Greif has 2.1x leverage ratio, at low end of target 2x to 2.5x range

By Devika Patel

Knoxville, Tenn., Aug. 30 – Greif, Inc. reported that its leverage ratio is on the low end of its targeted range of 2x to 2.5x and expects that it will be below that range at the end of the fourth quarter.

The company intends to maintain its targeted ratio, but may go above the targeted range if the right opportunity comes along.

“At the end of the second quarter, our leverage ratio stood at 2.1x, at the low end of our targeted leverage ratio of 2x to 2.5x net debt to EBITDA,” executive vice president and chief financial officer Larry A. Hilsheimer said on the company’s third quarter ended July 31 earnings conference call on Thursday.

“We intend to maintain our targeted leverage ratio but would consider temporarily exceeding it if a compelling growth opportunity emerged.

“Clearly, we end up showing our best ratios at the end of our fourth quarter and, with our EBITDA levels increasing and our debt not increasing, we’ll be at that point where we’d be below that 2x to 2.5x, so from a financial flexibility standpoint, we feel very, very good about our capacity for any potential opportunity that would arise,” Hilsheimer said.

Free cash flow increased by $16.4 million compared to the third quarter of 2017 to $80.6 million.

Cash and cash equivalents were $100.9 million as of July 31, 2018, compared to $142.3 million as of Oct. 31, 2017.

Long-term debt was $1,020,100,000 as of July 31, 2018, compared to $937.8 million as of Oct. 31, 2017.

Greif is a Delaware, Ohio-based industrial packaging company.

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