IFF Reports Second Quarter 2016 Results
Second Quarter 2016 Consolidated Summary: Change vs. Prior Year
Reported (GAAP) | Adjusted (Non-GAAP)¹ | Currency Neutral (Non-GAAP)¹ | ||||||||||||||||
Sales | Operating Profit | EPS | Sales | Operating Profit | EPS | Sales | Operating Profit | EPS | ||||||||||
Consolidated | 3% | 11% | 13% | 3% | 7% | 8% | 4% | 7% | 5% | |||||||||
Acquisition Impact | 2% | 3% | 3% | 2% | 3% | 3% | 2% | 3% | 3% |
¹ Schedules at the end of this release contain reconciliations of reported GAAP to non-GAAP metrics.
Second Quarter 2016 Consolidated Financial Highlights
-
Reported net sales for the second quarter totaled
$793.5 million , an increase of 3% from$767.5 million in the second quarter of 2015. Excluding the impact of currency, currency neutral sales increased 4%, including a 2 percentage point contribution related to the acquisition of IFF | Ottens Flavors and IFF | Lucas Meyer Cosmetics. -
Reported operating profit totaled
$164.5 million , an increase of 11% from$148.8 million in the second quarter of 2015. Adjusted operating profit and currency neutral adjusted operating profit both increased 7% to$165.7 million in the second quarter of 2016, driven primarily by volume growth, benefits associated with cost and productivity initiatives, and the contribution of acquisitions.
-
Reported earnings per share (EPS) increased 13% to
$1.46 per diluted share compared with$1.29 per diluted share in the prior year second quarter. Adjusted EPS increased 8% to$1.47 per diluted share compared with$1.36 per diluted share in the prior year second quarter. Excluding the impact of foreign exchange, adjusted currency neutral EPS increased 5% driven by lower year-over-year shares outstanding, offset by higher interest expense and a higher effective tax rate.
Second Quarter 2016 Strategic Highlights: Currency Neutral Performance
Innovating Firsts: strengthen position and drive differentiation in priority R&D platforms
- Sweetness and savory modulation portfolio continued to grow strong double-digits
- Encapsulation-related sales increased double-digits led by Fabric Care and Personal Wash
- Launched new natural flavor modulator and new natural flavor molecule
- Debuted first-ever Cradle to Cradle Certified™ fragrance: PuraVita™
Win Where We Compete: achieve market leadership position in key markets, categories & customers
-
North America sales +5% driven primarily by the contribution of acquisitions -
Middle East &Africa up mid-single-digits with strong growth in Flavors -
Home Care grew mid-single-digits led by double-digit growth in
North America & EAME
Become Our Customers’ Partner of Choice: attain commercial excellence
- Launched enhanced sustainability strategy focused on positive transformational changes toward a regenerative, healthy and abundant world
- Achieved core list status with key customer
-
Partnered with Unilever to improve the lives of vetiver farming
communities in
Haiti -
Deployed industry-first on-site wind turbine at Tilburg,
Netherlands facility
Strengthen and Expand the Portfolio: pursue value creation through collaborations & acquisitions
- IFF | Lucas Meyer Cosmetics achieved double-digit growth on a standalone basis
- IFF | Ottens Flavors posted solid growth on a standalone basis led by regional customers
- IFF | Lucas Meyer Cosmetics invested in Bio ForeXtra to Expand Raw Material Access
Management Commentary
“As we celebrate the first anniversary of the launch of Vision 2020, we
are proud of the performance we made relative to our strategic
priorities,” said Chairman and CEO
“With respect to the second quarter of 2016, we are pleased to report our performance was consistent with our expectations for all of our key financial metrics. Currency neutral sales growth of 4% was driven by new wins across both businesses and the benefits associated with our strategic acquisitions. Adjusted operating profit and adjusted EPS, on a currency neutral basis, both grew faster than sales led by volume growth, cost and productivity initiatives and acquisitions. We achieved these financial results as we continued to strategically reinvest in the business to drive long-term growth.
“As we have started the year well – first half currency neutral sales grew 5% and currency neutral adjusted operating profit and adjusted EPS were up 7% and 8% respectively – we remain cautiously optimistic in achieving our previously stated currency neutral guidance given the continued macroeconomic uncertainty.”
Second Quarter 2016 Segment Summary: Growth vs. Prior Year
Reported (GAAP) | Currency Neutral (Non-GAAP) | |||||||
Sales | Segment Profit | Sales | Segment Profit | |||||
Fragrances: | 5% | 10% | 5% | 7% | ||||
Acquisition Impact | 3% | 5% | 3% | 5% | ||||
Flavors: | 2% | 8% | 3% | 9% | ||||
Acquisition Impact | 1% | 1% | 1% | 1% |
Fragrances Business Unit
-
On a reported basis, sales increased 5%, or
$18.9 million , to$414.0 million . Reported Fragrances segment profit increased 10%, or$7.7 million , to$87.6 million and reported segment profit margin expanded 100 basis points to 21.2%. -
Currency neutral sales improved 5%, including approximately 3
percentage points related to the acquisition of IFF |
Lucas Meyer Cosmetics. -
Fine Fragrances decreased 1% on a reported and currency neutral basis
as strong double-digit growth in
Latin America was offset by softness inNorth America and EAME. -
Consumer Fragrances grew 4% on a reported and currency neutral basis
driven by broad- based growth across all sub-categories led by a
double-digit increase in Personal Wash and strong contributions from
Fabric and Home Care. On a geographic basis, growth was led by a
double-digit increase in
Greater Asia and high-single-digit growth inNorth America . - Fragrance Ingredients grew 15% on a reported basis and 14% on a currency neutral basis, inclusive of sales related to the IFF | Lucas Meyer Cosmetics acquisition.
-
Fragrances segment profit improved approximately 7% on a currency
neutral basis as a result of volume growth, benefits from cost and
productivity initiatives, and the acquisition of IFF |
Lucas Meyer Cosmetics. Segment profit margin expanded 40 basis points to 21.2% on a currency neutral basis.
Flavors Business Unit
-
On a reported basis, sales increased 2%, or
$7.0 million , to$379.5 million . Reported Flavors segment profit increased 8% to$90.3 million from$84.0 million , and reported segment profit margin improved 120 basis points to 23.8%. - Currency neutral sales grew 3%, including approximately 1 percentage point related to the acquisition of IFF | Ottens Flavors, as all categories improved year-over-year.
-
EAME increased 3% on a reported basis and 4% on a currency neutral
basis led by high-single-digit currency neutral growth in the
Middle East andAfrica and broad-based growth acrossWestern Europe andEastern Europe . -
North America improved 4%, principally reflecting the contribution of additional sales related to the acquisition of IFF | Ottens Flavors. -
Latin America decreased 10% on a reported basis and 7% on a currency neutral basis.Mexico grew strong double-digits on a currency neutral basis; however; performance was offset by challenges related to customers reducing their inventory positions due to the softening of import restrictions inArgentina . -
Greater Asia increased 4% on a reported basis and 6% on a currency neutral basis led by strong growth inIndonesia ,India and Asean. - Flavors segment profit grew approximately 9% on a currency neutral basis primarily resulting from volume growth and the benefits from cost and productivity initiatives. Segment profit margin expanded 120 basis points to 23.8% on a currency neutral basis.
FY 2016 Guidance: Percent Change vs. Prior Year
The Company’s full year 2016 guidance:
Currency Neutral | FX Impact1 | GAAP2 | ||||||||
Organic | M&A | Total | ||||||||
Sales | 2.0 - 3.0% | ~1.5% | 3.5 - 4.5% | ~(2)% | 1.5 - 2.5% | |||||
Operating Profit | 3.5 - 5.5% | ~1.5% | 5.0 - 7.0% | ~(3)% | 2.0 - 4.0% | |||||
EPS | 5.0 - 7.0% | ~1.5% | 6.5 - 8.5% | ~(2)% | 4.5 - 6.5% |
1 See Use of Non-GAAP Financial Measures
2
Excludes items impacting comparability
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 second quarter 2016 financial
results will be held on
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 fiscal year 2016. These
forward-looking statements are qualified in their entirety by cautionary
statements and risk factor disclosures contained in the Company’s
Use of Non-GAAP Financial Measures
We provide in this press release (1) Currency Neutral Sales, (2) Adjusted Operating Profit and Currency Neutral Adjusted Operating Profit and (3) Adjusted EPS and Currency Neutral Adjusted EPS, which exclude restructuring costs and other significant items of a non-recurring and/or nonoperational nature such as operational improvement initiatives and acquisition related costs (often referred to as “Items Impacting Comparability”) and, with respect to the currency neutral items, the impact of foreign currency movements. We provide these metrics as we believe that they are useful in providing period to period comparisons of the results of our operational performance. When we provide our expectations for our currency neutral metrics in our full year 2016 guidance, we estimate the anticipated FX impact by comparing prior year results to the prior year results restated at exchange rates in effect for the current year based on the currency of the underlying transaction. When we provide our expectations for our Adjusted Operating Profit and our Adjusted EPS in our full year 2016 guidance, the closest corresponding GAAP measures (expected reported Operating Profit and EPS) and a reconciliation of the differences between the non-GAAP expectation and the corresponding GAAP measure generally are not available without unreasonable effort due to inherent difficulty of forecasting the timing and amount of reconciling items that would be excluded from the GAAP measure in the relevant future period and the relevant tax impact of such reconciling items on EPS. The variability of the excluded items may have a significant, and potentially unpredictable, impact on our future GAAP results. Currency Neutral Sales, Adjusted Operating Profit, Currency Neutral Adjusted Operating Profit, Adjusted EPS and Currency Neutral Adjusted EPS should not be considered in isolation or as substitutes for analysis of the Company’s results under GAAP and may not be comparable to other companies’ calculation of such metrics.
Meet IFF
International Flavors & Fragrances Inc. Consolidated Income Statement (Amounts in thousands except per diluted share data) (Unaudited) |
||||||||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||
2016 | 2015 | % Change | 2016 | 2015 | % Change | |||||||||||||||||
Net sales | $ | 793,478 | $ | 767,541 | 3 | % | $ | 1,576,789 | $ | 1,542,448 | 2 | % | ||||||||||
Cost of goods sold | 427,837 | 422,501 | 1 | % | 850,940 | 851,131 | (0 | )% | ||||||||||||||
Gross profit | 365,641 | 345,040 | 6 | % | 725,849 | 691,317 | 5 | % | ||||||||||||||
Research and development expenses | 63,252 | 62,514 | 1 | % | 126,637 | 125,976 | 1 | % | ||||||||||||||
Selling and administrative expenses | 132,784 | 131,023 | 1 | % | 256,327 | 250,018 | 3 | % | ||||||||||||||
Amortization of acquisition-related intangibles | 5,130 | 3,040 | 69 | % | 11,191 | 4,880 | 129 | % | ||||||||||||||
Restructuring and other charges, net | — | (358 | ) | (100 | )% | — | (170 | ) | (100 | )% | ||||||||||||
Operating profit | 164,475 | 148,821 | 11 | % | 331,694 | 310,613 | 7 | % | ||||||||||||||
Interest expense | 15,060 | 11,407 | 32 | % | 27,539 | 22,502 | 22 | % | ||||||||||||||
Other (income) expense, net | (2,635 | ) | 436 | (704 | )% | (2,792 | ) | (5,275 | ) | (47 | )% | |||||||||||
Income before taxes | 152,050 | 136,978 | 11 | % | 306,947 | 293,386 | 5 | % | ||||||||||||||
Taxes on income | 35,317 | 31,604 | 12 | % | 71,610 | 59,754 | 20 | % | ||||||||||||||
Net income | $ | 116,733 | $ | 105,374 | 11 | % | $ | 235,337 | $ | 233,632 | 1 | % | ||||||||||
Earnings per share - basic | $ | 1.46 | $ | 1.30 | $ | 2.94 | $ | 2.88 | ||||||||||||||
Earnings per share - diluted | $ | 1.46 | $ | 1.29 | $ | 2.93 | $ | 2.86 | ||||||||||||||
Average shares outstanding | ||||||||||||||||||||||
Basic | 79,764 | 80,790 | 79,809 | 80,729 | ||||||||||||||||||
Diluted | 80,040 | 81,192 | 80,141 | 81,201 |
International Flavors & Fragrances Inc. Condensed Consolidated Balance Sheet (Amounts in thousands) (Unaudited) |
||||||
June 30, | December 31, | |||||
2016 | 2015 | |||||
Cash & cash equivalents | $ | 539,992 | $ | 181,988 | ||
Receivables | 621,164 | 537,896 | ||||
Inventories | 584,489 | 572,047 | ||||
Other current assets | 183,789 | 145,178 | ||||
Total current assets | 1,929,434 | 1,437,109 | ||||
Property, plant and equipment, net | 737,353 | 732,794 | ||||
Goodwill and other intangibles, net | 1,229,381 | 1,247,393 | ||||
Other assets | 258,460 | 284,714 | ||||
Total assets | $ | 4,154,628 | $ | 3,702,010 | ||
Bank borrowings and overdrafts, and | ||||||
current portion of long-term debt | $ | 133,473 | $ | 132,349 | ||
Other current liabilities | 554,778 | 592,807 | ||||
Total current liabilities | 688,251 | 725,156 | ||||
Long-term debt | 1,357,684 | 935,373 | ||||
Non-current liabilities | 430,761 | 446,492 | ||||
Shareholders' equity | 1,677,932 | 1,594,989 | ||||
Total liabilities and shareholders' equity | $ | 4,154,628 | $ | 3,702,010 |
International Flavors & Fragrances Inc. Consolidated Statement of Cash Flows (Amounts in thousands) (Unaudited) |
||||||||
Six Months Ended June 30, | ||||||||
2016 | 2015 | |||||||
Cash flows from operating activities: | ||||||||
Net income | $ | 235,337 | $ | 233,632 | ||||
Adjustments to reconcile to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 49,743 | 41,041 | ||||||
Deferred income taxes | 16,543 | 17,891 | ||||||
(Gain) loss on disposal of assets | (2,910 | ) | 14 | |||||
Stock-based compensation | 13,774 | 12,860 | ||||||
Pension contributions | (39,510 | ) | (57,493 | ) | ||||
Changes in assets and liabilities, net of acquisitions: | ||||||||
Trade receivables | (70,361 | ) | (92,329 | ) | ||||
Inventories | (7,271 | ) | (9,834 | ) | ||||
Accounts payable | (29,167 | ) | 27,334 | |||||
Accruals for incentive compensation | (2,001 | ) | (21,191 | ) | ||||
Other current payables and accrued expenses | 18,800 | 21,305 | ||||||
Other assets | (1,346 | ) | (12,417 | ) | ||||
Other liabilities | (27,081 | ) | 5,505 | |||||
Net cash provided by operating activities | 154,550 | 166,318 | ||||||
Cash flows from investing activities: | ||||||||
Cash paid for acquisitions, net of cash received | — | (188,835 | ) | |||||
Additions to property, plant and equipment | (43,236 | ) | (37,937 | ) | ||||
Proceeds from life insurance contracts | — | 548 | ||||||
Maturity of net investment hedges | (641 | ) | 9,735 | |||||
Proceeds from disposal of assets | 3,630 | 1,515 | ||||||
Net cash used in investing activities | (40,247 | ) | (214,974 | ) | ||||
Cash flows from financing activities: | ||||||||
Cash dividends paid to shareholders | (89,463 | ) | (75,927 | ) | ||||
Net change in revolving credit facility borrowings and overdrafts | (138,142 | ) | (30,283 | ) | ||||
Deferred financing costs | (4,796 | ) | — | |||||
Proceeds from issuance of long-term debt | 555,559 | 86,162 | ||||||
Loss on pre-issuance hedges | (3,244 | ) | — | |||||
Proceeds from issuance of stock under stock plans | 494 | 286 | ||||||
Excess tax benefits on stock-based payments | 4,431 | 11,608 | ||||||
Purchase of treasury stock | (71,714 | ) | (38,813 | ) | ||||
Net cash provided by (used in) financing activities | 253,125 | (46,967 | ) | |||||
Effect of exchange rates changes on cash and cash equivalents | (9,424 | ) | (5,696 | ) | ||||
Net change in cash and cash equivalents | 358,004 | (101,319 | ) | |||||
Cash and cash equivalents at beginning of year | 181,988 | 478,573 | ||||||
Cash and cash equivalents at end of period | $ | 539,992 | $ | 377,254 |
International Flavors & Fragrances Inc. Business Unit Performance (Amounts in thousands) (Unaudited) |
||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Net Sales | ||||||||||||||||
Flavors | $ | 379,504 | $ | 372,478 | $ | 752,012 | $ | 749,586 | ||||||||
Fragrances | 413,974 | 395,063 | 824,777 | 792,862 | ||||||||||||
Consolidated | 793,478 | 767,541 | 1,576,789 | 1,542,448 | ||||||||||||
Segment Profit | ||||||||||||||||
Flavors | 90,337 | 84,015 | 182,151 | 176,743 | ||||||||||||
Fragrances | 87,596 | 79,924 | 176,833 | 161,522 | ||||||||||||
Global Expenses | (12,232 | ) | (8,629 | ) | (26,141 | ) | (20,194 | ) | ||||||||
Restructuring and other charges, net | (182 | ) | 358 | (283 | ) | 170 | ||||||||||
Acquisition and related costs | (213 | ) | (6,566 | ) | (1,249 | ) | (7,066 | ) | ||||||||
Operational improvement initiative costs | (831 | ) | (281 | ) | (1,099 | ) | (562 | ) | ||||||||
Spanish capital tax settlement | — | — | 1,482 | — | ||||||||||||
Operating profit | 164,475 | 148,821 | 331,694 | 310,613 | ||||||||||||
Interest Expense | (15,060 | ) | (11,407 | ) | (27,539 | ) | (22,502 | ) | ||||||||
Other income, net | 2,635 | (436 | ) | 2,792 | 5,275 | |||||||||||
Income before taxes | $ | 152,050 | $ | 136,978 | $ | 306,947 | $ | 293,386 | ||||||||
Operating Margin | ||||||||||||||||
Flavors | 23.8 | % | 22.6 | % | 24.2 | % | 23.6 | % | ||||||||
Fragrances | 21.2 | % | 20.2 | % | 21.4 | % | 20.4 | % | ||||||||
Consolidated | 20.7 | % | 19.4 | % | 21.0 | % | 20.1 | % |
International Flavors & Fragrances Inc. Sales Performance by Region and Category (Unaudited) |
||||||||||||||||
Second Quarter 2016 vs. 2015 | ||||||||||||||||
Percentage Change in Sales by Region of Destination | ||||||||||||||||
Fine | Consumer Fragrances | Ingredients | Total Frag. | Flavors | Total | |||||||||||
North America | Reported | -5% | 8% | 17% | 7% | 4% | 5% | |||||||||
EAME | Reported | -3% | 3% | 23% | 5% | 3% | 5% | |||||||||
Currency Neutral | -5% | 1% | 21% | 3% | 4% | 4% | ||||||||||
Latin America | Reported | 9% | -5% | -14% | -3% | -10% | -5% | |||||||||
Currency Neutral | 15% | -4% | -14% | -1% | -7% | -3% | ||||||||||
Greater Asia | Reported | 0% | 10% | 9% | 9% | 4% | 6% | |||||||||
Currency Neutral | 1% | 11% | 8% | 11% | 6% | 8% | ||||||||||
Total | Reported | -1% | 4% | 15% | 5% | 2% | 3% | |||||||||
Currency Neutral | -1% | 4% | 14% | 5% | 3% | 4% | ||||||||||
First Six Months 2016 vs. First Six Months 2015 | ||||||||||||||||
Percentage Change in Sales by Region of Destination | ||||||||||||||||
Fine | Consumer Fragrances | Ingredients | Total Frag. | Flavors | Total | |||||||||||
North America | Reported | 5% | 7% | 23% | 10% | 6% | 8% | |||||||||
EAME | Reported | -2% | -1% | 13% | 2% | -3% | 0% | |||||||||
Currency Neutral | 0% | 1% | 15% | 4% | 1% | 3% | ||||||||||
Latin America | Reported | -1% | 0% | -10% | -1% | -6% | -2% | |||||||||
Currency Neutral | 9% | 3% | -9% | 3% | 1% | 2% | ||||||||||
Greater Asia | Reported | -3% | 6% | 12% | 7% | 1% | 3% | |||||||||
Currency Neutral | -1% | 8% | 12% | 8% | 4% | 6% | ||||||||||
Total | Reported | 0% | 3% | 13% | 4% | 0% | 2% | |||||||||
Currency Neutral | 3% | 5% | 15% | 6% | 4% | 5% |
Currency neutral growth is calculated by translating prior year sales at the exchange rates used for the corresponding 2016 period.
International Flavors & Fragrances Inc. GAAP to Non-GAAP Reconciliation Foreign Exchange Impact (Unaudited) |
||||||
Q2 Consolidated |
Sales | Operating Profit | EPS | |||
% Change - Reported (GAAP) | 3% | 11% | 13% | |||
Items Impacting Comparability | 0% | -4% | -5% | |||
% Change - Adjusted (Non-GAAP) | 3% | 7% | 8% | |||
Currency Impact | 1% | 0% | -3% | |||
% Change - Currency Neutral (Adjusted) | 4% | 7% | 5% | |||
Q2 Flavors |
Sales | Segment Profit | ||||
% Change - Reported (GAAP) | 2% | 8% | ||||
Currency Impact | 1% | 1% | ||||
% Change - Currency Neutral | 3% | 9% | ||||
Q2 Fragrances |
Sales | Segment Profit | ||||
% Change - Reported (GAAP) | 5% | 10% | ||||
Currency Impact | 0% | -3% | ||||
% Change - Currency Neutral | 5% | 7% | ||||
1H Consolidated |
Sales | Operating Profit | EPS | |||
% Change - Reported (GAAP) | 2% | 7% | 2% | |||
Items Impacting Comparability | 0% | -2% | 3% | |||
% Change - Adjusted (Non-GAAP) | 2% | 5% | 5% | |||
Currency Impact | 3% | 2% | 3% | |||
% Change - Currency Neutral (Adjusted) | 5% | 7% | 8% |
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.
Second Quarter 2016 | ||||||||||
Items Impacting Comparability | ||||||||||
Adjusted Operating Income | ||||||||||
Reported (GAAP) |
Restructuring and Other Charges (a) |
Operational Improvement Initiative Costs (b) |
Acquisition Related Costs (c) |
Adjusted (Non-GAAP) |
||||||
Operating profit |
164,475 |
182 |
831 |
213 | 165,701 | |||||
(a) |
Accelerated depreciation costs related to restructuring initiatives. |
|||||||||
(b) |
Accelerated depreciation and severance costs in Asia. |
|||||||||
(c) | Additional transaction costs related to acquisition of Lucas Meyer. | |||||||||
* | The Company tracks the amount of amortization recorded on recent acquisitions in order to monitor its progress with respect to its Vision 2020 goals. The following amounts were recorded with respect to recent acquisitions: $1.7M related to Lucas Meyer and $1.6M related to Ottens Flavors. | |||||||||
Second Quarter 2015 | ||||||||||
Items Impacting Comparability | ||||||||||
Adjusted Operating Income | ||||||||||
Reported (GAAP) |
Restructuring and Other Charges (a) |
Operational Improvement Initiative Costs (b) |
Acquisition related costs (c) |
Adjusted (Non-GAAP) |
||||||
Operating profit | 148,821 | (358) | 281 | 6,566 | 155,310 | |||||
(a) | Costs related to the Fragrance Ingredients Rationalization. | |||||||||
(b) | Related to a partial plant closing in Asia. | |||||||||
(c) | Transaction costs related to acquisitions (Ottens Flavors and Lucas Meyer Cosmetics) as well as expense related to the fair value step up of inventory on the Ottens Flavors acquisition. | |||||||||
* | The Company tracks the amount of amortization recorded on recent acquisitions in order to monitor its progress with respect to its Vision 2020 goals. The following amounts were recorded with respect to recent acquisitions: $1.2M. |
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.
Second Quarter 2016 | ||||||||||||||||
Items Impacting Comparability | ||||||||||||||||
Adjusted Net Income and EPS | ||||||||||||||||
Reported (GAAP) | Restructuring and Other Charges (a) | Operational Improvement Initiative Costs (b) | Acquisition Related Costs (c) | Adjusted (Non-GAAP) | ||||||||||||
Income before taxes | 152,050 | 182 | 831 | 213 | 153,276 | |||||||||||
Taxes on income (d) | 35,317 | 35 | 208 | (102 | ) | 35,458 | ||||||||||
Net income | 116,733 | 147 | 623 | 315 | 117,818 | |||||||||||
Earnings per share - diluted | $ | 1.46 | $ | — | $ | 0.01 | $ | — | $ | 1.47 | ||||||
Refer to Adjusted Operating Income table for footnotes (a), (b) and (c). | ||||||||||||||||
(d) | The tax effects are calculated based upon the specific rate of the applicable jurisdiction of the items. |
Second Quarter 2015 | |||||||||||||||
Items Impacting Comparability | |||||||||||||||
Adjusted Net Income and Adjusted EPS | |||||||||||||||
Reported (GAAP) | Restructuring and Other Charges (a) | Operational Improvement Initiative Costs (b) | Acquisition Related Costs (c) | Adjusted (Non-GAAP) | |||||||||||
Income before taxes | 136,978 | (358) | 281 | 6,566 | 143,467 | ||||||||||
Taxes on income | 31,604 | (125) | 70 | 875 | 32,424 | ||||||||||
Net income | 105,374 | (233) | 211 | 5,691 | 111,043 | ||||||||||
Earnings per share - diluted | $ | 1.29 | $ | — | $ | — | $ | 0.07 | $ | 1.36 | |||||
Refer to Adjusted Operating Income table for footnotes (a), (b) and (c). |
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.
Second Quarter Year-to-Date 2016 | ||||||||||||
Items Impacting Comparability | ||||||||||||
Adjusted Operating Income | ||||||||||||
Reported (GAAP) |
Restructuring and Other Charges (a) |
Operational Improvement Initiative Costs (b) |
Acquisition Related Costs (c) |
Tax Settlements (d) |
Adjusted (Non-GAAP) |
|||||||
Operating profit | 331,694 | 283 | 1,099 | 1,249 | (1,482) | 332,843 | ||||||
(a) | Accelerated depreciation costs related to restructuring initiatives. | |||||||||||
(b) | Accelerated depreciation and severance costs in Asia. | |||||||||||
(c) | Expense related to the fair value step up of inventory and additional transaction costs related to acquisition of Lucas Meyer. | |||||||||||
(d) | Settlements due to favorable tax rulings in jurisdictions for which reserves were previously recorded for ongoing tax disputes. | |||||||||||
* |
The Company tracks the amount of amortization recorded on recent acquisitions in order to monitor its progress with respect to its Vision 2020 goals. The following amounts were recorded with respect to recent acquisitions: $4.3M related to Lucas Meyer and $3.2M related to Ottens Flavors. |
Second Quarter Year-to-Date 2015 | ||||||||||
Items Impacting Comparability | ||||||||||
Adjusted Operating Income | ||||||||||
Reported (GAAP) |
Restructuring and Other Charges (a) |
Operational Improvement Initiative Costs (b) |
Acquisition Related Costs (c) |
Adjusted (Non-GAAP) |
||||||
Operating profit | 310,613 | (170) | 562 | 7,065 | 318,070 | |||||
(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 related to the fair value step up of inventory on the Ottens Flavors acquisitions. | |||||||||
* | The Company tracks the amount of amortization recorded on recent acquisitions in order to monitor its progress with respect to its Vision 2020 goals. The following amounts were recorded with respect to recent acquisitions: $1.2M. |
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.
Second Quarter Year-to-Date 2016 | |||||||||||||||||||
Items Impacting Comparability | |||||||||||||||||||
Adjusted Net Income and EPS | |||||||||||||||||||
Reported (GAAP) |
Restructuring and Other Charges (a) |
Operational Improvement Initiative Costs (b) |
Acquisition Related Costs (c) |
Tax Settlements (d) | Adjusted (Non-GAAP) | ||||||||||||||
Income before taxes | 306,947 | 283 | 1,099 | 1,249 | (1,482 | ) | 308,096 | ||||||||||||
Taxes on income (e) | 71,610 | 54 | 275 | 266 | (411 | ) | 71,794 | ||||||||||||
Net income | 235,337 | 229 | 824 | 983 | (1,071 | ) | 236,302 | ||||||||||||
Earnings per share - diluted | $ | 2.93 | $ | — | $ | 0.01 | $ | 0.01 | $ | (0.01 | ) | $ | 2.94 | ||||||
Refer to Adjusted Operating Income table for footnotes (a), (b), (c) and (d). | |||||||||||||||||||
(e) | The tax effects are calculated based upon the specific rate of the applicable jurisdiction of the items. |
Second Quarter Year-to-Date 2015 | ||||||||||||||||||||
Items Impacting Comparability | ||||||||||||||||||||
Adjusted Net Income and Adjusted EPS | ||||||||||||||||||||
Reported (GAAP) |
Restructuring and Other Charges (a) |
Operational Improvement Initiative Costs (b) |
Acquisition Related Costs (c) |
Tax Settlements (d) |
Adjusted (Non-GAAP) |
|||||||||||||||
Income before taxes | 293,386 | (170 | ) | 562 | 7,065 | - | 300,843 | |||||||||||||
Taxes on income | 59,754 | (60 | ) | 140 | 1,050 | 10,478 | 71,362 | |||||||||||||
Net income | 233,632 | (110 | ) | 422 | 6,015 | (10,478 | ) | 229,481 | ||||||||||||
Earnings per share - diluted | $ | 2.86 | $ | — | $ | 0.01 | $ | 0.07 | $ | (0.13 | ) | $ | 2.81 | |||||||
Refer to Adjusted Operating Income table for footnotes (a), (b) and (c). | ||||||||||||||||||||
(d) | Settlements due to favorable tax rulings in jurisdictions for which reserves were previously recorded for ongoing tax disputes. |
View source version on businesswire.com: http://www.businesswire.com/news/home/20160808006190/en/
Source:
International Flavors & Fragrances Inc.
Michael DeVeau,
212-708-7164
VP, Global Corporate Communications & Investor
Relations
Michael.DeVeau@iff.com