DELAWARE, Ohio, June 4 /PRNewswire-FirstCall/ -- -- Net sales
increased 13 percent (7 percent excluding the impact of foreign
currency translation) to $918.0 million in the second quarter of
2008 from $815.0 million in the second quarter of 2007. -- Net
income before special items, as defined below, was $54.3 million
($0.92 per diluted Class A share) in the second quarter of 2008
compared to $39.2 million ($0.66 per diluted Class A share) in the
second quarter of 2007. GAAP net income was $48.7 million ($0.82
per diluted Class A share) and $18.6 million ($0.32 per diluted
Class A share) in the second quarter of 2008 and 2007,
respectively. Greif, Inc. (NYSE:GEFNYSE:GEF.B), a global leader in
industrial packaging, today announced results for its second fiscal
quarter, which ended April 30, 2008. Michael J. Gasser, chairman
and chief executive officer, said, "We are pleased with the strong
growth in net sales and profitability during the second quarter of
2008 compared to the same period last year, despite higher raw
material, transportation and energy costs. We achieved solid
organic sales growth, especially in Europe and the emerging markets
for Industrial Packaging, and benefited from higher containerboard
selling prices in Paper Packaging relative to the same quarter last
year. Our results continue to demonstrate the value of geographic
diversity and positive contributions from the Greif Business
System." Special Items and GAAP to Non-GAAP Reconciliation Special
items are as follows: (i) for the second quarter of 2008,
restructuring charges of $7.3 million ($5.7 million net of tax) and
timberland disposals, net of $0.1 million ($0.1 million net of
tax); and (ii) for the second quarter of 2007, restructuring
charges of $4.0 million ($3.0 million net of tax), a debt
extinguishment charge of $23.5 million ($17.3 million net of tax)
and timberland disposals, net of negative $0.4 million (negative
$0.3 million net of tax). 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.
Consolidated Results Net sales increased 13 percent (7 percent
excluding the impact of foreign currency translation) to $918.0
million in the second quarter of 2008 compared to $815.0 million in
the second quarter of 2007. The $103.0 million increase is due to
Industrial Packaging ($90.0 million), Paper Packaging ($10.4
million) and Timber ($2.6 million). Higher sales volumes for
industrial packaging products and higher containerboard selling
prices primarily drove the 7 percent constant-currency increase.
Operating profit before special items was $88.7 million for the
second quarter of 2008 compared to $68.3 million for the second
quarter of 2007. The $20.4 million increase was principally due to
higher operating profit in Industrial Packaging ($8.8 million),
Paper Packaging ($4.6 million) and Timber ($7.0 million). GAAP
operating profit was $81.5 million and $63.9 million in the second
quarter of 2008 and 2007, respectively. Net income before special
items increased 39 percent to $54.3 million for the second quarter
of 2008 compared to $39.2 million for the second quarter of 2007.
Diluted earnings per share before special items were $0.92 compared
to $0.66 per Class A share and $1.40 compared to $1.01 per Class B
share for the second quarter of 2008 and 2007, respectively. The
Company had GAAP net income of $48.7 million, or $0.82 per diluted
Class A share and $1.25 per diluted Class B share, in the second
quarter of 2008 compared to GAAP net income of $18.6 million, or
$0.32 per diluted Class A share and $0.48 per diluted Class B
share, in the second quarter of 2007. Business Group Results
Industrial Packaging net sales were up 14 percent to $748.0 million
in the second quarter of 2008 from $658.0 million in the second
quarter of 2007 -- an increase of 7 percent excluding the impact of
foreign currency translation. Higher sales volumes in most regions,
with particular strength in Europe and the emerging markets,
continued to drive the segment's organic growth. Operating profit
before special items increased to $64.2 million in the second
quarter of 2008 from $55.4 million in the second quarter of 2007.
The increase was primarily due to improvement in net sales volumes
and contributions from the execution of the Greif Business System,
which were partially offset by the higher cost of raw materials
(especially steel), energy and transportation. GAAP operating
profit was $57.8 million in the second quarter of 2008 compared to
$53.8 million in the second quarter of 2007. Paper Packaging net
sales were $163.4 million in the second quarter of 2008 compared to
$153.0 million in the second quarter of 2007. This was principally
due to higher containerboard selling prices implemented in the
fourth quarter of 2007. Operating profit before special items
increased to $14.1 million in the second quarter of 2008 compared
to $9.5 million in the second quarter of 2007. The increase was
primarily due to higher selling prices and contributions from the
execution of the Greif Business System, which were partially offset
by the higher cost of raw materials (especially old corrugated
containers), energy and transportation. GAAP operating profit was
$13.2 million and $7.1 million in the second quarter of 2008 and
2007, respectively. Timber net sales were $6.6 million and $4.0
million in the second quarter of 2008 and 2007, respectively.
Operating profit before special items was $10.4 million in the
second quarter of 2008 compared to $3.4 million in the second
quarter of 2007. Included in these amounts were profits from the
sale of special use properties (surplus, higher and better use, and
development properties) of $9.5 million in the second quarter of
2008 and $2.0 million in the second quarter of 2007. GAAP operating
profit was $10.4 million and $3.0 million in the second quarter of
2008 and 2007, respectively. Other Cash Flow Information Capital
expenditures were $40.0 million, excluding timberland purchases of
$0.8 million, for the second quarter of 2008 compared with capital
expenditures of $39.9 million for the second quarter of 2007. There
were no timberland purchases for the second quarter of 2007. Fiscal
2008 capital expenditures are expected to be approximately $125
million, excluding timberland purchases, which includes increased
capital commitment to support the Company's growth strategy in the
emerging markets. On June 2, 2008, the Board of Directors declared
quarterly cash dividends of $0.38 per share of Class A Common Stock
and $0.57 per share of Class B Common Stock. These dividends,
payable on July 1, 2008 to stockholders of record at close of
business on June 19, 2008, are approximately 36 percent above the
amount paid for the same period a year ago. Company Outlook
Business trends remain favorable in Industrial Packaging,
particularly outside of North America; stable to improving in Paper
Packaging; and Timber assets continue to be monetized as planned.
These factors, coupled with benefits from the Greif Business
System, are expected to contribute to a strong performance in the
second half of 2008. The Company is raising its 2008 guidance to
$4.25 to $4.45 per Class A share, which includes the $0.35 per
Class A share impact of the first quarter net gain related to the
divestiture of businesses. Conference Call The Company will host a
conference call to discuss the second quarter of 2008 results on
June 5, 2008, at 10 a.m. Eastern Time (ET). To participate,
domestic callers should call 800-240-2134 and ask for the Greif
conference call. The number for international callers is +1
303-262-2139. 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 http://www.greif.com/ . 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, corrugated and multiwall
containers, packaging accessories and containerboard, and provides
blending 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 45 countries to serve
global as well as regional customers. Additional information is on
the Company's website at http://www.greif.com/ . Forward-Looking
Statements All statements other than statements of historical facts
included in this news release, including, without limitation,
statements regarding the Company's future financial position,
business strategy, budgets, projected costs, goals and plans and
objectives of management for future operations, are forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. Forward-looking statements generally can be
identified by the use of forward-looking terminology such as "may,"
"will," "expect," "intend," "estimate," "anticipate," "project,"
"believe," "continue" or "target" or the negative thereof or
variations thereon or similar terminology. All forward-looking
statements made in this news release are based on information
currently available to management. 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 actual
events or results to differ materially from those expressed in or
implied by the statements. Such risks and uncertainties that might
cause a difference include, but are not limited to: general
economic and business conditions, including a prolonged or
substantial economic downturn; changing trends and demands in the
industries in which the Company competes, including industry
over-capacity; industry competition; the continuing consolidation
of the Company's customer base for its industrial packaging,
containerboard and corrugated products; political instability in
those foreign countries where the Company manufactures and sells
its products; foreign currency fluctuations and devaluations;
availability and costs of raw materials for the manufacture of the
Company's products, particularly steel, resin and old corrugated
containers; price fluctuations in energy costs; costs associated
with litigation or claims against the Company pertaining to
environmental, safety and health, product liability and other
matters; work stoppages and other labor relations matters; property
loss resulting from wars, acts of terrorism or natural disasters;
the Company's ability to integrate its newly acquired operations
effectively with its existing business; the Company's ability to
achieve improved operating efficiencies and capabilities; the
Company's ability to effectively embed and realize improvements
from the Greif Business System; the frequency and volume of sales
of the Company's timber, timberland and special use timberland; and
the deviation of actual results from the estimates and/or
assumptions used by the Company in the application of its
significant accounting policies. These and other risks and
uncertainties that could materially affect the Company's
consolidated financial results are further discussed in its filings
with the Securities and Exchange Commission, including its Form
10-K for the year ended Oct. 31, 2007. The Company assumes no
obligation to update any forward-looking statements. GREIF, INC.
AND SUBSIDIARY COMPANIES CONSOLIDATED STATEMENTS OF INCOME
UNAUDITED (Dollars and shares in millions, except per share
amounts) Three months ended Six months ended April 30, April 30,
2008 2007 2008 2007 Net sales $918.0 $815.0 $1,764.3 $1,565.8 Cost
of products sold 758.8 672.5 1,456.8 $1,293.2 Gross profit 159.2
142.5 307.5 272.6 Selling, general and administrative expenses 83.4
77.7 163.9 152.3 Restructuring charges 7.3 4.0 17.8 6.1 Asset
disposals, net 13.0 3.1 49.9 8.3 Operating profit 81.5 63.9 175.7
122.5 Interest expense, net 13.3 10.0 25.1 22.1 Debt extinguishment
charge -- 23.5 -- 23.5 Other income (expense), net (3.8) (4.4)
(7.1) (5.0) Income before income tax expense and equity earnings
and minority interests 64.4 26.0 143.5 71.9 Income tax expense 14.7
7.3 33.5 18.8 Equity earnings and minority interests (1.0) (0.1)
(0.7) (0.5) Net income $48.7 $18.6 $109.3 $52.6 Basic earnings per
share: Class A Common Stock $0.84 $0.32 $1.88 $0.91 Class B Common
Stock $1.25 $0.48 $2.81 $1.36 Diluted earnings per share: Class A
Common Stock $0.82 $0.32 $1.85 $0.89 Class B Common Stock $1.25
$0.48 $2.81 $1.36 Earnings per share were calculated using the
following number of shares: Basic earnings per share: Class A
Common Stock 23.9 23.6 23.9 23.5 Class B Common Stock 22.9 23.0
22.9 23.0 Diluted earnings per share: Class A Common Stock 24.4
24.3 24.4 24.2 Class B Common Stock 22.9 23.0 22.9 23.0 GREIF, INC.
AND SUBSIDIARY COMPANIES GAAP TO NON-GAAP RECONCILIATION
CONSOLIDATED STATEMENTS OF INCOME UNAUDITED (Dollars in millions,
except per share amounts) Three months ended Three months ended
April 30, 2008 April 30, 2007 Diluted per Diluted per share amounts
share amounts Class A Class B Class A Class B GAAP -- operating
profit $81.5 $63.9 Restructuring charges 7.3 4.0 Timberland
disposals, net (0.1) 0.4 Non-GAAP -- operating profit before
restructuring charges and timberland disposals, net $88.7 $68.3
GAAP -- net income $48.7 $0.82 $1.25 $18.6 $0.32 $0.48
Restructuring charges, net of tax 5.7 0.10 0.15 3.0 0.05 0.07 Debt
extinguishment charge, net of tax -- -- -- 17.3 0.29 0.45
Timberland disposals, net of tax (0.1) -- -- 0.3 -- 0.01 Non-GAAP
-- net income before restructuring charges, debt extinguishment
charge and timberland disposals, net $54.3 $0.92 $1.40 $39.2 $0.66
$1.01 Six months ended Six months ended April 30, 2008 April 30,
2007 Diluted per Diluted per share amounts share amounts Class A
Class B Class A Class B GAAP -- operating profit $175.7 $122.5
Restructuring charges 17.8 6.1 Timberland disposals, net (0.2) 0.3
Non-GAAP -- operating profit before restructuring charges and
timberland disposals, net $193.3 $128.9 GAAP -- net income $109.3
$1.85 $2.81 $52.6 $0.89 $1.36 Restructuring charges, net of tax
13.7 0.23 0.35 4.5 0.08 0.11 Debt extinguishment charge, net of tax
-- -- -- 17.3 0.29 0.45 Timberland disposals, net of tax (0.1) --
-- 0.2 -- 0.01 Non-GAAP -- net income before restructuring charges,
debt extinguishment charge and timberland disposals, net $122.9
$2.08 $3.16 $74.6 $1.26 $1.93 GREIF, INC. AND SUBSIDIARY COMPANIES
SEGMENT DATA UNAUDITED (Dollars in millions) Three months ended Six
months ended April 30, April 30, 2008 2007 2008 2007 Net sales
Industrial Packaging $748.0 $658.0 $1,419.3 $1,250.2 Paper
Packaging 163.4 153.0 332.2 307.3 Timber 6.6 4.0 12.8 8.3 Total
$918.0 $815.0 $1,764.3 $1,565.8 Operating profit Operating profit
before restructuring charges and timberland disposals, net:
Industrial Packaging $64.2 $55.4 $142.2 $92.3 Paper Packaging 14.1
9.5 34.5 26.7 Timber 10.4 3.4 16.6 9.9 Operating profit before
restructuring charges and timberland disposals, net 88.7 68.3 193.3
128.9 Restructuring charges: Industrial Packaging 6.3 1.6 15.8 2.9
Paper Packaging 0.9 2.4 1.9 3.2 Timber 0.1 -- 0.1 -- Restructuring
charges 7.3 4.0 17.8 6.1 Timberland disposals, net: Timber 0.1
(0.4) 0.2 (0.3) Total $81.5 $63.9 $175.7 $122.5 Depreciation,
depletion and amortization expense Industrial Packaging $18.3 $18.7
$36.0 $36.5 Paper Packaging 7.3 7.1 13.1 14.2 Timber 1.2 1.3 3.5
2.6 Total $26.8 $27.1 $52.6 $53.3 Note: Certain prior year amounts
have been reclassified to conform to the 2008 presentation. GREIF,
INC. AND SUBSIDIARY COMPANIES GEOGRAPHIC DATA UNAUDITED (Dollars in
millions) Three months ended Six months ended April 30, April 30,
2008 2007 2008 2007 Net sales North America $475.8 $442.7 $925.9
$872.5 Europe 310.7 261.5 577.9 473.6 Other 131.5 110.8 260.5 219.7
Total $918.0 $815.0 $1,764.3 $1,565.8 Operating profit Operating
profit before restructuring charges and timberland disposals, net:
North America $44.8 $32.1 $80.7 $67.2 Europe 33.8 25.6 57.5 40.8
Other 10.1 10.6 55.1 20.9 Operating profit before restructuring
charges and timberland disposals, net 88.7 68.3 193.3 128.9
Restructuring charges 7.3 4.0 17.8 6.1 Timberland disposals, net
0.1 (0.4) 0.2 (0.3) Total $81.5 $63.9 $175.7 $122.5 GREIF, INC. AND
SUBSIDIARY COMPANIES GAAP TO NON-GAAP RECONCILIATION SEGMENT AND
GEOGRAPHIC DATA UNAUDITED (Dollars in millions) Three months ended
Six months ended April 30, April 30, 2008 2007 2008 2007 Industrial
Packaging GAAP -- operating profit $57.9 $53.8 $126.4 $89.4
Restructuring charges 6.3 1.6 15.8 2.9 Non-GAAP -- operating profit
before restructuring charges $64.2 $55.4 $142.2 $92.3 Paper
Packaging GAAP -- operating profit $13.2 $7.1 $32.6 $23.5
Restructuring charges 0.9 2.4 1.9 3.2 Non-GAAP -- operating profit
before restructuring charges $14.1 $9.5 $34.5 $26.7 Timber GAAP --
operating profit $10.4 $3.0 $16.7 $9.6 Restructuring charges 0.1 --
0.1 -- Timberland disposals, net (0.1) 0.4 (0.2) 0.3 Non-GAAP --
operating profit before restructuring charges and timberland
disposals, net $10.4 $3.4 $16.6 $9.9 GREIF, INC. AND SUBSIDIARY
COMPANIES CONDENSED CONSOLIDATED BALANCE SHEETS UNAUDITED (Dollars
in millions) April 30, 2008 October 31, 2007 ASSETS CURRENT ASSETS
Cash and cash equivalents $97.0 $123.7 Trade accounts receivable
399.6 347.9 Inventories 288.0 243.0 Other current assets 146.1
127.2 930.7 841.8 LONG-TERM ASSETS Goodwill and intangible assets
643.7 589.5 Other long-term assets 111.8 146.9 755.5 736.4
PROPERTIES, PLANTS AND EQUIPMENT 1,104.7 1,074.5 $2,790.9 $2,652.7
LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Accounts
payable $379.0 $411.1 Short-term borrowings 47.7 15.8 Other current
liabilities 220.4 222.0 647.1 648.9 LONG-TERM LIABILITIES Long-term
debt 722.5 622.7 Other long-term liabilities 395.1 374.8 1,117.6
997.5 MINORITY INTEREST 6.4 6.4 SHAREHOLDERS' EQUITY 1,019.8 999.9
$2,790.9 $2,652.7 DATASOURCE: Greif, Inc. CONTACT: Analysts: Robert
Lentz, +1-614-876-2000, or Media: Deb Strohmaier, +1-740-549-6074,
cell: +1-614-208-3496, both of Greif, Inc. Web site:
http://www.greif.com/
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