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FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 or 15 (d)
/ OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended April 30, 1994 Commission File Number 1-566
GREIF BROS.CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 31-4388903
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
621 Pennsylvania Avenue, Delaware, Ohio 43015
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 614-363-1271
Not Applicable
Former name, former address and former fiscal year, if changed since
last report.
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X . No .
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the close of the period covered by this report:
Class A Common Stock 5,436,586 shares
Class B Common Stock 6,678,861 shares
PART I. FINANCIAL INFORMATION
GREIF BROS. CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
ASSETS
April 30, October 31,
1994 1993
CURRENT ASSETS
Cash and short-term investments $ 28,149,773 $ 30,827,007
U.S. and Canadian government securities
--at cost which approximates market 20,181,873 26,932,697
Trade accounts receivable--less allowance
of $965,000 for doubtful items 58,431,658 56,601,260
Inventories, at the lower of cost (prin-
cipally last-in, first-out) or market 50,338,553 43,366,594
Prepaid expenses and other 10,263,142 9,929,082
Total current assets 167,364,999 167,656,640
LONG TERM ASSETS
Cash surrender value of life insurance 2,522,746 2,452,048
Interest in partnership 1,091,040 1,091,040
Other long-term assets 4,760,202 5,171,542
Deferred income taxes 17,629,045 18,452,595
26,003,033 27,167,225
PROPERTIES, PLANTS AND EQUIPMENT--at cost
Timber properties -- less depletion 3,309,582 3,289,750
Land 9,584,564 9,608,526
Buildings 90,854,079 86,147,800
Machinery, equipment, etc. 299,597,737 222,588,512
Construction in progress 3,054,137 64,538,771
Less accumulated depreciation (192,894,958) (183,558,486)
213,505,141 202,614,873
$406,873,173 $397,438,738
See accompanying notes
GREIF BROS. CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND SHAREHOLDERS' EQUITY
April 30, October 31,
1994 1993
CURRENT LIABILITIES
Accounts payable and accrued liabilities $ 24,844,331 $ 22,421,718
Current portion of long term obligations 227,898 375,605
Accrued payrolls and employee benefits 5,259,544 5,793,717
Accrued taxes--general 1,232,565 1,619,749
Taxes on income 239,081 1,447,636
Total current liabilities 31,803,419 31,658,425
LONG TERM OBLIGATIONS (interest rates from
3.85% - 6.00%; payable to 2000) 33,727,494 28,014,956
OTHER LONG TERM LIABILITIES 13,365,563 13,571,752
DEFERRED INCOME TAXES 21,257,372 19,226,893
Total long term liabilities 68,350,429 60,813,601
SHAREHOLDERS' EQUITY (Note 1)
Capital stock, without par value 9,033,988 9,033,988
Class A Common Stock:
Authorized 16,000,000 shares;
issued 10,570,480 shares;
in treasury 5,133,894 shares;
outstanding 5,436,586 shares
Class B Common Stock:
Authorized and issued 8,640,000 shares;
in treasury 1,961,139 shares;
(1,940,267 in 1993)
outstanding 6,678,861 shares
(6,699,733 in 1993)
Earnings retained for use in the business 302,169,621 298,756,926
Cumulative translation adjustment (4,484,284) (2,824,202)
306,719,325 304,966,712
$406,873,173 $397,438,738
See accompanying notes
CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended April 30, Six Months Ended April 30,
1994 1993 1994 1993
(Note 5) (Note 5)
Sales and other income
Net sales $139,915,582 $133,880,994 $268,687,967 $258,942,943
Other income:
Gain on sales of timber and timber properties 1,009,759 1,239,351 1,868,106 2,563,315
Interest, oil royalties and other 1,258,021 1,229,605 2,574,717 2,678,534
142,183,362 136,349,950 273,130,790 264,184,792
Costs and expenses
Cost of products sold 117,183,883 112,043,709 226,362,997 216,589,889
Selling, administrative and general 14,436,713 14,601,236 28,704,604 29,115,508
Interest 410,285 49,040 646,409 95,644
132,030,881 126,693,985 255,714,010 245,801,041
Income before income taxes 10,152,481 9,655,965 17,416,780 18,383,751
Taxes on income 3,800,000 3,856,220 6,500,000 7,426,084
Net income $ 6,352,481 $ 5,799,745 $ 10,916,780 $ 10,957,667
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 re-
mainder were allocated as they would be received by
shareholders in the event of liquidation, that is, equally
to Class A and Class B shares, share and share alike:
Class A $ .50 $ .46 $ .79 $ .79
Class B $ .54 $ .50 $ .99 $ .99
Due to the special characteristics of the Company's two classes of stock (see
Note 1), earnings per share can be calculated upon the basis of varying
assumptions, none of which, in the opinion of management, would be free from
the claim that it fails fully and accurately to represent the true interest
of the shareholders of each class of stock and in the earnings retained for
use in the business.
See accompanying notes
GREIF BROS. CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF EARNINGS RETAINED FOR USE IN THE BUSINESS
For the six months ended April 30, 1994 1993
Balance at October 31, as previously reported $298,355,562 $283,250,664
Effect of restatement as required
by SFAS #109 (see Note 5) 401,364 1,025,620
Balance at beginning of period, as restated 298,756,926 284,276,284
Net income 10,916,780 10,957,667
309,673,706 295,233,951
Dividends paid:
On Class A Common Stock -- $.44 2,392,098 2,392,098
($.44 in 1993)
On Class B Common Stock -- $.64 4,278,998 4,302,557
($.64 in 1993)
6,671,096 6,694,655
Stock acquired for treasury 832,989 255,100
Balance at end of period $302,169,621 $288,284,196
See accompanying notes
GREIF BROS. CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the six months ended April 30, 1994 1993
Cash flows from operating activities:
Net income $ 10,916,780 $ 10,957,667
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and depletion 10,425,556 9,660,710
Deferred income taxes 2,893,992 82,084
(Increase) decrease, net of conversion:
Trade accounts receivable (1,830,398) 976,902
Inventories (6,971,959) 544,449
Prepaid expenses and other (334,060) 1,360,784
Other long term assets 340,642 (254,576)
Increase (decrease), net of conversion:
Accounts payable and accrued liabilities 2,422,613 781,060
Accrued payrolls and employee benefits (534,173) (339,358)
Accrued taxes - general (387,184) (429,694)
Taxes on income (1,208,555) (2,765,762)
Other long term liabilities (206,189) (240,300)
Net cash provided by operating activities 15,527,065 20,333,966
Cash flows from investing activities:
Sales (purchases) of investments in government
and short term securities 6,750,824 9,182,027
Purchase of properties, plants and equipment (21,603,348) (28,344,645)
Net cash used by investing activities (14,852,524) (19,162,618)
Cash flows from financing activities:
Proceeds (payments) on long term debt 5,564,831 (181,140)
Acquisition of treasury stock (832,989) (255,100)
Dividends paid (6,671,096) (6,694,655)
Net cash used by financing activities (1,939,254) (7,130,895)
Foreign currency translation adjustment (1,412,521) (724,288)
Net increase (decrease) in cash and short term
investments (2,677,234) (6,683,835)
Cash and short term investments at beginning of
period 30,827,007 35,439,549
Cash and short term investments at end of period $ 28,149,773 $ 28,755,714
See accompanying notes
GREIF BROS. CORPORATION AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 1994
NOTE 1 - CAPITAL STOCK AND RETAINED EARNINGS
Class A Common Stock is entitled to cumulative dividends of 2 cents a
share per year after which Class B Common Stock is entitled to non-cumulative
dividends up to 1 cent a share per year. Further distribution in any year
must be made in proportion of 1 cent a share for Class A Common Stock to 1-1/2
cents a share for Class B Common Stock. The Class A Common Stock shall have
no voting power nor shall it be entitled to notice of meetings of the
stockholders, all rights to vote and all voting power being vested exclusively
in the Class B Common Stock unless four quarterly cumulative dividends upon
the Class A Common stock are in default. There is no cumulative voting. The
Company has acquired 7,095,033 Class A and Class B Common Stock for
treasury at a cost of $37,173,276 which was appropriately charged against
earnings retained for use in the business. Included in the above are 20,872
shares of Class B Common Stock acquired in 1994 for $832,989.
NOTE 2 - DIVIDENDS PER SHARE
The following dividends per share were paid during the period
indicated:
Three Months Ended Six Months Ended
April 30, April 30,
1994 1993 1994 1993
Class A Common Stock $.08 $.08 $.44 $.44
Class B Common Stock $.12 $.12 $.64 $.64
NOTE 3 - CALCULATION OF NET INCOME PER SHARE
Net income per share was calculated using the following number of
shares for the periods presented:
Three Months Ended Six Months Ended
April 30, April 30,
Class A Common Stock 5,436,586 shares 5,436,586 shares
Class B Common Stock 6,682,107 shares 6,685,377 shares
NOTE 4 - INVENTORIES
Inventories are comprised principally of raw materials.
NOTE 5 - RESTATEMENT
The 1991, 1992 and 1993 financial statements have been restated to
reflect the adoption, retroactive to November 1, 1990, of Statement of
Financial Accounting Standards (SFAS) No. 109, "Accounting for Income Taxes".
In connection with the adoption of SFAS No. 109, the Company recorded a one
time adjustment that resulted in a reduction of the deferred income tax
liability and the recording of a deferred tax asset. Certain prior year
amounts in the Company's financial statements have been restated. The effect
on net income for the six months ended April 30, 1993 was a reduction in net
income of $311,000.
MANAGEMENT'S DISCUSSION AND ANALYSIS
Liquidity and Capital Resources
As indicated in the Consolidated Balance Sheet, elsewhere in this
report and discussed in greater detail in the 1993 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 1993 Annual Report, the Company is subject to the
economic conditions of its customers. During this period, the Company has
been able to utilize its developed financial position to meet its continued
business needs.
The current ratio as of April 30, 1994 is an indication of the
continuation of the Company's strong liquidity.
Capital expenditures were $21,603,348 during the six months ended
April 30, 1994. These capital expenditures were principally for new
facilities and to replace and improve equipment and buildings.
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 6-month periods ended April 30,
1994 and April 30, 1993.
Net sales to customers increased this year compared to the same
period last year. However, the results of operations decreased due to
competitive price pressures of the Company's products, coupled with increases
in certain of its raw materials.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
There are no material pending legal proceedings not covered by
insurance.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a.) Exhibits.
None
(b.) Reports on Form 8-K.
No events occurred requiring Form 8-K to be filed.
OTHER COMMENTS
The information furnished herein reflects all adjustments which are,
in the opinion of management, necessary for a fair presentation of the
consolidated balance sheet as of April 30, 1994, the consolidated statement of
income for the 6-month periods ended April 30, 1994 and 1993, and the
consolidated statement of cash flows for the 6-month periods then ended.
These financial statements are unaudited; however, at year end an audit will
be made for the fiscal year by independent certified public accountants.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Company has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Greif Bros. Corporation
(Registrant)
Date June 9, 1994
Michael J. Gasser
Vice Chairman and
Chief Operating Officer