Business Context and Reporting Period
Company: Greif Bros. Corporation (Greif, Inc.)
Filing Type: Form 10-K Annual Report
Reporting Period: Fiscal year ended October 31, 1995
Business Overview: The Company manufactures and sells a variety of packaging products, including steel drums, fibre drums, plastic drums, corrugated containers, and wood cut stock. Operations are conducted through numerous facilities across the United States and Canada. The Company also owns approximately 320,000 acres of timber tracts.
Key Financial Metrics
Note: Specific consolidated revenue, net income, cash flow, and debt figures are incorporated by reference from the 1995 Annual Report to Shareholders and are not explicitly detailed in the provided text.
- Reserves for Doubtful Accounts: Total reserves deducted from applicable assets were $1,486,000 at October 31, 1995, down from $1,686,000 in 1994.
- Environmental Reserve: A reserve of $2,000,000 was recorded in fiscal 1995 for potential remediation costs at the Strother Field plant in Winfield, Kansas.
- Stock Outstanding (as of Dec 15, 1995):
- Class A Common Stock: 10,873,172 shares
- Class B Common Stock: 12,001,793 shares
- Dividends: The Company generally pays five dividends per fiscal year.
Material Changes and Operational Updates
- Executive Leadership: William B. Sparks, Jr. was elected President and Chief Operating Officer in 1995. Michael J. Gasser serves as Chairman and CEO.
- Employment Agreements: New long-term employment agreements were entered into in November 1995 for Mr. Gasser (15-year term) and Mr. Sparks (11-year term), fixing minimum basic salaries.
- Stock Option Plan: In 1995, the Company adopted an Incentive Stock Option Plan allowing for up to 1,000,000 shares of Class A Common Stock to be granted to key employees.
- Related Party Transactions: The law firm of Hull & Hull (partnered by Director Allan Hull) received $525,950 in legal fees plus $42,120 in expenses. A subsidiary contributed approximately $4,250,000 to a worldwide relief organization founded by a Director.
Risks, Contingencies, and Outlook
- Environmental Liability: The Company faces potential exposure of up to $3,000,000 regarding pollution at its Winfield, Kansas plant. While a $2,000,000 reserve has been recorded, the final remedial plan is subject to public comment and further engineering analysis. The Company believes the soil pollution estimates may be unduly magnified.
- Legal Proceedings: No pending material legal proceedings other than the environmental matter noted above. The Company is generally classified as a "de minimis" participant in other environmental sites.
- Stock Performance: As of 1995, the Company's stock performance index stood at 184, compared to 191 for the S&P 500 and 192 for the Peer Index (Paper Containers and Forest Products).
- Management Commentary: Management notes that the stock performance graph may not fully represent the true value of the Company.
Investor Verification Checklist
- Verify the final remediation plan and total cost for the Winfield, Kansas environmental site, as the $3,000,000 estimate is based on extreme assumptions.
- Review the 1995 Annual Report to Shareholders (pages 26-40) for consolidated revenue, profit margins, and cash flow statements, as these are not included in the 10-K text provided.
- Confirm the impact of the new long-term employment agreements on future compensation expenses.
- Assess the concentration of ownership, noting that management and directors beneficially own approximately 76.70% of Class B Common Stock.
- Monitor the status of the Incentive Stock Option Plan and potential dilution from the 1,000,000 share authorization.