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Greif, Inc. Reports Third Quarter 2009 Results.

Article Excerpt
DELAWARE, Ohio, Sept. 2 /PRNewswire-FirstCall/ --



-- Net sales decreased 31 percent (24 percent excluding the impact of foreign currency translation) to $717.6 million in the third quarter of 2009 from $1,034.1 million in the third quarter of 2008. -- Net income before special items, as defined below, was $51.6 million ($0.88 per diluted Class A share) in the third quarter of 2009 compared to $69.5 million ($1.18 per diluted Class A share) in the third quarter of 2008. GAAP net income was $39.7 million ($0.68 per diluted Class A share) and $64.6 million ($1.10 per diluted Class A share) in the third quarter of 2009 and 2008, respectively.

Greif, Inc. , a global leader in industrial packaging products and services, today announced results for its third fiscal quarter, which ended July 31, 2009.

Michael J. Gasser, chairman and chief executive officer, said, "Our third quarter 2009 results benefited from significant permanent cost reduction actions and gradually improving volumes, especially during the final month of the quarter. We expect to achieve savings of at least $150 million in fiscal 2009 due to Greif Business System (GBS) and accelerated GBS initiatives and specific contingency actions. We believe these factors will benefit our fourth quarter results and position us for a stronger performance in fiscal 2010."

Gasser continued, "We continue to execute our disciplined growth strategy. During the third quarter, we increased the Company's financial capacity and flexibility through the issuance of new 10-year Senior Notes. Two small tuck-in acquisitions were completed during the quarter and additional opportunities are being pursued to further strengthen Greif's product portfolio and global footprint."

Special Items and GAAP to Non-GAAP Reconciliations

Special items are as follows: (i) for the third quarter of 2009, restructuring charges of $10.3 million ($10.7 million net of tax) and restructuring-related inventory charges of $0.8 million ($1.2 million net of tax); and (ii) for third quarter of 2008, restructuring charges of $6.6 million ($5.0 million net of tax) and gain on timberland disposals, net of $0.2 million ($0.1 million net of tax). Reconciliations of the differences between all non-GAAP financial measures used in this release with the most directly comparable GAAP financial measures are included in the financial schedules that are a part of this release.

Consolidated Results

Net sales decreased 31 percent (24 percent excluding the impact of foreign currency translation) to $717.6 million in the third quarter of 2009 compared to a record $1,034.1 million in the third quarter of 2008. The $316.5 million decline was due to lower sales in Industrial Packaging ($258.2 million), Paper Packaging ($57.4 million) and Timber ($0.9 million). The 24 percent constant-currency decrease was due to lower sales volumes and lower selling prices due to the pass-through of lower raw material costs.

Operating profit before special items was $81.3 million for the third quarter of 2009 compared to $107.7 million for the third quarter of 2008. The lower operating results for Industrial Packaging ($23.6 million) and Paper Packaging ($5.1 million), as compared to the same period last year, were due to lower sales volumes and lower prices, significantly offset by cost reductions achieved under the previously announced incremental Greif Business System (GBS) and accelerated GBS...

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