QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended: |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from |
to |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification Number) |
Registrant's telephone number, including area code: |
( |
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered |
Accelerated Filer ☐ |
Non-Accelerated Filer ☐ |
|
Smaller Reporting Company |
Emerging Growth Company |
Class |
Outstanding at April 29, 2021 |
|
Common Stock, par value $0.10 per share |
Page No. |
||
PART I. FINANCIAL INFORMATION: |
||
Item 1. |
Financial Statements: |
|
1 |
||
2 |
||
3 |
||
4 |
||
5 |
||
6 |
||
Item 2. |
15 |
|
Item 3. |
21 |
|
Item 4. |
21 |
|
PART II. OTHER INFORMATION: |
||
Item 1. |
22 |
|
Item 1A. |
22 |
|
Item 2. |
22 |
|
Item 6. |
22 |
|
23 |
||
24 |
||
| PART I. | FINANCIAL INFORMATION |
| ITEM 1. | FINANCIAL STATEMENTS |
Three Months Ended March 31, |
||||||||
2021 |
2020 |
|||||||
Revenue |
$ |
$ |
||||||
Cost of products sold |
||||||||
Selling and administrative expenses |
||||||||
Operating income |
||||||||
Interest expense |
||||||||
Earnings before income taxes |
||||||||
Income taxes |
||||||||
Net earnings |
$ |
$ |
||||||
Weighted average number of common shares outstanding: |
||||||||
Basic |
||||||||
Diluted |
||||||||
Earnings per common share: |
||||||||
Basic |
$ |
$ |
||||||
Diluted |
$ |
$ |
||||||
Dividends declared per common share |
$ |
$ |
||||||
Three Months Ended March 31, |
||||||||
2021 |
2020 |
|||||||
Comprehensive income (loss) |
$ |
$ |
( |
) |
||||
Assets |
March 31, 2021 (Unaudited) |
December 31, 2020 |
||||||
Current Assets: |
||||||||
Cash and cash equivalents |
$ |
$ |
||||||
Trade accounts receivable |
||||||||
Inventories |
||||||||
Prepaid expenses and other current assets |
||||||||
Assets held for sale |
||||||||
Total current assets |
||||||||
Other assets |
||||||||
Deferred tax assets |
||||||||
Intangible assets, net |
||||||||
Goodwill |
||||||||
Property, Plant, and Equipment: |
||||||||
Land |
||||||||
Buildings |
||||||||
Machinery and equipment |
||||||||
Construction in progress |
||||||||
Less accumulated depreciation |
( |
) |
( |
) |
||||
Total assets |
$ |
$ |
||||||
Liabilities and Shareholders' Equity |
||||||||
Current Liabilities: |
||||||||
Trade accounts payable |
$ |
$ |
||||||
Accrued salaries, wages, and withholdings from employees |
||||||||
Other accrued expenses |
||||||||
Income taxes |
||||||||
Short-term borrowings |
||||||||
Liabilities held for sale |
||||||||
Total current liabilities |
||||||||
Deferred tax liabilities |
||||||||
Other liabilities |
||||||||
Accrued employee and retiree benefits |
||||||||
Long-term debt |
||||||||
Shareholders’ Equity: |
||||||||
Common stock |
||||||||
Additional paid-in capital |
||||||||
Earnings reinvested in the business |
||||||||
Treasury stock, at cost |
( |
) |
( |
) |
||||
Accumulated other comprehensive loss |
( |
) |
( |
) |
||||
Total shareholders’ equity |
||||||||
Total liabilities and shareholders’ equity |
$ |
$ |
||||||
Three Months Ended March 31, |
||||||||
2021 |
2020 |
|||||||
Cash flows from operating activities: |
||||||||
Net earnings |
$ |
$ |
||||||
Adjustments to arrive at net cash provided by operating activities: |
||||||||
Depreciation and amortization |
||||||||
Share-based compensation expense |
||||||||
Net loss on assets |
||||||||
Loss on divestitures and other charges |
||||||||
Deferred income taxes |
||||||||
Changes in operating assets and liabilities: |
||||||||
Trade accounts receivable |
( |
) |
( |
) |
||||
Inventories |
||||||||
Prepaid expenses and other assets |
( |
) |
( |
) |
||||
Accounts payable and other accrued expenses |
( |
) |
||||||
Accrued salaries, wages, and withholdings from employees |
( |
) |
||||||
Income taxes |
||||||||
Other liabilities |
||||||||
Net cash provided by operating activities |
||||||||
Cash flows from investing activities: |
||||||||
Acquisition of property, plant, and equipment |
( |
) |
( |
) |
||||
Proceeds from sale of assets |
||||||||
Proceeds from divesture of businesses |
||||||||
Other investing activities |
||||||||
Net cash used in investing activities |
( |
) |
( |
) |
||||
Cash flows from financing activities: |
||||||||
Proceeds from additional borrowings |
||||||||
Debt payments |
( |
) |
( |
) |
||||
Purchase of treasury stock |
( |
) |
||||||
Dividends paid |
( |
) |
( |
) |
||||
Other financing activities |
( |
) |
( |
) |
||||
Net cash used in financing activities |
( |
) |
( |
) |
||||
Effect of exchange rate changes on cash and cash equivalents |
( |
) |
( |
) |
||||
Net increase in cash and cash equivalents |
||||||||
Cash and cash equivalents at beginning of period |
||||||||
Cash and cash equivalents at end of period |
$ |
$ |
||||||
Common |
Additional Paid-In |
Earnings Reinvested |
Treasury Stock |
Accumulated Other Comprehensive |
Total |
|||||||||||||||||||||||
Three Months Ended March 31, 2020 |
Stock |
Capital |
in the Business |
Shares |
Amount |
Income (Loss) |
Equity |
|||||||||||||||||||||
Balances at December 31, 2019 |
$ |
$ |
$ |
$ |
( |
) |
$ |
( |
) |
$ |
||||||||||||||||||
Net earnings |
- |
|||||||||||||||||||||||||||
Other comprehensive loss |
- |
( |
) |
( |
) |
|||||||||||||||||||||||
Cash dividends paid – $ |
( |
) |
- |
( |
) |
|||||||||||||||||||||||
Share-based compensation |
- |
|||||||||||||||||||||||||||
Non-vested stock issued upon vesting |
( |
) |
( |
) |
||||||||||||||||||||||||
Benefit plans |
( |
) |
||||||||||||||||||||||||||
Adoption of ASU 2016-13 |
( |
) |
- |
( |
) |
|||||||||||||||||||||||
Other |
( |
) |
( |
) |
( |
) |
||||||||||||||||||||||
Balances at March 31, 2020 |
$ |
$ |
$ |
$ |
( |
) |
$ |
( |
) |
$ |
||||||||||||||||||
Three Months Ended March 31, 2021 |
||||||||||||||||||||||||||||
Balances at December 31, 2020 |
$ |
$ |
$ |
$ |
( |
) |
$ |
( |
) |
$ |
||||||||||||||||||
Net earnings |
- |
|||||||||||||||||||||||||||
Other comprehensive loss |
- |
( |
) |
( |
) |
|||||||||||||||||||||||
Cash dividends paid – $ |
( |
) |
- |
( |
) |
|||||||||||||||||||||||
Share-based compensation |
- |
|||||||||||||||||||||||||||
Non-vested stock issued upon vesting |
( |
) |
( |
) |
||||||||||||||||||||||||
Benefit plans |
( |
) |
||||||||||||||||||||||||||
Purchase of treasury stock |
( |
) |
( |
) |
||||||||||||||||||||||||
Other |
( |
) |
( |
) |
( |
) |
||||||||||||||||||||||
Balances at March 31, 2021 |
$ |
$ |
$ |
$ |
( |
) |
$ |
( |
) |
$ |
||||||||||||||||||
| 1. | Accounting Policies |
| 2. | Divestitures |
(In thousands) |
March 31, 2021 |
December 31, 2020 |
||||||
Assets held for sale: |
||||||||
Trade accounts receivable |
$ |
$ |
||||||
Inventories |
||||||||
Prepaid expenses and other current assets |
||||||||
Property, plant, and equipment, net |
||||||||
Intangible assets |
||||||||
Assets held for sale |
$ |
$ |
||||||
Liabilities held for sale: |
||||||||
Trade accounts payable |
$ |
$ |
||||||
Accrued salaries, wages, and withholdings from employees |
||||||||
Other accrued expenses |
||||||||
Liabilities held for sale |
$ |
$ |
||||||
(In thousands) |
Yogurt Fruit Preparations |
Fragrances |
Inks |
Corporate/ Other |
Total |
|||||||||||||||
Non-cash charges – Cost of products sold |
$ |
$ |
$ |
( |
) |
$ |
$ |
|||||||||||||
Other costs - Selling and administrative expenses(1) |
( |
) |
||||||||||||||||||
Total |
$ |
$ |
$ |
( |
) |
$ |
$ |
|||||||||||||
(In thousands) |
Yogurt Fruit Preparations |
Fragrances |
Inks |
Corporate/ Other |
Total |
|||||||||||||||
Non-cash impairment charges – Selling and administrative expenses |
$ |
$ |
$ |
$ |
$ |
|||||||||||||||
Non-cash charges – Cost of products sold |
||||||||||||||||||||
Other costs - Selling and administrative expenses(1) |
||||||||||||||||||||
Total |
$ |
$ |
$ |
$ |
$ |
|||||||||||||||
| 3. | Operational Improvement Plan |
(In thousands) |
Flavors & Extracts |
Color |
Asia Pacific |
Consolidated |
||||||||||||
Employee separation costs |
$ |
( |
) |
$ |
$ |
( |
) |
$ |
( |
) |
||||||
Other costs(1) |
||||||||||||||||
Total |
$ |
( |
) |
$ |
$ |
( |
) |
$ |
||||||||
| (1) |
| 4. | Trade Accounts Receivable |
(In thousands) Three Months Ended March 31, 2021 |
Allowance for Doubtful Accounts |
|||
Balance at December 31, 2020 |
$ |
|||
Provision for expected credit losses |
||||
Accounts written off |
( |
) |
||
Translation and other activity |
( |
) |
||
Balance at March 31, 2021 |
$ |
|||
(In thousands) Three Months Ended March 31, 2020 |
Allowance for Doubtful Accounts |
|||
Balance at December 31, 2019 |
$ |
|||
Adoption of ASU 2016-13 |
||||
Provision for expected credit losses |
||||
Accounts written off |
( |
) |
||
Translation and other activity |
( |
) |
||
Balance at March 31, 2020 |
$ |
|||
| 5. | Inventories |
| 6. | Fair Value |
| 7. | Segment Information |
(In thousands) |
Flavors & Extracts |
Color |
Asia Pacific |
Corporate & Other |
Consolidated |
|||||||||||||||
Three months ended March 31, 2021: |
||||||||||||||||||||
Revenue from external customers |
$ |
$ |
$ |
$ |
$ |
|||||||||||||||
Intersegment revenue |
||||||||||||||||||||
Total revenue |
$ |
$ |
$ |
$ |
$ |
|||||||||||||||
Operating income (loss) |
$ |
$ |
$ |
$ |
( |
) |
$ |
|||||||||||||
Interest expense |
||||||||||||||||||||
Earnings (loss) before income taxes |
$ |
$ |
$ |
$ |
( |
) |
$ |
|||||||||||||
Three months ended March 31, 2020: |
||||||||||||||||||||
Revenue from external customers |
$ |
$ |
$ |
$ |
$ |
|||||||||||||||
Intersegment revenue |
||||||||||||||||||||
Total revenue |
$ |
$ |
$ |
$ |
$ |
|||||||||||||||
Operating income (loss) |
$ |
$ |
$ |
$ |
( |
) |
$ |
|||||||||||||
Interest expense |
||||||||||||||||||||
Earnings (loss) before income taxes |
$ |
$ |
$ |
$ |
( |
) |
$ |
|||||||||||||
(In thousands) |
Flavors & Extracts |
Color |
Asia Pacific |
Consolidated |
||||||||||||
Three months ended March 31, 2021: |
||||||||||||||||
Flavors, Extracts & Flavor Ingredients |
$ |
$ |
- |
$ |
- |
$ |
||||||||||
Natural Ingredients |
- |
- |
||||||||||||||
Fragrances |
- |
- |
||||||||||||||
Yogurt Fruit Preparations |
- |
- |
||||||||||||||
Food & Pharmaceutical Colors |
- |
- |
||||||||||||||
Personal Care |
- |
- |
||||||||||||||
Inks |
- |
- |
||||||||||||||
Asia Pacific |
- |
- |
||||||||||||||
Intersegment Revenue |
( |
) |
( |
) |
( |
) |
||||||||||
Total revenue from external customers |
$ |
$ |
$ |
$ |
||||||||||||
Three months ended March 31, 2020: |
||||||||||||||||
Flavors, Extracts & Flavor Ingredients |
$ |
$ |
- |
$ |
- |
$ |
||||||||||
Natural Ingredients |
- |
- |
||||||||||||||
Fragrances |
- |
- |
||||||||||||||
Yogurt Fruit Preparations |
- |
- |
||||||||||||||
Food & Pharmaceutical Colors |
- |
- |
||||||||||||||
Personal Care |
- |
- |
||||||||||||||
Inks |
- |
- |
||||||||||||||
Asia Pacific |
- |
- |
||||||||||||||
Intersegment Revenue |
( |
) |
( |
) |
( |
) |
( |
) |
||||||||
Total revenue from external customers |
$ |
$ |
$ |
$ |
||||||||||||
(In thousands) |
Flavors & Extracts |
Color |
Asia Pacific |
Consolidated |
||||||||||||
Three months ended March 31, 2021: |
||||||||||||||||
North America |
$ |
$ |
$ |
$ |
||||||||||||
Europe |
||||||||||||||||
Asia Pacific |
||||||||||||||||
Other |
||||||||||||||||
Total revenue from external customers |
$ |
$ |
$ |
$ |
||||||||||||
Three months ended March 31, 2020: |
||||||||||||||||
North America |
$ |
$ |
$ |
$ |
||||||||||||
Europe |
||||||||||||||||
Asia Pacific |
||||||||||||||||
Other |
||||||||||||||||
Total revenue from external customers |
$ |
$ |
$ |
$ |
||||||||||||
| 8. | Retirement Plans |
Three Months Ended March 31, |
||||||||
(In thousands) |
2021 |
2020 |
||||||
Service cost |
$ |
$ |
||||||
Interest cost |
||||||||
Expected return on plan assets |
( |
) |
( |
) |
||||
Recognized actuarial loss |
||||||||
Total defined benefit expense |
$ |
$ |
||||||
| 9. | Derivative Instruments and Hedging Activity |
| 10. | Income Taxes |
| 11. | Accumulated Other Comprehensive Income |
(In thousands) |
Cash Flow Hedges (1) |
Pension Items (1) |
Foreign Currency Items |
Total |
||||||||||||
Balances at December 31, 2020 |
$ |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) |
||||||
Other comprehensive loss before reclassifications |
( |
) |
( |
) |
||||||||||||
Amounts reclassified from OCI |
( |
) |
( |
) |
||||||||||||
Balances at March 31, 2021 |
$ |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) |
||||||
(In thousands) |
Cash Flow Hedges (1) |
Pension Items (1) |
Foreign Currency Items |
Total |
||||||||||||
Balances at December 31, 2019 |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) |
||||
Other comprehensive loss before reclassifications |
( |
) |
( |
) |
( |
) |
||||||||||
Amounts reclassified from OCI |
||||||||||||||||
Balances at March 31, 2020 |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) |
||||
| (1) |
| 12. | Commitments and Contingencies |
| 13. | Subsequent Events |
| ITEM 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
Three Months Ended March 31, |
||||||||||||
(In thousands except per share amounts) |
2021 |
2020 |
% Change |
|||||||||
Revenue (GAAP) |
$ |
359,702 |
$ |
350,677 |
2.6 |
% |
||||||
Revenue of the product lines divested or to be divested |
(25,570 |
) |
(36,585 |
) |
||||||||
Adjusted revenue |
$ |
334,132 |
$ |
314,092 |
6.4 |
% |
||||||
Operating Income (GAAP) |
$ |
46,897 |
$ |
34,561 |
35.7 |
% |
||||||
Divestiture & other related costs – Cost of products sold |
25 |
190 |
||||||||||
Divestiture & other related costs – Selling and administrative expenses |
1,547 |
11,653 |
||||||||||
Operating income of the product lines divested or to be divested |
(2,927 |
) |
(1,385 |
) |
||||||||
Operational improvement plan – Selling and administrative expenses |
1,001 |
- |
||||||||||
Adjusted operating income |
$ |
46,543 |
$ |
45,019 |
3.4 |
% |
||||||
Net Earnings (GAAP) |
$ |
31,668 |
$ |
20,773 |
52.4 |
% |
||||||
Divestiture & other related costs, before tax |
1,572 |
11,843 |
||||||||||
Tax impact of divestiture & other related costs |
793 |
(934 |
) |
|||||||||
Net earnings of the product lines divested or to be divested, before tax |
(2,927 |
) |
(1,385 |
) |
||||||||
Tax impact of the product lines divested or to be divested |
723 |
297 |
||||||||||
Operational improvement plan costs, before tax |
1,001 |
- |
||||||||||
Tax impact of operational improvement plan |
(296 |
) |
- |
|||||||||
Adjusted net earnings |
$ |
32,534 |
$ |
30,594 |
6.3 |
% |
||||||
Diluted Earnings Per Share (GAAP) |
$ |
0.75 |
$ |
0.49 |
53.1 |
% |
||||||
Divestiture & other related costs, net of tax |
0.06 |
0.26 |
||||||||||
Results of operations of the product lines divested or to be divested, net of tax |
(0.05 |
) |
(0.03 |
) |
||||||||
Operational improvement plan, net of tax |
0.02 |
- |
||||||||||
Adjusted diluted earnings per share |
$ |
0.77 |
$ |
0.72 |
6.9 |
% |
||||||
Three Months Ended March 31, 2021 |
||||
Revenue |
Total |
Foreign Exchange Rates |
Adjustments (1) |
Adjusted Local Currency |
Flavors & Extracts |
7.7% |
2.4% |
(3.6%) |
8.9% |
Color |
(5.4%) |
2.4% |
(5.9%) |
(1.9%) |
Asia Pacific |
11.1% |
5.9% |
0.5% |
4.7% |
Total Revenue |
2.6% |
2.7% |
(4.1%) |
4.0% |
Operating Income |
||||
Flavors & Extracts |
29.5% |
1.9% |
6.4% |
21.2% |
Color |
(10.3%) |
3.3% |
(0.3%) |
(13.3%) |
Asia Pacific |
33.5% |
1.3% |
0.8% |
31.4% |
Corporate & Other |
(36.0%) |
0.0% |
(54.5%) |
18.5% |
Total Operating Income |
35.7% |
4.1% |
31.3% |
0.3% |
Diluted Earnings per Share |
53.1% |
4.1% |
44.8% |
4.2% |
| (1) | For Revenue, adjustments consist of revenues of the product lines divested or to be divested. For Operating Income and Diluted Earnings per Share, adjustments consist of the results of the product lines divested or to be divested, divestitures & other related costs, and operational improvement plan costs. |
| ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
| ITEM 4. | CONTROLS AND PROCEDURES |
| PART II. | OTHER INFORMATION |
| ITEM 1. | LEGAL PROCEEDINGS |
| ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS |
Period |
Total Number of Shares Purchased |
Average Price Paid per Share |
Total Number of shares purchased as part of publicly announced plans or programs |
Maximum number of shares that may yet be purchased under the plans or programs |
||||||||||||
January 1 to January 31, 2021 |
- |
$ |
- |
- |
2,225,026 |
|||||||||||
February 1 to February 28, 2021 |
66,043 |
77.65 |
66,043 |
2,158,983 |
||||||||||||
March 1 to March 31, 2021 |
85,800 |
76.19 |
85,800 |
2,073,183 |
||||||||||||
Total |
151,843 |
151,843 |
||||||||||||||
| ITEM 6. | EXHIBITS |
Exhibit |
Description |
Incorporated by Reference From |
Filed Herewith |
Certifications of the Company’s Chairman, President & Chief Executive Officer and Senior Vice President & Chief Financial Officer pursuant to Rule 13a-14(a) of the Exchange Act |
X |
||
Certifications of the Company’s Chairman, President & Chief Executive Officer and Senior Vice President & Chief Financial Officer pursuant to 18 United States Code § 1350 |
X |
||
101.INS |
Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document) |
X |
|
101.SCH |
Inline XBRL Taxonomy Extension Schema Document |
X |
|
101.CAL |
Inline XBRL Taxonomy Extension Calculation Linkbase Document |
X |
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101.DEF |
Inline XBRL Taxonomy Extension Definition Linkbase Document |
X |
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101.LAB |
Inline XBRL Taxonomy Extension Label Linkbase Document |
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101.PRE |
Inline XBRL Taxonomy Extension Presentation Linkbase Document |
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104 |
Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) |
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SENSIENT TECHNOLOGIES CORPORATION |
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Date: |
May 4, 2021 |
By: |
/s/ John J. Manning |
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John J. Manning, Senior Vice President, General Counsel & Secretary |
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Date: |
May 4, 2021 |
By: |
/s/ Stephen J. Rolfs |
|
Stephen J. Rolfs, Senior Vice President & Chief Financial Officer |
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| 1. |
I have reviewed this quarterly report on Form 10-Q of Sensient Technologies Corporation;
|
| 2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
|
| 3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, and cash flows of the registrant as of, and
for, the periods presented in this report;
|
| 4. |
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting
(as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
| a) |
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
| b) |
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and
the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
| c) |
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this
report based on such evaluation; and
|
| d) |
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report)
that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
| 5. |
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or
persons performing the equivalent functions):
|
| a) |
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report
financial information; and
|
| b) |
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
Date:
|
May 4, 2021
|
|
/s/ Paul Manning
|
|
|
Paul Manning, Chairman, President &
|
|
|
Chief Executive Officer
|
| 1. |
I have reviewed this quarterly report on Form 10-Q of Sensient Technologies Corporation;
|
| 2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
|
| 3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, and cash flows of the registrant as of, and
for, the periods presented in this report;
|
| 4. |
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting
(as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
| a) |
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
| b) |
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and
the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
| c) |
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by
this report based on such evaluation; and
|
| d) |
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report)
that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
| 5. |
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or
persons performing the equivalent functions):
|
| a) |
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and
report financial information; and
|
| b) |
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
Date:
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May 4, 2021
|
|
/s/ Stephen J. Rolfs
|
|
|
Stephen J. Rolfs, Senior Vice President &
|
|
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Chief Financial Officer
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|
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/s/ Paul Manning
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||
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Name:
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Paul Manning
|
||
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Title:
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Chairman, President & Chief Executive Officer
|
||
|
Date:
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May 4, 2021
|
||
| |
/s/ Stephen J. Rolfs
|
||
|
Name:
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Stephen J. Rolfs
|
||
|
Title:
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Senior Vice President & Chief Financial Officer
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||
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Date:
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May 4, 2021
|
||
CONSOLIDATED STATEMENTS OF EARNINGS - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | |
|---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
|
| CONSOLIDATED STATEMENTS OF EARNINGS [Abstract] | ||
| Revenue | $ 359,702 | $ 350,677 |
| Cost of products sold | 244,089 | 238,784 |
| Selling and administrative expenses | 68,716 | 77,332 |
| Operating income | 46,897 | 34,561 |
| Interest expense | 3,433 | 4,307 |
| Earnings (loss) before income taxes | 43,464 | 30,254 |
| Income taxes | 11,796 | 9,481 |
| Net earnings | $ 31,668 | $ 20,773 |
| Weighted average number of common shares outstanding: | ||
| Basic (in shares) | 42,263 | 42,284 |
| Diluted (in shares) | 42,389 | 42,307 |
| Earnings per common share: | ||
| Basic (in dollars per share) | $ 0.75 | $ 0.49 |
| Diluted (in dollars per share) | 0.75 | 0.49 |
| Dividends declared per common share (in dollars per share) | $ 0.39 | $ 0.39 |
CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands |
3 Months Ended | |
|---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
|
| CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME [Abstract] | ||
| Comprehensive income (loss) | $ 16,529 | $ (23,580) |
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) $ in Thousands |
Common Stock [Member] |
Additional Paid-In Capital [Member] |
Earnings Reinvested in the Business [Member] |
Treasury Stock [Member] |
Accumulated Other Comprehensive Income (Loss) [Member] |
Total |
Cumulative Effect, Period of Adoption, Adjustment [Member]
Common Stock [Member]
|
Cumulative Effect, Period of Adoption, Adjustment [Member]
Additional Paid-In Capital [Member]
|
Cumulative Effect, Period of Adoption, Adjustment [Member]
Earnings Reinvested in the Business [Member]
|
Cumulative Effect, Period of Adoption, Adjustment [Member]
Treasury Stock [Member]
|
Cumulative Effect, Period of Adoption, Adjustment [Member]
Accumulated Other Comprehensive Income (Loss) [Member]
|
Cumulative Effect, Period of Adoption, Adjustment [Member] |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Beginning balance at Dec. 31, 2019 | $ 5,396 | $ 98,425 | $ 1,536,100 | $ (595,324) | $ (163,008) | $ 881,589 | ||||||
| Beginning balance (ASU 2016-13 [Member]) at Dec. 31, 2019 | $ 0 | $ 0 | $ (853) | $ 0 | $ 0 | $ (853) | ||||||
| Beginning balance (in shares) at Dec. 31, 2019 | 11,682,636 | |||||||||||
| Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
| Net earnings | 0 | 0 | 20,773 | $ 0 | 0 | 20,773 | ||||||
| Other comprehensive loss | 0 | 0 | 0 | 0 | (44,353) | (44,353) | ||||||
| Cash dividends paid | 0 | 0 | (16,500) | 0 | 0 | (16,500) | ||||||
| Share-based compensation | 0 | 1,177 | 0 | 0 | 0 | 1,177 | ||||||
| Non-vested stock issued upon vesting | 0 | (724) | 0 | $ 724 | 0 | 0 | ||||||
| Non-vested stock issued upon vesting (in shares) | (14,200) | |||||||||||
| Benefit plans | 0 | 241 | 0 | $ 833 | 0 | 1,074 | ||||||
| Benefit plans (in shares) | (16,344) | |||||||||||
| Other | 0 | (39) | 0 | $ (210) | 0 | (249) | ||||||
| Other (in shares) | 4,114 | |||||||||||
| Ending balance at Mar. 31, 2020 | 5,396 | 99,080 | 1,539,520 | $ (593,977) | (207,361) | 842,658 | ||||||
| Ending balance (in shares) at Mar. 31, 2020 | 11,656,206 | |||||||||||
| Beginning balance at Dec. 31, 2020 | 5,396 | 102,909 | 1,578,662 | $ (593,540) | (159,091) | 934,336 | ||||||
| Beginning balance (in shares) at Dec. 31, 2020 | 11,647,627 | |||||||||||
| Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
| Net earnings | 0 | 0 | 31,668 | $ 0 | 0 | 31,668 | ||||||
| Other comprehensive loss | 0 | 0 | 0 | 0 | (15,139) | (15,139) | ||||||
| Cash dividends paid | 0 | 0 | (16,535) | 0 | 0 | (16,535) | ||||||
| Share-based compensation | 0 | 2,113 | 0 | 0 | 0 | 2,113 | ||||||
| Non-vested stock issued upon vesting | 0 | (563) | 0 | $ 563 | 0 | 0 | ||||||
| Non-vested stock issued upon vesting (in shares) | (11,045) | |||||||||||
| Benefit plans | 0 | 338 | 0 | $ 756 | 0 | 1,094 | ||||||
| Benefit plans (in shares) | (14,791) | |||||||||||
| Purchase of treasury stock | 0 | 0 | 0 | $ (11,665) | 0 | (11,665) | ||||||
| Purchase of treasury stock (in shares) | 151,843 | |||||||||||
| Other | 0 | (72) | 0 | $ (154) | 0 | (226) | ||||||
| Other (in shares) | 3,020 | |||||||||||
| Ending balance at Mar. 31, 2021 | $ 5,396 | $ 104,725 | $ 1,593,795 | $ (604,040) | $ (174,230) | $ 925,646 | ||||||
| Ending balance (in shares) at Mar. 31, 2021 | 11,776,654 |
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Parenthetical) - $ / shares |
3 Months Ended | |
|---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
|
| CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY [Abstract] | ||
| Cash dividends per share (in dollars per share) | $ 0.39 | $ 0.39 |
Accounting Policies |
3 Months Ended | ||
|---|---|---|---|
Mar. 31, 2021 | |||
| Accounting Policies [Abstract] | |||
| 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 March 31, 2021, and the results of operations, comprehensive income, cash flows, and shareholders’ equity for the three months ended March 31, 2021 and 2020. 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.
Recently Adopted Accounting Pronouncements
In December 2019, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which clarifies and simplifies aspects of the accounting for income taxes. ASU 2019-12 is effective for public business entities beginning after December 15, 2020, and interim periods within those fiscal years. Early adoption is permitted. The Company adopted ASU 2019-12 on January 1, 2021, using retrospective, modified retrospective, or prospective basis for certain amendments. There was no impact to the consolidated financial statements.
Recently Issued Accounting Pronouncements
In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides temporary optional expedients and exceptions to US GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens of the expected market transition from LIBOR and other inter-bank offered rates to alternative rates. The guidance is effective upon issuance and generally can be applied through December 31, 2022. The Company is currently evaluating the potential impact of this standard on its consolidated financial statements and its related disclosures.
Please refer to the notes in the Company’s annual consolidated financial statements for the year ended December 31, 2020, for additional details of the Company’s financial condition and a description of the Company’s accounting policies, which have been continued without change.
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Divestitures |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Divestitures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Divestitures |
In October 2019, the Company announced its intent to divest its inks, fragrances (excluding its essential oils product line), and yogurt fruit preparations product lines. The divesting and exit of these three product lines does not meet the criteria to be presented as a discontinued operation on the Consolidated Statements of Earnings.
On June 30, 2020, the Company completed the sale of its inks product line. In 2020, the Company received $11.6 million of net cash and expects to receive additional cash when it completes certain post-closing asset sales.
On September 18, 2020, the Company completed the sale of its yogurt fruit preparations product line for $1.0 million. The sale included an earn-out based on future performance, which could result in additional cash consideration for the Company.
On April 1, 2021, the Company completed the sale of its fragrances product line (excluding its essential oils product line). The Company received $4.1 million as of March 31, 2021, in advance of the closing and received or expects to receive, an estimated additional $32 million of net cash in the second quarter of 2021, of which $4.7 million is subject to an escrow arrangement and will be released following the receipt of an affirmation or non-objection to our proposed environmental remediation plan by the Spanish environmental authorities. The proceeds are subject to post-closing working capital and net debt adjustments. In addition, the Company received additional consideration for certain retained inventories and expects to receive additional consideration for the collection of certain retained accounts receivable. In the second quarter of 2021, the Company estimates it will record a non-cash net loss of approximately $12 million primarily related to the reclassification of accumulated foreign currency translation and related items from Accumulated Other Comprehensive Loss to Selling and Administrative Expenses in the Consolidated Statements of Earnings as a result of the sale of its fragrances product line.
The assets and liabilities related to the inks and fragrances (excluding its essential oils product line) product lines are recorded in Assets Held for Sale and Liabilities Held for Sale as of March 31, 2021, and December 31, 2020, as follows:
The Company reports all costs associated with the divestitures in Corporate & Other. The following table summarizes the divestiture & other related costs for the three months ended March 31, 2021:
(1) Other costs – Selling and administrative expenses include environmental remediation, employee separation costs, professional services, accelerated depreciation, and other related costs.
The Company reports all costs associated with the divestitures in Corporate & Other. The following table summarizes the divestiture & other related costs for the three months ended March 31, 2020:
(1) Other costs – Selling and administrative expenses include employee separation costs, professional services, and other related costs.
The Company recorded non-cash impairment charges in Selling and Administrative Expenses, primarily related to property, plant, and equipment and allocated goodwill, during the three months ended March 31, 2020, when the estimated fair value less costs to sell the product line was lower than its carrying value. The Company recorded non-cash charges in Cost of Products Sold during the three months ended March 31, 2021 and 2020, to reduce the carrying value of certain inventories, when they were determined to be excess.
In March 2020, the Company was notified by the buyer of the Company’s fragrances product line that environmental sampling conducted at the Company’s Granada, Spain location had identified the presence of contaminants in soil and groundwater in certain areas of the property. The Company records liabilities related to environmental remediation obligations when estimated future expenditures are probable and the amount of the liability is reasonably estimable. The Company recorded $0.8 million in the three months ended June 30, 2020, based upon an environmental investigation and a quantitative risk assessment performed by a consultant hired by the Company. During the three months ended March 31, 2021, the Company recorded an additional $0.3 million related to these obligations in Selling and Administrative Expenses based on further analysis at the site during the period.
As of March 31, 2021, the Company estimates 2021 divestiture & other related costs will be $13 million to $14 million, including the expected non-cash charge of $12 million in the second quarter of 2021 related to the closing of the sale of the fragrances product line (excluding its essential oils product line) primarily for the reclassification of accumulated foreign currency translation and related items from Accumulated Other Comprehensive Loss to Selling and Administrative Expenses in the Consolidated Statement of Earnings. The Company anticipates that it will complete the remaining exit activities related to these product lines in 2021.
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Operational Improvement Plan |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Operational Improvement Plan [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Operational Improvement Plan |
During the third quarter of 2020, the Company approved an operational improvement plan (Operational Improvement Plan) to consolidate manufacturing facilities and improve efficiencies within the Company. As part of the Operational Improvement Plan, the Company is combining its New Jersey cosmetics manufacturing facility in the Personal Care product line of the Color segment into its existing Color segment facility in Missouri. In addition, the Company is centralizing certain Flavors & Extracts segment support functions in Europe into one location. In the Asia Pacific segment, the Company incurred costs in connection with the elimination of certain selling and administrative positions. The Company reports all costs associated with the Operational Improvement Plan in Corporate & Other.
The following table summarizes the Operational Improvement Plan expenses recorded in Selling and Administrative Expenses by segment for the three months ended March 31, 2021:
As of March 31, 2021 and December 31, 2020, the Company recorded $1.9 million and $2.2 million, respectively, of accrued liabilities in Other Accrued Expenses on the Company’s Consolidated Balance Sheet related to this plan. The Company expects the total costs in 2020 and 2021 associated with the Operational Improvement Plan to be between $5 million and $6 million, primarily related to severance and accelerated depreciation.
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Trade Accounts Receivable |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Trade Accounts Receivable [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Trade Accounts Receivable |
Trade accounts receivables are recorded at their face amount, less an allowance for expected losses on doubtful accounts. The allowance for doubtful accounts is calculated based on customer-specific analysis and an aging methodology using historical loss information. The Company believes historical loss information is a reasonable basis for expected credit losses as the Company’s historical credit loss experience correlates with its customer delinquency status. This information is also adjusted for any known current economic conditions, including the current and expected impact of COVID-19. Currently, the COVID-19 pandemic has not had and is not anticipated to have a material impact on trade accounts receivable. Forecasted economic conditions have not had a significant impact on the current credit loss estimate due to the short-term nature of the Company’s customer receivables; however, the Company will continue to monitor and evaluate the rapidly changing economic conditions. Additionally, as the Company only has one portfolio segment, there are not different risks between portfolios. Specific accounts are written off against the allowance for doubtful accounts when the receivable is deemed no longer collectible.
The following table summarizes the changes in the allowance for doubtful accounts during the three month periods ended March 31, 2021 and 2020:
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Inventories |
3 Months Ended | ||
|---|---|---|---|
Mar. 31, 2021 | |||
| Inventories [Abstract] | |||
| Inventories |
At March 31, 2021, and December 31, 2020, inventories included finished and in-process products totaling $242.6 million and $268.1 million, respectively, and raw materials and supplies of $107.7 million and $113.2 million, respectively.
|
Fair Value |
3 Months Ended | ||
|---|---|---|---|
Mar. 31, 2021 | |||
| Fair Value [Abstract] | |||
| Fair Value |
Accounting Standards Codification 820, Fair Value Measurement, defines fair value for financial assets and liabilities, establishes a framework for measuring fair value in GAAP, and expands disclosures about fair value measurements. As of March 31, 2021 and December 31, 2020, the Company’s assets and liabilities subject to this standard are forward exchange contracts. The net fair value of the forward exchange contracts based on current pricing obtained for comparable derivative products (Level 2 inputs) was an asset of $1.0 million and $0.5 million as of March 31, 2021 and December 31, 2020, respectively. The carrying values of the Company’s cash and cash equivalents, trade accounts receivable, trade accounts payable, accrued expenses, and short-term borrowings were approximately the same as the fair values as of March 31, 2021 and December 31, 2020. The fair value of the Company’s long-term debt, including current maturities, is estimated using discounted cash flows based on the Company’s current incremental borrowing rates for similar types of borrowing arrangements (Level 2 inputs). The carrying value of the long-term debt at March 31, 2021 and December 31, 2020, was $524.7 million and $526.9 million. The fair value of the long-term debt at March 31, 2021 and December 31, 2020, was $549.3 million and $556.1 million, respectively.
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Segment Information |
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| Segment Information [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Segment Information |
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, 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.
The Company determines its operating segments based on information utilized by its chief operating decision maker to allocate resources and assess performance. The Company’s three reportable segments are the 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 and flavor products for the Asia Pacific countries. The Company’s corporate expenses, divestiture & other related costs, share-based compensation, operational improvement plan expenses, 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 three months ended March 31, 2021 and 2020, are further described in Note 2, Divestitures, and Note 3, Operational Improvement Plan, and are included in the operating income (loss) results in Corporate & Other below. In addition, the Company’s corporate expenses and share-based compensation are included in Corporate & Other.
Operating results by segment for the periods presented are as follows:
Product Lines
Geographic Markets
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Retirement Plans |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Retirement Plans [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Retirement Plans |
The Company’s components of annual benefit cost for the defined benefit plans for the periods presented are as follows:
The Company’s non-service cost portion of defined benefit expense is recorded in Interest Expense on the Company’s Consolidated Statements of Earnings. The Company’s service cost portion of defined benefit expense is recorded in Selling and Administrative Expenses on the Company’s Consolidated Statements of Earnings.
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Derivative Instruments and Hedging Activity |
3 Months Ended | ||
|---|---|---|---|
Mar. 31, 2021 | |||
| Derivative Instruments and Hedging Activity [Abstract] | |||
| 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 – Certain forward exchange contracts have been designated as cash flow hedges. The Company had $32.7 million and $54.1 million of forward exchange contracts designated as cash flow hedges outstanding as of March 31, 2021 and December 31, 2020, respectively. For the three months ended March 31, 2021 and 2020, the amounts reclassified into net earnings in the Company’s Consolidated Statement of Earnings that offset the underlying transactions’ impact on earnings in the same period were not material. In addition, the Company utilizes forward exchange contracts that are not designated as cash flow hedges. The results of these transactions were not material to the financial statements.
Net investment hedges – The Company has designated certain foreign currency denominated long-term borrowings as partial hedges of the Company’s foreign currency net asset positions. As of March 31, 2021 and December 31, 2020, the total value of the Company’s net investment hedges was $315.4 million and $325.0 million, respectively. These net investment hedges included Euro and British Pound denominated long-term debt. Changes in the fair value of this debt attributable to changes in the spot foreign exchange rate are recorded in foreign currency translation in Other Comprehensive Income (OCI). For the three months ended March 31, 2021 and 2020, the impact of foreign exchange rates on these debt instruments decreased debt by $9.6 million and $8.4 million, respectively, which has been recorded as foreign currency translation in OCI.
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Income Taxes |
3 Months Ended | ||
|---|---|---|---|
Mar. 31, 2021 | |||
| Income Taxes [Abstract] | |||
| Income Taxes |
The effective income tax rates for the three months ended March 31, 2021 and 2020, were 27.1% and 31.3%, respectively. The effective tax rates for the three months ended March 31, 2021 and 2020 were both impacted by changes in estimates associated with the finalization of prior year foreign tax items and the mix of foreign earnings.
On March 27, 2020, President Trump signed into law the Coronavirus Aid, Relief and Economic Security Act (CARES Act). The CARES Act allows for the deferral of income and social security tax payments, a five-year carryback for net operating losses, changes to interest expense and business loss limitation rules, certain new tax credits, and certain new loans and grants to businesses. The Company has reviewed its income tax assumptions and projections in light of the CARES Act and has determined the CARES Act does not materially impact the Company’s income tax expense or projections. As of March 31, 2021, the Company has deferred certain payroll tax payments of $5.5 million as permitted by the CARES Act.
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Accumulated Other Comprehensive Income |
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| Accumulated Other Comprehensive Income [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accumulated Other Comprehensive Income |
The following table summarizes the changes in OCI during the three month periods ended March 31, 2021 and 2020:
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Commitments and Contingencies |
3 Months Ended | ||
|---|---|---|---|
Mar. 31, 2021 | |||
| Commitments and Contingencies [Abstract] | |||
| Commitments and Contingencies |
Agar v. Sensient Natural Ingredients LLC
On March 29, 2019, Calvin Agar (Agar), a former employee, filed a Class Action Complaint in Stanislaus County Superior Court against Sensient Natural Ingredients LLC (SNI). On May 22, 2019, Agar filed a First Amended Class Action Complaint against SNI (the Complaint). Agar alleges that SNI improperly reported overtime pay on employees’ wage statements, in violation of the California Labor Code. The Complaint alleges two causes of action, both of which concern the wage statements.
The Complaint does not allege that SNI failed to pay any overtime due to Agar or any of the putative class or group members. The Complaint merely challenges the manner in which SNI has reported overtime pay on its wage statements.
SNI maintains that it has accurately paid Agar and the putative class members for all overtime worked, and that they have not experienced any harm. SNI further maintains that the format of its wage statements does not violate the requirements of state law or any specific guidance from California decisional law, the California Division of Labor Standards Enforcement, or the California Labor Commissioner's Office. Finally, SNI contended that certain of the state law claims are subject to mandatory individual arbitration.
SNI filed its Answer and Affirmative Defenses to the Complaint on July 10, 2019. The parties participated in an early mediation in the case in December 2019, which was not successful. On March 17, 2020, the Court granted Agar leave to file a Second Amended Complaint, which removed the claim that SNI had asserted was subject to mandatory individual arbitration. SNI filed a Demurrer to the Second Amended Complaint, seeking dismissal of the remaining claim, on May 1, 2020. The Court overruled the Demurrer on September 1, 2020. SNI requested discretionary appellate review of this decision. The Court of Appeal of the State of California, Fifth Appellate District granted SNI’s application on February 19, 2021 and ordered briefing by the Parties. Discovery is currently stayed in the matter pending the outcome of appellate review. SNI continues to evaluate the developing legal authority on this issue. SNI intends to continue to vigorously defend its interests, absent a reasonable resolution.
Kelley v. Sensient Natural Ingredients LLC; Bryan v. Sensient Natural Ingredients LLC
On March 4, 2020, Monique Kelley filed a Class Action Complaint against SNI in Merced County Superior Court in California. Ms. Kelley worked at SNI for less than a week in 2017 through a temporary staffing company. Ms. Kelley has brought suit for purported violations of the California Labor Code and the California Business and Professions Code on her own behalf, and on behalf of all current and former California-based hourly-paid or non-exempt employees of SNI. Ms. Kelley specifically asserts claims for unpaid overtime wages, unpaid minimum wages, unpaid meal and rest break premiums, failure to timely pay final wages upon termination, non-compliant wage statements, and unreimbursed business expenses. SNI filed a Demurrer on May 21, 2020, seeking dismissal of the Complaint in its entirety on the grounds that it contains only boilerplate allegations that fail to state facts sufficient to constitute a cause of action, and it is otherwise uncertain, ambiguous, and unintelligible. SNI further sought dismissal of one cause of action based upon the statute of limitations. SNI simultaneously filed a Motion to Strike certain allegations in the Complaint as improperly pled. The Court sustained the Demurrer with leave to amend on August 25, 2020. The Court also granted the Motion to Strike. Ms. Kelley has amended her original pleading, asserting the same causes of action, to which SNI has filed a responsive pleading. The parties have begun discovery.
On June 15, 2020, the same law firm representing Ms. Kelley also filed notice with the State of California of the intent to pursue a claim on a representative basis pursuant to the California Private Attorneys General Act of 2004 (PAGA). This notice was served on behalf of Julie Bryan, who worked at SNI through a temporary staffing agency in early 2020. The notice states the intent to pursue relief on behalf of Ms. Bryan as well as other alleged aggrieved employees, identified as all current and former hourly or non-exempt employees of SNI, whether hired directly or through staffing agencies or labor contractors. The notice alleges that SNI failed to properly pay Ms. Bryan and the other alleged aggrieved employees for all hours worked, failed to properly provide or compensate minimum and overtime wages and for meal and rest breaks, failed to issue compliant wage statements, and failed to reimburse for all necessary business-related expenses, in violation of the California Labor Code and California Industrial Welfare Commission Orders. On August 19, 2020, Ms. Bryan filed a Complaint in Merced County Superior Court asserting the claims set forth in her PAGA notice. SNI has filed its Answer and Affirmative Defenses, and the parties have entered the discovery phase of the case. SNI intends to vigorously defend its interests in both of these matters, absent a reasonable resolution.
Other Claims
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.
See Note 2, Divestitures, for information about estimated environmental remediation costs associated with our Granada, Spain, location.
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Subsequent Events |
3 Months Ended | ||
|---|---|---|---|
Mar. 31, 2021 | |||
| Subsequent Events [Abstract] | |||
| Subsequent Events |
On April 1, 2021, the Company completed the sale of its fragrances product line. See Note 2, Divestitures, for additional information.
On April 22, 2021, the Company announced its quarterly dividend of $0.39 per share would be payable on June 1, 2021.
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Accounting Policies (Policies) |
3 Months Ended |
|---|---|
Mar. 31, 2021 | |
| Accounting Policies [Abstract] | |
| Recently Adopted/Issued Accounting Pronouncements |
Recently Adopted Accounting Pronouncements
In December 2019, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which clarifies and simplifies aspects of the accounting for income taxes. ASU 2019-12 is effective for public business entities beginning after December 15, 2020, and interim periods within those fiscal years. Early adoption is permitted. The Company adopted ASU 2019-12 on January 1, 2021, using retrospective, modified retrospective, or prospective basis for certain amendments. There was no impact to the consolidated financial statements.
Recently Issued Accounting Pronouncements
In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides temporary optional expedients and exceptions to US GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens of the expected market transition from LIBOR and other inter-bank offered rates to alternative rates. The guidance is effective upon issuance and generally can be applied through December 31, 2022. The Company is currently evaluating the potential impact of this standard on its consolidated financial statements and its related disclosures.
Please refer to the notes in the Company’s annual consolidated financial statements for the year ended December 31, 2020, for additional details of the Company’s financial condition and a description of the Company’s accounting policies, which have been continued without change.
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Divestitures (Tables) |
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| Divestitures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Assets and Liabilities Held for Sale |
The assets and liabilities related to the inks and fragrances (excluding its essential oils product line) product lines are recorded in Assets Held for Sale and Liabilities Held for Sale as of March 31, 2021, and December 31, 2020, as follows:
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| Divestiture and Other Related Costs |
The Company reports all costs associated with the divestitures in Corporate & Other. The following table summarizes the divestiture & other related costs for the three months ended March 31, 2021:
(1) Other costs – Selling and administrative expenses include environmental remediation, employee separation costs, professional services, accelerated depreciation, and other related costs.
The Company reports all costs associated with the divestitures in Corporate & Other. The following table summarizes the divestiture & other related costs for the three months ended March 31, 2020:
(1) Other costs – Selling and administrative expenses include employee separation costs, professional services, and other related costs.
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Operational Improvement Plan (Tables) |
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Mar. 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Operational Improvement Plan [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Operational Improvement Plan Costs by Segment |
The following table summarizes the Operational Improvement Plan expenses recorded in Selling and Administrative Expenses by segment for the three months ended March 31, 2021:
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Trade Accounts Receivable (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Trade Accounts Receivable [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Changes in Allowance for Doubtful Accounts |
The following table summarizes the changes in the allowance for doubtful accounts during the three month periods ended March 31, 2021 and 2020:
|
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Segment Information (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Segment Information [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Segment Information |
Operating results by segment for the periods presented are as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Product Information |
Product Lines
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Geographical Information |
Geographic Markets
|
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Retirement Plans (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 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:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accumulated Other Comprehensive Income [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Changes in OCI |
The following table summarizes the changes in OCI during the three month periods ended March 31, 2021 and 2020:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Operational Improvement Plan (Details) - USD ($) $ in Thousands |
3 Months Ended | |||
|---|---|---|---|---|
Mar. 31, 2021 |
Dec. 31, 2020 |
|||
| Restructuring Costs [Abstract] | ||||
| Accrued liabilities | $ 1,900 | $ 2,200 | ||
| Minimum [Member] | ||||
| Restructuring Costs [Abstract] | ||||
| Expected operational improvement cost | 5,000 | |||
| Maximum [Member] | ||||
| Restructuring Costs [Abstract] | ||||
| Expected operational improvement cost | 6,000 | |||
| Selling & Administrative Expenses [Member] | ||||
| Restructuring Costs [Abstract] | ||||
| Operational Improvement Plan costs | 1,001 | |||
| Employee Separation Costs [Member] | Selling & Administrative Expenses [Member] | ||||
| Restructuring Costs [Abstract] | ||||
| Operational Improvement Plan costs | (9) | |||
| Other Costs [Member] | Selling & Administrative Expenses [Member] | ||||
| Restructuring Costs [Abstract] | ||||
| Operational Improvement Plan costs | [1] | 1,010 | ||
| Flavors & Extracts [Member] | Selling & Administrative Expenses [Member] | ||||
| Restructuring Costs [Abstract] | ||||
| Operational Improvement Plan costs | (19) | |||
| Flavors & Extracts [Member] | Employee Separation Costs [Member] | Selling & Administrative Expenses [Member] | ||||
| Restructuring Costs [Abstract] | ||||
| Operational Improvement Plan costs | (19) | |||
| Flavors & Extracts [Member] | Other Costs [Member] | Selling & Administrative Expenses [Member] | ||||
| Restructuring Costs [Abstract] | ||||
| Operational Improvement Plan costs | [1] | 0 | ||
| Color [Member] | Selling & Administrative Expenses [Member] | ||||
| Restructuring Costs [Abstract] | ||||
| Operational Improvement Plan costs | 1,063 | |||
| Color [Member] | Employee Separation Costs [Member] | Selling & Administrative Expenses [Member] | ||||
| Restructuring Costs [Abstract] | ||||
| Operational Improvement Plan costs | 54 | |||
| Color [Member] | Other Costs [Member] | Selling & Administrative Expenses [Member] | ||||
| Restructuring Costs [Abstract] | ||||
| Operational Improvement Plan costs | [1] | 1,009 | ||
| Asia Pacific [Member] | Selling & Administrative Expenses [Member] | ||||
| Restructuring Costs [Abstract] | ||||
| Operational Improvement Plan costs | (43) | |||
| Asia Pacific [Member] | Employee Separation Costs [Member] | Selling & Administrative Expenses [Member] | ||||
| Restructuring Costs [Abstract] | ||||
| Operational Improvement Plan costs | (44) | |||
| Asia Pacific [Member] | Other Costs [Member] | Selling & Administrative Expenses [Member] | ||||
| Restructuring Costs [Abstract] | ||||
| Operational Improvement Plan costs | [1] | $ 1 | ||
| ||||
Trade Accounts Receivable (Details) $ in Thousands |
3 Months Ended | |
|---|---|---|
|
Mar. 31, 2021
USD ($)
Segment
|
Mar. 31, 2020
USD ($)
|
|
| Trade Accounts Receivable [Abstract] | ||
| Number of portfolio segments | Segment | 1 | |
| Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||
| Beginning balance | $ 3,891 | $ 6,913 |
| Provision for expected credit losses | 156 | 240 |
| Accounts written off | (353) | (336) |
| Translation and other activity | (80) | (643) |
| Ending balance | $ 3,614 | 7,027 |
| ASU 2016-13 [Member] | ||
| Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||
| Adoption of ASU 2016-13 | $ 853 | |
Inventories (Details) - USD ($) $ in Millions |
Mar. 31, 2021 |
Dec. 31, 2020 |
|---|---|---|
| Inventories [Abstract] | ||
| Inventories, including finished and in-process products | $ 242.6 | $ 268.1 |
| Raw materials and supplies | $ 107.7 | $ 113.2 |
Fair Value (Details) - Level 2 [Member] - USD ($) $ in Millions |
Mar. 31, 2021 |
Dec. 31, 2020 |
|---|---|---|
| Investments, Fair Value Disclosure [Abstract] | ||
| Forward exchange contract, Asset | $ 1.0 | $ 0.5 |
| Carrying Value [Member] | ||
| Investments, Fair Value Disclosure [Abstract] | ||
| Long term debt | 524.7 | 526.9 |
| Fair Value [Member] | ||
| Investments, Fair Value Disclosure [Abstract] | ||
| Long term debt | $ 549.3 | $ 556.1 |
Segment Information, Operating Results by Segment (Details) $ in Thousands |
3 Months Ended | |
|---|---|---|
|
Mar. 31, 2021
USD ($)
Segment
|
Mar. 31, 2020
USD ($)
|
|
| Segment Information [Abstract] | ||
| Number of reportable segments | Segment | 3 | |
| Revenue [Abstract] | ||
| Revenue | $ 359,702 | $ 350,677 |
| Operating income (loss) | 46,897 | 34,561 |
| Interest expense | 3,433 | 4,307 |
| Earnings (loss) before income taxes | 43,464 | 30,254 |
| Flavors & Extracts [Member] | ||
| Revenue [Abstract] | ||
| Revenue | 194,661 | 181,187 |
| Operating income (loss) | 27,018 | 20,871 |
| Interest expense | 0 | 0 |
| Earnings (loss) before income taxes | 27,018 | 20,871 |
| Color [Member] | ||
| Revenue [Abstract] | ||
| Revenue | 131,201 | 139,193 |
| Operating income (loss) | 26,594 | 29,664 |
| Interest expense | 0 | 0 |
| Earnings (loss) before income taxes | 26,594 | 29,664 |
| Asia Pacific [Member] | ||
| Revenue [Abstract] | ||
| Revenue | 33,840 | 30,297 |
| Operating income (loss) | 6,752 | 5,059 |
| Interest expense | 0 | 0 |
| Earnings (loss) before income taxes | 6,752 | 5,059 |
| Reportable Segments [Member] | ||
| Revenue [Abstract] | ||
| Revenue | 370,471 | 360,442 |
| Reportable Segments [Member] | Flavors & Extracts [Member] | ||
| Revenue [Abstract] | ||
| Revenue | 200,911 | 186,498 |
| Reportable Segments [Member] | Color [Member] | ||
| Revenue [Abstract] | ||
| Revenue | 135,720 | 143,495 |
| Reportable Segments [Member] | Asia Pacific [Member] | ||
| Revenue [Abstract] | ||
| Revenue | 33,840 | 30,449 |
| Intersegment Revenue [Member] | ||
| Revenue [Abstract] | ||
| Revenue | 10,769 | 9,765 |
| Intersegment Revenue [Member] | Flavors & Extracts [Member] | ||
| Revenue [Abstract] | ||
| Revenue | 6,250 | 5,311 |
| Intersegment Revenue [Member] | Color [Member] | ||
| Revenue [Abstract] | ||
| Revenue | 4,519 | 4,302 |
| Intersegment Revenue [Member] | Asia Pacific [Member] | ||
| Revenue [Abstract] | ||
| Revenue | 0 | 152 |
| Corporate & Other [Member] | ||
| Revenue [Abstract] | ||
| Revenue | 0 | 0 |
| Operating income (loss) | (13,467) | (21,033) |
| Interest expense | 3,433 | 4,307 |
| Earnings (loss) before income taxes | $ (16,900) | $ (25,340) |
Segment Information, Revenue from External Customers by Product Line (Details) - USD ($) $ in Thousands |
3 Months Ended | |
|---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
|
| Revenue [Abstract] | ||
| Revenue | $ 359,702 | $ 350,677 |
| Flavors, Extracts & Flavor Ingredients [Member] | ||
| Revenue [Abstract] | ||
| Revenue | 108,090 | 101,453 |
| Natural Ingredients [Member] | ||
| Revenue [Abstract] | ||
| Revenue | 62,204 | 57,600 |
| Fragrances [Member] | ||
| Revenue [Abstract] | ||
| Revenue | 28,467 | 22,284 |
| Yogurt Fruit Preparations [Member] | ||
| Revenue [Abstract] | ||
| Revenue | 2,150 | 5,161 |
| Food & Pharmaceutical Colors [Member] | ||
| Revenue [Abstract] | ||
| Revenue | 93,785 | 90,793 |
| Personal Care [Member] | ||
| Revenue [Abstract] | ||
| Revenue | 41,515 | 43,743 |
| Inks [Member] | ||
| Revenue [Abstract] | ||
| Revenue | 420 | 8,959 |
| Asia Pacific [Member] | ||
| Revenue [Abstract] | ||
| Revenue | 33,840 | 30,449 |
| Flavors & Extracts [Member] | ||
| Revenue [Abstract] | ||
| Revenue | 194,661 | 181,187 |
| Flavors & Extracts [Member] | Flavors, Extracts & Flavor Ingredients [Member] | ||
| Revenue [Abstract] | ||
| Revenue | 108,090 | 101,453 |
| Flavors & Extracts [Member] | Natural Ingredients [Member] | ||
| Revenue [Abstract] | ||
| Revenue | 62,204 | 57,600 |
| Flavors & Extracts [Member] | Fragrances [Member] | ||
| Revenue [Abstract] | ||
| Revenue | 28,467 | 22,284 |
| Flavors & Extracts [Member] | Yogurt Fruit Preparations [Member] | ||
| Revenue [Abstract] | ||
| Revenue | 2,150 | 5,161 |
| Color [Member] | ||
| Revenue [Abstract] | ||
| Revenue | 131,201 | 139,193 |
| Color [Member] | Food & Pharmaceutical Colors [Member] | ||
| Revenue [Abstract] | ||
| Revenue | 93,785 | 90,793 |
| Color [Member] | Personal Care [Member] | ||
| Revenue [Abstract] | ||
| Revenue | 41,515 | 43,743 |
| Color [Member] | Inks [Member] | ||
| Revenue [Abstract] | ||
| Revenue | 420 | 8,959 |
| Asia Pacific [Member] | ||
| Revenue [Abstract] | ||
| Revenue | 33,840 | 30,297 |
| Asia Pacific [Member] | Asia Pacific [Member] | ||
| Revenue [Abstract] | ||
| Revenue | 33,840 | 30,449 |
| Intersegment Revenue [Member] | ||
| Revenue [Abstract] | ||
| Revenue | 10,769 | 9,765 |
| Intersegment Revenue [Member] | Flavors & Extracts [Member] | ||
| Revenue [Abstract] | ||
| Revenue | 6,250 | 5,311 |
| Intersegment Revenue [Member] | Color [Member] | ||
| Revenue [Abstract] | ||
| Revenue | 4,519 | 4,302 |
| Intersegment Revenue [Member] | Asia Pacific [Member] | ||
| Revenue [Abstract] | ||
| Revenue | $ 0 | $ 152 |
Segment Information, Revenue from External Customers by Geographic Markets (Details) - USD ($) $ in Thousands |
3 Months Ended | |
|---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
|
| Revenue [Abstract] | ||
| Revenue | $ 359,702 | $ 350,677 |
| North America [Member] | ||
| Revenue [Abstract] | ||
| Revenue | 193,338 | 182,966 |
| Europe [Member] | ||
| Revenue [Abstract] | ||
| Revenue | 81,868 | 82,637 |
| Asia Pacific [Member] | ||
| Revenue [Abstract] | ||
| Revenue | 57,113 | 54,452 |
| Other [Member] | ||
| Revenue [Abstract] | ||
| Revenue | 27,383 | 30,622 |
| Flavors & Extracts [Member] | ||
| Revenue [Abstract] | ||
| Revenue | 194,661 | 181,187 |
| Color [Member] | ||
| Revenue [Abstract] | ||
| Revenue | 131,201 | 139,193 |
| Asia Pacific [Member] | ||
| Revenue [Abstract] | ||
| Revenue | 33,840 | 30,297 |
| Reportable Geographical Components [Member] | Flavors & Extracts [Member] | North America [Member] | ||
| Revenue [Abstract] | ||
| Revenue | 129,643 | 116,701 |
| Reportable Geographical Components [Member] | Flavors & Extracts [Member] | Europe [Member] | ||
| Revenue [Abstract] | ||
| Revenue | 44,568 | 43,877 |
| Reportable Geographical Components [Member] | Flavors & Extracts [Member] | Asia Pacific [Member] | ||
| Revenue [Abstract] | ||
| Revenue | 9,717 | 9,355 |
| Reportable Geographical Components [Member] | Flavors & Extracts [Member] | Other [Member] | ||
| Revenue [Abstract] | ||
| Revenue | 10,733 | 11,254 |
| Reportable Geographical Components [Member] | Color [Member] | North America [Member] | ||
| Revenue [Abstract] | ||
| Revenue | 63,670 | 66,265 |
| Reportable Geographical Components [Member] | Color [Member] | Europe [Member] | ||
| Revenue [Abstract] | ||
| Revenue | 37,278 | 38,738 |
| Reportable Geographical Components [Member] | Color [Member] | Asia Pacific [Member] | ||
| Revenue [Abstract] | ||
| Revenue | 14,838 | 15,975 |
| Reportable Geographical Components [Member] | Color [Member] | Other [Member] | ||
| Revenue [Abstract] | ||
| Revenue | 15,415 | 18,215 |
| Reportable Geographical Components [Member] | Asia Pacific [Member] | North America [Member] | ||
| Revenue [Abstract] | ||
| Revenue | 25 | 0 |
| Reportable Geographical Components [Member] | Asia Pacific [Member] | Europe [Member] | ||
| Revenue [Abstract] | ||
| Revenue | 22 | 22 |
| Reportable Geographical Components [Member] | Asia Pacific [Member] | Asia Pacific [Member] | ||
| Revenue [Abstract] | ||
| Revenue | 32,558 | 29,122 |
| Reportable Geographical Components [Member] | Asia Pacific [Member] | Other [Member] | ||
| Revenue [Abstract] | ||
| Revenue | $ 1,235 | $ 1,153 |
Retirement Plans (Details) - Defined Benefit Plan [Member] - USD ($) $ in Thousands |
3 Months Ended | |
|---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
|
| Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract] | ||
| Service cost | $ 436 | $ 400 |
| Interest cost | 212 | 256 |
| Expected return on plan assets | (184) | (209) |
| Recognized actuarial loss | 69 | 16 |
| Total defined benefit expense | $ 533 | $ 463 |
Derivative Instruments and Hedging Activity (Details) - USD ($) $ in Millions |
3 Months Ended | ||
|---|---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
Dec. 31, 2020 |
|
| Maximum [Member] | |||
| Derivative instruments and hedging activity for the period [Abstract] | |||
| Number of months for contracts to mature | 18 months | ||
| Forward Exchange Contracts [Member] | Cash Flow Hedges [Member] | |||
| Derivative instruments and hedging activity for the period [Abstract] | |||
| Derivative, fair value | $ 32.7 | $ 54.1 | |
| Foreign Currency Denominated Debt, Net Investment Hedging [Member] | |||
| Derivative instruments and hedging activity for the period [Abstract] | |||
| Carrying value of foreign denominated debt | 315.4 | $ 325.0 | |
| Impact of foreign exchange rates on debt instruments recorded in other comprehensive income | $ 9.6 | $ 8.4 | |
Income Taxes (Details) - USD ($) $ in Millions |
3 Months Ended | |
|---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
|
| Income Taxes [Abstract] | ||
| Effective income tax rates | 27.10% | 31.30% |
| Deferred payroll tax payments | $ 5.5 | |
Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands |
3 Months Ended | |||
|---|---|---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
|||
| AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
| Beginning balance | $ 934,336 | $ 881,589 | ||
| Other comprehensive loss before reclassifications | (14,903) | (44,790) | ||
| Amounts reclassified from OCI | (236) | 437 | ||
| Ending balance | 925,646 | 842,658 | ||
| Accumulated Other Comprehensive (Loss) Income [Member] | ||||
| AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
| Beginning balance | (159,091) | (163,008) | ||
| Ending balance | (174,230) | (207,361) | ||
| Cash Flow Hedges [Member] | ||||
| AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
| Beginning balance | [1] | 749 | (199) | |
| Other comprehensive loss before reclassifications | [1] | 720 | (1,865) | |
| Amounts reclassified from OCI | [1] | (289) | 429 | |
| Ending balance | [1] | 1,180 | (1,635) | |
| Pension Items [Member] | ||||
| AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
| Beginning balance | [1] | (1,965) | (672) | |
| Other comprehensive loss before reclassifications | [1] | 0 | 0 | |
| Amounts reclassified from OCI | [1] | 52 | 8 | |
| Ending balance | [1] | (1,913) | (664) | |
| Foreign Currency Items [Member] | ||||
| AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
| Beginning balance | (157,875) | (162,137) | ||
| Other comprehensive loss before reclassifications | (15,623) | (42,925) | ||
| Amounts reclassified from OCI | 1 | 0 | ||
| Ending balance | $ (173,497) | $ (205,062) | ||
| ||||
Subsequent Events (Details) - Subsequent Event [Member] |
Apr. 22, 2021
$ / shares
|
|---|---|
| Subsequent Events [Abstract] | |
| Dividend declared date | Apr. 22, 2021 |
| Dividend payable (in dollars per share) | $ 0.39 |
| Dividend payable date | Jun. 01, 2021 |