Ohio-based industrial packaging products and services provider Greif has reported that its net sales decreased 21%to $666.3 million in the first quarter of 2009 compared to $846.3 million in the first quarter of 2008. excluding the impact of foreign currency translation, net sales decreased 15%.
The $180 million decline includes industrial packaging of $141.8 million and paper packaging of $38.4 million. The 15% constant-currency decrease was due to lower sales volumes across all product lines, partially offset by generally higher selling prices compared to the same period last year.
Operating profit before special items was $46.3 million for the first quarter of 2009 compared to $104.6 million for the first quarter of 2008. The $58.3 million decrease was due to industrial packaging $55.7 million and timber $2.9 million, partially offset by an increase in paper packaging $0.3 million.
The $55.7 million decrease in industrial packaging was primarily due to a $29.9 million pretax net gain on the divestiture of business units in Australia and Zimbabwe, which was recognized in the first quarter of 2008, and lower net sales. GAAP operating profit was $17.3 million and $94.2 million in the first quarter of 2009 and 2008, respectively.
Net income before special items was $21.7 million for the first quarter of 2009 compared to $68.6 million for the first quarter of 2008. Diluted earnings per share before special items were $0.38 compared to $1.16 per Class A share and $0.56 compared to $1.76 per Class B share for the first quarter of 2009 and 2008, respectively.
Michael Gasser, Chairman and CEO of Greif, said: "Historically, our first quarter performance is adversely affected by seasonal factors. This was further compounded in 2009 by the global economic downturn that began to impact our company in the fourth quarter of 2008. We announced comprehensive plans last December to mitigate these challenges, including acceleration of the Greif Business System initiatives.
“We are aggressively implementing these plans and are on track to achieve the anticipated annual savings. Last week we announced the successful completion and closing of $700 million of senior secured credit facilities, which substantially increases our financial flexibility and enables us to continue executing our growth strategy in a disciplined manner."
