Sensient Technologies Corporation Reports Results for the Third Quarter Ended September 30, 2013

  Sensient Technologies Corporation Reports Results for the Third Quarter
  Ended September 30, 2013

     Reported EPS of 63 Cents Includes Restructuring Costs of Nine Cents

     Adjusted EPS of 72 Cents is a 9% increase and a Third Quarter Record

      Cash Provided by Operations in the First Nine Months Increased 28%

Business Wire

MILWAUKEE -- October 17, 2013

Sensient Technologies Corporation (NYSE: SXT) reported diluted earnings per
share of 63 cents in the third quarter which includes restructuring costs of
nine cents per share. As adjusted, to remove the impact of the restructuring
costs, diluted earnings per share were 72 cents, a third quarter record and an
increase of 9.1% over the 66 cents reported in the comparable period last
year. Consolidated revenue was $372.0 million compared to $369.4 million in
the third quarter of 2012. Operating income was $48.8 million, as reported,
and included $6.6 million of pre-tax restructuring costs. Adjusted operating
income increased 9.2% to $55.4 million compared to $50.7 million reported in
last year’s third quarter. Foreign currency translation did not have a
significant impact on revenue or operating income in the third quarter.

Revenue was approximately $1.1 billion for the year to date periods in both
2013 and 2012. Diluted earnings per share, as reported, were $1.71, which
includes restructuring costs of 37 cents. As adjusted, to remove the impact of
the restructuring costs, diluted earnings per share were $2.08 compared to
$1.94 reported in the first nine months of last year. Foreign currency
translation did not have a significant impact on revenue or earnings per share
in the first nine months of this year.

Cash provided by operating activities in the third quarter of 2013 was $47.7
million, an increase of 11% from the $43.1 million reported in the third
quarter of 2012. For the first nine months of 2013 cash provided by operating
activities increased 28% to a record level of $117.8 million compared to $92.2
million in the first nine months of 2012.

Earlier this year, the Company announced that it was initiating a broad and
strategic restructuring plan. The plan includes relocating the Flavors &
Fragrances Group headquarters from Indianapolis to Chicago, which was
completed this quarter. The plan also included consolidating several operating
facilities throughout Europe and North America, and reducing the Company’s
global headcount. The plan is progressing as scheduled and within the
Company’s original cost estimates. The Company has included non-GAAP results
to remove the costs related to the restructuring plan and provide investors
with a view of operating performance excluding significant and non-recurring
items.

“The Company had an outstanding quarter,” said Kenneth P. Manning, Chairman
and CEO of Sensient Technologies Corporation. “We are encouraged by
opportunities in both the Color and Flavor businesses, and I am very
optimistic about the Company’s future.”

                               BUSINESS REVIEW

The Color Group reported revenue of $123.9 million in the third quarter of
2013, compared to $122.1 million reported in the comparable period last year.
Operating income increased 10.8% in the quarter to $26.8 million from $24.2
million in last year’s third quarter. The Color Group’s operating margin
increased 190 basis points to 21.7% in the third quarter, driven by strong
performances across the Group. The food, pharmaceuticals, cosmetics and
digital inks businesses all reported double digit operating income growth in
the quarter. Foreign currency translation impacted both revenue and operating
income by less than one percent in the quarter.

The Flavors & Fragrances Group reported quarterly revenue of $226.3 million
compared to the $224.7 million reported in the comparable period last year.
Operating income was $31.8 million in the third quarter of both years. The
impact of foreign currency translation was less than one percent for both
revenue and operating income.

The Corporate & Other segment, which includes the Company’s operations in Asia
Pacific and China, and the flavor businesses in Central and South America,
reported revenue of $37.6 million in the third quarter compared to $37.8
million in the comparable period last year. Revenue increased 3.3%, in local
currency, in the third quarter.

                                 2013 OUTLOOK

Sensient is maintaining its previous guidance for 2013 diluted earnings per
share, which is expected to be between $2.68 and $2.73, excluding the impact
of the restructuring charge.

                               CONFERENCE CALL

The Company will host a conference call to discuss its 2013 third quarter
financial results at 10:00 a.m. CDT on Friday, October 18, 2013. To make a
reservation for the conference call, please contact InterCall Teleconferencing
at (706) 645-6973 and refer to the Sensient Technologies Corporation
conference call.

A replay will be available beginning at 1:00 p.m. CDT on October 18, 2013,
through midnight on October 25, 2013, by calling (404) 537-3406 and referring
to conference identification number 73776066. A transcript of the call will
also be posted on the Company’s web site at www.sensient.com after the call
concludes.

This release contains forward-looking statements (as that term is defined in
the Private Securities Litigation Reform Act of 1995) that reflect
management’s current assumptions and estimates of future economic
circumstances, industry conditions, Company performance and financial results.
A variety of factors could cause the Company’s actual results and experience
to differ materially from the anticipated results, including, but not limited
to the factors noted in this press release and in the Management’s Discussion
and Analysis in our most recently filed annual report on Form 10-K for the
year ended December 31, 2012, and quarterly report on Form 10-Q for the
quarter ended June 30, 2013. The forward-looking statements in this press
release speak only as to the date of this release. Sensient Technologies
Corporation expressly disclaims any obligation or undertaking to release
publicly any updates or revisions to such statements to reflect any change in
its expectations upon which such statements are based.

                         ABOUT SENSIENT TECHNOLOGIES

Sensient Technologies Corporation is a leading global manufacturer and
marketer of colors, flavors and fragrances. Sensient employs advanced
technologies at facilities around the world to develop specialty food and
beverage systems, cosmetic and pharmaceutical systems, inkjet and specialty
inks and colors, and other specialty and fine chemicals. The Company’s
customers include major international manufacturers representing most of the
world’s best-known brands. Sensient is headquartered in Milwaukee, Wisconsin.

www.sensient.com




Sensient Technologies Corporation
(In thousands, except percentages and per share amounts)
                                                                              
                                                                                     
                                                                                     
Consolidated
Statements of    Three Months Ended September 30,        Nine Months Ended September 30,
Earnings
                                                                                     
                 2013        2012        % Change        2013          2012          %
                                                                                     Change
                                                                                     
Revenue          $ 371,993   $ 369,371      0.7     %    $ 1,116,439   $ 1,102,808   1.2   %
                                                                                     
Cost of            251,934     251,778      0.1     %      756,722       749,928     0.9   %
products sold
Selling and
administrative    71,269     66,892       6.5     %     225,911      201,392     12.2  %
expenses
                                                                                     
Operating          48,790      50,701       -3.8    %      133,806       151,488     -11.7 %
income
Interest          4,048      4,483                      12,317       13,236
expense
                                                                                     
Earnings
before income      44,742      46,218       -3.2    %      121,489       138,252     -12.1 %
taxes
Income taxes      13,217     13,342                     36,243       41,565
                                                                                     
Net earnings     $ 31,525    $ 32,876       -4.1    %    $ 85,246      $ 96,687      -11.8 %
                                                                                     
Earnings per
common share:
Basic            $ 0.63      $ 0.66         -4.5    %    $ 1.71        $ 1.95        -12.3 %
                                                                                     
Diluted          $ 0.63      $ 0.66         -4.5    %    $ 1.71        $ 1.94        -11.9 %
                                                                                     
Average common
shares
outstanding:
Basic             49,761     49,536       0.5     %     49,741       49,616      0.3   %
                                                                                     
Diluted           49,946     49,785       0.3     %     49,910       49,850      0.1   %
                                                                                     
                                                                                     
                                                                                     
Reconciliation of Non-GAAP Amounts
                                                                                     
The Company recorded restructuring costs of $6.6 million ($4.4 million after-tax or $0.09
per share) and $26.0 million ($18.5 million after-tax or $0.37 per share) for the three and
nine months ended September 30, 2013, respectively, related to the 2013 restructuring
program to relocate the Flavors & Fragrances Group headquarters to Chicago, as well as a
profit improvement plan across all segments of the Company.
                                                                                     
                                                                                     
                                                                                     
                             Three Months Ended September 30,
                                                                                     
                             Reported    Restructuring   Adjusted      Reported
                             2013        Impact          2013          2012          %
                                                                                     Change
                                                                                     
Revenue                      $ 371,993   $  -            $ 371,993     $ 369,371     0.7   %
                                                                                     
Cost of                        251,934      545            251,389       251,778     -0.2  %
products sold
Selling and
administrative                71,269      6,041        65,228       66,892      -2.5  %
expenses
                                                                                     
Operating                      48,790       (6,586  )      55,376        50,701      9.2   %
income
Interest                      4,048       -            4,048        4,483
expense
                                                                                     
Earnings
before income                  44,742       (6,586  )      51,328        46,218      11.1  %
taxes
Income taxes                  13,217      (2,206  )     15,423       13,342
                                                                                     
Net earnings                 $ 31,525    $  (4,380  )    $ 35,905      $ 32,876      9.2   %
                                                                                     
Earnings per
common share:
Basic                        $ 0.63      $  (0.09   )    $ 0.72        $ 0.66        9.1   %
                                                                                     
Diluted                      $ 0.63      $  (0.09   )    $ 0.72        $ 0.66        9.1   %
                                                                                     
Average common
shares
outstanding:
Basic                         49,761                     49,761       49,536      0.5   %
                                                                                     
Diluted                       49,946                     49,946       49,785      0.3   %
                                                                                           
                                                                                           
                                                                                           

Sensient Technologies Corporation
(In thousands, except percentages and per share amounts)
                                                                                        
Reconciliation
of Non-GAAP
Amounts
(continued)
                                                                                               
                               Nine Months Ended September 30,
                                                                                               
                               Reported        Restructuring   Adjusted        Reported
                               2013            Impact          2013            2012            %
                                                                                               Change
                                                                                               
Revenue                        $ 1,116,439     $  -            $ 1,116,439     $ 1,102,808     1.2   %
                                                                                               
Cost of                          756,722          1,417          755,305         749,928       0.7   %
products sold
Selling and
administrative                  225,911        24,584       201,327       201,392      0.0   %
expenses
                                                                                               
Operating                        133,806          (26,001  )     159,807         151,488       5.5   %
income
Interest                        12,317         -            12,317        13,236    
expense
                                                                                               
Earnings
before income                    121,489          (26,001  )     147,490         138,252       6.7   %
taxes
Income taxes                    36,243         (7,512   )    43,755        41,565    
                                                                                               
Net earnings                   $ 85,246       $  (18,489  )   $ 103,735      $ 96,687       7.3   %
                                                                                               
Earnings per
common share:
Basic                          $ 1.71         $  (0.38    )   $ 2.09         $ 1.95         7.2   %
                                                                                               
Diluted                        $ 1.71         $  (0.37    )   $ 2.08         $ 1.94         7.2   %
                                                                                               
Average common
shares
outstanding:
Basic                           49,741                        49,741        49,616       0.3   %
                                                                                               
Diluted                         49,910                        49,910        49,850       0.1   %
                                                                                               
The Company is presenting these non-GAAP amounts to provide investors with a view of operating
performance excluding the restructuring impact.
                                                                                               
                                                                                               
                                                                                               
                                                                                               
Results by       Three Months Ended September 30,              Nine Months Ended September 30,
Segment
                                                                                               
Revenue          2013          2012            % Change        2013            2012            %
                                                                                               Change
                                                                                               
                                                                                               
Flavors &        $ 226,270     $ 224,699          0.7      %   $ 671,229       $ 658,348       2.0   %
Fragrances
Color *            123,854       122,102          1.4      %     378,321         383,599       -1.4  %
Corporate &        37,579        37,809           -0.6     %     112,377         108,582       3.5   %
Other
Intersegment      (15,710 )    (15,239   )      3.1      %    (45,488   )    (47,721   )   -4.7  %
elimination
                                                                                               
Consolidated     $ 371,993    $ 369,371         0.7      %   $ 1,116,439    $ 1,102,808    1.2   %
                                                                                               
                                                                                               
                                                                                               
Operating
Income
                                                                                               
                                                                                               
Flavors &        $ 31,759      $ 31,810           -0.2     %   $ 93,240        $ 94,334        -1.2  %
Fragrances
Color *            26,833        24,211           10.8     %     80,516          76,547        5.2   %
Corporate &       (9,802  )    (5,320    )                    (39,950   )    (19,393   )
Other
                                                                                               
Consolidated     $ 48,790     $ 50,701          -3.8     %   $ 133,806      $ 151,488      -11.7 %
                                                                                               
Consolidated
Excluding        $ 55,376     $ 50,701          9.2      %   $ 159,807      $ 151,488      5.5   %
Restructuring
Charge
                                                                                               
* Beginning in the first quarter of 2013, the results of operations for the Company’s cosmetic and
pharmaceutical businesses in Asia Pacific and China, previously reported in the Corporate & Other
segment, are reported in the Color Group. Results for 2012 have been restated to reflect this change.




Sensient Technologies Corporation
(In thousands, except per share amounts)
                                                              
                                                                 
Consolidated Condensed Balance Sheets
September 30,                                    2013            2012
                                                                 
Current assets                                   $ 789,408       $ 750,358
Goodwill and intangibles (net)                     464,541         458,370
Property, plant and equipment (net)                547,467         488,707
Other assets                                      45,388        39,405    
                                                                 
Total Assets                                     $ 1,846,804    $ 1,736,840 
                                                                 
Current liabilities                              $ 240,179       $ 208,511
Long-term debt                                     334,852         328,837
Accrued employee and retiree benefits              43,222          56,420
Other liabilities                                  18,396          31,085
Shareholders' equity                              1,210,155     1,111,987 
                                                                 
Total Liabilities and Shareholders' Equity       $ 1,846,804    $ 1,736,840 
                                                                 
                                                                 
                                                                 
Consolidated Statements of Cash Flows
Three Months Ended September 30,                 2013            2012
                                                                 
Net cash provided by operating activities        $ 47,725       $ 43,093    
                                                                 
Cash flows from investing activities:
Acquisition of property, plant and equipment       (22,006   )     (19,753   )
Proceeds from sale of assets                       5,900           -
Other investing activity                          (33       )    (36       )
                                                                 
Net cash used in investing activities             (16,139   )    (19,789   )
                                                                 
Cash flows from financing activities:
Proceeds from additional borrowings                4,978           8,060
Debt payments                                      (27,238   )     (22,777   )
Dividends paid                                     (11,509   )     (10,941   )
Proceeds from options exercised and other         93            526       
                                                                 
Net cash used in financing activities             (33,676   )    (25,132   )
                                                                 
Effect of exchange rate changes on cash and       (320      )    2,113     
cash equivalents
                                                                 
Net (decrease) increase in cash and cash           (2,410    )     285
equivalents
Cash and cash equivalents at beginning of         26,665        12,055    
period
Cash and cash equivalents at end of period       $ 24,255       $ 12,340    
                                                                 
                                                                 
                                                                 
Supplemental Information
Three Months Ended September 30,                 2013            2012
                                                                 
Depreciation and amortization                    $ 13,158        $ 12,051
                                                                 
Dividends per share                              $ 0.23          $ 0.22

Contact:

Sensient Technologies Corporation
Dick Hobbs, (414) 347-3706
 
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