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 April 30, 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 Six Months
Ended April 30, Ended April 30,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Net sales $159,212 $184,869 $318,955 $354,927
Other income:
Interest and other 1,173 1,294 2,028 2,631
Gain on timber sales 1,106 1,691 2,997 4,717
161,491 187,854 323,980 362,275
Costs and expenses
(including depreciation of
$13,063 in 1996 and $11,369
in 1995):
Cost of products sold 133,161 146,900 260,595 279,558
Selling, general and
administrative 17,481 17,583 34,766 34,242
Interest 270 290 514 716
150,912 164,773 295,875 314,516
Income before income taxes 10,579 23,081 28,105 47,759
Taxes on income 4,000 8,200 10,700 17,500
Net income $ 6,579 $ 14,881 $ 17,405 $ 30,259
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 $ .27 $ .60 $ .68 $1.18
Class B Common Stock $ .31 $ .63 $ .83 $1.31
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>
April 30, October 31,
1996 1995
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 34,200 $ 31,612
Canadian government securities 18,670 18,981
Trade accounts receivable--less allowance
of $789 for doubtful items 65,047 76,950
Inventories, at the lower of cost (prin-
cipally last-in, first-out) or market 43,546 53,876
Prepaid expenses and other 16,201 16,482
Total current assets 177,664 197,901
LONG TERM ASSETS
Cash surrender value of life insurance 3,029 2,838
Interest in partnership -0- 1,091
Other long term assets 7,093 6,977
10,122 10,906
PROPERTIES, PLANTS AND EQUIPMENT--at cost
Timber properties--less depletion 5,059 4,518
Land 11,000 11,014
Buildings 120,153 104,892
Machinery, equipment, etc. 332,903 319,785
Construction in progress 46,291 42,102
Less accumulated depreciation (236,864) (223,456)
278,542 258,855
$466,328 $467,662
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 27,406 $ 35,935
Current portion of long term obligations 358 264
Accrued payrolls and employee benefits 9,239 10,882
Accrued taxes--general 1,312 1,954
Taxes on income -0- 126
Total current liabilities 38,315 49,161
LONG TERM OBLIGATIONS (interest rates from
4.81% - 8.00%; payable to 2002) 14,716 14,101
OTHER LONG TERM LIABILITIES 16,918 18,305
DEFERRED INCOME TAXES 17,215 13,562
Total long term liabilities 48,849 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 415,949 407,665
Cumulative translation adjustment (3,952) (3,390)
379,164 372,533
$466,328 $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 six months ended April 30, 1996 1995
<S> <C> <C>
Cash flows from operating activities:
Net income $17,405 $30,259
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and depletion 13,063 11,369
Deferred income taxes 3,659 2,830
(Increase) decrease:
Trade accounts receivable 11,903 (7,257)
Inventories 10,330 (14,861)
Prepaid expenses and other 281 (1,486)
Other long term assets (307) (862)
Increase (decrease):
Accounts payable (8,529) 1,486
Accrued payrolls and employee benefits (1,643) (599)
Accrued taxes - general (642) (669)
Taxes on income (126) (713)
Other long term liabilities (1,387) 3,173
Net cash provided by operating activities 44,007 22,670
Cash flows from investing activities:
Sales (purchases) of investments in government
securities 311 4,034
Purchase of properties, plants and equipment (32,838) (17,231)
Net cash used by investing activities (32,527) (13,197)
Cash flows from financing activities:
(Payments) proceeds on long term debt 709 (7,949)
Acquisition of treasury stock -0- (1,267)
Dividends paid (9,120) (8,499)
Net cash used by financing activities (8,411) (17,715)
Foreign currency translation adjustment (481) 3
Net increase (decrease) in cash and
cash equivalents 2,588 (8,239)
Cash and cash equivalents at beginning
of period 31,612 29,543
Cash and cash equivalents at end of period $34,200 $21,304
<FN>
See accompanying Notes to Consolidated Financial Statements.
</TABLE>
GREIF BROS. CORPORATION AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 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 Six Months
Ended April 30, Ended April 30,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Class A Common Stock $.08 $.06 $.32 $.28
Class B Common Stock $.12 $.09 $.47 $.41
</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 Six Months
Ended April 30, Ended April 30,
Class A Common Stock 10,873,172 shares 10,873,172 shares
Class B Common Stock 12,001,793 shares 12,041,793 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 6-month periods ended April 30, 1996 and April 30, 1995.
Net sales decreased 10% during the current period
compared to the previous period. This decrease was principally
the result of decreases in the container-board segment, which was
significantly affected by lower sales prices of the products in
this segment.
The gain on sales of timber and timber properties
decreased due to less salvage timber sales. In addition, timber
properties were sold to the U.S. Forest Service in the prior
year.
The cost of products sold as a percentage of sales
increased from 78.8% in 1995 to 81.7% in 1996. 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.
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.
The current ratio as of April 30, 1996 is an indication
of the continuation of the Company's strong liquidity.
The reduction in trade accounts receivable since year-end
is due to lower sales during the second quarter of fiscal 1996
compared to the fourth quarter of fiscal 1995. Inventory and
accounts payable balances are lower primarily due to a decrease
in certain raw material prices.
The increase in buildings is the result of completing a
manufacturing plant in Mason, Michigan. The increase in
construction in progress is primarily due to the mill
modernization program in Virginia, offset by the completion of
the plant in Michigan.
Capital expenditures were $32,837,000 during the six
months ended April 30, 1996. These capital expenditures were
principally needed to replace and improve equipment.
The Company has approved future purchases, primarily for
equipment, of approximately $40 million. Self-financing and low
interest rate borrowing has been the primary source for financing
such capital expenditures.
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 April 30,
1996, the consolidated statements of income for the 6-month
periods ended April 30, 1996 and 1995, and the consolidated
statements 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 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 June 7, 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> 6-MOS
<FISCAL-YEAR-END> OCT-31-1996
<PERIOD-END> APR-30-1996
<CASH> 34,200
<SECURITIES> 18,670
<RECEIVABLES> 65,836
<ALLOWANCES> (789)
<INVENTORY> 43,546
<CURRENT-ASSETS> 177,664
<PP&E> 515,406
<DEPRECIATION> (236,864)
<TOTAL-ASSETS> 466,328
<CURRENT-LIABILITIES> 38,315
<BONDS> 0
0
0
<COMMON> 9,034
<OTHER-SE> 370,130
<TOTAL-LIABILITY-AND-EQUITY> 466,328
<SALES> 318,955
<TOTAL-REVENUES> 323,980
<CGS> 260,595
<TOTAL-COSTS> 260,595
<OTHER-EXPENSES> 34,766
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 514
<INCOME-PRETAX> 28,105
<INCOME-TAX> 10,700
<INCOME-CONTINUING> 17,405
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 17,405
<EPS-PRIMARY> .68<F1>
<EPS-DILUTED> .68<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 $.83.
</FN>
</TABLE>
