Press Release Details

MILWAUKEE--(BUSINESS WIRE)-- Sensient Technologies Corporation (NYSE: SXT) reported earnings per share from continuing operations of 30 cents in the first quarter of 2017 compared to 69 cents in last year’s first quarter. Revenue was $341.4 million in this year’s first quarter compared to $342.5 million in the comparable period last year. Operating income was $24.0 million in the first quarter of 2017 and $47.5 million in last year’s first quarter. Foreign currency translation reduced revenue, operating income, and earnings per share each by approximately 1% in the first quarter.

The reported results include restructuring and other costs, which are described in more detail under “Reconciliation of Non-GAAP Amounts” below. Restructuring and other costs reduced operating income by $31.3 million, or 53 cents per share, in this year’s first quarter and $3.3 million, or six cents per share, in the first quarter of 2016. The restructuring and other costs incurred in this year’s first quarter principally relate to non-cash losses from the divestitures of a European savory ingredient facility and certain related business lines, and the Company’s European Natural Ingredients business, which primarily sells dehydrated vegetables.

The adjusted results, discussed below, eliminate the impact of restructuring and other costs and enhance the overall understanding of the Company’s performance when viewed together with our GAAP results. Refer to “Reconciliation of Non-GAAP Amounts” below. Sensient’s adjusted earnings per share increased approximately 9% to 82 cents in this year’s first quarter, compared to 75 cents in the first quarter of 2016. Adjusted operating income increased approximately 9% in the first quarter, to $55.3 million from $50.9 million in last year’s first quarter. Foreign currency translation reduced both adjusted operating income and adjusted earnings per share by approximately 1%.

Cash provided by operating activities was $37.6 million in this year’s first quarter and $46.2 million in the first quarter of 2016. Cash flow in this year’s first quarter was impacted by a smaller inventory reduction in the U.S. Natural Ingredients business and higher incentive payments compared to cash flow in last year’s first quarter. The Company repurchased approximately 155,000 shares of its common stock in the quarter.

“The Company had a very good first quarter,” said Paul Manning, Chairman, President and CEO of Sensient Technologies Corporation. “The Color Group continues to deliver strong results, led by the Cosmetics and Food Colors businesses. The Flavors and Fragrances Group delivered solid operating income growth and improved its operating margin by 150 basis points. The first quarter results were in line with my expectations, and I remain optimistic about the Company’s future.”

BUSINESS REVIEW

The Color Group reported revenue of $134.1 million in the quarter and $126.5 million in last year’s first quarter, an increase of 6.0%. Operating income increased 7.5% to $30.2 million in the quarter. Foreign currency reduced revenue by approximately 1%, and operating income by approximately 2%, in the quarter. The Group’s first quarter results were driven by the Cosmetics and Food Color businesses, which delivered strong revenue and profit growth in the quarter. In addition, the Pharma and Inks businesses each delivered solid profit growth in the first quarter.

The Flavors & Fragrances Group reported revenue of $186.9 million and $198.5 million in the first quarters of 2017 and 2016, respectively. Operating income increased approximately 4% to $28.8 million, from $27.6 million in last year’s first quarter. The Flavors & Fragrances Group’s operating margin increased 150 basis points to 15.4% in the quarter, which is the fourth consecutive quarter that the Group has improved its year-over-year operating margin by at least 100 basis points. Many of the Group’s business units reported solid operating income growth in the quarter, with several of the businesses achieving double-digit profit growth. Foreign currency translation reduced revenue and operating income by approximately 2% and 1%, respectively, in the quarter.

The Asia Pacific Group reported revenue of $29.6 million and $28.2 million in the first quarters of 2017 and 2016, respectively. Operating income was $5.2 million in the quarter, off approximately 8% from last year’s first quarter result of $5.6 million. The lower operating income was primarily a result of order timing and product mix. The Group expects volumes and mix to normalize over the rest of the year. Foreign currency translation increased both revenue and operating income by approximately 1% in the quarter.

Corporate & Other, which includes the restructuring and other costs, reported operating costs of $40.1 million in this year’s first quarter and $13.8 million in the first quarter of 2016. The higher Corporate & Other costs in this year’s first quarter are attributable to higher restructuring and other costs, which principally relate to the non-cash losses from the divestitures of a European savory ingredient facility and the Company’s European Natural Ingredients business. Both transactions were completed in the first quarter.

2017 OUTLOOK

Sensient has updated its guidance for 2017 earnings per share from continuing operations to be between $2.54 and $2.64, which includes an estimated 81 cents of restructuring and other costs. The restructuring and other costs are primarily non-cash charges related to divestitures. The Company’s previous guidance had been between $2.76 and $2.86, which included 59 cents of restructuring and other costs.

The Company is maintaining its previous guidance for adjusted earnings per share, which excludes restructuring and other costs, to be within the range of $3.35 to $3.45. Refer to “Reconciliation of Non-GAAP Amounts” below for a description of restructuring and other costs excluded from the adjusted results.

CONFERENCE CALL

The Company will host a conference call to discuss its 2017 first quarter financial results at 10:00 a.m. CDT on Wednesday, April 26, 2017. To participate in the conference call, please contact InterCall Teleconferencing at (888) 818-9025 and refer to conference identification number 5952001. 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 April 26, 2017, through midnight on May 3, 2017, by calling (404) 537-3406 and referring to conference identification number 5952001. A transcript of the call will 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. Except to the extent required by applicable laws, 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 most recent Annual Report on Form 10-K and subsequent reports that we file with the SEC.

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

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Sensient Technologies Corporation
Kim Chase, (414) 347-3706

Source: Sensient Technologies Corporation