Business Wire | Apr 23, 2021 06:55AM EDT

Sensient Technologies Corporation Reports Results for the Quarter Ended March 31, 2021

Apr. 23, 2021

MILWAUKEE--(BUSINESS WIRE)--Apr. 23, 2021--Sensient Technologies Corporation (NYSE: SXT) reported consolidated revenue of $359.7 million in this year's first quarter compared to $350.7 million in last year's first quarter. Reported operating income in the first quarter of 2021 was $46.9 million compared to $34.6 million in the first quarter of 2020. Reported diluted earnings per share was 75 cents in the first quarter of 2021 compared to 49 cents in the first quarter of 2020. Foreign currency translation increased revenue and earnings per share by approximately 3% and 4%, respectively, in the quarter.

The 2021 first quarter reported results include divestiture & other related costs and operational improvement plan costs, which in total decreased first quarter net earnings by $3.1 million ($0.07 per diluted share). The 2020 first quarter results include divestiture & other related costs which decreased net earnings by $10.9 million ($0.26 per diluted share). The 2021 and 2020 first quarter results also include the operations of the product lines divested or to be divested, which increased diluted earnings per share by $0.05 in the first quarter of 2021 and $0.03 in the first quarter of 2020. These adjustments are described in more detail under "Reconciliation of Non-GAAP Amounts" at the end of this release.

BUSINESS REVIEW

Reported

Revenue Quarter

Flavors & Extracts 7.7%

Color -5.4%

Asia Pacific 11.1%

Total Revenue 2.6%



Adjusted

Local Currency ^(1)

Revenue Quarter

Flavors & Extracts 8.9%

Color -1.9%

Asia Pacific 4.7%

Total Revenue 4.0%

^(1) Adjusted local currency percentage changes are described in more detailin the "Reconciliation of Non-GAAP Amounts" at the end of this release. The Flavors & Extracts Group reported first quarter revenue of $200.9 million compared to $186.5 million reported in the comparable period last year, an increase of 7.7%. Adjusted local currency revenue increased 8.9% in the quarter. The higher revenue was the result of strong growth in all product categories. Segment operating income was $27.0 million in the current quarter compared to $20.9 million reported in the comparable period last year, an increase of 29.5%. Adjusted local currency operating income increased 21.2%. The Group's higher profit was primarily a result of the higher volumes, product mix from strong flavor sales, and the favorable impact of the Group's cost reduction initiatives. Foreign currency translation increased both segment revenue and operating income by approximately 2% in the quarter.

The Color Group reported revenue of $135.7 million in the quarter compared to $143.5 million in last year's comparable period, a decrease of 5.4%. Adjusted local currency revenue decreased 1.9% in the quarter. The Group continued to experience 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 continued lower demand for makeup due to the COVID-19 pandemic. Segment operating income was $26.6 million in the quarter compared to $29.7 million in last year's comparable period, a decrease of 10.3%. Adjusted local currency operating income decreased 13.3% compared to prior year's first quarter. The lower operating income is primarily a result of the lower volumes in personal care and unfavorable product mix in food & pharmaceutical colors. Foreign currency translation increased segment revenue and operating income by approximately 2% and 3%, respectively, in the quarter.

The Asia Pacific Group reported revenue of $33.8 million in the quarter compared to $30.4 million in last year's comparable period, an increase of 11.1%. Adjusted local currency revenue increased 4.7% in the quarter. Segment operating income was $6.8 million in the quarter compared to $5.1 million in last year's comparable quarter, an increase of 33.5%. Adjusted local currency operating income increased 31.4% in the quarter. The higher profit was primarily a result of the favorable volume growth combined with lower operating costs. Foreign currency translation increased segment revenue and operating income by approximately 6% and 1%, respectively, in the quarter.

Corporate & Other reported operating costs of $13.5 million in the current quarter compared to $21.0 million in last year's comparable period, a decrease of 36.0%. The lower costs are primarily due to lower divestiture & other costs reported in the first quarter of 2021 compared to the amount recorded in the first quarter of 2020. Adjusted local currency operating expenses for Corporate & Other increased 18.5% in the quarter primarily due to higher performance based executive compensation.

In April 2021, the Company completed the divestiture of its Fragrances product line.

2021 OUTLOOK

Sensient is reconfirming its previously issued 2021 guidance for GAAP diluted earnings per share to grow at a mid to high single digit growth rate compared to the Company's 2020 reported GAAP diluted earnings per share of $2.59. Our full year 2021 guidance includes approximately 30 cents per share of estimated divestiture & other related costs, the results of the operations to be divested, and the operational improvement plan costs.

The Company is also reconfirming its previously issued 2021 adjusted local currency revenue (2) to grow at a low to mid-single digit rate and adjusted local currency EBITDA (2) to grow at a mid-single digit rate. The Company also continues to expect, on a local currency basis, 2021 adjusted diluted earnings per share (2) to grow at a mid-single digit growth rate compared to the Company's 2020 adjusted diluted earnings per share of $2.79.

The Company expects earnings per share reported on a U.S. dollar basis to benefit by approximately ten cents based on current exchange rates.

The Company's guidance is based upon current trends, current tax law, 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.

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

USE OF NON-GAAP FINANCIAL MEASURES

The Company's non-GAAP financial measures eliminate the impact of certain items, which, depending on the measure, include, 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 or to be divested. These measures are provided 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.

CONFERENCE CALL

The Company will host a conference call to discuss its 2021 first quarter financial results at 8:30 a.m. CDT on Friday, April 23, 2021. 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 April 30, 2021, by calling (877) 344-7529 and referring to conference identification number 10153329. 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 April 27, 2021.

This release contains statements that may constitute "forward-looking statements" within the meaning of Federal securities laws including under "2021 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, the availability of 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, acquisition and divestiture activities, and operational improvement plan; 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, 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

Sensient Technologies Corporation(In thousands, except percentages and per share amounts)(Unaudited) Consolidated Statements of Earnings Three Months Ended March 31, 2021 2020 % Change

Revenue $ 359,702 $ 350,677 2.6%



Cost of products sold 244,089 238,784 2.2%

Selling and administrative expenses 68,716 77,332 (11.1%)



Operating income 46,897 34,561 35.7%

Interest expense 3,433 4,307



Earnings before income taxes 43,464 30,254

Income taxes 11,796 9,481



Net earnings $ 31,668 $ 20,773 52.4%

Earnings per share of common stock:Basic $ 0.75 $ 0.49

Diluted $ 0.75 $ 0.49

Average common shares outstanding:Basic 42,263 42,284

Diluted 42,389 42,307

Results by Segment Three Months Ended March 31,Revenue 2021 2020 % Change

Flavors & Extracts $ 200,911 $ 186,498 7.7%

Color 135,720 143,495 (5.4%)

Asia Pacific 33,840 30,449 11.1%

Intersegment elimination (10,769 ) (9,765 )



Consolidated $ 359,702 $ 350,677 2.6%





Operating Income

Flavors & Extracts $ 27,018 $ 20,871 29.5%

Color 26,594 29,664 (10.3%)

Asia Pacific 6,752 5,059 33.5%

Corporate & Other (13,467 ) (21,033 )



Consolidated $ 46,897 $ 34,561 35.7%

Sensient Technologies Corporation(In thousands)(Unaudited)Consolidated Condensed Balance SheetsMarch 31,

December 31,

2021

2020

Cash and cash equivalents$

28,000

$

24,770

Trade accounts receivable257,289

234,132

Inventories350,294

381,346

Prepaid expenses and other current assets51,978

48,578

Assets held for sale49,597

52,760

Total Current Assets737,158

741,586

Goodwill & intangible assets (net)427,453

434,220

Property, plant, and equipment (net)442,080

445,493

Other assets114,318

119,561

Total Assets$

1,721,009

$

1,740,860

Trade accounts payable$

101,225

$

107,324

Short-term borrowings6,057

9,247

Other current liabilities76,138

82,045

Liabilities held for sale15,353

17,339

Total Current Liabilities198,773

215,955

Long-term debt524,244

518,004

Accrued employee and retiree benefits29,198

28,941

Other liabilities43,148

43,624

Shareholders' Equity925,646

934,336

Total Liabilities and Shareholders' Equity$

1,721,009

$

1,740,860

Sensient Technologies Corporation(In thousands)(Unaudited) Consolidated Condensed Balance Sheets March 31, December 31,

2021 2020

Cash and cash equivalents $ 28,000 $ 24,770

Trade accounts receivable 257,289 234,132

Inventories 350,294 381,346

Prepaid expenses and other current assets 51,978 48,578

Assets held for sale 49,597 52,760

Total Current Assets 737,158 741,586

Goodwill & intangible assets (net) 427,453 434,220

Property, plant, and equipment (net) 442,080 445,493

Other assets 114,318 119,561

Total Assets $ 1,721,009 $ 1,740,860

Trade accounts payable $ 101,225 $ 107,324

Short-term borrowings 6,057 9,247

Other current liabilities 76,138 82,045

Liabilities held for sale 15,353 17,339

Total Current Liabilities 198,773 215,955

Long-term debt 524,244 518,004

Accrued employee and retiree benefits 29,198 28,941

Other liabilities 43,148 43,624

Shareholders' Equity 925,646 934,336

Total Liabilities and Shareholders' Equity $ 1,721,009 $ 1,740,860

Sensient Technologies Corporation(In thousands, except per share amounts)(Unaudited)Consolidated Statements of Cash Flows

Three Months Ended March 31,2021

2020

Cash flows from operating activities:Net earnings$

31,668

$

20,773

Adjustments to arrive at net cash provided by operating activities:Depreciation and amortization12,799

12,404

Share-based compensation expense2,113

1,177

Net loss on assets161

14

Loss on divestitures and other charges1,238

10,558

Deferred income taxes4,257

4,077

Changes in operating assets and liabilities:Trade accounts receivable(27,237

)

(41,684

)

Inventories27,621

29,058

Prepaid expenses and other assets(13,239

)

(6,048

)

Trade accounts payable and other accrued expenses(6,242

)

2,773

Accrued salaries, wages, and withholdings(10,872

)

1,611

Income taxes5,742

1,662

Other liabilities955

553

Net cash provided by operating activities28,964

36,928

Cash flows from investing activities:Acquisition of property, plant, and equipment(14,244

)

(9,411

)

Proceeds from sale of assets69

6

Proceeds from divestiture of businesses4,059

-

Other investing activities286

4,505

Net cash used in investing activities(9,830

)

(4,900

)

Cash flows from financing activities:Proceeds from additional borrowings21,530

9,669

Debt payments(8,999

)

(11,104

)

Purchase of treasury stock(11,665

)

-

Dividends paid(16,535

)

(16,500

)

Other financing activities(228

)

(249

)

Net cash used in financing activities(15,897

)

(18,184

)

Effect of exchange rate changes on cash and cash equivalents(7

)

(11,912

)

Net increase in cash and cash equivalents3,230

1,932

Cash and cash equivalents at beginning of period24,770

21,153

Cash and cash equivalents at end of period$

28,000

$

23,085

Supplemental InformationThree Months Ended March 31,2021

2020

Dividends paid per share$

0.39

$

0.39

Sensient Technologies Corporation(In thousands, except per share amounts)(Unaudited)

Consolidated Statements of Cash Flows

Three Months Ended March 31, 2021 2020

Cash flows from operating activities:Net earnings $ 31,668 $ 20,773

Adjustments to arrive at net cash provided byoperating activities:Depreciation and amortization 12,799 12,404

Share-based compensation expense 2,113 1,177

Net loss on assets 161 14

Loss on divestitures and other charges 1,238 10,558

Deferred income taxes 4,257 4,077

Changes in operating assets and liabilities:Trade accounts receivable (27,237 ) (41,684 )

Inventories 27,621 29,058

Prepaid expenses and other assets (13,239 ) (6,048 )

Trade accounts payable and other accrued expenses (6,242 ) 2,773

Accrued salaries, wages, and withholdings (10,872 ) 1,611

Income taxes 5,742 1,662

Other liabilities 955 553

Net cash provided by operating activities 28,964 36,928

Cash flows from investing activities:Acquisition of property, plant, and equipment (14,244 ) (9,411 )

Proceeds from sale of assets 69 6

Proceeds from divestiture of businesses 4,059 -

Other investing activities 286 4,505

Net cash used in investing activities (9,830 ) (4,900 )

Cash flows from financing activities:Proceeds from additional borrowings 21,530 9,669

Debt payments (8,999 ) (11,104 )

Purchase of treasury stock (11,665 ) -

Dividends paid (16,535 ) (16,500 )

Other financing activities (228 ) (249 )

Net cash used in financing activities (15,897 ) (18,184 )

Effect of exchange rate changes on cash and cash (7 ) (11,912 )equivalents Net increase in cash and cash equivalents 3,230 1,932

Cash and cash equivalents at beginning of period 24,770 21,153

Cash and cash equivalents at end of period $ 28,000 $ 23,085

Supplemental InformationThree Months Ended March 31, 2021 2020

Dividends paid per share $ 0.39 $ 0.39

Sensient Technologies Corporation(In thousands, except percentages and per share amounts)(Unaudited)Reconciliation of Non-GAAP AmountsThe Company's results for the three months ended March 31, 2021 and 2020 include adjusted revenue, adjusted operating income, adjusted net earnings, and adjusted diluted earnings per share, which exclude divestiture & other related costs, operational improvement plan costs, and the results of operations divested or to be divested.

Three Months Ended March 31,

2021

2020

% ChangeRevenue (GAAP)$

359,702

$

350,677

2.6%

Revenue of the product lines divested or to be divested(25,570

)

(36,585

)

Adjusted revenue$

334,132

$

314,092

6.4%

Operating income (GAAP)$

46,897

$

34,561

35.7%

Divestiture & other related costs - Cost of products sold25

190

Divestiture & other related costs - Selling and administrative expenses1,547

11,653

Operating income of the product lines divested or to be divested(2,927

)

(1,385

)

Operational improvement plan - Selling and administrative expenses1,001

-

Adjusted operating income$

46,543

$

45,019

3.4%

Net earnings (GAAP)$

31,668

$

20,773

52.4%

Divestiture & other related costs, before tax1,572

11,843

Tax impact of divestiture & other related costs793

(934

)

Net earnings of the product lines divested or to be divested, before tax(2,927

)

(1,385

)

Tax impact of the product lines divested or to be divested723

297

Operational improvement plan costs, before tax1,001

-

Tax impact of operational improvement plan(296

)

-

Adjusted net earnings$

32,534

$

30,594

6.3%

Diluted earnings per share (GAAP)$

0.75

$

0.49

53.1%

Divestiture & other related costs, net of tax0.06

0.26

Results of operations of the product lines divested or to be divested,net of tax(0.05

)

(0.03

)

Operational improvement plan costs, net of tax0.02

-

Adjusted diluted earnings per share$

0.77

$

0.72

6.9%

Note: Earnings per share calculations may not foot due to rounding differences.Results by SegmentThree Months Ended March 31,

AdjustedAdjustedRevenue

2021

Adjustments (1)

2021

2020

Adjustments (1)

2020

Flavors & Extracts$

200,911

$

(24,889

)

$

176,022

$

186,498

$

(27,445

)

$

159,053

Color135,720

(536

)

135,184

143,495

(9,072

)

134,423

Asia Pacific33,840

(295

)

33,545

30,449

(121

)

30,328

Intersegment elimination(10,769

)

150

(10,619

)

(9,765

)

53

(9,712

)

Consolidated$

359,702

$

(25,570

)

$

334,132

$

350,677

$

(36,585

)

$

314,092

Operating IncomeFlavors & Extracts$

27,018

$

(2,880

)

$

24,138

$

20,871

$

(1,218

)

$

19,653

Color26,594

40

26,634

29,664

(133

)

29,531

Asia Pacific6,752

(87

)

6,665

5,059

(34

)

5,025

Corporate & Other(13,467

)

2,573

(10,894

)

(21,033

)

11,843

(9,190

)

Consolidated$

46,897

$

(354

)

$

46,543

$

34,561

$

10,458

$

45,019

(1) For Revenue, adjustments consist of revenues of the product lines divested or to be divested. For Operating Income, adjustments consist of the results of the product lines divested or to be divested, divestiture & other related costs, and operational improvement plan costs.

Sensient Technologies Corporation(In thousands, except percentages and per share amounts)(Unaudited) Reconciliation of Non-GAAP Amounts The Company's results for the three months ended March 31, 2021 and 2020include adjusted revenue, adjusted operating income, adjusted net earnings, andadjusted diluted earnings per share, which exclude divestiture & other relatedcosts, operational improvement plan costs, and the results of operationsdivested or to be divested.



Three Months Ended March 31,

2021 2020 % Change

Revenue (GAAP) $ 359,702 $ 350,677 2.6%

Revenue of theproduct lines (25,570 ) (36,585 )divested or tobe divestedAdjusted $ 334,132 $ 314,092 6.4%revenue

Operating $ 46,897 $ 34,561 35.7%income (GAAP)Divestiture &other related 25 190 costs - Costof productssoldDivestiture &other relatedcosts - 1,547 11,653 Selling andadministrativeexpensesOperatingincome of the (2,927 ) (1,385 )product linesdivested or tobe divestedOperationalimprovementplan - Selling 1,001 - andadministrativeexpensesAdjusted $ 46,543 $ 45,019 3.4%operatingincome

Net earnings $ 31,668 $ 20,773 52.4%(GAAP)Divestiture &other related 1,572 11,843 costs, beforetaxTax impact ofdivestiture & 793 (934 )other relatedcostsNet earningsof the productlines divested (2,927 ) (1,385 )or to bedivested,before taxTax impact ofthe product 723 297 lines divestedor to bedivestedOperationalimprovement 1,001 - plan costs,before taxTax impact ofoperational (296 ) - improvementplanAdjusted net $ 32,534 $ 30,594 6.3%earnings

Diluted $ 0.75 $ 0.49 53.1%earnings pershare (GAAP)Divestiture &other related 0.06 0.26 costs, net oftaxResults ofoperations ofthe product lines divestedor to bedivested,net of tax (0.05 ) (0.03 )

Operationalimprovement 0.02 - plan costs,net of taxAdjusteddiluted $ 0.77 $ 0.72 6.9%earnings pershare

Note: Earnings per share calculations may not foot due to rounding differences.

Results by Three Months Ended March 31,Segment Adjusted Adjusted

Revenue 2021 Adjustments 2021 2020 Adjustments 2020 ^(1) ^(1)



Flavors & $ 200,911 $ (24,889 ) $ 176,022 $ 186,498 $ (27,445 ) $ 159,053 ExtractsColor 135,720 (536 ) 135,184 143,495 (9,072 ) 134,423

Asia Pacific 33,840 (295 ) 33,545 30,449 (121 ) 30,328

Intersegment (10,769 ) 150 (10,619 ) (9,765 ) 53 (9,712 )elimination

Consolidated $ 359,702 $ (25,570 ) $ 334,132 $ 350,677 $ (36,585 ) $ 314,092





Operating Income

Flavors & $ 27,018 $ (2,880 ) $ 24,138 $ 20,871 $ (1,218 ) $ 19,653 ExtractsColor 26,594 40 26,634 29,664 (133 ) 29,531

Asia Pacific 6,752 (87 ) 6,665 5,059 (34 ) 5,025

Corporate & (13,467 ) 2,573 (10,894 ) (21,033 ) 11,843 (9,190 )Other

Consolidated $ 46,897 $ (354 ) $ 46,543 $ 34,561 $ 10,458 $ 45,019



^(1) For Revenue, adjustments consist of revenues of the product lines divestedor to be divested. For Operating Income, adjustments consist of the results ofthe product lines divested or to be divested, divestiture & other relatedcosts, and operational improvement plan costs.

Sensient Technologies Corporation(In thousands, except percentages)(Unaudited)Reconciliation of Non-GAAP Amounts - Continued

The following table summarizes the percentage change in the 2021 results compared to the 2020 results for the corresponding periods.

Three Months Ended March 31,

RevenueTotal

Foreign Exchange Rates

Adjustments (2)

Adjusted Local Currency

Flavors & Extracts7.7%

2.4%

(3.6%)

8.9%

Color(5.4%)

2.4%

(5.9%)

(1.9%)

Asia Pacific11.1%

5.9%

0.5%

4.7%

Total Revenue2.6%

2.7%

(4.1%)

4.0%

Operating IncomeFlavors & Extracts29.5%

1.9%

6.4%

21.2%

Color(10.3%)

3.3%

(0.3%)

(13.3%)

Asia Pacific33.5%

1.3%

0.8%

31.4%

Corporate & Other(36.0%)

0.0%

(54.5%)

18.5%

Total Operating Income35.7%

4.1%

31.3%

0.3%

Diluted Earnings Per Share53.1%

4.1%

44.8%

4.2%

Adjusted EBITDA4.9%

2.8%

N/A

2.1%

(2) For Revenue, adjustments consist of revenues of the product lines divested or to be divested. For Operating Income, Diluted Earnings per Share, and Adjusted EBITDA, adjustments consist of the results of the product lines divested or to be divested, divestiture & other related costs, and operational improvement plan costs.Sensient Technologies Corporation(In thousands, except percentages)(Unaudited) Reconciliation of Non-GAAP Amounts - Continued

The following table summarizes the percentage change in the 2021 resultscompared to the 2020 results for the corresponding periods.

Three Months Ended March 31,

Total Foreign Exchange Adjustments Adjusted LocalRevenue Rates ^(2) Currency

Flavors & Extracts 7.7% 2.4% (3.6%) 8.9%

Color (5.4%) 2.4% (5.9%) (1.9%)

Asia Pacific 11.1% 5.9% 0.5% 4.7%

Total Revenue 2.6% 2.7% (4.1%) 4.0%



Operating Income

Flavors & Extracts 29.5% 1.9% 6.4% 21.2%

Color (10.3%) 3.3% (0.3%) (13.3%)

Asia Pacific 33.5% 1.3% 0.8% 31.4%

Corporate & Other (36.0%) 0.0% (54.5%) 18.5%

Total Operating 35.7% 4.1% 31.3% 0.3%IncomeDiluted Earnings 53.1% 4.1% 44.8% 4.2%Per ShareAdjusted EBITDA 4.9% 2.8% N/A 2.1%

^(2) For Revenue, adjustments consist of revenues of the product lines divestedor to be divested. For Operating Income, Diluted Earnings per Share, andAdjusted EBITDA, adjustments consist of the results of the product linesdivested or to be divested, divestiture & other related costs, and operationalimprovement plan costs.The following table summarizes the reconciliation between Operating Income (GAAP) and Adjusted EBITDA for the three months ended March 31, 2021 and 2020.Three Months Ended March 31,2021

2020

% ChangeOperating income (GAAP)$

46,897

$

34,561

35.7

%

Depreciation and amortization12,799

12,404

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

)

(80

)

Share-based compensation expense2,113

1,177

Divestiture & other related costs, before tax1,572

11,843

Results of operations of the product lines divested or to be divested, before tax(2,927

)

(1,385

)

Operational improvement plan costs, before tax1,001

-

Adjusted EBITDA$

61,406

$

58,520

4.9

%

The following table summarizes the reconciliation between Net cash provided by operating activities (GAAP) and Free Cash Flow for the three months ended March 31, 2021 and 2020.Three Months Ended March 31,2021

2020

% ChangeNet cash provided by operating activities (GAAP)$

28,964

$

36,928

(21.6

%)

Capital expenditures(14,244

)

(9,411

)

Free Cash Flow$

14,720

$

27,517

(46.5

%)

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

View source version on businesswire.com: https://www.businesswire.com/news/home/20210423005103/en/

CONTACT: Amy Agallar (414) 347-3706