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 January 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>
For the three months ended January 31, 1996 1995
<S> <C> <C>
Net sales $159,743 $170,058
Other income:
Interest and other 855 1,337
Gain on timber sales 1,891 3,026
162,489 174,421
Costs and expenses (including depreciation of
$6,523 in 1996 and $5,516 in 1995):
Cost of products sold 127,434 132,658
Selling, general and administrative 17,285 16,659
Interest 244 426
144,963 149,743
Income before income taxes 17,526 24,678
Taxes on income 6,700 9,300
Net income $ 10,826 $ 15,378
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 $0.41 $0.58
Class B Common Stock $0.52 $0.68
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>
January 31, October 31,
1996 1995
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 34,421 $ 31,612
Canadian government securities 18,257 18,981
Trade accounts receivable--less allowance
of $789 for doubtful items 68,875 76,950
Inventories, at the lower of cost (prin-
cipally last-in, first-out) or market 48,056 53,876
Prepaid expenses and other 16,069 16,482
Total current assets 185,678 197,901
LONG TERM ASSETS
Cash surrender value of life insurance 2,886 2,838
Interest in partnership -0- 1,091
Other long term assets 6,708 6,977
9,594 10,906
PROPERTIES, PLANTS AND EQUIPMENT--at cost
Timber properties--less depletion 4,571 4,518
Land 10,978 11,014
Buildings 118,046 104,892
Machinery, equipment, etc. 327,860 319,785
Construction in progress 32,267 42,102
Less accumulated depreciation (229,165) (223,456)
264,557 258,855
$459,829 $467,662
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 22,009 $ 35,935
Current portion of long term obligations 257 264
Accrued payrolls and employee benefits 9,909 10,882
Accrued taxes--general 1,451 1,954
Taxes on income 3,799 126
Total current liabilities 37,425 49,161
LONG TERM OBLIGATIONS (interest rates from
4.81% - 8.00%; payable to 2002) 14,037 14,101
OTHER LONG TERM LIABILITIES 18,673 18,305
DEFERRED INCOME TAXES 15,165 13,562
Total long term liabilities 47,875 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 411,681 407,665
Cumulative translation adjustment (4,319) (3,390)
374,529 372,533
$459,829 $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 three months ended January 31, 1996 1995
<S> <C> <C>
Cash flows from operating activities:
Net income $10,826 $15,378
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and depletion 6,523 5,694
Deferred income taxes 1,612 1,342
(Increase) decrease:
Trade accounts receivable 8,075 (1,703)
Inventories 5,820 (4,480)
Prepaid expenses and other 413 227
Other long term assets 221 (178)
Increase (decrease):
Accounts payable (13,926) (7,126)
Accrued payrolls and employee benefits (973) (650)
Accrued taxes - general (503) (724)
Taxes on income 3,673 6,437
Other long term liabilities 368 593
Net cash provided by operating activities 22,129 14,810
Cash flows from investing activities:
Sales (purchases) of investments in government
and short term securities 724 3,291
Purchase of properties, plants and equipment (12,375) (9,771)
Net cash used by investing activities (11,651) (6,480)
Cash flows from financing activities:
(Payments) proceeds on long term debt (71) (3,067)
Acquisition of treasury stock -0- (89)
Dividends paid (6,810) (6,650)
Net cash used by financing activities (6,881) (9,806)
Foreign currency translation adjustment (788) (1,281)
Net increase (decrease) in cash and cash
equivalents 2,809 (2,757)
Cash and cash equivalents at beginning of period 31,612 29,543
Cash and cash equivalents at end of period $34,421 $26,786
<FN>
See accompanying Notes to Consolidated Financial Statements.
</TABLE>
GREIF BROS. CORPORATION AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JANUARY 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
January 31,
1996 1995
<S> <C> <C>
Class A Common Stock $.24 $.22
Class B Common Stock $.35 $.32
</TABLE>
NOTE 3 - CALCULATION OF NET INCOME PER SHARE
Net income per share was calculated using the following
number of shares for the period presented:
Class A Common Stock - 10,873,172 shares
Class B Common Stock - 12,081,793 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 3-month periods ended January 31, 1996 and January 31, 1995.
Net sales decreased 6% during the current quarter compared
to the previous period. This decrease was primarily the result
of decreases in the containerboard segment, which was
significantly affected by lower prices of the products in this
segment.
The gain on sales of timber and timber properties
decreased due to the sale of timber properties to the U.S. Forest
Service and more salvage timber sales in the prior year.
The cost of products sold as a percentage of sales
increased slightly as compared to the prior year. This increase
is primarily the result of lower net sales of the containerboard
segment as compared to the previous period.
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 January 31, 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 first quarter of fiscal 1996
compared to the fourth quarter of fiscal 1995. Likewise, the
inventory and accounts payable balances are lower due to the
lower sales.
The increase in buildings is the result of completing a
manufacturing plant in Mason, Michigan. This increase was
partially offset by a reduction in construction in progress.
Capital expenditures were $12,375,000 during the three
months ended January 31, 1996. These capital expenditures were
principally needed to replace and improve equipment.
The Company has approved future purchases, primarily for
equipment, of approximately $43 million. Self-financing and low
interest rate borrowing has been the primary source for financing
such capital expenditures.
Effective February 1, 1996, the Company acquired Decatur
Container Corporation, a manufacturer of corrugated boxes and
other related items, located in Decatur, Illinois. This
acquisition will add approximately $8 million to annual sales.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
There are no material pending legal proceedings.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(a.) The Company held its Annual Meeting of Stockholders on
February 26, 1996.
(b.) At the Annual Meeting of Stockholders, the following
nominees were elected:
Charles R. Chandler
Michael H. Dempsey
Naomi C. Dempsey
Michael J. Gasser
Daniel J. Gunsett
Allan Hull
Robert C. Macauley
William B. Sparks, Jr.
J Maurice Struchen
(c.) At the Annual Meeting of Stockholders, the adoption of a
proposed amendment to the Greif Bros. Corporation By-laws
was approved by the stockholders, increasing the
number of directors from seven to nine. The inspectors
of election certified the following vote tabulations:
For 11,130,648
Against 100,182
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 January 31,
1996, the consolidated statement of income for the 3-month
periods ended January 31, 1996 and 1995, and the consolidated
statement of cash flows for the 3-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 March 8, 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> 3-MOS
<FISCAL-YEAR-END> OCT-31-1996
<PERIOD-END> JAN-31-1996
<CASH> 34,421
<SECURITIES> 18,257
<RECEIVABLES> 69,664
<ALLOWANCES> (789)
<INVENTORY> 48,056
<CURRENT-ASSETS> 185,678
<PP&E> 493,722
<DEPRECIATION> (229,165)
<TOTAL-ASSETS> 459,829
<CURRENT-LIABILITIES> 37,425
<BONDS> 0
0
0
<COMMON> 9,034
<OTHER-SE> 365,495
<TOTAL-LIABILITY-AND-EQUITY> 459,829
<SALES> 159,743
<TOTAL-REVENUES> 162,489
<CGS> 127,434
<TOTAL-COSTS> 127,434
<OTHER-EXPENSES> 17,285
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 244
<INCOME-PRETAX> 17,526
<INCOME-TAX> 6,700
<INCOME-CONTINUING> 10,826
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 10,826
<EPS-PRIMARY> .41<F1>
<EPS-DILUTED> .41<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 $.52.
</FN>
</TABLE>
