Greif, Inc. (NYSE: GEF, GEF.B), a world leader in industrial
packaging products and services, today reported second quarter 2015
net income attributable to the corporation totaling $20.8 million
or $0.35 per diluted Class A share on sales of $915.9 million
compared with net income of $38.4 million or $0.65 per diluted
Class A share on sales of $1,065.5 million in the second quarter of
2014. After adjusting for the effect of divestitures and currency
translation, sales for the quarter were flat compared to the second
quarter of 2014. Excluding the impact of special items1, earnings
were $0.53 per diluted Class A share compared to $0.58 per diluted
Class A share for the second quarter of 2014.
David B. Fischer, president and chief executive officer, stated,
“The second quarter adjusted earnings were in line with our
expectations; however, the forecasted results for our North
American businesses are expected to be below previous forecasts for
the second half of 2015. Several positive trends emerged in our
international operations during the second quarter, although
foreign exchange rates continued to have a negative impact. We are
addressing specific issues to improve the company’s overall
performance, and we remain committed to our long-term plans.”
Mr. Fischer added, “During the second quarter we took
significant steps to lower our structural costs which included
SG&A headcount reduction plans plus plant closures,
divestitures and network consolidation in our rigid industrial
packaging business. These actions are part of our comprehensive
transformation activities which are focused on creating significant
value in our business. We have recently completed installation of a
new corrugator in North Carolina and we are in the final stages of
completing the modernization of our Riverville containerboard mill
in Virginia and returning it to full production. These additions to
the Paper Packaging network are expected to begin contributing
incremental benefits later this year as they move beyond initial
start-up operations. The combination of these growth investments
with further implementation of transformation initiatives across
the enterprise is expected to position us for solid improvement in
fiscal 2016.”
Rigid Industrial Packaging & Services
Net sales decreased 15.0 percent to $666.6 million for the
second quarter of 2015 compared with $784.3 million for the second
quarter of 2014. Excluding the impact of divestitures2, net sales
decreased 12.5 percent to $645.7 million for the second quarter of
2015 compared with $737.6 million for the second quarter of 2014.
The decrease in net sales was primarily due to the negative impact
of foreign currency translation of 10.4 percent. Overall volumes
were flat compared to the second quarter of 2014, with increases of
4.8 percent in Europe and decreases of 7.5 percent in Latin America
and 2.2 percent in North America.
Operating profit was $25.8 million for the second quarter of
2015 compared to $51.2 million for the second quarter of 2014. The
decrease was primarily attributable to the negative impact of
foreign currency translation, higher restructuring and non-cash
asset impairment charges, and a loss on the sale of a business in
North America. Operating profit excluding special items and the
impact of divestitures3 was $49.4 million for the second quarter of
2015 versus $51.5 million for the second quarter of 2014.
1 A summary of all special items that are included in the price
per diluted Class A share before special items and operating profit
before special items is set forth in the Selected Financial
Highlights table following the Company Outlook in this release
2 A summary of all adjustments related to the divestitures that
are excluded from net sales, gross profit and operating profit is
set forth in the Selected Financial Highlights table following the
Company Outlook in this release
3 A summary of all adjustments excluding special items and the
impact of divestitures that are excluded from operating profit is
set forth in the Selected Financial Highlights table following the
Company Outlook in this release
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.
Paper Packaging
Net sales decreased 5.5 percent to $160.4 million for the second
quarter of 2015 compared with $169.8 million for the second quarter
of 2014. Excluding the impact of divestitures, net sales decreased
2.8 percent to $160.4 million for the second quarter of 2015
compared with $165.1 million for the second quarter of 2014. The
decrease was attributable to lower prices for containerboard
produced by the Company’s mills and slightly lower volumes in the
corrugated sheet business.
Operating profit was $27.1 million for the second quarter of
2015 compared with $26.5 million for the second quarter of 2014.
The increase was primarily due to lower freight, maintenance and
utility costs, partially offset by the same factors impacting net
sales, as described above.
Flexible Products & Services
Net sales decreased 22.1 percent to $82.0 million for the second
quarter of 2015 compared with $105.3 million for the second quarter
of 2014. Excluding the impact of divestitures, net sales decreased
9.3 percent to $82.0 million for the second quarter of 2015
compared with $90.4 million for the second quarter of 2014. The
decrease was primarily attributable to the negative impact of
foreign currency translation of 15.2 percent, partially offset by
an increase in selling prices.
Operating loss was $5.3 million for the second quarter of 2015
versus operating loss of $10.3 million for the second quarter of
2014. Operating loss before special items and excluding the impact
of divestitures was $5.7 million for the second quarter of 2015
versus $7.7 million for the second quarter of 2014. This decrease
in operating loss was primarily due to lower personnel, security
and alternative supply costs compared to the prior period, because
the prior period included costs associated with the occupation of
the Hadimkoy facility, partially offset by higher costs of the move
to an in-house labor force, prompted primarily by changes in the
local regulatory environment.
Land Management
Net sales increased 13.1 percent to $6.9 million for the second
quarter of 2015 compared with $6.1 million for the second quarter
of 2014. The increase was due to higher timber sales as planned for
the second quarter of 2015.
Timberland gains were immaterial for the second quarter of 2015
compared with $8.7 million for the second quarter of 2014.
Operating profit was $3.5 million for the second quarter of 2015
compared with $11.7 million for the second quarter of 2014. The
decrease was due to the impact of timberland gains in the second
quarter of 2014. Operating profit before special items was $2.6
million for the second quarter of 2015 compared with $1.7 million
for the second quarter of 2014. This increase was due to the same
factor impacting net sales.
Company Outlook
While positive demand and gross margin trends in international
operations emerged during the second quarter and the impact of the
company’s transformation actions have begun being realized, annual
adjusted earnings are expected to be lower than forecasted at the
beginning of the year. The principal factors contributing to this
expected decline are based on recent results and near term
expectations on lower volumes and gross margins for the company’s
North American businesses, and the continuing impact of unfavorable
foreign exchange rates. Based on these factors, fiscal 2015
adjusted Class A earnings per share are now expected to be in the
range of $1.65 to $1.75, excluding gains and losses on the sales of
businesses, timberland and property, plant and equipment, and
acquisition related costs, as well as restructuring and impairment
charges.
GREIF, INC. AND SUBSIDIARY
COMPANIES
SELECTED FINANCIAL HIGHLIGHTS
UNAUDITED (Dollars in millions, except per share amounts)
Three months ended Six months
ended
April 30
April 30
Selected Financial
Highlights
2015 2014 2015 2014 Net sales $ 915.9 $
1,065.5 $ 1,818.2 $ 2,067.0 Operating profit 51.1 79.1 116.5 150.5
Operating profit before special items 72.6 71.9 114.9 137.2 EBITDA
83.3 116.3 183.2 224.1 Cash provided by (used in) operating
activities 32.8 103.7 (26.5 ) 41.5 Net income attributable to
Greif, Inc. 20.8 38.4 50.9 69.1 Diluted Class A earnings per share
attributable to Greif, Inc. $ 0.35 $ 0.65 $ 0.87 $ 1.18 Diluted
Class A earnings per share attributable to Greif, Inc. before
special items $ 0.53 $ 0.58 $ 0.82 $ 1.03
Special
items
Restructuring charges $ (7.3 ) $ (3.9 ) $ (10.5 ) $ (6.3 )
Acquisition-related costs - (0.3 ) (0.2 ) (0.8 ) Timberland gains -
8.7 24.3 17.1 Non-cash asset impairment charges (4.5 ) - (4.7 )
(0.2 ) Gain (loss) on disposal of properties, plants, equipment and
businesses, net (9.7 ) 2.7 (7.3 )
3.5 Total special items (21.5 ) 7.2
1.6 13.3 Total special items,
net of tax (10.7 ) 4.8 2.7
8.7 Impact of total special items, net of tax, on
diluted Class A earnings per share attributable to Greif, Inc. $
(0.18 ) $ 0.07 $ 0.05 $ 0.15
April
30, 2015 October 31, 2014 April 30, 2014 Working
capital 4 $ 360.3 $ 303.0 $ 362.0 Net working capital 4 292.9 217.9
274.6 Long-term debt 1,127.2 1,087.4 1,300.8 Net debt 5 1,148.7
1,068.0 1,298.8
2015
Impact ofDivestitures
Excluding theImpact
ofDivestitures2015
Net Sales $ 915.9 $ 20.9 $ 895.0 Gross Profit 181.1 0.1 181.0
Operating Profit 51.1 (2.7 ) 53.8 Operating Profit before special
items
: 72.6 (1.7 ) 74.3
2014
Impact ofDivestitures
Excluding theImpact
ofDivestitures2014
Net Sales $ 1,065.5 $ 66.3 $ 999.2 Gross Profit 204.3 7.5 196.8
Operating Profit 79.1 0.8 78.3 Operating Profit before special
items
: 71.9 0.1 71.8
Excluding theImpact
ofDivestitures2015
Impact
ofCurrencyTranslation
Excluding theImpact
ofDivestitures
andCurrencyTranslation2015
Net Sales $ 895.0 $ (97.6 ) $ 992.6
4 Working capital represents current assets less current
liabilities. Net working capital represents working capital less
cash and cash equivalents.
5 Net debt represents long-term debt plus the current portion of
long-term debt plus short-term borrowings less cash and cash
equivalents.
Conference Call
The company will host a conference call to discuss the second
quarter of 2015 results on June 10, 2015, at 10 a.m. Eastern
Time (ET). To participate, domestic callers should call
877-485-3107 and ask for the Greif conference call. The number for
international callers is +1 201-689-8427. Phone lines will open at
9:50 a.m. ET. The conference call will also be available through a
live webcast, including slides, which can be accessed at
www.greif.com in the Investor Center/Conference Calls. A replay of
the conference call will be available on the company’s website
approximately one hour following the call.
About Greif
Greif is a world leader in industrial packaging products and
services. The company produces steel, plastic, fibre, flexible and
corrugated containers and containerboard, and provides
reconditioning, blending, filling and packaging services for a wide
range of industries. Greif also manages timber properties in North
America. The company is strategically positioned in more than 50
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 Oct. 31, 2014. 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
operations subject us to currency exchange and political risks 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 continuing consolidation of our customer base
and suppliers may intensify pricing pressure, (v) we operate in
highly competitive industries, (vi) our business is sensitive to
changes in industry demands, (vii) raw material and energy price
fluctuations and shortages may adversely impact our manufacturing
operations and costs, (viii) we may encounter difficulties arising
from acquisitions, (ix) we may incur additional restructuring costs
and there is no guarantee that our efforts to reduce costs will be
successful, (x) tax legislation initiatives or challenges to our
tax positions may adversely impact our results or condition, (xi)
full realization of our deferred tax assets may be affected by a
number of factors, (xii) several operations are conducted by joint
ventures that we cannot operate solely for our benefit, (xiii) our
ability to attract, develop and retain talented and qualified
employees, managers and executives is critical to our success,
(xiv) our business may be adversely impacted by work stoppages and
other labor relations matters, (xv) we may be subject to losses
that might not be covered in whole or in part by existing insurance
reserves or insurance coverage, (xvi) our business depends on the
uninterrupted operations of our facilities, systems and business
functions, including our information technology and other business
systems, (xvii) 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, (xviii)
legislation/regulation related to environmental and health and
safety matters and corporate social responsibility could negatively
impact our operations and financial performance, (xix) product
liability claims and other legal proceedings could adversely affect
our operations and financial performance, (xx) 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, (xxi) changing climate, climate change regulations and
greenhouse gas effects may adversely affect our operations and
financial performance, (xxii) the frequency and volume of our
timber and timberland sales will impact our financial performance,
(xxiii) changes in U.S. generally accepted accounting principles
and SEC rules and regulations could materially impact our reported
results, (xxiv) 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 (xxv) the
company has a significant amount of goodwill, and if impaired in
the future, would adversely impact our results of operations.
Changes in business results may impact our book tax rates. 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
(Dollars and shares in millions, except per share amounts)
Three months ended Six months ended April 30
April 30 2015 2014
2015 2014 Net
sales $ 915.9 $ 1,065.5 $ 1,818.2 $ 2,067.0 Cost of products sold
734.8 861.2 1,483.2
1,676.6 Gross profit 181.1 204.3 335.0 390.4
Selling, general and administrative expenses 108.5 132.7 220.3
254.0 Restructuring charges 7.3 3.9 10.5 6.3 Timberland gains -
(8.7 ) (24.3 ) (17.1 ) Non-cash asset impairment charges 4.5 - 4.7
0.2 Gain on disposal of properties, plants and equipment, net (0.7
) (1.5 ) (2.3 ) (4.1 ) (Gain) loss on disposal of businesses
10.4 (1.2 ) 9.6 0.6
Operating profit 51.1 79.1 116.5 150.5 Interest expense, net
18.2 20.4 37.8 40.8 Other expense, net 2.5 2.2
2.6 5.0 Income before
income tax expense and equity earnings of unconsolidated
affiliates, net 30.4 56.5 76.1 104.7 Income tax expense 9.6
19.5 27.1 36.0 Equity earnings (losses) of unconsolidated
affiliates, net of tax (0.3 ) 0.1 (0.3
) 0.2 Net income 20.5 37.1 48.7 68.9 Net loss
attributable to noncontrolling interests 0.3
1.3 2.2 0.2 Net income
attributable to Greif, Inc. $ 20.8 $ 38.4 $ 50.9
$ 69.1
Basic earnings per share
attributable to Greif, Inc. common shareholders: Class A Common
Stock $ 0.35 $ 0.65 $ 0.87 $ 1.18 Class B Common Stock $ 0.53 $
0.98 $ 1.29 $ 1.76
Diluted earnings per share
attributable to Greif, Inc. common shareholders: Class A Common
Stock $ 0.35 $ 0.65 $ 0.87 $ 1.18 Class B Common Stock $ 0.53 $
0.98 $ 1.29 $ 1.76
Shares used to calculate basic
earnings per share attributable to Greif, Inc. common
shareholders: Class A Common Stock 25.7 25.5 25.6 25.5 Class B
Common Stock 22.1 22.1 22.1 22.1
Shares used to calculate
diluted earnings per share attributable to Greif, Inc. common
shareholders: Class A Common Stock 25.7 25.6 25.7 25.5 Class B
Common Stock 22.1 22.1 22.1 22.1
GREIF, INC. AND SUBSIDIARY COMPANIES CONDENSED
CONSOLIDATED BALANCE SHEETS UNAUDITED (Dollars in millions)
April 30, 2015 October 31, 2014
ASSETS CURRENT ASSETS Cash and cash
equivalents $ 67.4 $ 85.1 Trade accounts receivable 459.8 501.3
Inventories 363.2 381.1 Other current assets 180.2
187.2 1,070.6 1,154.7 LONG-TERM ASSETS
Goodwill 813.4 880.2 Intangible assets 143.3 166.5 Assets held by
special purpose entities 50.9 50.9 Other long-term assets
109.3 122.1 1,116.9 1,219.7 PROPERTIES,
PLANTS AND EQUIPMENT 1,233.3 1,293.0 $ 3,420.8
$ 3,667.4
LIABILITIES AND EQUITY CURRENT
LIABILITIES Accounts payable $ 357.5 $ 471.1 Short-term borrowings
63.1 48.1 Current portion of long-term debt 25.8 17.6 Other current
liabilities 263.9 314.9 710.3 851.7
LONG-TERM LIABILITIES Long-term debt 1,127.2 1,087.4
Liabilities held by special purpose entities 43.3 43.3 Other
long-term liabilities 436.3 461.8 1,606.8
1,592.5 TOTAL EQUITY 1,103.7 1,223.2
$ 3,420.8 $ 3,667.4
GREIF, INC. AND
SUBSIDIARY COMPANIES CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS (UNAUDITED) (Dollars in millions)
Three months ended Six months ended April 30
April 30 2015 2014
2015 2014 CASH FLOWS FROM
OPERATING ACTIVITIES: Net income $ 20.5 $ 37.1 $ 48.7 $ 68.9
Depreciation, depletion and amortization 34.7 39.4 69.3 78.6 Asset
impairments 4.5 - 4.7 0.2 Other non-cash adjustments to net income
(2.3 ) (14.7 ) (23.9 ) (24.7 ) Working capital changes (21.3 ) 47.6
(80.0 ) (54.3 ) Increase (decrease) in cash from changes in certain
assets and liabilities and other (3.3 ) (5.7 )
(45.3 ) (27.2 ) Net cash provided by (used in) operating
activities 32.8 103.7 (26.5 )
41.5 CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisitions of companies, net of cash acquired - - (0.4 ) (52.3 )
Purchases of properties, plants and equipment (30.6 ) (27.5 ) (69.8
) (62.0 ) Purchases of timber properties - (25.7 ) (25.4 ) (33.7 )
Proceeds from the sale of properties, plants, equipment,
businesses, timberland and other assets 12.7 21.8 51.7 36.6
Payments on notes receivable with related party, net - (0.4 ) - -
Other - 0.9 - 0.9
Net cash used in investing activities (17.9 )
(30.9 ) (43.9 ) (110.5 ) CASH FLOWS FROM
FINANCING ACTIVITIES: Proceeds from (payments on) debt, net 24.1
(51.8 ) 108.4 123.2 Dividends paid (24.7 ) (24.7 ) (49.2 ) (49.1 )
Other (0.9 ) 5.4 (1.4 ) 4.9
Net cash provided by (used in) financing activities
(1.5 ) (71.1 ) 57.8 79.0
Effects of exchange rates on cash (1.8 ) 3.7 (5.1 ) (0.7 )
Net increase (decrease) in cash and cash equivalents 11.6 5.4 (17.7
) 9.3 Cash and cash equivalents at beginning of the period
55.8 82.0 85.1 78.1
Cash and cash equivalents at end of the period $ 67.4
$ 87.4 $ 67.4 $ 87.4
GREIF, INC. AND
SUBSIDIARY COMPANIES FINANCIAL HIGHLIGHTS BY SEGMENT
UNAUDITED (Dollars in millions)
Three months
ended Six months ended April 30 April 30
2015 2014
2015 2014 Net
sales: Rigid Industrial Packaging & Services $ 666.6 $
784.3 $ 1,316.3 $ 1,496.6 Paper Packaging 160.4 169.8 319.6 339.6
Flexible Products & Services 82.0 105.3 170.1 218.5 Land
Management 6.9 6.1 12.2
12.3 Total net sales $ 915.9 $ 1,065.5
$ 1,818.2 $ 2,067.0
Operating profit
(loss): Rigid Industrial Packaging & Services $ 25.8 $ 51.2
$ 46.0 $ 80.4 Paper Packaging 27.1 26.5 55.2 56.5 Flexible Products
& Services (5.3 ) (10.3 ) (14.1 ) (9.5 ) Land Management
3.5 11.7 29.4 23.1
Total operating profit $ 51.1 $ 79.1 $ 116.5 $
150.5
EBITDA 6: Rigid Industrial
Packaging & Services $ 48.0 $ 77.6 $ 92.8 $ 131.4 Paper
Packaging 34.4 33.8 69.9 71.8 Flexible Products & Services (3.7
) (7.6 ) (10.7 ) (3.8 ) Land Management 4.6
12.5 31.2 24.7 Total EBITDA $
83.3 $ 116.3 $ 183.2 $ 224.1
6 EBITDA is defined as net income, plus interest expense, net,
plus income tax expense, less equity earnings of unconsolidated
affiliates, net of tax, 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 COMPANIES GAAP TO NON-GAAP RECONCILIATION
NET WORKING CAPITAL AND NET DEBT UNAUDITED (Dollars in
millions)
April 30, 2015 October 31,
2014 April 30, 2014 Current assets $ 1,070.6 $
1,154.7 $ 1,175.8 Less: current liabilities 710.3
851.7 813.8 Working capital 360.3 303.0 362.0 Less: cash and
cash equivalents 67.4 85.1 87.4 Net working
capital $ 292.9 $ 217.9 $ 274.6 Long-term debt $ 1,127.2 $
1,087.4 $ 1,300.8 Plus: current portion of long-term debt 25.8 17.6
15.0 Plus: short-term borrowings 63.1 48.1 70.4 Less: cash and cash
equivalents 67.4 85.1 87.4 Net debt $ 1,148.7
$ 1,068.0 $ 1,298.8
GREIF, INC. AND SUBSIDIARY
COMPANIES GAAP TO NON-GAAP RECONCILIATION
CONSOLIDATED EBITDA 7
UNAUDITED (Dollars in millions)
Three months ended
Six months ended April 30 April 30
2015 2014 2015
2014 Net income $ 20.5 $ 37.1 $ 48.7 $ 68.9
Plus: interest expense, net 18.2 20.4 37.8 40.8 Plus: income tax
expense 9.6 19.5 27.1 36.0 Plus: depreciation, depletion and
amortization expense 34.7 39.4 69.3 78.6 Less: equity earnings
(losses) of unconsolidated affiliates, net of tax (0.3 )
0.1 (0.3 ) 0.2 EBITDA $ 83.3 $ 116.3 $
183.2 $ 224.1 Net income $ 20.5 $ 37.1 $ 48.7 $ 68.9
Plus: interest expense, net 18.2 20.4 37.8 40.8 Plus: income tax
expense 9.6 19.5 27.1 36.0 Plus: other expense, net 2.5 2.2 2.6 5.0
Less: equity earnings (losses) of unconsolidated affiliates, net of
tax (0.3 ) 0.1 (0.3 ) 0.2 Operating
profit 51.1 79.1 116.5 150.5 Less: other expense, net 2.5 2.2 2.6
5.0 Plus: depreciation, depletion and amortization expense
34.7 39.4 69.3 78.6 EBITDA $
83.3 $ 116.3 $ 183.2 $ 224.1
7 EBITDA is defined as net income, plus interest expense, net,
plus income tax expense, less equity earnings of unconsolidated
affiliates, net of tax, plus depreciation, depletion and
amortization. As demonstrated in this table, EBITDA can also be
calculated with reference to operating profit.
GREIF, INC. AND SUBSIDIARY COMPANIES GAAP TO
NON-GAAP RECONCILIATION
SEGMENT EBITDA 8
UNAUDITED (Dollars in millions)
Three months ended
Six months ended April 30 April 30
2015 2014 2015
2014 Rigid Industrial Packaging
& Services Operating profit $ 25.8 $ 51.2 $ 46.0 $ 80.4
Less: other expense, net 2.0 0.4 1.6 3.3 Plus: depreciation and
amortization expense 24.2 26.8
48.4 54.3 EBITDA $ 48.0 $ 77.6 $ 92.8 $ 131.4
Paper Packaging Operating profit $ 27.1 $ 26.5 $ 55.2
$ 56.5 Less: other expense, net - 0.8 - - Plus: depreciation and
amortization expense 7.3 8.1
14.7 15.3 EBITDA $ 34.4 $ 33.8 $ 69.9 $ 71.8
Flexible Products & Services Operating loss $
(5.3 ) $ (10.3 ) $ (14.1 ) $ (9.5 ) Less: other expense, net 0.5
1.0 1.0 1.7 Plus: depreciation and amortization expense 2.1
3.7 4.4 7.4 EBITDA
$ (3.7 ) $ (7.6 ) $ (10.7 ) $ (3.8 )
Land Management
Operating profit $ 3.5 $ 11.7 $ 29.4 $ 23.1 Plus: depreciation,
depletion and amortization expense 1.1 0.8
1.8 1.6 EBITDA $ 4.6 $
12.5 $ 31.2 $ 24.7 Consolidated EBITDA
$ 83.3 $ 116.3 $ 183.2 $ 224.1
8 EBITDA is defined as net income, plus interest expense, net,
plus income tax expense, less equity earnings of unconsolidated
affiliates, net of tax, 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 COMPANIES GAAP TO
NON-GAAP RECONCILIATION
FREE CASH FLOW 9
UNAUDITED (Dollars in millions)
Three months ended
Six months ended April 30 April 30
2015 2014 2015
2014 Net cash provided by
(used in) operating activities $ 32.8 $ 103.7 $ (26.5 ) $ 41.5
Less: Capital expenditures (30.6 ) (27.5 ) $ (69.8 )
$ (62.0 )
Free Cash Flows $ 2.2 $ 76.2 $ (96.3
) $ (20.5 )
9 Free cash flow is defined as net cash provided by operating
activities less capital expenditures.
GREIF, INC. AND SUBSIDIARY
COMPANIES GEOGRAPHIC DATA UNAUDITED (Dollars in
millions)
Three months
ended Six months ended April 30 April 30
2015 2014 2015
2014 Net sales: North America $ 452.1 $ 499.4
$ 886.7 $ 966.9 Europe, Middle East and Africa 322.8 415.7 642.6
790.7 Asia Pacific and Latin America 141.0 150.4
288.9 309.4 Total net sales $ 915.9 $ 1,065.5 $
1,818.2 $ 2,067.0
Operating profit: North America $
10.5 $ 56.2 $ 68.1 $ 109.9 Europe, Middle East and Africa 24.4 18.4
26.9 32.3 Asia Pacific and Latin America 16.2 4.5
21.5 8.3 Total operating profit $ 51.1 $ 79.1 $ 116.5
$ 150.5 Notes: The North America region includes
businesses from Rigid Industrial Packaging & Services, Paper
Packaging, Flexible Products & Services and Land Management.
The Europe, Middle East and Africa region includes
businesses from Rigid Industrial Packaging & Services and
Flexible Products & Services. The Asia Pacific and Latin
America region includes businesses from Rigid Industrial Packaging
& Services and Flexible Products & Services.
GREIF,
INC. AND SUBSIDIARY COMPANIES SPECIAL ITEMS BY SEGMENT
UNAUDITED (Dollars in millions)
Three months
ended Six months ended April 30 April 30
2015 2014
2015 2014 Rigid Industrial
Packaging & Services Restructuring charges $ 6.4 $ 0.8 $
8.8 $ 3.1 Acquisition-related costs - 0.3 0.2 0.8 Non-cash asset
impairment charges 4.8 - 4.9 0.2 (Gain) loss on disposal of
properties, plants, equipment and businesses, net 10.7
(1.3 ) 9.5 0.2 Total
special Items 21.9 (0.2 ) 23.4 4.3
Paper Packaging
Restructuring charges 0.5 - 0.5 - Non-cash asset impairment charges
0.5 - 0.5 - Gain on disposal of properties, plants, equipment and
businesses, net (0.1 ) - (0.1 )
(0.8 ) Total special Items 0.9 - 0.9 (0.8 )
Flexible
Products & Services Restructuring charges 0.4 3.1 1.2 3.2
Non-cash asset impairment charges (0.8 ) - (0.7 ) - Gain on
disposal of properties, plants, equipment and businesses, net
- (0.1 ) (0.8 ) (0.2 ) Total
special Items (0.4 ) 3.0 (0.3 ) 3.0
Land Management
Timberland gains - (8.7 ) (24.3 ) (17.1 ) Gain on disposal of
properties, plants, equipment and businesses, net (0.9 )
(1.3 ) (1.3 ) (2.7 ) Total special Items
(0.9 ) (10.0 ) (25.6 ) (19.8 )
Total special items $ 21.5 $ (7.2 ) $ (1.6 ) $ (13.3 )
GREIF, INC. AND SUBSIDIARY COMPANIES GAAP
TO NON-GAAP RECONCILIATION SEGMENT OPERATING PROFIT (LOSS)
BEFORE SPECIAL ITEMS UNAUDITED (Dollars in millions)
Three months ended Six months ended April 30
April 30 2015 2014
2015 2014
Operating profit (loss): Rigid Industrial Packaging &
Services $ 25.8 $ 51.2 $ 46.0 $ 80.4 Paper Packaging 27.1 26.5 55.2
56.5 Flexible Products & Services (5.3 ) (10.3 ) (14.1 ) (9.5 )
Land Management 3.5 11.7 29.4
23.1 Total operating profit (loss) 51.1
79.1 116.5 150.5
Restructuring charges: Rigid Industrial Packaging &
Services 6.4 0.8 8.8 3.1 Paper Packaging 0.5 - 0.5 - Flexible
Products & Services 0.4 3.1
1.2 3.2 Total restructuring charges 7.3
3.9 10.5 6.3
Acquisition-related costs: Rigid Industrial Packaging &
Services - 0.3 0.2
0.8 Total acquisition-related costs -
0.3 0.2 0.8
Timberland
gains: Land Management - (8.7 )
(24.3 ) (17.1 ) Total timberland gains -
(8.7 ) (24.3 ) (17.1 )
Non-cash asset
impairment charges: Rigid Industrial Packaging & Services
4.8 - 4.9 0.2 Paper Packaging 0.5 - 0.5 - Flexible Products &
Services (0.8 ) - (0.7 ) -
Total non-cash asset impairment charges 4.5
- 4.7 0.2
(Gain) loss
on disposal of properties, plants, equipment and businesses,
net: Rigid Industrial Packaging & Services 10.7 (1.3 ) 9.5
0.2 Paper Packaging (0.1 ) - (0.1 ) (0.8 ) Flexible Products &
Services - (0.1 ) (0.8 ) (0.2 ) Land Management (0.9 )
(1.3 ) (1.3 ) (2.7 ) Total (gain) loss on
disposal of properties, plants, equipment and businesses, net:
9.7 (2.7 ) 7.3 (3.5 )
Operating profit (loss) before special items
10: Rigid Industrial Packaging & Services 47.7
51.0 69.4 84.7 Paper Packaging 28.0 26.5 56.1 55.7 Flexible
Products & Services (5.7 ) (7.3 ) (14.4 ) (6.5 ) Land
Management 2.6 1.7 3.8
3.3 Total operating profit (loss) before special
items $ 72.6 $ 71.9 $ 114.9 $ 137.2
10 Operating profit (loss) before special items is defined as
operating profit (loss) plus restructuring charges plus
acquisition-related costs plus non-cash impairment charges less
timberland gains less (gain) loss on disposal of properties,
plants, equipment and businesses, net.
GREIF, INC. AND SUBSIDIARY COMPANIES GAAP TO
NON-GAAP RECONCILIATION SEGMENT EBITDA BEFORE SPECIAL
ITEMS UNAUDITED (Dollars in millions)
Three months
ended Six months ended April 30 April 30
2015 2014
2015 2014 EBITDA
11: Rigid Industrial Packaging & Services $ 48.0
$ 77.6 $ 92.8 $ 131.4 Paper Packaging 34.4 33.8 69.9 71.8 Flexible
Products & Services (3.7 ) (7.6 ) (10.7 ) (3.8 ) Land
Management 4.6 12.5 31.2
24.7 Total EBITDA 83.3 116.3
183.2 224.1
Restructuring
charges: Rigid Industrial Packaging & Services 6.4 0.8 8.8
3.1 Paper Packaging 0.5 - 0.5 - Flexible Products & Services
0.4 3.1 1.2 3.2
Total restructuring charges 7.3 3.9
10.5 6.3
Acquisition-related
costs: Rigid Industrial Packaging & Services -
0.3 0.2 0.8 Total
acquisition-related costs - 0.3
0.2 0.8
Timberland gains: Land
Management - (8.7 ) (24.3 )
(17.1 ) Total timberland gains - (8.7 )
(24.3 ) (17.1 )
Non-cash asset impairment charges:
Rigid Industrial Packaging & Services 4.8 - 4.9 0.2 Paper
Packaging 0.5 - 0.5 - Flexible Products & Services (0.8
) - (0.7 ) - Total non-cash
asset impairment charges 4.5 -
4.7 0.2
(Gain) loss on disposal of
properties, plants, equipment and businesses, net: Rigid
Industrial Packaging & Services 10.7 (1.3 ) 9.5 0.2 Paper
Packaging (0.1 ) - (0.1 ) (0.8 ) Flexible Products & Services -
(0.1 ) (0.8 ) (0.2 ) Land Management (0.9 ) (1.3 )
(1.3 ) (2.7 ) Total (gain) loss on disposal of
properties, plants, equipment and businesses, net: 9.7
(2.7 ) 7.3 (3.5 )
EBITDA
before special items 12: Rigid Industrial
Packaging & Services 69.9 77.4 116.2 135.7 Paper Packaging 35.3
33.8 70.8 71.0 Flexible Products & Services (4.1 ) (4.6 ) (11.0
) (0.8 ) Land Management 3.7 2.5
5.6 4.9 Total EBITDA before special items $
104.8 $ 109.1 $ 181.6 $ 210.8
11 EBITDA is defined as net income, plus interest expense, net,
plus income tax expense, less equity earnings of unconsolidated
affiliates, net of tax, 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.
12 EBITDA before special items is defined as EBITDA plus
restructuring charges plus acquisition-related costs plus non-cash
impairment charges less timberland gains less (gain) loss on
disposal of properties, plants, equipment and businesses, net.
GREIF, INC. AND SUBSIDIARY
COMPANIES
GAAP TO NON-GAAP RECONCILIATION
CLASS A EARNINGS PER SHARE
EXCLUDING SPECIAL ITEMS
UNAUDITED
(Dollars in millions, except per share
amounts)
Three months ended April 30, 2015
Class A Net Income Attributable to Greif $ 20.8
$ 0.35
Less: (Gain) loss on disposal of
properties, plants, equipment and businesses, net
2.9 0.05 Less: Timberland Gains - - Plus: Restructuring charges 4.9
0.08 Plus: Non-cash asset impairment charges 2.9 0.05 Plus:
Acquisition related costs - - Net
Income Attributable to Greif Excluding Special Items $ 31.5
$ 0.53
Three months ended April 30,
2014 Class A Net Income Attributable to
Greif $ 38.4 $ 0.65
Less: (Gain) loss on disposal of
properties, plants, equipment and businesses, net
(1.7 ) (0.03 ) Less: Timberland Gains (5.5 ) (0.07 ) Plus:
Restructuring charges 2.3 0.03 Plus: Non-cash asset impairment
charges - - Plus: Acquisition related costs 0.1
- Net Income Attributable to Greif Excluding Special
Items $ 33.6 $ 0.58
Six months ended April 30, 2015 Class
A Net Income Attributable to Greif $ 50.9 $ 0.87
Less: (Gain) loss on disposal of
properties, plants, equipment and businesses, net
1.5 0.02 Less: Timberland Gains (14.9 ) (0.24 ) Plus: Restructuring
charges 7.6 0.13 Plus: Accelerated Depreciation 0.7 0.01 Plus:
Non-cash asset impairment charges 3.0 0.05 Plus: Acquisition
related costs 0.1 - Net Income
Attributable to Greif Excluding Special Items $ 48.9 $ 0.84
Six months ended April 30, 2014
Class A Net Income Attributable to Greif $ 69.1
$ 1.18
Less: (Gain) loss on disposal of
properties, plants, equipment and businesses, net
(2.2 ) (0.04 ) Less: Timberland Gains (11.0 ) (0.19 ) Plus:
Restructuring charges 3.9 0.07 Plus: Accelerated Depreciation - -
Plus: Non-cash asset impairment charges 0.1 - Plus: Acquisition
related costs 0.5 0.01 Net Income
Attributable to Greif Excluding Special Items $ 60.4 $ 1.03
* All special items are net of tax and noncontrolling
interests
GREIF, INC. AND SUBSIDIARY
COMPANIES GAAP TO NON-GAAP RECONCILIATION
SELECTED FINANCIAL INFORMATION
EXCLUDING
THE IMPACT OF DIVESTITURES
UNAUDITED (Dollars in millions)
Three months ended
Six months ended April 30
April 30
2015
Impact ofDivestitures
Excluding theImpact
ofDivestitures2015 13
2015
Impact ofDivestitures
Excluding theImpact
ofDivestitures2015 13
Net Sales: Rigid Industrial Packaging & Services $ 666.6
$ 20.9 $ 645.7 $ 1,316.3 $ 40.9 $ 1,275.4 Paper Packaging 160.4 -
160.4 319.6 - 319.6 Flexible Products and Services 82.0 - 82.0
170.1 3.3 166.8 Land Management 6.9 -
6.9 12.2 - 12.2
Consolidated $ 915.9 $ 20.9 $ 895.0 $
1,818.2 $ 44.2 $ 1,774.0
Gross
Profit: Rigid Industrial Packaging & Services $ 125.8 $ 0.1
$ 125.7 $ 230.3 $ 0.5 $ 229.8 Paper Packaging 41.2 - 41.2 81.9 (0.1
) 82.0 Flexible Products and Services 10.8 - 10.8 17.9 0.5 17.4
Land Management 3.3 - 3.3
4.9 - 4.9 Consolidated $
181.1 $ 0.1 $ 181.0 $
335.0
$ 0.9 $ 334.1
Operating Profit:
Rigid Industrial Packaging & Services $ 25.8 $ (2.7 ) $ 28.5 $
46.0 $ (4.3 ) $ 50.3 Paper Packaging 27.1 - 27.1 55.2 (0.1 ) 55.3
Flexible Products and Services (5.3 ) - (5.3 ) (14.1 ) 0.1 (14.2 )
Land Management 3.5 - 3.5
29.4 - 29.4 Consolidated
$ 51.1 $ (2.7 ) $ 53.8 $ 116.5 $ (4.3 ) $
120.8
Operating profit (loss) before special
items 14: Rigid Industrial Packaging &
Services $ 47.7 $ (1.7 ) $ 49.4 $ 69.4 $ (3.4 ) $ 72.8 Paper
Packaging 28.0 - 28.0 56.1 (0.1 ) 56.2 Flexible Products and
Services (5.7 ) - (5.7 ) (14.4 ) 0.1 (14.5 ) Land Management
2.6 - 2.6 3.8
- 3.8 Consolidated $ 72.6 $ (1.7
) $ 74.3 $ 114.9 $ (3.4 ) $ 118.3
2014
Impact ofDivestitures
Excluding theImpact
ofDivestitures2014 13
2014
Impact ofDivestitures
Excluding theImpact
ofDivestitures2014 13
Net Sales: Rigid Industrial Packaging & Services $ 784.3
$ 46.7 $ 737.6 $ 1,496.6 $ 88.1 $ 1,408.5 Paper Packaging 169.8 4.7
165.1 339.6 9.5 330.1 Flexible Products and Services 105.3 14.9
90.4 218.5 34.9 183.6 Land Management 6.1 -
6.1 12.3 -
12.3 Consolidated $ 1,065.5 $ 66.3 $ 999.2
$ 2,067.0 $ 132.5 $ 1,934.5
Gross Profit: Rigid Industrial Packaging & Services $
144.1 $ 4.2 $ 139.9 $ 263.1 $ 7.4 $ 255.7 Paper Packaging 43.1 0.7
42.4 86.3 1.4 84.9 Flexible Products and Services 14.8 2.6 12.2
36.5 6.9 29.6 Land Management 2.3 -
2.3 4.5 - 4.5
Consolidated $ 204.3 $ 7.5 $ 196.8 $
390.4 $ 15.7 $ 374.7
Operating
Profit: Rigid Industrial Packaging & Services $ 51.2 $ 0.2
$ 51.0 $ 80.4 $ (1.3 ) $ 81.7 Paper Packaging 26.5 0.2 26.3 56.5
0.4 56.1 Flexible Products and Services (10.3 ) 0.4 (10.7 ) (9.5 )
2.5 (12.0 ) Land Management 11.7 -
11.7 23.1 - 23.1
Consolidated $ 79.1 $ 0.8 $ 78.3 $
150.5 $ 1.6 $ 148.9
Operating profit
(loss) before special items 14: Rigid Industrial
Packaging & Services $ 51.0 $ (0.5 ) $ 51.5 $ 84.7 $ (1.8 ) $
86.5 Paper Packaging 26.5 0.2 26.3 55.7 0.4 55.3 Flexible Products
and Services (7.3 ) 0.4 (7.7 ) (6.5 ) 2.3 (8.8 ) Land Management
1.7 - 1.7 3.3
- 3.3 Consolidated $ 71.9
$ 0.1 $ 71.8 $ 137.2 $ 0.9 $ 136.3
Note: The 2014 acquisitions were completed at
the beginning of the fiscal year and are not adjusted because they
are fully reflected in both periods.
13 Results excluding the impact of divestitures reflects net
sales, gross profit and operating profit adjusted for divestitures
occurring during FY14 and FY15.
14 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.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20150609005886/en/
Greif, Inc.Analyst:Robert Lentz, 614-876-2000orMedia:Scott
Griffin, 740-657-6516
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