EX-99.1 2 c19443exv99w1.htm EARNINGS PRESS RELEASE exv99w1
 

Exhibit 99.1
FOR IMMEDIATE RELEASE
Contact:        Dick Hobbs
(414) 347-3836
Sensient Technologies Corporation
Reports Record Third Quarter Revenue and Operating Income
Third Quarter 2007 Earnings per Share up 18.9%
     MILWAUKEE—October 19, 2007 — Sensient Technologies Corporation (NYSE: SXT) reported that diluted earnings per share for the third quarter of 2007 rose 18.9% to 44 cents, compared to 37 cents in last year’s third quarter. Diluted earnings per share for the nine months ended September 30, 2007, were up 13.5% to $1.26 compared to $1.11 in last year’s first nine months.
     Revenue reached a record level of $294.3 million for the third quarter, up 4.8% from the comparable quarter in 2006. Revenue for the first nine months of this year was $883.9 million, an increase of 7.0% from the prior year’s comparable period. The Company expects that revenue growth for the remainder of 2007 will exceed 7%.
     “Today we announced another quarter with excellent results,” said Kenneth P. Manning, Chairman and CEO of Sensient Technologies Corporation. “This quarter all of our groups reported higher revenue and profits. We are well-positioned for future growth.”
BUSINESS REVIEW
     The Flavors & Fragrances Group reported record third quarter revenue and operating income. Revenue for the third quarter increased 4.0% to $197.2 million. Operating income was up 8.9% to $29.9 million compared to $27.4 million in the third quarter of 2006. Year-to-date revenue increased 6.6% to $584.3 million and operating income was up 12.6% to $87.2 million. Group revenue in the quarter benefited from improved pricing. Foreign currency translation also had a favorable impact on quarterly revenue. Quarterly profit rose
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Sensient Technologies Corporation
Earnings Release — Third quarter ended September 30, 2007
October 19, 2007 		  Page 2
as a result of improved pricing, favorable foreign currency translation and improvements in operating efficiencies. Group operating margins in the quarter improved 70 basis points in comparison to the third quarter of 2006.
     The Color Group’s revenue increased 4.1% to $90.7 million for the quarter ended September 30, 2007, compared to $87.1 million in last year’s third quarter. Operating income for the quarter was $15.9 million, up 14.6% from $13.9 million reported in the third quarter of 2006. Year-to-date revenue increased 5.8% to $282.2 million and operating income was up 10.5% to $50.3 million. Quarterly revenue for the Color Group reflects solid growth in food and beverage colors and favorable foreign currency translation. Higher volumes and improved product mix contributed to the increase in Color Group profits for the third quarter. Group operating margins in the quarter improved 160 basis points in comparison to the third quarter of 2006.
2007 OUTLOOK
     Sensient has increased its reported 2007 diluted earnings per share guidance to $1.62. The previous range for guidance was between $1.56 and $1.59. For 2008, Sensient expects its diluted earnings per share to be between $1.73 and $1.77.
CONFERENCE CALL
     The company will host a conference call to discuss its 2007 third quarter financial results at 10:00 a.m. CDT on Friday, October 19, 2007. To make a reservation for the conference call, please contact InterCall Teleconferencing at (706) 645-6973 and refer to the Sensient Technologies Corporation conference call.
     A replay will be available beginning at 1:00 p.m. CDT on October 19, 2007, through midnight on October 26, 2007, by calling (706) 645-9291 and referring to passcode 19399083. A transcript of the call will also be posted on the company’s web site at www.sensient-tech.com after the call concludes.
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Sensient Technologies Corporation
Earnings Release — Third quarter ended September 30, 2007
October 19, 2007 		  Page 3
     This release contains forward-looking statements (as that term is defined in the Private Securities Litigation Reform Act of 1995) that reflect management’s current assumptions and estimates of future economic circumstances, industry conditions, company performance and financial results. A variety of factors could cause the company’s actual results and experience to differ materially from the anticipated results, including, but not limited to the factors noted in this press release and in the Management’s Discussion and Analysis in our most recently filed annual report on Form 10-K for the year ended December 31, 2006, and quarterly report on Form 10-Q for the quarter ended June 30, 2007. The forward-looking statements in this press release speak only as to the date of this release. Sensient Technologies Corporation expressly disclaims any obligation or undertaking to release publicly any updates or revisions to such statements to reflect any change in its expectations upon which such statements are based.
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, display imaging chemicals, and other specialty chemicals. The company’s customers include major international manufacturers representing some of the world’s best-known brands. Sensient is headquartered in Milwaukee, Wisconsin.
     www.sensient-tech.com
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Sensient Technologies Corporation   Page 4
(In thousands, except percentages and per share amounts)    
Consolidated Statements of Earnings
                                                 
    Three Months Ended September 30,     Nine Months Ended September 30,  
    2007     2006     % Change     2007     2006     % Change  
Revenue
   $ 294,311     $ 280,878       4.8     $ 883,889     $ 826,014       7.0  
 
                                                
Cost of products sold
     205,326       197,274       4.1       614,280       577,470       6.4  
Selling and administrative expenses
     50,856       50,063       1.6       157,277       149,100       5.5  
 
                                        
 
                                                
Operating income
     38,129       33,541       13.7       112,332       99,444       13.0  
Interest expense
     8,640       9,091               27,362       26,779          
 
                                        
 
                                                
Earnings before income taxes
     29,489       24,450       20.6       84,970       72,665       16.9  
Income taxes
     8,706       7,473               25,608       21,607          
 
                                        
 
                                                
Net earnings
   $ 20,783     $ 16,977       22.4     $ 59,362     $ 51,058       16.3  
 
                                        
 
                                                
Earnings per common share:
                                                
Basic
   $ 0.44     $ 0.37       18.9     $ 1.27     $ 1.11       14.4  
 
                                        
Diluted
   $ 0.44     $ 0.37       18.9     $ 1.26     $ 1.11       13.5  
 
                                        
 
                                                
Average common shares outstanding:
                                                
Basic
     46,818       45,909       2.0       46,627       45,856       1.7  
 
                                        
Diluted
     47,306       46,217       2.4       47,123       46,102       2.2  
 
                                        
                                                 
Results by Segment   Three Months Ended September 30,     Nine Months Ended September 30,  
Revenue   2007     2006     % Change     2007     2006     % Change  
 
                                                
Flavors & Fragrances
   $ 197,164     $ 189,562       4.0     $ 584,330     $ 548,375       6.6  
Color
     90,661       87,120       4.1       282,244       266,802       5.8  
Corporate & Other
     13,013       10,403       25.1       38,227       30,629       24.8  
Intersegment elimination
     (6,527 )     (6,207 )     5.2       (20,912 )     (19,792 )     5.7  
 
                                        
 
                                                
Consolidated
   $ 294,311     $ 280,878       4.8     $ 883,889     $ 826,014       7.0  
 
                                        
                                                 
Operating Income                                                
 
                                                
Flavors & Fragrances
   $ 29,884     $ 27,443       8.9     $ 87,245     $ 77,456       12.6  
Color
     15,905       13,879       14.6       50,322       45,560       10.5  
Corporate & Other
     (7,660 )     (7,781 )     (1.6 )     (25,235 )     (23,572 )     7.1  
 
                                        
 
                                                
Consolidated
   $ 38,129     $ 33,541       13.7     $ 112,332     $ 99,444       13.0  
 
                                        
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Sensient Technologies Corporation   Page 5
(In thousands, except per share amounts)    
                 
Consolidated Condensed Balance Sheets            
September 30,   2007     2006  
         
Current assets
   $ 589,273     $ 542,213  
Goodwill and intangibles (net)
     483,801       455,926  
Property, plant and equipment (net)
     400,379       380,708  
Other assets
     45,410       54,721  
 
            
 
                
Total Assets
   $ 1,518,863     $ 1,433,568  
 
            
 
                
Current liabilities
   $ 219,097     $ 259,071  
Long-term debt
     445,180       436,385  
Accrued employee and retiree benefits
     46,948       46,433  
Other liabilities
     18,851       7,327  
Shareholders’ equity
     788,787       684,352  
 
            
 
                
Total Liabilities and Shareholders’ Equity
   $ 1,518,863     $ 1,433,568  
 
            
                 
Consolidated Statements of Cash Flows            
Nine Months Ended September 30,   2007     2006  
         
 
                
Net cash provided by operating activities
   $ 80,660     $ 80,857  
 
            
 
                
Cash flows from investing activities:
                
Acquisition of property, plant and equipment
     (25,499 )     (24,526 )
Proceeds from sale of assets
     2,114       3,164  
Other investing activity
     (176 )     1,408  
 
            
 
                
Net cash used in investing activities
     (23,561 )     (19,954 )
 
            
 
                
Cash flows from financing activities:
                
Proceeds from additional borrowings
     38,977       24,881  
Debt payments
     (83,110 )     (66,367 )
Purchase of treasury stock
     —       (4,563 )
Dividends paid
     (23,484 )     (20,857 )
Proceeds from options exercised and other
     12,024       2,961  
 
            
 
                
Net cash used in financing activities
     (55,593 )     (63,945 )
 
            
 
                
Effect of exchange rate changes on cash and cash equivalents
     478       374  
 
            
 
                
Net increase (decrease) in cash and cash equivalents
     1,984       (2,668 )
Cash and cash equivalents at beginning of period
     5,035       7,068  
 
            
Cash and cash equivalents at end of period
   $ 7,019     $ 4,400  
 
            
                 
Supplemental Information            
Nine Months Ended September 30,   2007     2006  
         
 
                
Depreciation and amortization
   $ 33,154     $ 32,635  
 
                
Dividends per share
   $ 0.50     $ 0.45