ORRVILLE, Ohio, June 8, 2017 /PRNewswire/ -- The J. M.
Smucker Company (NYSE: SJM) today announced results for the fourth
quarter ended April 30, 2017, of its
2017 fiscal year. All comparisons are to the fourth quarter
of the prior fiscal year, unless otherwise noted.
EXECUTIVE SUMMARY
- Net sales decreased 1 percent, primarily reflecting declines
within the U.S. Retail Pet Foods segment.
- Net income per diluted share was $0.96 in the fourth quarter, including a noncash
impairment charge primarily related to certain indefinite-lived
trademarks within the U.S. Retail Pet Foods segment, compared to
$1.61 in the prior year. The
prior year included a $0.42 per share
noncash deferred tax benefit. For the full year, net income
per diluted share was $5.10.
- Adjusted earnings per share was $1.80 in the fourth quarter, compared to
$2.23 in the prior year, which
included the $0.42 per share noncash
deferred tax benefit. For the full year, adjusted earnings
per share was $7.72. This compares to
$7.79 in the prior year, which
included the $0.42 per share noncash
deferred tax benefit and a $0.15 per
share gain on the U.S. canned milk divestiture.
- Incremental synergy realization was $35.2 million in the fourth quarter and
$122.0 million for the full
year.
- Cash provided by operating activities was $264.2 million in the fourth quarter. Free
cash flow was $208.4 million in the
quarter and $866.6 million in fiscal
2017.
- The Company provided its fiscal 2018 outlook, with adjusted
earnings per share expected to range from $7.85 to $8.05.
CHIEF EXECUTIVE OFFICER REMARKS
"In fiscal 2017, we
grew adjusted EPS by 7 percent over the prior year," said
Mark Smucker, Chief Executive
Officer. "In the new fiscal year, we continue to execute our
strategic plan for sustainable, long-term growth by capitalizing on
changes in consumer preferences and the retail environment.
We will fuel the momentum of our growth brands like
Smucker's® Uncrustables®,
Nature's Recipe®, and Café
Bustelo®, while supporting our base businesses in
coffee, peanut butter, pet food, and pet snacks. Accelerated
cost savings and expanded capabilities are key components of our
multi-dimensional strategy to deliver top and bottom line growth
and increase shareholder value."
NON-GAAP MEASURES AND SEGMENT RESULTS
Beginning
May 1, 2016, the Company redefined
certain non-GAAP measures and modified its segment profit
calculation to exclude amortization expense and impairment charges
related to intangible assets. Prior year results have been
modified to conform to the new presentation. Additional
information is included in the Company's Form 8-K, dated
July 25, 2016.
FOURTH QUARTER CONSOLIDATED RESULTS
|
Three Months Ended
April 30,
|
|
|
|
|
|
% Increase
|
|
2017
|
|
2016
|
|
(Decrease)
|
|
(Dollars and shares
in millions, except per share data)
|
|
|
|
|
|
|
Net
sales
|
$
|
1,783.8
|
|
$
|
1,807.6
|
|
(1%)
|
|
|
|
|
|
|
Operating
income
|
$
|
196.7
|
|
$
|
246.1
|
|
(20%)
|
Adjusted operating
income
|
338.8
|
|
331.0
|
|
2%
|
|
|
|
|
|
|
Net income per
common share – assuming dilution
|
$
|
0.96
|
|
$
|
1.61
|
|
(40%)
|
Adjusted earnings per
share
|
1.80
|
|
2.23
|
|
(19%)
|
|
|
|
|
|
|
Weighted-average
shares outstanding – assuming dilution
|
114.9
|
|
118.8
|
|
(3%)
|
Net Sales
Net sales decreased $23.8 million, or 1 percent, reflecting lower
volume/mix. Net price realization was neutral as lower net pricing
within the U.S. Retail Pet Foods segment was offset by higher net
pricing on coffee and fruit spreads.
Operating Income
Gross profit decreased $41.2 million, or 6 percent, driven by an
unfavorable change in derivative gains and losses. Lower
volume/mix also contributed to the gross profit decline.
Selling, distribution, and administrative ("SD&A")
expenses decreased $17.4 million, or
5 percent, primarily driven by incremental synergy
realization. Operating income decreased $49.4 million, further reflecting a $57.5 million noncash impairment charge,
primarily related to certain indefinite-lived trademarks within the
U.S. Retail Pet Foods segment, and a $33.0
million reduction in special project costs.
On a non-GAAP basis, adjusted gross profit decreased
$12.5 million, or 2 percent, with the
primary difference from GAAP results being the exclusion of a
$30.8 million unfavorable change
in unallocated derivative gains and losses. With the decrease
in SD&A expenses, adjusted operating income increased
$7.8 million, or 2
percent.
Other
Net interest expense decreased $0.2 million. Income taxes increased
$32.3 million as a decrease in income
before income taxes in the current year was more than offset by the
$50.5 million noncash deferred tax
benefit in the prior year.
Cash provided by operating activities was $264.2 million. This compared to
$336.2 million in the prior year,
which benefited from the Company's working capital initiatives.
FULL-YEAR OUTLOOK
The Company provided its full-year
fiscal 2018 guidance as summarized below:
Comparable net sales
increase vs prior year
|
1%
|
Adjusted earnings per
share
|
$7.85 -
$8.05
|
Free cash
flow
|
$775
million
|
Capital
expenditures
|
$310
million
|
Effective tax
rate
|
32.5% -
33.0%
|
Net sales are expected to increase approximately 1 percent from
fiscal 2017, primarily reflecting higher net price realization.
Adjusted earnings per share is expected to range from $7.85 to $8.05, based on 113.6 million shares
outstanding, reflecting the Company's repurchase of 3.0 million
shares in the fourth quarter of fiscal 2017. The above
guidance does not include any benefit from the Company's previously
announced definitive agreement to acquire the
Wesson® oil brand from Conagra Brands, Inc.
The Company announced today a $100
million increase to its cost management program, which will
result in total annual cost reductions of $450 million for its synergy and cost management
programs, when fully realized by fiscal 2020. Included in
fiscal 2018 earnings guidance is the remaining $40 million of the $200
million synergy target associated with the pet food
acquisition and approximately $100
million from the $250 million
cost management program.
FOURTH 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
|
FY17 Q4
Results
|
|
$505.9
|
|
$149.9
|
|
29.6%
|
Increase (decrease)
vs prior year
|
|
(1%)
|
|
(14%)
|
|
-430bps
|
Segment net sales decreased $6.7
million. Volume/mix reduced net sales by 5 percent driven by
declines for the Folgers® brand, partially offset
by gains for the Café Bustelo® and Dunkin'
Donuts® brands. The lower volume/mix was
mostly offset by higher net price realization. Segment profit
decreased $23.9 million primarily due
to the impact of volume/mix. In addition, increased marketing
expense and the net impact of higher commodity costs and pricing
also contributed to the segment profit decline.
U.S. Retail Consumer Foods
|
|
Net
|
|
Segment
|
|
Segment
|
|
|
Sales
|
|
Profit
|
|
Profit
Margin
|
FY17 Q4
Results
|
|
$473.8
|
|
$108.7
|
|
22.9%
|
Increase (decrease)
vs prior year
|
|
-
|
|
19%
|
|
350bps
|
Segment net sales increased $0.1
million. Higher net price realization, primarily
driven by the Smucker's® and
Jif® brands, contributed 2 percentage points of
growth. This was offset by lower volume/mix, primarily attributed
to the Crisco® and
truRoots® brands. Segment profit increased
$17.0 million, reflecting higher net
pricing and lower manufacturing overhead costs, as well as
incremental synergy realization. These factors were partially
offset by an increase in marketing expense.
U.S. Retail Pet Foods
|
|
Net
|
|
Segment
|
|
Segment
|
|
|
Sales
|
|
Profit
|
|
Profit
Margin
|
FY17 Q4
Results
|
|
$534.5
|
|
$118.0
|
|
22.1%
|
Increase (decrease)
vs prior year
|
|
(5%)
|
|
(15%)
|
|
-240bps
|
Segment net sales decreased $28.4
million, primarily due to lower net price realization which
reduced net sales by 4 percent. Volume/mix reduced net sales
by 1 percent as gains for the Nature's
Recipe® and
Milk-Bone® brands were more than offset by
declines across the rest of the portfolio, most notably
9Lives® and Meow
Mix® cat food. Segment profit decreased
$20.1 million as the decline in net
sales and increased distribution expense were partially offset by
lower input costs.
International and Foodservice
|
|
Net
|
|
Segment
|
|
Segment
|
|
|
Sales
|
|
Profit
|
|
Profit
Margin
|
FY17 Q4
Results
|
|
$269.6
|
|
$48.4
|
|
18.0%
|
Increase (decrease)
vs prior year
|
|
4%
|
|
26%
|
|
310bps
|
Segment net sales increased $11.2 million. Volume/mix
contributed 5 percentage points of growth to net sales. This
was slightly offset by lower net price realization and a
$1.0 million impact from foreign
currency exchange. Segment profit increased $10.0
million primarily due to favorable volume/mix and a $3.8 million pre-tax gain related to the sale
during the fourth quarter of the Company's minority interest in
Guilin Seamild Biologic Technology Development Co., Ltd., a
manufacturer and marketer of oats products in China.
Conference Call
The Company will conduct an earnings
conference call and webcast today, June 8,
2017, 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, which could
cause actual results to differ materially from those expressed,
include: the ability to achieve synergies and cost savings related
to the Big Heart Pet Brands acquisition and other programs in the
amounts and within the time frames currently anticipated and to
effectively manage the related integration and restructuring costs;
the ability to satisfy the closing conditions for the
Wesson® transaction, including receipt of
required regulatory approvals, without unexpected delays or
conditions; 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 key 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 Company's 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 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.
The J. M. Smucker
Company
Unaudited
Condensed Consolidated Statements of Income
|
|
|
|
Three Months Ended
April 30,
|
|
Year Ended April
30,
|
|
|
|
|
|
% Increase
|
|
|
|
|
|
% Increase
|
|
2017
|
|
2016
|
|
(Decrease)
|
|
2017
|
|
2016
|
|
(Decrease)
|
|
(Dollars in millions,
except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
$
|
1,783.8
|
|
$
|
1,807.6
|
|
(1%)
|
|
$
|
7,392.3
|
|
$
|
7,811.2
|
|
(5%)
|
Cost of products
sold
|
1,137.0
|
|
1,119.6
|
|
2%
|
|
4,557.0
|
|
4,843.4
|
|
(6%)
|
Gross
Profit
|
646.8
|
|
688.0
|
|
(6%)
|
|
2,835.3
|
|
2,967.8
|
|
(4%)
|
Gross
margin
|
36.3%
|
|
38.1%
|
|
|
|
38.4%
|
|
38.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling,
distribution, and administrative expenses
|
334.4
|
|
351.8
|
|
(5%)
|
|
1,390.7
|
|
1,510.3
|
|
(8%)
|
Amortization
|
52.1
|
|
50.2
|
|
4%
|
|
207.3
|
|
208.4
|
|
(1%)
|
Impairment
charges
|
57.5
|
|
-
|
|
n/m
|
|
133.2
|
|
-
|
|
n/m
|
Other special project
costs
|
10.1
|
|
41.0
|
|
(75%)
|
|
76.9
|
|
135.9
|
|
(43%)
|
Other operating
income - net
|
(4.0)
|
|
(1.1)
|
|
n/m
|
|
(4.3)
|
|
(32.1)
|
|
(87%)
|
Operating
Income
|
196.7
|
|
246.1
|
|
(20%)
|
|
1,031.5
|
|
1,145.3
|
|
(10%)
|
Operating
margin
|
11.0%
|
|
13.6%
|
|
|
|
14.0%
|
|
14.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense -
net
|
(40.3)
|
|
(40.5)
|
|
(0%)
|
|
(163.1)
|
|
(171.1)
|
|
(5%)
|
Other income -
net
|
5.5
|
|
4.6
|
|
20%
|
|
10.0
|
|
3.7
|
|
170%
|
Income Before
Income Taxes
|
161.9
|
|
210.2
|
|
(23%)
|
|
878.4
|
|
977.9
|
|
(10%)
|
Income
taxes
|
51.5
|
|
19.2
|
|
168%
|
|
286.1
|
|
289.2
|
|
(1%)
|
Net
Income
|
$
|
110.4
|
|
$
|
191.0
|
|
(42%)
|
|
$
|
592.3
|
|
$
|
688.7
|
|
(14%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per
common share
|
$
|
0.96
|
|
$
|
1.61
|
|
(40%)
|
|
$
|
5.11
|
|
$
|
5.77
|
|
(11%)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per common share –
assuming
dilution
|
$
|
0.96
|
|
$
|
1.61
|
|
(40%)
|
|
$
|
5.10
|
|
$
|
5.76
|
|
(11%)
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends declared
per common share
|
$
|
0.75
|
|
$
|
0.67
|
|
12%
|
|
$
|
3.00
|
|
$
|
2.68
|
|
12%
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
shares outstanding
|
114,816,602
|
|
118,755,584
|
|
(3%)
|
|
116,013,751
|
|
119,436,199
|
|
(3%)
|
Weighted-average
shares outstanding –
|
|
|
|
|
|
|
|
|
|
|
|
assuming
dilution
|
114,906,128
|
|
118,845,157
|
|
(3%)
|
|
116,120,780
|
|
119,477,312
|
|
(3%)
|
The J. M.
Smucker Company
Unaudited Condensed Consolidated Balance Sheets
|
|
|
|
|
|
April 30,
2017
|
|
April 30,
2016
|
|
|
|
(Dollars in
millions)
|
Assets
|
|
|
|
Current
Assets:
|
|
|
|
|
Cash and cash
equivalents
|
$
|
166.8
|
|
$
|
109.8
|
|
Trade receivables,
less allowance for doubtful accounts
|
438.7
|
|
450.1
|
|
Inventories
|
905.7
|
|
899.4
|
|
Other current
assets
|
130.6
|
|
114.1
|
|
|
Total Current
Assets
|
1,641.8
|
|
1,573.4
|
|
|
|
|
|
|
Property, Plant,
and Equipment - Net
|
1,617.5
|
|
1,627.7
|
|
|
|
|
|
|
Other Noncurrent
Assets:
|
|
|
|
|
Goodwill
|
6,077.1
|
|
6,091.1
|
|
Other intangible
assets - net
|
6,149.9
|
|
6,494.4
|
|
Other noncurrent
assets
|
153.4
|
|
197.5
|
|
|
Total Other
Noncurrent Assets
|
12,380.4
|
|
12,783.0
|
Total
Assets
|
$
|
15,639.7
|
|
$
|
15,984.1
|
|
|
|
|
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
Current
Liabilities:
|
|
|
|
|
Accounts
payable
|
$
|
477.2
|
|
$
|
459.4
|
|
Current portion of
long-term debt
|
499.0
|
|
-
|
|
Short-term
borrowings
|
454.0
|
|
284.0
|
|
Other current
liabilities
|
402.4
|
|
469.6
|
|
|
Total Current
Liabilities
|
1,832.6
|
|
1,213.0
|
|
|
|
|
|
|
Noncurrent
Liabilities:
|
|
|
|
|
Long-term debt, less
current portion
|
4,445.5
|
|
5,146.0
|
|
Other noncurrent
liabilities
|
2,511.4
|
|
2,616.6
|
|
|
Total Noncurrent
Liabilities
|
6,956.9
|
|
7,762.6
|
|
|
|
|
|
|
Shareholders'
Equity
|
6,850.2
|
|
7,008.5
|
Total Liabilities
and Shareholders' Equity
|
$
|
15,639.7
|
|
$
|
15,984.1
|
|
|
|
|
|
|
The J. M. Smucker
Company
Unaudited Condensed Consolidated Statements of Cash
Flow
|
|
|
|
Three Months Ended
April 30,
|
|
Year Ended April
30,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
(Dollars in
millions)
|
|
|
|
|
|
|
|
|
Operating
Activities
|
|
|
|
|
|
|
|
Net income
|
$
|
110.4
|
|
$
|
191.0
|
|
$
|
592.3
|
|
$
|
688.7
|
Adjustments to
reconcile net income to net cash
|
|
|
|
|
|
|
|
provided by
operations:
|
|
|
|
|
|
|
|
Depreciation
|
52.1
|
|
56.2
|
|
211.7
|
|
221.7
|
Amortization
|
52.1
|
|
50.2
|
|
207.3
|
|
208.4
|
Impairment
charges
|
57.5
|
|
-
|
|
133.2
|
|
-
|
Share-based
compensation expense
|
-
|
|
7.7
|
|
22.0
|
|
34.6
|
Gain on
divestiture
|
-
|
|
-
|
|
-
|
|
(25.3)
|
Deferred income tax
benefit
|
(79.4)
|
|
(95.2)
|
|
(79.4)
|
|
(95.2)
|
Other noncash
adjustments
|
0.5
|
|
1.1
|
|
4.8
|
|
3.4
|
Defined benefit
pension contributions
|
(22.2)
|
|
(6.2)
|
|
(28.7)
|
|
(8.6)
|
Changes in assets and
liabilities, net of effect
|
|
|
|
|
|
|
|
from businesses
acquired:
|
|
|
|
|
|
|
|
Trade
receivables
|
(18.1)
|
|
57.1
|
|
8.9
|
|
(21.9)
|
Inventories
|
88.2
|
|
48.0
|
|
(10.4)
|
|
240.1
|
Accounts
payable and accrued items
|
(20.8)
|
|
(44.8)
|
|
(37.7)
|
|
48.5
|
Income and
other taxes
|
65.0
|
|
78.2
|
|
7.9
|
|
146.9
|
Other - net
|
(21.1)
|
|
(7.1)
|
|
27.1
|
|
19.7
|
Net Cash Provided
by Operating Activities
|
264.2
|
|
336.2
|
|
1,059.0
|
|
1,461.0
|
|
|
|
|
|
|
|
|
Investing
Activities
|
|
|
|
|
|
|
|
Business acquired, net
of cash acquired
|
-
|
|
-
|
|
-
|
|
7.9
|
Equity investment in
affiliate
|
-
|
|
-
|
|
-
|
|
(16.0)
|
Additions to property,
plant, and equipment
|
(55.8)
|
|
(40.6)
|
|
(192.4)
|
|
(201.4)
|
Proceeds from
divestiture
|
-
|
|
-
|
|
-
|
|
193.7
|
Proceeds from sale of
investment
|
40.6
|
|
-
|
|
40.6
|
|
-
|
Proceeds from disposal
of property, plant, and equipment
|
0.1
|
|
3.8
|
|
0.5
|
|
4.0
|
Other - net
|
(26.5)
|
|
27.8
|
|
(38.4)
|
|
33.5
|
Net Cash (Used
for) Provided by Investing Activities
|
(41.6)
|
|
(9.0)
|
|
(189.7)
|
|
21.7
|
|
|
|
|
|
|
|
|
Financing
Activities
|
|
|
|
|
|
|
|
Short-term borrowings
- net
|
312.0
|
|
146.0
|
|
170.0
|
|
58.0
|
Repayments of
long-term debt
|
-
|
|
-
|
|
(200.0)
|
|
(800.0)
|
Quarterly dividends
paid
|
(87.2)
|
|
(80.1)
|
|
(339.3)
|
|
(316.6)
|
Purchase of treasury
shares
|
(418.6)
|
|
(433.3)
|
|
(437.6)
|
|
(441.1)
|
Other - net
|
0.1
|
|
0.2
|
|
0.8
|
|
0.8
|
Net Cash Used for
Financing Activities
|
(193.7)
|
|
(367.2)
|
|
(806.1)
|
|
(1,498.9)
|
Effect of exchange
rate changes on cash
|
(1.7)
|
|
9.3
|
|
(6.2)
|
|
0.4
|
Net increase
(decrease) in cash and cash equivalents
|
27.2
|
|
(30.7)
|
|
57.0
|
|
(15.8)
|
Cash and cash
equivalents at beginning of period
|
139.6
|
|
140.5
|
|
109.8
|
|
125.6
|
Cash and Cash
Equivalents at End of Period
|
$
|
166.8
|
|
$
|
109.8
|
|
$
|
166.8
|
|
$
|
109.8
|
The J. M. Smucker
Company
Unaudited Supplemental Schedule
|
|
|
|
Three Months Ended
April 30,
|
|
Year Ended April
30,
|
|
2017
|
|
% of
Net Sales
|
|
2016
|
|
% of
Net Sales
|
|
2017
|
|
% of
Net Sales
|
|
2016
|
|
% of
Net Sales
|
|
(Dollars in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
$
|
1,783.8
|
|
|
|
$
|
1,807.6
|
|
|
|
$
|
7,392.3
|
|
|
|
$
|
7,811.2
|
|
|
Selling,
distribution, and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
administrative
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marketing
|
91.9
|
|
5.2%
|
|
83.2
|
|
4.6%
|
|
419.4
|
|
5.7%
|
|
441.7
|
|
5.7%
|
Selling
|
55.9
|
|
3.1%
|
|
69.2
|
|
3.8%
|
|
249.2
|
|
3.4%
|
|
314.1
|
|
4.0%
|
Distribution
|
60.2
|
|
3.4%
|
|
44.9
|
|
2.5%
|
|
244.4
|
|
3.3%
|
|
230.2
|
|
2.9%
|
General and
administrative
|
126.4
|
|
7.1%
|
|
154.5
|
|
8.5%
|
|
477.7
|
|
6.5%
|
|
524.3
|
|
6.7%
|
Total selling,
distribution, and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
administrative
expenses
|
$
|
334.4
|
|
18.7%
|
|
$
|
351.8
|
|
19.5%
|
|
$
|
1,390.7
|
|
18.8%
|
|
$
|
1,510.3
|
|
19.3%
|
|
Amounts may not add
due to rounding.
|
The J. M. Smucker
Company
Unaudited Reportable Segments
|
|
|
|
Three Months Ended
April 30,
|
|
Year Ended April
30,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
(Dollars in
millions)
|
|
|
|
|
|
|
|
|
Net sales:
|
|
|
|
|
|
|
|
U.S. Retail
Coffee
|
$
|
505.9
|
|
$
|
512.6
|
|
$
|
2,108.6
|
|
$
|
2,239.2
|
U.S. Retail Consumer
Foods
|
473.8
|
|
473.7
|
|
2,085.4
|
|
2,269.7
|
U.S. Retail Pet
Foods
|
534.5
|
|
562.9
|
|
2,135.9
|
|
2,250.4
|
International and
Foodservice
|
269.6
|
|
258.4
|
|
1,062.4
|
|
1,051.9
|
Total net
sales
|
$
|
1,783.8
|
|
$
|
1,807.6
|
|
$
|
7,392.3
|
|
$
|
7,811.2
|
|
|
|
|
|
|
|
|
Segment
profit:
|
|
|
|
|
|
|
|
U.S. Retail
Coffee
|
$
|
149.9
|
|
$
|
173.8
|
|
$
|
682.4
|
|
$
|
722.6
|
U.S. Retail Consumer
Foods
|
108.7
|
|
91.7
|
|
458.2
|
|
467.5
|
U.S. Retail Pet
Foods
|
118.0
|
|
138.1
|
|
481.0
|
|
493.9
|
International and
Foodservice
|
48.4
|
|
38.4
|
|
185.1
|
|
179.0
|
Total segment
profit
|
$
|
425.0
|
|
$
|
442.0
|
|
$
|
1,806.7
|
|
$
|
1,863.0
|
Amortization
|
(52.1)
|
|
(50.2)
|
|
(207.3)
|
|
(208.4)
|
Impairment
charges
|
(57.5)
|
|
-
|
|
(133.2)
|
|
-
|
Interest expense -
net
|
(40.3)
|
|
(40.5)
|
|
(163.1)
|
|
(171.1)
|
Unallocated derivative
(losses) gains
|
(21.5)
|
|
9.3
|
|
(27.2)
|
|
12.0
|
Cost of products sold
- special project costs
|
(0.9)
|
|
(3.0)
|
|
(5.7)
|
|
(12.2)
|
Other special project
costs
|
(10.1)
|
|
(41.0)
|
|
(76.9)
|
|
(135.9)
|
Corporate
administrative expenses
|
(86.2)
|
|
(111.0)
|
|
(324.9)
|
|
(373.2)
|
Other income -
net
|
5.5
|
|
4.6
|
|
10.0
|
|
3.7
|
Income before income
taxes
|
$
|
161.9
|
|
$
|
210.2
|
|
$
|
878.4
|
|
$
|
977.9
|
|
|
|
|
|
|
|
|
Segment profit
margin:
|
|
|
|
|
|
|
|
U.S. Retail
Coffee
|
29.6%
|
|
33.9%
|
|
32.4%
|
|
32.3%
|
U.S. Retail Consumer
Foods
|
22.9%
|
|
19.4%
|
|
22.0%
|
|
20.6%
|
U.S. Retail Pet
Foods
|
22.1%
|
|
24.5%
|
|
22.5%
|
|
21.9%
|
International and
Foodservice
|
18.0%
|
|
14.9%
|
|
17.4%
|
|
17.0%
|
Non-GAAP Measures
The Company uses non-GAAP financial
measures, including: net sales excluding divestiture and foreign
currency exchange; adjusted gross profit, operating income, income,
and earnings per share; earnings before interest, taxes,
depreciation, amortization, and impairment charges related to
intangible assets ("EBITDA (as adjusted)"); 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 which include merger and integration and
restructuring costs ("special project costs") and unallocated gains
and losses on commodity and foreign currency exchange derivatives
("unallocated derivative gains and losses"). The special
project costs relate to specific merger and integration and
restructuring projects, and the unallocated derivative gains and
losses reflect the changes in fair value of the Company's commodity
and foreign currency exchange contracts. Beginning
May 1, 2016, the Company redefined
the non-GAAP measures to also exclude amortization expense and
impairment charges related to intangible assets, and has modified
prior year results to conform to the new definition. The
Company believes that excluding amortization expense and impairment
charges related to intangible assets in its non-GAAP measures is
more reflective of the Company's operating performance and the way
in which the Company manages its business, as amortization and
impairment charges are noncash expenses and can be significantly
affected by the timing and size of acquisitions. 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 fiscal 2018 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
April 30,
|
|
|
Year Ended April
30,
|
|
|
|
|
|
Increase
|
|
|
|
|
|
Increase
|
|
|
2017
|
|
2016
|
|
(Decrease)
|
|
%
|
|
2017
|
|
2016
|
|
(Decrease)
|
|
%
|
|
(Dollars in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
reconciliation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
$
|
1,783.8
|
|
$
|
1,807.6
|
|
$
|
(23.8)
|
|
(1%)
|
|
$
|
7,392.3
|
|
$
|
7,811.2
|
|
$
|
(418.9)
|
|
(5%)
|
Milk
divestiture
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(153.5)
|
|
153.5
|
|
2%
|
Net sales excluding
divestiture
|
$
|
1,783.8
|
|
$
|
1,807.6
|
|
$
|
(23.8)
|
|
(1%)
|
|
$
|
7,392.3
|
|
$
|
7,657.7
|
|
$
|
(265.4)
|
|
(3%)
|
Foreign currency
exchange
|
1.0
|
|
-
|
|
1.0
|
|
-
|
|
3.8
|
|
-
|
|
3.8
|
|
-
|
Net sales excluding
divestiture and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
foreign currency
exchange
|
$
|
1,784.8
|
|
$
|
1,807.6
|
|
$
|
(22.8)
|
|
(1%)
|
|
$
|
7,396.1
|
|
$
|
7,657.7
|
|
$
|
(261.6)
|
|
(3%)
|
|
|
Amounts may not add
due to rounding.
|
|
Net sales excluding
divestiture has been adjusted for the noncomparable impact of the
U.S. canned milk business divested on December 31, 2015.
|
The J. M. Smucker
Company
Unaudited Non-GAAP Financial Measures
|
|
|
|
Three Months Ended
April 30,
|
|
Year Ended April
30,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
(Dollars in millions,
except per share data)
|
|
|
|
|
|
|
|
Gross profit
reconciliation:
|
|
|
|
|
|
|
Gross
profit
|
$
|
646.8
|
|
$
|
688.0
|
|
$
|
2,835.3
|
|
$
|
2,967.8
|
Unallocated
derivative losses (gains)
|
21.5
|
|
(9.3)
|
|
27.2
|
|
(12.0)
|
Cost of products sold
- special project costs
|
0.9
|
|
3.0
|
|
5.7
|
|
12.2
|
Adjusted gross
profit
|
$
|
669.2
|
|
$
|
681.7
|
|
$
|
2,868.2
|
|
$
|
2,968.0
|
% of net
sales
|
37.5%
|
|
37.7%
|
|
38.8%
|
|
38.0%
|
|
|
|
|
|
|
|
|
Operating income
reconciliation:
|
|
|
|
|
|
|
|
Operating
income
|
$
|
196.7
|
|
$
|
246.1
|
|
$
|
1,031.5
|
|
$
|
1,145.3
|
Amortization
|
52.1
|
|
50.2
|
|
207.3
|
|
208.4
|
Impairment
charges
|
57.5
|
|
-
|
|
133.2
|
|
-
|
Unallocated
derivative losses (gains)
|
21.5
|
|
(9.3)
|
|
27.2
|
|
(12.0)
|
Cost of products sold
- special project costs
|
0.9
|
|
3.0
|
|
5.7
|
|
12.2
|
Other special project
costs
|
10.1
|
|
41.0
|
|
76.9
|
|
135.9
|
Adjusted operating
income
|
$
|
338.8
|
|
$
|
331.0
|
|
$
|
1,481.8
|
|
$
|
1,489.8
|
% of net
sales
|
19.0%
|
|
18.3%
|
|
20.0%
|
|
19.1%
|
|
|
|
|
|
|
|
|
Net income
reconciliation:
|
|
|
|
|
|
|
|
Net income
|
$
|
110.4
|
|
$
|
191.0
|
|
$
|
592.3
|
|
$
|
688.7
|
Income
taxes
|
51.5
|
|
19.2
|
|
286.1
|
|
289.2
|
Amortization
|
52.1
|
|
50.2
|
|
207.3
|
|
208.4
|
Impairment
charges
|
57.5
|
|
-
|
|
133.2
|
|
-
|
Unallocated
derivative losses (gains)
|
21.5
|
|
(9.3)
|
|
27.2
|
|
(12.0)
|
Cost of products sold
- special project costs
|
0.9
|
|
3.0
|
|
5.7
|
|
12.2
|
Other special project
costs
|
10.1
|
|
41.0
|
|
76.9
|
|
135.9
|
Adjusted income
before income taxes
|
$
|
304.0
|
|
$
|
295.1
|
|
$
|
1,328.7
|
|
$
|
1,322.4
|
Income taxes, as
adjusted
|
97.3
|
|
29.8
|
|
432.8
|
|
391.1
|
Adjusted
income
|
$
|
206.7
|
|
$
|
265.3
|
|
$
|
895.9
|
|
$
|
931.3
|
|
|
|
|
|
|
|
|
Weighted-average
common shares outstanding
|
114,267,453
|
|
118,243,385
|
|
115,471,395
|
|
118,918,701
|
Weighted-average
participating shares outstanding
|
549,149
|
|
512,199
|
|
542,356
|
|
517,498
|
Total
weighted-average shares outstanding
|
114,816,602
|
|
118,755,584
|
|
116,013,751
|
|
119,436,199
|
Dilutive effect of
stock options
|
89,526
|
|
89,573
|
|
107,029
|
|
41,113
|
Total
weighted-average shares outstanding -
assuming dilution
|
114,906,128
|
|
118,845,157
|
|
116,120,780
|
|
119,477,312
|
|
|
|
|
|
|
|
|
Adjusted earnings per
share
|
$
|
1.80
|
|
$
|
2.23
|
|
$
|
7.72
|
|
$
|
7.79
|
The J. M. Smucker
Company
Unaudited Non-GAAP Financial Measures
|
|
|
|
Three Months Ended
April 30,
|
|
Year Ended April
30,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
(Dollars in
millions)
|
|
|
|
|
|
|
|
|
EBITDA (as adjusted)
reconciliation:
|
|
|
|
|
|
|
|
Net income
|
$
|
110.4
|
|
$
|
191.0
|
|
$
|
592.3
|
|
$
|
688.7
|
Income
taxes
|
51.5
|
|
19.2
|
|
286.1
|
|
289.2
|
Interest expense -
net
|
40.3
|
|
40.5
|
|
163.1
|
|
171.1
|
Depreciation
|
52.1
|
|
56.2
|
|
211.7
|
|
221.7
|
Amortization
|
52.1
|
|
50.2
|
|
207.3
|
|
208.4
|
Impairment
charges
|
57.5
|
|
-
|
|
133.2
|
|
-
|
EBITDA (as
adjusted)
|
$
|
363.9
|
|
$
|
357.1
|
|
$
|
1,593.7
|
|
$
|
1,579.1
|
% of net
sales
|
20.4%
|
|
19.8%
|
|
21.6%
|
|
20.2%
|
|
|
|
|
|
|
|
|
Free cash flow
reconciliation:
|
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
$
|
264.2
|
|
$
|
336.2
|
|
$
|
1,059.0
|
|
$
|
1,461.0
|
Additions to
property, plant, and equipment
|
(55.8)
|
|
(40.6)
|
|
(192.4)
|
|
(201.4)
|
Free cash
flow
|
$
|
208.4
|
|
$
|
295.6
|
|
$
|
866.6
|
|
$
|
1,259.6
|
The following tables provide a reconciliation of the Company's
fiscal 2018 guidance for estimated adjusted earnings per share and
free cash flow.
|
Year Ending April 30,
2018
|
|
Low
|
|
High
|
Net income per common
share - assuming dilution reconciliation:
|
|
|
|
Net income per common
share - assuming dilution
|
$
|
6.29
|
|
$
|
6.49
|
Special project
costs
|
0.38
|
|
0.38
|
Amortization
|
1.18
|
|
1.18
|
Adjusted earnings per
share
|
$
|
7.85
|
|
$
|
8.05
|
|
|
|
|
|
|
|
|
|
Year Ending April 30, 2018
|
|
(Dollars in
millions)
|
Free cash flow reconciliation:
|
|
Net cash provided by operating
activities
|
$
|
1,085
|
Additions to property, plant, and
equipment
|
(310)
|
Free cash flow
|
$
|
775
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/the-j-m-smucker-company-announces-fiscal-2017-fourth-quarter-results-and-fiscal-2018-outlook-300470976.html
SOURCE The J.M. Smucker Company