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J. M. Smucker Announces Second Quarter Results

ORRVILLE, Ohio, Nov. 19 /PRNewswire/ -- The J. M. Smucker Company, (NYSE: SJM.A and SJM.B), announced today that earnings for the second quarter ending October 31, 1998, were $9,063,000, up 5% over earnings of $8,602,000 for the same period last year. Sales for the three-month period were up approximately 7%, to $154,894,000 from $145,187,000 in the prior year second quarter. On a diluted basis, earnings per share were $.31 compared to $.29 per share last year.

The Company also announced that sales for the first six months of the fiscal year were $305,394,000 compared to $292,576,000 last year, an increase of over 4%, while earnings for the same period were up 5%. Diluted earnings per share for the first six months were $.67 compared to $.63 for the same period last year.

The Company reported sales increases in all of its business areas, with the majority of the increase occurring in the consumer, industrial, beverage, and international areas. The Company attributed the majority of the increase in the consumer area to increased sales of fruit spreads and to the launch of Smucker's Snackers, the Company's convenient new shelf-stable peanut butter and jelly offering for lunches and snacks. According to the Company, natural peanut butter sales also were up nicely over the prior year. In the industrial area, the growth came primarily from the sales of ingredients for new products of bakery and dairy customers. In beverages, growth in R. W. Knudsen Family brand products and the addition of sales from the recently acquired Mrs. Wiggles Rocket Juice beverage line accounted for the majority of that area's increase.

In international, the Company realized sales growth, due in part to the effect of acquisitions made in the last year, despite the fact that reported sales continued to be adversely impacted by the strength of the American dollar versus the Australian and Canadian currencies.

The Company reported that its increase in earnings resulted primarily from the growth in sales, offset by increases in distribution and certain operations support costs. Margins also were impacted by investment spending to support marketing initiatives (including the introduction of Smucker's Snackers) and the Company's information technology project. Marketing expenses, although up for the six-month period over the same period last year, increased at a lesser rate than sales during the second quarter.

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,
                                  1998        1997        1998        1997
                               (Dollars in thousands, except per share data)

    Net sales                   $154,894    $145,187     $305,394    $292,576
    Cost of products sold        103,204      95,974      199,842     191,967
    Gross profit                  51,690      49,213      105,552     100,609
    Selling, distribution, and
      administrative expenses     37,378      35,346       74,720      70,736
    Operating income              14,312      13,867       30,832      29,873

    Interest income                  438         482        1,063       1,180
    Interest expense                (256)        (85)        (260)        (90)
    Other income (expense) - net     191         174          486         300
    Income before income taxes    14,685      14,438       32,121      31,263
    Income taxes                   5,622       5,836       12,642      12,688
    Net income                    $9,063      $8,602      $19,479     $18,575

    Net income per Common Share     $.31        $.30         $.67        $.64
    Net income per Common Share
      - Assuming Dilution           $.31        $.29         $.67        $.63

    Dividends declared per share:
      Class A                       $.14        $.13         $.28        $.26
      Class B                       $.14        $.13         $.28        $.26

    Common Shares
      outstanding             29,043,137  29,009,200   29,034,992  29,041,879
    Common Shares
      - assuming dilution     29,231,947  29,379,019   29,282,193  29,266,863

                          The J. M. Smucker Company

                                                    October 31,
                                                1998         1997
                                              (Dollars in thousands)
    Current Assets:
      Cash and cash equivalents              $  5,129      $ 11,822
      Trade receivables                        53,606        53,293
      Inventories                             138,482       117,967
      Other current assets                     13,388        10,140
         Total Current Assets                 210,605       193,222

    Property, Plant & Equipment, Net          160,858       146,876

    Noncurrent Assets                          62,920        65,568
      Total                                  $434,383      $405,666

    Current Liabilities:
      Accounts payable                       $ 38,006      $ 37,338
      Other current liabilities                64,485        49,687
         Total Current Liabilities            102,491        87,025

    Other Noncurrent Liabilities               21,052        21,477
    Shareholders' Equity, Net                 310,840       297,164
      Total                                  $434,383      $405,666
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