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J.M. Smucker Announces Second Quarter Results

ORRVILLE, Ohio, Nov. 17 /PRNewswire/ -- The J.M. Smucker Company (NYSE: SJMA, SJMB), announced today that earnings for the second quarter ending October 31, 1997, were $8,602,000, up 10% over the $7,818,000 in earnings for the same period last year. Earnings per share were $.30 for the quarter, compared to $.26 in the prior year. Sales for the three-month period were $145,187,000, versus $138,296,000 in last year's second quarter, an increase of 5%.

The Company also announced that sales for the first six months of the fiscal year were $292,576,000 compared to $267,925,000 last year, an increase of over 9%. Earnings for the first six months were up 21%, while earnings per share were $.64, compared to $.52 for the first six months of the prior year.

According to the Company, the Consumer, Industrial, Foodservice, and Specialty business areas all reported increases during the second quarter. The majority of the sales increase for both the second quarter and the six- month period was in the Consumer and Industrial areas. In the Consumer area, the majority of the increase was the result of growth in sales of fruit spreads in the grocery and mass retail markets. Sales of dessert toppings and Goober products also were up over the previous year. The addition of Kraft brand fruit spreads, acquired during the fourth quarter of fiscal 1997, also contributed to the sales growth during the quarter. The Industrial area's growth came in the bakery and yogurt filling categories, as a result of a combination of both new and existing products.

Although sales in the International area were not up over the prior year, primarily due to the impact of the strong American dollar versus Australian and Canadian currencies, earnings for the year are up. Additionally, the Company's retail businesses in Australia and Canada remain strong, with share of market gains in fruit spreads being achieved in both countries.

With regards to earnings, the Company stated that the increase was primarily due to volume growth, operational savings from Project Appleseed initiatives, and a decrease in interest expense. These savings were offset in part by an increase in selling, distribution, and administrative costs. The Company stated that the increase was related to higher marketing expenditures and expenses associated with the Company's information technology project.

In connection with the information technology project, the Company stated that the $8 million in annual savings that it had previously indicated would be realized from the project upon full implementation had now been revised upward to $10 million. According to the Company, just under half of this amount will be realized upon installation of the core components of the new software system over the next three years. The remainder of the savings will become available thereafter as additional components of the new system are developed and installed. Although the Company said that installation of the new system was expected to provide additional "soft" benefits beyond the $10 million, it said that it was premature to try to quantify those at this time. It noted though that it expected the new system to provide substantial assistance in meeting the so-called "year 2000" computer systems problems and that it anticipated no significant difficulties in preparing its systems for the turn of the century.

The J.M. Smucker Company is the nation's leading producer of branded preserves, jams, jellies, and other fruit spread products, health and natural foods beverages, ice cream toppings, and natural peanut butter.

                             The J.M. Smucker Company

                              Three Months Ended         Six Months Ended
                                  October 31,              October 31,
                               1997        1996         1997        1996

                             (Dollars in thousands, except per share data)

    Net sales                $145,187     $138,296    $292,576    $267,925
    Cost of products sold      95,974       94,157     191,967     180,040
    Gross profit               49,213       44,139     100,609      87,885
    Selling, distribution,
      and administrative
      expenses                 35,346       30,563      70,736      61,080
    Operating Income           13,867       13,576      29,873      26,805

    Interest income               482          550       1,180         987
    Interest expense              (85)        (669)        (90)     (1,419)
    Other income
      (expense) - net             174         (126)        300        (211)
    Income before
      income taxes             14,438       13,331      31,263      26,162
    Income taxes                5,836        5,513      12,688      10,855
    Net income                 $8,602       $7,818     $18,575     $15,307

    Net income per
      Common Share (A)           $.30         $.26        $.64        $.52

    Dividends declared per share:
    Class A                      $.13         $.13        $.26        $.26
    Class B                      $.13         $.13        $.26        $.26

    (A) Computed on the
      weighted average number
      of Class A Common Shares
      and Class B Common
      Shares outstanding,
      namely:              29,143,200   29,157,488  29,155,546  29,161,628

                            The J. M. Smucker Company

                                                   October 31,
                                               1997           1996
                                              (Dollars in thousands)
    Current Assets:
      Cash and cash equivalents               $11,822       $11,794
      Trade receivables                        53,293        48,023
      Inventories                             117,967       120,899
      Assets of discontinued operations, net       --         8,121
      Other current assets                     10,140        13,099
        Total Current Assets                  193,222       201,936

    Property, Plant & Equipment, Net          146,876       138,133
    Noncurrent Assets                          65,568        66,621

      Total                                  $405,666      $406,690

    Current Liabilities:
      Accounts payable                        $37,338       $30,925
      Other current liabilities                49,687        34,169
        Total Current Liabilities              87,025        65,094

    Long-term Debt                                 --        36,200
    Other Noncurrent Liabilities               21,477        20,637
    Shareholders' Equity, Net                 297,164       284,759
      Total                                  $405,666      $406,690
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