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) |
May 9, 2016 |
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 May 9, 2016 reporting IFF's financial results for the quarter ended March 31, 2016.
An audio webcast to discuss the Company's first quarter 2016 financial results and full year 2016 outlook will be held tomorrow, May 10, 2016, at 10:00 a.m. EST. Interested parties can access the webcast and accompanying slide presentation on the Company's website at www.iff.com under the Investor 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 earnings per share, (ii) adjusted currency neutral earnings per share; (iii) adjusted operating profit, (iv) adjusted currency neutral operating profit, (v) adjusted EBITDA, (vi) adjusted EBITDA margin, (vii) adjusted sales and (viii) adjusted currency neutral sales. 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. 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. 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 May 9, 2016.
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. |
||
Dated: |
May 9, 2016 |
/s/ Alison A. Cornell |
Name: Alison A. Cornell |
||
|
||
Title: Executive Vice President and Chief Financial Officer |
Exhibit Index
Number |
Description |
99.1 |
Press Release of International Flavors & Fragrances Inc. dated May 9, 2016 |
Exhibit 99.1
IFF Reports Strong First Quarter 2016 Results
Sales +6%; Adjusted Operating Profit +7%; Adjusted EPS +11%, all on a currency neutral basis
NEW YORK--(BUSINESS WIRE)--May 9, 2016--International Flavors & Fragrances Inc. (NYSE:IFF) (Euronext Paris:IFF) reported financial results and strategic achievements for the first quarter ended April 1, 2016.
First Quarter 2016 Consolidated Summary: Growth vs. Prior Year ¹
Adjusted Currency Neutral |
Adjusted (Non-GAAP) | Reported (GAAP) | |||||||||||||||||||||||
Sales |
Operating |
EPS | Sales |
Operating |
EPS | Sales |
Operating |
EPS | |||||||||||||||||
Consolidated | 6% | 7% | 11% | 1% | 3% | 1% | 1% | 3% | (6)% | ||||||||||||||||
Acquisition Impact | 4% | 3% | 3% | 4% | 3% | 3% | 4% | 2% | 3% | ||||||||||||||||
¹ Schedules at the end of this release contain reconciliations of reported GAAP to non-GAAP metrics.
First Quarter 2016 Strategic Highlights: Currency Neutral Performance
Innovating Firsts: strengthen position and drive differentiation in priority R&D platforms
Win Where We Compete: achieve market leadership position in key markets, categories & customers
Become Our Customers’ Partner of Choice: attain commercial excellence
Strengthen and Expand the Portfolio: pursue value creation through collaborations & acquisitions
Management Commentary
“We are pleased with how we started 2016, in light of the volatile global operating environment and against our strongest year-ago growth comparison,” said Chairman and CEO Andreas Fibig. “Currency neutral sales growth was strong, improving 6%, with broad-based contributions from our acquisitions and organic growth. Performance in both Flavors and Fragrances accelerated sequentially with nearly all categories showing improvement versus the fourth quarter of 2015. In terms of profitability, we achieved strong gross profit performance driven primarily by volume growth, the benefits of productivity initiatives and contributions of acquisitions. This enabled us to strategically reinvest in our business while simultaneously delivering 7% adjusted operating profit and 11% adjusted EPS growth, all on a currency neutral basis.
“We also continue to make strides in our Vision 2020 strategy focused on building greater differentiation, accelerating profitable growth and increasing shareholder value. Innovation and R&D are crucial to our success, demonstrated by delivery systems in both Flavors & Fragrances continuing to be a growth driver in the quarter. In Fragrances, encapsulation-related sales grew high-single-digits, led by Fabric Care and Toiletries. In Flavors, our sweetness & savory modulation portfolio sales grew strong double-digits, led by Savory, Dairy and Beverage. Simultaneously, we commercialized two new flavor molecules and one new natural sweetness modulator to continue to build consumer-preferred solutions.
“We are pleased with our results in targeted growth areas such as North America, where we saw an 11% sales increase for the first quarter of 2016 driven by our recent acquisitions and strong growth in Fragrances. In the Middle East & Africa, the strong growth trends we experienced in 2015 continued into the first quarter, in which we saw a double digit increase, with strong performance in both flavors and fragrances. In Latin America, Flavors grew 8% on a currency neutral basis against a very strong 21% prior year comparison, driven in part by continued success leveraging innovation with key customers.
“In addition to the progress we have made from an innovation and market share perspective, we continue to position ourselves to be our customers’ partner of choice and go-to supplier. In the first quarter of 2016, IFF | Lucas Meyer won an innovation award at the In-Cosmetics for Miniporyl™. Our continued commitment to intertwine sustainability into all aspects of our business and corporate culture has led us to be rated gold by EcoVadis and ranked a top supplier. We also joined the World Business Council for Sustainable Development which is an organization of forward-thinking companies that stimulate the global business community to create a sustainable future for business, society and the environment.
“Our strategic acquisitions have also continued to perform well. IFF | Ottens Flavors posted solid growth on a standalone basis led mostly by regional customers and IFF | Lucas Meyer Cosmetics achieved double-digit growth on a standalone basis.
“Although we have started the year well, we continue to remain cautiously optimistic in our previously stated financial guidance for 2016 given the persistent volatility in the market.”
First Quarter 2016 Segment Summary: Growth vs. Prior Year
Currency Neutral (Non-GAAP) | Reported (GAAP) | |||||||||||
Sales |
Segment |
Sales |
Segment |
|||||||||
Fragrances: | 8% | 15% | 3% | 9% | ||||||||
Acquisition Impact | 4% | 2% | 3% | 2% | ||||||||
Flavors: | 4% | 1% | (1)% | (1)% | ||||||||
Acquisition Impact | 4% | 3% | 4% | 3% | ||||||||
Fragrances Business Unit
(Currency Neutral Performance unless otherwise noted)
Flavors Business Unit
(Currency Neutral Performance unless otherwise noted)
FY 2016 Guidance: Growth vs. Prior Year
The Company’s full year 2016 guidance:
Currency Neutral | FX Impact | Reported* | |||||||||||||||||||
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% | ~(3)% | 3.5 - 5.5% | ||||||||||||||||
* 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 May 11, 2016.
Audio Webcast
A live webcast to discuss the Company’s first quarter 2016 financial results will be held on May 10, 2016, at 10:00 a.m. EDT. Investors may access the webcast and accompanying slide presentation on the Company's IR website at ir.iff.com. For those unable to listen to the live webcast, a recorded version 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.
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 Securities and Exchange Commission filings, including the Company’s Annual Report on Form 10-K filed with the Commission on March 1, 2016. The Company wishes to caution readers that certain important factors may have affected 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 Company’s ability to implement its Vision 2020 strategy; (2) the Company’s ability to successfully identify and complete acquisitions in line with its Vision 2020 strategy, and to realize the anticipated benefits of those acquisitions; (3) the Company’s ability to effectively compete in its market, and to successfully develop new and competitive products that appeal to its customers and consumers; (4) changes in consumer preferences and demand for the Company’s products or a decline in consumer confidence and spending; (5) the Company’s ability to benefit from its investments and expansion in emerging markets; (6) the impact of currency fluctuations or devaluations in the principal foreign markets in which it operates, including the devaluation of the Euro; (7) the economic and political risks associated with the Company’s international operations, including challenging economic conditions in China and Latin America; (8) the impact of any failure of the Company’s key information technology systems or a breach of information security; (9) the Company’s ability to attract and retain talented employees; (10) the Company’s ability to comply with, and the costs associated with compliance with U.S. and foreign environmental protection laws; (11) the Company’s ability to realize expected cost savings and efficiencies from its profitability improvement initiative and other optimization activities; (12) volatility and increases in the price of raw materials, energy and transportation; (13) fluctuations in the quality and availability of raw materials; (14) the impact of a disruption in the Company’s supply chain or its relationship with its suppliers; (15) any adverse impact on the availability, effectiveness and cost of the Company’s hedging and risk management strategies; (16) the Company’s ability to successfully manage its working capital and inventory balances; (17) uncertainties regarding the outcome of, or funding requirements related to litigation or settlement of pending litigation uncertain tax positions or other contingencies; (18) the effect of legal and regulatory developments, as well as restrictions or costs that may be imposed on the Company or its operations by U.S. and foreign governments; (19) adverse changes in federal, state, local and international tax legislation or policies, including with respect to transfer pricing and state aid, and adverse results of tax audits, assessments, or disputes; and (19) changes in market conditions or governmental regulations relating to our pension and postretirement obligations. 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 revise any forward-looking statements, whether as a result of new information, future events, or otherwise.
Meet IFF
International Flavors & Fragrances Inc. (NYSE:IFF) (Euronext Paris: IFF) is a leading innovator of sensorial experiences that move the world. At the heart of our company, we are fueled by a sense of discovery, constantly asking “what if?”. That passion for exploration drives us to co-create unique products that consumers taste, smell, or feel in fine fragrances and beauty, detergents and household goods, as well as beloved foods and beverages. Our 6,700 team members globally take advantage of leading consumer insights, research and development, creative expertise, and customer intimacy to develop differentiated offerings for consumer products. Learn more at www.iff.com, Twitter , Facebook, Instagram, and LinkedIn.
International Flavors & Fragrances Inc. | |||||||||||||||
Consolidated Income Statement | |||||||||||||||
(Amounts in thousands except per diluted share data) | |||||||||||||||
(Unaudited) | |||||||||||||||
Three Months Ended March 31, | |||||||||||||||
2016 | 2015 | % Change | |||||||||||||
Net sales | $ | 783,312 | $ | 774,907 | 1 | % | |||||||||
Cost of goods sold | 423,103 | 428,630 | (1 | )% | |||||||||||
Gross profit | 360,209 | 346,277 | 4 | % | |||||||||||
Research and development expenses | 63,385 | 63,462 | (0 | )% | |||||||||||
Selling and administrative expenses | 123,543 | 118,995 | 4 | % | |||||||||||
Amortization of acquisition-related intangibles | 6,061 | 1,840 | 229 | % | |||||||||||
Restructuring and other charges, net | — | 187 | (100 | )% | |||||||||||
Operating profit | 167,220 | 161,793 | 3 | % | |||||||||||
Interest expense | 12,478 | 11,095 | 12 | % | |||||||||||
Other income | (154 | ) | (5,710 | ) | (97 | )% | |||||||||
Income before taxes | 154,896 | 156,408 | (1 | )% | |||||||||||
Taxes on income | 36,293 | 28,150 | 29 | % | |||||||||||
Net income | $ | 118,603 | $ | 128,258 | (8 | )% | |||||||||
Earnings per share - basic | $ | 1.48 | $ | 1.58 | |||||||||||
Earnings per share - diluted | $ | 1.47 | $ | 1.57 | |||||||||||
Average shares outstanding | |||||||||||||||
Basic | 79,666 | 80,654 | |||||||||||||
Diluted | 80,055 | 81,195 | |||||||||||||
International Flavors & Fragrances Inc. | ||||||||||
Condensed Consolidated Balance Sheet | ||||||||||
(Amounts in thousands) | ||||||||||
(Unaudited) | ||||||||||
March 31, | December 31, | |||||||||
2016 | 2015 | |||||||||
Cash & cash equivalents | $ | 528,877 | $ | 181,988 | ||||||
Receivables | 609,587 | 537,896 | ||||||||
Inventories | 600,696 | 589,019 | ||||||||
Other current assets | 152,369 | 146,981 | ||||||||
Total current assets | 1,891,529 | 1,455,884 | ||||||||
Property, plant and equipment, net | 733,939 | 732,794 | ||||||||
Goodwill and other intangibles, net | 1,253,265 | 1,247,393 | ||||||||
Other assets | 283,727 | 285,383 | ||||||||
Total assets | $ | 4,162,460 | $ | 3,721,454 | ||||||
Bank borrowings and overdrafts, and | ||||||||||
current portion of long-term debt | $ | 133,692 | $ | 132,349 | ||||||
Other current liabilities | 579,056 | 609,779 | ||||||||
Total current liabilities | 712,748 | 742,128 | ||||||||
Long-term debt | 1,369,955 | 937,844 | ||||||||
Non-current liabilities | 444,197 | 446,492 | ||||||||
Shareholders' equity | 1,635,560 | 1,594,990 | ||||||||
Total liabilities and shareholders' equity | $ | 4,162,460 | $ | 3,721,454 | ||||||
International Flavors & Fragrances Inc. | ||||||||||||
Consolidated Statement of Cash Flows | ||||||||||||
(Amounts in thousands) | ||||||||||||
(Unaudited) | ||||||||||||
Three Months Ended March 31, | ||||||||||||
2016 | 2015 | |||||||||||
Cash flows from operating activities: | ||||||||||||
Net income | $ | 118,603 | $ | 128,258 | ||||||||
Adjustments to reconcile to net cash provided by operating activities: | ||||||||||||
Depreciation and amortization | 26,697 | 19,985 | ||||||||||
Deferred income taxes | 4,193 | 13,932 | ||||||||||
(Gain) loss on disposal of assets | (2,713 | ) | 34 | |||||||||
Stock-based compensation | 5,930 | 5,387 | ||||||||||
Pension contributions | (7,410 | ) | (54,048 | ) | ||||||||
Changes in assets and liabilities: | ||||||||||||
Trade receivables | (60,655 | ) | (62,891 | ) | ||||||||
Inventories | 3,256 | 13,172 | ||||||||||
Accounts payable | (29,375 | ) | 4,618 | |||||||||
Accruals for incentive compensation | (11,598 | ) | (27,675 | ) | ||||||||
Other current payables and accrued expenses | 10,456 | 12,585 | ||||||||||
Other assets/liabilities, net | (25,769 | ) | (21,881 | ) | ||||||||
Net cash provided by operating activities | 31,615 | 31,476 | ||||||||||
Cash flows from investing activities: | ||||||||||||
Additions to property, plant and equipment | (22,512 | ) | (19,381 | ) | ||||||||
Proceeds from disposal of assets | 1,366 | 1,450 | ||||||||||
Net cash used in investing activities | (21,146 | ) | (17,931 | ) | ||||||||
Cash flows from financing activities: | ||||||||||||
Cash dividends paid to shareholders | (44,826 | ) | (37,971 | ) | ||||||||
Net change in revolving credit facility borrowings and overdrafts | (124,602 | ) | 265 | |||||||||
Deferred financing costs | (4,796 | ) | — | |||||||||
Proceeds from issuance of long-term debt | 555,559 | — | ||||||||||
Loss on pre-issuance hedges | (3,244 | ) | — | |||||||||
Proceeds from issuance of stock under stock plans | 163 | 227 | ||||||||||
Excess tax benefits on stock-based payments | 1,032 | 8,597 | ||||||||||
Purchase of treasury stock | (40,007 | ) | (10,660 | ) | ||||||||
Net cash provided by (used in) financing activities | 339,279 | (39,542 | ) | |||||||||
Effect of exchange rates changes on cash and cash equivalents | (2,859 | ) | (8,887 | ) | ||||||||
Net change in cash and cash equivalents | 346,889 | (34,884 | ) | |||||||||
Cash and cash equivalents at beginning of year | 181,988 | 478,573 | ||||||||||
Cash and cash equivalents at end of period | $ | 528,877 | $ | 443,689 | ||||||||
International Flavors & Fragrances Inc. | ||||||||||||
Business Unit Performance | ||||||||||||
(Amounts in thousands) | ||||||||||||
(Unaudited) | ||||||||||||
Three Months Ended March 31, | ||||||||||||
2016 | 2015 | |||||||||||
Net Sales | ||||||||||||
Flavors | $ | 372,508 | $ | 377,108 | ||||||||
Fragrances | 410,804 | 397,799 | ||||||||||
Consolidated | 783,312 | 774,907 | ||||||||||
Segment Profit | ||||||||||||
Flavors | 91,813 | 92,727 | ||||||||||
Fragrances | 89,237 | 81,598 | ||||||||||
Global Expenses | (13,870 | ) | (11,564 | ) | ||||||||
Restructuring and other charges, net | (101 | ) | (187 | ) | ||||||||
Acquisition and related costs | (1,037 | ) | (500 | ) | ||||||||
Operational improvement initiative costs | (268 | ) | (281 | ) | ||||||||
Spanish capital tax settlement | 1,446 | — | ||||||||||
Operating profit | 167,220 | 161,793 | ||||||||||
Interest Expense | (12,478 | ) | (11,095 | ) | ||||||||
Other income, net | 154 | 5,710 | ||||||||||
Income before taxes | $ | 154,896 | $ | 156,408 | ||||||||
Operating Margin | ||||||||||||
Flavors | 24.6 | % | 24.6 | % | ||||||||
Fragrances | 21.7 | % | 20.5 | % | ||||||||
Consolidated | 21.3 | % | 20.9 | % | ||||||||
International Flavors & Fragrances Inc. | ||||||||||||||||
Sales Performance by Region and Category | ||||||||||||||||
(Unaudited) | ||||||||||||||||
First Quarter 2016 vs. 2015 | ||||||||||||||||
Percentage Change in Sales by Region of Destination | ||||||||||||||||
Fine |
Consumer |
Ingredients | Total Frag. | Flavors | Total | |||||||||||
North America | Reported | 19% | 6% | 29% | 14% | 9% | 11% | |||||||||
EAME | Reported | -2% | -5% | 4% | -2% | -9% | -5% | |||||||||
Currency Neutral | 5% | 1% | 10% | 4% | -1% | 2% | ||||||||||
Latin America | Reported | -9% | 6% | -6% | 1% | -1% | 0% | |||||||||
Currency Neutral | 3% | 10% | -4% | 8% | 8% | 8% | ||||||||||
Greater Asia | Reported | -5% | 2% | 14% | 4% | -3% | 0% | |||||||||
Currency Neutral | -4% | 5% | 16% | 6% | 2% | 4% | ||||||||||
Total | Reported | 0% | 2% | 12% | 3% | -1% | 1% | |||||||||
Currency Neutral | 7% | 6% | 15% | 8% | 4% | 6% | ||||||||||
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) | ||||||||
Q1 Consolidated |
Sales |
Operating |
EPS | |||||
% Change - Reported (GAAP) | 1% | 3% | -6% | |||||
Items Impacting Comparability | 0% | 0% | 7% | |||||
% Change - Adjusted (Non-GAAP) | 1% | 3% | 1% | |||||
Currency Impact | 5% | 4% | 10% | |||||
% Change - Currency Neutral (Adjusted) | 6% | 7% | 11% | |||||
Q1 Flavors |
Sales |
Segment |
||||||
% Change - Reported (GAAP) | -1% | -1% | ||||||
Currency Impact | 5% | 2% | ||||||
% Change - Currency Neutral | 4% | 1% | ||||||
Q1 Fragrances |
Sales |
Segment |
||||||
% Change - Reported (GAAP) | 3% | 9% | ||||||
Currency Impact | 5% | 6% | ||||||
% Change - Currency Neutral | 8% | 15% | ||||||
International Flavors & Fragrances Inc.
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.
First Quarter 2016 | ||||||||||||||||||||||||
Items Impacting Comparability | ||||||||||||||||||||||||
Reported |
Restructuring |
Operational |
Acquisition |
Spanish |
Adjusted |
|||||||||||||||||||
Net sales | 783,312 | |||||||||||||||||||||||
Cost of goods sold | 423,103 | (101 | ) | (a) | (268 | ) | (b) | (889 | ) | (c) | ||||||||||||||
Gross profit | 360,209 | 101 | 268 | 889 | 361,467 | |||||||||||||||||||
Research and development expenses | 63,385 | |||||||||||||||||||||||
Selling and administrative expenses | 123,543 | (148 | ) | (c) | 1,446 | (d) | 124,841 | |||||||||||||||||
RSA Expense | 186,928 | |||||||||||||||||||||||
Amortization of acquisition-related intangibles | 6,061 | |||||||||||||||||||||||
Restructuring and other charges, net | — | |||||||||||||||||||||||
Operating profit | 167,220 | 101 | 268 | 1,037 | (1,446 | ) | 167,180 | |||||||||||||||||
Interest expense | 12,478 | |||||||||||||||||||||||
Other income | (154 | ) | ||||||||||||||||||||||
Income before taxes | 154,896 | 101 | 268 | 1,037 | (1,446 | ) | 154,856 | |||||||||||||||||
Taxes on income | 36,293 | 19 | 67 | 367 | (402 | ) | 36,344 | |||||||||||||||||
Net income | 118,603 | 82 | 201 | 670 | (1,044 | ) | 118,512 | |||||||||||||||||
Earnings per share - diluted | $ | 1.47 | $ | — | $ | — | $ | 0.01 | $ | (0.01 | ) | $ | 1.47 | |||||||||||
(a) | Accelerated depreciation related to a partial plant closing in Europe. | |||||||||||||||||||||||
(b) | Accelerated depreciation related to a partial plant closing in Asia. | |||||||||||||||||||||||
(c) | Expense related to the fair value step up of inventory and additional transaction costs related to acquisition of Lucas Meyer. | |||||||||||||||||||||||
(d) | Amounts expected to be received related to the Spanish capital tax settlement. | |||||||||||||||||||||||
* | 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: $2.6M related to Lucas Meyer and $1.6M related to Ottens Flavors. | |||||||||||||||||||||||
First Quarter 2015 | ||||||||||||||||||||||||
Items Impacting Comparability | ||||||||||||||||||||||||
Reported |
Restructuring |
Operational |
Tax |
Acquisition |
Adjusted |
|||||||||||||||||||
Net sales | 774,907 | |||||||||||||||||||||||
Cost of goods sold | 428,630 | (281 | ) | (b) | ||||||||||||||||||||
Gross profit | 346,277 | 281 | 346,558 | |||||||||||||||||||||
Research and development expenses | 63,462 | |||||||||||||||||||||||
Selling and administrative expenses | 118,995 | (500 | ) | (d) | 120,335 | |||||||||||||||||||
RSA Expense | 182,457 | |||||||||||||||||||||||
Amortization of acquisition-related intangibles | 1,840 | |||||||||||||||||||||||
Restructuring and other charges, net | 187 | (187 | ) | (a) | ||||||||||||||||||||
Operating profit | 161,793 | 187 | 281 | 500 | 162,761 | |||||||||||||||||||
Interest expense | 11,095 | |||||||||||||||||||||||
Other income | (5,710 | ) | ||||||||||||||||||||||
Income before taxes | 156,408 | 187 | 281 | 500 | ||||||||||||||||||||
Taxes on income | 28,150 | 66 | 70 | 10,478 | (c) | 175 | 38,939 | |||||||||||||||||
Net income | 128,258 | 121 | 211 | (10,478 | ) | 325 | 118,437 | |||||||||||||||||
Earnings per share - diluted | $ | 1.57 | $ | — | $ | — | $ | (0.13 | ) | $ | — | $ | 1.45 | (e) | ||||||||||
(a) | Costs related to the Fragrance Ingredients Rationalization. | |||||||||||||||||||||||
(b) | Related to a partial plant closing in Asia. | |||||||||||||||||||||||
(c) | Settlements due to favorable tax rulings in jurisdictions for which reserves were previously recorded for ongoing tax disputes. | |||||||||||||||||||||||
(d) | Related to the acquisition of Ottens Flavors. | |||||||||||||||||||||||
(e) | The sum of these items do not foot due to rounding. |
CONTACT:
International Flavors & Fragrances Inc.
Michael DeVeau
VP,
Global Corporate Communications & Investor Relations
212.708.7164
Michael.DeVeau@iff.com