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Sensient Technologies Corporation Reports Results for the Quarter and Year Ended December 31, 2015Sensient Technologies Corporation (NYSE: SXT) reported earnings per share from continuing operations of 43 cents in the fourth quarter of 2015 compared to 55 cents in last year's fourth quarter. Revenue was $339.2 million in this year's fourth quarter compared to $342.8 million in the comparable period last year. Operating income was $31.6 million in the fourth quarter of 2015 compared to $36.2 million in last year's fourth quarter. Foreign currency translation had a significant impact on the fourth quarter results, reducing reported revenue by 6.3%, operating income by 3.7%, and earnings per share by 3.6%. For the year ended December 31, 2015, reported earnings per share from continuing operations were $2.32 compared to $1.67 per share in last year's comparable period. Revenue was approximately $1.4 billion in both 2015 and 2014. Operating income from continuing operations was $166.3 million and $130.7 million in the years ended December 31, 2015 and 2014, respectively. Foreign currency translation reduced revenue by 7.4% and operating income by 1.5% in 2015. 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 within the Corporate & Other segment. Restructuring and other costs reduced operating income by $15.1 million, or 28 cents per share, in this year's fourth quarter and $11.8 million, or 16 cents per share, in the fourth quarter of 2014. For the years ended December 31, 2015 and 2014, restructuring and other costs reduced operating income by $43.6 million, or 73 cents per share, in 2015 and $90.6 million, or $1.34 per share, in 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 adjusted earnings per share from continuing operations were 71 cents in the fourth quarters of both 2015 and 2014. Adjusted operating income was $46.7 million and $48.0 million in the fourth quarters of 2015 and 2014, respectively. Foreign currency translation reduced adjusted operating income by 5.5% and adjusted earnings per share by 5.6%. For the year ended December 31, 2015, adjusted earnings per share from continuing operations were $3.05 compared to $3.02 in the year ended December 31, 2014. Adjusted operating income was $210.0 million and $221.2 million for the years ended December 31, 2015 and 2014, respectively. Foreign currency translation reduced adjusted operating income by 6.7% and adjusted earnings per share by 7.3% in 2015. Cash provided by operating activities was $128.0 million in 2015 and $189.2 million in 2014. The Company repurchased approximately 200,000 shares of its common stock in the fourth quarter and approximately 2.7 million shares in 2015. Including dividend payments, the Company returned approximately $225 million to shareholders in 2015. "It was a very good year for Sensient," said Paul Manning, President and CEO of Sensient Technologies Corporation. "The Flavors and Fragrances Group performed very well and delivered high-single digit profit growth in the fourth quarter. Most of the Color Group's businesses also delivered solid growth in the fourth quarter. We are on schedule to complete our restructuring activities by the end of this year, and we expect the Inks business to make a significant recovery in 2016. It was a successful year for Sensient and our shareholders, and I am very optimistic about the future." BUSINESS REVIEW The Flavors & Fragrances Group reported fourth quarter revenue of $201.0 million, a decrease of 1% from $203.1 million reported in last year's fourth quarter. Operating income increased 6.3% to $27.5 million compared to $25.9 million in the fourth quarter of 2014. The Flavors & Fragrances Group's operating margin increased 100 basis points to 13.7% in the quarter, as most of the Group's business units reported solid local currency operating income growth in the quarter. Foreign currency translation reduced revenue by 5.2% and operating income by 1.5% in the quarter. The Flavors & Fragrances Group reported revenue of $819.0 million for the year ended December 31, 2015, a decrease of 3.8% from $851.5 million reported in 2014. Operating income increased approximately 1%, to $121.9 million in 2015, from $120.9 million in 2014. The Flavors & Fragrances Group operating margin improved to 14.9% in 2015, increasing from 14.2% in 2014. Foreign currency translation reduced both revenue and operating income in the year to date period, by 6.7% and 2.9%, respectively. The Color Group reported revenue of $114.6 million in the quarter, a decrease of approximately 1% compared to $116.0 million in last year's fourth quarter. Operating income decreased 15.1% to $21.0 million in the fourth quarter compared to $24.7 million in the comparable period last year. Foreign currency continued to have a significant impact, reducing revenue by 7.8%, and operating income by 7.0% in the quarter. Most of the Color Group's businesses performed well in the quarter. In local currency, the food colors, cosmetic colors and pharmaceutical businesses reported solid revenue and operating income growth. Favorable results from the food, cosmetic and pharmaceutical businesses were more than offset by the decline in the specialty inks business. For the full year, Color Group revenue was $470.9 million, off 7.5% compared to $509.3 million in 2014. Operating income was $94.8 million in 2015, a decrease of 16.9% compared to $114.0 million in 2014. Foreign currency translation has had a significant impact on both revenue and operating income, reducing both by approximately 9% for the year. The Asia Pacific Group reported revenue of $33.6 million and $32.9 million in the fourth quarters of 2015 and 2014, respectively, an increase of approximately 2%. Operating income was $6.9 million in the quarter, which is a decrease of 2.7% from last year's fourth quarter result of $7.1 million. Foreign currency translation reduced both revenue and operating income by approximately 8% in this year's fourth quarter. For the full year, the Asia Pacific Group reported revenue of $130.6 million in 2015 and $133.3 million last year. Operating income was $25.5 million in 2015 and $25.1 million in 2014. Foreign currency translation reduced revenue by 6.4% and operating income by 5.1% for the year. The Corporate & Other segment, which includes the restructuring and other costs, reported operating costs of $23.8 million in this year's fourth quarter and $21.4 million in the fourth quarter of 2014. For the full year, the Corporate & Other segment had operating costs of $75.8 million compared to $129.4 million in 2014. 2016 OUTLOOK Sensient expects 2016 adjusted earnings per share from continuing operations to increase between 8% and 11%, in local currency. Foreign currency translation will have a significant impact on reported and adjusted earnings per share, and based on current exchange rates the Company expects that impact to be approximately 15 cents per share. CONFERENCE CALL The Company will host a conference call to discuss its 2015 fourth quarter and full year financial results at 10:00 a.m. CST on Friday, February 5, 2016. To participate in the conference call, please contact InterCall Teleconferencing at (706) 758-1089 and refer to conference identification number 30428535. 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. CST on February 5, 2016, through midnight on February 12, 2016, by calling (404) 537-3406 and referring to conference identification number 30428535. 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 September 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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