Griffon Shifts to Asset-Light Model, Expands Australian Footprint

TL;DR

**GFF is aggressively restructuring for higher margins and expanding internationally, but watch out for its heavy reliance on two key customers in its HBP segment.**

AI Summary

GRIFFON CORP (GFF) reported a strategic shift in its Consumer and Professional Products (CPP) segment, completing an expanded global sourcing strategy by September 30, 2024. This initiative involved concluding manufacturing operations at four sites and four wood mills, reducing CPP's facility footprint by approximately 1.2 million square feet (15%) and headcount by approximately 600 employees. The company incurred $133,777 in charges related to this restructuring, comprising $51,082 in cash charges for employee retention, severance, and facility exit costs, and $82,695 in non-cash charges, primarily asset write-downs. Capital investments for the project totaled $2,678. Proceeds from the sale of real estate and equipment reached $13,271 through September 30, 2024, with an additional $17,729 in fiscal year 2025. In a growth move, on July 1, 2024, Griffon's subsidiary, The AMES Companies, Inc. (AMES), acquired Pope, an Australian residential watering products provider, from The Toro Company (NYSE:TTC) for approximately AUD 21,800 ($14,500). Pope generated over $25,000 in revenue in its first full year. The Home and Building Products (HBP) segment, primarily Clopay, continues to be a leading North American manufacturer of garage doors, maintaining exclusive supplier relationships with Home Depot and Menards for 40 and 30 years, respectively.

Why It Matters

Griffon's strategic pivot to an asset-light model in its CPP segment, marked by significant facility closures and headcount reductions, aims to boost EBITDA margins to 15% and enhance free cash flow through improved working capital and reduced capital expenditures. This move could significantly improve profitability and operational efficiency, making GFF more attractive to investors seeking leaner, more agile companies. The acquisition of Pope in Australia further diversifies AMES's product portfolio and geographic reach, strengthening its competitive position against rivals like The Toro Company in the global consumer products market. However, the reliance of the HBP segment on exclusive supplier relationships with Home Depot and Menards presents a concentration risk, as the loss of either customer would materially impact Clopay and Griffon.

Risk Assessment

Risk Level: medium — The risk level is medium due to the significant operational restructuring in the CPP segment, which involved closing four manufacturing sites and four wood mills and reducing headcount by approximately 600. While intended to improve efficiency, such large-scale changes carry execution risks. Additionally, the HBP segment's reliance on Home Depot and Menards as exclusive suppliers for 40 and 30 years, respectively, poses a material adverse risk, as stated in the filing, if either relationship were to be lost.

Analyst Insight

Investors should monitor the successful integration of the Pope acquisition and the realization of the projected 15% EBITDA margin and free cash flow improvements from the CPP global sourcing strategy. Diversification efforts beyond the current reliance on Home Depot and Menards in the HBP segment would de-risk the investment, so watch for any new customer announcements or expanded distribution channels.

Financial Highlights

debt To Equity

N/A

revenue

N/A

operating Margin

N/A

total Assets

N/A

total Debt

N/A

net Income

N/A

eps

N/A

gross Margin

N/A

cash Position

N/A

revenue Growth

N/A

Revenue Breakdown

Key Numbers

• $133,777 — Total restructuring charges (Resulting from CPP global sourcing expansion)
• $51,082 — Cash restructuring charges (For employee retention, severance, operational transition, and facility/lease exit costs)
• $82,695 — Non-cash restructuring charges (Primarily related to asset write-downs)
• $14,500 — Purchase price for Pope acquisition (Approximately AUD 21,800 in cash)
• $25,000 — Pope's first full year revenue (Indicates immediate revenue contribution from acquisition)
• 1.2 million — Square feet reduction in CPP facility footprint (Approximately 15% of CPP's square footage)
• 600 — Headcount reduction in CPP (Due to global sourcing expansion)
• 15% — Target EBITDA margin for CPP (Aimed for by the asset-light business model)
• $3,060,000,000 — Aggregate market value of common stock (As of March 31, 2025)
• 46,231,089 — Outstanding shares (As of October 31, 2025)

Key Players & Entities

• GRIFFON CORP (company) — registrant
• The AMES Companies, Inc. (company) — subsidiary of Griffon
• Pope (company) — acquired Australian provider of residential watering products
• The Toro Company (company) — seller of Pope assets
• Clopay Corporation (company) — primary operating entity of HBP segment
• Home Depot (company) — major customer of Clopay
• Menards (company) — major customer of Clopay
• New York Stock Exchange (regulator) — exchange where GFF is listed
• SEC (regulator) — Securities and Exchange Commission

FAQ

Risk Factors

• Economic Conditions and Market Volatility [high — market]: Current economic conditions and uncertainties in the housing, credit, and capital markets pose a risk to Griffon's operations and financial performance. These factors can impact demand for its products and the cost of capital.
• Restructuring and Integration Challenges [medium — operational]: The company's ability to achieve expected savings and improved operational results from cost control, restructuring, integration, and disposal initiatives, including the expanded CPP global outsourcing strategy, is subject to inherent risks. Failure to execute these plans effectively could impact profitability.
• Competition and Pricing Pressures [medium — market]: Increasing competition and pricing pressures in the markets served by Griffon's operating companies could negatively affect sales and margins. The company must maintain its leading positions and brand differentiation to mitigate this risk.
• Raw Material Costs and Availability [medium — operational]: Increases in the cost or lack of availability of key raw materials such as steel, resin, and wood, as well as components or purchased finished goods, can impact production costs and the ability to meet customer demand.
• Acquisition and Integration Risks [medium — operational]: The ability to identify and successfully consummate, and integrate, value-adding acquisition opportunities is crucial. Integration challenges or overpaying for acquisitions could negatively impact financial performance.
• Customer Demand and Product Innovation [medium — market]: The ability of Griffon's operating companies to expand into new geographic and product markets, and to anticipate and meet customer demands for new products and innovations, is critical for sustained growth.

Industry Context

Griffon operates in diverse markets including consumer and professional products, and home and building products. The company emphasizes its branded offerings and aims to reduce market cyclicality through diversification. Key competitors likely include other manufacturers of consumer goods, tools, and building materials. The industry is influenced by housing market trends, consumer spending, and raw material costs.

Regulatory Implications

Griffon's operations are subject to general business regulations, including those related to environmental compliance, labor laws, and international trade. The company's global sourcing strategy may introduce complexities in adhering to varying international regulations. Cybersecurity is also a noted area of focus (Item 1C).

What Investors Should Do

1. Monitor CPP segment's margin improvement post-restructuring.
2. Evaluate the integration and performance of the Pope acquisition.
3. Assess the impact of raw material cost volatility.
4. Observe the company's ability to execute on growth and acquisition strategies.

Key Dates

• 2024-09-30: Completion of expanded global sourcing strategy for CPP segment — Reduced CPP's facility footprint by 1.2 million sq ft and headcount by 600 employees, incurring $133,777 in restructuring charges.
• 2024-07-01: Acquisition of Pope by AMES (Griffon subsidiary) — Expanded AMES's Australian operations and product portfolio in residential watering products for approximately $14,500.
• 2022-01-01: Acquisition of Hunter Fan Company — Expanded CPP segment's brand portfolio.
• 2018-01-01: Acquisition of ClosetMaid, LLC — Expanded CPP segment's brand portfolio.
• 2018-01-01: Acquisition of CornellCookson, Inc. — Established HBP segment as a leading North American manufacturer of garage doors.

Glossary

CPP

Consumer and Professional Products segment of Griffon Corporation. (This segment is undergoing significant restructuring and strategic expansion through acquisitions.)

HBP

Home and Building Products segment of Griffon Corporation. (This segment, primarily Clopay, is a leading manufacturer of garage doors with long-standing customer relationships.)

AMES

The AMES Companies, Inc., a subsidiary of Griffon Corporation. (AMES is expanding its international presence, particularly in Australia, through strategic acquisitions like Pope.)

Restructuring charges

Costs incurred by a company as a result of significant organizational changes, such as facility closures or workforce reductions. (Griffon incurred $133,777 in charges related to its CPP segment's global sourcing strategy, including $51,082 in cash and $82,695 in non-cash items.)

Forward-looking statements

Statements in a company's filings that predict future performance or events, often using words like 'anticipates,' 'expects,' or 'plans.' (These statements are subject to risks and uncertainties that could cause actual results to differ materially from projections.)

Year-Over-Year Comparison

Information comparing key metrics to the previous year, such as revenue growth, margin changes, and new risks, is not available in the provided text. The filing details recent strategic shifts, including the CPP restructuring and the Pope acquisition, but lacks year-over-year comparative financial data.

Key Financial Figures

• $0.25 — ange on which registered Common Stock, $0.25 par value GFF New York Stock Exchange
• $71.50 — ite Transactions for March 31, 2025 was $71.50. The number of the registrant's outstan
• $14,500 — approximately AUD 21,800 (approximately $14,500) in cash. This is CPP's seventh acquisi
• $25,000 — Australian market. Pope generated over $25,000 in revenue in its first full year of op
• $5,609 — 30, 2025 and September 30, 2024 totaled $5,609 and $14,532, respectively. The adopti
• $14,532 — d September 30, 2024 totaled $5,609 and $14,532, respectively. The adoption of an ass
• $133,777 — n of the project resulted in charges of $133,777, which included $51,082 of cash charges
• $51,082 — in charges of $133,777, which included $51,082 of cash charges for employee retention
• $82,695 — and facility and lease exit costs, and $82,695 of non-cash charges, primarily related
• $2,678 — et write-downs. In addition, there were $2,678 of capital investments to effectuate th
• $13,271 — , which through September 30, 2024 were $13,271, and excludes future proceeds from the
• $17,729 — ate and equipment held for sale totaled $17,729. Available Information We are subject

Filing Documents

• gff-20250930.htm (10-K) — 2953KB
• exhibit1026togriffonexecut.htm (EX-10.26) — 172KB
• gff9_30x2025xex21listofsub.htm (EX-21) — 18KB
• gff-2025x09x30xexx23gtcons.htm (EX-23) — 2KB
• gff9-30x2025exhibit311.htm (EX-31.1) — 12KB
• gff9-30x2025exhibit312.htm (EX-31.2) — 12KB
• gff9-30x202510kexhibit32.htm (EX-32) — 9KB
• gff-20250930_g1.jpg (GRAPHIC) — 96KB
• 0001628280-25-053242.txt ( ) — 17056KB
• gff-20250930.xsd (EX-101.SCH) — 109KB
• gff-20250930_cal.xml (EX-101.CAL) — 153KB
• gff-20250930_def.xml (EX-101.DEF) — 588KB
• gff-20250930_lab.xml (EX-101.LAB) — 1203KB
• gff-20250930_pre.xml (EX-101.PRE) — 943KB
• gff-20250930_htm.xml (XML) — 3002KB

BUSINESS

BUSINESS 2 ITEM 1A. R ISK FACTORS 12 ITEM 1B. U NRESOLVED STAFF COMMENTS 23 ITEM 1C. C YBERSECURITY 23 ITEM 2. P ROPERTIES 25 ITEM 3. L EG AL PROCEEDINGS 26 ITEM 4. M INE SAFETY DISCLOSURES 26 Part II ITEM 5. M ARKET FOR THE REGISTRA NT 'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES 27 ITEM 6. R ESERVED 29 ITEM 7. M ANAGEMENT ` S DISCU SSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 30 ITEM 7A. QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK 44 ITEM 8.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 45 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FIN ANCIAL DISCLOSURE 95 ITEM 9A. C ONTROLS AND PROCEDURES 95 ITEM 9B. O THER INFORMATION 96 ITEM 9C. D ISCL OSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS 96 PART III ITEM 10. D IRECTORS , EXECUTIVE OFF IC ERS AND CORPORATE GOVERNANCE 97 ITEM 11. E XECUTIVE COMPENSATION 97 ITEM 12. S ECURITY OWNERSHIP OF CERTAIN BENEFI CIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS 97 ITEM 13. C ERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE 97 ITEM 14. PRINCI PAL ACCOUNTANT FEES AND SERVICES 97 P ART IV ITEM 15. E XHIBITS AND FINANCIAL STATEMENT SCHEDULES 97 EXHIBITS 98 S IGNATURES 101 Special Notes Regarding Forward-Looking Statements This Annual Report on Form 10-K, especially "Management's Discussion and Analysis", contains certain "forward-looking statements" within the meaning of the Securities Act, the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. Such statements relate to, among other things, income (loss), earnings, cash flows, revenue, changes in operations, operating improvements, the industries in which Griffon Corporation (the "Company" or "Griffon") operates and the United States and global economies. Statements in this Form 10-K that are not historical are hereby identified as "forward-looking statements" and may be indicated by words or phrases such as "anticipates," "supports," "plans," "projects," "expects," "believes," "achieves," "should," "would," "could," "hope," "forecast," "management is of the opinion," "may," "will," "estimates," "intends," "explores," "opportunities," the negative of these expressions, use of the future tense and similar words or phrases. Such forward-looking statements are subject to inherent risks and uncertainties that could cause actual results to differ m

Business

Item 1. Business Overview Griffon Corporation (the "Company," "Griffon," "we," or "us") is a diversified management and holding company that conducts business through wholly-owned subsidiaries. The Company, founded in 1959, is a Delaware corporation headquartered in New York, N.Y. and is listed on the New York Stock Exchange (NYSE:GFF). Business Strategy Our strategic objective is to maintain leading positions in the markets we serve by providing innovative, branded products with superior quality and industry-leading service. We place emphasis on our iconic and well-respected brands, which helps to differentiate us and our offerings from our competitors and strengthens our relationship with our customers and those who ultimately use our products. Through operating a diverse portfolio of businesses, we expect to reduce variability caused by external factors such as market cyclicality, seasonality, and weather. We achieve diversity by providing various product offerings and brands through multiple sales and distribution channels and conducting business across multiple countries which we consider our home markets. Griffon oversees the operations of its subsidiaries, allocates resources among them and manages their capital structures. Griffon provides direction and assistance to its subsidiaries with acquisition and growth opportunities as well as divestitures. As long-term investors, we intend to continue to grow and strengthen our existing businesses, and to diversify further through investments in our businesses and acquisitions. Since 2017, we have undertaken a series of transformative transactions to strengthen our core business and increase shareholder value. 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. in 2018, which has established

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View this 10-K filing on SEC EDGAR