Business Wire | Oct 16, 2020 06:55AM EDT

Sensient Technologies Corporation Reports Results for the Quarter Ended September 30, 2020

Oct. 16, 2020

MILWAUKEE--(BUSINESS WIRE)--Oct. 16, 2020--Sensient Technologies Corporation (NYSE: SXT) reported consolidated revenue of $323.6 million in this year's third quarter compared to $317.7 million in last year's third quarter. Reported operating income in the third quarter was $41.2 million compared to $38.8 million in the third quarter of 2019. Reported diluted earnings per share was 78 cents in the third quarter of 2020 compared to diluted earnings per share of 75 cents in the third quarter of 2019. Foreign currency translation had an immaterial impact on revenue, operating income, and earnings per share in the quarter.

The 2020 third quarter reported results include divestiture & other related costs as well as operational improvement plan costs, which decreased third quarter net earnings by $1.4 million ($0.03 per diluted share). The 2020 and 2019 third quarter results also include the operations of the product lines divested and to be divested, which increased diluted earnings per share by $0.04 in the third quarter of 2020 and $0.02 in the third quarter of 2019. These adjustments are described in more detail under "Reconciliation of Non-GAAP Amounts" at the end of this release.

BUSINESS REVIEW

Reported

Revenue Quarter Year-to-date

Flavors & Extracts 9.1% 4.1%

Color -8.3% -7.0%

Asia Pacific 2.0% 1.6%

Total Revenue 1.9% -0.7%



Adjusted

Local Currency ^(1)

Revenue Quarter Year-to-date

Flavors & Extracts 12.9% 7.2%

Color -1.5% -1.2%

Asia Pacific 2.1% 3.0%

Total Revenue 6.1% 3.0%



^(1) Adjusted local currency percentage changes are described in more detail inthe "Reconciliation of Non-GAAP Amounts" at the end of this release. As a result of the portfolio changes made this year, Sensient has changed the name of its Flavors & Fragrances Group, to the Flavors & Extracts Group in order to more accurately reflect the Group's product portfolio.

The Flavors & Extracts Group reported third quarter revenue of $182.9 million compared to $167.6 million reported in the comparable period last year, an increase of 9.1%. Adjusted local currency revenue increased 12.9% in the quarter. The higher revenue was primarily the result of continued growth in natural ingredients and flavors, extracts, and flavor ingredients. Segment operating income was $23.8 million in the current quarter compared to $17.6 million reported in the comparable period last year, an increase of 35.5%. Adjusted local currency operating profit increased 24.1%. The Group's higher profit was primarily a result of the higher volumes and the favorable impact of the Group's cost reduction initiatives, offset by higher raw material costs in natural ingredients. Foreign currency translation increased segment revenue by approximately 1% and had an immaterial impact on operating income in the quarter.

The Color Group reported revenue of $116.4 million in the quarter compared to $127.0 million in last year's comparable period, a decrease of 8.3%. Adjusted local currency revenue decreased 1.5% in the quarter. The Group continued to have good growth in food and pharmaceutical colors; however, this growth was offset by lower volumes in the personal care business, primarily as a result of the lower demand for makeup during COVID-19. Segment operating income was $23.6 million in the quarter compared to $23.4 million in last year's comparable period. Adjusted local currency operating income increased approximately 3.0%. Despite double digit growth rates in food and pharmaceutical colors, the lower volumes in personal care continued to negatively impact the Color Group's operating income in the quarter. Foreign currency translation decreased segment revenue by approximately 1% and had an immaterial impact on operating income in the quarter.

The Asia Pacific Group reported revenue of $30.7 million in the quarter compared to $30.1 million in last year's comparable period, an increase of 2.0%. Adjusted local currency revenue increased 2.1% in the quarter. The Group had favorable growth in a number of regions, which was offset by the negative impact of COVID-19 restrictions in certain countries. Segment operating income was $6.1 million in the quarter compared to $5.4 million in last year's comparable quarter, an increase of 13.3%. Adjusted local currency operating income increased 15.5% in the quarter. The higher profit was primarily a result of the favorable volume growth in certain regions and the favorable impact of the Group's cost reduction initiatives. Foreign currency translation had an immaterial impact on revenue and decreased operating income by approximately 1% in the quarter.

Corporate & Other reported operating costs of $12.4 million in the current quarter compared to $7.7 million in last year's comparable period. The higher costs are primarily due to the divestiture & other costs, operational improvement plan costs, and an increase in non-cash performance-based compensation.

During the third quarter, the Company implemented an operational improvement plan, primarily in the personal care business to consolidate cosmetic manufacturing operations. The costs for this operational improvement plan are included in the Company's Corporate & Other segment.

The Company's non-GAAP amounts eliminate the impact of currency movements, depreciation and amortization, non-cash share-based compensation, divestiture & other related costs, operational improvement plan costs, and the results of the operations divested and to be divested to enhance the overall understanding of the Company's performance when viewed together with the GAAP results. Refer to "Reconciliation of Non-GAAP Amounts" at the end of this release.

2020 OUTLOOK

Based upon current trends, the Company reconfirms its previously issued diluted earnings per share guidance for 2020 of $2.10 to $2.35. The full year guidance now includes approximately 5 cents of foreign currency headwinds based on current exchange rates. The Company also reconfirms its previously issued 2020 adjusted diluted earnings per share(2) guidance of $2.60 to $2.80, which excludes divestiture & other related costs, operational improvement plan costs, the results of the operations divested and to be divested, and foreign currency impacts.

The Company is also confirming its previously issued guidance, which calls for low to mid-single digit revenue growth in 2020 on a local currency basis, excluding the revenues of the product lines divested and to be divested. The Company also continues to expect 2020 Adjusted EBITDA(2) to grow at a low to mid-single digit rate and Adjusted Operating Income(2) to be flat to down at a low-single digit rate, in each case on a local currency basis. Adjusted Operating Income will be impacted by higher non-cash performance-based compensation.

The Company's guidance is based upon current trends and the effects of COVID-19 to date. The full impacts of the ongoing COVID-19 pandemic remain uncertain and management will continue to monitor its impacts on our business.

(2) See "Reconciliation of Non-GAAP Amounts" at the end of this release for more information.

CONFERENCE CALL

The Company will host a conference call to discuss its 2020 third quarter financial results at 8:30 a.m. CDT on Friday, October 16, 2020. To participate in the conference call, contact Chorus Call Inc. at (844) 492-3726 or (412) 317-1078, and ask to join the Sensient Technologies Corporation conference call. Alternatively, the call can be accessed by using the webcast link that is available on the Investor Information section of the Company's web site at www.sensient.com.

A replay of the call will be available one hour after the end of the conference call through October 23, 2020, by calling (877) 344-7529 and referring to conference identification number 10147899. An audio replay and written transcript of the call will also be posted on the Investor Information section of the Company's web site at www.sensient.com on or after October 20, 2020.

This release contains statements that may constitute "forward-looking statements" within the meaning of Federal securities laws including under "2020 Outlook" above. 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 impact and uncertainty created by the ongoing COVID-19 pandemic, including, but not limited to, its effects on our employees, facilities, customers and suppliers, the availability and cost of raw materials and other supplies, logistics and transportation, governmental regulations and restrictions and general economic conditions; the pace and nature of new product introductions by the Company and the Company's customers; the Company's ability to anticipate and respond to changing consumer preferences and changing technologies; the Company's ability to successfully implement its growth strategies; the outcome of the Company's various productivity-improvement and cost-reduction efforts and acquisition and divestiture activities; the success of the Company's efforts to explore strategic alternatives for certain non-core product lines; the effectiveness of the Company's past restructuring activities; changes in costs of raw materials, including energy; industry, regulatory, legal, and economic factors related to the Company's domestic and international business; the effects of tariffs, trade barriers, and disputes; growth in markets for products in which the Company competes; industry and customer acceptance of price increases; actions by competitors; currency exchange rate fluctuations; and other factors included in "Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, 2019, the Quarterly Report on Form 10-Q for the quarter ended June 30, 2020, and in other documents that the Company files with the SEC. 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.

ABOUT SENSIENT TECHNOLOGIES

Sensient Technologies Corporation is a leading global manufacturer and marketer of colors, flavors, and other specialty ingredients. Sensient uses advanced technologies and robust global supply chain capabilities to develop specialized solutions for food and beverages, as well as products that serve the pharmaceutical, nutraceutical, cosmetic, and personal care industries. Sensient's customers range in size from small entrepreneurial businesses to major international manufacturers representing some of the world's best-known brands. Sensient is headquartered in Milwaukee, Wisconsin.

www.sensient.com

SensientTechnologiesCorporation(In thousands,exceptpercentagesand per shareamounts)(Unaudited) ConsolidatedStatements of Three Months Ended September 30, Nine Months Ended September 30,Earnings 2020 2019 % 2020 2019 % Change Change

Revenue $ 323,566 $ 317,650 1.9 % $ 997,333 $ 1,004,349 (0.7 %)

Cost of 217,920 215,250 1.2 % 677,580 674,956 0.4 %products soldSelling and 64,491 63,612 1.4 % 201,912 193,817 4.2 %administrativeexpenses Operating 41,155 38,788 6.1 % 117,841 135,576 (13.1 %)incomeInterest 3,497 4,936 11,412 15,538 expense Earnings 37,658 33,852 106,429 120,038 before incometaxesIncome taxes 4,748 1,981 22,126 21,029

Net earnings $ 32,910 $ 31,871 3.3 % $ 84,303 $ 99,009 (14.9 %)

Earnings pershare ofcommon stock:Basic $ 0.78 $ 0.75 $ 1.99 $ 2.34

Diluted $ 0.78 $ 0.75 $ 1.99 $ 2.34

Average commonsharesoutstanding:Basic 42,307 42,272 42,299 42,261

Diluted 42,349 42,299 42,326 42,291

Results by Three Months Ended September 30, Nine Months Ended September 30,Segment Revenue 2020 2019 % 2020 2019 % Change Change

Flavors & $ 182,866 $ 167,577 9.1 % $ 552,975 $ 531,264 4.1 %ExtractsColor 116,414 127,005 (8.3 %) 381,205 409,796 (7.0 %)

Asia Pacific 30,740 30,125 2.0 % 89,062 87,646 1.6 %

Intersegment (6,454 ) (7,057 ) (25,909 ) (24,357 )elimination Consolidated $ 323,566 $ 317,650 1.9 % $ 997,333 $ 1,004,349 (0.7 %)

OperatingIncome Flavors & $ 23,844 $ 17,600 35.5 % $ 67,467 $ 60,775 11.0 %ExtractsColor 23,559 23,436 0.5 % 75,486 81,512 (7.4 %)

Asia Pacific 6,123 5,406 13.3 % 16,031 13,825 16.0 %

Corporate & (12,371 ) (7,654 ) (41,143 ) (20,536 )Other Consolidated $ 41,155 $ 38,788 6.1 % $ 117,841 $ 135,576 (13.1 %)

Sensient Technologies Corporation

(In thousands)(Unaudited)Consolidated Condensed Balance SheetsSeptember 30,December 31,2020

2019

Cash and cash equivalents$

26,900

$

21,153

Trade accounts receivable (net)222,388

213,201

Inventories401,046

422,517

Prepaid expenses and other current assets43,681

40,049

Assets held for sale58,534

91,293

Total Current Assets752,549

788,213

Goodwill & intangible assets (net)423,419

418,844

Property, plant, and equipment (net)429,509

437,179

Other assets108,469

95,915

Total Assets$

1,713,946

$

1,740,151

Trade accounts payable$

93,491

$

94,653

Short-term borrowings24,460

20,612

Other current liabilities76,595

66,925

Liabilities held for sale17,491

19,185

Total Current Liabilities212,037

201,375

Long-term debt537,124

598,499

Accrued employee and retiree benefits26,556

25,822

Other liabilities41,444

32,866

Shareholders' Equity896,785

881,589

Total Liabilities and Shareholders' Equity$

1,713,946

$

1,740,151

Sensient Technologies Corporation

(In thousands)(Unaudited) Consolidated Condensed Balance Sheets September 30, December 31, 2020 2019

Cash and cash equivalents $ 26,900 $ 21,153

Trade accounts receivable (net) 222,388 213,201

Inventories 401,046 422,517

Prepaid expenses and other current assets 43,681 40,049

Assets held for sale 58,534 91,293

Total Current Assets 752,549 788,213

Goodwill & intangible assets (net) 423,419 418,844

Property, plant, and equipment (net) 429,509 437,179

Other assets 108,469 95,915

Total Assets $ 1,713,946 $ 1,740,151

Trade accounts payable $ 93,491 $ 94,653

Short-term borrowings 24,460 20,612

Other current liabilities 76,595 66,925

Liabilities held for sale 17,491 19,185

Total Current Liabilities 212,037 201,375

Long-term debt 537,124 598,499

Accrued employee and retiree benefits 26,556 25,822

Other liabilities 41,444 32,866

Shareholders' Equity 896,785 881,589

Total Liabilities and Shareholders' Equity $ 1,713,946 $ 1,740,151

Sensient Technologies Corporation(In thousands, except per share amounts)(Unaudited)Consolidated Statements of Cash FlowsNine Months Ended September 30,2020

2019

Cash flows from operating activities:Net earnings$

84,303

$

99,009

Adjustments to arrive at net cash provided by operating activities:Depreciation and amortization36,831

41,706

Share-based compensation expense (income)4,017

(816

)

Net gain on assets(254

)

(1,224

)

Net loss on divestitures and other charges5,821

-

Deferred income taxes(9,001

)

(2,303

)

Changes in operating assets and liabilities:Trade accounts receivable(7,962

)

6,355

Inventories17,433

14,493

Prepaid expenses and other assets(4,726

)

(5,053

)

Accounts payable and other accrued expenses9,018

(19,565

)

Accrued salaries, wages and withholdings from employees7,410

(1,647

)

Income taxes(3,899

)

(5,294

)

Other liabilities3,936

1,920

Net cash provided by operating activities142,927

127,581

Cash flows from investing activities:Acquisition of property, plant, and equipment(34,009

)

(26,073

)

Proceeds from sale of assets1,022

2,033

Proceeds from divesture of businesses12,228

-

Other investing activity4,955

4,280

Net cash used in investing activities(15,804

)

(19,760

)

Cash flows from financing activities:Proceeds from additional borrowings33,164

35,126

Debt payments(101,061

)

(90,966

)

Dividends paid(49,537

)

(45,688

)

Other financing activity(415

)

(1,027

)

Net cash used in financing activities(117,849

)

(102,555

)

Effect of exchange rate changes on cash and cash equivalents(3,527

)

(2,745

)

Net increase in cash and cash equivalents5,747

2,521

Cash and cash equivalents at beginning of period21,153

31,901

Cash and cash equivalents at end of period$

26,900

$

34,422

Supplemental InformationNine Months Ended September 30,2020

2019

Dividends paid per share$

1.17

$

1.08

Sensient Technologies Corporation(In thousands, except per share amounts)(Unaudited) Consolidated Statements of Cash FlowsNine Months Ended September 30, 2020 2019

Cash flows from operating activities: Net earnings $ 84,303 $ 99,009

Adjustments to arrive at net cash provided by operating activities: Depreciation and amortization 36,831 41,706

Share-based compensation expense 4,017 (816 ) (income) Net gain on assets (254 ) (1,224 )

Net loss on divestitures and other 5,821 - charges Deferred income taxes (9,001 ) (2,303 )

Changes in operating assets and liabilities: Trade accounts receivable (7,962 ) 6,355

Inventories 17,433 14,493

Prepaid expenses and other assets (4,726 ) (5,053 )

Accounts payable and other accrued 9,018 (19,565 ) expenses Accrued salaries, wages and 7,410 (1,647 ) withholdings from employees Income taxes (3,899 ) (5,294 )

Other liabilities 3,936 1,920

Net cash provided by operating activities 142,927 127,581

Cash flows from investing activities: Acquisition of property, plant, and (34,009 ) (26,073 ) equipment Proceeds from sale of assets 1,022 2,033

Proceeds from divesture of businesses 12,228 -

Other investing activity 4,955 4,280

Net cash used in investing activities (15,804 ) (19,760 )

Cash flows from financing activities: Proceeds from additional borrowings 33,164 35,126

Debt payments (101,061 ) (90,966 )

Dividends paid (49,537 ) (45,688 )

Other financing activity (415 ) (1,027 )

Net cash used in financing activities (117,849 ) (102,555 )

Effect of exchange rate changes on cash and cash (3,527 ) (2,745 )equivalents Net increase in cash and cash equivalents 5,747 2,521

Cash and cash equivalents at beginning of period 21,153 31,901

Cash and cash equivalents at end of period $ 26,900 $ 34,422

Supplemental InformationNine Months Ended September 30, 2020 2019

Dividends paid per share $ 1.17 $ 1.08

Sensient Technologies Corporation(In thousands, except percentages and per share amounts)(Unaudited)Reconciliation of Non-GAAP AmountsThe Company's results for the three and nine months ended September 30, 2020 and 2019 include adjusted revenue, adjusted operating income, adjusted net earnings, and adjusted diluted EPS, which exclude divestiture & other related costs, operational improvement plan costs, and the results of operations divested or to be divested.Three Months Ended September 30,Nine Months Ended September 30,2020

2019

% Change

2020

2019

% Change

Revenue (GAAP)$

323,566

$

317,650

1.9

%

$

997,333

$

1,004,349

(0.7

%)

Revenue of the product lines divested or to be divested(23,588

)

(34,112

)

(88,390

)

(109,489

)

Adjusted revenue$

299,978

$

283,538

5.8

%

$

908,943

$

894,860

1.6

%

Operating income (GAAP)$

41,155

$

38,788

6.1

%

$

117,841

$

135,576

(13.1

%)

Divestiture & other related costs (income) - Cost of products sold(148

)

-

1,791

-

Divestiture & other related costs - Selling and administrative expenses312

-

8,689

-

Operating income of the product lines divested or to be divested(2,449

)

(856

)

(4,165

)

(1,233

)

Operational improvement plan - Cost of products sold35

-

35

-

Operational improvement plan - Selling and administrative expenses2,606

-

2,606

-

Adjusted operating income$

41,511

$

37,932

9.4

%

$

126,797

$

134,343

(5.6

%)

Net earnings (GAAP)$

32,910

$

31,871

3.3

%

$

84,303

$

99,009

(14.9

%)

Divestiture & other related costs, before tax164

-

10,480

-

Tax impact of divestiture & other related costs(787

)

-

(1,212

)

-

Net earnings of the product lines divested or to be divested, before tax(2,449

)

(856

)

(4,165

)

(1,233

)

Tax impact of the product lines divested or to be divested655

87

1,155

203

Operational improvement plan costs, before tax2,641

-

2,641

-

Tax impact of operational improvement plan(656

)

-

(656

)

-

Adjusted net earnings$

32,478

$

31,102

4.4

%

$

92,546

$

97,979

(5.5

%)

Diluted earnings per share (GAAP)$

0.78

$

0.75

4.0

%

$

1.99

$

2.34

(15.0

%)

Divestiture & other related costs (income), net of tax(0.01

)

-

0.22

-

Results of operations of the product lines divested or to be divested, net of tax(0.04

)

(0.02

)

(0.07

)

(0.02

)

Operational improvement plan costs, net of tax0.05

-

0.05

-

Adjusted diluted earnings per share$

0.77

$

0.74

4.1

%

$

2.19

$

2.32

(5.6

%)

Note: Earnings per share calculations may not foot due to rounding differences.SensientTechnologiesCorporation(In thousands,exceptpercentages andper shareamounts)(Unaudited) Reconciliationof Non-GAAPAmounts The Company's results for the three and nine months ended September 30, 2020and 2019 include adjusted revenue, adjusted operating income, adjusted netearnings, and adjusted diluted EPS, which exclude divestiture & other relatedcosts, operational improvement plan costs, and the results of operations divested or to be divested. Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 % 2020 2019 % Change Change

Revenue (GAAP) $ 323,566 $ 317,650 1.9 % $ 997,333 $ 1,004,349 (0.7 %)

Revenue of theproduct lines (23,588 ) (34,112 ) (88,390 ) (109,489 )divested or tobe divestedAdjusted revenue $ 299,978 $ 283,538 5.8 % $ 908,943 $ 894,860 1.6 %

Operating income $ 41,155 $ 38,788 6.1 % $ 117,841 $ 135,576 (13.1 %)(GAAP)Divestiture &other related (148 ) - 1,791 - costs (income) -Cost of productssoldDivestiture &other relatedcosts - Selling 312 - 8,689 - andadministrativeexpensesOperating incomeof the product (2,449 ) (856 ) (4,165 ) (1,233 )lines divestedor to bedivestedOperationalimprovement plan 35 - 35 - - Cost ofproducts soldOperationalimprovement plan 2,606 - 2,606 - - Selling andadministrativeexpensesAdjusted $ 41,511 $ 37,932 9.4 % $ 126,797 $ 134,343 (5.6 %)operating income Net earnings $ 32,910 $ 31,871 3.3 % $ 84,303 $ 99,009 (14.9 %)(GAAP)Divestiture &other related 164 - 10,480 - costs, beforetaxTax impact ofdivestiture & (787 ) - (1,212 ) - other relatedcostsNet earnings ofthe productlines divested (2,449 ) (856 ) (4,165 ) (1,233 )or to bedivested, beforetaxTax impact ofthe product 655 87 1,155 203 lines divestedor to bedivestedOperationalimprovement plan 2,641 - 2,641 - costs, beforetaxTax impact of (656 ) - (656 ) - operationalimprovement planAdjusted net $ 32,478 $ 31,102 4.4 % $ 92,546 $ 97,979 (5.5 %)earnings Diluted earnings $ 0.78 $ 0.75 4.0 % $ 1.99 $ 2.34 (15.0 %)per share (GAAP)Divestiture &other related (0.01 ) - 0.22 - costs (income),net of taxResults ofoperations ofthe product (0.04 ) (0.02 ) (0.07 ) (0.02 )lines divestedor to bedivested, net oftaxOperationalimprovement plan 0.05 - 0.05 - costs, net oftaxAdjusted diluted $ 0.77 $ 0.74 4.1 % $ 2.19 $ 2.32 (5.6 %)earnings pershare Note: Earnings per share calculations may not foot due to rounding differences.Results by SegmentThree Months Ended September 30,Divestiture &OperationalImprovementAdjustedDivestitureAdjustedRevenue

2020

Plan Impact2020

2019

Impact2019

Flavors & Extracts$

182,866

$

(22,978

)

$

159,888

$

167,577

$

(25,954

)

$

141,623

Color116,414

(669

)

115,745

127,005

(8,176

)

118,829

Asia Pacific30,740

(68

)

30,672

30,125

(237

)

29,888

Intersegment elimination(6,454

)

127

(6,327

)

(7,057

)

255

(6,802

)

Consolidated$

323,566

$

(23,588

)

$

299,978

$

317,650

$

(34,112

)

$

283,538

Operating IncomeFlavors & Extracts$

23,844

$

(2,241

)

$

21,603

$

17,600

$

(109

)

$

17,491

Color23,559

(185

)

23,374

23,436

(689

)

22,747

Asia Pacific6,123

(23

)

6,100

5,406

(58

)

5,348

Corporate & Other(12,371

)

2,805

(9,566

)

(7,654

)

-

(7,654

)

Consolidated$

41,155

$

356

$

41,511

$

38,788

$

(856

)

$

37,932

Results by SegmentNine Months Ended September 30,Divestiture &OperationalImprovementAdjustedDivestitureAdjustedRevenue

2020

Plan Impact2020

2019

Impact2019

Flavors & Extracts$

552,975

$

(75,165

)

$

477,810

$

531,264

$

(82,055

)

$

449,209

Color381,205

(13,242

)

367,963

409,796

(27,590

)

382,206

Asia Pacific89,062

(402

)

88,660

87,646

(563

)

87,083

Intersegment elimination(25,909

)

419

(25,490

)

(24,357

)

719

(23,638

)

Consolidated$

997,333

$

(88,390

)

$

908,943

$

1,004,349

$

(109,489

)

$

894,860

Operating IncomeFlavors & Extracts$

67,467

$

(5,078

)

$

62,389

$

60,775

$

(197

)

$

60,578

Color75,486

1,029

76,515

81,512

(894

)

80,618

Asia Pacific16,031

(116

)

15,915

13,825

(142

)

13,683

Corporate & Other(41,143

)

13,121

(28,022

)

(20,536

)

-

(20,536

)

Consolidated$

117,841

$

8,956

$

126,797

$

135,576

$

(1,233

)

$

134,343

Results by Segment Three Months Ended September 30, Divestiture & Operational Improvement Adjusted Divestiture AdjustedRevenue 2020 Plan Impact 2020 2019 Impact 2019

Flavors & Extracts $ 182,866 $ (22,978 ) $ 159,888 $ 167,577 $ (25,954 ) $ 141,623

Color 116,414 (669 ) 115,745 127,005 (8,176 ) 118,829

Asia Pacific 30,740 (68 ) 30,672 30,125 (237 ) 29,888

Intersegment (6,454 ) 127 (6,327 ) (7,057 ) 255 (6,802 )elimination Consolidated $ 323,566 $ (23,588 ) $ 299,978 $ 317,650 $ (34,112 ) $ 283,538

Operating Income Flavors & Extracts $ 23,844 $ (2,241 ) $ 21,603 $ 17,600 $ (109 ) $ 17,491

Color 23,559 (185 ) 23,374 23,436 (689 ) 22,747

Asia Pacific 6,123 (23 ) 6,100 5,406 (58 ) 5,348

Corporate & Other (12,371 ) 2,805 (9,566 ) (7,654 ) - (7,654 )

Consolidated $ 41,155 $ 356 $ 41,511 $ 38,788 $ (856 ) $ 37,932

Results by Segment Nine Months Ended September 30, Divestiture & Operational Improvement Adjusted Divestiture AdjustedRevenue 2020 Plan Impact 2020 2019 Impact 2019

Flavors & Extracts $ 552,975 $ (75,165 ) $ 477,810 $ 531,264 $ (82,055 ) $ 449,209

Color 381,205 (13,242 ) 367,963 409,796 (27,590 ) 382,206

Asia Pacific 89,062 (402 ) 88,660 87,646 (563 ) 87,083

Intersegment (25,909 ) 419 (25,490 ) (24,357 ) 719 (23,638 )elimination Consolidated $ 997,333 $ (88,390 ) $ 908,943 $ 1,004,349 $ (109,489 ) $ 894,860

Operating Income Flavors & Extracts $ 67,467 $ (5,078 ) $ 62,389 $ 60,775 $ (197 ) $ 60,578

Color 75,486 1,029 76,515 81,512 (894 ) 80,618

Asia Pacific 16,031 (116 ) 15,915 13,825 (142 ) 13,683

Corporate & Other (41,143 ) 13,121 (28,022 ) (20,536 ) - (20,536 )

Consolidated $ 117,841 $ 8,956 $ 126,797 $ 135,576 $ (1,233 ) $ 134,343

Sensient Technologies Corporation(In thousands, except percentages)(Unaudited)Reconciliation of Non-GAAP Amounts - ContinuedThe following table summarizes the percentage change in the 2020 results compared to the 2019 results for the corresponding periods.Three Months Ended September 30,Nine Months Ended September 30,RevenueTotalForeignExchangeRatesDivestiture &OperationalImprovementPlan ImpactAdjustedLocalCurrencyTotalForeignExchangeRatesDivestiture &OperationalImprovementPlan ImpactAdjustedLocalCurrencyFlavors & Extracts9.1

%

0.5

%

(4.3

%)

12.9

%

4.1

%

(0.8

%)

(2.3

%)

7.2

%

Color(8.3

%)

(1.2

%)

(5.6

%)

(1.5

%)

(7.0

%)

(2.6

%)

(3.2

%)

(1.2

%)

Asia Pacific2.0

%

0.4

%

(0.5

%)

2.1

%

1.6

%

(1.2

%)

(0.2

%)

3.0

%

Total Revenue1.9

%

(0.2

%)

(4.0

%)

6.1

%

(0.7

%)

(1.6

%)

(2.1

%)

3.0

%

Operating IncomeFlavors & Extracts35.5

%

(0.3

%)

11.7

%

24.1

%

11.0

%

(0.9

%)

7.9

%

4.0

%

Color0.5

%

(0.4

%)

(2.1

%)

3.0

%

(7.4

%)

(2.3

%)

(2.0

%)

(3.1

%)

Asia Pacific13.3

%

(1.4

%)

(0.8

%)

15.5

%

16.0

%

(0.5

%)

(0.4

%)

16.9

%

Corporate & Other61.6

%

0.0

%

36.7

%

24.9

%

100.3

%

0.0

%

63.8

%

36.5

%

Total Operating Income6.1

%

(0.6

%)

(3.4

%)

10.1

%

(13.1

%)

(1.8

%)

(7.4

%)

(3.9

%)

Diluted Earnings Per Share4.0

%

0.0

%

(2.8

%)

6.8

%

(15.0

%)

(1.8

%)

(9.8

%)

(3.4

%)

Adjusted EBITDA8.6

%

(0.3

%)

N/A

8.9

%

(1.9

%)

(1.5

%)

N/A

(0.4

%)

Sensient Technologies Corporation(In thousands, except percentages)(Unaudited) Reconciliation of Non-GAAP Amounts - Continued The following table summarizes the percentage change in the 2020 resultscompared to the 2019 results for the corresponding periods. Three Months Ended September 30, Nine Months Ended September 30, Divestiture Divestiture Foreign & Adjusted Foreign & AdjustedRevenue Total Exchange Operational Local Total Exchange Operational Local Rates Improvement Currency Rates Improvement Currency Plan Impact Plan ImpactFlavors & 9.1 % 0.5 % (4.3 %) 12.9 % 4.1 % (0.8 %) (2.3 %) 7.2 %ExtractsColor (8.3 %) (1.2 %) (5.6 %) (1.5 %) (7.0 %) (2.6 %) (3.2 %) (1.2 %)

Asia 2.0 % 0.4 % (0.5 %) 2.1 % 1.6 % (1.2 %) (0.2 %) 3.0 %PacificTotal 1.9 % (0.2 %) (4.0 %) 6.1 % (0.7 %) (1.6 %) (2.1 %) 3.0 %Revenue OperatingIncomeFlavors & 35.5 % (0.3 %) 11.7 % 24.1 % 11.0 % (0.9 %) 7.9 % 4.0 %ExtractsColor 0.5 % (0.4 %) (2.1 %) 3.0 % (7.4 %) (2.3 %) (2.0 %) (3.1 %)

Asia 13.3 % (1.4 %) (0.8 %) 15.5 % 16.0 % (0.5 %) (0.4 %) 16.9 %PacificCorporate & 61.6 % 0.0 % 36.7 % 24.9 % 100.3 % 0.0 % 63.8 % 36.5 %OtherTotal 6.1 % (0.6 %) (3.4 %) 10.1 % (13.1 %) (1.8 %) (7.4 %) (3.9 %)OperatingIncomeDiluted 4.0 % 0.0 % (2.8 %) 6.8 % (15.0 %) (1.8 %) (9.8 %) (3.4 %)EarningsPer ShareAdjusted 8.6 % (0.3 %) N/A 8.9 % (1.9 %) (1.5 %) N/A (0.4 %)EBITDA The following table summarizes the reconciliation between Operating Income (GAAP) and Adjusted EBITDA for the three and nine months ended September 30, 2020 and 2019.Three Months Ended September 30,Nine Months Ended September 30,2020

2019

% Change

2020

2019

% Change

Operating income (GAAP)$

41,155

$

38,788

6.1

%

$

117,841

$

135,576

(13.1

%)

Depreciation and amortization12,309

13,965

36,831

41,706

Depreciation and amortization, product lines divested or to be divested(49

)

(1,473

)

(145

)

(4,495

)

Share-based compensation expense (income)1,355

339

4,017

(816

)

Divestiture & other related costs, before tax164

-

10,480

-

Results of operations of the product lines divested or to be divested, before tax(2,449

)

(856

)

(4,165

)

(1,233

)

Operational improvement plan costs, before tax2,641

-

2,641

-

Adjusted EBITDA$

55,126

$

50,763

8.6

%

$

167,500

$

170,738

(1.9

%)

The following table summarizes the reconciliation between Operating Income(GAAP) and Adjusted EBITDA for the three and nine months ended September 30,2020 and 2019. Three Months Ended September Nine Months Ended September 30, 30, 2020 2019 % 2020 2019 % Change Change

Operating $ 41,155 $ 38,788 6.1 % $ 117,841 $ 135,576 (13.1 %)income (GAAP)Depreciation 12,309 13,965 36,831 41,706 andamortizationDepreciationandamortization, (49 ) (1,473 ) (145 ) (4,495 )product linesdivested orto bedivestedShare-basedcompensation 1,355 339 4,017 (816 )expense(income)Divestiture &other related 164 - 10,480 - costs, beforetaxResults ofoperations ofthe productlines (2,449 ) (856 ) (4,165 ) (1,233 )divested orto bedivested,before taxOperationalimprovement 2,641 - 2,641 - plan costs,before taxAdjusted $ 55,126 $ 50,763 8.6 % $ 167,500 $ 170,738 (1.9 %)EBITDA We have included each of these non-GAAP measures in order to provide additional information regarding our underlying operating results and comparable period-over-period performance. Such information is supplemental to information presented in accordance with GAAP and is not intended to represent a presentation in accordance with GAAP. These non-GAAP measures should not be considered in isolation. Rather, they should be considered together with GAAP measures and the rest of the information included in this release and our SEC filings. Management internally reviews each of these non-GAAP measures to evaluate performance on a comparative period-to-period basis and to gain additional insight into underlying operating and performance trends, and we believe the information can be beneficial to investors for the same purposes. These non-GAAP measures may not be comparable to similarly titled measures used by other companies. Category: Earnings

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