The J. M. Smucker Company Announces Fiscal 2013 Fourth Quarter and Full Year Results.
— Record sales, earnings, and
operating cash flow
— Strong Q4 volume gains in U.S. retail market segments
up 31 percent; Q4 EPS up 17 percent excluding special
— Company provides
and earnings outlook for 2014
, June 6, 2013 /PRNewswire/ — The J. M. Smucker
SJM Swadeshi Jagran Manch
SJM Scandinavian Journal of Management
SJM Single Jewish Male
SJM Strategic Journey Mapping
) today announced results for the fourth quarter and
year ended April 30, 2013. Results for the years ended April 30, 2013
and 2012, include the operations of the
coffee and hot beverage business acquired from Sara Lee Corporation
(“Sara Lee foodservice business”) since the completion of the
* Fourth quarter net sales decreased 1 percent in 2013, compared to
2012, reflecting price declines taken earlier in fiscal 2013. Overall
volume increased 2 percent for the same period driven by increases of 6
and 4 percent in the U.S. Retail Coffee and U.S. Retail Consumer Foods
* Operating income excluding the impact of
, merger and
integration, and certain pension settlement costs (“special project
costs”) increased 5 percent in the fourth quarter of 2013, compared
to 2012, as the Company benefited from strong results in its U.S. Retail
* Net income excluding special project costs increased 13 percent in
the fourth quarter of 2013, compared to 2012, reflecting the increase in
operating income as well as a lower effective tax rate.
* Fourth quarter net income per diluted share, excluding special
project costs, increased 17 percent in 2013, compared to 2012, which
includes the benefit from the Company’s
over the past year.
“Our momentum continued through a strong fourth quarter, as we
achieved record sales, earnings, and operating cash flow for the full
fiscal year,” commented Richard Smucker, Chief Executive Officer.
“The record results we reported were achieved while also making
significant investments toward our future growth and creating value for
shareholders. In 2013, we increased the annual dividend paid per share
by nine percent, while also repurchasing nearly four percent of our
shares. Our long-term focus, strong consumer-relevant brands, robust
innovation, and dedicated employees are keys to this success.”
“Our fourth quarter results reflect the sustained momentum
realized across our business, particularly in key categories such as
dairy product obtained by churning the fat from milk until it solidifies. In most areas the milk of cows is the basis, but elsewhere that of goats, sheep, and mares has been used. Butter was known by 2000 B.C.
, and fruit spreads,” added Vince Byrd,
Chief Operating Officer
. “Combining strong brand
building, innovation, and productivity initiatives with an ability to
quickly adapt to market conditions has created a platform for growth. We
are well positioned to continue our history of delivering shareholder
Overall volume, based on weight, increased 2 percent in the fourth
quarter of 2013, compared to the fourth quarter of 2012. Volume gains
realized in Jif [sup.] peanut butter,
[sup.] coffee, and
, Charles Alfred 1842-1899.
American manufacturer who founded (1869) C.A. Pillsbury and Company, one of the largest flour-milling enterprises of the 19th century.
[sup.] frostings more than offset decreases in the
finely ground, usually sifted, meal of grain, such as wheat, rye, corn, rice, or buckwheat. Flour is also made from potatoes, peas, beans, peanuts, etc. Usually it refers to the finely ground and bolted (i.e.
brands, the Sara Lee foodservice business, and
Crisco [sup.] shortening.
See product mix.
1. Advantageous; helpful:
2. Encouraging; propitious:
in the quarter
reflecting the volume gains in the U.S. Retail Coffee segment.
Net sales decreased 1 percent in the fourth quarter of 2013,
compared to the fourth quarter of 2012, primarily due to a 5 percent
decrease in net price
reflecting price declines taken
earlier in fiscal 2013, notably on coffee and peanut butter.
Gross profit increased $29.9 million, or 7 percent, in the fourth
quarter of 2013, compared to 2012, due to favorable mix, lower
manufacturing overhead driven by decreased costs and higher production
volume, and an increase in sales volume. Excluding special project
costs, gross profit increased $26.9 million, or 6 percent, and improved
to 36.1 percent of net sales in the fourth quarter of 2013, compared to
33.7 percent in the fourth quarter of 2012.
Overall commodity costs were lower during the fourth quarter of
2013, compared to the fourth quarter of 2012, due primarily to green
coffee. Price declines taken over the past year resulted in overall
lower net price realization, and more than offset the impact of lower
commodity costs. Unrealized mark-to-market adjustments on
In mathematics, a fundamental concept of differential calculus representing the instantaneous rate of change of a function.
contracts were a loss of $2.3 million in the fourth quarter of 2013,
compared to a loss of $4.6 million in the fourth quarter of 2012.
Total selling, distribution, and administrative
(“SD&A”) expenses increased 9 percent in the fourth
quarter of 2013, compared to the fourth quarter of 2012, and increased
as a percentage of net sales from 15.8 percent to 17.4 percent. An
increase in brand building investments during the fourth quarter,
primarily in support of the Company’s coffee brands, led to a 17
percent increase in marketing expenses, compared to 2012. General and
administrative expenses increased 12 percent, over the same period,
including an increase in incentive compensation costs. Distribution
expenses increased 2 percent and selling expenses decreased 2 percent in
the fourth quarter of 2013, compared to 2012.
Operating income increased $28.5 million in the fourth quarter of
2013, compared to 2012, as a decrease in special project costs mostly
offset the increase in SD&A expenses. Special project costs were
$16.9 million lower in the fourth quarter of 2013, compared to 2012,
reflecting substantial progress made on the related projects, with the
majority of costs having been incurred in past years. Excluding special
project costs in both periods, operating income increased $11.5 million,
or 5 percent, and improved from 15.8 percent of net sales in the fourth
quarter of 2012 to 16.8 percent in the fourth quarter of 2013.
Income Taxes Income taxes increased $1.8 million in the fourth
quarter of 2013, compared to 2012, reflecting an increase in income
before income taxes mostly offset by a decrease in the effective tax
rate from 36.5 percent in the fourth quarter of 2012, to 32.1 percent in
2013. The effective tax rate decrease was primarily the result of lower
state income taxes.
U.S. Retail Coffee The U.S. Retail Coffee segment volume increased 6
percent in the fourth quarter of 2013, compared to the fourth quarter of
2012, led by increases of 4 percent in the Folgers [sup.] brand and 29
[sup.] packaged coffee. Segment net sales
decreased 1 percent in the fourth quarter of 2013, compared to the
fourth quarter of 2012, as net price realization was lower primarily due
to price declines taken over the past year. Since the fourth quarter of
2012, the Company has taken two price declines of
1. Almost exact or correct:
percent each, effective May 2012 and
2013. The impact of sales
mix was favorable, driven by K-Cups[sup.] and the Dunkin’
Donuts[sup.] brand. Net sales of K-Cups[sup.] increased $10.6 million,
or 18 percent in the fourth quarter of 2013, compared to the fourth
quarter of 2012, and contributed 2 percentage points of growth to
segment net sales, while contributing
a. Of, resembling, relating to, or consisting of a name or names.
b. Assigned to or bearing a person’s name:
2. Existing in name only.
to volume growth.
The U.S. Retail Coffee segment profit increased $22.7 million, or 18
percent, in the fourth quarter of 2013, compared to the fourth quarter
of 2012. Green coffee costs were significantly lower in the fourth
quarter of 2013, compared to the fourth quarter of 2012, and were
partially offset by lower price realization. The net benefit of lower
commodity cost and price, increased sales volume, and lower
manufacturing overhead contributed relatively equally to increased
segment profit for the quarter, and more than offset an increase in
marketing expenses. While segment profit growth fluctuated on a
quarterly basis during the fiscal year due to the timing of pricing
actions and recognized costs, the net impact of lower commodity costs
and price did not contribute significantly to the increase in segment
profit for the full year. Unrealized mark-to-market adjustments on
derivative contracts, which represented a loss of $0.2 million in the
fourth quarter of 2013, compared to a loss of $3.0 million in the fourth
quarter of 2012, contributed $2.8 million to segment profit growth for
U.S. Retail Consumer Foods The U.S. Retail Consumer Foods segment
net sales increased 5 percent in the fourth quarter of 2013, compared to
2012, as a 4 percent increase in segment volume and favorable sales mix
offset overall lower net price realization. Jif [sup.] brand net sales
decreased 1 percent in the fourth quarter of 2013, compared to 2012, due
to lower net price realization including the impact of a price decline
taken in the third quarter of 2013. Jif [sup.] brand volume increased 17
percent over the same period, as the prior year volume was challenged
due to a 30 percent price increase earlier in fiscal 2012.
Smucker’s [sup.] fruit spreads net sales and volume increased 3
percent and 6 percent, respectively, in the fourth quarter of 2013,
compared to 2012. Smucker’s [sup.] Uncrustables [sup.] frozen
sandwiches experienced another strong quarter as net sales and volume
increased 20 percent and 22 percent, respectively, during the same
period, benefiting from new distribution.
Crisco[sup.] brand net sales and volume decreased 4 percent and 3
percent, respectively, in the fourth quarter of 2013, compared to 2012.
Volume for the Pillsbury [sup.] brand increased 5 percent, in the fourth
quarter of 2013, compared to 2012, despite the
impact of the
tr.v. dis·closed, dis·clos·ing, dis·clos·es
1. To expose to view, as by removing a cover; uncover.
2. To make known (something heretofore kept secret).
, and was driven by frostings
Process of cooking by dry heat, especially in an oven. Baked products include bread, cookies, pies, and pastries.
mixes. Pillsbury [sup.] brand net sales increased 39 percent,
benefiting from improved net price realization for baking mixes
resulting from the cake mix downsizing and a change in promotional
strategy. Canned milk net sales and volume increased 9 percent and 4
percent, respectively, during the fourth quarter of 2013, compared to
The U.S. Retail Consumer Foods segment profit decreased 2 percent in
the fourth quarter of 2013, compared to the fourth quarter of 2012.
Generally higher costs offset
1. Of, relating to, located at, or constituting a margin, a border, or an edge:
lower peanut costs in the
fourth quarter of 2013, compared to 2012, resulting in overall higher
raw material costs. The Company decreased peanut butter prices by
approximately 10 percent late in its fiscal third quarter in
anticipation of further reductions in peanut costs later in fiscal 2014.
As a result, peanut butter price realization was significantly lower and
drove the decrease in segment profit. Segment profit was positively
impacted by mix and volume, while marketing expenses decreased in fourth
quarter of 2013, compared to 2012. Unrealized mark-to-market adjustments
on derivative contracts were a loss of $0.6 million in the fourth
quarter of 2013, compared to a loss of $0.2 million in the fourth
quarter of 2012. Last year’s segment profit included a $4.6 million
noncash impairment charge.
International, Foodservice, and Natural Foods Net sales in the
International, Foodservice, and Natural Foods segment decreased 9
percent in the fourth quarter of 2013, compared to 2012, primarily
driven by volume and lower net price realization. Segment volume
decreased 4 percent primarily due to declines in the Sara Lee
foodservice business, attributed in part to commencement of the
Company’s previously announced exits of nonbranded foodservice
roast and ground coffee, and exiting a portion of the school
Smucker’s[sup.] Uncrustables[sup.] frozen
Ont., Canada, part (since 1935) of the city of Windsor.
Sandwich, town, England
town (1991 pop. 4,184), Kent, SE England, on the Stour River.
Decreases in certain
, river, 906 mi (1,458 km) long, rising in NE New Mexico. and flowing E across N Texas and central Oklahoma into the Arkansas River in E Oklahoma.
flour brands also contributed to the
Segment profit decreased $2.6 million, or 5 percent, in the fourth
quarter of 2013, compared to 2012, due primarily to lower volume and an
increase in marketing expense. Overall raw material costs were lower and
were partially offset by lower net price realization in the fourth
quarter of 2013, compared to the fourth quarter of 2012, and mix was
favorable. There was essentially no impact of unrealized mark-to-market
adjustments on derivative contracts in the fourth quarter of 2013,
compared to a loss of $1.2 million in the fourth quarter of 2012.
During the fourth quarter, the Company entered into a multi-year
licensing and distribution agreement with
former county, N England. In 1974, Cumberland became part of the nonmetropolitan county of Cumbria.
Cumberland, river, United States
(“Cumberland”) whereby, beginning in
2013, the Company
will market and distribute Cumberland’s branded tabletop sweeteners
(“Cumberland products”) to foodservice customers in the U.S.
and to retail and foodservice customers in
, independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of
. The Cumberland
products include the Sweet’N Low [sup.],
In The Raw [sup.], and Cumberland’s other “In The Raw”
brands. On a full-year basis, net sales of the Cumberland products are
To bring together, as cut edges of tissue.
1. Relating to the contact surfaces, either proximal or distal, of two adjacent teeth; proximate.
2. Close together.
Other Financial Results and Measures
Cash provided by operating activities increased $124.9 million
during 2013, primarily due to higher net income and less cash required
to fund working capital, notably inventory, compared to 2012. Capital
expenditures decreased $67.7 million during 2013, compared to 2012,
primarily due to the decrease in restructuring related projects, and
combined with the increase in cash provided by operating activities
resulted in a $192.7 million increase in free cash flow for the
Outlook For fiscal 2014, the Company expects net sales to be
comparable to 2013 reflecting the full-year impact of price declines
taken in 2013 and
in psychology: see defense mechanism.
of previously discussed products,
offset by net sales of Cumberland products and expected volume growth in
key categories. Non-GAAP net income per diluted share is expected in the
range of $5.65 to $5.75, which excludes special project costs of
approximately $0.20 per diluted share. The Company expects free cash
flow of approximately $600.0 million in fiscal 2014, reflecting capital
expenditures of approximately $270.0 million.
Conference Call The Company will conduct an earnings conference call
and webcast today,
, June 6, 2013, at 8:30 a.m. E.T. The webcast
can be accessed from the Company’s website at
www.smuckers.com/investors. For those unable to listen to the live
webcast, the webcast replay will be available at
www.smuckers.com/investors following the call. An audio replay will also
be available following the call until Thursday, June 13, 2013, and can
be accessed by dialing 888-203-1112 or 719-457-0820, with an access code
Non-GAAP Measures The Company uses non-GAAP financial measures
including: net sales adjusted for the noncomparable impact of
acquisition, divestiture, and foreign exchange; gross profit, operating
income, net income, and net income per diluted share, excluding special
earnings before interest, taxes, depreciation, and
(“EBITDA”); and free cash flow as key measures
for purposes of evaluating performance internally. The Company believes
that these measures provide useful information to investors because they
are the measures used to evaluate performance on a comparable
year-over-year basis. The special project costs relate to specific
restructuring, merger and integration, and pension settlement projects
that are each
a. 1. Nonrecurrent; as, the costs of a layoff are considered as a expense s>.
in nature and can significantly affect the
year-over-year assessment of operating results. These non-GAAP financial
measures are not intended to replace the presentation of financial
See generally accepted accounting principles (GAAP).
. Rather, the presentation of these
non-GAAP financial measures supplements other
Managed care A popular term for standards by which the quality of a product, service, or outcome of a particular form of Pt management is evaluated. See TQM.
used by management
to internally evaluate its businesses, and facilitates the comparison of
past and present operations and liquidity. These non-GAAP financial
measures may not be comparable to similar measures used by other
companies and may exclude certain nondiscretionary expenses and cash
payments. A reconciliation of certain non-GAAP financial measures to the
comparable GAAP financial measure for the current and prior year quarter
and year-to-date periods is included in the “Unaudited Non-GAAP
Financial Measures” tables.
About The J. M. Smucker Company For more than 115 years, The J. M.
Smucker Company has been committed to offering consumers quality
products that bring families together to share memorable meals and
moments. Today, Smucker is a leading marketer and manufacturer of fruit
spreads, retail packaged coffee, peanut butter, shortening and oils, ice
cream toppings, sweetened
, and health and natural foods
third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere.
. Its family of brands includes Smucker’s
[sup.], Folgers [sup.], Dunkin’ Donuts [sup.], Jif [sup.], Crisco
[sup.], Pillsbury [sup.], Eagle Brand [sup.], R.W.
[sup.], Hungry Jack [sup.], Cafe Bustelo [sup.], Cafe
n. 1. A conical loaf of sugar.
2. A gratuity given by tradesmen to customers settling their accounts.
[sup.] in the
officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world’s third largest country in population and the fourth largest country in area.
legendary hero of 12th-century England who robbed the rich to help the poor. Chivalrous, manly, fair, and always ready for a joke, Robin Hood reflected many of the ideals of the English yeoman.
[sup.], Five Roses [sup.],
Herbaceous plant (Dianthus caryophyllus) of the pink family, native to the Mediterranean, widely cultivated for its fringe-petaled, often spicy-smelling flowers.
Bick’s [sup.] in Canada. The Company remains rooted in the Basic
Beliefs of Quality, People, Ethics, Growth and Independence established
by its founder and
One that is named after another.
[From the phrase for the name's sake.]
more than a century ago. For more
information about the Company, visit www.smuckers.com.
The J. M. Smucker Company is the owner of all trademarks referenced
herein, except for the following, which are used under license:
Pillsbury [sup.] is a trademark of The
[sup.] is a trademark of Societe des Produits Nestle S.A.; Dunkin’
Donuts [sup.] is a registered trademark of DD IP Holder, LLC; and
Sweet’N Low [sup.], NatraTaste [sup.], Sugar In The Raw [sup.], and
the other “In The Raw” trademarks are registered trademarks of
Cumberland Packing Corp. and its affiliates.
Dunkin’ Donuts[sup.] brand is licensed to The J. M. Smucker
Company for packaged coffee products sold in retail channels such as
grocery stores, mass merchandisers, club stores, and drug stores. This
information does not
verb , concern, refer to, regard, be part of, belong to, apply to, bear on, befit, be relevant to, be appropriate to, appertain to
Dunkin’ Donuts [sup.] coffee or
other products for sale in Dunkin’ Donuts [sup.] restaurants. K-Cup
[sup.] and K-Cups [sup.] are trademarks of
The J. M. Smucker Company Forward-Looking Statements This press
release contains forward-looking statements, such as projected net
sales, operating results, earnings, and cash flows, that are subject to
known and unknown risks and uncertainties that could cause actual
results to differ materially from any future results, performance, or
achievements expressed or
by those forward-looking statements.
Readers should understand that the risks, uncertainties, factors, and
assumptions listed and discussed in this press release, including the
following important factors and assumptions, could affect the future
results of the Company and could cause actual results to differ
materially from those expressed in the forward-looking statements:
of commodity markets from which raw materials,
particularly green coffee
1. A prostrate southern Brazilian plant (Arachis hypogaea) widely cultivated in tropical and warm temperate regions, having yellow flowers on stalks that bend over so that the seed pods ripen underground.
n. 1. an oil obtained from the soybean (), rich in protein, fats, sterols, and phospholipids, used as a food and in paints and varnishes and in various industrial applications; –
cereal plant of the genus Triticum of the family Gramineae (grass family), a major food and an important commodity on the world grain market.
Wheat Varieties and Their Uses
corn, and sugar, are procured and the related impact on costs;
* risks associated with derivative and purchasing strategies
employed by the Company to manage commodity pricing risks, including the
risk that such strategies could result in significant losses and
adversely impact the Company’s liquidity;
* crude oil price trends and their impact on transportation, energy,
and packaging costs;
* the ability to successfully implement and realize the full benefit
of price changes that are intended to ultimately fully recover cost
including the competitive, retailer, and consumer response, and the
impact of the timing of the price changes to profits and cash flow in a
* the success and cost of introducing new products and the
* the success and cost of marketing and sales programs and
strategies intended to promote growth in the Company’s
* general competitive activity in the market, including
competitors’ pricing practices and promotional spending levels;
* the ability of the Company to successfully integrate acquired and
merged businesses in a timely and cost-effective manner;
* the successful completion of the Company’s restructuring
programs and the ability to realize anticipated savings and other
potential benefits within the time frames currently contemplated;
* the impact of food security concerns involving either the
Company’s or its competitors’ products;
* the impact of accidents and natural disasters, including crop
failures and storm damage;
* the concentration of certain of the Company’s businesses with
key customers and suppliers, including single-source suppliers of
certain raw materials, such as packaging for its Folgers [sup.] coffee
products, and finished goods, such as K-Cups [sup.], and the ability to
manage and maintain key relationships;
* the loss of significant customers, a substantial reduction in
orders from these customers, or the
in law, settlement of the liabilities of a person or organization wholly or partially unable to meet financial obligations. The purposes are to distribute, through a court-appointed receiver, the bankrupt’s assets equitably among creditors and, in most
of any such customer;
* changes in consumer coffee preferences and other factors affecting
the coffee business, which represents a substantial portion of the
* a change in outlook or
in the Company’s public
credit ratings by a rating agency;
* the ability of the Company to obtain any required financing on a
timely basis and on acceptable terms;
* the timing and amount of capital expenditures, share repurchases,
and restructuring costs;
* impairments in the
of goodwill, other intangible
assets, or other long-lived assets or changes in useful lives of other
* the impact of new or changes to existing governmental laws and
regulations and their application;
* the impact of future legal,
tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates
1. To control or direct according to rule, principle, or law.
, or market measures
regarding climate change;
* the outcome of current and future tax examinations, changes in tax
laws, and other tax matters, and their related impact on the
Company’s tax positions;
* foreign currency and interest rate fluctuations;
* political or economic
/dis·rup·tion/ () a morphologic defect resulting from the extrinsic breakdown of, or interference with, a developmental process.
* other factors affecting share prices and capital markets
* risks related to other factors described under “Risk
Factors” in other reports and statements filed by the Company with
the Securities and Exchange Commission, including its most recent Annual
Report on Form 10-K.
Readers are cautioned not to unduly rely on such forward-looking
statements, which speak only as of the date made, when evaluating the
information presented in this press release. The Company does not
undertake any obligation to update or revise these forward-looking
statements to reflect new events or
SOURCE The J. M. Smucker Company