ORRVILLE, OHIO — Efforts to refine its portfolio coupled with new product development helped spur a 10% gain in net income at the J.M. Smucker Co. during fiscal 2007. In the full year ended April 30, net income totaled $157,219,000, equal to $2.76 per share on the common stock, up from $143,354,000, or $2.45 per share, in fiscal 2006.
Net income for 2007 included restructuring charges of $12.1 million, primarily related to the divestiture of the Canadian non-branded businesses. This compared with 2006, when net income included pre-tax merger and integration costs of $17.9 million and restructuring charges of $10 million.
Net sales were $2,148,017,000, down 1% from $2,154,726,000 in fiscal 2006. But excluding sales of divested businesses, sales during the year rose 5%, Smucker said.
For the fourth quarter ended April 30, net income totaled $42,499,000, or 76c per share, up 19% from $35,701,000, or 63c per share. Sales were $493,472,000, down 2% from $501,678,000 in the same period a year ago. Excluding the Canadian non-branded, grain-based food service and industrial businesses sold in September 2006 and the U.S. industrial ingredient business, sales rose 8% in the quarter, led by the Jif, Smucker’s and Pillsbury brands. The company also benefited from a temporary interruption of supply in the market for peanut butter, adding to demand for the company’s products.
"We achieved record earnings for the quarter and the year, with solid growth across most of our brands," said Richard Smucker, president and co-chief executive officer. "We had a strong finish to the year and have good momentum as we enter our new year. In addition, we recently completed the acquisition of Eagle Family Foods, the largest producer of canned milk in North America, and look forward to the addition of Eagle Brand to expand our presence in the baking aisle, providing additional joint merchandising opportunities."
Operating profit for the U.S. retail market, which includes the Jif, Crisco, Pillsbury, Hungry Jack and Martha White brands, totaled $319,795,000 in fiscal 2007, up 5% from $305,121,000 in fiscal 2006. In the fourth quarter, profit in the segment was $82,999,000, up 17%.
Full-year sales in the retail market were $1,547,064,000, up 4% from $1,484,873,000 in fiscal 2006. Sales in the consumer strategic area rose 7%, and sales in the oils and baking strategic business area were flat, as a 3% sales increase in retail oils and baking were offset by declines in sales of industrial oils.
For the fourth quarter, sales in U.S. retail totaled $365,508,000, up 8%, with net sales in the consumer strategic area up 12% and sales in the consumer oils and baking strategic business area up 2%. Sales in the consumer strategic area led by gains in peanut butter, fruit spreads, toppings and Uncrustables. In the consumer oils and baking area, sales gains in baking mixes and frostings, and the contribution of the White Lily brand acquired in October 2006 offset declines in sales of oils.
Full-year profit in special markets totaled $72,974,000, up 7% from $68,033,000 in fiscal 2006. For the fourth quarter, profit totaled $20,526,000, up 22%.
Sales in the special markets fell 10% to $600,953,000 during fiscal 2007. Excluding divested businesses, Smucker said net sales increased 9%, with all strategic business areas up. For the fourth quarter, sales were $127,964,000, down 22% from $164,045,000 in the same period a year ago. Excluding divested businesses, Smucker said sales increased 6%, led by a 21% gain in the food service strategic business area.
Looking ahead, Smucker said it remains committed to its long-term sales growth of 8%, with one-half of that total expected to come from its core business and new products, and the remainder coming from acquisitions.