EX-99.1 2 c12198exv99w1.htm PRESS RELEASE exv99w1
 

Contact:   Dick Hobbs
(414) 347-3836
Sensient Technologies Corporation
Reports Earnings for the Year Ended December 31, 2006
Earnings Increase Sharply on Strong Revenues
Flavors & Fragrances Group Achieves Record Results
     MILWAUKEE—February 12, 2007—Sensient Technologies Corporation (NYSE: SXT) reported that its consolidated revenue for the year ended December 31, 2006, increased 7.3% to $1.1 billion. Fourth quarter revenue for 2006 was up 7.9% to $272.8 million. The increase in annual revenue was driven by higher Color segment sales and record sales within the Flavors & Fragrances segment. Foreign currency exchange rates had a favorable impact on revenue of .9% and 3.1%, respectively, for the year and the fourth quarter.
     Diluted earnings per share for the twelve months ended December 31, 2006, increased 25.2% to $1.44 compared to $1.15 per share before 2005 restructuring and other charges of $.21 per share. Diluted earnings per share for the fourth quarter of 2006 rose 37.5% to $.33 compared to $.24 reported in the prior year’s fourth quarter before the 2005 restructuring and other charges. Reported earnings per share for the 2005 full year and fourth quarter were $.94 and $.03, respectively, when restructuring and other charges of $.21 per share are included.
     “Our major business segments enjoyed good volume growth and improved product mix during 2006,” said Kenneth P. Manning, Chairman, President and CEO of Sensient Technologies Corporation. “This was an outstanding year and I expect our businesses to continue to perform well in 2007.”
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Sensient Technologies Corporation
Earnings Release — Year ended December 31, 2006
February 12, 2007 		  Page 2
BUSINESS REVIEW
     The Flavors & Fragrances Group achieved record results in 2006, as revenue for the twelve months increased 9.4% to $733.4 million and operating income increased 26.7% to $104.5 million. Flavors & Fragrances Group revenue grew 9.4% to $185.0 million in the quarter ended December 31, 2006, compared to $169.1 million in the prior year’s fourth quarter. Quarterly operating income jumped 42.8% to $27.0 million compared to $18.9 million in the fourth quarter of 2005.
     Flavors & Fragrances Group revenue in the year and the quarter benefited from higher volumes and improved pricing, particularly in the United States. Flavor sales in Latin America and sales within the Fragrances product line were also up. Profit was boosted by higher sales, improved product mix and the Company’s cost reduction efforts.
     Color Group revenue for the twelve months ended December 31, 2006, increased 3.0% to $350.2 million and operating income was up 9.6% to $59.4 million. Color Group revenue for the fourth quarter increased 6.0% to $83.4 million from the comparable quarter in 2005. Fourth quarter operating income rose to $13.8 million, an increase of 19.1% from the 2005 fourth quarter. Annual and quarterly revenues reflect solid growth within the Group’s cosmetic and food and beverage product lines. Higher sales drove the increase in operating income, which was enhanced by favorable product mix and an improved cost structure.
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Sensient Technologies Corporation
Earnings Release — Year ended December 31, 2006
February 12, 2007 		  Page 3
2007 OUTLOOK
     Sensient expects reported 2007 diluted earnings per share to be between $1.52 and $1.54.
CONFERENCE CALL
     The company will host a conference call to discuss its 2006 fourth quarter and year-end financial results at 10:00 a.m. CST on Monday, February 12, 2007. 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. CST on February 12, 2007, through midnight on February 19, 2007, by calling (706) 645-9291 and referring to passcode 7263882. A transcript of the call will also be posted on the company’s web site at www.sensient-tech.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, 2005, and quarterly report on Form 10-Q for the quarter ended September 30, 2006. 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.
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Sensient Technologies Corporation
Earnings Release — Year ended December 31, 2006
February 12, 2007 		  Page 4
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 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 5
Consolidated Statements of Earnings
                                                 
    Three Months Ended December 31,     Twelve Months Ended December 31,  
    2006     2005     % Change     2006     2005     % Change  
 
                                                
Revenue
   $ 272,760     $ 252,887       7.9     $ 1,098,774     $ 1,023,930       7.3  
 
                                                
Cost of products sold (includes restructuring charges of $4,340 in 2005)
     189,036       187,266       0.9       766,506       731,253       4.8  
Selling and administrative expenses
     53,891       45,912       17.4       202,991       189,998       6.8  
Restructuring and other charges
     —       8,465               —       8,465          
 
                                        
 
                                                
Operating income
     29,833       11,244       165.3       129,277       94,214       37.2  
Interest expense
     8,969       9,291               35,748       35,737          
 
                                        
 
                                                
Earnings before income taxes
     20,864       1,953       968.3       93,529       58,477       59.9  
Income taxes
     5,497       580               27,104       14,282          
 
                                        
 
                                                
Net earnings
   $ 15,367     $ 1,373       1,019.2     $ 66,425     $ 44,195       50.3  
 
                                        
 
                                                
Earnings per common share:
                                                
Basic
   $ 0.33     $ 0.03       1,000.0     $ 1.45     $ 0.95       52.6  
 
                                        
Diluted
   $ 0.33     $ 0.03       1,000.0     $ 1.44     $ 0.94       53.2  
 
                                        
 
                                                
Average common shares outstanding:
                                                
Basic
     46,031       46,486       (1.0 )     45,900       46,746       (1.8 )
 
                                        
Diluted
     46,511       46,749       (0.5 )     46,204       47,067       (1.8 )
 
                                        

                                                 
Results by Segment   Three Months Ended December 31,     Twelve Months Ended December 31,  
    2006     2005     % Change     2006     2005     % Change  
Revenue
                                                
 
                                                
Flavors & Fragrances
   $ 185,046     $ 169,083       9.4     $ 733,421     $ 670,594       9.4  
Color
     83,372       78,649       6.0       350,174       339,939       3.0  
Corporate & Other
     10,672       10,761       (0.8 )     41,301       41,526       (0.5 )
Intersegment elimination
     (6,330 )     (5,606 )     12.9       (26,122 )     (28,129 )     (7.1 )
 
                                        
 
                                                
Consolidated
   $ 272,760     $ 252,887       7.9     $ 1,098,774     $ 1,023,930       7.3  
 
                                        
 
                                                
Operating Income
                                                
 
                                                
Flavors & Fragrances
   $ 27,001     $ 18,906       42.8     $ 104,457     $ 82,473       26.7  
Color
     13,824       11,604       19.1       59,384       54,197       9.6  
Corporate & Other
     (10,992 )     (19,266 )     (42.9 )     (34,564 )     (42,456 )     (18.6 )
 
                                        
 
                                                
Consolidated
   $ 29,833     $ 11,244       165.3     $ 129,277     $ 94,214       37.2  
 
                                        
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Sensient Technologies Corporation
(In thousands, except per share amounts) 		  Page 6
                 
Consolidated Condensed Balance Sheets            
December 31,   2006     2005  
 
                
Current assets
   $ 551,702     $ 520,344  
Intangibles (net)
     463,701       435,165  
Property, plant and equipment (net)
     391,456       379,380  
Other assets
     47,208       63,384  
 
            
Total Assets
   $ 1,454,067     $ 1,398,273  
 
            
 
                
Current liabilities
   $ 260,610     $ 442,087  
Long-term debt
     441,306       283,123  
Accrued employee and retiree benefits
     43,957       41,980  
Other liabilities
     4,090       8,855  
Shareholders’ equity
     704,104       622,228  
 
            
Total Liabilities and Shareholders’ Equity
   $ 1,454,067     $ 1,398,273  
 
            

                 
Consolidated Statements of Cash Flows            
Twelve Months Ended December 31,   2006     2005  
 
                
Net cash provided by operating activities
   $ 99,217     $ 110,290  
 
            
 
                
Cash flows from investing activities:
                
Acquisition of property, plant and equipment
     (39,314 )     (36,102 )
Proceeds from sale of assets
     3,321       1,101  
Decrease in other assets
     2,152       1,033  
 
            
 
                
Net cash used in investing activities
     (33,841 )     (33,968 )
 
            
 
                
Cash flows from financing activities:
                
Proceeds from additional borrowings
     247,483       80,652  
Debt and capital lease payments
     (290,992 )     (109,163 )
Purchase of treasury stock
     (4,563 )     (18,005 )
Dividends paid
     (28,292 )     (28,276 )
Proceeds from options exercised and other equity transactions
     7,681       3,630  
 
            
 
                
Net cash used in financing activities
     (68,683 )     (71,162 )
 
            
 
                
Effect of exchange rate changes on cash and cash equivalents
     1,274       (335 )
 
            
 
                
Net (decrease) increase in cash and cash equivalents
     (2,033 )     4,825  
Cash and cash equivalents at beginning of year
     7,068       2,243  
 
            
Cash and cash equivalents at end of year
   $ 5,035     $ 7,068  
 
            

                 
Supplemental Information            
Twelve Months Ended December 31,   2006     2005  
 
                
Depreciation and amortization
   $ 43,044     $ 44,859  
 
                
Dividends per share
   $ 0.61     $ 0.60  
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