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 jams, jellies, preserves, 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 six strategic business areas: Consumer, Mrs. Smith's, Foodservice, International, 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 acquisition of the Mrs. Smith's Frozen Foods Co., a subsidiary of Kellogg Company in late fiscal 1994 has allowed the Company to expand its distribution into the frozen foods section of the grocery store.
The Company's distribution outside the United States is principally in Canada, Australia, the United Kingdom, and Latin America, although products are exported to other countries. The acquisition during fiscal 1994 of the Culinar, Inc. jam division in Quebec significantly expanded the Company's presence in the Canadian market. International sales now 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 of the Company include: "SMUCKER'S", "MRS. SMITH'S", "THE R. W. KNUDSEN FAMILY", "MARY ELLEN", "LOST ACRES", "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", "AFTER THE FALL", "SANTA CRUZ NATURAL", "DICKINSON'S", "SPRITZER", "FRUIT TEAZER", "TEAKOOLER", "HEINKE", and "FRUITAGE". In addition, the Company licenses the "IXL", "SHIRRIFF", "SCHWARTAU", and "VACHON" brands.
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 holiday season, the Company expects the addition of "MRS. SMITH'S" to significantly impact its second and third quarter results.
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 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 leading manufacturer of fruit spreads, toppings, and frozen pies in the United States. The Company's business is highly competitive as all its brands compete for retail shelf 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.
ENVIRONMENTAL MATTERS. Compliance with the provision 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, 1994, the Company had approximately 2,600 full-time employees, worldwide.
SEGMENT AND GEOGRAPHIC INFORMATION. Information concerning international operations for the years 1994, 1993, and 1992 is hereby incorporated by reference from the 1994 Annual Report to Shareholders, on page 20 under Note B: "Operating Segments."
ITEM 2.
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.
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 Toronto, Ontario, and Longueuil, Quebec, Canada, and Carlton, Victoria, Australia. All production properties are owned except the facility in Oxnard, California, which is leased.
ITEM 3.
ITEM 3. LEGAL PROCEEDINGS
The Company is not a party to any pending legal proceeding which would be considered material.
ITEM 4.
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, 1994, 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. All of the officers have held various positions with the Company for more than five years.
PART II
ITEM 5.
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 1994 Annual Report to Shareholders under the caption "Stock Price Data" on page 9.
ITEM 6.
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 1994 Annual Report to Shareholders under the following captions and page numbers: "Five Year Summary of Selected Financial Data" on page 9; Note E: "Postretirement Benefits Other Than Pensions" on page 22; and Note G: "Income Taxes" on pages 24 and 25.
ITEM 7.
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 1994 Annual Report to Shareholders, on pages 10 through 12.
ITEM 8.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Consolidated financial statements of the Company at April 30, 1994, 1993, and 1992 and for each of the three years in the period ended April 30, 1994, with the report of independent auditors and selected unaudited quarterly financial data, are hereby incorporated by reference from the Company's 1994 Annual Report to Shareholders on page 9 and pages 13 through 26, respectively.
ITEM 9.
ITEM 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III
ITEM 10.
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 11, 1994, for the 1994 Annual Meeting of Shareholders on August 16, 1994, 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.
ITEM 11.
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 11, 1994, for the 1994 Annual Meeting of Shareholders on August 16, 1994 under the following captions and page numbers: "Directors' Meetings and Compensation" on page 4, and "Executive Compensation" on pages 4 through 10.
ITEM 12.
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 11, 1994, for the 1994 Annual Meeting of Shareholders on August 16, 1994 on pages 12 and 13 under the caption "Ownership of Common Shares."
ITEM 13.
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 11, 1994, for the 1994 Annual Meeting of Shareholders on August 16, 1994 under the following captions and page numbers: "Election of Directors" on pages 2 through 4.
PART IV
ITEM 14.
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 of this Report.
3. Exhibits
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 1994.
On April 15, 1994, the Company filed a Current Report on Form 8-K with the Securities and Exchange Commission reporting that the Company was acquiring the "MRS. SMITH'S" frozen pie business from Mrs. Smith's Frozen Foods Co., a wholly owned subsidiary of Kellogg Company.
On June 13, 1994, the Company amended its April 15, 1994 Form 8-K filing to include both audited financial statements and proforma information as required under item 7(a) and 7(b) of Form 8-K.
(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.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Form 10-K Report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: July 15, 1994 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.