Griffon (GFF) risk factors, FY2024 10-K

Risks Related to Our Business

1. 01Current worldwide economic uncertainty and market volatility could adversely affect Griffon’s businesses
2. 02Adverse trends and general economic conditions, especially those that relate to construction and renovation, will impact Griffon’s business
3. 03Griffon is exposed to fluctuations in inflation, which could negatively affect its business, financial condition and results of operations
4. 04Griffon operates in highly competitive industries and may be unable to compete effectively
5. 05The loss of large customers can harm financial results
6. 06Reliance on third party suppliers and manufacturers may impair the ability of HBP and CPP to meet their customer demands
7. 07If Griffon is unable to obtain raw materials for products at favorable prices it could adversely impact operating performance
8. 08CPP is subject to risks from sourcing from international locations, especially China
9. 09The expansion of CPP’s global sourcing strategy may not achieve its intended results
10. 10A future pandemic could adversely impact our results of operations
11. 11HBP’s business is driven by renovation and construction during warm weather, which is historically at reduced levels during the winter months, generally in our second quarter. In 2024, 52% of CPP's' sales occurred during the second and third quarters compared to 54% in 2023 and 58% in 2022
12. 12Unionized employees could strike or participate in a work stoppage
13. 13Griffon’s operations and reputation may be adversely impacted if our information technology (IT) systems, or the IT systems of third parties with whom we do business, fail to perform adequately or if we or such third parties are the subject of a data breach or cyber-attack
14. 14Griffon may be unable to implement its acquisition growth strategy, which may result in added expenses without a commensurate increase in revenue and income, and divert management’s attention
15. 15short time period, which could occur again; the risks relating to integration of an acquisition may be exacerbated when numerous acquisitions are consummated in a short time period

Risks Related to Our Indebtedness

1. 16Compliance with restrictions and covenants in Griffon’s debt agreements may limit its ability to take corporate actions
2. 17Griffon may be unable to raise additional financing if needed
3. 18Griffon’s indebtedness and interest expense could limit cash flow and adversely affect operations and Griffon’s ability to make full payment on outstanding debt

Risk Related to Our Common Stock

1. 19Griffon has the ability to issue additional equity securities, which would lead to dilution of issued and outstanding common stock
2. 20Each of Griffon's businesses faces risks related to the disruption of its primary manufacturing facilities
3. 21Manufacturing capacity constraints or increased manufacturing costs may have a material adverse effect on Griffon's business, results of operations, financial condition and cash flows
4. 22If HBP and CPP do not continue to develop and maintain leading brands or realize the anticipated benefits of advertising and promotion spend, its operating results may suffer
5. 23Griffon may be required to record impairment charges for goodwill and indefinite-lived intangible assets
6. 24If Griffon's subcontractors or suppliers fail to perform their obligations, Griffon's performance and ability to win future business could be harmed
7. 25Griffon’s companies must continually improve existing products, design and sell new products and invest in research and development in order to compete effectively
8. 26The loss of certain key officers or employees could adversely affect Griffon’s business
9. 27Griffon may not be able to protect its proprietary rights
10. 28Griffon or its suppliers may inadvertently infringe on, or may be accused of infringing on, proprietary rights of others
11. 29Griffon is exposed to product liability and warranty claims
12. 30Griffon has been, and may in the future be, subject to claims and liabilities under environmental laws and regulations
13. 31Changes in income tax laws and regulations or exposure to additional income tax liabilities could adversely affect profitability
14. 32Actions taken by activist shareholders could be disruptive and costly and may conflict with or disrupt the strategic direction of our business