Achieved strong sales performance in Q1; Reconfirms full year
2017 financial guidance
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International Flavors & Fragrances Inc. (NYSE: IFF)
(Euronext Paris: IFF) reported financial results and strategic
achievements for the first quarter ended March 31, 2017.
Q1 2017 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 6% (19)% (1)% 6% (2)% 5% 7% 3% 9%
Acquisition Impact 5% 3% 3% 5% 3% 3% 5%
3% 3%
¹ Schedules at the end of this release contain reconciliations
of reported GAAP to non-GAAP metrics.
Management Commentary
“We are pleased to report that our first quarter sales growth
was strong and in line with our expectations,” said IFF Chairman
and CEO Andreas Fibig. “Sales performance was broad-based, driven
by the contribution of our recent acquisitions and a strong
performance in Flavors, where we achieved growth across all
categories and regions.
“In terms of profit – excluding the impact of currency and items
that affect comparability – the contribution from our recent
acquisitions was strong, and supported overall profitability as we
are ahead of our acquisition plan. In addition, we achieved a lower
effective tax rate and reduced shares outstanding related to our
share repurchased program, both which provided an additional
benefit to EPS.”
Mr. Fibig continued, “As we look to the balance of the year, we
are optimistic that we can achieve our previously stated annual
financial guidance, on a currency neutral basis. By leveraging our
competitive advantages, executing against our strategic plan, and
fully realizing the benefits of our productivity program announced
earlier this year, we believe we are well-positioned to continue to
deliver long-term, sustainable shareholder value.”
First Quarter 2017 Consolidated Financial Highlights
- Reported net sales for the first
quarter totaled $828.3 million, an increase of 6% from $783.3
million for the first quarter of 2016. Excluding the impact of
foreign exchange, currency neutral sales increased 7% over the
prior year, including approximately five percentage points related
to our recent acquisitions.
- Reported operating profit for the first
quarter was $137.4 million versus $169.9 million reported in 2016.
Excluding the impact of foreign exchange and those items that
affect comparability, currency neutral adjusted operating profit
grew 3% as acquisitions, volume growth, and cost savings
initiatives more than offset unfavorable price to input costs as
well as unplanned expenses, including unfavorable manufacturing
variances, bad debt, a product recall and a litigation loss.
- Reported earnings per share (EPS) for
the first quarter was $1.45 per diluted share versus $1.47 per
diluted share reported in 2016. Excluding the impact of foreign
exchange and those items that affect comparability, currency
neutral adjusted EPS improved 9%, benefiting from a more favorable
year-over-year effective tax rate and lower year-over-year shares
outstanding.
First Quarter 2017 Strategic Highlights
Innovating Firsts: strengthen position and drive
differentiation in priority R&D platforms
- Sweetness and savory modulation
portfolio sales improved strong double-digits
- Encapsulation-related sales continued
strong growth in Personal Wash
- Launched & commercialized two new
flavor molecules
Win Where We Compete: achieve market leadership position
in key markets, categories & customers
- North America sales +14%, inclusive of
our recent acquisitions
- IFF | Lucas Meyer Cosmetics won three
beauty industry awards from CosmeticsDesign
- Growth achieved across both global and
regional accounts, with regionals outpacing
Become Our Customers’ Partner of Choice: attain
commercial excellence
- Extended business access through core
list status with a multinational Flavors customer
- Received an innovation award from a top
Flavors customer
- Launched 2016 Sustainability Report
“Circular by Design”
- IFF-LMR Naturals Achieved 9th For Life
Certification: Burgundy Blackcurrant Bud
Strengthen and Expand the Portfolio: pursue value
creation through collaborations & acquisitions
- Purchased PowderPure in April 2017 – to
further expand expertise and offerings for clean label solutions
that satisfy consumer demands
- David Michael and Fragrance Resources
acquisitions contributed approximately 5 percentage points of sales
growth and 3 percentage points of operating profit growth in Q1
2017
First Quarter 2017 Segment Summary: Growth vs. Prior
Year
Reported (GAAP) Currency
Neutral (Non-GAAP) Sales Segment Profit
Sales Segment Profit Fragrances: 3%
(8)% 3% (6)% Acquisition Impact 4% 0% 4% 0%
Flavors:
9% 7% 10% 12% Acquisition Impact 6% 5% 6% 5%
Fragrances Business Unit
- On a reported basis, sales increased
3%, or $11.3 million, to $422.1 million. Currency neutral sales
also improved 3% led by growth in Fine Fragrances, Fabric Care and
Fragrance Ingredients.
- Fine Fragrances improved 10% on a
reported basis and on a currency neutral basis, inclusive of
additional sales related to the acquisition of Fragrance Resources.
Three of the four regions achieved strong growth with the exception
of Latin America, which experienced abnormally high volume erosion
due to weak economic conditions.
- Consumer Fragrances increased 1% on a
reported and 2% on a currency neutral basis, principally driven by
the additional sales related to the acquisition of Fragrance
Resources and low single-digit growth in Fabric Care.
- Fragrance Ingredients grew 1% on a
reported basis and 2% on a currency neutral basis, as double-digit
growth in EAME and Latin America was offset by softness in North
America and Greater Asia.
- Fragrances segment profit decreased 8%
on a reported basis and 6% on a currency neutral basis, as volume
growth and the benefits from productivity initiatives were more
than offset by unfavorable price to input costs, as well as several
unplanned expenses.
Flavors Business Unit
- On a reported basis, sales increased
9%, or $33.7 million, to $406.2 million, while currency neutral
sales grew 10% with broad-based organic growth across all regions,
as well as the contribution of sales related to the David Michael
acquisition.
- EAME was flat on a reported basis and
increased 6% on a currency neutral basis, led by high-single-digit
increases in Western Europe and Central, Southern and Eastern
Europe.
- North America grew 27% reflecting
additional sales related to the acquisition of David Michael, as
well as strong double-digit growth in Dairy and Savory in the
organic business.
- Latin America increased 9% on a
reported and 7% on a currency neutral basis, led by double-digit
growth in Mexico and Andean Pact and mid-single-digit growth in
South Cone.
- Greater Asia increased 2% on a reported
and 3% on a currency neutral basis, led by strong double-digit
growth in India, Thailand and the Philippines.
- Flavors segment profit grew 7% on a
reported basis and 12% on a currency neutral basis, led by volume
growth, the benefits from productivity initiatives and the
contribution of the David Michael acquisition.
FY 2017 Financial Guidance: Percent Change vs. Prior
Year
The Company’s full year 2017 guidance:
Currency Neutral
FX Impact1 Adjusted2
Sales 7.5% - 8.5% ~(1.5)% 6.0% - 7.0%
Operating
Profit 5.5% - 6.5% ~(2.5)% 3.0% - 4.0%
EPS 6.5% - 7.5%
~(3.0)% 3.5% - 4.5%
1 See Use of Non-GAAP Financial Measures2 Excludes items
impacting comparability
A copy of the Company’s Annual Report on Form 10-Q will be
available on its website at www.iff.com or at sec.gov by May 10,
2017.
Audio Webcast
A live webcast to discuss the Company’s first quarter financial
results will be held on May 9, 2017, 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 2017,
the expected impact of and benefits from productivity initiatives
long-term and the impact of our actions on long-term value creation
for our customers and shareholders. 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 28, 2017.
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)
macroeconomic trends affecting the emerging markets; (2) the
Company’s ability to implement and adapt its Vision 2020 strategy;
(3) 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; (4) the Company’s
ability to realize the benefits of its productivity initiatives and
other optimization activities, (5) 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; (6) changes in consumer preferences and demand for the
Company’s products or a decline in consumer confidence and
spending; (7) the Company’s ability to benefit from its investments
and expansion in emerging markets; (8) the impact of currency
fluctuations or devaluations in the principal foreign markets in
which it operates, including the devaluation of the Euro; (9) the
economic and political risks associated with the Company’s
international operations, including challenging economic conditions
in China and Latin America; (10) the impact of any failure of the
Company’s key information technology systems or a breach of
information security; (11) the Company’s ability to attract and
retain talented employees; (12) the Company’s ability to comply
with, and the costs associated with compliance with U.S. and
foreign environmental protection laws; (13) volatility and
increases in the price of raw materials, energy and transportation;
(14) price realization in a rising input cost environment (15)
fluctuations in the quality and availability of raw materials; (16)
the impact of a disruption in the Company’s supply chain or its
relationship with its suppliers; (17) the impact of customer claims
or product recalls; (18) any adverse impact on the availability,
effectiveness and cost of the Company’s hedging and risk management
strategies; (19) the Company’s ability to successfully manage its
working capital and inventory balances; (20) uncertainties
regarding the outcome of, or funding requirements related to
litigation or settlement of pending litigation uncertain tax
positions or other contingencies; (21) 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; (22) 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 (23) 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.
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 such
as legal charges/credits, gain on sale of assets, operational
improvement initiatives, acquisition related costs,
integration-related costs, CTA realization (often referred to as
“Items Impacting Comparability”) and, with respect to the currency
neutral items, the impact of foreign currency movements, that are
of a non-operational nature. 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 2017
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
2017 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. (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 7,300
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 share
data)
(Unaudited)
Three Months Ended March 31, 2017 2016 %
Change Net sales $ 828,293 $ 783,312 6 % Cost of goods sold
463,627 423,103 10 % Gross profit
364,666 360,209 1 % Research and development expenses 69,711 63,385
10 % Selling and administrative expenses 140,330 123,543 14 %
Amortization of acquisition-related intangibles 7,066 6,061 17 %
Restructuring and other charges, net 10,143 — 100 % Gain on sales
of fixed assets (21 ) (2,713 ) (99 )% Operating
profit 137,437 169,933 (19 )% Interest expense 12,807 12,478 3 %
Other (income) expense, net (13,857 ) 2,559
(642 )% Income before taxes 138,487 154,896 (11 )% Taxes on income
22,723 36,293 (37 )% Net income $
115,764 $ 118,603 (2 )% Earnings per
share - basic $ 1.46 $ 1.48 Earnings per share - diluted $ 1.45 $
1.47 Average shares outstanding Basic 79,098 79,666 Diluted
79,409 80,055
International Flavors & Fragrances
Inc.
Condensed Consolidated Balance
Sheet
(Amounts in thousands)
(Unaudited)
March 31, December 31, 2017 2016 Cash and cash
equivalents $ 300,067 $ 323,992 Receivables 637,521 550,658
Inventories 604,251 592,017 Other current assets 169,594
142,347 Total current assets 1,711,433 1,609,014
Property, plant and equipment, net 791,920 775,716 Goodwill and
other intangibles, net 1,510,683 1,365,906 Other assets
238,223 266,348 Total assets $ 4,252,259 $ 4,016,984
Bank borrowings and overdrafts, commercial paper and current
portion of long-term debt $ 365,669 $ 258,516 Other current
liabilities 620,155 639,781 Total current liabilities
985,824 898,297 Long-term debt 1,186,417 1,066,855
Non-current liabilities 448,501 420,698 Shareholders' equity
1,631,517 1,631,134 Total liabilities and
shareholders' equity $ 4,252,259 $ 4,016,984
International Flavors & Fragrances
Inc.
Consolidated Statement of Cash
Flows
(Amounts in thousands)
(Unaudited)
Three Months Ended March 31, 2017 2016
Cash flows
from operating activities: Net income $ 115,764 $ 118,603
Adjustments to reconcile to net cash provided by operating
activities: Depreciation and amortization 26,802 26,697 Deferred
income taxes (3,766 ) 4,193 Gain on disposal of assets (21 ) (2,713
) Stock-based compensation 5,819 5,930 Pension contributions
(25,263 ) (7,410 ) Foreign currency gain on liquidation of entity
(12,214 ) — Changes in assets and liabilities, net of acquisitions:
Trade receivables (60,858 ) (60,655 ) Inventories (109 ) 3,256
Accounts payable (1,978 ) (29,375 ) Accruals for incentive
compensation (23,485 ) (11,598 ) Other current payables and accrued
expenses (7,286 ) 10,456 Other assets 29,016 2,178 Other
liabilities (20,720 ) (19,619 ) Net cash provided by
operating activities 21,701 39,943
Cash flows from investing activities: Cash paid for
acquisitions, net of cash received (138,093 ) — Additions to
property, plant and equipment (26,662 ) (22,512 ) Maturity of net
investment hedges 1,948 — Proceeds from disposal of assets
619 1,366 Net cash used in investing
activities (162,188 ) (21,146 )
Cash flows
from financing activities: Cash dividends paid to shareholders
(50,677 ) (44,826 ) Increase (decrease) in revolving credit
facility borrowings and overdrafts 97,275 (124,602 ) Increase in
commercial paper 107,441 — Deferred financing costs — (4,796 )
Proceeds from issuance of long-term debt — 555,559 Gain (Loss) on
pre-issuance hedges 300 (3,244 ) Proceeds from issuance of stock
under stock plans — 163 Employee withholding taxes paid (3,000 )
(7,296 ) Purchase of treasury stock (37,612 ) (40,007
) Net cash provided by financing activities 113,727
330,951 Effect of exchange rates changes on cash and
cash equivalents 2,835 (2,859 )
Net change
in cash and cash equivalents (23,925 ) 346,889
Cash and cash
equivalents at beginning of year 323,992
181,988
Cash and cash equivalents at end of period $
300,067 $ 528,877
International Flavors & Fragrances
Inc.
Business Unit Performance
(Amounts in thousands)
(Unaudited)
Three Months Ended March 31, 2017 2016
Net
Sales Flavors $ 406,164 $ 372,508 Fragrances 422,129
410,804
Consolidated 828,293 783,312
Segment Profit Flavors 98,010 91,813 Fragrances
81,700 89,237 Global Expenses (16,200 ) (13,870 ) Restructuring and
other charges, net (10,143 ) (101 ) Acquisition and related costs
(8,788 ) (1,037 ) Operational improvement initiative costs (621 )
(268 ) Legal (charges) credits — 1,446 Gain on sales of assets 21
2,713 Tax assessment (5,350 ) — Integration-related costs
(1,192 ) —
Operating profit 137,437 169,933
Interest Expense (12,807 ) (12,478 ) Other income (expense),
net 13,857 (2,559 )
Income before taxes
$ 138,487 $ 154,896
Operating Margin
Flavors 24.1 % 24.6 % Fragrances 19.4 % 21.7 % Consolidated 16.6 %
21.7 %
International Flavors & Fragrances
Inc.
Sales Performance by Region and
Category
(Unaudited)
First Quarter 2017 vs.
2016 Percentage Change in Sales by Region of Destination
Fine Consumer Fragrances
Ingredients Total Frag. Flavors
Total North America
Reported 7% 4% -10% 1%
27% 14% EAME Reported 21%
5% 11% 11% 0% 7% Currency
Neutral 24% 8% 13% 14% 6%
11% Latin America Reported -14%
-8% 16% -8% 9% -2% Currency
Neutral -21% -9% 16% -10% 7%
-4% Greater Asia Reported 14%
3% -12% 1% 2% 2% Currency
Neutral 15% 4% -12% 2% 3%
2% Total Reported 10% 1%
1% 3% 9% 6% Currency Neutral
10% 2% 2% 3%
10% 7%
Currency neutral growth is calculated by translating prior year
sales at the exchange rates used for the corresponding 2017
period.
International Flavors & Fragrances
Inc.
GAAP to Non-GAAP Reconciliation
Foreign Exchange Impact
(Unaudited)
Q1
Consolidated
Sales Operating Profit EPS %
Change - Reported (GAAP) 6% -19%
-1% Items Impacting Comparability 0% 17% 7%*
% Change -
Adjusted (Non-GAAP) 6% -2% 5% Currency
Impact 1% 5% 4%
% Change - Currency Neutral (Adjusted)
7% 3% 9%
Q1
Flavors
Sales Segment Profit % Change - Reported
(GAAP) 9% 7% Currency Impact 2%* 5%
% Change -
Currency Neutral 10% 12%
Q1
Fragrances
Sales Segment Profit % Change - Reported
(GAAP) 3% -8% Currency Impact 1%* 2%
% Change
- Currency Neutral 3% -6%
*Item does not foot due to rounding
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 2017 Reconciliation of Non-GAAP
Metrics
Reconciliation of Gross Profit Reported (GAAP)
Operational Improvement Initiative Costs (a) Acquisition
and Related Costs (b) Integration related costs (c)
Adjusted (Non-GAAP) Gross profit $ 364,666 621 5,301 88
$ 370,676 Reconciliation of Selling and
Administrative Expenses Reported (GAAP) Acquisition
and Related Costs (b) Integration related costs (c)
Tax Assessment (d) Adjusted (Non-GAAP) Selling and
administrative expenses $ 140,330 (3,487) (943) (5,350)
$
130,550 Reconciliation of Operating Profit
Reported (GAAP) Restructuring and Other Charges (e)
Operational Improvement Initiative Costs (a) Acquisition
Related Costs (b) Gain on Sale of Asset (f)
Integration related costs (c) Tax Assessment (d)
Adjusted (Non-GAAP) Operating profit $ 137,437 10,143 621
8,788 (21) 1,192 5,350
$ 163,510
Reconciliation of Net Income Reported (GAAP)
Restructuring and Other Charges (e) Operational
Improvement Initiative Costs (a) Acquisition Related Costs
(b) Gain on Sale of Asset (f) Integration related
costs (c) Tax Assessment (d) CTA Realization (g)
Adjusted (Non-GAAP) Income before taxes $ 138,487 10,143 621
8,788 (21) 1,191 5,350 (12,214)
$ 152,345 Taxes on
income (h) $ 22,723 2,967 155 3,138
(7) 362 1,892 —
$
31,230 Net income $ 115,764 7,176 466 5,650 (14) 829
3,458 (12,214)
$ 121,115 Diluted EPS $ 1.45 0.09 0.01
0.07 — 0.01 0.04 (0.15)
$ 1.52 (a) Represents
accelerated depreciation and idle labor costs in Hangzhou, China.
(b) Represents the amortization of inventory "step-up" related to
the acquisitions of David Michael and Fragrance Resources, included
in Cost of goods sold and transaction costs related to the
acquisitions of David Michael, Fragrance Resources and PowderPure,
included in Selling and administrative expenses. (c) Represents
costs related to the integration of the David Michael and Fragrance
Resources acquisitions. (d) Represents the reserve for payment of a
tax assessment related to commercial rent for prior periods. (e)
Represents severance costs related to the 2017 Productivity
Program. (f) Represents gains on sale of assets primarily in Latin
America. (g) Represents the release of CTA related to the
liquidation of a foreign entity. (h) The income tax expense
(benefit) on non-GAAP adjustments is computed in accordance with
ASC 740 using the same methodology as the GAAP provision of income
taxes. Income tax effects of non-GAAP adjustments are calculated
based on the applicable statutory tax rate for each jurisdiction in
which such charges were incurred, except for those items which are
non-taxable for which the tax expense (benefit) was calculated at
0%. For the first quarter of 2017, these non-GAAP adjustments were
not subject to foreign tax credits or valuation allowances, but to
the extent that such factors are applicable to any future non-GAAP
adjustments we will take such factors into consideration in
calculating the tax expense (benefit). 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: $1.3M related to Fragrance Resources, $0.6M related
to David Michael, $1.9M related to Lucas Meyer and $1.6M related to
Ottens Flavors
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 Reconciliation of Non-GAAP
Metrics
Reconciliation of Gross Profit Reported (GAAP)
Restructuring and Other Charges (a) Operational
Improvement Initiative Costs (b) Acquisition and Related
Costs (c) Adjusted (Non-GAAP) Gross profit $ 360,209 101
268 889
$ 361,467 Reconciliation of Selling
and Administrative Expenses Reported (GAAP)
Acquisition and Related Costs (c) Legal Charges/Credits
(d) Adjusted (Non-GAAP) Selling and administrative
expenses $ 123,543 (148) 1,446
$ 124,841
Reconciliation of Operating Profit Reported (GAAP)
Restructuring and Other Charges (a) Operational
Improvement Initiative Costs (b) Acquisition Related Costs
(c) Legal Charges/Credits (d) Gain on Sale of Asset
(e) Adjusted (Non-GAAP) Operating profit $ 169,933 101
268 1,037 (1,446) (2,713)
$ 167,180
Reconciliation of Net Income Reported (GAAP)
Restructuring and Other Charges (a) Operational
Improvement Initiative Costs (b) Acquisition Related Costs
(c) Legal Charges/Credits (d) Gain on Sale of Asset
(e) Adjusted (Non-GAAP) Income before taxes $ 154,896
101 268 1,037 (1,446) (2,713)
$ 152,143 Taxes on
income (f) $ 36,293 19 67 367
(402) (572)
$ 35,772
Net income $ 118,603 82 201 670 (1,044) (2,141)
$
116,371 Diluted EPS $ 1.47 — — 0.01 (0.01) (0.03)
$
1.45 * (a) Accelerated depreciation related to
restructuring activities. (b) Accelerated depreciation in Hangzhou,
China. (c) Expense related to the amortization of inventory
step-up, included in Cost of goods sold, and additional transaction
costs related to the acquisition of Lucas Meyer, included in
Selling and administrative expenses. (d) Amounts received related
to the Spanish capital tax settlement. (e) Principally related to
gain on sale of property in Europe. (f) The income tax expense
(benefit) on non-GAAP adjustments is computed in accordance with
ASC 740 using the same methodology as the GAAP provision of income
taxes. Income tax effects of non-GAAP adjustments are calculated
based on the applicable statutory tax rate for each jurisdiction in
which such charges were incurred. For the first quarter of 2016,
these non-GAAP adjustments were not subject to foreign tax credits
or valuation allowances, but to the extent that such factors are
applicable to any future non-GAAP adjustments we will take such
factors into consideration in calculating the tax expense
(benefit). 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. *This item does
not foot due to rounding
International Flavors & Fragrances Inc.521 West 57th
StreetNew York, NY 10019
T +212.765.5500F +212.708.7132iff.com
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170508006354/en/
International Flavors & Fragrances Inc.Michael DeVeau,
212-708-7164VP, Global Corporate Communications & Investor
RelationsMichael.DeVeau@iff.com
International Flavors an... (NYSE:IFF)
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