The J.M. Smucker Company (SJM, Financial) filed Quarterly Report for the period ended 2009-01-31.
The J.M. Smucker Company headquartered in Orrville Ohio is the leading marketer of jams jellies preserves and other fruit spreads in the U.S. They are also the leader in dessert toppings natural peanut butter and health and natural foods juice products and market a wide variety of other specialty products throughout the U.S. and in many foreign countries. In the fruit spreads category they also hold the leadership position in Australia and Canada. The J.M. Smucker Company has a market cap of $4.11 billion; its shares were traded at around $34.67 with a P/E ratio of 10.1 and P/S ratio of 1.6. The dividend yield of The J.M. Smucker Company stocks is 3.7%. The J.M. Smucker Company had an annual average earning growth of 10.9% over the past 10 years. GuruFocus rated The J.M. Smucker Company the business predictability rank of 4.5-star.
During the third quarter, the Companys debt obligations increased by Folgers $350 million of LIBOR-based variable rate debt. In addition, the Company issued $400 million in Senior Notes with a weighted-average interest rate of 6.6 percent during the second quarter. As a result, interest expense increased $11.2 million and $12.3 million during the third quarter and first nine months of 2009, respectively, compared to 2008.
On November 6, 2008, the Company completed the transaction with Folgers, a subsidiary of The Procter & Gamble Company (P&G). The value of the transaction was approximately $3.7 billion, including the issuance of Smucker common shares in connection with the merger and $350 million of Folgers debt. Under the terms of the transaction agreements, P&G distributed common shares of Folgers to participating P&G shareholders which were then automatically converted into the right to receive Smucker common shares in the merger. Immediately following the merger, P&G shareholders and pre-merger Company shareholders owned approximately 53.5 percent and 46.5 percent, respectively, of the Companys approximately 118 million common shares outstanding. The Company expects to incur one-time costs related to the transaction over the two fiscal years following the merger of approximately $100 million to $125 million, including certain amounts during the first year expected to be allocated to goodwill.
Cash provided by operating activities was approximately $280.3 million and $289.0 million during the three and nine-months ended January 31, 2009, respectively. Cash provided by operating activities increased $107.8 million in the first nine months of 2009 compared to 2008, as the impact of the Folgers business has added to net income adjusted for noncash items.
Net cash used for investing activities was approximately $146.3 million in the first nine months of 2009, compared to $188.7 million in the first nine months of 2008, consisting of $72.1 million used for business acquisitions, primarily the Knotts Berry Farm® brand, and capital expenditures of approximately $84.9 million. The Company expects capital expenditures for fiscal 2009, including amounts associated with Folgers, to total approximately $115 to $120 million.
Cash provided by financing activities during the first nine months of 2009 consisted primarily of the proceeds from the Companys $400 million Senior Note placement. A portion of the proceeds was used to fund the payment of the $5 per share one-time special dividend, totaling approximately $274.0 million, on October 31, 2008. In addition, quarterly dividend payments of approximately $73.0 million were made in the first nine months of 2009, resulting in total dividend payments of $347.0 million.
Read the The complete ReportSJM is in the portfolios of John Rogers of ARIEL CAPITAL MANAGEMENT LLC, John Keeley of Keeley Fund Management, David Dreman of Dreman Value Management.
The J.M. Smucker Company headquartered in Orrville Ohio is the leading marketer of jams jellies preserves and other fruit spreads in the U.S. They are also the leader in dessert toppings natural peanut butter and health and natural foods juice products and market a wide variety of other specialty products throughout the U.S. and in many foreign countries. In the fruit spreads category they also hold the leadership position in Australia and Canada. The J.M. Smucker Company has a market cap of $4.11 billion; its shares were traded at around $34.67 with a P/E ratio of 10.1 and P/S ratio of 1.6. The dividend yield of The J.M. Smucker Company stocks is 3.7%. The J.M. Smucker Company had an annual average earning growth of 10.9% over the past 10 years. GuruFocus rated The J.M. Smucker Company the business predictability rank of 4.5-star.
Highlight of Business Operations:
Net sales were $1,182.6 million in the third quarter of 2009, an increase of $517.2 million or 78 percent, compared to the third quarter of 2008. Acquisitions contributed approximately $491.7 million of the increase, including $468.5 million from Folgers, while the foreign exchange impact, primarily due to the weakening Canadian dollar, reduced net sales by approximately $16.0 million. Excluding acquisitions and foreign exchange, net sales increased six percent reflecting a 13 percent net pricing gain which offset a seven percent volume and mix decline.During the third quarter, the Companys debt obligations increased by Folgers $350 million of LIBOR-based variable rate debt. In addition, the Company issued $400 million in Senior Notes with a weighted-average interest rate of 6.6 percent during the second quarter. As a result, interest expense increased $11.2 million and $12.3 million during the third quarter and first nine months of 2009, respectively, compared to 2008.
On November 6, 2008, the Company completed the transaction with Folgers, a subsidiary of The Procter & Gamble Company (P&G). The value of the transaction was approximately $3.7 billion, including the issuance of Smucker common shares in connection with the merger and $350 million of Folgers debt. Under the terms of the transaction agreements, P&G distributed common shares of Folgers to participating P&G shareholders which were then automatically converted into the right to receive Smucker common shares in the merger. Immediately following the merger, P&G shareholders and pre-merger Company shareholders owned approximately 53.5 percent and 46.5 percent, respectively, of the Companys approximately 118 million common shares outstanding. The Company expects to incur one-time costs related to the transaction over the two fiscal years following the merger of approximately $100 million to $125 million, including certain amounts during the first year expected to be allocated to goodwill.
Cash provided by operating activities was approximately $280.3 million and $289.0 million during the three and nine-months ended January 31, 2009, respectively. Cash provided by operating activities increased $107.8 million in the first nine months of 2009 compared to 2008, as the impact of the Folgers business has added to net income adjusted for noncash items.
Net cash used for investing activities was approximately $146.3 million in the first nine months of 2009, compared to $188.7 million in the first nine months of 2008, consisting of $72.1 million used for business acquisitions, primarily the Knotts Berry Farm® brand, and capital expenditures of approximately $84.9 million. The Company expects capital expenditures for fiscal 2009, including amounts associated with Folgers, to total approximately $115 to $120 million.
Cash provided by financing activities during the first nine months of 2009 consisted primarily of the proceeds from the Companys $400 million Senior Note placement. A portion of the proceeds was used to fund the payment of the $5 per share one-time special dividend, totaling approximately $274.0 million, on October 31, 2008. In addition, quarterly dividend payments of approximately $73.0 million were made in the first nine months of 2009, resulting in total dividend payments of $347.0 million.
Read the The complete ReportSJM is in the portfolios of John Rogers of ARIEL CAPITAL MANAGEMENT LLC, John Keeley of Keeley Fund Management, David Dreman of Dreman Value Management.
