The J. M. Smucker Management Discusses Q1 2013 Results - Earnings Call Transcript

Lastly, our cash from operations was a first quarter record with an increase of $167 million. Our ongoing ability to generate strong cash flow provides continuing opportunities to enhance shareholder value. To that end, last month, the board authorized an 8% increase in the quarterly dividend rate payable in September.

Our first quarter results reflect the progress that continues to be made on the key areas of focus that we discussed at our year-end call. As we have stated, these were designed to address both short-term challenges as well as further position the company for long-term growth and include the following: further building our brands through increased investments in marketing support; continuing to drive our innovation pipeline; optimizing price points to meet our consumer needs and address competition; capitalizing on our recent acquisitions; and continuing to optimize our supply chain. We are pleased with what we've accomplished in these areas and Vince will expand on these as he discusses the segments in a moment. We will remain focused on these priorities as we move ahead.

From an industry perspective, consumers clearly continue to feel pressed by the economy and we don't expect overnight reversals in consumer confidence. However, we are beginning to see some positive indicators in industry volume trends. While total U.S. retail food and beverage volume has been soft for an extended period, the industry has seen gradual improvements from the 52-week to the 12-week to the 4-week reporting periods with volume up slightly in the latest 4-week period. Moderating food inflation, as a result of declining commodity costs, has clearly been a factor in this improvement in the food and beverage volume. That being said, the impact of the current U.S. drought will not be fully understood and realized by the industry for a number of months. We will be monitoring this area and adjusting as appropriate. Overall, while we remain cautious, we are more optimistic about the near term than we were a few months ago.

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