79429Cover_2014Griffon_v2.indd December 12, 2014 6:29 PM spine=0.27” www.griffoncorp.com 2014 Annual Report 79429Cover_2014Griffon_v2.indd 2-3 12/12/14 6:29 PM LETTER TO SHAREHOLDERS Griffon Corporation made significant progress in 2014 as we began to reap the benefits of our efficiency initiatives. Our results reflect improved operating performance throughout our businesses. As gratifying as 2014’s progress has been, we believe our strategy will drive accelerated earnings in the coming years. Efficiency Programs Drive Operating Improvement in 2014 By almost any measure, 2014 performance was amongst the strongest in Griffon’s history. We had revenue of $2.0 billion and segment adjusted EBITDA of $191 million, an increase of 5% over the prior year. We reported normalized EPS of $0.51 per share, which represents a 76% increase over the prior year. This performance is reflective of both the earnings power of our businesses and the collective hard work of our team. Commitment to Delivering Value to Shareholders We are committed to building long-term value for our shareholders. To enhance our balance sheet, we completed a debt financing which lowered our cost of capital and extended our debt maturity to 2022. During the year, we repurchased a total of 6.4 million shares of our common stock for a total of $73.2 million. Since August 2011, we have repurchased a total of 11.4 million shares for $122 million. Over the past few years, we have steadily increased our dividend, from a quarterly dividend of $0.02 per share in 2012 to $0.04 per share for our most recent quarterly dividend. We intend to continue deploying free cash to shareholders through a combination of share repurchases and dividends, and believe we are positioned to deliver compelling shareholder returns in 2015 and beyond. Home and Building Products The housing industry maintained a positive trajectory within its multi-year recovery, supporting continued improvement in our Home and Building Products segment results. 2014 revenue increased 15% to $979 million compared to the prior year, and segment adjusted EBITDA improved 10% to $77.2 million. Clopay Building Products (“CBP”), America’s Favorite Doors௡, gained momentum in executing its profitable growth strategy, leading to another strong year in 2014. CBP’s continued investments in customer partnerships, premium level products, and branding have provided a valuable solution for our customers’ success in the marketplace. Recent innovations such as the MyDoor௡ mobile web application have extended this partnership through to the end consumer, further maximizing our collective value proposition. CBP’s highly successful and award winning ‘imagine™’ marketing campaign projected a unified theme in branding, advertising, social media and web presence, inviting consumers to imagine and design the perfect door for their home. In 2014, CBP continued to leverage past investments in manufacturing, supply chain and information technology, improving service, quality and operational efficiencies. CBP’s potent growth strategy integrates extraordinary partners, great brands, innovative products, and exceptional fulfillment to enhance our industry leadership position and provide enduring value to our shareholders. AMES, founded in 1774, is North America’s largest manufacturer of lawn and garden tools and the world’s largest manufacturer of snow tools. AMES performed well in all of its product categories. Improvement was driven by new leadership and increased demand across the home center and industrial channels. Snow tool volume expanded driven by a return to a normal winter season after back-to-back years of below normal snowfall in both the U.S. and Canada. Also in 2014, AMES launched a new branding strategy with increased emphasis on Razor-Back௡ professional tools, along with the rollout of the new AMES௡ garden tool program with key customers. AMES executed several efficiency initiatives during the year, including plant consolidation and investments in new equipment to meet increased demand for its products in North America. We expect continued improvement in operational efficiencies due to consolidation and brand position, and project $10 million in annualized savings as a result of these initiatives beginning in calendar year 2015. Acquisitions were also an important part of our performance in 2014 as Southern Patio, which was acquired in 2012, continues to lead the market with innovative designs and materials that have enhanced our industry leadership position in the planter category. We also completed two acquisitions in 2014: Northcote Pottery, the leading supplier of planters in Australia, and Cyclone Tools, the leading Australian brand in lawn and garden tools, with a strong position in the hand tool category. These milestones facilitate continued efficiency improvements, a global market presence and a platform for growth. Plastics Clopay Plastics delivered much improved results despite continued resin headwinds and soft macroeconomic conditions in Latin America and Europe. Segment level sales of $593 million increased 5% as a result of increased volume, improved mix and higher resin prices. Segment adjusted EBITDA of $56.3 million increased 17% as a result of higher revenues, improved product mix and a lower cost structure. We improved our top line and product mix by capturing opportunities in growing, value-added elastic laminates and printed films by offering superior products and services at reasonable prices. This allowed us to continue to rationalize underperforming business, with no net revenue impact and improve our bottom line. Plastics enhanced its competitive position by lowering our cost structure through improved operating efficiencies and supply chain initiatives, while significantly reducing working capital. We benefitted from investments made over the past several years in cost saving initiatives and our continuous improvement culture. We also strengthened our organization with key personnel additions in Technology & Innovation. This has resulted in a robust pipeline of next generation products to meet the ever- changing needs of the markets we serve. We will continue to make investments in facilities, assets and technologies to continue improving our profitability while enhancing our industry leadership position. Telephonics Our defense electronics business continues to provide its customers with innovative, advanced technology solutions around the world. Despite the persistent pressure on U.S. Defense budgets, sales of Intelligence, Surveillance, Reconnaissance, and Communication products continue to gain momentum both domestically and internationally. The U.S. Navy’s fielding of the MH-60R Multi-Mission Helicopter with the AN/APS-153 radar has demonstrated Telephonics’ strength in the maritime surveillance radar area. This recognized superior performance positions Telephonics well in its pursuit of the Navy’s next generation maritime surveillance platform, the MH-XX. The recent award of a contract by the Federal Aviation Administration (“FAA”) for the Common Terminal Digitizer system in support of the FAA’s initiative to upgrade airport surveillance radar throughout the U.S. is a significant win, again positioning Telephonics for future orders in this growing market worldwide. By leveraging its broad experience in airborne intercommunication systems (“ICS”), Telephonics is also making excellent inroads into the ground vehicle ICS market on domestic and international military vehicle upgrade programs. In 2014, Telephonics had revenue of $419 million, decreasing 8% from the prior year due to the completion of the ICREW electronic warfare program. Excluding the effects of the ICREW program, core Telephonics revenue was stable year over year. Impressively, despite the difficult defense budget environment, Telephonics ended 2014 with funded backlog at a record level of $494 million, an 11% increase over the $444 million in funded backlog at the end of last year. As expected, segment adjusted EBITDA was $57.5 million, or 13.7% of revenue, compared to $63.2 million in the prior year. Telephonics has a strong legacy and proven track record with its investments in Research and Development. We will maintain this commitment with further funding to support long-term strategic growth initiatives. Building the Momentum in the Year Ahead As we enter 2015, we have a lot to be excited about. From our solid foundation, we expect to see continued improvement in the year ahead. Our efforts are supported by a promising housing market along with greater visibility in our defense and plastics businesses. We remain committed to driving shareholder value through investment in organic growth initiatives, complementary acquisitions, and the return of cash through share repurchases and dividends. While I am pleased with the performance levels achieved in 2014, we are just starting to realize the full earnings potential of our businesses. Our success is driven by the dedication and perseverance of our global workforce. I would like to recognize the entire Griffon team for their contributions to an excellent year and a very bright future. Yours sincerely, Ronald J. Kramer Chief Executive Officer (This Page Intentionally Left Blank) UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K ࠚ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the year ended September 30, 2014 or Ⅺ TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission