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