ORRVILLE, Ohio, June 3,
2021 /PRNewswire/ -- The J.M. Smucker Co. (NYSE: SJM) today
announced results for the fourth quarter of its 2021 fiscal year
ending April 30, 2021. Financial results for the fourth
quarter and fiscal year reflect the divestiture of the
Crisco® business on December 1, 2020, and the divestiture of the
Natural Balance® business on January 29, 2021. All comparisons are to the
fourth quarter of the prior fiscal year, unless otherwise
noted.
EXECUTIVE SUMMARY
- Net sales decreased $171.8
million, or 8 percent. Net sales excluding divestitures and
foreign currency exchange decreased 3 percent, driven by lapping
consumer stock-up purchasing resulting from the COVID-19 pandemic
in the prior year, partially offset by continued elevated at-home
consumption.
- For the full year, net sales were $8.0
billion, an increase of 3 percent. Net sales excluding
divestitures and foreign currency exchange increased 5
percent.
- Net income per diluted share for the quarter was $1.35. Adjusted earnings per share was
$1.89, a decrease of 26 percent.
- For the full year, net income per diluted share was
$7.79. Adjusted earnings per share
was $9.12, an increase of 4
percent.
- Cash from operations was $291.0
million compared to $287.7
million in the prior year. Free cash flow was $183.0 million in the quarter and $1,258.3 million for the full year.
- Return of capital to shareholders, including cash dividends and
share repurchases, was $272.7 million
in the quarter and $1.1 billion for
the full year.
- The Company provided its fiscal 2022 outlook, with an expected
net sales decrease of 2 to 3 percent, adjusted earnings per share
to range from $8.70 to $9.10, and free cash flow of $900 million.
CHIEF EXECUTIVE OFFICER REMARKS
"Our fourth quarter and full-year results demonstrate the
continued execution of our strategy, as we delivered net sales,
adjusted earnings per share, and free cash flow above our
expectations, with significant investment in our brands and gaining
market share in several of our key categories," said Mark Smucker, President and Chief Executive
Officer. "Our strong financial results reflect sustained elevated
demand for at-home food and coffee consumption and consumers'
desire for our trusted and iconic brands. Fiscal year 2021 marked
another year of progress strengthening our financial position, with
earnings growth and cash generation enabling debt reduction and
return of cash to our shareholders."
"Looking ahead to fiscal year 2022, we are focused on building
upon the momentum and exceptional results we delivered this year,
advancing our consumer-centric growth strategy, and supporting our
talented employees who have been instrumental to our success. I am
confident the investments we have made in our businesses and the
increased agility and flexibility we developed during the past year
will enable us to continue driving sustainable growth and
shareholder value."
FOURTH QUARTER CONSOLIDATED RESULTS
|
Three Months Ended
April 30,
|
|
2021
|
|
2020
|
|
% Increase
(Decrease)
|
|
(Dollars and shares
in millions, except per share data)
|
|
|
|
|
|
|
Net
sales
|
$1,920.2
|
|
|
$2,092.0
|
|
|
(8)
|
%
|
|
|
|
|
|
|
Operating
income
|
$238.7
|
|
|
$346.7
|
|
|
(31)
|
%
|
Adjusted operating
income
|
311.6
|
|
|
431.2
|
|
|
(28)
|
%
|
|
|
|
|
|
|
Net income per
common share – assuming dilution
|
$1.35
|
|
|
$1.98
|
|
|
(32)
|
%
|
Adjusted earnings per
share – assuming dilution
|
1.89
|
|
|
2.57
|
|
|
(26)
|
%
|
|
|
|
|
|
|
Weighted-average
shares outstanding – assuming dilution
|
108.9
|
|
|
114.0
|
|
|
(4)
|
%
|
Net Sales
Net sales decreased 8 percent. Excluding noncomparable net sales
of $123.9 million for the divested
Crisco® and Natural Balance®
businesses, as well as $8.3 million
of favorable foreign currency exchange, net sales decreased
$56.2 million, or 3 percent.
The decrease in comparable net sales was primarily driven by a 4
percentage point decline from volume/mix attributable to the
Company's U.S. Retail Pet Food segment and International operating
segment. Favorable net price realization increased net sales by 1
percentage point, primarily driven by the U.S. Retail Consumer
Foods and U.S. Retail Pet Food segments.
Operating Income
Gross profit decreased $52.7
million, or 7 percent, driven by the decreased contribution
from volume/mix, the noncomparable impact of the
Crisco® and Natural Balance®
divestitures, and higher costs, partially offset by a favorable
change in unallocated derivative gains and losses, as compared to
the prior year, and higher net pricing. Operating income decreased
$108.0 million, or 31 percent,
primarily driven by the decrease in gross profit, a $37.7 million increase in selling, distribution,
and administrative ("SD&A") expenses attributable to increased
marketing expense, and higher other special project costs.
Adjusted gross profit decreased $79.4
million, or 10 percent, with the difference from generally
accepted accounting principles ("GAAP") results being the exclusion
of unallocated derivative gains and losses and special project
costs. Adjusted operating income decreased $119.6 million, or 28 percent, primarily
reflecting the further exclusion of other special project
costs.
Interest Expense, Other Income (Expense), and Income
Taxes
Net interest expense decreased $3.2
million, primarily as a result of reduced debt due to net
repayments of $866.4 million during
the fiscal year.
The effective income tax rate was 24.0 percent, compared to 24.2
percent in the prior year. On a non-GAAP basis, the adjusted
effective income tax rate was 23.3 percent, compared to 23.4
percent in the prior year. The GAAP effective income tax rate is
higher than the adjusted effective income tax rate in the current
year, primarily due to incremental income tax expense recorded in
the fourth quarter associated with the divested
Crisco® business.
Cash Flow and Debt
Cash provided by operating activities was $291.0 million, compared to $287.7 million in the prior year, primarily
reflecting a favorable benefit from lapping the settlement of
interest rate contracts in the prior year, offset by an increase in
cash required to fund working capital, as compared to the prior
year, and a decrease in net income adjusted for noncash items. Free
cash flow was $183.0 million,
compared to $211.3 million in the
prior year, as the increase in cash provided by operating
activities was more than offset by a $31.6
million increase in capital expenditures. Net debt
repayments in the quarter totaled $84.0
million.
The Company repurchased 1.3 million common shares for
$150.0 million. In total, repurchases
of 1.5 million shares settled in the fourth quarter for
$174.3 million, inclusive of 0.2
million shares repurchased in the third quarter.
FULL-YEAR OUTLOOK
The Company provided
its full-year fiscal 2022 guidance as summarized below:
|
|
Net sales change vs
prior year
|
|
(3)% -
(2)%
|
|
Adjusted earnings per
share
|
|
$8.70 -
$9.10
|
|
Free cash flow (in
millions)
|
|
$900
|
|
Capital expenditures
(in millions)
|
|
$380
|
|
Adjusted effective tax
rate
|
|
24.0 %
|
|
The pandemic and related implications, along with cost inflation
and volatility in supply chains, continue to impact financial
results and cause uncertainty and risk for the fiscal year 2022
outlook. Any manufacturing or supply chain disruption, as well as
changes in consumer mobility and purchasing behavior, retailer
inventory levels, and macroeconomic conditions could materially
impact actual results. While the broader outlook remains uncertain,
the Company continues to focus on managing the elements it can
control, including taking the necessary steps to minimize the
impact of cost inflation and any business disruption. This guidance
reflects performance expectations based on the Company's current
understanding of the environment.
Net sales are expected to decrease 2 to 3 percent compared to
the prior year, which incorporates an impact of $355.6 million related to the divested
Crisco® and Natural Balance®
businesses. On a comparable basis, net sales are expected to
increase approximately 2 percent at the mid-point of the net sales
guidance range, reflecting a deceleration in at-home consumption
trends, more than offset by higher net pricing across multiple
categories primarily to recover higher costs, continued
double-digit net sales growth for the Smucker's®
Uncrustables® brand, and a recovery in away from
home channels.
Adjusted earnings per share is expected to range from
$8.70 to $9.10, based on 108.3 million shares outstanding.
Earnings guidance reflects the decrease in net sales and adjusted
gross profit margin to range from 37.0 to 37.5 percent, SD&A
expenses down approximately 4 percent compared to the prior year,
and an adjusted effective tax rate of 24.0 percent. Free cash flow
is expected to be approximately $900
million, with capital expenditures of $380 million.
FOURTH QUARTER SEGMENT RESULTS
Dollar amounts in the segment tables below are reported in
millions.
U.S. Retail Pet Foods
|
|
Net
Sales
|
|
Segment
Profit
|
|
Segment
Profit Margin
|
FY21 Q4
Results
|
|
$674.6
|
|
$101.7
|
|
15.1%
|
Increase (decrease) vs
prior year
|
|
(12)%
|
|
(32)%
|
|
-440bps
|
Net sales decreased $93.2 million,
or 12 percent. Excluding $52.2
million of noncomparable net sales in the prior year related
to the divested Natural Balance® business, net
sales decreased $41.0 million, or 6
percent. Volume/mix reduced net sales by 6 percentage points,
primarily driven by declines for the Rachael Ray®
Nutrish®, Kibbles 'n Bits®,
Nature's Recipe®, and Meow Mix®
brands. Net price realization increased net sales by 1 percentage
point.
Segment profit decreased $47.9
million, primarily reflecting the reduced contribution from
volume/mix, a $18.9 million increase
in marketing investments excluding the divested Natural
Balance® business, and higher costs, partially
offset by higher pricing.
U.S. Retail Coffee
|
|
Net
Sales
|
|
Segment
Profit
|
|
Segment
Profit Margin
|
FY21 Q4
Results
|
|
$583.1
|
|
$173.7
|
|
29.8%
|
Increase (decrease) vs
prior year
|
|
—
|
|
(9)%
|
|
-290bps
|
Net sales increased $1.5 million.
Volume/mix and net price realization were each neutral, as
volume/mix increases for the Dunkin'™ and Café
Bustelo® brands were offset by a decline for the
Folgers® brand.
Segment profit decreased $16.4
million, primarily due to a $12.9
million increase in marketing investments.
U.S. Retail Consumer Foods
|
|
Net
Sales
|
|
Segment
Profit
|
|
Segment
Profit Margin
|
FY21 Q4
Results
|
|
$419.8
|
|
$94.8
|
|
22.6%
|
Increase (decrease) vs
prior year
|
|
(13)%
|
|
(29)%
|
|
-510bps
|
Net sales decreased $60.7 million,
or 13 percent. Excluding $65.0
million of noncomparable net sales in the prior year related
to the divested Crisco® business, net sales
increased $4.3 million, or 1 percent.
Net price realization increased sales by 4 percentage points,
primarily reflecting the impact of a peanut butter list price
increase taken in the second quarter. Volume/mix reduced net sales
by 3 percentage points, primarily driven by declines for
Smucker's® fruit spreads and
Jif® peanut butter, partially offset by an
increase for Smucker's® Uncrustables®
frozen sandwiches.
Segment profit decreased $38.3
million, primarily reflecting the noncomparable segment
profit in the prior year related to the divested
Crisco® business, higher costs, and a
$14.2 million increase in marketing
investments, partially offset by higher net price realization.
International and Away From Home
|
|
Net
Sales
|
|
Segment
Profit
|
|
Segment
Profit Margin
|
FY21 Q4
Results
|
|
$242.7
|
|
$29.2
|
|
12.0%
|
Increase (decrease) vs
prior year
|
|
(7)%
|
|
(30)%
|
|
-390bps
|
Net sales decreased $19.4 million.
Excluding $6.7 million of
noncomparable net sales in the prior year related to the divested
Crisco® business, net sales decreased
$12.7 million, or 5 percent,
primarily reflecting a 15 percent decline for the Company's
International operating segment, partially offset by net sales
growth of 7 percent for the Away From Home operating segment.
Volume/mix for the combined businesses reduced net sales by 9
percentage points, primarily driven by declines for flour and
baking, fruit spreads, and coffee, partially offset by an increase
for portion control products in away from home channels. Foreign
currency exchange contributed 3 percentage points, and net price
realization was neutral.
Segment profit decreased $12.5
million, primarily reflecting the decline from volume/mix,
partially offset by the favorable impact of net pricing and costs
and favorable foreign currency exchange.
Conference Call
The Company will conduct an earnings conference call and webcast
today, June 3, 2021, beginning at 8:30
a.m. Eastern time. Speaking on the call will be Mark Smucker, President and Chief Executive
Officer, and Tucker Marshall, Chief
Financial Officer. To access the webcast, please visit
investors.jmsmucker.com.
The J.M. Smucker Co. Forward-Looking Statements
This press release contains forward-looking statements, such as
projected net sales, operating results, earnings, and cash flows
that are subject to risks and uncertainties that could cause actual
results to differ materially from future results expressed or
implied by those forward-looking statements. The risks,
uncertainties, important factors, and assumptions listed and
discussed in this press release, which could cause actual results
to differ materially from those expressed, include: the impact of
the COVID-19 pandemic on the Company's business, industry,
suppliers, customers, consumers, employees, and communities,
particularly with respect to the Company's Away From Home business;
disruptions or inefficiencies in the Company's operations or supply
chain, including any impact of the COVID-19 pandemic; the ability
to achieve cost savings related to the Company's restructuring and
cost management programs in the amounts and within the time frames
currently anticipated; the ability to generate sufficient cash flow
to continue operating under the Company's capital deployment model,
including capital expenditures, debt repayment, dividend payments,
and share repurchases; volatility of commodity, energy, and other
input costs; risks associated with derivative and purchasing
strategies the Company employs to manage commodity pricing and
interest rate risks; the availability of reliable transportation on
acceptable terms, including any impact of the COVID-19 pandemic;
the ability to implement and realize the full benefit of price
changes, and the impact of the timing of the price changes to
profits and cash flow in a particular period; the success and cost
of marketing and sales programs and strategies intended to promote
growth in the Company's businesses, including product innovation;
general competitive activity in the market, including competitors'
pricing practices and promotional spending levels; the impact of
food security concerns involving either the Company's products or
its competitors' products; the impact of accidents, extreme
weather, natural disasters, and pandemics (such as COVID-19); the
concentration of certain of the Company's businesses with key
customers and suppliers, including single-source suppliers of
certain key raw materials and finished goods, and the Company's
ability to manage and maintain key relationships; impairments in
the carrying value of goodwill, other intangible assets, or other
long-lived assets or changes in the useful lives of other
intangible assets or other long-lived assets; the impact of new or
changes to existing governmental laws and regulations and their
application, including tariffs; the outcome of tax examinations,
changes in tax laws, and other tax matters; foreign currency
exchange rate and interest rate fluctuations; and risks related to
other factors described under "Risk Factors" in other reports and
statements filed with the Securities and Exchange Commission,
including the Company's most recent Annual Report on Form 10-K. The
Company undertakes no obligation to update or revise these
forward-looking statements, which speak only as of the date made,
to reflect new events or circumstances.
About The J.M. Smucker Co.
Each generation of consumers leaves their mark on culture by
establishing new expectations for food and the companies that make
it. At The J.M. Smucker Co., it is our privilege to be at the heart
of this dynamic with a diverse portfolio that appeals to each
generation of people and pets and is found in nearly 90 percent of
U.S. homes and countless restaurants. This includes a mix of iconic
brands consumers have always loved such as
Folgers®, Jif®, and
Milk-Bone® and new favorites like Café
Bustelo®, Smucker's®
Uncrustables®, and Rachael Ray®
Nutrish®. By continuing to immerse ourselves in
consumer preferences and acting responsibly, we will continue
growing our business and the positive impact we have on society.
For more information, please visit jmsmucker.com.
The J.M. Smucker Co. is the owner of all trademarks referenced
herein, except for the following, which are used under license:
Dunkin'™ is a trademark of DD IP Holder LLC, and Rachael
Ray® is a trademark of Ray Marks II LLC.
The Dunkin'™ brand is licensed to The J.M. Smucker Co.
for packaged coffee products sold in retail channels such as
grocery stores, mass merchandisers, club stores, e-commerce and
drug stores. This information does not pertain to products for sale
in Dunkin'™ restaurants.
The J.M. Smucker
Co. Unaudited Condensed
Consolidated Statements of Income
|
|
|
|
|
|
Three Months Ended
April 30,
|
|
Year Ended April
30,
|
|
2021
|
|
2020
|
|
% Increase
(Decrease)
|
|
2021
|
|
2020
|
|
% Increase
(Decrease)
|
|
(Dollars and shares
in millions, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
$1,920.2
|
|
|
$2,092.0
|
|
|
(8)
|
%
|
|
$8,002.7
|
|
|
$7,801.0
|
|
|
3
|
%
|
Cost of products
sold
|
1,184.5
|
|
|
1,303.6
|
|
|
(9)
|
%
|
|
4,864.0
|
|
|
4,799.0
|
|
|
1
|
%
|
Gross
Profit
|
735.7
|
|
|
788.4
|
|
|
(7)
|
%
|
|
3,138.7
|
|
|
3,002.0
|
|
|
5
|
%
|
Gross
margin
|
38.3
|
%
|
|
37.7
|
%
|
|
|
|
39.2
|
%
|
|
38.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling,
distribution, and administrative
expenses
|
411.1
|
|
|
373.4
|
|
|
10
|
%
|
|
1,523.1
|
|
|
1,474.3
|
|
|
3
|
%
|
Amortization
|
56.9
|
|
|
59.9
|
|
|
(5)
|
%
|
|
233.0
|
|
|
236.3
|
|
|
(1)
|
%
|
Other intangible
assets impairment
charges
|
3.8
|
|
|
—
|
|
|
n/m
|
|
|
3.8
|
|
|
52.4
|
|
|
(93)
|
%
|
Other special project
costs
|
19.0
|
|
|
6.6
|
|
|
n/m
|
|
|
20.7
|
|
|
16.5
|
|
|
25
|
%
|
Other operating
expense (income) –
net
|
6.2
|
|
|
1.8
|
|
|
n/m
|
|
|
(28.7)
|
|
|
(0.6)
|
|
|
n/m
|
|
Operating
Income
|
238.7
|
|
|
346.7
|
|
|
(31)
|
%
|
|
1,386.8
|
|
|
1,223.1
|
|
|
13
|
%
|
Operating
margin
|
12.4
|
%
|
|
16.6
|
%
|
|
|
|
17.3
|
%
|
|
15.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense –
net
|
(42.4)
|
|
|
(45.6)
|
|
|
(7)
|
%
|
|
(177.1)
|
|
|
(189.2)
|
|
|
(6)
|
%
|
Other income
(expense) – net
|
(3.0)
|
|
|
(2.7)
|
|
|
11
|
%
|
|
(37.8)
|
|
|
(7.2)
|
|
|
n/m
|
|
Income Before
Income Taxes
|
193.3
|
|
|
298.4
|
|
|
(35)
|
%
|
|
1,171.9
|
|
|
1,026.7
|
|
|
14
|
%
|
Income tax
expense
|
46.3
|
|
|
72.1
|
|
|
(36)
|
%
|
|
295.6
|
|
|
247.2
|
|
|
20
|
%
|
Net
Income
|
$147.0
|
|
|
$226.3
|
|
|
(35)
|
%
|
|
$876.3
|
|
|
$779.5
|
|
|
12
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per
common share
|
$1.35
|
|
|
$1.98
|
|
|
(32)
|
%
|
|
$7.79
|
|
|
$6.84
|
|
|
14
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per
common share –
assuming dilution
|
$1.35
|
|
|
$1.98
|
|
|
(32)
|
%
|
|
$7.79
|
|
|
$6.84
|
|
|
14
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends declared
per common
share
|
$0.90
|
|
|
$0.88
|
|
|
2
|
%
|
|
$3.60
|
|
|
$3.52
|
|
|
2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
shares outstanding
|
108.9
|
|
|
114.0
|
|
|
(4)
|
%
|
|
112.4
|
|
|
114.0
|
|
|
(1)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
shares outstanding –
assuming dilution
|
108.9
|
|
|
114.0
|
|
|
(4)
|
%
|
|
112.4
|
|
|
114.0
|
|
|
(1)
|
%
|
The J.M. Smucker
Co.
Unaudited Condensed
Consolidated Balance Sheets
|
|
|
|
|
|
|
|
April 30,
2021
|
|
April 30,
2020
|
|
|
(Dollars in
millions)
|
Assets
|
|
|
|
|
Current
Assets
|
|
|
|
|
Cash and cash
equivalents
|
|
$334.3
|
|
|
$391.1
|
|
Trade receivables –
net
|
|
533.7
|
|
|
551.4
|
|
Inventories
|
|
959.9
|
|
|
895.3
|
|
Other current
assets
|
|
113.8
|
|
|
134.9
|
|
Total Current
Assets
|
|
1,941.7
|
|
|
1,972.7
|
|
|
|
|
|
|
Property, Plant,
and Equipment – Net
|
|
2,001.5
|
|
|
1,969.4
|
|
|
|
|
|
|
Other Noncurrent
Assets
|
|
|
|
|
Goodwill
|
|
6,023.6
|
|
|
6,304.5
|
|
Other intangible
assets – net
|
|
6,041.2
|
|
|
6,429.0
|
|
Other noncurrent
assets
|
|
276.2
|
|
|
294.8
|
|
Total Other
Noncurrent Assets
|
|
12,341.0
|
|
|
13,028.3
|
|
Total
Assets
|
|
$16,284.2
|
|
|
$16,970.4
|
|
|
|
|
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
|
Current
Liabilities
|
|
|
|
|
Accounts
payable
|
|
$1,034.1
|
|
|
$782.0
|
|
Current portion of
long-term debt
|
|
1,152.9
|
|
|
—
|
|
Short-term
borrowings
|
|
82.0
|
|
|
248.0
|
|
Other current
liabilities
|
|
598.5
|
|
|
557.1
|
|
Total Current
Liabilities
|
|
2,867.5
|
|
|
1,587.1
|
|
|
|
|
|
|
Noncurrent
Liabilities
|
|
|
|
|
Long-term debt, less
current portion
|
|
3,516.8
|
|
|
5,373.3
|
|
Other noncurrent
liabilities
|
|
1,775.1
|
|
|
1,819.1
|
|
Total Noncurrent
Liabilities
|
|
5,291.9
|
|
|
7,192.4
|
|
|
|
|
|
|
Total Shareholders'
Equity
|
|
8,124.8
|
|
|
8,190.9
|
|
Total Liabilities
and Shareholders' Equity
|
|
$16,284.2
|
|
|
$16,970.4
|
|
The J.M. Smucker
Co.
Unaudited Condensed
Consolidated Statements of Cash Flow
|
|
|
|
|
|
Three Months Ended
April 30,
|
|
Year Ended April
30,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
(Dollars in
millions)
|
Operating
Activities
|
|
|
|
|
|
|
|
Net income
|
$147.0
|
|
|
$226.3
|
|
|
$876.3
|
|
|
$779.5
|
|
Adjustments to
reconcile net income to net cash provided by
(used for) operations:
|
|
|
|
|
|
|
|
Depreciation
|
57.8
|
|
|
53.5
|
|
|
219.5
|
|
|
210.2
|
|
Amortization
|
56.9
|
|
|
59.9
|
|
|
233.0
|
|
|
236.3
|
|
Other intangible
assets impairment charges
|
3.8
|
|
|
—
|
|
|
3.8
|
|
|
52.4
|
|
Pension settlement
loss (gain)
|
4.7
|
|
|
0.1
|
|
|
35.5
|
|
|
0.1
|
|
Share-based
compensation expense
|
7.8
|
|
|
7.0
|
|
|
28.7
|
|
|
26.8
|
|
Gain on divestitures –
net
|
1.9
|
|
|
—
|
|
|
(25.3)
|
|
|
—
|
|
Deferred income tax
expense (benefit)
|
(13.9)
|
|
|
7.6
|
|
|
(13.9)
|
|
|
7.6
|
|
Loss on disposal of
assets – net
|
4.6
|
|
|
3.2
|
|
|
7.1
|
|
|
13.0
|
|
Other noncash
adjustments – net
|
2.7
|
|
|
2.0
|
|
|
11.8
|
|
|
8.1
|
|
Settlement of interest
rate contracts
|
—
|
|
|
(239.8)
|
|
|
—
|
|
|
(239.8)
|
|
Defined benefit
pension contributions
|
(7.9)
|
|
|
(4.0)
|
|
|
(13.1)
|
|
|
(5.1)
|
|
Changes in assets and
liabilities, net of effect from
acquisition and divestitures:
|
|
|
|
|
|
|
|
Trade
receivables
|
72.4
|
|
|
(75.8)
|
|
|
22.0
|
|
|
(49.1)
|
|
Inventories
|
(59.5)
|
|
|
60.6
|
|
|
(110.4)
|
|
|
12.6
|
|
Other current
assets
|
(34.9)
|
|
|
(22.7)
|
|
|
(34.0)
|
|
|
(15.7)
|
|
Accounts
payable
|
118.2
|
|
|
169.3
|
|
|
260.9
|
|
|
181.6
|
|
Accrued
liabilities
|
(32.7)
|
|
|
3.4
|
|
|
56.0
|
|
|
48.0
|
|
Income and other
taxes
|
(37.7)
|
|
|
47.4
|
|
|
(17.6)
|
|
|
6.5
|
|
Other – net
|
(0.2)
|
|
|
(10.3)
|
|
|
24.7
|
|
|
(18.2)
|
|
Net Cash Provided
by (Used for) Operating Activities
|
291.0
|
|
|
287.7
|
|
|
1,565.0
|
|
|
1,254.8
|
|
|
|
|
|
|
|
|
|
Investing
Activities
|
|
|
|
|
|
|
|
Additions to property,
plant, and equipment
|
(108.0)
|
|
|
(76.4)
|
|
|
(306.7)
|
|
|
(269.3)
|
|
Proceeds from
divestitures – net
|
(5.3)
|
|
|
—
|
|
|
564.0
|
|
|
—
|
|
Other – net
|
5.3
|
|
|
(17.5)
|
|
|
53.8
|
|
|
(2.2)
|
|
Net Cash Provided
by (Used for) Investing Activities
|
(108.0)
|
|
|
(93.9)
|
|
|
311.1
|
|
|
(271.5)
|
|
|
|
|
|
|
|
|
|
Financing
Activities
|
|
|
|
|
|
|
|
Short-term borrowings
(repayments) – net
|
(84.0)
|
|
|
(63.2)
|
|
|
(166.4)
|
|
|
(185.8)
|
|
Proceeds from
long-term debt
|
—
|
|
|
798.2
|
|
|
—
|
|
|
798.2
|
|
Repayments of
long-term debt
|
—
|
|
|
(500.0)
|
|
|
(700.0)
|
|
|
(900.0)
|
|
Quarterly dividends
paid
|
(98.4)
|
|
|
(100.1)
|
|
|
(403.2)
|
|
|
(396.8)
|
|
Purchase of treasury
shares
|
(174.3)
|
|
|
0.1
|
|
|
(678.4)
|
|
|
(4.2)
|
|
Proceeds from stock
option exercises
|
3.8
|
|
|
0.1
|
|
|
4.5
|
|
|
7.1
|
|
Other – net
|
(0.4)
|
|
|
(7.7)
|
|
|
(0.4)
|
|
|
(7.2)
|
|
Net Cash Provided
by (Used for) Financing Activities
|
(353.3)
|
|
|
127.4
|
|
|
(1,943.9)
|
|
|
(688.7)
|
|
Effect of exchange
rate changes on cash
|
3.1
|
|
|
(4.5)
|
|
|
11.0
|
|
|
(4.8)
|
|
Net increase
(decrease) in cash and cash equivalents
|
(167.2)
|
|
|
316.7
|
|
|
(56.8)
|
|
|
289.8
|
|
Cash and cash
equivalents at beginning of period
|
501.5
|
|
|
74.4
|
|
|
391.1
|
|
|
101.3
|
|
Cash and Cash
Equivalents at End of Period
|
$334.3
|
|
|
$391.1
|
|
|
$334.3
|
|
|
$391.1
|
|
The J.M. Smucker
Co.
Unaudited
Supplemental Schedule
|
|
|
|
|
|
Three Months Ended
April 30,
|
|
Year Ended April
30,
|
|
2021
|
|
% of
Net Sales
|
|
2020
|
|
% of
Net Sales
|
|
2021
|
|
% of
Net Sales
|
|
2020
|
|
% of
Net Sales
|
|
(Dollars in
millions)
|
Net sales
|
$1,920.2
|
|
|
|
|
$2,092.0
|
|
|
|
|
$8,002.7
|
|
|
|
|
$7,801.0
|
|
|
|
Selling, distribution,
and
administrative expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marketing
|
159.1
|
|
|
8.3
|
%
|
|
119.5
|
|
|
5.7
|
%
|
|
534.2
|
|
|
6.7
|
%
|
|
496.2
|
|
|
6.4
|
%
|
Selling
|
53.0
|
|
|
2.8
|
%
|
|
58.5
|
|
|
2.8
|
%
|
|
237.0
|
|
|
3.0
|
%
|
|
246.5
|
|
|
3.2
|
%
|
Distribution
|
68.5
|
|
|
3.6
|
%
|
|
72.9
|
|
|
3.5
|
%
|
|
275.9
|
|
|
3.4
|
%
|
|
280.4
|
|
|
3.6
|
%
|
General and
administrative
|
130.5
|
|
|
6.8
|
%
|
|
122.5
|
|
|
5.9
|
%
|
|
476.0
|
|
|
5.9
|
%
|
|
451.2
|
|
|
5.8
|
%
|
Total selling,
distribution,
and administrative
expenses
|
$411.1
|
|
|
21.4
|
%
|
|
$373.4
|
|
|
17.8
|
%
|
|
$1,523.1
|
|
|
19.0
|
%
|
|
$1,474.3
|
|
|
18.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts may not add
due to rounding.
|
|
|
|
|
|
|
|
|
|
|
|
|
The J.M. Smucker
Co.
Unaudited Reportable
Segments
|
|
|
|
|
|
|
|
Three Months Ended
April 30,
|
|
Year Ended April
30,
|
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
|
(Dollars in
millions)
|
Net sales:
|
|
|
|
|
|
|
|
|
U.S. Retail Pet
Foods
|
|
$674.6
|
|
|
$767.8
|
|
|
$2,844.5
|
|
|
$2,869.5
|
|
U.S. Retail
Coffee
|
|
583.1
|
|
|
581.6
|
|
|
2,374.6
|
|
|
2,149.5
|
|
U.S. Retail Consumer
Foods
|
|
419.8
|
|
|
480.5
|
|
|
1,835.7
|
|
|
1,731.7
|
|
International and Away
From Home
|
|
242.7
|
|
|
262.1
|
|
|
947.9
|
|
|
1,050.3
|
|
Total net
sales
|
|
$1,920.2
|
|
|
$2,092.0
|
|
|
$8,002.7
|
|
|
$7,801.0
|
|
|
|
|
|
|
|
|
|
|
Segment
profit:
|
|
|
|
|
|
|
|
|
U.S. Retail Pet
Foods
|
|
$101.7
|
|
|
$149.6
|
|
|
$487.0
|
|
|
$552.7
|
|
U.S. Retail
Coffee
|
|
173.7
|
|
|
190.1
|
|
|
769.1
|
|
|
691.0
|
|
U.S. Retail Consumer
Foods
|
|
94.8
|
|
|
133.1
|
|
|
472.5
|
|
|
389.7
|
|
International and Away
From Home
|
|
29.2
|
|
|
41.7
|
|
|
124.1
|
|
|
173.4
|
|
Total segment
profit
|
|
$399.4
|
|
|
$514.5
|
|
|
$1,852.7
|
|
|
$1,806.8
|
|
Amortization
|
|
(56.9)
|
|
|
(59.9)
|
|
|
(233.0)
|
|
|
(236.3)
|
|
Other intangible
assets impairment charges
|
|
(3.8)
|
|
|
—
|
|
|
(3.8)
|
|
|
(52.4)
|
|
Gain on divestitures –
net
|
|
(1.9)
|
|
|
—
|
|
|
25.3
|
|
|
—
|
|
Interest expense –
net
|
|
(42.4)
|
|
|
(45.6)
|
|
|
(177.1)
|
|
|
(189.2)
|
|
Unallocated derivative
gains (losses)
|
|
12.1
|
|
|
(18.0)
|
|
|
93.6
|
|
|
19.6
|
|
Cost of products sold
– special project costs
|
|
(3.4)
|
|
|
—
|
|
|
(3.4)
|
|
|
—
|
|
Other special project
costs
|
|
(19.0)
|
|
|
(6.6)
|
|
|
(20.7)
|
|
|
(16.5)
|
|
Corporate
administrative expenses
|
|
(87.8)
|
|
|
(83.3)
|
|
|
(323.9)
|
|
|
(298.1)
|
|
Other income (expense)
– net
|
|
(3.0)
|
|
|
(2.7)
|
|
|
(37.8)
|
|
|
(7.2)
|
|
Income before income
taxes
|
|
$193.3
|
|
|
$298.4
|
|
|
$1,171.9
|
|
|
$1,026.7
|
|
|
|
|
|
|
|
|
|
|
Segment profit
margin:
|
|
|
|
|
|
|
|
|
U.S. Retail Pet
Foods
|
|
15.1
|
%
|
|
19.5
|
%
|
|
17.1
|
%
|
|
19.3
|
%
|
U.S. Retail
Coffee
|
|
29.8
|
%
|
|
32.7
|
%
|
|
32.4
|
%
|
|
32.1
|
%
|
U.S. Retail Consumer
Foods
|
|
22.6
|
%
|
|
27.7
|
%
|
|
25.7
|
%
|
|
22.5
|
%
|
International and Away
From Home
|
|
12.0
|
%
|
|
15.9
|
%
|
|
13.1
|
%
|
|
16.5
|
%
|
Non-GAAP Financial Measures
The Company uses non-GAAP financial measures, including: net
sales excluding divestitures and foreign currency exchange;
adjusted gross profit; adjusted operating income; adjusted income;
adjusted earnings per share; earnings before interest, taxes,
depreciation, amortization, and impairment charges related to
intangible assets ("EBITDA (as adjusted)"); and free cash flow, as
key measures for purposes of evaluating performance internally. The
Company believes that investors' understanding of its performance
is enhanced by disclosing these performance measures. Furthermore,
these non-GAAP financial measures are used by management in
preparation of the annual budget and for the monthly analyses of
its operating results. The Board of Directors also utilizes certain
non-GAAP financial measures as components for measuring performance
for incentive compensation purposes.
Non-GAAP financial measures exclude certain items affecting
comparability that can significantly affect the year-over-year
assessment of operating results, which include amortization expense
and impairment charges related to intangible assets; divestiture,
acquisition, integration, and restructuring costs ("special project
costs"); gains and losses related to the sale of a business;
unallocated gains and losses on commodity and foreign currency
exchange derivatives ("unallocated derivative gains and losses");
and other one-time items that do not directly reflect ongoing
operating results. Income taxes, as adjusted is calculated using an
adjusted effective income tax rate that is applied to adjusted
income before income taxes and reflects the exclusion of the
previously discussed items, as well as any adjustments for one-time
tax-related activities, when they occur. While this adjusted
effective income tax rate does not generally differ materially from
the GAAP effective income tax rate, certain exclusions from
non-GAAP results, such as the permanent tax impacts associated with
the Crisco® and Natural
Balance® divestitures, can significantly impact the
adjusted effective income tax rate.
These non-GAAP financial measures are not intended to replace
the presentation of financial results in accordance with U.S. GAAP.
Rather, the presentation of these non-GAAP financial measures
supplements other metrics used by management to internally evaluate
its businesses and facilitates the comparison of past and present
operations and liquidity. These non-GAAP financial measures may not
be comparable to similar measures used by other companies and may
exclude certain nondiscretionary expenses and cash payments. A
reconciliation of certain non-GAAP financial measures to the
comparable GAAP financial measure for the current and prior year
periods is included in the "Unaudited Non-GAAP Financial Measures"
tables. The Company has also provided a reconciliation of non-GAAP
financial measures for its fiscal 2022 outlook.
The J.M. Smucker
Co.
Unaudited Non-GAAP
Financial Measures
|
|
|
|
|
|
Three Months Ended
April 30,
|
|
Year Ended April
30,
|
|
2021
|
|
2020
|
|
Increase
(Decrease)
|
|
%
|
|
2021
|
|
2020
|
|
Increase
(Decrease)
|
|
%
|
|
(Dollars in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
reconciliation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
$1,920.2
|
|
|
$2,092.0
|
|
|
($171.8)
|
|
|
(8)
|
%
|
|
$8,002.7
|
|
|
$7,801.0
|
|
|
$201.7
|
|
|
3
|
%
|
Crisco® divestiture
|
—
|
|
|
(71.7)
|
|
|
71.7
|
|
|
3
|
|
|
—
|
|
|
(112.4)
|
|
|
112.4
|
|
|
1
|
|
Natural
Balance® divestiture
|
—
|
|
|
(52.2)
|
|
|
52.2
|
|
|
2
|
|
|
—
|
|
|
(53.6)
|
|
|
53.6
|
|
|
1
|
|
Foreign currency
exchange
|
(8.3)
|
|
|
—
|
|
|
(8.3)
|
|
|
—
|
|
|
(7.7)
|
|
|
—
|
|
|
(7.7)
|
|
|
—
|
|
Net sales
excluding
divestitures and foreign
currency exchange
|
$1,911.9
|
|
|
$1,968.1
|
|
|
($56.2)
|
|
|
(3)
|
%
|
|
$7,995.0
|
|
|
$7,635.0
|
|
|
$360.0
|
|
|
5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts may not add
due to rounding.
|
|
|
|
|
|
|
|
|
|
|
The J.M. Smucker
Co.
Unaudited Non-GAAP
Financial Measures
|
|
|
|
|
|
Three Months Ended
April 30,
|
|
Year Ended April
30,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
(Dollars in millions,
except per share data)
|
Gross profit
reconciliation:
|
|
|
|
|
|
|
|
Gross
profit
|
$735.7
|
|
|
$788.4
|
|
|
$3,138.7
|
|
|
$3,002.0
|
|
Unallocated derivative
losses (gains)
|
(12.1)
|
|
|
18.0
|
|
|
(93.6)
|
|
|
(19.6)
|
|
Cost of products sold
– special project costs
|
3.4
|
|
|
—
|
|
|
3.4
|
|
|
—
|
|
Adjusted gross
profit
|
$727.0
|
|
|
$806.4
|
|
|
$3,048.5
|
|
|
$2,982.4
|
|
% of net
sales
|
37.9
|
%
|
|
38.5
|
%
|
|
38.1
|
%
|
|
38.2
|
%
|
|
|
|
|
|
|
|
|
Operating income
reconciliation:
|
|
|
|
|
|
|
|
Operating
income
|
$238.7
|
|
|
$346.7
|
|
|
$1,386.8
|
|
|
$1,223.1
|
|
Amortization
|
56.9
|
|
|
59.9
|
|
|
233.0
|
|
|
236.3
|
|
Other intangible
assets impairment charges
|
3.8
|
|
|
—
|
|
|
3.8
|
|
|
52.4
|
|
Gain on divestitures –
net
|
1.9
|
|
|
—
|
|
|
(25.3)
|
|
|
—
|
|
Unallocated derivative
losses (gains)
|
(12.1)
|
|
|
18.0
|
|
|
(93.6)
|
|
|
(19.6)
|
|
Cost of products sold
– special project costs
|
3.4
|
|
|
—
|
|
|
3.4
|
|
|
—
|
|
Other special project
costs
|
19.0
|
|
|
6.6
|
|
|
20.7
|
|
|
16.5
|
|
Adjusted operating
income
|
$311.6
|
|
|
$431.2
|
|
|
$1,528.8
|
|
|
$1,508.7
|
|
% of net
sales
|
16.2
|
%
|
|
20.6
|
%
|
|
19.1
|
%
|
|
19.3
|
%
|
|
|
|
|
|
|
|
|
Net income
reconciliation:
|
|
|
|
|
|
|
|
Net income
|
$147.0
|
|
|
$226.3
|
|
|
$876.3
|
|
|
$779.5
|
|
Income tax
expense
|
46.3
|
|
|
72.1
|
|
|
295.6
|
|
|
247.2
|
|
Amortization
|
56.9
|
|
|
59.9
|
|
|
233.0
|
|
|
236.3
|
|
Other intangible
assets impairment charges
|
3.8
|
|
|
—
|
|
|
3.8
|
|
|
52.4
|
|
Gain on divestitures –
net
|
1.9
|
|
|
—
|
|
|
(25.3)
|
|
|
—
|
|
Unallocated derivative
losses (gains)
|
(12.1)
|
|
|
18.0
|
|
|
(93.6)
|
|
|
(19.6)
|
|
Cost of products sold
– special project costs
|
3.4
|
|
|
—
|
|
|
3.4
|
|
|
—
|
|
Other special project
costs
|
19.0
|
|
|
6.6
|
|
|
20.7
|
|
|
16.5
|
|
Other one-time
items:
|
|
|
|
|
|
|
|
Pension plan
termination settlement charges
|
1.7
|
|
|
—
|
|
|
29.6
|
|
|
—
|
|
Adjusted income before
income taxes
|
$267.9
|
|
|
$382.9
|
|
|
$1,343.5
|
|
|
$1,312.3
|
|
Income taxes, as
adjusted
|
62.4
|
|
|
89.5
|
|
|
318.5
|
|
|
313.2
|
|
Adjusted
income
|
$205.5
|
|
|
$293.4
|
|
|
$1,025.0
|
|
|
$999.1
|
|
|
|
|
|
|
|
|
|
Weighted-average
common shares outstanding
|
108.4
|
|
|
113.4
|
|
|
112.0
|
|
|
113.4
|
|
Weighted-average
participating shares outstanding
|
0.5
|
|
|
0.6
|
|
|
0.4
|
|
|
0.6
|
|
Total weighted-average
shares outstanding
|
108.9
|
|
|
114.0
|
|
|
112.4
|
|
|
114.0
|
|
Dilutive effect of
stock options
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Total weighted-average
shares outstanding – assuming dilution
|
108.9
|
|
|
114.0
|
|
|
112.4
|
|
|
114.0
|
|
|
|
|
|
|
|
|
|
Adjusted earnings per
share – assuming dilution
|
$1.89
|
|
|
$2.57
|
|
|
$9.12
|
|
|
$8.76
|
|
|
|
|
|
|
|
|
|
The J.M. Smucker
Co.
Unaudited Non-GAAP
Financial Measures
|
|
|
|
|
|
Three Months Ended
April 30,
|
|
Year Ended April
30,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
(Dollars in
millions)
|
EBITDA (as adjusted)
reconciliation:
|
|
|
|
|
|
|
|
Net income
|
$147.0
|
|
|
$226.3
|
|
|
$876.3
|
|
|
$779.5
|
|
Income tax
expense
|
46.3
|
|
|
72.1
|
|
|
295.6
|
|
|
247.2
|
|
Interest expense –
net
|
42.4
|
|
|
45.6
|
|
|
177.1
|
|
|
189.2
|
|
Depreciation
|
57.8
|
|
|
53.5
|
|
|
219.5
|
|
|
210.2
|
|
Amortization
|
56.9
|
|
|
59.9
|
|
|
233.0
|
|
|
236.3
|
|
Other intangible
assets impairment charges
|
3.8
|
|
|
—
|
|
|
3.8
|
|
|
52.4
|
|
EBITDA (as
adjusted)
|
$354.2
|
|
|
$457.4
|
|
|
$1,805.3
|
|
|
$1,714.8
|
|
% of net
sales
|
18.4
|
%
|
|
21.9
|
%
|
|
22.6
|
%
|
|
22.0
|
%
|
|
|
|
|
|
|
|
|
Free cash flow
reconciliation:
|
|
|
|
|
|
|
|
Net cash provided by
(used for) operating
activities
|
$291.0
|
|
|
$287.7
|
|
|
$1,565.0
|
|
|
$1,254.8
|
|
Additions to property,
plant, and equipment
|
(108.0)
|
|
|
(76.4)
|
|
|
(306.7)
|
|
|
(269.3)
|
|
Free cash
flow
|
$183.0
|
|
|
$211.3
|
|
|
$1,258.3
|
|
|
$985.5
|
|
The following tables provide a reconciliation of the Company's
fiscal 2022 guidance for estimated adjusted earnings per share and
free cash flow.
|
|
Year Ending April 30,
2022
|
|
|
Low
|
|
High
|
Net income per common
share – assuming dilution reconciliation:
|
|
|
|
|
Net income per common
share – assuming dilution
|
|
$6.55
|
|
|
$6.95
|
|
Derivative gains
(losses) – net (A)
|
|
0.43
|
|
|
0.43
|
|
Amortization
|
|
1.54
|
|
|
1.54
|
|
Other special project
costs
|
|
0.18
|
|
|
0.18
|
|
Adjusted earnings per
share
|
|
$8.70
|
|
|
$9.10
|
|
|
|
|
|
|
(A) As derivative
gains and losses vary each quarter based on market conditions and
derivative positions taken, the Company does not project
derivative gains or losses on a forward-looking basis. Therefore,
the forward-looking derivative gains (losses) in the table above
reflect the net
cumulative gains and losses already recognized in GAAP results as
of April 30, 2021, that are expected to be allocated to non-GAAP
results in future
periods.
|
|
|
|
|
|
|
|
Year Ending
April 30, 2022
|
|
|
|
|
(Dollars in
millions)
|
|
|
Free cash flow
reconciliation:
|
|
|
|
|
Net cash provided by
operating activities
|
|
$1,280
|
|
|
|
Additions to property,
plant, and equipment
|
|
(380)
|
|
|
|
Free cash
flow
|
|
$900
|
|
|
|
View original content to download
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SOURCE The J.M. Smucker Co.