Greif, Inc. (NYSE: GEF, GEF.B), a world leader in industrial
packaging products and services, announced first quarter 2017
results. “Our global portfolio delivered solid results during the
first quarter,” said Greif’s President and Chief Executive Officer,
Pete Watson. “Greif’s gross profit and operating profit before
special items1 margins both improved as we continued to execute our
strategy of improved customer service and disciplined commercial
and operational execution. Looking forward, we remain focused on
advancing our strategy to generate greater value from our portfolio
for the benefit of our customers and shareholders.”
First Quarter Highlights include:
- Net sales increased $49.5 million to
$820.9 million compared to $771.4 million for the first quarter of
2016.
- Gross profit improved to $163.3 million
compared to $151.3 million for the first quarter of 2016. Gross
profit margin improved to 19.9 percent from 19.6 percent for the
first quarter of 2016.
- Operating profit improved $24.5 million
and operating profit before special items improved $8.6 million
compared to the first quarter of 2016. Operating profit margin
before special items improved to 8.1 percent compared to 7.5
percent for the first quarter of 2016.
- Net income of $5.4 million or $0.10 per
diluted Class A share compared to net loss of $(11.1) million or
$(0.19) per diluted Class A share for the first quarter of 2016.
Net income, excluding the impact of special items, of $26.4 million
or $0.45 per diluted Class A share compared to net income,
excluding the impact of special items, of $23.0 million or $0.40
per diluted Class A share for the first quarter of 2016.
- Income tax expense for the first
quarter of 2017 increased to $11.8 million from $6.0 million for
the first quarter 2016, due primarily to changes in income mix, the
impact of entities with a valuation allowance, and a change in
assertions related to foreign unremitted earnings that triggered a
first quarter 2017 charge of $4.4 million.
- Cash used in operating activities
increased $17.9 million compared to the first quarter of 2016. Free
cash flow2 declined by $9.4 million compared to the first quarter
of 2016, primarily due to increased raw material purchases in the
first quarter of 2017 compared to 2016 in anticipation of near-term
increases in raw material costs.
- During the first quarter of 2017, the
Company purchased an annuity contract for approximately $49.2
million with defined benefit pension plan assets and, in connection
with such purchase, the pension obligation for certain retirees
under that plan in the United States was irrevocably transferred
from the plan to the annuity contract. Additionally, lump sum
payments totaling $35.1 million were made from defined benefit plan
assets to certain participants who agreed to accept such payments,
representing the current value of those participants' respective
pension benefit. The settlement items described above resulted in a
decrease in projected benefit obligation of $84.3 million and a
non-cash settlement charge of $23.5 million.
__________
1 A summary of all special items that are
excluded from net income before special items, from earnings per
diluted Class A share before special items and from operating
profit before special items is set forth in the Selected Financial
Highlights table following the Dividend Summary in this release. 2
Free cash flow is defined as net cash provided by operating
activities less cash paid for purchases of properties, plants and
equipment.
Note: A reconciliation of the differences between all non-GAAP
financial measures used in this release with the most directly
comparable GAAP financial measures is included in the financial
schedules that are a part of this release. These non-GAAP financial
measures are intended to supplement and should be read together
with our financial results. They should not be considered an
alternative or substitute for, and should not be considered
superior to, our reported financial results. Accordingly, users of
this financial information should not place undue reliance on these
non-GAAP financial measures.
Company Outlook
We reaffirm our 2017 fiscal year guidance as set forth
below.
Class A Earnings Per Share before Special Items
$2.78 - $3.08
Note: 2017 GAAP Class A Earnings Per Share guidance is not
provided in this release due to the potential for one or more of
the following, the timing and magnitude of which we are unable to
reliably forecast: gains or losses on the disposal of businesses,
timberland or properties, plants and equipment, net, non-cash asset
impairment charges due to unanticipated changes in the business,
restructuring-related activities, non-cash pension settlements or
acquisition costs, and the income tax effects of these items and
other income tax-related events. No reconciliation of the fiscal
year 2017 Class A earnings per share before special items
guidance, a non-GAAP financial measure which excludes gains and
losses on the disposal of businesses, timberland and property,
plant and equipment, acquisition costs, non-cash pension settlement
charges, restructuring and impairment charges is included in this
release because, due to the high variability and difficulty in
making accurate forecasts and projections of some of the excluded
information, together with some of the excluded information not
being ascertainable or accessible, we are unable to quantify
certain amounts that would be required to be included in the most
directly comparable GAAP financial measure without unreasonable
efforts.
Segment Results
Net sales are impacted primarily by the volume of primary
products sold, selling prices, product mix and the impact of
changes in foreign currencies against the U.S. Dollar. The tables
below show the percentage impact of each of these items on net
sales for our primary products, both including and excluding
divestitures, for the first quarter of 2017 as compared to the
first quarter of 2016 for the business segments with manufacturing
operations:
Net Sales Impact
- Primary Products
Rigid Industrial
Packaging &
Services*
Paper Packaging &
Services*
Flexible Products
& Services*
% % %
Currency Translation (2.7 )% —
(4.3 )%
Volume 3.0
%
16.1
%
(0.7 )%
Selling Prices and Product Mix 10.3
%
(0.8 )% 5.1
%
Total Impact of Primary Products 10.6
%
15.3
%
0.1
%
Net Sales Impact
- Primary Products, Excluding Divestitures:
Rigid Industrial
Packaging &
Services*
Paper Packaging &
Services*
Flexible Products
& Services*
% % %
Currency Translation (2.7 )% — (4.5 )%
Volume 3.0
%
16.1
%
3.5
%
Selling Prices and Product Mix 10.3
%
(0.8 )% 4.9
%
Total Impact of Primary Products 10.6
%
15.3
%
3.9
%
* Primary products are manufactured steel, plastic and fibre
drums; intermediate bulk containers; linerboard, medium, corrugated
sheets and corrugated containers; and 1&2 loop and 4 loop
flexible intermediate bulk containers.
Rigid Industrial Packaging & Services
Net sales increased $26.6 million to $561.5 million for the
first quarter of 2017 compared to $534.9 million for the first
quarter of 2016. Divestitures (all involving non-primary products)
and foreign currency translation both negatively impacted net sales
by $25.2 million and $14.4 million, respectively, in the first
quarter of 2017 compared to the first quarter of 2016. The $66.2
million increase for the first quarter 2017 compared to the first
quarter of 2016 was due primarily to an increase in selling prices
of our primary products due to strategic pricing decisions and
increases in index prices of 10.3 percent and an increase in
volumes of 3.0 percent.
Gross profit increased to $112.4 million (20.0 percent) for the
first quarter of 2017 compared to $102.8 million (19.2 percent) for
the first quarter of 2016 due to the same factors that impacted net
sales, improvements in production costs and divestiture of select
non-core and underperforming assets during 2016.
Operating profit was $28.7 million for the first quarter of 2017
compared to an operating loss of $2.6 million for the first quarter
of 2016. Operating profit before special items and excluding the
impact of divestitures increased to $43.4 million for the first
quarter of 2017 from $35.4 million for the first quarter of 2016,
due primarily to the same factors that impacted gross profit and a
benefit due to a decrease in allocated corporate costs.
Paper Packaging & Services
Net sales increased $24.5 million to $182.9 million for the
first quarter of 2017 compared with $158.4 million for the first
quarter of 2016. The increase was due primarily to an increase in
volumes in business at the mills and sheet feeder facilities and
increased sales of specialty products of $12.0 million from the
first quarter of 2016 to the first quarter of 2017.
Gross profit was $35.3 million (19.3 percent) for the first
quarter of 2017 compared to $35.8 million (22.6 percent) for the
first quarter of 2016. The decrease in gross profit margin was due
primarily to increased input costs as well as reductions in
published containerboard index prices, substantially offset by an
increase in volumes.
Operating profit was $10.8 million for the first quarter of 2017
compared with $21.2 million for the first quarter of 2016.
Operating profit before special items decreased to $19.9 million
for the first quarter of 2017 from $22.7 million for the first
quarter of 2017, due primarily to an increase in pension costs and
allocated corporate costs.
Flexible Products & Services
Net sales decreased $3.2 million to $69.7 million for the first
quarter of 2017 compared with $72.9 million for the first quarter
of 2016 due primarily to the impact of one divestiture in 2016 of a
unit selling primary products. Excluding the impact of that
divestiture, primary product volume improvements increased net
sales 3.5 percent from the first quarter of 2016 to the first
quarter of 2017.
Gross profit was $13.1 million (18.8 percent) for the first
quarter of 2017 compared to $10.5 million (14.4 percent) for the
first quarter 2016. The margin improvement was due to reduced labor
and fixed production costs and the continued impact of strategic
volume and pricing decisions throughout 2016.
Operating profit was $0.5 million for the first quarter of 2017
compared to an operating loss of $3.1 million for the first quarter
of 2016. Operating profit before special items was $1.6 million for
the first quarter of 2017 compared to an operating loss of $1.6
million for the first quarter of 2016. The improvement in the
operating profit before special items was due primarily to the same
factors that impacted gross profit.
Land Management
Net sales increased $1.6 million to $6.8 million for the first
quarter of 2017 compared to $5.2 million for the first quarter of
2016.
Operating profit was $2.1 million for both the first quarter of
2017 and 2016 with an increase in allocated corporate costs
offsetting the impact of the increase in net sales.
Dividend Summary
On February 28, 2017, the Board of Directors declared quarterly
cash dividends of $0.42 per share of Class A Common Stock and $0.63
per share of Class B Common Stock. Dividends are payable on April
1, 2017, to stockholders of record at the close of business on
March 17, 2017.
GREIF, INC. AND SUBSIDIARY
COMPANIESSELECTED FINANCIAL HIGHLIGHTSUNAUDITED(Dollars
in millions, except per share amounts)
Three months ended January 31, 2017
2016
Selected Financial
Highlights
Net sales $ 820.9 $ 771.4 Gross profit 163.3 151.3 Gross profit
margin 19.9 % 19.6 % Operating profit 42.1 17.6 Operating profit
before special items 66.7 58.1 EBITDA 69.2 46.9 EBITDA before
special items 93.8 87.4 Cash used in operating activities (44.1 )
(26.2 ) Free cash flow (65.4 ) (56.0 ) Net income (loss)
attributable to Greif, Inc. 5.4 (11.1 ) Diluted Class A earnings
(loss) per share attributable to Greif, Inc. $ 0.10 $ (0.19 )
Diluted Class A earnings per share attributable to Greif, Inc.
before special items $ 0.45 $ 0.40
Special
items
Restructuring charges $ (0.3 ) $ 2.3 Non-cash asset impairment
charges 1.9 39.1 Non-cash pension settlement charge 23.5 — Gain on
disposal of properties, plants and equipment and businesses, net
(0.5 ) (0.9 ) Total special items $ 24.6 $ 40.5 Total
special items, net of tax and noncontrolling interest 21.0
34.1 Impact of total special items, net of tax, on diluted
Class A earnings per share attributable to Greif, Inc. $ 0.35
$ 0.59
January 31, 2017 October 31,
2016 Operating working capital4 362.6 304.6
__________
4 Operating working capital represents trade
accounts receivable plus inventories less accounts payable.
Conference Call
The Company will host a conference call to discuss the first
quarter of 2017 results on March 2, 2017, at 10:00 a.m. Eastern
Time (ET). To participate, domestic callers should call
877-201-0168. The Greif ID is 67687104. The number for
international callers is 1-647-788-4901. Phone lines will open at
9:30 a.m. ET. The conference call will also be available through a
live webcast, including slides, which can be accessed at
http://investor.greif.com by clicking
on the Events and Presentations tab and searching under the events
calendar. A replay of the conference call will be available on the
Company’s website approximately two hours following the call.
About Greif
Greif is a global leader in industrial packaging products and
services and is pursuing its vision to become the world’s best
performing customer service company in industrial packaging. The
Company produces steel, plastic, fibre, flexible, corrugated, and
reconditioned containers, intermediate bulk containers,
containerboard and packaging accessories, and provides filling,
packaging and industrial packaging reconditioning services for a
wide range of industries. Greif also manages timber properties in
the southeastern United States. The Company is strategically
positioned in over 45 countries to serve global as well as regional
customers. Additional information is on the Company’s website at
www.greif.com.
Forward-Looking Statements
This release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
The words “may,” “will,” “expect,” “intend,” “estimate,”
“anticipate,” “aspiration,” “objective,” “project,” “believe,”
“continue,” “on track” or “target” or the negative thereof and
similar expressions, among others, identify forward-looking
statements. All forward-looking statements are based on
assumptions, expectations and other information currently available
to management. Such forward-looking statements are subject to
certain risks and uncertainties that could cause the Company’s
actual results to differ materially from those forecasted,
projected or anticipated, whether expressed or implied. The
most significant of these risks and uncertainties are described in
Part I of the Company’s Annual Report on Form 10-K for the fiscal
year ended October 31, 2016. The Company undertakes no
obligation to update or revise any forward-looking statements.
Although the Company believes that the expectations reflected in
forward-looking statements have a reasonable basis, the Company can
give no assurance that these expectations will prove to be correct.
Forward-looking statements are subject to risks and uncertainties
that could cause the Company’s actual results to differ materially
from those forecasted, projected or anticipated, whether expressed
in or implied by the statements. Such risks and uncertainties that
might cause a difference include, but are not limited to, the
following: (i) historically, our business has been sensitive
to changes in general economic or business conditions, (ii) we
may not successfully implement our business strategies, including
achieving our transformation and growth objectives, (iii) our
operations subject us to currency exchange and political risks that
could adversely affect our results of operations, (iv) the current
and future challenging global economy and disruption and volatility
of the financial and credit markets may adversely affect our
business, (v) the continuing consolidation of our customer
base and suppliers may intensify pricing pressure, (vi) we
operate in highly competitive industries, (vii) our business
is sensitive to changes in industry demands, (viii) raw
material and energy price fluctuations and shortages may adversely
impact our manufacturing operations and costs, (ix) geopolitical
conditions, including direct or indirect acts of war or terrorism,
could have a material adverse effect on our operations and
financial results, (x) we may encounter difficulties arising from
acquisitions, (xi) in connection with acquisitions or
divestitures, we may become subject to liabilities, (xii) we
may incur additional restructuring costs and there is no guarantee
that our efforts to reduce costs will be successful,
(xiii) tax legislation initiatives or challenges to our tax
positions may adversely impact our results or condition,
(xiv) full realization of our deferred tax assets may be
affected by a number of factors, (xv) several operations are
conducted by joint ventures that we cannot operate solely for our
benefit, (xvi) certain of the agreements that govern our joint
ventures provide our partners with put or call options,
(xvii) our ability to attract, develop and retain talented and
qualified employees, managers and executives is critical to our
success, (xviii) our business may be adversely impacted by
work stoppages and other labor relations matters, (xix) we may
not successfully identify illegal immigrants in our workforce,
(xx) our pension and postretirement plans are underfunded and
will require future cash contributions and our required future cash
contributions could be higher than we expect, each of which could
have a material adverse effect on our financial condition and
liquidity, (xxi) we may be subject to losses that might not be
covered in whole or in part by existing insurance reserves or
insurance coverage, (xxii) our business depends on the
uninterrupted operations of our facilities, systems and business
functions, including our information technology (IT) and other
business systems, (xxiii) a security breach of customer,
employee, supplier or Company information may have a material
adverse effect on our business, financial condition and results of
operations, (xxiv) legislation/regulation related to
environmental and health and safety matters and corporate social
responsibility could negatively impact our operations and financial
performance, (xxv) product liability claims and other legal
proceedings could adversely affect our operations and financial
performance, (xxvi) we may incur fines or penalties, damage to
our reputation or other adverse consequences if our employees,
agents or business partners violate, or are alleged to have
violated, anti-bribery, competition or other laws, (xxvii) changing
climate, climate change regulations and greenhouse gas effects may
adversely affect our operations and financial performance, (xxviii)
the frequency and volume of our timber and timberland sales will
impact our financial performance, (xxix) changes in U.S. generally
accepted accounting principles (U.S. GAAP) and SEC rules and
regulations could materially impact our reported results, (xxx) if
the Company fails to maintain an effective system of internal
control, the Company may not be able to accurately report financial
results or prevent fraud, and (xxxi) the Company has a significant
amount of goodwill and long-lived assets which, if impaired in the
future, would adversely impact our results of operations. The risks
described above are not all-inclusive, and given these and other
possible risks and uncertainties, investors should not place undue
reliance on forward-looking statements as a prediction of actual
results. For a detailed discussion of the most significant risks
and uncertainties that could cause our actual results to differ
materially from those forecasted, projected or anticipated, see
“Risk Factors” in Part I, Item 1A of our most recently filed
Form 10-K and our other filings with the Securities and Exchange
Commission. All forward-looking statements made in this news
release are expressly qualified in their entirety by reference to
such risk factors. Except to the limited extent required by
applicable law, we undertake no obligation to update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise.
GREIF, INC. AND SUBSIDIARY
COMPANIESCONDENSED CONSOLIDATED STATEMENTS OF
INCOMEUNAUDITED(Dollars and shares in millions, except per
share amounts)
Three months ended January 31, 2017
2016 Net sales $ 820.9 $ 771.4 Cost of products sold 657.6
620.1 Gross profit 163.3 151.3 Selling, general and
administrative expenses 96.6 93.2 Restructuring charges (0.3 ) 2.3
Non-cash asset impairment charges 1.9 39.1 Pension settlement
charge 23.5 — Gain on disposal of properties, plants and equipment,
net (1.0 ) (0.9 ) Loss on disposal of businesses 0.5 —
Operating profit 42.1 17.6 Interest expense, net 18.7 18.5
Other expense, net 3.6 3.0 Income (loss) before
income tax expense and equity earnings of unconsolidated
affiliates, net 19.8 (3.9 ) Income tax expense 11.8 6.0
Net income (loss) 8.0 (9.9 ) Net income attributable to
noncontrolling interests (2.6 ) (1.2 ) Net income (loss)
attributable to Greif, Inc. $ 5.4 $ (11.1 )
Basic
earnings (loss) per share attributable to Greif, Inc. common
shareholders: Class A Common Stock $ 0.10 $ (0.19 ) Class B
Common Stock $ 0.13 $ (0.29 )
Diluted earnings (loss) per share
attributable to Greif, Inc. common shareholders: Class A Common
Stock $ 0.10 $ (0.19 ) Class B Common Stock $ 0.13 $ (0.29 )
Shares used to calculate basic earnings per share attributable
to Greif, Inc. common shareholders: Class A Common Stock 25.8
25.7 Class B Common Stock 22.0 22.1
Shares used to calculate
diluted earnings per share attributable to Greif, Inc. common
shareholders: Class A Common Stock 25.8 25.7 Class B Common
Stock 22.0 22.1
GREIF, INC. AND SUBSIDIARY
COMPANIESCONDENSED CONSOLIDATED BALANCE
SHEETSUNAUDITED(Dollars in millions)
January 31, 2017 October 31, 2016
ASSETS CURRENT ASSETS Cash and cash equivalents $ 106.8 $
103.7 Trade accounts receivable 391.3 399.2 Inventories 304.2 277.4
Other current assets 234.8 140.0 1,037.1 920.3
LONG-TERM ASSETS Goodwill 747.9 786.4 Intangible assets 89.0 110.6
Assets held by special purpose entities 50.9 50.9 Other long-term
assets 138.8 120.9 1,026.6 1,068.8 PROPERTIES, PLANTS
AND EQUIPMENT 1,135.6 1,163.9 $ 3,199.3 $ 3,153.0
LIABILITIES AND EQUITY CURRENT LIABILITIES Accounts payable
$ 332.9 $ 372.0 Short-term borrowings 38.9 51.6 Current portion of
long-term debt — — Other current liabilities 248.5 235.6
620.3 659.2 LONG-TERM LIABILITIES Long-term debt 1,074.8
974.6 Liabilities held by special purpose entities 43.3 43.3 Other
long-term liabilities 463.2 486.2 1,581.3 1,504.1
REDEEMABLE NONCONTROLLING INTEREST 32.5 31.8 EQUITY Total
Greif, Inc. equity 955.0 947.4 Noncontrolling interests 10.2
10.5 965.2 957.9 $ 3,199.3 $ 3,153.0
GREIF, INC. AND SUBSIDIARY
COMPANIESCONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS(UNAUDITED)(Dollars in millions)
Three months ended January 31, 2017
2016 CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss)
$ 8.0 $ (9.9 ) Depreciation, depletion and amortization 30.7 32.3
Asset impairments 1.9 39.1 Pension settlement loss 23.5 — Other
non-cash adjustments to net income (10.3 ) 0.1 Operating working
capital changes (65.1 ) (35.2 ) Deferred purchase price on sold
receivables (23.1 ) (15.9 ) Decrease in cash from changes in other
assets and liabilities (9.7 ) (36.7 ) Net cash used in operating
activities (44.1 ) (26.2 ) CASH FLOWS FROM INVESTING ACTIVITIES:
Collection of subordinated note receivable — 44.2 Purchases of
properties, plants and equipment (21.3 ) (29.8 ) Purchases of and
investments in timber properties (2.1 ) — Proceeds from the sale of
properties, plants and equipment, businesses, timberland and other
assets 2.5 2.1 Net cash provided by (used in)
investing activities (20.9 ) 16.5 CASH FLOWS FROM FINANCING
ACTIVITIES: Proceeds from (payments on) debt, net 97.7 (2.4 )
Dividends paid to Greif, Inc. shareholders (24.5 ) (24.5 ) Other
(0.5 ) (0.2 ) Net cash provided by (used in) financing activities
72.7 (27.1 ) Effects of exchange rates on cash (4.6 ) (4.1 )
Net increase (decrease) in cash and cash equivalents 3.1
(40.9 ) Cash and cash equivalents, beginning of period 103.7
106.2 Cash and cash equivalents, end of period $ 106.8
$ 65.3
GREIF, INC. AND SUBSIDIARY
COMPANIESFINANCIAL HIGHLIGHTS BY
SEGMENTUNAUDITED(Dollars in millions)
Three months ended January 31, 2017
2016 Net sales: Rigid Industrial Packaging &
Services $ 561.5 $ 534.9 Paper Packaging & Services 182.9 158.4
Flexible Products & Services 69.7 72.9 Land Management 6.8
5.2 Total net sales $ 820.9 $ 771.4
Operating profit (loss): Rigid Industrial Packaging &
Services $ 28.7 $ (2.6 ) Paper Packaging & Services 10.8 21.2
Flexible Products & Services 0.5 (3.1 ) Land Management 2.1
2.1 Total operating profit $ 42.1 $ 17.6
EBITDA5: Rigid Industrial Packaging
& Services $ 45.7 $ 17.5 Paper Packaging & Services 19.1
28.9 Flexible Products & Services 1.2 (2.3 ) Land Management
3.2 2.8 Total EBITDA $ 69.2 $ 46.9
EBITDA before special items: Rigid Industrial Packaging
& Services $ 60.4 $ 55.6 Paper Packaging & Services 28.2
30.4 Flexible Products & Services 2.3 (0.8 ) Land Management
2.9 2.2 Total EBITDA before special items $ 93.8
$ 87.4
__________
5 EBITDA is defined as net income, plus
interest expense, net, plus income tax expense, plus depreciation,
depletion and amortization. However, because the Company does not
calculate net income by segment, this table calculates EBITDA by
segment with reference to operating profit (loss) by segment,
which, as demonstrated in the table of Consolidated EBITDA, is
another method to achieve the same result. See the reconciliations
in the table of Segment EBITDA.
GREIF, INC. AND SUBSIDIARY
COMPANIESFINANCIAL HIGHLIGHTS BY GEOGRAPHIC
REGIONUNAUDITED(Dollars in millions)
Three months ended January 31, 2017
2016 Net sales: United States $ 408.0 $ 372.4 Europe,
Middle East and Africa 285.9 276.2 Asia Pacific and other Americas
127.0 122.8 Total net sales 820.9 771.4
Gross profit: United States $ 85.2 $ 78.9 Europe, Middle
East and Africa 55.8 47.7 Asia Pacific and other Americas 22.3
24.7 Total gross profit $ 163.3 $ 151.3
Operating profit (loss): United States $ 5.3 $ 18.5 Europe,
Middle East and Africa 24.1 5.9 Asia Pacific and other Americas
12.7 (6.8 ) Total operating profit $ 42.1 $ 17.6
GREIF, INC. AND SUBSIDIARY
COMPANIESGAAP TO NON-GAAP RECONCILIATIONOPERATING
WORKING CAPITALUNAUDITED(Dollars in millions)
January 31, 2017 October 31, 2016 Trade
accounts receivable $ 391.3 $ 399.2 Plus: inventories 304.2 277.4
Less: accounts payable 332.9 372.0 Operating working capital
$ 362.6 $ 304.6
GREIF, INC. AND SUBSIDIARY
COMPANIESGAAP TO NON-GAAP RECONCILIATIONCONSOLIDATED
EBITDA6UNAUDITED(Dollars in millions)
Three months ended January 31, 2017
2016 Net income (loss) $ 8.0 $ (9.9 )
Plus: Interest expense, net
18.7 18.5
Plus: Income tax expense
11.8 6.0
Plus: Depreciation, depletion and
amortization expense
30.7 32.3 EBITDA $ 69.2 $ 46.9 Net
income (loss) $ 8.0 $ (9.9 )
Plus: Interest expense, net
18.7 18.5
Plus: Income tax expense
11.8 6.0
Plus: Other expense, net
3.6 3.0 Operating profit 42.1 17.6 Less: Other
expense, net 3.6 3.0 Plus: Depreciation, depletion and amortization
expense 30.7 32.3 EBITDA $ 69.2 $ 46.9
__________
6 EBITDA is defined as net income, plus
interest expense, net, plus income tax expense, plus depreciation,
depletion and amortization. As demonstrated in this table, EBITDA
can also be calculated with reference to operating profit.
GREIF, INC. AND SUBSIDIARY
COMPANIESGAAP TO NON-GAAP RECONCILIATIONSEGMENT
EBITDA7UNAUDITED(Dollars in millions)
Three months ended January 31, 2017
2016 Rigid Industrial Packaging & Services
Operating profit (loss) $ 28.7 $ (2.6 ) Less: Other expense, net
2.4 1.7 Plus: Depreciation and amortization expense 19.4
21.8 EBITDA $ 45.7 $ 17.5 Restructuring charges (0.5 ) 1.4
Non-cash asset impairment charges 1.6 36.8 Non-cash pension
settlement charge 14.1 — Gain on disposal of properties, plants,
equipment, net (0.5 ) (0.1 ) EBITDA before special items $ 60.4
$ 55.6
Paper Packaging & Services
Operating profit $ 10.8 $ 21.2 Plus: Depreciation and amortization
expense 8.3 7.7 EBITDA $ 19.1 $ 28.9 Non-cash asset
impairment charges — 1.5 Non-cash pension settlement charge 9.2 —
Gain on disposal of properties, plants, equipment, net (0.1 ) —
EBITDA before special items $ 28.2 $ 30.4
Flexible Products & Services Operating profit (loss) $
0.5 $ (3.1 ) Less: Other expense, net 1.2 1.3 Plus: Depreciation
and amortization expense 1.9 2.1 EBITDA $ 1.2 $ (2.3
) Restructuring charges 0.2 0.9 Non-cash asset impairment charges
0.3 0.8 Non-cash pension settlement charge 0.1 — (Gain) loss on
disposal of properties, plants, equipment, net 0.5 (0.2 )
EBITDA before special items $ 2.3 $ (0.8 )
Land
Management Operating profit $ 2.1 $ 2.1 Plus: Depreciation,
depletion and amortization expense 1.1 0.7 EBITDA $
3.2 $ 2.8 Non-cash pension settlement charge 0.1 — Gain on disposal
of properties, plants, equipment, net (0.4 ) (0.6 ) EBITDA before
special items $ 2.9 $ 2.2 Consolidated EBITDA $ 69.2
$ 46.9 Consolidated EBITDA before special items $
93.8 $ 87.4
__________
7 EBITDA is defined as net income, plus
interest expense, net, plus income tax expense, plus depreciation,
depletion and amortization. However, because the Company does not
calculate net income by segment, this table calculates EBITDA by
segment with reference to operating profit (loss) by segment,
which, as demonstrated in the table of Consolidated EBITDA, is
another method to achieve the same result.
GREIF, INC. AND SUBSIDIARY
COMPANIESGAAP TO NON-GAAP RECONCILIATIONFREE CASH
FLOW8UNAUDITED(Dollars in millions)
Three months ended January 31, 2017
2016 Net cash used in operating activities $ (44.1 )
$ (26.2 ) Cash paid for purchases of properties, plants and
equipment (21.3 ) (29.8 )
Free Cash Flow $ (65.4 ) $ (56.0 )
__________
8 Free Cash Flow is defined as net cash
provided by operating activities less cash paid for purchases of
properties, plants and equipment.
GREIF, INC. AND SUBSIDIARY
COMPANIESGAAP TO NON-GAAP RECONCILIATIONSEGMENT
OPERATING PROFIT (LOSS) BEFORE SPECIAL
ITEMS9UNAUDITED(Dollars in millions)
Three months ended January 31, 2017
2016 Operating profit (loss): Rigid Industrial
Packaging & Services $ 28.7 $ (2.6 ) Paper Packaging &
Services 10.8 21.2 Flexible Products & Services 0.5 (3.1 ) Land
Management 2.1 2.1 Total operating profit 42.1
17.6
Restructuring charges: Rigid Industrial
Packaging & Services (0.5 ) 1.4 Flexible Products &
Services 0.2 0.9 Total restructuring charges (0.3 )
2.3
Non-cash asset impairment charges: Rigid
Industrial Packaging & Services 1.6 36.8 Paper Packaging &
Services — 1.5 Flexible Products & Services 0.3 0.8
Total non-cash asset impairment charges 1.9 39.1
Non-cash pension settlement charge: Rigid Industrial
Packaging & Services 14.1 — Paper Packaging & Services 9.2
— Flexible Products & Services 0.1 — Land Management 0.1
— Total non-cash pension settlement charge 23.5 —
(Gain) loss on disposal of properties, plants, equipment
and businesses, net: Rigid Industrial Packaging & Services
(0.5 ) (0.1 ) Paper Packaging & Services (0.1 ) — Flexible
Products & Services 0.5 (0.2 ) Land Management (0.4 ) (0.6 )
Total gain on disposal of properties, plants, equipment and
businesses, net (0.5 ) (0.9 )
Operating profit (loss) before
special items: Rigid Industrial Packaging & Services 43.4
35.5 Paper Packaging & Services 19.9 22.7 Flexible Products
& Services 1.6 (1.6 ) Land Management 1.8 1.5
Total operating profit before special items $ 66.7 $ 58.1
__________
9
Operating profit (loss) before special
items is defined as operating profit (loss), plus restructuring
charges, plus non-cash pension settlement charge, plus non-cash
impairment charges, less (gain) loss on disposal of properties,
plants, equipment, net.
GREIF, INC. AND SUBSIDIARY
COMPANIESGAAP TO NON-GAAP RECONCILIATIONNET INCOME
AND CLASS A EARNINGS PER SHARE BEFORE SPECIAL
ITEMSUNAUDITED(Dollars in millions, except for per share
amounts)
Three months ended January 31, 2017 Class
A Net Income Attributable to Greif, Inc. $ 5.4 $ 0.10 Gain on
disposal of properties, plants, equipment and businesses, net (0.5
) (0.01 ) Restructuring charges 3.8 0.06 Non-cash asset impairment
charges 1.5 0.03 Non-cash pension settlement charge 16.2 $
0.27 Net Income Attributable to Greif, Inc. Excluding
Special Items $ 26.4 $ 0.45
Three months
ended January 31, 2016 Class A Net Loss Attributable to
Greif, Inc. $ (11.1 ) $ (0.19 ) Gain on disposal of properties,
plants, equipment and businesses, net (0.6 ) (0.01 ) Restructuring
charges 1.5 0.04 Non-cash asset impairment charges 33.2 0.56
Net Income Attributable to Greif, Inc. Excluding Special
Items $ 23.0 $ 0.40 All special items are net
of tax and noncontrolling interests The results for the
three months ended January 31, 2017 for Net Income Attributable to
Greif, Inc. Excluding Special Items are net of tax of $2.9 million
and net of noncontrolling interest of $0.7 million. Included in the
restructuring charges special item is a $4.4 million income tax
charge due to a change in assertions related to unremitted foreign
earnings as a result of the restructuring of our intercompany debt
portfolio. The tax rate excluding the impact of special items for
the first quarter of 2017 was 33.1 percent.
GREIF, INC. AND SUBSIDIARY
COMPANIESGAAP TO NON-GAAP RECONCILIATIONSELECTED
FINANCIAL INFORMATIONEXCLUDING THE IMPACT OF
DIVESTITURESUNAUDITED(Dollars in millions)
Three months ended January 31, 2017
Impact of
Divestitures
Excluding the
Impact of
Divestitures
Net Sales: Rigid Industrial Packaging & Services $ 561.5
$ — $ 561.5 Paper Packaging & Services 182.9 — 182.9 Flexible
Products & Services 69.7 — 69.7 Land Management 6.8
— 6.8 Consolidated $ 820.9 $ —
$ 820.9
Gross Profit: Rigid Industrial
Packaging & Services $ 112.4 $ — $ 112.4 Paper Packaging &
Services 35.3 — 35.3 Flexible Products & Services 13.1 — 13.1
Land Management 2.5 — 2.5 Consolidated
$ 163.3 $ — $ 163.3
Operating
Profit: Rigid Industrial Packaging & Services $ 28.7 $ 0.1
$ 28.6 Paper Packaging & Services 10.8 — 10.8 Flexible Products
& Services 0.5 — 0.5 Land Management 2.1 —
2.1 Consolidated $ 42.1 $ 0.1 $
42.0
Operating profit before special
items10: Rigid Industrial Packaging &
Services $ 43.4 $ — $ 43.4 Paper Packaging & Services 19.9 —
19.9 Flexible Products & Services 1.6 — 1.6 Land Management 1.8
— 1.8 Consolidated $ 66.7
$ — $ 66.7
__________
10 See table contained herein entitled GAAP to
Non-GAAP Reconciliation Segment Operating Profit (Loss) Before
Special Items for a reconciliation of each segment’s operating
profit (loss) before special items.
GREIF, INC. AND SUBSIDIARY
COMPANIESGAAP TO NON-GAAP RECONCILIATIONSELECTED
FINANCIAL INFORMATIONEXCLUDING THE IMPACT OF DIVESTITURES
(CONTINUED)UNAUDITED(Dollars in millions)
Three months ended January 31, 2016
Impact of
Divestitures
Excluding the
Impact of
Divestitures
Net Sales: Rigid Industrial Packaging & Services $ 534.9
$ 25.2 $ 509.7 Paper Packaging & Services 158.4 — 158.4
Flexible Products & Services 72.9 2.3 70.6 Land Management 5.2
— 5.2 Consolidated $ 771.4 $
27.5 $ 743.9
Gross Profit: Rigid
Industrial Packaging & Services $ 102.8 $ 2.5 $ 100.3 Paper
Packaging & Services 35.8 — 35.8 Flexible Products &
Services 10.5 0.4 10.1 Land Management 2.2 —
2.2 Consolidated $ 151.3 $ 2.9 $ 148.4
Operating Profit (loss): Rigid Industrial
Packaging & Services $ (2.6 ) $ (24.7 ) $ 22.1 Paper Packaging
& Services 21.2 — 21.2 Flexible Products & Services (3.1 )
0.1 (3.2 ) Land Management 2.1 — 2.1
Consolidated $ 17.6 $ (24.6 ) $ 42.2
Operating profit (loss) before special
items11: Rigid Industrial Packaging &
Services $ 35.5 $ 0.1 $ 35.4 Paper Packaging & Services 22.7 —
22.7 Flexible Products & Services (1.6 ) 0.1 (1.7 ) Land
Management 1.5 — 1.5 Consolidated $
58.1 $ 0.2 $ 57.9
__________
11 See table contained herein entitled GAAP to
Non-GAAP Reconciliation Segment Operating Profit (Loss) Before
Special Items for a reconciliation of each segment’s operating
profit (loss) before special items.
GREIF, INC. AND SUBSIDIARY
COMPANIESGAAP TO NON-GAAP RECONCILIATIONNET SALES TO
NET SALES EXCLUDING THE IMPACT OFDIVESTITURES AND CURRENCY
TRANSLATIONUNAUDITED(Dollars in millions)
Three months ended January 31,
2017 2016 Increase inNet Sales
($) Increase inNet Sales (%) Net Sales $
820.9 $ 771.4 $ 49.5 6.4 % Impact of Divestitures — 27.5
Net Sales Excluding the Impact of Divestitures $
820.9 $ 743.9 Currency Translation (17.7 ) N/A
Net Sales
Excluding the Impact of Divestitures and Currency Translation $
838.6 $ 743.9 $ 94.7 12.7 %
GREIF, INC. AND SUBSIDIARY
COMPANIESGAAP TO NON-GAAP RECONCILIATIONRIGID
INDUSTRIAL PACKAGING & SERVICESNET SALES TO NET
SALES EXCLUDING THE IMPACT OFDIVESTITURES AND CURRENCY
TRANSLATIONUNAUDITED(Dollars in millions)
Three months ended January 31,
2017 2016 Increase inNet Sales
($) Increase inNet Sales (%) Net Sales $
561.5 $ 534.9 $ 26.6 5.0 % Impact of Divestitures — 25.2
Net Sales Excluding the Impact of Divestitures $
561.5 $ 509.7 Currency Translation (14.4 ) N/A
Net Sales
Excluding the Impact of Divestitures and Currency Translation $
575.9 $ 509.7 $ 66.2 13.0 %
GREIF, INC. AND SUBSIDIARY
COMPANIESGAAP TO NON-GAAP RECONCILIATIONPRIMARY
PRODUCTSNET SALES TO NET SALES EXCLUDING THE IMPACT OF
DIVESTITURESUNAUDITED(Dollars in millions)
Three months ended January 31,
2017 2016
Increase inPrimary
ProductsNet Sales ($)
Increase inPrimary
ProductsNet Sales (%)
Rigid Industrial Packaging & Services Primary Products
Net Sales $ 493.9 $ 446.5 Impact of Divestitures — —
Primary Products Net Sales Excluding the Impact of Divestitures $
493.9 $ 446.5 $ 47.4 10.6 %
Paper Packaging
& Services Primary Products Net Sales $ 182.4 $ 158.1
Impact of Divestitures — — Primary Products Net Sales
Excluding the Impact of Divestitures $ 182.4 $ 158.1
$ 24.3 15.3 %
Flexible Products & Services
Primary Products Net Sales $ 64.2 $ 64.1 Impact of Divestitures —
(2.3 ) Primary Products Net Sales Excluding the Impact of
Divestitures $ 64.2 $ 61.8 $ 2.4 3.9 %
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170301006334/en/
Greif, Inc.Matt Eichmann,
740-549-6067matt.eichmann@greif.com
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