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, 2003
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 incorporation or organization) |
(I.R.S. Employer Identification No.) |
| 425 Winter Road, Delaware, Ohio |
43015 | |
| (Address of principal executive offices) |
(Zip Code) |
(740) 549-6000
Registrant’s telephone number, including area code
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 by check mark whether the registrant is an accelerated filer (as defined in Rule12b-2 of the Exchange Act). 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 |
10,570,846 shares | |
| Class B Common Stock |
11,724,403 shares |
PART I. FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS
GREIF BROS. CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(Dollars in thousands, except per share amounts)
| Three months ended January 31, | |||||||
| 2003 |
2002 | ||||||
| Net sales |
$ |
386,423 |
|
$ |
365,190 | ||
| Cost of products sold |
|
319,067 |
|
|
297,104 | ||
| Gross profit |
|
67,356 |
|
|
68,086 | ||
| Selling, general and administrative expenses |
|
56,164 |
|
|
56,908 | ||
| Restructuring charge |
|
1,539 |
|
|
— | ||
| Operating profit |
|
9,653 |
|
|
11,178 | ||
| Interest expense, net |
|
13,757 |
|
|
13,868 | ||
| Gain on sale of timberland |
|
396 |
|
|
3,328 | ||
| Other income (expense), net |
|
(222 |
) |
|
3,339 | ||
| Income (loss) before income tax expense (benefit) and equity in earnings of affiliates and minority interests |
|
(3,930 |
) |
|
3,977 | ||
| Income tax expense (benefit) |
|
(1,415 |
) |
|
1,432 | ||
| Equity in earnings of affiliates and minority interests |
|
1,957 |
|
|
1,261 | ||
| Income (loss) before cumulative effect of change in accounting principle |
|
(558 |
) |
|
3,806 | ||
| Cumulative effect of change in accounting principle |
|
4,822 |
|
|
— | ||
| Net income |
$ |
4,264 |
|
$ |
3,806 | ||
| Basic and diluted earnings per share: |
|||||||
| Class A Common Stock (before cumulative effect) |
$ |
(0.02 |
) |
$ |
0.14 | ||
| Class A Common Stock (after cumulative effect) |
$ |
0.16 |
|
$ |
0.14 | ||
| Class B Common Stock (before cumulative effect) |
$ |
(0.03 |
) |
$ |
0.20 | ||
| Class B Common Stock (after cumulative effect) |
$ |
0.22 |
|
$ |
0.20 | ||
See accompanying Notes to Consolidated Financial Statements
2
GREIF BROS. CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
ASSETS
| January 31, |
October 31, |
|||||||
| 2003 |
2002 |
|||||||
| (Unaudited) |
||||||||
| Current assets |
||||||||
| Cash and cash equivalents |
$ |
19,302 |
|
$ |
25,396 |
| ||
| Trade accounts receivable – less allowance of $10,057 in 2003 and $9,857 in 2002 |
|
240,427 |
|
|
274,222 |
| ||
| Inventories |
|
154,318 |
|
|
144,320 |
| ||
| Net assets held for sale |
|
13,192 |
|
|
13,945 |
| ||
| Deferred tax assets |
|
3,182 |
|
|
3,652 |
| ||
| Prepaid expenses and other |
|
43,197 |
|
|
48,286 |
| ||
|
|
473,618 |
|
|
509,821 |
| |||
| Long-term assets |
||||||||
| Goodwill – less accumulated amortization |
|
231,800 |
|
|
232,577 |
| ||
| Other intangible assets – less accumulated amortization |
|
28,155 |
|
|
28,999 |
| ||
| Investment in affiliates |
|
147,965 |
|
|
149,820 |
| ||
| Other long-term assets |
|
45,207 |
|
|
45,060 |
| ||
|
|
453,127 |
|
|
456,456 |
| |||
| Properties, plants and equipment |
||||||||
| Timber properties – less depletion |
|
83,551 |
|
|
81,380 |
| ||
| Land |
|
88,371 |
|
|
84,271 |
| ||
| Buildings |
|
251,911 |
|
|
244,967 |
| ||
| Machinery and equipment |
|
760,085 |
|
|
748,184 |
| ||
| Capital projects in progress |
|
22,153 |
|
|
26,042 |
| ||
|
|
1,206,071 |
|
|
1,184,844 |
| |||
| Accumulated depreciation |
|
(409,008 |
) |
|
(392,826 |
) | ||
|
|
797,063 |
|
|
792,018 |
| |||
| $ |
1,723,808 |
|
$ |
1,758,295 |
| |||
See accompanying Notes to Consolidated Financial Statements
3
GREIF BROS. CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
LIABILITIES AND SHAREHOLDERS’ EQUITY
| January 31, |
October 31, |
|||||||
| 2003 |
2002 |
|||||||
| (Unaudited) |
||||||||
| Current liabilities |
||||||||
| Accounts payable |
$ |
114,204 |
|
$ |
135,192 |
| ||
| Accrued payroll and employee benefits |
|
31,848 |
|
|
48,974 |
| ||
| Restructuring reserves |
|
2,781 |
|
|
2,300 |
| ||
| Short-term borrowings |
|
23,527 |
|
|
20,005 |
| ||
| Current portion of long-term debt |
|
3,000 |
|
|
3,000 |
| ||
| Other current liabilities |
|
64,998 |
|
|
72,101 |
| ||
|
|
240,358 |
|
|
281,572 |
| |||
| Long-term liabilities |
||||||||
| Long-term debt |
|
643,545 |
|
|
629,982 |
| ||
| Deferred tax liabilities |
|
138,874 |
|
|
135,577 |
| ||
| Postretirement benefit liability |
|
49,366 |
|
|
47,131 |
| ||
| Other long-term liabilities |
|
83,698 |
|
|
93,559 |
| ||
|
|
915,483 |
|
|
906,249 |
| |||
| Minority interest |
|
1,353 |
|
|
1,345 |
| ||
| Shareholders’ equity |
||||||||
| Common stock, without par value |
|
12,147 |
|
|
11,974 |
| ||
| Treasury stock, at cost |
|
(62,143 |
) |
|
(61,130 |
) | ||
| Retained earnings |
|
687,634 |
|
|
687,204 |
| ||
| Accumulated other comprehensive loss: |
||||||||
| - foreign currency translation |
|
(35,971 |
) |
|
(33,726 |
) | ||
| - interest rate derivatives |
|
(15,461 |
) |
|
(15,601 |
) | ||
| - minimum pension liability |
|
(19,592 |
) |
|
(19,592 |
) | ||
|
|
566,614 |
|
|
569,129 |
| |||
| $ |
1,723,808 |
|
$ |
1,758,295 |
| |||
See accompanying Notes to Consolidated Financial Statements
4
GREIF BROS. CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(Dollars in thousands)
| For the three months ended January 31, |
2003 |
2002 |
||||||
| Cash flows from operating activities: |
||||||||
| Net income |
$ |
4,264 |
|
$ |
3,806 |
| ||
| Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||
| Depreciation, depletion and amortization |
|
21,240 |
|
|
23,985 |
| ||
| Equity in earnings of affiliates and minority interests, net of dividends received |
|
2,036 |
|
|
1,036 |
| ||
| Deferred income taxes |
|
3,868 |
|
|
(1,165 |
) | ||
| Gain on disposals of properties, plants and equipment |
|
(221 |
) |
|
(4,838 |
) | ||
| Cumulative effect of change in accounting principle |
|
(4,822 |
) |
|
— |
| ||
| Other, net |
|
(11,388 |
) |
|
(7,377 |
) | ||
| Changes in current assets and liabilities |
|
(18,697 |
) |
|
13,040 |
| ||
| Net cash (used in) provided by operating activities |
|
(3,720 |
) |
|
28,487 |
| ||