10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, DC  20549

FORM 10‑Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: June 30, 2014

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number:  1‑7626

SENSIENT TECHNOLOGIES CORPORATION

(Exact name of registrant as specified in its charter)

Wisconsin	39‑0561070
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

777 East Wisconsin Avenue, Milwaukee, Wisconsin  53202-5304

(Address of principal executive offices)

Registrant's telephone number, including area code:  (414) 271‑6755

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for at least the past 90 days.Yes  x No  o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes  x No  o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.  (Check one):

Large accelerated filer  x	Accelerated filer o	Non-accelerated filer o
Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o No x

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

Class	Outstanding at July 31, 2014
Common Stock, par value $0.10 per share	48,219,181

SENSIENT TECHNOLOGIES CORPORATION

INDEX

		Page No.
PART I. FINANCIAL INFORMATION:
Item 1.	Financial Statements:
	Consolidated Condensed Statements of Earnings ‑ Three and Six Months Ended June 30, 2014 and 2013.	1
	Consolidated Condensed Statements of Comprehensive Income - Three and Six Months Ended June 30, 2014 and 2013.	2
	Consolidated Condensed Balance Sheets - June 30, 2014 and December 31, 2013.	3
	Consolidated Condensed Statements of Cash Flows ‑ Six Months Ended June 30, 2014 and 2013.	4
	Notes to Consolidated Condensed Financial Statements.	5
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations.	12
Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	16
Item 4.	Controls and Procedures.	16
PART II. OTHER INFORMATION:
Item 1.	Legal Proceedings.	17
Item 1A.	Risk Factors.	17
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	17
Item 6.	Exhibits.	17
	Signatures.	18
	Exhibit Index.	19

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

SENSIENT TECHNOLOGIES CORPORATION

CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS

(In thousands except per share amounts)

(Unaudited)

	Three Months				Six Months
	Ended June 30,				Ended June 30,
	2014		2013		2014		2013
Revenue	$	374,666	$	378,806	$	742,797	$	744,446
Cost of products sold		245,002		256,285		488,625		504,788
Selling and administrative expenses		81,455		73,843		204,384		154,642
Operating income		48,209		48,678		49,788		85,016
Interest expense		3,718		4,008		7,849		8,269
Earnings before income taxes		44,491		44,670		41,939		76,747
Income taxes		15,430		12,388		14,953		23,026
Net earnings	$	29,061	$	32,282	$	26,986	$	53,721
Weighted average number of shares outstanding:
Basic		48,665		49,751		49,256		49,731
Diluted		48,953		49,917		49,512		49,892
Earnings per common share:
Basic	$	0.60	$	0.65	$	0.55	$	1.08
Diluted	$	0.59	$	0.65	$	0.55	$	1.08
Dividends declared per common share	$	0.00	$	0.23	$	0.48	$	0.45

See accompanying notes to consolidated condensed financial statements.

1

SENSIENT TECHNOLOGIES CORPORATION

CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)

(Unaudited)

	Three Months				Six Months
	Ended June 30,				Ended June 30,
	2014		2013		2014		2013
Comprehensive Income	$	34,130	$	24,657	$	32,210	$	28,043

See accompanying notes to consolidated condensed financial statements.

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SENSIENT TECHNOLOGIES CORPORATION

CONSOLIDATED CONDENSED BALANCE SHEETS

(In thousands)

	June 30,
	2014			December 31,
ASSETS	(Unaudited)			2013
CURRENT ASSETS:
Cash and cash equivalents	$	28,428		$	19,836
Trade accounts receivable, net		265,641			233,751
Inventories		479,450			474,452
Prepaid expenses and other current assets		74,373			61,786
TOTAL CURRENT ASSETS		847,892			789,825
OTHER ASSETS		89,305			47,786
INTANGIBLE ASSETS, NET		9,694			10,546
GOODWILL		459,554			457,269
PROPERTY, PLANT AND EQUIPMENT:
Land		45,630			56,343
Buildings		329,721			374,388
Machinery and equipment		747,956			751,267
Construction in progress		64,792			55,236
		1,188,099			1,237,234
Less accumulated depreciation		(668,072	)		(671,926	)
		520,027			565,308
TOTAL ASSETS	$	1,926,472		$	1,870,734
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Trade accounts payable	$	98,693		$	99,117
Accrued salaries, wages and withholdings from employees		28,120			32,669
Other accrued expenses		95,422			78,579
Income taxes		3,450			5,478
Short-term borrowings		22,521			7,050
TOTAL CURRENT LIABILITIES		248,206			222,893
OTHER LIABILITIES		32,521			28,495
ACCRUED EMPLOYEE AND RETIREE BENEFITS		27,145			28,538
LONG‑TERM DEBT		472,105			348,124
SHAREHOLDERS' EQUITY:
Common stock		5,396			5,396
Additional paid‑in capital		108,202			105,119
Earnings reinvested in the business		1,221,051			1,217,874
Treasury stock, at cost		(199,380	)		(91,707	)
Accumulated other comprehensive loss		11,226			6,002
TOTAL SHAREHOLDERS’ EQUITY		1,146,495			1,242,684
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	1,926,472		$	1,870,734

See accompanying notes to consolidated condensed financial statements.

3

SENSIENT TECHNOLOGIES CORPORATION

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

	Six Months
	Ended June 30,
	2014			2013
Cash flows from operating activities:
Net earnings	$	26,986		$	53,721
Adjustments to arrive at net cash provided by operating activities:
Depreciation and amortization		26,395			25,893
Share-based compensation		2,849			1,330
Loss on assets		48,260			3,073
Deferred income taxes		(6,590	)		(222	)
Changes in operating assets and liabilities		(28,461	)		(13,751	)
Net cash provided by operating activities		69,439			70,044
Cash flows from investing activities:
Acquisition of property, plant and equipment		(29,752	)		(55,241	)
Proceeds from sale of assets		930			31
Other investing activity		(620	)		(132	)
Net cash used in investing activities		(29,442	)		(55,342	)
Cash flows from financing activities:
Proceeds from additional borrowings		174,741			75,596
Debt payments		(73,478	)		(55,127	)
Purchase of treasury stock		(108,753	)		-
Dividends paid		(23,809	)		(22,507	)
Proceeds from options exercised and other equity transactions		396			420
Net cash used in financing activities		(30,903	)		(1,618	)
Effect of exchange rate changes on cash and cash equivalents		(502	)		(1,481	)
Net increase in cash and cash equivalents		8,592			11,603
Cash and cash equivalents at beginning of period		19,836			15,062
Cash and cash equivalents at end of period	$	28,428		$	26,665

See accompanying notes to consolidated condensed financial statements.

4

SENSIENT TECHNOLOGIES CORPORATION

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(Unaudited)

1. Accounting Policies

In the opinion of Sensient Technologies Corporation (the “Company”), the accompanying unaudited consolidated condensed financial statements contain all adjustments (consisting of only normal recurring adjustments) which are necessary to present fairly the financial position of the Company as of June 30, 2014, and December 31, 2013, and the results of operations, comprehensive income and cash flows for the three and six months ended June 30, 2014 and 2013.  The results of operations for any interim period are not necessarily indicative of the results to be expected for the full year.

The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes.  Actual results could differ from those estimates.

Expenses are charged to operations in the year incurred.  However, for interim reporting purposes, certain expenses are charged to operations based on a proportionate share of estimated annual amounts rather than as they are actually incurred. In interim periods, depreciation expense is estimated using actual depreciation on fixed assets that have been placed in service at the beginning of the year, combined with an estimate of depreciation expense on expected current year additions.

On January 1, 2014, the Company adopted Accounting Standards Update (ASU) No. 2013-11, Income Taxes (Topic 740), Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists, which requires companies to change the balance sheet presentation of certain unrecognized tax benefits and deferred tax assets. The adoption of this ASU had no material impact on the Company’s balance sheet presentation, financial condition or results of operations.

Refer to the notes in the Company’s annual consolidated financial statements for the year ended December 31, 2013, for additional details of the Company’s financial condition and a description of the Company’s accounting policies, which have been continued without change.

2. Fair Value

Accounting Standards Codification (“ASC”) 820, Fair Value Measurements and Disclosures, defines fair value for financial assets and liabilities, establishes a framework for measuring fair value in GAAP and expands disclosures about fair value measurements. As of June 30, 2014, and December 31, 2013, the Company’s assets and liabilities subject to this standard are forward exchange contracts and investments in a money market fund and municipal investments. The fair value of the forward exchange contracts based on current pricing obtained for comparable derivative products (Level 2 inputs) was negligible and an asset of $0.2 million as of June 30, 2014 and December 31, 2013, respectively. The fair value of the investments based on June 30, 2014, and December 31, 2013, market quotes (Level 1 inputs) was an asset of $21.1 million and $19.8 million, respectively, and is reported in Other Assets in the Consolidated Condensed Balance Sheets.

The carrying values of the Company’s cash and cash equivalents, trade accounts receivable, accounts payable, accrued expenses and short-term borrowings approximated fair values as of June 30, 2014. The fair value of the Company’s long-term debt, including current maturities, is estimated using discounted cash flows based on the Company’s current incremental borrowing rates for similar types of borrowing arrangements (Level 2 inputs). The carrying value of the long-term debt at June 30, 2014, was $472.1 million. The fair value of the long-term debt at June 30, 2014, was $485.3 million.

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3. Segment Information

Operating results by segment for the periods and at the dates presented are as follows:

(In thousands)	Flavors & Fragrances		Color		Corporate & Other			Consolidated
Three months ended June 30, 2014:
Revenue from external customers	$	207,961	$	127,824	$	38,881		$	374,666
Intersegment revenue		8,231		5,401		111			13,743
Total revenue	$	216,192	$	133,225	$	38,992		$	388,409
Operating income (loss)	$	33,554	$	30,858	$	(16,203	)	$	48,209
Interest expense		-		-		3,718			3,718
Earnings (loss) before income taxes	$	33,554	$	30,858	$	(19,921	)	$	44,491

Three months ended June 30, 2013:
Revenue from external customers	$	218,315	$	122,871	$	37,620		$	378,806
Intersegment revenue		8,311		5,360		33			13,704
Total revenue	$	226,626	$	128,231	$	37,653		$	392,510
Operating income (loss)	$	31,984	$	28,432	$	(11,738	)	$	48,678
Interest expense		-		-		4,008			4,008
Earnings (loss) before income taxes	$	31,984	$	28,432	$	(15,746	)	$	44,670

(In thousands)	Flavors & Fragrances		Color		Corporate & Other			Consolidated
Six months ended June 30, 2014:
Revenue from external customers	$	412,081	$	256,493	$	74,223		$	742,797
Intersegment revenue		17,490		10,370		111			27,971
Total revenue	$	429,571	$	266,863	$	74,334		$	770,768
Operating income (loss)	$	63,493	$	60,265	$	(73,970	)	$	49,788
Interest expense		-		-		7,849			7,849
Earnings (loss) before income taxes	$	63,493	$	60,265	$	(81,819	)	$	41,939

Six months ended June 30, 2013:
Revenue from external customers	$	425,311	$	246,654	$	72,481		$	744,446
Intersegment revenue		17,156		11,056		48			28,260
Total revenue	$	442,467	$	257,710	$	72,529		$	772,706
Operating income (loss)	$	60,390	$	55,115	$	(30,489	)	$	85,016
Interest expense		-		-		8,269			8,269
Earnings (loss) before income taxes	$	60,390	$	55,115	$	(38,758	)	$	76,747

Beginning in the first quarter of 2014, the results of operations for the Company’s fragrances businesses in Asia Pacific and China, previously reported in the Corporate & Other segment, are reported in the Flavors & Fragrances Group, and the results of operations for the Company’s pharmaceutical flavors business, previously reported in the Flavors & Fragrances Group, are reported in the Color Group with the pharmaceutical colors business. Results for 2013 have been restated to reflect these changes.

The Company evaluates performance based on operating income of the respective segments before restructuring and other costs, interest expense and income taxes. The 2014 and 2013 restructuring and other costs are included in the Corporate & Other segment.

6

4. Inventories

At June 30, 2014, and December 31, 2013, inventories included finished and in-process products totaling $339.4 million and $317.1 million, respectively, and raw materials and supplies of $140.1 million and $157.4 million, respectively.

5. Retirement Plans

The Company’s components of annual benefit cost for the defined benefit plans for the periods presented are as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
(In thousands)	2014			2013			2014			2013
Service cost	$	635		$	755		$	1,267		$	1,513
Interest cost		603			600			1,202			1,204
Expected return on plan assets		(480	)		(362	)		(954	)		(727	)
Amortization of prior service cost		43			43			86			86
Amortization of actuarial (gain) loss		(157	)		799			(317	)		1,599
Curtailment gain		(115	)		-			(115	)		-
Total defined benefit expense	$	529		$	1,835		$	1,169		$	3,675

6. Shareholders’ Equity

During the three and six months ended June 30, 2014, the Company repurchased 1.8 million and 2 million shares of its common stock for an aggregate price of $97.8 million and $108.8 million, respectively.

7. Derivative Instruments and Hedging Activity

The Company may use forward exchange contracts and foreign currency denominated debt to manage its exposure to foreign exchange risk by reducing the effect of fluctuating foreign currencies on short-term foreign currency denominated intercompany transactions, non-functional currency raw material purchases, non-functional currency sales and other known foreign currency exposures. These forward exchange contracts have maturities of less than twelve months. The Company’s primary hedging activities and their accounting treatment are summarized below:

Forward exchange contracts – The forward exchange contracts that have been designated as hedges are accounted for as cash flow hedges. The Company had $28.1 million and $29.6 million of forward exchange contracts, designated as hedges, outstanding as of June 30, 2014, and December 31, 2013, respectively. Due to the short term nature of these contracts, the results of these transactions are not material to the financial statements. In addition, the Company utilizes forward exchange contracts that are not designated as cash flow hedges and the results of these transactions are not material to the financial statements.

Net investment hedges – The Company has certain debt denominated in Euros and Swiss Francs. These debt instruments have been designated as partial hedges of the Company’s Euro and Swiss Franc net asset positions. Changes in the fair value of this debt attributable to changes in the spot foreign exchange rate are recorded in foreign currency translation in other comprehensive income (“OCI”). As of June 30, 2014, and December 31, 2013, the total value of the Company’s Euro and Swiss Franc debt was $109.8 million and $96.5 million, respectively.  For the three and six months ended June 30, 2014, the impact of foreign exchange rates on these debt instruments decreased debt by $0.5 million and $0.2 million, respectively, and has been recorded as foreign currency translation in OCI.

7

8. Income Taxes

The effective income tax rates for the quarters ended June 30, 2014 and 2013, were 34.7% and 27.7%, respectively. For the six-month periods ended June 30, 2014 and 2013, the effective income tax rates were 35.7% and 30.0%, respectively. The effective tax rates in both 2014 and 2013 were impacted by changes in estimates associated with the finalization of prior year foreign and domestic tax items, including the reversal of valuation allowances related to tax loss carryovers and from the restructuring activities.

9. Accumulated Other Comprehensive Income

The following tables summarize the changes in Accumulated Other Comprehensive Income (OCI) during the three- and six-month periods ended June 30, 2014:

Three Months Ended June 30, 2014
(In thousands)	Cash Flow Hedges (a)			Pension Items (a)			Foreign Currency Items		Total
Balance as of March 31, 2014	$	97		$	(6,830	)	$	12,890	$	6,157
Other comprehensive loss before reclassifications		489			-			4,885		5,374
Amounts reclassified from OCI		(245	)		(60	)		-		(305	)
Balance as of June 30, 2014	$	341		$	(6,890	)	$	17,775	$	11,226

Six Months Ended June 30, 2014
(In thousands)	Cash Flow Hedges (a)			Pension Items (a)			Foreign Currency Items		Total
Balance as of December 31, 2013	$	(99	)	$	(6,768	)	$	12,869	$	6,002
Other comprehensive loss before reclassifications		750			-			4,906		5,656
Amounts reclassified from OCI		(310	)		(122	)		-		(432	)
Balance as of June 30, 2014	$	341		$	(6,890	)	$	17,775	$	11,226

(a) Cash Flow Hedges and Pension Items are net of tax.

The following tables summarize the pension items reclassified out of OCI and into the Statement of Earnings during the three- and six-month periods ended June 30, 2014 and 2013:

(In thousands)	Three Months Ended June 30, 2014			Three Months Ended June 30, 2013
Amortization of pension expense included in selling and administrative expense:
Prior service cost	$	43		$	43
Actuarial (gain) loss		(157	)		799
Total before income taxes		(114	)		842
Tax expense (benefit)		54			(315	)
Total net of tax	$	(60	)	$	527

8

(In thousands)	Six Months Ended June 30, 2014			Six Months Ended June 30, 2013
Amortization of pension expense included in selling and administrative expense:
Prior service cost	$	86		$	86
Actuarial (gain) loss		(317	)		1,599
Total before income taxes		(231	)		1,685
Tax expense (benefit)		109			(630	)
Total net of tax	$	(122	)	$	1,055

10. Restructuring

In March of this year, the Company announced a restructuring plan (2014 Restructuring Plan) related to eliminating underperforming operations, consolidating manufacturing facilities and improving efficiencies within the Company. The Company anticipates that the 2014 Restructuring Plan will impact several facilities and will generate cost savings estimated to be approximately $30 million per year, with incremental savings expected to be achieved over the next few years and the full benefit expected to be achieved after 2015. The Company also anticipates that the 2014 Restructuring Plan will include a reduction in headcount by approximately 300 employees, primarily direct and indirect manufacturing labor, and pre-tax charges of approximately $120 million to $130 million. In connection with the 2014 Restructuring Plan, less than 10 employees were terminated as of June 30, 2014 and limited savings were recognized by June 30, 2014.

The Company determined that certain long-lived assets, including land, buildings and certain pieces of equipment associated with the identified underperforming operations were impaired. As a result, the Company has reduced the carrying amounts of these assets to approximately $28.1 million, their aggregate respective fair values, which were determined based on independent market valuations for these assets.

For the three and six months ended June 30, 2014, the Company recorded restructuring and other costs of $13.0 million ($10.7 million after-tax) and $65.7 million ($48.2 million after-tax). The Company determined that was the appropriate amount of restructuring and other costs to record in each period in accordance with GAAP and based on an internal review of the affected facilities and consultation with legal and other advisors. Included within the restructuring and other costs, the Company incurred $2.2 million and $3.1 million, respectively, related to the 2014 proxy contest during the three and six months ended June 30, 2014. These costs are included in Other costs in the table below and mainly relate to proxy solicitation, public relations, technical consulting and legal services.

Detail of the restructuring and other costs recorded in selling and administrative expenses in the Corporate & Other segment during the three- and six-month periods ended June 30, 2014 are as follows:

	Three Months Ended,		Six Months Ended,
(In thousands)	June 30, 2014		June 30, 2014
Employee separation	$	1,256	$	13,578
Long-lived asset impairment		9,212		47,872
Intangibles impairment		-		1,049
Gain on asset sales		-		(602	)
Other costs (1)		2,511		3,804
Total	$	12,979	$	65,701

(1) Other costs include decommissioning costs, professional services, personnel moving costs, other related costs and 2014 proxy contest costs.

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The Company expects to incur approximately $30 million to $35 million of additional restructuring costs by the end of December 2014 and $25 million to $30 million of additional restructuring costs by the end of 2016, consisting primarily of employee separations, asset impairments, and other restructuring related costs.

For the three and six months ended June 30, 2013, the Company recorded restructuring costs of $6.6 million ($4.7 million after-tax) and $19.4 million ($14.1 million after-tax), respectively, related to the 2013 restructuring program to relocate the Flavors & Fragrances Group headquarters to Chicago, as well as a profit improvement plan across all segments of the Company. Detail of the restructuring expenses recorded in Corporate & Other segment is as follows:

Three months ended June 30, 2013
	Selling &		Cost of
(In thousands)	Administrative		Products Sold		Total
Employee separation	$	2,428	$	-	$	2,428
Long-lived asset impairment		880		-		880
Write-down of inventory		-		277		277
Other costs(1)		3,057		-		3,057
Total	$	6,365	$	277	$	6,642

Six months ended June 30, 2013
	Selling &		Cost of
(In thousands)	Administrative		Products Sold		Total
Employee separation	$	11,340	$	-	$	11,340
Long-lived asset impairment		3,406		-		3,406
Write-down of inventory		-		872		872
Other costs(1)		3,797		-		3,797
Total	$	18,543	$	872	$	19,415

⁽¹⁾ Other costs include decommissioning, professional services, personnel (other than employee separations) and moving related costs.

The Company evaluates performance based on operating income of each segment before restructuring costs. The restructuring and other costs are recorded in the Corporate & Other segment. The following table summarizes the restructuring and other costs by segment that the costs relate to for the three and six months ended June 30, 2014 and 2013:

	Three Months Ended,
(In thousands)	June 30, 2014		June 30, 2013
Flavors & Fragrances	$	9,068	$	5,951
Color		1,411		600
Corporate & Other		2,500		91
Total	$	12,979	$	6,642

	Six Months Ended,
(In thousands)	June 30, 2014		June 30, 2013
Flavors & Fragrances	$	54,051	$	14,490
Color		7,950		4,310
Corporate & Other		3,700		615
Total	$	65,701	$	19,415

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The following table summarizes the accrual for the restructuring and other charges for the six-month period ended June 30, 2014:

	Employee			Asset Related
(In thousands)	Separations			and Other			Total
Balance as of December 31, 2013	$	4,562		$	1,588		$	6,150
Restructuring and other costs		13,578			52,123			65,701
Gain on sale of assets		-			602			602
Cash spent		(2,831	)		(1,808	)		(4,639	)
Reduction of assets		-			(48,921	)		(48,921	)
Translation adjustment		(87	)		-			(87	)
Balance as of June 30, 2014	$	15,222		$	3,584		$	18,806

11. Commitments and Contingencies

The Company is involved in various claims and litigation arising in the normal course of business. In the judgment of management, which relies in part on information from Company counsel, the ultimate resolution of these actions will not materially affect the consolidated financial statements of the Company.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

OVERVIEW

Revenue was $374.7 million and $378.8 million in the three months ended June 30, 2014 and 2013, respectively. Revenue for the six months ended June 30, 2014 and 2013, was $742.8 million and $744.4 million, respectively. Revenue for the Flavors & Fragrances segment decreased 4.6% and 2.9% for the quarter and six months ended June 30, 2014, respectively, from the comparable periods last year.  Color segment revenue increased 3.9% and 3.6% for the quarter and six months ended June 30, 2014, respectively, from the comparable periods last year. Corporate & Other revenue increased 3.6% and 2.5% for the quarter and six months ended June 30, 2014, respectively, from the comparable periods last year. The impact of foreign exchange rates increased consolidated revenue by approximately 40 basis points in the quarter ending June 30, 2014, and decreased revenue by 10 basis points in the six months ended June 30, 2014. Additional information on group results can be found in the Segment Information section.

In March of this year, the Company announced that it was initiating a restructuring plan (2014 Restructuring Plan) to eliminate underperforming operations, consolidate manufacturing facilities and improve efficiencies within the Company. Based on this plan, the Company has determined that certain long-lived assets associated with the underperforming operations were impaired. As a result, the Company has reduced the carrying amounts of these assets to approximately $28.1 million, their aggregate respective fair values, which were determined based on independent market values for these assets. In addition, certain intangible assets were also determined to be impaired and were written down. Employee separation and other restructuring costs were also incurred during the three and six months ended June 30, 2014. The Company will reduce headcount by approximately 300 positions at impacted facilities in all segments, primarily direct and indirect labor at manufacturing sites (less than 10 employees have been terminated as of June 30, 2014). For the three and six months ended June 30, 2014, the Company recorded total restructuring and other costs of $13.0 million and $65.7 million, respectively. The Company determined that this was the appropriate amount of restructuring and other costs to record in each period in accordance with GAAP and based on an internal review of the affected facilities and consultation with legal and other advisors. The Company expects to incur approximately $30 million to $35 million of additional restructuring costs by the end of December 2014 and approximately $25 million to $30 million of additional restructuring costs by the end of 2016. The 2014 Restructuring Plan is anticipated to reduce annual operating costs by approximately $30 million per year with incremental savings expected to be achieved over the next few years and the full benefit expected to be achieved after 2015. In 2013, the Company had restructuring costs to relocate the Flavors & Fragrances Group headquarters and consolidate manufacturing facilities resulting in the recording of $6.6 million and $19.4 million of restructuring costs in the three and six months ended June 30, 2013.

The gross profit margin increased 230 basis points to 34.6% for the quarter ended June 30, 2014, from 32.3% for the same period in 2013. The gross profit margin increased 200 basis points to 34.2% for the first six months of 2014, from 32.2% for the same period in 2013. Included in the cost of sales are $0.3 million and $0.9 million of restructuring costs in the quarter and six months ended June 30, 2013, respectively, which reduced gross profit. Before these restructuring costs, gross margin increased 220 basis points in the second quarter of 2014 primarily due to an increase in selling prices which more than offset higher manufacturing costs. For the six months ended June 30, 2014, gross margin before the restructuring costs increased 190 basis points primarily due to higher selling prices which more than offset higher manufacturing costs.

Selling and administrative expenses as a percent of revenue were 21.7% and 19.5% in the quarters ended June 30, 2014 and 2013, respectively. Restructuring costs of $13.0 million and $6.4 million were included in selling and administrative expenses for the three months ended June 30, 2014 and 2013, respectively. Excluding restructuring costs, selling and administrative expenses as a percent of revenue increased 50 basis points to 18.3% for the quarter ended June 30, 2014, primarily due to normal inflationary increases. For the six months ended June 30, 2014 and 2013, selling and administrative expenses as a percent of revenue were 27.5% and 20.8%, respectively. Restructuring costs of $65.7 million and $18.5 million were included in selling and administrative expenses in the six months ended June 30, 2014 and 2013, respectively. Before the restructuring costs, selling and administrative expenses as a percent of revenue increased 40 basis points primarily due to normal inflationary increases partially offset by savings from the 2013 restructuring program.

Operating income was $48.2 million and $48.7 million for the second quarters of 2014 and 2013, respectively. Before the restructuring costs in both years, operating income for the second quarter of 2014 increased 10.6% to $61.2 million. Operating income for the six months ended June 30, 2014 and 2013, respectively, was $49.8 million and $85.0 million. Before the restructuring costs in both years, operating income for the first six months of 2014 increased 10.6% to $115.5 million. The impact of foreign exchange rates increased operating profit by approximately 20 basis points and decreased operating profit by approximately 50 basis points in the three and six months ended June 30, 2014, respectively. Operating margins were 12.9% in both the second quarter of 2014 and 2013, and 6.7% and 11.4% for the six months ended June 30, 2014 and 2013, respectively. Before the impact of the restructuring costs, operating margin increased 170 basis points to 16.3% in the second quarter of 2014 and increased 150 basis points to 15.5% for the first six months of 2014.

12

Interest expense for the second quarters of 2014 and 2013 was $3.7 million and $4.0 million, respectively. For the first six months of 2014 and 2013, interest expense was $7.8 million and $8.3 million, respectively. The decrease is primarily due to lower average interest rates in the quarter and six months ended June 30, 2014.

The effective income tax rates were 34.7% and 27.7% for the quarters ended June 30, 2014 and 2013, respectively. The effective income tax rates were 35.7% and 30.0% in the six months ended June 30, 2014 and 2013, respectively. Before the restructuring costs, the effective tax rate was 30.8% and 27.9% for the three months ended June 30, 2014 and 2013, respectively, and 30.2% and 29.5% for the six months ended June 30, 2014 and 2013, respectively. The effective tax rates in both 2014 and 2013 were reduced by changes in estimates associated with the finalization of prior year tax items and valuation allowances. The Company expects the effective tax rate for the remainder of 2014 to be between 31.0% and 32.0%, before the income tax expense or benefit related to discrete items and the restructuring costs, which will be reported in the quarter in which they occur.

The Company has included non-GAAP financial measures, to remove the costs related to the restructuring activities and provide investors with a view of operating performance excluding the restructuring and other costs. These non-GAAP financial measures are utilized by management in comparing the Company’s operating performance on a consistent basis. The Company believes that these financial measures are appropriate to enhance an overall understanding of the Company’s underlying operating performance trends compared to historical and prospective periods. The Company also believes that these measures should not be considered in isolation from, or as a substitute for, financial information calculated in accordance with GAAP.

The table below reconciles certain reported results for the three and six months ended June 30, 2014 and 2013, to those results before the impact of the restructuring and other costs, which are non-GAAP financial measures.

	Three Months Ended June 30,									Six Months Ended June 30,
	2014			2013			% Change			2014			2013			% Change
Operating income (GAAP)	$	48,209		$	48,678			-1.0	%	$	49,788		$	85,016			-41.4	%
Restructuring - Cost of products sold		-			277						-			872
Restructuring & other - Selling and administrative		12,979			6,365						65,701			18,543
Adjusted operating income	$	61,188		$	55,320			10.6	%	$	115,489		$	104,431			10.6	%
Net earnings (GAAP)	$	29,061		$	32,282			-10.0	%	$	26,986		$	53,721			-49.8	%
Restructuring & other, before tax		12,979			6,642						65,701			19,415
Tax impact of restructuring & other		(2,260	)		(1,940	)					(17,534	)		(5,306	)
Adjusted net earnings	$	39,780		$	36,984			7.6	%	$	75,153		$	67,830			10.8	%
Diluted EPS (GAAP)	$	0.59		$	0.65			-9.2	%	$	0.55		$	1.08			-49.1	%
Restructuring & other, net of tax		0.22			0.09						0.97			0.28
Adjusted diluted EPS	$	0.81		$	0.74			9.5	%	$	1.52		$	1.36			11.8	%

13

SEGMENT INFORMATION

Beginning in the first quarter of 2014, the results of operations for the Company’s fragrances business in Asia Pacific and China, previously reported in the Corporate & Other segment, are reported in the Flavors & Fragrances segment, and the results of operations for the Company’s pharmaceutical flavors business, previously reported in the Flavors & Fragrances segment, are reported in the Color segment with the pharmaceutical colors business. Results for 2013 have been restated to reflect these changes. Restructuring and other charges are reported in the Corporate & Other segment.

Flavors & Fragrances –

Revenue for the Flavors & Fragrances segment was $216.2 million and $226.6 million in the second quarters of 2014 and 2013, respectively. Lower revenue in North America ($10.2 million) and Europe ($2.3 million) was partially offset by the favorable impact of foreign exchange rates ($1.8 million). The lower revenue in North America was primarily related to lower natural ingredient volumes as the Flavors & Fragrances segment focuses on higher margin, value added products. The lower revenue in Europe was primarily due to lower volumes.

Flavors & Fragrances segment operating income increased 4.9% from the prior year's comparable quarter to $33.6 million for the quarter ended June 30, 2014. The higher profit was primarily due to higher profit in North America ($1.5 million) and Mexico ($0.3 million). The higher profit in North America was primarily due to higher selling prices for both natural ingredients and traditional flavors. The higher profit in Mexico was due to higher selling prices. Operating income as a percent of revenue was 15.5% an increase of 140 basis points from the prior year’s quarter.

Revenue for the Flavors & Fragrances segment was $429.6 million and $442.5 million for the six months ended June 30, 2014 and 2013, respectively. The decrease in revenue was primarily due to lower revenue in North America ($13.3 million) and Europe ($1.9 million) partially offset by higher revenue in Mexico ($0.2 million) combined with the favorable impact of foreign exchange rates ($2.1 million). The lower revenue in North America was primarily related to lower natural ingredient volumes as the Flavors & Fragrances segment focuses on higher margin, value added products. The lower revenue in Europe was primarily due to lower volumes.

Operating income was $63.5 million and $60.4 million for the six months ended June 30, 2014 and 2013, respectively. Higher profit in North America ($2.8 million), Mexico ($0.4 million) and Europe ($0.3 million) was partially offset by the unfavorable impact of exchange rates ($0.4 million). The higher profit in North America was primarily due to higher selling prices for both natural ingredients and traditional flavors. The higher profit in both Mexico and Europe was primarily due to higher selling prices.

Color –

Revenue for the Color segment was $133.2 million and $128.2 million for the quarters ended June 30, 2014 and 2013, respectively. The higher revenue was primarily related to higher sales of non-food colors ($2.7 million), higher sales of food and beverage colors ($1.1 million) and the favorable impact of foreign exchange rates ($1.2 million). The higher sales of both non-food colors and food and beverage colors were primarily due to higher volumes.

Operating income for the quarter ended June 30, 2014, was $30.9 million, an increase of 8.5% from the $28.4 million reported in the comparable period last year. The increase was primarily due to higher profit on sales of food and beverage colors ($1.3 million) and non-food colors ($0.7 million). The higher profit on sales of food and beverage colors was primarily due to higher selling prices. The higher profit on sales of non-food colors was primarily driven by higher volumes. Operating income as a percent of revenue increased 100 basis points to 23.2% in the second quarter of 2014 from 22.2% in the prior year’s quarter.

Color segment revenue was $266.9 million and $257.7 million for the six months ended June 30, 2014 and 2013, respectively. The higher revenue was primarily due to higher sales of non-food colors ($5.4 million) and food and beverage colors ($3.2 million), both due to higher volumes and selling prices.

Operating income was $60.3 million for the first six months of 2014, an increase of 9.3% from $55.1 million reported for the first six months of 2013. The increase was primarily due to the higher profit on sales of food and beverage colors ($2.7 million) and non-food colors ($2.1 million). The higher profit was primarily due to higher selling prices and volumes of both food and beverage colors and non-food colors. Operating income as a percent of revenue was 22.6%, up from 21.4% in the prior year’s first six months.

14

Corporate & Other –

Revenue for the Corporate & Other segment increased 3.6% to $39.0 million for the quarter ended June 30, 2014, from $37.7 million for the quarter ended June 30, 2013. The increase was primarily related to higher volumes in Asia Pacific and the flavors businesses in Central & South America.

The Corporate & Other segment reported operating losses of $16.2 million and $11.7 million for the quarters ended June 30, 2014 and 2013, respectively. The lower results were primarily due to $13.0 million and $6.6 million of restructuring charges recorded in the second quarters of 2014 and 2013, respectively, partially offset by the profit on higher volumes in Asia Pacific and the flavors businesses in Central & South America. All restructuring charges for the Company are included in the Corporate & Other segment.

Revenue for the Corporate & Other segment was $74.3 million for the first six months of 2014, an increase of 2.5% from the $72.5 million reported in the first six months of 2013. The increase was primarily due to higher volumes in both Asia Pacific and the flavors businesses in Central & South America.

An operating loss of $74.0 million was reported in the first six months of 2014 compared to an operating loss of $30.5 million in the prior year period. The lower results were primarily due to $65.7 million and $19.4 million of restructuring charges recorded in 2014 and 2013, respectively partially offset by the profit on higher volumes in Asia Pacific and the flavors businesses in Central & South America.

LIQUIDITY AND FINANCIAL CONDITION

The Company’s ratio of debt to total capital was 30.1% and 22.2% as of June 30, 2014, and December 31, 2013, respectively. The increase was due to higher debt at June 30, 2014. The Company is in compliance with its most restrictive loan covenants calculated in accordance with the applicable agreements as of June 30, 2014. Debt increases are discussed below.

Net cash provided by operating activities was $69.4 million and $70.0 million for the six months ended June 30, 2014 and 2013, respectively. Cash provided by operating activities is consistent with prior years primarily due to higher net earnings, adjusted for the impact of the restructuring costs, offset by a higher use of cash to fund working capital expenditures, which primarily relates to increased inventory at certain locations.

Net cash used in investing activities was $29.4 million and $55.3 million for the six months ended June 30, 2014 and 2013, respectively. Capital expenditures were $29.8 million and $55.2 million for the six months ended June 30, 2014 and 2013, respectively.

Net cash used in financing activities was $30.9 million in the first six months of 2014 and $1.6 million in the comparable period of 2013. The cash required to fund the repurchase of the Company stock (in 2014 only), capital expenditures and dividends payments in the first six months of 2014 and 2013 caused the Company to increase debt by a net amount of $101.3 million and $20.5 million, respectively. For purposes of the cash flow statement, net changes in debt exclude the impact of foreign exchange rates. Dividends of $23.8 million and $22.5 million were paid during the six months ended June 30, 2014 and 2013, respectively. Dividends paid were 48 cents per share for the first six months of 2014 and 45 cents per share in the comparable period of 2013, reflecting the Company’s increase in the quarterly dividend to 25 cents per share beginning in the second quarter of 2014.

The Company’s financial position remains strong. The Company expects that its cash flows from operations and existing lines of credit can be used to meet future cash requirements for operations, capital expenditures, dividend payments, acquisitions and stock repurchases.

CONTRACTUAL OBLIGATIONS

There has been no material changes in the Company’s contractual obligations during the quarter ended June 30, 2014.  For additional information about contractual obligations, refer to page 21 of the Company’s 2013 Annual Report, portions of which were filed as Exhibit 13.1 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2013.

15

OFF-BALANCE SHEET ARRANGEMENTS

The Company had no off-balance sheet arrangements as of June 30, 2014.

CRITICAL ACCOUNTING POLICIES

There has been no material changes in the Company’s critical accounting policies during the quarter ended June 30, 2014.  For additional information about critical accounting policies, refer to pages 19 and 20 of the Company’s 2013 Annual Report, portions of which were filed as Exhibit 13.1 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2013.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There has been no material changes in the Company’s exposure to market risk during the quarter ended June 30, 2014.  For additional information about market risk, refer to pages 20 and 21 of the Company’s 2013 Annual Report, portions of which were filed as Exhibit 13.1 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2013.

ITEM 4. CONTROLS AND PROCEDURES 

Evaluation of Disclosure Controls and Procedures:  The Company carried out an evaluation, under the supervision and with the participation of management, including the Company’s President and Chief Executive Officer and its Senior Vice President and Chief Financial Officer, of the effectiveness, as of the end of the period covered by this report, of the design and operation of the disclosure controls and procedures, as defined in Rule 13a-15(e) of the Exchange Act.  Based upon that evaluation, the Company’s President and Chief Executive Officer and its Senior Vice President and Chief Financial Officer have concluded that the disclosure controls and procedures were effective as of the end of the period covered by this report.

Change in Internal Control Over Financial Reporting:  There has been no change in the Company’s internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) during the Company’s most recent quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

FORWARD-LOOKING STATEMENTS

This document contains forward-looking statements that reflect management’s current assumptions and estimates of future economic circumstances, industry conditions, Company performance and financial results.  Forward-looking statements include statements in the future tense, statements referring to any period after June 30, 2014, and statements including the terms “expect,” “believe,” “anticipate” and other similar terms that express expectations as to future events or conditions.  The Private Securities Litigation Reform Act of 1995 provides a safe harbor for such forward-looking statements.  Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors that could cause actual events to differ materially from those expressed in those statements.  A variety of factors could cause the Company’s actual results and experience to differ materially from the anticipated results.  These factors and assumptions include the pace and nature of new product introductions by the Company’s customers; the Company’s ability to successfully implement its growth strategies and restructuring plan; the outcome of the Company’s various productivity-improvement and cost-reduction efforts; changes in costs of raw materials and energy; industry and economic factors related to the Company’s domestic and international business; competition from other suppliers of colors, flavors and fragrances; growth or contraction in markets for products in which the Company competes; terminations and other changes in customer relationships; industry and customer acceptance of price increases; currency exchange rate fluctuations; cost and availability of credit; results of litigation, environmental investigations or other proceedings; complications as a result of existing or future information technology system applications and hardware; the matters discussed under Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2013; and the matters discussed above under Item 2 including the critical accounting policies referenced therein.  The Company does not undertake to publicly update or revise its forward-looking statements even if experience or future changes make it clear that any projected results expressed or implied therein will not be realized.

16

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The Company is involved in various claims and litigation arising in the normal course of business. In the judgment of management, which relies in part on information from Company counsel, the ultimate resolution of these actions will not materially affect the consolidated financial statements of the Company.

ITEM 1A. RISK FACTORS

See “Risk Factors” in Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2013.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The following table provides the specified information about the repurchases of its common shares by the Company during the second quarter of 2014:

					Total number of		Maximum number of
	Total number		Average		shares purchased as		shares that may be
	of shares		price paid		part of a publicly		purchased under
Period	purchased		per share		announced plan		publicly announced plans
April 1 to 30, 2014		560,000	$	54.48		560,000		1,600,759
May 1 to 31, 2014		1,173,263	$	54.26		1,173,263		427,496
June 1 to 30, 2014		66,737	$	53.96		66,737		360,759
Total		1,800,000	$	54.32		1,800,000

ITEM 6. EXHIBITS

See Exhibit Index following this report.

17

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		SENSIENT TECHNOLOGIES CORPORATION
Date:	August 6, 2014	By:	/s/  John L. Hammond
			John L. Hammond, Senior Vice President, General Counsel & Secretary
Date:	August 6, 2014	By:	/s/  Richard F. Hobbs
			Richard F. Hobbs, Senior Vice President & Chief Financial Officer

18

SENSIENT TECHNOLOGIES CORPORATION

EXHIBIT INDEX

QUARTERLY REPORT ON FORM 10-Q

FOR THE QUARTER ENDED JUNE 30, 2014

Exhibit	Description	Incorporated by Reference From	Filed Herewith
3.2	Sensient Technologies Corporation Amended and Restated By-Laws	Exhibit 3.2 to Current Report on Form 8-K dated July 24, 2014 (Commission File No. 1-7626)
31	Certifications of the Company’s President & Chief Executive Officer and Senior Vice President & Chief Financial Officer pursuant to Rule 13a-14(a) of the Exchange Act		X
32	Certifications of the Company’s President & Chief Executive Officer and Senior Vice President & Chief Financial Officer pursuant to 18 United States Code § 1350		X
101	Interactive data files pursuant to Rule 405 of Regulation S-T		X

19

EX-31

EXHIBIT 31

CERTIFICATION

Pursuant to Rule 13a-14(a) of the Exchange Act

I, Paul Manning, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Sensient Technologies Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:     August 6, 2014

/s/ Paul Manning

Paul Manning, President &

Chief Financial Officer

EXHIBIT 31

CERTIFICATION

Pursuant to Rule 13a-14(a) of the Exchange Act

I, Richard F. Hobbs, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Sensient Technologies Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:     August 6, 2014

 /s/ Richard F. Hobbs

Richard F. Hobbs, Senior Vice President &

Chief Financial Officer

EX-32

EXHIBIT 32

CERTIFICATION

Pursuant to 18 United States Code § 1350

The undersigned hereby certifies that the Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2014 of Sensient Technologies Corporation (the “Company”) filed with the Securities and Exchange Commission on or about the date hereof fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained in such report fairly presents, in all material respects, the financial condition and results of operations of the Company.

	/s/ Paul Manning
Name:	Paul Manning
Title:	President & Chief Executive Officer
Date:	August 6, 2014

A signed original of this written statement required by Section 906 has been provided to Sensient Technologies Corporation and will be retained by Sensient Technologies Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

EXHIBIT 32

CERTIFICATION

Pursuant to 18 United States Code § 1350

The undersigned hereby certifies that the Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2014 of Sensient Technologies Corporation (the “Company”) filed with the Securities and Exchange Commission on or about the date hereof fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained in such report fairly presents, in all material respects, the financial condition and results of operations of the Company.

	/s/ Richard F. Hobbs
Name:	Richard F. Hobbs
Title:	Senior Vice President & Chief Financial Officer
Date:	August 6, 2014

A signed original of this written statement required by Section 906 has been provided to Sensient Technologies Corporation and will be retained by Sensient Technologies Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

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Shareholders' Equity (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2014
Shareholders' Equity [Abstract]
Common stock repurchased during the period (in shares)	1.8	2.0
Common stock repurchased during the period, value	$ 97.8	$ 108.8

XML

Inventories

6 Months Ended

Jun. 30, 2014

Inventories [Abstract]

Inventories

4. Inventories

At June 30, 2014, and December 31, 2013, inventories included finished and in-process products totaling $339.4 million and $317.1 million, respectively, and raw materials and supplies of $140.1 million and $157.4 million, respectively.

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Accumulated Other Comprehensive Income, Reclassification out of Accumulated Other Comprehensive Income (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Pension items reclassified out of other comprehensive income [Abstract]
Selling and administrative expense	$ 81,455	$ 73,843	$ 204,384	$ 154,642
Reclassification out of Accumulated Other Comprehensive Income [Member]
Pension items reclassified out of other comprehensive income [Abstract]
Total before income taxes	(114)	842	(231)	1,685
Tax expense (benefit)	54	(315)	109	(630)
Net earnings	(60)	527	(122)	1,055
Prior Service Cost [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member]
Pension items reclassified out of other comprehensive income [Abstract]
Selling and administrative expense	43	43	86	86
Actuarial (Gain) Loss [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member]
Pension items reclassified out of other comprehensive income [Abstract]
Selling and administrative expense	$ (157)	$ 799	$ (317)	$ 1,599

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Accumulated Other Comprehensive Income (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014		Jun. 30, 2014
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Accumulated Other Comprehensive Income, beginning balance	$ 6,157		$ 6,002
Other comprehensive loss before reclassifications	5,374		5,656
Amounts reclassified from OCI	(305)		(432)
Accumulated Other Comprehensive Income, ending balance	11,226		11,226
Cash Flow Hedges [Member]
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Accumulated Other Comprehensive Income, beginning balance	97	[1]	(99)	[1]
Other comprehensive loss before reclassifications	489	[1]	750	[1]
Amounts reclassified from OCI	(245)	[1]	(310)	[1]
Accumulated Other Comprehensive Income, ending balance	341	[1]	341	[1]
Pension Items [Member]
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Accumulated Other Comprehensive Income, beginning balance	(6,830)	[1]	(6,768)	[1]
Other comprehensive loss before reclassifications	0	[1]	0	[1]
Amounts reclassified from OCI	(60)	[1]	(122)	[1]
Accumulated Other Comprehensive Income, ending balance	(6,890)	[1]	(6,890)	[1]
Foreign Currency Items [Member]
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Accumulated Other Comprehensive Income, beginning balance	12,890		12,869
Other comprehensive loss before reclassifications	4,885		4,906
Amounts reclassified from OCI	0		0
Accumulated Other Comprehensive Income, ending balance	$ 17,775		$ 17,775

[1] Cash Flow Hedges and Pension Items are net of tax.

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Restructuring (Details) (USD $)	3 Months Ended				6 Months Ended
	Jun. 30, 2014		Jun. 30, 2013		Jun. 30, 2014 Employee		Jun. 30, 2013
Restructuring Cost and Reserve [Line Items]
Expected annual savings from restructuring	$ 30,000,000
Headcount reduction due to restructuring					300
Carrying amount reduction due to asset impairment	28,100,000				28,100,000
Restructuring charge, after tax	10,700,000		4,700,000		48,200,000		14,100,000
Detail of the restructuring costs [Abstract]
Employee separation	1,256,000		2,428,000		13,578,000		11,340,000
Long-lived asset impairment	9,212,000		880,000		47,872,000		3,406,000
Intangibles impairment	0				1,049,000
Gain on asset sales	0				(602,000)
Write-down of inventory			277,000				872,000
Other costs	2,511,000	[1]	3,057,000	[2]	3,804,000	[1]	3,797,000	[2]
Total	12,979,000		6,642,000		65,701,000		19,415,000
Restructuring cost by segment [Abstract]
Total	12,979,000		6,642,000		65,701,000		19,415,000
Summary of accrual for restructuring and other charges [Abstract]
Balance as of December 31, 2013					6,150,000
Restructuring and other costs	12,979,000		6,642,000		65,701,000		19,415,000
Gain on sale of assets	0				602,000
Cash spent					(4,639,000)
Reduction of assets					(48,921,000)
Translation adjustment					(87,000)
Balance as of June 30, 2014	18,806,000				18,806,000
Minimum [Member]
Restructuring Cost and Reserve [Line Items]
Number of years of incremental savings (in years)					2 years
Reduction in manufacturing labor and pre-tax charges					120,000,000
Restructuring cost by segment [Abstract]
Future restructuring costs, current year					30,000,000
Future restructuring costs, 2016	25,000,000				25,000,000
Maximum [Member]
Restructuring Cost and Reserve [Line Items]
Number of years of incremental savings (in years)					3 years
Reduction in manufacturing labor and pre-tax charges					130,000,000
Number of employees terminated due to restructuring					10
Restructuring cost by segment [Abstract]
Future restructuring costs, current year					35,000,000
Future restructuring costs, 2016	30,000,000				30,000,000
Employee Separations [Member]
Detail of the restructuring costs [Abstract]
Gain on asset sales					0
Total					13,578,000
Restructuring cost by segment [Abstract]
Total					13,578,000
Summary of accrual for restructuring and other charges [Abstract]
Balance as of December 31, 2013					4,562,000
Restructuring and other costs					13,578,000
Gain on sale of assets					0
Cash spent					(2,831,000)
Reduction of assets					0
Translation adjustment					(87,000)
Balance as of June 30, 2014	15,222,000				15,222,000
Asset Related and Other [Member]
Detail of the restructuring costs [Abstract]
Gain on asset sales					(602,000)
Total					52,123,000
Restructuring cost by segment [Abstract]
Total					52,123,000
Summary of accrual for restructuring and other charges [Abstract]
Balance as of December 31, 2013					1,588,000
Restructuring and other costs					52,123,000
Gain on sale of assets					602,000
Cash spent					(1,808,000)
Reduction of assets					(48,921,000)
Translation adjustment					0
Balance as of June 30, 2014	3,584,000				3,584,000
Selling & Administrative [Member]
Detail of the restructuring costs [Abstract]
Employee separation			2,428,000				11,340,000
Long-lived asset impairment			880,000				3,406,000
Write-down of inventory			0				0
Other costs			3,057,000	[2]			3,797,000	[2]
Total	12,979,000		6,365,000		65,701,000		18,543,000
Restructuring cost by segment [Abstract]
Total	12,979,000		6,365,000		65,701,000		18,543,000
Summary of accrual for restructuring and other charges [Abstract]
Restructuring and other costs	12,979,000		6,365,000		65,701,000		18,543,000
Cost of Products Sold [Member]
Detail of the restructuring costs [Abstract]
Employee separation			0				0
Long-lived asset impairment			0				0
Write-down of inventory			277,000				872,000
Other costs			0	[2]			0	[2]
Total			277,000				872,000
Restructuring cost by segment [Abstract]
Total			277,000				872,000
Summary of accrual for restructuring and other charges [Abstract]
Restructuring and other costs			277,000				872,000
Flavors & Fragrances [Member]
Detail of the restructuring costs [Abstract]
Total	9,068,000		5,951,000		54,051,000		14,490,000
Restructuring cost by segment [Abstract]
Total	9,068,000		5,951,000		54,051,000		14,490,000
Summary of accrual for restructuring and other charges [Abstract]
Restructuring and other costs	9,068,000		5,951,000		54,051,000		14,490,000
Color [Member]
Detail of the restructuring costs [Abstract]
Total	1,411,000		600,000		7,950,000		4,310,000
Restructuring cost by segment [Abstract]
Total	1,411,000		600,000		7,950,000		4,310,000
Summary of accrual for restructuring and other charges [Abstract]
Restructuring and other costs	1,411,000		600,000		7,950,000		4,310,000
Corporate & Other [Member]
Detail of the restructuring costs [Abstract]
Total	2,500,000		91,000		3,700,000		615,000
Restructuring cost by segment [Abstract]
Total	2,500,000		91,000		3,700,000		615,000
Summary of accrual for restructuring and other charges [Abstract]
Restructuring and other costs	2,500,000		91,000		3,700,000		615,000
2014 Proxy Contest [Member]
Detail of the restructuring costs [Abstract]
Other costs	$ 2,200,000				$ 3,100,000

[1] Other costs include decommissioning costs, professional services, personnel moving costs, other related costs and 2014 proxy contest costs.

[2] Other costs include decommissioning, professional services, personnel (other than employee separations) and moving related costs.

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Segment Information

6 Months Ended

Jun. 30, 2014

Segment Information [Abstract]

Segment Information

3. Segment Information

Operating results by segment for the periods and at the dates presented are as follows:

(In thousands)	Flavors & Fragrances		Color		Corporate & Other			Consolidated
Three months ended June 30, 2014:
Revenue from external customers	$	207,961	$	127,824	$	38,881		$	374,666
Intersegment revenue		8,231		5,401		111			13,743
Total revenue	$	216,192	$	133,225	$	38,992		$	388,409
Operating income (loss)	$	33,554	$	30,858	$	(16,203	)	$	48,209
Interest expense		-		-		3,718			3,718
Earnings (loss) before income taxes	$	33,554	$	30,858	$	(19,921	)	$	44,491

Three months ended June 30, 2013:
Revenue from external customers	$	218,315	$	122,871	$	37,620		$	378,806
Intersegment revenue		8,311		5,360		33			13,704
Total revenue	$	226,626	$	128,231	$	37,653		$	392,510
Operating income (loss)	$	31,984	$	28,432	$	(11,738	)	$	48,678
Interest expense		-		-		4,008			4,008
Earnings (loss) before income taxes	$	31,984	$	28,432	$	(15,746	)	$	44,670

(In thousands)	Flavors & Fragrances		Color		Corporate & Other			Consolidated
Six months ended June 30, 2014:
Revenue from external customers	$	412,081	$	256,493	$	74,223		$	742,797
Intersegment revenue		17,490		10,370		111			27,971
Total revenue	$	429,571	$	266,863	$	74,334		$	770,768
Operating income (loss)	$	63,493	$	60,265	$	(73,970	)	$	49,788
Interest expense		-		-		7,849			7,849
Earnings (loss) before income taxes	$	63,493	$	60,265	$	(81,819	)	$	41,939

Six months ended June 30, 2013:
Revenue from external customers	$	425,311	$	246,654	$	72,481		$	744,446
Intersegment revenue		17,156		11,056		48			28,260
Total revenue	$	442,467	$	257,710	$	72,529		$	772,706
Operating income (loss)	$	60,390	$	55,115	$	(30,489	)	$	85,016
Interest expense		-		-		8,269			8,269
Earnings (loss) before income taxes	$	60,390	$	55,115	$	(38,758	)	$	76,747

Beginning in the first quarter of 2014, the results of operations for the Company’s fragrances businesses in Asia Pacific and China, previously reported in the Corporate & Other segment, are reported in the Flavors & Fragrances Group, and the results of operations for the Company’s pharmaceutical flavors business, previously reported in the Flavors & Fragrances Group, are reported in the Color Group with the pharmaceutical colors business. Results for 2013 have been restated to reflect these changes.

The Company evaluates performance based on operating income of the respective segments before restructuring and other costs, interest expense and income taxes. The 2014 and 2013 restructuring and other costs are included in the Corporate & Other segment.

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CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS (Unaudited) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS (Unaudited) [Abstract]
Revenue	$ 374,666	$ 378,806	$ 742,797	$ 744,446
Cost of products sold	245,002	256,285	488,625	504,788
Selling and administrative expenses	81,455	73,843	204,384	154,642
Operating income	48,209	48,678	49,788	85,016
Interest expense (loss)	3,718	4,008	7,849	8,269
Earnings (loss) before income taxes	44,491	44,670	41,939	76,747
Income taxes	15,430	12,388	14,953	23,026
Net earnings	$ 29,061	$ 32,282	$ 26,986	$ 53,721
Weighted average number of shares outstanding:
Basic (in shares)	48,665	49,751	49,256	49,731
Diluted (in shares)	48,953	49,917	49,512	49,892
Earnings per common share:
Basic (in dollars per share)	$ 0.60	$ 0.65	$ 0.55	$ 1.08
Diluted (in dollars per share)	$ 0.59	$ 0.65	$ 0.55	$ 1.08
Dividends declared per common share (in dollars per share)	$ 0.00	$ 0.23	$ 0.48	$ 0.45

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Accounting Policies

6 Months Ended

Jun. 30, 2014

Accounting Policies [Abstract ]

Accounting Policies

1. Accounting Policies

In the opinion of Sensient Technologies Corporation (the “Company”), the accompanying unaudited consolidated condensed financial statements contain all adjustments (consisting of only normal recurring adjustments) which are necessary to present fairly the financial position of the Company as of June 30, 2014, and December 31, 2013, and the results of operations, comprehensive income and cash flows for the three and six months ended June 30, 2014 and 2013.  The results of operations for any interim period are not necessarily indicative of the results to be expected for the full year.

The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes.  Actual results could differ from those estimates.

Expenses are charged to operations in the year incurred.  However, for interim reporting purposes, certain expenses are charged to operations based on a proportionate share of estimated annual amounts rather than as they are actually incurred. In interim periods, depreciation expense is estimated using actual depreciation on fixed assets that have been placed in service at the beginning of the year, combined with an estimate of depreciation expense on expected current year additions.

On January 1, 2014, the Company adopted Accounting Standards Update (ASU) No. 2013-11, Income Taxes (Topic 740), Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists, which requires companies to change the balance sheet presentation of certain unrecognized tax benefits and deferred tax assets. The adoption of this ASU had no material impact on the Company’s balance sheet presentation, financial condition or results of operations.

Refer to the notes in the Company’s annual consolidated financial statements for the year ended December 31, 2013, for additional details of the Company’s financial condition and a description of the Company’s accounting policies, which have been continued without change.

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Segment Information (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Segment Reporting Information [Line Items]
Revenue from external customers	$ 374,666	$ 378,806	$ 742,797	$ 744,446
Operating income (loss)	48,209	48,678	49,788	85,016
Interest expense	3,718	4,008	7,849	8,269
Earnings (loss) before income taxes	44,491	44,670	41,939	76,747
Flavors & Fragrances [Member]
Segment Reporting Information [Line Items]
Revenue from external customers	207,961	218,315	412,081	425,311
Color [Member]
Segment Reporting Information [Line Items]
Revenue from external customers	127,824	122,871	256,493	246,654
Corporate and Other [Member]
Segment Reporting Information [Line Items]
Revenue from external customers	38,881	37,620	74,223	72,481
Operating Segments [Member]
Segment Reporting Information [Line Items]
Total Revenue	388,409	392,510	770,768	772,706
Operating Segments [Member] | Flavors & Fragrances [Member]
Segment Reporting Information [Line Items]
Total Revenue	216,192	226,626	429,571	442,467
Operating income (loss)	33,554	31,984	63,493	60,390
Interest expense	0	0	0	0
Earnings (loss) before income taxes	33,554	31,984	63,493	60,390
Operating Segments [Member] | Color [Member]
Segment Reporting Information [Line Items]
Total Revenue	133,225	128,231	266,863	257,710
Operating income (loss)	30,858	28,432	60,265	55,115
Interest expense	0	0	0	0
Earnings (loss) before income taxes	30,858	28,432	60,265	55,115
Operating Segments [Member] | Corporate and Other [Member]
Segment Reporting Information [Line Items]
Total Revenue	38,992	37,653	74,334	72,529
Operating income (loss)	(16,203)	(11,738)	(73,970)	(30,489)
Interest expense	3,718	4,008	7,849	8,269
Earnings (loss) before income taxes	(19,921)	(15,746)	(81,819)	(38,758)
Intersegment Eliminations [Member]
Segment Reporting Information [Line Items]
Total Revenue	13,743	13,704	27,971	28,260
Intersegment Eliminations [Member] | Flavors & Fragrances [Member]
Segment Reporting Information [Line Items]
Total Revenue	8,231	8,311	17,490	17,156
Intersegment Eliminations [Member] | Color [Member]
Segment Reporting Information [Line Items]
Total Revenue	5,401	5,360	10,370	11,056
Intersegment Eliminations [Member] | Corporate and Other [Member]
Segment Reporting Information [Line Items]
Total Revenue	$ 111	$ 33	$ 111	$ 48

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Retirement Plans (Details) (Pension Plans, Defined Benefit [Member], USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Pension Plans, Defined Benefit [Member]
Defined Benefit Plan Disclosure [Line Items]
Service cost	$ 635	$ 755	$ 1,267	$ 1,513
Interest cost	603	600	1,202	1,204
Expected return on plan assets	(480)	(362)	(954)	(727)
Amortization of prior service cost	43	43	86	86
Amortization of actuarial (gain) loss	(157)	799	(317)	1,599
Curtailment gain	(115)	0	(115)	0
Total defined benefit expense	$ 529	$ 1,835	$ 1,169	$ 3,675

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Fair Value

6 Months Ended

Jun. 30, 2014

Fair Value [Abstract]

Fair Value

2. Fair Value

Accounting Standards Codification (“ASC”) 820, Fair Value Measurements and Disclosures, defines fair value for financial assets and liabilities, establishes a framework for measuring fair value in GAAP and expands disclosures about fair value measurements. As of June 30, 2014, and December 31, 2013, the Company’s assets and liabilities subject to this standard are forward exchange contracts and investments in a money market fund and municipal investments. The fair value of the forward exchange contracts based on current pricing obtained for comparable derivative products (Level 2 inputs) was negligible and an asset of $0.2 million as of June 30, 2014 and December 31, 2013, respectively. The fair value of the investments based on June 30, 2014, and December 31, 2013, market quotes (Level 1 inputs) was an asset of $21.1 million and $19.8 million, respectively, and is reported in Other Assets in the Consolidated Condensed Balance Sheets.

The carrying values of the Company’s cash and cash equivalents, trade accounts receivable, accounts payable, accrued expenses and short-term borrowings approximated fair values as of June 30, 2014. The fair value of the Company’s long-term debt, including current maturities, is estimated using discounted cash flows based on the Company’s current incremental borrowing rates for similar types of borrowing arrangements (Level 2 inputs). The carrying value of the long-term debt at June 30, 2014, was $472.1 million. The fair value of the long-term debt at June 30, 2014, was $485.3 million.

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CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) [Abstract]
Comprehensive Income	$ 34,130	$ 24,657	$ 32,210	$ 28,043

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Segment Information (Tables)

6 Months Ended

Jun. 30, 2014

Segment Information [Abstract]

Segment Information

Operating results by segment for the periods and at the dates presented are as follows:

(In thousands)	Flavors & Fragrances		Color		Corporate & Other			Consolidated
Three months ended June 30, 2014:
Revenue from external customers	$	207,961	$	127,824	$	38,881		$	374,666
Intersegment revenue		8,231		5,401		111			13,743
Total revenue	$	216,192	$	133,225	$	38,992		$	388,409
Operating income (loss)	$	33,554	$	30,858	$	(16,203	)	$	48,209
Interest expense		-		-		3,718			3,718
Earnings (loss) before income taxes	$	33,554	$	30,858	$	(19,921	)	$	44,491

Three months ended June 30, 2013:
Revenue from external customers	$	218,315	$	122,871	$	37,620		$	378,806
Intersegment revenue		8,311		5,360		33			13,704
Total revenue	$	226,626	$	128,231	$	37,653		$	392,510
Operating income (loss)	$	31,984	$	28,432	$	(11,738	)	$	48,678
Interest expense		-		-		4,008			4,008
Earnings (loss) before income taxes	$	31,984	$	28,432	$	(15,746	)	$	44,670

(In thousands)	Flavors & Fragrances		Color		Corporate & Other			Consolidated
Six months ended June 30, 2014:
Revenue from external customers	$	412,081	$	256,493	$	74,223		$	742,797
Intersegment revenue		17,490		10,370		111			27,971
Total revenue	$	429,571	$	266,863	$	74,334		$	770,768
Operating income (loss)	$	63,493	$	60,265	$	(73,970	)	$	49,788
Interest expense		-		-		7,849			7,849
Earnings (loss) before income taxes	$	63,493	$	60,265	$	(81,819	)	$	41,939

Six months ended June 30, 2013:
Revenue from external customers	$	425,311	$	246,654	$	72,481		$	744,446
Intersegment revenue		17,156		11,056		48			28,260
Total revenue	$	442,467	$	257,710	$	72,529		$	772,706
Operating income (loss)	$	60,390	$	55,115	$	(30,489	)	$	85,016
Interest expense		-		-		8,269			8,269
Earnings (loss) before income taxes	$	60,390	$	55,115	$	(38,758	)	$	76,747

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Document and Entity Information	6 Months Ended
	Jun. 30, 2014	Jul. 31, 2014
Document and Entity Information [Abstract]
Entity Registrant Name	SENSIENT TECHNOLOGIES CORP
Entity Central Index Key	0000310142
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		48,219,181
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q2
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2014

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Retirement Plans (Tables)

6 Months Ended

Jun. 30, 2014

Retirement Plans [Abstract]

Components of annual benefit cost

The Company’s components of annual benefit cost for the defined benefit plans for the periods presented are as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
(In thousands)	2014			2013			2014			2013
Service cost	$	635		$	755		$	1,267		$	1,513
Interest cost		603			600			1,202			1,204
Expected return on plan assets		(480	)		(362	)		(954	)		(727	)
Amortization of prior service cost		43			43			86			86
Amortization of actuarial (gain) loss		(157	)		799			(317	)		1,599
Curtailment gain		(115	)		-			(115	)		-
Total defined benefit expense	$	529		$	1,835		$	1,169		$	3,675

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CONSOLIDATED CONDENSED BALANCE SHEETS (Unaudited) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
CURRENT ASSETS:
Cash and cash equivalents	$ 28,428	$ 19,836
Trade accounts receivable, net	265,641	233,751
Inventories	479,450	474,452
Prepaid expenses and other current assets	74,373	61,786
TOTAL CURRENT ASSETS	847,892	789,825
OTHER ASSETS	89,305	47,786
INTANGIBLE ASSETS, NET	9,694	10,546
GOODWILL	459,554	457,269
PROPERTY, PLANT AND EQUIPMENT:
Land	45,630	56,343
Buildings	329,721	374,388
Machinery and equipment	747,956	751,267
Construction in progress	64,792	55,236
Property, Plant and Equipment, Gross, Total	1,188,099	1,237,234
Less accumulated depreciation	(668,072)	(671,926)
Property, Plant and Equipment, Net, Total	520,027	565,308
TOTAL ASSETS	1,926,472	1,870,734
CURRENT LIABILITIES:
Trade accounts payable	98,693	99,117
Accrued salaries, wages and withholdings from employees	28,120	32,669
Other accrued expenses	95,422	78,579
Income taxes	3,450	5,478
Short-term borrowings	22,521	7,050
TOTAL CURRENT LIABILITIES	248,206	222,893
OTHER LIABILITIES	32,521	28,495
ACCRUED EMPLOYEE AND RETIREE BENEFITS	27,145	28,538
LONG-TERM DEBT	472,105	348,124
SHAREHOLDERS' EQUITY:
Common stock	5,396	5,396
Additional paid-in capital	108,202	105,119
Earnings reinvested in the business	1,221,051	1,217,874
Treasury stock, at cost	(199,380)	(91,707)
Accumulated other comprehensive loss	11,226	6,002
TOTAL SHAREHOLDERS' EQUITY	1,146,495	1,242,684
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$ 1,926,472	$ 1,870,734

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Derivative Instruments and Hedging Activity

6 Months Ended

Jun. 30, 2014

Derivative Instruments and Hedging Activity [Abstract]

Derivative Instruments and Hedging Activity

7. Derivative Instruments and Hedging Activity

The Company may use forward exchange contracts and foreign currency denominated debt to manage its exposure to foreign exchange risk by reducing the effect of fluctuating foreign currencies on short-term foreign currency denominated intercompany transactions, non-functional currency raw material purchases, non-functional currency sales and other known foreign currency exposures. These forward exchange contracts have maturities of less than twelve months. The Company’s primary hedging activities and their accounting treatment are summarized below:

Forward exchange contracts – The forward exchange contracts that have been designated as hedges are accounted for as cash flow hedges. The Company had $28.1 million and $29.6 million of forward exchange contracts, designated as hedges, outstanding as of June 30, 2014, and December 31, 2013, respectively. Due to the short term nature of these contracts, the results of these transactions are not material to the financial statements. In addition, the Company utilizes forward exchange contracts that are not designated as cash flow hedges and the results of these transactions are not material to the financial statements.

Net investment hedges – The Company has certain debt denominated in Euros and Swiss Francs. These debt instruments have been designated as partial hedges of the Company’s Euro and Swiss Franc net asset positions. Changes in the fair value of this debt attributable to changes in the spot foreign exchange rate are recorded in foreign currency translation in other comprehensive income (“OCI”). As of June 30, 2014, and December 31, 2013, the total value of the Company’s Euro and Swiss Franc debt was $109.8 million and $96.5 million, respectively.  For the three and six months ended June 30, 2014, the impact of foreign exchange rates on these debt instruments decreased debt by $0.5 million and $0.2 million, respectively, and has been recorded as foreign currency translation in OCI.

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Shareholders' Equity

6 Months Ended

Jun. 30, 2014

Shareholders' Equity [Abstract]

Shareholders' Equity

6. Shareholders’ Equity

During the three and six months ended June 30, 2014, the Company repurchased 1.8 million and 2 million shares of its common stock for an aggregate price of $97.8 million and $108.8 million, respectively.

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Inventories (Details) (USD $) In Millions, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Inventories [Abstract]
Inventories, including finished and in-process products	$ 339.4	$ 317.1
Raw materials and supplies	$ 140.1	$ 157.4

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Accumulated Other Comprehensive Income (Tables)

6 Months Ended

Jun. 30, 2014

Accumulated Other Comprehensive Income [Abstract]

Changes in accumulated other comprehensive income (AOCI)

The following tables summarize the changes in Accumulated Other Comprehensive Income (OCI) during the three- and six-month periods ended June 30, 2014:

Three Months Ended June 30, 2014
(In thousands)	Cash Flow Hedges (a)			Pension Items (a)			Foreign Currency Items		Total
Balance as of March 31, 2014	$	97		$	(6,830	)	$	12,890	$	6,157
Other comprehensive loss before reclassifications		489			-			4,885		5,374
Amounts reclassified from OCI		(245	)		(60	)		-		(305	)
Balance as of June 30, 2014	$	341		$	(6,890	)	$	17,775	$	11,226

Six Months Ended June 30, 2014
(In thousands)	Cash Flow Hedges (a)			Pension Items (a)			Foreign Currency Items		Total
Balance as of December 31, 2013	$	(99	)	$	(6,768	)	$	12,869	$	6,002
Other comprehensive loss before reclassifications		750			-			4,906		5,656
Amounts reclassified from OCI		(310	)		(122	)		-		(432	)
Balance as of June 30, 2014	$	341		$	(6,890	)	$	17,775	$	11,226

(a) Cash Flow Hedges and Pension Items are net of tax.

Reclassification out of Accumulated Other Comprehensive Income

The following tables summarize the pension items reclassified out of OCI and into the Statement of Earnings during the three- and six-month periods ended June 30, 2014 and 2013:

(In thousands)	Three Months Ended June 30, 2014			Three Months Ended June 30, 2013
Amortization of pension expense included in selling and administrative expense:
Prior service cost	$	43		$	43
Actuarial (gain) loss		(157	)		799
Total before income taxes		(114	)		842
Tax expense (benefit)		54			(315	)
Total net of tax	$	(60	)	$	527

(In thousands)	Six Months Ended June 30, 2014			Six Months Ended June 30, 2013
Amortization of pension expense included in selling and administrative expense:
Prior service cost	$	86		$	86
Actuarial (gain) loss		(317	)		1,599
Total before income taxes		(231	)		1,685
Tax expense (benefit)		109			(630	)
Total net of tax	$	(122	)	$	1,055

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Restructuring

6 Months Ended

Jun. 30, 2014

Restructuring [Abstract]

Restructuring

10. Restructuring

In March of this year, the Company announced a restructuring plan (2014 Restructuring Plan) related to eliminating underperforming operations, consolidating manufacturing facilities and improving efficiencies within the Company. The Company anticipates that the 2014 Restructuring Plan will impact several facilities and will generate cost savings estimated to be approximately $30 million per year, with incremental savings expected to be achieved over the next few years and the full benefit expected to be achieved after 2015. The Company also anticipates that the 2014 Restructuring Plan will include a reduction in headcount by approximately 300 employees, primarily direct and indirect manufacturing labor, and pre-tax charges of approximately $120 million to $130 million. In connection with the 2014 Restructuring Plan, less than 10 employees were terminated as of June 30, 2014 and limited savings were recognized by June 30, 2014.

The Company determined that certain long-lived assets, including land, buildings and certain pieces of equipment associated with the identified underperforming operations were impaired. As a result, the Company has reduced the carrying amounts of these assets to approximately $28.1 million, their aggregate respective fair values, which were determined based on independent market valuations for these assets.

For the three and six months ended June 30, 2014, the Company recorded restructuring and other costs of $13.0 million ($10.7 million after-tax) and $65.7 million ($48.2 million after-tax). The Company determined that was the appropriate amount of restructuring and other costs to record in each period in accordance with GAAP and based on an internal review of the affected facilities and consultation with legal and other advisors. Included within the restructuring and other costs, the Company incurred $2.2 million and $3.1 million, respectively, related to the 2014 proxy contest during the three and six months ended June 30, 2014. These costs are included in Other costs in the table below and mainly relate to proxy solicitation, public relations, technical consulting and legal services.

Detail of the restructuring and other costs recorded in selling and administrative expenses in the Corporate & Other segment during the three- and six-month periods ended June 30, 2014 are as follows:

	Three Months Ended,		Six Months Ended,
(In thousands)	June 30, 2014		June 30, 2014
Employee separation	$	1,256	$	13,578
Long-lived asset impairment		9,212		47,872
Intangibles impairment		-		1,049
Gain on asset sales		-		(602	)
Other costs (1)		2,511		3,804
Total	$	12,979	$	65,701

(1) Other costs include decommissioning costs, professional services, personnel moving costs, other related costs and 2014 proxy contest costs.

The Company expects to incur approximately $30 million to $35 million of additional restructuring costs by the end of December 2014 and $25 million to $30 million of additional restructuring costs by the end of 2016, consisting primarily of employee separations, asset impairments, and other restructuring related costs.

For the three and six months ended June 30, 2013, the Company recorded restructuring costs of $6.6 million ($4.7 million after-tax) and $19.4 million ($14.1 million after-tax), respectively, related to the 2013 restructuring program to relocate the Flavors & Fragrances Group headquarters to Chicago, as well as a profit improvement plan across all segments of the Company. Detail of the restructuring expenses recorded in Corporate & Other segment is as follows:

Three months ended June 30, 2013
	Selling &		Cost of
(In thousands)	Administrative		Products Sold		Total
Employee separation	$	2,428	$	-	$	2,428
Long-lived asset impairment		880		-		880
Write-down of inventory		-		277		277
Other costs(1)		3,057		-		3,057
Total	$	6,365	$	277	$	6,642

Six months ended June 30, 2013
	Selling &		Cost of
(In thousands)	Administrative		Products Sold		Total
Employee separation	$	11,340	$	-	$	11,340
Long-lived asset impairment		3,406		-		3,406
Write-down of inventory		-		872		872
Other costs(1)		3,797		-		3,797
Total	$	18,543	$	872	$	19,415

⁽¹⁾ Other costs include decommissioning, professional services, personnel (other than employee separations) and moving related costs.

The Company evaluates performance based on operating income of each segment before restructuring costs. The restructuring and other costs are recorded in the Corporate & Other segment. The following table summarizes the restructuring and other costs by segment that the costs relate to for the three and six months ended June 30, 2014 and 2013:

	Three Months Ended,
(In thousands)	June 30, 2014		June 30, 2013
Flavors & Fragrances	$	9,068	$	5,951
Color		1,411		600
Corporate & Other		2,500		91
Total	$	12,979	$	6,642

	Six Months Ended,
(In thousands)	June 30, 2014		June 30, 2013
Flavors & Fragrances	$	54,051	$	14,490
Color		7,950		4,310
Corporate & Other		3,700		615
Total	$	65,701	$	19,415

The following table summarizes the accrual for the restructuring and other charges for the six-month period ended June 30, 2014:

	Employee			Asset Related
(In thousands)	Separations			and Other			Total
Balance as of December 31, 2013	$	4,562		$	1,588		$	6,150
Restructuring and other costs		13,578			52,123			65,701
Gain on sale of assets		-			602			602
Cash spent		(2,831	)		(1,808	)		(4,639	)
Reduction of assets		-			(48,921	)		(48,921	)
Translation adjustment		(87	)		-			(87	)
Balance as of June 30, 2014	$	15,222		$	3,584		$	18,806

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Income Taxes

6 Months Ended

Jun. 30, 2014

Income Taxes [Abstract]

Income Taxes

8. Income Taxes

The effective income tax rates for the quarters ended June 30, 2014 and 2013, were 34.7% and 27.7%, respectively. For the six-month periods ended June 30, 2014 and 2013, the effective income tax rates were 35.7% and 30.0%, respectively. The effective tax rates in both 2014 and 2013 were impacted by changes in estimates associated with the finalization of prior year foreign and domestic tax items, including the reversal of valuation allowances related to tax loss carryovers and from the restructuring activities.

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Accumulated Other Comprehensive Income

6 Months Ended

Jun. 30, 2014

Accumulated Other Comprehensive Income [Abstract]

Accumulated Other Comprehensive Income

9. Accumulated Other Comprehensive Income

The following tables summarize the changes in Accumulated Other Comprehensive Income (OCI) during the three- and six-month periods ended June 30, 2014:

Three Months Ended June 30, 2014
(In thousands)	Cash Flow Hedges (a)			Pension Items (a)			Foreign Currency Items		Total
Balance as of March 31, 2014	$	97		$	(6,830	)	$	12,890	$	6,157
Other comprehensive loss before reclassifications		489			-			4,885		5,374
Amounts reclassified from OCI		(245	)		(60	)		-		(305	)
Balance as of June 30, 2014	$	341		$	(6,890	)	$	17,775	$	11,226

Six Months Ended June 30, 2014
(In thousands)	Cash Flow Hedges (a)			Pension Items (a)			Foreign Currency Items		Total
Balance as of December 31, 2013	$	(99	)	$	(6,768	)	$	12,869	$	6,002
Other comprehensive loss before reclassifications		750			-			4,906		5,656
Amounts reclassified from OCI		(310	)		(122	)		-		(432	)
Balance as of June 30, 2014	$	341		$	(6,890	)	$	17,775	$	11,226

(a) Cash Flow Hedges and Pension Items are net of tax.

The following tables summarize the pension items reclassified out of OCI and into the Statement of Earnings during the three- and six-month periods ended June 30, 2014 and 2013:

(In thousands)	Three Months Ended June 30, 2014			Three Months Ended June 30, 2013
Amortization of pension expense included in selling and administrative expense:
Prior service cost	$	43		$	43
Actuarial (gain) loss		(157	)		799
Total before income taxes		(114	)		842
Tax expense (benefit)		54			(315	)
Total net of tax	$	(60	)	$	527

(In thousands)	Six Months Ended June 30, 2014			Six Months Ended June 30, 2013
Amortization of pension expense included in selling and administrative expense:
Prior service cost	$	86		$	86
Actuarial (gain) loss		(317	)		1,599
Total before income taxes		(231	)		1,685
Tax expense (benefit)		109			(630	)
Total net of tax	$	(122	)	$	1,055

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2014

Commitments and Contingencies [Abstract]

Commitments and Contingencies

11. Commitments and Contingencies

The Company is involved in various claims and litigation arising in the normal course of business. In the judgment of management, which relies in part on information from Company counsel, the ultimate resolution of these actions will not materially affect the consolidated financial statements of the Company.

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Fair Value (Details) (USD $) In Millions, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Mutual fund investments	$ 21.1	$ 19.8
Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Forward exchange contracts, asset	0.2	0.2
Level 2 [Member] | Carrying Value [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Long term debt	472.1
Level 2 [Member] | Fair Value [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Long term debt	$ 485.3

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Derivative Instruments and Hedging Activity (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2014	Jun. 30, 2014 Foreign Exchange Forward [Member] Cash Flow Hedging [Member]	Dec. 31, 2013 Foreign Exchange Forward [Member] Cash Flow Hedging [Member]	Jun. 30, 2014 Foreign Currency Denominated Debt, Net Investment Hedging [Member]	Dec. 31, 2013 Foreign Currency Denominated Debt, Net Investment Hedging [Member]
Derivative instruments and hedging activity for the period [Abstract]
Derivative, fair value			$ 28.1	$ 29.6
Carrying value of foreign denominated debt					109.8	96.5
Impact of foreign exchange rates on debt instruments recorded in Other Comprehensive Income	$ (0.5)	$ (0.2)

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CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Cash flows from operating activities:
Net earnings	$ 26,986	$ 53,721
Adjustments to arrive at net cash provided by operating activities:
Depreciation and amortization	26,395	25,893
Share-based compensation	2,849	1,330
Loss on assets	48,260	3,073
Deferred income taxes	(6,590)	(222)
Changes in operating assets and liabilities	(28,461)	(13,751)
Net cash provided by operating activities	69,439	70,044
Cash flows from investing activities:
Acquisition of property, plant and equipment	(29,752)	(55,241)
Proceeds from sale of assets	930	31
Other investing activity	(620)	(132)
Net cash used in investing activities	(29,442)	(55,342)
Cash flows from financing activities:
Proceeds from additional borrowings	174,741	75,596
Debt payments	(73,478)	(55,127)
Purchase of treasury stock	(108,753)	0
Dividends paid	(23,809)	(22,507)
Proceeds from options exercised and other equity transactions	396	420
Net cash used in financing activities	(30,903)	(1,618)
Effect of exchange rate changes on cash and cash equivalents	(502)	(1,481)
Net increase in cash and cash equivalents	8,592	11,603
Cash and cash equivalents at beginning of period	19,836	15,062
Cash and cash equivalents at end of period	$ 28,428	$ 26,665

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Retirement Plans

6 Months Ended

Jun. 30, 2014

Retirement Plans [Abstract]

Retirement Plans

5. Retirement Plans

The Company’s components of annual benefit cost for the defined benefit plans for the periods presented are as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
(In thousands)	2014			2013			2014			2013
Service cost	$	635		$	755		$	1,267		$	1,513
Interest cost		603			600			1,202			1,204
Expected return on plan assets		(480	)		(362	)		(954	)		(727	)
Amortization of prior service cost		43			43			86			86
Amortization of actuarial (gain) loss		(157	)		799			(317	)		1,599
Curtailment gain		(115	)		-			(115	)		-
Total defined benefit expense	$	529		$	1,835		$	1,169		$	3,675

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Income Taxes (Details)	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Income Taxes [Abstract]
Effective income tax rates (in hundredths)	34.70%	27.70%	35.70%	30.00%

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Restructuring (Tables)

6 Months Ended

Jun. 30, 2014

Restructuring [Abstract]

Summary of restructuring costs

Detail of the restructuring and other costs recorded in selling and administrative expenses in the Corporate & Other segment during the three- and six-month periods ended June 30, 2014 are as follows:

	Three Months Ended,		Six Months Ended,
(In thousands)	June 30, 2014		June 30, 2014
Employee separation	$	1,256	$	13,578
Long-lived asset impairment		9,212		47,872
Intangibles impairment		-		1,049
Gain on asset sales		-		(602	)
Other costs (1)		2,511		3,804
Total	$	12,979	$	65,701

(1) Other costs include decommissioning costs, professional services, personnel moving costs, other related costs and 2014 proxy contest costs.

The Company expects to incur approximately $30 million to $35 million of additional restructuring costs by the end of December 2014 and $25 million to $30 million of additional restructuring costs by the end of 2016, consisting primarily of employee separations, asset impairments, and other restructuring related costs.

For the three and six months ended June 30, 2013, the Company recorded restructuring costs of $6.6 million ($4.7 million after-tax) and $19.4 million ($14.1 million after-tax), respectively, related to the 2013 restructuring program to relocate the Flavors & Fragrances Group headquarters to Chicago, as well as a profit improvement plan across all segments of the Company. Detail of the restructuring expenses recorded in Corporate & Other segment is as follows:

Three months ended June 30, 2013
	Selling &		Cost of
(In thousands)	Administrative		Products Sold		Total
Employee separation	$	2,428	$	-	$	2,428
Long-lived asset impairment		880		-		880
Write-down of inventory		-		277		277
Other costs(1)		3,057		-		3,057
Total	$	6,365	$	277	$	6,642

Six months ended June 30, 2013
	Selling &		Cost of
(In thousands)	Administrative		Products Sold		Total
Employee separation	$	11,340	$	-	$	11,340
Long-lived asset impairment		3,406		-		3,406
Write-down of inventory		-		872		872
Other costs(1)		3,797		-		3,797
Total	$	18,543	$	872	$	19,415

⁽¹⁾ Other costs include decommissioning, professional services, personnel (other than employee separations) and moving related costs.

Restructuring cost by segment

The Company evaluates performance based on operating income of each segment before restructuring costs. The restructuring and other costs are recorded in the Corporate & Other segment. The following table summarizes the restructuring and other costs by segment that the costs relate to for the three and six months ended June 30, 2014 and 2013:

	Three Months Ended,
(In thousands)	June 30, 2014		June 30, 2013
Flavors & Fragrances	$	9,068	$	5,951
Color		1,411		600
Corporate & Other		2,500		91
Total	$	12,979	$	6,642

	Six Months Ended,
(In thousands)	June 30, 2014		June 30, 2013
Flavors & Fragrances	$	54,051	$	14,490
Color		7,950		4,310
Corporate & Other		3,700		615
Total	$	65,701	$	19,415

Summary of accrual for restructuring and other charges

The following table summarizes the accrual for the restructuring and other charges for the six-month period ended June 30, 2014:

	Employee			Asset Related
(In thousands)	Separations			and Other			Total
Balance as of December 31, 2013	$	4,562		$	1,588		$	6,150
Restructuring and other costs		13,578			52,123			65,701
Gain on sale of assets		-			602			602
Cash spent		(2,831	)		(1,808	)		(4,639	)
Reduction of assets		-			(48,921	)		(48,921	)
Translation adjustment		(87	)		-			(87	)
Balance as of June 30, 2014	$	15,222		$	3,584		$	18,806