Greif, Inc 10-Q for FY2023 Q1

Greif, Inc (GEF)

10-Q 2023-03-03 For: 2023-01-31

Added on April 06, 2026

About this 10-Q

Greif, Inc filed this 10-Q on March 3, 2023, covering the quarter ended January 31, 2023 (FY2023 Q1).

Headline figures

Quarter ended January 31, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $1.27B; down 18.7% from $1.56B a year earlier
Net income: $89.9M; up 772.8% from net income of $10.3M a year earlier

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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)


Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Class A Common Stock	GEF	New York Stock Exchange
Class B Common Stock	GEF-B	New York Stock Exchange


Class A Common Stock			25,936,892 shares
Class B Common Stock			21,545,869 shares


Item		Page
	Part I. Financial Information
1	Financial Statements	4
	Condensed Consolidated Statements of Income for the Three Months Ended January 31, 202 3 and 202 2 (Unaudited)	4
	Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three Months Ended J anuary 31, 202 3 and 202 2 (Unaudited)	5
	Condensed Consolidated Balance Sheets at January 31, 202 3 (Unaudited) and October 31, 202 2	6
	Condensed Consolidated Statements of Cash Flows for the Three Months Ended Jan uary 31, 202 3 and 202 2 (Unaudited)	8
	Condensed Consolidated Statements of Changes in Shareholders’ Equity for the Three Months Ended January 31, 202 3 and 202 2 (Unaudited)	9
	Notes to Condensed Consolidated Financial Statements (Unaudited)	10
2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
3	Quantitative and Qualitative Disclosures About Market Risk	39
4	Controls and Procedures	39

	Part II. Other Information
1A	Risk Factors	40
2	Unregistered Sales of Equity Securities and Use of Proceeds	40
6	Exhibits	41
	Signatures	42


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


	Three Months Ended January 31,
(in millions, except per share amounts)	2023		2022
Net sales	$	1,271.0	$	1,564.3
Cost of products sold	1,019.4		1,274.6
Gross profit	251.6		289.7
Selling, general and administrative expenses	139.4		151.6
Restructuring charges	2.4		3.5

Acquisition and integration related costs	7.5		1.6
Non-cash asset impairment charges	0.5		62.4
Gain on disposal of properties, plants and equipment, net	—		(1.4)
Gain on disposal of businesses, net	(54.6)		—
Operating profit	156.4		72.0
Interest expense, net	22.8		17.1


Other expense, net	3.3		2.0
Income before income tax expense and equity earnings of unconsolidated affiliates, net	130.3		52.9
Income tax expense	37.7		35.6
Equity earnings of unconsolidated affiliates, net of tax	(0.5)		(1.3)
Net income	93.1		18.6
Net income attributable to noncontrolling interests	(3.2)		(8.3)
Net income attributable to Greif, Inc.	$	89.9	$	10.3
Basic earnings per share attributable to Greif, Inc. common shareholders:
Class A common stock	$	1.55	$	0.17
Class B common stock	$	2.31	$	0.25
Diluted earnings per share attributable to Greif, Inc. common shareholders:
Class A common stock	$	1.54	$	0.18
Class B common stock	$	2.31	$	0.25
Weighted-average number of Class A common shares outstanding:
Basic	25.7		26.6
Diluted	25.8		26.8
Weighted-average number of Class B common shares outstanding:
Basic	21.7		22.0
Diluted	21.7		22.0
Cash dividends declared per common share:
Class A common stock	$	0.50	$	0.46
Class B common stock	$	0.74	$	0.68


	Three Months Ended January 31,
(in millions)	2023		2022
Net income	$	93.1	$	18.6
Other comprehensive income (loss), net of tax:
Foreign currency translation	51.3		(31.5)
Derivative financial instruments	(25.7)		11.8
Minimum pension liabilities	(2.4)		3.1
Other comprehensive income (loss), net of tax	23.2		(16.6)
Comprehensive income	116.3		2.0
Comprehensive income attributable to noncontrolling interests	3.5		4.0
Comprehensive income (loss) attributable to Greif, Inc.	$	112.8	$	(2.0)


(in millions)	January 31, 2023		October 31, 2022
ASSETS
Current assets
Cash and cash equivalents	$	161.0	$	147.1
Trade accounts receivable, net of allowance	674.2		749.1
Inventories:
Raw materials	338.4		316.0

Finished goods	102.7		87.3
Assets held for sale	1.3		1.3

Prepaid expenses	64.1		57.3
Other current assets	129.8		141.3
	1,471.5		1,499.4
Long-term assets
Goodwill	1,540.8		1,464.5
Other intangible assets, net of amortization	695.9		576.2
Deferred tax assets	11.2		10.1

Pension asset	39.7		30.8
Operating lease assets	240.9		254.7
Finance lease assets	32.6		1.2
Other long-term assets	149.6		178.0
	2,710.7		2,515.5
Properties, plants and equipment
Timber properties, net of depletion	228.4		226.8
Land	158.0		154.8
Buildings	537.9		515.1
Machinery and equipment	2,056.2		1,968.3
Capital projects in progress	180.2		182.9
	3,160.7		3,047.9
Accumulated depreciation	(1,652.3)		(1,592.9)
	1,508.4		1,455.0
Total assets	$	5,690.6	$	5,469.9


	Three Months Ended January 31,
(in millions)	2023		2022
Cash flows from operating activities:
Net income	$	93.1	$	18.6
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, depletion and amortization	55.1		59.4
Non-cash asset impairment charges	0.5		62.4

Gain on disposals of properties, plants and equipment, net	—		(1.4)
Gain on disposals of businesses, net	(54.6)		—

Unrealized foreign exchange loss	0.1		3.4
Deferred income tax loss	0.7		2.0


Non-cash lease expense	12.9		14.6
Other, net	0.5		0.6
Increase (decrease) in cash from changes in certain assets and liabilities, net of impacts from the purchase of acquisitions:
Trade accounts receivable	112.0		(4.8)
Inventories	(2.6)		(62.9)

Accounts payable	(103.1)		9.6
Restructuring reserves	0.5		(1.7)
Operating leases	(12.8)		(16.0)
Pension and post-retirement benefit liabilities	(8.1)		(10.4)
Other, net	(61.3)		(51.0)
Net cash provided by operating activities	32.9		22.4
Cash flows from investing activities:
Purchases of business, net of cash acquired	(301.9)		—

Purchases of properties, plants and equipment	(49.3)		(44.5)
Purchases of and investments in timber properties	(2.3)		(4.8)





Payments for deferred purchase price of acquisitions	(21.7)		(4.7)
Proceeds from the sale of properties, plants, equipment and other assets	0.5		8.2
Proceeds from the sale of businesses	105.6		—


Net cash used in investing activities	(269.1)		(45.8)
Cash flows from financing activities:
Proceeds from issuance of long-term debt	836.3		641.6
Payments on long-term debt	(538.3)		(551.4)

Payments on short-term borrowings, net	(1.6)		(4.2)

Proceeds from trade accounts receivable credit facility	55.5		—
Payments on trade accounts receivable credit facility	(48.7)		(2.0)


Dividends paid to Greif, Inc. shareholders	(28.9)		(27.2)
Dividends paid to noncontrolling interests	—		(2.8)

Payments for share repurchases	(17.8)		—

Tax withholding payments for stock-based awards	(12.4)		—
Purchases of redeemable noncontrolling interest	(3.3)		—
Other, net	(1.3)		—

Net cash provided by financing activities	239.5		54.0

Effects of exchange rates on cash	10.6		(18.6)
Net increase in cash and cash equivalents	13.9		12.0
Cash and cash equivalents at beginning of period	147.1		124.6
Cash and cash equivalents at end of period	$	161.0	$	136.6
























	Three Months Ended January 31, 2023
	Capital Stock			Treasury Stock			Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Greif, Inc. Equity		Non controlling Interests		Total Equity
(in millions, except for shares which are in thousands)	Common Shares	Amount		Treasury Shares	Amount
As of October 31, 2022	47,443	$	173.5	29,399	$	(205.1)	$	2,095.2	$	(302.3)	$	1,761.3	$	33.0	$	1,794.3
Net income							89.9				89.9		3.2		93.1
Other comprehensive income (loss):
Foreign currency translation									51.0		51.0		0.3		51.3
Derivative financial instruments, net of $8.5 million of income tax expense									(25.7)		(25.7)				(25.7)
Minimum pension liability adjustment, net of $0.9 million income tax expense									(2.4)		(2.4)				(2.4)
Comprehensive income				.							112.8				116.3

Current period mark to redemption value of redeemable noncontrolling interest and other							0.8				0.8				0.8
Net income allocated to redeemable noncontrolling interests											—		0.3		0.3
Dividends paid to Greif, Inc. shareholders ($0.50 and $0.74 per Class A share and Class B share, respectively)							(28.9)				(28.9)				(28.9)

Dividends earned on RSU shares							0.4				0.4				0.4
Share repurchases	(232)	—		232	(17.8)						(17.8)				(17.8)
Long-term incentive shares issued	331	13.8		(331)	1.8						15.6				15.6
Share based compensation	—	1.2		—	—						1.2				1.2


As of January 31, 2023	47,542	$	188.5	29,300	$	(221.1)	$	2,157.4	$	(279.4)	$	1,845.4	$	36.8	$	1,882.2






















	Three Months Ended January 31, 2022
	Capital Stock			Treasury Stock			Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Greif, Inc. Equity		Non controlling Interests		Total Equity
(in millions, except for shares which are in thousands)	Common Shares	Amount		Treasury Shares	Amount
As of October 31, 2021	48,559	$	179.3	28,283	$	(134.1)	$	1,825.6	$	(356.5)	$	1,514.3	$	61.3	$	1,575.6
Net income							10.3				10.3		8.3		18.6
Other comprehensive income (loss):
Foreign currency translation									(27.2)		(27.2)		(4.3)		(31.5)
Derivative financial instruments, net of $4.0 million income tax benefit									11.8		11.8				11.8
Minimum pension liability adjustment, net of $0.5 million income tax benefit									3.1		3.1				3.1
Comprehensive income				.							(2.0)				2.0
Current period mark to redemption value of redeemable noncontrolling interest and other							5.0				5.0				5.0
Net income allocated to redeemable noncontrolling interests											—		0.4		0.4
Dividends paid to Greif, Inc. shareholders ($0.46 and $0.68 per Class A share and Class B share, respectively)							(27.2)				(27.2)				(27.2)
Dividends paid to noncontrolling interests and other											—		(1.7)		(1.7)
Dividends earned on RSU shares							(0.8)				(0.8)				(0.8)
Long-term incentive shares issued	46	2.7		(46)	0.1						2.8				2.8
Share based compensation	—	1.1		—	—						1.1				1.1
Restricted stock, executive	3	0.1		(3)	—						0.1				0.1

As of January 31, 2022	48,608	$	183.2	28,234	$	(134.0)	$	1,812.9	$	(368.8)	$	1,493.3	$	64.0	$	1,557.3


(in millions)	Amounts Recognized as of the Acquisition Date
Fair value of consideration transferred
Cash consideration	$	302.8

Recognized amounts of identifiable assets acquired and liabilities assumed
Accounts receivable	$	21.9
Inventories	27.5
Prepaid and other current assets	0.5
Intangibles	133.5
Finance lease assets	32.4

Properties, plants and equipment	54.7
Total assets acquired	270.5

Accounts payable	(3.9)
Accrued payroll and employee benefits	(1.3)
Other current liabilities	(3.1)
Finance lease liabilities	(30.6)


Total liabilities assumed	(38.9)
Total identifiable net assets	$	231.6
Goodwill	$	71.2


(in millions)	Final Purchase Price Allocation		Weighted Average Estimated Useful Life
Customer relationships	$	120.0	15.0
Trademarks	13.5		5.0
Total intangible assets	$	133.5


(in millions)	January 31, 2023		October 31, 2022
2022 Credit Agreement - Term Loans	$	1,554.4	$	1,565.0
Accounts receivable credit facilities	325.8		311.4
2022 Credit Agreement - Revolving Credit Facility	352.0		41.9
Other debt	0.2		0.4
	2,232.4		1,918.7
Less: current portion	80.8		71.1
Less: deferred financing costs	7.7		8.3
Long-term debt, net	$	2,143.9	$	1,839.3


(in millions)	Operating Leases		Finance Leases		Total expected payments
2023	$	56.7	$	5.8	$	62.5
2024	47.9		5.8		53.7
2025	42.1		5.5		47.6
2026	34.2		5.4		39.6
2027	25.1		5.2		30.3
Thereafter	90.7		17.5		108.2
Total lease payments	$	296.7	$	45.2	$	341.9
Less: interest	(52.4)		(11.1)		(63.5)
Lease liabilities	$	244.3	$	34.1	$	278.4


	Three Months Ended January 31, 2023
(in millions)	United States		Europe, Middle East and Africa		Asia Pacific and Other Americas		Total
Global Industrial Packaging	$	259.3	$	314.8	$	131.7	$	705.8
Paper Packaging & Services	550.5		—		9.7		560.2
Land Management	5.0		—		—		5.0
Total net sales	$	814.8	$	314.8	$	141.4	$	1,271.0


	Three Months Ended January 31, 2022
(in millions)	United States		Europe, Middle East and Africa		Asia Pacific and Other Americas		Total
Global Industrial Packaging	$	318.8	$	457.3	$	173.0	$	949.1
Paper Packaging & Services	600.8		—		9.2		610.0
Land Management	5.2		—		—		5.2
Total net sales	$	924.8	$	457.3	$	182.2	$	1,564.3


(in millions)	Employee Separation Costs		Other Costs		Total
Balance at October 31, 2022	$	11.2	$	1.1	$	12.3
Costs incurred and charged to expense	1.1		1.3		2.4
Costs paid or otherwise settled	(0.9)		(0.8)		(1.7)
Balance at January 31, 2023	$	11.4	$	1.6	$	13.0


(in millions)	Total Amounts Expected to be Incurred		Amounts Incurred During the Three Months Ended January 31, 2023		Amounts Remaining to be Incurred
Global Industrial Packaging
Employee separation costs	$	4.0	$	0.8	$	3.2
Other restructuring costs	3.1		1.3		1.8
	7.1		2.1		5.0
Paper Packaging & Services
Employee separation costs	1.6		0.3		1.3
Other restructuring costs	1.4		—		1.4
	3.0		0.3		2.7




	$	10.1	$	2.4	$	7.7


	January 31, 2023
	Assets								Liabilities
(in millions)	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Interest rate derivatives	$	—	$	54.5	$	—	$	54.5	$	—	$	(9.4)	$	—	$	(9.4)
Foreign exchange hedges	—		0.7		—		0.7		—		(3.5)		—		(3.5)
Insurance annuity	—		—		19.4		19.4		—		—		—		—
Cross currency swap	—		29.5		—		29.5		—		—		—		—

	October 31, 2022
	Assets								Liabilities
(in millions)	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Interest rate derivatives	$	—	$	72.1	$	—	$	72.1	$	—	$	(1.0)	$	—	$	(1.0)
Foreign exchange hedges	—		—		—		—		—		(0.2)		—		(0.2)
Insurance annuity	—		—		17.8		17.8		—		—		—		—
Cross currency swap	—		46.8		—		46.8		—		—		—		—


	Authorized Shares	Issued Shares	Outstanding Shares	Treasury Shares
January 31, 2023
Class A Common Stock	128,000,000	42,281,920	25,936,892	16,345,028
Class B Common Stock	69,120,000	34,560,000	21,604,799	12,955,201

October 31, 2022
Class A Common Stock	128,000,000	42,281,920	25,606,287	16,675,633
Class B Common Stock	69,120,000	34,560,000	21,836,745	12,723,255


	January 31, 2023		January 31, 2022
Weighted-average remaining lease term (years):
Operating leases	9.8		10.1
Finance leases	8.3		3.0
Weighted-average discount rate:
Operating leases	3.82	%	3.58	%
Finance leases	6.30	%	3.21	%


(in millions)	Foreign Currency Translation		Derivative Financial Instruments		Minimum Pension Liability Adjustment		Accumulated Other Comprehensive Income (Loss)
Balance as of October 31, 2022	$	(316.5)	$	72.8	$	(58.6)	$	(302.3)
Other comprehensive income (loss)	51.0		(25.7)		(2.4)		22.9
Balance as of January 31, 2023	$	(265.5)	$	47.1	$	(61.0)	$	(279.4)


(in millions)	Foreign Currency Translation		Derivative Financial Instruments		Minimum Pension Liability Adjustment		Accumulated Other Comprehensive Income (Loss)
Balance as of October 31, 2021	$	(295.4)	$	(3.6)	$	(57.5)	$	(356.5)
Other comprehensive income (loss)	(27.2)		11.8		3.1		(12.3)

Balance as of January 31, 2022	$	(322.6)	$	8.2	$	(54.4)	$	(368.8)


Three Months Ended January 31, (in millions)	2023		2022
Net cash provided by operating activities	$	32.9	$	22.4
Net cash used in investing activities	(269.1)		(45.8)
Net cash provided by financing activities	239.5		54.0
Effects of exchange rates on cash	10.6		(18.6)
Net increase in cash and cash equivalents	13.9		12.0
Cash and cash equivalents at beginning of year	147.1		124.6
Cash and cash equivalents at end of period	$	161.0	$	136.6


Period	Total Number of Shares of Class A Common Stock Purchased	Average Price Paid per Share of Class A Common Stock*		Total Number of Shares of Class B Common Stock Purchased	Average Price Paid per Share of Class B Common Stock*		Total Number of Shares Purchased as Part of Publicly Announced Program	Approximate Dollar Value That May Yet be Purchased Under the Program
November 1, 2022 to November 30, 2022	—	$	—	75,149	$	74.90	75,149	$	58,258,591
December 1, 2022 to December 31, 2022	—	—		73,626	75.89		73,626	52,670,848
January 1, 2023 to January 31, 2023	—	—		83,171	79.72		83,171	46,040,699
Total	—	—		231,946	76.94		231,946


Exhibit No.						Description of Exhibit

31.1						Certification of Chief Executive Officer Pursuant to Rule 13a — 14(a) of the Securities Exchange Act of 1934.

31.2						Certification of Chief Financial Officer Pursuant to Rule 13a — 14(a) of the Securities Exchange Act of 1934.

32.1						Certification of Chief Executive Officer required by Rule 13a —14(b) of the Securities Exchange Act of 1934 and Section 1350 of Chapter 63 of Title 18 of the United States Code.

32.2						Certification of Chief Financial Officer required by Rule 13a — 14(b) of the Securities Exchange Act of 1934 and Section 1350 of Chapter 63 of Title 18 of the United States Code.

10.1						Amended and Restated 2005 Outside Directors Equity Award Plan

101						The following financial statements from the Company’s Quarterly Report on Form 10-Q for the quarter ended January 31, 2023, formatted in Inline XBRL (Extensible Business Reporting Language): (i) Condensed Consolidated Statements of Income and Comprehensive Income (Loss), (ii) Condensed Consolidated Balance Sheets, (iii) Condensed Consolidated Statements of Cash Flow and (iv) Notes to Condensed Consolidated Financial Statements.


						GREIF, INC.
						(Registrant)

Date: March 3, 2023						/s/ LAWRENCE A. HILSHEIMER
						Lawrence A. Hilsheimer
						Executive Vice President and Chief Financial Officer


Date: March 3, 2023									/s/ OLE G. ROSGAARD
									Ole G. Rosgaard, President and Chief Executive Officer (Principal Executive Officer)


Date: March 3, 2023									/s/ LAWRENCE A. HILSHEIMER
									Lawrence A. Hilsheimer, Executive Vice President and Chief Financial Officer (Principal Financial Officer)


Date: March 3, 2023									/s/ OLE G. ROSGAARD
									Ole G. Rosgaard,
									President and Chief Executive Officer


Date: March 3, 2023									/s/ LAWRENCE A. HILSHEIMER
									Lawrence A. Hilsheimer,
									Executive Vice President and Chief Financial Officer