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Greif Reports Net Sales Increase
December 8, 2007 Official Board MarketsGreif, Inc. Delaware, Ohio, reports a net sales increase of 26 percent to $3.3 billion in fiscal 2007 compared to $2.6 billion in fiscal 2006. Of this increase, $693.8 million is primarily due to higher sales of Industrial Packaging & Services ($665.5 million) products, which benefited principally from stronger sales volumes compared to fiscal 2006, and improving fundamentals in Paper, Packaging and Services ($28.6 million).
Gross profit increased 26 percent to $605.4 million in fiscal 2007 compared to $479.2 million for fiscal 2006. The higher gross profit was attributable to positive contributions from organic growth and acquisitions coupled with the Greif Business System.
The gross profit margin was 18.2 percent of net sales in fiscal 2007 and 2006. Lower labor, transportation and other manufacturing costs as a percentage of net sales resulting from the Greif Business System offset the change in sales mix and increases in raw material costs.
For the fourth quarter of 2007, gross profit was $170.5 million, or 19.3 percent of net sales, versus $143.3 million, or 19.5 percent of net sales, in the fourth quarter of 2006. The 20 basis point decline was due to sales mix and increases in raw material costs, partially offset by benefits from the Greif Business System.
The Paper, Packaging and Services segment’s net sales were $696.6 million in fiscal 2007 compared to $668.0 million in fiscal 2006. This was principally due to higher containerboard selling prices implemented in fiscal 2006 and slightly improved volumes.
The Paper, Packaging and Services segment’s gross profit margin increased to 17.8 percent in fiscal 2007 from 17.5 percent in fiscal 2006. Higher raw material costs, especially OCC, were partially offset by contributions from further execution of the Greif Business System. The previously announced $40 per ton containerboard price increase has been fully implemented and is expected to benefit the segment's results beginning in the first quarter of 2008.
