XML 46 R39.htm IDEA: XBRL DOCUMENT
v3.19.3

NOTES PAYABLE, CAPITALIZED LEASES AND LONG-TERM DEBT (Tables) | 12 Months Ended
--- | ---
Sep. 30, 2019
Debt Disclosure [Abstract] |
Schedule of Future Minimum Lease Payments for Capital Leases | The present value of the net minimum payments on capitalized leases as of September 30, 2019 was follows:
| At September 30, 2019
Total minimum lease payments | $ | 6,928 |
Less amount representing interest payments | (382 | )
Present value of net minimum lease payments | 6,546 |
Current portion | (3,691 | )
Capitalized lease obligation, less current portion | $ | 2,855 |
Schedule of Debt | Debt at September 30, 2019 and 2018 consisted of the following:
|  |  | At September 30, 2019
|  |  | Outstanding Balance |  | Original Issuer Discount |  | Capitalized Fees & Expenses |  | Balance Sheet |  | Coupon Interest Rate
Senior note due 2022 | (a) |  | $ | 1,000,000 |  |  | $ | 867 |  |  | $ | (9,175 | ) |  | $ | 991,692 |  |  | 5.25 | %
Revolver due 2021 | (b) |  | 50,000 |  |  | — |  |  | (1,243 | ) |  | 48,757 |  |  | Variable |
Capital lease - real estate | (f) |  | 4,388 |  |  | — |  |  | (55 | ) |  | 4,333 |  |  | 5.00 | %
Non U.S. lines of credit | (g) |  | 17,576 |  |  | — |  |  | (45 | ) |  | 17,531 |  |  | Variable |
Non U.S. term loans | (g) |  | 36,977 |  |  | — |  |  | (188 | ) |  | 36,789 |  |  | Variable |
Other long term debt | (h) |  | 5,190 |  |  | — |  |  | (18 | ) |  | 5,172 |  |  | Variable |
Totals |  |  | 1,114,131 |  |  | 867 |  |  | (10,724 | ) |  | 1,104,274 |  |  |  |
less: Current portion |  |  | (10,525 | ) |  | — |  |  | — |  |  | (10,525 | ) |  |  |
Long-term debt |  |  | $ | 1,103,606 |  |  | $ | 867 |  |  | $ | (10,724 | ) |  | $ | 1,093,749 |  |  |  |
|  |  | At September 30, 2018
|  |  | Outstanding Balance |  | Original Issuer Discount |  | Capitalized Fees & Expenses |  | Balance Sheet |  | Coupon Interest Rate
Senior notes due 2022 | (a) |  | $ | 1,000,000 |  |  | $ | 1,220 |  |  | $ | (12,968 | ) |  | $ | 988,252 |  |  | 5.25 | %
Revolver due 2021 | (b) |  | 25,000 |  |  | — |  |  | (1,413 | ) |  | 23,587 |  |  | Variable |
ESOP Loans | (e) |  | 34,694 |  |  | — |  |  | (186 | ) |  | 34,508 |  |  | Variable |
Capital lease - real estate | (f) |  | 7,503 |  |  | — |  |  | (80 | ) |  | 7,423 |  |  | 5.00 | %
Non U.S. lines of credit | (g) |  | 7,951 |  |  | — |  |  | (16 | ) |  | 7,935 |  |  | Variable |
Non U.S. term loans | (g) |  | 53,533 |  |  | — |  |  | (148 | ) |  | 53,385 |  |  | Variable |
Other long term debt | (h) |  | 6,011 |  |  | — |  |  | (19 | ) |  | 5,992 |  |  | Variable |
Totals |  |  | 1,134,692 |  |  | 1,220 |  |  | (14,830 | ) |  | 1,121,082 |  |  |  |
less: Current portion |  |  | (13,011 | ) |  | — |  |  | — |  |  | (13,011 | ) |  |  |
Long-term debt |  |  | $ | 1,121,681 |  |  | $ | 1,220 |  |  | $ | (14,830 | ) |  | $ | 1,108,071 |  |  |  |
Interest expense consists of the following for 2019, 2018 and 2017.
|  |  | Year Ended September 30, 2019
|  |  | Effective Interest Rate |  | Cash Interest |  | Amort. Debt Discount |  | Amort. Deferred Cost & Other Fees |  | Total Interest Expense
Senior notes due 2022 | (a) |  | 5.66 | % |  | $ | 52,500 |  |  | $ | 270 |  |  | $ | 3,803 |  |  | $ | 56,573 |
Revolver due 2021 | (b) |  | Variable |  |  | 6,998 |  |  | — |  |  | 980 |  |  | 7,978 |
ESOP Loans | (e) |  | 6.3 | % |  | 937 |  |  | — |  |  | 186 |  |  | 1,123 |
Capital lease - real estate | (f) |  | Variable |  |  | 372 |  |  | — |  |  | 25 |  |  | 397 |
Non U.S. lines of credit | (g) |  | Variable |  |  | 19 |  |  | — |  |  | 15 |  |  | 34 |
Non U.S. term loans | (g) |  | Variable |  |  | 1,592 |  |  | — |  |  | 109 |  |  | 1,701 |
Other long term debt | (h) |  | Variable |  |  | 640 |  |  | — |  |  | 5 |  |  | 645 |
Capitalized interest |  |  |  |  |  | (385 | ) |  | — |  |  | — |  |  | (385 | )
Totals |  |  |  |  |  | $ | 62,673 |  |  | $ | 270 |  |  | $ | 5,123 |  |  | $ | 68,066 |
|  |  | Year Ended September 30, 2018
|  |  | Effective Interest Rate |  | Cash Interest |  | Amort. Debt Discount |  | Amort. Deferred Cost & Other Fees |  | Total Interest Expense
Senior notes due 2022 | (a) |  | 5.66 | % |  | $ | 52,500 |  |  | $ | 270 |  |  | $ | 3,803 |  |  | $ | 56,573 |
Revolver due 2021 | (b) |  | Variable |  |  | 3,718 |  |  | — |  |  | 565 |  |  | 4,283 |
Real estate mortgages | (d) |  | 3.3 | % |  | 349 |  |  | — |  |  | 320 |  |  | 669 |
ESOP Loans | (e) |  | 6.3 | % |  | 1,802 |  |  | — |  |  | 124 |  |  | 1,926 |
Capital lease - real estate | (f) |  | Variable |  |  | 581 |  |  | — |  |  | 25 |  |  | 606 |
Non U.S. lines of credit | (g) |  | Variable |  |  | 34 |  |  | — |  |  | 15 |  |  | 49 |
Non U.S. term loan | (g) |  | Variable |  |  | 1,420 |  |  | — |  |  | 90 |  |  | 1,510 |
Other long term debt | (h) |  | Variable |  |  | 494 |  |  | — |  |  | 7 |  |  | 501 |
Capitalized interest |  |  |  |  |  | (549 | ) |  | — |  |  | — |  |  | (549 | )
Totals |  |  |  |  |  | $ | 60,349 |  |  | $ | 270 |  |  | $ | 4,949 |  |  | $ | 65,568 |
|  |  | Year Ended September 30, 2017
|  |  | Effective Interest Rate |  | Cash Interest |  | Amort. Debt Discount |  | Amort. Deferred Cost & Other Fees |  | Total Interest Expense
Senior notes due 2022 | (a) |  | 5.55 | % |  | $ | 38,063 |  |  | $ | 270 |  |  | $ | 1,857 |  |  | $ | 40,190 |
Revolver due 2021 | (b) |  | Variable |  |  | 4,951 |  |  | — |  |  | 567 |  |  | 5,518 |
Convert. debt due 2017 | (c) |  | 8.9 | % |  | 1,167 |  |  | 1,248 |  |  | 148 |  |  | 2,563 |
Real estate mortgages | (d) |  | 2.6 | % |  | 582 |  |  | — |  |  | 58 |  |  | 640 |
ESOP Loans | (e) |  | 4.2 | % |  | 1,557 |  |  | — |  |  | 133 |  |  | 1,690 |
Capital lease - real estate | (f) |  | 5.5 | % |  | 296 |  |  | — |  |  | 25 |  |  | 321 |
Non U.S. lines of credit | (g) |  | Variable |  |  | 76 |  |  | — |  |  | 128 |  |  | 204 |
Non U.S. term loan | (g) |  | Variable |  |  | 860 |  |  | — |  |  | 67 |  |  | 927 |
Other long term debt | (h) |  | Variable |  |  | 245 |  |  | — |  |  | 10 |  |  | 255 |
Capitalized interest |  |  |  |  |  | (795 | ) |  | — |  |  | — |  |  | (795 | )
Totals |  |  |  |  |  | $ | 47,002 |  |  | $ | 1,518 |  |  | $ | 2,993 |  |  | $ | 51,513 |
Minimum payments under debt agreements for the next five years are as follows: $10,525 in 2020, $86,108 in 2021, $1,016,109 in 2022, $441 in 2023, $217 in 2024 and $731 thereafter.
(a) | On October 2, 2017, in an unregistered offering through a private placement under Rule 144A, Griffon completed the add-on offering of $275,000 principal amount of its 5.25% senior notes due 2022, at 101.0% of par, to Griffon's previously issued $125,000 principal amount of its 5.25% senior notes due 2022, at 98.76% of par, completed on May 18, 2016 and $600,000 5.25% senior notes due in 2022, at par, which was completed on February 27, 2014 (collectively the “Senior Notes”). As of September 30, 2019, outstanding Senior Notes due totaled $1,000,000; interest is payable semi-annually on March 1 and September 1. The net proceeds of the $275,000 add-on offering were used to acquire ClosetMaid with the remaining proceeds used to pay down outstanding loan borrowings under Griffon's Revolving Credit Facility (the "Credit Agreement"). The net proceeds of the previously issued $125,000 add-on offering were used to pay down outstanding revolving loan borrowings under 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 February 5, 2018, July 20, 2016 and June 18, 2014, Griffon exchanged all of the $275,000, $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 $1,010,000 on September 30, 2019 based upon quoted market prices (level 1 inputs). In connection with the issuance and exchange of the $275,000 senior notes, Griffon capitalized $8,472 of underwriting fees and other expenses; in addition to $13,329 capitalized under the previously issued $725,000 Senior Notes. All capitalized fees for the Senior Notes will amortize over the term of the notes and, at September 30, 2019, $9,175 remained to be amortized.
(b) | On March 22, 2016, Griffon amended its 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. On October 2, 2017 and on May 31, 2018, Griffon amended the Credit Agreement in connection with the ClosetMaid and the CornellCookson acquisitions, respectively to, among other things modify the net leverage covenant. On February 22, 2019, Griffon further amended the Revolving Credit Facility, to, among other things, reflect changes in the lending group and certain corresponding changes in various administrative roles under the Revolving Credit Facility, make conforming administrative and technical changes and reflect changes in law. The facility includes a letter of credit sub-facility with a limit of $50,000 and a multi-currency sub-facility of $100,000. 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 of an 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 1.75% for base rate loans and 2.75% 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. At September 30, 2019, under the Credit Agreement, there were $50,000 in outstanding borrowings; outstanding standby letters of credit were $21,281; and $278,719 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”). On July 14, 2016, Griffon announced that it would 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. On January 17, 2017, Griffon settled the convertible debt for $173,855 with $125,000 in cash, utilizing borrowings under the Credit Agreement, and $48,858, or 1,954,993 shares of common stock issued from treasury.
(d) | In September 2015 and March 2016, Griffon entered into mortgage loans in the amount of $32,280 and $8,000, respectively, that were due to mature in September 2025 and April 2018, respectively. The mortgage loans were secured and collateralized by four properties occupied by Griffon's subsidiaries and were guaranteed by Griffon. The loans had an interest at a rate of LIBOR plus 1.50%. The loans were paid off during 2018.
(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. During 2017, Griffon's ESOP purchased 621,875 shares of common stock for a total of $10,908 or $17.54 per share, under a borrowing line that has now been fully utilized. On June 30, 2017, the Term Loan and Line Note were combined into a single Term Loan. The Term Loan bears interest at LIBOR plus 2.91%. The Term Loan required quarterly principal payments of $569 with a balloon payment due at maturity. As a result of the special cash dividend of $1.00 per share, paid on April 16, 2018, the outstanding balance of the Term Loan was reduced by $5,705. The Term Loan was secured by shares purchased with the proceeds of the loan and with a lien on a specific amount of Griffon assets (which ranked pari passu with the lien granted on such assets under the Credit Agreement) and was guaranteed
by Griffon. On March 13, 2019, the ESOP Term Loan was refinanced with an internal loan from Griffon which was funded with cash and a draw on its $350,000 credit facility. The internal loan interest rate is fixed at 2.91%, matures in June 2033 and requires quarterly payments of principal, currently $569, and interest. The internal loan is secured by shares purchased with the proceeds of the loan. The amount outstanding on the internal loan at September 30, 2019 was $32,418.
(f) | Two Griffon subsidiaries have capital leases outstanding for real estate located in Troy, Ohio and Ocala, Florida. The leases mature in 2021 and 2020, respectively, and bear interest at fixed rates of approximately 5.0% and 8.0%, respectively. The Troy, Ohio lease is secured by a mortgage on the real estate and is guaranteed by Griffon. The Ocala, Florida lease contains two five-year renewal options. As of September 30, 2019, $4,333 was outstanding, net of issuance costs.
(g) | In November 2012, Garant G.P. (“Garant”) entered into a CAD 15,000 ($11,315 as of September 30, 2019) revolving credit facility. The facility accrues interest at LIBOR (USD) or the Bankers Acceptance Rate (CDN) plus 1.3% per annum (3.38% LIBOR USD and 3.13% Bankers Acceptance Rate CDN as of September 30, 2019). The revolving facility matures in October 2022. Garant is required to maintain a certain minimum equity. As of September 30, 2019, there were no borrowings under the revolving credit facility with CAD 15,000 ($11,315 as of September 30, 2019) available for borrowing.
In July 2016, Griffon Australia Holdings Pty Ltd and its Australian subsidiaries ("Griffon Australia") 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. In December 2016, the amount available under the revolver was increased from AUD 10,000 to AUD 20,000 and, in March 2017 and September 2017, the term loan commitment was increased by AUD 5,000 and AUD 15,000, respectively. In March 2019, the term commitment was reduced by AUD 10,000 with proceeds from a receivable purchase agreement in the amount of AUD 10,000. The term loan requires quarterly principal payments of AUD 1,250 plus interest with a balloon payment of AUD 13,375 due upon maturity in March 2022, and accrues interest at Bank Bill Swap Bid Rate “BBSY” plus 1.90% per annum (2.85% at September 30, 2019). As of September 30, 2019, the term had an outstanding balance of AUD 25,875 ($17,492 as of September 30, 2019). The revolving facility and receivable purchase facility mature in March 2020, but are renewable upon mutual agreement with the lender. The revolving facility and receivable purchase facility accrue interest at BBSY plus 1.8% and 1.0%, respectively, per annum (2.81% and 2.01%, respectively, at September 30, 2019). At September 30, 2019, there were AUD 16,000 ($10,816 at September 30, 2019) under the revolver and the receivable purchase facility had an outstanding balance of AUD 10,000 ($6,760 at September 30, 2019). The revolver, receivable purchase facility and the term loan are all secured by substantially all of the assets of Griffon Australia and its subsidiaries. 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. In July 2018, the AMES Companies UK Ltd and its subsidiaries ("Ames UK") entered into a GBP 14,000 term loan, GBP 4,000 mortgage loan and GBP 5,000 revolver. The term loan and mortgage loan require quarterly principal payments of GBP 350 and GBP 83 plus interest, respectively, and have balloon payments due upon maturity, July 2023, of GBP 7,000 and GBP 2,333, respectively. The Term Loan and Mortgage Loans accrue interest at the GBP LIBOR Rate plus 2.25% and 1.8%, respectively (3.01% and 2.56% at September 30, 2019, respectively). The revolving facility matures in June 2020, but is renewable upon mutual agreement with the lender, and accrues interest at the Bank of England Base Rate plus 1.5% (2.25% as of September 30, 2019). As of September 30, 2019, the revolver had no outstanding balance while the term and mortgage loan balances amounted to GBP 15,831 ($19,485 as of September 30, 2019). The revolver and the term loan are both secured by substantially all of the assets of AMES UK and its subsidiaries. AMES UK is subject to a maximum leverage ratio and a minimum fixed charges cover ratio. An invoice discounting arrangement was canceled and replaced by the above loan facilities. (h) Other long-term debt primarily consists of a loan with the Pennsylvania Industrial Development Authority, with the balance consisting of capital leases.

X
- References No definition available. + Details
Name: | us-gaap_DebtDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of information pertaining to short-term and long-debt instruments or arrangements, including but not limited to identification of terms, features, collateral requirements and other information necessary to a fair presentation. + References No definition available. + Details
Name: | us-gaap_ScheduleOfDebtTableTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of future minimum lease payments as of the date of the latest balance sheet presented, in aggregate and for each of the five years succeeding fiscal years, with separate deductions from the total for the amount representing executor costs, including any profit thereon, included in the minimum lease payments and for the amount of the imputed interest necessary to reduce the net minimum lease payments to present value. + References Reference 1: http://fasb.org/us-gaap/role/ref/otherTransitionRef -Publisher FASB -Name Accounting Standards Codification -Topic 840 -SubTopic 30 -Section 50 -Paragraph 1 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=84164817&loc=d3e45280-112737 + Details
Name: | us-gaap_ScheduleOfFutureMinimumLeasePaymentsForCapitalLeasesTableTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration