Attached files
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| 8-K - SENSIENT TECHNOLOGIES CORP 8-K 7-21-2011 - SENSIENT TECHNOLOGIES CORP | form8k.htm |
Exhibit 99.1
FOR IMMEDIATE RELEASE
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Contact:
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Dick Hobbs
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(414) 347-3836
Sensient Technologies Corporation
Reports Record Results for the Second Quarter Ended June 30, 2011
EPS Increases 15.5% to 67 Cents, an All-Time Quarterly Record
Color and Flavors Reach All-Time Quarterly Highs for Revenue and Operating Income
MILWAUKEE—July 21, 2011—Sensient Technologies Corporation (NYSE: SXT) reported all-time quarterly records for revenue, operating income and earnings per share for the three months ended June 30, 2011, and both the Color and Flavors & Fragrances groups reported all-time quarterly highs for revenue and operating income. Diluted earnings per share for the quarter were 67 cents, a 15.5% increase over the 58 cents reported in the second quarter of 2010. Consolidated revenue for the second quarter increased 12.9% to $377.0 million compared to $334.0 million reported in last year’s second quarter. Foreign currency translation increased revenue and operating income by approximately 6% in the quarter.
Revenue for the six months ended June 30, 2011, was $726.7 million, a 12.1% increase over the $648.0 million reported in the first half of 2010. Diluted earnings per share increased 13.2% to $1.20 compared to $1.06 reported in last year’s first half. Foreign currency translation increased revenue and operating income by approximately 4% for the year-to-date period.
For the six months ended June 30, 2011, cash provided by operating activities increased to $66.8 million, a 4.1% increase from the $64.2 million reported in last year’s first half. Total debt at June 30, 2011, was $331.4 million, a reduction of $12.5 million during the quarter and $57.7 million during the last twelve months.
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Sensient Technologies Corporation
Earnings Release – Second Quarter Ended June 30, 2011
July 21, 2011
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Page 2
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“Our businesses continue to provide outstanding results, and I am very pleased with the Company’s performance in the second quarter,” said Kenneth P. Manning, Chairman and CEO of Sensient Technologies Corporation. “All of our operating groups have further opportunities for growth, and we remain optimistic for the future.”
BUSINESS REVIEW
The Color Group reported revenue of $132.4 million in the second quarter, an increase of 17.2% over the $113.0 million reported in last year’s second quarter. Operating income for the second quarter increased 18.0% to $24.6 million from $20.9 million in the second quarter of 2010. Favorable foreign currency translation increased revenue and operating profit by approximately 7% and 8%, respectively. Revenue grew as a result of solid volume increases and the demand for natural colors remains strong.
The Flavors & Fragrances Group reported second quarter revenue of $226.5 million, an increase of 10.5% over the $205.0 million reported in the second quarter of 2010. Second quarter operating income increased 8.8% to $36.1 million from $33.2 million reported in last year’s second quarter. Foreign currency translation increased revenue and operating profit by approximately 5% and 4%, respectively.
Corporate & Other, which includes the Company’s operations in Asia Pacific and China, reported revenue of $33.6 million for the second quarter, an increase of 24.1% from the prior year’s second quarter revenue of $27.1 million.
2011 OUTLOOK
Sensient has increased its guidance for 2011 diluted earnings per share, which is now expected to be between $2.32 and $2.37. The Company’s previous guidance had been between $2.28 and $2.34.
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Sensient Technologies Corporation
Earnings Release – Second Quarter Ended June 30, 2011
July 21, 2011
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Page 3
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CONFERENCE CALL
The Company will host a conference call to discuss its 2011 second quarter financial results at 10:00 a.m. CDT on Friday, July 22, 2011. To make a reservation for the conference call, please contact InterCall Teleconferencing at (706) 645-6973 and refer to the Sensient Technologies Corporation conference call.
A replay will be available beginning at 1:00 p.m. CDT on July 22, 2011, through midnight on July 29, 2011, by calling (706) 645-9291 and referring to conference identification number 82996946. A transcript of the call will also be posted on the Company’s web site at www.sensient.com after the call concludes.
This release contains forward-looking statements (as that term is defined in the Private Securities Litigation Reform Act of 1995) that reflect management’s current assumptions and estimates of future economic circumstances, industry conditions, Company performance and financial results. A variety of factors could cause the Company’s actual results and experience to differ materially from the anticipated results, including, but not limited to the factors noted in this press release and in the Management’s Discussion and Analysis in our most recently filed annual report on Form 10-K for the year ended December 31, 2010, and quarterly report on Form 10-Q for the quarter ended March 31, 2011. The forward-looking statements in this press release speak only as to the date of this release. Sensient Technologies Corporation expressly disclaims any obligation or undertaking to release publicly any updates or revisions to such statements to reflect any change in its expectations upon which such statements are based.
ABOUT SENSIENT TECHNOLOGIES
Sensient Technologies Corporation is a leading global manufacturer and marketer of colors, flavors and fragrances. Sensient employs advanced technologies at facilities around the world to develop specialty food and beverage systems, cosmetic and pharmaceutical systems, inkjet and specialty inks and colors, and other specialty and fine chemicals. The Company’s customers include major international manufacturers representing most of the world’s best-known brands. Sensient is headquartered in Milwaukee, Wisconsin.
www.sensient.com
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Sensient Technologies Corporation
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Page 4
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(In thousands, except percentages and per share amounts)
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Consolidated Statements of Earnings
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Three Months Ended June 30,
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Six Months Ended June 30,
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2011
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2010
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% Change
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2011
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2010
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% Change
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Revenue
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$ | 376,994 | $ | 333,969 | 12.9 | % | $ | 726,680 | $ | 648,045 | 12.1 | % | ||||||||||||
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Cost of products sold
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257,851 | 229,008 | 12.6 | % | 499,830 | 448,138 | 11.5 | % | ||||||||||||||||
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Selling and administrative expenses
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64,810 | 57,815 | 12.1 | % | 128,920 | 114,106 | 13.0 | % | ||||||||||||||||
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Operating income
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54,333 | 47,146 | 15.2 | % | 97,930 | 85,801 | 14.1 | % | ||||||||||||||||
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Interest expense
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5,135 | 5,488 | 9,985 | 10,266 | ||||||||||||||||||||
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Earnings before income taxes
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49,198 | 41,658 | 18.1 | % | 87,945 | 75,535 | 16.4 | % | ||||||||||||||||
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Income taxes
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15,712 | 12,973 | 28,044 | 23,383 | ||||||||||||||||||||
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Net earnings
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$ | 33,486 | $ | 28,685 | 16.7 | % | $ | 59,901 | $ | 52,152 | 14.9 | % | ||||||||||||
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Earnings per common share:
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Basic
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$ | 0.67 | $ | 0.58 | 15.5 | % | $ | 1.21 | $ | 1.07 | 13.1 | % | ||||||||||||
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Diluted
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$ | 0.67 | $ | 0.58 | 15.5 | % | $ | 1.20 | $ | 1.06 | 13.2 | % | ||||||||||||
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Average common shares outstanding:
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Basic
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49,753 | 49,047 | 1.4 | % | 49,696 | 48,937 | 1.6 | % | ||||||||||||||||
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Diluted
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49,947 | 49,365 | 1.2 | % | 49,883 | 49,244 | 1.3 | % | ||||||||||||||||
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Results by Segment
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Three Months Ended June 30,
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Six Months Ended June 30,
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Revenue
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2011
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2010
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% Change
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2011
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2010
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% Change
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Flavors & Fragrances
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$ | 226,481 | $ | 205,047 | 10.5 | % | $ | 433,170 | $ | 395,749 | 9.5 | % | |||||||||||
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Color
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132,392 | 112,979 | 17.2 | % | 258,063 | 220,935 | 16.8 | % | |||||||||||||||
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Corporate & Other
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33,622 | 27,101 | 24.1 | % | 65,137 | 51,372 | 26.8 | % | |||||||||||||||
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Intersegment elimination
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(15,501 | ) | (11,158 | ) | 38.9 | % | (29,690 | ) | (20,011 | ) | 48.4 | % | |||||||||||
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Consolidated
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$ | 376,994 | $ | 333,969 | 12.9 | % | $ | 726,680 | $ | 648,045 | 12.1 | % | |||||||||||
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Operating Income
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Flavors & Fragrances
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$ | 36,146 | $ | 33,223 | 8.8 | % | $ | 65,104 | $ | 60,407 | 7.8 | % | |||||||||||
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Color
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24,648 | 20,880 | 18.0 | % | 46,995 | 38,988 | 20.5 | % | |||||||||||||||
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Corporate & Other
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(6,461 | ) | (6,957 | ) | -7.1 | % | (14,169 | ) | (13,594 | ) | 4.2 | % | |||||||||||
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Consolidated
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$ | 54,333 | $ | 47,146 | 15.2 | % | $ | 97,930 | $ | 85,801 | 14.1 | % | |||||||||||
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Sensient Technologies Corporation
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Page 5
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(In thousands, except per share amounts)
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Consolidated Condensed Balance Sheets
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June 30,
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2011
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2010
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Current assets
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$ | 707,296 | $ | 645,843 | ||||
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Goodwill and intangibles (net)
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479,604 | 434,052 | ||||||
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Property, plant and equipment (net)
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450,539 | 395,895 | ||||||
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Other assets
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38,657 | 35,887 | ||||||
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Total Assets
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$ | 1,676,096 | $ | 1,511,677 | ||||
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Current liabilities
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$ | 197,648 | $ | 207,953 | ||||
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Long-term debt
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309,177 | 349,485 | ||||||
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Accrued employee and retiree benefits
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56,682 | 51,259 | ||||||
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Other liabilities
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37,919 | 24,072 | ||||||
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Shareholders' equity
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1,074,670 | 878,908 | ||||||
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Total Liabilities and Shareholders' Equity
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$ | 1,676,096 | $ | 1,511,677 | ||||
| Consolidated Statements of Cash Flows | ||||||||
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Six Months Ended June 30,
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2011
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2010
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Net cash provided by operating activities
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$ | 66,835 | $ | 64,186 | ||||
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Cash flows from investing activities:
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Acquisition of property, plant and equipment
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(23,758 | ) | (19,853 | ) | ||||
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Proceeds from sale of assets
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2 | 76 | ||||||
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Other investing activity
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(155 | ) | (340 | ) | ||||
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Net cash used in investing activities
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(23,911 | ) | (20,117 | ) | ||||
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Cash flows from financing activities:
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Proceeds from additional borrowings
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43,406 | 126,253 | ||||||
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Debt payments
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(71,878 | ) | (147,965 | ) | ||||
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Dividends paid
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(21,001 | ) | (19,247 | ) | ||||
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Proceeds from options exercised and other
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2,754 | 7,768 | ||||||
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Net cash used in financing activities
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(46,719 | ) | (33,191 | ) | ||||
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Effect of exchange rate changes on cash and cash equivalents
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3,837 | (9,186 | ) | |||||
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Net increase in cash and cash equivalents
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42 | 1,692 | ||||||
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Cash and cash equivalents at beginning of period
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14,255 | 12,219 | ||||||
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Cash and cash equivalents at end of period
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$ | 14,297 | $ | 13,911 | ||||
| Supplemental Information | ||||||||
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Six Months Ended June 30,
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2011
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2010
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Depreciation and amortization
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$ | 23,474 | $ | 21,728 | ||||
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Dividends per share
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$ | 0.42 | $ | 0.39 | ||||