Griffon Corporation Announces Operating Results for the First Quarter of Fiscal 2005 and Contract Awards to Supply Radar Systems

Griffon Corporation Announces Operating Results for the First
Quarter of Fiscal 2005 and Contract Awards to Supply Radar Systems for the U.S.
Coast Guard's Deepwater Program 


JERICHO, N.Y., Feb. 8  /PRNewswire-FirstCall/ -- Griffon Corporation (NYSE:
GFF) today reported operating results for the first quarter of fiscal 2005,
ended December 31, 2004.  Net sales for the quarter increased to $340,174,000,
up from $338,502,000 for the first quarter of fiscal 2004.  Income before
income taxes was $19,555,000 compared to $25,658,000 last year.  Net income was
$10,452,000 in the current quarter compared to $13,115,000 last year. Diluted
earnings per share for the quarter was $.34 compared to $.41 in last year's
first quarter.

Operating results in the first quarter of fiscal 2005 reflected continued
increases in raw material costs for both the specialty plastic films and garage
doors segments.  Higher selling prices in both segments moderated the effect of
the raw material cost increases, but did not fully recover them.  In garage
doors, selling price increases to pass along increased raw material (steel)
costs and favorable product mix resulted in higher net sales.  Garage doors'
profitability was negatively impacted primarily by the net effect of the raw
material cost increases.  Specialty plastic films experienced reduced unit
volume related to product design changes by its major customer that were partly
offset by higher selling prices due to raw material (resin) cost increases and
the effect of a weaker U.S. dollar on foreign operations. Specialty plastic
films' profitability in the quarter was unfavorably impacted by the unit volume
reduction and the effect of the raw material cost increases.  Lower sales and
profits in installation services reflected the effects of increased
competition, a weaker construction environment in certain of its markets and
narrower margins due to higher costs of products with significant steel content
(garage doors and fireplaces).  The electronic information and communication
systems segment, Telephonics, reflected higher sales and profits principally
due to growth in defense and international production programs.

The company also announced that Telephonics received two contract awards valued
in excess of $7.3 million from Lockheed Martin to develop radar systems for the
United States Coast Guard's CN-235 Maritime Patrol Aircraft and the HV-911
Vertical Takeoff Unmanned Aerial Vehicle.

The first contract award is for development of an advanced version of
Telephonics' APS-143 radar, designated the APS-143C(V)3.  When fielded, this
high performance radar will be a major element of the CN-235 Maritime Patrol
Aircraft.  This flexible and versatile mission system can be adapted to any
other fixed wing aircraft utilized by the Coast Guard.

The second contract award is for a customized version of Telephonics' RDR-
1700B lightweight imaging radar, which will be integrated on the Coast Guard's
HV-911 Vertical Takeoff Unmanned Aerial Vehicle.  Designated the RDR-1700CG,
this radar will provide the HV-911 with maritime surveillance, weather
avoidance and search and rescue capabilities.

The contract awards span an eighteen-month time period, covering system
development, non-recurring engineering, and the first engineering development
models for the CN-235 MPA and the HV-911.  The contracts were awarded under
Deepwater, a critical multi-year, multi-billion dollar program to modernize and
replace the Coast Guard's aging ships and aircraft, and improve command and
control and logistics systems.  It is the largest recapitalization effort in
the history of the Coast Guard.

Cash flow from operations was $9,000,000 for the quarter, which together with
existing cash balances, funded capital expenditures of $17,000,000, principally
for the specialty plastic films segment capital expansion programs.  Also,
during the quarter $7,000,000 was used to acquire approximately 300,000 shares
of the company's common stock under its buyback program.  Additional purchases
will be made from time to time, depending on market conditions, at prices
deemed appropriate by management.

  Griffon Corporation -
  * is a leading manufacturer and marketer of residential, commercial and
    industrial garage doors sold to professional installing dealers and
    major home center retail chains;
  * installs and services specialty building products and systems, primarily
    garage doors, openers, fireplaces and cabinets, for new construction
    markets through a substantial network of operations located throughout
    the country;
  * is an international leader in the development and production of embossed
    and laminated specialty plastic films used in the baby diaper, feminine
    napkin, adult incontinent, surgical and patient care markets; and
  * develops and manufactures information and communication systems for
    government and commercial markets worldwide.



"Safe Harbor" Statement under the Private Securities Litigation Reform Act of
1995:  All statements other than statements of historical fact included in this
release, including without limitation statements regarding the company's
financial position, business strategy and the plans and objectives of the
company's management for future operations, are forward-looking statements.
When used in this release, words such as "anticipate," "believe," "estimate,"
"expect," "intend," and similar expressions, as they relate to the company or
its management, identify forward-looking statements.  Such forward-looking
statements are based on the beliefs of the company's management, as well as
assumptions made by and information currently available to the company's
management.  Actual results could differ materially from those contemplated by
the forward-looking statements as a result of certain factors, including but
not limited to, business and economic conditions, competitive factors and
pricing pressures, capacity and supply constraints.  Such statements reflect
the views of the company with respect to future events and are subject to these
and other risks, uncertainties and assumptions relating to the operations,
results of operations, growth strategy and liquidity of the company.  Readers
are cautioned not to place undue reliance on these forward- looking statements.
 The company does not undertake to release publicly any revisions to these
forward-looking statements to reflect future events or circumstances or to
reflect the occurrence of unanticipated events.

                             GRIFFON CORPORATION
                             OPERATING HIGHLIGHTS
                                 (Unaudited)

                                            For the Three Months Ended
                                                   December 31,

                                                    2004               2003

   Net sales:
     Garage Doors                           $135,707,000       $121,860,000
     Installation Services                    72,289,000         76,705,000
     Specialty Plastic Films                  91,332,000        104,001,000
     Electronic Information and
      Communication Systems                   46,402,000         41,640,000
     Intersegment eliminations                (5,556,000)        (5,704,000)
                                            $340,174,000       $338,502,000
   Operating income:
     Garage Doors                            $12,649,000        $13,260,000
     Installation Services                     1,289,000          3,006,000
     Specialty Plastic Films                   8,598,000         12,940,000
     Electronic Information and
      Communication Systems                    2,524,000          2,030,000
       Segment operating income               25,060,000         31,236,000
   Unallocated amounts                        (3,980,000)        (3,728,000)
   Interest expense, net                      (1,525,000)        (1,850,000)
     Income before income taxes               19,555,000         25,658,000
   Provision for income taxes                 (7,235,000)        (9,493,000)
     Income before minority interest          12,320,000         16,165,000
   Minority interest                          (1,868,000)        (3,050,000)
     Net income                              $10,452,000        $13,115,000

   Earnings per share of common stock:
        Basic                                       $.36               $.44
        Diluted                                     $.34               $.41


DATASOURCE: Griffon Corporation



CONTACT:   Robert Balemian, President, Griffon Corporation,

[phone]

Copyright