U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 or 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended July 31, 1996 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 12,001,793 shares
<TABLE>
PART I. FINANCIAL INFORMATION
GREIF BROS. CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per share amounts)
<CAPTION>
Three Months Nine Months
Ended July 31, Ended July 31,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Net sales $155,994 $184,159 $474,949 $539,086
Other income:
Interest and other 1,535 1,553 3,563 4,184
Gain on timber sales 3,084 1,402 6,081 6,119
160,613 187,114 484,593 549,389
Costs and expenses:
Cost of products sold 128,865 138,011 389,460 417,569
Selling, general and
administrative 16,116 19,911 50,882 54,153
Interest 196 104 710 820
145,177 158,026 441,052 472,542
Income before income taxes 15,436 29,088 43,541 76,847
Taxes on income 5,800 11,500 16,500 29,000
Net income $ 9,636 $ 17,588 $ 27,041 $ 47,847
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 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 $ .36 $ .71 $1.00 $1.89
Class B Common Stock $ .40 $ .74 $1.15 $2.05
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 retained earnings.
<FN>
See accompanying Notes to Consolidated Financial Statements.
</TABLE>
<TABLE>
GREIF BROS. CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
ASSETS
<CAPTION>
July 31, October 31,
1996 1995
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 42,192 $ 31,612
Canadian government securities 18,846 18,981
Trade accounts receivable--less allowance
of $789 for doubtful items 63,474 76,950
Inventories, at the lower of cost (prin-
cipally last-in, first-out) or market 36,924 53,876
Prepaid expenses and other 14,281 16,482
Total current assets 175,717 197,901
LONG TERM ASSETS
Cash surrender value of life insurance 3,030 2,838
Interest in partnership -- 1,091
Other long term assets 6,620 6,977
9,650 10,906
PROPERTIES, PLANTS AND EQUIPMENT--at cost
Timber properties--less depletion 5,688 4,518
Land 10,982 11,014
Buildings 120,123 104,892
Machinery, equipment, etc. 337,020 319,785
Construction in progress 58,819 42,102
Less accumulated depreciation (241,887) (223,456)
290,745 258,855
$476,112 $467,662
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 24,143 $ 35,935
Current portion of long term obligations 1,273 264
Accrued payrolls and employee benefits 8,107 10,882
Accrued taxes--general 1,748 1,954
Taxes on income 4,496 126
Total current liabilities 39,767 49,161
LONG TERM OBLIGATIONS (interest rates from
4.81% - 8.00%; payable to 2002) 12,696 14,101
OTHER LONG TERM LIABILITIES 19,226 18,305
DEFERRED INCOME TAXES 18,338 13,562
Total long term liabilities 50,260 45,968
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;
outstanding 10,873,172 shares
Class B Common Stock:
Authorized and issued 17,280,000 shares;
outstanding 12,001,793 shares
(13,201,793 in 1995)
Treasury Stock, at cost (41,867) (40,776)
Class A Common Stock: 10,267,788 shares
Class B Common Stock: 5,278,207 shares
(4,078,207 in 1995)
Retained earnings 423,276 407,665
Cumulative translation adjustment (4,358) (3,390)
386,085 372,533
$476,112 $467,662
<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 nine months ended July 31, 1996 1995
<S> <C> <C>
Cash flows from operating activities:
Net income $27,041 $47,847
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and depletion 19,360 17,097
Deferred income taxes 4,786 4,329
(Increase) decrease:
Trade accounts receivable 13,476 2,168
Inventories 16,952 (18,647)
Prepaid expenses and other 2,201 (108)
Other long term assets 165 (2,144)
Increase (decrease):
Accounts payable (11,792) (5,040)
Accrued payrolls and employee benefits (2,775) 2,864
Accrued taxes - general (206) (739)
Taxes on income 4,370 (401)
Other long term liabilities 921 3,751
Net cash provided by operating activities 74,499 50,977
Cash flows from investing activities:
Net sales of investments in government
securities 135 4,200
Purchase of properties, plants and
equipment (51,413) (31,008)
Net cash used by investing activities (51,278) (26,808)
Cash flows from financing activities:
Net payments on long term obligations (396) (17,793)
Acquisition of treasury stock -- (2,646)
Dividends paid (11,430) (10,340)
Net cash used by financing activities (11,826) (30,779)
Foreign currency translation adjustment (815) (220)
Net increase (decrease) in cash and cash
equivalents 10,580 (6,830)
Cash and cash equivalents at beginning of
period 31,612 29,543
Cash and cash equivalents at end of period $42,192 $22,713
<FN>
See accompanying Notes to Consolidated Financial Statements.
</TABLE>
GREIF BROS. CORPORATION AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JULY 31, 1996
NOTE 1 - CAPITAL STOCK AND RETAINED EARNINGS
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 arrears. There is no cumulative voting.
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,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Class A Common Stock $.08 $.06 $.40 $.34
Class B Common Stock $.12 $.09 $.59 $.50
</TABLE>
NOTE 3 - CALCULATION OF NET INCOME PER SHARE
Net income per share was calculated using the following number of shares
for the periods presented:
Three Months Ended Nine Months Ended
July 31, July 31,
Class A Common Stock 10,873,172 shares 10,873,172 shares
Class B Common Stock 12,001,793 shares 12,028,460 shares
NOTE 4 - INVENTORIES
Inventories are comprised principally of raw materials.
NOTE 5 - TREASURY SHARES ACQUIRED
Effective November 6, 1995, Macauley & Company (the Partnership) in which
the Company was a limited partner, was liquidated. Prior to the liquidation,
the Partnership held Class B Common Stock (2,400,000 shares) of the Company.
Upon liquidation, the Company received 1,200,000 shares of the Class B Common
Stock. The Company recorded the liquidation by crediting interest in
partnership and charging an equal amount to treasury stock.
MANAGEMENT'S DISCUSSION AND ANALYSIS
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 three-month and nine-month
periods ended July 31, 1996 and July 31, 1995.
Net sales decreased during the current period compared to the previous
period. This decrease was principally the result of decreases in the
containerboard segment, which was significantly affected by lower sales prices
of the products in this segment.
For the quarter ended July 31, 1996, the gain on sales of timber and
timber properties increased since the prior year due to timber properties sold
in Nova Scotia, Canada.
The cost of products sold as a percentage of sales increased since the
prior year. The profit margins of the containerboard segment were lower as
compared to the previous period due to a reduction in the sales prices of its
products without a corresponding reduction in its costs.
Liquidity and Capital Resources
As indicated in the Consolidated Balance Sheet, elsewhere in this report
and discussed in greater detail in the 1995 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.
The current ratio as of July 31, 1996 is an indication of the
continuation of the Company's strong liquidity.
As discussed in the 1995 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.
During the nine months ended July 31, 1996, the Company generated
$74,499,000 of cash from operations. Capital expenditures were $51,413,000
during this same period. These capital expenditures were principally related
to a paper mill modernization program in Virginia as well as replacing and
improving equipment.
The Company has approved future purchases, primarily for equipment, of
approximately $38 million. Self-financing and low interest rate borrowing has
been the primary source for financing such capital expenditures.
The reduction in trade accounts receivable since year-end is due to lower
sales during the third quarter of fiscal 1996 compared to the third quarter of
fiscal 1995. Inventory and accounts payable balances are lower primarily due
to a decrease in certain raw material prices.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
There are no material pending legal proceedings.
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 July 31, 1996, the consolidated statement of income for
the 9-month periods ended July 31, 1996 and 1995, 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 our independent 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 9, 1996
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> 9-MOS
<FISCAL-YEAR-END> OCT-31-1996
<PERIOD-END> JUL-31-1996
<CASH> 42,192
<SECURITIES> 18,846
<RECEIVABLES> 64,263
<ALLOWANCES> (789)
<INVENTORY> 36,924
<CURRENT-ASSETS> 175,717
<PP&E> 532,632
<DEPRECIATION> (241,887)
<TOTAL-ASSETS> 476,112
<CURRENT-LIABILITIES> 39,767
<BONDS> 0
0
0
<COMMON> 9,034
<OTHER-SE> 377,051
<TOTAL-LIABILITY-AND-EQUITY> 476,112
<SALES> 474,949
<TOTAL-REVENUES> 484,593
<CGS> 389,460
<TOTAL-COSTS> 389,460
<OTHER-EXPENSES> 50,882
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 710
<INCOME-PRETAX> 43,541
<INCOME-TAX> 16,500
<INCOME-CONTINUING> 27,041
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 27,041
<EPS-PRIMARY> 1.00<F1>
<EPS-DILUTED> 1.00<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 $1.15.
</FN>
</TABLE>
