<PAGE> 1
THIS COPY IS BEING SUBMITTED PURSUANT Sequential Page
TO RULE 901(D) OF REGULATION S-T. 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, 1995
-----------------------
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 precedings and has been
subject to such filing requirements for the past 90 days.
The Company had 14,384,839 Class A Common Shares and 14,778,839 Class B Common
Shares outstanding on July 31, 1995.
The Exhibit Index is located at Sequential Page No. 9.
<PAGE> 2
Sequential Page
No. 2
PART I. FINANCIAL INFORMATION
THE J. M. SMUCKER COMPANY
CONDENSED STATEMENTS OF CONSOLIDATED INCOME
(Unaudited)
Item 1. Financial Statements
--------------------
<TABLE>
<CAPTION>
Three Months Ended
July 31,
------------------------
1995 1994
-------- ---------
(Dollars in thousands,
except per share data)
<S> <C> <C>
Net Sales $147,965 $144,347
Cost of products sold 94,619 93,403
-------- --------
53,346 50,944
Selling, distribution, and
administrative expenses 36,984 35,739
-------- --------
16,362 15,205
Interest income 156 196
Other income - net 874 699
-------- --------
17,392 16,100
Interest expense 1,201 739
-------- --------
INCOME BEFORE INCOME TAXES 16,191 15,361
Income taxes 6,667 6,146
-------- --------
NET INCOME $ 9,524 $ 9,215
======== =======
Net income per Common Share* $ .33 $ .32
===== ======
Dividends declared on
Class A Common Shares $ .13 $ .125
===== ======
Dividends declared on
Class B Common Shares $ .13 $ .125
===== ======
* Computed on the weighted average
number of Class A Common Shares
and Class B Common Shares out-
standing, namely 29,163,678 29,131,744
</TABLE>
See notes to condensed, consolidated financial statements.
<PAGE> 3
Sequential Page
No. 3
THE J. M. SMUCKER COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
July 31, 1995 April 30, 1995
(Unaudited) (Audited)
----------- ------------
ASSETS (Dollars in Thousands)
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $14,464 $ 11,244
Trade receivables, less allowances 55,455 53,600
Inventories:
Finished products 68,090 49,825
Raw materials, containers, and supplies 80,718 60,849
-------- --------
148,808 110,674
Other current assets 13,512 16,318
-------- --------
Total Current Assets 232,239 191,836
PROPERTY, PLANT, AND EQUIPMENT
Land and land improvements 14,747 14,260
Buildings and fixtures 72,002 72,079
Machinery and equipment 149,276 144,141
Construction in progress 7,997 5,605
------- -------
244,022 236,085
Less allowances for depreciation (99,553) (95,960)
-------- --------
Total Property, Plant and Equipment 144,469 140,125
OTHER NONCURRENT ASSETS
Goodwill 40,241 40,621
Trademarks and patents 39,689 40,019
Other assets 10,169 8,416
-------- --------
Total Other Noncurrent Assets 90,099 89,056
-------- --------
$466,807 $421,017
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 50,049 $ 40,527
Notes payable 24,500 0
Salaries, wages, and additional compensation 9,551 10,235
Accrued marketing and merchandising 14,527 14,260
Income taxes 8,317 3,858
Other current liabilities 12,567 10,963
------- -------
Total Current Liabilities 119,511 79,843
NONCURRENT LIABILITIES 83,569 83,182
SHAREHOLDERS' EQUITY
Class A Common Shares, outstanding shares: 3,596 3,596
14,384,839 at stated value
Class B Common Shares (Non-voting),out- 3,695 3,695
standing shares: 14,778,839 at stated value
Additional capital 10,963 10,963
Retained income 260,600 254,854
Less:
Deferred compensation (1,151) (1,292)
Amount due from ESOP Trust (10,441) (10,441)
Currency translation adjustment (3,535) (3,383)
-------- ---------
Total Shareholders' Equity 263,727 257,992
-------- --------
$466,807 $421,017
======== ========
</TABLE>
See notes to condensed, consolidated financial statements.
<PAGE> 4
Sequential Page
No. 4
THE J. M. SMUCKER COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
July 31
------------------------------
(Dollars in Thousands)
1995 1994
--------- ---------
<S> <C> <C>
NET CASH USED FOR OPERATING ACTIVITIES $ (9,124) $(19,923)
CASH FLOWS FROM INVESTING ACTIVITIES
Business acquired - net of cash -0- (22,282)
Additions to property, plant, and
equipment (8,697) (4,806)
Proceeds from the sale of property,
plant, and equipment 121 159
Other - net -0- (39)
-------- --------
NET CASH USED FOR INVESTING ACTIVITIES (8,576) (26,968)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from short-term debt 24,500 42,000
Dividends paid (3,779) (3,634)
Other - net 159 (185)
-------- --------
NET CASH PROVIDED BY
FINANCING ACTIVITIES 20,880 38,181
Effect of exchange rate changes 40 114
Net Increase/(Decrease) in Cash and
Cash Equivalents 3,220 (8,596)
Cash and Cash Equivalents at
Beginning of Period 11,244 14,059
------- -------
Cash and Cash Equivalents at
End of Period $14,464 $ 5,463
======= =======
( ) Denotes use of cash
</TABLE>
See notes to condensed, consolidated financial statements.
<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. The
seasonal nature of the Mrs. Smith's business will have its most significant
impact on the Company's business during the second and third quarters. 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, 1995.
Note B - Common Shares
-------------
At July 31, 1995, 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 1,827,449 Class A and 1,433,449 Class B treasury shares at both
July 31, 1995 and April 30, 1995.
Note C - Accounting Reclassifications
----------------------------
Certain prior year amounts have been reclassified to conform to
current year classifications.
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
periods ended July 31, 1995 and 1994, respectively.
<PAGE> 6
Sequential Page
No. 6
Results of Operations
---------------------
Sales for the first quarter ended July 31, 1995 were $147,965,000, up
approximately 3% over the same period last year. Sales were up over the prior
year in the Consumer, Beverage, Foodservice, Industrial, and International
business areas. In the Consumer area, the growth was led by increases in sales
of Simply Fruit and Low Sugar fruit spreads and Sundae Syrups ice cream
toppings, plus the addition of the Laura Scudder's natural peanut butter
business, which was acquired in the third quarter of fiscal 1995. The increase
in the Beverage area was the result of the inclusion of a full quarter's sales
of the After The Fall business, acquired in July 1994. In the International
area, most of the increase came from higher sales of Smucker's branded products
in Latin America and Eastern Europe. Sales of Mrs. Smith's products were down
from the first quarter of last fiscal year, primarily due to the
discontinuation of the SmartStyle line, which was in national distribution last
year.
Earnings for the quarter were $9,524,000, or $.33 per share, compared to
$9,215,000, or $.32 per share for the same period last year. All business
areas, with the exception of International, contributed to the earnings growth
during the quarter. Mrs. Smith's earnings were up modestly for the quarter,
despite lower sales. With respect to Mrs. Smith's, new marketing and sales
initiatives are in place for the upcoming holiday season, which will focus on
reinforcing both the brand's home-baked image and its value perception with
consumers. Although this will result in somewhat higher expenditures for Mrs.
Smith's than during the holiday season last year and, as a result, reduce the
Mrs. Smith's contribution to earnings during the second and third quarters,
this is consistent with the Company's long-term plans to support the brand and
generate continuing growth of Mrs. Smith's sales and share of market.
Cost of products sold during the quarter decreased as a percentage
of sales compared to the same period last year. The decrease was a result of
lower raw material costs on certain key fruits and a change in mix of products
sold as a result of a shift in timing of certain grocery promotions. Selling,
distribution, and administration costs increased at a rate slightly higher than
the increase in sales due primarily to increased distribution and selling
expenses associated with the After The Fall business.
Interest expense was up over the same period last year due to an increase
in the average outstanding debt balance. Debt was higher because of the fiscal
1995 acquisitions of the After The Fall and Laura Scudder's businesses for
cash. This additional expense was partially offset by an increase in other
non-operating income, notably increased profits on the sale of excess fruit
inventories.
Income taxes increased at a slightly greater rate than income before tax
(8.5% vs. 5.4%), due to a higher estimated effective federal tax rate and
increased state and local taxes.
<PAGE> 7
Sequential Page
No. 7
Financial Condition - Liquidity and Capital Resources
-----------------------------------------------------
The Company's financial position continues to be strong despite the
increase in debt during the first quarter. The increase in debt since April
30, 1995, was primarily to fund the seasonal procurement of fruit. The
majority of fruit purchases occur during the first half of the year. Other
significant uses of cash during the quarter were capital expenditures and the
payment of dividends.
During the second quarter, the Company will continue to borrow against its
revolving credit line in order to finance remaining fruit purchases and other
working capital requirements. The Company expects that borrowings will peak
during the quarter but remain within the $125 million maximum under the credit
line. Despite the current debt level, the Company anticipates that, in the
absence of future acquisitions or similar unplanned events, cash from
continuing operations this year will be sufficient to reduce the outstanding
fiscal year-end debt balance to a lower level than at the prior year-end.
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.
<PAGE> 8
Sequential Page
No. 8
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, 1995 THE J. M. SMUCKER COMPANY
BY STEVEN J. ELLCESSOR
Secretary
AND RICHARD K. SMUCKER
President
<PAGE> 9
Sequential Page
No. 9
<TABLE>
INDEX OF EXHIBITS
That are filed with the Commission and
the New York Stock Exchange
<CAPTION>
Assigned Sequential
Exhibit No. * Description Page No.
----------------------------------------------------------------------------------------
<S> <C> <C> <C>
4 (a) Industrial Development Revenue Bond Project **
Agreement dated as of December 1, 1986.
(b) Revolving credit agreement between The J. M. Smucker
Company and Society National Bank (individually and as
Agent), National City Bank, and the First National
Bank of Chicago dated as of April 27, 1994,
incorporated by reference to the Quarterly Report on
Form 10-Q for the period ended July 31, 1994.
(c) First Amendment to the revolving credit agreement
between The J. M. Smucker Company and Society National
Bank (individually and as Agent), National City Bank,
and the First National Bank of Chicago dated as of
April 25, 1995, incorporated by reference to the
Annual Report on Form 10-K for the period ended April
30, 1995.
27 Financial data schedules pursuant to Article 5
in Regulation S-X.
<FN>
* Exhibits 2, 10, 11, 15, 18, 19, 22, 23, and 24 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>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> APR-30-1995
<PERIOD-START> MAY-01-1995
<PERIOD-END> JUL-31-1995
<CASH> 14,464
<SECURITIES> 0
<RECEIVABLES> 57,674
<ALLOWANCES> 2,219
<INVENTORY> 148,808
<CURRENT-ASSETS> 232,239
<PP&E> 244,022
<DEPRECIATION> 99,553
<TOTAL-ASSETS> 466,807
<CURRENT-LIABILITIES> 119,511
<BONDS> 0
<COMMON> 7,291
0
0
<OTHER-SE> 256,436
<TOTAL-LIABILITY-AND-EQUITY> 466,807
<SALES> 147,965
<TOTAL-REVENUES> 147,965
<CGS> 94,619
<TOTAL-COSTS> 94,619
<OTHER-EXPENSES> 36,984
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,201
<INCOME-PRETAX> 16,191
<INCOME-TAX> 6,667
<INCOME-CONTINUING> 9,524
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 9,524
<EPS-PRIMARY> .33
<EPS-DILUTED> .33
</TABLE>
