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Greif to shift focus from acquisitions to network optimization
By Aleesia Forni
Columbus, Ohio, Sept. 1 - Greif, Inc. completed 13 acquisitions in the last 12 months, but company officials expect the use of cash flow for such ventures to decrease in the near future.
"We only have a couple of acquisitions remaining in the pipeline," said chairman and chief executive officer Michael Gasser during the company's quarterly earnings conference call.
The company saw a year-to-date net debt increase of $357.1 million due in part to the funding of these acquisitions, as well as higher capital expenditures and increased working capital needs.
"I see very few new opportunities, if any, coming in while we stabilize the new operations and integrate them more fully through the businesses," Gasser said.
The company reported $2.7 million in acquisition-related costs during third quarter 2011, down from $8 million during second quarter 2011.
Senior vice president and chief financial officer Robert McNutt said this decrease in acquisition-related costs during the third quarter was expected, as the company shifts its focus from integration to network optimization.
McNutt also noted that in order to facilitate growth and maintain liquidity, its wholly owned subsidiary, Greif Luxembourg Finance SCA, issued €200 million of senior notes in July.
"These notes improved the balance between fixed and variable debt and extend overall maturities in the debt portfolio," McNutt said.
Greif also reported cash flow from operations of $35.4 million during the third quarter, compared to $74 million during the same quarter last year.
Greif is a Delaware, Ohio-based industrial packaging company.
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