ORRVILLE, Ohio, June 17, 2010 /PRNewswire via COMTEX/ --Quarter EPS up 26 percent, up 5 percent excluding chargesAnnual EPS up 33 percent, up 16 percent excluding chargesCompany provides sales and earnings outlook for 2011
The J. M. Smucker Company (NYSE: SJM) today announced results for the fourth quarter and fiscal year ended April 30, 2010. Results for the years ended April 30, 2010 and 2009, include the operations of The Folgers Coffee Company ("Folgers") from the close of the merger transaction on November 6, 2008.
Executive Summary
Three Months Ended April 30,
----------------------------
%
Increase
2010 2009 (Decrease)
---- ---- -----------
(Dollars in millions, except per share data)
Net sales $1,069.1 $1,068.5 0%
Operating income $180.8 $157.4 15%
% of net sales 16.9% 14.7%
Net income:
Income $120.6 $94.3 28%
Income per diluted
share $1.01 $0.80 26%
EBITDA $229.2 $199.1 15%
Year Ended April 30,
--------------------
%
Increase
2010 2009 (Decrease)
---- ---- -----------
(Dollars in millions, except per share data)
Net sales $4,605.3 $3,757.9 23%
Operating income $789.9 $451.0 75%
% of net sales 17.2% 12.0%
Net income:
Income $494.1 $266.0 86%
Income per diluted
share $4.15 $3.11 33%
EBITDA $975.0 $569.8 71%
"We achieved another year of record sales while growing volume and profitability across our portfolio of iconic brands," commented Tim Smucker, Chairman of the Board and Co-Chief Executive Officer. "With the completion of our first full fiscal year including the coffee business, we have just begun to realize the potential of our new, larger company. Our success is a result of our employees' commitment to our strategy, their ability to work together as one, and their unrelenting focus on the consumer."
"Our strong ongoing performance against challenging economic and competitive environments demonstrates our organization's capabilities," added Richard Smucker, Executive Chairman and Co-Chief Executive Officer. "The strong cash flows we consistently generate give us the opportunity to make investments in furthering brand equities, product and operational innovations, and brand portfolio expansion. As a result, our core businesses are solid, our brands are strong, and we are well-poised for the future."
Net Sales
Three Months Ended April 30,
----------------------------
Increase
2010 2009 (Decrease) %
(Dollars in millions)
Net sales $1,069.1 $1,068.5 $0.6 0%
Adjust for
noncomparable items:
Acquisitions - - - 0%
Divestitures - (6.3) 6.3 1%
Foreign exchange (16.9) - (16.9) (2%)
----- --- ----- ----
Net sales without
acquisitions,
divestitures, and
foreign exchange $1,052.2 $1,062.2 $(10.0) (1%)
======== ======== ====== ====
Year Ended April 30,
--------------------
Increase
2010 2009 (Decrease) %
---
(Dollars in millions)
Net sales $4,605.3 $3,757.9 $847.4 23%
Adjust for
noncomparable items:
Acquisitions (920.9) - (920.9) (25%)
Divestitures - (6.3) 6.3 1%
Foreign exchange (23.4) - (23.4) (1%)
----- --- ----- ----
Net sales without
acquisitions,
divestitures, and
foreign exchange $3,661.0 $3,751.6 $(90.6) (2%)
======== ======== ====== ====
Net sales in the fourth quarter of 2010 were equal to the very strong fourth quarter of 2009. Excluding the impact of the potato business divestiture and foreign exchange, net sales were down approximately 1 percent in the fourth quarter of 2010, compared to 2009. Strong sales in the U.S. Retail Consumer Market segment mostly offset declines in the U.S. Retail Oils and Baking Market and the U.S. Retail Coffee Market segments, resulting in an overall net volume decline of 1 percent. The overall impact of pricing and mix was not significant to the comparison of the fourth quarters of 2010 and 2009.
Margins
Three Months
Ended Year Ended
April 30, April 30,
--------- ---------
2010 2009 2010 2009
---- ---- ---- ----
(% of net sales)
Gross profit 40.2% 37.4% 38.8% 33.3%
Selling, distribution, and
administrative expenses:
Marketing 7.2% 4.1% 6.6% 5.8%
Selling 3.6% 3.6% 3.3% 3.5%
Distribution 3.5% 3.4% 3.3% 3.5%
General and administrative 7.2% 5.9% 5.9% 5.1%
21.5% 17.0% 19.1% 17.9%
==== ==== ==== ====
Amortization 1.7% 1.5% 1.6% 1.0%
Impairment charges 0.2% 0.1% 0.3% 0.1%
Restructuring and merger and
integration costs 0.6% 3.7% 0.8% 2.2%
Other operating (income) expense
-net (0.7%) 0.4% (0.2%) 0.1%
Operating Income 16.9% 14.7% 17.2% 12.0%
==== ==== ==== ====
Gross profit increased $30.9 million to 40.2 percent of net sales in the fourth quarter of 2010, from 37.4 percent in the fourth quarter of 2009. Lower manufacturing and raw material costs, primarily soybean oil, flour, peanuts, and certain fruits, impacted this quarter's gross margin compared to last year.
Selling, distribution, and administrative ("SD&A") expenses increased 26 percent for the fourth quarter of 2010, compared to 2009, and increased as a percentage of net sales from 17.0 percent to 21.5 percent. The majority of the increase is due to a $33.0 million increase in marketing expense in the fourth quarter of 2010, compared to the prior year. The Company made a record investment in television, print, and online advertising in support of its largest brands during the quarter, compared to limited expense recognized in the fourth quarter of 2009.
General and administrative expenses increased 23 percent in the fourth quarter of 2010, compared to 2009, as last year's fourth quarter did not include expenses to fully support the Folgers business and the larger company. In addition, the current quarter includes increased costs for pension, information services, and digital communication initiatives compared to the prior year's quarter. The Company also incurred approximately $2.1 million in expense related to ceasing production at its West Fargo, North Dakota, facility in April 2010.
Other operating income - net of approximately $6.8 million includes the gain on the divestiture of the Company's potato business of approximately $12.9 million during the quarter, offset by the write-off of assets no longer used in manufacturing operations.
Excluding the impact of restructuring and merger and integration costs in both years, operating income decreased from 18.4 percent of net sales in 2009, to 17.9 percent in 2010, as the increase in gross profit and a one-time gain on the potato business divestiture was more than offset by the increase in SD&A expenses.
Interest and Income Taxes
Interest expense decreased $3.9 million during the fourth quarter of 2010, compared to 2009, resulting from lower borrowings outstanding during the quarter. Scheduled debt repayments totaling $625.0 million were made earlier in the fiscal year.
Despite an increase in income before income tax of $26.3 million, income tax expense was essentially unchanged in the fourth quarter of 2010, compared to 2009. Adjusting the fiscal 2010 tax rate to 32.4 percent, from 33.7 percent at the end of the third quarter, resulted in a fourth quarter tax rate of 27.9 percent in 2010, compared to 33.2 percent in 2009. The fiscal 2010 effective tax rate reflects lower deferred tax rates and increased benefits realized from the domestic manufacturing deduction compared to 2009.
Restructuring
During the quarter, the Company announced plans to restructure its coffee and fruit spreads operations as part of its ongoing efforts to enhance the long-term strength and profitability of its leading brands. The initiative is a long-term investment to optimize production capacity and lower the overall cost structure. The Company expects to incur restructuring costs of approximately $190 million, of which $5.7 million was recognized in the fourth quarter of 2010. The balance of the costs is anticipated to be incurred over the next four fiscal years, with approximately $85 million to $90 million expected to be incurred in fiscal 2011.
Segment Performance
Three Months Ended April 30,
----------------------------
% Increase
2010 2009 (Decrease)
---- ---- -----------
(Dollars in millions)
Net sales:
U.S. Retail Coffee
Market $417.7 $423.6 (1%)
U.S. Retail Consumer
Market 270.4 257.1 5%
U.S. Retail Oils and
Baking Market 163.2 185.2 (12%)
Special Markets 217.8 202.6 8%
Segment profit:
U.S. Retail Coffee
Market $126.4 $149.1 (15%)
U.S. Retail Consumer
Market 70.5 58.7 20%
U.S. Retail Oils and
Baking Market 26.3 17.7 49%
Special Markets 40.7 39.2 4%
Segment profit margin:
U.S. Retail Coffee
Market 30.3% 35.2%
U.S. Retail Consumer
Market 26.1% 22.8%
U.S. Retail Oils and
Baking Market 16.1% 9.5%
Special Markets 18.7% 19.4%
Year Ended April 30,
--------------------
% Increase
2010 2009 (Decrease)
---- ---- -----------
(Dollars in millions)
Net sales:
U.S. Retail Coffee
Market $1,700.5 $855.6 99%
U.S. Retail Consumer
Market 1,125.3 1,103.3 2%
U.S. Retail Oils and
Baking Market 905.7 995.5 (9%)
Special Markets 873.8 803.6 9%
Segment profit:
U.S. Retail Coffee
Market $550.8 $241.0 129%
U.S. Retail Consumer
Market 275.0 249.3 10%
U.S. Retail Oils and
Baking Market 142.2 124.2 15%
Special Markets 148.8 111.7 33%
Segment profit margin:
U.S. Retail Coffee
Market 32.4% 28.2%
U.S. Retail Consumer
Market 24.4% 22.6%
U.S. Retail Oils and
Baking Market 15.7% 12.5%
Special Markets 17.0% 13.9%
Segment performance for the three-month period ended April 30, 2009, has been reclassified to reflect Canadian coffee results between the Special Markets segment and the U.S. Retail Coffee Market segment, consistent with 2010 presentations. Segment performance for the year ended April 30, 2009, was not impacted.
U.S. Retail Coffee Market
The U.S. Retail Coffee Market segment net sales decreased 1 percent in the fourth quarter of 2010, compared to the fourth quarter of 2009. While Dunkin' Donuts(R) coffee continued its double-digit growth and Millstone(R) coffee realized increases during the quarter, it did not offset a reduction in the Folgers(R) brand. As a result, U.S. Retail Coffee Market segment volume declined 4 percent in the fourth quarter of 2010, compared to 2009. This decrease was anticipated due to exceptionally strong volume in the fourth quarter of 2009. The net sales decline was less pronounced than the volume decline due to favorable product mix and lower promotional spending.
The U.S. Retail Coffee Market segment profit decreased 15 percent to $126.4 million in the fourth quarter of 2010, compared to 2009, representing a 30.3 percent profit margin compared to 35.2 percent in 2009. An increase in marketing expense, primarily advertising, in the fourth quarter of 2010, more than accounted for the $22.7 million decrease in segment profit compared to 2009. Last year's fourth quarter results included limited marketing expense.
U.S. Retail Consumer Market
The U.S. Retail Consumer Market segment net sales and volume for the quarter both increased 5 percent compared to the prior year. Volume gains were realized in Jif(R) peanut butter, Smucker's(R) fruit spreads and Uncrustables(R) sandwiches, and Hungry Jack(R) pancake mixes and syrups. Excluding divested potato products in both periods, total net sales and volume increased 8 percent.
The U.S. Retail Consumer Market segment profit increased 20 percent for the fourth quarter of 2010, compared to the same period in 2009, mainly due to lower raw material costs and favorable product mix associated with strong peanut butter sales. Segment profit margin for the quarter improved from 22.8 percent in the fourth quarter of 2009, to 26.1 percent in 2010. The gain on the potato business divestiture was not reflected in segment profit.
U.S. Retail Oils and Baking Market
Net sales and volume in the U.S. Retail Oils and Baking Market segment were down 12 percent and 10 percent, respectively, for the fourth quarter of 2010, compared to 2009. Net sales and volume declines were realized primarily in Pillsbury(R) flour and baking mixes and Crisco(R) oils in a very competitive retail environment.
The U.S. Retail Oils and Baking Market segment profit increased 49 percent for the fourth quarter of 2010, compared to the same period in 2009, and profit margin improved from 9.5 percent of net sales to 16.1 percent, primarily due to lower recognized costs on select raw materials, mainly soybean oil, and lower manufacturing costs.
Special Markets
Net sales in the Special Markets segment increased 8 percent in the fourth quarter of 2010, compared to 2009, due to a favorable exchange rate impact of $16.9 million. Excluding foreign exchange, net sales decreased 1 percent in the fourth quarter of 2010, compared to 2009. Volume increased 4 percent in the fourth quarter of 2010, compared to 2009, driven by gains in Canada's baking, spreads, and coffee categories, Smucker's(R) Uncrustables(R) sandwiches in foodservice, and the natural foods business. The impact of volume growth was more than offset by price declines and increases in promotional spending in Canada.
Special Markets segment profit increased 4 percent while profit margin declined to 18.7 percent from 19.4 percent for the fourth quarter of 2010, compared to 2009.
Other Financial Results and Measures
Cash provided by operations in the fourth quarter of 2010 was $204.8 million resulting in cash provided by operations of $713.5 million for fiscal 2010, compared to $447.0 million in 2009. Capital expenditures for 2010 were $137.0 million resulting in free cash flow of $576.5 million. The Company ended 2010 with $283.6 million in cash and cash equivalents.
For the fourth quarter of 2010, earnings before interest, taxes, depreciation, and amortization ("EBITDA") were $229.2 million, or 21.4 percent of net sales, compared to $199.1 million, or 18.6 percent of net sales, in the fourth quarter of 2009.
Financing
On June 15, 2010, the Company issued $400.0 million in 4.5 percent Senior Notes with a final maturity on June 1, 2025. The Senior Notes have a 12-year average maturity with required prepayments starting on June 1, 2020. Proceeds from the Senior Notes issuance will be used for general corporate purposes.
Outlook
With the Company's strategy of owning and marketing North American food brands which hold the number one market position in their respective categories, the Company remains committed to its long-term strategic objective of 6 percent annual net sales growth and greater than 8 percent earnings per share growth, excluding restructuring and merger and integration costs.
For fiscal 2011, net sales are expected to increase at a more normalized organic growth rate, excluding acquisitions, of approximately 3 percent compared to 2010. Income per diluted share is expected to range between $4.50 and $4.60, excluding restructuring and merger and integration costs of $0.55 to $0.60 per diluted share. Approximately $0.40 per share of intangible asset amortization, a noncash expense item, is included in the range of income per diluted share for 2011.
Fiscal 2011 Segment Information
While the Company's four reportable segments will remain the same for fiscal 2011, the calculation of segment profit will change to include intangible asset amortization and impairment charges related to segment assets, along with certain other charges in each of the segments. These items were previously considered corporate expenses and were not allocated to the segments. Due to the intangible asset amortization charges associated with the Folgers transaction, the Company expects the change will reduce the U.S. Retail Coffee Market segment profit more significantly than the Company's other segments.
Conference Call
The Company will conduct an earnings conference call and webcast today, Thursday, June 17, 2010, at 8:30 a.m. E.T. The webcast can be accessed from the Company's website at http://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 dialing 888-203-1112 or 719-457-0820, with a pass code of 2193413, and will be available until Thursday, June 24, 2010.
Non-GAAP Measures
The Company uses non-GAAP measures including net sales excluding acquisitions, divestitures, and foreign exchange rate impact; income, operating income, and income per diluted share, excluding restructuring and merger and integration costs; income and income per diluted share, excluding restructuring, merger and integration costs, and amortization; EBITDA; adjusted EBITDA; and free cash flow as key measures for purposes of evaluating performance internally. These non-GAAP measures are not intended to replace the presentation of financial results in accordance with U.S. GAAP. Rather, the presentation of these non-GAAP measures supplement other metrics used by management to internally evaluate its businesses, and facilitates the comparison of past and present operations. These non-GAAP measures may not be comparable to similar measures used by other companies and may exclude certain nondiscretionary expenses and cash payments. A reconciliation of non-GAAP measures to the comparable GAAP item for the quarter and year-to-date periods is included in the "Unaudited Non-GAAP Measures" table.
About The J. M. Smucker Company
For more than 100 years, The J. M. Smucker Company has been committed to offering consumers quality products that help families create memorable mealtime moments. Today, Smucker is a leading marketer and manufacturer of fruit spreads, retail packaged coffee, peanut butter, shortening and oils, ice cream toppings, sweetened condensed milk, and health and natural foods beverages in North America. Its family of brands includes Smucker's(R), Folgers(R), Dunkin' Donuts(R), Jif(R), Crisco(R), Pillsbury(R), Eagle Brand(R), R.W. Knudsen Family(R), Hungry Jack(R), White Lily(R) and Martha White(R) in the United States, along with Robin Hood(R), Five Roses(R), Carnation(R), Europe's Best(R) and Bick's(R) in Canada. The Company remains rooted in the Basic Beliefs of Quality, People, Ethics, Growth and Independence established by its founder and namesake more than a century ago. The Company has appeared on FORTUNE Magazine's list of the 100 Best Companies to Work For in the United States 12 times, ranking number one in 2004. For more information about the Company, visit http://www.smuckers.com/.
The J. M. Smucker Company is the owner of all trademarks, except Pillsbury(R) is a trademark of The Pillsbury Company, used under license; Carnation(R) is a trademark of Societe des Produits Nestle S.A., used under license; and Dunkin' Donuts(R) is a registered trademark of DD IP Holder LLC, used under license.
The J. M. Smucker Company Forward-Looking Language
This press release contains forward-looking statements, such as projected operating results, earnings and cash flows, that are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from any future results, performance or achievements expressed or implied by those forward-looking statements. Readers should understand that the risks, uncertainties, factors and assumptions listed and discussed in this press release, including the following important factors and assumptions, could affect the future results of the Company and could cause actual results to differ materially from those expressed in the forward-looking statements:
Readers are cautioned not to unduly rely on such forward-looking statements, which speak only as of the date made, when evaluating the information presented in this press release. The Company does not assume any obligation to update or revise these forward-looking statements to reflect new events or circumstances.
(Logo: http://photos.prnewswire.com/prnh/20071219/SMUCKERLOGO )
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The J. M. Smucker Company
Unaudited Condensed Consolidated Statements of Income
Three Months Ended April 30,
----------------------------
%
Increase
2010 2009 (Decrease)
---- ---- -----------
(Dollars in thousands, except per share data)
Net sales $1,069,079 $1,068,540 0%
Cost of products
sold 635,102 669,350 (5%)
Cost of products
sold -
restructuring 3,870 - 100%
Gross Profit 430,107 399,190 8%
Gross margin 40.2% 37.4%
Selling,
distribution, and
administrative
expenses 229,648 181,709 26%
Amortization 18,398 16,060 15%
Impairment charges 1,851 743 149%
Merger and
integration costs 4,396 30,247 (85%)
Other restructuring
costs 1,841 9,326 (80%)
Other operating
(income) expense -
net (6,791) 3,658 (286%)
Operating Income 180,764 157,447 15%
Operating margin 16.9% 14.7%
Interest income 426 1,932 (78%)
Interest expense (14,527) (18,461) (21%)
Other income - net 693 119 482%
Income Before Income
Taxes 167,356 141,037 19%
Income taxes 46,750 46,769 (0%)
Net Income $120,606 $94,268 28%
======== ======= ===
Net income per
common share $1.01 $0.80 26%
===== ===== ===
Net income per
common share-
assuming dilution $1.01 $0.80 26%
===== ===== ===
Dividends declared
per common share $0.40 $0.35 14%
===== ===== ===
Weighted-average
shares outstanding 119,121,257 118,429,061 1%
=========== =========== ===
Weighted-average
shares outstanding
- assuming dilution 119,268,283 118,470,901 1%
=========== =========== ===
Year Ended April 30,
--------------------
%
Increase
2010 2009 (Decrease)
---- ---- -----------
(Dollars in thousands, except per share data)
Net sales $4,605,289 $3,757,933 23%
Cost of products sold 2,814,729 2,506,504 12%
Cost of products sold
-restructuring 3,870 - 100%
Gross Profit 1,786,690 1,251,429 43%
Gross margin 38.8% 33.3%
Selling, distribution,
and administrative
expenses 878,221 673,565 30%
Amortization 73,657 38,823 90%
Impairment charges 11,658 1,491 682%
Merger and integration
costs 33,692 72,666 (54%)
Other restructuring
costs 1,841 10,229 (82%)
Other operating
(income) expense -
net (2,309) 3,624 (164%)
Operating Income 789,930 451,031 75%
Operating margin 17.2% 12.0%
Interest income 2,793 6,993 (60%)
Interest expense (65,187) (62,478) 4%
Other income - net 3,217 519 520%
Income Before Income
Taxes 730,753 396,065 85%
Income taxes 236,615 130,112 82%
Net Income $494,138 $265,953 86%
======== ======== ===
Net income per common
share $4.15 $3.11 33%
===== ===== ===
Net income per common
share- assuming
dilution $4.15 $3.11 33%
===== ===== ===
Dividends declared per
common share $1.45 $6.31 (77%)
===== ===== =====
Weighted-average
shares outstanding 118,951,434 85,448,592 39%
=========== ========== ===
Weighted-average
shares outstanding -
assuming dilution 119,081,445 85,547,530 39%
=========== ========== ===
The J. M. Smucker Company
Unaudited Condensed Consolidated Balance Sheets
April 30, April 30,
2010 2009
---------- ----------
(Dollars in thousands)
Assets
Current Assets:
Cash and cash equivalents $283,570 $456,693
Trade receivables 238,867 266,037
Inventories 654,939 603,926
Other current assets 46,254 72,235
------ ------
Total Current Assets 1,223,630 1,398,891
Property, Plant, and
Equipment, Net 858,313 838,433
Other Noncurrent Assets:
Goodwill 2,807,730 2,791,391
Other intangible assets, net 3,026,515 3,098,976
Other assets 58,665 64,470
------ ------
Total Other Noncurrent Assets 5,892,910 5,954,837
$7,974,853 $8,192,161
========== ==========
Liabilities and Shareholders'
Equity
Current Liabilities:
Accounts payable $179,509 $198,954
Note payable - 350,000
Current portion of long-term
debt 10,000 276,726
Other current liabilities 289,388 235,556
------- -------
Total Current Liabilities 478,897 1,061,236
Noncurrent Liabilities:
Long-term debt, net of
current portion 900,000 910,000
Other noncurrent liabilities 1,269,636 1,280,994
--------- ---------
Total Noncurrent Liabilities 2,169,636 2,190,994
Shareholders' Equity 5,326,320 4,939,931
--------- ---------
$7,974,853 $8,192,161
========== ==========
The J. M. Smucker Company
Unaudited Condensed Consolidated Statements of Cash Flow
Year Ended April
30,
-----------------
2010 2009
---- ----
(Dollars in
thousands)
Operating Activities
Net income $494,138 $265,953
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 108,225 79,450
Amortization 73,657 38,823
Intangible asset impairment charges 11,658 1,491
Share-based compensation expense 25,949 22,105
Noncash restructuring charges 3,870 9,093
(Gain) loss on sale of assets - net (7,831) 2,165
Deferred income tax (benefit) expense (39,320) 25,525
Working capital 43,132 2,388
------ -----
Net Cash Provided by Operating Activities 713,478 446,993
Investing Activities
Businesses acquired, net of cash acquired - (77,335)
Additions to property, plant, and equipment (136,983) (108,907)
Other - net 32,540 9,261
------ -----
Net Cash Used for Investing Activities (104,443) (176,981)
Financing Activities
Repayment of bank note payable (350,000) -
Repayments of long-term debt (275,000) -
Proceeds from long-term debt - 400,000
Quarterly dividends paid (166,224) (110,668)
Special dividends paid - (274,208)
Purchase of treasury shares (5,569) (4,025)
Other - net 8,245 1,502
----- -----
Net Cash (Used for) Provided by Financing
Activities (788,548) 12,601
Effect of exchange rate changes 6,390 2,539
Net (decrease) increase in cash and cash
equivalents (173,123) 285,152
Cash and cash equivalents at beginning of
period 456,693 171,541
Cash and cash equivalents at end of period $283,570 $456,693
======== ========
( ) Denotes use of cash
The J. M. Smucker Company
Unaudited Non-GAAP Measures
Three Months Ended April 30,
----------------------------
2010 2009
---- ----
(Dollars in thousands, except per share data)
Operating income
before restructuring
and merger and
integration costs:
(1) $190,871 $197,020
% of net sales 17.9% 18.4%
Income before
restructuring and
merger and
integration costs:
(2)
Income $127,827 $120,768
Income per common
share --assuming
dilution $1.07 $1.02
Income before
restructuring,
merger and
integration costs,
and amortization:
(3)
Income $140,998 $131,512
Income per common
share --assuming
dilution $1.18 $1.11
Reconciliation to
(1) operating income:
Operating income $180,764 $157,447
Merger and
integration costs 4,396 30,247
Cost of products sold
-restructuring 3,870 -
Other restructuring
costs 1,841 9,326
Operating income
before restructuring
and merger and
integration costs $190,871 $197,020
======== ========
Reconciliation to net
(2) income:
Income before income
taxes $167,356 $141,037
Merger and
integration costs 4,396 30,247
Cost of products sold
-restructuring 3,870 -
Other restructuring
costs 1,841 9,326
Income before income
taxes,
restructuring, and
merger and
integration costs 177,463 180,610
Income taxes 49,636 59,842
Income before
restructuring and
merger and
integration costs $127,827 $120,768
======== ========
Reconciliation to net
(3) income:
Income before income
taxes $167,356 $141,037
Merger and
integration costs 4,396 30,247
Cost of products sold
-restructuring 3,870 -
Other restructuring
costs 1,841 9,326
Amortization 18,398 16,060
Income before income
taxes,
restructuring,
merger and
integration costs,
and amortization 195,861 196,670
Income taxes 54,863 65,158
Income before
restructuring,
merger and
integration costs,
and amortization $140,998 $131,512
======== ========
Year Ended April 30,
--------------------
2010 2009
---- ----
(Dollars in thousands, except per share data)
Operating income
before restructuring
and merger and
integration costs:
(1) $829,333 $533,926
% of net sales 18.0% 14.2%
Income before
restructuring and
merger and
integration costs:
(2)
Income $520,782 $321,617
Income per common
share --assuming
dilution $4.37 $3.76
Income before
restructuring,
merger and
integration costs,
and amortization:
(3)
Income $570,590 $347,685
Income per common
share --assuming
dilution $4.79 $4.06
Reconciliation to
(1) operating income:
Operating income $789,930 $451,031
Merger and
integration costs 33,692 72,666
Cost of products sold
-restructuring 3,870 -
Other restructuring
costs 1,841 10,229
Operating income
before restructuring
and merger and
integration costs $829,333 $533,926
======== ========
Reconciliation to net
(2) income:
Income before income
taxes $730,753 $396,065
Merger and
integration costs 33,692 72,666
Cost of products sold
-restructuring 3,870 -
Other restructuring
costs 1,841 10,229
Income before income
taxes,
restructuring, and
merger and
integration costs 770,156 478,960
Income taxes 249,374 157,343
Income before
restructuring and
merger and
integration costs $520,782 $321,617
======== ========
Reconciliation to net
(3) income:
Income before income
taxes $730,753 $396,065
Merger and
integration costs 33,692 72,666
Cost of products sold
-restructuring 3,870 -
Other restructuring
costs 1,841 10,229
Amortization 73,657 38,823
Income before income
taxes,
restructuring,
merger and
integration costs,
and amortization 843,813 517,783
Income taxes 273,223 170,098
Income before
restructuring,
merger and
integration costs,
and amortization $570,590 $347,685
======== ========
The Company uses non-GAAP measures including net sales excluding
acquisitions, divestitures, and foreign exchange rate impact;
income, operating income, and income per diluted share, excluding
restructuring and merger and integration costs; income and income
per diluted share, excluding restructuring, merger and integration
costs, and amortization; EBITDA; adjusted EBITDA; and free cash
flow as key measures for purposes of evaluating performance
internally. These non-GAAP measures are not intended to replace
the presentation of financial results in accordance with U.S. GAAP.
Rather, the presentation of these non-GAAP measures supplement
other metrics used by management to internally evaluate its
businesses, and facilitates the comparison of past and present
operations. These non-GAAP measures may not be comparable to
similar measures used by other companies and may exclude certain
nondiscretionary expenses and cash payments.
The J. M. Smucker Company
Unaudited Non-GAAP Measures
Three Months Ended April 30,
----------------------------
2010 2009
---- ----
(Dollars in thousands, except per share data)
Earnings before interest,
taxes, depreciation, and
amortization:(4) $229,191 $199,060
% of net sales 21.4% 18.6%
Free cash flow: (5) $180,473 $133,964
Reconciliation to net
(4) income:
Income before income taxes $167,356 $141,037
Interest income (426) (1,932)
Interest expense 14,527 18,461
Depreciation 29,336 25,434
Amortization 18,398 16,060
Earnings before interest,
taxes, depreciation, and
amortization $229,191 $199,060
Merger and integration
costs 4,396 30,247
Cost of products sold -
restructuring 3,870 -
Other restructuring costs 1,841 9,326
Share-based compensation
expense 6,235 5,080
Adjusted earnings before
interest, taxes,
depreciation, and
amortization $245,533 $243,713
======== ========
% of net sales 23.0% 22.8%
(5) Reconciliation to cash
provided by operating
activities:
Cash provided by operating
activities $204,792 $157,983
Additions to property,
plant, and equipment (24,319) (24,019)
Free cash flow $180,473 $133,964
======== ========
Year Ended April 30,
--------------------
2010 2009
---- ----
(Dollars in thousands, except per share data)
Earnings before interest,
taxes, depreciation, and
amortization:(4) $975,029 $569,823
% of net sales 21.2% 15.2%
Free cash flow: (5) $576,495 $338,086
Reconciliation to net
(4) income:
Income before income taxes $730,753 $396,065
Interest income (2,793) (6,993)
Interest expense 65,187 62,478
Depreciation 108,225 79,450
Amortization 73,657 38,823
Earnings before interest,
taxes, depreciation, and
amortization $975,029 $569,823
Merger and integration
costs 33,692 72,666
Cost of products sold -
restructuring 3,870 -
Other restructuring costs 1,841 10,229
Share-based compensation
expense 20,687 14,043
Adjusted earnings before
interest, taxes,
depreciation, and
amortization $1,035,119 $666,761
========== ========
% of net sales 22.5% 17.7%
(5) Reconciliation to cash
provided by operating
activities:
Cash provided by operating
activities $713,478 $446,993
Additions to property,
plant, and equipment (136,983) (108,907)
Free cash flow $576,495 $338,086
======== ========
The Company uses non-GAAP measures including net sales excluding
acquisitions, divestitures, and foreign exchange rate impact;
income, operating income, and income per diluted share, excluding
restructuring and merger and integration costs; income and income
per diluted share, excluding restructuring, merger and integration
costs, and amortization; EBITDA; adjusted EBITDA; and free cash
flow as key measures for purposes of evaluating performance
internally. These non-GAAP measures are not intended to replace
the presentation of financial results in accordance with U.S. GAAP.
Rather, the presentation of these non-GAAP measures supplement
other metrics used by management to internally evaluate its
businesses, and facilitates the comparison of past and present
operations. These non-GAAP measures may not be comparable to
measures used by other companies and may exclude certain
nondiscretionary expenses and cash payments.
The J. M. Smucker Company
Unaudited Reportable Segments
Three Months Ended April
30,
-------------------------
2010 2009
---- ----
(Dollars in thousands)
Net sales:
U.S. Retail Coffee Market $417,664 $423,574
U.S. Retail Consumer Market 270,351 257,122
U.S. Retail Oils and Baking
Market 163,232 185,229
Special Markets 217,832 202,615
------- -------
Total net sales $1,069,079 $1,068,540
========== ==========
Segment profit:
U.S. Retail Coffee Market $126,399 $149,085
U.S. Retail Consumer Market 70,474 58,704
U.S. Retail Oils and Baking
Market 26,306 17,679
Special Markets 40,704 39,238
------ ------
Total segment profit $263,883 $264,706
======== ========
Interest income 426 1,932
Interest expense (14,527) (18,461)
Amortization (18,398) (16,060)
Impairment charges (1,851) (743)
Share-based compensation
expense (6,235) (5,080)
Merger and integration costs (4,396) (30,247)
Cost of products sold -
restructuring (3,870) -
Other restructuring costs (1,841) (9,326)
Corporate administrative expense (51,959) (43,018)
Other unallocated income
(expense) 6,124 (2,666)
----- ------
Income before income taxes $167,356 $141,037
======== ========
Segment profit margin:
U.S. Retail Coffee Market 30.3% 35.2%
U.S. Retail Consumer Market 26.1% 22.8%
U.S. Retail Oils and Baking
Market 16.1% 9.5%
Special Markets 18.7% 19.4%
Year Ended April 30,
--------------------
2010 2009
---- ----
(Dollars in thousands)
Net sales:
U.S. Retail Coffee Market $1,700,458 $855,571
U.S. Retail Consumer Market 1,125,280 1,103,264
U.S. Retail Oils and Baking
Market 905,719 995,474
Special Markets 873,832 803,624
------- -------
Total net sales $4,605,289 $3,757,933
========== ==========
Segment profit:
U.S. Retail Coffee Market $550,786 $240,971
U.S. Retail Consumer Market 274,969 249,313
U.S. Retail Oils and Baking
Market 142,161 124,150
Special Markets 148,768 111,741
------- -------
Total segment profit $1,116,684 $726,175
========== ========
Interest income 2,793 6,993
Interest expense (65,187) (62,478)
Amortization (73,657) (38,823)
Impairment charges (11,658) (1,491)
Share-based compensation
expense (20,687) (14,043)
Merger and integration costs (33,692) (72,666)
Cost of products sold -
restructuring (3,870) -
Other restructuring costs (1,841) (10,229)
Corporate administrative expense (181,132) (133,313)
Other unallocated income
(expense) 3,000 (4,060)
----- ------
Income before income taxes $730,753 $396,065
======== ========
Segment profit margin:
U.S. Retail Coffee Market 32.4% 28.2%
U.S. Retail Consumer Market 24.4% 22.6%
U.S. Retail Oils and Baking
Market 15.7% 12.5%
Special Markets 17.0% 13.9%
SOURCE The J. M. Smucker Company
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