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BUSINESS NEWS

INVESTING

Financial Glossary

PERSONAL FINANCE AT WALLETPOP

SMALL BUSINESS

The J. M. Smucker Company Announces Third Quarter Results

PR Newswire

Posted: 2009-02-25 07:00:00

"We delivered strong financial performance this quarter with solid results in our core Smucker business and the addition of Folgers," commented Richard Smucker, Executive Chairman and Co-Chief Executive Officer. "The Folgers merger was completed early in the quarter and contributed to margin expansion and significantly increased cash flow. The integration remains on track and we appreciate the commitment of our employees both in integrating Folgers, and maintaining their focus on the core business."

"In difficult economic times, families look for reassurance, comfort, consistency and quality -- all hallmarks of our brands," added Tim Smucker, Chairman of the Board and Co-Chief Executive Officer. "We are able to meet our consumers' needs by providing choices within our product offerings, a steady stream of innovation, consumer value and products they can trust. As a result, we are well-positioned to navigate today's tough economic times and, more importantly, our focus on the long-term will position us for future growth."

Non-GAAP Measures

The Company uses non-GAAP measures including net sales excluding acquisitions and foreign exchange rate impact; income, operating income, and income per diluted share, excluding restructuring and merger and integration costs; earnings before interest, taxes, depreciation, and amortization ("EBITDA"); and adjusted EBITDA as key measures for purposes of evaluating performance internally. These non-GAAP measures are not intended to replace the presentation of financial results in accordance with U.S. GAAP. Rather, the presentation of these non-GAAP measures is consistent with the way management internally evaluates its businesses, and facilitates the comparison of past and present operations. A reconciliation of non-GAAP measures to the comparable GAAP item for the current quarter and nine-month period is included in the "Unaudited Non-GAAP Measures" table.



Net Sales
                                          Three months ended Nine months ended
                                           January 31, 2009  January 31, 2009
                                                  (Dollars in millions)

Increase in net sales as reported       $517.2     78%    $754.6     39%
    Less:
      Acquisitions                          (491.7)   (74%)   (558.1)   (29%)
      Foreign exchange                        16.0      2%     19.0       1%
    Increase in net sales without
     acquisitions and foreign exchange       $41.5      6%    $215.5     11%

Net sales increased 78 percent in the third quarter of 2009 compared to 2008. Acquisitions contributed approximately $491.7 million, including $468.5 million from Folgers, while foreign exchange reduced net sales by approximately $16.0 million. Excluding acquisitions and foreign exchange, net sales increased 6 percent.

Over the last year, the Company has implemented price increases necessary to offset rising costs. While pricing was the main driver of the net sales growth, contributing 13 percent, a number of categories experienced volume gains, including Pillsbury(R) baking mixes and frostings, Hungry Jack(R) pancakes and syrups, and canned milk, all reflecting current back-to-home meal trends. As expected, volume declines were concentrated in the oils and flour categories. Recent pressures in the peanut butter category caused a slight decline in volume and the Company expects this to continue through the fourth quarter although no Company products are involved in the recall.



Margins
                                     Three months ended    Nine months ended
                                         January 31,           January 31,
                                      2009        2008       2009       2008
                                                   (% of net sales)

Gross profit                      33.9%       29.4%      31.7%      31.0%
    Selling, distribution, and
     administrative expenses:
       Marketing and selling          10.0%        9.4%      10.0%       9.8%
       Distribution                    3.6%        3.3%       3.5%       3.4%
       General and administrative      4.3%        5.5%       4.8%       5.8%
                                      17.9%       18.2%      18.3%      19.0%
    Amortization                       1.7%        0.2%       0.9%       0.2%
    Restructuring and merger and
     integration costs                 2.8%        0.5%       1.6%       0.4%
    Other operating expense (income)   0.0%        0.2%       0.0%      (0.1%)
    Operating income                  11.5%       10.3%      10.9%      11.5%

Overall, gross profit increased $205.6 million in the third quarter of 2009, more than doubling the amount in the same period last year. The primary driver of the gross profit improvement was the addition of Folgers. The Company improved gross profit on its base business by approximately 17 percent, or 2.6 percentage points, despite higher costs on many key ingredients. Current pricing is more in line with these higher costs, contributing to the gross profit increase and allowing the Company to continue to recover margin lost over the past few years. Margin gains in oils, canned milk, and regional baking brands, along with the addition of Folgers, combined to increase gross margin to 33.9 percent in the third quarter of 2009 from 29.4 percent in the third quarter of 2008.

Selling, distribution, and administrative ("SD&A") expenses increased 74 percent for the third quarter of 2009 compared to 2008. An increase in marketing and distribution expenses, much of which was related to the addition of Folgers, accounted for approximately 70 percent of the SD&A increase. Most SD&A expenses, particularly selling and corporate overhead, increased at a lesser rate than net sales resulting in an overall decrease in SD&A from 18.2 percent of net sales to 17.9 percent, further contributing to the improvement in operating margin.

Amortization expense increased $19.0 million to 1.7 percent of net sales compared to 0.2 percent of net sales in the same period in 2008 reflecting the addition of intangible assets associated with the Folgers transaction. The valuation of these intangible assets is preliminary, and amortization expense in future periods may vary from the amounts recorded, depending on the final values.

Operating income increased 97 percent compared to the third quarter of 2008 and improved from 10.3 percent to 11.5 percent of net sales. Restructuring and merger and integration costs were $29.5 million higher in the third quarter of 2009 compared to 2008, as integration activities related to Folgers commenced, reducing operating margin by 2.3 percentage points. Excluding the impact of restructuring and merger and integration costs, operating income more than doubled and increased from 10.9 percent to 14.3 percent of net sales.

Other

During the third quarter, the Company's debt obligations increased by Folgers' $350 million of LIBOR-based variable rate debt. In addition, the Company issued $400 million in Senior Notes with a weighted-average interest rate of 6.6 percent during the second quarter. As a result, interest expense increased $11.2 million during the third quarter of 2009 compared to 2008.

    Income tax expense increased $16.7 million, or 84 percent, during the
third quarter of 2009 compared to 2008, in line with the percentage increase
in income before taxes.  The effective tax rate was 31.8 percent, consistent
in both periods.

Segment Performance

Three Months Ended       Nine Months Ended
                                    January 31,              January 31,

% In-                    % In-
                                               crease                   crease
                                                (De-                     (De-
                                  2009    2008 crease)   2009    2008  crease)
                                           (Dollars in millions)
    Net sales
      U.S. retail market         $549.3   $502.2    9% $1,656.4 $1,455.6   14%
      U.S. retail coffee market  $442.9    $-     n/a    $442.9      $-    n/a
      Special markets            $190.4   $163.2   17%   $590.1   $479.2   23%

Segment profit:
      U.S. retail market         $110.3    $79.4   39%   $297.1   $256.5   16%
        % of net sales             20.1%    15.8%          17.9%    17.6%
      U.S. retail coffee market   $90.2     $-    n/a     $90.2     $-    n/a
        % of net sales             20.4%    n/a            20.4%     n/a
      Special markets             $27.0    $25.2    7%    $74.2    $67.6   10%
        % of net sales             14.2%    15.4%          12.6%    14.1%

With the addition of Folgers, the Company added the U.S. retail coffee market reportable segment representing the domestic sales of Folgers(R), Millstone(R), and Dunkin' Donuts(R) branded coffee to retail customers. Coffee sales to other than domestic retail customers are included in the special markets segment.

U.S. Retail Market

U.S. retail market segment net sales for the quarter were up 9 percent, with pricing accounting for the majority of the increase. Net sales in the consumer strategic business area increased 9 percent, with gains in Smucker's(R) fruit spreads, Jif(R) and Hungry Jack(R). Acquisitions contributed approximately one-quarter of the consumer increase. Net sales in the consumer oils and baking strategic business area were also up 9 percent, with increases in Pillsbury(R), Crisco(R) and Eagle Brand(R) canned milk, primarily due to the effect of price increases. Volume gains were realized in baking mixes, frostings, and canned milk. While total volume in the business area was down 11 percent most of the decline was expected and reflects the impact of last year's price increases in oils and flour.

For the first nine months of 2009, U.S. retail market segment net sales increased 14 percent compared to the first nine months of 2008 with net sales up 12 percent in the consumer strategic business area, and up 15 percent in the consumer oils and baking strategic business area.

U.S. retail market segment profit increased 39 percent for the quarter, sharply ahead of the increase in net sales, and 16 percent for the first nine months of 2009 compared to the same periods in 2008. Much of the gain was in the oils and baking area with almost half of the segment profit increase attributable to improvements in the canned milk business. A better match of prices to costs this year compared to last year accounted for most of the remainder of the profit increase.

U.S. Retail Coffee Market

The U.S. retail coffee market segment contributed $442.9 million to net sales and $90.2 million in segment profit for the third quarter of 2009. On a pro forma basis, net sales increased 4 percent for the quarter as growth in Dunkin' Donuts(R) contributed to net sales and margin growth. Integration of the Folgers business is proceeding as planned as the Company completed its customer facing activities at the beginning of February, achieving a key milestone.

Special Markets

Net sales in the third quarter for the special markets segment increased 17 percent. Canada strategic business area net sales were flat, as the impact of the Europe's Best(R) acquisition and pricing gains were offset by unfavorable foreign exchange. In local currency, Canada net sales increased 3 percent excluding acquisitions. Net sales increased in the foodservice business area by 64 percent, as the acquisition of Folgers added $25.6 million of the increase and the Knott's Berry Farm(R) acquisition also contributed. The gains from acquisitions accounted for most of the increase, and more than offset declines in the portion control business resulting from a decrease in away-from-home dining. Net sales in the beverage business area were down 7 percent. For the first nine months of 2009, special markets segment net sales are up 23 percent, primarily due to acquisitions.

Special markets segment profit increased 7 percent for the quarter and 10 percent for the first nine months of 2009 compared to the same periods in 2008, again resulting from the impact of recent acquisitions.

Other Financial Results and Measures

For the third quarter of 2009, EBITDA was $179 million, or 15.1 percent of net sales, compared to $85.6 million, or 12.9 percent of net sales in the third quarter of 2008, reflecting better margin on the Company's core brands and the impact of the Folgers merger. Cash provided by operating activities increased $138.4 million to $280.3 million during the quarter resulting from the completion of the Fall Bake season, and the contribution from Folgers. As a result, the Company had $359.9 million in cash and cash equivalents on hand at January 31, 2009.

Outlook

The Company estimates net sales for fiscal 2009 to range from $3.6 to $3.7 billion, down from a previous range of $3.8 to $4.0 billion. Non-GAAP income per diluted share, excluding restructuring and merger and integration costs, is estimated to range from $3.15 to $3.30. The new income per share range includes the incremental noncash amortization expense related to Folgers and the anticipated impact from ongoing pressure in the peanut butter category. The effect of lost peanut butter sales and margins, along with the related additional advertising and consumer communication costs, and unrecovered overhead are expected to result in a negative impact in the range of $0.05 to $0.07 per diluted share. The Company remains committed to its long-term strategic objectives of 6 percent annual sales growth and greater than 8 percent earnings per share growth.

Conference Call

The Company will conduct an earnings conference call and webcast today, Wednesday, February 25, 2009, at 8:30 a.m. E.T. The webcast, as well as a replay in downloadable MP3 format, can be accessed from the Company's website at www.smuckers.com. For those unable to listen to the webcast, an audio replay will be available following the call and can be accessed by dialing 888-203-1112 or 719-457-0820, with a pass code of 6323048, and will be available until Wednesday, March 4, 2009.

About The J. M. Smucker Company

For more than 100 years, The J. M. Smucker Company has been committed to offering consumers quality products that help families create memorable mealtime moments. Today, Smucker is the leading marketer and manufacturer of fruit spreads, retail packaged coffee, peanut butter, shortening and oils, ice cream toppings, sweetened condensed milk, and health and natural foods beverages in North America. Its family of brands includes Smucker's(R), Folgers(R), Jif(R), Crisco(R), Pillsbury(R), Eagle Brand(R), R.W. Knudsen Family(R), Hungry Jack(R), White Lily(R) and Martha White(R) in the United States, along with Robin Hood(R), Five Roses(R), Carnation(R), Europe's Best(R) and Bick's(R) 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. The Company has appeared on FORTUNE Magazine's list of the 100 Best Companies to Work For in the United States 11 times, ranking number one in 2004. For more information about the Company, visit www.smuckers.com.

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

The J. M. Smucker Company Forward-Looking Language

This press release contains forward-looking statements, such as projected 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 Smucker and could cause actual results to differ materially from those expressed in the forward-looking statements: (i) volatility of commodity markets from which raw materials, particularly green coffee beans, wheat, soybean oil, milk, and peanuts are procured and the related impact on costs; (ii) the successful integration of the coffee business with Smucker's business, operations and culture and the ability to realize synergies and other potential benefits of the merger within the time frames currently contemplated; (iii) crude oil price trends and their impact on transportation, energy, and packaging costs; (iv) the ability to successfully implement price changes; (v) the success and cost of introducing new products and the competitive response; (vi) the success and cost of marketing and sales programs and strategies intended to promote growth in Smucker's businesses; (vii) general competitive activity in the market, including competitors' pricing practices and promotional spending levels; (viii) the concentration of certain of Smucker's businesses with key customers and the ability to manage and maintain key customer relationships; (ix) the loss of significant customers or a substantial reduction in orders from these customers or the bankruptcy of any such customer; (x) changes in consumer coffee preferences, and other factors affecting the coffee business, which represents a substantial portion of Smucker's business; (xi) the ability of Smucker to obtain any required financing; (xii) the timing and amount of capital expenditures, restructuring, and merger and integration costs; (xiii) the outcome of current and future tax examinations and other tax matters, and their related impact on Smucker's tax positions; (xiv) foreign currency and interest rate fluctuations; (xv) political or economic disruption due to the global recession and credit crisis; (xvi) other factors affecting share prices and capital markets generally; and (xvii) the other factors described under "Risk Factors" in other reports and statements filed by Smucker with the Securities and Exchange Commission, including its most recent Annual Report on Form 10-K and proxy materials.

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. Smucker does not assume any obligation to update or revise these forward-looking statements to reflect new events or circumstances.

Additional Information

Projected non-GAAP income per diluted share for fiscal 2009 is adjusted from projected GAAP income per diluted share by excluding estimated restructuring and merger and integration costs. The actual amount of those costs for the full fiscal year cannot be determined at this time, but are anticipated to include the same categories of expenses included in the quantitative reconciliation of non-GAAP income before restructuring and merger and integration costs to GAAP net income for the three and nine-month periods ended January 31, 2009 and 2008 included elsewhere in this press release.

    (Logo: http://www.newscom.com/cgi-bin/prnh/20071219/SMUCKERLOGO )

The J. M. Smucker Company
                Unaudited Condensed Consolidated Statements of Income

Three Months Ended January 31,
                                                                         %
                                                                     Increase
                                                2009         2008   (Decrease)
                                            (Dollars in thousands, except per
                                                        share data)

Net sales                               $1,182,594     $665,373     78%
    Cost of products sold                      781,553      469,658     66%
    Cost of products sold - restructuring          -            262   (100%)
    Gross Profit                               401,041      195,453    105%
       Gross margin                               33.9%        29.4%

Selling, distribution, and
     administrative expenses                   211,633      121,384     74%
    Amortization                                20,558        1,523   1250%
    Restructuring costs                            257          705    (64%)
    Merger and integration costs                32,809        2,900   1031%
    Other operating expense (income) -net          325          303      7%
    Operating Income                           135,459       68,638     97%
       Operating margin                           11.5%        10.3%

Interest income                              1,822        3,694    (51%)
    Interest expense                           (21,959)     (10,725)   105%
    Other (expense) income - net                  (966)         553   (275%)
    Income Before Income Taxes                 114,356       62,160     84%
    Income taxes                                36,415       19,759     84%
    Net Income                                 $77,941      $42,401     84%

Net income per common share               $0.68        $0.75     (9%)

Net income per common share-
        assuming dilution                        $0.68        $0.75     (9%)

Dividends declared per common share          $0.32        $0.30      7%

Weighted-average shares outstanding    114,075,455   56,400,147    102%
    Weighted-average shares outstanding -
     assuming dilution                     114,563,568   56,823,265    102%

Nine Months Ended January 31,

%
                                                                     Increase
                                               2009         2008    (Decrease)
                                            (Dollars in thousands, except per
                                                         share data)

Net sales                               $2,689,393    $1,934,776      39%
    Cost of products sold                    1,837,154     1,334,589      38%
    Cost of products sold - restructuring          -             262    (100%)
    Gross Profit                               852,239       599,925      42%
       Gross margin                               31.7%         31.0%

Selling, distribution, and
     administrative expenses                   491,856       367,957      34%
    Amortization                                23,511         3,061     668%
    Restructuring costs                            903         1,606     (44%)
    Merger and integration costs                42,419         5,884     621%
    Other operating expense (income) -net          (34)       (1,070)    (97%)
    Operating Income                           293,584       222,487      32%
       Operating margin                           10.9%         11.5%

Interest income                              5,061        11,015     (54%)
    Interest expense                           (44,017)      (31,735)     39%
    Other (expense) income - net                   400            92     335%
    Income Before Income Taxes                 255,028       201,859      26%
    Income taxes                                83,343        68,531      22%
    Net Income                                $171,685      $133,328      29%

Net income per common share               $2.31         $2.35      (2%)

Net income per common share-
        assuming dilution                        $2.30         $2.33      (1%)

Dividends declared per common share          $5.96         $0.90     562%

Weighted-average shares outstanding     74,247,728    56,716,734      31%
    Weighted-average shares outstanding -
     assuming dilution                      74,669,448    57,206,738      31%

The J. M. Smucker Company
                  Unaudited Condensed Consolidated Balance Sheets

January 31, 2009    April 30, 2008
                                                    (Dollars in thousands)

Assets
    Current Assets:
       Cash and cash equivalents                 $359,907          $171,541
       Trade receivables                          259,107           162,426
       Inventories                                658,451           379,608
       Other current assets                        66,832            62,632
          Total Current Assets                  1,344,297           776,207

Property, Plant, and Equipment, Net           841,601           496,296

Other Noncurrent Assets:
       Goodwill                                 2,688,849         1,132,476
       Other intangible assets, net             3,270,646           614,000
       Other assets                               101,150           110,902
          Total Other Noncurrent Assets         6,060,645         1,857,378
                                               $8,246,543        $3,129,881

Liabilities and Shareholders' Equity
    Current Liabilities:
       Accounts payable                          $176,399          $119,844
       Note payable                               350,000               -
       Current portion of long-term debt          277,466               -
       Other current liabilities                  319,660           119,553
          Total Current Liabilities             1,123,525           239,397

Noncurrent Liabilities:
       Long-term debt, net of current portion     910,000           789,684
       Other noncurrent liabilities             1,298,078           300,947
          Total Noncurrent Liabilities          2,208,078         1,090,631

Shareholders' Equity, net                   4,914,940         1,799,853
                                               $8,246,543        $3,129,881

The J. M. Smucker Company
              Unaudited Condensed Consolidated Statements of Cash Flow

Nine Months Ended January 31,
                                                      2009            2008
                                                    (Dollars in thousands)

Operating Activities
       Net income                                   $171,685       $133,328
       Adjustments to reconcile net income to
        net cash provided by operating activities:
         Depreciation                                 54,016         43,528
         Amortization                                 23,511          3,061
         Asset impairments and other
          restructuring charges                           -             262
         Share-based compensation expense             12,836          8,692
         Working capital                              26,962         (7,629)
    Net Cash Provided by Operating Activities        289,010        181,242

Investing Activities
       Businesses acquired, net of cash acquired     (72,149)      (166,963)
       Additions to property, plant, and equipment   (84,888)       (53,562)
       Proceeds from sale of business                      -          3,407
       Purchases of marketable securities                  -       (229,405)
       Sales and maturities of marketable securities    1,308       256,861
       Other - net                                      9,444           973
    Net Cash Used for Investing Activities           (146,285)     (188,689)

Financing Activities
       Proceeds from long-term debt                   400,000       400,000
       Repayments of long-term debt                        -       (148,000)
       Dividends paid                                (347,023)      (51,478)
       Purchase of treasury shares                     (3,356)      (86,300)
       Other - net                                        700        18,689
    Net Cash Provided by Financing Activities          50,321       132,911
    Effect of exchange rate changes                    (4,680)        4,901
    Net increase in cash and cash equivalents         188,366       130,365
    Cash and cash equivalents at beginning of period  171,541       199,541
    Cash and cash equivalents at end of period       $359,907      $329,906

(  ) Denotes use of cash

The J. M. Smucker Company
                             Unaudited Non-GAAP Measures

Three Months Ended          Nine Months Ended
                                 January 31,               January 31,
                                             % In-                     % In-
                                             crease                    crease
                                              (De-                      (De-
                                2009   2008  crease)    2009      2008 crease)
                             (Dollars in thousands, except per share data)

Operating income before
     restructuring and
     merger and
     integration costs: (1) $168,525  $72,505   132%  $336,906  $230,239  46%
      % of net sales            14.3%    10.9%            12.5%     11.9%

Income before
     restructuring and
     merger and
     integration costs: (2)
      Income                $100,271  $44,992   123%  $200,849  $138,448  45%
      Income per common
       share -- assuming
       dilution                $0.88    $0.79    11%     $2.69     $2.42  11%

Earnings before
     interest, taxes,
     depreciation, and
     amortization:(3)       $179,024  $85,591   109%  $371,511  $269,168  38%
      % of net sales            15.1%    12.9%            13.8%     13.9%

(1) Reconciliation to
         operating income:
        Operating income    $135,459  $68,638    97%  $293,584 $222,487   32%
        Merger and
         integration costs    32,809    2,900  1031%    42,419    5,884  621%
        Cost of products
         sold -
        restructuring              -      262  (100%)       -       262 (100%)
        Restructuring costs      257      705   (64%)      903    1,606  (44%)
        Operating income
         before
         restructuring and
         merger and
         integration costs  $168,525  $72,505   132%  $336,906 $230,239   46%

(2) Reconciliation to
         net income:
        Income before
         income taxes       $114,356  $62,160    84%  $255,028 $201,859   26%
        Merger and
         integration costs    32,809    2,900  1031%    42,419    5,884  621%
        Cost of products
         sold -
         restructuring             -      262  (100%)       -       262 (100%)
        Restructuring costs      257      705   (64%)      903    1,606  (44%)
        Income before
         income taxes,
         restructuring, and
         merger and
         integration costs   147,422   66,027   123%   298,350  209,611   42%
        Income taxes          47,151   21,035   124%    97,501   71,163   37%
        Income before
         restructuring and
         merger and
         integration costs  $100,271  $44,992   123%  $200,849 $138,448   45%

(3) Reconciliation to
         net income:
        Income before
         income taxes       $114,356  $62,160    84%  $255,028 $201,859   26%
        Interest income       (1,822)  (3,694)  (51%)   (5,061) (11,015) (54%)
        Interest expense      21,959   10,725   105%    44,017   31,735   39%
        Depreciation          23,973   14,877    61%    54,016   43,528   24%
        Amortization          20,558    1,523  1250%    23,511    3,061  668%
        Earnings before
         interest, taxes,
         depreciation, and
         amortization       $179,024  $85,591   109%  $371,511 $269,168   38%
        Merger and
         integration costs    32,809    2,900  1031%    42,419    5,884  621%
        Cost of products
         sold -
         restructuring             -      262  (100%)      -        262 (100%)
        Restructuring costs      257      705   (64%)      903    1,606  (44%)
        Share-based
         compensation
         expense               2,928    2,719     8%     8,963    8,692    3%
        Adjusted earnings
         before interest,
         taxes,
         depreciation, and
         amortization       $215,018  $92,177   133%  $423,796 $285,612   48%
        % of net sales          18.2%    13.9%            15.8%    14.8%

The Company uses non-GAAP measures including net sales excluding
      acquisitions and foreign exchange rate impact; income, operating income,
      and income per diluted share, excluding restructuring and merger and
      integration costs; earnings before interest, taxes, depreciation, and
      amortization ("EBITDA"); and adjusted EBITDA as key measures for
      purposes of evaluating performance internally.  These non-GAAP measures
      are not intended to replace the presentation of financial results in
      accordance with U.S. GAAP.  Rather, the presentation of these non-GAAP
      measures is consistent with the way management internally evaluates its
      businesses and facilitates the comparison of past and present
      operations.

The J. M. Smucker Company
                           Unaudited Reportable Segments

Three Months Ended January 31,
                                                                       %
                                                                    Increase
                                                2009        2008   (Decrease)
                                                    (Dollars in thousands)

Net sales:
       U.S. retail market                     $549,258    $502,174       9%
       U.S. retail coffee market               442,933         -       n/a
       Special markets                         190,403     163,199      17%
    Total net sales                         $1,182,594    $665,373      78%

Segment profit:
       U.S. retail market                     $110,259     $79,379      39%
       U.S. retail coffee market                90,218         -       n/a
       Special markets                          26,982      25,206       7%
    Total segment profit                      $227,459    $104,585     117%
       Interest income                           1,822       3,694     (51%)
       Interest expense                        (21,959)    (10,725)    105%
       Amortization                            (20,558)     (1,523)   1250%
       Share-based compensation expense         (2,928)     (2,719)      8%
       Restructuring costs                        (257)       (967)    (73%)
       Merger and integration costs            (32,809)     (2,900)   1031%
       Corporate administrative expense        (33,667)    (27,929)     21%
       Other unallocated (expense) income       (2,747)        644    (527%)
    Income before income taxes                $114,356     $62,160      84%

Segment profit margin:
       U.S. retail market                         20.1%       15.8%
       U.S. retail coffee market                  20.4%        n/a
       Special markets                            14.2%       15.4%

Nine Months Ended January 31,
                                                                         %
                                                                     Increase
                                               2009          2008   (Decrease)
                                                    (Dollars in thousands)

Net sales:
       U.S. retail market                   $1,656,387    $1,455,553      14%
       U.S. retail coffee market               442,933           -       n/a
       Special markets                         590,073       479,223      23%
    Total net sales                         $2,689,393    $1,934,776      39%

Segment profit:
       U.S. retail market                     $297,080      $256,544      16%
       U.S. retail coffee market                90,218           -       n/a
       Special markets                          74,171        67,630      10%
    Total segment profit                      $461,469      $324,174      42%
       Interest income                           5,061        11,015     (54%)
       Interest expense                        (44,017)      (31,735)     39%
       Amortization                            (23,511)       (3,061)    668%
       Share-based compensation expense         (8,963)       (8,692)      3%
       Restructuring costs                        (903)       (1,868)    (52%)
       Merger and integration costs            (42,419)       (5,884)    621%
       Corporate administrative expense        (90,295)      (83,309)      8%
       Other unallocated (expense) income       (1,394)        1,219    (214%)
    Income before income taxes                $255,028      $201,859      26%

Segment profit margin:
       U.S. retail market                         17.9%         17.6%
       U.S. retail coffee market                  20.4%          n/a
       Special markets                            12.6%         14.1%