# Greif, Inc: Form 10-Q for the period ended Jan 31, 2025

- Company: [Greif, Inc](/companies/gef.md) (CIK 43920)
- Form: 10-Q
- Filed: 2025-02-27
- Accepted by EDGAR: Feb 27, 2025, 15:38 ET
- Period: 2025-01-31
- Accession: 0000043920-25-000009
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/43920/000004392025000009/gef-20250131.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/43920/000004392025000009/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2025-01-31.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2024-11-01 to 2025-01-31 | $1.27bn | us-gaap:RevenueFromContractWithCustomerIncludingAssessedTax |
| Cost of revenue | 3 months, 2024-11-01 to 2025-01-31 | $1.02bn | us-gaap:CostOfGoodsAndServicesSold |
| Gross profit | 3 months, 2024-11-01 to 2025-01-31 | $245.5m | us-gaap:GrossProfit |
| Selling, general and administrative | 3 months, 2024-11-01 to 2025-01-31 | $167.7m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Operating income | 3 months, 2024-11-01 to 2025-01-31 | $59.9m | us-gaap:OperatingIncomeLoss |
| Income tax | 3 months, 2024-11-01 to 2025-01-31 | $7.8m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2024-11-01 to 2025-01-31 | $8.6m | us-gaap:NetIncomeLoss |
| Operating cash flow | 3 months, 2024-11-01 to 2025-01-31 | −$30.8m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Dividends paid | 3 months, 2024-11-01 to 2025-01-31 | $31.0m | us-gaap:PaymentsOfDividendsCommonStock |
| Cash and equivalents | at 2025-01-31 | $201.1m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2025-01-31 | $1.60bn | us-gaap:AssetsCurrent |
| Total assets | at 2025-01-31 | $6.59bn | us-gaap:Assets |
| Current liabilities | at 2025-01-31 | $1.22bn | us-gaap:LiabilitiesCurrent |
| Long-term debt | at 2025-01-31 | $2.42bn | us-gaap:LongTermDebtNoncurrent |
| Current portion of debt | at 2025-01-31 | $95.8m | us-gaap:LongTermDebtCurrent |
| Short-term borrowings | at 2025-01-31 | $322.2m | us-gaap:ShortTermBorrowings |
| Shareholders' equity | at 2025-01-31 | $2.04bn | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 46,251 characters.

### 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 January 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 months ended January 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 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.

### 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 fiber drums, containerboard, corrugated sheets, corrugated containers, 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, require us to make estimates and 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.

### 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 months ended January 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 income tax (benefit) expense, plus depreciation, depletion and amortization expense, plus acquisition and integration related costs, plus restructuring 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 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.

### First 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 January 31, 2025 and 2024:

*(in millions)*

| Net sales: | Three Months Ended January 31, 2025 | 2024 |
| --- | ---: | ---: |
| Customized Polymer Solutions | $295.1 | $228.0 |
| Durable Metal Solutions | 342.2 | 370.5 |
| Sustainable Fiber Solutions | 561.4 | 528.8 |
| Integrated Solutions | 67.1 | 78.5 |
| Total net sales | $1,265.8 | $1,205.8 |
| **Operating profit:** |  |  |
| Customized Polymer Solutions | $13.8 | $11.7 |
| Durable Metal Solutions | 37.6 | 36.9 |
| Sustainable Fiber Solutions | 3.6 | 8.2 |
| Integrated Solutions | 4.9 | 12.1 |
| Total operating profit | $59.9 | $68.9 |
| **Adjusted EBITDA:** |  |  |
| Customized Polymer Solutions | $39.5 | $25.8 |
| Durable Metal Solutions | 45.2 | 44.7 |
| Sustainable Fiber Solutions | 51.5 | 53.0 |
| Integrated Solutions | 8.9 | 13.5 |
| Total Adjusted EBITDA | $145.1 | $137.0 |

The following table sets forth Adjusted EBITDA, reconciled to net income and operating profit, for our consolidated results for the three months ended January 31, 2025 and 2024:

*(in millions)*

|  | Three Months Ended January 31, 2025 | 2024 |
| --- | ---: | ---: |
| **Net income** | $14.4 | $74.3 |
| Plus: interest expense, net | 37.7 | 24.2 |
| Plus: income tax expense | 7.8 | (38.2) |
| Plus: other expense, net | 0.4 | 9.1 |
| Plus: equity earnings of unconsolidated affiliates, net of tax | (0.4) | (0.5) |
| **Operating profit** | 59.9 | 68.9 |
| Less: equity earnings of unconsolidated affiliates, net of tax | (0.4) | (0.5) |
| Plus: depreciation, depletion and amortization expense | 66.6 | 60.4 |
| Plus: acquisition and integration related costs | 2.2 | 2.6 |
| Plus: restructuring charges | 2.7 | 5.7 |
| Plus: non-cash asset impairment charges | 13.7 | 1.3 |
| Plus: gain on disposal of properties, plants and equipment, net | (1.6) | (2.7) |
| Plus: loss on disposal of businesses, net | 0.9 | — |
| Plus: other costs\* | 0.3 | 0.3 |
| **Adjusted EBITDA** | $145.1 | $137.0 |
| \*includes fiscal year-end change costs and share-based compensation impact of disposals of businesses |  |  |

28

The following table sets forth Adjusted EBITDA for our business segments, reconciled to the operating profit for each segment, for the three months ended January 31, 2025 and 2024:

*(in millions)*

|  | Three months ended January 31, 2025 Customized Polymer Solutions | Durable Metal Solutions | Sustainable Fiber Solutions | Integrated Solutions | Consolidated |
| --- | ---: | ---: | ---: | ---: | ---: |
| **Operating profit** | 13.8 | 37.6 | 3.6 | 4.9 | 59.9 |
| Less: equity earnings of unconsolidated affiliates, net of tax | — | — | — | (0.4) | (0.4) |
| Plus: depreciation and amortization expense | 22.9 | 6.8 | 34.3 | 2.6 | 66.6 |
| Plus: acquisition and integration related costs | 2.2 | — | — | — | 2.2 |
| Plus: restructuring charges | 0.5 | 0.5 | 1.6 | 0.1 | 2.7 |
| Plus: non-cash asset impairment charges | — | 1.5 | 12.2 | — | 13.7 |
| Plus: gain on disposal of properties, plants and equipment, net | — | (1.2) | (0.4) | — | (1.6) |
| Plus: loss on disposal of businesses, net | — | — | — | 0.9 | 0.9 |
| Plus: other costs\* | 0.1 | — | 0.2 | — | 0.3 |
| **Adjusted EBITDA** | $39.5 | $45.2 | $51.5 | $8.9 | 145.1 |
|  | **Three months ended January 31, 2024** |  |  |  |  |
| (in millions) | **Customized Polymer Solutions** | **Durable Metal Solutions** | **Sustainable Fiber Solutions** | **Integrated Solutions** | **Consolidated** |
| **Operating profit** | 11.7 | 36.9 | 8.2 | 12.1 | 68.9 |
| Less: equity earnings of unconsolidated affiliates, net of tax | — | — | — | (0.5) | (0.5) |
| Plus: depreciation and amortization expense | 12.0 | 7.3 | 38.0 | 3.1 | 60.4 |
| Plus: acquisition and integration related costs | 1.8 | — | 0.8 | — | 2.6 |
| Plus: restructuring charges | 0.2 | 0.4 | 4.6 | 0.5 | 5.7 |
| Plus: non-cash asset impairment charges | — | — | 1.3 | — | 1.3 |
| Plus: gain on disposal of properties, plants and equipment, net | — | — | — | (2.7) | (2.7) |
| Plus: other costs\* | 0.1 | 0.1 | 0.1 | — | 0.3 |
| **Adjusted EBITDA** | $25.8 | $44.7 | $53.0 | $13.5 | $137.0 |
| \*includes fiscal year-end change costs and share-based compensation impact of disposals of businesses |  |  |  |  |  |

### Net Sales

Net sales were $1,265.8 million for the first quarter of 2025 compared with $1,205.8 million for the first quarter of 2024. The $60.0 million increase was primarily due to $58.5 million contributions from recent acquisitions. See the “Segment Review” below for additional information on net sales by segment.

### Gross Profit

Gross profit was $245.5 million for the first quarter of 2025 compared with $221.6 million for the first quarter of 2024. The $23.9 million increase was primarily due to the same factors that impacted net sales, partially offset by higher raw material, transportation and manufacturing costs. See the “Segment Review” below for additional information on gross profit by segment. Gross profit margin was 19.4 percent and 18.4 percent for the first quarter of 2025 and 2024, respectively.

### Selling, General and Administrative Expenses

Selling, general and administrative (“SG&A”) expenses were $167.7 million for the first quarter of 2025 compared with $145.8 million for the first quarter of 2024. The $21.9 million increase was primarily related to recent acquisitions. SG&A expenses were 13.2 percent and 12.1 percent of net sales for the first quarter of 2025 and 2024, respectively.

### Financial Measures

Operating profit was $59.9 million for the first quarter of 2025 compared with $68.9 million for the first quarter of 2024. Net income was $14.4 million for the first quarter of 2025 compared with $74.3 million for the first quarter of 2024. Adjusted EBITDA was $145.1 million for the first quarter of 2025 compared with $137.0 million for the first 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

Despite slightly improved year-over-year volumes that vary across geographies and product groups, we have not identified and do not anticipate seeing any compelling customer demand inflection on the horizon. We expect prices for steel and resin to increase moderately through 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.

#### 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 $295.1 million for the first quarter of 2025 compared with $228.0 million for the first quarter of 2024. The $67.1 million increase was primarily due to $58.5 million of contributions from recent acquisitions.

Gross profit was $60.6 million for the first quarter of 2025 compared with $44.2 million for the first quarter of 2024. The $16.4 million increase in gross profit 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 20.5 percent and 19.4 percent for the first quarter of 2025 and 2024, respectively.

Operating profit was $13.8 million for the first quarter of 2025 compared with operating profit of $11.7 million for the first quarter of 2024. The $2.1 million increase was primarily due to the same factors that impacted gross profit, partially offset by higher SG&A expenses due to recent acquisitions. Adjusted EBITDA was $39.5 million for the first quarter of 2025 compared with $25.8 million for the first quarter of 2024. The $13.7 million increase in Adjusted EBITDA was primarily due to the same factors that impacted gross profit.

#### 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 $342.2 million for the first quarter of 2025 compared with $370.5 million for the first quarter of 2024. The $28.3 million decrease was primarily due to $16.9 million of negative foreign currency translation impacts and $10.3 million attributable to lower volumes.

Gross profit was $63.1 million for the first quarter of 2025 compared with $65.8 million for the first quarter of 2024. The $2.7 million decrease in gross profit was primarily due to the same factors that impacted net sales, partially offset by lower raw material costs. Gross profit margin was 18.4 percent and 17.8 percent for the first quarter of 2025 and 2024, respectively.

Operating profit was $37.6 million for the first quarter of 2025 compared with operating profit of $36.9 million for the first quarter of 2024. The $0.7 million increase was primarily due to lower SG&A expenses, partially offset by the same factors that impacted gross profit. Adjusted EBITDA was $45.2 million for the first quarter of 2025 compared with $44.7 million for the first quarter of 2024. The $0.5 million increase in Adjusted EBITDA was primarily due to the same factors that impacted operating profit.

#### Sustainable Fiber Solutions

Our Sustainable Fiber Solutions segment produces and sells fiber-based packaging products, including fiber drums, containerboard, corrugated sheets, corrugated containers, 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 $561.4 million for the first quarter of 2025 compared with $528.8 million for the first quarter of 2024. The $32.6 million increase was primarily due to $25.8 million from higher published containerboard and boxboard prices.

Gross profit was $103.4 million for the first quarter of 2025 compared with $88.3 million for the first quarter of 2024. The $15.1 million increase in gross profit was primarily due to the same factors that impacted net sales, partially offset by higher raw material costs. Gross profit margin was 18.4 percent and 16.7 percent for the first quarter of 2025 and 2024, respectively.

Operating profit was $3.6 million for the first quarter of 2025 compared with $8.2 million for the first quarter of 2024. The $4.6 million decrease was primarily due to higher SG&A expenses and higher impairment charges related to plant closures, partially offset by the same factors that impacted gross profit. Adjusted EBITDA was $51.5 million for the first quarter of 2025 compared with $53.0 million for the first quarter of 2024. The $1.5 million decrease in Adjusted EBITDA was primarily due to higher SG&A expenses, partially offset by the same factors that impacted gross profit, excluding impacts from depreciation and amortization.

#### 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 $67.1 million for the first quarter of 2025 compared with $78.5 million for the first quarter of 2024. The $11.4 million decrease was primarily due to an $11.3 million impact from the divestiture of Delta Petroleum Company, Inc. (the “Delta Divestiture”) during the third quarter of 2024.

Gross profit was $18.4 million for the first quarter of 2025 compared with $23.3 million for the first quarter of 2024. The $4.9 million decrease in gross profit was primarily due to the Delta Divestiture. Gross profit margin was 27.4 percent and 29.7 percent for the first quarter of 2025 and 2024, respectively. The decrease in gross profit margin was primarily due to the Delta Divestiture.

Operating profit was $4.9 million for the first quarter of 2025 compared with operating profit of $12.1 million for the first quarter of 2024. The $7.2 million decrease was primarily due to the same factors that impacted gross profit and lower gains on disposal of properties, plants and equipment, net. Adjusted EBITDA was $8.9 million for the first quarter of 2025 compared with $13.5 million for the first quarter of 2024. The $4.6 million decrease in Adjusted EBITDA was primarily due to the same factors that impacted gross profit.

### Income Tax Expense

Our quarterly income tax expense was computed in accordance with Accounting Standards Codification (“ASC”) 740-270, "Income Taxes - Interim Reporting." In accordance with this accounting standard, annual estimated tax expense is computed based on forecasted annual earnings and other forecasted annual amounts, including, but not limited to items such as uncertain tax positions and withholding taxes. Additionally, losses from jurisdictions for which a valuation allowance has been provided have not been included in the annual estimated tax rate. Income tax expense each quarter is provided for on a current year-to-date basis using the annual estimated tax rate, adjusted for discrete taxable events that occur during the interim period.

A number of countries have enacted legislation to implement the Organization for Economic Cooperation and Development’s global minimum tax regime of 15% of reported profits (the “Pillar 2 taxes”). During 2023 and 2024, many countries began to incorporate the Pillar 2 tax model rule concepts into their domestic laws. Although the model rules provide a framework for applying the minimum tax, countries may enact the Pillar 2 taxes slightly differently than the model rules and on different timelines and may adjust domestic tax incentives in response to the Pillar 2 taxes. We do not expect these changes to have a material impact on our consolidated financial statements for 2025. We continue to evaluate the impacts of proposed and enacted legislation with respect to the global minimum tax regime in the jurisdictions in which we operate. Our effective tax rate and cash tax payments could increase in future periods as further jurisdictions enact legislation.

Income tax expense for the first quarter of 2025 was $7.8 million on $21.8 million of pretax income, and income tax benefit for the first quarter of 2024 was $38.2 million on $35.6 million of pretax income. The $46.0 million net increase in income tax expense was primarily attributable to the following:

- A $48.1 million increase related to non-recurring discrete tax benefits was recorded during the first quarter of 2024 related to the recognition of deferred tax assets due to the onshoring of certain intangible property;
- A $2.7 million increase related to other miscellaneous discrete items; and
- A $4.8 million decrease related to changes in the expected mix of earnings among tax jurisdictions, including jurisdictions for which valuation allowances have been recorded, as well as the timing of recognition of the related tax expense.

We are subject to audits by U.S. federal, state and local tax authorities and foreign tax authorities. We believe that adequate provisions have been made for any adjustments that may result from tax examinations. However, the outcome of tax audits cannot be predicted with certainty. If any issues addressed in the tax audits are resolved in a manner not consistent with management’s expectations, we could be required to adjust our provision for income taxes in the period such resolution occurs.

The estimated net decrease in unrecognized tax benefits for the next 12 months ranges from zero to $4.7 million. Actual results may differ materially from this estimate.

### 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.

### Cash Flow

| Three Months Ended January 31, (in millions) | 2025 | 2024 |
| --- | ---: | ---: |
| Net cash (used in) provided by operating activities | $(30.8) | $4.5 |
| Net cash used in investing activities | (19.0) | (53.6) |
| Net cash provided by financing activities | 62.5 | 36.1 |
| Effects of exchange rates on cash | (9.3) | 11.4 |
| Net increase (decrease) in cash and cash equivalents | 3.4 | (1.6) |
| Cash and cash equivalents at beginning of year | 197.7 | 180.9 |
| Cash and cash equivalents at end of period | $201.1 | $179.3 |

### Operating Activities

During the first three months of 2025 and 2024, cash provided by change in accounts receivable was $31.9 million and $21.5 million, respectively. The favorable change in accounts receivable levels was primarily due to an increase in net sales and timing of collections.

During the first three months of 2025 and 2024, cash used in change in inventories was $(21.5) million and $(28.0) million, respectively. The favorable change in inventories was primarily due to decrease in raw material prices.

During the first three months of 2025 and 2024, cash used in change in accounts payable was $(33.5) million and $(21.1) million, respectively. The unfavorable change in accounts payable levels was primarily due to increase in purchases to meet demand and timing of payments.

### Investing Activities

During the first three months of 2025 and 2024, we invested $35.7 million and $55.6 million, respectively, of cash in capital expenditures.

During the first three 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.

### Financing Activities

During the first three months of 2025 and 2024, we paid cash dividends to our stockholders in the amount of $31.0 million and $29.7 million, respectively.

During the first three months of 2025 and 2024, we borrowed $103.8 million and $74.1 million of debt, net of payments, respectively.

### Financial Obligations

### Long-Term Debt

Long-term debt is summarized as follows:

*(in millions)*

|  | January 31, 2025 | October 31, 2024 |
| --- | ---: | ---: |
| 2022 Credit Agreement - Term Loans | $1,685.4 | $1,707.4 |
| 2023 Credit Agreement - Term Loan | 286.9 | 288.8 |
| Accounts receivable credit facilities | — | 357.9 |
| 2022 Credit Agreement - Revolving Credit Facility | 552.0 | 373.7 |
| Other debt | — | 1.3 |
|  | 2,524.3 | 2,729.1 |
| Less: current portion | 95.8 | 95.8 |
| Less: deferred financing costs | 6.3 | 7.1 |
| Long-term debt, net | $2,422.2 | $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 passu* basis. 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 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. Subject to the terms of the 2022 Credit Agreement, we have an option to add borrowings to the 2022 Credit Agreement with the agreement of the lenders. As of January 31, 2025, we had $248.0 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.

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 January 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 passu* basis 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 passu* basis 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 January 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)*

|  | January 31, 2025 | October 31, 2024 |
| --- | ---: | ---: |
| Accounts receivable credit facilities | 306.2 | — |
| Other debt | 16.0 | 18.6 |
|  | 322.2 | 18.6 |

#### Accounts Receivable Credit Facilities

We have a $300.0 million U.S. Receivables Financing Facility Agreement (the “U.S. RFA”) that matures on May 16, 2025. As of January 31, 2025, there was a $228.4 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 January 31, 2025, we were in compliance with these covenants. Proceeds of the U.S. RFA are available for working capital and general corporate purposes.

We have a €100.0 million ($104.2 million as of January 31, 2025) European Receivables Financing Agreement (the “European RFA”) that matures on April 22, 2025. As of January 31, 2025, $77.8 million ($84.2 million as of October 31, 2024) was outstanding on the European RFA. As of January 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 January 31, 2025, we had various interest rate swaps with a total notional amount of $1,400.0 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 2.97%. 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 January 31, 2025, and October 31, 2024, we had outstanding foreign currency forward contracts in the notional amount of $109.8 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. We have cross currency interest rate swaps that synthetically swap $421.3 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 1.67%.

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.

## Controls and procedures

As filed, 1,382 characters.

### Changes in Internal Control Over Financial Reporting

There has been no change in our internal control over financial reporting that occurred during the most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

### Disclosure Controls and Procedures

With the participation of our principal executive officer and principal financial officer, our management has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act, as of the end of the period covered by this report. Based upon that evaluation, our principal executive officer and principal financial officer have concluded that, as of the end of the period covered by this report:

- Information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC;
- Information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure; and
- Our disclosure controls and procedures are effective.

## Risk factors

As filed, 137 characters.

There have been no material changes in our risk factors from those disclosed in the 2024 Form 10-K under Part I, Item 1A –– Risk Factors.

Filed Feb 27, 2025.
Source: SEC EDGAR, the filing index for accession 0000043920-25-000009. Last ingested by Listed: Nov 6, 2026, 18:20 ET. No prices; not investment advice.