ORRVILLE, Ohio, June 6, 2023
/PRNewswire/ -- The J.M. Smucker Co. (NYSE: SJM) today announced
results for the fourth quarter of its fiscal year ending
April 30, 2023. Financial results for the fourth quarter and
fiscal year reflect the divestitures of certain pet food brands on
April 28, 2023, the natural beverage
and grains businesses on January 31,
2022, and the private label dry pet food business on
December 1, 2021. All comparisons are
to the fourth quarter of the prior fiscal year, unless otherwise
noted.
EXECUTIVE SUMMARY
- Net sales were $2.2 billion, an
increase of 10 percent. Net sales excluding the impact of
divestitures and foreign currency exchange increased 11
percent.
- For the fiscal year, net sales were $8.5
billion, an increase of 7 percent. Net sales excluding the
impact of divestitures and foreign currency exchange increased 9
percent.
- Net loss per diluted share for the quarter was $5.69, reflecting a loss related to the
divestiture of certain pet food brands. Adjusted earnings per share
was $2.64, an increase of 18
percent.
- For the full year, net loss per diluted share was $0.86. Adjusted earnings per share was
$8.92, slightly ahead of the prior
year.
- Cash from operations was $437.4
million compared to $393.7
million in the prior year. Free cash flow was $298.7 million in the quarter and $717.0 million for the full year.
- Return of capital to shareholders, reflecting cash dividends
and share repurchases, was $467.9
million in the quarter and $797.7
million for the full year.
- The Company provided its fiscal year 2024 outlook, with an
expected comparable net sales increase of 8.5 to 9.5 percent,
adjusted earnings per share to range from $9.20 to $9.60, and
free cash flow of $650 million.
CHIEF EXECUTIVE OFFICER REMARKS
"Our strong fourth quarter and full-year results demonstrate the
execution of our strategy and consumer demand for our brands," said
Mark Smucker, Chair of the Board,
President and Chief Executive Officer. "During the quarter, we made
meaningful progress in our effort to reshape our portfolio with the
completion of the divestiture of certain pet food brands, while
also returning significant cash to our shareholders."
"Looking ahead to fiscal year 2024, we are focusing on
sustaining our business momentum by investing in growth platforms,
such as Uncrustables® sandwiches and
Milk-Bone® dog treats, and supporting our
talented employees whose hard work and dedication have been
instrumental to our success. We are confident in our long-term
strategy of leading in the attractive categories of pet, coffee,
and snacking and delivering shareholder value."
FOURTH QUARTER CONSOLIDATED RESULTS
|
Three Months Ended
April 30,
|
|
2023
|
|
2022
|
|
% Increase
(Decrease)
|
|
(Dollars and shares in
millions, except per share data)
|
|
|
|
|
|
|
Net
sales
|
$2,234.8
|
|
$2,033.8
|
|
10 %
|
|
|
|
|
|
|
Operating income
(loss)
|
($633.5)
|
|
$302.0
|
|
n/m
|
Adjusted operating
income
|
408.2
|
|
350.9
|
|
16 %
|
|
|
|
|
|
|
Net income (loss)
per common share – assuming dilution
|
($5.69)
|
|
$1.87
|
|
n/m
|
Adjusted earnings per
share – assuming dilution
|
2.64
|
|
2.23
|
|
18 %
|
|
|
|
|
|
|
Weighted-average
shares outstanding – assuming dilution
|
105.4
|
|
107.8
|
|
(2) %
|
Net Sales
Net sales increased 10 percent, including a 1 percent favorable
impact of lapping customer returns related to the
Jif® peanut butter product recall. Excluding
noncomparable net sales in the prior year of $12.2 million from the divested pet food brands,
as well as $7.7 million of
unfavorable foreign currency exchange, net sales increased
$220.9 million, or 11 percent.
The increase in comparable net sales was driven by an 11
percentage point increase from net price realization, primarily
reflecting list price increases for each of the Company's U.S.
Retail segments and for International and Away From Home.
Volume/mix was neutral compared to the prior year.
Operating Income
Gross profit increased $125.7
million, or 19 percent. The increase reflects a favorable
net impact of higher net price realization and increased commodity
and ingredient, packaging, and manufacturing costs and favorable
volume/mix. Operating income decreased $935.5 million, primarily reflecting a pre-tax
loss of $1.0 billion related to the
divestiture of certain pet food brands and a $23.4 million increase in selling, distribution,
and administrative ("SD&A") expenses.
Adjusted gross profit increased $116.7
million, or 18 percent, with the difference from results
based on generally accepted accounting principles ("GAAP") being
the exclusion of the change in net cumulative unallocated
derivative gains and losses and special project costs. Adjusted
operating income increased $57.3
million, or 16 percent, further reflecting the exclusion of
the pre-tax loss related to the divestiture of certain pet food
brands, amortization, and other special project costs.
Interest Expense and Income Taxes
Net interest expense decreased $2.7
million, primarily due to reduced debt outstanding as
compared to the prior year.
The effective income tax rate was 11.5 percent, compared to 22.3
percent in the prior year, primarily due to the impact of the
divestiture of certain pet food brands. On a non-GAAP basis, the
adjusted effective income tax rate was 23.8 percent, compared
to 22.3 percent in the prior year.
Cash Flow and Debt
Cash provided by operating activities was $437.4 million,
compared to $393.7 million in the
prior year, primarily reflecting an increase in net income adjusted
for noncash items, including the pre-tax loss related to the
divestiture of certain pet food brands, partially offset by higher
cash required to fund working capital as compared to the prior
year. Free cash flow was $298.7
million, compared to $220.7
million in the prior year, driven by the increase in cash
provided by operating activities and a decrease in capital
expenditures as compared to the prior year.
Net proceeds from the divestiture of certain pet food brands
were $1.2 billion, consisting of
$684.7 million in cash, net of a
preliminary working capital adjustment and cash transaction costs,
and approximately 5.4 million shares of Post Holdings, Inc.
("Post") common stock, valued at $491.6
million at the close of the transaction.
The Company repurchased approximately 2.4 million of its common
shares for $359.5 million in the
fourth quarter.
FULL-YEAR OUTLOOK
The Company provided its full-year fiscal year 2024 guidance as
summarized below:
Comparable net sales
increase vs prior year(A)
|
|
8.5% to 9.5%
|
Adjusted earnings per
share
|
|
$9.20 -
$9.60
|
Free cash flow (in
millions)
|
|
$650
|
Capital expenditures
(in millions)
|
|
$550
|
Adjusted effective tax
rate
|
|
24.2 %
|
|
(A) Comparable net
sales excludes net sales in the prior year related to the
divestiture of certain pet food brands. Net sales are expected to
decrease 10.0%
to 11.0% compared to the prior year.
|
Comparable net sales are expected to increase 8.5 to 9.5 percent
compared to the prior year. This reflects favorable volume/mix from
underlying business momentum, as well as higher net pricing. Net
sales are expected to decrease 10.0 to 11.0 percent compared to the
prior year, which reflects $1.5
billion of net sales in the prior year related to the
divested pet food brands.
Adjusted earnings per share is expected to range from
$9.20 to $9.60. This range reflects the benefits of
favorable volume/mix and higher net pricing actions, partially
offset by increased SD&A expenses. The adjusted earnings per
share range also reflects a net impact of approximately
$0.60 related to stranded overhead
from the divestiture of certain pet food brands, inclusive of
income and reimbursements from transition services and
co-manufacturing agreements.
This guidance assumes an adjusted gross profit margin range of
36.5 to 37.0 percent, an adjusted effective income tax rate of 24.2
percent, and 102.5 million common shares outstanding. Free cash
flow is expected to be approximately $650
million with capital expenditures of $550 million.
FOURTH QUARTER SEGMENT RESULTS
Dollar amounts in the segment tables below are reported in
millions.
U.S. Retail Pet Foods
|
|
Net
Sales
|
|
Segment
Profit
|
|
Segment
Profit Margin
|
FY23 Q4
Results
|
|
$785.3
|
|
$145.5
|
|
18.5 %
|
Increase (decrease) vs
prior year
|
|
9 %
|
|
21 %
|
|
170bps
|
Net sales increased $67.2 million,
or 9 percent. Excluding $12.0 million
of noncomparable net sales in the prior year related to the
divestiture of certain pet food brands, net sales increased
$79.2 million, or 11 percent. Higher
net price realization increased net sales by 12 percentage points,
primarily reflecting list price increases across the portfolio. A
reduced contribution from volume/mix decreased net sales by 1
percentage point, primarily driven by cat food and partially offset
by dog food and dog snacks.
Segment profit increased $24.8
million, primarily reflecting favorable volume/mix, a
favorable net impact of higher net price realization and increased
commodity and ingredient, packaging, and manufacturing costs, and a
one-time benefit associated with a legal matter from a prior
acquisition, partially offset by increased marketing
investments.
U.S. Retail Coffee
|
|
Net
Sales
|
|
Segment
Profit
|
|
Segment
Profit Margin
|
FY23 Q4
Results
|
|
$692.5
|
|
$200.1
|
|
28.9 %
|
Increase (decrease) vs
prior year
|
|
7 %
|
|
22 %
|
|
350bps
|
Net sales increased $45.3 million,
or 7 percent. Higher net price realization increased net sales by
10 percentage points, primarily reflecting list price increases
across the portfolio. A reduced contribution from volume/mix
decreased net sales by 3 percentage points, primarily driven by
roast and ground coffee.
Segment profit increased $35.9
million, primarily reflecting lower marketing spend and a
favorable net impact of higher net price realization and increased
commodity costs.
U.S. Retail Consumer Foods
|
|
Net
Sales
|
|
Segment
Profit
|
|
Segment
Profit Margin
|
FY23 Q4
Results
|
|
$453.4
|
|
$103.4
|
|
22.8 %
|
Increase (decrease) vs
prior year
|
|
14 %
|
|
9 %
|
|
-110bps
|
Net sales increased $56.1 million,
or 14 percent, including a 5 percent favorable impact of
lapping customer returns related to the Jif®
peanut butter product recall. Higher net price realization
increased sales by 12 percentage points, primarily reflecting list
price increases across the portfolio and lapping the impact of
customer returns in the prior year related to the
Jif® peanut butter product recall. Volume/mix
increased net sales by 2 percentage points, primarily driven by
Smucker's® Uncrustables® frozen
sandwiches, partially offset by a decrease for
Jif® peanut butter.
Segment profit increased $8.4
million, primarily reflecting favorable volume/mix,
partially offset by increased marketing investments. Segment profit
also reflects lapping the prior year impact of unsaleable
inventory, customer returns and customer refunds, mostly offset by
an insurance recovery related to the Jif® peanut
butter product recall. Excluding these noncomparable items, the net
impact of higher net pricing and increased commodity and
ingredient, manufacturing, and packaging costs was slightly
unfavorable.
International and Away From Home
|
|
Net
Sales
|
|
Segment
Profit
|
|
Segment
Profit Margin
|
FY23 Q4
Results
|
|
$303.6
|
|
$47.6
|
|
15.7 %
|
Increase (decrease) vs
prior year
|
|
12 %
|
|
38 %
|
|
300bps
|
Net sales increased $32.4 million,
or 12 percent. Excluding unfavorable foreign currency exchange of
$7.7 million and $0.2 million of noncomparable net sales in the
prior year related to the divested pet food brands, net sales
increased $40.3 million, or 15
percent. Comparable net sales increased 25 percent and 4 percent
for the Away From Home and International operating segments,
respectively. Net price realization contributed a 13 percentage
point increase to net sales for the combined businesses, primarily
reflecting list price increases across the portfolio. Volume/mix
increased net sales by 2 percentage points, primarily driven by
coffee and frozen handheld products, partially offset by baking
mixes and ingredients and fruit spreads.
Segment profit increased $13.1
million, primarily reflecting a favorable net impact of
higher net price realization and increased commodity costs.
Financial Results Discussion and Webcast
At approximately 7:00 a.m. Eastern
Time today, the Company will post to its website at
investors.jmsmucker.com a pre-recorded management discussion of its
fiscal year 2023 financial results, a transcript of the discussion,
and supplemental materials. At 9:00 a.m.
Eastern Time today, the Company will webcast a live question
and answer session with Mark
Smucker, Chair of the Board, President and Chief Executive
Officer, and Tucker Marshall, Chief
Financial Officer. The live webcast and replay can be accessed at
investors.jmsmucker.com.
The J.M. Smucker Co. 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 effect of
the sale of certain pet food brands on the Company's ability to
retain key personnel and to maintain relationships with customers,
suppliers, and other business partners, and any impact to the value
of the Company's investment in Post common stock or the Company's
ability to dispose of some or all of such securities at favorable
market prices; disruptions or inefficiencies in the Company's
operations or supply chain, including any impact caused by product
recalls (including the Jif® peanut butter product
recall), political instability, terrorism, armed hostilities
(including the ongoing conflict between Russia and Ukraine), extreme weather conditions, natural
disasters, pandemics (including COVID-19), work stoppages or labor
shortages, or other calamities; risks related to the availability,
and cost inflation in, supply chain inputs, including labor, raw
materials, commodities, packaging, and transportation; the impact
of food security concerns involving either the Company's products
or its competitors' products, including changes in consumer
preference, consumer litigation, actions by the U.S. Food and Drug
Administration or other agencies, and product recalls; risks
associated with derivative and purchasing strategies the Company
employs to manage commodity pricing and interest rate risks; the
availability of reliable transportation on acceptable terms; the
ability to achieve cost savings related to restructuring and cost
management programs in the amounts and within the time frames
currently anticipated; the ability to generate sufficient cash flow
to continue operating under the Company's capital deployment model,
including capital expenditures, debt repayment, dividend payments,
and share repurchases; 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 Company's businesses, including
product innovation; general competitive activity in the market,
including competitors' pricing practices and promotional spending
levels; the Company's ability to attract and retain key talent; 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 Company's
ability to manage and maintain key relationships; impairments in
the carrying value of goodwill, other intangible assets, or other
long-lived assets or changes in the useful lives of other
intangible assets or other long-lived 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; a disruption, failure, or security breach of
the Company or their suppliers' information technology systems,
including ransomware attacks; foreign currency exchange rate 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 Co.
At the J.M. Smucker Company, it is our privilege to make food
people and pets love by offering a diverse portfolio of brands
available across North America. We
are proud to lead in the coffee, consumer foods, dog snacks, and
cat food categories by offering brands consumers trust for
themselves and their families each day including
Folgers®, Dunkin'®, Café
Bustelo®, Jif®, Smucker's®
Uncrustables®, Smucker's®,
Milk-Bone®, and Meow Mix®. Through
our unwavering commitment to producing quality products, operating
responsibly and ethically and delivering on our Purpose, we will
continue to grow our business and the positive impact we have on
society. For more information, please visit jmsmucker.com.
The J.M. Smucker Co. is the owner of all trademarks referenced
herein, except for Dunkin'® which is a trademark
of DD IP Holder LLC. The Dunkin'® brand is
licensed to The J.M. Smucker Co. for packaged coffee products sold
in retail channels such as grocery stores, mass merchandisers, club
stores, e-commerce and drug stores, and in certain away from home
channels. This information does not pertain to products for sale in
Dunkin'® restaurants.
The J.M. Smucker
Co.
Unaudited Condensed
Consolidated Statements of Income
|
|
|
|
|
|
Three Months Ended
April 30,
|
|
Year Ended April
30,
|
|
2023
|
|
2022
|
|
% Increase
(Decrease)
|
|
2023
|
|
2022
|
|
% Increase
(Decrease)
|
|
(Dollars and shares in
millions, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
$2,234.8
|
|
$2,033.8
|
|
10 %
|
|
$8,529.2
|
|
$7,998.9
|
|
7 %
|
Cost of products
sold
|
1,442.4
|
|
1,367.1
|
|
6 %
|
|
5,727.4
|
|
5,298.2
|
|
8 %
|
Gross
Profit
|
792.4
|
|
666.7
|
|
19 %
|
|
2,801.8
|
|
2,700.7
|
|
4 %
|
Gross
margin
|
35.5 %
|
|
32.8 %
|
|
|
|
32.8 %
|
|
33.8 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, distribution,
and administrative expenses
|
376.0
|
|
352.6
|
|
7 %
|
|
1,455.0
|
|
1,360.3
|
|
7 %
|
Amortization
|
40.1
|
|
57.5
|
|
(30) %
|
|
206.9
|
|
223.6
|
|
(7) %
|
Other intangible assets
impairment charge
|
—
|
|
—
|
|
n/m
|
|
—
|
|
150.4
|
|
(100) %
|
Other special project
costs
|
2.0
|
|
2.9
|
|
(31) %
|
|
4.7
|
|
8.0
|
|
(41) %
|
Loss (gain) on
divestitures – net
|
1,020.1
|
|
—
|
|
n/m
|
|
1,018.5
|
|
(9.6)
|
|
n/m
|
Other operating expense
(income) – net
|
(12.3)
|
|
(48.3)
|
|
(75) %
|
|
(40.8)
|
|
(55.8)
|
|
(27) %
|
Operating Income
(Loss)
|
(633.5)
|
|
302.0
|
|
n/m
|
|
157.5
|
|
1,023.8
|
|
(85) %
|
Operating
margin
|
(28.3) %
|
|
14.8 %
|
|
|
|
1.8 %
|
|
12.8 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense –
net
|
(35.3)
|
|
(38.0)
|
|
(7) %
|
|
(152.0)
|
|
(160.9)
|
|
(6) %
|
Other income (expense)
– net
|
(9.8)
|
|
(3.8)
|
|
n/m
|
|
(14.7)
|
|
(19.1)
|
|
(23) %
|
Income (Loss) Before
Income Taxes
|
(678.6)
|
|
260.2
|
|
n/m
|
|
(9.2)
|
|
843.8
|
|
(101) %
|
Income tax expense
(benefit)
|
(77.9)
|
|
58.1
|
|
n/m
|
|
82.1
|
|
212.1
|
|
(61) %
|
Net Income
(Loss)
|
($600.7)
|
|
$202.1
|
|
n/m
|
|
($91.3)
|
|
$631.7
|
|
(114) %
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
per common share
|
($5.69)
|
|
$1.88
|
|
n/m
|
|
($0.86)
|
|
$5.84
|
|
(115) %
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
per common share –
assuming dilution
|
($5.69)
|
|
$1.87
|
|
n/m
|
|
($0.86)
|
|
$5.83
|
|
(115) %
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends declared
per common share
|
$1.02
|
|
$0.99
|
|
3 %
|
|
$4.08
|
|
$3.96
|
|
3 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average shares
outstanding
|
105.4
|
|
107.5
|
|
(2) %
|
|
106.2
|
|
108.2
|
|
(2) %
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average shares
outstanding –
assuming dilution
|
105.4
|
|
107.8
|
|
(2) %
|
|
106.2
|
|
108.4
|
|
(2) %
|
The J.M. Smucker
Co.
Unaudited Condensed
Consolidated Balance Sheets
|
|
|
|
|
|
|
|
April 30,
2023
|
|
April 30,
2022
|
|
|
(Dollars in
millions)
|
Assets
|
|
|
|
|
Current
Assets
|
|
|
|
|
Cash and cash
equivalents
|
|
$655.8
|
|
$169.9
|
Trade receivables –
net
|
|
597.6
|
|
524.7
|
Inventories
|
|
1,009.8
|
|
1,089.3
|
Investment in equity
securities
|
|
487.8
|
|
—
|
Other current
assets
|
|
107.7
|
|
226.2
|
Total Current
Assets
|
|
2,858.7
|
|
2,010.1
|
|
|
|
|
|
Property, Plant,
and Equipment – Net
|
|
2,239.5
|
|
2,131.7
|
|
|
|
|
|
Other Noncurrent
Assets
|
|
|
|
|
Goodwill
|
|
5,216.9
|
|
6,015.8
|
Other intangible
assets – net
|
|
4,429.3
|
|
5,652.2
|
Other noncurrent
assets
|
|
247.0
|
|
245.2
|
Total Other
Noncurrent Assets
|
|
9,893.2
|
|
11,913.2
|
Total
Assets
|
|
$14,991.4
|
|
$16,055.0
|
|
|
|
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
|
Current
Liabilities
|
|
|
|
|
Accounts
payable
|
|
$1,392.6
|
|
$1,193.3
|
Short-term
borrowings
|
|
—
|
|
180.0
|
Other current
liabilities
|
|
594.1
|
|
579.5
|
Total Current
Liabilities
|
|
1,986.7
|
|
1,952.8
|
|
|
|
|
|
Noncurrent
Liabilities
|
|
|
|
|
Long-term
debt
|
|
4,314.2
|
|
4,310.6
|
Other noncurrent
liabilities
|
|
1,399.7
|
|
1,651.5
|
Total Noncurrent
Liabilities
|
|
5,713.9
|
|
5,962.1
|
|
|
|
|
|
Total Shareholders'
Equity
|
|
7,290.8
|
|
8,140.1
|
Total Liabilities
and Shareholders' Equity
|
|
$14,991.4
|
|
$16,055.0
|
The J.M. Smucker
Co.
Unaudited Condensed
Consolidated Statements of Cash Flow
|
|
|
|
|
|
Three Months Ended
April 30,
|
|
Year Ended April
30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
(Dollars in
millions)
|
Operating
Activities
|
|
|
|
|
|
|
|
Net income
(loss)
|
($600.7)
|
|
$202.1
|
|
($91.3)
|
|
$631.7
|
Adjustments to
reconcile net income (loss) to net cash
provided by (used for) operations:
|
|
|
|
|
|
|
|
Depreciation
|
57.6
|
|
56.6
|
|
229.6
|
|
235.5
|
Amortization
|
40.1
|
|
57.5
|
|
206.9
|
|
223.6
|
Other intangible
assets impairment charge
|
—
|
|
—
|
|
—
|
|
150.4
|
Pension settlement
loss (gain)
|
4.3
|
|
3.3
|
|
7.4
|
|
10.8
|
Share-based
compensation expense
|
14.3
|
|
7.1
|
|
25.6
|
|
22.3
|
Loss (gain) on
divestitures – net
|
1,020.1
|
|
—
|
|
1,018.5
|
|
(9.6)
|
Deferred income tax
expense (benefit)
|
(190.8)
|
|
(38.1)
|
|
(190.8)
|
|
(38.1)
|
Loss on disposal of
assets – net
|
2.5
|
|
2.8
|
|
10.0
|
|
4.7
|
Other noncash
adjustments – net
|
5.2
|
|
4.5
|
|
23.9
|
|
14.9
|
Make-whole payments
included in financing activities
|
—
|
|
—
|
|
—
|
|
7.0
|
Defined benefit
pension contributions
|
(1.3)
|
|
(1.4)
|
|
(74.1)
|
|
(5.3)
|
Changes in assets and
liabilities, net of effect from
divestitures:
|
|
|
|
|
|
|
|
Trade
receivables
|
(64.1)
|
|
38.2
|
|
(74.8)
|
|
7.5
|
Inventories
|
20.0
|
|
(47.7)
|
|
(134.6)
|
|
(178.7)
|
Other current
assets
|
17.4
|
|
(75.3)
|
|
86.8
|
|
(52.8)
|
Accounts
payable
|
88.5
|
|
164.7
|
|
134.8
|
|
149.5
|
Accrued
liabilities
|
(25.8)
|
|
2.8
|
|
0.4
|
|
(33.0)
|
Income and other
taxes
|
49.4
|
|
27.7
|
|
9.5
|
|
12.8
|
Other – net
|
0.7
|
|
(11.1)
|
|
0.2
|
|
(16.9)
|
Net Cash Provided
by (Used for) Operating Activities
|
437.4
|
|
393.7
|
|
1,188.0
|
|
1,136.3
|
|
|
|
|
|
|
|
|
Investing
Activities
|
|
|
|
|
|
|
|
Proceeds from
divestitures – net
|
684.7
|
|
(0.2)
|
|
686.3
|
|
130.0
|
Additions to property,
plant, and equipment
|
(138.7)
|
|
(173.0)
|
|
(471.0)
|
|
(417.5)
|
Other – net
|
23.4
|
|
(50.4)
|
|
47.3
|
|
(68.0)
|
Net Cash Provided
by (Used for) Investing Activities
|
569.4
|
|
(223.6)
|
|
262.6
|
|
(355.5)
|
|
|
|
|
|
|
|
|
Financing
Activities
|
|
|
|
|
|
|
|
Short-term borrowings
(repayments) – net
|
(0.7)
|
|
85.9
|
|
(185.9)
|
|
97.6
|
Proceeds from
long-term debt
|
—
|
|
—
|
|
—
|
|
797.6
|
Repayments of
long-term debt, including make-whole
payments
|
—
|
|
—
|
|
—
|
|
(1,157.0)
|
Capitalized debt
issuance costs
|
—
|
|
—
|
|
—
|
|
(10.4)
|
Quarterly dividends
paid
|
(108.4)
|
|
(107.0)
|
|
(430.2)
|
|
(418.1)
|
Purchase of treasury
shares
|
(359.5)
|
|
(262.7)
|
|
(367.5)
|
|
(270.4)
|
Proceeds from stock
option exercises
|
13.8
|
|
0.1
|
|
21.6
|
|
16.3
|
Other – net
|
(0.4)
|
|
(0.4)
|
|
(2.6)
|
|
(0.1)
|
Net Cash Provided
by (Used for) Financing Activities
|
(455.2)
|
|
(284.1)
|
|
(964.6)
|
|
(944.5)
|
Effect of exchange
rate changes on cash
|
—
|
|
(0.4)
|
|
(0.1)
|
|
(0.7)
|
Net increase
(decrease) in cash and cash equivalents
|
551.6
|
|
(114.4)
|
|
485.9
|
|
(164.4)
|
Cash and cash
equivalents at beginning of period
|
104.2
|
|
284.3
|
|
169.9
|
|
334.3
|
Cash and Cash
Equivalents at End of Period
|
$655.8
|
|
$169.9
|
|
$655.8
|
|
$169.9
|
The J.M. Smucker
Co.
Unaudited Supplemental
Schedule
|
|
|
|
|
|
Three Months Ended
April 30,
|
|
Year Ended April
30,
|
|
2023
|
|
% of
Net Sales
|
|
2022
|
|
% of
Net Sales
|
|
2023
|
|
% of
Net Sales
|
|
2022
|
|
% of
Net Sales
|
|
(Dollars in
millions)
|
Net sales
|
$2,234.8
|
|
|
|
$2,033.8
|
|
|
|
$8,529.2
|
|
|
|
$7,998.9
|
|
|
Selling, distribution,
and
administrative expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marketing
|
116.0
|
|
5.2 %
|
|
122.1
|
|
6.0 %
|
|
446.5
|
|
5.2 %
|
|
452.4
|
|
5.7 %
|
Selling
|
56.8
|
|
2.5 %
|
|
50.1
|
|
2.5 %
|
|
238.3
|
|
2.8 %
|
|
221.1
|
|
2.8 %
|
Distribution
|
71.8
|
|
3.2 %
|
|
77.9
|
|
3.8 %
|
|
298.6
|
|
3.5 %
|
|
289.1
|
|
3.6 %
|
General and
administrative
|
131.4
|
|
5.9 %
|
|
102.5
|
|
5.0 %
|
|
471.6
|
|
5.5 %
|
|
397.7
|
|
5.0 %
|
Total selling,
distribution, and
|administrative expenses
|
$376.0
|
|
16.8 %
|
|
$352.6
|
|
17.3 %
|
|
$1,455.0
|
|
17.1 %
|
|
$1,360.3
|
|
17.0 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts may not add
due to rounding.
|
|
|
|
|
|
|
|
|
|
|
|
|
The J.M. Smucker
Co.
Unaudited Reportable
Segments
|
|
|
|
|
|
|
|
Three Months Ended
April 30,
|
|
Year Ended April
30,
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
(Dollars in
millions)
|
Net sales:
|
|
|
|
|
|
|
|
|
U.S. Retail Pet
Foods
|
|
$785.3
|
|
$718.1
|
|
$3,038.1
|
|
$2,764.3
|
U.S. Retail
Coffee
|
|
692.5
|
|
647.2
|
|
2,735.3
|
|
2,497.3
|
U.S. Retail Consumer
Foods
|
|
453.4
|
|
397.3
|
|
1,630.9
|
|
1,707.2
|
International and Away
From Home
|
|
303.6
|
|
271.2
|
|
1,124.9
|
|
1,030.1
|
Total net
sales
|
|
$2,234.8
|
|
$2,033.8
|
|
$8,529.2
|
|
$7,998.9
|
|
|
|
|
|
|
|
|
|
Segment
profit:
|
|
|
|
|
|
|
|
|
U.S. Retail Pet
Foods
|
|
$145.5
|
|
$120.7
|
|
$494.9
|
|
$395.9
|
U.S. Retail
Coffee
|
|
200.1
|
|
164.2
|
|
737.7
|
|
736.7
|
U.S. Retail Consumer
Foods
|
|
103.4
|
|
95.0
|
|
352.6
|
|
424.2
|
International and Away
From Home
|
|
47.6
|
|
34.5
|
|
143.3
|
|
142.0
|
Total segment
profit
|
|
$496.6
|
|
$414.4
|
|
$1,728.5
|
|
$1,698.8
|
Amortization
|
|
(40.1)
|
|
(57.5)
|
|
(206.9)
|
|
(223.6)
|
Other intangible
assets impairment charge
|
|
—
|
|
—
|
|
—
|
|
(150.4)
|
Gain (loss) on
divestitures – net
|
|
(1,020.1)
|
|
—
|
|
(1,018.5)
|
|
9.6
|
Interest expense –
net
|
|
(35.3)
|
|
(38.0)
|
|
(152.0)
|
|
(160.9)
|
Change in net
cumulative unallocated derivative gains
and losses
|
|
22.0
|
|
14.5
|
|
(21.4)
|
|
(23.4)
|
Cost of products sold
– special project costs
|
|
(1.5)
|
|
(3.0)
|
|
(6.4)
|
|
(20.5)
|
Other special project
costs
|
|
(2.0)
|
|
(2.9)
|
|
(4.7)
|
|
(8.0)
|
Corporate
administrative expenses
|
|
(88.4)
|
|
(63.5)
|
|
(313.1)
|
|
(258.7)
|
Other income (expense)
– net
|
|
(9.8)
|
|
(3.8)
|
|
(14.7)
|
|
(19.1)
|
Income (loss) before
income taxes
|
|
($678.6)
|
|
$260.2
|
|
($9.2)
|
|
$843.8
|
|
|
|
|
|
|
|
|
|
Segment profit
margin:
|
|
|
|
|
|
|
|
|
U.S. Retail Pet
Foods
|
|
18.5 %
|
|
16.8 %
|
|
16.3 %
|
|
14.3 %
|
U.S. Retail
Coffee
|
|
28.9 %
|
|
25.4 %
|
|
27.0 %
|
|
29.5 %
|
U.S. Retail Consumer
Foods
|
|
22.8 %
|
|
23.9 %
|
|
21.6 %
|
|
24.8 %
|
International and Away
From Home
|
|
15.7 %
|
|
12.7 %
|
|
12.7 %
|
|
13.8 %
|
Non-GAAP Financial Measures
The Company uses non-GAAP financial measures, including: net
sales excluding divestitures and foreign currency exchange;
adjusted gross profit; adjusted operating income; adjusted income;
adjusted earnings per share; earnings before interest, taxes,
depreciation, amortization, impairment charges related to
intangible assets, and gains and losses on divestitures ("EBITDA
(as adjusted)"); and free cash flow, as key measures for purposes
of evaluating performance internally. The Company believes that
investors' understanding of its performance is enhanced by
disclosing these performance measures. Furthermore, these non-GAAP
financial measures are used by management in preparation of the
annual budget and for the monthly analyses of its operating
results. The Board of Directors also utilizes certain non-GAAP
financial measures as components for measuring performance for
incentive compensation purposes.
Non-GAAP financial measures exclude certain items affecting
comparability that can significantly affect the year-over-year
assessment of operating results, which include amortization expense
and impairment charges related to intangible assets; certain
divestiture, acquisition, integration, and restructuring costs
("special project costs"); gains and losses on divestitures; the
net change in cumulative unallocated gains and losses on commodity
and foreign currency exchange derivative activities ("change in net
cumulative unallocated derivative gains and losses"); and other
infrequently occurring items that do not directly reflect ongoing
operating results, such as unrealized gains and losses on the
investment in equity securities. Income taxes, as adjusted is
calculated using an adjusted effective income tax rate that is
applied to adjusted income before income taxes and reflects the
exclusion of the previously discussed items, as well as any
adjustments for one-time tax-related activities, when they occur.
While this adjusted effective income tax rate does not generally
differ materially from the GAAP effective income tax rate, certain
exclusions from non-GAAP financial measures, such as the
unfavorable permanent impact of the divestiture of certain pet food
brands during 2023, and the one-time deferred state tax impact of
the internal legal entity simplification during 2022, can
significantly impact the adjusted effective income tax rate.
These non-GAAP financial measures are not intended to replace
the presentation of financial results in accordance with U.S. GAAP.
Rather, the presentation of these non-GAAP financial measures
supplements other metrics used by management to internally evaluate
its businesses and facilitate 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 year 2024 outlook.
The J.M. Smucker
Co.
Unaudited Non-GAAP
Financial Measures
|
|
|
|
|
|
Three Months Ended
April 30,
|
|
Year Ended April
30,
|
|
2023
|
|
2022
|
|
Increase
(Decrease)
|
|
%
|
|
2023
|
|
2022
|
|
Increase
(Decrease)
|
|
%
|
|
(Dollars in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
reconciliation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
$2,234.8
|
|
$2,033.8
|
|
$201.0
|
|
10 %
|
|
$8,529.2
|
|
$7,998.9
|
|
$530.3
|
|
7 %
|
Private label dry pet
food
divestiture
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(62.3)
|
|
62.3
|
|
1
|
Natural beverage and
grains
divestiture
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(106.7)
|
|
106.7
|
|
1
|
Pet food brands
divestiture
|
—
|
|
(12.2)
|
|
12.2
|
|
1
|
|
—
|
|
(12.2)
|
|
12.2
|
|
—
|
Foreign currency
exchange
|
7.7
|
|
—
|
|
7.7
|
|
—
|
|
26.3
|
|
—
|
|
26.3
|
|
—
|
Net sales excluding
divestitures
and foreign currency exchange
|
$2,242.5
|
|
$2,021.6
|
|
$220.9
|
|
11 %
|
|
$8,555.5
|
|
$7,817.7
|
|
$737.8
|
|
9 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts may not add
due to rounding.
|
|
|
|
|
|
|
|
|
|
|
The J.M. Smucker
Co.
Unaudited Non-GAAP
Financial Measures
|
|
|
|
|
|
Three Months Ended
April 30,
|
|
Year Ended April
30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
(Dollars in millions,
except per share data)
|
Gross profit
reconciliation:
|
|
|
|
|
|
|
|
Gross
profit
|
$792.4
|
|
$666.7
|
|
$2,801.8
|
|
$2,700.7
|
Change in net
cumulative unallocated derivative gains
and losses
|
(22.0)
|
|
(14.5)
|
|
21.4
|
|
23.4
|
Cost of products sold
– special project costs
|
1.5
|
|
3.0
|
|
6.4
|
|
20.5
|
Adjusted gross
profit
|
$771.9
|
|
$655.2
|
|
$2,829.6
|
|
$2,744.6
|
% of net
sales
|
34.5 %
|
|
32.2 %
|
|
33.2 %
|
|
34.3 %
|
|
|
|
|
|
|
|
|
Operating income
reconciliation:
|
|
|
|
|
|
|
|
Operating income
(loss)
|
($633.5)
|
|
$302.0
|
|
$157.5
|
|
$1,023.8
|
Amortization
|
40.1
|
|
57.5
|
|
206.9
|
|
223.6
|
Other intangible
assets impairment charge
|
—
|
|
—
|
|
—
|
|
150.4
|
Loss (gain) on
divestitures – net
|
1,020.1
|
|
—
|
|
1,018.5
|
|
(9.6)
|
Change in net
cumulative unallocated derivative gains
and losses
|
(22.0)
|
|
(14.5)
|
|
21.4
|
|
23.4
|
Cost of products sold
– special project costs
|
1.5
|
|
3.0
|
|
6.4
|
|
20.5
|
Other special project
costs
|
2.0
|
|
2.9
|
|
4.7
|
|
8.0
|
Adjusted operating
income
|
$408.2
|
|
$350.9
|
|
$1,415.4
|
|
$1,440.1
|
% of net
sales
|
18.3 %
|
|
17.3 %
|
|
16.6 %
|
|
18.0 %
|
|
|
|
|
|
|
|
|
Net income
reconciliation:
|
|
|
|
|
|
|
|
Net income
(loss)
|
($600.7)
|
|
$202.1
|
|
($91.3)
|
|
$631.7
|
Income tax expense
(benefit)
|
(77.9)
|
|
58.1
|
|
82.1
|
|
212.1
|
Amortization
|
40.1
|
|
57.5
|
|
206.9
|
|
223.6
|
Other intangible
assets impairment charge
|
—
|
|
—
|
|
—
|
|
150.4
|
Loss (gain) on
divestitures – net
|
1,020.1
|
|
—
|
|
1,018.5
|
|
(9.6)
|
Change in net
cumulative unallocated derivative gains
and losses
|
(22.0)
|
|
(14.5)
|
|
21.4
|
|
23.4
|
Cost of products sold
– special project costs
|
1.5
|
|
3.0
|
|
6.4
|
|
20.5
|
Other special project
costs
|
2.0
|
|
2.9
|
|
4.7
|
|
8.0
|
Other infrequently
occurring items:
|
|
|
|
|
|
|
|
Unrealized loss (gain)
on investment in equity
securities(A)
|
3.8
|
|
—
|
|
3.8
|
|
—
|
Adjusted income before
income taxes
|
$366.9
|
|
$309.1
|
|
$1,252.5
|
|
$1,260.1
|
Income taxes, as
adjusted
|
87.2
|
|
69.0
|
|
301.7
|
|
297.9
|
Adjusted
income
|
$279.7
|
|
$240.1
|
|
$950.8
|
|
$962.2
|
|
|
|
|
|
|
|
|
Weighted-average
shares outstanding – assuming dilution
|
105.9
|
|
107.8
|
|
106.6
|
|
108.4
|
|
|
|
|
|
|
|
|
Adjusted earnings per
share – assuming dilution(B)
|
$2.64
|
|
$2.23
|
|
$8.92
|
|
$8.88
|
|
|
|
|
|
|
|
|
(A)
Unrealized loss (gain) on investment in equity securities includes
unrealized gains and losses on the changes in fair value on the
Company's investment in Post common stock.
|
(B) Adjusted
earnings per common share – assuming dilution for 2023 and 2022 was
computed using the treasury stock method. Further,
in 2023, the weighted-average shares – assuming dilution differed
from our GAAP weighted-average common shares outstanding –
assuming dilution as a result of the anti-dilutive effect of our
stock-based awards, which were excluded from the computation of net
loss
per share – assuming dilution.
|
The J.M. Smucker
Co.
Unaudited Non-GAAP
Financial Measures
|
|
|
|
|
|
Three Months Ended
April 30,
|
|
Year Ended April
30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
(Dollars in
millions)
|
EBITDA (as adjusted)
reconciliation:
|
|
|
|
|
|
|
|
Net income
(loss)
|
($600.7)
|
|
$202.1
|
|
($91.3)
|
|
$631.7
|
Income tax expense
(benefit)
|
(77.9)
|
|
58.1
|
|
82.1
|
|
212.1
|
Interest expense –
net
|
35.3
|
|
38.0
|
|
152.0
|
|
160.9
|
Depreciation
|
57.6
|
|
56.6
|
|
229.6
|
|
235.5
|
Amortization
|
40.1
|
|
57.5
|
|
206.9
|
|
223.6
|
Other intangible
assets impairment charge
|
—
|
|
—
|
|
—
|
|
150.4
|
Loss (gain) on
divestitures – net
|
1,020.1
|
|
—
|
|
1,018.5
|
|
(9.6)
|
EBITDA (as
adjusted)
|
$474.5
|
|
$412.3
|
|
$1,597.8
|
|
$1,604.6
|
% of net
sales
|
21.2 %
|
|
20.3 %
|
|
18.7 %
|
|
20.1 %
|
|
|
|
|
|
|
|
|
Free cash flow
reconciliation:
|
|
|
|
|
|
|
|
Net cash provided by
(used for) operating
activities
|
$437.4
|
|
$393.7
|
|
$1,188.0
|
|
$1,136.3
|
Additions to property,
plant, and equipment
|
(138.7)
|
|
(173.0)
|
|
(471.0)
|
|
(417.5)
|
Free cash
flow
|
$298.7
|
|
$220.7
|
|
$717.0
|
|
$718.8
|
The following tables
provide a reconciliation of the Company's fiscal year 2024 guidance
for estimated adjusted
earnings per share and free cash flow.
|
|
|
|
Year Ending April 30,
2024
|
|
|
Low
|
|
High
|
Net income per common
share – assuming dilution reconciliation:
|
|
|
|
|
Net income per common
share – assuming dilution
|
|
$7.93
|
|
$8.33
|
Change in net
cumulative unallocated derivative gains and
losses(A)
|
|
0.12
|
|
0.12
|
Amortization
|
|
1.15
|
|
1.15
|
Adjusted earnings per
share
|
|
$9.20
|
|
$9.60
|
|
|
|
|
|
(A) We are unable to project derivative gains and
losses on a forward-looking basis as these will vary each
quarter
based on market conditions and derivative positions taken. The
change in unallocated derivative gains and losses in
the table above reflects the net impact of the gains and losses
that have been recognized in the Company's GAAP
results and excluded from non-GAAP results as of April 30, 2023,
that are expected to be allocated to non-GAAP
results in future periods.
|
|
|
|
|
|
|
|
Year Ending
April 30, 2024
|
|
|
|
|
(Dollars in
millions)
|
|
|
Free cash flow
reconciliation:
|
|
|
|
|
Net cash provided by
operating activities
|
|
$1,200
|
|
|
Additions to property,
plant, and equipment
|
|
(550)
|
|
|
Free cash
flow
|
|
$650
|
|
|
![The J.M. Smucker Co. logo (PRNewsfoto/The J.M. Smucker Co.) The J.M. Smucker Co. logo (PRNewsfoto/The J.M. Smucker Co.)](https://mma.prnewswire.com/media/1966679/JMSmuckerCo_Logo.jpg)
View original content to download
multimedia:https://www.prnewswire.com/news-releases/the-jm-smucker-co-announces-fiscal-year-2023-fourth-quarter-results-301843469.html
SOURCE The J.M. Smucker Co.