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J. M. Smucker Exceeds Analyst Estimates in First Quarter

ORRVILLE, Ohio, Aug. 17 /PRNewswire/ -- The J. M. Smucker Company, Orrville, Ohio (NYSE: SJM.A and SJM.B), announced today that sales for the first quarter ending July 31, 2000, were $163,667,000, up 1% from $161,495,000 in the prior year first quarter. Earnings for the three-month period were $9,865,000 or $.35 per share, compared to a consensus analyst estimate of $.31 per share. Prior year first quarter earnings were $11,037,000, or $.38 per share.

With respect to earnings, the Company stated that the shortfall compared to last year's record first quarter earnings had been expected as a result of the continuing impact of higher fruit costs from last year and an increase in marketing expenses related to the introduction of new products. Interest expense also was higher than during last year's first quarter as a result of the Company's long-term debt placement completed during the first quarter of last year.

In the domestic segment, sales were even with last year as increases in the consumer, foodservice, and specialty areas were offset by declines in the beverage area and in domestic industrial sales. In the consumer area, grocery market fruit spread sales led the increase, as the Company's share of the fruit spreads remained strong and growing. The foodservice growth came from increased distribution and sales of Smucker's Uncrustables, the Company's thaw and serve peanut butter and jelly sandwich, and production of Uncrustables began to ramp up in the quarter in order to fill orders for the beginning of the school year. In the specialty area, sales of Dickinson's branded products increased, as did sales of specialty products packed for branded customers.

Sales in the international segment increased by 11%. The increase was due in part to the addition of new industrial businesses in Scotland and Brazil, both added since last year's first quarter. In addition, solid growth in the Company's Canadian business helped contribute to the overall sales increase in the international segment. This growth occurred despite the impact of unfavorable exchange rates, primarily in Australia.

"We remain optimistic about the remainder of the year," said Tim Smucker, the Company's chairman. "Our core businesses performed well in the first quarter, and we expect our recent investments in new products and businesses like Uncrustables and Smucker's Snacker's, our peanut butter, jelly, and cracker snack kit, to begin to show an impact this year. The Company has greatly expanded the number of school districts to which it will distribute Uncrustables during the upcoming school year and it has also introduced Uncrustables into retail channels in selected test markets. We will continue to invest in new product opportunities this year, but we also expect margins and earnings to improve overall during the remainder of the year as the result of a return to more normal fruit costs."

This release contains certain forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially, including uncertainties relating to the Company's operating performance, the cost of fruit and other ingredients and raw materials, the success of marketing programs, and the success of the Company's cost reduction efforts. 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 ( ) 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 70 countries.

                          THE J. M. SMUCKER COMPANY

                                                     Three Months Ended
                                                           July 31,
                                                      2000        1999
        (Dollars in thousands, except per share data)

    Net sales                                       $163,667    $161,495
    Cost of products sold                            105,592     103,467
    Gross profit                                      58,075      58,028
    Selling, distribution, and administrative
      expenses                                        42,009      40,795
    Operating income                                  16,066      17,233

    Interest income                                      750         723
    Interest expense                                    (898)       (480)
    Other income - net                                   254         367
    Income before income taxes                        16,172      17,843
    Income taxes                                       6,307       6,806
    Net income                                        $9,865     $11,037

    Net income per Common Share                        $0.35       $0.38
    Net income per Common Share - Assuming Dilution    $0.35       $0.38

    Dividends declared per share:
    Class A                                            $0.16       $0.15
    Class B                                            $0.16       $0.15

    Common Shares outstanding                     28,187,349  29,047,531
    Common Shares outstanding - assuming
      dilution                                    28,240,405  29,178,059

                          THE J. M. SMUCKER COMPANY

                                                              July 31,
                                                        2000           1999
    (Dollars in thousands)

    Current Assets:
      Cash and cash equivalents                        $25,368        $39,101
      Trade receivables                                 63,194         58,178
      Inventories                                      134,922        141,636
      Other current assets                              17,115         14,375
        Total Current Assets                           240,599        253,290

    Property, Plant & Equipment, Net                   178,154        170,544

    Noncurrent Assets                                   71,797         79,907
          Total                                       $490,550       $503,741

    Current Liabilities:
      Accounts payable                                 $36,836        $44,281
      Other current liabilities                         40,883         37,737
        Total Current Liabilities                       77,719         82,018

    Long-term Debt                                      75,000         75,000
    Other Noncurrent Liabilities                        19,321         21,776
    Shareholders' Equity, Net                          318,510        324,947
          Total                                       $490,550       $503,741

SOURCE 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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