DELAWARE, Ohio (News release) -- Greif, Inc., a global leader in industrial packaging products and services, announced fiscal first quarter 2026 results.

On June 30, 2025, we entered into a definitive agreement to divest our containerboard business, including our CorrChoice sheet feeder system (the "Containerboard Business"), in an all-cash transaction for $1.8 billion to Packaging Corporation of America. The transaction closed as of August 31, 2025. As a result, the Containerboard Business was presented as discontinued operations beginning in the third quarter of 2025. Unless otherwise noted, the discussions and disclosure tables throughout this press release relate only to our continuing operations.

Effective October 1, 2025, our Integrated Solutions reportable segment was renamed Innovative Closure Solutions. Additionally, activities related to the purchase and sale of recycled fiber and the production and sale of adhesives used in paperboard products, which were previously reported within the Integrated Solutions reportable segment, are now reported within the Sustainable Fiber Solutions reportable segment. Likewise, activities related to production and sale of complimentary packaging products and services such as paints, linings and filling that are used in or relate to our steel products and were previously reported within the Integrated Solutions reportable segment, are now reported within the Durable Metal Solutions reportable segment.

Fiscal First Quarter 2026 Financial Highlights:
(all current period results are compared to the first quarter of 2025 and both periods reflect only continuing operations unless otherwise noted)

• Net income increased to $176.6 million or $3.00 per diluted Class A share compared to net income of $6.6 million or $0.13 per diluted Class A share.
• Net income, excluding the impact of adjustments⁽¹⁾, increased 146.3% to $26.6 million or $0.48 per diluted Class A share compared to net income, excluding the impact of adjustments, of $10.8 million or $0.20 per diluted Class A share. This increase is largely attributed to our substantial cost optimization progress in manufacturing cost management and SG&A cost reductions, ending the quarter with $65.0 million of run-rate cost optimization towards out total commitment of $120.0 million.
• Adjusted EBITDA⁽²⁾ increased 24.0% to $122.5 million compared to Adjusted EBITDA of $98.8 million.
• Net cash provided by operating activities decreased by $41.0 million to a use of $24.4 million. Adjusted free cash flow⁽³⁾ decreased by $17.7 million to a use of $41.0 million. Adjusted free cash flow in the prior year includes contribution from the Containerboard Business and thus is not directly comparable to current year results.
• Total debt of $944.0 million decreased by $1,896.2 million primarily due to repayment of debt of approximately $1,864.0 million from the sales of the Containerboard Business and the timberlands business. Net debt⁽⁴⁾ decreased by $1,938.6 million to $700.5 million. Our leverage ratio⁽⁵⁾ decreased to 1.2x from 3.6x in the prior year quarter.

Strategic Actions and Announcements

• Achieved $65.0 million of run-rate cost optimization by the end of first quarter of fiscal 2026, increased from the $50.0 million reported as of the end of the fourth quarter of fiscal 2025. The incremental $15.0 million is primarily due to SG&A savings related to actions taken early in fiscal 2026, which are already incorporated in our fiscal 2026 guidance.
• During first quarter of fiscal 2026, completed approximately $130.0 million of share repurchases under our existing $150.0 million share repurchase plan, repurchasing approximately 1.8 million shares of Class A and 0.1 million shares of Class B.
• During first quarter of fiscal 2026, obtained Board of Directors authorization for an additional $300.0 million of future share repurchases, which we intend to utilize in a disciplined, ongoing manner, targeting up to approximately 2% of outstanding shares annually beyond our current repurchase plans.
• Reaffirming low-end guidance of $630.0 million Adjusted EBITDA and $315.0 million Adjusted Free Cash Flow for fiscal 2026, reflecting strong first quarter execution and confidence in our previously communicated assumptions. (See "Company Outlook" below)

Commentary from CEO Ole Rosgaard

"Greif entered fiscal 2026 with strong momentum," said Ole Rosgaard, President and CEO of Greif Inc. "We delivered a 24.0 percent year-over-year increase in Adjusted EBITDA, expanded margins across the business, and executed meaningful cost reductions, all in a muted demand environment. At the same time, we reduced leverage to 1.2x while returning approximately $130.0 million to shareholders through disciplined share repurchases. This performance underscores the strength of our portfolio, the effectiveness of our operating model, and our ability to convert execution into results. Our strategy is working, and we are positioned to continue delivering durable earnings and cash flow improvement."

(1) Adjustments that are excluded from net income and from earnings per diluted Class A share are acquisition and integration related costs, restructuring and other charges, non-cash asset impairment charges, non-cash pension settlement charges, (gain) loss on disposal of properties, plants and equipment, net, (gain) loss on disposal of businesses, net, and other costs.

(2) Adjusted EBITDA is defined as net income, plus interest expense, net, plus non-cash pension settlement charges, 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.

(3) Adjusted free cash flow is defined as net cash provided by operating activities, less cash paid for purchases of properties, plants and equipment, plus cash paid for acquisition and integration related costs, plus cash paid for integration related Enterprise Resource Planning (ERP) systems and equipment, plus cash paid for taxes related to Containerboard Business divestment, plus cash paid for other nonrecurring costs. The cash flows from Containerboard Business have not been segregated and are included within the adjusted free cash flow for comparative period.

(4) Net debt is defined as total debt less cash and cash equivalents.

(5) Leverage ratio for the periods indicated is defined as adjusted net debt divided by trailing twelve month EBITDA, each as calculated under the terms of the Company's Second Amended and Restated Credit Agreement dated as of March 1, 2022, filed as Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended January 31, 2022 (the "2022 Credit Agreement"). As calculated under the 2022 Credit Agreement, adjusted net debt was $668.4 million and $2,558.4 as of December 31, 2025 and January 31, 2025 respectively, and trailing twelve month credit agreement EBITDA was $573.7 million and $705.7 as of December 31, 2025 and January 31, 2025, respectively.

Note: A reconciliation of the differences between all non-GAAP financial measures used in this release with the most directly comparable GAAP financial measures is included in the financial schedules that are a part of this release. These non-GAAP financial measures are intended to supplement, and should be read together with, our financial results. They 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 these non-GAAP financial measures.

Fiscal First Quarter 2026 Segment Results:
(all current period results are compared to the first quarter of 2025 and both periods reflect only continuing operations unless otherwise noted)

Net sales are impacted mainly by the volume of products sold, selling prices and product mix, and the impact of changes in foreign currencies against the U.S. Dollar. The table below shows the percentage impact of each of these items on net sales for our primary products for the fiscal first quarter of 2026 as compared to the prior year quarter for the business segments indicated.

Customized Polymer Solutions

Net sales increased by $10.7 million to $305.1 million primarily due to $13.3 million of positive foreign currency translation impacts, partially offset by lower volumes.

Gross profit decreased by $0.8 million to $57.8 million. The decrease in gross profit was primarily due to higher manufacturing costs and higher depreciation expense, partially offset by the same factors that impacted net sales.

Operating profit increased by $1.4 million to $2.5 million primarily due to lower integration costs from prior acquisitions and lower SG&A expenses, partially offset by the same factors that impacted gross profit.

Adjusted EBITDA increased by $7.0 million to $35.5 million primarily due to the same factors that impacted net sales and lower SG&A expenses, partially offset by higher manufacturing costs.

Durable Metal Solutions

Net sales decreased by $1.1 million to $354.8 million primarily due to $18.6 million attributable to lower volumes, lower average selling prices and partially offset by $22.8 million positive foreign currency translation impacts.

Gross profit increased by $1.7 million to $70.7 million. The increase in gross profit was primarily due to lower raw material purchases, partially offset by the same factors that impacted net sales.

Operating profit increased by $2.4 million to $32.9 million primarily due to the same factors that impacted gross profit.

Adjusted EBITDA increased by $9.0 million to $45.8 million primarily due to the same factors that impacted gross profit and lower SG&A expenses.

Sustainable Fiber Solutions

Net sales decreased by $32.1 million to $311.9 million primarily due to $24.7 million attributable to lower volumes.

Gross profit increased by $0.9 million to $65.2 million. The increase in gross profit was primarily due to lower raw material costs and purchases, partially offset by the same factors that impacted net sales.

Operating profit increased by $217.4 million to $218.5 million primarily due to a $216.2 million gain from the sale of our timberlands business, during the first quarter of 2026.

Adjusted EBITDA increased by $7.1 million to $36.6 million primarily due to lower SG&A expenses and the same factors that impacted gross profit.

Innovative Closure Solutions

Net sales increased by $0.6 million to $23.0 million primarily due to higher average selling prices and positive foreign currency translation impact, partially offset by lower volumes.

Gross profit increased by $1.4 million to $8.9 million. The increase in gross profit was primarily due to lower raw material purchases and the same factors that impacted net sales.

Operating profit increased by $1.3 million to $2.7 million primarily due to the same factors that impacted gross profit.

Adjusted EBITDA increased by $0.6 million to $4.6 million primarily due to the same factors that impacted gross profit.

Tax Summary

During the first quarter, we recorded an income tax rate of 24.4 percent and a tax rate excluding the impact of adjustments of 31.7 percent. Calculating income tax expense during interim periods frequently causes fluctuations in our quarterly effective tax rates. For fiscal 2026, we expect our tax rate to range between 26.0 to 30.0 percent and our tax rate excluding adjustments to range between 28.0 to 32.0 percent.

Company Outlook

Our markets have now experienced a multi-year period of industrial contraction, and we have not identified any compelling demand inflection on the horizon. While we believe we are well positioned for an eventual recovery of the industrial economy, at this time we believe it is appropriate to continue to provide only low-end guidance based on the continuing demand trends reflected in the past year, current price/cost factors, other identifiable discrete items, some of which we will discuss during our first quarter earnings release call. Call-in details are provided below.

Note: Our fiscal 2026 low-end guidance estimates of Adjusted EBITDA and Adjusted free cash flow and our estimated tax rate and tax rate excluding the impact of adjustments contain forward-looking statements and actual results may differ materially as a result of known and unknown uncertainties and risks, including those set forth below under the heading "Forward-Looking Statements." In addition, these forward-looking non-GAAP financial measures are presented on a non-GAAP basis without reconciliations to their most directly comparable GAAP financial measures, forecasted net income in the case of Adjusted EBITDA and forecasted net cash provided by operating activities in the case of Adjusted free cash flow, due to the inherent difficulty in projecting and quantifying the various adjusting items necessary for such reconciliations, such as gains or losses on the disposal of businesses or properties, plants and equipment, non-cash asset impairment charges due to unanticipated changes in the business, restructuring related activities, acquisition and integration related costs, debt extinguishment costs, stock-based compensation expense, amortization and depreciation expense, merger and acquisition activity, and other costs that have not yet occurred, are out of our control, or cannot be reasonably predicted. Accordingly, reconciliations of our guidance for Adjusted EBITDA and Adjusted free cash flow are not available without unreasonable effort.