Greif, Inc. (NYSE: GEF, GEF.B), a world leader in industrial
packaging products and services, today reported third quarter 2015
net income attributable to the corporation totaling $8.6 million or
$0.15 per diluted Class A share on sales of $930.0 million compared
with net income of $13.7 million or $0.23 per diluted Class A share
on sales of $1,124.0 million in the third quarter of 2014. After
adjusting for the effect of divestitures for both quarters and
currency translation for the third quarter 20151, sales were 2.7
percent lower for the quarter when compared to the third quarter of
2014 primarily due to lower raw material costs. Excluding the
impact of special items2, earnings were $0.60 per diluted Class A
share for the third quarter of 2015 compared to $0.58 per diluted
Class A share for the third quarter of 2014.
David Fischer, president and chief executive officer, stated,
“We are pleased with the progress of our Transformation initiative.
While much work remains, during the third quarter we continued to
reduce complexity in our businesses, achieved a 16% decrease in
SG&A expenses excluding the impact of currency translation
compared to a year ago, and improved capacity utilization in our
rigid industrial packaging segment. The benefits from these
concentrated efforts are becoming more evident and positive
momentum is increasing with each passing month. I am especially
pleased with the hard work and efforts of so many Greif colleagues
all over the world to achieve our stated goals.”
Mr. Fischer added, “Concerning the growth elements of our
transformation activities, we are equally encouraged with the
progress made on several key initiatives including our IBC global
expansion efforts and by the exceptional performance of recently
completed investments at the Riverville, Virginia mill and the
additional corrugator in our Paper Packaging segment. These
transformation improvements bode well for 2016.”
Rigid Industrial Packaging & Services
Net sales decreased 19.2 percent to $669.0 million for the third
quarter of 2015 compared with $827.7 million for the third quarter
of 2014. Excluding the impact of divestitures3, net sales decreased
14.4 percent to $667.9 million for the third quarter of 2015
compared with $780.7 million for the third quarter of 2014. The
decrease in net sales was primarily due to the negative impact of
foreign currency translation of 10.8 percent and price decreases of
3.7 percent, due mainly to the impact of decreases in raw material
costs, compared to the third quarter of 2014, respectively.
Operating profit was $29.5 million for the third quarter of 2015
compared to $43.0 million for the third 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 write-down of the value of the
Company’s inventory in Venezuela of $9.3 million as part of the
overall remeasurement of the Venezuelan balance sheet discussed
further below. Operating profit before special items and excluding
the impact of divestitures was $60.2 million for the third quarter
of 2015 versus $63.0 million for the third quarter of 2014.
1
A summary of the adjustments for the impact of divestitures and
currency translation is set forth in the GAAP to Non-GAAP
Reconciliation of Net Sales to Net Sales Excluding the Impact of
Divestitures and Currency Translation in the financial schedules
that are part of this release
2
A summary of all special items that are included in the earnings
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
3
A summary of all adjustments by business segment related to the
impact of divestitures and special items that are excluded from net
sales, gross profit and operating profit is set forth in the GAAP
to Non-GAAP Reconciliation of Selected Financial Information
Excluding the Impact of Divestitures in the financial schedules
that are part of 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 2.2 percent to $176.7 million for the third
quarter of 2015 compared with $180.6 million for the third quarter
of 2014. Excluding the impact of divestitures, net sales were
$176.7 million for the third quarter of 2015 compared with $175.6
million for the third quarter of 2014. The increase was
attributable to slightly higher volumes in the Company’s sheet
business.
Operating profit was $21.5 million for the third quarter of 2015
compared with $27.9 million for the third quarter of 2014. The
decrease was primarily due to the planned shut-down of the
Riverville facility for a longer period of time in the third
quarter of 2015 compared to the third quarter of 2014, lower
margins in containerboard and sheet feeder operations due to
pricing pressure from new market entrants and an increase in
restructuring charges and non-cash asset impairment charges of $0.8
million. The Company also made immaterial adjustments to certain
reserves and inventories to more appropriately reflect those
balances. The adjustments primarily impacted cost of products sold
for Paper Packaging.
Flexible Products & Services
Net sales decreased 26.2 percent to $79.2 million for the third
quarter of 2015 compared with $107.3 million for the third quarter
of 2014. Excluding the impact of divestitures, net sales decreased
13.5 percent to $79.2 million for the third quarter of 2015
compared with $91.6 million for the third quarter of 2014. The
decrease was primarily attributable to the impact of decreased
volumes of 8.9 percent, which were more than offset by an 11.1
percent increase in prices, and the negative impact of foreign
currency translation of 15.7 percent.
Operating loss was $9.7 million for the third quarter of 2015
versus an operating loss of $12.9 million for the third quarter of
2014. Operating loss before special items and excluding the impact
of divestitures was $4.3 million for the third quarter of 2015
versus $5.6 million for the third 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) as well as reductions in SG&A and production
costs as a result of transformation efforts in the segment,
partially offset by higher costs of the move to an in-house labor
force, which was prompted primarily by changes in the local
regulatory environment.
Land Management
Net sales decreased 39.3 percent to $5.1 million for the third
quarter of 2015 compared with $8.4 million for the third quarter of
2014. The decrease was due to lower timber sales as planned for the
third quarter of 2015.
Operating profit was $2.9 million for the third quarter of 2015
compared with $3.3 million for the third quarter of 2014. The
decrease was due to the same factors impacting the segment’s net
sales.
Venezuela Hyperinflation Adjustments
The Company’s results of its Venezuelan businesses have been
reported under highly inflationary accounting since 2010, and the
functional currency was converted to US Dollars at that time. As a
result of recent government action and significant continued
devaluation of the Bolivar, the Company has reconsidered which
of the available exchange rates best reflects the economics of
Greif’s business activities and has concluded that the Company
should utilize the SIMADI rate to remeasure its Venezuelan
operations effective July 31, 2015. The SIMADI exchange mechanism
was created by the Venezuelan government to establish a more market
driven exchange rate and is intended to be available to individuals
and both public and private companies.
As a result of the utilization of the SIMADI rate and associated
local currency denominated balance sheet remeasurement on July 31,
2015, the Company recorded after-tax other income of $4.9 million
related to the remeasurement of its Venezuelan monetary assets and
liabilities during the third quarter. In addition, the Company
recorded an adjustment of $9.3 million to write down the value of
its inventory to net realizable value on a US Dollar basis.
Finally, upon review of long-lived assets for impairment, the
Company determined that the carrying amount of those assets in
Venezuela was not recoverable in US dollar functional currency and
recorded an impairment charge of $15.0 million. The Company’s
overall gross margin percentage for the quarter is 1% lower due to
the impact of the inventory adjustment. Results of the Company’s
Venezuelan operations will be translated to US Dollars using the
SIMADI exchange rate as of August 1, 2015.
Dividends
On September 1, 2015, the Board of Directors declared quarterly
cash dividends of $0.42 per share of Class A Common Stock and $0.63
per share of Class B Common Stock. Dividends are payable on October
1, 2015, to stockholders of record at close of business on
September 18, 2015.
Company Outlook
We anticipate that the remainder of our fiscal
year will be marked by continued currency volatility, a soft global
manufacturing environment and continuing deflationary raw material
costs. These factors, combined with the continued strength of the
US dollar, will result in lower year over year revenue. From an
earnings perspective, we will continue to benefit from the
execution of our transformation initiatives, including our SG&A
cost reduction actions. However, those cost reduction benefits will
be offset somewhat in the fourth quarter due to the expected
accrual of professional fees related to the SG&A reduction
efforts and increased medical expense costs related to experience
trends throughout the year. Excluding the impact of special items,
fiscal 2015 Class A earnings per share are expected to be in the
range of $1.85-$1.95 compared to previous guidance of $1.65-$1.75
per Class A share.
GREIF, INC. AND SUBSIDIARY COMPANIES SELECTED
FINANCIAL HIGHLIGHTS UNAUDITED (Dollars in millions, except per
share amounts)
Three months ended
Nine months ended July 31 July 31
Selected Financial
Highlights
2015 2014 2015 2014 Net
sales $ 930.0 $ 1,124.0 $ 2,748.2 $ 3,191.0 Operating profit 44.2
61.3 160.7 211.8 Operating profit before special items 79.3 89.0
194.2 226.2 EBITDA 77.4 98.5 260.6 322.6 EBITDA before special
items 107.6 126.2 289.2 337.0 Cash provided by operating activities
99.9 75.3 73.4 116.8 Net income attributable to Greif, Inc. 8.6
13.7 59.5 82.8 Diluted Class A earnings per share attributable to
Greif, Inc. $ 0.15 $ 0.23 $ 1.02 $ 1.41 Diluted Class A earnings
per share attributable to Greif, Inc. before special items $ 0.60 $
0.58 $ 1.41 $ 1.63
Special
items
Restructuring charges
$ (16.2 ) $ (4.2 ) $ (26.7 ) $ (10.5 ) Acquisition-related costs
(0.1 ) (0.4 ) (0.3 ) (1.2 ) Timberland gains - - 24.3 17.1 Non-cash
asset impairment charges (17.6 ) (15.4 ) (22.3 ) (15.6 ) Gain
(loss) on disposal of properties, plants, equipment and businesses,
net 8.1 (7.7 ) 0.8 (4.2 ) Impact of Venezuela devaluation on cost
of products sold (9.3 ) - (9.3 ) - Impact of Venezuela devaluation
on other income/expense 4.9 -
4.9 - Total special items (30.2 )
(27.7 ) (28.6 ) (14.4 ) Total special items,
net of tax (26.5 ) (19.6 ) (23.2 )
(12.7 ) Impact of total special items, net of tax, on diluted Class
A earnings per share attributable to Greif, Inc. $ (0.45 ) $ (0.35
) $ (0.39 ) $ (0.22 )
July 31, 2015 October 31,
2014 July 31, 2014 Working capital 4 $ 383.6 $ 303.0 $
364.1 Net working capital 4 281.9 217.9 299.1 Long-term debt
1,154.9 1,087.4 1,228.9 Net debt 5 1,128.0 1,068.0 1,259.2
2015
Impact ofDivestitures
Excluding theImpact
ofDivestitures2015
Net Sales $ 930.0 $ 1.1 $ 928.9 Gross Profit 166.8 (0.3 ) 167.1
Operating Profit 44.2 0.2 44.0 Operating Profit before special
items
: 79.3 (0.5 ) 79.8
2014
Impact ofDivestitures
Excluding theImpact
ofDivestitures2014
Net Sales $ 1,124.0 $ 67.7 $ 1,056.3 Gross Profit 217.7 8.3 209.4
Operating Profit 61.3 (5.7 ) 67.0 Operating Profit before special
items
: 89.0 0.9 88.1
Excluding theImpact
ofDivestitures
Impact
ofCurrencyTranslation
Excluding theImpact
ofDivestitures andCurrencyTranslation
Net Sales 2015 $ 928.9 $ (99.3 ) $ 1,028.2 Net Sales 2014 $ 1,056.3
N/A $ 1,056.3
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 third
quarter of 2015 results on September 4, 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.
The company encourages interested investors, analysts and
portfolio managers to submit questions in advance of the conference
call regarding Greif’s quarterly performance to
investors@Greif.com. Questions will be accepted until Thursday,
September 3 at 5:00 p.m. ET. The company will address both
previously submitted questions and questions asked during 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 Nine months ended July 31
July 31 2015 2014 2015
2014 Net sales $ 930.0 $ 1,124.0 $ 2,748.2 $ 3,191.0
Cost of products sold 763.2 906.3
2,246.4 2,582.9 Gross profit 166.8
217.7 501.8 608.1 Selling, general and administrative
expenses 96.9 129.1 317.2 383.1 Restructuring charges 16.2 4.2 26.7
10.5 Timberland gains - - (24.3 ) (17.1 ) Non-cash asset impairment
charges 17.6 15.4 22.3 15.6 Gain on disposal of properties, plants
and equipment, net (7.0 ) (1.4 ) (9.3 ) (5.5 ) (Gain) loss on
disposal of businesses (1.1 ) 9.1 8.5
9.7 Operating profit 44.2 61.3 160.7 211.8
Interest expense, net 18.4 20.7 56.2 61.5 Other (income)
expense, net (1.6 ) 1.6 1.0
6.6 Income before income tax expense and
equity earnings of unconsolidated affiliates, net 27.4 39.0 103.5
143.7 Income tax expense 18.7 28.2 45.8 64.2 Equity
earnings of unconsolidated affiliates, net of tax 0.6
0.7 0.3 0.9 Net income
9.3 11.5 58.0 80.4 Net (income) loss attributable to noncontrolling
interests (0.7 ) 2.2 1.5
2.4 Net income attributable to Greif, Inc. $ 8.6 $
13.7 $ 59.5 $ 82.8
Basic earnings
per share attributable to Greif, Inc. common shareholders:
Class A Common Stock $ 0.15 $ 0.23 $ 1.02 $ 1.41 Class B Common
Stock $ 0.22 $ 0.35 $ 1.51 $ 2.11
Diluted earnings per
share attributable to Greif, Inc. common shareholders: Class A
Common Stock $ 0.15 $ 0.23 $ 1.02 $ 1.41 Class B Common Stock $
0.22 $ 0.35 $ 1.51 $ 2.11
Shares used to calculate basic
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
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)
July
31, 2015 October 31, 2014 ASSETS
CURRENT ASSETS Cash and cash equivalents $ 101.7 $ 85.1
Trade accounts receivable 461.9 501.3 Inventories 334.7 381.1 Other
current assets 181.7 187.2 1,080.0
1,154.7 LONG-TERM ASSETS Goodwill 810.3 880.2 Intangible
assets 137.8 166.5 Assets held by special purpose entities 50.9
50.9 Other long-term assets 103.0 122.1
1,102.0 1,219.7 PROPERTIES, PLANTS AND EQUIPMENT
1,233.3 1,293.0 $ 3,415.3 $ 3,667.4
LIABILITIES AND EQUITY CURRENT LIABILITIES Accounts
payable $ 357.4 $ 471.1 Short-term borrowings 50.7 48.1 Current
portion of long-term debt 24.1 17.6 Other current liabilities
264.2 314.9 696.4 851.7
LONG-TERM LIABILITIES Long-term debt 1,154.9 1,087.4 Liabilities
held by special purpose entities 43.3 43.3 Other long-term
liabilities 428.2 461.8 1,626.4 1,592.5
TOTAL EQUITY 1,092.5 1,223.2 $ 3,415.3
$ 3,667.4
GREIF, INC. AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(Dollars in millions)
Three months ended
Nine months ended July 31 July 31
2015 2014 2015 2014 CASH
FLOWS FROM OPERATING ACTIVITIES: Net income $ 9.3 $ 11.5 $ 58.0 $
80.4 Depreciation, depletion and amortization 31.6 38.8 100.9 117.4
Asset impairments 17.6 15.4 22.3 15.6 Impact of Venezuela
devaluation on other income/expense (4.9 ) - (4.9 ) - Impact of
Venezuela devaluation on cost of products sold 9.3 - 9.3 - Other
non-cash adjustments to net income (8.7 ) 5.0 (32.6 ) (19.7 )
Working capital changes 9.4 (21.0 ) (70.6 ) (75.3 )
Increase (decrease) in cash from changes
in certain assets and liabilities and other
36.3 25.6 (9.0 ) (1.6 )
Net cash provided by operating activities 99.9
75.3 73.4 116.8 CASH
FLOWS FROM INVESTING ACTIVITIES: Acquisitions of companies, net of
cash acquired (1.1 ) (1.2 ) (1.5 ) (53.5 ) Purchases of properties,
plants and equipment (38.4 ) (32.0 ) (108.2 ) (94.0 ) Purchases of
timber properties (12.8 ) (22.0 ) (38.2 ) (55.7 ) Proceeds from the
sale of properties, plants, equipment, businesses, timberland and
other assets 14.0 33.6 65.7 70.2 Payments on notes receivable with
related party, net 3.4 - 3.4 - Other - 0.4
- 1.3 Net cash used in investing
activities (34.9 ) (21.2 ) (78.8 )
(131.7 ) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from
(payments on) debt, net 12.8 (53.8 ) 121.2 69.4 Dividends paid to
Greif, Inc. shareholders (24.8 ) (24.7 ) (74.0 ) (73.8 ) Other
(2.4 ) 2.7 (3.8 ) 7.6 Net
cash provided by (used in) financing activities (14.4 )
(75.8 ) 43.4 3.2 Effects
of exchange rates on cash (16.3 ) (0.7 ) (21.4 ) (1.4 ) Net
increase (decrease) in cash and cash equivalents 34.3 (22.4 ) 16.6
(13.1 ) Cash and cash equivalents at beginning of the period
67.4 87.4 85.1 78.1
Cash and cash equivalents at end of the period $ 101.7
$ 65.0 $ 101.7 $ 65.0
GREIF, INC. AND SUBSIDIARY COMPANIES FINANCIAL HIGHLIGHTS
BY SEGMENT UNAUDITED (Dollars in millions)
Three months ended Nine months ended July
31 July 31 2015 2014 2015
2014 Net sales: Rigid Industrial
Packaging & Services $ 669.0 $ 827.7 $ 1,985.3 $ 2,324.3 Paper
Packaging 176.7 180.6 496.3 520.2 Flexible Products & Services
79.2 107.3 249.3 325.8 Land Management 5.1 8.4
17.3 20.7 Total net sales $
930.0 $ 1,124.0 $ 2,748.2 $ 3,191.0
Operating profit (loss): Rigid Industrial Packaging
& Services $ 29.5 $ 43.0 $ 75.5 $ 123.4 Paper Packaging 21.5
27.9 76.7 84.4 Flexible Products & Services (9.7 ) (12.9 )
(23.8 ) (22.4 ) Land Management 2.9 3.3
32.3 26.4 Total operating profit $ 44.2
$ 61.3 $ 160.7 $ 211.8
EBITDA 6: Rigid Industrial Packaging &
Services $ 52.4 $ 69.1 $ 145.2 $ 200.5 Paper Packaging 28.7 35.2
98.6 107.0 Flexible Products & Services (7.4 ) (10.5 ) (18.1 )
(14.3 ) Land Management 3.7 4.7
34.9 29.4 Total EBITDA $ 77.4 $ 98.5
$ 260.6 $ 322.6
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)
July 31, 2015 October 31, 2014
July 31, 2014 Current assets $ 1,080.0 $ 1,154.7 $
1,241.6 Less: current liabilities 696.4 851.7
877.5 Working capital 383.6 303.0 364.1 Less: cash and cash
equivalents 101.7 85.1 65.0 Net working
capital $ 281.9 $ 217.9 $ 299.1 Long-term debt $ 1,154.9 $
1,087.4 $ 1,228.9 Plus: current portion of long-term debt 24.1 17.6
17.5 Plus: short-term borrowings 50.7 48.1 77.8 Less: cash and cash
equivalents 101.7 85.1 65.0 Net debt $ 1,128.0
$ 1,068.0 $ 1,259.2
GREIF, INC. AND SUBSIDIARY
COMPANIES GAAP TO NON-GAAP RECONCILIATION
CONSOLIDATED EBITDA 7 UNAUDITED (Dollars in millions)
Three months ended Nine months
ended July 31 July 31 2015
2014 2015 2014 Net income $ 9.3
$ 11.5 $ 58.0 $ 80.4 Plus: interest expense, net 18.4 20.7 56.2
61.5 Plus: income tax expense 18.7 28.2 45.8 64.2 Plus:
depreciation, depletion and amortization expense 31.6 38.8 100.9
117.4 Less: equity earnings of unconsolidated affiliates, net of
tax 0.6 0.7 0.3 0.9 EBITDA $
77.4 $ 98.5 $ 260.6 $ 322.6 Net income $ 9.3 $ 11.5 $
58.0 $ 80.4 Plus: interest expense, net 18.4 20.7 56.2 61.5 Plus:
income tax expense 18.7 28.2 45.8 64.2 Plus: other (income)
expense, net (1.6 ) 1.6 1.0 6.6 Less: equity earnings of
unconsolidated affiliates, net of tax 0.6 0.7
0.3 0.9 Operating profit 44.2 61.3 160.7 211.8 Less:
other (income) expense, net (1.6 ) 1.6 1.0 6.6 Plus: depreciation,
depletion and amortization expense 31.6 38.8
100.9 117.4 EBITDA $ 77.4 $ 98.5 $ 260.6 $
322.6
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
Nine months ended July 31 July 31
2015 2014 2015 2014
Rigid Industrial Packaging & Services Operating profit $
29.5 $ 43.0 $ 75.5 $ 123.4 Less: other (income) expense, net (1.1 )
0.7 0.5 4.0 Plus: depreciation and amortization expense 21.8
26.8 70.2 81.1
EBITDA $ 52.4 $ 69.1 $ 145.2 $ 200.5
Paper Packaging
Operating profit $ 21.5 $ 27.9 $ 76.7 $ 84.4 Less: other (income)
expense, net (0.4 ) - (0.4 ) - Plus: depreciation and amortization
expense 6.8 7.3 21.5
22.6 EBITDA $ 28.7 $ 35.2 $ 98.6 $ 107.0
Flexible Products & Services Operating loss $ (9.7 ) $
(12.9 ) $ (23.8 ) $ (22.4 ) Less: other (income) expense, net (0.1
) 0.9 0.9 2.6 Plus: depreciation and amortization expense
2.2 3.3 6.6 10.7
EBITDA $ (7.4 ) $ (10.5 ) $ (18.1 ) $ (14.3 )
Land
Management Operating profit $ 2.9 $ 3.3 $ 32.3 $ 26.4 Plus:
depreciation, depletion and amortization expense 0.8
1.4 2.6 3.0 EBITDA $ 3.7
$ 4.7 $ 34.9 $ 29.4 Consolidated
EBITDA $ 77.4 $ 98.5 $ 260.6 $ 322.6
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 Nine months
ended July 31 July 31 2015
2014 2015 2014 Net cash
provided by operating activities $ 99.9 $ 75.3 $ 73.4 $ 116.8
Less: Capital expenditures (38.4 ) (32.0 ) $ (108.2 )
$ (94.0 )
Free Cash Flows $ 61.5 $ 43.3 $
(34.8 ) $ 22.8
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
Nine months ended July 31 July 31
2015 2014 2015 2014
Net sales: North America $ 441.4 $ 516.4 $ 1,306.2 $
1,461.1 Europe, Middle East and Africa 337.3 428.2 979.5 1,216.7
Asia Pacific and Latin America 151.3 179.4
462.5 513.2 Total net sales $ 930.0 $ 1,124.0
$ 2,748.2 $ 3,191.0
Operating profit (loss): North
America $ 48.3 $ 41.0 $ 116.4 $ 152.2 Europe, Middle East and
Africa 12.1 12.7 39.0 43.7 Asia Pacific and Latin America
(16.2 ) 7.6 5.3 15.9 Total operating profit $
44.2 $ 61.3 $ 160.7 $ 211.8 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. Operating profit for the Asia Pacific and Latin America
geography includes the $9.3 million Venezuelan cost of products
sold adjustment and the $15.0 million non-cash asset impairment of
the Company’s Venezuelan property, plant & equipment discussed
in this release.
GREIF, INC. AND SUBSIDIARY
COMPANIES SPECIAL ITEMS BY SEGMENT UNAUDITED (Dollars in
millions)
Three months ended Nine
months ended July 31 July 31 2015
2014 2015 2014 Rigid Industrial
Packaging & Services Restructuring charges $ 11.6 $ 2.7 $
20.4 $ 5.8 Acquisition-related costs 0.1 0.4 0.3 1.2 Non-cash asset
impairment charges 16.4 7.5 21.3 7.7 (Gain) loss on disposal of
properties, plants, equipment and businesses, net (7.1 ) 9.0 2.4
9.2 Impact of Venezuela devaluation on cost of products sold 9.3 -
9.3 - Impact of Venezuela devaluation on other income/expense
(4.9 ) - (4.9 ) - Total
special Items 25.4 19.6 48.8 23.9
Paper Packaging
Restructuring charges 0.5 - 1.0 - Non-cash asset impairment charges
0.3 - 0.8 - (Gain) loss on disposal of properties, plants,
equipment and businesses, net 0.1 (0.1 )
- (0.9 ) Total special Items 0.9 (0.1 ) 1.8
(0.9 )
Flexible Products & Services Restructuring
charges 4.1 1.5 5.3 4.7 Non-cash asset impairment charges 0.9 7.9
0.2 7.9 (Gain) loss on disposal of properties, plants, equipment
and businesses, net 0.3 (1.1 ) (0.5 )
(1.3 ) Total special Items 5.3 8.3 5.0 11.3
Land
Management Timberland gains - - (24.3 ) (17.1 ) Gain on
disposal of properties, plants, equipment and businesses, net
(1.4 ) (0.1 ) (2.7 ) (2.8 ) Total
special Items (1.4 ) (0.1 ) (27.0 )
(19.9 ) Total special items $ 30.2 $ 27.7 $
28.6 $ 14.4
GREIF, INC. AND
SUBSIDIARY COMPANIES GAAP TO NON-GAAP RECONCILIATION
SEGMENT OPERATING PROFIT (LOSS) BEFORE SPECIAL ITEMS
UNAUDITED (Dollars in millions)
Three months
ended Nine months ended July 31 July
31 2015 2014 2015
2014 Operating profit (loss): Rigid Industrial
Packaging & Services $ 29.5 $ 43.0 $ 75.5 $ 123.4 Paper
Packaging 21.5 27.9 76.7 84.4 Flexible Products & Services (9.7
) (12.9 ) (23.8 ) (22.4 ) Land Management 2.9
3.3 32.3 26.4 Total operating
profit (loss) 44.2 61.3 160.7
211.8
Restructuring charges: Rigid
Industrial Packaging & Services 11.6 2.7 20.4 5.8 Paper
Packaging 0.5 - 1.0 - Flexible Products & Services 4.1
1.5 5.3 4.7 Total
restructuring charges 16.2 4.2
26.7 10.5
Acquisition-related costs:
Rigid Industrial Packaging & Services 0.1
0.4 0.3 1.2 Total
acquisition-related costs 0.1 0.4
0.3 1.2
Timberland gains: Land
Management - - (24.3 )
(17.1 ) Total timberland gains - -
(24.3 ) (17.1 )
Non-cash asset impairment
charges: Rigid Industrial Packaging & Services 16.4 7.5
21.3 7.7 Paper Packaging 0.3 - 0.8 - Flexible Products &
Services 0.9 7.9 0.2
7.9 Total non-cash asset impairment charges
17.6 15.4 22.3 15.6
(Gain) loss on disposal of properties, plants, equipment
and businesses, net: Rigid Industrial Packaging & Services
(7.1 ) 9.0 2.4 9.2 Paper Packaging 0.1 (0.1 ) - (0.9 ) Flexible
Products & Services 0.3 (1.1 ) (0.5 ) (1.3 ) Land Management
(1.4 ) (0.1 ) (2.7 ) (2.8 ) Total
(gain) loss on disposal of properties, plants, equipment and
businesses, net: (8.1 ) 7.7 (0.8 )
4.2
Impact of Venezuela devaluation on cost of
products sold Rigid Industrial Packaging & Services
9.3 - 9.3 - Total
Impact of Venezuela devaluation on cost of products sold 9.3
- 9.3 -
Operating profit (loss) before special items
10: Rigid Industrial Packaging & Services 59.8
62.6 129.2 147.3 Paper Packaging 22.4 27.8 78.5 83.5 Flexible
Products & Services (4.4 ) (4.6 ) (18.8 ) (11.1 ) Land
Management 1.5 3.2 5.3
6.5 Total operating profit (loss) before special
items $ 79.3 $ 89.0 $ 194.2 $ 226.2
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 plus the impact of Venezuela
devaluation on cost of products sold.
GREIF, INC.
AND SUBSIDIARY COMPANIES GAAP TO NON-GAAP RECONCILIATION
SEGMENT EBITDA BEFORE SPECIAL ITEMS UNAUDITED (Dollars in
millions)
Three months ended
Nine months ended July 31 July 31
2015 2014 2015
2014 EBITDA
11: Rigid Industrial Packaging & Services $ 52.4
$ 69.1 $ 145.2 $ 200.5 Paper Packaging 28.7 35.2 98.6 107.0
Flexible Products & Services (7.4 ) (10.5 ) (18.1 ) (14.3 )
Land Management 3.7 4.7 34.9
29.4 Total EBITDA 77.4
98.5 260.6 322.6
Restructuring charges: Rigid Industrial Packaging &
Services 11.6 2.7 20.4 5.8 Paper Packaging 0.5 - 1.0 - Flexible
Products & Services 4.1 1.5
5.3 4.7 Total restructuring charges
16.2 4.2 26.7 10.5
Acquisition-related costs: Rigid Industrial Packaging &
Services 0.1 0.4 0.3
1.2 Total acquisition-related costs 0.1
0.4 0.3 1.2
Timberland
gains: Land Management - -
(24.3 ) (17.1 ) Total timberland gains -
- (24.3 ) (17.1 )
Non-cash asset
impairment charges: Rigid Industrial Packaging & Services
16.4 7.5 21.3 7.7 Paper Packaging 0.3 - 0.8 - Flexible Products
& Services 0.9 7.9 0.2
7.9 Total non-cash asset impairment charges
17.6 15.4 22.3
15.6
(Gain) loss on disposal of properties, plants,
equipment and businesses, net: Rigid Industrial Packaging &
Services (7.1 ) 9.0 2.4 9.2 Paper Packaging 0.1 (0.1 ) - (0.9 )
Flexible Products & Services 0.3 (1.1 ) (0.5 ) (1.3 ) Land
Management (1.4 ) (0.1 ) (2.7 ) (2.8 )
Total (gain) loss on disposal of properties, plants, equipment and
businesses, net: (8.1 ) 7.7 (0.8 )
4.2
Impact of Venezuela devaluation on cost of
products sold Rigid Industrial Packaging & Services
9.3 - 9.3 -
Total impact of Venezuela devaluation on
cost of products sold
9.3 - 9.3 -
Impact of Venezuela devaluation on other income/expense
Rigid Industrial Packaging & Services (4.9 ) -
(4.9 ) - Total impact of Venezuela
devaluation on other income/expense (4.9 ) -
(4.9 ) -
EBITDA before special items
12: Rigid Industrial Packaging & Services 77.8
88.7 194.0 224.4 Paper Packaging 29.6 35.1 100.4 106.1 Flexible
Products & Services (2.1 ) (2.2 ) (13.1 ) (3.0 ) Land
Management 2.3 4.6 7.9
9.5 Total EBITDA before special items $ 107.6
$ 126.2 $ 289.2 $ 337.0 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 plus the impact
of Venezuela devaluation on cost of products sold less the impact
of Venezuela devaluation on other income/expense.
GREIF, INC. AND SUBSIDIARY COMPANIES GAAP TO
NON-GAAP RECONCILIATION CLASS A EARNINGS PER SHARE EXCLUDING
SPECIAL ITEMS UNAUDITED (Dollars in millions, except for per
share amounts)
Three months ended July 31,
2015 Class A Net Income Attributable to
Greif, Inc. $ 8.6 $ 0.15
Less: Gain on disposal of properties,
plants, equipment and businesses, net
5.8 0.10 Less: Venezuela devaluation on other income/expense 4.9
0.08 Plus: Restructuring charges 11.3 0.19 Plus: Non-cash asset
impairment charges 16.6 0.28 Plus: Venezuela devaluation on cost of
goods sold 9.3 0.16 Net Income
Attributable to Greif, Inc. Excluding Special Items $ 35.1
$ 0.60
Three months ended
July 31, 2014 Class A Net Income
Attributable to Greif, Inc. $ 13.7 $ 0.23
Less: Gain (loss) on disposal of
properties, plants, equipment and businesses, net
(8.4 ) (0.15 ) Plus: Restructuring charges 3.3 0.06 Plus: Non-cash
asset impairment charges 7.6 0.13 Plus: Acquisition related costs
0.3 0.01 Net Income Attributable
to Greif, Inc. Excluding Special Items $ 33.3 $ 0.58
Nine months ended July 31, 2015
Class A Net Income Attributable to Greif, Inc.
$ 59.5 $ 1.02
Less: Gain on disposal of properties,
plants, equipment and businesses, net
4.5 0.08 Less: Timberland Gains 14.9 0.25 Less: Venezuela
devaluation on other income/expense 4.9 0.08 Plus: Restructuring
charges 18.4 0.31 Plus: Non-cash asset impairment charges 19.6 0.33
Plus: Acquisition related costs 0.2 - Plus: Venezuela devaluation
on cost of goods sold 9.3 0.16
Net Income Attributable to Greif, Inc. Excluding Special Items $
82.7 $ 1.41
Nine
months ended July 31, 2014 Class A Net
Income Attributable to Greif, Inc. $ 82.8 $ 1.41
Less: Gain (loss) on disposal of
properties, plants, equipment and businesses, net
(6.9 ) (0.12 ) Less: Timberland Gains 10.6 0.17 Plus: Restructuring
charges 7.8 0.13 Plus: Non-cash asset impairment charges 7.8 0.13
Plus: Acquisition related costs 0.8
0.01 Net Income Attributable to Greif, Inc. Excluding
Special Items $ 95.5 $ 1.63 * 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 Nine months ended July 31 July
31 Excluding the Excluding the Impact of
Impact of Impact of Divestitures Impact
of Divestitures 2015
Divestitures 2015 2015
Divestitures
2015 13
Net Sales: Rigid Industrial Packaging & Services $ 669.0
$ 1.1 $ 667.9 $ 1,985.3 $ 44.5 $ 1,940.8 Paper Packaging 176.7 -
176.7 496.3 - 496.3 Flexible Products and Services 79.2 - 79.2
249.3 3.2 246.1 Land Management 5.1 -
5.1 17.3 - 17.3
Consolidated $ 930.0 $ 1.1 $ 928.9 $
2,748.2 $ 47.7 $ 2,700.5
Gross
Profit: Rigid Industrial Packaging & Services $ 120.9 $
(0.3 ) $ 121.2 $ 351.2 $ 0.4 $ 350.8 Paper Packaging 35.1 - 35.1
117.0 (0.1 ) 117.1 Flexible Products and Services 8.9 - 8.9 26.8
0.4 26.4 Land Management 1.9 -
1.9 6.8 - 6.8
Consolidated $ 166.8 $ (0.3 ) $ 167.1 $ 501.8
$ 0.7 $ 501.1
Operating Profit (Loss):
Rigid Industrial Packaging & Services $ 29.5 $ 0.7 $ 28.8 $
75.5 $ (4.6 ) $ 80.1 Paper Packaging 21.5 - 21.5 76.7 (0.1 ) 76.8
Flexible Products and Services (9.7 ) (0.5 ) (9.2 ) (23.8 ) (0.4 )
(23.4 ) Land Management 2.9 -
2.9 32.3 - 32.3
Consolidated $ 44.2 $ 0.2 $ 44.0 $ 160.7
$ (5.1 ) $ 165.8
Operating profit (loss)
before special items: Rigid Industrial Packaging & Services
$ 59.8 $ (0.4 ) $ 60.2 $ 129.2 $ (3.7 ) $ 132.9 Paper Packaging
22.4 - 22.4 78.5 (0.2 ) 78.7 Flexible Products and Services (4.4 )
(0.1 ) (4.3 ) (18.8 ) - (18.8 ) Land Management 1.5
- 1.5 5.3 -
5.3 Consolidated $ 79.3 $ (0.5 ) $ 79.8
$ 194.2 $ (3.9 ) $ 198.1
Excluding
the Excluding the Impact of Impact of
Impact of Divestitures Impact of
Divestitures 2014 Divestitures
2014 2014
Divestitures 2014 Net Sales:
Rigid Industrial Packaging & Services $ 827.7 $ 47.0 $ 780.7 $
2,324.3 $ 137.9 $ 2,186.4 Paper Packaging 180.6 5.0 175.6 520.2
14.5 505.7 Flexible Products and Services 107.3 15.7 91.6 325.8
50.7 275.1 Land Management 8.4 -
8.4 20.7 - 20.7
Consolidated $ 1,124.0 $ 67.7 $ 1,056.3 $
3,191.0 $ 203.1 $ 2,987.9
Gross
Profit: Rigid Industrial Packaging & Services $ 153.8 $ 4.4
$ 149.4 $ 416.9 $ 12.0 $ 404.9 Paper Packaging 44.7 0.8 43.9 131.0
2.2 128.8 Flexible Products and Services 15.4 3.1 12.3 51.9 9.9
42.0 Land Management 3.8 - 3.8
8.3 - 8.3
Consolidated $ 217.7 $ 8.3 $ 209.4 $ 608.1
$ 24.1 $ 584.0
Operating Profit
(Loss): Rigid Industrial Packaging & Services $ 43.0 $ (7.0
) $ 50.0 $ 123.4 $ (8.3 ) $ 131.7 Paper Packaging 27.9 0.3 27.6
84.4 0.7 83.7 Flexible Products and Services (12.9 ) 1.0 (13.9 )
(22.4 ) 3.4 (25.8 ) Land Management 3.3 -
3.3 26.4 -
26.4 Consolidated $ 61.3 $ (5.7 ) $ 67.0 $
211.8 $ (4.2 ) $ 216.0
Operating profit
(loss) before special items: Rigid Industrial Packaging &
Services $ 62.6 $ (0.4 ) $ 63.0 $ 147.3 $ (2.2 ) $ 149.5 Paper
Packaging 27.8 0.3 27.5 83.5 0.7 82.8 Flexible Products and
Services (4.6 ) 1.0 (5.6 ) (11.1 ) 3.3 (14.4 ) Land Management
3.2 - 3.2 6.5
- 6.5 Consolidated $ 89.0
$ 0.9 $ 88.1 $ 226.2 $ 1.8 $ 224.4
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
See table contained herein entitled GAAP to Non-GAAP
Reconciliation Segment Operating Profit (Loss) Before Special Items
for a reconciliation of each segment’s operating profit (loss)
before special items.
GREIF, INC. AND SUBSIDIARY
COMPANIES GAAP TO NON-GAAP RECONCILIATION NET SALES
TO NET SALES EXCLUDING THE IMPACT OF DIVESTITURES AND
CURRENCY TRANSLATION UNAUDITED (Dollars in millions)
Three months ended July 31
2015 2014
Decrease inNet Sales ($)
Decrease inNet Sales (%)
Net Sales $ 930.0 $ 1,124.0 $ (194.0 ) (17.3 %) Impact of
Divestitures 1.1 $ 67.7
Net Sales excluding the
impact of divestitures $ 928.9 $ 1,056.3 Currency Translation
(99.3 ) N/A
Net Sales excluding the impact of
divestitures and currency translation $ 1,028.2 $
1,056.3 $ (28.1 ) (2.7 %)
View source
version on businesswire.com: http://www.businesswire.com/news/home/20150903005721/en/
Greif, Inc.Analyst:Robert Lentz, 614-876-2000orMedia:Scott
Griffin, 740-657-6516
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