2022 Q3 Form 10-Q Financial Statement

#000009141922000096 Filed on August 23, 2022

View on sec.gov

Income Statement

Concept 2022 Q3 2022 Q2 2021 Q3
Revenue $1.873B $2.034B $1.858B
YoY Change 0.81% 5.92% -5.77%
Cost Of Revenue $1.321B $1.364B $1.219B
YoY Change 8.36% 15.16% 1.86%
Gross Profit $552.5M $669.7M $639.4M
YoY Change -13.59% -8.97% -17.54%
Gross Profit Margin 29.5% 32.93% 34.41%
Selling, General & Admin $343.8M $352.6M $324.0M
YoY Change 6.11% -14.23% -9.37%
% of Gross Profit 62.23% 52.65% 50.67%
Research & Development
YoY Change
% of Gross Profit
Depreciation & Amortization $55.10M $114.1M $58.50M
YoY Change -5.81% -0.52% 8.13%
% of Gross Profit 9.97% 17.04% 9.15%
Operating Expenses $343.8M $361.8M $324.0M
YoY Change 6.11% -23.7% -9.37%
Operating Profit $179.7M $307.9M $259.4M
YoY Change -30.72% 17.74% -28.16%
Interest Expense -$39.10M -$38.00M -$43.10M
YoY Change -9.28% -10.38% -6.51%
% of Operating Profit -21.76% -12.34% -16.62%
Other Income/Expense, Net $500.0K -$3.800M -$11.10M
YoY Change -104.5% 26.67% 692.86%
Pretax Income $141.1M $260.2M $205.2M
YoY Change -31.24% 34.61% -34.57%
Income Tax $31.30M $58.10M $51.30M
% Of Pretax Income 22.18% 22.33% 25.0%
Net Earnings $109.8M $202.1M $153.9M
YoY Change -28.65% 37.48% -35.06%
Net Earnings / Revenue 5.86% 9.94% 8.28%
Basic Earnings Per Share $1.03 $1.42
Diluted Earnings Per Share $1.03 $1.884M $1.42
COMMON SHARES
Basic Shares Outstanding 106.3M shares 106.5M shares 108.0M shares
Diluted Shares Outstanding 106.8M shares 108.1M shares

Balance Sheet

Concept 2022 Q3 2022 Q2 2021 Q3
SHORT-TERM ASSETS
Cash & Short-Term Investments $151.6M $169.9M $168.8M
YoY Change -10.19% -49.18% -57.48%
Cash & Equivalents $151.6M $169.9M $168.8M
Short-Term Investments
Other Short-Term Assets $218.3M $226.2M $112.6M
YoY Change 93.87% 98.77% 17.78%
Inventory $1.313B $1.089B $1.106B
Prepaid Expenses
Receivables $605.0M $524.7M $566.0M
Other Receivables $0.00 $0.00 $0.00
Total Short-Term Assets $2.288B $2.010B $1.953B
YoY Change 17.14% 3.52% -1.61%
LONG-TERM ASSETS
Property, Plant & Equipment $2.139B $2.132B $1.988B
YoY Change 7.56% 6.51% 2.04%
Goodwill $6.017B $6.016B $6.021B
YoY Change -0.07% -0.13% -4.59%
Intangibles $5.597B $5.652B $5.985B
YoY Change -6.49% -6.44% -6.06%
Long-Term Investments
YoY Change
Other Assets $11.85B $11.91B $12.27B
YoY Change -3.42% -3.47% -5.39%
Total Long-Term Assets $13.99B $14.04B $14.26B
YoY Change -1.89% -2.07% -4.42%
TOTAL ASSETS
Total Short-Term Assets $2.288B $2.010B $1.953B
Total Long-Term Assets $13.99B $14.04B $14.26B
Total Assets $16.28B $16.06B $16.21B
YoY Change 0.4% -1.41% -4.09%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $1.243B $1.193B $1.041B
YoY Change 19.34% 15.4% 33.38%
Accrued Expenses $240.4M $325.7M $236.1M
YoY Change 1.82% -14.65% 5.4%
Deferred Revenue
YoY Change
Short-Term Debt $388.0M $180.0M $366.0M
YoY Change 6.01% 119.51% 23.65%
Long-Term Debt Due $1.400M $0.00 $751.6M
YoY Change -99.81% -100.0% 87.99%
Total Short-Term Liabilities $2.177B $1.953B $2.763B
YoY Change -21.21% -31.9% 33.29%
LONG-TERM LIABILITIES
Long-Term Debt $4.312B $4.311B $3.518B
YoY Change 22.57% 22.57% -24.72%
Other Long-Term Liabilities $248.5M $249.5M $308.0M
YoY Change -19.32% 157.75% -10.67%
Total Long-Term Liabilities $5.955B $5.962B $5.278B
YoY Change 12.83% 12.66% -18.6%
TOTAL LIABILITIES
Total Short-Term Liabilities $2.177B $1.953B $2.763B
Total Long-Term Liabilities $5.955B $5.962B $5.278B
Total Liabilities $8.132B $7.915B $8.041B
YoY Change 1.13% -3.0% -6.03%
SHAREHOLDERS EQUITY
Retained Earnings $2.893B $2.893B $2.894B
YoY Change -0.01% 1.6% 0.4%
Common Stock $5.458B $5.458B $5.531B
YoY Change -1.33% -1.26% -4.56%
Preferred Stock
YoY Change
Treasury Stock (at cost)
YoY Change
Treasury Stock Shares 39.90M shares 40.00M shares 38.10M shares
Shareholders Equity $8.144B $8.140B $8.170B
YoY Change
Total Liabilities & Shareholders Equity $16.28B $16.06B $16.21B
YoY Change 0.4% -1.41% -4.09%

Cashflow Statement

Concept 2022 Q3 2022 Q2 2021 Q3
OPERATING ACTIVITIES
Net Income $109.8M $202.1M $153.9M
YoY Change -28.65% 37.48% -35.06%
Depreciation, Depletion And Amortization $55.10M $114.1M $58.50M
YoY Change -5.81% -0.52% 8.13%
Cash From Operating Activities -$39.00M $393.7M $137.8M
YoY Change -128.3% 35.29% -66.31%
INVESTING ACTIVITIES
Capital Expenditures $88.30M -$173.0M $68.00M
YoY Change 29.85% 60.19% -11.23%
Acquisitions
YoY Change
Other Investing Activities -$15.20M -$50.60M $12.00M
YoY Change -226.67% -143.8%
Cash From Investing Activities -$71.50M -$223.6M -$80.00M
YoY Change -10.63% 107.04% 62.6%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net $7.800M $6.800M
YoY Change 14.71% 47.83%
Debt Paid & Issued, Net $0.00 $407.0M
YoY Change -100.0% 35.67%
Cash From Financing Activities $91.90M -284.1M -$223.3M
YoY Change -141.16% -19.59% -37.5%
NET CHANGE
Cash From Operating Activities -$39.00M 393.7M $137.8M
Cash From Investing Activities -$71.50M -223.6M -$80.00M
Cash From Financing Activities $91.90M -284.1M -$223.3M
Net Change In Cash -$18.30M -114.0M -$165.5M
YoY Change -88.94% -33.06% -3109.09%
FREE CASH FLOW
Cash From Operating Activities -$39.00M $393.7M $137.8M
Capital Expenditures $88.30M -$173.0M $68.00M
Free Cash Flow -$127.3M $566.7M $69.80M
YoY Change -282.38% 42.03% -79.0%

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200000 usd
CY2022Q3 us-gaap Operating Lease Liability
OperatingLeaseLiability
107500000 usd
CY2022Q3 us-gaap Finance Lease Liability
FinanceLeaseLiability
4200000 usd
CY2022Q3 us-gaap Operating Lease Weighted Average Remaining Lease Term1
OperatingLeaseWeightedAverageRemainingLeaseTerm1
P3Y6M
CY2022Q2 us-gaap Operating Lease Weighted Average Remaining Lease Term1
OperatingLeaseWeightedAverageRemainingLeaseTerm1
P3Y7M6D
CY2022Q3 us-gaap Finance Lease Weighted Average Remaining Lease Term1
FinanceLeaseWeightedAverageRemainingLeaseTerm1
P3Y6M
CY2022Q2 us-gaap Finance Lease Weighted Average Remaining Lease Term1
FinanceLeaseWeightedAverageRemainingLeaseTerm1
P3Y3M18D
CY2022Q3 us-gaap Operating Lease Weighted Average Discount Rate Percent
OperatingLeaseWeightedAverageDiscountRatePercent
0.025
CY2022Q2 us-gaap Operating Lease Weighted Average Discount Rate Percent
OperatingLeaseWeightedAverageDiscountRatePercent
0.025
CY2022Q3 us-gaap Finance Lease Weighted Average Discount Rate Percent
FinanceLeaseWeightedAverageDiscountRatePercent
0.022
CY2022Q2 us-gaap Finance Lease Weighted Average Discount Rate Percent
FinanceLeaseWeightedAverageDiscountRatePercent
0.021
CY2022Q3 us-gaap Common Stock Shares Authorized
CommonStockSharesAuthorized
300000000.0 shares
CY2022Q3 us-gaap Effective Income Tax Rate Continuing Operations
EffectiveIncomeTaxRateContinuingOperations
0.222
CY2021Q3 us-gaap Effective Income Tax Rate Continuing Operations
EffectiveIncomeTaxRateContinuingOperations
0.25
CY2021Q3 us-gaap Effective Income Tax Rate Reconciliation At Federal Statutory Income Tax Rate
EffectiveIncomeTaxRateReconciliationAtFederalStatutoryIncomeTaxRate
0.210
CY2022Q3 us-gaap Effective Income Tax Rate Reconciliation At Federal Statutory Income Tax Rate
EffectiveIncomeTaxRateReconciliationAtFederalStatutoryIncomeTaxRate
0.210
CY2022Q3 sjm Time Period Over Which It Is Reasonably Possible That Company Could Increase Or Decrease Its Unrecognized Tax Benefits
TimePeriodOverWhichItIsReasonablyPossibleThatCompanyCouldIncreaseOrDecreaseItsUnrecognizedTaxBenefits
P12M
CY2022Q3 us-gaap Significant Change In Unrecognized Tax Benefits Is Reasonably Possible Amount Of Unrecorded Benefit
SignificantChangeInUnrecognizedTaxBenefitsIsReasonablyPossibleAmountOfUnrecordedBenefit
1200000 usd
CY2022Q3 us-gaap Loss Contingency Disclosures
LossContingencyDisclosures
<div style="margin-top:12pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">We, like other food manufacturers, are from time to time subject to various administrative, regulatory, and other legal proceedings arising in the ordinary course of business. We are currently a defendant in a variety of such legal proceedings, including certain lawsuits related to the alleged price-fixing of shelf stable tuna products prior to 2011 by a business previously owned by, but divested prior to our acquisition of, Big Heart Pet Brands, the significant majority of which were settled and paid during 2019 and 2020. While we cannot predict with certainty the ultimate results of these proceedings or potential settlements associated with these or other matters, we have accrued losses for certain contingent liabilities that we have determined are probable and reasonably estimable at July 31, 2022. Based on the information known to date, with the exception of the matters discussed below, we do not believe the final outcome of these proceedings would have a material adverse effect on our financial position, results of operations, or cash flows.</span></div><div style="margin-top:12pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">In addition to the legal proceedings discussed above, we are currently a defendant in Council for Education and Research on Toxics (“CERT”) v. Brad Barry LLC, et al., which alleges that we, in addition to nearly eighty other defendants (collectively the “Defendants”) who manufacture, package, distribute, or sell packaged coffee, failed to provide warnings for our coffee products of exposure to the chemical acrylamide as required under California Health and Safety Code Section 25249.5, the California Safe Drinking Water and Toxic Enforcement Act of 1986 (better known as “Proposition 65”). CERT sought equitable relief, including warnings to consumers, as well as civil penalties in the amount of the statutory maximum of $2,500 per day per violation of Proposition 65. In addition, CERT asserted that every consumed cup of coffee, absent a compliant warning, was equivalent to a violation under Proposition 65. In June 2019, the state agency responsible for administering the Proposition 65 program, the California Office of Environmental Health Hazard Assessment (“OEHHA”), approved a regulation clarifying that cancer warnings are not required for coffee under Proposition 65, and in August 2020, the trial court granted the Defendants’ motion for summary judgment based on the regulation. CERT appealed the ruling in November 2020 to the California Court of Appeals for the Second Appellate District, which is currently pending.</span></div><div style="margin-top:12pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">We are also defendants in a series of putative class action lawsuits that were originally filed in federal courts in California, Florida, Illinois, Missouri, New York, Texas, Washington, and Washington D.C., but have been transferred to the United States District Court for the Western District of Missouri for coordinated pre-trial proceedings. The plaintiffs assert claims arising under various state laws for false advertising, consumer protection, deceptive and unfair trade practices, and similar statutes. Their claims are premised on allegations that we have misrepresented the number of servings that can be made from various canisters of </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">Folgers</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%"> coffee on the packaging for those products. </span></div><div style="margin-top:12pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">We are a defendant in five putative class action lawsuits as a result of our voluntary recall of select </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">Jif</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%"> peanut butter products. The plaintiffs assert causes of action for negligence, breach of warranties, fraudulent concealment, unjust enrichment, and, in some of the lawsuits, violations of state consumer protection and deceptive trade practices laws. Their claims are premised on allegations that we engaged in business practices designed to mislead the public regarding the safety of </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">Jif</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%"> peanut butter for human consumption due to the alleged presence of salmonella. </span></div><div style="margin-top:12pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">The outcome and the financial impact of these cases, if any, cannot be predicted at this time. Accordingly, no loss contingency has been recorded for these matters as of July 31, 2022, and the likelihood of loss is not considered probable or estimable. </span></div>However, if we are required to pay significant damages, our business and financial results could be adversely impacted, and sales of those products could suffer not only in these locations but elsewhere.<span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:700;line-height:120%">Product Recall: </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">In May 2022, we initiated a voluntary recall of select </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">Jif</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%"> peanut butter products produced at our Lexington, Kentucky, facility and sold primarily in the U.S., due to potential salmonella contamination. At that time, we also suspended the manufacturing of these products at our Lexington facility and temporarily paused shipments from our Memphis, Tennessee, facility. No other products produced at our other facilities were affected by this recall. In June 2022, we resumed manufacturing and shipping at our Lexington facility, as well as shipping from our Memphis facility. We continue to partner with retailers to restock </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">Jif</span> peanut butter products as quickly as possible and anticipate a return to normal levels by the end of 2023. In addition to the impact of manufacturing downtime, we expect to incur total direct costs of approximately $90.0 by the end of 2023, net of the remaining anticipated insurance recoveries, related to customer returns, fees, unsaleable inventory, and other product recall-related costs, primarily within our U.S. Retail Consumer Foods segment. Approximately $65.0 of direct costs were recognized, net of the remaining anticipated insurance recoveries, during the three months ended July 31, 2022. We expect the majority of the remaining costs will be incurred through the third quarter of 2023.
CY2022Q2 us-gaap Common Stock Shares Authorized
CommonStockSharesAuthorized
300000000.0 shares
CY2022Q3 us-gaap Common Stock Shares Outstanding
CommonStockSharesOutstanding
106600000 shares
CY2022Q2 us-gaap Common Stock Shares Outstanding
CommonStockSharesOutstanding
106500000 shares
CY2022Q3 us-gaap Treasury Stock Shares
TreasuryStockShares
39900000 shares
CY2022Q2 us-gaap Treasury Stock Shares
TreasuryStockShares
40000000.0 shares

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