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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended April 30, 1995
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 1-5111
THE J. M. SMUCKER COMPANY
Ohio 34-0538550
State of Incorporation I.R.S. Employer Identification No.
One Strawberry Lane
Orrville, Ohio 44667-0280
Principal executive offices
Telephone number: (216) 682-3000
Securities registered pursuant to Section 12(b) of the Act:
Class A Common Shares, no par value Registered on the
Class B Common Shares, no par value New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
The Registrant has filed all reports required to be filed by Section 13 or
15(d) of the Securities Exchange Act of 1934 during the preceding 12 months,
and has been subject to such filing requirements for at least the past 90 days.
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. [ ]
As of July 3, 1995, 14,384,839 Class A Common Shares and 14,778,839 Class B
Common Shares of The J. M. Smucker Company were issued and outstanding. The
aggregate market value of the voting Common Shares (Class A) held by
non-affiliates of the Registrant at July 3, 1995, was $243,969,381.
Certain sections of the Registrant's definitive Proxy Statement, dated July 17,
1995, for the August 15, 1995 Annual Meeting of Shareholders and of the 1995
Annual Report to Shareholders are incorporated by Reference into Parts I, II,
III and IV of this Report.
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PART I
ITEM 1. BUSINESS
THE COMPANY. The J. M. Smucker Company was begun in 1897 and was
incorporated in Ohio in 1921. The Company, generally referred to as Smucker's
(a registered trademark), operates in one industry, the manufacturing and
marketing of food products on a worldwide basis. Unless otherwise indicated by
the context, the term "Company" as used in this report means The J. M. Smucker
Company and its subsidiaries.
PRINCIPAL PRODUCTS. The principal products of the Company are fruit
spreads, frozen pies, dessert toppings, syrups, peanut butter, industrial fruit
products (such as bakery and yogurt fillings), fruit and vegetable juices,
juice beverages, pie fillings, condiments, and gift packages.
The Company is structured around seven strategic business areas:
Consumer, Mrs. Smith's, Beverage, International, Foodservice, Industrial, and
Specialty Foods. Within the domestic markets, the Company's products are
primarily sold through brokers to chain, wholesale, cooperative, and
independent grocery accounts and other consumer markets, and to foodservice
distributors and chains including hotels, restaurants, and institutions.
Industrial products such as bakery and fruit fillings are typically sold direct
to other food manufacturers and marketers for inclusion in their products.
The Company's distribution outside the United States is principally in
Canada, Australia and the Pacific Rim, the United Kingdom, and Latin America,
although products are exported to other countries. International sales
represent approximately 11% of total Company sales.
SOURCES AND AVAILABILITY OF RAW MATERIALS. The fruit raw materials
used by the Company in the production of its food products are generally
purchased from independent growers and suppliers, although the Company grows
some strawberries for its own use. Because of the seasonal nature and
volatility of quantities of most of the crops on which the Company depends, it
is necessary to prepare and freeze stocks of fruit, fruit juices, berries, and
other food products and to maintain them in cold storage warehouses.
Sweeteners, peanuts, and other ingredients are obtained from various other
sources.
PATENTS AND TRADEMARKS. The Company's products are marketed under
several trademarks owned by the Company. The principal trademarks are the
Company's names and certain designs of products. Major trademarks include:
Smucker's, Mrs. Smith's, The R. W. Knudsen Family, After The Fall, Mary Ellen,
Dickinson's, Lost Acres, IXL, Laura Scudder's, Simply Fruit, Dutch Girl, Good
Morning, Extra Fruit, Double Fruit, J. M. Smucker's, Super Spreaders, Low
Sugar, Goober, Magic Shell, Special Recipe, Sundae Syrup, Recharge, Santa Cruz
Natural, Spritzer, Fruit Teazer, Heinke, and Fruitage. In addition, the
Company licenses the Peanuts, Shirriff, and Vachon brands.
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Other slogans or designs considered important trademarks to the
Company include: "With a name like Smucker's, it has to be good," Smucker's
banner, the Crock Jar shape, Gingham design, and strawberry logo.
SEASONALITY. Historically, the Company's business has not been highly
seasonal. However, due to the demand for frozen pies during the Fall and
Thanksgiving and Christmas holiday seasons, the Company's second and third
quarter financial performance is significantly impacted by Mrs. Smith's results
during those periods.
WORKING CAPITAL. Working capital requirements are greatest during the
late spring and summer months due to seasonal procurement of fruits, berries,
and peanuts. During this period, short-term borrowing may be used to augment
working capital generated by sales.
CUSTOMERS. The Company is not dependent either on a single customer or
on a very few customers for a major part of its sales. No single domestic or
foreign customer accounts for more than 10% of consolidated sales.
ORDERS. Generally, orders are filled within a few days of receipt and
the backlog of unfilled orders at any particular time is not material.
GOVERNMENT BUSINESS. The Company has no material portion of its
business which may be subject to negotiation of profits or termination of
contracts at the election of the government.
COMPETITION. The Company is the U.S. market leader in the fruit
spread, frozen pie, ice cream topping, and natural peanut butter categories.
The Company's business is highly competitive as all its brands compete for
retail shelf and freezer space with other advertised and branded products as
well as unadvertised and private label products. The rapid growth of
alternative store formats (i.e. warehouse club and mass merchandise stores) and
changes in business practices, resulting from both technological advances and
new industry techniques, have added additional variables for companies in the
food industry to consider in order to remain competitive. The principal
methods of and factors in competition are product quality, price, advertising,
and promotion.
RESEARCH AND DEVELOPMENT. The Company predominantly utilizes in-house
programs to both develop new products and improve existing products in each of
its strategic business areas. In relation to consolidated assets and operating
expenses, amounts expensed in each of the areas were not material in any of the
last three years.
ENVIRONMENTAL MATTERS. Compliance with the provisions of federal,
state, and local environmental regulations regarding either the discharge of
materials into the environment or the protection of the environment is not
expected to have a material effect upon the capital expenditures, earnings, or
competitive position of the Company.
EMPLOYEES. At April 30, 1995, the Company had approximately 2,600
full-time employees, worldwide.
SEGMENT AND GEOGRAPHIC INFORMATION. Information concerning
international operations for the years 1995, 1994, and 1993 is hereby
incorporated by reference from the 1995 Annual Report to Shareholders, on page
19 under Note B: "Operating Segments."
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ITEM 2. PROPERTIES
The table below lists all the Company's manufacturing and fruit
processing facilities. All of the Company's properties are maintained and
updated on a regular basis, and the Company continues to make investment for
expansion and technological improvements. All production properties listed
below are owned except the facility in Oxnard, California, which is leased.
DOMESTIC MANUFACTURING LOCATIONS PRODUCTS PRODUCED
- --------------------------------------------------------------------------------------------------
Orrville, Ohio Fruit spreads, toppings, industrial fruit products
Salinas, California Fruit spreads, toppings
Memphis, Tennessee Fruit spreads, toppings
Ripon, Wisconsin Fruit spreads, toppings, condiments
New Bethlehem, Pennsylvania Peanut butter and Goober products
Pottstown, Pennsylvania Frozen pies, pie shells
Chico, California Fruit and vegetable juices, beverages
Havre de Grace, Maryland Fruit and vegetable juices, beverages
FRUIT PROCESSING LOCATIONS FRUIT PROCESSED
- -------------------------------------------------------------------------------------------------------
Watsonville, California Strawberries, oranges, apples, peaches, apricots.
Also, produces industrial fruit products.
Woodburn, Oregon Strawberries, raspberries, blackberries,
blueberries. Also produces industrial fruit
products.
Grandview, Washington Grapes, cherries, strawberries, cranberries
Oxnard, California Strawberries
INTERNATIONAL MANUFACTURING LOCATIONS PRODUCTS PRODUCED
- ----------------------------------------------------------------------------------------------
Ste-Marie, Quebec, Canada Fruit spreads, pie fillings, sweet spreads
Kyabram, Victoria, Australia Fruit spreads, toppings, fruit pulps
Elsenham, England Jams, specialty items
In addition to the locations listed above, acreage is leased in
California for the growing of strawberries. The corporate headquarters are
located in Orrville, Ohio and offices are leased in Carlton, Victoria,
Australia; Mexico City, Mexico; Toronto, Ontario, Canada; Longueuil, Quebec,
Canada; and Brattleboro, Vermont.
ITEM 3. LEGAL PROCEEDINGS
The Company is not a party to any pending legal proceeding which would
be considered material.
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ITEM 4. SUBMISSIONS OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
EXECUTIVE OFFICERS OF THE COMPANY
The names, ages as of July 1, 1995, and positions of the executive
officers of the Company are listed below. All executive officers serve at the
pleasure of the Board of Directors, with no fixed term of office. Paul H.
Smucker is the father of Tim and Richard K. Smucker and the father-in-law of H.
Reid Wagstaff. All of the officers have held various positions with the
Company for more than five years.
Years with Served in
Name Age Company Position Office Since
- ---------------------------------------------------------------------------------------------------------------
Paul H. Smucker 78 56 Chairman of the Executive Committee 1970
Tim Smucker 51 26 Chairman 1987
Richard K. Smucker 47 22 President 1987
Vincent C. Byrd 40 18 Vice President and General Manager, 1989
Consumer Market
K. Edwin Dountz 53 19 Vice President - Sales 1982
Fred A. Duncan 49 17 Vice President and General Manager, 1984
Industrial Market
Charles A. Laine 59 30 Vice President and General Manager, 1984
International and Beverage Markets
R. Alan McFalls 50 18 Vice President - Corporate Development and 1988
Planning
John D. Milliken 50 21 Vice President - Customer Logistics 1981
Robert R. Morrison 60 34 Vice President - Operations 1967
H. Reid Wagstaff 60 19 Vice President - Government and 1994
Environmental Affairs
Steven J. Ellcessor 43 9 Secretary and General Counsel 1986
Richard G. Jirsa 49 20 Corporate Controller 1978
Philip P. Yuschak 56 19 Treasurer 1989
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER
MATTERS
The information pertaining to the market for the Company's Common
Stock and other related shareholder information is hereby incorporated by
reference from the Company's 1995 Annual Report to Shareholders under the
caption "Stock Price Data" on page 9.
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ITEM 6. SELECTED FINANCIAL DATA
Five year summaries of selected financial data for the Company and
discussions of accounting changes which materially affect the comparability of
the selected financial data are hereby incorporated by reference from the
Company's 1995 Annual Report to Shareholders under the following captions and
page numbers: "Five Year Summary of Selected Financial Data" on page 8; Note
E: "Postretirement Benefits Other Than Pensions" on pages 21 and 22; and Note
I: "Income Taxes" on pages 25 and 26.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS
Management's discussion and analysis of results of operations and
financial condition, including a discussion of liquidity and capital resources,
is hereby incorporated by reference from the Company's 1995 Annual Report to
Shareholders, on pages 10 through 12.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Consolidated financial statements of the Company at April 30, 1995,
1994, and 1993 and for each of the three years in the period ended April 30,
1995, with the report of independent auditors and selected unaudited quarterly
financial data, are hereby incorporated by reference from the Company's 1995
Annual Report to Shareholders on page 9 and pages 12 through 26.
ITEM 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information regarding directors and nominees for directorship is
incorporated herein by reference from the Company's definitive Proxy Statement,
dated July 17, 1995, for the 1995 Annual Meeting of Shareholders on August 15,
1995, on pages 2 through 4, under the caption "Election of Directors." For
information concerning the Company's executive officers, see "Executive
Officers of the Registrant" set forth in Part I hereof.
Information regarding disclosure of late filers pursuant to Item 405
of Regulation S-K is incorporated herein by reference from the Company's
definitive Proxy Statement, dated July 17, 1995, for the 1995 Annual Meeting of
Shareholders on August 15, 1995, on pages 13 and 14 under the caption
"Ownership of Common Shares."
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ITEM 11. EXECUTIVE COMPENSATION
Information regarding the compensation of directors and executive
officers is incorporated by reference from the Company's definitive Proxy
Statement, dated July 17, 1995, for the 1995 Annual Meeting of Shareholders on
August 15, 1995 under the following captions and page numbers: "Additional
Information Concerning the Board of Directors of the Company" on pages 4 and 5,
and beginning with "Report of the Executive Compensation Committee of the Board
of Directors" on page 5 and continuing through "Pension Plan" on page 11.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Information regarding security ownership of certain beneficial owners
of all directors and nominees, of the named executive officers, and of
directors and executive officers as a group, is hereby incorporated by
reference from the Company's definitive Proxy Statement, dated July 17, 1995,
for the 1995 Annual Meeting of Shareholders on August 15, 1995 on pages 13 and
14 under the caption "Ownership of Common Shares."
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information regarding certain relationships and related transactions
is hereby incorporated by reference from the Company's definitive Proxy
Statement dated July 17, 1995, for the 1995 Annual Meeting of Shareholders on
August 15, 1995 under the captions "Election of Directors" and "Additional
Information Concerning the Board of Directors of the Company" on pages 2
through 5.
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PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) 1, 2. Financial Statements and Financial Statement Schedules
The index to Consolidated Financial Statements and Financial
Statement Schedules is included on page F-1 of this Report.
3. Exhibits
Exhibit
No. Description
- --------------------------------------------------------------------------------
3(a) 1991 Amended Articles of Incorporation incorporated by reference
to the 1992 Annual Report on Form 10-K.
3(b) Amended Regulations
4(a) Industrial Development Revenue Bond Project Agreement dated as of
December 1, 1986. As permitted by Item 601(b)(4)(iii) of
Regulation S-K, copies of this instrument are not filed herewith;
a copy will be furnished to the Commission upon request.
4(b) Revolving credit agreement between The J. M. Smucker Company
and Society National Bank (individually and as Agent), National
City Bank, and the First National Bank of Chicago dated as of
April 27, 1994, incorporated by reference to the Quarterly Report
on Form 10-Q for the period ended July 31, 1994.
4(c) First Amendment Agreement to the revolving credit agreement
between The J. M Smucker Company and Society National Bank
(individually and as Agent), National City Bank, and the First
National Bank of Chicago dated as of April 25, 1995.
10(a) Amended Restricted Stock Bonus Plan incorporated by reference to
the 1994 Annual Report on Form 10-K.
10(b) Top Management Supplemental Retirement Benefit Plan incorporated
by reference to the 1994 Annual Report on Form 10-K.
10(c) 1987 Stock Option Plan incorporated by reference to the 1994
Annual Report on Form 10-K.
10(d) Management Incentive Plan incorporated by reference to the 1994
Annual Report on Form 10-K.
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13 Excerpts from 1995 Annual Report to Shareholders
21 Subsidiaries of the Registrant
23 Consent of Independent Auditors
24 Powers of Attorney
27 Financial Data Schedules
All other required exhibits are either inapplicable to the Company
or require no answer.
Copies of exhibits are not attached hereto, but the Company
will furnish any of the foregoing exhibits to any shareholder
upon written request. Please address inquiries to: The J. M.
Smucker Company, Strawberry Lane, Orrville, Ohio 44667,
Attention: Steven J. Ellcessor, Secretary. A fee of $1 per
page will be charged to help defray the cost of handling,
copying, and return postage.
(b) Reports on Form 8-K filed in the Fourth Quarter of 1995.
No reports on Form 8-K were required to be filed during the last quarter
of the period covered by this report.
(c) The response to this portion of Item 14 is submitted as a separate
section of this report.
(d) The response to this portion of Item 14 is submitted as a separate
section of this report.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Report on Form 10-K
to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: July 25, 1995 The J. M. Smucker Company
By Steven J. Ellcessor
Secretary
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, this Report on Form 10-K has been signed below by the following
persons on behalf of the Registrant and in the capacities and on the date
indicated.
- -----------------------------------
Paul H. Smucker Chairman of the Executive Committee and Director
(Principal Executive Officer)
- -----------------------------------
Tim Smucker Chairman and Director
(Principal Executive Officer)
- -----------------------------------
Richard K. Smucker President and Director
(Principal Executive Officer)
(Principal Financial Officer)
- -----------------------------------
Richard G. Jirsa Corporate Controller
(Principal Accounting Officer)
- -----------------------------------
Lena C. Bailey Director
- -----------------------------------
William P. Boyle, Jr. Director
- -----------------------------------
Russell G. Mawby Director By Steven J. Ellcessor
Attorney-in-Fact
- -----------------------------------
Charles S. Mechem, Jr Director
Date: July 25, 1995
- -----------------------------------
Robert R. Morrison Director
- -----------------------------------
Vernon D. Netzly Director
- -----------------------------------
William H. Steinbrink Director
- -----------------------------------
Benjamin B. Tregoe, Jr. Director
- -----------------------------------
Barbara Trueman Director
- -----------------------------------
William Wrigley, Jr. Director
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THE J. M. SMUCKER COMPANY
ANNUAL REPORT ON FORM 10-K
ITEMS 14(a) (1) AND (2), (c) AND (d)
INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES
CERTAIN EXHIBITS
FINANCIAL STATEMENT SCHEDULES
Form Annual
10-K Report To
Report Shareholder
------ -----------
Data incorporated by reference from the 1995 Annual Report
to Shareholders of The J. M. Smucker Company:
Consolidated Balance Sheets at April 30, 1995 and 1994 . . . . . . . . 14-15
For the years ended April 30, 1995, 1994, and 1993:
Statements of Consolidated Income . . . . . . . . . . . . . . . . . . 13
Statements of Consolidated Cash Flows . . . . . . . . . . . . . . . . 16
Statements of Consolidated Shareholders' Equity . . . . . . . . . . . 17
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . 18-26
Consolidated financial statement schedules at April 30, 1995,
or for the years ended April 30, 1995, 1994, and 1993:
VIII. Valuation and qualifying accounts . . . . . . . . . . . . . . . F-2
All other schedules are omitted because they are not applicable or
because the information required is included in the Consolidated Financial
Statements or the notes thereto.
F-1
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THE J. M. SMUCKER COMPANY
SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS
YEARS ENDED APRIL 30, 1995, 1994 AND 1993
(DOLLARS IN THOUSANDS)
Balance at Charged to Charged to Deduc- Balance at
Classification Beginning Costs and Other tions End of
of year Expenses Accounts (A) Period
- --------------------------------------------------------------------------------------------------------------
1995:
Valuation allowance for $ 2,265 $ 395 $ --- $ --- $ 2,660
deferred tax assets
Allowance for doubtful accounts 419 195 $ --- 139 475
-----------------------------------------------------------------------
$ 2,684 $ 590 $ --- $ 139 $ 3,135
======== ======== ======== ======= ========
1994:
Valuation allowance for $ 1,884 $ 381 $ --- $ --- $ 2,265
deferred tax assets
Allowance for doubtful accounts 300 201 --- 82 419
-----------------------------------------------------------------------
$ 2,184 $ 582 $ --- $ 82 $ 2,684
======== ======== ======== ======== ========
1993:
Valuation allowance for $ --- $ 1,884 $ --- $ --- $ 1,884
deferred tax assets
Allowance for doubtful accounts 696 261 --- 657 300
-----------------------------------------------------------------------
$ 696 $ 2,145 $ --- $ 657 $ 2,184
======= ======== ======== ======== ========
<FN>
(A) Uncollectible accounts written off, net of recoveries.
F-2