- Net sales increased 18 percent (12 percent excluding the impact
of foreign currency translation) to a record $1,034.1 million in
the third quarter of 2008 from $874.2 million in the third quarter
of 2007. DELAWARE, Ohio, Aug. 27 /PRNewswire-FirstCall/ -- Greif,
Inc. (NYSE:GEFNYSE: GEF.B), a global leader in industrial
packaging, today announced results for its third fiscal quarter,
which ended July 31, 2008. Michael J. Gasser, chairman and chief
executive officer, said, "We continued to experience strong sales
and earnings growth in the third quarter. These results also
benefited from our business system and geographic diversity, which
mitigated the impact of sharp increases in raw material and other
input costs." Special Items and GAAP to Non-GAAP Reconciliation
Special items are as follows: (i) for the third quarter of 2008,
restructuring charges of $6.6 million ($5.0 million net of tax) and
timberland disposals, net of $0.2 million ($0.1 million net of
tax); and (ii) for the third quarter of 2007, restructuring charges
of $6.1 million ($4.5 million net of tax) and timberland disposals,
net of $0.1 million ($0.1 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 18 percent
(12 percent excluding the impact of foreign currency translation)
to $1,034.1 million in the third quarter of 2008 compared to $874.2
million in the third quarter of 2007. The $159.9 million increase
was due to Industrial Packaging ($147.1 million), Paper Packaging
($12.3 million) and Timber ($0.5 million). Strong organic sales
growth for industrial packaging products and higher selling prices,
in response to higher raw material costs, primarily drove the 12
percent constant-currency increase. Operating profit before special
items was $107.7 million for the third quarter of 2008 compared to
$85.9 million for the third quarter of 2007. The $21.8 million
increase was principally due to higher operating profit in
Industrial Packaging ($25.1 million), partially offset by lower
operating profit in Paper Packaging ($2.5 million) and Timber ($0.8
million). GAAP operating profit was $101.3 million and $79.9
million in the third quarter of 2008 and 2007, respectively. Net
income before special items increased 31 percent to $69.5 million
for the third quarter of 2008 compared to $53.2 million for the
third quarter of 2007. Diluted earnings per share before special
items were $1.18 compared to $0.90 per Class A share and $1.79
compared to $1.37 per Class B share for the third quarter of 2008
and 2007, respectively. The Company had GAAP net income of $64.6
million, or $1.10 per diluted Class A share and $1.67 per diluted
Class B share, in the third quarter of 2008 compared to GAAP net
income of $48.8 million, or $0.82 per diluted Class A share and
$1.26 per diluted Class B share, in the third quarter of 2007.
Business Group Results Industrial Packaging net sales were up 21
percent to $852.4 million in the third quarter of 2008 from $705.3
million in the third quarter of 2007 -- an increase of 14 percent
excluding the impact of foreign currency translation. Higher sales
volumes across all regions, with particular strength in the
emerging markets, continued to drive the segment's organic growth.
Operating profit before special items increased to $92.9 million in
the third quarter of 2008 from $67.8 million in the third quarter
of 2007. This increase was primarily due to improvement in sales
volumes and contributions from the Greif Business System, which
were partially offset by generally higher input costs. GAAP
operating profit was $88.1 million in the third quarter of 2008
compared to $63.1 million in the third quarter of 2007. Paper
Packaging net sales were $177.6 million in the third quarter of
2008 compared to $165.3 million in the third quarter of 2007. This
was principally due to higher selling prices, including
containerboard increases, implemented in the fourth quarter of
2007. Operating profit before special items decreased to $12.8
million in the third quarter of 2008 compared to $15.3 million in
the third quarter of 2007. This decrease was primarily due to
higher input costs, including energy ($3.1 million) and
transportation ($2.5 million), partially offset by higher selling
prices from the containerboard increase implemented in the fourth
quarter of 2007. GAAP operating profit was $11.0 million and $13.9
million in the third quarter of 2008 and 2007, respectively. Timber
net sales were $4.1 million and $3.6 million in the third quarter
of 2008 and 2007, respectively. Operating profit before special
items was $2.0 million in the third quarter of 2008 compared to
$2.8 million in the third 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
$0.9 million in the third quarter of 2008 and $0.8 million in the
third quarter of 2007. GAAP operating profit was $2.2 million and
$2.9 million in the third quarter of 2008 and 2007, respectively.
Other Cash Flow Information Capital expenditures were $37.7
million, excluding timberland purchases of $0.2 million, for the
third quarter of 2008. Fiscal 2008 capital expenditures are
expected to be approximately $135 million, excluding timberland
purchases, which includes an increased capital commitment to
support the Company's growth strategy in emerging markets. On Aug.
26, 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 Oct. 1, 2008 to
stockholders of record at close of business on Sept. 17, 2008, are
approximately 36 percent above the amount paid for the same period
a year ago. Company Outlook The Company is raising its 2008
guidance to $4.45 to $4.55 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. This increase is
primarily driven by improved profitability for industrial packaging
products than previously anticipated in the 2008 guidance and
partial realization of a $55 per ton containerboard price increase
in the fourth quarter of this year. Conference Call The Company
will host a conference call to discuss the third quarter of 2008
results on Aug. 28, 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 Nine months ended July 31, July 31,
2008 2007 2008 2007 Net sales $1,034.1 $874.2 $2,798.4 $2,440.0
Cost of products sold 841.2 711.9 2,298.0 2,005.1 Gross profit
192.9 162.3 500.4 434.9 Selling, general and administrative
expenses 88.1 77.3 252.0 229.6 Restructuring charges 6.6 6.1 24.4
12.1 Asset disposals, net 3.1 1.0 53.0 9.3 Operating profit 101.3
79.9 277.0 202.5 Interest expense, net 13.1 12.4 38.2 34.5 Debt
extinguishment charge -- -- -- 23.5 Other income (expense), net
(2.1) (0.7) (9.2) (5.8) Income before income tax expense and equity
earnings and minority interests 86.1 66.8 229.6 138.7 Income tax
expense 20.1 17.5 53.5 36.3 Equity earnings and minority interests
(1.4) (0.5) (2.2) (1.0) Net income $64.6 $48.8 $173.9 $101.4 Basic
earnings per share: Class A Common Stock $1.11 $0.84 $2.99 $1.75
Class B Common Stock $1.67 $1.26 $4.48 $2.62 Diluted earnings per
share: Class A Common Stock $1.10 $0.82 $2.95 $1.72 Class B Common
Stock $1.67 $1.26 $4.48 $2.62 Earnings per share were calculated
using the following number of shares: Basic earnings per share:
Class A Common Stock 24.0 23.6 23.9 23.6 Class B Common Stock 22.7
23.0 22.9 23.0 Diluted earnings per share: Class A Common Stock
24.5 24.3 24.4 24.2 Class B Common Stock 22.7 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
July 31, 2008 July 31, 2007 Diluted per Diluted per share amounts
share amounts Class A Class B Class A Class B GAAP - operating
profit $101.3 $79.9 Restructuring charges 6.6 6.1 Timberland
disposals, net (0.2) (0.1) Non-GAAP - operating profit before
restructuring charges and timberland disposals, net $107.7 $85.9
GAAP - net income $64.6 $1.10 $1.67 $48.8 $0.82 $1.26 Restructuring
charges, net of tax 5.0 0.08 0.12 4.5 0.08 0.11 Timberland
disposals, net of tax (0.1) -- -- (0.1) -- -- Non-GAAP - net income
before restructuring charges and timberland disposals, net $69.5
$1.18 $1.79 $53.2 $0.90 $1.37 Nine months ended Nine months ended
July 31, 2008 July 31, 2007 Diluted per Diluted per share amounts
share amounts Class A Class B Class A Class B GAAP - operating
profit $277.0 $202.4 Restructuring charges 24.4 12.1 Timberland
disposals, net (0.3) 0.3 Non-GAAP - operating profit before
restructuring charges and timberland disposals, net $301.1 $214.8
GAAP - net income $173.9 $2.95 $4.48 $101.4 $1.72 $2.62
Restructuring charges, net of tax 18.7 0.31 0.49 9.0 0.15 0.22 Debt
extinguishment charge, net of tax -- -- -- 17.3 0.29 0.45
Timberland disposals, net of tax (0.3) -- (0.01) 0.2 -- 0.01
Non-GAAP - net income before restructuring charges, debt
extinguishment charge and timberland disposals, net $192.3 $3.26
$4.96 $127.9 $2.16 $3.30 GREIF, INC. AND SUBSIDIARY COMPANIES
SEGMENT DATA UNAUDITED (Dollars in millions) Three months ended
Nine months ended July 31, July 31, 2008 2007 2008 2007 Net sales
Industrial Packaging $852.4 $705.3 $2,271.7 $1,955.6 Paper
Packaging 177.6 165.3 509.8 472.6 Timber 4.1 3.6 16.9 11.8 Total
$1,034.1 $874.2 $2,798.4 $2,440.0 Operating profit Operating profit
before restructuring charges and timberland disposals, net:
Industrial Packaging $92.9 $67.8 $235.3 $160.2 Paper Packaging 12.8
15.3 47.3 42.0 Timber 2.0 2.8 18.5 12.7 Operating profit before
restructuring charges and timberland disposals, net 107.7 85.9
301.1 214.9 Restructuring charges: Industrial Packaging 4.8 4.7
21.0 7.6 Paper Packaging 1.8 1.4 3.3 4.5 Timber -- -- 0.1 --
Restructuring charges 6.6 6.1 24.4 12.1 Timberland disposals, net:
Timber 0.2 0.1 0.3 (0.3) Total $101.3 $79.9 $277.0 $202.5
Depreciation, depletion and amortization expense Industrial
Packaging $18.4 $15.2 $54.5 $51.7 Paper Packaging 7.1 6.9 20.2 21.1
Timber 0.8 0.9 4.3 3.5 Total $26.3 $23.0 $79.0 $76.3 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 Nine months
ended July 31, July 31, 2008 2007 2008 2007 Net sales North America
$530.3 $467.8 $1,456.1 $1,340.3 Europe 346.8 290.9 924.8 764.4
Other 157.0 115.5 417.5 335.3 Total $1,034.1 $874.2 $2,798.4
$2,440.0 Operating profit Operating profit before restructuring
charges and timberland disposals, net: North America $47.4 $41.7
$128.2 $108.9 Europe 43.8 33.1 101.2 73.9 Other 16.5 11.1 71.7 32.1
Operating profit before restructuring charges and timberland
disposals, net 107.7 85.9 301.1 214.9 Restructuring charges 6.6 6.1
24.4 12.1 Timberland disposals, net 0.2 0.1 0.3 (0.3) Total $101.3
$79.9 $277.0 $202.4 GREIF, INC. AND SUBSIDIARY COMPANIES GAAP TO
NON-GAAP RECONCILIATION SEGMENT AND GEOGRAPHIC DATA UNAUDITED
(Dollars in millions) Three months ended Nine months ended July 31,
July 31, 2008 2007 2008 2007 Industrial Packaging GAAP - operating
profit $88.1 $63.1 $214.3 $152.6 Restructuring charges 4.8 4.7 21.0
7.6 Non-GAAP - operating profit before restructuring charges $92.9
$67.8 $235.3 $160.2 Paper Packaging GAAP - operating profit $11.0
$13.9 $44.0 $37.5 Restructuring charges 1.8 1.4 3.3 4.5 Non-GAAP -
operating profit before restructuring charges $12.8 $15.3 $47.3
$42.0 Timber GAAP - operating profit $2.2 $ 2.9 $18.7 $12.4
Restructuring charges -- -- 0.1 -- Timberland disposals, net (0.2)
(0.1) (0.3) 0.3 Non-GAAP - operating profit before restructuring
charges and timberland disposals, net $2.0 $ 2.8 $18.5 $12.7 GREIF,
INC. AND SUBSIDIARY COMPANIES CONDENSED CONSOLIDATED BALANCE SHEETS
UNAUDITED (Dollars in millions) July 31, 2008 October 31, 2007
ASSETS CURRENT ASSETS Cash and cash equivalents $99.3 $123.7 Trade
accounts receivable 477.6 347.9 Inventories 341.2 243.0 Other
current assets 162.1 127.2 1,080.2 841.8 LONG-TERM ASSETS Goodwill
and intangible assets 665.6 589.5 Other long-term assets 116.9
146.9 782.5 736.4 PROPERTIES, PLANTS AND EQUIPMENT 1,114.2 1,074.5
$2,976.9 $2,652.7 LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT
LIABILITIES Accounts payable $469.8 $411.1 Short-term borrowings
59.6 15.8 Other current liabilities 266.9 222.0 796.3 648.9
LONG-TERM LIABILITIES Long-term debt 708.2 622.7 Other long-term
liabilities 394.2 374.8 1,102.4 997.5 MINORITY INTEREST 6.1 6.4
SHAREHOLDERS' EQUITY 1,072.1 999.9 $2,976.9 $2,652.7 DATASOURCE:
Greif, Inc. CONTACT: Analysts: Robert Lentz, +1-614-876-2000, or
Media: Deb Strohmaier, +1-740-549-6074, +1-614-208-3496 cell Web
site: http://www.greif.com/
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