Bush Boake Allen Reports Third Quarter Earnings of $.52 a Share.Business Editors MONTVALE, N.J.--(BUSINESS WIRE)--Oct. 25, 2000 Bush Boake Allen (NYSE NYSE See: New York Stock Exchange :BOA boa (bō`ə), name for live-bearing constrictor snakes of the family Boidae, found mostly in the Americas. This family, which also comprises the egg-laying pythons of the Old World, includes the largest of all snakes, as well as many smaller ) reported today that third quarter earnings increased 62% to $.52 a share (diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. ) compared to $.32 a share (diluted) earned in the third quarter of 1999. Net income for the third quarter amounted to $10.2 million and included a gain of $1.9 million or $.10 a share from the sale of surplus land and vacated buildings adjacent to the company's Walthamstow, England site. Income from company operations increased 27% to $14.3 million while net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight in the third quarter were $ 121.6 million compared to $ 122.1 million in the prior year. Net income was $ 10.2 million compared with $ 6.3 million in the third quarter of 1999. For the nine month period of 2000, Bush Boake Allen earned $1.20 a share (diluted) versus $.83 a share (diluted) for the same period of 1999. Income from company operations advanced 24% to $ 37.9 million while net sales were $362.6 million compared to $370.7 million in the prior year. Net income was $ 23.4 million compared to $16.1 million last year; an increase of 45%. "For the most part, market conditions during the third quarter reflected a continuation of conditions that were evident during the first half of the year, particularly in our aroma chemical aroma chemical, n an odorous chemical with useful properties that is also legal and safe to use as a flavor or fragrance. and European flavor and fragrance businesses," stated Julian W. Boyden, BBA's chairman, president and chief executive officer. For the Company, as a whole, flavor and fragrance sales increased 3%, 9% in local currencies, as strong growth in the Americas and International Regions more than offset market weaknesses and adverse foreign exchange rates in Europe and Asia Pacific. Aroma chemical sales declined 15%, largely due to lower volume and weaker pricing. However, a continuation of lower raw material costs and operating efficiencies more than offset the adverse effects of decreased volume and prices. In our aroma chemical business, prices are down from the prior year due to continued market pressure on terpene-based products, the strength of the pound versus the Euro, and increased volumes of Chinese materials becoming available in both domestic and export markets. While sales volumes declined approximately 12% from the third quarter of 1999, operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. increased by 36% as higher margins benefited from lower raw material costs and improved operating efficiencies at both of the Company's chemical manufacturing sites. In our flavor and fragrance business, Europe Region sales declined 9% mostly reflecting weakened weak·en tr. & intr.v. weak·ened, weak·en·ing, weak·ens To make or become weak or weaker. weak  en·er n. demand in the U.K. while all other
countries in the region, as a group, were down slightly. The strength of
the Pound Sterling has continued to bring significant pricing pressure
on BBA BBAabbr. Bachelor of Business Administration goods produced at the Company's main European manufacturing sites in the U.K., putting BBA at a competitive disadvantage to continental producers. In the Company's International Region, sales increased 6% with strong growth reported in Eastern Europe Eastern Europe The countries of eastern Europe, especially those that were allied with the USSR in the Warsaw Pact, which was established in 1955 and dissolved in 1991. , Turkey and Dubai. As a result, operating profits in the International Region increased by 42%. Sales in the Asia Pacific Region declined by 2% mainly due to currency and market weakness in Australia and lower fragrance sales in China resulting from a discontinued dis·con·tin·ue v. dis·con·tin·ued, dis·con·tin·u·ing, dis·con·tin·ues v.tr. 1. To stop doing or providing (something); end or abandon: customer product. However, strong growth was reported in Singapore, Thailand, Japan, Malaysia and the Philippines enabling the Region to report a double-digit increase in operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. . In the Americas Region, third quarter sales rose 13% benefiting from strong growth in U. S. flavors, fragrances and seasonings along with a 10% improvement in Latin America Latin America, the Spanish-speaking, Portuguese-speaking, and French-speaking countries (except Canada) of North America, South America, Central America, and the West Indies. . This overall increased sales performance generated a 35% increase in regional operating profits over the same period of a year ago. Summing up the third quarter, Mr. Boyden stated, "Although overall sales levels are disappointing, we are encouraged by the excellent growth in the Americas and International Regions along with several segments of the Asia Pacific Region which indicate that basic world-wide demand for our products remains fundamentally sound. "In addition," he added, "it is encouraging to see continued improvement in operating income and cash flow in many of our business units which are benefiting from the major capital investments made over the last several years." Bush Boake Allen Inc., which conducts operations on six continents Six Continents is a large retail PLC in UK which split into Six Continents Retail known as Mitchells and Butlers plc. The hotels and soft drinks business of Six Continents PLC is now known as InterContinental Hotels Group PLC. , has 60 locations in 38 countries worldwide. The company supplies flavors and fragrances to the world's leading consumer products companies for use in foods, beverages, soaps and detergents, cosmetics, toiletries toi·let·ry n. pl. toi·let·ries An article, such as toothpaste or a hairbrush, used in personal grooming or dressing. toiletries npl → artículos mpl de aseo (= , personal care items and related products. Its aroma chemicals, natural extracts and essential oils serve as raw materials for a wide range of compounded flavors and fragrances. As announced in a joint press release between International Flavors & Fragrances Inc. (IFF 1. (file format) IFF - Interchange File Format. 2. IFF - Identify friend or foe (radar). 3. (mathematics, logic) iff - if and only if, i.e. necessary and sufficient. ) and Bush Boake Allen Inc. (BBA), dated September 25, 2000, the Boards of Directors of both companies have approved a definitive merger agreement, under which IFF will acquire all the outstanding shares of BBA for $48.50 per share in cash. IFF anticipates completing this transaction in the fourth quarter of 2000. You are cordially invited to join a conference call today at 2:00 P.M. (ET) to review third quarter results. To participate in the call by phone within the U.S., please dial 800/289-0436. To join the call by phone outside the U.S., please dial 913/981-5507. You can listen to a taped playback of the conference call by dialing 719/457-0820 and entering the confirmation code, 680506. The replay will be available after 5:00 P.M. on October 25th through November 1st. A live audio-only broadcast of the call will also be available on Bush Boake Allen's web site at www.bushboakeallen.com. Statements in this press release, which are not historical, are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. that are subject to risks and uncertainties which could cause actual results to differ materially. Such risks and uncertainties with respect to Bush Boake Allen's business include general economic conditions, customers changing flavor and/or fragrance formulations, pricing, availability and capacity of both materials which are purchased and products which are sold, the effect of the transition to the Euro and political and economic uncertainties, currency fluctuations, devaluations and/or revaluations in the many countries in which the Company operates. The company assumes no duty to update any such forward-looking information.
BUSH BOAKE ALLEN INC.
Comparative Summary of Income (Unaudited)
Third Quarter Ended September 25, Percent
2000 1999 Change
-------------------------------- -------
(note 1)
Net Sales $121,648,000 $122,148,000 (0.4)%
Income from operations 14,342,000 11,335,000 26.5
Income before taxes 15,289,000 9,955,000 53.6
Net income $10,201,000 $6,291,000 62.2
Earnings per share:
- Basic $0.53(a) $0.33 60.6
- Diluted $0.52(a) $0.32 62.5
Weighted average
shares outstanding:
- Basic 19,341,508 19,297,469
- Diluted 19,708,599 19,388,582
Nine Months Ended September 25, Percent
2000 1999 Change
-------------------------------- -------
(Note 1)
Net Sales $362,554,000 $370,741,000 (2.2)%
Income from operations 37,904,000 30,485,000 24.3
Income before taxes 36,583,000 25,566,000 43.1
Net income $23,403,000 $16,078,000 45.6
Earnings per share:
- Basic $1.21(a) $0.83 45.8
- Diluted $1.20(a) $0.83 44.6
Weighted average
shares outstanding:
- Basic 19,322,738 19,293,875
- Diluted 19,534,994 19,396,729
(a) Includes a non-recurring net gain of $.10 per share from the sale of property in Walthamstow, U.K. The effective tax rate in the third quarter 2000 was 33.3%, reflecting the U.K. capital gains tax benefit on this transaction. Note (1): During the first quarter of 2000, the Company changed its method of accounting for its domestic aroma chemicals inventories from the last-in, first-out last-in, first-out n. A method of inventory accounting in which the most recently acquired items are assumed to have been the first sold. In a period of rising prices, this method yields a lower ending inventory, a higher cost of goods sold, a lower (LIFO (Last In-First Out) A queueing method in which the next item to be retrieved is the item most recently placed in the queue. Contrast with FIFO. LIFO - stack ) method to the first-in, first-out first-in, first-out n. A method of inventory accounting in which the oldest remaining items are assumed to have been the first sold. In a period of rising prices, this method yields a higher ending inventory, a lower cost of goods sold, a higher gross (FIFO (First In First Out) A storage method that retrieves the item stored for the longest time. Contrast with LIFO. See traffic engineering methods. FIFO - first-in first-out ) method. As required by generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting , the Company has retroactively ret·ro·ac·tive adj. Influencing or applying to a period prior to enactment: a retroactive pay increase. [French rétroactif, from Latin adjusted prior year financial statements for the change. The change in accounting had no material effect on net income for the third quarter and nine months ended September 25, 2000 and decreased net income by approximately $500,000 ($.02 per share) in the third quarter of 1999 and $1 million ($.05 per share) in the nine months ended September 25, 1999. |
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