Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2016 | Apr. 30, 2016 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | SENSIENT TECHNOLOGIES CORP | |
Entity Central Index Key | 310,142 | |
Current Fiscal Year End Date | --12-31 | |
Entity Well-known Seasoned Issuer | Yes | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 44,826,769 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q1 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2016 |
CONSOLIDATED CONDENSED STATEMEN
CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS (Unaudited) [Abstract] | ||
Revenue | $ 342,468 | $ 346,226 |
Cost of products sold | 226,625 | 228,793 |
Selling and administrative expenses | 68,324 | 70,987 |
Operating income | 47,519 | 46,446 |
Interest expense | 4,800 | 3,915 |
Earnings before income taxes | 42,719 | 42,531 |
Income taxes | 11,526 | 11,796 |
Earnings from continuing operations | 31,193 | 30,735 |
Loss from discontinued operations, net of tax | (22) | (209) |
Net earnings | $ 31,171 | $ 30,526 |
Weighted average number of shares outstanding: | ||
Basic (in shares) | 44,718 | 47,178 |
Diluted (in shares) | 44,981 | 47,502 |
Basic: | ||
Continuing operations (in dollars per share) | $ 0.70 | $ 0.65 |
Discontinued operations (in dollars per share) | 0 | 0 |
Earnings per common share (in dollars per share) | 0.70 | 0.65 |
Diluted: | ||
Continuing operations (in dollars per share) | 0.69 | 0.65 |
Discontinued operations (in dollars per share) | 0 | 0 |
Earnings per common share (in dollars per share) | 0.69 | 0.64 |
Dividends declared per common share (in dollars per share) | $ 0.27 | $ 0.25 |
CONSOLIDATED CONDENSED STATEME3
CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) [Abstract] | ||
Comprehensive income (loss) | $ 46,750 | $ (30,913) |
CONSOLIDATED CONDENSED BALANCE
CONSOLIDATED CONDENSED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 24,703 | $ 11,997 |
Trade accounts receivable, net | 252,328 | 232,047 |
Inventories | 403,849 | 409,159 |
Prepaid expenses and other current assets | 40,961 | 44,673 |
Assets held for sale | 32,022 | 31,029 |
TOTAL CURRENT ASSETS | 753,863 | 728,905 |
OTHER ASSETS | 71,274 | 71,117 |
DEFERRED TAX ASSETS | 24,535 | 25,177 |
INTANGIBLE ASSETS, NET | 9,097 | 9,209 |
GOODWILL | 406,233 | 399,646 |
PROPERTY, PLANT AND EQUIPMENT: | ||
Land | 35,688 | 33,975 |
Buildings | 286,613 | 274,318 |
Machinery and equipment | 690,662 | 664,917 |
Construction in progress | 74,624 | 62,515 |
Property, Plant and Equipment, Gross, Total | 1,087,587 | 1,035,725 |
Less accumulated depreciation | (609,612) | (566,047) |
Property, Plant and Equipment, Net, Total | 477,975 | 469,678 |
TOTAL ASSETS | 1,742,977 | 1,703,732 |
CURRENT LIABILITIES: | ||
Trade accounts payable | 94,339 | 95,442 |
Accrued salaries, wages and withholdings from employees | 19,511 | 23,530 |
Other accrued expenses | 64,514 | 61,701 |
Income taxes | 10,721 | 7,504 |
Short-term borrowings | 21,035 | 20,655 |
Liabilities held for sale | 3,712 | 4,090 |
TOTAL CURRENT LIABILITIES | 213,832 | 212,922 |
DEFERRED INCOME TAXES | 3,820 | 5,640 |
OTHER LIABILITIES | 8,064 | 7,534 |
ACCRUED EMPLOYEE AND RETIREE BENEFITS | 19,903 | 19,007 |
LONG-TERM DEBT | 629,891 | 613,502 |
SHAREHOLDERS' EQUITY: | ||
Common stock | 5,396 | 5,396 |
Additional paid-in capital | 110,567 | 109,974 |
Earnings reinvested in the business | 1,321,310 | 1,302,302 |
Treasury stock, at cost | (415,323) | (402,483) |
Accumulated other comprehensive loss | (154,483) | (170,062) |
TOTAL SHAREHOLDERS' EQUITY | 867,467 | 845,127 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ 1,742,977 | $ 1,703,732 |
CONSOLIDATED CONDENSED STATEME5
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Cash flows from operating activities: | ||
Net earnings | $ 31,171 | $ 30,526 |
Adjustments to arrive at net cash provided by operating activities: | ||
Depreciation and amortization | 11,612 | 12,384 |
Share-based compensation | 2,018 | 337 |
Loss on assets | 458 | 2,488 |
Deferred income taxes | (1,349) | 4,382 |
Changes in operating assets and liabilities | 2,263 | (19,528) |
Net cash provided by operating activities | 46,173 | 30,589 |
Cash flows from investing activities: | ||
Acquisition of property, plant and equipment | (14,120) | (13,431) |
Proceeds from sale of assets | 37 | 12,593 |
Other investing activity | (18) | (24) |
Net cash used in investing activities | (14,101) | (862) |
Cash flows from financing activities: | ||
Proceeds from additional borrowings | 95,562 | 51,112 |
Debt payments | (87,284) | (7,037) |
Purchase of treasury stock | (17,920) | (58,017) |
Dividends paid | (12,163) | (11,932) |
Proceeds from options exercised and other equity transactions | 161 | 184 |
Net cash used in financing activities | (21,644) | (25,690) |
Effect of exchange rate changes on cash and cash equivalents | 2,278 | (6,283) |
Net increase (decrease) in cash and cash equivalents | 12,706 | (2,246) |
Cash and cash equivalents at beginning of period | 11,997 | 20,329 |
Cash and cash equivalents at end of period | $ 24,703 | $ 18,083 |
Accounting Policies
Accounting Policies | 3 Months Ended |
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
Accounting Policies | 1. Accounting Policies In the opinion of Sensient Technologies Corporation (the “Company”), the accompanying unaudited consolidated condensed financial statements contain all adjustments (consisting of only normal recurring adjustments) which are necessary to present fairly the financial position of the Company as of March 31, 2016, and the results of operations, comprehensive income (loss) and cash flows for the three months ended March 31, 2016 and 2015. The results of operations for any interim period are not necessarily indicative of the results to be expected for the full year. The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Expenses are charged to operations in the period incurred. In November 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2015-17, Balance Sheet Classification of Deferred Taxes In April 2015, the FASB issued ASU No. 2015-03, Simplifying the Presentation of Debt Issuance Costs Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements In July 2015, the FASB affirmed its proposed one-year deferral of the effective date for ASU No. 2014-09, Revenue from Contracts with Customers In July 2015, the FASB issued ASU No. 2015-11, Simplifying the Measurement of Inventory In February 2016, the FASB issued ASU No. 2016-02, Leases In March 2016, the FASB issued ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting Please refer to the notes in the Company’s annual consolidated financial statements for the year ended December 31, 2015, for additional details of the Company’s financial condition and a description of the Company’s accounting policies, which have been continued without change. |
Fair Value
Fair Value | 3 Months Ended |
Mar. 31, 2016 | |
Fair Value [Abstract] | |
Fair Value | 2. Fair Value Accounting Standards Codification (ASC) 820, Fair Value Measurements and Disclosures The carrying values of the Company’s cash and cash equivalents, trade accounts receivable, accounts payable, accrued expenses and short-term borrowings approximated fair values as of March 31, 2016. The fair value of the Company’s long-term debt, including current maturities, is estimated using discounted cash flows based on the Company’s current incremental borrowing rates for similar types of borrowing arrangements (Level 2 inputs). The carrying value of the long-term debt at March 31, 2016, was $629.9 million. The fair value of the long-term debt at March 31, 2016, was $647.8 million. |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2016 | |
Segment Information [Abstract] | |
Segment Information | 3. Segment Information Operating results by segment for the periods presented are as follows: (In thousands) Flavors & Fragrances Color Asia Pacific Corporate & Other Consolidated Three months ended March 31, 2016: Revenue from external customers $ 190,520 $ 122,281 $ 29,667 $ - $ 342,468 Intersegment revenue 7,819 3,753 40 - 11,612 Total revenue $ 198,339 $ 126,034 $ 29,707 $ - $ 354,080 Operating income (loss) $ 27,510 $ 27,844 $ 6,005 $ (13,840 ) $ 47,519 Interest expense - - - 4,800 4,800 Earnings (loss) before income taxes $ 27,510 $ 27,844 $ 6,005 $ (18,640 ) $ 42,719 Three months ended March 31, 2015: Revenue from external customers $ 199,100 $ 118,355 $ 28,771 $ - $ 346,226 Intersegment revenue 6,878 3,843 32 - 10,753 Total revenue $ 205,978 $ 122,198 $ 28,803 $ - $ 356,979 Operating income (loss) $ 30,459 $ 26,263 $ 5,651 $ (15,927 ) $ 46,446 Interest expense - - - 3,915 3,915 Earnings (loss) before income taxes $ 30,459 $ 26,263 $ 5,651 $ (19,842 ) $ 42,531 Beginning in the first quarter of 2016, the results of operations for the Company’s color business in China, South Korea and Japan, previously reported in the Asia Pacific segment, are now reported in the Color segment. The results for 2015 have been restated to reflect these changes. The Company evaluates performance based on operating income of the respective segments before restructuring costs, interest expense and income taxes. The 2016 and 2015 restructuring and other costs related to continuing operations are reported in the Corporate & Other segment. |
Inventories
Inventories | 3 Months Ended |
Mar. 31, 2016 | |
Inventories [Abstract] | |
Inventories | 4. Inventories At March 31, 2016, and December 31, 2015, inventories included finished and in-process products totaling $283.1 million and $291.9 million, respectively, and raw materials and supplies of $120.8 million and $117.3 million, respectively. |
Retirement Plans
Retirement Plans | 3 Months Ended |
Mar. 31, 2016 | |
Retirement Plans [Abstract] | |
Retirement Plans | 5. Retirement Plans The Company’s components of annual benefit cost for the defined benefit plans for the periods presented are as follows: Three Months Ended March 31, (In thousands) 2016 2015 Service cost $ 503 $ 662 Interest cost 420 472 Expected return on plan assets (297 ) (322 ) Amortization of actuarial loss 53 73 Total defined benefit expense $ 679 $ 885 |
Shareholders' Equity
Shareholders' Equity | 3 Months Ended |
Mar. 31, 2016 | |
Shareholders' Equity [Abstract] | |
Shareholders' Equity | 6. Shareholders’ Equity The Company repurchased 263,770 shares of its common stock for an aggregate cost of $15.4 million during the three months ended March 31, 2016, and 951,219 shares of its common stock for an aggregate cost of $60.8 million during the three months ended March 31, 2015. The amount of treasury stock purchases reported in the Company’s Consolidated Condensed Statements of Cash Flow represent purchases that have settled within each respective quarter. |
Derivative Instruments and Hedg
Derivative Instruments and Hedging Activity | 3 Months Ended |
Mar. 31, 2016 | |
Derivative Instruments and Hedging Activity [Abstract] | |
Derivative Instruments and Hedging Activity | 7. Derivative Instruments and Hedging Activity The Company may use forward exchange contracts and foreign currency denominated debt to manage its exposure to foreign exchange risk by reducing the effect of fluctuating foreign currencies on short-term foreign currency denominated intercompany transactions, non-functional currency raw material purchases, non-functional currency sales and other known foreign currency exposures. These forward exchange contracts generally have maturities of less than 18 months. The Company’s primary hedging activities and their accounting treatment are summarized below: Forward exchange contracts Net investment hedges |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2016 | |
Income Taxes [Abstract] | |
Income Taxes | 8. Income Taxes The effective income tax rates for continuing operations for the quarters ended March 31, 2016 and 2015, were 27.0% and 27.7%, respectively. The effective tax rates in both 2016 and 2015 were impacted by restructuring activities, changes in estimates associated with the finalization of prior year foreign and domestic tax items, audit settlements, mix of foreign earnings and restructuring costs. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income | 3 Months Ended |
Mar. 31, 2016 | |
Accumulated Other Comprehensive Income [Abstract] | |
Accumulated Other Comprehensive Income | 9. Accumulated Other Comprehensive Income The following table summarizes the changes in OCI during the three month period ended March 31, 2016: (In thousands) Cash Flow Hedges (a) Pension Items (a) Foreign Currency Items Total Balance as of December 31, 2015 $ 164 $ (4,393 ) $ (165,833 ) $ (170,062 ) Other comprehensive income before reclassifications (1,571 ) - 16,735 15,164 Amounts reclassified from OCI 379 36 - 415 Balance as of March 31, 2016 $ (1,028 ) $ (4,357 ) $ (149,098 ) $ (154,483 ) (a) Cash Flow Hedges and Pension Items are net of tax. |
Restructuring
Restructuring | 3 Months Ended |
Mar. 31, 2016 | |
Restructuring [Abstract] | |
Restructuring | 10. Restructuring The Company incurred restructuring costs in both continuing and discontinued operations. The discussion in this note relates to the combination of both continuing and discontinued operations unless otherwise noted. Restructuring costs related to discontinued operations are recorded in discontinued operations within the Company’s Consolidated Condensed Statements of Earnings and are discussed in Note 11, Discontinued Operations In March 2014, the Company announced that it was initiating a restructuring plan (2014 Restructuring Plan or “Plan”) to eliminate underperforming operations, consolidate manufacturing facilities and improve efficiencies within the Company. The Company determined that it had redundant manufacturing capabilities in both North America and Europe and that it could lower costs and operate more efficiently by consolidating into fewer facilities. Eight facilities were identified for consolidation in the Flavors & Fragrances segment, four in North America and four in Europe. To date, closures have been announced in Indianapolis, Indiana, United States; Cornwall, Mississauga and Halton Hills, Canada; Bremen, Germany; and Milan, Italy. The Company also discontinued one of the businesses in the Color segment, located near Leipzig, Germany, because it did not fit with the Company’s long-term strategic plan and it had generated losses for several years. In 2015, the Company identified additional opportunities to consolidate manufacturing operations at one of the Color segment’s facilities in Europe and eliminate additional positions in the European Flavors & Fragrances businesses. Based on this Plan, the Company determined that certain long-lived assets associated with the underperforming operations were impaired. The Company reduced the carrying amounts of these assets to their aggregate respective fair values, which were determined based on independent market valuations. The fair values of the remaining long-lived assets are estimated to be approximately $20 million, which includes certain of the land, buildings and equipment in the assets held for sale, as noted below. Also certain machinery and equipment has been identified to be disposed of at the time of the facility closures and the associated depreciation for these assets has been accelerated. The Company recorded long-lived asset impairments, including the impairment charges and accelerated depreciation of $0.5 million and $3.8 million, during the three months ended March 31, 2016 and 2015, respectively. Since initiating the Plan, the Company has recorded $85.2 million of long-lived asset impairments, including the impairment charges and accelerated depreciation. In addition, certain intangible assets, inventory and other current assets were also determined to be impaired and were written down. The Company has also incurred employee separation and other restructuring costs as a result of this Plan. The Company anticipates that it will reduce headcount by approximately 400 positions at the affected facilities, primarily in the Flavors & Fragrances segment, related to direct and indirect labor at manufacturing sites. As of March 31, 2016, 268 positions have been eliminated as a result of this Plan. As a part of the Plan, the Company plans to sell its European Natural Ingredients business, a business in the Flavors & Fragrances segment. This business has two facilities, located in Marchais, France and Elburg, the Netherlands. The European Natural Ingredients business has not generated significant profits for several years and it does not fit with the Company’s long-term strategic plan. The Company is currently working to sell this business and anticipates selling the business within the next year. Upon the completion of a sale of this business, the Company anticipates recognizing an additional non-cash loss of approximately $11 million. The Company has recorded assets held for sale of land, buildings and equipment of $10.1 million related to the 2014 Restructuring Plan, and inventory, receivables and other assets of $21.9 million related to the anticipated sale of the European Natural Ingredients business. The Company also has $3.7 million of liabilities held for sale related to the anticipated sale of the European Natural Ingredients business. The Company recorded total restructuring costs of $3.3 million and $7.1 million for the three months ended March 31, 2016 and 2015, respectively, in accordance with GAAP and based on an internal review of the affected facilities and consultation with legal and other advisors. Since initiating the 2014 Restructuring Plan, the Company has incurred $144.8 million of restructuring costs through March 31, 2016. The Company expects to incur approximately $12 million of additional restructuring costs by the end of 2016. The Company expects that the closure and sale of these operations will significantly lower the Company’s operating costs over the next few years. Upon initiating the Plan, the Company estimated the annual cost reductions to be approximately $30 million, when fully implemented. The U.S. dollar has strengthened considerably since the initiation of the Plan, and as a result the dollar value of the cost savings has been reduced. In 2015, the Company identified additional cost savings opportunities, and as a result of these actions, the current estimate of annual cost savings is approximately $27 million. The Company has also implemented price increases to further mitigate the impact of foreign currency movements. The Company has already realized cost savings of approximately $3 million in 2014 and an additional $9 million in 2015. The Company expects to realize approximately $6 million to $7 million of incremental savings in 2016, of which $2 million was realized during the first three months ended March 31, 2016. The remaining savings are expected to be realized in 2017. In connection with the 2014 Restructuring Plan, the Company approved a plan to dispose of a certain business, located near Leipzig, Germany, within the Color segment. Production ceased in 2014 and the business met the criteria to be reported as a discontinued operation. The pre-tax loss from discontinued operations, which includes restructuring costs, was nominal during the three months ended March 31, 2016, and $0.3 million during the three months ended March 31, 2015. The Company evaluates performance based on operating income of each segment before restructuring costs. All restructuring costs related to continuing operations are recorded in the Corporate & Other segment. The following table summarizes the restructuring expense by segment and discontinued operations for the three months ended March 31, 2016 and 2015, respectively: Three Months Ended March 31, (In thousands) 2016 2015 Flavors & Fragrances $ 2,942 $ 5,829 Color 39 161 Asia Pacific - 58 Corporate & Other 361 1,067 Total Continuing Operations 3,342 7,115 Discontinued Operations - 29 Total Restructuring $ 3,342 $ 7,144 The Company recorded restructuring costs in continuing operations for the three months ended March 31, 2016, as follows: (In thousands) Selling & Administrative Cost of Products Sold Total Employee separation $ 131 $ - $ 131 Long-lived asset impairment 471 - 471 Write-down of inventory - 644 644 Other costs (1) 2,096 - 2,096 Total $ 2,698 $ 644 $ 3,342 (1) Other costs include decommissioning costs, professional services, temporary labor, moving costs and other related costs. The Company recorded restructuring costs in continuing operations for the three months ended March 31, 2015, as follows: (In thousands) Selling & Administrative Cost of Products Sold Total Employee separation $ 1,908 $ - $ 1,908 Long-lived asset impairment 3,815 - 3,815 Gain on asset sales (1,301 ) - (1,301 ) Write-down of inventory - 141 141 Other costs (1) 2,552 - 2,552 Total $ 6,974 $ 141 $ 7,115 (1) Other costs include decommissioning costs, professional services, temporary labor, moving costs and other related costs. The following table summarizes the accrual activities for the restructuring activities for the three months ended March 31, 2016: (In thousands) Employee Separations Asset Related and Other Total Balance as of December 31, 2015 $ 10,260 $ 912 $ 11,172 Expense activity 131 2,096 2,227 Cash spent (2,454 ) (2,510 ) (4,964 ) Translation adjustment 274 - 274 Balance as of March 31, 2016 $ 8,211 $ 498 $ 8,709 |
Discontinued Operations
Discontinued Operations | 3 Months Ended |
Mar. 31, 2016 | |
Discontinued Operations [Abstract] | |
Discontinued Operations | 11. Discontinued Operations In connection with the 2014 Restructuring Plan, the Company approved a plan to dispose of a business unit within the Color segment, located near Leipzig, Germany. Since 2014, the business has met the criteria to be presented as a discontinued operation as established in ASC Subtopic 205-20, Discontinued Operations The following table summarizes the discontinued operation’s results for the three months ended March 31, 2016 and 2015: Three Months Ended March 31, (In thousands) 2016 2015 Revenue $ - $ 187 Loss from discontinued operations before income taxes (31 ) (294 ) Income tax benefit 9 85 Loss from discontinued operations, net of tax $ (22 ) $ (209 ) Pre-tax restructuring costs are included in the loss before income taxes from discontinued operations. For the three months ended March 31, 2016 and 2015, these costs were nominal. See Note 10, Restructuring, |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2016 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | 12. Commitments and Contingencies U.S. Equal Employment Opportunity Commission Civil Complaint On September 21, 2015, the U.S. Equal Employment Opportunity Commission (EEOC) filed a civil complaint against Sensient Natural Ingredients LLC (SNI) in the U.S. District Court for the Eastern District of California. SNI is a wholly owned subsidiary of the Company. The EEOC’s complaint alleges that SNI failed to comply with the Americans with Disabilities Act (ADA), as amended, when it terminated five employees in 2011. The EEOC seeks to enjoin SNI from engaging in employment practices that discriminate on the basis of disability; asks the Court to order SNI to implement policies, practices, and programs to ensure it does not violate the ADA; and requests back pay with prejudgment interest, reinstatement, front pay, compensation for past and future pecuniary and non-pecuniary losses, and punitive damages on behalf of the five named former employees and any similarly aggrieved individuals. Recoverable compensatory and punitive damages are subject to statutory caps. The complaint does not request a specific damages amount. To date, the EEOC has provided the Company with a list of 13 additional potentially aggrieved former employees not listed in the complaint who may have been terminated in violation of the ADA during the relevant time period. The Company is vigorously investigating the facts alleged in the complaint to determine what exposure SNI may have. Since 2013, SNI’s on-site human resources representatives have worked closely with both Company counsel and outside labor and employment counsel to ensure that all policies, procedures and actions, including terminations, comply with applicable law. At this early stage, it is not possible to assess the probability of any legal or financial exposure. Other Claims and Litigation The Company is subject to various claims and litigation arising in the normal course of business. The Company establishes reserves for claims and proceedings when it is probable that liabilities exist and reasonable estimates of loss can be made. While it is not possible to predict the outcome of these matters, based on our assessment of the facts and circumstances now known, we do not believe that these matters, individually or in the aggregate, will have a material adverse effect on our financial position. However, actual outcomes may be different from those expected and could have a material effect on our results of operations or cash flows in a particular period. |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Segment Information [Abstract] | |
Segment Information | Operating results by segment for the periods presented are as follows: (In thousands) Flavors & Fragrances Color Asia Pacific Corporate & Other Consolidated Three months ended March 31, 2016: Revenue from external customers $ 190,520 $ 122,281 $ 29,667 $ - $ 342,468 Intersegment revenue 7,819 3,753 40 - 11,612 Total revenue $ 198,339 $ 126,034 $ 29,707 $ - $ 354,080 Operating income (loss) $ 27,510 $ 27,844 $ 6,005 $ (13,840 ) $ 47,519 Interest expense - - - 4,800 4,800 Earnings (loss) before income taxes $ 27,510 $ 27,844 $ 6,005 $ (18,640 ) $ 42,719 Three months ended March 31, 2015: Revenue from external customers $ 199,100 $ 118,355 $ 28,771 $ - $ 346,226 Intersegment revenue 6,878 3,843 32 - 10,753 Total revenue $ 205,978 $ 122,198 $ 28,803 $ - $ 356,979 Operating income (loss) $ 30,459 $ 26,263 $ 5,651 $ (15,927 ) $ 46,446 Interest expense - - - 3,915 3,915 Earnings (loss) before income taxes $ 30,459 $ 26,263 $ 5,651 $ (19,842 ) $ 42,531 |
Retirement Plans (Tables)
Retirement Plans (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Retirement Plans [Abstract] | |
Components of Annual Benefit Cost | The Company’s components of annual benefit cost for the defined benefit plans for the periods presented are as follows: Three Months Ended March 31, (In thousands) 2016 2015 Service cost $ 503 $ 662 Interest cost 420 472 Expected return on plan assets (297 ) (322 ) Amortization of actuarial loss 53 73 Total defined benefit expense $ 679 $ 885 |
Accumulated Other Comprehensi20
Accumulated Other Comprehensive Income (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Accumulated Other Comprehensive Income [Abstract] | |
Changes in Accumulated Other Comprehensive Income (AOCI) | The following table summarizes the changes in OCI during the three month period ended March 31, 2016: (In thousands) Cash Flow Hedges (a) Pension Items (a) Foreign Currency Items Total Balance as of December 31, 2015 $ 164 $ (4,393 ) $ (165,833 ) $ (170,062 ) Other comprehensive income before reclassifications (1,571 ) - 16,735 15,164 Amounts reclassified from OCI 379 36 - 415 Balance as of March 31, 2016 $ (1,028 ) $ (4,357 ) $ (149,098 ) $ (154,483 ) (a) Cash Flow Hedges and Pension Items are net of tax. |
Restructuring (Tables)
Restructuring (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Restructuring [Abstract] | |
Restructuring Cost by Segment | The following table summarizes the restructuring expense by segment and discontinued operations for the three months ended March 31, 2016 and 2015, respectively: Three Months Ended March 31, (In thousands) 2016 2015 Flavors & Fragrances $ 2,942 $ 5,829 Color 39 161 Asia Pacific - 58 Corporate & Other 361 1,067 Total Continuing Operations 3,342 7,115 Discontinued Operations - 29 Total Restructuring $ 3,342 $ 7,144 |
Summary of Restructuring Costs | The Company recorded restructuring costs in continuing operations for the three months ended March 31, 2016, as follows: (In thousands) Selling & Administrative Cost of Products Sold Total Employee separation $ 131 $ - $ 131 Long-lived asset impairment 471 - 471 Write-down of inventory - 644 644 Other costs (1) 2,096 - 2,096 Total $ 2,698 $ 644 $ 3,342 (1) Other costs include decommissioning costs, professional services, temporary labor, moving costs and other related costs. The Company recorded restructuring costs in continuing operations for the three months ended March 31, 2015, as follows: (In thousands) Selling & Administrative Cost of Products Sold Total Employee separation $ 1,908 $ - $ 1,908 Long-lived asset impairment 3,815 - 3,815 Gain on asset sales (1,301 ) - (1,301 ) Write-down of inventory - 141 141 Other costs (1) 2,552 - 2,552 Total $ 6,974 $ 141 $ 7,115 (1) Other costs include decommissioning costs, professional services, temporary labor, moving costs and other related costs. |
Summary of Accrual for Restructuring and Other Charges | The following table summarizes the accrual activities for the restructuring activities for the three months ended March 31, 2016: (In thousands) Employee Separations Asset Related and Other Total Balance as of December 31, 2015 $ 10,260 $ 912 $ 11,172 Expense activity 131 2,096 2,227 Cash spent (2,454 ) (2,510 ) (4,964 ) Translation adjustment 274 - 274 Balance as of March 31, 2016 $ 8,211 $ 498 $ 8,709 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Discontinued Operations [Abstract] | |
Schedule of Certain Consolidated Condensed Statements of Earnings Information for Discontinued Operations | The following table summarizes the discontinued operation’s results for the three months ended March 31, 2016 and 2015: Three Months Ended March 31, (In thousands) 2016 2015 Revenue $ - $ 187 Loss from discontinued operations before income taxes (31 ) (294 ) Income tax benefit 9 85 Loss from discontinued operations, net of tax $ (22 ) $ (209 ) |
Accounting Policies (Details)
Accounting Policies (Details) - USD ($) $ in Millions | Mar. 31, 2016 | Dec. 31, 2015 |
Accounting Policies [Abstract] | ||
Deferred tax assets current reclassified as deferred tax asset noncurrent | $ 17.4 | $ 17.1 |
Deferred tax assets current reclassified as deferred tax liability noncurrent | 6.2 | 7.3 |
Debt fees from other assets reclassified as long term debt | $ 0.3 | $ 0.4 |
Fair Value (Details)
Fair Value (Details) - USD ($) $ in Millions | Mar. 31, 2016 | Dec. 31, 2015 |
Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | $ 1.5 | $ 1.5 |
Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Forward exchange contracts, liability | 0.1 | $ 0.2 |
Level 2 [Member] | Carrying Value [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long term debt | 629.9 | |
Level 2 [Member] | Fair Value [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long term debt | $ 647.8 |
Segment Information (Details)
Segment Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Segment Reporting Information [Line Items] | ||
Revenue from external customers | $ 342,468 | $ 346,226 |
Total Revenue | 354,080 | 356,979 |
Operating income (loss) | 47,519 | 46,446 |
Interest expense | 4,800 | 3,915 |
Earnings before income taxes | 42,719 | 42,531 |
Flavors & Fragrances [Member] | ||
Segment Reporting Information [Line Items] | ||
Total Revenue | 198,339 | 205,978 |
Color [Member] | ||
Segment Reporting Information [Line Items] | ||
Total Revenue | 126,034 | 122,198 |
Asia Pacific [Member] | ||
Segment Reporting Information [Line Items] | ||
Total Revenue | 29,707 | 28,803 |
Corporate and Other [Member] | ||
Segment Reporting Information [Line Items] | ||
Total Revenue | 0 | 0 |
Operating Segments [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenue from external customers | 342,468 | 346,226 |
Operating Segments [Member] | Flavors & Fragrances [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenue from external customers | 190,520 | 199,100 |
Operating income (loss) | 27,510 | 30,459 |
Interest expense | 0 | 0 |
Earnings before income taxes | 27,510 | 30,459 |
Operating Segments [Member] | Color [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenue from external customers | 122,281 | 118,355 |
Operating income (loss) | 27,844 | 26,263 |
Interest expense | 0 | 0 |
Earnings before income taxes | 27,844 | 26,263 |
Operating Segments [Member] | Asia Pacific [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenue from external customers | 29,667 | 28,771 |
Operating income (loss) | 6,005 | 5,651 |
Interest expense | 0 | 0 |
Earnings before income taxes | 6,005 | 5,651 |
Operating Segments [Member] | Corporate and Other [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenue from external customers | 0 | 0 |
Operating income (loss) | (13,840) | (15,927) |
Interest expense | 4,800 | 3,915 |
Earnings before income taxes | (18,640) | (19,842) |
Intersegment Revenue [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenue from external customers | 11,612 | 10,753 |
Intersegment Revenue [Member] | Flavors & Fragrances [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenue from external customers | 7,819 | 6,878 |
Intersegment Revenue [Member] | Color [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenue from external customers | 3,753 | 3,843 |
Intersegment Revenue [Member] | Asia Pacific [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenue from external customers | 40 | 32 |
Intersegment Revenue [Member] | Corporate and Other [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenue from external customers | $ 0 | $ 0 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Millions | Mar. 31, 2016 | Dec. 31, 2015 |
Inventories [Abstract] | ||
Inventories, including finished and in-process products | $ 283.1 | $ 291.9 |
Raw materials and supplies | $ 120.8 | $ 117.3 |
Retirement Plans (Details)
Retirement Plans (Details) - Defined Benefit Plan [Member] - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost | $ 503 | $ 662 |
Interest cost | 420 | 472 |
Expected return on plan assets | (297) | (322) |
Amortization of actuarial loss | 53 | 73 |
Total defined benefit expense | $ 679 | $ 885 |
Shareholders' Equity (Details)
Shareholders' Equity (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Shareholders' Equity [Abstract] | ||
Common stock repurchased during the period (in shares) | 263,770 | 951,219 |
Common stock repurchased during the period, value | $ 15.4 | $ 60.8 |
Derivative Instruments and He29
Derivative Instruments and Hedging Activity (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Derivative instruments and hedging activity for the period [Abstract] | |||
Maximum number of months for forward exchange contracts to mature | 18 months | ||
Impact of foreign exchange rates on debt instruments recorded in Other Comprehensive Income | $ 7.6 | ||
Forward Exchange Contracts [Member] | |||
Derivative instruments and hedging activity for the period [Abstract] | |||
Amount of gain (loss) reclassified into net earnings | (0.5) | $ (0.3) | |
Forward Exchange Contracts [Member] | Cash Flow Hedges [Member] | |||
Derivative instruments and hedging activity for the period [Abstract] | |||
Derivative, fair value | 21.4 | $ 35.2 | |
Foreign Currency Denominated Debt, Net Investment Hedging [Member] | |||
Derivative instruments and hedging activity for the period [Abstract] | |||
Carrying value of foreign denominated debt | $ 211.1 | $ 162.5 |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Income Taxes [Abstract] | ||
Effective income tax rates | 27.00% | 27.70% |
Accumulated Other Comprehensi31
Accumulated Other Comprehensive Income (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016USD ($) | ||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Accumulated other comprehensive income (loss), Beginning balance | $ (170,062) | |
Other comprehensive loss before reclassifications | 15,164 | |
Amounts reclassified from OCI | 415 | |
Accumulated other comprehensive income (loss), Ending balance | (154,483) | |
Cash Flow Hedges [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Accumulated other comprehensive income (loss), Beginning balance | 164 | [1] |
Other comprehensive loss before reclassifications | (1,571) | [1] |
Amounts reclassified from OCI | 379 | [1] |
Accumulated other comprehensive income (loss), Ending balance | (1,028) | [1] |
Pension Items [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Accumulated other comprehensive income (loss), Beginning balance | (4,393) | [1] |
Other comprehensive loss before reclassifications | 0 | [1] |
Amounts reclassified from OCI | 36 | [1] |
Accumulated other comprehensive income (loss), Ending balance | (4,357) | [1] |
Foreign Currency Items [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Accumulated other comprehensive income (loss), Beginning balance | (165,833) | |
Other comprehensive loss before reclassifications | 16,735 | |
Amounts reclassified from OCI | 0 | |
Accumulated other comprehensive income (loss), Ending balance | $ (149,098) | |
[1] | Cash Flow Hedges and Pension Items are net of tax. |
Restructuring (Details)
Restructuring (Details) $ in Thousands | 3 Months Ended | 24 Months Ended | |||
Mar. 31, 2016USD ($)Positions | Mar. 31, 2015USD ($) | Mar. 31, 2014USD ($)Facilities | Mar. 31, 2016USD ($)Positions | ||
Restructuring Cost and Reserve [Line Items] | |||||
Estimated fair values of the remaining long-lived assets | $ 20,000 | $ 20,000 | |||
Long lived asset impairments | $ 500 | $ 3,800 | |||
Long lived asset impairments recorded to date | $ 85,200 | ||||
Position reduction due to restructuring | Positions | 400 | ||||
Number of positions eliminated due to restructuring | Positions | 268 | ||||
Non-cash loss on sale of business | $ 11,000 | ||||
Assets held for sale of land, building and equipment | 10,100 | $ 10,100 | |||
Assets held for sale of inventory, receivable and other assets | 21,900 | 21,900 | |||
Liabilities held for sale | 3,700 | 3,700 | |||
Total restructuring costs incurred to date | 144,800 | 144,800 | |||
Estimated cost savings due to restructuring | 30,000 | ||||
Annual cost of savings | 27,000 | ||||
Realized cost of savings | 9,000 | $ 3,000 | |||
Expected incremental saving realized | 2,000 | ||||
Pre-tax loss from discontinued operations | (31) | (294) | |||
Restructuring cost by segment [Abstract] | |||||
Total continuing operations | 3,342 | 7,115 | |||
Discontinued operations | 0 | 29 | |||
Total restructuring | 3,342 | 7,144 | |||
Detail of the restructuring costs [Abstract] | |||||
Employee separation | 131 | 1,908 | |||
Long-lived asset impairment | 471 | 3,815 | |||
Gain on asset sales | (1,301) | ||||
Write-down of inventory | 644 | 141 | |||
Other costs | [1] | 2,096 | 2,552 | ||
Future restructuring costs, 2016 | 12,000 | 12,000 | |||
Summary of accrual for restructuring and other charges [Abstract] | |||||
Balance as of beginning of period | 11,172 | ||||
Expense activity | 2,227 | ||||
Cash spent | (4,964) | ||||
Translation adjustment | 274 | ||||
Balance as of end of period | 8,709 | 8,709 | |||
Minimum [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Expected incremental savings in 2016 | 6,000 | 6,000 | |||
Maximum [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Expected incremental savings in 2016 | 7,000 | 7,000 | |||
Selling & Administrative [Member] | |||||
Restructuring cost by segment [Abstract] | |||||
Total continuing operations | 2,698 | 6,974 | |||
Detail of the restructuring costs [Abstract] | |||||
Employee separation | 131 | 1,908 | |||
Long-lived asset impairment | 471 | 3,815 | |||
Gain on asset sales | (1,301) | ||||
Write-down of inventory | 0 | 0 | |||
Other costs | [1] | 2,096 | 2,552 | ||
Cost of Products Sold [Member] | |||||
Restructuring cost by segment [Abstract] | |||||
Total continuing operations | 644 | 141 | |||
Detail of the restructuring costs [Abstract] | |||||
Employee separation | 0 | 0 | |||
Long-lived asset impairment | 0 | 0 | |||
Gain on asset sales | 0 | ||||
Write-down of inventory | 644 | 141 | |||
Other costs | [1] | 0 | 0 | ||
Flavors & Fragrances [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Facilities identified for consolidation | Facilities | 8 | ||||
Restructuring cost by segment [Abstract] | |||||
Total continuing operations | 2,942 | 5,829 | |||
Flavors & Fragrances [Member] | North America [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Facilities identified for consolidation | Facilities | 4 | ||||
Flavors & Fragrances [Member] | Europe [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Facilities identified for consolidation | Facilities | 4 | ||||
Color [Member] | |||||
Restructuring cost by segment [Abstract] | |||||
Total continuing operations | 39 | 161 | |||
Asia Pacific [Member] | |||||
Restructuring cost by segment [Abstract] | |||||
Total continuing operations | 0 | 58 | |||
Corporate & Other [Member] | |||||
Restructuring cost by segment [Abstract] | |||||
Total continuing operations | 361 | $ 1,067 | |||
Employee Separations [Member] | |||||
Summary of accrual for restructuring and other charges [Abstract] | |||||
Balance as of beginning of period | 10,260 | ||||
Expense activity | 131 | ||||
Cash spent | (2,454) | ||||
Translation adjustment | 274 | ||||
Balance as of end of period | 8,211 | 8,211 | |||
Asset Related and Other [Member] | |||||
Summary of accrual for restructuring and other charges [Abstract] | |||||
Balance as of beginning of period | 912 | ||||
Expense activity | 2,096 | ||||
Cash spent | (2,510) | ||||
Translation adjustment | 0 | ||||
Balance as of end of period | $ 498 | $ 498 | |||
[1] | Other costs include decommissioning costs, professional services, temporary labor, moving costs and other related costs. |
Discontinued Operations (Detail
Discontinued Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Certain Consolidated Condensed Statements of Earnings information for discontinued operations [Abstract] | ||
Revenue | $ 0 | $ 187 |
Loss from discontinued operations before income taxes | (31) | (294) |
Income tax benefit | 9 | 85 |
Loss from discontinued operations, net of tax | $ (22) | $ (209) |
Commitments and Contingencies (
Commitments and Contingencies (Details) - Sensient Natural Ingredients LLC [Member] | 3 Months Ended |
Mar. 31, 2016Employee | |
Loss Contingencies [Line Items] | |
Number of employees terminated | 5 |
Number of additional potentially aggrieved former employees | 13 |