What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2022-08-02 compared with 2022-05-03 · 304 added, 184 removed, 277 unchanged (64% of the section changed)

1 unchanged sentence

SENSIENT TECHNOLOGIES CORPORATION

STATEMENTS OF EARNINGS

CONSOLIDATED STATEMENTS OF EARNINGS

(In thousands except per share amounts)

Ended March 31,

Ended June 30,

Cost of products sold

8 unchanged sentences

SENSIENT TECHNOLOGIES CORPORATION

CONSOLIDATED CONDENSED

STATEMENTS OF COMPREHENSIVE INCOME

CONSOLIDATED CONDENSED STATEMENTS OF

COMPREHEN SIVE INCOME

(In thousands)

Ended March 31,

Ended June 30,

Comprehensive income

36 unchanged sentences

(In thousands)

Ended March 31,

Ended June 30,

Cash flows from operating activities:

11 unchanged sentences

Other liabilities

Net cash (used in) provided by operating activities

Net cash provided by operating activities

Cash flows from investing activities:

1 unchanged sentence

Proceeds from sale of assets

Proceeds from divesture of businesses

Proceeds from divestiture of businesses

Other investing activities

Net cash used in investing activities

Net cash (used in) provided by investing activities

Cash flows from financing activities:

6 unchanged sentences

Effect of exchange rate changes on cash and cash equivalents

Net increase in cash and cash equivalents

Net (decrease) increase in cash and cash equivalents

Cash and cash equivalents at beginning of period

2 unchanged sentences

SENSIENT TECHNOLOGIES CORPORATION

STATEMENTS OF SHAREHOLDERS’ EQUITY

CONSOLIDATED STATEMENTS OF

SHAREHOLDERS’

(In thousands, except share and per share amounts)

Earnings Reinvested in the

Treasury Stock

Comprehensive

Ended March 31 , 2021

Three Months Ended June 30 , 2022

Income (Loss)

Balances at December 31, 2020

Balances at March 31, 2022

Other comprehensive loss

Cash dividends

paid – $ 0.39 per share

Cash dividends paid – $ 0.41 per share

Share-based compensation

Non-vested stock issued upon vesting

Benefit plans

Purchase of treasury stock

Balances at June 30 , 2022

Three Months Ended June 30 , 2021

Balances at March 31, 2021

Three Months Ended March 31 , 2022

Other comprehensive income

Cash dividends paid – $ 0.39 per share

Share-based compensation

Non-vested stock issued upon vesting

Purchase of treasury stock

Balances at June 30 , 2021

Six Months Ended June 30 , 2022

Balances at December 31 , 2021

Other comprehensive loss

Cash dividends

paid – $ 0.41 per share

Cash dividends paid – $ 0.82 per share

Share-based compensation

1 unchanged sentence

Benefit plans

Balances at March 31 , 2022

Balances at June 30 , 2022

Six Months Ended June 30 , 2021

Balances at December 31, 2020

Other comprehensive income

Cash dividends paid – $ 0.78 per share

Share-based compensation

Non-vested stock issued upon vesting

Benefit plans

Purchase of treasury stock

Balances at June 30 , 2021

See accompanying notes to consolidated condensed financial statements.

SENSIENT TECHNOLOGIES

TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

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, 2022, and the results of operations, comprehensive income, cash flows, and shareholders’ equity for the three months ended March 31, 2022 and 2021.

results of operations for any interim period are not necessarily indicative of the results to be expected for the full year.

2022, and the results of operations, comprehensive income, and shareholders’ equity for the three and six months ended June 30, 2022 and 2021, and cash flows for the six months ended June 30, 2022 and 2021.

The results of operations for any

interim period are not necessarily indicative of the results to be expected for the full year .

preparation of financial statements in conformity with U.S.

2 unchanged sentences

Expenses are charged to operations in the period incurred.

Certain prior period amounts disclosed have been reclassified to conform to the current period presentation.

Issued Accounting Pronouncements

10 unchanged sentences

On June 30, 2020, the Company completed the sale of its inks product line.

On September 18, 2020, the Company completed the sale of its yogurt fruit preparations product line.

This sale also included an earnout 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) for $ 36.3 million of net cash.

The Company reports all costs associated with the divestitures in Corporate & Other.

There were no

costs associated with the divestitures for the three months ended March 31, 2022.

The following table summarizes the divestiture & other related costs for the three months ended March 31, 2021:

(In thousands)

On September 18, 2020, the Company completed the sale of its

yogurt fruit preparations product line.

This sale also included an earnout 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) for $ 36.3 million of net cash.

The Company reports all costs associated with the

divestitures in Corporate & Other.

There were no costs associated with the divestitures for the three and six months ended

June 30, 2022.

The following table summarizes the divestiture & other related costs for the three months ended June 30, 2021:

Yogurt Fruit Preparations

Non-cash charges – Cost of

products sold

Non-cash impairment charges – Selling and administrative expenses

Non-cash charges – Cost of products sold

Reclassification of foreign currency translation and related items – Selling and administrative expenses

- Selling and administrative expenses (1)

Other costs – Selling and administrative expenses include employee separation costs,

professional services, accelerated depreciation, and other related costs.

T he following table

summarizes the divestiture & other related costs for the six months ended June 30, 2021 :

Yogurt Fruit Preparations

impairment charges – Selling and administrative expenses

charges – Cost of products sold

Reclassification

of foreign currency translation and related items – Selling and administrative expenses

Other costs -

Selling and administrative expenses (1)

Other costs – Selling and

administrative expenses (1)

costs – Selling and administrative expenses include environmental remediation, employee separation costs, professional services, accelerated depreciation, and other related costs.

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.

upon an environmental investigation and a quantitative risk assessment performed by a consultant hired by the Company, the Company recorded $ 0.3

million related to these obligations in Selling and Administrative Expenses during the three months ended March 31, 2021.

administrative expenses include environmental remediation, employee separation costs, professional services, accelerated depreciation, and other related costs.

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.

Based upon an environmental investigation and a quantitative risk assessment performed by a consultant hired by the Company, the Company recorded $ 0.3 million related to these obligations in Selling and Administrative Expenses during the six months ended June 30, 2021.

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 combined 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 centralized certain Flavors & Extracts segment support functions in Europe into one

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 combined 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 centralized 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 and income

associated with the Operational Improvement Plan in Corporate & Other.

There were no costs associated with the Operational

Improvement Plan for the three months ended March 31, 2022.

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:

Company reports all costs and income associated with the Operational Improvement Plan in Corporate & Other.

There were no

costs associated with the Operational Improvement Plan for the three and six months ended June 30, 2022.

following table summarizes the Operational Improvement Plan expenses recorded in Selling and Administrative Expenses by segment for the three months ended June 30, 2021:

(In thousands)

Flavors & Extracts

Employee separation costs

Other income (1)

Other costs (2)

Total expense (income)

Other income includes cash received for the early termination of a lease less associated expenses.

Other costs include professional services, accelerated depreciation, and other related costs.

As of March 31, 2022 and December 31 2021, accrued liabilities in Other Accrued Expenses totaled $ 0.5

million and $ 0.8 million, respectively, related to the Operational Improvement Plan.

The following table summarizes the Operational

Improvement Plan expenses recorded in Selling and Administrative Expenses by segment for the six months ended June 30, 2021:

(In thousands)

Flavors & Extracts

Employee separation costs

Other income (1)

Other costs (2)

Total expense (income)

Other income includes cash received for the early termination of a lease less associated expenses.

Other costs include professional services, accelerated depreciation, and other related costs.

As of June 30, 2022 and December 31 2021, accrued liabilities in Other Accrued Expenses totaled $ 0.4 million and $ 0.8 million,

respectively, related to the Operational Improvement Plan .

On July 15, 2021, the Company acquired substantially all of the assets of Flavor Solutions, Inc.

15 unchanged sentences

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.

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, 2022 and 2021:

Three Months Ended March 31, 2022

the allowance for doubtful accounts during the three and six month periods ended June 30, 2022 and 2021:

(In thousands)

Three Months Ended June 30, 2022

Allowance for

Doubtful Accounts

Balance at December 31, 2021

Provision for expected credit losses

Accounts written off

Translation and other activity

Balance at March 31, 2022

Three Months Ended March 31, 2021

March 31, 2022

Provision for

expected credit losses

Translation and

other activity

Balance at June

(In thousands)

Three Months Ended June 30, 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

At March 31, 2022, and December 31, 2021, inventories included finished and in-process products totaling $ 279.4

Provision for

expected credit losses

Translation and

other activity

Balance at June

(In thousands)

Months Ended June 30, 2022

Allowance for

Doubtful Accounts

December 31, 2021

Provision for

expected credit losses

Translation and

other activity

Balance at June

(In thousands)

Months Ended June 30, 2021

Allowance for

Doubtful Accounts

December 31, 2020

Provision for

expected credit losses

Translation and

other activity

Balance at June

At June 30, 2022, and December 31, 2021, inventories included finished and in-process products totaling $ 294.4

million and $ 280.2 million, respectively, and raw materials and supplies of $ 157.7 million and $ 131.4 million, respectively.

1 unchanged sentence

measurements.

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, 2022 and

December 31, 2021.

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 $ 0.3 million and $ 0.1 million as of March 31, 2022 and December 31, 2021,

2021, respectively.

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

The carrying value of the long-term debt at March 31, 2022 and December 31, 2021, was $ 530.5 million and $ 503.5 million, respectively.

The fair value of the long-term debt at March 31, 2022 and December 31, 2021, was $ 537.2 million and $ 520.0 million, respectively.

The carrying value of the long-term debt at June 30, 2022 and December 31, 2021, was $ 499.2 million and $ 503.5 million, respectively.

The fair value of the long-term debt at June 30, 2022 and December 31, 2021, was $ 497.9 million and $ 520.0 million, respectively.

Segment Information

9 unchanged sentences

The Company’s Flavors & Extracts segment produces flavor,

extracts and essential oils products that impart a desired taste, texture, aroma, and/or other characteristics to a broad range of consumer and other products.

The Color segment produces natural and synthetic color systems for use in foods,

beverages, pharmaceuticals, and nutraceuticals;

extracts and essential oils products that impart a desired taste, texture, aroma, and other characteristics to a broad range of consumer and other products.

The Color segment produces natural and synthetic color systems for use in foods, beverages,

pharmaceuticals, and nutraceuticals;

colors and other ingredients for cosmetics, such as active ingredients, solubilizers, and surface treated pigments;

pharmaceutical and nutraceutical excipients, such as colors, flavors, coatings, and

nutraceutical ingredients;

pharmaceutical and nutraceutical excipients, such as colors, flavors, coatings, and nutraceutical

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.

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, 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.

There were no divestiture & other related costs or Operational Improvement Plan costs for the three months ended March 31, 2022.

In addition, the Company’s corporate expenses and

share-based compensation are included in Corporate & Other.

restructuring and other costs, including the Operational Improvement Plan costs, for the three and six months ended June 30, 2021, 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.

There were no divestiture & other related costs or Operational Improvement Plan costs for

the three and six months ended June 30, 2022.

In addition, the Company’s corporate expenses and share-based compensation are included in Corporate & Other.

Operating results by segment for the periods

1 unchanged sentence

(In thousands)

Flavors & Extracts

Three months ended March 31 , 2022 :

Three months ended June 30 , 2022 :

external customers

3 unchanged sentences

before income taxes

Three months ended March 31 , 2021 :

Three months ended June 30 , 2021 :

external customers

3 unchanged sentences

before income taxes

(In thousands)

Six months ended June 30 ,

external customers

Total revenue

income (loss)

Earnings (loss)

before income taxes

Six months ended June 30 ,

external customers

Total revenue

income (loss)

Earnings (loss)

before income taxes

Product Lines

(In thousands)

Flavors & Extracts

ended March 31 , 2022 :

Three months ended June 30 , 2022 :

Extracts & Flavor Ingredients

3 unchanged sentences

from external customers

ended March 31 , 2021 :

Three months ended June 30 , 2021 :

Extracts & Flavor Ingredients

3 unchanged sentences

from external customers

(In thousands)

Six months ended June 30 ,

Extracts & Flavor Ingredients

Pharmaceutical Colors

Personal Care

Total revenue

from external customers

Six months ended June 30, 2021:

Extracts & Flavor Ingredients

Pharmaceutical Colors

Personal Care

Total revenue

from external customers

Geographic Markets

(In thousands)

Flavors & Extracts

Three months ended March 31 , 2022 :

Three months ended June 30 , 2022 :

North America

1 unchanged sentence

from external customers

Three months ended March 31 , 2021 :

Three months ended June 30 , 2021 :

North America

1 unchanged sentence

from external customers

(In thousands)

Six months ended June 30 ,

North America

Total revenue

from external customers

Six months ended June 30 ,

North America

Total revenue

from external customers

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 components of annual benefit cost for the defined benefit plans for

the periods presented are as follows:

Three Months Ended

Six Months Ended

(In thousands)

3 unchanged sentences

Total defined benefit expense

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.

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.

Derivative Instruments and Hedging

5 unchanged sentences

The Company had $ 37.0 million and $ 48.6 million of forward

exchange contracts designated as cash flow hedges outstanding as of March 31, 2022 and December 31, 2021, respectively.

For the three months ended March 31, 2022 and 2021 , 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.

exchange contracts designated as cash flow hedges outstanding as of June 30, 2022 and December 31, 2021, respectively.

For the three and six months ended June 30, 2022 , 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.

For the three and six months ended June 30, 2021, gains of $ 0.5 million and $ 0.8 million, respectively, were reclassified into net earnings in the Company’s Consolidated Statement of Earnings that offset the underlying

transactions’ impact on earnings in the same period.

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

The results of these transactions were not material to the financial statements of the

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, 2022 and December 31, 2021 , the total value of the

As of June 30, 2022 and December 31, 2021 , the total value of the

Company’s net investment hedges was $ 265.4 million and $ 289.5 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, 2022 and 2021, the impact of foreign exchange rates on these debt instruments decreased debt by $ 7.9 million and $ 9.6 million, respectively, which has been recorded as foreign currency

translation in OCI.

The effective income tax ra tes for the three months ended March 31, 2022

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 June 30, 2022 and 2021, the impact of foreign exchange rates on these debt instruments decreased debt by $ 16.2 million and increased debt by $ 2.7 million, respectively, which has

been recorded as foreign currency translation in OCI.

For the six months ended June 30, 2022 and 2021, the impact of foreign exchange rates on these debt instruments decreased debt by $ 24.1 million and $ 6.9 million, respectively, which has been

recorded as foreign currency translation in OCI.

For the three and six months ended June 30, 2021, losses of $ 4.2 million were reclassified into net earnings in the Company’s

Consolidated Statement of Earnings related to the Euro net investment hedge in connection with the sale of the fragrances product line.

See Note 2, Divestitures , for additional information.

The effective income tax ra tes for the three months ended June 30, 2022

and 2021 were 25.9 % and 20.0 %,

respectively.

The effective tax rates for the three months ended March 31, 2022 and 2021 were both impacted by changes in estimates associated with the finalization of prior year foreign tax items and the mix of foreign earnings.

For the six months ended June 30, 2022 and 2021, the effective income tax rates were 25.7 % and 24.1 %, respectively.

The effective tax rates for the three and six months ended June 30, 2022 and 2021 were both impacted by changes in estimates

associated with the finalization of prior year foreign tax items and the mix of foreign earnings.

The three and six months ended June 30, 2021 were also impacted by changes in valuation allowances and an audit settlement.

Accumulated Other Comprehensive Income

The following table summarizes the changes in OCI during the three month periods ended

March 31, 2022 and 2021:

The following table summarizes the changes in OCI during the three

and six month periods ended June 30, 2022 and 2021:

(In thousands)

Pension Items (1)

Balances at December 31, 2021

Other comprehensive income (loss) before

reclassifications

Other comprehensive income (loss)

before reclassifications

Amounts reclassified from OCI

Balances at June 30 , 2022

(In thousands)

Balances at March 31, 2022

Other comprehensive loss before

reclassifications

Amounts reclassified from OCI

Balances at June 30 , 2022

(In thousands)

Pension Items (1)

Balances at December 31, 2020

Other comprehensive income (loss) before

reclassifications

Other comprehensive income (loss)

before reclassifications

Amounts reclassified from OCI

Balances at June 30 , 2021

Balances at March 31, 2021

Other comprehensive income before

reclassifications

Amounts reclassified from OCI

Balances at June 30 , 2021

Cash Flow Hedges and Pension Items are net of tax.

1 unchanged sentence

Sensient Natural Ingredients LLC

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

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.

16 unchanged sentences

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.

Oral argument was held on

April 5, 2022.

On April 18, 2022, the Court of Appeal ruled that a peremptory writ of mandate should be issued directing the trial court to set aside its prior order overruling SNI’s Demurrer to the complaint and to enter an order sustaining SNI’s

Demurrer without leave to amend, which has the effect of dismissing Agar’s complaint against SNI.

The Court of Appeal’s decision becomes final thirty days

after issuance.

Agar has ten days from the date that the Court of Appeal’s decision becomes final to file a petition for review with the

California Supreme Court.

Oral argument was held

on April 5, 2022.

SNI’s Demurrer without leave to amend, which has the effect of dismissing Agar’s complaint against SNI.

Agar did not file a petition for review with the California Supreme Court, and therefore, the Court of Appeal’s decision was considered final as

of June 20, 2022.

Sensient Natural Ingredients LLC;

Sensient Natural Ingredients LLC

4, 2020, Monique Kelley filed a Class Action Complaint against SNI in Merced County Superior Court in California.

March 4, 2020, Monique Kelley filed a Class Action Complaint against SNI in Merced County Superior Court in California.

Kelley worked at SNI for less than a week in 2017 through a temporary staffing company.

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.

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.

sought dismissal of one cause of action based upon the statute of limitations.

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.

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,

The Court sustained the Demurrer with

leave to amend on August 25, 2020.

The Court also granted the Motion to Strike.

1 unchanged sentence

The parties have begun discovery.

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 filed its Answer and Affirmative Defenses, and the

parties entered the discovery phase of the case.

On May 20, 2021, however, Ms.

Bryan filed a Request for Dismissal of her action, without prejudice.

26, 2021, prior to the filing of the above-referenced Notice of Dismissal, the same law firm filed an additional notice with the State of California of the intent to pursue a claim on a representative basis pursuant to PAGA.

This notice was served on

behalf of Patrick Walters, an employee of SNI.

April 26, 2021, the same law firm representing Ms.

Kelley filed an additional notice with the State of California of the intent to pursue a claim on a representative basis pursuant to PAGA.

This notice was served on behalf of Patrick Walters, an

employee of SNI.

The notice states the intent to pursue relief on behalf of Mr.

Walters 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.

Walters 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.

The notice alleges that SNI failed to properly pay Mr.

Walters 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.

Walters 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 July 30, 2021, Mr.

Walters filed a Complaint in Merced County Superior Court asserting the claims set forth in his PAGA notice.

Walters filed a

Complaint in Merced County Superior Court asserting the claims set forth in his PAGA notice.

SNI filed its Answer and Affirmative Defenses in response.

Kelley and Mr.

Walters have agreed to attempt a joint mediation with Ms.

Rodriguez (see case description below), which is scheduled for August 2022.

Walters agreed to attempt a joint mediation with Ms.

Sofia Rodriguez (see

case description below), which was scheduled for August 2022.

15, 2022, the United States Supreme Court issued its decision in Viking River Cruises, Inc.

Moriana , 596 U.S.

___ (2022), in which the Court ruled that the Federal Arbitration Act requires enforcement of

an arbitration agreement that waives an employee’s right to bring individual claims under PAGA, and that an individual with such an agreement to arbitrate cannot bring representative claims on behalf of others.

SNI has asserted in its Answer an

affirmative defense based upon the existence of an arbitration agreement between Walters and SNI requiring individual arbitration as the exclusive remedy for his claims.

SNI withdrew its agreement to participate in the joint mediation in August

2022, based upon the changed legal landscape post- Viking River Cruises .

SNI also has demanded that Walters submit his individual PAGA claims to arbitration in

accordance with his arbitration agreement.

SNI intends to vigorously defend its interests in both the Kelley and Walters matters, absent a reasonable resolution.

2 unchanged sentences

The notice was served on behalf of Ms.

Rodriguez, who worked at SNI through One Source Staffing Solutions,

Rodriguez, who worked at SNI through One Source Staffing

Solutions, Inc.

for five months in 2020.

The notice states the intent to pursue relief on behalf of Ms.

Rodriguez as well as other alleged aggrieved

employees, identified as all non-exempt employees who worked for Defendants in the State of California, and who were paid on an hourly basis.

Rodriguez as well as other

alleged aggrieved employees, identified as all non-exempt employees who worked for Defendants in the State of California, and who were paid on an hourly basis.

The notice alleges that SNI failed to allow Ms.

Rodriguez and the other alleged aggrieved employees to take

statutorily required meal and rest periods.

Rodriguez and the other alleged

aggrieved employees to take statutorily required meal and rest periods.

The notice further alleges that Defendants suffered and permitted Ms.

Rodriguez and other alleged aggrieved employees to work off the clock, failed to pay for all hours worked, failed to properly provide or

compensate for minimum and overtime wages, failed to issue compliant wage statements, and failed to pay wages owed upon termination of employment, in violation of the California Labor Code.

Rodriguez also asserts that she was taken off the

schedule and not returned to work after complaining about the alleged wage and hour violations set forth in the PAGA notice.

Rodriguez and other alleged aggrieved employees to work off the clock, failed to pay for all hours worked,

failed to properly provide or compensate for minimum and overtime wages, failed to issue compliant wage statements, and failed to pay wages owed upon termination of employment, in violation of the California Labor Code.

Rodriguez also asserts

that she was taken off the schedule and not returned to work after complaining about the alleged wage and hour violations set forth in the PAGA notice.

On August 17, 2021, Ms.

Rodriguez filed a Complaint in Stanislaus County Superior Court asserting the claims set forth in her

Rodriguez filed a Complaint in Stanislaus County Superior Court

asserting the claims set forth in her PAGA notice.

SNI filed its Answer and Affirmative Defenses in response.

Rodriguez has agreed to attempt a joint mediation with Ms.

Rodriguez agreed to attempt a joint mediation with Ms.

Monique Kelley and Mr.

Patrick Walters (see case descriptions above), which is scheduled for August 2022.

intends to vigorously defend its interests in the Rodriguez matter, absent a reasonable resolution.

Patrick Walters (see case descriptions above), which was

scheduled for August 2022.

SNI withdrew its agreement to a joint mediation following the issuance of the decision in Viking River Cruises, Inc.

SNI intends to vigorously defend its interests in the

Rodriguez matter, absent a reasonable resolution.

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.

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

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.

2, Divestitures, for information about estimated environmental remediation costs associated with our Granada, Spain, location.

Note 2, Divestitures, for information about estimated environmental remediation costs associated with our Granada, Spain location.

Subsequent Event

On April 28, 2022 , the Company announced its quarterly dividend of $ 0.41 per share would be payable on June 1, 2022 .

On July 21, 2022 , the Company announced its quarterly dividend of $ 0.41 per share would be payable on September 1, 2022 .

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements