By 1808Delaware
Two Delaware-based corporations, Greif, Inc. and Franchise Group, Inc., made statements this week concerning company performance.
Greif, a world leader in industrial packaging products and services, announced fourth quarter and fiscal 2021 results:
Fourth Quarter Results Include (all results compared to the fourth quarter 2020 unless otherwise noted)(1):
Net income of $104.5 million or $1.74 per diluted Class A share compared to net income of $44.4 million or $0.74 per diluted Class A share. Net income, excluding the impact of adjustments(2), of $115.4 million or $1.93 per diluted Class A share compared to net income, excluding the impact of adjustments, of $46.4 million or $0.78 per diluted Class A share. Adjusted EBITDA(3) increased by $56.8 million to $211.3 million.
Net cash provided by operating activities decreased by $63.1 million to $137.3 million. Adjusted free cash flow(4) decreased by $79.1 million to $94.8 million primarily as a result of inflationary raw material costs.
Total debt decreased by $261.4 million to $2,225.6 million. Net debt(5) decreased by $280.1 million to $2,101.0 million and decreased by $66.8 million sequentially from the third quarter of 2021.
The Company’s leverage ratio(6) decreased to 2.49x compared to 3.66x, within our targeted leverage ratio range of 2.0x – 2.5x.
Fiscal Year Results include (all results compared to the fiscal year 2020 unless otherwise noted):
Net income of $390.7 million or $6.54 per diluted Class A share compared to net income of $108.8 million or $1.83 per diluted Class A share. Net income, excluding the impact of adjustments, of $334.5 million or $5.60 per diluted Class A share compared to net income, excluding the impact of adjustments, of $190.9 million or $3.22 per diluted Class A share. Adjusted EBITDA increased by $121.6 million to $764.2 million.
Net cash provided by operating activities decreased by $58.7 million to $396.0 million. Adjusted free cash flow decreased by $72.1 million to $274.1 million.
The Company paid $105.8 million in cash dividends to stockholders in fiscal 2021.
Pete Watson, Greif’s President and Chief Executive Officer, commented: “The global Greif team delivered exceptional results in fiscal 2021 and overcame significant external challenges to deliver record net sales and profits for the full fiscal year,” said Pete Watson, Greif’s President and Chief Executive Officer. “In addition, we advanced our financial priorities, increasing our dividend and reaching our targeted leverage ratio range, while making notable progress on our ESG journey. Looking ahead, we remain well positioned to provide differentiated packaging solutions that generate value for our customers and shareholders.”
Meanwhile, Franchise Group, Inc. (“Franchise Group,” “FRG,” or the “Company”) announced its outlook for its fiscal year 2022 as well as a fourth quarter dividend.
For the fiscal year 2022, the Company expects to generate revenue of approximately $4.45 billion, net income of approximately $180 million or $4.20 per share, Adjusted EBITDA of approximately $450 million and Non-GAAP EPS of approximately $5.00 per share. In formulating its outlook, the Company anticipates it will complete the sale of non-core assets acquired from W.S. Badcock Corporation (“Badcock”) by the end of its fiscal second quarter of 2022 and will reduce net debt from approximately $1.7 billion today to approximately $1.1 billion of net debt by the end of its fiscal year 2022. In calculating EPS, the Company is using approximately 41 million weighted average shares outstanding. Non-GAAP EPS is calculated by adding the tax effected impact of adjustments to EBITDA to net income on a per share basis. In calculating GAAP and Non-GAAP EPS, the Company is currently using an effective tax rate of approximately 27%.
The Company’s outlook excludes potential acquisitions and divestitures, other than the anticipated sale of Badcock’s non-core assets, or potential refranchising activities.
Franchise Group, Inc. (NASDAQ: FRG) (“Franchise Group” or the “Company”) also announced that its Board of Directors approved a quarterly dividend of $0.46875 per share to Series A Cumulative Perpetual Preferred stockholders. The cash dividend will be paid on or about January 15, 2022 to holders of record of the Company’s Series A preferred stock on the close of business on December 31, 2021.
