FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
QUARTERLY REPORT PURSUANT TO SECTION 13 or 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended April 30, 1995 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 10,873,172 shares
Class B Common Stock 13,257,068 shares
<TABLE>
PART I. FINANCIAL INFORMATION
GREIF BROS. CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
ASSETS
<CAPTION>
April 30, October 31,
1995 1994
<S> <C> <C>
CURRENT ASSETS
Cash and short-term investments $ 21,304 $ 29,543
U.S. and Canadian government securities
--at amortized cost which approximates market 19,936 23,970
Trade accounts receivable--less allowance
of $989 for doubtful items 76,758 69,501
Inventories, at the lower of cost (prin-
cipally last-in, first-out) or market 65,805 50,944
Prepaid expenses and other 15,870 14,384
Total current assets 199,673 188,342
LONG TERM ASSETS
Cash surrender value of life insurance 2,678 2,618
Interest in partnership 1,091 1,091
Other long-term assets 6,655 5,853
10,424 9,562
PROPERTIES, PLANTS AND EQUIPMENT--at cost
Timber properties -- less depletion 3,913 3,639
Land 10,516 10,521
Buildings 100,268 99,936
Machinery, equipment, etc. 296,802 291,426
Construction in progress 28,735 18,136
Less accumulated depreciation (213,218) (202,488)
227,016 221,170
$437,113 $419,074
<FN>
See accompanying Notes to Consolidated Financial Statements.
</TABLE>
<TABLE>
GREIF BROS. CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
LIABILITIES AND SHAREHOLDERS' EQUITY
<CAPTION>
April 30, October 31,
1995 1994
<S> <C> <C>
CURRENT LIABILITIES
Accounts payable $ 34,434 $ 32,948
Current portion of long term obligations 4,242 249
Accrued payrolls and employee benefits 6,483 7,082
Accrued taxes--general 1,283 1,952
Taxes on income -0- 713
Total current liabilities 46,442 42,944
LONG TERM OBLIGATIONS (interest rates from
4.81% - 8.00%; payable to 2000) 16,024 27,966
OTHER LONG TERM LIABILITIES 17,438 14,265
DEFERRED INCOME TAXES 9,789 6,960
Total long term liabilities 43,251 49,191
SHAREHOLDERS' EQUITY (Note 1)
Capital stock, without par value 9,034 9,034
Class A Common Stock:
Authorized 32,000,000 shares;
issued 21,140,960 shares;
in treasury 10,267,788 shares;
outstanding 10,873,172 shares
Class B Common Stock:
Authorized and issued 17,280,000 shares;
in treasury 4,022,932 shares;
(3,922,278 in 1994)
outstanding 13,257,068 shares
(13,357,722 in 1994)
Earnings retained for use in the business 342,076 321,583
Cumulative translation adjustment (3,690) (3,678)
347,420 326,939
$437,113 $419,074
<FN>
See accompanying Notes to Consolidated Financial Statements.
</TABLE>
<TABLE>
GREIF BROS. CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per share amounts)
<CAPTION>
Three Months Ended April 30, Six Months Ended April 30,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Sales and other income
Net sales $184,869 $139,915 $354,927 $268,688
Other income:
Gain on sales of
timber and timber
properties 1,691 1,010 4,717 1,868
Interest, oil royalties
and other 1,294 1,258 2,631 2,575
187,854 142,183 362,275 273,131
Costs and expenses
Cost of products sold 146,900 117,184 279,558 226,363
Selling, general and
administrative 17,583 14,437 34,242 28,705
Interest 290 410 716 647
164,773 132,031 314,516 255,715
Income before income
taxes 23,081 10,152 47,759 17,416
Taxes on income 8,200 3,800 17,500 6,500
Net income $ 14,881 $ 6,352 $ 30,259 $ 10,916
Net income per share (based on the average number of shares outstanding during
the period, adjusted for two-for-one stock split):
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 remainder 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 Common Stock $ .60 $ .25 $1.18 $ .40
Class B Common Stock $ .63 $ .27 $1.31 $ .50
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.
<FN>
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
(Dollars in thousands, except per share amounts)
<CAPTION>
For the six months ended April 30, 1995 1994
<S> <C> <C>
Balance at beginning of period $321,583 $298,757
Net income 30,259 10,916
351,842 309,673
Dividends paid:
On Class A Common Stock -- $.28 3,044 2,392
($.22 in 1994)
On Class B Common Stock -- $.41 5,455 4,279
($.32 in 1994)
8,499 6,671
Stock acquired for treasury 1,267 833
Balance at end of period $342,076 $302,169
<FN>
See accompanying Notes to Consolidated Financial Statements.
</TABLE>
<TABLE>
GREIF BROS. CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
<CAPTION>
For the six months ended April 30, 1995 1994
Cash flows from operating activities:
<S> <C> <C>
Net income $ 30,259 $ 10,916
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and depletion 11,369 10,425
Deferred income taxes 2,830 2,894
(Increase) decrease:
Trade accounts receivable (7,257) (1,830)
Inventories (14,861) (6,972)
Prepaid expenses and other (1,486) (334)
Other long term assets (862) 341
Increase (decrease):
Accounts payable and accrued liabilities 1,486 2,423
Accrued payrolls and employee benefits (599) (534)
Accrued taxes - general (669) (387)
Taxes on income (713) (1,209)
Other long term liabilities 3,173 (206)
Net cash provided by operating activities 22,670 15,527
Cash flows from investing activities:
Sales (purchases) of investments in government
and short term securities 4,034 6,751
Purchase of properties, plants and equipment (17,231) (21,603)
Net cash used by investing activities (13,197) (14,852)
Cash flows from financing activities:
Proceeds (payments) on long term debt (7,949) 5,565
Acquisition of treasury stock (1,267) (833)
Dividends paid (8,499) (6,671)
Net cash used by financing activities (17,715) (1,939)
Foreign currency translation adjustment 3 (1,413)
Net increase (decrease) in cash and short term
investments (8,239) (2,677)
Cash and short term investments at beginning of
period 29,543 30,827
Cash and short term investments at end of period $ 21,304 $ 28,150
<FN>
See accompanying Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
GREIF BROS. CORPORATION AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 1995
NOTE 1 - CAPITAL STOCK AND RETAINED EARNINGS
In March, 1995, authorized Class A Common Stock was increased from
16,000,000 shares to 32,000,000 shares and Class B Common Stock from 8,640,000
shares to 17,280,000 shares. At the same time, all issued shares were split
two-for-one.
Class A Common Stock is entitled to cumulative dividends of 1 cent a
share per year after which Class B Common Stock is entitled to non-cumulative
dividends up to 1/2 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 14,290,720 shares of Class A and Class B Common Stock for
treasury at a cost of $39,396,296 which was appropriately charged against
earnings retained for use in the business. Included in the above are 51,280
shares of Class B Common Stock acquired in fiscal 1995 for $1,267,000.
NOTE 2 - DIVIDENDS PER SHARE
<TABLE>
The following dividends per share were paid during the period
indicated, adjusted for two-for-one stock split:
<CAPTION>
Three Months Ended Six Months Ended
April 30, April 30,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Class A Common Stock $.06 $.04 $.28 $.22
Class B Common Stock $.09 $.06 $.41 $.32
</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 Six Months Ended
April 30, April 30,
<S> <C> <C>
Class A Common Stock 10,873,172 shares 10,873,172 shares
Class B Common Stock 13,285,823 shares 13,295,697 shares
</TABLE>
NOTE 4 - INVENTORIES
Inventories are comprised principally of raw materials.
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 1994 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 1994 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 April 30, 1995 is an indication of the
continuation of the Company's strong liquidity.
Capital expenditures were $17,231,000 during the six months ended
April 30, 1995. These capital expenditures were principally needed to replace
and improve equipment.
As disclosed in the 1994 Annual Report, a subsidiary of the Company
has a commitment to build a manufacturing plant in Michigan. In addition to
this plant, the Company has outstanding purchase commitments for capital
expenditures of approximately $19,000,000.
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 6-month periods ended April 30,
1995 and April 30, 1994.
Net sales increased 32% during the current period compared to the
previous period. This increase was principally the result of increases in
the containerboard segment, which was significantly affected by increased
sales prices resulting from shortages in containerboard and related products.
In addition, the shipping containers segment contributed to the increase due
to an increase in unit sales and higher sales prices resulting from the
increase in cost of the Company's raw materials.
The gain on sales of timber and timber properties increased due to
the sale of timber properties to the U.S. Forest Service and more salvage
timber sales. Also, the sales prices for timber were higher as compared to
the previous period.
The cost of products sold as a percentage of sales decreased from 84%
in 1994 to 79% in 1995. This decrease was largely the result of a higher
percent of the net sales being comprised of the containerboard and related
products segment, which has a higher gross profit margin than the Company's
other segment. This decrease was partially offset by an increase in the cost
of the Company's raw materials.
Financial Position
The balance in inventories is higher at April 30, 1995 compared to
October 31, 1994. This increase is to support the higher volume of sales that
the Company is experiencing this year. In addition, the higher cost of raw
materials contributed to this increase in inventories.
Long term obligations are lower at April 30, 1995 compared to October
31, 1994 due to pre-payment of long term debt. The decrease caused by this
pre-payment was partially offset by additional long term debt which was
incurred to build a manufacturing plant in Michigan.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
There are no material pending legal proceedings not covered by
insurance.
As disclosed in the 1994 Form 10-K, there is a pollution situation
at the Company's plant in Winfield, Kansas. During the quarter ended April
30, 1995, there were numerous meetings and discussions concerning this matter
which have caused management to conclude that a reserve is warranted. As
such, a reserve for $2,000,000 has been recorded by the Company as of April
30, 1995.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a.)Exhibits.
None.
(b.)Reports on Form 8-K.
No events occurred requiring Form 8-K to be filed.
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 April 30, 1995, the consolidated statement of
income for the 6-month periods ended April 30, 1995 and 1994, and the
consolidated statement of cash flows for the 6-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 June 12, 1995 John K. Dieker
Controller
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the Form
10-Q and is qualified in its entirety by reference to such Form 10-Q.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-31-1995
<PERIOD-END> APR-30-1995
<CASH> 21,304
<SECURITIES> 19,936
<RECEIVABLES> 77,747
<ALLOWANCES> (989)
<INVENTORY> 65,805
<CURRENT-ASSETS> 199,673
<PP&E> 440,234
<DEPRECIATION> (213,218)
<TOTAL-ASSETS> 437,113
<CURRENT-LIABILITIES> 46,442
<BONDS> 0
<COMMON> 9,034
0
0
<OTHER-SE> 338,386
<TOTAL-LIABILITY-AND-EQUITY> 437,113
<SALES> 354,927
<TOTAL-REVENUES> 362,275
<CGS> 279,558
<TOTAL-COSTS> 279,558
<OTHER-EXPENSES> 34,242
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 716
<INCOME-PRETAX> 47,759
<INCOME-TAX> 17,500
<INCOME-CONTINUING> 30,259
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 30,259
<EPS-PRIMARY> 1.18<F1>
<EPS-DILUTED> 1.18<F1>
<FN>
<F1>Amount represents the earnings per share for the Class A Common Stock. The
earnings per share for the Class B Common Stock are $1.31.
</FN>
</TABLE>
