DELAWARE, Ohio (News release) -- Greif, Inc., a global leader in industrial packaging products and services, announced fiscal first quarter 2025 results.
Fiscal First Quarter 2025 Financial Highlights:
(all results compared to the first quarter of 2024 unless otherwise noted)
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Net income decreased 87.2% to $8.6 million or $0.15 per diluted Class A share compared to net income of $67.2 million or $1.17 per diluted Class A share, primarily due to a non-recurring income tax benefit of $48.1 million in the prior year quarter. Net income, excluding the impact of adjustments(1), decreased 69.1% to $22.5 million or $0.39 per diluted Class A share compared to net income, excluding the impact of adjustments, of $72.7 million or $1.27 per diluted Class A share.
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Adjusted EBITDA(2) increased 5.9% to $145.1 million compared to Adjusted EBITDA of $137.0 million.
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Net cash provided by operating activities decreased by $35.3 million to a use of $30.8 million. Adjusted free cash flow(3) decreased by $13.7 million to a use of $61.9 million.
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Total debt of $2,840.2 million increased by $548.4 million, primarily as a result of the acquisition of Ipackchem. Net debt(4) increased by $526.6 million to $2,639.1 million. Our leverage ratio(5) increased to 3.63x from 2.46x in the prior year quarter.
Strategic Actions and Announcements
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Intend to divest our approximately 176,000 acres of timberland in the Southeastern United States. Proceeds will be applied towards debt reduction.
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Announced closure of A1 uncoated recycled paperboard machine in Austell, GA as well as the containerboard and uncoated recycled paperboard mill in Fitchburg, MA.
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Progress on announced cost optimization project proceeding on target, with $13.0 million of annual run-rate savings achieved through the end of first quarter 2025.
Commentary from CEO Ole Rosgaard
"Greif is actively managing a historical period of industrial activity contraction while simultaneously transforming our internal processes and our portfolio mix for optimal alignment to long-term profitable earnings growth." said Ole Rosgaard, Chief Executive Officer of Greif, "This quarter highlights the resilience of our new business model amid multiple headwinds and demonstrates our willingness to invest in the long-term future of Greif while managing the present. We're excited for what the future holds and for accelerating our growth in both the near and long-term. Our announcement to seek the sale of our Soterra land management holdings demonstrates our commitment to constantly assessing our business portfolio for maximum value creation and taking decisive action to pursue long-term sustainable earnings growth."
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(1)
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Adjustments that are excluded from net income before adjustments and from earnings per diluted Class A share before adjustments are acquisition and integration related costs, restructuring charges, non-cash asset impairment charges, (gain) loss on disposal of properties, plants and equipment, net, (gain) loss on disposal of businesses, net, and other costs.
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(2)
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Adjusted EBITDA is defined as net income, plus interest expense, net, plus income tax (benefit) expense, plus other (income) expense, net, plus depreciation, depletion and amortization expense, plus acquisition and integration related costs, plus restructuring charges, plus non-cash asset impairment charges, plus (gain) loss on disposal of properties, plants and equipment, net, plus (gain) loss on disposal of businesses, net, plus other costs.
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(3)
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Adjusted free cash flow is defined as net cash provided by operating activities, less cash paid for purchases of properties, plants and equipment, plus cash paid for acquisition and integration related costs, plus cash paid for integration related Enterprise Resource Planning (ERP) systems and equipment, plus cash paid for fiscal year-end change costs.
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(4)
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Net debt is defined as total debt less cash and cash equivalents.
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(5)
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Leverage ratio for the periods indicated is defined as adjusted net debt divided by trailing twelve month Adjusted EBITDA, each as calculated under the terms of the Company's Second Amended and Restated Credit Agreement dated as of March 1, 2022, filed as Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended January 31, 2022 (the "2022 Credit Agreement"). As calculated under the 2022 Credit Agreement, adjusted net debt was $2,558.4 million and $1,989.9 million as of January 31, 2025 and January 31, 2024, respectively, and trailing twelve month Credit Agreement adjusted EBITDA was $705.7 million and $807.4 million as of January 31, 2025 and January 31, 2024, respectively.
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