01—Abstract
Summary
Summary of the 10-K filed March 30, 1995. Cited figures are marked; the original filing is the authoritative source.
International Flavors & Fragrances Inc. reported 1994 net sales of $1.315 billiona, up $126,592,000 or 11% from 1993.
Fragrance sales were $772,786,000,b up 11%, and flavor sales were $542,451,000, up 11%. Operating profit rose 14% to $354,425,000, and net income increased 12% to $226,022,000, or $2.03 per share. The filing attributes the growth primarily to sales growth, and states that currency translation had virtually no effect on 1994 sales or operating profit.
Sales outside the United States were approximately 70% of the total. The balance sheet remained strong. Total assets were $1,399,725,000c and shareholders' equity was $1,008,079,000.
Cash, cash equivalents and short-term investments totaled $301,808,000,d and working capital was $704,763,000. Operating cash flow was $239,531,000. The company held $14,342,000 of long-term debt, compared with none at the end of 1993.
Management expects growth, capital spending and the share repurchase program to be funded from internal sources. Gross property additions were $103,019,000 in 1994 and are expected to approximate $105,000,000 in 1995. Shareholders received a dividend increase in January 1995 of 14.8%, to an annual rate of $1.24 per share, following increases of 8% in January 1994 and 10% in January 1993.
Research and development spending was $81,369,000 in 1994 and is expected to rise to approximately $92,000,000 in 1995. The company faces potentially responsible party claims at ten waste sites in New Jersey and Pennsylvania, but management states that the amounts it will probably pay will not be material, and that insurers share defense and indemnity costs up to an agreed amount.
02—Key points
Key Highlights
- Net sales rose 11% to $1,315,237,000 in 1994, with fragrance sales at $772,786,000 and flavor sales at $542,451,000.
- Operating profit increased 14% to $354,425,000, and net income rose 12% to $226,022,000, or $2.03 per share.
- Total assets reached $1,399,725,000, and shareholders' equity was $1,008,079,000 at December 31, 1994.
- Cash, cash equivalents and short-term investments totaled $301,808,000, and working capital was $704,763,000.
- The annual dividend rate was increased 14.8% to $1.24 per share in January 1995.
- Research and development spending was $81,369,000 in 1994, with approximately $92,000,000 expected in 1995.
- Ten waste site pollution claims in New Jersey and Pennsylvania are not expected to be material, given shared liability and insurer participation.
03—Questions
Frequently Asked Questions
How did the company's sales and earnings perform in 1994?
Net sales were $1,315,237,000, up $126,592,000 or 11% from 1993. Operating profit was $354,425,000, up 14%. Net income was $226,022,000, up 12%, or $2.03 per share. The filing states that currency translation had virtually no effect on 1994 sales or operating profit.
What is the company's financial position at year-end 1994?
Total assets were $1,399,725,000 and shareholders' equity was $1,008,079,000. Cash, cash equivalents and short-term investments totaled $301,808,000, and working capital was $704,763,000. Long-term debt was $14,342,000, compared with none in 1993. Operating cash flow was $239,531,000.
What are the company's dividend and share repurchase plans?
The annual cash dividend was increased 14.8% to $1.24 per share in January 1995. Dividends paid in 1994 totaled $120,520,000. The Board authorized repurchase of up to 7.5 million shares in September 1992, and about 4.9 million shares had been repurchased by December 31, 1994. The company expects these plans to be funded from internal sources.
What are the main environmental and legal exposures?
The company is named as a potentially responsible party at ten waste sites operated by third parties in New Jersey and Pennsylvania. Management believes the amounts it will probably pay will not be material to its financial condition, results of operations or liquidity, because other large parties are involved at most sites, payments will be spread over time, and three liability insurers share defense and indemnity costs up to an agreed amount. Environmental compliance spending was about $15,100,000 in operating expenses and $3,700,000 in capital projects in 1994.
What does the company expect for 1995 spending?
Gross additions to property, plant and equipment are expected to approximate $105,000,000 in 1995. Research and development expenditures are expected to increase to approximately $92,000,000. The company expects to spend approximately $3,900,000 in capital projects and $15,900,000 in operating expenses for environmental compliance.
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