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J. M. Smucker Announces Third Quarter Results

ORRVILLE, Ohio, Feb. 16 /PRNewswire/ -- The J. M. Smucker Company, Orrville, Ohio (NYSE: SJM), announced today its third quarter results. Sales for the third quarter ended January 31, 2001 were $151,020,000, compared to $150,428,000 in the prior year third quarter. Earnings per share for the three-month period were $.29 compared to $.28 last year, excluding the impact of non-recurring charges of $.11 per share in last year's third quarter. On a diluted basis, earnings per share were even with last year at $.28, excluding the prior year's nonrecurring charges.

The Company also announced that sales for the first nine months of the fiscal year were $481,549,000, up 1% over sales of $475,888,000 in the same period last year. Earnings per share for the nine-month period, before the impact of nonrecurring charges, were $.94, compared to $.99 for the same period last year. Earnings per share including the impact in both periods of nonrecurring charges were $.89 compared to $.88 last year. Diluted earnings were even with last year at $.88 per share.

Commenting on the results, Tim Smucker, the Company's chairman, said "Our businesses faced several challenges in the third quarter. Sales in December were softer than anticipated across nearly all business areas, related in part we believe to the slowing of the economy. Higher energy and distribution costs along with unfavorable foreign exchange rates also impacted the quarter's results, offsetting in part the benefits of lower commodity costs. In light of those challenges, we are pleased with the results for the quarter."

"In January," Mr. Smucker continued, "our businesses rebounded with sales and earnings for that month up 6% and 5%, respectively, over the prior year. Also, our core fruit spreads business remains strong, and we continue to be very encouraged by the growth of our new Smucker's Uncrustables line of thaw- and-serve peanut butter and jelly sandwiches. We have taken steps to improve efficiencies and to offset some of the higher costs we are facing, as evidenced by the significant improvement this year in our working capital numbers. We also expect commodity costs to remain relatively low through the remainder of the year. In sum, we are optimistic about the fourth quarter and look forward to finishing the year strongly."

The Company reported that sales in its domestic segment increased approximately 2% during the quarter, as its consumer, foodservice, industrial, and specialty businesses all were up over the prior year. The increase in the consumer business came as a result of very strong performance in the warehouse club and mass retail distribution channels and increased fruit spreads volume overall. In the foodservice area, the growth was driven in large part by new placements for the Smucker's Uncrustables product. Sales of both new and existing bakery ingredient products increased in the industrial area.

Although the Company's Canadian business continues to perform well, total sales in the international segment were down 7%, due primarily to the impact of exchange rates and increased competitive activity in the Company's Australian market. The impact of a strong U. S. dollar, primarily in comparison to the Australian and Canadian dollars, resulted in a decrease in third quarter sales of approximately $1,700,000 compared to last year's third quarter. Had fiscal 2001 exchange rates remained constant with the prior year, international sales would have been approximately $4,000,000 higher for the first nine months.

With respect to earnings, the Company stated that although its fruit costs are lower than last year at this time, its energy costs were up 40% in the quarter and distribution costs were up 12%. It also noted that while earnings per share for the quarter are up, total earnings continue to track behind the prior year. This is due, in addition to the increased energy and distribution costs, to the increase in interest costs associated with the long term debt incurred by the Company in connection with its share repurchase earlier this year and to the investments being made to support new products.

This release contains certain forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially. These risks and uncertainties include, but are not limited to, the success and cost of introducing new products, the ability of business areas to achieve sales targets and the costs associated with attempting to do so, the ability of the Company to manage effectively capacity constraints relating to new products, raw material and ingredient cost trends, and such other risks and uncertainties as 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. Please visit our newly relaunched website at to learn more about our Company and its products.

                          THE J. M. SMUCKER COMPANY
                           Three Months Ended           Nine Months Ended
                                January 31,                 January 31,
                            2001          2000         2001          2000
                            (Dollars in thousands, except per share data)
    Net sales             $151,020      $150,428     $481,549      $475,888
    Cost of products sold   96,510        95,937      312,476       308,496
    Gross profit            54,510        54,491      169,073       167,392
    Selling, distribution,
      and administrative
      expenses              41,758        41,437      126,543       122,036
    Nonrecurring charge        ---         4,805        2,152         4,805
    Operating income        12,752         8,249       40,378        40,551
    Interest income            568           578        2,030         2,056
    Interest expense        (2,192)       (1,284)      (5,058)       (2,617)
    Other income (expense)
      - net                   (290)          173         (231)          790
    Income before income
      taxes                 10,838         7,716       37,119        40,780
    Income taxes             3,945         2,753       14,183        15,391
    Net income             $ 6,893       $ 4,963      $22,936       $25,389
    Net income per Common
      Share                  $0.29         $0.17        $0.89         $0.88
    Net income per Common
      Share - assuming
      dilution               $0.28         $0.17        $0.88         $0.88

    Dividends declared
      per share              $0.16         $0.15        $0.48         $0.45
    Common Shares
      outstanding       24,089,174    28,544,401   25,830,130    28,810,677

Common Shares


  • assuming

dilution 24,414,128 28,602,865 26,019,370 28,906,847

                          The J. M. Smucker Company
                                                      January 31,
                                                   2001        2000
                                                (Dollars in thousands)
    Current Assets:
      Cash and cash equivalents                  $30,788      $20,046
      Trade receivables                           52,459       55,566
      Inventories                                122,064      140,247
      Other current assets                        14,301       12,548
        Total Current Assets                     219,612      228,407
    Property, Plant & Equipment, Net             172,385      173,339
    Noncurrent Assets                             71,901       80,382
      Total                                     $463,898     $482,128
    Current Liabilities:
      Accounts payable                           $27,626      $27,813
      Other current liabilities                   37,016       34,985
        Total Current Liabilities                 64,642       62,798
    Long Term Debt                               135,000       75,000
    Other Noncurrent Liabilities                  18,991       21,898
    Shareholders' Equity, Net                    245,265      322,432
        Total                                   $463,898     $482,128

SOURCE J. M. Smucker Company


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

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