UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended April 30, 1997
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 1-5111
THE J. M. SMUCKER COMPANY
Ohio 34-0538550
State of Incorporation I.R.S. Employer Identification No.
One Strawberry Lane
Orrville, Ohio 44667-0280
Principal executive offices
Telephone number: (330) 682-3000
|
Securities registered pursuant to Section 12(b) of the Act:
Class A Common Shares, no par value Registered on the
Class B Common Shares, no par value New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
The Registrant has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and has been subject to such filing requirements for at least the past 90 days.
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ X ]
As of June 30, 1997, 14,398,467 Class A Common Shares and 14,769,703 Class B Common Shares of The J. M. Smucker Company were issued and outstanding. The aggregate market value of the voting Common Shares (Class A) held by non-affiliates of the Registrant at June 30, 1997, was $238,548,954.
Certain sections of the Registrant's definitive Proxy Statement, dated July 9, 1997, for the August 12, 1997 Annual Meeting of Shareholders and of the 1997 Annual Report to Shareholders are incorporated by reference into Parts I, II, III and IV of this Report.
PART I
ITEM 1. BUSINESS
THE COMPANY. The J. M. Smucker Company was begun in 1897 and was incorporated in Ohio in 1921. The Company, often referred to as Smucker's (a registered trademark), operates in one industry, the manufacturing and marketing of food products on a worldwide basis. Unless otherwise indicated by the context, the term "Company" as used in this report means the continuing operations of The J. M. Smucker Company and its subsidiaries.
DISCONTINUED OPERATIONS. On May 31, 1996, the Company completed the sale of its Mrs. Smith's frozen pie business to a subsidiary of Flowers Industries, Inc. for a combination of cash and notes receivable. In connection with this divestiture, the Company also has entered into agreements to lease property, plant, and equipment of the Mrs. Smith's frozen pie business to Flowers Industries, Inc. under 10-year operating lease agreements, which include the exclusive right and option to purchase such assets during the term of the leases. The future minimum rental revenue from these leases is approximately $28,935,000.
PRINCIPAL PRODUCTS. The principal products of the Company are fruit spreads, dessert toppings, peanut butter, industrial fruit products (such as bakery and yogurt fillings), fruit and vegetable juices, juice beverages, syrups, condiments, and gift packages.
The Company is structured around six strategic business areas:
Consumer, Beverage, International, Foodservice, Industrial, and Specialty Foods.
Within the domestic markets, the Company's products are primarily sold through
brokers to chain, wholesale, cooperative, and independent grocery accounts and
other consumer markets, and to foodservice distributors and chains including
hotels, restaurants, and institutions. Industrial products such as bakery and
fruit fillings are typically sold directly to other food manufacturers and
marketers for inclusion in their products.
The Company's distribution outside the United States is principally in Canada, Australia and the Pacific Rim, and Latin America, although products are exported to other countries as well. International sales represent approximately 12.2% of total consolidated Company sales.
SOURCES AND AVAILABILITY OF RAW MATERIALS. The fruit raw materials used by the Company in the production of its food products are generally purchased from independent growers and suppliers, although the Company grows some strawberries for its own use. Because of the seasonal nature and volatility of quantities of most of the crops on which the Company depends, it is necessary to prepare and freeze stocks of fruit, fruit juices, berries, and other food products and to maintain them in cold storage warehouses. Sweeteners, peanuts, and other ingredients are obtained from various other sources.
PATENTS AND TRADEMARKS. The Company's products are marketed under
numerous trademarks owned by the Company. The principal trademarks are the
Company's names and certain designs of products. Major trademarks include:
Smucker's, The R. W. Knudsen Family, After The Fall, Simply Nutritious, Mary
Ellen, Dickinson's, Lost Acres, IXL, Laura Scudder's, Simply Fruit, Good
Morning, Double Fruit, Low Sugar, Goober, Magic Shell, Sundae Syrup, Recharge,
Santa Cruz Original, Spritzer, and Heinke. In addition, the Company licenses the
use of several other trademarks, none of which individually is material to the
Company's business.
Other slogans or designs considered to be important trademarks to the Company include the slogan, "With a name like Smucker's, it has to be good," " 100 Years of Family-Made Goodness," the Smucker's banner, the Crock Jar shape, the Gingham design, and the strawberry logo.
SEASONALITY. Historically, the Company's business has not been highly seasonal.
WORKING CAPITAL. Working capital requirements are greatest during the late spring and summer months due to seasonal procurement of fruits, berries, and peanuts. During this period, short-term borrowings may be used to augment working capital generated by sales.
CUSTOMERS. The Company is not dependent either on a single customer or on a very few customers for a major part of its sales. No single domestic or foreign customer accounts for more than 10% of consolidated sales.
ORDERS. Generally, orders are filled within a few days of receipt and the backlog of unfilled orders at any particular time is not material.
GOVERNMENT BUSINESS. The Company has no material portion of its business which may be subject to negotiation of profits or termination of contracts at the election of the government.
COMPETITION. The Company is the U.S. market leader in the fruit spreads, ice cream topping, and natural peanut butter categories. The Company's business is highly competitive as all its brands compete for retail shelf space with other advertised and branded products as well as unadvertised and private label products. The growth of alternative store formats (i.e. warehouse club and mass merchandise stores) and changes in business practices, resulting from both technological advances and new industry techniques, have added additional variables for companies in the food industry to consider in order to remain competitive. The principal methods of and factors in competition are product quality, price, advertising, and promotion.
RESEARCH AND DEVELOPMENT. The Company predominantly utilizes in-house programs to both develop new products and improve existing products in each of its strategic business areas. In relation to consolidated assets and operating expenses, amounts expensed in each of the areas or in the aggregate were not material in any of the last three years.
ENVIRONMENTAL MATTERS. Compliance with the provisions of federal, state, and local environmental regulations regarding either the discharge of materials into the environment or the protection of the environment is not expected to have a material effect upon the capital expenditures, earnings, or competitive position of the Company.
EMPLOYEES. At April 30, 1997, the Company had approximately 1,950 full-time employees, worldwide.
SEGMENT AND GEOGRAPHIC INFORMATION. Information concerning international operations for the years 1997, 1996, and 1995 is hereby incorporated by reference from the 1997 Annual Report to Shareholders, on page 24 under Note B: "Operating Segments."
ITEM 2. PROPERTIES
The table below lists all the Company's manufacturing and fruit processing facilities. All of the Company's properties are maintained and updated on a regular basis, and the Company continues to make investment for expansion and technological improvements. All production properties listed below are owned except the facility in Oxnard, California, which is leased. In addition to the locations listed below, acreage is leased in California for the growing of strawberries. The Company also leases property in Pottstown, Pennsylvania to a subsidiary of Flowers Industries, Inc. The corporate headquarters are located in Orrville, Ohio.
DOMESTIC MANUFACTURING LOCATIONS PRODUCTS PRODUCED
----------------------------------------------------------------------------------------
Orrville, Ohio Fruit spreads, toppings, industrial fruit products
Salinas, California Fruit spreads, toppings
Memphis, Tennessee Fruit spreads, toppings
Ripon, Wisconsin Fruit spreads, toppings, condiments
New Bethlehem, Pennsylvania Peanut butter and Goober products
Chico, California Fruit and vegetable juices, beverages
Havre de Grace, Maryland Fruit and vegetable juices, beverages
FRUIT PROCESSING LOCATIONS FRUIT PROCESSED
----------------------------------------------------------------------------------------
Watsonville, California Strawberries, oranges, apples, peaches, apricots.
Also, produces industrial fruit products.
Woodburn, Oregon Strawberries, raspberries, blackberries,
blueberries. Also produces industrial fruit
products.
Grandview, Washington Grapes, cherries, strawberries, cranberries
Oxnard, California Strawberries
INTERNATIONAL MANUFACTURING
LOCATIONS PRODUCTS PRODUCED
----------------------------------------------------------------------------------------
Ste-Marie, Quebec, Canada Fruit spreads, pie fillings, sweet spreads
Kyabram, Victoria, Australia Fruit spreads, toppings, fruit pulps
|
ITEM 3. LEGAL PROCEEDINGS
The Company is not a party to any pending legal proceeding which would be considered material.
ITEM 4. SUBMISSIONS OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
EXECUTIVE OFFICERS OF THE COMPANY
The names, ages as of July 1, 1997, and positions of the executive
officers of the Company are listed below. All executive officers serve at the
pleasure of the Board of Directors, with no fixed term of office. Paul H.
Smucker is the father of Tim and Richard K. Smucker and the father-in-law of H.
Reid Wagstaff. All of the officers have held various positions with the Company
for more than five years.
Years with Served as an
Name Age Company Position Officer Since
----------------------------------------------------------------------------------------------------------------------
Paul H. Smucker 80 58 Chairman of the Executive Committee 1946
Tim Smucker 53 28 Chairman 1973
Richard K. Smucker 49 24 President 1974
Vincent C. Byrd 42 20 Vice President and General Manager, 1988
Consumer Market
K. Edwin Dountz 55 21 Vice President - Sales 1982
Fred A. Duncan 51 19 Vice President and General Manager, 1984
Industrial Market
Steven J. Ellcessor 45 11 Vice President - Administration, 1986
Secretary, and General Counsel
Robert E. Ellis 50 19 Vice President - Human Resources 1996
Richard G. Jirsa 51 22 Corporate Controller 1978
Charles A. Laine 61 32 Vice President and General Manager, 1984
International and Beverage Markets
R. Alan McFalls 52 20 Vice President - Corporate Development and 1984
Planning
John D. Milliken 52 23 Vice President - Logistics and Business Process 1981
Reengineering
Robert R. Morrison 62 36 Vice President - Operations 1967
H. Reid Wagstaff 62 21 Vice President - Government and Environmental 1994
Affairs
Philip P. Yuschak 58 21 Treasurer 1989
|
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS
The information pertaining to the market for the Company's Common Shares and other related shareholder information is hereby incorporated by reference from the Company's 1997 Annual Report to Shareholders under the caption "Stock Price Data" on page 13.
ITEM 6. SELECTED FINANCIAL DATA
Five year summaries of selected financial data for the Company and discussions of accounting changes which materially affect the comparability of the selected financial data are hereby incorporated by reference from the Company's 1997 Annual Report to Shareholders under the following captions and page numbers: "Five Year Summary of Selected Financial Data" on page 12 and Note C: "Acquisitions and Divestitures" on page 25.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS
Management's discussion and analysis of results of operations and financial condition, including a discussion of liquidity and capital resources, is hereby incorporated by reference from the Company's 1997 Annual Report to Shareholders, on pages 14 and 15.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Consolidated financial statements of the Company at April 30, 1997, 1996, and 1995, and for each of the three years in the period ended April 30, 1997, with the report of independent auditors and selected unaudited quarterly financial data, are hereby incorporated by reference from the Company's 1997 Annual Report to Shareholders on page 13 and pages 16 through 31.
ITEM 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information regarding directors and nominees for directorship is incorporated herein by reference from the Company's definitive Proxy Statement, dated July 9, 1997, for the 1997 Annual Meeting of Shareholders on August 12, 1997, on pages 2 through 4, under the caption "Election of Directors." For information concerning the Company's executive officers, see "Executive Officers of the Company" set forth in Part I hereof.
Information regarding disclosure of late filers pursuant to Item 405 of Regulation S-K is incorporated herein by reference from the Company's definitive Proxy Statement, dated July 9, 1997, for the 1997 Annual Meeting of Shareholders on August 12, 1997, on pages 13 and 14 under the caption "Ownership of Common Shares."
ITEM 11. EXECUTIVE COMPENSATION
Information regarding the compensation of directors and executive officers is incorporated by reference from the Company's definitive Proxy Statement, dated July 9, 1997, for the 1997 Annual Meeting of Shareholders on August 12, 1997, under the following captions and page numbers: "Additional Information Concerning the Board of Directors of the Company" on pages 4 and 5, and beginning with "Report of the Executive Compensation Committee of the Board of Directors" on page 5 and continuing through "Pension Plan" on page 11.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Information regarding security ownership of certain beneficial owners of the named executive officers, and of directors and executive officers as a group, is hereby incorporated by reference from the Company's definitive Proxy Statement, dated July 9, 1997, for the 1997 Annual Meeting of Shareholders on August 12, 1997, on pages 13 and 14 under the caption "Ownership of Common Shares."
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information regarding certain relationships and related transactions is hereby incorporated by reference from the Company's definitive Proxy Statement dated July 9, 1997, for the 1997 Annual Meeting of Shareholders on August 12, 1997, under the captions "Election of Directors" and "Additional Information Concerning the Board of Directors of the Company" on pages 2 through 5.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) 1, 2. Financial Statements and Financial Statement Schedules
The index to Consolidated Financial Statements and Financial Statement Schedules is included on page F-1 of this Report.
3. Exhibits
3(a) 1991 Amended Articles of Incorporation incorporated by reference to the 1992 Annual Report on Form 10-K.
3(b) Amended Regulations incorporated by reference to the 1988 Annual Report on Form 10-K.
10(a) Amended Restricted Stock Bonus Plan incorporated by reference to the 1994 Annual Report on Form 10-K.
10(b) Top Management Supplemental Retirement Benefit Plan incorporated by reference to the 1994 Annual Report on Form 10-K.
10(c) 1987 Stock Option Plan incorporated by reference to the 1994 Annual Report on Form 10-K.
10(d) Management Incentive Plan incorporated by reference to the 1996 Annual Report on Form 10-K.
10(e) Nonemployee Director Stock Plan dated January 1, 1997
13 Excerpts from 1997 Annual Report to Shareholders
21 Subsidiaries of the Registrant
23 Consent of Independent Auditors
24 Powers of Attorney
27 Financial Data Schedules
All other required exhibits are either inapplicable to the Company or require no answer.
Copies of exhibits are not attached hereto, but the Company will furnish any of the foregoing exhibits to any shareholder upon written request. Please address inquiries to: The J. M. Smucker Company, Strawberry Lane, Orrville, Ohio 44667, Attention: Steven J. Ellcessor, Secretary. A fee of $1 per page will be charged to help defray the cost of handling, copying, and return postage.
(b) Reports on Form 8-K filed in the Fourth Quarter of 1997.
On April 23, 1997, the Company filed a Current Report on Form 8-K with the Securities and Exchange Commission reporting that it issued a press release announcing the Company's Board of Directors had authorized the purchase, from time to time, of up to 1,000,000 Class A and/or Class B Common Shares in total.
(c) The response to this portion of Item 14 is submitted as a separate section of this report.
(d) The response to this portion of Item 14 is submitted as a separate section of this report.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: July 23, 1997 The J. M. Smucker Company
By: Steven J. Ellcessor Secretary
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this Report on Form 10-K has been signed below by the following persons on behalf of the Registrant and in the capacities and on the date indicated.
----------------------------------------
Paul H. Smucker Chairman of the Executive Committee and Director
(Principal Executive Officer)
----------------------------------------
Tim Smucker Chairman and Director
(Principal Executive Officer)
----------------------------------------
Richard K. Smucker President and Director
(Principal Executive Officer)
(Principal Financial Officer)
----------------------------------------
Richard G. Jirsa Corporate Controller
(Principal Accounting Officer)
----------------------------------------
Kathryn W. Dindo Director
----------------------------------------
Elizabeth Valk Long Director
----------------------------------------
Russell G. Mawby Director By: Steven J. Ellcessor
Attorney-in-Fact
----------------------------------------
Charles S. Mechem, Jr. Director
Date: July 23, 1997
----------------------------------------
Robert R. Morrison Director
----------------------------------------
William H. Steinbrink Director
----------------------------------------
Benjamin B. Tregoe, Jr. Director
----------------------------------------
William Wrigley, Jr. Director
|
THE J. M. SMUCKER COMPANY
ANNUAL REPORT ON FORM 10-K
ITEMS 14(a) (1) AND (2), (c) AND (d)
INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES
CERTAIN EXHIBITS
FINANCIAL STATEMENT SCHEDULES
Form Annual
10-K Report To
Report Shareholder
------ -----------
Data incorporated by reference from the 1997 Annual Report
to Shareholders of The J. M. Smucker Company:
Consolidated Balance Sheets at April 30, 1997 and 1996........................ 18-19
For the years ended April 30, 1997, 1996, and 1995:
Statements of Consolidated Income ......................................... 17
Statements of Consolidated Cash Flows ..................................... 20
Statements of Consolidated Shareholders' Equity ........................... 21
Notes to Consolidated Financial Statements ................................ 22-31
Consolidated financial statement schedules at April 30, 1997,
or for the years ended April 30, 1997, 1996, and 1995:
II. Valuation and qualifying accounts .................................... F-2
|
All other schedules are omitted because they are not applicable or because the information required is included in the Consolidated Financial Statements or the notes thereto.
THE J. M. SMUCKER COMPANY
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
YEARS ENDED APRIL 30, 1997, 1996 AND 1995
(DOLLARS IN THOUSANDS)
Balance at Charged to Charged to Deduc- Balance at
Beginning Costs and Other tions End of
Classification of Year Expenses Accounts (A) Period
--------------------------------------------------------------------------------------------------------------------------
1997:
Valuation allowance for
deferred tax assets $2,009 $ 85 $ --- $ --- $2,094
Allowance for doubtful accounts 687 93 --- 427 353
-------------------------------------------------------------------------
$2,696 $ 178 $ --- $ 427 $2,447
=========================================================================
1996:
Valuation allowance for
deferred tax assets $2,660 $ (651) $ --- $ --- $2,009
Allowance for doubtful accounts 475 385 --- 173 687
-------------------------------------------------------------------------
$3,135 $ (266) $ --- $ 173 $2,696
=========================================================================
1995:
Valuation allowance for
deferred tax assets $2,265 $ 395 $ --- $ --- $2,660
Allowance for doubtful accounts 419 195 --- 139 475
-------------------------------------------------------------------------
$2,684 $ 590 $ --- $ 139 $3,135
=========================================================================
|
(A) Uncollectible accounts written off, net of recoveries.
Exhibit 10(e)
THE J. M. SMUCKER COMPANY
NONEMPLOYEE DIRECTOR STOCK PLAN
EFFECTIVE JANUARY 1, 1997
PAGE
----
Article 1. Establishment, Purpose, and Duration ....................... 1
1.1. Establishment of the Plan .................................. 1
1.2. Purpose of the Plan ........................................ 1
1.3. Duration of the Plan ....................................... 1
Article 2. Definitions ................................................ 1
Article 3. Administration ............................................. 3
3.1. The Compensation Committee ................................. 3
3.2. Administration by the Committee ............................ 3
3.3. Decisions Binding. ......................................... 3
Article 4. Eligibility and Participation .............................. 3
4.1. Eligibility ................................................ 3
4.2. Actual Participation ....................................... 3
Article 5. Awards for Existing Nonemployee Directors .................. 3
5.1. Grant of Deferred Stock Units .............................. 3
5.2. Vesting of Deferred Stock Units ............................ 3
Article 6. Deferred Stock Units for New Nonemployee Directors ......... 4
6.1. Initial Grant of Deferred Stock Units ...................... 4
6.2. Annual Awards of Deferred Stock Units ...................... 4
6.3. Vesting of Deferred Stock Units ............................ 4
Article 7. Deferral of Retainers, Committee Fees, and Meeting Fees .... 4
7.1. Deferral of Retainers, Committee Fees, and Meeting Fees .... 4
7.2. Election ................................................... 4
7.3. Number of Deferred Stock Units ............................. 4
7.4. Vesting of Deferred Stock Units ............................ 4
Article 8. Deferred Stock Units ....................................... 4
8.1. Deferred Stock Unit Account ................................ 4
8.2. Dividend Equivalents ....................................... 5
8.3. Amount of Payout ........................................... 5
8.4. Timing and Method of Payout ................................ 5
8.5. Funding Mechanism for Deferred Stock Units ................. 6
Article 9. Amendment, Modification, and Termination ................... 6
9.1. Amendment, Modification, and Termination ................... 6
9.2. Awards Previously Granted .................................. 6
Article 10. Miscellaneous............................................... 6
10.1. Gender and Number........................................... 6
10.2. Severability................................................ 6
10.3. Beneficiary Designation..................................... 6
10.4. Nonalienation of Interest................................... 7
10.5. Interest of Participant..................................... 7
10.6. No Right of Nomination...................................... 7
10.7. Shares Available............................................ 7
10.8. Successors.................................................. 7
10.9. Requirements of Law......................................... 7
10.10 Governing Law............................................... 7
|
THE J. M. SMUCKER COMPANY
NONEMPLOYEE DIRECTOR STOCK PLAN
ARTICLE 1. ESTABLISHMENT, PURPOSE, AND DURATION
1.1. ESTABLISHMENT OF THE PLAN. The J. M. Smucker Company hereby establishes an incentive compensation plan to be known as the "The J. M. Smucker Company Nonemployee Director Stock Plan" (the "Plan"), as set forth in this document. The Plan provides for the acquisition of Deferred Stock Units by Nonemployee Directors, subject to the terms and provisions set forth herein.
Upon approval by the Board of Directors of the Company, the Plan shall become effective as of January 1, 1997 (the "Effective Date"), and shall remain in effect as provided in Section 1.3 herein.
1.2. PURPOSE OF THE PLAN. The purpose of the Plan is to promote the achievement of long-term objectives of the Company by linking the personal interests of Nonemployee Directors to those of the Company's shareholders and to attract and retain Nonemployee Directors of outstanding competence.
1.3. DURATION OF THE PLAN. The Plan shall commence on the Effective Date and shall remain in effect subject to the right of the Board of Directors to terminate the Plan at any time pursuant to Article 9. However, in no event may an Award be granted under the Plan on or after December 31, 2015. The maximum number of Shares paid out under the Plan shall be 100,000 (as adjusted pursuant to Section 8.1) unless otherwise determined by the Board of Directors.
ARTICLE 2. DEFINITIONS
Whenever used in the Plan, the following terms shall have the meanings set forth below when the initial letter of the word is capitalized:
(a) "Award" means, individually or collectively, an award under this Plan of Deferred Stock Units.
(b) "Beneficial Owner" shall have the meaning ascribed to such term in Rule 13d-3 of the General Rules and Regulations under the Exchange Act.
(c) "Board" or "Board or Directors" means the Board of Directors of the Company.
(d) "Code" means the Internal Revenue Code of 1986, as amended from time to time.
(e) "Committee" means the Compensation Committee of the Board of Directors of the Company.
(f) "Company" means The J. M. Smucker Company, an Ohio corporation, together with any and all Subsidiaries, and any successor thereto as provided in Section 10.8.
(g) "Deferred Stock Unit" or "Unit" means an Award acquired by a Participant as a measure of participation under the Plan, and is the equivalent of one Share.
(h) "Director" means any individual who is a member of the Board of Directors of the Company.
(i) "Disability" means a permanent and total disability, within the meaning of Code Section 22(e)(3).
(j) "Employee" means any full-time, nonunion, salaried employee of the Company or of the Company's Subsidiaries. For purposes of the Plan, an individual whose only employment relationship with the Company is as a Director, shall not be deemed to be an Employee.
(k) "Exchange Act" means the Securities Exchange Act of 1934, as amended from time to time, or any successor Act thereto.
(l) "Existing Nonemployee Director" means a Nonemployee Director whose original election to the Board occurred prior to the Effective Date.
(m) "Fair Market Value" shall mean the average of the highest and lowest quoted selling prices for Shares on the relevant date, or (if there were no sales on such date) the weighted average of the means between the highest and lowest quoted selling prices on the nearest day before and the nearest day after the relevant date.
(n) "New Nonemployee Director" means a Nonemployee Director whose original election to the Board occurred after the Effective Date.
(o) "Nonemployee Director" means any individual who is a member of the Board of Directors of the Company, but who is neither a current nor a retired Employee of the Company.
(p) "Participant" means a Nonemployee Director of the Company who has an outstanding Award granted under the Plan.
(q) "Person" shall have the meaning ascribed to such term in
Section 3(a)(9) of the Exchange Act and used in Sections 13(d)
and 14(d) thereof, including a "group" as defined in Section
13(d).
(r) "Retirement" means any termination of services on the Board at a time when the Director has served on the Board for at least five (5) years.
(s) "Shares" means the Class A Common Shares of the Company, no par value, or such other securities as may have been substituted for such Shares pursuant to any adjustment of Accounts under Section 8.1 of the Plan.
(t) "Subsidiary" means any corporation in which the Company owns directly, or indirectly through subsidiaries, at least fifty percent (50%) of the total combined voting power of all classes of stock, or any other entity
(including, but not limited to, partnerships and joint ventures) in which the Company owns at least fifty percent (50%) of the combined equity thereof.
ARTICLE 3. ADMINISTRATION
3.1. THE COMPENSATION COMMITTEE. The Plan shall be administered by the Compensation Committee of the Board of Directors of the Company, subject to the restrictions set forth in the Plan.
3.2. ADMINISTRATION BY THE COMMITTEE. The Committee shall have the full power, discretion, and authority to interpret and administer the Plan in a manner which is consistent with the Plan's provisions. However, in no event shall the Committee have the power to determine Plan eligibility, or to determine the number, the value, the vesting period, or the timing of Awards to be made under the Plan (all such determinations being automatic pursuant to the provisions of the Plan).
3.3. DECISIONS BINDING. All determinations and decisions made by the Committee pursuant to the Plan, and all related orders or resolutions of the Committee shall be final, conclusive, and binding on all persons, including the Company, its shareholders, Employees, Participants, and their estates and beneficiaries.
ARTICLE 4. ELIGIBILITY AND PARTICIPATION
4.1. ELIGIBILITY. Persons eligible to participate in the Plan are limited to Nonemployee Directors who are serving on the Board on the date of each scheduled Award under the Plan.
4.2. ACTUAL PARTICIPATION. All Nonemployee Directors are eligible to participate as follows:
(a) All Existing Nonemployee Directors shall receive Awards of Deferred Stock Units pursuant to Article 5;
(b) All New Nonemployee Directors herein shall receive Awards of Deferred Stock Units pursuant to Article 6; and
(c) All Nonemployee Directors shall be eligible to acquire Deferred Stock Units in connection with deferrals pursuant to Article 7.
ARTICLE 5. AWARDS FOR EXISTING NONEMPLOYEE DIRECTORS
5.1. GRANT OF DEFERRED STOCK UNITS. On the Effective Date, each Existing Nonemployee Director shall receive a one-time Award of seven thousand five hundred (7,500) Deferred Stock Units.
5.2. VESTING OF DEFERRED STOCK UNITS. A Participant's Deferred Stock Units shall become vested at the rate of one thousand five hundred (1,500) Shares per year for each year of service on the Board, beginning on the first anniversary of his or her original election to the Board; PROVIDED, HOWEVER, that upon death or Disability, all of a Participant's outstanding Deferred Stock Units shall vest immediately. Participants with five (5) or more years of service on the Board as of the Effective Date shall receive fully
vested Deferred Stock Units. Any Deferred Stock Units not vested at the time of payout set forth in Section 8.4 shall be forfeited.
ARTICLE 6. DEFERRED STOCK UNITS FOR NEW NONEMPLOYEE DIRECTORS
6.1. INITIAL GRANT OF DEFERRED STOCK UNITS. Each individual who is a New Nonemployee Director, shall receive an Award of four hundred (400) Deferred Stock Units on the date of his or her original election to the Board.
6.2. ANNUAL AWARDS OF DEFERRED STOCK UNITS. Commencing with the annual meeting of the Company's shareholders following his or her original election to the Board, each New Nonemployee Director shall receive four hundred (400) Deferred Stock Units, effective as of the day following each annual shareholders' meeting, subject to a lifetime maximum of six thousand (6,000) Deferred Stock Units to be granted to any individual New Nonemployee Director under this Article 6.
6.3. VESTING OF DEFERRED STOCK UNITS. All Deferred Stock Units awarded under this Article 6 shall vest one hundred percent (100%) upon the award of such Deferred Stock Units.
ARTICLE 7. DEFERRAL OF RETAINERS, COMMITTEE FEES, AND MEETING FEES
7.1. DEFERRAL OF RETAINERS, COMMITTEE FEES, AND MEETING FEES. During the term of this Plan, any Nonemployee Director may elect to receive all or fifty percent (50%) of the cash portion of his or her annual retainer, committee fees, and meeting fees in the form of Deferred Stock Units. Such election to receive Deferred Stock Units shall be subject to the provisions of this Article 7.
7.2. ELECTION. Any election to receive all or fifty percent (50%) of a Nonemployee Director's annual retainer, committee fees, and meeting fees in the form of Deferred Stock Units shall be made before the first day of the year for which such compensation would otherwise be paid. New Nonemployee Directors, however, may make such election with respect to their initial retainer upon their original election to the Board. Each such election may pertain to more than one (1) scheduled retainer payment.
7.3. NUMBER OF DEFERRED STOCK UNITS. The number of Deferred Stock Units to be granted in connection with an election pursuant to Section 7.2 shall equal the cash portion of the retainer and fees being deferred into Deferred Stock Units, divided by the Fair Market Value of a Share on the date of the scheduled payment of the amount deferred.
7.4. VESTING OF DEFERRED STOCK UNITS. Subject to the terms of this Plan, all Deferred Stock Units acquired under this Article 7 shall vest one hundred percent (100%) upon the acquisition of such Deferred Stock Units.
ARTICLE 8. DEFERRED STOCK UNITS
8.1. DEFERRED STOCK UNIT ACCOUNT. A Deferred Stock Unit Account (the "Account") shall be established and maintained by the Company for each Participant who receives an Award under the Plan. Each Account shall be the record of the Deferred
Stock Units acquired by the Participant under Articles 5, 6, and 7 of the Plan on each applicable grant date, shall be maintained solely for accounting purposes, and shall not require a segregation of any Company assets.
The Board shall make or provide for such adjustments in the number and kind of Shares in each Director's Account as the Board, in its sole discretion, exercised in good faith, shall determine is equitably required to prevent dilution or enlargement of the rights of the Nonemployee Directors that would otherwise result from (a) any stock dividend, stock split, combination of shares, recapitalization or any other change in the capital structure of the Company, (b) any merger, consolidation, spin-off, split-off, spin-out, split-up, reorganization, partial or complete liquidation or other distribution of assets, issuance of rights or warrants to purchase securities, or (c) any other corporate transaction or event having an effect similar to any of the foregoing.
8.2. DIVIDEND EQUIVALENTS. Dividend equivalents shall be earned on Deferred Stock Units provided under this Plan. Such dividend equivalents shall be converted into equivalent amounts of Deferred Stock Units and added to Participant's Accounts. Deferred Stock Units resulting from dividend equivalents shall become vested to the extent the underlying Deferred Stock Units become vested in accordance with Section 5.2 of the Plan.
8.3. AMOUNT OF PAYOUT. Except as provided otherwise in this Plan, the total amount payable to a Participant shall be one Share for each Deferred Stock Unit, if any, at the date of payout as determined in accordance with Section 8.4.
8.4. TIMING AND METHOD OF PAYOUT. Except as otherwise provided herein, vested Deferred Stock Units shall be paid to Participants, in Shares, within thirty (30) days following each Participant's termination of service on the Board. Payout of a Participant's Account shall be made in one of the following forms as elected by the Participant:
(a) By payment in Shares in a single distribution;
(b) By payment in Shares in not greater than ten annual installments; or
(c) A combination of (a) and (b) above. The Participant shall designate the percentage payable under each option.
Fractional Shares shall be rounded down to the nearest whole Share, and such fractional amount shall be paid in cash.
The Participant's election of the form of payout shall be made by written notice filed with the Committee at least one year prior to the Participant's voluntary termination as a Director. Any such election may be changed by the Participant at any time or from time to time; provided that any election made less than one year prior to the Director's voluntary termination as a Director shall not be valid, and in such case payment shall be made in accordance with the Participant's prior election. Absent an election from the Participant, the payment shall be made in Shares in a single distribution. In the event of a Director's death, the balance of his or her Account shall be distributed to his or her beneficiary in shares in a single distribution, even if the Participant had elected distribution in installments.
Each Participant shall have the right to require the Company to retain so much of any distribution as may be necessary to provide for the payment of applicable taxes, and the Company will cause the amount so retained to be paid or deposited on behalf of the Participant.
8.5. FUNDING MECHANISM FOR DEFERRED STOCK UNITS. The Company shall be entitled, but not obligated, to establish a grantor trust or similar funding mechanism to fund the Company's obligations under this Plan; PROVIDED, HOWEVER, that any funds contained therein shall remain subject to the claims of the Company's general creditors. The funding mechanism shall constitute an unfunded arrangement and shall not affect the status of the Plan as an unfunded plan maintained for the purpose of providing compensation for a select group of management for purposes of Title I of the Employee Retirement Income Securities Act of 1974. This mechanism may be funded through the acquisition of Shares and in that event, Existing Nonemployee Directors shall be given the right to direct the exercise of voting rights with respect to their respective interests in those Shares.
ARTICLE 9. AMENDMENT, MODIFICATION, AND TERMINATION
9.1. AMENDMENT, MODIFICATION, AND TERMINATION. Subject to the terms set forth in this Section 9.1, the Board may terminate, amend, or modify the Plan at any time and from time to time.
9.2. AWARDS PREVIOUSLY GRANTED. Unless required by law, no termination, amendment, or modification of the Plan shall in any material manner adversely affect any Award previously provided under the Plan, without the written consent of the Participant holding the Award.
ARTICLE 10. MISCELLANEOUS
10.1. GENDER AND NUMBER. Except where otherwise indicated by the context, any masculine term used herein also shall include the feminine; the plural shall include the singular and the singular shall include the plural.
10.2. SEVERABILITY. In the event any provision of the Plan shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of the Plan, and the Plan shall be construed and enforced as if the illegal or invalid provision had not been included.
10.3. BENEFICIARY DESIGNATION. Each Participant under the Plan may, from time to time, name any beneficiary or beneficiaries (who may be named contingently or successively) to whom any benefit under the Plan is to be paid in the event of his or her death. Each designation will revoke all prior designations by the same Participant, shall be in a form prescribed by the Board, and will be effective only when filed by the Participant in writing with the Board during his or her lifetime. In the absence of any such designation or if no designated beneficiary survives the Participant, benefits remaining unpaid at the Participant's death shall be paid to the Participant's estate in Shares in a single distribution.
10.4. NONALIENATION OF INTEREST. Except as permitted by this Plan, no right or interest under this Plan of any Participant or beneficiary shall, without the written consent of the Company, be (i) assignable or transferable in any manner, (ii) subject to alienation, anticipation, sale, pledge, encumbrance, attachment, garnishment, or other legal process, or (iii) in any manner liable for or subject to the debts or liabilities of the Participant or beneficiary.
10.5. INTEREST OF PARTICIPANT. The obligation of the Company under the Plan to make payment under this Plan merely constitutes the unsecured promise of the Company to make payments in the form of its Shares, as provided herein, and no Participant or beneficiary shall have any interest in, or lien or prior claim upon, any property of the Company. It is the intention of the Company that the Plan be unfunded for tax purposes and for purposes of Title I of the Employee Retirement Income Securities Act of 1974.
10.6. NO RIGHT OF NOMINATION. Nothing in the Plan shall be deemed to create any obligation on the part of the Board to nominate any Director for reelection by the Company's shareholders.
10.7. SHARES AVAILABLE. Shares delivered by the Company under the Plan shall be treasury shares, or Shares which have been or may be reacquired by the Company. Any funding mechanism as described in Section 8.5 of this Plan may acquire treasury shares from the Company or purchase Shares on the open market.
10.8. SUCCESSORS. All obligations of the Company under the Plan with respect to Awards granted hereunder shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business and/or assets of the Company.
10.9. REQUIREMENTS OF LAW. The granting of Awards under the Plan shall be subject to all applicable laws, rules, and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required.
10.10. GOVERNING LAW. The Plan, and all agreements hereunder, shall be construed in accordance with and governed by the internal, substantive laws of the State of Ohio.
Exhibit 13
Five Year Summary of Selected Financial Data
----------------------------------------------------------------------------------------------------------------------------
Year Ended April 30, 1997 1996 1995 1994 1993
----------------------------------------------------------------------------------------------------------------------------
(Dollars in thousands, except per share data)
Statement of Income:
Net sales $542,602 $528,576 $510,888 $478,228 $462,160
Income before cumulative effect
of change in accounting method 30,935 29,453 32,461 31,931 37,399
Income from continuing operations (1) 30,935 29,453 32,461 31,931 32,945
(Loss) Income from discontinued
operations (2) --- (140) 3,842 (1,433) ---
Net income 30,935 29,313 36,303 30,498 32,945
----------------------------------------------------------------------------------------------------------------------------
Financial Position:
Long-term debt --- 60,800 67,100 48,558 887
Total assets 384,773 424,952 405,995 362,851 294,811
----------------------------------------------------------------------------------------------------------------------------
Other Data:
Per Common Share:
Income before cumulative effect
of change in accounting method 1.06 1.01 1.11 1.10 1.27
Income from continuing operations (1) 1.06 1.01 1.11 1.10 1.12
Income (Loss) from discontinued
operations (2) --- --- 0.14 (0.05) ---
Net income 1.06 1.01 1.25 1.05 1.12
Dividends declared per Common Share:
Class A 0.52 0.52 0.505 0.47 0.43
Class B 0.52 0.52 0.505 0.47 0.43
----------------------------------------------------------------------------------------------------------------------------
|
(1) Includes, in 1993, the cumulative effect of adopting the provisions of Statement of Financial Accounting Standards No. 106, Employers' Accounting for Postretirement Benefits Other Than Pensions.
(2) Represents Mrs. Smith's as described in Note C to the consolidated financial statements.
Summary of Quarterly Results of Operations
The following is a summary of unaudited quarterly results of operations for the
years ended April 30, 1997 and 1996.
Income
Income Income (Loss) Net
Income (Loss) per Share per Share Income
from From from from per
Quarter Net Gross Continuing Discontinued Net Continuing Discontinued Common
Ended Sales Profit Operations Operations Income Operations Operations Share
-------------------------------------------------------------------------------------------------------------------------------
1997 July 31 $134,154 $48,271 $7,489 $ --- $7,489 $0.26 $ --- $0.26
October 31 142,844 48,687 7,818 --- 7,818 0.26 --- 0.26
January 31 124,479 44,096 6,533 --- 6,533 0.23 --- 0.23
April 30 141,125 52,599 9,095 --- 9,095 0.31 --- 0.31
-------------------------------------------------------------------------------------------------------------------------------
1996 July 31 $133,897 $48,602 $9,384 $140 $9,524 $0.33 $ --- $0.33
October 31 142,563 49,380 8,635 781 9,416 0.29 0.03 0.32
January 31 121,207 44,834 5,856 481 6,337 0.20 0.02 0.22
April 30 130,909 48,665 5,578 (1,542) 4,036 0.19 (0.05) 0.14
-------------------------------------------------------------------------------------------------------------------------------
|
Stock Price Data
The Company's Class A and Class B Common Shares are listed on the New York Stock Exchange - ticker symbols SJMA and SJMB, respectively. The table below presents the high and low market prices for the shares and the quarterly dividends declared. The number of Class A and Class B shareholders of record as of June 30, 1997 was 6,692 and 4,302, respectively.
Class A Common Shares Class B Common Shares
--------------------------------------------------------------------------------------------------------------------------------
Quarter Ended High Low Dividends Quarter Ended High Low Dividends
--------------------------------------------------------------------------------------------------------------------------------
1997 July 31 $21.75 $17.75 $0.13 July 31 $20.38 $17.50 $0.13
October 31 18.25 16.50 0.13 October 31 17.75 15.38 0.13
January 31 18.75 16.50 0.13 January 31 17.38 15.50 0.13
April 30 18.88 16.25 0.13 April 30 17.75 15.63 0.13
--------------------------------------------------------------------------------------------------------------------------------
1996 July 31 $23.63 $20.75 $0.13 July 31 $21.38 $18.63 $0.13
October 31 22.50 19.63 0.13 October 31 22.00 18.00 0.13
January 31 21.75 17.88 0.13 January 31 19.25 15.25 0.13
April 30 22.25 19.63 0.13 April 30 20.63 18.00 0.13
--------------------------------------------------------------------------------------------------------------------------------
|
Management's Discussion and Analysis
On May 31, 1996, the Company completed the sale of the Mrs. Smith's frozen pie business to a subsidiary of Flowers Industries, Inc. Mrs. Smith's has been reflected as a discontinued operation in the accompanying financial statements for fiscal 1997 and prior years. Therefore, this discussion and analysis refers only to the continuing businesses of the Company.
Results of Operations
COMPARISON OF 1997 WITH 1996
During 1997, sales increased nearly 3%, or $14,026,000, over those of the prior year. The Company's Industrial, Foodservice, and Beverage business areas all realized sales increases. The largest increase came in the Industrial area, which achieved a sales increase of 23% over fiscal 1996. The majority of the increase was related to an increase in new and existing business with current customers. The Foodservice area realized a 6% increase in sales, due mostly to volume gains in the portion control and toppings categories. In the Beverage area, the introduction of the R. W. Knudsen Family's Simply Nutritious line of functional / fortified beverages into the natural foods market accounted for much of that area's growth.
Sales in the Consumer area were approximately equal to last year's as a modest decline in grocery was offset by a 15% increase in the mass retail market. Total fruit spreads volume in fiscal 1997 was up over 3%, as the Company recognized substantial gains in its share of the fruit spreads market during the latter half of the year. The dollar sales growth was primarily the result of increased sales of traditional fruit spreads in the mass retail and warehouse clubstore markets and expanded distribution of Smucker's Light, which the Company rolled-out nationally during fiscal 1997. While the roll-out of Light enabled the Company to expand its dominant position in the low calorie / light segment, the fruit-only segment continued to decline. In the peanut butter category, sales increased over last year due to volume growth in Goober products and the roll-out of reduced fat natural peanut butter. Dessert toppings sales were down from fiscal 1996, due mostly to significant competitive activity. Although sales in the Consumer area remained basically unchanged from last year, profitability decreased from fiscal 1996 due to increased marketing expenses, higher fruit costs, and mix of products sold.
In the International area, operating income improved approximately $2,650,000, although sales were down approximately $4,500,000 from the prior year. The sales decline was mostly due to the divestiture of Elsenham Quality Foods, the Company's U. K. subsidiary, in December, 1995. The Company realized sales growth in its Australasian (including China) and Mexican markets. Approximately one-half of the increase in the Australasian market was due to increased sales, and the remainder resulted from favorable exchange rates.
Net income increased approximately 6% this year, as earnings per share rose from $1.01 to $1.06. Sales growth contributed significantly to the overall increase in earnings, particularly in the fourth quarter. The gross profit percentage on these sales decreased from 36.2% to 35.7% as a result of a general increase in the overall cost of fruit raw materials, although this was mitigated somewhat in the second half of the year by the effect of lower corn sweetener prices. Other factors that contributed to the improved profitability for the year included the Company's ongoing cost reduction efforts, including improvements in plant efficiencies and reduced freight and distribution costs, along with the previously mentioned improvement in the Company's International business. Interest expense also decreased approximately $645,000 as the Company reduced its outstanding debt balance during the year.
COMPARISON OF 1996 WITH 1995
Sales in fiscal year 1996 increased 3.5%, or $17,688,000, over those of the prior year. Each of the Company's business areas recorded sales increases, led by the Foodservice area's 11% growth as sales in all of its product categories increased. Sales within the International area increased 7%, resulting from continued growth in Latin America and entrance into new markets in Eastern Europe and Mexico. Beverage sales grew 6% with most of the increase coming from the inclusion of a full year of After The Fall sales. Both the Industrial and Specialty Foods areas contributed solid years, each with increases of over $1,000,000 in sales. Although the Consumer area's sales were up only slightly for the year, they were stronger in the fourth quarter in which there was an 8% increase over the same quarter of fiscal 1995.
Gross profit grew at a 6% rate, increasing the gross profit margin to 36.2% from 35.4%. The increase was due in part to lower costs of certain fruits and raw materials and also to operational efficiencies in the manufacturing plants. The growth in gross profit was offset by a 9% increase in the Company's selling, distribution, and administrative expenses. The increase was due to a greater emphasis on marketing programs to combat competitive pressures in the Consumer fruit spreads category, as well as resources devoted to consulting projects.
Income from continuing operations decreased 9% this year as earnings per share from continuing operations fell from $1.11 to $1.01. Several factors contributed to the decline. Interest expense for the year was up due to both an increase in the average outstanding debt balance and interest rates, which averaged approximately one percentage point higher than during the prior year. Also, other income decreased $1,755,000 this year, primarily due to two factors. First, the fourth quarter included a charge of approximately $1,000,000 for costs associated with the withdrawal of beverage products which contained an undeclared sweetener. In addition, lower profits on frozen fruit sales also contributed to the decline in other income.
A $6,996,000 loss is included in income before income taxes on the disposal of Elsenham Quality Foods, Ltd. This loss represents the write-off of the Company's investment in Elsenham (see Note C). The tax benefit associated with the Elsenham divestiture resulted in a net tax credit and significantly reduced the effective tax rate for the year to 34.2%. Excluding the impact of the Elsenham transaction, the tax rate would have been 42.8% for the year (compared to 40.9% in fiscal 1995). The after-tax impact from this transaction was not material.
Capital Resources and Liquidity
The Company's cash position and overall financial condition strengthened during fiscal 1997 as the Company retired its entire outstanding debt during the year, using a combination of proceeds from the sale of Mrs. Smith's and cash provided from continuing operations. Significant uses of cash during the year included $15,751,000 in capital expenditures, down from record levels last year, and dividends. Dividends paid in fiscal 1997 on all Common Shares were at $0.52 per share or $15,113,000 in total. In addition, during the fourth quarter the Company used cash to acquire the rights to the Kraft retail fruit spreads business in the United States. The Kraft business, which represents approximately a 2% share of the U. S. fruit spreads market, did not contribute materially to the financial results of the fourth quarter.
At the end of the year, the Company replaced its $125,000,000 credit facility with two lines of credit, providing up to $60,000,000 in short-term borrowings. The Company expects to borrow against its lines of credit during fiscal 1998 to finance its annual procurement of fruit and to meet other cash requirements. In addition to working capital requirements, approximately $15,000,000 is expected to be spent in support of the Company's information technology and reengineering project. Other capital expenditures are planned at approximately $17,000,000. The majority of these cash outlays are expected to occur in the first half of the fiscal year.
During fiscal 1997, the Company announced that its Board of Directors had authorized the purchase, from time to time, of up to one million of its Class A and/or Class B Common Shares in total. At this time, the Company does not expect to repurchase the entire one million shares during the upcoming year, although that possibility exists.
Assuming that there are no additional acquisitions or other investments requiring cash outlays and the results of operations are at least comparable to fiscal 1997, the Company expects cash provided from operations and borrowings to be sufficient to meet cash requirements in fiscal 1998.
Certain Forward-Looking Statements
This annual report includes certain forward-looking statements that are based on current expectations and are subject to a number of risks and uncertainties. Actual results may differ depending on a number of factors including: the success of the Company's fruit spreads marketing program during the coming year; competitive activity, including private label; the mix of products sold and the level of marketing expenditures needed to generate those sales; an increase in fruit costs or costs of any other significant ingredients; the ability of the Company to maintain and/or improve sales and earnings performance of its non-retail business areas; and the implementation of the Company's information technology project.
Statements of Consolidated Income
The J. M. Smucker Company
--------------------------------------------------------------------------------------------------
(Dollars in thousands, except per share data)
--------------------------------------------------------------------------------------------------
Year Ended April 30, 1997 1996 1995
--------------------------------------------------------------------------------------------------
Net sales $ 542,602 $ 528,576 $ 510,888
Cost of products sold 348,949 337,095 330,287
--------------------------------------------------------------------------------------------------
Gross Profit 193,653 191,481 180,601
Selling, distribution, and administrative expenses 140,449 137,487 126,045
--------------------------------------------------------------------------------------------------
Operating Income 53,204 53,994 54,556
Interest income 2,048 1,173 770
Other (expense) income - net (338) (983) 772
--------------------------------------------------------------------------------------------------
54,914 54,184 56,098
Interest expense 1,748 2,393 1,218
Loss on disposal of foreign subsidiary -- 6,996 --
--------------------------------------------------------------------------------------------------
Income before Income Taxes 53,166 44,795 54,880
Income taxes 22,231 15,342 22,419
--------------------------------------------------------------------------------------------------
Income from Continuing Operations $ 30,935 $ 29,453 $ 32,461
Discontinued Operations:
Income from discontinued operations, net -- 1,284 3,842
of income taxes
Loss on discontinuance, net of income taxes -- (1,424) --
--------------------------------------------------------------------------------------------------
Net Income $ 30,935 $ 29,313 $ 36,303
==================================================================================================
Income per Common Share:
Continuing Operations $ 1.06 $ 1.01 $ 1.11
Discontinued Operations -- -- 0.14
--------------------------------------------------------------------------------------------------
Net Income per Common Share $ 1.06 $ 1.01 $ 1.25
==================================================================================================
|
See notes to consolidated financial statements
Consolidated Balance Sheets
The J. M. Smucker Company
-------------------------------------------------------------------------------------------------------------
(Dollars in thousands)
-------------------------------------------------------------------------------------------------------------
Assets April 30,
-------------------------------------------------------------------------------------------------------------
1997 1996
-------------------------------------------------------------------------------------------------------------
Current Assets
Cash and cash equivalents $ 24,091 $ 17,647
Trade receivables, less allowance for doubtful accounts 48,140 40,241
Income tax refundable --- 2,998
Inventories:
Finished products 39,054 37,381
Raw materials, containers, and supplies 55,052 58,114
-------------------------------------------------------------------------------------------------------------
94,106 95,495
Assets of discontinued operations - net --- 42,250
Other current assets 12,135 15,831
-------------------------------------------------------------------------------------------------------------
Total Current Assets 178,472 214,462
-------------------------------------------------------------------------------------------------------------
Property, Plant, and Equipment
Land and land improvements 13,820 13,719
Buildings and fixtures 74,709 73,400
Machinery and equipment 170,160 163,078
Construction in progress 6,881 2,615
-------------------------------------------------------------------------------------------------------------
265,570 252,812
Accumulated depreciation (125,935) (109,728)
-------------------------------------------------------------------------------------------------------------
Total Property, Plant, and Equipment 139,635 143,084
-------------------------------------------------------------------------------------------------------------
Other Noncurrent Assets
Goodwill 34,041 31,336
Trademarks and patents 11,352 12,762
Assets of discontinued operations - net --- 13,875
Notes receivable 13,109 ---
Other assets 8,164 9,433
-------------------------------------------------------------------------------------------------------------
Total Other Noncurrent Assets 66,666 67,406
-------------------------------------------------------------------------------------------------------------
$384,773 $424,952
==============================================================================================================
|
-----------------------------------------------------------------------------------------------------------------------
(Dollars in thousands)
-----------------------------------------------------------------------------------------------------------------------
Liabilities and Shareholders' Equity April 30,
-----------------------------------------------------------------------------------------------------------------------
1997 1996
-----------------------------------------------------------------------------------------------------------------------
Current Liabilities
Accounts payable $36,582 $37,211
Salaries, wages, and additional compensation 9,636 8,845
Accrued marketing and merchandising 11,057 9,750
Income taxes 4,116 ---
Dividends payable 3,823 3,810
Other current liabilities 6,802 7,894
-----------------------------------------------------------------------------------------------------------------------
Total Current Liabilities 72,016 67,510
-----------------------------------------------------------------------------------------------------------------------
Noncurrent Liabilities
Long-term debt --- 60,800
Postretirement benefits other than pensions 11,068 10,541
Deferred income taxes 7,604 8,488
Other noncurrent liabilities 2,194 1,272
-----------------------------------------------------------------------------------------------------------------------
Total Noncurrent Liabilities 20,866 81,101
-----------------------------------------------------------------------------------------------------------------------
Shareholders' Equity
Serial Preferred Shares - no par value: --- ---
Authorized-3,000,000 shares; outstanding-none
Common Shares - no par value:
Class A - Authorized-35,000,000 shares; 3,606 3,597
outstanding-14,423,126 in 1997 and 14,387,639 in 1996
(net of 1,789,162 and 1,824,649 treasury shares,
respectively), at stated value
Class B - (Non-voting) Authorized-35,000,000 shares; 3,696 3,696
outstanding-14,785,203 in 1997, and 14,782,339 in 1996
(net of 1,427,085 and 1,429,949 treasury shares,
respectively), at stated value
Additional capital 12,439 11,469
Retained income 284,605 269,036
Less:
Deferred compensation (1,396) (727)
Amount due from ESOP Trust (10,027) (10,251)
Currency translation adjustment (1,032) (479)
-----------------------------------------------------------------------------------------------------------------------
Total Shareholders' Equity 291,891 276,341
-----------------------------------------------------------------------------------------------------------------------
$384,773 $424,952
=======================================================================================================================
|
See notes to consolidated financial statements
Statements of Consolidated Cash Flows
The J. M. Smucker Company
----------------------------------------------------------------------------------------------------------
(Dollars in thousands)
----------------------------------------------------------------------------------------------------------
Year Ended April 30, 1997 1996 1995
----------------------------------------------------------------------------------------------------------
Operating Activities
Income from continuing operations $ 30,935 $ 29,453 $ 32,461
Adjustments to reconcile income from continuing
operations to net cash provided by operating activities:
Depreciation 18,337 15,288 13,292
Amortization 3,502 2,185 2,872
Loss on disposal of foreign subsidiaries -- 6,996 --
Deferred income taxes 4,026 764 119
Changes in assets and liabilities, net of effects from
business acquisitions and discontinued operations:
Trade receivables (8,043) 1,931 678
Inventories 1,792 (9,738) (7,137)
Other current assets (1,174) (350) (7,058)
Accounts payable and accrued items 341 3,841 (2,384)
Income Taxes 7,114 (6,856) 1,734
Other - net 2,693 4,297 (1,028)
----------------------------------------------------------------------------------------------------------
Net Cash Provided by Operating Activities 59,523 47,811 33,549
----------------------------------------------------------------------------------------------------------
Investing Activities
Business acquired - net of cash (5,593) -- (28,780)
Additions to property, plant, and equipment (15,751) (25,585) (18,963)
Proceeds from the sale of property, plant, and equipment 627 722 580
Proceeds from the sale of assets of discontinued operations 44,695 -- --
Other - net 767 1,494 724
----------------------------------------------------------------------------------------------------------
Net Cash Provided by (Used for) Investing Activities 24,745 (23,369) (46,439)
----------------------------------------------------------------------------------------------------------
Financing Activities
Proceeds from long-term debt -- -- 18,542
Reduction in long-term debt (60,800) (6,300) --
(Purchase) sale of Common Shares - net (245) 98 (195)
Net amount received from ESOP 224 190 229
Dividends paid (15,113) (15,123) (14,503)
Other - net 140 1,104 348
----------------------------------------------------------------------------------------------------------
Net Cash (Used for) Provided by Financing Activities (75,794) (20,031) 4,421
----------------------------------------------------------------------------------------------------------
Cash flows provided by (used in) continuing operations 8,474 4,411 (8,469)
Cash flows (used in)provided by discontinued operations (1,858) 1,901 5,527
Effect of exchange rate changes on cash (172) 91 127
Net increase (decrease) in cash and cash equivalents 6,444 6,403 (2,815)
Cash and cash equivalents at beginning of year 17,647 11,244 14,059
----------------------------------------------------------------------------------------------------------
Cash and Cash Equivalents at End of Year $ 24,091 $ 17,647 $ 11,244
----------------------------------------------------------------------------------------------------------
|
( ) Denotes use of cash
See notes to consolidated financial statements
Statements of Consolidated Shareholders' Equity
The J. M. Smucker Company
---------------------------------------------------------------------------------------------------------------------------
(Dollars in thousands)
---------------------------------------------------------------------------------------------------------------------------
Amount
Common Shares Deferred due Currency Share-
-------------- Additional Retained Compen- from ESOP Translation holders'
Class A Class B Capital Income sation Trust Adjustment Equity
---------------------------------------------------------------------------------------------------------------------------
Balance at April 30, 1994 $3,590 $3,687 $9,261 $233,420 $ (576) $(10,670) $(4,310) $234,402
Net income 36,303 36,303
Purchase of treasury shares (2) (3) (190) (195)
Stock plans 8 8 1,337 (716) 637
Cash dividends declared- (14,679) (14,679)
$.505 a share
Other 368 229 927 1,524
---------------------------------------------------------------------------------------------------------------------------
Balance at April 30, 1995 $3,596 $3,695 $10,963 $254,854 $(1,292) $(10,441) $(3,383) $257,992
Net income 29,313 29,313
Purchase of treasury shares (14) (14)
Stock plans 1 1 110 565 677
Cash dividends declared- (15,117) (15,117)
$.52 a share
Other 396 190 2,904 3,490
---------------------------------------------------------------------------------------------------------------------------
Balance at April 30, 1996 $3,597 $3,696 $11,469 $269,036 $ (727) $(10,251) $ (479) $276,341
Net income 30,935 30,935
Purchase of treasury shares (3) (2) (240) (245)
Stock plans 12 841 (669) 184
Cash dividends declared- (15,126) (15,126)
$.52 a share
Other 131 224 (553) (198)
---------------------------------------------------------------------------------------------------------------------------
Balance at April 30, 1997 $3,606 $3,696 $12,439 $284,605 $ (1,396) $(10,027) $(1,032) $291,891
---------------------------------------------------------------------------------------------------------------------------
|
See notes to consolidated financial statements
Notes to Consolidated Financial Statements The J. M. Smucker Company
On May 31, 1996, the Company completed the sale of the Mrs. Smith's frozen pie business to a subsidiary of Flowers Industries, Inc. Mrs. Smith's has been reflected as a discontinued operation in the accompanying financial statements for fiscal 1997 and prior years. Accordingly, unless otherwise stated, the accompanying notes for all years presented exclude amounts related to this discontinued business.
Note A: Accounting Policies
Principles of Consolidation: The consolidated financial statements include the accounts of the Company and its subsidiaries, all of which are wholly-owned. All significant intercompany transactions and accounts are eliminated in consolidation.
Cash and Cash Equivalents: The Company considers all short-term investments with a maturity of three months or less to be cash equivalents.
Financial Instruments: The fair value of the Company's financial instruments approximates their carrying amounts.
Use of Estimates: The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.
Stock Compensation: Effective May 1, 1996, the Company adopted Statement of Financial Accounting Standards No. 123, Accounting for Stock-Based Compensation (SFAS 123). Under SFAS 123, companies may elect to adopt the fair value method of accounting for stock-based compensation or continue to use Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees (APB 25) to measure expense associated with stock-based compensation. The Company has elected to continue to follow APB 25 which results in net income and earnings per share that are not materially different from amounts determined using the fair value method of SFAS 123.
Inventories: The Company values its inventories at the lower of cost or market, with market considered as replacement value. Cost is determined on the last-in, first-out (LIFO) method for the majority of domestic inventories. Inventories not on the LIFO method are valued principally by the first-in, first-out (FIFO) method. If the FIFO method (which approximates current cost) had been used for all inventories, the balances would have been $13,643,000 and $10,502,000 higher than reported at April 30, 1997 and 1996, respectively.
Goodwill and Intangible Assets: The excess cost over net assets of businesses acquired and other intangibles, principally trademarks and patents, are being amortized using the straight-line method over periods ranging from 5 to 40 years. The Company continually evaluates whether events or circumstances have occurred which would indicate the carrying value may not be recoverable or the useful life warrants revision. When factors indicate that goodwill and other intangible assets should be evaluated for possible impairment, the Company analyzes the future recoverability of the asset using an estimate of the related undiscounted future cash flows of the business, and recognizes any adjustment to its carrying value on a current basis. Accumulated amortization of goodwill and intangible assets at April 30, 1997 and 1996, was $17,209,000 and $14,545,000, respectively.
Property, Plant, and Equipment: Property, plant, and equipment are recorded at cost and are depreciated on a straight-line basis over the estimated useful lives of the assets, as follows: 3 to 15 years for machinery and equipment, and 10 to 40 years for buildings, fixtures, and improvements. Property sold or retired is eliminated from the accounts in the year of disposition.
Software Costs: The Company capitalizes significant costs associated with the development and installation of internal use software. Amounts deferred are amortized over the estimated useful lives of the software beginning with the project's completion. Net deferred internal software costs as of April 30, 1997 and 1996 were $4,976,000 and $689,000, respectively.
Foreign Currency Translation: Assets and liabilities of the Company's foreign subsidiaries are translated using the exchange rates in effect at the balance sheet date, while income and expenses are translated using average rates. Translation adjustments are reported as a separate component of shareholders' equity.
Advertising Expense: Advertising costs are expensed as incurred. Advertising expense was $10,321,000, $9,421,000, and $10,213,000 in fiscal 1997, 1996, and 1995, respectively.
Recently Issued Accounting Standards: In March 1995, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards No. 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of (SFAS 121), which requires impairment losses to be recorded on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets' carrying amount. SFAS 121 also addresses the accounting for long-lived assets that are expected to be disposed of. The Company adopted SFAS 121 in the first quarter of fiscal 1997 and the impact was not material.
In February 1997, the FASB issued Statement of Financial Accounting Standards No. 128, Earnings Per Share (SFAS 128). SFAS 128 replaces the presentation of primary earnings per share (EPS) under Accounting Principles Board Opinion No. 15 and related Interpretations, with the presentation of basic EPS (which primarily gives effect only to common shares actually outstanding) and requires dual presentation of basic and diluted EPS on the face of the income statement for all of the entities with complex capital structures. The Company is required to adopt SFAS 128 during fiscal 1998. The Company has not completed its evaluation of the potential impact of this new standard on EPS in future periods, but it does not expect a material impact on earnings per share.
Risks and Uncertainties: The principal products of the Company are fruit spreads, dessert toppings, peanut butter, industrial fruit products (such as bakery and yogurt fillings), fruit and vegetable juices, juice beverages, syrups, condiments, and gift packages. Within the domestic markets, the Company's products are primarily sold through brokers to chain, wholesale, cooperative, and independent grocery accounts and other consumer markets, and to foodservice distributors and chains including hotels, restaurants, and institutions. Industrial products are typically sold directly to other food manufacturers. The Company's distribution outside the United States is principally in Canada, Australia and the Pacific Rim, and Latin America. The fruit raw materials used by the Company are generally purchased from independent growers and suppliers, although the Company grows some strawberries for its own use. Because of the seasonal nature and volatility of quantities of most of the crops on which the Company depends, it is necessary to prepare and freeze stocks of fruit and fruit juices and to maintain them in cold storage warehouses. The Company believes there is no concentration of risk with any single customer or supplier whose failure or non-performance would materially affect the Company's results. In addition, the Company insures its business and assets in each country against insurable risks in a manner that it deems appropriate. It believes that the risk of loss from non-insurable events would not have a material adverse effect on the Company's operations as a whole.
Net Income Per Common Share: Net income per Common Share is based on the weighted-average number of the Class A Common Shares and Class B Common Shares considered outstanding during the year.
Note B: Operating Segments
The Company operates in one industry: the manufacturing and marketing of food products. The following presents information about operations in different geographic areas:
--------------------------------------------------------------------------------------
(Dollars in thousands)
--------------------------------------------------------------------------------------
Year Ended April 30, 1997 1996 1995
--------------------------------------------------------------------------------------
Net sales:
United States $476,558 $458,040 $444,796
Foreign 66,044 70,536 66,092
--------------------------------------------------------------------------------------
Total net sales $542,602 $528,576 $510,888
--------------------------------------------------------------------------------------
Operating income:
United States $85,507 $ 87,905 $ 84,544
Foreign 5,045 2,392 2,123
--------------------------------------------------------------------------------------
90,552 90,297 86,667
Corporate expenses (37,348) (36,303) (32,111)
--------------------------------------------------------------------------------------
Total operating income $53,204 $ 53,994 $ 54,556
--------------------------------------------------------------------------------------
Identifiable assets:
United States $326,739 $365,697 $344,734
Foreign 58,034 59,255 61,261
--------------------------------------------------------------------------------------
Total assets $384,773 $424,952 $405,995
--------------------------------------------------------------------------------------
|
Identifiable assets include corporate and all other assets identified with operations in each geographic area. There was no material amount of transfers between geographic areas.
Note C: Acquisitions and Divestitures
In fiscal 1995, the Company acquired the Laura Scudder's natural peanut butter business and After The Fall Products, Inc. In conjunction with these acquisitions, the Company purchased $5,250,000 and $17,746,500 of intangible assets, respectively, consisting primarily of goodwill. The Company plans to amortize the intangible assets over 40 years using the straight-line method.
The Company recorded these transactions using the purchase method of accounting and, accordingly, results of operations subsequent to the dates of acquisition are included in the consolidated financial statements.
As previously noted, on May 31, 1996, the Company completed the sale of its Mrs. Smith's frozen pie business to a subsidiary of Flowers Industries, Inc. for a combination of cash and notes receivable. In connection with this divestiture, the Company also entered into agreements to lease certain property, plant, and equipment to a Flowers Industries subsidiary under operating lease agreements. Mrs. Smith's revenues were $2,926,000, $104,582,000, and $117,391,000 for the years ended April 30, 1997, 1996, and 1995, respectively. Based upon debt specifically identified to Mrs. Smith's, interest expense of $271,000, $3,244,000, and $3,297,000 was allocated to discontinued operations in fiscal 1997, 1996, and 1995, respectively. Income tax (benefit) or expense allocated to discontinued operations was ($2,069,000) and $2,658,000 in fiscal 1996 and 1995, respectively.
The net assets sold have been reported in the accompanying consolidated balance sheet at April 30, 1996 as assets of discontinued operations and are classified as current and noncurrent based on the timing of the consideration to be received. A summary of the net assets sold is as follows:
(Dollars in thousands) April
30,
------------------------------------------------------
1996
---------
Accounts receivable $ 9,638
Inventory 26,685
Intangibles 29,692
Other assets 398
---------
Assets 66,413
Accounts payable $ 4,197
Accrued compensation 1,579
Accrued marketing 4,198
Other liabilities 314
---------
Liabilities 10,288
---------
Net assets $ 56,125
=========
|
In December 1995, the Company divested its English subsidiary, Elsenham Quality Foods Ltd., resulting in a pretax loss of $6,996,000. A tax benefit of $6,870,000 was recognized associated with this transaction.
Note D: Retirement Plans
The Company has pension plans covering substantially all of its employees. Benefits are based on the employee's years of service and compensation. The Company's plans are funded in conformity with the funding requirements of applicable government regulations. Net periodic pension cost included the following components:
----------------------------------------------------------------------------------------------------------
Year Ended April 30,
----------------------------------------------------------------------------------------------------------
(Dollars in thousands) 1997 1996 1995
----------------------------------------------------------------------------------------------------------
Service cost-benefits earned during the period $ 1,481 $ 1,537 $ 1,640
Interest cost on projected benefit obligation 3,816 3,684 3,404
Actual return on plan assets (3,681) (6,343) (2,640)
Deferred (loss) gain (498) 2,620 (927)
Net amortization and deferral 381 373 386
----------------------------------------------------------------------------------------------------------
Net periodic pension cost $ 1,499 $ 1,871 $ 1,863
----------------------------------------------------------------------------------------------------------
|
The following sets forth in the aggregate the funded status and amounts recognized in the Company's consolidated balance sheets for all Company-administered domestic pension plans:
----------------------------------------------------------------------------------------------------------------
April 30,
----------------------------------------------------------------------------------------------------------------
(Dollars in thousands) 1997 1996
----------------------------------------------------------------------------------------------------------------
Actuarial present value of accumulated benefit obligation:
Vested benefits $40,695 $39,984
Non-vested benefits 3,440 4,090
----------------------------------------------------------------------------------------------------------------
Accumulated benefit obligation 44,135 44,074
----------------------------------------------------------------------------------------------------------------
Projected benefit obligation for service
rendered to date 50,840 51,773
Plan assets at fair value 50,055 47,359
----------------------------------------------------------------------------------------------------------------
Projected benefit obligation in excess of plan assets (785) (4,414)
Unrecognized prior service cost 4,989 5,350
Unrecognized net gain from past experience (4,212) (449)
Unamortized net asset at transition (1,413) (1,504)
----------------------------------------------------------------------------------------------------------------
Accrued pension cost $(1,421) $(1,017)
----------------------------------------------------------------------------------------------------------------
|
The expected long-term rate of return on plan assets was 9% for 1997, 1996, and 1995. Plan assets consist of listed stocks and government obligations, including 168,000 of both of the Company's Class A and Class B Common Shares at April 30, 1997 and 1996. The discount rate was 7.75% and 7.5% in 1997 and 1996, respectively, while the rate of increase in future compensation levels used in determining the actuarial present value of the projected benefit obligations was 5.25% and 5.5% in 1997 and 1996, respectively. Prior service costs are being amortized over the average remaining service lives of the employees expected to receive benefits. Included in the above table is the unfunded supplemental retirement benefit plan which had a projected benefit obligation of $6,889,000 and $6,798,000 in 1997 and 1996, respectively.
The Company also charged to operations approximately $687,000, $651,000, and $691,000 in 1997, 1996, and 1995, respectively, for contributions to foreign pension plans and to plans not administered by the Company on behalf of employees subject to certain labor contracts. These amounts were determined in accordance with foreign actuarial computations and provisions of those labor contracts. For those plans not self-administered, the Company is unable to determine its share of either the accumulated plan benefits or net assets available for benefits under those plans.
Note E: Postretirement Benefits Other Than Pensions
In addition to providing pension benefits, the Company sponsors several unfunded defined postretirement plans which provide health care and life insurance benefits to substantially all active and retired, domestic, non-represented employees, and their covered dependents and beneficiaries. These plans are contributory, with retiree contributions adjusted periodically, and contain other cost-sharing features, such as deductibles and coinsurance. Covered employees generally are eligible for these benefits when they have reached age 55 and attained 10 years of service.
Net periodic postretirement benefit cost related to these plans for 1997, 1996, and 1995 included the following components:
--------------------------------------------------------------------------------------------------
Year Ended April 30,
--------------------------------------------------------------------------------------------------
(Dollars in thousands) 1997 1996 1995
--------------------------------------------------------------------------------------------------
Service cost $ 424 $ 427 $ 472
Interest cost 708 657 662
Net amortization and deferral (12) (64) ---
--------------------------------------------------------------------------------------------------
Net periodic postretirement benefit cost $1,120 $1,020 $1,134
--------------------------------------------------------------------------------------------------
|
The following table sets forth the combined status of the plans as recognized in the consolidated balance sheets at April 30, 1997 and 1996:
------------------------------------------------------------------------------------------
April 30,
------------------------------------------------------------------------------------------
(Dollars in thousands) 1997 1996
------------------------------------------------------------------------------------------
Accumulated benefit obligation:
Retirees $3,256 $2,685
Fully eligible active participants 1,604 1,373
Other active participants 4,728 4,676
Unrecognized actuarial gain 1,480 1,807
------------------------------------------------------------------------------------------
Postretirement benefits other than pensions $11,068 $10,541
------------------------------------------------------------------------------------------
|
The discount rate assumption used to determine the actuarial present value of the accumulated postretirement benefit obligation was 7.75% in 1997 and 7.5% in 1996. For 1998, the assumed health care cost trend rates are 9.25% for participants under age 65 and 7.25% for participants age 65 or older. Both rates are assumed to decrease gradually to 5% in the year 2003. The health care cost trend rate assumption has a significant effect on the amount of the obligation and periodic cost reported. A one percent annual increase in the assumed cost trend rate in each year would increase the accumulated postretirement benefit obligation as of April 30, 1997, by $1,692,000 and the net periodic postretirement benefit cost for the year by $250,000.
In addition, certain of the Company's active employees participate in multi-employer plans which provide defined postretirement health care benefits. The aggregate amount contributed to these plans, including the charge for net periodic postretirement benefit costs, totaled $1,439,000, $1,469,000, and $1,431,000 in 1997, 1996, and 1995, respectively.
Note F: Stock Benefit Plans
ESOP: The Company sponsors an Employee Stock Ownership Plan and Trust (ESOP) for domestic, non-represented employees. The Company has entered into loan agreements with the Trustee of the ESOP for purchases by the Trustee in amounts not to exceed a total of 1,200,000 unallocated Common Shares of the Company at any one time. These shares are to be allocated to participants over a period of not less than 20 years. ESOP loans bear interest at 1/2% over prime and are payable as shares are allocated to participants. Contributions to the plan are made annually in amounts sufficient to fund ESOP debt repayment. Dividends on unallocated shares are used to reduce expense and were $377,000, $398,000, and $406,000 in 1997, 1996, and 1995, respectively. The principal payments received from the ESOP in 1997, 1996, and 1995 were $224,000, $190,000, and $229,000, respectively.
Effective May 1, 1994, the Company adopted Statement of Position 93-6, Employers' Accounting for Employee Stock Ownership Plans (SOP 93-6). This statement requires that compensation expense be measured based upon the fair value of shares committed to be released to plan participants. Under the "grandfather" provision of SOP 93-6, the Company did not apply the statement to shares purchased prior to the transition date of December 31, 1992. Since all shares currently held by the ESOP were acquired prior to 1993, the Company will continue to recognize future compensation expense using the cost basis. At April 30, 1997, the ESOP held 725,048 unallocated shares consisting of 244,124 Class A and 480,924 Class B Common Shares. All shares held by the ESOP were considered outstanding in earnings per share calculations for all periods presented.
Savings Plan: The Company offers an employee savings plan under Section 401(k) of the Internal Revenue Code for all domestic employees not covered by collective bargaining agreements. The Company's contributions under the plan are based on a specified percentage of employee contributions. Charges to operations for this plan in 1997, 1996, and 1995 were $901,000, $890,000, and $871,000, respectively.
Restricted Stock: The Restricted Stock Bonus Plan provides for issuance of Common Shares to key employees. There are 74,600 Class A and 117,600 Class B Common Shares available for issuance under the plan at April 30, 1997. Shares awarded under this plan contain certain restrictions for four years relating, among other things, to forfeiture in the event of termination of employment and to transferability. Shares awarded are issued as of the effective date of the award and recorded at market value. A corresponding deferred compensation charge is expensed over the period during which restrictions are in effect. In fiscal 1995, an award of 31,000 shares of Class A and Class B Common Shares was made. There were no awards made during either fiscal 1997 or 1996.
Stock Options: The Company has a stock option plan covering officers and certain key employees. Options granted under this plan become exercisable at the rate of one-third per year, beginning one year after the date of grant and the option price is equal to the market value of the shares on the effective date of the grant.
A summary of the Company's stock option activity, and related information follows:
---------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------
Weighted- Weighted-
Class A Average Class B Average
Options Exercise Price Options Exercise Price
------- -------------- ------- --------------
Outstanding at April 30, 1994 858,100 $22.93 393,800 $17.57
Granted 87,500 23.69 87,500 21.50
Exercised --- --- --- ---
Forfeited --- --- --- ---
---------------------------------------------------------------------------------------------------------------------------
Outstanding at April 30, 1995 945,600 $23.00 481,300 $18.28
Granted 148,500 18.00 148,500 15.94
Exercised (3,500) 15.94 (3,500) 15.94
Forfeited (6,200) 21.84 (4,200) 20.58
---------------------------------------------------------------------------------------------------------------------------
Outstanding at April 30, 1996 1,084,400 $22.34 622,100 $17.72
Granted 168,000 17.25 168,000 16.25
Exercised (3,288) 11.19 (3,288) 11.19
Forfeited (9,500) 21.50 (6,500) 16.87
---------------------------------------------------------------------------------------------------------------------------
Outstanding at April 30, 1997 1,239,612 $21.69 780,312 $17.44
Exercisable at April 30, 1997 948,113 $22.78 488,813 $17.90
Available for Future Grants
at April 30,
1995 838,331 1,302,631
1996 502,866 965,166
1997 344,366 803,666
===========================================================================================================================
|
The following table summarizes the range of exercise prices and weighted-average exercise prices for options outstanding and exercisable at April 30, 1997 under the Company's stock option plan:
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
Weighted-
Average
Weighted- Remaining Weighted-
Range of Average Contractual Average
Share Class Exercise Prices Outstanding Exercise Price Life (yrs.) Exercisable Exercise Price
---------------- ----------------- -------------- --------------- -------------- ------------ ----------------
Class A $11.19 - $20.00 694,312 $17.61 5.5 431,479 $17.65
Class A $20.01 - $31.50 545,300 $26.89 5.8 516,634 $27.06
Class B $11.19 - $21.50 780,312 $17.44 5.7 488,813 $17.90
---------------------------------------------------------------------------------------------------------------------
|
The Company granted stock options during fiscal 1996 for the purchase of 150,000 Class B Common Shares to non-employees for consulting services rendered. The options, which contain a weighted-average exercise price of $20.75 per share and become exercisable in fiscal 1998, were all considered outstanding at April 30, 1997. The Company recognized expense relating to these options of $66,000 and $165,000 in fiscal 1997 and 1996, respectively.
Note G: Credit Facilities
At the end of fiscal 1997, the Company replaced its previously existing $125,000,000 revolving credit facility with two new lines of credit, providing up to $60,000,000 for short-term borrowings. The interest rate to be charged on any outstanding balances is based on prevailing prime rates. Interest paid on all borrowings approximated total interest expense in each of the three years ended April 30, 1997, 1996, and 1995.
Note H: Leases
The Company leases certain land, buildings, and equipment for varying periods of time, with renewal options. Leases of cold storage facilities are continually renewed for short periods. Rental expense in 1997, 1996, and 1995 totaled $9,783,000, $10,264,000, and $9,908,000, respectively; included therein were cold storage facility rentals, based on quantities stored, amounting to $4,357,000, $4,699,000, and $5,012,000, respectively.
Note I: Income Taxes
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax reporting. Significant components of the Company's deferred tax assets and liabilities are as follows:
----------------------------------------------------------------------------------------------------------
(Dollars in thousands) April 30,
----------------------------------------------------------------------------------------------------------
1997 1996
----------------------------------------------------------------------------------------------------------
Deferred tax liabilities:
Depreciation $13,551 $12,673
Other (each less than 5% of total liabilities) 1,893 1,494
----------------------------------------------------------------------------------------------------------
Total deferred tax liabilities 15,444 14,167
Deferred tax assets:
Postretirement benefits other than pensions 4,697 4,209
Other employee benefits 3,118 3,825
Foreign net operating loss carryforwards 1,234 1,232
Intangible assets 359 3,420
Marketing accruals 217 1,052
Other (each less than 5% of total assets) 4,408 3,083
----------------------------------------------------------------------------------------------------------
Total deferred tax assets 14,033 16,821
Valuation allowance for deferred tax assets (2,094) (2,009)
----------------------------------------------------------------------------------------------------------
Deferred tax assets less allowance 11,939 14,812
----------------------------------------------------------------------------------------------------------
Net deferred tax (liability) asset $(3,505) $ 645
----------------------------------------------------------------------------------------------------------
|
At April 30, 1997, the Company has foreign net operating loss carryforwards of $3,600,000 for income tax purposes with dates expiring from 2001 to 2004. The Company has recorded a valuation allowance related to foreign tax loss carryforwards and certain other foreign deferred tax assets due to the uncertainty of their realization.
Significant components of the provision for income taxes are as follows:
-------------------------------------------------------------------------------------------------------------------------
(Dollars in thousands)
-------------------------------------------------------------------------------------------------------------------------
Year Ended April 30, 1997 1996 1995
-------------------------------------------------------------------------------------------------------------------------
Current
Federal $15,337 $12,787 $19,240
State and local 2,868 1,791 3,060
Deferred 4,026 764 119
-------------------------------------------------------------------------------------------------------------------------
Total income tax expense from continuing operations $22,231 $15,342 $22,419
-------------------------------------------------------------------------------------------------------------------------
|
A reconciliation of the statutory federal income tax rate and the effective tax rate follows:
----------------------------------------------------------------------------------------------------------------------
(Dollars in thousands)
----------------------------------------------------------------------------------------------------------------------
Percent of Pretax Income
----------------------------------------------------------------------------------------------------------------------
Year Ended April 30, 1997 1996 1995
----------------------------------------------------------------------------------------------------------------------
Statutory federal income tax rate 35.0% 35.0% 35.0%
Decrease in income taxes resulting from:
Loss on divestiture of foreign subsidiary --- (8.6) ---
Increase in income taxes resulting from:
State and local income taxes, net of
federal income tax benefit 3.5 3.4 3.6
Foreign losses not utilized --- 1.7 0.7
Other items 3.3 2.7 1.6
----------------------------------------------------------------------------------------------------------------------
Effective income tax rate 41.8% 34.2% 40.9%
----------------------------------------------------------------------------------------------------------------------
Income taxes paid, including amounts for discontinued
operations $10,200 $17,979 $22,521
----------------------------------------------------------------------------------------------------------------------
|
Note J: Common Shares
The Company's Amended Articles of Incorporation provide that but for certain exceptions, those acquiring the Company's Class A Common Shares will be entitled to cast one vote per share on matters requiring shareholder approval until they have held their shares for four years, after which time they will be entitled to cast ten votes per share. The Company's Class B Common Shares are non-voting, except under certain conditions outlined in the Company's Amended Articles of Incorporation.
Exhibit 21
SUBSIDIARIES OF THE COMPANY
State or Jurisdiction
Subsidiaries of Incorporation
-------------------------------------------------- ---------------------------
After The Fall Products, Inc. Ohio
J. M. Smucker (Pennsylvania), Inc. Pennsylvania
The Dickinson Family, Inc. Ohio
Henry Jones Foods Pty. Ltd. Victoria, Australia
Juice Creations Co. Ohio
Knudsen & Sons, Inc. Ohio
Smucker Quality Beverages, Inc. California
Mary Ellen's, Incorporated Ohio
Smucker Holdings, Inc. Ohio
Santa Cruz Natural Incorporated California
Smucker Australia, Inc. Ohio
J. M. Smucker (Canada) Inc. Ontario, Canada
Smucker International, Ltd. U.S. Virgin Islands
Smucker Latin America, Inc. Ohio
J. M. Smucker de Mexico, S.A. de C.V. Mexico (domesticated
in Delaware)
JMS Specialty Foods, Inc. Wisconsin
Smucker Hong Kong Limited Hong Kong
Smucker U.K., Inc. Ohio
Alternative Attitudes, Inc. Ohio
|
Exhibit 23
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in this Annual Report on Form 10-K of The J. M. Smucker Company of our report dated June 10, 1997, included in the 1997 Annual Report to Shareholders of The J. M. Smucker Company.
Our audit also included the financial statement schedule of The J. M. Smucker Company listed in item 14(a). This schedule is the responsibility of the Company's management. Our responsibility is to express an opinion based on our audits. In our opinion, the financial statement schedule referred to above, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.
We also consent to the incorporation by reference in the Registration Statements (Form S-8 No. 33-21273 and Form S-8 No. 33-38011) pertaining to the 1987 Stock Option Plan of our report dated June 10, 1997, with respect to the consolidated financial statements incorporated herein by reference, and our report included in the preceding paragraph with respect to the financial statement schedule included in this Annual Report on Form 10-K of The J. M. Smucker Company.
ERNST & YOUNG LLP
Akron, Ohio
July 18, 1997
Exhibit 24
THE J. M. SMUCKER COMPANY
REGISTRATION ON FORM 10-K
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that KATHRYN W. DINDO, director of The J. M. Smucker Company, hereby appoints Timothy P. Smucker, Richard K. Smucker, and Steven J. Ellcessor, and each of them, with full power of substitution, as attorney or attorneys of the undersigned, to execute an Annual Report on Form 10-K for the fiscal year ended April 30, 1997, in a form that The J. M. Smucker Company deems appropriate and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, all pursuant to applicable legal provisions, with full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as the undersigned director might or could do in person, in furtherance of the foregoing.
/s/ Kathryn W. Dindo -------------------------------- Director |
THE J. M. SMUCKER COMPANY
REGISTRATION ON FORM 10-K
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that RIGHARD G. JIRSA, corporate controller of The J. M. Smucker Company, hereby appoints Timothy P. Smucker, Richard K. Smucker, and Steven J. Ellcessor, and each of them, with full power of substitution, as attorney or attorneys of the undersigned, to execute an Annual Report on Form 10-K for the fiscal year ended April 30, 1997, in a form that The J. M. Smucker Company deems appropriate and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, all pursuant to applicable legal provisions, with full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as the undersigned corporate controller might or could do in person, in furtherance of the foregoing.
/s/ Richard G. Jirsa -------------------------------- Corporate Controller |
THE J. M. SMUCKER COMPANY
REGISTRATION ON FORM 10-K
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that ELIZABETH VALK LONG, director of The J. M. Smucker Company, hereby appoints Timothy P. Smucker, Richard K. Smucker, and Steven J. Ellcessor, and each of them, with full power of substitution, as attorney or attorneys of the undersigned, to execute an Annual Report on Form 10-K for the fiscal year ended April 30, 1997, in a form that The J. M. Smucker Company deems appropriate and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, all pursuant to applicable legal provisions, with full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as the undersigned director might or could do in person, in furtherance of the foregoing.
/s/ Elizabeth Valk Long -------------------------------- Director |
THE J. M. SMUCKER COMPANY
REGISTRATION ON FORM 10-K
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that RUSSELL G. MAWBY, director of The J. M. Smucker Company, hereby appoints Timothy P. Smucker, Richard K. Smucker, and Steven J. Ellcessor, and each of them, with full power of substitution, as attorney or attorneys of the undersigned, to execute an Annual Report on Form 10-K for the fiscal year ended April 30, 1997, in a form that The J. M. Smucker Company deems appropriate and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, all pursuant to applicable legal provisions, with full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as the undersigned director might or could do in person, in furtherance of the foregoing.
/ s / Russell G. Mawby -------------------------------- Director |
THE J. M. SMUCKER COMPANY
REGISTRATION ON FORM 10-K
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that CHARLES S. MECHEM, JR., director of The J. M. Smucker Company, hereby appoints Timothy P. Smucker, Richard K. Smucker, and Steven J. Ellcessor, and each of them, with full power of substitution, as attorney or attorneys of the undersigned, to execute an Annual Report on Form 10-K for the fiscal year ended April 30, 1997, in a form that The J. M. Smucker Company deems appropriate and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, all pursuant to applicable legal provisions, with full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as the undersigned director might or could do in person, in furtherance of the foregoing.
/s/ Charles S. Mechem, Jr. -------------------------------- Director |
THE J. M. SMUCKER COMPANY
REGISTRATION ON FORM 10-K
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that ROBERT R. MORRISON, director of The J. M. Smucker Company, hereby appoints Timothy P. Smucker, Richard K. Smucker, and Steven J. Ellcessor, and each of them, with full power of substitution, as attorney or attorneys of the undersigned, to execute an Annual Report on Form 10-K for the fiscal year ended April 30, 1997, in a form that The J. M. Smucker Company deems appropriate and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, all pursuant to applicable legal provisions, with full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as the undersigned director might or could do in person, in furtherance of the foregoing.
/s/ Robert R. Morrison -------------------------------- Director |
THE J. M. SMUCKER COMPANY
REGISTRATION ON FORM 10-K
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that PAUL H. SMUCKER, director of The J. M. Smucker Company, hereby appoints Timothy P. Smucker, Richard K. Smucker, and Steven J. Ellcessor, and each of them, with full power of substitution, as attorney or attorneys of the undersigned, to execute an Annual Report on Form 10-K for the fiscal year ended April 30, 1997, in a form that The J. M. Smucker Company deems appropriate and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, all pursuant to applicable legal provisions, with full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as the undersigned director might or could do in person, in furtherance of the foregoing.
/s/ Paul H. Smucker -------------------------------- Director |
THE J. M. SMUCKER COMPANY
REGISTRATION ON FORM 10-K
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that RICHARD K. SMUCKER, director of The J. M. Smucker Company, hereby appoints Timothy P. Smucker and Steven J. Ellcessor, and each of them, with full power of substitution, as attorney or attorneys of the undersigned, to execute an Annual Report on Form 10-K for the fiscal year ended April 30, 1997, in a form that The J. M. Smucker Company deems appropriate and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, all pursuant to applicable legal provisions, with full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as the undersigned director might or could do in person, in furtherance of the foregoing.
/s/ Richard K. Smucker -------------------------------- Director |
THE J. M. SMUCKER COMPANY
REGISTRATION ON FORM 10-K
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that TIMOTHY P. SMUCKER, director of The J. M. Smucker Company, hereby appoints Richard K. Smucker and Steven J. Ellcessor, and each of them, with full power of substitution, as attorney or attorneys of the undersigned, to execute an Annual Report on Form 10-K for the fiscal year ended April 30, 1997, in a form that The J. M. Smucker Company deems appropriate and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, all pursuant to applicable legal provisions, with full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as the undersigned director might or could do in person, in furtherance of the foregoing.
/s/ Timothy P. Smucker -------------------------------- Director |
THE J. M. SMUCKER COMPANY
REGISTRATION ON FORM 10-K
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that WILLIAM H. STEINBRINK, director of The J. M. Smucker Company, hereby appoints Timothy P. Smucker, Richard K. Smucker, and Steven J. Ellcessor, and each of them, with full power of substitution, as attorney or attorneys of the undersigned, to execute an Annual Report on Form 10-K for the fiscal year ended April 30, 1997, in a form that The J. M. Smucker Company deems appropriate and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, all pursuant to applicable legal provisions, with full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as the undersigned director might or could do in person, in furtherance of the foregoing.
/s/ William H. Steinbrink -------------------------------- Director |
THE J. M. SMUCKER COMPANY
REGISTRATION ON FORM 10-K
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that BENJAMIN B. TREGOE, JR., director of The J. M. Smucker Company, hereby appoints Timothy P. Smucker, Richard K. Smucker, and Steven J. Ellcessor, and each of them, with full power of substitution, as attorney or attorneys of the undersigned, to execute an Annual Report on Form 10-K for the fiscal year ended April 30, 1997, in a form that The J. M. Smucker Company deems appropriate and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, all pursuant to applicable legal provisions, with full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as the undersigned director might or could do in person, in furtherance of the foregoing.
/s/ Benjamin B. Tregoe, Jr. -------------------------------- Director |
THE J. M. SMUCKER COMPANY
REGISTRATION ON FORM 10-K
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that WILLIAM WRIGLEY, JR., director of The J. M. Smucker Company, hereby appoints Timothy P. Smucker, Richard K. Smucker, and Steven J. Ellcessor, and each of them, with full power of substitution, as attorney or attorneys of the undersigned, to execute an Annual Report on Form 10-K for the fiscal year ended April 30, 1997, in a form that The J. M. Smucker Company deems appropriate and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, all pursuant to applicable legal provisions, with full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as the undersigned director might or could do in person, in furtherance of the foregoing.
/s/ William Wrigley, Jr. -------------------------------- Director |
| ARTICLE 5 |
| MULTIPLIER: 1,000 |
| PERIOD TYPE | YEAR |
| FISCAL YEAR END | APR 30 1997 |
| PERIOD START | MAY 01 1996 |
| PERIOD END | APR 30 1997 |
| CASH | 24,091 |
| SECURITIES | 0 |
| RECEIVABLES | 48,493 |
| ALLOWANCES | 353 |
| INVENTORY | 94,106 |
| CURRENT ASSETS | 178,472 |
| PP&E | 265,570 |
| DEPRECIATION | (125,935) |
| TOTAL ASSETS | 384,773 |
| CURRENT LIABILITIES | 72,016 |
| BONDS | 0 |
| COMMON | 7,302 |
| PREFERRED MANDATORY | 0 |
| PREFERRED | 0 |
| OTHER SE | 284,589 |
| TOTAL LIABILITY AND EQUITY | 384,773 |
| SALES | 542,602 |
| TOTAL REVENUES | 542,602 |
| CGS | 348,949 |
| TOTAL COSTS | 348,949 |
| OTHER EXPENSES | 140,449 |
| LOSS PROVISION | 0 |
| INTEREST EXPENSE | 1,748 |
| INCOME PRETAX | 53,166 |
| INCOME TAX | 22,231 |
| INCOME CONTINUING | 30,935 |
| DISCONTINUED | 0 |
| EXTRAORDINARY | 0 |
| CHANGES | 0 |
| NET INCOME | 30,935 |
| EPS PRIMARY | 1.06 |
| EPS DILUTED | 1.06 |