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 the Quarter Ended January 31, 1999 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.)
425 Winter Road, Delaware, Ohio 43015
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (740) 549-6000
Not Applicable
Former name, former address and former fiscal year, if changed since last
report.
Indicated 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 10,909,672 shares
Class B Common Stock 12,001,793 shares
PART I. FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
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, 1999 1998
(As Restated)
<S> <C> <C>
Net sales $177,583 $169,697
Other income:
Gain on timber sales 2,965 2,787
Interest and other 1,430 2,510
181,978 174,994
Costs and expenses (including depreciation of
$9,509 in 1999 and $8,374 in 1998):
Cost of products sold 148,589 138,177
Selling, general and administrative 26,516 20,324
Interest 3,865 1,230
178,970 159,731
Income before income taxes and equity in earnings
of affiliate 3,008 15,263
Income taxes 1,147 5,647
Income before equity in earnings of affiliate 1,861 9,616
Equity in earnings of affiliate 1,820 1,241
Net income $ 3,681 $ 10,857
Basic and diluted earnings per share:
Class A Common Stock $0.13 $0.38
Class B Common Stock $0.19 $0.56
<FN>
See accompanying Notes to Consolidated Financial Statements
</TABLE>
<TABLE>
GREIF BROS. CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
<CAPTION>
ASSETS
January 31, October 31,
1999 1998
(As Restated)
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 13,545 $ 41,329
Canadian government securities 5,333 6,654
Trade accounts receivable - less allowance
of $3,043 for doubtful items ($2,918 in 1998) 96,633 113,931
Inventories 53,709 64,851
Deferred tax asset 13,793 13,355
Prepaid expenses and other 13,670 16,626
Total current assets 196,683 256,746
LONG-TERM ASSETS
Goodwill - less amortization 144,624 123,677
Investment in affiliate 113,306 49,059
Other long-term assets 27,703 27,393
285,633 200,129
PROPERTIES, PLANTS AND EQUIPMENT - at cost
Timber properties - less depletion 9,079 9,067
Land 15,534 17,294
Buildings 141,630 160,839
Machinery and equipment 478,415 505,236
Capital projects in progress 17,570 17,045
Accumulated depreciation (266,569) (287,936)
395,659 421,545
$ 877,975 $ 878,420
LIABILITIES AND SHAREHOLDERS' EQUITY
January 31, October 31,
1999 1998
(As Restated)
CURRENT LIABILITIES
Accounts payable $ 45,296 $ 45,361
Accrued payrolls and employee benefits 5,700 9,859
Restructuring reserves 29,035 32,411
Other current liabilities 6,027 10,604
Total current liabilities 86,058 98,235
LONG-TERM LIABILITIES
Long-term obligations 250,000 235,000
Deferred tax liability 39,952 42,299
Postretirement benefit liability 25,279 25,554
Other long-term liabilities 15,665 17,230
Total long-term liabilities 330,896 320,083
SHAREHOLDERS' EQUITY (Note 2)
Capital stock, without par value 9,936 9,936
Class A Common Stock:
Authorized 32,000,000 shares;
issued 21,140,960 shares;
outstanding 10,909,672 shares
(10,900,672 in 1998)
Class B Common Stock:
Authorized and issued 17,280,000 shares;
outstanding 12,001,793 shares
Treasury Stock, at cost (41,858) (41,858)
Class A Common Stock: 10,231,288 shares
(10,240,288 in 1998)
Class B Common Stock: 5,278,207 shares
Retained earnings 500,400 500,068
Cumulative translation adjustment (7,457) (8,044)
461,021 460,102
$877,975 $878,420
<FN>
See accompanying Notes to Consolidated Financial Statements
</TABLE>
<TABLE>
GREIF BROS. CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
For the three months ended January 31, 1999 1998
(As Restated)
<S> <C> <C>
Cash flows from operating activities:
Net income $ 3,681 $ 10,857
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation, depletion and amortization 11,111 8,709
Equity in earnings of affiliate (1,820) (1,241)
Deferred income taxes 713 892
Other - net (1,416) (345)
Changes in current assets and liabilities, net
of effects from acquisitions and dispositions 4,380 (4,076)
Net cash provided by operating activities 16,649 14,796
Cash flows from investing activities:
Acquisitions and dispositions, net of cash (49,452) --
Disposals of investments in Canadian
government securities 1,321 228
Purchases of properties, plants and equipment (8,361) (11,005)
Net cash used by investing activities (56,492) (10,777)
Cash flows from financing activities:
Proceeds from long-term debt 36,500 4,000
Payments on long-term debt (21,500) (4,529)
Dividends paid (3,349) (3,341)
Other - net -- 37
Net cash provided by (used in) financing
activities 11,651 (3,833)
Foreign currency translation adjustment 408 (1,071)
Net decrease in cash and cash equivalents (27,784) (885)
Cash and cash equivalents at beginning of period 41,329 17,719
Cash and cash equivalents at end of period $ 13,545 $ 16,834
<FN>
See accompanying Notes to Consolidated Financial Statements
</TABLE>
GREIF BROS. CORPORATION AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JANUARY 31, 1999
NOTE 1 - BASIS OF PRESENTATION
The information furnished herein reflects all adjustments which are,
in the opinion of management, necessary for a fair presentation of the
consolidated balance sheets as of January 31, 1999 and October 31, 1998
and the consolidated statements of income and cash flows for the three-
month periods ended January 31, 1999 and 1998. The preparation of
financial statements in conformity with generally accepted accounting
principles requires management to make certain estimates and
assumptions that affect the amounts reported on the financial statements
and accompanying notes. Actual amounts could differ from those
estimates.
These financial statements should be read in conjunction with the
financial statements and notes thereto included in Greif Bros.
Corporation's (the "Company's") most recent Annual Report on Form 10-K.
Certain prior period amounts have been reclassified to conform to
the 1999 presentation.
NOTE 2 - 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 per 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
cumulative dividends upon the Class A Common Stock are in arrears.
There is no cumulative voting.
NOTE 3 - DIVIDENDS PER SHARE
<TABLE>
The following dividends per share were paid during the period
indicated:
<CAPTION>
Three Months
Ended January 31,
1999 1998
<S> <C> <C>
Class A Common Stock $0.12 $0.12
Class B Common Stock $0.17 $0.17
</TABLE>
NOTE 4 - CALCULATION OF EARNINGS PER SHARE
The Company has two classes of common stock and, as such,
applies the "two-class method" of computing earnings per share as
prescribed in Statement of Financial Accounting Standards ("SFAS") No.
128, "Earnings Per Share". In accordance with the statement, earnings are
allocated first to Class A and Class B Common Stock to the extent that
dividends are actually paid and the remainder allocated assuming all of the
earnings for the period have been distributed in the form of dividends.
<TABLE>
The following is a reconciliation of the shares used to calculate
basic and diluted earnings per share:
<CAPTION>
Three Months
Ended January 31,
1999 1998
<S> <C> <C>
Class A Common Stock:
Basic earnings per share 10,909,672 10,901,962
Assumed conversion of stock options 57,436 48,834
Diluted earnings per share 10,967,108 10,950,796
Class B Common Stock:
Basic and diluted earnings per share 12,001,793 12,001,793
</TABLE>
There are 230,275 options that are antidilutive for 1999 (zero for
1998).
NOTE 5 - INVENTORIES
Inventories are comprised principally of raw materials and are stated
at the lower of cost (principally on last-in, first-out basis) or market.
NOTE 6 - ACQUISITIONS
CorrChoice Joint Venture:
On November 1, 1998, the Company entered into a Joint Venture
Agreement with RDJ Holdings Inc. ("RDJ") and a minority shareholder of
a subsidiary of Ohio Packaging Corporation (the "Minority Shareholder") to form
CorrChoice, Inc. ("CorrChoice"). Pursuant to the terms of the Joint Venture
Agreement, the Company contributed all of its stock of Michigan
Packaging Company ("Michigan Packaging") and Ohio Packaging
Corporation ("Ohio Packaging") in exchange for a 63.24% ownership interest
in CorrChoice and RDJ and the Minority Shareholder contributed all of their
stock of Ohio Packaging and its subsidiaries in exchange for a 36.76%
ownership interest in CorrChoice. The ownership percentages of the Company
and the other shareholders in CorrChoice were determined by an appraisal
of Michigan Packaging and Ohio Packaging performed by an independent third
party.
In connection with the closing of the joint venture transaction, the
Company and RDJ entered into a voting agreement which enables the
Company and RDJ to be equally represented on CorrChoice's Board of
Directors. The Company initially determined that the results of CorrChoice
should be included in the Company's Consolidated Financial Statements
subsequent to November 1, 1998 (see Note 12 of the Consolidated
Financial Statements of the Company filed as part of the Company's
Annual Report on Form 10-K for its fiscal year ended October 31, 1998).
However, after further review, and consistent with generally accepted
accounting principles, the Company has recorded its investment in
CorrChoice using the equity method of accounting.
At January 31, 1999, the unaudited financial position of CorrChoice
included total assets of $196.4 million and total liabilities of $23.9 million.
For the quarter ended January 31, 1999, the unaudited results of operations
for CorrChoice included net sales of $48.1 million and net income of $3.5
million.
Prior to the formation of the joint venture, the Company accounted
for its investment in Ohio Packaging's non-voting stock under the cost
method of accounting since it had no significant influence over the
operations of Ohio Packaging. However, as a result of the Company's
interest in the joint venture effective November 1, 1998, the Company is
required to retroactively adjust the financial statements of prior years
using the equity method of accounting. The prior year adjustment was a
$1,241,000 (or $0.04 per share for the Class A Common Stock and $0.06 per
share for the Class B Common Stock) increase to net income during the
first quarter of 1998. As a result of the cumulative adjustments, the
Company's investment in Ohio Packaging was $49,059,000 and
shareholders' equity increased by $43,170,000 as of October 31, 1998.
Intermediate Bulk Containers ("IBC") Acquisition:
On January 11, 1999, the Company purchased the assets of the IBC
business from Sonoco Products Company ("Sonoco") for $38,013,000 in
cash. In addition, the Company paid $234,000 in legal and professional fees
related to the acquisition. Prior to the acquisition date, and subsequent to
March 30, 1998, the Company marketed and sold IBCs under a
distributorship agreement with Sonoco.
The acquisition of the IBC business has been accounted for using
the purchase method of accounting and, accordingly, the purchase price
has been allocated to the assets purchased and liabilities assumed based
upon their fair values at the date of acquisition. The fair values of the
tangible assets acquired and liabilities assumed were $15,677,000 and
$1,234,000, respectively. The excess of the purchase price over the fair
values of the net assets acquired of $23,804,000 has been recorded as
goodwill. The goodwill is being amortized on a straight-line basis over
twenty-five years based on careful consideration regarding the age of the
acquired business, its customers and the risk of obsolescence of its
products.
Pro Forma Information:
The following pro forma (unaudited) information assumes the
CorrChoice joint venture, the IBC business and the previously reported
industrial containers business (acquired from Sonoco on March 30, 1998)
had occurred on November 1, 1997 (Dollars in thousands, except per
share amounts):
<TABLE>
<CAPTION>
Three Months
Ended January 31,
1999 1998
<S> <C> <C>
Net sales $177,583 $191,323
Net income $ 3,312 $ 8,920
Basic and diluted earnings per share:
Class A Common Stock $ 0.12 $ 0.31
Class B Common Stock $ 0.17 $ 0.46
</TABLE>
The above amounts reflect adjustments for the contribution of
Michigan Packaging to the CorrChoice joint venture and recognition of the
Company's equity interest in CorrChoice. In addition, the amounts reflect
adjustments for interest expense related to the debt issued for the
purchases, amortization of goodwill and depreciation expense on the
revalued property, plant and equipment resulting from the acquisition
of the industrial containers business and the IBC business from Sonoco.
The pro forma information, as presented above, is not necessarily
indicative of the results which would have been obtained had the
transactions occurred on November 1, 1997, nor are they necessarily
indicative of future results.
NOTE 7 - RECENT ACCOUNTING STANDARDS
During 1997, the Financial Accounting Standards Board (the "FASB")
issued SFAS No. 130, "Reporting Comprehensive Income", and SFAS No.
131, "Disclosures about Segments of an Enterprise and Related
Information".
SFAS No. 130, which is effective in 1999 for the Company, requires
companies to present comprehensive income in their financial statements.
Comprehensive income is comprised of net income and other charges and
credits to equity that are not the result of transactions with the owners.
Currently, the only item in addition to net income that would be included in
comprehensive income is the cumulative translation adjustment.
Comprehensive income is $4,268,000 and $9,499,000 for the quarter ended
January 31, 1999 and 1998, respectively.
SFAS No. 131, which is effective in 1999 for the Company, requires
that reporting segments be redefined in terms of a company's operating
segments. The impact on the presentation of the Company's segments is
not expected to be significant.
In February 1998, the FASB issued SFAS No. 132, "Employer's
Disclosures about Pensions and Other Postretirement Benefits - an
amendment to FASB Statements No. 87, No. 88 and No. 106", which is
effective in 1999 for the Company. The statement requires the Company to
revise disclosures about pension and other postretirement benefit plans.
SFAS No. 132 will not affect the Company's results of operations, however,
the impact on the presentation of the Company's Notes to Consolidated
Financial Statements has not been determined.
In June 1998, the FASB issued SFAS No. 133, "Accounting for
Derivative Instruments and Hedging Activities", which is effective in 2000
for the Company. The statement requires that all derivatives be recorded in
the balance sheet as either assets or liabilities and be measured at fair
value. The accounting for changes in fair value of a derivative depends on
the intended use of the derivative and the resulting designation. The
Company has not determined what impact SFAS No. 133 will have on the
Consolidated Financial Statements.
ITEM 2. 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 periods ended
January 31, 1999 and 1998.
Net sales increased $7.9 million or 4.6% during the current quarter
compared to the previous period.
The Industrial Shipping Containers segment had an increase in net
sales of $36.2 million due primarily to the inclusion of sales related to the
industrial containers business acquired from Sonoco on March 30, 1998.
The increase was partially offset by a decline in general market conditions
that caused the Company's sales volumes to be lower.
The Containerboard segment had a decrease in net sales of $28.3
million due primarily to the change in the method of reporting sales related
to Michigan Packaging. The stock of Michigan Packaging was contributed
to the CorrChoice joint venture on November 1, 1998 (see Note 6 to Item 1
of this Form 10-Q). In the current period, the sales related to Michigan
Packaging have not been included in the Consolidated Financial
Statements. In the prior period, Michigan Packaging had net sales of $27.8
million. The remaining decrease in net sales for the Containerboard
segment is due to lower paper prices which was significantly offset by sales
to Michigan Packaging that are no longer eliminated in the Consolidated
Financial Statements.
The cost of products sold as a percentage of sales increased from
81.4% last period to 83.7% this period. The increase is primarily the result
of the lower sales prices of the Containerboard segment without a
corresponding decrease in the cost of products sold.
The increase of $6.2 million in selling, general and administrative
expense includes additional selling, general and administrative
expenses related to the industrial containers business acquired from
Sonoco on March 31, 1998 as well as certain increased expenses in support
of Company initiatives. In addition, contributing to the higher costs
were $1.0 million of amortization expense related to goodwill for the
acquisitions, $1.0 million of Year 2000 remediation costs that will not
be capitalized and $0.5 million commitment fee related to the Company's
revolving credit facility.
The increase in interest expense is due to the higher average debt of
$238.8 million during the first quarter of 1999 as compared to $52.3 million
during the first quarter of 1998. The higher level of debt is a result funds
borrowed for of the acquisition of the industrial containers business and
the IBC business from Sonoco on March 30, 1998 and January 11, 1999,
respectively. The increase is partially offset by a lower average interest
rate on the Company's debt in the current period as compared to the comparable
period in the prior year.
In the current period, the equity in earnings of affiliate represents the
Company's share of CorrChoice's net income in the current quarter. Due to
a restatement of prior periods, the amount during the first quarter of 1998
represents the Company's share of Ohio Packaging's net income. Ohio
Packaging and Michigan Packaging were combined into the CorrChoice
joint venture during the first quarter of 1999. Therefore, the amounts
reflected in the periods presented are not comparable due to the different
entities and ownership interests of the Company (see Note 6 to Item 1 of
this Form 10-Q).
LIQUIDITY AND CAPITAL RESOURCES
As reflected by the Consolidated Balance Sheet, elsewhere in this
report and discussed in greater detail in the 1998 Annual Report, the
Company is dedicated to maintaining a strong financial position. It is the
Company's belief that this dedication is extremely important during all
economic times.
As discussed in the 1998 Annual Report, the Company is subject to
the economic conditions of the market in which it operates. During this
period, the Company has been able to utilize its financial strength to meet
its continued business needs.
The current ratio of 2.3:1 as of January 31, 1999 is an indication of
the Company's continued dedication to strong liquidity.
Capital expenditures were $8.4 million during the three months
ended January 31, 1999. These capital expenditures were principally
needed to replace and improve equipment.
On November 1, 1998, the Company entered into a Joint Venture
Agreement to form CorrChoice (see Note 6 to Item 1 of this Form 10-Q).
The Company was not required to commit any additional capital resources
to fund the joint venture. The joint venture is expected to be self-
supporting.
On January 11, 1999, the Company acquired the IBC business from
Sonoco for approximately $38 million in cash borrowed against the
Company's revolving credit facility (see Note 6 to Item 1 of this Form 10-Q).
The IBC business includes one location in Lavonia, Georgia.
The decrease in accounts receivable, inventories and fixed assets
are due primarily to the contribution of Michigan Packaging to the
CorrChoice joint venture during the first quarter of 1999.
The investment in affiliate balance represents the Company's
investment in the CorrChoice joint venture based upon the equity method
of accounting.
Goodwill increased as a result of the IBC acquisition on January 11,
1999 offset by the current period amortization expense.
During 1997, the Company embarked on a program to implement a
management information system. The purpose of the management
information system is to focus on using information technology to link
operations in order to become a low cost producer and more effectively
service the Company's customers. The ultimate cost of this project is
dependent upon management's final determination of the locations, timing
and extent of integration of the new management information system. As of
January 31, 1999, the Company has spent approximately $15 million
towards the project.
In addition to the management information system, as described
above, the Company has approved future purchases of approximately $53
million. These purchases are primarily to replace and improve properties,
plants and equipment.
See "Year 2000 Matters" for a discussion of costs related to
becoming year 2000 compliant.
Borrowing and self-financing have been the primary sources for past
capital expenditures and acquisitions. The Company anticipates financing
future capital expenditures in a like manner and believes that it will have
adequate funds available for its planned expenditures.
YEAR 2000 MATTERS
Historically, certain information technology ("IT") systems of the
Company have used two digits rather than four digits to define that
applicable year, which could result in recognizing a date using "00" as the
year 1900 rather than the year 2000. IT systems include computer software
and hardware in the mainframe, midrange and desktop environments as
well as telecommunications. Additionally, the impact of the problem
extends to non-IT systems, such as automated plant systems and
instrumentation. The Year 2000 issues could result in major failures or
misclassifications.
The Company is actively assessing the Year 2000 readiness of its IT
and non-IT systems, and has begun to remediate certain IT systems. In
addition, the Company is in the process of determining the extent to which
the systems of third parties with whom the Company has significant
relationships may be vulnerable to Year 2000 issues and what impact, if
any, these Year 2000 issues will have on the Company. As part of these
assessments, a compliance plan, which includes the formation of a
steering committee and a timetable for identifying, evaluating, resolving
and testing its Year 2000 issues, has been developed. The steering
committee includes members of the Company's senior management and
internal audit department to ensure that the issues are adequately
addressed and completed in a timely manner.
The timetable provides for the Company's completion of its
remediation of any Year 2000 issues by the end of 1999. During the first
quarter of 1999, the Company completed the inventory of its IT and non-IT
systems. According to the compliance plan, the assessment phase related
to the Company's IT and non-IT systems is expected to be complete by the
end of the second quarter of 1999. Further, corrections and testing of
critical Year 2000 issues are expected to be complete by the end of the
third quarter of 1999. For non-critical Year 2000 issues, corrections and
testing are expected to be complete by the end of the fourth quarter of
1999.
While it is difficult, at present, to fully quantify the overall
cost of this work, the Company currently estimates its total spending for
Year 2000 remediation efforts to be approximately $6 million to $10 million.
The range is a function of ongoing evaluation as to whether certain systems and
equipment will be corrected or replaced, which is largely dependent on
information to be obtained from suppliers or other external sources. This
amount will primarily be expended during 1999. Internal and external costs
for system maintenance and modification are expensed as incurred while
spending for new hardware, software or equipment will be capitalized and
depreciated over the assets' useful lives. The Company anticipates funding
its Year 2000 expenditures out of its cash flows from operations. As of
January 31, 1999, approximately $1.6 million has been spent related to this
effort.
The Company anticipates timely completion of its Year 2000
remediation. However, if the Company does not become Year 2000
compliant on a timely basis, there could be adverse financial and
operational effects on the Company. The amount of these effects can not
be ascertained at this time.
The Year 2000 steering committee is continuously reviewing the
status of the Company's remediation efforts and, as a necessary part of the
compliance plan discussed above, a contingency plan will be created
during 1999. The plan will address alternative solutions to the Company's
Year 2000 issues.
RECENT ACCOUNTING STANDARDS
For recent accounting standards, see Note 7 to the Consolidated
Financial Statements.
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995
Except for historical information, all other statements made in
this Form 10-Q are "forward-looking" within the meaning of the Private
Securities Litigation Reform Act of 1995. Such forward-looking statements
are subject to certain risks and uncertainties that could cause the
Company's actual results to differ materially from those projected. Such
risks and uncertainties that might cause a difference include, but are not
limited to, changes in general business and economic conditions, capacity
levels in the containerboard market, competitive pricing pressures, in
particular with respect to the price of paper, competition within the
Company's business segments, the Company's ability to achieve Year 2000
compliance, litigation or claims against the Company pertaining to
environmental, product liability and safety and health matters, risks
associated with the Company's acquisition strategy, in particular the
Company's ability to locate and acquire other businesses, the Company's
ability to integrate its newly acquired operations effectively with its
existing businesses, the Company's ability to achieve improved operating
efficiencies and capabilities sufficient to offset consolidation expenses
and the frequency and volume of sales of the Company's timber and
timberlands. These and other risks and uncertainties that could materially
effect the financial results of the Company are further discussed in the
Company's Annual Report on Form 10-K for the year ended October 31,
1998.
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(a.) The Company held its Annual Meeting of Stockholders on
February 23, 1999.
(b.) At the Annual Meeting of Stockholders, the following
nominees were elected to the Board of Directors. The
inspectors of election certified the following vote tabulations:
For Withheld
Charles R. Chandler 10,842,456 1,159,337
Michael H. Dempsey 10,842,456 1,159,337
Naomi C. Dempsey 10,842,456 1,159,337
Michael J. Gasser 10,842,456 1,159,337
Daniel J. Gunsett 10,842,456 1,159,337
Robert C. Macauley 10,842,456 1,159,337
David J. Olderman 10,842,456 1,159,337
William B. Sparks, Jr. 10,842,456 1,159,337
J Maurice Struchen* 10,842,456 1,159,337
* Mr. Struchen passed away during March 1999.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a.) Exhibits.
Exhibit Number Description
27 Financial Data Schedule (contained herein)
(b.) Reports on Form 8-K.
On November 13, 1998, the Company filed a Current Report on
Form 8-K that described a Joint Venture Agreement that had
been signed on November 1, 1998. The Joint Venture
Agreement provides for the consolidation of the business
operations of Michigan Packaging Company and Ohio
Packaging Corporation into a new company named
CorrChoice, Inc.
On December 16, 1998, the Company filed a Current Report on
Form 8-K that described a letter of intent to exchange the
Company's spiral core business in Canada for a 49% equity
interest in Abzac's fibre drum business in France.
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 thereto duly authorized.
Greif Bros. Corporation
(Registrant)
Date: March 15, 1999 /s/ Joseph W. Reed
Joseph W. Reed
Chief Financial Officer and Secretary
(Duly Authorized Signatory)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary information extracted from the Form 10-Q and is
qualified in its entirety by reference to such Form 10-Q.
</LEGEND>
<RESTATED>
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 3-MOS
<FISCAL-YEAR-END> OCT-31-1999 OCT-31-1998
<PERIOD-END> JAN-31-1999 JAN-31-1998
<CASH> 13,545 41,329
<SECURITIES> 5,333 6,654
<RECEIVABLES> 99,676 116,849
<ALLOWANCES> (3,043) (2,918)
<INVENTORY> 53,709 64,851
<CURRENT-ASSETS> 196,683 356,746
<PP&E> 662,228 709,481
<DEPRECIATION> (266,569) (287,936)
<TOTAL-ASSETS> 877,975 878,420
<CURRENT-LIABILITIES> 86,058 98,235
<BONDS> 250,000 235,000
0 0
0 0
<COMMON> 9,936 9,936
<OTHER-SE> 451,085 450,166
<TOTAL-LIABILITY-AND-EQUITY> 877,975 877,975
<SALES> 177,583 169,697
<TOTAL-REVENUES> 181,978 174,994
<CGS> 148,589 138,177
<TOTAL-COSTS> 148,589 138,177
<OTHER-EXPENSES> 26,516 20,324
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 3,865 1,230
<INCOME-PRETAX> 3,008 15,263
<INCOME-TAX> 1,147 5,647
<INCOME-CONTINUING> 18,861 9,616
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 3,681<F1> 10,857<F1>
<EPS-PRIMARY> 0.13<F2> 0.38<F2>
<EPS-DILUTED> 0.13<F2> 0.38<F2>
<FN>
<F1>Net income includes "income in earnings of affiliate" in the amount of
$1,820,000 and $1,241,000 for 1999 and 1998, respectively.
<F2>Amount represents the basic and diluted earnings per share for the Class A
Common Stock. The basic and diluted earnings per share for the Class B Common
Stock are $0.19 and $0.56 for 1999 and 1998, respectively.
</FN>
</TABLE>
