Greif Inc.
08/28/2025 | Press release | Distributed by Public on 08/28/2025 14:02
Quarterly Report for Quarter Ending July 31, 2025 (Form 10-Q)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
GENERAL
The terms "Greif," "our Company," "we," "us" and "our" as used in this discussion refer to Greif, Inc. and its subsidiaries.
Our 2024 fiscal year began on November 1, 2023 and ended on October 31, 2024. Any references in unaudited interim condensed consolidated financial statements included in this Quarterly Report on Form 10-Q (this "Form 10-Q") to the 2024 fiscal year or to any quarter of that year, relates to the fiscal year or quarter, as the case may be, ended October 31, 2024, unless otherwise stated. We are changing our fiscal year, effective for the 2025 fiscal year. The 2025 fiscal year began on November 1, 2024 and will end on September 30, 2025, and accordingly, will consist of eleven months. Our fourth fiscal quarter of 2025 will be the two-month period ending September 30, 2025. Thereafter, Our fiscal year will begin on October 1 and end on September 30 of the following year.
The discussion and analysis presented below relates to the material changes in financial condition and results of operations for the interim condensed consolidated balance sheet as of July 31, 2025 and the condensed consolidated balance sheet as of October 31, 2024, and for the interim condensed consolidated statements of income for the three and nine months ended July 31, 2025 and 2024. This discussion and analysis should be read in conjunction with the interim condensed consolidated financial statements that appear elsewhere in this Form 10-Q and "Management's Discussion and Analysis of Financial Condition and Results of Operations" included in our Annual Report on Form 10-K for the fiscal year ended October 31, 2024 (the "2024 Form 10-K"). Readers are encouraged to review the entire 2024 Form 10-K, as it includes information regarding Greif not discussed in this Form 10-Q. This information will assist in your understanding of the discussion of our current period financial results.
All statements, other than statements of historical facts, included in this Form 10-Q, including without limitation, statements regarding our future financial position, business strategy, budgets, projected costs, goals, trends, and plans and objectives of management for future operations, are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Forward-looking statements generally can be identified by the use of forward-looking terminology such as "may," "will," "expect," "intend," "estimate," "anticipate," "aspiration," "objective," "project," "believe," "continue," "on track" or "target" or the negative thereof or variations thereon or similar terminology. All forward-looking statements made in this Form 10-Q are based on assumptions, expectations, and other information currently available to management. Although we believe that the expectations reflected in forward-looking statements have a reasonable basis, we can give no assurance that these expectations will prove to be correct.
Forward-looking statements are subject to risks and uncertainties that could cause our actual results to differ materially from those forecasted, projected or anticipated, whether expressed in or implied by the statements. Such risks and uncertainties that might cause a difference include, but are not limited to, the following: (i) historically, our business has been sensitive to changes in general economic or business conditions, (ii) our global operations subject us to political risks, instability and currency exchange that could adversely affect our results of operations, (iii) the current and future challenging global economy and disruption and volatility of the financial and credit markets may adversely affect our business, (iv) the continuing consolidation of our customer base and suppliers may intensify pricing pressure, (v) we operate in highly competitive industries, (vi) our business is sensitive to changes in industry demands and customer preferences, (vii) raw material shortages, price fluctuations, global supply chain disruptions and high inflation may adversely impact our results of operations, (viii) energy and transportation price fluctuations and shortages may adversely impact our manufacturing operations and costs, (ix) we may encounter difficulties or liabilities arising from acquisitions or divestitures, (x) we may incur additional rationalization costs and there is no guarantee that our efforts to reduce costs will be successful, (xi) several operations are conducted by joint ventures that we cannot operate solely for our benefit, (xii) certain of the agreements that govern our joint ventures provide our partners with put or call options, (xiii) our ability to attract, develop and retain talented and qualified employees, managers and executives is critical to our success, (xiv) our business may be adversely impacted by work stoppages and other labor relations matters, (xv) we may be subject to losses that might not be covered in whole or in part by existing insurance reserves or insurance coverage and general insurance premium and deductible increases, (xvi) our business depends on the uninterrupted operations of our facilities, systems and business functions, including our information technology and other business systems, (xvii) a cyber-attack, security breach of customer, employee, supplier or our information and data privacy risks and costs of compliance with new regulations may have a material adverse effect on our business, financial condition, results of operations and cash flows, (xviii) we could be subject to changes to our tax rates, the adoption of new U.S. or foreign tax legislation or exposure to additional tax liabilities, (xix) we have a significant amount of goodwill and long-lived assets which, if impaired in the future, would adversely impact our results of operations, (xx) changing climate, global climate change regulations and greenhouse gas effects may adversely affect our operations and financial performance, (xxi) we may be unable to achieve our
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greenhouse gas emission reduction target by 2030, (xxii) legislation/regulation related to environmental and health and safety matters could negatively impact our operations and financial performance, (xxiii) product liability claims and other legal proceedings could adversely affect our operations and financial performance, and (xxiv) we may incur fines or penalties, damage to our reputation or other adverse consequences if our employees, agents or business partners violate, or are alleged to have violated, anti-bribery, competition or other laws.
Forward looking statements are subject to risks and uncertainties that could cause our actual results to differ materially from those forecasted or anticipated, whether expressed in or implied by the statements. For a detailed discussion of the most significant risks and uncertainties that could cause our actual results to differ materially from those forecasted, projected, or anticipated, see "Risk Factors" in Part I, Item 1A of our 2024 Form 10-K and our other filings with the United States Securities and Exchange Commission ("SEC").
All forward-looking statements made in this Form 10-Q are expressly qualified in their entirety by reference to such risk factors. Except to the limited extent required by applicable law, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
On June 30, 2025, we entered into a definitive agreement to sell our containerboard business, including our CorrChoice sheet feeder system (the "Containerboard Business"), for a purchase price of $1,800.0 million, subject to certain adjustments. 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. Our allocation of corporate expenses was updated to reflect how management measures performance and allocates resources with the Containerboard Business being excluded from continuing operations. We have recast data from prior periods to reflect this change to conform to the current year presentation. Unless otherwise noted, the discussion below relates only to our continuing operations.
On August 5, 2025, we entered into a definitive agreement to sell our Soterra land management business, including approximately 173,000 acres of timberland (the "Soterra Business"), for a purchase price of approximately $462.0 million, subject to certain adjustments. The transaction is expected to close October 1, 2025, subject to customary closing conditions. The intended Soterra Business divestiture does not qualify as discontinued operations.
BUSINESS SEGMENTS
As previously announced, effective November 1, 2024, we implemented changes to our reporting structure, moving to a material solution-based structure. We realigned our organizational structure to operate in four reportable business segments: Customized Polymer Solutions; Durable Metal Solutions; Sustainable Fiber Solutions; and Integrated Solutions.
In the Customized Polymer Solutions reportable segment, we produce and sell a comprehensive line of polymer based packaging products, such as plastic drums, rigid intermediate bulk containers and small plastics. Our polymer-based packaging products and services are sold on a global basis to customers in industries such as chemicals, food and beverage, agricultural, pharmaceutical and mineral products, among others.
In the Durable Metal Solutions reportable segment, we produce and sell metal-based packaging products, including a wide variety of steel drums. Our metal-based packaging products are sold on a global basis to customers in industries such as chemicals, petroleum, agriculture and paints and coatings, among others.
In the Sustainable Fiber Solutions reportable segment, we produce and sell fiber-based packaging products, including fibre drums, uncoated recycled board, coated recycled board, tubes and cores and specialty partitions made from containerboard, uncoated recycled board and coated recycled board. Our fiber-based packaging products are sold in North America in industries such as packaging, automotive, construction, food and beverage and building products. In addition, this reportable segment is involved in the management and sale of timber, timberland and special use properties in the southeastern United States.
In the Integrated Solutions reportable segment, we produce and sell complimentary packaging products, such as paints, linings and closure systems for industrial packaging products and related services. In addition, this reportable segment is involved in the purchase and sale of recycled fiber and the production and sale of adhesives used in our containerboard and paperboard products. These products and services are used internally by us and are also sold to external customers.
CRITICAL ACCOUNTING POLICIES
The discussion and analysis of our financial condition and results of operations are based upon our interim condensed consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of these interim condensed consolidated financial statements, in accordance with these principles, requires us to make estimates and
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assumptions that affect the reported amount of assets and liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities as of the date of our interim condensed consolidated financial statements.
Our critical accounting policies are discussed in Part II, Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations of the 2024 Form 10-K. We believe that the consistent application of these policies enables us to provide readers of the interim condensed consolidated financial statements with useful and reliable information about our results of operations and financial condition. There have been no material changes to our critical accounting policies from the disclosures contained in the 2024 Form 10-K.
Valuation of Goodwill
In December 2024, we announced changes to our reporting structure, effective November 1, 2024, moving to a material solution-based structure. This internal re-alignment has resulted in a change in our reportable segments from three: Global Industrial Packaging; Paper Packaging & Services; and Land Management; to four: Customized Polymer Solutions; Durable Metal Solutions; Sustainable Fiber Solutions; and Integrated Solutions.
Changes to the Company's operating segments resulted in a change to the Company's reporting units: Customized Polymer Solutions - Small Plastics/Jerrycans; Customized Polymer Solutions - Large/Medium Plastics; Customized Polymer Solutions - Intermediate Bulk Containers; Durable Metal Solutions; Sustainable Fiber Solutions - Boxboard & Converted; Sustainable Fiber Solutions - Containerboard & Corrugated; Sustainable Fiber Solutions - Land Management; and Integrated Solutions. As a result of this segment realignment, the Company allocated goodwill to the reporting units existing under the new organizational structure on a relative fair value in the first quarter of 2025.
In conjunction with the goodwill allocation described above, we tested our reporting units for potential impairment immediately before and after the segment realignment and concluded that the estimated fair value of each reporting unit exceeded its respective carrying value.
For the Customized Polymer Solutions - Small Plastics/Jerrycans reporting unit, the fair value of the reporting unit exceeded the carrying value by 2%, so no impairment was deemed to exist. The low headroom is due to various acquisitions related to this reporting unit in recent years. We expect the headroom of this reporting unit to grow after synergies from those acquisitions are realized and the acquired businesses are fully integrated into our network.
For all other reporting units with goodwill balances, the fair value exceeded the carrying value by at least 26%, so no impairment was deemed to exist.
As a result of its pending sale, the Containerboard Business is presented as discontinued operations and Sustainable Fiber Solutions - Containerboard & Corrugated is no longer an operating reporting unit beginning in the third quarter of 2025. Goodwill associated with the Sustainable Fiber Solutions - Containerboard & Corrugated reporting unit has been removed from continued operations presentation.
The following table summarizes the carrying amount of goodwill by reporting unit as of July 31, 2025 and October 31, 2024 (recasted from the 2024 10-K by allocating goodwill to reporting units under the new organizational structure on a relative fair value basis, with goodwill associated with discontinued operations removed from presentation):
| Goodwill Balance | ||||||||||||||
| (in millions) | July 31, 2025 | October 31, 2024 | ||||||||||||
| Customized Polymer Solutions | ||||||||||||||
| Small Plastics/Jerrycans | $ | 369.0 | $ | 357.7 | ||||||||||
| Large/Medium Plastics | 130.2 | 128.0 | ||||||||||||
| Intermediate Bulk Containers | 126.9 | 122.2 | ||||||||||||
| Durable Metal Solutions | 416.1 | 401.8 | ||||||||||||
| Sustainable Fiber Solutions | ||||||||||||||
| Boxboard & Converted | 475.9 | 475.9 | ||||||||||||
| Integrated Solutions | 177.7 | 169.9 | ||||||||||||
| Total | $ | 1,695.8 | $ | 1,655.5 | ||||||||||
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Recently Issued and Newly Adopted Accounting Standards
See Note 1 to the interim condensed consolidated financial statements included in Item 1 of this Form 10-Q for a detailed description of recently issued and newly adopted accounting standards.
RESULTS OF OPERATIONS
The following comparative information is presented for the three and nine months ended July 31, 2025 and 2024. Historical revenues and earnings may or may not be representative of future operating results as a result of various economic and other factors.
Items that could have a significant impact on the financial statements include the risks and uncertainties listed in Part I, Item 1A - Risk Factors, of the 2024 Form 10-K. Actual results could differ materially using different estimates and assumptions, or if conditions are significantly different in the future.
The non-GAAP financial measure of Adjusted EBITDA is used throughout the following discussion of our results of operations, both for our consolidated and segment results. For our consolidated results, 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. Since we do not calculate net income by reportable segment, Adjusted EBITDA by reportable segment is reconciled to operating profit by reportable segment. In that case, Adjusted EBITDA is defined as operating profit by reportable segment, less equity earnings of unconsolidated affiliates, net of tax, 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, for that reportable segment.
We use Adjusted EBITDA as a financial measure to evaluate our historical and ongoing operations and believe that this non-GAAP financial measure is useful to enable investors to perform meaningful comparisons of our historical and current performance. The foregoing non-GAAP financial measures are intended to supplement and should be read together with our financial results. These non-GAAP financial measures should not be considered an alternative or substitute for, and should not be considered superior to, our reported financial results. Accordingly, users of this financial information should not place undue reliance on the non-GAAP financial measures.
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Third Quarter Results
The following table sets forth the net sales, operating profit and Adjusted EBITDA for each of our business segments for the three months ended July 31, 2025 and 2024:
|
Three Months Ended July 31, |
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| (in millions) | 2025 | 2024 | |||||||||
| Net sales: | |||||||||||
| Customized Polymer Solutions | $ | 339.8 | $ | 314.7 | |||||||
| Durable Metal Solutions | 399.8 | 424.1 | |||||||||
| Sustainable Fiber Solutions | 308.0 | 325.6 | |||||||||
| Integrated Solutions | 87.1 | 100.5 | |||||||||
| Total net sales | $ | 1,134.7 | $ | 1,164.9 | |||||||
| Operating profit: | |||||||||||
| Customized Polymer Solutions | $ | 8.8 | $ | 9.6 | |||||||
| Durable Metal Solutions | 37.6 | 36.2 | |||||||||
| Sustainable Fiber Solutions | 23.2 | 35.9 | |||||||||
| Integrated Solutions | 3.5 | 55.0 | |||||||||
| Total operating profit | $ | 73.1 | $ | 136.7 | |||||||
| Adjusted EBITDA: | |||||||||||
| Customized Polymer Solutions | $ | 39.4 | $ | 40.5 | |||||||
| Durable Metal Solutions | 47.7 | 45.6 | |||||||||
| Sustainable Fiber Solutions | 65.5 | 57.1 | |||||||||
| Integrated Solutions | 8.1 | 13.8 | |||||||||
| Total Adjusted EBITDA | $ | 160.7 | $ | 157.0 | |||||||
The following table sets forth Adjusted EBITDA, reconciled to net income and operating profit, for our consolidated results for the three months ended July 31, 2025 and 2024:
|
Three Months Ended July 31, |
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| (in millions) | 2025 | 2024 | |||||||||
| Net income from continuing operations | $ | 44.7 | $ | 84.5 | |||||||
| Plus: interest expense, net | 14.5 | 18.8 | |||||||||
| Plus: other expense, net | 2.8 | 0.8 | |||||||||
| Plus: income tax expense | 11.8 | 33.5 | |||||||||
| Plus: equity earnings of unconsolidated affiliates, net of tax | (0.7) | (0.9) | |||||||||
| Operating profit | 73.1 | 136.7 | |||||||||
| Less: equity earnings of unconsolidated affiliates, net of tax | (0.7) | (0.9) | |||||||||
| Plus: depreciation, depletion and amortization expense | 58.8 | 59.0 | |||||||||
| Plus: acquisition and integration related costs | 1.2 | 2.0 | |||||||||
| Plus: restructuring and other charges | 25.2 | 2.7 | |||||||||
| Plus: non-cash asset impairment charges | 3.4 | 0.2 | |||||||||
| Plus: gain on disposal of properties, plants and equipment, net | (2.6) | (3.4) | |||||||||
| Plus: gain on disposal of businesses, net | - | (46.1) | |||||||||
| Plus: other costs* | 0.9 | 5.0 | |||||||||
| Adjusted EBITDA | $ | 160.7 | $ | 157.0 | |||||||
| *includes fiscal year-end change costs and share-based compensation impact of disposals of businesses | |||||||||||
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The following table sets forth Adjusted EBITDA for our business segments, reconciled to the operating profit for each segment, for the three months ended July 31, 2025 and 2024:
| Three Months Ended July 31, 2025 | |||||||||||||||||||||||||||||
| (in millions) | Customized Polymer Solutions | Durable Metal Solutions | Sustainable Fiber Solutions | Integrated Solutions | Consolidated | ||||||||||||||||||||||||
| Operating profit | $ | 8.8 | $ | 37.6 | $ | 23.2 | $ | 3.5 | $ | 73.1 | |||||||||||||||||||
| Less: equity earnings of unconsolidated affiliates, net of tax | - | - | - | (0.7) | (0.7) | ||||||||||||||||||||||||
| Plus: depreciation and amortization expense | 23.7 | 7.3 | 25.4 | 2.4 | 58.8 | ||||||||||||||||||||||||
| Plus: acquisition and integration related costs | 1.2 | - | - | - | 1.2 | ||||||||||||||||||||||||
| Plus: restructuring and other charges | 3.3 | 5.2 | 15.6 | 1.1 | 25.2 | ||||||||||||||||||||||||
| Plus: non-cash asset impairment charges | 2.4 | - | 0.9 | 0.1 | 3.4 | ||||||||||||||||||||||||
| Plus: (gain) loss on disposal of properties, plants and equipment, net | (0.2) | (2.6) | - | 0.2 | (2.6) | ||||||||||||||||||||||||
| Plus: other costs* | 0.2 | 0.2 | 0.4 | 0.1 | 0.9 | ||||||||||||||||||||||||
| Adjusted EBITDA | $ | 39.4 | $ | 47.7 | $ | 65.5 | $ | 8.1 | $ | 160.7 | |||||||||||||||||||
| Three Months Ended July 31, 2024 | |||||||||||||||||||||||||||||
| (in millions) | Customized Polymer Solutions | Durable Metal Solutions | Sustainable Fiber Solutions | Integrated Solutions | Consolidated | ||||||||||||||||||||||||
| Operating profit | $ | 9.6 | $ | 36.2 | $ | 35.9 | $ | 55.0 | $ | 136.7 | |||||||||||||||||||
| Less: equity earnings of unconsolidated affiliates, net of tax | - | - | - | (0.9) | (0.9) | ||||||||||||||||||||||||
| Plus: depreciation and amortization expense | 27.2 | 7.3 | 21.0 | 3.5 | 59.0 | ||||||||||||||||||||||||
| Plus: acquisition and integration related costs | 1.8 | - | 0.2 | - | 2.0 | ||||||||||||||||||||||||
| Plus: restructuring and other charges | 1.0 | 1.0 | 0.8 | (0.1) | 2.7 | ||||||||||||||||||||||||
| Plus: non-cash asset impairment charges | - | - | - | 0.2 | 0.2 | ||||||||||||||||||||||||
| Plus: gain on disposal of properties, plants and equipment, net | (0.1) | (0.1) | (3.1) | (0.1) | (3.4) | ||||||||||||||||||||||||
| Plus: gain on disposal of businesses, net | - | - | - | (46.1) | (46.1) | ||||||||||||||||||||||||
| Plus: other costs* | 1.0 | 1.2 | 2.3 | 0.5 | 5.0 | ||||||||||||||||||||||||
| Adjusted EBITDA | $ | 40.5 | $ | 45.6 | $ | 57.1 | $ | 13.8 | $ | 157.0 | |||||||||||||||||||
| *includes fiscal year-end change costs and share-based compensation impact of disposals of businesses | |||||||||||||||||||||||||||||
Net Sales
Net sales were $1,134.7 million for the third quarter of 2025 compared with $1,164.9 million for the third quarter of 2024. The $30.2 million decrease was primarily due to $40.1 million attributable to lower volumes, partially offset by positive foreign currency translation impacts. See the "Segment Review" below for additional information on net sales by segment.
Gross Profit
Gross profit was $257.3 million for the third quarter of 2025 compared with $244.9 million for the third quarter of 2024. The $12.4 million increase was primarily due to lower raw material costs, partially offset by the same factors that impacted net sales. See the "Segment Review" below for additional information on gross profit by segment. Gross profit margin was 22.7 percent and 21.0 percent for the third quarter of 2025 and 2024, respectively.
Selling, General and Administrative Expenses
Selling, general and administrative ("SG&A") expenses were $157.0 million for the third quarter of 2025 compared with $152.8 million for the third quarter of 2024. The $4.2 million increase was primarily due to higher compensation expenses. SG&A expenses were 13.8 percent and 13.1 percent of net sales for the third quarter of 2025 and 2024, respectively.
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Financial Measures
Operating profit was $73.1 million for the third quarter of 2025 compared with $136.7 million for the third quarter of 2024. Net income was $44.7 million for the third quarter of 2025 compared with $84.5 million for the third quarter of 2024. Adjusted EBITDA was $160.7 million for the third quarter of 2025 compared with $157.0 million for the third quarter of 2024. The reasons for the changes in operating profit, net income, and Adjusted EBITDA for each segment are described below in the "Segment Review."
Trends
While volumes in small plastics have improved due to increased demand in growth end markets, overall we have not identified, and do not anticipate, any compelling customer demand inflection during the remainder of the year. We expect prices for steel and resin to be relatively stable for the remainder of the year, apart from any potential tariff impact. We also expect prices for old corrugated containers and other direct materials, as well as prices for transportation, labor and utilities, to remain relatively stable through the remainder of the year.
Segment Review
Key factors influencing profitability for our segments include:
•Selling prices, product mix, customer demand, and sales volumes;
•Raw material costs, primarily steel, resin, containerboard, old corrugated containers and used industrial packaging for reconditioning;
•Energy and transportation costs;
•Benefits from executing the Greif Business System 2.0;
•Restructuring charges;
•Acquisition of businesses and facilities;
•Divestiture of businesses and facilities; and
•Impact of foreign currency translation.
As a result of the pending sale, the Containerboard Business, which was previously reported under the Sustainable Fiber Solutions segment, is presented as discontinued operations. Our allocation of corporate expenses to each continued reportable segment was updated to reflect how management measures performance and allocates resources with the Containerboard Business being excluded from continuing operations.
Customized Polymer Solutions
Our Customized Polymer Solutions segment offers a comprehensive line of polymer based packaging products, such as plastic drums, rigid intermediate bulk containers and small plastics.
Net sales were $339.8 million for the third quarter of 2025 compared with $314.7 million for the third quarter of 2024. The $25.1 million increase was primarily due to $10.5 million from higher average selling prices and $7.0 million attributable to higher volumes and positive foreign currency translation impacts.
Gross profit was $70.7 million for the third quarter of 2025 compared with $60.6 million for the third quarter of 2024. The $10.1 million increase was primarily due to the same factors that impacted net sales, partially offset by higher raw material costs and higher manufacturing costs. Gross profit margin was 20.8 percent and 19.3 percent for the third quarter of 2025 and 2024, respectively.
Operating profit was $8.8 million for the third quarter of 2025 compared with $9.6 million for the third quarter of 2024. The $0.8 million decrease was primarily due to higher SG&A expenses related to higher compensation expenses and higher restructuring and other charges, partially offset by the same factors that impacted gross profit. Adjusted EBITDA was $39.4 million for the third quarter of 2025 compared with $40.5 million for the third quarter of 2024. The $1.1 million decrease was primarily due to the same factors that impacted operating profit.
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Durable Metal Solutions
Our Durable Metal Solutions segment produces and sells metal-based packaging products, including a wide variety of steel drums.
Net sales were $399.8 million for the third quarter of 2025 compared with $424.1 million for the third quarter of 2024. The $24.3 million decrease was primarily due to $24.6 million attributable to lower volumes.
Gross profit was $86.4 million for the third quarter of 2025 compared with $85.7 million for the third quarter of 2024. The $0.7 million increase was primarily due to lower raw material costs, partially offset by the same factors that impacted net sales. Gross profit margin was 21.6 percent and 20.2 percent for the third quarter of 2025 and 2024, respectively.
Operating profit was $37.6 million for the third quarter of 2025 compared with $36.2 million for the third quarter of 2024. The $1.4 million increase was primarily due to the same factors that impacted gross profit. Adjusted EBITDA was $47.7 million for the third quarter of 2025 compared with $45.6 million for the third quarter of 2024. The $2.1 million increase was primarily due to the same factors that impacted gross profit.
Sustainable Fiber Solutions
Our Sustainable Fiber Solutions segment produces and sells fiber-based packaging products, including fibre drums, uncoated recycled board, coated recycled board, tubes and cores and specialty partitions made from containerboard, uncoated recycled board and coated recycled board. In addition, this reportable segment is involved in the management and sale of timber, timberland and special use properties in the southeastern United States.
Net sales were $308.0 million for the third quarter of 2025 compared with $325.6 million for the third quarter of 2024. The $17.6 million decrease was primarily due to $24.5 million attributable to lower volumes, partially offset by $6.8 million from higher published containerboard and boxboard prices.
Gross profit was $75.4 million for the third quarter of 2025 compared with $67.9 million for the third quarter of 2024. The $7.5 million increase in gross profit was primarily due to lower raw material costs and lower manufacturing costs, partially offset by the same factors that impacted net sales. Gross profit margin was 24.5 percent and 20.9 percent for the third quarter of 2025 and 2024, respectively.
Operating profit was $23.2 million for the third quarter of 2025 compared with $35.9 million for the third quarter of 2024. The $12.7 million decrease was primarily due to higher restructuring and other charges related to plant closures, partially offset by the same factors that impacted gross profit. Adjusted EBITDA was $65.5 million for the third quarter of 2025 compared with $57.1 million for the third quarter of 2024. The $8.4 million increase was primarily due to the same factors that impacted gross profit.
Integrated Solutions
Our Integrated Solutions segment produces and sells complimentary packaging products, such as paints, linings and closure systems for industrial packaging products and related services. In addition, this reportable segment participates in the purchase and sale of recycled fiber and the production and sale of adhesives, which can be used in our containerboard and paperboard products.
Net sales were $87.1 million for the third quarter of 2025 compared with $100.5 million for the third quarter of 2024. The $13.4 million decrease was primarily due to a $14.3 million impact from the divestiture of Delta Petroleum Company, Inc. (the "Delta Divestiture") during the third quarter of 2024.
Gross profit was $24.8 million for the third quarter of 2025 compared with $30.7 million for the third quarter of 2024. The $5.9 million decrease in gross profit was primarily due to the Delta Divestiture. Gross profit margin was 28.5 percent and 30.5 percent for the third quarter of 2025 and 2024, respectively.
Operating profit was $3.5 million for the third quarter of 2025 compared with $55.0 million for the third quarter of 2024. The $51.5 million decrease was primarily due to a $46.1 million gain from the Delta Divestiture during the third quarter of 2024 and the same factors that impacted gross profit. Adjusted EBITDA was $8.1 million for the third quarter of 2025 compared with $13.8 million for the third quarter of 2024. The $5.7 million decrease was primarily due to the same factors that impacted gross profit.
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Income Tax Expense
Income tax expense for the third quarter of 2025 was $11.8 million compared with $33.5 million for the third quarter of 2024. The $21.7 million decrease was primarily due to the gain from the Delta Divestiture in 2024.
On July 4, 2025, H.R. 1, commonly known as the One Big Beautiful Bill Act ("OBBBA"), was enacted into law. The OBBBA permanently extends several major provisions of the Tax Cuts and Jobs Act of 2017, including 100% bonus depreciation, domestic research cost expensing, enhanced business interest deductibility, and modifications to the international tax framework. We have evaluated the impact of the OBBBA and determined that it does not have a material effect on the current quarter's income tax provision. Most provisions of the OBBBA, except for bonus depreciation, will not affect us until the 2026 fiscal year.
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Year-to-Date Results
The following table sets forth the net sales, operating profit and Adjusted EBITDA for each of our business segments for the nine months ended July 31, 2025 and 2024:
|
Nine Months Ended July 31, |
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| (in millions) | 2025 | 2024 | |||||||||
| Net sales: | |||||||||||
| Customized Polymer Solutions | $ | 964.2 | $ | 828.3 | |||||||
| Durable Metal Solutions | 1,120.9 | 1,208.3 | |||||||||
| Sustainable Fiber Solutions | 900.3 | 924.2 | |||||||||
| Integrated Solutions | 246.4 | 287.1 | |||||||||
| Total net sales | $ | 3,231.8 | $ | 3,247.9 | |||||||
| Operating profit: | |||||||||||
| Customized Polymer Solutions | $ | 28.8 | $ | 26.9 | |||||||
| Durable Metal Solutions | 95.1 | 99.8 | |||||||||
| Sustainable Fiber Solutions | 30.3 | 61.8 | |||||||||
| Integrated Solutions | 8.4 | 72.0 | |||||||||
| Total operating profit | $ | 162.6 | $ | 260.5 | |||||||
| Adjusted EBITDA: | |||||||||||
| Customized Polymer Solutions | $ | 112.7 | $ | 100.5 | |||||||
| Durable Metal Solutions | 122.4 | 125.0 | |||||||||
| Sustainable Fiber Solutions | 155.8 | 141.7 | |||||||||
| Integrated Solutions | 21.5 | 36.6 | |||||||||
| Total Adjusted EBITDA | $ | 412.4 | $ | 403.8 | |||||||
The following table sets forth Adjusted EBITDA, reconciled to net income and operating profit, for our consolidated results for the nine months ended July 31, 2025 and 2024:
|
Nine Months Ended July 31, |
|||||||||||
| (in millions) | 2025 | 2024 | |||||||||
| Net income | $ | 76.8 | $ | 207.7 | |||||||
| Plus: interest expense, net | 46.3 | 29.4 | |||||||||
| Plus: other expense, net | 3.0 | 9.5 | |||||||||
| Plus: income tax expense | 38.0 | 16.0 | |||||||||
| Plus: equity earnings of unconsolidated affiliates, net of tax | (1.5) | (2.1) | |||||||||
| Operating profit | 162.6 | 260.5 | |||||||||
| Less: equity earnings of unconsolidated affiliates, net of tax | (1.5) | (2.1) | |||||||||
| Plus: depreciation, depletion and amortization expense | 173.5 | 168.6 | |||||||||
| Plus: acquisition and integration related costs | 5.4 | 16.1 | |||||||||
| Plus: restructuring and other charges | 42.5 | 1.6 | |||||||||
| Plus: non-cash asset impairment charges | 27.8 | 1.9 | |||||||||
| Plus: gain on disposal of properties, plants and equipment, net | (3.7) | (6.4) | |||||||||
| Plus: loss (gain) on disposal of businesses, net | 1.4 | (46.1) | |||||||||
| Plus: other costs* | 1.4 | 5.5 | |||||||||
| Adjusted EBITDA | $ | 412.4 | $ | 403.8 | |||||||
| *includes fiscal year-end change costs and share-based compensation impact of disposals of businesses | |||||||||||
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The following table sets forth Adjusted EBITDA for our business segments, reconciled to the operating profit for each segment, for the nine months ended July 31, 2025 and 2024:
| Nine Months Ended July 31, 2025 | |||||||||||||||||||||||||||||
| (in millions) | Customized Polymer Solutions | Durable Metal Solutions | Sustainable Fiber Solutions | Integrated Solutions | Consolidated | ||||||||||||||||||||||||
| Operating profit | $ | 28.8 | $ | 95.1 | $ | 30.3 | $ | 8.4 | $ | 162.6 | |||||||||||||||||||
| Less: equity earnings of unconsolidated affiliates, net of tax | - | - | - | (1.5) | (1.5) | ||||||||||||||||||||||||
| Plus: depreciation and amortization expense | 69.7 | 21.2 | 75.1 | 7.5 | 173.5 | ||||||||||||||||||||||||
| Plus: acquisition and integration related costs | 5.4 | - | - | - | 5.4 | ||||||||||||||||||||||||
| Plus: restructuring and other charges | 5.5 | 7.4 | 27.7 | 1.9 | 42.5 | ||||||||||||||||||||||||
| Plus: non-cash asset impairment charges | 3.1 | 2.2 | 22.0 | 0.5 | 27.8 | ||||||||||||||||||||||||
| Plus: (gain) loss on disposal of properties, plants and equipment, net | (0.2) | (3.8) | 0.1 | 0.2 | (3.7) | ||||||||||||||||||||||||
| Plus: loss on disposal of businesses, net | - | - | - | 1.4 | 1.4 | ||||||||||||||||||||||||
| Plus: other costs* | 0.4 | 0.3 | 0.6 | 0.1 | 1.4 | ||||||||||||||||||||||||
| Adjusted EBITDA | $ | 112.7 | $ | 122.4 | $ | 155.8 | $ | 21.5 | $ | 412.4 | |||||||||||||||||||
| Nine Months Ended July 31, 2024 | |||||||||||||||||||||||||||||
| (in millions) | Customized Polymer Solutions | Durable Metal Solutions | Sustainable Fiber Solutions | Integrated Solutions | Consolidated | ||||||||||||||||||||||||
| Operating profit | $ | 26.9 | $ | 99.8 | $ | 61.8 | $ | 72.0 | $ | 260.5 | |||||||||||||||||||
| Less: equity earnings of unconsolidated affiliates, net of tax | - | - | - | (2.1) | (2.1) | ||||||||||||||||||||||||
| Plus: depreciation and amortization expense | 56.7 | 21.8 | 80.2 | 9.9 | 168.6 | ||||||||||||||||||||||||
| Plus: acquisition and integration related costs | 14.8 | - | 1.3 | - | 16.1 | ||||||||||||||||||||||||
| Plus: restructuring and other charges | 1.4 | 1.7 | (2.2) | 0.7 | 1.6 | ||||||||||||||||||||||||
| Plus: non-cash asset impairment charges | - | 0.4 | 1.3 | 0.2 | 1.9 | ||||||||||||||||||||||||
| Plus: gain on disposal of properties, plants and equipment, net | (0.4) | - | (3.3) | (2.7) | (6.4) | ||||||||||||||||||||||||
| Plus: gain on disposal of businesses, net | - | - | - | (46.1) | (46.1) | ||||||||||||||||||||||||
| Plus: other costs* | 1.1 | 1.3 | 2.6 | 0.5 | 5.5 | ||||||||||||||||||||||||
| Adjusted EBITDA | $ | 100.5 | $ | 125.0 | $ | 141.7 | $ | 36.6 | $ | 403.8 | |||||||||||||||||||
| *includes fiscal year-end change costs and share-based compensation impact of disposals of businesses | |||||||||||||||||||||||||||||
Net Sales
Net sales were $3,231.8 million for the first nine months of 2025 compared with $3,247.9 million for the first nine months of 2024. The $16.1 million decrease was primarily due to $57.1 million attributable to lower volumes, a $40.8 million impact from the Delta Divestiture and $11.3 million of negative foreign currency translation impacts, partially offset by $97.2 million contributions from recent acquisitions. See the "Segment Review" below for additional information on net sales by segment.
Gross Profit
Gross profit was $711.9 million for the first nine months of 2025 compared with $671.2 million for the first nine months of 2024. The $40.7 million increase was primarily due to lower raw material costs, partially offset by the same factors that impacted net sales. See "Segment Review" below for additional information on gross profit by segment. Gross profit margin was 22.0 percent and 20.7 percent for first nine months of 2025 and 2024, respectively.
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Selling, General and Administrative Expenses
SG&A expenses were $475.9 million for the first nine months of 2025 compared with $443.6 million for the first nine months of 2024. The $32.3 million increase was primarily related to higher compensation expenses and amortization expenses due to recent acquisitions. SG&A expenses were 14.7 percent and 13.7 percent of net sales for first nine months of 2025 and 2024, respectively.
Financial Measures
Operating profit was $162.6 million for the first nine months of 2025 compared with $260.5 million for the first nine months of 2024. Net income was $76.8 million for the first nine months of 2025 compared with $207.7 million for the first nine months of 2024. Adjusted EBITDA was $412.4 million for the first nine months of 2025 compared with $403.8 million for the first nine months of 2024. The reasons for the changes in operating profit, net income, and Adjusted EBITDA for each segment are described below in the "Segment Review."
Segment Review
Customized Polymer Solutions
Net sales were $964.2 million for the first nine months of 2025 compared with $828.3 million for the first nine months of 2024. The $135.9 million increase was primarily due to $97.2 million of contributions from recent acquisitions, $19.7 million attributable to higher volumes and $17.9 million from higher average selling prices.
Gross profit was $208.0 million for the first nine months of 2025 compared with $160.3 million for the first nine months of 2024. The $47.7 million increase was primarily due to the same factors that impacted net sales, partially offset by higher raw material, transportation and manufacturing costs. Gross profit margin was 21.6 percent and 19.4 percent for the first nine months of 2025 and 2024, respectively.
Operating profit was $28.8 million for the first nine months of 2025 compared with $26.9 million for the first nine months of 2024. The $1.9 million increase was primarily due to the same factors that impacted gross profit and lower integration costs from recent acquisitions, partially offset by higher SG&A expenses related to higher compensation expenses and amortization expenses from recent acquisitions. Adjusted EBITDA was $112.7 million for the first nine months of 2025 compared with $100.5 million for the first nine months of 2024. The $12.2 million increase was primarily due to the same factors that impacted gross profit, partially offset by higher SG&A expenses related to higher compensation expenses and amortization expenses from recent acquisitions.
Durable Metal Solutions
Net sales were $1,120.9 million for the first nine months of 2025 compared with $1,208.3 million for the first nine months of 2024. The $87.4 million decrease was primarily due to $53.6 million attributable to lower volumes, $24.6 million from lower average selling prices and negative foreign currency translation impacts.
Gross profit was $232.4 million for the first nine months of 2025 compared with $240.8 million for the first nine months of 2024. The $8.4 million decrease was primarily due to the same factors that impacted net sales, partially offset by lower raw material costs. Gross profit margin was 20.7 percent and 19.9 percent for the first nine months of 2025 and 2024, respectively.
Operating profit was $95.1 million for the first nine months of 2025 compared with $99.8 million for the first nine months of 2024. The $4.7 million decrease was primarily due to the same factors that impacted gross profit and higher restructuring and other charges, partially offset by lower SG&A expenses related to lower incentive expenses due to performance. Adjusted EBITDA was $122.4 million for the first nine months of 2025 compared with $125.0 million for the first nine months of 2024. The $2.6 million decrease was primarily due to the same factors that impacted gross profit, excluding impacts from depreciation and amortization, partially offset by lower SG&A expenses related to lower incentive expenses due to performance.
Sustainable Fiber Solutions
Net sales were $900.3 million for the first nine months of 2025 compared with $924.2 million for the first nine months of 2024. The $23.9 million decrease was primarily due to $38.3 million from lower published containerboard and boxboard prices, partially offset by $15.6 million attributable to lower volumes.
Gross profit was $201.1 million for the first nine months of 2025 compared with $184.5 million for the first nine months of 2024. The $16.6 million increase was primarily due to lower raw material costs and lower manufacturing costs, partially offset
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by the same factor that impacted net sales. Gross profit margin was 22.3 percent and 20.0 percent for the first nine months of 2025 and 2024, respectively.
Operating profit was $30.3 million for the first nine months of 2025 compared with $61.8 million for the first nine months of 2024. The $31.5 million decrease was primarily due to higher restructuring and other charges and impairment charges related to plant closures, partially offset by the same factors that impacted gross profit. Adjusted EBITDA was $155.8 million for the first nine months of 2025 compared with $141.7 million for the first nine months of 2024. The $14.1 million increase was primarily due to the same factors that impacted gross profit.
Integrated Solutions
Net sales were $246.4 million for the first nine months of 2025 compared with $287.1 million for the first nine months of 2024. The $40.7 million decrease was primarily due to a $40.8 million impact from the Delta Divestiture.
Gross profit was $70.4 million for the first nine months of 2025 compared with $85.6 million for the first nine months of 2024. The $15.2 million decrease was primarily due to the Delta Divestiture. Gross profit margin was 28.6 percent and 29.8 percent for the first nine months of 2025 and 2024, respectively.
Operating profit was $8.4 million for the first nine months of 2025 compared with $72.0 million for the first nine months of 2024. The $63.6 million decrease was primarily due to a $46.1 million gain from the Delta Divestitures during the third quarter of 2024 and the same factors that impacted gross profit. Adjusted EBITDA was $21.5 million for the first nine months of 2025 compared with $36.6 million for the first nine months of 2024. The $15.1 million decrease was primarily due to the same factors that impacted gross profit.
Income tax expense
Income tax expense for the first nine months of 2025 was $38.0 million compared with $16.0 million for the first nine months of 2024, respectively. The $22.0 million increase was primarily attributable to a one-time discrete tax benefit of $48.1 million recognized in 2024 related to the onshoring of certain intangible property and $1.2 million related to other miscellaneous discrete items. This was partially offset by a gain of $17.3 million from the Delta Divestiture in 2024 and a $10.0 million increase in tax expense in 2024 driven by higher pre-tax earnings and changes in the geographic mix of earnings across tax jurisdictions.
LIQUIDITY AND CAPITAL RESOURCES
Our primary sources of liquidity are operating cash flows and borrowings under our senior secured credit facilities and proceeds from our trade accounts receivable credit facilities. We use these sources to fund our working capital needs, capital expenditures, cash dividends, debt repayment, and acquisitions. We anticipate continuing to fund these items in a like manner. We currently expect that operating cash flows, borrowings under our senior secured credit facilities, and proceeds from our trade accounts receivable credit facilities will be sufficient to fund our anticipated working capital, capital expenditures, cash dividends, debt repayment, potential acquisitions of businesses, and other liquidity needs for at least 12 months.
The cash flows related to the Containerboard Business have not been segregated and are included in our Condensed Consolidated Statements of Cash Flows for the nine months ended July 31, 2025 and 2024. The absence of the cash flows from the Containerboard business in future periods is not expected to materially impact our liquidity or capital resources.
As disclosed above, we have entered into definitive agreements to sell our Containerboard Business for $1,800.0 million and our Soterra Business for approximately $462.0 million, subject in each case to certain adjustments. The net cash proceeds from these sale transactions will be used for debt repayment.
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Cash Flow
|
Nine Months Ended July 31, (in millions)
|
2025 | 2024 | |||||||||
| Net cash provided by operating activities | $ | 303.3 | $ | 168.8 | |||||||
| Net cash used in investing activities | (70.2) | (703.8) | |||||||||
| Net cash (used in) provided by financing activities | (188.3) | 541.7 | |||||||||
| Effects of exchange rates on cash | 42.7 | 6.6 | |||||||||
| Net increase in cash and cash equivalents | 87.5 | 13.3 | |||||||||
| Cash and cash equivalents at beginning of year | 197.7 | 180.9 | |||||||||
| Cash and cash equivalents at end of period | $ | 285.2 | $ | 194.2 | |||||||
Operating Activities
During the first nine months of 2025 and 2024, cash used in change in accounts receivable was $(31.8) million and $(82.0) million, respectively. The favorable change in accounts receivable levels was primarily due to increased collections.
During the first nine months of 2025 and 2024, cash used in change in inventories was $(13.0) million and $(46.4) million, respectively. The favorable change in inventories was primarily due to decreased raw material prices.
During the first nine months of 2025 and 2024, cash (used in) provided by change in accounts payable was $(13.3) million and $26.1 million, respectively. The unfavorable change in accounts payable levels was primarily due to increase in purchases primarily related to acquisitions and timing of payments.
Investing Activities
During the first nine months of 2025 and 2024, we invested $106.5 million and $141.4 million, respectively, of cash in capital expenditures. $21.0 million and $37.1 million relates to cash in capital expenditures from the Containerboard Business.
During the first nine months of 2025, we received $22.5 million proceeds from a cash settlement of certain cross-currency swap contracts, of which $11.5 million related to cross-currency swap contracts designated as net investment hedges and $11.0 million related to cross-currency swap contracts designated as cash flow hedges.
During the first nine months of 2024, we paid $567.6 million for purchases of businesses, net of cash acquired, primarily for our acquisition of Ipackchem Group SAS ("Ipackchem") on March 26, 2024 (the "Ipackchem Acquisition").
Financing Activities
During the first nine months of 2025 and 2024, we paid cash dividends to our stockholders in the amount of $93.8 million and $89.8 million, respectively.
During the first nine months of 2025 and 2024, we (paid down) borrowed $(34.8) million and $661.2 million of debt, net of payments, respectively. The 2024 borrowing was primarily for the Ipackchem Acquisition.
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Financial Obligations
Long-Term Debt
Long-term debt is summarized as follows:
| (in millions) |
July 31, 2025 |
October 31, 2024 |
|||||||||
| 2022 Credit Agreement - Term Loans | $ | 1,641.3 | $ | 1,707.4 | |||||||
| 2023 Credit Agreement - Term Loan | 283.1 | 288.8 | |||||||||
| Accounts receivable credit facilities | - | 357.9 | |||||||||
| 2022 Credit Agreement - Revolving Credit Facility | 395.7 | 373.7 | |||||||||
| Other debt | - | 1.3 | |||||||||
| 2,320.1 | 2,729.1 | ||||||||||
| Less: current portion | 95.8 | 95.8 | |||||||||
| Less: deferred financing costs | 5.0 | 7.1 | |||||||||
| Long-term debt, net | $ | 2,219.3 | $ | 2,626.2 | |||||||
2022 Credit Agreement
We have a senior secured credit agreement (the "2022 Credit Agreement") with a syndicate of financial institutions.
The 2022 Credit Agreement provides for (a) an $800.0 million secured revolving credit facility, consisting of a $725.0 million multicurrency facility and a $75.0 million U.S. dollar facility, maturing on March 1, 2027, (b) a $1,100.0 million secured term loan A-1 facility with quarterly principal installments that continue through January 31, 2027, with any outstanding principal balance of such term loan A-1 facility being due and payable on maturity on March 1, 2027, (c) a $515.0 million secured term loan A-2 facility with quarterly principal installments that continue through January 31, 2027, with any outstanding principal balance of such term loan A-2 being due and payable on maturity on March 1, 2027, and (d) as further described below, a $300.0 million incremental secured term loan A-4 facility with quarterly principal installments that continue through January 31, 2027, with any outstanding principal balance of such term loan A-4 being due and payable on maturity on March 1, 2027. Subject to the terms of the 2022 Credit Agreement, the Company has an option to borrow additional funds under the 2022 Credit Agreement with the agreement of the lenders.
We have an incremental term loan agreement (the "Incremental Term Loan A-4 Agreement") with a syndicate of financial institutions. The Incremental Term Loan A-4 Agreement is an amendment to the 2022 Credit Agreement. The Incremental Term Loan A-4 Agreement provided for a loan in the aggregate principal amount of $300.0 million that was made available in a single draw on March 25, 2024 (the "Incremental Term Loan A-4"). Amounts repaid or prepaid in respect of the Incremental Term Loan A-4 may not be reborrowed. The Incremental Term Loan A-4 amortizes at 2.50% per annum in equal quarterly principal installments, with the remaining outstanding principal balance due on March 1, 2027. The terms and provisions of the Incremental Term Loan A-4 are identical in all material respects to the terms and provisions of the other term loans made under the 2022 Credit Agreement. Our obligations with respect to the Incremental Term Loan A-4 are secured and guaranteed with the other obligations under the 2022 Credit Agreement on a pari passubasis. We used the proceeds from the Incremental Term Loan A-4 to repay funds drawn on the revolving credit facility under the 2022 Credit Agreement for the purchase of Ipackchem on March 26, 2024.
Interest accruing under the 2022 Credit Agreement is based on Secured Overnight Financing Rate ("SOFR") plus a credit spread adjustment or a base rate that resets periodically plus, in each case, a calculated margin amount that is based on our leverage ratio. As of July 31, 2025, we had $404.3 million of available borrowing capacity under the $800.0 million secured revolving credit facility.
The repayment of all borrowings under the 2022 Credit Agreement is secured by a security interest in certain of our personal property and certain of the personal property of certain of our U.S. subsidiaries, including equipment and inventory and certain intangible assets, as well as a pledge of the capital stock of substantially all of our U.S. subsidiaries, and is secured, in part, by the capital stock of the non-U.S. borrowers. However, in the event that we receive and maintain an investment grade rating from either Moody's Investors Services, Inc. or Standard & Poor's Financial Services LLC, we may request the release of such collateral.
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The 2022 Credit Agreement contains certain covenants, which include financial covenants that require us to maintain a certain leverage ratio and an interest coverage ratio. The leverage ratio generally requires that at the end of any fiscal quarter we will not permit the ratio of (a) our total consolidated indebtedness (less the aggregate amount of our unrestricted cash and cash equivalents), to (b) our consolidated net income plus depreciation, depletion and amortization, interest expense (including capitalized interest), income taxes, and minus certain extraordinary gains and non-recurring gains (or plus certain extraordinary losses and non-recurring losses), and plus or minus certain other items for the preceding twelve months (as used in this paragraph only "EBITDA") to be greater than 4.50 to 1.00 through the quarter ending January 31, 2025, and thereafter 4.00 to 1.00; provided that such leverage ratio is subject to (i) a covenant step-up (as defined in the 2022 Credit Agreement) increase adjustment of 0.50 upon the consummation of, and the following three fiscal quarters after, certain specified acquisitions and (ii) a collateral release decrease adjustment of 0.25x during any collateral release period (as defined in the 2022 Credit Agreement). The interest coverage ratio generally requires that at the end of any fiscal quarter we will not permit the ratio of (a) our consolidated EBITDA, to (b) our consolidated interest expense to the extent paid or payable, to be less than 3.00 to 1.00, during the applicable preceding twelve-month period. As of July 31, 2025, we were in compliance with the covenants and other agreements in the 2022 Credit Agreement.
2023 Credit Agreement
We have a $300.0 million senior secured credit agreement (the "2023 Credit Agreement") with a syndicate of financial institutions. The 2023 Credit Agreement is permitted incremental equivalent debt under the terms of the 2022 Credit Agreement. The 2023 Credit Agreement provides for a $300.0 million secured term loan facility on a pari passubasis with the 2022 Credit Agreement, with quarterly principal installments that continue through January 31, 2028, with any outstanding principal balance being due and payable at maturity on May 17, 2028. We used the borrowings under the 2023 Credit Agreement to repay and refinance a portion of the outstanding borrowings under the 2022 Credit Agreement. Interest accruing under the 2023 Credit Agreement is based on SOFR plus a credit spread adjustment or a base rate that resets periodically plus, in each case, a calculated margin amount that is based on our leverage ratio.
The repayment of all borrowings under the 2023 Credit Agreement is secured by a security interest in certain of our personal property and certain of the personal property of certain of our U.S. subsidiaries, including equipment and inventory and certain intangible assets, as well as a pledge of the capital stock of substantially all of our U.S. subsidiaries. However, in the event that we receive and maintain an investment grade rating from either Moody's Investors Services, Inc. or Standard & Poor's Financial Services LLC, we may request the release of such collateral. Our obligations under the 2023 Credit Agreement are secured on a pari passubasis with the obligations arising under the 2022 Credit Agreement.
The 2023 Credit Agreement contains covenants, including financial covenants, substantially the same as the covenants in 2022 Credit Agreement, as described above, and a "most favored lender" provision related to the 2022 Credit Agreement. As of July 31, 2025, we were in compliance with the covenants and other agreements in the 2023 Credit Agreement.
Short-Term Debt
Short-term debt is summarized as follows:
| (in millions) | July 31, 2025 | October 31, 2024 | |||||||||
| Accounts receivable credit facilities | 386.6 | - | |||||||||
| Other debt | 15.3 | 18.6 | |||||||||
| 401.9 | 18.6 | ||||||||||
Accounts Receivable Credit Facilities
We have a $290.0 million U.S. Receivables Financing Facility Agreement (the "U.S. RFA") that matures on May 15, 2026. As of July 31, 2025, there was a $284.3 million ($273.7 million as of October 31, 2024) outstanding balance under the U.S. RFA. The U.S. RFA also contains events of default and covenants that are substantially the same as the covenants under the 2022 Credit Agreement. As of July 31, 2025, we were in compliance with these covenants. Proceeds of the U.S. RFA are available for working capital and general corporate purposes. On August 28, 2025, the U.S. RFA was amended to provide an accounts receivable financing facility of $200.0 million.
We have a €100.0 million ($115.5 million as of July 31, 2025) European Receivables Financing Agreement (the "European RFA") that matures on April 21, 2026. As of July 31, 2025, $102.3 million ($84.2 million as of October 31, 2024) was
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outstanding under the European RFA. As of July 31, 2025, we were in compliance with covenants contained in the European RFA. Proceeds of the European RFA are available for working capital and general corporate purposes.
See Note 5 to the interim condensed consolidated financial statements included in Item 1 of this Form 10-Q for additional disclosures regarding our financial obligations.
Financial Instruments
Interest Rate Derivatives
As of July 31, 2025, we had various interest rate swaps with a total notional amount of $1,362.5 million ($1,400.0 million as of October 31, 2024) amortizing down over the term, in which we receive variable interest rate payments based on SOFR and in return are obligated to pay interest at a weighted average fixed interest rate of 2.99%. These derivatives are designated as cash flow hedges for accounting purposes and will mature between March 1, 2027 and July 16, 2029.
Accordingly, the gain or loss on these derivative instruments is reported as a component of other comprehensive income (loss) and reclassified into earnings in the same line item associated with the forecasted transactions and in the same period during which the hedged transaction affects earnings.
Foreign Exchange Hedges
We conduct business in international currencies and are subject to risks associated with changing foreign exchange rates. Our objective is to reduce volatility associated with foreign exchange rate changes to allow management to focus its attention on business operations. Accordingly, we enter into various contracts that change in value as foreign exchange rates change to protect the value of certain existing foreign currency assets and liabilities, commitments, and anticipated foreign currency cash flows.
As of July 31, 2025, and October 31, 2024, we had outstanding foreign currency forward contracts in the notional amount of $219.6 million, and $74.1 million, respectively.
Cross Currency Swap
We have operations and investments in various international locations and are subject to risks associated with changing foreign exchange rates. As of July 31, 2025, we have cross currency interest rate swaps that synthetically swap $534.9 million ($447.6 million as of October 31, 2024) of U.S. fixed rate debt to Euro denominated fixed rate debt. We receive a weighted average rate of 1.64%. These agreements are designated either net investment hedges or cash flow hedges for accounting purposes and will mature between October 5, 2026 and November 3, 2028.
Accordingly, the gain or loss on the net investment hedge derivative instruments is included in the foreign currency translation component of other comprehensive income (loss) until the net investment is sold, diluted, or liquidated. The gain or loss on the cash flow hedge derivative instruments is included in the unrealized foreign exchange component of other expense, offset by the underlying gain or loss on the underlying cash flows that are being hedged. Interest payments received from the cross currency swap are excluded from the net investment hedge effectiveness assessment and are recorded in interest expense, net on the consolidated statements of income.
During the first quarter of 2025, we executed a cash settlement of certain cross-currency swap contracts and simultaneously entered into new cross-currency swaps at prevailing market rates. The net cash settlement from restriking these swaps resulted in a cash receipt of $22.5 million of which $11.5 million related to cross-currency swap contracts designated as net investment hedges and $11.0 million related to cross-currency swap contracts designated as cash flow hedges.
See Note 6 to the interim condensed consolidated financial statements included in Item 1 of this Form 10-Q for additional disclosures regarding our financial instruments.
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Greif Inc. published this content on August 28, 2025, and is solely responsible for the information contained herein. Distributed via SEC EDGAR on August 28, 2025 at 20:03 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]