Sensient's Q2 earnings up 17% to US$33.5M, sales climb 13% to reach all-time quarterly record of US$377M, on solid performance from Color and Flavors & Fragrances groups

MILWAUKEE , July 22, 2011 (press release) – Sensient Technologies Corporation (NYSE: SXT) reported all-time quarterly records for revenue, operating income and earnings per share for the three months ended June 30, 2011, and both the Color and Flavors & Fragrances groups reported all-time quarterly highs for revenue and operating income. Diluted earnings per share for the quarter were 67 cents, a 15.5% increase over the 58 cents reported in the second quarter of 2010. Consolidated revenue for the second quarter increased 12.9% to $377.0 million compared to $334.0 million reported in last year's second quarter. Foreign currency translation increased revenue and operating income by approximately 6% in the quarter.

Revenue for the six months ended June 30, 2011, was $726.7 million, a 12.1% increase over the $648.0 million reported in the first half of 2010. Diluted earnings per share increased 13.2% to $1.20 compared to $1.06 reported in last year's first half. Foreign currency translation increased revenue and operating income by approximately 4% for the year-to-date period.

For the six months ended June 30, 2011, cash provided by operating activities increased to $66.8 million, a 4.1% increase from the $64.2 million reported in last year's first half. Total debt at June 30, 2011, was $331.4 million, a reduction of $12.5 million during the quarter and $57.7 million during the last twelve months.

"Our businesses continue to provide outstanding results, and I am very pleased with the Company's performance in the second quarter," said Kenneth P. Manning, Chairman and CEO of Sensient Technologies Corporation. "All of our operating groups have further opportunities for growth, and we remain optimistic for the future."

BUSINESS REVIEW

The Color Group reported revenue of $132.4 million in the second quarter, an increase of 17.2% over the $113.0 million reported in last year's second quarter. Operating income for the second quarter increased 18.0% to $24.6 million from $20.9 million in the second quarter of 2010. Favorable foreign currency translation increased revenue and operating profit by approximately 7% and 8%, respectively. Revenue grew as a result of solid volume increases and the demand for natural colors remains strong.

The Flavors & Fragrances Group reported second quarter revenue of $226.5 million, an increase of 10.5% over the $205.0 million reported in the second quarter of 2010. Second quarter operating income increased 8.8% to $36.1 million from $33.2 million reported in last year's second quarter. Foreign currency translation increased revenue and operating profit by approximately 5% and 4%, respectively.

Corporate & Other, which includes the Company's operations in Asia Pacific and China, reported revenue of $33.6 million for the second quarter, an increase of 24.1% from the prior year's second quarter revenue of $27.1 million.

2011 OUTLOOK

Sensient has increased its guidance for 2011 diluted earnings per share, which is now expected to be between $2.32 and $2.37. The Company's previous guidance had been between $2.28 and $2.34.

CONFERENCE CALL

The Company will host a conference call to discuss its 2011 second quarter financial results at 10:00 a.m. CDT on Friday, July 22, 2011. 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 July 22, 2011, through midnight on July 29, 2011, by calling (706) 645-9291 and referring to conference identification number 82996946. A transcript of the call will also be posted on the Company's web site at http://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, 2010, and quarterly report on Form 10-Q for the quarter ended March 31, 2011. 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.

Sensient Technologies Corporation
(In thousands, except percentages and per share amounts)
                         
                         
                         
Consolidated Statements of Earnings   Three Months Ended June 30,   Six Months Ended June 30,
                         
    2011   2010   % Change   2011   2010   % Change
                         
Revenue   $ 376,994     $ 333,969     12.9 %   $ 726,680     $ 648,045     12.1 %
                         
Cost of products sold     257,851       229,008     12.6 %     499,830       448,138     11.5 %
Selling and administrative expenses     64,810       57,815     12.1 %     128,920       114,106     13.0 %
                         
Operating income     54,333       47,146     15.2 %     97,930       85,801     14.1 %
Interest expense     5,135       5,488           9,985       10,266      
                         
Earnings before income taxes     49,198       41,658     18.1 %     87,945       75,535     16.4 %
Income taxes     15,712       12,973           28,044       23,383      
                         
Net earnings   $ 33,486     $ 28,685     16.7 %   $ 59,901     $ 52,152     14.9 %
                         
Earnings per common share:                        
Basic   $ 0.67     $ 0.58     15.5 %   $ 1.21     $ 1.07     13.1 %
                         
Diluted   $ 0.67     $ 0.58     15.5 %   $ 1.20     $ 1.06     13.2 %
                         
Average common shares outstanding:                      
Basic     49,753       49,047     1.4 %     49,696       48,937     1.6 %
                         
Diluted     49,947       49,365     1.2 %     49,883       49,244     1.3 %
                         
                         
                         
                         
Results by Segment   Three Months Ended June 30,   Six Months Ended June 30,
                         

Revenue

  2011   2010   % Change   2011   2010   % Change
                         
                         
Flavors & Fragrances   $ 226,481     $ 205,047     10.5 %   $ 433,170     $ 395,749     9.5 %
Color     132,392       112,979     17.2 %     258,063       220,935     16.8 %
Corporate & Other     33,622       27,101     24.1 %     65,137       51,372     26.8 %
Intersegment elimination     (15,501 )     (11,158 )   38.9 %     (29,690 )     (20,011 )   48.4 %
                         
Consolidated   $ 376,994     $ 333,969     12.9 %   $ 726,680     $ 648,045     12.1 %
                       
                         
                         

Operating Income

                       
                         
                         
Flavors & Fragrances   $ 36,146     $ 33,223     8.8 %   $ 65,104     $ 60,407     7.8 %
Color     24,648       20,880     18.0 %     46,995       38,988     20.5 %
Corporate & Other     (6,461 )     (6,957 )   -7.1 %     (14,169 )     (13,594 )   4.2 %
                         
Consolidated   $ 54,333     $ 47,146     15.2 %   $ 97,930     $ 85,801     14.1 %
                                             
                                             
                                             
Sensient Technologies Corporation
(In thousands, except per share amounts)
         
         
Consolidated Condensed Balance Sheets        
June 30,   2011   2010
         
Current assets   $ 707,296     $ 645,843  
Goodwill and intangibles (net)     479,604       434,052  
Property, plant and equipment (net)     450,539       395,895  
Other assets     38,657       35,887  
         
Total Assets   $ 1,676,096     $ 1,511,677  
         
Current liabilities   $ 197,648     $ 207,953  
Long-term debt     309,177       349,485  
Accrued employee and retiree benefits     56,682       51,259  
Other liabilities     37,919       24,072  
Shareholders' equity     1,074,670       878,908  
         
Total Liabilities and Shareholders' Equity   $ 1,676,096     $ 1,511,677  
         
         
         
Consolidated Statements of Cash Flows        
Six Months Ended June 30,   2011   2010
         
Net cash provided by operating activities   $ 66,835     $ 64,186  
         
Cash flows from investing activities:        
Acquisition of property, plant and equipment     (23,758 )     (19,853 )
Proceeds from sale of assets     2       76  
Other investing activity     (155 )     (340 )
         
Net cash used in investing activities     (23,911 )     (20,117 )
         
Cash flows from financing activities:        
Proceeds from additional borrowings     43,406       126,253  
Debt payments     (71,878 )     (147,965 )
Dividends paid     (21,001 )     (19,247 )
Proceeds from options exercised and other     2,754       7,768  
         
Net cash used in financing activities     (46,719 )     (33,191 )
         
Effect of exchange rate changes on cash and cash equivalents     3,837       (9,186 )
         
Net increase in cash and cash equivalents     42       1,692  
Cash and cash equivalents at beginning of period     14,255       12,219  
Cash and cash equivalents at end of period   $ 14,297     $ 13,911  
         
         
         
Supplemental Information        
Six Months Ended June 30,   2011   2010
         
Depreciation and amortization   $ 23,474     $ 21,728  
         
Dividends per share   $ 0.42     $ 0.39  

SOURCE: Sensient Technologies Corporation

 


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