Segment and Geographic Information

12 Months Ended

Dec. 31, 2020

Segment and Geographic Information [Abstract]

Segment and Geographic Information

12. Segment and Geographic Information

The accounting policies of the segments are the same as those described in the summary of significant accounting policies. The Company evaluates performance based on operating income before divestiture & other related costs, share-based compensation, restructuring and other charges including operational improvement plan costs, one-time COVID-19 employee payment, interest expense, and income taxes (segment operating income). Total revenue and segment operating income by business segment and geographic region include both sales to customers, as reported in the Company’s Consolidated Statements of Earnings, and intersegment sales, which are accounted for at prices that approximate market prices and are eliminated in consolidation.

Assets by business segment and geographic region are those assets used in the Company’s operations in each segment and geographic region. Segment assets reflect the allocation of goodwill to each segment. Corporate & Other assets consist primarily of investments, deferred tax assets, and fixed assets.

In 2020, the Company changed the name of its Flavors & Fragrances segment to the Flavors & Extracts segment in order to more accurately reflect the group’s product portfolio. In addition, the Company changed the name of its Food & Beverage Colors product line to Food & Pharmaceutical Colors.

Segment Information

The Company determines its operating segments based on information utilized by its chief operating decision maker to allocate resources and assess performance. Segment performance is evaluated on operating income of the respective business units before divestiture & other related costs, share-based compensation, and restructuring and other charges including operational improvement plan costs, which are reported in Corporate & Other.

The Company’s three reportable segments are Flavors & Extracts and Color segments, which are both managed on a product line basis, and the Asia Pacific segment, which is managed on a geographic basis. The Company’s Flavors & Extracts segment produces flavor and fragrance products that impart a desired taste, texture, aroma, or other characteristic to a broad range of consumers and other products. The Color segment produces natural and synthetic color systems for foods, beverages, pharmaceuticals and nutraceuticals; colors, ingredients and systems for cosmetics; specialty inks and technical colors for industrial applications. The Asia Pacific segment is managed on a geographic basis and produces and distributes color, flavor, and fragrance products for the Asia Pacific countries. The Company’s corporate expenses, divestiture & other related costs, share-based compensation, operational improvement plan expenses, COVID-19 employee payment, and other costs are included in the “Corporate & Other” category.

Divestiture & other related costs and restructuring and other costs, including the operational improvement plan costs, for the years ended December 31, 2020 and 2019, are further described in Note 14, Divestitures, and Note 15, Operational Improvement Plan, and are included in the operating income (loss) results in Corporate & Other below. There were no divestiture & other related costs, restructuring and other costs, or operational improvement plan costs in 2018. In addition, the Company’s corporate expenses and share-based compensation are included in Corporate & Other.

(In thousands)	Flavors & Extracts		Color		Asia Pacific		Corporate & Other			Consolidated
2020:
Revenue from external customers	$	724,483	$	486,536	$	120,982	$	-		$	1,332,001
Intersegment revenue		17,552		14,482		245		-			32,279
Total revenue		742,035		501,018		121,227		-			1,364,280
Operating income (loss)		90,974		96,034		22,075		(56,427	)		152,656
Interest expense		-		-		-		14,811			14,811
Earnings (loss) before income taxes		90,974		96,034		22,075		(71,238	)		137,845
Assets		686,348		718,665		100,258		235,589			1,740,860
Capital expenditures		24,541		19,840		2,687		5,094			52,162
Depreciation and amortization		24,801		19,368		2,578		2,894			49,641
2019:
Revenue from external customers	$	682,705	$	522,051	$	118,178	$	-		$	1,322,934
Intersegment revenue		17,651		13,108		70		-			30,829
Total revenue		700,356		535,159		118,248		-			1,353,763
Operating income (loss)		74,961		101,190		19,382		(74,423	)		121,110
Interest expense		-		-		-		20,107			20,107
Earnings (loss) before income taxes		74,961		101,190		19,382		(94,530	)		101,003
Assets		714,779		734,343		99,183		191,846			1,740,151
Capital expenditures		16,968		16,521		2,545		3,066			39,100
Depreciation and amortization		27,179		22,088		2,581		3,167			55,015
2018:
Revenue from external customers	$	723,189	$	540,499	$	123,127	$	-		$	1,386,815
Intersegment revenue		23,743		13,505		37		-			37,285
Total revenue		746,932		554,004		123,164		-			1,424,100
Operating income (loss)		96,433		113,306		20,856		(27,217	)		203,378
Interest expense		-		-		-		21,853			21,853
Earnings (loss) before income taxes		96,433		113,306		20,856		(49,070	)		181,525
Assets		782,145		752,305		103,808		186,682			1,824,940
Capital expenditures		23,679		21,744		2,858		2,459			50,740
Depreciation and amortization		25,922		21,931		2,451		2,940			53,244

Geographic Information

The Company has manufacturing facilities or sales offices in North America, Europe, Asia, Australia, South America, and Africa.

The Company’s annual revenue summarized by geographic location is as follows:

(In thousands)	Flavors & Extracts		Color		Asia Pacific		Corporate & Other		Consolidated
2020:
Revenue from external customers:
North America	$	491,641	$	241,608	$	81	$	-	$	733,330
Europe		160,083		129,704		193		-		289,980
Asia Pacific		30,080		52,414		117,427		-		199,921
Other		42,679		62,810		3,281		-		108,770
Total revenue from external customers	$	724,483	$	486,536	$	120,982	$	-	$	1,332,001
Long-lived assets:
North America	$	244,921	$	252,906	$	-	$	102,577	$	600,404
Europe		112,424		226,840		-		-		339,264
Asia Pacific		204		4,670		31,834		-		36,708
Other		782		22,116		-		-		22,898
Total long-lived assets	$	358,331	$	506,532	$	31,834	$	102,577	$	999,274
2019:
Revenue from external customers:
North America	$	448,393	$	251,593	$	112	$	-	$	700,098
Europe		158,902		148,393		336		-		307,631
Asia Pacific		32,203		57,268		116,508		-		205,979
Other		43,207		64,797		1,222		-		109,226
Total revenue from external customers	$	682,705	$	522,051	$	118,178	$	-	$	1,322,934
Long-lived assets:
North America	$	251,822	$	220,723	$	-	$	80,128	$	552,673
Europe		102,631		242,311		-		-		344,942
Asia Pacific		1,017		3,758		31,007		-		35,782
Other		504		18,037		-		-		18,541
Total long-lived assets	$	355,974	$	484,829	$	31,007	$	80,128	$	951,938
2018:
Revenue from external customers:
North America	$	477,083	$	245,649	$	-	$	-	$	722,732
Europe		173,562		168,340		155		-		342,057
Asia Pacific		31,506		59,548		121,975		-		213,029
Other		41,038		66,962		997		-		108,997
Total revenue from external customers	$	723,189	$	540,499	$	123,127	$	-	$	1,386,815
Long-lived assets:
North America	$	255,131	$	230,187	$	-	$	76,996	$	562,314
Europe		125,157		265,688		-		-		390,845
Asia Pacific		1,061		3,319		27,872		-		32,252
Other		277		16,387		-		-		16,664
Total long-lived assets	$	381,626	$	515,581	$	27,872	$	76,996	$	1,002,075

Sales in the United States, based on the final country of destination of the Company’s products, were $614.3 million, $575.2 million, and $586.2 million, in 2020, 2019, and 2018, respectively. No other country of destination exceeded 10% of consolidated sales. Total long-lived assets in the United States amounted to $518.2 million, $471.8 million, and $484.9 million, at December 31, 2020, 2019, and 2018, respectively.

Product Information

During the first quarter of 2020, the Company updated its product line disclosures as a result of its intent to divest its inks, fragrances (excluding its essential oils product line), and yogurt fruit preparations product lines. Flavors, Extracts & Flavor Ingredients now includes essential oils, which was previously reported in Fragrances. Fragrances now only includes the aroma chemicals and fragrance compounds product lines. Yogurt Fruit Preparations is now disclosed separately; previously, it was reported in the Flavors product line. Food & Pharmaceutical Colors (formerly Food & Beverage Colors) now includes pharmaceutical colors and natural extraction, which were previously reported in Other Colors. Personal Care includes cosmetic and non-food colors. Inks is now disclosed separately; previously, it was reported in Other Colors. The results for 2019 and 2018 have been restated to reflect these changes.

The Company’s revenue summarized by product portfolio is as follows:

(In thousands)	Flavors & Extracts			Color			Asia Pacific			Consolidated
2020:
Flavors, Extracts & Flavor Ingredients	$	399,331		$	-		$	-		$	399,331
Natural Ingredients		243,161			-			-			243,161
Fragrances		85,354			-			-			85,354
Yogurt Fruit Preparations		14,189			-			-			14,189
Food & Pharmaceutical Colors		-			346,269			-			346,269
Personal Care		-			141,331			-			141,331
Inks		-			13,418			-			13,418
Asia Pacific		-			-			121,227			121,227
Intersegment Revenue		(17,552	)		(14,482	)		(245	)		(32,279	)
Total revenue from external customers	$	724,483		$	486,536		$	120,982		$	1,332,001
2019:
Flavors, Extracts & Flavor Ingredients	$	378,967		$	-		$	-		$	378,967
Natural Ingredients		214,027			-			-			214,027
Fragrances		86,399			-			-			86,399
Yogurt Fruit Preparations		20,963			-			-			20,963
Food & Pharmaceutical Colors		-			340,327			-			340,327
Personal Care		-			159,640			-			159,640
Inks		-			35,192			-			35,192
Asia Pacific		-			-			118,248			118,248
Intersegment Revenue		(17,651	)		(13,108	)		(70	)		(30,829	)
Total revenue from external customers	$	682,705		$	522,051		$	118,178		$	1,322,934
2018:
Flavors, Extracts & Flavor Ingredients	$	403,762		$	-		$	-		$	403,762
Natural Ingredients		224,280			-			-			224,280
Fragrances		91,786			-			-			91,786
Yogurt Fruit Preparations		27,104			-			-			27,104
Food & Pharmaceutical Colors		-			332,878			-			332,878
Personal Care		-			179,485			-			179,485
Inks		-			41,641			-			41,641
Asia Pacific		-			-			123,164			123,164
Intersegment Revenue		(23,743	)		(13,505	)		(37	)		(37,285	)
Total revenue from external customers	$	723,189		$	540,499		$	123,127		$	1,386,815