XML 33 R20.htm IDEA: XBRL DOCUMENT
v3.21.2

INCOME TAXES | 12 Months Ended
--- | ---
Sep. 30, 2021
Income Tax Disclosure [Abstract] |
INCOME TAXES | INCOME TAXES Income taxes have been based on the following components of Income before taxes from continuing operations:
| For the Years Ended September 30,
| 2021 |  | 2020 |  | 2019
Domestic | $ | 57,059 |  |  | $ | 28,530 |  |  | $ | 23,437 |
Non-U.S. | 54,120 |  |  | 40,175 |  |  | 22,786 |
| $ | 111,179 |  |  | $ | 68,705 |  |  | $ | 46,223 |
Provision (benefit) for income taxes on income was comprised of the following from continuing operations:
| For the Years Ended September 30,
| 2021 |  | 2020 |  | 2019
Current | $ | 26,177 |  |  | $ | 24,140 |  |  | $ | 26,218 |
Deferred | 13,763 |  |  | 2,122 |  |  | (5,465) |
Total | $ | 39,940 |  |  | $ | 26,262 |  |  | $ | 20,753 |
U.S. Federal | $ | 14,577 |  |  | $ | 7,897 |  |  | $ | 8,973 |
State and local | 7,132 |  |  | 7,223 |  |  | 5,499 |
Non-U.S. | 18,231 |  |  | 11,142 |  |  | 6,281 |
Total provision | $ | 39,940 |  |  | $ | 26,262 |  |  | $ | 20,753 |
Differences between the effective income tax rate applied to Income before taxes from continuing operations and the U.S. Federal income statutory rate were as follows:
| For the Years Ended September 30,
| 2021 |  | 2020 |  | 2019
U.S. Federal income tax provision rate | 21.0 | % |  | 21.0 | % |  | 21.0 | %
State and local taxes, net of Federal benefit | 4.7 | % |  | 7.8 | % |  | 9.1 | %
Non-U.S. taxes - foreign permanent items and taxes | 3.0 | % |  | 4.2 | % |  | 3.1 | %
Change in tax contingency reserves | 0.2 | % |  | 0.2 | % |  | (1.1) | %
Impact of foreign rate change on deferred tax balances | 2.8 | % |  | — | % |  | — | %
Tax Reform-Repatriation of Foreign Earnings and GILTI | 0.4 | % |  | 0.3 | % |  | 1.6 | %
Change in valuation allowance | 0.4 | % |  | (2.6) | % |  | 5.0 | %
Other non-deductible/non-taxable items, net | 0.4 | % |  | 1.3 | % |  | 5.9 | %
Non-deductible officer's compensation | 4.0 | % |  | 5.4 | % |  | 8.2 | %
Research and U.S. foreign tax credits | (0.1) | % |  | 1.4 | % |  | (6.4) | %
Share based compensation | (2.0) | % |  | — | % |  | 0.6 | %
Other | 1.1 | % |  | (0.8) | % |  | (2.1) | %
Effective tax provision (benefit) rate | 35.9 | % |  | 38.2 | % |  | 44.9 | %
The tax effect of temporary differences that give rise to future deferred tax assets and liabilities are as follows:
| At September 30,
| 2021 |  | 2020
Deferred tax assets: |  |  |
Bad debt reserves | $ | 2,066 |  |  | $ | 3,980 |
Inventory reserves | 11,298 |  |  | 9,371 |
Deferred compensation (equity compensation and defined benefit plans) | 10,598 |  |  | 18,904 |
Compensation benefits | 5,269 |  |  | 5,499 |
Insurance reserve | 2,183 |  |  | 1,918 |
Warranty reserve | 3,761 |  |  | 3,981 |
Lease liabilities | 39,378 |  |  | 43,045 |
Net operating loss | 10,706 |  |  | 9,618 |
Tax credits | 7,198 |  |  | 7,031 |
Capital loss carryback | 2,533 |  |  | 2,205 |
Other reserves and accruals | 7,474 |  |  | 6,094 |
| 102,464 |  |  | 111,646 |
Valuation allowance | (10,425) |  |  | (9,824) |
Total deferred tax assets | 92,039 |  |  | 101,822 |
Deferred tax liabilities: |  |  |
Goodwill and intangibles | (46,585) |  |  | (44,051) |
Property, plant and equipment | (53,817) |  |  | (48,172) |
Right-of-use assets | (38,511) |  |  | (41,747) |
Other | (1,232) |  |  | (634) |
Total deferred tax liabilities | (140,145) |  |  | (134,604) |
Net deferred tax liabilities | $ | (48,106) |  |  | $ | (32,782) |
The components of the net deferred tax liability, by balance sheet account, were as follows:
| At September 30,
| 2021 |  | 2020
Other assets | $ | 323 |  |  | $ | 614 |
Other liabilities | (49,289) |  |  | (34,356) |
Liabilities of discontinued operations | 860 |  |  | 960 |
Net deferred liability | $ | (48,106) |  |  | $ | (32,782) |
In 2021, the increase in the valuation allowance of $601 is primarily the result of foreign net operating losses and generation of state tax credits which will not be recognized, partially offset by the expiration of foreign tax credits during the year. In 2020, the decrease in valuation allowance of $999 is primarily due to the expiration of foreign tax credits during the year. At both September 30, 2021 and 2020, Griffon has a policy election to indefinitely reinvest the undistributed earnings of foreign subsidiaries with operations outside the U.S. As of September 30, 2021, we have approximately $143,058 of unremitted earnings of non-U.S. subsidiaries. The Company generates substantial cash flow in the U.S. and does not have a current need for the cash to be returned to the U.S. from the foreign entities. The Company continues to reinvest the undistributed earnings of its foreign subsidiaries and may be subject to additional foreign withholding taxes and U.S. state income taxes if it reverses its indefinite reinvestment assertion in the future. Outside basis differences were impractical to account for at this time and are currently considered as being permanent in duration. At September 30, 2021, Griffon had no loss carryforwards for U.S. tax purposes and $8,332 for non-U.S. tax purposes. At September 30, 2020, Griffon had no loss carryforwards for U.S. tax purposes and $9,671 for non-U.S. tax purposes. The non-U.S. loss carryforwards expire in varying amounts beginning in 2027 to indefinite carryfoward. At September 30, 2021 and 2020, Griffon had state and local loss carryforwards of $139,894 and $124,191, respectively, which expire in varying amounts through 2040. At September 30, 2021 and 2020, Griffon had federal tax credit carryforwards of $5,933 and $5,954, respectively, which expire in varying amounts through 2035. At September 30, 2021 and 2020, Griffon had capital loss carryovers for U.S. tax purposes of $10,327 and $10,500, respectively, which expire in varying amounts through 2026. The losses were generated in September 30, 2021 and September 30, 2019 tax years. The carryovers are available for three-year carryback or five-year carryforward periods. We believe it is more likely than not that the benefit from certain federal and state tax attributes will not be realized. In recognition of this risk, we have provided a valuation allowance as of September 30, 2021 and 2020 of $10,425 and $9,824, respectively, on the deferred tax assets. As it becomes probable that the benefits of these attributes will be realized, the reversal of valuation allowance will be recognized as a reduction of income tax expense. If certain substantial changes in Griffon's ownership occur, there would be an annual limitation on the amount of carryforward(s) that can be utilized. Griffon files U.S. Federal, state and local tax returns, as well as applicable returns in Canada, Australia, U.K. and other non-U.S. jurisdictions. Griffon’s U.S. Federal income tax returns are no longer subject to income tax examination for years before 2015. Griffon's major U.S. state and other non-U.S. jurisdictions are no longer subject to income tax examinations for years before 2013. Various U.S. state and statutory tax audits are currently underway. The following is a roll forward of unrecognized tax benefits:
Balance at September 30, 2019 | $ | 4,061 |
Additions based on tax positions related to the current year | 125 |
Additions based on tax positions related to prior years | 20 |
Reductions based on tax positions related to prior years | (3) |
Lapse of Statutes | (23) |
Balance at September 30, 2020 | $ | 4,180 |
Additions based on tax positions related to the current year | 180 |
Additions based on tax positions related to prior years | 24 |
Lapse of Statutes | (7) |
Settlements | — |
Balance at September 30, 2021 | $ | 4,377 |
If recognized, the amount of potential tax benefits that would impact Griffon’s effective tax rate is $1,106. Griffon recognizes potential accrued interest and penalties related to unrecognized tax benefits in income tax expense. At September 30, 2021 and 2020, the combined amount of accrued interest and penalties related to tax positions taken or to be taken on Griffon’s tax returns and recorded as part of the reserves for uncertain tax positions was $100 and $77, respectively. Griffon cannot reasonably estimate the extent to which existing liabilities for uncertain tax positions may increase or decrease within the next twelve months as a result of the progression of ongoing tax audits or other events. Griffon believes that it has adequately provided for all open tax years by tax jurisdiction.

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

X
- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration