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J. M. Smucker Announces Year-End Results

ORRVILLE, Ohio, June 12 /PRNewswire/ -- The J. M. Smucker Company, Orrville, Ohio (NYSE: SJMA and SJMB), today announced its final financial results for the year ended April 30, 1998, confirming its preliminary results issued earlier in the month. Sales for the year were $565,476,000, up nearly 8% over fiscal 1997 sales of $524,107,000. Earnings for the year, excluding the effect of an accounting change, were $36,348,000 or $1.25 per share, up 17% from $30,935,000 or $1.06 per share last year. During the year, the Company complied with an accounting ruling which required it to write-off previously capitalized costs associated with its information technology reengineering project. The impact of this accounting change reduced net income to $33,390,000 or $1.15 per share.

The Company also reported that sales in the fourth quarter were $142,242,000, up nearly 5% over the same period last year, while earnings for the period were $9,740,000, an increase of 7%. Earnings per share in the fourth quarter were $.34 compared to $.31 last year.

As previously reported, all business areas, except beverage, realized sales increases over fiscal 1997, with the largest percentage increase in the industrial area. The Company reported that sales of domestic fruit spreads were up, primarily in its grocery and mass retail markets. The addition of Kraft brand fruit spreads, acquired during the fourth quarter of fiscal 1997, also contributed to the sales growth. In the international area, sales were up over the prior year, despite the impact of unfavorable foreign exchange rates in both Australia and Canada.

The Company stated that the growth in sales played a key factor in the overall increase in income for the year. Other major factors that contributed to the increased earnings were lower costs of certain raw materials, improved profitability in the Company's beverages and international businesses and a decrease in interest expense. These were somewhat offset by increases in marketing, selling, and administrative costs.

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

                                               Year Ended April 30,
                                            1998                 1997
                                 (Dollars in thousands, expect per share data)

    Net sales                             $565,476             $524,107
    Cost of products sold                  365,613              348,949
    Gross Profit                           199,863              175,158
    Selling, distribution, and
      administrative expenses              142,799              121,954
    Operating Income                        57,064               53,204
    Interest income                          2,525                2,048
    Interest expense                          (145)              (1,748)
    Other income (expense) - net             1,315                 (338)
    Income Before Income Taxes and
      Cumulative Effect of Change
      in Accounting Method                  60,759               53,166
    Income taxes                            24,411               22,231
    Income Before Cumulative Effect of
      Change in Accounting Method           36,348               30,935
    Cumulative effect of change in
      accounting method, net of tax
      benefit of $1,980                     (2,958)                  --
    Net Income                             $33,390              $30,935

    Net income per Common Share:
      Income before cumulative effect
        of change in accounting method       $1.25                $1.06
      Cumulative effect of change in
        accounting method                     (.10)                  --
      Net income                             $1.15                $1.06

    Net income per Common Share - Assuming
      Dilution:
      Income before cumulative effect of
        change in accounting method          $1.24                $1.06
      Cumulative effect of change
        in accounting method                  (.10)                  --
      Net income                             $1.14                $1.06

    Dividends declared per share:
      Class A                                 $.53                 $.52
      Class B                                 $.53                 $.52

    Weighted-Average Shares
      Outstanding                       29,038,723           29,104,969
    Weighted-Average Shares
      Outstanding - Assuming Dilution   29,345,278           29,180,080


                          The J. M. Smucker Company
                    CONDENSED CONSOLIDATED BALANCE SHEETS

                                                    April 30,
                                            1998                 1997
                                              (Dollars in thousands)
    ASSETS
    Current Assets:
       Cash and cash equivalents           $36,484              $24,091
       Trade receivables                    48,732               48,140
       Inventories                         103,465               94,106
       Other current assets                 12,825               12,135
             Total Current Assets          201,506              178,472

    Property, Plant & Equipment, Net       143,714              139,635

    Other Noncurrent Assets                 62,753               66,666
        Total                             $407,973             $384,773

    LIABILITIES & SHAREHOLDERS' EQUITY
    Current Liabilities:
       Accounts payable                    $41,410              $36,582
       Other current liabilities            43,490               35,434
             Total Current Liabilities      84,900               72,016

    Noncurrent Liabilities                  20,896               20,866
    Shareholders' Equity, Net              302,177              291,891
        Total                             $407,973             $384,773


                          The J. M. Smucker Company
                  SUMMARY OF QUARTERLY RESULTS OF OPERATIONS
                                 (Unaudited)

The following is a summary of unaudited quarterly results of operations for the years ended April 30, 1998 and 1997. The Company adopted Statement of Financial Accounting Standards No. 128, Earnings per Share (SFAS 128), during the quarter ended January 31, 1998. All per share amounts shown for periods prior to adoption have been restated to conform to the provisions of SFAS 128. (Dollars in thousands, except per share data) Income Before Cumulative Effect of Quarter Net Gross Accounting Net Ended Sales Profit Change Income 1998 July 31 $147,389 $51,396 $9,973 $9,973 October 31 145,187 49,213 8,602 8,602 January 31 130,658 47,232 8,033 5,075 April 30 142,242 52,022 9,740 9,740 1997 July 31 $129,629 $43,746 $7,489 $7,489 October 31 138,296 44,139 7,818 7,818 January 31 120,251 39,868 6,533 6,533 April 30 135,931 47,405 9,095 9,095 Net Income per Net Income per Common Share Common Share -- Assuming Dilution Income Income Before Before Cumulative Cumulative Effect of Effect of Accounting Net Accounting Net Change Income Change Income 1998 July 31 $0.34 $0.34 $0.34 $0.34 October 31 0.30 0.30 0.29 0.29 January 31 0.27 0.17 0.27 0.17 April 30 0.34 0.34 0.33 0.33 1997 July 31 $0.26 $0.26 $0.26 $0.26 October 31 0.27 0.27 0.27 0.27 January 31 0.22 0.22 0.22 0.22 April 30 0.31 0.31 0.31 0.31

Annual earnings per share may not equal the sum of the individual quarters due to differences in the average number of shares outstanding during the respective periods.

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