The J. M. Smucker Company (SJM) Q4 2012 earnings summary

Executive summary

• FY12 net sales reached $5.53B, up 15% YoY, as pricing and acquisitions more than offset a 5% volume decline.

• Adjusted diluted EPS rose to $4.73 from $4.69; GAAP operating income declined 1% and net income declined 4%.

• Growth initiatives included more than 60 product launches, two coffee-related acquisitions, and a 25% investment in Seamild.

Financial highlights

• Net sales were $5,525.8M; gross profit $1,845.2M; operating income $778.3M; net income $459.7M; diluted EPS $4.06.

• Excluding special project costs, gross profit was $1,888.4M and operating income $893.9M; adjusted diluted EPS was $4.73 vs. $4.69 in FY11.

• Excluding special project costs, gross margin was 34.2% vs. 38.4% and operating margin was 16.2% vs. 18.6%.

• Operating cash flow was $730.9M, capital expenditures $274.2M, and free cash flow $456.7M.

Outlook and guidance

• FY13 plans include as many as 100 new products, increased focus on opening-price-point offerings, supply-chain and acquisition synergies, and further sustainability work.

• Long-term targets are annual net sales growth of 6% and EPS growth above 8%; organic growth is expected to contribute 3–4% annually over the long term.

• FY13 capital expenditures are expected at $210M–$220M; cash, operating cash flow, and available credit are expected to cover requirements for the next 12 months, absent further acquisitions or major investments.

• Remaining restructuring costs are expected primarily over the next two fiscal years; anticipated total restructuring costs were raised to $245M.