Sensient Technologies Corporation : Reports Results for the Quarter Ended March 31, 2012
04/20/2012| 08:00am US/Eastern
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Revenue Increased 5% to a New First Quarter High
Earnings per Share Reach 58 Cents; A First Quarter Record and a 9%
Increase
Sensient Technologies Corporation (NYSE: SXT) reported new first quarter
records for revenue, operating income and earnings per share for the
three months ended March 31, 2012. Diluted earnings per share were 58
cents, an increase of 9.4% over the 53 cents reported in last year's
first quarter. Consolidated revenue increased 4.6% to $365.7 million in
the first quarter compared to $349.7 million reported in the comparable
period for 2011. Operating income for the three months ended March 31,
2012, was $46.5 million, an increase of 6.6% over the $43.6 million
reported in the first three months of last year. In local currency,
revenue was up 6.3% and operating income was up 8.8% in the quarter.
Cash provided by operating activities was $9.0 million in the first
quarter of 2012 compared to $28.4 million in the first quarter of 2011.
Cash flow was impacted by increases in working capital related to growth
in revenue and inventory restocking.
"The Company continues to perform very well," said Kenneth P. Manning,
Chairman, President and CEO of Sensient Technologies Corporation. "We
achieved solid revenue and operating profit growth during the first
quarter and we expect to sustain this level of growth, in local currency
terms, for the rest of the year. We continue to see opportunities for
growth, and I remain very optimistic about the Company's future."
BUSINESS REVIEW
The Color Group reported revenue of $131.3 million in the first quarter
of 2012, a record level for the first quarter and an increase of 4.5%
over the $125.7 million reported in the comparable period last year.
Operating income increased 14.2% to $25.5 million, an all-time quarterly
high, from $22.3 million reported in the first quarter of 2011. In local
currency, revenue increased 6.9% and operating income increased 16.7%.
The operating income growth for the Group was driven by strong growth in
the North American food color business and the inks businesses in both
North America and Europe. Color Group operating margins improved 160
basis points in the quarter to 19.4%.
The Flavors & Fragrances Group reported revenue of $214.7 million, a new
high for the first quarter and an increase of 4.3% compared to $206.0
million reported in the first quarter of 2011. Operating income
increased to $29.1 million in the quarter from $28.6 million in the
prior year. In local currency, revenue increased 6.1% and operating
income increased 3.0%.
The Corporate & Other segment, which includes the Company's operations
in Asia Pacific and China, and the flavor businesses in Central and
South America, reported revenue of $37.2 million, an increase of 7.5%
compared to the $34.6 million reported in the first quarter of 2011.
2012 OUTLOOK
Sensient has increased its guidance for 2012 diluted earnings per share,
which is now expected to be between $2.50 and $2.59. The Company's
previous guidance had been a range of $2.48 to $2.58 per share.
CONFERENCE CALL
The Company will host a conference call to discuss its 2012 first
quarter financial results at 10:00 a.m. CDT on Friday, April 20, 2012.
To make a reservation for the conference call, contact InterCall
Teleconferencing at (706) 645-6973. To participate in the conference
call, contact InterCall Teleconferencing at (706) 758-1089 and refer to
conference identification number 67473347.
A replay will be available beginning at 1:00 p.m. CDT on April 20, 2012,
through midnight on April 27, 2012, by calling (404) 537-3406 and
referring to conference identification number 67473347. A transcript of
the call will also be posted on the Company's web site at www.sensient.com
after the call concludes.
This release contains forward-looking statements (as that term is
defined in the Private Securities Litigation Reform Act of 1995) that
reflect management's current assumptions and estimates of future
economic circumstances, industry conditions, Company performance and
financial results.A variety of factors could cause the Company's
actual results and experience to differ materially from the anticipated
results, including, but not limited to the factors noted in this press
release and in the Management's Discussion and Analysis in our most
recently filed annual report on Form 10-K for the year ended December
31, 2011. The forward-looking statements in this press release speak
only as to the date of this release.Sensient Technologies
Corporation expressly disclaims any obligation or undertaking to release
publicly any updates or revisions to such statements to reflect any
change in its expectations upon which such statements are based.
ABOUT SENSIENT TECHNOLOGIES
Sensient Technologies Corporation is a leading global manufacturer and
marketer of colors, flavors and fragrances. Sensient employs advanced
technologies at facilities around the world to develop specialty food
and beverage systems, cosmetic and pharmaceutical systems, inkjet and
specialty inks and colors, and other specialty and fine chemicals. The
Company's customers include major international manufacturers
representing most of the world's best-known brands. Sensient is
headquartered in Milwaukee, Wisconsin.
(In thousands, except percentages and per share amounts)
Consolidated Statements of Earnings
Three Months Ended March 31,
2012
2011
% Change
Revenue
$
365,660
$
349,686
4.6%
Cost of products sold
250,328
241,979
3.5%
Selling and administrative expenses
68,843
64,110
7.4%
Operating income
46,489
43,597
6.6%
Interest expense
4,406
4,850
Earnings before income taxes
42,083
38,747
8.6%
Income taxes
13,177
12,332
Net earnings
$
28,906
$
26,415
9.4%
Earnings per common share:
Basic
$
0.58
$
0.53
9.4%
Diluted
$
0.58
$
0.53
9.4%
Average common shares outstanding:
Basic
49,795
49,637
0.3%
Diluted
50,016
49,818
0.4%
Results by Segment
Three Months Ended March 31,
Revenue
2012
2011
% Change
Flavors & Fragrances
$
214,731
$
205,974
4.3%
Color
131,272
125,671
4.5%
Corporate & Other *
37,176
34,595
7.5%
Intersegment elimination
(17,519
)
(16,554
)
5.8%
Consolidated
$
365,660
$
349,686
4.6%
Operating Income
Flavors & Fragrances
$
29,065
$
28,610
1.6%
Color
25,522
22,347
14.2%
Corporate & Other *
(8,098
)
(7,360
)
10.0%
Consolidated
$
46,489
$
43,597
6.6%
* Beginning in the first quarter of 2012, the results of operations
for the Company's flavor businesses in Central and South America,
previously reported in the Flavors & Fragrances Group, are reported
in the Corporate & Other segment. Results for 2011 have been
restated to reflect this change.
Sensient Technologies Corporation
(In thousands, except per share amounts)
Consolidated Condensed Balance Sheets
March 31,
2012
2011
Current assets
$
733,790
$
693,612
Goodwill and intangibles (net)
466,461
472,150
Property, plant and equipment (net)
463,082
442,195
Other assets
38,070
35,854
Total Assets
$
1,701,403
$
1,643,811
Current liabilities
$
198,700
$
195,203
Long-term debt
336,716
323,216
Accrued employee and retiree benefits
54,068
55,016
Other liabilities
32,523
35,782
Shareholders' equity
1,079,396
1,034,594
Total Liabilities and Shareholders' Equity
$
1,701,403
$
1,643,811
Consolidated Statements of Cash Flows
Three Months Ended March 31,
2012
2011
Net cash provided by operating activities
$
8,978
$
28,413
Cash flows from investing activities:
Acquisition of property, plant and equipment
(16,939
)
(10,124
)
Proceeds from sale of assets
32
-
Other investing activity
(94
)
(60
)
Net cash used in investing activities
(17,001
)
(10,184
)
Cash flows from financing activities:
Proceeds from additional borrowings
31,364
12,002
Debt payments
(11,613
)
(23,131
)
Purchase of treasury stock
(15,360
)
-
Dividends paid
(10,561
)
(10,487
)
Proceeds from options exercised and other
272
1,319
Net cash used in financing activities
(5,898
)
(20,297
)
Effect of exchange rate changes on cash and cash equivalents
4,415
1,833
Net decrease in cash and cash equivalents
(9,506
)
(235
)
Cash and cash equivalents at beginning of period
22,855
14,255
Cash and cash equivalents at end of period
$
13,349
$
14,020
Supplemental Information
Three Months Ended March 31,
2012
2011
Depreciation and amortization
$
12,037
$
11,588
Dividends per share
$
0.21
$
0.21
Sensient Technologies Corporation Dick Hobbs, (414) 347-3706
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