Sequential Page
No. 1 of 22 Pages

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

FORM 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTIONS 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

or

[   ]  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

Registrant’s telephone number, including area code (330) 682-3000

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

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the registrant (1) 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 (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for at least the past 90 days. [X]  Yes  [   ]  No

Indicate by check mark whether the registrant is an accelerated filer as defined in Rule 12b-2 of the Securities Exchange Act of 1934. [X] Yes [   ]  No

The Company had 50,102,603 common shares outstanding on February 29, 2004.

The Exhibit Index is located at Sequential Page No. 21.

Table of Contents

Sequential Page
No. 2

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

THE J. M. SMUCKER COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)

See notes to unaudited condensed consolidated financial statements.

Sequential Page
No. 3

THE J. M. SMUCKER COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)

See notes to unaudited condensed consolidated financial statements.

Sequential Page
No. 4

THE J. M. SMUCKER COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

(   ) Denotes use of cash

See notes to unaudited condensed consolidated financial statements.

Sequential Page
No. 5

THE J. M. SMUCKER COMPANY
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note A – Basis of Presentation

     The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Operating results for the three-month and nine-month periods ended January 31, 2004, are not necessarily indicative of the results that may be expected for the year ending April 30, 2004. For further information, reference is made to the consolidated financial statements and footnotes included in the Company’s Annual Report on Form 10-K for the year ended April 30, 2003.

Note B – Subsequent Event

     On March 8, 2004, the Company announced an agreement to acquire Minneapolis-based International Multifoods Corporation (Multifoods) in a transaction valued at approximately $840,000,000. Under the terms of the agreement, Multifoods’ shareholders will receive $25 per share in a combination of 80 percent stock and 20 percent cash, subject to certain conditions. In addition, the Company will assume $340,000,000 in debt. The number of shares to be issued will be based on the average of the Company’s stock price for the 20-trading day period ending on the trading day immediately preceding the close. The Company intends to finance the cash portion of the purchase price and associated transaction costs through a combination of existing cash balances and outside financing. The transaction is subject to, among other things, approval by Smucker and Multifoods’ shareholders and customary regulatory approvals and will be tax free to the extent of the stock portion of the purchase price. The transaction is expected to close by the end of June 2004. Sales of the combined companies are expected to be over $2,300,000,000 on a full-year pro forma basis.

     Multifoods had consolidated fiscal 2003 sales of nearly $940,000,000, with sales in Canada of nearly $300,000,000. Multifoods’ primary U.S. brands include: Pillsbury baking mixes and ready-to-spread frostings; Hungry Jack pancake mixes, syrup and potato side dishes; Martha White baking mixes and ingredients; and Pet evaporated milk and dry creamer. In Canada, Multifoods has market leadership positions with Robin Hood flour and baking mixes and Bick’s pickles and condiments, and participates in the growing ethnic food category with the Golden Temple brand. The Pillsbury Barrelhead and Doughboy are registered trademarks of The Pillsbury Company, used under a 20 year, perpetually renewable, royalty-free license by Multifoods, and this agreement will continue post acquisition. Upon completion of the acquisition, the total retail sales of the categories in which the Company participates will increase from $3,000,000,000 to over $6,500,000,000.

Note C – Stock-Based Compensation

     As provided under Statement of Financial Accounting Standards No. 123, Accounting for Stock-Based Compensation (SFAS 123), the Company has elected to follow Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees (APB 25), and related interpretations in accounting for its employee stock options. Under APB 25, because the exercise price of the Company’s employee stock options equals the market price of the underlying stock on the date of grant, no compensation expense is recognized.

Sequential Page
No. 6

     If compensation costs for the stock options granted had been determined based on the fair market value method of SFAS 123, the Company’s pro forma net income and earnings per share would have been as follows:

Note D – Restructuring

     During fiscal 2003, the Company announced plans to restructure certain operations as part of its ongoing efforts to optimize its production capacity, improve productivity and operating efficiencies, and lower the Company’s overall cost base. These initiatives include reducing the Company’s involvement in fruit processing, centralizing production and distribution of the Uncrustables product line, and significantly reducing the number of items available for sale. The program calls for the closing of three of the Company’s plants – Watsonville, California; Woodburn, Oregon; and West Fargo, North Dakota. In addition, the Company is consolidating operations of its two plants in Ripon, Wisconsin, into one operation. The closings will result in the elimination of approximately 335 full-time positions.

     The Company expects to record a total restructuring charge of approximately $18,000,000, of which $2,537,000 was recorded in the fourth quarter of fiscal 2003, and $8,819,000 was recorded in the first nine months of fiscal 2004. The Company expects to record additional restructuring charges of approximately $3,200,000 and make cash payments of approximately $2,000,000 during the last three months of fiscal 2004. The balance of the charge will be incurred in first half of fiscal 2005. The remaining cash payments, estimated to be approximately $7,000,000, will be paid through the third quarter of fiscal 2005.

Sequential Page
No. 7

     The following table summarizes the activity with respect to the restructuring and related asset impairment charges recorded and reserves established during fiscal 2003 and 2004 and the total amount expected to be incurred in connection with the initiative:

     Approximately $425,000 and $3,619,000 of the total restructuring charge of $2,499,000 and $8,819,000 recorded in the three-month and nine-month periods ended January 31, 2004, respectively, was reported in costs of products sold in the accompanying Condensed Consolidated Statements of Income, while the remaining charges were reported in other restructuring costs. The restructuring costs included in costs of products sold include long-lived asset charges and inventory disposition costs. In accordance with Statement of Financial Accounting Standards No. 146, Accounting for Costs Associated with Exit or Disposal Activities, employee separation costs are being recognized over the estimated future service period of the related employees. The obligation related to employee separation costs is included in other current liabilities in the Condensed Consolidated Balance Sheets.

     Long-lived asset charges include accelerated depreciation related to machinery and equipment that will be used at the affected production facilities until they close. During the third quarter, approximately $5,923,000 of assets associated with the Watsonville, California, and the Woodburn, Oregon, facilities were considered held for sale and were reclassified from property, plant, and equipment to assets held for sale. These assets held for sale are included in the Condensed Consolidated Balance Sheets with other current assets.

     Other costs include employee relocation, legal and consulting fees, and closed facility costs which are expensed as incurred.

Note E – Common Shares

     At January 31, 2004, 150,000,000 common shares were authorized. There were 50,097,879 and 49,767,540 shares outstanding at January 31, 2004, and April 30, 2003, respectively. Shares outstanding are shown net of 6,570,054 and 6,900,393 treasury shares at January 31, 2004, and April 30, 2003, respectively.

Sequential Page
No. 8

Note F – Operating Segments

     The Company operates in one industry: the manufacturing and marketing of food products. The Company has two reportable segments: U.S. retail market and special markets. The U.S. retail market segment includes the consumer and the consumer oils business areas. This segment represents the primary strategic focus area for the Company – the sale of branded food products with leadership positions to consumers through mainstream domestic retail outlets. The special markets segment represents the aggregation of the foodservice, international, industrial, and beverage business areas. Special markets segment products are distributed through/to foreign countries, foodservice distributors and operators (i.e., restaurants, schools and universities, health care operations), other food manufacturers, and health and natural food stores.

     The following table sets forth reportable segment information:

Sequential Page
No. 9

Note G – Earnings Per Share

     The following table sets forth the computation of earnings per common share and earnings per common share – assuming dilution:

Note H – Investments in Debt Securities

     The Company invests primarily in debt securities. Under the Company’s investment policy, it will invest in securities deemed to be investment grade. Currently, these investments consist of government backed mortgage obligations, corporate bonds, municipal bonds, and commercial paper. The Company determines the appropriate categorization of its debt securities at the time of purchase and reevaluates such designation at each balance sheet date. The Company has categorized all debt securities as available-for-sale, because it currently has the ability and intent to convert these investments into cash if and when needed. Classification of these available-for-sale marketable securities as current or noncurrent is based on whether the conversion to cash is expected to be necessary for current operations, which is currently consistent with the securities maturity date.

     Securities categorized as available-for-sale are stated at fair value, with unrealized gains and losses reported as a component of other comprehensive income/loss. At January 31, 2004, the aggregate fair value of available-for-sale securities was $64,975,000. Net unrealized holding gains of $160,000 were included as a component of accumulated other comprehensive loss.

     The following is a summary of available-for-sale securities:

Sequential Page
No. 10

The contractual maturities of these available-for-sale securities as of January 31, 2004, were as follows:

Note I – Financing Arrangements

     The Company has uncommitted lines of credit providing up to $105,000,000 for short-term borrowings. No amounts were outstanding at January 31, 2004.

Note J – Comprehensive Income

     During the three-month periods ended January 31, 2004 and 2003, total comprehensive income was $35,019,000 and $29,226,000, respectively. Total comprehensive income for the nine-month periods ended January 31, 2004 and 2003, was $101,300,000 and $75,160,000, respectively. Comprehensive income consists of net income, foreign currency translation adjustments, minimum pension liability adjustments, unrealized gains and losses on available-for-sale securities, and unrealized gains and losses on commodity hedging activity, net of income taxes.

Note K – Recently Issued Accounting Standards

     In April 2003, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 149, Amendment of Statement 133 on Derivative Instruments and Hedging Activities (SFAS 149). SFAS 149 amends and clarifies accounting for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities under Statement 133. SFAS 149 is effective for contracts entered into or modified after June 30, 2003, and for hedging relationships designated after June 30, 2003. The guidance should be applied prospectively. The adoption of SFAS 149 did not have a material impact on the Company’s results of operations or financial position.

     In May 2003, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 150, Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity (SFAS 150). SFAS 150 requires that certain financial instruments, which under previous guidance could be accounted for as equity, be classified as liabilities in statements of financial position. SFAS 150 is effective for financial instruments entered into or modified after May 31, 2003. The adoption of SFAS 150 did not have a material impact on the Company’s results of operations or financial position.

     In January 2003, the Financial Accounting Standards Board issued Interpretation No. 46, Consolidation of Variable Interest Entities (FIN 46). FIN 46 requires unconsolidated variable interest entities to be consolidated by their primary beneficiaries if the entities do not effectively disperse the risks and rewards of ownership among their owners and other parties involved. The consolidation requirements of FIN 46 apply immediately to variable interest entities created after January 31, 2003. The consolidation requirements related to entities or arrangements existing before February 1, 2003, have been deferred by the Financial Accounting Standards Board until the fourth quarter of calendar 2003. The adoption of FIN 46 did not have a material impact on the Company’s results of operations or financial position.

Sequential Page
No. 11

     In January 2004, the Financial Accounting Standards Board (FASB) issued Staff Position No. 106-1, Accounting and Disclosure Requirements Related to the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (FSP 106-1). FSP 106-1 permits a sponsor of a postretirement health care plan that provides a prescription drug benefit to make a one-time election to defer accounting for the effects of the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (the Act) and requires certain disclosures pending further considerations of the underlying accounting issues. The Company sponsors several unfunded, defined postretirement plans that provide health care benefits to substantially all active and retired domestic employees not covered by collective bargaining agreements. Based on a preliminary analysis of the Act, it appears that some of the Company’s retiree medical plans can reasonably expect to qualify for beneficial treatment under the Act without change to the plan, while for other plans it is unclear if changes would be needed in order to qualify for beneficial treatment under the Act. Because of various uncertainties related to the Company’s response to this legislation and the appropriate accounting for this event, the Company has elected to defer financial recognition of this legislation until various governmental and regulatory agencies issue further guidance on the matter and the FASB issues final accounting guidance.

Sequential Page
No. 12

Item 2. Management’s Discussion and Analysis

     This discussion and analysis deals with comparisons of material changes in the unaudited condensed consolidated financial statements for the three-month and nine-month periods ended January 31, 2004 and 2003, respectively.

Results of Operations

Three months ended January 31, 2004

     Sales were $355.3 million for the third quarter of 2004, up four percent compared to $340.8 million in the third quarter of 2003. Favorable exchange rates contributed approximately $5.2 million of the increase in sales for the quarter. Excluding sales in the industrial business area, which is experiencing declining sales due in part to the Company’s decision to exit certain contracts, sales increased six percent. The Jif and Crisco brands contributed $175.8 million to sales in the third quarter of 2004, up nearly five percent compared to $167.6 million in the third quarter of 2003.

     Net income was $31.3 million, an increase of 12 percent over last year’s third quarter net income of $28.0 million. The sales improvement, particularly in the higher margin U.S. retail segment, and lower net interest contributed to the increase in earnings. In addition, last year’s results included approximately $1.4 million or $0.02 per share of expenses associated with the Company’s decision to write down certain equity investments to their current value. Earnings per share for the quarter were $0.62 compared to $0.56 in last year’s third quarter. Net income for the third quarter of 2004 included pre-tax charges of $2.5 million or $0.03 per share related to the Company’s restructuring plan. Net income for the third quarter of 2003 included pre-tax merger-related costs of $1.5 million or $0.02 per share.

     The U.S. retail market segment is comprised of the Company’s consumer and consumer oils business areas and represents domestic sales of Smucker’s, Jif, and Crisco branded products to retail customers. Sales in the U.S. retail market segment for the third quarter of 2004 were $254.3 million compared to $241.6 million last year, an increase of five percent. Jif and Crisco accounted for $168.6 million of the total compared to $161.7 million last year.

     Sales in the consumer business area increased over four percent for the quarter, driven by growth in both the fruit spreads and peanut butter categories. Sales of Smucker’s branded products were up over eight percent due to growth in fruit spreads and natural peanut butter.

     Natural peanut butter continued to post strong quarter-over-quarter results. In addition to growth in fruit spreads and peanut butter, Uncrustables also contributed to the increase in consumer sales for the quarter. Jif sales were up seven percent in volume but flat in dollar sales due to the impact of the price decrease that became effective in January 2003. In the consumer oils area, Crisco sales were up seven percent over last year’s third quarter reflecting a strong “Fall Bake” season and the impact of a 12 percent price increase that was effective January 2004. Sales of Crisco corn oil and olive oil spray also contributed to the year-over-year increase. In response to our strong “Fall Bake” season, the Company expects an increase in the overall competitive environment in the category during the fourth quarter.

     The special markets segment is comprised of the international, foodservice, beverage, and industrial business areas. Sales in this segment were $101.0 million compared to $99.2 million for the third quarter of 2003, led by increases in the international and beverage areas offset by declines in the industrial and foodservice areas. This decline reflects the planned exit of certain low margin contracts in both business areas. Excluding the industrial area, the segment increased nearly eight percent over last year’s third quarter.

     International sales were up 14 percent in the third quarter due to favorable exchange rates. As measured in local currency, Canadian sales were up four percent for the quarter while sales of Henry

Sequential Page
No. 13

Jones Foods, in Australia, were flat with last year. Export sales and industrial sales in Brazil and Scotland were also down for the quarter.

     Beverage sales also were up 14 percent compared to the third quarter of 2003 on the strength of its nonbranded business and increased sales of Santa Cruz Organic and The R. W. Knudsen Family products.

     Foodservice sales were down slightly, decreasing two percent from last year’s third quarter. The decrease was due to the impact of the Company’s previously announced decision to discontinue as master distributor for the Lea & Perrins brand this year. Excluding this impact, sales in the foodservice area were up five percent. Sales of traditional portion control items, primarily under the Smucker’s brand, were up over last year as were sales in the schools market. Sales of Uncrustables increased 12 percent in the schools market despite tight capacity throughout the quarter.

     Finally, industrial sales were down 19 percent in the third quarter compared to the prior year’s third quarter. Approximately $4.5 million in sales of now discontinued business were included in last year’s third quarter, bringing the year-to-date total to approximately $16 million. Sales in the remaining industrial business reversed trends of the previous quarters, ending slightly positive for the third quarter.

     Third quarter operating income increased approximately two percent over the comparable period last year while operating margin decreased slightly from 14.5 percent in the third quarter of 2003 to 14.2 percent this year. Gross margin performance improved in the quarter, increasing from 36.1 percent in last year’s third quarter to 36.4 percent this year. This improvement reflects the sales growth in the higher margin U.S. retail segment, and improved overhead absorption resulting from the increased production volume, partially offset by increased benefit costs.

     Selling, distribution, and administrative (SD&A) expenses as a percentage of sales increased from 21.1 percent in the third quarter of 2003 to 21.7 percent in the current quarter. SD&A increased as a result of higher employee benefit costs, notably pension and health care, increased legal costs, and start-up costs associated with the new consumer call center located in Orrville, Ohio.

     Lower interest expense and increased interest income contributed to earnings improvement in the quarter. The decrease in interest expense reflected the impact of rate swaps on the Company’s long-term debt, while the increase in interest income was due to higher investment balances and improved yields on investments.

Nine months ended January 31, 2004

     Sales for the nine-month period ended January 31, 2004, were up 11 percent to $1,091.6 million compared to $982.7 million for the first nine months of 2003. Favorable exchange rates contributed $12.2 million for the first nine months. The Jif and Crisco brands contributed $522.0 million to sales in the first nine months of 2004, compared to $428.0 million in the comparable period last year. The first nine months of 2004 benefited from an additional month of Jif and Crisco sales totaling $47.3 million, as the merger closed on June 1, 2002, one month into last fiscal year. Excluding the additional month of Jif and Crisco and the industrial contracts that were discontinued, sales increased over eight percent in the first nine months of 2004 compared to the first nine months last year.

     Net income for the first nine months of 2004 was $89.2 million, or $1.77 per share compared to $73.1 million or $1.56 per share last year. Net income for the first nine months of 2004 included pre-tax charges of $8.8 million or $0.11 per share related to the Company’s restructuring plan. Net income for the first nine months of 2003 included pre-tax merger-related costs of $8.9 million or $0.11 per share.

     For the first nine months of 2004, sales in the U.S. retail market segment were $784.2 million, up 17 percent over last year. Jif and Crisco accounted for $503.4 million of the total compared to $414.7 million last year. Excluding the benefit of the additional month of Jif and Crisco, sales in the segment

Sequential Page
No. 14

were up over ten percent for the first nine months. Jif sales were up seven percent, with tonnage up 15 percent, reflecting a six percent price decrease that was effective in January 2003. Sales of Crisco branded products were up three percent and 14 percent, in volume and dollars respectively, reflecting price increases taken last year resulting from increased soybean oil costs. Results of both Jif and Crisco exclude the additional month of sales. Sales of Smucker’s branded products were up over 12 percent during the period due to growth in fruit spreads and natural peanut butter. On a year-to-date basis, sales in the special markets segment were $307.4 million compared to $315.3 million during the prior year, a decrease of three percent driven by the expected loss of industrial sales offset by favorable exchange rates in the international areas. Excluding the industrial area, sales in the segment would have been up nine percent.

     Year-to-date operating income increased $19.5 million, or 15 percent, over last year and operating margin improved from 12.8 percent in the first nine months of 2003 to 13.3 percent this year. The additional month of Jif and Crisco sales in May, along with the ongoing growth of the higher margin U.S. retail segment were the primary causes for the margin improvement. For the first nine months of 2004, SD&A expenses as a percent of sales were 21.5 percent compared to 21.0 percent for the comparable period last year due primarily to a planned increase in marketing expenses, the majority behind the Jif and Crisco brands. Corporate expenses also are up for the period due to increased legal and employee benefit costs.

     During fiscal 2003, the Company announced plans to restructure certain operations as part of its ongoing efforts to optimize its production capacity, improve productivity and operating efficiencies, and lower the Company’s overall cost base. These initiatives include reducing the Company’s involvement in fruit processing, centralizing production and distribution of the Uncrustables product line, and significantly reducing the number of items available for sale. The program calls for the closing of three of the Company’s plants – Watsonville, California; Woodburn, Oregon; and West Fargo, North Dakota. In addition, the Company is consolidating operations of its two plants in Ripon, Wisconsin, into one operation. The restructurings are proceeding as planned.

     The Company expects to record a total restructuring charge of approximately $18 million, of which $2.5 million was recorded in the fourth quarter of fiscal 2003 and $8.8 million was recorded in the first nine months of fiscal 2004. The Company expects to record additional restructuring charges of approximately $3.2 million during the remainder of fiscal 2004. The balance of the charge will be incurred in fiscal 2005. The majority of these charges relate to severance, equipment relocation expenses, and accelerated depreciation on machinery and equipment. To date, cash payments related to the restructuring charges have been approximately $2.3 million.

     Due to the strong demand in both the retail and schools channels, the Company continues to experience short-term capacity constraints at its two Uncrustables manufacturing facilities. The Company has been working to minimize the impact of the shortages and to alleviate these capacity constraints. The situation is expected to be fully-addressed in time for the important “back-to-school” period later this summer with the start-up of the new Uncrustables facility in Scottsville, Kentucky. While this capacity situation will have some near-term effect on the pace at which the Company expands the Uncrustables business, it is expected to have neither a significant impact on this year’s sales and earnings results nor a material effect on the future growth of the Uncrustables business.

Sequential Page
No. 15

Financial Condition – Liquidity and Capital Resources

     The financial position of the Company remains strong with cash generated from operations of nearly $100 million for the first nine months of 2004. Due to an increase in cash generated from operations since the Jif and Crisco merger, the Company expanded its range of investments during the year beyond cash and cash equivalents and utilized $79.6 million of cash on hand to purchase available-for-sale securities. For comparative purposes, total cash and investments were $183.3 million at January 31, 2004, compared to $150.8 million at January 31, 2003. Under the Company’s investment policy, it will invest in securities deemed to be investment grade. Currently, these investments consist of government backed mortgage obligations, corporate bonds, municipal bonds, and commercial paper.

     Other significant uses of cash during the first nine months of the year were capital expenditures, primarily related to the new Uncrustables manufacturing facility currently under construction in Scottsville, Kentucky, the seasonal procurement of fruit, and the payment of dividends.

     To accommodate future growth for Uncrustables, during the second quarter the Company announced that it had approved an increase in capital expenditures of $15 million related to the Scottsville facility, bringing the total expected capital expenditures for 2004 to $95 million.

     The Company estimates that cash on hand, together with cash generated by operations will be sufficient to meet its remaining fiscal 2004 requirements, including the payment of dividends and interest on outstanding debt. However, the Company expects to utilize its existing lines of credit and additional financing to complete the Multifoods transaction described below.

Subsequent Event

     On March 8, 2004, the Company announced an agreement to acquire Minneapolis-based International Multifoods Corporation (Multifoods) in a transaction valued at approximately $840 million. Under the terms of the agreement, Multifoods’ shareholders will receive $25 per share in a combination of 80 percent stock and 20 percent cash, subject to certain conditions. In addition, the Company will assume $340 million in debt. The number of shares to be issued will be based on the average of the Company’s stock price for the 20-trading day period ending on the trading day immediately preceding the close. The Company intends to finance the cash portion of the purchase price and associated transaction costs through a combination of existing cash balances and outside financing. The transaction is subject to, among other things, approval by Smucker and Multifoods’ shareholders and customary regulatory approvals and will be tax free to the extent of the stock portion of the purchase price. The transaction is expected to close by the end of June 2004. Sales of the combined companies are expected to be over $2.3 billion on a full-year pro forma basis.

     Multifoods had consolidated fiscal 2003 sales of nearly $940 million, with sales in Canada of nearly $300 million. Multifoods’ primary U.S. brands include: Pillsbury baking mixes and ready-to-spread frostings; Hungry Jack pancake mixes, syrup and potato side dishes; Martha White baking mixes and ingredients; and Pet evaporated milk and dry creamer. In Canada, Multifoods has market leadership positions with Robin Hood flour and baking mixes and Bick’s pickles and condiments, and participates in the growing ethnic food category with the Golden Temple brand. The Pillsbury Barrelhead and Doughboy are registered trademarks of The Pillsbury Company, used under a 20 year, perpetually renewable, royalty-free license by Multifoods, and this agreement will continue post acquisition. Upon completion of the acquisition, the total retail sales of the categories in which the Company participates will increase from $3 billion to over $6.5 billion.

Sequential Page
No. 16

Item 3. Market Risk Disclosures

     The Company is exposed to market risk related to changes in interest rates, commodity prices, and foreign currency exchange rates. For further information, reference is made to the Company’s Annual Report on Form 10-K for the year ended April 30, 2003.

Sequential Page
No. 17

Certain Forward-Looking Statements

     This quarterly report includes certain forward-looking statements that are based on current expectations and are subject to a number of risks and uncertainties that could cause actual results to differ materially. These risks and uncertainties include, but are not limited to:

•		the success and cost of marketing and sales programs and strategies intended to promote growth in the Company’s businesses;
•		the ability of the business areas to achieve sales targets and the costs associated with attempting to do so;
•		the ability to successfully implement price increases, particularly in its consumer oils business;
•		the approval of the proposed acquisition of International Multifoods Corporation (Multifoods) by the Smucker and Multifoods’ shareholders, the ability to close the transaction, the ability of the Company to successfully obtain any required financing, and the ability to achieve estimated synergy savings on a timely basis;
•		the success and cost of introducing new products, notably Smucker’s Uncrustables products;
•		the exact time frame in which the new manufacturing facility in Scottsville, Kentucky, will be completed and placed into operation and the Company’s ability to effectively manage capacity constraints related to Uncrustables products until the Scottsville facility is operational;
•		the estimated costs and benefits associated with the Company’s plan to restructure certain of its operations;
•		the strength of commodity markets from which raw materials are procured and the related impact on costs;
•		raw material and ingredient cost trends;
•		foreign currency exchange and interest rate fluctuations;
•		general competitive activity in the market; and
•		other factors affecting share prices and capital markets generally.

Sequential Page
No. 18

Item 4. Controls and Procedures

     Evaluation of disclosure controls and procedures. Based on their evaluation as of January 31, 2004, the Company’s principal executive officers and principal financial officer have concluded that the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)) are effective to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in Securities and Exchange Commission rules and forms.

     Changes in internal controls. There were no significant changes in the Company’s internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Sequential Page
No. 19

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

     The Company is a defendant in 17 class action lawsuits in ten different states related to its Simply 100% Fruit product. The Dickinson Family, Inc., a wholly-owned subsidiary of the Company, has two class action lawsuits in two different states related to its Dickinson 100% Fruit product. The complaints in these lawsuits generally allege violations of state consumer fraud acts, unjust enrichment and breach of an express warranty based on the allegation that Simply 100% Fruit does not contain 100 percent fruit and it does not contain 100 percent of the fruit designated as the flavor (e.g., strawberry). The complaints generally seek damages in the form of either a refund of the purchase price or the difference between the price of Simply 100% Fruit and lower priced Smucker products. The Company believes these suits are without merit and intends to vigorously defend these actions.

Item 6. Exhibits and Reports on Form 8-K

Sequential Page
No. 20

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Sequential Page
No. 21

INDEX OF EXHIBITS

That are filed with the Commission and
The New York Stock Exchange

* Exhibits 2, 3, 4, 10, 11, 15, 18, 19, 22, 23, 24, 27 and 99 are either inapplicable to the Company or require no answer.