Griffon Corporation Announces Operating Results for the First Quarter of Fiscal 2000 and Increase in Stock Buyback Program

Jericho, New York, January 31, 2000—Griffon Corporation (NYSE: GFF) today reported operating results for the first quarter of fiscal 2000, ended December 31, 1999. These results reflect the required adoption of the American Institute of Certified Public Accountants’ Statement of Position No. 98-5, “Reporting on the Costs of Start-up Activities,” and the related cumulative effect of a change in accounting principle to write-off costs that were previously capitalized by Company’s 60%-owned joint venture in connection with start-up activities and the implementation of additional production capacity.

Net sales for the first quarter rose to $280,761,000 compared to $258,557,000 for the first quarter of fiscal 1999. Operating income increased to $16,415,000 from $12,792,000 last year. Income before the cumulative effect of the accounting change for the quarter was $9,732,000 compared to $7,152,000 for the first quarter of last year, and includes a credit of $2,116,000 representing the minority interest’s share of the change in accounting principle. Diluted earnings per share for the quarter before the cumulative effect of the change in accounting principle was $.32 compared to $.23 a year earlier. Basic earnings per share for the quarter before the cumulative effect of the change in accounting principle was $.32 compared to $.24 last year. The cumulative effect of the change in accounting principle was $5,290,000 (net of $3,784,000 income tax effect) or $.17 per share.

The increase in operating income was primarily from substantially improved results in specialty plastic films. This unit’s European joint venture achieved volume-driven improvement and increased manufacturing efficiencies. Management expects that this improvement in Europe will continue, and anticipates that new programs with the division’s major customer should invigorate specially plastic films’ domestic business toward the end of the fiscal year.

Since the end of fiscal 1999 the Company has purchased approximately 500,000 shares of its Common Stock, and announced today that it has increased its stock buyback program from 1,500,000 shares to 3,000,000 shares. Since 1993, the Company has expended $81,000,000 to purchase 9,000,000 shares of its capital stock as part of this plan. Additional purchases will be made from time-to-time, depending upon market conditions, at prices deemed appropriate by management.

Finally, the Company also announced the acquisition by Telephonics, our electronic information and communication systems operation, of search and weather radar product lines from Honeywell International Inc. These radars, which have long been used on fixed wing and helicopter aircraft, round out Telephonics’ existing product line, enabling it to provide a full range of radar options for maritime surveillance, search and rescue, drug interdiction, weather detection and other applications in domestic and international markets.

Griffon Corporation—

• is a leading manufacturer and marketer of residential, commercial and industrial garage doors sold to professional installing dealers and major home center retail chains;
• installs and services specialty building products and systems, primarily garage doors, openers, fireplaces and cabinets, for new construction markets through a substantial network of operations located throughout the country;
• is a leader in the development and production of embossed and laminated specialty plastic films used in the baby diaper, feminine napkin, adult incontinent, surgical and patient care markets; and
• develops and manufactures information and communication systems for government and commercial markets worldwide.