10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, DC  20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended: September 30, 2023

OR

☐ 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: 001-07626

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

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, par value $0.10 per share	SXT	New York Stock Exchange LLC

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 ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes ☒ No ☐

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

Large Accelerated Filer   ☒	Accelerated Filer ☐	Non-Accelerated Filer ☐
Smaller Reporting Company ☐	Emerging Growth Company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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

Yes ☐    No ☒

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 October 31, 2023
Common Stock, par value $0.10 per share	42,249,509

SENSIENT TECHNOLOGIES CORPORATION

INDEX

			Page No.
PART I. FINANCIAL INFORMATION:
	Item 1.	Financial Statements:
		Consolidated Statements of Earnings ‑ Three and Nine Months Ended September 30, 2023 and 2022.	1
		Consolidated Condensed Statements of Comprehensive Income ‑ Three and Nine Months Ended September 30, 2023 and 2022.	2
		Consolidated Balance Sheets - September 30, 2023 and December 31, 2022.	3
		Consolidated Statements of Cash Flows ‑ Nine Months Ended September 30, 2023 and 2022.	4
		Consolidated Statements of Shareholders’ Equity ‑ Three and Nine Months Ended September 30, 2023 and 2022.	5
		Notes to Consolidated Condensed Financial Statements.	6
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	13
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	17
	Item 4.	Controls and Procedures.	17
PART II. OTHER INFORMATION:
	Item 1.	Legal Proceedings.	18
	Item 1A.	Risk Factors.	18
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	18
	Item 5.	Other Information.	18
	Item 6.	Exhibits.	18
		Exhibit Index.	19
		Signatures.	20

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

SENSIENT TECHNOLOGIES CORPORATION

CONSOLIDATED STATEMENTS OF EARNINGS

(In thousands except per share amounts)

(Unaudited)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Revenue	$	363,829	$	361,076	$	1,107,148	$	1,088,303
Cost of products sold		250,202		239,318		746,681		710,696
Selling and administrative expenses		69,096		74,265		213,507		222,081
Operating income		44,531		47,493		146,960		155,526
Interest expense		6,294		3,672		18,648		9,748
Earnings before income taxes		38,237		43,821		128,312		145,778
Income taxes		6,694		7,773		29,085		34,012
Net earnings	$	31,543	$	36,048	$	99,227	$	111,766
Weighted average number of common shares outstanding:
Basic		42,045		41,896		42,020		41,885
Diluted		42,233		42,242		42,241		42,199
Earnings per common share:
Basic	$	0.75	$	0.86	$	2.36	$	2.67
Diluted	$	0.75	$	0.85	$	2.35	$	2.65
Dividends declared per common share	$	0.41	$	0.41	$	1.23	$	1.23

See accompanying notes to consolidated condensed financial statements.

1

SENSIENT TECHNOLOGIES CORPORATION

CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)

(Unaudited)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Comprehensive income	$	18,229	$	8,997	$	109,380	$	56,171

See accompanying notes to consolidated condensed financial statements.

2

SENSIENT TECHNOLOGIES CORPORATION

CONSOLIDATED BALANCE SHEETS

(In thousands)

	September 30, 2023 (Unaudited)			December 31, 2022
Assets
Current Assets:
Cash and cash equivalents	$	31,985		$	20,921
Trade accounts receivable		284,668			302,109
Inventories		587,024			564,110
Prepaid expenses and other current assets		41,477			47,640
Total current assets		945,154			934,780
Other assets		94,646			96,609
Deferred tax assets		30,857			32,717
Intangible assets, net		17,352			18,600
Goodwill		415,618			415,715
Property, Plant, and Equipment:
Land		31,269			31,444
Buildings		336,152			322,268
Machinery and equipment		759,191			722,294
Construction in progress		71,223			65,809
		1,197,835			1,141,815
Less accumulated depreciation		(691,286	)		(658,622	)
		506,549			483,193
Total assets	$	2,010,176		$	1,981,614
Liabilities and Shareholders’ Equity
Current Liabilities:
Trade accounts payable	$	110,973		$	142,365
Accrued salaries, wages, and withholdings from employees		26,818			43,738
Other accrued expenses		55,676			51,231
Income taxes		7,543			14,446
Short-term borrowings		22,807			20,373
Total current liabilities		223,817			272,153
Deferred tax liabilities		16,202			15,977
Other liabilities		37,115			37,191
Accrued employee and retiree benefits		26,830			26,364
Long-term debt		648,556			630,331
Shareholders’ Equity:
Common stock		5,396			5,396
Additional paid-in capital		116,775			124,043
Earnings reinvested in the business		1,750,027			1,702,700
Treasury stock, at cost		(624,007	)		(631,853	)
Accumulated other comprehensive loss		(190,535	)		(200,688	)
Total shareholders’ equity		1,057,656			999,598
Total liabilities and shareholders’ equity	$	2,010,176		$	1,981,614

See accompanying notes to consolidated condensed financial statements.

3

SENSIENT TECHNOLOGIES CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

	Nine Months Ended September 30,
	2023			2022
Cash flows from operating activities:
Net earnings	$	99,227		$	111,766
Adjustments to arrive at net cash provided by operating activities:
Depreciation and amortization		43,360			39,262
Share-based compensation expense		7,285			12,476
Net (gain) loss on assets		(81	)		283
Deferred income taxes		2,082			20,465
Changes in operating assets and liabilities:
Trade accounts receivable		18,830			(39,520	)
Inventories		(21,455	)		(112,021	)
Prepaid expenses and other assets		842			(39,598	)
Accounts payable and other accrued expenses		(20,572	)		24,110
Accrued salaries, wages, and withholdings from employees		(16,749	)		1,819
Income taxes		(6,536	)		(4,342	)
Other liabilities		587			198
Net cash provided by operating activities		106,820			14,898
Cash flows from investing activities:
Acquisition of property, plant, and equipment		(67,718	)		(51,703	)
Proceeds from sale of assets		130			94
Acquisition of new business		-			(1,048	)
Other investing activities		2,036			947
Net cash used in investing activities		(65,552	)		(51,710	)
Cash flows from financing activities:
Proceeds from additional borrowings		197,577			187,715
Debt payments		(174,083	)		(87,657	)
Dividends paid		(51,900	)		(51,681	)
Other financing activities		(8,034	)		(2,056	)
Net cash (used in) provided by financing activities		(36,440	)		46,321
Effect of exchange rate changes on cash and cash equivalents		6,236			11,330
Net increase in cash and cash equivalents		11,064			20,839
Cash and cash equivalents at beginning of period		20,921			25,740
Cash and cash equivalents at end of period	$	31,985		$	46,579

See accompanying notes to consolidated condensed financial statements.

4

SENSIENT TECHNOLOGIES CORPORATION

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(In thousands, except share and per share amounts)

(Unaudited)

									Treasury Stock
Three Months Ended September 30, 2023	Common Stock		Additional Paid-In Capital			Earnings Reinvested in the Business			Shares			Amount			Accumulated Other Comprehensive Income (Loss)			Total Equity
Balances at June 30, 2023	$	5,396	$	114,330		$	1,735,807			11,909,833		$	(624,048	)	$	(177,221	)	$	1,054,264
Net earnings		-		-			31,543			-			-			-			31,543
Other comprehensive loss		-		-			-			-			-			(13,314	)		(13,314	)
Cash dividends paid – $0.41 per share		-		-			(17,323	)		-			-			-			(17,323	)
Share-based compensation		-		2,519			-			-			-			-			2,519
Non-vested stock issued upon vesting		-		(67	)		-			(1,285	)		67			-			-
Other		-		(7	)		-			492			(26	)		-			(33	)
Balances at September 30, 2023	$	5,396	$	116,775		$	1,750,027			11,909,040		$	(624,007	)	$	(190,535	)	$	1,057,656

Three Months Ended September 30, 2022
Balances at June 30, 2022	$	5,396	$	116,596	$	1,672,000		12,058,773	$	(631,853	)	$	(203,172	)	$	958,967
Net earnings		-		-		36,048		-		-			-			36,048
Other comprehensive loss		-		-		-		-		-			(27,051	)		(27,051	)
Cash dividends paid – $0.41 per share		-		-		(17,235	)	-		-			-			(17,235	)
Share-based compensation		-		3,785		-		-		-			-			3,785
Balances at September 30, 2022	$	5,396	$	120,381	$	1,690,813		12,058,773	$	(631,853	)	$	(230,223	)	$	954,514

Nine Months Ended September 30, 2023
Balances at December 31, 2022	$	5,396	$	124,043		$	1,702,700		12,058,773		$	(631,853	)	$	(200,688	)	$	999,598
Net earnings		-		-			99,227		-			-			-			99,227
Other comprehensive income		-		-			-		-			-			10,153			10,153
Cash dividends paid – $1.23 per share		-		-			(51,900	)	-			-			-			(51,900	)
Share-based compensation		-		7,285			-		-			-			-			7,285
Non-vested stock issued upon vesting		-		(12,686	)		-		(242,110	)		12,686			-			-
Benefit plans		-		375			-		(18,172	)		952			-			1,327
Other		-		(2,242	)		-		110,549			(5,792	)		-			(8,034	)
Balances at September 30, 2023	$	5,396	$	116,775		$	1,750,027		11,909,040		$	(624,007	)	$	(190,535	)	$	1,057,656

Nine Months Ended September 30, 2022
Balances at December 31, 2021	$	5,396	$	111,352		$	1,630,713		12,107,549		$	(634,408	)	$	(174,628	)	$	938,425
Net earnings		-		-			111,766		-			-			-			111,766
Other comprehensive loss		-		-			-		-			-			(55,595	)		(55,595	)
Cash dividends paid – $1.23 per share		-		-			(51,681	)	-			-			-			(51,681	)
Share-based compensation		-		12,476			-		-			-			-			12,476
Non-vested stock issued upon vesting		-		(3,239	)		-		(61,821	)		3,239			-			-
Benefit plans		-		560			-		(11,786	)		618			-			1,178
Other		-		(768	)		15		24,831			(1,302	)		-			(2,055	)
Balances at September 30, 2022	$	5,396	$	120,381		$	1,690,813		12,058,773		$	(631,853	)	$	(230,223	)	$	954,514

See accompanying notes to consolidated condensed financial statements.

5

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) that are necessary to present fairly the financial position of the Company as of September 30, 2023, and the results of operations, comprehensive income, and shareholders’ equity for the three and nine months ended September 30, 2023 and 2022, and cash flows for the nine months ended September 30, 2023 and 2022. 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 period incurred.

Please refer to the notes in the Company’s annual consolidated financial statements for the year ended December 31, 2022, 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. Acquisition

On October 3, 2022, the Company acquired Endemix Doğal Maddeler A.Ş. and Teknoloji Yatırımları ve Danışmanlık Sanayi ve Ticaret A.Ş. (collectively, Endemix), a natural colors business located in Turkey. The Company paid $23.3 million in cash for this acquisition, which is net of $1.3 million in debt assumed, with $1.7 million of such amount being held back by the Company for 12 months to satisfy any indemnification claims that may arise. The assets acquired and liabilities assumed were recorded at their estimated fair value as of the acquisition date. The Company acquired net assets of $8.9 million and identified intangible assets, principally technological know-how and customer relationships, of $4.9 million. The remaining $9.5 million was allocated to goodwill. This business is part of the Color segment.

3. Trade Accounts Receivable

Trade accounts receivables are recorded at their face amount, less an allowance for expected losses on doubtful accounts. The allowance for doubtful accounts is calculated based on customer-specific analysis and an aging methodology using historical loss information. The Company believes historical loss information is a reasonable basis for expected credit losses as the Company’s historical credit loss experience correlates with its customer delinquency status. This information is also adjusted for any known current economic conditions. Forecasted economic conditions have not had a significant impact on the current credit loss estimate due to the short-term nature of the Company’s customer receivables; however, the Company will continue to monitor and evaluate as economic conditions change. Additionally, as the Company only has one portfolio segment, there are not different risks between portfolios. Specific accounts are written off against the allowance for doubtful accounts when the receivable is deemed no longer collectible.

The following table summarizes the changes in the allowance for doubtful accounts during the three and nine month periods ended September 30, 2023 and 2022:

(In thousands) Three Months Ended September 30, 2023	Allowance for Doubtful Accounts
Balance at June 30, 2023	$	4,293
Provision for expected credit losses		13
Accounts written off		(244	)
Translation and other activity		(76	)
Balance at September 30, 2023	$	3,986

(In thousands) Three Months Ended September 30, 2022	Allowance for Doubtful Accounts
Balance at June 30, 2022	$	4,494
Provision for expected credit losses		51
Accounts written off		(33	)
Translation and other activity		(105	)
Balance at September 30, 2022	$	4,407

(In thousands) Nine Months Ended September 30, 2023	Allowance for Doubtful Accounts
Balance at December 31, 2022	$	4,436
Provision for expected credit losses		504
Accounts written off		(1,051	)
Translation and other activity		97
Balance at September 30, 2023	$	3,986

(In thousands) Nine Months Ended September 30, 2022	Allowance for Doubtful Accounts
Balance at December 31, 2021	$	4,877
Provision for expected credit losses		883
Accounts written off		(1,129	)
Translation and other activity		(224	)
Balance at September 30, 2022	$	4,407

6

4. Inventories

At September 30, 2023, and December 31, 2022, inventories included finished and in-process products totaling $414.8 million and $385.2 million, respectively, and raw materials and supplies of $172.2 million and $178.9 million, respectively.

5. Debt

On May 31, 2023, the Company entered into an agreement to issue $75 million and €40 million in five-year, fixed-rate, senior notes at coupon rates of 4.94% and 4.15%, respectively. The notes were issued on May 31, 2023, and proceeds have been used to repay a portion of existing indebtedness under the Company’s Third Amended and Restated Credit Agreement, as amended. The notes will mature in May 2028.

On August 31, 2023, the Company entered into Amendment No. 10 (Amendment) to the Receivables Purchase Agreement, dated as of October 3, 2016.  The Amendment extended the termination date from August 31, 2023 to August 30, 2024.

6. Fair Value

Accounting Standards Codification 820, Fair Value Measurement, defines fair value for financial assets and liabilities, establishes a framework for measuring fair value in GAAP, and expands disclosures about fair value measurements. The carrying values of the Company’s cash and cash equivalents, trade accounts receivable, trade accounts payable, accrued expenses, and short-term borrowings were approximately the same as the fair values as of September 30, 2023 and December 31, 2022. The net fair value of the forward exchange contracts based on current pricing obtained for comparable derivative products (Level 2 inputs) was an asset of $1.0 million and a liability of $0.2 million as of September 30, 2023 and December 31, 2022, respectively. 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 September 30, 2023 and December 31, 2022 was $648.8 million and $630.8 million, respectively. The fair value of the long-term debt at September 30, 2023 and December 31, 2022 was $639.5 million and $622.2 million, respectively.

7. Segment Information

The Company evaluates performance based on operating income before share-based compensation, interest expense, and income taxes (segment operating income). Total revenue and segment operating income by business segment and geographic region include both sales to customers, as reported in the Company’s Consolidated Statements of Earnings, and intersegment sales, which are accounted for at prices that approximate market prices and are eliminated in consolidation.

7

The Company determines its operating segments based on information utilized by its chief operating decision maker to allocate resources and assess performance. The Company’s three reportable segments are the Flavors & Extracts and Color segments, which are both managed on a product line basis, and the Asia Pacific segment, which is managed on a geographic basis. The Company’s Flavors & Extracts segment produces flavor, extracts, and essential oils products that impart a desired taste, texture, aroma, or other characteristics to a broad range of consumer and other products. The Color segment produces natural and synthetic color systems for use in foods, beverages, pharmaceuticals, and nutraceuticals; colors and other ingredients for personal care, such as active ingredients, solubilizers, and surface treated pigments; pharmaceutical and nutraceutical excipients, such as colors, flavors, coatings, and nutraceutical ingredients; and technical colors for industrial applications. The Asia Pacific segment is managed on a geographic basis and produces and distributes color, flavor, and essential oils products in the Asia Pacific countries. The Company’s corporate expenses and share-based compensation are included in the “Corporate & Other” category.

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

(In thousands)	Flavors & Extracts		Color		Asia Pacific		Corporate & Other			Consolidated
Three months ended September 30, 2023:
Revenue from external customers	$	185,029	$	142,026	$	36,774	$	-		$	363,829
Intersegment revenue		5,968		2,913		-		-			8,881
Total revenue	$	190,997	$	144,939	$	36,774	$	-		$	372,710
Operating income (loss)	$	23,078	$	22,925	$	8,095	$	(9,567	)	$	44,531
Interest expense		-		-		-		6,294			6,294
Earnings (loss) before income taxes	$	23,078	$	22,925	$	8,095	$	(15,861	)	$	38,237
Three months ended September 30, 2022:
Revenue from external customers	$	181,397	$	144,570	$	35,109	$	-		$	361,076
Intersegment revenue		5,649		6,899		112		-			12,660
Total revenue	$	187,046	$	151,469	$	35,221	$	-		$	373,736
Operating income (loss)	$	26,337	$	28,200	$	6,952	$	(13,996	)	$	47,493
Interest expense		-		-		-		3,672			3,672
Earnings (loss) before income taxes	$	26,337	$	28,200	$	6,952	$	(17,668	)	$	43,821

(In thousands)	Flavors & Extracts		Color		Asia Pacific		Corporate & Other			Consolidated
Nine months ended September 30, 2023:
Revenue from external customers	$	538,753	$	455,507	$	112,888	$	-		$	1,107,148
Intersegment revenue		19,380		11,056		-		-			30,436
Total revenue	$	558,133	$	466,563	$	112,888	$	-		$	1,137,584
Operating income (loss)	$	69,714	$	84,027	$	24,911	$	(31,692	)	$	146,960
Interest expense		-		-		-		18,648			18,648
Earnings (loss) before income taxes	$	69,714	$	84,027	$	24,911	$	(50,340	)	$	128,312
Nine months ended September 30, 2022:
Revenue from external customers	$	539,014	$	440,568	$	108,721	$	-		$	1,088,303
Intersegment revenue		20,096		15,607		293		-			35,996
Total revenue	$	559,110	$	456,175	$	109,014	$	-		$	1,124,299
Operating income (loss)	$	83,929	$	90,035	$	22,877	$	(41,315	)	$	155,526
Interest expense		-		-		-		9,748			9,748
Earnings (loss) before income taxes	$	83,929	$	90,035	$	22,877	$	(51,063	)	$	145,778

8

Product Lines

(In thousands)	Flavors & Extracts			Color			Asia Pacific			Consolidated
Three months ended September 30, 2023:
Flavors, Extracts & Flavor Ingredients	$	124,697		$	-		$	-		$	124,697
Natural Ingredients		66,300			-			-			66,300
Food & Pharmaceutical Colors		-			107,723			-			107,723
Personal Care		-			37,216			-			37,216
Asia Pacific		-			-			36,774			36,774
Intersegment Revenue		(5,968	)		(2,913	)		-			(8,881	)
Total revenue from external customers	$	185,029		$	142,026		$	36,774		$	363,829
Three months ended September 30, 2022:
Flavors, Extracts & Flavor Ingredients	$	123,945		$	-		$	-		$	123,945
Natural Ingredients		63,101			-			-			63,101
Food & Pharmaceutical Colors		-			111,194			-			111,194
Personal Care		-			39,689			-			39,689
Inks		-			586			-			586
Asia Pacific		-			-			35,221			35,221
Intersegment Revenue		(5,649	)		(6,899	)		(112	)		(12,660	)
Total revenue from external customers	$	181,397		$	144,570		$	35,109		$	361,076

(In thousands)	Flavors & Extracts			Color			Asia Pacific			Consolidated
Nine months ended September 30, 2023:
Flavors, Extracts & Flavor Ingredients	$	383,210		$	-		$	-		$	383,210
Natural Ingredients		174,923			-			-			174,923
Food & Pharmaceutical Colors		-			346,635			-			346,635
Personal Care		-			119,928			-			119,928
Asia Pacific		-			-			112,888			112,888
Intersegment Revenue		(19,380	)		(11,056	)		-			(30,436	)
Total revenue from external customers	$	538,753		$	455,507		$	112,888		$	1,107,148
Nine months ended September 30, 2022:
Flavors, Extracts & Flavor Ingredients	$	381,041		$	-		$	-		$	381,041
Natural Ingredients		178,069			-			-			178,069
Food & Pharmaceutical Colors		-			328,087			-			328,087
Personal Care		-			126,651			-			126,651
Inks		-			1,437			-			1,437
Asia Pacific		-			-			109,014			109,014
Intersegment Revenue		(20,096	)		(15,607	)		(293	)		(35,996	)
Total revenue from external customers	$	539,014		$	440,568		$	108,721		$	1,088,303

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Geographic Markets

(In thousands)	Flavors & Extracts		Color		Asia Pacific		Consolidated
Three months ended September 30, 2023:
North America	$	147,992	$	75,417	$	-	$	223,409
Europe		25,298		36,816		57		62,171
Asia Pacific		4,881		13,344		35,791		54,016
Other		6,858		16,449		926		24,233
Total revenue from external customers	$	185,029	$	142,026	$	36,774	$	363,829
Three months ended September 30, 2022:
North America	$	142,097	$	74,220	$	27	$	216,344
Europe		26,795		34,591		44		61,430
Asia Pacific		7,091		16,770		34,433		58,294
Other		5,414		18,989		605		25,008
Total revenue from external customers	$	181,397	$	144,570	$	35,109	$	361,076

(In thousands)	Flavors & Extracts		Color		Asia Pacific		Consolidated
Nine months ended September 30, 2023:
North America	$	417,095	$	231,348	$	124	$	648,567
Europe		86,092		124,465		184		210,741
Asia Pacific		16,372		47,801		110,380		174,553
Other		19,194		51,893		2,200		73,287
Total revenue from external customers	$	538,753	$	455,507	$	112,888	$	1,107,148
Nine months ended September 30, 2022:
North America	$	407,684	$	223,508	$	87	$	631,279
Europe		90,565		116,184		175		206,924
Asia Pacific		23,628		49,199		105,222		178,049
Other		17,137		51,677		3,237		72,051
Total revenue from external customers	$	539,014	$	440,568	$	108,721	$	1,088,303

8. 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 September 30,						Nine Months Ended September 30,
(In thousands)	2023			2022			2023			2022
Service cost	$	372		$	404		$	1,111		$	1,219
Interest cost		415			235			1,237			719
Expected return on plan assets		(248	)		(194	)		(732	)		(598	)
Recognized actuarial loss		(138	)		12			(415	)		36
Total defined benefit expense	$	401		$	457		$	1,201		$	1,376

The Company’s non-service cost portion of defined benefit expense is recorded in Interest Expense on the Company’s Consolidated Statements of Earnings. The Company’s service cost portion of defined benefit expense is recorded in Selling and Administrative Expenses on the Company’s Consolidated Statements of Earnings.

9. 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 in order to reduce 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 generally have maturities of less than 18 months. The Company’s primary hedging activities and their accounting treatment are summarized below.

Forward exchange contracts – Certain forward exchange contracts have been designated as cash flow hedges. The Company had $16.1 million and $70.1 million of forward exchange contracts designated as cash flow hedges outstanding as of September 30, 2023 and December 31, 2022, respectively. For the three months ended September 30, 2023, gains of $0.8 million were reclassified into net earnings in the Company’s Consolidated Statement of Earnings that offset the underlying transactions’ impact on earnings in the same period. For the three months ended September 30, 2022, amounts reclassified into net earnings in the Company’s Consolidated Statement of Earnings that offset the underlying transactions’ impact on earnings in the same period were not material. For the nine months ended September 30, 2023 and 2022, gains of $1.4 million and $0.6 million, respectively, were reclassified into net earnings in the Company’s Consolidated Statement of Earnings that offset the underlying transactions’ impact on earnings in the same period. In addition, the Company utilizes forward exchange contracts that are not designated as cash flow hedges. The results of these transactions were not material to the financial statements of the Company.

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Net investment hedges – The Company has designated certain foreign currency denominated long-term borrowings as partial hedges of the Company’s foreign currency net asset positions. As of September 30, 2023 and December 31, 2022, the total value of the Company’s net investment hedges was $328.8 million and $315.5 million, respectively. These net investment hedges included Euro and British Pound denominated long-term debt. 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). For the three months ended September 30, 2023 and 2022, the impact of foreign exchange rates on these debt instruments decreased debt by $11.0 million and $18.4 million, respectively, which has been recorded as foreign currency translation in OCI. For the nine months ended September 30, 2023 and 2022, the impact of foreign exchange rates on these debt instruments decreased debt by $2.8 million and $42.4 million, respectively, which has been recorded as foreign currency translation in OCI.

10. Income Taxes

The effective income tax rates for the three months ended September 30, 2023 and 2022, were 17.5% and 17.7%, respectively. For the nine months ended September 30, 2023 and 2022, the effective income tax rates were 22.7% and 23.3%, respectively. The effective tax rates for the three and nine months ended September 30, 2023 and 2022, were impacted by changes in estimates associated with changes in valuation allowances, the finalization of prior year foreign tax items, and the mix of foreign earnings.

11. Accumulated Other Comprehensive Income

The following table summarizes the changes in OCI during the three and nine month periods ended September 30, 2023 and 2022:

(In thousands)	Cash Flow Hedges (1)			Pension Items (1)			Foreign Currency Items			Total
Balances at December 31, 2022	$	(599	)	$	(1,792	)	$	(198,297	)	$	(200,688	)
Other comprehensive income before reclassifications		2,974			-			8,977			11,951
Amounts reclassified from OCI		(1,432	)		(366	)		-			(1,798	)
Balances at September 30, 2023	$	943		$	(2,158	)	$	(189,320	)	$	(190,535	)

(In thousands)	Cash Flow Hedges (1)			Pension Items (1)			Foreign Currency Items			Total
Balances at June 30, 2023	$	1,997		$	(2,036	)	$	(177,182	)	$	(177,221	)
Other comprehensive loss before reclassifications		(239	)		-			(12,138	)		(12,377	)
Amounts reclassified from OCI		(815	)		(122	)		-			(937	)
Balances at September 30, 2023	$	943		$	(2,158	)	$	(189,320	)	$	(190,535	)

(In thousands)	Cash Flow Hedges (1)			Pension Items (1)			Foreign Currency Items			Total
Balances at December 31, 2021	$	206		$	(353	)	$	(174,481	)	$	(174,628	)
Other comprehensive income (loss) before reclassifications		516			-			(55,514	)		(54,998	)
Amounts reclassified from OCI		(621	)		24			-			(597	)
Balances at September 30, 2022	$	101		$	(329	)	$	(229,995	)	$	(230,223	)

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(In thousands)	Cash Flow Hedges (1)			Pension Items (1)			Foreign Currency Items			Total
Balances at June 30, 2022	$	(152	)	$	(337	)	$	(202,683	)	$	(203,172	)
Other comprehensive income (loss) before reclassifications		380			-			(27,312	)		(26,932	)
Amounts reclassified from OCI		(127	)		8			-			(119	)
Balances at September 30, 2022	$	101		$	(329	)	$	(229,995	)	$	(230,223	)

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

12. Commitments and Contingencies

The Company is subject to various claims and litigation arising in the normal course of business. The Company establishes reserves for claims and proceedings when it is probable that liabilities exist and reasonable estimates of loss can be made. While it is not possible to predict the outcome of these matters, based on our assessment of the facts and circumstances now known, we do not believe that these matters, individually or in the aggregate, will have a material adverse effect on our financial position. However, actual outcomes may be different from those expected and could have a material effect on our results of operations or cash flows in a particular period.

13. Subsequent Events

On October 19, 2023, the Company announced its quarterly dividend of $0.41 per share would be payable on December 1, 2023.

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

FORWARD-LOOKING STATEMENTS

This report 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 September 30, 2023, 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 the forward-looking 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, among others, the Company’s ability to manage economic and capital 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; the availability and cost of labor, logistics, and transportation; the impact and uncertainty created by the COVID-19 pandemic and efforts to manage it on the global economy, including, but not limited to, its effects on our employees, facilities, customers, and suppliers, governmental regulations and restrictions, and general economic conditions; the uncertain impacts of the ongoing conflict between Russia and Ukraine on our supply chain, input costs, including energy and transportation, and on general economic conditions; 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 and changing technologies; 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 operational improvement plan; industry, regulatory, legal, and economic factors related to the Company’s domestic and international business; the effects of tariffs, trade barriers, and disputes; growth in markets for products in which the Company competes; industry and customer acceptance of price increases; actions by competitors; currency exchange rate fluctuations; and the matters discussed under Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. Except to the extent required by applicable law, 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.

OVERVIEW

Revenue

Revenue was $363.8 million and $361.1 million for the three months ended September 30, 2023 and 2022, respectively. The increase in revenue for the three months ended September 30, 2023, was primarily due to increased pricing, offset by lower volumes. Revenue was $1.1 billion for both the nine months ended September 30, 2023 and 2022. Revenue for the nine months ended September 30, 2023, compared to the nine months ended September 30, 2022, was impacted by higher prices, partially offset by lower volumes. For the three and nine months ended September 30, 2023, the impact of foreign exchange rates increased consolidated revenue by approximately 3% and 1%, respectively.

Gross Margin

The Company’s gross margin was 31.2% and 33.7% for the three months ended September 30, 2023 and 2022, respectively. The Company’s gross margin was 32.6% and 34.7% for the nine months ended September 30, 2023 and 2022, respectively. The decrease in gross margin for both the three and nine months ended September 30, 2023, was primarily due to the lower volumes, higher input costs, and unfavorable product mix, partially offset by higher prices.

Selling and Administrative Expenses

Selling and administrative expense as a percent of revenue was 19.0% and 20.6% for the three months ended September 30, 2023 and 2022, respectively. Selling and administrative expense as a percent of revenue was 19.3% and 20.4% for the nine months ended September 30, 2023 and 2022, respectively. The decrease in selling and administrative expense as a percent of revenue for the three and nine months ended September 30, 2023, was primarily due to lower performance-based compensation expense in 2023.

Operating Income

Operating income was $44.5 million and $47.5 million for the three months ended September 30, 2023 and 2022, respectively. Operating margins were 12.2% and 13.2% for the three months ended September 30, 2023 and 2022, respectively. The decreases in operating income and operating margin were primarily due to lower volumes, higher input costs, and unfavorable product mix, partially offset by higher pricing and lower performance-based compensation expense in 2023.

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Operating income was $147.0 million and $155.5 million for the nine months ended September 30, 2023 and 2022, respectively. Operating margins were 13.3% and 14.3% for the nine months ended September 30, 2023 and 2022, respectively. The decreases in operating income and operating margin were primarily due to higher input costs, lower volumes, and unfavorable product mix, partially offset by higher pricing and lower performance-based compensation expense in 2023.

Interest Expense

Interest expense was $6.3 million and $3.7 million for the three months ended September 30, 2023 and 2022, respectively, and $18.6 million and $9.7 million for the nine months ended September 30, 2023 and 2022, respectively. The increase in interest expense for the three and nine months ended September 30, 2023, was primarily due to an increase in the average interest rate and average debt outstanding.

Income Taxes

The effective income tax rates for the three months ended September 30, 2023 and 2022, were 17.5% and 17.7%, respectively. The effective income tax rates for the nine months ended September 30, 2023 and 2022, were 22.7% and 23.3%, respectively. The effective tax rates for the three and nine months ended September 30, 2023 and 2022, were impacted by changes in estimates associated with changes in valuation allowances, the finalization of prior year foreign tax items, and the mix of foreign earnings.

Acquisition

On October 3, 2022, the Company acquired Endemix Doğal Maddeler A.Ş. and Teknoloji Yatırımları ve Danışmanlık Sanayi ve Ticaret A.Ş. (collectively, Endemix), a natural colors business located in Turkey. The Company paid $23.3 million in cash for this acquisition, which is net of $1.3 million in debt assumed, with $1.7 million of such amount being held back by the Company for 12 months to satisfy any indemnification claims that may arise. This business is part of the Color segment.

NON-GAAP FINANCIAL MEASURES

Within the following table, the Company reports certain non-GAAP financial measures, including percentage changes in revenue, operating income, and diluted earnings per share on a local currency basis, which eliminate the effects that result from translating its international operations into U.S. dollars.

The Company has included each of these non-GAAP measures in order to provide additional information regarding our underlying operating results and comparable year-over-year 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 report. 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 the Company believes 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.

The following table summarizes the percentage change for the results of the three and nine months ended September 30, 2023, compared to the results for the three and nine months ended September 30, 2022, in the respective financial measures.

	Three Months Ended September 30, 2023									Nine Months Ended September 30, 2023
Revenue	Total			Foreign Exchange Rates			Adjusted Local Currency			Total			Foreign Exchange Rates			Adjusted Local Currency
Flavors & Extracts		2.1	%		2.6	%		(0.5	%)		(0.2	%)		0.9	%		(1.1	%)
Color		(4.3	%)		3.9	%		(8.2	%)		2.3	%		1.2	%		1.1	%
Asia Pacific		4.4	%		0.1	%		4.3	%		3.6	%		(2.5	%)		6.1	%
Total Revenue		0.8	%		2.8	%		(2.0	%)		1.7	%		0.7	%		1.0	%
Operating Income
Flavors & Extracts		(12.4	%)		1.2	%		(13.6	%)		(16.9	%)		0.6	%		(17.5	%)
Color		(18.7	%)		4.7	%		(23.4	%)		(6.7	%)		1.1	%		(7.8	%)
Asia Pacific		16.4	%		0.6	%		15.8	%		8.9	%		(2.7	%)		11.6	%
Corporate & Other		(31.6	%)		0.0	%		(31.6	%)		(23.3	%)		0.0	%		(23.3	%)
Total Operating Income		(6.2	%)		3.6	%		(9.8	%)		(5.5	%)		0.6	%		(6.1	%)
Diluted Earnings per Share		(11.8	%)		3.5	%		(15.3	%)		(11.3	)%		0.4	%		(11.7	%)

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SEGMENT INFORMATION

The Company determines its operating segments based on information utilized by its chief operating decision maker to allocate resources and assess performance. Segment performance is evaluated on operating income before share-based compensation and other costs (which are reported in Corporate & Other), interest expense, and income taxes.

The Company’s reportable segments consist of the Flavors & Extracts, Color, and Asia Pacific segments.

Flavors & Extracts

Flavors & Extracts segment revenue was $191.0 million and $187.0 million for the three months ended September 30, 2023 and 2022, respectively, an increase of approximately 2%. The increase was primarily a result of higher revenue in Natural Ingredients due to higher selling prices and volumes. Foreign exchange rates increased segment revenue by approximately 3%.

Flavors & Extracts segment revenue was $558.1 million and $559.1 million for the nine months ended September 30, 2023 and 2022, respectively. The decrease was primarily a result of lower revenue in Natural Ingredients, partially offset by higher revenue in Flavors, Extracts & Flavor Ingredients. The lower revenue in Natural Ingredients was primarily due to lower volumes, partially offset by higher selling prices. The higher revenue in Flavors, Extracts & Flavor Ingredients was primarily due to higher selling prices and the favorable impact of foreign exchange rates that increased segment revenue by approximately 1%, partially offset by lower volumes.

Flavors & Extracts segment operating income was $23.1 million and $26.3 million for the three months ended September 30, 2023 and 2022, respectively, a decrease of approximately 12%. The decrease was primarily a result of lower segment operating income in Natural Ingredients and Flavors, Extracts & Flavor Ingredients. The lower segment operating income in Natural Ingredients was primarily a result of higher raw material costs and an unfavorable product mix, partially offset by higher selling prices. The lower segment operating income in Flavors, Extracts & Flavor Ingredients was primarily a result of higher raw material costs, lower volumes, and an unfavorable product mix, partially offset by higher selling prices. Foreign exchange rates increased segment operating income by approximately 1%. Segment operating income as a percent of revenue was 12.1% in the current quarter compared to 14.1% in the prior year’s comparable quarter.

Flavors & Extracts segment operating income was $69.7 million and $83.9 million for the nine months ended September 30, 2023 and 2022, respectively, a decrease of approximately 17%. The decrease was primarily a result of lower segment operating income in Natural Ingredients and Flavors, Extracts & Flavor Ingredients. The lower segment operating income in Natural Ingredients was primarily a result of higher raw material costs, lower volumes, and an unfavorable product mix, partially offset by higher selling prices and lower manufacturing and other costs. The lower segment operating income in Flavors, Extracts & Flavor Ingredients was primarily a result of higher raw material and manufacturing and other costs and lower volumes, partially offset by higher selling prices. Foreign exchange rates increased segment operating income by approximately 1%. Segment operating income as a percent of revenue was 12.5% in the current nine month period compared to 15.0% in the prior year’s comparable nine month period.

Color

Color segment revenue was $144.9 million and $151.5 million for the three months ended September 30, 2023 and 2022, respectively, a decrease of approximately 4%. The decrease was a result of lower revenue in Food & Pharmaceutical Colors and Personal Care due to lower volumes, partially offset by higher selling prices and the favorable impact of foreign exchange rates that increased segment revenue by approximately 4%.  The lower volumes in Food & Pharmaceutical Colors were also partially offset by the favorable impact of the acquisition of Endemix in October 2022.

Color segment revenue was $466.6 million and $456.2 million for the nine months ended September 30, 2023 and 2022, respectively, an increase of approximately 2%. The increase was a result of higher revenue in Food & Pharmaceutical Colors, partially offset by lower revenue in Personal Care.  The higher revenue in Food & Pharmaceutical Colors was primarily due to higher selling prices, the acquisition of Endemix in October 2022, and the favorable impact of foreign exchange rates that increased segment revenue by approximately 1%, partially offset by lower volumes.  The lower revenue in Personal Care was primarily due to lower volumes, partially offset by higher selling prices.

15

Segment operating income for the Color segment was $22.9 million and $28.2 million for the three months ended September 30, 2023 and 2022, respectively, a decrease of approximately 19%. The decrease in segment operating income was a result of lower operating income in Food & Pharmaceutical Colors and Personal Care. The lower operating income in Food & Pharmaceutical Colors was due to higher raw material costs and lower volumes, partially offset by higher selling prices and lower manufacturing and other costs. The lower operating income in Personal Care was due to higher raw material and manufacturing and other costs and lower volumes, partially offset by higher selling prices. Foreign exchange rates increased segment operating income by approximately 5%. Segment operating income as a percent of revenue was 15.8% in the current quarter and 18.6% in the prior year’s comparable quarter.

Segment operating income for the Color segment was $84.0 million and $90.0 million for the nine months ended September 30, 2023 and 2022, respectively, a decrease of approximately 7%. The decrease in segment operating income was a result of lower operating income in Personal Care, partially offset by higher operating income in Food & Pharmaceutical Colors.  The lower operating income in Personal Care was primarily due to higher raw material and manufacturing and other costs and lower volumes, partially offset by higher selling prices. The higher operating income in Food & Pharmaceutical Colors was primarily due to higher selling prices, partially offset by higher raw material costs, lower volumes, and an unfavorable product mix. Foreign exchange rates increased segment operating income by approximately 1%. Segment operating income as a percent of revenue was 18.0% in the current nine month period and 19.7% in the prior year’s comparable period.

Asia Pacific

Segment revenue for the Asia Pacific segment was $36.8 million and $35.2 million for the three months ended September 30, 2023 and 2022, respectively, an increase of approximately 4%. The increase was primarily a result of higher selling prices. Foreign exchange rates had an immaterial impact on segment revenue for the three months ended September 30, 2023.

Segment revenue for the Asia Pacific segment was $112.9 million and $109.0 million for the nine months ended September 30, 2023 and 2022, respectively, an increase of approximately 4%. The increase was primarily a result of higher selling prices, partially offset by the unfavorable impact of foreign exchange rates, which decreased segment revenue by approximately 3%.

Segment operating income for the Asia Pacific segment was $8.1 million and $7.0 million for the three months ended September 30, 2023 and 2022, respectively, an increase of approximately 16%. The increase was primarily a result of higher selling prices and the favorable impact of foreign exchange rates that increased segment operating income by approximately 1%, partially offset by higher raw material costs. Segment operating income as a percent of revenue was 22.0% in the current quarter and 19.7% in the prior year’s comparable quarter.

Segment operating income for the Asia Pacific segment was $24.9 million and $22.9 million for the nine months ended September 30, 2023 and 2022, respectively, an increase of approximately 9%. The increase was primarily a result of higher selling prices, partially offset by higher raw material costs and the unfavorable impact of foreign exchange rates that decreased segment operating income by approximately 3%. Segment operating income as a percent of revenue was 22.1% in the current nine month period and 21.0% in the prior year’s comparable period.

Corporate & Other

The Corporate & Other operating expense was $9.6 million and $14.0 million for the three months ended September 30, 2023 and 2022, respectively. The Corporate & Other operating expense was $31.7 million and $41.3 million for the nine months ended September 30, 2023 and 2022, respectively. The lower operating expense for both the three and nine months ended September 30, 2023, was primarily due to lower performance-based compensation expense in 2023.

LIQUIDITY AND FINANCIAL CONDITION

Financial Condition

The Company’s financial position remains strong. The Company is in compliance with its loan covenants calculated in accordance with applicable agreements as of September 30, 2023. The Company expects its cash flow from operations and its existing debt capacity can be used to meet anticipated future cash requirements for operations, capital expenditures, and dividend payments, as well as potential acquisitions and stock repurchases. The Company’s contractual obligations consist primarily of operational commitments, which we expect to continue to be able to satisfy through cash generated from operations and debt. The Company has various series of notes outstanding that mature from 2023 through 2028. The Company believes that it has the ability to refinance or repay these obligations through a combination of cash flow from operations, issuance of additional notes, and sufficient borrowing capacity under the Company’s revolving credit facility, which matures in 2026.

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As a result of our ability to manage the impact of inflation through pricing and other actions, the impact of inflation was not material to the Company’s financial position and its results of operations for the three or nine months ended September 30, 2023. The Company continues to experience elevated costs for certain inputs, such as labor, raw materials, energy, and certain agricultural costs. We continue to expect to manage these impacts in the near term, but persistent, accelerated, or expanded inflationary conditions could exacerbate these challenges and impact our profitability.

Cash Flows from Operating Activities

Net cash provided by operating activities was $106.8 million and $14.9 million for the nine months ended September 30, 2023 and 2022, respectively. The increase in net cash from operating activities was primarily due to a decrease in cash used for inventory investments during 2023 compared to 2022 and an increase in cash provided by accounts receivable.

Cash Flows from Investing Activities

Net cash used in investing activities was $65.6 million and $51.7 million during the nine months ended September 30, 2023 and 2022, respectively. During the nine months ended September 30, 2022, the Company paid $1.0 million related to the acquisition of Flavors Solutions, Inc.  Capital expenditures were $67.7 million and $51.7 million during the nine months ended September 30, 2023 and 2022, respectively.

Cash Flows from Financing Activities

Net cash used in financing activities was $36.4 million for the nine months ended September 30, 2023, and net cash provided by financing activities was $46.3 million for the nine months ended September 30, 2022. Net debt increased by $23.5 million and $100.1 million for the nine months ended September 30, 2023 and 2022, respectively. The cash proceeds from the increase in net debt in the current period were primarily used to support capital expenditure investments during the nine months ended September 30, 2023. For purposes of the cash flow statement, net changes in debt exclude the impact of foreign exchange rates. Dividends of $51.9 million and $51.7 million were paid during the nine months ended September 30, 2023 and 2022, respectively. Dividends paid were $1.23 per share for both the nine months ended September 30, 2023 and 2022.

CRITICAL ACCOUNTING POLICIES

There have been no material changes in the Company’s critical accounting policies during the quarter ended September 30, 2023. For additional information about the Company’s critical accounting policies, refer to “Critical Accounting Policies” under Item 7 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes in the Company’s exposure to market risk during the quarter ended September 30, 2023. For additional information about market risk, refer to Part II, Item 7A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.

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 Chairman, 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 Chairman, 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.

Changes in Internal Control over Financial Reporting: There have been no changes in the Company’s internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) during the quarter ended September 30, 2023, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

17

PART II.     OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

See Part I, Item 1, Note 12, Commitments and Contingencies, of this report for information regarding legal proceedings in which the Company is involved.

ITEM 1A. RISK FACTORS

There were no material changes to the risk factors previously disclosed in Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.

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

On October 19, 2017, the Board of Directors authorized the repurchase of up to three million shares (2017 Authorization). As of September 30, 2023, 1,267,019 shares had been repurchased under the 2017 Authorization. There is no expiration date for the 2017 Authorization. The 2017 Authorization may be modified, suspended, or discontinued by the Board of Directors at any time. As of September 30, 2023, the maximum number of shares that may be purchased under publicly announced plans is 1,732,981. No shares were purchased by the Company during the three or nine months ended September 30, 2023.

ITEM 5. OTHER INFORMATION

During the three months ended September 30, 2023, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

ITEM 6. EXHIBITS

See Exhibit Index following this report.

18

SENSIENT TECHNOLOGIES CORPORATION

EXHIBIT INDEX

QUARTERLY REPORT ON FORM 10-Q

FOR THE QUARTER ENDED SEPTEMBER 30, 2023

Exhibit	Description	Incorporated by Reference From	Filed Herewith
10.1	Amendment No. 10 to Receivables Purchase Agreement, dated as of August 31, 2023, among Sensient Receivables LLC, Sensient Technologies Corporation, and Wells Fargo Bank, National Association.	Exhibit 10.1 to Current Report on Form 8-K filed September 6, 2023 (Commission File No. 1-7626)
31	Certifications of the Company’s Chairman, 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 Chairman, President & Chief Executive Officer and Senior Vice President & Chief Financial Officer pursuant to 18 United States Code § 1350		X
101.INS	Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)		X
101.SCH	Inline XBRL Taxonomy Extension Schema Document		X
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document		X
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document		X

101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document	X
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document	X
104	Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)	X

19

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:	November 7, 2023	By:	/s/  John J. Manning
			John J. Manning, Senior Vice President, General Counsel & Secretary
Date:	November 7, 2023	By:	/s/  Stephen J. Rolfs
			Stephen J. Rolfs, Senior Vice President & Chief Financial Officer

20

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 control 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:     November 7, 2023

 /s/ Paul Manning

Paul Manning, Chairman, President &

Chief Executive Officer

EXHIBIT 31

CERTIFICATION

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

I, Stephen J. Rolfs, 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 control 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:     November 7, 2023

 /s/ Stephen J. Rolfs

Stephen J. Rolfs, 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 September 30, 2023, 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:	Chairman, President & Chief Executive Officer
Date:	November 7, 2023

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 September 30, 2023, 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/ Stephen J. Rolfs
Name:	Stephen J. Rolfs
Title:	Senior Vice President & Chief Financial Officer
Date:	November 7, 2023

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.

XML

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2023	Oct. 31, 2023
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2023
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q3
Document Transition Report	false
Entity File Number	001-07626
Entity Registrant Name	Sensient Technologies Corp
Entity Central Index Key	0000310142
Entity Incorporation, State or Country Code	WI
Entity Tax Identification Number	39-0561070
Entity Address, Address Line One	777 EAST WISCONSIN AVENUE
Entity Address, City or Town	MILWAUKEE
Entity Address, State or Province	WI
Entity Address, Postal Zip Code	53202-5304
City Area Code	414
Local Phone Number	271-6755
Title of 12(b) Security	Common stock, par value $0.10 per share
Trading Symbol	SXT
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		42,249,509

XML

CONSOLIDATED STATEMENTS OF EARNINGS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
CONSOLIDATED STATEMENTS OF EARNINGS [Abstract]
Revenue	$ 363,829	$ 361,076	$ 1,107,148	$ 1,088,303
Cost of products sold	250,202	239,318	746,681	710,696
Selling and administrative expenses	69,096	74,265	213,507	222,081
Operating income	44,531	47,493	146,960	155,526
Interest expense	6,294	3,672	18,648	9,748
Earnings before income taxes	38,237	43,821	128,312	145,778
Income taxes	6,694	7,773	29,085	34,012
Net earnings	$ 31,543	$ 36,048	$ 99,227	$ 111,766
Weighted average number of common shares outstanding:
Basic (in shares)	42,045	41,896	42,020	41,885
Diluted (in shares)	42,233	42,242	42,241	42,199
Earnings per common share:
Basic (in dollars per share)	$ 0.75	$ 0.86	$ 2.36	$ 2.67
Diluted (in dollars per share)	0.75	0.85	2.35	2.65
Dividends declared per common share (in dollars per share)	$ 0.41	$ 0.41	$ 1.23	$ 1.23

XML

CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME [Abstract]
Comprehensive income	$ 18,229	$ 8,997	$ 109,380	$ 56,171

XML

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Current Assets:
Cash and cash equivalents	$ 31,985	$ 20,921
Trade accounts receivable	284,668	302,109
Inventories	587,024	564,110
Prepaid expenses and other current assets	41,477	47,640
Total current assets	945,154	934,780
Other assets	94,646	96,609
Deferred tax assets	30,857	32,717
Intangible assets, net	17,352	18,600
Goodwill	415,618	415,715
Property, Plant, and Equipment:
Land	31,269	31,444
Buildings	336,152	322,268
Machinery and equipment	759,191	722,294
Construction in progress	71,223	65,809
Property, plant, and equipment, gross	1,197,835	1,141,815
Less accumulated depreciation	(691,286)	(658,622)
Property, plant, and equipment, net	506,549	483,193
Total assets	2,010,176	1,981,614
Current Liabilities:
Trade accounts payable	110,973	142,365
Accrued salaries, wages, and withholdings from employees	26,818	43,738
Other accrued expenses	55,676	51,231
Income taxes	7,543	14,446
Short-term borrowings	22,807	20,373
Total current liabilities	223,817	272,153
Deferred tax liabilities	16,202	15,977
Other liabilities	37,115	37,191
Accrued employee and retiree benefits	26,830	26,364
Long-term debt	648,556	630,331
Shareholders' Equity:
Common stock	5,396	5,396
Additional paid-in capital	116,775	124,043
Earnings reinvested in the business	1,750,027	1,702,700
Treasury stock, at cost	(624,007)	(631,853)
Accumulated other comprehensive loss	(190,535)	(200,688)
Total shareholders' equity	1,057,656	999,598
Total liabilities and shareholders' equity	$ 2,010,176	$ 1,981,614

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Cash flows from operating activities:
Net earnings	$ 99,227	$ 111,766
Adjustments to arrive at net cash provided by operating activities:
Depreciation and amortization	43,360	39,262
Share-based compensation expense	7,285	12,476
Net (gain) loss on assets	(81)	283
Deferred income taxes	2,082	20,465
Changes in operating assets and liabilities:
Trade accounts receivable	18,830	(39,520)
Inventories	(21,455)	(112,021)
Prepaid expenses and other assets	842	(39,598)
Accounts payable and other accrued expenses	(20,572)	24,110
Accrued salaries, wages, and withholdings from employees	(16,749)	1,819
Income taxes	(6,536)	(4,342)
Other liabilities	587	198
Net cash provided by operating activities	106,820	14,898
Cash Flows from Investing Activities:
Acquisition of property, plant, and equipment	(67,718)	(51,703)
Proceeds from sale of assets	130	94
Acquisition of new business	0	(1,048)
Other investing activities	2,036	947
Net cash used in investing activities	(65,552)	(51,710)
Cash flows from financing activities:
Proceeds from additional borrowings	197,577	187,715
Debt payments	(174,083)	(87,657)
Dividends paid	(51,900)	(51,681)
Other financing activities	(8,034)	(2,056)
Net cash (used in) provided by financing activities	(36,440)	46,321
Effect of exchange rate changes on cash and cash equivalents	6,236	11,330
Net increase in cash and cash equivalents	11,064	20,839
Cash and cash equivalents at beginning of period	20,921	25,740
Cash and cash equivalents at end of period	$ 31,985	$ 46,579

XML

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) $ in Thousands	Common Stock [Member]	Additional Paid-In Capital [Member]	Earnings Reinvested in the Business [Member]	Treasury Stock [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Total
Beginning balance at Dec. 31, 2021	$ 5,396	$ 111,352	$ 1,630,713	$ (634,408)	$ (174,628)	$ 938,425
Beginning balance (in shares) at Dec. 31, 2021				12,107,549
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net earnings	0	0	111,766	$ 0	0	111,766
Other comprehensive income (loss)	0	0	0	0	(55,595)	(55,595)
Cash dividends paid	0	0	(51,681)	0	0	(51,681)
Share-based compensation	0	12,476	0	0	0	12,476
Non-vested stock issued upon vesting	0	(3,239)	0	$ 3,239	0	0
Non-vested stock issued upon vesting (in shares)				(61,821)
Benefit plans	0	560	0	$ 618	0	1,178
Benefit plans (in shares)				(11,786)
Other	0	(768)	15	$ (1,302)	0	(2,055)
Other (in shares)				24,831
Ending balance at Sep. 30, 2022	5,396	120,381	1,690,813	$ (631,853)	(230,223)	954,514
Ending balance (in shares) at Sep. 30, 2022				12,058,773
Beginning balance at Jun. 30, 2022	5,396	116,596	1,672,000	$ (631,853)	(203,172)	958,967
Beginning balance (in shares) at Jun. 30, 2022				12,058,773
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net earnings	0	0	36,048	$ 0	0	36,048
Other comprehensive income (loss)	0	0	0	0	(27,051)	(27,051)
Cash dividends paid	0	0	(17,235)	0	0	(17,235)
Share-based compensation	0	3,785	0	0	0	3,785
Ending balance at Sep. 30, 2022	5,396	120,381	1,690,813	$ (631,853)	(230,223)	954,514
Ending balance (in shares) at Sep. 30, 2022				12,058,773
Beginning balance at Dec. 31, 2022	5,396	124,043	1,702,700	$ (631,853)	(200,688)	999,598
Beginning balance (in shares) at Dec. 31, 2022				12,058,773
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net earnings	0	0	99,227	$ 0	0	99,227
Other comprehensive income (loss)	0	0	0	0	10,153	10,153
Cash dividends paid	0	0	(51,900)	0	0	(51,900)
Share-based compensation	0	7,285	0	0	0	7,285
Non-vested stock issued upon vesting	0	(12,686)	0	$ 12,686	0	0
Non-vested stock issued upon vesting (in shares)				(242,110)
Benefit plans	0	375	0	$ 952	0	1,327
Benefit plans (in shares)				(18,172)
Other	0	(2,242)	0	$ (5,792)	0	(8,034)
Other (in shares)				110,549
Ending balance at Sep. 30, 2023	5,396	116,775	1,750,027	$ (624,007)	(190,535)	1,057,656
Ending balance (in shares) at Sep. 30, 2023				11,909,040
Beginning balance at Jun. 30, 2023	5,396	114,330	1,735,807	$ (624,048)	(177,221)	1,054,264
Beginning balance (in shares) at Jun. 30, 2023				11,909,833
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net earnings	0	0	31,543	$ 0	0	31,543
Other comprehensive income (loss)	0	0	0	0	(13,314)	(13,314)
Cash dividends paid	0	0	(17,323)	0	0	(17,323)
Share-based compensation	0	2,519	0	0	0	2,519
Non-vested stock issued upon vesting	0	(67)	0	$ 67	0	0
Non-vested stock issued upon vesting (in shares)				(1,285)
Other	0	(7)	0	$ (26)	0	(33)
Other (in shares)				492
Ending balance at Sep. 30, 2023	$ 5,396	$ 116,775	$ 1,750,027	$ (624,007)	$ (190,535)	$ 1,057,656
Ending balance (in shares) at Sep. 30, 2023				11,909,040

XML

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Parenthetical) - $ / shares	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY [Abstract]
Cash dividends per share (in dollars per share)	$ 0.41	$ 0.41	$ 1.23	$ 1.23

XML

Accounting Policies

9 Months Ended

Sep. 30, 2023

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) that are necessary to present fairly the financial position of the Company as of September 30, 2023, and the results of operations, comprehensive income, and shareholders’ equity for the three and nine months ended September 30, 2023 and 2022, and cash flows for the nine months ended September 30, 2023 and 2022. 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 period incurred.

Please refer to the notes in the Company’s annual consolidated financial statements for the year ended December 31, 2022, for additional details of the Company’s financial condition and a description of the Company’s accounting policies, which have been continued without change.

XML

Acquisition

9 Months Ended

Sep. 30, 2023

Acquisition [Abstract]

Acquisition

2. Acquisition

On October 3, 2022, the Company acquired Endemix Doğal Maddeler A.Ş. and Teknoloji Yatırımları ve Danışmanlık Sanayi ve Ticaret A.Ş. (collectively, Endemix), a natural colors business located in Turkey. The Company paid $23.3 million in cash for this acquisition, which is net of $1.3 million in debt assumed, with $1.7 million of such amount being held back by the Company for 12 months to satisfy any indemnification claims that may arise. The assets acquired and liabilities assumed were recorded at their estimated fair value as of the acquisition date. The Company acquired net assets of $8.9 million and identified intangible assets, principally technological know-how and customer relationships, of $4.9 million. The remaining $9.5 million was allocated to goodwill. This business is part of the Color segment.

XML

Trade Accounts Receivable

9 Months Ended

Sep. 30, 2023

Trade Accounts Receivable [Abstract]

Trade Accounts Receivable

3. Trade Accounts Receivable

Trade accounts receivables are recorded at their face amount, less an allowance for expected losses on doubtful accounts. The allowance for doubtful accounts is calculated based on customer-specific analysis and an aging methodology using historical loss information. The Company believes historical loss information is a reasonable basis for expected credit losses as the Company’s historical credit loss experience correlates with its customer delinquency status. This information is also adjusted for any known current economic conditions. Forecasted economic conditions have not had a significant impact on the current credit loss estimate due to the short-term nature of the Company’s customer receivables; however, the Company will continue to monitor and evaluate as economic conditions change. Additionally, as the Company only has one portfolio segment, there are not different risks between portfolios. Specific accounts are written off against the allowance for doubtful accounts when the receivable is deemed no longer collectible.

The following table summarizes the changes in the allowance for doubtful accounts during the three and nine month periods ended September 30, 2023 and 2022:

(In thousands) Three Months Ended September 30, 2023	Allowance for Doubtful Accounts
Balance at June 30, 2023	$	4,293
Provision for expected credit losses		13
Accounts written off		(244	)
Translation and other activity		(76	)
Balance at September 30, 2023	$	3,986

(In thousands) Three Months Ended September 30, 2022	Allowance for Doubtful Accounts
Balance at June 30, 2022	$	4,494
Provision for expected credit losses		51
Accounts written off		(33	)
Translation and other activity		(105	)
Balance at September 30, 2022	$	4,407

(In thousands) Nine Months Ended September 30, 2023	Allowance for Doubtful Accounts
Balance at December 31, 2022	$	4,436
Provision for expected credit losses		504
Accounts written off		(1,051	)
Translation and other activity		97
Balance at September 30, 2023	$	3,986

(In thousands) Nine Months Ended September 30, 2022	Allowance for Doubtful Accounts
Balance at December 31, 2021	$	4,877
Provision for expected credit losses		883
Accounts written off		(1,129	)
Translation and other activity		(224	)
Balance at September 30, 2022	$	4,407

XML

Inventories

9 Months Ended

Sep. 30, 2023

Inventories [Abstract]

Inventories

4. Inventories

At September 30, 2023, and December 31, 2022, inventories included finished and in-process products totaling $414.8 million and $385.2 million, respectively, and raw materials and supplies of $172.2 million and $178.9 million, respectively.

XML

Debt

9 Months Ended

Sep. 30, 2023

Debt [Abstract]

Debt

5. Debt

On May 31, 2023, the Company entered into an agreement to issue $75 million and €40 million in five-year, fixed-rate, senior notes at coupon rates of 4.94% and 4.15%, respectively. The notes were issued on May 31, 2023, and proceeds have been used to repay a portion of existing indebtedness under the Company’s Third Amended and Restated Credit Agreement, as amended. The notes will mature in May 2028.

On August 31, 2023, the Company entered into Amendment No. 10 (Amendment) to the Receivables Purchase Agreement, dated as of October 3, 2016.  The Amendment extended the termination date from August 31, 2023 to August 30, 2024.

XML

Fair Value

9 Months Ended

Sep. 30, 2023

Fair Value [Abstract]

Fair Value

6. Fair Value

Accounting Standards Codification 820, Fair Value Measurement, defines fair value for financial assets and liabilities, establishes a framework for measuring fair value in GAAP, and expands disclosures about fair value measurements. The carrying values of the Company’s cash and cash equivalents, trade accounts receivable, trade accounts payable, accrued expenses, and short-term borrowings were approximately the same as the fair values as of September 30, 2023 and December 31, 2022. The net fair value of the forward exchange contracts based on current pricing obtained for comparable derivative products (Level 2 inputs) was an asset of $1.0 million and a liability of $0.2 million as of September 30, 2023 and December 31, 2022, respectively. 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 September 30, 2023 and December 31, 2022 was $648.8 million and $630.8 million, respectively. The fair value of the long-term debt at September 30, 2023 and December 31, 2022 was $639.5 million and $622.2 million, respectively.

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Segment Information

9 Months Ended

Sep. 30, 2023

Segment Information [Abstract]

Segment Information

7. Segment Information

The Company evaluates performance based on operating income before share-based compensation, interest expense, and income taxes (segment operating income). Total revenue and segment operating income by business segment and geographic region include both sales to customers, as reported in the Company’s Consolidated Statements of Earnings, and intersegment sales, which are accounted for at prices that approximate market prices and are eliminated in consolidation.

The Company determines its operating segments based on information utilized by its chief operating decision maker to allocate resources and assess performance. The Company’s three reportable segments are the Flavors & Extracts and Color segments, which are both managed on a product line basis, and the Asia Pacific segment, which is managed on a geographic basis. The Company’s Flavors & Extracts segment produces flavor, extracts, and essential oils products that impart a desired taste, texture, aroma, or other characteristics to a broad range of consumer and other products. The Color segment produces natural and synthetic color systems for use in foods, beverages, pharmaceuticals, and nutraceuticals; colors and other ingredients for personal care, such as active ingredients, solubilizers, and surface treated pigments; pharmaceutical and nutraceutical excipients, such as colors, flavors, coatings, and nutraceutical ingredients; and technical colors for industrial applications. The Asia Pacific segment is managed on a geographic basis and produces and distributes color, flavor, and essential oils products in the Asia Pacific countries. The Company’s corporate expenses and share-based compensation are included in the “Corporate & Other” category.

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

(In thousands)	Flavors & Extracts		Color		Asia Pacific		Corporate & Other			Consolidated
Three months ended September 30, 2023:
Revenue from external customers	$	185,029	$	142,026	$	36,774	$	-		$	363,829
Intersegment revenue		5,968		2,913		-		-			8,881
Total revenue	$	190,997	$	144,939	$	36,774	$	-		$	372,710
Operating income (loss)	$	23,078	$	22,925	$	8,095	$	(9,567	)	$	44,531
Interest expense		-		-		-		6,294			6,294
Earnings (loss) before income taxes	$	23,078	$	22,925	$	8,095	$	(15,861	)	$	38,237
Three months ended September 30, 2022:
Revenue from external customers	$	181,397	$	144,570	$	35,109	$	-		$	361,076
Intersegment revenue		5,649		6,899		112		-			12,660
Total revenue	$	187,046	$	151,469	$	35,221	$	-		$	373,736
Operating income (loss)	$	26,337	$	28,200	$	6,952	$	(13,996	)	$	47,493
Interest expense		-		-		-		3,672			3,672
Earnings (loss) before income taxes	$	26,337	$	28,200	$	6,952	$	(17,668	)	$	43,821

(In thousands)	Flavors & Extracts		Color		Asia Pacific		Corporate & Other			Consolidated
Nine months ended September 30, 2023:
Revenue from external customers	$	538,753	$	455,507	$	112,888	$	-		$	1,107,148
Intersegment revenue		19,380		11,056		-		-			30,436
Total revenue	$	558,133	$	466,563	$	112,888	$	-		$	1,137,584
Operating income (loss)	$	69,714	$	84,027	$	24,911	$	(31,692	)	$	146,960
Interest expense		-		-		-		18,648			18,648
Earnings (loss) before income taxes	$	69,714	$	84,027	$	24,911	$	(50,340	)	$	128,312
Nine months ended September 30, 2022:
Revenue from external customers	$	539,014	$	440,568	$	108,721	$	-		$	1,088,303
Intersegment revenue		20,096		15,607		293		-			35,996
Total revenue	$	559,110	$	456,175	$	109,014	$	-		$	1,124,299
Operating income (loss)	$	83,929	$	90,035	$	22,877	$	(41,315	)	$	155,526
Interest expense		-		-		-		9,748			9,748
Earnings (loss) before income taxes	$	83,929	$	90,035	$	22,877	$	(51,063	)	$	145,778

Product Lines

(In thousands)	Flavors & Extracts			Color			Asia Pacific			Consolidated
Three months ended September 30, 2023:
Flavors, Extracts & Flavor Ingredients	$	124,697		$	-		$	-		$	124,697
Natural Ingredients		66,300			-			-			66,300
Food & Pharmaceutical Colors		-			107,723			-			107,723
Personal Care		-			37,216			-			37,216
Asia Pacific		-			-			36,774			36,774
Intersegment Revenue		(5,968	)		(2,913	)		-			(8,881	)
Total revenue from external customers	$	185,029		$	142,026		$	36,774		$	363,829
Three months ended September 30, 2022:
Flavors, Extracts & Flavor Ingredients	$	123,945		$	-		$	-		$	123,945
Natural Ingredients		63,101			-			-			63,101
Food & Pharmaceutical Colors		-			111,194			-			111,194
Personal Care		-			39,689			-			39,689
Inks		-			586			-			586
Asia Pacific		-			-			35,221			35,221
Intersegment Revenue		(5,649	)		(6,899	)		(112	)		(12,660	)
Total revenue from external customers	$	181,397		$	144,570		$	35,109		$	361,076

(In thousands)	Flavors & Extracts			Color			Asia Pacific			Consolidated
Nine months ended September 30, 2023:
Flavors, Extracts & Flavor Ingredients	$	383,210		$	-		$	-		$	383,210
Natural Ingredients		174,923			-			-			174,923
Food & Pharmaceutical Colors		-			346,635			-			346,635
Personal Care		-			119,928			-			119,928
Asia Pacific		-			-			112,888			112,888
Intersegment Revenue		(19,380	)		(11,056	)		-			(30,436	)
Total revenue from external customers	$	538,753		$	455,507		$	112,888		$	1,107,148
Nine months ended September 30, 2022:
Flavors, Extracts & Flavor Ingredients	$	381,041		$	-		$	-		$	381,041
Natural Ingredients		178,069			-			-			178,069
Food & Pharmaceutical Colors		-			328,087			-			328,087
Personal Care		-			126,651			-			126,651
Inks		-			1,437			-			1,437
Asia Pacific		-			-			109,014			109,014
Intersegment Revenue		(20,096	)		(15,607	)		(293	)		(35,996	)
Total revenue from external customers	$	539,014		$	440,568		$	108,721		$	1,088,303

Geographic Markets

(In thousands)	Flavors & Extracts		Color		Asia Pacific		Consolidated
Three months ended September 30, 2023:
North America	$	147,992	$	75,417	$	-	$	223,409
Europe		25,298		36,816		57		62,171
Asia Pacific		4,881		13,344		35,791		54,016
Other		6,858		16,449		926		24,233
Total revenue from external customers	$	185,029	$	142,026	$	36,774	$	363,829
Three months ended September 30, 2022:
North America	$	142,097	$	74,220	$	27	$	216,344
Europe		26,795		34,591		44		61,430
Asia Pacific		7,091		16,770		34,433		58,294
Other		5,414		18,989		605		25,008
Total revenue from external customers	$	181,397	$	144,570	$	35,109	$	361,076

(In thousands)	Flavors & Extracts		Color		Asia Pacific		Consolidated
Nine months ended September 30, 2023:
North America	$	417,095	$	231,348	$	124	$	648,567
Europe		86,092		124,465		184		210,741
Asia Pacific		16,372		47,801		110,380		174,553
Other		19,194		51,893		2,200		73,287
Total revenue from external customers	$	538,753	$	455,507	$	112,888	$	1,107,148
Nine months ended September 30, 2022:
North America	$	407,684	$	223,508	$	87	$	631,279
Europe		90,565		116,184		175		206,924
Asia Pacific		23,628		49,199		105,222		178,049
Other		17,137		51,677		3,237		72,051
Total revenue from external customers	$	539,014	$	440,568	$	108,721	$	1,088,303

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Retirement Plans

9 Months Ended

Sep. 30, 2023

Retirement Plans [Abstract]

Retirement Plans

8. 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 September 30,						Nine Months Ended September 30,
(In thousands)	2023			2022			2023			2022
Service cost	$	372		$	404		$	1,111		$	1,219
Interest cost		415			235			1,237			719
Expected return on plan assets		(248	)		(194	)		(732	)		(598	)
Recognized actuarial loss		(138	)		12			(415	)		36
Total defined benefit expense	$	401		$	457		$	1,201		$	1,376

The Company’s non-service cost portion of defined benefit expense is recorded in Interest Expense on the Company’s Consolidated Statements of Earnings. The Company’s service cost portion of defined benefit expense is recorded in Selling and Administrative Expenses on the Company’s Consolidated Statements of Earnings.

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Derivative Instruments and Hedging Activity

9 Months Ended

Sep. 30, 2023

Derivative Instruments and Hedging Activity [Abstract]

Derivative Instruments and Hedging Activity

9. 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 in order to reduce 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 generally have maturities of less than 18 months. The Company’s primary hedging activities and their accounting treatment are summarized below.

Forward exchange contracts – Certain forward exchange contracts have been designated as cash flow hedges. The Company had $16.1 million and $70.1 million of forward exchange contracts designated as cash flow hedges outstanding as of September 30, 2023 and December 31, 2022, respectively. For the three months ended September 30, 2023, gains of $0.8 million were reclassified into net earnings in the Company’s Consolidated Statement of Earnings that offset the underlying transactions’ impact on earnings in the same period. For the three months ended September 30, 2022, amounts reclassified into net earnings in the Company’s Consolidated Statement of Earnings that offset the underlying transactions’ impact on earnings in the same period were not material. For the nine months ended September 30, 2023 and 2022, gains of $1.4 million and $0.6 million, respectively, were reclassified into net earnings in the Company’s Consolidated Statement of Earnings that offset the underlying transactions’ impact on earnings in the same period. In addition, the Company utilizes forward exchange contracts that are not designated as cash flow hedges. The results of these transactions were not material to the financial statements of the Company.

Net investment hedges – The Company has designated certain foreign currency denominated long-term borrowings as partial hedges of the Company’s foreign currency net asset positions. As of September 30, 2023 and December 31, 2022, the total value of the Company’s net investment hedges was $328.8 million and $315.5 million, respectively. These net investment hedges included Euro and British Pound denominated long-term debt. 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). For the three months ended September 30, 2023 and 2022, the impact of foreign exchange rates on these debt instruments decreased debt by $11.0 million and $18.4 million, respectively, which has been recorded as foreign currency translation in OCI. For the nine months ended September 30, 2023 and 2022, the impact of foreign exchange rates on these debt instruments decreased debt by $2.8 million and $42.4 million, respectively, which has been recorded as foreign currency translation in OCI.

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Income Taxes

9 Months Ended

Sep. 30, 2023

Income Taxes [Abstract]

Income Taxes

10. Income Taxes

The effective income tax rates for the three months ended September 30, 2023 and 2022, were 17.5% and 17.7%, respectively. For the nine months ended September 30, 2023 and 2022, the effective income tax rates were 22.7% and 23.3%, respectively. The effective tax rates for the three and nine months ended September 30, 2023 and 2022, were impacted by changes in estimates associated with changes in valuation allowances, the finalization of prior year foreign tax items, and the mix of foreign earnings.

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Accumulated Other Comprehensive Income

9 Months Ended

Sep. 30, 2023

Accumulated Other Comprehensive Income [Abstract]

Accumulated Other Comprehensive Income

11. Accumulated Other Comprehensive Income

The following table summarizes the changes in OCI during the three and nine month periods ended September 30, 2023 and 2022:

(In thousands)	Cash Flow Hedges (1)			Pension Items (1)			Foreign Currency Items			Total
Balances at December 31, 2022	$	(599	)	$	(1,792	)	$	(198,297	)	$	(200,688	)
Other comprehensive income before reclassifications		2,974			-			8,977			11,951
Amounts reclassified from OCI		(1,432	)		(366	)		-			(1,798	)
Balances at September 30, 2023	$	943		$	(2,158	)	$	(189,320	)	$	(190,535	)

(In thousands)	Cash Flow Hedges (1)			Pension Items (1)			Foreign Currency Items			Total
Balances at June 30, 2023	$	1,997		$	(2,036	)	$	(177,182	)	$	(177,221	)
Other comprehensive loss before reclassifications		(239	)		-			(12,138	)		(12,377	)
Amounts reclassified from OCI		(815	)		(122	)		-			(937	)
Balances at September 30, 2023	$	943		$	(2,158	)	$	(189,320	)	$	(190,535	)

(In thousands)	Cash Flow Hedges (1)			Pension Items (1)			Foreign Currency Items			Total
Balances at December 31, 2021	$	206		$	(353	)	$	(174,481	)	$	(174,628	)
Other comprehensive income (loss) before reclassifications		516			-			(55,514	)		(54,998	)
Amounts reclassified from OCI		(621	)		24			-			(597	)
Balances at September 30, 2022	$	101		$	(329	)	$	(229,995	)	$	(230,223	)

(In thousands)	Cash Flow Hedges (1)			Pension Items (1)			Foreign Currency Items			Total
Balances at June 30, 2022	$	(152	)	$	(337	)	$	(202,683	)	$	(203,172	)
Other comprehensive income (loss) before reclassifications		380			-			(27,312	)		(26,932	)
Amounts reclassified from OCI		(127	)		8			-			(119	)
Balances at September 30, 2022	$	101		$	(329	)	$	(229,995	)	$	(230,223	)

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

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2023

Commitments and Contingencies [Abstract]

Commitments and Contingencies

12. Commitments and Contingencies

The Company is subject to various claims and litigation arising in the normal course of business. The Company establishes reserves for claims and proceedings when it is probable that liabilities exist and reasonable estimates of loss can be made. While it is not possible to predict the outcome of these matters, based on our assessment of the facts and circumstances now known, we do not believe that these matters, individually or in the aggregate, will have a material adverse effect on our financial position. However, actual outcomes may be different from those expected and could have a material effect on our results of operations or cash flows in a particular period.

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Subsequent Events

9 Months Ended

Sep. 30, 2023

Subsequent Events [Abstract]

Subsequent Events

13. Subsequent Events

On October 19, 2023, the Company announced its quarterly dividend of $0.41 per share would be payable on December 1, 2023.

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Insider Trading Arrangements	9 Months Ended
	Sep. 30, 2023
Insider Trading Arrangements [Line Items]
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

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Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2023

Accounting Policies [Abstract]

Basis of Accounting

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 period incurred.

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Trade Accounts Receivable (Tables)

9 Months Ended

Sep. 30, 2023

Trade Accounts Receivable [Abstract]

Changes in Allowance for Doubtful Accounts

The following table summarizes the changes in the allowance for doubtful accounts during the three and nine month periods ended September 30, 2023 and 2022:

(In thousands) Three Months Ended September 30, 2023	Allowance for Doubtful Accounts
Balance at June 30, 2023	$	4,293
Provision for expected credit losses		13
Accounts written off		(244	)
Translation and other activity		(76	)
Balance at September 30, 2023	$	3,986

(In thousands) Three Months Ended September 30, 2022	Allowance for Doubtful Accounts
Balance at June 30, 2022	$	4,494
Provision for expected credit losses		51
Accounts written off		(33	)
Translation and other activity		(105	)
Balance at September 30, 2022	$	4,407

(In thousands) Nine Months Ended September 30, 2023	Allowance for Doubtful Accounts
Balance at December 31, 2022	$	4,436
Provision for expected credit losses		504
Accounts written off		(1,051	)
Translation and other activity		97
Balance at September 30, 2023	$	3,986

(In thousands) Nine Months Ended September 30, 2022	Allowance for Doubtful Accounts
Balance at December 31, 2021	$	4,877
Provision for expected credit losses		883
Accounts written off		(1,129	)
Translation and other activity		(224	)
Balance at September 30, 2022	$	4,407

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Segment Information (Tables)

9 Months Ended

Sep. 30, 2023

Segment Information [Abstract]

Operating Results by Segment

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

(In thousands)	Flavors & Extracts		Color		Asia Pacific		Corporate & Other			Consolidated
Three months ended September 30, 2023:
Revenue from external customers	$	185,029	$	142,026	$	36,774	$	-		$	363,829
Intersegment revenue		5,968		2,913		-		-			8,881
Total revenue	$	190,997	$	144,939	$	36,774	$	-		$	372,710
Operating income (loss)	$	23,078	$	22,925	$	8,095	$	(9,567	)	$	44,531
Interest expense		-		-		-		6,294			6,294
Earnings (loss) before income taxes	$	23,078	$	22,925	$	8,095	$	(15,861	)	$	38,237
Three months ended September 30, 2022:
Revenue from external customers	$	181,397	$	144,570	$	35,109	$	-		$	361,076
Intersegment revenue		5,649		6,899		112		-			12,660
Total revenue	$	187,046	$	151,469	$	35,221	$	-		$	373,736
Operating income (loss)	$	26,337	$	28,200	$	6,952	$	(13,996	)	$	47,493
Interest expense		-		-		-		3,672			3,672
Earnings (loss) before income taxes	$	26,337	$	28,200	$	6,952	$	(17,668	)	$	43,821

(In thousands)	Flavors & Extracts		Color		Asia Pacific		Corporate & Other			Consolidated
Nine months ended September 30, 2023:
Revenue from external customers	$	538,753	$	455,507	$	112,888	$	-		$	1,107,148
Intersegment revenue		19,380		11,056		-		-			30,436
Total revenue	$	558,133	$	466,563	$	112,888	$	-		$	1,137,584
Operating income (loss)	$	69,714	$	84,027	$	24,911	$	(31,692	)	$	146,960
Interest expense		-		-		-		18,648			18,648
Earnings (loss) before income taxes	$	69,714	$	84,027	$	24,911	$	(50,340	)	$	128,312
Nine months ended September 30, 2022:
Revenue from external customers	$	539,014	$	440,568	$	108,721	$	-		$	1,088,303
Intersegment revenue		20,096		15,607		293		-			35,996
Total revenue	$	559,110	$	456,175	$	109,014	$	-		$	1,124,299
Operating income (loss)	$	83,929	$	90,035	$	22,877	$	(41,315	)	$	155,526
Interest expense		-		-		-		9,748			9,748
Earnings (loss) before income taxes	$	83,929	$	90,035	$	22,877	$	(51,063	)	$	145,778

Product Lines

Product Lines

(In thousands)	Flavors & Extracts			Color			Asia Pacific			Consolidated
Three months ended September 30, 2023:
Flavors, Extracts & Flavor Ingredients	$	124,697		$	-		$	-		$	124,697
Natural Ingredients		66,300			-			-			66,300
Food & Pharmaceutical Colors		-			107,723			-			107,723
Personal Care		-			37,216			-			37,216
Asia Pacific		-			-			36,774			36,774
Intersegment Revenue		(5,968	)		(2,913	)		-			(8,881	)
Total revenue from external customers	$	185,029		$	142,026		$	36,774		$	363,829
Three months ended September 30, 2022:
Flavors, Extracts & Flavor Ingredients	$	123,945		$	-		$	-		$	123,945
Natural Ingredients		63,101			-			-			63,101
Food & Pharmaceutical Colors		-			111,194			-			111,194
Personal Care		-			39,689			-			39,689
Inks		-			586			-			586
Asia Pacific		-			-			35,221			35,221
Intersegment Revenue		(5,649	)		(6,899	)		(112	)		(12,660	)
Total revenue from external customers	$	181,397		$	144,570		$	35,109		$	361,076

(In thousands)	Flavors & Extracts			Color			Asia Pacific			Consolidated
Nine months ended September 30, 2023:
Flavors, Extracts & Flavor Ingredients	$	383,210		$	-		$	-		$	383,210
Natural Ingredients		174,923			-			-			174,923
Food & Pharmaceutical Colors		-			346,635			-			346,635
Personal Care		-			119,928			-			119,928
Asia Pacific		-			-			112,888			112,888
Intersegment Revenue		(19,380	)		(11,056	)		-			(30,436	)
Total revenue from external customers	$	538,753		$	455,507		$	112,888		$	1,107,148
Nine months ended September 30, 2022:
Flavors, Extracts & Flavor Ingredients	$	381,041		$	-		$	-		$	381,041
Natural Ingredients		178,069			-			-			178,069
Food & Pharmaceutical Colors		-			328,087			-			328,087
Personal Care		-			126,651			-			126,651
Inks		-			1,437			-			1,437
Asia Pacific		-			-			109,014			109,014
Intersegment Revenue		(20,096	)		(15,607	)		(293	)		(35,996	)
Total revenue from external customers	$	539,014		$	440,568		$	108,721		$	1,088,303

Geographical Markets

Geographic Markets

(In thousands)	Flavors & Extracts		Color		Asia Pacific		Consolidated
Three months ended September 30, 2023:
North America	$	147,992	$	75,417	$	-	$	223,409
Europe		25,298		36,816		57		62,171
Asia Pacific		4,881		13,344		35,791		54,016
Other		6,858		16,449		926		24,233
Total revenue from external customers	$	185,029	$	142,026	$	36,774	$	363,829
Three months ended September 30, 2022:
North America	$	142,097	$	74,220	$	27	$	216,344
Europe		26,795		34,591		44		61,430
Asia Pacific		7,091		16,770		34,433		58,294
Other		5,414		18,989		605		25,008
Total revenue from external customers	$	181,397	$	144,570	$	35,109	$	361,076

(In thousands)	Flavors & Extracts		Color		Asia Pacific		Consolidated
Nine months ended September 30, 2023:
North America	$	417,095	$	231,348	$	124	$	648,567
Europe		86,092		124,465		184		210,741
Asia Pacific		16,372		47,801		110,380		174,553
Other		19,194		51,893		2,200		73,287
Total revenue from external customers	$	538,753	$	455,507	$	112,888	$	1,107,148
Nine months ended September 30, 2022:
North America	$	407,684	$	223,508	$	87	$	631,279
Europe		90,565		116,184		175		206,924
Asia Pacific		23,628		49,199		105,222		178,049
Other		17,137		51,677		3,237		72,051
Total revenue from external customers	$	539,014	$	440,568	$	108,721	$	1,088,303

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Retirement Plans (Tables)

9 Months Ended

Sep. 30, 2023

Retirement Plans [Abstract]

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 September 30,						Nine Months Ended September 30,
(In thousands)	2023			2022			2023			2022
Service cost	$	372		$	404		$	1,111		$	1,219
Interest cost		415			235			1,237			719
Expected return on plan assets		(248	)		(194	)		(732	)		(598	)
Recognized actuarial loss		(138	)		12			(415	)		36
Total defined benefit expense	$	401		$	457		$	1,201		$	1,376

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Accumulated Other Comprehensive Income (Tables)

9 Months Ended

Sep. 30, 2023

Accumulated Other Comprehensive Income [Abstract]

Changes in OCI

The following table summarizes the changes in OCI during the three and nine month periods ended September 30, 2023 and 2022:

(In thousands)	Cash Flow Hedges (1)			Pension Items (1)			Foreign Currency Items			Total
Balances at December 31, 2022	$	(599	)	$	(1,792	)	$	(198,297	)	$	(200,688	)
Other comprehensive income before reclassifications		2,974			-			8,977			11,951
Amounts reclassified from OCI		(1,432	)		(366	)		-			(1,798	)
Balances at September 30, 2023	$	943		$	(2,158	)	$	(189,320	)	$	(190,535	)

(In thousands)	Cash Flow Hedges (1)			Pension Items (1)			Foreign Currency Items			Total
Balances at June 30, 2023	$	1,997		$	(2,036	)	$	(177,182	)	$	(177,221	)
Other comprehensive loss before reclassifications		(239	)		-			(12,138	)		(12,377	)
Amounts reclassified from OCI		(815	)		(122	)		-			(937	)
Balances at September 30, 2023	$	943		$	(2,158	)	$	(189,320	)	$	(190,535	)

(In thousands)	Cash Flow Hedges (1)			Pension Items (1)			Foreign Currency Items			Total
Balances at December 31, 2021	$	206		$	(353	)	$	(174,481	)	$	(174,628	)
Other comprehensive income (loss) before reclassifications		516			-			(55,514	)		(54,998	)
Amounts reclassified from OCI		(621	)		24			-			(597	)
Balances at September 30, 2022	$	101		$	(329	)	$	(229,995	)	$	(230,223	)

(In thousands)	Cash Flow Hedges (1)			Pension Items (1)			Foreign Currency Items			Total
Balances at June 30, 2022	$	(152	)	$	(337	)	$	(202,683	)	$	(203,172	)
Other comprehensive income (loss) before reclassifications		380			-			(27,312	)		(26,932	)
Amounts reclassified from OCI		(127	)		8			-			(119	)
Balances at September 30, 2022	$	101		$	(329	)	$	(229,995	)	$	(230,223	)

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

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Acquisition (Details) - USD ($) $ in Thousands		9 Months Ended
	Oct. 03, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Acquisition [Abstract]
Acquisition of new businesses		$ 0	$ 1,048
Goodwill		$ 415,618		$ 415,715
Endemix [Member]
Acquisition [Abstract]
Acquisition of new businesses	$ 23,300
Debt assumed	1,300
Amount of cash held back for indemnification claims	1,700
Period for cash to be held back for post-closing working capital adjustments and indemnification claims		12 months
Net assets acquired	8,900
Goodwill	9,500
Endemix [Member] | Technological Know-how and Customer Relationships [Member]
Acquisition [Abstract]
Intangibles assets acquired	$ 4,900

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Trade Accounts Receivable (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023 USD ($)	Sep. 30, 2022 USD ($)	Sep. 30, 2023 USD ($) Segment	Sep. 30, 2022 USD ($)
Trade Accounts Receivable [Abstract]
Number of portfolio segments | Segment			1
Accounts Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance	$ 4,293	$ 4,494	$ 4,436	$ 4,877
Provision for expected credit losses	13	51	504	883
Accounts written off	(244)	(33)	(1,051)	(1,129)
Translation and other activity	(76)	(105)	97	(224)
Ending balance	$ 3,986	$ 4,407	$ 3,986	$ 4,407

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Inventories (Details) - USD ($) $ in Millions	Sep. 30, 2023	Dec. 31, 2022
Inventories [Abstract]
Finished and in-process products	$ 414.8	$ 385.2
Raw materials and supplies	$ 172.2	$ 178.9

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Debt (Details) - Senior Notes [Member] € in Millions, $ in Millions	9 Months Ended
	Sep. 30, 2023	May 31, 2023 USD ($)	May 31, 2023 EUR (€)
Long term debt [Abstract]
Debt term	5 years
Maturity date	May 31, 2028
Dollar [Member]
Long term debt [Abstract]
Senior notes | $		$ 75
Interest rate, stated percentage		4.94%	4.94%
Euro [Member]
Long term debt [Abstract]
Senior notes | €			€ 40
Interest rate, stated percentage		4.15%	4.15%

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Debt, Amendment No. 10 to the Receivables Purchase Agreement (Details)	9 Months Ended
	Sep. 30, 2023
Minimum [Member]
Schedule of Long-Term Debt [Abstract]
Maturity date	Aug. 31, 2023
Maximum [Member]
Schedule of Long-Term Debt [Abstract]
Maturity date	Aug. 30, 2024

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Fair Value (Details) - Level 2 [Member] - USD ($) $ in Millions	Sep. 30, 2023	Dec. 31, 2022
Investments, Fair Value Disclosure [Abstract]
Forward exchange contract, asset	$ 1.0
Foreign currency contracts, liability		$ 0.2
Carrying Value [Member]
Investments, Fair Value Disclosure [Abstract]
Long term debt	648.8	630.8
Fair Value [Member]
Investments, Fair Value Disclosure [Abstract]
Long term debt	$ 639.5	$ 622.2

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Segment Information, Operating Results by Segment (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023 USD ($)	Sep. 30, 2022 USD ($)	Sep. 30, 2023 USD ($) Segment	Sep. 30, 2022 USD ($)
Segment Information [Abstract]
Number of reportable segments | Segment			3
Revenue [Abstract]
Revenue	$ 363,829	$ 361,076	$ 1,107,148	$ 1,088,303
Operating income (loss)	44,531	47,493	146,960	155,526
Interest expense	6,294	3,672	18,648	9,748
Earnings before income taxes	38,237	43,821	128,312	145,778
Flavors & Extracts [Member]
Revenue [Abstract]
Revenue	185,029	181,397	538,753	539,014
Operating income (loss)	23,078	26,337	69,714	83,929
Interest expense	0	0	0	0
Earnings before income taxes	23,078	26,337	69,714	83,929
Color [Member]
Revenue [Abstract]
Revenue	142,026	144,570	455,507	440,568
Operating income (loss)	22,925	28,200	84,027	90,035
Interest expense	0	0	0	0
Earnings before income taxes	22,925	28,200	84,027	90,035
Asia Pacific [Member]
Revenue [Abstract]
Revenue	36,774	35,109	112,888	108,721
Operating income (loss)	8,095	6,952	24,911	22,877
Interest expense	0	0	0	0
Earnings before income taxes	8,095	6,952	24,911	22,877
Reportable Segments [Member]
Revenue [Abstract]
Revenue	372,710	373,736	1,137,584	1,124,299
Reportable Segments [Member] | Flavors & Extracts [Member]
Revenue [Abstract]
Revenue	190,997	187,046	558,133	559,110
Reportable Segments [Member] | Color [Member]
Revenue [Abstract]
Revenue	144,939	151,469	466,563	456,175
Reportable Segments [Member] | Asia Pacific [Member]
Revenue [Abstract]
Revenue	36,774	35,221	112,888	109,014
Intersegment Revenue [Member]
Revenue [Abstract]
Revenue	8,881	12,660	30,436	35,996
Intersegment Revenue [Member] | Flavors & Extracts [Member]
Revenue [Abstract]
Revenue	5,968	5,649	19,380	20,096
Intersegment Revenue [Member] | Color [Member]
Revenue [Abstract]
Revenue	2,913	6,899	11,056	15,607
Intersegment Revenue [Member] | Asia Pacific [Member]
Revenue [Abstract]
Revenue	0	112	0	293
Corporate & Other [Member] | Corporate and Other [Member]
Revenue [Abstract]
Revenue	0	0	0	0
Operating income (loss)	(9,567)	(13,996)	(31,692)	(41,315)
Interest expense	6,294	3,672	18,648	9,748
Earnings before income taxes	$ (15,861)	$ (17,668)	$ (50,340)	$ (51,063)

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Segment Information, Revenue from External Customers by Product Line (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Revenue [Abstract]
Revenue	$ 363,829	$ 361,076	$ 1,107,148	$ 1,088,303
Flavors, Extracts & Flavor Ingredients [Member]
Revenue [Abstract]
Revenue	124,697	123,945	383,210	381,041
Natural Ingredients [Member]
Revenue [Abstract]
Revenue	66,300	63,101	174,923	178,069
Food & Pharmaceutical Colors [Member]
Revenue [Abstract]
Revenue	107,723	111,194	346,635	328,087
Personal Care [Member]
Revenue [Abstract]
Revenue	37,216	39,689	119,928	126,651
Inks [Member]
Revenue [Abstract]
Revenue		586		1,437
Flavors & Extracts [Member]
Revenue [Abstract]
Revenue	185,029	181,397	538,753	539,014
Flavors & Extracts [Member] | Flavors, Extracts & Flavor Ingredients [Member]
Revenue [Abstract]
Revenue	124,697	123,945	383,210	381,041
Flavors & Extracts [Member] | Natural Ingredients [Member]
Revenue [Abstract]
Revenue	66,300	63,101	174,923	178,069
Flavors & Extracts [Member] | Food & Pharmaceutical Colors [Member]
Revenue [Abstract]
Revenue	0	0	0	0
Flavors & Extracts [Member] | Personal Care [Member]
Revenue [Abstract]
Revenue	0	0	0	0
Flavors & Extracts [Member] | Inks [Member]
Revenue [Abstract]
Revenue		0		0
Color [Member]
Revenue [Abstract]
Revenue	142,026	144,570	455,507	440,568
Color [Member] | Flavors, Extracts & Flavor Ingredients [Member]
Revenue [Abstract]
Revenue	0	0	0	0
Color [Member] | Natural Ingredients [Member]
Revenue [Abstract]
Revenue	0	0	0	0
Color [Member] | Food & Pharmaceutical Colors [Member]
Revenue [Abstract]
Revenue	107,723	111,194	346,635	328,087
Color [Member] | Personal Care [Member]
Revenue [Abstract]
Revenue	37,216	39,689	119,928	126,651
Color [Member] | Inks [Member]
Revenue [Abstract]
Revenue		586		1,437
Asia Pacific [Member]
Revenue [Abstract]
Revenue	36,774	35,109	112,888	108,721
Asia Pacific [Member] | Flavors, Extracts & Flavor Ingredients [Member]
Revenue [Abstract]
Revenue	0	0	0	0
Asia Pacific [Member] | Natural Ingredients [Member]
Revenue [Abstract]
Revenue	0	0	0	0
Asia Pacific [Member] | Food & Pharmaceutical Colors [Member]
Revenue [Abstract]
Revenue	0	0	0	0
Asia Pacific [Member] | Personal Care [Member]
Revenue [Abstract]
Revenue	0	0	0	0
Asia Pacific [Member] | Inks [Member]
Revenue [Abstract]
Revenue		0		0
Reportable Segments [Member]
Revenue [Abstract]
Revenue	372,710	373,736	1,137,584	1,124,299
Reportable Segments [Member] | Flavors & Extracts [Member]
Revenue [Abstract]
Revenue	190,997	187,046	558,133	559,110
Reportable Segments [Member] | Color [Member]
Revenue [Abstract]
Revenue	144,939	151,469	466,563	456,175
Reportable Segments [Member] | Asia Pacific [Member]
Revenue [Abstract]
Revenue	36,774	35,221	112,888	109,014
Intersegment Revenue [Member]
Revenue [Abstract]
Revenue	8,881	12,660	30,436	35,996
Intersegment Revenue [Member] | Flavors & Extracts [Member]
Revenue [Abstract]
Revenue	5,968	5,649	19,380	20,096
Intersegment Revenue [Member] | Color [Member]
Revenue [Abstract]
Revenue	2,913	6,899	11,056	15,607
Intersegment Revenue [Member] | Asia Pacific [Member]
Revenue [Abstract]
Revenue	$ 0	$ 112	$ 0	$ 293

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Segment Information, Revenue from External Customers by Geographic Markets (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Revenue [Abstract]
Revenue	$ 363,829	$ 361,076	$ 1,107,148	$ 1,088,303
North America [Member]
Revenue [Abstract]
Revenue	223,409	216,344	648,567	631,279
Europe [Member]
Revenue [Abstract]
Revenue	62,171	61,430	210,741	206,924
Asia Pacific [Member]
Revenue [Abstract]
Revenue	54,016	58,294	174,553	178,049
Other [Member]
Revenue [Abstract]
Revenue	24,233	25,008	73,287	72,051
Flavors & Extracts [Member]
Revenue [Abstract]
Revenue	185,029	181,397	538,753	539,014
Color [Member]
Revenue [Abstract]
Revenue	142,026	144,570	455,507	440,568
Asia Pacific [Member]
Revenue [Abstract]
Revenue	36,774	35,109	112,888	108,721
Reportable Geographical Components [Member] | Flavors & Extracts [Member] | North America [Member]
Revenue [Abstract]
Revenue	147,992	142,097	417,095	407,684
Reportable Geographical Components [Member] | Flavors & Extracts [Member] | Europe [Member]
Revenue [Abstract]
Revenue	25,298	26,795	86,092	90,565
Reportable Geographical Components [Member] | Flavors & Extracts [Member] | Asia Pacific [Member]
Revenue [Abstract]
Revenue	4,881	7,091	16,372	23,628
Reportable Geographical Components [Member] | Flavors & Extracts [Member] | Other [Member]
Revenue [Abstract]
Revenue	6,858	5,414	19,194	17,137
Reportable Geographical Components [Member] | Color [Member] | North America [Member]
Revenue [Abstract]
Revenue	75,417	74,220	231,348	223,508
Reportable Geographical Components [Member] | Color [Member] | Europe [Member]
Revenue [Abstract]
Revenue	36,816	34,591	124,465	116,184
Reportable Geographical Components [Member] | Color [Member] | Asia Pacific [Member]
Revenue [Abstract]
Revenue	13,344	16,770	47,801	49,199
Reportable Geographical Components [Member] | Color [Member] | Other [Member]
Revenue [Abstract]
Revenue	16,449	18,989	51,893	51,677
Reportable Geographical Components [Member] | Asia Pacific [Member] | North America [Member]
Revenue [Abstract]
Revenue	0	27	124	87
Reportable Geographical Components [Member] | Asia Pacific [Member] | Europe [Member]
Revenue [Abstract]
Revenue	57	44	184	175
Reportable Geographical Components [Member] | Asia Pacific [Member] | Asia Pacific [Member]
Revenue [Abstract]
Revenue	35,791	34,433	110,380	105,222
Reportable Geographical Components [Member] | Asia Pacific [Member] | Other [Member]
Revenue [Abstract]
Revenue	$ 926	$ 605	$ 2,200	$ 3,237

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Retirement Plans (Details) - Defined Benefit Plan [Member] - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract]
Service cost	$ 372	$ 404	$ 1,111	$ 1,219
Interest cost	415	235	1,237	719
Expected return on plan assets	(248)	(194)	(732)	(598)
Recognized actuarial loss	(138)	12	(415)	36
Total defined benefit expense	$ 401	$ 457	$ 1,201	$ 1,376

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Derivative Instruments and Hedging Activity (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Maximum [Member]
Derivative Instruments and Hedging Activity for the Period [Abstract]
Number of months for contracts to mature			18 months
Forward Exchange Contracts [Member] | Cash Flow Hedges [Member]
Derivative Instruments and Hedging Activity for the Period [Abstract]
Derivative, fair value	$ 16.1		$ 16.1		$ 70.1
Amount of gains reclassified into net earnings	0.8		1.4	$ 0.6
Foreign Currency Denominated Debt, Net Investment Hedging [Member]
Derivative Instruments and Hedging Activity for the Period [Abstract]
Carrying value of foreign denominated debt	328.8		328.8		$ 315.5
Impact of foreign exchange rates on debt instruments recorded in other comprehensive income	$ (11.0)	$ (18.4)	$ (2.8)	$ (42.4)

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Income Taxes (Details)	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Income Taxes [Abstract]
Effective income tax rates	17.50%	17.70%	22.70%	23.30%

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Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
		Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance		$ 1,054,264	$ 958,967	$ 999,598	$ 938,425
Other comprehensive income (loss) before reclassifications		(12,377)	(26,932)	11,951	(54,998)
Amounts reclassified from OCI		(937)	(119)	(1,798)	(597)
Ending balance		1,057,656	954,514	1,057,656	954,514
Accumulated Other Comprehensive (Loss) Income [Member]
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance		(177,221)	(203,172)	(200,688)	(174,628)
Ending balance		(190,535)	(230,223)	(190,535)	(230,223)
Cash Flow Hedges [Member]
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	[1]	1,997	(152)	(599)	206
Other comprehensive income (loss) before reclassifications	[1]	(239)	380	2,974	516
Amounts reclassified from OCI	[1]	(815)	(127)	(1,432)	(621)
Ending balance	[1]	943	101	943	101
Pension Items [Member]
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	[1]	(2,036)	(337)	(1,792)	(353)
Other comprehensive income (loss) before reclassifications	[1]	0	0	0	0
Amounts reclassified from OCI	[1]	(122)	8	(366)	24
Ending balance	[1]	(2,158)	(329)	(2,158)	(329)
Foreign Currency Items [Member]
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance		(177,182)	(202,683)	(198,297)	(174,481)
Other comprehensive income (loss) before reclassifications		(12,138)	(27,312)	8,977	(55,514)
Amounts reclassified from OCI		0	0	0	0
Ending balance		$ (189,320)	$ (229,995)	$ (189,320)	$ (229,995)

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

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Subsequent Events (Details) - Subsequent Events [Member]	Oct. 19, 2023 $ / shares
Subsequent Events [Abstract]
Dividend declared date	Oct. 19, 2023
Dividend payable (in dollars per share)	$ 0.41
Dividend payable date	Dec. 01, 2023