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The J. M. Smucker Company Announces First Quarter Results
 Income from Continuing Operations Up Nine Percent

                             Sales Up 23 Percent

                Company Confirms its Fiscal Year 2006 Outlook

ORRVILLE, Ohio, Aug. 22 /PRNewswire-FirstCall/ -- The J. M. Smucker Company (NYSE: SJM) today announced results for the first quarter ended July 31, 2005, of its 2006 fiscal year.

First Quarter Results

Company sales were a record $510.3 million for the first quarter of fiscal 2006, up 23 percent, compared to $413.3 million in the first quarter of 2005. The acquired Multifoods businesses contributed $154.3 million to sales in the first quarter of 2006, compared to $75.5 million last year. Since the acquisition of Multifoods closed midway through the first quarter of last year, an additional six weeks of Multifoods' sales, totaling approximately $78.8 million, were realized in this year's first quarter. Excluding the additional six weeks, sales were up four percent, in line with the Company's previously stated growth goals.

Income from continuing operations was $29.9 million, an increase of nine percent over $27.5 million in last year's first quarter. Sales growth was mostly offset by increased marketing costs in support of the brands, costs associated with establishing the Company's new distribution network, an increase in net interest expense, and compensation expense related to the Company's new restricted stock program. Earnings per diluted share from continuing operations for the first quarter of 2006 were $0.51, compared to $0.50 last year, impacted by the additional shares issued as part of the Multifoods transaction.

Income from continuing operations for the first quarter of 2006 included pretax merger and integration costs of $2.9 million, or $0.03 per diluted share, and restructuring charges of $1.6 million, or $0.02 per diluted share. Income from continuing operations for the first quarter of 2005 included pretax merger and integration costs of $2.8 million, or $0.03 per diluted share, and restructuring charges of $3.0 million, or $0.04 per diluted share. Excluding these costs in both years, the Company's income from continuing operations was up six percent. Due to the additional shares issued as part of the Multifoods transaction, earnings per diluted share were $0.56 and $0.57, in the first quarters of 2006 and 2005, respectively.

"Our Smucker's(R), Jif(R), Crisco(R), and Pillsbury(R) brands continue to experience considerable momentum," said Tim Smucker, chairman and co-chief executive officer. "During the quarter, we made significant investments in new products and in support of the brands, along with our supply chain initiatives. Income from continuing operations grew nine percent for the quarter, as the performance of the brands offset these investments. We are well-positioned for continuing top and bottom line growth."

"We are excited about the many new products we are introducing in the upcoming quarter and expect them to enhance our growth prospects," commented Richard Smucker, president and co-chief executive officer. "With the solid sales growth, new products and significant marketing support, our brands are well-positioned for strong performance. We remain committed to our outlook for the year of growing our earnings per share by our long-term annualized growth rate of eight percent."

Net income for the first quarter of 2006 was $29.9 million, or $0.51 per diluted share. Last year's first quarter net income was comprised of income from continuing operations of $27.5 million, or $0.50 per diluted share, and earnings from discontinued operations, primarily representing the one-time, nonrecurring gain on the Company's sale of its Henry Jones Foods business, of $5.4 million, or $0.10 per diluted share, for a total of $32.8 million, or $0.60 per diluted share. The operations of the Australian-based Henry Jones Foods business, the Brazilian operations, Smucker do Brasil Ltda., and the Multifoods' U.S. foodservice and bakery products business, all sold during last year, are included in discontinued operations in 2005.

The Company uses earnings from continuing operations, excluding restructuring and merger and integration costs, as a key performance measure of results of operations for purposes of evaluating performance internally. These non-GAAP measurements are not intended to replace the presentation of financial results in accordance with U.S. GAAP. Rather, management believes the presentation of results excluding such charges offers additional information to investors to facilitate the comparison of past and present operations and provides a more comprehensive understanding of the financial results. A reconciliation of non-GAAP measures to earnings from continuing operations for the current quarter is included in the "Financial Highlights" table.

Margins

Gross margin was 32.3 percent in the first quarter, compared to 34.9 percent last year, primarily due to higher commodity costs and the impact of the incremental Multifoods businesses, which currently earn a lower margin than the Company's base business. In addition, as part of the sale of its industrial business last fiscal year, the Company agreed to continue to supply the purchaser with certain industrial products through August 2005. Sales of these products are recognized on a cost-plus basis, and will continue to have a negative impact on gross margins through August.

SD&A expenses as a percentage of sales declined from 22.0 percent in the first quarter of 2005 to 21.7 percent in the current quarter, despite a planned increase in marketing expenses, which were up 15 percent over last year. Also included in the quarter's SD&A expenses were non-cash charges of approximately $2.4 million representing amortization expense associated with the Company's new restricted stock program, and $1.2 million in accelerated depreciation of certain discontinued software. Finally, distribution costs were also up during the quarter, as the Company implemented its new distribution network.

Interest expense increased from $4.4 million in the first quarter of 2005 to $6.1 million in the first quarter of 2006, as a result of additional debt associated with the acquisition of Multifoods, which was outstanding for the full quarter. Interest income also increased due to higher average investment balances and an increase in interest rates.

The Company's first quarter earnings benefited from a decrease in the effective tax rate from 36.6 percent in 2005 to 34.4 percent this quarter. The Company expects a tax rate for the full year of approximately 35.5 percent.

    Segment Performance

U.S. Retail Market

Sales in the U.S. retail market segment for the first quarter of 2006 were $341.7 million, compared to $288.1 million in the first quarter of 2005, an increase of 19 percent. Sales for the brands acquired in the Multifoods acquisition in the first six weeks of the quarter accounted for approximately three-fourths of the segment's increase over the prior year. Excluding these additional sales, the segment was up five percent for the quarter.

During the first quarter of 2006, sales in the consumer area increased 11 percent over the first quarter of last year, driven by the addition of Hungry Jack(R), growth in the Smucker's and Jif brands, and continued growth of Uncrustables(R) in the retail channel. In the consumer oils and baking area, sales increased 35 percent in the first quarter of 2006 compared to 2005, due to the additional six weeks of sales of the Pillsbury, Martha White(R), and Pet(R) brands, as well as a three percent increase in Crisco sales.

Special Markets

Sales in the special markets segment were $168.6 million in the first quarter of 2006, compared to $125.2 million for the first quarter of 2005. Canadian and export sales for the brands acquired in the Multifoods acquisition in the first six weeks of the quarter accounted for over 90 percent of the segment's increase over the prior year. Other key growth contributors included the beverage business, up 15 percent, and the foodservice business, up eight percent. Excluding the additional six weeks contribution from Multifoods and the U.S. industrial business, which the Company divested last year, sales in the special markets segment increased six percent in the first quarter of 2006 as compared to the first quarter of last year.

Outlook for Fiscal 2006

The Company confirmed its outlook for 2006. The Company expects revenues in 2006 of approximately $2.16 billion, an increase of six percent and remains committed to increasing its earnings per share by its long-term annualized growth goal of eight percent, which equates to an earnings growth of approximately ten percent. The additional outstanding shares for 2006 account for the difference in the growth rates. This long-term growth goal applies to continuing operations and excludes the impact of restructuring, merger and integration costs, and gains and losses on sales of assets.

Conference Call

The Company will conduct an earnings conference call and webcast on Monday, August 22, 2005, at 8:30 a.m. E.T. The webcast can be accessed from the Company's website at www.smuckers.com. For those unable to listen to the webcast, an audio replay will be available following the call and can be accessed by calling (888) 203-1112 or (719) 457-0820 and entering replay pass code 4124704. The audio replay will be available until Monday, August 29, 2005.

About The J. M. Smucker Company

The J. M. Smucker Company (www.smuckers.com) 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, peanut butter, shortening and oils, ice cream toppings, and health and natural foods beverages in North America under such icon brands as Smucker's(R), Jif(R) and Crisco(R). The family of brands also includes Pillsbury(R) baking mixes and ready-to-spread frostings; Hungry Jack(R) pancake mixes, syrups and potato side dishes; and Martha White(R) baking mixes and ingredients in the U.S., along with Robin Hood(R) flour and baking mixes and Bick's(R) pickles and condiments in Canada. For over 108 years, The J. M. Smucker Company has been headquartered in Orrville, Ohio, and has been family run for four generations. Since the 1998 inception of FORTUNE Magazine's annual survey of the 100 Best Companies to Work For, The J. M. Smucker Company has consistently been recognized as one of the top 25 companies to work for in the United States. The J. M. Smucker Company has over 3,500 employees worldwide and distributes products in more than 45 countries.

The J. M. Smucker Company Forward-Looking Language

This press release contains forward-looking statements, including statements regarding estimates of future earnings and cash flows that are subject to risks and uncertainties that could cause actual results to differ materially. Uncertainties that could affect actual results include, but are not limited to, the ability to achieve the amount and timing of the estimated savings associated with the Multifoods acquisition, the timing and amount of capital expenditures and merger and integration costs, success and costs of new marketing and sales programs and strategies intended to promote growth in the Company's businesses, the ability to successfully implement price changes, particularly in the consumer oils and baking business, the Company's ability to effectively ramp up and manage capacity related to Uncrustables, the strength of commodity markets from which raw materials are procured and the related impact on costs, energy and fuel costs, and other factors affecting share prices and capital markets generally. Other risks and uncertainties that may materially affect the Company are detailed from time to time in the respective reports filed by the Company with the Securities and Exchange Commission, including Forms 10-Q, 10-K, and 8-K.

                          The J. M. Smucker Company
                 Condensed Consolidated Statements of Income
                                 (Unaudited)

                                               Three Months Ended July 31,
                                                2005                     2004
                                                  (Dollars in thousands,
                                                   except per share data)

    Net sales                               $510,331                 $413,267
    Cost of products sold                    345,486                  268,426
    Cost of products sold - restructuring        132                      653
    Gross Profit                             164,713                  144,188
    Selling, distribution, and administrative
     expenses                                110,624                   90,826
    Other restructuring costs                  1,489                    2,355
    Merger and integration costs               2,928                    2,763
    Operating Income                          49,672                   48,244
    Interest income                            1,820                      718
    Interest expense                          (6,107)                  (4,423)
    Other income - net                           194                   (1,182)
    Income from Continuing Operations
     Before Income Taxes                      45,579                   43,357
    Income taxes                              15,682                   15,870
    Income from Continuing Operations         29,897                   27,487
    Gain on sale of discontinued operations,
     net of tax                                  -                      5,678
    Discontinued operations, net of tax          -                       (317)
    Net Income                               $29,897                  $32,848

    Earnings per common share:
       Income from continuing operations       $0.51                    $0.51
       Discontinued operations                   -                       0.10
       Net income                              $0.51                    $0.61

       Income from continuing operations -
        assuming dilution                      $0.51                    $0.50
       Discontinued operations - assuming
        dilution                                 -                       0.10
       Net income - assuming dilution          $0.51                    $0.60

    Dividends declared per common share        $0.27                    $0.25

    Weighted-average shares outstanding   58,279,424               53,831,281
    Weighted-average shares outstanding -
     assuming dilution                    58,920,456               54,513,281



                          The J. M. Smucker Company
                    Condensed Consolidated Balance Sheets
                                 (Unaudited)

                                               July 31, 2005    April 30, 2005
                                                 (Dollars in thousands)
    ASSETS
    Current Assets:
       Cash and cash equivalents                    $47,487           $58,085
       Marketable securities                         20,017            17,739
       Trade receivables                            161,262           145,734
       Inventories                                  344,209           284,487
       Other current assets                          45,840            49,806
          Total Current Assets                      618,815           555,851

    Property, Plant, and Equipment, Net             521,964           521,101

    Other Noncurrent Assets:
       Goodwill                                     948,431           951,208
       Other intangible assets, net                 470,481           469,758
       Marketable securities                         49,543            59,074
       Other assets                                  77,325            78,902
          Total Noncurrent Assets                 1,545,780         1,558,942
                                                 $2,686,559        $2,635,894

    LIABILITIES & SHAREHOLDERS' EQUITY
    Current Liabilities:
       Notes payable                                $34,314           $33,378
       Current portion of long-term debt             17,000            17,000
       Accounts payable                             123,987           105,290
       Other current liabilities                    180,699           152,624
          Total Current Liabilities                 356,000           308,292

    Noncurrent Liabilities:
       Long-term debt, net of current
        portion                                     430,821           431,560
       Other noncurrent liabilities                 205,575           205,242
          Total Noncurrent Liabilities              636,396           636,802

    Shareholders' Equity, Net                     1,694,163         1,690,800
                                                 $2,686,559        $2,635,894



                          The J. M. Smucker Company
                             Financial Highlights
                                 (Unaudited)

                                                  Three Months Ended July 31,
                                                      2005               2004
                                                 (Dollars in thousands, except
                                                         per share data)

    Net sales                                     $510,331           $413,267

    Net income and net income per common share:
       Net income                                  $29,897            $32,848
       Net income per common share -- assuming
        dilution                                     $0.51              $0.60

    Income and income per common share from
    continuing operations:
       Income                                      $29,897            $27,487
       Income per common share -- assuming
        dilution                                     $0.51              $0.50

    Income and income per common share from
     continuing operations before restructuring and
     merger and integration costs: (1)
       Income                                      $32,881            $31,146
       Income per common share -- assuming
        dilution                                     $0.56              $0.57

    (1) Reconciliation to income from continuing
        operations:
        Income from continuing operations before
         income taxes                              $45,579            $43,357
        Merger and integration costs                 2,928              2,763
        Cost of products sold - restructuring          132                653
        Other restructuring costs                    1,489              2,355

        Income from continuing operations before
        income taxes, restructuring, and merger and
        integration costs                           50,128             49,128
        Income taxes                                17,247             17,982
        Income from continuing operations before
         restructuring and merger and integration
         costs                                     $32,881            $31,146
SOURCE  J. M. Smucker Company
    -0-                             08/22/2005
    /CONTACT:  Investors, Mark R. Belgya, Vice President, Chief Financial
Officer and Treasurer, or George G. Sent, Jr., Director, Corporate Finance and
Investor Relations, or Media, Maribeth Badertscher, Director, Corporate
Communications, of The J. M. Smucker Company, +1-330-682-3000/
    /Web site:  http://www.smuckers.com/
    (SJM)

CO:  J. M. Smucker Company
ST:  Ohio
IN:  FOD REA
SU:  ERN CCA ERP



JJ-MH
-- CLM004 --
5444 08/22/2005 07:00 EDT http://www.prnewswire.com
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