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.
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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.
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By GlobalDataThe J. M. Smucker Company (www.smucker.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, 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
STATEMENTS OF CONSOLIDATED INCOME
(Unaudited)
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
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
July 31,
2000 1999
(Dollars in thousands)
ASSETS
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
LIABILITIES & SHAREHOLDERS' EQUITY
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
