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
CONDENSED STATEMENTS OF CONSOLIDATED INCOME
(Unaudited)
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
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
October 31,
1997 1996
(Dollars in thousands)
ASSETS
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
LIABILITIES & SHAREHOLDERS' EQUITY
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
