Sensient Technologies Corporation Reports Results for the Quarter Ended December 31, 2024

MILWAUKEE--(BUSINESS WIRE)--Sensient Technologies Corporation (NYSE: SXT), a leading provider of flavors and colors for the food, pharmaceutical, and personal care markets, today reported financial results for the fourth quarter ended December 31, 2024. Fourth Quarter Consolidated Results Reported revenue increased 7.8% to $376.4 million in the fourth quarter of 2024 versus last year’s fourth quarter results of $349.3 million. On a local currency basis(1), revenue increased 8.9%. Reported operating income increased to $42.0 million compared to $8.1 million recorded in the fourth quarter of 2023. In the fourth quarter of 2024, the Company recorded $0.9 million of costs related to its Portfolio Optimization Plan versus last year’s $27.8 million in the fourth quarter. Local currency adjusted operating income(1) and local currency adjusted EBITDA(1) increased 20.8% and 18.8%, respectively, in the fourth quarter, with each increasing primarily as a result of higher sales volumes. Reported earnings per share was 71 cents in the fourth quarter of 2024 compared to a loss of 14 cents in the fourth quarter of 2023. Local currency adjusted EPS(1) increased 29.4% in the fourth quarter. “As expected, Sensient delivered strong performance in 2024, driven by solid volume growth and sales wins, particularly in natural colors. Our results demonstrate our ability to succeed in the markets we participate in and the strength of our product portfolio,” said Paul Manning, Sensient’s Chairman, President, and Chief Executive Officer. Fourth Quarter Group Results Reported Local Currency(1) Revenue Quarter Year-to-Date Quarter Year-to-Date Flavors & Extracts 2.8% 7.1% 3.4% 7.1% Color 11.8% 6.6% 14.0% 7.3% Asia Pacific 26.1% 11.2% 25.2% 13.0% Total Revenue 7.8% 6.9% 8.9% 7.4% Reported Adjusted Local Currency(1) Operating Income Quarter Year-to-Date Quarter Year-to-Date Flavors & Extracts 18.2% 10.6% 18.4% 10.8% Color 24.4% 13.4% 27.4% 14.2% Asia Pacific 44.3% 11.9% 41.7% 14.1% Total Operating Income 420.8% 23.6% 20.8% 9.3% The Flavors & Extracts Group reported fourth quarter 2024 revenue of $188.1 million, an increase of $5.2 million versus the prior year’s fourth quarter. The Group’s revenue benefited from favorable pricing and higher volumes. Segment operating income was $21.3 million in the fourth quarter of 2024, an increase of $3.3 million compared to the prior year’s fourth quarter. The higher operating income was also driven by the favorable pricing and higher volumes. The Color Group reported revenue of $158.1 million in the fourth quarter of 2024, an increase of $16.7 million compared to the prior year’s fourth quarter. The Group’s revenue increase was driven primarily by higher volumes in both the food and pharmaceutical and personal care product lines. Segment operating income was $26.5 million in the fourth quarter of 2024, an increase of $5.2 million compared to the prior year’s fourth quarter results. The higher operating income was primarily a result of the higher volumes, along with favorable pricing. The Asia Pacific Group reported revenue of $41.9 million in the fourth quarter of 2024, an increase of $8.7 million compared to the prior year’s fourth quarter. The Group’s revenue benefited primarily by higher volumes across nearly all geographies. Segment operating income was $8.5 million in the quarter, an increase of $2.6 million compared to the prior year’s fourth quarter. The higher operating income was primarily a result of the higher volumes. Corporate & Other reported operating expenses of $14.4 million in the fourth quarter of 2024, compared to $37.2 million of operating expenses reported in the prior year’s fourth quarter. The decrease was primarily due to the Portfolio Optimization Plan costs of $27.8 million recorded in the fourth quarter of 2023, which were primarily non-cash costs. Local currency adjusted operating expenses(1) for Corporate & Other increased $4.1 million compared to the prior year’s fourth quarter, primarily due to higher performance-based compensation costs recorded in 2024. 2025 OUTLOOK Metric Current Guidance Local Currency Revenue(1) Mid-Single-Digit Growth Local Currency Adjusted EBITDA(1) Mid-Single-Digit to High Single-Digit Growth Diluted EPS (GAAP) Between $3.05 and $3.15* Local Currency Adjusted Diluted EPS(1) High Single-Digit to Double-Digit Growth *Includes approximately 13 cents of Portfolio Optimization Plan costs and 10 to 15 cents of foreign currency headwinds based on current exchange rates The Company’s guidance is based on current conditions and economic and market trends in the markets in which the Company operates and is subject to various risks and uncertainties as described below. (1) Please refer to “Reconciliation of Non-GAAP Amounts” at the end of this release for more information regarding our non-GAAP financial measures. USE OF NON-GAAP FINANCIAL MEASURES The Company’s non-GAAP financial measures eliminate the impact of certain items, which, depending on the measure, include: currency movements, depreciation and amortization, Portfolio Optimization Plan costs, and non-cash share-based compensation. These measures are provided to enhance the overall understanding of the Company’s performance when viewed together with the GAAP results. Refer to “Reconciliation of Non-GAAP Amounts” at the end of this release. CONFERENCE CALL The Company will host a conference call to discuss its 2024 fourth quarter financial results at 8:30 a.m. CST on Friday, February 14, 2025. To participate in the conference call, contact Chorus Call Inc. at (844) 492-3726 or (412) 317-1078, and ask to join the Sensient Technologies Corporation conference call. Alternatively, the call can be accessed by using the webcast link that is available on the Investor Information section of the Company’s web site at www.sensient.com. A replay of the call will be available one hour after the end of the conference call through February 21, 2025, by calling (877) 344-7529 and using access code 3864433. An audio replay and written transcript of the call will also be posted on the Investor Information section of the Company’s web site at www.sensient.com on or after February 18, 2025. This release contains statements that may constitute “forward-looking statements” within the meaning of Federal securities laws including under “2025 Outlook” above. 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 Company’s ability to manage general business, economic, and capital market conditions, including actions taken by customers in response to such market conditions, and the impact of recessions and economic downturns; the impact of macroeconomic and geopolitical volatility, including inflation and shortages impacting the availability and cost of raw materials, energy, and other supplies, disruptions and delays in the Company’s supply chain, and the conflicts between Russia and Ukraine and in the Middle East; industry, regulatory, legal, and economic factors related to the Company’s domestic and international business; the effects of tariffs, trade barriers, and disputes; the availability and cost of labor, logistics, and transportation; the pace and nature of new product introductions by the Company and the Company’s customers; the Company’s ability to anticipate and respond to changing consumer preferences, changing technologies, and changing regulations; the Company’s ability to successfully implement its growth strategies; the outcome of the Company’s various productivity-improvement and cost-reduction efforts, acquisition and divestiture activities, and Portfolio Optimization Plan; growth in markets for products in which the Company competes; industry and customer acceptance of price increases; actions by competitors; the Company’s ability to enhance its innovation efforts and drive cost efficiencies; currency exchange rate fluctuations; and other factors included in “Risk Factors” in the Company's Annual Report on Form 10-K for the year ended December 31, 2024, and in other documents that the Company files with the SEC. 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. Except to the extent required by applicable laws, 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. ABOUT SENSIENT TECHNOLOGIES Sensient Technologies Corporation is a leading global manufacturer and marketer of colors, flavors, and other specialty ingredients. Sensient uses advanced technologies and robust global supply chain capabilities to develop specialized solutions for food and beverages, as well as products that serve the pharmaceutical, nutraceutical, and personal care industries. Sensient’s customers range in size from small entrepreneurial businesses to major international manufacturers representing some of the world’s best-known brands. Sensient is headquartered in Milwaukee, Wisconsin. www.sensient.com Sensient Technologies Corporation (In thousands, except percentages and per share amounts) (Unaudited) Consolidated Statements of Earnings Three Months Ended December 31, Year Ended December 31, 2024 2023 % Change 2024 2023 % Change Revenue $ 376,420 $ 349,302 7.8 % $ 1,557,228 $ 1,456,450 6.9 % Cost of products sold 257,002 249,472 3.0 % 1,050,135 996,153 5.4 % Selling and administrative expenses 77,422 91,767 (15.6 %) 315,514 305,274 3.4 % Operating income 41,996 8,063 420.8 % 191,579 155,023 23.6 % Interest expense 6,387 6,524 28,781 25,172 Earnings before income taxes 35,609 1,539 162,798 129,851 Income taxes 5,505 7,372 38,132 36,457 Net earnings $ 30,104 $ (5,833 ) 616.1 % $ 124,666 $ 93,394 33.5 % Earnings per share of common stock: Basic $ 0.71 $ (0.14 ) $ 2.96 $ 2.22 Diluted $ 0.71 $ (0.14 ) $ 2.94 $ 2.21 Average common shares outstanding: Basic 42,163 42,051 42,145 42,027 Diluted 42,454 42,051 42,396 42,242 Results by Segment Three Months Ended December 31, Year Ended December 31, Revenue 2024 2023 % Change 2024 2023 % Change Flavors & Extracts $ 188,114 $ 182,939 2.8 % $ 793,698 $ 741,072 7.1 % Color 158,134 141,396 11.8 % 647,939 607,959 6.6 % Asia Pacific 41,861 33,202 26.1 % 162,525 146,090 11.2 % Intersegment elimination (11,689 ) (8,235 ) (46,934 ) (38,671 ) Consolidated $ 376,420 $ 349,302 7.8 % $ 1,557,228 $ 1,456,450 6.9 % Operating Income Flavors & Extracts $ 21,345 $ 18,059 18.2 % $ 97,094 $ 87,773 10.6 % Color 26,542 21,343 24.4 % 119,529 105,370 13.4 % Asia Pacific 8,495 5,889 44.3 % 34,458 30,800 11.9 % Corporate & Other (14,386 ) (37,228 ) (59,502 ) (68,920 ) Consolidated $ 41,996 $ 8,063 420.8 % $ 191,579 $ 155,023 23.6 % Sensient Technologies Corporation (In thousands) (Unaudited) Consolidated Condensed Balance Sheets December 31, December 31, 2024 2023 Cash and cash equivalents $ 26,626 $ 28,934 Trade accounts receivable 290,087 272,164 Inventories 600,302 598,399 Prepaid expenses and other current assets 44,871 37,119 Total Current Assets 961,886 936,616 Goodwill & intangible assets (net) 423,658 436,177 Property, plant, and equipment (net) 491,587 505,277 Other assets 146,663 136,437 Total Assets $ 2,023,794 $ 2,014,507 Trade accounts payable $ 139,052 $ 131,114 Short-term borrowings 19,848 13,460 Other current liabilities 111,739 91,732 Total Current Liabilities 270,639 236,306 Long-term debt 613,523 645,085 Accrued employee and retiree benefits 24,499 27,715 Other liabilities 54,147 52,077 Shareholders' Equity 1,060,986 1,053,324 Total Liabilities and Shareholders' Equity $ 2,023,794 $ 2,014,507 Sensient Technologies Corporation (In thousands, except per share amounts) (Unaudited) Consolidated Statements of Cash Flows Year Ended December 31, 2024 2023 Cash flows from operating activities: Net earnings $ 124,666 $ 93,394 Adjustments to arrive at net cash provided by operating activities: Depreciation and amortization 60,329 57,820 Share-based compensation expense 10,084 8,933 Net (gain) loss on assets (140 ) 541 Portfolio Optimization Plan costs 1,415 24,089 Deferred income taxes (18,598 ) (5,100 ) Changes in operating assets and liabilities: Trade accounts receivable (29,638 ) 35,801 Inventories (18,295 ) (28,193 ) Prepaid expenses and other assets (5,407 ) 5,767 Trade accounts payable and other accrued expenses 8,995 (5,978 ) Accrued salaries, wages, and withholdings 22,518 (17,830 ) Income taxes (810 ) (1,175 ) Other liabilities 2,032 1,628 Net cash provided by operating activities 157,151 169,697 Cash flows from investing activities: Acquisition of property, plant, and equipment (59,212 ) (87,868 ) Proceeds from sale of assets 339 156 Acquisition of new businesses - (1,650 ) Other investing activities (336 ) 1,741 Net cash used in investing activities (59,209 ) (87,621 ) Cash flows from financing activities: Proceeds from additional borrowings 159,321 351,662 Debt payments (167,073 ) (355,161 ) Dividends paid (69,399 ) (69,222 ) Other financing activities (4,395 ) (9,278 ) Net cash used in financing activities (81,546 ) (81,999 ) Effect of exchange rate changes on cash and cash equivalents (18,704 ) 7,936 Net (decrease) increase in cash and cash equivalents (2,308 ) 8,013 Cash and cash equivalents at beginning of period 28,934 20,921 Cash and cash equivalents at end of period $ 26,626 $ 28,934 Supplemental Information Year Ended December 31, 2024 2023 Dividends paid per share $ 1.64 $ 1.64 Sensient Technologies Corporation (In thousands, except percentages and per share amounts) (Unaudited) Reconciliation of Non-GAAP Amounts The Company's results for the three and twelve months ended December 31, 2024 and 2023 include adjusted operating income, adjusted net earnings, and adjusted diluted earnings per share, which, in each case, exclude Portfolio Optimization Plan costs. Three Months Ended December 31, Year Ended December 31, 2024 2023 % Change 2024 2023 % Change Operating income (GAAP) $ 41,996 $ 8,063 420.8 % $ 191,579 $ 155,023 23.6 % Portfolio Optimization Plan costs – Cost of products sold 839 3,135 1,362 3,135 Portfolio Optimization Plan costs – Selling and administrative expenses 17 24,706 5,269 24,706 Adjusted operating income $ 42,852 $ 35,904 19.4 % $ 198,210 $ 182,864 8.4 % Net earnings (GAAP) $ 30,104 $ (5,833 ) 616.1 % $ 124,666 $ 93,394 33.5 % Portfolio Optimization Plan costs, before tax 856 27,841 6,631 27,841 Tax impact of Portfolio Optimization Plan costs(1) (3,570 ) (415 ) (4,156 ) (415 ) Adjusted net earnings $ 27,390 $ 21,593 26.8 % $ 127,141 $ 120,820 5.2 % Diluted earnings per share (GAAP) $ 0.71 $ (0.14 ) 607.1 % $ 2.94 $ 2.21 33.0 % Portfolio Optimization Plan costs, net of tax (0.06 ) 0.65 0.06 0.65 Adjusted diluted earnings per share $ 0.65 $ 0.51 27.5 % $ 3.00 $ 2.86 4.9 % Note: Earnings per share calculations may not foot due to rounding differences. (1) Tax impact adjustments were determined based on the nature of the underlying non-GAAP adjustments and their relevant jurisdictional tax rates. Results by Segment Three Months Ended December 31, Adjusted Adjusted Operating Income 2024 Adjustments(2) 2024 2023 Adjustments(2) 2023 Flavors & Extracts $ 21,345 $ - $ 21,345 $ 18,059 $ - $ 18,059 Color 26,542 - 26,542 21,343 - 21,343 Asia Pacific 8,495 - 8,495 5,889 - 5,889 Corporate & Other (14,386 ) 856 (13,530 ) (37,228 ) 27,841 (9,387 ) Consolidated $ 41,996 $ 856 $ 42,852 $ 8,063 $ 27,841 $ 35,904 Results by Segment Year Ended December 31, Adjusted Adjusted Operating Income 2024 Adjustments(2) 2024 2023 Adjustments(2) 2023 Flavors & Extracts $ 97,094 $ - $ 97,094 $ 87,773 $ - $ 87,773 Color 119,529 - 119,529 105,370 - 105,370 Asia Pacific 34,458 - 34,458 30,800 - 30,800 Corporate & Other (59,502 ) 6,631 (52,871 ) (68,920 ) 27,841 (41,079 ) Consolidated $ 191,579 $ 6,631 $ 198,210 $ 155,023 $ 27,841 $ 182,864 (2) Adjustments consist of Portfolio Optimization Plan costs. Sensient Technologies Corporation (In thousands, except percentages) (Unaudited) Reconciliation of Non-GAAP Amounts - Continued The following table summarizes the percentage change in the 2024 results compared to the 2023 results for the corresponding periods. Three Months Ended December 31, 2024 Revenue Total ForeignExchangeRates Adjustments(3) AdjustedLocalCurrency Flavors & Extracts 2.8 % (0.6 %) N/A 3.4 % Color 11.8 % (2.2 %) N/A 14.0 % Asia Pacific 26.1 % 0.9 % N/A 25.2 % Total Revenue 7.8 % (1.1 %) N/A 8.9 % Operating Income Flavors & Extracts 18.2 % (0.2 %) 0.0 % 18.4 % Color 24.4 % (3.0 %) 0.0 % 27.4 % Asia Pacific 44.3 % 2.6 % 0.0 % 41.7 % Corporate & Other (61.4 %) 0.0 % (105.5 %) 44.1 % Total Operating Income 420.8 % (6.7 %) 406.7 % 20.8 % Diluted Earnings Per Share 607.1 % (7.2 %) 584.9 % 29.4 % Adjusted EBITDA 17.5 % (1.3 %) N/A 18.8 % Year Ended December 31, 2024 Revenue Total ForeignExchangeRates Adjustments(3) AdjustedLocalCurrency Flavors & Extracts 7.1 % 0.0 % N/A 7.1 % Color 6.6 % (0.7 %) N/A 7.3 % Asia Pacific 11.2 % (1.8 %) N/A 13.0 % Total Revenue 6.9 % (0.5 %) N/A 7.4 % Operating Income Flavors & Extracts 10.6 % (0.2 %) 0.0 % 10.8 % Color 13.4 % (0.8 %) 0.0 % 14.2 % Asia Pacific 11.9 % (2.2 %) 0.0 % 14.1 % Corporate & Other (13.7 %) 0.0 % (42.4 %) 28.7 % Total Operating Income 23.6 % (1.0 %) 15.3 % 9.3 % Diluted Earnings Per Share 33.0 % (1.4 %) 28.5 % 5.9 % Adjusted EBITDA 7.6 % (0.7 %) N/A 8.3 % (3) Adjustments consist of Portfolio Optimization Plan costs. Sensient Technologies Corporation (In thousands, except percentages) (Unaudited) Reconciliation of Non-GAAP Amounts - Continued The following table summarizes the reconciliation between Consolidated Operating Income (GAAP) and Adjusted EBITDA for the three and twelve months ended December 31, 2024 and 2023. Three Months Ended December 31, Year Ended December 31, 2024 2023 % Change 2024 2023 % Change Operating income (GAAP) $ 41,996 $ 8,063 420.8% $ 191,579 $ 155,023 23.6% Depreciation and amortization 15,144 14,460 60,329 57,820 Share-based compensation expense 3,104 1,648 10,084 8,933 Portfolio Optimization Plan costs, before tax 856 27,841 6,631 27,841 Adjusted EBITDA $ 61,100 $ 52,012 17.5% $ 268,623 $ 249,617 7.6% The following table summarizes the reconciliation between Debt (GAAP) and Net Debt, and Operating Income (GAAP) and Credit Adjusted EBITDA for the year ended December 31, 2024 and 2023. Year Ended December 31, Debt 2024 2023 Short-term borrowings $ 19,848 $ 13,460 Long-term debt 613,523 645,085 Credit Agreement adjustments(4) (13,129 ) (16,743 ) Net Debt $ 620,242 $ 641,802 Operating income (GAAP) $ 191,579 $ 155,023 Depreciation and amortization 60,329 57,820 Share-based compensation expense 10,084 8,933 Portfolio Optimization Plan costs, before tax 6,631 27,841 Other non-operating gains(5) (905 ) (762 ) Credit Adjusted EBITDA $ 267,718 $ 248,855 Net Debt to Credit Adjusted EBITDA 2.3x 2.6x (4) Adjustments include cash and cash equivalents, as described in the Company's Third Amended and Restated Credit Agreement (Credit Agreement), and certain letters of credit and hedge contracts. (5) Adjustments consist of certain financing transaction costs, certain non-financing interest items, and gains and losses related to certain non-cash, non-operating, and/or non-recurring items as described in the Credit Agreement. We have included each of these non-GAAP measures in order to provide additional information regarding our underlying operating results and comparable period-over-period performance. Such information is supplemental to information presented in accordance with GAAP and is not intended to represent a presentation in accordance with GAAP. These non-GAAP measures should not be considered in isolation. Rather, they should be considered together with GAAP measures and the rest of the information included in this release and our SEC filings. Management internally reviews each of these non-GAAP measures to evaluate performance on a comparative period-to-period basis and to gain additional insight into underlying operating and performance trends, and we believe the information can be beneficial to investors for the same purposes. These non-GAAP measures may not be comparable to similarly titled measures used by other companies. Category: Earnings

Sensient Technologies Corporation Reports Results for the Quarter Ended December 31, 2024

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