Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Oct. 31, 2018 | |
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 Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Ex Transition Period | false | |
Entity Common Stock, Shares Outstanding | 42,275,048 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2018 |
CONSOLIDATED CONDENSED STATEMEN
CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS (Unaudited) [Abstract] | ||||
Revenue | $ 342,734 | $ 353,519 | $ 1,062,252 | $ 1,033,391 |
Cost of products sold | 227,161 | 230,784 | 702,138 | 670,486 |
Selling and administrative expenses | 65,309 | 70,725 | 201,988 | 242,478 |
Operating income | 50,264 | 52,010 | 158,126 | 120,427 |
Interest expense | 5,407 | 4,946 | 16,517 | 14,474 |
Earnings before income taxes | 44,857 | 47,064 | 141,609 | 105,953 |
Income taxes (benefit) | (2,336) | 14,851 | 17,099 | 29,774 |
Net earnings | $ 47,193 | $ 32,213 | $ 124,510 | $ 76,179 |
Weighted average number of shares outstanding: | ||||
Basic (in shares) | 42,240 | 43,624 | 42,464 | 43,947 |
Diluted (in shares) | 42,313 | 43,864 | 42,571 | 44,209 |
Earnings per common share: | ||||
Basic (in dollars per share) | $ 1.12 | $ 0.74 | $ 2.93 | $ 1.73 |
Diluted (in dollars per share) | 1.12 | 0.73 | 2.92 | 1.72 |
Dividends declared per common share (in dollars per share) | $ 0.33 | $ 0.30 | $ 0.99 | $ 0.90 |
CONSOLIDATED CONDENSED STATEM_2
CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) [Abstract] | ||||
Comprehensive Income | $ 47,961 | $ 44,599 | $ 112,496 | $ 141,053 |
CONSOLIDATED CONDENSED BALANCE
CONSOLIDATED CONDENSED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 36,760 | $ 29,344 |
Trade accounts receivable, net | 271,268 | 195,439 |
Inventories | 484,811 | 463,517 |
Prepaid expenses and other current assets | 40,152 | 43,206 |
Assets held for sale | 1,903 | 1,969 |
TOTAL CURRENT ASSETS | 834,894 | 733,475 |
OTHER ASSETS | 67,178 | 68,251 |
DEFERRED TAX ASSETS | 10,868 | 7,885 |
INTANGIBLE ASSETS, NET | 12,843 | 7,211 |
GOODWILL | 422,953 | 408,995 |
PROPERTY, PLANT AND EQUIPMENT: | ||
Land | 37,043 | 35,198 |
Buildings | 319,969 | 317,464 |
Machinery and equipment | 707,662 | 687,896 |
Construction in progress | 39,140 | 40,833 |
Property, plant and equipment, gross | 1,103,814 | 1,081,391 |
Less accumulated depreciation | (611,643) | (582,868) |
Property, plant and equipment, net | 492,171 | 498,523 |
TOTAL ASSETS | 1,840,907 | 1,724,340 |
CURRENT LIABILITIES: | ||
Trade accounts payable | 97,027 | 109,780 |
Accrued salaries, wages and withholdings from employees | 22,215 | 23,613 |
Other accrued expenses | 51,842 | 51,764 |
Income taxes | 2,994 | 11,036 |
Short-term borrowings | 20,096 | 20,130 |
TOTAL CURRENT LIABILITIES | 194,174 | 216,323 |
DEFERRED TAX LIABILITIES | 24,638 | 18,724 |
OTHER LIABILITIES | 7,820 | 13,539 |
ACCRUED EMPLOYEE AND RETIREE BENEFITS | 22,094 | 19,294 |
LONG-TERM DEBT | 746,012 | 604,159 |
SHAREHOLDERS' EQUITY: | ||
Common stock | 5,396 | 5,396 |
Additional paid-in capital | 102,703 | 107,176 |
Earnings reinvested in the business | 1,497,218 | 1,414,485 |
Treasury stock, at cost | (597,800) | (525,422) |
Accumulated other comprehensive loss | (161,348) | (149,334) |
TOTAL SHAREHOLDERS' EQUITY | 846,169 | 852,301 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ 1,840,907 | $ 1,724,340 |
CONSOLIDATED CONDENSED STATEM_3
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 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 |
Share-based compensation | 1,541 | 6,296 |
Net loss on assets | 311 | 1,371 |
Loss on divestiture of business | 0 | 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 divesture of business | 0 | 12,457 |
Acquisition of new businesses | (31,100) | 0 |
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 year | 29,344 | 25,865 |
Cash and cash equivalents at end of year | $ 36,760 | $ 24,654 |
Accounting Policies
Accounting Policies | 9 Months Ended |
Sep. 30, 2018 | |
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) that are necessary to present fairly the financial position of the Company as of September 30, 2018, and the results of operations and comprehensive income for the three and nine months ended September 30, 2018 and 2017, respectively, and cash flows for the nine months ended September 30, 2018 and 2017, respectively. 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. Please refer to the notes in the Company’s annual consolidated financial statements for the year ended December 31, 2017, for additional details of the Company’s financial condition and a description of the Company’s accounting policies, which have been continued without change except for the Company’s Revenue Recognition accounting policy, which has been updated as a result of the Company’s adoption in the first quarter of 2018 of Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers Revenue Recognition The Company recognizes revenue as the transfer of control of its products to the Company’s customers in an amount reflecting the consideration to which the Company expects to be entitled. In order to achieve this core principle, the Company applies the following five-step approach: · Identification of the contract, or contracts, with a customer · Identification of the performance obligations in the contract · Determination of the transaction price · Allocation of the transaction price to the performance obligations in the contract · Recognition of revenue when, or as, we satisfy the performance obligations The Company considers customer purchase orders, which in some cases are governed by master sales agreements, to be the contracts with the customer. For each contract, the Company considers the identified performance obligation to be the promise to transfer products. In determining the transaction price, the Company evaluates whether the price is subject to refund or adjustment and then determines the net consideration to which the Company expects to be entitled. In addition, the Company assesses the customer’s ability to pay as part of its evaluation of the contract. As the Company’s standard payment terms are less than one year, the Company elected the practical expedient under Accounting Standards Codification (ASC) 606-10-32-18, and determined that its contracts do not have a significant financing component. The Company allocates the transaction price to each distinct product based on the relative standalone selling price. Revenue is recognized when control of the product is transferred to the customer, the customer is obligated to pay the Company, and the Company has no remaining obligations, which is typically at shipment. In certain locations, primarily outside the United States, product shipping terms may vary. Thus, in such locations, the point at which control of the product transfers to the customer and revenue recognition occurs will vary accordingly. Customer returns of non-conforming products are estimated at the time revenue is recognized. In certain customer relationships, volume rebates exist, which are recognized according to the terms and conditions of the contractual relationship. Customer returns, rebates, and discounts are not material to the Company’s consolidated financial statements. The Company has elected to recognize the revenue and cost for freight and shipping when control over the products has transferred to the customer. The Company has elected to immediately expense contract costs related to obtaining a contract as the amortization period of the asset the Company otherwise would have recognized would have been less than a year. The Company disaggregates its revenue from customers by certain product lines and geographic locations for the Flavors & Fragrances and Color segments. Revenue for the Asia Pacific segment is managed on a geographic basis. For more information on the Company’s disaggregated revenue, see Note 4, Segment Information New Pronouncements In May 2014, the Financial Accounting Standards Board (FASB) issued ASU No. 2014-09, Revenue from Contracts with Customers Segment Information Segment Information Management’s Discussion and Analysis of Financial Condition and Results of Operations. In February 2016, the FASB issued ASU No. 2016-02, Leases In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments . In December 2016, the FASB issued ASU 2016-16, Accounting for Income Taxes: Intra-Entity Asset Transfers of Assets Other than Inventory Earnings reinvested in the business Deferred Tax Assets Prepaid Expense and Other Current Assets Deferred Tax Liabilities In March 2017, the FASB issued ASU No. 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost Interest Expense Selling and Administrative Expenses In August 2017, the FASB issued ASU No. 2017-12, Targeted Improvements to Accounting for Hedging Activities - In February 2018, the FASB issued ASU 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income Please refer to the notes in the Company’s annual consolidated financial statements for the year ended December 31, 2017, for additional details of the Company’s financial condition and a description of the Company’s accounting policies, which have been continued without change, except as discussed above. |
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 30, 2018 | |
Acquisitions [Abstract] | |
Acquisitions | 2. Acquisitions On July 10, 2018, the Company completed the acquisition of Mazza Innovation Limited On March 9, 2018, the Company completed the acquisition of certain net assets and the natural color business of GlobeNatural, |
Fair Value
Fair Value | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value [Abstract] | |
Fair Value | 3. Fair Value Accounting Standards Codification (ASC) 820, Fair Value Measurements and Disclosures Other Assets The carrying values of the Company’s cash and cash equivalents, trade accounts receivable, accounts payable, accrued expenses, and short-term borrowings were approximately the same as the fair values as of September 30, 2018. 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 September 30, 2018, was $746.0 million. The fair value of the long-term debt at September 30, 2018, was $754.3 million. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2018 | |
Segment Information [Abstract] | |
Segment Information | 4. 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 September 30, 2018: Revenue from external customers $ 179,103 $ 132,187 $ 31,275 $ 169 $ 342,734 Intersegment revenue 5,294 2,774 - - 8,068 Total revenue $ 184,397 $ 134,961 $ 31,275 $ 169 $ 350,802 Operating income (loss) $ 24,814 $ 27,269 $ 5,750 $ (7,569 ) $ 50,264 Interest expense - - - 5,407 5,407 Earnings (loss) before income taxes $ 24,814 $ 27,269 $ 5,750 $ (12,976 ) $ 44,857 Three months ended September 30, 2017: Revenue from external customers $ 191,063 $ 129,899 $ 32,557 $ - $ 353,519 Intersegment revenue 4,929 3,324 151 - 8,404 Total revenue $ 195,992 1 $ 133,223 $ 32,708 $ - $ 361,923 Operating income (loss) $ 33,006 $ 28,624 $ 5,780 $ (15,400 ) $ 52,010 Interest expense - - - 4,946 4,946 Earnings (loss) before income taxes $ 33,006 $ 28,624 $ 5,780 $ (20,346 ) $ 47,064 (In thousands) Flavors & Fragrances Color Asia Pacific Corporate & Other Consolidated Nine months ended September 30, 2018: Revenue from external customers $ 553,403 $ 416,617 $ 92,063 $ 169 $ 1,062,252 Intersegment revenue 17,998 9,795 - - 27,793 Total revenue $ 571,401 $ 426,412 $ 92,063 $ 169 $ 1,090,045 Operating income (loss) $ 74,142 $ 92,074 $ 15,256 $ (23,346 ) $ 158,126 Interest expense - - - 16,517 16,517 Earnings (loss) before income taxes $ 74,142 $ 92,074 $ 15,256 $ (39,863 ) $ 141,609 Nine months ended September 30, 2017: Revenue from external customers $ 552,874 $ 389,992 $ 90,525 $ - $ 1,033,391 Intersegment revenue 15,549 10,191 764 - 26,504 Total revenue $ 568,423 $ 400,183 $ 91,289 $ - $ 1,059,895 Operating income (loss) $ 90,278 $ 87,913 $ 14,750 $ (72,514 ) $ 120,427 Interest expense - - - 14,474 14,474 Earnings (loss) before income taxes $ 90,278 $ 87,913 $ 14,750 $ (86,988 ) $ 105,953 In July 2018, the Company completed the acquisition of Mazza Innovation Limited Acquisitions Corporate & Other. The Company evaluates performance based on operating income of the respective segments before restructuring and other costs, interest expense, and income taxes. The 2017 restructuring and other costs are reported in Corporate & Other. The 2017 other costs pertain to the costs associated with the Company’s divestiture of a facility and certain related business lines within the Flavors & Fragrances business in Strasbourg, France. There have been no restructuring and other costs in 2018. In addition to evaluating the Company’s performance based on the segments above, revenue is also disaggregated and analyzed by product line and geographic market. The following table displays our revenue by these major sources. Product Lines (In thousands) Flavors & Color Asia Pacific Corporate & Other Consolidated Three months ended September 30, 2018: Flavors $ 98,060 $ - $ - $ - $ 98,060 Natural Ingredients 58,140 - - - 58,140 Fragrances 28,197 - - - 28,197 Food & Beverage Colors - 76,524 - - 76,524 Cosmetics - 35,466 - - 35,466 Other Colors - 22,971 - - 22,971 Asia Pacific - - 31,275 - 31,275 Corporate & Other - - - 169 169 Intersegment Revenue (5,294 ) (2,774 ) - - (8,068 ) Total revenue from external customers $ 179,103 $ 132,187 $ 31,275 $ 169 $ 342,734 Three months ended September 30, 2017: Flavors $ 113,215 $ - $ - $ - $ 113,215 Natural Ingredients 59,851 - - - 59,851 Fragrances 22,926 - - - 22,926 Food & Beverage Colors - 70,858 - - 70,858 Cosmetics - 38,729 - - 38,729 Other Colors - 23,636 - - 23,636 Asia Pacific - - 32,708 - 32,708 Intersegment Revenue (4,929 ) (3,324 ) (151 ) - (8,404 ) Total revenue from external customers $ 191,063 $ 129,899 $ 32,557 $ - $ 353,519 Product Lines (In thousands) Flavors & Fragrances Color Asia Pacific Corporate & Other Consolidated Nine months ended September 30, 2018: Flavors $ 322,333 $ - $ - $ - $ 322,333 Natural Ingredients 167,538 - - - 167,538 Fragrances 81,530 - - - 81,530 Food & Beverage Colors - 230,807 - - 230,807 Cosmetics - 121,697 - - 121,697 Other Colors - 73,908 - - 73,908 Asia Pacific - - 92,063 - 92,063 Corporate & Other - - - 169 169 Intersegment Revenue (17,998 ) (9,795 ) - - (27,793 ) Total revenue from external customers $ 553,403 $ 416,617 $ 92,063 $ 169 $ 1,062,252 Nine months ended September 30, 2017: Flavors $ 342,367 $ - $ - $ - $ 342,367 Natural Ingredients 162,371 - - - 162,371 Fragrances 63,685 - - - 63,685 Food & Beverage Colors - 212,741 - - 212,741 Cosmetics - 113,077 - - 113,077 Other Colors - 74,365 - - 74,365 Asia Pacific - - 91,289 - 91,289 Intersegment Revenue (15,549 ) (10,191 ) (764 ) - (26,504 ) Total revenue from external customers $ 552,874 $ 389,992 $ 90,525 $ - $ 1,033,391 Geographic Markets (In thousands) Flavors & Fragrances Color Asia Pacific Corporate & Other Consolidated Three months ended September 30, 2018: North America $ 118,690 $ 63,850 $ - $ 95 $ 182,635 Europe 42,866 34,854 81 74 77,875 Asia Pacific 7,053 15,910 31,032 - 53,995 Other 10,494 17,573 162 - 28,229 Total revenue from external customers $ 179,103 $ 132,187 $ 31,275 $ 169 $ 342,734 Three months ended September 30, 2017: North America $ 131,632 $ 59,579 $ - $ - $ 191,211 Europe 40,891 38,686 178 - 79,755 Asia Pacific 7,042 13,357 31,937 - 52,336 Other 11,498 18,277 442 - 30,217 Total revenue from external customers $ 191,063 $ 129,899 $ 32,557 $ - $ 353,519 Geographic Markets (In thousands) Flavors & Fragrances Color Asia Pacific Corporate & Other Consolidated Nine months ended September 30, 2018: North America $ 364,941 $ 191,170 $ - $ 95 $ 556,206 Europe 133,257 119,612 111 74 253,054 Asia Pacific 23,144 50,461 91,327 - 164,932 Other 32,061 55,374 625 - 88,060 Total revenue from external customers $ 553,403 $ 416,617 $ 92,063 $ 169 $ 1,062,252 Nine months ended September 30, 2017: North America $ 375,481 $ 180,616 $ - $ - $ 556,097 Europe 125,812 112,796 303 - 238,911 Asia Pacific 20,164 43,158 89,229 - 152,551 Other 31,417 53,422 993 - 85,832 Total revenue from external customers $ 552,874 $ 389,992 $ 90,525 $ - $ 1,033,391 |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2018 | |
Inventories [Abstract] | |
Inventories | 5. Inventories At September 30, 2018, and December 31, 2017, inventories included finished and in-process products totaling $324.7 million and $310.4 million, respectively, and raw materials and supplies of $160.1 million and $153.1 million, respectively. |
Retirement Plans
Retirement Plans | 9 Months Ended |
Sep. 30, 2018 | |
Retirement Plans [Abstract] | |
Retirement Plans | 6. 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 September 30, Nine Months Ended September 30, (In thousands) 2018 2017 2018 2017 Service cost $ 366 $ 466 $ 1,100 $ 1,392 Interest cost 282 366 857 1,080 Expected return on plan assets (236 ) (264 ) (722 ) (778 ) Amortization of actuarial gain (27 ) (19 ) (81 ) (61 ) Settlement expense - - - 3,797 Total defined benefit expense $ 385 $ 549 $ 1,154 $ 5,430 During the three months ended June 30, 2017, one of the Company’s defined benefit plans was terminated. As a result, the pension benefit obligation was settled by making lump-sum cash payments to certain participants and also purchasing nonparticipating annuity contracts to cover the remaining vested benefits. As a result of this plan’s termination, the Company recognized $3.8 million of settlement expense during the three months ended June 30, 2017, which have been recorded in the Company’s restructuring and other costs. The plan was associated with two facilities that were closed under the Company’s 2014 Restructuring Plan. As noted in Note 1, Accounting Policies Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost Interest Expense Selling and Administrative Expenses |
Shareholders' Equity
Shareholders' Equity | 9 Months Ended |
Sep. 30, 2018 | |
Shareholders' Equity [Abstract] | |
Shareholders' Equity | 7. Shareholders’ Equity The Company repurchased 60,000 and 1,060,000 shares of its common stock for an aggregate cost of $4.0 million and $76.7 million during the three and nine months ended September 30, 2018, respectively. The Company repurchased 505,085 and 839,734 shares of its common stock for an aggregate cost of $37.7 million and $64.5 million during the three and nine months ended September 30, 2017, respectively. The amounts related to treasury stock purchases reported in the Company’s Consolidated Condensed Statements of Cash Flows represent purchases that settled within each respective nine-month period. |
Derivative Instruments and Hedg
Derivative Instruments and Hedging Activity | 9 Months Ended |
Sep. 30, 2018 | |
Derivative Instruments and Hedging Activity [Abstract] | |
Derivative Instruments and Hedging Activity | 8. 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 in order to reduce 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 | 9 Months Ended |
Sep. 30, 2018 | |
Income Taxes [Abstract] | |
Income Taxes | 9. Income Taxes The effective income tax rates for the quarters ended September 30, 2018 and 2017, were -5.2% and 31.6%, respectively. For the nine month periods ended September 30, 2018 and 2017, the effective income tax rates were 12.1% and 28.1%, respectively. The effective tax rates in both 2018 and 2017 were impacted by changes in estimates associated with the finalization of prior year foreign and domestic tax items, audit settlements, adjustments to valuation allowances, and the mix of foreign earnings. The 2018 tax rate was also impacted by the 2017 Tax Cuts and Jobs Act, which is commonly referred to as the “2017 Tax Legislation”, including the filing of certain tax elections in the second quarter of 2018, an adjustment made in the current quarter to the provisional amount recorded in 2017 for the impact of the 2017 Tax Legislation, and the tax benefit associated with certain transactions undertaken in the quarter. These transactions reduced the tax rate by 12.5 and 3.9 percentage points for the three and nine month periods ended September 30, 2018, respectively. The tax rate in 2017 was also impacted by the restructuring activities, the limited tax deductibility of losses related to the Company’s restructuring activities, and the sale of a facility and certain related business lines within the Flavors & Fragrances segment in Strasbourg, France. Staff Accounting Bulletin No. 118 (SAB 118) was issued to address the application of U.S. GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the 2017 Tax Legislation. Based on guidance issued by the IRS during the quarter, the Company reduced its 2017 provisional estimate of the impact of the 2017 Tax Legislation by $7.1 million during the current quarter. The reduction is made up of a $4.1 million reduction to the one-time transition tax on earnings of foreign subsidiaries and $3.0 million on the reassessment of the U.S. deferred tax assets and liabilities, including the ability to realize deferred tax assets in the future. The Company is still applying SAB 118, and believes the impact of the 2017 Tax Legislation on the 2018 and 2017 income tax expenses should be considered provisional estimates. The ultimate impact could differ from these provisional amounts, possibly materially, due to additional guidance, changes in interpretation, and additional analysis by the Company. Any adjustments to the 2018 and 2017 provisional estimates will be reported in income tax expense in the reporting period in which any such adjustments are determined, which will be no later than the fourth quarter of 2018. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income | 9 Months Ended |
Sep. 30, 2018 | |
Accumulated Other Comprehensive Income [Abstract] | |
Accumulated Other Comprehensive Income | 10. Accumulated Other Comprehensive Income The following table summarizes the changes in OCI during the three and nine month periods ended September 30, 2018: (In thousands) Cash Flow Hedges (a) Pension Items (a) Foreign Currency Items Total Balance as of June 30, 2018 $ (34 ) $ (369 ) $ (161,713 ) $ (162,116 ) Other comprehensive income before reclassifications (121 ) - 931 810 Amounts reclassified from OCI (12 ) (30 ) - (42 ) Balance as of September 30, 2018 $ (167 ) $ (399 ) $ (160,782 ) $ (161,348 ) (In thousands) Cash Flow Hedges (a) Pension Items (a) Foreign Currency Items Total Balance as of December 31, 2017 $ (669 ) $ (309 ) $ (148,356 ) $ (149,334 ) Other comprehensive income before reclassifications 404 - (12,426 ) (12,022 ) Amounts reclassified from OCI 98 (90 ) - 8 Balance as of September 30, 2018 $ (167 ) $ (399 ) $ (160,782 ) $ (161,348 ) (a) Cash Flow Hedges and Pension Items are net of tax. |
Accounts Receivable Securitizat
Accounts Receivable Securitization | 9 Months Ended |
Sep. 30, 2018 | |
Accounts Receivable Securitization [Abstract] | |
Accounts Receivable Securitization | 11. Accounts Receivable Securitization As previously disclosed, in October 2016, the Company entered into an accounts receivable securitization program with Wells Fargo & Company (Wells Fargo), whereby transactions under the program were accounted for as sales of trade receivables in accordance with ASC Topic 860, Transfers and Servicing de minimis Trade Accounts Receivable In June 2018, the Company amended its securitization program with Wells Fargo (the “Amendment”). Following the Amendment, the Company no longer accounts for the sales of the trade receivables in accordance with ASC Topic 860 and instead now maintains the trade receivables and related debt on its Consolidated Balance Sheet. In connection with the Amendment, Wells Fargo’s existing ownership interest in the trade receivables was converted into undivided interests in the trade receivables to secure a loan of up to $60 million to the Company and the deferred purchase price was eliminated. As of September 30, 2018, $60 million was borrowed under this agreement. See Note 12, Debt As a result of the Amendment, the Company’s trade account receivables increased by $60 million and the Company’s long-term debt increased by $60 million. This non-cash transaction did not impact the Company’s Consolidated Condensed Statement of Cash Flows during the nine-months ended September 30, 2018. In October 2018, the Company amended this program. See Note 16, Subsequent Event |
Debt
Debt | 9 Months Ended |
Sep. 30, 2018 | |
Debt [Abstract] | |
Debt | 12. Debt In July 2018, the Company borrowed 50 million British Pounds and 45 million Euros under its revolving credit facility. The interest rate is the one-month LIBOR plus 1.30%. The proceeds were used to repay U.S. dollar denominated borrowings under the Company’s revolving credit facility. This new foreign currency denominated debt serves as a partial hedge of the Company’s net asset positions in British Pounds and Euros. See Note 8, Derivatives and Hedging Activity In June 2018, the Company amended its accounts receivable securitization program with Wells Fargo. Under the amended program, Wells Fargo has extended a secured loan (the “Secured Loan”) of up to $60 million to the Company secured by Wells Fargo’s undivided interests in certain of the Company’s trade accounts receivables. The interest rate on the Secured Loan is LIBOR plus 0.75%. The Company has the intent and ability either to repay the Secured Loan with available funds from the Company’s existing long-term revolving credit facility, or to extend its accounts receivable program with Wells Fargo when it matures. Accordingly, the Secured Loan has been classified as long-term debt on the Company’s Consolidated Condensed Balance Sheet. As of September 30, 2018, the Company had fully drawn the $60 million available under the securitization program. See Note 16, Subsequent Event In connection with the amendment to the accounts receivable securitization program, the Company entered into conforming amendments to its revolving credit facility and outstanding note purchase agreements. |
Restructuring
Restructuring | 9 Months Ended |
Sep. 30, 2018 | |
Restructuring [Abstract] | |
Restructuring | 13. Restructuring Between March 2014 and 2017, the Company executed a restructuring plan to eliminate underperforming operations, consolidate manufacturing facilities, and improve efficiencies within the Company. The Company recorded $6.0 million and $33.6 million of restructuring costs in Corporate & Other for the three and nine months ended September 30, 2017, respectively. There were no restructuring costs incurred in the three or nine months ended September 30, 2018. |
Divestiture
Divestiture | 9 Months Ended |
Sep. 30, 2018 | |
Divestiture [Abstract] | |
Divestiture | 14. Divestiture In the first quarter of 2017, the Company completed the sale of a facility and certain business lines in Strasbourg, France, for $12.5 million. The Company recognized a non-cash loss of approximately $11.6 million in Corporate & Other during the nine months ended September 30, 2017. There were no divestiture costs incurred in the three months ended September 30, 2017. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | 15. Commitments and Contingencies People of the State of Illinois v. Sensient Flavors LLC On June 7, 2018, the Attorney General of the State of Illinois Office, on her own motion and at the request of the Illinois Environmental Protection Agency, filed a Complaint in the Lee County Circuit Court against Sensient Flavors LLC (“Sensient Flavors”). The Complaint alleges that Sensient Flavors’ Amboy, Illinois facility improperly discharged wastewater to the City of Amboy’s wastewater treatment plant in late 2015 and early 2016, causing the City to violate its discharge permit. The Complaint alleges two counts against Sensient Flavors for violations of Illinois state law; the first for causing water pollution alleged to have come from the City of Amboy wastewater treatment plant; and the second for the introduction of contaminants into a sewage works (i.e., the City of Amboy’s wastewater treatment plant). The Complaint seeks to enjoin Sensient Flavors from further violations, to assess civil penalties for each violation, and to order payment of all costs, including attorney, expert witness, and consultant fees. The Company believes the facility’s discharges in question were done with the consent of the City of Amboy and in compliance with Illinois state law, and that Sensient Flavors complied with its wastewater permit, City of Amboy ordinances, and applicable Illinois state laws. The Company notes that at all times relevant to the Complaint, the City of Amboy accepted Sensient Flavors’ wastewater and, in fact, charged Sensient Flavors for treating Sensient Flavors’ wastewater. While the parties have been engaged in settlement discussion since March 2018, and the Company continues to be hopeful that it will be able to resolve this matter, the Company will also continue to vigorously defend itself. The Company does not believe that the civil penalties and costs, or the settlement costs in lieu thereof, will be material to the Company’s consolidated financial statements. 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. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | 16. Subsequent Events On October 1, 2018, the Company amended its existing accounts receivable securitization program to increase the commitment size from $60 million to $70 million and extended the expiration date of the program until October 2019. On November 1, 2018, the Company issued new fixed-rate notes consisting of 7-year, £25 million notes at a fixed rate of 2.76%; 5-year, £25 million notes at a fixed rate of 2.53%; and 7-year, $25 million notes at a fixed rate of 4.19%. Proceeds were used to refinance existing debt. |
Accounting Policies (Policies)
Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Revenue Recognition | Revenue Recognition The Company recognizes revenue as the transfer of control of its products to the Company’s customers in an amount reflecting the consideration to which the Company expects to be entitled. In order to achieve this core principle, the Company applies the following five-step approach: · Identification of the contract, or contracts, with a customer · Identification of the performance obligations in the contract · Determination of the transaction price · Allocation of the transaction price to the performance obligations in the contract · Recognition of revenue when, or as, we satisfy the performance obligations The Company considers customer purchase orders, which in some cases are governed by master sales agreements, to be the contracts with the customer. For each contract, the Company considers the identified performance obligation to be the promise to transfer products. In determining the transaction price, the Company evaluates whether the price is subject to refund or adjustment and then determines the net consideration to which the Company expects to be entitled. In addition, the Company assesses the customer’s ability to pay as part of its evaluation of the contract. As the Company’s standard payment terms are less than one year, the Company elected the practical expedient under Accounting Standards Codification (ASC) 606-10-32-18, and determined that its contracts do not have a significant financing component. The Company allocates the transaction price to each distinct product based on the relative standalone selling price. Revenue is recognized when control of the product is transferred to the customer, the customer is obligated to pay the Company, and the Company has no remaining obligations, which is typically at shipment. In certain locations, primarily outside the United States, product shipping terms may vary. Thus, in such locations, the point at which control of the product transfers to the customer and revenue recognition occurs will vary accordingly. Customer returns of non-conforming products are estimated at the time revenue is recognized. In certain customer relationships, volume rebates exist, which are recognized according to the terms and conditions of the contractual relationship. Customer returns, rebates, and discounts are not material to the Company’s consolidated financial statements. The Company has elected to recognize the revenue and cost for freight and shipping when control over the products has transferred to the customer. The Company has elected to immediately expense contract costs related to obtaining a contract as the amortization period of the asset the Company otherwise would have recognized would have been less than a year. The Company disaggregates its revenue from customers by certain product lines and geographic locations for the Flavors & Fragrances and Color segments. Revenue for the Asia Pacific segment is managed on a geographic basis. For more information on the Company’s disaggregated revenue, see Note 4, Segment Information |
New Pronouncements | New Pronouncements In May 2014, the Financial Accounting Standards Board (FASB) issued ASU No. 2014-09, Revenue from Contracts with Customers Segment Information Segment Information Management’s Discussion and Analysis of Financial Condition and Results of Operations. In February 2016, the FASB issued ASU No. 2016-02, Leases In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments . In December 2016, the FASB issued ASU 2016-16, Accounting for Income Taxes: Intra-Entity Asset Transfers of Assets Other than Inventory Earnings reinvested in the business Deferred Tax Assets Prepaid Expense and Other Current Assets Deferred Tax Liabilities In March 2017, the FASB issued ASU No. 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost Interest Expense Selling and Administrative Expenses In August 2017, the FASB issued ASU No. 2017-12, Targeted Improvements to Accounting for Hedging Activities - In February 2018, the FASB issued ASU 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income Please refer to the notes in the Company’s annual consolidated financial statements for the year ended December 31, 2017, for additional details of the Company’s financial condition and a description of the Company’s accounting policies, which have been continued without change, except as discussed above. |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
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 September 30, 2018: Revenue from external customers $ 179,103 $ 132,187 $ 31,275 $ 169 $ 342,734 Intersegment revenue 5,294 2,774 - - 8,068 Total revenue $ 184,397 $ 134,961 $ 31,275 $ 169 $ 350,802 Operating income (loss) $ 24,814 $ 27,269 $ 5,750 $ (7,569 ) $ 50,264 Interest expense - - - 5,407 5,407 Earnings (loss) before income taxes $ 24,814 $ 27,269 $ 5,750 $ (12,976 ) $ 44,857 Three months ended September 30, 2017: Revenue from external customers $ 191,063 $ 129,899 $ 32,557 $ - $ 353,519 Intersegment revenue 4,929 3,324 151 - 8,404 Total revenue $ 195,992 1 $ 133,223 $ 32,708 $ - $ 361,923 Operating income (loss) $ 33,006 $ 28,624 $ 5,780 $ (15,400 ) $ 52,010 Interest expense - - - 4,946 4,946 Earnings (loss) before income taxes $ 33,006 $ 28,624 $ 5,780 $ (20,346 ) $ 47,064 (In thousands) Flavors & Fragrances Color Asia Pacific Corporate & Other Consolidated Nine months ended September 30, 2018: Revenue from external customers $ 553,403 $ 416,617 $ 92,063 $ 169 $ 1,062,252 Intersegment revenue 17,998 9,795 - - 27,793 Total revenue $ 571,401 $ 426,412 $ 92,063 $ 169 $ 1,090,045 Operating income (loss) $ 74,142 $ 92,074 $ 15,256 $ (23,346 ) $ 158,126 Interest expense - - - 16,517 16,517 Earnings (loss) before income taxes $ 74,142 $ 92,074 $ 15,256 $ (39,863 ) $ 141,609 Nine months ended September 30, 2017: Revenue from external customers $ 552,874 $ 389,992 $ 90,525 $ - $ 1,033,391 Intersegment revenue 15,549 10,191 764 - 26,504 Total revenue $ 568,423 $ 400,183 $ 91,289 $ - $ 1,059,895 Operating income (loss) $ 90,278 $ 87,913 $ 14,750 $ (72,514 ) $ 120,427 Interest expense - - - 14,474 14,474 Earnings (loss) before income taxes $ 90,278 $ 87,913 $ 14,750 $ (86,988 ) $ 105,953 |
Product Information | Product Lines (In thousands) Flavors & Color Asia Pacific Corporate & Other Consolidated Three months ended September 30, 2018: Flavors $ 98,060 $ - $ - $ - $ 98,060 Natural Ingredients 58,140 - - - 58,140 Fragrances 28,197 - - - 28,197 Food & Beverage Colors - 76,524 - - 76,524 Cosmetics - 35,466 - - 35,466 Other Colors - 22,971 - - 22,971 Asia Pacific - - 31,275 - 31,275 Corporate & Other - - - 169 169 Intersegment Revenue (5,294 ) (2,774 ) - - (8,068 ) Total revenue from external customers $ 179,103 $ 132,187 $ 31,275 $ 169 $ 342,734 Three months ended September 30, 2017: Flavors $ 113,215 $ - $ - $ - $ 113,215 Natural Ingredients 59,851 - - - 59,851 Fragrances 22,926 - - - 22,926 Food & Beverage Colors - 70,858 - - 70,858 Cosmetics - 38,729 - - 38,729 Other Colors - 23,636 - - 23,636 Asia Pacific - - 32,708 - 32,708 Intersegment Revenue (4,929 ) (3,324 ) (151 ) - (8,404 ) Total revenue from external customers $ 191,063 $ 129,899 $ 32,557 $ - $ 353,519 Product Lines (In thousands) Flavors & Fragrances Color Asia Pacific Corporate & Other Consolidated Nine months ended September 30, 2018: Flavors $ 322,333 $ - $ - $ - $ 322,333 Natural Ingredients 167,538 - - - 167,538 Fragrances 81,530 - - - 81,530 Food & Beverage Colors - 230,807 - - 230,807 Cosmetics - 121,697 - - 121,697 Other Colors - 73,908 - - 73,908 Asia Pacific - - 92,063 - 92,063 Corporate & Other - - - 169 169 Intersegment Revenue (17,998 ) (9,795 ) - - (27,793 ) Total revenue from external customers $ 553,403 $ 416,617 $ 92,063 $ 169 $ 1,062,252 Nine months ended September 30, 2017: Flavors $ 342,367 $ - $ - $ - $ 342,367 Natural Ingredients 162,371 - - - 162,371 Fragrances 63,685 - - - 63,685 Food & Beverage Colors - 212,741 - - 212,741 Cosmetics - 113,077 - - 113,077 Other Colors - 74,365 - - 74,365 Asia Pacific - - 91,289 - 91,289 Intersegment Revenue (15,549 ) (10,191 ) (764 ) - (26,504 ) Total revenue from external customers $ 552,874 $ 389,992 $ 90,525 $ - $ 1,033,391 |
Geographical Information | Geographic Markets (In thousands) Flavors & Fragrances Color Asia Pacific Corporate & Other Consolidated Three months ended September 30, 2018: North America $ 118,690 $ 63,850 $ - $ 95 $ 182,635 Europe 42,866 34,854 81 74 77,875 Asia Pacific 7,053 15,910 31,032 - 53,995 Other 10,494 17,573 162 - 28,229 Total revenue from external customers $ 179,103 $ 132,187 $ 31,275 $ 169 $ 342,734 Three months ended September 30, 2017: North America $ 131,632 $ 59,579 $ - $ - $ 191,211 Europe 40,891 38,686 178 - 79,755 Asia Pacific 7,042 13,357 31,937 - 52,336 Other 11,498 18,277 442 - 30,217 Total revenue from external customers $ 191,063 $ 129,899 $ 32,557 $ - $ 353,519 Geographic Markets (In thousands) Flavors & Fragrances Color Asia Pacific Corporate & Other Consolidated Nine months ended September 30, 2018: North America $ 364,941 $ 191,170 $ - $ 95 $ 556,206 Europe 133,257 119,612 111 74 253,054 Asia Pacific 23,144 50,461 91,327 - 164,932 Other 32,061 55,374 625 - 88,060 Total revenue from external customers $ 553,403 $ 416,617 $ 92,063 $ 169 $ 1,062,252 Nine months ended September 30, 2017: North America $ 375,481 $ 180,616 $ - $ - $ 556,097 Europe 125,812 112,796 303 - 238,911 Asia Pacific 20,164 43,158 89,229 - 152,551 Other 31,417 53,422 993 - 85,832 Total revenue from external customers $ 552,874 $ 389,992 $ 90,525 $ - $ 1,033,391 |
Retirement Plans (Tables)
Retirement Plans (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Retirement Plans [Abstract] | |
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 September 30, Nine Months Ended September 30, (In thousands) 2018 2017 2018 2017 Service cost $ 366 $ 466 $ 1,100 $ 1,392 Interest cost 282 366 857 1,080 Expected return on plan assets (236 ) (264 ) (722 ) (778 ) Amortization of actuarial gain (27 ) (19 ) (81 ) (61 ) Settlement expense - - - 3,797 Total defined benefit expense $ 385 $ 549 $ 1,154 $ 5,430 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Accumulated Other Comprehensive Income [Abstract] | |
Changes in OCI | The following table summarizes the changes in OCI during the three and nine month periods ended September 30, 2018: (In thousands) Cash Flow Hedges (a) Pension Items (a) Foreign Currency Items Total Balance as of June 30, 2018 $ (34 ) $ (369 ) $ (161,713 ) $ (162,116 ) Other comprehensive income before reclassifications (121 ) - 931 810 Amounts reclassified from OCI (12 ) (30 ) - (42 ) Balance as of September 30, 2018 $ (167 ) $ (399 ) $ (160,782 ) $ (161,348 ) (In thousands) Cash Flow Hedges (a) Pension Items (a) Foreign Currency Items Total Balance as of December 31, 2017 $ (669 ) $ (309 ) $ (148,356 ) $ (149,334 ) Other comprehensive income before reclassifications 404 - (12,426 ) (12,022 ) Amounts reclassified from OCI 98 (90 ) - 8 Balance as of September 30, 2018 $ (167 ) $ (399 ) $ (160,782 ) $ (161,348 ) (a) Cash Flow Hedges and Pension Items are net of tax. |
Accounting Policies (Details)
Accounting Policies (Details) - USD ($) $ in Thousands | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Mar. 31, 2018 | Dec. 31, 2017 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | ||||
Collected on sold receivables | $ 91,142 | $ 86,229 | ||
Increase to earnings reinvested in the business | 1,497,218 | $ 1,414,485 | ||
Increase to deferred tax assets | 10,868 | 7,885 | ||
(Decrease) to prepaid expense and other current assets | (40,152) | (43,206) | ||
(Decrease) to deferred tax liabilities | (24,638) | $ (18,724) | ||
ASU 2016-02 [Member] | Maximum [Member] | ||||
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | ||||
Recognition of lease assets and liabilities | 22,000 | |||
ASU 2016-02 [Member] | Minimum [Member] | ||||
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | ||||
Recognition of lease assets and liabilities | 17,000 | |||
ASU 2016-15 [Member] | ||||
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | ||||
Collected on sold receivables | $ 91,142 | $ 86,229 | ||
ASU 2016-16 [Member] | ||||
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | ||||
Increase to earnings reinvested in the business | $ 400 | |||
Increase to deferred tax assets | 3,000 | |||
(Decrease) to prepaid expense and other current assets | (3,700) | |||
(Decrease) to deferred tax liabilities | $ (1,100) |
Acquisitions (Details)
Acquisitions (Details) - USD ($) $ in Thousands | Jul. 10, 2018 | Mar. 09, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 |
Acquisition [Abstract] | |||||
Acquisition of new businesses | $ (31,100) | $ 0 | |||
Goodwill | $ 422,953 | $ 408,995 | |||
Globe Natural [Member] | |||||
Acquisition [Abstract] | |||||
Acquisition of new businesses | $ (10,800) | ||||
Net assets acquired | 2,100 | ||||
Goodwill | 6,700 | ||||
Globe Natural [Member] | Customer Relationships [Member] | |||||
Acquisition [Abstract] | |||||
Intangibles assets acquired | $ 2,000 | ||||
Mazza Innovation Limited [Member] | |||||
Acquisition [Abstract] | |||||
Acquisition of new businesses | $ (19,800) | ||||
Goodwill | $ 15,000 |
Fair Value (Details)
Fair Value (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Level 1 [Member] | ||
Investments, Fair Value Disclosure [Abstract] | ||
Investments | $ 100 | $ 100 |
Level 2 [Member] | ||
Investments, Fair Value Disclosure [Abstract] | ||
Forward exchange contracts, liability | 100 | $ 600 |
Level 2 [Member] | Carrying Value [Member] | ||
Investments, Fair Value Disclosure [Abstract] | ||
Long term debt | 746,000 | |
Level 2 [Member] | Fair Value [Member] | ||
Investments, Fair Value Disclosure [Abstract] | ||
Long term debt | $ 754,300 |
Segment Information, Operating
Segment Information, Operating Results by Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Revenue [Abstract] | ||||
Revenue | $ 342,734 | $ 353,519 | $ 1,062,252 | $ 1,033,391 |
Operating income (loss) | 50,264 | 52,010 | 158,126 | 120,427 |
Interest expense | 5,407 | 4,946 | 16,517 | 14,474 |
Earnings before income taxes | 44,857 | 47,064 | 141,609 | 105,953 |
Flavors & Fragrances [Member] | ||||
Revenue [Abstract] | ||||
Revenue | 179,103 | 191,063 | 553,403 | 552,874 |
Operating income (loss) | 24,814 | 33,006 | 74,142 | 90,278 |
Interest expense | 0 | 0 | 0 | 0 |
Earnings before income taxes | 24,814 | 33,006 | 74,142 | 90,278 |
Color [Member] | ||||
Revenue [Abstract] | ||||
Revenue | 132,187 | 129,899 | 416,617 | 389,992 |
Operating income (loss) | 27,269 | 28,624 | 92,074 | 87,913 |
Interest expense | 0 | 0 | 0 | 0 |
Earnings before income taxes | 27,269 | 28,624 | 92,074 | 87,913 |
Asia Pacific [Member] | ||||
Revenue [Abstract] | ||||
Revenue | 31,275 | 32,557 | 92,063 | 90,525 |
Operating income (loss) | 5,750 | 5,780 | 15,256 | 14,750 |
Interest expense | 0 | 0 | 0 | 0 |
Earnings before income taxes | 5,750 | 5,780 | 15,256 | 14,750 |
Reportable Segments [Member] | ||||
Revenue [Abstract] | ||||
Revenue | 350,802 | 361,923 | 1,090,045 | 1,059,895 |
Reportable Segments [Member] | Flavors & Fragrances [Member] | ||||
Revenue [Abstract] | ||||
Revenue | 184,397 | 195,992 | 571,401 | 568,423 |
Reportable Segments [Member] | Color [Member] | ||||
Revenue [Abstract] | ||||
Revenue | 134,961 | 133,223 | 426,412 | 400,183 |
Reportable Segments [Member] | Asia Pacific [Member] | ||||
Revenue [Abstract] | ||||
Revenue | 31,275 | 32,708 | 92,063 | 91,289 |
Intersegment Revenue [Member] | ||||
Revenue [Abstract] | ||||
Revenue | (8,068) | (8,404) | (27,793) | (26,504) |
Intersegment Revenue [Member] | Flavors & Fragrances [Member] | ||||
Revenue [Abstract] | ||||
Revenue | (5,294) | (4,929) | (17,998) | (15,549) |
Intersegment Revenue [Member] | Color [Member] | ||||
Revenue [Abstract] | ||||
Revenue | (2,774) | (3,324) | (9,795) | (10,191) |
Intersegment Revenue [Member] | Asia Pacific [Member] | ||||
Revenue [Abstract] | ||||
Revenue | 0 | (151) | 0 | (764) |
Corporate & Other [Member] | ||||
Revenue [Abstract] | ||||
Revenue | 169 | 0 | 169 | 0 |
Operating income (loss) | (7,569) | (15,400) | (23,346) | (72,514) |
Interest expense | 5,407 | 4,946 | 16,517 | 14,474 |
Earnings before income taxes | $ (12,976) | $ (20,346) | $ (39,863) | $ (86,988) |
Segment Information, Revenue fr
Segment Information, Revenue from External Customers by Product Line (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Revenue [Abstract] | ||||
Revenue | $ 342,734 | $ 353,519 | $ 1,062,252 | $ 1,033,391 |
Flavors & Fragrances [Member] | ||||
Revenue [Abstract] | ||||
Revenue | 179,103 | 191,063 | 553,403 | 552,874 |
Flavors [Member] | ||||
Revenue [Abstract] | ||||
Revenue | 98,060 | 113,215 | 322,333 | 342,367 |
Natural Ingredients [Member] | ||||
Revenue [Abstract] | ||||
Revenue | 58,140 | 59,851 | 167,538 | 162,371 |
Fragrances [Member] | ||||
Revenue [Abstract] | ||||
Revenue | 28,197 | 22,926 | 81,530 | 63,685 |
Color [Member] | ||||
Revenue [Abstract] | ||||
Revenue | 132,187 | 129,899 | 416,617 | 389,992 |
Food & Beverage Colors [Member] | ||||
Revenue [Abstract] | ||||
Revenue | 76,524 | 70,858 | 230,807 | 212,741 |
Cosmetics [Member] | ||||
Revenue [Abstract] | ||||
Revenue | 35,466 | 38,729 | 121,697 | 113,077 |
Other Colors [Member] | ||||
Revenue [Abstract] | ||||
Revenue | 22,971 | 23,636 | 73,908 | 74,365 |
Asia Pacific [Member] | ||||
Revenue [Abstract] | ||||
Revenue | 31,275 | 32,557 | 92,063 | 90,525 |
Intersegment Revenue [Member] | ||||
Revenue [Abstract] | ||||
Revenue | (8,068) | (8,404) | (27,793) | (26,504) |
Intersegment Revenue [Member] | Flavors & Fragrances [Member] | ||||
Revenue [Abstract] | ||||
Revenue | (5,294) | (4,929) | (17,998) | (15,549) |
Intersegment Revenue [Member] | Color [Member] | ||||
Revenue [Abstract] | ||||
Revenue | (2,774) | (3,324) | (9,795) | (10,191) |
Intersegment Revenue [Member] | Asia Pacific [Member] | ||||
Revenue [Abstract] | ||||
Revenue | 0 | (151) | 0 | (764) |
Corporate & Other [Member] | ||||
Revenue [Abstract] | ||||
Revenue | $ 169 | $ 0 | $ 169 | $ 0 |
Segment Information, Revenue _2
Segment Information, Revenue from External Customers by Geographic Markets (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Revenue [Abstract] | ||||
Revenue | $ 342,734 | $ 353,519 | $ 1,062,252 | $ 1,033,391 |
North America [Member] | ||||
Revenue [Abstract] | ||||
Revenue | 182,635 | 191,211 | 556,206 | 556,097 |
Europe [Member] | ||||
Revenue [Abstract] | ||||
Revenue | 77,875 | 79,755 | 253,054 | 238,911 |
Asia Pacific [Member] | ||||
Revenue [Abstract] | ||||
Revenue | 53,995 | 52,336 | 164,932 | 152,551 |
Other [Member] | ||||
Revenue [Abstract] | ||||
Revenue | 28,229 | 30,217 | 88,060 | 85,832 |
Flavors & Fragrances [Member] | ||||
Revenue [Abstract] | ||||
Revenue | 179,103 | 191,063 | 553,403 | 552,874 |
Color [Member] | ||||
Revenue [Abstract] | ||||
Revenue | 132,187 | 129,899 | 416,617 | 389,992 |
Asia Pacific [Member] | ||||
Revenue [Abstract] | ||||
Revenue | 31,275 | 32,557 | 92,063 | 90,525 |
Asia Pacific [Member] | Asia Pacific [Member] | ||||
Revenue [Abstract] | ||||
Revenue | 31,275 | 32,557 | 92,063 | 90,525 |
Reportable Geographical Components [Member] | Flavors & Fragrances [Member] | North America [Member] | ||||
Revenue [Abstract] | ||||
Revenue | 118,690 | 131,632 | 364,941 | 375,481 |
Reportable Geographical Components [Member] | Flavors & Fragrances [Member] | Europe [Member] | ||||
Revenue [Abstract] | ||||
Revenue | 42,866 | 40,891 | 133,257 | 125,812 |
Reportable Geographical Components [Member] | Flavors & Fragrances [Member] | Asia Pacific [Member] | ||||
Revenue [Abstract] | ||||
Revenue | 7,053 | 7,042 | 23,144 | 20,164 |
Reportable Geographical Components [Member] | Flavors & Fragrances [Member] | Other [Member] | ||||
Revenue [Abstract] | ||||
Revenue | 10,494 | 11,498 | 32,061 | 31,417 |
Reportable Geographical Components [Member] | Color [Member] | North America [Member] | ||||
Revenue [Abstract] | ||||
Revenue | 63,850 | 59,579 | 191,170 | 180,616 |
Reportable Geographical Components [Member] | Color [Member] | Europe [Member] | ||||
Revenue [Abstract] | ||||
Revenue | 34,854 | 38,686 | 119,612 | 112,796 |
Reportable Geographical Components [Member] | Color [Member] | Asia Pacific [Member] | ||||
Revenue [Abstract] | ||||
Revenue | 15,910 | 13,357 | 50,461 | 43,158 |
Reportable Geographical Components [Member] | Color [Member] | Other [Member] | ||||
Revenue [Abstract] | ||||
Revenue | 17,573 | 18,277 | 55,374 | 53,422 |
Reportable Geographical Components [Member] | Asia Pacific [Member] | North America [Member] | ||||
Revenue [Abstract] | ||||
Revenue | 0 | 0 | 0 | 0 |
Reportable Geographical Components [Member] | Asia Pacific [Member] | Europe [Member] | ||||
Revenue [Abstract] | ||||
Revenue | 81 | 178 | 111 | 303 |
Reportable Geographical Components [Member] | Asia Pacific [Member] | Asia Pacific [Member] | ||||
Revenue [Abstract] | ||||
Revenue | 31,032 | 31,937 | 91,327 | 89,229 |
Reportable Geographical Components [Member] | Asia Pacific [Member] | Other [Member] | ||||
Revenue [Abstract] | ||||
Revenue | 162 | 442 | 625 | 993 |
Corporate & Other [Member] | ||||
Revenue [Abstract] | ||||
Revenue | 169 | 0 | 169 | 0 |
Corporate & Other [Member] | North America [Member] | ||||
Revenue [Abstract] | ||||
Revenue | 95 | 0 | 95 | 0 |
Corporate & Other [Member] | Europe [Member] | ||||
Revenue [Abstract] | ||||
Revenue | 74 | 0 | 74 | 0 |
Corporate & Other [Member] | Asia Pacific [Member] | ||||
Revenue [Abstract] | ||||
Revenue | 0 | 0 | 0 | 0 |
Corporate & Other [Member] | Other [Member] | ||||
Revenue [Abstract] | ||||
Revenue | $ 0 | $ 0 | $ 0 | $ 0 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Inventories [Abstract] | ||
Inventories, including finished and in-process products | $ 324,700 | $ 310,400 |
Raw materials and supplies | $ 160,100 | $ 153,100 |
Retirement Plans (Details)
Retirement Plans (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Jun. 30, 2017USD ($) | Sep. 30, 2018USD ($)Facility | Sep. 30, 2017USD ($) | |
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract] | |||||
Number of facilities associated with the defined benefit plan closed under the restructuring plan | Facility | 2 | ||||
Defined Benefit Plan [Member] | |||||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract] | |||||
Service cost | $ 366 | $ 466 | $ 1,100 | $ 1,392 | |
Interest cost | 282 | 366 | 857 | 1,080 | |
Expected return on plan assets | (236) | (264) | (722) | (778) | |
Amortization of actuarial gain | (27) | (19) | (81) | (61) | |
Settlement expense | 0 | 0 | $ 3,800 | 0 | 3,797 |
Total defined benefit expense | $ 385 | $ 549 | $ 1,154 | $ 5,430 |
Shareholders' Equity (Details)
Shareholders' Equity (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Shareholders' Equity [Abstract] | ||||
Common stock repurchased during the period (in shares) | 60,000 | 505,085 | 1,060,000 | 839,734 |
Common stock repurchased during the period, value | $ 4 | $ 37.7 | $ 76.7 | $ 64.5 |
Derivative Instruments and He_2
Derivative Instruments and Hedging Activity (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Maximum [Member] | ||||
Derivative instruments and hedging activity for the period [Abstract] | ||||
Number of months for contracts to mature | 18 months | |||
Forward Exchange Contracts [Member] | ||||
Derivative instruments and hedging activity for the period [Abstract] | ||||
Amount of gain (loss) reclassified into net earnings | $ (100) | $ 200 | ||
Forward Exchange Contracts [Member] | Cash Flow Hedges [Member] | ||||
Derivative instruments and hedging activity for the period [Abstract] | ||||
Derivative, fair value | $ 79,900 | 79,900 | $ 44,900 | |
Foreign Currency Denominated Debt, Net Investment Hedging [Member] | ||||
Derivative instruments and hedging activity for the period [Abstract] | ||||
Carrying value of foreign denominated debt | 371,300 | 371,300 | $ 261,900 | |
Impact of foreign exchange rates on debt instruments recorded in Other Comprehensive Income | $ (2,200) | $ (8,900) |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Income Taxes [Abstract] | ||||
Effective income tax rates for continuing operations | (5.20%) | 31.60% | 12.10% | 28.10% |
Change in tax rate | (12.50%) | (3.90%) | ||
Provisional income tax expense | $ (7.1) | |||
Transitional tax for accumulated foreign earnings, Income tax expense | (4.1) | |||
Reassessment of the U.S. deferred tax assets and liabilities | $ (3) |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2018 | ||
Accumulated Other Comprehensive Loss [Roll Forward] | |||
Beginning balance | $ 852,301 | ||
Other comprehensive income before reclassifications | $ 810 | (12,022) | |
Amounts reclassified from OCI | (42) | 8 | |
Ending balance | 846,169 | 846,169 | |
Accumulated Other Comprehensive (Loss) Income [Member] | |||
Accumulated Other Comprehensive Loss [Roll Forward] | |||
Beginning balance | (162,116) | (149,334) | |
Ending balance | (161,348) | (161,348) | |
Cash Flow Hedges [Member] | |||
Accumulated Other Comprehensive Loss [Roll Forward] | |||
Beginning balance | [1] | (34) | (669) |
Other comprehensive income before reclassifications | [1] | (121) | 404 |
Amounts reclassified from OCI | [1] | (12) | 98 |
Ending balance | [1] | (167) | (167) |
Pension Items [Member] | |||
Accumulated Other Comprehensive Loss [Roll Forward] | |||
Beginning balance | [1] | (369) | (309) |
Other comprehensive income before reclassifications | [1] | 0 | 0 |
Amounts reclassified from OCI | [1] | (30) | (90) |
Ending balance | [1] | (399) | (399) |
Foreign Currency Items [Member] | |||
Accumulated Other Comprehensive Loss [Roll Forward] | |||
Beginning balance | (161,713) | (148,356) | |
Other comprehensive income before reclassifications | 931 | (12,426) | |
Amounts reclassified from OCI | 0 | 0 | |
Ending balance | $ (160,782) | $ (160,782) | |
[1] | Cash Flow Hedges and Pension Items are net of tax. |
Accounts Receivable Securitiz_2
Accounts Receivable Securitization (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2017 | |
Accounts Receivable Securitization [Abstract] | ||
Accounts receivable securitization program commitment amount | $ 60,000 | |
Accounts receivable securitization program | $ 96,400 | |
Fair value of the deferred purchase price receivable | $ 36,400 | |
Maximum borrowing capacity, secured loan | 60,000 | |
Credit facility, borrowings outstanding | 60,000 | |
Increase in trade account receivables | 60,000 | |
Increase in long term debt | $ 60,000 |
Debt (Details)
Debt (Details) € in Millions, £ in Millions, $ in Millions | 9 Months Ended | ||
Sep. 30, 2018USD ($) | Jul. 31, 2018GBP (£) | Jul. 31, 2018EUR (€) | |
Debt Instruments [Abstract] | |||
Maximum borrowing capacity, secured loan | $ 60 | ||
Credit facility, borrowings outstanding | $ 60 | ||
LIBOR [Member] | |||
Debt Instruments [Abstract] | |||
Debt instrument, term of variable rate | 1 month | ||
Basis spread on variable rate | 0.75% | ||
Revolving Credit Facility [Member] | |||
Debt Instruments [Abstract] | |||
Amount borrowed | £ 50 | € 45 | |
Revolving Credit Facility [Member] | LIBOR [Member] | |||
Debt Instruments [Abstract] | |||
Basis spread on variable rate | 1.30% |
Restructuring (Details)
Restructuring (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Restructuring Costs [Abstract] | ||||
Total restructuring | $ 0 | $ 0 | ||
Corporate & Other [Member] | ||||
Restructuring Costs [Abstract] | ||||
Total restructuring | $ 6,000 | $ 33,600 |
Divestiture (Details)
Divestiture (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Mar. 31, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Divestiture Transactions [Abstract] | ||||
Proceeds from the sale of facility and related business lines | $ 12,500 | $ 0 | $ 12,457 | |
Divestiture cost | $ 0 | |||
Corporate & Other [Member] | ||||
Divestiture Transactions [Abstract] | ||||
Non-cash loss on assets held for sale | $ 11,600 |
Subsequent Events (Details)
Subsequent Events (Details) £ in Millions, $ in Millions | Nov. 01, 2018USD ($) | Nov. 01, 2018GBP (£) | Oct. 01, 2018USD ($) | Sep. 30, 2018USD ($) |
Accounts Receivable Securitization [Abstract] | ||||
Accounts receivable securitization program commitment amount | $ 60 | |||
Subsequent Event [Member] | ||||
Accounts Receivable Securitization [Abstract] | ||||
Accounts receivable securitization program commitment amount | $ 70 | |||
Subsequent Event [Member] | 2.76% Fixed Notes [Member] | ||||
Debt Instruments [Abstract] | ||||
Debt instrument term | 7 years | |||
Debt instrument amount | £ | £ 25 | |||
Interest rate, stated percentage | 2.76% | 2.76% | ||
Subsequent Event [Member] | 2.53% Fixed Notes [Member] | ||||
Debt Instruments [Abstract] | ||||
Debt instrument term | 5 years | |||
Debt instrument amount | £ | £ 25 | |||
Interest rate, stated percentage | 2.53% | 2.53% | ||
Subsequent Event [Member] | 4.19% Fixed Notes [Member] | ||||
Debt Instruments [Abstract] | ||||
Debt instrument term | 7 years | |||
Debt instrument amount | $ 25 | |||
Interest rate, stated percentage | 4.19% | 4.19% |