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Sensient Technologies Corporation Reports Results for the Quarter Ended September 30, 2015Sensient Technologies Corporation (NYSE: SXT) reported earnings per share from continuing operations of 61 cents in the third quarter of 2015 compared to 47 cents in last year's third quarter. Revenue was $344.5 million in this year's third quarter compared to $364.5 million in the comparable period last year. Operating income was $43.2 million in the third quarter of 2015 compared to $36.1 million in last year's third quarter. The consolidated operating margin was 12.5% in the quarter compared to 9.9% in last year's third quarter. Foreign currency translation had a significant impact on the third quarter results, reducing reported revenue by 8%, operating income by 11%, and earnings per share by 13%. In 2014, Sensient initiated a restructuring plan to eliminate underperforming operations, consolidate manufacturing facilities, and improve operational efficiencies within the Company. The restructuring costs related to this plan are included in the reported results. Restructuring and other costs reduced operating income by $11.0 million, or 17 cents per share, in this year's third quarter and $21.0 million, or 31 cents per share, in the third quarter of 2014. The adjusted results, discussed below, eliminate the impact of restructuring and other costs and enhance the overall understanding of the Company's performance. Sensient's third quarter adjusted earnings per share were 77 cents compared to last year's third quarter adjusted earnings per share of 78 cents. Adjusted operating income was $54.2 million and $57.1 million in the third quarters of 2015 and 2014, respectively. Foreign currency translation reduced adjusted operating income by 7.0% and adjusted earnings per share by 7.7%. For the nine months ended September 30, 2015, reported earnings per share from continuing operations were $1.89 compared to $1.13 per share in last year's comparable period. Revenue was $1.0 billion in the first nine months of 2015 compared to $1.1 billion in the first nine months of 2014. Operating income from continuing operations was $134.7 million and $94.4 million in the first nine months of 2015 and 2014, respectively. Foreign currency translation reduced revenue by 8% and operating income by 13% in the nine months ended September 30, 2015. For the nine months ended September 30, 2015, adjusted earnings per share from continuing operations were $2.34 compared to $2.31 in the first nine months of 2014. Adjusted operating income was $163.3 million and $173.2 million for the first nine months of 2015 and 2014, respectively. Foreign currency translation reduced operating income by 7.0% and adjusted earnings per share by 7.8% for the year to date period. Restructuring and other costs reduced operating income by $28.6 million, or 45 cents per share, in the first nine months of 2015 and $78.8 million, or $1.18 per share, in the comparable period last year. Cash provided by operating activities was $16.6 million in the third quarter compared to $57.7 million in last year's third quarter. In the first nine months of 2015, cash provided by operating activities was $93.5 million. The Company continued to repurchase shares in the third quarter, and in total, the Company has repurchased approximately 2.5 million shares of its common stock this year. Including dividend payments, the Company has returned approximately $200 million to shareholders through September 30th of this year. "Sensient performed well in the third quarter," said Paul Manning, President and CEO of Sensient Technologies Corporation. "The Flavors and Fragrances Group delivered solid growth and continues to make progress on our new strategy and on restructuring activities. The Color Group remains strong and most of its businesses performed well in the quarter. I am very optimistic about the future." BUSINESS REVIEW The Flavors & Fragrances Group reported third quarter revenue of $207.4 million compared to $216.6 million reported in last year's third quarter. Operating income was $31.4 million compared to $30.6 million in last year's third quarter. The Flavors & Fragrances Group's operating margin was 15.1% in the quarter compared to 14.1% in the comparable period last year as several business units reported solid local currency operating profit growth in the quarter; including North America Beverage, North America Sweet, Europe Sweet and Fragrances. Foreign currency translation reduced both revenue and operating income in the third quarter, by 7% and 3%, respectively. The Flavors & Fragrances Group reported revenue of $618.0 million and $648.5 million in the first nine months of 2015 and 2014, respectively. Operating income was $94.4 million and $95.0 million in the first nine months of 2015 and 2014, respectively. Foreign currency translation reduced both revenue and operating income in the year to date period by 7% and 3%, respectively. The Color Group reported revenue of $116.4 million in the quarter compared to $128.1 million in last year's third quarter. Operating income was $22.9 million in the third quarter compared to $28.8 million in last year's third quarter. Foreign currency continued to have a significant impact, reducing revenue by 10%, and operating income by 9% in the quarter. Most of the Color Group's businesses performed well in the third quarter. In local currency, the cosmetic colors and pharmaceutical businesses reported double-digit operating income growth, and the food color business also reported growth in the quarter. Favorable results from these businesses were more than offset by the decline in the specialty inks business. The specialty inks business will continue to face difficult comparisons for the rest of 2015 as a result of a now resolved quality problem and unfavorable currency issues. For the first nine months of 2015, Color Group revenue was $356.3 million compared to $393.4 million in the comparable period last year. Operating income was $73.8 million for the first nine months of 2015 compared to $89.3 million in the first nine months of 2014. Foreign currency translation has had a significant impact on both revenue and operating income, reducing both by over 9% in the year to date period. The Corporate & Other segment, which includes the Company's operations in Asia Pacific, reported revenue of $31.5 million and $32.8 million in the third quarters of 2015 and 2014, respectively. For the nine months ended September 30, 2015, revenue was $97.0 million compared to $100.4 million reported in the first nine months of last year. Foreign currency translation reduced revenue by 9% and 6%, respectively, in the current quarter and first nine months of 2015. 2015 OUTLOOK Sensient is maintaining its previous adjusted earnings per share guidance to be within the range of $3.00 and $3.09. CONFERENCE CALL The Company will host a conference call to discuss its 2015 third quarter financial results at 10:00 a.m. CDT on Thursday, October 22, 2015. To participate in the conference call, please contact InterCall Teleconferencing at (706) 758-1089 and refer to conference identification number 55111914. A webcast of the conference call will be available on the Investor Information section of the Company's web site at www.sensient.com. A replay will be available beginning at 1:00 p.m. CDT on October 22, 2015, through midnight on October 29, 2015, by calling (404) 537-3406 and referring to conference identification number 55111914. A transcript of the call will also be posted on the Company's web site at www.sensient.com after the call concludes. This release contains statements that may constitute "forward-looking statements" within the meaning of Federal securities laws. Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors concerning the Company's operations and business environment. Important factors that could cause actual results to differ materially from those suggested by these forward-looking statements and that could adversely affect the Company's future financial performance include the following: the pace and nature of new product introductions by the Company and the Company's customers; the Company's ability to successfully implement its strategy to create sustainable, long-term shareholder value; the Company's ability to successfully implement its growth strategies; the outcome of the Company's various productivity-improvement and cost-reduction efforts; changes in costs or availability of raw materials, including energy; industry and economic factors related to the Company's domestic and international business; growth in markets for products in which the Company competes; industry and customer acceptance of price increases; actions by competitors, including increased intensity of competition; the loss of any customers in certain product lines in which our sales are made to a relatively small number of customers; product liability claims or product recalls; the costs of compliance, or failure to comply, with laws and regulations applicable to our industries and markets; changing consumer preferences and changing technologies; and failure to complete and integrate future acquisitions or dispositions. The risks and uncertainties identified above are not the only risks the Company faces. Additional risks and uncertainties not presently known to the Company or that it currently believes to be immaterial also may adversely affect the Company. Should any known or unknown risks and uncertainties develop into actual events, these developments could have material adverse effects on our business, financial condition and results of operations. This release contains time-sensitive information that reflects management's best analysis only as of the date of this release. 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 herein will not be realized. Additional information regarding these risks can be found in our Annual Report on Form 10-K for the year ended December 31, 2014, and Quarterly Report on Form 10-Q for the quarter ended June 30, 2015. ABOUT SENSIENT TECHNOLOGIES Sensient Technologies Corporation is a leading global manufacturer and marketer of colors, flavors and fragrances. Sensient employs advanced technologies at facilities around the world to develop specialty food and beverage systems, cosmetic and pharmaceutical systems, inkjet and specialty inks and colors, and other specialty and fine chemicals. The Company's customers include major international manufacturers representing most of the world's best-known brands. Sensient is headquartered in Milwaukee, Wisconsin.
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