-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, lO3nWnCxBoujnMklJN68rG/i1TQdyUhwTZfvLLGP1FXZnP2cSsBEqf+ckbm1DcyG f/By4qETguvO/mBZjp0cAQ== 0000950152-94-000252.txt : 19940315 0000950152-94-000252.hdr.sgml : 19940315 ACCESSION NUMBER: 0000950152-94-000252 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19940131 FILED AS OF DATE: 19940314 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SMUCKER J M CO CENTRAL INDEX KEY: 0000091419 STANDARD INDUSTRIAL CLASSIFICATION: 2033 IRS NUMBER: 340538550 STATE OF INCORPORATION: OH FISCAL YEAR END: 0430 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 34 SEC FILE NUMBER: 001-05111 FILM NUMBER: 94515799 BUSINESS ADDRESS: STREET 1: STRAWBERRY LN CITY: ORRVILLE STATE: OH ZIP: 44667 BUSINESS PHONE: 2166823000 MAIL ADDRESS: STREET 1: STRAWBERRY LANE, P.O. BOX 280 CITY: ORRVILLE STATE: OH ZIP: 44667 10-Q 1 SMUCKER'S QUARTERLY REPORT 1 Sequential Page No. 1 of 8 Pages UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 Form 10-Q (X) QUARTERLY REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended January 31, 1994 ---------------- OR ( ) TRANSITION REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to ---------- ---------- Commission File Number 1-5111 ------ THE J. M. SMUCKER COMPANY Ohio 34-0538550 ---------------------- --------------------- State of Incorporation IRS Identification No. STRAWBERRY LANE ORRVILLE, OHIO 44667 (216) 682-3000 The Company has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and has been subject to such filing requirements for the past 90 days. The Company had 14,362,999 Class A Common Shares and 14,794,039 Class B Common Shares outstanding on January 31, 1994. The Exhibit Index is located at Sequential Page No. 8. 2 Sequential Page No. 2 PART I. FINANCIAL INFORMATION THE J. M. SMUCKER COMPANY CONDENSED STATEMENTS OF CONSOLIDATED INCOME (Unaudited) Item I. FINANCIAL STATEMENTS
Three Months Ended Nine Months Ended January 31, January 31, -------------------------- -------------------------- 1994 1993 1994 1993 -------- -------- -------- -------- (Dollars in thousands, except per share data) Net Sales $120,616 $110,367 $377,297 $369,012 Cost of products sold 76,954 69,808 239,819 237,714 -------- -------- -------- -------- 43,662 40,559 137,478 131,298 Selling, distribution, and administrative expenses 31,796 29,022 93,791 87,750 -------- -------- -------- -------- 11,866 11,537 43,687 43,548 Interest income 244 362 742 974 Other income (net) 372 696 377 850 -------- -------- -------- -------- 12,482 12,595 44,806 45,372 Interest expense 122 121 219 242 -------- -------- -------- -------- INCOME BEFORE INCOME TAXES 12,360 12,474 44,587 45,130 AND CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING METHOD Income taxes 4,973 5,177 17,871 18,058 -------- -------- -------- -------- INCOME BEFORE CUMULATIVE EFFECT 7,387 7,297 26,716 27,072 OF CHANGE IN ACCOUNTING METHOD Cumulative effect of change in accounting method for postre- tirement benefits other than pension --- --- --- (4,454) -------- -------- -------- -------- NET INCOME $ 7,387 $ 7,297 $ 26,716 $ 22,618 ======== ======== ======== ======== Net income per Common Share before cumulative effect of change in accounting method $ .26 $ .25 $ .92 $ .92 Cumulative effect of change in accounting method --- --- --- (.15) -------- -------- -------- -------- Net income per Common Share* $ .26 $ .25 $ .92 $ .77 ======== ======== ======== ======== Dividends declared on Class A Common Shares $ .115 $ .105 $ .345 $ .315 ======== ======== ======== ======== Dividends declared on Class B Common Shares $ .115 $ .105 $ .345 $ .315 ======== ======== ======== ======== * Computed on the weighted average number of Class A Common Shares and Class B Common Shares out- outstanding, namely 29,162,460 29,612,946 29,191,050 29,597,380 See notes to condensed, consolidated financial statements.
3 Sequential Page No. 3 THE J. M. SMUCKER COMPANY CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
January 31, 1994 April 30, 1993 ---------------- -------------- (Dollars in thousands) ASSETS CURRENT ASSETS Cash and cash equivalents $ 25,293 $ 50,445 Trade receivables, less allowances 39,651 40,354 Inventories: Finished products 32,125 30,101 Raw materials, containers, and supplies 57,902 41,762 -------- -------- 90,027 71,863 Other current assets 5,562 5,737 -------- -------- Total Current Assets 160,533 168,399 PROPERTY, PLANT, AND EQUIPMENT Land and land improvements 12,530 11,792 Buildings and fixtures 54,590 53,824 Machinery and equipment 108,036 96,786 Construction in progress 7,088 4,502 -------- -------- 182,244 166,904 Less allowances for depreciation (78,222) (70,578) -------- -------- Total Property, Plant, and Equipment 104,022 96,326 OTHER NONCURRENT ASSETS Intangible assets 28,477 23,207 Other assets 8,481 6,879 -------- -------- Total Other Noncurrent Assets 36,958 30,086 -------- -------- $301,513 $294,811 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Accounts and notes payable $ 22,183 $ 27,433 Salaries, wages, and additional compensation 7,164 7,515 Accrued marketing and merchandising 5,853 6,456 Income taxes 1,851 2,155 Dividends payable 3,373 3,357 Other current liabilities 7,465 9,627 -------- -------- Total Current Liabilities 47,889 56,543 NONCURRENT LIABILITIES 17,681 17,799 SHAREHOLDERS' EQUITY Class A Common Shares, outstanding shares: 3,591 3,602 14,362,999 and 14,407,493 at stated value Class B Common Shares, outstanding shares: 3,698 3,698 14,794,039 and 14,791,173 at stated value Additional capital 9,275 8,841 Retained income 234,320 218,952 Less: Deferred compensation (754) (1,430) Amount due from ESOP Trust (10,669) (10,853) Currency translation adjustment (3,518) (2,341) -------- -------- Total Shareholders' Equity 235,943 220,469 -------- -------- $301,513 $294,811 ======== ======== See notes to condensed, consolidated financial statements.
4 Sequential Page No. 4 THE J. M. SMUCKER COMPANY CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Nine Months Ended January 31 ------------------------- (Dollars in Thousands) 1994 1993 -------- -------- NET CASH PROVIDED FROM OPERATING ACTIVITIES $ 14,882 $ 23,164 CASH FLOWS FROM INVESTING ACTIVITIES Business acquired - net of cash (15,853) -0- Additions to property, plant, and equipment (12,935) (16,027) Proceeds from the sale of property, plant, and equipment 560 656 Other - net (823) (2,991) -------- -------- NET CASH USED FOR INVESTING ACTIVITIES (29,051) (18,362) CASH FLOWS FROM FINANCING ACTIVITIES Dividends paid (10,021) (9,280) Reduction in long-term debt -0- (2,500) Purchase of Common Shares (1,188) -0- Other 397 250 -------- -------- NET CASH USED FOR FINANCING ACTIVITIES (10,812) (11,530) Effect of exchange rate changes (171) (226) Net Decrease in Cash and Cash Equivalents (25,152) (6,954) Cash and Cash Equivalents at Beginning of Period 50,445 36,268 -------- -------- Cash and Cash Equivalents at End of Period $ 25,293 $ 29,314 ======== ======== ( ) Denotes use of cash See notes to condensed, consolidated financial statements.
5 Sequential Page No. 5 THE J. M. SMUCKER COMPANY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note A - BASIS OF PRESENTATION The accompanying unaudited, condensed, consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. For further information, reference is made to the consolidated financial statements and footnotes included in the Company's Annual Report on Form 10-K for the year ended April 30, 1993. Note B - COMMON SHARES At January 31, 1994, 35,000,000 Class A Common Shares and 35,000,000 Class B Common Shares were authorized. Outstanding shares of each class are shown net of 1,849,289 Class A and 1,418,249 Class B treasury shares at January 31 and 1,804,795 Class A and 1,421,115 Class B treasury shares at April 30, 1993. Note C - ACCOUNTING CHANGES The Company adopted the provisions of the Statement of Financial Accounting Standards No. 106, "Employers' Accounting for Postretirement Benefits Other Than Pensions," for the year ended April 30, 1993, retro-active to May 1, 1992. The previously reported statement of consolidated income for the third quarter and nine month periods, ended January 31, 1994, have been restated to conform to the new standard. Note D - INCOME PER SHARE Income per share has been computed based on the weighted average number of shares of the Class A Common Shares and Class B Common Shares considered outstanding during the period. * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS This discussion and analysis deals with comparisons of material changes in the condensed, consolidated financial statements for the three-month and nine-month periods ended January 31, 1994 and 1993, respectively. 6 Sequential Page No. 6 RESULTS OF OPERATIONS Sales during the third quarter increased $10,249,000, or 9%, over the same period last year. All business areas reported increases in sales with the International area realizing the largest dollar gain for the quarter. A majority of the international sales growth came from the inclusion of sales by Canada Group East (formerly the Jam Division of Culinar Inc.), which was acquired by the Company earlier in the fiscal year. The Foodservice, Industrial, and Specialty Foods areas each experienced relatively strong sales gains during the quarter. In the Consumer area, grocery market sales were up moderately and the mass retail and beverage markets showed significant growth. On a year-to-date basis, sales are above prior year by $8,285,000, or 2%, again primarily in the International area. All other business areas, except Foodservice, are behind in sales compared to the same period last year. The cost of products sold during the quarter increased as a percentage of sales over the same period last year due to a relatively higher percentage of International sales and higher costs in connection with certain fruits and sweeteners. The Company expects these higher costs to continue into its fourth quarter. On a year-to-date basis, the cost of products sold, as a percentage of sales, continues to trend lower than last year due to favorable margins realized during the first two quarters. The percentage increase in selling, distribution, and administration costs for the third quarter over the same period last year was consistent with the increase in sales. Higher distribution and administrative costs were offset by lesser increases in selling expenses. For the first three quarters, selling, distribution, and administration costs continue to increase at a greater rate than sales. Interest income was down for both the quarter and nine-month periods due to lower interest rates and investment balances. The decrease in other income for the quarter was due to the gain recognized on the sale of fixed assets during this same time period last year. Income taxes decreased as a percentage of pre-tax income for the quarter. During the third quarter last year, the Company revised its year-end estimate of the effective federal tax rate and retroactively adjusted tax expense for the first nine months. FINANCIAL CONDITION - LIQUIDITY AND CAPITAL RESOURCES The balance sheet and financial position of the Company remain strong. Although cash and cash equivalent balances have decreased $25,152,000 on a year-to-date basis, due mostly to the acquisition of Canada Group East, cash flows during the third quarter were positive and the Company projects that cash generated from operations will be adequate to meet the cash needs for the remainder of the fiscal year, with the exception of financing the acquisition described below. Significant expenditures during the quarter and nine-month period included the payment of quarterly dividends and capital expenditures. During the third quarter, the Company acquired 55,440 Class A Common Shares and placed them into treasury. 7 Sequential Page No. 7 Subsequent to January 31, the Company reached an agreement with Mrs. Smith's Frozen Foods Co., a wholly owned subsidiary of Kellogg Company, to purchase Mrs. Smith's frozen food business. The transaction, which will be financed using a combination of cash and bank debt, is subject to regulatory approvals, but is expected to be completed during the fourth quarter. The Company is negotiating increases in its credit lines to provide the additional funding for the acquisition and to ensure adequate working capital for seasonal fruit purchases. The Company expects no difficulty in securing the additional financing. Item 6. EXHIBITS AND REPORTS ON FORM 8-K (a) EXHIBITS See the Index of Exhibits that appears on Sequential Page No. 8 of this report. (b) REPORTS ON FORM 8-K No reports on Form 8-K were required to be filed during the quarter for which this report is filed. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. March 14, 1994 THE J. M. SMUCKER COMPANY BY STEVEN J. ELLCESSOR Secretary AND RICHARD K. SMUCKER President 8 Sequential Page No. 8 INDEX OF EXHIBITS That are filed with the Commission and the New York Stock Exchange
Assigned Sequential Exhibit No. * Description Page No. - ----------------------------------------------------------------------------- 4 (a) Industrial Development Revenue Bond Project ** Agreement dated as of December 1, 1986. (b) Promissory Note between The J. M. Smucker ** Company and the First of America Bank - Central dated as of March 15, 1993. * Exhibits 2, 10, 11, 15, 18, 19, 20, 23, 24, 25, 27, and 99 are either inapplicable to the Company or require no answer. ** As permitted by Item 601(b)(4)(iii) of Regulation S-K, no copy of this instrument is filed; however, a copy will be furnished to the Commission upon request.
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