Business Context and Reporting Period
Company: The J. M. Smucker Company (Smucker's)
Filing Type: Form 10-K (Annual Report)
Fiscal Year Ended: April 30, 1995
Industry: Manufacturing and marketing of food products worldwide.
Operations: The Company operates in seven strategic business areas: Consumer, Mrs. Smith's, Beverage, International, Foodservice, Industrial, and Specialty Foods. Principal products include fruit spreads, frozen pies, dessert toppings, syrups, peanut butter, and fruit/vegetable juices. International sales represent approximately 11% of total sales.
Employees: Approximately 2,600 full-time employees worldwide as of April 30, 1995.
Key Financial Metrics
Note: Specific consolidated revenue, net income, cash flow, and debt figures are not provided in the text of this filing. These data points are incorporated by reference from the 1995 Annual Report to Shareholders (pages 8, 13, 16, and 12-26).
Valuation and Qualifying Accounts (in thousands):
| Classification | Balance at Beginning of Year | Charged to Costs/Expenses | Deductions | Balance at End of Year |
|---|---|---|---|---|
| Valuation allowance for deferred tax assets (1995) | $2,265 | $395 | $0 | $2,660 |
| Allowance for doubtful accounts (1995) | $419 | $195 | $139 | $475 |
| Total (1995) | $2,684 | $590 | $139 | $3,135 |
Stock Information (as of July 3, 1995):
- Class A Common Shares Outstanding: 14,384,839
- Class B Common Shares Outstanding: 14,778,839
- Aggregate Market Value of Voting Common Shares (Class A) held by non-affiliates: $243,969,381
Material Changes and Operational Context
Seasonality: The business is not highly seasonal overall, but the second and third quarters are significantly impacted by demand for frozen pies during Fall and holiday seasons (Mrs. Smith's results). Working capital requirements peak in late spring and summer due to seasonal procurement of raw materials.
Raw Materials: The Company relies on independent growers for fruit, sweeteners, and peanuts, though it grows some strawberries. Due to crop volatility, the Company maintains significant cold storage inventories.
Competition: Smucker's is the U.S. market leader in fruit spreads, frozen pies, ice cream toppings, and natural peanut butter. Competition is driven by product quality, price, advertising, and promotion, with increasing pressure from warehouse clubs and mass merchandise stores.
Legal Proceedings: No material pending legal proceedings were reported.
Guidance, Outlook, and Risks
Management Commentary: Detailed Management's Discussion and Analysis (MD&A) regarding results of operations, liquidity, and capital resources is incorporated by reference from the 1995 Annual Report to Shareholders (pages 10-12). No specific forward-looking guidance or numerical outlook is contained in the text of this filing.
Risks and Contingencies:
- Raw Material Volatility: Dependence on seasonal crops requires significant inventory management and cold storage.
- Competition: Intense competition for retail shelf space and the rise of alternative store formats.
- Environmental: Compliance with environmental regulations is not expected to have a material effect on capital expenditures or earnings.
- Customer Concentration: No single customer accounts for more than 10% of consolidated sales.
Investor Verification Checklist
- Financial Statements: Verify consolidated revenue, net income, and cash flow figures in the 1995 Annual Report to Shareholders (pages 13-16), as they are not explicitly listed in this 10-K text.
- Debt and Liquidity: Review the "Liquidity and Capital Resources" section in the Annual Report (pages 10-12) for details on short-term borrowing used for working capital and the status of the revolving credit agreement.
- Segment Performance: Consult the 1995 Annual Report (page 19) for specific operating segment data, as this 10-K incorporates that information by reference.
- Stock Ownership: Confirm current share counts and market value against the July 3, 1995 data provided ($243.9M market value for non-affiliate Class A shares).
- Deferred Tax Assets: Note the increase in the valuation allowance for deferred tax assets to $2.66 million in 1995, indicating potential future tax asset utilization constraints.