UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number: 001-07626

(Exact name of registrant as specified in its charter)

777 EAST WISCONSIN AVENUE, MILWAUKEE, WISCONSIN 53202-5304

(Address of principal executive offices)

Smaller Reporting Company ☐

SENSIENT TECHNOLOGIES CORPORATION

PART I.

FINANCIAL INFORMATION

ITEM 1.

FINANCIAL STATEMENTS

SENSIENT TECHNOLOGIES CORPORATION

CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS

(In thousands except per share amounts)

SENSIENT TECHNOLOGIES CORPORATION

CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME

SENSIENT TECHNOLOGIES CORPORATION

CONSOLIDATED CONDENSED BALANCE SHEETS

SENSIENT TECHNOLOGIES CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

See accompanying notes to consolidated condensed financial statements.

SENSIENT TECHNOLOGIES CORPORATION

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(In thousands, except share and per share amounts)

Nine Months Ended September 30, 2019

Three Months Ended March 31, 2019

Three Months Ended September 30, 2019

Nine Months Ended September 30, 2018

Three Months Ended September 30, 2018

Three Months Ended March 31, 2020

See accompanying notes to consolidated condensed financial statements.

SENSIENT TECHNOLOGIES CORPORATION

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

1.	Accounting Policies

In the opinion of Sensient Technologies Corporation (the ~~“Company”)~~Company), the accompanying unaudited consolidated condensed financial statements contain all adjustments (consisting of only normal recurring adjustments) that are necessary to present fairly the financial position of the Company as of ~~September 30, 2019,~~March 31,2020, and the results of operations, comprehensive income, cash flows, and shareholders’ equity for the three ~~and nine~~ months ended ~~September 30, 2019~~March 31,2020 and ~~2018, and cash flows for the nine months ended September 30, 2019 and 2018.~~2019. The results of operations for any interim period are not necessarily indicative of the results to be expected for the full year.

The preparation of financial statements in conformity with U.S. generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Expenses are charged to operations in the period incurred.

Please refer to the notes in the Company’s annual consolidated financial statements for the year ended December 31, ~~2018,~~2019, for additional details of the Company’s financial condition and a description of the Company’s accounting policies, which have been continued without change, except for the Company’s ~~Lease and Derivative Financial Instruments~~Accounts Receivable accounting ~~policies. These policies were~~policy. This policy was updated in the first quarter of 2020 as a result of the Company’s adoption of Accounting Standards Update (ASU) No. ~~2016-02,~~ 2016~~Leases~~-13,Financial Instruments - Credit Losses (Topic ~~842)~~,326): Measurement of Credit Losses on Financial Instruments, and ~~ASU No. 2017-12,~~ ~~Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities,~~ ~~in the first quarter of 2019 and are~~is described below.

~~Leases~~Accounts Receivable

Receivables are recorded at their face amount, less an allowance for losses on doubtful accounts. The ~~Company enters into lease agreements~~allowance for ~~certain office space, warehouses, land, and equipment in the ordinary course of business. The Company determines if an arrangement~~doubtful accounts is a lease at inception and evaluates the lease classification (i.e., operating lease or financing lease) at that time. Lease arrangements with an initial term of 12 months or less are considered short-term leases and are not recorded on the balance sheet. The Company recognizes lease expense for these leases on a straight-line basis over the term of the lease.

~~Operating leases are included in~~ ~~Other Assets~~, ~~Other Accrued Expenses, and~~ ~~Other Liabilities~~ on the Company’s Consolidated Condensed Balance Sheet. Operating lease right-of-use assets represent our right to use an underlying asset for the lease term, and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease right-of-use assets and liabilities are recognized at the commencement date based on customer-specific analysis and expected future credit losses based on historical experience, current conditions, and expected future conditions. Specific accounts are written off against the ~~present value of lease payments over~~allowance for doubtful accounts when the ~~lease term.~~

The Company uses its incremental borrowing rate on the commencement date for determining the present value of lease payments. The Company considers the likelihood of exercising options to extend or terminate the lease when determining the lease term.

The Company has lease agreements with lease and non-lease components. The Company has elected the practical expedient of accounting for the lease and non-lease components of each lease as a single lease component.

~~Derivative Financial Instruments~~

The Company selectively uses derivative financial instruments to reduce market risk associated with changes in foreign currency and interest rate exposures that exist as part of ongoing business operations. All derivative transactions are authorized and executed pursuant to the Company’s risk management policies and procedures, which strictly prohibit the use of financial instruments for speculative trading purposes.

The primary objectives of the foreign exchange risk management activities are to understand and mitigate the impact of potential foreign exchange fluctuations on the Company’s financial results and its economic well-being. Changes in the fair value of derivatives that are designated as fair value hedges, along with the gain or loss on the hedged item, are recorded in current period earnings. Generally, these risk management transactions may involve the use of foreign currency derivatives to protect against exposure resulting from recorded accounts receivable and payable. The Company may utilize forward exchange contracts, generally with maturities of less than 18 months, that qualify as cash flow hedges. Generally, these foreign exchange contracts are intended to offset the effect of exchange rate fluctuations on non-functional currency denominated sales and purchases. For derivative instruments that are designated as cash flow hedges, gains and losses, including any hedge ineffectiveness, are deferred in accumulated other comprehensive income (OCI) until the underlying transaction is ~~recognized in earnings.~~

Hedge effectiveness is determined by how closely the changes in the fair value of the hedging instrument offset the changes in the fair value or cash flows of the hedged item. Hedge accounting is permitted only if the hedging relationship is expected to be highly effective at the inception of the transaction and on an ongoing basis.deemed no longer collectible.

Recently Adopted Accounting Pronouncements

In ~~February~~ June 2016, the Financial Accounting Standards Board (FASB) issued ASU No. ~~2016-02,~~ 2016~~Leases (Topic 842)~~-, which requires lessees to recognize the lease assets and liabilities that arise from leases on the balance sheet and to disclose qualitative and quantitative information about lease transactions. In July 2018, the FASB issued ASU No. 2018-11, 13,~~Leases (Topic 842)~~: ~~Targeted Improvements~~, which provides an additional transition method allowing entities to apply the new lease standard at the adoption date. The Company adopted each of these standards in the first quarter of 2019 using the optional transition method allowed under ASU No. 2018-11. The Company elected the following practical expedients permitted within the standard:

~~The Company will not re-assess an expired or existing contract to determine if it is a lease or contains a lease.~~

~~The Company will not re-assess the lease classification for an existing lease based on the new standard’s lease classification criteria.~~

~~The Company will not re-assess the accounting treatment for initial direct costs on existing leases based on the new standard’s guidance.~~

~~The Company will account for the lease and non-lease components as a single lease component for all leases.~~

The adoption of this standard resulted in the recognition of $20.7 million in right-of-use assets and lease liabilities for operating leases as of January 1, 2019. The adoption of this standard did not have an impact on the Company’s Consolidated Statements of Earnings, or to cash provided by or used in operating, financing, or investing activities on the Company’s Consolidated Statements of Cash Flows.

~~In August 2017, the FASB issued ASU No. 2017-12,~~ ~~Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities~~, which expands an entity’s ability to hedge non-financial and financial risk components and reduce complexity in fair value hedges of interest rate risk. This guidance eliminates the requirement to separately measure and report hedge ineffectiveness and generally requires the entire change in the fair value of a hedging instrument to be presented in the same income statement line item as the hedged item. This ASU is effective for fiscal years and interim periods beginning after December 15, 2018. The Company adopted this standard in the first quarter of 2019, and the adoption did not have a material impact on the Company’s consolidated financial statements.

~~Recently Issued Accounting Pronouncements~~

~~In June 2016, the FASB issued ASU No. 2016-13,~~ Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which replaces the ~~current~~ incurred loss impairment model with a methodology that reflects expected credit losses. Under the new ~~methodology,~~standard, entities ~~will be~~are required to measure expected credit losses on financial instruments held at amortized cost, including trade receivables, based on historical experience, current conditions, and reasonable forecasts. Adoption of this guidance is required for interim and annual periods beginning after December 15, 2019, with early adoption permitted for interim and annual periods beginning after December 15, 2018. For most instruments, entities must apply the standard using a cumulative effect adjustment to beginning retained earnings as of the beginning of the fiscal year of adoption. The Company ~~has established a project plan and an implementation team to adopt and apply the new standard. The Company is~~adopted this standard in the ~~process~~first quarter of ~~implementing necessary changes to accounting policies, processes, controls, and systems to enable compliance with this new standard.~~2020. The ~~Company continues to evaluate the impact the~~ adoption of this standard ~~will~~resulted in an increase of $0.9 million to the allowance for losses on Trade Accounts Receivable and a corresponding decrease in Earnings Reinvested in the Business as of January 1,2020. The adoption of this standard did not have an impact on ~~its~~the Company’s Consolidated ~~Financial~~Condensed Statements ~~and related disclosures.~~of Earnings, or to cash provided by or used in operating, financing, or investing activities on the Company’s Consolidated Statements of Cash Flows.

In January 2017, the FASB issued ASU No. ~~2017-04,~~ 2017-04,Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment, which eliminates step two of the current goodwill impairment test and specifies that goodwill impairment should be measured by comparing the fair value of a reporting unit with its carrying amount. ~~This standard will be applied prospectively and is effective for annual or interim goodwill impairment tests performed in fiscal years beginning after December 15, 2019. Early adoption is permitted.~~ The Company ~~is currently evaluating~~adopted this standard in the ~~expected~~first quarter of 2020, and the adoption did not have a material impact ~~of this standard.~~on the Company’s consolidated financial statements.

In August 2018, the FASB issued ASU No. ~~2018-13~~2018, -13,Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement, which changes the requirements for fair value measurements by removing, modifying, and adding certain disclosures. ~~Adoption~~The Company adopted this standard in the first quarter of ~~this guidance~~2020, and the adoption did not have a material impact on the Company’s consolidated financial statements or its related disclosures.

Recently Issued Accounting Pronouncements

In August 2018, the FASB issued ASU No. 2018-14, Disclosure Framework – Changes to the Disclosure Requirements for Defined Benefit Plans Subtopic 715-20, which amends Accounting Standards Codification (ASC) 715-20,Compensation – Retirement Benefits – Defined Benefit Plans – General. This standard modifies the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans by removing and adding certain disclosures for these plans. The effective date is ~~required for~~January 1, ~~interim and annual periods beginning after December 15, 2019,~~2021, with early adoption permitted. The Company is currently evaluating the ~~expected~~potential impact of this ~~standard.~~standard on its disclosures.

In March 2020, the FASB issued ASU No. 2020-04,Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides temporary optional expedients and exceptions to US GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens of the expected market transition from LIBOR and other interbank offered rates to alternative rates. The guidance is effective upon issuance and generally can be applied through December 31,2022. The Company is currently evaluating the potential impact of this standard on its consolidated financial statements and its related disclosures.

2.	~~Acquisitions~~Divestitures

~~On March 9, 2018,~~In October 2019, the Company ~~completed~~announced its intent to divest its inks, fragrances (excluding its essential oils product line), and yogurt fruit preparations product lines. In October 2019, the ~~acquisition~~Board of ~~certain net assets and~~Directors approved the ~~natural color business of~~ ~~GlobeNatural,~~ ~~a company based in Lima, Peru. The Company paid $10.8 million of cash for this acquisition. The assets acquired and liabilities assumed were recorded at their estimated fair values as~~sale of the acquisition date. The Company acquired net assets of $1.4 million and identified intangible assets, principally customer relationships of $2.0 million, and allocated the remaining $7.4 million to goodwill. These operations are included in the Color segment.

~~On July 10, 2018, the Company completed the acquisition of~~ ~~Mazza Innovation Limited~~, a botanical extraction business with patented solvent-free extraction processes, located in Vancouver, Canada. The Company paid $19.8 million of cash for this acquisition. The assets acquired and liabilities assumed were recorded at their estimated fair values as of the acquisition date. The Company acquired net assets of $4.0 million and identified intangible assets, principally technological know-how, of $6.9 million. The remaining $8.9 million was allocated to goodwill. This business was included in Corporate & Other in 2018. Beginning in the first quarter of 2019, the results of operations of this business are now reported ininks product line, which is within the Color segment. The ~~results~~Company has signed a memorandum of understanding with a potential buyer. In November 2019, the Board of Directors approved the sale of the fragrances product line (excluding its essential oils product line), which is within the Flavors & Fragrances segment. The Company has signed a memorandum of understanding with a potential buyer. As a result, the Company met all of the assets held for ~~2018 have been restated~~sale criteria for the inks and fragrances disposal groups. The divesting and exit of these products lines does not meet the criteria to ~~reflect this~~be presented as a discontinued operation on the Consolidated Condensed Statements of Earnings.

As of March 31,2020, the yogurt fruit preparations product line, which is included in the Flavors & Fragrances segment, did not meet all of the assets held for sale criteria. Subsequent to March 31,2020, the Board of Directors approved the sale of the yogurt fruit preparations product line. See Note 12,Subsequent Events, for further information.

The assets and liabilities related to the inks and fragrances product lines are recorded in Assets held for sale and Liabilities held for sale as of March 31,2020 and December 31,2019, as follows:

(in thousands)	March 31, 2020		December 31, 2019
Assets held for sale:
Trade accounts receivable, net	$	34,610	$	31,653
Inventories		30,104		34,612
Prepaid expenses and other current assets		6,628		5,528
Property, Plant, and Equipment, net		4,643		14,496
Intangible assets, net		2,627		5,004
Assets held for sale	$	78,612	$	91,293

Liabilities held for sale:
Trade accounts payable	$	13,532	$	12,318
Accrued salaries, wages and withholdings from employees		1,222		1,677
Other accrued expenses		5,067		5,190
Liabilities held for sale	$	19,821	$	19,185

During the year ended December 31,2019, the Company estimated that the fair value of the inks product line less costs to sell was lower than its carrying value resulting in a non-cash impairment charge of $15.8 million. As of March 31,2020, the Company revised its estimate of the fair value of the inks product line based on indicative bids resulting in an additional non-cash impairment charge of $9.4 million recorded in Selling and Administrative Expenses during the three months ended March 31,2020. The charge adjusted the carrying value of certain long-lived assets, primarily property, plant, and equipment, intangible assets and allocated goodwill, to their estimated fair value. This estimate will be finalized and adjusted as necessary upon the closing of the sale or as estimates change. In addition, the Company currently estimates a non-cash gain of $6 million to $8 million upon closing the transaction related to the reclassification of accumulated foreign currency translation and related items from Accumulated Other Comprehensive Loss to Selling and Administrative Expenses in the Consolidated Condensed Statements of Earnings.

During the year ended December 31,2019, the Company estimated that the fair value of the fragrances product line less costs to sell was lower than its carrying value resulting in a non-cash impairment charge of $18.2 million. As of March 31,2020, the Company revised its estimate of the fair value of the fragrances product line based on indicative bids resulting in an additional non-cash impairment charge of $0.3 million recorded in Selling and Administrative Expenses during the three months ended March 31,2020. The charge adjusted the carrying value of certain long-lived assets, primarily property, plant and equipment and allocated goodwill, to their estimated fair value. This estimate will be finalized and adjusted as necessary upon the closing of the sale or as estimates change. In addition, the Company currently estimates an additional non-cash charge of $10 million to $12 million upon closing related to the reclassification of accumulated foreign currency translation and related items from Accumulated Other Comprehensive Loss (OCI) to Selling and Administrative Expenses in the Consolidated Condensed Statement of Earnings.

In March 2020, the Company was notified by a potential buyer of the Company’s fragrances product line that environmental sampling conducted at the Company’s Granada, Spain, location had identified the presence of contaminants in soil and groundwater in certain areas of the property. The Company is in the process of conducting its own environmental investigation to confirm the presence and extent of these contaminants and plans to perform a quantitative risk assessment to determine whether or what remedial action is required under Spanish law. At the conclusion of this work, if necessary, the Company intends to report any confirmed contamination, along with a remediation plan to address the contamination, if necessary, to the relevant Spanish authorities. Due to the impacts of COVID-19 in Spain, the Company has not been able to conduct a quantitative assessment of the issues identified in the environmental sampling. Consequently, the Company is unable to quantify any potential remediation costs at this time.

The Company also incurred $1.3 million of other divestiture and exit related costs, primarily severance and legal expenses, and $0.6 million of non-cash expenses charge related to other exit activities in the period ended March 31,2020, which is recorded in Selling and Administrative Expenses. Also during the period, the Company recorded a non-cash charge of $0.2 million in Costs of Products Sold related to the value of certain inventories.

Excluding any potential remediation costs associated with the Granada, Spain, location of the fragrances product line, which the Company is unable to quantify at this time as discussed above, the Company expects total cash costs in 2019 and 2020 associated with the anticipated divestitures of all three product lines to be between $7 million and $10 million, primarily related to severance and other exit activities.

3.	Trade Accounts Receivable

Trade accounts receivables are recorded at their face amount, less an allowance for expected losses on doubtful accounts. The allowance for doubtful accounts is calculated based on customer-specific analysis and an aging methodology using historical loss information. The Company believes historical loss information is a reasonable basis for expected credit losses as the Company’s historical credit loss experience correlates with its customer delinquency status. This information is also adjusted for any known current economic conditions including the current and expected impact of COVID-19. Currently, the COVID-19 pandemic is not anticipated to have a material impact on trade accounts receivable. Forecasted economic conditions do not have a significant impact on the current credit loss estimate due to the short-term nature of the Company’s customer receivables, however, the Company will continue to monitor and evaluate the rapidly changing economic conditions. Additionally, as the Company only has 1 portfolio segment, there are not different risks between portfolios. Specific accounts are written off against the allowance for doubtful accounts when the receivable is deemed no longer collectible.

The following table summarizes the changes in the allowance for doubtful accounts during the three month period ended March 31,2020:

(In thousands)	Allowance for Doubtful Accounts
Balance at December 31, 2019	$	6,913
Adoption of ASU 2016-13		853
Provision for expected credit losses		240
Accounts written off		(336	)
Translation and other activity		(643	)
Balance at March 31, 2020	$	7,027

4.	Inventories

At March 31, 2020, and December 31, 2019, inventories included finished and in-process products totaling $282.9 million and $313.1 million, respectively, and raw materials and supplies of $101.3 million and $109.4 million, respectively.

~~Accounting Standards Codification (ASC)~~ASC 820,Fair Value Measurement, defines fair value for financial assets and liabilities, establishes a framework for measuring fair value in GAAP, and expands disclosures about fair value measurements. As of March 31, 2020 and December 31, 2019, the Company’s assets and liabilities subject to this standard are forward exchange contracts. The net fair value of the forward exchange contracts based on current pricing obtained for comparable derivative products (Level 2 inputs) was a liability of $1.8 million and $0.1 million as of March 31, 2020 and December 31, 2019, respectively. The carrying values of the Company’s cash and cash equivalents, trade accounts receivable, trade accounts payable, accrued expenses, and short-term borrowings were approximately the same as the fair values as of ~~September 30, 2019.~~March 31, 2020. The fair value of the Company’s long-term debt, including current maturities, is estimated using discounted cash flows based on the Company’s current incremental borrowing rates for similar types of borrowing arrangements (Level 2 inputs). The carrying value of the long-term debt at ~~September 30, 2019,~~March 31, 2020 was ~~$617.0~~$589.3 million. The fair value of the long-term debt at ~~September 30, 2019,~~March 31, 2020 was ~~$636.3~~$589.7 million.

During the fourth quarter of 2019, the Company met the assets held for sale criteria for its inks and fragrances product lines. During the first quarter of 2020, the estimated fair value of the disposal groups was updated to $59.0 million, resulting in the recording of an additional impairment of $9.7 million in the three months ended March 31, 2020. The fair value of these product lines were determined based on indicative bids, which are classified as Level 3 inputs in the fair value measurement hierarchy. See Note 2, Divestitures, for further information.

4.6.	Segment Information

Operating results by segment for the periods presented are as follows:

(In thousands)
Flavors &
Fragrances
Color
Asia
Pacific

Corporate
& Other
Consolidated
Three months ended September 30, 2019:

Revenue from external customers $ 163,870 $ 123,710 $ 30,070 $ - $ 317,650
Intersegment revenue 3,707 3,295 55 - 7,057
Total revenue $ 167,577 $ 127,005 $ 30,125 $ - $ 324,707

Operating income (loss) $ 17,600 $ 23,436 $ 5,406 $ (7,654 ) $ 38,788
Interest expense - - - 4,936 4,936
Earnings (loss) before income taxes $ 17,600 $ 23,436 $ 5,406 $ (12,590 ) $ 33,852

Three months ended September 30, 2018:

Revenue from external customers $ 179,103 $ 132,356 $ 31,275 $ - $ 342,734
Intersegment revenue 5,294 2,774 - - 8,068
Total revenue $ 184,397 $ 135,130 $ 31,275 $ - $ 350,802

Operating income (loss) $ 24,814 $ 26,565 $ 5,750 $ (6,865 ) $ 50,264
Interest expense - - - 5,407 5,407
Earnings (loss) before income taxes $ 24,814 $ 26,565 $ 5,750 $ (12,272 ) $ 44,857

(In thousands)	Flavors & Fragrances		Color		Asia Pacific		Corporate & Other			Consolidated		Flavors & Fragrances		Color		Asia Pacific		Corporate & Other			Consolidated
Nine months ended September 30, 2019:
Three months ended March 31, 2020:
Revenue from external customers	$	517,148	$	399,610	$	87,591	$	-		$	1,004,349	$	181,187	$	139,193	$	30,297	$	-		$	350,677
Intersegment revenue		14,116		10,186		55		-			24,357		5,311		4,302		152		-			9,765
Total revenue	$	531,264	$	409,796	$	87,646	$	-		$	1,028,706	$	186,498	$	143,495	$	30,449	$	-		$	360,442

Operating income (loss)	$	60,775	$	81,512	$	13,825	$	(20,536	)	$	135,576	$	20,871	$	29,664	$	5,059	$	(21,033	)	$	34,561
Interest expense		-		-		-		15,538			15,538		-		-		-		4,307			4,307
Earnings (loss) before income taxes	$	60,775	$	81,512	$	13,825	$	(36,074	)	$	120,038	$	20,871	$	29,664	$	5,059	$	(25,340	)	$	30,254

Nine months ended September 30, 2018:
Three months ended March 31, 2019:
Revenue from external customers	$	553,403	$	416,786	$	92,063	$	-		$	1,062,252	$	178,744	$	140,250	$	28,519	$	-		$	347,513
Intersegment revenue		17,998		9,795		-		-			27,793		4,809		3,629		-		-			8,438
Total revenue	$	571,401	$	426,581	$	92,063	$	-		$	1,090,045	$	183,553	$	143,879	$	28,519	$	-		$	355,951

Operating income (loss)	$	74,142	$	91,370	$	15,256	$	(22,642	)	$	158,126	$	23,125	$	30,199	$	4,218	$	(8,122	)	$	49,420
Interest expense		-		-		-		16,517			16,517		-		-		-		5,402			5,402
Earnings (loss) before income taxes	$	74,142	$	91,370	$	15,256	$	(39,159	)	$	141,609	$	23,125	$	30,199	$	4,218	$	(13,524	)	$	44,018

The Company evaluates performance based on operating income before divestiture and other related costs, restructuring and other charges, interest expense, and income taxes (segment operating income). Total revenue and segment operating income by business segment and geographic region include both sales to customers, as reported in the Company’s Consolidated Condensed Statements of Earnings, and intersegment sales, which are accounted for at prices that approximate market prices and are eliminated in consolidation. The 2020 divestiture and other related costs, which pertain to the anticipated divestitures of the ~~respective segments before~~Company’s inks, fragrances (excluding its essential oils product line), and yogurt fruit preparations product lines, are reported in Corporate & Other. There were no divestiture and other related costs or restructuring and other costs ~~interest expense, and income taxes. There were no restructuring and other costs incurred in either the first nine months of 2019 or 2018.~~

~~In July 2018, the Company completed the acquisition of~~ ~~Mazza Innovation Limited~~ ~~(See Note 2,~~ ~~Acquisitions, for further information). This business was included in Corporate & Other in 2018. Beginning~~ in the first ~~quarter~~three months of ~~2019, the results of operations of this business are now reported in the Color segment. The results for 2018 have been restated to reflect this change.~~2019.

In addition to evaluating the Company’s performance based on the segments above, revenue is also disaggregated and analyzed by product line and geographic market. The following tables display the Company’s revenue by these major sources.

~~Product Lines~~During the first quarter of 2020, the Company updated its product line disclosures as a result of its previous announcement regarding its intent to divest its inks, fragrances (excluding its essential oils product line), and yogurt fruit preparations product lines.

Flavors, Extracts & Flavor Ingredients now includes essential oils, which was previously reported in Fragrances. Fragrances now only includes the aroma chemicals and fragrance compounds product lines. Yogurt Fruit Preparations is now disclosed separately; previously it was reported in the Flavors product line.

(In thousands)
Flavors &
Fragrances
Color
Asia
Pacific
Consolidated
Three months ended September 30, 2019:

Flavors $ 89,604 $ - $ - $ 89,604
Natural Ingredients 53,220 - - 53,220
Fragrances 24,753 - - 24,753
Food & Beverage Colors - 73,383 - 73,383
Cosmetics - 32,080 - 32,080
Other Colors - 21,542 - 21,542
Asia Pacific - - 30,125 30,125
Intersegment Revenue (3,707 ) (3,295 ) (55 ) (7,057 )
Total revenue from external customers $ 163,870 $ 123,710 $ 30,070 $ 317,650

Three months ended September 30, 2018:

Flavors $ 98,060 $ - $ - $ 98,060
Natural Ingredients 58,140 - - 58,140
Fragrances 28,197 - - 28,197
Food & Beverage Colors - 76,524 - 76,524
Cosmetics - 35,466 - 35,466
Other Colors - 23,140 - 23,140
Asia Pacific - - 31,275 31,275
Intersegment Revenue (5,294 ) (2,774 ) - (8,068 )
Total revenue from external customers $ 179,103 $ 132,356 $ 31,275 $ 342,734
Food & Beverage Colors now includes pharmaceutical colors and natural extraction, which were previously reported in Other Colors. Personal Care includes cosmetic and non-food colors. Inks is now disclosed separately; previously it was reported in Other Colors.

The results for 2019 have been restated to reflect these changes.

Product Lines

(In thousands)	Flavors & Fragrances			Color			Asia Pacific			Consolidated
Three months ended March 31, 2020:
Flavors, Extracts & Flavor Ingredients	$	101,453		$	-		$	-		$	101,453
Natural Ingredients		57,600			-			-			57,600
Fragrances		22,284			-			-			22,284
Yogurt Fruit Preparations		5,161			-			-			5,161
Food & Beverage Colors		-			90,793			-			90,793
Personal Care		-			43,743			-			43,743
Inks		-			8,959			-			8,959
Asia Pacific		-			-			30,449			30,449
Intersegment Revenue		(5,311	)		(4,302	)		(152	)		(9,765	)
Total revenue from external customers	$	181,187		$	139,193		$	30,297		$	350,677

(In thousands)
Flavors &
Fragrances
Color
Asia
Pacific
Consolidated
Nine months ended September 30, 2019:

Flavors $ 295,375 $ - $ - $ 295,375
Natural Ingredients 156,864 - - 156,864
Fragrances 79,025 - - 79,025
Food & Beverage Colors - 233,121 - 233,121
Cosmetics - 106,218 - 106,218
Other Colors - 70,457 - 70,457
Asia Pacific - - 87,646 87,646
Intersegment Revenue (14,116 ) (10,186 ) (55 ) (24,357 )
Total revenue from external customers $ 517,148 $ 399,610 $ 87,591 $ 1,004,349

Nine months ended September 30, 2018:

Flavors $ 322,333 $ - $ - $ 322,333
Natural Ingredients 167,538 - - 167,538
Fragrances 81,530 - - 81,530
Food & Beverage Colors - 230,807 - 230,807
Cosmetics - 121,697 - 121,697
Other Colors - 74,077 - 74,077
Asia Pacific - - 92,063 92,063
Intersegment Revenue (17,998 ) (9,795 ) - (27,793 )
Total revenue from external customers $ 553,403 $ 416,786 $ 92,063 $ 1,062,252

Three months ended March 31, 2019:
Flavors, Extracts & Flavor Ingredients	$	103,528		$	-		$	-	$	103,528
Natural Ingredients		51,219			-			-		51,219
Fragrances		23,267			-			-		23,267
Yogurt Fruit Preparations		5,539			-			-		5,539
Food & Beverage Colors		-			88,848			-		88,848
Personal Care		-			44,921			-		44,921
Inks		-			10,110			-		10,110
Asia Pacific		-			-			28,519		28,519
Intersegment Revenue		(4,809	)		(3,629	)		-		(8,438	)
Total revenue from external customers	$	178,744		$	140,250		$	28,519	$	347,513

Geographic Markets

(In thousands)	Flavors & Fragrances			Color		Asia Pacific		Consolidated		Flavors & Fragrances		Color		Asia Pacific		Consolidated
Three months ended September 30, 2019:
Three months ended March 31, 2020:
North America	$	109,659		$	60,801	$	25	$	170,485	$	116,701	$	66,265	$	-	$	182,966
Europe		35,964			33,027		132		69,123		43,877		38,738		22		82,637
Asia Pacific		7,002			12,903		29,731		49,636		9,355		15,975		29,122		54,452
Other		11,245			16,979		182		28,406		11,254		18,215		1,153		30,622
Total revenue from external customers	$	163,870		$	123,710	$	30,070	$	317,650	$	181,187	$	139,193	$	30,297	$	350,677

Three months ended September 30, 2018:
Three months ended March 31, 2019:
North America	$	118,690		$	63,945	$	-	$	182,635	$	112,747	$	66,007	$	25	$	178,779
Europe		42,866			34,929		81		77,876		48,001		42,135		41		90,177
Asia Pacific		7,053			15,910		31,032		53,995		7,609		16,425		28,266		52,300
Other		10,494	��		17,572		162		28,228		10,387		15,683		187		26,257
Total revenue from external customers	$	179,103		$	132,356	$	31,275	$	342,734	$	178,744	$	140,250	$	28,519	$	347,513

~~Geographic Markets~~

(In thousands)
Flavors &
Fragrances
Color
Asia
Pacific
Consolidated
Nine months ended September 30, 2019:

North America $ 335,521 $ 192,109 $ 87 $ 527,717
Europe 125,288 113,844 280 239,412
Asia Pacific 24,041 44,440 86,719 155,200
Other 32,298 49,217 505 82,020
Total revenue from external customers $ 517,148 $ 399,610 $ 87,591 $ 1,004,349

Nine months ended September 30, 2018:

North America $ 364,941 $ 191,265 $ - $ 556,206
Europe 133,257 119,687 111 253,055
Asia Pacific 23,144 50,461 91,327 164,932
Other 32,061 55,373 625 88,059
Total revenue from external customers $ 553,403 $ 416,786 $ 92,063 $ 1,062,252

At September 30, 2019, and December 31, 2018, inventories included finished and in-process products totaling $318.7 million and $320.4 million, respectively, and raw materials and supplies of $151.4 million and $170.4 million, respectively.

6.7.	Retirement Plans

The Company’s components of annual benefit cost for the defined benefit plans for the periods presented are as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended March 31,
(In thousands)	2019			2018			2019			2018			2020			2019

Service cost	$	358		$	366		$	1,076		$	1,100		$	400		$	359
Interest cost		315			282			954			857			256			320
Expected return on plan assets		(224	)		(236	)		(684	)		(722	)		(209	)		(231	)
Recognized actuarial gain		(40	)		(27	)		(118	)		(81	)

Recognized actuarial loss (gain)														16			(39	)
Total defined benefit expense	$	409		$	385		$	1,228		$	1,154		$	463		$	409

The Company’s non-service cost portion of defined benefit expense is recorded in Interest Expense on the Company’s Consolidated Condensed Statements of Earnings. The Company’s service cost portion of defined benefit expense is recorded in Selling and Administrative Expenses on the Company’s Consolidated Condensed Statements of Earnings.

The Company leases certain office space, warehouses, land, and equipment under operating lease arrangements. Some of the Company’s leases include options to extend the leases for up to an additional five years. Some of the Company’s lease agreements also include rental payments that are adjusted periodically for inflation (i.e., CPI index).

~~The Company recorded operating lease expense, which includes short-term lease expense and variable lease costs, of~~ ~~$2.7 million~~ ~~and~~ ~~$8.5 million~~ ~~for the~~ ~~three~~ ~~and~~ ~~nine~~ ~~months ended September~~ ~~30, 2019,~~ ~~respectively.~~

~~For the~~ ~~nine~~ ~~months ended September~~ ~~30,2019,~~ ~~the Company paid~~ ~~$7.4 million~~ ~~in cash for operating leases, not including short-term lease expense or variable lease costs. The Company entered into operating leases that resulted in~~ ~~$6.5 million~~ ~~of right-of-use assets in exchange for operating lease obligations for the~~ ~~nine~~ ~~months ended September~~ ~~30, 2019.~~

~~The Company included~~ ~~$20.1 million~~ ~~of right-of-use assets in~~ ~~Other Assets~~ ~~and~~ ~~$8.0 million~~ ~~and~~ ~~$12.1 million~~ ~~of operating lease liabilities in~~ ~~Other Accrued Expenses~~ ~~and~~ ~~Other Liabilities, respectively, on the Company’s Consolidated Condensed Balance Sheets as of September~~ ~~30, 2019.~~

~~The Company’s weighted average remaining operating lease term was~~ ~~3.6~~ ~~years as of September~~ ~~30, 2019.~~ ~~The Company’s weighted average discount rate for operating leases was~~ ~~4.5%~~ ~~as of September~~ ~~30, 2019.~~

~~As of September 30, 2019, maturities of operating lease liabilities for future annual periods are as follows:~~

(In thousands)

Year ending December 31,
2019 $ 2,383
2020 8,133
2021 4,696
2022 2,457
2023 1,474
Thereafter 2,682
Total lease payments 21,825
Less imputed interest (1,762 )
Present value of lease liabilities $ 20,063

8.	Derivative Instruments and Hedging Activity

The Company may use forward exchange contracts and foreign currency denominated debt to manage its exposure to foreign exchange risk in order to reduce the effect of fluctuating foreign currencies on short-term foreign currency denominated intercompany transactions, non-functional currency raw material purchases, non-functional currency sales, and other known foreign currency exposures. These forward exchange contracts generally have maturities of less than 18 months. The Company’s primary hedging activities and their accounting treatment are summarized below.

Forward exchange contracts – Certain forward exchange contracts have been designated as cash flow hedges. The Company had ~~$22.5~~$54.5 million and ~~$76.0~~$59.9 million of forward exchange contracts designated as cash flow hedges outstanding as of ~~September 30, 2019,~~March 31, 2020, and December 31, ~~2018,~~2019, respectively. For the three ~~and nine~~ months ended ~~September 30,~~March 31, 2020 and 2019, ~~and 2018,~~ the amounts reclassified into net earnings in the Company’s Consolidated Condensed Statement of Earnings that offset the ~~earnings~~underlying transactions' impact ~~of the related non-functional asset or liability hedged~~on earnings in the same period were not material. In addition, the Company utilizes forward exchange contracts that are not designated as cash flow ~~hedges; the~~hedges. The results of these transactions were not material to the financial statements.

Net investment hedges – The Company has certain debt denominated in Euros, Swiss Francs, and British Pounds. These debt instruments have been designated as partial hedges of the Company’s Euro, Swiss Franc, and British Pound net asset positions. Changes in the fair value of this debt attributable to changes in the spot foreign exchange rate are recorded in foreign currency translation in OCI. As of ~~September 30, 2019,~~March 31, 2020, and December 31, ~~2018,~~2019, the total value of the Company’s Euro, Swiss Franc, and British Pound debt designated as net investment hedges was ~~$350.2~~$355.0 million and ~~$366.5~~$363.4 million, respectively. For the three ~~and nine~~ months ended ~~September 30, 2019,~~March 31, 2020, the impact of foreign exchange rates on these debt instruments decreased debt by ~~$14.0~~$8.4 million, ~~and $16.3 million, respectively,~~ which has been recorded as foreign currency translation in OCI.

The effective income tax rates for the three months ended ~~September~~ ~~30,~~March 31, 2020 and 2019, ~~and~~ ~~2018,~~were ~~5.9%~~31.3% and ~~(5.2%), respectively. For the~~ ~~nine~~ ~~months ended September~~ ~~30,2019~~ ~~and~~ ~~2018,~~ ~~the effective income tax rates were~~ ~~17.5%~~ ~~and~~ ~~12.1%~~25.5%, respectively. The effective tax rates for the thre~~nine~~e months ended ~~September~~ ~~30,2019~~March 31, 2020 and ~~2018,~~2019 were both impacted by changes in estimates associated with the finalization of prior year foreign ~~and domestic~~ tax items, audit settlements, and the mix of foreign earnings. ~~In addition,~~

On March 27, 2020, President Trump signed into law the ~~effective tax rate~~Coronavirus Aid, Relief and Economic Security Act (CARES Act). The CARES Act allows for the ~~nine~~ ~~months ended September~~ ~~30,2019~~ ~~was impacted by adjustments~~deferral of income and social security tax payments, a five-year carryback for net operating losses, changes to ~~valuation allowances,~~interest expense and ~~the effective~~business loss limitation rules, certain new tax ~~rate for the~~ ~~nine~~ ~~months ended September~~ ~~30,2018~~ ~~was impacted by an adjustment made~~credits, and certain new loans and grants to ~~the provisional amount recorded~~businesses. The Company has reviewed its income tax assumptions and projections in ~~2017~~ ~~for the impact~~light of the ~~Tax Cuts~~CARES Act and ~~Jobs~~does not expect the CARES Act ~~(2017~~ ~~Tax Legislation),~~to materially impact the ~~U.S.~~Company’s income tax ~~accounting method changes that were filed~~expense or projections. As of March 31, 2020, the Company was considering the option to defer future tax payments (income taxes and certain payroll taxes) in accordance with the ~~IRS, and~~CARES Act. Subsequent to March 31, 2020, the ~~generation of foreign~~Company has decided to defer certain tax ~~credits.~~payments in accordance with the CARES Act. The Company will continue to evaluate the CARES Act for opportunities as additional information is released on the CARES Act.

10.	Accumulated Other Comprehensive Income

The following table summarizes the changes in OCI during the three ~~and nine~~ month periods ended ~~September 30, 2019~~March 31, 2020 and ~~2018:~~2019:

(In thousands)	Cash Flow Hedges (a)			Pension Items (a)			Foreign Currency Items			Total			Cash Flow Hedges (a)			Pension Items (a)			Foreign Currency Items			Total
Balances at December 31, 2018	$	147		$	549		$	(166,251	)	$	(165,555	)
Balances at December 31, 2019													$	(199	)	$	(672	)	$	(162,137	)	$	(163,008	)
Other comprehensive loss before reclassifications		(25	)		-			(15,389	)		(15,414	)		(1,865	)		-			(42,925	)		(44,790	)
Amounts reclassified from OCI		(229	)		(112	)		-			(341	)		429			8			-			437
Balances at September 30, 2019	$	(107	)	$	437		$	(181,640	)	$	(181,310	)
Balances at March 31, 2020													$	(1,635	)	$	(664	)	$	(205,062	)	$	(207,361	)

(In thousands)
Cash Flow
Hedges (a)

Pension
Items (a)

Foreign
Currency
Items
Total
Balances at June 30, 2019 $ (58 ) $ 475 $ (163,960 ) $ (163,543 )
Other comprehensive loss before reclassifications (91 ) - (17,680 ) (17,771 )
Amounts reclassified from OCI 42 (38 ) - 4
Balances at September 30, 2019 $ (107 ) $ 437 $ (181,640 ) $ (181,310 )

(In thousands)	Cash Flow Hedges (a)			Pension Items (a)			Foreign Currency Items			Total
Balances at December 31, 2018	$	147		$	549		$	(166,251	)	$	(165,555	)
Other comprehensive income (loss) before reclassifications		597			-			(1,164	)		(567	)
Amounts reclassified from OCI		(112	)		(37	)		-			(149	)
Balances at March 31, 2019	$	632		$	512		$	(167,415	)	$	(166,271	)

(In thousands)
Cash Flow
Hedges (a)

Pension
Items (a)

Foreign
Currency
Items
Total
Balances at December 31, 2017 $ (669 ) $ (309 ) $ (148,356 ) $ (149,334 )
Other comprehensive income (loss) before reclassifications 404 - (12,426 ) (12,022 )
Amounts reclassified from OCI 98 (90 ) - 8
Balances at September 30, 2018 $ (167 ) $ (399 ) $ (160,782 ) $ (161,348 )

(In thousands)
Cash Flow
Hedges (a)

Pension
Items (a)

Foreign
Currency
Items
Total
Balances at June 30, 2018 $ (34 ) $ (369 ) $ (161,713 ) $ (162,116 )
Other comprehensive income (loss) before reclassifications (121 ) - 931 810
Amounts reclassified from OCI (12 ) (30 ) - (42 )
Balances at September 30, 2018 $ (167 ) $ (399 ) $ (160,782 ) $ (161,348 )

(a)

Cash Flow Hedges and Pension Items are net of tax.

11.	Commitments and Contingencies

Agar v. Sensient Natural Ingredients LLC

On March 29, 2019, Calvin Agar (Agar), a former employee, filed a Class Action Complaint in Stanislaus County Superior Court against Sensient Natural Ingredients LLC (SNI). On May 22, 2019, Agar filed a First Amended Class Action Complaint against SNI (the Complaint). Agar alleges that SNI improperly reported overtime pay on employees’ wage statements, in violation of the California Labor Code. The Complaint alleges two causes of action, both of which concern the wage statements.

The Complaint does not allege that SNI failed to pay any overtime due to Agar or any of the putative class or group members. The Complaint merely challenges the manner in which SNI has reported overtime pay on its wage statements.

SNI maintains that it has accurately paid Agar and the putative class members for all overtime worked, and that they have not experienced any harm. SNI further maintains that the format of its wage statements does not violate the requirements of state law or any specific guidance from California decisional law, the California Division of Labor Standards Enforcement, or the California Labor Commissioner's Office. Finally, SNI contended that certain of the state law claims are subject to mandatory individual arbitration.

SNI filed its Answer and Affirmative Defenses to the Complaint on July 10, 2019. The parties participated in an early mediation in the case in December 2019, which was not successful. On March 17, 2020, the Court granted Agar leave to file a Second Amended Complaint, which removed the claim that SNI had asserted was subject to mandatory individual arbitration. SNI filed a Demurrer to the Second Amended Complaint, seeking dismissal of the remaining claim, on May 1, 2020. SNI continues to evaluate the developing legal authority on this issue. SNI intends to vigorously defend its interests, absent a reasonable resolution.

~~11.~~

~~Accounts Receivable Securitization~~

~~The Company is engaged in an accounts receivable securitization program with Wells Fargo Bank N.A. (Wells Fargo). As of September~~ ~~30,2019, the~~ ~~commitment size under the program was $~~70 ~~million.~~

Between October 2016 and June 2018, the Company accounted for sales of trade receivables under the program as a reduction in accounts receivable on the Company’s Consolidated Condensed Balance Sheets in accordance with ASC 860, ~~Transfers and Servicing~~ ~~(ASC 860).~~

In June 2018, the Company amended the program. Following the amendment, the Company no longer accounts for sales of trade receivables in accordance with ASC 860, and instead now maintains the trade receivables and related debt on its Consolidated Condensed Balance Sheets.

Under the amended program, Wells Fargo has extended a secured loan of up to $70 million to the Company secured by Wells Fargo’s undivided interests in certain of the Company’s trade accounts receivables. As of September 30, 2019, $70 million was borrowed under the program.

~~In October~~ ~~2019,~~ ~~the Company amended this program. See Note~~ ~~13,~~ ~~Subsequent Events, for additional information.~~

~~12.~~

~~Commitments and Contingencies~~

Other Claims

The Company is subject to various claims and litigation arising in the normal course of business. The Company establishes reserves for claims and proceedings when it is probable that liabilities exist and reasonable estimates of loss can be made. While it is not possible to predict the outcome of these matters, based on our assessment of the facts and circumstances now known, we do not believe that these matters, individually or in the aggregate, will have a material adverse effect on our financial position. However, actual outcomes may be different from those expected and could have a material effect on our results of operations or cash flows in a particular period.

Refer to Note 2, ~~Agar v. Sensient Natural Ingredients LLC~~Divestitures

~~On March 29, 2019, Calvin Agar (Agar)~~, a former employee, filed a Class Action Complaint in Stanislaus County Superior Court against Sensient Natural Ingredients LLC (SNI). On May 22, 2019, Agar filed a First Amended Class Action Complaint against SNI (the Complaint). Agar alleges that SNI improperly reported overtime pay on employees’ wage statements, in violationfor information about potential environmental remediation costs associated with our Granada, Spain location. The amount of ~~the California Labor Code. The Complaint alleges two causes of action, and both concern the wage statements.~~

~~The Complaint does not allege that SNI failed~~any losses related to ~~pay any overtime due to Agar or any of the putative class or group members. The Complaint merely challenges the manner in which SNI has reported overtime pay on its wage statements.~~

SNI maintains that it has accurately paid Agar and the putative class members for all overtime worked, and that they have not experienced any harm. SNI further maintains that the format of its wage statements does not violate the requirements of state law or any specific guidance from California decisional law, the California Division of Labor Standards Enforcement, or the California Labor Commissioner's Office. Finally, SNI contends that certain of the state law claims are subject to mandatory individual arbitration.

~~SNI filed its Answer and Affirmative Defenses to the Complaint on July 10, 2019. SNI continues to evaluate the developing legal authority on~~such remediation cannot be reasonably estimated at this ~~issue. SNI intends to vigorously defend its interests, absent a reasonable resolution. The parties have agreed to submit this case to mediation, which is currently scheduled for December 11, 2019.~~ time.

~~13.~~12.

Subsequent Events

On ~~October~~April 1,9, ~~2019,~~ ~~the Company amended its existing accounts receivable securitization program with Wells Fargo to decrease the commitment size from~~ ~~$70 million~~ to ~~$65 million~~ ~~and extended the expiration date of the program to October~~ ~~2020.~~

~~On October~~ ~~15,2019,~~2020, the Board of Directors approved the sale ~~and~~of the yogurt fruit preparations product line. The Company has signed a memorandum of understanding ~~for the Global Inks product line, which is within the Color segment. The Company anticipates~~with a ~~sale within the next year.~~potential buyer. The Company estimates a non-cash ~~net loss between~~impairment charge of $107 million ~~and~~to $129 million will be recorded ~~in the~~ ~~three~~ ~~months ending December~~ ~~31,2019.~~ ~~This estimate will be finalized and adjusted as necessary upon the closing of~~related to the sale. The Company ~~does not expect cash costs associated with~~ anticipates that it will complete the ~~divestiture to have a material effect on our results~~sale and exit activities of ~~operations or cash flows.~~this product line within the year.

~~Index~~On April 23, 2020, the Company announced its quarterly dividend of 39 cents per share would be payable on June 1, 2020.

ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

FORWARD-LOOKING STATEMENTS

This document contains forward-looking statements that reflect management’s current assumptions and estimates of future economic circumstances, industry conditions, Company performance, and financial results. Forward-looking statements include statements in the future tense, statements referring to any period after March 31, 2020, and statements including the terms “expect,” “believe,” “anticipate,” and other similar terms that express expectations as to future events or conditions. The Private Securities Litigation Reform Act of 1995 provides a safe harbor for such forward-looking statements. Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties, and other factors that could cause actual events to differ materially from those expressed in those statements. A variety of factors could cause the Company’s actual results and experience to differ materially from the anticipated results. These factors and assumptions include 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; our 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; the matters discussed under Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 and below under Item 1A of this Quarterly Report on Form 10-Q; and the matters discussed below under Item 2 including the critical accounting policies referenced therein. Except to the extent required by applicable law, 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 therein will not be realized.

OVERVIEW

Revenue

Revenue was ~~$317.7~~$350.7 million and ~~$342.7~~$347.5 million for the three months ended ~~September 30,~~March 31, 2020 and 2019, ~~and 2018, respectively. Revenue was $1.0 billion and $1.1 billion for the nine months ended September 30, 2019 and 2018,~~ respectively. For the three ~~and nine~~ months ended ~~September 30, 2019,~~March 31, 2020, the impact of foreign exchange rates decreased consolidated revenue by approximately ~~1% and~~ 2%~~, respectively.~~.

Gross Margin

The Company’s gross margin was ~~32.2%~~31.9% and ~~33.7%~~33.2% for the three months ended ~~September 30,~~March 31, 2020 and 2019, ~~and 2018,~~ respectively. The decrease in gross margin was primarily a result of ~~unfavorable volume and product mix, partially offset by higher selling prices.~~

Gross margin was 32.8% and 33.9% for the nine months ended September 30, 2019 and 2018, respectively. The decrease in gross margin for the nine months ended September 30, 2019 was primarily a result of higher manufacturing costs as a percent of revenue due to lower volumes and higher raw material costs ~~partially offset by higher selling prices.~~in natural ingredients and unfavorable product mix.

Selling and Administrative Expense

Selling and administrative expense as a percent of revenue was ~~20.0%~~22.1% and ~~19.1%~~18.9% for the three months ended ~~September 30,~~March 31, 2020 and 2019, respectively. Divestiture and ~~2018, respectively.~~ other related costs of $11.7 million were included in Selling and Administrative Expenses for the three months ended March 31, 2020. The increase in selling and administrative expense as a percent of revenue ~~was 19.3%~~is primarily due to the divestiture and ~~19.0%~~other related costs incurred in 2020, which increased selling and administrative expense as a percent of revenue by 330 basis points for the ~~nine~~three months ended ~~September 30, 2019 and 2018, respectively.~~March 31, 2020.

Operating Income

Operating income was ~~$38.8~~$34.6 million and ~~$50.3~~$49.4 million for the three months ended ~~September 30,~~March 31, 2020 and 2019, ~~and 2018,~~ respectively. Operating margins were ~~12.2%~~9.9% and ~~14.7%~~14.2% for the three months ended ~~September 30,~~March 31, 2020 and 2019, respectively. The decrease in operating margins is primarily due to the divestiture and ~~2018, respectively.~~other related costs incurred in 2020, which decreased operating margins by 340 basis points for the three months ended March 31, 2020.

Operating income was $135.6 million and $158.1 million for the nine months ended September 30, 2019 and 2018, respectively. Operating margins were 13.5% and 14.9% for the nine months ended September 30, 2019 and 2018, respectively.

Index

Interest Expense

Interest expense was ~~$4.9~~$4.3 million and $5.4 million for the three months ended ~~September 30,~~March 31, 2020 and 2019, ~~and 2018, respectively, and $15.5 million and $16.5 million for the nine months ended September 30, 2019 and 2018,~~ respectively. The decrease in expense was primarily due to the decrease in the average debt ~~outstanding, partially offset by higher interest rates.~~outstanding.

Income Taxes

The effective income tax rates for the three months ended ~~September 30,~~March 31, 2020 and 2019, were 31.3% and ~~2018, were 5.9% and (5.2%), respectively. For the nine months ended September 30, 2019 and 2018, the effective income tax rates were 17.5% and 12.1%~~25.5%, respectively. The effective tax rates for the ~~nine~~three months ended ~~September 30,~~March 31, 2020 and 2019 ~~and 2018,~~ were both impacted by changes in estimates associated with the finalization of prior year foreign ~~and domestic~~ tax items, audit settlements, and the mix of foreign earnings. ~~In addition,~~

On March 27, 2020, President Trump signed into law the ~~effective tax rate~~Coronavirus Aid, Relief and Economic Security Act (CARES Act). The CARES Act allows for the ~~nine~~deferral of income and social security tax payments, a five-year carryback for net operating losses, changes to interest expense and business loss limitation rules, certain new tax credits, and certain new loans and grants to businesses. The Company has reviewed its income tax assumptions and projections in light of the CARES Act and does not expect the CARES Act to materially impact the Company’s income tax expense or projections. As of March 31, 2020, the Company was considering the option to defer future tax payments (income taxes and certain payroll taxes) in accordance with the CARES Act. Subsequent to March 31, 2020, the Company has decided to defer certain tax payments in accordance with the CARES Act. The Company will continue to evaluate the CARES Act for opportunities as additional information is released on the CARES Act.

Divestitures

In October 2019, the Company announced its intent to divest its inks, fragrances (excluding its essential oils product line), and yogurt fruit preparations product lines. The Board of Directors approved the sale of the inks product line, which is within the Color segment, and the sale of the fragrances product line, which is within the Flavors & Fragrances segment.

In the three months ended ~~September 30, 2019~~March 31, 2020, the Company recorded a non-cash impairment charge of $9.7 million, primarily related to property, plant and equipment, intangibles and allocated goodwill, in Selling and Administrative Expenses, related to the disposal group as described in Note 2, Divestitures, to the Consolidated Condensed Financial Statements included in this report. The charge reduced the carrying value of certain long-lived assets to their estimated fair value. An estimate of the fair value of these product lines less cost to sell was ~~impacted by adjustments~~determined to ~~valuation allowances,~~be lower than its carrying value. This estimate will be finalized and adjusted as necessary upon the ~~effective tax rate~~closing of the sales or as assumptions change.

In the three months ended March 31, 2020, the Company also incurred $2.1 million of additional costs, primarily related to severance and legal expenses, related to the anticipated divestitures and other exit activities.

Refer to Note 2, Divestitures, and Note 12, Subsequent Events, to the Consolidated Condensed Financial Statements included in this report for information about anticipated additional charges and expenses associated with these divestitures.

COVID-19

COVID-19 is now affecting most of the world, including through widespread illness, quarantines, factory shutdowns, and travel and transportation restrictions. While the Company’s financial position remains strong, the Company has seen several financial and operational impacts from the pandemic as of this filing.

For the three months ended March 31, 2020, demand for the ~~nine months ended September 30, 2018 was impacted by an adjustment made~~Company’s products remained strong, especially in product lines that serve the food, beverage, and pharmaceutical markets. There has been softer demand in other product lines the Company serves, particularly in cosmetics and some product lines that supply the quick service restaurant segment due to ~~the provisional amount recorded in 2017~~widespread restaurant shutdowns and quarantine orders. While COVID-19 appears to have contributed to demand for food-related products and dampened demand for personal care related products, it is difficult to quantify the impact of COVID-19 on demand for the ~~Tax Cuts~~Company’s products. The Company continues to believe that it will achieve its projected earnings guidance.

During the three months ended March 31, 2020, the Company had a production facility in China and ~~Jobs Act (2017 Tax Legislation), the U.S. tax accounting method changes~~a production facility in India that were ~~filed~~required to temporarily suspend operations. All of the Company’s production facilities are open and operating as of this filing, but the Company continues to monitor developments and regulations in regions where production facilities are located. The Company also continues to monitor supply chains and has increased inventory in certain key raw materials, although the Company did not experience any significant disruptions during the three months ended March 31, 2020.

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As of March 31, 2020, the Company is in compliance with its loan covenants and does not anticipate any non-compliance in the future. COVID-19 has not adversely impacted the Company’s capital or financial resources. Furthermore, the Company expects its forecasted cash flows from operations and its available debt capacity will be able to meet future cash requirements for operations, capital expenditures, contractual maturities on long-term debt, and dividend payments.

The Company reviewed its goodwill, intangible assets, and long-lived assets for potential impairment indicators as of March 31, 2020, and except for the impairments associated with the ~~IRS,~~product lines to be divested noted above, no indicators of impairment were identified. The Company also reviewed its trade accounts receivables for potential collection issues and ~~the generation of foreign tax credits.~~did not identify any concerns. The Company will continue to monitor cash collections and review trade receivable aging to identify any deterioration in quality.

~~Acquisitions~~The Company estimates that the incremental expenses related to its COVID-19 response will be less than $3 million at the currently projected run-rate. All of the Company’s manufacturing plants continue in operation and have generally been designated as part of the critical infrastructure in the countries in which they operate.

~~On March 9, 2018,~~

In October 2019, the Company ~~completed~~announced its intent to divest its inks, fragrances (excluding its essential oils product line), and yogurt fruit preparations product lines. While the ~~acquisition of certain net assets~~sales and ~~the natural color business of~~ ~~GlobeNatural,~~ ~~a company based in Lima, Peru. The Company paid $10.8 million of cash for this acquisition. The assets acquired and liabilities assumed were recorded at their estimated fair values~~exit activities are still anticipated to be completed as of the ~~acquisition date.~~ date of this filing, travel and transportation restrictions have slowed down various activities related to the divestitures.

The Company ~~acquired net assets of $1.4 million~~continues to believe its internal controls over financial reporting and ~~identified intangible assets, principally customer relationships of $2.0 million,~~its disclosure controls and ~~allocated the remaining $7.4 million~~procedures are effective to ~~goodwill. These operations are included in the Color segment.~~ensure their design and operation continue to be effective as some employees perform tasks from alternative work locations. Internal audit continues to perform their planned audit procedures remotely from alternative work locations. See Item 4, Controls and Procedures, for further information.

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NON-GAAP FINANCIAL MEASURES

Within the following ~~table,~~tables, the Company reports certain non-GAAP financial measures, including: (1) adjusted revenue, adjusted operating income, adjusted net earnings, and adjusted diluted EPS, ~~(which~~which exclude the ~~impact~~results of the ~~2017 Tax Legislation),~~product lines to be divested and the divestiture and other related costs, and (2) percentage changes in revenue, operating income, and diluted EPS on aan adjusted local currency basis, which eliminate the effects that result from translating its international operations into U.S. ~~dollars.~~dollars, the results of product lines to be divested, and the divestiture and other related costs.

The Company has included each of these non-GAAP measures in order to provide additional information regarding our underlying operating results and comparable year-over-year 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 report. 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 the Company believes 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.

	Three Months Ended September 30,								Nine Months Ended September 30,								Three Months Ended March 31,
(In thousands except per share amounts)																	2020			2019			% Change
Revenue (GAAP)																	$	350,677		$	347,513			0.9	%
Revenue of the product lines to be divested																		(36,585	)		(39,021	)
Adjusted revenue																	$	314,092		$	308,492			1.8	%
	2019		2018			% Change			2019		2018			% Change
Operating Income (GAAP)																	$	34,561		$	49,420			(30.1	%)
Divestiture & other related costs – Cost of products sold																		190			-
Divestiture & other related costs – Selling and administrative expenses																		11,653			-
Operating income of the product lines to be divested																		(1,385	)		(32	)
Adjusted operating income																	$	45,019		$	49,388			(8.8	%)

Net earnings (GAAP)	$	31,871	$	47,193			(32.5	%)	$	99,009	$	124,510			(20.5	%)
Impact of the 2017 Tax Legislation		-		(7,061	)					-		(7,061	)
Net Earnings (GAAP)																	$	20,773		$	32,807			(36.7	%)
Divestiture & other related costs, before tax																		11,843			-
Tax impact of divestiture & other related costs																		(934	)		-
Net earnings of the product lines to be divested, before tax																		(1,385	)		(32	)
Tax impact of the product lines to be divested																		297			11
Adjusted net earnings	$	31,871	$	40,132			(20.6	%)	$	99,009	$	117,449			(15.7	%)	$	30,594		$	32,786			(6.7	%)

Diluted EPS (GAAP)	$	0.75	$	1.12			(33.0	%)	$	2.34	$	2.92			(19.9	%)	$	0.49		$	0.78			(37.2	%)
2017 Tax Legislation		-		(0.17	)					-		(0.17	)
Divestiture & other related costs, net of tax																		0.26			-
Results of operations of the product lines to be divested, net of tax																		(0.03	)		-
Adjusted diluted EPS	$	0.75	$	0.95			(21.1	%)	$	2.34	$	2.76			(15.2	%)	$	0.72		$	0.78			(7.7	%)

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The following table summarizes the percentage change for the results of the three ~~and nine~~ months ended ~~September 30, 2019,~~March 31, 2020, compared to the results for the three ~~and nine~~ months ended ~~September 30, 2018,~~March 31, 2019, in the respective financial measures.

	Three Months Ended September 30, 2019									Nine Months Ended September 30, 2019									Three Months Ended March 31, 2020
Revenue	Total			Foreign Exchange Rates			Local Currency			Total			Foreign Exchange Rates			Local Currency			Total			Foreign Exchange Rates			Product Lines to be Divested			Adjusted Local Currency
Flavors & Fragrances		(9.1	%)		(1.5	%)		(7.6	%)		(7.0	%)		(1.8	%)		(5.2	%)		1.6	%		(1.1	%)		(0.9	%)		3.6	%
Color		(6.0	%)		(1.8	%)		(4.2	%)		(3.9	%)		(3.1	%)		(0.8	%)		(0.3	%)		(2.2	%)		(0.9	%)		2.8	%
Asia Pacific		(3.7	%)		1.6	%		(5.3	%)		(4.8	%)		(1.2	%)		(3.6	%)		6.8	%		(1.7	%)		0.0	%		8.5	%
Total Revenue		(7.3	%)		(1.3	%)		(6.0	%)		(5.5	%)		(2.3	%)		(3.2	%)		0.9	%		(1.6	%)		(0.6	%)		3.1	%

Operating Income
Flavors & Fragrances		(29.1	%)		(0.9	%)		(28.2	%)		(18.0	%)		(0.7	%)		(17.3	%)		(9.7	%)		(0.9	%)		5.7	%		(14.5	%)
Color		(11.8	%)		(2.0	%)		(9.8	%)		(10.8	%)		(3.3	%)		(7.5	%)		(1.8	%)		(2.3	%)		0.2	%		0.3	%
Asia Pacific		(6.0	%)		5.3	%		(11.3	%)		(9.4	%)		2.0	%		(11.4	%)		19.9	%		0.7	%		0.0	%		19.2	%
Corporate & Other		11.5	%		0.0	%		11.5	%		(9.3	%)		(0.1	%)		(9.2	%)		159.0	%		0.0	%		145.8	%		13.2	%
Total Operating Income		(22.8	%)		(0.8	%)		(22.0	%)		(14.3	%)		(2.0	%)		(12.3	%)		(30.1	%)		(1.8	%)		(21.1	%)		(7.2	%)
Diluted EPS		(33.0	%)		(0.9	%)		(32.1	%)		(19.9	%)		(1.7	%)		(18.2	%)		(37.2	%)		(2.6	%)		(29.5	%)		(5.1	%)

SEGMENT INFORMATION

The Company determines its operating segments based on information utilized by ~~the~~its chief operating decision maker to allocate resources and assess performance. The Company evaluates performance based on operating income ~~of the respective segments~~ before divestiture and other related costs, restructuring and other ~~costs,~~charges, interest expense, and income ~~taxes.~~taxes (segment operating income). There were no restructuring and other ~~costs~~charges incurred in either of the first ~~nine~~three months of ~~2019~~2020 or ~~2018.~~

~~In July 2018, the Company completed the acquisition of~~ ~~Mazza Innovation Limited~~ ~~(See~~ ~~Acquisitions~~ above for further information). This business was included in Corporate & Other in 2018. Beginning in the first quarter of 2019, the results of operations of this business are now reported in the Color segment. The results for 2018 have been restated to reflect this change.2019.

Flavors & Fragrances

Flavors & Fragrances segment revenue was ~~$167.6~~$186.5 million and ~~$184.4~~$183.6 million for the three months ended ~~September 30,~~March 31, 2020 and 2019, ~~and 2018,~~ respectively, ~~a decrease~~an increase of approximately 9%2%. Foreign exchange rates decreased segment revenue by approximately 2%1%. The ~~decrease~~increase was a result of higher revenue in Natural Ingredients, partially offset by lower revenue in Flavors, Extracts & Flavor Ingredients. The higher revenue in Natural Ingredients ~~and Fragrances.~~was primarily due to higher volumes. The lower revenue in Flavors, Extracts & Flavor Ingredients was primarily due to ~~unfavorable~~lower volumes and the unfavorable impact of exchange rates. The lower revenue in Fragrances was primarily due to unfavorable volumes and the unfavorable impact of exchange rates. The lower revenue in Natural Ingredients was primarily due to unfavorable volumes.

For the nine months ended September 30, 2019 and 2018, Flavors & Fragrances segment revenue was $531.3 million and $571.4 million, respectively, a decrease of approximately 7%. Foreign exchange rates decreased segment revenue by approximately 2%. The decrease was primarily a result of lower revenue in Flavors, Natural Ingredients, and Fragrances. The lower revenue in Flavors and Fragrances was primarily due to unfavorable volumes and the unfavorable impact of exchange rates, partially offset by the favorable impact of selling prices. The lower revenue in Natural Ingredients was primarily due to unfavorable volumes and unfavorable selling prices.

~~Index~~

Flavors & Fragrances segment operating income was ~~$17.6~~$20.9 million and ~~$24.8~~$23.1 million for the three months ended ~~September 30,~~March 31, 2020 and 2019, ~~and 2018,~~ respectively, a decrease of approximately ~~29%~~10%. Foreign exchange rates decreased segment operating income by approximately 1%. The lower segment operating income was primarily a result of the timing of inventory reductions and cost reductions relative to lower production volumes ~~and higher manufacturing and other costs~~ in ~~Flavors.~~Flavors, Extracts & Flavor Ingredients. Segment operating income as a percent of revenue was ~~10.5%~~11.2% in the current quarter ~~and 13.5%~~compared to 12.6% in the prior year’s comparable quarter.

Flavors & Fragrances segment operating income was $60.8 million and $74.1 million for the nine months ended September 30, 2019 and 2018, respectively, a decrease of approximately 18%. Foreign exchange rates decreased segment operating income by approximately 1%. The lower segment operating income was primarily a result of lower operating income in Flavors, partially offset by higher operating income at Natural Ingredients. The lower operating income in Flavors was primarily a result of lower volumes, higher manufacturing and other costs, and higher raw material costs, partially offset by favorable product mix and higher selling prices. The higher operating income in Natural Ingredients was primarily due to favorable raw material costs and product mix, partially offset by lower volumes and selling prices. Segment operating income as a percent of revenue was 11.4% and 13.0% for the nine months ended September 30, 2019 and 2018, respectively.

Color

Segment revenue for the Color segment was ~~$127.0~~$143.5 million and ~~$135.1~~$143.9 million for the three months ended ~~September 30,~~March 31, 2020 and 2019, ~~and 2018, respectively, a decrease of approximately 6%.~~respectively. Foreign exchange rates decreased segment revenue by approximately 2%. ~~The decrease was primarily a result of lower revenue~~Higher revenues in Food & Beverage Colors ~~Cosmetics, and Other Colors. The lower revenue in Food & Beverage Colors was primarily a result of lower volumes and the unfavorable impact of exchange rates, partially~~were offset by ~~higher selling prices. The~~ lower ~~revenue~~revenues in ~~Cosmetics was primarily a result of lower volumes~~Personal Care and ~~the unfavorable impact of exchange rates. The lower revenue in Other Colors was primarily due to lower Inks volumes.~~

For the nine months ended September 30, 2019 and 2018, segment revenue for the Color segment was $409.8 million and $426.6 million, respectively, a decrease of approximately 4%. Foreign exchange rates decreased segment revenue by approximately 3%. The decrease was primarily a result of lower revenue in Cosmetics and Other Colors, partially offset by higher revenue in Food & Beverage Colors. The lower revenue in Cosmetics was primarily a result of lower volumes and the unfavorable impact of exchange rates. The lower revenue in Other Colors was primarily due to lower Inks volumes, the unfavorable impact of exchange rates, and unfavorable selling prices, partially offset by the additional revenue from the ~~Mazza Innovation Limited~~ ~~acquisition.~~Inks. The higher revenue in Food & Beverage Colors was primarily a result of higher volumes, ~~higher selling prices, and the additional revenue from the~~ ~~GlobeNatural~~ ~~acquisition,~~ partially offset by the unfavorable impact of exchange rates. The lower revenue in Personal Care was primarily due to the unfavorable impact of exchange rates and lower revenue in Asia, while the lower revenue in Inks was primarily due to lower volumes.

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Segment operating income for the Color segment was ~~$23.4~~$29.7 million and ~~$26.6~~$30.2 million for the three months ended ~~September 30,~~March 31, 2020 and 2019, ~~and 2018,~~ respectively, a decrease of approximately ~~12%~~2%. Foreign exchange rates decreased segment operating income by approximately 2%. The lower segment operating income was primarily a result of lower operating income in Personal Care, partially offset by higher operating income in Food & Beverage ~~Colors and Cosmetics.~~Colors. The lower segment operating income in ~~Food & Beverage Colors~~Personal Care was primarily a result of lower volumes, ~~unfavorable product mix,~~due to COVID-19 and ~~higher raw material costs, partially offset by higher selling prices.~~lower demand for makeup products. The ~~lower segment operating income in Cosmetics was primarily a result of lower volumes and and~~ higher raw material costs, partially offset by favorable manufacturing and other costs. Operating income in Other Colors was consistent with the prior period as a gain on the sale of assets and favorable raw material costs were offset by higher manufacturing and other costs. Segment operating income as a percent of revenue was 18.5% in the current quarter and 19.7% in the prior year’s comparable quarter.

Segment operating income for the Color segment was $81.5 million and $91.4 million for the nine months ended September 30, 2019 and 2018, respectively, a decrease of approximately 11%. Foreign exchange rates decreased segment operating income by approximately 3%. The lower segment operating income was primarily a result of lower operating income in Food & Beverage Colors and Cosmetics. The lower segment operating income in Food & Beverage Colors was primarily a result of higher ~~raw material costs, the unfavorable impact of exchange rates,~~volumes and ~~higher manufacturing and other costs, partially offset by~~ favorable selling prices and higher volumes. The lower segment operating income in Cosmetics was primarily a result of lower volumes, higher raw material costs, and the unfavorable impact of exchange rates, partially offset by favorable manufacturing and other costs.product mix. Segment operating income as a percent of revenue was ~~19.9%~~20.7% in the current quarter and ~~21.4% for~~21.0% in the ~~nine months ended September 30, 2019 and 2018, respectively.~~prior year’s comparable quarter.

~~Index~~

Asia Pacific

Segment revenue for the Asia Pacific segment was ~~$30.1~~$30.4 million and ~~$31.3~~$28.5 million for the three months ended ~~September 30,~~March 31, 2020 and 2019, ~~and 2018,~~ respectively, ~~a decrease~~an increase of approximately 4%. Foreign exchange rates increased segment revenue by approximately 2%. The lower segment revenue was primarily due to lower volumes, partially offset by the favorable impact of exchange rates and higher selling prices.

~~For the nine months ended September 30, 2019 and 2018, segment revenue for the Asia Pacific segment was $87.6 million and $92.1 million, respectively, a decrease of approximately 5%~~7%. Foreign exchange rates decreased segment revenue by approximately 1%2%. The ~~lower~~higher segment revenue was primarily due to ~~lower volumes and the unfavorable impact of exchange rates, partially offset by favorable selling prices.~~higher volumes.

Segment operating income for the Asia Pacific segment was ~~$5.4~~$5.1 million and ~~$5.8~~$4.2 million for the three months ended ~~September 30,~~March 31, 2020 and 2019, ~~and 2018,~~ respectively, ~~a decrease~~an increase of approximately 6%20%. Foreign exchange rates increased segment operating income by approximately 5%1%. The higher segment operating income was primarily due to higher sales volumes. Segment operating income as a percent of revenue was ~~17.9%~~16.6% in the current quarter and ~~18.4%~~14.8% in the prior year’s comparable quarter.

Segment operating income for the Asia Pacific segment was $13.8 million and $15.3 million for the nine months ended September 30, 2019 and 2018, respectively, a decrease of approximately 9%. Foreign exchange rates increased segment operating income by approximately 2%. The lower operating income was primarily due to lower volumes, unfavorable product mix, and higher manufacturing and other costs, partially offset by favorable selling prices. Segment operating income as a percent of revenue was 15.8% and 16.6% for the nine months ended September 30, 2019 and 2018, respectively.

Corporate & Other

The Corporate & Other operating expense was ~~$7.7~~$21.0 million and ~~$6.9~~$8.1 million for the three months ended ~~September 30,~~March 31, 2020 and 2019, ~~and 2018, respectively, and $20.5 million and $22.6 million for the nine months ended September 30, 2019 and 2018,~~ respectively. The ~~lower~~higher operating expense for the ~~nine~~three months ended ~~September 30, 2019~~March 31, 2020 was primarily due to ~~lower performance-based executive~~the period including $11.8 million of divestiture and other related costs and higher non-cash share-based compensation. There were no divestiture and other related costs in the prior year comparable period.

LIQUIDITY AND FINANCIAL CONDITION

Financial Condition

The Company’s financial position remains strong. The Company is in compliance with its loan covenants calculated in accordance with applicable agreements as of ~~September 30, 2019.~~March 31, 2020. The Company expects its cash flow from operations and its available debt capacity can be used to meet future cash requirements for operations, capital expenditures, dividend payments, acquisitions, and stock repurchases.

Cash Flows from Operating Activities

Net cash provided by operating activities was ~~$127.6~~$36.9 million and ~~$8.9~~$23.4 million for the ~~nine~~three months ended ~~September 30,~~March 31, 2020 and 2019, ~~and 2018,~~ respectively. The increase in net cash provided by operating activities ~~in 2019 is primarily due to the adoption of ASU No. 2016-15,~~ ~~Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments~~, which required certain cash receipts related to the Company’s accounts receivable securitization (i.e., the deferred purchase price) to be classified as investing activities. As a result, the Company included $91.1 million of cash received as deferred purchase price as investing activities in the nine months ended September 30, 2018. In addition, the increase in cash provided by operating activities was due to ~~less~~a $14.3 million decrease in cash used in working capital during the ~~nine~~three months ended ~~September 30, 2019,~~March 31, 2020, compared to ~~September 30, 2018.~~the three months ended March 31, 2019.

Cash Flows from Investing Activities

Net cash used in investing activities was ~~$19.8~~$4.9 million and $8.6 million during the ~~nine~~three months ended ~~September 30, 2019.~~March 31, 2020 and 2019, respectively. During the ~~nine~~three months ended ~~September 30, 2018, net~~March 31, 2020, the Company received cash ~~provided by investing activities was $26.9 million.~~proceeds of $4.6 million related to the redemption of miscellaneous investments. Capital expenditures were ~~$26.1~~$9.4 million and $34.1 million for the nine months ended September 30, 2019 and 2018, respectively. Company owned life insurance proceeds were $4.8 million and $1.6 million for the nine months ended September 30, 2019 and 2018, respectively. The proceeds from the sale of assets were $2.0 million and $0.3 million for the nine months ended September 30, 2019 and 2018, respectively. Cash receipts on sold receivables were $91.1$8.3 million during the ~~nine~~three months ended ~~September 30 2018, as discussed above in Cash Flows from Operating Activities. During the nine months ended September 30, 2018, the Company made acquisitions for a total of $31.1 million.~~March 31, 2020 and 2019, respectively.

~~Index~~

Cash Flows from Financing Activities

Net cash used in financing activities was ~~$102.6~~$18.2 million and ~~$31.5~~$11.9 million for the ~~nine~~three months ended ~~September 30,~~March 31, 2020 and 2019, ~~and 2018,~~ respectively. Net debt decreased by ~~$55.8~~$1.4 million and increased ~~$90.2~~by $4.1 million for the ~~nine~~three months ended ~~September 30,~~March 31, 2020 and 2019, ~~and 2018,~~ respectively. For purposes of the cash flow statement, net changes in debt exclude the impact of foreign exchange rates. Dividends of ~~$45.7~~$16.5 million and ~~$42.2~~$15.2 million were paid during the ~~nine~~three months ended ~~September 30,~~March 31, 2020 and 2019, ~~and 2018,~~ respectively. Dividends paid were ~~$1.08~~$0.39 per share and 99$0.36 cents per share for the first ~~nine~~three months of 2020 and 2019, ~~and 2018,~~ respectively. The Company repurchased $76.7 million of Company stock for the nine months ended September 30, 2018, and did not repurchase any Company stock for the nine months ended September 30, 2019. Subsequent to September 30, 2019, the Company announced that its quarterly dividend would increase to 39 cents per share, starting with its dividend payable on December 2, 2019.

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CONTRACTUAL OBLIGATIONS

There have been no material changes in the Company’s contractual obligations during the quarter ended ~~September 30, 2019.~~March 31, 2020. For additional information about contractual obligations, refer to “Contractual Obligations” under Item 7 of the Company’s Annual Report on Form ~~10-K/A~~10-K for the year ended December 31, ~~2018.~~2019.

OFF-BALANCE SHEET ARRANGEMENTS

As of ~~September 30, 2019,~~March 31, 2020, the Company had no off-balance sheet arrangements.

CRITICAL ACCOUNTING POLICIES

There have been no material changes in the Company’s critical accounting policies during the quarter ended ~~September 30, 2019.~~March 31, 2020. For additional information about critical accounting policies, refer to “Critical Accounting Policies” under Item 7 of the Company’s Annual Report on Form ~~10-K/A~~10-K for the year ended December 31, ~~2018.~~2019.

ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes in the Company’s exposure to market risk during the quarter ended ~~September 30, 2019.~~March 31, 2020. For additional information about market risk, refer to Item 7A of the Company’s Annual Report on Form ~~10-K/A~~10-K for the year ended December 31, ~~2018.~~2019.

ITEM 4.

CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures: The Company carried out an evaluation, under the supervision and with the participation of management, including the Company’s Chairman, President, and Chief Executive Officer and its Senior Vice President and Chief Financial Officer, of the effectiveness, as of the end of the period covered by this report, of the design and operation of the disclosure controls and procedures, as defined in Rule 13a-15(e) of the Exchange Act. Based upon that evaluation, the Company’s Chairman, President, and Chief Executive Officer and its Senior Vice President and Chief Financial Officer have concluded that the disclosure controls and procedures were effective as of the end of the period covered by this report.

Change in Internal Control Over Financial Reporting: There have been no changes in the Company’s internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) during the Company’s most recent quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

~~FORWARD-LOOKING STATEMENTS~~

This document contains forward-looking statements that reflect management’s current assumptions and estimates of future economic circumstances, industry conditions, Company performance, and financial results. Forward-looking statements include statements in the future tense, statements referring to any period after September 30, 2019, and statements including the terms “expect,” “believe,” “anticipate,” and other similar terms that express expectations as to future events or conditions. The Private Securities Litigation Reform Act of 1995 provides a safe harbor for such forward-looking statements. Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties, and other factors that could cause actual events to differ materially from those expressed in those statements. A variety of factors could cause the Company’s actual results and experience to differ materially from the anticipated results. These factors and assumptions include the pace and nature of new product introductions by the Company and the Company’s customers; the Company’s ability to successfully implement its growth strategies; the outcome of the Company’s various productivity-improvement and cost-reduction efforts; the success of the Company’s efforts to explore strategic alternatives for certain non-core businesses; the effectiveness of the Company’s past restructuring activities; changes in costs and availability of raw materials and energy; industry and economic factors related to the Company’s domestic and international business; the effects of current or future tariffs and other trade barriers; competition from other suppliers of colors, flavors, and fragrances; growth or contraction in markets for products in which the Company competes; terminations and other changes in customer relationships; the costs of compliance, or failure to comply, with laws and regulations applicable to our industries and markets; changing consumer preferences and changing technologies; industry and customer acceptance of price increases; currency exchange rate fluctuations; cost and availability of credit; results of litigation, governmental investigations, or other proceedings; complications as a result of existing or future information technology system applications and hardware; the matters discussed under Item 1A of the Company’s Annual Report on Form 10-K/A for the year ended December 31, 2018; and the matters discussed above under Item 2 including the critical accounting policies referenced therein. Except to the extent required by applicable law, 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 therein will not be realized.

PART II.

OTHER INFORMATION

ITEM 1.

LEGAL PROCEEDINGS

Agar v. Sensient Natural Ingredients LLC

Other Claims

~~Index~~

ITEM 1A.

RISK FACTORS

There were no material changes to the risk factors previously disclosed in Item 1A of the Company’s Annual Report on Form ~~10-K/A~~10-K for the year ended December 31, ~~2018,~~2019, except as follows:

The Coronavirus/COVID-19 could adversely affect our results and financial condition.

The ~~impact~~Coronavirus, also known as COVID-19, is now adversely affecting most of ~~tariffs~~the world, including through widespread illness, quarantines, factory shutdowns, and travel and transportation restrictions. These disruptions present numerous risks to our operations.

We may be unable to produce goods due to constraints in production caused by our factories being ordered to close; our inability to obtain raw materials due to supplier shutdowns, shortages, or transportation disruptions; or due to illnesses and quarantines affecting our workforce. Any of these events could adversely affect our ability to produce and sell our products, resulting in reduced revenue.

Around Chinese New Year, the Chinese government ordered us (along with other companies) to shut down our manufacturing facilities for approximately ten days, where we make food colors, cosmetic ingredients, flavors, and dehydrated garlic and onion for the Chinese and other ~~trade barriers may negatively~~Asian markets. Additionally, our facility in India, where we make food and personal care products, was shut down for several days after the Indian government ordered a nationwide lockdown (that facility subsequently began operating again several days later after it was designated as part of the critical infrastructure for India). These shutdowns did not have a material impact on our results for Asia Pacific, but additional shutdowns or other government actions could adversely affect our results.

~~Tariffs and other trade barriers imposed by~~While all of our manufacturing facilities currently remain open because they have been designated as part of the ~~U.S.~~ critical infrastructure of the countries in which they operate (food and/or ~~other countries have affected and~~chemical production), these designations could ~~continue to~~be changed or modified in the future, resulting in a partial or total shutdown of one or more of our facilities. Such shutdowns could adversely affect our ~~manufacturing costs,~~results. Even if our facilities are allowed to remain open, an outbreak of illness among employees at any of our facilities could result in a temporary or prolonged closure. Additionally, changes in governmental policies could also affect our ability to ~~import~~operate our facilities.

Even if we can produce our products, we may not be able to ship them on time due to transportation disruptions. In addition, due to travel restrictions and customer shutdowns, we may not be able to continue sales efforts with some new and existing customers. Even where we can produce our products, offer our products for sale, and deliver them, our customers may not be able to fully operate their production facilities due to shutdowns or their inability to obtain other raw materials necessary to produce their products, which may result in less demand for our ~~ability~~products. Customers may also face transportation disruptions for their products, which could reduce customers’ sales and, therefore, customers’ demand for our products. Such events could adversely affect our results.

Social disruptions such as widespread illness, quarantines, unemployment, and general anxiety could also reduce consumer demand for the products our customers make. This would result in less demand for our products. Such events could adversely affect our results. In addition, we may face heightened cybersecurity risks as a result of increased cybercriminal activity during a social disruption and due to ~~export~~a greater percentage of our workforce working remotely. While we take substantial steps (including in our remote work environment) to protect the information related to our formulas, research and development, manufacturing processes, trade secrets, sales, products, customers, personnel, and other operations through cybersecurity systems, monitoring, auditing, and training, these efforts may not always be successful.

Overall, the COVID-19 pandemic and governmental and social responses have evolved rapidly in a short period of time and we expect that the situation will remain dynamic for the foreseeable future. There can be no assurance that our experience to date with respect to facility operations, customer demand, the availability of supplies and transportation, and other ~~markets,~~factors impacting our results and ~~our ability to compete successfully against other companies that~~financial condition will be predictive of the ongoing impacts in the short or long term. Even as stay-home orders and quarantines are ~~not impacted by tariffs to the same extent as the Company. It~~eventually lifted, it is difficult to predict how economic conditions and changes in customer and consumer behavior may impact our results over the ~~effects~~longer term. As a result of ~~current~~any of the foregoing, our results or ~~future tariffs and other trade barriers and disputes,~~financial condition could be adversely impacted and the ~~Company’s efforts~~impacts could be material.

We are exposed to ~~reduce~~risks associated with our divestitures, which may impact our ability to fully realize the ~~effects~~anticipated benefits of ~~tariffs through pricing~~those transactions and ~~other measures~~could result in expenses and charges that are greater than we currently anticipate.

We have previously announced our intent to divest certain product lines. If those product lines are not sold in a timely manner, whether delayed by COVID-19 or otherwise, our profitability could be adversely impacted and management could be distracted from the core remaining businesses of the Company. We could also incur expenses with these divestitures and additional charges that are greater than we currently anticipate. Additionally, as part of our divestiture of certain fragrance product lines, we are moving our essential oils manufacturing capability to another Sensient facility. Any such move is inherently risky and could result in production delays and disruptions, which could in turn adversely impact our current and future ability to sell to customers. Divestitures also contain inherent risks that may impact our ability to fully realize the benefits of such divestiture, including possible delays in closing and potential post-closing claims for indemnification. If any of these risks materialize, the benefits of such divestitures may not be ~~effective.~~fully realized, if at all, and our business, financial condition, and results of operations could be negatively impacted.

Additionally, in connection with the divestiture of our fragrances product line, a potential buyer notified us that environmental sampling conducted at our Granada, Spain, location identified the presence of contaminants in soil and groundwater in certain areas of the property. Due to the impacts of COVID-19 in Spain, we have not been able to conduct a quantitative assessment of the issues identified in the environmental sampling. Environmental regulations, and the potential failure to comply with them, can have serious consequences, including the costs of compliance, defense, and remediation; interference with our operations or the ability to obtain required permits; civil, criminal, and administrative penalties; and negative publicity. The amount and timing of potential environmental remediation costs and complying with environmental laws associated with our Granada, Spain, location are difficult to predict as a result of the current circumstances and may be material.

On October 19, 2017, the Board of Directors authorized the repurchase of up to three million shares (2017 Authorization). As of March 31, 2020, 774,974 shares had been repurchased under the 2017 Authorization. There were no repurchases of shares by the Company during the three ~~or nine~~ months ended ~~September 30, 2019.~~March 31, 2020. There is no expiration date for the 2017 Authorization. ~~As of September 30, 2019, the maximum number of shares that may be purchased under publicly announced plans is 2,225,026.~~ The 2017 Authorization may be modified, suspended, or discontinued by the Board of Directors at any time. As of March 31, 2020, the maximum number of shares that may be purchased under publicly announced plans is 2,225,026.

See Exhibit Index following this report.

SENSIENT TECHNOLOGIES CORPORATION

QUARTERLY REPORT ON FORM 10-Q

FOR THE QUARTER ENDED ~~SEPTEMBER 30, 2019~~MARCH 31, 2020

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Wisconsin		39-0561070
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common ~~Stock,~~stock, par value $0.10 per share	SXT	New York Stock Exchange LLC

Large Accelerated Filer ☒	Accelerated Filer ☐	Non-Accelerated Filer ☐

Smaller Reporting Company ☐	Emerging Growth Company ☐

Class		Outstanding at ~~October 31, 2019~~April 30, 2020
Common Stock, par value $0.10 per share		~~42,318,528~~42,357,694

			Page No.

PART I. FINANCIAL INFORMATION:

	Item 1.	Financial Statements:

		Consolidated Condensed Statements of Earnings - Three ~~and Nine~~ Months Ended ~~September 30, 2019~~March 31, 2020 and ~~2018.~~2019.	1

		Consolidated Condensed Statements of Comprehensive Income - Three ~~and Nine~~ Months Ended ~~September 30, 2019~~March 31, 2020 and ~~2018.~~2019.	2

		Consolidated Condensed Balance Sheets - ~~September 30, 2019~~March 31, 2020 and December 31, ~~2018.~~2019.	3

		Consolidated Statements of Cash Flows - ~~Nine~~Three Months Ended ~~September 30, 2019~~March 31, 2020 and ~~2018.~~2019.	4

		Consolidated Statements of Shareholders’ Equity - Three ~~and Nine~~ Months Ended ~~September 30, 2019~~March 31, 2020 and ~~2018.~~2019.	5

		Notes to Consolidated Condensed Financial Statements.	6

	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	1715

	Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	2221

	Item 4.	Controls and Procedures.	2221

PART II. OTHER INFORMATION:

	Item 1.	Legal Proceedings.	2321

	Item 1A.	Risk Factors.	2422

	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	2423

	Item 6.	Exhibits.	2423

		Exhibit Index.	2524

		Signatures.	2625

	Three Months Ended September 30,					Nine Months Ended September 30,				Three Months Ended March 31,
	2019		2018			2019		2018		2020		2019

Revenue	$	317,650	$	342,734		$	1,004,349	$	1,062,252	$	350,677	$	347,513

Cost of products sold		215,250		227,161			674,956		702,138		238,784		232,288

Selling and administrative expenses		63,612		65,309			193,817		201,988		77,332		65,805

Operating income		38,788		50,264			135,576		158,126		34,561		49,420

Interest expense		4,936		5,407			15,538		16,517		4,307		5,402

Earnings before income taxes		33,852		44,857			120,038		141,609		30,254		44,018

Income taxes (benefit)		1,981		(2,336	)		21,029		17,099
Income taxes											9,481		11,211

Net earnings	$	31,871	$	47,193		$	99,009	$	124,510	$	20,773	$	32,807

Weighted average number of shares outstanding:
Weighted average number of common shares outstanding:
Basic		42,272		42,240			42,261		42,464		42,284		42,239
Diluted		42,299		42,313			42,291		42,571		42,307		42,275

Earnings per common share:
Basic	$	0.75	$	1.12		$	2.34	$	2.93	$	0.49	$	0.78
Diluted	$	0.75	$	1.12		$	2.34	$	2.92	$	0.49	$	0.78

Dividends declared per common share	$	0.36	$	0.33		$	1.08	$	0.99	$	0.39	$	0.36

ASSETS	September 30, 2019 (Unaudited)			December 31, 2018			March 31, 2020 (Unaudited)			December 31, 2019

CURRENT ASSETS:
Cash and cash equivalents	$	34,422		$	31,901		$	23,085		$	21,153
Trade accounts receivable, net		244,610			255,350			240,123			213,201
Inventories		470,136			490,757			384,157			422,517
Prepaid expenses and other current assets		43,193			44,857			38,768			40,049
Assets held for sale								78,612			91,293

TOTAL CURRENT ASSETS		792,361			822,865			764,745			788,213

OTHER ASSETS		82,560			66,788			82,367			80,939
DEFERRED TAX ASSETS		10,942			9,189			10,741			14,976
INTANGIBLE ASSETS, NET		16,883			18,867			11,463			11,802
GOODWILL		406,053			416,175			400,515			407,042

PROPERTY, PLANT, AND EQUIPMENT:
Land		35,894			36,787			30,078			31,431
Buildings		319,472			318,463			293,331			298,733
Machinery and equipment		700,030			688,003			645,866			652,063
Construction in progress		28,656			34,772			25,328			24,613
		1,084,052			1,078,025			994,603			1,006,840
Less accumulated depreciation		(614,294	)		(586,969	)		(571,608	)		(569,661	)
		469,758			491,056			422,995			437,179

TOTAL ASSETS	$	1,778,557		$	1,824,940		$	1,692,826		$	1,740,151

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
Trade accounts payable	$	103,557		$	131,812		$	91,437		$	94,653
Accrued salaries, wages, and withholdings from employees		21,208			23,410			19,724			18,655
Other accrued expenses		44,391			31,198			41,140			41,429
Income taxes		2,828			8,234			8,410			6,841
Short-term borrowings		20,207			20,046			20,105			20,612
Liabilities held for sale								19,821			19,185

TOTAL CURRENT LIABILITIES		192,191			214,700			200,637			201,375

DEFERRED TAX LIABILITIES		28,159			28,976			14,511			15,053
OTHER LIABILITIES		20,568			8,554			20,224			17,813
ACCRUED EMPLOYEE AND RETIREE BENEFITS		23,999			23,210			25,457			25,822
LONG-TERM DEBT		616,967			689,553			589,339			598,499

SHAREHOLDERS’ EQUITY:
Common stock		5,396			5,396			5,396			5,396
Additional paid-in capital		98,347			101,663			99,080			98,425
Earnings reinvested in the business		1,569,564			1,516,243			1,539,520			1,536,100
Treasury stock, at cost		(595,324	)		(597,800	)		(593,977	)		(595,324	)
Accumulated other comprehensive loss		(181,310	)		(165,555	)		(207,361	)		(163,008	)

TOTAL SHAREHOLDERS’ EQUITY		896,673			859,947			842,658			881,589

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	1,778,557		$	1,824,940		$	1,692,826		$	1,740,151

			Additional			Earnings Reinvested			Treasury Stock						Accumulated Other Comprehensive								Additional			Earnings Reinvested			Treasury Stock						Accumulated Other Comprehensive
Nine Months Ended September 30, 2019	Common Stock		Paid-In Capital			in the Business			Shares			Amount			Income (Loss)			Total Equity

Three Months Ended March 31, 2019																					Common Stock		Paid-In Capital			in the Business			Shares			Amount			Income (Loss)			Total Equity
Balances at December 31, 2018	$	5,396	$	101,663		$	1,516,243			11,731,223		$	(597,800	)	$	(165,555	)	$	859,947		$	5,396	$	101,663		$	1,516,243			11,731,223		$	(597,800	)	$	(165,555	)	$	859,947
Net earnings		-		-			99,009			-			-			-			99,009
Other comprehensive loss		-		-			-			-			-			(15,755	)		(15,755	)
Cash dividends paid - $1.08 per share		-		-			(45,688	)		-			-			-			(45,688	)
Share-based compensation		-		(816	)		-			-			-			-			(816	)
Non-vested stock issued upon vesting		-		(2,343	)		-			(45,981	)		2,343			-			-
Benefit plans		-		72			-			(18,597	)		948			-			1,020
Other		-		(229	)		-			15,991			(815	)		-			(1,044	)
Balances at September 30, 2019	$	5,396	$	98,347		$	1,569,564			11,682,636		$	(595,324	)	$	(181,310	)	$	896,673

Three Months Ended September 30, 2019
Balances at June 30, 2019	$	5,396	$	98,037		$	1,552,928			11,682,876		$	(595,336	)	$	(163,543	)	$	897,482
Net earnings		-		-			31,871			-			-			-			31,871			-		-			32,807			-			-			-			32,807
Other comprehensive loss		-		-			-			-			-			(17,767	)		(17,767	)		-		-			-			-			-			(716	)		(716	)
Cash dividends paid - $0.36 per share		-		-			(15,235	)		-			-			-			(15,235	)		-		-			(15,218	)		-			-			-			(15,218	)
Share-based compensation		-		339			-			-			-			-			339			-		687			-			-			-			-			687
Non-vested stock issued upon vesting		-		(12	)		-			(240	)		12			-			-			-		(1,784	)		-			(35,016	)		1,784			-			-
Benefit plans																						-		72			-			(18,597	)		948			-			1,020
Other		-		(17	)		-			-			-			-			(17	)		-		(153	)		-			12,769			(650	)		-			(803	)
Balances at September 30, 2019	$	5,396	$	98,347		$	1,569,564			11,682,636		$	(595,324	)	$	(181,310	)	$	896,673

Nine Months Ended September 30, 2018
Balances at December 31, 2017	$	5,396	$	107,176		$	1,414,485			10,759,291		$	(525,422	)	$	(149,334	)	$	852,301
Net earnings		-		-			124,510			-			-			-			124,510
Other comprehensive loss		-		-			-			-			-			(12,014	)		(12,014	)
Cash dividends paid - $0.99 per share		-		-			(42,195	)		-			-			-			(42,195	)
Share-based compensation		-		1,541			-			-			-			-			1,541
Stock options exercised		-		(80	)		-			(4,000	)		200			-			120
Non-vested stock issued upon vesting		-		(5,454	)		-			(111,185	)		5,454			-			-
Benefit plans		-		350			-			(15,126	)		769			-			1,119
Purchase of treasury stock		-		-			-			1,060,000			(76,734	)		-			(76,734	)
Other		-		(830	)		418			42,243			(2,067	)		-			(2,479	)
Balances at September 30, 2018	$	5,396	$	102,703		$	1,497,218			11,731,223		$	(597,800	)	$	(161,348	)	$	846,169

Three Months Ended September 30, 2018
Balances at June 30, 2018	$	5,396	$	102,943		$	1,463,976			11,671,223		$	(593,770	)	$	(162,116	)	$	816,429
Net earnings		-		-			47,193			-			-			-			47,193
Other comprehensive income		-		-			-			-			-			768			768
Cash dividends paid - $0.33 per share		-		-			(13,951	)		-			-			-			(13,951	)
Share-based compensation		-		(242	)		-			-			-			-			(242	)
Purchase of treasury stock		-		-			-			60,000			(4,030	)		-			(4,030	)
Other		-		2			-			-			-			-			2
Balances at September 30, 2018	$	5,396	$	102,703		$	1,497,218			11,731,223		$	(597,800	)	$	(161,348	)	$	846,169
Balances at March 31, 2019																					$	5,396	$	100,485		$	1,533,832			11,690,379		$	(595,718	)	$	(166,271	)	$	877,724

(In thousands)

Year ending December 31,
2019	$	2,383
2020		8,133
2021		4,696
2022		2,457
2023		1,474
Thereafter		2,682
Total lease payments		21,825
Less imputed interest		(1,762	)
Present value of lease liabilities	$	20,063

Exhibit	Description	Incorporated by Reference From	Filed Herewith

~~10.5(e)~~3.2	~~Amendment~~Sensient Technologies Corporation Amended and Restated By-Laws	Exhibit 3.2 to Current Report on Form 8-K filed March 27, 2020 (Commission File No. ~~4 to Receivables Purchase Agreement,~~1-7626)

10.1	Executive Employment Contract, dated as of ~~October 1, 2019, among Sensient Receivables LLC,~~February 13, 2020, by and between Sensient Technologies Corporation and ~~Wells Fargo Bank, National Association~~Paul Manning	Exhibit 10.1 to Current Report on Form 8-K ~~dated October 7, 2019~~filed February 14, 2020 (Commission File No. 1-7626)

31	Certifications of the Company’s Chairman, President & Chief Executive Officer and Senior Vice President & Chief Financial Officer pursuant to Rule 13a-14(a) of the Exchange Act		X

32	Certifications of the Company’s Chairman, President & Chief Executive Officer and Senior Vice President & Chief Financial Officer pursuant to 18 United States Code § 1350		X

101.INS	~~lnline~~Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the ~~lnline~~Inline XBRL document)		X

101.SCH	Inline XBRL Taxonomy Extension Schema Document		X

101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document		X

101.DEF	~~lnline~~Inline XBRL Taxonomy Extension Definition Linkbase Document		X

101.LAB	~~lnline~~Inline XBRL Taxonomy Extension Label Linkbase Document		X

101.PRE	~~lnline~~Inline XBRL Taxonomy Extension Presentation Linkbase Document		X

104	Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)		X

		SENSIENT TECHNOLOGIES CORPORATION

Date:	~~November 5, 2019~~May 4, 2020	By:	~~/s/~~ /s/ John J. Manning
			John J. Manning, Senior Vice President,
			General Counsel & Secretary

Date:	~~November 5, 2019~~May 4, 2020	By:	~~/s/~~ /s/ Stephen J. Rolfs
			Stephen J. Rolfs, Senior Vice President & Chief Financial Officer