-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, M8/KhJvoRKKUzlYpdWFuso1zdBSisBZ7y0ZrtSH8SUNuFTiUk7b1axunqYnh69y6 1bK2bPUOasUHIub4DwMFjw== 0000891092-04-005798.txt : 20041202 0000891092-04-005798.hdr.sgml : 20041202 20041202150021 ACCESSION NUMBER: 0000891092-04-005798 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20041129 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Cost Associated with Exit or Disposal Activities ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20041202 DATE AS OF CHANGE: 20041202 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SMUCKER J M CO CENTRAL INDEX KEY: 0000091419 STANDARD INDUSTRIAL CLASSIFICATION: CANNED, FRUITS, VEG & PRESERVES, JAMS & JELLIES [2033] IRS NUMBER: 340538550 STATE OF INCORPORATION: OH FISCAL YEAR END: 0430 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-05111 FILM NUMBER: 041180324 BUSINESS ADDRESS: STREET 1: STRAWBERRY LN CITY: ORRVILLE STATE: OH ZIP: 44667 BUSINESS PHONE: 3306823000 MAIL ADDRESS: STREET 1: STRAWBERRY LANE, P.O. BOX 280 CITY: ORRVILLE STATE: OH ZIP: 44667 8-K 1 e19869_8k.txt FORM 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 ---------- FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of report (Date of earliest event reported): November 29, 2004 The J. M. Smucker Company -------------------------------------------------- (Exact Name of Registrant as Specified in Charter) Ohio 1-5111 34-0538550 - ---------------------------- ------------ ------------------- (State or Other Jurisdiction (Commission (IRS Employer of Incorporation) File Number) Identification No.) One Strawberry Lane Orrville, Ohio 44667-0280 - ---------------------------------------- ------------------- (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code: (330) 682-3000 Not Applicable ------------------------------------------------------------- (Former Name or Former Address, if Changed Since Last Report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: |_| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |_| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |_| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Item 1.01 Entry into a Material Definitive Agreement On November 29, 2004, The J. M. Smucker Company entered into an asset purchase agreement with Baldwin Richardson Foods Co. for the purchase of assets comprising the bakery ingredients business of the Company's industrial operations, currently manufactured at the Company's Orrville, Ohio, facility. The sale is expected to close by December 31, 2004. The Company will continue to produce industrial bakery ingredients for Baldwin Richardson pursuant to a contract packing agreement through September 2005. The Company has also entered into a letter of intent with Sabroso Company for the sale of the dairy ingredient portion of the Company's industrial business. The Company anticipates a definitive purchase agreement will be executed prior to December 31, 2004 and that the transaction will close by the end of January 2005. As part of the agreement, the Company will lease space in its Oxnard, California, facility to Sabroso. The industrial business will continue to be reported as part of the Company's continuing operations. Industrial sales planned for fiscal 2005 were approximately $60 million. The sale of the combined industrial businesses is expected to generate proceeds of approximately $20 million, in a combination of $14 million in cash and $6 million in a promissory note, and will result in a net gain of approximately $4 million. The purchase agreement with Baldwin Richardson also provides for an additional contingent payment of up to $2 million based on performance over the two years following the closing of the transaction. The net impact on fiscal 2005 results is not anticipated to be material as the loss of operating income that the businesses generated is expected to be offset by the gain on the sale of the businesses. A copy of the press release is attached to this Current Report on Form 8-K as Exhibit 99.1 and is incorporated herein by reference. Item 2.05 Costs Associated with Exit or Disposal Activities The information set forth under the caption "Item 1.01 Entry into a Material Definitive Agreement" is incorporated herein by reference. The Company also announced that as part of its supply chain optimization project (SCOP), it intends to close its Salinas, California, manufacturing operations by the end of calendar 2005 and restructure its distribution network. Upon full implementation of these plans, the Company would expect a net reduction of approximately 200 employees. The revision to the distribution network will include a transition to full service mixing centers located in the eastern, southern, and western regions of the country. These centers will distribute all of the Company's major domestic brands, including those acquired as part of the Multifoods acquisition. The Company will continue to operate its distribution center located at its Salinas location until the manufacturing operation is closed down next year. The Company expects to record restructuring charges of approximately $15 million related to these SCOP initiatives, of which approximately $6 million will be recorded in fiscal 2005 with the balance in fiscal 2006. Included in the restructuring charges are approximately $13 million of cash outlays which relate primarily to severance costs and equipment relocation expenses. Item 9.01 Financial Statements and Exhibits (c) Exhibits Exhibit Exhibit Number Description ------ ----------- 99.1 Press Release, dated November 29, 2004 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. THE J. M. SMUCKER COMPANY By: /s/ Richard K. Smucker -------------------------------------- Richard K. Smucker President, Co-Chief Executive Officer, and Chief Financial Officer Date: December 2, 2004 EXHIBIT INDEX Exhibit Exhibit Number Description ------ ----------- 99.1 Press Release, dated November 29, 2004 EX-99.1 2 e19869ex99-1.txt PRESS RELEASE Exhibit 99.1 The J. M. Smucker Company Announces Strategic Actions Selling U.S. Industrial Business Closing of Salinas, California, Facility by End of Calendar 2005 Restructuring of U.S. Distribution Operations ORRVILLE, Ohio, Nov. 29 /PRNewswire-FirstCall/ -- The J. M. Smucker Company (NYSE: SJM) today announced several actions to refine its portfolio and improve its cost base as well as service levels in support of its long- term strategy. The Company's strategy is to own and market leading North American icon brands sold in the center of the store. In support of this strategy, through its Supply Chain Optimization Project (SCOP), the Company continues to optimize its production capacity, improve productivity and operating efficiencies as well as lower its overall cost base and improve its services. As a result, the Company has announced its intent to sell its U.S. industrial business, discontinue operations at its Salinas, California, facility and restructure its U.S. distribution operations. Refine Strategic Focus: Sale of Industrial Business Over the past two years, the Company has continuously acted to improve the margins of its industrial business by exiting low margin contracts in excess of $50 million. Though margins have improved, the Company has decided to sell its U.S. industrial business in support of its branded strategy. The Company has entered into an agreement to sell its industrial bakery ingredients business, located in Orrville, Ohio, to Baldwin Richardson Foods Co., a privately owned food company located in Chicago, Illinois. The sale is expected to close by the end of calendar year 2004. The Company will continue production of industrial bakery ingredients for Baldwin Richardson through September 2005. The Company has also entered into a separate letter of intent to sell its dairy ingredients business, manufactured in both Oxnard, California, as well as Orrville, Ohio, to Sabroso Company, a privately owned producer and distributor of fruit products headquartered in Medford, Oregon. The sale is expected to close by the end of the Company's fiscal 2005 third quarter. Smucker will continue to operate the Oxnard plant as a fruit processing facility. The industrial businesses will continue to be reported in continuing operations through their divestiture period. The net impact on fiscal 2005 earnings is not anticipated to be material. Industrial sales planned for 2005 are approximately $60 million. Further SCOP Initiatives: Closing of Salinas, California, Facility and Restructuring of Distribution Operations The Company's SCOP initiative is an ongoing project that supports its branded product strategy with the goal of providing the lowest delivered costs to its customers. In support of this program, the Company has announced plans to discontinue operations and close its Salinas, California, facility and redistribute the production to the Orrville, Ohio, and Memphis, Tennessee, facilities. The Company expects to close the plant by the end of calendar year 2005. In addition, as part of an ongoing focus on efficiency, the Company will revise its distribution network to better meet the needs of its consumers and customers. Reflecting on today's announcement, Tim Smucker, chairman and co-chief executive officer, commented, "In following our Basic Beliefs, we are committed to being fair in assisting each employee affected by these decisions. We will strive to make an orderly transition over the next 12 months, as we continue to implement our strategy. While these are difficult decisions, we believe they are important in positioning the Company for future growth." As a result of the announced actions, the Company expects to record additional restructuring charges of approximately $15 million, of which an estimated $6 million will be recorded in the current fiscal year and the remainder in fiscal 2006. Included in the restructuring charges are cash outlays of approximately $13 million that relate primarily to severance- related costs and equipment relocation expenses. The Company estimates that the annual pretax benefit from the restructuring will be approximately $4 million to $6 million upon full implementation. At least one-third of that amount is expected to be realized in fiscal 2006 and the full amount should begin to be realized in fiscal 2007. These benefits represent a combination of a reduction in overhead related to the closed facilities and a reduction in overall delivered costs. About The J. M. Smucker Company The J. M. Smucker Company ( www.smuckers.com ) was founded in 1897 when the Company's namesake and founder sold his first product -- apple butter -- from the back of a horse-drawn wagon. Today, over a century later, the Company is the market leader in fruit spreads, peanut butter, shortening and oils, ice cream toppings, and health and natural foods beverages in North America under such icon brands as Smucker's(R), Jif(R), and Crisco(R). In June 2004, the Company expanded its family of products to include such brands as Pillsbury(R) baking mixes and ready-to-spread frostings; Hungry Jack(R) pancake mixes, syrups and potato side dishes, and Martha White(R) baking mixes and ingredients in the U.S., along with Robin Hood(R) flour and baking mixes, and Bick's(R) pickles and condiments in Canada. For over 107 years, The J. M. Smucker Company has been headquartered in Orrville, Ohio, and has been family run for four generations. The J. M. Smucker Company was recognized as the top company in FORTUNE Magazine's 2003 annual survey of The 100 Best Companies to Work For and has ranked consistently in the top 25 companies each year since FORTUNE began the list in 1998. The J. M. Smucker Company has over 4,500 employees worldwide and distributes products in more than 45 countries. The J. M. Smucker Company Forward-Looking Language This press release contains forward-looking statements, including statements regarding estimates of future earnings and cash flows that are subject to risks and uncertainties that could cause actual results to differ materially. Uncertainties that could affect actual results include, but are not limited to, the timing of the close of the proposed sale of the industrial businesses, the timing and costs associated with both the closing of the Salinas, California, facility as well as the restructuring of the distribution network, the realization of expected savings, and other factors affecting share prices and capital markets generally. Other risks and uncertainties that may materially affect the Company are detailed from time to time in the respective reports filed by the Company with the Securities and Exchange Commission, including Forms 10-Q, 10-K, and 8-K. SOURCE J. M. Smucker Company -0- 11/29/2004 /CONTACT: Investors, Mark R. Belgya, Vice President and Treasurer, or Media, Maribeth Badertscher, Manager, Corporate Communications, both of The J. M. Smucker Company, +1-330-682-3000/ /Web site: http://www.smuckers.com / (SJM) CO: J. M. Smucker Company; Baldwin Richardson Foods Co.; Sabroso Company ST: Ohio IN: FOD REA SU: TNM -----END PRIVACY-ENHANCED MESSAGE-----