IFF Reported sales for the full year 2000
IFF Reported sales for the full year 2000
New York, N.Y., January 29, 2001 --- International Flavors & Fragrances Inc. (“IFF” or “the Company”) reported sales for the fourth quarter totaled $384,533,000;; sales for the full year 2000 totaled $1,462,795,000. The Company acquired Bush Boake Allen (“BBA”), effective November 3, 2000, and the BBA operating results are included in the Company's consolidated results from that date.
Excluding BBA, the Company's sales for the fourth quarter and full year 2000 were $318,634,000 and $1,396,896,000, respectively, representing declines of 5% in the quarter and 3% for the full year in comparison to the 1999 comparable periods. Earnings per share, excluding BBA and related costs associated with the acquisition, were $.09 and $1.29 for the fourth quarter and full year, respectively. These earnings per share include the effect of certain nonrecurring charges recorded in connection with a previously announced reorganization. Excluding the effects of these nonrecurring charges, earnings per share for the fourth quarter and full year were $.25 and $1.56, respectively.
Excluding sales results of BBA, fourth quarter 2000 local currency fragrance sales were led by Europe, Africa and the Middle East (“EAME”) and North America, with gains of 15% and 7%, respectively. Local currency sales in Asia-Pacific increased 1% and Latin American sales declined 6%. Asia-Pacific and EAME led the growth in flavor sales, with respective local currency increases of 11% and 4%. Latin America flavor sales grew 2%, while North America flavor sales declined 15%, reflecting the continued slow business conditions facing many of the Company's food customers. On a consolidated basis, local currency sales increased 2% for the quarter. However, the local currency sales gains were unfavorably impacted on translation of the Euro and the major European currencies into the continuing strong U.S. dollar, resulting in the 5% decline for the quarter in reported dollars.
For the full year 2000, local currency sales increased 2%. Local currency growth in fragrances was strongest in Asia-Pacific and EAME, with sales gains of 8% and 7%, respectively. North America fragrance sales increased 3% for the year, while Latin America sales declined 2%, reflecting the slow economic environment in much of that region. Flavor sales, in local currency, were also strongest in Asia-Pacific and EAME, with respective increases of 9% and 4%. Flavor sales in Latin America grew 2% from the prior year, while North America flavor sales were down 12% for the year. The local currency sales gains were unfavorably impacted on translation of the Euro and the major European currencies into the continuing strong U.S. dollar resulting in the 3% decline for the year in reported dollars.
On October 5, 2000, the Company announced a significant reorganization, including management changes, consolidation of production facilities and related actions. The total cost of these actions is expected to be approximately $90 million - $100 million through mid-2002, and the reorganization is expected to yield annual savings by the year 2003 in the range of $25 million - $30 million. A portion of these savings will be reinvested in the business; however, the Company expects a large portion to contribute to improving net earnings.
In the fourth quarter 2000, the Company recorded approximately $24.2 million ($.16 per share) of charges relating to the reorganization as well as certain costs associated with the integration of BBA. In connection with the reorganization, in October 2000, the Company initiated a voluntary retirement incentive program for United States-based employees meeting certain eligibility requirements. Those eligible employees who electeding to take the incentive will receive additional credit, for pension purposes, in terms of age and service, as well as certain other benefits. A substantial portion of the nonrecurring charge in the quarter relates to costs associated with the acceptance of this program by 85 employees; the balance of the charges recognized in the quarter relate to additional employee separation costs and other reorganization and integration activities during the quarter.
For the full year, the Company recorded nonrecurring charges of $41.3 million ($.27 per share) essentially all of which related to employee separation, early retirement programs and other reorganization and integration activities. Certain costs associated with the merger and integration of BBA operations were accounted for as part of the acquisition and did not affect current earnings.
Richard A. Goldstein, Chairman and Chief Executive Officer of IFF, said, “I am very pleased with the progress to date on the Company's reorganization and the integration of BBA into the new “One IFF.”
We are in the process of finalizing our operating strategies and integration plans that are expected to create significant cost savings opportunities, allow IFF to operate more efficiently and enable us to better service our customers. I look forward to sharing more details with our shareholders and the investment community by the end of February.”
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Cautionary Statement Under the Private Securities Litigation Reform Act of 1995
Statements in this release which are not historical facts or information are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, and are subject to risks and uncertainties that could cause IFF's actual results to differ materially from those expressed or implied by such forward-looking statements. Risks and uncertainties with respect to IFF's business include general economic and business conditions, the price and availability of raw materials, and political and economic uncertainties, including the fluctuation or devaluation of currencies in countries in which IFF does business.
Douglas J. Wetmore