Greif reports fourth quarter 2015 results
Delaware, ohio--(business wire)--greif, inc. (nyse: gef, gef.b), a world leader in industrial packaging products and services, today reported fourth quarter 2015 net income attributable to the corporation totaling $12.4 million or $0.21 per diluted class a share on sales of $868.5 million compared with net income of $8.7 million or $0.15 per diluted class a share on sales of $1,048.1 million in the fourth quarter of 2014. after adjusting for the effect of divestitures for both quarters and currency translation for the fourth quarter 20151, sales were 2.0 percent lower for the quarter when compared to the fourth quarter of 2014. the reduction was due to lower volumes and decreases in steel costs that are passed through to customers, partially offset by the impact of discrete strategic pricing actions. excluding the impact of special items2, earnings were $0.76 per diluted class a share for the fourth quarter of 2015 compared to $0.60 per diluted class a share for the fourth quarter of 2014. the improvement was due primarily to reductions in sg&a expenses related to our transformation initiatives and the reduction in full year tax expense related to the realization of benefits from the implementation of discrete tax planning strategies and the adjustment of recorded tax liabilities. pete watson, president and chief executive officer, stated “we continue to demonstrate the discipline needed to achieve our transformation goals despite challenging market conditions. as we move forward, we will continue to leverage all aspects of the greif business system. while progress is being made, much work remains. i am confident we are on the right path to achieve our transformation commitments, improve earnings, increase cash flow and deliver value to our shareholders.” segment results net sales are impacted primarily by the volume of products sold, selling prices, product mix and the impact of changes in foreign currencies against the u.s. dollar. the table below shows the percentage impact of each on our change in net sales, excluding divestitures, from the three months that ended on october 31, 2014 to the three months that ended on october 31, 2015, for the business segments with manufacturing operations. rigid industrialpackaging & services flexible products& services ______________________________________ rigid industrial packaging & services net sales decreased 20.1 percent to $601.1 million for the fourth quarter of 2015 compared with $752.7 million for the fourth quarter of 2014. excluding the impact of divestitures3, net sales decreased 16.9 percent for the fourth quarter of 2015 compared with the fourth quarter of 2014. operating profit was $10.9 million for the fourth quarter of 2015 compared to $46.7 million for the fourth quarter of 2014. the decrease was primarily attributable to the same factors impacting net sales and higher restructuring and non-cash asset impairment charges, partially offset by improvements in sg&a expenses. operating profit before special items and excluding the impact of divestitures was $42.3 million for the fourth quarter of 2015 versus $58.6 million for the fourth quarter of 2014. paper packaging net sales decreased 3.6 percent to $179.8 million for the fourth quarter of 2015 compared with $186.6 million for the fourth quarter of 2014. excluding the impact of divestitures, net sales decreased 0.7 percent to $179.8 million for the fourth quarter of 2015 compared with $181.1 million for the fourth quarter of 2014 due primarily to the annual maintenance shutdown at our massillon, oh mill that occurred during the fourth quarter of 2015 as opposed to the third quarter in 2014. operating profit was $32.6 million for the fourth quarter of 2015 compared with $41.4 million for the fourth quarter of 2014. the decrease was primarily due to the same factors impacting net sales, price decreases driven by a reduction in the published index prices for medium containerboard and a reduction in gain on sale of businesses of $3.7 million. flexible products & services net sales decreased 26.7 percent to $73.3 million for the fourth quarter of 2015 compared with $100.0 million for the fourth quarter of 2014. excluding the impact of divestitures, net sales decreased 17.9 percent to $73.3 million for the fourth quarter of 2015 compared with $89.3 million for the fourth quarter of 2014. operating loss was $12.8 million for the fourth quarter of 2015 versus an operating loss of $56.2 million for the fourth quarter of 2014. operating loss before special items totaled $5.3 million for the fourth quarter of 2015 versus $6.4 million for the fourth quarter of 2014. the decrease in operating loss before special items was primarily due to a reduction in sg&a expenses and production costs as a result of transformation efforts in the segment, partially offset by higher costs of the move to an in-house labor force in turkey, which was prompted by changes in the local regulatory environment. land management net sales increased 62.5 percent to $14.3 million for the fourth quarter of 2015 compared with $8.8 million for the fourth quarter of 2014. the increase in net sales was due to the sale of the remaining 5,200 acres of development properties in canada during the fourth quarter of 2015. operating profit was $1.4 million for the fourth quarter of 2015 compared with $5.6 million for the fourth quarter of 2014. the decrease in operating profit was primarily due to a reduction in gains on sale of property, plant and equipment of $2.6 million as no core timberland property was sold in the three months ended october 31, 2015. dividends on december 8, 2015, the board of directors declared quarterly cash dividends of $0.42 per share of class a common stock and $0.62 per share of class b common stock. dividends are payable on january 1, 2016 to stockholders of record at the close of business on december 21, 2015. 3 company outlook in fiscal year 2016, the company’s results are expected to benefit from further execution of our transformation efforts. these improvements are expected to be achieved despite the continuation of a sluggish global industrial economy and continued strengthening of the u.s. dollar relative to other currencies adversely impacting our results. we anticipate that our fiscal year 2016 class a earnings per share will be between $2.05 - $2.35 per share, excluding gains and losses on the sales of businesses, timberland and property, plant and equipment, acquisition costs and restructuring and impairment charges. selected financial highlights diluted class a earnings per share attributable to greif, inc. before special items special items impact of total special items, net of tax, on diluted class a earnings per share attributable to greif, inc. impact ofdivestitures excluding theimpact ofdivestitures2015 impact ofdivestitures excluding theimpact ofdivestitures2014 excluding theimpact ofdivestitures impact ofcurrencytranslation excluding theimpact ofdivestituresand currencytranslation conference call the company will host a conference call to discuss the fourth quarter of 2015 results on december 11, 2015, at 10 a.m. eastern time (et). to participate, domestic callers should call 877-485-3107 and ask for the greif conference call. the number for international callers is +1 201-689-8427. phone lines will open at 9:50 a.m. et. the conference call will also be available through a live webcast, including slides, which can be accessed at www.greif.com in the investor center/conference calls. a replay of the conference call will be available on the company’s website approximately one hour following the call. the company encourages interested investors, analysts and portfolio managers to submit questions in advance of the conference call regarding greif’s quarterly performance to investors@greif.com. questions will be accepted until thursday, december 10 at 5:00 p.m. et. the company will address both previously submitted questions and questions asked during the call. about greif greif is a world leader in industrial packaging products and services. the company produces steel, plastic, fibre, flexible and corrugated containers and containerboard, and provides reconditioning, blending, filling and packaging services for a wide range of industries. greif also manages timber properties in north america. the company is strategically positioned in more than 50 countries to serve global as well as regional customers. additional information is on the company's website at www.greif.com. 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 oct. 31, 2014. the company undertakes no obligation to update or revise any forward-looking statements. 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 operations subject us to currency exchange and political risks 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 continuing consolidation of our customer base and suppliers may intensify pricing pressure, (v) we operate in highly competitive industries, (vi) our business is sensitive to changes in industry demands, (vii) raw material and energy price fluctuations and shortages may adversely impact our manufacturing operations and costs, (viii) we may encounter difficulties arising from acquisitions, (ix) we may incur additional restructuring costs and there is no guarantee that our efforts to reduce costs will be successful, (x) tax legislation initiatives or challenges to our tax positions may adversely impact our results or condition, (xi) full realization of our deferred tax assets may be affected by a number of factors, (xii) several operations are conducted by joint ventures that we cannot operate solely for our benefit, (xiii) our ability to attract, develop and retain talented and qualified employees, managers and executives is critical to our success, (xiv) our business may be adversely impacted by work stoppages and other labor relations matters, (xv) we may be subject to losses that might not be covered in whole or in part by existing insurance reserves or insurance coverage, (xvi) our business depends on the uninterrupted operations of our facilities, systems and business functions, including our information technology and other business systems, (xvii) a security breach of customer, employee, supplier or company information may have a material adverse effect on our business, financial condition and results of operations, (xviii) legislation/regulation related to environmental and health and safety matters and corporate social responsibility could negatively impact our operations and financial performance, (xix) product liability claims and other legal proceedings could adversely affect our operations and financial performance, (xx) we may incur fines or penalties, damage to our reputation or other adverse consequences if our employees, agents or business partners violate, or are alleged to have violated, anti-bribery, competition or other laws, (xxi) changing climate, climate change regulations and greenhouse gas effects may adversely affect our operations and financial performance, (xxii) the frequency and volume of our timber and timberland sales will impact our financial performance, (xxiii) changes in u.s. generally accepted accounting principles and sec rules and regulations could materially impact our reported results, (xxiv) if the company fails to maintain an effective system of internal control, the company may not be able to accurately report financial results or prevent fraud, and (xxv) the company has a significant amount of goodwill, and if impaired in the future, would adversely impact our results of operations. changes in business results may impact our book tax rates. 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 securities and exchange commission. 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. income before income tax expense and equity earnings of unconsolidated affiliates, net $ $ increase (decrease) in cash from changes in certain assets and liabilities and other the asia pacific and latin america region includes businesses from rigid industrial packaging & services and flexible products & services. for the twelve months ended october 31, 2015, operating profit for asia pacific and latin america includes a $9.3 million venezuelan cost of products sold adjustment and a $15.0 million non-cash asset impairment of the company’s venezuelan property, plant & equipment discussed in the 2015 third quarter earnings release. - - - total ebitda before special items less: gain (loss) on disposal of properties, plants, equipment and businesses, net less: gain (loss) on disposal of properties, plants, equipment and businesses, net less: gain (loss) on disposal of properties, plants, equipment and businesses, net less: gain (loss) on disposal of properties, plants, equipment and businesses, net impact ofdivestitures excluding theimpact ofdivestitures2015 impact ofdivestitures excluding theimpact ofdivestitures2015 15 impact ofdivestitures excluding theimpact ofdivestitures2014 impact ofdivestitures excluding theimpact ofdivestitures2014 (decrease) innet sales ($) (decrease) innet sales (%) (decrease) innet sales ($) (decrease) innet sales (%)
