COMPANY UPDATE / ESTIMATE CHANGE / PRICE TARGET CHANGE Key Metrics SJM - NYSE (as of 2/16/18) $124.46 Two Year Price Target $145.00 52-Week Range $99.57 - $143.68 Shares Outstanding-Basic (mil.) 113.0 Market Cap. ($ mil.) $14,064 3-Mo. Average Daily Volume 1,050,000 Institutional Ownership 79% Total Debt/Total Capital (1/18) 39% ROE (TTM ended 1/18) 12% Book Value/Share (1/18) $69.06 Price/Book Value 1.8x Annual Dividend & Yield $3.12 2.5% EBITDA Margin (TTM ended 1/18) 21% Adjusted EPS FY 4/30 (excludes nonrecurring items and amort.) Prior Curr. Prior Curr. 2017 2018E 2018E 2019E 2019E 1Q $1.86 $1.51 A $1.98 2Q $2.05 $2.02 A $2.43 3Q $2.00 $2.50 A $2.50 4Q $1.80 $2.16 $2.22 $2.34 Year $7.72 $7.83 $8.25 $8.26 $9.25 P/E 16.1x 15.1x 13.5x Note: EPS figures exclude nonrecurring items and amortization expense. Quarterly figures may not add to annual figure due to rounding. Revenue ($ mil) Prior Curr. Prior Curr. 2017 2018E 2018E 2019E 2019E 1Q $1,816 $1,749 A $1,790 2Q $1,914 $1,924 A $1,970 3Q $1,879 $1,903 A $1,920 4Q $1,784 $1,817 $1,809 $1,840 Year $7,392 $7,375 $7,385 $7,520 $7,520 Company Description: Established in 1897, The J.M. Smucker Company is a leading marketer and manufacturer of consumer foods, beverage products, and pet food/snacks in North America. Its portfolio of food & beverage brands includes Smucker's, Folgers, Dunkin' Donuts (packaged coffee), Jif, Crisco, Pillsbury, R.W. Knudsen, Hungry Jack, Café Bustelo, Martha White, Sahale Snacks, and Bick s. The Pet food/snack portfolio of brands (from the purchase of Big Heart Pet Brands in March 2015) includes Meow Mix, Milk-Bone, Kibbles n Bits, and 9Lives. Consumer Staples Analyst: Jeffrey S. Thomison, CFA 502.588.9137 / JThomison@hilliard.com Institutional Sales Desk: George Moorin 502.588.9141 / GMoorin@hilliard.com J.J.B. Hilliard, W.L. Lyons, LLC February 20, 2018 The J.M. Smucker Company SJM NYSE Long-term Buy-2 Sequential EPS Improvement; Raising Price Target Based on Higher Forward EPS Figure Fiscal 3Q results were about as we expected. Net sales rose 1.3% to $1.903 billion, slightly above our and street consensus figures. Each of the three main segments coffee, consumer foods, pet foods had an element we liked, whether it be a top line gain or margin improvement. Adjusted EPS, excluding amortization and benefiting from a lower tax rate, were $2.50 versus $2.00 in the year ago period. Under an unchanged tax rate assumption, adjusted EPS were $2.15, similar to street consensus of $2.13 and our estimate of $2.14. We found net positives with each segment. The coffee segment produced a 2.4% sales gain and a 5.8% gain in profit. The consumer foods business had lower volume but pricing and operational efficiencies led to a profit gain. The pet foods segment had its best volume gain of the fiscal year thus far, although a one-time charge led to lower profit. Overall adjusted gross margin and operating margin both improved from 1H figures. We expect improved results to continue in the nearterm. This is based on better top line growth, projected gross margin improvement, and continued operational efficiencies. In addition, lower tax rates stemming from recent tax reform has positively impacted our earnings and cash flow estimates for this and next year. We like the long-term outlook as well. Although we view SJM s businesses as highly competitive, we consider the company well-positioned and welldiversified. We like its portfolio of brands, focus on product innovation, and the financial wherewithal to invest in its various brands. We are raising our two-year price target by $5 to $145 per share. This increase is the result of a higher assumption of forward EPS in two years and a valuation similar to the current one. Additionally, we expect dividends to rise annually. Our Suitability rating is 2. Note Important Disclosures on Pages 8-9. Note Analyst Certification on Page 8.
Exhibit 1 Consolidated Statements of Operations (figures in millions except percentages and per share data) Three Months Ended Nine Months Ended 1/31/18 1/31/17 % chg. 1/31/18 1/31/17 % chg. U.S. Retail - Coffee $550.5 $537.6 2.4% $1,584.0 $1,602.7 (1.2%) U.S. Retail - Consumer Foods 511.6 517.3 (1.1%) 1,535.5 1,611.6 (4.7%) U.S. Retail - Pet Foods 561.9 550.9 2.0% 1,635.7 1,601.4 2.1% International & Foodservice 279.3 273.0 2.3% 820.6 792.8 3.5% Total Net Sales 1,903.3 1,878.8 1.3% 5,575.8 5,608.5 (0.6%) Cost of Products Sold 1,174.8 1,155.9 1.6% 3,430.2 3,420.0 0.3% Gross Profit 728.5 722.9 0.8% 2,145.6 2,188.5 (2.0%) Selling, Distrib. & Admin. Exp. 331.9 337.2 (1.6%) 1,043.0 1,056.3 (1.3%) Amortization 51.6 51.7 (0.2%) 154.7 155.2 (0.3%) Impairment Charge 176.9 75.7 133.7% 176.9 75.7 133.7% Special Project Costs 5.6 18.0 (68.9%) 42.4 66.8 (36.5%) Other Operating Exp. (Inc.) (0.2) 2.6 NM 1.4 (0.3) NM Operating Income 162.7 237.7 (31.6%) 727.2 834.8 (12.9%) Interest Expense, net (43.1) (40.3) 6.9% (126.7) (122.8) 3.2% Other Income (Expense) (3.6) 0.2 NM (3.7) 4.5 NM Earnings Before Taxes 116.0 197.6 (41.3%) 596.8 716.5 (16.7%) Taxes (Benefit) (715.3) 63.0 NM (555.9) 234.6 NM GAAP Net Income $831.3 $134.6 NM $1,152.7 $481.9 NM GAAP Diluted EPS $7.32 $1.16 NM $10.15 $4.14 NM Reconcilliation to Non-GAAP N.I.: Income Taxes (715.3) 63.0 (555.9) 234.6 Amortization 51.6 51.7 154.7 155.2 Unalloc. Derivative (Gain) Loss 0.7 (0.8) (21.6) 5.7 Cost of Prod. Sold - Special Projects 2.3 0.5 3.9 4.8 Impairment Charge 176.9 75.7 176.9 75.7 Other Special Project Costs 5.6 18.0 42.4 66.8 Pretax Income, exclud. Special Items 353.1 342.7 3.0% 953.1 1,024.7 (7.0%) Adj. Taxes 69.4 109.9 (36.9%) 268.3 335.5 (20.0%) Non-GAAP Net Income $283.7 $232.8 21.9% $684.8 $689.2 (0.6%) Non-GAAP Diluted EPS $2.50 $2.00 25.0% $6.03 $5.92 1.9% Non-GAAP Diluted EPS, assuming no tax rate benefit in FY18 $2.15 $2.00 7.6% $5.68 $5.92 (4.0%) Avg. Diluted Shares Outst. 113.6 116.5 (2.5%) 113.6 116.5 (2.5%) As a % of Net Sales: bp. chg. bp. chg. Gross Profit 38.28% 38.48% (20) 38.48% 39.02% (54) Selling, Distrib. & Admin. Exp. 17.44% 17.95% (51) 18.71% 18.83% (13) Operating Income 8.55% 12.65% (410) 13.04% 14.88% (184) Non-GAAP Net Income 14.91% 12.39% 251 12.28% 12.29% (1) Segment Profit Margins: U.S. Retail - Coffee 33.08% 32.03% 105 28.95% 33.23% (428) U.S. Retail - Consumer Foods 23.71% 23.04% 67 23.65% 21.69% 196 U.S. Retail - Pet Foods 21.00% 22.93% (193) 20.74% 22.67% (193) International & Foodservice 18.83% 16.67% 217 17.62% 17.24% 38 Source: Company reports and Hilliard Lyons estimates Note: April fiscal year Hilliard Lyons Equity Research 2 Consumer Staples
3Q FY18 results. The U.S. Retail Coffee segment had an encouraging quarter, in our view. 3Q sales were up 2.4% (better than 1Q and 2Q results), while profits rose 5.8% with a 105 basis point margin improvement. This reflected higher volume and overall lower commodity costs compared to a year ago. Moreover, the profit gain was achieved despite higher marketing expenses and start-up costs related to upcoming coffee innovation (details forthcoming). The Folgers brand was down modestly in a competitive environment, but was improved compared to 1H. K-Cup sales continued to be strong, particularly for the Dunkin Donuts and Café Bustelo brands. The U.S. Retail Consumer Foods segment posted a 1.1% sales decline yet a 1.8% increase in profits, as segment profit margin rose 67 basis points. Overall volume was down 3% in the quarter. Results reflected higher pricing and solid growth from the iconic Smucker and Jif brands, but significantly lower volume from Crisco due to lost distribution at a key retailer in the club channel. Another challenge, though expected, came from higher freight costs. In the U.S. Retail Pet Foods segment, sales were up 2.0% from the year ago figure as the mainstream dog food (Nature s Recipe) and snack (Milk-Bone) categories were strong. Segment profit was down due to a charge related to obsolete inventory, higher freight costs, and higher marketing expense. Overall volume was up and pricing was slightly negative. Segment profit margin declined due mainly to the one-time charge. Sales from the smaller International and Away From Home (formerly titled Foodservice) segment increased 2.3% and profits rose 15.6%. The sales gain reflected favorable foreign currency exchange and higher volume due in part to greater distribution. Segment profit margin improved 217 basis points compared to a year ago, reflective of some incremental expenses in the year ago quarter. Reported net income surged due to a one-time tax benefit related to the re-measurement of deferred tax assets and liabilities. Excluding this item, but including a lower tax rate related to the impact of tax reform, adjusted net income rose 21.9% to $283.7 million. Share repurchases over the past year helped the EPS calculation, as adjusted EPS increased at the slightly higher rate of 25.0%, after factoring a 2.5% decline in the weighted average share count compared to one year ago. Financial condition. The company s balance sheet is solid, in our view. As of January 31, 2018, total cash and equivalents were $186 million. Receivables and inventories were at sufficient levels, in our view. Total debt was $4.942 billion, or 39% of total capitalization. Gross debt divided by trailing adjusted EBITDA (earnings before interest, taxes, depreciation & amortization excluding nonrecurring items) was 3.1x. We consider this a manageable level that could comfortably be increased if incremental investment opportunities arose. Shareholders equity at the recent quarter end was $7.804 billion. Wesson oil transaction still pending. In May 2017, SJM agreed to acquire the Wesson oil brand from Conagra Brands. The Wesson brand is considered a complement to SJM s Crisco oil brand. SJM management expects Wesson to add about $230 million in annual sales, $30 million in EBITDA, and $0.10 in EPS in the first full year under SJM ownership. The $285 million purchase price represents 9.5x EBITDA prior to a tax benefit. Including that benefit, and expected synergies, the multiple is expected to drop to about 5.0x. The deal is subject to customary closing conditions and regulatory approvals including that from the Federal Trade Commission, which has made a second request for information. We will incorporate Wesson in our financial model for SJM if/when the transaction becomes official. Outlook. Following 3Q results, management made some revisions to its FY18 (April period end) financial outlook. Net sales are expected to be flat to slightly down from FY17, unchanged from its previous view. Gross margin for all of FY18 is expected to be similar to last year rather than the previous expectation of up to 50 basis points of improvement; this primarily reflects higher freight costs (an industry norm) and the inventory obsolescence charge in the Pet Foods segment. Hilliard Lyons Equity Research 3 Consumer Staples
Non-GAAP EPS for FY18 are expected at $8.20-$8.30, up from the prior range of $7.75-$7.90. This boosted view reflects the full year benefit of tax reform. For that same reason, free cash flow is expected at roughly $825 million for FY18, up from the previous view of $775 million. This is after planned capital expenditures of $310 million. We have updated our FY18 outlook. Our net sales estimate is $7.385 billion, up $10 million from our previous figure. After updates to various line items and our share count assumption, our non-gaap EPS estimate is $8.25, the mid-point of management s guided range. We have also updated our FY19 view. This includes no change to our net sales estimate of $7.520 billion, but an adjusted EPS increase of nearly $1.00 due largely to the impact of tax reform (including a projected tax rate of 23%). Our presentation of EPS is consistent with the methodology used by the company, that is, excluding amortization expense. However, for valuation purposes, we also consider the more conservative approach of including amortization expense (mostly related to the acquisition of Big Heart Pet Brands in March 2015). Our new FY18 EPS estimate of $8.25 equates to roughly $6.98 including amortization expense of about $1.27 per share. Finally, we note the company will be presenting at the annual Consumer Analyst Group of New York conference on Wednesday afternoon, February 21. We expect management to offer further thoughts on the company, its outlook, and the competitive position. If new information is disclosed at the conference that impacts our financial model, we will make adjustments accordingly. Valuation. Based on the current price, SJM shares are trading at 15.1x our FY18 adjusted EPS estimate of $8.25 and 13.6x our estimate of forward twelve-month EPS, both figures excluding amortization expense. Including amortization expense of about $1.27 per share (most earnings figures from our covered companies include amortization expense), the current stock price represents 17.8x an estimated FY18 EPS figure of $6.98 and 15.8x an estimated forward EPS figure. We believe comparing SJM s commonly presented and discussed price/earnings multiples to historical figures has some limitations due to changing methodologies behind EPS figures (perhaps a mix of the two methodologies with and without amortization expense). However, we note the following: The 13.6x multiple on our projection of forward EPS excluding amortization expense is below the mid-point of a five-year historical range we estimate at 12x-19x (adjusting past EPS figures to exclude amortization expense). The 15.8x multiple on our forward EPS estimate including amortization expense compares to forward multiples of 17.8x for the S&P 500 and 19.5x for the S&P Consumer Staples sector. On an Enterprise Value/EBITDA basis, SJM is trading at approximately 11.1x our estimate of forward adjusted EBITDA. This compares to a five-year historical range we estimate at 9x-13x. Opinion. We like SJM s extensive operating history, diverse product portfolio, and seasoned management team. We like the numerous brands and believe market share and product innovation initiatives are positives. The coffee business is a good cash flow generator, in our view, but profits can fluctuate over the short-term due to changes in commodity costs, competitive actions, and pricing decisions implemented by SJM. However, we like the combination of a mainstream brand (Folgers) and smaller growth-oriented brands (Café Bustelo and Dunkin Donuts). Additionally, we believe industry growth trends for K-Cup servings continue to bode well for SJM. Hilliard Lyons Equity Research 4 Consumer Staples
The consumer foods business has upside potential from recent results that were impacted by the loss of Crisco business from a major retailer, the one year anniversary of which occurred late in the recent 3Q. Despite that impact, 3Q profits and margin improved from year ago figures. Meanwhile, we consider the core Smucker s and Jif brands to be in good shape on an absolute basis and relative to the competition. We believe the Big Heart pet food business is starting to show signs of core improvement after a sluggish start following the 2015 acquisition. Excluding the nonrecurring charge in the recent 3Q, we thought the segment had several bright spots. We believe it can be a meaningful cash flow generator in the years ahead, particularly with expanded distribution and fully realized synergies. We are mindful of the investment year represented by FY18, as the company injects money back into the business to boost innovation, add capacity in certain product lines, and improve its overall competitive position. This had a limiting impact on 1H profits (adjusted EPS down 10%), in our view. However, we liked the sequential improvement in the recent 3Q (8% adjusted EPS gain on a same tax rate basis) and expect 4Q to show further growth. Beyond that, we continue to feel good about the company s prospects in FY19 and beyond. Moreover, we would not be surprised to see one or more acquisitions over the next few years but have not factored any into our financial outlook. Longer term, earnings growth could potentially come from factors such as improved volumes, market share gains, product development/brand extensions, operating margin improvement, debt reduction (lower interest expense), and share repurchases. Also, we expect annual dividend increases, with declarations around July of each year; a 4% raise announced in July 2017 marked the 16 th consecutive year of dividend growth. We consider the balance sheet solid and note management s recent comment that it was aggressively pursuing a variety of growth opportunities. We project long-term annual EPS growth in the upper single digit percentages. Rating and price target. We rate SJM shares Long-term Buy. We consider the company a high achiever, with a solid history of organic and external growth. Given FY18 earnings pressure related to costs and competitive environments, but a more favorable longer term outlook, we believe our Long-term Buy rating is most appropriate. Our two year price target is $145 per share, an increase of $5 from our previous figure. This increase reflects a higher estimate of forward EPS (with meaningful benefit coming from tax reform) and little change to our multiple assumption. Our view is based on improving fundamentals; this includes areas such as demand, pricing power, market share, product portfolio, and innovation initiatives. Implied total return potential based on the recent closing price is about 10-11% on an annualized basis. Our $145 price target is based on forward EPS excluding amortization of approximately $10.50 two years from now and a 13.8x price/earnings multiple. This latter figure compares to the 13.6x multiple on our current estimate of forward EPS. We consider this valuation assumption reasonable, given the aforementioned estimated historical range of 12x-19x. Suitability. Our Suitability rating on SJM is 2 on a 1 (most conservative) to 4 (most aggressive) scale. Contributing factors in determining our Suitability rating include the company s debt level (particularly following the March 2015 acquisition of Big Heart Pet Brands), market capitalization, liquidity/trading volume, diversity of revenues, the industry in which the company operates, the company s competitive position within the industry, and the company s long-term earnings and dividend history. Hilliard Lyons Equity Research 5 Consumer Staples
Risks. There are numerous factors that could affect operations of The J.M. Smucker Company. A recent factor is the company s relationship with its retail partners (in a dynamic food retailing industry) as it relates to unit volumes and pricing. Other factors include changes in consumer demand for the company s products; product competition, including private-label; price competition; volatility of commodity markets (green coffee beans, wheat, soybean oil, milk, peanuts, sugar, etc.); labor relations; extreme weather conditions or occurrences; crude oil price trends and the resulting impact on transportation, energy, and packaging costs; the ability to implement price changes in response to rising input costs; the success and costs of introducing new products; the impact of potential food safety concerns; risks associated with potential growth of international operations such as exchange rate fluctuations and geopolitical risks; potential future acquisitions; and the global economy. Labor contracts are another consideration. Recently, about 27% of SJM s employees were covered by union contracts at 11 facilities. The company has five contracts expiring in FY18, representing about 8% of SJM s total employees. There were recently 113 million common shares outstanding and there is only one class of stock. Shareholders are typically entitled to one vote per share held; however, shareholders who have owned the stock for approximately four years are entitled to ten votes per share held on certain matters, including major issues such as a potential merger, consolidation, or liquidation of the company. Hilliard Lyons Equity Research 6 Consumer Staples
Exhibit 2 Consolidated Statements of Income (figures in millions except percentages and per share data) FY19E % chg. FY18E % chg. FY17 % chg. FY16 U.S. Retail - Coffee $2,120 1.4% $2,090 (0.9%) $2,109 (5.8%) $2,239 U.S. Retail - Consumer Foods 2,095 4.6% 2,002 (4.0%) 2,085 (8.1%) 2,270 U.S. Retail - Pet Foods 2,180 (0.1%) 2,183 2.2% 2,136 (5.1%) 2,250 International & Away From Home 1,125 1.4% 1,110 4.5% 1,062 1.0% 1,052 Total Net Sales 7,520 1.8% 7,385 (0.1%) 7,392 (5.4%) 7,811 Costs of Products Sold 4,585 1.7% 4,510 (1.0%) 4,557 (5.9%) 4,843 Gross Profit 2,935 2.1% 2,875 1.4% 2,835 (4.5%) 2,968 Selling, Distrib. & Admin. Exp. 1,420 2.5% 1,385 (0.4%) 1,391 (7.9%) 1,510 Amortization 211 2.9% 205 (1.1%) 207 (0.3%) 208 Impairment Charge 50 177 133 0 Special Project Costs 25 42 77 136 Other Operating Exp. (Inc.) 3 2 (4) (32) Operating Income 1,226 15.2% 1,064 3.2% 1,032 (9.9%) 1,145 Interest Expense, net (171) 2.4% (167) 2.4% (163) (4.6%) (171) Other Income (Expense) (2) (4) 10 4 Earnings Before Taxes 1,053 17.9% 893 1.7% 878 (10.2%) 978 Taxes 242 NM (498) NM 286 (1.1%) 289 GAAP-based Net Income $811 (41.7%) $1,391 134.9% $592 (14.0%) $689 Non-GAAP Adjustments: Income Tax Expense 242 (498) 286 289 Amortization 211 205 207 208 Unallocated Derivative Loss (Gain) 0 (22) 27 (12) Impairment Charge 50 177 133 0 Costs of Products Sold - Special Costs 2 4 6 12 Other Special Project Costs 25 42 77 136 Pre-tax Income, Adjusted 1,341 3.2% 1,299 (2.2%) 1,329 0.5% 1,322 Income Tax Expense, Adjusted 308 364 433 391 Net Income, Adjusted $1,033 10.4% $935 4.4% $896 (3.8%) $931 Avg. Diluted Shares Outst. 111.6 (1.6%) 113.4 (2.3%) 116.1 (2.8%) 119.5 Non-GAAP EPS, diluted, as reported $9.25 12.2% $8.25 6.9% $7.72 (1.0%) $7.79 As a % of Net Sales: bp. chg. bp. chg. bp. chg. Gross Profit 39.03% 10 38.93% 58 38.35% 36 37.99% Selling, Distrib. & Admin. Exp. 18.88% 13 18.75% (6) 18.81% (52) 19.34% Operating Income, GAAP-based 16.30% 190 14.41% 45 13.95% (71) 14.66% Net Income, GAAP-based 10.78% (805) 18.84% 1,082 8.01% (80) 8.82% Net Income, Adjusted 13.73% 107 12.66% 55 12.12% 20 11.92% Tax Rate, Adjusted 23.00% (500) 28.00% (457) 32.57% 299 29.58% Dividend Data: FY19E FY18E FY17 FY16 Dividends Paid During FY $3.28 $3.08 $2.92 $2.65 Dividend Payout Ratio 35% 37% 38% 34% Note: Non-GAAP EPS figures exclude amortization expense Source: Company reports and Hilliard Lyons estimates Note: April fiscal year Hilliard Lyons Equity Research 7 Consumer Staples
Additional information is available upon request. Prices of other stocks mentioned: Dunkin Brands Group - DNKN - $62.64 Conagra Brands Inc. - CAG - $36.25 Analyst Certification I, Jeffrey S. Thomison, hereby certify that the views expressed in this research report accurately reflect my personal views about the subject company(ies) and its (their) securities. I also certify that I have not been, am not, and will not be receiving direct or indirect compensation in exchange for expressing the specific recommendation(s) in this report. Important Disclosures Hilliard Lyons' analysts receive bonus compensation based on Hilliard Lyons profitability. They do not receive direct payments from investment banking activity. Investment Ratings Buy - We believe the stock has significant total return potential in the coming 12 months. Long-term Buy - We believe the stock is an above average holding in its sector, and expect solid returns to be realized over a longer time frame than our Buy rated issues, typically 2-3 years. Neutral - We believe the stock is an average holding in its sector, is currently fully valued, and may be used as a source of funds if better opportunities arise. Underperform - We believe the stock is vulnerable to a price set back in the next 12 months. Suitability Ratings 1 - A large cap, core holding with a solid history 2 - A historically secure company which could be cyclical, has a shorter history than a "1" or is subject to event driven setbacks 3 - An above average risk/reward ratio could be due to small size, lack of product diversity, sporadic earnings or high leverage 4 - Speculative, due to small size, inconsistent profitability, erratic revenue, volatility, low trading volume or a narrow customer or product base Hilliard Lyons Investment Banking Recommended Issues Provided in Past 12 Mo. # of % of Rating Stocks Covered Stocks Covered Banking No Banking Buy 31 28% 10% 90% Hold/Neutral 74 66% 9% 91% Sell 7 6% 0% 100% As of 7 February 2018 Hilliard Lyons Equity Research 8 Consumer Staples
Note: Price targets accompanying Buy ratings reflect a one year time period while price targets accompanying Long-term Buy ratings reflect a two to three year time period. Other Disclosures Opinions expressed are subject to change without notice and do not take into account the particular investment objectives, financial situation or needs of individual investors. Employees of J.J.B. Hilliard, W.L. Lyons, LLC or its affiliates may, at times, release written or oral commentary, technical analysis or trading strategies that differ from the opinions expressed here. J.J.B. Hilliard, W.L. Lyons, LLC is a multi-disciplined financial services firm that regularly seeks investment banking assignments and compensation from issuers for services including, but not limited to, acting as an underwriter in an offering or financial advisor in a merger or acquisition, or serving as placement agent in private transactions. The information herein has been obtained from sources we believe to be reliable but is not guaranteed and does not purport to be a complete statement of all material factors. This is for informational purposes and is not a solicitation of orders to purchase or sell securities. Reproduction is forbidden unless authorized. All rights reserved. Hilliard Lyons Equity Research 9 Consumer Staples