FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 or 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended July 31, 1994 Commission File Number 1-566
GREIF BROS.CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 31-4388903
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
621 Pennsylvania Avenue, Delaware, Ohio 43015
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 614-363-1271
Not Applicable
Former name, former address and former fiscal year, if changed since
last report.
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X . No .
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the close of the period covered by this report:
Class A Common Stock 5,436,586 shares
Class B Common Stock 6,656,387 shares
<TABLE>
PART I. FINANCIAL INFORMATION
GREIF BROS. CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
ASSETS
<CAPTION>
July 31, October 31,
1994 1993
<S> <C> <C>
CURRENT ASSETS
Cash and short-term investments $ 29,795,473 $ 30,827,007
U.S. and Canadian government securities
--at cost which approximates market 25,060,457 26,932,697
Trade accounts receivable--less allowance
of $965,000 for doubtful items 61,873,152 56,601,260
Inventories, at the lower of cost (prin-
cipally last-in, first-out) or market 46,686,289 43,366,594
Prepaid expenses and other 9,926,183 9,929,082
Total current assets 173,341,554 167,656,640
LONG TERM ASSETS
Cash surrender value of life insurance 2,532,496 2,452,048
Interest in partnership 1,091,040 1,091,040
Other long term assets 4,639,344 5,171,542
Deferred income taxes 17,210,445 18,452,595
25,473,325 27,167,225
PROPERTIES, PLANTS AND EQUIPMENT
Timber properties -- less depletion 3,449,675 3,289,750
Land 9,586,181 9,608,526
Buildings 94,805,161 86,147,800
Machinery, equipment, etc. 305,118,319 222,588,512
Construction in progress 2,259,942 64,538,771
Less accumulated depreciation (197,914,125) (183,558,486)
217,305,153 202,614,873
$416,120,032 $397,438,738
<FN>
See accompanying Notes to Consolidated Financial Statements
</TABLE>
<TABLE>
GREIF BROS. CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND SHAREHOLDERS' EQUITY
<CAPTION>
July 31, October 31,
1994 1993
<S> <C> <C>
CURRENT LIABILITIES
Accounts payable and accrued liabilities $ 27,744,245 $ 22,421,718
Current portion of long term obligations 227,898 375,605
Accrued payrolls and employee benefits 5,684,710 5,793,717
Accrued taxes--general 1,676,558 1,619,749
Taxes on income 755,620 1,447,636
Total current liabilities 36,089,031 31,658,425
LONG TERM OBLIGATIONS (interest rates from
3.85% - 6.00%; payable to 2000) 31,168,412 28,014,956
OTHER LONG TERM LIABILITIES 13,261,259 13,571,752
DEFERRED INCOME TAXES 22,440,441 19,226,893
Total long term liabilities 66,870,112 60,813,601
SHAREHOLDERS' EQUITY (Note 1)
Capital stock, without par value 9,033,988 9,033,988
Class A Common Stock:
Authorized 16,000,000 shares;
issued 10,570,480 shares;
in treasury 5,133,894 shares;
outstanding 5,436,586 shares
Class B Common Stock:
Authorized and issued 8,640,000 shares;
in treasury 1,983,613 shares;
(1,940,267 in 1993)
outstanding 6,656,387 shares
(6,699,733 in 1993)
Earnings retained for use in the business 308,776,252 298,756,926
Cumulative translation adjustment (4,649,351) (2,824,202)
313,160,889 304,966,712
$416,120,032 $397,438,738
<FN>
See accompanying Notes to Consolidated Financial Statements
</TABLE>
<TABLE>
GREIF BROS. AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF INCOME
<CAPTION>
Three Months Ended July 31, Nine Months Ended July 31,
1994 1993 1994 1993
(Table 5) (Table)
<S> <C> <C> <C> <C>
Sales and other income
Net sales $147,629,125 $130,761,687 $416,317,092 $389,704,630
Other income:
Gain on sales of timber and
timber properties 991,684 1,134,176 2,859,790 3,697,491
Interest, oil royalties and other 1,576,593 1,421,949 4,151,310 4,100,483
150,197,402 133,317,812 423,328,192 397,502,604
Costs and expenses
Cost of products sold 121,603,990 111,773,889 347,966,987 328,363,778
Selling, general and administrative 14,186,515 14,694,191 42,891,119 43,809,699
Interest 456,323 40,465 1,102,732 136,109
136,246,828 126,508,545 391,960,838 372,309,586
Income before income taxes 13,950,574 6,809,267 31,367,354 25,193,018
Taxes on income 5,250,000 2,829,864 11,750,000 10,255,948
Net income $ 8,700,574 $ 3,979,403 $ 19,617,354 $ 14,937,070
Net income per share (based on the average number of shares
outstanding during the period):
Based on the assumption that earnings were allocated to
Class A and Class B Common Stock to the extent that
dividends were actually paid for the year and the re-
mainder were allocated as they would be received by
shareholders in the event of liquidation, that is, equally
to Class A and Class B shares, share and share alike:
Class A $.70 $.30 $1.49 $1.10
Class B $.74 $.34 $1.73 $1.34
<FN>
Due to the special characteristics of the Company's two classes of stock (see Note 1), earnings per share can be calculated
upon the basis of varying assumptions, none of which, in the opinion of management, would be free from the claim that it fails fully
and accurately to represent the true interest of the shareholders of each class of stock and in the earnings retained for use in the
business.
See accompanying Notes to Consolidated Financial Statements
</TABLE>
<TABLE>
GREIF BROS. CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF EARNINGS RETAINED FOR USE IN THE BUSINESS
<CAPTION>
For the nine months ended July 31, 1994 1993
<S> <C> <C>
Balance at October 31, as previously reported $298,355,562 $283,250,664
Effect of restatement as required
by SFAS #109 (see Note 5) 401,364 1,025,620
Balance at beginning of period, as restated 298,756,926 284,276,284
Net income 19,617,354 14,937,070
318,374,280 299,213,354
Dividends paid:
On Class A Common Stock -- $.52
($.52 in 1993) 2,827,025 2,827,025
On Class B Common Stock -- $.76
($.76 in 1993) 5,077,764 5,108,679
7,904,789 7,935,704
Stock acquired for treasury 1,693,239 376,100
Balance at end of period $308,776,252 $290,901,550
<FN>
See accompanying Notes to Consolidated Financial Statements
</TABLE>
<TABLE>
GREIF BROS. CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<CAPTION>
For the nine months ended July 31, 1994 1993
<S> <C> <C>
Cash flows from operating activities:
Net income $ 19,617,354 $ 14,937,070
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and depletion 15,768,634 18,615,673
Deferred income taxes 4,499,294 686,948
(Increase) decrease, net of conversion:
Trade accounts receivable (5,271,892) 4,924,718
Inventories (3,319,695) 5,954,902
Prepaid expenses and other 2,899 1,514,378
Other long term assets 451,750 396,258
Increase (decrease), net of conversion:
Accounts payable and accrued liabilities 5,322,527 2,417,281
Accrued payrolls and employee benefits (109,007) 7,199
Accrued taxes - general 56,809 (49,444)
Taxes on income (692,016) (2,765,762)
Other long term liabilities (310,493) (479,808)
Net cash provided by operating activities 36,016,164 46,159,413
Cash flows from investing activities:
Sales (purchases) of investments in government
and short term securities 1,872,240 8,169,351
Purchase of properties, plants and equipment (30,784,545) (57,776,068)
Net cash used by investing activities (28,912,305) (49,606,717)
Cash flows from financing activities:
Proceeds (payments) on long term debt 3,005,749 11,882,416
Acquisition of treasury stock (1,693,239) (376,100)
Dividends paid (7,904,789) (7,935,704)
Net cash provided (used) by financing activities (6,592,279) 3,570,612
Foreign currency translation adjustment (1,543,114) (1,073,430)
Net increase (decrease) in cash and short term
investments (1,031,534) (950,122)
Cash and short term investments at beginning of
period 30,827,007 35,439,549
Cash and short term investments at end of period $ 29,795,473 $ 34,489,427
<FN>
See accompanying Notes to Consolidated Financial Statements
</TABLE>
GREIF BROS. CORPORATION AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JULY 31, 1994
NOTE 1 - CAPITAL STOCK AND RETAINED EARNINGS
Class A Common Stock is entitled to cumulative dividends of 2 cents a
share per year after which Class B Common Stock is entitled to non-cumulative
dividends up to 1 cent a share per year. Further distribution in any year
must be made in proportion of 1 cent a share for Class A Common Stock to 1-1/2
cents a share for Class B Common Stock. The Class A Common Stock shall have
no voting power nor shall it be entitled to notice of meetings of the
stockholders, all rights to vote and all voting power being vested exclusively
in the Class B Common Stock unless four quarterly cumulative dividends upon
the Class A Common stock are in default. There is no cumulative voting. The
Company has acquired 7,117,507 Class A and Class B Common Stock for
treasury at a cost of $38,033,526 which was appropriately charged against
earnings retained for use in the business. Included in the above are 43,346
shares acquired in 1994 for $1,693,239.
NOTE 2 - DIVIDENDS PER SHARE
<TABLE>
The following dividends per share were paid during the period
indicated:
<CAPTION>
Three Months Ended Nine Months Ended
July 31, July 31,
1994 1993 1994 1993
<S> <C> <C> <C> <C>
Class A Common Stock $.08 $.08 $.52 $.52
Class B Common Stock $.12 $.12 $.76 $.76
</TABLE>
NOTE 3 - CALCULATION OF NET INCOME PER SHARE
<TABLE>
Net income per share was calculated using the following number of
shares for the periods presented:
<CAPTION>
Three Months Ended Nine Months Ended
July 31, July 31,
<S> <C> <C>
Class A Common Stock 5,436,586 shares 5,436,586 shares
Class B Common Stock 6,661,880 shares 6,677,545 shares
</TABLE>
NOTE 4 - INVENTORIES
Inventories are comprised principally of raw materials.
<PAGE>
NOTE 5 - RESTATEMENT
The 1991, 1992 and 1993 financial statements have been restated to
reflect the adoption, retroactive to November 1, 1990, of Statement of
Financial Accounting Standards (SFAS) No. 109, "Accounting for Income Taxes".
In connection with the adoption of SFAS No. 109, the Company recorded a one
time adjustment that resulted in a reduction of the deferred income tax
liability and the recording of a deferred tax asset. Certain prior year
amounts in the Company's financial statements have been restated. The effect
on net income for the nine months ended July 31, 1993 was a reduction in net
income of $467,965.
MANAGEMENT'S DISCUSSION AND ANALYSIS
Liquidity and Capital Resources
As indicated in the Consolidated Balance Sheet, elsewhere in this
report and discussed in greater detail in the 1993 Annual Report to
Shareholders, the Company is dedicated to maintaining a strong financial
position. It is our belief that this dedication is extremely important during
all economic times.
As discussed in the 1993 Annual Report, the Company is subject to the
economic conditions of its customers. During this period, the Company has
been able to utilize its developed financial position to meet its continued
business needs.
The current ratio as of July 31, 1994 is an indication of the
continuation of the Company's strong liquidity.
Capital expenditures were $30,784,545 during the nine months ended
July 31, 1994. These capital expenditures were principally for new facilities
and to replace and improve equipment and buildings.
Results of Operations
Historically, revenues or earnings may or may not be representative
of future operations because of various economic factors. The following
comparative information is presented for the 9-month periods ended July 31,
1994 and July 31, 1993.
Net sales to customers for the third quarter and nine months ended
July 31, 1994, as compared to the corresponding periods for fiscal 1993,
increased approximately 12.9% and 6.8%, respectively. This increase was
primarily due to an increase in unit sales.
The cost of products sold as a percentage of sales slightly decreased
for the third quarter and nine months ended July 31, 1994 as compared to the
same periods last year.
Interest expense increased for the nine months ended July 31, 1994 as
compared to the prior year. This increase was primarily the result of
additional indebtedness incurred by a subsidiary company to purchase a
recycled paper machine.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
There are no material pending legal proceedings not covered by
insurance.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a.) Exhibits
None
(b.) Reports on Form 8-K
A report on Form 8-K dated June 10, 1994 was filed
reporting that John C. Dempsey's responsibilities
as Chief Executive Officer were transferred to
Michael J. Gasser, Vice Chairman of the Board of
Directors and previously Chief Operating Officer
of the company. Mr. Dempsey was elected to the
post of Chairman Emeritus of the Board of
Directors.
OTHER COMMENTS
The information furnished herein reflects all adjustments which are,
in the opinion of management, necessary for a fair presentation of the
consolidated balance sheet as of July 31, 1994, the consolidated statement of
income for the 9-month periods ended July 31, 1994 and 1993, and the
consolidated statement of cash flows for the 9-month periods then ended.
These financial statements are unaudited; however, at year end an audit will
be made for the fiscal year by independent certified public accountants.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Company has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Greif Bros. Corporation
(Registrant)
Date September 8, 1994
John K. Dieker
Assistant Controller
Date September 8, 1994
Philip R. Metzger
Assistant Treasurer
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> OCT-31-1994
<PERIOD-END> JUL-31-1994
<CASH> 29,795
<SECURITIES> 25,060
<RECEIVABLES> 62,838
<ALLOWANCES> (965)
<INVENTORY> 46,686
<CURRENT-ASSETS> 173,342
<PP&E> 415,219
<DEPRECIATION> (197,914)
<TOTAL-ASSETS> 416,120
<CURRENT-LIABILITIES> 36,089
<BONDS> 0
<COMMON> 9,034
0
0
<OTHER-SE> 304,127
<TOTAL-LIABILITY-AND-EQUITY> 416,120
<SALES> 416,317
<TOTAL-REVENUES> 423,328
<CGS> 347,967
<TOTAL-COSTS> 347,967
<OTHER-EXPENSES> 42,891
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,103
<INCOME-PRETAX> 31,367
<INCOME-TAX> 11,750
<INCOME-CONTINUING> 19,617
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 19,617
<EPS-PRIMARY> 1.49
<EPS-DILUTED> 1.49
</TABLE>
