ORRVILLE, Ohio, Feb. 23, 2016 /PRNewswire/ -- The J. M.
Smucker Company (NYSE: SJM) today announced results for the third
quarter ended January 31, 2016, of
its 2016 fiscal year. All comparisons are to the third
quarter of the prior fiscal year, unless otherwise noted.
EXECUTIVE SUMMARY
- Net sales increased $533.9
million, or 37 percent, reflecting the contribution of Big
Heart Pet Brands ("Big Heart"), acquired in fiscal 2015.
- Net income per diluted share was $1.55, a decrease of 2 percent, as the benefit
from Big Heart operations and the gain on the U.S. canned milk
divestiture were offset by merger and integration costs, higher
interest expense, and the impact of additional shares
outstanding.
- Non-GAAP income per diluted share was $1.76, an increase of 14 percent. Adjusted
non-GAAP income per diluted share, which excludes amortization, was
$2.05, an increase of 21
percent. Both measures include a $0.14 per share gain on the U.S. canned milk
divestiture.
- Free cash flow was $498.9
million, an increase of 32 percent.
- The Company updated its fiscal 2016 earnings outlook to account
for the gain on the U.S. canned milk divestiture, with non-GAAP
income per diluted share expected to range from $5.84 to $5.94 and its adjusted non-GAAP income
per diluted share expected to range from $6.99 to $7.09.
CHIEF EXECUTIVE OFFICER REMARKS
"We delivered another quarter of solid financial results which,
most notably, was attributable to the ongoing momentum for our
coffee business," said Richard
Smucker, Chief Executive Officer. "Our overall
performance continues to reflect contributions from our key growth
initiatives for the fiscal year. These include launching a
number of on-trend products such as Dunkin'
Donuts® K-Cup® pods, providing consumers
lower pricing on Folgers® roast and ground
offerings, expanding distribution for the Natural
Balance® brand into the largest pet specialty
retailer, and delivering on our cost savings and working capital
initiatives. In addition, we are now just a week away from a
key integration milestone related to the Big Heart Pet Brands
acquisition, and all activities remain on track. As we move
ahead, our teams remain focused on executing our long-term strategy
to deliver continued growth."
THIRD QUARTER CONSOLIDATED RESULTS
|
|
Three Months Ended
January 31,
|
|
|
|
|
|
|
|
% Increase
|
|
|
|
2016
|
|
2015
|
|
(Decrease)
|
|
|
|
(Dollars and shares
in millions, except per share data)
|
|
|
|
|
|
|
|
|
|
Net
sales
|
$
1,973.9
|
|
$
1,440.0
|
|
37%
|
|
|
|
|
|
|
|
|
|
Operating
income
|
$
318.3
|
|
$
255.1
|
|
25%
|
|
Non-GAAP operating
income
|
356.1
|
|
248.0
|
|
44%
|
|
|
|
|
|
|
|
|
|
Net income per
common share - assuming dilution
|
$
1.55
|
|
$
1.58
|
|
(2%)
|
|
Non-GAAP income per
common share - assuming dilution
|
1.76
|
|
1.54
|
|
14%
|
|
Adjusted non-GAAP
income per common share - assuming dilution
|
2.05
|
|
1.70
|
|
21%
|
|
|
|
|
|
|
|
|
|
Weighted-average
shares outstanding - assuming dilution
|
119.7
|
|
101.8
|
|
18%
|
|
|
Results for the
period ended January 31, 2016, include the operations of Big Heart,
which was acquired after the comparable prior year period, and the
impact of the U.S. canned milk divestiture, which closed on
December 31, 2015. Adjusted non-GAAP income per diluted share
excludes the noncash impact of amortization.
|
Net sales increased reflecting the contribution of $580.3 million from Big Heart. Excluding
Big Heart, the impact from foreign currency exchange, and the
impact of the U.S. canned milk divestiture, net sales declined
$17.9 million, or 1 percent.
Net price realization was 2 percentage points lower, reflecting
lower net pricing on coffee. Favorable volume/mix contributed
1 percentage point to net sales, as the contribution from
Dunkin' Donuts® K-Cup® pods and
Smucker's® Uncrustables® frozen
sandwiches was mostly offset by declines in several other brands,
notably Folgers® and
Jif®.
Gross profit increased $240.9
million, or 46 percent, primarily due to the addition of Big
Heart. Excluding Big Heart, gross profit was higher, driven
by Dunkin' Donuts® K-Cup®
pods. The impact of lower net pricing was more than offset by
a reduction in commodity costs, primarily attributed to green
coffee.
Selling, distribution, and administrative expenses increased
$143.8 million, or 61 percent,
primarily driven by the addition of Big Heart and a combined 31
percent increase in marketing expense within the U.S. Retail
Consumer Foods and Coffee segments. Amortization expense also
increased, driven by the Big Heart acquisition.
Operating income increased $63.2
million, or 25 percent, reflecting the addition of Big Heart
and the gain on the U.S. canned milk divestiture, partially
offset by an increase in merger and integration costs.
On a non-GAAP basis, gross profit increased $250.3 million, or 49 percent, and operating
income increased $108.1 million, or
44 percent.
Net interest expense increased $26.8
million, due to the impact of acquisition-related debt
issued in the fourth quarter of 2015. Income taxes increased
$12.5 million due to an increase in
income before income taxes and a slightly higher effective tax
rate. The quarterly effective tax rate increased from 32.5
percent to 32.7 percent.
For the quarter, cash provided by operating activities was
$542.3 million, compared to
$427.7 million in the prior
year. The change in operating cash flow was primarily
attributed to an increase in net income adjusted for noncash items,
notably depreciation and amortization, and a decrease in
working capital, driven by the timing of certain accrued
liabilities. These items were partially offset by
the benefit of a $53.5 million
interest rate swap settlement in the prior year.
FULL-YEAR OUTLOOK
The Company updated its full-year
fiscal 2016 guidance as provided below:
|
|
|
|
Current
|
Previous*
|
Net sales
|
$7.8
billion
|
$7.9
billion
|
Non-GAAP income per
common share - assuming dilution
|
$5.84 -
$5.94
|
$5.70 -
$5.80
|
Adjusted non-GAAP
income per common share - assuming dilution
|
$6.99 -
$7.09
|
$6.85 -
$6.95
|
Free cash
flow
|
$975
million
|
$925
million
|
Capital
expenditures
|
$240
million
|
$220
million
|
|
|
|
*As of November 19,
2015
|
|
|
Net sales are expected to increase approximately 37 percent over
2015 reflecting a full-year contribution from Big Heart.
Included in the earnings guidance range is $35 million of synergies related to the Big Heart
acquisition with approximately $15
million expected to be realized in the fourth quarter of the
fiscal year. The full-year synergy estimate of $35 million is an increase over the previous
guidance of $25 million. The
revised earnings guidance reflects the $0.14 per share gain on the U.S. canned milk
divestiture, but excludes an estimated noncash deferred tax benefit
of approximately $50 million related
to the integration of Big Heart into the Company, which is expected
to be recognized in the fourth quarter of this fiscal year.
THIRD QUARTER SEGMENT RESULTS
Dollar amounts in the
segment tables below are reported in millions.
U.S. Retail Coffee
|
|
Net
|
|
Segment
|
|
Segment
|
|
|
Sales
|
|
Profit
|
|
Profit
Margin
|
FY16 Q3
Results
|
|
$575.5
|
|
$175.9
|
|
30.6%
|
Change vs prior
year
|
|
1%
|
|
17%
|
|
430bps
|
Segment net sales increased $3.7
million. Favorable volume/mix contributed 5 percentage
points of growth, driven by Dunkin'
Donuts® K-Cup® pods and
Folgers® mainstream roast and ground offerings,
partially offset by declines in
Folgers® K-Cup® pods. The
favorable volume/mix was mostly offset by lower net price
realization on Folgers® mainstream roast and
ground offerings. Segment profit increased $25.4 million reflecting the contribution from
Dunkin' Donuts® K-Cup®
pods, favorable manufacturing overhead costs, and the net
benefit of lower commodity costs and pricing. These factors
were slightly offset by an increase in marketing expense.
U.S. Retail Consumer Foods
|
|
Net
|
|
Segment
|
|
Segment
|
|
|
Sales
|
|
Profit
|
|
Profit
Margin
|
FY16 Q3
Results
|
|
$569.8
|
|
$128.0
|
|
22.5%
|
Change vs prior
year
|
|
(5%)
|
|
6%
|
|
240bps
|
Segment net sales decreased $31.0
million, partially reflecting the impact of $9.4 million of noncomparable net sales in the
prior year related to the divested U.S. canned milk brands.
Unfavorable volume/mix contributed 3 percentage points to the net
sales decline, driven by Jif® peanut butter
and Pillsbury® baking mixes and frosting, and
more than offset growth in Smucker's®
Uncrustables® frozen sandwiches. Net price
realization was lower, reflecting double-digit price declines on
the Pillsbury® brand in July 2015. Segment
profit increased $7.3 million,
benefiting from a $25.3 million gain
on the U.S. canned milk divestiture. An increase in marketing
expense combined with lower net price realization and higher
manufacturing overhead costs offset much of the gain on the
divestiture.
U.S. Retail Pet Foods
|
|
Net
|
|
Segment
|
|
Segment
|
|
|
Sales
|
|
Profit
|
|
Profit
Margin
|
FY16 Q3
Results
|
|
$570.9
|
|
$97.2
|
|
17.0%
|
The segment contributed net sales of $570.9 million, representing a low single-digit
percent decline compared to Big Heart's results for the third
quarter of the prior year, which were reported under previous
ownership. The net sales decline was driven by mainstream pet
food brands, notably Kibbles 'n Bits®. This
offset the high single-digit growth in pet snacks and premium pet
food brands, led by Milk-Bone® dog snacks and the
Natural Balance® brand. Profit
decreased by over $40 million from
the comparable measure in the prior year. Approximately 75
percent of the decline was driven by the combination of a planned
increase in marketing expense, in support of new item launches, and
higher amortization expense related to the acquisition.
International and Foodservice
|
|
Net
|
|
Segment
|
|
Segment
|
|
|
Sales
|
|
Profit
|
|
Profit
Margin
|
FY16 Q3
Results
|
|
$257.7
|
|
$43.3
|
|
16.8%
|
Change vs prior
year
|
|
(4%)
|
|
4%
|
|
120bps
|
Net sales decreased $9.7 million, as an
unfavorable $17.5 million impact of foreign currency
exchange more than offset a $9.4 million contribution
from Big Heart. Volume/mix was favorable, contributing 1
percentage point of growth to net sales, offset by lower net price
realization. Segment profit increased $1.6 million,
benefiting from favorable volume/mix and a decrease in selling
expense. These items were mostly offset by higher costs
attributed to sourcing certain products from the U.S., reflecting
the impact of a weaker Canadian dollar compared to a year ago.
Conference Call
The Company will conduct an earnings
conference call and webcast today, February
23, 2016, beginning at 8:30 a.m.
Eastern Time. To access the webcast please visit
jmsmucker.com/investor-relations.
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 risks and
uncertainties that could cause actual results to differ materially
from future results expressed or implied by those forward-looking
statements. The risks, uncertainties, important factors, and
assumptions listed and discussed in this press release, that could
cause actual results to differ materially from those expressed
include: the ability to successfully integrate acquired businesses
in a timely and cost-effective manner and retain key suppliers,
customers, and employees; the ability to achieve synergies and cost
savings related to the Big Heart acquisition in the amounts and
within the time frames currently anticipated; the ability to
generate sufficient cash flow to meet the Company's deleveraging
objectives; volatility of commodity, energy, and other input costs;
risks associated with derivative and purchasing strategies employed
to manage commodity pricing risks; the availability of reliable
transportation on acceptable terms; the ability to implement and
realize the full benefit of price changes, and the impact of the
timing of the price changes to profits and cash flow in a
particular period; the success and cost of marketing and sales
programs and strategies intended to promote growth in the
businesses, including the introduction of new products; general
competitive activity in the market, including competitors' pricing
practices and promotional spending levels; the impact of food
security concerns involving either the Company's or its
competitors' products; the impact of accidents, extreme weather,
and natural disasters; the concentration of certain of the
Company's businesses with key customers and suppliers, including
single-source suppliers of certain raw materials and finished
goods, and the ability to manage and maintain key relationships;
the timing and amount of capital expenditures and share
repurchases; impairments in the carrying value of goodwill, other
intangible assets, or other long-lived assets or changes in useful
lives of other intangible assets; the impact of new or changes to
existing governmental laws and regulations and their application;
the outcome of tax examinations, changes in tax laws, and other tax
matters; foreign currency and interest rate fluctuations; and risks
related to other factors described under "Risk Factors" in other
reports and statements filed with the Securities and Exchange
Commission, including the most recent Annual Report on Form 10-K.
The Company undertakes no obligation to update or revise these
forward-looking statements, which speak only as of the date made,
to reflect new events or circumstances.
About The J. M. Smucker Company
For nearly 120 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 consumer food and beverage products and pet food
and pet snacks in North America.
In consumer foods and beverages, its brands include
Smucker's®, Folgers®,
Jif®, Dunkin' Donuts®, Crisco®,
Pillsbury®, R.W. Knudsen Family®, Hungry
Jack®, Café Bustelo®, Martha White®, truRoots®,
Sahale Snacks®, Robin
Hood®, and Bick's®.
In pet food and pet snacks, its brands include Meow
Mix®, Milk-Bone®, Kibbles 'n
Bits®, Natural Balance®, and
9Lives®. The Company remains rooted in the
Basic Beliefs of Quality, People, Ethics, Growth, and
Independence established by its founder and namesake more
than a century ago. For more information about the Company,
visit jmsmucker.com.
The J. M. Smucker Company is the owner of all trademarks
referenced herein, except for the following, which are used under
license: Pillsbury® is a trademark of The
Pillsbury Company, LLC and Dunkin' Donuts® is a
registered trademark of DD IP Holder, LLC.
Dunkin' Donuts® 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 pertain to
Dunkin' Donuts® coffee or other products for sale
in Dunkin' Donuts® restaurants.
K-Cup® is a trademark of Keurig Green Mountain,
Inc., used with permission.
The J. M. Smucker
Company
|
Unaudited Condensed
Consolidated Statements of Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
January 31,
|
|
Nine Months Ended
January 31,
|
|
|
|
|
|
|
% Increase
|
|
|
|
|
|
% Increase
|
|
|
2016
|
|
2015
|
|
(Decrease)
|
|
2016
|
|
2015
|
|
(Decrease)
|
|
|
(Dollars in millions,
except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
$
1,973.9
|
|
$
1,440.0
|
|
37%
|
|
$
6,003.6
|
|
$
4,245.6
|
|
41%
|
Cost of products
sold
|
1,210.1
|
|
917.1
|
|
32%
|
|
3,723.8
|
|
2,707.5
|
|
38%
|
Gross
Profit
|
763.8
|
|
522.9
|
|
46%
|
|
2,279.8
|
|
1,538.1
|
|
48%
|
|
Gross
margin
|
38.7%
|
|
36.3%
|
|
|
|
38.0%
|
|
36.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling,
distribution, and administrative
expenses
|
381.1
|
|
237.3
|
|
61%
|
|
1,158.5
|
|
743.1
|
|
56%
|
Amortization
|
52.2
|
|
25.2
|
|
107%
|
|
158.2
|
|
75.3
|
|
110%
|
Other special project
costs
|
41.4
|
|
5.9
|
|
n/m
|
|
94.9
|
|
17.3
|
|
n/m
|
Other operating
(income) expense - net
|
(29.2)
|
|
(0.6)
|
|
n/m
|
|
(31.0)
|
|
0.9
|
|
n/m
|
Operating
Income
|
318.3
|
|
255.1
|
|
25%
|
|
899.2
|
|
701.5
|
|
28%
|
|
Operating
margin
|
16.1%
|
|
17.7%
|
|
|
|
15.0%
|
|
16.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense -
net
|
(43.6)
|
|
(16.8)
|
|
160%
|
|
(130.6)
|
|
(50.4)
|
|
159%
|
Other income
(expense) - net
|
0.6
|
|
0.1
|
|
n/m
|
|
(0.9)
|
|
1.7
|
|
(153%)
|
Income Before
Income Taxes
|
275.3
|
|
238.4
|
|
15%
|
|
767.7
|
|
652.8
|
|
18%
|
Income tax
expense
|
90.0
|
|
77.5
|
|
16%
|
|
270.0
|
|
217.6
|
|
24%
|
Net
Income
|
$
185.3
|
|
$
160.9
|
|
15%
|
|
$
497.7
|
|
$
435.2
|
|
14%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per
common share
|
$
1.55
|
|
$
1.58
|
|
(2%)
|
|
$
4.16
|
|
$
4.28
|
|
(3%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per
common share –
|
|
|
|
|
|
|
|
|
|
|
|
|
assuming
dilution
|
$
1.55
|
|
$
1.58
|
|
(2%)
|
|
$
4.16
|
|
$
4.28
|
|
(3%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends declared
per common share
|
$
0.67
|
|
$
0.64
|
|
5%
|
|
$
2.01
|
|
$
1.92
|
|
5%
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
shares outstanding
|
119,682,362
|
|
101,800,825
|
|
18%
|
|
119,658,138
|
|
101,796,891
|
|
18%
|
Weighted-average
shares outstanding –
|
|
|
|
|
|
|
|
|
|
|
|
assuming
dilution
|
119,734,947
|
|
101,801,500
|
|
18%
|
|
119,683,493
|
|
101,801,023
|
|
18%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The J. M. Smucker
Company
|
Unaudited Condensed
Consolidated Balance Sheets
|
|
|
|
|
January 31,
2016
|
|
April 30,
2015
|
|
January 31,
2015
|
|
|
|
(Dollars in
millions)
|
Assets
|
|
|
|
|
|
Current
Assets:
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
140.5
|
|
$
125.6
|
|
$
111.7
|
|
Trade receivables,
less allowance for doubtful accounts
|
503.8
|
|
430.1
|
|
373.9
|
|
Inventories
|
942.0
|
|
1,163.6
|
|
944.2
|
|
Other current
assets
|
212.1
|
|
340.9
|
|
85.8
|
|
|
Total Current
Assets
|
1,798.4
|
|
2,060.2
|
|
1,515.6
|
|
|
|
|
|
|
|
|
Property, Plant,
and Equipment - Net
|
1,623.9
|
|
1,678.3
|
|
1,323.3
|
|
|
|
|
|
|
|
|
Other Noncurrent
Assets:
|
|
|
|
|
|
|
Goodwill
|
5,944.9
|
|
6,011.6
|
|
3,134.9
|
|
Other intangible
assets - net
|
6,715.0
|
|
6,950.3
|
|
2,973.9
|
|
Other noncurrent
assets
|
199.3
|
|
182.2
|
|
141.8
|
|
|
Total Other
Noncurrent Assets
|
12,859.2
|
|
13,144.1
|
|
6,250.6
|
Total
Assets
|
$
16,281.5
|
|
$
16,882.6
|
|
$
9,089.5
|
|
|
|
|
|
|
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
|
|
Current
Liabilities:
|
|
|
|
|
|
|
Accounts
payable
|
$
371.0
|
|
$
402.8
|
|
$
232.3
|
|
Current portion of
long-term debt
|
-
|
|
-
|
|
24.0
|
|
Short-term
borrowings
|
138.0
|
|
226.0
|
|
264.0
|
|
Other current
liabilities
|
497.0
|
|
393.8
|
|
189.8
|
|
|
Total Current
Liabilities
|
1,006.0
|
|
1,022.6
|
|
710.1
|
|
|
|
|
|
|
|
|
Noncurrent
Liabilities:
|
|
|
|
|
|
|
Long-term
debt
|
5,146.3
|
|
5,944.9
|
|
1,885.7
|
|
Other noncurrent
liabilities
|
2,803.7
|
|
2,828.2
|
|
1,269.5
|
|
|
Total Noncurrent
Liabilities
|
7,950.0
|
|
8,773.1
|
|
3,155.2
|
|
|
|
|
|
|
|
|
Shareholders'
Equity
|
7,325.5
|
|
7,086.9
|
|
5,224.2
|
Total Liabilities
and Shareholders' Equity
|
$
16,281.5
|
|
$
16,882.6
|
|
$
9,089.5
|
|
|
|
|
|
|
|
|
The J. M. Smucker
Company
|
Unaudited Condensed
Consolidated Statements of Cash Flow
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
January 31,
|
|
Nine Months Ended
January 31,
|
|
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
(Dollars in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Activities
|
|
|
|
|
|
|
|
|
Net income
|
$
185.3
|
|
$
160.9
|
|
$
497.7
|
|
$
435.2
|
|
Adjustments to
reconcile net income to net cash
|
|
|
|
|
|
|
|
|
provided by operating
activities:
|
|
|
|
|
|
|
|
|
|
Depreciation
|
55.1
|
|
37.9
|
|
165.5
|
|
114.1
|
|
|
Amortization
|
52.2
|
|
25.2
|
|
158.2
|
|
75.3
|
|
|
Other noncash
adjustments
|
0.9
|
|
(0.4)
|
|
(1.5)
|
|
(0.6)
|
|
|
Share-based
compensation expense
|
10.5
|
|
3.8
|
|
26.9
|
|
15.9
|
|
|
Gain on
divestiture
|
(25.3)
|
|
-
|
|
(25.3)
|
|
-
|
|
|
Loss on disposal of
assets - net
|
1.2
|
|
2.3
|
|
3.8
|
|
4.3
|
|
|
Defined benefit
pension contributions
|
(0.6)
|
|
(1.2)
|
|
(2.4)
|
|
(4.3)
|
|
|
Changes in assets and
liabilities, net of effect
|
|
|
|
|
|
|
|
|
|
from businesses
acquired:
|
|
|
|
|
|
|
|
|
|
|
Trade
receivables
|
99.5
|
|
75.4
|
|
(79.0)
|
|
(65.3)
|
|
|
|
Inventories
|
84.5
|
|
113.9
|
|
192.1
|
|
(16.5)
|
|
|
|
Accounts payable and
accrued items
|
95.9
|
|
(45.8)
|
|
93.3
|
|
(129.4)
|
|
|
|
Proceeds from
settlement of interest rate swaps
|
-
|
|
53.5
|
|
-
|
|
53.5
|
|
|
|
Income and other
taxes
|
0.4
|
|
14.3
|
|
66.7
|
|
8.2
|
|
|
Other -
net
|
(17.3)
|
|
(12.1)
|
|
26.8
|
|
21.2
|
Net Cash Provided
by Operating Activities
|
542.3
|
|
427.7
|
|
1,122.8
|
|
511.6
|
|
|
|
|
|
|
|
|
|
|
|
Investing
Activities
|
|
|
|
|
|
|
|
|
Business acquired,
net of cash acquired
|
-
|
|
(0.2)
|
|
7.9
|
|
(80.5)
|
|
Equity investment in
affiliate
|
(16.0)
|
|
-
|
|
(16.0)
|
|
-
|
|
Additions to
property, plant, and equipment
|
(43.4)
|
|
(48.4)
|
|
(160.8)
|
|
(162.1)
|
|
Proceeds from
divestiture
|
193.7
|
|
-
|
|
193.7
|
|
-
|
|
Proceeds from
disposal of property, plant, and equipment
|
-
|
|
0.4
|
|
0.2
|
|
1.6
|
|
Other -
net
|
(7.6)
|
|
(10.7)
|
|
5.7
|
|
(12.0)
|
Net Cash Provided
by (Used for) Investing Activities
|
126.7
|
|
(58.9)
|
|
30.7
|
|
(253.0)
|
|
|
|
|
|
|
|
|
|
|
|
Financing
Activities
|
|
|
|
|
|
|
|
|
Short-term
(repayments) borrowings - net
|
(232.0)
|
|
(281.9)
|
|
(88.0)
|
|
15.6
|
|
Repayments of
long-term debt
|
(350.0)
|
|
-
|
|
(800.0)
|
|
(100.0)
|
|
Quarterly dividends
paid
|
(80.0)
|
|
(65.1)
|
|
(236.5)
|
|
(189.0)
|
|
Purchase of treasury
shares
|
(0.4)
|
|
(4.0)
|
|
(7.8)
|
|
(15.3)
|
|
Other -
net
|
0.1
|
|
0.9
|
|
2.6
|
|
10.3
|
Net Cash Used for
Financing Activities
|
(662.3)
|
|
(350.1)
|
|
(1,129.7)
|
|
(278.4)
|
Effect of exchange
rate changes on cash
|
(5.2)
|
|
(12.3)
|
|
(8.9)
|
|
(22.0)
|
Net increase
(decrease) in cash and cash equivalents
|
1.5
|
|
6.4
|
|
14.9
|
|
(41.8)
|
Cash and cash
equivalents at beginning of period
|
139.0
|
|
105.3
|
|
125.6
|
|
153.5
|
Cash and Cash
Equivalents at End of Period
|
$
140.5
|
|
$
111.7
|
|
$
140.5
|
|
$
111.7
|
|
|
|
|
|
|
|
|
|
|
|
The J. M. Smucker
Company
|
Unaudited
Supplemental Schedule
|
|
|
|
Three Months Ended
January 31,
|
|
Nine Months Ended
January 31,
|
|
|
|
|
% of
|
|
|
|
% of
|
|
|
|
% of
|
|
|
|
% of
|
|
|
2016
|
|
Net Sales
|
|
2015
|
|
Net Sales
|
|
2016
|
|
Net Sales
|
|
2015
|
|
Net Sales
|
|
|
(Dollars in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
$1,973.9
|
|
|
|
$1,440.0
|
|
|
|
$6,003.6
|
|
|
|
$4,245.6
|
|
|
Selling,
distribution, and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
administrative
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marketing
|
120.7
|
|
6.1%
|
|
60.1
|
|
4.2%
|
|
358.5
|
|
6.0%
|
|
205.1
|
|
4.8%
|
|
Selling
|
73.8
|
|
3.7%
|
|
51.0
|
|
3.5%
|
|
244.9
|
|
4.1%
|
|
153.8
|
|
3.6%
|
|
Distribution
|
61.3
|
|
3.1%
|
|
37.9
|
|
2.6%
|
|
185.3
|
|
3.1%
|
|
117.6
|
|
2.8%
|
|
General and
administrative
|
125.3
|
|
6.3%
|
|
88.3
|
|
6.1%
|
|
369.8
|
|
6.2%
|
|
266.6
|
|
6.3%
|
Total selling,
distribution, and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
administrative
expenses
|
$ 381.1
|
|
19.3%
|
|
$ 237.3
|
|
16.5%
|
|
$1,158.5
|
|
19.3%
|
|
$ 743.1
|
|
17.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts may not add
due to rounding.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The J. M. Smucker
Company
|
Unaudited Reportable
Segments
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
January 31,
|
|
Nine Months Ended
January 31,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
(Dollars in
millions)
|
|
|
|
|
|
|
|
|
|
Net sales:
|
|
|
|
|
|
|
|
|
U.S. Retail
Coffee
|
$
575.5
|
|
$
571.8
|
|
$
1,726.6
|
|
$
1,607.5
|
|
U.S. Retail Consumer
Foods
|
569.8
|
|
600.8
|
|
1,796.0
|
|
1,847.6
|
|
U.S. Retail Pet
Foods
|
570.9
|
|
-
|
|
1,687.5
|
|
-
|
|
International and
Foodservice
|
257.7
|
|
267.4
|
|
793.5
|
|
790.5
|
Total net
sales
|
$
1,973.9
|
|
$
1,440.0
|
|
$
6,003.6
|
|
$
4,245.6
|
|
|
|
|
|
|
|
|
|
Segment
profit:
|
|
|
|
|
|
|
|
|
U.S. Retail
Coffee
|
$
175.9
|
|
$
150.5
|
|
$
492.7
|
|
$
439.3
|
|
U.S. Retail Consumer
Foods
|
128.0
|
|
120.7
|
|
370.9
|
|
364.4
|
|
U.S. Retail Pet
Foods
|
97.2
|
|
-
|
|
275.4
|
|
-
|
|
International and
Foodservice
|
43.3
|
|
41.7
|
|
123.8
|
|
109.8
|
Total segment
profit
|
$
444.4
|
|
$
312.9
|
|
$
1,262.8
|
|
$
913.5
|
|
Interest expense -
net
|
(43.6)
|
|
(16.8)
|
|
(130.6)
|
|
(50.4)
|
|
Unallocated
derivative gains (losses)
|
6.7
|
|
13.4
|
|
2.7
|
|
(0.4)
|
|
Cost of products sold
- special project costs
|
(3.1)
|
|
(0.4)
|
|
(9.2)
|
|
(1.1)
|
|
Other special project
costs
|
(41.4)
|
|
(5.9)
|
|
(94.9)
|
|
(17.3)
|
|
Corporate
administrative expenses
|
(88.3)
|
|
(64.9)
|
|
(262.2)
|
|
(193.2)
|
|
Other income
(expense) - net
|
0.6
|
|
0.1
|
|
(0.9)
|
|
1.7
|
Income before income
taxes
|
$
275.3
|
|
$
238.4
|
|
$
767.7
|
|
$
652.8
|
|
|
|
|
|
|
|
|
|
Segment profit
margin:
|
|
|
|
|
|
|
|
|
U.S. Retail
Coffee
|
30.6%
|
|
26.3%
|
|
28.5%
|
|
27.3%
|
|
U.S. Retail Consumer
Foods
|
22.5%
|
|
20.1%
|
|
20.7%
|
|
19.7%
|
|
U.S. Retail Pet
Foods
|
17.0%
|
|
-
|
|
16.3%
|
|
-
|
|
International and
Foodservice
|
16.8%
|
|
15.6%
|
|
15.6%
|
|
13.9%
|
|
|
|
|
|
|
|
|
|
Non-GAAP Measures
The Company uses non-GAAP financial
measures including: net sales excluding the noncomparable impact of
acquisitions, divesture, and foreign currency exchange; non-GAAP
gross profit, operating income, income, and income per diluted
share; adjusted non-GAAP income and income per diluted share;
earnings before interest, taxes, depreciation, and amortization
("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. Non-GAAP profit measures exclude
certain items affecting comparability. These items can
significantly affect the year-over-year assessment of operating
results and include specific restructuring and merger and
integration projects ("special project costs") that are each
nonrecurring in nature as well as unallocated gains and losses on
commodity and foreign currency exchange derivatives ("unallocated
derivative gains and losses"). Adjusted non-GAAP income per
diluted share further excludes the noncash impact of
amortization. The Company believes this provides investors an
additional metric to evaluate performance and the ability to
generate cash necessary to achieve its deleveraging
objectives. These non-GAAP financial measures are not
intended to replace the presentation of financial results in
accordance with U.S. generally accepted accounting principles
("GAAP"). Rather, the presentation of these non-GAAP
financial measures supplements other metrics 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 periods is included in the
"Unaudited Non-GAAP Financial Measures" tables. The Company
has also provided a reconciliation of non-GAAP financial measures
for its full-year outlook. As the amount of unallocated
derivative gains and losses varies depending on market conditions
and levels of derivative transactions with respect to a particular
fiscal year, it is not determinable on a forward-looking basis and
no guidance has been provided.
The J. M. Smucker
Company
|
Unaudited Non-GAAP
Financial Measures
|
|
|
|
|
Three Months Ended
January 31,
|
|
Nine Months Ended
January 31,
|
|
|
|
|
|
|
|
Increase
|
|
|
|
|
|
|
|
Increase
|
|
|
|
|
|
2016
|
|
2015
|
|
(Decrease)
|
|
%
|
|
2016
|
|
2015
|
|
(Decrease)
|
|
%
|
|
|
|
(Dollars in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
reconciliation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
$ 1,973.9
|
|
$ 1,440.0
|
|
$ 533.9
|
|
37%
|
|
$ 6,003.6
|
|
$ 4,245.6
|
|
$ 1,758.0
|
|
41%
|
|
|
Big Heart
acquisition
|
(580.3)
|
|
-
|
|
(580.3)
|
|
(40%)
|
|
(1,718.3)
|
|
-
|
|
(1,718.3)
|
|
(40%)
|
|
|
Sahale
acquisition
|
-
|
|
-
|
|
-
|
|
-
|
|
(12.0)
|
|
-
|
|
(12.0)
|
|
-
|
|
|
Milk
divestiture
|
-
|
|
(11.0)
|
|
11.0
|
|
1%
|
|
-
|
|
(11.0)
|
|
11.0
|
|
-
|
|
Net sales excluding
acquisitions
and divestiture
|
$ 1,393.6
|
|
$ 1,429.0
|
|
$ (35.4)
|
|
(2%)
|
|
$ 4,273.3
|
|
$ 4,234.6
|
|
$ 38.7
|
|
1%
|
|
|
Foreign currency
exchange
|
17.5
|
|
-
|
|
17.5
|
|
1%
|
|
52.8
|
|
-
|
|
52.8
|
|
1%
|
|
Net sales excluding
acquisitions, divestiture,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and foreign currency
exchange
|
$ 1,411.1
|
|
$ 1,429.0
|
|
$ (17.9)
|
|
(1%)
|
|
$ 4,326.1
|
|
$ 4,234.6
|
|
$ 91.5
|
|
2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts may not add
due to rounding.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales excluding
acquisitions and divestiture have been adjusted for the
noncomparable impact of the Big Heart and Sahale Snacks, Inc.
("Sahale") acquisitions and the U.S. canned milk
divestiture. Big Heart was acquired after the comparable
prior year period, Sahale was acquired on September 2, 2014, and
the U.S. canned milk business was divested on December 31,
2015.
|
The J. M. Smucker
Company
|
Unaudited Non-GAAP
Financial Measures
|
|
|
|
|
Three Months Ended
January 31,
|
|
Nine Months Ended
January 31,
|
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
(Dollars in millions,
except per share data)
|
|
|
|
|
|
|
|
|
|
|
Gross profit
reconciliation:
|
|
|
|
|
|
|
|
|
Gross
profit
|
$ 763.8
|
|
$ 522.9
|
|
$ 2,279.8
|
|
$ 1,538.1
|
|
Unallocated
derivative (gains) losses
|
(6.7)
|
|
(13.4)
|
|
(2.7)
|
|
0.4
|
|
Cost of products sold
- special project costs
|
3.1
|
|
0.4
|
|
9.2
|
|
1.1
|
|
Non-GAAP gross
profit
|
$ 760.2
|
|
$ 509.9
|
|
$ 2,286.3
|
|
$ 1,539.6
|
|
|
% of net
sales
|
|
38.5%
|
|
35.4%
|
|
38.1%
|
|
36.3%
|
|
|
|
|
|
|
|
|
|
|
Operating income
reconciliation:
|
|
|
|
|
|
|
|
|
Operating
income
|
$ 318.3
|
|
$ 255.1
|
|
$ 899.2
|
|
$ 701.5
|
|
Unallocated
derivative (gains) losses
|
(6.7)
|
|
(13.4)
|
|
(2.7)
|
|
0.4
|
|
Cost of products sold
- special project costs
|
3.1
|
|
0.4
|
|
9.2
|
|
1.1
|
|
Other special project
costs
|
41.4
|
|
5.9
|
|
94.9
|
|
17.3
|
|
Non-GAAP operating
income
|
$ 356.1
|
|
$ 248.0
|
|
$ 1,000.6
|
|
$ 720.3
|
|
|
% of net
sales
|
|
18.0%
|
|
17.2%
|
|
16.7%
|
|
17.0%
|
|
|
|
|
|
|
|
|
|
|
Net income
reconciliation:
|
|
|
|
|
|
|
|
|
Net income
|
$ 185.3
|
|
$ 160.9
|
|
$ 497.7
|
|
$ 435.2
|
|
Income tax
expense
|
90.0
|
|
77.5
|
|
270.0
|
|
217.6
|
|
Unallocated
derivative (gains) losses
|
(6.7)
|
|
(13.4)
|
|
(2.7)
|
|
0.4
|
|
Cost of products sold
- special project costs
|
3.1
|
|
0.4
|
|
9.2
|
|
1.1
|
|
Other special project
costs
|
41.4
|
|
5.9
|
|
94.9
|
|
17.3
|
|
Non-GAAP income
before income taxes
|
$ 313.1
|
|
$ 231.3
|
|
$ 869.1
|
|
$ 671.6
|
|
Income tax expense,
as adjusted
|
102.4
|
|
75.0
|
|
305.6
|
|
223.8
|
|
Non-GAAP
income
|
$ 210.7
|
|
$ 156.3
|
|
$ 563.5
|
|
$ 447.8
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP income
before income taxes
|
$ 313.1
|
|
$ 231.3
|
|
$ 869.1
|
|
$ 671.6
|
|
Amortization
|
52.2
|
|
25.2
|
|
158.2
|
|
75.3
|
|
Adjusted non-GAAP
income before income taxes
|
$ 365.3
|
|
$ 256.5
|
|
$ 1,027.3
|
|
$ 746.9
|
|
Income tax expense,
as adjusted
|
119.3
|
|
83.2
|
|
361.3
|
|
249.0
|
|
Adjusted non-GAAP
income
|
$ 246.0
|
|
$ 173.3
|
|
$ 666.0
|
|
$ 497.9
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
common shares outstanding
|
119,167,720
|
|
101,190,896
|
|
119,138,552
|
|
101,114,223
|
Weighted-average
participating shares outstanding
|
514,642
|
|
609,929
|
|
519,586
|
|
682,668
|
Total
weighted-average shares outstanding
|
119,682,362
|
|
101,800,825
|
|
119,658,138
|
|
101,796,891
|
Dilutive effect of
stock options
|
52,585
|
|
675
|
|
25,355
|
|
4,132
|
Total
weighted-average shares outstanding -
assuming dilution
|
119,734,947
|
|
101,801,500
|
|
119,683,493
|
|
101,801,023
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP income per
common share -
assuming dilution
|
$
1.76
|
|
$ 1.54
|
|
$
4.71
|
|
$
4.40
|
Adjusted non-GAAP
income per common share -
assuming dilution
|
$
2.05
|
|
$ 1.70
|
|
$
5.56
|
|
$
4.89
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The J. M. Smucker
Company
|
|
|
|
|
|
|
Unaudited Non-GAAP
Financial Measures
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
January 31,
|
|
Nine Months Ended
January 31,
|
|
|
|
|
|
|
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
(Dollars in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
reconciliation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
|
|
|
|
$ 185.3
|
|
$ 160.9
|
|
$ 497.7
|
|
$ 435.2
|
|
Income tax
expense
|
|
|
|
|
|
|
90.0
|
|
77.5
|
|
270.0
|
|
217.6
|
|
Interest expense -
net
|
|
|
|
|
|
|
43.6
|
|
16.8
|
|
130.6
|
|
50.4
|
|
Depreciation
|
|
|
|
|
|
|
55.1
|
|
37.9
|
|
165.5
|
|
114.1
|
|
Amortization
|
|
|
|
|
|
|
52.2
|
|
25.2
|
|
158.2
|
|
75.3
|
|
Earnings before
interest, taxes,
depreciation, and amortization
|
$ 426.2
|
|
$ 318.3
|
|
$ 1,222.0
|
|
$ 892.6
|
|
|
% of net
sales
|
|
|
|
|
|
|
21.6%
|
|
22.1%
|
|
20.4%
|
|
21.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Free cash flow
reconciliation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
|
|
|
|
|
$ 542.3
|
|
$ 427.7
|
|
$ 1,122.8
|
|
$ 511.6
|
|
Additions to
property, plant, and equipment
|
|
|
|
|
|
(43.4)
|
|
(48.4)
|
|
(160.8)
|
|
(162.1)
|
|
Free cash
flow
|
|
|
|
|
|
|
$ 498.9
|
|
$ 379.3
|
|
$ 962.0
|
|
$ 349.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following tables provide a reconciliation of the Company's
2016 guidance for estimated non-GAAP income per diluted share,
adjusted non-GAAP income per diluted share, and free cash flow.
|
|
|
|
|
|
Year Ending April 30,
2016
|
|
|
|
|
|
|
Low
|
|
High
|
|
|
|
|
|
|
|
|
|
Net income per common
share - assuming dilution reconciliation:
|
|
|
|
|
Net income per common
share - assuming dilution
|
$
5.25
|
|
$
5.35
|
|
Special project
costs
|
0.59
|
|
0.59
|
|
Non-GAAP
income
|
$
5.84
|
|
$
5.94
|
|
Amortization
|
1.15
|
|
1.15
|
|
Adjusted non-GAAP
income
|
$
6.99
|
|
$
7.09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ending April 30,
2016
|
|
|
|
|
|
|
|
|
(Dollars in
millions)
|
|
|
Free cash flow
reconciliation:
|
|
|
|
|
Net cash provided by
operating activities
|
$
1,215
|
|
|
|
Additions to
property, plant, and equipment
|
(240)
|
|
|
|
Free cash
flow
|
$
975
|
|
|
|
|
|
|
|
|
|
|
|
Logo -
http://photos.prnewswire.com/prnh/20071219/SMUCKERLOGO
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/the-j-m-smucker-company-announces-fiscal-2016-third-quarter-results-300224454.html
SOURCE The J. M. Smucker Company