07/23/2021 | Press release | Distributed by Public on 07/23/2021 05:02
Sensient Technologies Corporation
|
Page 2
|
Earnings Release - Quarter Ended June 30, 2021
|
|
July 23, 2021
|
Revenue
|
Reported
Quarter
|
|||
Flavors & Extracts
|
-2.3
|
%
|
||
Color
|
9.8
|
%
|
||
Asia Pacific
|
15.9
|
%
|
||
Total Revenue
|
3.9
|
%
|
||
Revenue
|
Adjusted
Local Currency (1)
Quarter
|
|||
Flavors & Extracts
|
9.1
|
%
|
||
Color
|
7.1
|
%
|
||
Asia Pacific
|
11.3
|
%
|
||
Total Revenue
|
9.1
|
%
|
||
(1) Adjusted local currency percentage changes are described in more detail
in the 'Reconciliation of Non-GAAP Amounts' at the end of this release.
|
Sensient Technologies Corporation
|
Page 3
|
Earnings Release - Quarter Ended June 30, 2021
|
|
July 23, 2021
|
Sensient Technologies Corporation
|
Page 4
|
Earnings Release - Quarter Ended June 30, 2021
|
|
July 23, 2021
|
|
(2) |
See 'Reconciliation of Non-GAAP Amounts' at the end of this release for more information.
|
Sensient Technologies Corporation
|
Page 5
|
Earnings Release - Quarter Ended June 30, 2021
|
|
July 23, 2021
|
Sensient Technologies Corporation
|
Page 6
|
Earnings Release - Quarter Ended June 30, 2021
|
|
July 23, 2021
|
Sensient Technologies Corporation
|
Page 7
|
(In thousands, except percentages and per share amounts)
|
|
(Unaudited)
|
Consolidated Statements of Earnings
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
||||||||||||||||||||||
2021
|
2020
|
% Change
|
2021
|
2020
|
% Change
|
|||||||||||||||||||
Revenue
|
$
|
335,827
|
$
|
323,090
|
3.9
|
%
|
$
|
695,529
|
$
|
673,767
|
3.2
|
%
|
||||||||||||
Cost of products sold
|
224,233
|
220,876
|
1.5
|
%
|
468,322
|
459,660
|
1.9
|
%
|
||||||||||||||||
Selling and administrative expenses
|
75,841
|
60,089
|
26.2
|
%
|
144,557
|
137,421
|
5.2
|
%
|
||||||||||||||||
Operating income
|
35,753
|
42,125
|
(15.1
|
%)
|
82,650
|
76,686
|
7.8
|
%
|
||||||||||||||||
Interest expense
|
3,322
|
3,608
|
6,755
|
7,915
|
||||||||||||||||||||
Earnings before income taxes
|
32,431
|
38,517
|
75,895
|
68,771
|
||||||||||||||||||||
Income taxes
|
6,495
|
7,897
|
18,291
|
17,378
|
||||||||||||||||||||
Net earnings
|
$
|
25,936
|
$
|
30,620
|
(15.3
|
%)
|
$
|
57,604
|
$
|
51,393
|
12.1
|
%
|
||||||||||||
Earnings per share of common stock:
|
||||||||||||||||||||||||
Basic
|
$
|
0.62
|
$
|
0.72
|
$
|
1.37
|
$
|
1.22
|
||||||||||||||||
Diluted
|
$
|
0.61
|
$
|
0.72
|
$
|
1.36
|
$
|
1.21
|
||||||||||||||||
Average common shares outstanding:
|
||||||||||||||||||||||||
Basic
|
42,135
|
42,305
|
42,199
|
42,294
|
||||||||||||||||||||
Diluted
|
42,267
|
42,322
|
42,328
|
42,315
|
Results by Segment
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
||||||||||||||||||||||
Revenue
|
2021
|
2020
|
% Change
|
2021
|
2020
|
% Change
|
||||||||||||||||||
Flavors & Extracts
|
$
|
179,401
|
$
|
183,611
|
(2.3
|
%)
|
$
|
380,312
|
$
|
370,109
|
2.8
|
%
|
||||||||||||
Color
|
133,207
|
121,296
|
9.8
|
%
|
268,927
|
264,791
|
1.6
|
%
|
||||||||||||||||
Asia Pacific
|
32,317
|
27,873
|
15.9
|
%
|
66,157
|
58,322
|
13.4
|
%
|
||||||||||||||||
Intersegment elimination
|
(9,098
|
)
|
(9,690
|
)
|
(19,867
|
)
|
(19,455
|
)
|
||||||||||||||||
Consolidated
|
$
|
335,827
|
$
|
323,090
|
3.9
|
%
|
$
|
695,529
|
$
|
673,767
|
3.2
|
%
|
||||||||||||
Operating Income
|
||||||||||||||||||||||||
Flavors & Extracts
|
$
|
24,536
|
$
|
22,752
|
7.8
|
%
|
$
|
51,554
|
$
|
43,623
|
18.2
|
%
|
||||||||||||
Color
|
25,615
|
22,263
|
15.1
|
%
|
52,209
|
51,927
|
0.5
|
%
|
||||||||||||||||
Asia Pacific
|
5,793
|
4,849
|
19.5
|
%
|
12,545
|
9,908
|
26.6
|
%
|
||||||||||||||||
Corporate & Other
|
(20,191
|
)
|
(7,739
|
)
|
(33,658
|
)
|
(28,772
|
)
|
||||||||||||||||
Consolidated
|
$
|
35,753
|
$
|
42,125
|
(15.1
|
%)
|
$
|
82,650
|
$
|
76,686
|
7.8
|
%
|
Sensient Technologies Corporation
|
Page 8
|
(In thousands)
|
|
(Unaudited)
|
Consolidated Condensed Balance Sheets
|
June 30,
2021
|
December 31,
2020
|
||||||
Cash and cash equivalents
|
$
|
33,306
|
$
|
24,770
|
||||
Trade accounts receivable
|
258,411
|
234,132
|
||||||
Inventories
|
360,240
|
381,346
|
||||||
Prepaid expenses and other current assets
|
56,111
|
48,578
|
||||||
Assets held for sale
|
-
|
52,760
|
||||||
Total Current Assets
|
708,068
|
741,586
|
||||||
Goodwill & intangible assets (net)
|
429,204
|
434,220
|
||||||
Property, plant, and equipment (net)
|
442,022
|
445,493
|
||||||
Other assets
|
118,436
|
119,561
|
||||||
Total Assets
|
$
|
1,697,730
|
$
|
1,740,860
|
||||
Trade accounts payable
|
$
|
115,325
|
$
|
107,324
|
||||
Short-term borrowings
|
771
|
9,247
|
||||||
Other current liabilities
|
80,320
|
82,045
|
||||||
Liabilities held for sale
|
-
|
17,339
|
||||||
Total Current Liabilities
|
196,416
|
215,955
|
||||||
Long-term debt
|
483,230
|
518,004
|
||||||
Accrued employee and retiree benefits
|
29,863
|
28,941
|
||||||
Other liabilities
|
43,944
|
43,624
|
||||||
Shareholders' Equity
|
944,277
|
934,336
|
||||||
Total Liabilities and Shareholders' Equity
|
$
|
1,697,730
|
$
|
1,740,860
|
Sensient Technologies Corporation
|
Page 9
|
(In thousands, except per share amounts)
|
|
(Unaudited)
|
|
Consolidated Statements of Cash Flows
|
|
Six Months Ended June 30,
|
2021
|
2020
|
|||||||
Cash flows from operating activities:
|
||||||||
Net earnings
|
$
|
57,604
|
$
|
51,393
|
||||
Adjustments to arrive at net cash provided by operating activities:
|
||||||||
Depreciation and amortization
|
25,817
|
24,522
|
||||||
Share-based compensation expense
|
4,188
|
2,662
|
||||||
Net loss on assets
|
206
|
50
|
||||||
Loss on divestitures and other charges
|
13,511
|
6,634
|
||||||
Deferred income taxes
|
1,702
|
1,075
|
||||||
Changes in operating assets and liabilities:
|
||||||||
Trade accounts receivable
|
(26,902
|
)
|
(20,494
|
)
|
||||
Inventories
|
19,357
|
24,816
|
||||||
Prepaid expenses and other assets
|
(15,573
|
)
|
(3,975
|
)
|
||||
Trade accounts payable and other accrued expenses
|
9,632
|
9,961
|
||||||
Accrued salaries, wages, and withholdings
|
(3,944
|
)
|
6,483
|
|||||
Income taxes
|
1,953
|
3,899
|
||||||
Other liabilities
|
1,710
|
588
|
||||||
Net cash provided by operating activities
|
89,261
|
107,614
|
||||||
Cash flows from investing activities:
|
||||||||
Acquisition of property, plant, and equipment
|
(25,550
|
)
|
(21,417
|
)
|
||||
Proceeds from sale of assets
|
169
|
6
|
||||||
Proceeds from divestiture of businesses
|
36,255
|
11,255
|
||||||
Other investing activities
|
(254
|
)
|
4,395
|
|||||
Net cash provided by (used in) investing activities
|
10,620
|
(5,761
|
)
|
|||||
Cash flows from financing activities:
|
||||||||
Proceeds from additional borrowings
|
25,997
|
38,670
|
||||||
Debt payments
|
(62,578
|
)
|
(98,849
|
)
|
||||
Purchase of treasury stock
|
(22,507
|
)
|
-
|
|||||
Dividends paid
|
(33,027
|
)
|
(33,018
|
)
|
||||
Other financing activities
|
(582
|
)
|
(414
|
)
|
||||
Net cash used in financing activities
|
(92,697
|
)
|
(93,611
|
)
|
||||
Effect of exchange rate changes on cash and cash equivalents
|
1,352
|
(8,519
|
)
|
|||||
Net increase (decrease) in cash and cash equivalents
|
8,536
|
(277
|
)
|
|||||
Cash and cash equivalents at beginning of period
|
24,770
|
21,153
|
||||||
Cash and cash equivalents at end of period
|
$
|
33,306
|
$
|
20,876
|
Supplemental Information
|
||||||||
Six Months Ended June 30,
|
2021
|
2020
|
||||||
Dividends paid per share
|
$
|
0.78
|
$
|
0.78
|
Sensient Technologies Corporation
|
Page 10
|
(In thousands, except percentages and per share amounts)
|
|
(Unaudited)
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
|||||||||||||||||||||||
2021
|
2020
|
% Change
|
2021
|
2020
|
% Change
|
|||||||||||||||||||
Revenue (GAAP)
|
$
|
335,827
|
$
|
323,090
|
3.9
|
%
|
$
|
695,529
|
$
|
673,767
|
3.2
|
%
|
||||||||||||
Revenue of the divested product lines
|
(2,207
|
)
|
(28,217
|
)
|
(27,777
|
)
|
(64,802
|
)
|
||||||||||||||||
Adjusted revenue
|
$
|
333,620
|
$
|
294,873
|
13.1
|
%
|
$
|
667,752
|
$
|
608,965
|
9.7
|
%
|
||||||||||||
Operating income (GAAP)
|
$
|
35,753
|
$
|
42,125
|
(15.1
|
%)
|
$
|
82,650
|
$
|
76,686
|
7.8
|
%
|
||||||||||||
Divestiture & other related costs - Cost of products sold
|
3
|
1,749
|
28
|
1,939
|
||||||||||||||||||||
Divestiture & other related costs - Selling and administrative expenses
|
11,685
|
(3,276
|
)
|
13,232
|
8,377
|
|||||||||||||||||||
Operating loss (income) of the divested product lines
|
459
|
(331
|
)
|
(2,468
|
)
|
(1,716
|
)
|
|||||||||||||||||
Operational improvement plan - Selling and administrative expenses
|
(3,494
|
)
|
-
|
(2,493
|
)
|
-
|
||||||||||||||||||
Adjusted operating income
|
$
|
44,406
|
$
|
40,267
|
10.3
|
%
|
$
|
90,949
|
$
|
85,286
|
6.6
|
%
|
||||||||||||
Net earnings (GAAP)
|
$
|
25,936
|
$
|
30,620
|
(15.3
|
%)
|
$
|
57,604
|
$
|
51,393
|
12.1
|
%
|
||||||||||||
Divestiture & other related costs, before tax
|
11,688
|
(1,527
|
)
|
13,260
|
10,316
|
|||||||||||||||||||
Tax impact of divestiture & other related costs
|
(1,689
|
)
|
509
|
(896
|
)
|
(425
|
)
|
|||||||||||||||||
Net loss (earnings) of the divested product lines, before tax
|
459
|
(331
|
)
|
(2,468
|
)
|
(1,716
|
)
|
|||||||||||||||||
Tax impact of the divested product lines
|
(115
|
)
|
203
|
608
|
500
|
|||||||||||||||||||
Operational improvement plan income, before tax
|
(3,494
|
)
|
-
|
(2,493
|
)
|
-
|
||||||||||||||||||
Tax impact of operational improvement plan
|
455
|
-
|
159
|
-
|
||||||||||||||||||||
Adjusted net earnings
|
$
|
33,240
|
$
|
29,474
|
12.8
|
%
|
$
|
65,774
|
$
|
60,068
|
9.5
|
%
|
||||||||||||
Diluted earnings per share (GAAP)
|
$
|
0.61
|
$
|
0.72
|
(15.3
|
%)
|
$
|
1.36
|
$
|
1.21
|
12.4
|
%
|
||||||||||||
Divestiture & other related costs, net of tax
|
0.24
|
(0.02
|
)
|
0.29
|
0.23
|
|||||||||||||||||||
Results of operations of the divested product lines, net of tax
|
0.01
|
-
|
(0.04
|
)
|
(0.03
|
)
|
||||||||||||||||||
Operational improvement plan income, net of tax
|
(0.07
|
)
|
-
|
(0.06
|
)
|
-
|
||||||||||||||||||
Adjusted diluted earnings per share
|
$
|
0.79
|
$
|
0.70
|
12.9
|
%
|
$
|
1.55
|
$
|
1.42
|
9.2
|
%
|
Sensient Technologies Corporation
|
Page 11
|
(In thousands)
|
|
(Unaudited)
|
|
Reconciliation of Non-GAAP Amounts - Continued
|
Results by Segment
|
Three Months Ended June 30,
|
|||||||||||||||||||||||
Revenue
|
2021
|
Adjustments (1)
|
Adjusted
2021
|
2020
|
Adjustments (1)
|
Adjusted
2020
|
||||||||||||||||||
Flavors & Extracts
|
$
|
179,401
|
$
|
(1,415
|
)
|
$
|
177,986
|
$
|
183,611
|
$
|
(24,742
|
)
|
$
|
158,869
|
||||||||||
Color
|
133,207
|
(792
|
)
|
132,415
|
121,296
|
(3,501
|
)
|
117,795
|
||||||||||||||||
Asia Pacific
|
32,317
|
-
|
32,317
|
27,873
|
(213
|
)
|
27,660
|
|||||||||||||||||
Intersegment elimination
|
(9,098
|
)
|
-
|
(9,098
|
)
|
(9,690
|
)
|
239
|
(9,451
|
)
|
||||||||||||||
Consolidated
|
$
|
335,827
|
$
|
(2,207
|
)
|
$
|
333,620
|
$
|
323,090
|
$
|
(28,217
|
)
|
$
|
294,873
|
||||||||||
Operating Income
|
||||||||||||||||||||||||
Flavors & Extracts
|
$
|
24,536
|
$
|
(45
|
)
|
$
|
24,491
|
$
|
22,752
|
$
|
(1,619
|
)
|
$
|
21,133
|
||||||||||
Color
|
25,615
|
504
|
26,119
|
22,263
|
1,347
|
23,610
|
||||||||||||||||||
Asia Pacific
|
5,793
|
-
|
5,793
|
4,849
|
(59
|
)
|
4,790
|
|||||||||||||||||
Corporate & Other
|
(20,191
|
)
|
8,194
|
(11,997
|
)
|
(7,739
|
)
|
(1,527
|
)
|
(9,266
|
)
|
|||||||||||||
Consolidated
|
$
|
35,753
|
$
|
8,653
|
$
|
44,406
|
$
|
42,125
|
$
|
(1,858
|
)
|
$
|
40,267
|
Results by Segment
|
Six Months Ended June 30,
|
|||||||||||||||||||||||
Revenue
|
2021
|
Adjustments (1)
|
Adjusted
2021
|
2020
|
Adjustments (1)
|
Adjusted
2020
|
||||||||||||||||||
Flavors & Extracts
|
$
|
380,312
|
$
|
(26,304
|
)
|
$
|
354,008
|
$
|
370,109
|
$
|
(52,187
|
)
|
$
|
317,922
|
||||||||||
Color
|
268,927
|
(1,328
|
)
|
267,599
|
264,791
|
(12,573
|
)
|
252,218
|
||||||||||||||||
Asia Pacific
|
66,157
|
(295
|
)
|
65,862
|
58,322
|
(334
|
)
|
57,988
|
||||||||||||||||
Intersegment elimination
|
(19,867
|
)
|
150
|
(19,717
|
)
|
(19,455
|
)
|
292
|
(19,163
|
)
|
||||||||||||||
Consolidated
|
$
|
695,529
|
$
|
(27,777
|
)
|
$
|
667,752
|
$
|
673,767
|
$
|
(64,802
|
)
|
$
|
608,965
|
||||||||||
Operating Income
|
||||||||||||||||||||||||
Flavors & Extracts
|
$
|
51,554
|
$
|
(2,925
|
)
|
$
|
48,629
|
$
|
43,623
|
$
|
(2,837
|
)
|
$
|
40,786
|
||||||||||
Color
|
52,209
|
544
|
52,753
|
51,927
|
1,214
|
53,141
|
||||||||||||||||||
Asia Pacific
|
12,545
|
(87
|
)
|
12,458
|
9,908
|
(93
|
)
|
9,815
|
||||||||||||||||
Corporate & Other
|
(33,658
|
)
|
10,767
|
(22,891
|
)
|
(28,772
|
)
|
10,316
|
(18,456
|
)
|
||||||||||||||
Consolidated
|
$
|
82,650
|
$
|
8,299
|
$
|
90,949
|
$
|
76,686
|
$
|
8,600
|
$
|
85,286
|
Sensient Technologies Corporation
|
Page 12
|
(In thousands, except percentages)
|
|
(Unaudited)
|
Three Months Ended June 30,
|
||||||||||||||||
Revenue
|
Total
|
Foreign Exchange Rates
|
Adjustments (2)
|
Adjusted Local Currency
|
||||||||||||
Flavors & Extracts
|
(2.3
|
%)
|
3.7
|
%
|
(15.1
|
%)
|
9.1
|
%
|
||||||||
Color
|
9.8
|
%
|
5.3
|
%
|
(2.6
|
%)
|
7.1
|
%
|
||||||||
Asia Pacific
|
15.9
|
%
|
5.5
|
%
|
(0.9
|
%)
|
11.3
|
%
|
||||||||
Total Revenue
|
3.9
|
%
|
4.4
|
%
|
(9.6
|
%)
|
9.1
|
%
|
||||||||
Operating Income
|
||||||||||||||||
Flavors & Extracts
|
7.8
|
%
|
3.1
|
%
|
(8.5
|
%)
|
13.2
|
%
|
||||||||
Color
|
15.1
|
%
|
5.4
|
%
|
4.5
|
%
|
5.2
|
%
|
||||||||
Asia Pacific
|
19.5
|
%
|
(0.6
|
%)
|
(1.5
|
%)
|
21.6
|
%
|
||||||||
Corporate & Other
|
160.9
|
%
|
0.1
|
%
|
131.4
|
%
|
29.4
|
%
|
||||||||
Total Operating Income
|
(15.1
|
%)
|
4.5
|
%
|
(25.4
|
%)
|
5.8
|
%
|
||||||||
Diluted Earnings Per Share
|
(15.3
|
%)
|
5.5
|
%
|
(29.4
|
%)
|
8.6
|
%
|
||||||||
Adjusted EBITDA
|
10.4
|
%
|
4.4
|
%
|
N/A
|
6.0
|
%
|
Six Months Ended June 30,
|
||||||||||||||||
Revenue
|
Total
|
Foreign Exchange Rates
|
Adjustments (2)
|
Adjusted Local Currency
|
||||||||||||
Flavors & Extracts
|
2.8
|
%
|
3.1
|
%
|
(9.3
|
%)
|
9.0
|
%
|
||||||||
Color
|
1.6
|
%
|
3.8
|
%
|
(4.5
|
%)
|
2.3
|
%
|
||||||||
Asia Pacific
|
13.4
|
%
|
5.7
|
%
|
(0.1
|
%)
|
7.8
|
%
|
||||||||
Total Revenue
|
3.2
|
%
|
3.5
|
%
|
(6.7
|
%)
|
6.4
|
%
|
||||||||
Operating Income
|
||||||||||||||||
Flavors & Extracts
|
18.2
|
%
|
2.6
|
%
|
(1.5
|
%)
|
17.1
|
%
|
||||||||
Color
|
0.5
|
%
|
4.1
|
%
|
1.4
|
%
|
(5.0
|
%)
|
||||||||
Asia Pacific
|
26.6
|
%
|
0.3
|
%
|
(0.3
|
%)
|
26.6
|
%
|
||||||||
Corporate & Other
|
17.0
|
%
|
0.1
|
%
|
(7.1
|
%)
|
24.0
|
%
|
||||||||
Total Operating Income
|
7.8
|
%
|
4.3
|
%
|
0.6
|
%
|
2.9
|
%
|
||||||||
Diluted Earnings Per Share
|
12.4
|
%
|
5.0
|
%
|
1.8
|
%
|
5.6
|
%
|
||||||||
Adjusted EBITDA
|
7.5
|
%
|
3.5
|
%
|
N/A
|
4.0
|
%
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
|||||||||||||||||||||||
2021
|
2020
|
% Change
|
2021
|
2020
|
% Change
|
|||||||||||||||||||
Operating income (GAAP)
|
$
|
35,753
|
$
|
42,125
|
(15.1
|
%)
|
$
|
82,650
|
$
|
76,686
|
7.8
|
%
|
||||||||||||
Depreciation and amortization
|
13,018
|
12,118
|
25,817
|
24,522
|
||||||||||||||||||||
Depreciation and amortization, divested product lines
|
(48
|
)
|
(16
|
)
|
(97
|
)
|
(96
|
)
|
||||||||||||||||
Share-based compensation expense
|
2,075
|
1,485
|
4,188
|
2,662
|
||||||||||||||||||||
Divestiture & other related costs, before tax
|
11,688
|
(1,527
|
)
|
13,260
|
10,316
|
|||||||||||||||||||
Results of operations of the divested product lines, before tax
|
459
|
(331
|
)
|
(2,468
|
)
|
(1,716
|
)
|
|||||||||||||||||
Operational improvement plan costs (income), before tax
|
(3,494
|
)
|
-
|
(2,493
|
)
|
-
|
||||||||||||||||||
Adjusted EBITDA
|
$
|
59,451
|
$
|
53,854
|
10.4
|
%
|
$
|
120,857
|
$
|
112,374
|
7.5
|
%
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
|||||||||||||||||||||||
2021
|
2020
|
% Change
|
2021
|
2020
|
% Change
|
|||||||||||||||||||
Net cash provided by operating activities (GAAP)
|
$
|
60,297
|
$
|
70,686
|
(14.7
|
%)
|
$
|
89,261
|
$
|
107,614
|
(17.1
|
%)
|
||||||||||||
Capital expenditures
|
(11,306
|
)
|
(12,006
|
)
|
(25,550
|
)
|
(21,417
|
)
|
||||||||||||||||
Free Cash Flow
|
$
|
48,991
|
$
|
58,680
|
(16.5
|
%)
|
$
|
63,711
|
$
|
86,197
|
(26.1
|
%)
|
Sensient Technologies Corporation
|
Page 13
|
(In thousands, except percentages)
|
|
(Unaudited)
|
Last Six
Months of
2021
|
||||
Forecasted GAAP Tax Rate
|
24
|
%
|
||
Forecasted tax impact of divestiture and other related costs, the results of operations of the divested product lines, and the operational improvement plan costs
|
(2
|
%)
|
||
Forecasted Adjusted Tax Rate
|
22
|
%
|