J.M. Smucker Company - 10-K annual report

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UNITED STATES
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, 2001

(  ) 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

One Strawberry Lane
Orrville, Ohio 44667-0280
Principal executive offices

Telephone number: (330) 682-3000

Securities registered pursuant to Section 12(b) of the Act:

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 17, 2001, 24,419,354 Common Shares of The J. M. Smucker Company were issued and outstanding. The aggregate market value of the Common Shares held by nonaffiliates of the Registrant at July 17, 2001, was $510,687,264.

      Certain sections of the Registrant’s definitive Proxy Statement, dated July 10, 2001, for the August 14, 2001 Annual Meeting of Shareholders, and of the 2001 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 established in 1897 and was incorporated in Ohio in 1921. The Company, often 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 continuing operations of The J. M. Smucker Company and its subsidiaries.

      Principal Products. The principal products of the Company are fruit spreads, dessert toppings, peanut butter, frozen peanut butter and jelly sandwiches, industrial fruit products, fruit and vegetable juices, beverages, syrups, condiments, and gift packages.

      In its domestic segment, the Company’s products are primarily sold through brokers to chain, wholesale, cooperative, independent grocery accounts and other consumer markets, to foodservice distributors and chains including hotels, restaurants, schools and other institutions, and to other food manufacturers.

      The Company’s distribution outside the United States is principally in Canada, Australia, Brazil, Mexico, the Pacific Rim, and Greater Europe, although products are exported to other countries as well. International sales represent approximately 14% of total consolidated Company sales for fiscal 2001.

      Sources and Availability of Raw Materials. The fruit raw materials used by the Company in the production of its food products are purchased from independent growers and suppliers. 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.

      Trademarks. The Company’s products are marketed under numerous trademarks owned by the Company. Major trademarks include: Smucker’s, Dickinson’s, Lost Acres, Mary Ellen, Adams, Laura Scudder’s, Goober, Simply Fruit, Magic Shell, Sundae Syrup, Smucker’s Snackers, Uncrustables, IXL, Double Fruit, Good Morning, The R. W. Knudsen Family, After The Fall, Simply Nutritious, Recharge, Santa Cruz Organic, and Spritzer. In addition, the Company licenses the use of several other trademarks, none of which individually is material to the Company’s business.

      Other slogans or designs considered to be important Company trademarks include (without limitation) the slogan, “With a name like Smucker’s, it has to be good”, “Over 100 Years of Family-Made Goodness”, the Smucker’s banner, the Crock Jar shape, the Gingham design, and the strawberry logo.

      Seasonality. Historically, the Company’s business has not been highly seasonal.

      Working Capital. Working capital requirements are greatest during the late spring and summer months due to seasonal procurement of fruits, berries, and peanuts.

      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.

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      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. No material portion of the Company’s business is 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 spreads, dessert topping, health and natural foods, beverages, natural peanut butter, and peanut butter combination categories. 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 continued growth of alternative store formats (i.e., warehouse club and mass merchandise stores), consolidation of retailers, manufacturers, and brokers within the food industry, and changes in business practices, resulting from both technological advances and new industry techniques, have all 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 resources to both develop new products and improve existing products in each of its business areas. In relation to consolidated assets and operating expenses, amounts expensed for research and development in each of the areas and in the aggregate 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, 2001, the Company had approximately 2,250 full-time employees, worldwide.

      Segment and Geographic Information. Information concerning international operations for the years 2001, 2000, and 1999 is hereby incorporated by reference from the 2001 Annual Report to Shareholders, on pages 22 and 23 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. The properties listed below are owned, except for the West Fargo, North Dakota location, which is leased. The corporate headquarters are located in Orrville, Ohio.

Item 3. Legal Proceedings

      The Company is not a party to any pending legal proceeding that would be considered material.

Item 4. Submissions of Matters to a Vote of Security Holders

      Not applicable.

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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 Shares and other related shareholder information is hereby incorporated by reference from the Company’s 2001 Annual Report to Shareholders under the caption “Stock Price Data” on page 9.

Item 6. Selected Financial Data

      Five-year summaries of selected financial data for the Company and discussions of items which materially affect the comparability of the selected financial data are hereby incorporated by reference from the Company’s 2001 Annual Report to Shareholders under the following captions and page numbers: “Five-Year Summary of Selected Financial Data” on page 8, Note A: “Accounting Policies” on pages 20 and 21 and Note C: “Nonrecurring Charge” on page 23.

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 2001 Annual Report to Shareholders, on pages 10 through 13.

Item 7a. Quantitative and Qualitative Disclosures About Market Risk

      Quantitative and qualitative disclosures about market risk are hereby incorporated by reference from the Company’s 2001 Annual Report to Shareholders on pages 12 and 13.

Item 8. Financial Statements and Supplementary Data

      Consolidated financial statements of the Company at April 30, 2001 and 2000, and for each of the three years in the period ended April 30, 2001, with the report of independent auditors and selected unaudited quarterly financial data, are hereby incorporated by reference from the Company’s 2001 Annual Report to Shareholders on page 9 and pages 14 through 31.

Item 9. Disagreements on Accounting and Financial Disclosure

      None.

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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 10, 2001, for the 2001 Annual Meeting of Shareholders on August 14, 2001, on pages 3 through 6, under the caption “Election of Directors”.

      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 10, 2001, for the 2001 Annual Meeting of Shareholders on August 14, 2001, under the caption “Section 16(a) Beneficial Ownership Reporting Compliance” on page 16.

Executive Officers of the Company

      The names, ages as of July 1, 2001, 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. All of the officers have held various positions with the Company for more than five years.

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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 10, 2001, for the 2001 Annual Meeting of Shareholders on August 14, 2001, on page 5 under the caption “Director Compensation”, and on pages 7 through 12 under “Report of the Executive Compensation Committee of the Board of Directors”.

Item 12. Security Ownership of Certain Beneficial Owners and Management

      Information regarding security ownership of certain beneficial owners, 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 10, 2001, for the 2001 Annual Meeting of Shareholders on August 14, 2001, on pages 14 through 16, 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 10, 2001, for the 2001 Annual Meeting of Shareholders on August 14, 2001, beginning with “Election of Directors” on page 3 and continuing through “Director Compensation” on page 5.

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PART IV

Item 14. Exhibits, Financial Statement Schedule and Reports on Form 8-K

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All other required exhibits are either inapplicable to the Company or require no answer.

(b)  Reports on Form 8-K filed in the Fourth Quarter of 2001.

(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.

      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.

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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 SCHEDULE

CERTAIN EXHIBITS

FINANCIAL STATEMENT SCHEDULE

      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.

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THE J. M. SMUCKER COMPANY

SCHEDULE II — VALUATION AND QUALIFYING ACCOUNTS

YEARS ENDED APRIL 30, 2001, 2000, AND 1999

(Dollars in Thousands)

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