DELAWARE, Ohio, March 1,
2023 /PRNewswire/ -- Greif, Inc. (NYSE: GEF, GEF.B),
a global leader in industrial packaging products and services,
today announced first quarter 2023 results.
First Quarter Financial Highlights include (all
results compared to the first quarter of 2022 unless otherwise
noted):
- Net income of $89.9 million or
$1.54 per diluted Class A share
increased compared to net income of $10.3
million or $0.18 per diluted
Class A share. Net income, excluding the impact of
adjustments(1), of $61.9
million or $1.06 per diluted
Class A share decreased compared to net income, excluding the
impact of adjustments, of $75.6
million or $1.28 per diluted
Class A share.
- Adjusted EBITDA(2) of $164.5
million decreased by $32.3
million compared to Adjusted EBITDA of $196.8 million.
- Net cash provided by operating activities increased by
$10.5 million to $32.9 million. Adjusted free cash
flow(3) increased by $11.2
million to a use of $7.6
million.
- Total debt decreased by $67.5
million to $2,229.3 million.
Net debt(4) decreased by $108.8
million to $2,068.3 million.
Our leverage ratio(5) increased to 2.11x from 1.73x
sequentially, which is within our targeted leverage ratio range of
2.0x - 2.5x, but decreased from 2.39x in the prior year
quarter.
Strategic Actions and Announcements
- Completed previously announced acquisition of Lee Container
Corporation. Our Greif team, including our newly welcomed
colleagues, is progressing ahead of schedule on planned
integration, and we reaffirm our expectation to fully realize
expected synergies of at least $6.0
million.
- Announced a definitive agreement to increase Greif's current 9%
ownership interest in Centurion Container LLC, a leader in the
North American IBC reconditioning industry, to an 80% stake in an
all-cash transaction for $145.0
million, subject to customary purchase price adjustments for
cash and debt, as well as customary closing conditions, including
regulatory clearances. Greif has been a joint venture partner of
Centurion since 2020 and is expanding our ownership as part of our
ongoing commitment to grow in high margin, highly sustainable
resin-based products.
CEO Commentary
"I am very proud of our team's execution in first quarter 2023
despite multiple headwinds: destocking, lower customer demand and
continued inflationary pressures," said Ole
Rosgaard, Chief Executive Officer of Greif. "The pace and
severity of these headwinds progressed rapidly during the quarter
and pressured results in both business segments. Despite these
challenges, our teams around the world demonstrated resiliency in
rapidly adapting to these changing conditions while continuing to
deliver on our Build to Last strategy and making meaningful
progress towards our long-term strategic missions."
Build to Last Mission Progress
Customer satisfaction surveys are a key component of our mission
to deliver Legendary Customer Service. Our consolidated
CSI(6) score was 95.0 at the end of the first quarter
2023, which is Greif's aspirational target. We look forward to
building upon this achievement and continuing our focus on
delivering exceptional service to our customers.
During the quarter, Greif recognized 122 of our global
facilities for an accident-free year in 2022, with over 10 million
safe hours worked. The safety of our people is our number one
priority and the foundation of Creating Thriving Communities. We
are very proud of our global Greif team for a record year of safety
excellence.
Additionally, during the quarter we published our 2030
Sustainability Targets, highlighting our commitment to advancing a
circular economy, reducing greenhouse gas emissions, and
championing diversity, equity & inclusion initiatives.
Protecting Our Future is critical to the future success of Greif.
More information on our 2030 targets is available at our
sustainability homepage at https://www.greif.com/sustainability/
and will be a part of our 14th annual sustainability report,
publicly available in April 2023.
(1)
|
Adjustments that are
excluded from net income before adjustments and from earnings per
diluted Class A share before adjustments are restructuring charges,
acquisition and integration related costs, non-cash asset
impairment charges, (gain) loss on disposal of properties, plants,
equipment and businesses, net.
|
|
|
(2)
|
Adjusted EBITDA is
defined as net income, plus interest expense, net, plus income tax
expense, plus depreciation, depletion and amortization expense,
plus restructuring charges, plus acquisition and integration
related costs, plus non-cash asset impairment charges, plus (gain)
loss on disposal of properties, plants, equipment and businesses,
net.
|
|
|
(3)
|
Adjusted free cash flow
is defined as net cash provided by operating activities, less cash
paid for purchases of properties, plants and equipment, plus cash
paid for acquisition and integration related costs, plus cash paid
for integration related Enterprise Resource Planning (ERP) systems
and equipment.
|
|
|
(4)
|
Net debt is defined as
total debt less cash and cash equivalents.
|
|
|
(5)
|
Leverage ratio for the
periods indicated is defined as net debt divided by trailing twelve
month EBITDA, each as calculated under the terms of the Company's
Second Amended and Restated Credit Agreement dated as of March 1,
2022, filed as Exhibit 10.1 to the Company's Quarterly Report on
Form 10-Q for the fiscal quarter ended January 31, 2022 (the
"2022 Credit Agreement").
|
|
|
(6)
|
Customer satisfaction
index (CSI) tracks a variety of internal metrics designed to
enhance the customer experience in dealing with Greif.
|
Note: A reconciliation of the differences between all non-GAAP
financial measures used in this release with the most directly
comparable GAAP financial measures is included in the financial
schedules that are a part of this release. These non-GAAP financial
measures are intended to supplement and should be read together
with our financial results. They should not be considered an
alternative or substitute for, and should not be considered
superior to, our reported financial results. Accordingly, users of
this financial information should not place undue reliance on these
non-GAAP financial measures.
Segment Results (all results compared to the first quarter of
2022 unless otherwise noted)
Net sales are impacted mainly by the volume of primary
products(7) sold, selling prices, product mix and the
impact of changes in foreign currencies against the U.S. Dollar.
The table below shows the percentage impact of each of these items
on net sales for our primary products for the first quarter of 2023
as compared to the prior year quarter for the business segments
with manufacturing operations. Net sales from Lee Container's
primary products are not included in the table below, but will be
included in the Global Industrial Packaging segment starting in the
first quarter of fiscal 2024.
Net Sales Impact -
Primary Products
|
Global Industrial
Packaging
|
|
Paper Packaging &
Services
|
Currency
Translation
|
(3.2) %
|
|
(0.1) %
|
Volume
|
(13.8) %
|
|
(17.0) %
|
Selling Prices and
Product Mix
|
(3.7) %
|
|
10.6 %
|
Total Impact of
Primary Products
|
(20.7) %
|
|
(6.5) %
|
Global Industrial Packaging
Net sales decreased by $243.3
million to $705.8 million
primarily due to approximately $89.4 million of prior year net sales
attributable to the Flexible Products & Services business,
negative foreign currency translation impacts, and lower volumes
and selling prices.
Gross profit decreased by $51.8
million to $125.3 million. The
decrease in gross profit was primarily due to the same factors that
impacted net sales, partially offset by lower raw material,
transportation, labor, utility and maintenance costs.
Operating profit increased by $14.9
million to $45.9 million
primarily due to the $62.4 million non-cash impairment charge
during the first quarter of 2022 for the Flexible Products &
Services business divestiture, partially offset by the same factors
that impacted gross profit. Adjusted EBITDA decreased by
$42.4 million to $71.8 million primarily due to the same factors
that impacted gross profit, partially offset by lower SG&A
expenses.
Paper Packaging & Services
Net sales decreased by $49.8
million to $560.2 million
primarily due to lower volumes, partially offset by higher
published containerboard and boxboard prices.
Gross profit increased by $13.4
million to $124.2 million. The
increase in gross profit was primarily due to higher published
containerboard and boxboard prices and lower raw material,
transportation, and labor costs, partially offset by lower volumes
and higher manufacturing costs.
Operating profit increased by $70.8
million to $109.1 million
primarily due to the same factors that impacted gross profit and
the $54.6 million gain from the
divestiture of the Tama, Iowa mill
in the Paper Packaging & Services segment during the first
quarter of 2023. Adjusted EBITDA increased by $10.2 million to $90.7
million primarily due to the same factors that impacted
gross profit.
Tax Summary
During the first quarter, we recorded an income tax rate of 28.9
percent and a tax rate excluding the impact of adjustments of 24.9
percent. Note that the application of FIN 18 frequently causes
fluctuations in our quarterly effective tax rates. For fiscal 2023,
we expect our tax rate and our tax rate excluding adjustments to be
towards the high-end of our 23.0 to 27.0 percent range.
Dividend Summary
On February 28, 2023, the Board of
Directors declared quarterly cash dividends of $0.50 per share of Class A Common Stock and
$0.75 per share of Class B Common
Stock. Dividends are payable on April 1,
2023, to stockholders of record at the close of business on
March 17, 2023.
(7)
|
Primary products are
manufactured steel, plastic and fibre drums; new and reconditioned
intermediate bulk containers; linerboard, containerboard,
corrugated sheets and corrugated containers; and boxboard and tube
and core products.
|
Company Outlook
Given the significant deterioration of product demand in the
past two quarters and the degree of uncertainty in the forward
looking macro-economic environment, we are unable to determine the
trajectory of product demand for the remainder of our fiscal
year. As a result, we are providing only a low-end guidance
estimate that is based on the continuation of demand trends
reflected in the recent two quarters and February, modified by
normal lifts related to agricultural, construction, and other
seasonal end markets. In addition, we have factored in the impact
of potential negative price trends in our paper business that could
result from extended negative demand trends. Lastly, the low-end
guidance estimate does not factor in any contribution from the
recently announced potential Centurion transaction or other
near-term actionable opportunities in our M&A pipeline, which,
if closed and depending on timing, could add an additional
$20 million to $40 million of Adjusted EBITDA to fiscal
2023.
(in millions, except
per share amounts)
|
Fiscal 2023
Low-End
Guidance Estimate
Reported at Q1
|
Adjusted
EBITDA
|
$740
|
Adjusted free cash
flow
|
$370
|
Note: Fiscal 2023 net income, the most directly comparable GAAP
financial measure to Adjusted EBITDA is not provided in this
release due to the potential for one or more of the following, the
timing and magnitude of which we are unable to reliably forecast:
restructuring-related activities; acquisition and integration
related costs; non-cash pension settlement charges; non-cash asset
impairment charges due to unanticipated changes in the business;
gains or losses on the disposal of businesses or properties, plants
and equipment, net. No reconciliation of the 2023 low-end guidance
estimate of Adjusted EBITDA, a non-GAAP financial measure which
excludes restructuring charges, acquisition and integration costs,
non-cash asset impairment charges, non-cash pension settlement
charges, and (gain) loss on the disposal of properties, plants,
equipment and businesses, net, is included in this release because,
due to the high variability and difficulty in making accurate
forecasts and projections of some of the excluded information,
together with some of the excluded information not being
ascertainable or accessible, we are unable to quantify certain
amounts that would be required to be included in net income, the
most directly comparable GAAP financial measure, without
unreasonable efforts. A reconciliation of the 2023 low-end guidance
estimate of adjusted free cash flow to fiscal 2023 forecasted net
cash provided by operating activities, the most directly comparable
GAAP financial measure, is included in this release.
Conference Call
The Company will host a conference call to discuss first quarter
2023 results on March 2, 2023, at
8:30 a.m. Eastern Time (ET).
Participants may access the call using the following online
registration link:
https://register.vevent.com/register/BIc53b9201ca324e28ad2e22c45b0142bc.
Registrants will receive a confirmation email containing dial in
details and a unique conference call code for entry. Phone lines
will open at 8:00 a.m. ET on
March 2, 2023. A digital replay of
the conference call will be available two hours following the call
on the Company's web site at http://investor.greif.com.
Investor Relations contact information
Matt Leahy, Vice President,
Corporate Development & Investor Relations, 740-549-6158.
Matthew.Leahy@Greif.com
About Greif
Greif is a global leader in industrial packaging products and
services and is pursuing its vision: to be the best performing
customer service company in the world. The Company produces steel,
plastic and fibre drums, intermediate bulk containers,
reconditioned containers, jerrycans and other small plastics,
containerboard, uncoated recycled paperboard, coated recycled
paperboard, tubes and cores and a diverse mix of specialty
products. The Company also manufactures packaging accessories and
provides filling, packaging and other services for a wide range of
industries. In addition, Greif manages timber properties in the
southeastern United States. The
Company is strategically positioned in over 35 countries to serve
global as well as regional customers. Additional information is on
the Company's website at www.greif.com.
Forward-Looking Statements
This release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
The words "may," "will," "expect," "intend," "estimate,"
"anticipate," "aspiration," "objective," "project," "believe,"
"continue," "on track" or "target" or the negative thereof and
similar expressions, among others, identify forward-looking
statements. All forward-looking statements are based on
assumptions, expectations and other information currently available
to management. Such forward-looking statements are subject to
certain risks and uncertainties that could cause the Company's
actual results to differ materially from those forecasted,
projected or anticipated, whether expressed or implied. The
most significant of these risks and uncertainties are described in
Part I of the Company's Annual Report on Form 10-K for the fiscal
year ended October 31, 2022. The Company undertakes no
obligation to update or revise any forward-looking statements.
Although the Company believes that the expectations reflected in
forward-looking statements have a reasonable basis, the Company can
give no assurance that these expectations will prove to be correct.
Forward-looking statements are subject to risks and uncertainties
that could cause the Company's actual results to differ materially
from those forecasted, projected or anticipated, whether expressed
in or implied by the statements. Such risks and uncertainties that
might cause a difference include, but are not limited to, the
following: (i) historically, our business has been sensitive to
changes in general economic or business conditions, (ii) our global
operations subject us to political risks, instability and currency
exchange that could adversely affect our results of operations,
(iii) the current and future challenging global economy and
disruption and volatility of the financial and credit markets may
adversely affect our business, (iv) the COVID-19 pandemic could
continue to impact any combination of our business, financial
condition, results of operations and cash flows, (v) the continuing
consolidation of our customer base and suppliers may intensify
pricing pressure, (vi) we operate in highly competitive industries,
(vii) our business is sensitive to changes in industry demands and
customer preferences, (viii) raw material, price fluctuations,
global supply chain disruptions and increased inflation may
adversely impact our results of operations, (ix) energy and
transportation price fluctuations and shortages may adversely
impact our manufacturing operations and costs, (x) we may not
successfully implement our business strategies, including achieving
our growth objectives, (xi) we may encounter difficulties or
liabilities arising from acquisitions or divestitures, (xii) we may
incur additional rationalization costs and there is no guarantee
that our efforts to reduce costs will be successful, (xiii) several
operations are conducted by joint ventures that we cannot operate
solely for our benefit, (xiv) certain of the agreements that govern
our joint ventures provide our partners with put or call options,
(xv) our ability to attract, develop and retain talented and
qualified employees, managers and executives is critical to our
success, (xvi) our business may be adversely impacted by work
stoppages and other labor relations matters, (xvii) we may be
subject to losses that might not be covered in whole or in part by
existing insurance reserves or insurance coverage and general
insurance premium and deductible increases, (xviii) our business
depends on the uninterrupted operations of our facilities, systems
and business functions, including our information technology and
other business systems, (xix) a security breach of customer,
employee, supplier or Company information and data privacy risks
and costs of compliance with new regulations may have a material
adverse effect on our business, financial condition, results of
operations and cash flows, (xx) we could be subject to changes to
our tax rates, the adoption of new U.S. or foreign tax legislation
or exposure to additional tax liabilities, (xxi) full realization
of our deferred tax assets may be affected by a number of factors,
(xxii) we have a significant amount of goodwill and long-lived
assets which, if impaired in the future, would adversely impact our
results of operations, (xxiii) our pension and postretirement plans
are underfunded and will require future cash contributions and our
required future cash contributions could be higher than we expect,
each of which could have a material adverse effect on our financial
condition and liquidity, (xxiv) changing climate, global climate
change regulations and greenhouse gas effects may adversely affect
our operations and financial performance, (xxv) we may be unable to
achieve our greenhouse gas emission reduction targets by 2030,
(xxvi) legislation/regulation related to environmental and health
and safety matters and corporate social responsibility could
negatively impact our operations and financial performance, (xxvii)
product liability claims and other legal proceedings could
adversely affect our operations and financial performance, (xxviii)
we may incur fines or penalties, damage to our reputation or other
adverse consequences if our employees, agents or business partners
violate, or are alleged to have violated, anti-bribery, competition
or other laws.
The risks described above are not all-inclusive, and given these
and other possible risks and uncertainties, investors should not
place undue reliance on forward-looking statements as a prediction
of actual results. For a detailed discussion of the most
significant risks and uncertainties that could cause our actual
results to differ materially from those forecasted, projected or
anticipated, see "Risk Factors" in Part I, Item 1A of our most
recently filed Form 10-K and our other filings with the Securities
and Exchange Commission.
All forward-looking statements made in this news release are
expressly qualified in their entirety by reference to such risk
factors. Except to the limited extent required by applicable law,
we undertake no obligation to update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise.
GREIF, INC. AND
SUBSIDIARY COMPANIES CONDENSED CONSOLIDATED STATEMENTS OF
INCOME UNAUDITED
|
|
|
Three months ended
January 31,
|
(in millions, except
per share amounts)
|
2023
|
|
2022
|
Net sales
|
$
1,271.0
|
|
$
1,564.3
|
Cost of products
sold
|
1,019.4
|
|
1,274.6
|
Gross
profit
|
251.6
|
|
289.7
|
Selling, general and
administrative expenses
|
139.4
|
|
151.6
|
Restructuring
charges
|
2.4
|
|
3.5
|
Acquisition and
integration related costs
|
7.5
|
|
1.6
|
Non-cash asset
impairment charges
|
0.5
|
|
62.4
|
(Gain) loss on disposal
of properties, plants and equipment, net
|
—
|
|
(1.4)
|
(Gain) loss on disposal
of businesses, net
|
(54.6)
|
|
—
|
Operating
profit
|
156.4
|
|
72.0
|
Interest expense,
net
|
22.8
|
|
17.1
|
Other (income) expense,
net
|
3.3
|
|
2.0
|
Income before income
tax expense and equity earnings of unconsolidated affiliates,
net
|
130.3
|
|
52.9
|
Income tax
expense
|
37.7
|
|
35.6
|
Equity earnings of
unconsolidated affiliates, net of tax
|
(0.5)
|
|
(1.3)
|
Net income
|
93.1
|
|
18.6
|
Net income attributable
to noncontrolling interests
|
(3.2)
|
|
(8.3)
|
Net income
attributable to Greif, Inc.
|
$
89.9
|
|
$
10.3
|
Basic earnings per
share attributable to Greif, Inc. common
shareholders:
|
|
|
|
Class A common
stock
|
$
1.55
|
|
$
0.17
|
Class B common
stock
|
$
2.31
|
|
$
0.25
|
Diluted earnings per
share attributable to Greif, Inc. common
shareholders:
|
|
|
|
Class A common
stock
|
$
1.54
|
|
$
0.18
|
Class B common
stock
|
$
2.31
|
|
$
0.25
|
Shares used to
calculate basic earnings per share attributable to Greif, Inc.
common
shareholders:
|
|
|
|
Class A common
stock
|
25.7
|
|
26.6
|
Class B common
stock
|
21.7
|
|
22.0
|
Shares used to
calculate diluted earnings per share attributable to Greif, Inc.
common
shareholders:
|
|
|
|
Class A common
stock
|
25.8
|
|
26.8
|
Class B common
stock
|
21.7
|
|
22.0
|
GREIF, INC. AND
SUBSIDIARY COMPANIES CONDENSED CONSOLIDATED
BALANCE SHEETS UNAUDITED
|
|
(in
millions)
|
January 31,
2023
|
|
October 31,
2022
|
ASSETS
|
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
$
161.0
|
|
$
147.1
|
Trade accounts
receivable
|
674.2
|
|
749.1
|
Inventories
|
441.1
|
|
403.3
|
Other current
assets
|
195.2
|
|
199.9
|
|
1,471.5
|
|
1,499.4
|
Long-term
assets
|
|
|
|
Goodwill
|
1,540.8
|
|
1,464.5
|
Intangible
assets
|
695.9
|
|
576.2
|
Operating lease
assets
|
240.9
|
|
254.7
|
Other long-term
assets
|
233.1
|
|
220.1
|
|
2,710.7
|
|
2,515.5
|
Properties, plants
and equipment
|
1,508.4
|
|
1,455.0
|
|
$
5,690.6
|
|
$
5,469.9
|
LIABILITIES AND
EQUITY
|
|
|
|
Current
liabilities
|
|
|
|
Accounts
payable
|
$
464.0
|
|
$
561.3
|
Short-term
borrowings
|
4.6
|
|
5.7
|
Current portion of
long-term debt
|
80.8
|
|
71.1
|
Current portion of
operating lease liabilities
|
47.4
|
|
48.9
|
Other current
liabilities
|
283.7
|
|
360.9
|
|
880.5
|
|
1,047.9
|
Long-term
liabilities
|
|
|
|
Long-term
debt
|
2,143.9
|
|
1,839.3
|
Operating lease
liabilities
|
196.9
|
|
209.4
|
Other long-term
liabilities
|
571.8
|
|
563.2
|
|
2,912.6
|
|
2,611.9
|
|
|
|
|
Redeemable
noncontrolling interests
|
15.3
|
|
15.8
|
Equity
|
|
|
|
Total Greif, Inc.
equity
|
1,845.4
|
|
1,761.3
|
Noncontrolling
interests
|
36.8
|
|
33.0
|
Total
equity
|
1,882.2
|
|
1,794.3
|
|
$
5,690.6
|
|
$
5,469.9
|
GREIF, INC. AND
SUBSIDIARY COMPANIES CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS UNAUDITED
|
|
|
Three months ended
January 31,
|
(in
millions)
|
2023
|
|
2022
|
CASH FLOWS FROM
OPERATING ACTIVITIES:
|
|
|
|
Net income
|
$
93.1
|
|
$
18.6
|
Depreciation, depletion
and amortization
|
55.1
|
|
59.4
|
Asset
impairments
|
0.5
|
|
62.4
|
Other non-cash
adjustments to net income
|
(40.4)
|
|
19.2
|
Operating working
capital changes
|
6.3
|
|
(58.1)
|
Decrease in cash from
changes in other assets and liabilities,
|
(81.7)
|
|
(79.1)
|
Net cash (used)
provided by operating activities
|
32.9
|
|
22.4
|
CASH FLOWS FROM
INVESTING ACTIVITIES:
|
|
|
|
Acquisitions of
companies, net of cash acquired
|
(301.9)
|
|
—
|
Purchases of
properties, plants and equipment
|
(49.3)
|
|
(44.5)
|
Proceeds from the sale
of properties, plant and equipment and businesses, net of
impacts
from the purchase of acquisitions:
|
106.1
|
|
8.2
|
Payments for deferred
purchase price of acquisitions
|
(21.7)
|
|
(4.7)
|
Other
|
(2.3)
|
|
(4.8)
|
Net cash (used)
provided by investing activities
|
(269.1)
|
|
(45.8)
|
CASH FLOWS FROM
FINANCING ACTIVITIES:
|
|
|
|
Proceeds on long-term
debt, net
|
303.2
|
|
84.0
|
Dividends paid to
Greif, Inc. shareholders
|
(28.9)
|
|
(27.2)
|
Payments for share
repurchases
|
(17.8)
|
|
—
|
Tax withholding
payments for stock-based awards
|
(12.4)
|
|
—
|
Other
|
(4.6)
|
|
(2.8)
|
Net cash (used)
provided by financing activities
|
239.5
|
|
54.0
|
Effects of exchange
rates on cash
|
10.6
|
|
(18.6)
|
Net increase (decrease)
in cash and cash equivalents
|
13.9
|
|
12.0
|
Cash and cash
equivalents, beginning of period
|
147.1
|
|
124.6
|
Cash and cash
equivalents, end of period
|
$
161.0
|
|
$
136.6
|
GREIF, INC. AND
SUBSIDIARY COMPANIES FINANCIAL HIGHLIGHTS
BY SEGMENT UNAUDITED
|
|
|
Three months ended
January 31,
|
(in
millions)
|
2023
|
|
2022
|
Net
sales:
|
|
|
|
Global Industrial
Packaging
|
$
705.8
|
|
$
949.1
|
Paper
Packaging & Services
|
560.2
|
|
610.0
|
Land
Management
|
5.0
|
|
5.2
|
Total net
sales
|
$
1,271.0
|
|
$
1,564.3
|
Gross
profit:
|
|
|
|
Global Industrial
Packaging
|
$
125.3
|
|
$
177.1
|
Paper
Packaging & Services
|
124.2
|
|
110.8
|
Land
Management
|
2.1
|
|
1.8
|
Total gross
profit
|
$
251.6
|
|
$
289.7
|
Operating
profit:
|
|
|
|
Global Industrial
Packaging
|
$
45.9
|
|
$
31.0
|
Paper
Packaging & Services
|
109.1
|
|
38.3
|
Land
Management
|
1.4
|
|
2.7
|
Total operating
profit
|
$
156.4
|
|
$
72.0
|
EBITDA(8):
|
|
|
|
Global Industrial
Packaging
|
$
64.2
|
|
$
51.0
|
Paper
Packaging & Services
|
142.5
|
|
76.2
|
Land
Management
|
2.0
|
|
3.5
|
Total
EBITDA
|
$
208.7
|
|
$
130.7
|
Adjusted
EBITDA(9):
|
|
|
|
Global Industrial
Packaging
|
$
71.8
|
|
$
114.2
|
Paper
Packaging & Services
|
90.7
|
|
80.5
|
Land
Management
|
2.0
|
|
2.1
|
Total adjusted
EBITDA
|
$
164.5
|
|
$
196.8
|
|
(8) EBITDA
is defined as net income, plus interest expense, net, plus income
tax expense, plus depreciation, depletion and amortization.
However, because the Company does not calculate net income by
segment, this table calculates EBITDA by segment with reference to
operating profit by segment, which, as demonstrated in the table of
Consolidated EBITDA, is another method to achieve the same result.
See the reconciliations in the table of Segment EBITDA.
|
(9) Adjusted
EBITDA is defined as net income, plus interest expense, net, plus
income tax expense, plus depreciation, depletion and amortization
expense, plus restructuring charges, plus acquisition and
integration related costs, plus non-cash asset impairment charges,
plus (gain) loss on disposal of properties, plants, equipment and
businesses, net.
|
GREIF, INC. AND
SUBSIDIARY COMPANIES GAAP TO
NON-GAAP RECONCILIATION CONSOLIDATED ADJUSTED EBITDA UNAUDITED
|
|
|
Three months ended
January 31,
|
(in
millions)
|
2023
|
|
2022
|
Net income
|
$
93.1
|
|
$
18.6
|
Plus: Interest
expense, net
|
22.8
|
|
17.1
|
Plus: Income tax
expense
|
37.7
|
|
35.6
|
Plus: Depreciation,
depletion and amortization expense
|
55.1
|
|
59.4
|
EBITDA
|
$
208.7
|
|
$
130.7
|
Net income
|
$
93.1
|
|
$
18.6
|
Plus: Interest
expense, net
|
22.8
|
|
17.1
|
Plus: Income tax
expense
|
37.7
|
|
35.6
|
Plus: Other expense
(income), net
|
3.3
|
|
2.0
|
Plus: Equity earnings
of unconsolidated affiliates, net of tax
|
(0.5)
|
|
(1.3)
|
Operating
profit
|
$
156.4
|
|
$
72.0
|
Less: Other expense
(income), net
|
3.3
|
|
2.0
|
Less: Equity earnings
of unconsolidated affiliates, net of tax
|
(0.5)
|
|
(1.3)
|
Plus: Depreciation,
depletion and amortization expense
|
55.1
|
|
59.4
|
EBITDA
|
$
208.7
|
|
$
130.7
|
Plus: Restructuring
charges
|
2.4
|
|
3.5
|
Plus: Acquisition and
integration related costs
|
7.5
|
|
1.6
|
Plus: Non-cash asset
impairment charges
|
0.5
|
|
62.4
|
Plus: (Gain) loss on
disposal of properties, plants, equipment, and businesses,
net
|
(54.6)
|
|
(1.4)
|
Adjusted
EBITDA
|
$
164.5
|
|
$
196.8
|
GREIF, INC. AND
SUBSIDIARY COMPANIES GAAP TO NON-GAAP
RECONCILIATION SEGMENT ADJUSTED
EBITDA(10) UNAUDITED
|
|
|
Three months ended
January 31,
|
(in
millions)
|
2023
|
|
2022
|
Global Industrial
Packaging
|
|
|
|
Operating
profit
|
45.9
|
|
31.0
|
Less: Other (income)
expense, net
|
3.6
|
|
1.9
|
Less: Equity earnings
of unconsolidated affiliates, net of tax
|
(0.5)
|
|
(1.3)
|
Plus: Depreciation and
amortization expense
|
21.4
|
|
20.6
|
EBITDA
|
$
64.2
|
|
$
51.0
|
Plus: Restructuring
charges
|
2.1
|
|
2.1
|
Plus: Acquisition and
integration related costs
|
5.0
|
|
—
|
Plus: Non-cash asset
impairment charges
|
0.5
|
|
62.4
|
Plus: (Gain) loss on
disposal of properties, plants, equipment and businesses,
net
|
—
|
|
(1.3)
|
Adjusted
EBITDA
|
$
71.8
|
|
$
114.2
|
Paper
Packaging & Services
|
|
|
|
Operating
profit
|
109.1
|
|
38.3
|
Less: Other (income)
expense, net
|
(0.3)
|
|
0.1
|
Plus: Depreciation and
amortization expense
|
33.1
|
|
38.0
|
EBITDA
|
$
142.5
|
|
$
76.2
|
Plus: Restructuring
charges
|
0.3
|
|
1.4
|
Plus: Acquisition and
integration related costs
|
2.5
|
|
1.6
|
Plus: (Gain) loss on
disposal of properties, plants, equipment and businesses,
net
|
(54.6)
|
|
1.3
|
Adjusted
EBITDA
|
$
90.7
|
|
$
80.5
|
Land
Management
|
|
|
|
Operating
profit
|
1.4
|
|
2.7
|
Plus: Depreciation and
depletion expense
|
0.6
|
|
0.8
|
EBITDA
|
$
2.0
|
|
$
3.5
|
Plus: (Gain) loss on
disposal of properties, plants, equipment and businesses,
net
|
—
|
|
(1.4)
|
Adjusted
EBITDA
|
$
2.0
|
|
$
2.1
|
Consolidated
EBITDA
|
$
208.7
|
|
$
130.7
|
Consolidated adjusted
EBITDA
|
$
164.5
|
|
$
196.8
|
|
(10)
Adjusted EBITDA is defined as net income, plus interest expense,
net, plus income tax expense, plus depreciation, depletion and
amortization expense, plus restructuring charges, plus acquisition
and integration related costs, plus non-cash asset impairment
charges, plus (gain) loss on disposal of properties, plants,
equipment and businesses, net. However, because the Company does
not calculate net income by segment, this table calculates adjusted
EBITDA by segment with reference to operating profit by segment,
which, as demonstrated in the table of consolidated adjusted
EBITDA, is another method to achieve the same result.
|
GREIF, INC. AND
SUBSIDIARY COMPANIES GAAP TO NON-GAAP
RECONCILIATION ADJUSTED FREE CASH
FLOW(11) UNAUDITED
|
|
|
Three months ended
January 31,
|
(in
millions)
|
2023
|
|
2022
|
Net cash provided by
operating activities
|
$
32.9
|
|
$
22.4
|
Cash paid for
purchases of properties, plants and equipment
|
(49.3)
|
|
(44.5)
|
Free cash
flow
|
$
(16.4)
|
|
$
(22.1)
|
Cash paid for
acquisition and integration related costs
|
7.5
|
|
1.6
|
Cash paid for
integration related ERP systems and
equipment(12)
|
1.3
|
|
1.7
|
Adjusted free cash
flow
|
$
(7.6)
|
|
$
(18.8)
|
|
(11)
Adjusted free cash flow is defined as net cash provided by
operating activities, less cash paid for purchases of properties,
plants and equipment, plus cash paid for acquisition and
integration related costs, plus cash paid for integration related
ERP systems and equipment.
|
(12) Cash
paid for integration related ERP systems and equipment is defined
as cash paid for ERP systems and equipment required to bring the
acquired facilities to Greif's standards.
|
GREIF, INC. AND
SUBSIDIARY COMPANIES GAAP TO NON-GAAP
RECONCILIATION NET INCOME, CLASS A EARNINGS PER SHARE AND
TAX RATE BEFORE ADJUSTMENTS UNAUDITED
|
|
(in millions, except
for per share amounts)
|
Income before
Income Tax
(Benefit) Expense
and Equity
Earnings of
Unconsolidated
Affiliates, net
|
|
Income
Tax
(Benefit)
Expense
|
|
Equity
Earnings
|
|
Non-
Controlling
Interest
|
|
Net
Income
(Loss)
Attributable
to Greif, Inc.
|
|
Diluted Class
A Earnings
Per Share
|
|
Tax
Rate
|
Three months ended
January 31, 2023
|
$
130.3
|
|
$ 37.7
|
|
$
(0.5)
|
|
$
3.2
|
|
$ 89.9
|
|
$
1.54
|
|
28.9 %
|
Restructuring
charges
|
2.4
|
|
0.6
|
|
—
|
|
0.1
|
|
1.7
|
|
0.03
|
|
|
Acquisition and
integration related costs
|
7.5
|
|
1.8
|
|
—
|
|
—
|
|
5.7
|
|
0.09
|
|
|
Non-cash asset
impairment charges
|
0.5
|
|
0.1
|
|
—
|
|
—
|
|
0.4
|
|
0.01
|
|
|
(Gain) loss on
disposal of properties, plants, equipment and businesses,
net
|
(54.6)
|
|
(18.8)
|
|
—
|
|
—
|
|
(35.8)
|
|
(0.61)
|
|
|
Excluding
adjustments
|
$
86.1
|
|
$ 21.4
|
|
$
(0.5)
|
|
$
3.3
|
|
$ 61.9
|
|
$
1.06
|
|
24.9 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
January 31, 2022
|
$
52.9
|
|
$ 35.6
|
|
$
(1.3)
|
|
$
8.3
|
|
$ 10.3
|
|
$
0.18
|
|
67.3 %
|
Restructuring
charges
|
3.5
|
|
0.8
|
|
—
|
|
—
|
|
2.7
|
|
0.05
|
|
|
Acquisition and
integration related costs
|
1.6
|
|
0.4
|
|
—
|
|
—
|
|
1.2
|
|
0.02
|
|
|
Non-cash asset
impairment charges
|
62.4
|
|
—
|
|
—
|
|
—
|
|
62.4
|
|
1.05
|
|
|
(Gain) loss on
disposal of properties, plants, equipment and businesses,
net
|
(1.4)
|
|
(0.3)
|
|
—
|
|
(0.1)
|
|
(1.0)
|
|
(0.02)
|
|
|
Excluding
adjustments
|
$
119.0
|
|
$ 36.5
|
|
$
(1.3)
|
|
$
8.2
|
|
$ 75.6
|
|
$
1.28
|
|
30.7 %
|
|
The impact of income
tax expense and non-controlling interest on each adjustment is
calculated based on tax rates and ownership percentages specific to
each applicable entity.
|
GREIF, INC. AND
SUBSIDIARY COMPANIES GAAP TO NON-GAAP
RECONCILIATION NET DEBT UNAUDITED
|
|
(in
millions)
|
January 31,
2023
|
|
October 31,
2022
|
|
January 31,
2022
|
Total debt
|
$
2,229.3
|
|
$
1,916.1
|
|
$
2,296.8
|
Cash and cash
equivalents
|
(161.0)
|
|
(147.1)
|
|
(119.7)
|
Net
debt
|
$
2,068.3
|
|
$
1,769.0
|
|
$
2,177.1
|
GREIF, INC. AND
SUBSIDIARY COMPANIES GAAP TO NON-GAAP
RECONCILIATION LEVERAGE RATIO UNAUDITED
|
|
Trailing twelve
month credit agreement EBITDA
(in
millions)
|
Trailing Twelve
Months Ended
1/31/2023
|
Trailing Twelve
Months Ended
10/31/2022
|
Trailing Twelve
Months Ended
1/31/2022
|
Net income
|
$
468.5
|
$
394.0
|
$
400.9
|
Plus: Interest expense,
net
|
66.9
|
61.2
|
84.6
|
Plus: Debt
extinguishment charges
|
25.4
|
25.4
|
—
|
Plus: Income tax
expense
|
139.2
|
137.1
|
99.1
|
Plus: Depreciation,
depletion and amortization expense
|
212.3
|
216.6
|
234.5
|
EBITDA
|
$
912.3
|
$
834.3
|
$
819.1
|
Plus: Restructuring
charges
|
11.9
|
13.0
|
23.5
|
Plus: Acquisition and
integration related costs
|
14.6
|
8.7
|
8.7
|
Plus: Non-cash asset
impairment charges
|
9.1
|
71.0
|
70.0
|
Plus: Incremental
COVID-19 costs, net
|
—
|
—
|
2.7
|
Plus: (Gain) loss on
disposal of properties, plants, equipment,
and businesses, net
|
(62.7)
|
(9.5)
|
(6.4)
|
Plus: Timberland gains,
net
|
—
|
—
|
(95.7)
|
Adjusted
EBITDA
|
$
885.3
|
$
917.5
|
$
822.5
|
Credit agreement
adjustments to EBITDA(13)
|
21.7
|
(17.7)
|
33.1
|
Credit agreement
EBITDA
|
$
907.0
|
$
899.8
|
$
855.6
|
|
|
|
|
Adjusted net
debt
(in
millions)
|
For the Period
Ended
1/31/2023
|
For the Period
Ended
10/31/2022
|
For the Period
Ended
1/31/2022
|
Total debt
|
$
2,229.3
|
$
1,916.1
|
$
2,296.8
|
Cash and cash
equivalents
|
(161.0)
|
(147.1)
|
(119.7)
|
Net debt
|
$
2,068.3
|
$
1,769.0
|
$
2,177.1
|
Credit agreement
adjustments to debt(14)
|
(150.5)
|
(214.2)
|
(130.7)
|
Adjusted net
debt
|
$
1,917.8
|
$
1,554.8
|
$
2,046.4
|
|
|
|
|
Leverage
ratio
|
2.11x
|
1.73x
|
2.39x
|
|
(13)
Adjustments to EBITDA are specified by the 2022 Credit Agreement
and include certain timberland gains, equity earnings of
unconsolidated affiliates, net of tax, certain acquisition savings,
deferred financing costs, capitalized interest, income and expense
in connection with asset dispositions, and other items.
|
(14)
Adjustments to net debt are specified by the 2022 Credit Agreement
and include the European accounts receivable program, letters of
credit, and balances for swap contracts.
|
GREIF, INC. AND
SUBSIDIARY COMPANIES 2023 LOW-END GUIDANCE
ESTIMATE RECONCILIATION ADJUSTED FREE
CASH FLOW UNAUDITED
|
|
|
Fiscal 2023
Low-End
Guidance Estimate
|
(in
millions)
|
|
Net cash provided by
operating activities
|
$
523.3
|
Cash paid for
purchases of properties, plants and equipment
|
(204.0)
|
Free cash
flow
|
$
319.3
|
Cash paid for
acquisition and integration related costs
|
20.0
|
Cash paid for
integration related ERP systems and equipment
|
9.0
|
Cash paid for taxes
related to Tama, Iowa mill divestment
|
21.7
|
Adjusted free cash
flow
|
$
370.0
|
View original content to download
multimedia:https://www.prnewswire.com/news-releases/greif-reports-first-quarter-2023-results-301760102.html
SOURCE Greif, Inc.