EX-99.1 2 c47099exv99w1.htm EX-99.1 exv99w1
EXHIBIT 99.1
FOR IMMEDIATE RELEASE
     
Contact:
  Dick Hobbs
 
  (414) 347-3836
Sensient Technologies Corporation
Reports Record Third Quarter Revenue and Earnings
Quarterly EPS Increases 13.6%
Total Debt Down $25.5 Million in the Quarter
     MILWAUKEE—October 16, 2008—Sensient Technologies Corporation (NYSE: SXT) reported record third quarter revenue of $318.6 million, up 8.3% from the comparable period in 2007. Favorable foreign currency translation increased revenues in the quarter by approximately 2%. Diluted earnings per share rose 13.6% to a third quarter record of 50 cents, compared to 44 cents in last year’s third quarter.
     Revenue for the first nine months of this year was $958.8 million, up from $883.9 million in the prior year’s comparable period. Diluted earnings per share for the nine months ended September 30, 2008, were $1.46 compared to $1.26 in last year’s first nine months.
     “Sensient has achieved eleven consecutive quarters of strong revenue and earnings growth,” said Kenneth P. Manning, Chairman and CEO of Sensient Technologies Corporation. “Our consistently strong results demonstrate that our strategies for organic growth are succeeding.”
BUSINESS REVIEW
     The Flavors & Fragrances Group reported record third quarter revenue and operating income. Revenue for the three months ended September 30, 2008, increased 7.0% to $206.5 million. Quarterly operating income was up 8.0% to $31.6 million compared to the third quarter of 2007. Year-to-date revenue increased to $616.1 million and operating income increased to $94.3 million. Group revenue in the quarter benefited from improved pricing
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Sensient Technologies Corporation
Earnings Release – Third quarter ended September 30, 2008
October 16, 2008 		  Page 2
and favorable foreign currency translation. Solid volume growth was achieved across several product lines in the U.S and Canada. Higher sales and favorable product mix in the quarter more than offset the impact of increased raw material and energy costs.
     The Color Group’s revenue increased 12.7% to a third quarter record of $102.7 million, compared to $91.1 million in last year’s third quarter. Operating income for the quarter was $17.7 million, up 12.6% from $15.8 million reported in the third quarter of 2007. Year-to-date revenue increased to $312.8 million and operating income increased to $55.5 million. Quarterly revenue for the Color Group reflects solid growth of food and beverage colors. Sales of pharmaceutical colors and technical colors were also strong in the quarter. Third quarter operating profit increased on solid volume growth and improved pricing, partially offset by higher raw material costs.
2008 OUTLOOK
     Sensient expects 2008 diluted earnings per share to be between $1.86 and $1.88. This guidance represents an increase over the previously provided range which was between $1.80 and $1.84.
CONFERENCE CALL
     The company will host a conference call to discuss its 2008 third quarter financial results at 10:00 a.m. CDT on Friday, October 17, 2008. 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 17, 2008, through midnight on October 24, 2008, by calling (706) 645-9291 and referring to passcode 67016195. A transcript of the call will also be posted on the company’s web site at www.sensient-tech.com after the call concludes.
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Sensient Technologies Corporation
Earnings Release – Third quarter ended September 30, 2008
October 16, 2008 		  Page 3
     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, 2007, and quarterly report on Form 10-Q for the quarter ended June 30, 2008. 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 chemicals. The company’s customers include major international manufacturers representing some of the world’s best-known brands. Sensient is headquartered in Milwaukee, Wisconsin.
www.sensient-tech.com
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Sensient Technologies Corporation
(In thousands, except percentages and per share amounts) 		  Page 4
Consolidated Statements of Earnings
                                                 
    Three Months Ended September 30,     Nine Months Ended September 30,  
    2008     2007     % Change     2008     2007     % Change  
Revenue
   $ 318,601     $ 294,311       8.3     $ 958,815     $ 883,889       8.5  
 
                                                
Cost of products sold
     222,705       205,326       8.5       665,555       614,280       8.3  
Selling and administrative expenses
     55,041       50,856       8.2       167,919       157,277       6.8  
 
                                        
 
                                                
Operating income
     40,855       38,129       7.1       125,341       112,332       11.6  
Interest expense
     7,977       8,640               25,035       27,362          
 
                                        
 
                                                
Earnings before income taxes
     32,878       29,489       11.5       100,306       84,970       18.0  
Income taxes
     8,776       8,706               30,067       25,608          
 
                                        
 
                                                
Net earnings
   $ 24,102     $ 20,783       16.0     $ 70,239     $ 59,362       18.3  
 
                                        
 
                                                
Earnings per common share:
                                                
Basic
   $ 0.50     $ 0.44       13.6     $ 1.48     $ 1.27       16.5  
 
                                        
Diluted
   $ 0.50     $ 0.44       13.6     $ 1.46     $ 1.26       15.9  
 
                                        
 
                                                
Average common shares outstanding:
                                                
Basic
     47,792       46,818       2.1       47,554       46,627       2.0  
 
                                        
Diluted
     48,320       47,306       2.1       48,098       47,123       2.1  
 
                                        
Results by Segment
                                                 
    Three Months Ended September 30,     Nine Months Ended September 30,  
    2008     2007     % Change     2008     2007     % Change  
Revenue
                                                
 
Flavors & Fragrances
   $ 206,468     $ 192,987       7.0     $ 616,093     $ 572,344       7.6  
Color
     102,659       91,085       12.7       312,771       283,095       10.5  
Corporate & Other*
     19,314       17,152       12.6       58,168       50,697       14.7  
Intersegment elimination
     (9,840 )     (6,913 )     42.3       (28,217 )     (22,247 )     26.8  
 
                                        
 
                                                
Consolidated
   $ 318,601     $ 294,311       8.3     $ 958,815     $ 883,889       8.5  
 
                                        
 
                                                
Operating Income
                                                
 
                                                
Flavors & Fragrances
   $ 31,565     $ 29,232       8.0     $ 94,304     $ 85,010       10.9  
Color
     17,738       15,752       12.6       55,531       50,022       11.0  
Corporate & Other*
     (8,448 )     (6,855 )     23.2       (24,494 )     (22,700 )     7.9  
 
                                        
 
                                                
Consolidated
   $ 40,855     $ 38,129       7.1     $ 125,341     $ 112,332       11.6  
 
                                        
 
*   Corporate & Other contains the Company’s Asia Pacific and China operations as well as certain unallocated corporate expenses. Prior to the first quarter of 2008, the results of the Company’s business in China were reported as part of the Flavors & Fragrances Group. Results for 2007 have been restated to reflect this change.
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Sensient Technologies Corporation
(In thousands, except per share amounts) 		  Page 5
Consolidated Condensed Balance Sheets
September 30,
                 
    2008     2007  
Current assets
   $ 669,515     $ 589,273  
Goodwill and intangibles (net)
     485,286       483,801  
Property, plant and equipment (net)
     416,839       400,379  
Other assets
     42,607       45,410  
 
            
 
                
Total Assets
   $ 1,614,247     $ 1,518,863  
 
            
 
                
Current liabilities
   $ 224,724     $ 219,097  
Long-term debt
     450,437       445,180  
Accrued employee and retiree benefits
     45,275       46,948  
Other liabilities
     28,934       18,851  
Shareholders’ equity
     864,877       788,787  
 
            
 
                
Total Liabilities and Shareholders’ Equity
   $ 1,614,247     $ 1,518,863  
 
            
Consolidated Statements of Cash Flows
Nine Months Ended September 30,
                 
    2008     2007  
Net cash provided by operating activities
   $ 66,288     $ 80,660  
 
            
 
                
Cash flows from investing activities:
                
Acquisition of property, plant and equipment
     (34,384 )     (25,499 )
Proceeds from sale of assets
     1,946       2,114  
Other investing activity
     1,293       (176 )
 
            
 
                
Net cash used in investing activities
     (31,145 )     (23,561 )
 
            
 
                
Cash flows from financing activities:
                
Proceeds from additional borrowings
     40,330       38,977  
Debt payments
     (65,420 )     (83,110 )
Dividends paid
     (26,412 )     (23,484 )
Proceeds from options exercised and other
     15,959       12,024  
 
            
 
                
Net cash used in financing activities
     (35,543 )     (55,593 )
 
            
 
                
Effect of exchange rate changes on cash and cash equivalents
     (23 )     478  
 
            
 
                
Net (decrease) increase in cash and cash equivalents
     (423 )     1,984  
Cash and cash equivalents at beginning of period
     10,522       5,035  
 
            
Cash and cash equivalents at end of period
   $ 10,099     $ 7,019  
 
            
Supplemental Information
Nine Months Ended September 30,
                 
    2008   2007
Depreciation and amortization
   $ 33,828     $ 33,154  
Dividends per share
   $ 0.55     $ 0.50