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REPORTABLE SEGMENTS | 12 Months Ended
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Sep. 30, 2019
Segment Reporting [Abstract] |
REPORTABLE SEGMENTS | REPORTABLE SEGMENTS In the fourth quarter of fiscal 2019, Griffon modified its reportable segment structure to provide investors with improved visibility after a series of portfolio repositioning actions which included the divestiture of the Plastics business, the acquisition of ClosetMaid and its subsequent integration into AMES, and the acquisition of CornellCookson by Clopay. The prior year amounts have been recast to reflect the change in the reporting segments in the current year. Griffon now reports it operations through three reportable segments from continuing operations, as follows:
• | Consumer and Professional Products ("CPP") conducts its operations through AMES. Founded in 1774, AMES is the leading North American manufacturer and a global provider of branded consumer and professional tools and products for home storage and organization, landscaping, and enhancing outdoor lifestyles. CPP sells products globally through a portfolio of leading brands including True Temper, AMES, and ClosetMaid.
• | Home and Building Products ("HBP") conducts its operations through Clopay. Founded in 1964, Clopay is the largest manufacturer and marketer of garage doors and rolling steel doors in North America. Residential and commercial sectional garage doors are sold through professional dealers and leading home center retail chains throughout North America under the brands Clopay, Ideal, and Holmes. Rolling steel door and grille products designed for commercial, industrial, institutional, and retail use are sold under the CornellCookson brand.
• | Defense Electronics conducts its operations through Telephonics Corporation ("Telephonics"), founded in 1933, a globally recognized leading provider of highly sophisticated intelligence, surveillance and communications solutions for defense, aerospace and commercial customers.
On November 16, 2017, Griffon announced it entered into a definitive agreement to sell Plastics and on February 6, 2018, completed the sale to Berry for $465,000, net of certain post-closing adjustments. As a result, Griffon classified the results of operations of the Plastics business as discontinued operations in the Consolidated Statements of Operations for all periods presented and classified the related assets and liabilities associated with the discontinued operations in the consolidated balance sheets. All results and information presented exclude Plastics unless otherwise noted. See Note 7, Discontinued Operations to the Notes of the Financial Statements. On October 2, 2017, Griffon acquired ClosetMaid. ClosetMaid, founded in 1965, is a leading North American manufacturer and marketer of wood and wire closet organization, general living storage and wire garage storage products and sells to some of the largest home center retail chains, mass merchandisers, and direct-to-builder professional installers in North America. The accounts of ClosetMaid, affected for preliminary adjustments to reflect fair market values assigned to assets purchased and liabilities assumed, are included in the Company’s consolidated financial statements from the date of acquisition. On June 4, 2018, Clopay acquired CornellCookson, a leading US manufacturer and marketer of rolling steel door and grille products designed for commercial, industrial, institutional and retail use. The accounts, affected for preliminary adjustments to reflect fair market values assigned to assets purchased and liabilities assumed, and results of operations of CornellCookson, are included in the Company’s consolidated financial statements from the date of acquisition. Information on Griffon’s reportable segments from continuing operations is as follows:
| For the Years Ended September 30,
REVENUE | 2019 |  | 2018 |  | 2017
Consumer and Professional Products | $ | 1,000,608 |  |  | $ | 953,612 |  |  | $ | 545,269 |
Home and Building Products | 873,640 |  |  | 697,969 |  |  | 568,001 |
Defense Electronics | 335,041 |  |  | 326,337 |  |  | 411,727 |
Total consolidated net sales | $ | 2,209,289 |  |  | $ | 1,977,918 |  |  | $ | 1,524,997 |
Griffon evaluates performance and allocates resources based on each segment's operating results from continuing operations before interest income and expense, income taxes, depreciation and amortization, unallocated amounts (primarily corporate overhead), restructuring charges, loss on debt extinguishment and acquisition related expenses, as well as other items that may affect comparability, as applicable (“Segment Adjusted EBITDA”). The following table provides a reconciliation of Segment Adjusted EBITDA to Income before taxes and discontinued operations:
| For the Years Ended September 30,
| 2019 |  | 2018 |  | 2017
Segment Adjusted EBITDA: |  |  |  |  |  |  |  |
Consumer and Professional Products | $ | 90,677 |  |  | $ | 77,061 |  |  | $ | 45,002 |
Home and Building Products | 120,161 |  |  | 100,339 |  |  | 81,764 |
Defense Electronics | 35,104 |  |  | 36,063 |  |  | 45,931 |
Segment Adjusted EBITDA | 245,942 |  |  | 213,463 |  |  | 172,697 |
Unallocated amounts, excluding depreciation | (46,302 | ) |  | (45,343 | ) |  | (41,918 | )
Net interest expense | (67,260 | ) |  | (63,871 | ) |  | (51,449 | )
Depreciation and amortization | (61,848 | ) |  | (55,803 | ) |  | (47,878 | )
Acquisition contingent consideration | 1,646 |  |  | — |  |  | — |
Acquisition costs | — |  |  | (7,597 | ) |  | (9,617 | )
Special dividend charges | — |  |  | (3,220 | ) |  | — |
Cost of life insurance benefit | — |  |  | (2,614 | ) |  | — |
Secondary equity offering costs | — |  |  | (1,205 | ) |  | — |
Contract settlement charges | — |  |  | — |  |  | (5,137 | )
Income before taxes from continuing operations | $ | 72,178 |  |  | $ | 33,810 |  |  | $ | 16,698 |
| For the Years Ended September 30,
DEPRECIATION and AMORTIZATION | 2019 |  | 2018 |  | 2017
Segment: |  |  |  |  |
Consumer and Professional Products | $ | 32,289 |  |  | $ | 30,816 |  |  | $ | 25,207 |
Home and Building Products | 18,334 |  |  | 13,717 |  |  | 11,340 |
Defense Electronics | 10,667 |  |  | 10,801 |  |  | 10,851 |
Total segment depreciation and amortization | 61,290 |  |  | 55,334 |  |  | 47,398 |
Corporate | 558 |  |  | 469 |  |  | 480 |
Total consolidated depreciation and amortization | $ | 61,848 |  |  | $ | 55,803 |  |  | $ | 47,878 |
CAPITAL EXPENDITURES |  |  |  |  |  |  |  |
Segment: |  |  |  |  |  |  |  |
Consumer and Professional Products | $ | 17,828 |  |  | $ | 23,040 |  |  | $ | 14,259 |
Home and Building Products | 16,498 |  |  | 13,547 |  |  | 10,217 |
Defense Electronics | 10,492 |  |  | 10,941 |  |  | 8,204 |
Total segment | 44,818 |  |  | 47,528 |  |  | 32,680 |
Corporate | 543 |  |  | 2,610 |  |  | 2,257 |
Total consolidated capital expenditures | $ | 45,361 |  |  | $ | 50,138 |  |  | $ | 34,937 |
ASSETS | At September 30, 2019 |  | At September 30, 2018 |  | At September 30, 2017
Segment assets: |  |  |  |  |  |  |  |
Consumer and Professional Products | $ | 1,070,510 |  |  | $ | 1,221,143 |  |  | $ | 879,452 |
Home and Building Products | 571,216 |  |  | 410,488 |  |  | 204,651 |
Defense Electronics | 347,575 |  |  | 346,907 |  |  | 343,445 |
Total segment assets | 1,989,301 |  |  | 1,978,538 |  |  | 1,427,548 |
Corporate | 82,429 |  |  | 103,112 |  |  | 71,980 |
Total continuing assets | 2,071,730 |  |  | 2,081,650 |  |  | 1,499,528 |
Assets of discontinued operations | 3,209 |  |  | 3,240 |  |  | 374,013 |
Consolidated total | $ | 2,074,939 |  |  | $ | 2,084,890 |  |  | $ | 1,873,541 |
Disaggregation of Revenue Revenue from contracts with customers is disaggregated by end markets, segments and geographic location, as it more accurately depicts the nature and amount of the Company’s revenue.
| For the Year Ended September 30, 2019
Residential repair and remodel | $ | 140,369 |
Retail | 528,279 |
Residential new construction | 58,709 |
Industrial | 45,129 |
International excluding North America | 228,122 |
Total Consumer and Professional Products | 1,000,608 |
Residential repair and remodel | 439,287 |
Commercial construction | 335,339 |
Residential new construction | 99,014 |
Total Home and Building Products | 873,640 |
U.S. Government | 211,405 |
International | 105,705 |
Commercial | 17,931 |
Total Defense Electronics | 335,041 |
Total Consolidated Revenue | $ | 2,209,289 |
The following table presents revenue disaggregated by geography based on the location of the Company's customer:
| For the Year Ended September 30, 2019
Revenue by Geographic Area - Destination | Consumer and Professional Products | Home and Building Products | Defense Electronics | Total
United States | $ | 690,772 |  | $ | 820,396 |  | $ | 226,095 |  | $ | 1,737,263 |
Europe | 63,284 |  | 109 |  | 36,915 |  | 100,308 |
Canada | 72,327 |  | $ | 39,472 |  | 10,568 |  | 122,367 |
Australia | 165,291 |  | 16 |  | 3,712 |  | 169,019 |
All other countries | 8,934 |  | $ | 13,647 |  | 57,751 |  | 80,332 |
Consolidated revenue | $ | 1,000,608 |  | $ | 873,640 |  | $ | 335,041 |  | $ | 2,209,289 |
Segment information by geographic region for 2018 and 2017 was as follows:
| For the Years Ended September 30,
REVENUE BY GEOGRAPHIC AREA - DESTINATION | 2018 |  | 2017
United States | $ | 1,521,187 |  |  | $ | 1,164,958 |
Europe | 102,814 |  |  | 67,048 |
Canada | 123,341 |  |  | 106,080 |
Australia | 166,980 |  |  | 124,757 |
All other countries | 63,596 |  |  | 62,154 |
Consolidated revenue | $ | 1,977,918 |  |  | $ | 1,524,997 |
| For the Years Ended September 30,
LONG-LIVED ASSETS BY GEOGRAPHIC AREA | 2019 |  | 2018 |  | 2017
United States | $ | 576,930 |  |  | $ | 612,294 |  |  | $ | 358,795 |
Canada | 32,013 |  |  | 33,884 |  |  | 36,383 |
Australia | 30,228 |  |  | 33,288 |  |  | 35,917 |
United Kingdom | 46,550 |  |  | 24,892 |  |  | 4,144 |
Mexico | 6,876 |  |  | 7,017 |  |  | — |
All other countries | 1,368 |  |  | 1,975 |  |  | 2,023 |
Consolidated long-lived assets, net | $ | 693,965 |  |  | $ | 713,350 |  |  | $ | 437,262 |
As a percentage of consolidated revenue from continuing operations, CPP sales to The Home Depot approximated 28% in 2019, 29% in 2018 and 28% in 2017; HBP sales to The Home Depot approximated 13% in 2019, 16% in 2018, and 18% in 2017; and Defense Electronics aggregate sales to the United States Government and its agencies approximated 10% in both 2019 and 2018, and 18% in 2017.

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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