ORRVILLE, Ohio, Aug. 27, 2015 /PRNewswire/ -- The J. M.
Smucker Company (NYSE: SJM) today announced results for the first
quarter ended July 31, 2015, of its
2016 fiscal year. All comparisons are to the first quarter of
the prior fiscal year, unless otherwise noted.
EXECUTIVE SUMMARY
- Net sales increased $628.2
million, or 47 percent, reflecting the contribution of Big
Heart Pet Brands ("Big Heart"), acquired in fiscal 2015, and the
Company's U.S. retail launch of Dunkin' Donuts®
K-Cup® pods during the quarter.
- Net income per diluted share was in line with the prior year,
as the benefit from Big Heart operations was offset by higher
interest expense and the impact of additional shares
outstanding.
- Non-GAAP income per diluted share was $1.32, a decrease of 1 percent.
- Adjusted non-GAAP income per diluted share, which excludes
amortization, was $1.60, an increase
of 7 percent.
- The Company maintained its fiscal 2016 earnings outlook with
non-GAAP income per diluted share expected to range from
$5.65 to $5.80, and adjusted non-GAAP
income per diluted share expected to range from $6.80 to $6.95.
- The Company reconfirmed its synergy target related to the Big
Heart acquisition of $200 million by
the end of fiscal 2018.
CHIEF EXECUTIVE OFFICER REMARKS
"We are off to a solid start this fiscal year, with net sales
increasing 47 percent and non-GAAP operating income growth of 37
percent," said Richard Smucker,
Chief Executive Officer. "Contributions from the Big Heart
acquisition and new products were key drivers of this
performance. Notably, our launch of Dunkin'
Donuts® K-Cup® pods got off to a
great start as we shipped over 100 million cups during the first
quarter. Overall, we are on track to achieve our full year
expectations for net sales and earnings, and are confident about
the initiatives we have in place to support future growth."
"Integrating the Pet Food business and beginning to recognize
identified synergies continues to be a significant focus area,"
continued Richard Smucker.
"The integration efforts and first quarter results for our Pet Food
business further confirms that our entry into the pet food market
was timely and strategically positions us for continued
growth."
FIRST QUARTER CONSOLIDATED RESULTS
|
|
Three Months Ended
July 31,
|
|
|
2015
|
|
2014
|
|
% Increase
(Decrease)
|
|
|
(Dollars and shares
in millions, except per share data)
|
|
|
|
|
|
|
|
Net
sales
|
$
1,952.0
|
|
$
1,323.8
|
|
47%
|
|
|
|
|
|
|
|
Operating
income
|
$
267.1
|
|
$
191.6
|
|
39%
|
Non-GAAP operating
income
|
$
303.1
|
|
$
222.0
|
|
37%
|
|
|
|
|
|
|
|
Net income per
common share - assuming dilution
|
$
1.14
|
|
$
1.14
|
|
0%
|
Non-GAAP income per
common share - assuming dilution
|
$
1.32
|
|
$
1.34
|
|
(1%)
|
Adjusted non-GAAP
income per common share - assuming dilution
|
$
1.60
|
|
$
1.50
|
|
7%
|
|
|
|
|
|
|
|
Weighted-average
shares outstanding – assuming dilution
|
119.6
|
|
101.8
|
|
18%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Results for the period ended July 31, 2015, include
the operations of Big Heart and Sahale Snacks, Inc. ("Sahale"),
which were acquired after the comparable prior year period.
Adjusted non-GAAP income per diluted share excludes the noncash
impact of amortization.
|
Net sales increased, reflecting the contribution of $561.3 million from Big Heart. Excluding
acquisitions and foreign currency exchange, net sales increased
$73.6 million, or 6 percent.
This was driven by favorable volume/mix led by the launch of
Dunkin' Donuts® K-Cup® pods
during the quarter. Net price realization was 1 percentage
point higher, as the impact of higher coffee net price realization
was partially offset by lower net pricing for peanut
butter.
Gross profit increased $250.0
million, or 52 percent, and non-GAAP gross profit increased
$241.3 million, or 48 percent.
The increase in both gross profit measures was primarily due to the
addition of Big Heart. Excluding Big Heart, gross profit was
higher, driven by the introduction of Dunkin'
Donuts® K-Cup® pods. Net price
realization was higher and offset the impact of net higher costs,
which were attributed to green coffee.
Selling, distribution, and administrative expenses increased
$134.2 million, or 53 percent,
primarily driven by the addition of Big Heart and higher selling
expense, reflecting royalties related to Dunkin'
Donuts® K-Cup® pods.
Amortization expense also increased driven by the Big Heart
acquisition.
Operating income increased $75.5
million, or 39 percent, reflecting the addition of Big
Heart, partially offset by an increase in merger and integration
costs. Non-GAAP operating income increased $81.1 million, or 37 percent.
Net interest expense increased $27.0
million, due to the impact of acquisition-related debt
issued in the fourth quarter of 2015. Income taxes increased
$26.9 million due to an increase in
income before income taxes and a higher effective tax rate.
The quarterly effective tax rate increased from 33.9 percent to
38.8 percent reflecting higher deferred state tax expense,
including the impact of state tax law changes.
Cash provided by operating activities was $305.1 million, compared to a use of cash of
$8.1 million in the prior year.
The change in operating cash flow was primarily attributed to lower
working capital needs for inventory, driven by lower green coffee
costs in ending inventory, and the timing of tax payments and
refunds.
FULL-YEAR OUTLOOK
The Company confirmed its full-year fiscal 2016 guidance as
provided below:
|
Net sales
|
$8 billion
|
|
|
Non-GAAP income per
common share - assuming dilution
|
$5.65 -
$5.80
|
|
|
Adjusted non-GAAP
income per common share - assuming dilution
|
$6.80 -
$6.95
|
|
|
Free cash
flow
|
$900
million
|
|
|
Capital
expenditures
|
$200
million
|
|
In comparison to the prior fiscal year, net sales are expected
to increase approximately 40 percent, reflecting a full year
contribution from Big Heart and an increase of approximately 3
percent on the remainder of the Company's businesses.
Included in the earnings guidance range is $25 million of synergies related to the Big Heart
acquisition, which will be mostly realized in the back half of the
year.
FIRST QUARTER SEGMENT RESULTS
Effective May 1, 2015, the Company
modified its reportable segments to align with the way performance
is evaluated by the Company's management and how information is
reported internally, consistent with previously announced
management changes. Specifically, the U.S. Retail Consumer
Foods reportable segment now includes the Natural Foods business,
previously included in the former International, Foodservice, and
Natural Foods reportable segment. International and
Foodservice is now a combination of all remaining businesses.
Prior year amounts have been modified to reflect the realigned
reportable segments. Dollar amounts in the segment tables
below are reported in millions.
U.S. Retail Coffee
|
|
|
|
|
|
|
|
|
Net
Sales
|
|
Segment
Profit
|
|
Segment Profit
Margin
|
FY16 Q1
Results
|
|
$565.0
|
|
$155.1
|
|
27.5%
|
Change vs prior
year
|
|
12%
|
|
13%
|
|
+10bps
|
The net sales increase of $62.3
million was mostly driven by the introduction of Dunkin'
Donuts® K-Cup® pods during the
quarter. The Folgers® brand also
contributed to net sales growth as higher net price realization,
attributed to reduced promotional activities and the net benefit of
pricing actions taken since the beginning of fiscal 2015, more than
offset lower volume. Segment profit increased $17.5 million, reflecting higher net price
realization, which more than offset higher green coffee costs.
Dunkin' Donuts® K-Cup® pods also
contributed to profit growth.
U.S. Retail Consumer Foods
|
|
Net
Sales
|
|
Segment
Profit
|
|
Segment Profit
Margin
|
FY16 Q1
Results
|
|
$582.2
|
|
$117.5
|
|
20.2%
|
Change vs prior
year
|
|
0%
|
|
(1%)
|
|
-10bps
|
Segment net sales were flat as lower net price realization,
primarily related to a price decline on the Jif®
brand in November 2014, offset
favorable volume/mix and a $6.8
million contribution from the Sahale business. The
favorable volume/mix was led by Jif® peanut
butter and Smucker's®
Uncrustables® frozen sandwiches. Segment
profit decreased slightly as lower net price realization and higher
manufacturing overhead costs associated with the new Memphis, Tennessee, peanut butter facility
more than offset overall lower commodity costs, primarily for
peanuts, milk, and oils, and the impact of favorable
volume/mix.
U.S. Retail Pet Foods
|
|
Net
Sales
|
|
Segment
Profit
|
|
Segment Profit
Margin
|
FY16 Q1
Results
|
|
$549.9
|
|
$90.0
|
|
16.4%
|
The segment contributed net sales of $549.9 million, representing mid-single digit
percent growth compared to Big Heart's results for the first
quarter of the prior year, which were reported under previous
ownership. The net sales increase was driven by distribution
gains for the Natural Balance® brand and growth
in Milk-Bone® dog snacks, which more than offset
declines in Kibbles 'n Bits® dry dog food.
Profit also increased, compared to Big Heart's previously reported
results, driven by favorable volume/mix, along with lower marketing
and commodity costs. This more than offset lower net price
realization, reflecting incremental promotional activities, and
higher amortization expense related to the acquisition.
International and Foodservice
|
|
Net
Sales
|
|
Segment
Profit
|
|
Segment Profit
Margin
|
FY16 Q1
Results
|
|
$254.9
|
|
$30.5
|
|
11.9%
|
Change vs prior
year
|
|
7%
|
|
0%
|
|
-90bps
|
Net sales increased $16.2 million,
including an $11.4 million
contribution from Big Heart and $0.9
million from Sahale. Favorable volume/mix and higher
net price realization were mostly offset by the impact of foreign
currency exchange. Segment profit was flat, as an increase in
Foodservice profit and the addition of Big Heart were offset by
higher costs in Canada. These
higher costs were attributed to sourcing certain products from the
U.S., reflecting the impact of a weaker Canadian dollar compared to
a year ago, and higher green coffee costs.
Conference Call
The Company will conduct an earnings conference call and webcast
today, August 27, 2015, 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 known and unknown risks and uncertainties that
could cause actual results to differ materially from any future
results, performance, or achievements expressed or implied 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: the ability of
the Company to successfully integrate acquired and merged
businesses in a timely and cost-effective manner and retain key
suppliers, customers, and employees; the ability of the Company to
achieve synergies and cost savings related to the Big Heart
acquisition in the amounts and within the time frames currently
anticipated; the ability of the Company to generate sufficient cash
flow to meet its deleveraging objectives within the time frames
currently anticipated; a change in outlook or downgrade in the
Company's public credit ratings by a rating agency below investment
grade; the Company's ability to obtain any required financing on a
timely basis and on acceptable terms; volatility of commodity
markets from which the Company's raw materials 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 availability of reliable transportation on
acceptable terms; the Company's 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 particular period; the
success and cost of marketing and sales programs and strategies
intended to promote growth in the Company's 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,
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®
coffee products, and finished goods, such as K-Cup®
pods, 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 impact
of future legal, regulatory, 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; and 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
circumstances.
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 consumer
food and beverage products and pet food and pet snacks in
North America with projected
annual net sales of approximately $8
billion. 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
July 31,
|
|
|
2015
|
|
2014
|
|
% Increase
(Decrease)
|
|
|
(Dollars in millions,
except per share data)
|
|
|
|
|
|
|
|
Net sales
|
$
1,952.0
|
|
$
1,323.8
|
|
47%
|
Cost of products
sold
|
1,223.3
|
|
845.1
|
|
45%
|
Gross
Profit
|
728.7
|
|
478.7
|
|
52%
|
|
Gross
margin
|
37.3%
|
|
36.2%
|
|
|
|
|
|
|
|
|
|
Selling,
distribution, and administrative expenses
|
387.6
|
|
253.4
|
|
53%
|
Amortization
|
53.0
|
|
24.9
|
|
113%
|
Other special project
costs
|
22.9
|
|
8.6
|
|
168%
|
Other operating
(income) expense - net
|
(1.9)
|
|
0.2
|
|
n/m
|
Operating
Income
|
267.1
|
|
191.6
|
|
39%
|
|
Operating
margin
|
13.7%
|
|
14.5%
|
|
|
|
|
|
|
|
|
|
Interest expense -
net
|
(44.4)
|
|
(17.4)
|
|
155%
|
Other income -
net
|
0.1
|
|
1.3
|
|
(89%)
|
Income Before
Income Taxes
|
222.8
|
|
175.5
|
|
27%
|
Income tax
expense
|
86.4
|
|
59.5
|
|
45%
|
Net
Income
|
$
136.4
|
|
$
116.0
|
|
18%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per
common share
|
$
1.14
|
|
$
1.14
|
|
0%
|
|
|
|
|
|
|
|
|
Net income per
common share - assuming dilution
|
$
1.14
|
|
$
1.14
|
|
0%
|
|
|
|
|
|
|
|
Dividends declared
per common share
|
$
0.67
|
|
$
0.64
|
|
5%
|
|
|
|
|
|
|
Weighted-average
shares outstanding
|
119,621,753
|
|
101,768,470
|
|
18%
|
Weighted-average
shares outstanding – assuming dilution
|
119,634,958
|
|
101,776,940
|
|
18%
|
|
|
|
|
|
|
|
The J. M. Smucker
Company
|
Unaudited Condensed
Consolidated Balance Sheets
|
|
|
|
|
|
|
|
|
|
|
|
July 31,
2015
|
|
April 30,
2015
|
|
July 31,
2014
|
|
|
|
(Dollars in
millions)
|
Assets
|
|
|
|
|
|
Current
Assets:
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
133.6
|
|
$
125.6
|
|
$
149.4
|
|
Trade receivables,
less allowance for doubtful accounts
|
507.9
|
|
430.1
|
|
392.5
|
|
Inventories
|
1,150.8
|
|
1,163.6
|
|
1,084.5
|
|
Other current
assets
|
233.2
|
|
340.9
|
|
101.8
|
|
|
Total Current
Assets
|
2,025.5
|
|
2,060.2
|
|
1,728.2
|
|
|
|
|
|
|
|
|
Property, Plant,
and Equipment - Net
|
1,656.8
|
|
1,678.3
|
|
1,274.7
|
|
|
|
|
|
|
|
|
Other Noncurrent
Assets:
|
|
|
|
|
|
|
Goodwill
|
6,001.4
|
|
6,011.6
|
|
3,098.6
|
|
Other intangible
assets - net
|
6,891.7
|
|
6,950.3
|
|
2,999.7
|
|
Other noncurrent
assets
|
183.0
|
|
182.2
|
|
137.6
|
|
|
Total Other
Noncurrent Assets
|
13,076.1
|
|
13,144.1
|
|
6,235.9
|
Total
Assets
|
$
16,758.4
|
|
$
16,882.6
|
|
$
9,238.8
|
|
|
|
|
|
|
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
|
|
Current
Liabilities:
|
|
|
|
|
|
|
Accounts
payable
|
$
347.1
|
|
$
402.8
|
|
$
279.4
|
|
Short-term
borrowings
|
302.6
|
|
226.0
|
|
465.1
|
|
Other current
liabilities
|
409.4
|
|
393.8
|
|
269.9
|
|
|
Total Current
Liabilities
|
1,059.1
|
|
1,022.6
|
|
1,014.4
|
|
|
|
|
|
|
|
|
Noncurrent
Liabilities:
|
|
|
|
|
|
|
Long-term
debt
|
5,694.7
|
|
5,944.9
|
|
1,874.6
|
|
Other noncurrent
liabilities
|
2,874.6
|
|
2,828.2
|
|
1,265.4
|
|
|
Total Noncurrent
Liabilities
|
8,569.3
|
|
8,773.1
|
|
3,140.0
|
|
|
|
|
|
|
|
|
Shareholders'
Equity
|
7,130.0
|
|
7,086.9
|
|
5,084.4
|
Total Liabilities
and Shareholders' Equity
|
$
16,758.4
|
|
$
16,882.6
|
|
$
9,238.8
|
|
|
|
|
|
|
|
|
The J. M. Smucker
Company
|
Unaudited Condensed
Consolidated Statements of Cash Flow
|
|
|
|
|
|
Three Months Ended
July 31,
|
|
|
|
|
2015
|
|
2014
|
|
|
|
|
(Dollars in
millions)
|
|
|
|
|
|
|
|
Operating
Activities
|
|
|
|
Net
income
|
$
136.4
|
|
$
116.0
|
Adjustments to reconcile net income to net cash provided by
operating activities:
|
|
|
|
Depreciation
|
55.7
|
|
38.3
|
Amortization
|
53.0
|
|
24.9
|
Share-based
compensation expense
|
7.7
|
|
6.9
|
Loss on disposal of
assets - net
|
1.3
|
|
0.5
|
Other noncash
adjustments
|
(3.5)
|
|
(0.1)
|
Defined benefit pension
contributions
|
(0.9)
|
|
(1.3)
|
Changes in assets and
liabilities, net of effect from businesses acquired:
|
|
|
|
Trade
receivables
|
(80.8)
|
|
(83.0)
|
Inventories
|
8.4
|
|
(153.3)
|
Accounts
payable and accrued items
|
(16.7)
|
|
(24.1)
|
Income
and other taxes
|
126.0
|
|
45.6
|
Other - net
|
18.5
|
|
21.5
|
Net Cash Provided
by (Used for) Operating Activities
|
305.1
|
|
(8.1)
|
|
|
|
|
|
|
|
Investing
Activities
|
|
|
|
Business
acquired, net of cash acquired
|
7.9
|
|
-
|
Additions to property, plant, and equipment
|
(53.0)
|
|
(49.0)
|
Proceeds
from disposal of property, plant, and equipment
|
-
|
|
1.2
|
Other -
net
|
7.0
|
|
(4.3)
|
Net Cash Used for
Investing Activities
|
(38.1)
|
|
(52.1)
|
|
|
|
|
|
|
|
Financing
Activities
|
|
|
|
Short-term borrowings - net
|
76.6
|
|
221.6
|
Repayments of long-term debt
|
(250.0)
|
|
(100.0)
|
Quarterly dividends paid
|
(76.4)
|
|
(58.9)
|
Purchase
of treasury shares
|
(6.9)
|
|
(10.6)
|
Other -
net
|
2.4
|
|
7.8
|
Net Cash (Used
for) Provided by Financing Activities
|
(254.3)
|
|
59.9
|
Effect of exchange
rate changes on cash
|
(4.7)
|
|
(3.8)
|
Net increase
(decrease) in cash and cash equivalents
|
8.0
|
|
(4.1)
|
Cash and cash
equivalents at beginning of period
|
125.6
|
|
153.5
|
Cash and Cash
Equivalents at End of Period
|
$
133.6
|
|
$
149.4
|
|
|
|
|
|
|
|
The J. M. Smucker
Company
|
Unaudited
Supplemental Schedule
|
|
|
Three Months Ended
July 31,
|
|
2015
|
|
% of
Net Sales
|
|
2014
|
|
% of
Net Sales
|
|
(Dollars in
millions)
|
|
|
|
|
|
|
|
|
Net sales
|
$ 1,952.0
|
|
|
|
$ 1,323.8
|
|
|
Selling,
distribution, and administrative expenses:
|
|
|
|
|
|
|
|
Marketing
|
114.8
|
|
5.9%
|
|
76.4
|
|
5.8%
|
Selling
|
84.6
|
|
4.3%
|
|
50.5
|
|
3.8%
|
Distribution
|
61.7
|
|
3.2%
|
|
39.1
|
|
3.0%
|
General and
administrative
|
126.5
|
|
6.5%
|
|
87.4
|
|
6.6%
|
Total selling,
distribution, and administrative expenses
|
$
387.6
|
|
19.9%
|
|
$
253.4
|
|
19.1%
|
|
|
|
|
|
|
|
|
Amounts may not add
due to rounding.
|
|
|
|
|
|
|
|
The J. M. Smucker
Company
|
Unaudited Reportable
Segments
|
|
|
|
|
|
|
|
Three Months Ended
July 31,
|
|
|
2015
|
|
2014
|
|
|
(Dollars in
millions)
|
|
|
|
|
|
Net sales:
|
|
|
|
|
U.S. Retail
Coffee
|
$
565.0
|
|
$
502.7
|
|
U.S. Retail Consumer
Foods
|
582.2
|
|
582.4
|
|
U.S. Retail Pet
Foods
|
549.9
|
|
-
|
|
International and
Foodservice
|
254.9
|
|
238.7
|
Total net
sales
|
$
1,952.0
|
|
$
1,323.8
|
|
|
|
|
|
Segment
profit:
|
|
|
|
|
U.S. Retail
Coffee
|
$
155.1
|
|
$
137.6
|
|
U.S. Retail Consumer
Foods
|
117.5
|
|
118.1
|
|
U.S. Retail Pet
Foods
|
90.0
|
|
-
|
|
International and
Foodservice
|
30.5
|
|
30.5
|
Total segment
profit
|
$
393.1
|
|
$
286.2
|
|
Interest expense -
net
|
(44.4)
|
|
(17.4)
|
|
Unallocated
derivative losses
|
(10.0)
|
|
(21.4)
|
|
Cost of products sold
- special project costs
|
(3.1)
|
|
(0.4)
|
|
Other special project
costs
|
(22.9)
|
|
(8.6)
|
|
Corporate
administrative expenses
|
(90.0)
|
|
(64.2)
|
|
Other income -
net
|
0.1
|
|
1.3
|
Income before income
taxes
|
$
222.8
|
|
$
175.5
|
|
|
|
|
|
Segment profit
margin:
|
|
|
|
|
U.S. Retail
Coffee
|
27.5%
|
|
27.4%
|
|
U.S. Retail Consumer
Foods
|
20.2%
|
|
20.3%
|
|
U.S. Retail Pet
Foods
|
16.4%
|
|
-
|
|
International and
Foodservice
|
11.9%
|
|
12.8%
|
|
|
|
|
|
Non-GAAP Measures
The Company uses non-GAAP financial measures including: net
sales excluding acquisitions 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
July 31,
|
|
|
|
2015
|
|
2014
|
|
Increase
(Decrease)
|
|
%
|
|
|
|
(Dollars in
millions)
|
|
|
|
|
|
|
|
|
|
|
Net sales
reconciliation:
|
|
|
|
|
|
|
|
|
|
Net sales
|
$ 1,952.0
|
|
$ 1,323.8
|
|
$ 628.2
|
|
47%
|
|
Big
Heart acquisition
|
(561.3)
|
|
-
|
|
(561.3)
|
|
(42%)
|
|
Sahale
acquisition
|
(7.7)
|
|
-
|
|
(7.7)
|
|
(1%)
|
|
Net sales excluding
acquisitions
|
|
$ 1,383.0
|
|
$ 1,323.8
|
|
$
59.2
|
|
4%
|
|
Foreign
currency exchange
|
14.4
|
|
-
|
|
14.4
|
|
1%
|
|
Net sales excluding
acquisitions and
foreign currency exchange
|
$ 1,397.4
|
|
$ 1,323.8
|
|
$
73.6
|
|
6%
|
|
|
|
|
|
|
|
|
|
|
Amounts may not add
due to rounding.
|
|
|
|
|
|
|
|
The J. M. Smucker
Company
|
Unaudited Non-GAAP
Financial Measures
|
|
|
|
Three Months Ended
July 31,
|
|
|
2015
|
|
2014
|
|
|
(Dollars in millions,
except per share data)
|
|
|
|
|
|
|
Gross profit
reconciliation:
|
|
|
|
|
Gross
profit
|
$
728.7
|
|
$
478.7
|
|
Unallocated
derivative losses
|
10.0
|
|
21.4
|
|
Cost of products sold
- special project costs
|
3.1
|
|
0.4
|
|
Non-GAAP gross
profit
|
$
741.8
|
|
$
500.5
|
|
% of net
sales
|
38.0%
|
|
37.8%
|
|
|
|
|
|
|
Operating income
reconciliation:
|
|
|
|
|
Operating
income
|
$
267.1
|
|
$
191.6
|
|
Unallocated
derivative losses
|
10.0
|
|
21.4
|
|
Cost of products sold
- special project costs
|
3.1
|
|
0.4
|
|
Other special project
costs
|
22.9
|
|
8.6
|
|
Non-GAAP operating
income
|
$
303.1
|
|
$
222.0
|
|
% of net
sales
|
15.5%
|
|
16.8%
|
|
|
|
|
|
|
Net income
reconciliation:
|
|
|
|
|
Net income
|
$
136.4
|
|
$
116.0
|
|
Income tax
expense
|
86.4
|
|
59.5
|
|
Unallocated
derivative losses
|
10.0
|
|
21.4
|
|
Cost of products sold
- special project costs
|
3.1
|
|
0.4
|
|
Other special project
costs
|
22.9
|
|
8.6
|
|
Non-GAAP income
before income taxes
|
$
258.8
|
|
$
205.9
|
|
Income tax expense,
as adjusted
|
100.4
|
|
69.8
|
|
Non-GAAP
income
|
$
158.4
|
|
$
136.1
|
|
|
|
|
|
|
Non-GAAP income
before income taxes
|
$
258.8
|
|
$
205.9
|
|
Amortization
|
53.0
|
|
24.9
|
|
Adjusted non-GAAP
income before income taxes
|
$
311.8
|
|
$
230.8
|
|
Income tax expense,
as adjusted
|
120.9
|
|
78.2
|
|
Adjusted non-GAAP
income
|
$
190.9
|
|
$
152.6
|
|
|
|
|
|
|
Weighted-average
common shares outstanding
|
119,089,757
|
|
101,028,622
|
|
Weighted-average
participating shares outstanding
|
531,996
|
|
739,848
|
|
Total
weighted-average shares outstanding
|
119,621,753
|
|
101,768,470
|
|
Dilutive effect of
stock options
|
13,205
|
|
8,470
|
|
Total
weighted-average shares outstanding - assuming dilution
|
119,634,958
|
|
101,776,940
|
|
|
|
|
|
|
Non-GAAP income per
common share - assuming dilution
|
$
1.32
|
|
$
1.34
|
|
Adjusted non-GAAP
income per common share - assuming dilution
|
$
1.60
|
|
$
1.50
|
The J. M. Smucker
Company
|
Unaudited Non-GAAP
Financial Measures
|
|
|
Three Months Ended
July 31,
|
|
|
2015
|
|
2014
|
|
|
(Dollars in
millions)
|
|
|
|
|
|
EBITDA
reconciliation:
|
|
|
|
|
Net income
|
$
136.4
|
|
$
116.0
|
|
Income tax
expense
|
86.4
|
|
59.5
|
|
Interest expense -
net
|
44.4
|
|
17.4
|
|
Depreciation
|
55.7
|
|
38.3
|
|
Amortization
|
53.0
|
|
24.9
|
|
EBITDA
|
$
375.9
|
|
$
256.1
|
|
% of net
sales
|
19.3%
|
|
19.3%
|
|
|
|
|
|
|
Free cash flow
reconciliation:
|
|
|
|
|
Net cash provided by
(used for) operating activities
|
$
305.1
|
|
$
(8.1)
|
|
Additions to
property, plant, and equipment
|
(53.0)
|
|
(49.0)
|
|
Free cash
flow
|
$
252.1
|
|
$
(57.1)
|
|
|
|
|
|
|
The following tables provide reconciliation of the Company's
non-GAAP income per diluted share, adjusted non-GAAP income per
diluted share, and free cash flow, using the midpoint of its 2016
guidance range.
|
Year Ended April 30,
2016
|
|
Non-GAAP
|
|
Adjusted
Non-GAAP
|
|
|
|
|
Net income per common
share - assuming dilution reconciliation:
|
|
|
|
Net income
|
$
5.14
|
|
$
5.14
|
Special project
costs
|
0.59
|
|
0.59
|
Non-GAAP
income
|
$
5.73
|
|
$
5.73
|
Amortization
|
|
|
1.15
|
Adjusted non-GAAP
income
|
|
|
$
6.88
|
|
|
|
|
|
Year Ended April 30,
2016
|
|
|
|
(Dollars in millions)
|
|
|
Free cash flow reconciliation:
|
|
|
|
Net cash provided by
operating activities
|
$
1,100
|
|
|
Additions to
property, plant, and equipment
|
(200)
|
|
|
Free cash
flow
|
$
900
|
|
|
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SOURCE The J. M. Smucker Company