Milling & Baking News - June 29, 2010 - 37

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Smucker earnings climb 86% in fiscal 2010
ORRVILLE, OHIO - The continued trend of eating at home helped
drive an 86% gain in earnings at
J.M. Smucker Co. in the year ended
April 30. Net income in fiscal 2010 totaled $494,138,000, equal to $4.15 per
share on the common stock, up from
$265,953,000, or $3.11 per share, in fiscal 2010. Results for fiscal 2010 included a gain of approximately $12.9 million on the company's
March divestiture of
its potato business.
"We achieved another year of record
sales while growing
volume and profitability across our
portfolio of iconic brands," said Tim
Smucker, chairman of the board and
co-chief executive officer. "With the
completion of our first full fiscal year
including the coffee business, we have
just begun to realize the potential of
our new, larger company. Our success
is a result of our employees' commitment to our strategy, their ability to
work together as one, and their unrelenting focus on the consumer."
Sales during fiscal 2010 increased
23% to $4,605,289,000, which compared
with $3,757,933,000 in fiscal 2009.
Net income during the fourth
quarter of fiscal 2010 rose 28% to
$120,606,000, or $1.01 per share,
up from $94,268,000, or 80c per
share. Sales for the quarter were
$1,069,079,000, nearly unchanged
from $1,068,540,000 in the same period a year ago. Excluding the impact
of the potato business divestiture and
foreign exchange, net sales were down
approximately 1% year over year.
Also during the fourth quarter, the
company announced plans to restructure its coffee and fruit spreads operations as part of its ongoing efforts to
enhance the long-term strength and
profitability of its leading brands.
Smucker said the initiative is a longterm investment to optimize production capacity and lower the overall
cost structure. The company expects
to incur restructuring costs of approximately $190 million, of which $5.7 million was recognized in the fourth quarter of 2010. The balance of the costs is
expected to be incurred over the next
four fiscal years, with approximately
$85 million to $90 million expected to
be incurred in fiscal 2011.
"Our strong ongoing performance
against challenging economic and competitive environments demonstrates
our organization's capabilities," said
bakingbusiness.com / world-grain.com

Richard Smucker, executive chairman
and co-c.e.o. "The strong cash flows we
consistently generate give us the opportunity to make investments in furthering brand equities, product and operational innovations, and brand portfolio
expansion. As a result, our core businesses are solid, our brands are strong,
and we are well-poised for the future."
Breaking down results by segments,
Smucker said profit
in its U.S. Retail
Consumer Market
increased 10% in
fiscal 2010, rising to
$274,969,000
from
$249,913,000 in fiscal 2009, reflecting
lower raw material costs and favorable product mix associated with
strong peanut butter sales. Net sales
rose 2% to $1,125,280,000. Volume
gains were realized in Jif peanut butter, Smucker's fruit spreads and Uncrustables sandwiches, and Hungry
Jack pancake mixes and syrups.
Profit in the U.S. Retail Oils and
Baking Market segment rose 15% to

Financial Results

$142,161,000 from $124,150,000, while
sales fell 9% to $905,719,000 from
$995,474,000. Smucker attributed the
decline in sales to Pillsbury flour and
baking mixes and Crisco oils, which
faced a competitive retail environment.
The U.S. Retail Coffee Market segment posted a 129% gain in profit, rising to $550,786,000 from $240,971,000.
Net sales for the year rose 99% to
$1,700,458.
Profit in the Special Markets segment rose 33% in fiscal 2010, climbing to $148,768,000 from $111,741,000.
Sales, meanwhile, advanced 9% to
$873,832,000.
For fiscal 2011, net sales are expected
to increase at a more normalized organic growth rate, excluding acquisitions, of approximately 3% compared
with fiscal 2010. Income per diluted
share is expected to range between
$4.50 and $4.60, excluding restructuring and merger and integration costs of
55c to 60c per diluted share. Approximately 40c per share of intangible asset
amortization, a noncash expense item,
is included in the range of income per
diluted share for 2011, Smucker said. MBN

A BAKING TRADITION
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Milling & Baking News June 29, 2010 / 37

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Milling & Baking News - June 29, 2010

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