The J.M. Smucker Company (SJM, Financial) filed Quarterly Report for the period ended 2008-10-31.
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 $2.31 billion; its shares were traded at around $41.23 with a P/E ratio of 12.52 and P/S ratio of 0.91. The dividend yield of The J.M. Smucker Company stocks is 3.04%. 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.
Company net sales for the first six months of 2009 were $1,506.8 million, an increase of 19 percent, compared to $1,269.4 million in the first six months of 2008 primarily due to the effect of pricing increases taken over the course of 2008. Acquisitions contributed approximately $66.8 million of the net sales increase.
During the second quarter of 2009, the Company issued $400 million in Senior Notes with a weighted average interest rate of 6.6 percent. A portion of the proceeds from the Notes was used to fund the payment of the $5 per share one-time special dividend, totaling approximately $274 million, on October 31, 2008. There was essentially no impact on interest expense for the quarter since the financing closed on October 23, 2008.
On November 6, 2008, the Company completed the transaction with The Folgers Coffee Company (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 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 owned approximately 53.5 percent of the Companys common shares and pre-merger Company shareholders owned approximately 46.5 percent of the Companys common shares. Immediately after completion of the merger, the Company had approximately 118 million common shares outstanding. The Company expects to incur one-time costs related to the transaction over the next two fiscal years of approximately $100 million to $125 million, including amounts expected to be allocated to goodwill.
Net cash used for investing activities was approximately $102.7 million in the first six months of 2009, compared to $192.1 million in the first six months of 2008, consisting of $56.1 million used for business acquisitions, primarily the Knotts Berry Farm® brand, and capital expenditures of approximately $55.8 million. The Company expects capital expenditures of approximately $60 to $65 million in the second half of the year including amounts associated with Folgers, bringing the total for the year to approximately $115 to $120 million.
Cash provided by financing activities during the first six 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 million, on October 31, 2008. In addition, quarterly dividend payments of approximately $35.2 million were made in the first six months of 2009, resulting in total dividend payments of $309.2 million. At current quarterly dividend rates and considering the additional shares issued in connection with the Folgers merger, the Company expects dividend payments in the second half of 2009 of approximately $75 million.
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10-year financial history of SJM.
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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 $2.31 billion; its shares were traded at around $41.23 with a P/E ratio of 12.52 and P/S ratio of 0.91. The dividend yield of The J.M. Smucker Company stocks is 3.04%. 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:
Company net sales were $843.1 million in the second quarter of 2009, an increase of $135.3 million or 19 percent, compared to the second quarter of 2008. Net sales growth was broad based with all major brands and strategic business areas contributing. The Carnation®, Europes Best® and Knotts Berry Farm® acquisitions contributed approximately $35.8 million in net sales to the quarter, or approximately five percent, while the foreign exchange impact of the weakening Canadian dollar reduced net sales by approximately $8.2 million.Company net sales for the first six months of 2009 were $1,506.8 million, an increase of 19 percent, compared to $1,269.4 million in the first six months of 2008 primarily due to the effect of pricing increases taken over the course of 2008. Acquisitions contributed approximately $66.8 million of the net sales increase.
During the second quarter of 2009, the Company issued $400 million in Senior Notes with a weighted average interest rate of 6.6 percent. A portion of the proceeds from the Notes was used to fund the payment of the $5 per share one-time special dividend, totaling approximately $274 million, on October 31, 2008. There was essentially no impact on interest expense for the quarter since the financing closed on October 23, 2008.
On November 6, 2008, the Company completed the transaction with The Folgers Coffee Company (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 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 owned approximately 53.5 percent of the Companys common shares and pre-merger Company shareholders owned approximately 46.5 percent of the Companys common shares. Immediately after completion of the merger, the Company had approximately 118 million common shares outstanding. The Company expects to incur one-time costs related to the transaction over the next two fiscal years of approximately $100 million to $125 million, including amounts expected to be allocated to goodwill.
Net cash used for investing activities was approximately $102.7 million in the first six months of 2009, compared to $192.1 million in the first six months of 2008, consisting of $56.1 million used for business acquisitions, primarily the Knotts Berry Farm® brand, and capital expenditures of approximately $55.8 million. The Company expects capital expenditures of approximately $60 to $65 million in the second half of the year including amounts associated with Folgers, bringing the total for the year to approximately $115 to $120 million.
Cash provided by financing activities during the first six 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 million, on October 31, 2008. In addition, quarterly dividend payments of approximately $35.2 million were made in the first six months of 2009, resulting in total dividend payments of $309.2 million. At current quarterly dividend rates and considering the additional shares issued in connection with the Folgers merger, the Company expects dividend payments in the second half of 2009 of approximately $75 million.
Read the The complete Report
Gurus who own SJM
SJM is in the portfolios of John Rogers, John Keeley, David Dreman.More on SJM:
Gurus buys and sells of SJM
10-year financial history of SJM.
Insider buys/sells of SJM.
