The J. M. Smucker Company Announces Fiscal 2014 Second Quarter Results

    The J. M. Smucker Company Announces Fiscal 2014 Second Quarter Results

-- Q2 EPS up 7 percent; Q2 EPS up 5 percent excluding special project costs

-- Q2 volume gains in U.S. retail branded business

-- Company updates full year 2014 guidance

PR Newswire

ORRVILLE, Ohio, Nov. 20, 2013

ORRVILLE, Ohio, Nov. 20, 2013 /PRNewswire/ --The J. M. Smucker Company (NYSE:
SJM) today announced results for the second quarter ended October 31, 2013, of
its 2014 fiscal year.

Executive Summary

                  Three Months Ended October 31,  Six Months Ended October 31,
                  2013       2012     % Increase  2013     2012     % Increase
                                      (Decrease)                    (Decrease)
                  (Dollars in millions, except per share data)
Net sales         $ 1,559.9  $        (4%)        $        $        (3%)
                             1,628.7              2,910.8  2,998.4
Operating income  $        $      1%          $      $      6%
                  250.8      247.6                464.1    438.1
  % of net sales  16.1%      15.2%                15.9%    14.6%
Net income:
  Net income      $        $      3%          $      $      8%
                  153.4      148.8                280.0    259.7
  Net income per
  common share -  $       $     7%          $     $     12%
  assuming        1.46       1.36                 2.65     2.36
  dilution
Operating income  $        $                  $      $  
excluding special 260.0      261.5    (1%)        480.6    479.9    0%
project costs
  % of net sales  16.7%      16.1%                16.5%    16.0%
Income excluding
special project
costs:
  Income          $        $      1%          $      $      1%
                  159.5      158.1                291.0    287.5
  Income per
  common share -  $       $     5%          $     $     5%
  assuming        1.52       1.45                 2.76     2.62
  dilution



  oResults for the quarter and six months ended October 31, 2013, include the
    operations of Enray Inc. ("Enray") since the completion of the acquisition
    on August 20, 2013, and the impact of the Company's licensing and
    distribution agreement with Cumberland Packing Corp. ("Cumberland"), which
    commenced on July 1, 2013.
  oSecond quarter net sales, including the contributions from Enray and
    Cumberland, decreased 4 percent in 2014, compared to 2013, reflecting
    pricing actions taken over the past twelve months and the impact of the
    planned exit of certain portions of the Company's business in its
    International, Foodservice, and Natural Foods segment.
  oOperating income excluding the impact of restructuring, merger and
    integration, and certain pension settlement costs ("special project
    costs") decreased 1 percent in the second quarter of 2014, compared to
    2013. The decrease in operating income was attributed primarily to an
    increase in selling, distribution, and administrative ("SD&A") expenses,
    the impact of the previously announced foodservice business exits, and a
    decrease in U.S. Retail Consumer Foods segment profit, which offset an
    increase in U.S. Retail Coffee segment profit.
  oIncome excluding special project costs increased 1 percent in the second
    quarter of 2014, compared to 2013, impacted by lower interest expense.
    Second quarter income per diluted share, excluding special project costs,
    increased 5 percent in 2014, compared to 2013, benefiting from the
    Company's share repurchase activities over the past year.

"We delivered another record quarter of earnings per share as a result of our
commitment to our long-term strategy, the strength of our brands, and the
passion of our team," commented Richard Smucker, Chief Executive Officer. "We
are encouraged by the resilience that many U.S. shoppers have demonstrated in
the face of uncertainty. Our volume has been solid in many of our categories,
and we remain confident in achieving our overall earnings per share guidance
for the year."

"Staying true to our long-term strategy has always driven our business
forward," added Vince Byrd, President and Chief Operating Officer. "Creating
consumer value through product innovation, offering the highest quality and
broadest variety of products with the backing of great marketing and
merchandising, and doing so at fair consumer prices, has time and again proven
to be a winning formula. The benefit of lower commodity costs has provided us
with the flexibility to further support our value proposition. We believe we
have this combination solidly in place for the holiday season and beyond."

Net Sales

              Three Months Ended October 31,       Six Months Ended October 31,
              2013     2012      Increase    %     2013     2012      Increase    %
                                 (Decrease)                           (Decrease)
              (Dollars in millions)
Net sales     $       $        $       (4%)  $       $        $       (3%)
              1,559.9  1,628.7    (68.8)        2,910.8  2,998.4  (87.6)
Adjust for
certain
noncomparable
items:
 Enray        (11.3)   -         (11.3)      (1%)  (11.3)   -         (11.3)      0%
 acquisition
 Cumberland
 distribution (10.2)   -         (10.2)      (1%)  (12.6)   -         (12.6)      0%
 agreement
 Foreign      6.7      -         6.7         0%    7.6      -         7.6         0%
 exchange
Net sales
adjusted for  $       $        $             $       $        $   
certain       1,545.1  1,628.7    (83.6)  (5%)  2,894.5  2,998.4  (103.9)     (3%)
noncomparable
items
Amounts may
not add due
to rounding.

Net sales decreased 4 percent in the second quarter of 2014, compared to the
second quarter of 2013, due to the impact of a 4 percent reduction in net
price realization reflecting price declines taken over the past twelve months,
notably on coffee and peanut butter. Favorable sales mix contributed 1
percent to net sales in the second quarter of 2014 and was attributed to
volume gains in retail coffee combined with a decrease in flour. Contributing
to net sales in the second quarter of 2014 is a combined $21.5 million from
the acquired Enray business and the Cumberland distribution agreement.

Volume gains were realized in Crisco^® oils, Folgers^® coffee, Jif^® peanut
butter, and Smucker's^® fruit spreads while flour and canned milk experienced
declines. In addition, volume declines were realized in private label
foodservice roast and ground coffee and cappuccino, and Smucker's^®
Uncrustables^® frozen sandwiches due to the impact of the previously announced
exiting of portions of these businesses in the International, Foodservice, and
Natural Foods segment.

Margins

                          Three Months Ended October  Six Months Ended October
                          31,                         31,
                          2013             2012       2013            2012
                          (% of net sales)
Gross profit              35.4%            33.3%      35.9%           33.7%
Selling, distribution,
and administrative
expenses:
Marketing                5.4%             5.1%       5.6%            5.2%
Selling                   3.5%             3.2%       3.5%            3.3%
Distribution              2.7%             2.5%       2.8%            2.6%
General and               5.7%             5.0%       6.0%            5.2%
administrative
Total selling,
distribution, and         17.3%            15.8%      17.9%           16.3%
administrative expenses
Amortization              1.6%             1.5%       1.7%            1.6%
Other restructuring,
merger and integration,   0.4%             0.7%       0.4%            1.2%
and special projects
costs
Other operating (income)  (0.0%)           0.1%       (0.0%)          0.0%
expense - net
Operating income          16.1%            15.2%      15.9%           14.6%
Amounts may not add due
to rounding.

Gross profit increased $10.7 million, or 2 percent, in the second quarter of
2014, compared to 2013. Excluding special project costs as previously
defined, gross profit increased $10.6 million, or 2 percent, during the same
period. Unrealized mark-to-market adjustments on derivative contracts
contributed $8.8 million to the increase in gross profit as the impact of
losses decreased from $10.3 million in the second quarter of 2013 to $1.5
million in the second quarter of 2014.

The favorable impact of an increase in U.S. Retail Coffee volume and the
addition of the Cumberland and Enray businesses contributed to gross profit in
the second quarter of 2014, but were mostly offset by the impact of the exited
foodservice businesses. In addition, gross profit in the second quarter of
2014 was impacted by an increase in temporary incremental costs at the
Company's new fruit spreads manufacturing facility and capacity expansion
costs at its Smucker's^® Uncrustables^® facility. 

Overall commodity costs were lower during the second quarter of 2014, compared
to the second quarter of 2013, due primarily to green coffee. However, the
impact of pricing actions taken across all categories more than offset the
benefit of these lower commodity costs resulting in a slightly unfavorable
impact on gross profit.

SD&A expenses increased 5 percent in the second quarter of 2014, compared to
the second quarter of 2013, and increased as a percentage of net sales from
15.8 percent to 17.3 percent. General and administrative expenses increased
10 percent in the second quarter of 2014, compared to 2013. Selling expenses
increased 6 percent while marketing and distribution expenses increased 2
percent and 3 percent, respectively, in the second quarter of 2014, compared
to 2013.

Operating income increased $3.2 million in the second quarter of 2014,
compared to 2013, as special project costs were $4.7 million lower in the
second quarter of 2014, compared to 2013. Excluding special project costs in
both periods, operating income decreased $1.5 million, but increased from 16.1
percent of net sales in the second quarter of 2013 to 16.7 percent in the
second quarter of 2014.

Interest Expense and Income Taxes
Interest expense decreased $3.4 million reflecting the impact of an interest
rate swap the Company entered into during the second quarter of 2014,
converting a portion of its debt from fixed-rate to variable-rate.

Income taxes increased $1.2 million in the second quarter of 2014, compared to
2013, due to an increase in income before income taxes. The effective tax
rate decreased slightly from 33.6 percent in the second quarter of 2013 to
33.3 percent in 2014.

Segment Performance

                      Three Months Ended October  Six Months Ended October 31,
                      31,
                      2013    2012    % Increase  2013     2012     % Increase
                                      (Decrease)                    (Decrease)
                      (Dollars in millions)
Net sales:
 U.S. Retail Coffee  $     $     (4%)        $        $        (3%)
                      594.9   622.5               1,109.3  1,143.3
 U.S. Retail Consumer $     $     (1%)        $        $        0%
 Foods                612.6   619.3               1,149.0  1,147.7
 International,       $     $                 $      $  
 Foodservice, and     352.4   386.9   (9%)        652.5    707.4    (8%)
 Natural Foods
Segment profit:
 U.S. Retail Coffee  $     $     14%         $      $      15%
                      180.6   158.2               326.6    284.6
 U.S. Retail Consumer $     $     (11%)       $      $      (11%)
 Foods                 99.2  111.1               195.6    218.9
 International,       $     $                 $     $   
 Foodservice, and      47.4   58.2  (18%)       90.8     98.9     (8%)
 Natural Foods
Segment profit
margin:
 U.S. Retail Coffee  30.3%   25.4%               29.4%    24.9%
 U.S. Retail Consumer 16.2%   17.9%               17.0%    19.1%
 Foods
 International,
 Foodservice, and     13.5%   15.0%               13.9%    14.0%
 Natural Foods

U.S. Retail Coffee
The U.S. Retail Coffee segment volume increased 2 percent in the second
quarter of 2014, compared to the second quarter of 2013, led by increases of 1
percent in the Folgers^® brand and 11 percent in Dunkin' Donuts^® packaged
coffee. Segment net sales decreased 4 percent in the second quarter of 2014,
compared to the second quarter of 2013, as net price realization was lower due
primarily to a price decline of approximately 6 percent taken in February 2013
reflecting the pass through of lower commodity costs. Net sales of K-Cup^®
packs were flat compared to last year's second quarter as the overall category
remained dynamic and experienced increases in the number of new competitive
entrants. Net sales of Folgers^® Gourmet Selections^® K-Cup^® packs increased
9 percent in the second quarter of 2014, compared to the second quarter of
2013, offset by a decrease in the Millstone^® branded offerings.

The U.S. Retail Coffee segment profit increased $22.4 million, or 14 percent,
in the second quarter of 2014, compared to the second quarter of 2013, as
green coffee costs were significantly lower and were only partially offset by
lower price realization. Unrealized mark-to-market adjustments on derivative
contracts were a gain of $0.5 million in the second quarter of 2014, compared
to a loss of $4.5 million in the second quarter of 2013. In comparison to the
strong prior year third and fourth quarters where record segment profits were
achieved, segment profit growth is expected to be relatively flat in the last
six months of the current fiscal year. The Company anticipates that various
pricing levers will be utilized to pass lower commodity costs on to retailers
and consumers through the remainder of its fiscal year.

U.S. Retail Consumer Foods
The U.S. Retail Consumer Foods segment net sales decreased 1 percent in the
second quarter of 2014, compared to 2013, as overall lower net price
realization offset favorable sales mix. Segment volume for the second quarter
of 2014 was flat, compared to the second quarter of 2013, and increased 1
percent excluding the impact of private label canned milk. Jif^® brand volume
increased 2 percent  in the second quarter of 2014, compared to 2013, while
net sales decreased 5 percent over the same period due to the impact of a
price decline taken in the third quarter of 2013. Smucker's^® fruit spreads
volume increased 4 percent in the second quarter of 2014, compared to 2013,
and net sales decreased 2 percent driven by price declines taken late in
fiscal 2013. Net sales and volume of Smucker's^® Uncrustables^® frozen
sandwiches both increased 25 percent.

Crisco^® brand net sales and volume both increased 4 percent in the second
quarter of 2014, compared to 2013, while net sales and volume for the
Pillsbury^® brand decreased 1 percent and 2 percent, respectively. Canned
milk net sales and volume decreased 3 percent and 8 percent, respectively,
during the second quarter of 2014, compared to 2013, as an increase in Eagle
Brand^® sweetened condensed milk was offset by declines in the Company's
private label offerings.

Commodity costs in the segment were modestly lower in the second quarter of
2014, compared to 2013, as declines in peanut costs were mostly offset by
higher milk costs. However, overall lower net price realization primarily
related to peanut butter and fruit spreads drove the U.S. Retail Consumer
Foods segment profit decrease of $11.9 million, or 11 percent, in the second
quarter of 2014, compared to the second quarter of 2013. Additionally,
temporary incremental costs were incurred at the Company's new fruit spreads
manufacturing facility along with capacity expansion costs at its Smucker's^®
Uncrustables^® facility during the second quarter of 2014. Unrealized
mark-to-market adjustments on derivative contracts were a loss of $1.2 million
in the second quarter of 2014, compared to a loss of $5.0 million in the
second quarter of 2013. The Company expects segment profit growth in the back
half of its fiscal year as lower peanut costs are realized and manufacturing
costs decrease.

International, Foodservice, and Natural Foods
Net sales in the International, Foodservice, and Natural Foods segment
decreased 9 percent in the second quarter of 2014, compared to 2013.
Excluding the impact of the acquired Enray business, the Cumberland
distribution agreement, and foreign exchange, segment net sales decreased 13
percent over the same period last year. Segment volume decreased 10 percent,
excluding the impact of Enray and Cumberland, primarily attributed to the
exited portions of the Company's hot beverage and Smucker's^® Uncrustables^®
frozen sandwich businesses with foodservice customers, and planned declines in
Santa Cruz Organic^® lemonades. Excluding these items, segment volume
declined 4 percent, primarily driven by the Robin Hood^® and Five Roses^®
flour brands in Canada, mostly due to the timing of fall bake activities. Net
price realization was lower in the second quarter of 2014, compared to 2013,
primarily due to price declines on coffee.

Segment profit decreased $10.8 million, or 18 percent, in the second quarter
of 2014, compared to 2013, due primarily to the impact of the exited
foodservice businesses. Overall commodity costs were lower but were more than
offset by lower net price realization. Additionally, unfavorable foreign
exchange negatively impacted profit growth during the period. The addition of
the Cumberland and Enray businesses contributed modestly to segment profit in
the second quarter of 2014. There was essentially no impact of unrealized
mark-to-market adjustments on derivative contracts in the second quarter of
2014, compared to a loss of $2.4 million in the second quarter of 2013.

Other Financial Results and Measures

                     Three Months Ended October   Six Months Ended October 31,
                     31,
                                     % Increase                   % Increase
                     2013     2012                2013      2012
                                     (Decrease)                    (Decrease)
                     (Dollars in millions)
Net cash provided by $     $    (53%)        $       $    (53%)
operating activities 85.9     182.9               168.0     359.6
Free cash flow       $     $    (70%)        $      $    (68%)
                     38.8     130.7               84.6      261.1
EBITDA               $      $    1%           $       $    4%
                     314.7    310.4               590.1     565.2
     % of net sales  20.2%    19.1%               20.3%     18.9%

Cash provided by operating activities and free cash flow decreased $97.0
million and $91.9 million, respectively, during the second quarter of 2014,
compared to 2013, primarily due to a greater amount of cash required to fund
working capital. 

During the quarter ended October 31, 2013, the Company completed two
acquisitions totaling $102.0 million utilizing borrowings from its revolving
credit facility. In addition to the previously announced Enray acquisition,
the Company acquired Silocaf of New Orleans, Inc. from B. Pacorini S.r.L. on
September 5, 2013. This strategic investment to assure the Company's
continued management of its green coffee supply chain includes leases,
buildings, and equipment in New Orleans, Louisiana, used to process the
Company's green coffee. This transaction is not expected to have a
significant impact on the Company's financial results.

Outlook
For fiscal 2014, the Company expects net sales to decrease by approximately 2
percent compared to 2013. Previously, net sales were expected to decrease 1
percent. The Company expects non-GAAP income per diluted share to remain in
the previously announced range of $5.72 to $5.82, excluding special project
costs of approximately $0.20 per diluted share. The range includes the impact
of approximately $13 million in estimated lower interest expense associated
with the interest rate swap entered into during the second quarter of 2014,
which was not included in management's previous guidance range.

Conference Call
The Company will conduct an earnings conference call and webcast today,
Wednesday, November 20, 2013, at 8:30 a.m. E.T. The webcast can be accessed
from the Company's new website at www.jmsmucker.com/investor-relations. For
those unable to listen to the live webcast, the webcast replay will be
available at www.jmsmucker.com/investor-relations following the call. An
audio replay will also be available following the call until Wednesday,
November 27, 2013, and can be accessed by dialing 888-203-1112 or
719-457-0820, with an access code of 9167122.

Non-GAAP Measures
The Company uses non-GAAP financial measures including: net sales adjusted for
the noncomparable impact of the Enray acquisition, the Cumberland distribution
agreement, and foreign exchange rates; gross profit, operating income, income,
and income per diluted share, excluding special project costs; earnings before
interest, taxes, depreciation, and amortization ("EBITDA"); and free cash flow
as key measures for purposes of evaluating performance internally. The
Company believes that these measures provide useful information to investors
because they are the measures used to evaluate performance on a comparable
year-over-year basis. The special project costs relate to specific
restructuring, merger and integration, and pension settlement projects that
are each nonrecurring in nature and can significantly affect the
year-over-year assessment of operating results. 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.

About The J. M. Smucker Company
For more than 115 years, The J. M. Smucker Company has been committed to
offering consumers quality products that bring families together to share
memorable meals and moments. Today, Smucker is a leading marketer and
manufacturer of fruit spreads, retail packaged coffee, peanut butter,
shortening and oils, ice cream toppings, sweetened condensed milk, and natural
foods products in North America. Its family of brands includes Smucker's^®,
Folgers^®, Dunkin' Donuts^®, Jif^®, Crisco^®, Pillsbury^®, Eagle Brand^®, R.W.
Knudsen Family^®, Hungry Jack^®, Cafe Bustelo^®, Cafe Pilon^®, truRoots^®,
White Lily^® and Martha White^® in the United States, along with Robin Hood^®,
Five Roses^®, Carnation^® and Bick's^® in Canada. The Company remains rooted
in the Basic Beliefs of Quality, People, Ethics, Growth and Independence
established by its founder and namesake more than a century ago. For more
information about the Company, visit www.jmsmucker.com.

The J. M. Smucker Company is the owner of all trademarks referenced herein,
except for the following, which are used under license: Pillsbury^® is a
trademark of The Pillsbury Company, LLC; Carnation^® is a trademark of Societe
des Produits Nestle S.A.; and Dunkin' Donuts^® is a registered trademark of DD
IP Holder LLC.

Dunkin' Donuts^® brand is licensed to The J. M. Smucker Company for packaged
coffee products sold in retail channels such as grocery stores, mass
merchandisers, club stores, and drug stores. This information does not
pertain to Dunkin' Donuts^® coffee or other products for sale in Dunkin'
Donuts^® restaurants. K-Cup^® is a trademark of Keurig, Incorporated, used
with permission.

The J. M. Smucker Company 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 known
and unknown risks and uncertainties that could cause actual results to differ
materially from any future results, performance, or achievements expressed or
implied by those forward-looking statements. Readers should understand that
the risks, uncertainties, factors, and assumptions listed and discussed in
this press release, including the following important factors and assumptions,
could affect the future results of the Company and could cause actual results
to differ materially from those expressed in the forward-looking statements:

  ovolatility of commodity markets from which raw materials, particularly
    green coffee beans, peanuts, soybean oil, wheat, milk, corn, and sugar,
    are procured and the related impact on costs;
  orisks associated with derivative and purchasing strategies employed by the
    Company to manage commodity pricing risks, including the risk that such
    strategies could result in significant losses and adversely impact the
    Company's liquidity;
  ocrude oil price trends and their impact on transportation, energy, and
    packaging costs;
  othe ability to successfully implement and realize the full benefit of
    price changes that are intended to ultimately fully recover cost including
    the competitive, retailer, and consumer response, and the impact of the
    timing of the price changes to profits and cash flow in a particular
    period;
  othe success and cost of introducing new products and the competitive
    response;
  othe success and cost of marketing and sales programs and strategies
    intended to promote growth in the Company's businesses;
  ogeneral competitive activity in the market, including competitors' pricing
    practices and promotional spending levels;
  othe ability of the Company to successfully integrate acquired and merged
    businesses in a timely and cost-effective manner;
  othe successful completion of the Company's restructuring programs and the
    ability to realize anticipated savings and other potential benefits within
    the time frames currently contemplated;
  othe impact of food security concerns involving either the Company's or its
    competitors' products;
  othe impact of accidents and natural disasters, including crop failures and
    storm damage;
  othe concentration of certain of the Company's businesses with key
    customers and suppliers, including single-source suppliers of certain raw
    materials, such as packaging for its Folgers^® coffee products, and
    finished goods, such as K-Cup^® packs, and the ability to manage and
    maintain key relationships;
  othe loss of significant customers, a substantial reduction in orders from
    these customers, or the bankruptcy of any such customer;
  ochanges in consumer coffee preferences and other factors affecting the
    coffee business, which represents a substantial portion of the Company's
    business;
  oa change in outlook or downgrade in the Company's public credit ratings by
    a rating agency;
  othe ability of the Company to obtain any required financing on a timely
    basis and on acceptable terms;
  othe timing and amount of capital expenditures, share repurchases, and
    restructuring costs;
  oimpairments in the carrying value of goodwill, other intangible assets, or
    other long-lived assets or changes in useful lives of other intangible
    assets;
  othe impact of new or changes to existing governmental laws and regulations
    and their application;
  othe impact of future legal, regulatory, or market measures regarding
    climate change;
  othe outcome of current and future tax examinations, changes in tax laws,
    and other tax matters, and their related impact on the Company's tax
    positions;
  oforeign currency and interest rate fluctuations;
  opolitical or economic disruption;
  oother factors affecting share prices and capital markets generally; and
  orisks related to other factors described under "Risk Factors" in other
    reports and statements filed by the Company with the Securities and
    Exchange Commission, including its most recent Annual Report on Form 10-K.

Readers are cautioned not to unduly rely on such forward-looking statements,
which speak only as of the date made, when evaluating the information
presented in this press release. The Company does not undertake any
obligation to update or revise these forward-looking statements to reflect new
events or circumstances.



The J. M. Smucker Company

Unaudited Condensed Consolidated Statements of Income
                 Three Months Ended October 31,        Six Months Ended October 31,
                 2013         2012         % Increase  2013         2012         % Increase
                                           (Decrease)                            (Decrease)
                 (Dollars in millions, except per share data)
Net sales        $         $         -4%         $         $         -3%
                 1,559.9     1,628.7                 2,910.8     2,998.4
Cost of products 1,005.0      1,084.4      -7%         1,861.5      1,980.3      -6%
sold
Cost of products
sold -
restructuring    2.3          2.4          -6%         3.8          6.4          -41%
and merger and
integration
Gross Profit     552.6        541.9        2%          1,045.5      1,011.7      3%
   Gross margin  35.4%        33.3%                    35.9%        33.7%
Selling,
distribution,
and              270.3        257.2        5%          520.5        489.4        6%
administrative
expenses
Amortization     24.7         24.2         2%          49.2         48.4         2%
Other
restructuring
and merger and   6.9          11.5         -40%        12.7         28.7         -56%
integration
costs
Other special    -            -            n/m      -            6.7          -100%
project costs
Other operating
(income) expense (0.1)        1.4          -103%       (1.0)        0.4          n/m
- net
Operating Income 250.8        247.6        1%          464.1        438.1        6%
   Operating     16.1%        15.2%                    15.9%        14.6%
   margin
Interest expense (20.5)       (23.9)       -14%        (44.3)       (47.5)       -7%
- net
Other (expense)  (0.3)        0.5          -154%       (0.3)        0.9          -131%
income - net
Income Before    230.0        224.2        3%          419.5        391.5        7%
Income Taxes
Income taxes     76.6         75.4         2%          139.5        131.8        6%
Net Income       $       $       3%          $       $       8%
                 153.4        148.8                    280.0        259.7
   Net income    $       $                   $       $     
   per common     1.46       1.36      7%           2.65       2.37      12%
   share
   Net income
   per common    $       $                   $       $     
   share -        1.46       1.36      7%           2.65       2.36      12%
   assuming
   dilution
Dividends        $       $                   $       $     
declared per      0.58       0.52      12%          1.16       1.04      12%
common share
Weighted-average
shares           105,130,715  109,224,855  -4%         105,544,295  109,796,564  -4%
outstanding
Weighted-average
shares
outstanding –    105,145,966  109,251,455  -4%         105,560,298  109,824,632  -4%
assuming
dilution



The J. M. Smucker Company

Unaudited Condensed Consolidated Balance Sheets
                                October 31,      April 30, 2013  October 31,
                                2013                             2012
                                (Dollars in millions)
Assets
Current Assets:
 Cash and cash equivalents      $         $         $      
                                 150.5            256.4         203.6
 Trade receivables, less
 allowance for doubtful         464.2            313.7           469.4
 accounts
 Inventories                    1,023.7          945.5           975.4
 Other current assets           123.9            79.6            87.7
     Total Current Assets       1,762.3          1,595.2         1,736.1
Property, Plant, and Equipment  1,163.2          1,142.5         1,113.4
- Net
Other Noncurrent Assets:
 Goodwill                      3,100.7          3,052.9         3,053.5
 Other intangible assets - net  3,076.2          3,089.4         3,138.1
 Other noncurrent assets        143.6            151.8           147.7
     Total Other Noncurrent     6,320.5          6,294.1         6,339.3
     Assets
Total Assets                    $          $         $      
                                9,246.0         9,031.8        9,188.8
Liabilities and Shareholders'
Equity
Current Liabilities:
 Accounts payable               $         $         $      
                                 261.6            285.8         290.1
 Current portion of long-term   150.0            50.0            50.0
 debt
 Revolving credit facility      207.0            -               -
 Other current liabilities      277.4            261.0           366.0
     Total Current Liabilities  896.0            596.8           706.1
Noncurrent Liabilities:
 Long-term debt                 1,883.6          1,967.8         2,019.2
 Other noncurrent liabilities   1,298.5          1,318.4         1,310.7
     Total Noncurrent           3,182.1          3,286.2         3,329.9
     Liabilities
Shareholders' Equity            5,167.9          5,148.8         5,152.8
Total Liabilities and           $          $         $      
Shareholders' Equity            9,246.0         9,031.8        9,188.8



The J. M. Smucker Company

Unaudited Condensed Consolidated Statements of Cash Flow
                                Three Months Ended        Six Months Ended
                                October 31,               October 31,
                                2013         2012         2013       2012
                                (Dollars in millions)
Operating Activities
 Net income                     $       $       $      $    
                                 153.4       148.8        280.0    259.7
 Adjustments to reconcile net
 income to net cash provided by
 operating activities:
   Depreciation                 38.4         35.9         75.0       72.0
   Depreciation - restructuring 1.1          2.2          2.1        5.8
   and merger and integration
   Amortization                 24.7         24.2         49.2       48.4
   Share-based compensation     6.7          6.2          12.3       10.5
   expense
   Loss on sale of assets - net 0.8          1.7          1.0        2.7
   Changes in assets and
   liabilities, net of effect
   from businesses acquired:
       Trade receivables        (103.0)      (78.3)       (147.3)    (122.3)
       Inventories              40.6         44.1         (74.5)     (14.6)
       Accounts payable and     2.7          37.8         4.9        98.9
       accrued items
       Defined benefit pension  (1.9)        (6.6)        (3.0)      (7.6)
       contributions
       Accrued and prepaid      (71.7)       (58.2)       (33.0)     (13.4)
       taxes
   Other - net                  (5.9)        25.1         1.3        19.5
Net Cash Provided by Operating  85.9         182.9        168.0      359.6
Activities
Investing Activities
 Businesses acquired, net of    (102.0)      -            (102.0)    -
 cash acquired
 Additions to property, plant,  (47.1)       (52.2)       (83.4)     (98.5)
 and equipment
 Proceeds from disposal of      0.3          0.3          1.4        0.6
 property, plant, and equipment
 Other - net                    (1.8)        (11.8)       (8.9)      5.9
Net Cash Used for Investing     (150.6)      (63.7)       (192.9)    (92.0)
Activities
Financing Activities
 Revolving credit facility -    122.0        -            207.0      -
 net
 Quarterly dividends paid       (61.0)       (57.4)       (116.4)    (110.2)
 Purchase of treasury shares    (0.1)        (171.1)      (165.5)    (175.3)
 Proceeds from stock option     0.2          0.6          0.3        0.8
 exercises
 Other - net                    (1.4)        0.2          (1.3)      (7.6)
Net Cash Provided by (Used for) 59.7         (227.7)      (75.9)     (292.3)
Financing Activities
Effect of exchange rate changes (2.0)        0.6          (5.1)      (1.4)
on cash
Net decrease in cash and cash   (7.0)        (107.9)      (105.9)    (26.1)
equivalents
Cash and cash equivalents at    157.5        311.5        256.4      229.7
beginning of period
Cash and Cash Equivalents at    $       $       $      $    
End of Period                    150.5       203.6        150.5    203.6



The J. M. Smucker Company

Unaudited Non-GAAP Financial Measures
                      Three Months Ended October    Six Months Ended October
                      31,                           31,
                      2013           2012           2013           2012
                      (Dollars in millions, except per share data)
Reconciliation to
gross profit:
Gross profit          $        $        $          $    
                      552.6          541.9          1,045.5       1,011.7
Cost of products sold
- restructuring and   2.3            2.4            3.8            6.4
merger and
integration
Gross profit          $        $        $          $    
excluding special     554.9          544.3          1,049.3       1,018.1
project costs
% of net sales        35.6%          33.4%          36.0%          34.0%
Reconciliation to
operating income:
Operating income      $        $        $        $     
                      250.8          247.6          464.1           438.1
Cost of products sold
- restructuring and   2.3            2.4            3.8            6.4
merger and
integration
Other restructuring
and merger and        6.9            11.5           12.7           28.7
integration costs
Other special project -              -              -              6.7
costs
Operating income      $        $        $        $     
excluding special     260.0          261.5          480.6           479.9
project costs
% of net sales        16.7%          16.1%          16.5%          16.0%
Reconciliation to net
income:
Net income            $        $        $        $     
                      153.4          148.8          280.0           259.7
Income taxes          76.6           75.4           139.5          131.8
Cost of products sold
- restructuring and   2.3            2.4            3.8            6.4
merger and
integration
Other restructuring
and merger and        6.9            11.5           12.7           28.7
integration costs
Other special project -              -              -              6.7
costs
Income before income  $        $        $        $     
taxes, excluding      239.2          238.1          436.0           433.3
special project costs
Income taxes, as      79.7           80.0           145.0          145.8
adjusted
Income excluding      $        $        $        $     
special project costs 159.5          158.1          291.0           287.5
Weighted-average
common shares         104,311,146    108,269,499    104,694,335    108,844,046
outstanding
Weighted-average
participating shares  819,569        955,356        849,960        952,518
outstanding
Total
weighted-average      105,130,715    109,224,855    105,544,295    109,796,564
shares outstanding
Dilutive effect of    15,251         26,600         16,003         28,068
stock options
Total
weighted-average      105,145,966    109,251,455    105,560,298    109,824,632
shares outstanding -
assuming dilution
Income per common
share excluding       $        $        $        $     
special project costs  1.52         1.45         2.76          2.62
- assuming dilution



The J. M. Smucker Company

Unaudited Non-GAAP Financial Measures
                    Three Months Ended October      Six Months Ended October
                    31,                             31,
                    2013             2012           2013            2012
                    (Dollars in millions)
Reconciliation to
net income:
Net income          $          $         $          $    
                    153.4             148.8         280.0           259.7
Income taxes        76.6             75.4           139.5           131.8
Interest expense -  20.5             23.9           44.3            47.5
net
Depreciation        38.4             35.9           75.0            72.0
Depreciation -
restructuring and   1.1              2.2            2.1             5.8
merger and
integration
Amortization        24.7             24.2           49.2            48.4
Earnings before
interest, taxes,    $          $         $          $    
depreciation, and   314.7             310.4         590.1           565.2
amortization
% of net sales      20.2%            19.1%          20.3%           18.9%
Reconciliation to
cash provided by
operating
activities:
Net cash provided   $          $         $          $    
by operating         85.9           182.9         168.0           359.6
activities
Additions to
property, plant,    (47.1)           (52.2)         (83.4)          (98.5)
and equipment
Free cash flow      $          $         $          $    
                     38.8           130.7          84.6         261.1
The Company uses non-GAAP financial measures including: net sales adjusted for
the noncomparable impact of the Enray acquisition, the Cumberland distribution
agreement, and foreign exchange rates; gross profit, operating income, income,
and income per diluted share, excluding special project costs; earnings before
interest, taxes, depreciation, and amortization ("EBITDA"); and free cash flow
as key measures for purposes of evaluating performance internally. The
Company believes that these measures provide useful information to investors
because they are the measures used to evaluate performance on a comparable
year-over-year basis. The special project costs relate to specific
restructuring, merger and integration, and pension settlement projects that
are each nonrecurring in nature and can significantly affect the
year-over-year assessment of operating results. 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.



The J. M. Smucker Company

Unaudited Reportable Segments
                          Three Months Ended October  Six Months Ended October
                          31,                         31,
                          2013           2012         2013         2012
                          (Dollars in millions)
Net sales:
 U.S. Retail Coffee       $         $       $        $    
                          594.9         622.5       1,109.3      1,143.3
 U.S. Retail Consumer     612.6          619.3        1,149.0      1,147.7
 Foods
 International,
 Foodservice, and Natural 352.4          386.9        652.5        707.4
 Foods
Total net sales           $          $        $        $    
                          1,559.9        1,628.7      2,910.8      2,998.4
Segment profit:
 U.S. Retail Coffee       $         $       $       $     
                          180.6         158.2       326.6       284.6
 U.S. Retail Consumer     99.2           111.1        195.6        218.9
 Foods
 International,
 Foodservice, and Natural 47.4           58.2         90.8         98.9
 Foods
Total segment profit      $         $       $       $     
                          327.2         327.5       613.0       602.4
 Interest expense - net   (20.5)         (23.9)       (44.3)       (47.5)
 Cost of products sold -
 restructuring and merger (2.3)          (2.4)        (3.8)        (6.4)
 and integration
 Other restructuring and
 merger and integration   (6.9)          (11.5)       (12.7)       (28.7)
 costs
 Other special project    -              -            -            (6.7)
 costs
 Corporate administrative (67.2)         (66.0)       (132.4)      (122.5)
 expenses
 Other (expense) income - (0.3)          0.5          (0.3)        0.9
 net
Income before income      $         $       $       $     
taxes                     230.0         224.2       419.5       391.5
Segment profit margin:
 U.S. Retail Coffee      30.3%          25.4%        29.4%        24.9%
 U.S. Retail Consumer     16.2%          17.9%        17.0%        19.1%
 Foods
 International,
 Foodservice, and Natural 13.5%          15.0%        13.9%        14.0%
 Foods



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SOURCE The J. M. Smucker Company

Website: http://www.smuckers.com
Contact: The J. M. Smucker Company, (330) 682-3000; Investors: Sonal Robinson,
Vice President, Investor Relations; Media: Maribeth Burns, Vice President,
Corporate Communications