Good afternoon. My name is Brandy and I will be your conference operator today. At this time, I would like to welcome everyone to the fourth quarter full year 2008 Earnings Call. (Operator Instructions). Thank you. Mr. Ron Kramer, you may begin your conference.

Good afternoon. Welcome to our financial overview of our fourth quarter and fiscal year 2008. With me today are Griffon's Executive Vice President, Frank Smith and our Chief Financial Officer, Pat Alesia. I'll discuss the overall results of the quarter and then we'll answer questions. Before we begin, I should point out to the extent that matters discussed in this call include forward-looking statements. They involve certain risks and uncertainties that could cause the company's actual results to differ materially from those in the forward-looking statements. Presentation includes non-GAAP measures, as defined by the SEC. Reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measures is available in our earnings release, which went out earlier. I'm pleased to report that we've taken a number of measures to reposition our company for future growth. The highlight of our fourth quarter was the success of our common stock rights offering along with the investment by GS Direct, the affiliate of Goldman Sachs. We raised approximately $246 million in gross proceeds from the rights offering, $241 million from the first closing in September and then additional $5 million in subsequent closings in October which we intend to use for general corporate purposes and to fund our growth. Our liquidity creates opportunity. We are in a very strong position, while the past year has been a very challenging time for the company. We continue to experience the adverse effects with the crisis in the US residential housing and credit markets, resulting in declines in the Installation Services and Garage Door businesses, and along the year we had to navigate through some adverse raw material increases in both the Building Products and the Plastics Company. When you look at this quarter which we'll go into in some detail; from a GAAP perspective…

(Operator Instructions) Your first question comes from Bob Labick with CJS Securities.

Good afternoon.

Good afternoon.

Hi. I haven't had time to go through the release in full detail, but I had a couple of questions I wanted to ask. First of all, congratulations; it looks like you held up very well in a tough environment.

Thank you. We think we did.

Yes. As it relates to Garage Doors, the sales were, I wouldn't say strong, down 2% year-over-year, but certainly much better than the environment may otherwise dictate. You mentioned a little bit of mix and a little bit of price in there. Can you give us a sense of unit volumes, and also a sense of what your salespeople in the field are saying for demand on a go-forward basis, just to start there? And I have a couple more questions on doors also.

Well, I think we actually had reduced unit volume. So Frank, do you want to.

Yes, what you are seeing, Bob is that the reduced unit volume was offset by the higher selling costs that we were able to get for the materiel price increase, the steel price increases.

Well, I’m trying to guess here; were units down 10 but you had 7 price, or were they down 20? Could you give a ballpark range of where units were going?

I think the best number to use Bob is about 10% in 2008.

For the full year?

Yes.

As you would expect, we're cautious on the outlook for the business. Clearly, we continue to operate the business well and profitably. We look as everyone else does at what's going on in the housing cycle. And while it's impacted us, we continue to have a profitable business. We're continuing to manage our cost and expectations that we're not finished with the downturn in the housing cycle, but we're well positioned as a brand. We have the best distribution. Our relationship with Home Depot is strong. We continue to do business with Menards. Our dealer network is strong. So whatever the level how the housing market is going to be, Clopay was well positioned to participate in it.

Okay, great. That was my next question. If you back out the charge for the last two quarters you have been profitable at much lower levels than sales in the past. Have you found your new lower fixed cost basis? Is there an ability to pull out a lot more costs from this division, or where you want to be and then wait for recovery to the margins really expand?

Yes. Bob, what you're seeing in terms of that lower break-even line is the result of the cost reduction program that we talked to you about in February. And that cost reduction program has been very successful. We will continue to work on additional opportunities to reduce costs in light of what's going on in the marketplace.

So you're anticipation for next year is continued unit softness. What have you heard from the field in that regard?

I think visibility is cloudy on the economy. So, I wouldn't want to be out trying to say, we report it as we do it. We clearly have a point of view that reducing costs and expecting that there's still going to be unit volume declines as a result of a declining housing market is the right way to be positioned. If the markets recover sooner, we certainly think that we have the ability to grow and to have the capacity to be able to meet any new demand.

The other thing I would like to add is that we're introducing a lot of new products in the marketplace to add value for our customers to be able to pass on to homeowners, and we're running a lot of promotions, working aggressively to keep that top line up.

The positioning of our balance sheet gives us the staying power that, if the downturn in that business is going to continue, we believe that we are in the best position balance sheet-wise to be able to consolidate in that space. And while that hasn't happened yet, we continue to think there will be opportunities for us.

Great. Speaking of the balance sheet, obviously it's very strong and it looks like you repurchased converts to $0.80 on the dollar. Is that something you continue to look to do in 2009? Or would you shift more towards acquisitions, or how have you?

We'll be opportunistic about it.

Okay. I'll ask one more question and get back into queue. Just on Telephonics you obviously had some very strong core growth of $24 million. Could you tell us what programs or give us some specific ideas really where that came from and if it is sustainable through next year, are those more short-term or long-term oriented programs?

For the three months, just to put things in perspective, last year or September of '07, we had approximately $19 million in sales on the Warlock program. So those sales don't exist in the September '08 quarter. The two contracts that drove most of the increase in sales offsetting the Warlock program were the MSS program and the lamps, or MRR program.

Great. Thank you very much. I'll get back in queue and let others ask questions.

Thanks.

(Operator Instructions). Your next question comes from Tom Spiro.

Tom Spiro, Spiro Capital. Good afternoon.

Good afternoon.

First regarding Telephonics, is there a backlog number you would like to share with us. I didn't catch it in the release.

We typically don't put a backlog number in the release, but it's in the 350 million range.

And where was it this time last year, could you remind us of that?

Probably slightly less.

As you look at the pipeline of opportunities over the next couple or three quarters, how is it looking?

Specifically with respect to Telephonics?

Yes, please.

It's been a stable business. We continue to have backlogged programs, and we have some new programs that we're in the process of hitting on and that are in the review that we expect to have some progress on in 2009.

Also, about 70% of our projected sales which we don't give guidance on, we're already in backlog already in 2009. That is a very solid performance.

What's the industry scuttlebutt, the industry point of view, with respect to the new administration, the view about defense spending?

I think we'll have to all wait and see. We've owned this business for 75 years. This is very much a core part of our company. We think it continues to have terrific value, not necessarily always recognized in the stock market, and we'll look to build this long-term for the holders of our company.

You're in three segments at this point; garage doors, films, and defense. If you look out two, three or four years, is there one of those three segments that you would like to really see dominate the company or would you want to keep it in all three?

I think the way you have got to start viewing us is that we're in four segments. We have three businesses that each have their own growth profiles, and we have capital that's going to find a way to either grow around one of those three businesses, or look to diversify into another business, or businesses. The point of repositioning the balance sheet is to give us the flexibility to take advantage of the dislocations that we thought might become available. Obviously, our timing in being able to liquefy our company and be in a position not just to be a survivor but to be a builder is going to allow us to take advantage of some of the things that are going on in the current environment. So while it's clear we have three businesses today, I think you've got to look at us as management, as looking at the capital that we have as finding new places to invest, and to create shareholder returns.

Apart from acquisitions, what are the CapEx plans for the new fiscal year?

Reduce level from 2008 for sure. Right now, we're looking at somewhere in the vicinity of about $30 million to $40 million.

Lastly, there appear to have been a lot of changes at Goldman Sachs, since Goldman Sachs first stepped forward to work with us. I was curious, whether any of those apparent changes at Goldman Sachs have any ramifications for Griffon?

No, we have two directors from GS Direct on our board from the private equity group, and we have no changes and don't expect anything going forward, couldn't have a better investor and a partner to help us build this business.

Well, that's great to hear. Thank you.

Your next question comes from Arnold Brief with Goldsmith & Harris. Arnold Brief - Goldsmith & Harris: You've taken price increases in both Garage Doors and Plastics. Raw materials in both of those areas, I think, are down substantially and maybe are still declining. Would you give us some feel for the outlook for profit margins this fiscal year and take a guess on your ability to hold prices in light of declining raw material prices.

We don't give forward guidance, but clearly these are pass-throughs. You're absolutely right, that we were impacted negatively by the increased costs of resin and the increased price of steel in both the Plastics and the Building Products business. Both of those have declined in the last few months. We obviously are hopeful that our margins will be able to be positively benefited by that. But I think it's too early to say, whether the end users are going to be able to absorb that increase to us. Arnold Brief - Goldsmith & Harris: Could you give us some idea how the competition is shaping up, particularly in the Garage Door business where there is so much weakness in housing? You're financially strong and able to survive all this. Number one, how does some of the competition look relative to your strength? Number two, can you give us some idea how your mix is now in terms of OEM replacement in the Garage Door business?

We're probably the only publicly traded Garage Door company. So there are lot of privately-held companies, and most companies are feeling the impact of the downturn. We are well positioned in terms of our market share and our distribution to be able to look at situations should they become available. And it's not out of question for us to be looking in that segment. The issue is that the housing downturn and its impact is happening; what the ultimate result and whether there are companies or assets that become available, we think is a 2009 story. And it has not hit the wall among our competition quite yet. If it does, we think we're there well positioned to take advantage of it. Arnold Brief - Goldsmith & Harris: So you feel you're taking market share?

Well, I think we were going to defend market share, and hopefully by doing that and being better capitalized, we'll be able to increase it. Arnold Brief - Goldsmith & Harris: Okay. And then OE and replacement mix percentages, have they changed?

No, but it’s obviously not the same. New residential construction is down.

Dramatically.

Yes significantly. And so the mix is clearly more to repair and remodel.

As has been proved, we continue to see that repair and remodeling is the better driver in that business.

Right. And we are mostly a repair and remodel business. Our products tend to be more of the upscale products as opposed to the more basic product that builders like to put in. Arnold Brief - Goldsmith & Harris: Thank you.

Okay.

There are no further questions at this time. Mr. Kramer, do you have any additional comments or closing remarks?

No. Thank you very much for participating and we look forward to continuing to report on our progress to you. Bye-bye.

This concludes today's conference call. You may now disconnect.