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NOTES PAYABLE, CAPITALIZED LEASES AND LONG-TERM DEBT | 12 Months Ended
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Sep. 30, 2016
Debt Disclosure [Abstract] |
NOTES PAYABLE, CAPITALIZED LEASES AND LONG-TERM DEBT | NOTES PAYABLE, CAPITALIZED LEASES AND LONG-TERM DEBT The present value of the net minimum payments on capitalized leases as of September 30, 2016 was follows:
| At September 30, 2016
Total minimum lease payments | $ | 9,250 |
Less amount representing interest payments | (1,359 | )
Present value of net minimum lease payments | 7,891 |
Current portion | (1,566 | )
Capitalized lease obligation, less current portion | $ | 6,325 |
Minimum payments under capital leases for the next five years are as follows: $2,154 in 2017, $1,963 in 2018, $1,624 in 2019, $1,604 in 2020, $1,623 in 2021 and $282 thereafter. Included in the consolidated balance sheet at September 30, 2016 under Property, plant and equipment, are costs and accumulated depreciation subject to capitalized leases of $18,039 and $10,148, respectively, and included in Other assets are deferred interest charges of $131. Included in the consolidated balance sheet at September 30, 2015, under Property, plant and equipment are costs and accumulated depreciation subject to capitalized leases of $17,314 and $8,520, respectively, and included in Other assets are deferred interest charges of $156. Amortization expense was $1,628, $1,765, and $1,296 in 2016, 2015 and 2014, respectively. In October 2006, a subsidiary of Griffon entered into a capital lease totaling $14,290 for real estate it occupies in Troy, Ohio. Approximately $10,000 was used to acquire the building and the remaining amount was used for improvements. 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. Debt at September 30, 2016 and 2015 consisted of the following:
|  |  | At September 30, 2016
|  |  | Outstanding Balance |  | Original Issuer Discount |  | Capitalized Fees & Expenses |  | Balance Sheet |  | Coupon Interest Rate
Senior note due 2022 | (a) |  | $ | 725,000 |  |  | (1,447 | ) |  | $ | (9,799 | ) |  | $ | 713,754 |  |  | 5.25 | %
Revolver due 2020 | (b) |  | — |  |  | — |  |  | (2,425 | ) |  | (2,425 | ) |  | n/a |
Convert. debt due 2017 | (c) |  | 100,000 |  |  | (1,248 | ) |  | (148 | ) |  | 98,604 |  |  | 4.00 | %
Real estate mortgages | (d) |  | 37,861 |  |  | — |  |  | (595 | ) |  | 37,266 |  |  | n/a |
ESOP Loans | (e) |  | 34,387 |  |  | — |  |  | (237 | ) |  | 34,150 |  |  | n/a |
Capital lease - real estate | (f) |  | 6,447 |  |  | — |  |  | (131 | ) |  | 6,316 |  |  | 5.00 | %
Non U.S. lines of credit | (g) |  | 11,462 |  |  |  |  |  | (1 | ) |  | 11,461 |  |  | n/a |
Non U.S. term loans | (g) |  | 33,669 |  |  | — |  |  | (247 | ) |  | 33,422 |  |  | n/a |
Other long term debt | (h) |  | 4,030 |  |  | — |  |  | (20 | ) |  | 4,010 |  |  | n/a |
Totals |  |  | 952,856 |  |  | (2,695 | ) |  | (13,603 | ) |  | 936,558 |  |  |  |
less: Current portion |  |  | (22,644 | ) |  | — |  |  | — |  |  | (22,644 | ) |  |  |
Long-term debt |  |  | $ | 930,212 |  |  | $ | (2,695 | ) |  | $ | (13,603 | ) |  | $ | 913,914 |  |  |  |
|  |  | At September 30, 2015
|  |  | Outstanding Balance |  | Original Issuer Discount |  | Capitalized Fees & Expenses |  | Balance Sheet |  | Coupon Interest Rate
Senior notes due 2022 | (a) |  | $ | 600,000 |  |  | $ | — |  |  | $ | (8,264 | ) |  | $ | 591,736 |  |  | 5.25 | %
Revolver due 2020 | (b) |  | 35,000 |  |  | — |  |  | (2,049 | ) |  | 32,951 |  |  | n/a |
Convert. debt due 2017 | (c) |  | 100,000 |  |  | (5,594 | ) |  | (571 | ) |  | 93,835 |  |  | 4.00 | %
Real estate mortgages | (d) |  | 32,280 |  |  | — |  |  | (470 | ) |  | 31,810 |  |  | n/a |
ESOP Loans | (e) |  | 36,744 |  |  | — |  |  | (224 | ) |  | 36,520 |  |  | n/a |
Capital lease - real estate | (f) |  | 7,524 |  |  | — |  |  | (156 | ) |  | 7,368 |  |  | 5.00 | %
Non U.S. lines of credit | (g) |  | 8,934 |  |  | — |  |  | (3 | ) |  | 8,931 |  |  | n/a |
Non U.S. term loans | (g) |  | 39,142 |  |  | — |  |  | (299 | ) |  | 38,843 |  |  | n/a |
Other long term debt | (h) |  | 1,575 |  |  | — |  |  | — |  |  | 1,575 |  |  |  |
Totals |  |  | 861,199 |  |  | (5,594 | ) |  | (12,036 | ) |  | 843,569 |  |  |  |
less: Current portion |  |  | (16,593 | ) |  | — |  |  | — |  |  | (16,593 | ) |  |  |
Long-term debt |  |  | $ | 844,606 |  |  | $ | (5,594 | ) |  | $ | (12,036 | ) |  | $ | 826,976 |  |  |  |
Interest expense consists of the following for the years ended September 30, 2016, 2015 and 2014.
|  |  | Year Ended September 30, 2016
|  |  | Effective Interest Rate |  | Cash Interest |  | Amort. Debt Discount |  | Amort. Deferred Cost & Other Fees |  | Total Interest Expense
Senior notes due 2022 | (a) |  | 5.48 | % |  | 33,906 |  |  | 103 |  |  | 1,481 |  |  | 35,490 |
Revolver due 2018 | (b) |  | n/a |  |  | 2,564 |  |  | — |  |  | 512 |  |  | 3,076 |
Convert. debt due 2017 | (c) |  | 9.0 | % |  | 4,000 |  |  | 4,346 |  |  | 443 |  |  | 8,789 |
Real estate mortgages | (d) |  | 2.2 | % |  | 695 |  |  | — |  |  | 82 |  |  | 777 |
ESOP Loans | (e) |  | 3.1 | % |  | 1,090 |  |  | — |  |  | 236 |  |  | 1,326 |
Capital lease - real estate | (f) |  | 5.5 | % |  | 353 |  |  | — |  |  | 25 |  |  | 378 |
Non U.S. lines of credit | (g) |  | n/a |  |  | 950 |  |  | — |  |  | 91 |  |  | 1,041 |
Non U.S. term loans | (g) |  | n/a |  |  | 1,080 |  |  | — |  |  | 87 |  |  | 1,167 |
Other long term debt | (h) |  | n/a |  |  | 283 |  |  |  |  |  | 9 |  |  | 292 |
Capitalized interest |  |  |  |  |  | (1,082 | ) |  |  |  |  |  |  |  | (1,082 | )
Totals |  |  |  |  |  | $ | 43,839 |  |  | $ | 4,449 |  |  | $ | 2,966 |  |  | $ | 51,254 |
|  |  | Year Ended September 30, 2015
|  |  | Effective Interest Rate |  | Cash Interest |  | Amort. Debt Discount |  | Amort. Deferred Cost & Other Fees |  | Total Interest Expense
Senior notes due 2022 | (a) |  | 5.46 | % |  | 31,500 |  |  | — |  |  | 1,289 |  |  | 32,789 |
Revolver due 2018 | (b) |  | n/a |  |  | 2,301 |  |  | — |  |  | 520 |  |  | 2,821 |
Convert. debt due 2017 | (c) |  | 9.1 | % |  | 4,000 |  |  | 3,989 |  |  | 444 |  |  | 8,433 |
Real estate mortgages | (d) |  | 3.8 | % |  | 468 |  |  | — |  |  | 576 |  |  | 1,044 |
ESOP Loans | (e) |  | 2.9 | % |  | 1,025 |  |  | — |  |  | 69 |  |  | 1,094 |
Capital lease - real estate | (f) |  | 5.3 | % |  | 405 |  |  | — |  |  | 25 |  |  | 430 |
Non U.S. lines of credit | (g) |  | n/a |  |  | 661 |  |  | — |  |  | — |  |  | 661 |
Non U.S. term loan | (g) |  | n/a |  |  | 1,335 |  |  | — |  |  | 57 |  |  | 1,392 |
Other long term debt | (h) |  |  |  |  | 166 |  |  | — |  |  | 13 |  |  | 179 |
Capitalized interest |  |  |  |  |  | (670 | ) |  | — |  |  | — |  |  | (670 | )
Totals |  |  |  |  |  | 41,191 |  |  | 3,989 |  |  | 2,993 |  |  | 48,173 |
|  |  | Year Ended September 30, 2014
|  |  | Effective Interest Rate |  | Cash Interest |  | Amort. Debt Discount |  | Amort. Deferred Cost & Other Fees |  | Total Interest Expense
Senior notes due 2018 | (a) |  | 7.4 | % |  | $ | 15,930 |  |  | $ | — |  |  | $ | 667 |  |  | $ | 16,597 |
Senior notes due 2022 | (a) |  | 5.25 | % |  | 18,550 |  |  |  |  | 759 |  |  | 19,309 |
Revolver due 2018 | (b) |  | n/a |  |  | 1,094 |  |  | — |  |  | 570 |  |  | 1,664 |
Convert. debt due 2017 | (c) |  | 9.1 | % |  | 4,000 |  |  | 3,662 |  |  | 443 |  |  | 8,105 |
Real estate mortgages | (d) |  | 3.9 | % |  | 500 |  |  | — |  |  | 144 |  |  | 644 |
ESOP Loans | (e) |  | 2.8 | % |  | 747 |  |  | — |  |  | 54 |  |  | 801 |
Capital lease - real estate | (f) |  | 5.3 | % |  | 456 |  |  | — |  |  | 25 |  |  | 481 |
Non U.S. lines of credit | (g) |  | n/a |  |  | 919 |  |  | — |  |  | 27 |  |  | 946 |
Non U.S. term loan | (g) |  | n/a |  |  | 847 |  |  | — |  |  | 36 |  |  | 883 |
Other long term debt | (h) |  |  |  | 70 |  |  | — |  |  | 40 |  |  | 110 |
Capitalized interest |  |  |  |  |  | (1,093 | ) |  | — |  |  | — |  |  | (1,093 | )
Totals |  |  |  |  |  | $ | 42,020 |  |  | $ | 3,662 |  |  | $ | 2,765 |  |  | $ | 48,447 |
Minimum payments under debt agreements for the next five years are as follows: $22,644 in 2017, $21,378 in 2018, $23,934 in 2019, $34,957 in 2020, $103,895 in 2021 and $746,048 thereafter.
(a) | On May 18, 2016, in an unregistered offering through a private placement under Rule 144A, Griffon completed the add-on offering of $125,000 principal amount of its 5.25% senior notes due 2022, at 98.76% of par, to Griffon's previous issuance of $600,000 5.25% senior notes due in 2022, at par, which was completed on February 27, 2014 (collectively the “Senior Notes”). As of May 18, 2016, outstanding Senior Notes due totaled $725,000; interest is payable semi-annually on March 1 and September 1. The net proceeds of the add-on offering were used to pay down outstanding borrowings under Griffon's Revolving Credit Facility (the "Credit Agreement").
Proceeds from the $600,000 5.25% senior notes due in 2022 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 in 2018 were discharged. The Senior Notes are senior unsecured obligations of Griffon guaranteed by certain domestic subsidiaries, and subject to certain covenants, limitations and restrictions. On July 20, 2016 and June 18, 2014, Griffon exchanged all of the $125,000 and $600,000 Senior Notes, respectively, for substantially identical Senior Notes registered under the Securities Act of 1933 via an exchange offer. The fair value of the Senior Notes approximated $725,000 on September 30, 2016 based upon quoted market prices (level 1 inputs). In connection with the issuance and exchange of the $125,000 senior notes, Griffon capitalized $3,016 of underwriting fees and other expenses in the quarter, which will amortize over the term of such notes; Griffon capitalized $10,313 in connection with the previously issued $600,000 senior notes. Furthermore, in connection with the issuance of the previously issued $600,000 senior notes, Griffon recognized a loss on the early extinguishment of debt on the 7.125% senior notes aggregating $38,890, comprised of the $31,530 tender offer premium, the write-off of $6,574 of remaining deferred financing fees and $786 of prepaid interest on defeased notes.
(b) | On March 22, 2016, Griffon amended its Revolving Credit Facility (“Credit Agreement”) to increase the credit facility from$250,000 to $350,000, extend its maturity from March 13, 2020 to March 22, 2021, and modify certain other provisions of the facility. The facility includes a letter sub-facility with a limit of $50,000 and a multi-currency sub-facility of $50,000. The Credit Agreement provides for same day borrowings of base rate loans. 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 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 (d) below). At September 30, 2016, there were no outstanding borrowings and standby letters of credit were $16,275 under the Credit Agreement; $333,725 was available, subject to certain loan covenants, 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”). As of September 30, 2016, the current conversion rate of the 2017 Notes was 70.1632 shares of Griffon’s common stock per $1 principal amount of notes, corresponding to a conversion price of $14.25 per share. Since July 15, 2016, any holder has had the option to convert such holder's notes. Under the terms of the 2017 Notes, Griffon has the right to settle the conversion of the 2017 Notes in cash, stock or a combination of cash and stock. On July 14, 2016, Griffon announced that it will settle, upon conversion, up to $125,000 of the conversion value of the 2017 Notes in cash, with amounts in excess of $125,000, if any, to be settled in shares of Griffon common stock. At both September 30, 2016 and 2015, 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 $121,563 on September 30, 2016 based upon quoted market prices (level 1 inputs). These notes are classified as long term debt as Griffon has the intent and ability to refinance the principal amount of the notes, including with borrowings under the Credit Agreement. On November 14, 2016, Griffon adjusted the conversion rate of the 2017 Notes to 70.5867 shares of Griffon's common stock per $1 principal amount of notes, corresponding to a conversion price of $14.17 per share. This adjustment was made as a result of dividends paid the last two quarters; Griffon was not required to give effect to this adjustment prior to November 14, 2016 (the forty-second trading day prior to maturity), because the cumulative increase since the prior time the conversion rate was adjusted was less than 1%. The conversion rate will be further adjusted for any dividends declared after November 14, 2016 for which the ex-dividend date is prior to maturity.
(d) | In September 2015 and March 2016, Griffon entered into mortgage loans in the amount of $32,280 and $8,000, respectively. The mortgage loans are secured by four properties occupied by Griffon's subsidiaries. The loans mature in September 2025, and April 2018, respectively, are collateralized by the specific properties financed and are guaranteed by Griffon. The loans bear interest at a rate of LIBOR plus 1.50%. At September 30, 2016, $37,266 was outstanding, net of issuance costs.
(e) | In August 2016, Griffon’s ESOP entered into an agreement that refinanced the existing ESOP loan into a new Term Loan in the amount of $35,092 (the "Agreement"). The Agreement also provided for a Line Note with $10,908 available to purchase shares of Griffon common stock in the open market. The availability period for the Line Note runs through August 2017 at which point the outstanding balance under the Line Note will be combined with the Term Loan. The Term Loan and Line Note bear interest at LIBOR plus 2.50%. The Term Loan requires quarterly principal payments of $655 through September 30, 2016 and $569 thereafter, with a balloon payment due at maturity on March 22, 2020. The Term Loan is secured by shares purchased with the proceeds of the loan and with a lien on a specific amount of Griffon assets (which lien ranks pari passu with the lien granted on such assets under the Credit Agreement) and is guaranteed by Griffon. As of September 30, 2016, $34,150, net of issuance costs, was outstanding under the Term Loan. Subsequent to September 30, 2016 and through November 11, 2016, Griffon's ESOP purchased 548,912 shares of common stock for a total of $9,213 or $16.78 per share. The remaining amount available on the authorization is $1,695.
(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. As of September 30, 2016, $6,316 was outstanding, net of issuance costs.
(g) | In September 2015, Clopay Europe GmbH (“Clopay Europe”) entered into a EUR 5,000 ($5,612 as of September 30, 2016) revolving credit facility and a EUR 15,000 term loan. The term loan is payable in twelve quarterly installments of EUR 1,250, bears interest at a fixed rate of 2.5% and matures in September 2018. The revolving facility matures in September 2017, but is renewable upon mutual agreement with the bank. The revolving credit facility accrues interest at EURIBOR plus 1.75% per annum (1.75% at September 30, 2016). The revolver and the term loan are both secured by substantially all of the assets of Clopay Europe and its subsidiaries. Griffon guarantees the revolving facility and term loan. The term loan had an outstanding balance of EUR 10,000 ($11,223 at September 30, 2016) and the revolver had no borrowings outstanding at September 30, 2016. Clopay Europe is required to maintain a certain minimum equity to assets ratio and is subject to a maximum debt leverage ratio (defined as the ratio of total debt to EBITDA).
Clopay do Brasil maintains lines of credit of approximately R$12,800 ($3,944 as of September 30, 2016). Interest on borrowings accrues at a rate of Brazilian CDI plus 6.0% (20.13% at September 30, 2016). As of September 30, 2016, there was approximately R$7,147 ($2,202 as of September 30, 2016) borrowed under the lines. PPC guarantees the loan and lines. In November 2012, Garant G.P. (“Garant”) entered into a CAD 15,000 ($11,457 as of September 30, 2016) revolving credit facility. The facility accrues interest at LIBOR (USD) or the Bankers Acceptance Rate (CDN) plus 1.3% per annum (2.13% LIBOR USD and 2.12% Bankers Acceptance Rate CDN as of September 30, 2016). The revolving facility matures in October 2019. Garant is required to maintain a certain minimum equity. As of September 30, 2016, there were CAD 5,090 ($3,888 as of September 30, 2016) borrowed under the revolving credit facility with CAD 9,910 ($7,569 as of September 30, 2016) available for borrowing. In July 2016, Griffon Australia and its Australian subsidiaries entered into an AUD 30,000 term loan and an AUD 10,000 revolver. The term loan refinanced two existing term loans and the revolver replaced two existing lines. The term loan requires quarterly principal payments of AUD 750 plus interest with a balloon payment of AUD 21,000 due upon maturity in June 2019, and accrues interest at Bank Bill Swap Bid Rate “BBSY” plus 2.25% per annum (4.20% at September 30, 2016). As of September 30, 2016, the term had an outstanding balance of AUD 29,250 ($22,446 as of September 30, 2016) on the term loans, net of issuance costs. The revolving facility matures in June 2017 but is renewable upon mutual agreement with the bank, and accrues interest at BBSY plus 2.0% per annum (3.67% at September 30, 2016). The revolver had an outstanding balance of AUD 7,000 ($5,372 at September 30, 2016). The revolver and the term loan are both secured by substantially all of the assets of Griffon Australia and its subsidiaries. Griffon guarantees the term loan. Griffon Australia is required to maintain a certain minimum equity level and is subject to a maximum leverage ratio and a minimum fixed charges cover ratio. (h) Other long-term debt primarily consists of a loan with the Pennsylvania Industrial Development Authority with the balance consisting of capital leases. At September 30, 2016, Griffon and its subsidiaries were in compliance with the terms and covenants of its credit and loan agreements.

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- Definition The entire disclosure for long-term debt. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.22) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 + Details
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