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IFF Reports Strong Third Quarter 2007 Results

        - 13% Increase in Adjusted EPS Driven by Strong Sales Growth -

NEW YORK, Oct. 31 /PRNewswire-FirstCall/ -- International Flavors & Fragrances Inc. (NYSE: IFF), a leading global creator of flavors and fragrances for consumer products, today reported strong growth in sales for the third quarter of 2007. Earnings per share as reported were $.67 in the quarter compared to $.70 per share in the third quarter of 2006.

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The 2007 results include a pension curtailment loss of $5.9 million or $.04 per share resulting from changes to the Company's U.S. defined benefit pension plan. The 2006 results included a $3 million or $.03 per share insurance recovery related to a 2005 product contamination issue and $6 million or $.04 per share of other income relating primarily to gains on disposition of assets. Excluding these items from the respective years, the 2007 third quarter earnings per share would have been $.71 compared to $.63 per share in the 2006 quarter, representing a 13 percent increase.

"Our strong financial performance in the third quarter is a result of significant growth in our Flavors business combined with another quarter of strong growth in Fine Fragrances," said Robert M. Amen, Chairman and Chief Executive Officer. "We continue to build positive momentum by focusing on our three strategic drivers -- customers, people and innovation.

"Looking ahead, IFF is well positioned to benefit from the strong global economy and the rapid growth in consumer sectors of Asia, Latin America and Eastern Europe."

Third quarter 2007 sales were $583 million, an increase of 8 percent from the prior year quarter. Reported sales benefited from the generally weaker U.S. dollar, mainly against the Euro and Pound Sterling; at comparable exchange rates, sales would have increased 5 percent over the 2006 quarter.

Flavors business unit sales increased 12 percent, due to new wins and volume growth in each region. Flavor sales were particularly strong in Latin America, increasing 31 percent, with excellent growth in North America and Greater Asia.

The 6 percent increase in total Fragrance business unit sales was driven by an 11 percent increase in both fine and beauty care sales and ingredient sales. The fine and beauty care sales benefited from both new product introductions and continued success of existing creations. The growth in ingredient sales was attributable to higher volumes. Functional fragrance sales declined by 1 percent.

    Third Quarter 2007 Highlights
    -- Gross profit, as a percentage of sales, was 41.9 percent compared with
       42.5 percent in the prior year quarter. The decline was mainly due to
       lower selling prices for fragrance ingredients and some impact of
       higher material costs as well as lower functional fragrance volumes.
    -- Research and Development ("R&D") spending, as a percentage of sales,
       remained at the prior year level.
    -- Selling and Administrative ("S&A") expenses, as a percentage of sales,
       were 16.2 percent in the current quarter compared to 16.3 percent in
       2006, reflecting good cost control.  The 2006 results included the
       benefit of a $3 million insurance recovery related to the 2005 product
       contamination matter; excluding this benefit, the 2006 S&A expenses
       would have been 16.9 percent of sales.
    -- Interest expense increased by $2 million from the prior year, primarily
       due to higher average interest rates on borrowings. The average
       interest rate for the third quarter was 4.4 percent compared to 3.2
       percent for the 2006 quarter.
    -- The Company's third quarter effective tax rate was 27.0 percent
       compared to 29.8 percent in the prior year quarter. The lower effective
       tax rate for the three months ended September 30, 2007 was the result
       of a greater percentage of consolidated pre-tax earnings in lower tax

    Business Unit Performance

Flavors Business Unit profitability as reported increased 8 percent compared to the 2006 quarter, on the 12 percent sales increase. The comparison with the prior year period was affected by the $3 million insurance recovery related to the product contamination matter; excluding the insurance recovery from the prior year comparative, Flavors profitability would have increased 16 percent over the 2006 quarter. The profitability improvement was enabled by the strong sales growth, favorable product mix and continued good cost control.

Fragrance Business Unit Profitability was flat in comparison to the 2006 quarter on the 6 percent sales increase. Profitability was impacted by lower fragrance ingredient selling prices, some impact of higher raw material costs and lower functional fragrance volumes.

About International Flavors & Fragrances Inc.

IFF is a leading creator of flavors and fragrances used in a wide variety of consumer products and packaged goods. Consumers experience these unique scents and tastes in fine fragrances and beauty care, detergents and household goods, as well as beverages, confectionary and food products. The Company leverages its competitive advantages of brand understanding and consumer insight combined with its focus on R&D and innovation, to provide customers with differentiated product offerings. A member of the S&P 500 Index, IFF has sales, manufacturing and creative facilities in 30 countries worldwide. For more information, please visit our Web site at

Audio Web Cast

An audio Web cast, to discuss the Company's third quarter 2007 financial results and outlook, will be held today at 10:00 a.m. ET. Interested parties can access the Web cast and accompanying slide presentation on the Company's Web site at, under the Investor Relations section. For those unable to listen to the live broadcast, a replay will be available on the Company's Web site approximately one hour after the event and will remain available on the IFF Web site until 11:59 p.m. on November 14, 2007.

Cautionary Statement Under The Private Securities Litigation Reform Act of 1995

Statements in this report, which are not historical facts or information, are "forward-looking statements" within the meaning of The Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on management's current assumptions, estimates and expectations. Certain of such forward-looking information may be identified by such terms as "expect," "believe," "outlook," "guidance," "may," and similar terms or variations thereof. All information concerning future revenues, tax rates or benefits, interest savings, earnings and other future financial results or financial position, constitutes forward-looking information. Such forward-looking statements involve significant risks, uncertainties and other factors. Actual results of the Company may differ materially from any future results expressed or implied by such forward-looking statements. Such factors include, among others, the following: general economic and business conditions in the Company's markets, including economic, population health and political uncertainties; interest rates; the price, quality and availability of raw materials; the Company's ability to implement its business strategy, including the achievement of anticipated cost savings, profitability and growth targets; the impact on cash and the impact of increased borrowings related to the July 2007 share repurchase program; the impact of currency fluctuation or devaluation in the Company's principal foreign markets and the success of the Company's hedging and risk management strategies; the outcome of uncertainties related to litigation; the impact of possible pension funding obligations and increased pension expense on the Company's cash flow and results of operations; and the effect of legal and regulatory proceedings, as well as restrictions imposed on the Company, its operations or its representatives by U.S. and foreign governments. The Company intends its forward-looking statements to speak only as of the time of such statements and does not undertake or plan to update or revise them as more information becomes available or to reflect changes in expectations, assumptions or results.

Any public statements or disclosures by IFF following this report that modify or impact any of the forward-looking statements contained in or accompanying this report will be deemed to modify or supersede such outlook or other forward-looking statements in or accompanying this report.

                   International Flavors & Fragrances Inc.
                        Consolidated Income Statement
                 (Amounts in thousands except per share data)

                                  Quarter Ended          Nine Months Ended
                                  September 30,            September 30,

                                                %                          %
                            2006      2007    Change    2006     2007   Change

    Net sales             $539,135 $583,313    8%  $1,581,072 $1,723,140    9%
    Cost of goods
     sold                 310,149   339,175    9%     907,856    996,225   10%
    Gross margin on
     sales                228,986   244,138    7%     673,216    726,915    8%
    Research & development
     expenses              46,471    49,733    7%     137,661    145,125    5%
    Selling and
      expenses             88,092    94,464    7%     261,364    276,933    6%
    Amortization            3,713     3,555   -4%      11,134     10,666   -4%
    Curtailment loss            -     5,943                 -      5,943
    Restructuring and other
     charges                  316         -               673          -
    Interest expense        6,475     8,596   33%      18,148     25,306   39%
    Other expense (income),
     net                   (6,783)    1,239 -118%      (6,630)    (1,747) -74%
    Pretax income          90,702    80,608  -11%     250,866    264,689    6%
    Income taxes           27,056    21,764  -20%      72,348     64,784  -10%
    Net income             63,646    58,844   -8%     178,518    199,905   12%

    Earnings per share -
     basic                  $0.71     $0.68   -4%       $1.97      $2.26   15%
    Earnings per share -
     diluted                $0.70     $0.67   -4%       $1.95      $2.23   14%

    Average shares outstanding
    (in thousands):
    Basic                  90,053    87,063   -3%      90,786     88,538   -2%
    Diluted                90,988    88,056   -3%      91,489     89,612   -2%

                   International Flavors & Fragrances Inc.
                     Consolidated Condensed Balance Sheet
                            (Amounts in thousands)

                                                December 31,   September 30,
                                                   2006             2007

    Cash and cash equivalents                     $114,508        $61,964
    Short-term investments                             604            600
    Receivables                                    405,302        486,389
    Inventories                                    446,606        467,903
    Other current assets                           112,783        101,405
     Total current assets                        1,079,803      1,118,261

    Property, plant and equipment, net             495,124        492,593
    Goodwill and other intangibles, net            745,716        735,049
    Other assets                                   158,261        187,756
    Total assets                                $2,478,904     $2,533,659

    Bank borrowings and overdrafts                 $15,897        $52,578
    Other current liabilities                      430,874        361,430
     Total current liabilities                     446,771        414,008

    Long-term debt                                 791,443      1,134,493
    Non-current liabilities                        335,522        437,451

    Shareholders' equity                           905,168        547,707
    Total liabilities and shareholders'
     equity                                     $2,478,904     $2,533,659

                   International Flavors & Fragrances Inc.
                     Consolidated Statement of Cash Flows
                            (Amounts in thousands)

                                             September 30,     September 30,
                                                  2006             2007
    Cash flows from operating activities:
    Net income                                   $178,518        $199,905
    Adjustments to reconcile to net cash
     provided by operations:
      Depreciation and amortization                66,910          62,825
      Deferred income taxes                        (8,904)        (12,202)
      Gain on disposal of assets                  (14,682)         (7,358)
      Equity based compensation                    13,015          13,310
      Curtailment loss                                  -           5,943
      Changes in assets and liabilities:
        Current receivables                       (59,694)        (66,354)
        Inventories                                12,328          (2,381)
        Current payables                           34,439         (19,338)
        Changes in other assets, net               34,237          37,760
        Changes in other liabilities, net         (18,660)        (24,087)
    Net cash provided by operations               237,507         188,023
    Cash flows from investing activities:
     Net change in short-term investments              25            (311)
     Additions to property, plant and
      equipment                                   (30,883)       (36,504)
     Proceeds from disposal of assets              14,888           9,139
    Net cash used in investing activities         (15,970)        (27,676)
    Cash flows from financing activities:
     Cash dividends paid to shareholders          (50,815)        (56,248)
     Net change in bank borrowings and
      overdrafts                                  (36,804)       (137,837)
     Proceeds from long-term debt                 375,000         500,000
     Repayments of long-term debt                (499,300)              -
     Proceeds from issuance of stock under
      stock plans                                  40,494          48,441
     Excess tax benefits on stock options
      exercised                                       362           6,353
     Purchase of treasury stock                  (162,221)       (576,832)
    Net cash used in financing activities        (333,284)       (216,123)
    Effect of exchange rates changes on cash
     and cash equivalents                           1,965           3,232
    Net change in cash and cash equivalents      (109,782)        (52,544)
    Cash and cash equivalents at beginning of
     year                                         272,545         114,508
    Cash and cash equivalents at end of period   $162,763         $61,964

                   International Flavors & Fragrances Inc.
                          Business Unit Performance
                            (Amounts in thousands)

                                    Three Months Ended September 30, 2007

    (DOLLARS IN THOUSANDS)       Flavors   Fragrances   Expenses  Consolidated

    Net sales                   $256,423    $326,890      $-         $583,313
    Operating profit             $48,111     $55,779   $(7,504)        96,386

    Interest expense                                                   (8,596)
    Curtailment loss                                                   (5,943)
    Other income (expense), net                                        (1,239)
    Income before taxes on income                                     $80,608

                                    Three Months Ended September 30, 2006

    (DOLLARS IN THOUSANDS)        Flavors  Fragrances  Expenses Consolidated

    Net sales                   $229,734    $309,401     $-          $539,135
    Segment profit               $44,080     $56,486   $(9,856)       $90,710
    Restructuring and other
     charges                         553        (824)      (45)          (316)
    Operating profit             $44,633     $55,662   $(9,901)        90,394

    Interest expense                                                   (6,475)
    Other income (expense), net                                         6,783
    Income before taxes on income                                     $90,702

SOURCE  International Flavors & Fragrances Inc.
    -0-                             10/31/2007
    /CONTACT:  Investors, Yvette Rudich, Director of Corporate Communications,
+1-212-708-7164, Media, Melissa Sachs, Manager, Corporate Communications,
+1-212-708-7278, both of International Flavors & Fragrances Inc./
    /Photo:  NewsCom:
              AP Archive:
              PRN Photo Desk,
    /Web site:

CO:  International Flavors & Fragrances Inc.
ST:  New York

-- NYW026 --
9796 10/31/2007 06:45 EDT