IFF Reports Strong Third Quarter 2015 Results
Third Quarter 2015 Consolidated Summary: Growth vs. Prior Year ¹
Reported (GAAP) | Adjusted (Non-GAAP) | Adjusted Currency Neutral | |||||||||||||||||||||
Sales |
Operating |
EPS | Sales |
Operating |
EPS | Sales |
Operating |
EPS | |||||||||||||||
Consolidated | (1)% | 3% | 0% | (1)% | 7% | 5% | 7% | 10% | 10% | ||||||||||||||
Acquisition Impact | 3% | 3% | 1% | 3% | 2% | 3% | |||||||||||||||||
¹ Schedules at the end of this release contain reconciliations of reported GAAP to non-GAAP metrics.
Win Where We Compete: achieve market leadership position in key markets, categories & customers
- North America Fragrance Compounds +7% led by double-digit Hair Care & Home Care growth
-
Fragrances currency neutral sales in
China +6% driven by strong growth with regional customers - Home Care grew high-single-digits, on a currency neutral basis, as a result of strong new wins
-
Flavors North America +19% including the acquisition of Ottens Flavors -
Flavors
Latin America up double-digits, on a currency neutral basis, for the 8th consecutive quarter
Innovating Firsts: strengthen position and drive differentiation in priority R&D platforms
- Encapsulation-related sales improved double-digits in Fabric, Toiletries and Home Care
- Sweetness and Savory Modulation portfolio grew strong double-digits
- Commercialized two captive fragrance ingredients that drive greater differentiation
- Launched second natural taste modulator of 2015 to build consumer-preferred products
- Developed new capsule chemistry to strengthen participation beyond Fabric Care
Become Our Customers’ Partner of Choice: attain commercial excellence
-
IFF-LMR Naturals & Haitian Vetiver partner certified “For Life” by the
Institute of Marketecology - Achieved additional core list status with several key customers across both flavors and fragrances
-
Won North America innovation award with one of IFF’s largest Flavors customers - Awarded Supplier Excellence award with one of IFF’s largest Fine Fragrance customers
- Gained industry-leading membership in the Together for Sustainability sustainable sourcing initiative and recognized by CDP as a world leader for corporate action on climate change
Strengthen and Expand the Portfolio: pursue value creation through collaborations & acquisitions
- Lucas Meyer Cosmetics achieved double-digit currency neutral sales growth on a standalone basis
- Ottens Flavors sales improved double-digits with strongest growth coming from regional customers
-
Announced partnership with
Vapor Communications to pioneer the future of digital scent
Management Commentary
“We are pleased to report strong financial results in the third quarter,
despite ongoing volatility in many key international markets,” said
Chairman and CEO
“Currency neutral sales improved 7%, including three percentage points
of growth relating to the acquisition of Ottens Flavors and
“With a focus on building greater differentiation, accelerating
profitable growth and increasing shareholder value, we continued to make
strides against our Vision 2020 strategy. In
“Delivery systems across both flavors and fragrances continued to drive growth. The strong trends in Fabric Care and Beverage continued in the third quarter, led by our encapsulation technology in fragrances and proprietary delivery system in flavors. We were also pleased with the sales of our sweetness and savory modulation portfolios which continued to produce strong results, increasing strong double-digits.
“In addition to the strides we have made from a market share and
innovation perspective, we also made progress in our never-ending quest
to “become our customers’ partner of choice.” Capitalizing on the trends
in naturals, IFF-LMR Naturals received its fourth “For Life” Social
Responsibility designation for its Haitian Vetiver operations. We are
proud that our commitment to embedding sustainability throughout our
business practices and our corporate culture is being acknowledge as
evident by our recent CDP Climate “A” List perfect score. We also won an
innovation award in
“Strengthening and expanding our portfolio is a focus of ours as we
diligently pursue value-creation opportunities in partnerships and
collaborations. In the third quarter, we completed the acquisition of
Lucas Meyer Cosmetics which helped us expand our product offerings
beyond flavors and fragrances into cosmetic active ingredients. We are
pleased to report that Lucas Meyer Cosmetics achieved strong
double-digit currency neutral sales growth on a standalone basis – a
good indication that we are putting our capital to work in areas that
accelerate growth. To maintain our legacy of pioneering firsts, we also
announced a partnership with
“Based on our strong year-to-date results and our outlook for more modest sales growth in the fourth quarter – due to challenging comparisons that include an extra week of sales in the prior year – we continue to believe we can deliver 6% full year 2015 currency neutral sales growth, including acquisitions. To correspond with our top-line performance, we continue to believe we can deliver approximately 9% adjusted operating profit growth and 10% adjusted EPS growth, both on a currency neutral basis for full year 2015”.
Third Quarter 2015 Segment Summary: Growth vs. Prior Year
Reported (GAAP) | Currency Neutral | ||||||||||
Sales |
Segment |
Sales |
Segment |
||||||||
Fragrances: | (2)% | 5% | 6% | 15% | |||||||
Acquisition Impact | 2% | 1% | 2% | 2% | |||||||
Flavors: | 0% | 0% | 8% | 9% | |||||||
Acquisition Impact | 4% | 3% | 5% | 3% | |||||||
Fragrances Business Unit
-
Currency neutral sales improved 6%, including approximately two
percentage points related to the acquisition of Lucas Meyer Cosmetics.
Growth was led by high-single-digit growth in
Latin America and mid-single-digit improvement inGreater Asia . -
Fine Fragrances increased 1% led by EAME, which improved 5%, as a
result of very strong new wins. In
Latin America , challenging economic conditions continue to impact Fine Fragrance sales, although the growth rate improved versus the second quarter. -
Consumer Fragrances grew 7% with broad-based growth led by a
double-digit increase in Fabric Care and high-single-digit increase in
Hair Care. On a geographic basis, all regions delivered growth, led by
double-digits in
Latin America , all on a currency neutral basis. -
Fragrance Ingredients grew 6% driven by the acquisition of
Lucas Meyer Cosmetics. Our organic Fragrance Ingredients sales remained soft as we continued to utilize capacity to further strengthen our internal Fragrance Compounds business. - Fragrances currency neutral segment profit improved approximately 15% driven by volume growth, benefits from cost and productivity initiatives and lower incentive compensation expense. Segment profit margin on a currency neutral basis increased 180 basis points to 22.4%.
-
On a reported basis, sales decreased 2% to
$406.0 million in the third quarter compared with$415.1 million in the prior year quarter. Fragrances segment profit increased 5%, or$4.3 million , to$90.9 million .
Flavors Business Unit
- Currency neutral sales grew 8%, including approximately four and a half percentage points related to the acquisition of Ottens Flavors. All categories experienced broad-based growth, with the strongest results in Beverage and Dairy.
-
EAME improved 4% led by high-single-digit growth in Beverage.
Western Europe reported the highest growth, improving 9%, driven by strong new win performance. -
North America grew 19% reflecting additional sales related to the acquisition of Ottens Flavors and high-double-digit growth in Dairy. -
Latin America increased 20% as all categories reported positive growth. The strong double-digit trend in Beverage continued for the 8th consecutive quarter. Savory and Dairy also grew double-digits as a result of strong new win performance. -
Greater Asia remained constant as growth inIndonesia ,India ,Singapore andJapan was offset by softness inChina , most notably due to a challenging economic environment. - Flavors currency neutral segment profit improved approximately 9% as sales growth, gross margin expansion and cost and productivity benefits more than offset the inclusion of amortization of intangibles related to the acquisition of Ottens Flavors. Segment profit margin on a currency neutral basis increased 10 basis points to 22.2% in the prior year quarter.
-
On a reported basis, sales were flat going to
$359.1 million from$358.7 million in the prior year quarter. Flavors segment profit remained constant at$79.8 million from$79.7 million .
FY 2015 Guidance: Growth vs. Prior Year
The Company full year 2015 remains:
Sales |
Operating |
EPS | |||||
% Change - Adjusted (Non-GAAP) | -1% | 4% | 5% | ||||
Negative Currency Impact | 7ppt | 5ppt | 5ppt | ||||
% Change - Currency Neutral (Adjusted) | 6% | 9% | 10% | ||||
A copy of the Company’s Quarterly Report on Form 10-Q will be available
on its website at www.iff.com
or at sec.gov by
Audio Webcast
A live webcast to discuss the Company’s third quarter 2015 financial
results will be held on
Meet IFF
Cautionary Statement Under The Private Securities Litigation Reform Act of 1995
This press release includes “forward-looking statements” under the
Federal Private Securities Litigation Reform Act of 1995, including
statements regarding our outlook for the fourth quarter and full year
2015, expected returns from our recent acquisitions and partnerships,
and our ability to generate shareholder returns and sustain our
long-term growth performance. These forward-looking statements are
qualified in their entirety by cautionary statements and risk factor
disclosures contained in the Company’s
International Flavors & Fragrances Inc. | |||||||||||||||||||||
Consolidated Income Statement | |||||||||||||||||||||
(Amounts in thousands except per diluted share data) |
|||||||||||||||||||||
(Unaudited) |
|||||||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||
2015 | 2014 |
% |
2015 | 2014 |
% |
||||||||||||||||
Net sales | $ | 765,092 | $ | 773,813 | (1 | )% | $ | 2,307,540 | $ | 2,332,451 | (1 | )% | |||||||||
Cost of goods sold | 417,966 | 433,702 | (4 | )% | 1,269,097 | 1,298,281 | (2 | )% | |||||||||||||
Gross profit | 347,126 | 340,111 | 2 | % | 1,038,443 | 1,034,170 | 0 | % | |||||||||||||
Research and development expenses | 62,750 | 63,701 | (1 | )% | 188,725 | 191,635 | (2 | )% | |||||||||||||
Selling and administrative expenses | 127,663 | 123,212 | 4 | % | 382,560 | 379,864 | 1 | % | |||||||||||||
Restructuring and other charges, net | — | 608 | (100 | )% | (170 | ) | 912 | (119 | )% | ||||||||||||
Operating profit | 156,713 | 152,590 | 3 | % | 467,328 | 461,759 | 1 | % | |||||||||||||
Interest expense | 11,855 | 10,968 | 8 | % | 34,357 | 34,048 | 1 | % | |||||||||||||
Other expense (income), net | 1,959 | (563 | ) | (448 | )% | (3,315 | ) | (3,761 | ) | (12 | )% | ||||||||||
Income before taxes | 142,899 | 142,185 | 1 | % | 436,286 | 431,472 | 1 | % | |||||||||||||
Taxes on income | 36,452 | 34,770 | 5 | % | 96,206 | 107,064 | (10 | )% | |||||||||||||
Net income | $ | 106,447 | $ | 107,415 | (1 | )% | $ | 340,080 | $ | 324,408 | 5 | % | |||||||||
Earnings per share - basic | $ | 1.32 | $ | 1.32 | $ | 4.20 | $ | 3.98 | |||||||||||||
Earnings per share - diluted | $ | 1.31 | $ | 1.31 | $ | 4.18 | $ | 3.95 | |||||||||||||
Average shares outstanding | |||||||||||||||||||||
Basic | 80,330 | 80,942 | 80,602 | 80,981 | |||||||||||||||||
Diluted | 80,737 | 81,508 | 81,052 | 81,556 | |||||||||||||||||
International Flavors & Fragrances Inc. | ||||||
Condensed Consolidated Balance Sheet | ||||||
(Amounts in thousands) |
||||||
(Unaudited) |
||||||
September 30, | December 31, | |||||
2015 | 2014 | |||||
Cash & cash equivalents | $ | 272,276 | $ | 478,573 | ||
Receivables | 569,608 | 493,768 | ||||
Inventories | 589,463 | 568,729 | ||||
Other current assets | 207,404 | 168,957 | ||||
Total current assets | 1,638,751 | 1,710,027 | ||||
Property, plant and equipment, net | 708,902 | 720,268 | ||||
Goodwill and other intangibles, net | 1,255,361 | 752,041 | ||||
Other assets | 308,671 | 312,285 | ||||
Total assets | $ | 3,911,685 | $ | 3,494,621 | ||
Bank borrowings and overdrafts, and | ||||||
current portion of long-term debt | $ | 133,056 | $ | 8,090 | ||
Other current liabilities | 554,264 | 510,718 | ||||
Total current liabilities | 687,320 | 518,808 | ||||
Long-term debt | 1,057,992 | 934,232 | ||||
Non-current liabilities | 570,224 | 518,892 | ||||
Shareholders' equity | 1,596,149 | 1,522,689 | ||||
Total liabilities and shareholders' equity | $ | 3,911,685 | $ | 3,494,621 | ||
International Flavors & Fragrances Inc. | ||||||||
Consolidated Statement of Cash Flows | ||||||||
(Amounts in thousands) |
||||||||
(Unaudited) |
||||||||
Nine Months Ended September 30, | ||||||||
2015 | 2014 | |||||||
Cash flows from operating activities: | ||||||||
Net income | $ | 340,080 | $ | 324,408 | ||||
Adjustments to reconcile to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 65,099 | 68,678 | ||||||
Deferred income taxes | 13,134 | 7,496 | ||||||
Gain on disposal of assets | (341 | ) | (2,351 | ) | ||||
Stock-based compensation | 18,355 | 19,627 | ||||||
Pension contributions | (61,125 | ) | (34,493 | ) | ||||
Changes in assets and liabilities, net of acquisitions: | ||||||||
Trade receivables | (108,563 | ) | (47,929 | ) | ||||
Inventories | (31,655 | ) | (21,609 | ) | ||||
Accounts payable | 54,482 | (2,459 | ) | |||||
Accruals for incentive compensation | (13,781 | ) | (45,482 | ) | ||||
Other current payables and accrued expenses | 34,585 | (977 | ) | |||||
Other assets/liabilities, net | (15,575 | ) | 52,594 | |||||
Net cash provided by operating activities | 294,695 | 317,503 | ||||||
Cash flows from investing activities: | ||||||||
Cash paid for acquisitions, net of cash received (including $15 million of contingent consideration related to the Aromor acquisition in 2014) | (493,469 | ) | (102,500 | ) | ||||
Additions to property, plant and equipment | (66,632 | ) | (97,820 | ) | ||||
Proceeds from life insurance contracts | 868 | 17,750 | ||||||
Maturity of net investment hedges | 9,735 | (472 | ) | |||||
Proceeds from disposal of assets | 3,431 | 2,506 | ||||||
Net cash used in investing activities | (546,067 | ) | (180,536 | ) | ||||
Cash flows from financing activities: | ||||||||
Cash dividends paid to shareholders | (113,875 | ) | (95,113 | ) | ||||
Net change in bank borrowings and overdrafts | — | 8,926 | ||||||
Deferred financing costs | — | (1,023 | ) | |||||
Repayments of debt | (30,000 | ) | — | |||||
Proceeds from issuance or drawdown of long-term debt | 279,998 | 4,100 | ||||||
Proceeds from issuance of stock under stock plans | 288 | 1,361 | ||||||
Excess tax benefits on stock-based payments | 11,704 | 6,080 | ||||||
Purchase of treasury stock | (81,237 | ) | (52,453 | ) | ||||
Net cash provided by (used in) financing activities | 66,878 | (128,122 | ) | |||||
Effect of exchange rates changes on cash and cash equivalents | (21,803 | ) | (9,514 | ) | ||||
Net change in cash and cash equivalents | (206,297 | ) | (669 | ) | ||||
Cash and cash equivalents at beginning of year | 478,573 | 405,505 | ||||||
Cash and cash equivalents at end of period | $ | 272,276 | $ | 404,836 | ||||
International Flavors & Fragrances Inc. | ||||||||||||||||
Business Unit Performance | ||||||||||||||||
(Amounts in thousands) |
||||||||||||||||
(Unaudited) |
||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Net Sales | ||||||||||||||||
Flavors | $ | 359,103 | $ | 358,708 | $ | 1,108,689 | $ | 1,100,726 | ||||||||
Fragrances | 405,989 | 415,105 | 1,198,851 | 1,231,725 | ||||||||||||
Consolidated | 765,092 | 773,813 | 2,307,540 | 2,332,451 | ||||||||||||
Segment Profit | ||||||||||||||||
Flavors | 79,803 | 79,747 | 256,546 | 258,614 | ||||||||||||
Fragrances | 90,893 | 86,615 | 252,416 | 259,253 | ||||||||||||
Global Expenses | (6,874 | ) | (12,882 | ) | (27,067 | ) | (49,182 | ) | ||||||||
Restructuring and other charges, net | — | (608 | ) | 170 | (912 | ) | ||||||||||
Acquisition and related costs | (6,830 | ) | — | (13,896 | ) | — | ||||||||||
Operational improvement initiative costs | (279 | ) | (282 | ) | (841 | ) | (6,014 | ) | ||||||||
Operating profit | 156,713 | 152,590 | 467,328 | 461,759 | ||||||||||||
Interest Expense | (11,855 | ) | (10,968 | ) | (34,357 | ) | (34,048 | ) | ||||||||
Other income, net | (1,959 | ) | 563 | 3,315 | 3,761 | |||||||||||
Income before taxes | $ | 142,899 | $ | 142,185 | $ | 436,286 | $ | 431,472 | ||||||||
Operating Margin | ||||||||||||||||
Flavors | 22.2 | % | 22.2 | % | 23.1 | % | 23.5 | % | ||||||||
Fragrances | 22.4 | % | 20.9 | % | 21.1 | % | 21.0 | % | ||||||||
Consolidated | 20.5 | % | 19.7 | % | 20.3 | % | 19.8 | % | ||||||||
International Flavors & Fragrances Inc. | ||||||||||||||||||||
Sales Performance by Region and Category | ||||||||||||||||||||
(Unaudited) |
||||||||||||||||||||
Third Quarter 2015 vs. 2014 | ||||||||||||||||||||
Percentage Change in Sales by Region of Destination | ||||||||||||||||||||
Fine |
Consumer |
Ingredients | Total Frag. | Flavors | Total | |||||||||||||||
North America | Reported | 4 | % | 8 | % | 4 | % | 6 | % | 19 | % | 13 | % | |||||||
EAME | Reported | -11 | % | -12 | % | -9 | % | -11 | % | -12 | % | -11 | % | |||||||
Currency Neutral | 5 | % | 5 | % | 6 | % | 5 | % | 4 | % | 5 | % | ||||||||
Latin America | Reported | -13 | % | 9 | % | -5 | % | 2 | % | 9 | % | 4 | % | |||||||
Currency Neutral | -8 | % | 13 | % | 9 | % | 7 | % | 20 | % | 11 | % | ||||||||
Greater Asia | Reported | -23 | % | 2 | % | 6 | % | 2 | % | -6 | % | -3 | % | |||||||
Currency Neutral | -22 | % | 5 | % | 7 | % | 4 | % | 0 | % | 2 | % | ||||||||
Total | Reported | -9 | % | 0 | % | -3 | % | -2 | % | 0 | % | -1 | % | |||||||
Currency Neutral | 1 | % | 7 | % | 6 | % | 6 | % | 8 | % | 7 | % | ||||||||
First Nine Months 2015 vs. First Nine Months 2014 | ||||||||||||||||||||
Percentage Change in Sales by Region of Destination | ||||||||||||||||||||
Fine |
Consumer |
Ingredients | Total Frag. | Flavors | Total | |||||||||||||||
North America | Reported | -5 | % | 4 | % | -11 | % | -2 | % | 11 | % | 5 | % | |||||||
EAME | Reported | -10 | % | -7 | % | -9 | % | -8 | % | -9 | % | -9 | % | |||||||
Currency Neutral | 7 | % | 10 | % | 2 | % | 7 | % | 6 | % | 7 | % | ||||||||
Latin America | Reported | -11 | % | 12 | % | -1 | % | 5 | % | 10 | % | 7 | % | |||||||
Currency Neutral | -7 | % | 15 | % | 2 | % | 8 | % | 18 | % | 11 | % | ||||||||
Greater Asia | Reported | 2 | % | 0 | % | 1 | % | 0 | % | -1 | % | -1 | % | |||||||
Currency Neutral | 3 | % | 2 | % | 7 | % | 3 | % | 3 | % | 3 | % | ||||||||
Total | Reported | -9 | % | 1 | % | -7 | % | -3 | % | 1 | % | -1 | % | |||||||
Currency Neutral | 0 | % | 8 | % | 0 | % | 5 | % | 8 | % | 6 | % | ||||||||
Currency neutral growth is calculated by translating prior year sales at the exchange rates used for the corresponding 2015 period.
International Flavors & Fragrances Inc. |
||||||
GAAP to Non-GAAP Reconciliation |
||||||
Foreign Exchange Impact |
||||||
(Unaudited) |
||||||
Q3 Consolidated |
Sales |
Operating |
EPS | |||
% Change - Reported (GAAP) | -1% | 3% | 0% | |||
Items Impacting Comparability | 0% | 4% | 5% | |||
% Change - Adjusted (Non-GAAP) | -1% | 7% | 5% | |||
Currency Impact | 8% | 3% | 5% | |||
% Change - Currency Neutral (Adjusted) | 7% | 10% | 10% | |||
Q3 Flavors |
Sales |
Segment |
||||
% Change - Reported (GAAP) | 0% | 0% | ||||
Currency Impact | 8% | 9% | ||||
% Change - Currency Neutral | 8% | 9% | ||||
Q3 Fragrances |
Sales |
Segment |
||||
% Change - Reported (GAAP) | -2% | 5% | ||||
Currency Impact | 8% | 10% | ||||
% Change - Currency Neutral | 6% | 15% | ||||
YTD Consolidated |
Sales |
Operating |
EPS | |||
% Change - Reported (GAAP) | -1% | 1% | 6% | |||
Items Impacting Comparability | 0% | 2% | -1% | |||
% Change - Adjusted (Non-GAAP) | -1% | 3% | 5% | |||
Currency Impact | 7% | 6% | 6% | |||
% Change - Currency Neutral (Adjusted) | 6% | 9% | 11% | |||
YTD Flavors |
Sales |
Segment |
||||
% Change - Reported (GAAP) | 1% | -1% | ||||
Currency Impact | 7% | 8% | ||||
% Change - Currency Neutral | 8% | 7% | ||||
YTD Fragrances |
Sales |
Segment |
||||
% Change - Reported (GAAP) | -3% | -3% | ||||
Currency Impact | 8% | 11% | ||||
% Change - Currency Neutral | 5% | 8% | ||||
Currency neutral growth is calculated by translating prior year amounts at the exchange rates used for the corresponding 2015 period.
GAAP to
Non-GAAP Reconciliation
(Amounts in thousands)
(Unaudited)
The following information and schedules provide reconciliation information between reported GAAP amounts and non-GAAP certain adjusted amounts. This information and schedules are not intended as, and should not be viewed as, a substitute for reported GAAP amounts or financial statements of the Company prepared and presented in accordance with GAAP.
Third Quarter 2015 | |||||||||||||||
Items Impacting Comparability | |||||||||||||||
Reported |
Operational |
Acquisition |
Adjusted |
||||||||||||
Net sales | 765,092 | ||||||||||||||
Cost of goods sold | 417,966 | (279) | (a) | (2,465) | (b) | 415,222 | |||||||||
Gross profit | 347,126 | 279 | 2,465 | 349,870 | |||||||||||
Research and development expenses | 62,750 | ||||||||||||||
Selling and administrative expenses | 127,663 | (4,365) | (b) | 123,298 | |||||||||||
RSA Expense | 190,413 | ||||||||||||||
Restructuring and other charges, net | — | ||||||||||||||
Operating profit | 156,713 | 279 | 6,830 | 163,822 | |||||||||||
Interest expense | 11,855 | ||||||||||||||
Other expense (income), net | 1,959 | ||||||||||||||
Income before taxes | 142,899 | 279 | 6,830 | 150,008 | |||||||||||
Taxes on income | 36,452 | 70 | 829 | 37,351 | |||||||||||
Net income | 106,447 | 209 | 6,001 | 112,657 | |||||||||||
Earnings per share - diluted | $ 1.31 | $ — | $ 0.07 | $ 1.39 | (c) | ||||||||||
(a) | Related to a partial plant closing in Asia. | ||||||||||||||
(b) |
Transaction costs related to acquisitions (Ottens Flavors and |
||||||||||||||
(c) | Item does not foot due to rounding. | ||||||||||||||
* |
The Company tracks the amount of amortization recorded on |
||||||||||||||
Third Quarter 2014 | |||||||||||||||
Items Impacting Comparability | |||||||||||||||
Reported |
Restructuring |
Operational |
Adjusted |
||||||||||||
Net sales | 773,813 | ||||||||||||||
Cost of goods sold | 433,702 | (282) | (b) | 433,420 | |||||||||||
Gross profit | 340,111 | 282 | 340,393 | ||||||||||||
Research and development expenses | 63,701 | ||||||||||||||
Selling and administrative expenses | 123,212 | ||||||||||||||
RSA Expense | 186,913 | ||||||||||||||
Restructuring and other charges, net | 608 | (608) | (a) | - | |||||||||||
Operating profit | 152,590 | 608 | 282 | 153,480 | |||||||||||
Interest expense | 10,968 | ||||||||||||||
Other expense (income), net | (563) | ||||||||||||||
Income before taxes | 142,185 | 608 | 282 | 143,075 | |||||||||||
Taxes on income | 34,770 | 213 | 70 | 35,053 | |||||||||||
Net income | 107,415 | 395 | 212 | 108,022 | |||||||||||
Earnings per share - diluted | $ 1.31 | $ 0.01 | $ — | $ 1.32 | |||||||||||
(a) | Costs related to the Fragrance Ingredients Rationalization. | ||||||||||||||
(b) | Related to plant closing in Europe and partial closing in Asia. | ||||||||||||||
GAAP to
Non-GAAP Reconciliation
(Amounts in thousands)
(Unaudited)
The following information and schedules provide reconciliation information between reported GAAP amounts and non-GAAP certain adjusted amounts. This information and schedules are not intended as, and should not be viewed as, a substitute for reported GAAP amounts or financial statements of the Company prepared and presented in accordance with GAAP.
Third Quarter Year-to-Date 2015 | |||||||||||||||||||||||
Items Impacting Comparability | |||||||||||||||||||||||
Reported |
Restructuring |
Operational |
Acquisition |
Tax |
Adjusted |
||||||||||||||||||
Net sales | 2,307,540 | ||||||||||||||||||||||
Cost of goods sold | 1,269,097 | (841) | (b) | (3,309) | (c) | 1,264,947 | |||||||||||||||||
Gross profit | 1,038,443 | 841 | 3,309 | 1,042,593 | |||||||||||||||||||
Research and development expenses | 188,725 | ||||||||||||||||||||||
Selling and administrative expenses | 382,560 | (10,587) | (c) | 371,973 | |||||||||||||||||||
RSA Expense | 571,285 | ||||||||||||||||||||||
Restructuring and other charges, net | (170) | 170 | (a) | — | |||||||||||||||||||
Operating profit | 467,328 | (170) | 841 | 13,896 | 481,895 | ||||||||||||||||||
Interest expense | 34,357 | ||||||||||||||||||||||
Other expense (income), net | (3,315) | ||||||||||||||||||||||
Income before taxes | 436,286 | (170) | 841 | 13,896 | 450,853 | ||||||||||||||||||
Taxes on income | 96,206 | (60) | 210 | 1,879 | 10,478 | (d) | 108,713 | ||||||||||||||||
Net income | 340,080 | (110) | 631 | 12,017 | (10,478) | 342,140 | |||||||||||||||||
Earnings per share - diluted | $ 4.18 | $ — | $ 0.01 | $ 0.15 | $ (0.13) | $ 4.20 | (e) | ||||||||||||||||
(a) | Costs related to the Fragrance Ingredients Rationalization | ||||||||||||||||||||||
(b) | Related to plant closings in Europe and partial closing in Asia | ||||||||||||||||||||||
(c) |
Transaction costs related to acquisitions (Ottens Flavors and
Lucas Meyer Cosmetics) as well as expense |
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(d) |
Settlements due to favorable tax rulings in jurisdictions for
which reserves were previously recorded for |
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(e) | Item does not foot due to rounding | ||||||||||||||||||||||
* |
The Company tracks the amount of amortization recorded on
recent acquisitions in order to monitor its |
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Third Quarter Year-to-Date 2014 | |||||||||||||||||||||||
Items Impacting Comparability | |||||||||||||||||||||||
Reported |
Restructuring |
Operational |
Adjusted |
||||||||||||||||||||
Net sales | 2,332,451 | ||||||||||||||||||||||
Cost of goods sold | 1,298,281 | (5,100) | (a) | (914) | (b) | 1,292,267 | |||||||||||||||||
Gross profit | 1,034,170 | 5,100 | 914 | 1,040,184 | |||||||||||||||||||
Research and development expenses | 191,635 | ||||||||||||||||||||||
Selling and administrative expenses | 379,864 | ||||||||||||||||||||||
RSA Expense | 571,499 | ||||||||||||||||||||||
Restructuring and other charges, net | 912 | (912) | — | ||||||||||||||||||||
Operating profit | 461,759 | 6,012 | 914 | 468,685 | |||||||||||||||||||
Interest expense | 34,048 | ||||||||||||||||||||||
Other expense (income), net | (3,761) | ||||||||||||||||||||||
Income before taxes | 431,472 | 6,012 | 914 | 438,398 | |||||||||||||||||||
Taxes on income | 107,064 | 2,104 | 227 | 109,395 | |||||||||||||||||||
Net income | 324,408 | 3,908 | 687 | 329,003 | |||||||||||||||||||
Earnings per share - diluted | $ 3.95 | $ 0.05 | $ 0.01 | $ 4.01 | |||||||||||||||||||
(a) | Costs related to the Fragrance Ingredients Rationalization | ||||||||||||||||||||||
(b) | Related to plant closings in Europe and partial closing in Asia | ||||||||||||||||||||||
View source version on businesswire.com: http://www.businesswire.com/news/home/20151109006754/en/
Source:
International Flavors & Fragrances Inc.
VP, Global Corporate
Communications & Investor Relations:
Michael DeVeau,
212-708-7164