Financial Performance - Net sales for the three months ended August 31, 2022, were $1,595.6 million, an increase of 3.4% compared to $1,549.4 million in the same period of 2021[11] - Gross profit for the nine months ended August 31, 2022, was $1,650.1 million, down 7.9% from $1,791.7 million in the prior year[11] - Operating income for the three months ended August 31, 2022, was $235.2 million, a decrease of 11.3% from $265.2 million in the same period of 2021[11] - Net income for the nine months ended August 31, 2022, was $496.3 million, down 11.0% from $557.9 million in the same period of 2021[11] - Earnings per share (diluted) for the three months ended August 31, 2022, were $0.82, compared to $0.79 in the same period of 2021, reflecting a 3.8% increase[11] - For the nine months ended August 31, 2022, net sales totaled $4,654.8 million, an increase from $4,587.6 million in the same period of 2021, reflecting a growth of 1.5%[87] - Operating income for the nine months ended August 31, 2022, was $599.3 million, down from $738.9 million in the same period of 2021, a decrease of 18.9%[88] Dividends and Shareholder Equity - Cash dividends declared per share for the nine months ended August 31, 2022, were $0.74, an increase from $0.68 in the same period of 2021[11] - Dividends paid during the three months ended August 31, 2022, totaled $99.2 million, an increase from $90.9 million in the same period of 2021[20] - The total shareholders' equity as of August 31, 2022, was $4,606.7 million, a slight decrease from $4,615.1 million at the end of May 2022[20] Assets and Liabilities - Total assets as of August 31, 2022, were $12,941.0 million, slightly up from $12,905.8 million as of November 30, 2021[15] - Total liabilities as of August 31, 2022, were $8,334.3 million, down from $8,480.3 million as of November 30, 2021[15] Cash Flow and Operating Activities - Net cash flow provided by operating activities for the nine months ended August 31, 2022, was $250.1 million, a decrease from $372.9 million in the same period of 2021[19] Special Charges and Expenses - Special charges for the three months ended August 31, 2022, amounted to $3.4 million, down from $5.8 million in the same period of 2021[32] - For the nine months ended August 31, 2022, McCormick recorded net special charges of $38.0 million, significantly higher than $20.6 million for the same period in 2021[33] - The company recognized $23.0 million in special charges related to the exit of its consumer business in Russia during the nine months ended August 31, 2022[33] - For the nine months ended August 31, 2022, the company recorded $12.5 million in severance and related benefits costs, $3.3 million in accelerated depreciation, and $2.6 million in third-party expenses[36] Income and Comprehensive Income - The company reported a comprehensive income of $335.7 million for the nine months ended August 31, 2022, compared to $595.8 million in the same period of 2021[13] - The company reported a comprehensive income of $88.0 million for the three months ended August 31, 2022, compared to $140.2 million in the same period of 2021[13] - McCormick's total comprehensive loss for the three months ended August 31, 2022, was $(136.4) million, compared to a loss of $(72.9) million in the same period of 2021[20] Segment Performance - The consumer segment generated net sales of $927.9 million for the three months ended August 31, 2022, compared to $921.9 million in the same period of 2021, indicating a slight increase[87] - The flavor solutions segment reported net sales of $667.7 million for the three months ended August 31, 2022, up from $627.5 million in the same period of 2021, representing a growth of 6.4%[87] - The Americas region accounted for $1,141.7 million in net sales for the three months ended August 31, 2022, compared to $1,084.5 million in the same period of 2021[88] Debt and Financing - A new $500 million revolving credit facility was entered into, with a current pricing of SOFR + 1.23%[44] - The company repaid $750 million in notes due in August 2022, with an interest rate of 2.70%[45] - The carrying amount of long-term debt as of August 31, 2022, was $3,925.4 million, with a total fair value of $3,675.1 million[61] Stock-Based Compensation - Stock-based compensation for the three months ended August 31, 2022, was $12.2 million, compared to $11.6 million in the same period of 2021[20] - Stock-based compensation expense for the three months ended August 31, 2022, was $12.2 million, compared to $11.6 million in 2021, while for the nine months, it was $49.1 million versus $54.2 million in 2021[67] - The intrinsic value of all options outstanding as of August 31, 2022, was $95.9 million, with $93.4 million for options currently exercisable; total intrinsic value of options exercised during the nine months was $40.2 million in 2022 compared to $7.3 million in 2021[68] Taxation - Income tax expense for the three months ended August 31, 2022, included $3.8 million of net discrete tax expense, primarily due to an $11.6 million tax expense related to the sale of a business[70] - For the nine months ended August 31, 2022, the income tax expense included $15.5 million of net discrete tax benefits, with $9.0 million associated with excess tax benefits from stock-based compensation[71] Foreign Currency and Hedging - The company recorded a gain of $3.6 million from foreign exchange contracts in the three months ended August 31, 2022[54] - For the three months ended August 31, 2022, the total gain from cash flow hedges was $4.6 million, compared to $1.5 million in the same period of 2021, reflecting a significant increase[55] - The company reported a tax effect of $4.9 million on cash flow hedges for the three months ended August 31, 2022, resulting in a net after-tax amount of $(14.6) million[80]
McCormick(MKC_V) - 2022 Q3 - Quarterly Report