Press Release
Greif Reports Fourth Quarter and Fiscal 2022 Results
Fourth Quarter Results Include (all results compared to the fourth quarter 2021 unless otherwise noted):
- Net income of
$99.5 million or$1.67 per diluted Class A share compared to net income of$104.5 million or$1.74 per diluted Class A share. Net income, excluding the impact of adjustments(1), of$109.0 million or$1.83 per diluted Class A share compared to net income, excluding the impact of adjustments, of$115.4 million or$1.93 per diluted Class A share. - Adjusted EBITDA(2) of
$218.7 million , an increase of$7.4 million compared to Adjusted EBITDA of$211.3 million . - Net cash provided by operating activities increased by
$149.3 million to$286.6 million . Adjusted free cash flow(3) increased by$139.7 million to a single quarter record of$234.5 million . - Total debt decreased by
$309.5 million to$1,916.1 million . Net debt(4) decreased by$332.0 million to$1,769.0 million . The Company's leverage ratio(5) decreased to 1.73x from 1.99x sequentially, which is below our targeted leverage ratio range of 2.0x - 2.5x, and from 2.49x in the prior year quarter.
Fiscal Year Results Include (all results compared to the fiscal year 2021 unless otherwise noted):
- Net income of
$376.7 million or$6.30 per diluted Class A share compared to net income of$390.7 million or$6.54 per diluted Class A share. Net income, excluding the impact of adjustments, of$471.2 million or$7.87 per diluted Class A share compared to net income, excluding the impact of adjustments, of$334.5 million or$5.60 per diluted Class A share. - Adjusted EBITDA of
$917.5 million , an increase of$153.3 million compared to Adjusted EBITDA of$764.2 million . - Net cash provided by operating activities increased by
$261.5 million to$657.5 million . Adjusted free cash flow increased by$232.2 million to a full year record of$506.3 million . - The Company paid
$111.3 million in cash dividends to stockholders in fiscal 2022.
Strategic Actions and Announcements
- Announced acquisition of
Lee Container Corporation, Inc. a leader in the North American blow molded jerrycan industry in an all-cash transaction for$300.0 million , subject to customary closing conditions including regulatory clearances and before taking into consideration tax benefits with an estimated net present value of approximately$30.0 million . - Repurchased approximately
$11.0 million of Class B shares under the existing open market share repurchase program during the quarter.
CEO Commentary
"I am extremely proud of the results our colleagues delivered in 2022. This year has easily been the most successful in financial terms in Greif's history, highlighted by our free cash flow generation of over
Build to Last Mission Progress
Customer satisfaction surveys are a key component of our mission to deliver Legendary Customer Service. Our long-term objective is a trailing twelve-month CSI(6) score of 95.0 or greater. Our consolidated CSI score was 93.8 at the end of the fourth quarter 2022, as compared to 92.2 in the prior year. CSI for the
In addition, during the quarter we completed our twelfth NPS(7) survey and achieved a score of 65.0, representing a five point improvement from our prior year survey. This result during a period of substantial economic volatility demonstrates the value of Greif's customer service culture to sustain strong business relationships through the business cycle. The Company is proud of this result, and will continue to drive high quality customer engagement that advances our mission to Legendary Customer Service.
Creating a leading diversity, equity, and inclusion culture is a core component of our mission to Create Thriving Communities and is essential to the Company's thought leadership and winning the war for talent. During the fourth quarter, the Company launched two new Colleague Resource Groups ("CRGs"), for a total of six CRGs, in an effort to further develop this leadership. During the quarter, our thriving internal culture was recognized by Newsweek, which ranked the Company #58 on its 2022 America's Most Loved Workplaces publication.
Continuing to progress on the mission to Protect our Future, the Company expects to release our science-aligned 2030 sustainability targets before the end of the calendar year. Once released, these targets will be available at our sustainability page at https://www.greif.com/sustainability. During the quarter the Company received various accolades for sustainability leadership including: an AA ESG rating by MSCI, a Gold EcoVadis ranking, and #49 ranking on the Investor's Business Daily Top 100 Best ESG Companies.
(1) |
Adjustments that are excluded from net income before adjustments and from earnings per diluted Class A share before adjustments are restructuring charges, acquisition and integration related costs, non-cash asset impairment charges, non-cash pension settlement charges, incremental COVID-19 costs, net, (gain) loss on disposal of properties, plants, equipment and businesses, net. |
(2) |
Adjusted EBITDA is defined as net income, plus interest expense, net, plus debt extinguishment charges, plus income tax expense, plus depreciation, depletion and amortization expense, plus restructuring charges, plus acquisition and integration related costs, plus non-cash asset impairment charges, plus non-cash pension settlement charges, plus incremental COVID-19 costs, net, plus (gain) loss on disposal of properties, plants, equipment and businesses, net, plus timberland gains, net. |
(3) |
Adjusted free cash flow is defined as net cash provided by operating activities, less cash paid for purchases of properties, plants and equipment, plus cash paid for acquisition and integration related costs, plus cash paid for incremental COVID-19 costs, net, plus cash paid for integration related Enterprise Resource Planning ("ERP") systems, plus cash proceeds redeployment related to replacement of non-operating corporate asset. |
(4) |
Net debt is defined as total debt less cash and cash equivalents. |
(5) |
Leverage ratio for the periods indicated is defined as net debt divided by trailing twelve month EBITDA, each as calculated under the terms of the Company's Second Amended and Restated Credit Agreement dated as of |
(6) |
Customer satisfaction index ("CSI") tracks a variety of internal metrics designed to enhance the customer experience in dealing with Greif. |
(7) |
Net Promoter Score ("NPS") is derived from a survey conducted by a third party that measures how likely a customer is to recommend Greif as a business partner. NPS scores are calculated by subtracting the percentage of detractors a business has from the percentage of its promoters. |
Note: A reconciliation of the differences between all non-GAAP financial measures used in this release with the most directly comparable GAAP financial measures is included in the financial schedules that are a part of this release. These non-GAAP financial measures are intended to supplement and should be read together with our financial results. They should not be considered an alternative or substitute for, and should not be considered superior to, our reported financial results. Accordingly, users of this financial information should not place undue reliance on these non-GAAP financial measures.
Segment Results (all results compared to the fourth quarter of 2021 unless otherwise noted)
Net sales are impacted mainly by the volume of primary products(8) sold, selling prices, product mix and the impact of changes in foreign currencies against the
Net Sales Impact - Primary Products |
Global Industrial |
Paper Packaging & |
|
% |
% |
||
Currency Translation |
(6.0) % |
(0.1) % |
|
Volume |
(5.6) % |
(10.4) % |
|
Selling Prices and Product Mix |
6.1 % |
19.0 % |
|
Total Impact of Primary Products |
(5.5) % |
8.5 % |
Net sales decreased by
Gross profit decreased by
Operating profit decreased by
Net sales increased by
Gross profit increased by
Operating profit increased by
Tax Summary
During the fourth quarter, we recorded an income tax rate of 23.9 percent and a tax rate excluding the impact of adjustments of 25.9 percent. As previously disclosed, the application of FIN 18 often causes fluctuations in our quarterly effective tax rates. For the full year, we recorded an income tax rate of 26.1 percent and a tax rate excluding the impact of adjustments of 23.9 percent.
Dividend Summary
On
(8) |
Primary products are manufactured steel, plastic and fibre drums; new and reconditioned intermediate bulk containers; and linerboard, containerboard, corrugated sheets and corrugated containers, boxboard and tube and core products. |
Company Outlook
(in millions, except per share amounts) |
Fiscal 2023 Outlook |
Adjusted EBITDA |
|
Adjusted free cash flow |
|
Note: The range of fiscal 2023 net income guidance, the most directly comparable GAAP financial measure to Adjusted EBITDA is not provided in this release due to the potential for one or more of the following, the timing and magnitude of which we are unable to reliably forecast: gains or losses on the disposal of businesses or properties, plants and equipment, net; non-cash asset impairment charges due to unanticipated changes in the business; restructuring-related activities; non-cash pension settlement (income) charges; and acquisition and integration related costs. No reconciliation of the range of fiscal 2023 Adjusted EBITDA guidance, a non-GAAP financial measure which excludes restructuring charges, acquisition and integration related costs, non-cash asset impairment charges, non-cash pension settlement charges, and (gain) loss on the disposal of properties, plants, equipment and businesses, net, is included in this release because, due to the high variability and difficulty in making accurate forecasts and projections of some of the excluded information, together with some of the excluded information not being ascertainable or accessible, we are unable to quantify certain amounts that would be required to be included in net income, the most directly comparable GAAP financial measure, without unreasonable efforts. A reconciliation of the range of fiscal 2023 adjusted free cash flow guidance to the range of fiscal 2023 forecasted net cash provided by operating activities, the most directly comparable GAAP financial measure, is included in this release.
Conference Call
The Company will host a conference call to discuss the fourth quarter and fiscal 2022 results on
Investor Relations contact information
About Greif
Greif is a global leader in industrial packaging products and services and is pursuing its vision: to be the best performing customer service company in the world. The Company produces steel, plastic and fibre drums, intermediate bulk containers, reconditioned containers, flexible products, containerboard, uncoated recycled paperboard, coated recycled paperboard, tubes and cores and a diverse mix of specialty products. The Company also manufactures packaging accessories and provides filling, packaging and other services for a wide range of industries. In addition, the Company manages timber properties in the southeastern
Forward-Looking Statements
This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The words "may," "will," "expect," "intend," "estimate," "anticipate," "aspiration," "objective," "project," "believe," "continue," "on track" or "target" or the negative thereof and similar expressions, among others, identify forward-looking statements. All forward-looking statements are based on assumptions, expectations and other information currently available to management. Such forward-looking statements are subject to certain risks and uncertainties that could cause the Company's actual results to differ materially from those forecasted, projected or anticipated, whether expressed or implied. The most significant of these risks and uncertainties are described in Part I of the Company's Annual Report on Form 10-K for the fiscal year ended
Although the Company believes that the expectations reflected in forward-looking statements have a reasonable basis, the Company can give no assurance that these expectations will prove to be correct. Forward-looking statements are subject to risks and uncertainties that could cause the Company's actual results to differ materially from those forecasted, projected or anticipated, whether expressed in or implied by the statements. Such risks and uncertainties that might cause a difference include, but are not limited to, the following: (i) historically, our business has been sensitive to changes in general economic or business conditions, (ii) our global operations subject us to political risks, instability and currency exchange that could adversely affect our results of operations, (iii) the current and future challenging global economy and disruption and volatility of the financial and credit markets may adversely affect our business, (iv) the COVID-19 pandemic could continue to impact any combination of our business, financial condition, results of operations and cash flows, (v) the continuing consolidation of our customer base and suppliers may intensify pricing pressure, (vi) we operate in highly competitive industries, (vii) our business is sensitive to changes in industry demands and customer preferences, (viii) raw material, price fluctuations, global supply chain disruptions and increased inflation may adversely impact our results of operations, (ix) energy and transportation price fluctuations and shortages may adversely impact our manufacturing operations and costs, (x) we may not successfully implement our business strategies, including achieving our growth objectives, (xi) we may encounter difficulties or liabilities arising from acquisitions or divestitures, (xii) we may incur additional rationalization costs and there is no guarantee that our efforts to reduce costs will be successful, (xiii) several operations are conducted by joint ventures that we cannot operate solely for our benefit, (xiv) certain of the agreements that govern our joint ventures provide our partners with put or call options, (xv) our ability to attract, develop and retain talented and qualified employees, managers and executives is critical to our success, (xvi) our business may be adversely impacted by work stoppages and other labor relations matters, (xvii) we may be subject to losses that might not be covered in whole or in part by existing insurance reserves or insurance coverage and general insurance premium and deductible increases, (xviii) our business depends on the uninterrupted operations of our facilities, systems and business functions, including our information technology and other business systems, (xix) a security breach of customer, employee, supplier or Company information and data privacy risks and costs of compliance with new regulations may have a material adverse effect on our business, financial condition, results of operations and cash flows, (xx) we could be subject to changes to our tax rates, the adoption of new
The risks described above are not all-inclusive, and given these and other possible risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results. For a detailed discussion of the most significant risks and uncertainties that could cause our actual results to differ materially from those forecasted, projected or anticipated, see "Risk Factors" in Part I, Item 1A of our most recently filed Form 10-K and our other filings with the
All forward-looking statements made in this news release are expressly qualified in their entirety by reference to such risk factors. Except to the limited extent required by applicable law, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
|
|||||||
Three Months Ended |
Twelve Months Ended |
||||||
(in millions, except per share amounts) |
2022 |
2021 |
2022 |
2021 |
|||
Net sales |
$ 1,495.8 |
$ 1,578.2 |
$ 6,349.5 |
$ 5,556.1 |
|||
Cost of products sold |
1,185.7 |
1,282.1 |
5,064.1 |
4,463.1 |
|||
Gross profit |
310.1 |
296.1 |
1,285.4 |
1,093.0 |
|||
Selling, general and administrative expenses |
140.4 |
142.2 |
581.0 |
565.9 |
|||
Restructuring charges |
2.7 |
4.3 |
13.0 |
23.1 |
|||
Acquisition and integration related costs |
2.9 |
2.9 |
8.7 |
9.1 |
|||
Non-cash asset impairment charges |
7.9 |
7.4 |
71.0 |
8.9 |
|||
Gain on disposal of properties, plants and equipment, net |
— |
(2.4) |
(8.1) |
(3.7) |
|||
Loss (gain) on disposal of businesses, net |
2.8 |
0.2 |
(1.4) |
0.2 |
|||
Timberland gains, net |
— |
— |
— |
(95.7) |
|||
Operating profit |
153.4 |
141.5 |
621.2 |
585.2 |
|||
Interest expense, net |
16.9 |
16.9 |
61.2 |
92.7 |
|||
Non-cash pension settlement charges |
— |
0.1 |
— |
9.1 |
|||
Debt extinguishment charges |
— |
— |
25.4 |
— |
|||
Other expense, net |
4.0 |
2.6 |
8.9 |
4.8 |
|||
Income before income tax expense and equity |
132.5 |
121.9 |
525.7 |
478.6 |
|||
Income tax expense |
31.7 |
13.1 |
137.1 |
69.6 |
|||
Equity earnings of unconsolidated affiliates, net of tax |
(1.8) |
(1.1) |
(5.4) |
(4.2) |
|||
Net income |
102.6 |
109.9 |
394.0 |
413.2 |
|||
Net income attributable to noncontrolling interests |
(3.1) |
(5.4) |
(17.3) |
(22.5) |
|||
Net income attributable to |
$ 99.5 |
$ 104.5 |
$ 376.7 |
$ 390.7 |
|||
Basic earnings per share attributable to |
|||||||
Class A common stock |
$ 1.70 |
$ 1.76 |
$ 6.36 |
$ 6.57 |
|||
Class B common stock |
$ 2.55 |
$ 2.63 |
$ 9.53 |
$ 9.84 |
|||
Diluted earnings per share attributable to |
|||||||
Class A common stock |
$ 1.67 |
$ 1.74 |
$ 6.30 |
$ 6.54 |
|||
Class B common stock |
$ 2.55 |
$ 2.63 |
$ 9.53 |
$ 9.84 |
|||
Shares used to calculate basic earnings per share |
|||||||
Class A common stock |
25.6 |
26.6 |
26.3 |
26.5 |
|||
Class B common stock |
22.0 |
22.0 |
22.0 |
22.0 |
|||
Shares used to calculate diluted earnings per share |
|||||||
Class A common stock |
26.3 |
26.7 |
26.6 |
26.7 |
|||
Class B common stock |
22.0 |
22.0 |
22.0 |
22.0 |
|
|||
(in millions) |
|
|
|
ASSETS |
|||
CURRENT ASSETS |
|||
Cash and cash equivalents |
$ 147.1 |
$ 124.6 |
|
Trade accounts receivable |
749.1 |
889.5 |
|
Inventories |
403.3 |
499.2 |
|
Other current assets |
190.3 |
150.8 |
|
1,489.8 |
1,664.1 |
||
LONG-TERM ASSETS |
|||
|
1,464.5 |
1,515.4 |
|
Intangible assets |
576.2 |
648.4 |
|
Operating lease assets |
254.7 |
289.4 |
|
Other long-term assets |
220.1 |
177.3 |
|
2,515.5 |
2,630.5 |
||
PROPERTIES, PLANTS AND EQUIPMENT |
1,455.0 |
1,521.2 |
|
$ 5,460.3 |
$ 5,815.8 |
||
LIABILITIES AND EQUITY |
|||
CURRENT LIABILITIES |
|||
Accounts payable |
$ 561.3 |
$ 704.5 |
|
Short-term borrowings |
5.7 |
50.5 |
|
Current portion of long-term debt |
71.1 |
120.3 |
|
Current portion of operating lease liabilities |
48.9 |
54.0 |
|
Other current liabilities |
360.9 |
384.8 |
|
1,047.9 |
1,314.1 |
||
LONG-TERM LIABILITIES |
|||
Long-term debt |
1,839.3 |
2,054.8 |
|
Operating lease liabilities |
209.4 |
239.5 |
|
Other long-term liabilities |
553.6 |
607.7 |
|
2,602.3 |
2,902.0 |
||
REDEEMABLE NONCONTROLLING INTERESTS |
15.8 |
24.1 |
|
EQUITY |
|||
|
1,761.3 |
1,514.3 |
|
Noncontrolling interests |
33.0 |
61.3 |
|
1,794.3 |
1,575.6 |
||
$ 5,460.3 |
$ 5,815.8 |
|
|||||||
Three Months Ended |
Twelve Months Ended |
||||||
(in millions) |
2022 |
2021 |
2022 |
2021 |
|||
CASH FLOWS FROM OPERATING ACTIVITIES: |
|||||||
Net income |
$ 102.6 |
$ 109.9 |
$ 394.0 |
$ 413.2 |
|||
Depreciation, depletion and amortization |
51.2 |
58.2 |
216.6 |
234.4 |
|||
Asset impairments |
7.9 |
7.4 |
71.0 |
8.9 |
|||
Pension settlement charges |
— |
0.1 |
— |
9.1 |
|||
Timberland gains, net |
— |
— |
— |
(95.7) |
|||
Deferred income tax expense (benefit) |
8.9 |
(5.6) |
3.8 |
(47.2) |
|||
Other non-cash adjustments to net income |
14.1 |
(1.2) |
25.4 |
35.1 |
|||
Debt extinguishment charges |
— |
— |
22.6 |
— |
|||
Operating working capital changes |
90.1 |
(83.9) |
(9.3) |
(222.7) |
|||
Increase (decrease) in cash from changes in other assets and |
11.8 |
52.4 |
(66.6) |
60.9 |
|||
Net cash provided by operating activities |
286.6 |
137.3 |
657.5 |
396.0 |
|||
CASH FLOWS FROM INVESTING ACTIVITIES: |
|||||||
Purchases of properties, plants and equipment |
(64.1) |
(46.5) |
(176.3) |
(140.7) |
|||
Purchases of and investments in timber properties |
(2.1) |
0.8 |
(6.7) |
(6.6) |
|||
Proceeds on the sale of timberlands, net |
— |
— |
— |
145.1 |
|||
Collections of receivables held in special purpose entities |
— |
— |
— |
50.9 |
|||
Payments for issuance of loans receivable |
— |
— |
— |
(15.0) |
|||
Proceeds from the sale of properties, plants and equipment |
3.3 |
6.4 |
159.5 |
18.9 |
|||
Other |
— |
(0.1) |
(4.7) |
(5.8) |
|||
Net cash (used in) provided by investing activities |
(62.9) |
(39.4) |
(28.2) |
46.8 |
|||
CASH FLOWS FROM FINANCING ACTIVITIES: |
|||||||
Payments on long-term debt, net |
(139.7) |
(40.8) |
(289.1) |
(266.0) |
|||
Dividends paid to |
(29.3) |
(27.4) |
(111.3) |
(105.8) |
|||
Payments for liabilities held in special purpose entities |
— |
— |
— |
(43.3) |
|||
Payments for debt extinguishment and issuance costs |
— |
— |
(20.8) |
— |
|||
Payments for share repurchases |
(11.1) |
— |
(71.1) |
— |
|||
Forward contract for accelerated share repurchases |
— |
— |
(15.0) |
— |
|||
Other |
(7.1) |
(0.6) |
(23.7) |
(7.8) |
|||
Net cash used for financing activities |
(187.2) |
(68.8) |
(531.0) |
(422.9) |
|||
Reclassification of cash to assets held for sale |
— |
0.5 |
— |
0.5 |
|||
Effects of exchange rates on cash |
(16.9) |
(4.8) |
(75.8) |
(1.7) |
|||
Net increase in cash and cash equivalents |
19.6 |
24.8 |
22.5 |
18.7 |
|||
Cash and cash equivalents, beginning of period |
127.5 |
99.8 |
124.6 |
105.9 |
|||
Cash and cash equivalents, end of period |
$ 147.1 |
$ 124.6 |
$ 147.1 |
$ 124.6 |
|
|||||||
Three Months Ended |
Twelve Months Ended |
||||||
(in millions) |
2022 |
2021 |
2022 |
2021 |
|||
Net sales: |
|||||||
|
$ 824.9 |
$ 951.6 |
$ 3,652.4 |
$ 3,316.7 |
|||
Paper Packaging & Services |
665.6 |
621.7 |
2,675.1 |
2,218.4 |
|||
Land Management |
5.3 |
4.9 |
22.0 |
21.0 |
|||
Total net sales |
$ 1,495.8 |
$ 1,578.2 |
$ 6,349.5 |
$ 5,556.1 |
|||
Gross profit: |
|||||||
|
$ 152.5 |
$ 184.3 |
$ 692.6 |
$ 684.1 |
|||
Paper Packaging & Services |
155.6 |
109.8 |
584.5 |
401.3 |
|||
Land Management |
2.0 |
2.0 |
8.3 |
7.6 |
|||
Total gross profit |
$ 310.1 |
$ 296.1 |
$ 1,285.4 |
$ 1,093.0 |
|||
Operating profit: |
|||||||
|
$ 67.5 |
$ 97.8 |
$ 313.7 |
$ 350.2 |
|||
Paper Packaging & Services |
83.4 |
41.9 |
298.5 |
131.0 |
|||
Land Management |
2.5 |
1.8 |
9.0 |
104.0 |
|||
Total operating profit |
$ 153.4 |
$ 141.5 |
$ 621.2 |
$ 585.2 |
|||
EBITDA(9): |
|||||||
|
$ 82.4 |
$ 116.8 |
$ 383.5 |
$ 432.7 |
|||
Paper Packaging & Services |
116.9 |
78.8 |
439.0 |
269.9 |
|||
Land Management |
3.1 |
2.5 |
11.8 |
107.3 |
|||
Total EBITDA |
$ 202.4 |
$ 198.1 |
$ 834.3 |
$ 809.9 |
|||
Adjusted EBITDA(10): |
|||||||
|
$ 96.0 |
$ 121.4 |
$ 458.2 |
$ 453.3 |
|||
Paper Packaging & Services |
120.8 |
87.7 |
450.5 |
302.0 |
|||
Land Management |
1.9 |
2.2 |
8.8 |
8.9 |
|||
Total Adjusted EBITDA |
$ 218.7 |
$ 211.3 |
$ 917.5 |
$ 764.2 |
(9) EBITDA is defined as net income, plus interest expense, net, plus income tax expense, plus depreciation, depletion and amortization. However, because the Company does not calculate net income by segment, this table calculates EBITDA by segment with reference to operating profit by segment, which, as demonstrated in the table of Consolidated EBITDA, is another method to achieve the same result. See the reconciliations in the table of Segment EBITDA. |
(10) Adjusted EBITDA is defined as net income, plus interest expense, net, plus debt extinguishment charges, plus income tax expense, plus depreciation, depletion and amortization expense, plus restructuring charges, plus acquisition and integration related costs, plus non-cash asset impairment charges, plus non-cash pension settlement charges, plus incremental COVID-19 costs, net, plus gain (loss) on disposal of properties, plants, equipment and businesses, net, plus timberland gains, net. |
|
|||||||
Three Months Ended |
Twelve Months Ended |
||||||
(in millions) |
2022 |
2021 |
2022 |
2021 |
|||
Net income |
$ 102.6 |
$ 109.9 |
$ 394.0 |
$ 413.2 |
|||
Plus: Interest expense, net |
16.9 |
16.9 |
61.2 |
92.7 |
|||
Plus: Debt extinguishment charges |
— |
— |
25.4 |
— |
|||
Plus: Income tax expense |
31.7 |
13.1 |
137.1 |
69.6 |
|||
Plus: Depreciation, depletion and amortization expense |
51.2 |
58.2 |
216.6 |
234.4 |
|||
EBITDA |
$ 202.4 |
$ 198.1 |
$ 834.3 |
$ 809.9 |
|||
Net income |
$ 102.6 |
$ 109.9 |
$ 394.0 |
$ 413.2 |
|||
Plus: Interest expense, net |
16.9 |
16.9 |
61.2 |
92.7 |
|||
Plus: Debt extinguishment charges |
— |
— |
25.4 |
— |
|||
Plus: Income tax expense |
31.7 |
13.1 |
137.1 |
69.6 |
|||
Plus: Other expense, net |
4.0 |
2.6 |
8.9 |
4.8 |
|||
Plus: Non-cash pension settlement charges |
— |
0.1 |
— |
9.1 |
|||
Plus: Equity earnings of unconsolidated affiliates, net of tax |
(1.8) |
(1.1) |
(5.4) |
(4.2) |
|||
Operating profit |
153.4 |
141.5 |
621.2 |
585.2 |
|||
Less: Other expense, net |
4.0 |
2.6 |
8.9 |
4.8 |
|||
Less: Non-cash pension settlement charges |
— |
0.1 |
— |
9.1 |
|||
Less: Equity earnings of unconsolidated affiliates, net of tax |
(1.8) |
(1.1) |
(5.4) |
(4.2) |
|||
Plus: Depreciation, depletion and amortization expense |
51.2 |
58.2 |
216.6 |
234.4 |
|||
EBITDA |
$ 202.4 |
$ 198.1 |
$ 834.3 |
$ 809.9 |
|||
Plus: Restructuring charges |
$ 2.7 |
$ 4.3 |
$ 13.0 |
$ 23.1 |
|||
Plus: Acquisition and integration related costs |
2.9 |
2.9 |
8.7 |
9.1 |
|||
Plus: Non-cash asset impairment charges |
7.9 |
7.4 |
71.0 |
8.9 |
|||
Plus: Non-cash pension settlement charges |
— |
0.1 |
— |
9.1 |
|||
Plus: Incremental COVID-19 costs, net(11) |
— |
0.7 |
— |
3.3 |
|||
Plus: Loss (gain) on disposal of properties, plants, |
2.8 |
(2.2) |
(9.5) |
(3.5) |
|||
Plus: Timberland gains, net |
— |
— |
— |
(95.7) |
|||
Adjusted EBITDA |
$ 218.7 |
$ 211.3 |
$ 917.5 |
$ 764.2 |
(11) Incremental COVID-19 costs, net includes costs directly attributable to COVID-19 such as costs incurred for incremental cleaning and sanitation efforts and employee safety measures, offset by economic relief received from foreign governments. |
|
|||||||
Three Months Ended |
Twelve Months Ended |
||||||
(in millions) |
2022 |
2021 |
2022 |
2021 |
|||
|
|||||||
Operating profit |
$ 67.5 |
$ 97.8 |
$ 313.7 |
$ 350.2 |
|||
Less: Other expense, net |
4.3 |
2.4 |
9.5 |
4.5 |
|||
Less: Non-cash pension settlement charges |
— |
— |
— |
0.3 |
|||
Less: Equity earnings of unconsolidated affiliates, net of tax |
(1.8) |
(1.1) |
(5.4) |
(4.2) |
|||
Plus: Depreciation and amortization expense |
17.4 |
20.3 |
73.9 |
83.1 |
|||
EBITDA |
$ 82.4 |
$ 116.8 |
$ 383.5 |
$ 432.7 |
|||
Plus: Restructuring charges |
2.8 |
2.5 |
9.1 |
17.1 |
|||
Plus: Acquisition and integration related costs |
0.1 |
— |
0.4 |
— |
|||
Plus: Non-cash asset impairment charges |
7.0 |
1.2 |
69.4 |
2.7 |
|||
Plus: Non-cash pension settlement charges |
— |
— |
— |
0.3 |
|||
Plus: Incremental COVID-19 costs, net |
— |
0.5 |
— |
1.8 |
|||
Plus: Loss (gain) on disposal of properties, plants, |
3.7 |
0.4 |
(4.2) |
(1.3) |
|||
Adjusted EBITDA |
$ 96.0 |
$ 121.4 |
$ 458.2 |
$ 453.3 |
|||
Paper Packaging & Services |
|||||||
Operating profit |
$ 83.4 |
$ 41.9 |
$ 298.5 |
$ 131.0 |
|||
Less: Other (income) expense, net |
(0.3) |
0.2 |
(0.6) |
0.3 |
|||
Less: Non-cash pension settlement charges |
— |
0.1 |
— |
8.8 |
|||
Plus: Depreciation and amortization expense |
33.2 |
37.2 |
139.9 |
148.0 |
|||
EBITDA |
$ 116.9 |
$ 78.8 |
$ 439.0 |
$ 269.9 |
|||
Plus: Restructuring charges (income) |
(0.1) |
1.8 |
3.9 |
5.9 |
|||
Plus: Acquisition and integration related costs |
2.8 |
2.9 |
8.3 |
9.1 |
|||
Plus: Non-cash asset impairment charges |
0.9 |
5.0 |
1.6 |
5.0 |
|||
Plus: Non-cash pension settlement charges |
— |
0.1 |
— |
8.8 |
|||
Plus: Incremental COVID-19 costs, net |
— |
0.2 |
— |
1.5 |
|||
Plus: Loss (gain) on disposal of properties, plants, |
0.3 |
(1.1) |
(2.3) |
1.8 |
|||
Adjusted EBITDA |
$ 120.8 |
$ 87.7 |
$ 450.5 |
$ 302.0 |
|||
Land Management |
|||||||
Operating profit |
$ 2.5 |
$ 1.8 |
$ 9.0 |
$ 104.0 |
|||
Plus: Depreciation, depletion and amortization expense |
0.6 |
0.7 |
2.8 |
3.3 |
|||
EBITDA |
$ 3.1 |
$ 2.5 |
$ 11.8 |
$ 107.3 |
|||
Plus: Restructuring charges |
— |
— |
— |
0.1 |
|||
Plus: Non-cash asset impairment charges |
— |
1.2 |
— |
1.2 |
|||
Plus: Gain on disposal of properties, plants, equipment, and |
(1.2) |
(1.5) |
(3.0) |
(4.0) |
|||
Plus: Timberland gains, net |
— |
— |
— |
(95.7) |
|||
Adjusted EBITDA |
$ 1.9 |
$ 2.2 |
$ 8.8 |
$ 8.9 |
|||
Consolidated EBITDA |
$ 202.4 |
$ 198.1 |
$ 834.3 |
$ 809.9 |
|||
Consolidated Adjusted EBITDA |
$ 218.7 |
$ 211.3 |
$ 917.5 |
$ 764.2 |
(12)Adjusted EBITDA is defined as net income, plus interest expense, net, plus debt extinguishment charges, plus income tax expense, plus depreciation, depletion and amortization expense, plus restructuring charges, plus acquisition and integration related costs, plus non-cash asset impairment charges, plus non-cash pension settlement charges, plus incremental COVID-19 costs, net, plus (gain) loss on disposal of properties, plants, equipment and businesses, net, plus timberland gains, net. However, because the Company does not calculate net income by segment, this table calculates adjusted EBITDA by segment with reference to operating profit by segment, which, as demonstrated in the table of consolidated adjusted EBITDA, is another method to achieve the same result. |
|
|||||||
Three Months Ended |
Twelve Months Ended |
||||||
(in millions) |
2022 |
2021 |
2022 |
2021 |
|||
Net cash provided by operating activities |
$ 286.6 |
$ 137.3 |
$ 657.5 |
$ 396.0 |
|||
Cash paid for purchases of properties, plants and equipment |
(64.1) |
(46.5) |
(176.3) |
(140.7) |
|||
Free Cash Flow |
$ 222.5 |
$ 90.8 |
$ 481.2 |
$ 255.3 |
|||
Cash paid for acquisition and integration related costs |
2.9 |
2.9 |
8.7 |
9.1 |
|||
Cash paid for incremental COVID-19 costs, net |
— |
0.7 |
— |
3.3 |
|||
Cash paid for integration related ERP systems |
1.7 |
0.4 |
6.2 |
6.4 |
|||
Cash paid for debt issuance costs(14) |
— |
— |
2.8 |
— |
|||
Cash proceeds redeployment related to replacement of non- |
7.4 |
— |
7.4 |
— |
|||
Adjusted Free Cash Flow |
$ 234.5 |
$ 94.8 |
$ 506.3 |
$ 274.1 |
(13)Adjusted free cash flow is defined as net cash provided by operating activities, less cash paid for purchases of properties, plants and equipment, plus cash paid for acquisition and integration related costs, plus cash paid for incremental COVID-19 costs, net, plus cash paid for integration related ERP systems, plus cash paid for debt issuance costs, plus cash proceeds redeployment related to replacement of non-operating corporate asset. |
(14) Cash paid for debt issuance costs is defined as cash payments for debt issuance related expenses included within net cash used in operating activities. |
(15) Cash proceeds redeployment related to replacement of non-operating corporate asset is defined as cash payments to reinvest in a similar, newer non-operating corporate asset using proceeds from the sale of the previous, older non-operating corporate asset of approximately the same amount. This payment is included within cash paid for purchases of properties, plants and equipment under net cash used in investing activities. |
|
||||||||||||
(in millions, except for per share amounts) |
Income before |
Income |
Equity |
Noncontrol |
Net Income |
Diluted |
Tax |
|||||
Three Months Ended |
$ 132.5 |
$ 31.7 |
$ (1.8) |
$ 3.1 |
$ 99.5 |
$ 1.67 |
23.9 % |
|||||
Restructuring charges |
2.7 |
0.4 |
— |
— |
2.3 |
0.04 |
||||||
Acquisition and integration related costs |
2.9 |
0.8 |
— |
— |
2.1 |
0.04 |
||||||
Non-cash asset impairment charges |
7.9 |
5.6 |
— |
— |
2.3 |
0.03 |
||||||
Gain on disposal of properties, plants, |
2.8 |
— |
— |
— |
2.8 |
0.05 |
||||||
Excluding Adjustments |
$ 148.8 |
$ 38.5 |
$ (1.8) |
$ 3.1 |
$ 109.0 |
$ 1.83 |
25.9 % |
|||||
Three Months Ended |
$ 121.9 |
$ 13.1 |
$ (1.1) |
$ 5.4 |
$ 104.5 |
$ 1.74 |
10.7 % |
|||||
Restructuring charges |
4.3 |
0.7 |
— |
— |
3.6 |
0.07 |
||||||
Acquisition and integration related costs |
2.9 |
0.7 |
— |
— |
2.2 |
0.04 |
||||||
Non-cash asset impairment charges |
7.4 |
1.1 |
— |
— |
6.3 |
0.10 |
||||||
Non-cash pension settlement charges |
0.1 |
— |
— |
— |
0.1 |
— |
||||||
Incremental COVID-19 costs, net |
0.7 |
0.3 |
— |
— |
0.4 |
0.01 |
||||||
(Gain) loss on disposal of properties, plants, |
(2.2) |
(0.6) |
— |
0.1 |
(1.7) |
(0.03) |
||||||
Excluding Adjustments |
$ 135.1 |
$ 15.3 |
$ (1.1) |
$ 5.5 |
$ 115.4 |
$ 1.93 |
11.3 % |
|||||
Twelve Months Ended |
$ 525.7 |
$ 137.1 |
$ (5.4) |
$ 17.3 |
$ 376.7 |
$ 6.30 |
26.1 % |
|||||
Restructuring charges |
13.0 |
2.9 |
— |
— |
10.1 |
0.17 |
||||||
Debt extinguishment charges |
25.4 |
6.2 |
— |
— |
19.2 |
0.32 |
||||||
Acquisition and integration related costs |
8.7 |
2.2 |
— |
— |
6.5 |
0.11 |
||||||
Non-cash asset impairment charges |
71.0 |
5.6 |
— |
— |
65.4 |
1.08 |
||||||
Gain on disposal of properties, plants, |
(9.5) |
(2.6) |
— |
(0.2) |
(6.7) |
(0.11) |
||||||
Excluding Adjustments |
$ 634.3 |
$ 151.4 |
$ (5.4) |
$ 17.1 |
$ 471.2 |
$ 7.87 |
23.9 % |
|||||
Twelve Months Ended |
$ 478.6 |
$ 69.6 |
$ (4.2) |
$ 22.5 |
$ 390.7 |
$ 6.54 |
14.5 % |
|||||
Restructuring charges |
23.1 |
5.2 |
— |
1.3 |
16.6 |
0.26 |
||||||
Acquisition and integration related costs |
9.1 |
2.2 |
— |
— |
6.9 |
0.12 |
||||||
Non-cash asset impairment charges |
8.9 |
1.6 |
— |
0.1 |
7.2 |
0.12 |
||||||
Non-cash pension settlement charges |
9.1 |
2.1 |
— |
— |
7.0 |
0.12 |
||||||
Incremental COVID-19 costs, net |
3.3 |
0.9 |
— |
0.3 |
2.1 |
0.04 |
||||||
(Gain) loss on disposal of properties, plants, |
(3.5) |
(0.3) |
— |
0.1 |
(3.3) |
(0.06) |
||||||
Timberland gains, net |
(95.7) |
(3.0) |
— |
— |
(92.7) |
(1.54) |
||||||
Excluding Adjustments |
$ 432.9 |
$ 78.3 |
$ (4.2) |
$ 24.3 |
$ 334.5 |
$ 5.60 |
18.1 % |
The impact of income tax expense and noncontrolling interest on each adjustment is calculated based on tax rates and ownership percentages specific to each applicable entity. |
|
|||||
(in millions) |
|
|
|
||
Total Debt |
$ 1,916.1 |
$ 2,058.7 |
$ 2,225.6 |
||
Cash and cash equivalents |
(147.1) |
(127.5) |
(124.6) |
||
Net Debt |
$ 1,769.0 |
$ 1,931.2 |
$ 2,101.0 |
|
|||
Trailing Twelve Month Credit Agreement EBITDA (in millions) |
Trailing Twelve |
Trailing Twelve |
Trailing Twelve |
Net income |
$ 394.0 |
$ 401.3 |
$ 413.2 |
Plus: Interest expense, net |
61.2 |
61.2 |
92.7 |
Plus: Debt extinguishment charges |
25.4 |
25.4 |
— |
Plus: Income tax expense |
137.1 |
118.5 |
69.6 |
Plus: Depreciation, depletion and amortization expense |
216.6 |
223.6 |
234.4 |
EBITDA |
$ 834.3 |
$ 830.0 |
$ 809.9 |
Plus: Restructuring charges |
13.0 |
14.6 |
23.1 |
Plus: Acquisition and integration related costs |
8.7 |
8.7 |
9.1 |
Plus: Non-cash asset impairment charges |
71.0 |
70.5 |
8.9 |
Plus: Non-cash pension settlement charges |
— |
0.1 |
9.1 |
Plus: Incremental COVID-19 costs, net |
— |
0.7 |
3.3 |
Plus: Gain on disposal of properties, plants, equipment, and |
(9.5) |
(14.5) |
(3.5) |
Plus: Timberland gains, net |
— |
— |
(95.7) |
Adjusted EBITDA |
$ 917.5 |
$ 910.1 |
$ 764.2 |
Credit Agreement adjustments to EBITDA(16) |
(17.7) |
(24.0) |
33.6 |
Credit Agreement EBITDA |
$ 899.8 |
$ 886.1 |
$ 797.8 |
Adjusted Net Debt (in millions) |
For the Period Ended |
Trailing Twelve |
For the Period Ended |
Total debt |
$ 1,916.1 |
$ 2,058.7 |
$ 2,225.6 |
Cash and cash equivalents |
(147.1) |
(127.5) |
(124.6) |
Net debt |
$ 1,769.0 |
$ 1,931.2 |
$ 2,101.0 |
Credit Agreement adjustments to debt(17) |
(214.2) |
(164.8) |
(115.9) |
Adjusted net debt |
$ 1,554.8 |
$ 1,766.4 |
$ 1,985.1 |
Leverage Ratio |
1.73x |
1.99x |
2.49x |
(16)Adjustments to EBITDA are specified by the 2022 Credit Agreement and include certain timberland gains, equity earnings of unconsolidated affiliates, net of tax, certain acquisition savings, deferred financing costs, capitalized interest, income and expense in connection with asset dispositions, and other items. |
(17)Adjustments to net debt are specified by the 2022 Credit Agreement and include the European accounts receivable program, letters of credit, and balances for swap contracts. |
|
|||
Fiscal 2023 |
|||
(in millions) |
Scenario 1 |
Scenario 2 |
|
Net cash provided by operating activities |
$ 578.0 |
$ 656.0 |
|
Cash paid for purchases of properties, plants and equipment |
(188.0) |
(220.0) |
|
Free cash flow |
$ 390.0 |
$ 436.0 |
|
Cash paid for acquisition and integration related costs |
12.0 |
14.0 |
|
Cash paid for integration related ERP systems and equipment |
8.0 |
10.0 |
|
Adjusted free cash flow |
$ 410.0 |
$ 460.0 |
(18)Cash paid for integration related ERP systems and equipment is defined as cash paid for ERP systems and equipment required to bring the acquired facilities to Greif's standards. |
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