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J.M. Smucker Announces Year-End Operating Results

ORRVILLE, Ohio, June 15 /PRNewswire/ -- The J.M. Smucker Company (NYSE: SJM.A and SJM.B) today announced its financial results for the year ended April 30, 2000. Sales for the year were $632,486,000, up 5% over fiscal 1999 sales of $602,457,000 due to strength in its international, foodservice, and specialty areas. Earnings for the year were $35,983,000 or $1.26 per share, before nonrecurring charges. This compared to $37,763,000 or $1.30 per share last year. On a diluted basis, earnings per share before nonrecurring charges were $1.26 compared to $1.29 last year. The operating results for the year were consistent with preliminary expectations released last month.

The Company also announced that sales in the fourth quarter were $156,598,000, even with the same period last year. Earnings per share for the three-month period, before the impact of nonrecurring charges, were $.26 per share compared to $.34 last year on a diluted basis.

The Company reported that sales increase in the foodservice channel came from volume growth of the portion control segment, addition of the Lea & Perrins products, and sales of the new Smucker's Uncrustables peanut butter and jelly sandwich.

In the consumer market, sales were softer than expected, up 1% over last year. Despite the modest increase, the Company's share of the domestic fruit spreads market hit record levels, passing the 40% share level.

In the international area, the increase in sales came from a combination of growth in existing businesses and the addition of facilities in new geographical areas. The Company's Canadian business contributed significantly to both sales and profits as sales increased approximately 10% over the prior year. Sales gains in Mexico, Australia, and in European exports were also reported. The Company's recent addition of production facilities in Brazil and Scotland also contributed to the sales growth outside of the U.S.

Earnings were impacted by higher fruit costs throughout the year, along with higher selling and distribution costs, and investment spending in new products and businesses. Interest expense was also up as the Company took on $75 million of long-term debt to fund general corporate activities including stock repurchases, acquisitions, and the refinancing of existing debt.

During the year, the Company recorded nonrecurring charges of $14,492,000 or $.34 per share, resulting from a previously announced write down of certain assets. The charge in the fourth quarter was $9,687,000 or $.23 per share and resulted from the write-down of carrying value of certain intangible assets, primarily goodwill resulting from previous acquisitions.

In August, Smucker will ask its Class A and Class B common shareholders to approve a one-for-one exchange of all their shares for new common shares that are similar to today's Class A voting common.

If the plan is approved by the shareholders, Smucker will couple the share consolidation with an offer to buy back up to $100 million of Class A and Class B shares at $18.50 per share, a premium to the market price of the two classes as of the close of trading on May 15, 2000.

The J.M. Smucker Company ( ) was founded in 1897 when the Company's namesake and founder sold his first product -- apple butter -- from the back of a horse drawn wagon. Today, over a century later, the Company is the market leader in fruit spreads, ice cream toppings, health and natural foods beverages, and natural peanut butter in North America. The Company has over 2,000 employees worldwide and distributes products in more than 60 countries.

This release contains forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially, including factors affecting fruit and other commodity prices, the Company's operating performance, other factors affecting share prices, the number of shares repurchased in the buyback, and factors affecting capital markets generally. These risks and uncertainties are detailed from time to time in reports filed by the Company with the Securities and Exchange Commission including forms 10-Q and 10-K.

                           The J.M. Smucker Company

                                        Year Ended April 30,
                                             2000           1999
                                            (Dollars in thousands,
                                             except per share data)

    Net sales                             $632,486          $602,457
    Cost of products sold                  414,476           395,944
    Gross Profit                           218,010           206,513
    Selling, distribution,
     and administrative expenses           162,283           147,538
    Nonrecurring charge                     14,492               ---
    Operating Income                        41,235            58,975
    Interest income                          2,706             1,948
    Interest expense                        (3,111)             (179)
    Other income -- net                        701               887
    Income Before Income Taxes              41,531            61,631
    Income taxes                            15,174            23,868
    Net Income                             $26,357           $37,763

    Net income per Common Share               $.92             $1.30

    Net income per Common Share --
     Assuming Dilution                        $.92             $1.29

    Dividends declared per share:
      Class A                                 $.61              $.57
      Class B                                 $.61              $.57

    Weighted-Average Shares
     Outstanding                        28,670,770        29,057,593
    Weighted-Average Shares Outstanding --
      Assuming Dilution                 28,750,355        29,274,719

                           The J.M. Smucker Company

                                                 April 30,
                                         2000                1999
                                     (Dollars in thousands)
    Current Assets:
       Cash and cash equivalents        $33,103              $8,683
       Trade receivables                 62,518              51,858
       Inventories                      121,515             114,200
       Other current assets              11,996              11,401
             Total Current Assets       229,132             186,142

    Property, Plant & Equipment, Net    174,648             166,543

    Other Noncurrent Assets              71,604              81,198
                                       $475,384             433,883

    Current Liabilities:
       Accounts payable                 $32,520             $40,262
       Notes payable                        ---               8,966
       Other current liabilities         35,669              38,403
             Total Current Liabilities   68,189              87,631

    Long Term Debt                       75,000                 ---
    Other Noncurrent Liabilities         18,722              21,923
    Shareholders' Equity, Net           313,473             324,329
                                       $475,384            $433,883

                           The J.M. Smucker Company

The following is a summary of unaudited quarterly results of operations for the years ended April 30, 2000 and 1999.

    (Dollars in thousands, except per share data)
                                                                    Net Income
                                                   Net Income           Common
                                                          per           Share-
          Quarter              Gross      Net          Common         Assuming
          Ended     Net Sales Profit   Income           Share         Dilution

    2000  July 31   $161,495  $58,028 $11,037           $0.38         $0.38
       October 31    163,965   54,873   9,389            0.33          0.32
       January 31    150,428   54,491   4,963(1)         0.17(1)       0.17(1)
         April 30    156,598   50,618     968(1)         0.03(1)       0.03(1)

    1999  July 31   $150,500  $53,862 $10,416           $0.36         $0.36
       October 31    154,894   51,690   9,063            0.31          0.31
       January 31    140,772   49,055   8,245            0.28          0.28
         April 30    156,291   51,906  10,039            0.35          0.34

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.

(1) Includes nonrecurring charges during fiscal 2000 third and fourth quarters of $3,192 ($.11 per share) and $6,434 ($.23 per share), respectively, relating to the impairment of certain long-lived assets. SOURCE The J.M. Smucker Company


CONTACT: Steven J. Ellcessor, Vice President-Finance and Administration and General Counsel of The J.M. Smucker Company, 330-682-3000/

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