Sensient Technologies Corporation : Reports Results for the Third Quarter Ended September 30, 2011
10/20/2011| 06:25pm US/Eastern
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Sensient Technologies Corporation (NYSE: SXT) reported diluted earnings
per share of 64 cents for the quarter ended September 30, 2011, a
third-quarter record and an increase of 12.3% over the 57 cents earned
in last year's third quarter, excluding a two cent benefit from an
insurance recovery. The reported results in the third quarter of 2010
were 59 cents. Consolidated revenue reached a new third-quarter high of
$363.8 million, an increase of 6.7% over the $340.9 million reported in
the third quarter of 2010. Foreign currency translation increased both
revenue and operating income by approximately 4% in the quarter. The
Color Group and the Flavors & Fragrances Group each reported new
third-quarter records for both revenue and operating income.
Revenue for the nine months ended September 30, 2011, was $1.1 billion,
an increase of 10.3% over the $988.9 million reported in the first nine
months of 2010. Diluted earnings per share increased 12.9% to $1.84
compared to $1.63, excluding the two cent benefit from the insurance
recovery, reported for last year's nine month period. The reported
earnings for the nine months ended September 30, 2010, were $1.65 per
share. Foreign currency translation also increased both revenue and
operating income by approximately 4% in the year-to-date period.
Cash provided by operating activities was $39.7 million in the third
quarter and $106.6 million for the first nine months of 2011. Total debt
at September 30, 2011, was $322.1 million compared to $360.3 million as
of September 30, 2010.
"Our businesses performed very well this quarter, and I am pleased with
the record results," said Kenneth P. Manning, Chairman, President, and
CEO of Sensient Technologies Corporation. "We continue to see
opportunities for growth and we have built the infrastructure that will
allow us to convert these opportunities into new business. I am very
optimistic about the Company's future."
BUSINESS REVIEW
The Color Group reported revenue of $121.0 million in the third quarter
of 2011, an increase of 6.8% over the $113.3 million reported in last
year's third quarter. Operating income increased 14.2% to $22.9 million
from $20.0 million in the third quarter of 2010. Favorable foreign
currency translation increased revenue by 4.2% and operating income by
4.7%. The strong demand for natural colors continues to drive the
Group's revenue and profit growth.
The Flavors & Fragrances Group third quarter revenue increased 6.7% to
$221.2 million, from $207.2 million in the third quarter of 2010.
Operating income for the third quarter was $33.6 million, a 4.5%
increase over the $32.2 million reported in last year's third quarter.
Foreign currency translation increased revenue and operating income by
approximately 3% and 2%, respectively. Strong performances by the U.S.
flavor businesses drove the revenue and operating income growth.
Corporate & Other, which includes the Company's operations in Asia
Pacific and China, reported revenue of $34.4 million for the third
quarter, an increase of 11.2% over the $31.0 million reported in the
third quarter of 2010.
2011 OUTLOOK
Sensient has increased its guidance for 2011 diluted earnings per share,
which is now expected to be between $2.38 and $2.42. The Company's
previous guidance had been between $2.32 and $2.37.
CONFERENCE CALL
The Company will host a conference call to discuss its 2011 third
quarter financial results at 10:00 a.m. CDT on Friday, October 21, 2011.
To make a reservation for the conference call, please contact InterCall
Teleconferencing at (706) 645-6973 and refer to the Sensient
Technologies Corporation conference call.
A replay will be available beginning at 1:00 p.m. CDT on October 21,
2011, through midnight on October 28, 2011, by calling (404) 537-3406
and referring to conference identification number 13272282. 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, 2010, and quarterly report on Form 10-Q for the quarter ended June
30, 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 September 30,
Nine Months Ended September 30,
2011
2010
% Change
2011
2010
% Change
Revenue
$
363,751
$
340,868
6.7
%
$
1,090,431
$
988,913
10.3
%
Cost of products sold
249,086
234,592
6.2
%
748,916
682,730
9.7
%
Selling and administrative expenses
64,722
58,516
10.6
%
193,642
172,622
12.2
%
Operating income
49,943
47,760
4.6
%
147,873
133,561
10.7
%
Interest expense
4,934
5,224
14,919
15,490
Earnings before income taxes
45,009
42,536
5.8
%
132,954
118,071
12.6
%
Income taxes
13,012
13,319
41,056
36,702
Net earnings
$
31,997
$
29,217
9.5
%
$
91,898
$
81,369
12.9
%
Earnings per common share:
Basic
$
0.64
$
0.59
8.5
%
$
1.85
$
1.66
11.4
%
Diluted
$
0.64
$
0.59
8.5
%
$
1.84
$
1.65
11.5
%
Average common shares outstanding:
Basic
49,776
49,277
1.0
%
49,723
49,051
1.4
%
Diluted
49,967
49,565
0.8
%
49,911
49,352
1.1
%
Impact of Third Quarter 2010 Insurance Recovery Related to the
2009 Environmental Settlement
The Company's third quarter 2010 results include income from the
recovery of insurance reimbursements related to the 2009
environmental settlement. The following table provides a summary
of the impact of the recovery on the Company's reported diluted
earnings per common share.
Three Months Ended September 30,
Nine Months Ended September 30,
2011
2010
% Change
2011
2010
% Change
Diluted earnings per common share as reported
$
0.64
$
0.59
$
1.84
$
1.65
Insurance reimbursements
-
(0.02
)
-
(0.02
)
$
0.64
$
0.57
12.3
%
$
1.84
$
1.63
12.9
%
Results by Segment
Three Months Ended September 30,
Nine Months Ended September 30,
Revenue
2011
2010
% Change
2011
2010
% Change
Flavors & Fragrances
$
221,182
$
207,204
6.7
%
$
654,352
$
602,953
8.5
%
Color
120,975
113,250
6.8
%
379,038
334,185
13.4
%
Corporate & Other
34,442
30,973
11.2
%
99,579
82,345
20.9
%
Intersegment elimination
(12,848
)
(10,559
)
21.7
%
(42,538
)
(30,570
)
39.1
%
Consolidated
$
363,751
$
340,868
6.7
%
$
1,090,431
$
988,913
10.3
%
Operating Income
Flavors & Fragrances
$
33,581
$
32,150
4.5
%
$
98,685
$
92,557
6.6
%
Color
22,891
20,036
14.2
%
69,886
59,024
18.4
%
Corporate & Other
(6,529
)
(4,426
)
47.5
%
(20,698
)
(18,020
)
14.9
%
Consolidated
$
49,943
$
47,760
4.6
%
$
147,873
$
133,561
10.7
%
Sensient Technologies Corporation
(In thousands, except per share amounts)
Consolidated Condensed Balance Sheets
September 30,
2011
2010
Current assets
$
697,625
$
678,341
Goodwill and intangibles (net)
455,360
460,253
Property, plant and equipment (net)
437,998
418,834
Other assets
40,442
34,990
Total Assets
$
1,631,425
$
1,592,418
Current liabilities
$
212,967
$
213,072
Long-term debt
301,064
333,625
Accrued employee and retiree benefits
57,740
53,308
Other liabilities
26,758
27,054
Shareholders' equity
1,032,896
965,359
Total Liabilities and Shareholders' Equity
$
1,631,425
$
1,592,418
Consolidated Statements of Cash Flows
Nine Months Ended September 30,
2011
2010
Net cash provided by operating activities
$
106,572
$
110,545
Cash flows from investing activities:
Acquisition of property, plant and equipment
(44,125
)
(33,024
)
Proceeds from sale of assets
3
88
Other investing activities
(207
)
408
Net cash used in investing activities
(44,329
)
(32,528
)
Cash flows from financing activities:
Proceeds from additional borrowings
49,407
128,671
Debt payments
(78,169
)
(190,574
)
Dividends paid
(31,451
)
(29,072
)
Proceeds from options exercised and other
3,006
13,414
Net cash used in financing activities
(57,207
)
(77,561
)
Effect of exchange rate changes on cash and cash equivalents
(5,807
)
(269
)
Net (decrease) increase in cash and cash equivalents
(771
)
187
Cash and cash equivalents at beginning of period
14,255
12,219
Cash and cash equivalents at end of period
$
13,484
$
12,406
Supplemental Information
Nine Months Ended September 30,
2011
2010
Depreciation and amortization
$
34,983
$
32,774
Dividends per share
$
0.63
$
0.59
Sensient Technologies Corporation Dick Hobbs (414) 347-3836
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