IFF Reports Fourth Quarter and Full Year 2012 Results
Full Year Local Currency Sales Up 4%; Reported Sales up 1%
Full Year Adjusted Earnings per Share Increased 6% to
-
Reported revenue increased
$37 million or 6% to$681 million from$644 million in the prior year quarter. Excluding the impact of foreign currency (by translating current and prior year sales at the same exchange rates), local currency sales increased 8% reflecting a high level of new wins and positive volume on existing business. Our expanding footprint in emerging markets accounted for 49% of fourth quarter sales. - On a like-for-like (LFL) basis, which excludes the exit of Flavors low-margin sales activities, local currency sales increased 10%.
-
Net income for the quarter totaled
$68.1 million , or$0.83 per share, compared with net income of$24.4 million or$0.30 per share in the prior year quarter. Net income in the fourth quarter of 2011 included an aggregate charge of$36.8 million , or$0.44 per share, related to a patent litigation settlement and restructuring and other charges. -
Excluding the patent litigation settlement and restructuring charges
from the prior year’s results, adjusted net income increased 11% to
$68.1 million from$61.1 million in the prior year quarter, and adjusted earnings per share (EPS) increased 12% to$0.83 per share from$0.74 per share in the prior year quarter.
Full Year 2012 Results
-
Reported revenue for the full year increased 1% to
$2.8 billion . Local currency sales increased 4% for the full year, reflecting accelerated momentum throughout the year. On a like-for-like basis, sales increased 5%. The emerging markets accounted for 47% of full year sales. -
Net income for the full year totaled
$254.1 million , or$3.09 per share, compared with net income of$266.9 million or$3.26 per share in the prior year. Net income for the full year includes special charges of$73.4 million , or$0.89 per share, almost all of which is related to the previously-announced Spanish tax settlement. Net income for the prior year included an aggregate charge of$39.3 million , or$0.47 per share, related to a patent litigation settlement and restructuring and other charges. -
Excluding these charges from operating results, adjusted net income
increased 7% to
$327.5 million from$306.2 million and full year adjusted EPS increased 6% to$3.98 from$3.74 . -
Cash flows from operations for the full year were
$333.1 million , or 11.8% of sales, compared with$189.2 million , or 6.8% of sales in the prior year. Cash flow from operations for 2012 includes a$105.5 million cash outflow arising from the Spanish tax settlement, and for 2011 includes a$40 million payment for a patent litigation settlement. Excluding these items, the Company’s cash flow from operations nearly doubled in 2012.
Management Commentary
“For the full year we delivered local currency sales growth of 4%,
marking the third consecutive year of top-line growth in line with our
long-term growth targets. We made targeted investments to expand our
footprint in the growing markets of
“We are very well positioned in the market, and enter 2013 with a strong R&D pipeline and solid growth momentum. We have confidence in our strengths and will continue to focus on excellence in execution of our strategies.”
- Local currency sales increased 8%, supported by 11% growth in the emerging markets, and 6% growth in the developed markets. On a like-for-like basis, local currency sales increased 10%.
- Gross profit margins, as a percentage of sales, improved to 42.2%, compared with 37.9% in the fourth quarter of 2011. The improved performance was driven by favorable manufacturing leverage due to the strong volume growth, cost savings initiatives, an improved sales mix including benefits associated with exiting low-margin sales activities in Flavors, and the continued benefits of pricing which helped to offset the continued high level of input costs.
- Research, selling and administrative (RSA) expenses, as a percentage of sales, was 27.6% compared with 29.0% in the fourth quarter of 2011. Excluding the impact of the 2011 patent litigation settlement, adjusted RSA, as a percentage of sales, increased 380 basis points to 27.6% compared with 23.8% in the prior year quarter, primarily as a result of higher incentive compensation accruals owing to the strength of our strong performance this quarter and its impact on the achievement of our full year sales growth targets. Before the impact of incentive compensation, adjusted RSA as a percentage of sales would have shown a decrease versus a year ago.
-
Operating profit totaled
$99.2 million , compared with$47.8 million in the prior year quarter. Operating profit in the prior year quarter included an aggregate charge of$43 million related to the patent litigation settlement and restructuring charges. Excluding these items, adjusted operating profit increased$8 million , or 9%, to$99.2 million from$91.1 million in the prior year, as a result of volume growth, mix improvements and manufacturing leverage, which more than offset increased incentive compensation accruals. Adjusted operating profit margin increased 50 basis points to 14.6% from 14.1% in the prior year. -
Interest expense decreased by
$0.2 million in the fourth quarter compared with the prior year quarter, reflecting lower levels of outstanding debt. - The effective tax rate for the quarter was 23.2% compared with 39.8% in the prior year. The prior year tax rate was negatively impacted by the patent litigation settlement and restructuring charges. The quarter-over-quarter reduction also reflects favorable adjustments to provisions for uncertain tax positions and a lower cost of repatriation. These items were partially offset by the absence of the R&D tax credit in 2012.
Fragrances Business Unit
-
Reported revenue increased 10% to
$354 million in the fourth quarter, compared with$322 million in the fourth quarter of 2011. Local currency sales increased 13% in the fourth quarter. Fragrance Compounds momentum continued this quarter with local currency growth of 15%, marking the third consecutive quarter of accelerated growth. - Fragrance Ingredients delivered local currency sales growth of 6%, which marked the first quarter of growth since Q1 2011.
-
Strong new customer wins and broad-based growth in our Fragrance
Compounds business drove local currency sales growth of 15%, with
double-digit growth in
Latin America ,Greater Asia andNorth America and solid growth in EAME. Fine Fragrance and Beauty Care achieved 19% local currency sales growth and Functional Fragrance delivered 12% local currency sales growth. - Fragrances gross margins increased over the prior year quarter primarily due to strong new wins, favorable category mix, cost savings initiatives and the continued benefits of pricing which is helping to offset the continued high level of input costs.
-
Segment profit totaled
$53 million in the fourth quarter of 2012 compared with$37 million in the fourth quarter of 2011, or an increase of 44%. The improved segment profit is due to strong volume growth combined with gross margin expansion, which offset increased incentive compensation expenses this quarter. Segment profit margin increased 360 basis points to 15.1% from 11.5%.
Flavors Business Unit
-
Reported revenue increased 1% to
$326 million in the fourth quarter from$323 million in the prior year quarter. -
Local currency sales increased 3% in the fourth quarter fueled by
stronger growth in the emerging markets of
Southeast Asia andLatin America combined with steady growth in the developed markets ofNorth America andWestern Europe . On a like-for-like basis, local currency sales increased 7% over the prior year quarter, led by 15% LFL growth inNorth America . -
From an end-use category perspective, local currency sales growth was
fueled by double-digit growth in Beverages, particularly in
North America , followed by solid growth in Savory and Dairy, primarily inGreater Asia . - Flavors gross margins increased over the prior year quarter primarily due to favorable category mix, the impact of exiting low-margin sales activities, and the continued benefits of previous pricing to help offset the continued high level of input costs.
-
Segment profit totaled
$62 million in the fourth quarter of 2012, compared with$63 million in the fourth quarter of 2011. Overall sales growth and expanded gross margins due to favorable category mix and pricing realization were more than offset by higher RSA expenses, including increased incentive compensation expense. Segment profit margin decreased 60 basis points to 19.0% from 19.6%.
Full Year 2012 Operating Highlights
- Local currency sales increased 4%, reflecting 8% growth in emerging markets. On a like-for-like basis, local currency sales increased 5%.
- Gross profit margins, as a percentage of sales, improved to 41.7%, compared with 39.6% in 2011. The improved performance was due to an improved mix of business, the benefits associated with exiting low-margin sales activities, continued pricing, moderating raw material cost increases and ongoing manufacturing efficiencies.
- Research, selling and administrative (RSA) expenses, as a percentage of sales, was 24.4% compared with 23.8% in 2011. Excluding the impact of the 2011 patent litigation settlement, the adjusted RSA, as a percentage of sales, increased 180 points to 24.4% compared with 22.6% in 2011, primarily as a result of higher incentive compensation accruals and pension expenses.
-
Operating profit totaled
$487 million in 2012 compared with$428 million in 2011. Excluding an aggregate charge of$46.7 million related to the patent litigation and restructuring charges from the prior year’s results, and$1.7 million of restructuring charges form the current year’s results, adjusted operating profit increased$14 million or 3% to$488 million in 2012 from$474 million in 2011. Adjusted operating profit margins increased 30 basis points to 17.3% from 17.0%. -
Interest expense decreased by
$3 million year-over-year, reflecting lower levels of outstanding debt. - The effective tax rate was 42.7% in 2012 as compared to a rate of 28.6% in the prior year. Excluding the impact of the 2011 and 2012 items previously noted, including the 2011 patent litigation and restructuring charges and the 2012 Spanish tax settlement and restructuring charges, the adjusted effective tax rate for 2012 was 26.4%, compared with 27.1% in the prior year. The year-over-year reduction reflects favorable adjustments to provisions for uncertain tax positions in 2012, combined with a lower cost of repatriation. These favorable impacts were partially offset by the absence of the US R&D tax credit in 2012.
Full Year 2012 Segment Results
Fragrances Business Unit
-
Reported revenue for the full year of
$1.4 billion was flat compared with the prior year. Fragrance local currency sales increased 3%. The Fragrances segment contributed 51% of the total consolidated revenue. - For the full year, Fragrance Compounds had local currency growth of 7%, compared with 1% local currency growth in 2011. Fragrance Ingredients, although improving over the course of the year, declined 10% in local currency sales in 2012 versus 2011.
-
Fragrance Compounds showed positive local currency sales growth across
all regions, with double-digit growth in
Latin America and solid growth inGreater Asia ,North America and EAME. Both Fine Fragrance & Beauty Care and Functional delivered full year local currency sales growth of 7% due to strong new customer wins. - Fragrances gross margins increased over the prior year primarily due to new customer wins, favorable category mix, and productivity gains from cost savings initiatives and continued pricing to offset higher input costs.
-
Segment profit totaled
$238 million in 2012 compared with$227 million in the prior year, or an increase of 5%. The segment profit improvement is due to improved category mix and pricing, combined with ongoing cost discipline including the benefit from the strategic realignment plan announced in the first quarter of 2012, which more than offset higher raw material costs. Segment profit margin increased 80 basis points to 16.5% from 15.7%.
Flavors Business Unit
-
Reported revenue for the full year increased 2% to
$1.4 billion . The Flavors segment contributed 49% of the total consolidated revenue. -
Local currency sales increased 5% for the full year and increased 8%
on a LFL basis, supported by 9% growth in emerging markets. Greater
Asia , Flavors largest region, delivered growth of 7% for the full year growth, or 8% on a LFL basis. The developed market ofNorth America delivered like-for-like growth of 9%. - From an end-use category perspective, local currency growth was fueled by double-digit growth in Beverages, followed by solid growth in Savory and Dairy.
- Flavors full year gross margins increased over the prior year primarily due to favorable category mix, the impact of exiting low-margin sales activities and continued pricing.
-
Full year segment profit for Flavors totaled
$298 million compared with$284 million in the prior year. The improved segment profit is due to strong volume growth, favorable category mix and pricing realization that more than offset higher raw material costs, ongoing investments in R&D and increased incentive compensation expenses. Segment profit margin increased 50 basis points to 21.6% from 21.1%.
Audio Webcast
A live webcast to discuss the Company's fourth quarter and full year
2012 financial results, and first quarter and full year 2013 outlook
will be held today,
About IFF
Cautionary Statement Under The Private Securities Litigation Reform Act of 1995
This press release includes “forward-looking statements” under the
Federal Private Securities Litigation Reform Act of 1995, including
statements regarding (i) the Company’s belief on the impact of its
research strategy on future consumer needs and preferences, (ii) the
Company’s expectation regarding the impact of its partnership with
International Flavors & Fragrances Inc. | |||||||||||||||||||||
Consolidated Income Statement | |||||||||||||||||||||
(Amounts in thousands except per share data) |
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(Unaudited) |
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Three Months Ended | Twelve Months Ended | ||||||||||||||||||||
December 31, | December 31, | ||||||||||||||||||||
2012 | 2011 | % Change | 2012 | 2011 | % Change | ||||||||||||||||
Net sales | $ | 680,558 | $ | 644,383 | 6 | $ | 2,821,446 | $ | 2,788,018 | 1 | |||||||||||
Cost of goods sold | 393,490 | 399,985 | (2 | ) | 1,645,912 | 1,683,362 | (2 | ) | |||||||||||||
Gross margin | 287,068 | 244,398 | 17 | 1,175,534 | 1,104,656 | 6 | |||||||||||||||
Research and development | 62,245 | 52,459 | 19 | 233,713 | 219,781 | 6 | |||||||||||||||
Selling and administrative | 125,594 | 134,349 | (7 | ) | 453,535 | 443,974 | 2 | ||||||||||||||
Restructuring and other charges | - | 9,805 | (100 | ) | 1,668 | 13,172 | (87 | ) | |||||||||||||
Interest expense | 10,423 | 10,670 | (2 | ) | 41,753 | 44,639 | (6 | ) | |||||||||||||
Other expense (income), net | 116 | (3,415 | ) | (103 | ) | 1,450 | 9,544 | (85 | ) | ||||||||||||
Pretax income | 88,690 | 40,530 | 119 | 443,415 | 373,546 | 19 | |||||||||||||||
Income taxes | 20,571 | 16,136 | 27 | 189,281 | 106,680 | 77 | |||||||||||||||
Net income | $ | 68,119 | $ | 24,394 | 179 | $ | 254,134 | $ | 266,866 | (5 | ) | ||||||||||
Earnings per share - basic | $ | 0.83 | $ | 0.30 | $ | 3.11 | $ | 3.30 | |||||||||||||
Earnings per share - diluted | $ | 0.83 | $ | 0.30 | $ | 3.09 | $ | 3.26 | |||||||||||||
Average shares outstanding | |||||||||||||||||||||
Basic | 81,318 | 80,677 | 81,108 | 80,456 | |||||||||||||||||
Diluted | 81,998 | 81,596 | 81,833 | 81,467 | |||||||||||||||||
International Flavors & Fragrances Inc. | ||||||||
Condensed Consolidated Balance Sheet | ||||||||
(Amounts in thousands) | ||||||||
(Unaudited) | ||||||||
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December 31, |
|
December 31, |
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2012 | 2011 | |||||||
Cash & cash equivalents | $ | 324,422 | $ | 88,279 | ||||
Receivables | 499,443 | 472,346 | ||||||
Inventories | 540,658 | 544,439 | ||||||
Other current assets | 208,036 | 212,156 | ||||||
Total current assets | 1,572,559 | 1,317,220 | ||||||
Property, plant and equipment, net | 654,641 | 608,065 | ||||||
Goodwill and other intangibles, net | 702,270 | 708,345 | ||||||
Other assets | 320,130 | 331,951 | ||||||
Total assets | $ | 3,249,600 | $ | 2,965,581 | ||||
Bank borrowings and overdrafts, and | ||||||||
current portion of long-term debt | $ | 150,071 | $ | 116,688 | ||||
Other current liabilities | 472,661 | 447,878 | ||||||
Total current liabilities | 622,732 | 564,566 | ||||||
Long-term debt | 881,104 | 778,248 | ||||||
Non-current liabilities | 493,209 | 515,360 | ||||||
Shareholders' equity | 1,252,555 | 1,107,407 | ||||||
Total liabilities and shareholders' equity | $ | 3,249,600 | $ | 2,965,581 | ||||
International Flavors & Fragrances Inc. | ||||||||||
Consolidated Statement of Cash Flows | ||||||||||
(Amounts in thousands) | ||||||||||
(Unaudited) | ||||||||||
Twelve Months Ended | ||||||||||
December 31, | ||||||||||
2012 | 2011 | |||||||||
Cash flows from operating activities: | ||||||||||
Net income | $ | 254,134 | $ | 266,866 | ||||||
Adjustments to reconcile to net cash provided by operating activities: | ||||||||||
Depreciation and amortization | 76,667 | 75,327 | ||||||||
Deferred income taxes | (15,878 | ) | 25,357 | |||||||
Gain on disposal of assets | (4,461 | ) | (3,184 | ) | ||||||
Stock-based compensation | 19,716 | 20,547 | ||||||||
Pension settlement/curtailment | 874 | 3,583 | ||||||||
Spanish tax charge | 72,362 | - | ||||||||
Payments pursuant to Spanish tax settlement | (105,503 | ) | - | |||||||
Changes in assets and liabilities | ||||||||||
Trade receivables | (33,056 | ) | (35,697 | ) | ||||||
Inventories | 4,571 | (25,199 | ) | |||||||
Accounts payable | (740 | ) | (5,859 | ) | ||||||
Accruals for incentive compensation | 34,632 | (49,964 | ) | |||||||
Other current payables and accrued expenses | 29,203 | (45,491 | ) | |||||||
Changes in other assets/liabilities | 558 | (37,096 | ) | |||||||
Net cash provided by operating activities | 333,079 | 189,190 | ||||||||
Cash flows from investing activities: | ||||||||||
Additions to property, plant and equipment | (126,140 | ) | (127,457 | ) | ||||||
Purchase of insurance contracts | (1,127 | ) | (1,936 | ) | ||||||
Maturities of net investment hedge | 1,960 | (2,475 | ) | |||||||
Proceeds from disposal of assets | 1,763 | 705 | ||||||||
Net cash used in investing activities | (123,544 | ) | (131,163 | ) | ||||||
Cash flows from financing activities: | ||||||||||
Cash dividends paid to shareholders | (130,943 | ) | (90,250 | ) | ||||||
Net change in revolving credit facility borrowings and overdrafts | 138,756 | 92,662 | ||||||||
Repayments of long-term debt | - | (123,708 | ) | |||||||
Proceeds from issuance of stock under stock plans | 9,211 | 14,656 | ||||||||
Excess tax benefits on stock-based payments | 8,380 | 5,933 | ||||||||
Net cash provided by (used in) financing activities | 25,404 | (100,707 | ) | |||||||
Effect of exchange rates changes on cash and cash equivalents | 1,204 | (373 | ) | |||||||
Net change in cash and cash equivalents | 236,143 | (43,053 | ) | |||||||
Cash and cash equivalents at beginning of year | 88,279 | 131,332 | ||||||||
Cash and cash equivalents at end of period | $ | 324,422 | $ | 88,279 | ||||||
International Flavors & Fragrances Inc. | ||||||||||||||||||
Business Unit Performance | ||||||||||||||||||
(Amounts in thousands) | ||||||||||||||||||
(Unaudited) | ||||||||||||||||||
Three Months Ended | Twelve Months Ended | |||||||||||||||||
December 31, | December 31, | |||||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||||
Net Sales | ||||||||||||||||||
Flavors | $ | 326,445 | $ | 322,736 | $ | 1,378,377 | $ | 1,347,340 | ||||||||||
Fragrances | 354,113 | 321,647 | 1,443,069 | 1,440,678 | ||||||||||||||
Consolidated | 680,558 | 644,383 | 2,821,446 | 2,788,018 | ||||||||||||||
Segment Profit | ||||||||||||||||||
Flavors | 61,867 | 63,127 | 298,326 | 284,246 | ||||||||||||||
Fragrances | 53,333 | 36,925 | 238,379 | 226,560 | ||||||||||||||
Global Expenses | (15,971 | ) | (8,967 | ) | (48,419 | ) | (36,410 | ) | ||||||||||
Restructuring and other charges, net | - | (9,805 | ) | (1,668 | ) | (13,172 | ) | |||||||||||
Patent Settlement Litigation | - | (33,495 | ) | - | (33,495 | ) | ||||||||||||
Operating profit | 99,229 | 47,785 | 486,618 | 427,729 | ||||||||||||||
Interest Expense | (10,423 | ) | (10,670 | ) | (41,753 | ) | (44,639 | ) | ||||||||||
Other (expense) income, net | (116 | ) | 3,415 | (1,450 | ) | (9,544 | ) | |||||||||||
Income before taxes | $ | 88,690 | $ | 40,530 | $ | 443,415 | $ | 373,546 | ||||||||||
Profit Margin | ||||||||||||||||||
Flavors | 19.0 | % | 19.6 | % | 21.6 | % | 21.1 | % | ||||||||||
Fragrances | 15.1 | % | 11.5 | % | 16.5 | % | 15.7 | % | ||||||||||
Consolidated | 14.6 | % | 7.4 | % | 17.2 | % | 15.3 | % | ||||||||||
International Flavors & Fragrances Inc. | ||||||||||||||||
Sales Performance by Region and Category | ||||||||||||||||
(Unaudited) | ||||||||||||||||
% Change in Sales - Fourth Quarter 2012 vs. Fourth Quarter 2011 | ||||||||||||||||
Fine & |
Functional | Ingredients | Total Frag. | Flavors | Total | |||||||||||
North America | Reported | 17% | 7% | 9% | 10% | 3% | 7% | |||||||||
EAME | Reported | -1% | 1% | 5% | 1% | -2% | 0% | |||||||||
Local Currency | 5% | 6% | 10% | 7% | 3% | 5% | ||||||||||
Latin America | Reported | 53% | 14% | -10% | 26% | 0% | 16% | |||||||||
Local Currency | 59% | 15% | -9% | 29% | 4% | 20% | ||||||||||
Greater Asia | Reported | 4% | 21% | -5% | 12% | 3% | 6% | |||||||||
Local Currency | 5% | 22% | -4% | 13% | 4% | 7% | ||||||||||
Total | Reported | 15% | 9% | 3% | 10% | 1% | 6% | |||||||||
Local Currency | 19% | 12% | 6% | 13% | 3% | 8% | ||||||||||
% Change in Sales - Full Year 2012 vs. Full Year 2011 | ||||||||||||||||
Fine & |
Functional | Ingredients | Total Frag. | Flavors | Total | |||||||||||
North America | Reported | 6% | 3% | -5% | 2% | 3% | 2% | |||||||||
EAME | Reported | -7% | -1% | -17% | -7% | -1% | -5% | |||||||||
Local Currency | 0% | 6% | -13% | -1% | 6% | 2% | ||||||||||
Latin America | Reported | 22% | 11% | -9% | 13% | 0% | 9% | |||||||||
Local Currency | 26% | 12% | -8% | 15% | 4% | 12% | ||||||||||
Greater Asia | Reported | 1% | 5% | -16% | 1% | 5% | 4% | |||||||||
Local Currency | 3% | 6% | -16% | 1% | 7% | 5% | ||||||||||
Total | Reported | 3% | 4% | -12% | 0% | 2% | 1% | |||||||||
Local Currency | 7% | 7% | -10% | 3% | 5% | 4% |
Note: Local currency sales growth is calculated by translating prior year sales at the exchange rates used for the corresponding 2012 period
International Flavors & Fragrances Inc. |
Reconciliation of Like-for-Like Sales Growth |
(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.
% Change in Sales for the Three Months Ended December 31, 2012 | ||||||||||
Reported Sales |
Local Currency |
Exit of Low- |
Like-For-Like |
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Total Company | 6% | 8% | 2% | 10% | ||||||
Flavors: | ||||||||||
North America | 3% | 3% | 12% | 15% | ||||||
EAME | -2% | 3% | 1% | 4% | ||||||
Latin America | 0% | 4% | 2% | 6% | ||||||
Greater Asia | 3% | 4% | 1% | 5% | ||||||
Total Flavors | 1% | 3% | 4% | 7% | ||||||
% Change in Sales for the Twelve Months Ended December 31, 2012 | ||||||||||
Reported Sales |
Local Currency |
Exit of Low- |
Like-For-Like |
|||||||
Total Company | 1% | 4% | 1% | 5% | ||||||
Flavors: | ||||||||||
North America | 3% | 3% | 6% | 9% | ||||||
EAME | -1% | 6% | 1% | 7% | ||||||
Latin America | 0% | 4% | 2% | 6% | ||||||
Greater Asia |
5% | 7% | 1% | 8% | ||||||
Total Flavors | 2% | 5% | 3% | 8% | ||||||
(1) |
Local currency sales growth is calculated by translating prior year sales at the exchange rates used for the | |
corresponding 2012 period | ||
(2) |
Like-for-like is a non-GAAP metric that excludes the impact of exiting low-margin sales activities and foreign exchange | |
|
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.
In the fourth quarter of 2012, there were no items impacting comparability.
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Fourth Quarter 2011 |
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Items Impacting Comparability |
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Reported |
Patent |
Restructuring |
Adjusted |
|||||||||||
Net Sales | 644,383 | - | - | |||||||||||
Cost of Goods Sold | 399,985 | - | - | |||||||||||
Gross Profit | 244,398 | - | - | |||||||||||
Research and Development | 52,459 | - | - | |||||||||||
Selling and Administrative | 134,349 | (33,495) | - | 100,854 | ||||||||||
RSA Expense | 186,808 | (33,495) | - | 153,313 | ||||||||||
Restructuring and other charges, net | 9,805 | - | (9,805) | (a) | - | |||||||||
Operating Profit | 47,785 | 33,495 | 9,805 | 91,085 | ||||||||||
Interest Expense | 10,670 | - | - | |||||||||||
Other (income) expense, net | (3,415) | - | - | |||||||||||
Income before taxes | 40,530 | 33,495 | 9,805 | 83,830 | ||||||||||
Income Taxes | 16,136 | (3,649) | (2,901) | 22,686 | ||||||||||
Net Income | 24,394 | 29,846 | 6,904 | 61,144 | ||||||||||
Earnings per share - diluted | $0.30 | (b) | $0.36 | $0.08 | $0.74 | |||||||||
(a) | Primarily related to category realignment and reduction in workforce ($8M Fragrances, $1.5M Flavors and $0.5M Corporate) | |
(b) | The sum of EPS Reported, plus the per share effects of items added back to reconcile to EPS as Adjusted, may not equal the total EPS as Adjusted, due to rounding differences |
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.
Full Year 2012 | |||||||||||||||||
Items Impacting Comparability | |||||||||||||||||
Reported |
Spanish Tax |
Restructuring |
Adjusted |
||||||||||||||
Net Sales | 2,821,446 | - | - | ||||||||||||||
Cost of Goods Sold | 1,645,912 | - | - | ||||||||||||||
Gross Profit | 1,175,534 | - | - | ||||||||||||||
Research and Development | 233,713 | - | - | ||||||||||||||
Selling and Administrative | 453,535 | - | - | ||||||||||||||
RSA Expense | 687,248 | - |
- |
||||||||||||||
Restructuring and other charges, net | 1,668 | - | (1,668 | ) | (b) |
- |
|||||||||||
Operating Profit | 486,618 | - | 1,668 | 488,286 | |||||||||||||
Interest Expense | 41,753 | - | - | ||||||||||||||
Other (Income) expense, net | 1,450 | - | - | ||||||||||||||
Income before taxes | 443,415 | - | 1,668 | 445,083 | |||||||||||||
Taxes on Income | 189,281 | 72,362 | (a) | (621 | ) | 117,540 | |||||||||||
Net Income | 254,134 |
72,362 |
|
1,047 | 327,543 | ||||||||||||
Earnings per share - diluted | $3.09 | $ | 0.88 | $0.01 | $3.98 | ||||||||||||
(a) | Pursuant to the Spanish tax settlement announced on August 2; includes a $0.71 per share charge to net income covering the fiscal years 2004 - 2010, and a $0.17 per share accrual for uncertain tax positions for years not settled | |
(b) | Related to restructuring program announced in Q1 2012 |
Full Year 2011 | ||||||||||||||
Items Impacting Comparability | ||||||||||||||
Reported |
Patent |
Restructuring |
Adjusted |
|||||||||||
Net Sales | 2,788,018 | - | - | |||||||||||
Cost of Goods Sold | 1,683,362 | - | - | |||||||||||
Gross Profit | 1,104,656 | - | - | |||||||||||
Research and Development | 219,781 | - | - | |||||||||||
Selling and Administrative | 443,974 | (33,495) | - | 410,479 | ||||||||||
RSA Expense | 663,755 | (33,495) | - | 630,260 | ||||||||||
Restructuring and other charges, net | 13,172 | - | (13,172) | (a) | - | |||||||||
Operating Profit | 427,729 | 33,495 | 13,172 | 474,396 | ||||||||||
Interest Expense | 44,639 | - | - | |||||||||||
Other (income) expense, net | 9,544 | - | - | |||||||||||
Income before taxes | 373,546 | 33,495 | 13,172 | 420,213 | ||||||||||
Income Taxes | 106,680 | (3,649) | (3,728) | 114,057 | ||||||||||
Net Income | 266,866 | 29,846 | 9,444 | 306,156 | ||||||||||
Earnings per share - diluted | $3.26 | (b) | $0.36 | $0.11 | $3.74 | |||||||||
(a) | Related to category realignment and reduction in workforce ($8M Fragrances, $1.5M Flavors and $0.5M Corporate) and Fragrance European facility rationalization ($3.4M) | |
(b) | The sum of EPS Reported, plus the per share effects of items added back to reconcile to EPS as Adjusted, may not equal the total EPS as Adjusted, due to rounding differences |
Source:
Investor Relations:
International Flavors & Fragrances Inc.
Shelley
Young, 212-708-7271
Director, Investor Relations