Greif Reports Third Quarter 2020 Results
Greif, a leader in industrial packaging, reported its Q3 2020 results, revealing a net income of $20.7 million ($0.35 per diluted Class A share), significantly down from $62.7 million ($1.06 per share) a year earlier. Adjusted EBITDA fell by $44.4 million to $159.4 million, with net cash from operations decreasing to $135 million. Total debt decreased by $240.9 million, reflecting improved working capital and cost discipline. Guidance was reintroduced for FY 2020, with expectations of continued uncertainty due to COVID-19's impact on markets.
- Total debt decreased by $240.9 million to $2,637.6 million.
- Generated free cash flow essentially flat to the prior year at $106.6 million.
- Net income decreased significantly from $62.7 million to $20.7 million.
- Adjusted EBITDA decreased by $44.4 million.
- Net cash provided by operating activities decreased by $6.5 million.
DELAWARE, Ohio, Aug. 26, 2020 /PRNewswire/ -- Greif, Inc. (NYSE: GEF, GEF.B), a global leader in industrial packaging products and services, today announced third quarter 2020 results. The Company also reintroduced guidance for the fiscal year ending October 31, 2020.
Third Quarter Highlights include (all results compared to the third quarter of 2019 unless otherwise noted):
- Net income of
$20.7 million or$0.35 per diluted Class A share decreased compared to net income of$62.7 million or$1.06 per diluted Class A share. Net income, excluding the impact of adjustments(1), of$50.1 million or$0.85 per diluted Class A share decreased compared to net income, excluding the impact of adjustments, of$74.7 million or$1.26 per diluted Class A share. Adjusted EBITDA(2) decreased by$44.4 million to$159.4 million . - Net cash provided by operating activities decreased by
$6.5 million to$135.0 million . Adjusted free cash flow(3) decreased by$0.5 million to$106.6 million . - Total debt decreased by
$240.9 million to$2,637.6 million . Net debt(4) decreased by$263.6 million to$2,539 .1 million and decreased$70.8 million sequentially from the second quarter of 2020.
Pete Watson, Greif's President and Chief Executive Officer, commented:
"Our global Greif team executed well during the fiscal third quarter in the face of a challenging operating environment. Financial results were weaker as expected, dragged down by soft industrial conditions around much of our global portfolio and by a significant price/cost squeeze in our paper business. Despite these external challenges to profit, we generated free cash flow essentially flat to the prior year and paid down debt through stronger operating discipline and better working capital performance. Given our strong execution driving cost reduction and operating efficiencies, combined with increased near term visibility of the COVID-19 pandemic volume impacts to the remainder of the fiscal year, we are reintroducing financial guidance ranges."
___________ | |
(1) | Adjustments that are excluded from net income before adjustments and from earnings per diluted Class A share before |
(2) | Adjusted EBITDA is defined as net income, plus interest expense, net, plus debt extinguishment charges, plus income |
(3) | Adjusted free cash flow is defined as net cash provided by (used in) operating activities, less cash paid for purchases of |
(4) | Net debt is defined as total debt less cash and cash equivalents. |
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 | |
COVID-19 Business Continuity
Greif is considered an essential business because we safely package and protect essential goods and materials that serve the greater needs of communities around the world. As a result of that status, all of our global manufacturing facilities continue to operate and we have not experienced any significant production challenges or raw material or supply disruptions.
The health and safety of our Greif colleagues remains our first priority. To protect our colleagues, as well as our customers, suppliers and communities, we continue to follow guidelines, protocols and policies issued by the U.S. Centers for Disease Control and Prevention, the World Health Organization and local authorities in response to the global COVID-19 pandemic. In addition, we continue to utilize a variety of enhanced safety measures in response to COVID-19, including: conducting temperature screenings for personnel entering our operations; routinely cleaning high-touch surfaces; following social distancing protocols; staggering production teams where needed; prohibiting all non-critical business travel; implementing visitor protocols; and encouraging all colleagues to work from home when possible.
Customer Service
The Company's consolidated CSI(5) score was 92.8 during the fiscal third quarter 2020 and reached a record high of 92.4 on a trailing four quarter basis. Our long term objective is for each business segment to achieve a CSI score of 95.0 or greater.
CSI for the Rigid Industrial Packaging & Services segment was 94.6, which was approximately 5 percent higher compared to the prior year quarter. CSI for the Flexible Products & Services segment was 84.2, which was approximately 10 percent lower compared to the prior year quarter as a result of COVID-19 related delays to product shipments. CSI for the Paper Packaging & Services segment was 92.2, which was approximately 4 percent higher compared to the prior year quarter.
Liquidity and Balance Sheet
As of July 31, 2020, the Company had
Segment Results (all results compared to the third quarter of 2019 unless otherwise noted)
Net sales are impacted mainly by the volume of primary products(7) sold, selling prices, product mix and the impact of changes in foreign currencies against the U.S. Dollar. The table below shows the percentage impact of each of these items on net sales for our primary products for the third quarter of 2020 as compared to the prior year quarter for the business segments with manufacturing operations.
Net Sales Impact - Primary Products | Rigid Industrial Packaging & Services | Paper Packaging & Services | Flexible Products & Services | |||||
% | % | % | ||||||
Currency Translation | (2.6) | % | (0.1) | % | (1.8) | % | ||
Volume | (11.1) | % | (1.4) | % | (3.1) | % | ||
Selling Prices and Product Mix | (1.4) | % | (4.6) | % | (2.2) | % | ||
Total Impact of Primary Products | (15.1) | % | (6.1) | % | (7.1) | % | ||
Rigid Industrial Packaging & Services
Net sales decreased by
Gross profit decreased by
Operating profit decreased by
Paper Packaging & Services
Net sales decreased by
Gross profit decreased by
Operating profit decreased by
Flexible Products & Services
Net sales decreased by
Gross profit decreased by
Operating profit decreased by
Land Management
Net sales decreased by
Operating profit decreased by
Tax Summary
During the third quarter, the Company recorded an income tax rate of 22.3 percent. The Company's tax rate excluding the impact of adjustments was 22.6 percent. The application of FIN 18 frequently causes fluctuations in our quarterly effective tax rates. For fiscal 2020, the Company expects its tax rate to range between 34.0 and 37.0 percent and its tax rate excluding adjustments to range between 26.0 and 29.0 percent.
Dividend Summary
On August 25, 2020, the Board of Directors declared quarterly cash dividends of
Company Outlook
The Company expects the COVID-19 pandemic will continue to create uncertainty in its end markets. The magnitude of the impact will depend on the depth and duration of the crisis, as well as the timing of the recovery in the markets served by the Company.
(in millions, except per share amounts) | Fiscal 2020 Outlook |
Class A earnings per share before adjustments | |
Adjusted free cash flow |
Note: 2020 Class A earnings per share and tax rate guidance on a GAAP basis are 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: gains or losses on the disposal of businesses, timberland or properties, plants and equipment, net; non-cash asset impairment charges due to unanticipated changes in the business; restructuring-related activities; non-cash incremental COVID-19 costs, net; non-cash pension settlement (income) charges; or acquisition and integration costs, and the income tax effects of these items and other income tax-related events. No reconciliation of the fiscal year 2020 Class A earnings per share before adjustments guidance or tax rate excluding the impact of adjustments guidance, both non-GAAP financial measures which exclude gains and losses on the disposal of businesses, timberland and properties, plants and equipment, non-cash pension settlement (income) charges, acquisition and integration costs, incremental COVID-19 costs, net, restructuring and impairment charges, 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 the most directly comparable GAAP financial measure without unreasonable efforts. A reconciliation of 2020 adjusted free cash flow guidance to forecasted net cash provided by operating activities, the most directly comparable GAAP financial measure, is included in this release.
(5) | Customer satisfaction index (CSI) tracks a variety of internal metrics designed to enhance the customer experience in |
(6) | Available borrowing capacity is determined by the lesser of the available capacity on the Company's secured revolving credit facility or the amount which could be borrowed without causing the Company's leverage ratio to exceed 4.5. |
(7) | Primary products are manufactured steel, plastic and fibre drums; new and reconditioned intermediate bulk containers; |
Conference Call
The Company will host a conference call to discuss the third quarter of 2020 results on August 27, 2020, at 8:30 a.m. Eastern Time (ET). Participants may access the call using the following online registration link: http://www.directeventreg.com/registration/event/7477918. 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. The conference call will also be available through a live webcast, including slides, which can be accessed at http://investor.greif.com by clicking on the Events and Presentations tab and searching under the events calendar. A replay of the conference call will be available on the Company's website approximately two hours following the call.
About Greif
Greif is a global leader in industrial packaging products and services and is pursuing its vision: in industrial packaging, be the best performing customer service company in the world. The Company produces steel, plastic and fibre drums, intermediate bulk containers, reconditioned containers, flexible products, 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 40 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, 2019. 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) we may not successfully implement our business strategies, including achieving our growth objectives, (iii) our level of indebtedness could adversely affect our liquidity, limit our flexibility in responding to business opportunities, and increase our vulnerability to adverse changes in economic and industry conditions, (iv) our operations subject us to currency exchange and political risks that could adversely affect our results of operations, (v) the current and future challenging global economy and disruption and volatility of the financial and credit markets may adversely affect our business, (vi) the continuing consolidation of our customer base and suppliers may intensify pricing pressure, (vii) we operate in highly competitive industries, (viii) our business is sensitive to changes in industry demands, (ix) raw material and energy price fluctuations and shortages may adversely impact our manufacturing operations and costs, (x) changes in U.S. trade policies could impact the cost of imported goods into the U.S., which may materially impact our revenues or increase our operating costs, (xi) the results of the United Kingdom's referendum on withdrawal from the European Union may have a negative effect on global economic conditions, financial markets and our business, (xii) geopolitical conditions, including direct or indirect acts of war or terrorism, could have a material adverse effect on our operations and financial results, (xiii) we may encounter difficulties arising from acquisitions, (xiv) in connection with acquisitions or divestitures, we may become subject to liabilities, (xv) the acquisition of Caraustar Industries, Inc. and its subsidiaries subjects us to various risks and uncertainties, (xvi) we may incur additional restructuring costs and there is no guarantee that our efforts to reduce costs will be successful, (xvii) 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, (xviii) full realization of our deferred tax assets may be affected by a number of factors, (xix) several operations are conducted by joint ventures that we cannot operate solely for our benefit, (xx) certain of the agreements that govern our joint ventures provide our partners with put or call options, (xxi) our ability to attract, develop and retain talented and qualified employees, managers and executives is critical to our success, (xxii) our business may be adversely impacted by work stoppages and other labor relations matters, (xxiii) we may not successfully identify illegal immigrants in our workforce, (xxiv) 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, (xxv) we may be subject to losses that might not be covered in whole or in part by existing insurance reserves or insurance coverage, (xxvi) our business depends on the uninterrupted operations of our facilities, systems and business functions, including our information technology and other business systems, (xxvii) 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, (xxviii) legislation/regulation related to environmental and health and safety matters and corporate social responsibility could negatively impact our operations and financial performance, (xxix) product liability claims and other legal proceedings could adversely affect our operations and financial performance, (xxx) 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, (xxxi) the current COVID-19 pandemic could have a material adverse effect on our business, financial condition, results of operations and cash flows, (xxxii) changing climate, climate change regulations and greenhouse gas effects may adversely affect our operations and financial performance, (xxxiii) the frequency and volume of our timber and timberland sales will impact our financial performance, (xxxiv) changes in U.S. generally accepted accounting principles (GAAP) and SEC rules and regulations could materially impact our reported results, (xxxv) if we fail to maintain an effective system of internal control, we may not be able to accurately report financial results or prevent fraud, and (xxxvi) we have a significant amount of goodwill and long-lived assets which, if impaired in the future, would adversely impact our results of operations. 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 | |||||||||||||||
Three months ended July 31, | Nine months ended July 31, | ||||||||||||||
(in millions, except per share amounts) | 2020 | 2019 | 2020 | 2019 | |||||||||||
Net sales | $ | 1,083.0 | $ | 1,252.6 | $ | 3,353.7 | $ | 3,362.9 | |||||||
Cost of products sold | 863.3 | 973.2 | 2,670.7 | 2,662.0 | |||||||||||
Gross profit | 219.7 | 279.4 | 683.0 | 700.9 | |||||||||||
Selling, general and administrative expenses | 120.4 | 138.9 | 376.9 | 377.0 | |||||||||||
Restructuring charges | 19.1 | 9.1 | 26.8 | 20.3 | |||||||||||
Acquisition and integration related costs | 3.6 | 5.8 | 13.5 | 22.2 | |||||||||||
Non-cash asset impairment charges | 15.5 | — | 16.9 | 2.1 | |||||||||||
Gain on disposal of properties, plants and equipment, net | (0.3) | (1.3) | (2.1) | (7.1) | |||||||||||
(Gain) Loss on disposal of businesses, net | (0.5) | 1.3 | 37.9 | 3.0 | |||||||||||
Operating profit | 61.9 | 125.6 | 213.1 | 283.4 | |||||||||||
Interest expense, net | 29.8 | 34.5 | 89.8 | 80.1 | |||||||||||
Non-cash pension settlement income | — | — | (0.1) | — | |||||||||||
Debt extinguishment charges | — | 0.1 | — | 22.0 | |||||||||||
Other (income) expense, net | 1.1 | (1.1) | 3.5 | 1.0 | |||||||||||
Income before income tax expense and equity | 31.0 | 92.1 | 119.9 | 180.3 | |||||||||||
Income tax expense | 6.9 | 26.8 | 44.8 | 58.3 | |||||||||||
Equity earnings of unconsolidated affiliates, net of tax | (0.3) | (2.2) | (1.2) | (2.4) | |||||||||||
Net income | 24.4 | 67.5 | 76.3 | 124.4 | |||||||||||
Net income attributable to noncontrolling interests | (3.7) | (4.8) | (11.9) | (18.4) | |||||||||||
Net income attributable to Greif, Inc. | $ | 20.7 | $ | 62.7 | $ | 64.4 | $ | 106.0 | |||||||
Basic earnings per share attributable to Greif, Inc. | |||||||||||||||
Class A common stock | $ | 0.35 | $ | 1.06 | $ | 1.09 | $ | 1.80 | |||||||
Class B common stock | $ | 0.52 | $ | 1.59 | $ | 1.62 | $ | 2.68 | |||||||
Diluted earnings per share attributable to Greif, Inc. | |||||||||||||||
Class A common stock | $ | 0.35 | $ | 1.06 | $ | 1.09 | $ | 1.80 | |||||||
Class B common stock | $ | 0.52 | $ | 1.59 | $ | 1.62 | $ | 2.68 | |||||||
Shares used to calculate basic earnings per share | |||||||||||||||
Class A common stock | 26.4 | 26.3 | 26.4 | 26.2 | |||||||||||
Class B common stock | 22.0 | 22.0 | 22.0 | 22.0 | |||||||||||
Shares used to calculate diluted earnings per share | |||||||||||||||
Class A common stock | 26.4 | 26.3 | 26.4 | 26.2 | |||||||||||
Class B common stock | 22.0 | 22.0 | 22.0 | 22.0 | |||||||||||
GREIF, INC. AND SUBSIDIARY COMPANIES | |||||||
(in millions) | July 31, 2020 | October 31, 2019 | |||||
ASSETS | |||||||
CURRENT ASSETS | |||||||
Cash and cash equivalents | $ | 98.5 | $ | 77.3 | |||
Trade accounts receivable | 624.5 | 664.2 | |||||
Inventories | 349.6 | 358.2 | |||||
Assets held by special purpose entities | 50.9 | — | |||||
Other current assets | 182.4 | 149.3 | |||||
1,305.9 | 1,249.0 | ||||||
LONG-TERM ASSETS | |||||||
Goodwill | 1,505.3 | 1,517.8 | |||||
Intangible assets | 726.2 | 776.5 | |||||
Assets held by special purpose entities | — | 50.9 | |||||
Operating lease assets | 318.1 | — | |||||
Other long-term assets | 149.5 | 142.2 | |||||
2,699.1 | 2,487.4 | ||||||
PROPERTIES, PLANTS AND EQUIPMENT | 1,588.8 | 1,690.3 | |||||
$ | 5,593.8 | $ | 5,426.7 | ||||
LIABILITIES AND EQUITY | |||||||
CURRENT LIABILITIES | |||||||
Accounts payable | $ | 436.0 | $ | 435.2 | |||
Short-term borrowings | 2.6 | 9.2 | |||||
Current portion of long-term debt | 99.7 | 83.7 | |||||
Current portion of operating lease liabilities | 53.2 | — | |||||
Current portion of liabilities held by special purpose entities | 43.3 | — | |||||
Other current liabilities | 280.1 | 297.3 | |||||
914.9 | 825.4 | ||||||
LONG-TERM LIABILITIES | |||||||
Long-term debt | 2,535.3 | 2,659.0 | |||||
Liabilities held by special purpose entities | — | 43.3 | |||||
Operating lease liabilities | 267.5 | — | |||||
Other long-term liabilities | 666.6 | 686.6 | |||||
3,469.4 | 3,388.9 | ||||||
REDEEMABLE NONCONTROLLING INTERESTS | 18.6 | 21.3 | |||||
EQUITY | |||||||
Total Greif, Inc. equity | 1,141.3 | 1,133.1 | |||||
Noncontrolling interests | 49.6 | 58.0 | |||||
1,190.9 | 1,191.1 | ||||||
$ | 5,593.8 | $ | 5,426.7 | ||||
GREIF, INC. AND SUBSIDIARY COMPANIES | |||||||||||||||
Three months ended July 31, | Nine months ended July 31, | ||||||||||||||
(in millions) | 2020 | 2019 | 2020 | 2019 | |||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||||||
Net income | $ | 24.4 | $ | 67.5 | $ | 76.3 | $ | 124.4 | |||||||
Depreciation, depletion and amortization | 59.9 | 60.0 | 182.4 | 146.8 | |||||||||||
Asset impairments | 15.5 | — | 16.9 | 2.1 | |||||||||||
Pension settlement income | — | — | (0.1) | — | |||||||||||
Other non-cash adjustments to net income | 8.5 | 3.3 | 71.5 | 7.6 | |||||||||||
Operating working capital changes | 44.3 | (9.5) | 12.8 | (52.5) | |||||||||||
Deferred purchase price on sold receivables | — | — | — | (6.9) | |||||||||||
Increase (decrease) in cash from changes in other assets and | (17.6) | 20.2 | (105.5) | (27.4) | |||||||||||
Net cash provided by operating activities | 135.0 | 141.5 | 254.3 | 194.1 | |||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||||||||
Acquisitions of companies, net of cash acquired | — | (29.5) | — | (1,857.9) | |||||||||||
Purchases of properties, plants and equipment | (33.4) | (40.2) | (98.8) | (103.8) | |||||||||||
Purchases of and investments in timber properties | (1.2) | (1.8) | (4.0) | (4.1) | |||||||||||
Purchases of equity method investments | — | — | (3.6) | — | |||||||||||
Proceeds from the sale of properties, plants and equipment, | 6.1 | 6.7 | 90.7 | 17.7 | |||||||||||
Proceeds on insurance recoveries | 0.9 | — | 0.9 | 0.2 | |||||||||||
Net cash used in investing activities | (27.6) | (64.8) | (14.8) | (1,947.9) | |||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||||||
Proceeds from (payments on) debt, net | (73.4) | (64.4) | (135.3) | 1,876.9 | |||||||||||
Dividends paid to Greif, Inc. shareholders | (26.2) | (26.1) | (78.2) | (77.9) | |||||||||||
Payments for extinguishment and issuance of debt | — | — | — | (44.1) | |||||||||||
Other | (3.6) | (0.9) | (12.1) | (19.5) | |||||||||||
Net cash provided by (used in) financing activities | (103.2) | (91.4) | (225.6) | 1,735.4 | |||||||||||
Reclassification of cash to assets held for sale | — | — | — | — | |||||||||||
Effects of exchange rates on cash | 21.9 | 0.7 | 7.3 | — | |||||||||||
Net increase (decrease) in cash and cash equivalents | 26.1 | (14.0) | 21.2 | (18.4) | |||||||||||
Cash and cash equivalents, beginning of period | 72.4 | 89.8 | 77.3 | 94.2 | |||||||||||
Cash and cash equivalents, end of period | $ | 98.5 | $ | 75.8 | $ | 98.5 | $ | 75.8 | |||||||
GREIF, INC. AND SUBSIDIARY COMPANIES | |||||||||||||||
Three months ended July 31, | Nine months ended July 31, | ||||||||||||||
(in millions) | 2020 | 2019 | 2020 | 2019 | |||||||||||
Net sales: | |||||||||||||||
Rigid Industrial Packaging & Services | $ | 548.5 | $ | 642.1 | $ | 1,719.8 | $ | 1,871.6 | |||||||
Paper Packaging & Services | 459.3 | 530.0 | 1,414.6 | 1,244.9 | |||||||||||
Flexible Products & Services | 69.3 | 74.5 | 199.7 | 226.6 | |||||||||||
Land Management | 5.9 | 6.0 | 19.6 | 19.8 | |||||||||||
Total net sales | $ | 1,083.0 | $ | 1,252.6 | $ | 3,353.7 | $ | 3,362.9 | |||||||
Gross profit: | |||||||||||||||
Rigid Industrial Packaging & Services | $ | 114.4 | $ | 126.5 | $ | 351.5 | $ | 346.1 | |||||||
Paper Packaging & Services | 88.9 | 134.7 | 283.9 | 296.9 | |||||||||||
Flexible Products & Services | 14.3 | 16.0 | 40.5 | 50.0 | |||||||||||
Land Management | 2.1 | 2.2 | 7.1 | 7.9 | |||||||||||
Total gross profit | $ | 219.7 | $ | 279.4 | $ | 683.0 | $ | 700.9 | |||||||
Operating profit (loss): | |||||||||||||||
Rigid Industrial Packaging & Services | $ | 42.5 | $ | 54.3 | $ | 155.8 | $ | 124.6 | |||||||
Paper Packaging & Services | 13.3 | 63.1 | 40.3 | 128.6 | |||||||||||
Flexible Products & Services | 4.1 | 5.0 | 10.7 | 22.2 | |||||||||||
Land Management | 2.0 | 3.2 | 6.3 | 8.0 | |||||||||||
Total operating profit | $ | 61.9 | $ | 125.6 | $ | 213.1 | $ | 283.4 | |||||||
EBITDA(8): | |||||||||||||||
Rigid Industrial Packaging & Services | $ | 61.1 | $ | 74.3 | $ | 211.0 | $ | 180.0 | |||||||
Paper Packaging & Services | 50.9 | 103.2 | 157.4 | 212.6 | |||||||||||
Flexible Products & Services | 5.8 | 7.1 | 15.5 | 27.8 | |||||||||||
Land Management | 3.2 | 4.3 | 9.4 | 11.2 | |||||||||||
Total EBITDA | $ | 121.0 | $ | 188.9 | $ | 393.3 | $ | 431.6 | |||||||
Adjusted EBITDA(9): | |||||||||||||||
Rigid Industrial Packaging & Services | $ | 77.5 | $ | 82.8 | $ | 232.2 | $ | 200.4 | |||||||
Paper Packaging & Services | 72.0 | 111.0 | 229.0 | 239.6 | |||||||||||
Flexible Products & Services | 7.0 | 7.2 | 18.0 | 22.8 | |||||||||||
Land Management | 2.9 | 2.8 | 8.9 | 9.3 | |||||||||||
Total Adjusted EBITDA | $ | 159.4 | $ | 203.8 | $ | 488.1 | $ | 472.1 | |||||||
(8) | EBITDA is defined as net income, plus interest expense, net, plus income tax expense, plus depreciation, depletion and |
(9) | Adjusted EBITDA is defined as net income, plus interest expense, net, plus income tax expense, plus depreciation, |
GREIF, INC. AND SUBSIDIARY COMPANIES | |||||||||||||||
Three months ended July 31, | Nine months ended July 31, | ||||||||||||||
(in millions) | 2020 | 2019 | 2020 | 2019 | |||||||||||
Net income | $ | 24.4 | $ | 67.5 | $ | 76.3 | $ | 124.4 | |||||||
Plus: Interest expense, net | 29.8 | 34.5 | 89.8 | 80.1 | |||||||||||
Plus: Debt extinguishment charges | — | 0.1 | — | 22.0 | |||||||||||
Plus: Income tax expense | 6.9 | 26.8 | 44.8 | 58.3 | |||||||||||
Plus: Depreciation, depletion and amortization expense | 59.9 | 60.0 | 182.4 | 146.8 | |||||||||||
EBITDA | $ | 121.0 | $ | 188.9 | $ | 393.3 | $ | 431.6 | |||||||
Net income | $ | 24.4 | $ | 67.5 | $ | 76.3 | $ | 124.4 | |||||||
Plus: Interest expense, net | 29.8 | 34.5 | 89.8 | 80.1 | |||||||||||
Plus: Debt extinguishment charges | — | 0.1 | — | 22.0 | |||||||||||
Plus: Income tax expense | 6.9 | 26.8 | 44.8 | 58.3 | |||||||||||
Plus: Non-cash pension settlement income | — | — | (0.1) | — | |||||||||||
Plus: Other (income) expense, net | 1.1 | (1.1) | 3.5 | 1.0 | |||||||||||
Less: Equity earnings of unconsolidated affiliates, net of tax | (0.3) | (2.2) | (1.2) | (2.4) | |||||||||||
Operating profit | $ | 61.9 | $ | 125.6 | $ | 213.1 | $ | 283.4 | |||||||
Less: Other (income) expense, net | 1.1 | (1.1) | 3.5 | 1.0 | |||||||||||
Less: Non-cash pension settlement income | — | — | (0.1) | — | |||||||||||
Less: Equity earnings of unconsolidated affiliates, net of tax | (0.3) | (2.2) | (1.2) | (2.4) | |||||||||||
Plus: Depreciation, depletion and amortization expense | 59.9 | 60.0 | 182.4 | 146.8 | |||||||||||
EBITDA | $ | 121.0 | $ | 188.9 | $ | 393.3 | $ | 431.6 | |||||||
Plus: Restructuring charges | 19.1 | 9.1 | 26.8 | 20.3 | |||||||||||
Plus: Acquisition and integration related costs | 3.6 | 5.8 | 13.5 | 22.2 | |||||||||||
Plus: Non-cash asset impairment charges | 15.5 | — | 16.9 | 2.1 | |||||||||||
Plus: Non-cash pension settlement income | — | — | (0.1) | — | |||||||||||
Plus: Incremental COVID-19 costs, net (10) | 1.0 | — | 1.9 | — | |||||||||||
Less: (Gain) loss on disposal of properties, plants, | (0.8) | — | 35.8 | (4.1) | |||||||||||
Adjusted EBITDA | $ | 159.4 | $ | 203.8 | $ | 488.1 | $ | 472.1 | |||||||
(10) | Incremental COVID-19 costs, net includes costs directly attributable to COVID-19 such as costs incurred for incremental cleaning and |
GREIF, INC. AND SUBSIDIARY COMPANIES | |||||||||||||||
Three months ended July 31, | Nine months ended July 31, | ||||||||||||||
(in millions) | 2020 | 2019 | 2020 | 2019 | |||||||||||
Rigid Industrial Packaging & Services | |||||||||||||||
Operating profit | 42.5 | 54.3 | 155.8 | 124.6 | |||||||||||
Less: Other expense, net | 1.2 | 0.8 | 5.1 | 4.0 | |||||||||||
Less: Equity earnings of unconsolidated affiliates, net of tax | (0.3) | (2.2) | (1.2) | (2.4) | |||||||||||
Plus: Depreciation and amortization expense | 19.5 | 18.6 | 59.1 | 57.0 | |||||||||||
EBITDA | $ | 61.1 | $ | 74.3 | $ | 211.0 | $ | 180.0 | |||||||
Plus: Restructuring charges | 15.6 | 7.0 | 19.4 | 15.0 | |||||||||||
Plus: Acquisition and integration related costs | — | 0.1 | — | 0.4 | |||||||||||
Plus: Non-cash asset impairment charges | 2.2 | — | 3.6 | 2.1 | |||||||||||
Plus: Incremental COVID-19 costs, net | — | — | 0.3 | — | |||||||||||
Less: (Gain) loss on disposal of properties, plants, equipment, and businesses, net | (1.4) | 1.4 | (2.1) | 2.9 | |||||||||||
Adjusted EBITDA | $ | 77.5 | $ | 82.8 | $ | 232.2 | $ | 200.4 | |||||||
Paper Packaging & Services | |||||||||||||||
Operating profit (loss) | 13.3 | 63.1 | 40.3 | 128.6 | |||||||||||
Less: Other (income) expense, net | 0.2 | (1.2) | (1.2) | (2.1) | |||||||||||
Less: Non-cash pension settlement income | — | — | (0.1) | — | |||||||||||
Plus: Depreciation and amortization expense | 37.8 | 38.9 | 115.8 | 81.9 | |||||||||||
EBITDA | $ | 50.9 | $ | 103.2 | $ | 157.4 | $ | 212.6 | |||||||
Plus: Restructuring charges | 3.4 | 2.1 | 6.1 | 5.2 | |||||||||||
Plus: Acquisition and integration related costs | 3.6 | 5.7 | 13.5 | 21.8 | |||||||||||
Plus: Non-cash pension settlement income | — | — | (0.1) | — | |||||||||||
Plus: Non-cash asset impairment charges | 12.4 | — | 12.4 | — | |||||||||||
Plus: Incremental COVID-19 costs, net | 0.8 | — | 1.3 | — | |||||||||||
Less: Loss on disposal of properties, plants, | 0.9 | — | 38.4 | — | |||||||||||
Adjusted EBITDA | $ | 72.0 | $ | 111.0 | $ | 229.0 | $ | 239.6 | |||||||
Flexible Products & Services | |||||||||||||||
Operating profit | 4.1 | 5.0 | 10.7 | 22.2 | |||||||||||
Less: Other income, net | (0.3) | (0.7) | (0.4) | (0.9) | |||||||||||
Plus: Depreciation and amortization expense | 1.4 | 1.4 | 4.4 | 4.7 | |||||||||||
EBITDA | $ | 5.8 | $ | 7.1 | $ | 15.5 | $ | 27.8 | |||||||
Plus: Restructuring charges | 0.1 | — | 1.3 | — | |||||||||||
Plus: Incremental COVID-19 costs, net | 0.2 | — | 0.3 | — | |||||||||||
Plus: Non-cash asset impairment charges | 0.9 | — | 0.9 | — | |||||||||||
Less: (Gain) loss on disposal of properties, plants, equipment and businesses, net | — | 0.1 | — | (5.0) | |||||||||||
Adjusted EBITDA | $ | 7.0 | $ | 7.2 | $ | 18.0 | $ | 22.8 | |||||||
Land Management | |||||||||||||||
Operating profit | 2.0 | 3.2 | 6.3 | 8.0 | |||||||||||
Plus: Depreciation, depletion and amortization expense | 1.2 | 1.1 | 3.1 | 3.2 | |||||||||||
EBITDA | $ | 3.2 | $ | 4.3 | $ | 9.4 | $ | 11.2 | |||||||
Plus: Restructuring charges | — | — | — | 0.1 | |||||||||||
Less: Gain on disposal of properties, plants, equipment and | (0.3) | (1.5) | (0.5) | (2.0) | |||||||||||
Adjusted EBITDA | $ | 2.9 | $ | 2.8 | $ | 8.9 | $ | 9.3 | |||||||
Consolidated EBITDA | $ | 121.0 | $ | 188.9 | $ | 393.3 | $ | 431.6 | |||||||
Consolidated Adjusted EBITDA | $ | 159.4 | $ | 203.8 | $ | 488.1 | $ | 472.1 | |||||||
(11) | Adjusted EBITDA is defined as net income, plus interest expense, net, plus income tax expense, plus depreciation, depletion and |
GREIF, INC. AND SUBSIDIARY COMPANIES | ||||||||||||||
Three months ended July 31, | Nine months ended July 31, | |||||||||||||
(in millions) | 2020 | 2019 | 2020 | 2019 | ||||||||||
Net cash provided by (used in) operating activities | $ | 135.0 | $ | 141.5 | $ | 254.3 | $ | 194.1 | ||||||
Cash paid for purchases of properties, plants and equipment | (33.4) | (40.2) | (98.8) | (103.8) | ||||||||||
Free cash flow | $ | 101.6 | $ | 101.3 | $ | 155.5 | $ | 90.3 | ||||||
Cash paid for acquisition and integration related costs | 3.6 | 5.8 | 13.5 | 22.2 | ||||||||||
Cash paid for debt issuance costs | — | — | — | 5.1 | ||||||||||
Cash paid for incremental COVID-19 costs, net | 1.0 | — | 1.9 | — | ||||||||||
Cash paid for acquisition and integration related ERP systems | 0.4 | — | 1.4 | — | ||||||||||
Adjusted free cash flow | $ | 106.6 | $ | 107.1 | $ | 172.3 | $ | 117.6 | ||||||
(12) | Adjusted free cash flow is defined as net cash provided by (used in) operating activities, less cash paid for purchases of properties, plants |
GREIF, INC. AND SUBSIDIARY COMPANIES | ||||||||||||||||||||||||||
(in millions, except for per share amounts) | Income before | Income | Equity | Non- | Net Income Attributable | Diluted | Tax Rate | |||||||||||||||||||
Three months ended July 31, 2020 | $ | 31.0 | $ | 6.9 | $ | (0.3) | $ | 3.7 | $ | 20.7 | $ | 0.35 | 22.3 | % | ||||||||||||
Loss (gain) on disposal of properties, plants, | (0.8) | 0.1 | — | 0.1 | (1.0) | (0.01) | ||||||||||||||||||||
Restructuring charges | 19.1 | 4.2 | — | 0.1 | 14.8 | 0.25 | ||||||||||||||||||||
Acquisition and integration related costs | 3.6 | 0.8 | — | — | 2.8 | 0.04 | ||||||||||||||||||||
Non-cash asset impairment charges | 15.5 | 3.5 | — | — | 12.0 | 0.21 | ||||||||||||||||||||
Incremental COVID-19 costs, net | 1.0 | 0.2 | — | 0.8 | 0.01 | |||||||||||||||||||||
Excluding Adjustments | $ | 69.4 | $ | 15.7 | $ | (0.3) | $ | 3.9 | $ | 50.1 | $ | 0.85 | 22.6 | % | ||||||||||||
Three months ended July 31, 2019 | $ | 92.1 | $ | 26.8 | $ | (2.2) | $ | 4.8 | $ | 62.7 | $ | 1.06 | 29.1 | % | ||||||||||||
Loss (gain) on disposal of properties, plants, | — | (0.1) | — | 0.1 | — | — | ||||||||||||||||||||
Restructuring charges | 9.1 | 1.5 | — | — | 7.6 | 0.13 | ||||||||||||||||||||
Debt extinguishment charges | 0.1 | — | — | — | 0.1 | — | ||||||||||||||||||||
Acquisition and integration related costs | 5.8 | 1.5 | — | — | 4.3 | 0.07 | ||||||||||||||||||||
Excluding Adjustments | $ | 107.1 | $ | 29.7 | $ | (2.2) | $ | 4.9 | $ | 74.7 | $ | 1.26 | 27.7 | % | ||||||||||||
Nine months ended July 31, 2020 | $ | 119.9 | 44.8 | (1.2) | 11.9 | $ | 64.4 | $ | 1.09 | 37.4 | % | |||||||||||||||
Loss (gain) on disposal of properties, plants, | 35.8 | 0.5 | — | 0.6 | 34.7 | 0.59 | ||||||||||||||||||||
Restructuring charges | 26.8 | 6.1 | — | 0.4 | 20.3 | 0.34 | ||||||||||||||||||||
Acquisition and integration related costs | 13.5 | 3.2 | — | — | 10.3 | 0.17 | ||||||||||||||||||||
Non-cash asset impairment charges | 16.9 | 3.5 | — | — | 13.4 | 0.23 | ||||||||||||||||||||
Non-cash pension settlement income | (0.1) | — | — | — | (0.1) | — | ||||||||||||||||||||
Incremental COVID-19 costs, net | 1.9 | 0.4 | — | 1.5 | 0.02 | |||||||||||||||||||||
Excluding Adjustments | $ | 214.7 | $ | 58.5 | $ | (1.2) | $ | 12.9 | $ | 144.5 | $ | 2.44 | 27.2 | % | ||||||||||||
Nine months ended July 31, 2019 | $ | 180.3 | $ | 58.3 | $ | (2.4) | $ | 18.4 | $ | 106.0 | $ | 1.80 | 32.3 | % | ||||||||||||
Loss (gain) on disposal of properties, plants, | (4.1) | (0.6) | — | (2.5) | (1.0) | (0.02) | ||||||||||||||||||||
Restructuring charges | 20.3 | 4.5 | — | 0.1 | 15.7 | 0.27 | ||||||||||||||||||||
Debt extinguishment charges | 22.0 | 5.3 | — | — | 16.7 | 0.28 | ||||||||||||||||||||
Acquisition and integration related costs | 22.2 | 4.3 | — | — | 17.9 | 0.30 | ||||||||||||||||||||
Non-cash asset impairment charges | 2.1 | — | — | — | 2.1 | 0.04 | ||||||||||||||||||||
Tax net benefit resulting from the Tax Reform Act | — | (3.2) | — | — | 3.2 | 0.05 | ||||||||||||||||||||
Excluding Adjustments | $ | 242.8 | $ | 68.6 | $ | (2.4) | $ | 16.0 | $ | 160.6 | $ | 2.72 | 28.3 | % | ||||||||||||
The impact of income tax expense and non-controlling interest on each adjustment is calculated based on tax rates and ownership percentages specific to each applicable entity.
GREIF, INC. AND SUBSIDIARY COMPANIES | ||||||||||||||
Three months ended July 31, | ||||||||||||||
(in millions) | 2020 | 2019 | Increase Net Sales ($) | Increase Net Sales (%) | ||||||||||
Consolidated | ||||||||||||||
Net Sales | $ | 1,083.0 | $ | 1,252.6 | $ | (169.6) | (13.5) | % | ||||||
Currency Translation | 16.1 | N/A | ||||||||||||
Net Sales Excluding the Impact of Currency Translation | $ | 1,099.1 | $ | 1,252.6 | $ | (153.5) | (12.3) | % | ||||||
Rigid Industrial Packaging & Services | ||||||||||||||
Net Sales | $ | 548.5 | $ | 642.1 | $ | (93.6) | (14.6) | % | ||||||
Currency Translation | 14.5 | N/A | ||||||||||||
Net Sales Excluding the Impact of Currency Translation | $ | 563.0 | $ | 642.1 | $ | (79.1) | (12.3) | % | ||||||
Paper Packaging & Services | ||||||||||||||
Net Sales | 459.3 | 530.0 | $ | (70.7) | (13.3) | % | ||||||||
Currency Translation | 0.2 | N/A | ||||||||||||
Net Sales Excluding the Impact of Currency Translation | $ | 459.5 | $ | 530.0 | $ | (70.5) | (13.3) | % | ||||||
Flexible Products & Services | ||||||||||||||
Net Sales | $ | 69.3 | $ | 74.5 | $ | (5.2) | (7.0) | % | ||||||
Currency Translation | 1.4 | N/A | ||||||||||||
Net Sales Excluding the Impact of Currency Translation | $ | 70.7 | $ | 74.5 | $ | (3.8) | (5.1) | % | ||||||
Nine months ended July 31, | ||||||||||||||
(in millions) | 2020 | 2019 | Increase Net Sales ($) | Increase Net Sales (%) | ||||||||||
Consolidated | ||||||||||||||
Net Sales | $ | 3,353.7 | $ | 3,362.9 | $ | (9.2) | (0.3) | % | ||||||
Currency Translation | 43.9 | N/A | ||||||||||||
Net Sales Excluding the Impact of Currency Translation | $ | 3,397.6 | $ | 3,362.9 | $ | 34.7 | 1.0 | % | ||||||
Rigid Industrial Packaging & Services | ||||||||||||||
Net Sales | $ | 1,719.8 | $ | 1,871.6 | $ | (151.8) | (8.1) | % | ||||||
Currency Translation | 38.6 | N/A | ||||||||||||
Net Sales Excluding the Impact of Currency Translation | $ | 1,758.4 | $ | 1,871.6 | $ | (113.2) | (6.0) | % | ||||||
Paper Packaging & Services | ||||||||||||||
Net Sales | 1,414.6 | 1,244.9 | $ | 169.7 | 13.6 | % | ||||||||
Currency Translation | 0.4 | N/A | ||||||||||||
Net Sales Excluding the Impact of Currency Translation | $ | 1,415.0 | $ | 1,244.9 | $ | 170.1 | 13.7 | % | ||||||
Flexible Products & Services | ||||||||||||||
Net Sales | 199.7 | 226.6 | $ | (26.9) | (11.9) | % | ||||||||
Currency Translation | 4.9 | N/A | ||||||||||||
Net Sales Excluding the Impact of Currency Translation | $ | 204.6 | $ | 226.6 | $ | (22.0) | (9.7) | % | ||||||
GREIF, INC. AND SUBSIDIARY COMPANIES | |||||||||||
(in millions) | July 31, 2020 | April 30, 2020 | July 31, 2019 | ||||||||
Total Debt | $ | 2,637.6 | $ | 2,682.3 | $ | 2,878.5 | |||||
Cash and cash equivalents | (98.5) | (72.4) | (75.8) | ||||||||
Net Debt | $ | 2,539.1 | $ | 2,609.9 | $ | 2,802.7 | |||||
GREIF, INC. AND SUBSIDIARY COMPANIES | |||||||
Fiscal 2020 Guidance Range | |||||||
(in millions) | Scenario 1 | Scenario 2 | |||||
Net cash provided by operating activities | $ | 362.0 | $ | 412.0 | |||
Cash paid for purchases of properties, plants and equipment | (126.0) | (146.0) | |||||
Free cash flow | $ | 236.0 | $ | 266.0 | |||
Cash paid for acquisition and integration related costs | 15.0 | 15.0 | |||||
Cash paid for incremental COVID-19 costs, net | 3.0 | 3.0 | |||||
Cash paid for acquisition and integration related ERP systems | 6.0 | 6.0 | |||||
Adjusted free cash flow | $ | 260.0 | $ | 290.0 | |||
GREIF, INC. AND SUBSIDIARY COMPANIES | |
(in millions) | Fiscal 2020 |
Depreciation & amortization expense | |
Interest expense, net | |
Other expense, net | |
Net income attributable to noncontrolling interest | |
Tax rate excluding the impact of adjustments | |
Capital expenditures excluding cash paid for acquisition and integration related | |
Contact:
Matt Eichmann
740-549-6067
matt.eichmann@greif.com
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SOURCE Greif, Inc.
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