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As Of Filer Filing For·On·As Docs:Size 8/05/19 Int’l Flavors & Fragrances Inc 8-K:2,9 8/05/19 13:881K |
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Exhibit |
Reported
(GAAP) | Adjusted (Non-GAAP)1 | |||||||||||
Sales | Operating Profit | EPS | Sales | Operating Profit | EPS | EPS
ex Amortization | ||||||
$1.3 B | $200 M | $1.20 | $1.3 B | $214 M | $1.30 | $1.61 |
• | Reported net sales for the second quarter totaled $1.3 billion, an increase of 40% from $920 million in 2018, including the contribution of sales related to Frutarom. On a combined basis, currency neutral sales increased 1%, including the net contribution of acquisitions and divested businesses. |
• | Reported
earnings per share (EPS) for the second quarter was $1.20 per diluted share versus $1.25 per diluted share reported in 2018. Excluding those items that affect comparability, adjusted EPS excluding amortization was $1.61 per diluted share in 2019 versus $1.71 in the year-ago period, as adjusted operating profit growth was more than |
Reported (GAAP) | Currency Neutral (Non-GAAP) | ||||||
Sales | Segment
Profit | Sales | Segment Profit | ||||
Scent | 1% | 13% | 4% | 19% | |||
Taste1 | (4)% | (11)% | (1)% | (6)% | |||
Frutarom | — | — | — | — |
• | On a reported basis, sales increased 1%, or $6.2 million, to $475.7 million. Currency neutral sales improved 4%, with growth in nearly all regions and
categories. Performance was strongest in Fragrance Ingredients and Consumer Fragrances, both increasing mid single- digits. Fine Fragrance grew low single-digits led by strong new wins, particularly in EAME. |
• | Scent segment profit increased 13% on a reported basis and 19% on a currency neutral basis reflecting cost and productivity initiatives, along with more favorable price to input costs. |
• | On
a reported basis, sales decreased 4%, or $16.4 million, to $434.2 million. Currency neutral sales decreased approximately 1%, as growth in Greater Asia and EAME were more than offset by continued volume erosion with multinational customers in Latin America and North America. From a category perspective, growth was strongest in Savory and Beverage. |
• | Taste segment profit decreased 11% on a reported basis and 6% on a currency neutral
basis as the benefits from productivity initiatives were more than offset by volume declines, unfavorable price to input costs and mix. |
• | On a reported basis, sales were $381.7 million. On a standalone basis, currency neutral sales remained constant, including the net contribution of acquisitions and divested businesses. Results were driven by the benefit related to acquisitions offset by declines in F&F ingredients - notably CitraSource - as well as raw material-driven price decreases in Natural Colors and weakness in EAME Taste, Savory Solutions and Trade & Marketing. |
• | Segment
profit contributed $37 million in the second quarter, or $77 million excluding amortization. Margin performance continued to be driven by disciplined cost management and acquisition-related synergies. |
• | On August 5, 2019, the Board of Directors authorized a 3%, or $0.02 increase, in the quarterly dividend to $0.75 per share of the Company’s common stock. The quarterly dividend is payable on October
4, 2019 to shareholders of record as of September 23, 2019. Including this authorization, IFF has increased its quarterly dividend payment for the tenth consecutive year. |
Original Guidance | Revised Guidance | |
Sales | $5.2B - $5.3B | $5.15B
- $5.25B |
Adjusted EPS (1) | $4.90 - $5.10 | $4.85 - $5.05 |
Adjusted EPS Ex Amortization (1) | $6.30 - $6.50 | $6.15 - $6.35 |
Three Months Ended June 30, | Six
Months Ended June 30, | |||||||||||||||||||
2019 | 2018 | % Change | 2019 | 2018 | % Change | |||||||||||||||
Net sales | $ | 1,291,568 | $ | 920,016 | 40 | % | $ | 2,588,970 | $ | 1,850,944 | 40 | % | ||||||||
Cost
of goods sold | 745,329 | 521,299 | 43 | % | 1,511,472 | 1,046,419 | 44 | % | ||||||||||||
Gross
profit | 546,239 | 398,717 | 37 | % | 1,077,498 | 804,525 | 34 | % | ||||||||||||
Research
and development expenses | 84,816 | 74,767 | 13 | % | 175,412 | 153,244 | 14 | % | ||||||||||||
Selling
and administrative expenses | 210,100 | 157,407 | 33 | % | 423,282 | 300,051 | 41 | % | ||||||||||||
Amortization
of acquisition-related intangibles | 47,909 | 9,584 | NMF | 95,534 | 18,769 | NMF | ||||||||||||||
Restructuring
and other charges, net | 2,525 | 1,186 | 113 | % | 18,699 | 1,903 | NMF | |||||||||||||
Losses
on sales of fixed assets | 952 | 1,264 | (25 | )% | 764 | 1,195 | (36 | )% | ||||||||||||
Operating
profit | 199,937 | 154,509 | 29 | % | 363,807 | 329,363 | 10 | % | ||||||||||||
Interest
expense | 32,593 | 53,246 | (39 | )% | 69,165 | 69,841 | (1 | )% | ||||||||||||
Other
income, net | (2,137 | ) | (20,655 | ) | (90 | )% | (9,415 | ) | (21,232 | ) | (56 | )% | ||||||||
Income
before taxes | 169,481 | 121,918 | 39 | % | 304,057 | 280,754 | 8 | % | ||||||||||||
Taxes
on income | 30,612 | 22,769 | 34 | % | 53,974 | 52,190 | 3 | % | ||||||||||||
Net
income | 138,869 | 99,149 | 40 | % | 250,083 | 228,564 | 9 | % | ||||||||||||
Net
income attributable to noncontrolling interest | 2,492 | — | — | % | 4,877 | — | — | % | ||||||||||||
Net
income attributable to IFF | 136,377 | 99,149 | 38 | % | 245,206 | 228,564 | 7 | % | ||||||||||||
Net
income per share - basic (1) | $ | 1.21 | $ | 1.25 | $ | 2.19 | $ | 2.89 | ||||||||||||
Net
income per share - diluted (1) | $ | 1.20 | $ | 1.25 | $ | 2.16 | $ | 2.87 | ||||||||||||
Average
number of shares outstanding - basic | 111,996 | 79,065 | 111,930 | 79,041 | ||||||||||||||||
Average
number of shares outstanding - diluted | 112,872 | 79,303 | 113,131 | 79,347 |
(1) | For
2019, net income per share reflects adjustments related to the redemption value of certain redeemable noncontrolling interests. |
June
30, | |||||||
2019 | 2018 | ||||||
Cash, cash equivalents, and restricted cash | $ | 454,820 | $ | 648,522 | |||
Receivables | 1,046,028 | 937,765 | |||||
Inventories | 1,163,653 | 1,078,537 | |||||
Other
current assets | 325,525 | 277,036 | |||||
Total current assets | 2,990,026 | 2,941,860 | |||||
Property,
plant and equipment, net | 1,316,305 | 1,241,152 | |||||
Goodwill and other intangibles, net | 8,450,984 | 8,417,710 | |||||
Other assets | 590,767 | 288,673 | |||||
Total
assets | 13,348,082 | 12,889,395 | |||||
Short term borrowings | $ | 84,231 | $ | 48,642 | |||
Other
current liabilities | 1,065,302 | 1,079,669 | |||||
Total current liabilities | 1,149,533 | 1,128,311 | |||||
Long-term
debt | 4,428,675 | 4,504,417 | |||||
Non-current liabilities | 1,444,347 | 1,131,487 | |||||
Redeemable
noncontrolling interests | 115,540 | 81,806 | |||||
Shareholders' equity | 6,209,987 | 6,043,374 | |||||
Total
liabilities and shareholders' equity | $ | 13,348,082 | $ | 12,889,395 |
Six Months Ended June 30, | |||||||
2019 | 2018 | ||||||
Cash
flows from operating activities: | |||||||
Net income | $ | 250,083 | $ | 228,564 | |||
Adjustments to reconcile to net cash provided by operating activities | |||||||
Depreciation
and amortization | 154,814 | 64,968 | |||||
Deferred income taxes | (27,214 | ) | 14,342 | ||||
Losses on sale of assets | 764 | 1,195 | |||||
Stock-based
compensation | 18,300 | 15,173 | |||||
Pension contributions | (10,681 | ) | (9,963 | ) | |||
Product recall claim settlement, net of insurance proceeds received | — | (12,969 | ) | ||||
Changes
in assets and liabilities, net of acquisitions: | |||||||
Trade receivables | (87,111 | ) | (99,963 | ) | |||
Inventories | (71,545 | ) | (67,940 | ) | |||
Accounts
payable | (7,645 | ) | (7,139 | ) | |||
Accruals for incentive compensation | (29,338 | ) | (25,158 | ) | |||
Other current payables and accrued expenses | (11,934 | ) | 11,028 | ||||
Other
assets | (29,989 | ) | (65,620 | ) | |||
Other liabilities | 36,412 | 8,651 | |||||
Net cash provided by operating activities | 184,916 | 55,169 | |||||
Cash
flows from investing activities: | |||||||
Cash paid for acquisitions, net of cash received | (49,064 | ) | (22 | ) | |||
Additions to property, plant and equipment | (119,094 | ) | (67,421 | ) | |||
Proceeds
from life insurance contracts | 1,890 | — | |||||
Maturity of net investment hedges | — | (2,642 | ) | ||||
Proceeds
from disposal of assets | 24,685 | 618 | |||||
Contingent consideration paid | (4,655 | ) | — | ||||
Net cash used in investing activities | (146,238 | ) | (69,467 | ) | |||
Cash
flows from financing activities: | |||||||
Cash dividends paid to shareholders | (155,578 | ) | (108,824 | ) | |||
Increase in revolving credit facility and short term borrowings | 8 | 110,259 | |||||
Deferred
financing costs | — | (1,401 | ) | ||||
Repayments on debt | (47,417 | ) | — | ||||
Contingent consideration paid | (21,791 | ) | — | ||||
Proceeds
from issuance of stock in connection with stock options | 200 | — | |||||
Employee withholding taxes paid | (9,855 | ) | (9,096 | ) | |||
Purchase of treasury stock | — | (15,475 | ) | ||||
Net
cash used in financing activities | (234,433 | ) | (24,537 | ) | |||
Effect of exchange rates changes on cash, cash equivalents and restricted cash | 2,053 | (6,788 | ) | ||||
Net
change in cash, cash equivalents and restricted cash | (193,702 | ) | (45,623 | ) | |||
Cash, cash equivalents and restricted cash at beginning of year | 648,522 | 368,046 | |||||
Cash,
cash equivalents and restricted cash at end of period | $ | 454,820 | $ | 322,423 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Net
Sales | |||||||||||||||
Taste | $ | 434,179 | $ | 450,540 | $ | 878,781 | $ | 899,559 | |||||||
Scent | 475,671 | 469,476 | 964,023 | 951,385 | |||||||||||
Frutarom | 381,718 | — | 746,166 | — | |||||||||||
Consolidated | $ | 1,291,568 | $ | 920,016 | $ | 2,588,970 | $ | 1,850,944 | |||||||
Segment
Profit | |||||||||||||||
Taste | $ | 98,081 | $ | 109,605 | $ | 206,536 | $ | 221,169 | |||||||
Scent | 91,244 | 80,780 | 177,059 | 174,056 | |||||||||||
Frutarom | 37,493 | — | 66,584 | — | |||||||||||
Global
Expenses | (12,886 | ) | (20,572 | ) | (31,559 | ) | (44,398 | ) | |||||||
Operational Improvement Initiatives | (534 | ) | (403 | ) | (940 | ) | (1,429 | ) | |||||||
Acquisition
Related Costs | — | 4 | — | 518 | |||||||||||
Integration Related Costs | (11,417 | ) | (993 | ) | (26,314 | ) | (993 | ) | |||||||
Restructuring
and Other Charges, net | (2,525 | ) | (193 | ) | (18,699 | ) | (910 | ) | |||||||
Losses on Sale of Assets | (952 | ) | (1,264 | ) | (764 | ) | (1,195 | ) | |||||||
FDA
Mandated Product Recall | — | — | — | (5,000 | ) | ||||||||||
Frutarom Acquisition Related Costs | 1,433 | (12,455 | ) | (8,096 | ) | (12,455 | ) | ||||||||
Operating
profit | 199,937 | 154,509 | 363,807 | 329,363 | |||||||||||
Interest Expense | (32,593 | ) | (53,246 | ) | (69,165 | ) | (69,841 | ) | |||||||
Other
income, net | 2,137 | 20,655 | 9,415 | 21,232 | |||||||||||
Income before taxes | $ | 169,481 | $ | 121,918 | $ | 304,057 | $ | 280,754 | |||||||
Operating
Margin | |||||||||||||||
Taste | 23 | % | 24 | % | 24 | % | 25 | % | |||||||
Scent | 19 | % | 17 | % | 18 | % | 18 | % | |||||||
Frutarom | 10 | % | — | % | 9 | % | — | % | |||||||
Consolidated | 15 | % | 17 | % | 14 | % | 18 | % |
Q2 Taste | Sales | Segment Profit | ||
% Change - Reported | (4)% | (11)% | ||
Currency
Impact | 3% | 5% | ||
% Change - Currency Neutral | (1)% | (6)% | ||
Q2
Scent | Sales | Segment Profit | ||
% Change - Reported | 1% | 13% | ||
Currency Impact | 3% | 6% | ||
%
Change - Currency Neutral | 4% | 19% |
YTD Taste | Sales | Segment Profit | |
% Change - Reported | (2)% | (7)% | |
Currency
Impact | 3% | 4% | |
% Change - Currency Neutral | 1% | (3)% | |
YTD Scent | Sales | Segment
Profit | |
% Change - Reported | 1% | 2% | |
Currency Impact | 3% | 6% | |
% Change - Currency Neutral | 4% | 7%* |
Reconciliation of Gross Profit | |||||||
Second Quarter | |||||||
(DOLLARS IN THOUSANDS) | 2019 | 2018 | |||||
Reported
(GAAP) | $ | 546,239 | $ | 398,717 | |||
Operational Improvement Initiatives (a) | 534 | 403 | |||||
Integration
Related Costs (b) | 165 | — | |||||
Adjusted (Non-GAAP) | $ | 546,938 | $ | 399,120 |
Reconciliation
of Selling and Administrative Expenses | |||||||
Second Quarter | |||||||
(DOLLARS IN THOUSANDS) | 2019 | 2018 | |||||
Reported (GAAP) | $ | 210,100 | $ | 157,407 | |||
Acquisition
Related Costs | — | 4 | |||||
Integration Related Costs (b) | (11,043 | ) | — | ||||
Frutarom Acquisition Related Costs (d) | 1,433 | (12,455 | ) | ||||
Adjusted
(Non-GAAP) | $ | 200,490 | $ | 144,956 |
Reconciliation of Operating Profit | |||||||
Second
Quarter | |||||||
(DOLLARS IN THOUSANDS) | 2019 | 2018 | |||||
Reported (GAAP) | $ | 199,937 | $ | 154,509 | |||
Operational Improvement
Initiatives (a) | 534 | 403 | |||||
Acquisition Related Costs | — | (4 | ) | ||||
Integration Related Costs (b) | 11,417 | 993 | |||||
Restructuring
and Other Charges, net (c) | 2,525 | 193 | |||||
Losses on Sale of Assets | 952 | 1,264 | |||||
Frutarom Acquisition Related Costs (d) | (1,433 | ) | 12,455 | ||||
Adjusted
(Non-GAAP) | $ | 213,932 | $ | 169,813 |
Reconciliation of Adjusted (Non-GAAP) Operating Profit Margin ex. Amortization | |||||||
(DOLLARS
IN THOUSANDS) | Second Quarter | ||||||
Numerator | 2019 | 2018 | |||||
Adjusted (Non-GAAP) Operating Profit | $ | 213,932 | $ | 169,813 | |||
Amortization
of Acquisition related Intangible Assets | 47,909 | 9,584 | |||||
Adjusted (Non-GAAP) Operating Profit ex. Amortization | 261,841 | 179,397 | |||||
Denominator | |||||||
Sales | 1,291,568 | 920,016 | |||||
Adjusted
(Non-GAAP) Operating Profit Margin ex. Amortization | 20.3 | % | 19.5 | % |
Reconciliation
of Net Income | |||||||||||||||||||||||||||||||
Second Quarter | |||||||||||||||||||||||||||||||
2019 | 2018 | ||||||||||||||||||||||||||||||
(DOLLARS IN THOUSANDS) | Income before taxes | Taxes on income (e) | Net Income Attributable
to IFF (f) | Diluted EPS | Income before taxes | Taxes on income (e) | Net Income Attributable to IFF | Diluted EPS (g) | |||||||||||||||||||||||
Reported (GAAP) | $ | 169,481 | $ | 30,612 | $ | 136,377 | $ | 1.20 | $ | 121,918 | $ | 22,769 | $ | 99,149 | $ | 1.25 | |||||||||||||||
Operational
Improvement Initiatives (a) | 534 | 176 | 358 | — | 403 | 142 | 261 | — | |||||||||||||||||||||||
Acquisition
Related Costs | — | — | — | — | (4 | ) | (1 | ) | (3 | ) | — | ||||||||||||||||||||
Integration
Related Costs (b) | 11,417 | 2,574 | 8,843 | 0.08 | 993 | — | 993 | 0.01 | |||||||||||||||||||||||
Restructuring
and Other Charges, net (c) | 2,525 | 552 | 1,973 | 0.02 | 193 | 46 | 147 | — | |||||||||||||||||||||||
Losses
on Sale of Assets | 952 | 235 | 717 | 0.01 | 1,264 | 263 | 1,001 | 0.01 | |||||||||||||||||||||||
Frutarom
Acquisition Related Costs (d) | (1,433 | ) | (143 | ) | (1,290 | ) | (0.01 | ) | 36,989 | 6,543 | 30,446 | 0.38 | |||||||||||||||||||
Adjusted
(Non-GAAP) | $ | 183,476 | $ | 34,006 | $ | 146,978 | $ | 1.30 | $ | 161,756 | $ | 29,762 | $ | 131,994 | $ | 1.66 |
Reconciliation
of Adjusted (Non-GAAP) EPS ex. Amortization | |||||||
Second Quarter | |||||||
(DOLLARS AND SHARE AMOUNTS IN THOUSANDS) | 2019 | 2018 | |||||
Numerator | |||||||
Adjusted (Non-GAAP) Net Income | $ | 146,978 | $ | 131,994 | |||
Amortization
of Acquisition related Intangible Assets | 47,909 | 9,584 | |||||
Tax impact on Amortization of Acquisition related Intangible Assets (e) | 12,635 | 5,673 | |||||
Amortization
of Acquisition related Intangible Assets, net of tax (h) | 35,274 | 3,911 | |||||
Adjusted (Non-GAAP) Net Income ex. Amortization | 182,252 | 135,905 | |||||
Denominator | |||||||
Weighted
average shares assuming dilution (diluted) | 112,872 | 79,303 | |||||
Adjusted (Non-GAAP) EPS ex. Amortization | $ | 1.61 | $ | 1.71 |
(a) | Represents
accelerated depreciation related to a plant relocation in India and China. | ||||||||||||||
(b) | For 2019, represents costs related to the integration of the Frutarom acquisition, principally advisory services. For 2018, represents costs related to the integration of David Michael. | ||||||||||||||
(c) | For 2019, represents severance costs related primarily to Frutarom. For 2018, represents severance costs related to the 2017 Productivity Program. | ||||||||||||||
(d) | Represents transaction-related costs and expenses related to the acquisition of Frutarom, including adjustments that reduce
the contingent consideration payable related to certain acquisitions made by Frutarom. In 2019, amount primarily relates to transaction costs included in Selling and administrative expenses. For 2018, amount includes $10.6 million of bridge loan commitment fees included in Interest expense, $25.0 million mark-to-market loss adjustment on an interest rate derivative and an $11.0 million mark-to-market gain adjustment on a foreign currency derivative, and $12.5 million of transaction costs included in administrative expenses. | ||||||||||||||
(e) | 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 fiscal year 2019, 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). For amortization, the tax benefit has been calculated based on the statutory rate on a country by country basis. | ||||||||||||||
(f) | For 2019, net income is reduced by income attributable to noncontrolling interest of $2.5M. | ||||||||||||||
(g) | The sum of these items does not foot due to rounding. | ||||||||||||||
(h) | Represents
all amortization of intangible assets acquired in connection with acquisitions, net of tax. |
Reconciliation of Gross Profit | |||||||
Second Quarter Year-to-Date | |||||||
(DOLLARS IN THOUSANDS) | 2019 | 2018 | |||||
Reported
(GAAP) | $ | 1,077,498 | $ | 804,525 | |||
Operational Improvement Initiatives (a) | 940 | 856 | |||||
Integration
Related Costs (c) | 321 | — | |||||
FDA Mandated Product Recall (e) | — | 5,000 | |||||
Frutarom Acquisition Related Costs (g) | 7,850 | — | |||||
Adjusted
(Non-GAAP) | $ | 1,086,609 | $ | 810,381 |
Reconciliation of Selling and Administrative Expenses | |||||||
Second
Quarter Year-to-Date | |||||||
(DOLLARS IN THOUSANDS) | 2019 | 2018 | |||||
Reported (GAAP) | $ | 423,282 | $ | 300,051 | |||
Acquisition
Related Costs (b) | — | 518 | |||||
Integration Related Costs (c) | (25,600 | ) | — | ||||
Frutarom Acquisition Related Costs (g) | (246 | ) | (12,455 | ) | |||
Adjusted
(Non-GAAP) | $ | 397,436 | $ | 288,114 |
Reconciliation of Operating Profit | |||||||
Second
Quarter Year-to-Date | |||||||
(DOLLARS IN THOUSANDS) | 2019 | 2018 | |||||
Reported (GAAP) | $ | 363,807 | $ | 329,363 | |||
Operational
Improvement Initiatives (a) | 940 | 1,429 | |||||
Acquisition Related Costs (b) | — | (518 | ) | ||||
Integration Related Costs (c) | 26,314 | 993 | |||||
Restructuring
and Other Charges, net (d) | 18,699 | 910 | |||||
Losses on Sale of Assets | 764 | 1,195 | |||||
FDA Mandated Product Recall (e) | — | 5,000 | |||||
Frutarom
Acquisition Related Costs (g) | 8,096 | 12,455 | |||||
Adjusted (Non-GAAP) | $ | 418,620 | $ | 350,827 |
Reconciliation
of Net Income | |||||||||||||||||||||||||||||||
Second Quarter Year-to-Date | |||||||||||||||||||||||||||||||
2019 | 2018 | ||||||||||||||||||||||||||||||
(DOLLARS IN THOUSANDS) | Income before taxes | Taxes on income (h) | Net
Income Attributable to IFF (i) | Diluted EPS | Income before taxes | Taxes on income (h) | Net Income Attributable to IFF | Diluted EPS | |||||||||||||||||||||||
Reported (GAAP) | $ | 304,057 | $ | 53,974 | $ | 245,206 | $ | 2.16 | $ | 280,754 | $ | 52,190 | $ | 228,564 | $ | 2.87 | |||||||||||||||
Operational
Improvement Initiatives (a) | 940 | 318 | 622 | 0.01 | 1,429 | 436 | 993 | 0.01 | |||||||||||||||||||||||
Acquisition
Related Costs (b) | — | — | — | — | (518 | ) | (135 | ) | (383 | ) | — | ||||||||||||||||||||
Integration
Related Costs (c) | 26,314 | 5,923 | 20,391 | 0.18 | 993 | — | 993 | 0.01 | |||||||||||||||||||||||
Restructuring
and Other Charges, net (d) | 18,699 | 4,583 | 14,116 | 0.12 | 910 | 215 | 695 | 0.01 | |||||||||||||||||||||||
Losses
on Sale of Assets | 764 | 192 | 572 | 0.01 | 1,195 | 246 | 949 | 0.01 | |||||||||||||||||||||||
FDA
Mandated Product Recall (e) | — | — | — | — | 5,000 | 1,196 | 3,804 | 0.05 | |||||||||||||||||||||||
U.S.
Tax Reform (f) | — | — | — | — | — | (649 | ) | 649 | 0.01 | ||||||||||||||||||||||
Frutarom
Acquisition Related Costs (g) | 8,096 | 1,387 | 6,709 | 0.06 | 36,989 | 6,543 | 30,446 | 0.38 | |||||||||||||||||||||||
Adjusted
(Non-GAAP) | $ | 358,870 | $ | 66,377 | $ | 287,616 | $ | 2.54 | $ | 326,752 | $ | 60,042 | $ | 266,710 | $ | 3.35 |
Reconciliation
of Adjusted (Non-GAAP) EPS ex. Amortization | |||||||
Second Quarter Year-to-Date | |||||||
(DOLLARS AND SHARE AMOUNTS IN THOUSANDS) | 2019 | 2018 | |||||
Numerator | |||||||
Adjusted (Non-GAAP) Net Income | $ | 287,616 | $ | 266,710 | |||
Amortization
of Acquisition related Intangible Assets | 95,534 | 18,769 | |||||
Tax impact on Amortization of Acquisition related Intangible Assets (h) | 22,831 | 5,673 | |||||
Amortization
of Acquisition related Intangible Assets, net of tax (j) | 72,703 | 13,096 | |||||
Adjusted (Non-GAAP) Net Income ex. Amortization | 360,319 | 279,806 | |||||
Denominator | |||||||
Weighted
average shares assuming dilution (diluted) | 113,131 | 79,347 | |||||
Adjusted (Non-GAAP) EPS ex. Amortization | $ | 3.18 | $ | 3.52 |
(a) | Represents
accelerated depreciation related to a plant relocation in India and China, as well as a lab closure in Taiwan for 2018. | ||||||||||||||
(b) | For 2018, represents adjustments to the contingent consideration payable for PowderPure, and transaction costs related to Fragrance Resources and PowderPure within Selling and administrative expenses. | ||||||||||||||
(c) | For 2019, represents costs related to the integration of the Frutarom acquisition, principally advisory services. For 2018, represents costs related to the integration of David Michael. | ||||||||||||||
(d) | For 2019, represents
severance costs related primarily to Scent. For 2018, represents severance costs related to the 2017 Productivity Program. | ||||||||||||||
(e) | Represents losses related to the FDA mandated recall. | ||||||||||||||
(f) | Represents charges incurred related to enactment of certain U.S. tax legislation changes in December 2017. | ||||||||||||||
(g) | Represents transaction-related costs and expenses related to the acquisition of Frutarom, including adjustments that reduce the contingent consideration payable related to certain acquisitions made by Frutarom. For 2019, amount primarily includes
$7.9 million of amortization for inventory "step-up" costs and $2.5 million of transaction costs which was offset by a $2.3 million reduction to contingent consideration included in Selling and administrative expense. For 2018, amount includes $10.6 million of bridge loan commitment fees included in Interest expense, $25.0 million mark-to-market loss adjustment on an interest rate derivative and an $11.0 million mark-to-market gain adjustment on a foreign currency derivative, and $12.5 million of transaction costs included in administrative expenses. | ||||||||||||||
(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 fiscal year 2019, 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). For amortization, the tax benefit has been calculated based on the statutory rate on a country by country basis. | ||||||||||||||
(i) | For 2019, net income is reduced by income attributable to noncontrolling interest of $4.9M. | ||||||||||||||
(j) | Represents all amortization of
intangible assets acquired in connection with acquisitions, net of tax. |
This ‘8-K’ Filing | Date | Other Filings | ||
---|---|---|---|---|
12/31/19 | 10-K, 11-K, 4 | |||
10/4/19 | ||||
9/23/19 | ||||
8/6/19 | ||||
Filed on / For Period end: | 8/5/19 | 10-Q | ||
6/30/19 | 10-Q | |||
2/26/19 | 10-K | |||
12/31/18 | 10-K, 11-K, 4, 5 | |||
10/4/18 | 3, 4, 8-K | |||
10/3/18 | 8-K, 8-K/A | |||
1/1/18 | ||||
List all Filings |