Sensient Technologies Corporation Reports Results for the Quarter Ended June 30, 2014

  Sensient Technologies Corporation Reports Results for the Quarter Ended June
  30, 2014

        Adjusted EPS Increased 9.5% to 81 Cents in the Second Quarter

    Reported EPS of 59 Cents Includes $13.0 Million of Restructuring Costs

   Flavors & Fragrances Operating Margin Improves 140 Basis Points to 15.5%

       Cash Flows from Operations Increased 11.6% in the Second Quarter

Business Wire

MILWAUKEE -- July 24, 2014

Sensient Technologies Corporation (NYSE: SXT) reported second quarter adjusted
earnings per share of 81 cents, an increase of 9.5% over last year’s adjusted
earnings per share of 74 cents. Consolidated revenue was $374.7 million and
$378.8 million in the second quarters of 2014 and 2013, respectively. Adjusted
operating income increased by 10.6%, to $61.2 million, compared to $55.3
million of adjusted operating income reported in the second quarter of 2013.
Sensient’s adjusted operating margin increased 170 basis points to 16.3% in
the second quarter. The adjusted results eliminate the impact of the 2014 and
2013 restructuring and other costs, which are discussed in more detail below.
As reported, diluted earnings per share were 59 cents and 65 cents in the
second quarters of 2014 and 2013, respectively. Reported operating income was
$48.2 million in this year’s second quarter compared to $48.7 million in last
year’s second quarter. Operating income was reduced by restructuring and other
costs of $13.0 million and $6.6 million, in the second quarters of 2014 and
2013, respectively. As reported, operating margins were 12.9% in the second
quarters of both 2014 and 2013. Foreign currency translation did not have a
significant effect on either revenue or operating income in the quarter.

For the six months ended June 30, 2014, adjusted earnings per share were $1.52
compared to $1.36 in the first half of last year, an increase of 11.8%.
Consolidated revenue was $742.8 million and $744.4 million for the first six
months of 2014 and 2013, respectively. Adjusted operating income was $115.5
million in the first six months of 2014, an increase of 10.6% over the
adjusted operating income of $104.4 million in the first six months of last
year. As reported, earnings per share were $0.55 and $1.08 in the first six
months of 2014 and 2013, respectively. Operating income, as reported, was
$49.8 million in the first half of this year compared to $85.0 million in the
first half of last year. Restructuring and other costs were $65.7 million in
the first six months of 2014, compared to $19.4 million in the first six
months of 2013.

Sensient initiated a restructuring plan in the first quarter of this year to
eliminate underperforming operations, consolidate manufacturing facilities,
and improve efficiencies within the Company. In 2013, the Company incurred
restructuring costs to relocate the headquarters of the Flavors & Fragrances
Group and consolidate manufacturing facilities. As noted above, the Company
incurred pre-tax restructuring and other costs of $13.0 million in the second
quarter of 2014, including $9.2 million of non-cash charges for the write-down
of fixed assets. For the six months ended June 30, 2014, restructuring and
other costs were $65.7 million, including $48.9 million of non-cash charges.
In 2013, restructuring costs were $6.6 million in the second quarter and $19.4
million for the first six months.

Cash provided by operating activities increased 11.6% to $49.6 million in the
quarter, compared to $44.5 million in last year’s second quarter. The increase
was driven by higher earnings, excluding the non-cash charges. The Company
repurchased 1.8 million shares of its common stock in the second quarter,
completing the program to repurchase up to two million shares announced
earlier this year. Including dividend payments, the Company returned
approximately $120 million to shareholders in the second quarter and more than
$130 million year-to-date.

“I am very pleased with the strong results reported by the Company and each of
the operating groups in the second quarter,” said Paul Manning, President and
CEO of Sensient Technologies Corporation. “Each of the Groups reported local
currency operating profit growth of over five percent and significant margin
improvement. We continue to see progress in the Flavors & Fragrances Group and
we are optimistic about future opportunities across all of our businesses.”

The Board of Directors recently approved the adoption of amendments to the
Company’s Articles of Incorporation, By-Laws and Corporate Governance
Guidelines to provide for a majority voting standard in uncontested elections
of directors and replace the Company’s current plurality voting standard and
director resignation policy. In accordance with Wisconsin law, the adoption of
a proposed amendment to Sensient’s Articles of Incorporation will be submitted
to a vote of Sensient’s shareholders at the Company’s 2015 annual meeting of
shareholders. If approved by a majority of the Company’s shareholders, the
majority voting standard will apply to Company elections of directors
thereafter. The adoption of a majority voting standard is the latest step in
Sensient’s ongoing efforts to enhance its corporate governance practices over
the last few years. Other significant enhancements have included the
appointment of Dr. Elaine R. Wedral as independent Lead Director, several
changes to the Company’s director and officer compensation practices designed
to further enhance the linkage between pay and Company performance, the
declassification of the Company’s Board of Directors and the elimination of
Sensient’s poison pill. The Board of Directors and its Nominating and
Corporate Governance Committee have also made significant progress in their
ongoing evaluation of potential candidates for Sensient’s Board of Directors.

                               BUSINESS REVIEW

The Color Group reported revenue of $133.2 million in the quarter, an increase
of 3.9% from the $128.2 million reported in the comparable period last year.
Operating income increased 8.5% to $30.9 million from $28.4 million in last
year’s second quarter. The Color Group’s operating margin increased 100 basis
points to 23.2% in the quarter, driven by strong performances in the digital
inks and food and beverage color businesses. Foreign currency translation
increased revenue by less than one percent and operating income by 1.5% in the
quarter.

For the six months ended June 30, 2014, Color Group revenue was $266.9
million, an increase of 3.6% from the $257.7 million reported in the first six
months of last year. Operating income increased 9.3% to $60.3 million compared
to $55.1 million for the comparable period last year. Foreign currency
translation did not have a significant impact on either revenue or operating
income in the first half of 2014.

The Flavors & Fragrances Group reported second quarter revenue of $216.2
million compared to the $226.6 million reported in last year’s second quarter.
Operating income increased 4.9% to $33.6 million compared to $32.0 million in
the second quarter of 2013. The Flavors & Fragrances Group’s operating margin
increased to 15.5% in the quarter, an improvement of 140 basis points from the
margin in last year’s second quarter. Several businesses reported double-digit
operating profit growth in the quarter including Natural Ingredients, North
America Beverage, North America Savory, Europe Beverage and Europe Sweet.
Foreign currency translation did not have a significant impact on either
revenue or operating income in the quarter.

The Flavors & Fragrances Group reported revenue of $429.6 million and $442.5
million in the first six months of 2014 and 2013, respectively. Operating
income was $63.5 million for the first six months of 2014, an increase of 5.1%
compared to the $60.4 million reported in the comparable period last year.
Foreign currency translation did not have a significant impact on either
revenue or operating income in the first half of 2014.

The Corporate & Other segment, which includes the Company’s operations in Asia
Pacific, and the flavor businesses in Central and South America, reported
revenue of $39.0 million in the second quarter compared to $37.7 million in
the comparable period last year. For the six months ended June 30, 2014,
revenue was $74.3 million, an increase of 2.5% over the $72.5 million reported
in the first half of last year. In local currency terms, revenue in this
segment grew by approximately 7% for both the quarter and year-to-date
periods.

                                 2014 OUTLOOK

Sensient has increased its 2014 diluted earnings per share guidance to be
within the range of $2.95 and $3.02, excluding restructuring and other costs.
The Company’s previous guidance had been a range between $2.92 and $3.00 per
share.

                               CONFERENCE CALL

The Company will host a conference call to discuss its 2014 second quarter
financial results at 10:00 a.m. CDT on Friday, July 25, 2014. To participate
in the conference call, please contact InterCall Teleconferencing at (706)
758-1089 and refer to conference identification number 72151622. A webcast of
the conference call will be available on the Investor Information section of
the Company’s web site at www.sensient.com.

A replay will be available beginning at 1:00 p.m. CDT on July 25, 2014,
through midnight on August 1, 2014, by calling (404) 537-3406 and referring to
conference identification number 72151622. 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 statements that may constitute “forward-looking
statements” within the meaning of Federal securities laws. Such
forward-looking statements are not guarantees of future performance and
involve known and unknown risks, uncertainties and other factors concerning
the Company’s operations and business environment. Important factors that
could cause actual results to differ materially from those suggested by these
forward-looking statements and that could adversely affect the Company’s
future financial performance include the following: the pace and nature of new
product introductions by the Company and the Company’s customers; the
Company's ability to successfully implement its strategy to create
sustainable, long-term shareholder value; the Company’s ability to
successfully implement its growth strategies; the outcome of the Company’s
various productivity-improvement and cost-reduction efforts; changes in costs
or availability of raw materials, including energy; industry and economic
factors related to the Company’s domestic and international business; growth
in markets for products in which the Company competes; industry and customer
acceptance of price increases; actions by competitors, including increased
intensity of competition; the loss of any customers in certain product lines
in which our sales are made to a relatively small number of customers; product
liability claims or product recalls; the costs of compliance, or failure to
comply, with laws and regulations applicable to our industries and markets;
changing consumer preferences and changing technologies; and failure to
complete and integrate future acquisitions or dispositions. The risks and
uncertainties identified above are not the only risks the Company faces.
Additional risks and uncertainties not presently known to the Company or that
it currently believes to be immaterial also may adversely affect the Company.
Should any known or unknown risks and uncertainties develop into actual
events, these developments could have material adverse effects on our
business, financial condition and results of operations. This release contains
time-sensitive information that reflects management’s best analysis only as of
the date of this release. 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 herein will not
be realized. Additional information regarding these risks can be found in our
Annual Report on Form 10-K for the year ended December 31, 2013, and Quarterly
Report on Form 10-Q for the quarter ended March 31, 2014.

                         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 June 30,                    Six Months Ended June 30,
Earnings
                                                                                                 
                    2014          2013          % Change           2014            2013          %
                                                                                                 Change
                                                                                                 
Revenue             $ 374,666     $ 378,806       -1.1      %      $ 742,797       $ 744,446     -0.2  %
                                                                                                 
Cost of               245,002       256,285       -4.4      %        488,625         504,788     -3.2  %
products sold
Selling and
administrative       81,455      73,843       10.3      %       204,384       154,642    32.2  %
expenses
                                                                                                 
Operating             48,209        48,678        -1.0      %        49,788          85,016      -41.4 %
income
Interest             3,718       4,008                          7,849         8,269   
expense
                                                                                                 
Earnings before       44,491        44,670                           41,939          76,747
income taxes
Income taxes         15,430      12,388                         14,953        23,026  
                                                                                                 
Net earnings        $ 29,061     $ 32,282                        $ 26,986       $ 53,721  
                                                                                                 
Earnings per
common share:
  Basic             $ 0.60       $ 0.65                          $ 0.55         $ 1.08    
                                                                                                 
  Diluted           $ 0.59       $ 0.65                          $ 0.55         $ 1.08    
                                                                                                 
Average common
shares
outstanding:
  Basic              48,665      49,751       -2.2      %       49,256        49,731     -1.0  %
                                                                                                 
  Diluted            48,953      49,917       -1.9      %       49,512        49,892     -0.8  %
                                                                                                 
                                                                                                 
Reconciliation
of Non-GAAP
Amounts
                                                                                                 
The Company's 2014 results include pre-tax restructuring and other charges of $13.0 million ($10.7
million after-tax or $0.22 per share) and $65.7 million ($48.2 million after-tax or $0.97 per share) for
the three and six month periods ended June 30, 2014, respectively, related to eliminating
underperforming operations, consolidating manufacturing facilities, improving efficiencies within the
Company and other items. The Company's 2013 results include pre-tax restructuring charges of $6.6
million ($4.7 million after-tax or $0.09 per share) and $19.4 million ($14.1 million after-tax of $0.28
per share) for the three and six month periods ended June 30, 2013 related to the 2013 restructuring
program.
                                                                                                 
                                                                                                 
                                                                                                 
                    Three Months Ended June 30,                    Six Months Ended June 30,
                    2014          2013          % Change           2014            2013          %
                                                                                                 Change
Operating           $ 48,209      $ 48,678        -1.0      %      $ 49,788        $ 85,016      -41.4 %
income (GAAP)
Restructuring -
Cost of               -             277                              -               872
products sold
Restructuring &
other - Selling      12,979      6,365                          65,701        18,543  
and
administrative
Adjusted
operating           $ 61,188     $ 55,320       10.6      %      $ 115,489      $ 104,431    10.6  %
income
                                                                                                 
Net earnings        $ 29,061      $ 32,282        -10.0     %      $ 26,986        $ 53,721      -49.8 %
(GAAP)
Restructuring &
other, before         12,979        6,642                            65,701          19,415
tax
Tax impact of
restructuring &      (2,260  )    (1,940  )                       (17,534   )    (5,306  )
other
Adjusted net        $ 39,780     $ 36,984       7.6       %      $ 75,153       $ 67,830     10.8  %
earnings
                                                                                                 
Diluted EPS         $ 0.59        $ 0.65          -9.2      %      $ 0.55          $ 1.08        -49.1 %
(GAAP)
Restructuring &
other, net of        0.22        0.09                           0.97          0.28    
tax
Adjusted            $ 0.81       $ 0.74         9.5       %      $ 1.52         $ 1.36       11.8  %
diluted EPS
                                                                                                 
                                                                                                 
                                                                                                 
These non-GAAP financial measures are utilized by management in comparing our operating performance on a
consistent basis. We believe that these financial measures are appropriate to enhance an overall
understanding of our underlying operating performance trends compared to historical and prospective
periods. Management also believes that these measures are useful to investors in their analysis of our
results of operations and provide improved comparability between fiscal periods. Non-GAAP financial
measures should not be considered in isolation from, or as a substitute for, financial information
calculated in accordance with GAAP. Investors are encouraged to review the reconciliation of these
non-GAAP measures to their most directly comparable GAAP financial measures.
                                                                                                 
                                                                                                 
                                                                                                 
Sensient Technologies Corporation                                                                
(In thousands, except per share amounts)
                                                                                                 
                                                                                                 
Results by          Three Months Ended June 30,                    Six Months Ended June 30,
Segment
                                                                                                 
Revenue             2014          2013          % Change           2014            2013          %
                                                                                                 Change
                                                                                                 
Flavors &           $ 216,192     $ 226,626       -4.6      %      $ 429,571       $ 442,467     -2.9  %
Fragrances
Color                 133,225       128,231       3.9       %        266,863         257,710     3.6   %
Corporate &           38,992        37,653        3.6       %        74,334          72,529      2.5   %
Other
Intersegment         (13,743 )    (13,704 )                       (27,971   )    (28,260 )
elimination
                                                                                                 
Consolidated        $ 374,666    $ 378,806      -1.1      %      $ 742,797      $ 744,446    -0.2  %
                                                                                                 
                                                                                                 
                                                                                                 
Operating
Income
                                                                                                 
Flavors &           $ 33,554      $ 31,984        4.9       %      $ 63,493        $ 60,390      5.1   %
Fragrances
Color                 30,858        28,432        8.5       %        60,265          55,115      9.3   %
Corporate &          (16,203 )    (11,738 )                       (73,970   )    (30,489 )
Other
                                                                                                 
Consolidated        $ 48,209     $ 48,678       -1.0      %      $ 49,788       $ 85,016     -41.4 %
                                                                                                 
                                                                                                 
Beginning in the first quarter of 2014, the results of operations for the Company’s Fragrances
businesses in Asia Pacific and China, previously reported in the Corporate & Other segment, are reported
in the Flavors & Fragrances Group, and the results of operations for the Company’s pharmaceutical
flavors business, previously reported in the Flavors & Fragrances Group, are reported in the Colors
Group with the pharmaceutical colors business. Results for 2013 have been restated to reflect this
change. Restructuring and other charges are reported in the Corporate & Other segment.
                                                                                                 
                                                                                                 
                                                                                                 
Consolidated
Condensed
Balance Sheets
June 30,                                        2014               2013
                                                                                                 
Current assets                                  $ 847,892          $ 770,701
Goodwill &
intangible                                        469,248            452,358
assets (net)
Property,
plant, and                                        520,027            532,121
equipment (net)
Other assets                                     89,305           45,715    
                                                                                                 
  Total Assets                                  $ 1,926,472       $ 1,800,895 
                                                                                                 
Current                                         $ 248,206          $ 213,309
liabilities
Long-term debt                                    472,105            342,699
Accrued
employee and                                      27,145             60,464
retiree
benefits
Other                                             32,521             22,259
liabilities
Shareholders'                                    1,146,495        1,162,164 
Equity
                                                                                                 
  Total
  Liabilities
  and                                           $ 1,926,472       $ 1,800,895 
  Shareholders'
  Equity
                                                                                                 

                                                                                                 
Sensient
Technologies                                                                                     
Corporation
(In thousands,
except per
share amounts)
                                                                                                 
Consolidated
Statements of
Cash Flows
Three Months                                    2014               2013
Ended June 30,
                                                                                                 
Net cash
provided by                                     $ 49,604           $ 44,455
operating
activities
                                                                                                 
Cash flows from
investing
activities:
  Acquisition
  of property,                                    (15,041   )        (34,202   )
  plant and
  equipment
  Proceeds from
  sale of                                         11                 7
  assets
  Other
  investing                                      (526      )       (62       )
  activity
                                                                                                 
Net cash used
in investing                                     (15,556   )       (34,257   )
activities
                                                                                                 
Cash flows from
financing
activities:
  Proceeds from
  additional                                      125,487            42,158
  borrowings
  Debt payments                                   (30,382   )        (31,173   )
  Purchase of
  treasury                                        (106,029  )        -
  stock
  Dividends                                       (12,270   )        (11,508   )
  paid
  Proceeds from
  options                                        65               364       
  exercised and
  other
                                                                                                 
Net cash used
in financing                                     (23,129   )       (159      )
activities
                                                                                                 
Effect of
exchange rate
changes on cash                                  46               (2,844    )
and cash
equivalents
                                                                                                 
Net increase in
cash and cash                                     10,965             7,195
equivalents
Cash and cash
equivalents at                                   17,463           19,470    
beginning of
period
Cash and cash
equivalents at                                  $ 28,428          $ 26,665    
end of period
                                                                                                 
                                                                                                 
                                                                                                 
Supplemental
Information
Three Months                                    2014               2013
Ended June 30,
                                                                                                 
Depreciation
and                                             $ 12,971           $ 12,930
amortization
                                                                                                 
Dividends paid                                  $ 0.25             $ 0.23
per share

Contact:

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