Press Release

Completes Highly Accretive Acquisition of Ames True Temper
Fiscal 2010 Revenue increases 8% to $1.3 billion; pro forma of $1.7 billion
2010 Segment Adjusted EBITDA increases 19% to $108 million; pro forma of $181 million
2010 EPS $0.16 versus $0.32; Adjusted EPS from Continuing Operations $0.34 versus $0.27

NEW YORK, Nov 16, 2010 (BUSINESS WIRE) -- Griffon Corporation (NYSE: GFF) today reported financial results for the fourth quarter and year ended September 30, 2010.

For 2010, revenue totaled $1.3 billion, increasing 8% in comparison to 2009; revenue growth was driven by strong increases at Telephonics and Plastics, partially offset by weakness in Clopay Building Products ("CBP"), as had been anticipated. Net income in 2010 was $9.6 million ($0.16 per share) compared to $18.7 million ($0.32 per share) in 2009. Full year segment adjusted EBITDA totaled $108.3 million, increasing 19% compared to 2009; segment adjusted EBITDA is defined as income from continuing operations, excluding corporate overhead, interest, taxes, depreciation and amortization, restructuring charges, acquisition-related costs and the benefit (loss) of debt extinguishment.

Fourth quarter 2010 revenue totaled $348 million, increasing 6% compared to $328 million reported in 2009. The net loss for the quarter was $1.7 million ($0.03 per share) compared to net income of $11.9 million ($0.20 per share) in the prior year. Segment adjusted EBITDA declined 13% to $30.4 million, compared to $34.9 million in the prior year quarter; the decline was mainly in CBP, discussed in more detail below.

The Company reported 2010 income from continuing operations of $9.5 million ($0.16 per share) compared to $17.9 million ($0.30 per share) in the prior year. The 2010 results were reduced by $9.8 million ($7.7 million net of tax, or $0.13 per share) of Ames True Temper ("ATT") acquisition costs and $5.3 million ($3.4 million net of tax, or $0.06 per share) of restructuring and non-recurring debt financing costs. The prior year result included $4.5 million ($2.9 million net of tax, or $0.05 per share) of gains from extinguishment of debt, partially offset by restructuring costs of $1.2 million ($0.8 million net of tax, or $0.01 per share). Excluding these items from both years, 2010 income from continuing operations would have been $20.6 million ($0.34 per share) compared to $15.8 million ($0.27 per share) in 2009.

The Company reported a loss from continuing operation for the 2010 fourth quarter of $1.7 million ($0.03 per share) compared to a profit of $11.8 million ($0.20 per share) in 2009. The 2010 quarter included $7.7 million net of tax ($0.13 per share) of acquisition costs as well as $1.6 million ($1.0 million net of tax, or $0.02 per share) of restructuring and non-recurring debt financing costs; the 2009 quarter included restructuring costs of $1.2 million ($0.8 million net of tax, or $0.01 per share). Excluding these items in both periods, fourth quarter 2010 income from continuing operations would have been $7.0 million ($0.12 per share) compared to $12.6 million ($0.21 per share) in 2009.

Ron Kramer, Chief Executive Officer, commented, "We are very pleased with the financial, operational and strategic progress made over the course of 2010. The ATT acquisition, which we expect to be highly accretive in 2011 and beyond, is the next step in the growth of Griffon. ATT, combined with the progress we've made in Telephonics, Plastics and CBP, positions us to create superior value for our shareholders."

Mr. Kramer continued, "Our approach to managing our portfolio of companies with a common strategic and financial platform will enable us to accelerate growth and capture incremental profitability in each business. We look forward to the year ahead."

Acquisition of Ames True Temper:

On September 30, 2010, Griffon acquired ATT, a global provider of non-powered lawn and garden tools, wheelbarrows and other outdoor products to the retail and professional markets; ATT's results of operations are not included in Griffon's 2010 operating results. For a reconciliation of pro forma financial information contained herein to the applicable GAAP measures, see Exhibit 99.3 to the Form 8-K/A (Amendment No. 2) filed today, November 16, 2010.

Giving effect to the acquisition as though it had taken place October 1, 2008, pro forma revenue for 2010 totaled $1.74 billion compared to 2009 revenue of $1.66 billion. On the same pro forma basis, 2010 segment adjusted EBITDA totaled $180.6 million compared to $153.3 million in 2009. Pro forma income from continuing operations for 2010 was $30.1 million ($0.50 per share) compared to $24.9 million ($0.42 per share) in 2009.

Pro-forma 2010 fourth quarter revenue totaled $429 million compared to $420 million in the 2009 quarter. On the same pro forma basis, fourth quarter segment adjusted EBITDA was $41.0 million compared to $46.6 million in 2009. Pro forma income from continuing operations in the fourth quarter 2010 was $3.1 million ($0.05 per share) compared to $10.2 million ($0.17 per share) in the 2009 quarter.

Segment Operating Results

Telephonics

Revenue totaled $435 million in 2010, an increase of $47 million or 12%, compared to the prior year, primarily due to awards related to various radar programs and the CREW 3.1 contract.

Fourth quarter 2010 revenue totaled $114 million, a decrease of $2 million or 2%, compared to the prior year quarter, primarily due to timing of radar program orders, the completion of significant communications programs, and a slowdown in CREW 3.1 shipments, which were substantial in the prior year quarter.

Segment operating profit for 2010 totaled $38.6 million, an increase of $3.7 million or 11%, compared to the prior year, primarily due to the revenue increase. Segment operating margin remained consistent with prior year due to the strong sales performance and favorable program mix, partially offset by higher SG&A expenses. The SG&A increase resulted from higher research and development and marketing related expenses in connection with business development initiatives to sustain future revenue growth, as well as additional administrative expenses to support the current level of operations.

Segment operating profit of $11.2 million for the quarter was essentially flat with the prior year.

Contract backlog totaled $407 million at September 30, 2010 compared to $393 million at September 30, 2009, with approximately 73% expected to be filled in 2011.

Building Products

Revenue totaled $389 million in 2010, a decrease of $4 million or 1%, compared to the prior year, driven mainly by the effects of the weak construction market, particularly in the commercial building segment.

Fourth quarter 2010 revenue totaled $103 million, a decrease of $3.5 million or 3%, compared to the prior year quarter, due to the same factors noted above.

Segment operating profit for 2010 totaled $5.0 million, an increase of $16.3 million, compared to a prior year loss of $11.3 million. The operating performance was driven by improved plant efficiencies and lower operating costs. The plant consolidation initiative is on track to be completed during the second quarter of fiscal 2011.

The fourth quarter 2010 segment operating result was a loss of $0.6 million compared to the prior year quarter profit of $4.3 million, primarily due to lower volume which impacted absorption of fixed plant costs, and higher input costs, mainly steel.

Going forward, results from ATT will be included with CBP in a newly established Home & Building Products segment. Pro forma 2010 revenue for this segment was $833 million; pro forma 2010 segment operating income was $58.8 million.

Plastic Products

Revenue totaled $470 million in 2010, an increase of $57 million or 14%, compared to the prior year, driven primarily by higher volume in all regions and the positive impact from foreign currency translation.

Fourth quarter 2010 revenue totaled $130 million, an increase of $25 million or 24%, compared to the prior year quarter, primarily due to higher volume from expanded programs with existing customers as well as higher customer selling prices due to resin. By contractual agreement, Plastics adjusts customer selling prices based on underlying resin costs, on a delayed basis.

Segment operating profit for 2010 totaled $20.5 million, a decrease of $3.6 million or 15%, compared to the prior year. The benefit of the improved volume in the third and fourth quarters was offset by slower business trends in the first half of the year and by the negative impact of higher resin costs.

Fourth quarter 2010 segment operating profit totaled $8.3 million, an increase of $1.2 million or 16%, compared to the prior year quarter primarily due to higher volume across all regions.

Unallocated Expenses

For 2010, unallocated expenses were $37.2 million compared to $21.0 million in the prior year. The increase reflects costs incurred in connection with evaluating various acquisition opportunities, including $9.8 million of costs related to the successful completion of the ATT acquisition, as well as higher compensation and related expenses.

Fourth quarter 2010 unallocated expenses were $15.1 million compared to $5.5 million in the prior year, with the increase attributable to the costs incurred in connection with the ATT acquisition.

Balance Sheet and Capital Expenditures

The Company noted that its consolidated balance sheet at September 30, 2010 reflects the ATT acquisition. At that date, cash and equivalents totaled $170 million and total debt outstanding was $525 million. Capital expenditures in the fourth quarter were $14 million and were $40 million for the full year 2010. Griffon currently expects that capital spending in 2011 will approximate $50 - $60 million.

Adoption of New Accounting Standards

The Company noted that, on October 1, 2009, it adopted the new accounting standard which requires the liability and equity components of convertible debt instruments to be separately accounted for using the Company's nonconvertible debt rate. Adoption of this standard must be applied retrospectively, and as a result, the prior year's fourth quarter income from continuing operations and net income were each reduced by $0.5 million and the related earnings per share by $0.01.

Conference Call Information

The Company will hold a conference call today, November 16, 2010, at 4:30 PM ET.

The call can be accessed by dialing 1-877-407-4018 (U.S. participants) or 1-201-689-8471 (International participants). Callers should ask to be connected to Griffon Corporation's teleconference.

A replay of the call will be available starting on November 16, 2010 at 7:30 PM ET by dialing 1-877-870-51763 (U.S.) or 1-858-384-5517 (International), and entering the conference ID number: 360761. The replay account number is 3055 with access code 354605. The replay will be available through November 30, 2010.

Forward-looking Statements

"Safe Harbor" Statements under the Private Securities Litigation Reform Act of 1995: All statements related to, among other things, income, earnings, cash flows, revenue, changes in operations, operating improvements, industries in which Griffon Corporation (the "Company" or "Griffon") operates and the United States and global economies that are not historical are hereby identified as "forward-looking statements" and may be indicated by words or phrases such as "anticipates," "supports," "plans," "projects," "expects," "believes," "should," "would," "could," "hope," "forecast," "management is of the opinion," "may," "will," "estimates," "intends," "explores," "opportunities," the negative of these expressions, use of the future tense and similar words or phrases. Such forward-looking statements are subject to inherent risks and uncertainties that could cause actual results to differ materially from those expressed in any forward-looking statements. These risks and uncertainties include, among others: current economic conditions and uncertainties in the housing, credit and capital markets; the Company's ability to achieve expected savings from cost control, integration and disposal initiatives; the ability to identify and successfully consummate and integrate value-adding acquisition opportunities, including the acquisition of Ames True Temper; increasing competition and pricing pressures in the markets served by Griffon's operating companies; the ability of Griffon's operating companies to expand into new geographic and product markets and to anticipate and meet customer demands for new products and product enhancements and innovations; the government reduces military spending on projects supplied by Telephonics Corporation; increases in cost of raw materials such as resin and steel; changes in customer demand; political events that could impact the worldwide economy; a downgrade in the Company's credit ratings; international economic conditions including interest rate and currency exchange fluctuations; the relative mix of products and services which impacts margins and operating efficiencies; short-term capacity constraints or prolonged excess capacity; unforeseen developments in contingencies such as litigation; unfavorable results of government agency contract audits of Telephonics Corporation; protection and validity of patent and other intellectual property rights; the cyclical nature of the business of certain Griffon operating companies; and possible terrorist threats and actions, and their impact on the global economy. Such statements reflect the views of the Company with respect to future events and are subject to these and other risks, uncertainties and assumptions relating to the operations, results of operations, growth strategy and liquidity of the Company as previously disclosed in the Company's Securities and Exchange Commission filings. Readers are cautioned not to place undue reliance on these forward-looking statements. These forward-looking statements speak only as of the date made. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

About Griffon Corporation

Griffon Corporation (the "Company" or "Griffon"), is a diversified management and holding company that conducts business through wholly-owned subsidiaries. Griffon oversees the operations of its subsidiaries, allocates resources among them and manages their capital structures. Griffon provides direction and assistance to its subsidiaries in connection with acquisition and growth opportunities as well as in connection with divestitures. Griffon also seeks out, evaluates and, when appropriate, will acquire additional businesses that offer potentially attractive returns on capital to further diversify itself.

Griffon currently conducts its operations through Telephonics Corporation ("Telephonics"), Clopay Building Products ("CBP"), Clopay Plastic Products Company ("Plastics") and Ames True Temper ("ATT"). CBP and ATT comprise the Home & Building Products operating segment.

• Telephonics designs, develops and manufactures high-technology, integrated information, communication and sensor system solutions for use in military and commercial markets worldwide.
• Home & Building Products is a leading manufacturer and marketer of residential, commercial and industrial garage doors to professional installing dealers and major home center retail chains, as well as a global provider of non-powered landscaping products that make work easier for homeowners and professionals.
• 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 more information on Griffon and its operating subsidiaries, please see the Company's website at .

GRIFFON CORPORATION AND SUBSIDIARIES
OPERATING HIGHLIGHTS
(in thousands)
		(Unaudited)
		Three months ended								For the Years Ended
		September 30,								September 30,
		2010				2009				2010				2009
REVENUE
Telephonics		$	114,294			$	116,361			$	434,516			$	387,881
Clopay Building Products			103,315				106,848				389,366				393,414
Plastics			130,227				105,035				470,114				412,755
Total consolidated net sales		$	347,836			$	328,244			$	1,293,996			$	1,194,050
INCOME BEFORE TAXES AND DISCONTINUED OPERATIONS
Segment operating profit (loss):
Telephonics		$	11,186			$	11,345			$	38,586			$	34,883
Clopay Building Products			(567	)			4,269				4,986				(11,326	)
Plastics			8,331				7,178				20,469				24,072
Total segment operating profit			18,950				22,792				64,041				47,629
Unallocated amounts*			(15,061	)			(5,471	)			(37,199	)			(20,960	)
Gain (loss) from debt extinguishment, net			(1,111	)			-				(1,117	)			4,488
Net interest expense			(1,789	)			(2,028	)			(11,913	)			(11,552	)
Income before taxes and discontinued operations		$	989			$	15,293			$	13,812			$	19,605
*Unallocated amounts typically include general corporate expenses not attributable to reportable segment.
Prior year amounts have been adjusted for the adoption of the new accounting standard for convertible debt.

GRIFFON CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
		(Unaudited)
		Three Months Ended September 30,								Years Ended September 30,
		2010				2009				2010				2009
Revenue		$	347,836			$	328,244			$	1,293,996			$	1,194,050
Cost of goods and services			273,238				250,339				1,005,692				936,927
Gross profit			74,598				77,905				288,304				257,123
Selling, general and administrative expenses			73,737				60,287				261,403				230,736
Impairment of goodwill			-				-				-				-
Restructuring and other related charges			460				1,202				4,180				1,240
Total operating expenses			74,197				61,489				265,583				231,976
Income from operations			401				16,416				22,721				25,147
Other income (expense)
Interest expense			(1,863	)			(2,557	)			(12,322	)			(13,091	)
Interest income			74				529				409				1,539
Gain (loss) from debt extinguishment, net			(1,111	)			-				(1,117	)			4,488
Other, net			3,488				905				4,121				1,522
Total other income (expense)			588				(1,123	)			(8,909	)			(5,542	)
Income before taxes and discontinued operations			989				15,293				13,812				19,605
Income tax provision			2,689				3,454				4,308				1,687
Income (loss) from continuing operations			(1,700	)			11,839				9,504				17,918
Discontinued operations:
Income (loss) from operations of the discontinued Installation Services business			-				175				142				1,230
Income tax provision (benefit)			-				86				54				440
Income from discontinued operations			-				89				88				790
Net income (loss)		$	(1,700	)		$	11,928			$	9,592			$	18,708
Basic earnings per common share:
Income from continuing operations		$	(0.03	)		$	0.20			$	0.16			$	0.31
Income from discontinued operations			0.00				0.00				0.00				0.01
Net income			(0.03	)			0.20				0.16				0.32
Weighted-average shares outstanding			59,067				58,778				58,974				58,699
Diluted earnings per common share:
Income from continuing operations		$	(0.03	)		$	0.20			$	0.16			$	0.30
Income from discontinued operations			0.00				0.00				0.00				0.01
Net income			(0.03	)			0.20				0.16				0.32
Weighted-average shares outstanding			60,281				59,420				59,993				59,002
Note: Due to rounding, the sum of earnings per share of Continuing operations and Discontinued operations may not equal earnings per share of Net income.
Prior year amounts have been adjusted for the adoption of the new accounting standard for convertible debt.

GRIFFON CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands)
		At September 30,			At September 30,
		2010			2009
CURRENT ASSETS
Cash and equivalents		$	169,802		$	320,833
Accounts receivable, net of allowances of $6,581 and $4,457			252,029			164,619
Contract costs and recognized income not yet billed, net of progress payments of $1,423 and $14,592			63,155			75,536
Inventories, net			268,801			139,170
Prepaid and other current assets			55,782			39,261
Assets of discontinued operations			1,079			1,576
Total Current Assets			810,648			740,995
PROPERTY, PLANT AND EQUIPMENT, net			314,926			236,019
GOODWILL			357,221			97,657
INTANGIBLE ASSETS, net			233,011			34,211
OTHER ASSETS			27,907			29,132
ASSETS OF DISCONTINUED OPERATIONS			5,803			5,877
Total Assets		$	1,749,516		$	1,143,891
CURRENT LIABILITIES
Notes payable and current portion of long-term debt, net of debt discount of $0 and $2,820		$	20,901		$	78,590
Accounts payable			185,165			125,027
Accrued and other current liabilities			124,700			61,120
Liabilities of discontinued operations			4,289			4,932
Total Current Liabilities			335,055			269,669
LONG-TERM DEBT, net of debt discount of $30,650 and $0			503,935			98,394
OTHER LIABILITIES			191,365			78,837
LIABILITIES OF DISCONTINUED OPERATIONS			8,446			8,784
Total Liabilities			1,038,801			455,684
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY
Total Shareholders' Equity			710,715			688,207
Total Liabilities and Shareholders' Equity		$	1,749,516		$	1,143,891
Prior year amounts have been adjusted for the adoption of the new accounting standard for convertible debt.

GRIFFON CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
		Years Ended September 30,
		2010				2009
CASH FLOWS FROM OPERATING ACTIVITIES
Net income		$	9,592			$	18,708
Adjustments to reconcile net income to net cash provided by operating activities:
Income from discontinued operations			(88	)			(790	)
Depreciation and amortization			40,442				42,346
Long-term debt discount			-				-
Stock-based compensation			5,778				4,145
Provisions for losses on account receivable			2,431				628
Amortization/write-off of deferred financing costs			5,059				5,209
Loss (gain) from debt extinguishment, net			1,117				(4,488	)
Deferred income taxes			(3,666	)			(3,144	)
Change in assets and liabilities, net of assets and liabilities acquired:
(Increase) decrease in accounts receivable and contract costs and recognized income not yet billed			(25,481	)			(6,690	)
(Increase) decrease in inventories			(10,611	)			28,498
(Increase) decrease in prepaid and other assets			(14,342	)			11,130
Increase (decrease) in accounts payable, accrued liabilities and income taxes payable			72,218				(8,627	)
Other changes, net			676				(2,825	)
Net cash provided by operating activities			83,125				84,100
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property, plant and equipment			(40,477	)			(32,697	)
Acquired businesses, net of cash acquired			(542,000	)			-
Proceeds from sale of assets			(1,666	)			200
Increase in equipment lease deposits			-				(336	)
Net cash used in investing activities			(584,143	)			(32,833	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of shares from rights offering			2,823				7,257
Proceeds from issuance of long-term debt			543,875				11,431
Payments of long-term debt			(176,802	)			(56,676	)
Increase in short-term borrowings			-				(866	)
Financing costs			(17,455	)			(597	)
Purchase of ESOP shares			-				(4,370	)
Exercise of stock options			343				-
Tax benefit from exercise of options/vesting of restricted stock			325				217
Other, net			184				402
Net cash provided by (used in) financing activities			353,293				(43,202	)
CASH FLOWS FROM DISCONTINUED OPERATIONS:
Net cash used in operating activities of discontinued operations			(638	)			(1,305	)
Net cash used in discontinued operations			(638	)			(1,305	)
Effect of exchange rate changes on cash and equivalents			(2,668	)			2,152
NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS			(151,031	)			8,912
CASH AND EQUIVALENTS AT BEGINNING OF YEAR			320,833				311,921
CASH AND EQUIVALENTS AT END OF YEAR		$	169,802			$	320,833
Prior year amounts have been adjusted for the adoption of the new accounting standard for convertible debt.

The following is a reconciliation of operating income, which is a GAAP measure of Griffon's operating results, to segment operating income and segment adjusted EBITDA. Management believes that the presentation of segment operating income, segment EBITDA and segment adjusted EBITDA is appropriate to provide additional information about the Company's reportable segments. Segment operating income and segment adjusted EBITDA are not presentations made in accordance with GAAP, are not measures of financial performance or condition, liquidity or profitability of the Company, and should not be considered as an alternative to (1) net income, operating income or any other performance measures determined in accordance with GAAP or (2) operating cash flows determined in accordance with GAAP. Additionally, segment operating income and segment adjusted EBITDA are not intended to be measures of cash flow for management's discretionary use, as they do not consider certain cash requirements such as interest payments, tax payments, capital expenditures and debt service requirements.

GRIFFON CORPORATION AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP MEASURES
BY REPORTABLE SEGMENT
(Unaudited)
		Three months ended
(in thousands)		September 30,							Years Ended September 30,
		2010				2009			2010			2009
Telephonics
Segment operating income		$	11,186			$	11,345		$	38,586		$	34,883
Depreciation and amortization			2,136				2,007			7,534			6,657
Segment adjusted EBITDA			13,322				13,352			46,120			41,540
Clopay Building Products
Segment operating income (loss)			(567	)			4,269			4,986			(11,326	)
Depreciation and amortization			2,956				3,191			10,185			13,223
Restructuring charges			460				1,202			4,180			1,240
Segment adjusted EBITDA			2,849				8,662			19,351			3,137
Clopay Plastic Products
Segment operating income			8,331				7,178			20,469			24,072
Depreciation and amortization			5,911				5,682			22,384			21,930
Segment adjusted EBITDA			14,242				12,860			42,853			46,002
All segments:
Income from operations - as reported			401				16,416			22,721			25,147
Unallocated amounts			15,061				5,471			37,199			20,960
Other, net			3,488				905			4,121			1,522
Segment operating income			18,950				22,792			64,041			47,629
Segment depreciation and amortization			11,003				10,880			40,103			41,810
Restructuring charges			460				1,202			4,180			1,240
Segment adjusted EBITDA		$	30,413			$	34,874		$	108,324		$	90,679
Unallocated amounts typically include general corporate expenses not attributable to any reportable segment.

SOURCE: Griffon Corporation

Company:
Griffon Corporation
Douglas J. Wetmore, 212-957-5000
Chief Financial Officer
or
Investor Relations:
ICR Inc.
James Palczynski, 203-682-8229
Principal and Director