DELAWARE, Ohio (News release) -- Greif, Inc., a global leader in industrial packaging products and services, announced fiscal third quarter 2025 results.
As previously announced, on June 30, 2025, we entered into a definitive agreement to divest our containerboard business, including our CorrChoice sheet feeder system (the "Containerboard Business"), in an all-cash transaction for $1.8 billion to Packaging Corporation of America. The transaction is expected to close effective as of August 31, 2025, subject to customary closing conditions. As a result, the Containerboard Business is presented as discontinued operations beginning in the third quarter of 2025. Unless otherwise noted, the discussions and disclosure tables throughout this press release relate only to our continuing operations.
Fiscal Third Quarter 2025 Financial Highlights:
(all current period results are compared to the third quarter of 2024 and both periods reflect only continuing operations unless otherwise noted)
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Net income decreased 49.6% to $39.3 million or $0.67 per diluted Class A share compared to net income of $78.0 million or $1.35 per diluted Class A share primarily due to a $46.1 million gain from the divestiture of Delta Petroleum Company, Inc. during the third quarter of 2024 (the "Delta Divestiture"). Net income, excluding the impact of adjustments(1), increased 11.6% to $60.4 million or $1.03 per diluted Class A share compared to net income, excluding the impact of adjustments, of $54.1 million or $0.92 per diluted Class A share.
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Combined Adjusted EBITDA(2) increased 11% to $220.9 million compared to Combined Adjusted EBITDA of $199.4 million. Net income for the current period from continuing operations and discontinued operations was $39.3 million and $24.7 million, respectively, compared to $78.0 million and $9.1 million, also respectively.
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Adjusted EBITDA(3) increased 2.4% to $160.7 million compared to Adjusted EBITDA of $157.0 million.
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Net cash provided by operating activities increased by $123.1 million to a source of $199.9 million. Adjusted free cash flow(4) increased by $136.4 million to a source of $170.7 million.
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Total debt of $2,717.0 million decreased by $192.5 million. Net debt(5) decreased by $283.5 million to $2,431.8 million. Our leverage ratio(6) decreased to 3.1x from 3.6x in the prior year quarter.
Strategic Actions and Announcements
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Signed definitive agreement for the sale of timberlands business for $462.0 million to Molpus Woodlands Group, subject to customary closing conditions, with the closing anticipated October 1, 2025.
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Previously announced planned sale of Greif's Containerboard Business expected to close effective as of August 31, 2025.
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Continuing to make progress on cost optimization initiatives, with run-rate savings of $20.0 million achieved by the end of Q3 2025 and already at the midpoint of our committed $15 - $25 million range.
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Our Board of Directors declared quarterly cash dividends reflecting an increase of $0.02 per share on our Class A Common Stock and $0.03 per share on our Class B Common Stock, respectively, from the prior quarter's dividends on such shares, continuing our Board's commitment to increasing direct shareholder return while also continuing to invest in our business.
Commentary from CEO Ole Rosgaard
"Greif continued to execute this quarter, as evidenced in particular by our strong $171 million of adjusted free cash flow generation," stated Ole Rosgaard, President and Chief Executive Officer of Grief. "While demand remains mixed, we are driving cash production, ramping up our cost optimization, and executing on portfolio changes all of which give us high confidence in achieving our long-term commitments and creating value for our investors."
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(1) |
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 and other 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) |
See the financial schedules that are part of this release for a GAAP to Non-GAAP reconciliation of Adjusted EBITDA from discontinued operations and for the calculation of Combined Adjusted EBITDA. |
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(3) |
Adjusted EBITDA is defined as net income, plus interest expense, net, plus other (income) expense, net, plus income tax (benefit) expense, plus depreciation, depletion and amortization expense, plus acquisition and integration related costs, plus restructuring and other 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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(4) |
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 other nonrecurring costs. The cash flows from Containerboard Business have not been segregated and are included within the adjusted free cash flow. |
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(5) |
Net debt is defined as total debt less cash and cash equivalents. |
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(6) |
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 $2,382.2 million and $2,608.5 million as of July 31, 2025 and July 31, 2024, respectively, and trailing twelve month Credit Agreement EBITDA was $775.1 million and $730.5 million as of July 31, 2025 and July 31, 2024, respectively. Credit Agreement EBITDA includes total company consolidated results, which includes continuing operations and discontinued operations, as approved by our creditors under the 2022 Credit Agreement. |
