GREIF INC (Form: 10-Q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended April 30, 2005

¨	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

Not Applicable

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 ¨

The number of shares outstanding of each of the issuer’s classes of common stock at the close of business on April 30, 2005 was as follows:


Class A Common Stock		11,537,381 shares
Class B Common Stock		11,561,189 shares

PART I. FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

GREIF, INC. AND SUBSIDIARY COMPANIES

CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

(Dollars in thousands, except per share amounts)


	Three months ended April 30,						Six months ended April 30,
	2005			2004			2005			2004
Net sales	$	612,960		$	542,189		$	1,195,524		$	1,011,049
Cost of products sold		515,042			452,928			1,008,880			852,338

Gross profit		97,918			89,261			186,644			158,711

Selling, general and administrative expenses		56,068			55,745			115,789			106,770
Restructuring charges		10,621			12,278			17,807			27,537
Gain on sale of assets		4,194			1,122			14,538			5,231

Operating profit		35,423			22,360			67,586			29,635

Interest expense, net		10,693			10,716			20,786			22,963
Debt extinguishment charge		2,828			—			2,828			—
Other income, net		1,973			694			1,207			916

Income before income tax expense and equity in earnings of affiliates and minority interests		23,875			12,338			45,179			7,588

Income tax expense		7,001			3,800			12,966			2,337
Equity in earnings of affiliates and minority interests		(107	)		(89	)		(310	)		(168	)

Net income	$	16,767		$	8,449		$	31,903		$	5,083

Basic earnings per share:
Class A Common Stock	$	0.58		$	0.30		$	1.12		$	0.18
Class B Common Stock	$	0.88		$	0.45		$	1.67		$	0.27

Diluted earnings per share:
Class A Common Stock	$	0.57		$	0.30		$	1.09		$	0.18
	$	0.88		$	0.45		$	1.67		$	0.27

See accompanying Notes to Consolidated Financial Statements

GREIF, INC. AND SUBSIDIARY COMPANIES

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)

ASSETS


	April 30, 2005			October 31, 2004
	(Unaudited)
Current assets
Cash and cash equivalents	$	52,029		$	38,109
Trade accounts receivable – less allowance of $8,972 in 2005 and $11,454 in 2004		282,564			307,750
Inventories		222,149			191,457
Net assets held for sale		14,630			14,753
Deferred tax assets		5,738			6,636
Other current assets		66,567			53,977

		643,677			612,682

Long-term assets
Goodwill		235,853			237,803
Other intangible assets, net of amortization		25,454			27,524
Other long-term assets		56,363			54,547

		317,670			319,874

Properties, plants and equipment
Timber properties, net of depletion		130,263			129,141
Land		69,522			68,349
Buildings		322,978			321,183
Machinery and equipment		860,804			851,800
Capital projects in progress		42,404			37,192

		1,425,971			1,407,665
Accumulated depreciation		(568,957	)		(526,983	)

		857,014			880,682

	$	1,818,361		$	1,813,238

See accompanying Notes to Consolidated Financial Statements

GREIF, INC. AND SUBSIDIARY COMPANIES

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)

LIABILITIES AND SHAREHOLDERS’ EQUITY


	April 30, 2005			October 31, 2004
	(Unaudited)
Current liabilities
Accounts payable	$	241,930		$	281,265
Accrued payrolls and employee benefits		41,913			49,633
Restructuring reserves		14,252			17,283
Short-term borrowings		23,506			11,621
Other current liabilities		77,369			77,416

		398,970			437,218

Long-term liabilities
Long-term debt		466,215			457,415
Deferred tax liability		149,177			148,639
Pension liability		46,420			44,036
Postretirement benefit liability		49,401			48,667
Other long-term liabilities		34,583			46,444

		745,796			745,201

Minority interest		1,290			1,725

Shareholders’ equity
Common stock, without par value		41,147			27,382
Treasury stock, at cost		(69,438	)		(65,360	)
Retained earnings		734,773			711,919
Accumulated other comprehensive income (loss):
- foreign currency translation		13,627			5,655
- interest rate derivatives		(4,399	)		(7,097	)
- minimum pension liability		(43,405	)		(43,405	)

		672,305			629,094

	$	1,818,361		$	1,813,238

See accompanying Notes to Consolidated Financial Statements

GREIF, INC. AND SUBSIDIARY COMPANIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(Dollars in thousands)


For the six months ended April 30,	2005			2004
Cash flows from operating activities:
Net income	$	31,903		$	5,083
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Depreciation, depletion and amortization		50,174			52,807
Asset impairments		3,896			2,252
Deferred income taxes		2,832			3,851
Gain on disposals of properties, plants and equipment, net		(14,538	)		(5,231	)
Equity in earnings of affiliates, net of dividends received, and minority interests		310			(1,328	)
Increase (decrease) in cash from changes in certain assets and liabilities:
Trade accounts receivable		25,041			(8,200	)
Inventories