10-Q 1 c58437e10-q.txt FORM 10-Q 1 ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-Q (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended: September 30, 2000 ------------------ OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 1-7626 ------ UNIVERSAL FOODS CORPORATION (d/b/a SENSIENT TECHNOLOGIES CORPORATION) --------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Wisconsin 39-0561070 ------------------------------- ------------------------------- (State or other jurisdiction of (I.R.S. Employer Identification incorporation or organization) Number) 777 East Wisconsin Avenue, Milwaukee, Wisconsin 53202-5304 ---------------------------------------------------------- (Address of principal executive offices) Registrant's telephone number, including area code: (414) 271-6755 -------------- September 30, -------------------------------------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report.) Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for at least the past 90 days. Yes X No --- Indicate the number of shares outstanding of each of the issuer's classes of Common Stock as of the latest practicable date. Class Outstanding at October 31, 2000 --------------------------------------- ------------------------------- Common Stock, par value $0.10 per share 48,152,486 shares ================================================================================ 2 CONFORMED ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-Q (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended: September 30, 2000 ------------------ OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 1-7626 ------ UNIVERSAL FOODS CORPORATION (d/b/a SENSIENT TECHNOLOGIES CORPORATION) --------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Wisconsin 39-0561070 ------------------------------- ------------------------------- (State or other jurisdiction of (I.R.S. Employer Identification incorporation or organization) Number) 777 East Wisconsin Avenue, Milwaukee, Wisconsin 53202-5304 ---------------------------------------------------------- (Address of principal executive offices) Registrant's telephone number, including area code: (414) 271-6755 -------------- September 30, -------------------------------------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report.) Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for at least the past 90 days. Yes X No --- Indicate the number of shares outstanding of each of the issuer's classes of Common Stock as of the latest practicable date. Class Outstanding at October 31, 2000 ---------------------------------------- ------------------------------- Common Stock, par value $0.10 per share 48,152,486 shares ================================================================================ 3 UNIVERSAL FOODS CORPORATION (d/b/a SENSIENT TECHNOLOGIES CORPORATION) INDEX
Page No. -------- PART I. FINANCIAL INFORMATION: Item 1. Financial Statements: Consolidated Condensed Balance Sheets - September 30, 2000 and December 31, 1999. 1 Consolidated Condensed Statements of Earnings - Three and Nine Months Ended September 30, 2000 and 1999. 2 Consolidated Condensed Statements of Cash Flows - Nine Months Ended September 30, 2000 and 1999. 3 Notes to Consolidated Condensed Financial Statements. 4 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. 7 Item 3. Quantitative and Qualitative Disclosures About Market Risk. 9 PART II. OTHER INFORMATION: Item 4. Submission of Matters to a Vote of Security Holders. 10 Item 6. Exhibits and Reports on Form 8-K. 10 Signatures. 11 Exhibit Index. 13
4 PART I FINANCIAL INFORMATION 5 UNIVERSAL FOODS CORPORATION (d/b/a SENSIENT TECHNOLOGIES CORPORATION) CONSOLIDATED CONDENSED BALANCE SHEETS (In thousands) (Unaudited)
September 30, December 31, ASSETS 2000 1999 ------ --------------- ---------------- CURRENT ASSETS: Cash and cash equivalents $ 5,911 $ 114 Trade accounts receivable 125,027 139,120 Inventories 220,995 229,203 Prepaid expenses and other current assets 38,319 37,236 Net assets held for sale 79,080 - ------------ ----------- TOTAL CURRENT ASSETS 469,332 405,673 INVESTMENTS AND OTHER ASSETS 63,449 70,571 INTANGIBLES 295,192 271,065 PROPERTY, PLANT AND EQUIPMENT: Cost: Land and buildings 154,994 173,537 Machinery and equipment 379,795 508,127 ------------ ----------- 534,789 681,664 Less accumulated depreciation 229,946 297,260 ------------ ----------- 304,843 384,404 ------------ ----------- TOTAL ASSETS $ 1,132,816 $ 1,131,713 ============ =========== LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Short-term borrowings $ 171,886 $ 77,995 Accounts payable and accrued expenses 99,799 111,536 Salaries, wages and withholdings from employees 11,004 14,321 Income taxes 30,735 24,368 Current maturities of long-term debt 9,487 9,495 ----------- ----------- TOTAL CURRENT LIABILITIES 322,911 237,715 DEFERRED INCOME TAXES 26,275 27,513 OTHER DEFERRED LIABILITIES 19,549 20,670 ACCRUED EMPLOYEE AND RETIREE BENEFITS 26,955 34,565 LONG-TERM DEBT 328,125 380,378 SHAREHOLDERS' EQUITY: Common stock 5,396 5,396 Additional paid-in capital 72,434 74,279 Earnings reinvested in the business 519,041 482,080 ----------- ----------- 596,871 561,755 Less: Treasury stock, at cost 113,267 81,046 Accumulated other comprehensive income 73,128 47,966 Other 1,475 1,871 ----------- ----------- TOTAL SHAREHOLDERS' EQUITY 409,001 430,872 ----------- ----------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 1,132,816 $ 1,131,713 =========== ===========
See accompanying notes to consolidated condensed financial statements. -1- 6 UNIVERSAL FOODS CORPORATION (d/b/a SENSIENT TECHNOLOGIES CORPORATION) CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS (In thousands except per share amounts) (Unaudited)
Three Months Nine Months Ended September 30 Ended September 30 ------------------ ------------------ 2000 1999 2000 1999 ---- ---- ---- ---- Revenue $ 206,991 $ 210,156 $ 616,303 $ 597,556 Cost of products sold 133,953 136,563 398,458 394,228 Selling and administrative expenses 40,248 37,958 118,238 106,970 ---------- ---------- ---------- --------- Operating income 32,790 35,635 99,607 96,358 Interest expense 8,579 6,868 25,181 20,276 ---------- ---------- ---------- --------- Earnings before income taxes 24,211 28,767 74,426 76,082 Income taxes 6,755 8,453 19,848 23,695 ---------- ---------- ---------- --------- Earnings from continuing operations 17,456 20,314 54,578 52,387 Earnings from discontinued operations 929 3,192 2,006 10,877 ---------- ---------- ---------- --------- Net earnings $ 18,385 $ 23,506 $ 56,584 $ 63,264 ========== ========== ========== ========= Average number of common shares outstanding: Basic 48,481 50,219 49,138 50,360 ====== ====== ====== ====== Diluted 48,796 50,722 49,384 50,901 ====== ====== ====== ====== Earnings per common share: Continuing operations: Basic $ .36 $ .40 $ 1.11 $ 1.04 ====== ====== ======= ======= Diluted $ .36 $ .40 $ 1.11 $ 1.03 ====== ====== ======= ======= Net earnings: Basic $ .38 $ .47 $ 1.15 $ 1.26 ====== ====== ======= ======= Diluted $ .38 $ .46 $ 1.15 $ 1.24 ====== ====== ======= ======= Dividends per common share $ .1325 $ .1325 $ .3975 $ .3975 ======= ======= ======= =======
See accompanying notes to Consolidated Condensed Financial Statements. -2- 7 UNIVERSAL FOODS CORPORATION (d/b/a SENSIENT TECHNOLOGIES CORPORATION) CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited)
Nine Months Ended September 30 ------------------------------ 2000 1999 ---- ---- Net cash provided by operating activities of continuing operations $ 62,264 $ 73,172 Net cash provided by discontinued operations 16,465 15,076 --------- --------- Net cash provided by operating activities 78,729 88,248 --------- --------- Cash flows from investing activities: Acquisition of property, plant and equipment (40,808) (51,312) Acquisition of new businesses (net of cash acquired) (44,206) (58,361) Other items, net 11,442 (501) --------- --------- Net cash used in investing activities (73,572) (110,174) --------- --------- Cash flows from financing activities: Proceeds from additional borrowings 115,811 228,898 Reduction in debt (60,020) (166,117) Purchase of treasury stock (44,995) (17,930) Dividends (19,625) (20,065) Proceeds from options exercised and other 9,226 1,489 --------- --------- Net cash provided by financing activities 397 26,275 --------- --------- Effect of exchange rate changes on cash and cash equivalents 243 (112) --------- --------- Net increase in cash and cash equivalents 5,797 4,237 Cash and cash equivalents at beginning of period 114 408 --------- --------- Cash and cash equivalents at end of period $ 5,911 $ 4,645 ========= ========= Supplemental disclosure of cash flow information: Cash paid during the period for: Interest $ 22,593 $ 13,895 Income taxes 17,773 23,486 Liabilities assumed in Acquisitions 2,969 34,868
See accompanying notes to consolidated condensed financial statements. -3- 8 UNIVERSAL FOODS CORPORATION (d/b/a SENSIENT TECHNOLOGIES CORPORATION) NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (Unaudited) 1. On November 6, 2000, Universal Foods Corporation (the "Company") began doing business under its new name, Sensient Technologies Corporation. 2. In the opinion of the Company, the accompanying unaudited consolidated condensed financial statements contain all adjustments (consisting of only normal recurring accruals) necessary to present fairly the financial position of the Company as of September 30, 2000 and December 31, 1999 and the results of operations for the three and nine month periods ended September 30, 2000 and 1999 and cash flows for the nine month periods ended September 30, 2000 and 1999. The results of operations for any interim period are not necessarily indicative of the results to be expected for the full fiscal year. 3. Refer to the footnotes in the Company's annual consolidated financial statements for the year ended September 30, 1999, for a description of the accounting policies, which have been continued without change, and additional details of the Company's financial condition. The details in those notes have not changed except for the change in reporting a discontinued operation as discussed in Note 4, or as a result of normal transactions in the interim. 4. Expenses are charged to operations in the year incurred. However, for interim reporting purposes, certain of these expenses are charged to operations based on an estimate rather than as expenses are actually incurred. 5. In June 2000, the Company's Board of Directors approved a plan to dispose of the operations of its Yeast business. Accordingly, the operating results of the Yeast business have been reported separately from continuing operations and reported as a separate line item on the statements of earnings. The Company has also restated its prior statements of earnings to present the earnings of the Yeast division as a discontinued operation. Operating results from discontinued operations are as follows (in thousands):
Three Months Nine Months Ended September 30 Ended September 30 ------------------ ------------------ 2000 1999 2000 1999 ---- ---- ---- ---- Revenue $ 31,301 $ 36,030 $ 89,025 $ 105,100 Earnings before income taxes 1,499 5,147 3,236 17,543 Income taxes 570 1,955 1,230 6,666 --------- --------- --------- ---------- Earnings from discontinued operations $ 929 $ 3,192 $ 2,006 $ 10,877 ========= ========= ========= ========== Earnings per common share: Basic $ .02 $ .07 $ .04 $ .22 ========= ========= ========= ========== Diluted $ .02 $ .06 $ .04 $ .21 ========= ========= ========= ==========
-4- 9 The assets and liabilities of the Yeast business at September 30, 2000 have been reflected as a net current asset and are reported as a separate line item on the consolidated condensed balance sheet. The "Net assets held for sale" are classified as current assets based on the anticipated sale of the yeast business within the next twelve months. The Company anticipates that the sale of the Yeast division will result in a gain. The components of net assets held for sale at September 30, 2000 are as follows (in thousands): --------------------------------------------------------- Current assets $ 22,137 Total assets 99,136 --------------------------------------------------------- Current liabilities 12,783 Total liabilities 20,056 --------------------------------------------------------- Net assets held for sale $ 79,080 ---------------------------------------------------------
6. On September 7, 2000, the Company's Board of Directors approved a change of the Company's fiscal year end from September 30 to December 31. The first annual period to be reported on the new fiscal year end will be the twelve months ending December 31, 2000. 7. At September 30, 2000 and December 31, 1999, inventories included finished and in-process products totaling $155,212,000 and $154,261,000, respectively, and raw materials and supplies of $65,783,000 and $74,942,000, respectively. 8. During the nine months ended September 30, 2000 and 1999, the Company repurchased 2,257,000 and 882,000 shares of common stock for an aggregate price of $43,710,000 and $17,932,000, respectively. 9. For the nine months ended September 30, 2000, depreciation and amortization expense related to continuing operations were $26,869,000 and $7,601,000, respectively. For the nine months ended September 30, 1999, depreciation and amortization expense related to continuing operations were $23,533,000 and $5,930,000, respectively. 10. The components of comprehensive income for the periods presented are as follows (in thousands):
Three Months Nine Months Ended September 30 Ended September 30 ------------------ ------------------ 2000 1999 2000 1999 ---- ---- ---- ---- Net earnings $ 18,385 $ 23,506 $ 56,584 $ 63,264 Other comprehensive (loss): Foreign currency translation adjustment (11,873) (4,820) (25,162) (8,156) --------- --------- --------- -------- Comprehensive income $ 6,512 $ 18,686 $ 31,422 $ 55,108 ========= ========= ========= ========
There are no reclassification adjustments to be reported. -5- 10 11. During the quarter ended June 30, 2000 the Company decided to dispose of its Yeast division and integrate its Dehydrated Products division with the Flavor division. As a result of these changes, the reportable segments were changed to Flavor and Color and all segment data has been restated to reflect this change. Operating results and the related assets by segment for the periods presented are as follows (in thousands):
Corporate Continuing Flavor Color and Other Operations ------ ----- --------- ---------- Quarter ended September 30, 2000 Revenues from external customers $ 124,162 $ 67,156 $ 15,673 $ 206,991 Intersegment revenues 7,289 5,653 -- 12,942 ---------- ---------- ---------- ------------ Total revenue $ 131,451 $ 72,809 $ 15,673 $ 219,933 ========== ========== ========== ============ Operating profit $ 20,449 $ 17,887 $ (5,546) $ 32,790 Interest expense -- -- 8,579 8,579 ---------- --------- ---------- ------------ Earnings before income taxes $ 20,449 $ 17,887 $ (14,125) $ 24,211 ========== ========== =========== ============ Quarter ended September 30, 1999 Revenues from external customers $ 129,675 $ 67,431 $ 13,050 $ 210,156 Intersegment revenues 4,899 2,595 -- 7,494 ---------- ---------- ---------- ------------ Total revenue $ 134,574 $ 70,026 $ 13,050 $ 217,650 ========== ========== ========== ============ Operating profit $ 25,121 $ 16,373 $ (5,859) $ 35,635 Interest expense -- -- 6,868 6,868 ---------- ---------- ---------- ------------ Earnings before income taxes $ 25,121 $ 16,373 $ (12,727) $ 28,767 ========== ========== =========== ============ Nine months ended September 30, 2000 Revenues from external customers $ 370,733 $ 203,645 $ 41,925 $ 616,303 Intersegment revenues 17,681 14,780 -- 32,461 ---------- ---------- ---------- ------------ Total revenue $ 388,414 $ 218,425 $ 41,925 $ 648,764 ========== ========== ========== ============ Operating profit $ 62,589 $ 53,094 $ (16,076) $ 99,607 Interest expense -- -- 25,181 25,181 ---------- ---------- ---------- ------------ Earnings before income taxes $ 62,589 $ 53,094 $ (41,257) $ 74,426 ========== ========== =========== ============ Assets $ 432,133 $ 219,255 $ 402,348 $ 1,053,736 ========== ========== =========== ============ Nine months ended September 30, 1999 Revenues from external customers $ 382,549 $ 178,965 $ 36,042 $ 597,556 Intersegment revenues 13,139 8,303 -- 21,442 ---------- ---------- ---------- ------------ Total revenue $ 395,688 $ 187,268 $ 36,042 $ 618,998 ========== ========== ========== ============ Operating profit $ 63,411 $ 45,626 $ (12,679) $ 96,358 Interest expense -- -- 20,276 20,276 ---------- ---------- ---------- ------------ Earnings before income taxes $ 63,411 $ 45,626 $ (32,955) $ 76,082 ========== ========== =========== ============ Assets $ 448,195 $ 213,664 $ 381,035 $ 1,042,894 ========== ========== =========== ============
12. Effective January 1, 2000, the Company acquired for cash the stock of Dr. Marcus GmbH, a leading manufacturer of natural colors, located in Hamburg, Germany. Annual revenue is approximately $14,000,000. 13. On January 27, 2000, the Company acquired for cash the remaining interest in Monarch Food Colors, L.P., located in High Ridge, Missouri. The Company previously held a 24% ownership interest in Monarch as a result of the Company's April 1999 purchase of Pointing Holdings Ltd. Annual revenues for 1999 were just under $10,000,000. Monarch manufactures colors for the food, pharmaceutical and cosmetic industries. 14. On February 29, 2000, the Company refinanced $40,000,000 of senior notes that were due through December 2009 using proceeds from additional short-term borrowings. -6- 11 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF CONTINUING OPERATIONS Revenue from continuing operations for the three months ended September 30, 2000 was $206,991,000 compared with $210,156,000 in 1999, a 1.5% decrease. Revenue for the nine months ended September 30, 2000 was $616,303,000, an increase of 3.1% over the same period in the prior year. The Color segment reported increased revenue of 4.0% for the third quarter and 16.6% year-to-date. Revenues for the Flavor segment decreased 2.3% and 1.8% for the quarter and nine months ended September 30, 2000 compared to the same periods in 1999. Gross profit was down 7.2% for the quarter ended September 30, 2000, but up 0.8 % for the nine months ended September 30, 2000 compared to the same periods in the prior year. Selling and administrative expenses increased $2,290,000 and $11,268,000 for the quarter and nine months ended September 30, 2000 compared to the same periods in 1999. Most of the increase in selling and administrative expense is the result of acquisitions and normal inflationary increases. For the third quarter of 2000, operating income decreased 8.0% to $32,790,000. For the nine months ended September 30, 2000, operating income increased to $99,607,000, or 3.4%, from the same period in 1999. Interest expense for the third quarter increased to $8,579,000 from $6,868,000 for the same period last year. For the nine months ended September 30, 2000 interest expense increased $4,905,000 to $25,181,000. Higher average borrowings used primarily to fund acquisitions and working capital requirements resulted in $4,405,0000 of the increase. The remainder of the increase reflects higher average interest rates. The effective income tax rate on continuing operations was 27.9% and 26.7%, respectively, for the three and nine months ended September 30, 2000. The decrease in the effective tax rate for the three months ended September 30, 2000, is the result of a reduction in the valuation allowance compared to the same period last year. The change in the judgement about the realizability of certain deferred tax assets results primarily from the Company's decision to sell its Red Star Yeast division. The effective tax rate for the three months ended September 30, 2000 excluding this item would have been approximately 33.0%. The decrease in the year-to-date effective rate was also affected by tax benefits recorded in the first quarter of 2000 relating to the Company's decision to close its dehydrated operations in Ireland. The effective income tax rate for the nine months ended September 30, 2000 excluding these items would have been approximately 33.0%. DISCONTINUED OPERATIONS During the quarter ended June 30, 2000, the Company announced its decision to consider strategic alternatives for its Yeast division. After reviewing options for growth, the Company decided to sell this business. Beginning with the quarter ended June 30, 2000, the Yeast business is being reported as a discontinued operation. Earnings from discontinued operations, net of tax were $929,000 for the third quarter of 2000 compared to $3,192,000 for the third quarter of 1999. For the nine months ended September 30, 2000, earnings from discontinued operations, net of tax, were $2,006,000, a decline of 81.6% compared to the same period last year. The decrease is a result of lower fresh yeast prices and volumes. The Company has entered into a letter of intent to sell the Yeast division and expects to finalize a sale by the end of 2000. SEGMENT INFORMATION During the quarter ended June 30, 2000 the Company decided to dispose of its Yeast division and integrate its Dehydrated Products division with the Flavor division. As a result of these actions, the Company's reportable segments became Flavor and Color and all segment data has been restated to reflect this change. -7- 12 Flavor - The Flavor segment reported revenue of $131,451,000 for the third quarter of 2000 compared to $134,574,000 for the same period last year. Increased revenue from higher volumes in every flavor and dehydrated product category during calendar 2000 were more than offset by unfavorable currency exchange rates and lower prices on dehydrated products. Total revenues were also negatively impacted by the closure of the dehydrated products operation in Ireland. Year-to-date revenue in the Flavor segment decreased by $7,274,000 to $388,414,000. Operating profit declined 18.6% during the quarter and by 1.3% over the past nine months reflecting lower dehydrated product pricing, the negative impact of currency rates and the recognition of very favorable harvest and processing costs during the comparable quarter last year. Color - Revenue for the Color segment was $72,809,000 for the third quarter of 2000, a 4.0% increase from $70,026,000 for the third quarter of 1999. Year-to-date revenue increased 16.6% to $218,425,000. Revenue increases for the quarter and nine months ended September 30, 2000 are due to higher volumes of natural colors, strong sales of inks for ink-jet printers, and specialty food colors. Operating income for the third quarter ended September 30, 2000 was up 9.2%, to $17,887,000 and up 16.4% to $53,094,000 for the nine months ended September 30, 2000 due to increased revenue worldwide. FINANCIAL CONDITION Beginning with the quarter ended June 30, 2000, the consolidated condensed balance sheet has presented "Net assets held for sale" of the discontinued operation as a separate line item in current assets. Prior period balance sheets have not been restated. The current ratio was 1.5 at September 30, 2000 compared with 1.7 at December 31, 1999. The decrease is primarily the result of increased short-term borrowings used to fund acquisitions and the refinancing of $40,000,000 in senior notes. Net cash provided by continuing operations was $62,264,000 for the nine months ended September 30, 2000, compared to $73,172,000 provided by continuing operations for the nine months ended September 30, 1999. Net cash provided by discontinued operations was $16,465,000 for the nine months ended September 30, 2000 compared to $15,076,000 provided by discontinued operations for the nine months ended September 30, 1999. The decrease in cash provided by operating activities in fiscal 2000 was primarily due to increased inventories of dehydrated products, decreased payables, and lower earnings from the Yeast division compared to the prior year. Net cash used in investing activities was $73,572,000 for the nine months ended September 30, 2000 and $110,174,000 for the nine months ended September 30, 1999. Cash used to acquire new businesses was $44,206,000 for the nine months ended September 30, 2000 compared to $58,361,000 for the same period in 1999. Investing activities include capital additions of $40,808,000 and $51,312,000 during 2000 and 1999, respectively. The capital expenditure program reflects the Company's continuing commitment to maintain and enhance product quality, further automate and upgrade manufacturing processes, and expand the business through internal growth. Net cash provided by financing activities was $397,000 for the nine months ended September 30, 2000, compared with $26,275,000 in the comparable period last year. Treasury stock purchases increased to $44,995,000 in 2000 from $17,930,000 in 1999. Dividends of $19,625,000 and $20,065,000 were paid during 2000 and 1999, respectively. -8- 13 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK There have been no material changes in the Company's market risk during the third quarter ended September 30, 2000. For additional information on market risk, refer to page 15 of the Company's 1999 Annual Report. FORWARD-LOOKING INFORMATION This document contains forward-looking statements that reflect management's current assumptions and estimates of future economic circumstances, industry conditions, Company performance and financial results. The Private Securities Litigation Reform Act of 1995 provides a safe harbor for such forward-looking statements. Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors that could cause actual events to differ materially from those expressed in those statements. A variety of factors could cause the Company's actual results and experience to differ materially from the anticipated results. These factors and assumptions include the pace and nature of new product introductions by the Company's customers; execution of the Company's acquisition program; industry and economic factors related to the Company's domestic and international business; currency exchange rate fluctuations; the sale of the Yeast division by the end of 2000; the sale of the Yeast division at a gain; and the outcome of various productivity-improvement and cost-reduction efforts. 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 therein will not be realized. -9- 14 PART II OTHER INFORMATION 15 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS No matters were submitted to a vote of security holders during the quarter ended September 30, 2000. ITEM 5. OTHER MATTERS On November 6, 2000, the Company announced its new name, Sensient Technologies Corporation (NYSE: SXT). Pending shareholder approval of the new name at its annual meeting in April 2001, the Company will be doing business under the new name. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits. (See Exhibit Index following this report.) (b) A report on Form 8-K was filed on September 13, 2000 announcing the decision to change the Company's year-end from September 30 to December 31 and that the Board of Director's had adopted a resolution to appoint Wells Fargo Bank Minnesota as transfer agent. -10- 16 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 thereunto duly authorized. UNIVERSAL FOODS CORPORATION (d/b/a SENSIENT TECHNOLOGIES CORPORATION) Date: November 10, 2000 By: /s/ John L. Hammond ------------------------------------------- John L. Hammond, Vice President, Secretary and General Counsel Date: November 10, 2000 By: /s/ Michael L. Hennen ------------------------------------------- Michael L. Hennen, Vice President and Controller -11- 17 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 thereunto duly authorized. UNIVERSAL FOODS CORPORATION (d/b/a SENSIENT TECHNOLOGIES CORPORATION) Date: November 10, 2000 By: --------------------------------------------- John L. Hammond, Vice President, Secretary and General Counsel Date: November 10, 2000 By: --------------------------------------------- Michael L. Hennen, Vice President and Controller -12- 18 UNIVERSAL FOODS CORPORATION (d/b/a SENSIENT TECHNOLOGIES CORPORATION) EXHIBIT INDEX TO QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 2000
Exhibit Description Filed Herewith Incorporated by Reference From ------- ----------- -------------- ------------------------------ 3.1 Universal Foods Corporation Exhibit A to the Registrant's Amended and Restated Articles Definitive Proxy Statement of Incorporation adopted filed on Schedule 14A on January 21, 1999 December 15, 1998 (Commission File No. 1-7626) 3.2 By-Laws of Universal Foods Corporation X d/b/a Sensient Technologies Corporation, as amended on September 7, 2000. 4.1 Amendment dated as of November 6, X 2000, to the Rights Agreement dated as of August 6, 1998, by and between Universal Foods Corporation d/b/a Sensient Technologies Corporation and Wells Fargo Bank Minnesota, N.A. (as successor to Firstar Trust Company), as Rights Agent. 27.1 Financial Data Schedule X
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