Form 8-K SENSIENT TECHNOLOGIES For: Oct 19
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
October 19, 2018
(Date of Report/Date of earliest event reported)
SENSIENT TECHNOLOGIES CORPORATION
(Exact name of registrant as specified in its charter)
WISCONSIN
|
1-7626
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39-0561070
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(State or other jurisdiction of incorporation)
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(Commission File Number)
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(IRS Employer Identification No.)
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777 East Wisconsin Avenue
Milwaukee, Wisconsin 53202-5304
(Address and zip code of principal executive offices)
(414) 271-6755
(Registrant’s telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
☐ |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
|
☐ |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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☐ |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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☐ |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or
Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or
revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
ITEM 2.02 |
RESULTS OF OPERATIONS AND FINANCIAL CONDITION.
|
On October 19, 2018, Sensient Technologies Corporation issued a press release disclosing its results of operations for its quarter and nine months
ended September 30, 2018, and its financial condition at that date. The press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.
ITEM 9.01 |
FINANCIAL STATEMENTS AND EXHIBITS.
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The following exhibit is furnished with this Current Report on Form 8-K:
Exhibit 99.1: |
Sensient Technologies Corporation Earnings Press Release for the Quarter and Nine Months Ended September 30, 2018.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.
SENSIENT TECHNOLOGIES CORPORATION
(Registrant)
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|||
By:
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/s/ John J. Manning
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Name:
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John J. Manning
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||
Title:
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Vice President, General Counsel and Secretary
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||
Date:
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October 19, 2018
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EXHIBIT INDEX
Sensient Technologies Corporation Earnings Press Release for the Quarter and Nine Months Ended September 30, 2018.
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Exhibit 99.1
Contact:
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Kim Chase
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(414) 347-3706
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Sensient Technologies Corporation
Reports Results for the Quarter Ended September 30, 2018
MILWAUKEE—October 19, 2018 — Sensient Technologies Corporation
(NYSE: SXT) reported earnings per share of $1.12 in the third quarter of 2018 compared to 73 cents in the third quarter of 2017. Revenue was $342.7 million in this year’s third quarter compared to $353.5 million in last year’s third quarter.
Operating income was $50.3 million in the third quarter of 2018 and $52.0 million in last year’s third quarter.
For the nine months ended September 30, 2018 and 2017, earnings per share were $2.92 and $1.72, respectively. Revenue was $1.1
billion for the first nine months of 2018 and $1.0 billion for the first nine months of 2017. Operating income was $158.1 million and $120.4 million in the first nine months of 2018 and 2017, respectively.
The 2018 reported results include an adjustment to the provisional amount recorded in 2017 for the impact of the Tax Cuts and
Jobs Act (“2017 Tax Legislation”), which is described in more detail under “Reconciliation of Non-GAAP Amounts” below. The impact of this adjustment
increased earnings per share by 17 cents during this year’s third quarter and did not have any impact on the 2017 third quarter results.
The 2017 reported results include restructuring and other costs, which reduced 2017 third quarter operating income by $6.0
million ($6.7 million after-tax or 15 cents per share) and operating income for the first nine months of 2017 by $45.2 million ($37.8 million after-tax or 85 cents per share). See the “Reconciliation of Non-GAAP Amounts” below, for more information. The Company completed its restructuring activities in 2017 and did not incur any restructuring or other costs in the first nine months of
2018.
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Sensient Technologies Corporation |
Page 2 |
Earnings Release – Quarter Ended September 30, 2018 |
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October 19, 2018 |
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The adjusted results, discussed below, eliminate the impact of the adjustment to the provisional estimate related to the 2017 Tax
Legislation recorded in this year’s third quarter and the restructuring and other costs recorded in last year’s results, and enhance the overall understanding of the Company’s performance when viewed together with our GAAP results. Refer to “Reconciliation of Non-GAAP Amounts” below. Sensient’s adjusted earnings per share increased approximately 7% to 95 cents in this year’s third quarter,
compared to adjusted earnings per share of 89 cents in the comparable period last year. Third quarter operating income was $50.3 million, compared to adjusted operating income of $58.0 million reported in last year’s third quarter. The third
quarter adjusted results include a 13 cent tax benefit related to opportunistic planning in response to last year’s tax law change. Foreign currency translation decreased operating income by approximately 1%, and revenue and adjusted earnings per
share by approximately 2% compared to the adjusted results in 2017.
For the nine months ended September 30, 2018, adjusted earnings per share were $2.76 and operating income was $158.1 million,
which compares to adjusted earnings per share of $2.58 and adjusted operating income of $165.6 million for the nine months ended September 30, 2017. Foreign currency translation increased revenue and operating income by approximately 2%, and
adjusted earnings per share by approximately 1% compared to the adjusted results in 2017.
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Sensient Technologies Corporation |
Page 3 |
Earnings Release – Quarter Ended September 30, 2018 |
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October 19, 2018 |
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BUSINESS REVIEW
Reported
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||||||||
Revenue
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Quarter
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Year-to-Date
|
||||||
Flavors & Fragrances
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(5.9
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%)
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0.5
|
%
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||||
Color
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1.3
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%
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6.6
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%
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||||
Asia Pacific
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(4.4
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%)
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0.8
|
%
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||||
Total Revenue
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(3.1
|
%)
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2.8
|
%
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||||
Local Currency (1)
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||||||||
Revenue
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Quarter
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Year-to-Date
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||||||
Flavors & Fragrances
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(5.3
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%)
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(1.2
|
%)
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||||
Color
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4.1
|
%
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5.1
|
%
|
||||
Asia Pacific
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(1.5
|
%)
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0.0
|
%
|
||||
Total Revenue
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(1.4
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%)
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1.2
|
%
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||||
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(1)
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Local currency percentage changes are described in more detail in the Reconciliation of Non-GAAP amounts below.
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The Color Group reported revenue of $135.0 million in the quarter, an increase of approximately 1% over last year’s third quarter
revenue of $133.2 million. Segment operating income was $27.3 million in this year’s third quarter compared to $28.6 million in last year’s comparable quarter. The higher revenue was due to a continued strong demand for natural colors. The Cosmetic
business reported lower revenue and operating income in the quarter, compared to very strong results in last year’s third quarter, primarily due to customer inventory destocking. Foreign currency translation decreased quarterly revenue by
approximately 3% and operating income by approximately 2%.
For the first nine months of 2018, the Color Group reported revenue of $426.4 million compared to $400.2 million in the first
nine months of 2017, an increase of approximately 7%. Segment operating income increased by approximately 5% to $92.1 million in the first nine months of 2018 from $87.9 million in the first nine months of 2017. Foreign currency translation
increased both revenue and operating income in the first nine months of 2018 by approximately 2%.
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Sensient Technologies Corporation |
Page 4 |
Earnings Release – Quarter Ended September 30, 2018 |
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October 19, 2018 |
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The Flavors & Fragrances Group reported revenue of $184.4 million in the quarter, compared to $196.0 million in last year’s
comparable quarter. Segment operating income was $24.8 million in this year’s third quarter and $33.0 million in last year’s third quarter. The Group’s lower profit was a result of lower volumes at the production site affected by last year’s plant
consolidation, ongoing market declines in several key dairy categories, higher onion costs, and lower onion pricing. The Latin America, Fragrances, BioNutrients, and European Sweet & Beverage businesses all delivered solid revenue and profit
growth in the quarter. The Company believes that the headwinds created by onion costs and pricing have now subsided. The Company also believes that volumes at the site impacted by last year’s plant consolidation have now stabilized. Foreign
currency translation had a minimal impact on both revenue and operating income in the quarter.
For the first nine months of 2018, the Flavors & Fragrances Group reported revenue of $571.4 million compared to $568.4
million in the first nine months of 2017, an increase of approximately 1%. Segment operating income was $74.1 million and $90.3 million for the first nine months of 2018 and 2017, respectively. Foreign currency translation increased revenue by
approximately 2% and had a minimal impact on operating income in the first nine months of 2018.
The Asia Pacific Group reported revenue of $31.3 million in the current quarter compared to $32.7 million in last year’s
comparable quarter. Segment operating income was $5.8 million in both the current quarter and last year’s comparable quarter. Revenue for the first nine months of 2018 was $92.1 million compared to $91.3 million in the first nine months of 2017.
Segment operating income increased 3%, from $14.8 million reported in the first nine months of 2017 to $15.3 million in the first nine months of 2018. Foreign currency translation increased revenue by approximately 1% and operating income by
approximately 2% in the first nine months of 2018.
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Sensient Technologies Corporation |
Page 5 |
Earnings Release – Quarter Ended September 30, 2018 |
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October 19, 2018 |
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Corporate & Other reported operating costs of $7.6 million in the quarter and $15.4 million in last year’s third quarter.
Operating costs for the first nine months of 2018 were $23.3 million compared to $72.5 million in the first nine months of 2017. Last year’s third quarter and year-to-date results include $6.0 million and $45.2 million, respectively, of
restructuring and other costs. The lower costs this year are primarily a result of the absence of restructuring and other costs, and lower performance based executive compensation. During the current quarter, the Company acquired a botanical
extraction business that is recorded in the Corporate & Other segment. Revenue and operating income for this business were not material to the quarterly results.
2018 OUTLOOK
“I am pleased that we have now lapped the aftermath of our restructuring as well as our onion issues, which have impacted the
Flavors & Fragrances segment this year,” said Paul Manning, Chairman, President and CEO of Sensient Technologies Corporation. “Our key focus going forward will be to capitalize on our positive commercial activity.”
The Company has a number of headwinds relative to last year’s fourth quarter earnings per share, including a higher tax rate,
higher interest expense, and higher corporate expense. The higher tax rate is due to non-recurring tax benefits that occurred in the fourth quarter of 2017, and the higher corporate expense relates to a reduction in performance based compensation
in last year’s fourth quarter. The Company also expects the impact of the recent acquisition to reduce fourth quarter earnings per share by approximately one cent. The total impact of these headwinds is approximately ten cents, or 12% of last
year’s adjusted earnings per share. Considering the impact of these items, the Company expects fourth quarter earnings per share to be down mid-single digits, in percentage terms, from last year’s fourth quarter adjusted earnings per share result.
As a result, the Company now expects that full year adjusted earnings per share will be slightly below the range previously provided.
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Sensient Technologies Corporation |
Page 6 |
Earnings Release – Quarter Ended September 30, 2018 |
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October 19, 2018 |
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CONFERENCE CALL
The Company will host a conference call to discuss its 2018 third quarter financial results at 9:00 a.m. CDT on Friday, October
19, 2018. To participate in the conference call, please contact InterCall Teleconferencing at (888) 818-9025 and refer to conference identification number 4758329. A webcast of the conference call will be available on the Investor Information
section of the Company’s web site at www.sensient.com.
A replay will be available beginning at 12:00 p.m. CDT on October 19, 2018, through 11:00 p.m. on October 26, 2018, by calling
(404) 537-3406 and referring to conference identification number 4758329. A transcript of the call will be posted on the Company’s web site at www.sensient.com
after the call concludes.
This release contains statements that may constitute “forward-looking statements” within the meaning of
Federal securities laws. Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors concerning the Company’s operations and business environment. Important factors
that could cause actual results to differ materially from those suggested by these forward-looking statements and that could adversely affect the Company’s future financial performance include the following: the pace and nature of new product
introductions by the Company and the Company’s customers; the Company’s ability to successfully implement its strategy to create sustainable, long-term shareholder value; the Company’s ability to successfully implement its growth strategies; the
outcome of the Company’s various productivity-improvement and cost-reduction efforts; the effectiveness of the Company’s past restructuring activities; changes in costs or availability of raw materials, including energy; industry and economic
factors related to the Company’s domestic and international business; growth in markets for products in which the Company competes; industry and customer acceptance of price increases; actions by competitors, including increased intensity of
competition; the loss of any customers in certain product lines in which our sales are made to a relatively small number of customers; product liability claims or product recalls; the costs of compliance, or failure to comply, with laws and
regulations applicable to our industries and markets; changing consumer preferences and changing technologies; currency exchange rate fluctuations; estimates related to the Tax Cuts and Jobs Act and its effects on our results; and failure to
complete and integrate future acquisitions or dispositions. The risks and uncertainties identified above are not the only risks the Company faces. Additional risks and uncertainties not presently known to the Company or that it currently believes
to be immaterial also may adversely affect the Company. Should any known or unknown risks and uncertainties develop into actual events, these developments could have material adverse effects on our business, financial condition and results of
operations. This release contains time-sensitive information that reflects management’s best analysis only as of the date of this release. Except to the extent required by applicable laws, the Company does not undertake to publicly update or revise
its forward-looking statements even if experience or future changes make it clear that any projected results expressed or implied herein will not be realized. Additional information regarding these risks can be found in our most recent Annual
Report on Form 10-K and subsequent reports that we file with the SEC.
- MORE -
Sensient Technologies Corporation |
Page 7 |
Earnings Release – Quarter Ended September 30, 2018 |
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October 19, 2018 |
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ABOUT SENSIENT TECHNOLOGIES
Sensient Technologies Corporation is a leading global manufacturer and marketer of colors, flavors and fragrances. Sensient
employs advanced technologies at facilities around the world to develop specialty food and beverage systems, cosmetic and pharmaceutical systems, inkjet and specialty inks and colors, and other specialty and fine chemicals. The Company’s customers
include major international manufacturers representing most of the world’s best-known brands. Sensient is headquartered in Milwaukee, Wisconsin.
www.sensient.com
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Sensient Technologies Corporation
|
Page 8
|
(In thousands, except percentages and per share amounts)
|
|
(Unaudited)
|
Consolidated Statements of Earnings
|
Three Months Ended September 30
|
Nine Months Ended September 30
|
||||||||||||||||||||||
2018
|
2017
|
% Change
|
2018
|
2017
|
% Change
|
|||||||||||||||||||
Revenue
|
$
|
342,734
|
$
|
353,519
|
-3.1
|
%
|
$
|
1,062,252
|
$
|
1,033,391
|
2.8
|
%
|
||||||||||||
Cost of products sold
|
227,161
|
230,784
|
-1.6
|
%
|
702,138
|
670,486
|
4.7
|
%
|
||||||||||||||||
Selling and administrative expenses
|
65,309
|
70,725
|
-7.7
|
%
|
201,988
|
242,478
|
-16.7
|
%
|
||||||||||||||||
Operating income
|
50,264
|
52,010
|
-3.4
|
%
|
158,126
|
120,427
|
31.3
|
%
|
||||||||||||||||
Interest expense
|
5,407
|
4,946
|
16,517
|
14,474
|
||||||||||||||||||||
Earnings before income taxes
|
44,857
|
47,064
|
141,609
|
105,953
|
||||||||||||||||||||
Income taxes
|
(2,336
|
)
|
14,851
|
17,099
|
29,774
|
|||||||||||||||||||
Net earnings
|
$
|
47,193
|
$
|
32,213
|
46.5
|
%
|
$
|
124,510
|
$
|
76,179
|
63.4
|
%
|
||||||||||||
Earnings per share of common stock:
|
||||||||||||||||||||||||
Basic
|
$
|
1.12
|
$
|
0.74
|
$
|
2.93
|
$
|
1.73
|
||||||||||||||||
Diluted
|
$
|
1.12
|
$
|
0.73
|
$
|
2.92
|
$
|
1.72
|
||||||||||||||||
Average common shares outstanding:
|
||||||||||||||||||||||||
Basic
|
42,240
|
43,624
|
42,464
|
43,947
|
||||||||||||||||||||
Diluted
|
42,313
|
43,864
|
42,571
|
44,209
|
Reconciliation of Non-GAAP Amounts
The Company’s results for the three and nine months ended September 30, 2018, include an adjustment of $7.1 million ($0.17 per share) to the
provisional amount recorded in 2017 for the impact of the Tax Cuts and Jobs Act (“2017 Tax Legislation”). The Company did not incur any restructuring or other costs for the three and nine months ended September 30, 2018. The Company’s results for
the three and nine months ended September 30, 2017, include pre-tax restructuring and other costs of $6.0 million ($6.7 million after-tax or $0.15 per share) and $45.2 million ($37.8 million after-tax or $0.85 per share), respectively. The
restructuring costs related to eliminating underperforming operations, consolidating manufacturing facilities and improving efficiencies within the Company. The other costs in 2017 relate to the completed sale of a facility and certain related
business lines within the Flavors & Fragrances segment in Strasbourg, France.
Three Months Ended September 30
|
Nine Months Ended September 30
|
|||||||||||||||||||||||
|
2018
|
2017
|
% Change
|
2018
|
2017
|
% Change
|
||||||||||||||||||
Operating income (GAAP)
|
$
|
50,264
|
$
|
52,010
|
-3.4
|
%
|
$
|
158,126
|
$
|
120,427
|
31.3
|
%
|
||||||||||||
Restructuring - Cost of products sold
|
-
|
3,073
|
-
|
3,415
|
||||||||||||||||||||
Restructuring - Selling and administrative
|
-
|
2,927
|
-
|
30,212
|
||||||||||||||||||||
Other - Selling and administrative
|
-
|
14
|
-
|
11,555
|
||||||||||||||||||||
Adjusted operating income
|
$
|
50,264
|
$
|
58,024
|
-13.4
|
%
|
$
|
158,126
|
$
|
165,609
|
-4.5
|
%
|
||||||||||||
Net earnings (GAAP)
|
$
|
47,193
|
$
|
32,213
|
46.5
|
%
|
$
|
124,510
|
$
|
76,179
|
63.4
|
%
|
||||||||||||
Restructuring and other, before tax
|
-
|
6,014
|
-
|
45,182
|
||||||||||||||||||||
Tax impact of restructuring and other
|
-
|
681
|
-
|
(7,424
|
)
|
|||||||||||||||||||
Impact of the 2017 Tax Legislation
|
(7,061
|
)
|
-
|
(7,061
|
)
|
-
|
||||||||||||||||||
Adjusted net earnings
|
$
|
40,132
|
$
|
38,908
|
3.1
|
%
|
$
|
117,449
|
$
|
113,937
|
3.1
|
%
|
||||||||||||
Diluted EPS (GAAP)
|
$
|
1.12
|
$
|
0.73
|
53.4
|
%
|
$
|
2.92
|
$
|
1.72
|
69.8
|
%
|
||||||||||||
Restructuring and other, net of tax
|
-
|
0.15
|
-
|
0.85
|
||||||||||||||||||||
2017 Tax Legislation
|
(0.17
|
)
|
-
|
(0.17
|
)
|
-
|
||||||||||||||||||
Adjusted diluted EPS
|
$
|
0.95
|
$
|
0.89
|
6.7
|
%
|
$
|
2.76
|
$
|
2.58
|
7.0
|
%
|
Note: Earnings per share calculations may not foot due to rounding differences.
- MORE -
Sensient Technologies Corporation
|
Page 9
|
(In thousands, except per share amounts)
|
|
(Unaudited)
|
Reconciliation of Non-GAAP Amounts - Continued
The following table summarizes the percentage change in the 2018 results compared to the 2017 results for the corresponding periods.
Three Months Ended September 30, 2018
|
Nine Months Ended September 30, 2018
|
|||||||||||||||||||||||
Revenue
|
Total
|
Foreign
Exchange
Rates
|
Local
Currency
|
Total
|
Foreign
Exchange
Rates
|
Local
Currency
|
||||||||||||||||||
Flavors & Fragrances
|
(5.9
|
%)
|
(0.6
|
%)
|
(5.3
|
%)
|
0.5
|
%
|
1.8
|
%
|
(1.2
|
%)
|
||||||||||||
Color
|
1.3
|
%
|
(2.8
|
%)
|
4.1
|
%
|
6.6
|
%
|
1.5
|
%
|
5.1
|
%
|
||||||||||||
Asia Pacific
|
(4.4
|
%)
|
(2.9
|
%)
|
(1.5
|
%)
|
0.8
|
%
|
0.8
|
%
|
0.0
|
%
|
||||||||||||
Total Revenue
|
(3.1
|
%)
|
(1.7
|
%)
|
(1.4
|
%)
|
2.8
|
%
|
1.6
|
%
|
1.2
|
%
|
We have included each of these non-GAAP measures in order to provide additional information regarding our underlying operating results and
comparable period-over-period performance. Such information is supplemental to information presented in accordance with GAAP and is not intended to represent a presentation in accordance with GAAP. These non-GAAP measures should not be considered
in isolation. Rather, they should be considered together with GAAP measures and the rest of the information included in this release and our SEC filings. Management internally reviews each of these non-GAAP measures to evaluate performance on a
comparative period-to-period basis and to gain additional insight into underlying operating and performance trends, and we believe the information can be beneficial to investors for the same purposes. These non-GAAP measures may not be comparable
to similarly titled measures used by other companies.
Results by Segment
|
Three Months Ended September 30
|
Nine Months Ended September 30
|
||||||||||||||||||||||
Revenue
|
2018
|
2017
|
% Change
|
2018
|
2017
|
% Change
|
||||||||||||||||||
Flavors & Fragrances
|
$
|
184,397
|
$
|
195,992
|
-5.9
|
%
|
$
|
571,401
|
$
|
568,423
|
0.5
|
%
|
||||||||||||
Color
|
134,961
|
133,223
|
1.3
|
%
|
426,412
|
400,183
|
6.6
|
%
|
||||||||||||||||
Asia Pacific
|
31,275
|
32,708
|
-4.4
|
%
|
92,063
|
91,289
|
0.8
|
%
|
||||||||||||||||
Corporate & Other
|
169
|
-
|
169
|
- | ||||||||||||||||||||
Intersegment elimination
|
(8,068
|
)
|
(8,404
|
)
|
(27,793
|
)
|
(26,504
|
)
|
||||||||||||||||
Consolidated
|
$
|
342,734
|
$
|
353,519
|
-3.1
|
%
|
$
|
1,062,252
|
$
|
1,033,391
|
2.8
|
%
|
||||||||||||
Operating Income
|
||||||||||||||||||||||||
Flavors & Fragrances
|
$
|
24,814
|
$
|
33,006
|
-24.8
|
%
|
$
|
74,142
|
$
|
90,278
|
-17.9
|
%
|
||||||||||||
Color
|
27,269
|
28,624
|
-4.7
|
%
|
92,074
|
87,913
|
4.7
|
%
|
||||||||||||||||
Asia Pacific
|
5,750
|
5,780
|
-0.5
|
%
|
15,256
|
14,750
|
3.4
|
%
|
||||||||||||||||
Corporate & Other
|
(7,569
|
)
|
(15,400
|
)
|
(23,346
|
)
|
(72,514
|
)
|
||||||||||||||||
Consolidated
|
$
|
50,264
|
$
|
52,010
|
-3.4
|
%
|
$
|
158,126
|
$
|
120,427
|
31.3
|
%
|
The Company’s reportable segments consist of the Flavors & Fragrances, Color, and Asia Pacific segments. During the three months ended
September 30, 2018, the Company completed the acquisition of Mazza Innovation Limited. This business provides broad technologies for both the Color and Flavor & Fragrances segments and is included in Corporate & Other. The 2017
restructuring and other costs are reported in Corporate & Other.
- MORE -
Sensient Technologies Corporation
|
Page 10
|
(In thousands, except per share amounts)
|
|
(Unaudited)
|
Consolidated Condensed Balance Sheets
|
||||||||
September 30
|
2018
|
2017
|
||||||
Cash and cash equivalents
|
$
|
36,760
|
$
|
24,654
|
||||
Trade accounts receivable, net
|
271,268
|
222,552
|
||||||
Inventories
|
484,811
|
456,480
|
||||||
Other current assets
|
40,152
|
43,245
|
||||||
Assets Held for Sale
|
1,903
|
7,396
|
||||||
Total Current Assets
|
834,894
|
754,327
|
||||||
Goodwill & intangible assets (net)
|
435,796
|
414,785
|
||||||
Property, plant, and equipment (net)
|
492,171
|
484,761
|
||||||
Other assets
|
78,046
|
84,992
|
||||||
Total Assets
|
$
|
1,840,907
|
$
|
1,738,865
|
||||
Trade accounts payable
|
$
|
97,027
|
$
|
101,104
|
||||
Short-term debt
|
20,096
|
20,092
|
||||||
Other current liabilities
|
77,051
|
89,015
|
||||||
Total Current Liabilities
|
194,174
|
210,211
|
||||||
Long-term debt
|
746,012
|
607,395
|
||||||
Accrued employee and retiree benefits
|
22,094
|
21,283
|
||||||
Other liabilities
|
32,458
|
20,444
|
||||||
Shareholders’ Equity
|
846,169
|
879,532
|
||||||
Total Liabilities and Shareholders’ Equity
|
$
|
1,840,907
|
$
|
1,738,865
|
During the three months ended June 30, 2018, the Company amended its account receivable securitization program and the Company no longer accounts
for the sale of trade receivables in accordance with Accounting Standard Codification (ASC) Topic 860, Transfers and Servicing. As a result of
this amendment, the Company’s trade account receivables increased by $60 million and the Company’s long-term debt increased by $60 million.
Consolidated Statements of Cash Flows
|
||||||||
Nine Months Ended September 30
|
2018
|
2017
|
||||||
Cash flows from operating activities:
|
||||||||
Net earnings
|
$
|
124,510
|
$
|
76,179
|
||||
Adjustments to arrive at net cash provided by operating activities:
|
||||||||
Depreciation and amortization
|
39,057
|
36,626
|
||||||
Stock-based compensation
|
1,541
|
6,296
|
||||||
Net loss on assets
|
311
|
1,371
|
||||||
Loss on divestiture of businesses
|
-
|
33,160
|
||||||
Deferred income taxes
|
3,152
|
(9,087
|
)
|
|||||
Changes in operating assets and liabilities
|
(159,711
|
)
|
(122,386
|
)
|
||||
Net cash provided by operating activities
|
8,860
|
22,159
|
||||||
Cash flows from investing activities:
|
||||||||
Acquisition of property, plant and equipment
|
(34,090
|
)
|
(32,825
|
)
|
||||
Cash receipts on sold receivables
|
91,142
|
86,229
|
||||||
Proceeds from sale of assets
|
283
|
5,444
|
||||||
Proceeds from divestiture of businesses
|
-
|
12,457
|
||||||
Acquisition of new businesses
|
(31,100
|
)
|
-
|
|||||
Other investing activity
|
616
|
2,396
|
||||||
Net cash provided by investing activities
|
26,851
|
73,701
|
||||||
Cash flows from financing activities:
|
||||||||
Proceeds from additional borrowings
|
248,426
|
188,387
|
||||||
Debt payments
|
(158,214
|
)
|
(190,164
|
)
|
||||
Purchase of treasury stock
|
(76,734
|
)
|
(64,486
|
)
|
||||
Dividends paid
|
(42,195
|
)
|
(39,696
|
)
|
||||
Other financing activity
|
(2,777
|
)
|
(988
|
)
|
||||
Net cash used in financing activities
|
(31,494
|
)
|
(106,947
|
)
|
||||
Effect of exchange rate changes on cash and cash equivalents
|
3,199
|
9,876
|
||||||
Net increase (decrease) in cash and cash equivalents
|
7,416
|
(1,211
|
)
|
|||||
Cash and cash equivalents at beginning of period
|
29,344
|
25,865
|
||||||
Cash and cash equivalents at end of period
|
$
|
36,760
|
$
|
24,654
|
The Company adopted Accounting Standards Update (ASU) 2016-15, Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payment, in the first quarter of 2018. This ASU requires that certain cash receipts received on securitized accounts receivable, which were
previously reported as cash flows from operating activities, are reported as cash flows from investing activities. As a result, the Company has included $91 million and $86 million in net cash provided by investing activities for the first nine
months of 2018 and 2017, respectively. The Company amended its account receivable securitization program in June 2018; as a result, collections from securitized accounts receivables are included in cash flow from operating activities for periods
ending after June 30, 2018.
Supplemental Information
|
||||||||
Nine Months Ended September 30,
|
2018
|
2017
|
||||||
Dividends paid per share
|
$
|
0.99
|
$
|
0.90
|