GREIF INC (Form: 10-Q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended April 30, 2003

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

For the transition period from to

Commission File Number 1-566

GREIF, INC.

(Exact name of registrant as specified in its charter)

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)

Registrant’s telephone number, including area code (740) 549-6000

Greif Bros. Corporation

Former name, former address and former fiscal year, if changed since last report.

Indicated 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 by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). 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		10,570,846 shares
Class B Common Stock		11,724,403 shares

PART I. FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

GREIF, INC. AND SUBSIDIARY COMPANIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

(Dollars in thousands, except per share amounts)

	Three months ended April 30,					Six months ended April 30,
	2003			2002		2003			2002
Net sales	$	423,563		$	396,913	$	809,986		$	762,103
Costs of products sold		349,552			315,594		668,619			612,698

Gross profit		74,011			81,319		141,367			149,405
Selling, general and administrative expenses		55,838			66,275		112,002			123,183
Restructuring charges		17,449			—		18,988			—

Operating profit		724			15,044		10,377			26,222
Interest expense, net		14,413			13,227		28,170			27,095
Gain on sale of timberland		1,568			5,222		1,964			8,550
Other income, net		2,039			698		1,817			4,037

Income (loss) before income tax expense (benefit) and equity in earnings of affiliates and minority interests		(10,082	)		7,737		(14,012	)		11,714
Income tax expense (benefit)		(3,069	)		2,785		(4,484	)		4,217
Equity in earnings of affiliates and minority interests		1,874			1,964		3,831			3,225

Income (loss) before cumulative effect of change in accounting principle		(5,139	)		6,916		(5,697	)		10,722
Cumulative effect of change in accounting principle		—			—		4,822			—

Net income (loss)	$	(5,139	)	$	6,916	$	(875	)	$	10,722


Basic and diluted earnings (loss) per share:
Class A Common Stock (before cumulative effect)	$	(0.18	)	$	0.24	$	(0.20	)	$	0.38
Class A Common Stock (after cumulative effect)	$	(0.18	)	$	0.24	$	(0.03	)	$	0.38
Class B Common Stock (before cumulative effect)	$	(0.27	)	$	0.37	$	(0.31	)	$	0.57
Class B Common Stock (after cumulative effect)	$	(0.27	)	$	0.37	$	(0.05	)	$	0.57

See accompanying Notes to Consolidated Financial Statements

GREIF, INC. AND SUBSIDIARY COMPANIES

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)

	April 30, 2003			October 31, 2002
	(Unaudited)
ASSETS
Current assets
Cash and cash equivalents	$	20,192		$	25,396
Trade accounts receivable—less allowance of $10,263 in 2003 and $9,857 in 2002		263,631			265,110
Inventories		152,451			144,320
Net assets held for sale		7,609			13,945
Deferred tax assets		2,869			3,652
Prepaid expenses and other		45,464			57,398

		492,216			509,821

Long-term assets
Goodwill—less accumulated amortization		231,078			232,577
Other intangible assets—less accumulated amortization		26,356			28,999
Investment in affiliates		150,210			149,820
Other long-term assets		46,791			45,060

		454,435			456,456

Properties, plants and equipment
Timber properties—less depletion		84,651			81,380
Land		91,978			84,271
Buildings		258,826			244,967
Machinery and equipment		764,900			748,184
Capital projects in progress		27,595			26,042

		1,227,950			1,184,844
Accumulated depreciation		(428,321	)		(392,826	)

		799,629			792,018

	$	1,746,280		$	1,758,295

See accompanying Notes to Consolidated Financial Statements

REIF, INC. AND SUBSIDIARY COMPANIES

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)

	April 30, 2003			October 31, 2002
	(Unaudited)
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	131,079		$	133,585
Accrued payrolls and employee benefits		35,698			48,974
Restructuring reserves		9,427			2,300
Short-term borrowings		23,826			20,005
Current portion of long-term debt		3,000			3,000
Other current liabilities		72,018			73,705

		275,048			281,572

Long-term liabilities
Long-term debt		630,248			629,982
Deferred tax liability		140,545			135,577
Postretirement benefit liability		49,989			47,131
Other long-term liabilities		86,291			93,559

		907,073			906,249

Minority interest		1,544			1,345

Shareholders’ equity
Common stock, without par value		12,147			11,974
Treasury stock, at cost		(62,143	)		(61,130	)
Retained earnings		678,559			687,204
Accumulated other comprehensive loss:
- foreign currency translation