GREIF BROS. CORPORATION AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JANUARY 31, 1996
NOTE 1 - CAPITAL STOCK AND RETAINED EARNINGS
Class A Common Stock is entitled to cumulative dividends
of 1 cent a share per year after which Class B Common Stock is
entitled to non-cumulative dividends up to 1/2 cent a share per
year. Further distribution in any year must be made in
proportion of 1 cent a share for Class A Common Stock to 1-1/2
cents a share for Class B Common Stock. The Class A Common Stock
shall have no voting power nor shall it be entitled to notice of
meetings of the stockholders, all rights to vote and all voting
power being vested exclusively in the Class B Common Stock unless
four quarterly cumulative dividends upon the Class A Common Stock
are in arrears. There is no cumulative voting.
NOTE 2 - DIVIDENDS PER SHARE
The following dividends per share were paid during the
period indicated:
Three Months Ended
January 31,
1996 1995
Class A Common Stock $.24 $.22
Class B Common Stock $.35 $.32
NOTE 3 - CALCULATION OF NET INCOME PER SHARE
Net income per share was calculated using the following
number of shares for the period presented:
Class A Common Stock - 10,873,172 shares
Class B Common Stock - 12,081,793 shares
NOTE 4 - INVENTORIES
Inventories are comprised principally of raw materials.
NOTE 5 - TREASURY SHARES ACQUIRED
Effective November 6, 1995, Macauley & Company (the
Partnership) in which the Company was a limited partner, was
liquidated. Prior to the liquidation, the Partnership held Class
B Common Stock (2,400,000 shares) of the Company. Upon
liquidation, the Company received 1,200,000 shares of the Class B
Common Stock. The Company recorded the liquidation by crediting
interest in partnership and charging an equal amount to treasury
stock.
MANAGEMENT'S DISCUSSION AND ANALYSIS
Results of Operations
Historically, revenues or earnings may or may not be
representative of future operations because of various economic
factors. The following comparative information is presented for
the 3-month periods ended January 31, 1996 and January 31, 1995.
Net sales decreased 6% during the current quarter compared
to the previous period. This decrease was primarily the result
of decreases in the containerboard segment, which was
significantly affected by lower prices of the products in this
segment.
The gain on sales of timber and timber properties
decreased due to the sale of timber properties to the U.S. Forest
Service and more salvage timber sales in the prior year.
The cost of products sold as a percentage of sales
increased slightly as compared to the prior year. This increase
is primarily the result of lower net sales of the containerboard
segment as compared to the previous period.
Liquidity and Capital Resources
As indicated in the Consolidated Balance Sheet, elsewhere
in this report and discussed in greater detail in the 1995 Annual
Report to Shareholders, the Company is dedicated to maintaining a
strong financial position. It is our belief that this dedication
is extremely important during all economic times.
As discussed in the 1995 Annual Report, the Company is
subject to the economic conditions of its customers. During this
period, the Company has been able to utilize its developed
financial position to meet its continued business needs.
The current ratio as of January 31, 1996 is an indication
of the continuation of the Company's strong liquidity.
The reduction in trade accounts receivable since year-end
is due to lower sales during the first quarter of fiscal 1996
compared to the fourth quarter of fiscal 1995. Likewise, the
inventory and accounts payable balances are lower due to the
lower sales.
The increase in buildings is the result of completing a
manufacturing plant in Mason, Michigan. This increase was
partially offset by a reduction in construction in progress.
Capital expenditures were $12,375,000 during the three
months ended January 31, 1996. These capital expenditures were
principally needed to replace and improve equipment.
The Company has approved future purchases, primarily for
equipment, of approximately $43 million. Self-financing and low
interest rate borrowing has been the primary source for financing
such capital expenditures.
Effective February 1, 1996, the Company acquired Decatur
Container Corporation, a manufacturer of corrugated boxes and
other related items, located in Decatur, Illinois. This
acquisition will add approximately $8 million to annual sales.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
There are no material pending legal proceedings.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(a.) The Company held its Annual Meeting of Stockholders on
February 26, 1996.
(b.) At the Annual Meeting of Stockholders, the following
nominees were elected:
Charles R. Chandler
Michael H. Dempsey
Naomi C. Dempsey
Michael J. Gasser
Daniel J. Gunsett
Allan Hull
Robert C. Macauley
William B. Sparks, Jr.
J Maurice Struchen
(c.) At the Annual Meeting of Stockholders, the adoption of a
proposed amendment to the Greif Bros. Corporation By-laws
was approved by the stockholders, increasing the
number of directors from seven to nine. The inspectors
of election certified the following vote tabulations:
For 11,130,648
Against 100,182
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a.) Exhibits.
None.
(b.) Reports on Form 8-K.
No events occurred requiring Form 8-K to be filed.
OTHER COMMENTS
The information furnished herein reflects all adjustments
which are, in the opinion of management, necessary for a fair
presentation of the consolidated balance sheet as of January 31,
1996, the consolidated statement of income for the 3-month
periods ended January 31, 1996 and 1995, and the consolidated
statement of cash flows for the 3-month periods then ended.
These financial statements are unaudited; however, at year-end an
audit will be made for the fiscal year by independent certified
public accountants.
SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of 1934, the Company has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.
Greif Bros. Corporation
(Registrant)
Date March 8, 1996
John K. Dieker
Controller