Griffon Reports Results for Third Quarter

Griffon Corporation Reports Operating Results for the Third Quarter of Fiscal 1999

Jericho, New York, July 29, 1999—Griffon Corporation (NYSE:GFF) today reported operating results for the third quarter and nine months ended June 30, 1999.

Net sales for the third quarter increased to $262,413,000 compared to $229,407,000 for the third quarter of fiscal 1998. Net income for the quarter was $5,817,000 compared to $6,753,000 for the third quarter of last year. Both diluted and basic earnings per share for the quarter were $.19 compared to $.22 for the third quarter of last year.

The growth in sales came in large part from the building products division, reflecting strong performance from an acquisition completed in the second quarter, augmented by sales increases in the specialty plastic films and electronic information and communication systems divisions. Operating income in the third quarter was slightly higher than last year. Building products had increased earnings in the quarter attributable to sales growth and to certain steps recently undertaken including plant consolidations, the sale of an unprofitable commercial product line and the successful implementation of additional production capacity. It is anticipated that building products’ market will remain strong and result in a positive operating trend. The results in specialty plastic films continue to be disappointing. Earnings of a business acquired in the fourth quarter of 1998 were offset by the effects of competitive pricing, raw material cost increases and by delays in the anticipated start up of new programs in the infant diaper market. The third quarter reflected continuation of solid growth in sales and earnings from the electronics division. A strong backlog and diversity of programs should enable this division to continue to post favorable results.

Net sales for the first nine months of fiscal 1999 were $757,330,000 compared to $658,297,000 for the first nine months of fiscal 1998. Operating results for the first nine months of fiscal 1999 reflect a restructuring charge, incurred in the second quarter, aggregating $3,500,000 or $.07 per share for consolidation of certain of the company’s building products operations. Net income for the first nine months of fiscal 1999 was $10,508,000 compared to $18,386,000 for the first nine months of last year. Diluted earnings per share for the nine months ended June 30, 1999 were $.34 compared to $.59 for the first nine months of last year. Basic earnings per share for the first nine months of fiscal 1999 were $.35 compared to $.60 for the first nine months of last year.

Griffon Corporation—

is a leading manufacturer and marketer of residential garage doors, as well as a major supplier of commercial and industrial garage doors and a range of related products and services for the home building and replacement markets;
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 manufacturers information and communication systems for government and commercial markets worldwide.

“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995: All statements other than statements of historical fact included in this release, including without limitation statements regarding the company’s financial position, business strategy, Year 2000 readiness and the plans and objectives of the company’s management for future operations, are forward-looking statements. When used in this release, words such as “anticipate”, “believe”, “estimate”, “expect”, “intend”, and similar expressions, as they relate to the company or its management, identify forward-looking statements. Such forward-looking statements are based on the beliefs of the company’s management, as well as assumptions, made by and information currently available to the company’s management. Actual results could differ materially from those contemplated by the forward-looking statements as a result of certain factors, including but not limited to, business and economic conditions, competitive factors and pricing pressures, capacity and supply constraints and the impact of any disruption or failure in normal business activities at the company and its customers and suppliers as a consequence of Year 2000 related problems. Such statements reflect the views of the company with respect to future events and are subject to these and other risks, uncertainties and assumptions relating to the operations, results of operations, growth strategy and liquidity of the company.

Griffon Corporation Operating Highlights (Unaudited)
	For the Three Months Ended June 30,		For the Nine Months Ended June 30,
	1999	1998	1999		1998
Net sales	$262,413,000	$229,407,000	$757,330,000		$658,297,000

Operating income	$ 11,303,000	$ 11,017,000	$ 21,816,000	(1)	$ 31,397,000
Interest expense and other, net	(2,069,000)	(297,000)	(5,136,000)		(2,212,000)

Income before income taxes	9,234,000	10,720,000	16,680,000		29,185,000
Provision for income taxes	(3,417,000)	(3,967,000)	(6,172,000)		(10,799,000)
Net income	$ 5,817,000	$ 6,753,000	$ 10,508,000		$ 18,386,000
Net income per share of common stock:
Basic	$.19	$.22	$.35	(1)	$.60
Diluted	$.19	$.22	$.34	(1)	$.59
Weighted average number of shares used in the calculation of per share results:
Basic	30,372,000	30,625,000	30,381,000		30,533,000
Diluted	30,445,000	31,318,000	30,569,000		31,413,000
(1) Includes a pre-tax restructuring charge of $3,500,000 or $.07 per share incurred in the quarter ended March 31, 1999.