ý
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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DELAWARE
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11-1893410
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(State or other jurisdiction of
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(I.R.S. Employer
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incorporation or organization)
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Identification No.)
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712 Fifth Ave, 18
th
Floor, New York, New York
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10019
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
o
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Accelerated filer
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ý
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Non-accelerated filer
o
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Smaller reporting company
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o
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(Do not check if a smaller reporting company)
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Page
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(Unaudited)
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June 30,
2015 |
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September 30,
2014 |
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CURRENT ASSETS
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Cash and equivalents
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$
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45,955
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$
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92,405
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Accounts receivable, net of allowances of $6,411 and $7,336
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240,189
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258,436
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Contract costs and recognized income not yet billed, net of progress payments of $16,834 and $16,985
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104,011
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109,930
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Inventories, net
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318,193
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290,135
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Prepaid and other current assets
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46,747
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62,569
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Assets of discontinued operations
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1,625
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1,624
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Total Current Assets
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756,720
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815,099
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PROPERTY, PLANT AND EQUIPMENT, net
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366,364
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370,565
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GOODWILL
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362,745
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375,294
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INTANGIBLE ASSETS, net
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219,653
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233,623
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OTHER ASSETS
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14,139
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13,302
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ASSETS OF DISCONTINUED OPERATIONS
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2,131
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2,126
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Total Assets
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$
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1,721,752
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$
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1,810,009
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CURRENT LIABILITIES
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Notes payable and current portion of long-term debt
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$
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11,771
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$
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7,886
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Accounts payable
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175,569
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218,703
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Accrued liabilities
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99,029
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104,740
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Liabilities of discontinued operations
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2,392
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3,282
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Total Current Liabilities
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288,761
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334,611
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LONG-TERM DEBT, net
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828,699
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791,301
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OTHER LIABILITIES
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138,800
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148,240
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LIABILITIES OF DISCONTINUED OPERATIONS
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3,244
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3,830
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Total Liabilities
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1,259,504
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1,277,982
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COMMITMENTS AND CONTINGENCIES - See Note 19
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SHAREHOLDERS’ EQUITY
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Total Shareholders’ Equity
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462,248
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532,027
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Total Liabilities and Shareholders’ Equity
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$
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1,721,752
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$
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1,810,009
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COMMON STOCK
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CAPITAL IN
EXCESS OF
PAR VALUE
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RETAINED
EARNINGS
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TREASURY SHARES
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ACCUMULATED
OTHER
COMPREHENSIVE
INCOME (LOSS)
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DEFERRED
COMPENSATION
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||||||||||||||||||||
(in thousands)
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SHARES
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PAR VALUE
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SHARES
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COST
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Total
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||||||||||||||||||||
Balance at September 30, 2014
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78,484
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$
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19,621
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$
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506,090
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$
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427,913
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25,335
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$
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(354,216
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)
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$
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(30,064
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)
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$
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(37,317
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)
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$
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532,027
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Net income
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—
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—
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—
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23,486
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—
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—
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—
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—
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23,486
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Dividend
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—
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—
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—
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(5,807
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)
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—
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—
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—
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—
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(5,807
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)
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|||||||
Tax effect from exercise/vesting of equity awards, net
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—
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—
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345
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—
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—
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—
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—
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—
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345
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|||||||
Amortization of deferred compensation
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—
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—
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—
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—
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—
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—
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—
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2,088
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2,088
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Common stock issued
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56
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14
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357
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—
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—
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—
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—
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—
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371
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|||||||
Common stock acquired
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—
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—
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—
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—
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3,917
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(58,218
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)
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—
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—
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(58,218
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)
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Common stock issued for equity awards, net
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549
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137
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(296
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)
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—
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—
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—
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—
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—
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(159
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)
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ESOP allocation of common stock
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—
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—
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651
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—
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—
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—
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—
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—
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651
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Stock-based compensation
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—
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—
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8,303
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—
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—
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—
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—
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—
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8,303
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Other comprehensive loss, net of tax
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—
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—
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—
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—
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—
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—
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(40,839
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)
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—
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(40,839
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)
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|||||||
Balance at June 30, 2015
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79,089
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$
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19,772
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$
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515,450
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$
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445,592
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29,252
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$
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(412,434
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)
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$
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(70,903
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)
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$
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(35,229
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)
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$
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462,248
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Three Months Ended June 30,
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Nine Months Ended June 30,
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||||||||||||
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2015
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2014
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2015
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2014
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||||||||
Revenue
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$
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511,694
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$
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505,039
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$
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1,513,874
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$
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1,466,184
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Cost of goods and services
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388,205
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386,732
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1,158,021
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1,132,387
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||||
Gross profit
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123,489
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118,307
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355,853
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333,797
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Selling, general and administrative expenses
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95,575
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96,135
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283,037
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273,437
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Restructuring and other related charges
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—
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358
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—
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1,892
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Total operating expenses
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95,575
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96,493
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283,037
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275,329
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Income from operations
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27,914
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21,814
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72,816
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58,468
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Other income (expense)
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Interest expense
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(12,169
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)
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(11,661
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)
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(35,935
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)
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(37,184
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)
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||||
Interest income
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19
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120
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291
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181
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Loss from debt extinguishment, net
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—
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—
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—
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(38,890
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)
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||||
Other, net
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929
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2,621
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(279
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)
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4,310
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Total other expense, net
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(11,221
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)
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(8,920
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)
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(35,923
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)
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(71,583
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)
|
||||
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||||||||
Income (loss) before taxes
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16,693
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12,894
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36,893
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(13,115
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)
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||||
Provision (benefit) for income taxes
|
5,800
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(1,570
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)
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13,407
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(4,990
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)
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||||
Net income (loss)
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$
|
10,893
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$
|
14,464
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$
|
23,486
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|
$
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(8,125
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)
|
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||||||||
Basic income (loss) per common share
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$
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0.25
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$
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0.30
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$
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0.52
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$
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(0.16
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)
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Weighted-average shares outstanding
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44,025
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|
48,370
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45,228
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50,038
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||||
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Diluted income (loss) per common share
|
$
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0.23
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$
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0.29
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$
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0.50
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|
$
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(0.16
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)
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Weighted-average shares outstanding
|
46,980
|
|
|
49,836
|
|
|
47,285
|
|
|
50,038
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||||
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||||||||
Dividends paid per common share
|
$
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0.04
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|
$
|
0.03
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$
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0.12
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$
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0.09
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|
|
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||||||||
Net income (loss)
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$
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10,893
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$
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14,464
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$
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23,486
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|
$
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(8,125
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)
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Other comprehensive income (loss), net of taxes:
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||||
Foreign currency translation adjustments
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4,801
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2,809
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(41,083
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)
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|
896
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|
||||
Pension and other post retirement plans
|
353
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|
317
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1,059
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|
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1,732
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||||
Gain on cash flow hedge
|
209
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—
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|
55
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|
|
—
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||||
Change in available-for-sale securities
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—
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—
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(870
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)
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|
—
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|
||||
Total other comprehensive income (loss), net of taxes
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5,363
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3,126
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(40,839
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)
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|
2,628
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|
||||
Comprehensive income (loss), net
|
$
|
16,256
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|
$
|
17,590
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|
|
$
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(17,353
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)
|
|
$
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(5,497
|
)
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Nine Months Ended June 30,
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||||||
|
2015
|
|
2014
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||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
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Net income (loss)
|
$
|
23,486
|
|
|
$
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(8,125
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)
|
|
|
|
|
||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
|
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||
|
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|
||||
Depreciation and amortization
|
51,901
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|
|
50,027
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|
||
Stock-based compensation
|
8,303
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|
|
8,133
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|
||
Asset impairment charges - restructuring
|
—
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|
|
191
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|
||
Provision for losses on accounts receivable
|
121
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|
|
420
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|
||
Amortization of debt discounts and issuance costs
|
4,894
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|
|
4,789
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|
||
Loss from debt extinguishment, net
|
—
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|
|
38,890
|
|
||
Deferred income taxes
|
1,111
|
|
|
(314
|
)
|
||
(Gain) loss on sale/disposal of assets and investments
|
(317
|
)
|
|
78
|
|
||
Change in assets and liabilities, net of assets and liabilities acquired:
|
|
|
|
|
|
||
Decrease in accounts receivable and contract costs and recognized income not yet billed
|
14,977
|
|
|
7,443
|
|
||
Increase in inventories
|
(36,483
|
)
|
|
(33,195
|
)
|
||
Increase in prepaid and other assets
|
(596
|
)
|
|
(3,439
|
)
|
||
Decrease in accounts payable, accrued liabilities and income taxes payable
|
(39,864
|
)
|
|
(15,754
|
)
|
||
Other changes, net
|
2,053
|
|
|
712
|
|
||
Net cash provided by operating activities
|
29,586
|
|
|
49,856
|
|
||
|
|
|
|
||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
||
Acquisition of property, plant and equipment
|
(55,365
|
)
|
|
(54,859
|
)
|
||
Acquired businesses, net of cash acquired
|
(2,225
|
)
|
|
(62,306
|
)
|
||
Proceeds from sale of assets
|
275
|
|
|
491
|
|
||
Investment sales (purchases)
|
8,891
|
|
|
(8,402
|
)
|
||
Net cash used in investing activities
|
(48,424
|
)
|
|
(125,076
|
)
|
||
|
|
|
|
||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
||
Proceeds from issuance of common stock
|
371
|
|
|
584
|
|
||
Dividends paid
|
(5,807
|
)
|
|
(4,841
|
)
|
||
Purchase of shares for treasury
|
(58,218
|
)
|
|
(72,518
|
)
|
||
Proceeds from long-term debt
|
121,523
|
|
|
682,913
|
|
||
Payments of long-term debt
|
(80,495
|
)
|
|
(602,134
|
)
|
||
Change in short-term borrowings
|
(81
|
)
|
|
3,138
|
|
||
Financing costs
|
(592
|
)
|
|
(10,928
|
)
|
||
Purchase of ESOP shares
|
—
|
|
|
(10,000
|
)
|
||
Tax benefit from exercise/vesting of equity awards, net
|
345
|
|
|
273
|
|
||
Other, net
|
206
|
|
|
194
|
|
||
Net cash used in financing activities
|
(22,748
|
)
|
|
(13,319
|
)
|
||
|
|
|
|
||||
CASH FLOWS FROM DISCONTINUED OPERATIONS:
|
|
|
|
|
|
||
Net cash used in operating activities
|
(830
|
)
|
|
(1,018
|
)
|
||
Net cash used in discontinued operations
|
(830
|
)
|
|
(1,018
|
)
|
||
|
|
|
|
||||
Effect of exchange rate changes on cash and equivalents
|
(4,034
|
)
|
|
(1,136
|
)
|
||
|
|
|
|
||||
NET DECREASE IN CASH AND EQUIVALENTS
|
(46,450
|
)
|
|
(90,693
|
)
|
||
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD
|
92,405
|
|
|
178,130
|
|
||
CASH AND EQUIVALENTS AT END OF PERIOD
|
$
|
45,955
|
|
|
$
|
87,437
|
|
•
|
Home & Building Products (“HBP”) consists of
two
companies, The AMES Companies, Inc. (“AMES”) and Clopay Building Products Company, Inc. (“CBP”):
|
-
|
AMES is a global provider of non-powered landscaping products for homeowners and professionals.
|
-
|
CBP is a leading manufacturer and marketer of residential, commercial and industrial garage doors to professional dealers and major home center retail chains.
|
•
|
Telephonics Corporation (“Telephonics”) designs, develops and manufactures high-technology integrated information, communication and sensor system solutions for military and commercial markets worldwide.
|
•
|
Clopay Plastic Products Company, Inc. (“Plastics”) is an international leader in the development and production of embossed, laminated and printed specialty plastic films used in a variety of hygienic, health-care and industrial applications.
|
•
|
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.
|
|
Cyclone
|
Northcote
|
Total
|
||||||
Current Assets, net of cash acquired
|
$
|
21,116
|
|
$
|
7,398
|
|
$
|
28,514
|
|
PP&E
|
488
|
|
1,385
|
|
1,873
|
|
|||
Goodwill
|
14,770
|
|
11,254
|
|
26,024
|
|
|||
Amortizable intangible assets
|
11,608
|
|
6,098
|
|
17,706
|
|
|||
Indefinite life intangible assets
|
3,548
|
|
3,121
|
|
6,669
|
|
|||
Total assets acquired
|
51,530
|
|
29,256
|
|
80,786
|
|
|||
Total liabilities assumed
|
(12,005
|
)
|
(7,475
|
)
|
(19,480
|
)
|
|||
Net assets acquired
|
$
|
39,525
|
|
$
|
21,781
|
|
$
|
61,306
|
|
|
Cyclone
|
Northcote
|
Total
|
Amortization
Period (Years)
|
|||||
Goodwill
|
$
|
14,770
|
|
$
|
11,254
|
|
26,024
|
|
N/A
|
Tradenames
|
3,548
|
|
3,121
|
|
6,669
|
|
Indefinite
|
||
Customer relationships
|
11,608
|
|
6,098
|
|
17,706
|
|
25
|
||
|
$
|
29,926
|
|
$
|
20,473
|
|
50,399
|
|
|
|
At June 30, 2015
|
|
At September 30, 2014
|
||||
Raw materials and supplies
|
$
|
78,225
|
|
|
$
|
75,560
|
|
Work in process
|
79,029
|
|
|
67,866
|
|
||
Finished goods
|
160,939
|
|
|
146,709
|
|
||
Total
|
$
|
318,193
|
|
|
$
|
290,135
|
|
|
At June 30, 2015
|
|
At September 30, 2014
|
||||
Land, building and building improvements
|
$
|
123,874
|
|
|
$
|
127,714
|
|
Machinery and equipment
|
736,021
|
|
|
720,417
|
|
||
Leasehold improvements
|
46,487
|
|
|
42,852
|
|
||
|
906,382
|
|
|
890,983
|
|
||
Accumulated depreciation and amortization
|
(540,018
|
)
|
|
(520,418
|
)
|
||
Total
|
$
|
366,364
|
|
|
$
|
370,565
|
|
|
At September 30, 2014
|
|
Other
adjustments including currency translations |
|
At June 30, 2015
|
||||||
Home & Building Products
|
$
|
291,844
|
|
|
$
|
(3,303
|
)
|
|
$
|
288,541
|
|
Telephonics
|
18,545
|
|
|
—
|
|
|
18,545
|
|
|||
Plastics
|
64,905
|
|
|
(9,246
|
)
|
|
55,659
|
|
|||
Total
|
$
|
375,294
|
|
|
$
|
(12,549
|
)
|
|
$
|
362,745
|
|
|
At June 30, 2015
|
|
|
|
At September 30, 2014
|
||||||||||||
|
Gross Carrying Amount
|
|
Accumulated
Amortization
|
|
Average
Life
(Years)
|
|
Gross Carrying Amount
|
|
Accumulated
Amortization
|
||||||||
Customer relationships
|
$
|
171,959
|
|
|
$
|
38,676
|
|
|
25
|
|
$
|
180,282
|
|
|
$
|
35,280
|
|
Unpatented technology
|
6,144
|
|
|
3,435
|
|
|
13
|
|
6,500
|
|
|
3,313
|
|
||||
Total amortizable intangible assets
|
178,103
|
|
|
42,111
|
|
|
|
|
186,782
|
|
|
38,593
|
|
||||
Trademarks
|
83,661
|
|
|
—
|
|
|
|
|
85,434
|
|
|
—
|
|
||||
Total intangible assets
|
$
|
261,764
|
|
|
$
|
42,111
|
|
|
|
|
$
|
272,216
|
|
|
$
|
38,593
|
|
|
|
At June 30, 2015
|
|
At September 30, 2014
|
||||||||||||||||||||||||||||||||||
|
|
Outstanding Balance
|
|
Original Issuer Discount
|
|
Capitalized Fees & Expenses
|
|
Balance Sheet
|
|
Coupon Interest Rate (1)
|
|
Outstanding Balance
|
|
Original Issuer Discount
|
|
Capitalized Fees & Expenses
|
|
Balance Sheet
|
|
Coupon Interest Rate (1)
|
||||||||||||||||||
Senior notes due 2022
|
(a)
|
$
|
600,000
|
|
|
$
|
—
|
|
|
$
|
(8,587
|
)
|
|
$
|
591,413
|
|
|
5.25
|
%
|
|
$
|
600,000
|
|
|
$
|
—
|
|
|
$
|
(9,553
|
)
|
|
$
|
590,447
|
|
|
5.25
|
%
|
Revolver due 2020
|
(b)
|
65,000
|
|
|
—
|
|
|
(2,162
|
)
|
|
62,838
|
|
|
n/a
|
|
|
25,000
|
|
|
—
|
|
|
(2,009
|
)
|
|
22,991
|
|
|
n/a
|
|
||||||||
Convert. debt due 2017
|
(c)
|
100,000
|
|
|
(6,628
|
)
|
|
(702
|
)
|
|
92,670
|
|
|
4.00
|
%
|
|
100,000
|
|
|
(9,584
|
)
|
|
(1,034
|
)
|
|
89,382
|
|
|
4.00
|
%
|
||||||||
Real estate mortgages
|
(d)
|
15,744
|
|
|
—
|
|
|
(468
|
)
|
|
15,276
|
|
|
n/a
|
|
|
16,388
|
|
|
—
|
|
|
(576
|
)
|
|
15,812
|
|
|
n/a
|
|
||||||||
ESOP Loans
|
(e)
|
37,295
|
|
|
—
|
|
|
(239
|
)
|
|
37,056
|
|
|
n/a
|
|
|
38,946
|
|
|
—
|
|
|
(262
|
)
|
|
38,684
|
|
|
n/a
|
|
||||||||
Capital lease - real estate
|
(f)
|
7,785
|
|
|
—
|
|
|
(162
|
)
|
|
7,623
|
|
|
5.00
|
%
|
|
8,551
|
|
|
—
|
|
|
(181
|
)
|
|
8,370
|
|
|
5.00
|
%
|
||||||||
Non U.S. lines of credit
|
(g)
|
7,116
|
|
|
—
|
|
|
(8
|
)
|
|
7,108
|
|
|
n/a
|
|
|
3,306
|
|
|
—
|
|
|
—
|
|
|
3,306
|
|
|
n/a
|
|
||||||||
Non U.S. term loans
|
(h)
|
24,879
|
|
|
—
|
|
|
(96
|
)
|
|
24,783
|
|
|
n/a
|
|
|
28,470
|
|
|
—
|
|
|
(161
|
)
|
|
28,309
|
|
|
n/a
|
|
||||||||
Other long term debt
|
(i)
|
1,703
|
|
|
—
|
|
|
—
|
|
|
1,703
|
|
|
n/a
|
|
|
1,910
|
|
|
—
|
|
|
(24
|
)
|
|
1,886
|
|
|
n/a
|
|
||||||||
Totals
|
|
859,522
|
|
|
(6,628
|
)
|
|
(12,424
|
)
|
|
840,470
|
|
|
|
|
|
822,571
|
|
|
(9,584
|
)
|
|
(13,800
|
)
|
|
799,187
|
|
|
|
|
||||||||
less: Current portion
|
|
(11,771
|
)
|
|
—
|
|
|
—
|
|
|
(11,771
|
)
|
|
|
|
|
(7,886
|
)
|
|
—
|
|
|
—
|
|
|
(7,886
|
)
|
|
|
|
||||||||
Long-term debt
|
|
$
|
847,751
|
|
|
$
|
(6,628
|
)
|
|
$
|
(12,424
|
)
|
|
$
|
828,699
|
|
|
|
|
|
$
|
814,685
|
|
|
$
|
(9,584
|
)
|
|
$
|
(13,800
|
)
|
|
$
|
791,301
|
|
|
|
|
|
|
Three Months Ended June 30, 2015
|
|
Three Months Ended June 30, 2014
|
||||||||||||||||||||||||||||||||||
|
|
Effective Interest Rate (1)
|
|
Cash Interest
|
|
Amort. Debt
Discount |
|
Amort. Debt Issuance Costs
& Other Fees |
|
Total Interest Expense
|
|
Effective Interest Rate (1)
|
|
Cash Interest
|
|
Amort. Debt
Discount |
|
Amort.
Debt Issuance Costs & Other Fees |
|
Total Interest Expense
|
||||||||||||||||||
Senior notes due 2022
|
(a)
|
5.5
|
%
|
|
7,875
|
|
|
—
|
|
|
323
|
|
|
8,198
|
|
|
5.5%
|
|
|
7,875
|
|
|
—
|
|
|
310
|
|
|
8,185
|
|
||||||||
Revolver due 2020
|
(b)
|
n/a
|
|
|
761
|
|
|
—
|
|
|
116
|
|
|
877
|
|
|
n/a
|
|
|
309
|
|
|
—
|
|
|
144
|
|
|
453
|
|
||||||||
Convert. debt due 2017
|
(c)
|
9.2
|
%
|
|
1,000
|
|
|
1,004
|
|
|
111
|
|
|
2,115
|
|
|
9.1
|
%
|
|
1,000
|
|
|
921
|
|
|
112
|
|
|
2,033
|
|
||||||||
Real estate mortgages
|
(d)
|
3.8
|
%
|
|
117
|
|
|
—
|
|
|
36
|
|
|
153
|
|
|
3.8
|
%
|
|
124
|
|
|
—
|
|
|
35
|
|
|
159
|
|
||||||||
ESOP Loans
|
(e)
|
2.9
|
%
|
|
255
|
|
|
—
|
|
|
17
|
|
|
272
|
|
|
2.9
|
%
|
|
192
|
|
|
—
|
|
|
25
|
|
|
217
|
|
||||||||
Capital lease - real estate
|
(f)
|
5.3
|
%
|
|
100
|
|
|
—
|
|
|
6
|
|
|
106
|
|
|
5.3
|
%
|
|
112
|
|
|
—
|
|
|
5
|
|
|
117
|
|
||||||||
Non U.S. lines of credit
|
(g)
|
n/a
|
|
|
195
|
|
|
—
|
|
|
—
|
|
|
195
|
|
|
n/a
|
|
|
307
|
|
|
—
|
|
|
27
|
|
|
334
|
|
||||||||
Non U.S. term loans
|
(h)
|
n/a
|
|
|
324
|
|
|
—
|
|
|
14
|
|
|
338
|
|
|
n/a
|
|
|
273
|
|
|
—
|
|
|
13
|
|
|
286
|
|
||||||||
Other long term debt
|
(i)
|
n/a
|
|
|
12
|
|
|
—
|
|
|
1
|
|
|
13
|
|
|
n/a
|
|
|
6
|
|
|
—
|
|
|
9
|
|
|
15
|
|
||||||||
Capitalized interest
|
|
|
|
|
(98
|
)
|
|
—
|
|
|
—
|
|
|
(98
|
)
|
|
|
|
|
(138
|
)
|
|
—
|
|
|
—
|
|
|
(138
|
)
|
||||||||
Totals
|
|
|
|
|
$
|
10,541
|
|
|
$
|
1,004
|
|
|
$
|
624
|
|
|
$
|
12,169
|
|
|
|
|
|
$
|
10,060
|
|
|
$
|
921
|
|
|
$
|
680
|
|
|
$
|
11,661
|
|
|
|
Nine Months Ended June 30, 2015
|
|
Nine Months Ended June 30, 2014
|
||||||||||||||||||||||||||||||||||
|
|
Effective Interest Rate (1)
|
|
Cash Interest
|
|
Amort. Debt Discount
|
|
Amort. Debt Issuance Costs & Other Fees
|
|
Total Interest Expense
|
|
Effective Interest Rate (1)
|
|
Cash Interest
|
|
Amort. Debt Discount
|
|
Amort. Debt Issuance Costs & Other Fees
|
|
Total Interest Expense
|
||||||||||||||||||
Senior notes due 2018
|
(a)
|
n/a
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
7.4
|
%
|
|
$
|
15,930
|
|
|
$
|
—
|
|
|
$
|
667
|
|
|
$
|
16,597
|
|
Senior notes due 2022
|
(a)
|
5.5
|
%
|
|
23,625
|
|
|
—
|
|
|
967
|
|
|
24,592
|
|
|
5.5
|
%
|
|
10,675
|
|
|
—
|
|
|
421
|
|
|
11,096
|
|
||||||||
Revolver due 2020
|
(b)
|
n/a
|
|
|
1,758
|
|
|
—
|
|
|
407
|
|
|
2,165
|
|
|
n/a
|
|
|
782
|
|
|
—
|
|
|
422
|
|
|
1,204
|
|
||||||||
Convert. debt due 2017
|
(c)
|
9.1
|
%
|
|
3,000
|
|
|
2,956
|
|
|
332
|
|
|
6,288
|
|
|
9.1
|
%
|
|
3,000
|
|
|
2,713
|
|
|
333
|
|
|
6,046
|
|
||||||||
Real estate mortgages
|
(d)
|
3.9
|
%
|
|
357
|
|
|
—
|
|
|
108
|
|
|
465
|
|
|
4.0
|
%
|
|
376
|
|
|
—
|
|
|
108
|
|
|
484
|
|
||||||||
ESOP Loans
|
(e)
|
2.9
|
%
|
|
769
|
|
|
—
|
|
|
52
|
|
|
821
|
|
|
3.2
|
%
|
|
524
|
|
|
—
|
|
|
32
|
|
|
556
|
|
||||||||
Capital lease - real estate
|
(f)
|
5.3
|
%
|
|
308
|
|
|
—
|
|
|
19
|
|
|
327
|
|
|
5.4
|
%
|
|
345
|
|
|
—
|
|
|
19
|
|
|
364
|
|
||||||||
Non U.S. lines of credit
|
(g)
|
n/a
|
|
|
445
|
|
|
—
|
|
|
—
|
|
|
445
|
|
|
n/a
|
|
|
724
|
|
|
—
|
|
|
27
|
|
|
751
|
|
||||||||
Non U.S. term loans
|
(h)
|
n/a
|
|
|
1,049
|
|
|
—
|
|
|
44
|
|
|
1,093
|
|
|
n/a
|
|
|
426
|
|
|
—
|
|
|
17
|
|
|
443
|
|
||||||||
Other long term debt
|
(i)
|
n/a
|
|
|
65
|
|
|
—
|
|
|
9
|
|
|
74
|
|
|
n/a
|
|
|
17
|
|
|
—
|
|
|
30
|
|
|
47
|
|
||||||||
Capitalized interest
|
|
|
|
|
(335
|
)
|
|
—
|
|
|
—
|
|
|
(335
|
)
|
|
|
|
|
(404
|
)
|
|
—
|
|
|
—
|
|
|
(404
|
)
|
||||||||
Totals
|
|
|
|
|
$
|
31,041
|
|
|
$
|
2,956
|
|
|
$
|
1,938
|
|
|
$
|
35,935
|
|
|
|
|
|
$
|
32,395
|
|
|
$
|
2,713
|
|
|
$
|
2,076
|
|
|
$
|
37,184
|
|
(a)
|
On February 27, 2014, in an unregistered offering through a private placement under Rule 144A, Griffon issued, at par,
$600,000
of
5.25%
Senior Notes due 2022 (“Senior Notes”); interest is payable semi-annually on March 1 and September 1. Proceeds from the Senior Notes were used to redeem
$550,000
of
7.125%
senior notes due 2018, to pay a call and tender offer premium of
$31,530
and to make interest payments of
$16,716
, with the balance used to pay a portion of the related transaction fees and expenses. In connection with the issuance of the Senior Notes, all obligations under the
$550,000
of
7.125%
senior notes due 2018 were discharged.
|
(b)
|
On March 13, 2015, Griffon amended its Revolving Credit Facility (the “Credit Agreement”) to increase the credit facility from
$225,000
to
$250,000
, extend its maturity date from March 28, 2019 to March 13, 2020 and modify certain other provisions of the facility. The facility includes a letter of credit sub-facility with a limit of
$50,000
(decreased from
$60,000
), and a multi-currency sub-facility of
$50,000
. The Credit Agreement provides for same day borrowings of base rate loans in lieu of a swing line sub-facility. Borrowings under the Credit Agreement may be repaid and re-borrowed at any time, subject to final maturity of the facility, or the occurrence or event of default under the Credit Agreement. Interest is payable on borrowings at either a LIBOR or base rate benchmark rate, in each case without a floor, plus an applicable margin, which adjusts based on financial performance. Current margins are
1.25%
for base rate loans and
2.25%
for LIBOR loans. The Credit Agreement has certain financial maintenance tests including a maximum total leverage ratio, a maximum senior secured leverage ratio and a minimum interest coverage ratio, as well as customary affirmative and negative covenants, and events of default. The negative covenants place limits on Griffon's ability to, among other things, incur indebtedness, incur liens, and make restricted payments and investments. Borrowings under the Credit Agreement are guaranteed by Griffon’s material domestic subsidiaries and are secured, on a first priority basis, by substantially all domestic assets of the Company and the guarantors, and a pledge of not greater than
65%
of the equity interest in each of Griffon’s material, first-tier foreign subsidiaries (except that a lien on the assets of Griffon's material domestic subsidiaries securing a limited amount of the debt under the credit agreement relating to Griffon's Employee Stock Ownership Plan ("ESOP") ranks pari passu with the lien granted on such assets under the Credit Agreement; see footnote (e) below). At
June 30, 2015
, outstanding borrowings and standby letters of credit were
$65,000
and
$17,200
, respectively, under the Credit Agreement;
$167,800
was available for borrowing at that date.
|
(c)
|
On December 21, 2009, Griffon issued
$100,000
principal of
4%
convertible subordinated notes due 2017 (the “2017 Notes”). The current conversion rate of the 2017 Notes is
69.3811
shares of Griffon’s common stock per
$1
principal amount of notes, corresponding to a conversion price of
$14.41
per share. When a cash dividend is declared that would result in an adjustment to the conversion ratio of less than
1%
, any adjustment to the conversion ratio is deferred until the first to occur of (i) actual conversion; (ii) the 42nd trading day prior to maturity of the notes; and (iii) such time as the cumulative adjustment equals or exceeds
1%
. As of
June 30, 2015
, aggregate dividends since the last conversion price adjustment of
$0.04
per share would have resulted in an adjustment to the conversion ratio of approximately
0.25%
. At both
June 30, 2015
and 2014, the 2017 Notes had a capital in excess of par component, net of tax, of
$15,720
. The fair value of the 2017 Notes approximated
$122,250
on June 30, 2015 based upon quoted market prices (level 1 inputs).
|
(d)
|
On October 21, 2013, Griffon refinanced
two
real estate mortgages to secure loans totaling
$17,175
. The loans mature in October 2018, are collateralized by the related properties and are guaranteed by Griffon.
The loans bear interest at a rate of LIBOR plus 2.75%
.
|
(e)
|
In December 2013, Griffon’s ESOP entered into an agreement that refinanced the
two
existing ESOP loans into
one
new Term Loan in the amount of
$21,098
(the "Agreement"). The Agreement also provided for a Line Note with
$10,000
available to purchase shares of Griffon common stock in the open market. In July 2014, Griffon's ESOP entered into an amendment to the existing Agreement which provided an additional
$10,000
Line Note available to purchase shares in the open market. During 2014, the Line Notes were combined with the Term Loan to form one new Term Loan. The Term Loan bears interest at LIBOR plus
2.38%
or the lender’s prime rate, at Griffon’s option. The Term Loan requires quarterly principal payments of
$551
, with a balloon payment of approximately
$30,137
due at maturity on December 31, 2018. During 2014,
1,591,117
|
(f)
|
In October 2006, CBP entered into a capital lease totaling
$14,290
for real estate in Troy, Ohio. The lease matures in
2022
, bears interest at a fixed rate of
5.0%
, is secured by a mortgage on the real estate and is guaranteed by Griffon.
|
(g)
|
In November 2010, Clopay Europe GmbH (“Clopay Europe”) entered into a
€10,000
revolving credit facility and a
€20,000
term loan. The term loan was paid off in December 2013 and the revolver had no borrowings outstanding at
June 30, 2015
. The revolving facility matures in November 2015 and is renewable upon mutual agreement with the bank.
The revolving credit facility accrues interest at EURIBOR plus 2.20% per annum (2.20% at June 30, 2015).
Clopay Europe is required to maintain a certain minimum equity to assets ratio and keep leverage below a certain level, defined as the ratio of total debt to EBITDA.
|
(h)
|
In December 2013 and May 2014, Northcote Holdings Pty Ltd entered into
two
unsecured term loans in the outstanding amounts of AUD
$12,500
and AUD
$20,000
, respectively. The AUD
$12,500
term loan requires quarterly interest payments with principal due upon maturity in December 2016. The AUD
$20,000
term loan requires quarterly principal payments of AUD
$625
beginning in August 2015, with a balloon payment due upon maturity in May 2017. The loans accrue interest at Bank Bill Swap Bid Rate “BBSY” plus
2.8%
per annum (
4.96%
at
June 30, 2015
for each loan). As of
June 30, 2015
, Northcote had an outstanding combined balance of
$24,783
on the term loans, net of deferred costs.
|
(i)
|
Other long-term debt primarily consists of capital leases.
|
|
Three Months Ended June 30,
|
|
Nine Months Ended June 30,
|
||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||
Weighted average shares outstanding - basic
|
44,025
|
|
|
48,370
|
|
|
45,228
|
|
|
50,038
|
|
Incremental shares from stock based compensation
|
2,056
|
|
|
1,466
|
|
|
1,929
|
|
|
—
|
|
Convertible debt due 2017
|
899
|
|
|
—
|
|
|
128
|
|
|
—
|
|
|
|
|
|
|
|
|
|
||||
Weighted average shares outstanding - diluted
|
46,980
|
|
|
49,836
|
|
|
47,285
|
|
|
50,038
|
|
|
|
|
|
|
|
|
|
||||
Anti-dilutive options excluded from diluted EPS computation
|
480
|
|
|
643
|
|
|
514
|
|
|
643
|
|
Anti-dilutive restricted stock excluded from diluted EPS computation
|
—
|
|
|
—
|
|
|
—
|
|
|
1,609
|
|
•
|
HBP is a leading manufacturer and marketer of residential, commercial and industrial garage doors to professional dealers and major home center retail chains, as well as a global provider of non-powered landscaping products for homeowners and professionals.
|
•
|
Telephonics develops, designs and manufactures high-technology integrated information, communication and sensor system solutions for military and commercial markets worldwide.
|
•
|
Plastics is an international leader in the development and production of embossed, laminated and printed specialty plastic films used in a variety of hygienic, health-care and industrial applications.
|
|
For the Three Months Ended June 30,
|
|
For the Nine Months Ended June 30,
|
||||||||||||
REVENUE
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Home & Building Products:
|
|
|
|
|
|
|
|
|
|
|
|
||||
AMES
|
$
|
140,614
|
|
|
$
|
132,179
|
|
|
$
|
432,816
|
|
|
$
|
389,492
|
|
CBP
|
131,577
|
|
|
121,814
|
|
|
374,690
|
|
|
334,494
|
|
||||
Home & Building Products
|
272,191
|
|
|
253,993
|
|
|
807,506
|
|
|
723,986
|
|
||||
Telephonics
|
115,340
|
|
|
102,446
|
|
|
304,685
|
|
|
302,656
|
|
||||
Plastics
|
124,163
|
|
|
148,600
|
|
|
401,683
|
|
|
439,542
|
|
||||
Total consolidated net sales
|
$
|
511,694
|
|
|
$
|
505,039
|
|
|
$
|
1,513,874
|
|
|
$
|
1,466,184
|
|
|
For the Three Months Ended June 30,
|
|
For the Nine Months Ended June 30,
|
||||||||||||
INCOME (LOSS) BEFORE TAXES
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Segment operating profit:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Home & Building Products
|
$
|
16,268
|
|
|
$
|
9,747
|
|
|
$
|
41,288
|
|
|
$
|
27,958
|
|
Telephonics
|
13,284
|
|
|
13,134
|
|
|
29,915
|
|
|
34,463
|
|
||||
Plastics
|
8,299
|
|
|
8,075
|
|
|
26,186
|
|
|
23,252
|
|
||||
Total segment operating profit
|
37,851
|
|
|
30,956
|
|
|
97,389
|
|
|
85,673
|
|
||||
Net interest expense
|
(12,150
|
)
|
|
(11,541
|
)
|
|
(35,644
|
)
|
|
(37,003
|
)
|
||||
Unallocated amounts
|
(9,008
|
)
|
|
(6,521
|
)
|
|
(24,852
|
)
|
|
(22,895
|
)
|
||||
Loss from debt extinguishment, net
|
—
|
|
|
—
|
|
|
—
|
|
|
(38,890
|
)
|
||||
Income before taxes
|
$
|
16,693
|
|
|
$
|
12,894
|
|
|
$
|
36,893
|
|
|
$
|
(13,115
|
)
|
|
For the Three Months Ended June 30,
|
|
For the Nine Months Ended June 30,
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Segment adjusted EBITDA:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Home & Building Products
|
$
|
25,386
|
|
|
$
|
19,596
|
|
|
$
|
67,186
|
|
|
$
|
55,787
|
|
Telephonics
|
15,712
|
|
|
15,087
|
|
|
37,360
|
|
|
40,018
|
|
||||
Plastics
|
14,084
|
|
|
14,922
|
|
|
44,399
|
|
|
43,881
|
|
||||
Total Segment adjusted EBITDA
|
55,182
|
|
|
49,605
|
|
|
148,945
|
|
|
139,686
|
|
||||
Net interest expense
|
(12,150
|
)
|
|
(11,541
|
)
|
|
(35,644
|
)
|
|
(37,003
|
)
|
||||
Segment depreciation and amortization
|
(17,331
|
)
|
|
(16,691
|
)
|
|
(51,556
|
)
|
|
(49,723
|
)
|
||||
Unallocated amounts
|
(9,008
|
)
|
|
(6,521
|
)
|
|
(24,852
|
)
|
|
(22,895
|
)
|
||||
Loss from debt extinguishment, net
|
—
|
|
|
—
|
|
|
—
|
|
|
(38,890
|
)
|
||||
Restructuring charges
|
—
|
|
|
(358
|
)
|
|
—
|
|
|
(1,892
|
)
|
||||
Acquisition costs
|
—
|
|
|
(1,600
|
)
|
|
—
|
|
|
(2,398
|
)
|
||||
Income (loss) before taxes
|
$
|
16,693
|
|
|
$
|
12,894
|
|
|
$
|
36,893
|
|
|
$
|
(13,115
|
)
|
|
For the Three Months Ended June 30,
|
|
For the Nine Months Ended June 30,
|
||||||||||||
DEPRECIATION and AMORTIZATION
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Segment:
|
|
|
|
|
|
|
|
||||||||
Home & Building Products
|
$
|
9,118
|
|
|
$
|
7,891
|
|
|
$
|
25,898
|
|
|
$
|
23,539
|
|
Telephonics
|
2,428
|
|
|
1,953
|
|
|
7,445
|
|
|
5,555
|
|
||||
Plastics
|
5,785
|
|
|
6,847
|
|
|
18,213
|
|
|
20,629
|
|
||||
Total segment depreciation and amortization
|
17,331
|
|
|
16,691
|
|
|
51,556
|
|
|
49,723
|
|
||||
Corporate
|
117
|
|
|
104
|
|
|
345
|
|
|
304
|
|
||||
Total consolidated depreciation and amortization
|
$
|
17,448
|
|
|
$
|
16,795
|
|
|
$
|
51,901
|
|
|
$
|
50,027
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
CAPITAL EXPENDITURES
|
|
|
|
|
|
|
|
|
|
|
|
||||
Segment:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Home & Building Products
|
$
|
8,644
|
|
|
$
|
8,194
|
|
|
$
|
30,019
|
|
|
$
|
23,384
|
|
Telephonics
|
1,644
|
|
|
6,082
|
|
|
3,952
|
|
|
14,969
|
|
||||
Plastics
|
4,820
|
|
|
5,063
|
|
|
19,985
|
|
|
15,213
|
|
||||
Total segment
|
15,108
|
|
|
19,339
|
|
|
53,956
|
|
|
53,566
|
|
||||
Corporate
|
544
|
|
|
675
|
|
|
1,409
|
|
|
1,293
|
|
||||
Total consolidated capital expenditures
|
$
|
15,652
|
|
|
$
|
20,014
|
|
|
$
|
55,365
|
|
|
$
|
54,859
|
|
ASSETS
|
At June 30, 2015
|
|
At September 30, 2014
|
||||
Segment assets:
|
|
|
|
||||
Home & Building Products
|
$
|
1,062,188
|
|
|
$
|
1,033,453
|
|
Telephonics
|
296,937
|
|
|
319,327
|
|
||
Plastics
|
348,743
|
|
|
389,464
|
|
||
Total segment assets
|
1,707,868
|
|
|
1,742,244
|
|
||
Corporate
|
10,128
|
|
|
64,015
|
|
||
Total continuing assets
|
1,717,996
|
|
|
1,806,259
|
|
||
Assets of discontinued operations
|
3,756
|
|
|
3,750
|
|
||
Consolidated total
|
$
|
1,721,752
|
|
|
$
|
1,810,009
|
|
|
Three Months Ended June 30,
|
|
Nine Months Ended June 30,
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Service cost
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
90
|
|
Interest cost
|
2,207
|
|
|
2,416
|
|
|
6,621
|
|
|
7,415
|
|
||||
Expected return on plan assets
|
(2,932
|
)
|
|
(2,820
|
)
|
|
(8,796
|
)
|
|
(8,590
|
)
|
||||
Amortization:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Prior service cost
|
4
|
|
|
4
|
|
|
12
|
|
|
11
|
|
||||
Recognized actuarial loss
|
541
|
|
|
485
|
|
|
1,623
|
|
|
1,463
|
|
||||
Net periodic expense (income)
|
$
|
(180
|
)
|
|
$
|
85
|
|
|
$
|
(540
|
)
|
|
$
|
389
|
|
|
At June 30, 2015
|
|
At September 30, 2014
|
||||
Assets of discontinued operations:
|
|
|
|
|
|
||
Prepaid and other current assets
|
$
|
1,625
|
|
|
$
|
1,624
|
|
Other long-term assets
|
2,131
|
|
|
2,126
|
|
||
Total assets of discontinued operations
|
$
|
3,756
|
|
|
$
|
3,750
|
|
|
|
|
|
||||
Liabilities of discontinued operations:
|
|
|
|
|
|
||
Accrued liabilities, current
|
$
|
2,392
|
|
|
$
|
3,282
|
|
Other long-term liabilities
|
3,244
|
|
|
3,830
|
|
||
Total liabilities of discontinued operations
|
$
|
5,636
|
|
|
$
|
7,112
|
|
|
Workforce
Reduction |
|
Facilities &
Exit Costs |
|
Other
Related Costs |
|
Total
|
||||||||
Amounts incurred in:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Quarter ended December 31, 2013
|
$
|
638
|
|
|
$
|
95
|
|
|
$
|
109
|
|
|
$
|
842
|
|
Quarter ended March 31, 2014
|
495
|
|
|
137
|
|
|
60
|
|
|
692
|
|
||||
Quarter ended June 30, 2014
|
$
|
289
|
|
|
$
|
47
|
|
|
$
|
22
|
|
|
$
|
358
|
|
Nine Months Ended June 30, 2014
|
$
|
1,422
|
|
|
$
|
279
|
|
|
$
|
191
|
|
|
$
|
1,892
|
|
|
|
|
|
|
|
|
|
|
Workforce
Reduction |
|
||
Accrued liability at September 30, 2014
|
$
|
5,228
|
|
|
Payments
|
(4,396
|
)
|
|
|
Accrued liability at June 30, 2015
|
$
|
832
|
|
|
|
Three Months Ended June 30,
|
|
Nine Months Ended June 30,
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Balance, beginning of period
|
$
|
5,674
|
|
|
$
|
7,111
|
|
|
$
|
4,934
|
|
|
$
|
6,649
|
|
Warranties issued and changes in estimated pre-existing warranties
|
1,057
|
|
|
576
|
|
|
3,848
|
|
|
2,677
|
|
||||
Actual warranty costs incurred
|
(1,803
|
)
|
|
(1,199
|
)
|
|
(3,854
|
)
|
|
(2,838
|
)
|
||||
Balance, end of period
|
$
|
4,928
|
|
|
$
|
6,488
|
|
|
$
|
4,928
|
|
|
$
|
6,488
|
|
|
Three Months Ended June 30, 2015
|
|
Three Months Ended June 30, 2014
|
||||||||||||||||||||
|
Pre-tax
|
|
Tax
|
|
Net of tax
|
|
Pre-tax
|
|
Tax
|
|
Net of tax
|
||||||||||||
Foreign currency translation adjustments
|
$
|
4,801
|
|
|
$
|
—
|
|
|
$
|
4,801
|
|
|
$
|
2,809
|
|
|
$
|
—
|
|
|
$
|
2,809
|
|
Pension and other defined benefit plans
|
545
|
|
|
(192
|
)
|
|
353
|
|
|
491
|
|
|
(174
|
)
|
|
317
|
|
||||||
Gain on cash flow hedge
|
278
|
|
|
(69
|
)
|
|
209
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total other comprehensive income (loss)
|
$
|
5,624
|
|
|
$
|
(261
|
)
|
|
$
|
5,363
|
|
|
$
|
3,300
|
|
|
$
|
(174
|
)
|
|
$
|
3,126
|
|
|
Nine Months Ended June 30, 2015
|
|
Nine Months Ended June 30, 2014
|
||||||||||||||||||||
|
Pre-tax
|
|
Tax
|
|
Net of tax
|
|
Pre-tax
|
|
Tax
|
|
Net of tax
|
||||||||||||
Foreign currency translation adjustments
|
$
|
(41,083
|
)
|
|
$
|
—
|
|
|
$
|
(41,083
|
)
|
|
$
|
896
|
|
|
$
|
—
|
|
|
$
|
896
|
|
Pension and other defined benefit plans
|
1,635
|
|
|
(576
|
)
|
|
1,059
|
|
|
2,682
|
|
|
(950
|
)
|
|
1,732
|
|
||||||
Gain on cash flow hedge
|
74
|
|
|
(19
|
)
|
|
55
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Available-for-sale securities
|
(1,370
|
)
|
|
500
|
|
|
(870
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total other comprehensive income (loss)
|
$
|
(40,744
|
)
|
|
$
|
(95
|
)
|
|
$
|
(40,839
|
)
|
|
$
|
3,578
|
|
|
$
|
(950
|
)
|
|
$
|
2,628
|
|
|
June 30, 2015
|
|
September 30, 2014
|
||||
Foreign currency translation adjustments
|
$
|
(44,903
|
)
|
|
$
|
(3,820
|
)
|
Pension and other defined benefit plans
|
(26,307
|
)
|
|
(27,366
|
)
|
||
Gain on cash flow hedge
|
307
|
|
|
252
|
|
||
Available-for-sale securities
|
—
|
|
|
870
|
|
||
|
$
|
(70,903
|
)
|
|
$
|
(30,064
|
)
|
|
For the Three Months Ended June 30,
|
|
For the Nine Months Ended June 30,
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Net income (loss)
|
$
|
10,893
|
|
|
$
|
14,464
|
|
|
$
|
23,486
|
|
|
$
|
(8,125
|
)
|
Other comprehensive income (loss), net of taxes
|
5,363
|
|
|
3,126
|
|
|
(40,839
|
)
|
|
2,628
|
|
||||
Comprehensive loss
|
$
|
16,256
|
|
|
$
|
17,590
|
|
|
$
|
(17,353
|
)
|
|
$
|
(5,497
|
)
|
|
For the Three Months Ended June 30,
|
|
For the Nine Months Ended June 30,
|
||||||||||||
Gain (Loss)
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Pension amortization
|
$
|
(545
|
)
|
|
$
|
(491
|
)
|
|
$
|
(1,635
|
)
|
|
$
|
(2,682
|
)
|
Cash flow hedges
|
100
|
|
|
—
|
|
|
520
|
|
|
—
|
|
||||
Available-for-sale securities
|
—
|
|
|
—
|
|
|
1,370
|
|
|
—
|
|
||||
Total gain (loss)
|
(445
|
)
|
|
(491
|
)
|
|
255
|
|
|
(2,682
|
)
|
||||
Tax benefit (expense)
|
162
|
|
|
174
|
|
|
(80
|
)
|
|
950
|
|
||||
Total
|
$
|
(283
|
)
|
|
$
|
(317
|
)
|
|
$
|
175
|
|
|
$
|
(1,732
|
)
|
|
Parent Company
|
|
Guarantor Companies
|
|
Non-Guarantor Companies
|
|
Elimination
|
|
Consolidation
|
||||||||||
CURRENT ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cash and equivalents
|
$
|
4,736
|
|
|
$
|
12,893
|
|
|
$
|
28,326
|
|
|
$
|
—
|
|
|
$
|
45,955
|
|
Accounts receivable, net of allowances
|
—
|
|
|
214,674
|
|
|
62,298
|
|
|
(36,783
|
)
|
|
240,189
|
|
|||||
Contract costs and recognized income not yet billed, net of progress payments
|
—
|
|
|
103,860
|
|
|
151
|
|
|
—
|
|
|
104,011
|
|
|||||
Inventories, net
|
—
|
|
|
255,192
|
|
|
63,001
|
|
|
—
|
|
|
318,193
|
|
|||||
Prepaid and other current assets
|
11,960
|
|
|
24,806
|
|
|
12,616
|
|
|
(2,635
|
)
|
|
46,747
|
|
|||||
Assets of discontinued operations
|
—
|
|
|
—
|
|
|
1,625
|
|
|
—
|
|
|
1,625
|
|
|||||
Total Current Assets
|
16,696
|
|
|
611,425
|
|
|
168,017
|
|
|
(39,418
|
)
|
|
756,720
|
|
|||||
PROPERTY, PLANT AND EQUIPMENT, net
|
1,142
|
|
|
274,343
|
|
|
90,879
|
|
|
—
|
|
|
366,364
|
|
|||||
GOODWILL
|
—
|
|
|
284,875
|
|
|
77,870
|
|
|
—
|
|
|
362,745
|
|
|||||
INTANGIBLE ASSETS, net
|
93
|
|
|
153,432
|
|
|
66,128
|
|
|
—
|
|
|
219,653
|
|
|||||
INTERCOMPANY RECEIVABLE
|
587,567
|
|
|
981,607
|
|
|
226,066
|
|
|
(1,795,240
|
)
|
|
—
|
|
|||||
EQUITY INVESTMENTS IN SUBSIDIARIES
|
757,858
|
|
|
644,539
|
|
|
1,757,687
|
|
|
(3,160,084
|
)
|
|
—
|
|
|||||
OTHER ASSETS
|
41,319
|
|
|
50,321
|
|
|
9,948
|
|
|
(87,449
|
)
|
|
14,139
|
|
|||||
ASSETS OF DISCONTINUED OPERATIONS
|
—
|
|
|
—
|
|
|
2,131
|
|
|
—
|
|
|
2,131
|
|
|||||
Total Assets
|
$
|
1,404,675
|
|
|
$
|
3,000,542
|
|
|
$
|
2,398,726
|
|
|
$
|
(5,082,191
|
)
|
|
$
|
1,721,752
|
|
CURRENT LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Notes payable and current portion of long-term debt
|
$
|
2,203
|
|
|
$
|
1,176
|
|
|
$
|
8,392
|
|
|
$
|
—
|
|
|
$
|
11,771
|
|
Accounts payable and accrued liabilities
|
33,668
|
|
|
196,298
|
|
|
68,430
|
|
|
(23,798
|
)
|
|
274,598
|
|
|||||
Liabilities of discontinued operations
|
—
|
|
|
|
|
|
2,392
|
|
|
—
|
|
|
2,392
|
|
|||||
Total Current Liabilities
|
35,871
|
|
|
197,474
|
|
|
79,214
|
|
|
(23,798
|
)
|
|
288,761
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
LONG-TERM DEBT, net
|
781,774
|
|
|
6,745
|
|
|
40,180
|
|
|
—
|
|
|
828,699
|
|
|||||
INTERCOMPANY PAYABLES
|
60,428
|
|
|
944,302
|
|
|
742,973
|
|
|
(1,747,703
|
)
|
|
—
|
|
|||||
OTHER LIABILITIES
|
59,213
|
|
|
155,397
|
|
|
26,185
|
|
|
(101,995
|
)
|
|
138,800
|
|
|||||
LIABILITIES OF DISCONTINUED OPERATIONS
|
—
|
|
|
—
|
|
|
3,244
|
|
|
—
|
|
|
3,244
|
|
|||||
Total Liabilities
|
937,286
|
|
|
1,303,918
|
|
|
891,796
|
|
|
(1,873,496
|
)
|
|
1,259,504
|
|
|||||
SHAREHOLDERS’ EQUITY
|
467,389
|
|
|
1,696,624
|
|
|
1,506,930
|
|
|
(3,208,695
|
)
|
|
462,248
|
|
|||||
Total Liabilities and Shareholders’ Equity
|
$
|
1,404,675
|
|
|
$
|
3,000,542
|
|
|
$
|
2,398,726
|
|
|
$
|
(5,082,191
|
)
|
|
$
|
1,721,752
|
|
|
Parent
Company
|
|
Guarantor
Companies
|
|
Non-Guarantor
Companies
|
|
Elimination
|
|
Consolidation
|
||||||||||
CURRENT ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cash and equivalents
|
$
|
6,813
|
|
|
$
|
31,522
|
|
|
$
|
54,070
|
|
|
$
|
—
|
|
|
$
|
92,405
|
|
Accounts receivable, net of allowances
|
—
|
|
|
213,922
|
|
|
77,218
|
|
|
(32,704
|
)
|
|
258,436
|
|
|||||
Contract costs and recognized income not yet billed, net of progress payments
|
—
|
|
|
109,804
|
|
|
126
|
|
|
—
|
|
|
109,930
|
|
|||||
Inventories, net
|
—
|
|
|
219,326
|
|
|
70,537
|
|
|
272
|
|
|
290,135
|
|
|||||
Prepaid and other current assets
|
4,366
|
|
|
26,319
|
|
|
17,101
|
|
|
14,783
|
|
|
62,569
|
|
|||||
Assets of discontinued operations
|
—
|
|
|
—
|
|
|
1,624
|
|
|
—
|
|
|
1,624
|
|
|||||
Total Current Assets
|
11,179
|
|
|
600,893
|
|
|
220,676
|
|
|
(17,649
|
)
|
|
815,099
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
PROPERTY, PLANT AND EQUIPMENT, net
|
1,327
|
|
|
270,519
|
|
|
98,643
|
|
|
76
|
|
|
370,565
|
|
|||||
GOODWILL
|
—
|
|
|
284,875
|
|
|
90,419
|
|
|
—
|
|
|
375,294
|
|
|||||
INTANGIBLE ASSETS, net
|
—
|
|
|
156,772
|
|
|
76,851
|
|
|
—
|
|
|
233,623
|
|
|||||
INTERCOMPANY RECEIVABLE
|
540,080
|
|
|
892,433
|
|
|
213,733
|
|
|
(1,646,246
|
)
|
|
—
|
|
|||||
EQUITY INVESTMENTS IN SUBSIDIARIES
|
780,600
|
|
|
662,403
|
|
|
1,782,406
|
|
|
(3,225,409
|
)
|
|
—
|
|
|||||
OTHER ASSETS
|
27,880
|
|
|
53,896
|
|
|
6,739
|
|
|
(75,213
|
)
|
|
13,302
|
|
|||||
ASSETS OF DISCONTINUED OPERATIONS
|
—
|
|
|
—
|
|
|
2,126
|
|
|
—
|
|
|
2,126
|
|
|||||
Total Assets
|
$
|
1,361,066
|
|
|
$
|
2,921,791
|
|
|
$
|
2,491,593
|
|
|
$
|
(4,964,441
|
)
|
|
$
|
1,810,009
|
|
CURRENT LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Notes payable and current portion of long-term debt
|
$
|
2,202
|
|
|
$
|
1,144
|
|
|
$
|
4,540
|
|
|
$
|
—
|
|
|
$
|
7,886
|
|
Accounts payable and accrued liabilities
|
25,703
|
|
|
227,419
|
|
|
91,132
|
|
|
(20,811
|
)
|
|
323,443
|
|
|||||
Liabilities of discontinued operations
|
—
|
|
|
—
|
|
|
3,282
|
|
|
—
|
|
|
3,282
|
|
|||||
Total Current Liabilities
|
27,905
|
|
|
228,563
|
|
|
98,954
|
|
|
(20,811
|
)
|
|
334,611
|
|
|||||
LONG-TERM DEBT, net
|
738,360
|
|
|
7,806
|
|
|
45,135
|
|
|
—
|
|
|
791,301
|
|
|||||
INTERCOMPANY PAYABLES
|
21,573
|
|
|
815,094
|
|
|
762,192
|
|
|
(1,598,859
|
)
|
|
—
|
|
|||||
OTHER LIABILITIES
|
41,201
|
|
|
151,674
|
|
|
26,949
|
|
|
(71,584
|
)
|
|
148,240
|
|
|||||
LIABILITIES OF DISCONTINUED OPERATIONS
|
—
|
|
|
—
|
|
|
3,830
|
|
|
—
|
|
|
3,830
|
|
|||||
Total Liabilities
|
829,039
|
|
|
1,203,137
|
|
|
937,060
|
|
|
(1,691,254
|
)
|
|
1,277,982
|
|
|||||
SHAREHOLDERS’ EQUITY
|
532,027
|
|
|
1,718,654
|
|
|
1,554,533
|
|
|
(3,273,187
|
)
|
|
532,027
|
|
|||||
Total Liabilities and Shareholders’ Equity
|
$
|
1,361,066
|
|
|
$
|
2,921,791
|
|
|
$
|
2,491,593
|
|
|
$
|
(4,964,441
|
)
|
|
$
|
1,810,009
|
|
($ in thousands)
|
Parent Company
|
|
Guarantor Companies
|
|
Non-Guarantor Companies
|
|
Elimination
|
|
Consolidation
|
||||||||||
Revenue
|
$
|
—
|
|
|
$
|
416,433
|
|
|
$
|
110,204
|
|
|
$
|
(14,943
|
)
|
|
$
|
511,694
|
|
Cost of goods and services
|
—
|
|
|
310,578
|
|
|
85,841
|
|
|
(8,214
|
)
|
|
388,205
|
|
|||||
Gross profit
|
—
|
|
|
105,855
|
|
|
24,363
|
|
|
(6,729
|
)
|
|
123,489
|
|
|||||
Selling, general and administrative expenses
|
5,978
|
|
|
73,190
|
|
|
24,286
|
|
|
(7,879
|
)
|
|
95,575
|
|
|||||
Total operating expenses
|
5,978
|
|
|
73,190
|
|
|
24,286
|
|
|
(7,879
|
)
|
|
95,575
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Income (loss) from operations
|
(5,978
|
)
|
|
32,665
|
|
|
77
|
|
|
1,150
|
|
|
27,914
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Other income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Interest income (expense), net
|
(2,402
|
)
|
|
(7,770
|
)
|
|
(1,978
|
)
|
|
—
|
|
|
(12,150
|
)
|
|||||
Other, net
|
(26
|
)
|
|
2,075
|
|
|
30
|
|
|
(1,150
|
)
|
|
929
|
|
|||||
Total other income (expense)
|
(2,428
|
)
|
|
(5,695
|
)
|
|
(1,948
|
)
|
|
(1,150
|
)
|
|
(11,221
|
)
|
|||||
Income (loss) before taxes
|
(8,406
|
)
|
|
26,970
|
|
|
(1,871
|
)
|
|
—
|
|
|
16,693
|
|
|||||
Provision (benefit) for income taxes
|
(3,194
|
)
|
|
9,726
|
|
|
(732
|
)
|
|
—
|
|
|
5,800
|
|
|||||
Income (loss) before equity in net income of subsidiaries
|
(5,212
|
)
|
|
17,244
|
|
|
(1,139
|
)
|
|
—
|
|
|
10,893
|
|
|||||
Equity in net income (loss) of subsidiaries
|
16,105
|
|
|
(1,206
|
)
|
|
17,244
|
|
|
(32,143
|
)
|
|
—
|
|
|||||
Net income (loss)
|
$
|
10,893
|
|
|
$
|
16,038
|
|
|
$
|
16,105
|
|
|
$
|
(32,143
|
)
|
|
$
|
10,893
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net Income (loss)
|
$
|
10,893
|
|
|
$
|
16,038
|
|
|
$
|
16,105
|
|
|
$
|
(32,143
|
)
|
|
$
|
10,893
|
|
Other comprehensive income (loss), net of taxes
|
5,363
|
|
|
2,077
|
|
|
3,258
|
|
|
(5,335
|
)
|
|
5,363
|
|
|||||
Comprehensive income (loss)
|
$
|
16,256
|
|
|
$
|
18,115
|
|
|
$
|
19,363
|
|
|
$
|
(37,478
|
)
|
|
$
|
16,256
|
|
($ in thousands)
|
Parent Company
|
|
Guarantor Companies
|
|
Non-Guarantor Companies
|
|
Elimination
|
|
Consolidation
|
||||||||||
Revenue
|
$
|
—
|
|
|
$
|
392,361
|
|
|
$
|
126,343
|
|
|
$
|
(13,665
|
)
|
|
$
|
505,039
|
|
Cost of goods and services
|
—
|
|
|
295,148
|
|
|
103,938
|
|
|
(12,354
|
)
|
|
386,732
|
|
|||||
Gross profit
|
—
|
|
|
97,213
|
|
|
22,405
|
|
|
(1,311
|
)
|
|
118,307
|
|
|||||
Selling, general and administrative expenses
|
7,034
|
|
|
71,110
|
|
|
19,617
|
|
|
(1,626
|
)
|
|
96,135
|
|
|||||
Restructuring and other related charges
|
—
|
|
|
349
|
|
|
9
|
|
|
—
|
|
|
358
|
|
|||||
Total operating expenses
|
7,034
|
|
|
71,459
|
|
|
19,626
|
|
|
(1,626
|
)
|
|
96,493
|
|
|||||
Income (loss) from operations
|
(7,034
|
)
|
|
25,754
|
|
|
2,779
|
|
|
315
|
|
|
21,814
|
|
|||||
Other income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Interest income (expense), net
|
(1,750
|
)
|
|
(7,367
|
)
|
|
(2,424
|
)
|
|
—
|
|
|
(11,541
|
)
|
|||||
Loss from debt extinguishment, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Other, net
|
1,436
|
|
|
2,497
|
|
|
(997
|
)
|
|
(315
|
)
|
|
2,621
|
|
|||||
Total other income (expense)
|
(314
|
)
|
|
(4,870
|
)
|
|
(3,421
|
)
|
|
(315
|
)
|
|
(8,920
|
)
|
|||||
Income (loss) before taxes
|
(7,348
|
)
|
|
20,884
|
|
|
(642
|
)
|
|
—
|
|
|
12,894
|
|
|||||
Provision (benefit) for income taxes
|
(9,322
|
)
|
|
7,322
|
|
|
430
|
|
|
—
|
|
|
(1,570
|
)
|
|||||
Income (loss) before equity in net income of subsidiaries
|
1,974
|
|
|
13,562
|
|
|
(1,072
|
)
|
|
—
|
|
|
14,464
|
|
|||||
Equity in net income (loss) of subsidiaries
|
12,490
|
|
|
(1,161
|
)
|
|
13,562
|
|
|
(24,891
|
)
|
|
—
|
|
|||||
Net income (loss)
|
$
|
14,464
|
|
|
$
|
12,401
|
|
|
$
|
12,490
|
|
|
$
|
(24,891
|
)
|
|
$
|
14,464
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net Income (loss)
|
$
|
14,464
|
|
|
$
|
12,401
|
|
|
$
|
12,490
|
|
|
$
|
(24,891
|
)
|
|
$
|
14,464
|
|
Other comprehensive income (loss), net of taxes
|
3,126
|
|
|
(592
|
)
|
|
3,547
|
|
|
(2,955
|
)
|
|
3,126
|
|
|||||
Comprehensive income (loss)
|
$
|
17,590
|
|
|
$
|
11,809
|
|
|
$
|
16,037
|
|
|
$
|
(27,846
|
)
|
|
$
|
17,590
|
|
|
Parent Company
|
|
Guarantor Companies
|
|
Non-Guarantor Companies
|
|
Elimination
|
|
Consolidation
|
||||||||||
Revenue
|
$
|
—
|
|
|
$
|
1,194,589
|
|
|
$
|
362,291
|
|
|
$
|
(43,006
|
)
|
|
$
|
1,513,874
|
|
Cost of goods and services
|
—
|
|
|
906,573
|
|
|
285,435
|
|
|
(33,987
|
)
|
|
1,158,021
|
|
|||||
Gross profit
|
—
|
|
|
288,016
|
|
|
76,856
|
|
|
(9,019
|
)
|
|
355,853
|
|
|||||
Selling, general and administrative expenses
|
16,799
|
|
|
214,717
|
|
|
61,734
|
|
|
(10,213
|
)
|
|
283,037
|
|
|||||
Total operating expenses
|
16,799
|
|
|
214,717
|
|
|
61,734
|
|
|
(10,213
|
)
|
|
283,037
|
|
|||||
Income (loss) from operations
|
(16,799
|
)
|
|
73,299
|
|
|
15,122
|
|
|
1,194
|
|
|
72,816
|
|
|||||
Other income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Interest income (expense), net
|
(6,530
|
)
|
|
(22,895
|
)
|
|
(6,219
|
)
|
|
—
|
|
|
(35,644
|
)
|
|||||
Other, net
|
541
|
|
|
4,985
|
|
|
(4,611
|
)
|
|
(1,194
|
)
|
|
(279
|
)
|
|||||
Total other income (expense)
|
(5,989
|
)
|
|
(17,910
|
)
|
|
(10,830
|
)
|
|
(1,194
|
)
|
|
(35,923
|
)
|
|||||
Income (loss) before taxes
|
(22,788
|
)
|
|
55,389
|
|
|
4,292
|
|
|
—
|
|
|
36,893
|
|
|||||
Provision (benefit) for income taxes
|
(8,659
|
)
|
|
20,525
|
|
|
1,541
|
|
|
—
|
|
|
13,407
|
|
|||||
Income (loss) before equity in net income of subsidiaries
|
(14,129
|
)
|
|
34,864
|
|
|
2,751
|
|
|
—
|
|
|
23,486
|
|
|||||
Equity in net income (loss) of subsidiaries
|
37,615
|
|
|
4,095
|
|
|
34,864
|
|
|
(76,574
|
)
|
|
—
|
|
|||||
Net income (loss)
|
$
|
23,486
|
|
|
$
|
38,959
|
|
|
$
|
37,615
|
|
|
$
|
(76,574
|
)
|
|
$
|
23,486
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net Income (loss)
|
$
|
23,486
|
|
|
$
|
38,959
|
|
|
$
|
37,615
|
|
|
$
|
(76,574
|
)
|
|
$
|
23,486
|
|
Other comprehensive income (loss), net of taxes
|
(40,839
|
)
|
|
(14,578
|
)
|
|
(25,962
|
)
|
|
40,540
|
|
|
(40,839
|
)
|
|||||
Comprehensive income (loss)
|
$
|
(17,353
|
)
|
|
$
|
24,381
|
|
|
$
|
11,653
|
|
|
$
|
(36,034
|
)
|
|
$
|
(17,353
|
)
|
|
Parent Company
|
|
Guarantor Companies
|
|
Non-Guarantor Companies
|
|
Elimination
|
|
Consolidation
|
||||||||||
Revenue
|
$
|
—
|
|
|
$
|
1,133,510
|
|
|
$
|
375,877
|
|
|
$
|
(43,203
|
)
|
|
$
|
1,466,184
|
|
Cost of goods and services
|
—
|
|
|
860,322
|
|
|
310,887
|
|
|
(38,822
|
)
|
|
1,132,387
|
|
|||||
Gross profit
|
—
|
|
|
273,188
|
|
|
64,990
|
|
|
(4,381
|
)
|
|
333,797
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Selling, general and administrative expenses
|
20,525
|
|
|
207,725
|
|
|
50,025
|
|
|
(4,838
|
)
|
|
273,437
|
|
|||||
Restructuring and other related charges
|
—
|
|
|
1,841
|
|
|
51
|
|
|
—
|
|
|
1,892
|
|
|||||
Total operating expenses
|
20,525
|
|
|
209,566
|
|
|
50,076
|
|
|
(4,838
|
)
|
|
275,329
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Income (loss) from operations
|
(20,525
|
)
|
|
63,622
|
|
|
14,914
|
|
|
457
|
|
|
58,468
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Other income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Interest income (expense), net
|
(8,240
|
)
|
|
(21,946
|
)
|
|
(6,817
|
)
|
|
—
|
|
|
(37,003
|
)
|
|||||
Loss from debt extinguishment, net
|
(38,890
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(38,890
|
)
|
|||||
Other, net
|
1,563
|
|
|
5,569
|
|
|
(2,365
|
)
|
|
(457
|
)
|
|
4,310
|
|
|||||
Total other income (expense)
|
(45,567
|
)
|
|
(16,377
|
)
|
|
(9,182
|
)
|
|
(457
|
)
|
|
(71,583
|
)
|
|||||
Income (loss) before taxes
|
(66,092
|
)
|
|
47,245
|
|
|
5,732
|
|
|
—
|
|
|
(13,115
|
)
|
|||||
Provision (benefit) for income taxes
|
(24,901
|
)
|
|
19,014
|
|
|
897
|
|
|
—
|
|
|
(4,990
|
)
|
|||||
Income (loss) before equity in net income of subsidiaries
|
(41,191
|
)
|
|
28,231
|
|
|
4,835
|
|
|
—
|
|
|
(8,125
|
)
|
|||||
Equity in net income (loss) of subsidiaries
|
33,066
|
|
|
4,587
|
|
|
28,231
|
|
|
(65,884
|
)
|
|
—
|
|
|||||
Net income (loss)
|
$
|
(8,125
|
)
|
|
$
|
32,818
|
|
|
$
|
33,066
|
|
|
$
|
(65,884
|
)
|
|
$
|
(8,125
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net Income (loss)
|
$
|
(8,125
|
)
|
|
$
|
32,818
|
|
|
$
|
33,066
|
|
|
$
|
(65,884
|
)
|
|
$
|
(8,125
|
)
|
Other comprehensive income (loss), net of taxes
|
2,628
|
|
|
1,277
|
|
|
840
|
|
|
(2,117
|
)
|
|
2,628
|
|
|||||
Comprehensive income (loss)
|
$
|
(5,497
|
)
|
|
$
|
34,095
|
|
|
$
|
33,906
|
|
|
$
|
(68,001
|
)
|
|
$
|
(5,497
|
)
|
|
Parent Company
|
|
Guarantor Companies
|
|
Non-Guarantor Companies
|
|
Elimination
|
|
Consolidation
|
||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net income (loss)
|
$
|
23,486
|
|
|
$
|
38,959
|
|
|
$
|
37,615
|
|
|
$
|
(76,574
|
)
|
|
$
|
23,486
|
|
Net cash provided by (used in) operating activities:
|
4,582
|
|
|
16,063
|
|
|
8,941
|
|
|
—
|
|
|
29,586
|
|
|||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Acquisition of property, plant and equipment
|
(203
|
)
|
|
(40,918
|
)
|
|
(14,244
|
)
|
|
—
|
|
|
(55,365
|
)
|
|||||
Acquired businesses, net of cash acquired
|
—
|
|
|
(2,225
|
)
|
|
—
|
|
|
—
|
|
|
(2,225
|
)
|
|||||
Intercompany distributions
|
10,000
|
|
|
(10,000
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Proceeds from sale of investments
|
8,891
|
|
|
—
|
|
|
|
|
|
—
|
|
|
8,891
|
|
|||||
Proceeds from sale of assets
|
—
|
|
|
90
|
|
|
185
|
|
|
—
|
|
|
275
|
|
|||||
Net cash provided by (used in) investing activities
|
18,688
|
|
|
(53,053
|
)
|
|
(14,059
|
)
|
|
—
|
|
|
(48,424
|
)
|
|||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Proceeds from issuance of common stock
|
371
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
371
|
|
|||||
Purchase of shares for treasury
|
(58,218
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(58,218
|
)
|
|||||
Proceeds from long-term debt
|
112,000
|
|
|
116
|
|
|
9,407
|
|
|
—
|
|
|
121,523
|
|
|||||
Payments of long-term debt
|
(73,652
|
)
|
|
(1,009
|
)
|
|
(5,834
|
)
|
|
—
|
|
|
(80,495
|
)
|
|||||
Change in short-term borrowings
|
—
|
|
|
—
|
|
|
(81
|
)
|
|
—
|
|
|
(81
|
)
|
|||||
Financing costs
|
(592
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(592
|
)
|
|||||
Tax benefit from exercise/vesting of equity awards, net
|
345
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
345
|
|
|||||
Dividends paid
|
(5,807
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,807
|
)
|
|||||
Other, net
|
206
|
|
|
19,254
|
|
|
(19,254
|
)
|
|
—
|
|
|
206
|
|
|||||
Net cash provided by (used in) financing activities
|
(25,347
|
)
|
|
18,361
|
|
|
(15,762
|
)
|
|
—
|
|
|
(22,748
|
)
|
|||||
CASH FLOWS FROM DISCONTINUED OPERATIONS:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net cash used in discontinued operations
|
—
|
|
|
—
|
|
|
(830
|
)
|
|
—
|
|
|
(830
|
)
|
|||||
Effect of exchange rate changes on cash and equivalents
|
—
|
|
|
—
|
|
|
(4,034
|
)
|
|
—
|
|
|
(4,034
|
)
|
|||||
NET DECREASE IN CASH AND EQUIVALENTS
|
(2,077
|
)
|
|
(18,629
|
)
|
|
(25,744
|
)
|
|
—
|
|
|
(46,450
|
)
|
|||||
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD
|
6,813
|
|
|
31,522
|
|
|
54,070
|
|
|
—
|
|
|
92,405
|
|
|||||
CASH AND EQUIVALENTS AT END OF PERIOD
|
$
|
4,736
|
|
|
$
|
12,893
|
|
|
$
|
28,326
|
|
|
$
|
—
|
|
|
$
|
45,955
|
|
|
Parent Company
|
|
Guarantor Companies
|
|
Non-Guarantor Companies
|
|
Elimination
|
|
Consolidation
|
||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net income (loss)
|
$
|
(8,125
|
)
|
|
$
|
32,818
|
|
|
$
|
33,066
|
|
|
$
|
(65,884
|
)
|
|
$
|
(8,125
|
)
|
Net cash provided by (used in) operating activities:
|
(10,966
|
)
|
|
(8,300
|
)
|
|
69,122
|
|
|
—
|
|
|
49,856
|
|
|||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Acquisition of property, plant and equipment
|
(672
|
)
|
|
(45,749
|
)
|
|
(8,438
|
)
|
|
—
|
|
|
(54,859
|
)
|
|||||
Acquired businesses, net of cash acquired
|
—
|
|
|
(1,000
|
)
|
|
(61,306
|
)
|
|
—
|
|
|
(62,306
|
)
|
|||||
Intercompany distributions
|
10,000
|
|
|
(10,000
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Investment purchases
|
(8,402
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8,402
|
)
|
|||||
Proceeds from sale of assets
|
—
|
|
|
298
|
|
|
193
|
|
|
—
|
|
|
491
|
|
|||||
Net cash provided by (used in) investing activities
|
926
|
|
|
(56,451
|
)
|
|
(69,551
|
)
|
|
—
|
|
|
(125,076
|
)
|
|||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Proceeds from issuance of common stock
|
584
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
584
|
|
|||||
Purchase of shares for treasury
|
(72,518
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(72,518
|
)
|
|||||
Proceeds from long-term debt
|
649,568
|
|
|
(253
|
)
|
|
33,598
|
|
|
—
|
|
|
682,913
|
|
|||||
Payments of long-term debt
|
(597,613
|
)
|
|
(708
|
)
|
|
(3,813
|
)
|
|
—
|
|
|
(602,134
|
)
|
|||||
Change in short-term borrowings
|
—
|
|
|
—
|
|
|
3,138
|
|
|
—
|
|
|
3,138
|
|
|||||
Financing costs
|
(10,393
|
)
|
|
—
|
|
|
(535
|
)
|
|
—
|
|
|
(10,928
|
)
|
|||||
Purchase of ESOP shares
|
(10,000
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10,000
|
)
|
|||||
Tax benefit from exercise/vesting of equity awards, net
|
273
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
273
|
|
|||||
Dividends paid
|
(9,841
|
)
|
|
5,000
|
|
|
—
|
|
|
—
|
|
|
(4,841
|
)
|
|||||
Other, net
|
194
|
|
|
54,869
|
|
|
(54,869
|
)
|
|
—
|
|
|
194
|
|
|||||
Net cash provided by (used in) financing activities
|
(49,746
|
)
|
|
58,908
|
|
|
(22,481
|
)
|
|
—
|
|
|
(13,319
|
)
|
|||||
CASH FLOWS FROM DISCONTINUED OPERATIONS:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net cash used in discontinued operations
|
—
|
|
|
—
|
|
|
(1,018
|
)
|
|
—
|
|
|
(1,018
|
)
|
|||||
Effect of exchange rate changes on cash and equivalents
|
—
|
|
|
—
|
|
|
(1,136
|
)
|
|
—
|
|
|
(1,136
|
)
|
|||||
NET DECREASE IN CASH AND EQUIVALENTS
|
(59,786
|
)
|
|
(5,843
|
)
|
|
(25,064
|
)
|
|
—
|
|
|
(90,693
|
)
|
|||||
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD
|
68,994
|
|
|
25,343
|
|
|
83,793
|
|
|
—
|
|
|
178,130
|
|
|||||
CASH AND EQUIVALENTS AT END OF PERIOD
|
$
|
9,208
|
|
|
$
|
19,500
|
|
|
$
|
58,729
|
|
|
$
|
—
|
|
|
$
|
87,437
|
|
•
|
Home & Building Products ("HBP") consists of two companies, The AMES Companies, Inc. (“AMES”) and Clopay Building Products Company, Inc. (“CBP”):
|
-
|
AMES is a global provider of non-powered landscaping products for homeowners and professionals.
|
-
|
CBP is a leading manufacturer and marketer of residential, commercial and industrial garage doors to professional dealers and major home center retail chains.
|
•
|
Telephonics Corporation ("Telephonics") designs, develops and manufactures high-technology integrated information, communication and sensor system solutions for military and commercial markets worldwide.
|
•
|
Clopay Plastic Products Company, Inc. ("Plastics") is an international leader in the development and production of embossed, laminated and printed specialty plastic films used in a variety of hygienic, health-care and industrial applications.
|
•
|
Discrete tax benefits, net, of
$250
or
$0.01
per share.
|
•
|
Restructuring charges of
$358
(
$222
, net of tax or
$0.00
per share);
|
•
|
Acquisition costs of $1,600 ($992, net of tax or $0.02 per share)
|
•
|
Discrete tax benefits, net, of
$1,860
or
$0.04
per share; and
|
•
|
Change in impact of debt extinguishment on full year effective tax rate of $(4,357) or $(0.09) per share.
|
•
|
Discrete tax provisions, net, of
$244
or
$0.01
per share.
|
•
|
Restructuring charges of $1,892 (
$1,173
, net of tax or
$0.02
per share);
|
•
|
Loss from debt extinguishment of $38,890 (
$24,964
, net of tax or
$0.50
per share);
|
•
|
Acquisition costs of $2,398 (
$1,487
, net of tax or $0.03 per share);
|
•
|
Discrete tax benefits, net, of
$1,540
or
$0.03
per share; and
|
•
|
Impact of debt extinguishment on full year effective tax rate of
$1,491
or
$0.03
per share.
|
|
For the Three Months Ended June 30,
|
|
For the Nine Months Ended June 30,
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Net income (loss)
|
$
|
10,893
|
|
|
$
|
14,464
|
|
|
$
|
23,486
|
|
|
$
|
(8,125
|
)
|
Adjusting items, net of tax:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Loss from debt extinguishment, net
|
—
|
|
|
—
|
|
|
—
|
|
|
24,964
|
|
||||
Restructuring charges
|
—
|
|
|
222
|
|
|
—
|
|
|
1,173
|
|
||||
Acquisition costs
|
—
|
|
|
992
|
|
|
—
|
|
|
1,487
|
|
||||
Extinguishment impact on period tax rate (a)
|
—
|
|
|
(4,357
|
)
|
|
—
|
|
|
1,491
|
|
||||
Discrete tax provisions (benefits)
|
(250
|
)
|
|
(1,860
|
)
|
|
244
|
|
|
(1,540
|
)
|
||||
Adjusted net income
|
$
|
10,643
|
|
|
$
|
9,461
|
|
|
$
|
23,730
|
|
|
$
|
19,450
|
|
Diluted income (loss) per common share
|
$
|
0.23
|
|
|
$
|
0.29
|
|
|
$
|
0.50
|
|
|
$
|
(0.16
|
)
|
Adjusting items, net of tax:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Loss from debt extinguishment, net
|
—
|
|
|
—
|
|
|
—
|
|
|
0.50
|
|
||||
Restructuring charges
|
—
|
|
|
—
|
|
|
—
|
|
|
0.02
|
|
||||
Acquisition costs
|
—
|
|
|
0.02
|
|
|
—
|
|
|
0.03
|
|
||||
Extinguishment impact on period tax rate (a)
|
—
|
|
|
(0.09
|
)
|
|
—
|
|
|
0.03
|
|
||||
Discrete tax provisions (benefits)
|
(0.01
|
)
|
|
(0.04
|
)
|
|
0.01
|
|
|
(0.03
|
)
|
||||
Adjusted earnings per common share
|
$
|
0.23
|
|
|
$
|
0.19
|
|
|
$
|
0.50
|
|
|
$
|
0.39
|
|
Weighted-average shares outstanding (in thousands)
|
46,980
|
|
|
49,836
|
|
|
47,285
|
|
|
50,038
|
|
|
For the Three Months Ended June 30,
|
|
For the Nine Months Ended June 30,
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Segment operating profit:
|
|
|
|
|
|
|
|
||||||||
Home & Building Products
|
$
|
16,268
|
|
|
$
|
9,747
|
|
|
$
|
41,288
|
|
|
$
|
27,958
|
|
Telephonics
|
13,284
|
|
|
13,134
|
|
|
29,915
|
|
|
34,463
|
|
||||
Plastics
|
8,299
|
|
|
8,075
|
|
|
26,186
|
|
|
23,252
|
|
||||
Total segment operating profit
|
37,851
|
|
|
30,956
|
|
|
97,389
|
|
|
85,673
|
|
||||
Net interest expense
|
(12,150
|
)
|
|
(11,541
|
)
|
|
(35,644
|
)
|
|
(37,003
|
)
|
||||
Unallocated amounts
|
(9,008
|
)
|
|
(6,521
|
)
|
|
(24,852
|
)
|
|
(22,895
|
)
|
||||
Loss from debt extinguishment, net
|
—
|
|
|
—
|
|
|
—
|
|
|
(38,890
|
)
|
||||
Income (loss) before taxes
|
$
|
16,693
|
|
|
$
|
12,894
|
|
|
$
|
36,893
|
|
|
$
|
(13,115
|
)
|
|
For the Three Months Ended June 30,
|
|
For the Nine Months Ended June 30,
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Segment adjusted EBITDA:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Home & Building Products
|
$
|
25,386
|
|
|
$
|
19,596
|
|
|
$
|
67,186
|
|
|
$
|
55,787
|
|
Telephonics
|
15,712
|
|
|
15,087
|
|
|
37,360
|
|
|
40,018
|
|
||||
Plastics
|
14,084
|
|
|
14,922
|
|
|
44,399
|
|
|
43,881
|
|
||||
Total Segment adjusted EBITDA
|
55,182
|
|
|
49,605
|
|
|
148,945
|
|
|
139,686
|
|
||||
Net interest expense
|
(12,150
|
)
|
|
(11,541
|
)
|
|
(35,644
|
)
|
|
(37,003
|
)
|
||||
Segment depreciation and amortization
|
(17,331
|
)
|
|
(16,691
|
)
|
|
(51,556
|
)
|
|
(49,723
|
)
|
||||
Unallocated amounts
|
(9,008
|
)
|
|
(6,521
|
)
|
|
(24,852
|
)
|
|
(22,895
|
)
|
||||
Loss from debt extinguishment, net
|
—
|
|
|
—
|
|
|
—
|
|
|
(38,890
|
)
|
||||
Restructuring charges
|
—
|
|
|
(358
|
)
|
|
—
|
|
|
(1,892
|
)
|
||||
Acquisition costs
|
—
|
|
|
(1,600
|
)
|
|
—
|
|
|
(2,398
|
)
|
||||
Income (loss) before taxes
|
$
|
16,693
|
|
|
$
|
12,894
|
|
|
$
|
36,893
|
|
|
$
|
(13,115
|
)
|
|
For the Three Months Ended June 30,
|
|
For the Nine Months Ended June 30,
|
||||||||||||||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
AMES
|
$
|
140,614
|
|
|
|
|
|
$
|
132,179
|
|
|
|
|
|
$
|
432,816
|
|
|
|
|
|
$
|
389,492
|
|
|
|
|
CBP
|
131,577
|
|
|
|
|
|
121,814
|
|
|
|
|
|
374,690
|
|
|
|
|
|
334,494
|
|
|
|
|
||||
Home & Building Products
|
$
|
272,191
|
|
|
|
|
|
$
|
253,993
|
|
|
|
|
|
$
|
807,506
|
|
|
|
|
|
$
|
723,986
|
|
|
|
|
Segment operating profit
|
$
|
16,268
|
|
|
6.0
|
%
|
|
$
|
9,747
|
|
|
3.8
|
%
|
|
$
|
41,288
|
|
|
5.1
|
%
|
|
$
|
27,958
|
|
|
3.9
|
%
|
Depreciation and amortization
|
9,118
|
|
|
|
|
|
7,891
|
|
|
|
|
|
25,898
|
|
|
|
|
|
23,539
|
|
|
|
|
||||
Restructuring charges
|
—
|
|
|
|
|
|
358
|
|
|
|
|
|
—
|
|
|
|
|
|
1,892
|
|
|
|
|
||||
Acquisition costs
|
—
|
|
|
|
|
|
1,600
|
|
|
|
|
|
—
|
|
|
|
|
|
2,398
|
|
|
|
|
||||
Segment adjusted EBITDA
|
$
|
25,386
|
|
|
9.3
|
%
|
|
$
|
19,596
|
|
|
7.7
|
%
|
|
$
|
67,186
|
|
|
8.3
|
%
|
|
$
|
55,787
|
|
|
7.7
|
%
|
|
For the Three Months Ended June 30,
|
|
For the Nine Months Ended June 30,
|
|||||||||||||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|||||||||||||||||||
Revenue
|
$
|
115,340
|
|
|
|
|
|
$
|
102,446
|
|
|
|
|
|
$
|
304,685
|
|
|
|
|
|
$
|
302,656
|
|
|
|
Segment operating profit
|
$
|
13,284
|
|
|
11.5
|
%
|
|
$
|
13,134
|
|
|
12.8
|
%
|
|
$
|
29,915
|
|
|
9.8
|
%
|
|
$
|
34,463
|
|
|
11.4%
|
Depreciation and amortization
|
2,428
|
|
|
|
|
|
1,953
|
|
|
|
|
|
7,445
|
|
|
|
|
|
5,555
|
|
|
|
||||
Segment adjusted EBITDA
|
$
|
15,712
|
|
|
13.6
|
%
|
|
$
|
15,087
|
|
|
14.7
|
%
|
|
$
|
37,360
|
|
|
12.3
|
%
|
|
$
|
40,018
|
|
|
13.2%
|
|
For the Three Months Ended June 30,
|
|
For the Nine Months Ended June 30,
|
||||||||||||||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||||||||||||||
Revenue
|
$
|
124,163
|
|
|
|
|
|
$
|
148,600
|
|
|
|
|
|
$
|
401,683
|
|
|
|
|
|
$
|
439,542
|
|
|
|
|
Segment operating profit
|
$
|
8,299
|
|
|
6.7
|
%
|
|
$
|
8,075
|
|
|
5.4
|
%
|
|
$
|
26,186
|
|
|
6.5
|
%
|
|
$
|
23,252
|
|
|
5.3
|
%
|
Depreciation and amortization
|
5,785
|
|
|
|
|
|
6,847
|
|
|
|
|
|
18,213
|
|
|
|
|
|
20,629
|
|
|
|
|
||||
Segment adjusted EBITDA
|
$
|
14,084
|
|
|
11.3
|
%
|
|
$
|
14,922
|
|
|
10.0
|
%
|
|
$
|
44,399
|
|
|
11.1
|
%
|
|
$
|
43,881
|
|
|
10.0
|
%
|
•
|
The United States Government and its agencies, through either prime or subcontractor relationships, represented 14% of Griffon’s consolidated revenue and 72% of Telephonics’ revenue.
|
•
|
Procter & Gamble Co. represented 14% of Griffon’s consolidated revenue and 51% of Plastics’ revenue.
|
•
|
The Home Depot represented 12% of Griffon’s consolidated revenue and 23% of HBP’s revenue.
|
Cash and Equivalents and Debt
|
June 30,
|
|
September 30,
|
||||
(in thousands)
|
2015
|
|
2014
|
||||
Cash and equivalents
|
$
|
45,955
|
|
|
$
|
92,405
|
|
Notes payables and current portion of long-term debt
|
11,771
|
|
|
7,886
|
|
||
Long-term debt, net of current maturities
|
828,699
|
|
|
791,301
|
|
||
Debt discount and issuance costs
|
19,052
|
|
|
23,384
|
|
||
Total debt
|
859,522
|
|
|
822,571
|
|
||
Debt, net of cash and equivalents
|
$
|
813,567
|
|
|
$
|
730,166
|
|
Period
|
(a) Total Number
of Shares (or
Units) Purchased
|
|
|
(b) Average Price
Paid Per Share (or
Unit)
|
|
(c) Total Number of
Shares (or Units)
Purchased as Part of
Publicly Announced
Plans or Programs
(1)
|
|
(d) Maximum Number (or
Approximate Dollar
Value) of Shares (or Units)
That May Yet Be
Purchased Under the
Plans or Programs
(1)
|
||||||
April 1 - 30, 2015
|
473,000
|
|
|
|
$
|
17.40
|
|
|
473,000
|
|
|
|
|
|
May 1 - 31, 2015
|
162,740
|
|
(2)
|
|
16.61
|
|
|
161,979
|
|
|
|
|
||
June 1 - 30, 2015
|
599,235
|
|
|
|
16.20
|
|
|
599,235
|
|
|
|
|
||
Total
|
1,234,975
|
|
|
|
$
|
16.71
|
|
|
1,234,214
|
|
|
$
|
31,734
|
|
1.
|
On each of May 1, 2014 and March 20, 2015, the Company’s Board of Directors authorized the repurchase of up to $50,000 of Griffon common stock; as of June 30, 2015, an aggregate of $31,734 remained available for the purchase of Griffon common stock under the March 20, 2015 $50,000 Board authorization. On July 30, 2015, the Company’s Board of Directors authorized the repurchase of up to an additional $50,000 of Griffon common stock.
|
2.
|
Includes (a) 161,979 shares purchased by the Company in open market purchases pursuant to a stock buyback plan authorized by the Company's Board of Directors; and (b) 761 shares acquired by the Company from holders of restricted stock upon vesting of the restricted stock, to satisfy tax-withholding obligations of the holders.
|
|
GRIFFON CORPORATION
|
|
|
|
|
|
/s/ Douglas J. Wetmore
|
|
|
Douglas J. Wetmore
|
|
|
Executive Vice President and Chief Financial Officer
|
|
|
(Principal Financial Officer)
|
|
|
|
|
|
/s/ Brian G. Harris
|
|
|
Brian G. Harris
|
|
|
Vice President, Controller and Chief Accounting Officer
|
|
|
(Principal Accounting Officer)
|
|
1.
|
Initial annual base salary of $340,000, payable in accordance with the Company’s standard payroll practices, effective as of your Effective Date. You will be eligible to receive salary increases at the conclusion of fiscal year 2015 and each year thereafter.
|
2.
|
Projected effective date of your appointment of August 1, 2015 (the “Effective Date”).
|
3.
|
Eligibility to participate in all Company welfare and tax-qualified benefit plans as are available generally to the Company’s other similarly situated executives. This includes all plans in which you are currently eligible to participate, as well as the Griffon Corporation and Affiliates Supplemental Health Benefits Plan for Senior Executives.
|
4.
|
You will be eligible for equity grants from time to time at the discretion of Griffon’s Compensation Committee.
It is expected that senior management will recommend to the Compensation Committee annually that you receive an equity grant with a value equal to no less than 125% of your base salary. However, the Committee (and the Company) reserves the right to grant a higher or lower value or amount to you in its sole discretion (regardless of the value or amount granted to other senior executives), or to not award you any grant in a particular year, taking into account corporate performance, individual
|
5.
|
You will be eligible to receive an annual cash bonus, at the discretion of, and as determined by, the Compensation Committee. Your annual target bonus opportunity shall be equal to fifty percent (50%) of your base salary, and your maximum bonus opportunity shall be equal to one hundred percent (100%) of your base salary. The Committee may, if it desires, determine that your bonus in a particular year is based on one or more performance objectives. The actual amount of any bonus awarded to you in any particular year, regardless of the value or amount granted to other senior executives, shall be as determined by the Compensation Committee.
|
6.
|
You will be entitled to a monthly automobile allowance of $850, plus reimbursement of all reasonable expenses related to the use of one automobile, including insurance, gas, maintenance, repairs, and parking.
|
7.
|
The Company will use commercially reasonable efforts to provide you with term life insurance coverage, commencing no later than the sixtieth (60th) day after the Effective Date, with a face amount equal to three (3) times your base salary. The Company’s obligation to obtain such coverage shall be subject to your submitting to a physical examination, if required, and otherwise cooperating with the underwriting process. Subject to the above, the Company will apply for this insurance on or prior to the Effective Date, and such coverage shall continue during your employment with the Company.
|
8.
|
You will receive four (4) weeks of paid vacation per annum, to be taken in accordance with the Company’s standard vacation policy.
|
9.
|
All forms of compensation referred to in this letter are subject to reduction to reflect applicable withholding and payroll taxes.
|
10.
|
Your employment will be “at will”, meaning that either you or the Company may terminate your employment at any time and for any reason or no reason; provided, however, that you and the Company shall enter into a severance agreement (the “Severance Agreement”) that provides for benefits upon certain terminations as described
|
a.
|
Payments Upon Termination
|
i.
|
Upon termination by the Company without cause or by you for good reason, in either case, during the Term but other than within two years following a change in control, subject to the execution and effectiveness of a general release within 60 days of such termination and your compliance with the Restrictive Covenants (as defined below), you will receive monthly base salary continuation payments for eighteen (18) months, a bonus payment equal to your target bonus amount for the then current year, and eighteen (18) months of paid medical benefits.
|
ii.
|
Upon termination by the Company without cause or by you for good reason, in either case, during the Term and within two years following a change in control, subject to the execution and effectiveness of a general release within 60 days of such termination and your compliance with the Restrictive Covenants, you will receive (i) a lump sum payment equal to 2.5 times the sum of (A) your base salary and (B) the average of the annual bonuses paid to you over the prior three year period (provided that, once you receive an annual bonus in respect of fiscal year 2015 and prior to the time you receive an annual bonus in respect of fiscal year 2017, such average shall be computed based on the bonus or bonuses received in respect of fiscal years 2015 and 2016 only); (ii) a payment equal to the greater of your target bonus for the current year or the actual bonus you received for the fiscal year prior to the year of termination, in either case appropriately pro-rated for the days you were employed in the fiscal year of termination; and (iii) Company paid medical benefits
|
iii.
|
In the event the Company terminates you for disability during the Term, the Company shall pay you base salary continuation payments for six (6) months, plus a pro-rata target bonus for the year of termination, and six (6) months of paid medical benefits.
|
iv.
|
In the event your employment terminates due to your death, the Company shall pay your estate a pro-rata target bonus for the year of termination.
|
b.
|
Restrictive Covenants. During your employment and for eighteen (18) months following your employment, you shall not (i) solicit any of the Company’s employees or consultants, or those of any subsidiary, to leave the Company, (ii) solicit or encourage any vendor, client or prospective client to cease any relationship with the Company or any subsidiary, or (iii) provide services to, own, manage, or be employed by, any business that competes with one or more of the businesses of the Company’s subsidiaries as such businesses exist on the date of your termination; you shall also be subject to standard and reasonable confidentiality and non-disparagement restrictions (collectively, the “Restrictive Covenants”).
|
c.
|
The terms “cause” and “good reason” shall be defined in the same manner as they are defined in severance agreements for other Senior Vice Presidents that are party to a severance agreement with the Company.
|
11.
|
While you are employed by the Company, you will not engage in any other employment or business without the Company’s consent.
|
By:
|
/s/ Seth L. Kaplan
Seth L. Kaplan |
Name:
|
Brian G. Harris
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Griffon Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
/s/ Ronald J. Kramer
|
|
|
Ronald J. Kramer
|
|
|
Chief Executive Officer
|
|
|
(Principal Executive Officer)
|
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Griffon Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
/s/ Douglas J. Wetmore
|
|
|
Douglas J. Wetmore
|
|
|
Executive Vice President and Chief Financial Officer
|
|
|
(Principal Financial Officer)
|
|
|
/s/ Ronald J. Kramer
|
|
|
Name: Ronald J. Kramer
|
|
|
Date: July 30, 2015
|
|
|
/s/ Douglas J. Wetmore
|
|
|
Name: Douglas J. Wetmore
|
|
|
Date: July 30, 2015
|
|