UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
______________
FORM 8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) |
August 6, 2013 |
INTERNATIONAL FLAVORS & FRAGRANCES INC. |
(Exact Name of Registrant as Specified in Charter) |
New York |
1-4858 |
13-1432060 |
(State or Other Jurisdiction of Incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification No.) |
521 West 57th Street, New York, New York |
10019 |
(Address of Principal Executive Offices) |
(Zip Code) |
Registrant’s telephone number, including area code | (212) 765-5500 |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
⃞ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
⃞ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
⃞ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
⃞ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02. Results of Operations and Financial Condition
Attached and being furnished hereby as Exhibit 99.1 is a copy of a press release of International Flavors & Fragrances Inc. ("IFF" or the "Company") dated August 6, 2013 reporting IFF's financial results for the quarter ended June 30, 2013.
An audio webcast to discuss the Company's first quarter 2013 financial results and full year 2013 outlook will be held today, August 6, 2013, at 10:00 a.m. EDT. Interested parties can access the webcast and accompanying slide presentation on the Company's website at www.iff.com under the Investor Relations section. For those unable to listen to the live broadcast, a replay will be available on the Company's website approximately one hour after the event and will remain available on the IFF website for one year.
Non-GAAP financial measures: In the attached press release and the referenced audio webcast, the Company uses the following non-GAAP financial operating measures: (i) adjusted EPS, (ii) adjusted operating profit, (iii) adjusted operating profit margin, (iv) adjusted gross profit, (v) adjusted gross margin, (vi) local currency sales, (vii) LFL, or like-for-like, sales and (viii) adjusted effective tax rate. Such information is supplemental to information presented in accordance with GAAP and is not intended to represent a presentation in accordance with GAAP. In discussing the Company’s historical and expected future results and financial condition, the Company believes it is meaningful for investors to be made aware of and to be assisted in a better understanding of, on a period-to-period comparable basis, financial amounts both including and excluding these identified items, as well as the impact of exchange rate fluctuations and the exit of certain low margin sales activities on operating results and financial condition. The Company believes such additional non-GAAP information provides investors with an overall perspective of the period-to-period performance of our business. In addition, management internally reviews each of these non-GAAP measures to evaluate performance on a comparative period-to-period basis in terms of absolute performance, trends and expected future performance with respect to our business. A material limitation of these non-GAAP measures is that such measures do not reflect actual GAAP amounts; for example, charges relating to Spanish tax assessments and costs associated with operational improvements include actual cash outlays that impact cash flows. The Company compensates for such limitations by presenting the reconciliations contained in the attached press release to the most directly comparable GAAP measure. These non-GAAP measures may not be comparable to similarly titled measures used by other companies.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits
99.1 Press Release of International Flavors & Fragrances Inc., dated August 6, 2013.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
INTERNATIONAL FLAVORS & FRAGRANCES INC. |
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Dated: |
August 6, 2013 |
/s/ Kevin C. Berryman |
Name: Kevin C. Berryman |
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Title: Executive Vice President and Chief |
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Financial Officer |
Exhibit Index
Number |
Description |
99.1 |
Press Release of International Flavors & Fragrances Inc. dated August 6, 2013 |
Exhibit 99.1
IFF Reports Second Quarter 2013 Like-for-Like Sales Growth of 8% and Adjusted EPS of $1.14 per Diluted Share
Local Currency Sales Increase 6%; Reported Sales Increase 5%
Adjusted Operating Profit Margins Expand 90 basis points to 19.2%
NEW YORK--(BUSINESS WIRE)--August 6, 2013--International Flavors & Fragrances Inc. (NYSE: IFF), a leading global creator of flavors and fragrances for consumer products, today reported financial results for the second quarter ended June 30, 2013.
Second Quarter 2013 Results
Please see the information and schedules at the end of this release for reconciliations of GAAP to non-GAAP financial metrics.
Management Commentary
Doug Tough, Chairman and Chief Executive Officer of IFF said, “IFF achieved strong operating results this quarter, with both business units achieving double-digit growth in segment profit, due to the continued disciplined execution of our strategy. By focusing on expanding our geographic reach, strengthening our innovation platform and maximizing the value of our portfolio, we achieved strong top-line growth and margin expansion. Our profitability metrics, including gross profit margin, adjusted operating profit margin and adjusted net income margin, were all ahead of the prior year figures.”
Mr. Tough continued, “Our operating performance was partially offset by foreign exchange losses on working capital, resulting in adjusted EPS growth of 6%. When combined with our growth in the first quarter of 2013, our adjusted EPS for the first half of the year increased 12% over the prior year comparable figure.”
Mr. Tough continued, “Looking at our top line results, local currency sales growth of 6% reflects double-digit growth in the emerging markets - which grew at twice the rate of the developed markets, as well as a high level of new wins in both businesses, resulting from our strong culture of innovation. On a like-for-like basis, total consolidated sales growth of 8% was a result of 8% growth in Fragrance and 8% growth in Flavors, and demonstrates our ability to provide customers with value-added innovative products. This strong broad-based volume growth, when combined with a stronger mix of business, moderating input costs and ongoing implementation of our cost-containment initiatives, resulted in continued margin progression.”
Mr. Tough concluded, “Looking forward, we expect to be able to deliver continued momentum in the second half of the year, noting that we are entering into a more challenging period on a comparable basis. We are optimistic about our ability to deliver local currency sales, adjusted operating profit and EPS growth for the full year in line with our long term financial targets.”
Second Quarter 2013 Operating Highlights
Subsequent Events
Fragrances Business Unit
Flavors Business Unit
Audio Webcast
A live webcast to discuss the Company's second quarter financial results and full year outlook will be held today, August 6, 2013, at 10:00 a.m. ET. Investors may access the webcast and accompanying slide presentation on the Company's website at www.iff.com under the Investor Relations section. For those unable to listen to the live broadcast, a recorded version of the webcast will be made available on the Company's website approximately one hour after the event and will remain available on IFF’s website for one year.
About IFF
International Flavors & Fragrances Inc. (NYSE: IFF) is a leading global creator of flavors and fragrances used in a wide variety of consumer products. Consumers experience these unique scents and tastes in fine fragrances and beauty care, detergents and household goods, as well as beverages, sweet goods and food products. The Company leverages its competitive advantages of consumer insight, research and development, creative expertise, and customer intimacy to provide customers with innovative and differentiated product offerings. A member of the S&P 500 Index, IFF has more than 5,800 employees working in 32 countries worldwide. For more information, please visit our website at www.iff.com.
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 the Company’s expectations concerning (i) its results, performance and the growth opportunities for the business in 2013; (ii) its ability to drive innovation into its product portfolio; and (iii) its ability to execute on its long-term strategic plan and reach its long-term goals. These forward-looking statements are qualified in their entirety by cautionary statements and risk factor disclosures contained in the Company’s Securities and Exchange Commission filings, including the Company’s Annual Report on Form 10-K filed with the Commission on February 26, 2013. The Company wishes to caution readers that certain important factors may affect and could in the future affect the Company’s actual results and could cause the Company’s actual results for subsequent periods to differ materially from those expressed in any forward-looking statements made by or on behalf of the Company. With respect to the Company’s expectations regarding these statements, such factors include, but are not limited to: (1) the economic climate for the Company’s industry and demand for the Company’s products; (2) the ability of the Company to successfully implement its restructuring initiative and achieve the estimated savings; (3) fluctuations in the price, quality and availability of raw materials; (4) decline in consumer confidence and spending; (5) changes in consumer preferences; (6) the Company’s ability to predict the short and long-term effects of global economic conditions; (7) movements in interest rates; (8) the effects of any unanticipated costs and construction or start-up delays in the expansion of any of the Company’s facilities; (9) the Company’s ability to implement its business strategy, including the achievement of anticipated cost savings, profitability, realization of price increases and growth targets; (10) the Company’s ability to successfully develop new and competitive products and enter and expand its sales in new and other emerging markets; (11) the impact of currency fluctuations or devaluations in the Company’s principal foreign markets; (12) any adverse impact on the availability, effectiveness and cost of the Company’s hedging and risk management strategies; (13) uncertainties regarding the outcome of, or funding requirements, related to litigation or settlement of pending litigation, uncertain tax positions or other contingencies, including the final assessment for the Company’s Spanish subsidiaries’ 2011 tax return; (14) the impact of possible pension funding obligations and increased pension expense, particularly as a result of changes in asset returns or discount rates, on the Company’s cash flow and results of operations; (15) the effect of legal and regulatory proceedings, as well as restrictions imposed on the Company, its operations or its representatives by U.S. and foreign governments; (16) adverse changes in federal, state, local and foreign tax legislation or adverse results of tax audits, assessments, or disputes; (17) the direct and indirect costs and other financial impact that may result from any business disruptions due to political instability, armed hostilities, incidents of terrorism, natural disasters or the responses to or repercussion from any of these or similar events or conditions; (18) the Company’s ability to quickly and effectively implement its disaster recovery and crisis management plans; and (19) adverse changes due to accounting rules or regulations. New risks emerge from time to time and it is not possible for management to predict all such risk factors or to assess the impact of such risks on the Company’s business. Accordingly, the Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.
International Flavors & Fragrances Inc. |
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Consolidated Income Statement |
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(Amounts in thousands except per share data) |
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(Unaudited) |
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Three Months Ended | Six Months Ended | ||||||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||||||
2013 | 2012 | % Change | 2013 | 2012 | % Change | ||||||||||||||||||
Net sales | $ | 757,635 | $ | 721,317 | 5 | $ | 1,485,471 | $ | 1,431,933 | 4 | |||||||||||||
Cost of goods sold | 423,649 | 419,774 | 1 | 840,125 | 844,991 | (1 | ) | ||||||||||||||||
Gross margin | 333,986 | 301,543 | 11 | 645,346 | 586,942 | 10 | |||||||||||||||||
Research and development | 64,672 | 56,400 | 15 | 123,774 | 113,809 | 9 | |||||||||||||||||
Selling and administrative | 124,813 | 112,835 | 11 | 239,468 | 218,249 | 10 | |||||||||||||||||
Restructuring and other charges | 2,105 | - | 2,105 | 1,668 | |||||||||||||||||||
Interest expense | 12,860 | 10,613 | 24,013 | 21,423 | |||||||||||||||||||
Other income, net | (11,209 | ) | (845 | ) | (12,282 | ) | (1,088 | ) | |||||||||||||||
Pretax income | 140,745 | 122,540 | 15 | 268,268 | 232,881 | 15 | |||||||||||||||||
Income taxes | 38,423 | 33,944 | 13 | 75,248 | 63,230 | 19 | |||||||||||||||||
Net income | $ | 102,322 | $ | 88,596 | 15 | $ | 193,020 | $ | 169,651 | 14 | |||||||||||||
Earnings per share - basic | $ | 1.25 | $ | 1.09 | $ | 2.36 | $ | 2.08 | |||||||||||||||
Earnings per share - diluted | $ | 1.24 | $ | 1.08 | $ | 2.34 | $ | 2.06 | |||||||||||||||
Average shares outstanding | |||||||||||||||||||||||
Basic | 81,309 | 81,095 | 81,300 | 80,938 | |||||||||||||||||||
Diluted | 82,041 | 81,782 | 82,018 | 81,727 | |||||||||||||||||||
International Flavors & Fragrances Inc. |
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Condensed Consolidated Balance Sheet |
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(Amounts in thousands) |
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(Unaudited) |
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June 30, | December 31, | |||||||
2013 | 2012 | |||||||
Cash & cash equivalents | $ | 365,897 | $ | 324,422 | ||||
Receivables | 541,607 | 499,443 | ||||||
Inventories | 512,784 | 540,658 | ||||||
Other current assets | 213,605 | 208,164 | ||||||
Total current assets | 1,633,893 | 1,572,687 | ||||||
Property, plant and equipment, net | 651,011 | 654,641 | ||||||
Goodwill and other intangibles, net | 699,234 | 702,270 | ||||||
Other assets | 324,783 | 316,594 | ||||||
Total assets | $ | 3,308,921 | $ | 3,246,192 | ||||
Bank borrowings and overdrafts, and current portion of long-term debt |
$ | 100,175 | $ | 150,071 | ||||
Other current liabilities | 466,649 | 479,807 | ||||||
Total current liabilities | 566,824 | 629,878 | ||||||
Long-term debt | 932,796 | 881,104 | ||||||
Non-current liabilities | 434,871 | 482,655 | ||||||
Shareholders' equity | 1,374,430 | 1,252,555 | ||||||
Total liabilities and shareholders' equity | $ | 3,308,921 | $ | 3,246,192 | ||||
International Flavors & Fragrances Inc. |
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Consolidated Statement of Cash Flows |
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(Amounts in thousands) |
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(Unaudited) |
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Six Months Ended | ||||||||
June 30, | ||||||||
2013 | 2012 | |||||||
Cash flows from operating activities: | ||||||||
Net income | $ | 193,020 | $ | 169,651 | ||||
Adjustments to reconcile to net cash provided by operations: | ||||||||
Depreciation and amortization | 39,807 | 37,094 | ||||||
Deferred income taxes | 4,971 | (13,786 | ) | |||||
Gain on disposal of assets | (18,021 | ) | (1,525 | ) | ||||
Stock-based compensation | 14,050 | 11,272 | ||||||
Pension settlement/curtailment | - | 874 | ||||||
Changes in assets and liabilities | ||||||||
Current receivables | (60,753 | ) | (58,035 | ) | ||||
Inventories | 14,694 | (5,643 | ) | |||||
Accounts payable | (10,198 | ) | (21,214 | ) | ||||
Accruals for incentive compensation | (23,076 | ) | 2,019 | |||||
Other current payables and accrued expenses | 13,919 | 26,523 | ||||||
Changes in other assets/liabilities | (50,370 | ) | (11,864 | ) | ||||
Net cash provided by (used in) operating activities | 118,043 | 135,366 | ||||||
Cash flows from investing activities: | ||||||||
Additions to property, plant and equipment | (60,689 | ) | (53,833 | ) | ||||
Purchase of insurance contracts | - | (1,035 | ) | |||||
Maturities of net investment hedge | 626 | 1,960 | ||||||
Proceeds from termination of life insurance contracts | 793 | - | ||||||
Proceeds from disposal of assets | 16,467 | 124 | ||||||
Net cash used in investing activities | (42,803 | ) | (52,784 | ) | ||||
Cash flows from financing activities: | ||||||||
Cash dividends paid to shareholders | (27,733 | ) | (50,206 | ) | ||||
Net change in revolving credit facility borrowings and overdrafts | (284,061 | ) | (26,034 | ) | ||||
Proceeds from long-term debt | 297,786 | - | ||||||
Deferred financing costs | (2,786 | ) | - | |||||
Proceeds from issuance of stock under stock plans | 3,566 | 5,400 | ||||||
Excess tax benefits on stock-based payments | 5,172 | 6,513 | ||||||
Purchase of treasury stock | (19,174 | ) | - | |||||
Net cash (used in) provided by financing activities | (27,230 | ) | (64,327 | ) | ||||
Effect of exchange rates changes on cash and cash equivalents | (6,535 | ) | (1,897 | ) | ||||
Net change in cash and cash equivalents | 41,475 | 16,358 | ||||||
Cash and cash equivalents at beginning of year | 324,422 | 88,279 | ||||||
Cash and cash equivalents at end of period | $ | 365,897 | $ | 104,637 | ||||
International Flavors & Fragrances Inc. |
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Business Unit Performance |
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(Amounts in thousands) |
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(Unaudited) |
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Three Months Ended | Six Months Ended | ||||||||||||||||
June 30, | June 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Net Sales | |||||||||||||||||
Flavors | $ | 374,041 | $ | 361,371 | $ | 730,401 | $ | 711,258 | |||||||||
Fragrances | 383,594 | 359,946 | 755,070 | 720,675 | |||||||||||||
Consolidated | 757,635 | 721,317 | 1,485,471 | 1,431,933 | |||||||||||||
Segment Profit | |||||||||||||||||
Flavors | 89,919 | 80,633 | 172,955 | 160,313 | |||||||||||||
Fragrances | 71,913 | 63,635 | 140,270 | 119,716 | |||||||||||||
Global Expenses | (17,169 | ) | (11,960 | ) | (29,761 | ) | (25,145 | ) | |||||||||
Restructuring and other charges, net | (2,105 | ) | - | (2,105 | ) | (1,668 | ) | ||||||||||
Operational improvement initiative costs | (162 | ) | - | (1,360 | ) | - | |||||||||||
Operating profit | 142,396 | 132,308 | 279,999 | 253,216 | |||||||||||||
Interest Expense | (12,860 | ) | (10,613 | ) | (24,013 | ) | (21,423 | ) | |||||||||
Other income (expense), net | 11,209 | 845 | 12,282 | 1,088 | |||||||||||||
Income before taxes | $ | 140,745 | $ | 122,540 | $ | 268,268 | $ | 232,881 | |||||||||
Operating Margin | |||||||||||||||||
Flavors | 24.0 | % | 22.3 | % | 23.7 | % | 22.5 | % | |||||||||
Fragrances | 18.7 | % | 17.7 | % | 18.6 | % | 16.6 | % | |||||||||
Consolidated | 18.8 | % | 18.3 | % | 18.8 | % | 17.7 | % | |||||||||
International Flavors & Fragrances Inc. |
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Sales Performance by Region and Category |
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(Unaudited) |
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Second Quarter 2013 vs. 2012 |
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Percentage Change in Sales by Region of Destination | ||||||||||||||||||||
Fine & |
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Beauty Care |
Functional | Ingredients | Total Frag. | Flavors | Total | |||||||||||||||
North America | Reported | 13 | % | -5 | % | 2 | % | 3 | % | 2 | % | 2 | % | |||||||
EAME | Reported | 12 | % | 3 | % | -1 | % | 6 | % | 3 | % | 5 | % | |||||||
Local Currency | 13 | % | 4 | % | 0 | % | 7 | % | 5 | % | 6 | % | ||||||||
Latin America | Reported | 10 | % | 13 | % | 0 | % | 11 | % | 1 | % | 7 | % | |||||||
Local Currency | 14 | % | 16 | % | 1 | % | 14 | % | 3 | % | 10 | % | ||||||||
Greater Asia | Reported | 7 | % | 12 | % | -16 | % | 7 | % | 6 | % | 7 | % | |||||||
Local Currency | 7 | % | 13 | % | -11 | % | 8 | % | 8 | % | 8 | % | ||||||||
Total | Reported | 11 | % | 6 | % | -2 | % | 7 | % | 4 | % | 5 | % | |||||||
Local Currency | 13 | % | 7 | % | -1 | % | 8 | % | 5 | % | 6 | % | ||||||||
First Six Months 2013 vs. First Six Months 2012 | ||||||||||||||||||||
Percentage Change in Sales by Region of Destination | ||||||||||||||||||||
Fine & |
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Beauty Care |
Functional | Ingredients | Total Frag. | Flavors | Total | |||||||||||||||
North America | Reported | 3 | % | -2 | % | -5 | % | -1 | % | -2 | % | -1 | % | |||||||
EAME | Reported | 4 | % | 6 | % | -7 | % | 3 | % | 4 | % | 3 | % | |||||||
Local Currency | 4 | % | 6 | % | -7 | % | 3 | % | 5 | % | 4 | % | ||||||||
Latin America | Reported | 15 | % | 13 | % | -7 | % | 12 | % | 0 | % | 8 | % | |||||||
Local Currency | 19 | % | 14 | % | -6 | % | 15 | % | 3 | % | 11 | % | ||||||||
Greater Asia | Reported | 9 | % | 12 | % | -11 | % | 8 | % | 5 | % | 6 | % | |||||||
Local Currency | 9 | % | 13 | % | -7 | % | 9 | % | 7 | % | 8 | % | ||||||||
Total | Reported | 7 | % | 8 | % | -7 | % | 5 | % | 3 | % | 4 | % | |||||||
Local Currency | 8 | % | 8 | % | -6 | % | 5 | % | 4 | % | 5 | % |
Note: Local currency sales growth is calculated by translating prior year sales at the exchange rates used for the corresponding 2013 period.
International Flavors & Fragrances Inc. |
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Reconciliation of Like-for-Like Sales Growth |
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(Unaudited) |
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% Change in Sales for the Three Months Ended June 30, 2013 | |||||||||||||
Local Currency |
Exit of Low- |
Like-for-Like |
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Reported Sales |
Sales Growth |
Margin Sales |
Sales Growth |
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Growth |
(1) |
Activities |
(2) |
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Total Company | 5 | % | 6 | % | 2 | % | 8 | % | |||||
Flavors: | |||||||||||||
North America | 2 | % | 2 | % | 9 | % | 11 | % | |||||
EAME | 3 | % | 5 | % | 0 | % | 5 | % | |||||
Latin America | 1 | % | 3 | % | 8 | % | 11 | % | |||||
Greater Asia | 6 | % | 8 | % | 0 | % | 8 | % | |||||
Total Flavors | 4 | % | 5 | % | 3 | % | 8 | % | |||||
% Change in Sales for the Six Months Ended June 30, 2013 | |||||||||||||
Local Currency |
Exit of Low- |
Like-for-Like |
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Reported Sales |
Sales Growth |
Margin Sales |
Sales Growth |
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Growth |
(1) |
Activities |
(2) |
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Total Company | 4 | % | 5 | % | 1 | % | 6 | % | |||||
Flavors: | |||||||||||||
North America | -2 | % | -2 | % | 10 | % | 8 | % | |||||
EAME | 4 | % | 5 | % | 1 | % | 6 | % | |||||
Latin America | 0 | % | 3 | % | 5 | % | 8 | % | |||||
Greater Asia | 5 | % | 7 | % | 0 | % | 7 | % | |||||
Total Flavors | 3 | % | 4 | % | 3 | % | 7 | % | |||||
(1) |
Local currency sales growth is calculated by translating prior year sales at the exchange rates used for the corresponding 2013 period. |
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(2) |
Like-for-like is a non-GAAP metric that excludes the impact of exiting low-margin sales activities and foreign exchange. |
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International Flavors & Fragrances Inc.
Reconciliation
of Income
(Amounts in thousands)
(Unaudited)
The following information and schedules provide reconciliation information between reported GAAP amounts and certain adjusted amounts. This information and schedules is 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 2013 | |||||||||||||||||||||||
Items Impacting Comparability | |||||||||||||||||||||||
Restructuring |
Operational |
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Reported |
and Other |
Improvement |
Gain on Asset |
Adjusted |
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(GAAP) |
Charges |
Initiative Costs |
Sale |
(Non-GAAP) |
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Net Sales | 757,635 | - | |||||||||||||||||||||
Cost of Goods Sold | 423,649 | (833 | ) | (a) | (162 | ) | (b) | ||||||||||||||||
Gross Profit | 333,986 | 833 | 162 | ||||||||||||||||||||
Research and Development | 64,672 | - | - | ||||||||||||||||||||
Selling and Administrative | 124,813 | - | - | ||||||||||||||||||||
RSA Expense | 189,485 | - | - | ||||||||||||||||||||
Restructuring and other charges, net | 2,105 | (2,105 | ) | (a) | - | ||||||||||||||||||
Operating Profit | 142,396 | 2,938 | 162 | 145,496 | |||||||||||||||||||
Interest Expense | 12,860 | - | - | ||||||||||||||||||||
Other (Income) expense, net | (11,209 | ) | - | - | 16,093 | (c) | 4,884 | ||||||||||||||||
Income before taxes | 140,745 | 2,938 | 162 | (16,093 | ) | 127,752 | |||||||||||||||||
Taxes on Income | 38,423 | 1,028 | 36 | (5,633 | ) | 33,854 | |||||||||||||||||
Net Income | 102,322 | 1,910 | 126 | (10,460 | ) | 93,898 | |||||||||||||||||
Earnings per share - diluted | $ | 1.24 | $ | 0.02 | $ | 0.00 | ($0.13 | ) | $ | 1.14 | (d) |
(a) | Costs related to the Fragrance Ingredients Rationalization | |
(b) | Related to plant closing in Europe and partial closing in Asia | |
(c) | Represents a gain on sale of a non-operating asset | |
(d) | The sum of these items do not foot due to rounding | |
Second Quarter 2012:
In the second quarter of 2012 there were no items impacting comparability.
International Flavors & Fragrances Inc.
Reconciliation
of Income
(Amounts in thousands)
(Unaudited)
The following information and schedules provide reconciliation information between reported GAAP amounts and certain adjusted amounts. This information and schedules is 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 2013 | |||||||||||||||||||||||||||
Items Impacting Comparability | |||||||||||||||||||||||||||
Restructuring |
Operational |
||||||||||||||||||||||||||
Reported |
and Other |
Improvement |
Spanish Tax |
Gain on Asset |
Adjusted |
||||||||||||||||||||||
(GAAP) |
Charges |
Initiative Costs |
Charge |
Sale |
(Non-GAAP) |
||||||||||||||||||||||
Net Sales | 1,485,471 | - | - | ||||||||||||||||||||||||
Cost of Goods Sold | 840,125 | (833 | ) | (a) | (1,360 | ) | (b) | - | |||||||||||||||||||
Gross Profit | 645,346 | 833 | 1,360 | - | |||||||||||||||||||||||
Research and Development | 123,774 | - | - | ||||||||||||||||||||||||
Selling and Administrative | 239,468 | - | - | ||||||||||||||||||||||||
RSA Expense | 363,242 | - | - | ||||||||||||||||||||||||
Restructuring and other charges, net | 2,105 | (2,105 | ) | (a) | - | ||||||||||||||||||||||
Operating Profit | 279,999 | 2,938 | 1,360 | - | 284,297 | ||||||||||||||||||||||
Interest Expense | 24,013 | - | - | ||||||||||||||||||||||||
Other (Income) expense, net | (12,282 | ) | - | - | 16,093 | (d) | 3,811 | ||||||||||||||||||||
Income before taxes | 268,268 | 2,938 | 1,360 | - | (16,093 | ) | 256,473 | ||||||||||||||||||||
Taxes on Income | 75,248 | 1,029 | 315 | (6,230 | ) | (c) | (5,633 | ) | 64,729 | ||||||||||||||||||
Net Income | 193,020 | 1,909 | 1,045 | 6,230 | (10,460 | ) | 191,744 | ||||||||||||||||||||
Earnings per share - diluted | $ | 2.34 | $ | 0.02 | $ | 0.01 | $ | 0.08 | ($0.13 | ) | $ | 2.32 |
(a) | Costs related to the Fragrance Ingredients Rationalization | |
(b) | Related to plant closing in Europe and partial closing in Asia | |
(c) | Spanish tax charge related to the 2002-2003 ruling | |
(d) | Represents a gain on sale of a non-operating asset | |
Second Quarter Year-to-Date 2012 | ||||||||||||||
Items Impacting Comparability | ||||||||||||||
Restructuring |
||||||||||||||
Reported |
and Other |
Adjusted |
||||||||||||
(GAAP) |
Charges |
(Non-GAAP) |
||||||||||||
Net Sales | 1,431,933 | - | ||||||||||||
Cost of Goods Sold | 844,991 | - | ||||||||||||
Gross Profit | 586,942 | - | ||||||||||||
Research and Development | 113,809 | - | ||||||||||||
Selling and Administrative | 218,249 | |||||||||||||
RSA Expense | 332,058 | |||||||||||||
Restructuring and other charges, net | 1,668 | (1,668 | ) | (a) | ||||||||||
Operating Profit | 253,216 | 1,668 | 254,884 | |||||||||||
Interest Expense | 21,423 | - | ||||||||||||
Other (income) expense, net | (1,088 | ) | - | |||||||||||
Income before taxes | 232,881 | 1,668 | 234,549 | |||||||||||
Taxes on Income | 63,230 | 621 | 63,851 | |||||||||||
Net Income | 169,651 | 1,047 | 170,698 | |||||||||||
Earnings per share - diluted | $ | 2.06 | (b) | $ | 0.01 | (b) | $ | 2.08 |
(a) Related to the restructuring program announced in Q1 2012
(b)
The sum of these items do not foot due to rounding
CONTACT:
International Flavors & Fragrances Inc.
Shelley
Young, 212-708-7271
Director, Investor Relations