-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, BYdJpnKx70Du5RaDytJaBPkBEpltF3Q77mnTpnXZfSAEnsjQtDRUzA9XcNcanxJl KIXAt2ReGAxtr92wbkBA3Q== 0000950152-97-006550.txt : 19970918 0000950152-97-006550.hdr.sgml : 19970918 ACCESSION NUMBER: 0000950152-97-006550 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970731 FILED AS OF DATE: 19970912 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: SMUCKER J M CO CENTRAL INDEX KEY: 0000091419 STANDARD INDUSTRIAL CLASSIFICATION: CANNED, FRUITS, VEG & PRESERVES, JAMS & JELLIES [2033] IRS NUMBER: 340538550 STATE OF INCORPORATION: OH FISCAL YEAR END: 0430 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-05111 FILM NUMBER: 97679474 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 THE J.M. SMUCKER COMPANY 10-Q 1 Sequential Page No. 1 of 9 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 July 31, 1997 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 (330) 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 14,381,155 Class A Common Shares and 14,746,479 Class B Common Shares outstanding on July 31, 1997. The Exhibit Index is located at Sequential Page No. 9. 2 Sequential Page No. 2 PART I. FINANCIAL INFORMATION THE J. M. SMUCKER COMPANY CONDENSED STATEMENTS OF CONSOLIDATED INCOME (Unaudited) Item 1. Financial Statements --------------------
Three Months Ended July 31, --------------------------------- 1997 1996 ---- ---- (Dollars in thousands, except per share data) Net sales $ 147,389 $ 129,629 Cost of products sold 95,993 85,883 ------------ ------------ 51,396 43,746 Selling, distribution, and administrative expenses 35,390 30,517 ------------ ------------ 16,006 13,229 Other income (expense) Interest income 698 437 Interest expense (5) (750) Other - net 126 (85) ------------ ------------ Income before income taxes 16,825 12,831 Income taxes 6,852 5,342 ============ ============ Net Income $ 9,973 $ 7,489 ============ ============ Net income per Common Share* $ .34 $ .26 ============ ============ Dividends declared on Class A and Class B Common Shares $ .13 $ .13 ============ ============ * Computed on the weighted average number of Class A Common Shares and Class B Common Shares outstanding, namely 29,167,890 29,165,770 ============ ============
See notes to condensed consolidated financial statements 3 Sequential Page No. 3 THE J. M. SMUCKER COMPANY CONDENSED CONSOLIDATED BALANCE SHEETS
July 31, 1997 April 30,1997 (Unaudited) (Audited) ----------- --------- ASSETS CURRENT ASSETS Cash and cash equivalents $ 14,954 $ 24,091 Trade receivables, less allowances 51,417 48,140 Inventories: Finished products 37,711 39,054 Raw materials, containers, and supplies 77,636 55,052 --------- --------- 115,347 94,106 Other current assets 10,660 12,135 --------- --------- Total Current Assets 192,378 178,472 PROPERTY, PLANT, AND EQUIPMENT Land and land improvements 13,961 13,820 Buildings and fixtures 75,902 74,709 Machinery and equipment 171,349 170,160 Construction in progress 13,543 6,881 --------- --------- 274,755 265,570 Less allowances for depreciation (129,933) (125,935) --------- --------- Total Property, Plant and Equipment 144,822 139,635 OTHER NONCURRENT ASSETS Intangible assets 44,553 45,393 Other assets 22,180 21,273 --------- --------- Total Other Noncurrent Assets 66,733 66,666 --------- --------- $ 403,933 $ 384,773 ========= ========= LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable $ 46,899 $ 36,582 Other current liabilities 41,605 35,434 --------- --------- Total Current Liabilities 88,504 72,016 NONCURRENT LIABILITIES Other noncurrent liabilities 21,260 20,866 SHAREHOLDERS' EQUITY Class A Common Shares 3,595 3,606 Class B Common Shares (Non-Voting) 3,687 3,696 Additional capital 13,753 12,439 Retained income 287,697 284,605 Less: Deferred compensation (2,637) (1,396) Amount due from ESOP (10,027) (10,027) Currency translation adjustment (1,899) (1,032) --------- --------- Total Shareholders' Equity 294,169 291,891 --------- --------- $ 403,933 $ 384,773 ========= =========
See notes to condensed financial statements 4 Sequential Page No. 4 THE J. M. SMUCKER COMPANY CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Three Months Ended July 31, -------------------------- 1997 1996 ---- ---- (Dollars in Thousands) CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 9,973 $ 7,489 Adjustments (2,295) (7,645) -------- -------- NET CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES 7,678 (156) CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from the sale of assets of discontinued operations --- 19,589 Additions to property, plant, and equipment (10,076) (2,683) Proceeds from the sale of property, plant, and equipment 136 160 Other - net 291 --- -------- -------- NET CASH (USED FOR) PROVIDED BY INVESTING ACTIVITIES (9,649) 17,066 CASH FLOWS FROM FINANCING ACTIVITIES Decrease in long-term debt --- (17,700) Proceeds from short-term debt - net 96 --- Purchase of common shares (3,224) --- Dividends paid (3,798) (3,783) Other - net 41 (617) -------- -------- NET CASH USED FOR FINANCING ACTIVITIES (6,885) (22,100) Cash flows used in continuing operations (8,856) (5,190) Cash flows used in discontinuing operations --- (277) Effect of exchange rate changes (281) 63 -------- -------- Net decrease in cash and cash equivalents (9,137) (5,404) Cash and cash equivalents at beginning of period 24,091 17,647 -------- -------- Cash and cash equivalents at end of period $ 14,954 $ 12,243 ======== ========
( ) 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 generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they 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 considered necessary for a fair presentation have been included. Operating results for the three-month period ended July 31, 1997, are not necessarily indicative of the results that may be expected for the year ended April 30, 1998. 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, 1997. Note B - Common Shares ------------- At July 31, 1997, 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 1,831,133 Class A and 1,465,809 Class B treasury shares at July 31, 1997, and 1,789,162 Class A and 1,427,085 Class B treasury shares at April 30, 1997. Note C - Income Per Share ---------------- Income per share has been computed based on the weighted average number of shares of the Class A and Class B Common Shares considered outstanding during the period. Note D - Accounting Reclassifications ---------------------------- Certain prior year amounts have been reclassified to conform to current year classifications. Note E - Software Costs -------------- The Company capitalizes significant costs associated with the development and installation of internal use software. Amounts deferred are amortized over the estimated useful lives of the software beginning with the project's completion. Net deferred internal use software costs as of July 31, 1997 and April 30, 1997 were $8,742,000 and $4,976,000, respectively. 6 Sequential Page No. 6 Note F - Recently Issued Accounting Standards ------------------------------------ In the first half of calendar 1997, the Financial Accounting Standards Board issued final statements that change the method for calculating and reporting earnings per share (EPS), that require the disclosure of total comprehensive income, and that change the method for determining and reporting business segment information. The Company will adopt Statement of Financial Accounting Standards (SFAS) No. 128, Earnings Per Share, in fiscal 1998. Basic EPS will be consistent with previously reported EPS and the Company does not expect diluted EPS to be materially different. The Company will adopt the disclosure requirements of SFAS No. 130, Reporting Comprehensive Income, and SFAS No. 131, Disclosures about Segments of an Enterprise and Related Information, in fiscal 1999. ................................................................................ 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 period ended July 31, 1997. Results of Operations - --------------------- Sales for the first quarter ended July 31, 1997, were $147,389,000, up 14% over the same period last year. The Consumer, Industrial, Foodservice, Beverage, and Specialty business areas all reported sales increases for the first quarter, with Consumer and Industrial contributing more than 90% of the overall increase. In the Consumer area, sales were up in all markets. The grocery and mass retail markets reported the largest dollar gains. Much of the growth in the Consumer area was the result of improved sales of fruit spreads, particularly traditional preserves and jelly products. The addition of the Kraft retail fruit spreads business, acquired during the fourth quarter of fiscal 1997, also contributed. During the period, the Company's share of the fruit spreads category increased to near record levels. Sales of dessert toppings, natural peanut butter, and Goober products were also up over the prior year. In the Industrial area, the sales growth came from a combination of new and existing products in the bakery and yogurt categories. Growth in R.W. Knudsen Family brand beverages accounted for the increase in the Beverage area. International sales were down approximately 3%, due primarily to the impact of unfavorable exchange rates. The International area's contribution to profits, however, was up over last year. Cost of products sold decreased from last year as a percentage of net sales during the first quarter of fiscal 1998. The decrease was the result of the mix of products sold as well sweetener costs which began to decline during the latter half of fiscal 1997. Improved plant efficiencies also contributed to reduced costs. Selling, distribution, and administrative costs increased at a slightly greater rate than sales due mostly to an increase in marketing expenditures and corporate administrative expenses. The increase in marketing expenses was due primarily to additional programs in 7 Sequential Page No. 7 support of retail fruit spreads, while most of the increase in administrative costs resulted from the Company's information technology reengineering project. The Company's interest expense decreased significantly from the first quarter of last year due to the repayment during fiscal 1997 of all long-term debt. The Company's improved cash position resulted in a 60% increase in interest income for the quarter. Financial Condition - Liquidity and Capital Resources - ----------------------------------------------------- The financial position of the Company remains strong despite the reduction in cash and cash equivalents of $9,137,000 during the first quarter. Historically, the first quarter results in a net cash outflow due to expenditures required for the seasonal procurement of fruit inventories. In addition to the fruit purchases, other significant uses of cash during the quarter were capital expenditures, which included capitalized software and consulting costs, and the payment of dividends. The Company also repurchased approximately 150,000 shares of Class A and Class B Common shares during the quarter as part of its previously announced stock repurchase program. During the second quarter, the Company will continue to borrow against its lines of credit in order to finance remaining seasonal fruit purchases and other working capital requirements. Assuming that there are no additional acquisitions or other investments requiring cash outlays and that the results of operations are as anticipated, the Company expects cash provided from operations and borrowings to be sufficient to meet cash requirements and all short-term borrowing to be repaid by April 30, 1998. Recently Issued Accounting Standards - ------------------------------------ In the first half of calendar 1997, the Financial Accounting Standards Board issued final statements that change the method for calculating and reporting earnings per share (EPS), that require the disclosure of total comprehensive income, and that change the method for determining and reporting business segment information. The Company will adopt Statement of Financial Accounting Standards (SFAS) No. 128, Earnings Per Share, in fiscal 1998. Basic EPS will be consistent with previously reported EPS and the Company does not expect diluted EPS to be materially different. The Company will adopt the disclosure requirements of SFAS No. 130, Reporting Comprehensive Income, and SFAS No. 131, Disclosures about Segments of an Enterprise and Related Information, in fiscal 1999. Certain Forward-Looking Statements - ---------------------------------- This quarterly report includes certain forward-looking statements that are based on current expectations and are subject to a number of risks and uncertainties. Actual results may differ depending on a number of factors including: the success of the Company's fruit spreads marketing program during the year; competitive activity, including private label; the mix of products sold and level of marketing expenditures needed to generate those sales; an increase in fruit costs or costs of any other significant ingredients; the ability of the Company to maintain and/or improve sales and earnings of its non-retail business areas; and the successful implementation of the Company's information technology project. 8 Sequential Page No. 8 Item 6. Exhibits and Reports on Form 8-K -------------------------------- (a) Exhibits -------- See the Index of Exhibits that appears on Sequential Page No. 9 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. September 12, 1997 THE J. M. SMUCKER COMPANY /s/ Steven J. Ellcessor ------------------------ BY STEVEN J. ELLCESSOR Vice President-Administration, Secretary, and General Counsel /s/ Richard K. Smucker ------------------------ AND RICHARD K. SMUCKER President 9 Sequential Page No. 9 INDEX OF EXHIBITS That are filed with the Commission and The New York Stock Exchange
Assigned Sequential Exhibit No. * Description Page No. - -------------------------------------------------------------------------------------------- 27 Financial data schedules pursuant to Article 5 in Regulation S-X. * Exhibits 2, 3, 4, 10, 11, 15, 18, 19, 22, 23, 24, and 99 are either inapplicable to the Company or require no answer.
EX-27 2 EXHIBIT 27
5 1,000 3-MOS APR-30-1998 MAY-01-1997 JUL-31-1997 14,954 0 51,819 402 115,347 192,378 274,755 129,933 403,933 88,504 0 0 0 7,282 286,887 403,933 147,389 147,389 95,993 95,993 35,390 0 5 16,825 6,852 9,973 0 0 0 9,973 .34 .34
-----END PRIVACY-ENHANCED MESSAGE-----