DELAWARE, Ohio, Aug. 30,
2023 /PRNewswire/ -- Greif, Inc. (NYSE: GEF, GEF.B),
a global leader in industrial packaging products and services,
today announced third quarter 2023 results.
Third Quarter Financial Highlights include (all
results compared to the third quarter of 2022 unless otherwise
noted):
- Net income of $90.3 million or
$1.55 per diluted Class A share
decreased compared to net income of $141.8
million or $2.36 per diluted
Class A share. Net income, excluding the impact of
adjustments(1), of $102.1
million or $1.75 per diluted
Class A share decreased compared to net income, excluding the
impact of adjustments, of $141.7
million or $2.35 per diluted
Class A share.
- Gross profit decreased only $39.9
million compared to a net sales decrease of $291.8 million due to the continued cost
management actions implemented.
- Adjusted EBITDA(2) of $226.5
million decreased by $24.5
million compared to Adjusted EBITDA of $251.0 million.
- Net cash provided by operating activities decreased by
$7.0 million to $202.3 million. Adjusted free cash
flow(3) decreased by $8.7
million to a source of $167.1
million.
- Total debt of $2,171.5 million
increased by $112.8 million. Net
debt(4) increased by $82.6
million to $2,013.8 million.
Our leverage ratio(5) decreased to 2.17x from 2.25x
sequentially, which is within our targeted leverage ratio range of
2.0x - 2.5x, and increased from 1.99x in the prior year
quarter.
Strategic Actions and Announcements
- Acquisition of a 51% ownership interest in ColePak, LLC on
August 23, 2023. ColePak is a
manufacturer of bulk and specialty partitions made from both
containerboard and uncoated recycled board serving a broad range of
applications in food, beverage, and other markets. This business
provides a unique and margin-accretive converting capability to
Greif's Paper Packaging & Services business segment and offers
incremental integration benefits to our containerboard and uncoated
recycled board mills.
- Announced increase of our quarterly dividend per share by
$0.02 and $0.03 for Class A and Class B shares,
respectively. This quarterly dividend increase is aligned with our
broader capital allocation strategy and is a testament to the
growth and continued strength of our free cash flow
generation.
CEO Commentary
"Our team has once again demonstrated exceptional performance in
delivering strong earnings, margin, and free cash flow performance
despite continued volume challenges and ongoing uncertainty in
end-markets worldwide," commented Ole
Rosgaard, President and Chief Executive Office of Greif.
"Our Build to Last strategy is clearly delivering value as we
execute on our cost-management playbook and gain new business, with
mix and margin benefits, underpinned by a continuous improvement
focus throughout the enterprise. Collectively, these efforts drove
EBITDA performance above our expectations and resulted in an
impressive free cash flow conversion of nearly 75% in the quarter,
truly a commendable outcome considering an average volume decline
of 13% across our global product portfolio. While the macroeconomic
picture continues to be unclear, we remain focused on executing
consistently and serving our customers with excellence and superior
customer service. I sincerely thank the entire Greif team for their
dedication and hard work through a challenging quarter."
Build to Last Mission Progress
Customer satisfaction is a key component of our mission to
deliver Legendary Customer Service. Our consolidated
CSI(6) score was 94.2 at the end of the third quarter
2023. Paper Packaging & Services CSI score was 93.6, and Global
Industrial Packaging CSI score was 94.9. We thank our customers for
their continued feedback which is critical to helping us achieve
our vision to be the best performing customer service company in
the world, and we are proud to continue to earn positive feedback
from our customers throughout a difficult global operating
environment.
In addition to delivering Legendary Customer Service, a key
element of our Build to Last Strategy is Creating Thriving
Communities for our colleagues. Building upon the successes
to-date, this quarter we launched our first-ever Colleague Stock
Purchase Plan to all colleagues in the
United States. This plan enables our colleagues to acquire
Greif stock at a discount to market prices and to enjoy the
financial benefits of owning shares. We also believe further
aligning colleague interests with the rest of our shareholders will
drive incremental performance and accountability benefits, as well
as accelerate idea generation to improve our operations. We are
excited to launch this program and welcome a growing number of our
colleagues to our investor community.
(1)
|
Adjustments that are
excluded from net income before adjustments and from earnings per
diluted Class A share before adjustments are restructuring charges,
acquisition and integration related costs, non-cash asset
impairment charges, (gain) loss on disposal of properties, plants,
equipment and businesses, net.
|
(2)
|
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 (gain)
loss on disposal of properties, plants, equipment and businesses,
net.
|
(3)
|
Adjusted free cash flow
is defined as net cash provided by 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 integration related Enterprise Resource Planning (ERP) systems
and equipment, plus cash paid for taxes related to Tama, Iowa mill
divestment.
|
(4)
|
Net debt is defined as
total debt less cash and cash equivalents.
|
(5)
|
Leverage ratio for the
periods indicated is defined as net debt divided by trailing twelve
month EBITDA, each as calculated under the terms of the Company's
Second Amended and Restated Credit Agreement dated as of March 1,
2022, filed as Exhibit 10.1 to the Company's Quarterly Report on
Form 10-Q for the fiscal quarter ended January 31, 2022 (the "2022
Credit Agreement").
|
(6)
|
Customer satisfaction
index (CSI) tracks a variety of internal metrics designed to
enhance the customer experience in dealing with Greif.
|
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.
Segment Results (all results compared to the third quarter of
2022 unless otherwise noted)
Net sales are impacted mainly by the volume of primary
products(7) 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 third quarter of 2023
as compared to the prior year quarter for the business segments
with manufacturing operations. Net sales from Lee Container and
Centurion Container's primary products are not included in the
table below, but will be included in the Global Industrial
Packaging segment starting in the first quarter and second quarter
of fiscal 2024 respectively.
Net Sales Impact -
Primary Products
|
Global Industrial
Packaging
|
|
Paper Packaging &
Services
|
Currency
Translation
|
(2.3) %
|
|
(0.1) %
|
Volume
|
(12.6) %
|
|
(13.7) %
|
Selling Prices and
Product Mix
|
(7.4) %
|
|
(5.9) %
|
Total Impact of
Primary Products
|
(22.3) %
|
|
(19.7) %
|
Global Industrial Packaging
Net sales decreased by $144.9
million to $761.8 million
primarily due to lower volumes and lower average selling
prices.
Gross profit decreased by $0.9
million to $176.8 million. The
decrease in gross profit was primarily due to the same factors that
impacted net sales and higher depreciation and amortization
expenses, partially offset by lower raw material, transportation
and manufacturing costs.
Operating profit decreased by $5.2
million to $102.0 million
primarily due to the same factors that impacted gross profit.
Adjusted EBITDA increased by $9.4
million to $126.5 million
primarily due to lower raw material, transportation and
manufacturing costs excluding depreciation and amortization
expenses, partially offset by the same factors that impacted net
sales.
Paper Packaging & Services
Net sales decreased by $146.3
million to $563.9 million
primarily due to lower volumes and lower average selling
prices.
Gross profit decreased by $39.2
million to $128.1 million. The
decrease in gross profit was primarily due to the same factors that
impacted net sales, partially offset by lower raw material,
transportation and manufacturing costs.
Operating profit decreased by $44.6
million to $52.1 million
primarily due to the same factors that impacted gross profit.
Adjusted EBITDA decreased by $33.7
million to $98.1 million
primarily due to the same factors that impacted gross profit.
Tax Summary
During the third quarter, we recorded an income tax rate percent
and a tax rate excluding the impact of adjustments of 24.5 percent.
Note that the application of FIN 18 frequently causes fluctuations
in our quarterly effective tax rates. For fiscal 2023, we expect
our tax rate and our tax rate excluding adjustments to be towards
the high-end of our 23.0 to 27.0 percent range.
Dividend Summary
On August 29, 2023, the Board of
Directors declared quarterly cash dividends of $0.52 per share of Class A Common Stock and
$0.78 per share of Class B Common
Stock. Dividends are payable on October 1,
2023, to stockholders of record at the close of business on
September 15, 2023.
(7)
|
Primary products are
manufactured steel, plastic and fibre drums; new and reconditioned
intermediate bulk containers; linerboard, containerboard,
corrugated sheets and corrugated containers; and boxboard and tube
and core products.
|
Company Outlook
(in
millions)
|
Fiscal 2023
Outlook
Reported at Q3
|
Adjusted
EBITDA
|
$790 - $820
|
Adjusted free cash
flow
|
$400 - $430
|
Note: Fiscal 2023 net income, the most directly comparable GAAP
financial measure to Adjusted EBITDA, 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:
restructuring-related activities; acquisition and integration
related costs; non-cash pension settlement charges; non-cash asset
impairment charges due to unanticipated changes in the business;
gains or losses on the disposal of businesses or properties, plants
and equipment, net. No reconciliation of the 2023 guidance of
Adjusted EBITDA, a non-GAAP financial measure which excludes
restructuring charges, acquisition and integration costs, non-cash
asset impairment charges, non-cash pension settlement charges, and
(gain) loss on the disposal of properties, plants, equipment and
businesses, net, 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 net income, the most directly comparable GAAP
financial measure, without unreasonable efforts. A reconciliation
of the 2023 guidance of adjusted free cash flow to fiscal 2023
forecasted net cash provided by operating activities, the most
directly comparable GAAP financial measure, is included in this
release.
Conference Call
The Company will host a conference call to discuss third quarter
2023 results on August 31, 2023, at
8:30 a.m. Eastern Time (ET).
Participants may access the call using the following online
registration link:
https://register.vevent.com/register/BI6181bb19be8d45c68f4259ed9acf6e79.
Registrants will receive a confirmation email containing dial in
details and a unique conference call code for entry. Phone lines
will open at 8:00 a.m. ET on
August 31, 2023. A digital replay of the conference call will
be available two hours following the call on the Company's web site
at http://investor.greif.com.
Investor Relations contact information
Matt Leahy, Vice President,
Corporate Development & Investor Relations, 740-549-6158.
Matthew.Leahy@Greif.com
About Greif
Greif is a global leader in industrial packaging products and
services and is pursuing its vision: to be the best performing
customer service company in the world. The Company produces steel,
plastic and fibre drums, intermediate bulk containers,
reconditioned containers, jerrycans and other small plastics,
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 35 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, 2022. 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) our global
operations subject us to political risks, instability and currency
exchange that could adversely affect our results of operations,
(iii) the current and future challenging global economy and
disruption and volatility of the financial and credit markets may
adversely affect our business, (iv) the COVID-19 pandemic could
continue to impact any combination of our business, financial
condition, results of operations and cash flows, (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 and
customer preferences, (viii) raw material, price fluctuations,
global supply chain disruptions and increased inflation may
adversely impact our results of operations, (ix) energy and
transportation price fluctuations and shortages may adversely
impact our manufacturing operations and costs, (x) we may not
successfully implement our business strategies, including achieving
our growth objectives, (xi) we may encounter difficulties or
liabilities arising from acquisitions or divestitures, (xii) we may
incur additional rationalization costs and there is no guarantee
that our efforts to reduce costs will be successful, (xiii) several
operations are conducted by joint ventures that we cannot operate
solely for our benefit, (xiv) certain of the agreements that govern
our joint ventures provide our partners with put or call options,
(xv) our ability to attract, develop and retain talented and
qualified employees, managers and executives is critical to our
success, (xvi) our business may be adversely impacted by work
stoppages and other labor relations matters, (xvii) we may be
subject to losses that might not be covered in whole or in part by
existing insurance reserves or insurance coverage and general
insurance premium and deductible increases, (xviii) our business
depends on the uninterrupted operations of our facilities, systems
and business functions, including our information technology and
other business systems, (xix) a security breach of customer,
employee, supplier or Company information and data privacy risks
and costs of compliance with new regulations may have a material
adverse effect on our business, financial condition, results of
operations and cash flows, (xx) 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, (xxi) full realization
of our deferred tax assets may be affected by a number of factors,
(xxii) we have a significant amount of goodwill and long-lived
assets which, if impaired in the future, would adversely impact our
results of operations, (xxiii) 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, (xxiv) changing climate, global climate
change regulations and greenhouse gas effects may adversely affect
our operations and financial performance, (xxv) we may be unable to
achieve our greenhouse gas emission reduction targets by 2030,
(xxvi) legislation/regulation related to environmental and health
and safety matters and corporate social responsibility could
negatively impact our operations and financial performance, (xxvii)
product liability claims and other legal proceedings could
adversely affect our operations and financial performance, (xxviii)
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.
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 COMPANIES CONDENSED CONSOLIDATED STATEMENTS OF
INCOME UNAUDITED
|
|
|
Three months ended
July 31,
|
|
Nine months ended
July 31,
|
(in millions, except
per share amounts)
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net sales
|
$
1,330.3
|
|
$
1,622.1
|
|
$
3,910.2
|
|
$
4,853.7
|
Cost of products
sold
|
1,023.3
|
|
1,275.2
|
|
3,039.8
|
|
3,878.4
|
Gross
profit
|
307.0
|
|
346.9
|
|
870.4
|
|
975.3
|
Selling, general and
administrative expenses
|
135.7
|
|
141.6
|
|
412.3
|
|
440.6
|
Acquisition and
integration related costs
|
3.4
|
|
2.2
|
|
15.5
|
|
5.8
|
Restructuring
charges
|
8.7
|
|
3.1
|
|
13.5
|
|
10.3
|
Non-cash asset
impairment charges
|
1.6
|
|
0.7
|
|
3.4
|
|
63.1
|
(Gain) loss on disposal
of properties, plants and equipment,
net
|
1.7
|
|
(6.4)
|
|
(3.3)
|
|
(8.1)
|
(Gain) loss on disposal
of businesses, net
|
0.3
|
|
—
|
|
(64.1)
|
|
(4.2)
|
Operating
profit
|
155.6
|
|
205.7
|
|
493.1
|
|
467.8
|
Interest expense,
net
|
25.3
|
|
14.0
|
|
71.5
|
|
44.3
|
Debt extinguishment
charges
|
—
|
|
—
|
|
—
|
|
25.4
|
Other (income) expense,
net
|
3.4
|
|
7.3
|
|
9.6
|
|
4.9
|
Income before income
tax expense and equity earnings
of unconsolidated affiliates, net
|
126.9
|
|
184.4
|
|
412.0
|
|
393.2
|
Income tax
expense
|
31.1
|
|
39.9
|
|
107.9
|
|
105.4
|
Equity earnings of
unconsolidated affiliates, net of tax
|
(0.9)
|
|
(1.6)
|
|
(1.7)
|
|
(3.6)
|
Net income
|
96.7
|
|
146.1
|
|
305.8
|
|
291.4
|
Net income attributable
to noncontrolling interests
|
(6.4)
|
|
(4.3)
|
|
(14.4)
|
|
(14.2)
|
Net income
attributable to Greif, Inc.
|
$
90.3
|
|
$
141.8
|
|
$
291.4
|
|
$
277.2
|
Basic earnings per
share attributable to Greif, Inc.
common shareholders:
|
|
|
|
|
|
|
|
Class A common
stock
|
$
1.57
|
|
$
2.38
|
|
$
5.03
|
|
$
4.66
|
Class B common
stock
|
$
2.35
|
|
$
3.58
|
|
$
7.54
|
|
$
6.98
|
Diluted earnings per
share attributable to Greif, Inc.
common shareholders:
|
|
|
|
|
|
|
|
Class A common
stock
|
$
1.55
|
|
$
2.36
|
|
$
4.99
|
|
$
4.63
|
Class B common
stock
|
$
2.35
|
|
$
3.58
|
|
$
7.54
|
|
$
6.98
|
Shares used to
calculate basic earnings per share
attributable to Greif, Inc. common shareholders:
|
|
|
|
|
|
|
|
Class A common
stock
|
25.5
|
|
26.2
|
|
25.6
|
|
26.5
|
Class B common
stock
|
21.3
|
|
22.0
|
|
21.5
|
|
22.0
|
Shares used to
calculate diluted earnings per share
attributable to Greif, Inc. common shareholders:
|
|
|
|
|
|
|
|
Class A common
stock
|
26.0
|
|
26.6
|
|
26.0
|
|
26.7
|
Class B common
stock
|
21.3
|
|
22.0
|
|
21.5
|
|
22.0
|
GREIF, INC. AND
SUBSIDIARY COMPANIES CONDENSED CONSOLIDATED BALANCE
SHEETS UNAUDITED
|
|
(in
millions)
|
July 31,
2023
|
|
October 31,
2022
|
ASSETS
|
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
$
157.7
|
|
$
147.1
|
Trade accounts
receivable
|
682.7
|
|
749.1
|
Inventories
|
387.7
|
|
403.3
|
Other current
assets
|
215.3
|
|
199.9
|
|
1,443.4
|
|
1,499.4
|
Long-term
assets
|
|
|
|
Goodwill
|
1,647.0
|
|
1,464.5
|
Intangible
assets
|
745.6
|
|
576.2
|
Operating lease
assets
|
268.1
|
|
254.7
|
Other long-term
assets
|
245.0
|
|
220.1
|
|
2,905.7
|
|
2,515.5
|
Properties, plants
and equipment
|
1,524.4
|
|
1,455.0
|
|
$
5,873.5
|
|
$
5,469.9
|
LIABILITIES AND
EQUITY
|
|
|
|
Current
liabilities
|
|
|
|
Accounts
payable
|
$
505.8
|
|
$
561.3
|
Short-term
borrowings
|
1.8
|
|
5.7
|
Current portion of
long-term debt
|
88.3
|
|
71.1
|
Current portion of
operating lease liabilities
|
51.9
|
|
48.9
|
Other current
liabilities
|
303.4
|
|
360.9
|
|
951.2
|
|
1,047.9
|
Long-term
liabilities
|
|
|
|
Long-term
debt
|
2,081.4
|
|
1,839.3
|
Operating lease
liabilities
|
220.1
|
|
209.4
|
Other long-term
liabilities
|
577.0
|
|
563.2
|
|
2,878.5
|
|
2,611.9
|
|
|
|
|
Redeemable
noncontrolling interests
|
55.0
|
|
15.8
|
Equity
|
|
|
|
Total Greif, Inc.
equity
|
1,948.3
|
|
1,761.3
|
Noncontrolling
interests
|
40.5
|
|
33.0
|
Total
equity
|
1,988.8
|
|
1,794.3
|
|
$
5,873.5
|
|
$
5,469.9
|
GREIF, INC. AND
SUBSIDIARY COMPANIES CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS UNAUDITED
|
|
|
Three months ended
July 31,
|
|
Nine months ended
July 31,
|
(in
millions)
|
2023
|
|
2022
|
|
2023
|
|
2022
|
CASH FLOWS FROM
OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
Net income
|
$
96.7
|
|
$
146.1
|
|
$
305.8
|
|
$
291.4
|
Depreciation, depletion
and amortization
|
57.7
|
|
51.4
|
|
169.4
|
|
165.4
|
Asset
impairments
|
1.6
|
|
0.7
|
|
3.4
|
|
63.1
|
Other non-cash
adjustments to net income
|
10.6
|
|
0.3
|
|
(30.2)
|
|
6.2
|
Debt extinguishment
charges
|
—
|
|
—
|
|
—
|
|
22.6
|
Operating working
capital changes
|
56.1
|
|
21.8
|
|
93.8
|
|
(99.4)
|
Decrease in cash from
changes in other assets and liabilities
|
(20.4)
|
|
(11.0)
|
|
(96.2)
|
|
(78.4)
|
Net cash (used in)
provided by operating activities
|
202.3
|
|
209.3
|
|
446.0
|
|
370.9
|
CASH FLOWS FROM
INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
Acquisitions of
companies, net of cash acquired
|
—
|
|
—
|
|
(447.5)
|
|
—
|
Purchases of
properties, plants and equipment
|
(45.3)
|
|
(37.2)
|
|
(136.4)
|
|
(112.2)
|
Proceeds from the sale
of properties, plant and equipment
and businesses, net of impacts from the purchase of
acquisitions
|
0.8
|
|
8.7
|
|
113.3
|
|
156.2
|
Payments for deferred
purchase price of acquisitions
|
—
|
|
—
|
|
(21.7)
|
|
(4.7)
|
Other
|
(1.2)
|
|
0.5
|
|
(4.4)
|
|
(4.6)
|
Net cash (used in)
provided by investing activities
|
(45.7)
|
|
(28.0)
|
|
(496.7)
|
|
34.7
|
CASH FLOWS FROM
FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
Proceeds (payments) on
long-term debt, net
|
(118.1)
|
|
(37.1)
|
|
243.1
|
|
(149.4)
|
Dividends paid to
Greif, Inc. shareholders
|
(28.8)
|
|
(27.4)
|
|
(86.7)
|
|
(82.0)
|
Payments for debt
extinguishment and issuance costs
|
—
|
|
—
|
|
—
|
|
(20.8)
|
Payments for share
repurchases
|
(4.3)
|
|
(60.0)
|
|
(63.9)
|
|
(60.0)
|
Forward contract for
accelerated share repurchases
|
—
|
|
(15.0)
|
|
—
|
|
(15.0)
|
Tax withholding
payments for stock-based awards
|
—
|
|
—
|
|
(13.7)
|
|
—
|
Other
|
(2.4)
|
|
(7.2)
|
|
(16.8)
|
|
(16.6)
|
Net cash (used in)
provided by financing activities
|
(153.6)
|
|
(146.7)
|
|
62.0
|
|
(343.8)
|
Effects of exchange
rates on cash
|
(3.8)
|
|
(15.8)
|
|
(0.7)
|
|
(58.9)
|
Net increase (decrease)
in cash and cash equivalents
|
(0.8)
|
|
18.8
|
|
10.6
|
|
2.9
|
Cash and cash
equivalents, beginning of period
|
158.5
|
|
108.7
|
|
147.1
|
|
124.6
|
Cash and cash
equivalents, end of period
|
$
157.7
|
|
$
127.5
|
|
$
157.7
|
|
$
127.5
|
GREIF, INC. AND
SUBSIDIARY COMPANIES FINANCIAL HIGHLIGHTS BY
SEGMENT UNAUDITED
|
|
|
Three months ended
July 31,
|
|
Nine months ended
July 31,
|
(in
millions)
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net
sales:
|
|
|
|
|
|
|
|
Global Industrial
Packaging
|
$
761.8
|
|
$
906.7
|
|
$
2,215.8
|
|
$
2,827.5
|
Paper
Packaging & Services
|
563.9
|
|
710.2
|
|
1,678.9
|
|
2,009.5
|
Land
Management
|
4.6
|
|
5.2
|
|
15.5
|
|
16.7
|
Total net
sales
|
$
1,330.3
|
|
$
1,622.1
|
|
$
3,910.2
|
|
$
4,853.7
|
Gross
profit:
|
|
|
|
|
|
|
|
Global Industrial
Packaging
|
$
176.8
|
|
$
177.7
|
|
$
480.0
|
|
$
540.1
|
Paper
Packaging & Services
|
128.1
|
|
167.3
|
|
383.7
|
|
428.9
|
Land
Management
|
2.1
|
|
1.9
|
|
6.7
|
|
6.3
|
Total gross
profit
|
$
307.0
|
|
$
346.9
|
|
$
870.4
|
|
$
975.3
|
Operating
profit:
|
|
|
|
|
|
|
|
Global Industrial
Packaging
|
$
102.0
|
|
$
107.2
|
|
$
259.2
|
|
$
246.2
|
Paper
Packaging & Services
|
52.1
|
|
96.7
|
|
228.8
|
|
215.1
|
Land
Management
|
1.5
|
|
1.8
|
|
5.1
|
|
6.5
|
Total operating
profit
|
$
155.6
|
|
$
205.7
|
|
$
493.1
|
|
$
467.8
|
EBITDA(8):
|
|
|
|
|
|
|
|
Global Industrial
Packaging
|
$
123.8
|
|
$
118.3
|
|
$
319.5
|
|
$
301.1
|
Paper
Packaging & Services
|
85.1
|
|
130.6
|
|
328.4
|
|
322.1
|
Land
Management
|
1.9
|
|
2.5
|
|
6.7
|
|
8.7
|
Total
EBITDA
|
$
210.8
|
|
$
251.4
|
|
$
654.6
|
|
$
631.9
|
Adjusted
EBITDA(9):
|
|
|
|
|
|
|
|
Global Industrial
Packaging
|
$
126.5
|
|
$
117.1
|
|
$
319.5
|
|
$
362.2
|
Paper
Packaging & Services
|
98.1
|
|
131.8
|
|
293.7
|
|
329.7
|
Land
Management
|
1.9
|
|
2.1
|
|
6.4
|
|
6.9
|
Total adjusted
EBITDA
|
$
226.5
|
|
$
251.0
|
|
$
619.6
|
|
$
698.8
|
|
(8) 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.
|
(9) Adjusted
EBITDA is defined as net income, plus interest expense, net, plus
debt extinguishment charges, 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 (gain) loss on
disposal of properties, plants, equipment and businesses,
net.
|
GREIF, INC. AND
SUBSIDIARY COMPANIES GAAP TO NON-GAAP
RECONCILIATION CONSOLIDATED ADJUSTED
EBITDA UNAUDITED
|
|
|
Three months ended
July 31,
|
|
Nine months ended
July 31,
|
(in
millions)
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net income
|
$
96.7
|
|
$
146.1
|
|
$
305.8
|
|
$
291.4
|
Plus: Interest
expense, net
|
25.3
|
|
14.0
|
|
71.5
|
|
44.3
|
Plus: Debt
extinguishment charges
|
—
|
|
—
|
|
—
|
|
25.4
|
Plus: Income tax
expense
|
31.1
|
|
39.9
|
|
107.9
|
|
105.4
|
Plus: Depreciation,
depletion and amortization expense
|
57.7
|
|
51.4
|
|
169.4
|
|
165.4
|
EBITDA
|
$
210.8
|
|
$
251.4
|
|
$
654.6
|
|
$
631.9
|
Net income
|
$
96.7
|
|
$
146.1
|
|
$
305.8
|
|
$
291.4
|
Plus: Interest
expense, net
|
25.3
|
|
14.0
|
|
71.5
|
|
44.3
|
Plus: Debt
extinguishment charges
|
—
|
|
—
|
|
—
|
|
25.4
|
Plus: Income tax
expense
|
31.1
|
|
39.9
|
|
107.9
|
|
105.4
|
Plus: Other (income)
expense, net
|
3.4
|
|
7.3
|
|
9.6
|
|
4.9
|
Plus: Equity earnings
of unconsolidated affiliates, net of
tax
|
(0.9)
|
|
(1.6)
|
|
(1.7)
|
|
(3.6)
|
Operating
profit
|
$
155.6
|
|
$
205.7
|
|
$
493.1
|
|
$
467.8
|
Less: Other (income)
expense, net
|
3.4
|
|
7.3
|
|
9.6
|
|
4.9
|
Less: Equity earnings
of unconsolidated affiliates, net of tax
|
(0.9)
|
|
(1.6)
|
|
(1.7)
|
|
(3.6)
|
Plus: Depreciation,
depletion and amortization expense
|
57.7
|
|
51.4
|
|
169.4
|
|
165.4
|
EBITDA
|
$
210.8
|
|
$
251.4
|
|
$
654.6
|
|
$
631.9
|
Plus: Restructuring
charges
|
8.7
|
|
3.1
|
|
13.5
|
|
10.3
|
Plus: Acquisition and
integration related costs
|
3.4
|
|
2.2
|
|
15.5
|
|
5.8
|
Plus: Non-cash asset
impairment charges
|
1.6
|
|
0.7
|
|
3.4
|
|
63.1
|
Plus: (Gain) loss on
disposal of properties, plants,
equipment, and businesses, net
|
2.0
|
|
(6.4)
|
|
(67.4)
|
|
(12.3)
|
Adjusted
EBITDA
|
$
226.5
|
|
$
251.0
|
|
$
619.6
|
|
$
698.8
|
GREIF, INC. AND
SUBSIDIARY COMPANIES GAAP TO NON-GAAP
RECONCILIATION SEGMENT ADJUSTED
EBITDA(10) UNAUDITED
|
|
|
Three months ended
July 31,
|
|
Nine months ended
July 31,
|
(in
millions)
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Global Industrial
Packaging
|
|
|
|
|
|
|
|
Operating
profit
|
102.0
|
|
107.2
|
|
259.2
|
|
246.2
|
Less: Other (income)
expense, net
|
4.0
|
|
7.6
|
|
10.9
|
|
5.2
|
Less: Equity earnings
of unconsolidated affiliates, net of
tax
|
(0.9)
|
|
(1.6)
|
|
(1.7)
|
|
(3.6)
|
Plus: Depreciation and
amortization expense
|
24.9
|
|
17.1
|
|
69.5
|
|
56.5
|
EBITDA
|
$
123.8
|
|
$
118.3
|
|
$
319.5
|
|
$
301.1
|
Plus: Restructuring
charges
|
1.3
|
|
1.5
|
|
4.2
|
|
6.3
|
Plus: Acquisition and
integration related costs
|
1.3
|
|
0.3
|
|
8.8
|
|
0.3
|
Plus: Non-cash asset
impairment charges
|
—
|
|
—
|
|
1.5
|
|
62.4
|
Plus: (Gain) loss on
disposal of properties, plants,
equipment and businesses, net
|
0.1
|
|
(3.0)
|
|
(14.5)
|
|
(7.9)
|
Adjusted
EBITDA
|
$
126.5
|
|
$
117.1
|
|
$
319.5
|
|
$
362.2
|
Paper
Packaging & Services
|
|
|
|
|
|
|
|
Operating
profit
|
52.1
|
|
96.7
|
|
228.8
|
|
215.1
|
Less: Other (income)
expense, net
|
(0.6)
|
|
(0.3)
|
|
(1.3)
|
|
(0.3)
|
Plus: Depreciation and
amortization expense
|
32.4
|
|
33.6
|
|
98.3
|
|
106.7
|
EBITDA
|
$
85.1
|
|
$
130.6
|
|
$
328.4
|
|
$
322.1
|
Plus: Restructuring
charges
|
7.4
|
|
1.6
|
|
9.3
|
|
4.0
|
Plus: Acquisition and
integration related costs
|
2.1
|
|
1.9
|
|
6.7
|
|
5.5
|
Plus: Non-cash asset
impairment charges
|
1.6
|
|
0.7
|
|
1.9
|
|
0.7
|
Plus: (Gain) loss on
disposal of properties, plants,
equipment and businesses, net
|
1.9
|
|
(3.0)
|
|
(52.6)
|
|
(2.6)
|
Adjusted
EBITDA
|
$
98.1
|
|
$
131.8
|
|
$
293.7
|
|
$
329.7
|
Land
Management
|
|
|
|
|
|
|
|
Operating
profit
|
1.5
|
|
1.8
|
|
5.1
|
|
6.5
|
Plus: Depreciation and
depletion expense
|
0.4
|
|
0.7
|
|
1.6
|
|
2.2
|
EBITDA
|
$
1.9
|
|
$
2.5
|
|
$
6.7
|
|
$
8.7
|
Plus: (Gain) loss on
disposal of properties, plants,
equipment and businesses, net
|
—
|
|
(0.4)
|
|
(0.3)
|
|
(1.8)
|
Adjusted
EBITDA
|
$
1.9
|
|
$
2.1
|
|
$
6.4
|
|
$
6.9
|
Consolidated
EBITDA
|
$
210.8
|
|
$
251.4
|
|
$
654.6
|
|
$
631.9
|
Consolidated adjusted
EBITDA
|
$
226.5
|
|
$
251.0
|
|
$
619.6
|
|
$
698.8
|
|
(10)
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 (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(11) UNAUDITED
|
|
|
Three months ended
July 31,
|
|
Nine months ended
July 31,
|
(in
millions)
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net cash provided by
operating activities
|
$
202.3
|
|
$
209.3
|
|
$
446.0
|
|
$
370.9
|
Cash paid for
purchases of properties, plants and
equipment
|
(45.3)
|
|
(37.2)
|
|
(136.4)
|
|
(112.2)
|
Free cash
flow
|
$
157.0
|
|
$
172.1
|
|
$
309.6
|
|
$
258.7
|
Cash paid for
acquisition and integration related costs
|
3.4
|
|
2.2
|
|
15.5
|
|
5.8
|
Cash paid for
integration related ERP systems and
equipment(12)
|
1.3
|
|
1.5
|
|
3.6
|
|
4.5
|
Cash paid for debt
issuance costs(13)
|
—
|
|
—
|
|
—
|
|
2.8
|
Cash paid for taxes
related to Tama, Iowa mill
divestment
|
$
5.4
|
|
$
—
|
|
$
16.3
|
|
$
—
|
Adjusted free cash
flow
|
$
167.1
|
|
$
175.8
|
|
$
345.0
|
|
$
271.8
|
|
(11)
Adjusted free cash flow is defined as net cash provided by
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 integration related
ERP systems and equipment, plus cash paid for debt issuance costs,
plus cash paid for taxes related to Tama, Iowa mill
divestment.
|
(12) Cash
paid for integration related ERP systems and equipment is defined
as cash paid for ERP systems and equipment required to bring the
acquired facilities to Greif's standards.
|
(13) Cash
paid for debt issuance costs is defined as cash payments for debt
issuance related expenses included within net cash used in
operating activities.
|
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
(Loss)
Attributable
to Greif, Inc.
|
|
Diluted
Class A
Earnings
Per Share
|
|
Tax
Rate
|
Three months ended
July 31, 2023
|
$
126.9
|
|
$ 31.1
|
|
$
(0.9)
|
|
$
6.4
|
|
$ 90.3
|
|
$
1.55
|
|
24.5 %
|
Restructuring
charges
|
8.7
|
|
2.1
|
|
—
|
|
—
|
|
6.6
|
|
0.11
|
|
|
Acquisition and
integration related costs
|
3.4
|
|
0.9
|
|
—
|
|
—
|
|
2.5
|
|
0.04
|
|
|
Non-cash asset
impairment charges
|
1.6
|
|
0.4
|
|
—
|
|
—
|
|
1.2
|
|
0.02
|
|
|
(Gain) loss on
disposal of properties, plants,
equipment and businesses, net
|
2.0
|
|
0.5
|
|
—
|
|
—
|
|
1.5
|
|
0.03
|
|
|
Excluding
adjustments
|
$
142.6
|
|
$ 35.0
|
|
$
(0.9)
|
|
$
6.4
|
|
$
102.1
|
|
$
1.75
|
|
24.5 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
July 31, 2022
|
$
184.4
|
|
$ 39.9
|
|
$
(1.6)
|
|
$
4.3
|
|
$
141.8
|
|
$
2.36
|
|
21.6 %
|
Restructuring
charges
|
3.1
|
|
0.8
|
|
—
|
|
—
|
|
2.3
|
|
0.04
|
|
|
Acquisition and
integration related costs
|
2.2
|
|
0.5
|
|
—
|
|
—
|
|
1.7
|
|
0.02
|
|
|
Non-cash asset
impairment charges
|
0.7
|
|
—
|
|
—
|
|
—
|
|
0.7
|
|
—
|
|
|
(Gain) loss on
disposal of properties, plants,
equipment and businesses, net
|
(6.4)
|
|
(1.6)
|
|
—
|
|
—
|
|
(4.8)
|
|
(0.07)
|
|
|
Excluding
adjustments
|
$
184.0
|
|
$ 39.6
|
|
$
(1.6)
|
|
$
4.3
|
|
$
141.7
|
|
$
2.35
|
|
21.5 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine months ended
July 31, 2023
|
$
412.0
|
|
$
107.9
|
|
$
(1.7)
|
|
$
14.4
|
|
$
291.4
|
|
$
4.99
|
|
26.2 %
|
Restructuring
charges
|
13.5
|
|
3.2
|
|
—
|
|
0.1
|
|
10.2
|
|
0.17
|
|
|
Acquisition and
integration related costs
|
15.5
|
|
3.8
|
|
—
|
|
—
|
|
11.7
|
|
0.20
|
|
|
Non-cash asset
impairment charges
|
3.4
|
|
0.8
|
|
—
|
|
—
|
|
2.6
|
|
0.04
|
|
|
(Gain) loss on
disposal of properties, plants,
equipment and businesses, net
|
(67.4)
|
|
(19.3)
|
|
—
|
|
—
|
|
(48.1)
|
|
(0.82)
|
|
|
Excluding
adjustments
|
$
377.0
|
|
$ 96.4
|
|
$
(1.7)
|
|
$
14.5
|
|
$
267.8
|
|
$
4.58
|
|
25.6 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine months ended
July 31, 2022
|
$
393.2
|
|
$
105.4
|
|
$
(3.6)
|
|
$
14.2
|
|
$
277.2
|
|
$
4.63
|
|
26.8 %
|
Restructuring
charges
|
10.3
|
|
2.5
|
|
—
|
|
—
|
|
7.8
|
|
0.13
|
|
|
Debt extinguishment
charges
|
25.4
|
|
6.2
|
|
—
|
|
—
|
|
19.2
|
|
0.32
|
|
|
Acquisition and
integration related costs
|
5.8
|
|
1.4
|
|
—
|
|
—
|
|
4.4
|
|
0.07
|
|
|
Non-cash asset
impairment charges
|
63.1
|
|
—
|
|
—
|
|
—
|
|
63.1
|
|
1.05
|
|
|
(Gain) loss on
disposal of properties, plants,
equipment and businesses, net
|
(12.3)
|
|
(2.6)
|
|
—
|
|
(0.2)
|
|
(9.5)
|
|
(0.16)
|
|
|
Excluding
adjustments
|
$
485.5
|
|
$
112.9
|
|
$
(3.6)
|
|
$
14.0
|
|
$
362.2
|
|
$
6.04
|
|
23.3 %
|
|
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 DEBT UNAUDITED
|
|
(in
millions)
|
July 31,
2023
|
|
April 30,
2023
|
|
July 31,
2022
|
Total debt
|
$
2,171.5
|
|
$
2,289.2
|
|
$
2,058.7
|
Cash and cash
equivalents
|
(157.7)
|
|
(158.5)
|
|
(127.5)
|
Net
debt
|
$
2,013.8
|
|
$
2,130.7
|
|
$
1,931.2
|
GREIF, INC. AND
SUBSIDIARY COMPANIES
GAAP TO NON-GAAP RECONCILIATION
LEVERAGE RATIO
UNAUDITED
|
|
Trailing twelve
month credit agreement EBITDA (in millions)
|
Trailing Twelve
Months Ended
7/31/2023
|
Trailing Twelve
Months Ended
4/30/2023
|
Trailing Twelve
Months Ended
7/31/2022
|
Net income
|
$
408.4
|
$
457.8
|
$
401.3
|
Plus: Interest expense,
net
|
88.4
|
77.1
|
61.2
|
Plus: Debt
extinguishment charges
|
—
|
—
|
25.4
|
Plus: Income tax
expense
|
139.6
|
148.4
|
118.5
|
Plus: Depreciation,
depletion and amortization expense
|
220.6
|
214.3
|
223.6
|
EBITDA
|
$
857.0
|
$
897.6
|
$
830.0
|
Plus: Restructuring
charges
|
16.2
|
10.6
|
14.6
|
Plus: Acquisition and
integration related costs
|
18.4
|
17.2
|
8.7
|
Plus: Non-cash asset
impairment charges
|
11.3
|
10.4
|
70.5
|
Plus: Non-cash pension
settlement charges
|
—
|
—
|
0.1
|
Plus: Incremental
COVID-19 costs, net
|
—
|
—
|
0.7
|
Plus: (Gain) loss on
disposal of properties, plants, equipment,
and businesses, net
|
(64.6)
|
(73.0)
|
(14.5)
|
Adjusted
EBITDA
|
$
838.3
|
$
862.8
|
$
910.1
|
Credit agreement
adjustments to EBITDA(14)
|
13.5
|
19.0
|
(24.0)
|
Credit agreement
EBITDA
|
$
851.8
|
$
881.8
|
$
886.1
|
|
|
|
|
Adjusted net
debt
(in
millions)
|
For the Period
Ended
7/31/2023
|
For the Period
Ended
4/30/2023
|
For the Period
Ended
7/31/2022
|
Total debt
|
$
2,171.5
|
$
2,289.2
|
$
2,058.7
|
Cash and cash
equivalents
|
(157.7)
|
(158.5)
|
(127.5)
|
Net debt
|
$
2,013.8
|
$
2,130.7
|
$
1,931.2
|
Credit agreement
adjustments to debt(15)
|
(166.3)
|
(145.7)
|
(164.8)
|
Adjusted net
debt
|
$
1,847.5
|
$
1,985.0
|
$
1,766.4
|
|
|
|
|
Leverage
ratio
|
2.17x
|
2.25x
|
1.99x
|
|
(14)
Adjustments to EBITDA are specified by the 2022 Credit Agreement
and include certain timberland gains, equity earnings of
unconsolidated affiliates, net of tax, certain acquisition savings,
deferred financing costs, capitalized interest, income and expense
in connection with asset dispositions, and other items.
|
(15)
Adjustments to net debt are specified by the 2022 Credit Agreement
and include the European accounts receivable program, letters of
credit, and balances for swap contracts.
|
GREIF, INC. AND
SUBSIDIARY COMPANIES PROJECTED 2023 GUIDANCE
RECONCILIATION ADJUSTED FREE CASH
FLOW UNAUDITED
|
|
|
Fiscal 2023 Guidance
Range
|
(in
millions)
|
Scenario
1
|
Scenario
2
|
Net cash provided by
operating activities
|
$
548.3
|
$
592.3
|
Cash paid for
purchases of properties, plants and equipment
|
(199.0)
|
(215.0)
|
Free cash
flow
|
$
349.3
|
$
377.3
|
Cash paid for
acquisition and integration related costs
|
20.0
|
21.0
|
Cash paid for
integration related ERP systems and equipment
|
9.0
|
10.0
|
Cash paid for taxes
related to Tama, Iowa mill divestment
|
21.7
|
21.7
|
Adjusted free cash
flow
|
$
400.0
|
$
430.0
|
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SOURCE Greif, Inc.