-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Pe9d6WRMUAfn+l3w4JILJ0yR+h9uMPDYUlSj4peLe3m8KQnngH5h5XVmX3a0Dyag JqsFtew3QCb/tIZafCrAgw== 0000043920-98-000004.txt : 19980302 0000043920-98-000004.hdr.sgml : 19980302 ACCESSION NUMBER: 0000043920-98-000004 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19980131 FILED AS OF DATE: 19980227 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: GREIF BROTHERS CORP CENTRAL INDEX KEY: 0000043920 STANDARD INDUSTRIAL CLASSIFICATION: PAPERBOARD CONTAINERS & BOXES [2650] IRS NUMBER: 314388903 STATE OF INCORPORATION: DE FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-00566 FILM NUMBER: 98552125 BUSINESS ADDRESS: STREET 1: 621 PENNSYLVANIA AVE CITY: DELAWARE STATE: OH ZIP: 43015 BUSINESS PHONE: 6143631271 MAIL ADDRESS: STREET 1: 621 PENNSYLVANIA AVE CITY: DELAWARE STATE: OH ZIP: 43015 FORMER COMPANY: FORMER CONFORMED NAME: GREIF BROTHERS COOPERAGE CORP DATE OF NAME CHANGE: 19690820 10-Q 1 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, 1998 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 10,902,272 shares Class B Common Stock 12,001,793 shares EX-99.FINANCIAL 2 PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS GREIF BROS. CORPORATION AND SUBSIDIARY COMPANIES CONSOLIDATED STATEMENTS OF INCOME (Dollars in thousands, except per share amounts)
For the three months ended January 31, 1998 1997 Net sales $169,697 $152,370 Other income: Gain on timber sales 2,787 1,539 Interest and other 2,510 2,467 174,994 156,376 Costs and expenses (including depreciation of $8,374 in 1998 and $7,594 in 1997): Cost of products sold 138,177 131,329 Selling, general and administrative 20,324 17,212 Interest 1,230 750 159,731 149,291 Income before income taxes 15,263 7,085 Taxes on income 5,647 2,600 Net income $ 9,616 $ 4,485 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. Basic and Diluted: Class A Common Stock $0.39 $0.14 Class B Common Stock $0.44 $0.25 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 in the retained earnings. See accompanying Notes to Consolidated Financial Statements
GREIF BROS. CORPORATION AND SUBSIDIARY COMPANIES CONSOLIDATED BALANCE SHEETS (Dollars in thousands) ASSETS
January 31, October 31, 1998 1997 CURRENT ASSETS Cash and cash equivalents $ 16,834 $ 17,719 Canadian government securities 7,305 7,533 Trade accounts receivable - less allowance of $965 for doubtful items ($847 in 1997) 80,559 81,582 Inventories 46,040 44,892 Prepaid expenses and other 20,054 21,192 Total current assets 170,792 172,918 LONG TERM ASSETS Cash surrender value of life insurance 1,040 1,070 Goodwill - less amortization 17,017 17,352 Other long term assets 20,501 20,952 38,558 39,374 PROPERTIES, PLANTS AND EQUIPMENT - at cost Timber properties - less depletion 6,898 6,884 Land 11,473 11,139 Buildings 139,626 139,713 Machinery, equipment, etc. 431,525 424,177 Construction in progress 20,269 17,546 Less accumulated depreciation (269,663) (261,662) 340,128 337,797 $549,478 $550,089 LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable $ 31,701 $ 37,487 Current portion of long term obligations 8,309 8,504 Accrued payrolls and employee benefits 10,705 13,821 Taxes on income 4,409 596 Total current liabilities 55,124 60,408 LONG TERM OBLIGATIONS 43,314 43,648 OTHER LONG TERM OBLIGATIONS 15,329 16,155 DEFERRED INCOME TAXES 30,619 29,740 Total long term liabilities 89,262 89,543 SHAREHOLDERS' EQUITY (Note 1) Capital stock, without par value 9,774 9,739 Class A Common Stock: Authorized 32,000,000 shares; Issued 21,140,960 shares; outstanding 10,902,272 shares (10,900,672 in 1997) Class B Common Stock: Authorized and issued 17,280,000 shares; outstanding 12,001,793 shares Treasury Stock, at cost (41,866) (41,868) Class A Common Stock :10,238,688 shares (10,240,288 in 1997) Class B Common Stock : 5,278,207 shares Retained earnings 443,825 437,550 Cumulative translation adjustment (6,641) (5,283) 405,092 400,138 $549,478 $550,089 See accompanying Notes to Consolidated Financial Statements
GREIF BROS. CORPORATION AND SUBSIDIARY COMPANIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in thousands)
For the three months ended January 31, 1998 1997 Cash flows from operating activities: Net income $ 9,616 $ 4,485 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation, depletion and amortization 8,709 7,986 Deferred income taxes 892 1,325 Increase (decrease) in cash from changes in certain assets and liabilities, net of effects from acquisitions: Trade accounts receivable 1,023 5,233 Inventories (1,148) (576) Prepaid expenses and other 1,138 253 Other long term assets 481 (255) Accounts payable (5,786) (7,232) Accrued payrolls and employee benefits (3,116) (2,659) Taxes on income 3,813 (451) Other long term liabilities (826) (901) Net cash provided by operating activities 14,796 7,208 Cash flows from investing activities: Acquisitions of companies, net of cash acquired -- 134 Disposals of investments in government securities 228 206 Purchases of properties, plants and equipment (11,005) (15,354) Net cash used by investing activities (10,777) (15,014) Cash flows from financing activities: (Payments) proceeds on long term debt (529) 10,307 Exercise of stock options 37 -- Dividends paid (3,341) (6,810) Net cash (used in) provided by financing activities (3,833) 3,497 Foreign currency translation adjustment (1,071) (203) Net decrease in cash and cash equivalents (885) (4,512) Cash and cash equivalents at beginning of period 17,719 26,560 Cash and cash equivalents at end of period $ 16,834 $ 22,048 See accompanying Notes to Consolidated Financial Statements
GREIF BROS. CORPORATION AND SUBSIDIARY COMPANIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JANUARY 31, 1998 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 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 2 - DIVIDENDS PER SHARE The following dividends per share were paid during the period indicated:
Three Months Ended January 31, 1998 1997 Class A Common Stock $0.12 $0.24 Class B Common Stock $0.17 $0.35
NOTE 3 - CALCULATION OF NET INCOME PER SHARE Net income per share was calculated using the following number of shares for the period presented:
Three months ended January 31, 1998: Basic Diluted Class A Common Stock 10,901,962 shares 10,950,796 shares Class B Common Stock 12,001,793 shares 12,001,793 shares Three months ended January 31, 1997: Basic Diluted Class A Common Stock 10,873,172 shares 10,889,792 shares Class B Common Stock 12,001,793 shares 12,001,793 shares The diluted shares assume conversion of stock options. There are 164,100 options that are antidilutive for the three months ended January 31, 1997.
NOTE 4 - 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 5 - RECLASSIFICATIONS Certain prior period amounts have been reclassified to conform to the 1998 presentation. 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, 1998 and January 31, 1997. Net sales increased $17.3 million or 11.4% during the current quarter compared to the previous period. The net sales of the containerboard segment increased by $15.2 million in comparison to the prior year's quarter. This increase was primarily the result of $12.3 million higher net sales in the paper mills, which was significantly affected by the improved sales prices of its products. The higher sales prices were caused by the overall improvement of the containerboard market. In addition, the purchase of Independent Container, Inc. and Centralia Container, Inc. in May 1997 and June 1997, respectively, contributed $9.8 million in net sales as a result of the additional sales volume. These increases were partially offset by the disposal of the Company's wood components plants, with prior year first quarter net sales of $10.7 million, in Kentucky, California, Washington and Oregon in August 1997. The net sales of the industrial shipping containers segment increased by $ 2.1 million in comparison to the prior year's quarter. Net sales increased due to the purchase of two steel drum operations located in Merced, California and Oakville, Ontario, Canada during March 1997 which contributed $4.6 million of net sales. The increase that resulted from this acquisition was partially offset by the sale of an injection molding facility, with prior year first quarter net sales of $2.9 million, located in Ohio during February 1997. Other income increased in 1998 due to $1.2 million of additional sales of timber properties. The cost of products sold as a percentage of sales decreased from 86.2% last year to 81.4% this year. This decrease is primarily the result of higher net sales of the containerboard segment without a corresponding increase in the cost of products sold. The increase of $3.1 million in selling, general and administrative expense is due primarily to additional expenses related to the acquisitions in March, May and June of last year. In addition, the amortization of goodwill for these acquisitions contributed to the higher costs. The increase in interest expense is due to the higher average debt during the first quarter of fiscal 1998 as compared to the prior year. Liquidity and Capital Resources As indicated in the Consolidated Balance Sheet, elsewhere in this report and discussed in greater detail in the 1997 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 1997 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 developed financial position to meet its continued business needs. The current ratio of 3.0:1 as of January 31, 1998 is an indication of the Company's continued dedication to strong liquidity. Capital expenditures were $11 million during the three months ended January 31, 1998. These capital expenditures were principally needed to replace and improve equipment. On December 10, 1997, the Company signed a non-binding letter of intent to acquire all of the outstanding shares of KMI Continental Fibre Drum, Inc., Fibro Tambor, S.A. de C.V., and Sonoco Plastic Drum, Inc. from Sonoco Products Co. and their interest in Total Packaging Systems of Georgia, LLC for approximately $225 million in cash. The acquisition is subject to satisfactory completion of due diligence by the Company and receipt of all governmental approvals. In addition, the Company has approved future purchases, primarily for equipment, of approximately $10 million. The Company has embarked on a program to implement a new management information system. The estimated cost of the project is approximately $20 million and is expected to be completed during 1999. The purpose of the program focuses on using information technology to link together our operations to become a low cost producer and more effectively service our customers. As a result of this undertaking, the Company believes that its year 2000 compliance matters will be addressed since most of its current software will be discarded. Self-financing and borrowing have been the primary sources for past capital expenditures and acquisitions. The Company anticipates financing future capital expenditures and acquisitions in a like manner. SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 Except for the historical information contained herein, the matters discussed in this Form 10-Q contain certain forward-looking statements which involve risks and uncertainties, including, but not limited to economic, competitive, governmental and technological factors affecting the Company's operations, markets, services and related products, prices and other factors discussed in the Company's filings with the Securities and Exchange Commission. The Company's actual results could differ materially from those projected in such forward-looking statements. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Not applicable at this time. EX-99.OTHER 3 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, 1998. (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 10,551,162 1,450,631 Michael H. Dempsey 10,551,162 1,450,631 Naomi C. Dempsey 10,551,162 1,450,631 Michael J. Gasser 10,551,162 1,450,631 Daniel J. Gunsett 10,551,162 1,450,631 Allan Hull 10,542,682 1,459,111 Robert C. Macauley 10,542,682 1,459,111 David J. Olderman 10,551,162 1,450,631 William B. Sparks, Jr. 10,551,162 1,450,631 J Maurice Struchen 10,542,682 1,459,111 (c.) At the Annual Meeting of Stockholders, a proposed Amendment and Restatement of the Company's Certificate of Incorporation to eliminate outdated provisions and simplify and update certain other provisions was approved by the stockholders. The inspectors of election certified the following vote tabulations: For Against Abstain 10,554,813 2,000 1,444,980 ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a.) Exhibits. 27. Financial Data Schedule (b.) Reports on Form 8-K. On December 10, 1997, the Company filed a Current Report on Form 8-K that described its non-binding letter of intent to acquire all of the outstanding shares of KMI Continental Fibre Drum, Inc., a Delaware corporation, Fibro Tambor, S.A. de C.V., a Mexican corporation, and Sonoco Plastic Drum, Inc., an Illinois corporation, all of which are wholly-owned subsidiaries of Sonoco Products Co. ("Sonoco"). In addition, the Company would purchase Sonoco's interest in Total Packaging Systems of Georgia, LLC, a Delaware limited liability company. 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, 1998, the consolidated statement of income for the three month periods ended January 31, 1998 and 1997, and the consolidated statement of cash flows for the three month periods then ended. These financial statements are unaudited; however, at year-end an audit will be performed for the fiscal year by 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 thereto duly authorized. Greif Bros. Corporation ______________________________ (Registrant) Date February 27, 1998 /s/ Joseph W. Reed ______________________________ Joseph W. Reed Chief Financial Officer and Secretary (Duly Authorized Signatory)
EX-27 4
5 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. 1,000 3-MOS OCT-31-1998 JAN-31-1998 16,834 7,305 81,524 (965) 46,040 170,792 609,791 (269,663) 549,478 55,124 43,314 0 0 9,774 395,318 549,478 169,697 174,994 138,177 138,177 20,324 0 1,230 15,263 5,647 9,616 0 0 0 9,616 .39 .39 Amount represents the earnings per share for the Class A Common Stock. The earnings per share for the Class B Common Stock are $0.44.
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