Griffon Corporation Announces Operating Results for the Third Quarter of Fiscal 2000

Jericho, New York, August 2, 2000—Griffon Corporation (NYSE: GFF) today reported operating results for the third quarter of fiscal 2000.

Net sales for the third quarter increased to $278,719,000 compared to $262,413,000 for the third quarter of fiscal 1999. Operating income rose to $14,399,000 compared to $11,303,000 last year. Net income increased to $6,248,000 compared to $5,817,000 last year. Diluted and basic earnings per share were each $.21 for the current quarter compared to $.19 for the third quarter last year.

The increase in sales came primarily from specialty plastic films, reflecting continued growth in Europe on the strength of substantially higher volume in the division’s joint venture and from improving domestic operations. Higher sales in the company’s electronics operation, which recently received contract awards from Boeing totaling approximately $31 million for integrated intercommunication and radio management systems for use on the C-17 aircraft, also contributed to the increase. Specialty plastic films achieved appreciably higher operating profits due to the volume growth, resultant manufacturing efficiencies and higher margin new products. The electronics operation also saw a continuation of margin improvement due to programs that have transitioned from development to production and earnings from an acquired business. Partly offsetting these advances were lower earnings in the building products portion of the business from less than anticipated sales volume and higher operating costs associated with the expansion of sales to the retail distribution channel. Building products’ operating results also included a loss from a commercial door product line for which strategic alternatives are being explored.

Net sales for the nine months ended June 30, 2000 were $818,369,000 compared to $757,330,000 for the first nine months of fiscal 1999. Operating income rose to $36,918,000 compared to $21,816,000. The operating results for last year included a restructuring charge of $3,500,000 in connection with the closure and consolidation of certain manufacturing and distribution facilities. In the first quarter of fiscal 2000 the company was required to adopt the American Institute of Certified Public Accountants’ Statement of Position No. 98-5, “Reporting on the Costs of Start-up Activities,” and operating results for that quarter reflect the related cumulative effect of a change in accounting principle to write-off costs that were previously capitalized by the company’s 60%-owned joint venture in connection with start-up activities and the implementation of additional production capacity. Income before the cumulative effect of the accounting change for the nine months was $17,283,000 compared to $10,508,000 last year, and includes a credit of $2,116,000 representing the minority’s share of the change in accounting principle. Basic and diluted earnings per share were each $.57 before the cumulative effect of the change in accounting principle compared to $.35 per share and $.34 per share respectively, for the nine months of 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.

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.

“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 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. 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. Readers are cautioned not to place undue reliance on these forward-looking statements. The company does not undertake to release publicly any revisions to these forward-looking statements to reflect future events or circumstances or to reflect the occurrence of unanticipated events.