<PAGE> 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.
<PAGE> 2
Sequential Page
No. 2
<TABLE>
PART I. FINANCIAL INFORMATION
THE J. M. SMUCKER COMPANY
CONDENSED STATEMENTS OF CONSOLIDATED INCOME
(Unaudited)
Item I. FINANCIAL STATEMENTS
<CAPTION>
Three Months Ended Nine Months Ended
January 31, January 31,
-------------------------- --------------------------
1994 1993 1994 1993
-------- -------- -------- --------
(Dollars in thousands, except per share data)
<S> <C> <C> <C> <C>
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
======== ======== ======== ========
<FN>
* 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.
</TABLE>
<PAGE> 3
Sequential Page
No. 3
<TABLE>
THE J. M. SMUCKER COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
<CAPTION>
January 31, 1994 April 30, 1993
---------------- --------------
(Dollars in thousands)
<S> <C> <C>
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
======== ========
<FN>
See notes to condensed, consolidated financial statements.
</TABLE>
<PAGE> 4
Sequential Page
No. 4
<TABLE>
THE J. M. SMUCKER COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<CAPTION>
Nine Months Ended
January 31
-------------------------
(Dollars in Thousands)
1994 1993
-------- --------
<S> <C> <C>
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
======== ========
<FN>
( ) Denotes use of cash
See notes to condensed, consolidated financial statements.
</TABLE>
<PAGE> 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.
<PAGE> 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.
<PAGE> 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
<PAGE> 8
Sequential Page
No. 8
INDEX OF EXHIBITS
That are filed with the Commission and
the New York Stock Exchange
<TABLE>
<CAPTION>
Assigned Sequential
Exhibit No. * Description Page No.
- -----------------------------------------------------------------------------
<S> <C> <C>
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.
<FN>
* 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.
</TABLE>
