DELAWARE, Ohio, Feb. 26,
2020 /PRNewswire/ -- Greif, Inc. (NYSE: GEF, GEF.B), a
world leader in industrial packaging products and services, today
announced first quarter 2020 results.
First Quarter Highlights include (all results compared to the
first quarter of 2019 unless otherwise noted):
- Net sales increased by $215.4
million to $1,112.4
million.
- Gross profit increased by $49.8
million to $222.6
million.
- Net income of $32.3 million or
$0.55 per diluted Class A share
increased compared to net income of $29.7
million or $0.51 per diluted
Class A share. Net income, excluding the impact of
adjustments(1), of $37.9
million or $0.64 per diluted
Class A share decreased compared to net income, excluding the
impact of adjustments, of $38.3
million or $0.65 per diluted
Class A share. Adjusted EBITDA(2) increased by
$41.1 million to $147.4 million.
- Net cash provided by operating activities increased by
$29.1 million to $19.5 million. Adjusted free cash
flow(3) increased by $22.3
million to a use of $13.3
million.
"Greif's performance in the first quarter was strong across all
strategic priorities," said Pete
Watson, Greif's President and Chief Executive Officer.
"Adjusted EBITDA rose by 39% to $147.4
million, driven by strong performance in our Rigid
Industrial Packaging & Services segment and the acquired
Caraustar operations. Our internal customer satisfaction index
score improved to an all-time high and we received several
recognitions for our sustainability leadership. While we continue
to face a challenging industrial market, our global Greif team is
successfully managing those areas within our control to deliver
strong performance."
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(1)
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A summary of all
adjustments that are excluded from net income before adjustments
and from earnings per diluted Class A share before adjustments are
set forth in the Selected Financial Highlights table following the
Company Outlook in this release.
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(2)
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Adjusted EBITDA is
defined as net income, plus interest expense, net, plus income tax
expense, plus depreciation, depletion and amortization expense,
plus restructuring charges, plus acquisition and integration
related costs, plus non-cash asset impairment charges, plus
non-cash pension settlement (income) charges, less (gain) loss on
disposal of properties, plants, equipment and businesses,
net.
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(3)
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Adjusted free cash
flow is defined as net cash provided by (used in) operating
activities, less cash paid for purchases of properties, plants and
equipment, plus cash paid for acquisition and integration related
costs, plus cash paid for acquisition and integration related
Enterprise Resource Planning (ERP) systems.
|
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.
Customer Service
The Company's consolidated CSI(4) score was 93.9
during the fiscal first quarter 2020. Our long term objective is
for each business to achieve a CSI score of 95.0 or greater.
CSI for the Rigid Industrial Packaging & Services segment
was 93.7, or approximately 3% higher than the prior year quarter.
CSI for the Flexible Products & Services segment was 93.6,
which was flat compared to the prior year quarter. CSI for the
Paper Packaging & Services segment fell by approximately 3% to
92.8, but excluding Caraustar operations would have been 95.6 and
flat to the prior year quarter.
Sustainability
The Company continues to make strong strides towards enhancing
its sustainability performance. During the first fiscal quarter
2020, the Company received the following recognitions related to
sustainability leadership:
- MSCI upgraded the Company's Environmental, Social and
Governance (ESG) rating to "A" from "BBB." The "A" rating reflects
Greif's concerted efforts towards reducing its environmental impact
and advancing responsible business practices. This is the highest
rating achieved by the Company to date.
- Newsweek named Greif to its 2020 list of America's Most
Responsible Companies for the first time. The list of 300 companies
was compiled from a detailed analysis of more than 2,000 public
companies, honoring businesses that give back to the communities in
which they operate and excel in corporate social responsibility and
citizenship efforts.
In addition, in early February
2020, the non-profit organization CDP (formerly the Carbon
Disclosure Project) awarded Greif a Supplier Engagement Rating
(SER) of "A" as a part of their annual climate change assessment of
companies globally. This rating earned the Company a position on
the Supplier Engagement Leaderboard, which consists of the top 3%
of 4,800 companies assessed by CDP for their actions and strategies
to reduce emissions and manage climate risks in their supply
chain.
Accounting Standard Changes
On November 1, 2019, the Company
adopted Accounting Standard Update 2016-02 Leases (Topic 842) and
related updates. The update included significant changes to the
accounting treatment for leases including the required
capitalization of certain operating leases on the balance sheet and
expanded disclosures. As of January 31,
2020, the Company's right of use asset and corresponding
lease liabilities related to the capitalized operating leases were
$327.2 million and $331.7 million, respectively. The adoption
had no impact to the Company's net financial position, results of
operations, or cash flows.
Segment Results (all results compared to the first quarter of
2019 unless otherwise noted)
Net sales are impacted mainly by the volume of primary
products(5) sold, selling prices, product mix and the
impact of changes in foreign currencies against the U.S. Dollar.
The table below shows the percentage impact of each of these items
on net sales for our primary products for the first quarter of 2020
as compared to the prior year quarter for the business segments
with manufacturing operations. Net sales from Caraustar's primary
products are not included in the table below, but will be included
in the Paper Packaging & Services segment starting in the
second quarter of fiscal 2020:
Net Sales Impact -
Primary Products
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Rigid Industrial
Packaging &
Services
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Paper Packaging &
Services
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Flexible Products
&
Services
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%
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%
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%
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Currency
Translation
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(1.5)%
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—%
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(1.5)%
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Volume
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(1.3)%
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(8.6)%
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(14.2)%
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Selling Prices and
Product Mix
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(1.8)%
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(7.0)%
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1.8%
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Total Impact of
Primary Products
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(4.6)%
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(15.6)%
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(13.9)%
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Rigid Industrial Packaging & Services
Net sales decreased by $29.2
million to $568.7 million. Net
sales excluding foreign currency translation decreased by
$24.7 million primarily due to
continued demand softness in the U.S. and APAC and lower average
sale prices primarily due to contractual price adjustment
mechanisms related to raw material price decreases, partially
offset by strategic pricing actions.
Gross profit increased by $9.2
million to $107.8 million. The
increase in gross profit was primarily due to the timing of
contractual pass through arrangements for raw material price
decreases.
Operating profit increased by $19.5
million to $42.8
million. Adjusted EBITDA increased by $13.8 million to $62.5
million primarily due to the same factors that impacted
gross profit and a reduction in the segment's SG&A expense.
Paper Packaging & Services
Net sales increased by $256.4
million to $473.7 million. The
increase in sales was primarily due to $288.2 million of contribution from the acquired
Caraustar operations, partially offset by demand softness and lower
published containerboard prices. The Company took approximately
21,000 tons of economic downtime across its containerboard
operations during the quarter.
Gross profit increased by $46.2
million to $100.1 million. The
increase in gross profit was primarily due to $57.4 million of contribution from the acquired
Caraustar operations and lower old corrugated container input
costs, partially offset by the same factors that impacted net
sales.
Operating profit decreased by $2.8
million to $32.5 million.
Adjusted EBITDA increased by $31.4
million to $77.9 million
primarily due to $47.2 million of
contribution from the acquired Caraustar operations, partially
offset by the same factors that impacted gross profit and higher
Caraustar related SG&A expense.
Flexible Products & Services
Net sales decreased by $12.1
million to $63.0 million. Net
sales excluding foreign currency translation decreased by
$11.0 million primarily due to
continued demand softness in Western
Europe.
Gross profit decreased by $5.1
million to $12.3 million
primarily due to the same factors that impact net sales.
Operating profit decreased by $4.0
million to $2.0 million.
Adjusted EBITDA decreased by $3.8
million to $4.1 million
primarily due to the same factors that impacted net sales,
partially offset by a reduction in the segment's SG&A
expense.
Land Management
Net sales increased by $0.3
million to $7.0 million.
Operating profit decreased by $0.7
million to $1.9 million.
Adjusted EBITDA decreased by $0.3
million to $2.9 million.
Tax Summary
During the first quarter, the Company recorded an income tax
rate of 24.1 percent and a tax rate excluding the impact of
adjustments of 24.3 percent. As previously disclosed, the
application of FIN 18 may cause fluctuations in our quarterly
effective tax rates. For Fiscal 2020, the Company expects its tax
rate to range between 28-32 percent and its tax rate excluding
adjustments to range between 27-31 percent.
Dividend Summary
On February 25, 2020, the Board of
Directors declared quarterly cash dividends of $0.44 per share of Class A Common Stock and
$0.66 per share of Class B Common
Stock. Dividends are payable on April 01,
2020, to stockholders of record at the close of business on
March 18, 2020.
Company Outlook
(in millions,
except per share amounts)
|
Fiscal 2020
Outlook
Reported at Q4
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Fiscal 2020
Outlook
Reported at Q1
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Class A earnings per
share before adjustments
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$3.63 -
$4.13
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$3.55 -
$3.91
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Adjusted free cash
flow
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$245 -
$285
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$265 -
$305
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Note: 2020 Class A earnings per share and tax rate guidance on a
GAAP basis are 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
settlement (income) charges; or acquisition and integration costs,
and the income tax effects of these items and other income
tax-related events. No reconciliation of the fiscal year 2020 Class
A earnings per share before adjustments guidance or tax rate
excluding the impact of adjustments guidance, both non-GAAP
financial measures which exclude gains and losses on the disposal
of businesses, timberland and properties, plants and equipment,
non-cash pension settlement (income) charges, acquisition and
integration costs, 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. A reconciliation of 2020 adjusted free cash
flow guidance to forecasted net cash provided by operating
activities, the most directly comparable GAAP financial measure, is
included in this release.
(4)
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Customer satisfaction
index (CSI) tracks a variety of internal metrics designed to
enhance the customer experience in dealing with Greif.
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(5)
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Primary products are
manufactured steel, plastic and fibre drums; new and reconditioned
intermediate bulk containers; linerboard, medium, corrugated sheets
and corrugated containers; and 1&2 loop and 4 loop flexible
intermediate bulk containers.
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Conference Call
The Company will host a conference call to discuss the first
quarter of 2020 results on February 27,
2020, at 8:30 a.m. Eastern
Time (ET). To participate, domestic callers should call
833-231-8265. The Greif ID is 2086583. The number for international
callers is +1-647-689-4110. Phone lines will open at 8:00 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: in industrial packaging, be
the best performing customer service company in the world. The
Company produces steel, plastic and fibre drums, intermediate bulk
containers, reconditioned containers, flexible products,
containerboard, uncoated recycled paperboard, coated recycled
paperboard, tubes and cores and a diverse mix of specialty
products. The Company also manufactures packaging accessories and
provides filling, packaging and other services for a wide range of
industries. In addition, Greif manages timber properties in the
southeastern United States. The
Company is strategically positioned in over 40 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, 2019. 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 growth objectives, (iii) our level of indebtedness could
adversely affect our liquidity, limit our flexibility in responding
to business opportunities, and increase our vulnerability to
adverse changes in economic and industry conditions, (iv) our
operations subject us to currency exchange and political risks that
could adversely affect our results of operations, (v) the current
and future challenging global economy and disruption and volatility
of the financial and credit markets may adversely affect our
business, (vi) the continuing consolidation of our customer base
and suppliers may intensify pricing pressure, (vii) we operate in
highly competitive industries, (viii) our business is sensitive to
changes in industry demands, (ix) raw material and energy price
fluctuations and shortages may adversely impact our manufacturing
operations and costs, (x) changes in U.S. trade policies could
impact the cost of imported goods into the U.S., which may
materially impact our revenues or increase our operating costs,
(xi) the results of the United
Kingdom's referendum on withdrawal from the European Union
may have a negative effect on global economic conditions, financial
markets and our business, (xii) geopolitical conditions, including
direct or indirect acts of war or terrorism, could have a material
adverse effect on our operations and financial results, (xiii) we
may encounter difficulties arising from acquisitions, (xiv) in
connection with acquisitions or divestitures, we may become subject
to liabilities, (xv) the acquisition of Caraustar Industries, Inc.
and its subsidiaries subjects us to various risks and
uncertainties, (xvi) we may incur additional restructuring costs
and there is no guarantee that our efforts to reduce costs will be
successful, (xvii) we could be subject to changes to our tax rates,
the adoption of new U.S. or foreign tax legislation or exposure to
additional tax liabilities, (xviii) full realization of our
deferred tax assets may be affected by a number of factors, (xix)
several operations are conducted by joint ventures that we cannot
operate solely for our benefit, (xx) certain of the agreements that
govern our joint ventures provide our partners with put or call
options, (xxi) our ability to attract, develop and retain talented
and qualified employees, managers and executives is critical to our
success, (xxii) our business may be adversely impacted by work
stoppages and other labor relations matters, (xxiii) we may not
successfully identify illegal immigrants in our workforce, (xxiv)
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, (xxv) we may be subject to losses that might not be
covered in whole or in part by existing insurance reserves or
insurance coverage, (xxvi) our business depends on the
uninterrupted operations of our facilities, systems and business
functions, including our information technology and other business
systems, (xxvii) 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, (xxviii)
legislation/regulation related to environmental and health and
safety matters and corporate social responsibility could negatively
impact our operations and financial performance, (xxix) product
liability claims and other legal proceedings could adversely affect
our operations and financial performance, (xxx) 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, (xxxi) our global operations subject us to the public health
epidemics affecting countries or regions in which we have
operations or do business, such as the coronavirus first identified
in China, which, if sustained,
could impact our employees, customers, supply chain and production
in affected regions, (xxxii) changing climate, climate change
regulations and greenhouse gas effects may adversely affect our
operations and financial performance, (xxxiii) the frequency and
volume of our timber and timberland sales will impact our financial
performance, (xxxiv) changes in U.S. generally accepted accounting
principles (GAAP) and SEC rules and regulations could materially
impact our reported results, (xxxv) if we fail to maintain an
effective system of internal control, we may not be able to
accurately report financial results or prevent fraud, and (xxxvi)
we have 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.
Contact:
Matt Eichmann
740-549-6067
matt.eichmann@greif.com
GREIF, INC. AND
SUBSIDIARY COMPANIES
|
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
|
UNAUDITED
|
|
|
Three months ended
January 31,
|
(in millions,
except per share amounts)
|
2020
|
|
2019
|
Net sales
|
$
|
1,112.4
|
|
$
|
897.0
|
Cost of products
sold
|
889.8
|
|
724.2
|
Gross
profit
|
222.6
|
|
172.8
|
Selling, general and
administrative expenses
|
135.4
|
|
98.1
|
Restructuring
charges
|
3.3
|
|
3.7
|
Acquisition and
integration related costs
|
5.1
|
|
2.6
|
Non-cash asset
impairment charges
|
0.1
|
|
2.1
|
Gain on disposal of
properties, plants and equipment, net
|
(0.5)
|
|
(0.9)
|
Operating
profit
|
79.2
|
|
67.2
|
Interest expense,
net
|
30.7
|
|
11.7
|
Non-cash pension
settlement income
|
(0.1)
|
|
—
|
Other (income)
expense, net
|
1.3
|
|
(0.2)
|
Income before income
tax expense and equity earnings of unconsolidated affiliates,
net
|
47.3
|
|
55.7
|
Income tax
expense
|
11.4
|
|
20.0
|
Equity earnings of
unconsolidated affiliates, net of tax
|
(0.2)
|
|
(0.1)
|
Net income
|
36.1
|
|
35.8
|
Net income
attributable to noncontrolling interests
|
(3.8)
|
|
(6.1)
|
Net income
attributable to Greif, Inc.
|
$
|
32.3
|
|
$
|
29.7
|
Basic earnings per
share attributable to Greif, Inc. common
shareholders:
|
|
|
|
Class A common
stock
|
$
|
0.55
|
|
$
|
0.51
|
Class B common
stock
|
$
|
0.81
|
|
$
|
0.75
|
Diluted earnings
per share attributable to Greif, Inc. common
shareholders:
|
|
|
|
Class A common
stock
|
$
|
0.55
|
|
$
|
0.51
|
Class B common
stock
|
$
|
0.81
|
|
$
|
0.75
|
Shares used to
calculate basic earnings per share attributable to Greif, Inc.
common
shareholders:
|
|
|
|
Class A common
stock
|
26.3
|
|
26.0
|
Class B common
stock
|
22.0
|
|
22.0
|
Shares used to
calculate diluted earnings per share attributable to Greif, Inc.
common
shareholders:
|
|
|
|
Class A common
stock
|
26.4
|
|
26.0
|
Class B common
stock
|
22.0
|
|
22.0
|
GREIF, INC. AND
SUBSIDIARY COMPANIES
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
UNAUDITED
|
|
(in
millions)
|
January 31,
2020
|
|
October 31,
2019
|
ASSETS
|
|
|
|
CURRENT
ASSETS
|
|
|
|
Cash and cash
equivalents
|
$
|
90.8
|
|
$
|
77.3
|
Trade accounts
receivable
|
641.7
|
|
664.2
|
Inventories
|
370.9
|
|
358.2
|
Assets held by
special purpose entities
|
50.9
|
|
—
|
Other current
assets
|
153.3
|
|
149.3
|
|
1,307.6
|
|
1,249.0
|
LONG-TERM
ASSETS
|
|
|
|
Goodwill
|
1,522.1
|
|
1,517.8
|
Intangible
assets
|
758.9
|
|
776.5
|
Assets held by
special purpose entities
|
—
|
|
50.9
|
Operating lease
assets
|
327.2
|
|
—
|
Other long-term
assets
|
140.9
|
|
142.2
|
|
2,749.1
|
|
2,487.4
|
PROPERTIES, PLANTS
AND EQUIPMENT
|
1,664.8
|
|
1,690.3
|
|
$
|
5,721.5
|
|
$
|
5,426.7
|
LIABILITIES AND
EQUITY
|
|
|
|
CURRENT
LIABILITIES
|
|
|
|
Accounts
payable
|
$
|
389.8
|
|
$
|
435.2
|
Short-term
borrowings
|
5.3
|
|
9.2
|
Current portion of
long-term debt
|
83.8
|
|
83.7
|
Current portion of
operating lease liabilities
|
60.3
|
|
—
|
Current portion of
liabilities held by special purpose entities
|
43.3
|
|
—
|
Other current
liabilities
|
241.7
|
|
297.3
|
|
824.2
|
|
825.4
|
LONG-TERM
LIABILITIES
|
|
|
|
Long-term
debt
|
2,719.0
|
|
2,659.0
|
Liabilities held by
special purpose entities
|
—
|
|
43.3
|
Operating lease
liabilities
|
271.4
|
|
—
|
Other long-term
liabilities
|
666.4
|
|
686.6
|
|
3,656.8
|
|
3,388.9
|
REDEEMABLE
NONCONTROLLING INTERESTS
|
17.8
|
|
21.3
|
EQUITY
|
|
|
|
Total Greif, Inc.
equity
|
1,163.8
|
|
1,133.1
|
Noncontrolling
interests
|
58.9
|
|
58.0
|
|
1,222.7
|
|
1,191.1
|
|
$
|
5,721.5
|
|
$
|
5,426.7
|
GREIF, INC. AND
SUBSIDIARY COMPANIES
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
UNAUDITED
|
|
|
Three months ended
January 31,
|
(in
millions)
|
2020
|
|
2019
|
CASH FLOWS FROM
OPERATING ACTIVITIES:
|
|
|
|
Net income
|
$
|
36.1
|
|
$
|
35.8
|
Depreciation,
depletion and amortization
|
61.3
|
|
31.3
|
Asset
impairments
|
0.1
|
|
2.1
|
Pension settlement
income
|
(0.1)
|
|
—
|
Other non-cash
adjustments to net income
|
7.6
|
|
(2.4)
|
Operating working
capital changes
|
(27.7)
|
|
(45.5)
|
Deferred purchase
price on sold receivables
|
—
|
|
(6.9)
|
Increase (decrease)
in cash from changes in other assets and liabilities
|
(57.8)
|
|
(24.0)
|
Net cash provided by
(used in) operating activities
|
19.5
|
|
(9.6)
|
CASH FLOWS FROM
INVESTING ACTIVITIES:
|
|
|
|
Purchases of
properties, plants and equipment
|
(37.5)
|
|
(26.0)
|
Purchases of and
investments in timber properties
|
(1.6)
|
|
(0.9)
|
Proceeds from the
sale of properties, plants and equipment, businesses, timberland
and other
assets
|
1.5
|
|
2.3
|
Proceeds on insurance
recoveries
|
—
|
|
0.2
|
Net cash used in
investing activities
|
(37.6)
|
|
(24.4)
|
CASH FLOWS FROM
FINANCING ACTIVITIES:
|
|
|
|
Proceeds from
(payments on) debt, net
|
58.5
|
|
61.0
|
Dividends paid to
Greif, Inc. shareholders
|
(25.9)
|
|
(25.7)
|
Other
|
(0.8)
|
|
(12.3)
|
Net cash provided by
(used in) financing activities
|
31.8
|
|
23.0
|
Reclassification of
cash to assets held for sale
|
—
|
|
(0.4)
|
Effects of exchange
rates on cash
|
(0.2)
|
|
1.7
|
Net increase
(decrease) in cash and cash equivalents
|
13.5
|
|
(9.7)
|
Cash and cash
equivalents, beginning of period
|
77.3
|
|
94.2
|
Cash and cash
equivalents, end of period
|
$
|
90.8
|
|
$
|
84.5
|
GREIF, INC. AND
SUBSIDIARY COMPANIES
|
FINANCIAL
HIGHLIGHTS BY SEGMENT
|
UNAUDITED
|
|
|
Three months ended
January 31,
|
(in
millions)
|
2020
|
|
2019
|
Net
sales:
|
|
|
|
Rigid Industrial
Packaging & Services
|
$
|
568.7
|
|
$
|
597.9
|
Paper
Packaging & Services
|
473.7
|
|
217.3
|
Flexible
Products & Services
|
63.0
|
|
75.1
|
Land
Management
|
7.0
|
|
6.7
|
Total net
sales
|
$
|
1,112.4
|
|
$
|
897.0
|
Gross
profit:
|
|
|
|
Rigid Industrial
Packaging & Services
|
$
|
107.8
|
|
$
|
98.6
|
Paper
Packaging & Services
|
100.1
|
|
53.9
|
Flexible
Products & Services
|
12.3
|
|
17.4
|
Land
Management
|
2.4
|
|
2.9
|
Total gross
profit
|
$
|
222.6
|
|
$
|
172.8
|
Operating
profit:
|
|
|
|
Rigid Industrial
Packaging & Services
|
$
|
42.8
|
|
$
|
23.3
|
Paper
Packaging & Services
|
32.5
|
|
35.3
|
Flexible
Products & Services
|
2.0
|
|
6.0
|
Land
Management
|
1.9
|
|
2.6
|
Total operating
profit
|
$
|
79.2
|
|
$
|
67.2
|
EBITDA(6):
|
|
|
|
Rigid Industrial
Packaging & Services
|
$
|
60.0
|
|
$
|
43.2
|
Paper
Packaging & Services
|
73.0
|
|
44.0
|
Flexible
Products & Services
|
3.6
|
|
7.9
|
Land
Management
|
2.9
|
|
3.7
|
Total
EBITDA
|
$
|
139.5
|
|
$
|
98.8
|
Adjusted
EBITDA(7):
|
|
|
|
Rigid Industrial
Packaging & Services
|
$
|
62.5
|
|
$
|
48.7
|
Paper
Packaging & Services
|
77.9
|
|
46.5
|
Flexible
Products & Services
|
4.1
|
|
7.9
|
Land
Management
|
2.9
|
|
3.2
|
Total Adjusted
EBITDA
|
$
|
147.4
|
|
$
|
106.3
|
|
(6)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 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.
|
(7)Adjusted EBITDA is defined as net
income, plus interest expense, net, plus income tax expense, plus
depreciation, depletion and amortization expense, plus
restructuring charges, plus acquisition and integration related
costs, plus non-cash impairment charges, plus non-cash pension
settlement (income) charges, less (gain) loss on disposal of
properties, plants, equipment and businesses, net.
|
GREIF, INC. AND
SUBSIDIARY COMPANIES
|
GAAP TO NON-GAAP
RECONCILIATION
|
CONSOLIDATED
ADJUSTED EBITDA(8)
|
UNAUDITED
|
|
|
Three months ended
January 31,
|
(in
millions)
|
2020
|
|
2019
|
Net income
|
$
|
36.1
|
|
$
|
35.8
|
Plus: Interest
expense, net
|
30.7
|
|
11.7
|
Plus: Income tax
expense
|
11.4
|
|
20.0
|
Plus: Depreciation,
depletion and amortization expense
|
61.3
|
|
31.3
|
EBITDA
|
$
|
139.5
|
|
$
|
98.8
|
Net income
|
$
|
36.1
|
|
$
|
35.8
|
Plus: Interest
expense, net
|
30.7
|
|
11.7
|
Plus: Income tax
expense
|
11.4
|
|
20.0
|
Plus: Non-cash
pension settlement income
|
(0.1)
|
|
—
|
Plus: Other expense,
net
|
1.3
|
|
(0.2)
|
Plus: Equity earnings
of unconsolidated affiliates, net of tax
|
(0.2)
|
|
(0.1)
|
Operating
profit
|
$
|
79.2
|
|
$
|
67.2
|
Less: Other expense,
net
|
1.3
|
|
(0.2)
|
Less: Non-cash
pension settlement income
|
(0.1)
|
|
—
|
Less: Equity earnings
of unconsolidated affiliates, net of tax
|
(0.2)
|
|
(0.1)
|
Plus: Depreciation,
depletion and amortization expense
|
61.3
|
|
31.3
|
EBITDA
|
$
|
139.5
|
|
$
|
98.8
|
Plus: Restructuring
charges
|
3.3
|
|
3.7
|
Plus: Acquisition and
integration related costs
|
5.1
|
|
2.6
|
Plus: Non-cash asset
impairment charges
|
0.1
|
|
2.1
|
Plus: Non-cash
pension settlement income
|
(0.1)
|
|
—
|
Less: Gain on
disposal of properties, plants, equipment, and businesses,
net
|
(0.5)
|
|
(0.9)
|
Adjusted
EBITDA
|
$
|
147.4
|
|
$
|
106.3
|
|
(8)
Adjusted EBITDA is defined as net income, plus interest expense,
net, plus income tax expense, plus depreciation, depletion and
amortization expense, plus restructuring charges, plus acquisition
and integration related costs, plus non-cash impairment charges,
plus non-cash pension settlement (income) charges, less (gain) loss
on disposal of properties, plants, equipment and businesses,
net.
|
GREIF, INC. AND
SUBSIDIARY COMPANIES
|
GAAP TO NON-GAAP
RECONCILIATION
|
SEGMENT ADJUSTED
EBITDA(9)
|
UNAUDITED
|
|
|
Three months ended
January 31,
|
(in
millions)
|
2020
|
|
2019
|
Rigid Industrial
Packaging & Services
|
|
|
|
Operating
profit
|
42.8
|
|
23.3
|
Less: Other (income)
expense, net
|
2.6
|
|
(0.1)
|
Less: Equity earnings
of unconsolidated affiliates, net of tax
|
(0.2)
|
|
(0.1)
|
Plus: Depreciation
and amortization expense
|
19.6
|
|
19.7
|
EBITDA
|
$
|
60.0
|
|
$
|
43.2
|
Plus: Restructuring
charges
|
1.8
|
|
3.6
|
Plus: Acquisition and
integration related costs
|
—
|
|
0.1
|
Plus: Non-cash asset
impairment charges
|
0.1
|
|
2.1
|
Less: (Gain) loss on
disposal of properties, plants, equipment, and businesses,
net
|
0.6
|
|
(0.3)
|
Adjusted
EBITDA
|
$
|
62.5
|
|
$
|
48.7
|
Paper
Packaging & Services
|
|
|
|
Operating
profit
|
32.5
|
|
35.3
|
Less: Other (income)
expense, net
|
(1.2)
|
|
0.1
|
Less: Non-cash
pension settlement income
|
(0.1)
|
|
—
|
Plus: Depreciation
and amortization expense
|
39.2
|
|
8.8
|
EBITDA
|
$
|
73.0
|
|
$
|
44.0
|
Plus: Restructuring
charges
|
1.0
|
|
0.1
|
Plus: Acquisition and
integration related costs
|
5.1
|
|
2.5
|
Plus: Non-cash
pension settlement income
|
(0.1)
|
|
—
|
Less: Gain on
disposal of properties, plants, equipment, net
|
(1.1)
|
|
(0.1)
|
Adjusted
EBITDA
|
$
|
77.9
|
|
$
|
46.5
|
Flexible
Products & Services
|
|
|
|
Operating
profit
|
2.0
|
|
6.0
|
Less: Other income,
net
|
(0.1)
|
|
(0.2)
|
Plus: Depreciation
and amortization expense
|
1.5
|
|
1.7
|
EBITDA
|
$
|
3.6
|
|
$
|
7.9
|
Plus: Restructuring
charges
|
0.5
|
|
—
|
Adjusted
EBITDA
|
$
|
4.1
|
|
$
|
7.9
|
Land
Management
|
|
|
|
Operating
profit
|
1.9
|
|
2.6
|
Plus: Depreciation,
depletion and amortization expense
|
1.0
|
|
1.1
|
EBITDA
|
$
|
2.9
|
|
$
|
3.7
|
Less: Gain on
disposal of properties, plants, equipment, net
|
—
|
|
(0.5)
|
Adjusted
EBITDA
|
$
|
2.9
|
|
$
|
3.2
|
Consolidated
EBITDA
|
$
|
139.5
|
|
$
|
98.8
|
Consolidated Adjusted
EBITDA
|
$
|
147.4
|
|
$
|
106.3
|
|
(9)
Adjusted EBITDA is defined as net income, plus interest expense,
net, plus income tax expense, plus depreciation, depletion and
amortization expense, plus restructuring charges, plus acquisition
and integration related costs, plus non-cash impairment charges,
plus non-cash pension settlement (income) charges, less (gain) loss
on disposal of properties, plants, equipment and businesses, net.
However, because the Company does not calculate net income by
segment, this table calculates adjusted EBITDA by segment with
reference to operating profit by segment, which, as demonstrated in
the table of consolidated adjusted EBITDA, is another method to
achieve the same result.
|
GREIF, INC. AND
SUBSIDIARY COMPANIES
|
GAAP TO NON-GAAP
RECONCILIATION
|
ADJUSTED FREE CASH
FLOW(10)
|
UNAUDITED
|
|
|
Three months ended
January 31,
|
(in
millions)
|
2020
|
|
2019
|
Net cash provided
by (used in) operating activities
|
$
|
19.5
|
|
$
|
(9.6)
|
Cash paid for
purchases of properties, plants and equipment
|
(37.5)
|
|
(26.0)
|
Free cash
flow
|
$
|
(18.0)
|
|
$
|
(35.6)
|
Cash paid for
acquisition and integration related costs
|
4.1
|
|
—
|
Cash paid for
acquisition and integration related ERP systems
|
$
|
0.6
|
|
$
|
—
|
Adjusted free cash
flow
|
$
|
(13.3)
|
|
$
|
(35.6)
|
|
(10)Adjusted free cash flow is defined as
net cash provided by (used in) operating activities, less cash paid
for purchases of properties, plants and equipment, plus cash paid
for acquisition and integration related costs, plus cash paid for
acquisition and integration related ERP systems.
|
GREIF, INC. AND
SUBSIDIARY COMPANIES
|
GAAP TO NON-GAAP
RECONCILIATION
|
NET INCOME, CLASS
A EARNINGS PER SHARE AND TAX RATE BEFORE ADJUSTMENTS
|
UNAUDITED
|
|
(in millions,
except for per share amounts)
|
Income before
Income Tax
(Benefit)
Expense and
Equity
Earnings of
Unconsolidated
Affiliates, net
|
|
Income
Tax
(Benefit)
Expense
|
|
Equity
Earnings
|
|
Non-
Controlling
Interest
|
|
Net
Income Attributable
to
Greif, Inc.
|
|
Diluted
Class A
Earnings
Per
Share
|
|
Tax
Rate
|
Three months ended
January 31, 2020
|
$
|
47.3
|
|
$
|
11.4
|
|
$
|
(0.2)
|
|
$
|
3.8
|
|
$
|
32.3
|
|
$
|
0.55
|
|
24.1%
|
Gain on disposal of
properties, plants, equipment
and businesses, net
|
(0.5)
|
|
(0.1)
|
|
—
|
|
—
|
|
(0.4)
|
|
(0.01)
|
|
|
Restructuring
charges
|
3.3
|
|
0.9
|
|
—
|
|
0.3
|
|
2.1
|
|
0.04
|
|
|
Acquisition and
integration related costs
|
5.1
|
|
1.2
|
|
—
|
|
—
|
|
3.9
|
|
0.06
|
|
|
Non-cash asset
impairment charges
|
0.1
|
|
—
|
|
—
|
|
—
|
|
0.1
|
|
—
|
|
|
Non-cash pension
settlement income
|
(0.1)
|
|
—
|
|
—
|
|
—
|
|
(0.1)
|
|
—
|
|
|
Excluding
Adjustments
|
$
|
55.2
|
|
$
|
13.4
|
|
$
|
(0.2)
|
|
$
|
4.1
|
|
$
|
37.9
|
|
$
|
0.64
|
|
24.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
January 31, 2019
|
$
|
55.7
|
|
$
|
20.0
|
|
$
|
(0.1)
|
|
$
|
6.1
|
|
$
|
29.7
|
|
$
|
0.51
|
|
35.9%
|
Gain on disposal of
properties, plants, equipment
and businesses, net
|
(0.9)
|
|
(0.2)
|
|
—
|
|
(0.1)
|
|
(0.6)
|
|
(0.01)
|
|
|
Restructuring
charges
|
3.7
|
|
0.9
|
|
—
|
|
—
|
|
2.8
|
|
0.04
|
|
|
Acquisition and
integration related costs
|
2.6
|
|
0.1
|
|
—
|
|
—
|
|
2.5
|
|
0.04
|
|
|
Non-cash asset
impairment charges
|
2.1
|
|
—
|
|
—
|
|
—
|
|
2.1
|
|
0.04
|
|
|
Tax net benefit
resulting from the Tax Reform Act
|
—
|
|
(1.8)
|
|
—
|
|
—
|
|
1.8
|
|
0.03
|
|
|
Excluding
Adjustments
|
$
|
63.2
|
|
$
|
19.0
|
|
$
|
(0.1)
|
|
$
|
6.0
|
|
$
|
38.3
|
|
$
|
0.65
|
|
30.1%
|
The impact of income tax expense and non-controlling interest on
each adjustment is calculated based on tax rates and ownership
percentages specific to each applicable entity.
GREIF, INC. AND
SUBSIDIARY COMPANIES
|
GAAP TO NON-GAAP
RECONCILIATION
|
NET SALES TO NET
SALES EXCLUDING THE IMPACT OF
|
CURRENCY
TRANSLATION
|
UNAUDITED
|
|
|
Three months ended
January 31,
|
|
|
(in
millions)
|
2020
|
|
2019
|
|
Increase in
Net Sales ($)
|
|
Increase in
Net Sales (%)
|
Consolidated
|
|
|
|
|
|
|
|
Net Sales
|
$
|
1,112.4
|
|
$
|
897.0
|
|
$
|
215.4
|
|
24.0%
|
Currency
Translation
|
5.5
|
|
N/A
|
|
|
|
|
Net Sales Excluding
the Impact of Currency Translation
|
$
|
1,117.9
|
|
$
|
897.0
|
|
$
|
220.9
|
|
24.6%
|
Rigid Industrial
Packaging & Services
|
|
|
|
|
|
|
|
Net Sales
|
$
|
568.7
|
|
$
|
597.9
|
|
$
|
(29.2)
|
|
(4.9)%
|
Currency
Translation
|
4.5
|
|
N/A
|
|
|
|
|
Net Sales Excluding
the Impact of Currency Translation
|
$
|
573.2
|
|
$
|
597.9
|
|
$
|
(24.7)
|
|
(4.1)%
|
Flexible
Products & Services
|
|
|
|
|
|
|
|
Net Sales
|
$
|
63.0
|
|
$
|
75.1
|
|
$
|
(12.1)
|
|
(16.1)%
|
Currency
Translation
|
1.1
|
|
N/A
|
|
|
|
|
Net Sales Excluding
the Impact of Currency Translation
|
$
|
64.1
|
|
$
|
75.1
|
|
$
|
(11.0)
|
|
(14.6)%
|
GREIF, INC. AND
SUBSIDIARY COMPANIES
|
PROJECTED 2020
GUIDANCE RECONCILIATION
|
ADJUSTED FREE CASH
FLOW
|
UNAUDITED
|
|
|
Fiscal 2020
Guidance Range
|
(in
millions)
|
Scenario
1
|
|
Scenario
2
|
Net cash provided
by operating activities
|
$
|
415.0
|
|
$
|
470.0
|
Cash paid for
purchases of properties, plants and equipment
|
(181.0)
|
|
(201.0)
|
Free cash
flow
|
$
|
234.0
|
|
$
|
269.0
|
Cash paid for
acquisition and integration related costs
|
10.0
|
|
15.0
|
Cash paid for
acquisition and integration related ERP systems
|
21.0
|
|
21.0
|
Adjusted free cash
flow
|
$
|
265.0
|
|
$
|
305.0
|
GREIF, INC. AND
SUBSIDIARY COMPANIES
|
PROJECTED 2020
MODELING ASSUMPTIONS
|
UNAUDITED
|
|
(in
millions)
|
Fiscal 2020
Modeling
Assumptions
Reported at Q1
|
Depreciation &
amortization expense
|
$247 -
$257
|
Interest expense,
net
|
$119 -
$124
|
Other expense,
net
|
$2.5 -
$7.5
|
Net income
attributable to noncontrolling interest
|
$17 - $22
|
Tax rate excluding
the impact of adjustments
|
27% - 31%
|
Capital expenditures
excluding cash paid for acquisition and integration related
ERP systems
|
$160 -
$180
|
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SOURCE Greif, Inc.