range between 15 to 90 days and vary by the location of the business, the type of products manufactured to be sold and the volume of products sold, among other factors.
The Company’s HBP Segment recognizes revenue from product sales when all factors are met, including when control of a product transfers to the customer upon its shipment, completion of installation, testing, certification or other substantive acceptance required under the contract. Other than standard product warranty provisions, sales arrangements provide for no other significant post-shipment obligations on the Company. From time-to-time and for certain customers, rebates and other sales incentives, promotional allowances or discounts are offered, typically related to customer purchase volumes, all of which are fixed or determinable and are classified as a reduction of revenue and recorded at the time of sale. Griffon provides for sales returns and allowances based upon historical returns experience.
The majority of the Company’s contracts in the HBP Segment offers assurance-type warranties in connection with the sale of a product to a customer. Assurance-type warranties provide a customer with assurance that the related product will function as the parties intended because it complies with agreed-upon specifications. Such warranties do not represent a separate performance obligation.
Payment terms in the HBP Segment vary depending on the type and location of the customer and the products or services offered. Generally, the period between the time revenue is recognized and the time payment is due is not significant. Shipping and handling charges are not considered a separate performance obligation. If revenue is recognized for a good before it is shipped and handled, the related shipping and handling costs must be accrued. Additionally, all taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction and collected from a customer (e.g., sales, use, value added, and some excise taxes) are excluded from revenue. The Company's policies related to shipping, handling and taxes have not changed with the adoption of ASC 606.

Revenue from Defense Electronics Segment
The Company’s Defense Electronics segment earns a substantial portion of its revenue as either a prime contractor or subcontractor from contract awards with the U.S. Government, as well as foreign governments and other commercial customers. These contracts are typically long-term in nature, usually greater than one year and do not include a material long-term financing component, either implicitly or explicitly. Revenue and profits from such contracts are recognized under the percentage-of-completion (over time) method of accounting. Revenue and profits on fixed-price contracts that contain engineering as well as production requirements are recorded based on the ratio of total actual incurred costs to date to the total estimated costs for each contract (cost-to-cost method).
Using the cost-to-cost method, revenue is recorded at amounts equal to the ratio of actual cumulative costs incurred divided by total estimated costs at completion, multiplied by the total estimated contract revenue, less the cumulative revenue recognized in prior periods. The profit recorded on a contract using this method is equal to the current estimated total profit margin multiplied by the cumulative revenue recognized, less the amount of cumulative profit previously recorded for the contract in prior periods. As this method relies on the substantial use of estimates, these projections may be revised throughout the life of a contract. Components of this formula and ratio that may be estimated include gross profit margin and total costs at completion. The cost performance and estimates to complete long-term contracts are reviewed, at a minimum, on a quarterly basis, as well as when information becomes available that would necessitate a review of the current estimate. Adjustments to estimates for a contracts estimated costs at completion and estimated profit or loss are often required as experience is gained, more information is obtained (even though the scope of work required under the contract may or may not change) and contract modifications occur. The impact

9



of such adjustments to estimates is made on a cumulative basis in the period when such information has become known. For the three months ended December 31, 2018 and 2017, income from operations included net favorable/(unfavorable) catch-up adjustments approximating $(2,500) and $500, respectively. Gross profit is affected by a variety of factors, including the mix of products, systems and services, production efficiencies, price competition and general economic conditions.
Revenue and profits on cost-reimbursable type contracts are recognized as allowable costs are incurred on the contract at an amount equal to the allowable costs plus the estimated profit on those costs. The estimated profit on a cost-reimbursable contract may be fixed or variable based on the contractual fee arrangement. Incentive and award fees on these contracts are recorded as revenue when the criteria under which they are earned are reasonably assured of being met and can be estimated.
For contracts with multiple performance obligations, judgment is required to determine whether performance obligations specified in these contacts are distinct and should be accounted for as separate revenue transactions for recognition purposes. In these types of contracts, the Company allocates the total transaction price to each performance obligation in an amount based on the estimated relative standalone selling prices of the promised goods or services underlying each performance obligation. The Company uses an observable price to determine the stand-alone selling price for separate performance obligations or a cost plus margin approach when one is not available.
For contracts in which anticipated total costs exceed the total expected revenue, an estimated loss is recognized in the period when identifiable. A provision for the entire amount of the estimated loss is recorded on a cumulative basis. The estimated remaining costs to complete loss contracts as of December 31, 2018 and September 30, 2018 was approximately $9,700 and $12,200, respectively, and is recorded as a reduction to gross margin on the Consolidated Statements of Operations and Comprehensive Income (Loss). This loss had an immaterial impact on Griffon's Consolidated Financial Statements.
Amounts representing contract change orders or claims are included in revenue only when they can be reliably estimated and their realization is probable, and are determined on a percentage-of-completion basis measured by the cost-to-cost method.
Substantially all of Telephonics’ U.S. Government end-user contracts contain a termination for convenience clause, regardless whether Telephonics is the prime contractor or the subcontractor. This clause generally entitles Telephonics, upon a termination for convenience, to receive the purchase price for delivered items, reimbursement of allowable work-in-process costs, and an allowance for profit. Allowable costs would include the costs to terminate existing agreements with suppliers.
From time to time, Telephonics may combine contracts if they are negotiated together, have specific requirements to combine, or are otherwise closely related.
Transaction Price Allocated to the Remaining Performance Obligations

On December 31, 2018, we had $366,700 of remaining performance obligations, which we also refer to as total backlog. We expect to recognize approximately 70% of our remaining performance obligations as revenue by year-end 2019, with the balance to be completed thereafter.
Backlog represents the dollar value of funded orders for which work has not been performed. Backlog generally increases with bookings, and converts into revenue as we incur costs related to contractual commitments or the shipment of product. Given the nature of our business and a larger dependency on international customers, our bookings, and therefore our backlog, is impacted by the longer maturation cycles resulting in delays in the timing and amounts of such awards, which are subject to numerous factors, including fiscal constraints placed on customer budgets; political uncertainty; the timing of customer negotiations; and the timing of governmental approvals.
Contract Balances

Contract assets were $89,232 as of December 31, 2018 compared to $121,803 as of September 30, 2018. The $32,571 decrease in our contract assets balance was primarily due to the implementation of ASC 606. Excluding the impact of ASC 606, the decrease was primarily due to the timing of billings and work performed on various radar and surveillance programs. Contract assets primarily relate to the Company's right to consideration for work completed but not billed at the reporting date and are recorded in Contract costs and recognized income not yet billed, net of progress payments in the Consolidated Balance Sheets. Contract assets are transferred to receivables when the right to consideration becomes unconditional. Contract costs and recognized income not yet billed consists of amounts accounted for under the percentage of completion method of accounting, recoverable costs and accrued profit that cannot yet be invoiced under the terms of certain long-term contracts. Amounts will be invoiced when applicable contract terms, such as the achievement of specified milestones or product delivery, are met. At December 31, 2018 and September 30, 2018, approximately $31,400 and $29,500, respectively, of contract costs and recognized income not yet billed were expected to be collected after one year. As of December 31, 2018 and September 30, 2018, the unbilled receivable balance included $793 and $400, respectively, of reserves for contract risk.


10



Contract liabilities were $29,113 as of December 31, 2018 compared to $17,559 as of September 30, 2018. The $11,554 increase in our contract liabilities balance was primarily due to the implementation of ASC 606. Contract liabilities relate to advance consideration received from customers for which revenue has not been recognized. The Company often receives cash payments from customers in advance of the Company’s performance resulting in contract liabilities. These contract liabilities are classified as either current or long-term in the Consolidated Condensed Balance Sheet based on the timing of when the Company expects to recognize revenue. Current contract liabilities are recorded in Accounts payable and non-current contract liabilities are recorded in Other liabilities on the Consolidated Balance Sheets. Contract liabilities are reduced when the associated revenue from the contract is recognized.

NOTE 4 – ACQUISITIONS

Griffon accounts for acquisitions under the acquisition method, in which assets acquired and liabilities assumed are recorded at fair value as of the date of acquisition using a method substantially similar to the goodwill impairment test methodology (level 3 inputs). The operating results of the acquired companies are included in Griffon’s consolidated financial statements from the date of acquisition; in each instance, Griffon is in the process of finalizing the initial purchase price allocation unless otherwise noted.

On June 4, 2018, CBP completed the acquisition of 100% of the outstanding stock of CornellCookson, a leading US manufacturer and marketer of rolling steel door and grille products designed for commercial, industrial, institutional and retail use, for $180,000, excluding the estimated present value of tax benefits, and $12,426 of post-closing adjustments, primarily consisting of a working capital adjustment, of which $9,219 was paid in October 2018. The acquisition of CornellCookson substantially expanded CBP’s non-residential product offerings, and added an established professional dealer network focused on rolling steel door and grille products for commercial, industrial, institutional and retail use. There is no other contingent consideration arrangement relative to the acquisition of CornellCookson.

CornellCookson’s accounts, affected for adjustments to reflect fair market values assigned to assets purchased and liabilities assumed, and results of operations are included in the Company’s consolidated financial statements from the date of acquisition. The Company has recorded a preliminary allocation of the purchase price to the Company’s tangible and identifiable intangible assets acquired and liabilities assumed based on their fair market values (level 3 inputs) at the acquisition date. The excess of the purchase price over the fair value of the net tangible and intangible assets was recorded as goodwill and is deductible for tax purposes. Goodwill recognized at the acquisition date represents the other intangible benefits that the Company will derive from the ownership of CornellCookson, however, such intangible benefits do not meet the criteria for recognition of separately identifiable intangible assets.

The calculation of the preliminary purchase price allocation, which is pending finalization of tax-related items and completion of the related final valuation, is as follows:

 
 
Accounts receivable (1)
$
30,400

Inventories (2)
12,336

Property, plant and equipment
49,426

Goodwill
43,183

Intangible assets
67,600

Other current and non-current assets
2,648

Total assets acquired
205,593

 
 
Accounts payable and accrued liabilities
12,507

Long-term liabilities
660

Total liabilities assumed
13,167

Total
$
192,426

(1) Includes $30,818 of gross accounts receivable of which $418 was not expected to be collected. The fair value of accounts receivable approximated book value acquired.
(2) Includes $13,434 of gross inventory of which $1,098 was reserved for obsolete inventory.



11


The preliminary amounts assigned to goodwill and major intangible asset classifications, all of which are tax deductible, for the CornellCookson acquisition are as follows:

 
 
 
 
Average
Life
(Years)
Goodwill
 
$
43,183

 
N/A
Indefinite-lived intangibles
 
53,500

 
N/A
Definite-lived intangibles
 
14,100

 
12
Total goodwill and intangible assets
 
$
110,783

 
 


On February 13, 2018, AMES acquired 100% of the outstanding stock of Kelkay Limited ("Kelkay"), a leading United Kingdom manufacturer and distributor of decorative outdoor landscaping products sold to garden centers, retailers and grocers in the UK and Ireland for $56,118 (GBP 40,452), subject to contingent consideration of up to GBP 7,000. This acquisition broadened AMES' product offerings in the market and increased its in-country operational footprint. The purchase price was primarily allocated to tradenames of GBP 19,000, customer related intangibles of GBP 6,640, accounts receivable and inventory of GBP 8,894 and fixed asset and land of GBP 8,241.

On November 6, 2017, AMES acquired 100% of the outstanding stock of Harper Brush Works ("Harper"), a division of Horizon Global, for $4,383, inclusive of post-closing adjustments. Harper is a leading U.S. manufacturer of cleaning products for professional, home, and industrial use. The acquisition expanded AMES’ long-handled tool offering in North America to include brooms, brushes, and other cleaning tools and accessories. The purchase price was primarily allocated to intangible assets of $2,300, inventory and accounts receivable of $3,900 and fixed assets of $900.

On October 2, 2017, Griffon Corporation completed the acquisition of 100% of the outstanding stock of ClosetMaid, a market leader in home storage and organization products, for approximately $185,700, inclusive of certain post-closing adjustments and excluding the present value of net tax benefits from the transaction. The acquisition of ClosetMaid expanded Griffon’s Home and Building Products segment into the highly complementary home storage and organization category with a leading brand and product portfolio.

ClosetMaid's accounts, affected for adjustments to reflect fair market values assigned to assets purchased and liabilities assumed, and results of operations, are included in the Company’s consolidated financial statements from the date of acquisition. The Company has recorded an allocation of the purchase price to the Company’s tangible and identifiable intangible assets acquired and liabilities assumed based on their fair market values (level 3 inputs) at the acquisition date. The excess of the purchase price over the fair value of the net tangible and intangible assets was recorded as goodwill and is deductible for tax purposes. Goodwill recognized at the acquisition date represents the other intangible benefits that the Company will derive from the ownership of ClosetMaid, however, such intangible benefits do not meet the criteria for recognition of separately identifiable intangible assets.

12



The calculation of the final purchase price allocation is as follows:

 

Accounts receivable (1)
$
32,234

Inventories (2), (3)
28,411

Property, plant and equipment
47,464

Goodwill
70,159

Intangible assets
74,580

Other current and non-current assets
3,852

Total assets acquired
256,700

 
 
Accounts payable and accrued liabilities
68,251

Long-term liabilities
2,720

Total liabilities assumed
70,971

Total
$
185,729


(1) Includes $32,956 of gross accounts receivable of which $722 was not expected to be collected. The fair value of accounts receivable approximated book value acquired.
(2) Includes $29,079 of gross inventory of which $668 was reserved for obsolete inventory. The fair value of inventory approximated book value acquired.
(3) Includes $1,500 in inventory basis step-up, which was charged to cost of goods sold over the inventory turns of the acquired entity.

The amounts assigned to goodwill and major intangible asset classifications, all of which are tax deductible, for the ClosetMaid acquisition are as follows:
 
 
 
 
Average
Life
(Years)
Goodwill
 
$
70,159

 
N/A
Indefinite-lived intangibles
 
47,740

 
N/A
Definite-lived intangibles
 
26,840

 
21
Total goodwill and intangible assets
 
$
144,739

 
 


The Company did not incur any acquisition costs during the three months ended December 31, 2018. During the three months ended December 31, 2017, SG&A and Cost of goods and services included acquisition costs of $1,685 and $1,500, respectively.


13



NOTE 5 – INVENTORIES
 
Inventories are stated at the lower of cost (first-in, first-out or average) or market.
 
The following table details the components of inventory:
 
At December 31, 2018
 
At September 30, 2018
Raw materials and supplies
$
99,993

 
$
97,645

Work in process
112,914

 
83,578

Finished goods
239,455

 
217,136

Total
$
452,362

 
$
398,359


 
NOTE 6 – PROPERTY, PLANT AND EQUIPMENT

The following table details the components of property, plant and equipment, net:
 
At December 31, 2018
 
At September 30, 2018
Land, building and building improvements
$
130,007

 
$
130,296

Machinery and equipment
550,336

 
544,875

Leasehold improvements
50,272

 
50,111


730,615

 
725,282

Accumulated depreciation and amortization
(394,125
)
 
(382,790
)
Total
$
336,490

 
$
342,492


Depreciation and amortization expense for property, plant and equipment was $12,667 and $10,702 for the quarters ended December 31, 2018 and 2017, respectively. Depreciation included in SG&A expenses was $4,681 and $3,472 for the quarters ended December 31, 2018 and 2017, respectively. Remaining components of depreciation, attributable to manufacturing operations, are included in Cost of goods and services.

No event or indicator of impairment occurred during the three months ended December 31, 2018 which would require additional impairment testing of property, plant and equipment.
 
NOTE 7 – GOODWILL AND OTHER INTANGIBLES
 
The following table provides changes in the carrying value of goodwill by segment during the nine months ended December 31, 2018:

 
At September 30, 2018

Goodwill from acquisitions

Other
adjustments
including currency
translations

At December 31, 2018
Home & Building Products
$
420,850

 
$
300

 
$
(1,267
)
 
$
419,883

Telephonics
18,545

 

 

 
18,545

Total
$
439,395

 
$
300

 
$
(1,267
)
 
$
438,428



14



The following table provides the gross carrying value and accumulated amortization for each major class of intangible assets:
 
 
At December 31, 2018
 
 
 
At September 30, 2018
 
Gross Carrying Amount
 
Accumulated
Amortization
 
Average
Life
(Years)
 
Gross Carrying Amount
 
Accumulated
Amortization
Customer relationships & other
$
183,841

 
$
51,473

 
23
 
$
186,031

 
$
49,822

Technology and patents
19,358

 
6,517

 
13
 
19,004

 
6,238

Total amortizable intangible assets
203,199

 
57,990

 
 
 
205,035

 
56,060

Trademarks
220,172

 

 
 
 
221,883

 

Total intangible assets
$
423,371

 
$
57,990

 
 
 
$
426,918

 
$
56,060


 
Amortization expense for intangible assets was $2,418 and $2,256 for the quarters ended December 31, 2018 and 2017, respectively. Amortization expense for the remainder of 2019 and the next five fiscal years and thereafter, based on current intangible balances and classifications, is estimated as follows: 2019 - $6,900; 2020 - $8,825; 2021 - $8,825; 2022 - $8,825; 2023 - $8,746; 2024 - $8,700; thereafter $94,388.
 
No event or indicator of impairment occurred during the three months ended December 31, 2018 which would require impairment testing of long-lived intangible assets including goodwill.
 
NOTE 8 – INCOME TAXES

During the three months ended December 31, 2018, the Company recognized a tax provision of $5,212 on income before taxes from continuing operations of $13,965, compared to a tax benefit of $24,904 on a Loss before taxes from continuing operations of $2,073 in the comparable prior year period. The three month period ended December 31, 2018 included net tax provisions that affect comparability of $467. The three month period ended December 31, 2017 included net tax benefits that affect comparability of $23,018 primarily from approximately $23,941 related to the December 22, 2017 tax reform bill associated with the revaluation of deferred tax liabilities, $3,185 ($2,348 net of tax) of acquisition costs and $2,614 ($248 net of tax) charges related to cost of life insurance benefits. Excluding these items, the effective tax rates for the three months ended December 31, 2018 and 2017 were 34.0% and 35.4%, respectively.
On December 22, 2017, the “Tax Cuts and Jobs Act” (“TCJA”) was signed into law, and, among other changes, reduced the federal statutory tax rate from 35.0% to 21.0%. In accordance with U.S. GAAP for income taxes, as well as SEC Staff Accounting Bulletin No. 118 (“SAB 118”), the Company made a reasonable estimate of the impacts of the TCJA and recorded this estimate in its results for the year ended September 30, 2018. SAB 118 allows for a measurement period of up to one year, from the date of enactment, to complete the Company’s accounting for the impacts of the TCJA. As of December 31, 2018, our analysis under SAB 118 is complete and resulted in no material adjustments to the provision amounts recorded as of September 30, 2018.





15


NOTE 9 – LONG-TERM DEBT
 
 
 
At December 31, 2018
 
At September 30, 2018
  
 
Outstanding Balance

Original Issuer Premium

Capitalized Fees & Expenses
 
Balance Sheet

Coupon Interest Rate

Outstanding Balance

Original Issuer Premium
 
Capitalized Fees & Expenses
 
Balance Sheet

Coupon Interest Rate
Senior notes due 2022
(a)
$
1,000,000

 
$
1,131

 
$
(12,017
)
 
$
989,114

 
5.25
%
 
$
1,000,000

 
$
1,220

 
$
(12,968
)
 
$
988,252

 
5.25
%
Revolver due 2021
(b)
57,500

 

 
(1,272
)
 
56,228

 
Variable

 
25,000

 

 
(1,413
)
 
23,587

 
Variable

ESOP Loans
(d)
34,125

 

 
(155
)
 
33,970

 
Variable

 
34,694

 

 
(186
)
 
34,508

 
Variable

Capital lease - real estate
(e)
6,743

 

 
(74
)
 
6,669

 
5.00
%
 
7,503

 

 
(80
)
 
7,423

 
5.00
%
Non US lines of credit
(f)
14,084

 

 
(12
)
 
14,072

 
Variable

 
7,951

 

 
(16
)
 
7,935

 
Variable

Non US term loans
(f)
49,573

 

 
(204
)
 
49,369

 
Variable

 
53,533

 

 
(148
)
 
53,385

 
Variable

Other long term debt
(g)
5,548

 

 
(19
)
 
5,529

 
Variable

 
6,011

 

 
(19
)
 
5,992

 
Variable

Totals
 
1,167,573

 
1,131

 
(13,753
)
 
1,154,951

 
 

 
1,134,692

 
1,220

 
(14,830
)
 
1,121,082

 
 

less: Current portion
 
(12,872
)
 

 

 
(12,872
)
 
 

 
(13,011
)
 

 

 
(13,011
)
 
 

Long-term debt
 
$
1,154,701

 
$
1,131

 
$
(13,753
)
 
$
1,142,079

 
 

 
$
1,121,681

 
$
1,220

 
$
(14,830
)
 
$
1,108,071

 
 

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