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The J.M. Smucker Company Reports Operating Results (10-Q)

September 08, 2011 | About:
10qk

10qk

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The J.M. Smucker Company (SJM) filed Quarterly Report for the period ended 2011-07-31.

J.m. Smucker Co. has a market cap of $8.26 billion; its shares were traded at around $72.26 with a P/E ratio of 15.2 and P/S ratio of 1.7. The dividend yield of J.m. Smucker Co. stocks is 2.6%. J.m. Smucker Co. had an annual average earning growth of 10% over the past 10 years. GuruFocus rated J.m. Smucker Co. the business predictability rank of 2.5-star.

Highlight of Business Operations:

was $0.98 and $0.86 for the first quarters of 2012 and 2011, respectively, an increase of 14 percent. The Companys non-GAAP income per diluted share was $1.12 and $1.04 for the first quarters of 2012 and 2011, respectively, an increase of eight percent. The first quarter of 2012 benefited from a decrease in weighted-average common shares outstanding, as a result of the Companys share repurchase activity during the second half of fiscal 2011.

The Company expects to incur restructuring costs of approximately $235.0 million, of which $127.2 million has been incurred through July 31, 2011 including $19.6 million in the first quarter of 2012 and $27.6 million in the first quarter of 2011. The restructuring is proceeding as planned and the balance of the costs is anticipated to be recognized over the next three fiscal years as the facilities are closed.

Rowland Coffees products are primarily sold under the leading Hispanic Café Bustelo® and Café PilonTM brands with distribution in retail and foodservice channels concentrated in southern Florida and the northeastern U.S. It is a leading producer of espresso coffee in the U.S., generating total net sales in excess of $110.0 million in calendar 2010. The acquisition includes a manufacturing, distribution, and office facility in Miami. Manufacturing operations are expected to be consolidated into the Companys existing coffee facilities in New Orleans, Louisiana, over the next two to four years. The total one-time costs of the acquisition are estimated to be between $25.0 million and $30.0 million, including approximately $15.0 million of noncash charges associated with the closing of the Miami facilities.

Cash used for investing activities was $411.8 million in the first three months of 2012, compared to $83.7 million in the same period of 2011. The increase in cash used for investing activities in 2012, compared to 2011, was primarily related to the use of $362.8 million for the Rowland Coffee acquisition. Cash used for capital expenditures was $67.6 million in the first quarter of 2012, compared to $26.9 million in 2011. The increase in capital expenditures in the first quarter of 2012, compared to 2011, is related to expenditures associated with the Companys restructuring project. The Company expects total capital expenditures of approximately $250.0 million to $275.0 million in 2012. Cash provided by a sale and a maturity of marketable securities in the first quarter of 2012 was $18.6 million compared to cash used for purchases of marketable securities of $57.0 million in the first quarter of 2011.

Cash provided by financing activities during the first three months of 2012 was approximately $253.9 million, consisting primarily of borrowing from the Companys revolving credit facility of $306.7 million offset by quarterly dividend payments of $50.2 million. During the first three months of 2011, total cash of $350.9 million was provided by financing activities consisting primarily of the issuance of $400.0 million in Senior Notes offset by $47.6 million in quarterly dividend payments. The increased dividend payments in 2012, compared to 2011, resulted from an increase in the quarterly dividend rate from $0.40 per common share paid in the first quarter of 2011 to $0.44 per common share paid in the first quarter of 2012, offset slightly by approximately four percent fewer shares outstanding.

On July 29, 2011, the Company entered into a second amended and restated credit agreement with a group of ten banks. The credit facility, which amends and restates in its entirety the $600.0 million credit agreement dated as of January 31, 2011, provides for an unsecured revolving credit line of $1.0 billion and matures July 29, 2016. At July 31, 2011, the Company had an outstanding balance of $306.7 million under the revolving credit facility at a weighted average interest rate of 1.52 percent. Subsequent to July 31, 2011, the Company borrowed additional funds, bringing the total outstanding balance under the revolving credit facility to $480.0 million at August 31, 2011, at a weighted average interest rate of 1.42 percent.

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