Contact: | Kim Chase |
(414) 347-3706 |
Sensient Technologies Corporation | Page 2 |
Earnings Release – Quarter Ended September 30, 2018 |
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October 19, 2018 |
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Sensient Technologies Corporation | Page 3 |
Earnings Release – Quarter Ended September 30, 2018 |
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October 19, 2018 |
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Reported | ||||||||
Revenue | Quarter | Year-to-Date | ||||||
Flavors & Fragrances | (5.9 | %) | 0.5 | % | ||||
Color | 1.3 | % | 6.6 | % | ||||
Asia Pacific | (4.4 | %) | 0.8 | % | ||||
Total Revenue | (3.1 | %) | 2.8 | % | ||||
Local Currency (1) | ||||||||
Revenue | Quarter | Year-to-Date | ||||||
Flavors & Fragrances | (5.3 | %) | (1.2 | %) | ||||
Color | 4.1 | % | 5.1 | % | ||||
Asia Pacific | (1.5 | %) | 0.0 | % | ||||
Total Revenue | (1.4 | %) | 1.2 | % | ||||
(1) | Local currency percentage changes are described in more detail in the Reconciliation of Non-GAAP amounts below. |
Sensient Technologies Corporation | Page 4 |
Earnings Release – Quarter Ended September 30, 2018 |
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October 19, 2018 |
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Sensient Technologies Corporation | Page 5 |
Earnings Release – Quarter Ended September 30, 2018 |
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October 19, 2018 |
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Sensient Technologies Corporation | Page 6 |
Earnings Release – Quarter Ended September 30, 2018 |
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October 19, 2018 |
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Sensient Technologies Corporation | Page 7 |
Earnings Release – Quarter Ended September 30, 2018 |
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October 19, 2018 |
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www.sensient.com
Sensient Technologies Corporation | Page 8 |
(In thousands, except percentages and per share amounts) | |
(Unaudited) |
Consolidated Statements of Earnings | Three Months Ended September 30 | Nine Months Ended September 30 | ||||||||||||||||||||||
2018 | 2017 | % Change | 2018 | 2017 | % Change | |||||||||||||||||||
Revenue | $ | 342,734 | $ | 353,519 | -3.1 | % | $ | 1,062,252 | $ | 1,033,391 | 2.8 | % | ||||||||||||
Cost of products sold | 227,161 | 230,784 | -1.6 | % | 702,138 | 670,486 | 4.7 | % | ||||||||||||||||
Selling and administrative expenses | 65,309 | 70,725 | -7.7 | % | 201,988 | 242,478 | -16.7 | % | ||||||||||||||||
Operating income | 50,264 | 52,010 | -3.4 | % | 158,126 | 120,427 | 31.3 | % | ||||||||||||||||
Interest expense | 5,407 | 4,946 | 16,517 | 14,474 | ||||||||||||||||||||
Earnings before income taxes | 44,857 | 47,064 | 141,609 | 105,953 | ||||||||||||||||||||
Income taxes | (2,336 | ) | 14,851 | 17,099 | 29,774 | |||||||||||||||||||
Net earnings | $ | 47,193 | $ | 32,213 | 46.5 | % | $ | 124,510 | $ | 76,179 | 63.4 | % | ||||||||||||
Earnings per share of common stock: | ||||||||||||||||||||||||
Basic | $ | 1.12 | $ | 0.74 | $ | 2.93 | $ | 1.73 | ||||||||||||||||
Diluted | $ | 1.12 | $ | 0.73 | $ | 2.92 | $ | 1.72 | ||||||||||||||||
Average common shares outstanding: | ||||||||||||||||||||||||
Basic | 42,240 | 43,624 | 42,464 | 43,947 | ||||||||||||||||||||
Diluted | 42,313 | 43,864 | 42,571 | 44,209 |
Three Months Ended September 30 | Nine Months Ended September 30 | |||||||||||||||||||||||
| 2018 | 2017 | % Change | 2018 | 2017 | % Change | ||||||||||||||||||
Operating income (GAAP) | $ | 50,264 | $ | 52,010 | -3.4 | % | $ | 158,126 | $ | 120,427 | 31.3 | % | ||||||||||||
Restructuring - Cost of products sold | - | 3,073 | - | 3,415 | ||||||||||||||||||||
Restructuring - Selling and administrative | - | 2,927 | - | 30,212 | ||||||||||||||||||||
Other - Selling and administrative | - | 14 | - | 11,555 | ||||||||||||||||||||
Adjusted operating income | $ | 50,264 | $ | 58,024 | -13.4 | % | $ | 158,126 | $ | 165,609 | -4.5 | % | ||||||||||||
Net earnings (GAAP) | $ | 47,193 | $ | 32,213 | 46.5 | % | $ | 124,510 | $ | 76,179 | 63.4 | % | ||||||||||||
Restructuring and other, before tax | - | 6,014 | - | 45,182 | ||||||||||||||||||||
Tax impact of restructuring and other | - | 681 | - | (7,424 | ) | |||||||||||||||||||
Impact of the 2017 Tax Legislation | (7,061 | ) | - | (7,061 | ) | - | ||||||||||||||||||
Adjusted net earnings | $ | 40,132 | $ | 38,908 | 3.1 | % | $ | 117,449 | $ | 113,937 | 3.1 | % | ||||||||||||
Diluted EPS (GAAP) | $ | 1.12 | $ | 0.73 | 53.4 | % | $ | 2.92 | $ | 1.72 | 69.8 | % | ||||||||||||
Restructuring and other, net of tax | - | 0.15 | - | 0.85 | ||||||||||||||||||||
2017 Tax Legislation | (0.17 | ) | - | (0.17 | ) | - | ||||||||||||||||||
Adjusted diluted EPS | $ | 0.95 | $ | 0.89 | 6.7 | % | $ | 2.76 | $ | 2.58 | 7.0 | % |
Sensient Technologies Corporation | Page 9 |
(In thousands, except per share amounts) | |
(Unaudited) |
Three Months Ended September 30, 2018 | Nine Months Ended September 30, 2018 | |||||||||||||||||||||||
Revenue | Total | Foreign Exchange Rates | Local Currency | Total | Foreign Exchange Rates | Local Currency | ||||||||||||||||||
Flavors & Fragrances | (5.9 | %) | (0.6 | %) | (5.3 | %) | 0.5 | % | 1.8 | % | (1.2 | %) | ||||||||||||
Color | 1.3 | % | (2.8 | %) | 4.1 | % | 6.6 | % | 1.5 | % | 5.1 | % | ||||||||||||
Asia Pacific | (4.4 | %) | (2.9 | %) | (1.5 | %) | 0.8 | % | 0.8 | % | 0.0 | % | ||||||||||||
Total Revenue | (3.1 | %) | (1.7 | %) | (1.4 | %) | 2.8 | % | 1.6 | % | 1.2 | % |
Results by Segment | Three Months Ended September 30 | Nine Months Ended September 30 | ||||||||||||||||||||||
Revenue | 2018 | 2017 | % Change | 2018 | 2017 | % Change | ||||||||||||||||||
Flavors & Fragrances | $ | 184,397 | $ | 195,992 | -5.9 | % | $ | 571,401 | $ | 568,423 | 0.5 | % | ||||||||||||
Color | 134,961 | 133,223 | 1.3 | % | 426,412 | 400,183 | 6.6 | % | ||||||||||||||||
Asia Pacific | 31,275 | 32,708 | -4.4 | % | 92,063 | 91,289 | 0.8 | % | ||||||||||||||||
Corporate & Other | 169 | - | 169 | - | ||||||||||||||||||||
Intersegment elimination | (8,068 | ) | (8,404 | ) | (27,793 | ) | (26,504 | ) | ||||||||||||||||
Consolidated | $ | 342,734 | $ | 353,519 | -3.1 | % | $ | 1,062,252 | $ | 1,033,391 | 2.8 | % | ||||||||||||
Operating Income | ||||||||||||||||||||||||
Flavors & Fragrances | $ | 24,814 | $ | 33,006 | -24.8 | % | $ | 74,142 | $ | 90,278 | -17.9 | % | ||||||||||||
Color | 27,269 | 28,624 | -4.7 | % | 92,074 | 87,913 | 4.7 | % | ||||||||||||||||
Asia Pacific | 5,750 | 5,780 | -0.5 | % | 15,256 | 14,750 | 3.4 | % | ||||||||||||||||
Corporate & Other | (7,569 | ) | (15,400 | ) | (23,346 | ) | (72,514 | ) | ||||||||||||||||
Consolidated | $ | 50,264 | $ | 52,010 | -3.4 | % | $ | 158,126 | $ | 120,427 | 31.3 | % |
Sensient Technologies Corporation | Page 10 |
(In thousands, except per share amounts) | |
(Unaudited) |
Consolidated Condensed Balance Sheets | ||||||||
September 30 | 2018 | 2017 | ||||||
Cash and cash equivalents | $ | 36,760 | $ | 24,654 | ||||
Trade accounts receivable, net | 271,268 | 222,552 | ||||||
Inventories | 484,811 | 456,480 | ||||||
Other current assets | 40,152 | 43,245 | ||||||
Assets Held for Sale | 1,903 | 7,396 | ||||||
Total Current Assets | 834,894 | 754,327 | ||||||
Goodwill & intangible assets (net) | 435,796 | 414,785 | ||||||
Property, plant, and equipment (net) | 492,171 | 484,761 | ||||||
Other assets | 78,046 | 84,992 | ||||||
Total Assets | $ | 1,840,907 | $ | 1,738,865 | ||||
Trade accounts payable | $ | 97,027 | $ | 101,104 | ||||
Short-term debt | 20,096 | 20,092 | ||||||
Other current liabilities | 77,051 | 89,015 | ||||||
Total Current Liabilities | 194,174 | 210,211 | ||||||
Long-term debt | 746,012 | 607,395 | ||||||
Accrued employee and retiree benefits | 22,094 | 21,283 | ||||||
Other liabilities | 32,458 | 20,444 | ||||||
Shareholders’ Equity | 846,169 | 879,532 | ||||||
Total Liabilities and Shareholders’ Equity | $ | 1,840,907 | $ | 1,738,865 |
Consolidated Statements of Cash Flows | ||||||||
Nine Months Ended September 30 | 2018 | 2017 | ||||||
Cash flows from operating activities: | ||||||||
Net earnings | $ | 124,510 | $ | 76,179 | ||||
Adjustments to arrive at net cash provided by operating activities: | ||||||||
Depreciation and amortization | 39,057 | 36,626 | ||||||
Stock-based compensation | 1,541 | 6,296 | ||||||
Net loss on assets | 311 | 1,371 | ||||||
Loss on divestiture of businesses | - | 33,160 | ||||||
Deferred income taxes | 3,152 | (9,087 | ) | |||||
Changes in operating assets and liabilities | (159,711 | ) | (122,386 | ) | ||||
Net cash provided by operating activities | 8,860 | 22,159 | ||||||
Cash flows from investing activities: | ||||||||
Acquisition of property, plant and equipment | (34,090 | ) | (32,825 | ) | ||||
Cash receipts on sold receivables | 91,142 | 86,229 | ||||||
Proceeds from sale of assets | 283 | 5,444 | ||||||
Proceeds from divestiture of businesses | - | 12,457 | ||||||
Acquisition of new businesses | (31,100 | ) | - | |||||
Other investing activity | 616 | 2,396 | ||||||
Net cash provided by investing activities | 26,851 | 73,701 | ||||||
Cash flows from financing activities: | ||||||||
Proceeds from additional borrowings | 248,426 | 188,387 | ||||||
Debt payments | (158,214 | ) | (190,164 | ) | ||||
Purchase of treasury stock | (76,734 | ) | (64,486 | ) | ||||
Dividends paid | (42,195 | ) | (39,696 | ) | ||||
Other financing activity | (2,777 | ) | (988 | ) | ||||
Net cash used in financing activities | (31,494 | ) | (106,947 | ) | ||||
Effect of exchange rate changes on cash and cash equivalents | 3,199 | 9,876 | ||||||
Net increase (decrease) in cash and cash equivalents | 7,416 | (1,211 | ) | |||||
Cash and cash equivalents at beginning of period | 29,344 | 25,865 | ||||||
Cash and cash equivalents at end of period | $ | 36,760 | $ | 24,654 |
Supplemental Information | ||||||||
Nine Months Ended September 30, | 2018 | 2017 | ||||||
Dividends paid per share | $ | 0.99 | $ | 0.90 |