Sensient Technologies posts record Q3 results, with earnings of US$31.9M, up 9.5% year-over-year, revenues of US$363.7M, up 6.7%; results due to strong demand for natural colors, strong performance by U.S. flavor business

MILWAUKEE , October 20, 2011 (press release) – Sensient Technologies Corporation (NYSE:SXT - News) reported diluted earnings per share of 64 cents for the quarter ended September 30, 2011, a third-quarter record and an increase of 12.3% over the 57 cents earned in last year’s third quarter, excluding a two cent benefit from an insurance recovery. The reported results in the third quarter of 2010 were 59 cents. Consolidated revenue reached a new third-quarter high of $363.8 million, an increase of 6.7% over the $340.9 million reported in the third quarter of 2010. Foreign currency translation increased both revenue and operating income by approximately 4% in the quarter. The Color Group and the Flavors & Fragrances Group each reported new third-quarter records for both revenue and operating income.

Revenue for the nine months ended September 30, 2011, was $1.1 billion, an increase of 10.3% over the $988.9 million reported in the first nine months of 2010. Diluted earnings per share increased 12.9% to $1.84 compared to $1.63, excluding the two cent benefit from the insurance recovery, reported for last year’s nine month period. The reported earnings for the nine months ended September 30, 2010, were $1.65 per share. Foreign currency translation also increased both revenue and operating income by approximately 4% in the year-to-date period.

Cash provided by operating activities was $39.7 million in the third quarter and $106.6 million for the first nine months of 2011. Total debt at September 30, 2011, was $322.1 million compared to $360.3 million as of September 30, 2010.

“Our businesses performed very well this quarter, and I am pleased with the record results,” said Kenneth P. Manning, Chairman, President, and CEO of Sensient Technologies Corporation. “We continue to see opportunities for growth and we have built the infrastructure that will allow us to convert these opportunities into new business. I am very optimistic about the Company’s future.”

BUSINESS REVIEW

The Color Group reported revenue of $121.0 million in the third quarter of 2011, an increase of 6.8% over the $113.3 million reported in last year’s third quarter. Operating income increased 14.2% to $22.9 million from $20.0 million in the third quarter of 2010. Favorable foreign currency translation increased revenue by 4.2% and operating income by 4.7%. The strong demand for natural colors continues to drive the Group’s revenue and profit growth.

The Flavors & Fragrances Group third quarter revenue increased 6.7% to $221.2 million, from $207.2 million in the third quarter of 2010. Operating income for the third quarter was $33.6 million, a 4.5% increase over the $32.2 million reported in last year’s third quarter. Foreign currency translation increased revenue and operating income by approximately 3% and 2%, respectively. Strong performances by the U.S. flavor businesses drove the revenue and operating income growth.

Corporate & Other, which includes the Company’s operations in Asia Pacific and China, reported revenue of $34.4 million for the third quarter, an increase of 11.2% over the $31.0 million reported in the third quarter of 2010.

2011 OUTLOOK

Sensient has increased its guidance for 2011 diluted earnings per share, which is now expected to be between $2.38 and $2.42. The Company’s previous guidance had been between $2.32 and $2

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 September 30,   Nine Months Ended September 30,
                         
    2011   2010   % Change   2011   2010   % Change
                         
Revenue   $ 363,751     $ 340,868       6.7 %   $ 1,090,431     $ 988,913     10.3 %
                         
Cost of products sold     249,086       234,592       6.2 %     748,916       682,730     9.7 %
Selling and administrative expenses     64,722       58,516       10.6 %     193,642       172,622     12.2 %
                         
Operating income     49,943       47,760       4.6 %     147,873       133,561     10.7 %
Interest expense     4,934       5,224           14,919       15,490      
                         
Earnings before income taxes     45,009       42,536       5.8 %     132,954       118,071     12.6 %
Income taxes     13,012       13,319           41,056       36,702      
                         
Net earnings   $ 31,997     $ 29,217       9.5 %   $ 91,898     $ 81,369     12.9 %
                         
Earnings per common share:                        
Basic   $ 0.64     $ 0.59       8.5 %   $ 1.85     $ 1.66     11.4 %
                         
Diluted   $ 0.64     $ 0.59       8.5 %   $ 1.84     $ 1.65     11.5 %
                         
Average common shares outstanding:                        
Basic     49,776       49,277       1.0 %     49,723       49,051     1.4 %
                         
Diluted     49,967       49,565       0.8 %     49,911       49,352     1.1 %
                         
                         
                         
 

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